Law School Outline - Intellectual Property - Emory Law

Lori Littlejohn Intellectual Property Fall 2002 Professor Bagley Intellectual Property • Provides a form of property right in intangible products of investment, creative intellect, and/or labor • Policy goals of IP: to ensure a rich, diverse, competitive marketplace 1. Incentive to create 2. Promotion of competition o These two goals sometimes conflict b/c by giving IP rights (incentive to create) you may be cutting off free access by the public by limiting use (promotion of competition) o IP rights are limited by the trying to balance 1 & 2 Sources of Authority to regulate IP rights • Federal Regulation o Article 2, section 8 of the constitution: Patents and Copyrights o Commerce Clause (Article 1, section 8): trademarks and unfair competition in interstate commerce • State Regulation o Tenth Amendment and Supremacy Clause (Article 4) of the Constitution: gives states concurrent power to regulate IP Trade Secrets • Information (need not be patentable) • Provides competitive advantage/value to its owner from being not readily ascertainable • Subject of reasonable efforts to keep secret • Indefinite term • No protection if o Acquired by proper means o Independently developed Theories of Trade Secret Protection • Utilitarian/property o Encourage investment in developing information by protecting it as property • Tort o Deterrence of wrongful acts; maintenance of commercial morality o Breach of duty (merges with action for breach of contract) Definition of a Trade Secret • “Any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.” Restatement of Torts How to Determine A Trade Secret (Restatement Torts) • How widely is the idea or information known outside the Π’s business? o The information must be “substantially secret” • Who within the Π’s company knows the idea or information? o Is it only the people who “need to know” o What precautions has the company with those who need to know (e.g. confidentiality agreements) • What measures did the Π take to ensure that idea or information remains secret? o Π should take reasonable precautions o Π should anticipate the ways others might get the info and guard against it o Π not required to take unreasonably expensive precautions (Dupont) • How valuable is the idea or information to the Π and its competitors? o Value must be commercial in nature ($) o Cant be spiritually or religiously valuable • How much effort or money has the Π expended in developing or acquiring the idea or information? o The greater the investment, the more likely to be valuable o The more valuable, the more likely protection is justified • How difficult would it be for other properly to acquire or duplicate the idea or information? o Is the formula published in the library or on the internet? o Could formula be easily ascertained through reverse engineering? When acquisition, disclosure or use of a trade secret is actionable> Misappropriation 1. Disclosure or use of a trade secret in breach of confidence 2. Disclosure or use of a trade secret learned from a third party 3. Disclosure or use of a trade secret by a mistake with notice 4. Continued disclosure or use of a trade secret after receipt of notice that it is a trade secret and was acquired through another’s breach of duty 5. Continued disclosure or use of a trade secret after receipt of notice that it is a trade secret and was acquired by mistake 6. Disclosure or use of a trade secret acquired through improper means a. Illegal conduct b. Conduct below generally accepted standards of commercial morality (Dupont) 7. Disclosure or use of a trade secret with notice that the provider acquired it through improper means 8. ’s modification of Π’s trade secret Georgia Trade Secrets Act: Misappropriation • Acquisition by a person who knows or has reason to know the TS was acquired by improper means • Disclosure/use of a TS (w/o consent) by a person who: • Used improper means to acquire TS; or • At the time of disclosure or use, knew/had reason to know that knowledge of the TS was: Derived from or through a person who had utilized improper means to acquire it; Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or Before a material change of position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake. Remedies for Misappropriation • Threatened or actual misappropriation can be enjoined • Damages available for actual misappropriation • Criminal penalties available under EEA (enhanced if to benefit a foreign country) • Clear intent and/or knowledge requirement under EEA (criminal liability for attempt!) • Knew or had reason to know under R3d and USTA, but enhanced damages if willful Remedies for Misappropriation (cont.) 1. Injunctions a. Duration limited to life of TS b. Unlimited duration 2. Damages a. Π’s lost profit as a result of ’s misappropriation, or b. Reasonable royalty for ’s use of TS c. ’s profits as a result of using the TS 3. Criminal Prosecutions a. Economic Espionage Act 1996 (Federal) p.59 Supp. b. Some states have enacted specific statutes TS Hypo Ms. Arnold drops out of law school and gets a temp job (in Atlanta) with Acme Insurance company in human resources. Becomes disgruntled, does not think company is being fair to its policyholders and wants to see some changes. Makes a few enemies and gets a pink slip. But, before she leaves, she surreptitiously gains access to some sensitive financial information in the accounting department. Copies it onto a disk, takes it home and writes a threatening letter to the president of the company saying that if the company does not divulge certain information to policyholders, she will, and more. General counsel calls you in. --HYPO ANSWERS Any trade secrets? Financial information Any cause of action under GTSA? EEA? • Yes under GTSA (acquisition by improper means) • Not sure under EEA (no intent to convert to benefit of someone other than the owner) • BUT, if doing it for the benefit of policyholders (even if no personal benefit) may still be liable under EEA. Any remedies? • Injunction, damages, maybe criminal penalties under EEA. Rockwell Graphic Sys. v. DEV p.49 (reasonable efforts to keep secret) • Suit for TS misappropriation. P makes printing presses, sued competitor and its president , P’s former employee, for misappropriation of TS’s in the form of “piece part drawings” used in the manufacture of replacement parts for the presses. What is main issue in case? • Whether P takes sufficiently reasonable security measures for the drawings to qualify as TS’s. What were D’s arguments? • Got drawings from customers (but customers only get assembly drawings) • Did not require vendors to return drawings • Did not segregate and treat differently PPDs and ADs What did P argue showed reasonable security? • Limited access to drawings • Required ID • Must sign agreement not to disseminate • Must sign drawing out and return • Must destroy copies made • Considers the ethical standards of a shop before making it a vendor What did court hold? • Giving TS’s to limited number of outsiders for a particular purpose did not itself forfeit protection. Such disclosure necessary to exploitation of TS (balancing of costs and benefits). • Talks about two emphases of TS protection: • deter efforts that are solely aimed at redistributing wealth from one firm to another. • Desirability of encouraging inventive activity by protecting its fruits from misappropriation. Disclosure of Trade Secrets (p. 62) • Publication • Selling product embodying the TS • By 3rd Party (independent development or theft) • Inadvertent disclosure (loss depends on degree of spread and carelessness) • Required by government DuPont v. Christopher p.66 (TS misappropriation: improper means) o What is the alleged trade secret at issue? Methanol production process. o Does it meet requirements? RS, competitive advantage? Cost to develop, value? Seems to. o So what is the issue? Did D use improper means to acquire it. o What were D’s arguments that means of acquisition were proper? Flying in public airspace, no breach of confidentiality no government standard violated, no fraudulent or illegal conduct. o How did court respond to D’s arguments? Held: aerial photography of plant was an improper means of obtaining the trade secret. Need to protect commercial morality. can’t get a “free ride” o What were D’s arguments that means of acquisition were proper? Flying in public airspace, no breach of confidentiality no government standard violated, no fraudulent or illegal conduct. Essex v. Southwire p. (TS subject matter: Inevitable disclosure) • McMichael develops new logistics system for Southwire, then leaves to become VP of Logistics for direct competitor, Essex. Southwire sues Essex and McMichael. • What is the alleged trade secret? o Southwire’s new logistics system in its entirety. • Has it actually been misappropriated? o Not really, but if McMichael heads logistics for Essex, disclosure is “inevitable.” • What is D’s argument? o Logistics system cannot be a TS because most of the components are already in the public domain. • What is P’s argument? o The system as a whole is a TS. • What does court hold? o Adopted broad reading of what could be a TS. Whole system was a TS, even though individual components were in the PD. ----Trade Secret Protection Summary If your information provides you with an economic advantage or value and you take reasonable measures to keep it secret, it is legally protected from actual or threatened misappropriation, indefinitely. Separate Inquiries: Secrecy (Is there a trade secret?) • Reasonable efforts • Value form being not readily ascertainable • Liability (Is there misappropriation?) • Proper or improper means • If proper means, may not be liable, but may still be a TS (as to the rest of the world) if not made readily ascertainable Proper Means of Acquiring a Trade Secret Proper means include: • Independent invention • Reverse engineering o Must be fair and honest acquisition of product • Observation of item in public use/display • Obtaining from published sources Smith v. Dravo p.71 (Confidential Relationship: Implied) D displayed interest in purchasing P’s business, P’s agent shared confidential info (w/o agreement), D did not buy, but built own shipping containers that made P’s obsolete. No written or oral Confidentiality agreement but ct. implied confidential relationship from purpose of disclosure. Confidential Relationship • Examples of confidential relationships: o Agent-principal o Employer-employee o Business partners o Joint Venturers o Fiduciary relationship (e.g. attorney-client) Elements of confidential relationship o Express promise or o Disclosure of TS under circumstances in which Relationship of the parties or Other facts surrounding the disclosure justify the conclusion that at time of disclosure Person knew/had reason to know confidence intended o Disclosing party was reasonable in inferring person consented to obligation of confidentiality -------Chicago Lock v. Fanberg p.78 (Reverse Engineering) Lock Company sued Locksmith for publishing list of lock codes reverse engineered from customer’s locks. Claim of TS misappropriation by improper means. Ct found no duty running from locksmiths to company so no improper means. ---Hypo P throws away confidential documents (in sealed bags) in dumpster. D goes through P’s dumpster and gets the documents. Misappropriation? ---Departing Employees Countervailing policies: • Protect business from unfair competition from misappropriation of trade secrets • Permit people to pursue livelihood /occupation for which best suited Types of Agreements (Employer/Employee) Confidentiality Agreements • Invention Assignment Agreements • Non-Compete Agreements o Must be reasonable as to (among other things) Geography Duration Scope Wexler v. Greenberg p.97 (Departing Employees) D left P and went to new company which then started making same products P made. Ct said no misappropriation, no TS owned by P, no legal basis for liability (no agreement). Less likely to get that result today. Common Law Obligation to Assign Inventions ---Rule In absence of an agreement: • Hired to invent – Employer owns • Uses Employer’s resources to invent – Employer gets shop right • Independent invention – Employer has no rights Warner Lambert v. Reynolds p.108 (Agreements to Keep Secret) P licensed secret formula for Listerine, agreed to pay royalties for making or selling product. Formula is no longer secret and P wants to stop making royalty payments. Warner Lambert v. Reynolds Issue: Do you have to pay for use of a secret, even after it is no longer a secret? Court says yes, based on agreement. Obligation to pay lasts as long as P makes or sells the product. K-2 Ski Co. v. Head Ski Co. p.113 (Remedies) Employee left P to work for competitor (w/bonus for production of new skis). D used P’s TS’s, P sued, granted a two-year injunction for one TS, a one-year injunction for a second TS. K-2 Ski Co. v. Head Ski Co. What is basis for duration of D. Ct injunctions? Time it would have taken D to reverse engineer or independently develop trade secret. What is issue in case: Propriety of the permanent injunctions after the 27-month preliminary injunction. Was D properly deprived of benefit of TS misappropriation is question for remand. Uncle