IP Colorado Ohm Fall2011

School: Professor: Course: Textbook: 2010).
University of Colorado Law School Paul, Ohm Introduction to IP, Fall 2011 Merges, Menell, and Lemley's Intellectual Property in the New Technological Age (5th ed.
Intro to IP Outline, University of Colorado, Ohm Fall 2011
Intro to IP Outline Table of Contents

TRADE SECRET ............................................................................................................................ 3
Element 1: Protectable Subject Matter ...................................................................................................................................3 Element 2: Reasonable Efforts To Maintain Secrecy......................................................................................................4 Element 3: Misappropriation.......................................................................................................................................................5 Defense: Reverse Engineering ....................................................................................................................................................6
TRADE SECRETS & EMPLOYEES CONTRACTS .............................................................................. 7 PATENTS .................................................................................................................................... 9 Copyright ................................................................................................................................. 17
Requirements for Copyright Originality & Fixed .......................................................................................................17 Excluded Subject Matter: The Idea-Expression Dichotomy .....................................................................................18 OWNERSHIP: Works for Hire & Joint Works...................................................................................................................19 Works Made For Hire:............................................................................................................................................................... 19 Joint Works: (101): .................................................................................................................................................................. 20 INFRINGEMENT (Rights)............................................................................................................................................................20 RIGHT TO MAKE COPIES ......................................................................................................................................................... 21 THE DISTRIBUTION RIGHT ................................................................................................................................................... 23 PUBLIC PERFORMANCE & DISPLAY RIGHTS ................................................................................................................ 23 INDIRECT LIABILITY Third Party Infringement of (two-step analysis) ...................................................24 DEFENSES FAIR USE ............................................................................................................................................................25
TRADEMARKS .......................................................................................................................... 28
DISTINCTIVENESS (The standard for protection) ........................................................................................................28 PRIORITY AND THE REQUIREMENT OF USE (Acquiring Ownership) ..........................................................30 INFRINGEMENT Likelihood-of-Confusion and Dilution of Famous Marks...................................................31 DILUTION OF FAMOUS MARKS ...............................................................................................................................................33
TRADE SECRETS
TRADE SECRET
In General: Trade secrets are defined as information that is (1) economically valuable because it is not generally known and (2) is the subject of reasonable efforts to maintain secrecy. They do not grant a set of exclusive rights like other IP, rather they protect from wrongful access. They are usually protected under state law, mostly based on Uniform Trade Secret Act (statutory). There is no registration of a trade secret, no agency enforcement, and no definite term (just as long as it stays a secret). Three ELEMENTS of a T/S claim: 1. Type of info TS law meant to protect (very broad): (1) Any information that is economically valuable because it is kept secret AND (2) Must actually be a secret 2. P took reasonable precautions to maintain secrecy 3. D misappropriated the information (acquired wrongfully) by (1) improper means, OR (2) Breach of confidence
Element 1: Protectable Subject Matter

