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Law School Outline- Intellectual Property

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Law School Outline- Intellectual Property Powered By Docstoc
					Patent Law
A. Once issued, patentee can bring suit for infringement. Typically two defenses to this: a. Accused infringer will argue that patentee’s patent is invalid for any number of reasons b. Even if patent valid, products being made or sold by accused do not infringe.

B. Requirements for Patentability a. The Patent and Trademark Office (PTO) reviews each patent application to see if it meets five requirements: i. An invention fits one of the general categories of patentable subject matter 1. Novelty: It has not been preceded in identical form in the public prior art. a. Is established by applying a set of technical rules to determine if a patent applicant was really the first to make the invention she is claiming. b. The novelty test determines whether the claimed invention is unpatentable because it was made before, sold more than a year before a patent application was filed, or otherwise disqualified by prior use or knowledge. 2. Utility: It is useful. a. Minimal obstacle to obtaining a patent. b. §101: ―whoever invents any new and useful process, machine, manufacture, or composition of matter, may obtain a patent therefore‖ c. Patent won‘t be withheld even if invention works only in experimental setting/ has no proven use in field or factory. Only denied if has absolutely no practical utility. Pharmaceuticals an exception—some cases say laboratory promise not enough to establish utility in treating humans. 3. Nonobviousness: It represents a nontrivial extension of what was known a. The most important requirement. ―the ultimate condition of patentability.‖ b. Attempts to measure more abstract quality: the technical accomplishment reflected in an invention. c. Is the invention a big enough technical advance over the prior art? Even if new and useful, not patentable if merely trivial step forward in the art.

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4. Enablement: It is disclosed and described by the applicant in a such a way as to enable others to make and use the invention a. Requires patentee to give sufficiently good description of her invention so that ―one of ordinary skill in the art‖ would be able to make and use the invention. b. Concern not whether inventor developed something worth patenting but public benefit that can be obtained from the patent ―bargain.‖ Disclosure and enablement requirements ensure that those skilled in the art of the invention can read and understand the patentee‘s contribution and that after the patent expires they will be able to make and use the invention themselves.

B. Rights Conferred by a Patent b. Claims are at the heart of patent law. They define the boundaries (metes and bounds) of the property right that the patent confers. Claims come at the end of the written description of the invention. Most patents have one or more drawings. i. Claims section often begins w/ broadest, which is then qualified by series of dependent ones. Then perhaps narrower independent, then maybe qualified by series of dependent. Generally structure of inverted pyramid. c. The Specification describes the invention. It names all the parts of components of the invention, describes how they work, and illustrates how they work together, describes how they work, and illustrates how they work together to perform the invention‘s function. Only at the end of the specification does the inventor state the precise legal definition of the invention. These are the claims. i. Independent Claims: do not refer to any other claims ii. Dependent Claims: incorporates all the limitations of the independent claim on which it depends (see example p. 113). i.e. ―according to claim 4‖ iii. Specialized claim formats – “means plus function‖ format: the claim is not described in detail but is merely listed as a means for accomplishing some goal. iv. Patent confers the right to exclude others from making, using, selling, offering for sale, or importing the claimed invention for a specific term of years. v. Till 1995, term was 17 yrs from date patent issued. Now 20 years from date patent app filed. The length under new law varies from case to case—a patent is in force for 20 years minus the amount of time the patent spent in the application or ―prosecution‖ process. d. The exclusionary right is a negative right for two reasons:

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i. Patent does not automatically grant an affirmative right to do anything; patented pharmaceuticals for instance, must still pass FDA‘s regulatory review to be sold legally. ii. A patented invention may itself be covered by a preexisting patent/ For instance, a broad pioneering patent on a product or process may cover later- developed inventions that are themselves patented as improvements. In such a case, the holder of improvement patent has right to exclude everyone form her improvement (including broad patent holder) while at same time barred from use of improvement herself unless holder of broad patent authorizes. Patents so related are ―blocking patents.‖ C. Note on the Procedures for Obtaining a Patent a. Process of obtaining patent from PTO is known as ―prosecution.‖ b. Time and effort to prosecute varies greatly from case to case. c. Estimate is that over course of prosecution, typical patent receives only 18 hrs of attention. d. Prosecution begins with filing of patent app. Can file temporary ―placeholder‖ app, called a provisional app, but must be converted into standard app w/in a year. 35 U.S.C. § 111(b). e. Basics of an application: i. The specification, including summary of invention and drawings in most cases ii. One or more claims at the end of the specification iii. An oath declaring inventor(s) actually invented what is described in the specification iv. Applicable filing fees 1. When app received, assigned to one of 17 main examining groups, then to specific art unit that specializes in relevant technology, an then to one of the 3400 patent examiners. 2. Usu 12 months or more till examiner gets app; handled in order received. In this period, can file additional papers like information disclosure statement (IDS) which describes prior art known to applicant at time of filing; preliminary amendments, which are changes made to app before examiner‘s first response or ―office action.‖ 3. Examiners usually make initial review, including search of prior art. Usu next office action is rejection of most of the claims in the app on grounds of lack of novelty or nonobviousness. 4. Examiner must state reasons for each rejection, together with information and references to aid the applicant in judging the desirability of continuing prosecution or overcoming the rejection. 35 U.S.C. § 132. Examiner has burden to show why an app should not issue as a patent. In response the applicant can either contest (aka ―traverse‖) the rejection or acquiesce in it.

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5. Aside from rejection, examiner can issue ―objection‖ which notes problems of form rather than substance in the app. Most common of these is a ―restriction requirement‖ which is used when app has claimed more than one distinct invention in a single app, a violation of § 121 of the Patent Act. In response applicant can ―elect‖ some claims from the initial application and continue prosecuting them. Others can be split into separate app a/k/a ―divisional application‖ which retains priority date of initial filing but becomes separate. 6. Generally, apps can be amended liberally during prosecution. Most common reason is response to rejection or office action. Can also correct mistakes, add or change drawings, and update disclosure portion of the specification. Standard amendments usu permitted up to time of final rejection. 7. Final rejection is misnomer. Can respond to in several ways, usu continuation or amendment after final rejection under 37 C.F.R. §1.116; can also appeal to Board of Patent Appeals and Interferences an admin tribunal w/in PTO if feels that continued prosecution would not be worthwhile. a. Continuation is basically a new version of app. See footnote p. 116 for types of continuations. Filing one resets examination process w/out having to wait a year for a response (they receive priority in processing). b. Simple continuation app retains benefit of initial app‘s filing date; it therefore may serve much the same role as an amendment. c. A continuation in part (CIP) by contrast adds new matter to specification. This does not retains the benefit of earlier filing date, but any info carried over from orig filing does. 8. A variation on the continuation theme—take bird in hand and fight contested claims separately. Filing amendment after final rejection canceling rejected claims achieves this. Puts remaining claims in condition for allowance while rejected claims can be carried over into separate continuation app. Can go fight these later. Acceptable claims become enforceable as soon as original slimmed down app is allowed to issue as patent. a. Other objectives of continuations include: b. important inventions, file one just prior to issue of patent so prosecution based on original disclosure may continue (valuable where a competitor may attempt to design around patent by adopting minor variants—can revise cont. app. To cover new variant—CIP if some matter added)

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c. in addition to various filings applicants can communicate with patent examiners by phone or in person through examiner interview. Notes made here= part of prosecution history or file wrapper, and maybe held against you possibly. d. Since 2001, patent apps published. American Inventors Protection Act of 1999 (35 U.S.C § 122(b)) all apps that cover inventions that will be subject of foreign apps published 18 mos after filing date. Where applicant interested only in U.S. patent, not published. e. After publication but before issue of patent f. Once issued, patentee can bring suit for infringement. Typically two defenses to this: i. Accused infringer will argue that patentee’s patent is invalid for any number of reasons ii. Even if patent valid, products being made or sold by accused do not infringe. 9. Standard of review of Patent Office’s decision to issue contentious. But no doubt that patent ―born valid,‖ the Patent Act includes a ―presumption of validity‖ that accompanies any issued patent. (35 U.S.C. § 282). Appeals in infringement cases go automatically to Court of Appeals for the Federal Circuit, regardless of district case filed in. a. 3 other forms of patent litigation: b. Priority dispute between 2 or more inventors, all of whom claim to have been the first. Known as interference proceedings. U.S. awards patent to first inventor, every other country awards to first to file. These proceedings are handled by the PTO internally through Board of Patent Appeals and Interferences. Appealed to CAFC. c. Declaratory judgment actions by people who reasonable fear being sued for infringement. Such actions usually met w/ counterclaims charging infringement, suit proceeds like infringement suit. d. International Trade Commission has jx to block importation of products into U.S. that infringe U.S. patents/ importation of products made abroad by processes patented in U.S. Patent owners can complain to ITC, will bring §337 actions. Have own set of proced rules that operate parallel to district court actions for patent infringement. f. Theories of Patent Law i. Central theory is that inventions are public goods that are costly to make and difficult to control once released into world. Absent patents inventors will not have sufficient incentive to invest in creating,

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developing, and marketing new products. Patent law provides marketdriven incentive to invest in innovation by allowing inventor to appropriate full economic rewards of her invention. D. The Elements of Patentability (1) patentable subject matter, (2) novelty, (3) utility, (4) nonobviousness, (5) enablement a. Patentable Subject Matter: § 101 determines which types of inventions will be considered for patent protection. Defines broadly: ―any…process, machine, manufacture, …composition of matter, or …improvement thereof.‖ Lawyers often distinguish between process claims and product claims (machine, manufacture, composition of matter). i. Diamond v. Chakrabarty: Can living things be patented? The court held
that respondent's micro-organism constituted a "manufacture" or a "composition of matter" within the meaning of 35 U.S.C.S. § 101 and thus qualified as patentable subject matter because it was a new bacterium with markedly different characteristics from any found in nature and which had the potential for significant utility. The court held that the language of 35 U.S.C.S. § 101 embraced respondent's invention.

1. Discovery versus invention Court cites Funk Brothers case which involved patent for bacteria that assists in process of nitrogen fixation in the roots of plants. The invention underlying the patent was said to be the realization that different species of bacteria could be mixed together and sold in single formula which experts previously believed was not possible. SC said this was a discovery, not an invention. ―it is no more than the discovery of the handiwork of nature and hence is not patentable.‖ Chakrabarty distinguishable because of line between discovery and invention—emphasizes transformation inventor makes on admittedly natural raw materials of invention. Funk Bros. emph the bacteria, although combined in novel way, still perform their sam old natural function. But see 35 U.S.C. § 100, which provides that invention as the term is used in Patent Act means both ―invention and discovery.‖ ii. Parke-Davis & Co. v. H.K. Mulford Co.: involved a substance that was isolate from the glands of animals for medical use—where an inventor has found a way to extract/purify a naturally created substance so that it is commercially valuable= an important doctrinal element today. Judge held that this was a patentable invention. 1. notes talk about similar but distinguishable cases. Courts have rejected isolating tungsten and tree tissue. 2. the rationale for Parke-Davis is a variation on the rule that properties of nature can be patented because they are unusable in their natural form. This the law of biotechnology in the U.S. This applies to human body parts and genetic sequences. The

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utility doctrine constrains this—must show a specific, known utility to, say, the gene sequence. 3. Harvard Mouse Case: a patent was issued for a genetic sequence that produces different cancer susceptible mouse when introduced. This included the mouse itself (the product). Canada rejected because couldn‘t describe what cause mouse to do this. iii. Note on Patenting ―Abstract Ideas‖: SC talked about Einstein‘s theory of relativity. Laws of physics are unpatentable. So are algorithms that are not reduced to a specific function. Morse was granted a patent for the telegraph process but was denied patent for the use of electromagnetism. There is a rule against patenting abstract ideas. Devices which make the abstract idea useful or practical are patentable. Morse overbroad for claiming for use of electromagnetism. Overbroad because not claiming a specific invention. Not reproducible—describing broad filed of technology but not telling how to make the invention (which is what you want to do). An example is using genetic sequencing to create a new form of plant with specific properties. Will claim for a broad genus. Unless you can show specific properties with respect to a specific plant, won‘t get patent. Have to enable across field of technology. iv. Note on Patenting Business Methods and ―Printed Matter‖ State Street: business program for pricing mutual funds by taking prices of components of pool/yielding single price for unit of value. Basically multiplication and division. Long standing doctrine precluded patenting business methods. CAFC said here there was no reason to do this. You can patent inventory control methods such as Merrill-Lynch‘s single source checking acct Prior art: body of existing knowledge. Patent examiners don‘t have scientific journals to look to for explanations of these things. This is a big burden on the patent office. Had to be a physical means for carrying out, not printed matter, but the printed matter doctrine has also disappeared. b. Utility i. Brenner v. Manson: Manson developed a kind of steroid. Was similar kind found to be useful. Had no use yet for this one, but assumed based on close relation to another steroid that had tumor inhibiting effects. Very slightly different structure but essentially the same. Claimed utility is that it could be used in testing because of similar compound‘s effect. Useful to experiments because of known similarity. Court said that was not adequate. Known to be substantial unpredictability in this field. Just because can do something to A, it doesn‘t follow that B will be useful. 1. quid pro quo: basic one contemplated by Constitution and Congress for granting patent monopoly is the benefit derived

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by the public from and invention with substantial utility— where specific benefit exists in currently available form there is insufficient justification for permitting an applicant to engross what may prove to be a broad field. 2. dissent: finds majority troubling b/c discouraging chemical research. Says need to grant patent at early stage so people will invest in research public benefit. C/a is that scientific community as a whole would be prevented from using if patent was granted—it may not be researched or developed by the patent holder. 3. Concept of a ―use patent‖—dissent in Brenner said inventor has patent for product has right to exclude all others from making, using, or selling that product for any and all purposes, including purposes that the inventor did not herself discover or invent. The U.S. allows patenting of new uses of known compounds. Use patents a/k/a process patents. i.e. AZT was for cancer, later found to be good to treat AIDS, or Viagra, which was heart drug that treats impotence. 4. At what stage is utility demonstrated? FDA approval is not a prerequisite for finding utility. This is because it could hinder research and development. Costs of Phase II testing would discourage this. No incentive to do clinical testing if these costs are expended without securing w/out securing the monopoly. Only blocking competition will encourage investment in clinical trial. U.S. has patent term extension— give more time to compensate for that lost in FDA approval. Arg against granting w/out showing of specific utility—drug companies keep patenting then marketing inconsequential changes (―evergreening‖), argument should require FDA to certify utility before granting new patent. ii. Note on Different Types of Utility 1. general: whether an invention is operable or capable of any use. The inquiry here is whether the invention as claimed can really do anything. 2. specific: whether the invention works to solve the problem it is designed to solve. The focus here is on the operability of the invention to serve its intended purpose. 3. beneficial or moral: whether the intended purpose of the invention has some minimum social benefit, or at least is not completely harmful or deleterious. If the invention does what it is supposed to, is that something that society wants done? a. Machine looks like making fresh OJ but not really. Arg for rejection is that not useful, but made to deceive public. Court says patent office couldn‘t reject. This is marketing device designed to make appear more

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desirable than it may in fact be. C/a is that this is distinguishable from CZ or seamed stockings. Know what you‘re getting there. Think this is fresh oj, its not. But, the job of the PTO is to determine if an invention, not to assign value. FTC, FDA, etc can remove from market. Not P.T.O.‘s job to worry about consumer being fooled. iii. Note on Patent Office Utility Guidelines 1. PTO has promulgated guidelines for determining specifc utility of invention. Require that asserted utility be ―specific, credible, and substantial.‖ The credibility element was well known as basis of utility rejections for far-fetched inventions. Novel aspects were specific and substantial requirements. a. Examples of insubstantial utility include using an expensive transgenic mouse as snake food and use of a laboratory derived protein as a shampoo ingredient. b. Tension between leaving things in common and private use. Which allows for more commercially useful stuff? c. Novelty and Statutory Bars i. 35 U.S.C. § 102. Conditions for Patentability; Novelty and Loss of Right to Patent 1. standards for novelty differ depending on if info was disclosed in U.S or abroad. Known/used in U.S. can defeat novelty. Higher standard for things disclosed abroad—need written docs like patent or publication. Pure protectionism or is there a rational basis? It‘s hard to be aware of prior disclosures all over the world. (it‘s also pretty hard to do this within the U.S). Rational basis for this is evidentiary. It‘s too hard to deal with evidence of things that occurred abroad. We‘re not prepared to entertain trials about what might have been said overseas—too many problems of proof. 102(a)= novelty. 102(b)= statutory bars. Statutory bars allow patent applicant to have publicly disclosed invention within one year of filing app., if waits longer, loses. A 1 yr grace period after first public disclosure. ii. The Nature of Novelty 1. Rosaire v. National Lead Co.: Can work done openly without concealment be public use or must it be specifically disseminated to the public? It isn‘t necessary to actively take steps; it‘s enough that is was done where public could‘ve seen the invention and no steps were taken to suppress the invention. Mere oral testimony is not enough to invalidate the patent on the basis of prior use. Must have more evidentiary support. Think documentary evidence. 2. Note on the Inherency Doctrine:

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a. Section 102 (a) provides that an applicant is not entitled to a patent if her invention was known or used by others prior to the date of the applicant‘s invention. The meaning of this phrase has been called into question in a series of cases involving unintended ―accidental‖ anticipation of an invention. Most of these cases involve the inherent unintended production of a particular physical product a chemical process. When an inventor later intentionally makes the product, presumably because she has some use for it, the prior unintended production of the product may be raised as prior art to the invention. i. One line of cases holds that where the first, accidental producer was not aware of the product and did not attempt to produce it, the first production did not bar a patent on the invention of the product. ii. Another line holds that if a product is known in the art already, an inventor cannot obtain a patent on the product merely by putting it to a new use even if the new result had not before been contemplated. However, the inventor could obtain a patent on the new process using that product. – What about Viagra? d. Statutory Bars: Publications i. One difference between statutory bars and novelty is that an inventor can create a statutory bar by her own actions (i.e. publication of article) whereas she can‘t destroy novelty of own inventions— inventor‘s own work cannot be cited against her under 102 (a), but it can be under 102 (b). ii. In re Hall: The one copy of a thesis in a library aborad is sufficient and constitutes a printed publication. Where librarian couldn‘t verify that the thesis had been published and available at the library, testimony about the usual process was sufficient. The statutory bar forces would be patentees to act with diligence after publishing. Peer review submissions do not count as making the publication available to the public. { Appellant applied for reissue of a patent. The application included, in an
appendix, a copy of a doctoral thesis that was found to have been available as a printed publication more than one year prior to the application's filing date. Based principally on the printed publication bar under 35 U.S.C.S. § 102(b), the application was rejected. The board of appeals sustained the rejection and appellant sought review. On appeal, the court affirmed and held that evidence in the record established a prima facie case for unpatentability of the claims under § 102(b) and that the evidence was unrebutted. The court also held that the evidence showed that the doctoral thesis at issue was available as a printed publication under the applicable statute and that a single catalogued copy constituted sufficient accessibility under the statute.}

iii. Statutory Bars: Public Use

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1. Egbert v. Lippmann:. To establish such public use it was not necessary
that more than one of the patented articles be publicly used, nor did public use necessarily depend upon the number of persons to whom the articles' use was known. Where evidence established that the original inventor made public use of the invention, presented samples of invention to others, and imposed no obligation or restriction of secrecy when samples were not presented for purposes of experiment, and when public use the invention was complete, such evidence was competent to establish public use under 5. Further, because the original inventor slept on his rights for 11 years while the invention made its way into almost universal public use, abandonment of the invention could be inferred from the conduct of the inventor.

iv. The Experimental Use Exception: 1. City of Elizabeth v. Pavement Co.: The patent infringement suit was
brought by appellee, a patent holder for a type of wooden pavement, against appellants, a city, an individual, and a corporation. Appellant city contracted with appellant corporation to construct wooden pavements but claimed that what was constructed did not infringe on appellee's patent. The court below ruled in favor of appellee and entered a decree against all appellants. On appeal, appellants claimed that appellee's invention had no novelty. The Court disagreed and found that none of the similar patents appellants referenced combined all the elements of appellee's, much less exhibited a combination of those elements arranged according to his plan. The Court also found that appellee's experimental use of his pavement prior to obtaining a patent did not constitute public use within the meaning of patent law. Accordingly, the Court affirmed the lower court's finding of infringement, but reversed the court's assessment of profits against appellant city and appellant individual. Because only appellant corporation made profit by construction of the pavement in question, the Court ordered that the decree below be amended to conform with its ruling.

e. Priority Rules and the First to Invent i. 35 U.S.C. § 102 (g). Novelty and Loss of Right. 1. 102(g)(1) covers interference proceedings: formal priority contests between rival claimants to the same patentable subject matter 2. 102(g)(2) covers the use of prior inventions as a source of prior art. Can be invoked outside interference context—i.e. defendant in an infringement suit points to 3rd partys prior invention as prior art reference to defeat validity of P‘s patent. 3. Major difference between them is territorial scope. Key phrases are ―to the extent permitted in section 104‖ in (g)(1) and ―in this country‖ in (g)(2). § 104 allows proof of prior inventions in any country that is signatory to WTO, so under (g)(1) inventors from any WTO country can introduce evidence of prior invention. Under (g)(2) only evidence of prior inventions made in the U.S. may be introduced outside the interference context. 4. Basic rule of priority are the same. Generally goes first to the inventor to a. Reduce an invention to practice without b. Abandoning the invention.

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5. Filing a valid, enabling patent application constitutes a constructive reduction to practice. Exception to this—if first conceiver was diligent in reducing to practice (diligence measured from time just prior to second conceiver‘s reduction to practice) then priority may be retained. 6. Griffith v. Kanamaru: Centers on last sentence of 102(g)— ―reasonable diligence of one who was first to conceive but last to reduce to practice.‖ Appellant was a university professor who
alleged that he had the earliest conception of technology for which appellees had filed a patent application. Appellant claimed that he delayed in reducing to practice and filing because of the university's requirement that outside funding sources be sought and to await the availability of a particular student. The Board of Patent Appeals and Interferences ruled that these excuses did not show reasonable diligence required by the exception to the first-in-time rule provided by 35 U.S.C.S. § 102(g). The court affirmed, saying that waiting for a particular graduate student was not justification because there was no showing that there was a shortage of personnel or that that individual was uniquely qualified. Nor was there a showing that appellant lacked funding, only that the university required him to pursue outside sources of funding. The court said that this was not a "hardship" case, but rather, it was similar to delay caused by desire to find a more commercially profitable form of development. The court also found that appellant had interrupted work on this project to pursue other projects and grant writing.

f. Note on the GATT Amendments i. 1994, U.S. made changes in domestic patent law after negotiations under General Agreement on Trade and Tarrifs. 1994 GATT agreement known as ―Trade-Related Aspects of Intellectual Property‖ or TRIPS. ii. Patent term changed to 20 years from date of filing of app. 35 U.S.C. § 154. Term can be extended for up to five years under circumstances such as interferences and appealed rejections. §154(b). iii. WTO members may introduce evidence of pre-patent filing inventive acts in home country for est. entitlement to patent under U>S> first to invent system. 35 U.S.C. § 104. iv. Definition of infringement expanded to include acts of unauthorized offering for sale and importing. (old only had acts of making, using, and selling). 35 U.S.C. § 271 v. Added provisional applications. 35 U.S.C. §111. must be fully enabling under §112, but does not have to include any claims. Brief description and drawing suffice to establish applicant‘s priority provided more complete application filed within one year. vi. Clock does not start until after final patent is issued 1. Note on the American Inventors Protection Act a. AIPA of 1999 made number of substantive changes to U.S. patent law, the most important of which were: b. Prior user rights for business method inventions only, protecting prior inventors from a later, valid patent. 35 U.S.C. § 273.

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i. Publication of most U.S. patent apps 18 months after filing; applications without foreign counterpart (only U.S. protection sought, are exempt. 35 U.S.C. § 122(b). ii. Expanded patent reexamination procedures permitting more 3rd party participation—large caveat though—full res judicata effect for all issues covered in the reexamination, which is expected to make this change useless. 35 U.S.C. § 311 et seq. g. Non-Obviousness i. Graham v. John Deere Co.: {While the ultimate question of patent validity is
one of law, the condition set forth in the Patent Act of 1952, 35 U.S.C.S. § 103, which is but one of three conditions, each of which must be satisfied, lends itself to several basic factual inquiries: (1) the scope and content of the prior art are to be determined; (2) differences between the prior art and the claims at issue are to be ascertained, and (3) the level of ordinary skill in the pertinent art resolved. Against this background, the obviousness or nonobviousness of the subject matter is determined. Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented. As indicia of obviousness or nonobviousness, these inquiries may have relevancy Patents are industrial policy instruments intended to balance society‘s interest in obtaining new inventions with public access to knowledge. Patents are not merely an inherent property right. Industrial and social policy instrument reflecting a balance in interests. Today there is a landrush to claim every idea one can imagine. U.S. has gone away from the Jeffersonian idea that we‘ll improve with higher dissemination of knowledge. Concepts have historically fluctuated between high and low protection modes. In this case, the court says the statutory test for obviousness is nothing new, the same standard the judiciary has had for a long time. Cites Hotchkiss test. Difficult to formulate, but tries to set out some rules. Talks about multipart test for determining if something is obvious. a) what went before—scope and content of prior art b) difference between prior art and this invention c) level of skill of someone with ordinary knowledge in that art—how much would they know? d) Secondary considerations a. Commercial success i. If more people buy, then must be a significant improvement b. Failure of others i. If others in the art had tried but couldn‘t create such an invention c. Longfelt but unmet needs

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i. If lots of farmers kept breaking plows, people
would have solved before if they could have. Why do we require distance between prior art and the claimed invention? People should earn their rewards—don‘t want to frivolously grant prizes because it imposes limitations on the public. .

ii. Note on prosecution history following John Deere: used to be called ―file wrapper‖ iii. Note 3. new compositions of matter w/ biotech process—specific process and compound are separately patentable. Patentable even if incorporate steps of generally known processes.

iv. Combining References 1. In re Vaeck: claimed invention is algae that kills mosquitoes in swamps when they eat it. Patent office said obvious to one of ordinary skill. Acknowledged differences in proteins but mechanism for coating already disclosed, so is using host to accelerate expression. Court says prior art—2 part test p. 185186: 1) whether the prior art would have suggested to those of ordinary skill in the art that they should make the claimed composition or device or carry out the claimed process and 2) whether the prior art would also have revealed that in so making or carrying out, those of ordinary skill would have a reasonable expectation of success. Both the suggestion and the reasonable expectation of success must be founded in the prior art, not in the applicant‘s disclosure. Both suggestion and the reasonable expectation of success must be founded in prior art not in the applicant‘s disclosure. Top p. 186. Not clear that would work by combining specific elements. That is nonobvious invention. 2. In re Dembiczak: Trying to patent trashbags that look like pumpkins, court says this isn‘t obvious. PTO failed by using hindsight…up until now not obvious to anybody. Cautions against looking at sublime simplicity once you see it. Discount Hindsight. Here looking at commercial success. Not longfelt unmet need or failure of others. Important principle regarding to what extent can combine prior art references—must find suggestion of combination of elements. Existence alone not enough without suggestion of combination.

