Table of Contents

I. ................................................................................................................................................... 13 II. C------Final......................................................................................................................... 13

A) Issue spotters .......................................................................................................................... 13 Know hard and easy issues; dont waste too much space on easy issues. ................. 13 B) Normative questions ............................................................................................................. 13 1. Know the theories that underlie the law. ................................................................................ 13 2. Dont just recapitulate the same theories rehashed in class do something creative and original. ................................................................................................................................. 13 1. A) Covers four general areas ................................................................................................... 13 Copyright law ...................................................................................................................................... 13 Patent law ............................................................................................................................................. 13 Trademark and unfair competition ........................................................................................... 13 Ancillary state doctrines ................................................................................................................. 13 B) Juxtaposition ............................................................................................................................ 14 1. Understand each of the areas better if you see them juxtaposed.................................. 14 2. See them overlap in the internet, software, industrial designs, etc. ............................. 14 C) Theories of intellectual property ..................................................................................... 14 1. Labor-Desert theories...................................................................................................................... 14 2. Utilitarian theories ............................................................................................................................ 16 3. Personality theories ......................................................................................................................... 16 4. Social planning theories.................................................................................................................. 16 1. 2. 3. 4. A) Generally ................................................................................................................................... 16 1. Copyright does not protect the physical work, but the ideas expressed in a tangible medium of expression ............................................................................................................. 16 2. Protected creations ........................................................................................................................... 16 3. Unprotected creations ..................................................................................................................... 18 4. Must be fixed in a tangible medium of expression .............................................................. 19 5. Impermissible forms of expression for copyright protection ......................................... 19 6. Characteristics not required for protection............................................................................ 19 B) Copyright Protection for Fictional Characters ............................................................ 19 1. A well-developed fictional character is protected independent of the work in which that character appears ................................................................................................................ 19 2. Evolution ............................................................................................................................................... 19 3. Field began in a sense with a dispute over Sam Spade (Maltese Falcon)................... 20 4. Examples ............................................................................................................................................... 20 5. In class exercise Bond-like Honda commercial ................................................................. 20 6. Parodies and advertisements ....................................................................................................... 22 C) Architecture ............................................................................................................................. 22 1. Before 1990, copyright protection for architecture was just a subset of protections for 3-D objects as a whole (i.e., sculpture)........................................................................................ 22 2. Damages largely assessed by what a reasonable royalty would have been ............. 22

III. Introduction ................................................................................................................... 13

IV. What May Be Copyrighted? ....................................................................................... 16

3. The way in which architects work, and are selected for jobs, means that the more distinctive their work is, the better off they are. Creates a need for IP protection. ....... 22 D) Hypothetical............................................................................................................................. 22 1. Fisher takes a photo on fully automatic settings (more or less random) and create an amateur greeting card. Send it to a friend, who goes to the same place and frames a similar photo, sells it to Hallmark for ten grand. What rights do Fisher have?................ 22 E) Originality and Creativity .................................................................................................... 23 1. Possible meanings of originality ................................................................................................. 23 2. Sheldon v. Metro-Goldwyn............................................................................................................... 24 3. Bleistein v. Donaldson Lithographing Co. .................................................................................. 25 4. Feist v. Rural Telephone Co. ............................................................................................................ 25 5. Franklin Mint ....................................................................................................................................... 25 6. Scale models ........................................................................................................................................ 26 F) Ideas, Facts, and Expression ............................................................................................... 26 1. Methods and systems are not copyrightable ......................................................................... 26 2. Facts and ideas are not copyrightable ...................................................................................... 26 3. Merger doctrine ................................................................................................................................. 27 4. Historical Facts and Research: ..................................................................................................... 28 5. Plots......................................................................................................................................................... 28 G) Fixation and Formalities ..................................................................................................... 29 1. H.R. Rep. No. 94-1476 (1976) (re: Copyright Act of 1976) .............................................. 29 2. Formalities ........................................................................................................................................... 29

V. Who is the Copyright Owner? .................................................................................... 30

A) Title 17 ....................................................................................................................................... 30 17 U.S.C. secs. 201, 202, 203, 204, 205 ..................................................................................... 30 B) Works for Hire......................................................................................................................... 30 1. Community for Creative Non-Violence et al. v. Reid (1989)............................................ 30 2. A work is for hire if it is ............................................................................................................... 31 3. Copyright law overrides contract law; you cant contract to make a work a work for hire unless it is one of the 9 types of work. ............................................................................... 32 4. Significance of designation as a work for hire:...................................................................... 32 5. Joint works ........................................................................................................................................... 32 6. Collective works ................................................................................................................................. 33 7. Testing the doctrine ......................................................................................................................... 33 C) Division and Transfer of Copyright.................................................................................. 35 1. Previously ............................................................................................................................................. 35 2. Currently ............................................................................................................................................... 35 D) Termination of Transfers (MMLJ 407): .......................................................................... 35 1. 1909 Act: Authors could reclaim copyright interests at renewal.................................. 35 2. 1976 act ................................................................................................................................................. 35 E) Problems ................................................................................................................................... 35 1. Oklahoma Natural Gas v. Larue (1998) .................................................................................... 35 2. Casebooks prepared by professors ............................................................................................ 37 3. Thomas v. Larson (1998) ............................................................................................................... 37 F) The Ideology of Creativity ................................................................................................... 38 1. Martha Woodmansee On the Author Effect: Recovering Collectivity ...................... 38 2. Peter Jazsi Toward a Theory of Copyright: The Metamorphoses of Authorship. 39 1.

VI. What Rights are Encompassed by Copyright Ownership? ............................. 39

A) Statutory entitlements and infringements thereof ................................................... 39

1. Structure of the statute ................................................................................................................... 39 2. 17 U.S.C. 106 grants exclusive rights ..................................................................................... 39 3. Arnstein v. Porter (1946) ............................................................................................................... 42 4. Steinberg v. Columbia Pictures Industries, Inc. (1987) ..................................................... 42 5. Limitations on the exclusive right to copy .............................................................................. 43 6. Goldstein: Derivative Rights and Derivative Works .......................................................... 44 7. Midway Mfg. Co. v. Artic International, Inc. (1983)............................................................. 44 8. Litchfield v. Spielberg (1984) ....................................................................................................... 45 9. Quality King Distributors, Inc. v. LAnza Research International (1998) ................... 45 10. Mirage Editions v. Albuquerque A.R.T. Co............................................................................ 45 B) Copyright in music ................................................................................................................. 46 1. Object of protection .......................................................................................................................... 46 2. Exceptions and limitations ............................................................................................................ 46 C) Public performance and display rights .......................................................................... 50 1. Copyright owners have an exclusive right to performance and display; for profit requirement has been stricken. ............................................................................................................ 50 2. Architecture isnt covered by display, and performance coverage is limited for sound recordings......................................................................................................................................... 50 3. Any physical act taken to make a work perceivable to the viewer or listener, or cause a work to be reproduced (even in a transient, temporary form) is a performance. 50 4. Owners of a copy are allowed to show it to viewers present at the place where the copy is located a gallery showing is OK, a movie performance is not................................ 50 5. Publicly means ................................................................................................................................ 50 D) Contributory infringement ................................................................................................. 50 1. Encouraging or assisting a third party to infringe a copyright ...................................... 50 2. Requires knowledge, whether actual or constructive, of the infringement .............. 50 E) Digital piracy ............................................................................................................................ 50 1. Audio Home Recording Rights Act of 1992 ............................................................................ 50 2. Digital Millennium Copyright Act of 1998............................................................................... 52 F) International issues in copyright...................................................................................... 52 1. GATT, NAFTA, Berne ........................................................................................................................ 52 2. Berne and GATT provide statutory minimum protections .............................................. 52 3. Beyond this, each country can establish its own regime. Any rights in excess of the minimums must be granted to everyone, even foreign nationals of countries with lesser protections. .................................................................................................................................................... 52 G) First Sale .................................................................................................................................... 52 1. First sale doctrine allows an owner of a copy to transfer or dispose of it, but not to transform it into something else (a la Clear Play or Clean Flicks) .......................................... 52 H) Duration .................................................................................................................................... 52 1. Statutes .................................................................................................................................................. 52 2. Eldred v. Ashcroft (2003)............................................................................................................... 53 I) Fair Use........................................................................................................................................ 54 1. Statutory factors ................................................................................................................................ 54 2. Jurisprudence ...................................................................................................................................... 55 3. A&M Records, Inc. v. Napster ....................................................................................................... 57 4. Castle Rock Entertainment v. Carol Publishing Group ....................................................... 57 J) Moral rights ............................................................................................................................... 57 1. Introduction ......................................................................................................................................... 57 2. Types of moral rights ................................................................................................................... 57

3. In the United States........................................................................................................................... 58 4. Policy arguments ............................................................................................................................... 59 K) Personality theory (Radin; Hughes)................................................................................ 60 L) Reward theory ......................................................................................................................... 60 1. Intellectual products are public goods.................................................................................. 60 2. Possible responses to public-goods problem ........................................................................ 60 3. Effects of partial price discrimination ...................................................................................... 61 M) Remedies .................................................................................................................................. 63

VII. Introduction to Patent ............................................................................................... 63

A) Recurring policy arguments: ............................................................................................. 63 For generous interpretation of patent rights ........................................................................... 63 For narrow interpretation of patent rights .............................................................................. 63 B) Statutory requirements for obtaining patent protection ........................................ 63 1. Patentable Subject Matter (PSM): Invention must constitute PSM. ............................ 63 2. Novelty: Invention has not been anticipated in practice or knowledge. 35 U.S.C. 102. 63 3. Utility: Invention must be useful (very low threshold). 101. .................................. 63 4. Non-Obviousness: Also called non-triviality. Invention must represent significant advance on prior art 103. .................................................................................................................... 64 5. Enablement: Description of invention in patent must allow PHOSITA (person with ordinary skill in the art) to construct the invention. 112. ...................................................... 64 6. Statutory Bars: Bar patentability based on too long a delay in seeking patent protection. ...................................................................................................................................................... 64 C) Rights conferred by a patent .............................................................................................. 64 1. Essentially, patents confer for a number of years the right to exclude others from: 64 2. Term was 17 years until 1995, when GATT-TRIPS adherence extended it to 20 years from the date the patent application is filed........................................................................ 64 3. The exclusionary right is a negative right ............................................................................... 64 D) History of the patent system .............................................................................................. 64 1. History of Patent System: (MMLJ 121- 35). ........................................................................... 64 E) Patent coverage ...................................................................................................................... 65 1. Process patents................................................................................................................................... 65 2. Product patents .................................................................................................................................. 65 F) Intersection with Trade Secret .......................................................................................... 66 1. For some actors, especially software engineers, there is a choice between patent protection and trade secret protection. ............................................................................................. 66 2. Trade secret requires making the X secret, while patent protection requires making it known. ......................................................................................................................................... 66 G) Patent litigation ...................................................................................................................... 66 1. Obtaining and Litigating Patents................................................................................................. 66 1. 2. A) Patentable Subject Matter................................................................................................... 67 1. Congress grants patent entitlements pursuant to its authority under Article I, sec. 8, cl. 8 of the Constitution (the Patent Clause). ........................................................................... 67 2. Cases defining PSM: .......................................................................................................................... 67 3. Business method patents ............................................................................................................... 68 B) Utility .......................................................................................................................................... 70 1. General utility...................................................................................................................................... 70

VIII. What may be patented? ........................................................................................... 67

Specific utility ...................................................................................................................................... 71 Beneficial utility ................................................................................................................................. 71 C) Novelty ....................................................................................................................................... 71 1. To be patentable, a product or process must be new in the sense that ...................... 71 2. Circumstances that will prevent an inventor (I) from acquiring a patent ................. 71 3. Priority principles ............................................................................................................................. 74 D) Non-obviousness .................................................................................................................... 75 1. Development of Doctrine: Doctrine develops from 1850 through skill and ingenuity standard (Hotchkiss, 1850) to flash of creative genius test (Cuno Corp. 1941). Graham v. John Deere abandons flash of genius test and allows for consideration of secondary factors in addition to whether invention is advancement on prior art. .......................................................................................................................................................... 75 2. Post-Graham Obviousness Determinations: Post Graham circuits diverge on percentage of patents held invalid based on obviousness. ........................................................ 77 3. Federal Circuit Standard: Since 1982 creation of Federal Circuit, standard for non-obvious relaxed to allow more patents to remain valid in infringement suit challenges based on court emphasis on secondary factors and treatment of combination patents. ................................................................................................................................. 77 4. Graham v. John Deere, 383 US 1 (1966) (MMLJ 193):........................................................ 77 5. Combining References from Prior Art: Overcoming the Non-Obviousness Barrier 77 6. Variations on Non-Obviousness .................................................................................................. 79 7. Secondary Considerations.......................................................................................................... 79 8. Theories/Perspectives on Non-Obviousness......................................................................... 79 9. Alternative Ways of Thinking About Non-Obviousness ........................................................ 81 E) Enabling disclosure (Enablement)................................................................................... 82 1. 35 U.S.C. s. 112: The patent specification must contain a description of the invention and of the manner and process of making and using it, clearly enough to enable a PHOSITA to make and use it. The claims define the scope of legal protection surrounding the patented innovation. Section 112 requires three things in patent: .... 82 2. Enablement subsidiary doctrines ........................................................................................... 84 3. Best mode ............................................................................................................................................. 84 4. Tacit attention to types of invention ......................................................................................... 84

2. 3.

IX. Patent Structure ............................................................................................................ 85

A) Disclosure ................................................................................................................................. 85 Intertwined disclosure requirements ....................................................................................... 85 Policies ................................................................................................................................................... 85 B) Structure.................................................................................................................................... 85 1. Specification......................................................................................................................................... 85 2. claims ...................................................................................................................................................... 85 C) Claim interpretation ............................................................................................................. 85 1. Interpretative sources ..................................................................................................................... 86 1. 2.

X. Patent Rights ................................................................................................................... 87

A) Rights encompassed by a patent ...................................................................................... 87 1. Duration................................................................................................................................................. 87 2. Exclusive rights to make, use, and sell ...................................................................................... 87 3. Assignments and licenses .............................................................................................................. 87 4. Infringement ........................................................................................................................................ 87 5. Setting the boundaries of the patent ......................................................................................... 87

Improvements..................................................................................................................................... 87 Contributory infringement & inducement .............................................................................. 87 Defenses ................................................................................................................................................ 87 Remedies ............................................................................................................................................... 87 B) Duration .................................................................................................................................... 87 1. Utility patents...................................................................................................................................... 87 2. Design patents: ................................................................................................................................... 88 C) Making, using, selling ............................................................................................................ 88 1. 271 (a) ................................................................................................................................................ 88 2. Make .................................................................................................................................................... 88 3. Use ........................................................................................................................................................ 89 4. Sell 271 (a) .................................................................................................................................... 89 D) Assignments and licenses ................................................................................................... 89 1. Assignor estoppel (Diamond Scientific).................................................................................... 89 2. No licensee estoppel (Lear) ........................................................................................................... 89 3. Permissible duration of licenses (Brulotte) ............................................................................ 89 4. Compulsory licenses......................................................................................................................... 90 E) Infringement ............................................................................................................................ 90 1. Literal infringement ......................................................................................................................... 90 2. Equivalents: Graver Tank, Hilton Davis.................................................................................... 90 F) Interpreting claims ................................................................................................................ 91 1. Objective standard ............................................................................................................................ 91 2. Sources of guidance: ......................................................................................................................... 91 G) Improvements ......................................................................................................................... 92 1. Blocking patents................................................................................................................................. 92 H) Contributory infringement and inducement ............................................................... 92 1. Contributory Infringement 271(c) ......................................................................................... 92 2. Inducement .......................................................................................................................................... 92 I) Defenses ...................................................................................................................................... 93 1. Experimental use ............................................................................................................................... 93 2. Inequitable conduct .......................................................................................................................... 93 3. Patent misuse ...................................................................................................................................... 94 4. Laches ..................................................................................................................................................... 98 J) Remedies .................................................................................................................................... 98 1. Generally, injunctions, not damages, are the standard remedies in patent cases. The reason is that placing a value on a particular piece of patented technology, especially over a period of time, is very difficult. Better let the parties negotiate over a license. Valuation problem. .................................................................................................................... 98 2. Patentee cannot use the courts to prevent violations ex ante. ....................................... 99 3. H.H. Robertson ..................................................................................................................................... 99 4. Permanent injunctions denied on very rare occasions on the basis of the public interest ............................................................................................................................................................ 99 5. Injunctions are thought more efficient because of significant valuation problem if court has to decide value under a liability rule .............................................................................. 99 6. Monetary damages ............................................................................................................................ 99 K) Economic Analysis ............................................................................................................... 100 1. Examples of ways in which the patent system might be tuned................................... 100 2. How should we make those adjustments? ........................................................................... 101 3. Fishers historical article ............................................................................................................. 105

6. 7. 8. 9.

XI. IP in Computer Software .......................................................................................... 107

A) 1. 2.

Market failures...................................................................................................................... 107 Public goods problem ................................................................................................................... 107 Standardization and network externalities ......................................................................... 107 B) Four systems available for protecting software ....................................................... 107 1. Trade secret ...................................................................................................................................... 107 2. Copyright law (see also below)................................................................................................. 108 3. Patent................................................................................................................................................... 109 C) Copyright law ......................................................................................................................... 109 1. Protection extended to computer software in accordance with the recommendations of CONTU in 1980 .............................................................................................. 109 2. Whelan ................................................................................................................................................ 109 3. Computer Associates v. Altai ....................................................................................................... 110 4. Six levels of declining abstraction (Gates Rubber) ............................................................ 112 5. Six unprotectable elements (GR).............................................................................................. 112 6. Menu hierarchies ............................................................................................................................ 112 D) Patent ....................................................................................................................................... 113 1. Cases .................................................................................................................................................... 113 2. Freeman-Walter-Abele tests (1977-1982) .......................................................................... 113 3. Gradual weakening, 1982-1994 ............................................................................................... 113 4. In re Alappat (1994) ...................................................................................................................... 113 5. Patent doctrines by technology sector .................................................................................. 113 6. Unstable legal doctrine................................................................................................................. 114 E) Copies and the DMCA .......................................................................................................... 114 1. In 93 the 9th Circuit found that loading a program into RAM constitutes a copy for the purposes of 106. (MAI Systems) ............................................................................................. 114 2. In 80, this was rectified by 117 of the Copyright Act. ................................................. 115 3. MAI may be inconsistent with prior cases and legislative intent. House report indicated that fixation would exclude transient computer reproductions .................. 115 4. DMCA ................................................................................................................................................... 115 F) DMCA ......................................................................................................................................... 115 1. Three major changes to the copyright Act ........................................................................... 115 G) Sega (9th Cir. 1992) : ............................................................................................................ 118 1. Facts: Accolade wanted to make Sega-compatible game w/o complying w/ Segas licensing requirements (making S the sole platform for As games); A bought 3 of Ss games, reverse engineered to unlock and achieve compatibility w/ S .............................. 118 2. Held: copying portion of copyrighted code infringes, is a violation of 106, but is excused by 107 (fair use doctrine) ................................................................................................ 118 3. Fair use components: .................................................................................................................... 118 A) Questions ................................................................................................................................ 118 Cohens questions ........................................................................................................................... 118 What roles do trademarks play? .............................................................................................. 118 Are those roles desirable or undesirable?............................................................................ 119 How do you minimize undesirable effects? ......................................................................... 119 B) What do trademarks do? ................................................................................................... 119 1. Identify sources of products ...................................................................................................... 119 2. Mnemonic devices .......................................................................................................................... 120 3. Provide substantive information ............................................................................................. 120 1. 2. 3. 4.

XII. Trademark Policy ..................................................................................................... 118

Generalized indicia of prestige ................................................................................................. 120 Increase attractiveness through sound, appearance, or connotation ...................... 120 Provide vehicles for conversation and parody................................................................... 120 Shape consumers preferences and attitudes ..................................................................... 120 C) Possible alternatives to trademarks ............................................................................. 122 1. Government certification of quality of goods ..................................................................... 122 2. Private certification of quality of goods ................................................................................ 122 3. Warranties......................................................................................................................................... 122

4. 5. 6. 7.

XIII. Trademark Doctrines ............................................................................................. 122

A)

Trademarks 1127 ( 45) ................................................................................................ 122 1. Any word, name, symbol, or device, or any combination thereof .............................. 122 2. Either: .................................................................................................................................................. 122 3. Used to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown. ........................................................................................................................ 122 B) Service marks ........................................................................................................................ 122 1. Any word, name, symbol, or device, or any combination thereof .............................. 122 2. Either: .................................................................................................................................................. 122 3. Used to identify and distinguish the services of one person from the services of others and to indicate the source of the services, even if that source is unknown ...... 122 C) Collective marks ................................................................................................................... 122 1. A trademark or service mark..................................................................................................... 122 2. Either ................................................................................................................................................... 123 D) Certification marks ............................................................................................................. 123 1. Any word, name, symbol, or device, or any combination thereof .............................. 123 2. Either: .................................................................................................................................................. 123 3. Used to certify regional or other origin, material, mode of manufacture, quality, or accuracy of such persons goods or services or that the gods or services were performed by members of a union or other organization. ..................................................... 123 E) Categories................................................................................................................................ 123 1. Marks that need only be used to be registrable ................................................................. 123 2. Marks registrable only with secondary meaning .............................................................. 124 3. Marks not registrable.................................................................................................................... 125 F) Johns April 2 notes .............................................................................................................. 125 1. The typology that we covered yesterday has ramifications throughout this section of the course. .............................................................................................................................................. 125 2. Weve talked about all of the characteristics that will throw a mark into category 3 except IMMORAL, SCANDALOUS OR DISPARAGING MARKS most controversial part of the class and of trademark law: .................................................................................................... 125 G) Secondary meaning ............................................................................................................. 127 1. Secondary Meaning........................................................................................................................ 127 2. Note on the doctrine of "secondary meaning in the making" ...................................... 128 3. Secondary meaning kicks in when customer association of the mark with X reaches a certain plateau. ..................................................................................................................... 128 4. Possible remedies for X ................................................................................................................ 128 H) Novel forms of trademarks .............................................................................................. 129 1. Sounds ................................................................................................................................................. 129 2. Smells .................................................................................................................................................. 129 3. Colors ................................................................................................................................................... 129

4. Slogans ................................................................................................................................................ 129 5. Location of labels ............................................................................................................................ 129 6. Invented ingredients ..................................................................................................................... 130 7. Package shapes ................................................................................................................................ 130 8. Cartoon characters ......................................................................................................................... 130 9. Buildings............................................................................................................................................. 130 10. Product configurations ............................................................................................................. 130 I) Controversy over Inherent Distinctiveness for product configurations ....... 130 1. Two Pesos ........................................................................................................................................ 130 2. Other cases ........................................................................................................................................ 130 3. Wal-Mart (S. Ct. 2000) .................................................................................................................. 131 J) Trade dress and product configuration ........................................................................ 132 1. Three basic principles: ................................................................................................................. 132 2. 9th Cir. in Pagliero case adopted subsidiary doctrine of aesthetic functionality: 132 3. Theory of trade dress protection (oversimplified): based on a combination of desire to prevent consumer confusion & not to allow parasitism because it's unfair & unseemly...................................................................................................................................................... 132 4. TF thinks trade dress doctrine "has gotten way out of hand" ..................................... 132

XIV. Gaining and Losing Trademark Protection .................................................... 132

A) Priority ..................................................................................................................................... 132 B) Distinctiveness ...................................................................................................................... 132 C) Procedures in establishing protection ......................................................................... 132 D) Losing protection ................................................................................................................. 133 1. Abandonment................................................................................................................................... 133 2. Impermisible licenses and assignments ............................................................................... 133 3. Genericity........................................................................................................................................... 133

XV. Rights Encompassed Through Trademark Ownership ................................ 133

A) B)

Infringement through consumer confusion ............................................................... 133 Federal anti-dilution statute (Lanham Act 43(c)) .................................................... 133 1. Plaintiff must show: ....................................................................................................................... 133 2. In determining whether a mark is distinctive and famous, a court may look at:. 134 3. Defenses to federal dilution claims ......................................................................................... 134 4. In practice .......................................................................................................................................... 134 5. Tarnishment ..................................................................................................................................... 134 6. Retroaction........................................................................................................................................ 134 C) Protection for unregistered marks under the Lanham Act 43(a)....................... 134 1. History................................................................................................................................................. 134 2. Current coverage close to protection for registered marks.......................................... 135 3. Trademark expansion into copyright areas ........................................................................ 135 4. Parody problems ............................................................................................................................ 135 A) Definition ................................................................................................................................ 136 Objects that are both useful and beautiful. Design of computers, pens, cars, etc. 136 B) Patent protection ................................................................................................................. 136 1. Utility patents................................................................................................................................... 136 2. Design patents ................................................................................................................................. 137 C) Copyrightability of useful objects................................................................................... 138 1.