B’s Bakery v. O’Rourke (Remedies) D, former bagel bakery plant manager for P, is seeking modification of prelim. injunction, wants to accept job with new company. What was nature of injunction? Prohibited direct and indirect competition, 500 mile radius, indefinitely (trial set for 11 months) enforcing noncommpet agreement What was impact on O’Rourke? No job in 5 months, lost one offer, and potential others, extreme financial hardship on family Choices for decision: 1. Vacate injunction 2. Modify injunction to allow him to take new job 3. Clarification of terms of injunction 4. Expedited procedure for review of offers Answer to choices: 1. No, still threat of irreparable harm to P 2. No, new employer is competitor, D’s hardship does not outweigh P’s need 3. Yes 4. Yes Why Share (Give Up) Secrets? • Share R&D expenditures • Combine diverse capabilities/knowledge on complex projects • Environmental technology research partnerships successful examples of both PATENTS Patent Features -What is a patent? • -paper document • -property right granted by federal government (USPTO) Nature of the property right? • Negative right to exclude others from making, using, selling, or offering to sell invention; • Not an affirmative right to practice (exception: compulsory licensing) -Utility Patent • Gives owner a monopoly in an invention for a limited term. Patent are only available for inventions that are non-obvious, novel, and are fully disclosed. • If the PTO grants a patent, there is a presumption that the invention meets these criteria, but a patent may be challenged in court, either through a declaratory judgment action or as a defense in an infringement suit. • -Many reasons why patent cannot be practiced by owner: • Illegality (e.g., ban on human cloning) • Blocked or dominated (e.g., patent on method of using compound dominated by patent on compound) • Economics Nature of the property right cont. -Territorial: must obtain patent in every country (region) where protection is desired -Personal property: can be bought, sold, licensed, bequeathed, etc. Time limited right (why temporary?) • Constitution: Article 1, Sec. 8, cl. 8 “limited times” (framers fear of perpetual monopolies) • Modern: balance need to stimulate innovation vs. free access to public domain and free competition • “Congress shall have power to . . . Promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” ----Patentability Requirements -Utility Patents: 35 U.S.C. § 101-103, 112 • Type (machine, composition of matter, article of manufacture, process) • Utility – useful, functional • Novelty –new, not before known • Nonobviousness –to person of ordinary skill in the art • Description, enablement, best mode • Not patentable: laws of nature, abstract ideas, natural phenomena -“Congress intended statutory subject matter to include ‘anything under the sun that is made by man.’” (Diamond v. Diehr USSC 1981). -Parke Davis v. Mulford What’s in a Patent? • A detailed technical description of the invention • The extent to which the disclosed invention is regarded as proprietary • Basis for PTO examiner’s decision that invention is novel and non-obvious over previously known technology • Term of the patent • Someone who can be contacted for info on licensing the patent -Intellectual Property Protection Rationales (1)Natural law/“justice” theories: • Locke: Mixing your labor with pre-existing tangible goods gives you a property right in those goods. • Problem with applying to patents: confers a right to exclude others from using those ideas on other goods, ever. • Locke: Relies on labor as justification for property. • Problem with applying to patents: “Sweat of the brow” not recognized as basis for patent protection. • Lockean proviso: person can take as much from the commons as he/she can put to use as long as “enough and as good be left” for others • Problem: Assumes a world without scarcity. Also “engrossment” does not account for modern capital markets. (2)Economic Theories • Monopoly-profit-incentive thesis (Main) • We will not have adequate industrial progress unless inventors can expect profits that will justify the investment risk. • Problems: -Balance: What is the “right” level and kind of innovation? How much of an exclusive right is needed to reach this level? -Is patent system necessary to innovation? -(3)Exchange-for-secrets Theory • Patent as a “social contract,” quid pro quo • In absence of protection from imitation, inventors will maintain inventions in secret; Society offers inventors a monopoly-type position in exchange for disclosure. • Still a very popular theory • Problems: o Even if secret, invention is often independently made by others o Inventions patented are often ones for which secrecy would be very difficult to maintain (e.g. pharmaceuticals, chemicals, machines, packages) Players in the Patent System • PTO • BPAI (Board of Patent Appeals and Interferences) • Federal District Courts • CAFC (U.S. Court of Appeals for the Federal Circuit) and regional circuits (again!) • USSC Diamond v. Chakrabarty p.138 (subject matter of Patent) • “man-made” oil-eating bacteria. • What is issue? o Is the bacteria itself patentable? • USSC rationales: o Congress has already spoken:” anything under the sun made by man.” Statute is broad to cover unanticipated inventions • Court o Yes, is patentable subject matter o Key is human intervention, not living or non-living Parke Davis v. Mulford p.147 (subject matter of Patent) • Purified adrenaline taken from animal glands. • Is this not an unpatentable product of nature? • Court: o Yes, patentable o A “new thing” commercially and therapeutically • Why different result in Tungsten case (note 2, p. 148) • Should they get a product by process patent o Can get a product patent, but o Product by process better b/c then others can have access to the chemical; better for innovation and better for healthcare (morality) -Utility Requirement An invention will be “useful” if there is a current, significant, beneficial use for the invention or, in the case of a process, the product of the process. An invention may be denied a patent for lack of usefulness if it fails to operate a claimed in the application. -Brenner v. Manson p.157 (Utility) • Steroid compound, but not sure what its good for • What is statutory basis of rejection? o No showing of utility, no mention of utility in original filing • Utility: o Normally low threshold, some useful purpose • Court: o Must show utility at the time of filing o PTO Guidelines: must assert a specific, substantial, and credible utility o Can’t get a patent too early b/c would discourage others to continue the research that will really show what its good for • Brenner widely criticized, held to its precise facts (no utility shown at all), but still good law -Utility Three Types: 1. General -some useful purpose 2. Specific -works for its intended purpose 3. Beneficial/Moral – public interest concerns -The Morality Inquiry Historical – U.S. • Morality inquiry as part of utility requirement: “All that the law requires is that the invention should not be frivolous or injurious to the well-being, good policy, or sound morals of society. The word ‘useful’ therefore, is incorporated into the act in contradistinction to mischievous or immoral.” (Lowell v. Lewis, J. Story, 1817) • Reasoning used to deny patents on gambling machines, deceptive/fraudulent devices, perpetual motion machines, etc. Current – U.S. • “Congress never intended that the patent laws should displace the police powers of the States, . . . Those powers by which the health, good order, peace and general welfare of the community are promoted. (Juicy Whip v. Orange Bang, 1999) • But see 35 USC 287(c) (surgical methods exception) p. 150 Morally problematic patent subject matter (some examples): • Transgenic animals • Human stem cells (requiring destruction of human embryos) • Chimeras (theoretical mixed human/animal species) • Methods of cloning humans and cloned humans (“ownership” of humans) • Chimera application on “humouse” creature with human and animal cells spread throughout its body. PTO has rejected application for several years (13th Amendment/slavery basis) but appears to be out of arguments and ready to let a court decide. May provoke legislation/court decisions. -Novelty: 102(a) Subsection 102(a): Patent must be denied if • The applicant’s invention was known by others in the U.S. before the applicant’s o Reduced to practice (actively or constructively), o Or otherwise described in a writing sufficiently for enablement o And, accessible to the public • The applicant’s invention was used by others in the U.S. before the applicant invented it o Reduced to practice o Used in a manner for which it was intended by its inventor o Accessible to the public • The applicant’s invention was described in a printed publication in the U.S. or a foreign country before the applicant invented it o Must be “printed” o There must be a “publication” o Publication must be sufficient in detail for enablement o Standard: if an interested American excising reasonable diligence would have found this information • The applicant’s invention was patented in the U.S. or a foreign country before the applicant invented it o The applicant subject matter was the actual subject of the prior patent monopoly o The patent effectively granted rights before the applicant invented his thing o The patent disclosure was available to the public before the applicant invented his thing Rosaire v. National Lead p.169 (Novelty) • “Novel” methods of prospecting for oil. • Which statutory provision is at issue? o 102(a): Novelty • Why did the PTO examiner not turn up this reference? o b/c apps are done in secrecy, so don’t know if there is other prior art • How can Teplitz work be public knowledge or use of the invention? o Pubic use means not secret • Would it matter if Teplitz had abandoned the project? o Prior are has to be enabling, so if not enabling, then not a bar to applicant’s patent -Section 102(b) o Viewed as a sort of a statute of limitations o Patent will be denied if more than one year prior to the date of the application was filed o The invention was in public use in the U.S. o The invention was on sale in the U.S. o The invention was described in a printed publication anywhere in the world o The invention was patented anywhere in the world -Policies Underlying 102(b) • Preservation of the public domain (public reliance) • prompt disclosure of new inventions to the public • Avoid extension of monopoly (inventor sales) • Allow inventor time to determine if invention worth patenting • Baxter v. Cobe Labs. (CAFC 1985) -In re Hall p.175 (Printed publication) • Single copy of a doctoral dissertation indexed and catalogued in a library on the edge of the Black Forest in Germany. Is it invalidating prior art? o Yes, publication in Germany o R: applies to publications anywhere • Are “printed publications” limited to paper documents? o No, can be microfiche, disk, videotape, printout • What is the key determinant for a printed publication? o Anything that’s data stored • Why is public accessibility different for publications and patents vs. for public use or sale in 102(b)? o Policies Underlying 102(b) Preservation of the public domain (public reliance) Prompt disclosure of new inventions to the public Avoid extension of monopoly (inventor sales) Allow inventor time to determine if invention worth patenting -Egbert v. Lippmann p.178 (Statutory bar) • Is wearing underwear under clothes, in public, a public use? o Yes, it can be under 102(b). • What current statutory provision does this case involve? o 102(b) • What evidence provided the basis for the defendant’s argument of patent invalidity? o Now wife wearing the corset of the inventor • What are the elements of a public use identified by the court? o Inventor gave to woman for use, never asked to keep secret, showed others -When is an Invention “On Sale” for Purposes of 102(b)? p. 183 Pfaff v. Wells: • Subject of a commercial offer for sale, AND • Ready for patenting (can show by proof of) o Reduction to practice before critical date o An enabling disclosure (e.g. drawings of invention) Intellectual Property September 23, 2002 35 U.S.C. 102: Novelty and statutory bars Novelty: Anticipation by Prior Art • Every element of the claimed invention must be found in the prior art reference • Reference must be enabling to one of ordinary skill in the art • Each claim of the patent is considered separately • Knowledge or use by “others” is public if it is not secret (accessible to the public, even if not accessed). Problem 3-7 (p. 177) Is the patent anticipated by Algol’s prior “publication?” If so, under 102(a) or 102(b)? Statutory Bars:35 USC 102(b) public use or "on sale" in the United States Need not be “by others” patented or described in a printed publication--anywhere If the application filing occurs more than one year after any of these events, patent will be barred under 102(b)--regardless of the date of invention. --Definitions • Conception: o Formation in the mind of the inventor of a definite idea of a complete and operative invention as it is thereafter reduced to practice. • Reduction to Practice (RTP): Two kinds: o Actual RTP – Construction of a physical embodiment that works for its intended purpose o Constructive RTP – Filing an application in the USPTO that complies with 35 USC 112,p1 -o Diligence: Continuous activity toward RTP, includes reasonable excuses for inactivity. (We don’t care about diligence unless Bob was first to conceive and last to RTP) --City of Elizabeth v. American Nicholson Pavement Co. p.185 o Wooden pavement on the street o Under the facts of the case, is “use” of the invention on a public street for many years an invalidating “public use” of the invention under the statute? 