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a. Note 1: line of cases where court says PTO can‘t refer to common knowledge, need authority—cite to a disclosure. b. Note 2: holding of invalidity for obviousness based on combining two references where one talks about general surface protein, not related to claimed utility an another use to screen pharmaceutical compounds. Court said could combine. Almost contrary to pumpkin case. 3. Note on Non-Obviousness and Biotechnology Inventions a. Important case of In re Bell: v. Secondary Considerations 1. recent case—moved away from using them; stressed reliance on disclosures in patent app 2. Merges: critique of using commercial success to determine patentability. What else do we want to know? Product A v. Product B. a. Marketing strategy is a big factor: How much $ did they spend? b. How much more shelf space did product B get? c. A giant multinational corporation v. inventor Bob in his garage? d. Merges favors failure of others, says that is better indicia. Too many other factors go into commercial success. h. Describing and Enabling the Invention i. The overall goal when drafting patent claims is to make them as broad as the Patent Office will allow. There are essentially two constraints on breadth of claims you can draft 1. the mass of publicly available info on your problem—the prior art 2. the actual work the inventor has done in the sense that you cannot claim anything beyond what the inventor has discovered, i/e beyond the limits of the principle of the invention a. example: Morse not allowed to claim ―all forms of communicating at a distance‖ using electromagnetic waves since he had only discovered one form—the telegraph. Unfair to allow to claim things he hadn‘t discovered like microwave communications. b. Some inventions are capable of being manifested in very wide array of embodiments. Velcro fastener: for instance present on all kinds of things. Reasonable to give patent on entire concept of new fastener.

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ii. Invention must be described sufficiently well that one of ordinary skill in the art can, relying on the description in the patent, make and use the invention. 1. how much info must be provided to meet this requirement and how broad the resulting claim will be are both controversial matters 2. the basic standard is that the written description must do two things: a. prove to the world that the applicant was in fact in possession of the invention at the time of the application, and b. enable those skilled in the relevant art to make and use the invention i. example of first issue above is Fiers v. Revel: 3 people all claimed to be first to have isolated DNA sequence for protein to use in treatment of cancer. Only person with first claim on invention could obtain patent. Court rejected Revel‘s claim to priority on the grounds that he had not listed the actual human DNA sequence in his patent app. 1. said adequate description of DNA required more than mere statement that it is part of the invention and reference to potential method for isolating it; need descrip. Of DNA itself. Revel‘s disclosure did not indicate he was in possession of the DNA, it just explained a wish, maybe a plan for obtaining the DNA. iii. The Incandescent Lamp Patent: 1. Even in cases where it‘s clear one has achieved and described his invention, the description must enable readers of patent to make and use full scope of invention as claimed by patentee. 2. In their application for the patent at issue, the patentees declared their device to be an improvement of the electric light. The alleged infringers justified their actions under certain patents to Thomas Edison, denied the novelty and utility of the holder's patent, and averred that it had been fraudulently and illegally procured. The Circuit Court held the patent to be invalid and dismissed the bill. The holder appealed, and the Court held that the claims of the patent, with the exception of one, were too indefinite to be the subject of a valid monopoly of the use of all fibrous and textile materials for the purpose of electric illumination because an examination of thousands of

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vegetable growths showed that none of them possessed the peculiar qualities that fitted them for that purpose. The Court thus determined that the fact that paper happened to belong to the fibrous kingdom did not invest the patentees with sovereignty over the entire kingdom and thereby practically limit other experimenters to the domain of minerals. The Court also found that the patentees were not in fact the first to discover that carbonized paper was the best material for an incandescent conductor. a. Headnotes from this case: i. It is required by Rev. Stat. § 4888 (modern equivalent is 35 U.S.C. §112) that an application for a patent shall contain a written description of the device and of the manner and process of making, constructing, compounding, and using it in such full, clear, concise, and exact terms as to enable any person, skilled in the art or science to which it appertains or with which it is most nearly connected, to make, construct, compound, and use the same. 1. (note 1, p. 201) The first paragraph of § 112 has been interpreted in such a way that three distinct requirements are said to spring from it: a. The written description requirement b. The best mode requirement c. The enablement requirement 2. the second paragraph adds the separate requirement of claim definiteness ii. If the description of a device in a patent application be so vague and uncertain that no one can tell, except by independent experiments, how to construct the patented device, the patent is void. iii. Where a patent is claimed for the discovery of a combination, it should state the component parts of the new manufacture claimed with clearness and precision, and not leave a person attempting to use the discovery to find it out by experiment. iv. The Gentry Gallery v. The Berkline Corp.: 1. Plaintiff sued defendant alleging that defendant infringed its patent directed to a unit of a sectional sofa by manufacturing and selling similar sectional sofas. On appeal, the court

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affirmed the trial court's holding that defendant did not infringe plaintiff's patent and the trial court's refusal to award attorney fees for the defense to defendant's assertion that the patent was unenforceable. The trial court correctly concluded that the claims were not infringed by defendant and the subject matter of the asserted claims was not shown to have been obvious. However, because the trial court clearly erred in finding that the written description portion of the specification supported certain of the broader claims asserted by plaintiff, the court reversed the decision that those claims were not invalid under 35 U.S.C.S. § 112. 2. Headnotes from case a. Whether a specification complies with the written description requirement of 35 U.S.C.S. § 112 is a question of fact, which the appellate court reviews for clear error on appeal from a bench trial. b. To fulfill the written description requirement, the patent specification must clearly allow persons of ordinary skill in the art to recognize that the inventor invented what is claimed. An applicant complies with the written description requirement by describing the invention, with all its claimed limitations. c. It is a truism that a claim need not be limited to a preferred embodiment. However, in a given case, the scope of the right to exclude may be limited by a narrow disclosure. d. Claims directed to a distinct invention from that disclosed in the specification do not satisfy the written description requirement. e. Claims may be no broader than the supporting disclosure, and therefore a narrow disclosure will limit claim breadth. 3. Gentry Gallery has been described as a case about an ―omitted element. To those who favor this terminology, the case centers on the omission of an originally disclosed element from one or more final claims. Two things to consider from this analysis a. Who suffers from the inventor‘s change of heart? i. Cases like Gentry—if the amended claims had been allowed and found valid, the patentee‘s competitor (Berkline) would have suffered. Their product would be bounced from the market, perhaps to be replaced by an identical product from the patentee. Would amount to appropriation of competitor‘s variation to original applicant. (but, in this case, only trivial variant on Gentry‘s bona fide invention—had

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doc on file that enabled artisans to arrive at variant with minimal effort) b. As far as Berkline is concerned, was purely fortuitous that Gentry had not adequately described Berkline‘s variation. No way Berkline could have found out what precisely constituted Gentry‘s initial disclosure. Nothing akin to reliance argument in favor of Berkline. Nothing they could have done to avoid Gentry‘s appropriation. 4. Gentry Gallery has been widely criticized. 5. One possible benefit of written description requirement is to preclude patent owners from later claiming what they did not think of at the time they filed their apps. This is particularly significant when patent does not issue until long after app is filed. See note 5 p. 207. v. Note on Development of the Written Description Requirement 1. took root in judicial desire to rein in free and easy patent drafting 2. particular object of judge‘s displeasure was amendment practice a. patent lawyers adept at filing apps that broadly if sometimes vaguely describe invention. Law has for many years required at least one formal claim accompany the app. Original filing merely opening bid in long game of rejections, amendments, final rejections, etc. b. While thus negotiating/amending, patent lawyers also keep eye on inventor‘s follow-up research and market into which invention has found its way. Lawyer makes amendments accordingly c. Common example—competitor introduces product that contains variant. If language in patent app allows, inventor adds claim to embrace new variant so that it infringes patent when it is issued. This is standard practice. i. From late 1980s, doctrine resuscitated. Court has pointedly deployed ―written description as independent and often very stiff requirement of patentability. Two important Cases: i. Gentry Gallery 1. Eli Lilly: a. patent app disclosed DNA sequence for rat insulin; final version claimed rat, mammalian, vertebrate, and human insulin. Closely related variants. Human differs from rat by only 12 (out of 300) pairs.

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b. Court invalidated claim to human on grounds specification did not meet written description requirement. c. cited cases holding disclosure of amino acid sequence for protein, together with well-known techniques for identifying a DNA sequence from the amino acids did not render the resulting sequence obvious under § 103. Since even obvious variants of disclosed material might not be within the written description of specification, it was clear to court that nonobvious variants were also not adequately described. ii. Note on ―Analog‖ Claims in Chemical an Biotechnology Patents: 1. Many chemicals have analogs. Two different molecules with almost identical chemical structures will normally behave in approx the same way. Same with similar DNA sequences. 2. Problem with prevalence of analogs is that if those who try to patent new chem. Or bio products claime only precise sequence or structure they have identified, it is easy for others to design around that by varying an insignificant part of the total structure. 3. To avoid this problem, patentees claim both the precise structure they have produced and its analogs. 4. To what extent claim should be allowed to preempt such analogs is difficult problem. a. Amgen : i. P and D each held patents on technology related to production of EPO (bio protein for combating anemia). P Amgen held patent on recombinant DNA version, D Chugai held license from Co-D Genetics Institute under product patent for purified EPO made by concentrating trace amounts of protein from natural sources. ii. Affirmed district court‘s invalidation of the claims under § 112. Amgen claimed every possible analog, but only told how to make and use a few of them. Court said do not intend to imply that generic claims to genetic sequences cannot be valid where they are of a scope appropriate to the invention disclosed. That was not the case here. Said more needed concerning identification of various analogs within scope of claim, methods for making them, and structural requirements for producing compounds with EPO like activity. iii. It is not necessary for patent applicant to test all the embodiments of his invention. What is

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necessary is that he provide a disclosure sufficient to enable one skilled in the art to carry out the invention commensurate with the scope of his claims. That means, for DNA sequences, testing disclosing how to make and use enough sequences to justify a grant of the claim sought. iv. Amgen‘s disclosure might justify a generic claim, but did not support claim for all EPO gene analogs. 1. generic claim: it is well established that a patent app is entitled to claim his invention generically, when he describes it sufficiently to meet the reqs of §112. A specification may, wi/in meaning of §112, paragraph 1, contain written description of broadly claimed invention without describing all species that claim encompassesprotections for analogues, etc... v. Notes following case: 1. Homology—another expansive claim format. See p. 211. 2. To what extent must the invention itself be fully described in the patent specification? 3. Atlas Powder: 4. Enablement cannot be defined without first determining who must be enabled. Patent specification not addressed to judges, lawyers, or unskilled, but to those skilled in the art. iii. Note on Best Mode Requirement 1. in addition to the written description and enablement requirements, § 112 also mandates that the patent disclose the ―best mode‖ of carrying out the invention contemplated by the inventor. a. This req designed to prevent patentee from holding back knowledge from public, in effect maintaining part of invention as trade secret while protecting whole under patent law. b. Recent opinion describes b.m.r. as effectuating ―a statutory bargained-for-exchange by which a patentee obtains the right to exclude others from practicing the claimed invention for a certain time period, and the public receives knowledge of the preferred embodiments for practicing the claimed invention.‖

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c. Best mode requirement outlined in Bayer case. i. Best mode violations are found where there is either 1. a failure to disclose a preferred embodiment, or 2. failure to disclose a preference that materially affected making or using the invention ii. There are two essential elements to the doctrine: 1. the factfinder must determine whether, at the time patent app was filed, the inventor had a best mode of practicing the claimed invention—whether there was a preferred way to build or use the claimed device or process. a. If inventor himself had no preferred way, cannot be best mode violation. [entirely subjective inquiry based on inventor‘s belief in existence of best mode] b. The actual extent of info that inventor must disclose depends on scope of claimed invention. 2. once est. that inventor actually contemplated a best mode, court will inquire whether disclosure in the specification is adequate to enable one of ordinary skill in the art to practice the best mode of the invention. a. This inquiry is objective and depends upon scope of claimed invention and level of skill in the relevant art. iii. One important issue that is sometimes litigated is the question of whether an inventor must update his or her best mode disclosure during patent prosecution. 1. In general, if material in continuation app is ―common subject matter‖ with that of orig app, the inventor need not have updated his best mode disclosure in the continuation app. An inventor only has obligation to disclose best mode in continuation app if claim feature associated w/ best mode first appeared or

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first received adequate written description in continuation. E. Infringement a. Claim Interpretation i. linguistically minor variations in phraseology and meaning= difference between finding of infringement (exclusion of competitor, maybe damages) and no infringement (open entry into at least part of the patentee‘s market). 1. interpretive sources a. Where courts look for guidance regarding the meaning of claim terms 2. canons of construction a. What general rules of interpretation courts apply in interpreting claims 3. interpretive procedures a. When in the course of patent litigation a trial court should issue a definitive ruling regarding the meaning of claim terms, and what rules apply to appeals regarding these rulings ii. Interpretive Sources Intrinsic evidence best 1. Black letter law permits recourse to 3 primary sources in interpreting claims: a. Claim Language i. Language of the claim itself is foremost. Patent law‘s version of plain meaning rule--courts often resort to common linguistic definitions in deciding between the parties‘ proffered interpretations. Everyday dictionaries. ii. Example: case turned on ―reciprocating‖. infringer said should be interpreted as linear reciprocation; court said wanted to use ordinary meaning, not limited to linear reciprocation. Another court refused to limit the term ―groove‖ where dictionaries defined it broadly. b. Patent Specification More Pioneer- greater ambiguity acceptable i. Ambiguity can be found in any source, including ordinary meanings. c. Prosecution History i. An applicant sometimes makes statements during prosecution that limit the meaning of claim terms. Extrinsic Evidence: although intrinsic evidence takes precedence, court may also look to evidence such as expert testimony, technical treatises, and others.

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Looking for objective evidence The court said that admission of extrinsic evidence is only appropriate in instances where the intrinsic evidence is insufficient to enable the court to determine the meaning of the asserted claims. Then extrinsic evidence can be relied on to understand the technology and construe the claims. Extrinsic evidence can only not be used to vary or contradict the claim language, but just to help the court come to a proper understanding. The inventor’s subjective intent (when unexpressed in the patent documents) may not have any effect. d. Bell & Howell Document Mgmt. Prods. V. Altek Sys.: similar to Vitronics. e. Other Federal Circuit cases show the court has backed off considerably from the sweeping rhetoric of Vitronics. One court explicitly called for the use of extrinsic evidence on remand. Advanced Cardiovascular Systems. Another permitted broad leeway to district courts in deciding on outside sources to help in claim construction. Pitney-Bowes, Inc. v. Hewlett-Packard Corp. Others praise the virtues of dictionaries as a resource in claim construction. Vanguard Prods. Corp. v. Parker Hannifin Corp. iii. Canons of Construction 1. Claim-Specification Relationship a. Reinshaw: two important canons of construction i. one may not read a limitation into a claim from the written description, but ii. one may look to the written description to define a term already in a claim limitation, for a claim must be read in view of the specification of which it is a part. b. These two rules lay out the general relationship between the claims and the written description) c. These two rules share two underlying propositions i. it is manifest that a claim must explicitly recite a term in need of definition before a definition may enter the claim from the written description. A party wishing to use statements in the written description to confine or otherwise affect a patent‘s scope mus, at the very least, point to a term or terms in the claim whit which to draw in those statements.

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2. Patentee as Lexicographer – their definitions control 1. Johnson Worldwide Associates, Inc. v. Zebco Corp.: 3. Claim Differentiation- redundancy to be avoided. i. Ecolab, Inc. v. Paraclipse,Inc.: narrower dependent claim later in the patent prohibited from infringer arguing for a broad, independent claim to adopt the definition in the narrower claim. 4. Presumptive Breadth a. Two general rules of claim construction amount to a set of presumptions regarding claim breadth: i. a claim should be interpreted so as to preserve its validity ii. if a claim is subject to two viable alternative interpretations, the narrower one should apply. This works as a penalty for unclear drafting or a tiebreaker from the public policy view. The rule applies only when two equally plausible meanings for a claim term are possible. It does not mean that in cases of ambiguity the narrow meaning always wins out. iv. Interpretive Procedures 1. Note on the Proper Role of Judge and Jury in Patent Cases a. Distinction between questions of law and fact is an important issue. Whether a judge or jury decides key issues such as how an invention differs from the prior art or how it works compared to a competitor‘s product may make a significant difference in the outcome of a patent infringement case. b. Markman v. Westview Instruments: judges are in driver‘s seat when it comes to interpreting patent claims. The court ruled that claim construction is a matter of law. Also, Federal Circuit has held that it will review district court findings de novo. The Supreme Court affirmed unanimously. b. Literal Infringement i. 35 U.S.C. § 271 gives patentee right to make, use, sell, offer for sale, or import invention described in the claims of the patent. Because patent is defined in terms of its claims, a patent infringement suit is resolved by comparing the claims of the patent to the accused product. ii. To literally infringe, each and every element of claim must be infringed. Presumes that each and every element of a claim is material and essential. iii. No matter how much you add beyond won‘t save you if some part infringes on elements of clam. Need license from patent holder to

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practice an improvement. Don‘t trespass if you get improvement patent. Then patent-holder blocked from using without license from you. iv. You can’t use without a license from them; called a blocking patent. v. A patent holder can seek to establish patent infringement in either of two ways: by
demonstrating that every element of a claim (1) is literally infringed or (2) is infringed under the doctrine of equivalents.

vi. Larami Corp. v. Amron: 1. does device literally infringe on each element of claims in terms of its specific wording? 2. factual question: Does Larami‘s supersoaker infringe on TTMP‘s patent( Has light and sound)—is that the same? 3. Because claim interpretation is a question of law, it is amenable to summary
judgment.

4. The words in a claim should be given their "ordinary or accustomed"
meaning. An inventor's interpretations of words in a claim that are proffered after the patent has issued for purposes of litigation are given no weight.

c. The Doctrine of Equivalents (if no similarity to one claim may use) i. Basically opposite function of literal. Each element need not be identically present in accused infringement. All required is substantial equivalent. ii. To show infringement under the doctrine of equivalents, the patent owner bears the
burden of proving that the accused product has the "substantial equivalent" of every limitation or element of a patent claim. Put another way, the patent owner must show that the accused product performs substantially the same overall function or work, in substantially the same way, to obtain substantially the same overall result as the claimed invention. (Headnote from Laramie) The doctrine of equivalents is limited by the doctrine of prosecution history estoppel. 1. to the extent an inventor has limited his invention in a particular way in the proceedings before the Patent Office, he will not be allowed to later broaden the claims through the doctrine of equivalents if that broadening will have the effect of nullifying the limitations to which the inventor agreed before the examiner. 2. it‘s a defense to infringement. The doctrine of equivalents is used to hinder the "unscrupulous copyist" who could otherwise imitate a patented invention as long as s/he was careful not to copy every inconsequential detail of the claimed inventions, or to make some "unimportant and insubstantial" change to the claimed invention. The doctrine is reserved for the exceptional case. (Headnote from Laramie). Not having doctrine creates tight limitations on rights of patent holder; people would get around by trivial changes to get around literal scope of elements of claim. Patent holder needs leeway for patent to have value; it is difficult to cover all easily foreseeable minor variations in the literal language of claim. If the public comes to believe (or fear) that the language of patent claims can never be relied on, and that the doctrine of equivalents is simply the second prong of every infringement charge, regularly available to extend protection beyond the scope of the claims, then claims will cease to serve their intended purpose. Competitors will never know whether their actions infringe a granted patent. Thus, failure to produce evidence on any one of a claim's elements can result in a grant of summary

iii.

iv.

v.

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vi.

judgment against the patent owner on the infringement claim (Headnote from Laramie) It should be noted that the doctrine of equivalents will have varying breadth depending upon the patent. 1. pioneer patent will have greater breadth that much later improvement because of the very nature of policies underlying patent law. Pioneer discovers large field for which inventor fairly with broad patent. Inventor of later improvement‘s discovery sits on shoulders of earlier pioneers— rewarded with commensurately smaller field to monopolize and range of equivalents thus shrinks.

vii. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., Inc.: (prosecution history estoppel can be a defense to doctrine of equivalents, if inventor left out the invention from the enablement, work with patent office. 1. The critical test is whether the allegedly infringing device performs substantially the same function in substantially the same way to obtain substantially the same result as the patented product or process. 2. Supreme Court here cautions doctrine is to be confined to finding that each and every element of a claim, or its equivalent is found in the alleged infringement. It is error to apply the doctrine to the invention as a whole performs substantially the same function, in substantially the same way, to achieve substantially the same result. 3. Not same as doctrine of equivalents used for means-plusfunction claims. This is called the ―limiting‖ doctrine of equivalents, which prevents those claims from having unlimited scope—limits them to only equivalents of what appears in the specification. 4. also involves prosecution history estoppel:. Hilton Davis has ‗746 patent on dye purification process. H.D. told patent examiner their app distinguishable from prior art b/c PH level btw 6 and 9. W.J.’s process at PH of 5. H.D. admits not exactly the same. Doesn’t literally infringe. But can‘t say why 6 is limitation though. WJ could use p.h.e. as defense for their alleged infringement; b/c HD limited PH to 6-9, left anything not in that scope to the public. Patent holder estopped from arguing the element of its claim could go beyond the expressed limitation. By saying 6-9, HD surrendered argument that the scope encompasses 5. 5. Court says how this should be approached: a. The burden should be placed on the patent-holder to establish the reason for an amendment required during patent prosecution. The court then would decide whether that reason is sufficient to overcome prosecution history estoppel as a bar to application of the doctrine of equivalents to the element added by that amendment. Where no explanation is established, however, the court should presume that the Patent and

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Trademark Office had a substantial reason related to patentability for including the limiting element added by amendment. In those circumstances, prosecution history estoppel would bar the application of the doctrine equivalents as to that element. 6. Court invited to do away with doctrine of equivalents. They don‘t. Say test of equivalence is an objective inquiry on an element by element basis. a. Traditional test is the ―Triple Identity Test‖ a/k/a function-way-result test. Element performs same function in same way to get same result. b. Another test is the ―Insubstantial Differences Test.‖ If not more than insubstantial difference; very subjective. Some cases apply in particular case/controversy. c. So according to the SC, what is the test? Just obj. inquiry on element by element basis. Don‘t say which of the two above is right. Have to infringe on each element. Can have combo (literally infringe on some and equivalently infringe on others). 7. What equivalents are covered? One argument is that they should be limited to things known at time the patent app is filed. Court disagrees, says that limited to things known at the time of infringement. 8. note 2 after case: a. The Supreme Court here held that ―the court should presume that the PTO had a substantial reason related to patentability for including the limiting element added by amendment.‖ From context of case, court means patentability clearly encompasses amendment to avoid rejection in light of prior art. (35 U.S.C. §§102 or 103). b. Rejections not all based on prior art, can be rejected under §112 as well. viii. DOCTRINE OF EQUIVALENTS AND PRIOR ART -Wilson Sporting Goods: Can‘t expand scope of patent by equivalent into areas encompassed by the prior art. Limits scope of equivalents [A patentee
should not be able to obtain, under the doctrine of equivalents, coverage that he could not lawfully have obtained from the Patent and Trademark Office (PTO) by literal claims. The doctrine of equivalents exists to prevent a fraud on a patent, not to give a patentee something which he could not lawfully have obtained from the PTO had he tried. Thus, since prior art always limits what an inventor could have claimed, it limits the range of permissible equivalents of a claim. Also look if it would be overbreadth.]

Equivalent at time of infringement, rather than the time of the application ix. x. If you amend for enablement, or specificity reasons ,elements left out of the claim may be left for public use. Look to see if foreseeable. If foreseeable, and left out then it is left for the public use. xi. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd.: 28

1. Next big development in D.O.E. Relationship between D.O.E. and P.H.E. at issue here. 2. Festo has patents on magnetic rodless cylinder that is in lots of crap i.e. sewing equipment. SMC is alleged infringer. Theirs has two differences re. sealing ring and magnet. SMC said Festo estopped because of added limitations in course of prosecution. Festo had argued limitation added to avoid prior art, so no estoppel. a. When estoppel applies does it stand as absolute bar to equivalence (when amendment determined to be made for reasons of patentability)? i. Once estoppel established with respect to particular element, patent holder is stuck with literal infringement. If you amend for patentability reasons, cannot invoke D.O.E. Puts double burden on patent-holder: ii. limited to literal interpretation, can‘t prove alleged infringers invention is just like that element. b. Festo: i. Patentability= any of criteria ii. When surrender under P.H.E., not absolutely barred from asserting D.O.E. Burden on patent holder to show good reason why it should not have surrendered equivalent around that element. 3. What is the SC leaving open in its flexible bar? (note 2 p. 246) 3 scenarios that get around: a. The after-arising technologies (meaning unforeseeable equivalents) method of overcoming the bar b. Amendments made for reasons tangential to the equivalent in question c. Residual category where ―for some other reason‖ the patentee could not be expected to have described the equivalent the court discusses. xii. Note: What is A Limitation? 1. Hughes Aircraft: a. ―The Williams Patent‖ D claiming doctrine equivalents does not apply. After arising technologies. b. In the original patent data transferred from satellite to ground station where calculations made, data used on ground to develop new positioning coordinates, then sent back to satelleite to change positioning. c. Technology develops that contradict literal terms of patent, yet when taken altogether provides some functionality embodied in patent app.