XVI. Industrial Design ...................................................................................................... 136

1. History................................................................................................................................................. 138 2. Current doctrine ............................................................................................................................. 138 D) Trademark ............................................................................................................................. 139 1. Doctrine .............................................................................................................................................. 139 2. Trade dress protection ................................................................................................................. 139 3. Aesthetic functionality ................................................................................................................. 139 4. Comparison ....................................................................................................................................... 140 5. Alternatives ....................................................................................................................................... 140

XVII. Trade Secrets ........................................................................................................... 140

A) 1. 2.

Sources of law ........................................................................................................................ 140 State law ............................................................................................................................................. 140 Economic Espionage Act of 1996 ............................................................................................. 140 B) Subject matter ....................................................................................................................... 140 1. Restatement definition: a process or device for continuous use in the operation of a business. Includes: .............................................................................................................................. 140 2. UTSA expands protected matter to include: ....................................................................... 140 C) Requirements for protection ........................................................................................... 142 1. Information must have been secret initially.................................................................... 142 2. Plaintiffs must have made reasonable efforts to keep it secret................................... 142 3. The information must be commercially valuable ............................................................. 142 D) Rockwell .................................................................................................................................. 142 1. See chart in powerpoint slides. ................................................................................................. 142 2. Theory 1: Protect trade secrets in order to discourage rent-seeking (moving wealth around rather than increasing wealth)............................................................................ 142 3. Theory 2: Protect TS in order to stimulate innovation .................................................. 142 E) Requirements for liability ................................................................................................. 142 1. Breach of confidence ..................................................................................................................... 142 2. or: secret was discovered through improper means .................................................. 142 F) Remedies ................................................................................................................................. 142 1. Injunctions......................................................................................................................................... 142 2. Damages ............................................................................................................................................. 143 G) Constitutional takings ..................................................................................................... 143 1. 5th Amendment private property taken for public use w/out just compensation 143 2. Monsanto trade secrets are private property if protected by state TS law. .... 143 3. A taking occurs if the law in effect at the time the owner submitted the information to the government gave the owner a reasonable expectation that the information would not be disclosed................................................................................................. 143 H) Limits on use of confidential information by employees ...................................... 143 1. If the information is a trade secret, employee is disabled if either............................ 143 2. If the information is not a trade secret, employee is disabled only if she signed a reasonable agreement ........................................................................................................................ 144 I) Employer/employee rights to inventions .................................................................... 144 1. Courts routinely enforce pre-invention agreements ....................................................... 144 2. In absence of agreement, inventions by employee in the course of employment belong to employee, but ........................................................................................................................ 144 J) Doctrinal perspectives......................................................................................................... 144 1. Utilitarianism ................................................................................................................................... 144 2. Labor-desert theory ...................................................................................................................... 146

3. A)

Personality theory .......................................................................................................................... 146

XVIII. Idea Submission..................................................................................................... 147

Is what? .................................................................................................................................... 147 1. X submits an idea to Y. Y then uses some variant of the idea without compensating X. ........................................................................................................................................ 147 2. Typically, X is an individual and Y is a larger-scale operator. Someone with more economic clout. ......................................................................................................................................... 147 3. Y is also generally the only plausible buyer of Xs idea................................................... 147 4. X generally has no way of estimating the value of the idea. ......................................... 147 B) Doctrinal pegs........................................................................................................................ 147 1. Idea as property .............................................................................................................................. 147 2. Misappropriation ............................................................................................................................ 147 3. Express contract ............................................................................................................................. 148 4. Contract implied in fact ................................................................................................................ 149 5. Quasi-contract.................................................................................................................................. 149 C) Idea submission problems ................................................................................................ 149 1. Mobil color scheme ........................................................................................................................ 149 2. Bud frog commercials ................................................................................................................... 149 3. ABC pharmacological explanation for Elvis death ....................................................... 149 4. Chevrolet location of the battery and starter in the car.............................................. 149 5. Eastern Airlines Plane Facts ............................................................................................... 149

XIX. Right of Publicity ...................................................................................................... 149

A) 1. 2.

Sources of the doctrine ...................................................................................................... 149 State common law outgrowth of tort of invasion of privacy..................................... 149 State statutes .................................................................................................................................... 149 B) Requirements ........................................................................................................................ 149 1. Celebrity status ................................................................................................................................ 150 2. Commercial value of plaintiffs identity ................................................................................ 150 3. Identifiability .................................................................................................................................... 150 4. Distinctiveness or uniqueness? ................................................................................................ 150 C) Protected aspects of celebritys identity ...................................................................... 150 1. Name (Cardtoons) .......................................................................................................................... 150 2. Likeness (Joe Montana, Three Stooges) ................................................................................ 150 3. Voice (Bette Midler) ...................................................................................................................... 150 4. Rhythm and gestures (Lombardo) .......................................................................................... 150 5. Setting (Vanna White, Motschenbacher) .............................................................................. 150 6. Clothes and posture (Vanna White)........................................................................................ 150 7. Tag line (Johnny Carson) ............................................................................................................. 150 8. Biographical facts (Jabbar) ......................................................................................................... 150 D) Protected interests .............................................................................................................. 150 1. Protection varies with the purpose of the appropriation .............................................. 150 2. Descendible in 12 states .............................................................................................................. 151 3. Alienable, by license or agreement ......................................................................................... 151 E) Remedies ................................................................................................................................. 151 1. Injunctions......................................................................................................................................... 151 2. Damages ............................................................................................................................................. 151 3. Impoundment and destruction of offending materials................................................... 151 4. Attorneys fees ................................................................................................................................. 151 F) Federal limitations............................................................................................................... 151

Copyright preemption .................................................................................................................. 151 First amendment ............................................................................................................................ 151 G) Supplementary and alternative doctrines .................................................................. 152 1. State...................................................................................................................................................... 152 2. Federal ................................................................................................................................................ 152 H) Possible justifications of right of publicity ................................................................. 152 1. Labor-Desert theory ...................................................................................................................... 152 2. Utilitarianism theory..................................................................................................................... 153 3. Personality theory .......................................................................................................................... 154 4. Social Planning theory .................................................................................................................. 154

1. 2.

XX. Limits on State Intellectual Property Doctrines ............................................. 155

A)

Constitutional limitations ................................................................................................. 155 1. 1st Amendment ................................................................................................................................ 155 2. Constitutional pre-emption (Art. I, Sec. 8, Clause 8) ........................................................ 155 B) Statutory preemption ......................................................................................................... 155 1. Preemption by Lanham Act - 39(b) ...................................................................................... 155 2. Preemption by Copyright Act 301......................................................................................... 156 3. Reverse engineering software under copyright law ........................................................ 156 C) Preemption by patent statute .......................................................................................... 157 1. Major cases ........................................................................................................................................ 157

I. II.

C------Final
A) Issue spotters 1. Know hard and easy issues; dont waste too much space on easy issues. B) Normative questions 1. Know the theories that underlie the law. 2. Dont just recapitulate the same theories rehashed in class do something creative and original.

III.

Introduction
A) Covers four general areas 1. Copyright law a. Grants to authors very broadly defined property interest in their original forms of expression 2. Patent law a. Gives more general protection to inventions of machines and processes 3. Trademark and unfair competition a. Enables businesses to shield distinctive names, labels, insignia and forms against mimicry or abuse
i.

By other firms or customers

4. Ancillary state doctrines a. Misappropriation

i.

Enables business sometimes to prevent other businesses from freeriding on their efforts

b. Trade secrets
i.

Reinforces ability of businesses to conceal from their competitors secret, commercially valuable information

c. Idea submission
i.

Sometimes protects the ability of people to propose ideas (scripts, plots, etc.) to another firm or organization without losing control or rights

d. Rights of publicity
i.

Enables celebrities to demand remuneration from people who want to make commercial use of their identities

B) Juxtaposition 1. Understand each of the areas better if you see them juxtaposed. 2. See them overlap in the internet, software, industrial designs, etc. C) Theories of intellectual property 1. Labor-Desert theories a. Lockes Theory of Property
i. ii.

Comes from Chapter 5 of Lockes second treatise Generative vignette (a) In the state of nature, before civil society, people could obtain natural property rights (to the earth) by laboring upon it. (b) A man comes to a common tract of land; he plows, plants, and harvests. The laborer acquires a natural property right to the crops and to the land to which he has bent his labor. Three qualifications:

iii. Limitations on natural property rights

(a) Sufficiency proviso: You can acquire property rights in this fashion only if you leave as much and as good for others. (b) Spoilage proviso: You can acquire property rights in this fashion only if the crops you reap dont rot in your barn. (c) Duty of charity: By acquiring property rights in this fashion you acquire a duty to be charitable to others.

iv. Transition to political society

(a) The state doesnt erase property rights the duty of the state is to determine, settle, enforce and respect natural property rights (b) Tacit agreement to the use of money lifts the spoilage proviso, since you turn excess crops into silver and nothing is wasted.

b. Application to IP
i.

Presumptively strong support for intellectual property rights (a) Labor is usually the largest input (b) Sufficiency proviso seems less applicable (c) Spoilage proviso seems irrelevant

ii.

Often invoked by American copyright law

c. Rationales
i.

Miscellaneous formal rationales (a) Necessary to effectuate right to means of subsistence (b) Religious obligation to subdue the earth and cultivate it for the benefit of life (c) Intuitions regarding self-ownership (d) Moral value of work (e) Intuitions concerning proportionality and fairness (f) Imagery of transformation (wild to domestic, raw to cultivated, chaotic to ordered, unproductive to productive)

ii.

Puzzle (a) If (a) and (b) are the primary justifications, they dont seem to have any application to IP. (b) If (d) and (e) are the primary justifications, then they are much stronger.

d. Meaning of Labor
i. ii.

Time and effort Avoidance theory see Hughes

iii. Value-Added theory see Gordon and Hughes (cf. Equity Theory

in Social Psychology)
iv. Premium on creative labor see Becker

e. Meaning of The Commons

i. ii.

Facts Language

iii. Cultural heritage iv. Ideas

f. Relevance and interpretation of the sufficiency proviso

i.

Strong v. weak form of the proviso (Gordon, Waldron) (a) Olympic Committees virtual exclusive use of the word Olympics

ii.

Removal of ideas from the commons (Hughes, Shiffrin, Yen)

iii. Addiction to intellectual products

2. Utilitarian theories a. All about incentives, on all sides. Want to incentivize good behavior, productive behavior. 3. Personality theories 4. Social planning theories IV. What

May Be Copyrighted?

A) Generally 1. Copyright does not protect the physical work, but the ideas expressed in a tangible medium of expression 2. Protected creations a. Literary works
i. ii.

Works of fiction and nonfiction Catalogues, directories databases (a) Must pass the originality test

iii. Software iv. Labels (aside from pure advertisements)

b. Musical works (compositions) c. Sound recordings d. Dramatic works, pantomimes, and choreographic works
i.

Choreography only since the 60s

e. Pictorial, graphic, and sculptural works

i. ii.

Paintings and photographs Applied art used in advertising and commerce (a) Only if it has aesthetic features independent of its utilitarian function

iii. Maps, charts, globes

(a) No protection for facts or ideas

(i) Location of boundaries, mountains (ii) Names of cities (iii) Newly coined place names; arbitrary symbols

(b) Protection for selection, arrangement, and presentation of elements (c) Residues of sweat of the brow theory (d) Scope of protection depends on degree of originality

f. Motion pictures and audiovisual works

i.

A work is a motion picture if it has: (a) A series of images (b) The capability of showing the images in a particular successive order (c) The impression of motion

ii.

AV works include filmstrips and slide sets

g. Architectural works h. Compilations

i.

Putting together a collection of materials, including copyrighted materials, creates a copyright in the compilation (but not the original individual works). (a) Copying the compilation without permission violates the copyrights (if applicable) of the individual works and the compilation

i.

Derivative works
i. ii.

Translations Musical arrangements

iii. Dramatizations iv. Fictionalizations v.

Motion-picture adaptations

vi. Abridgments

3. Unprotected creations a. Words and short phrases b. Ideas, procedures, processes, systems, methods of operation, concepts, principles, discoveries c. US Government works
i.

Cases (a) But you cant do whatever you want with Lexis cases, because of the Lexis EULA

d. Blank forms 4. Must be fixed in a tangible medium of expression a. Books, periodicals b. Video and audio recordings c. Computer punch cards d. Blueprints and buildings e. Usually automatic cant write an entire novel in your head. In some forms, must consciously be fixed, as with choreography. 5. Impermissible forms of expression for copyright protection a. Improvisations b. Unrecorded performances c. Unrecorded broadcasts d. Temporary retention in computer memory? 6. Characteristics not required for protection a. Novelty b. Aesthetic merit c. Truth d. Lawful content B) Copyright Protection for Fictional Characters 1. A well-developed fictional character is protected independent of the work in which that character appears a. That protection is strengthened if the character appears in more than one, especially a series, work b. Courts are probably really looking for audiences ability to recognize a discrete character 2. Evolution a. Characters evolve over time.

b. Do you get protection in all avatars, or only the latest version? 3. Field began in a sense with a dispute over Sam Spade (Maltese Falcon) 4. Examples a. Upheld uses
i. ii.

The Greatest American Hero Mercury Cougar/Pink Panther (a) Cant own a copyright in the idea of big pink cat, even if the users were attempting to create a character that resembled the Pink Panther

b. Uses held to violate copyright

i.

Look! Up in the sky! . . . Its a bird! . . .Its a plane! . . . Its . . . Crazy Eddie! Air Pirates comics, portraying Disney characters engaged in criminal and immoral activities

ii.

iii. E.T. Phone Home T-shirts iv. Honda advertisement

5. In class exercise Bond-like Honda commercial a. Plaintiff

i. ii.

Must first point to a copyright protection, then allege infringement Bond films are copyrighted, obviously. Infringement comes in the classic characteristics (a) Undercover spy, debonair, traveling with a floozy (b) More characteristics mean greater likelihood of getting a copyright, but make it harder to find infringement

iii. Denies the parody defense

(a) Must add something creative, expressive (b) Is commentary enough?

(i) Parody is generally accepted to be critical commentary that makes the original look ludicrous

(ii) This is an ad, not a purely creative work. Its attempting to profit through commercial activity, not creativity. iv. Real life claims

(a) Bond character deserves protection (b) Style of the film deserves protection
(i) Blending the genres of action, comedy, thriller, social commentary, etc.

b. Defendant
i.

Points to general archetype (spies from Mission Impossible, The Bourne Identity, Our Man Flint, etc.) Points to non-similar characteristics (a) Hair color, drives a Honda, etc.

ii.

iii. Points to lack of characterization/development in commercial

character
iv. Claims that the similarities are meant as a parody

(a) Meant to be funny (b) Exaggerated notable characteristics (c) Reversed notable characteristics
v.

Real life claims (a) Its a parody because, as everyone knows, in Diamonds Are Forever, Sean Connery was going bald and needed a toupee. Ad characters hair comment is pointing to that.
(i) If you dont get it, is it legitimate parody?

c. Holding
i. ii.

Plaintiffs won, ad was enjoined Plaintiffs held to enjoy a copyright in the character of Bond (a) Very well delineated character
(i) Very particular characteristics

iii. Infringement existed

(a) General concept and feel are substantially similar (b) Specific characteristics are substantially similar (c) No fair use defense
iv. Injury

(a) Conduct, if allowed to continue, would impair plaintiffs licensing deals

(i) Bond people were cutting deals with BMW, which would be worth less faced with a Bond knockoff Honda commercial

6. Parodies and advertisements a. Advertisements generally get less protection as parody, and fewer protections as plaintiffs as well. b. Ads fit into the subcategory of works known as commercial works c. There is a countercurrent that holds that ads get the same protection as any other works Bleistein. C) Architecture 1. Before 1990, copyright protection for architecture was just a subset of protections for 3-D objects as a whole (i.e., sculpture) a. Architects and assignees of architects had to be able to show that what was copied was aesthetic features separate from their function. b. Important standard was conceptual separability. 2. Damages largely assessed by what a reasonable royalty would have been 3. The way in which architects work, and are selected for jobs, means that the more distinctive their work is, the better off they are. Creates a need for IP protection. a. Or maybe theyre going to be hired even if their designs are knocked off there is a premium on the first to build a building of X design. D) Hypothetical 1. Fisher takes a photo on fully automatic settings (more or less random) and create an amateur greeting card. Send it to a friend, who goes to

the same place and frames a similar photo, sells it to Hallmark for ten grand. What rights do Fisher have? a. Fishers photo is protected
i.

Original ruling, just intentional photos taken with models, etc. Later extended gradually to all photos. Not a novel design/picture; trite photo of a boat with a sunset in the background

ii.

b. Infringement (Gross, 1914) thin protection

i.

Thickness of protection is attributable to the artistic contribution to the photo Access; copying

ii.

iii. Substantial similarity iv. total feel & concept v.

The scene is not protected it is, essentially, a fact, since it is a truelife photo and not a model.

E) Originality and Creativity 1. Possible meanings of originality a. Independent creation (required) b. Creativity (required, as per Feist) c. Novelty (not required, but sometimes relevant for other purposes) d. Intent to be original (not required) e. Noncommercial (not required, but cf. Harlan & McKenna) f. Artistic (not required)
i.

What is art? Aesthetic theory: (a) Formalism

(i) Something becomes art because of some aspect of its form

(b) Intentionalism
(i) Something becomes art by virtue of the intention behind its creation

(c) Institutionalism
(i) Focuses on the way in which an object is seen by the art world, a self-constituted customary group of people and institutions (museums, artists, galleries, critics, etc.) Something becomes art if it is recognized as art by this community. ii.

Why is artistic merit not required? (a) Bleistein neutrality justifications

(i) Judges lack expertise (ii) Democratic principle (iii) Liberalism/hostility to paternalism

(b) Objections
(i) Judges will do it anyway refined parodies will get more protection than scatological comedies (ii) Externalities (iii) Argument from future selves (a) People will thank us when theyre artistic and enlightened (iv) Social-planning theory

2. Sheldon v. Metro-Goldwyn a. Copyrights are not like patents in that there is no requirement that the work be both original and new.
i.

Maps, for instance, necessarily anticipate later works.

b. If a man independently wrote Ode to a Grecian Urn, he could copyright it, although others could copy Keats work. c. If the copyrighted work is original, the public domain is only important on the issue of infringement 3. Bleistein v. Donaldson Lithographing Co. a. Lithographs are copied for circus posters. Circuit court rules no infringement. b. S. Ct. rules that courts cannot be the arbiter of what is art. The fact that something is designed as an advertisement rather than a piece of nominal art does not prevent a copyright. 4. Feist v. Rural Telephone Co. a. Phone book company copies white pages of a local company to make a regional directory. b. Main touchstone for originality and creativity in copyright cases c. S. Ct. (OConnor) holds that facts are not copyrightable.
i.

Arrangements can be, but simple alphabetical listing isnt sufficiently creative.

5. Franklin Mint a. Strength of copyright protection should vary with the degree with which the work in question aspires to verisimilitude. b. The greater an art form deviates from the aspiration to represent the real world, the more protection it gets. c. Aspects of strength of protection
i.

One aspect of stronger copyright protection (different from thick/thin protection) is that its easier to prove the elements of infringement You get a bigger zone of substantial similarity independent of proof of infringement, the underlying set of things that are infringable will be larger.

ii.

d. Justifications
i.

Realistic depiction protections are much more dangerous in terms of the things they could remove from the public domain.

ii.

Counterarguments about bias, i.e. encouraging artists to move to abstraction, seem silly.

6. Scale models a. Do scale models of public domain works enjoy copyright protection? b. Cases are split some yes, some no. c. Considerations
i.

There can be some differences in the copying process. Errors can create differences that are copyright protected. (a) Scale models are protectable under this theory only to the extent that they arent perfect replicas.

F) Ideas, Facts, and Expression 1. Methods and systems are not copyrightable a. Baker v. Selden (1879)
i.

Facts: Plaintiff writes book setting forth a system of bookkeeping, including forms, which is copyrighted. Defendant publishes book of blank forms. Holding: Blank forms cannot be copyrighted. The Plaintiff has a valid copyright in the book, but cannot prevent others from making forms intended to be used in bookkeeping.

ii.

iii. Justifications:

(a) Problem with assigning copyright to useful things. Patent (b) If there is only one way of expressing something, that expression is not copyrightable.

2. Facts and ideas are not copyrightable a. Nichols v. Universal Pictures Corp. (1930)
i.

Facts: Plaintiff writes play about Irish/Jewish marriage. Defendant makes movie on similar theme. Holding: (a) Hand sets out a Pattern Test:

ii.

(i) Infringement depends on the level of abstraction at which you can fins substantial similarities. (ii) At the most general level, you have ideas, at the most specific you have a particularized set of plot and characters. (iii) Somewhere in the middle is the line between idea and expression.