A. Must be type of information TS designed to protect = confidential information that helps companies compete in marketplace (customer lists, formula, product design, processes, business plans, and marketing strategies, know-how, software, key contracts) 1. Valuable Information that derives economic value from secrecy; Metallurgical: a compilation or collection of public information may be a trade secret. Even if all the individual elements are not secrets, the way the P put them together may create independent value. (furnace modifications were a valuable trade secret because it improved a process, making it cheaper than alternative and better product, p.39) 2. Costs or effort to develop secret is evidence its valuable: information must not be readily ascertainable by others (i.e, not valuable if could be obtained easily and relatively cheap) Lockean Labor justification: equitable underpinnings of TS law B. AND, must actually be a secret. = Not generally known or readily ascertainable by others in the industry 1. Subjective belief that a secret exist is evidence of a secret: Security measures cost money and if P believed competitors already knew about the information involved, it would not have incurred these cost (Metallurgical, reasonable precautions are evidence of secret: hidden from public view, restricted access signs, NDAs) 2. BUT, secrecy does not need to be absolute. Allowed to share to a limited extent to further economic interests. Factors: disclosure is sufficiently limited to maintain status as a secret if: a. Party does not publicly release the secret (Metallurgical, only employees knew the secret) (cf. to Patents in public domain) b. Limited disclosure to further economic interests (Metallurgical, info shared with furnace manufacturers as part of business transactions, by which it expected to profit: gave license for royalty payments) c. Confidential relationships: either explicit or implied (Metallurgical, P bears burden of proving, and failed, but ct still found limited disclosure) 3. POLICY: Known vs. Knowable Debate (what do we mean by secrect? depends on if the underlying theory for protecting TS is tort law or property rights ): a. Known: ( friendly) Allows company to protect information that could have been acquired properly, but was not. (Rohm&Hass, D memorized and sold paint formula, ct held still a TS even though previously published) i. Rest of Torts: even if knowable, i.e. you could have gone onto public domain rather than stealing, still will be in trouble because law is the maintenance of commercial morality b. Knowable: ( friendly) once secret is readily available through public sources, it loses all protection (UTSA) i. Property Rights: TS is valuable, something we want to incentivize; so if its knowable then not doing enough of what to incentivize
TRADE SECRETS 4. Cf. Patent: TS does not require strict novelty (someone else may have already thought of it or may be using it) only need modicum of originality to separate it from everyday common knowledge. a. Patent law meant to encourage invention thus, grants exclusive rights b. S law meant to protect against breach of faith, thus does NOT grant exclusive rights, rather provides remedy if secret misappropriated C. SIX FACTORS FOR DETERMINING IF TS (Rst of Torts): 1. How widely is the idea or information known outside the business? 2. Who within the company knows the idea or information? (should limit disclosure to employees on a need-to-know basis to perform job, and then get nda) 3. What measures taken to ensure info remains secret? 4. How difficult would it be for others properly to acquire or duplicate info? 5. How valuable is the idea or information to the claimant and its competitors? 6. How much effort or money expended in developing or acquiring the info?
Element 2: Reasonable Efforts To Maintain Secrecy

A. TEST: Reasonable amount of precautions under the circumstances depends on a cost/benefit analysis. P could have taken more precautions, but at a cost. The issue is if the additional benefit in security would have exceeded the cost. 1. Perfect security is not optimal security (Rockwell, vault, confidentiality Ks, and sign out process to keep piece part drawings secret was enough)But lax and inconsistent precautions not sufficient to qualify for trade secret protection (ECC, even though information was not actually known to outsiders, cts will not provide protection if company itself does not treat info as a secret valuable enough to take measures to protect) 2. Policy: Precautions show secret has value and worth expense of legal remedy; TEST: cost of litigation < precautions necessary to optimally protect c/a 3. UTSA (statutory) vs. Rest of Torts (c/law) a. UTSA= trade secret is something that is 1) not generally known; and 2) subject of reasonable efforts to maintain secrecy b. Rest= does not require reasonable precautions; precautions are relevant as evidence of determining if something qualifies as a secret; If value and secrecy of info is clear, might not need evidence of specific precautions B. POLICY: Why require reasonable steps? (depends on justification of TS protection) 1. Deterrence (TS is property protected against wrongdoer): P must prove D obtained secret by a wrongful act OR prove little probability D got through lawful means a. Evidentiary Significance: greater the precautions taken, more likely obtained wrongfully; b. Remedial Significance of