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d. Remanded for reconsideration on basis of Hilton-Davis (look at each element of claim). Here all elements working together deemed to infringe patent. Violated D.O.E. Ground station not sending= difference in technology. Court said this kind of technology didn‘t exist back then, so even though it doesn‘t look like it infringes, it does. These are insignificant differences. e. Hughes court struggled with two aspects of Hilton Davis: i. Adoption of element by element approach to equivalence ii. Preservation of rule that equivalence is measured as of time of infringement and not as of time of invention. iii. Ultimately concluded that subsequent developments in technology obfuscated the limitation. xiii. Subject Matter ―Disclosed but Not Claimed‖ 1. Johnson & Johnston Associates Inc. v. R.E. Service Co., Inc.: J&J have patent for making printed circuit boards with sheet of aluminum. (Say in specification that other metals can be used). RES uses steel. J&J sues for infringing under D.O.E. In patent claim says aluminum. In specification says aluminum currently preferred material but other materials such as zinc or steel may be used. RES uses steel. RES says no infringement because only claimed aluminum. 2. Court says if put in specification but unclaimed, that embodiment is dedicated to public, can‘t claim D.O>E. This is based on principle that the scope of the patent is determined by the claims. 3. Then what is the purpose of the specification? To demonstrate that applicant is able to make/let others make invention; a demonstration of enablement maybe not directly discernable from a mere review of claim. 4. Court says two potentially conflicting precedents: a. Maxwell b. YBM Magnet c. Could be within specification if part of same element but not if distinct invention. 5. Balance we‘re trying to strike in terms of breadth (Extent to which can use specification to expand scope of claim): a. Inventor‘s Interest [doesn‘t want someone to work around with minimal amount of effort] VS b. Definition and Notice Function: get patentee to be specific so those who read can understand how close

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6. 7.

8.

9.

they can come to the patent without infringing it. Public needs to know scope Result: Specified but unclaimed subject matter is dedicated to the public. Can’t be infringement. Concurring Opinion: a. Says there should be foreseeability test; this would have been foreseeable. Shouldn’t be able to expand claims to things you’d foresee at time you filed your patent application. If you’ve included in specification you have foreseen it. DOE don‘t allow if could foresee technology. Same principle, if could foresee but didn‘t claim can‘t use. Dissent: a. Says problem raised by this holding is that this will have effect on patent applicants will say as little as they can because anything in specification not in claim will be deemed dedicated to public. So lawyers will stop putting info in specification. Abbott says he thinks this rule is encouraging elaboration.

Equivalent at time of infringement, rather than the time of the application 10. Note on the Problem of After-Arising Technologies: a. When patent mere improvement, courts tend not to consider as equivalent a product or process that is even a modest distance beyond the literal terms of claims. b. But when patent represents a ―pioneer invention‖ [defined as patent concerning a function never before performed, a wholly novel device, or one of such novelty and importance as to make a distinct step in the progress in the art] it‘s entitled to a broad range of equivalents. Court will stretch to find infringement even by product whose characteristics lie considerably outside boundaries of literal claims. c. Texas Instruments case: court said combination of changes in elements enough to constitute new invention rather than infringement on old. (p.261) d. The ―Reverse‖ Doctrine of Equivalents i. DOE says can expand scope of claims outside original terms to encompass after arising devices. ii. Reverse of this: 1. situation would claim in: if I improve, say it shrinks scope of what came before. Maybe literally within scope of claim, but should narrow scope not to cover me because I‘ve done something to improve in way that patent holder did not/ could not foresee or intend to encompass. He inadvertently

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preempted my invention because of the way he drafted, but he didn‘t mean to. iii. A logical alternative to this approach: 1. a number of cases argue that the original patent was overbroad and therefore failed on enablement. Question of validity and scope. Read literally, claim encompassed, but never described in way to enable. Should either narrow scope or invalidate patent. iv. See Scripps case in note 2 p. 265. Recombinant biology—lots of cases on shift from old biology to new biology. e. Equivalents for Means-Plus-Function Claims i. These claims are limited to equivalents of what appears in the specification. Hilton-Davis. ii. §112 ¶ 6 of patent act of 1952. iii. That act invalidated many patent claims (often to processes) on grounds they covered entire functions rather than specific machines. iv. §112 ¶ 6 reflected widespread sentiment in favor of mechanism of to claim broad functional features of inventions. Doesn‘t permit claims for entire function (i.e. broadcasting or cutting) but does allow functional language in claims to cover claim elements. 1. example: patentee can claim as combination an invention consisting of novel microprocessor together with ―means for inputting data to be processed.‖ Depending on content of specification, claim might include use of novel microprocessor with data entered from keyboard, read from disk, or beamed in from remote source via wireless communication, or other ―means for inputting.‖ f. Contributory Infringement i. Committed by knowingly selling or supplying nonstaple item for which the only or predominant use is in connection with a patented invention. ii. Contributory infringer can be liable even though what he has sold is completely in the public domain and has no patent protection itself. Has practical effect of extending patent to items not patented and presents possibility of sanctioned monopoly over the unpatentable constitutional issues. iii. Defense no knowledge iv. 35 U.S.C. § 271 (c): Whoever offers to sell or sells within the united states or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.

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1. Testing the assertion of contributory infringement requires a two step analysis. a. First is a determination of the scope of the claim at issue. v. Second is an examination of the evidence before the court to ascertain whether, under 35 U.S.C.S. § 271(c), use of the device would infringe the claim. Note on Inducement (attempt to appropriate value of patent). 1. concepts of inducement and contributory infringement evolved to address infringing activity that somehow lacked the element of direct making, using or selling of patented invention. 2. contrib. inf. Sweeps into net of infringement of making, use, or sell of less than the entire patented device. 3. inducement, on the other hand involves behavior that omits any making, using, or selling, but nevertheless amounts to an attempt to appropriate the value of an invention. Often described as activity that aids and abets infringement. Liability broad enough to include host of activities, but usually involves instructing another to violate a patent. 4. case law and legislative history assert requirement of ―knowing‖ even though §271(b) does not use it. Circumstantial evidence of intent may suffice. Requisite intent may be inferred from all the circumstances. Person incused of inducing must know of the patent. Also generally required that infringer knows his activities will lead to infringement. F. Defenses a. The ―Experimental Use‖ Defense i. Judicially created exception to infringement aside from § 271. Allows for unlicensed construction and use of patented invention for purposes of pure scientific inquiry. ii. Doctrine originated in Justice Story‘s opinion in Whitmore v. Cutter: D appealed jury instruction that the ―making of a machine…with a design to use it for profit constituted infringement.‖ Justice Story upheld instruction, stated that the ―it could never have been the intention of the legislature to punish a man, who constructed such a machine merely for philosophical experiments, or for the purpose of ascertaining the sufficiency of the machine to produce its described effects.‖ Later cases followed limiting exception to these narrow grounds. iii. Bolar case: Federal circuit said experimental use exception did not include ―the limited use of a patented drug for testing and investigation strictly related to FDA drug approval requirements.‖ (Bolar did FDA

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testing so could market P‘s drug as soon as patent expired). Experimental use solely for business reasons, not for amusement or curiosity. ―Unlicensed experiments conducted with a view to the adaptation of the patented invention to the experimentor‘s business are a violation of the rights of the patentee to exclude others from using his patented invention.‖ iv. Exception to Bolar case created through legislation: see §271(c)(1): regulatory drug testing exemption from infringement that permits preexpiration regulatory testing of a patented drug. (Trade-off for exemption was patent term restoration for pharmaceutical patents which allows patentees to get extensions to offset regulatory review period.) Scope of exempt subject matter under §271(e) interpreted to cover medical devices. b. Inequitable Conduct i. Kingsdown Medical Consultants. Ltd. V. Hollister, Inc.: , 1. Inequitable conduct resides in failure to disclose material information, or submission of false material information, with an intent to deceive. 2. elements of materiality and intent must be shown by clear and convincing evidence. (findings on them subject to clear and erroneous standard of FRCP 52(a) and are not to be disturbed unless court has definite and firm conviction mistake has been made). 3. To be guilty of inequitable conduct in a patent action, one must have intended to act inequitably, not just merely negligently, or recklessly. Ignorance is Bliss ii. note 2, p. 280: many cases when one is aware of prior art but suppresses it. iii. note 3, p. 280: ―Submarine Patenting‖—has largely disappeared; arises in limited circumstances. Before 1994, the patent lasted 17 yrs from the day of its grant, so one could prosecute for a really long time. This was an incentive when the applicant was ―ahead of the technology curve. It‘s the process of delaying the grant of a patent to spring it on an unsuspecting industry. Now patent apps are public 18 months after filing. One of the reasons we moved to 20 years past filing. c. Patent Misuse i. judicial doctrine that bars patentees from enforcing their patent against infringers when they have ―misused the patent.‖ ii. Motion Picture Patents Company v Universal Film Manufacturing Company et al : camera for showing movies; can only use with a particular kind of patented film. 1. Notice license: buyer is not actually buying from patent holder, no privity of contract. A notice on the camera says it can only be used with X kind of film. These are not uncommon. The Court said the notice license was a misuse of the patent—it was extending the patent beyond its bounds. The patent holder has

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enumerated rights to prevent 3rd parties from making/using/selling the patented article. The patent holder has the right to vend the article, but he does not have the right to enlarge the scope of the patent by giving the patent holder control over a second market (in this case, the film market). 2. Staple and Nonstaple goods a. Staple: have existing market beyond use with patentcan‘t add to the patent through contract b. Non-Staple: no substantial commercial use except in connection with patent (i/e HP ink cartridge for HP printer- arguably, what a terrible holding) 3. Exhaustion Doctrine a. Once patent holder has placed good into commerce, patent holder may no longer exercise control over movement of good (exhausts rights upon first sale) b. Example: cars. Once you buy, patentholders can‘t exercise control over stuff in/on it. c. Serves as critical limitation on scope of patent rights. Patent holder recovers economic value of right in first sale; can‘t try to get any more after that. 4. Holmes‘s Dissent iii. 35 U.S.C. §271(d)… Patent Misuse Reform Act: to have patent misuse with respect to a tying product (camera) need market power with respect to the product such that you‘d control the secondary market. iv. Activities that are potential patent misuse 1. Non-metered licenses: royalty based on thing independent of patented product, such as gross level of sales. Abuse= paying for something that you don‘t need. 2. Grantback Clauses: licensee has to grant rights to any improvement patents to patentee while using licensed patent. Becomes anti-trust problem in ―exclusive grantback‖ give patentee exclusive right, licensee can‘t use improvements. 3. Field-of-use Restrictions: restricts subject matter- field of technology 4. Patent Suppression: nothing requires patent holder to use the patent. Non-use. Public good not served, undercuts purpose of patent law. G. International Patent Law 1. Procedural Rules: What kind of mechanism do we have for internationalizing a patent? a. Paris Convention i. right of priority: first app has right for one year to file in any other country that is part of Paris Union. During 1 year no one else can interfere with right, make disclosure of prior art that would prevent patentability. Patent term in every other country is based on application filing date. Different application dates in different

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countries based on application date, but only one priority date: date of first app. b. The Patent Cooperation Treaty (PCT) i. file app @ u.s. PTO. R.O.=receiving office. At any time within 12 months of filing, can designate app a PCT application and U.S. PTO will send to PCT office in Geneva. Can designate up to 120 countries where you want to file. Also designate an International Search Authority (ISA)—U.S. PTO is one, usually designate them, they do search report. Within 16 months of application, get report regarding prior art things to consider for patentability. 18 mos app published. 20 mos can decide to enter national phase: choose which designated countries to file in (a uniform patent app); this is National Phase I. ii. OR National Phase II: examination phase. Choose IPEA, they do development report on patentability; 28 mos get exam report; 30 moscan enter national phase. Few companies patent everywhere. Main benefit: don‘t pay filing fees till 30 mos, so have good idea of whether will succeed commercially and right of priority is preserved to the 30th instead of the 20th. 2. Substantive Harmonization and GATT-TRIPs (see p. 296 for bulleted list of what it requires, changes it made to U.S. law) H. Remedies a. Generally i. Remedies in IP similar to property law. ii. Measure of patentee‘s injury involves number of difficult to answer questions such as 1. what would have happened to the patentee‘s operations without the infringement? 2. what could competitors have done if the patentee had controlled the market for the patented component by herself? 3. In the field of technology where the patent exists, what will happen over the next 15 to 20 years? iii. Remedies for Infringement under Patent Act: 1. injunctive relief §283 2. damages, adequate to compensate the plaintiff, but in no case less that what would constitute a reasonable royalty, which damages can be trebled when appropriate, 35 U.S.C.§284 3. attorneys‘ fees in exceptional cases §285 4. costs §284 b. Injunctions i. Valuation problem 1. It is hard to put a precise dollar value to a particular piece of patented technology, especially over a protracted period.

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2. valuation problem is key to understanding why the injunction, and not damages, is the standard remedy in a patent case. a. Of course with respect to infringement that takes place prior to litigation, damages are the only remedy available, so valuation problems cannot be avoided entirely. 3. Negotiation of License Agreements: The purpose of injunctive remedies goes beyond allowing the rightholder to prevent activities of the infringer. a. Threat of injunction heavily influences terms of license to extent rightholder will consider negotiating one with the infringer. b. Allows rightholder to set own price for terms of license agreement that settles the infringement litigation. c. Courts think this is the efficient result because courts called on to set terms of exchange would have to spend lots of time and money i. Specialized nature of assets ii. Varied and complex business environments d. Three potential problems with allowing parties to bargain themselves: i. Parties may not know value of technology over which they are negotiating. ii. Transaction costs associated with such licensing agreements can be significant. iii. Strategic behavior may cause parties to forego some deals that would be in the best interests of both sides. 1. see note 2, p. 299 for example of strategic behavior. ii. H.H. Robertson Co. v. United Steel Deck: 1. an applicant for a preliminary injunction against patent infringement must show: a. a reasonable probability of eventual success in the litigation, and b. that the movant will be irreparably injured pendente lite (during the suit) if relief is not granted …Moreover while the burden rests upon the moving party to make these two requisite showing, the district court ―should take into account, when they are relevant: i. the possibility of harm to other interested persons from the grant or denial of the injunction, and ii. the public interest

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2. In matters involving patent rights, irreparable harm has been presumed when a clear showing has been made of patent validity and infringement. a. This presumption derives in part from the finite term of the patent grant, for patent expiration is not suspended during litigation, and the passage of time can work irremediable harm. Opportunity to practice invention during notoriously lengthy course of patent litigation may itself tempt infringers. b. The nature of the patent grant weighs against holding monetary damages will always suffice to make patentee whole, for principal value of patent is statutory right to exclude 3. even when irreparable injury is presumed and not rebutted, it is still necessary to consider the balance of hardships. Balancing Tests a. Magnitude of threatened injury to patent owner is weighed in light of strength of the showing of likelihood of success on the merits against injury to accused infringer if preliminary decision is in error. Results of other litigation involving the same patent may be taken into account and the public interest is considered. No one element controls the result. 4. injunction preserves status quo if it prevents future trespasses but does not undertake to assess consequences of past trespasses. For past infringement, only monetary relief as remedy. iii. Kodak: 1. public interest: considered in deciding whether to grant stay of an injunction. 2. the public policy at issue in patent cases is the ‗protection of rights secured by valid patents.‘ Courts grant—or refuse to stay—injunctions in order to safeguard that policy, even if those injunctions discommode business and the consuming public. 3. disruption of business, injury to Kodak customers and goodwill not public benefit at issue in patent cases. iv. Those both cases of preliminary injunctions. When full trial concludes with finding of infringement, this almost never any doubt that a permanent injunction will issue. Very rarely court will deny permanent. v. Treatment of patent as a liability right is rare case in patent law. 1. Foster v. American Mach. & Foundry Co.: court upheld what amounted to compulsory license; reasonable royalty damage award, but no injunction.

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2. injunction equitable remedy to be determined by circumstances, not ―club to be wielded by a patentee to enhance his negotiating stance.‖ 3. approve of flexible approach in patent litigation of avoiding ordering a cessation of business to the benefit of neither party by compensating appellant in the form of a compulsory license with royalties. Compulsory license is a benefit to patentee who has been unable to prevail in request for injunctive relief. Granting compulsory royalty gives him half a load. Fair b/c of his utter failure to exploit patent on his own. 4. What difference should it make that patentee does not manufacture anything—i.e. is not practicing the patent? In theory has right not to, but other cases have taken this into account in setting remedies. c. Damages: Reasonable Royalty and Lost Profits i. Panduit : 1. Often used four factor test for determining lost profits: To obtain as damages the profits on sales he would have made absent the infringement, i.e. the sales made by the infringer, a patent owner must prove: a. Demand for the patented product b. Absence of acceptable non-infringing substitutes c. His manufacturing and marketing capability to exploit the demand, and d. The amount of the profit he would have made 2. Lost profits are available if there are ―no adequate substitutes.‖ 3. When actual damages, e.g. lost profits, cannot be proved, the patent owner is entitled to a reasonable royalty. a. Reasonable royalty is amount which a person, desiring to manufacture and sell a patented article, as a business proposition, would be willing to pay as a royalty and yet be able to make and sell the patented article, in the market, at a reasonable profit. (Go backwards from reasonable sales price). ii. Polaroid Corp. v. Eastman Kodak Co.: 1. court assessed total damages of $873,158,971 2. since some fed circuit cases suggest patent almost insures that there are no adequate substitutes (recall uniqueness), the Polaroid court might have simply refused to consider evidence of conventional camera sales altogether. At other extreme, recent antitrust thinking patent almost never confers ―market power‖ in economic sense, so elasticities and such could establish absence of substitute products. 3. Polaroid steers middle course: concedes no substitutes in market for patented products, but court goes on to consider the effect of economically significant products on profit the

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patentee would have made absent infringement, even though products not close substitutes in strict sense. There may be no exact substitutes, but at some price and for some consumers, there are economic substitutes. These exert price discipline on patentee‘s pricing. Think at some price reliance on inferior goods. iii. Note on the Frontiers of Lost Profits Damages 1. Price Erosion a. At what price could patentee have sold if no infringement? b. Economic theory advises monopolist will charge higher price than duopolist (seller in two-firm market). Some patentees have successfully argued that they would have sold infringer‘s units plus their own, all at higher price than they actually charged. c. Lost Sales of Unpatented Components or Products i. Infringer‘s presence cost sales of these, losses are compensable ii. Analyzed under ―entire market value‖ rule, which directs court to ascertain whether unpatentable components at issue are functionally integral to an overall product whose consumer demand is based on the patented component iii. Idea is that unpatented component would naturally and normally be sold along with patented, thus patentee deserves compensation for lost sales of both. d. Post-Expiration Sales i. Theory that infringement during term of patent gave infringer head start on post-expiration sales since infringer did not have to start up production and marketing after patent expired. An ―accelerated reentry theory‖ I. Design and Plant Patents a. § 101 is subject matter provision of what is referred to as the utility patent statute. Most patents issued in U.S. are utility ones. Several other provisions cover related material, most importantly designs and certain types of plants. b. Design Patents i. Introduction 1. design patent protects aesthetic appearance of product rather than its functional features. 2. obtained for wide range of products including: shoes, hats, furniture, tools, packaging, TVs, cars, computer graphics 3. overlaps with copyright, TM, unfair competition law

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4. Design patent system criticized as ineffective and in need of reform: long processing, high fees, strict vague requirements, judicial hostility. Courts recently more receptive. 5. appearance, rather than utility, is crucial factor 6. Design may consist of surface ornamentation, configuration, or combination of both. 7. issued for 14 year term. Can be obtained for ―any new, original, and ornamental design for an article of manufacture‖ most provisions relating to patents for inventions also apply to these. § 171 a. article of manufacture broadly defined to include: silverware, furniture, cement mixers, containers for liquids. b. One court said manufacture is anything made by the hands of man from raw materials whether literally by hand or by machinery or by art c. May be obtained for only part of an article (i/e shank of a drill bit) ii. Requirements for Patentability 1. Design must meet these requirements: a. Novelty b. Originality c. Nonobviousness d. Ornamental e. Not dictated by functional consideration 2. PTO definition of design on p. 308. 3. Novelty a. No prior art shows exactly the same design b. Novel if ordinary observer viewing design as a whole would consider it different from (rather than modification of) an already existing one. c. §102(b): one year novelty grace period allows patent for design as long as design has not been published anywhere or sold or displayed w/in US more than one year before app filed. Gives designer opportunity to test market before incurring expense of app 4. Nonobviousness a. Requires exercise of inventive or originative faculty b. Graham test can apply to design patents, nonobviousness measured in terms of a ―designer of ordinary capability who designs articles of the type presented in the application i. Graham test, again, requires court to ascertain scope and content of prior art, differences between prior art and claim at issue, and the level of ordinary skill in the art.

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ii. Design standard allows for objective evidence of expert testimony from designers in field to be used to prove nonobviousness. c. Fed Circuit has emphasized presumptive validity of design patent, places burden on challenger to come forward with clear and convincing proof of nonobviousness. d. To find obviousness, reference must be made to prior art with same overall appearance of patented design, rather than combination of features from several references. e. Objective secondary considerations also apply to design patents. 5. Ornamentality a. Must create more pleasing appearance b. To satisfy requirement, must be ―the product of aesthetic skill and artistic conception.‖ c. Has been met by articles outside realm of traditional art. d. Number of cases have denied patentability to designs concealed during normal use of object on basis ornamentality requires to be visible while object in normal and intended use. 6. Functionality a. If design ―primarily functional rather than ornamental,‖ or is ―dictated by functional considerations‖ it is not patentable. b. This rule furthers purpose of d.p. statute, which is to promote the decorative arts c. Additionally prevents granting monopoly to functional features that do not meet requirements of a utility patent. d. Fed Circuit says design may have functional components as long as design does not embody a function that is necessary to compete in the market iii. Claim Requirements and Procedure 1. high cost 2. pendency time approx 2-3 years 3. criticized as ―unsuited to the fast-moving but short-lived product cycle characteristic of today‘s market for massproduced consumer goods.‖ iv. Infringement 1. standard: ―if in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase on supposing it to be the other, the first one patented is infringed by the other.‖ 42

Gorham. Key factor is similarity, rather than consumer confusion. 2. second prong of infringement analysis is the ―point of novelty‖ test. Distinct from issue of similarity. The similarity found by the ordinary observer must be attributable to the novel elements of the patented design that distinguish it from prior art. (Scope of patented claim and its points of novelty are determined by examining field of prior art. ) 3. after determining scope of claim, focus is only on protectable aesthetic components of patented design. Permits excuses for borrowing commonplace, generic ideas while adding sufficient variation to protectable elements of design. 4. indication is that Fed Circuit willing to extend design patent protection beyond literal infringement and protect design concept itself. c. Plant Patents i. The Plant Patent Act 1. 35 U.S.C. §§161-164 a. Extends protection to inventors and discoverers of ―any distinct and new‖ variety of asexually reproducing plant. b. Plant used in lay sense, bacteria not eligible. c. Except as otherwise provided, provisions applying to utility patents apply to plant ones. d. Elements of patentability are different: i. Distinctness substituted for utility. Measured by examining characteristics that make plant entirely distinguishable from other existing plants. ii. Nonobviousness difficult to apply. Viewed as requirement for invention resulting in substantial distinctions in the plant. iii. Exempt from written description requirement. e. Protection they offer: exclusive right to reproduce plant asexually. f. Each patent app may include only one claim directed specifically to plant shown and described. g. Doctrine of Equivalents cannot be used with them. ii. The Plant Variety Protection Act 1. 7 U.S.C. §§2321-2582 2. parallels PPA for plant varieties that are sexually reproduced by seed. Applicants not awarded patent, but Certificate of Plant Variety Protection. 3. variety needs distinctness, uniformity, and stability. Distinctness most critical—―clearly differs by one or more

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identifiable morphological, physiological or other characteristics.‖ 4. PVPA registration system, but has statutory bars, content requirements for apps, requirement for seed deposit. So kind of like utility patent. But, special features: a. Mandatory license, series of statutory exemptions for saved seed, exemption for sales by farmers (to other farmers), research exemption. 5. Certificate grants breeder right to exclude others from ―selling the variety, or offering it for sale, or reproducing it, or exporting it, or using it in producing a hybrid or variety therefrom. Protection lasts 18 years. Ip rights have affected growth and structure of seed industry. Critics say have accelerated centralization and loss of economic power by small farmers. Some poor tropical countries say they own genetic material from plants growing inside borders, charge other countries royalties to remove for research or development of new products.