(b) This approach does not account for the tone of a piece (Apocalypse Now v. Heart of Darkness; Grendel v. Beowulf).
(i) How does this interact with expiration of copyright? (ii) Should subsequent authors have to wait until time expires to make works based on the same story?

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

An extension of the basic reasoning behind Baker v. Selden.

b. Incorporates levels of abstraction reasoning

i.

Generally, categories are unprotectable; instances are protectable.

c. Morrissey v. Procter & Gamble (1967)

i. ii.

Facts: Defendant copies a rule for a sweepstakes. Holding: When there is only one way to express something, that mode of expression is not copyrightable. (a) Thin protection when there are only a few ways to express something: only verbatim copying protected. (b) Note application in computer context. (Manufacturers of compatible computers or compatible programs) (c) Analysis
(i) Deals with the zipper problem in Lockean theory (a) Allowing the first plaintiff to get a copyright leaves only a few alternatives for later authors; sooner or later you run out, and the last person gets shafted. Rather than putting the burden on that last guy, you dont let the zipper close and dont extend the shield (dont make the resource finite).

(ii) Sometimes merger isnt applied to cases in which there is only a limited set of expressions (a) Each one of the set gets protection, but only thin protection (against verbatim replications)

d. Scenes a Faire
i.

Copyright protection does not extend to the incidents, characters, or settings which are as a practical matter indispensable, or at least standard, in the treatment of a given topic. Haley (a) Facts: Novelists clash over the same basic theme. Plaintiff argued that Haley copied her material. (b) Holding:
(i) Rejects plaintiffs assertions. Parallelisms are dismissed because certain characters/features/etc are if not indispensable are common in a given topic. (Here, slaves escaping, being bought and sold, etc.)

ii.

4. Historical Facts and Research: a. Fruits of research not copyrightable (facts)

i.

Miller v. Universal City Studios (1981) (a) Facts: Reporter researches kidnapping & burying alive and writes book. TV movie is made based on the account. Reporter sues. (b) Holding: Because the movie centered on historical facts, there was no infringement.
(i) Theories and ideas not copyrightable (ii) Verbatim copying illegal unless merger or fair use apply.

5. Plots a. Nichols pattern test

i.

Infringement depends on the level of abstraction at which you can find substantial similarities. At the most general level, you have ideas, at the most specific you have a particularized set of plot and characters. Somewhere in the middle is the line between idea and expression.

ii.

G) Fixation and Formalities 1. H.R. Rep. No. 94-1476 (1976) (re: Copyright Act of 1976) a. Works to be protected must be fixed in a tangible medium of expression
i. ii.

Medium may be now known or later developed Fixation is sufficient if the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.

2. Formalities a. Notice
i.

1909 Act: Needed the year of first publication, the word Copyright (or abbreviation thereof), and the name of the copyright holder. 1976 Act (pre-Berne Convention): Copyright begins upon the creation of the work, not upon publication. Notice requirement maintained, but liberalized. Failure to give notice in a small number of copies would not result in forfeiture, nor would inadvertent large-scale omissions, so long as there were reasonable post-hoc efforts at notification. 1909 and 1976 Acts still apply with regard to works publicly distributed prior to March 1, 1989. Voluntary notice is encouraged through mitigation of damages in violations of copyrights without notice.

ii.

iii. 1989 present (Berne ratification): Notice requirement eliminated;

b. Publication
i.

1909: Protection began with publication. Works could be constructively published through registration with copyright office. 1976: Protection began with the creation of a work fixed in a tangible medium of expression; common law copyright is pre-empted. after 1989 (a) Publication matters in certain circumstances, listed on p. 371

ii.

iii. 1989 (Berne): Publication is no longer necessary with works created

c. Registration
i.

1909: Copyright ran 28 years; author could renew for another term with registration. 1976: No requirement to register, but some incentives. Must register before bringing an infringement action.

ii.

iii. 1989 (Berne): Copyright owners from another Berne nation need not

register their works prior to instituting suits. Registration is still required before suit for domestic owners.

d. Deposit
i.

Deposit is required for any work on which copyright is claimed. Failure to comply is punishable with a fine, but protection is not rescinded.

V.

Who is the Copyright Owner?

A) Title 17 1. 17 U.S.C. secs. 201, 202, 203, 204, 205 B) Works for Hire 1. Community for Creative Non-Violence et al. v. Reid (1989) a. Facts: Sculptor creates statue for CCNV for use in Christmas pageant. CCNV wants to take statue on tour. Sculptor objects. Both sculptor and CCNV file for copyright registration. b. Holding:
i.

Looks to the first category of works for hire, whether the author was an employee acting in the scope of employment. Court holds that sculptor was not an employee, and that CCNV is therefore not the sole owner of the copyright. Remands on issue of whether sculptor and CCNV might be joint authors under 101.

ii.

c. Rationale:
i.

Copyright ownership vests initially in the author or authors of the work. (a) The author is the person who translates the idea into a fixed, tangible expression entitled to protection.

ii.

An exception is made for works made for hire if the work is for hire, the employer is considered the author and owns the copyright. (a) Default rule; can be contracted around. (b) Work for hire determines initial copyright, the copyrights duration, owners renewal rights, termination rights, and other rights.

iii. Note: Copyright does not control physical custody. ( See 202; MMLJ

405) (If you send a letter, it is no longer yours, but you have the copyright). Giving a joint copyright would also have no effect. In Europe, when there is only one copy of the work, artists have a right to access.

2. A work is for hire if it is a. ROUTE 1: A work prepared by an employee within the scope of employment; or
i.

Multi-factor test for whether someone is an employee: (a) Hiring partys right to control; (b) Skill required; (c) Source of tools; (d) Location of the labor; (e) Duration of relationship (f) Right to assign additional projects; (g) Control over hours of work; (h) Method of payment; (i) Right to hire assistants; (j) Whether work is part of regular business of hiring party; (k) Employee benefits; (l) Tax treatment.

b. ROUTE 2: A specific type of commissioned works by independent contractors, when parties agree in writing
i.

Specified forms of work: (a) Collective work (b) Motion picture or other audiovisual work (c) Translation (d) Supplementary work (foreword, illustration, etc.) (e) Compilation

(f) Instructional text (g) Test (h) Answer to a test (i) Atlas
ii.

Sound recordings were briefly added; RIAA brouhaha.

3. Copyright law overrides contract law; you cant contract to make a work a work for hire unless it is one of the 9 types of work. a. You can contract to assign your copyright to someone else 4. Significance of designation as a work for hire: a. Ownership of the copyright b. Moral rights not applicable to works for hire (can, for example, melt down a work for hire) c. Duration of work for hire 95 years from first publication or 120 years from creation d. Renewal rights for old copyrights e. Termination provisions not applicable to works for hire 5. Joint works a. The authors of joint works are co-owners of the copyright.
i.

They each enjoy undivided ownership in the copyrighted work and may exercise independently the exclusive rights of 106. Profits must be accounted to each other.

ii.

b. A joint work is a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole
i. ii.

Strictly interpreted Courts require either contemporaneous collaboration or evidence that each author knew at the time of creation that their work would be integrated as a part of a unitary whole.

c. Joint authors are tenants in common equal and undivided rights to exploit the work, subject only to an obligation to account for profits to each other. d. Courts have said that there has to be an intent on the authors part to be joint authors. 6. Collective works a. A collective work is a work such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole. b. Unless the collective work people agree otherwise, the owner of the copyright on the collected work owns only the privilege of reproducing and distributing the contribution as part of the collective work, later revisions, or later works in the same series.
i.

Contributors retain copyrights in their contributions.

7. Testing the doctrine a. Labor

i.

Locke took for granted that fruits of labor of the servant belonged to the master. Implies a strong WFH doctrine. (a) But that was Locke writing in the 17th century about work upon the land . . . lets not get carried away.

b. Economic analysis
i.

Assume X working for Y generates one copyrightable work per year (a) Valuation of the work:
(i) 1% chance of $1,000,000 = $10,000 (ii) 10% chance of $100,000 = $10,000 (iii) 50% chance of $10,000 = $5,000 (iv) 39% chance of $0 = $0

(b) Expected value of the work is $25,000 (c) Who gets the copyright?
(i) Option 1

(a) X gets the copyright (b) Y pays X a salary of $75,000 (ii) Option 2 (a) Y gets the copyright (b) Y pays X a salary of $100,000 ii.

Pick a crisp rule to minimize uncertainty and litigation costs copyright to the party likely to be risk averse: (a) Typically the employer (b) Let parties rearrange the rule by contract

iii. To minimize transaction costs, select a default rule that assigns the

iv. Objections:

(a) Information asymmetry (b) Inequality of bargaining power (c) Remedy:

(i) Assign copyright to X and make the assignment inalienable (otherwise theyre contract out of it, as recording artists do)

(d) Softer remedy:

(i) Override assignments to Y when the objections are most salient v.

Complication (a) Avoid situations in which several people have joint rights to control a copyrighted work
(i) This is why movies are on the WFH works list (ii) Cf. treatment of defeasible fees and servitudes in real property

(b) Points toward allocating copyrights permanently to a single employer

(i) WFH status is most likely to achieve that

c. Ideology of creativity
i.

See below

C) Division and Transfer of Copyright 1. Previously a. 1909 act didnt allow subdivision of copyright transfer of all or nothing 2. Currently a. 201(d) (1) : ownership may be transferred in part or in full. Can be passed on by will, or as personal property under intestate succession. b. 201 (d)(2): any of the exclusive rights in 106 can be transferred and owned separately. The owners of the individual rights have the full rights accorded to the copyright owner. c. 101: transfer = assignment or exclusive license. d. 204: Copyright transfer must be in writing & signed by copyright owner. D) Termination of Transfers (MMLJ 407): 1. 1909 Act: Authors could reclaim copyright interests at renewal. 2. 1976 act a. 203(a)(3): inalienable right to terminate transfers between the 35th and 40th year from the execution of the grant for works created after 1977. b. 304 (c): For works in their second renewal term prior to 1978, authors or their families may terminate between the 56 th and 61st year of copyright protection. E) Problems 1. Oklahoma Natural Gas v. Larue (1998) a. Facts:
i.

Larue was employed as a safety monitor. Job included taking photographs to facilitate troubleshooting when there had been a problem. Got a call that the federal building in Oklahoma City had blown up, that possibly a gas leak was involved, and he had to take photos. Did so, with the company-supplied camera. Ascertains that a gas leak

ii.

isnt the problem, but remains on sight to turn off broken gas lines, if any, and to help out and take photos. Takes the famous photo of the firefighter and baby.
iii. With the companys understanding, the photo is distributed. Larue

eventually starts making memorabilia based on the image. Company gets uncomfortable, asserts a copyright, and demands that he turns over rights and revenues. They fire him and bring suit.

b. Discussion
i.

Work for hire? (a) In Larues favor:

(i) Little right to control (ii) High skill (iii) Regular business

(b) Factors in ONGs favor:

(i) Owned the camera (ii) Location (iii) Duration (iv) Control over hours (v) Method of payment (salary) (vi) Hire assistants (vii) Benefits & taxes ii.

Larue is clearly an employee, but the photo was taken on his own time.

c. Holding
i.

Court ruled in favor of ONG, with minimal and cursory analysis.

2. Casebooks prepared by professors a. All professors keep the copyrights in their scholarship; should they? b. No tenure without publishing c. University pays for many of the costs
i.

Library, secretaries, copy costs, etc.

3. Thomas v. Larson (1998) a. Facts:

i.

In 1989, Billy Aronson (playwright) and Larson (composer) began to compose Rent, a rock opera. They worked together for a couple of years, then parted ways. Larson wanted to carry on and Aronson wanted out; they came to an arrangement. (a) Aronson would get some of the credit for the original ideas and credit.

ii.

Larson has his script by 1992. Shows it to the New York Theater Workshop, who likes the play but thinks it needs some work. Encourages him to hire a book write to help him touch it up; Larson refuses. The NYTW agrees to put on the play in its original form as a trial run. Critical reviews are enthusiastic, but agree with the original assessment that it needs a lot of work. paid $2,000 by the NYTW. She goes to his apartment every day; he sits in front of the computer, she walks around, and they talk and workshop the play. Over the course of the next 6 months, the play is substantially better, substantially transformed, and substantially improved.

iii. NYTW hires Thomson, a playwright and professor at NYU. Shes

iv. New play is a smash hit. On the night after the final dress rehearsal,

Larson dies suddenly. The remaining participants carry on. Thomson feels left out; she wants more for her work. The Broadway producers giver her $10,000. She goes to the heirs, and claims to be a coauthor. Acknowledges that the heirs inherited the copyright; she asks to share in the copyright, especially the royalties. They offer 1%, negotiations break down; she brings suit.

b. Discussion
i. ii.

Not a work for hire; shes an independent contractor. As a joint work, perhaps she became an author as the play changed dramatically. She made have added enough independent copyrightable material to share in the copyright in the finished work.

iii. Joint author status would grant her full rights to the work, which

seems unfair; he spent a hell of a lot more time and effort than she did.
iv. No intent on his part to be a joint author.

c. Holding
i. ii.

Court finds that it isnt a joint work, but neither is it a work for hire. Rules that she might own copyright in the lines and components that she added, which would allow her to enjoin the performance of the whole thing.

d. Outcome
i.

Following the courts recommendation, the plaintiffs file a second suit; parties settle for an undisclosed amount.

F) The Ideology of Creativity 1. Martha Woodmansee On the Author Effect: Recovering Collectivity a. Discusses the romantic conception of the author, which grew up in the late 18th and early nineteenth centuries.
i.

Discusses in particular Samuel Johnson, and his relationship to his works. Of the sermons he wrote for ministers, he says, I have been paid for them, and have no right to enquire about them.

ii.

b. She says that these corporate attitudes toward writing are resurfacing today, and that modern technology (i.e. the internet) is challenging ideas about proprietary authorship. c. Says that feedback through hypertext is revitalizing an idea of authorship popular in the Middle Ages, and is fulfilling Foucaults criticism of the idea of original authorship. d. (Presumably, all of this should lead us to be less critical of the WFH doctrine). 2. Peter Jazsi Toward a Theory of Copyright: The Metamorphoses of Authorship. a. Discusses irony of using the romantic notion of authorship (via copyright law) to justify the grant of rights in a work to the employer, rather than the employee. b. Corporations seen as the motivating factors or inspiration behind the work. c. The WFH doctrine focuses on one idea of romantic authorship (control/inspiration) while marginalizing others. VI. What

Rights are Encompassed by Copyright Ownership?

A) Statutory entitlements and infringements thereof 1. Structure of the statute a. Generous set of entitlements ( 106)
i.

Can be divided and conveyed almost without limit

b. Long list of exceptions ( 107-188)

i. ii.

Some in the form of outright exceptions Some in the form of compulsory licenses

2. 17 U.S.C. 106 grants exclusive rights a. to reproduce the copyrighted work in copies or phonorecords;
i.

Production of material object in which copyrighted work is reproduced in fixed form (a) Either mechanical reproduction, or

(b) Having the copyrighted work in mind when creating a substantially similar embodiment (even subconsciously)
ii.

Most fundamental right to prevent others from making exact or substantially similar reproductions by any means, known or unknown, from which the work can be perceived, reproduced, or otherwise communicated, directly or with the aid of a machine or device. ( 101)

iii. Not limited to exact reproduction; rather it is a broad grant of the right

iv. To prove violation of 106(1), one must show both

(a) Copying
(i) May be shown with (a) Direct evidence (witnesses or defendants admission) (b) Evidence of access plus substantial similarities between plaintiffs work and defendants work (c) Striking similarity between the two works (circuits split on whether this is sufficient) (d) Common errors in the two works (ii) On this issue, expert testimony is appropriate (iii) Not necessary for plaintiff to establish that the copying was intentional

(b) The copying went so far as to constitute improper appropriation

(i) The material copied from the plaintiff was protected subject matter; and (ii) There was substantial similarity of expression (a) Person whose reaction is critical ordinary lay hearer or reader of the target audience (b) Accordingly, expert testimony is inappropriate (although this principle is deteriorating) (c) Doctrine of fragmented literal similarity

b. to prepare derivative works based upon the copyrighted work;

i. ii.

DWs incorporate, recast, transform, or adapt copyrighted works Usually involve copying + alteration

(a) Exception: tile cases, split in circuits

(i) Mirage (ii) Lee iii. How much transformation is required?

(a) Appears or works differently (b) Consumer demand for the altered version

c. to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
i. ii.

Right to control public distribution of each copy Exception first-sale doctrine ( 109) once you own a copy, you can sell it, rent it, destroy it, etc. (a) Exception to the exception: commercial rental of sound recordings or computer programs (109(b)(1)(a))

d. to public perform literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works;
i.

Public a place open to the public or where a substantial number of persons outside the circle of family or acquaintances are gathered Complex guidelines for playing music in stores, etc. - 110(5)

ii.

iii. Expansive definition of performance

e. to publicly display literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work
i.

Narrow definition of display (a) Does not preclude display by owner of the object to viewers on site

f. in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission 3. Arnstein v. Porter (1946) a. Facts: Plaintiff claimed defendant nicked his songs. Court ruled for plaintiff. b. Holding: Either evidence of access and some similarities, or no access and striking similarities, are required to show copying.
i.

Also held that expert opinion was immaterial

c. Analysis:
i.

Majority indicates that you have to have two elements to establish infringement copying and improper (unlawful) appropriation. Circumstantial proof of copying would b access and similarity. Sliding scale with no similarity, there can be no infringement, but with overwhelming similarity, access can be implied. (a) Copying
(i) Copying may occur but be unintentional (ii) Proof of copying by deliberate error r common mistake can arise when a creator of a factual work plants a minor error in the work to trap copyists.

ii.

(b) Improper appropriation

(i) Can be an objective and/or subjective test (ii) Objective test analytically dissects the objective manifestations of creativity (plot, themes, dialogue, mood, setting, pace, sequence, characters) (iii) Subjective perspective is the trier of facts subjective opinion on improper appropriation (iv) The nature of the work determines how much must be taken to establish appropriation; generally, under 106, copying in substantial part suffices.

4. Steinberg v. Columbia Pictures Industries, Inc. (1987) a. Facts:

i.

Steinberg sued the producers, promoters, distributors and advertisers of Moscow on the Hudson. Alleging that the promotional poster infringed on his copyright on an illustration that he drew for the New

Yorkers March 76 issue; defendants alleged fair use as a parody, estoppel, and laches.
ii.

Columbias executive art director acknowledged that he specifically referred to Steinbergs poster, and directed the artist he hired to use it as a reference as well.

b. Holding:
i.

Access is well established here. The sole issue is substantial similarity, which is a question of law and/or a question of fact. (a) Since proof of access is here, there should be a lessened standard of similarity required

ii.

Some discussion of substantial similarity even a small portion of each work coinciding can create substantial similarity (a) Held for plaintiff

5. Limitations on the exclusive right to copy a. 108: exempts public libraries and archives from copyright liability if they make only one copy of a work at a time, assuming that the copy is made for specified purposes.
i.

Copies can be made for preservation and replacement of existing works, but only if the work cannot be purchased for a fair price as a replacement. Can make single copies for noncommercial users, so long as the library does not engage in the systematic reproduction or distribution of copies. copyrights on site, so long as the library posts conspicuous warnings notifying users of copyright laws.

ii.

iii. No liability for the actions of their patrons, even those violating

b. 112 and 118(d): permit broadcasters to make ephemeral or ancillary copies of certain performances and displays during the course of a broadcasting. c. 115: permits anyone to record a musical composition upon the payment of a royalty determined by a formula specified in the statute.
i.

Artists cannot record anothers musical composition if it hasnt been recorded with permission at least once before

ii.

New artists cannot make substantial changes in the work recorded, except to the extent necessary to adapt the work to a new genre.

d. 1008: authorizes consumers to make copies of sound recordings for noncommercial use
i.

In exchange for this immunity, manufacturers of DAT decks and tapes must pay a royalty to the Copyright Office for distribution to copyright owners, as per the Audio Home Recording Act of 1992.

6. Goldstein: Derivative Rights and Derivative Works a. Says that protecting derivative works is necessary in some instances to ensure that adequate incentives are given to copyright holders to develop new works.
i. ii.

Authors need protection in case a movie is made from their book, etc. Maybe not needed, since there would be some protection anyway in characters, settings, scenes, etc.

7. Midway Mfg. Co. v. Artic International, Inc. (1983) a. Facts: Artic was selling boards to speed up Galaxian and to emulate Pac-Man. b. Holding:
i.

Artic claimed that speeding up Galaxian was not infringement like playing a 33 RPM record at 78 RPM. Court didnt find the analogy persuasive; speeding up the game makes it more challenging and exiting, and increases the revenue per game. Copyright owners have the exclusive right to prepare derivative works based upon the copyrighted work under 106(2). and requires some creative effort. The owner of the copyright on the game should be entitled to monopolize it on the same theory that he is entitled to monopolize derivative works under 101.

ii.

iii. A speeded up game is substantially different from the original game,

8. Litchfield v. Spielberg (1984) a. Facts: Litchfield claimed that she submitted a screenplay called Lokey from Maldomar, which was the basis for E.T. b. Holding: Held that the scripts were not substantially similar. Question was whether it was a derivative work.
i.

Litchfield argued that 106(2) expanded the definition of derivative works to include any work based on a copyrighted work. This is not just wrong, it is crazy. work if the material which it has derived from a prior had been taken without the consent of a copyright proprietor of such prior work.

ii.

iii. A work is a derivative work only if it would be considered an infringing

9. Quality King Distributors, Inc. v. LAnza Research International (1998) a. Facts: LAnza makes shampoo, and copyrights the labels. Importer/exporter buys up a bunch of cheap pallets for export, reimports them, and charges the cheap export price. LAnza sues. b. Holding
i.

Held for the distributors.

10. Mirage Editions v. Albuquerque A.R.T. Co. a. Facts: Mirage had an exclusive deal with Nagels widow to publish his art. A.R.T. bought some coffee-table books of his stuff, cut works out, glued them onto ceramic tiles, and offered the tiles for sale in retail shops. b. Holding: Oh yeah, thats infringement. Jesus, what were they thinking?
i. ii.

A.R.T. didnt copy Nagels works, it just mounted and resold them. First sale doctrine doesnt protect A.R.T.; although it can purchase a copy and then alienate its ownership of the book, the right to transfer applies only to the particular copy of the book that was purchased and nothing else. of other rights does not grant the right to prepare derivative works.

iii. The mere sale of the book to the appellant without a specific transfer

B) Copyright in music 1. Object of protection a. Musical works (composer)

i.

Entitlements (a) Reproduction (inc. piano rolls, etc.)

(i) Make a substantially similar composition (ii) Make a mechanical copy of the song

(b) Derivative works (new compositions, new lyrics) (c) First distribution (d) DPD (e) Public performance
(i) Radio, etc. managed in the US by ASCAP, BMI, SESAC

b. Sound recordings
i. ii.