102(b) issue o What reasoning supports the court’s holding? o Not a public use b/c hadn’t RTP • If use is experimental then it will not “count” as a bar to patent issuance, even if use occurred more than one year prior to filing of application. • But, No experimental use after an actual RTP. --Experimental Use Negation o If use is experimental then it will not “count” as a bar to patent issuance, even if use occurred more than one year prior to filing of application. o b/c not considered reduced to practice; was perfecting the invention; had to test the road out on a street to see if it would work o No experimental use after an actual RTP. --Section 102(g): o Prohibits Y from obtaining a patent if X made the same invention in the U.S. before Y did and, o X didn’t abandon, suppress, or conceal the invention -Griffith v. Kanamaru p. • Interference action • Priority of invention under 35 USC 102(g) (remember to look at words of statute) • Griffin was first to conceive but last to RTP so must show diligence • What were P’s reasons for inactivity? o Waited for outside funding o Waiting for student to matriculate to help him with the project • Why did court reject those reasons as diligence? o Not extenuating circumstances to excuse inactivity o This is a very high standard; hard to prove that you were diligent • What are examples of excusable inactivity? o sickness • Diligence is high bar, acceptable excuses few, entire period must be accounted for • If A is first to conceive but last to RTP, must show diligence from before B’s conception to A’s later RTP. o However only filing in the US PTO will serve as constructive RTP if is never actually RTP in another country. -Section 103: Non-Obvious An invention is not patentable if, at the time it was made, it would have been obvious to a person having ordinary skill in the pertinent art -Steps in the Non-Obviousness inquiry (Graham) 1. Determine the scope and content of the prior art, 2. ascertain the differences between the prior art (analogous art) and the claims at issue, 3. identify the level of ordinary skill in the pertinent art, 4. Utilize “secondary considerations -Secondary Considerations Fourth factor to be considered (not determinative), nexus with claimed invention required: • Commercial success • Failure of others • Unexpected results • Long felt but unmet need • Commercial Acquiescence o Copying o Licensing -Priority Disputes: Non-obviousness • 103 --is the invention “new enough” to warrant the “embarrassment of an exclusive patent?” • Do we need the lure of the monopoly to get this invention into the public (U.S.) storehouse of knowledge? • then answer the question: would a person of ordinary skill in the art find the claimed invention obvious? --Graham v. Deere p.195 • Seminal case on non-obviousness inquiry. • Set out steps in the non-obvious inquiry • 103 --is the invention “new enough” to warrant the “embarrassment of an exclusive patent?” • Do we need the lure of the monopoly to get this invention into the public (U.S.) storehouse of knowledge? • What is nature of invention at issue? • What “prior art” is presented against the ‘798 patent and why is it considered “prior art” under 103? o The 811 Patent. Prior use devices. The 811 patent is probably prior art under 102 B. -In re Vaeck p. • F: Expression of one gene in a bacteria does not render obvious the expression of another gene • What is the nature of the invention at issue? • What requirements must be met for references to be combined in a non-obviousness inquiry? o Whether prior art would have suggested to POOSA they should make the invention by combining elements found in prior art o Whether prior art would have revealed the POOSA would a reasonable expectation of success • Is Vaeck fundamentally inconsistent with Graham? o Probably b/c it prior art would not have suggested gene2 by the invention of gene1 • Steps (Graham) o Step 1: Scope and Content of Prior Art o STEP 2: ascertain the differences b/t the prior art and the claimed invention o STEP 3: resolve the level of ordinary skill in the pertinent art -Problem 3-9: Step 1: Scope and Content of Prior Art Step 2: ascertain the differences b/t the prior art and the claimed invention Step 3: resolve the level of ordinary skill in the pertinent art Step 5: Combine prior art references Need suggestion to combine can be implied “Teaching away” helps to show non-obviousness Section 112: Disclosure Requirement -Description and Enablement: 35 USC 112, p1: Two separate requirements. Inventor must: 1. Enable a person of ordinary skill and in the art (“POOSA”) to make and use invention without undue experimentation 2. Provide a written description showing inventor had possession of invention at time of filing 3. State Best Mode that the inventor contemplates for carrying out the invention as of the application filing date --Gentry Gallery v. Berkline p. • Sectional sofa with remote control • Patent infringement action. So why is written description at issue? o b/c it says that the remote control can only go in the middle • Why does Berkline not infringe the ‘244 patent? o b/c Berkline put the remote on the side • What purpose does written description requirement serve? What danger is it designed to guard against? o Limits the scope to what inventor actually created -Infringement Person may be liable: (1) for directly infringing a patent, (2) for inducing another to infringe a patent, (3) for contributory infringement, (4) for importing, selling, offering to sell, or suing a product made abroad through a process protected by a U.S. process patent or,(5) for manufacturing or selling certain components of a patented invention to be assembled abroad. -Infringement: • Claims are infringed (literally or under DOE), 35 USC 271 • Claims must be interpreted. Can use: o Intrinsic evidence Claim language Patent specification Prosecution history o Extrinsic evidence (cannot contradict intrinsic): evidence that is external to the patent and file history E.g. expert testimony, inventor testimony, technical treatises o Every element of claimed invention must be present in the accused device Larami v. Amron • Why is Larami bringing this action? o They are suing a corp that made similar water guns. • What one word in claim 1 of the ‘129 patent is key to Larami’s win? Why? o The key word is “THEREIN”. Therefore, Larami limited themselves to an inner chamber for holding water. Amron holds the water outside of the actual gun. • Court: o No literal infringement o Here one element is different therefore Larami will lose. • How could Amron have avoided this problem? o They could have less than all the Π’s claims, (all elements rule) Intellectual Property October 7, 2002 How to Determine Infringement -35 USC 271(a) making, using, selling, offering to sell the patented invention during the term of the patent How determined? • Construe claim (Job for Judge) • Read claim onto accused device and apply the “all elements rule” (job for jury) • “All elements rule”: every claim element must be present in accused device either literally or under DOE When determining infringement: • The first step is to look at the claim. • A defendant’s item can have more items than in the claim but if it has everything that is in the claim then it is a literal infringement of the first product Doctrine of Equivalents (DOE) • Expands patentee’s right to exclude • If accused device performs same function in substantially the same way to achieve substantially the same result, it infringes under DOE (or insubstantial difference) • DOE is to avoid fraud on patent, make exclusive right more meaningful, encourage people to get patents • Problem: DOE prevents certainty regarding scope of patent. • Limitation: Prosecution history estoppels (PHE), if you amend claim during application process, DOE may not apply (Festo) • Things to consider to see if something infringes by DOE o Whether of POOSA would have known that the differing elements were interchangeable at the of the infringement o Whether finding the ’s invention equivalent, and thus infringing, would give the patentee rights that he would not have been able to obtain initially in the PTO b/c that means that it is not substantially the same thing o How different is the invention from the prior art Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd. • Pro-patent decision appearing to balance fairness with certainty • Fairness: provide infringement liability for insubstantial changes • Certainty: DOE makes it difficult to ascertain where patent monopoly ends • Fed. Cir. held that by narrowing a claim to obtain a patent the patentee surrenders ALL equivalents to the amended claim element • Departure from Fed. Cir. and USSC precedent • Applied retroactively to patents prosecuted under different rule USSC held in Festo: o Is Prosecution History Estoppel (“PHE”) limited to prior art amendments? No, applies to all narrowing amendments made to secure a patent. o Is PHE a complete bar to DOE? No. Must look at what was surrendered and why. Burden on patentee to show: (1) equivalent unforeseeable, or (2) amendment bears no more than tangential relation to the equivalent, or (3) other reason why equivalent could not be described Post Festo • Situation for patentees: better than before USSC decision, but worse than before Fed. Cir. decision • Better off because DOE may apply even with an amendment in a few cases • Worse off because more types of amendments trigger PHE and new burden to prove amendment does not surrender a particular equivalent • Possibly more appeals of rejections • More expensive patents -Prosecution History Estoppel o The scope of the patent claims be interpreted in light of what happened in the application process at the PTO o If an applicant took a position with regard to the scope of coverage of claims, he will not be permitted in a later infringement action to take an inconsistent position Limitations on Infringement • Reverse DOE • Defense to literal infringement • Rarely raised, even more rarely successful • D literally infringes, but D’s invention is so far changed in principle as to excuse liability (to find out more, see discussion p. 284-287) • When a ’s device literally falls with in the language of the patent claims, but is so far changed in principle from the patented article that it performs the same function in a substantially different way, the Π’s claim for infringement may be defeated -Indirect Infringement • 271(b): Active Inducement of infringement o Liability for infringement if the actively knowingly solicited or assisted a third party in infringing a patent o must have taken some action o must know that direct infringement is likely to occur • 271(c): Contributory Infringement (applies with patented process or device) o when selling, offering to sell, or importing is liable for contributory infringement if He knows that the component that he sold was especially made for use in the patented invention and there is no other substantial uses The buyer uses the component to infringe directly o must know that buyer’s use is likely to infringe • (Both require direct infringement by someone) C.R. Bard, Inc. v. ACS p.291 o Method of using catheter in angioplasty o Why is this an action under 271(b)&(c), not 271(a)? o Not direct infringement b/c surgeon is exempt under R287(c) o What must Bard show to establish infringement under 271(c) against manufacturer? o Must constitute a material part of the patented process o Knew that catheter was especially for infringement patented process o Catheter not a staple article or commodity o Court ruled that not contributory infringement b/c there were other noninfringing uses o But, What facts are key to court’s determination that summary judgment is inappropriate? o Question of Fact for the jury to decide if 271(b) inducement to infringe o There were 3 ways to use the catheter, but only one way that would be an infringing use So the jury must decide which way it was used Experimental Use Exception • Key to infringement liability: Intent to commercially benefit as basis for liability • Recognized by later courts but rarely if ever applied because evidence of commercial activity/profit motive always exist • R: may make or use a patented invention without authorization if the purpose if only to satisfy curiosity or to amuse ones self as an intellectual exercise and has no commercial motivation Roche v. Bolar (CAFC 1984): generic drug manufacturers cannot begin testing for FDA approval until after patent expires. (Experimental Use Exception) • CAFC: On its face, 35 USC 271(a) prohibits ANY of “making, using or selling.” Any one act of the three is enough to create liability. A mere “use” which doesn’t result in a sale is still actionable: “Thus, the patentee does not need to have any evidence of damage or lost sales to bring an infringement action.” • “We hold the experimental use exception to be truly narrow, and we will not expand it under the present circumstances. Bolar’s argument that the experimental use rule deserves a broad construction is not justified. . . . Bolar’s intended ‘experimental’ use is solely for business reasons and not for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry.” • Holding: can’t begin FDA testing until after patent expires b/c there is a commercial motive • 35 USC 271(e)(1) enacted in response to Roche • the use of a patented invention solely for purposes reasonably related to gathering data to support a FDA application for generic versions of previously approved drugs (ANDA) is not patent infringement. • In exchange, Section 155 permits patent term extensions for some technologies which must consume part of their patent term in obtaining FDA approval. • However, 271(e)(2) says it is infringement to file an ANDA if the purpose is to engage in commercial manufacture etc. BEFORE the expiration of such patent. 