Trademarks
Purpose of Trademark Law a) Source identification : permit consumers to identify the source of goods or services. Brand Source Identification. b) Eliminates consumer confusion, or reduces related transaction costs: trademark law ensures that consumers are able to rely on marks in exercising their preferences by prohibiting competitors from using marks in a way that confuses consumers about the source of a product or service (1) consumers benefit b/c they are able to identify and obtain the goods or services that they want, quickly (2) businesses benefit b/c trademark law helps them create and protect business good will good will: business‘ image, good reputation, and expectation of repeat patronage which, while intangible, can be extremely valuable- cannot be nakedly licensed, (without underlying business-may change in future because of TRIPS evident of move towards property rights.) Relationship between Common Law (enforced by the states) and Federal Law under the Lanham Act c) state: trademark law originated as one of several related doctrines comprising the common law (1) relief through unfair competition

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(2) still alive today – but get more protection through federal registrationstate protection is local and extends only to areas in which the company has developed a reputation. d) federal: congress passed a series of statutes which incorporated and built up on the common law trademark doctrine (1) relief through the Lanham Act: section 1051: enhances the common law by providing a system for registering marks (2) registration provides a number of benefits such as (a) rights in a broader geographic area (b) legal presumptions of trademark validity (including possible incontestability) Brief Overview of TM Theory e) Trademarks do not depend on novelty, invention, discovery or work of the brain. (1) protection is awarded merely to those who were the first to use a distinctive mark in commerce (2) certain marks are unprotectable b/c they are generic terms describing an entire class of goods. Allowing one user to appropriate these marks would give that user an unfair degree of control over the product the generic term describes. (Can competitors fairly describe their product without mentioning the TM?) f) Fundamental principle of TM law have essentially been ones of tort (1) Misappropriation of the goodwill of the TM owner and deception of consumer (2) TM are not analogous to property rights, but there are some twigs that resemble property rights (3) Rights acquired w/ use of TM in commerce and continue as long as use continues (a) 1988: now possible to register and protect TM based on intent to use mark in commerce at some time in next 3 years. But right remains inchoate until use actually happens g) infringement (1) Under Lanham act, test is likelihood of confusion. (2) can‘t get away w/ just saying the mark is similar – ultimate question is are consumers going to be confused and if no, defendant is free to make use of the mark. (3) This act provided advantages for registering TMs and giving separate protection for unfair methods of competition for unregistered marks. TMs and Advertising h) Differentiate between product‘s simple search characteristics (price, color, shape, size and product category) and its more complex experience aspects such as taste or long term durability (1) Former (Search Characteristics) are aspects of product quality that consumers can verify by inspecting the product before they buy it. It is easy to see why firms would invest in advertising those qualities: they are

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basic aspects of a product and consumers can easily verify whether claims are true. (2) Experience characteristics by contrast, cannot be cheaply investigated before purchase. They will be discovered only through use. (a) Wine is an obvious example, but many other goods share the same characteristic. Courts and commentators speak of economic value of consumer‘s association w/ a firm and its TM as the firm‘s goodwill. Goodwill can be thought of as the residual benefit the firm gets from these types of investments. What can be protected as a Trademark: Lanham act distinguishes in form between several different types of marks: i) Trademarks (1) TMs are the words, phrases, logos, and symbols that producers use to identity their goods- and in the case of a special thread that had secondary meaning- smell. (According to Qualitex, a color must always achieve secondary meaning- probably true for smell, but maybe not sound…) (2) goal: indicate the source of the goods (3) the term TM includes any word, name, symbol or device or any combination thereof – (a) used by a person, or (b) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this Act, (c) to identify and distinguish his / her goods including a unique product from those manufactured or sold by others and to indicate the source of the goods even if that source is unknown (4) word, name, symbol or device: range is great – can include (a) slogans (b) distinctive features of the product‘s packaging (c) sounds and smells (Law and Order sound) j) Service Marks: same as trademarks except that they identify and distinguish services rather than products (1) Term TM does not cover another closely associated type of business identifier, the service mark (2) goal: indicate the source of the services, not the service (3) Service mark – term SM means any word, name, symbol, or device or any combination thereof (a) used by a person, or (b) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this Act, (c) to identify and distinguish the services of one person, including a unique service, from the services of others and to indicate the source of the services. Titles, characters, names and other distinctive features may be registered as service marks notwithstanding that they or the programs may advertise the goods of the sponsor.

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(4) subject to many of same rules as TMs 1. One issue that sometimes arises involves attempts to register service marks for services closely related to sale of goods. 2. In general where services are expected or routine in connection w/ the goods such registrations are rejected – must show service is sufficiently separate from good 3. test is whether the service is normally expected and routinely rendered in furtherance of the sale of goods – if yes then insufficient 4. The theory is that otherwise closely related registrations will proliferate, clogging the register. k) Trade Names (1) Rather than goods or services, trade names ID the company itself. (2) can‘t be registered under Lanham act unless they actually function to ID the source of particular goods or services rather than merely IDing the company (3) However trade names are generally registerable in state offices, and state / federal common law may provide protection against confusingly similar company names. l) Certification Marks: words, names, symbols, devices, or combinations thereof used by person other than its owner, or which its owner has a bona fide intention to permit a person other than the owner to use in commerce and files an application to register on the principal register established by this chapter to certify regional or other origin, material, mode of manufacture, quality, accuracy, or other characteristics of such person‘s goods or services or that the work or labor on the goods or services was performed by members of a union or other organization (1) characteristics: might include such things as origin in a particular geographical region, composition from a particular material, quality, accuracy or creation through labor union etc. (2) These marks are generally used by trade associations or other commercial groups to ID a particular type of goods (3) Certification marks serve to certify conformity with centralized standards. (4) They are meant to bear the seal of approval of a central organization, so they can be cancelled on the ground that the organization no longer exercises sufficient control over its members to assure consistent product standards (5) I.E. french winemakers have such a mark in champagne. Only sparkling wine made w/in that region (Champagne) in France and complying with the French law governing winemaking can legally call itself champagne.. m) Collective Marks or Certification Marks: TM or SM (1) used by the members of a cooperative, an association, or other collective group or organization, or

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(2) which such cooperative, association, or other collective group or organization has a bona fide intention to use in commerce and applies to register on the principal register established by this chapter and includes marks indicating membership in a union, an association, or other organization. (3) If a collective group markets its own goods / services under a mark that mark is not a collective mark but a TM or SM. (a) membership marks: adopted for the purpose of indicating membership in an organization such as a union, professional society, or a social fraternity Trademarks or service marks: trademarks or services adopted by a collective organization such as a co-op for the use by its members in selling their individual goods or services distinguishing their goods or services from those of nonmembers. Collective never sells anything but it may advertise or promote goods sold by members (or services) Certification Marks are not used in commerce in relation to a particular good, but a standard of quality- kind of like the Good Housekeeping Seal. Trade Dress and Product Configuration n) Protection for: (1) the design and package of materials and even the designand shape of a product itself, if the packaging or product configuration serve the same source identifying function as TMs. (2) You can register both Trade Dress and product configurations as TMs under the act. (3) However, b/c of their complex and changing nature most Trade Dress and product configuration are protected w/out registration under section 43(a) of the act. 1. 43(a)(1)any person who, on or in connection w/ any goods / services, container for goods, uses in commerce a word, term, name, symbol, or device or any combination thereof or any false designation of origin, false, or misleading description of fact or false or misleading representation of fact, which i. (A) Is likely to cause confusion or to cause mistake, or to deceive as to the affiliation, connection, or association of such person w/ another person or as to the origin, sponsorship, or approval of his/her goods, services, or commercial activities by another person, or ii. (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his / her or another‘s goods, services, or commercial activities,

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2. shall be liable in a civil action by any person who believes that he / she is or is likely to be damaged by such act (4) Section 43(a) is commonly referred to as providing federal common law protection for TMs and related source identifiers Special Considerations for Color, Fragrance and Sounds: Qualitex – dry cleaner pads in green and gold are at issue. (5) Issue: whether Lanham act permits registration of a TM that consists purely of a color. Held: Court concludes that sometimes color meets ordinary legal TM requirements. When it does, no special legal rule prevents color alone from serving as a TM. Pads at issue meet requirements & are protectable (6) A symbol or device might be anything capable of carrying meaning and this can include color. (7) Color is not arbitrary or fanciful. However, over time customers may cone to treat a particular color on a product or its package as signifying the goods – to indicate their source. It thus acquires secondary meaning. (8) Protection for color is easiest where there is no necessary relationship between the color and the product. I.E. pink insulation – insulation had always been clear but made it pink, etc. People associate it with that company (9) Rule: When color attains secondary meaning and thus identifies or distinguishes a particular brand (and thus indicates its source) it is protectable as a TM (10) Court says although some color plays important role (not related to source ID) in making product more desirable, sometimes it does not. fact that sometimes color is not essential to a product‘s use or purpose and does not affect cost / quality indicates that functionality does not create an absolute bar to use of color alone as a mark. Color of pads has no functionality here- different than in pharmaceutical case. (11) If color serves useful purpose can‘t protect it – don‘t want to put competitiors at disadvantage b/c have to choose other color. I.E. pill colors can be copied. Color and shape serve function – identifies an entire class of goods (pill) Establishment of Trademark Rights o) Not all identifying marks get protection though (1) Only certain TMs get legal protection: (2) Some tms are inherently distinctive – i.e. apple for computers – no one would associate apple w/ computers before the company (a) For marks that are inherently distinctive, protection is automatic. Don‘t have to prove that consumers associate it w/ you first (secondary meaning – this slogan belongs w/ this product). (3) Whether an identifying name or phrase may be Trademarked at all and degree of protection given to it depends on the strength of the mark

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(a) This in turn depends on among other things the classification of the mark as either (b) Scale For Word Marks (i) INHERENTLY DISTINCTIVE: get automatic protection w/out having to show that consumers associate with you (only ones above line – suggestive, arbitrary, & fanciful are inherently distinctive) 1. arbitrary: a. An arbitrary (these are words that do exist, but that have a meaning totally unrelated to the meaning you attribute to the brand. i.e. apple computers) or fanciful (you made it up) mark is a word or phrase that bears no relationship whatsoever to the product it describes (i.e. exxon). b. The strongest b/c the value they possess in terms of recognition obviously comes from corporate use of the name rather than a natural association in people‘s minds between a name and a product. c. Rationale: consumers encountering them in connection w/product or services will immediately understand that they are indications of origin b/c there is no other function that they would likely perform d. The other 3 categories decrease in strength as they increase in natural association 2. Suggestive: a. suggest something about product to give you a clue as to what it is or what field it is in, b. but still require consumer to make a mental leap as to what it is in order to associate the mark with a description of the product or service c. two tests for determining whether mark is suggestive or descriptive i. amount of imagination: the more imagination the consumer must use in order to obtain a description of the good or service from the mark, the more likely it is suggestive ii. necessity for competitors: is the mark one that competitors really need in order to describe their own products or services to consumers – if it is not really needed then more likely to be suggestive d. I.E. coppertone for suntan lotion – suggests it will give you nice copper colored skin instead of allowing you to burn rather than automatically alerting you to the fact is sun tan lotion just by vieweing the name. Not Inherently Distinctive

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3. Descriptive a. Descriptive marks – describe not necessarily the product itself, but some attribute of the product b. Could have chosen another name but this one clearly describes an attribute of the product. c. B/C of that don‘t NECESSARILY want to give you ownership of it – of the descriptive term d. Must acquire secondary meaning for protection – so if you become well enough known that people associate this term w/ me, w/ my products then the law will protect that i. secondary meaning: arises when the relevant consuming public has been exposed to use of the descriptive mark enough to recognize the mark not just in its primary descriptive, or surname sense, but also as an indication of the source of product or service ii. Lanham Act 1052: specifies that proof of substantially exclusive and continuous use of a descriptive mark for five years may serve as prima facie evidence that the mark has attained secondary meaning iii. Direct evidence: through consumer surveys e. Certain things are automatically considered descriptive: surnames (even if not yours-rests on whether the general public will think it is a surname- yours might not be considered to sound like a surname!). Geographically descriptive marks, foreign words that when translated are descriptive f. Rationale: i. consumers may not automatically realize they are indications of origin – they may assume that they are merely descriptions ii. competitors may legitimately need to use descriptive words or drawings to describe their products and services to consumers, or someone having the same surname may want to use it iii. competitors should be free to do so as long as it doesn‘t lead to confusion 4. Generic. (Cannot be protected) a. definition: common descriptive name of the good or service it is used to identify b. generic marks are so assocated w/ a particular product class that they become the natural way to refer to that type of product c. describe product in such a general sense that it is really the class of products itself being described. I.E. computer

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d. rule: cannot serve as a valid mark for that good or service because it cannot identify or distinguish those goods from any other good of the same kind. (But Apple Computers is okay, but Apple Company who sells apples is not) e. Genericide: If your term becomes generic, even though it was once protectable, your protection vanishes. I.E. asprin, elevator, etc. f. standard for determining if it is generic: is its primary significance to the public i. the common name of the product or service OR ii. an indication of origin the fact that there are other common names is irrelevant 5. Things we treat as Descriptive: Laudatory terms (best buy). Geographically descriptive terms. personal names (especially surnames); foreign words, titles of single literary works, descriptive titles of literary series, non-inherently distinctive designs and symbols, non-inherently distinctive trade dress and packaging and non-inherently distinctive product and container shapes 6. Secondary meaning exists when buyer associates a product w/ a single source. Secondary meaning does not mean buyers need to know the identity of the source, only that the product or service comes from a single source. The phrase single sources may be understood to mean single though anonymous source. a. To establish secondary meaning for a term must show that primary significance of term in minds of public is not the product but the producer. b. How do we know people make these associations between marks and source of goods? i. You ask them: Test of secondary meaning is very fact specific and relies on the reaction of consumers to a mark, generally tested by consumer surveys. ii. Surveys should be studied for flaws (leading, irrelevant, framed, circular, etc). iii. Courts can look at direct (surveys of actual confusion) and circumstantial evidence. Amount and manner of advertising, volume of sales, length and manner of use can be circumstantial. None of these alone proves secondary meaning but combined may show link in consumers minds between product and source. Question is not extent of promotional efforts but effectiveness in altering public‘s meaning of the term. 7. Misspelling

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a. won‘t get you out of a descriptiveness problem, unless it is so odd a spelling that it defeats customer‘s association with describing a type of product. b. Relevant question for courts is whether misspelling or acronym has same connotation as original descriptive or generic mark. If so the acronym does not get protection 8. Abbreviations a. can, in some case render mark not descriptive if no one understands what abbreviations mean 9. Zatarin’s v Oak Grove – 5th Circuit 1983 a. alleged infringement of two TMs: Fish-Fri and Chick-Fri. Dist CT held that infringers had a fair use defense to infringement of Fish-Fri (as was descriptive term w/ secondary meaning) and that Chick Fri was descriptive w/ no 2ndary meaning and registration should be canceled. Affirmed b. Fair use: even when descriptive term has acquired secondary meaning so TM protection is warranted, others may be entitled to use mark w/out liability for infringement-(when they are using it legitimately to describe a product, not in bad faith). i. When allegedly infringing term is used fairly and in good faith only to describe users goods / services of a party or their geographic origin D may claim fair use. ii. This is available only in actions involving descriptive terms and only when term is being used by D in descriptive sense, not in its TM sense. iii. TM owner cannot claim exclusive right to descriptive meaning of term. Anyone free to use it in this way so long as does not lead to customer confusion as to source of goods / services. c. when court says mark is generic or descriptive w/out 2ndary meaning it should be canceled. d. Tests for descriptiveness: i. using the dictionary definition. ii. imagination test (measure relationship between actual words of mark and product to which applied. If term requires imagination thought and perception to reach a conclusion as to nature of goods it is considered suggestive. It is descriptive if standing alone it conveys info about the characteristics of the product). Court says using this test fish fri is descriptive. iii. whether competitors would be likely to need terms used in TM to describe their products‖. Just b/c a

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term is not the only or even most common name for product doesn‘t matter. Products can be described in more than one way. Final examination looks at extent to which term is actually used by others marketing similar product or service. Closely related to last test. 10. Geographical issues related to secondary meaning: have to show that secondary meaning exists in your market. So if 2 places have same name and it‘s a descriptive mark and you sue for infringement, you need to show secondary meaning in market where infringing store is moving too. a. TM office has usually required a showing of more than secondary meaning in just a limited area for nationwide federal protection b. Fudruckers case:Court says this is national restaurant chain and their customers travel. so Fudruckers can show its Trade Dress has secondary meaning among some substantial portion of customers nationally. 11. Some courts (especially 2nd circuit) have done away w/ need to show secondary meaning where P can point to some other equitable factor in their favor such as intentional deception or palming off by D. a. Foreign words – if term you choose is descriptive in a foreign language, the rule is supposed to be we treat it as descriptive (i.e. we will translate 12. Geographical issues related to secondary meaning (misdescriptive) a. Ex. Wines grown in New Jersey adopting Napa in their name. i. Often arises when want to convince someone product came from somewhere it didn‘t. ii. If you have term that is geographically misdescriptive then are not entitled to register at all even if get secondary meaning (are deceiving consumers). iii. Determine whether geographically misdescriptive: must consider whether public associates goods w/ place mark names. If goods don‘t come from there and public makes no association thinking they do then its ok and its not misdecriptive. ((Nantucket Case) don‘t expect men‘s shirts to come from nantucket b. What about NY pizza? When you have another association that is not geographically misdescriptive (where you don‘t think product comes from there). i. Understand that this is a ―style‖ of pizza. ii. That while descriptive (assuming it is that style) is not misdescriptive.

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iii. Term accurately describes product so is descriptive and can register if shows second meaning. c. What if term really is unrelated to product? Perhaps MARS or Milky Way candy – no one thinks that means product actually comes from there. It was chosen at random and could be considered arbitrary despite ―geographic‖ indication. 13. Personal names – your personal name applied to your product is descriptive a. If you pick a word people consider a last name, even if its not your last name the law treats it as descriptive i. Court may consider whether surname is rare or if very common (in re garan) ii. A very rare name may be able to get automatic protection without second meaning b. So must get 2ndary meaning c. People can become franchises (w/ secondary meaning) and TM their names. I.E. Michael Jordan, OJ Simpson d. Gallo name can‘t be used by someone with that name to sell cheese b/c will think its their product (wine goes w/ cheese etc). p) Two Pesos v Taco Cabana (1) Issue:is whether trade dress of a restaurant may be protected under 43(a) of Lanham act based on finding of inherent distinctiveness w/out proof that trade dress has secondary meaning. secondary meaning not required where TD is inherently distinctive. (2) Two Pesos court says names, logos, etc can be protected. Does not distinguish btwn word marks and Trade Dress. So trade dress, like word marks CAN be inherenly distinctive. (3) Rule: In looking at TD, courts should inquire whether TD is inherently distinctive. (a) If it is TD is capable of identifying products or services as coming from a specific source and secondary meaning is not required. This is the general rule for TM and TD protection. (4) There is no reason to apply different analysis to TD. The proposition that secondary meaning must be shown even if the TD is distinctive is wrong. Secondary meaning is required only for descriptive marks or TD that is not inherently distinctive. q) Walmart v Samara – (1) Issue: under what circumstances is a product‘s design distinctive and therefore protectable in an action for infringement of unregistered trade

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dress under section 43(a) of the Lanham Act. Held: Product design TD can never be inherently distinctive. Reversed and remanded. (2) 43(a): in infringement suit: require producer to show it is not functional and that it is likely to cause confusion w/ product for which protection is sought. (3) Not all types of marks can be inherently distinctive, for example colors can never be. Colors can only be protected if secondary meaning is shown. Design, like color is not inherently distinctive. Thus product design trade dress can never be inherently distinctive. Notes that this is ok with Two Pesos which says that TD can be inherently distinctive but does not say that product design TD can be (a) product config can never be inherenetly distinctive: if what you are protecting is not packaging, but is an aspect or attribute of the product config or design (color, texture, etc). Two Pesos says restraunt décor = packaging. Can only protect config once gain secondary meaning. (b) makes a policy sense b/c usually reason you shape a product some way is functional – makes it look better, work better, etc (exception would be pink insulation). (4) Rule: Product design trade dress can never be inherently distinctive, and can only be protected after a showing of secondary meaning. To the extent that there are close cases, we believe courts should err on side of caution and classify ambiguous TD as product design, which requires secondary meaning. Product design is like the look of your coffeemaker. r) product packaging: typically apply the traditional distinctiveness categories – generic, descriptive, suggestive, and arbitrary/fanciful (1) look to the combinations of elements as a whole – don‘t look at the individual elements individual elements may be distinctive individually, but the whole may be fanciful etc. II) Priority a) TM protection requires that mark either be (1) used in commerce or (2) registered w/ a bona fide intention to use it in commerce. b) common law and under registration, determining who owns TM meant determining who used it first to identify their goods. c) . We don‘t care whether you made up the term (though that can sometimes be helpful). can use a well known term, or a well known descriptive term so long as you are the first to use it in commerce d) TM statute works under commerce clause – thus applying this law had to be limited to use in interstate commerce – back then you had to have this.. now you can get away with most things as use in commerce e) When a senior user of a mark expands into another‘s product line and finds an intervening user priority in second line is determined by whether expansion is natural in that customers would have been confused as to source or affilication at the time of intervening user‘s appearance.

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f) Common law system: pure use based (1) Person who uses mark in commerce first gets to use it. This leads to races to establish TM priority. Would sell a few products before release date to establish use (2) Rules about what was use sufficient use to establish production. (Court developed) (a) Need to be real sales (although may not have to be a lot of them). (b) Saying ―we are coming‖ is not enough. Advertising may not be enough, but it depends on the situation. (c) It is widely believed that the changes in the law has eliminated the token use by raising the standard for determining when a mark has been used in commerce (d) inherently distinctive: get priority whenever you are first to use the mark in commerce, but this is limited to the area where you are actually using the mark in commerce. 1. more than one company can share a mark for the same goods in different parts of the country and that is ok as long as those companies don‘t compete w/ each other (move into the same area) (e) If mark is descriptive its not protection until you show 2ndary meaning – so for this if you want common law protection you have to show secondary meaning in each individual area 1. Fact that you have to show secondary meaning also means that its quite possible that descriptive terms might co-exist in the same area for a while as they race to establish / prove secondary meaning 2. co-exist for a while and eventually one establishes secondary meaning and then they are entitled to the mark and protection. See discussion on secondary meaning in the making below. 3. So under common law you are a lot better off w/ inherently distinctive term than w/ descriptive term (3) Zazu Designs v L’Oreal – 7th Circuit 1992 (a) Zazu is hair stuff by L‘Oreal. Also name of salon that planned to sell hair stuff. Had worked on it & made token shipments. In researching possible named L‘Oreal found P, but was told P not selling hair care products. P did not start selling for real untill after D. (b) Rule: Use means sales to public w/ mark attached. One must win the race to the market to have exclusive rights to a mark. Registration allows slight sales plus notice to substitute for substantial sales w/out notice. A single sale w/ proof of intent to keep selling can show use to allow registration but use sufficient to register is not necessarily enough to get rights w/out registration. If there is no registration ntent to use a mark, establishes no rights at all. Registration itself creates only a rebuttable presumption of use as of the filing date.

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(c) Intent to use modification not in effect when this case first came up (1988) (d) Held: Dist Ct erred in equating use sufficient for registration w/ one sufficient to generate nationwide rights in absence of registration. Ps use not enough for national rights in hair color. Using mark in salon service does not translate into using mark for hair color as P neither marketed nor registered mark before D. (e) Bad faith issue: bad faith label has only been applied to transactions designed merely to reserve the mark not to link name to product ready to be sold to public. I.E. slapping label of a mark on old products to keep the mark. (4) Trade name, even one that lacks any independent TM or SM significance may bar registration of a TM or SM that is confusingly similar to the trade name (5) Under pre-1989 law actual use in commerce prior to application for registration was required for registration. (a) This requirement spurred prospective applicants to ship and/or sell a small batch of goods in order to secure TM protection which came to be known as a token use. (b) 1989: enacted intent to use registration 1. person who has a bona fide intention under circumstances showing the good faith of such a person to use a TM in commerce may apply to register the TM .. on the principal register a. Assuming an application based on an intention to use a mark is otherwise allowable, the TM office will issue a notification of allowance to the TM owner rather than simply registering the mark on the principal register. 2. After a notice of allowance is granted, the TM owner has 6 months, extendable to one year automatically and to three years for good cause shown (have to persuade PTO), to submit a verified statement that TM has been used in commerce at which point it is entered on principal register. a. When published ppl may complain you registered too soon, knew wouldn‘t be using for 2 years b. If TM owner does not submit this TH is considered abandoned. 3. Assuming intent to use registrant does eventually use the mark, the initial application will be considered ―constructive use‖ entitling the registratnt to nationwide priority from the date of the application. (c) Buti v Impressa – restaunt in Italy named Fashion Cafe advertised its business in the US just before Buti began using same mark for

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restraunts in the US. Court held that the italian restraunt could not obtain US TM rights through advertising b/c services it was providing were not offered in commerce in the US (d) Tacking Rule: TM owner can claim priority in mark based on first use date of similar but technically distinct mark but only in the exceptionally narrow instance where perviously used mark is legal equivalent of mark in question or indistinguishable from it such that consumers consider both as the same mark. 1. TM holder seeks to tack his first use date in earlier mark onto subsequent mark 2. should be allowed if 2 marks are so similar that consumers would generally regard them as the same 3. Standard for tacking is very strict: Mark must create the same, continuing commercial impression and the later mark should not materially differ from or alter the character of the mark attempted to be tacked. 4. This standard is higher than likelihood of confusion standard. (6) Commercial Use and Its relation to abandonment- If you do not continue using the mark in commerce it may become unprotected, (discussed below), but when continuing use of a mark you must show more use than establishing use under the Lanham Act. (Policy of protecting competitors from the warehousing of TMs). Geographic Limits on TM Use g) common law (and today for unreged TMs) ownership of a TM does not necessarily confer nationwide protection. (1) Rather common law TMs are protecetd only in areas where marked products are sold / advertised. (2) Owner of an unregistered TM for goods sold in Florida but no where else can stop others from using that mark for similar goods only in Florida. (3) Seller of similar goods in NY can use same name for goods w/out conflict. h) exceptions (1) TM owner is entitle to the exclusive use of her mark in any geographic area in which the mark‘s reputation has been established, even if the product is not sold in that geographic area. Can be done by advertising. (2) TM owner is entitled to normal expansion of his business even if there is no current likelihood of confusion in that area. (3) TM owner is entitled to prevent anyone from intentionally trading on her goodwill, even outside her established geographic area. Only innocent (or good faith) use of same mark is protected i) TM registration automatically confers nationwide protection of the mark, retroactive to the date of the application, even if the goods for which mark is used are sold or advertised in only a small part of the country

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j) What if two parties use same mark for same goods (1) If neither registers its mark than common law rule applies (2) Each party is entitled to exclusive use of mark in areas where it has established goodwill. (3) Should the two marks come into conflict in a particular area, conflict goes in favor of of the earliest user in that area (a) can do business across the company (mail order or interenet ordering service) so that you are marketing on a nationwide basis (b) If you do business in a substantial portion of the nation that way you can get nationwide protection if you use it this way first. (c) Don‘t have to show you are selling in every location in the nation if you are selling across the country in a general way. (d) If mark is descriptive its not protection until you show 2ndary meaning – so for this if you want common law protection you have to show secondary meaning in each individual area (4) If earliest user anywhere in country registers her mark the registrant generally gets exclusive right to use the mark throughout the country, (5) but non-registering party may assert a limited area defense which allows them to claim priory in those areas where they made continuous use of mark since BEFORE registering party the registering party filed her application. (6) Non registering party is frozen in using mark in that area and cannot expand outside existing territory or natural zone of expansion (7) Side Note on Internet Use: Given the prevalence of web sites how can internet be beyond zone of natural expansion for any business? (8) Can get around this by contract- like in Zazu (L‘Oreal entered deal to able to use the mark). (9) But see Dawn Donut rule allowing junior user to keep selling area not used by registered TM owner. (a) Court there said they could keep going but if registered owner came to that area, junior user (non-register) would have to stop using it. This has been widely criticized. (10) If both parties file for registration of marks that were in use in different areas, at the same time (file to register at same time) the TM Office will usually declare an interference between the 2 applications (a) If parties agree or TM board determines that registration of both marks is unlikely to cause confusion, it is possible that both marks may be registered for concurrent use (concurrent use applies only to two marks that are actually in use, not to applications based on intent to use). (b) If two or more marks are registered concurrently, however the TM office will impose whatever restrictions on the use of the marks necessary to prevent confusion among consumers. (c) The higher the likelihood of confusion the less likely the TM office will allow a concurrent use.