First distribution (clear) Reproduction (limited)

iii. Derivative works (limited) iv. Public performance (limited)

(a) Added in 1996, modified in 1998; public performance protection in digital audio transmissions only (b) If you publicly perform by playing a CD on your jukebox, youre fine with regards to the sound recording (although you might have to pay the composer, in theory). Radio stations as well fine with regards to the recording industry. (c) This applies mostly to webcasting.

2. Exceptions and limitations a. Fair use ( 107)

i.

See below

b. AHRA ( 1008)
i.

Restrictions on digital audio recording devices (a) Makes it illegal to import, manufacture, or distribute digital audio recording devices that do not incorporate technological controls to block digital copying.

ii.

Compensation of copyright owners (a) Media manufacturers must pay a percentage of their transfer prices (two to three percent) to the royalty pool, which is distributed to owners of musical works and sound recordings based on the prior years sales and airtime. Administered by the Register of Copyright.

iii. Limited immunity for noncommercial home taping iv. Violations of the AHRA are not copyright violations, but rather a

separate regime.

c. Cover license ( 115)

i.

Once a recording of a musical work has been made and distributed to the public: (a) Any person may make additional phonorecords for distribution to the public
(i) Provided she pays a compulsory royalty (ii) And doesnt alter the melody or character

(b) For performances, even cover performances, you still need a license
ii.

In context (a) Verbatim copies are illegal (b) Covers are legal as long as you pay a compulsory license fee (c) Copied, substantially similar, but changed in fundamental character, is illegal unless its fair use (d) Not substantially similar or copied is legal

iii. Managed in the US by Harry Fox Agency

d. DPRA limitations ( 114)

i.

Digital audio transmission public performance right for sound recordings Three levels of digital audio transmissions: (a) Level 1: Exempt transmissions
(i) Non subscription broadcast transmissions licensed by the FCC (ruled NA to webcasts, district court in Philly agrees) (ii) Limited set of retransmissions (iii) Feeds incidental to exempt transmissions (iv) Music in stores (v) Transmissions to business establishments

ii.

(b) Level 2: Statutory licenses - copyright owners must accept compulsory licenses set by an arbitration panel
(i) Eligible non-subscription transmissions (a) Primary purpose is to provide audio entertainment (b) Non-interactive (c) Diverse programming (d) No advance programming schedule (e) Contains copyright management information (f) Minimum duration rules (g) Must use all available technologies to frustrate copying

(c) Level 3: Freely negotiated licenses - copyright owners may set their own license fees
(i) Interactive services: (a) Pay-per-listen systems (b) Services that transmit digital audio on demand

e. Other compulsory licenses ( 111, 116A, 118, 119)

i. ii.

118: Public education broadcasters 116A: Jukeboxes

iii. 111: Secondary transmissions by cable companies iv. 119: Secondary transmissions by satellite carriers

f. Explanations for the compulsory licenses

i.

Overcome prohibitive transaction costs (a) E.g. cable retransmissions

ii.

Neutralize excessive market power (a) E.g. cover license (in its original form)

iii. Favor certain kinds of uses

(a) E.g. public broadcasters license

g. Example
i.

Handout diagram

C) Public performance and display rights 1. Copyright owners have an exclusive right to performance and display; for profit requirement has been stricken. 2. Architecture isnt covered by display, and performance coverage is limited for sound recordings. 3. Any physical act taken to make a work perceivable to the viewer or listener, or cause a work to be reproduced (even in a transient, temporary form) is a performance. 4. Owners of a copy are allowed to show it to viewers present at the place where the copy is located a gallery showing is OK, a movie performance is not. 5. Publicly means a. a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered, or b. transmitting or communicating a performance or display to a place such as (i) or to the public. D) Contributory infringement 1. Encouraging or assisting a third party to infringe a copyright 2. Requires knowledge, whether actual or constructive, of the infringement E) Digital piracy 1. Audio Home Recording Rights Act of 1992 a. Three provisions
i.

Restrictions on digital audio recording devices (a) Makes it illegal to import, manufacture, or distribute digital audio recording devices that do not incorporate technological controls to block digital copying.

ii.

Compensation of copyright owners (a) Media manufacturers must pay a percentage of their transfer prices (two to three percent) to the royalty pool, which is distributed to owners of musical works and sound recordings

based on the prior years sales and airtime. Administered by the Register of Copyright.
iii. Limited immunity for noncommercial home taping

b. Violations of the AHRA are not copyright violations, but rather a separate regime. 2. Digital Millennium Copyright Act of 1998 a. Prohibits the circumvention of copy protection systems and the removal or alteration of copyright management information conveyed along with a copyrighted work. F) International issues in copyright 1. GATT, NAFTA, Berne 2. Berne and GATT provide statutory minimum protections a. Duration life plus 50 for joint and single works b. Scope of exclusive rights literary and artistic works c. Rights conferred d. Right to prepare derivative works 3. Beyond this, each country can establish its own regime. Any rights in excess of the minimums must be granted to everyone, even foreign nationals of countries with lesser protections. G) First Sale 1. First sale doctrine allows an owner of a copy to transfer or dispose of it, but not to transform it into something else (a la Clear Play or Clean Flicks) H) Duration 1. Statutes a. 1909 Act: Employed a dual term of protection; first 28 years from first publication (with notice), renewable for an equal term Failing to renew registration in the last year resulted in transfer to public domain. b. 1976 Act: Unitary term of life plus fifty years (for corporate, anonymous, or pseudonymous works, or works for hire, 75 years from publication or 100 years from creation, whichever came first.)
i. ii.

Why the 75-100 distinction? Why pseudonymous works?

c. 1998 Sonny Bono Copyright Term Extension: Added another 20 years, effectively keeping Mickey Mouse and the George and Ira Gershwin works out of the public domain.
i.

Detailed table, p. 426

2. Eldred v. Ashcroft (2003) a. Holding (Ginsburg)

i.

Does Congress have the authority under the Copyright Clause to extend the terms of existing copyrights? (a) Yes, under text, history, and precedent.
(i) Textually, the clause calls for a limited time, and 70 years is literally a limited time. (ii) Beginning in 1790, Congress has applied changes in the copyright regime to existing as well as new copyrights, in order to govern evenhandedly the copyright regime. (a) Its the same with patents (iii) The Court has never ruled directly on copyright extension, but has ruled that patent extensions may apply to existing works. Analogous.

ii.

Did Congress have the authority to extend the terms of new copyrights? (a) Substantial deference to Congress under Sony Corp. of America v. Universal Studios (b) The extension was purportedly motivated by a desire to bring American copyright law into harmony with European law
(i) Seems to be in conflict with the text text says signatories give their own protections to everyone, including foreigners; decision says the EU was denying its longer terms to non-EU citizens works. WTF?

(c) Rational extension, not to be second-guessed by the Court.

iii. Do continual extensions constitute unlimited terms?

(a) No. A perpetual copyright regime is clearly not the situation before us. An extension is an extension, nothing more. (b) No significant threshold crossed with the CTEA.

b. Dissent (Breyer)
i.

The extension is practically perpetual, granting copyrights to heirs, assigns, and corporate interests primarily. Impedes progress and discourages innovation. failing is so severe in degree that its Constitutional.

ii.

iii. Legal distinctions are often a question of degree, and in this case the

I) Fair Use 1. Statutory factors a. Title 17 107 defines fair use with the following characteristics:
i.

the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (a) Focuses on defendants action (b) Commercial activity is disfavored
(i) Sony indicates that advertising is especially bad (ii) Commercial is a murky term (iii) Might mean: (a) Defendant is making money (b) Something is flowing in the stream of commerce (c) Theres a transaction (d) Its a large-scale issue (lots of people are doing it) (e) Threatens the plaintiffs ability to make money

(c) Transformative uses are favored

(i) Principal of the Campbell case

(d) Especially parody

ii.

the nature of the copyrighted work; (a) Focuses on plaintiffs work (b) Fictional works are entitled to more protection than factual works (Sony; Campbell)

(c) Unpublished works are entitled to more protection than published works (Harper, Salinger)
(i) Softened by amendment to factor 4 iii. the amount and substantiality of the portion used in relation to the

copyrighted work as a whole; and (a) Sony deemphasized this factor (b) Harper resurrected this factor
(i) Shift to qualitative, not quantitative inquiry

(c) Campbell tempered Harper

(i) Parodists need to invoke the original may justify taking even the heart of the plaintiffs work iv. the effect of the use upon the potential market for or value of the

copyrighted work. (a) Applied with the assumption that the use will become widespread. (b) Sony called this the most important factor (c) Ambiguity of potential market
(i) Sony takes a narrow view (ii) Harper & Campbell seems to take expansive view

(d) Only adverse impact resulting from substitution is cognizable

b. Unpublished works are still subject to fair use 2. Jurisprudence a. Three S. Ct. cases on fair use:
i.

Sony (a) Studios sue to stop Sony from selling VCRs. (b) Holds that timeshifting copyrighted programs is a fair use.
(i) Distinguished from librarying, which the Court largely agreed was illegal.

ii.

Harper

(a) Time cancels its agreement with Harper to excerpt Fords autobiography after it gets scooped (b) Held, not fair use
iii. Campbell

(a) 2Live Crew samples Pretty Woman (b) Unanimously held to be fair use

b. Other cases
i.

Dr. Seuss case (a) OJ Simpson Cat in the Hat parody

(i) Definitely copying. Definitely improper appropriation (in copying the hat 13 times).

3. A&M Records, Inc. v. Napster a. Court says that there has to be a significant non-infringing use to its product (analogous to timeshifting in Sony). Not the main use, just a significant use. b. Shows that Sony has been passively overridden by rising technology. Kazaa and later cases will be decided based on Napster rather than Sony. 4. Castle Rock Entertainment v. Carol Publishing Group a. Facts: Producer (and copyright holder) of Seinfeld sues the publishers of a book of Seinfeld trivia. b. Holding: Copying occurred, and is not covered by fair use. J) Moral rights 1. Introduction a. Moral rights (droit moral): right of artist to control his works in variety of ways. b. Not all moral rights are fully protected, even in countries such as France. c. European countries are more prone to enforce moral rights, in part because of art. 6 bis of the Berne Convention. d. United States didnt sign Convention for long time, largely because of objections to this provision, but eventually passed VARA to come into compliance with it. 2. Types of moral rights a. Integrity: right not to have work mutilated or destroyed. b. Attribution (paternity): right to receive credit for work, right to remain anonymous/pseudonymous, right not to have others take credit for work, right to not be named as author when the work is modified. c. Disclosure (divulgation): right to control when and how work is made public (Harper & Row). d. Withdrawal: right to withdraw work from circulation that artist feels is no longer representative (usually requires payment) (rarely invoked).

e. Excessive criticism: right not to be excessively criticized (never covered). f. Droit de suite: right to receive resale royalty (banned by first-sale doctrine, but covered under California state law). 3. In the United States a. Berne
i. ii.

Includes attribution and a version of the right of integrity Implemented in VARA

b. Visual Artists Rights Act (VARA; 106A)

i. ii.

Applies only to visual art (see below for definition) Rule is subject to fair-use doctrine ( 107) and supplements right to prepare derivative works ( 106). right of integrity (distortion is OK unless theres injury to reputation; destruction is OK unless work is of recognized stature). Other moral rights are not included.

iii. Rule contains right of attribution, right of false attribution, and curious

iv. Rights last for life of artist only (as opposed to life plus 50 years), and

can be waived (but not transferred).

v.

Work of visual art (a) Included: painting, sculpture, photos, and so on, produced in quantities less than 200. (b) Excluded: posters, charts, movies, various forms of advertising (pace Bleistein), applied art (= sculpture attached to functional object; rejected in Carter); works for hire, and anything not copyrightable.

c. Alternative protections
i.

Common law (a) Defamation: behavior of modifier is analogous to false statement injurious to artists reputation. (b) Right of privacy: artist can vindicate right against false attribution, right to anonymity/pseudonymity.
(i) False light tort, tort involving the disclosure of private facts

(c) Unfair competition: artist can particularly sue for reverse passingoff = selling someone elses thing represented as his own.
(i) Torts of passing off and reverse passing off, plaintiff is representing his work as mine or my work as his

(d) Contract interpretation: artist can sue on contract between him and first purchaser.
ii.

State law (a) Several states had state art protection statutes before VARA, which still exist.

4. Policy arguments a. Theories that bear on moral rights problems

i.

Increased protection for artists (a) Personality theory of property (b) Art preservation (social planning) (c) Economic efficiency (Hansmann & Santilli)

ii.

Decreased protection for artists (a) Preserving room for parody (Yonover) (b) First-Amendment concerns (c) First sale doctrine & art as commodity (Lee)

b. In favor of increased protection of moral rights

i.

Personality theory of property: protection against modification or misrepresentation is essential to self-fulfillment of artists ( 3(A)). Art preservation (social-planning theory): its bad from social standpoint if stock of artistic products is reduced ( 3(B)).

ii.

c. Against increased protection of moral rights

i.

Preserving room for parody: many defenders of parody suddenly vanish in field of art, even though rationale is equally applicable. 1a. concerns (a) Copyright protection is generally thought not to infringe 1a., since its in Constitution and contains idea-expression and fair-use limitations to protect 1a. values.

ii.

(b) However, copyright protection is here being extended well beyond its traditional contours.
iii. First-sale doctrine and art as commodity

(a) Lee: rejects Mirage, on ground that right to derivative works would otherwise reach further than VARA in terms of moral rights for producer of more than 200 prints.

K) Personality theory (Radin; Hughes) a. Important (natural?) human needs served by private property rights:
i. ii.

peace of mind, privacy,

iii. autonomy, iv. self-realization as social being, v.

self-realization as individual (important),

vi. security and leisure, vii. responsibility, viii. identity (important), ix. citizenship, x.

self-expression (important).

L) Reward theory 1. Intellectual products are public goods a. Can be used an enjoyed by an infinite number of people without being used up b. Difficult to exclude people from access to the good c. Creates a danger that an inefficiently low number of such goods will be produced 2. Possible responses to public-goods problem a. Government provides the good
i.

Lighthouses, armies, etc.

b. Government subsidizes production of the activity

i. ii.

Scientific research, NEA Relatively common; pre-activity

c. Government issues prizes

i. ii.

Reward system for atomic-energy inventions Post-activity; rarer

d. Government confers monopoly power on producers

i.

19th century toll roads, IP rights

e. Government assists private parties in increasing excludability

i.

Trade-secret law, anti-circumvention laws

3. Effects of partial price discrimination a. Positive

i. ii.

Reduces deadweight loss Increases ration between incentive for creativity and deadweight loss, enhancing consumer welfare the intellect

iii. Increases the likelihood that all persons will have access to works of

b. Neutral
i. ii.

Enables creators to make more money Indeterminate impact on consumer surplus

c. Negative
i. ii.

Increases transaction costs Distortions caused by 2nd degree PD (a) Setting prices and letting consumers sort themselves

iii. Possible invasions of privacy

(a) 3rd degree PD getting information about consumers and sorting them

iv. Possible threat to cumulative action

M) Remedies a. Copyright law is largely set up as property rules, but has some elements of liability rules (compulsory licensing, liquidated damages, fair-use doctrine). b. Property rules are superior when courts lack information about valuation, as in many copyright cases. c. Also available: criminal sanctions, punitive damages, injunctions. VII.

Introduction to Patent

A) Recurring policy arguments: 1. For generous interpretation of patent rights a. Provide inventors full and fair return, b. Maximize incentives for creativity c. Implicit analogies to criminal statutes. Patent infringement is immoral, so can chill borderline activity 2. For narrow interpretation of patent rights a. Distrust of monopolies (because they produce deadweight loss) b. Certainty and predictability (to provide crisp boundaries so people know what they can, and cannot do) c. Dissemination of ideas to the public (rapidly) d. Foster competition e. Justices Douglas and Black championed these arguments in the 1960s and 1970s B) Statutory requirements for obtaining patent protection 1. Patentable Subject Matter (PSM): Invention must constitute PSM. 2. Novelty: Invention has not been anticipated in practice or knowledge. 35 U.S.C. 102. 3. Utility: Invention must be useful (very low threshold). 101. a. Least important of the preconditions

4. Non-Obviousness: Also called non-triviality. Invention must represent significant advance on prior art 103. 5. Enablement: Description of invention in patent must allow PHOSITA (person with ordinary skill in the art) to construct the invention. 112. 6. Statutory Bars: Bar patentability based on too long a delay in seeking patent protection. C) Rights conferred by a patent 1. Essentially, patents confer for a number of years the right to exclude others from: a. Making b. Using c. Selling d. Offering for sale e. Or importing 2. Term was 17 years until 1995, when GATT-TRIPS adherence extended it to 20 years from the date the patent application is filed. a. In practice, then, a patent is in force for 20 years minus the time spent in the application (prosecution) process 3. The exclusionary right is a negative right a. Does not grant an automatic affirmative right to do anything
i.

I.e., pharmaceutical patents dont bypass the FDA review process

b. A patented invention may itself be covered by a pre-existing patent

i.

Blocking patents I invent an improvement to a general, preexisting method that is already patented. I can exclude the prior inventor from using my improvement, but he can exclude me from using the general process. Like any good compromise, we both get screwed.

D) History of the patent system 1. History of Patent System: (MMLJ 121- 35). a. Evolution of Patent System from Britain to US: Statute of Monopolies of 1624 Forbade monopoly rights in goods except for

the purpose of fostering new inventions. This early example of desire to encourage invention was followed by evolution of administrative British patent system (no patent examination) into a system requiring a specification in the patent description sufficient to allow others skilled in the art to learn from the patented innovation. b. Evolution of US Patent System: Constitutional Constitution of 1789 resolved to create patent system rooted in Article I. System would confer exclusive rights only, and 1836 Jefferson revisions required patents to be examined (not just registered w/o scrutiny). Novelty and non-obviousness requirements instituted in mid-19th c. to limit the number of patents being granted. Scope of protection waxed and waned depending on level of anti-competitive assertions of patent rights by growing industries.
i.

WWII required mandatory cooperation and little exclusivity re: patent rights. 1952 Patent Act moved toward stronger protection, which was ignored in the 1960s. The creation of the Federal Circuit in 1982 marked the beginning of expansion in scope of patent rights. GATTTRIPS provision represent recent efforts to internationalize IP and patent protection.

E) Patent coverage 1. Process patents a. Surgical procedures

i.

Coverage not extended to surgical methods

b. Business methods
i.

Coverage extended to business methods generally

c. Athletic moves
i.

Numerically insignificant, but conceptually important

2. Product patents a. Machines

i.

Atomic weapons (a) Exception to patent law not patentable

b. Compositions of matter
i.

Chakrabarty extends products patents in re animals and bio-products

ii.

PPA and PVPA extend on bio-products and plants

iii. Naturally occurring substances

(a) But only when purified and exhibiting new qualities compared to the raw natural product

c. Manufacture F) Intersection with Trade Secret 1. For some actors, especially software engineers, there is a choice between patent protection and trade secret protection. 2. Trade secret requires making the X secret, while patent protection requires making it known. G) Patent litigation 1. Obtaining and Litigating Patents a. Patent Prosecution: Refers to process whereby innovator (or her attorney) submits patent application to Patent & Trademark Office (PTO) for examination and issue. b. Patent Litigation. There are four types of patent litigation:
i.

Interference. This is a special proceeding before the PTO Board of Appeals (with right of appeal to Federal Circuit) in which PTO resolves a priority dispute between two inventors who claim they were the first to invent the innovation and therefore are entitled to patent it. Declaratory Judgment Action: People who fear being sued for patent infringement (usually in response to threat of suit) may seek declaratory judgment that the patent at issue is invalid or that their conduct does not infringe the patent. These actions are usually met with counterclaims of infringement and proceed in regular federal courts. who object to the importation of products that infringe their patents may ask the ITC to prohibit the importation on their behalf. The ITC may block the importation of infringing products or products made by processes that are protected by US patents. These are known as Section 337 actions.

ii.

iii. International Trade Commission (ITC) Proceedings: Patent owners

iv. Patent Infringement Suits: These are brought in federal courts and

allege that some product or process infringes the claims of the patent. Such suits are met with counterclaims of patent invalidity.

VIII.

What may be patented?

A) Patentable Subject Matter 1. Congress grants patent entitlements pursuant to its authority under Article I, sec. 8, cl. 8 of the Constitution (the Patent Clause). a. The Patent Clause is permissive, not mandatory, regarding the scope of federal patent protection and permits a broader range of protection than Congress currently provides in the form of the following types of patents:
i. ii. iii.

Utility ( 101 et seq) Plant (161-64) and, Design (171-73) patents. (a) 35 U.S.C. s. 101 defines as patentable subject matter:
(i) Any new or useful process [covered by process patent], machine, manufacture, or composition of matter [all covered by product patents], or any new and useful improvement thereof . . . .

2. Cases defining PSM: a. Diamond v. Chakrabarty, 447 US 303 (1980) (MMLJ 136).
i.

Patent for creation of bacteria that eat up crude oil from oil spills. Three claims in patent: (1) claim process for producing the bacteria; (2) claim product of inoculums for administering bacteria to spill site; and (3) claim bacteria themselves. PTO held living organism (bacteria) not patentable. Only claim over bacteria was before the Court. Court says real issue is not living v. non-living subject matter, but man-made v. naturally-occurring subject matter. Here, inventor did not discover naturally occurring bacteria but invented a new species. patentability of bacteria under Plant Patent Acts. The Court held that the bacteria were patentable. The dissent objected on grounds that the Court should defer to legislative judgments re: unpatentability of bacteria set forth in Plant Patent Acts.

ii.

iii. The Court rejected Congressional intent arguments based on non-

b. Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948) (MMLJ 144)
i.

The patentee discovered that certain species of bacteria did not, as commonly thought, exhibit an inhibiting effect on each other and used them to produce valuable way of inoculating seeds. Court held patent invalid because innovation that simply capitalizes on the work of nature is not patentable subject-matter.

ii.

c. Parke-Davis v. HK Mulford, 189 F.95 (1911) (Learned Hand) (MMLJ 147)

i.

Inventor found a way to isolate and purify important products from animal glands. Purified substance held patentable because it was practically a new thing that had new commercial and therapeutic applications although derived from nature. The line b/w different substances and degrees of the same substance is to be drawn . . . from the common usages of men . . . . nature in a product patent.

ii.

iii. But see Ex parte Lattimer (1889) holding that cant claim derivative of

d. Comments on Patentable Subject Matter (MMLJ 149 55)

i.

Nozick and other libertarians feel inventors should get patent rights to living things they discovered. Rationale similar to the sufficiency proviso application: by discovering it when no one else had, the world benefits; however, entitlement should only last as long as it would take for someone else to discover the same thing. (a) Impossible to administer. Blue-sky guessing here.

ii.