271(e)(4) then says that the only remedy for such infringement, the infringement mentioned in 271(e)(2) is an injunction so there is no FDA approval until the patent expires, no damages (unless commercial activity). So the protection provided by 271 for patentees against generic manufacturers is the injunctive relief provided for in 271(e)(4). Inequitable Conduct o Patent is unenforceable when the proves that the patentee intentionally made a misrepresentation or withheld material information about the patentability of the invention during the patent prosecution process o Standard: Clear and convincing evidence o Test: Intent to deceive, Materiality of the info -Kingsdown Medical v. Hollister p.297 • Rule 56: Duty of disclosure an candor by patent applicant to the PTO o If violate duty, may be found to have inequitable conduct • What is the difference between a patent infringement defendant winning on a counterclaim of inequitable conduct, and winning on a counterclaim of patent claim invalidity (e.g. like in Gentry Gallery)? o Inequitable conduct: whole patent deemed invalid o Claim invalidity: only claim deemed invalid, not the whole patent • What elements must be shown for a finding of inequitable conduct? o Materiality of the information o Intent to deceive • Why is there no inequitable conduct in this case? o No inequitable conduct b/c no intent to deceive Π had mislead b/c of negligence/mistake; Gross negligence doesn’t even equal intent to deceive Defenses/Estoppels cont. • Patent Misuse: form of common law “unclean hands” defense. Based on Patentee’s actions in obtaining or licensing patent in violation of policy of patent or antitrust law. o Activities that are not considered patent misuse 271(d) 1. patent owner does something that a non-owner would be liable for under direct infringement 2. Let someone else do something via license that would be contributory infringement by a non-owner 3. seeks to enforce his patent 4. refuse to use or license his patent 5. Condition sale or license on the purchase of a separate product, unless patentee already has the market share • “Walker Process counterclaim” is an antitrust defense (Sherman 1 or 2, monopoly or attempt to monopolize) based on P attempting to enforce a patent procured through inequitable conduct • Price fixing: patentee setting the price at which a licensee can sell a patented product • Exhaustion of patent rights and the first sale doctrine: Essentially stands for the proposition that when a customer buys a product she can use it, resell it, etc., without restriction or infringing the rights of Pe who sold it , however, • P can license less than all uses of a patented article. Key is that P not enlarge scope of patent rights, get more than grant gives (e.g. time, scope) (Mallinckrodt). Motion Picture Patents Co. v. Universal Film Mfg. Co. p.303 • Buy our projector, must use or film • What behavior by the patentee was considered patent misuse by the court? o Tying the sale of the patented projector to the non-patented film • Is the decision still good law in light of 271(d)? o No, under 271(d), ok to tie patented product to unpatented product Remedies • 35 USC provides for both injunctive relief (283) for patent infringement and damages (284); damages shall be no less than reasonable royalty (if cannot prove lost profits) • Reasonable royalty: amt person would be willing to pay to make and sell patented article and still be able to make a reasonable profit. • If product not marked that it is patented, no damages until actual notice of infringement given (287) Polaroid v. Kodak p.326 o Injunction would injure Kodak; would have to layoff people o Kodak was infringer o Court: o Sorry but you were in the infringer, patent protects the patentee o Public policy: protects the patent owner o Public policy weighed against the infringer Damages • Panduit factors: 4-part test P must meet to get lost profits (many cts use but not exclusive test): o Demand for the patented product o Absence of acceptable non-infringing substitutes o Pe’s Manufacturing and Marketing capability to exploit the demand o Amount of the Profit he would have (can get lost profits but not the infringer’s profits except in a design patent action) • Called “DAMP” test for short • Enhanced damages (up to 3x) and attorney’s fees provided for in 35 USC 284 and 285 o May be enhanced if willful infringement, but enhancement is discretionary, egregiousness is key. Factors include: deliberate whether D in good faith investigated patent litigation behavior D’s size and $$ condition duration of misconduct remedial action by D International Patent Law No global patent Rules vary by country Frequently protectionist provisions (e.g. 35 USC 104) HH Robertson v. U.S Steel Deck -To consider when granting injunction o Π’s reasonable probability of success in litigation o irreparable injury to Π if injunction not granted o possibility of harm of other interested person in the grant or denial of injunction o pubic interest (of patentee Kodak) International Patent Law United States: • First to invent • 1 yr grace period (for 102(b) statutory bars) o if you offer to sell o printed publication o public use • No prior user rights • Previously • 17 yr term from issue • No pre-grant publ. Most countries • First to file • Absolute novelty • Prior user rights • 20 yrs from filing • 18 month pub. International Patent Law Key Treaties: • Paris Convention (procedural) 1883 o Right of priority: file app in home country, then have same fling date as come country, if filed within 12 months o National Treatment: same patent protection as a nation • Patent Cooperation Treaty (“PCT”)( procedural) 1970 o Simplifies multi-country filing, extends time to file o File in one county, Get additional 18 months to decide where else to file • Get benefit of the first filing date • TRIPS (substantive) from General Agreement in Tariffs and Trade (GATT) o Minimum protections required o Tied IP protection to trade o Have to provide patent protection in all areas of technology Design Patents • All you are claiming is how the article looks • Must be novel, non-obvious, ornamental • Protects ornamental appearance of an article of manufacture • Design cannot be dictated by function, i.e. primarily ornamental • Single claim, 14 yr term, ordinary observer/substantial similarity Plant Patents • Must be novel, nonobvious, asexually reproduced (for PPA) • Patent protection excludes others from o Asexually reproducing the plant o Selling or using the plant so reproduced, or any of its parts o Importing the plant or any of its parts • 3 types of protection: o Plant Patent (PPA) – only protects asexually reproducible plants o Plant Variety Protection Certificate (PVPA) – protects sexually reproducible plants (USDA administers) o Utility Patent – protects sexually and asexually reproducible plants (JEM) --J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Int’l, Inc. • H: Utility patent can be issued for plants • J.E.M. resold patented hybrid seed corn purchased from Pioneer • Pioneer: sued for patent infringement • J.E.M. counterclaimed: patents invalid, sexually reproducing plants not patentable subject matter under 35 U.S.C 101 Background: • 35 U.S.C. 101 “whoever invents . . . any new and useful process, machine, manufacture, or composition of matter . . . may obtain a patent therefor.” • Congress intended 101 to include “anything under the sun made by man.” (Diamond v. Chakrabarty 1980) • Congress provided specific protections for plants: plant patents (1930) for asexually reproducing plants, and plant variety protection certificates (1970) for sexually reproducing plants. Supreme Court Oct 2001: • Question: Are utility patents covering sexually reproducible plants invalid because the PPA and PVPA are the only sources of exclusive rights in plants? • Held: utility patents may be issued for plants. • For 16+ years, the U.S. Patent & Trademark Office (PTO) has granted utility patents on all kinds of plants. • Seed companies use the patents to prevent farmers from saving seed from one crop to use the next year and from selling surplus seeds. • Congress intended broad interpretation of 35 U.S.C. 101 “the relevant distinction [is] not between living and inanimate things, but between products of nature, whether living or not, and human-made inventions.” • No argument that plants do not meet utility patent requirements, just that the other more specific statutes are the exclusive forms of protection. • Plant Variety Protection Act (PVPA): No evidence Congress intended it’s protection for sexually reproduced plants to be exclusive. Easier to obtain coverage under PVPA than under Section 101 (e.g. must show utility and non-obviousness), also less protection provided (e.g. farmers can save seed, conduct research). • Congress has (impliedly) recognized availability of plant patents; has not passed legislation to stop PTO’s actions in past 16 years. • Plant Patent Act (PPA): No evidence Congress intended its protection for asexually reproduced plants to be exclusive. Coverage is more limited under PPA than for a utility patent, relaxed requirements. • State of plant breeding and patent law is different now than in 1930, asexual reproduction was primary method, Congress believed plants could not meet requirements of Section 101. Times have changed and Section 101 is a dynamic provision designed to encompass unforeseen inventions. • Dissent: Plants are neither “manufactures” nor “compositions of matter” under 101. Congress intended the more specific PPA and PVPA to exclude utility patent protection. • Impact: Benefits seed biotech companies; confirms virtually infinite scope of patentable subject matter. Intellectual Property October 16, 2002 COPYRIGHT ---October 16, 2002 ---Copyright (policy) • Purpose to stimulate creation of works • Give limited rights in owners works, but only for the end result of benefiting the public • Author’s interest secondary to public o When they conflict, courts usually put the interest of the public first Copyright (nature) • Property rights limited to the method of expressing an idea, not the idea itself Copyright Sources U.S. Constitution art. 1, sec. 8, cl. 8 “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries” 17 U.S.C. §101 et. seq. Copyrightable Subject Matter (Sec. 102(a)) Copyright protection subsists, . . . in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Subject Matter Requirements • Originality • Fixation Originality Two requirements: • Work must be original to the author (not copied/wholly derived) • Work must evidence a minimum level of creativity (low threshold). Fixation (Sec. 101) A work is fixed in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration. A work consisting of sounds, images, or both, that are being transmitted, is "fixed" for purposes of this title if a fixation of the work is being made simultaneously with its transmission. • The fixation requirement is viewed to come from the Constitution’s requirement of copyright protection for “writings.” • A work is not considered “fixed” unless it is the fixation was done be or under the authority of the author Problem 4-2 p. 368 Does Armstrong have a copyright in his performance? Does he have any legal basis for suing Fan? Copyrightable Subject Matter (Sec. 102(a)) -Not an exhaustive list (1) literary works; (2) musical works (including any accompanying words); (3) dramatic works (including any accompanying music); (4) pantomimes and choreographic works; (5) pictorial, graphic, and sculptural works; (6) motion pictures and other audiovisual works; (7) sound recordings; and (8) architectural works. ------Non-Copyrightable Subject Matter (Sec. 102(b)) • “In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.” • Titles, names, short phrases, and slogans; mere listings of ingredients or contents • Works that have not been fixed in a tangible medium of expression • Works consisting entirely of information that is common property and containing no original authorship • Works in the public domain • Fonts • History or other facts • Recipes • Scenes a faire • Processes, systems, methods of operations ------Feist Pubs. v. Rural Telephone (Copyrightable Subject