efforts: if info in public domain, then P can lawfully obtain property if in hands of someone who committed no wrong to get it 2. Protect TS to stimulate innovation: (property protected against the world) a. Evidentiary significance: Precautions are evidence that the secret is valuable, and its appropriate for courts to devote resources to protecting; b. Remedial Significance: If info was not worth enough for owner to expend resources on protecting it, then why should the courts provide him with a remedy? (analogy to abandoned property) If the P has allowed the secret to fall into the public domain, recovery against D would be a windfall 3. Posners Law & Economics: extravagant protection measures would hurt incentives to discover more efficient methods (cf. Patent: precaution is costly and temporary, so not adequate substitute for competitiveness of industry)
TRADE SECRETS C. FACTORS FOR REASONABLENESS 1. Value of the Information: if more valuable, may require spending more to protect 2. Need To Disclose Information to Exploit It: employees need to perform job duties. Reasonable measures may require ensuring trustworthiness or NDA (Ex. if chemical formula or blueprint for machine: Metallurgical, shared furnace modifications with manufacturer) 3. Limits on the Disclosure of the Information: was it disclosed only when necessary to further business purposes, and did advantages of disclosure outweigh possible risks of further disclosure 4. Means Taken to Maintain Confidentiality When Disclosure is Made: was a NDA or confidentiality agreement required prior to disclosure 5. Physical Limitations on Access: physical inaccessibility (fences, locked doors), restricted access to areas, locked files (Rockwell, vault good, but ECC, informal tours, and public open house: bad) 6. Keeping Records: did they know where copies and kept record of who had access or were or was extent of disclosure unknown (Rockwell, sign out process for piece part drawings) 7. Notice: Were Employees Informed of Restrictions?: stamping documents Confidential and statement outlining what is considered secret Even if employees were expected to know confidential, without explicit notice, info might seem ordinary (ECC, obligation to inform EE certain info is secret where claimed secret is not obvious; cf. motor specs to a secret formula) a. Confidentiality procedures signal to others info is secret b. Notice also acts as warning owner will take legal measures to enforce rights c. Fencing = reasonable precautions are those that put infringer on notice (1st Cir requires affirmative steps, not merely ordinary discretion) 8. Industry Standard: reasonable care compared to industry practice (ECC, where espionage was not common, physical security measures not reasonably needed, but where employee turnover rate was high, NDAs and other confidentiality procedures reasonably required to reduce risk of inadvertent disclosure) 9. Overall Security Program: (*strong support of reasonable measures) did owner have a program in place and substantially comply with program plan? (ECC, lax and inconsistent with NDAs) a. Inadvertent disclosures and isolated mistakes do NOT nullify reasonableness of program (Rockwell, program reasonable even though did not always enforce requirement that drawings be returned or destroyed) 10. Cost of Security Measures: includes indirect costs beyond simply administrative and security costs. Restrictions reduce productive use (less happy employees, lost opportunities for more efficient use) Determining scope of access requires company to weigh many possible risks (of wrongful loss), costs (security measures, indirect costs) and benefits. (an overall security program is strong evidence because cts are reluctant to second-guess these company decisions)
Element 3: Misappropriation
(make sure have first established a existence of a TS that can be misappropriated and Plaintiff must always be able to identify specific information that qualifies as TS) A. In general: misappropriation not same as infringement (nature of the wrong is not infringing anothers exclusive right, but rather improperly gaining or exploiting access to info) 1. Misappropriation = improperly, acquiring, disclosing, or using a TS (Includes using or disclosing a TS acquired by mistake or accident) 2. NOT misappropriation: (DuPont) a. if put in time and money to discover TS independently, or b. if holder voluntarily discloses, or c. if holder failed to take reasonable precautions (then no trade secret, and thus no misappropriation, ECS) (lack of security does NOT need to cause disclosure bc no TS) d. Improper means to acquire information on patented process (no TS, information in published patent, i.e. public domain)