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(11) Priority disputes often resolved by via oppositions or inferences. (a) anyone who believes that he would be damaged by registration of a mark on the principal register may file an opposition with the PTO stating why this is so 1. Must show that they are likely to be damaged and valid legal grounds why person should not get mark (b) TM applications be published before issuance, so that interested parties may have the opportunity to search for and oppose potentially damaging applications. (c) TM applications be published before issuance, so that interested parties may have the opportunity to search for and oppose potentially damaging applications. (d) Often the party objecting to an application will herself have filed an application for same or similar mark. In that circumstance TM Commisioner may declare an interference btwn the two applications. 1. interferences may also be declared btwn pending applications and registered TMs *unless they have become incontestable). 2. interferences may also be declared btwn pending applications and registered TMs *unless they have become incontestable). 3. Both oppositions and intereference decisions may be appealed to Court of Appeal Fed Circuit. (e) A party may later petition for cancel of a mark if they believe they will be damaged by a registration 1. Courts can order cancelation as well (12) What happens when use asserted by Plaintiff originates not with seller of goods itself but with common parlance of consumers? See VW case – VW was called beetle by company but in common parlance this car was called a ―bug‖ It was the consuming public that gave it this name. Courts tend toward the view that consumer associations should be protected in this context- after all, this is the basic underlying protection of the Trademark. Secondary meaning in the making (a) descriptive marks can‘t be protected until owner can prove secondary meaning in minds of consumers. When does TM owner get priority in descriptive mark? May arise if D adopts mark before P gets 2ndary meaning. (b) There is no secondary meaning in the marking under the Lanham Act – no protection before purchasers are likely to assocated TM or TD or SM with source. Courts have been virtually unanimous in rejecting idea (c) However, bad faith imitation is pervasive evidence of secondary meaning, (otherwise why would they imitate?) (d) Even though the Lanham Act does not recognize secondary meaning in the making, an infringement case may go forwards under a theory of

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unfair competition in the state system. (For example New York allows a cause of action for unfair duplication even in the absence of secondary meaning in the making). Board‘s position is that where 2 parties seek to register same descriptive marks, registration should be granted to whichever mark first acquired secondary meaning, regardless of when the two marks were first used. III) Trademark Office Procedures

a) Inherently distinctive: registration gives you presumption of nationwide use as of date you filed registration application – even if only using mark in one city/state (1) Registration: traditionally have to say I use mark in commerce, or intent to use, and it meets requirements of section 2 of lanham act (not descriptive, is inherently desinctive, not obscene) b) If descriptive have to show secondary mearning as well as that you are using it in commerce (or intend to for intent to use) (1) Can‘t get registration for this unless you can show secondary meaning in substantial portion of the country. You also can‘t use intent to use registration for these. (2) If you have two trying to register these at the same time priority is based on secondary meaning. Doesn‘t matter if X was first to use if Y was first to develop secondary meaning. (3) Can use ads, indirect evidence (proof made lot of sale, spent lots on ads, been in market for long time, press clippings, etc). to create 2ndary meaning. (4) Probably have to show secondary meaning in more than just 1 city, but showing it throughout a state or region would probably be considered substantial (5) what is you are only person in business: easier to get secondary meaning (a) but may have generic problems (i.e. patented drugs – ppl come to associate name w/ whole type of product – associate it too much with me, connect my name w/ product at large). c) PTO checks to see if someone is using it, check to see if similar spellings of mark are being used, look at state corporate registrations to see if someone is using it but hasn‘t registered the mark, check news / media to see if someone else is using this d) If meet this mark is published to let people read it and object to it – people have right to come in to oppose b/c its too close to his or any other reason in section (not register able…) e) Mere preparations to use in the market is not enough for registration. Have to show real use. f) Advantages to registering on principal register

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(1) nationwide constructive use and constructive notice (a) cuts off rights of other users of same / similar marks (b) nationwide priority (c) lets you build up goodwill overtime and know you are protected from the date of protection subject to limited areas where its being used (2) Presumption of validity: (a) this is a relatively week presumption (may be overcome by preponderance of the evidence) (3) possibility of achieving incontestible status after 5 years (a) if you can show it was registered for 5 years w/ out challenge or opposition AND you are still using it (b) greatly enhances rights by eliminating many defenses (c) misleading b/c you can contest it on a number of grounds: there are 21 of these (dissent of park and fly case) (d) Can‘t argue that it lacks secondary meaning and should not be protected, you get a presumption of distinctiveness at this point (4) right to bring federal action w/ out regard to diversity or minimum amounts in controversy (5) right to have customs officials bar importation of goods with infringing mark on it (6) more damages, attorneys fees, etc. (7) What is the Supplemental Registrar- International thing, some marks can‘t be registered here (for one of the many reasons we have), but can be registered in other countries, so the supplemental register allows a domestic holder to gain some domestic registration, which is a condition precedent to foreign protection. They receive only common law protection in the United States. g) Grounds for refusing registration (1) No TM by which goods of applicant may be distinguished from goods of others will be refused reg on principal reg b/c of its nature unless it (a) consists / comprises of immoral, deceptive, or scandalous matter or matter that may disparage or falsely suggest a connection w/ persons living or dead, institutions, b eliefs, or national symbols or bring them into contempt or disrepute (b) Consists of flag, coat of arms, etc of US, any state or municipality, or foreign nation or simulation thereof (c) Consists of name, portrait, signature, iding living person except w/ his written consent or name, etc of dead president of US during life of his widow, except by her consent (d) consists of or comprises mark that so resembles mark registered in the PTO or mark or tradename previsously used in the US by another and not abandoned that is likely to cause confusion, mistake or to deceive when used w/ goods of applicant. Commissioner may decide

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concurrent registration is possible (both reg it but limited as to where they can use it) – this must not be likely to cause confusion (e) consists of mark that is descriptive or deceptively misdescriptive, when used in connection w/ goods of applicant is primarily geographically descriptive, when used in connection w/ goods of applicant is primarily geographically misdescriptive,. is primarily a surname, or is as a whole functional. 1. These marks can be registrable is secondary meaning can be shown (2) Washington Redskins case (a) Seek to get Redskins mark canceled b/c offensive to native americans. Ordered Canceled. (b) Court says they have to consider term or other matter at issue in context of mark in its entirety, services Ided in challenged registration, and manner of use of mark in marketplace. (c) Rule: Must decide whether at time the mark was registered was it consisted or comprised of scandalous matter or matter that disparages or brings into disreptue. This involves 2 step process. 1. Determine likely meaning of matter in question 2. Determine Whether in view of that meaning matter is scandalous to substantial composite of general public. Intent to shock may be considered, but it is not dispositive on this issue. a. Disparagement: perceptions of general public are irrelevant here. only those referred to, implicated or identified in some manner by mark are relevant to this determination. This also applies to brining things into contempt or disrepute. (d) Redskins canceled b/c it was offensive. None-the-less it doesn‘t follow that the team loses all protection, they still get common law protection. 1. Law doesn‘t prevent enforcing rights in well-known mark that violates section A. 2. Still have common law protection. Even national priority. Just can‘t get benefits of registration or lose those benefits. Ultimate result here was more symbolic than anything else (3) Old Glory Condoms: another allegedly immoral or scandalous matter. Here they held should consider this under contemporary standards. Reversed denial of registration bc ok in. Whether it is scandalous now, look to current trends of morality: Hate speech still unpopular, so no Redskins, but maybe Old Glory Condom Co. would be okay because we no longer have June Cleaver on television. h) Incontestability (1) Park N Fly Case

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(a) This registration got allowed even though it probably was descriptive, so after that plus 5 years was enough for protection. Even if you shouldn‘t have gotten it you did and now you have certain rights after the 5 years. Statute seems clear though that once mark is incontestable you can‘t raise descriptiveness as a defense to infringement (b) Incontestable marks can only be challenged on specified grounds and this does not include descriptiveness (c) Another case held same for functional. Mark was allowed even though functional, five years passed so incontestable. So cannot be canceled for functionality – this is not one of the enumerated defenses in section 1064. (d) (Justice Douglas thinks this is principle is a travesty and has a policy based dissent). (e) This is an example of protecting the property aspect of trademarks. Why is this the new trend? Intellectual property is the commodity of the future and extremely important to American producers… (2) i) Geographic Marks ii) If the company uses a name that is misdescriptive, or deceptive it may be canceled under a consumer protection theory (or deemed invalid by the board). iii) Because it is a consumer protection theory of trademark protection, if the consumers do not associate the product with the geographic region it will not be canceled. iv) Look for things like actual confusion, whether or not the product is made there, and if the geographic region has anything to do with a perceived quality.

IV) Infringement a) With any trademark you have an exclusive right to use the TM. This is the right to prevent consumer confusion. (Unless you license it, or it is invalid, or it has been exhausted). b) test is whether consumers are likely to be confused. (1) When you consider likelihood of confusion one factor is consider how likely are products to be confused now and how likely are two companies to start selling similar products? c) Basic rule is you are free to use a mark that is not confusing. d) 8 Factors for determining likelihood of confusion from Sleekcraft – may be more, this is not an exhaustive list, and any fact presented which bear on the issue should be addressed. (1) First Factor: Strength of the mark- ( a bit redundant I apoligize) (a) Is it arbitrary or fanciful (these are stronger) – if famous they become very strong (b) Suggestive is somewhat strong

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(c) or descriptive which are weaker (but may be strong because of strong secondary meaning: Toys R Us)- (can‘t make the R go backwards- that while ―arbitrary‖ while not help it escape descriptive meaning- similar to mipelling).- Look at whether the competitor could fairly describe the product without using the trademark) (d) Secondary meaning: may help descriptive and even arbitrary marks. (e) If the mark is strong – arbitrary or fanciful or descriptive plus secondary meaning and well established. (f) Is it well established, that consumers associate mark w/ my product / company. If mark is descriptive you will have to prove secondary meaning (2) Factor Two: Proximity of relevant goods (a) If being used on identical goods there is more likely to be confusion. (b) Some have said we may even start with a presumption on this alone (c) If goods / services are so far apart and same or similar mark Sleekcraft says don‘t have to worry about it – they should be classified separately under the registration system anyway- look to whether a consumer would relate the senior user to this particular product presented. 1. For Ex. Lexis (like as in nexus) / and lexus like that car. Similar marks, but very different goods. – no likelihood of confusion between the source (d) Series of cases with somewhat related goods. Sleekcraft sees different markets for pleasure boats and racing boats so not as likely to be confused. (e) For proximity of goods: More likely public is to assume relation between two producers, less similarity of marks required for likelihood of confusion. (f) less similarity between the marks needed to find for infringement when products complimentary or closely related. (3) Factor three: similarity of the marks: (a) With word marks we test similarity in sight, sound and meaning. 1. We want to know all the things consumers might perceive about a particular word. 2. Coca Cola has sued Koke – koke. Lacks meaning (koke). Sounds / pronounced the same. Visually somewhat similar. 3. Need more than slight differences generally 4. closeness in meaning considered as well (b) Compare marks as a whole rather than their elements (c) In making this determination we look at mark or trade dress as a whole, in context. 1. Question is what will consumers actually encounter on the market and in an advertisement. (d) So even if there are some similarities between the two products, the dis-similarities may overwhelm the similarities. (Like Tylenol PM light green to dark green box with words on front Tylenol PM when compared to Excedrin PM with similar but blue packaging. The

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different colors, and the different name were enough- no support for the argument that their biting off their creativity, that is not what trademark law is supposed to protect. (4) factor four: evidence of actual confusion (a) Clearly if ultimate goal is to decide whether consumers will be confused evidence that they were confused is helpful. This may be persuasive (sleekcraft). (b) Problem is that it tends to be anecdotal and so you can only give it so much weight. 1. I.E. people who complain of confusion, etc. 2. supplement this with survey evidence: as w/ secondary meaning you try to find group of likely consumers and survey them a. Give 2 products side by side, or give one product and ask who makes it. b. Assuming court thinks survey is properly designed, it will be powerful evidence of likelihood of confusion even if as few as 10-15% find it consuming. c. Not focused on median consumer, want dumber or more careless consumers included. this could still hurt a company if they lose 10% of their consumers. Although the consumer should resemble a merchant of the good if it is a technical or highly specialized tool. They don‘t gwt to interview you about buying tractors or whatever it is they are doing with machinery these days. This is an area where evidence of confusion and the later factor of customer sophistication intertwine. 3. This is not determinative though. Survey evidence is only predictive, so its not what all consumers did in market place. 4. Actual confusion factor is just one type of evidence that can show likelihood of confusion or its absence (survey s can also show this). 5. Argue flaws in the survey a. Are the questions leading? (like Pepto-Mylanta tarnishment case later) b. Open or multiple choice? c. Are the open ended? d. Were the right people surveyed? e. Was the segment of society large enough? A good cross section of areas that are relevant? f. Was the product presented as it would in the market place? (5) Factor five: marketing channels (a) Likelihood that these products are going to show up opposing each other. Show up right next to each other in the store- than very high likelihood of confusion.

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(b) By contrast if marks are on products that aren‘t quite the same or used at different points in the distribution chain: one is a mark primarily directed at business purchasers and the other is likely to be aimed at general consumers they are not likely to come into competition and less likely to cause confusion (c) Parallel advertising channels: here boat shows that are similar may be, but if the boat show catered to different market then maybe not the same marketing channel. However, look to see if the mark is in the way of natural expansion. (Sleekcraft) (d) Disparity in price, different ―class of consumers‖ Sleekcraft v. Slickcraft- different market segments (e) Similar sales methods? Pen case with telephone sales, increased confusion because items sounded similar. Look at how sold argue if differences accentuated, or similarities. (6) Factor Six: consumer sophistication/care (a) How much attention are people paying to this decision: Funciton of who the consumer is – how educated are they, etc AND how much money will they spend and thus how much care will they take? More Money= More Investigation, and less importance of reduced transaction costs- (Sleekcraft v. Slickcraft) (b) typical buyer exercising ordinary caution- buying those gods (c) when buyer has would have expertise- (like buying sophisticated machinery for example) higher standard is proper though will not preclude infringement (d) This weighs in as to whether similar but not identical marks or similar but not identical goods cause confusion. (e) may be found if as few as 10-15 percent are confused (7) Factor Seven: intent to deceive (a) If you intent to deceive consumers into buying my product that is a factor supporting likelihood of confusion – even if it doesn‘t succeed (b) Proof of good faith works in the other direction but only too some extent- (may open the possibility of concurrent marks). (c) Don‘t want to encourage people to deceive. Punish them for bad conduct even if it is not that successful. Might be evidentiary – to the extent we aren‘t sure about other factors. (d) This can be powerful: if you show identical product and intent to deceive you get a presumption of infringement in the 2nd circuit 1. Best evidence of this is direct evidence – confessions, marketing memos, etc. But looking at evolution of product / brand can help too. (e) Deliberate and parallel marketing campaigns – try to get products right next to the other (go to same trade shoes, advertise in same channels, etc).

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(8) Factor eight: likelihood of expansion (a) This goes back to the question of conglomerates and the nature of the goods (b) Even if these goods do not compete, how likely is it that these companies will run into each other in the future b/c a natural zone of expansion of one product will put it in direct competition with another. (c) What will the situation be 5-10 years down the line? Are we going to put ourselves where infringement will happen eventually? (d) What about the internet? (e) You should approach by establishing a larger expansion of the goods are similar, and kind of ignore the issue if the marks are not proximate. In Slickcraft v. Sleeckcraft the two types of boats were proximate, so likelihood that one would move into the others market was greater. (f) This can be geographic, or by medium of advertising- make arguments either way and try to relate the factors. e) May be able to ameliorate confusion: disclaimer, etc. – but if it is still confusing then it won‘t help- remember one of the purposes of trademark law is to reduce transaction costs associated with investigating a products qualities. f) Post Sale Confusion: What if third parties are the ones confused? (1) Occurs when people who make purchase the product aren‘t likely to be deceived but others who see the product are likely to be deceived (2) 2nd circuit held that this postsale confusion was TM infringement. (Think of products like jean knockoffs when you look at them, but have an inseam that distinguishes them for the consumer, but not the public at large. -hopefully (3) How is this different from generic drugs? Not different in sense that comsumers are not confused. But here you are buying product of identical functional qualities not for ―Im so cool because I am wearing Versace‖ value. –this is a case of dilution. (4) Sports logo context: people buy it not b/c perceived quality of good but b/c they want the mark itself. Law says there is something wrong w/ taking mark (most courts) as a valuable thing, even divorced from products it belongs too. (5) This is a theory of dilution of the TM holders goodwill in the name- You think that it is likely that person is wearing a knockoff, so it becomes less desirable to wear it because it is tacky to tell strangers your wearing the real thing. (6) TM law has started to recognize importance of logo as product. g) Just b/c mark is incontestible does not mean it is strong for this test h) Sleekcraft Case (1) Involved dispute over two types of recreational boats. Marks at issue are Slickcraft and Sleekcraft. (2) Court said that although there was some overlap in consumers, they appeal to different markets. One is for family recreation the other for high speed.

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(3) Slickcraft is deemed a weak mark. It is suggestive. Says only if marks are quite similar and goods closely related will infringement be found (as it is weak). (4) District judge said confusion unlikely. Court disagrees and remands for limited injunction. i) Other types of confusion (1) Confusion as to source (a) may find confusion even in absence of direct product competition (b) Even if products aren‘t identical, if they are close enough there might be confusion of source i.e. prell hair color and prell shampoo. Any problems with the product may get attributed to me. You don‘t lose a sale directly, but your reputation may get hurt. Hurts the company. (2) Confusion as to sponsorship: (a) allowed in some cases but is somewhat more removed. (b) question remains similarity of the marks (c) I sell soup and put olympic committee symbol on my can. (d) Not likely to think committee put out soup, but people may think I sponsored the olympics and spent a lot of money to put the symbol on there. You are unfairly capturing the benefit of the mark, look at unjust enrichment- people who buy thinking it will help the olympics or whatever, OR disabling the Olympics to get sponsers- both property and consumer protection. (e) Who can sue? If we use a TM symbol of olympics we can say hurting market for sponsorship and they can sue. If we are beyond sponsorship then its more likely to be false advertising and here competitors can (and are the only ones who can) sue. You get unfair advantage over me by false advertising. Consumers can‘t sue for false advertising, and the plympics don‘t compete with soup (3) initial interest confusion – i.e. you see mcdonald‘s sign at exit, you pull off and there is no mcdonald‘s but there is a burger king. You won‘t be confused by the actual buying of the product, but you were drawn off the highway and this may cause some initial interest confusion. May be actionable. Especially if there is a McDonalds at the next exit! (a) It has to be confusion that matters for some reason. If there is no relevant sales decision: i.e. confuse those likely not to be consumers or they make no investment as the result of confusion. (b) McDonald‘s sign that is no where near a highway exit – can‘t do anything about it. then you can‘t do anything (no initial interest confusion). (c) Occurs before I make purchase and is presumably dispelled by time I make purchase (d) Look at PETA case with (People Who Eat Tasty Animals) and the PETA who operates kill-if-not-adopted shelters.

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(4) reverse confusion: large company adopts mark of smaller tm owner. danger is that public associates mark with big company rather than true owner. Courts have held this to be infringement. Big O‘ Tires Case (a) dual use marks: 7th circuit – where public appropriates tm for use to describe another product or service rather than D doing it, TM law should not stand in its way. Dilution j) In some cases courts find infringement even where consumers are not likely to be confused. (1) I.E. by use of kodak for bikes b/c use of famous kodak name on bikes would hurt kodak even in absence of confusion as to source. End result is a blurring of the term kodak. Before you could just say kodak, now have to say kodak film or kodak bike. k) Federal Dilution Act: Prohibits dilution of the distinctive significance of a certain group of marks: those marks that are famous. l) To Show Dilution: (1) Must show mark is famous 1. Consider inherent or acquired distinctiveness of mark 2. duration and extend of use of mark connected with goods or services w/ which mark is used 3. Geographical extent of area mark used in – must be substantial portion of US 4. channels of trade for goods / services carrying mark 5. degree of recognition of mark in trading areas or channels of trade used by mark owner and alleged diluter 6. nature / extent of use of same / similar marks by 3rd parties 7. whether mark is registered (2) Dilution (a) blurring (nabisco case) (b) blackmail dilution in cybersquatting (c) tarnished: 1. may make mark less desirable 2. Playboy argues that MORE hardcore sites that use their name tarnish their mark –(However fair use in that case because it was accurate description of the girl‘s resume) (3) Does not prohibit fair use of mark in comparative advertising, noncommercial uses of mark, or news reporting /commentary (like in the previous problem) (4) Has been construed to apply to registered and unregistered marks that are famous (even though text says registered) (5) State law can still apply for locally famous marks but ownership of valid federal registration acts as complete bar to state action (6) Can only get injunction unless dilution was wilfull (intended to trade on TM owner‘s rep or cause dilution)

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(7) Trade dress and product config. protected too (8) Marks need not be IDENTICAL. Similarity between marks is sufficient if causes blurring or tarnishment. (9) You don‘t have to consider likelihood of confusion, but you still have to consider the perceptions of consumers - Must be enough similarity between the marks to cause confusion

m) What is threshold for proof of the harm: courts are divided. (1) In ordinary TM law standard is likelihood of confusion. Can stop confusion even if it has not happened yet. Doesn‘t have to actual BE confusion. (2) Dilution statute doesn‘t talk about likelihood of dilution – only that you can get injunction against acts that cause the mark to be diluted. (a) Two circuits says you have to show actual dilution – that there was ACTUAL LOSS of distinctiveness before you can get relief. They you can‘t go on likelihood of dilution. (b) Other circuits reject this and say it means likely to cause dilution as well. n) Statute requires commercial use in commerce (b/c tm law is based on commerce clause) (1) This is designed to trigger minimum protection needed to meet interstate commerce threshold- but virtually everything is use in commerce now (2) Commercial: seems to limit the statute to uses of the TM as a mark in connection with products. (a) This law is directed at blurring by selling products of same / similar mark. Or Dilution by selling products of same / similar marks. (3) Statute specifically exempts non-commercial uses, news reporting, etc. (a) can use it for reviews, reporting on product., to talk about stuff, etc. Even if people like exxon less afterwards. (b) Political speech, social speech, etc (c) Use in parody (d) Question is not am I a for profit / non profit company. Such companies can infringe if they use it as a brand, etc. It is the character of the use. (e) But use in political or social speech that has strong protection because of free speech and all that, but if purpose is to someway to trade on the name it may discount protection. (f) Also look to see if ―political speech‖ is a cooked up scam like the Joe Cartoon case. o) We consider fame b/c we are giving right to control something broader than likelihood of confusion. This is a much more powerful right over the word and that seems unjustified unless there is a corresponding mental association

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p) Courts have held a number of marks famous that probably should not qualify as famous: (1) There may be an arguable case for regional fame if this is something we want to protect: but aren‘t these supposed to be natioanlly famous marks? (But if the product that is tarnishing and it reaches the region….) Think about a company like Publix that is in the Southeast, but is famous here. (2) In many cases courts stress meaning of famous to include marks that might not be considered famous to many people q) Nabisco Case: Catdog snack v Goldfish (1) Pep Farms said fish in snack diluted its goldfish TM. (2) Says Dilution requires 1) senior mark is famous; 2) must be distinctive; 3) junior use is commercial use in commerce; 4) must begin after senior mark became famous; 5) must cause dilution of distinctive quality of senior mark, or is likely to cause dilution depending on the court (3) famous mark w/ out distinctiveness lacks what law designed to protect (4) Finds moderate distinctiveness in goldfish. court says pep farm is likely to succeed in showing that cat-dog fish dilutes distinctive quality of its goldfish crackers (5) more distinctive senior mark is, more interest to protect. weaker senior mark is tends to argue against dilution, especially if other mark used in different field. Very distinctive mark more likely to suffer dilution. (6) marks but be sufficiently similar that in minds of consumers junior mark is associated with senior. (7) dilution can occur between non-competing and competing products. Don‘t need to show consumer confusion though. Junior use that confuses consumers as to WHICH MARK IS WHICH is diluting. If these markets were different might look at whether junior or senior is likely to bridge gap into other market. r) What about descriptive marks? (1) Apple computers. You have to have some room for generic use of the term. Apple can‘t take away this word from the english language. (2) What about words that don‘t represent a kind of thing? I.E. guess – do we want to preclude others from using common english word as a mark? (3) Closer we get to shared / descriptive marks the more problematic dilution becomes s) What if you have two companies using same name (non-unique marks). (1) Dell books and Dell computers – protection seems less probable but you can get it. (2) What you get is basically to stop new users (3) Can‘t go after pre-existing ones. (4) Rights trigger only after mark becomes famous and apply only to uses that start after mark becomes famous. t) dilution in cybersquatting (1) dealt with in 43(d) anticybersquating consumer protection act,

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(2) Many cases that reached to find famousness dealt w/ cybersquatting so now this can be dealt with under 43(a) (3) Can receive cancellation of cybersquatting and famous marks

V) Contributory Infringement a) Questionable whether this Exists for TM. A number have courts say it does (landlord knows tenant infringing TM and does nothing about it. Must be something like you were involved in the conspiracy of counterfeiting or similar activity. Which is too easy a problem for an exam.) VI) False Advertising (Mylanta v. Tums) a) If the advertising is literally false- the burden will shift to the defendant to rebut the argument. Must have evidence that there was good cause to believe it was true, or that the information is in reasonable dispute. b) If the advertisement is implicitly false- must show that consumers made connection between plaintiff‘s mark, and the implicitly misleading statement. ii) Best evidence of this is consumer surveys, and direct evidence. (Look to make sure the survey is not leading, framed, right people selected, etc…) iii) Circumstantial Evidence can also be brought to bear on the question, but has less impact. VII) Defense a) Genericness – we are left with basic descriptive term that people use not to refer to specific brand but to the entire class of goods. (1) Some terms start out generic, but others can become generic over time. (2) So if people come to associate word not just with one product but entire class of product genericide occurs – mark is canceled off the register – it is killed off. (3) may become generic as to some products but not all. so may be canceled in part. (4) 2nd circuit has sometimes said even generic names get some protection – take every reasonable step not to cause confusion (5) Murphy beds, aspirin were ―genericide‖. Elevator and escalator too. (6) You can see this process at work. I.E. Kleenex. If people come to use this term generically then it may lose TM protection (7) JEEP convinced people to use term SUV and not jeep to refer to these big trucks (8) Genericness is directed at consumer perceptions. (a) Traditional rule: once you are generic it is lost, can‘t get it back. (unless used in a different context). (b) Started out generic but over time it developed secondary meaning and was protectable (c) Windows based operating systems: at first was generic term referring to windows based operating systems, now it seems like a MS TM.