Matter) Publisher of telephone white pages sues rival for copyright infringement Can a database of facts be protected by copyright? • Facts are not copyrightable • Copyright protection available for fact compilations only if originality in selection, coordination, or arrangement of material (17 USC sec. 101) • Since no originality in selection, coordination or arrangement of factual telephone listings, Rural’s book was not copyrightable ----Compilations and derivative works (Sec. 103) The subject matter of copyright as specified by section 102 includes compilations and derivative works . . . Compilations and derivative works cont. (Sec. 103) The copyright in a compilation or derivative work extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material. Compilation-(Sec. 101) • Definition: “a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship.” The term "compilation" includes collective works. • CR protection is only for the compilation author’s original expression o Selection, coordination, arrangement of pre-existing materials ---Problem 4-1, p. 363 Should Christopher be liable for copyright infringement? Baker v. Selden p.375 (Copyright Limitations: Idea vs. Expression) • Underlying system not copyrightable (perhaps patentable), only expression is protectable by copyright) • When the use of an idea requires the copying of the expression, the expression doesn’t have copyright protection in an infringement suit Idea/Expression Dichotomy o Copyright protects expression, not idea o Levels of Abstraction o At lower levels of abstraction, more things are likely to be protectable by copyright (except when you go really low, then no original expression) o At higher levels of abstraction, fewer things are protectable because getting closer to protecting a pure idea (takes too much from public domain) Morrissey v. Procter & Gamble p.382 (Copyright Limitations: Merger Doctrine) • Merger doctrine: When there is only one or only a very few ways of expressing an idea, then the idea behind the work merges with its expression and the work is not copyrightable • When subject matter allows little variation in expression, CR protection on ANY mode of expression would be the same as allowing CR protection on the idea itself. • How to determine if merger doctrine applies? o How many effective ways are there to express the idea? o Courts will not consider far-fetched ideas o Morrisey makes it hard to get CR protection for expressions that are very functional or utilitarian (e.g. instructions, rules) Problem 4-5, p. 385 Should Animal be liable for copyright infringement? Problem 4-6, p. 386 Does Harry have a valid copyright claim? ------Copyright Formalities Historically, compliance with these required to obtain copyright protection, now largely voluntary, do not affect validity of copyright • Notice • Publication • Registration • Deposit Notice • Notice is no longer required since 1989 (but has benefits) • Still relevant to status of works covered under 1909 and 1976 Acts (year of 1st pub., symbol, name of owner, right place) ---Publication • 1909 Act: Protection triggered by publication o Divestive: large number of copies required to divest of common law protection o Investive: small number required if claiming federal protection o Unauthorized distribution not publication • 1976 Act (1/1/78 – 3/1/89): Protection triggered by fixation o Publication determines when notice required (but not between types of protection) o Publication defined: physical transfer of copies to general public w/o restriction or to narrower group for distribution /dissemination o Expressly excludes public performance/display • Post Berne Ratification: Publication no longer a factor in validity, however still relevant to, among other things, deposit, works of foreign authors, term, library copying, termination of transfers, and damages. Registration • 1909 Act: registration voluntary but no renewal if not registered by 28th year, also prerequisite to suit • 1976 Act: registration voluntary but prima facie evidence of copyright validity, prerequisite to suit, statutory damages and attorneys fees available only for post registration infringement • Post Berne Ratification: Registration is voluntary, but must file for it before bringing infringement suit (domestic works) ---Deposit • 1909 Act: Deposit of two copies of work w/Library of Congress required, failure to comply could mean forfeiture • 1976 Act: deposit still mandatory but does not affect validity, just may mean a fine o Deposit w/Copyright office also required for registration (can be satisfied by Library deposit) --Brandir Int’l v. Cascade Pacific p.388 (Copyright Limitations: Useful Article Doctrine) P sued D for copying bicycle rack design and sued Register of Copyrights for failing to issue copyright registration. Why is rack not eligible for copyright protection? Useful Article “an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information.” Separability (from legislative history) To get CR protection the design of the useful article must have “some element that, physically or conceptually can be identified as separable from the utilitarian aspects of the article.” Useful Article Analysis: First decide if article is: 1. pictorial, sculptural or graphic works and 2. are useful articles. • (You don’t want to get to this doctrine if you don’t have to. ) • Artistic elements of work must be capable of being physically or conceptually separable from the utilitarian elements of the work -----Copyright vs. Design Patent -Design patent: • protection available if you can show that the design is not primarily functional (function can be achieved by other design techniques) and other requirements met. This is a possible way for the bike rack to be protected. If you can’t get CR through useful article then go to design patent. • Design Patents: protect ornamental designs of useful objects, protect way useful object looks (ex. Bumpers on a car) ---Copyright: • artistic elements must be physically or conceptually separable from the utilitarian aspects of the article ---Problems, p. 397 4-7: Are Mickey and Minnie Mouse telephones copyrightable? Yes because artistic element is separate from utilitarian aspects of article. 4-8: Is expensive belt buckle copyrightable? Yes because in brandir had he merely adopted one of the existing sculptures as a bike rack it would have been copyrightable. No physical separability. Arguably have conceptual separablility. Here it is a belt buckle therefore the commercialization should not forfeit its CR status. 4-9: Are human torso forms copyrightable such that copying them is infringement? There is a merger here of aesthetic and utilitarian elements. Therefore no copyright for Versace and human torso because used to hang clothes. Government Works • No copyright protection for works of U.S. government (prepared by officer or employee as part of duties) • However, U.S. government can hold copyrights transferred to it • Statute does not mention states but certain state works not copyrightable (e.g. statutes, court opinions), part of public domain Problem, p. 399 • 4-10: Must History Channel get license from federal government to air programs? Seems so since the copyright was assigned. What if no assignment clause? Probably have to get license from KPBS. What if federal government employee served as consultant to the television series? Problem, p. 405 • 4-12: Is Kurt’s series of moves protectable as a choreographic work? Seems as though it should not be because it seems like it is unrecorded dancing and not fixed in a tangible medium of expression. Doesn’t seem like a choreographic work and if another artist tried the move it would not exactly copy the Klutz. He would argue that it is not a conventional gesture or dance move and recorded therefore it must be protected since it was first done by him. Because there are not many ways to do the lutzes therefore the merger doctrine would make it not copyrightable. Sound Recordings (Section 101) • Definition: “works that result from the fixation of a series of musical, spoken, or other sounds, but not including the sounds accompanying a motion picture or other audiovisiual work, regardless of the nature of the material objects, such as disks, tapes, or other phonorecords, in which they are embodied.” • Protected as separate work from musical works (e.g. lyrics) since 1972 • No public performance right (there is for musical works) • No compulsory license for sound recordings, unlike for musical works Roth Greeting Cards v. United Card Co. p.409 (Greeting Cards as Copyrightable Subject Matter) • P sued D for infringing copyright of seven greeting cards; text used in cards was in public domain • If there is a copyright and it is the same then you are liable for copyright infringement. Here D had access to the original cards. The Ct. found that the text in conjunction with the artwork was copyrightable. Here the ct. is looking at it as a compilation. • The test of infringement is whether the work is recognizable by an ordinary observer as having been taken from the copyrighted source. • Who has the better argument, majority or dissent? o I like dissents argument because the majority is saying that the whole is substantially greater than the sum total of its parts. Problems, p. 412 4-13: Does West have a valid copyright in its pagination and arrangement of cases in its reporters? No it think that the fed ct. reporters are paged is similar to the phonebook argument. 4-14: Is Bond New’s data copyrightable? Probably not seems like “sweat of brow” copyright. Similar to white pages. If you want protection for an arrangement of facts (which themselves are not protectable) need to arrange them in a creative, original way. Smithkline Beecham v. Watson Pharmaceutic, Inc. (Domain and scope of copyright protection) • Law requiring that generic drugs use “same labeling” as original drug trumps copyright law • Policy: FDA label approval process very time-consuming, same labeling req. bypasses that • Labels created for administrative purpose, ancillary to FDA approval, not for creative purposes Casebook website (supplemental) CCNV v. Reid p.414 • Who owns copyright in sculpture? Reid owns the sculpture. How do you determine ownership? If a) In Community Created For Non-Violence v. Reid: court said that because there was no written instrument, must look to see if it was preparation by employee in scope of employment. b) Must focus on if artist was ‘ee or independent contractor(1) If employee: employer owns the copyright (2) If independent contractor, look to see if there was an express agreement to transfer the rights (§101(2)) (3) Factors to look at the hiring party’s right to control the manner and means by which the product is completed if other projects were assigned or only single piece look for evidence of continued employment look to who paid the taxes c) With WFH, the owner of the copyright rights does not have to worry about artist’s termination or moral rights • What is impact, on remand, if parties are considered joint authors? They each enjoy undivided ownership and may exercise independently the exclusive rights set out in section 106. Work for Hire • Author is normally owner unless work is for hire. • Two types: Work prepared by Employee within scope of employment a work specially ordered or commissioned for use as a contribution to collective work . . . If parties expressly agree in signed writing that it will be a work for hire. Simply because someone assigns a work does not mean it is work for hire. How to determine whether hired party is an Employee. • Consider hiring party’s right to control manner and means by which work is accomplished o Skill required o Source of tools o Location of work o Duration of parties relationship o Can hiring party assign additional projects o Who determines when and how long to work o Method of payment o Is work regular business of hiring party o Hired party’s role in hiring and paying assistants o Provision of employee benefits o Tax treatment of hired party o Is hiring party in business What is impact, on remand, if parties are considered joint authors? Joint Works • Each contribution must be separately copyrightable • Parties must intend contributions to be merged into parts of a unitary whole (sec. 101) • Undivided ownership rights (but must give an accounting) (sec. 201) • Contemporaneous collaboration/knowledge required Problems, p. 424 4-15: Who owns copyright in Smith’s work? Seems like smith owns the CR. Just looking at the factors it is not clear. Go through all of the factors to determine if it is under the scope of employment. You can make an argument that since he is an employee and ADCO pays him a salary and his taxes. He is using skills that he perfects at ADCO 4-16: Are parties joint authors? This is not a joint work because ct. did not see an intent that the contributions should be a joint effort. 