TRADE SECRETS B. BY IMPROPER MEANS 1. Can still be improper even if no trespass, tort, or other illegal act, or breach of confidence. (Can be improper even if only harm caused is to the interest of the TS) a. Includes acts that violate standards of commercial morality but are otherwise legal (DuPont, airplane spying was misappropriation of secret unpatented process because only way P could have prevented the espionage was to construct a temporary roof over the construction site, too costly) b. Tort Theory: if misappropriation limited to torts, then TS law largely redundant (wouldnt need TS law bc could find protection under tort law) 2. TEST: Balance type of thing done with how much it would have cost to prevent: Could espionage have been reasonably anticipated or prevented? Link to issue of reasonable standards of security (DuPont) a. Policy: if cost of protections required to prevent would dampen inventiveness, drawing line at school boy tricks) b. Note: Does not mean everything hidden from plain view is protected or that all info obtained through any extra optical extension is forbidden 3. Evidence: Proving misappropriation (p.70) a. Circumstantial evidence of misappropriation: Holden Seeds, proved highly unlikely hybrid seeds developed independently (genetic similarities) was sufficient even though plaintiff could NOT prove a specific act b. Cf. Actual Objective Evidence required: Phelan, speculation of theft based on Ds speed entering market place was not enough C. BY BREACH OF DUTY/CONFIDENTIAL RELATIONSHIP [review case notes] 1. Confidential relationship can be established under the following circumstances: a. An explicit agreement, or b. OR, an implied agreement: (1) person to whom the secret was disclosed knew or had reason to know that the disclosure was intended to be in confidence, AND (2) the other party to the disclosure was reasonable in inferring that the person consented to an obligation of confidentiality (Rst3 Unfair Competition) 2. Where there is no express restriction or limitation, a confidential relationship will be implied if the D knew and understood that the information accepted was subject to a limited purpose: (Smith v. Dravo, p.71 Plaintiff disclosed shipping crate design for one purpose only, purchasing the business, AND D knew and understood this limited purpose (note: not a close case, ct used language like clear)
Defense: Reverse Engineering

A. Elements of Reverse engineering = (1) obtaining a product by lawful means AND (2) working backward to find the method by which it was developed; Reverse engineering is an affirmative defense to misappropriation (note: so is independent invention) 1. To Rebut: P needs to prove D used improper means by showing: a. (1) D actually stole specs, OR b. (2) reverse engineering impossible, so highly unlikely acquired by proper means (by inference) 2. Kadant, mere speculation that it would be too costly, but not impossible, is NOT sufficient to support inference D actually stole TS or breached confidentiality agreement; Can NOT rely on inference of improper means if: (1) product sold in public domain (i.e., could be lawfully acquired) AND (2) reverse engineering was NOT impossible: 3. BUT Data General, where P took significant steps to protect secrecy of computer program sold on the open market, D may have burden to prove they had legitimate access (Ct found misappropriation where secret program embedded in object code, and users signed licensees agreeing not to disclose to third-parties)
TRADE SECRETS B. RULE: Basically, If you have something that you are putting into the stream of commerce you have to deal with this allowance for reverse engineering. There are things you can do to protect the process, but still gotta deal (Data General) 1. Contracting around? Agreements not to reverse engineer between purchasers and sellers are sometimes enforceable (Cts split) Chicago Locks Case: locksmith went to consumers and had them reverse engineer to acquire tumbler codes. Ct held info acquired by proper means because consumers had legally acquired the locks and had no duty to manufacturer not to disclose. [look this case back up] 2. POLICY: Channeling Doctrine: WHY allow reverse engineering? Because it weakens TS protection relative to patent protection C. Typical TS Cases (EE p.445) 1. Business v. Former Employee 2. Employer v. Next Employer 3. Business v. Former Partner or Former Potential Partner 4. Inventor v. Buisness 5. Business v. Competitor 6. Business v. Person Who Makes Info Public
TRADE SECRETS & EMPLOYEES CONTRACTS

A. RULE: (C/L) EEs know-how is not TS. (In theory, an ER generally may not inhibit the manner in which an EE uses his general knowledge, skill, and experience, even if these were acquired during employment.)BUT competing rights when EE know-how inextricably with ERs TS and EE has an implied duty of confidentiality to protect employers TS based on EE relationship 1. POLICY: Involves clash of rights between Companys right to protect from unfair competition vs. an Employees freedom to pursue chosen profession) TEST: weigh equity considerations and public policy (Issues arise when EE know-how is bound up with information that constitutes employers competitive advantage; thus, implicates countervailing polices ) 2. ex. Intangible Customer Lists: issue: client lists are protectable TS, but enjoining employees from calling limits ee mobility)(88-89) a. Compromise: draw line between ee announcing her departure and actively soliciting old clients to follow her (Moss Adams) b. But, if info qualifies for TS protection, an express contract will probably be enforced according to its terms (MorLife, passage of UTSA cf to above) B. ABSENCE OF EXPRESS AGREEMENT (NO K): 1. Line between EEs general knowledge and skills vs. specific inventions: EE entitled to take his general knowledge, but cant have specific inventions (Wexler, although chief chemist, not hired to invent so allowed to take formulas he had developed to new job) 2. TEST for Inventions: c/law obligation to assign inventions a. Hired to Invent then employer owns invention (confidential information) b. Shop Right If EE invents on ERs time or using its resources i. EE owns the invention; ii. ER compensated w/ a limited, nonexclusive right to practice invention c. Independent Invention EE invents on own time outside of employment