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(d) Statute specifically says if it becomes generic in one part of the US it is canceled in that area. Murphy case was specifically a geographic region. (Because small houses generally in the north). (9) if the owner of a patent retains the designated name which was essentially necessary to vest public w/ full enjoyment of product – this is when name patent user gives product becomes generic (10) Courts may consider how much effort you‘ve made to police your mark, but it is not always possible to prevent genericide. When TM achieves rapid and overwhelming acceptance no amount of police work will do. (11) Often this is the first mover and often it is the person with the patent (a) ppl who come up w/ new drugs make up generic terms and brand names and work hard to distinguish them even while product is only one being sold – only one ibuprofen while Advil has patent. So they keep them distinctive b) Functionality (1) functionality typically applies to product configuration and some TD (2) Don‘t want people using TD protection to get effectively perpetual patents (3) See Restatement of unfair competition on pg 747 (4) We define functionality as things that are essential to product to make it work or things that are effective in that they make product cheaper or more valuable. They let you make it at a lower cost. This won‘t be protectable. (5) Does not have to be product design functionality, it can be aesthetic functionality. Something ppl want b/c it looks better than other products. This is not something a TM can protect. (6) An example of an aesthetic functionality is the heart shaped box. (7) Aesthetic functionality; features adopted not for utilitarian reasons but not for identifiying reasons. For non-trademark reasons these are adopted. carvings in silverware found functional. (8) Qualitex: color was not functional. But it can be. if aesthetic value lies in ability to confer benefits that can‘t be duplicated by another design it is functional. Test is whether giving TM rights would significantly hinder competition. If it does it is functional (9) Problem is these things can be bound together: some want a Ferari b/c it looks cool, others want it b/c they know its aerodynamic/fast. And may be advertised as both- look at what the infringer is trying to; duplicate functional or aesthetic element (10) styles of painting: based not on source but on attractiveness (ie impressionism) is functionality (a) functionality helps us separate patent from trademark law; ie, can patent dual spring (Traffix) but cannot tm it; can copyright painting

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(ie, original designs) but cannot tm; caveat: can copyright some features, patent others and tm others in same thing (b) Rule: Functional feature is essential to the use or purpose of an article or … affects the cost or quality of the article 1. It is essential only if feature is dictated by functions to be performed. Feature that merely accomodates useful function is not enough. 2. Feature affecting cost or quality of an article is one which permits article to be made at a lower cost or which constitutes an improvement in the operation of the goods 3. Main inquiry is whether TD protection will hurt competition by allowing party to monopolize useful design features a. Would this prevent potential competitors from entering market? Are alternative arrangements feasible? b. Unique arrangement of pure functional features are functional. Predominately functional but arbitrary placement of visual parts may still be functional, user after patent expires doesn‘t have to go out of their way to make functional part dissimilar. Arbitrary arrangement of predominately ornamental features that do not stop competition by differently dressed products are nonfunctional. (c) If features are ornamental and non-functional they may be protected

(11) Traffix Case: (a) Even if there was secondary meaning, court says you don‘t get to own that b/c it is functional – it performs a useful service by holding signs up better than other designs (b) TM can‘t protect that. That is what patents are for, you had one and it expired. (c) Issue: does existence of expired utility patent foreclose possibility of patentee claiming TD protection in product design? (d) Where TD not registered on principal register person who asserts protection has burden of showing it is not functional. (e) Rule: prior patent is significant in resolving functionality. Utility patent is strong evidence that features therein are functional. If TD protection sought for those features the partent adds great weight to the presumption that features therein are functional until proven otherwise. Where features seaking protection are claimed in the patent one seeking TD protection must carry heavy burden of showing feature is not functional, i.e. showing merely ornamental, incidental, or arbitrary aspect of the device that have no purpsoe w/in the patent. (f) Even if no previous utility patent party seeking TD protection has burden to show nonfunctionality of TD features. Feature is functional

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and cannot be a TM if it is essentail to use or purpose of the article or if it affects the cost or quality of the article. It is a feature the exclusive use of which would put competitors at a significant non-reputation related disadvantage. (g) can look at prosecution history as well as patent itself if need be to see if particular feature is claimed as useful. (h) Whether the product config is a competitive necessity a feature is also functional when it is essential to use or purpose of the device or when it affects cost or quality of device. (i) Should inquire as to significant non-reputation related disadvantages in cases of aesthetic functionality. Wheter design is functional no need to consider if competitive necessity for feature. (12) the interrelatedness between products w/ aesthetically functional attributes and source identifying attributes (a) distinction between the two: sometimes shape/product will do both (b) ex: Ferrari: distinctive car, recognizable; can Ferrari protect the fact that it looks different than other cars from others making same design; problem is that some attributes are purely functional - ie, aerodynamics, high speed cornering; clearly that some of the angular shape/low to ground, though aesthetic are functional (c) sense that design of Ferrari as a whole may be economically valuable; ie, looks attractive to potential customers; attributes of product design driven not by source identifying function but by attractiveness are aesthetically functional and therefore under Traffix and Qualitex, cannot get protection for aesthetic functionality (d) Ferrari: combination of features that don't serve an important function that help this thing look like a ferrari (not just that it looks cool but that it looks like a ferrari) (e) aesthetically functional attributes and source identifying attributes are in ferrari - will give protection BUT NOT TO FUNCTIONAL ELEMENTS; ie arranging all of these components can copy some attributes of ferrari and would be ok IF SOURCE IDENTIFYING AND NOT FUNCTIONAL (either actually or functionally); CLOSE CASE (f) IF BOTH aesthetically functional and attractive, cannot prevent others from copying A unique combination of functional features, HOWEVER, may be tm-able 1. even if all are separately functional Functionality and Pharmaceuticals- the shape and color of a pill are not only aesthetic, but functional for purposes of identification-Inwood?-Talks about it in Qualitex VIII) Abandonment a) tm laws do not have expiration date; potential perpetual protection b) rationale to protect consumer confusion therefore should remain perpetual

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c) get protection so long as continue to use in commerce; if you stop using in commerce - abandon mark - then you lose protection d) For Abandonment: (1) discontinued use w/ Intent not to resume use in commerce in a bona fide sense in ordinary course of trade and not just to reserve mark intent not to resume can be inferred from circumstances OR (2) After 3 years, even if intend to resume, then mark abandoned (3) when any course of conduct of owner, including acts of omission as commission, causes mark to … lose its significance as a mark e) theory: since goal of tm is to prevent consumer confusion and you are out of biz for good, makes no sense to protect your mark; ie, like warehousing marks – don‘t want this. f) problem is that sometimes/frequently, when famous companies change names there is residual goodwill built up; ie people still recognize old name associated w/ that product and if abandoned people could jump in and take that name and use it g) EX: PanAm: went bankrupt; someone else can be PanAm (but would be confusing consumers) h) Can lose protection where consumers still have mental association of good will i) if company changes name to Exxon, old company will sell a few items to someone else with old name - court said NOT REAL USE IN COMMERCE, just token use j) Duraflame - someone abandoned the mark and many other companies jumped in and tried to use the duraflame name on their log; the first one who uses it in commerce after date of abandonment gets it k) Person‘s proper name cannot be deemed abandoned throughout their life l) Brooklyn Dodgers Case: (1) Restraunt called brooklyn dodger (2) From time dodgers moved to LA did not use mark again until 1981. Since then use has been sporadic, mostly for clothes. (3) Abandonment: discontinued use w/ intent not to resume. Intent not to resume can be inferred from circumstances. Party seeking cancellation has burden to prove abandonment. Must establish it by preponderance of the evidence. Minor changes in TM that do not effect overall commercial impression are not abandonment. (4) Court says to keep using mark would have had to keep team named brooklyn dodgers so name would be identified w/ team by public. (5) Residual goodwill; mark keeps this if proponent of mark stops using it but shows an intent to keep it alive for use in resumed business. This will not preclude abandonment where owner unequivocally declares intention to discontinue use.

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(6) Once prima facie abandonment proven TM owner has to show intent to resume. rather than showing it did not intent to abandon mark, TM owner must show it intended to use or resume use. (a) Mark was abandoned then resumed use. But only on historical stuff – clothes etc. P‘s rights are just limited the good on which TM used since resumption. Does not stop D from using it w/ restaurant. IX) Unsupervised Licenses a) if Coke decided to sell name, it would not be permitted to do that UNLESS it sold relevant assets/goodwill along w/ the name; ie would have to sell secret formula b) in past, had to sell whole biz along with name c) courts more relaxed now would have to sell the formula (or customer list, etc) along w/ tm d) Assignment of TM alone w/out any underlying assets or goodwill is assignment in gross. these are invalid. e) if license to someone else to use mark must police their use to ensure that they are making my product that franchisor made (1) ie, McDonalds: if McDonalds did not police and one franchisee started selling pizza McDonalds would lose name; no rights in name itself, rather rights in goodwill f) what if they want to change the quality of their thing; ie Coca-Cola forbidden from licensing without supervising and forbidden from selling w/out formula; CAN IMPROVE BRAND that is ok; BUT only the owner of the tm can make that decision; ie, a franchisor (McDonalds Corp) can but franchisee cannot g) in some cases nowadays the transfer of a customer list suffices for the transfer of underlying goodwill. h) The TRIPS agreement says you can transfer a license with or without the underlying good will, our law is currently in conflict with that agreement. i) Dawn Donut Case (1) Allegations of abandoned TM due to inadequate quality control and supervision on part of licensee (2) Licensor or registered TM must make reasonable effort to detect / prevent misleading use of mark by licensee or suffer cancellation of mark via abandonment (act or omision that causes loss of significance) (a) Controlled licensing is fine, it is this naked abandonment that is the problem X) Non TM or Nominative Use a) tension between tm rights and free speech rights b) as we more treat tm rights as a property right, the conflicts between tm law and free speech become more substantial c) doctrine of non-tm use: Kazinsky in New Kinds on Block Use also called nominative use ; can say, for example, that Coke tastes better than Pepsi; doesn't

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make use illegal because I'm using that mark to accurately refer to the brand/goodwill/source itself EVEN IN A COMMERCIAL CONTEXT (1) which is why comparative commercial advertising is ok; can say, for example, that four out of five dentists prefer my toothpaste over colgate (2) ONLY CAUTION: cannot do it in such a way as to imply sponsorship or affiliation; ie cannot say that New Kids sponsored (because that would lead to likelihood of confusion) (3) these principles also explain Parody cases (4) Generally comes up when things can only be Ided by their TM. How else do you refer to them? Such uses does not implicitly sponsorship or endorsement of product b/c mark is used only to describe thing rather than identify source (5) Rule: Where use of TM does not try to capitalize on consumer confusion or take name for another product. Where only word available to describe thing is the TM. B/C it doesn‘t implicate source ID function it is not unfair competition. Is ok b/c no implied sponsorship or endorsement by TM holder. (6) Differs from TM fair use b/c refers to TM holder itself, not to something else. Can use to describe TM owner‘s product even in commercial context (or if in competition i.e. comparative advertising) this is ok as long as: 1. product / service in question must be one not readily identifiable w/out use of TM 2. only so much of mark or marks may be used as is reasonably necessary to ID product or service 3. user must do nothing that would suggest sponsorship or endorsement by TM holder XI) Parody a) draw line using your mark to make fun of it or something else; if I make fun of your mark and as a result people think you had something to do with it, we have a problem; but if people are not confused, then no problem; also no dilution problem because of first amendment and statutory limits b) therefore if i make fun of your mark you do not have right to prevent me from using c) court says whether this is legit parody depends on what consumers think d) surveys: - if survey shows that 6% is a new type of michelob - almost 50% believed that even though they thought it was a parody, thought that parodist had to get permission to do this AND THEREFORE 8TH cir says that showed likelihood of confusion e) ie, did anheuser bush authorize this? people thought that they should authorize it and court used this as evidence of likelihood of confusion f) unresolved issue today: easy cases of parody where does not confuse consumers ie LLBean Case:

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g) but may be cases where circumstances are such that want to permit speech because may have some other social value than tm itself (a) where party chooses mark as parody of existing mark intent is not necessarily to confuse but to amuse. Mere fact that a party intends to create parody does not preclude possibility of confusion. Parody must show that it is original but ALSO that it is NOT original. (b) That parody appears on products sold for profit does not necessarily alter it being a parody or being ok. (c) 5th circuit adopted parody / satire distinction. Satire – naming bar velvet elvis TM infringement against Elvis estate. XII) Remediesa) Remedies are organized around a property rule that is similar to the real property no trespassing rule. That is a TM holder has the right to protect the unique association the public has with a particular good. ii) Because of this rule an injunction is an ordinary form of relief for trademark infringement. (1) The only exception comes in places where the two holders had common law protection in certain parts of the country and concurrent use is ordered. (However, there no infringement is found and therefore is not a remedy). iii) Punitive Damages- are a form of deterrent not only to dissuade future infringement, or punish the current infringement, (although those two reasons make the argument stronger), but some courts have even applied treble damages to innocent users based on the idea that they have a duty to seek out if they are infringing on a TM, and thereby recklessly harming the public. iv) Plus it is hard to catch infringers, so when you do it is necessary to punish them for al the time they got away, according to some jurists. b) Compensatory Damagesii) Should be tailored to the specific use of the trademark that was infringed. Lindy Pen Case iii) Infringers profits can be used as a proxy for damage in the absence of better information. c) Corrective Advertisement ii) Should be argued that it is necessary to restore the TM to its prior value, and that the infringer should pay to have it made whole. Gray Markets, and parallel importsIf you bought a Nike shoe in Thailand for $5, and wanted to bring it to America to sell you could not because Nike‘s trademark protection is only exhausted in Thailand, not in America so Nike could have customs block the import. Why is this? (POLICY ARGUMENT) Because businesses like price discrimination, and because we want to protect Nike the American subsidiary, from competing with the Thai

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subsdiary of Nike- (which may have different quality or not could be the exact same product and it is still blocked). Thus a domestic trade holder can block the importation of goods bearing its mark. Reasoning- There are three cases where this comes up: 1.) When a domestic TM holder licenses mark to foreign company for use in that country. (Could be same company just a subsidiary). The TM license is granted on that country use only because the domestic holder does not want to compete with the licensee. 2.) When a domestic company licenses a foreign TM. We don‘t want the new licensee to have to compete with a parent company who charges them rents. (It is also probably in their agreement, if not the domestic holder probably cannot block the import- it is a matter of contract law and not a part of this course). 3. Counterfeits, or different quality goods. (The whole point of TM is to protect consumers buy giving them reliable brand recognition). Software and Computer Information Domain Names & Cybersquatting ◦ Domain names are mnemonic devices that lead to a particular internet address. They‘re registered by a variety of registrars on a first-come, first-served basis for about $35. ◦ During the 1990s many people registered domain names that corresponded to the name or mark of someone else, often a lg corporation. Many did this to sell the domain name to the trademark owner for well over the price of registration. This practice—the b/f, abusive registration & use of distinctive trademarks of others as internet domain names w/ the intent to profit from the goodwill associated w/ the mark—is known as cybersquatting. Others registered generic names (like business.com) & sold them for lg profit. Still others registered companies‘ names for legit reasons: to criticize co or advertise company products avail at a website. ◦ Originally, Congress chartered Network Solutions to register domain names. They made the relevant determinations re: who was given the names as there was no legal system in place for determining allocation of domain names. → Network Solutions still functions as registrar of registrars (maintaining the syst under ICAAN). There is continuing debate in Geneva re: whether the registrar should be an international body, rather than US chartered corporation.

Concerns Leading to Enactment of ACPA: ◦ The orig landrush syst for acquiring domain names led to concerns about:

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(1) indivs registering a domain name (for about $ 40) to sell for lg profit to its trademark-holder; and (2) indivs using trademark domain names to divert internet traffic to other sites for profit (think: porn) ◦ Trademark infringement & dilution weren‘t well suited to preventing cybersquatting b/c most uses of a domain name are non-infringing. ▫ Though dilution reached classic cases of cybersquatting (registering a domain name that correspond‘s to another‘s mark for purpose of extorting money from the mark owner). ▫ H/e, some instances of cybersquatting couldn‘t be punished under trademark laws and cts were sometimes stretching the law to stop cybersquatting. a. Anticybersquatting Consumer Protection Act (ACPA) ◦ Makes it illegal to register a domain name that corresponds to a trademark where the domain name registrant: ▪ has no legit interest in using the name; and ▪ acts in b/f to deprive the owner of the use of the name. ◦ 15 USC § 1125(c)(1) A person shall be liable in a civil action by the owner of a mark if, w/o/r/t the goods or services of the parties, that person (i) has a b/f intent to profit from that mark (including a personal name which is protected as a mark under this section); (ii) registers, traffics in, or uses a domain name that— (I) in the case of a mark that is distinctive at the time of registration of the domain name: is identical or confusingly similar to the mark; (II) in the case of a famous mark that is famous at the time of registration of the domain name: is identical or confusingly similar to or dilutive of that mark. ◦ Thus, To succeed on ACPA clm, Plaintiff must show: ▪ The mark is a distinctive or famous mark entitled to protection; ▪ The domain name(s) in Q are ―identical or confusingly similar to‖ such protected mark; AND ▪ The person who registered the domain names did so with the bad faith intent to profit from them & their goodwill. ▫ Factors to Consider in determining whether a mark is distinctive or famous: 1125(d)(1)(A)(ii)(I) & (II) (a) degree of inherent or acquired distinctiveness of the mark; (b) the duration & extent of use of the mark in connection w/ the goods or svcs with which the mark is used; (c) the duration and extent of advertising and publicity of the mark; (d) the geographical extent of the trading area in which the mark is used;

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(e) (f)

(g)

the channels of trade for the goods or svcs with which the mark is used; the degree of recognition of the mark in the trading areas and channels of trade used by the marks‘ owner and the person against whom the injunction is sought; the nature and extent of use of the same or sim marks by 3d ptys

▫ ―Confusingly Similar‖ reasonably includes: ► typosquatting: the intentional registration of domain names that are misspellings of distinctive or famous marks, causing an internet user who makes slight spelling mistakes / typing errors to reach an unintended site. → People so freq‘ly misspell domain names that one could get tens of thousands of hits per day and with 3d pty advertisers paying a small amt per hit, and make loads of money. → think: ―dosney.com‖ (misspelling of Disney) leading toddlers to hardcore porn website. Legislature intended to prevent exactly this in enacting ACPA, according to legislative history. ▫ Factors to consider when determining whether registrant acted in b/f (§1125(d)(1)(B)(i), a non exhaustive list): ▪ The trademark or other IP rights of the person, if any, in the domain name; ▪ The extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to id the person; ▪ The person‘s prior use, if any, of the domain name in connection w/ the bona fide offering of goods/svcs; ▪ The person‘s bona fide noncommercial or fair use of the mark in a site accessible under the domain name; ▪ 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 associated w/ the mark (either for commercial gain or w/ intent to tarnish/disparage the mark, bu creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site); ▪ The person‘s offer to transfer, sell, or otherwise assign the domain name to the mark owner or 3d pty for fin gain w/o having used / intended to use the domain name in the bona fide offering of goods/svcs OR the person‘s prior conduct indicating a pattern of such conduct; ▪ The person‘s provision of material & misleading false contact info when applying to register domain name, the person‘s intentional failure to maintain accurate contact info, or the person‘s prior conduct indicating a pattern of such conduct; ▪ The person‘s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of other that are distinctive at the time of registration of such domain names, or

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dilutive of famous marks of others that are famous at the time of registration of such domain names; ▪ The extent to which the mark incorporated in the person‘s domain name registration is or is not distinctive and famous. ◦ Safe Harbor Provision §1125(d)(1)(B)(ii) Bad Faith intent shall NOT be found in any case in which the ct determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use and otherwise lawful. ▫ In PETA, D registered the domain name ―peta.org,‖ where he set up a page called people ―eating tasty animals‖ (a parody of PETA & its goals. While domain name obviously confusingly similar, D‘s defense is that he was exercising his 1st amend. right to free speech. → H/e, ct held that b/c D made statements to the press & on his website recommending that PETA settle w/ him and make him an offer (which amts to partial b/f), D cannot benefit from the safe harbor provision. A D who acts even in partial b/f when registering a domain name is not entitled to benefit from the safe harbor provision. → NOTE: whether seeking offer or settlement is proper depends upon the circs of partic case. For example, selling mysouthwest.com (a domain name legitimately used by southwestern-style clothing retailer to sell merchandise) to southwest airlines wouldn‘t likely seem improper b/c name had been in legit use. A: here, D may argue that no one who visited his site would think it was sponsored by PETA. counterpt: initial interest confusion. This is a borderline case, criticized for not taking into acct D‘s potential fair use of the registered mark. ◦ What constitutes a legit interest in a domain name? ▫ D has its own trademark that corresponds to the domain name. → If more than 1 company has a legit clm to a trademark, any of them may register the domain name. ACPA doesn‘t require that it be assigned to the best or lgst mark owner. → H/e, some cts have ruled for Ps when D‘s bad faith outweighed D‘s legit rights in the name. ► (D virtual works held liable for registering vw.net b/c its knowl of likely confusion w/ Volkswagen and its discussion of selling the name to Volkswagen meant it didn‘t have legit interest in the name) ▫ D is a legal reseller of P‘s product. Cts are divided re: whether this is legit use. ▫ D wants to criticize / make fun of P. ► [company‘s name] sucks.com

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Though consumers not likely confused into thinking the site was owned or sponsored by the company, some cts have found them infringing (while others have not) ◦ Some clms of legit interest are pretextual. ► D‘s attempt to demonstrate a legit interest in oxforduniversity.com by changing one‘s name to Oxford University failed. ◦ Remember: Personal names aren‘t generally marks and thus aren‘t entitled to ACPA protection. H/e, celebrities who have registered their names as trademarks (like OJ Simpson) are entitled to the same protection as any corporate trademark owner under the statute. Retroactivity ◦ A person who unlawfully registers, traffics in, or uses a domain name after the ACPA‘s date of enactment, 11/29/1999, can be liable for money dmgs. ► one who registered a domain name in b/f before ACPA could be liable for statutory dmgs when s/he cont‘d to use the site after enactment of ACPA. ◦ ACPA applies to all domain names registered before, on, or after the date of enactment. Though statute precludes money dmgs in cases where domain names were registered, trafficked in, and used before its enactment, equitable remedies are avail. → equitable remedies include: ordering registrant to relinquish domain name, transfer name to mark owner, and limit her use of domain names to those that don‘t use the mark. Damages under ACPA ▫ statutory dmgs: not less than $1,000 or more than $100,000 per domain name, as the ct considers just. ▫ atty fees, if qualifies as an ―exceptional‖ case under ACPA. ▫ equitable remedies (see above) JurisD over cybersquatters: ▪ In the case of a cybersquatter in US, P may sue cybersquatter in any district with which ‗squatter has min contacts ▪ In the case where P cannot find ‗squatter, P can obtain in rem jurisD in the jurisD where the domain name resides by publishing legal notice of the suit & then filing against the domain name itself. b. The Uniform Dispute Resolution Procedure (UDRP) ◦ In the late 90s Network Solutions faced a series of lawsuits from mark owners trying to hold Network Solutions liable for letting ‗squatters to register their marks as domain names. As a result Network Solutions set up dispute resolution policy and req‘d registrants to agree to arbitrate their disputes w/ Netwk Solutions.