Chakrabarty rule that one can patent new species of plant and animal (non-naturally occurring) has been readily extended (MMLJ 150); limits imposed on scope of patent coverage (Harvard mouse). not been well-received by the courts. (MMLJ 151).

iii. Moral arguments about the impropriety of patenting living things have

3. Business method patents a. BMPs were unavailable until recently because they were abstract ideas
i.

State Street

(a) Transformation of data by a machine into a final [product] constitutes a practical application of an algorithm and is therefore patentable subject matter
(i) Essentially makes software patentable

(b) Repudiates the business-methods exception to patentability

b. Existing BMPs
i. ii.

Online support system (1998) Priceline.com (1998)

iii. Single click commerce checkout (1999) iv. Behavioral profiling (1998) v.

Prepaid cellular calls

c. Tightening the standards

i.

AIPA (1999) (a) Prior-use defense for BM patents (b) Study of BM patents by GAO

ii.

2000 PTO guidelines for BM patents: (a) Hiring more specialized examiners (b) Updating databases to include relevant nonpatent literature (NPL) (c) Mandatory second exam

iii. Proposed BM Patent Improvement Act

(a) Formal post-grant opposition procedure (b) Invalidity requires only preponderance of the evidence (c) Presumption of obviousness for computer implementation of extant BMs (d) Public may submit prior art

B) Utility 1. General utility a. Can the invention do anything?

i.

Almost always, yes, especially since entertaining and amusing counts

b. Chemicals (Bremer)
i. ii.

Excepts research purposes from the set of general utilities You have to show that your patented X is useful for something more than just research

iii. Courts rationale

(a) Dont want to lock up information (b) Dont want to discourage inventors from using the research to work on second- and third-generation products (c) Dont want to give the initial prospector such a huge claim, including second- and third-generation products
iv. Harlans dissent:

(a) For claims 1 and 3, there are other aspects of patent law that can deal with this (b) For claim 2, the doctrine of blocking patents gives secondary inventors an independent patent claim
v.

Effects (a) Prevents the patenting of fragments of genes for which the function is not yet known

c. 2001 Utility Guidelines 2. Specific utility a. Generally highly tolerant stance b. Dont need to show practicability c. Distinguish operability in RTP context 3. Beneficial utility a. Courts highly forgiving b. Once stronger and often used; now rarely significant
i.

Courts no longer feel that social utility is something they should judge

c. Whistler (1988)
i.

Patent on radar detector upheld

d. Juicy Whip (1999)

i.

Patent on deceptive drink dispenser upheld

C) Novelty 1. To be patentable, a product or process must be new in the sense that a. It doesnt exist in nature b. Its not the same as an existing or known product or process 2. Circumstances that will prevent an inventor (I) from acquiring a patent a. Someone else invented the product first 102 (g)
i. ii.

Unique in the US (aside from the Philippines) Elsewhere, first to file wins

iii. Rarely really significant in practice

b. Invention was known or used by others in USA prior to invention by I 102 (a)
i.

Known idea sufficiently well developed that a PHOSITA could reduce it to practice

ii.

By others available to the public

iii. Limitations

(a) Each element of claimed invention must be disclosed in single prior-art reference (b) No anticipation by equivalents (c) Prior art must be enabling (d) Inadvertent prior art may not count

c. Invention was patented or described in print anywhere in the world prior to invention by I 102 (a)
i. ii.

General test was the publication accessible to the public? Includes (a) Trade circular, document deposited in public library, scientific paper submitted for refereeing to a journal, instruction sheet distributed on one island in Japan, etc

iii. Excludes

(a) Private papers, internal memos, scientific paper delivered orally to an audience, improperly indexed microfilm in the Library of Congress, grant application sent to outside reviewers

d. Inventor abandons the invention 102 (c)

i. ii.

Public and express renunciation of intent to file for a patent Same circumstances that will support a bar under 102 (b) (a) Rarely invoked

e. Inventor conceals or suppresses the invention

i.

Excessive delay in filing patent application = circumstantial evidence of c/s

f. More than a year before I files a patent application in USA:

i.

Invention is in public use or on sale in USA 102 (b) (a) No patent if inventor (or someone else) commercializes the invention more than one year before filing (b) On sale requirements

(i) Definite sale or offer to sell (ii) The ting on sale must be either (a) The invention itself (b) Something that makes the invention obvious (c) Drawings sufficient to be enabling (Pfaff 1998) (iii) Sale is primarily for profit, not experimentation

(c) Purposes
(i) Policy against removing from public circulation inventions that public has come to rely on (ii) Promote prompt and widespread disclosure of inventions to the public (iii) Prevent inventors from reaping commercial benefits for much more than statutory period (iv) Minimize filing of silly patents by giving inventors reasonable amount of time to assess commercialization

(d) Public use bar

(i) Until recently, interpreted strictly (a) Public use of only one embodiment of the invention is enough (b) Use by one person other than the inventor suffices (c) Not necessary that the use by visible to be public (ii) Recently softened somewhat (a) Use in conjunction with commercial sale is public, but use for personal enjoyment is OK (b) Promise of secrecy will defeat bar (c) Experimental uses are OK ii.

Invention is patented or described in a printed publication anywhere in the world 102 (b) application, foreign patent is granted 102 (d)

iii. I applies for a patent in another country and, before US patent

3. Priority principles a. Patent goes to the first inventor to reduce the invention to practice (make a working version), unless
i. ii.

The invention was conceived (thought up) first by a rival, and That rival exercised diligence (worked hard between conception and reduction to practice) in reducing the invention to practice

b. Interference paradox
i. ii.

X conceives, then Y conceives, then Z conceives X is not diligent

iii. Z is diligent iv. Z RTPs, then X RTPs, then Y RTPs v.

X prevails over Y (prior RTP and conception)

vi. Y prevails over Z (prior conception + diligence) vii. Z prevails over X (prior RTP, X has prior conception but no diligence

during the critical period)

viii. Solutions

(a) Give the patent to no one (b) Eliminate the party with the worst claim, then apply standard rules
(i) Y has neither first conception nor first RTP (ii) Z prevails over X

(c) Award patent to first to conceive (X) (d) Award the patent to the first to RTP (Z) (e) Award patent to first to begin diligent work
(i) Y and Z would tie)

c. Conception
i. ii.

Question of law Formulation of the complete means of solving a problem

iii. Sufficiently detailed that PHOSITA can RTP without further research

iv. Idea encompasses all parts of the invention

d. Reduction to practice (RTP)

i.

Actual RTP (a) Physical embodiment (tempered recently) (b) Complete embodiment (equivalents dont count) (c) Testing sufficient to demonstrate utility and success

ii.

Constructive RTP (a) Patent application

e. Diligence
i.

Inventor must show either actual activity or a legitimate excuse during the entire relevant period With respect to constructive RTP, inventor is charged with diligence (or lack thereof) of his attorney in making the patent application

ii.

iii. Legitimate excuses

(a) Lacked sufficient funds (b) Preoccupied with other, more profitable inventions (c) Didnt foresee rivals (d) Lawyer was slow filing application
iv. Illegitimate excuses

(a) Had to wait for another participant to become available (b) University rules required a delay to seek outside funding

D) Non-obviousness 1. Development of Doctrine: Doctrine develops from 1850 through skill and ingenuity standard (Hotchkiss, 1850) to flash of creative genius test (Cuno Corp. 1941). Graham v. John Deere abandons flash of genius test and allows for consideration of secondary factors in addition to whether invention is advancement on prior art. a. 35 U.S.C. s. 103 (1952): Congress enacts s. 103. Ensuing confusion concerning meaning and application of s. 103

requirements results in Graham case test factors for nonobviousness. b. Graham: In Graham the Supreme Court tied the non-obviousness requirement to the Constitutions Patent Clause. In Feist, the Court held that originality in copyright was required by Article I. In Graham, the Court held that the Clause limits patent protection to non-obvious subject matter that by its nature promotes the useful arts. The Court construes the non-obviousness requirement in utilitarian, Jeffersonian (rejects labor theory) terms. c. Graham Factors for Determining Non-Obvious per Section 103:
i. ii.

Scope and content of prior art Magnitude of difference b/w prior art and claims

iii. Level of ordinary skill in the prior art iv. Secondary Objective Factors:

(a) Commercial success (b) Long-felt, unsolved needs (c) Failure of others (d) Industry acquiescence (e) Suggestions in prior art (f) Fact that defendant chose to copy

2. Post-Graham Obviousness Determinations: Post Graham circuits diverge on percentage of patents held invalid based on obviousness. 3. Federal Circuit Standard: Since 1982 creation of Federal Circuit, standard for non-obvious relaxed to allow more patents to remain valid in infringement suit challenges based on court emphasis on secondary factors and treatment of combination patents. 4. Graham v. John Deere, 383 US 1 (1966) (MMLJ 193): a. Standard of obviousness is what would be obvious to PHOSITA at the time the invention was made. Cites Hotchkiss (MMLJ 197) as cornerstone of judicial evolution of patent doctrine that adopted functional approach to determining patentability by comparing invention with level of skill in art at time of invention reflected in s. 103 test for non-obviousness. b. Non-obviousness formulation in John Deere supplants previously suggested flash of genius test. Court describes obviousness inquiry in terms of degree to which invention departs from ordinary skill in art (PHOSITA standard) informed by SECONDARY CONSIDERATIONS:
i. ii.

Commercial success Long felt, unsolved needs

iii. Failure of others etc.

c. Court held patent on plough mechanism invalid because, though it was new (novel per s. 102), a PHOSITA would see the innovation as obvious based on the prior art. Court rejected argument about non-obviousness of invention that was not part of the claims or an issue in the prosecution history: you cant just make up important non-obviousness arguments on appeal. The patent was not infringed because it was invalid on grounds that invention claimed was obvious. 5. Combining References from Prior Art: Overcoming the NonObviousness Barrier a. In determining whether a particular invention is obvious, courts examine whether various prior art references would make it obvious to a PHOSITA to combine them and produce the claimed invention. b. In re Vaeck: Federal Circuit reverses PTO rejection of patent application on obviousness grounds. Inventor found a way to put bacteria that kill insects into bacteria that insects target as food

supply. The PTO rejected the claims as obvious b/c the prior art teaches the advantages of expressing genes of the toxic variety in other host bacteria.
i.

Obviousness is a question of LAW and involves two part inquiry where claimed subject is rejected as obvious in view of a combination of prior art references: (a) The prior art suggests that PHOSITA should combine their teachings to produce the claimed product (b) The prior art reveals that any PHOSITA performing the combination has a reasonable expectation of success (cant just be a long-shot, improbable combo).

ii.

The court held the patent was valid because: (a) The prior art did not implicitly or explicitly suggest the combination of principles necessary to produce the invention. (b) There is no indication in the prior art that anyone attempting the combination has a reasonable expectation of success.

iii. See, e.g. In re OFarrell (MMLJ 210 11) for case where opposite

holding was found because combination of prior art references was obvious and involved reasonable expectation of success.

c. Comments on Combination References and Obviousness (MMLJ 211 14)

i.

Suggestion Test (that prior art must suggest combination of teachings in way that produces claimed invention) doesnt specify whether suggestion has to be explicit or implicit. Several cases (see MMLJ 211) have held that an implicit suggestion of successful combination is enough to render invention obvious; courts maintain that prior art implicitly calls for further invention along lines well-recognized in the art, e.g. a more energy efficient engine. 212 13) that when prior art only suggests one of a huge number of possible combinations, a particular combination is not obvious.

ii.

iii. Likelihood of Success: The Federal Circuit held in In re Bell (MMLJ

6. Variations on Non-Obviousness a. Changing application to combination patents b. Expert testimony c. Division of Responsibility b/w Patent Office and Courts d. Special, generous rule for biotech patents under s. 103. 7. Secondary Considerations a. The Supreme court thinks has stated, in Graham, that the secondary factors of commercial success, long felt need, and so on, may have relevancy. The Federal Circuit, by contrast, routinely speaks of these factors under the rubric of objective evidence as a required fourth element in the 103 analysis. CB 214-216 8. Theories/Perspectives on Non-Obviousness a. Ideology of Authorship/Invention (Jaszi)
i.

Labor-Desert Theory (Nozick) (Folio 166 68) (a) Application of the Sufficiency Proviso:
(i) Labor desert theory supports patent protection in the sense that if your labor doesnt deprive anyone else, you deserve a reward (which doesnt violate sufficiency proviso). However, non-violation of sufficiency proviso imposes two limits on patent protection: (a) Time limits on patent (can only have monopoly rights for as long as it would take for someone else to come up with your invention). Such a system would require patent duration to vary with industry. (b) People who do conceive of same invention independently should each be able to market the invention; thus, patent law would be analogous to copyright which only prohibits copying and permits independent creation of copyrighted material.

(b) Alternative Conceptions of Labor:

(i) Time and Effort (ii) Avoidance Theory (Hughes) (iii) Value-Added Theory (a) **FISHER CRIT: Fisher criticizes i iii for their failure to reward valuable inventions arrived at through flash of creative genius

as much as those who labor away in the lab; thus, these theories dont support the non-obviousness requirement. The problem with basing patent protection on systems i iii is that such a system, combined with our low threshold for utility, would reward patents arrived at through great labor while it denies protection to small advances that may prove extremely valuable. (iv) Premium on creative activity (Becker) (a) This theory better supports non-obviousness requirement. ii.

Economic Analysis of the Non-Obviousness Requirement for Patentability: (a) Posners But For Causation Test (Roberts v Sears, Folio 163 65):
(i) Inventions that would not have been invented but for carrot of patent protection should be declared non-obvious. (ii) Inventions that would have been produced regardless of patent protection should be declared obvious and protection withheld. (iii) This test should be applied on an ad-hoc, case-specific basis. (iv) Flash of Creative Genius is a paradigm of non-obviousness and from Posners standpoint, if flash is really genius, the invention should not be protected b/c it would have occurred but for the availability of patent protection. However, he says last sentence of s. 103 saves this by saying patentability shall not be negated by manner in which invention derived so could still patent stuff arrived at by flash of genius. (v) Posner is not concerned with equity among claimants but with aggregate social welfare. But for test should be applied on level of generality where patent incentive was key to innovation regardless of circumstances surrounding innovation. (vi) Posners is NOT a rule-utilitarian approach. Posner cites Graham v. John Deere for proposition that sole purpose of patent grants are utilitarian and that economic language perfectly suited to defining the obviousness requirement for patentability.

(b) Merges: Non-Obviousness Requirement for Patent Reward Incentivizes Investment in Riskier Projects With Potentially Higher Social Value
(i) Non-obviousness requirement for patentability combats risk aversion. Merges is worried about the chilling effects of risk aversion on creativity and thus social welfare. He focuses on nonobviousness as a way to combat risk aversion by increasing incentives (patent protection) on investment in risky, non-obvious products/processes.

(ii) See handout on Merges decision tree: non-obviousness figures into calculation of expected value from decision to experiment to the extent that it increases the value of the ultimate product based on how unpromising the initial experimentation looked. (iii) Risk Aversion: Social welfare wants R&D people to choose high risk projects b/c their expected value is the highest. This whole scheme raises the question whether big breakthrough projects actually have less social utility than some smaller, more certain projects. If not, this scheme is not the best way to advance aggregate social welfare. (iv) Fisher thinks this scheme can increase aggregate social welfare in the big picture over time. Question is what kind of time-framing is required to see this result?? (sketchy). (v) This model assumes firms will survive risky products (must assume some insurance protection etc.).

9. Alternative Ways of Thinking About Non-Obviousness a. An Historical Explanation Rooted in the Theory of Creativity. JASZI:
i.

Jaszi: argues that romantic influence is everywhere and permeates the conception of authorship. He argues that interest groups, compelled by greed, have twisted copyright law in a way inconsistent with the romantic conception of authorship but have reached reconciliation in various doctrines, e.g. work for hire. US law rests on notion that rights should rest with employer who was visionary that commissioned work of artist. Patent law and the heroic image of the inventor. Until 18th c. Western culture did not put high premium on originality. American law championed creativity as vehicle for social mobility. protection in that the non-obviousness requirement deemphasizes the value of important contributions arrived at through drudgery.

ii.

iii. Placing a premium of creative genius at once boosts and limits patent

iv. While the Federal Circuit has curtailed the impact of the non-

obviousness requirement, the premium on creative genius lives in the Supreme Court which still approaches patents with a 19th c. emphasis on individual creative genius in contrast to Federal Circuit narratives which are more technical and product of different analytic mode. (a) See Genentech case as example of boring concept of patents.

b. Historical Explanations v. Normative Theory: The historical approach leaves room for normative theories like economic justification for non-obviousness. You could use historical approach to explain how things came to be and rely on normative theories to push for change.
i.

Perhaps corporatization of America and phenomena of joint authors/corporate patentees are the reasons Federal Circuit discourse today is different from past rhetoric concerning heroic inventors. Legal realism perspective says Federal Circuit engaged in cert. Proofing exercise: Supreme Court is allergic to heavy technical rhetoric and will leave Federal Circuit holdings alone.

ii.

E) Enabling disclosure (Enablement) 1. 35 U.S.C. s. 112: The patent specification must contain a description of the invention and of the manner and process of making and using it, clearly enough to enable a PHOSITA to make and use it. The claims define the scope of legal protection surrounding the patented innovation. Section 112 requires three things in patent: a. Written description of claimed invention
i.

Often invoked when applicant amends application (a) 120: amended patent application gets priority date of original patent application (b) 132: amendment may not introduce new matter into the disclosure

ii.

Original disclosure must clearly describe the invention eventually claimed (a) Vas-Cath (b) Hyatt (c) Purdue Pharma (d) Courts are more lax when the patent is pioneering

iii. Recently applied by CAFC outside of the extension context

(a) Lilly
(i) Cant claim gene for human insulin if disclose only DNA sequence for rat insulin

(b) Gentry

(i) Gentry patent discloses double recliners in a sectional sofa; controls mounted in a fixed console (a) Defendant uses controls in a drop-down tray (ii) Holding: Specification must describe the invention, with all of its claimed limitations (iii) Claims may be no broader than the supporting disclosure

b. Clear claims regarding scope of protection over invention c. Enabling disclosure describing how to make and use the claimed invention.
i.

Specification and Best Mode: The specification shall also describe the best mode for making and using the invention. I.e., Applicant must specify which of the embodiments of the invention claimed in the patent is, in her opinion, the most effective. **If you withhold description of best mode, patent is invalid. (a) Rationale for Specification Requirement: Society confers monopoly privilege in exchange for best information for social welfare. Claims must be sufficiently precise that the public knows the boundaries of the patent. (b) Borderline Case Randomex (CAFC 1988): Is it sufficient to reveal that the best cleaner for use in patented disk-cleaning machine is a non-residue detergent solution such as Randomex Cleaner No. 50281?

ii.

Claims: Comprise the second half of the patent (following specification). Analogy to deed which defines the metes and bounds of real property, claims define scope of legal protection for patented innovation. (a) Claim Drafting: involves starting with very broad claims which are then qualified by a series of narrower, often dependent, claims. (MMLJ 133). Its best to claim more than you think you are actually entitled to b/c PTO will often invalidate some claims. Two restraints:
(i) Prior art (whats been done before) (ii) Work the inventor has actually done (cant claim stuff not yours)

(b) Patent Reissue: A patentee who believes the claims in her patent (once granted) are too broad or too narrow can seek re-issue of the patent with changes in the claims SO LONG AS THE DEFECTS IN THE CLAIMS WERE THE PRODUCT OF BONA FIDE ERROR OR OMISSION. (MMLJ 133).

(c) Reexamination Proceedings: Anyone, including third parties, may seek reexamination of a patent by the PTO if a substantial new basis arises for questioning the patents validity. Third party participation in the reexamination proceeding (even if they initiate it) is currently limited but may become broader through legislation. (d) Final Rejection: The PTO will issue a final rejection on a patent it cannot be persuaded to issue. The rejection is not final in that the patentee can still:
(i) Negotiate with examiner to allow amended version of patent (ii) Abandon original application and re-file a continuation application in hopes of convincing examiner with further argument. (iii) Appeal the rejection to PTO Bd. of Appeal or Federal Circuit.

2. Enablement subsidiary doctrines a. Undue experimentation

i.

Other people in the field, having access to the patent, shouldnt have to do a lot of experimentation to get from the specifications to the claims. Should be more information.

b. Undue breadth c. Enablement of PHOSITA, not layperson 3. Best mode a. Applicant must specify which of the embodiments of the invention claimed in the patent is, in her opinion, the most effective 4. Tacit attention to types of invention a. Commercial failure; speculative patent
i.

Sawyer & Mann light bulb

b. Minor improvement
i.

Gentry sofa

c. Pioneer invention d. Edison light bulb; solid polymers; Gore-Tex IX. Patent

Structure

A) Disclosure 1. Intertwined disclosure requirements a. Enablement b. Written description c. Definite claims d. Best mode 2. Policies a. Compel patentee to reveal information that will facilitate further technical progress b. Provide competitors guidance in what they may and may not do c. Prevent patentee from locking up a disproportionate territory d. Prevent patentee from extending the term of the patent e. Reinforce first-to-invent principle by denying priority dates to persons who have not yet fully achieved the invention B) Structure 1. Specification a. Written description of the invention b. Precise specification of the best mode of practicing it 2. claims a. analogous to metes and bounds of a deed b. independent or dependent c. trimmed by patent examiner & courts C) Claim interpretation

1. Interpretative sources a. Claim language

i.

General vocabulary where possible, including standard dictionaries

b. Patent specification
i.

Look at the specifications to get a good idea of what the patentee intended and meant with his language

c. Prosecution history of the patent

i.

Claims and representation that the patentee made in going through the patent process

d. Extrinsic evidence
i.

Inconsistent guidance from the federal circuit on the use of expert testimony.

X.

Patent Rights
A) Rights encompassed by a patent 1. Duration 2. Exclusive rights to make, use, and sell 3. Assignments and licenses 4. Infringement 5. Setting the boundaries of the patent 6. Improvements 7. Contributory infringement & inducement 8. Defenses 9. Remedies B) Duration 1. Utility patents a. If filed after June 8, 1995 20 years form date of first application b. If filed before then, the longer of
i. ii.

20 years from date of application 17 years from issuance

c. Time spent getting FDA approval not counted against filer ( 156) 2. Design patents: a. 14 years C) Making, using, selling 1. 271 (a) a. Analogous to copyright rights, except that copyright gives the copyrighter the affirmative rights. 271 gives the patentee the right to stop others from doing these things.
i.

Creates the possibility of an anti-commons, as in blocking patents, where no one has the right to make, use, or sell

2. Make a. For combination patents, make is to bring components together into one operable assembly
i.

Overseas assembly was ruled to not be infringement in Deep South Packing, which was overruled by Congress in 271 (f).

b. Importation of products made overseas using patented processes

i.

Statutory presumption that questionable products were made with the patented process

c. Jumping the gun

i.