EXPRESS AGREEMENTS (3 Types)

A. Confidentiality Agreements (NDA): Places clear explicit duty on employee not to disclose or improperly use described confidential information; (Note: if not all recipients of confidential info sign NDAs, may imply other recipients; are not subject to implicit obligations of nondisclosure, ECC) 1. Maj RULE: Reasonable K restrictions enforceable even in the absence of a protectable TS (but see freedom to create statutes); a. Requires Consideration: in CO: continued at-will-employment is NOT sufficient consideration; ER will need to offer more to get EE to sign at later date)
TRADE SECRETS 2. Benefits: EE may already owe an implied c/law duty of confidentiality, but the express agreement (1) strengthens any notice issues and (2) may extend protection beyond just TS (breach of K); (3) Also helps prove reasonable precautionary steps B. Invention Assignments: Gives ER right to IP created by employee while employed; Trailer Clauses: a contractual provision that extends assignment to cover inventions made by the employee for a certain time after employment. Enforceable if reasonable. C. Noncompetition Agreements: Limit circumstances in which former EEs can compete for customers with their former Ers (Benefits: avoids having to prove EE actually stole and used TS) c/Law rule: enforceable if reasonable in scope; 4 Types Of State Regimes: (first, ASK what j/d to see if enforceable) 1. (Min RULE, CA) = Invalid based on public policy: Edwards v. Arthur (91): non-competes are unenforceable (presumptively void) except under narrow statutory exceptions; (note: can prevent EE from using your TS, just cant prevent new job) a. Exceptions: agrmts ancillary to sale of a business (as long as reasonable) b. Policy: CA values open competition and employee mobility over protection of TS and other IP. (Saxenian, p.100: effect of non-competes) 2. (Maj RULE, VA)= Reasonable Restraints Test: non-compete is only enforceable if it is reasonable as to duration, geographical area, and type of employment or line of business; Cts do not look favorably and will strictly construe against ER. ER has the burden of proving restraint is reasonable; a. 3-PART TEST = ASK is restraint reasonable from perspective of i. ER: Is it no greater than is necessary to protect ER? ii. EE: Not unduly oppressive on ability to earn a living? iii. Third-Party: Sound public policy? b. CTI v. Software Artisans (96): upheld an agreement that prevented EE from competing w/ ER anywhere in the US for 12 months as reasonable (even though no TS or copyright involved) because ER had offices, clients, or prospects in many states throughout country i. When an EE has access to confidential and TS information crucial to the success of the ERs business, the ER has a strong interest in enforcing a covenant not ot compete because other legal remedies often prove inadequate. ii. Gateway v. Kelley: Older agreement invalid when company later adopted a less restrictive noncompetition provision, because it suggest the older, broader one was not necessary to protect its interests iii. Modern Environ: Invalid where prevented working for a competitor in any capacity, rather than specifying particular positions ee couldnt take 3. New York = limits enforceability of non-compete agreements to situations where TS are likely to be used or disclosed if employee is allowed to compete (Reed Roberts) 4. CO = usually are void except in for executives and managers. (professional staff) 8-2-113 D. Doctrine Of Inevitable Disclosure Of Ts: PepsiCo v. Redmond Pepsi successfully sued to enjoin D, its former GM, from taking a job at Quaker. Ct held that Pepsi met burden of proving more than just that skilled employees were taking their skills elsewhere. 1. RULE: A former EE may be enjoined from taking a new job if: a. (1) He knows the former ERs TS; b. (2) His new job duties are so similar to former position it would be difficult for him not to rely on or use those trade secrets; and c. (3) The former EE or his new ER cannot be relied on to avoid using the TS 2. Policy: (theres something about TS law) Once a TS is disclosed cant take it back, thus an injunction is required here to fill the gap in TS law (Ct rejected the new employers arg to let him work for us and wait to see if he discloses, then youll have a c/a for sure) E. Nonsolicitation Agreements = NO actionable wrong is committed by a competitor who solicits or hires away his competitors EEs who are not under contract, so long as the inducement to leave is not accompanied by unlawful action.