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◦ The Internet Corporation for Assigned Names & Numbers (ICANN) was formed in 1999 to deal w/ cybersquatting outside the ct syst. It estab‘d a compulsory pvt dispute res process ( the UDRP) for dealing w/ cases of ‗squatting. It req‘s all internet registrars to req their customers to submit to the process. ▫ UDRP set up to deal w/ abuse of domain names cheaply & quickly. ▫ Under UDRP, a mark owner can file a complaint w/ an approved dispute res provider for sm. fee. Domain name registrant is notified and may file a response. → h/e, the panelists‘ pwr is limited to deciding whether to transfer the domain name at issue to the complainant. (Loser has 10 days to file a suit w/ the ct disputing the decision.) ▫ UDRP international in scope. Deals only w/ true cases of cybersquatting, leaving questionable cases to cts. The Standard for Proving Cybersquatting (v. sim to ACPA) ▫ Complainant must demonstrate 3 things: ▪ Respondent‘s domain name is identical or similar to a mark in which the Complainant has rights; ▪ Respondent has no rights or legit interests w/r/t the domain name; AND ▪ Respondent‘s domain name has been registered & is being used in bad faith. ◦ The following circs, if found by panel to be present, shall be evidence of the registration and use of a domain name in bad faith (non exhaustive list): ▪ circs indicating that registrant registered or acquired the name primarily for the purpose of selling, renting, or otherwise transferring the domain name to the complainant or her competitor (for valuable consideration in excess of Respondent‘s documented out-of-pocket costs directly related to the domain name; ▪ registrant registered the name to prevent the mark owner from reflecting the mark in a corresponding domain name, provided she has engaged in a pattern of such conduct; ▪ registrant registered the name primarily to disrupt the business of a competitor; ▪ by using the name, registrant intentionally attempted to attract, for commercial gain, internet users to her website by creating a likelihood of confusion w/ the complainant‘s mark as to the source, sponsorship, affiliation, or endorsement of registrant‘s website. ◦ The following circs, if found by panel to be proved by all the evidence presented, demonstrate a registrant‘s right or legit interest in the domain name: ▪ before any notice of the dispute, registrant‘s use of or demonstrable preparation to use the domain name in connection w/ a bona fide offering of goods/svcs; ▪ registrant has been commonly known by the domain name, even if she‘s acquired no trademark rights; ▪ registrant is making legit, noncommercial or fair use of the name w/o intent for commercial gain to misleadingly divert consumers or to tarnish the mark at issue.

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◦ Indiv UDRP decisions have also generated controversy, mainly centering on the 4 elements of a UDRP clm: ▫ A legit trademark right Sometimes a complainant doesn‘t have a trademark in the name it seeks to control. Though the proper result is for the panel to dismiss the case, some panelists (and cts) have been persuaded to grant the complainant rights in wds it doesn‘t own as a mark. ► Barcelona.com was transferred to the city of Barcelona, though city held no trademark in the name. ▫ An identical or confusingly similar domain name Some panelists have ordered the transfer of domain names that don‘t meet this standard. ► walmartsucks.com was transferred to walmart, though no reasonable consumer would think wally world sponsored the domain name ▫ Absence of a legit right UDRP req‘s proof that domain name registrant lacks any right to use the domain name. Mark owners can‘t use the UDRP to oust others mark owners from the use of a mark—if both have a legit clm to the name, UDRP wont step in to decide who is most entitled to use the mark. However, sometimes panels seem to consider who ought to be entitled to the mark. This also comes up in context of: ▪ nominative use ▪ noncommercial uses of a name ▪ criticism of a trademark owner (which are presumed to be legit rights to domain name) ▫ Bad Faith Some panelists have held registering domain names to criticize mark owner to constitute bad faith, though that is a legit use of the name. ◦ Other criticisms of UDRP ▫ the mark owner decides which dispute resolution company will decide the case and companies seem to compete for approval of mark owners. ▫ short deadlines and absence of council lead many respondents not to dispute the transfer of their domain names ◦ B/c of the limits of the UDRP process, cts have unanimously held that it is not arbitration (which is subj to judicial deference) and UDRP decisions ought to be reviewed de novo. ◦ Pfizer v. Van Robichaux (WIPO Panel Decsion → Abbott was sole panelist) Registrant registered the domain name viagra-nascar.com, which brought users to sites that sold Viagra and nascar tickets, as well as other products. Pfizer had registered

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Viagra tm in US and abroad and the name was well known. Pfizer was also a sponsor of Nascar. Abbott decided to transfer the domain name to Pfizer. ▫ The domain name is confusingly similar to Pfizer‘s mark and is likely to confuse consumers into thinking the site was affiliated w/ Pfizer b/c of Viagra‘s sponsorship of nascar. ▫ Registrant no right to domain name. ▫ Registrant used the mark to divert internet users to another site, which amts to bad faith. ◦ Pfizer v. Van Robichaux (WIPO Panel Decision → Abbott was sole panelist) Tort atty registered domain name, lipitorinfo.com, for possible later use if adverse effects of the lipitor drug were discovered. The site wasn‘t currently operating (passive use) and would have been used in the future to provide info re: counsel & litigation if adverse effects were discovered. Abbott didn‘t transfer the domain name to Pfizer b/c atty‘s use constituted nominal fair use (which involves identifying a product by its trademark, rather than being req‘d to describe the product. ▫ Note that determinations of fair use are context specific. ▫ The express requirement of ―making‖ fair use does not foreclose the establishment of a fair use defense where the disputed domain name hasn‘t actively been used. There are contexts in which the registrant of a domain name should not be expected to make immediate use of that name, including for legitimate noncommercial or fair use purposes. ▫ 3 prong test for determining if 3d pty use of a trademark = nom fair use: (1) the product must not be readily identifiable w/o use of the mark; (2) only so much of the mark may be used as is reasonably necessary to identify the product; and (3) the user must do nothing that would, in conjunction w/ the mark, suggest sponsorship or endorsement by the trademark holder. ▫ Nom fair use will always involve initial interest confusion. Initial interest confusion doesn‘t preclude nom fair use defense. ▫ Making a profit doesn‘t preclude nom fair use. ▫ A nominal fair user must not use more of the mark in the domain name than is reasonably necessary to identify the product. (Playboy) ▫ Abbott noted that public has legit interest in learning about side effects, suits, and legal rights w/r/t lipitor. In close cases where the complainant didn‘t carry its burden, the dispute belongs in court. Protection of Computer Software

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A. Patent Protection for Computer Software 1. Is Software Patentable Subj Matter? ◦ Initially, S.Ct. was hostile to patents on computer software. ► In Benson, ct held invalid a process claim for software that converted binarycoded decimal numerals into pure binary numbers. Ct noted that the process was an algorithm that solved the mathematical problem(s) of converting one form of numerical representation to another. Ct held that algorithms were unpatentable, treating them as abstract ideas. ◦ In recent yrs, the Ct of Appeals for Fed Circ has routinely upheld the grant of patents on computer software. ► In Alappat, ct held patentable ―data transformed by a machine through a series of mathematical calculations to produce a smooth waveform display‖ b/c it constituted a practical application of an abstract idea, or algorithm, that produced a “useful, concrete, & tangible result”. ▫ The fact that a claimed invention involves inputting, calculating, outputting, & storing numbers, in and of itself, doesn‘t render it non statutory subj matter. ▫ A process, machine, manufacture, or composition of matter that employs a law of nature / nat phenom / abstract idea is patentable even though the law of nature / nat phenom / abstract idea itself is not. ► In State Street Bank & Trust, ct similarly held computer software patentable b/c it produced a useful, concrete, & tangible result. → Thus, for practical purposes software and business methods that are implemented in software form ARE PATENTABLE. ◦ NOTE: In AT&T v. Excel, ct rejected argument that a patentable software claim must have physical structure associated w/ it b/c physical transformation is only one of several ways to bring about a useful result. The scope of §101 is the same regardless of the form—machine or process—in which a partic clm is drafted. 2. Examination & Validity of Software Patents Application of Basic Patent Principles in Software Industry ◦ A valid software patent must pass 4 other tests. It must be: ▪ useful (which most computer programs that work will meet, as utility isn‘t a partic‘ly strict test); ▪ novel; ▪ nonobvious; AND ▪ clearly described in the patent application. a. Novelty & Statutory Bars

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◦ Informal software demonstrations may constitute ―public use‖ of a software invention under §102(b) (and by extension also §102(a)‘s ―known or used‖ req‘ment, presumably). ► Patent holder‘s s demonstration of his remote database (software) to 2 members of a university‘s computing personnel constituted a patentinvalidating public use in. where patent holder failed to inform attendees of demonstration that confidentiality was req‘d & those attendees were easily capable of demonstrating his invention to others. (Netscape v. Konrad) ◦ Offers to allow others to use software even in a quasi-commercial setting may trigger the §102 on sale bar. ► A Patent holder‘s offering his software syst to an outside research lab in exchange for 4 months salary constituted a commercial offer for sale. (Even though his main employer and the potential customer received dept of energy funding they were considered ―separate commercial entities‖ b/c they weren‘t controlled by same entity.)

b. Nonobviousness ◦ A software program may constitute prior art if known or used by the public, even if the public is prevented from seeing how it works or duplicating it. ► In Lockwood, patent-holder for computerized system of tailoring sales presentations to travel agents' customers brought action against airline, claiming that airline's computerized reservation system was infringing. The airline‘s software syst was an improvement over their original system. Airline argued that the patent-holder‘s patent was invalid b/c it was obvious in light of the prior art, their orig software syst. Ct Held That: Though the essential algorithms of the orig software system were not accessible to the public and the aspects of the syst that were readily apparent to the public wouldn‘t have enabled one reasonably skilled in the art to duplicate the system, the orig system constituted prior art. → The public need not have access to the inner wkings of a device for it to be considered “in public use” or “used by others” w/in the meaning of the statute. ie public use has no enablement-type req’ment. ◦ Software (& bus method) patents have been criticized for ignoring much of the prior art. → 3 possible explanations: ▪ Since software wasn‘t clearly patentable until the mid-90s, the PTO has only recently begun to hire examiners who are qualified in computer software/ related fields. Thus, applications were handled by people outside their field of expertise, who issued

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patents on software that didn‘t meet the standards of novelty & nonobviousness. ▪ Similarly, PTO classified software patents according to the field in which the software would ultimately be used, rather than by the nature of the software invention. This makes it harder for examiners to determine what prior art exists. ▪ Prior art in the software field is simply more difficult to find b/c it often lies outside the areas where PTO trad‘ly looked, previously issued patents & scholarly publications. ◦ In Amazon, Patentee brought action against competitor, alleging infringement of patent claiming a "1-Click®" method and system for placing purchase orders over the Internet. Patentee's motion for preliminary injunction was granted by the lwr ct and competitor appealed. The Court of Appeals held that though patentee demonstrated likely literal infringement of at least the four independent claims of the patent, competitor mounted a serious challenge, based on obviousness in light of on prior art, to the validity of the patent, precluding preliminary injunction. ▫ The test for patent validity, the Q at trial, is by clear & convincing evidence. ▫ H/e, in resisting a prelim injunction, one need not make out a case of actual invalidity. Patent vulnerability (showing a substantial Q as to invalidity) is the issue at prelim injunction stage and carries lwr burden than showing invalidity at trial. Validity challenges during prelim injunction proceedings can be successful on evidence that wouldn‘t suffice to support a judgment of invalidity at trial. ▫ Here, ct held that competitor‘s citing prior art cast enough doubt on the issue of nonobviousness (and thus invalidity) to avoid prelim injunction. Remanded.

c. Enablement of Software Inventions ◦ Enablement Req’ment §112 The specification shall contain a written description of the invention, and of the manner & process of making and using it, in such full clear, concise, & exact terms as to enable any person skilled in the art to which it pertains, or w/ which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention. ◦ Gen‘ly, the actual program code need not be revealed in patent specification to meet the enablement req‘ment. → Fed Cir held that when clms pertain to a computer program that implements a clm‘d device or method, the enablement req‘ment varies according to the nature of the invention and the role/complexity of the computer program needed to implement it. ► Where the core of the claimed invention was the combo of steps rather than the details of the program the applicant used, the

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applicant had met the enablement req‘ment had been met. Ct emphasized that in light of the specification, it would‘ve been relatively straightforward for a skilled computer programmer to design a program to carry out the clm‘d invention. → H/e, Fed Cir held that mere identification of a program translator in patent specification, without the specifics, didn‘t meet patent applicant‘s duty under §112. In that case, it would‘ve taken 2 yrs to recreate the program w/ the info given. Ct seemed concerned that this would extend the patent beyond the statutory term. (White v. Vega, 1983) ◦ The best mode req‘ment of §112 is unmet when an inventor intentionally withholds from the patent specification info that discloses the best means of which she is aware for practicing her invention. Gen‘ly cts haven‘t req‘d software program code disclosure to meet the best mode req‘ment, as long as the best mode is stated. ▫ Possible rationale: normally, writing code for such software is within the skill of the art. ▫ In 2 cases, fed circ held that best mode req‘ment was met for inventions partially implemented in software even though the terms ―computer‖ or ―software‖ weren‘t included in the specification. Ct reasoned that it would be plainly apparent to one skilled in the art that software would be req‘d. 3. Infringement ◦ British Telecommunications v. Prodigy Communications Owner of patent for accessing computer data over telephone network sued Internet Service Provider (ISP) for direct and contributory infringement. Ct held that the Internet, which ISP's system enabled subscribers to access, did not literally or equivalently infringe patent. (1) B/c the internet contains no central computer as clm‘d in the patent, it doesn‘t infringe on patent. ▫ Further, the claim fails under doctrine of equivalents, which req‘s insubstantial differences b/t the patented invention and the accused product, determined on an element-by-element basis. Clm fails the function-way-result test b/c a central computer operates in a substantially different ways than the internet. ▫ Though additions to the accused product of one or more features than the patent clm req‘s doesn‘t preclude a finding of infringement, here there aren‘t additions but fundamental differences in the nature of the clm elements. (2) B/c the internet contains no blocks of info as specified in patent (as it uses HTML, not blocks), it doesn‘t literally infringe. ▫ And, b/c applicant added limitations to avoid prior art (re: info blocks), the doctrine of equivalents is unavail w/r/t those clm limitations.

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◦ Trend in software infringement cases: to interp clms narrowly. ► Nintendo‘s video game didn‘t infringe on another‘s means- plus-function television switch patent b/c the claimed function of the switches wasn‘t identical. ▫ A poss explanation for cts interp‘ing software clms narrowly is that software patents have usu‘ly been written in means-plus-function format. ▫ Another is cts‘ narrow application of the doctrine of equivalents in software context (b/c of the special nature of innovation in the software industry). → H/e, Also note that the reverse doctrine of equivalents, which protects Ds whose products fall w/in the literal scope of patent clms, but which are in fact substantially different from the patented invention. B. Software Trademark (TM) & Trade Dress (TD) ◦ TM protection can enhance the protection of new technology (as consumers value obtaining programs that are compatible w/ popular operating systems). It can also inhibit competition by limiting the ability of new entrants to inform consumers of the compatible attributes of their products. ◦ TM & TD protection is provided by the Lanham Act and state c/l. → Trademark law gen‘ly applies to computers in the same way as it does to other industries. 1. Protecting Programs Thru Trademark ◦ The Lanham Act protects trade dress, which encompasses the total design of product packaging incl‘ing shape and color. → H/e S.Ct distinguished b/t 2 forms of trade dress: ▪ Product Packaging (which obtains trade dress protection IF inherently distinctive); AND ▪ Product Configuration (which obtains trade dress protection ONLY UPON establishing secondary meaning, even if inherently distinctive) ◦ A person asserting trade dress protection for a patented product design or element bears a heavy burden in rebutting the presumption that the trade dress is functional (and thus not protected under trademark law). NOTE: This is relevant to computer industry b/c most products capable of trademark protection in that industry qualify as product configurations and many have functional aspects. ► the shape of a computer or monitor such as iMac = product configuration ► arguably, so is the layout of icons on a computer screen ◦ ―Distinctiveness‖ encompasses trademarks that: ▪ are arbitrary, suggestive, or fanciful; OR

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▪ are descriptive of the products they identify but have acquired ―secondary meaning‖ in the minds of consumers as identifying a product from a partic source ◦ TM protection doesn‘t extend to TMs that are merely descriptive of the things being identified. Generic terms / dress aren‘t protected. → It can be argued that many user interfaces are inherently distinctive b/c the way the interface wks is unrelated to the nature of the functions perf‘d. H/e, indiv elements of the interface may merely be descriptive of the functions perf‘d. Q: how do/should cts classify trash can icon used to delete files? must ea indiv element be distinctive in order to be protected or is it sufficient that the interface as a whole is not descriptive of a computer operating system? → Alternatively, one might treat such computer graphics as product configurations, which are subj to different rules regarding distinctiveness in some circuits. → Where a user interface has become the de facto standard in the industry so that people naturally use it for a certain type of program, it is likely generic (and therefore unprotectable). ◦ TD protection doesn’t extend to any part of the dress that is functional. B/c most of the effort in software design is focused toward making programs efficient/easy to use, the functionality rule prevents companies from monopolizing a new innovation indefinitely thru TM law. ▫ Whether functionality of TD should be tested by looking to the dress as a whole or by eval‘ing the purpose of indiv elements. → It is argued that the elemental approach is appropriate in the software context, where alleged infringers take only a few pieces of P‘s TD. If the elements taken are all functional, there‘d be no infringement. → Testing the TD as a whole could allow greater leeway for protection of partially functional TD. H/e, it could also yield the result that if any part of the interface is functional, none of it is protectable. ◦ Kellner argues in her article (974), that TM law could be used to protect the ―look and feel‖ of computer software against imitation. ▫ B/c computer users rely on user interfaces to identify computer programs, TD, which protects a products overall appearance to the public (b/c of consumers‘ interest in identifying the product‘s source), is an appropriate source of protection for user interfaces. ▫ TD law is also an appropriate source of protection where consumers are fooled into buying products b/c of their look alike interfaces (b/c this kind

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of misappropriation of another product‘s good reputation is what TD is designed to prevent). → h/e, several cts have found consumer confusion unlikely where the buyers were relatively sophisticated and where buyers were purchasing big ticket items. C. Sui Generis Protection of Computer Technology ◦ Computer technology doesn‘t fit neatly w/in any of the categories of IP law. Patent, copyright, trade secret, & trademark law all protect some aspects of computer programs, though not necessarily what we want to protect/encourage. → Many commentators have suggested that we need a new IP statute directed specifically at computer technology and responsive to the needs of the industry. ◦ The design of a good chip layout may req extensive effort and be extremely time consuming. A new semiconductor chip may incur lg R&D costs, yet after the layout is imprinted in the mask work and the chip is avail in commerce, it can be copied at a fraction of the cost to the originator. → Thus, there was concern that widespread copying of new chip layouts would have adverse effects on innovative advances in semiconductor technology ◦ Congress responded to these concerns in 1984 by enacting the Semiconductor Chip Protection Act (SCPA). ▫ created new law specifically adapted to the protection of design layouts of semiconductor chips. ▫ Chip design layouts embody the selection & configuration of electrical components & connections in order to achieve desired electronic functions. The electrical elements are configured in 3D, and are built up in layers by a series of ―masks‖ whereby layers of metallic, insulating, & semiconductor material are deposited in a desired pattern on a wafer of silicon. This set of masks is called a ―mask work‖ (and is part of the semiconductor chip product). ▫ ―Mask work‖ is def‘d by SCPA as: A series of related images, however fixed or encoded (a) having or representing the predetermined, 3D pattern of metallic, insulating, or semiconductor material present or removed from the layers of a semiconductor chip product; AND (b) in which series the relation of the images to one another is that ea image has the pattern of the surgace of one form of a semiconductor chip product ▫ ―Semiconductor chip‖ def‘d as: The final or intermediate form of any product— (a) having 2 or more layers of metallic, insulating, or semiconductor material deposited or otherwise placed on, or etched away or otherwise

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removed from, a piece of semiconductor material in accordance w/ a predetermined pattern; AND (b)intended to perform electronic circuitry functions ▫ The ASCP grants of exclusive rights to owners of registered mask works, incl‘ing the exclusive right to ―reproduce the mask work by optical, electronic, or any other means‖ and to ―import or distribute a semiconductor chip product in which the mask work is embodied.‖ → Protection IS NOT extended to mask works that: ▪ are not original; ▪ consist of designs that are staple, commonplace, or familiar in the semiconductor industry, ▪ consist of variations of such designs, combined in a way that, considered as a whole, is not original. → Protection is not extended to ANY ―idea, procedure, process, syst, method of operation, concept, principle, or discovery, REGARDLESS of the form in which it is described, explained, illustrated, or embodied‖ in the mask work. ◦ Possible Alternatives & the Potential for Development of a Sui Generis Regime for the protection of computer software ◦ From Article (982) Suggested Tailoring of Legal Protection for Operating Systs ▫ Congress could consider creating a hybrid form of patent protection specifically tailored to the issues surrounding computer operating systs. ie Promoting standardization while at the same time encouraging continuing innovation. ▫ b/c of the rapid pace of technological change, protection could be shorter than trad patent protection. (and applications would have to be exam‘d in timely manner) ▫ it could (like SCPA) allow a limited form of reverse engineering ▫ it could contain a flexible compulsory licensing provision (in contrast to the absolute protection of trad patent law) Suggested Tailoring of Legal Protection for Application Programs ▫ B/c improving existing programs is a primary mode of technological innovation, legal protection could be signif‘ly shorter in duration than trad copyright protection. ▫ should allow for reverse engineering to enable researchers to advance the application of software technology ▫ should allow a limited form of compulsive licensing

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◦ Some have also proposed a brief (1-5 yr) automatic anticloning protection for program behavior & industrial designs of programs in order to reward software development. Digital IP Domain Names & Cybersquatting ◦ Domain names are mnemonic devices that lead to a partic internet address. They‟re registered by a variety of registrars on a first-come, first-served basis for about $35. ◦ During the 1990s many people registered domain names that corresponded to the name or mark of someone else, often a lg corporation. Many did this to sell the domain name to the trademark owner for well over the price of registration. This practice—the b/f, abusive registration & use of distinctive trademarks of others as internet domain names w/ the intent to profit from the goodwill associated w/ the mark—is known as cybersquatting. Others registered generic names (like business.com) & sold them for lg profit. Still others registered companies‟ names for legit reasons: to criticize co or advertise company products avail at a website. ◦ Orig‟ly, Congress chartered Netwk Solutions to register domain names. They made the relevant determinations re: who was given the names as there was no legal system in place for determining allocation of domain names. → Netwk Solutions still functions as registrar of registrars (maintaining the syst under ICAAN). There is continuing debate in Geneva re: whether the registrar should be an internat‟l body, rather than US chartered corporation. Concerns Leading to Enactment of ACPA: ◦ The orig landrush syst for acquiring domain names led to concerns about: (1) indivs registering a domain name (for about $ 40) to sell for lg profit to its trademark-holder; and (2) indivs using trademark domain names to divert internet traffic to other sites for profit (think: porn) ◦ Trademark infringement & dilution weren‟t well suited to preventing cybersquatting b/c most uses of a domain name are non-infringing.

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▫ Though dilution reached classic cases of cybersquatting (registering a domain name that correspond‟s to another‟s mark for purpose of extorting money from the mark owner). ▫ H/e, some instances of cybersquatting couldn‟t be punished under trademark laws and cts were sometimes stretching the law to stop cybersquatting. a. Anticybersquatting Consumer Protection Act (ACPA) ◦ Makes it illegal to register a domain name that corresponds to a trademark where the domain name registrant: ▪ has no legit interest in using the name; and ▪ acts in b/f to deprive the owner of the use of the name. ◦ 15 USC § 1125(c)(1) A person shall be liable in a civ action by the owner of a mark if, w/o/r/t the goods or svcs of the ptys, that person (i) has a b/f intent to profit from that mark (incl‟ing a personal name which is protected as a mark under this section); (ii) registers, traffics in, or uses a domain name that— (I) in the case of a mark that is distinctive at the time of registration of the domain name: is identical or confusingly similar to the mark; (II) in the case of a famous mark that is famous at the time of registration of the domain name: is identical or confusingly similar to or dilutive of that mark. ◦ Thus, To succeed on ACPA clm, Plaintiff must show: ▪ The mark is a distinctive or famous mark entitled to protection; ▪ The domain name(s) in Q are “identical or confusingly similar to” such protected mark; AND ▪ The person who registered the domain names did so with the b/f intent to profit from them & their goodwill. ▫ Factors to Consider in determining whether a mark is distinctive or famous: 1125(d)(1)(A)(ii)(I) & (II) (h) degree of inherent or acquired distinctiveness of the mark; (i) the duration & extent of use of the mark in connection w/ the goods or svcs with which the mark is used; (j) the duration and extent of advertising and publicity of the mark;

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(k) (l) (m) (n)

the geographical extent of the trading area in which the mark is used; the channels of trade for the goods or svcs with which the mark is used; the degree of recognition of the mark in the trading areas and channels of trade used by the marks‟ owner and the person against whom the injunction is sought; the nature and extent of use of the same or sim marks by 3d ptys

▫ “Confusingly Similar” reasonably includes: ► typosquatting: the intentional registration of domain names that are misspellings of distinctive or famous marks, causing an internet user who makes slight spelling mistakes / typing errors to reach an unintended site. → People so freq‟ly misspell domain names that one could get tens of thousands of hits per day and with 3d pty advertisers paying a small amt per hit, and make loads of money. → think: “dosney.com” (misspelling of Disney) leading toddlers to hardcore porn website. Legislature intended to prevent exactly this in enacting ACPA, according to legisl hx. ▫ Factors to consider when determining whether registrant acted in b/f (§1125(d)(1)(B)(i), a non exhaustive list): ▪ The trademark or other IP rights of the person, if any, in the domain name; ▪ The extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to id the person; ▪ The person‟s prior use, if any, of the domain name in connection w/ the bona fide offering of goods/svcs; ▪ The person‟s bona fide noncommercial or fair use of the mark in a site accessible under the domain name; ▪ 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 associated w/ the mark (either for commercial gain or w/ intent to tarnish/disparage the mark, bu creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site);

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▪ The person‟s offer to transfer, sell, or otherwise assign the domain name to the mark owner or 3d pty for fin gain w/o having used / intended to use the domain name in the bona fide offering of goods/svcs OR the person‟s prior conduct indicating a pattern of such conduct; ▪ The person‟s provision of material & misleading false contact info when applying to register domain name, the person‟s intentional failure to maintain accurate contact info, or the person‟s prior conduct indicating a pattern of such conduct; ▪ The person‟s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of other that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names; ▪ The extent to which the mark incorporated in the person‟s domain name registration is or is not distinctive and famous. ◦ Safe Harbor Provision §1125(d)(1)(B)(ii) Bad Faith intent shall NOT be found in any case in which the ct determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use and otherwise lawful. ▫ In PETA, D registered the domain name “peta.org,” where he set up a page called people “eating tasty animals” (a parody of PETA & its goals. While domain name obviously confusingly similar, D‟s defense is that he was exercising his 1st amend. right to free speech. → H/e, ct held that b/c D made statements to the press & on his website recommending that PETA settle w/ him and make him an offer (which amts to partial b/f), D cannot benefit from the safe harbor provision. A D who acts even in partial b/f when registering a domain name is not entitled to benefit from the safe harbor provision. → NOTE: whether seeking offer or settlement is proper depends upon the circs of partic case. For example, selling mysouthwest.com (a domain name legitimately used by southwestern-style clothing retailer to sell merchandise) to southwest airlines wouldn‟t likely seem improper b/c name had been in legit use.