4-17: Who owns copyrights in car’s songs and slogans? Sally signed an agreement that Up and running gets all of the ownership in the song. She has assigned the ownership. Telly talker is an employee of U&R under an employment K, seems like a work for hire therefore he does not own copyrights in car song. Gary guitar by cashing the check is an employee of U&R and forfeits any ownership rights he has once he cashes the check. This is probably an assignment of the copyright. NY Times v. Tasini p.413 (collective works) • Freelance authors sued publishers who included their articles, originally published in the publisher’s periodicals, in a database • Two separate copyrights, one in the individual work, one in the collective work • At issue: Sec. 201(c) of the copyright act, which limits the rights of publishers of collective works to reproduce the contribution • Ct said inclusion in database was not publisher’s right, needed permission from author Duration of Copyright • For works created on or after 1/1/78 o “regular” author: life of the author plus 70 years, it goes to the end of the calendar year. Always Dec 31st. • Works for hire, anonymous works, pseudonymous works: 120 years from creation or 95 years from publication (whichever expires first) Problem, p. 428 4-18: On what day does copyright expire for each scenario? a. Dec. 31st 2066. b. 95 yrs after publication. If creation date is given then 120 days after creation. Which even expires first. c. Life of the author plus 70 yrs. Just because a person assigns the work does not make it work for hire. The duration is based on the life of the author. So answer is Dec. 31st 2066. d. Eldred v. Ashcroft Is the 1998 Copyright Term Extension Act constitutional? Is there any limit in “for limited times”? Division, Transfer, and Termination of Rights • Division and Transfer of Rights: Copyright owner can transfer (assignment or exclusive license) exclusive rights in whole or in part (could not divide under the 1909 act) • Termination of Transfers: Authors can reclaim transferred exclusive rights in a work between the 35th and 40th year from execution of the grant (works created after 1977) ---Rights of Copyright Owners (Sec. 106) • Copyright owner has the exclusive right to (with certain limitations): o Reproduce work in copies or phonorecords, o produce derivative works, o distribute copies, o perform the work publicly (for certain types of works), o display the work publicly (for certain types of works) Arnstein v. Porter p.434 (Right of Reproduction: copying) • What two types of “copying” must P show to establish copyright infringement? What is the difference between the two? How can experts be used in such cases? • Three things needed to establish infringement: • Ownership of valid copyright • Copying in fact • Improper appropriation Nichols v. Universal Pictures Corp. p.442 (Improper Appropriation) • If you find infringement here, what are you saying is copyrightable? An idea or the expression of the idea? (Right of Reproduction: Improper Appropriation) • Ct considers key issue to be the shared qualities held in common by the two works. If these qualities are numerous and specific, they can be said to share expression. If they are few and more general, they can be said to share only a common idea. Steinberg v. Columbia Pictures p.449 (Improper Appropriation) • Does the movie poster infringe the magazine poster? How broad is P’s copyright if we find infringement? How narrow is it if we do not? (Right of Reproduction: Improper Appropriation) • Determining improper appropriation is fuzzy, amorphous, no one standard test. Approaches used include (in eyes of ordinary observer): o Fragmented literal similarity o Comprehensive non-literal similarity o Qualitative and quantitative appropriation o Subtractive (pull out non-protectable matter) Ownership of Copyright Distinguish “author” from “owner”: • Author may be individual(s) or entity (work for hire only) • Owner may be author (either kind) or assignee • Relevant to duration of copyright and termination of rights Problems, p. 457 4-21: How would the analysis of copyright infringement (Dinopets v. Gigatoys) be conducted? What result? 4-22: Have the stunted intellectuals infringed the copyright on any of the songs they sample? 4-23: Has Hamilton infringed Salinger’s copyright in his letters? Midway Mfg. v. Artic Int’l p.464 (Right to prepare derivative works) How do you determine if a work is a derivative work, according to this court? • Ct focuses on possibility of extra revenue for copyright owner, creative effort required to produce game, to conclude speeded-up version is a derivative work • Bottom line: If you are going to make a derivative work, get permission first. Derivative Works • Definition (Section 103): “a work based on one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgement, condensation, or any other form in which a work may be recast, transformed or adopted.” • Features: o Work based on one or more existing works. o Must be different enough from original to me regarded as a new work (minor changes not sufficient) o New material must be original and CR in itself. o Often creates a new market for the preexisting work. o The CR only covers the additions, does not extend to the originals. ---Litchfield v. Spielberg (Right to prepare derivative works) • Why is “E.T.” not a derivative work based on “Lokey from Maldomar?” o B/c wasn’t a similar enough to “Lokey” Derivative Works • Work is not a derivative unless it has been substantially “copied” [not necessarily literally] from the prior work • “a work will be considered a derivative work only if it would be considered an infringing work if the material which it has derived from a prior work had been taken without the consent of a copyright [owner] of such prior work.” • So to prove infringement of a derivative work, one must also show substantial similarity Problem 4-25, p. 470 What rights do the photo owner and World Enquirer have in the resulting (merged) image? Quality King Dist. v. L’anza Res. Int’l p.471 (Distribution right-First Sale Doctrine) • Is 3rd party sale of U.S. made shampoo a violation of P’s exclusive distribution right? • Why or why not? • No violation of Π’s exclusive distribution right b/c first sale doctrine ---Copyright Law: Owner’s Rights, Defenses, International Issues, Remedies Problem 4-25, p. 470 What rights do the photo owner and World Enquirer have in the resulting (merged) image? Reproduction right. Mirage Editions v. Albuquerque A.R.T. (Distribution right vs. Derivative Right) • Is this case about the violation of the distribution right or some other exclusive right? • Photos from a purchased CR’ed book were cutout and placed on tiles which were then resold. Court ruled gluing pics on ceramic tile created a derivative work with a new market, thus infringement. • The author’s rights had not been exhausted by the sale • Here there was a derivative work. -Problem 4-26, p. 477 Under what theory might Lee or the bookstore be liable for copyright infringement? It can be argued that Lee may be liable under derivative works, there should not be liable because the students are not buying it for Lee’s notes. It does not create any new value. The first sale doctrine should apply for the bookstore therefore no infringement by them either. Public Performance & Display Rights • Right extends only to “public” performances/displays • “If it moves it’s a performance, if it stands still, it’s a display” • No public display rights in architectural works, public performance rights in sound recordings limited to digital audio transmissions Public Interest Exceptions • Sec. 110 contains exceptions for, among other things: o Performances in the course of face to face teaching activities of non-profit educational institutions o Performances at a place of worship in the course of a service o Performances without admission charge where proceeds after costs go to charitable purposes. Compulsory Licenses • Several types: o Television broadcast relays o Satellite transmissions to unserved households o Recordings of previously recorded musical works o Jukeboxes o Public broadcasting stations o Digital sound recordings (web stations) o Do not cover public performances (need to get permission form owner, often via collective rights organization, e.g. ASCAP. Moral Rights o Protected in cont. Europe; not adopted in US but creeping in Protects “personality” of the author o Right of attribution: ensures the author’s right to be known as the author of the work, and that no one else can claim authorship o Right of integrity: ensures the author’s right to prevent others from distorting, mutilating, or misrepresenting his work New Statutory Restrictions • Audio Home Recording Act: o restrictions , compensation scheme, exceptions for non-commercial home taping • Digital Millenium Copyright Act: o Prohibits circumvention of copy protection systems o Addresses online service provider liability o Very far-reaching and controversial o Beyond scope of this course Problem 4-27, p. 482 Is Ralston’s in room video rental service an infringement of the producer’s public performance right? It seems that a hotel room is not a public place because one it is rented it is no longer public. However if more than one person could see it then they would have to have licenses to view all of them. (See Columbia v. Redhorne) Sheldon v. Metro Goldwyn Pict. p.550 (Remedies) • Which 106 exclusive right is infringed here? • Should an award of D’s profits be tied to the amount P’s work contributed to D’s achieving those profits? • Π just must show gross profits • must show that the amount that is attributed to Π’s work so that it can be deducted from gross profits o Burden of Proof on • Just as patent law, we have a property rule and a liability rule. o (Injunctions and Damages available) • b/c CR damages can be hard to calculate, provision for statutory damages (a benefit if you register quickly) • Have to register before bring suit Defenses – A. Fair Use Doctrine (Defenses) 1. Allows copying when it is fair a) based on common sense, basic ethics, reasonable expectations, and public policy. b) The words “flexibility” and “interrelatedness” best summarize FUD. c) It is an affirmative defense-D uses FU to support what he is doing 2. §107 is the statute that contains Fair Use a) It is a codification of judge made rules b) Notwithstanding “the provisions in §106 and §106(a) (granting exclusive rights to reproduce, distribute, make derivative works, etc.) the fair use of a copyrighted work for purposes such as criticism, comment, news reporting, teaching, scholarship, or research” is not infringement.looks to 4 factors below, 3. Purposes of Fair Use a) Courts found equitable solutions to unsatisfactory legal outcomes that otherwise would have resulted from strict, by-the-numbers copyright infringement. c) Fair use has been applied to permit a greater copying and use of copyrighted works for classroom purposes. d) Copying and use of a copyrighted work for news reporting is more favored than other types of use. 4. Four Factor With Fair Use (the importance of each factor depends on the facts of each case) a) Purpose and Character of the Use (Is the work commercial or educational?) (1) Commercial (2) Non-Profit • Transformative Use: instead of making just a copy, you create something new. This is what Luke did with Pretty woman. • News reporting is favored b) Nature of the Copyrighted Work (Is the work creative or informational.) (1) Fiction (2) Nonfiction • A work of fiction is entitled to fair use less than non-fiction c) Amount and Substantiality of the Portion Used In Relation to the Copyrighted Work as a Whole (1) Quantitative-how much of the work has been taken as compared with the whole? (2) Qualitative-whether the heart of the work was taken. d) Effect of the Use Upon Potential Market for the Copyrighted Work This is the most important factor (1) If others are allowed to do this, does it harm the copyright owner? (2) Look at speculative damages (1) CBS v. MLK: CBS used parts of MLK’s “I have a Dream” Speech in a T.V. show. • When CBS originally disseminated the speech on the nightly news it was definitely fair use because it was news. Now it is purely being used to make a profit (commercial) so it is doubtful that this is fair use. -(2) Harper & Row Case: H & R sold rights to publication to Time magazine of Ford’s memoirs. D got an advanced copy and published it first. • This was deemed an infringement because D took the heart of the work • D failed to meet four factors • Court refused to reject an idea of public figure exception to copyright. -(3) Sony v. Universal: does D’s sale of copying equipment to the public violate P’s rights under the copyright Act? • Ct. said copying of 100% of P’s work by public was okay because it was not a commercial use, just for home viewing. -(4) Campbell v. Acuff-Rose: D used P’s song in a rap song. • Supreme court said fair use because it was a parody on country music. • It was seen as productive/transformative use that does not affect the market. • Parody = no infringement. Beanie Baby case for Exam (292 F3d 512) Exclusive Rights & Duration • Copyright owner has the exclusive right to (with certain limitations): o Make copies, produce derivative works, distribute copies, perform the work publicly, and display the work publicly • Copyright protection lasts (currently) for the life of the author plus 70 years or 95 years from publication for works made for hire Fair Use of Copyrighted Works (Defense to CR) • It is not infringement to reproduce a work for, among other things, the purposes of criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research (17 U.S.C. sec. 107) Fair Use of Copyrighted Works • Fair use factors to consider in determining if the use is a fair use: 1. Purpose and character of the use (is it commercial or nonprofit educational) 2. Nature of the copyrighted work (is it factual or is it very creative) 3. Amount and substantiality of the portion used in relation to the copyrighted work as a whole, (if it is an important part of the thing used.) 4. The effect of the use upon the potential market for or value of the copyrighted work. Copyright Infringement & Remedies • Must register copyright prior to bringing suit (no examination) • Must show a valid copyright and substantial similarity of the works (to an ordinary observer) due to copying • Can get actual damages, infringer’s profits, and statutory damages (between $750 and $30,000; up to $150,000 for willful infringement) TRADEMARK ---Trademarks • Tort based theory: o Tort of misappropriation of consumer’s goodwill o Tort of deception-deceiving consumer • Purposes: Identify source of goods or services; protect goodwill of owner • Duration: Perpetual, as long as used in commerce • Subject matter: includes words, symbols, names, devices, used by a business to distinguish its goods from those of others • Federal law ® (and state ™) protection ---Trademark: Definition A word, name, symbol or device, or any combination thereof, which is used to identify and distinguish the goods of one person from goods manufactured or sold by others and to indicate the source of the goods, even it the source is unknown. --Service mark: Definition A word, name, symbol or device, or any combination thereof, which is used to identify and distinguish the services of one person from services sold by others and to indicate the source of the services, even it the source is unknown. To register the mark, the owner must prove that this is sufficiently separate from the sale of any goods. ---Trade Names To identify the company itself, cant get federal registration under Lanham Act but can get state registration ---Qualitex v. Jacobson Products p.568 (What can be a trademark) • Expanding scope of trademark subject matter: if a word, a sound, a shape, and a scent can all be trademarks, why not a color? • What is key requirement for all marks? • No theoretical objection to use of color alone as TM • What is required for color to be protected as a TM? • What special concerns arise when trademark protection is granted for a color? • Key requirement for all marks is source distinguishing ability, not status as, e.g., color, scent, sound, word • Color must have acquired secondary meaning, must identify and distinguish a particular brand, thus serving as an indication of source. • Must not be functional, i.e. essential to the use or purpose of the article/affect the cost or quality of the article “Where color [or any other symbol or device] serves a significant nontrademark function . . . courts will examine whether its use as a mark would permit one competitor . . . to interfere with legitimate . . . competition through actual or potential exclusive use of an important product ingredient.” (Qualitex) --Functionality Doctrine (precludes trademark) • When doing so will put a competitor at a disadvantage b/c feature is essential to the article or affects cost or quality • don’t want to give TM to function b/c a way of getting a back door patent, without the novelty or nonobvviou requirement --Certification Marks • Used by a person other than the owner to: • Identify a particular type of goods • Certify quality or origin • Open to anyone who meets standards set for certification • Owner must monitor mark users to ensure consistent product standards or mark may be cancelled --Certification Marks: Definition Words, names, symbols or devices used by one person to certify that goods or services of others have certain characteristics. Since consumers rely on certification marks for information about the products or services they identify, the Lanham Act imposes strict restriction for marks on the Principal Register. --Collective Marks Two Types: • Collective TMs and Sms – used by members of an association to o identify their goods and services and indicate they meet the organizations standards for admission • Collective Membership marks -used by members of a group to: o Indicate person displaying mark is a member of the group o Distinguish members from nonmembers --Collective Marks: Definition • Collection Membership Marks: purpose is to indicated membership in an organization; not used to id goods or services • Collective Trademarks: trade or service marks adopted by a collective organization for use by its members in selling their individual goods or services, distinguished their goods and services (g/s) from non-member g/s Trademark Classification Three types: • Inherently Distinctive (immediately register able) o Fanciful (coined, arbitrary) e.g. Kodak o Suggestive (e.g. Coppertone for suntan lotion; but requires consumer imagination to make connection) • “Descriptive” (proof of acquired secondary meaning required to be register able) o Including descriptive, misdescriptive, surnames, geographic marks • Generic (or otherwise unregisterable) Zatarains v. Oak Grove Smokehouse p.579 (Classification of marks) • Why is “Fish-Fri” a protectable trademark but “Chick-Fri” is not? o Fish-Fri had established that it had secondary meaning via survey; Chick-Fri couldn’t establish this o Under Lanham Act (LA), could have established a prima facie case of secondary meaning b/c had exclusive and continuous use for over 5 years • How does the trademark fair use defense differ from the copyright fair use defense? o Fair use when used in a descriptive sense, not a trademark sense (e.g. these apples are red and delicious) • Descriptive marks only protectable (PR) with proof of secondary meaning or incontestable status • Fair use is a defense to all descriptive marks, even those with acquired distinctiveness, use of mark solely in a descriptive sense ---Secondary Meaning • Because of exposure in the market place, the consumer views the mark not as its primary meaning, but as a indication of the source of the g/s • Can show via evidence of secondary meaning by: • Consumer survey • Period of time in use • Volume of sales • Amount of advertising • Consumer testimony • Defendant’s intent to copy (show that is trying to use owners goodwill) --Common Law Ownership of the mark is automatic as soon as the mark is used in trade (or acquires second meaning in the case of descriptive marks) --Benefits of Federal Registration Principal Register (PR)(distinctive marks): • (Gives rights in addition to common law rights) • Nationwide constructive use and notice (rights in a greater geographical area than the common law) • Possibility of incontestable status after 5 years • Federal SM jurisdiction • Customs seizures of infringing goods • Treble damages, attorney fees -Supplemental Register (SR) (capable of becoming distinctive, do here until have acquired secondary meaning; then go to the PR)): • Federal SM jurisdiction • May help in getting registration abroad --Registration Procedure • File application in PTO • Actual Use • Intent to use (ITU) (no use in commerce yet) o Have 6 mos to show use; must prove use after 3 yrs or else abandoned • PTO examines/Office Action/Response (go to SR if descriptive) • Publication for Opposition (30 days) • Mark registered on PR (Notice of allowance if ITU, must file declaration of use before registration) • Cancellation limited/Incontestable possible after 5 years • Must renew every 10 years (continued use affidavit after 6 years) Trademark Priority (T1 andT2 graph) • Based on use in commerce at common law • Lanham Act allows for priority based on bona fide intent to use (ITU) federal application as long as requisite actual use shown w/in 3 years of NOA. • Possibility for federally registered mark to coexist with senior common law mark (limited to area of geographic use) • Possibility of concurrent use and concurrent use registrations if no likelihood of consumer confusion (delta faucet and delta airlines) ---Bars to Registration Section 2(a), (b), (c), (d), (e3 & e5) • Absolute bars o Generic terms an there non verbal equivalents, deceptive marks (“lets roll’) -Section 2e1, 2, and 4 marks can be registered upon proof of acquired distinctiveness (secondary meaning) • Merely descriptive or deceptively misdescriptive • Geographically descriptive • Primarily merely a surname --Harjo v. Pro-Football Inc. p.642 (bars to registration: Scandalous Marks) • Washington Redskins logo trademark • Can cancel a mark if its scandalous or disparaging • Whose rights (other than the trademark owner) are at issue in this suit? • What are the tests for disparaging or scandalous marks? • Section 2a analysis requires consideration of marks in context, in their entirety, with relevant goods/services, and manner of use in the marketplace • For disparaging marks, need to determine whether mark is disparaging to the targeted person or group • For scandalous marks, determine whether matter is scandalous to a substantial composite of the general public (Old Glory Condoms) --In re Nantucket p.649 (Geographical marks) • Geographical deceptively misdescriptive marks are not protectable • What was the problem with the registerability test applied by the Board? • What is required for registration of geographic marks? • What geographic marks can never be registered? • Test for Primarily geographically deceptively misdescriptive marks: o Primarily geographic -public associates mark with a particular place o Misdescriptive -goods do not come from that place o Deceptively -public will make a goods -place association -think goods come from that place --Types of Geographical Marks • Not Registerable o Primarily geographically deceptively misdescriptive (if not distinctive before 12/8/93) o Geographically misdescriptive marks for wines or spirits (first used after 1/1/96) • Registerable upon proof of acquired distinctiveness (secondary meaning) o Primarily geographically descriptive • Registerable o Geographically misdescriptive o Geographically descriptive (certification and collective marks only) --Deceptive and Misdescriptive Marks • Misdescriptive (arbitrary): Registerable (e.g. “Red” for perfume that is not red in color) • Deceptively misdescriptive: Registerable upon showing of acquired distinctiveness (secondary meaning, sec. 2(f)) (e.g. Glass Wax; descriptive term, incorrectly describes a characteristic, quality, or ingredient of product, public understands it as describing the product, but no influence on purchase decision) • Deceptive: Never registerable (Lovee Lamb, but object is not lamb skin; misdescriptive, purchasers likely to rely on the misdescription when purchasing the product) -Park ’N Fly v. Dollar Park and Fly p.660 (Incontestability) • What purposes does the incontestability provision serve? o Repose • What dangers does it create? o Taking a descriptive term out of the public • Why does genericness survive as a viable defense after incontestable status is achieved but descriptiveness does not? o b/c has acquired a secondary meaning • Incontestability (not mandatory) – if an appropriate affidavit of continuous use is filed w/I year of any 5 year period after PR registration (Secs. 15, 14(3), 33(b)): o Conclusive evidence of validity of mark, registration, and owner’s right to use mark in commerce o Immunity from attack based on prior use or descriptiveness o Defenses limited to: fraudulent registration or affidavit, abandonment, genericness, Section 2(a)-(c) bars, fair use, misrepresentation of source, antitrust violation, equitable defenses, prior registration, good faith remote use o Relates to validity issues, not infringement (strength of mark) -International Trademark Law • TMs very important worldwide • Rights based on registration, not use • Nov. 2, 2002 U.S acceded to the Madrid Protocol (effective Nov. 2, 2003) o Allows for applicant to apply for protection in 54 countries (“international application”), essentially simultaneously • Foreign TM holders will need to file affidavits of use at designated times (TBD) -International Trademark Treaties • Paris Convention o Purpose: provide member nations against protection against unfair trade practices o Goal: each member provide TM protection to foreigners as strong as the protection for nationals • Madrid Agreement (3 treaties) o (US not a party to them) o provides a central filing system for TM registrations in foreign countries • GATT (The Agreement on Trade-Related Aspects of IP Rights) o Builds upon the Paris Convention o Imposes procedural and substantive standards for protection -Gray Market Goods • First sale doctrine applies to TMs in US • Gray market goods: goods bearing a valid TM, intended for sale abroad, but imported into this country w/o consent of domestic TM owner or foreign manufacturer • Customs service automatically seizes TM goods not authorized for sale by domestic TM owner, UNLESS, goods were produced by a foreign affiliate of TM owner or foreign producer under common control w/TM owner o Where not under common control, infringing o Where under common control, not infringing --AMF v. Sleekcraft p.680 (Infringement: likelihood