PATENTS
PATENTS
A. Patent Basics 1. Right created by patent ownership: owner of a patent can prevent others from making, using, selling, offering for sale, or importing (make, use, or sell) the product or process of the patent. a. NOTE: A patent holder does NOT have the exluscive right to make, use, sell, offer, and import the invention. Rather, she has the right to exclude others from doing those things, not necessarily the right to do them herself. 2. Duration: 20 years from when inventor first sent in his application ( then enters pub domain) 3. Negative right: a patent is a negative right and does not by itself authorize the patent owner to make, use, or sell the product (e.g. a patented drug must still get authorization from the FDA) 4. Blocking patents: the holder of an improvement patent has right to exclude everyone, including holder of broad patent, from using improvement, but is also barred from the use of the improvement herself 5. Envelope right: a patent is the only type of IP that a party only owns when the government has awarded the right (by sending an envelope with the official patent document) 6. Jurisdiction: all patent appeals cases go to Ct of Appeals for the Fed Circuit (created in 1982) 7. Some definitions: a. Patent examiners: people who work at the Patent and Trademark Office (PTO) b. Patent agents: people who work for law firms doing patent work c. Patent bar: specialized bar that agents and examiners must pass d. Patent prosecution: the process of trying to get a patent approved (1 to 4 year process, average of 2.77 years) B. Theories Behind Patent Law 1. Utilitarian: patent law provides an incentive to future inventors to create inventions by promising them a temporary, exclusive right to make, use, or sell their inventions. 2. Economic theory: inventions are public goods that will be under-produced by the markets. Patent law makes inventions private property, ensuring that the market will produce them in more efficient amounts from societys perspective. C. 5 Requirements for a Valid Patent: Patent applicants must demonstrate each of five elements: 1. Patentable subject matter 2. Novelty 3. Utility 4. Nonobviousness (most important: the ultimate condition of patentability) 5. Enablement
Elements of Patentability (5 req for a valid patent)

A. Patentable Subject Matter (4 categories): 101: any process, machine, manufacture, composition of matter, or improvement thereof 1. Process a. Business method patents: are permissible, but not if the business method is in fact an abstract idea (Bilski, energy hedging is an abstract idea and therefore NOT patentable, SCt refuses to say categorically unpatenable) i. Examples: Benson (algorithm for converting binary abstract idea), Flook (method of monitoring catalytic conversion, more limited in application than benson abstract idea), Diehr (method of monitoring rubber curing with a computer process, b/c it was an application of a law of nature to a new process) b. Machine or transformation test: an invention is a process and thus patentable subject matter if it is tied to a particular machine or if it transforms something into a different state or thing (Bilski: a clue or important example)
2. 3. 4.
5.
PATENTS Not exclusive test: The machine or transformation test is one test, but not the only test, to determine whether an invention is a process for 101 purposes; better for industrial age, might not be so good for information age c. State Street test: an invention is a process only if it leads to a useful, concrete, and tangible result. Maybe not good law anymore after Bilski, but not explicitly overruled. (Breyers concurrence says it's a bad test that has led to absurd patents) d. Stevens Bilski concurrence: business methods should not be patentable because they are not processes, they were not historically patentable subject matter, and they are not within constitutinal purpose of patent law to promote the useful arts because there are other incentives to create new business methods (first mover, trade secret, efficiency) e. Preemption & Underlying Policy of patent law: the things which are worth the public embarrassment of an exclusive patent must outweight the restrictive effect of the limited patent monopoly Interpret to determine not only what is protected, but also what is free for all to use i. Ask: considering process as a whole, does it perform a function with the patent laws were designed to protect (e.g., transforming or reducing an article to a different state or thing). Machine Manufacture: might include genetically engineered bacteria (Chakrabarty, p. 134) Composition of matter: includes genetically engineered bacteria ( a. Chakrabarty, genetically engineered bacteria used to treat oil spills patentable because was nonnaturally occuring; A product of human ingenuity having a distinctive name, character, and use: A new bacterium w/ different characteristics from any found in nature; Potential for significant utility; Not natures handiwork but his own, p. 134) or improvement thereof a. NON-PATENTABLE subject matter: includes laws of nature, physical phenomena, and abstract ideas. i. NOTE that Chakrabartys bacteria was not a physical phenomena because it would not have happened without his intervention (cf.Funk Bros, a previously unknown natural phenomenon unique combination of bacteria for nitrogen fixation is NOT patentable, beacuase it was a handiwork of nature: served ends nature originally provided and act independently of any effort of the patentee, note case, p. 142) b. RULE: if an invention does NOT fall within one of the three exceptions, then most likely it is patentable subject matter, statutes categories a broad (Chakrabarty, p. 134) c. Purification exception to the product of nature doctrine: (gene patents) the gene as it occurs in nature is NOT patentableBut an isolated or purified form of the gene is not a product of nature and substance may be patentable (not just the process of extracting it) if for all practical purposes it creates a new thing (Parke-Davis, isolated and purified adrenaline extract is patentable, p. 142) d. New commercial and therapeutic things: even if substance occurs in nature (genes, hormones, or other chemicals), the purified form more likely to be patentable subject matter if it is a new thing commercially and therapeutically, (a corollary to the purification exception Parke-Davis, p. 142) e. Moral neutrality: courts do not evaluate the morality of patenting living things or DNA sequences. (gruesom parade of horribles is a policy issue for Congress, Chakrabarty)
i.