Getting markets/clients ready for the expiration of a competitors patent Legal?

ii.

d. Repair/reconstruction of patented product

i.

Repairing a patented invention is not making, and is therefore not infringement. Reconstruction is. Wilbur-Ellis

ii.

e. Experimental use exception 3. Use a. Exhaustion doctrine

i.

Sale of a patented article by the patentee or under his authority carries with it an implied license to use (Aro)

b. Use in US not preceded by valid sale in infringement (Roche) c. Label licenses

i. ii.

Growing field; potential for misuse. Literally affixing a license to the article, For one use only. Form of price discrimination.

4. Sell 271 (a) a. 1994 amendment to 271 adds offer to sell

i.

Quality Tubing offer to sell, made in US is not infringement where neither manufacture nor delivery will occur in US Rotec Industries dictum offer to sell, made in US is infringement, regardless of location of manufacture and delivery

ii.

D) Assignments and licenses 1. Assignor estoppel (Diamond Scientific) a. Assignor of patent cannot defend against a subsequent infringement action on grounds of invalidity of patent 2. No licensee estoppel (Lear) a. In contrast to assignor estoppel, a licensee is not estopped from challenging the validity of the patent 3. Permissible duration of licenses (Brulotte) a. Patent licenses can only extend as long as the term of the patent b. Possible structures for a patent expiring in 2020
i. ii.

Pay me $X per bicycle sold until 2020 permissible Pay me $X per bicycle sold until 2050 impermissible

iii. Pay me $Y between now and 2020 based on sales until 2050 OK iv. Partially delayed payments (made between now and 2050 but based

on pre-2020 sales)
v.

In 2020, patentee no longer own anything. your invention between now and 2020 in exchange for a sale of profits until 2050.

vi. But you can give up your rights to prevent the licensee from selling

c. Seems economically unnecessary (?) 4. Compulsory licenses a. Rare in patent law E) Infringement 1. Literal infringement a. Every element of the patent claim is present in the defendants product or process
i. ii.

Contrast substantial similarity and fragmented literal similarity Rare exception reverse equivalents (a) A breakthrough that really changes the nature of the invention (b) Air brakes on trains

2. Equivalents: Graver Tank, Hilton Davis a. Element-by-element analysis b. Scope varies with innovativeness of the invention c. Objective test (Ds intent irrelevant) d. Measured at the time of infringement
i.

Doctrine may apply even if defendants product only became possible through new technology

e. Limited by prior art f. Limited by prosecution history estoppel

i.

Patentee bears burden of showing that a change was not related to patentability

F) Interpreting claims 1. Objective standard 2. Sources of guidance: a. Claim language

i.

Plain language, aided by dictionary

b. Patent specification if:

i. ii.

A claim term is ambiguous; or Patentee provides a definition for a claim term

c. Statements made by patentee during prosecution d. (sometimes) expert testimony e. Prosecution History Estoppel
i.

PHE applies to all amendments related to statutory requirements for patentability (a) A narrowing amendment made to satisfy any requirement of the patent statute may give rise to an estoppel

ii.

Voluntary amendment has the same effect as compelled amendment

iii. Complete bar rule

(a) Serves policies of notice and certainty (b) When no explanation for an amendment is offered, complete bar rule applies
iv. Flexible rule

(a) Estoppel does not apply to

(i) Equivalents unforeseeable at time of amendment (ii) Aspects of the invention that have only a peripheral relation to the reason for the amendment (iii) Patentee bears burden of proof

G) Improvements 1. Blocking patents H) Contributory infringement and inducement 1. Contributory Infringement 271(c) a. Contributory infringer if:
i. ii.

make material component of invention; and know that it is especially made or adapted for infringing the patented invention; and

iii. item is not a staple or having a substantial non-infringing use

b. See Bard CB 265 : Requires that the infringer knew both that X was patented and that her component infringed on Xs patent. CB 266 2. Inducement a. Whoever actively induces infringement of a patent shall be liable as an infringer 271(b)
i.

E.g., distributing brochures advertising the sale of infringing equipment; Instructing in the use of patented process;

ii.

iii. Purchase of articles made through patented process; iv. Indemnifying infringer; v.

Inducing licensee to breach license agreement

I) Defenses 1. Experimental use a. Allows for the unlicensed construction and use of a patented invention for purposes of pure scientific inquiry b. Began w/ Justice Storys opinion in Whittemore v. Cutter, stating that it could never have been the intention of the legislature to punish a man, who constructed such a machine merely for philosophical experiments, or for the purpose of ascertaining the sufficiency of the machine to produce its desired effects. c. Intention to profit will invalidate the EU defense.
i.

Courts found that pharmaceutical companies couldnt experiment to position themselves to produce drugs as soon as the patents expired; legislature overruled, as part of a compromise extending patent periods beyond time spent in FDA approval.

d. Eisenbergs recommendations:
i.

Research use to check the adequacy of the specification and validity of the claims should not be infringing. Research use of an invention with a primary or significant market among research users should not be exempt from infringement liability when the research user is an ordinary consumer of the patented invention. invention in subsequent research in the field of the invention, which could potentially lead to improvements in the patented technology or to the development of alternative means of achieving the same purpose. (a) Might be appropriate in some cases to award a reasonable royalty after the fact.

ii.

iii. A patent holder should not be entitled to enjoin the use of a patented

2. Inequitable conduct a. Bad behavior by patentee in application or prosecution b. Requirements:

(a) Failure to disclose material information or submission of false material information (b) Intent to deceive patent office.

(c) intent is not shown simply by gross negligence (d) patent becomes completely unenforceable

c. Kingsdown Medical Consultants v. Hollister

i.

KD sued Hollister for infringement of their patent on a two-piece colostomy appliance. While KDs appeal of some rejected claims was pending, their patent attorney saw a similar device manufactured by Hollister. KD withdrew their appeal and filed a continuation application. (a) The continuation application indicated that claim 43 corresponded to an allowed claim in the patent application; in fact, it corresponded to a claim that had been rejected under 112 for indefiniteness. Claim 43 was allowed by the examiner and renumbered as the present claim 9.

ii.

iii. Inequitable conduct is failure to disclose material information, or

submission of false material information, with an intent to deceive, and those two elements (materiality and intent) must be proven by clear and convincing evidence. (a) To be guilty of inequitable conduct, one must have intended to act inequitably. (b) Gross negligence does not constitute intent to deceive
(i) Here, there were lots of reasons it was an easy mistake to make; claim was 50 on both applications, minor mistake, 2 years between documents . . .

(c) Inequitable conduct in one or more claim during the prosecution of the patent application renders the entire patent unenforceable.

3. Patent misuse a. Looks at activity of patent holder. b. This consists of placing unjust conditions on use of your patented invention to those whom you sell or license it to; engaging in methods that enlarge the breadth of your patent in ways that have anticompetitive effects. c. Examples
i.

Patent misuse (a) Demanding that licensees purchase staple supplies only from patentee

(b) Non-metered licenses

(i) Payments based on total volume of sales, gross revenues, etc. without regard to the proportion of use of the licensed X (ii) Can be employed in circumstances in which the licensees have some control over the magnitude of the patented input

(c) Limits on sale prices of products made with the patent

ii.

Allowable behavior (a) Demanding that licensees purchase non-staple supplies only from patentee (b) Metered licenses
(i) Based on the frequency with which the licensee used the patented X

(c) Limits on the regions in which products made with the patent are sold (d) Patent suppression
iii. Middle ground

(a) Grantback licenses

d. 35 U.S.C. 271 (d)

i.

No patent owner otherwise entitled to relief for infringement shall be denied relief or deemed guilty of misuse for having: (a) Derived revenue from acts which if performed by another without his consent would constitute contributory infringement of the patent (b) Licensed or authorize another to perform acts which would otherwise constitute contributory infringement of the patent (c) Sought to enforce his patent rights against infringement or contributory infringement (d) Refused to license or use any rights to the patent (e) Conditioned the license of any rights or the sale of the product on the acquisition of a license in another patent or purchase of separate product
(i) Unless in light of circumstances the patent owner has market power in the relevant market for the patent or patented product on which the license or sale is conditioned

ii.

In other words: (a) Patentee may make and sell non-staple goods used in connection with his invention. (b) Patentee may authorize others to do so (c) Patentee may bring suit without fear that his doing so will be regarded as an unlawful attempt to suppress competition (d) Effectively gives patentee a limited power to exclude others form competition in non-staple goods. He can sell it himself while enjoining others from doing so, eliminating competitors and controlling the market.

e. Exhaustion doctrine
i.

Once a patent owner has sold or licensed goods embodying the patented product, he cannot exercise further control over those goods. Courts have found recently that there are limits. (a) Doctors can put a label license on a device indicating it is for one use only. (b) Patentee has bargained for, and received, an amount equal to the full value of the gods. (c) Does not apply to an expressly conditional sale or license, where it is more reasonable to infer that the parties negotiated a price that reflects only the value of the use rights conferred by the patentee. (d) Form of price discrimination.

ii.

f. Non-metered licenses
i.

Patentees are entitled to charge royalties on the patents they license to others. (a) Royalty based on a flat percentage of a purchasers sales struck down; a licensee may insist on paying only for use, and not on the basis of total sales.

g. Grantback clauses
i.

Patentee may require licensee to grant him rights to any improvement patents the licensee is granted while using the licensed patent. May sometimes be patent misuse.

ii.

h. Field-of-use restrictions
i.

Controlling the price licensee sets for incorporating products is per se illegal under the Sherman Act, but restrictions that control the geographic or product market are legal. (a) Unless they are part of a typing arrangement. ??

i.

Patent suppression
i.

Patenting something with no intent to utilize it, merely to deny it to competitors. Debates as to whether this happens and whether it is a good idea.

ii.

j.

If misuse patent against anyone, cannot enforce against anyone until the effects of the past misuse have dissipated.
i.

Unclear what dissipated means; in practical terms, seems to invalidate the patent for the duration. Limited by 271(d)(1) - (3), which defines certain activities which are not patent misuse under 271(c) if done by a third party

ii.

iii. Key dividing line is if the activity would be contributory infringement

k. Note that Good Policy is defined by its ability to improve output, largely by facilitating price discrimination. l. Staples
i.

A staple product has an existing market beyond use with the patent. A non-staple product has no commercial use except in connection with the patent.

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

i. ii.

Plaintiffs patented a feed mechanism for a film projector. Plaintiff granted The Precision Machine Company a right and license to manufacture and sell machines with their patent in the US. Required that every machine sold, except those for export, shall be sold with the condition that projectors would be used solely for motion pictures containing the inventions of reissued patent 12,182, leased by a licensee of the licensor while it owns said patents, and upon other terms (i.e. royalties). ?? (a) Also required minimum prices extending into the resale market

iii. The machine in question was apparently the only one that could

actually function to show movies.

iv. The primary purpose of patent laws is not the creation of private

fortunes for the owners of patents, but to promote the progress of science and useful arts.
v.

Owners rights to control by restricting the materials to be used in operating the machine must be derived through the general law from the ownership of the property in the machine, not from the patent law.

vi. Restrictions:

(a) Restriction to use the projector with a certain type of film was invalid, as it was an attempt to extend the monopoly on the film after it expired, and because it would create a separate monopoly on motion pictures.
vii. Holmes dissent:

(a) The patentee can choose to exclude his inventions completely from the public use, so he should be free to exclude them completely unless the terms of his license are met.

4. Laches a. Originally developed and occasionally applied to deal with submarine patents b. Not likely to be an issue in the future J) Remedies 1. Generally, injunctions, not damages, are the standard remedies in patent cases. The reason is that placing a value on a particular piece of patented technology, especially over a period of time, is very difficult. Better let the parties negotiate over a license. Valuation problem. a. But parties might not know the value of the patent, either. b. And the transaction costs might be high. c. And strategic behavior might cause parties to forgo some deals that would be in the best interest of both sides. (p.324)
i.

Original patentee could be an asshole and try to maximize profits, reducing the odds of a good deal.

2. Patentee cannot use the courts to prevent violations ex ante. 3. H.H. Robertson a. Irreparable harm will be presumed when a clear showing has been made of patent validity and infringement.
i.

Finite term of the patent causes this

b. Money damages wont work, since primary benefit of patent is the right to exclude c. favorable standard for preliminary injunctive relief d. reasonable probability of eventual success in the litigation e. the movant will be irreparably injured f. presumed in patent cases upon showing of patent validity and infringement g. Court can also look at:
i.

possibility of harm to other interested persons from the grant or denial of injunction the public interest

ii.

4. Permanent injunctions denied on very rare occasions on the basis of the public interest a. especially if infringer manufactures the product and the patentee does not b. also strong if the product is health related 5. Injunctions are thought more efficient because of significant valuation problem if court has to decide value under a liability rule a. transaction costs might be high b. strategic behavior could prevent some good deals c. But damages for reasonable royalty and lost profits are available. 6. Monetary damages a. Royalties
i.

reasonable royalty, or

ii.

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

b. Lost profits
i. ii.

difficult to measure; complications include: magnitude depends on which profit-maximizing activities patentees could have / would have engaged in (a) e.g. price discrimination; but patent misuse could limit (b) some courts include profits from likely sales of non-patented, nonstaple supplies (MMLJ p. 307) (c) post-expiration sales sometimes included (MMLJ pp. 307 - 08) (d) Difficult to infer market share from actual behavior (e) difficult to determine appropriate price in the non-infringing hypo (Price Erosion)

iii. one test asks plaintiff to prove:

(a) demand for patented product (b) absence of acceptable non-infringing substitutes (c) In Polaroid, court looked at cross-elasticity and entire market, even though no substitutes available (d) some courts use the Market Share rule, and assume that the patentee will have the same share relative to the non-infringing market (substitutes) as the patentee and the infringer together had (MMLJ p. 306)manufacturing and marketing capability to exploit the demand, the profit he would have made

K) Economic Analysis 1. Examples of ways in which the patent system might be tuned a. Breadth of permissible claims/enablement b. Duration
i. ii.

Temporal reach of make Hatch-Waxman Act

c. Interpretation of equivalents doctrine d. Interpretation of reverse equivalents e. Experimental use defense f. Antitrust/patent misuse doctrine
i. ii.

E.g. tying arrangements E.g. price-restricted licenses

2. How should we make those adjustments? a. Incentive theory

i.

Lawmakers should strive to maximize the difference between (a) The social benefits from increasing incentives for inventive activity (b) The concomitant social losses (deadweight loss, transaction costs, etc.)
(i) See chart on handout Economic Perspectives on Patent Law

ii.

Practicable strategies include (a) Deny patent protection for (types of) inventions that would have been invented anyway (b) Accord patentees entitlements with high incentive/loss ratios and deny them entitlements with low ratios
(i) Refuse to excuse encroachments on entitlements with large ratios (ii) Excuse encroachments on entitlements with small ratios as fair use

iii. Topics

(a) Right to set license fees free of govt interference

(i) Would override monopoly pricing (through compulsory licenses) (ii) Has a high incentive/loss ration; a good policy (a) Unless you assume a high transaction cost in figuring license costs, which would be added to the monopoly losses to create total deadweight losses

(b) Right to suppress a patented invention

(i) Depending on the case, might have a high or low ratio. In general would seem to be a low (or even negative?) ratio. (ii) Should these analyses be made on a case-by-case basis, or in general categories? Tough question. (iii) At least patenting, even for suppression purposes, means public knowledge, as opposed to I just invented a 50 year light bulb, so GE, give me $1M or Ill release it idea.

(c) Right to prevent experimental uses of a patented invention

(i) Ambiguous. Distinguish between commercial and noncommercial operators?

(d) Right to use non-metered licenses

(i) One of the dangers is the antitrust concern about policing cartels; allows the licensor to monitor the licensees operations, including costs, production, profits.

(e) Right to tie a license to purchases of unpatented related products (f) Right to use price-restricted licenses
(i) Example (a) Three firms, A B and C, are producing an unpatented product (shredded wheat). (b) An employee of A invent and patents a product that reduces the cost of production of shredded wheat. (c) What should we permit A to do?
1 2 3 A could restrict the invention, squeezing its competitors. A could license it to its competitors. A could license it to its competitors and require them to raise their prices (and increase its license fee to boot)

(ii) Purposes (a) Protect patentees market (and associated profits) against erosion by competitors
1 Socially desirable but unlikely

(b) Facilitate cartels

1 Socially undesirable

(c) Maintain quality of repairs and service

Socially desirable (?)

(iii) Analysis (a) Probably shouldnt allow.

b. Reducing rent dissipation

i. ii.

Primary invention is followed by chains of follow-on improvements. The winner-take-all character of patent law stimulates overinvestment and research (a) Encourages too many people to compete to reach a breakthrough
(i) It would be better if some of the people racing for one lucrative breakthrough were working on other socially desirable innovations

(b) Dissipates the rents available to inventors (c) Too many teams racing for primary inventions, improvements, and alternative (but equivalent) technologies. Social waste.
iii. Kaplows proposal

(a) Prohibit cross-licensing & settlements of competing patents (patents on alternative technologies)
(i) These things usually arise when firm A develops and patents a technology and firm B, not wanting to pay licensing fees, works hard and develops and patents a functional equivalent. A and B usually then cross-license to preserve their market position. Wasteful. iv. Kitch proposal (prospect theory)

(a) Give broad patent protection to pioneering inventions

(i) Efficient coordination of emerging technologies for patentee

(b) Merges & Nelson say,

(i) Will exacerbate the problem of rent dissipation at the primary level (ii) Given broad patents, patentees sit on their hands rather than working harder to improve

c. Differentiating types of innovation

i.

Grady/Alexander Typology (a) Inventions with low social value and large signaling potential broad patents

(b) Inventions with high social value and low signaling potential narrower patents (c) Inventions with little possibility of improvement narrow patents (Merges and Nelson theory) (d) Inventions that cannot be improved upon at all no patents whatsoever (e) Some support in caselaw, such as the denial of patent for the discovery of the anesthetic properties of ether

d. Abandon the system in favor of governmental rewards

i.

Initially there was a proposal to reward inventors with grants of public lands. Madison thought it was a great idea, but it never got off the ground. Shavell (a) Current characteristics
(i) Awarded to inventors who meet creativity requirements and who apply (ii) Financial incentives derive from rights to exclude competitors, which give rise to monopoly power (iii) Limited duration

ii.

(b) Mandatory reward system

(i) Shavell says mandatory govt rewards could be better than patent (ii) Awarded to inventors [who meet c. req. and who apply?] (iii) Inventors have no right to exclude competitors and thus no monopoly power [except that provided by trade secret laws and lead time] (iv) Financial incentives derive from revenues distributed ex post by government on basis of sales data and surveys (a) Objective is to pay inventors the full social surplus of the invention (v) Revenue raised from income taxation (vi) [Limited duration?]

(c) Optional reward system

(i) Shavell says this would be better than patent

(ii) Inventors can opt for either a patent or a govt reward

(d) Govt purchases of patents

(i) Option 1: govt offers to buy all patents (ii) Option 2: govt offers to buy patents where deadweight loss would be greatest (iii) Option 3: [industrial policy] government offers to buy patents in important industries (iv) This path would require no legislative changes; purchases are already in the code

3. Fishers historical article a. Extension of copyright entitlements

i.

Duration (a) From 14+14 to life+70

ii.

The concept of the work (a) Translations, plots, characters, derivative works

iii. Subject-matter coverage

(a) Photographs, musical recordings, software, architecture

b. Expansion of patent entitlements

i.

Subject-matter coverage (a) Designs, plants, animals, genes, surgical procedures, software, athletic moves, business methods

ii.

Doctrine of equivalents (but see Festo)

iii. Pro-patentee posture of federal circuit

(a) Nonobviousness, novelty, damages

c. Expansion of trademark entitlements

i.

Kinds of marks that can be protected (a) Arbitrary, fanciful, or geographic marks (b) Trade names

(c) Smells and sounds (d) Trade dress

ii.

Geographic coverage

iii. Definition of infringement

(a) Similarity (b) Dilution

iv. Remedies

d. Causes of the expansion

i.

Economic factors (a) From agriculture to industry to information processing

(i) Increased perceived need for IP

(b) Shift in the IP balance of trade (c) Increased use of advertising

(i) Manufacturers seek stronger trademark protection ii.

Ideological factors (a) Popular commitment to labor-desert theory (b) Classical liberalism
(i) Popular suspicion of governmental involvement in designating socially valuable inventions (ii) Aesthetic relativism

(c) Romantic conception of authorship and invention

iii. Political tilt

(a) Concentrated interests of creators vs. dispersed interests of consumers

(i) e.g., origins of the patent clause (ii) e.g., 1976 reform of Copyright Act (iii) e.g., DMCA (1998) (iv) e.g., CBDTPA (2003?)

iv. Rhetoric

(a) Decline of the concept of monopolies (b) Emergence of the concept of :intellectual property

XI. IP

in Computer Software

A) Market failures 1. Public goods problem a. PGs defined

i.

Nonexcludability (difficult to prevent those who do not pay for the good from consuming it) Nonrivalrous competition (additional consumers of the good do not deplete the supply of the good available to others)

ii.

b. Examples
i.

Beautiful gardens, military defense

2. Standardization and network externalities a. When the utility or satisfaction a consumer derives from a product increases with the number of other consumers of the product. b. Telephone networks c. Also inhere to product standards that allow for the interchangeability of complementary products B) Four systems available for protecting software 1. Trade secret a. Available to (and only to) the developers of ideas, developments, and inventions who take care to conceal and keep secret their inventions. b. Often done by refusing to make the source code publicly available c. Requirements
i.

Information was secret initially (a) Sometimes a novelty requirement is imputed

ii.

Plaintiff made reasonable efforts to keep it secret

iii. Information must be commercially valuable

d. Liability
i.

Breach of confidence, or (a) Confidential relationship (b) Reliance on commercial custom and tacit understandings

ii.

Secret was discovered through improper means (a) Fraudulent misrepresentations, phone taps, etc. (b) Reverse engineering is NOT considered improper means

e. Usefulness
i.

As decompilers get better, trade secret becomes less and less effective

2. Copyright law (see also below) a. Extended to software on the recommendation of CONTU b. Apple v. Franklin (1983)
i.

Franklin wanted to make competing hardware that would run Apple programs Copied the Apple OS verbatim possible expression of that idea, so they would not be liable for the 106 violation because of the merger doctrine (a) Also made more realistic pro-competition arguments

ii.

iii. Franklin defends by saying that an OS is an idea, and theres only one

3. Patent C) Copyright law 1. Protection extended to computer software in accordance with the recommendations of CONTU in 1980 a. Scope b. Protection for literal elements of program code
i.

Code is essentially an analogue for the ordering of hardware switches. Anything that can be coded can be hardwired. Copyright doesnt extend to physical utilitarian designs, though.

c. Protection for non-literal elements

i.

Exact copying of computer code clearly infringes the programmers copyright. Apple v. Franklin. But when can underlying elements, such as sequence or organization of code, be protected? Altai

ii.

d. Protection for functional elements and protocols

i.