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A: here, D may argue that no one who visited his site would think it was sponsored by PETA. counterpt: initial interest confusion. This is a borderline case, criticized for not taking into acct D‟s potential fair use of the registered mark. ◦ What constitutes a legit interest in a domain name? ▫ D has its own trademark that corresponds to the domain name. → If more than 1 company has a legit clm to a trademark, any of them may register the domain name. ACPA doesn‟t require that it be assigned to the best or lgst mark owner. → H/e, some cts have ruled for Ps when D‟s bad faith outweighed D‟s legit rights in the name. ► (D virtual works held liable for registering vw.net b/c its knowl of likely confusion w/ Volkswagen and its discussion of selling the name to Volkswagen meant it didn‟t have legit interest in the name) ▫ D is a legal reseller of P‟s product. Cts are divided re: whether this is legit use. ▫ D wants to criticize / make fun of P. ► [company‟s name] sucks.com Though consumers not likely confused into thinking the site was owned or sponsored by the company, some cts have found them infringing (while others have not) ◦ Some clms of legit interest are pretextual. ► D‟s attempt to demonstrate a legit interest in oxforduniversity.com by changing one‟s name to Oxford University failed. ◦ Remember: Personal names aren‟t generally marks and thus aren‟t entitled to ACPA protection. H/e, celebrities who have registered their names as trademarks (like OJ Simpson) are entitled to the same protection as any corporate trademark owner under the statute. Retroactivity ◦ A person who unlawfully registers, traffics in, or uses a domain name after the ACPA‟s date of enactment, 11/29/1999, can be liable for money dmgs. ► one who registered a domain name in b/f before ACPA could be liable for statutory dmgs when s/he cont‟d to use the site after enactment of ACPA.

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◦ ACPA applies to all domain names registered before, on, or after the date of enactment. Though statute precludes money dmgs in cases where domain names were registered, trafficked in, and used before its enactment, equitable remedies are avail. → equitable remedies include: ordering registrant to relinquish domain name, transfer name to mark owner, and limit her use of domain names to those that don‟t use the mark. Damages under ACPA ▫ statutory dmgs: not less than $1,000 or more than $100,000 per domain name, as the ct considers just. ▫ atty fees, if qualifies as an “exceptional” case under ACPA. ▫ equitable remedies (see above) JurisD over cybersquatters: ▪ In the case of a cybersquatter in US, P may sue cybersquatter in any district with which „squatter has min contacts ▪ In the case where P cannot find „squatter, P can obtain in rem jurisD in the jurisD where the domain name resides by publishing legal notice of the suit & then filing against the domain name itself. b. The Uniform Dispute Resolution Procedure (UDRP) ◦ In the late 90s Network Solutions faced a series of lawsuits from mark owners trying to hold Network Solutions liable for letting „squatters to register their marks as domain names. As a result Network Solutions set up dispute resolution policy and req‟d registrants to agree to arbitrate their disputes w/ Netwk Solutions. ◦ The Internet Corporation for Assigned Names & Numbers (ICANN) was formed in 1999 to deal w/ cybersquatting outside the ct syst. It estab‟d a compulsory pvt dispute res process ( the UDRP) for dealing w/ cases of „squatting. It req‟s all internet registrars to req their customers to submit to the process. ▫ UDRP set up to deal w/ abuse of domain names cheaply & quickly. ▫ Under UDRP, a mark owner can file a complaint w/ an approved dispute res provider for sm. fee. Domain name registrant is notified and may file a response. → h/e, the panelists‟ pwr is limited to deciding whether to transfer the domain name at issue to the complainant. (Loser has 10 days to file a suit w/ the ct disputing the decision.)

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▫ UDRP international in scope. Deals only w/ true cases of cybersquatting, leaving questionable cases to cts. The Standard for Proving Cybersquatting (v. sim to ACPA) ▫ Complainant must demonstrate 3 things: ▪ Respondent‟s domain name is identical or similar to a mark in which the Complainant has rights; ▪ Respondent has no rights or legit interests w/r/t the domain name; AND ▪ Respondent‟s domain name has been registered & is being used in b/f. ◦ The following circs, if found by panel to be present, shall be evidence of the registration and use of a domain name in bad faith (non exhaustive list): ▪ circs indicating that registrant registered or acquired the name primarily for the purpose of selling, renting, or otherwise transferring the domain name to the complainant or her competitor (for valuable consideration in excess of Respondent‟s documented out-of-pocket costs directly related to the domain name; ▪ registrant registered the name to prevent the mark owner from reflecting the mark in a corresponding domain name, provided she has engaged in a pattern of such conduct; ▪ registrant registered the name primarily to disrupt the business of a competitor; ▪ by using the name, registrant intentionally attempted to attract, for commercial gain, internet users to her website by creating a likelihood of confusion w/ the complainant‟s mark as to the source, sponsorship, affiliation, or endorsement of registrant‟s website. ◦ The following circs, if found by panel to be proved by all the evidence presented, demonstrate a registrant‟s right or legit interest in the domain name: ▪ before any notice of the dispute, registrant‟s use of or demonstrable preparation to use the domain name in connection w/ a bona fide offering of goods/svcs; ▪ registrant has been commonly known by the domain name, even if she‟s acquired no trademark rights; ▪ registrant is making legit, noncommercial or fair use of the name w/o intent for commercial gain to misleadingly divert consumers or to tarnish the mark at issue.

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◦ NOTE: 80% of the UDRP panel decisions rule for mark owner. Have been criticized for being unduly favorable to mark owners. ◦ Indiv UDRP decisions have also generated controversy, mainly centering on the 4 elements of a UDRP clm: ▫ A legit trademark right Sometimes a complainant doesn‟t have a trademark in the name it seeks to control. Though the proper result is for the panel to dismiss the case, some panelists (and cts) have been persuaded to grant the complainant rights in wds it doesn‟t own as a mark. ► Barcelona.com was transferred to the city of Barcelona, though city held no trademark in the name. ▫ An identical or confusingly similar domain name Some panelists have ordered the transfer of domain names that don‟t meet this standard. ► walmartsucks.com was transferred to walmart, though no reasonable consumer would think wally world sponsored the domain name ▫ Absence of a legit right UDRP req‟s proof that domain name registrant lacks any right to use the domain name. Mark owners can‟t use the UDRP to oust others mark owners from the use of a mark—if both have a legit clm to the name, UDRP wont step in to decide who is most entitled to use the mark. However, sometimes panels seem to consider who ought to be entitled to the mark. This also comes up in context of: ▪ nominative use ▪ noncommercial uses of a name ▪ criticism of a trademark owner (which are presumed to be legit rights to domain name) ▫ Bad Faith Some panelists have held registering domain names to criticize mark owner to constitute bad faith, though that is a legit use of the name. ◦ Other criticisms of UDRP ▫ the mark owner decides which dispute resolution company will decide the case and companies seem to compete for approval of mark owners. ▫ short deadlines and absence of council lead many respondents not to dispute the transfer of their domain names 105

◦ B/c of the limits of the UDRP process, cts have unanimously held that it is not arbitration (which is subj to judicial deference) and UDRP decisions ought to be reviewed de novo. ◦ Pfizer v. Van Robichaux (WIPO Panel Decsion → Abbott was sole panelist) Registrant registered the domain name viagra-nascar.com, which brought users to sites that sold Viagra and nascar tickets, as well as other products. Pfizer had registered Viagra tm in US and abroad and the name was well known. Pfizer was also a sponsor of Nascar. Abbott decided to transfer the domain name to Pfizer. ▫ The domain name is confusingly similar to Pfizer‟s mark and is likely to confuse consumers into thinking the site was affiliated w/ Pfizer b/c of Viagra‟s sponsorship of nascar. ▫ Registrant no right to domain name. ▫ Registrant used the mark to divert internet users to another site, which amts to bad faith. ◦ Pfizer v. Van Robichaux (WIPO Panel Decision → Abbott was sole panelist) Tort atty registered domain name, lipitorinfo.com, for possible later use if adverse effects of the lipitor drug were discovered. The site wasn‟t currently operating (passive use) and would have been used in the future to provide info re: counsel & litigation if adverse effects were discovered. Abbott didn‟t transfer the domain name to Pfizer b/c atty‟s use constituted nominal fair use (which involves identifying a product by its trademark, rather than being req‟d to describe the product. ▫ Note that determinations of fair use are context specific. ▫ The express requirement of “making” fair use does not foreclose the establishment of a fair use defense where the disputed domain name hasn‟t actively been used. There are contexts in which the registrant of a domain name should not be expected to make immediate use of that name, including for legitimate noncommercial or fair use purposes. ▫ 3 prong test for determining if 3d pty use of a trademark = nom fair use: (1) the product must not be readily identifiable w/o use of the mark;

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(2) only so much of the mark may be used as is reasonably necessary to identify the product; and (3) the user must do nothing that would, in conjunction w/ the mark, suggest sponsorship or endorsement by the trademark holder. ▫ Nom fair use will always involve initial interest confusion. Initial interest confusion doesn‟t preclude nom fair use defense. ▫ Making a profit doesn‟t preclude nom fair use. ▫ A nominal fair user must not use more of the mark in the domain name than is reasonably necessary to identify the product. (Playboy) ▫ Abbott noted that public has legit interest in learning about side effects, suits, and legal rights w/r/t lipitor. In close cases where the complainant didn‟t carry its burden, the dispute belongs in court.

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Protection of Computer Software A. Patent Protection for Computer Software 1. Is Software Patentable Subj Matter? ◦ Initially, S.Ct. was hostile to patents on computer software. ► In Benson, ct held invalid a process claim for software that converted binary-coded decimal numerals into pure binary numbers. Ct noted that the process was an algorithm that solved the mathematical problem(s) of converting one form of numerical representation to another. Ct held that algorithms were unpatentable, treating them as abstract ideas. ◦ In recent yrs, the Ct of Appeals for Fed Circ has routinely upheld the grant of patents on computer software. ► In Alappat, ct held patentable “data transformed by a machine through a series of mathematical calculations to produce a smooth waveform display” b/c it constituted a practical application of an abstract idea, or algorithm, that produced a “useful, concrete, & tangible result”. ▫ The fact that a claimed invention involves inputting, calculating, outputting, & storing numbers, in and of itself, doesn‟t render it non statutory subj matter. ▫ A process, machine, manufacture, or composition of matter that employs a law of nature / nat phenom / abstract idea is patentable even though the law of nature / nat phenom / abstract idea itself is not. ► In State Street Bank & Trust, ct similarly held computer software patentable b/c it produced a useful, concrete, & tangible result. → Thus, for practical purposes software and business methods that are implemented in software form ARE PATENTABLE. ◦ NOTE: In AT&T v. Excel, ct rejected argument that a patentable software claim must have physical structure associated w/ it b/c physical transformation is only one of several ways to bring about a

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useful result. The scope of §101 is the same regardless of the form— machine or process—in which a partic clm is drafted. 2. Examination & Validity of Software Patents Application of Basic Patent Principles in Software Industry ◦ A valid software patent must pass 4 other tests. It must be: ▪ useful (which most computer programs that work will meet, as utility isn‟t a partic‟ly strict test); ▪ novel; ▪ nonobvious; AND ▪ clearly described in the patent application. a. Novelty & Statutory Bars ◦ Informal software demonstrations may constitute “public use” of a software invention under §102(b) (and by extension also §102(a)‟s “known or used” req‟ment, presumably). ► Patent holder‟s s demonstration of his remote database (software) to 2 members of a university‟s computing personnel constituted a patent-invalidating public use in. where patent holder failed to inform attendees of demonstration that confidentiality was req‟d & those attendees were easily capable of demonstrating his invention to others. (Netscape v. Konrad) ◦ Offers to allow others to use software even in a quasicommercial setting may trigger the §102 on sale bar. ► A Patent holder‟s offering his software syst to an outside research lab in exchange for 4 months salary constituted a commercial offer for sale. (Even though his main employer and the potential customer received dept of energy funding they were considered “separate commercial entities” b/c they weren‟t controlled by same entity.) b. Nonobviousness ◦ A software program may constitute prior art if known or used by the public, even if the public is prevented from seeing how it works or duplicating it. ► In Lockwood, patent-holder for computerized system of tailoring sales presentations to travel agents' customers brought action against airline, claiming that airline's computerized reservation system was infringing. The airline‟s software syst was an improvement over their original system. Airline argued that the patent-holder‟s 109

patent was invalid b/c it was obvious in light of the prior art, their orig software syst. Ct Held That: Though the essential algorithms of the orig software system were not accessible to the public and the aspects of the syst that were readily apparent to the public wouldn‟t have enabled one reasonably skilled in the art to duplicate the system, the orig system constituted prior art. → The public need not have access to the inner wkings of a device for it to be considered “in public use” or “used by others” w/in the meaning of the statute. ie public use has no enablement-type req’ment. ◦ Software (& bus method) patents have been criticized for ignoring much of the prior art. → 3 possible explanations: ▪ Since software wasn‟t clearly patentable until the mid-90s, the PTO has only recently begun to hire examiners who are qualified in computer software/ related fields. Thus, applications were handled by people outside their field of expertise, who issued patents on software that didn‟t meet the standards of novelty & nonobviousness. ▪ Similarly, PTO classified software patents according to the field in which the software would ultimately be used, rather than by the nature of the software invention. This makes it harder for examiners to determine what prior art exists. ▪ Prior art in the software field is simply more difficult to find b/c it often lies outside the areas where PTO trad‟ly looked, previously issued patents & scholarly publications. ◦ In Amazon, Patentee brought action against competitor, alleging infringement of patent claiming a "1-Click®" method and system for placing purchase orders over the Internet. Patentee's motion for preliminary injunction was granted by the lwr ct and competitor appealed. The Court of Appeals held that though patentee demonstrated likely literal infringement of at least the four independent claims of the patent, competitor mounted a serious challenge, based on obviousness in light of on prior art, to the validity of the patent, precluding preliminary injunction. 110

▫ The test for patent validity, the Q at trial, is by clear & convincing evidence. ▫ H/e, in resisting a prelim injunction, one need not make out a case of actual invalidity. Patent vulnerability (showing a substantial Q as to invalidity) is the issue at prelim injunction stage and carries lwr burden than showing invalidity at trial. Validity challenges during prelim injunction proceedings can be successful on evidence that wouldn‟t suffice to support a judgment of invalidity at trial. ▫ Here, ct held that competitor‟s citing prior art cast enough doubt on the issue of nonobviousness (and thus invalidity) to avoid prelim injunction. Remanded. c. Enablement of Software Inventions ◦ Enablement Req’ment §112 The specification shall contain a written description of the invention, and of the manner & process of making and using it, in such full clear, concise, & exact terms as to enable any person skilled in the art to which it pertains, or w/ which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention. ◦ Gen‟ly, the actual program code need not be revealed in patent specification to meet the enablement req‟ment. → Fed Cir held that when clms pertain to a computer program that implements a clm‟d device or method, the enablement req‟ment varies according to the nature of the invention and the role/complexity of the computer program needed to implement it. ► Where the core of the claimed invention was the combo of steps rather than the details of the program the applicant used, the applicant had met the enablement req‟ment had been met. Ct emphasized that in light of the specification, it would‟ve been relatively straightforward for a skilled computer programmer to design a program to carry out the clm‟d invention. → H/e, Fed Cir held that mere identification of a program translator in patent specification, without the specifics, didn‟t meet patent applicant‟s duty under §112. In that 111

case, it would‟ve taken 2 yrs to recreate the program w/ the info given. Ct seemed concerned that this would extend the patent beyond the statutory term. (White v. Vega, 1983) ◦ The best mode req‟ment of §112 is unmet when an inventor intentionally withholds from the patent specification info that discloses the best means of which she is aware for practicing her invention. Gen‟ly cts haven‟t req‟d software program code disclosure to meet the best mode req‟ment, as long as the best mode is stated. ▫ Possible rationale: normally, writing code for such software is within the skill of the art. ▫ In 2 cases, fed circ held that best mode req‟ment was met for inventions partially implemented in software even though the terms “computer” or “software” weren‟t included in the specification. Ct reasoned that it would be plainly apparent to one skilled in the art that software would be req‟d. 3. Infringement ◦ British Telecommunications v. Prodigy Communications Owner of patent for accessing computer data over telephone network sued Internet Service Provider (ISP) for direct and contributory infringement. Ct held that the Internet, which ISP's system enabled subscribers to access, did not literally or equivalently infringe patent. (1) B/c the internet contains no central computer as clm‟d in the patent, it doesn‟t infringe on patent. ▫ Further, the claim fails under doctrine of equivalents, which req‟s insubstantial differences b/t the patented invention and the accused product, determined on an element-by-element basis. Clm fails the function-wayresult test b/c a central computer operates in a substantially different ways than the internet. ▫ Though additions to the accused product of one or more features than the patent clm req‟s doesn‟t preclude a finding of infringement, here there aren‟t additions but fundamental differences in the nature of the clm elements. (2) B/c the internet contains no blocks of info as specified in patent (as it uses HTML, not blocks), it doesn‟t literally infringe. ▫ And, b/c applicant added limitations to avoid prior art (re: info blocks), the doctrine of equivalents is unavail w/r/t those clm limitations.

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◦ Trend in software infringement cases: to interp clms narrowly. ► Nintendo‟s video game didn‟t infringe on another‟s meansplus-function television switch patent b/c the claimed function of the switches wasn‟t identical. ▫ A poss explanation for cts interp‟ing software clms narrowly is that software patents have usu‟ly been written in means-plusfunction format. ▫ Another is cts‟ narrow application of the doctrine of equivalents in software context (b/c of the special nature of innovation in the software industry). → H/e, Also note that the reverse doctrine of equivalents, which protects Ds whose products fall w/in the literal scope of patent clms, but which are in fact substantially different from the patented invention. B. Software Trademark (TM) & Trade Dress (TD) ◦ TM protection can enhance the protection of new technology (as consumers value obtaining programs that are compatible w/ popular operating systems). It can also inhibit competition by limiting the ability of new entrants to inform consumers of the compatible attributes of their products. ◦ TM & TD protection is provided by the Lanham Act and state c/l. → Trademark law gen‟ly applies to computers in the same way as it does to other industries. 1. Protecting Programs Thru Trademark ◦ The Lanham Act protects trade dress, which encompasses the total design of product packaging incl‟ing shape and color. → H/e S.Ct distinguished b/t 2 forms of trade dress: ▪ Product Packaging (which obtains trade dress protection IF inherently distinctive); AND ▪ Product Configuration (which obtains trade dress protection ONLY UPON establishing secondary meaning, even if inherently distinctive) ◦ A person asserting trade dress protection for a patented product design or element bears a heavy burden in rebutting the presumption that the trade dress is functional (and thus not protected under trademark law).

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NOTE: This is relevant to computer industry b/c most products capable of trademark protection in that industry qualify as product configurations and many have functional aspects. ► the shape of a computer or monitor such as iMac = product configuration ► arguably, so is the layout of icons on a computer screen ◦ “Distinctiveness” encompasses trademarks that: ▪ are arbitrary, suggestive, or fanciful; OR ▪ are descriptive of the products they identify but have acquired “secondary meaning” in the minds of consumers as identifying a product from a partic source ◦ TM protection doesn‟t extend to TMs that are merely descriptive of the things being identified. Generic terms / dress aren‟t protected. → It can be argued that many user interfaces are inherently distinctive b/c the way the interface wks is unrelated to the nature of the functions perf‟d. H/e, indiv elements of the interface may merely be descriptive of the functions perf‟d. Q: how do/should cts classify trash can icon used to delete files? must ea indiv element be distinctive in order to be protected or is it sufficient that the interface as a whole is not descriptive of a computer operating system? → Alternatively, one might treat such computer graphics as product configurations, which are subj to different rules regarding distinctiveness in some circuits. → Where a user interface has become the de facto standard in the industry so that people naturally use it for a certain type of program, it is likely generic (and therefore unprotectable). ◦ TD protection doesn‟t extend to any part of the dress that is functional. B/c most of the effort in software design is focused toward making programs efficient/easy to use, the functionality rule prevents companies from monopolizing a new innovation indefinitely thru TM law. ▫ Whether functionality of TD should be tested by looking to the dress as a whole or by eval‟ing the purpose of indiv elements.

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→ It is argued that the elemental approach is appropriate in the software context, where alleged infringers take only a few pieces of P‟s TD. If the elements taken are all functional, there‟d be no infringement. → Testing the TD as a whole could allow greater leeway for protection of partially functional TD. H/e, it could also yield the result that if any part of the interface is functional, none of it is protectable. ◦ Kellner argues in her article (974), that TM law could be used to protect the “look and feel” of computer software against imitation. ▫ B/c computer users rely on user interfaces to identify computer programs, TD, which protects a products overall appearance to the public (b/c of consumers‟ interest in identifying the product‟s source), is an appropriate source of protection for user interfaces. ▫ TD law is also an appropriate source of protection where consumers are fooled into buying products b/c of their look alike interfaces (b/c this kind of misappropriation of another product‟s good reputation is what TD is designed to prevent). → h/e, several cts have found consumer confusion unlikely where the buyers were relatively sophisticated and where buyers were purchasing big ticket items. C. Sui Generis Protection of Computer Technology ◦ Computer technology doesn‟t fit neatly w/in any of the categories of IP law. Patent, copyright, trade secret, & trademark law all protect some aspects of computer programs, though not necessarily what we want to protect/encourage. → Many commentators have suggested that we need a new IP statute directed specifically at computer technology and responsive to the needs of the industry. ◦ The design of a good chip layout may req extensive effort and be extremely time consuming. A new semiconductor chip may incur lg R&D costs, yet after the layout is imprinted in the mask work and the chip is avail in commerce, it can be copied at a fraction of the cost to the originator.

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→ Thus, there was concern that widespread copying of new chip layouts would have adverse effects on innovative advances in semiconductor technology ◦ Congress responded to these concerns in 1984 by enacting the Semiconductor Chip Protection Act (SCPA). ▫ created new law specifically adapted to the protection of design layouts of semiconductor chips. ▫ Chip design layouts embody the selection & configuration of electrical components & connections in order to achieve desired electronic functions. The electrical elements are configured in 3D, and are built up in layers by a series of “masks” whereby layers of metallic, insulating, & semiconductor material are deposited in a desired pattern on a wafer of silicon. This set of masks is called a “mask work” (and is part of the semiconductor chip product). ▫ “Mask work” is def‟d by SCPA as: A series of related images, however fixed or encoded (a) having or representing the predetermined, 3D pattern of metallic, insulating, or semiconductor material present or removed from the layers of a semiconductor chip product; AND (b) in which series the relation of the images to one another is that ea image has the pattern of the surgace of one form of a semiconductor chip product ▫ “Semiconductor chip” def‟d as: The final or intermediate form of any product— (a) having 2 or more layers of metallic, insulating, or semiconductor material deposited or otherwise placed on, or etched away or otherwise removed from, a piece of semiconductor material in accordance w/ a predetermined pattern; AND (b)intended to perform electronic circuitry functions ▫ The ASCP grants of exclusive rights to owners of registered mask works, incl‟ing the exclusive right to “reproduce the mask work by optical, electronic, or any other means” and to “import or distribute a semiconductor chip product in which the mask work is embodied.” → Protection IS NOT extended to mask works that: 116

▪ are not original; ▪ consist of designs that are staple, commonplace, or familiar in the semiconductor industry, ▪ consist of variations of such designs, combined in a way that, considered as a whole, is not original. → Protection is not extended to ANY “idea, procedure, process, syst, method of operation, concept, principle, or discovery, REGARDLESS of the form in which it is described, explained, illustrated, or embodied” in the mask work. ◦ Possible Alternatives & the Potential for Development of a Sui Generis Regime for the protection of computer software ◦ From Article (982) Suggested Tailoring of Legal Protection for Operating Systs ▫ Congress could consider creating a hybrid form of patent protection specifically tailored to the issues surrounding computer operating systs. ie Promoting standardization while at the same time encouraging continuing innovation. ▫ b/c of the rapid pace of technological change, protection could be shorter than trad patent protection. (and applications would have to be exam‟d in timely manner) ▫ it could (like SCPA) allow a limited form of reverse engineering ▫ it could contain a flexible compulsory licensing provision (in contrast to the absolute protection of trad patent law) Suggested Tailoring of Legal Protection for Application Programs ▫ B/c improving existing programs is a primary mode of technological innovation, legal protection could be signif‟ly shorter in duration than trad copyright protection. ▫ should allow for reverse engineering to enable researchers to advance the application of software technology ▫ should allow a limited form of compulsive licensing ◦ Some have also proposed a brief (1-5 yr) automatic anticloning protection for program behavior & industrial designs of programs in order to reward software development.

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