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PATENTS B. Novelty: if an invention is anticipated in the prior art it cannot be patented; 1. Invention must be new= (1) must be new when she invented it; and (2) even if she was first to invent, once invention becomes public knowledge, she has 1 yr. to file an appliation (old law) a. THEORY: Patent Law is Great Quid pro quo: Trade off: We give you this 20 yr. monopoly (might not be best for economics) but we do so because you are giving us this great thing: knowledge of your invention If its not novel then trade off falls apart i. Thus, its not infringement for people to read and try to understand your patent 2. Defining prior art (all things published or in public use) a. Old law: Two ways invention was not novel: i. Use or knowledge: if the invention was known or used by others in the US, it cannot be patented. (strong corroboration requirement: proved with photos or documentation witnesses and oral evidence alone not enough for clear and convincing standard, Flowertree). 1. use need not be obvious or even accessible to the public to qualify as public use, the nonsecret use of a claimed process in the usual course of producing articles for commercial purposes is a public use. (Rosaire, use of a process by a few engineers in Nowhere, Texas was a public prior use, where done openly i.e. he didnt swear everyone to secrecy and no efforts to conceal from public, p. 210) 2. Secret or experimental prior uses: but, if the only prior use of an invention was secret or experimental, the invention is still novel for 102 purposes. ii. Printed document category: if the invention was patented or described in a printed publication in the US or a foreign country, it cannot be patented (only public documents count). iii. But did NOT require absolute novelty: nonpublic use, invention used in another country, or written about w/o publishing woud NOT bar a patent b. New Law: 102(a): Classifies Prior Art as items patented, described in a printed publication, or in public use, on sale, or otherwise available to the public (removed: known or used by others) i. Expands the scope of potential prior art: If the claimed invention was otherwise available to the public before its effective filing date, it is not novel (with exceptions, see below) ii. Catch-all phrase: what does it mean to be otherwise available to the public iii. On sale and in public use activities no longer limited to the US iv. A third-party application will count as prior art as of its effective filing date once that application is published or patented 102(a)(2) 3. Reason for novelty requirement: w/o a novelty requirement, we would limit the use of existing inventions and shrink the sphere of public knowledge (relates to basic policy rationale for patents) 4. Critical Date: Invention date effective filing date: removes all verbs to figure out who was first to invent: (lowers litigation costs); Also removed known or used by others in this country: makes patentees happy: doesnt matter anymore if someone else knew about it; cant sit on knowledge and try to invalidate patent; a. Known or used otherwise available to the public (What does it mean for knowledge to be available?) 5. Inherency Doctrine: references in prior art also include elements that, although not expressly state, are necessarily present in the product or process; BUT doctrine limited: a process will not be anticipated when it occurred only as an accidental and unwitting by-product in some previous process (Tilghman; but see Ansonia in reading notes)
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PATENTS C. Utility: an invention must be useful in order to be patented; 1. Minimal obstacle: denied only if an invention has absolutely no practical utility (Satisfied even if only works in an experimental setting and has no proven use in the field, but must actually work, might be useful not enough, Brennan) 2. No hunting licenses: the utility requirement requires that an inventor know the usefulness of his invention at the time of application. That is, an inventor cannot patent an invention in anticipation of future usefulness. (Manson, steroid whose homologue was useful but whose own use had not been identified not patentablenor was the process: until you establish that he steroid itself is useful for something, a process that creates a product without utitlity is not sufficient p. 167) a. Other uses: have to show utility but doesn't have to be the fundamental utility; Even if a use that you didnt contemplate arises from the patented process, its still yours even if much more valuable then you imagined b. Blocking patents issue: courts are wary of awarding patents to inventions with broad applicability, such as chemicals, that could be used to block the use of the invention in other contexts (Manson) (e.g. leather treatment substance used to treat AIDS) 3. Substantially useful requirment: an invention must be substantially useful to be patentable. An invention used merely to identify something else for which the use has not been identified is not patentable (In re Fisher, EST to identify presence of gene not substantially useful, p. 172) a. Dissenting argument: ESTs are like microscopes, plus denying patents will make inventors rely on trade secrets, which are not as good for society. 