Lotus v. Borland

e. Declining in scope
i. ii.

Copying nonliteral features of programs Reverse engineering for the purpose of interoperability

iii. Menu hierarchies iv. Ineffective enforcement

2. Whelan a. Holds that the purpose of a utilitarian work is the idea of that work
i.

Everything not necessary to that purpose or function is expression

b. Copying any aspect of the structure or organization of the program not essential to that function is infringement c. Courts have moved away from this to Altai, which is less protective 3. Computer Associates v. Altai a. Altai was accused of copying CAIs CA-SCHEDULER ADAPTER component. CA-SCHEDULER was copyrighted. ADAPTER was the OS compatibility component. b. Altai employee recruited a friend and CA employee to help Altai design an MVS version of one of its programs. Unknown to Williams, the Altai employee, his friend familiar with ADAPTER and took the VSE and MVS source code with him when he jumped ship. Arney, the CA -> Altai employee, used ADAPTER to create about 30% of Altais new product, OSCAR. Altai learned of this after CA discovered the infringement and filed suit. c. Williams, now Altais president, salvaged as much of OSCAR as possible. Version 3.5 took six months and eight coders to complete. Altai only shipped 3.5 after it was finished, which was found not to be substantially similar to CA-ADAPTER. d. CA argued that copyright protection should extend to nonliteral elements of software. Court disagreed. e. Substantial similarity should be analyzed in a 3 step procedure, similar to the abstractions test. Follows merger, sense a faire, and other established doctrines.
i.

Abstraction - First, break down the allegedly infringed program into its constituent parts. (a) Nichols abstraction test for separating idea from expression
(i) First step in determining similarity. Begins with code and ends with articulation of the programs ultimate function reverse engineer the code on a theoretical plane. (ii) Filter out incidents and get to general principles.

ii.

Filtration - Then examine each of these parts to sift out nonprotectable material. (a) Incorporated ideas, expression that is necessarily incidental to those ideas, and elements that are taken from the public domain (b) Look at each structural component at each level of abstraction was it an idea, or was it dictated by considerations of efficiency,

so as to be necessarily incidental to that idea? Was it required by external factors, or taken from the public domain?
(i) Efficiency: Copyrighted language can be copied w/out infringement when there is a limited number of ways to express a given idea; when specific instructions are the only and essential means of accomplishing a given task, their later use by another is not infringement. (ii) External factors: Design choice is often circumscribed by external factors such as: (a) Mechanical specifications of the computer on which a particular program will run (b) Compatibility requirements of other programs with which a program is designed to operate (c) Computer manufacturers design standards (d) Demands of the industry being serviced (e) Widely accepted programming practices (iii) Public domain: related to scenes a faire doctrine. iii. Comparison - Compare the resulting kernel or kernels of

creative expression to the allegedly infringing program. Determine whether the protectable elements of the programs at issue are similar enough to constitute infringement.

f. Policy considerations
i.

Will not be a significant disincentive. Programmers might want broader protections, but so does everyone. Wont stop them from programming. Copyright law isnt intended to create a monopoly.

4. Six levels of declining abstraction (Gates Rubber) a. Main purpose of the computer program b. Structure or architecture of a program, generally as represented in a flowchart c. Modules that comprise particular program operations or types of stored data d. Individual algorithms or data structures employed in each of the modules e. The source code that instructs the computer to carry out each necessary operation on each data structure f. The object code that is actually read by the computer 5. Six unprotectable elements (GR) a. Ideas b. Processes or methods of the computer program c. Facts d. Material in the public domain e. Expression that has merged with an idea or process f. Expression that is so standard or common as to be a necessary incident to an idea or process 6. Menu hierarchies a. Screen displays are copyrightable. A Pac-Man clone written with original clone but emulating the original games display would be a violation. b. Lotus Dev. Corp. v. Borland Intl
i. ii.

Are menu command hierarchies copyrightable? Borlands Quattro included menu commands virtually identical to those in Lotus 1-2-3. (a) Offered a Lotus Emulation Interface

iii. Menu commands are a method of operation, analogous to the

buttons on a VCR. Uncopyrightable.

(a) Dont want people having to learn entirely new basic commands.
iv. Key reader, which let Quattro users use 1-2-3 compatible macros,

was also not infringement. Macros are the work product of others, and compatibility should be encouraged.
v.

Apparently an inconsistent decision. S. Ct. granted cert, but was split 4-4 and therefore affirmed the circuit court opinion above. (a) At least two other circuits had previously followed Lotus v. Paperback, which had reached the opposite result. (b) There seems to be a tilt now in other circuits to accept the Lotus v. Borland outcome.

D) Patent 1. Cases a. Gottshalk v. Benson, 1972 b. Parker v. Flok, 1978 c. Diamond v. Diehr, 1981 d. Federal Circuit relaxation of the test, 1982-present 2. Freeman-Walter-Abele tests (1977-1982) a. Is the algorithm applied as part of an otherwise statutory process or apparatus claim? 3. Gradual weakening, 1982-1994 a. Iwashi (89), Arrhythmia (92) 4. In re Alappat (1994) a. An algorithm embedded in a general purpose computer becomes a patentable device 5. Patent doctrines by technology sector a. Utility
i. ii.

Generally easy Software same

iii. Biotech much harder

b. Novelty
i. ii.

Generally hard Software same

iii. Biotech same

c. Obviousness
i. ii.

Generally hard Software harder

iii. Biotech easier than both

d. Disclosure
i. ii.

Generally medium Software easier

iii. Biotech harder than both

e. Software patents
i.

PHOSITA is assumed to be sophisticated, as a result of the maturity of the technology

f. Biotech
i.

PHOSITA is assumed to be less sophisticated, as a result of the immature and unpredictable technology. Disclosure is harder, since you need more info for such a PHOSITA to be able to follow the process.

6. Unstable legal doctrine a. Pro-CD v. Zeidenberg

i.

Copyright law does not preempt state contract law, in regards to shrink-wrap licenses

E) Copies and the DMCA 1. In 93 the 9th Circuit found that loading a program into RAM constitutes a copy for the purposes of 106. (MAI Systems) a. It was argued that this was not a real copy because it isnt fixed the court disagreed, finding that the RAM copy was sufficiently

stable to be perceived, reproduced, or communicated for a more than transitory period.

i.

Why not say that its a copy if it IS perceived, reproduced, or communicated after a more than transitory period?

2. In 80, this was rectified by 117 of the Copyright Act. a. Makes it possible for users of computer programs to make certain copies without fear of liability, so long as
i.

The copy is created as an essential step in the utilization of the computer program, and used in no other manner, or (a) Includes analyzing programs for reverse engineering purposes

ii.

The copy is for archival purposes only and all archival copies are destroyed in the event that continued possession of the program should cease to be rightful.

b. Applies to the owner of a copy or the program, or the person the owner authorizes to make copies
i. ii.

Not to anyone who is not a rightful possessor Not to licensees? Over-the-counter purchases are purchases, but licenses are common.

3. MAI may be inconsistent with prior cases and legislative intent. House report indicated that fixation would exclude transient computer reproductions 4. DMCA a. DMCA in 1998 reversed MAI in a narrow way. Altered 117 to create a particular exemption from liability for the owner or lessee of a computer to make or authorize a copy of a program for purposes of maintenance or repair of the computer hardware. Must be make solely by turning the computer on, and no other programs can be copied. F) DMCA 1. Three major changes to the copyright Act a. Circumventing copy protection criminalized. 17 U.S.C. 1201 (a), (b)
i.

To circumvent a technological protection measure that effectively controls access to a work.

(a) Circ. means to descramble, decrypt, avoid, bypass, remove, deactivate, or impair a tech. protection measure.
ii.

Does not apply a substantial purpose test. Does not condition the illegality of circumvention on proof that the user violated copyright law. Even circumvention in order to make a lawful use of a work is criminal under the DMCA.

iii. Exemptions:

(a) Can circumvent in order to reverse engineer to achieve interoperability of programs

(i) So long as copyright law would permit the reverse engineering and there is no other readily available means of obtaining the information

(b) Circumvention is permitted for purposes of law enforcement, government intelligence activity, scientific research into encryption, testing of the security of devices, etc.

b. Copyright management information

i.

Makes it illegal to remove or alter copyright management information or provide false information (a) Info that identifies the authors, owners, or performers in a work and the terms or conditions under which a work may be used (b) Intended to punish counterfeiters and facilitators who strip ID information or claim to be the authors.

ii.

Taken literally, may create a quasi-moral right of attribution and

c. Online service provider liability

i.

Limits the liability for ISPs and some others for messages posted to their systems. To qualify for exemptions, OSPs must: (a) accommodate standard technological copyright protections (b) agree to terminate users who repeatedly infringe copyrights on the system (c) remove or block access to infringing material

ii.

iii. OSPs who comply are exempt from liability if they did not and could

not have known that the material was infringing.

iv. Creates a notice and take down rule; OSPs that receive a written

notice must remove offending material as soon as possible.

(a) Poster can respond with counter notification, in which case the OSP must replace the material within 10-14 days unless the copyright owner files suit.

G) Sega (9th Cir. 1992) : 1. Facts: Accolade wanted to make Sega-compatible game w/o complying w/ Segas licensing requirements (making S the sole platform for As games); A bought 3 of Ss games, reverse engineered to unlock and achieve compatibility w/ S 2. Held: copying portion of copyrighted code infringes, is a violation of 106, but is excused by 107 (fair use doctrine) 3. Fair use components: a. purpose and character of use (As use to study, noncommercial [commercial exploitation was indirect or derivative], non transformative, not parody; propriety of As conduct: only copied as much as needed for interoperability; net result of use: increase in games compatible with Ss platform, a good thing; TF: this is an energetic reading) b. nature of work (computer programs deserve less protection than fictional works; making S games available to public, despite guarding lock code, constitutes publication; if this were decided otherwise, copyright owner would gain de facto monopoly over works functional aspects this would be bad) c. amount copied (tilts in favor of S, since A copied entire code to find lock segment; however, since ultimate use was limited, this carries little weight) d. impact on potential mkt. (As sales might cut down on Ss mkt. share, but this isnt dispositive; games arent substitutes for each other, and the more games available, the greater the demand for the system; implicitly adopts narrow definition of market) e. Source code was published by releasing the game, even though only the object code was released f. Net rationale: interoperability, and means taken to achieve it, are good XII.

Trademark Policy
1. Cohens questions 2. What roles do trademarks play?

A) Questions

3. Are those roles desirable or undesirable? a. Measured in social value 4. How do you minimize undesirable effects? B) What do trademarks do? 1. Identify sources of products a. Benefits
i.

Reduces transaction costs (a) Reduces consumers search costs (b) Value of TM is highest when:
(i) Goods are difficult to inspect (a) Dandruff shampoo as opposed to grapes (ii) Cost of mistaken choice are high (a) Often when the price is high (iii) Consumers are not making repeat purchases (a) Consumers cant then correct their mistakes (iv) Consumers are wealthy (a) Controversial; assumes that wealthy consumers time is more valuable

ii.

Incentives to raise quality of products (a) Brand experience

(i) Performance of the product (ii) Treatment of customers (iii) Community extent to which the consumers self-identify as loyal customers

2. Mnemonic devices a. Cheerios is more memorable than Product Brand 2043 b. Same benefits as above, plus: c. Trademark law strives to prevent trademarks from providing possessors with market power independent of the quality of the product 3. Provide substantive information a. Shredded Wheat b. Marks with this characteristic are known, generally, as descriptive marks.
i.

Beneficial (a) Assist consumers in making informed choices (b) Pressure manufactures to increase/sustain quality

ii.

Pernicious (a) Confer market power on the TM owner (b) Prices rise (c) Some consumers priced out of the market

4. Generalized indicia of prestige a. TM licensing, as in Ferrari lunchboxes and baseball caps. 5. Increase attractiveness through sound, appearance, or connotation a. Make the products itself more attractive
i.

Harley-Davidson muffler sound, shape of Perrier bottle

6. Provide vehicles for conversation and parody 7. Shape consumers preferences and attitudes a. Undermines premise of signal theory: exogenous tastes b. Critiques
i.

Cultural critique

(a) Leads to physically unhealthy or dangerous behavior (b) Fosters consumerism, conspicuous consumption, materialism, envy, ennui
ii.

Economic critique (a) Consumers pay the costs of and dont benefit from ads that merely stabilize market shares (b) Artificial product differentiation facilitates oligopolistic pricing (c) Artificial accentuation of consumer anxieties also facilitates monopoly pricing

iii. Political critique

(a) Concentration of semiotic power (b) Our understandings of masculinity, femininity, beauty, success, failure, etc. are controlled by a small group of people who do not have our best interests at hear

c. Defenses
i.

Economic defense (a) Trademarks/advertising heightens our capacity to experience pleasure

(i) By increasing our awareness of the range of goods and services available to us (ii) And heightening our sensitivity to the variations among them

(b) Net effect: total pleasure is increased

ii.

Cultural defense (a) Leads to physically healthy behavior (b) The liveliness and richness of western culture derives partly from the efflorescence of consumer goods

iii. Political defense

(a) Trademarks create a world-wide vocabulary and thus help to erode cultural and political barriers and suspicions (b) If parody is permitted, trademarks provide the raw materials for decentralized cultural critique the dispersion of semiotic power

C) Possible alternatives to trademarks 1. Government certification of quality of goods a. USDA grading of beef b. Bar admission 2. Private certification of quality of goods a. E-bay evaluations 3. Warranties XIII.

Trademark Doctrines

A) Trademarks 1127 ( 45) 1. Any word, name, symbol, or device, or any combination thereof 2. Either: a. Currently used by a person b. Or a person has a bona fide intention to use it in commerce and applies for registration 3. Used to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown. B) Service marks 1. Any word, name, symbol, or device, or any combination thereof 2. Either: a. Currently used by a person b. Or a person has a bona fide intention to use it in commerce and applies for registration 3. Used to identify and distinguish the services of one person from the services of others and to indicate the source of the services, even if that source is unknown C) Collective marks 1. A trademark or service mark

2. Either a. Used by members of a cooperative, association, or other collective group b. Or the same have a bona fide intent to use it in commerce and applies to register it D) Certification marks 1. Any word, name, symbol, or device, or any combination thereof 2. Either: a. Currently used by a person other than its owner b. Or a person has a bona fide intention to permit another person use it in commerce and applies for registration 3. Used to certify regional or other origin, material, mode of manufacture, quality, or accuracy of such persons goods or services or that the gods or services were performed by members of a union or other organization. E) Categories 1. Marks that need only be used to be registrable a. Arbitrary or fanciful terms
i.

Coke

b. Geographic terms used arbitrarily

i.

Atlantic Magazine, Boston Chicken

c. Suggestive terms
i.

Coppertone, Ivory Soap

d. Geographic terms used suggestively

i.

Arctic Ice Cream

e. Personal names if they designate goods or services provided by that person

i.

Billy Joel, Johnny Carson, Madonna, The artist formerly known as Prince, DKNY, O.J. Simpson/O.J./Team O.J. Justice for All (currently under dispute)

2. Marks registrable only with secondary meaning a. Zatarain: the primary significance of the term in the minds of the consuming public is not the product but the producer b. Factors:
i. ii.

Amount and manner of advertising Volume of sales

iii. Length of the mark iv. Consumer surveys

c. Merely descriptive marks

i. ii.

Fish Fri, Alo (aloe cream), Vision Center, Tender Vittles, Arthriticare Factors in determining whether a mark is descriptive (a) Dictionary definition of the term (b) Does it require consumers to use their imaginations to reach a conclusion as to the nature of the goods? (c) Do competitors need the term to describe their products, or would it be useful to them? (d) To what extent has the term been used by competitors?

iii. Languages commonly used in the US are equivalent to English for

this doctrine; misspellings are vague but generally not descriptive.

d. Deceptively misdescriptive
i. ii.

Consumers are likely to believe the description is accurate If the deception is likely to fool consumers, the mark is deceptive and cannot be registered

e. Geographically descriptive
i.

Atlantic Cod, El Paso Salsa

f. Geographically deceptively misdescriptive

i.

Must become distinctive before December 1993

g. Marks that are primarily merely surnames

i.

Carson, Simpson, Fisher

3. Marks not registrable a. Common or generic descriptive marks b. Geographic terms synonymous with the product itself
i.

Maine Lobster

c. Descriptive marks d. Geographically deceptively misdescriptive marks that did not acquire SM by 12/8/93 e. Deceptive geographic marks f. Immoral or scandalous marks g. Marks confusingly similar to other marks h. Names of living persons (without permission) F) Johns April 2 notes 1. The typology that we covered yesterday has ramifications throughout this section of the course. 2. Weve talked about all of the characteristics that will throw a mark into category 3 except IMMORAL, SCANDALOUS OR DISPARAGING MARKS most controversial part of the class and of trademark law: a. Both copyright and patent law avoid questions of morality: copyright law allows registration of false, scandalous works, etc. Patent law used to have a serious doctrine of beneficial utility that refused to grant patents to negative inventions... the 20th C wiped out that portion of the doctrine.
i.

Theory that guides this position in the patent statute is that its not our business to be making judgments about utility: leave that to other regulatory agencies. (a) Let the state forbid access to radar detectors if it wants to.

b. Striking then that trademark law is moving in the opposite direction: for a long time, 2 has had this function and, on occasion over the

last 40-50 years, courts have used this to deny registration and refuse protection. And theyre doing it MORE OFTEN.
i.

Most dramatic manifestation is a decision on appeal to the CAFC: Washington Redskins trademark is disparaging. (a) It will affect around 10k HS mascots and slogans.

ii.

Acceptance in the RICHIE case of standing by pretty much random people who found the registration of OJ as a mark. (a) Wrong to give him the impression of government imprimatur.

iii. Some other real cases:

(a) KKK trying to register various marks. (b) Arguably misogynist: Ice Bitch, High Maintenance Bitch, Bitch on Wheels (c) Wife Beater T-shirts v. Wife Beater Beater

c. Reactions?
i.

Govt is giving a benefit: some degree of limited monopoly. So the 1a should have either limited or no bearing on trademarks. (a) Trademark seems to be more focused on consumer protection than patent or copyright law: perhaps even more of a fluffy area. (b) OLD GLORY: condom had the American flag on it. Keeping up with contemporary mores?

ii.

How much should the amount of protection vary with the character of the group or person seeking registration and whether or not they find it offensive? copyright law. 1a invocation is coming from someone who desires protection and isnt getting it. (a) Opposite of copyright situation.

iii. Remember ELDRED: there is a limit to the extent of protection of

iv. There are different kinds of Indian slogans: Tribal ones like Seminoles

or racial ones like the Indians mascot. (a) This guy thinks that tribes should be allowed to license their own identities so long as governed by their own tribal elders. (b) SI poll: most Native Americans dont object.

d. 2 different bases: IMMORAL AND SCANDALOUS v. DISPARAGING.

i.

IMMORAL AND SCANDALOUS: (a) How about anything that encourages illegality for the wife-beater example? But then what about something that glorifies marijuana? (b) How much does any of this stuff act as an impediment to criticism and legal change?

ii.

DISPARAGING: perhaps easier suppose that a larger percentage of the general pop is offended by NA references than NA themselves, is that then disparaging? How should it depend on the numbers proportions, etc?

iii. How much should the test be objective or subjective?

(a) The subjects intent in creating the mark, etc.

iv. From the standpoint of avoiding consumer confusion, a lot of this stuff

is an almost confusing preoccupation. We have drifted away from this conception in 2 ways: (a) Because the mark is the product. (b) Manufacturers think of their marks as a property right.
(i) Dilution (ii) Remember the license plate case in con law.

G) Secondary meaning 1. Secondary Meaning a. Zatarain definition: "the primary significance of the term in the minds of the consuming public is not the product but the producer" b. Factors to be taken into account by PTO & courts in deciding secondary meaning:
i. ii. iii. iv.

Amount & manner of advertising Volume of sales Length of use of the mark Consumer surveys

2. Note on the doctrine of "secondary meaning in the making" a. Suppose X begins using a descriptive mark; consumers start to associate the mark w/X. There's a certain point at which the mark is said to have achieved secondary meaning. But what if Y begins using the same or a confusingly similar mark after X? Consumers will begin associating the mark w/Y & there will be a delay in the time necessary for X to achieve secondary meaning. Some courts used to hold that X ought to be able to recover on ground that even thought mark is not yet registrable X has intent to acquire secondary meaning & mark is on the way to achieving it. Most appellate courts have now rejected this doctrine, but they've developed a couple of fudged doctrines for reaching the same result. One is if you acquire secondary meaning in another region you may be able to recover. Another is that intentional copying supports an inference of secondary meaning. Also, there's a state unfair competition doctrine that bad faith use of TMs or trade dress even in absence of secondary meaning is prohibited ("New York rule") b. McCarthy argues that X should not recover unless his mark acquired secondary meaning before Y began using it; PTO takes the position that whichever party acquires secondary meaning first wins. 3. Secondary meaning kicks in when customer association of the mark with X reaches a certain plateau. a. Doesnt have to be nation-wide; can be local (for an arbitrary value of local) 4. Possible remedies for X a. Trademark infringement
i.

Secondary meaning in the making or (a) (Now widely rejected)

ii.

Acquisition of secondary meaning in another region (Fuddruckers)

iii. Intentional copying supports inference of secondary meaning

b. State unfair competition doctrine

i.

May prohibit bad faith uses of trademarks or trade dress even in absence of secondary meaning palming off, deception (New York rule)

H) Novel forms of trademarks 1. Sounds a. NBCs three-chime sound

i.

Three notes is probably not enough to establish copyright protection, but the three notes used in conjunction with TV context is enough.

b. Harley Davidson
i.

Unsuccessful in trademarking the sound of its mufflers in the US; successful in some jurisdictions abroad

2. Smells a. Smell of a particular flower on thread 3. Colors a. Bibler tents b. Qualitex requires that functional elements not be trademarked; if a product is a color for a functional reason, no luck. 4. Slogans a. The fate of a fabric hangs by a thread (rayon yarn) b. Moving air is our business (electric fans) c. Hair color so natural only her hairdresser knows for sure d. Held generally to be suggestive rather than descriptive; no secondary meaning required.
i.

Seems a bit odd.

5. Location of labels a. Levis tags on the ass pocket edge

i.

No other manufacturer can put a label in that spot, even if its not a Levis tag. Same with Keds and rubber heel labels.

ii.

6. Invented ingredients 7. Package shapes a. Shape of the container b. Coke bottle 8. Cartoon characters 9. Buildings 10. Product configurations a. Different from package configuration shape of the thing itself b. Dallas Cowboys Cheerleaders uniforms I) Controversy over Inherent Distinctiveness for product configurations 1. Two Pesos a. Taco Cabana didnt register its distinctive dcor. After seven years, Two Pesos opens in Houston, and the two spread together. Eventually TC and TP restaurants are operating in the same city. b. District court rules that you dont need secondary meaning the ugly-ass color scheme is distinctive and arbitrary in relation to Mexican food. Affirmed all the way up. c. If its arbitrary and suggestive, you dont need secondary meaning. 2. Other cases a. Stuart Hall (8th)
i.