of confusion) Are these goods related or competing? Competing What difference does it make? How is similarity of marks assessed? Must P prove all factors to prevail on infringement claim Types of Consumer Confusion Source Sponsorship Initial Interest Confusion Reverse Confusion (Big O) Competing Goods If they competing marks then look at : just the similarity of the marks. There is a presumption that the consumer will be confused. (e.g. Sleek craft and Slickcraft were both leisure boats) Likelihood of Confusion Factors Infringement under 15 USC §1114 (§32); Factors to consider with related goods (non-exhaustive): 1. strength of the mark, 2. proximity of the goods, 3. similarity of the marks, (see below) 4. evidence of actual confusion, 5. marketing channels used, 6. type of goods and the degree of care likely to be exercised by the purchaser, 7. defendant's intent in selecting the mark, and 8. likelihood of expansion of the product lines --Infringement: likelihood of confusion • Infringement under 15 USC §1114 (§32): • Prohibits use of a similar or counterfeit mark in connection with sale/distribution or advertising of goods/services which is likely to cause confusion or mistake • Prohibits copying mark and applying to labels, packages, etc. intended for use in commerce in connection with the sale of goods/services • Likelihood of confusion: that an appreciable number of ordinarily prudent purchasers are likely to be misled/confused as to the source of the goods in question --Similarity of the Marks Examine (consider marks as a whole): • Sight -look similar (ERT = ERTEC) • Sound – sound similar (Slickcraft = Sleekcraft) • Meaning – similar meaning (Toro Rojo = Red Bull, Roach Inn = Roach Motel, Leaf Eater = Weed Eater, but Spice Islands ı‚ Spice Garden) • (Similarity of marks is just one factor in related goods analysis, not necessarily determinative) --Problems, p. 692 5-6: Should B-M prevail on its infringement claim? Competitors should be able to use PM in their mark. Because Tylenol and Excederin names are so different. Also the PM is descriptive. -5-7: If the consumer benefits, why should we protect Ivory’s trademark from infringement? Lanham Act, Section 43 • (a) protection for unregistered trademarks, provides action for false designation of origin, false advertising, trade dress protection, general unfair competition • (b) provides importation remedy • (c) “new” federal dilution statute; provides protection for famous marks • Anticybersquatting Consumer Protection Act State Dilution Statutes • Half of states have these statutes • Routes for dilution relief 1. Diminution in mark to trade name; whittles away a strong association consumers have with the TM 2. Tarnishment by in a “unwholesome” context 3. Likelihood of confusion ----Federal Dilution Statute 15 USC 43(c)(1) ((1125(c)(1)) • To establish dilution, P must show: o Famous, distinctive senior mark o Junior use is a use in commerce o Junior use begins after senior mark becomes famous o Junior use must cause dilution of the distinctive quality of the senior mark o (Injunction only remedy unless willful dilution) Federal Dilution Statute: “Distinctive and Famous” Factors: 15 USC 43(c)(1) ((1125(c)(1)) • Degree of inherent or acquired distinctiveness • Duration/extent of use of mark in connection with goods/services • Duration/extent of advertising/publicity of mark • Geographical extent of trading area of mark • Channels of trade for goods/services • Recognition of mark in trading areas/channels of trade • Nature/extent of use of same/similar mark by 3rd parties • Is the mark registered -Bros. v. Utah Dept. of Travel p.10 (Infringement: Dilution) 4th Circuit Opinion • Why is this a dilution claim, not an infringement claim? • What must P show to prevail on claim for dilution? What was P unable to show • H: Federal dilution cause of action has more narrow scope than state action • H: To establish “dilution of the distinctive quality of the senior mark,” P must show: 1. A sufficient similarity between the junior and senior marks to evoke an “instinctive mental association” of the two by a relevant universe of consumers 2. Which is the effective cause 3. Actual economic harm: of an actual lessening of the senior mark’s selling power Dilution • To establish “dilution of the distinctive quality of the senior mark,” P must show: o A sufficient similarity between the junior and senior marks to evoke an “instinctive mental association” of the two by a relevant universe of consumers o Which is the effective cause o Actual economic harm: an actual lessening of the senior mark’s selling power Johnson & Johnson*Merck v. Smithkline Beecham p.715 (Infringement: False Advertising) • J&J failed in their attempt to prove false advertising b/c they were unable to produce actual evidence that the ads deceived, or that intentionally deceived • When asserting implied falsehood, must show evidence of intent to deceive • What does J&J claim is “false” about S-B’s advertising? • What must J&J show to prevail? How could they have shown it? • §43(a)(1)(B): To establish liability for false advertising P must show: o Ad is literally false, OR o Ad is literally true but likely to mislead/confuse consumers (implied falsehood) • For implied falsehood must show o Ads tend to deceive (must use extrinsic evidence), OR o D intentionally set out to deceive consumers In comparative advertising you can use another’s mark as a fair use when advertising. --Lanham Act 43(s): False Advertising • Elements of a false advertising cause of action for injunction: o 's false or misleading statement of fact about its own product o the statement actually deceived or had the capacity to deceive a substantial segment of the audience o the deception was material, in that it was likely to influence the purchasing decision o caused caused its g/s to enter interstate commerce, and o The Π had been or is likely to be injured as a result --Defenses Murphy Door Bed v. Interior Sleep Sys. p.726 (Defenses: Genericness) • Who caused mark to become generic? P? D? Consumers? • What distinction does the court make in assigning the burden of proof? Why? • How did D establish genericness of mark? • Trademark had become the common/generic name for that type of bed among a substantial majority of the public. Although Murphy had TM it became a common name. • Burden on D to prove mark was generic since public had expropriated name established by the TM owner o Did this by using Dictionary and newspaper reports to show. • (Here however ISS had a K with Murphy to say that they would not sell under the name. ) -MLB Properties v. Sed Non Olet Denarius p.753 (Defenses: Abandonment) • What is required to establish abandonment of a mark? 1. Discontinued use of mark and 2. Intent not to resume the use of the mark. 3. Intent not to be resumed may be inferred form the circumstances • What relevance, if any, does the reason for P’s nonuse have on the issue of abandonment? o The reason for the non-use is irrelevant. • What rights does P have in the Brooklyn Dodgers mark now? • Abandonment: Owner discontinues use of mark with no intent to resume use (3 yrs non-use raises presumption). o However presumption is rebuttable. • If use is resumed after abandonment, rights (common law) are limited to goods with which mark is now used, as of date of resumption of use --Problems, p. 761 5-11: Can the new company use the Humble Oil name? 5-12: Who has priority in the use of Big Blue? Sect.45 says a mark shall be abandoned when 1. use has been discontinued with intent not to resume such use or 2. when ay course of conduct of the owner, including acts of causes mark to lose it significance as a mark. Even if it was ever a mark, since IBM did not want to be identified with the name then it abandoned the Big Blue Mark. Therefore BIG BLUE repair shop should own the rights to the mark. Dawn Donut v. Hart’s Food Stores p. (Abandonment: Unsupervised licenses) • Why is P’s licensing of its mark not abandonment of the mark? • Why is such licensing allowed for a trademark? Why are franchisers not required to use collective or certification marks? • TM owner can license others to use mark as long as owner exercises control over quality of goods produced under license; transfer of TM without quality control/goodwill results in abandonment of mark • If owner of the TM does not maintain the quality of the mark as it relates to the licensees then it may be deemed abandoned. New Kids v. News America Pub. p. (Fair Use: Nontrademark Use) • Why is this use of P’s mark not “unfair?” • What must D show to avoid liability? • How is this holding different from the fair use holding in Zatarains? • Nominative Fair Use a) Three Tests for Fair use (No TM protection) (1) No alternative way to do it (not readily Identified w/o use of TM.) (2) Only a minimum amount is used (use name but not logo) (3) Cannot show sponsorship (cannot say that we are affiliated with the company) b) Usually we talk about Fair use with descriptive marks that have acquired secondary meaning, but where one wants to use the mark in its primary descriptive sense (this is “Seattle’s Best Coffee”not violating SBC’s TM by saying that) c) Something can be inherently distinctive but not a TM if not used as a TM. Museum Eg. The photo of a museum is not used as a TM therefore it is not even a TM so no infringement. However a photo of a Coke can may be infringement of a TM because the coke can is used as a TM. Examples: there is no other way to say “New kids on the Block” if you say it in its original descriptive form, it is not TM infringement. (this is Nominative use of the mark.) Because it does not implicate the source –identification function that is the purpose of the TM, it does not constitute unfair competition; such use is fair because it does not imply sponsorship or endorsement by the TM holder. L.L. Bean v. Drake Publ. p. (Defenses: Parody) • What competing policies/rights are at stake in this case? o balancing avoiding consumer confusion with public interests in free expression. • Is this really a noncommercial use of P’s mark? o Seems like it is because it is not being used to sell the LL Beam Product. However it was used to sell the magazine so it may be a commercial use. • Does the court provide a test for ascertaining permissible parody from impermissible dilution? o Not really they just talk about where the threat of tarnishment may be • A parody must convey 2 simultaneous and contradictory messages that is the original and it is not original and is instead a parody. o If not then it is probably vulnerable under trademark law. • D made a sex catalogue using P’s name-it was a parody of P’s catalogue. • The District Court issued an injunction based on the tarnishment model, but the Ct. of Appeals reversed saying that it was an editorial parody. • Parody for commercial use (real purpose of the parody is to sell the competing product) is NOT o.k. = injunction. • Parody for editorial/artistic/noncommercial use (will be journalistic) = o.k. • Commercial Use Is KEY!!!! Problems, p. 778 5-14: As between Busch and Balducci, who should prevail? Seems like Balducci should prevail because this is a noncommercial use. 5-15: Who should prevail, Coca-Cola or Gemini Rising? Seems like Coke should prevail because although this is not for a commercial use they may be harming the TM identity and integrity, by affecting its capacity to command respect in the market. Lindy Pen Co. v. Bic Pen Corp. p. (Remedies: Damages) • When is an accounting of profits necessary? • Lindy tried to get damages based on ’s profits and failed b/c did not show ’s profits from a relevant (1) Profits • Many cts require you to show willful deception to get profits (Basch). • P is entitled to D’s profits are attributable to TM infringement. • This ct says an accounting is proper only where the D is attempting to gain the value of an established name of another. Why is an injunction alone insufficient after a finding of willful infringement? • To establish damages under lost profits method a P must make a prima facie showing of reasonably forcast profits. A reasonable basis for computation must exist. Why were no damages awarded to Lindy? • Here lindy failed to come forward with any evidence of sales of the BIC Auditors fine point in the infringing market. Big O Tire Dealers v. Goodyear p. (Remedies: corrective advertising) • How is this case different from a normal trademark infringement action? • Big O does not claim that Goodyear was trying to trade on the goodwill of BIG O. Instead P contends that Good year use of P’s TM created a likelihood of confusion re the source of P’s Big Foot tires. • How is Big O hurt by Goodyear’s advertising campaign? Reverse Confusion • Not like source confusion-no one really thinks one product is another, but people think the plaintiff is the junior user and the thief, but the P is really the senior user. • P is complaining that D has destroyed their mark and they are no longer able to distinguish themselves. (this is the property model, not consumer protection) Is the public hurt by Goodyear’s actions? Probably not. Defenses to TM Infringement • Genericness • Functionality • Abandonment • Fair Use • Nontrademark Use • Parody Trade Dress • Use in commerce • Distinctiveness • Non-functionality