Follows TP in a rote fashion, but the circuits start to find it hard to apply.

b. Duraco test (3rd)

i.

To be inherently distinctive, a product configuration must be (a) Unusual and memorable (b) Conceptually separable from the product (c) Likely to serve primarily as a designator of origin of the product

ii.

A narrower test, essentially in defiance of the S. Ct.

c. Knitwaves/Landscape Forms test

i.

Is it likely that consumers will understand the products design to be an indicator of product source De-emphasis on manufacturers intent

ii.

d. I.P. Lund 3. Wal-Mart (S. Ct. 2000) a. Court retreats, and distinguishes two things:
i.

Product packaging (a) Traditional scheme continues to apply

ii.

Product configurations (a) Distinctiveness requires a showing of secondary meaning

J) Trade dress and product configuration 1. Three basic principles: a. It's well-established that product configurations can be registered as TMs, though it is rarely done, & more generally can be & routinely are shielded by 43(a) of Lanham Act, which protects unregistered marks. b. Product configurations to be protected have to satisfy same standards of distinctiveness that are applied to regular TMs: they must be either arbitrary or suggestive (inherently distinctive) or if descriptive must have secondary meaning. c. To be protected, product configurations may not be functional. That is, they may not give the owner a competitive advantage. 2. 9th Cir. in Pagliero case adopted subsidiary doctrine of aesthetic functionality: a. If you're dealing w/products whose main attraction is aesthetic, then a beautiful design feature is functional. b. So the more attractive a product, the less likely it is to get protected. c. But most courts have rejected this now on the basis that it's necessary to curtail aesthetic functionality in order for trade dress protection to work, & trade dress protection is useful in preventing companies from free-riding on the goodwill built up by competitors' distinctive trade dress. 3. Theory of trade dress protection (oversimplified): based on a combination of desire to prevent consumer confusion & not to allow parasitism because it's unfair & unseemly. a. This is also a less conventional but also quite old motivation for TM law. 4. TF thinks trade dress doctrine "has gotten way out of hand" XIV.

Gaining and Losing Trademark Protection

A) Priority B) Distinctiveness C) Procedures in establishing protection

D) Losing protection 1. Abandonment 2. Impermisible licenses and assignments 3. Genericity XV.

Rights Encompassed Through Trademark Ownership

A) Infringement through consumer confusion B) Federal anti-dilution statute (Lanham Act 43(c)) 1. Plaintiff must show: a. Plaintiffs mark has a distinctive quality capable of dilution
i. ii.

Originality of the mark seems relevant Minority of courts require that the mark be strong or celebrated

b. Substantial similarity of the marks c. Likelihood of dilution through either

i.

Blurring of the marks product identification (a) Reduction of the ability of the mark to identify the plaintiffs goods or services

ii.

Tarnishment of the affirmative associations engendered by the mark

2. In determining whether a mark is distinctive and famous, a court may look at: a. Inherent or acquired distinctiveness b. Duration and extent c. Other factors on slide 3. Defenses to federal dilution claims a. Fair use in comparative commercial advertising b. Noncommercial use of a mark c. All forms of news reporting and news commentary 4. In practice a. Some confusion between circuits. Actual economic injury may be required, may not be. 5. Tarnishment a. Mostly accepted by the circuits to count for dilution purposes. b. Technically association with shoddy goods or services, but overwhelmingly association of plaintiffs mark with sexuality. c. Mattel case:
i.

Kozinski interprets safe harbor provisions (non-commercial use exception) in light of first amendment concerns to protect the defendants parody song.

6. Retroaction a. Statute has been held retroactive for injunctive purposes, but not for damages purposes. C) Protection for unregistered marks under the Lanham Act 43(a) 1. History a. 1946 adopted as part of the Lanham Act b. Initially narrow judicial interpretation
i.

False designation of geographic origin

ii.

False advertising

iii. Passing off when Ps mark has secondary meaning

c. 1960-88: Gradual expansion by lower courts to become general federal cause of action for trademark and trade dress infringement d. 1988: Congress approves the expansion generous remedies 2. Current coverage close to protection for registered marks a. Passing off b. Passing off through imitation of trade dress c. Reverse passing of d. Deceptive advertising
i. ii.

Misleading statements concerning Ds product Misleading statements concerning Ps product

e. Dilution of trade dress 3. Trademark expansion into copyright areas a. As in painters case (Tarkay), copyright is designed to protect things like fair use, idea/expression boundary; protects things like painters working off of the body of work of other artists. Trademark doesnt protect these areas isnt designed for it. 4. Parody problems a. Possible ways of handling parody cases
i. ii.

Tarnishment analysis Likelihood-of-confusion analysis

iii. Balance competing policies

(a) Publics interest in free expression v. publics interest in avoiding consumer confusion
iv. First amendment v.

Expressive genericity

vi. Modification of fair use doctrine

vii. Curtailment of trademark doctrine

b. Fair use doctrine in trademark law

i.

Descriptive uses of descriptive marks that have acquired secondary meaning (a) Oak Grove Fish Fry

ii.

Nominative uses of others marks of if: (a) Ps product or service is not otherwise readily identifiable (b) No more use of the mark than necessary (c) D does not suggest sponsorship or endorsement (d) I.e., radio station can run a call-in contest asking which of the New Kids on the Block is cutest, because theres no other way to refer to them.

XVI.

Industrial Design

A) Definition 1. Objects that are both useful and beautiful. Design of computers, pens, cars, etc. B) Patent protection 1. Utility patents a. Possible but difficult. b. Hard requirements:
i. ii.

Novelty Nonobviousness

iii. Utility iv. Enablement

2. Design patents a. More common. b. Easier requirements:

i.

Design (a) Appearance

(i) Only sight

(b) Ephemeral is OK
(i) Object doesnt have to be permanent; a fountain can be protected

(c) Unstable doctrine concerning protectability of parts

ii.

Primarily ornamental, not functional (a) Courts are a bit unclear on this one:
(i) Form dictated by function? (ii) Product of aesthetic skill and artistic conception? (iii) Visible?

iii. Novelty and statutory bar

(a) Different from any single prior-art reference or device (b) Overall impression (c) Ordinary observer standard
iv. Nonobviousness

(a) Scope and content of the prior art (b) Differences between prior art and claims (c) Level of ordinary skill in the prior art
(i) PHOSITA ordinary designer

(d) Secondary (objective) factors

(i) Commercial success (ii) Long-felt unsolved needs (iii) Failure of others

(iv) Industry acquiescence (v) Suggestions in prior art (vi) Fact that defendant chose to copy

c. 14-year term
i.

Lies outside the zone of patent protections in the TRIPS agreement, allowing the code to tinker with terms shorter than the TRIPS 20 years.

d. Infringement
i. ii.

No need for plaintiff and defendant to be competitors The 2 designs are substantially the same to an ordinary observer device which distinguishes it from the prior art

iii. The accused device must appropriate the novelty in the patented

C) Copyrightability of useful objects 1. History a. 1870 statute reaches fine art b. 1909 works of art, models, or designs for works of art c. 1910-1948 works of artistic craftsmanship insofar as their form but not their utilitarian design d. Continues to expand; see powerpoint slides. 2. Current doctrine a. Special rules applicable to three-dimensional utilitarian objects b. Physical separability test
i. ii.

Is the function part physically separate? A pencil sharpener housed in a replica antique telephone.

c. Conceptual separability test

i. ii.

Is form dictated by function? (Barnhart) Is the primary use of the article utilitarian? (Newmans Barnhart dissent)

iii. Is the aesthetically pleasing aspect of the article primary? (Keiselstein

Cord)
iv. Market test (Nimmer) v.

Is the object beautiful? (rejected by Newman in Barnhart)

vi. Temporal displacement test (Newmans favorite)

(a) Must stimulate in the mind of the beholder a concept that is separate from the concept evoked by its utilitarian function (b) Ordinary reasonable beholder
vii. Temporal displacement + added appeal (Polakov) viii. Intent of the creator (Denicola; Brandir) ix. Stand on its own as a work of art (Goldstein)

D) Trademark 1. Doctrine a. Now, both registered and unregistered product configurations are shielded from mimicking at least by competitors, and sometimes by noncompetitors. 2. Trade dress protection a. Trade dress extends to product configurations b. Design must be distinctive
i.

Now requires secondary meaning

c. Design features must be nonfunctional d. MORE!! Check powerpoint 3. Aesthetic functionality a. Pagliero
i.

Aesthetics necessary for competition are copyable in the interest of competitive enterprise. Aesthetics are protectable only if consumers are indifferent to them . . otherwise the design is functional.

ii.

iii. All jurisdictions have backed away from this.

b. Rogers v. Keene
i.

Posner looks at whether the feature is something that other producers would have to have in order to compete effectively in the market. Does not include features that only give products individual distinction.

ii.

4. Comparison a. See powerpoint slides for chart. 5. Alternatives a. See powerpoint slides for chart. XVII.

Trade Secrets

A) Sources of law 1. State law a. Common law (restatements) b. Statutes (Uniform Trade Secrets Act) 2. Economic Espionage Act of 1996 B) Subject matter 1. Restatement definition: a process or device for continuous use in the operation of a business. Includes: a. Information pertaining to the contents of or manufacture of a product b. Process of treating or preserving materials c. Information relating to business operations d. Computer programs; customer lists 2. UTSA expands protected matter to include: a. Single or ephemeral events b. Negative information
i.

i.e., a line of research didnt pan out

(a) May lead to waste in encouraging competitors to follow research that didnt pan out (b) May encourage more thorough searching of research

C) Requirements for protection 1. Information must have been secret initially a. Some courts add explicit novelty requirement 2. Plaintiffs must have made reasonable efforts to keep it secret 3. The information must be commercially valuable D) Rockwell 1. See chart in powerpoint slides. 2. Theory 1: Protect trade secrets in order to discourage rent-seeking (moving wealth around rather than increasing wealth) a. Evidentiary value: Precautions are evidence that D obtained secret through wasteful behavior b. Remedial value: If the plaintiff has allowed the secret to fall into the public domain, recovery against defendant would be a windfall 3. Theory 2: Protect TS in order to stimulate innovation a. Evidentiary value: Precautions are evidence that the secret is valuable, and its appropriate for the courts to devote resources to resolve the case b. Remedial value: same as theory one. E) Requirements for liability 1. Breach of confidence a. Confidential relationship b. Reliance on commercial custom and tacit understandings c. For relationships with employees, see infra 2. or: secret was discovered through improper means a. e.g. overflights, fraudulent misrepresentations, phone taps F) Remedies 1. Injunctions

a. Debate over length and breadth b. Not available after plaintiff obtains a patent 2. Damages a. Actual damages
i. ii.

Plaintiffs lost profits, or Defendants gains

b. Consequential damages c. Punitive damages d. Attorneys fees G) Constitutional takings 1. 5th Amendment private property taken for public use w/out just compensation 2. Monsanto trade secrets are private property if protected by state TS law. 3. A taking occurs if the law in effect at the time the owner submitted the information to the government gave the owner a reasonable expectation that the information would not be disclosed. H) Limits on use of confidential information by employees 1. If the information is a trade secret, employee is disabled if either a. she signed an enforceable agreement b. there was a confidential relationship
i. ii.

employer provided employee preexisting secret employer identified and supervised the project

iii. employer provided money and information for the project

2. If the information is not a trade secret, employee is disabled only if she signed a reasonable agreement a. Reasonable in time and area b. Necessary to protect the employers business interests c. Not harmful to the general public d. And not unreasonably burdensome to the employee I) Employer/employee rights to inventions 1. Courts routinely enforce pre-invention agreements a. Extremely common b. Some states restrict their scope by statute 2. In absence of agreement, inventions by employee in the course of employment belong to employee, but a. If employee is hired to do R&D, courts will imply agreement to assign all rights to employer b. If employee develops invention during working hours or using employers tools and materials, employer gets a shopright irrevocable, nonexclusive right to practice the invention. J) Doctrinal perspectives 1. Utilitarianism a. Consumer welfare presumptively enhanced by the absence of limits on the flow of information
i.

Enhances competition, etc.

b. IP protection justifiable only if essential incentive for production of ideas and information c. Defects of TS as opposed to the preferable patent law:
i. ii.

Fosters secrecy instead of public disclosure No time limits

iii. Protects info that would be produced anyway iv. Impedes mobility of skilled labor

d. Some economists propose eliminating trade secret law e. Rebuttal:

i.

Businesses would respond to withdrawal of TS protection with stronger shields for information: (a) Security precautions (b) Counterespionage (c) Limits on flow of information within the firm (d) Confining hiring to family members

ii.

Result: waste of social resources precautions

iii. Suggests: TS protection may be socially useful to avoid costly private

f. Protections
i.

Level one entry into unguarded/unprotected factories. (a) Permissible in TS law owner failed to take reasonable precautions.

ii.

Level two breaches of security that surmount level one precautions but could be protected by level two precautions (a) Forbidden (?)

iii. Level three one step up from level two

(a) Forbidden

g. If the purpose of TS law is utilitarian, then Type I and II espionage should be forbidden, and Type III permitted.
i.

Factory owner could just post a notice for Type I, which is more efficient. For Type III espionage, Dupont is never going to build a ceiling over their plant. Too expensive. So no social waste will ensue if we withdraw TS protection from that level of espionage.

ii.

h. Remember context point isnt to remove protections, its to shift protection to patent et al.
i.

Problem patents dont cover a lot of things that TS would. Order of established process, etc. Patent reflects a judgment that X is worthy

of 20 years of exclusive protection, whereas things worth 5 years would fall in the gap. Other countries cover some of this gap with petty patents.

2. Labor-desert theory a. Principles of simple fairness often derived from labor-desert arguments
i. ii.

Fourtek Type I l-d theory; just time and effort being protected

b. Critique: Holmes and Brandeis in INS 3. Personality theory a. Full development of personhood requires:
i. ii.

Control over if, when, and how to disclose ones ideas Access to relationships of trust, confidence, and teamwork

b. Protection of trade secrets is essential to preserve those opportunities c. Reinforced by standards of common morality d. Qualifications: trade secrets protection may threaten personhood by limiting mobility of labor XVIII.

Idea Submission

A) Is what? 1. X submits an idea to Y. Y then uses some variant of the idea without compensating X. 2. Typically, X is an individual and Y is a larger-scale operator. Someone with more economic clout. 3. Y is also generally the only plausible buyer of Xs idea. a. Not true with movie scripts. b. Means that Xs idea pertains to Ys operations. 4. X generally has no way of estimating the value of the idea. B) Doctrinal pegs 1. Idea as property a. Typical requirements: idea must be
i. ii.

Novel Original

iii. Useful iv. Reduced to concrete form

b. Trade custom may be relevant 2. Misappropriation a. U.S. Sporting

i.

Misappropriation claim must show three things: (a) Plaintiffs product was created through time, effort, skill and money

(b) Defendant competes with plaintiff and gains competitive advantage through free riding (c) Commercial damage to plaintiff

b. NBA (Motorola?)
i. ii.

Some jurisdictions are more skeptical than Texas in U.S. Sporting A hot news misappropriation claim survives preemption if: (a) P generates or creates information at some cost (b) Information is highly time-sensitive (c) D free rides on Ps efforts (d) D competes directly with P (e) Such free-riding would threaten the existence or quality of the service P provides

3. Express contract a. Disagreement over requirements

i. ii.

Some courts demand that the idea be novel, original, and concrete Some dont

b. Disagreement over enforceabilitiy of promises to pay made after submission c. Full array of contract remedies 4. Contract implied in fact a. Idea must be novel, original, and concrete b. Critical issue confidentiality of the relationship of the two parties c. Trade custom is relevant d. Typical remedy is the reasonable value of the idea 5. Quasi-contract a. Idea must be novel and concrete b. Wide range of views concerning the imposition of such duties c. Typical remedy: disgorgement of profits C) Idea submission problems 1. Mobil color scheme 2. Bud frog commercials 3. ABC pharmacological explanation for Elvis death 4. Chevrolet location of the battery and starter in the car 5. Eastern Airlines Plane Facts XIX.

Right of Publicity
1. State common law outgrowth of tort of invasion of privacy 2. State statutes a. Half of states recognize the doctrine b. Only Nebraska rejects it

A) Sources of the doctrine

B) Requirements

1. Celebrity status a. Generally not formally required, but necessary in practice b/c of commercial value requirement 2. Commercial value of plaintiffs identity 3. Identifiability a. The feature in question must be one the public associates with the plaintiff 4. Distinctiveness or uniqueness? C) Protected aspects of celebritys identity 1. Name (Cardtoons) 2. Likeness (Joe Montana, Three Stooges) 3. Voice (Bette Midler) 4. Rhythm and gestures (Lombardo) 5. Setting (Vanna White, Motschenbacher) 6. Clothes and posture (Vanna White) 7. Tag line (Johnny Carson) 8. Biographical facts (Jabbar) D) Protected interests 1. Protection varies with the purpose of the appropriation a. Only applies to commercial uses b. Information value not protected
i.

News reporting

c. Depiction value protected

i.

Identity used to sell something else (picture of the Three Stooges on a T-shirt)

d. Endorsement value protected 2. Descendible in 12 states 3. Alienable, by license or agreement E) Remedies 1. Injunctions 2. Damages a. Actual damages reasonable royalty b. Disgorgement of profits c. Punitive damages 3. Impoundment and destruction of offending materials 4. Attorneys fees F) Federal limitations 1. Copyright preemption a. RP cases may trigger 301 preemption 2. First amendment a. Zacchini b. Cardtoons
i.

Should read this case

c. Three Stooges d. Hoffman e. ETW G) Supplementary and alternative doctrines 1. State a. Public disclosure branch of the right of privacy b. Unfair competition claim (blurring or tarnishing) 2. Federal a. Copyright (for long slogans) b. Trademark c. Trade dress (43(a)) d. Dilution of famous mark (43(c)) e. Patent (e.g., possibility for athletic maneuvers) H) Possible justifications of right of publicity 1. Labor-Desert theory a. RP protects the right of the individual to reap the rewards of his labors (White in Zacchini) b. Variants of the L-D theory what types of labor are worth protecting:
i.

Time and effort (a) Sometimes applicable (b) Celebrity status doesnt always come from time and effort, but more often from chance.

ii.

Avoidance (a) Generally not applicable (b) People want to become celebrities

iii. Value-added

(a) Depends on whether cultivation of celebrities is socially valuable (b)

iv. Premium on creative labor

(a) Only sometimes relevant

2. Utilitarianism theory a. Incentives to cultivate celebrity status

i.

RP creates a powerful incentive for expending time and resources to develop the skills and achievements prerequisite to public recognition they enrich our society. (Bird in Lugosi) Critique (a) Extra incentives of RP may not be necessary people will do it anyway (b) Extra income may reduce incentives of celebrities to provide services (c) Rent dissipation excessive numbers of people seeking celebrity status

ii.

b. Prevent overgrazing
i.

Excessive use of a celebrities identity would reduce its advertising value, ultimately, to zero. Critique (a) Why is this socially bad? (b) Multiple uses of celebrities identity may increase, rather than decrease, its advertising power
(i) Network externalities recognition value of the celebrity goes up the more people see him or her

ii.

c. Consumer protection
i.

Avoid misleading the public concerning celebrity endorsement of products Critique: (a) Consumers are not currently confused (b) Circularity problem

ii.

(c) Unfair competition and 43(a) are adequate to address consumer confusion

3. Personality theory a. Control over presentation of self to public is crucial to selfdevelopment b. If celebrities are denied such control, people will avoid the limelight, reducing lifestyle options c. Critique:
i.

RP protections are poorly designed to advance these interests (a) Only commercial uses (b) No control over informational value

ii.

Better to use defamation and privacy doctrine

4. Social Planning theory a. Proliferation of celebrities enriches and enlivens culture b. Critique:
i.

RP threatens semiotic democracy (developed in detail in article in reading) (a) SD is when culture as a whole engages in meaning-making (b) Dont want Elvis impersonators to have to get his heirs permission to do a show

XX.

Limits on State Intellectual Property Doctrines

1. 1st Amendment a. L.L. Bean - state anti-dilution statute b. Cardtoons, Tootsie, Three Stooges right of publicity 2. Constitutional pre-emption (Art. I, Sec. 8, Clause 8) a. Preemptive force limited by Goldstein v. California b. Some people say that this removes IP entirely from state control c. Goldstein v. California
i.

A) Constitutional limitations

No preemption of state statute criminalizing copying of sound recordings Rationale (a) IP is not matter of fundamental national importance (b) Constitutional specification of for limited times applied to Congress, not to states (c) Policy arguments for letting states reach further than Congress

ii.

B) Statutory preemption 1. Preemption by Lanham Act - 39(b) a. States may not require alteration of a federally registered mark b. States may not require display of marks in a fashion different from the manner in which they were registered c. Result
i. ii.

Minimal preemption Thriving parallel body of state unfair-competition and trademark doctrine

2. Preemption by Copyright Act 301 a. State law is preempted if it satisfies all three of the following tests:
i.

The right it creates is equivalent to any of the exclusive rights in 106 (a) General scope requirement
(i) To be preempted, the state law must: (a) Encompass conduct coming within the general scope of one of the 106 rights (b) Not require the plaintiff to prove anything than he would have to prove to establish infringement under the Copyright Act

(b) 106 rights:

(i) Reproduce (ii) Derivative works (iii) Public distribution (iv) Public performance (v) Public display ii.

Right is in a work of authorship fixed in a tangible medium of expression 102 and 103. (a) Both subject matter requirements

iii. The work comes within the subject matter of copyright as specified by

3. Reverse engineering software under copyright law a. 107 reverse engineering object code to discern unprotectable ideas is fair use (Atari) b. 1201(f) circumventing access-control technology in order to identify elements necessary to make the program interoperable with other programs does not violate DMCA. c. But a shrink-wrap license, state contract law, is not preempted by federal copyright law since it requires extra elements (consideration, etc.) Can therefore prohibit reverse engineering via shrink-wrap licenses.
i.

Bowers

(a) SW license forbidding reverse engineering not preempted.

(i) Extra elements of mutual assent and consideration

(b) Dictum: Party bound by such a contract may claim efficient breach
(i) De minimis damages from merely discerning non-protected code

C) Preemption by patent statute 1. Major cases a. Sears and Compco

i.

State cannot create IP rights of a kind that conflict with the purposes of federal patents

b. Kewanee Oil
i.

No preemption of state trade-secret laws

c. Aronson
i.

No preemption of contracts for payment of royalties on un-patentable inventions

d. Bonito Boats
i.

State statute prohibiting direct molding preempted