4. Moral utility: even if purpose is to deceive consumers may nonetheless meet utility requirement, as long as benefit is functional in nature (not only aesthetic or descriptive qualities). (Juicy Whip, swirly fluid not same as what was dispensed, still useful, making something look like something else. Go to other govt areas if you think this is fraud or to health inspector if you think unsanitary) D. Non-obviousness (103) 1. NEW LAW = 103 Obviousness: Whether the claimed invention as a whole would have been obvious at the time the invention was made before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.. a. No patent if claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art b. Considers obviousness as of the effective filing date, not at time invention was made 2. Underlying Policy: Things which are worth the public embarrassment of an exclusive patent must outweigh the restrictive effect of the limited patent (Thomas Jefferson) a. Jefferson: Patent monopoly was not a natural right; rather it was a reward, and inducement, to bring forth new knowledge Problem: Need to develop some way to weed out those inventions which would not be disclosed or devised but for the inducement of a patent. 3. Analysis for obviousness (John Deere, slight variation on plow shanks design obvious, p. 235) a. Step 1. Consider the Scope and content of the prior art. b. Step 2. Differences between the prior art and the claims at issue i. whats the problem faced, (e.g. comp clam shell case issue of fastenining and size restraints: prior art included cabinets and hinges) c. Step 3. Level of ordinary skill in the art i. (e.g. would a programmer have found this obvious at time of filing?) ii. When should PHOSITA be able to put multiple pieces of prior art together? d. Step 4. Consider the three secondary considerations (p.265) i. Commercial success ii. Long-Felt but unsolved needs iii. Failure by Others
12
PATENTS 4. Danger of hindsight bias: the court must evaluate what the PHOSITA would have thought before seeing the invention in question. 5. Combining references: asks if a researcher who is aware of all the prior art would think to create claimed invention; ok to analyze combination of ideas from different sources of prior art; a. Under 102 (novelty), if a prior art reference does not disclose all the parts of an invention, it does not anticipate the application and is thus does not a bar b. However, under 103, a single reference doesn't need to disclose entire invention to bar a patent 6. KSR International: an invention that does no more than combine the teachings of prior art into one new invention is likely to be obvious and not patentable (KSR, adjustable pedal with sensor on support structure was obvious because it did no more than combine two earlier teachings, p. 247). If an invention is predictable based on the prior art, it is likely to be obvious and not patentable (KSR). a. TSM test: the old test for obviousness held that an invention was nonobvious if there were no prior teaching, suggestion, or motivation. KSR finds this test too restrictive and not the ONLY test, though it is still useful and was not overruled. b. Person of ordinary creativity: in deciding whether combining prior teachings was obvious, courts should consider a PHOSITA to be a person of ordinary creativity as well, not an automaton (cts have flexibility) (KSR, a person of ordinary creativity will look beyond the primary purpose of prior art to ways that ordinary art can be adapted to new purposes) c. Obvious to try: sometimes a demonstration that a combination of prior art was obvious to try will be sufficient to demonstrate obviousness (KSR) E. Enablement: the invention must be described sufficiently that a person trained in the relevant art can replicate the invention (not covered in class) F. Statutory Bars to Patents (old) 1. NOTE: statutory bars are conceptually distinct from the novelty requirement. Statutory bars are a loss of right provision that can bar a patent applicant from obtaining a patent because of the applicants own actions (though others actions can bar him, as well). 2. RULE: (102b) a patent application will be denied if, more than one year prior to the application date, the invention a. was patented in another country b. was described in a printed publication, in the US or another country i. Even an obscure publication will count, as long as it is public (In re Hall, German PhD thesis, p. 216). Also, general library practices will be relied upon to determine the date the publication was available (In re Hall). c. or, was known, publicly used, or sold in the US. i. Even limited public uses known by only a few people count (Egbert, public use where allowed a close friend to wear an invented corset under her clothing, for some years, p. 220). d. But NOT experimental uses by the inventor undertaken for purposes of testing the product, even if it has public aspects, Elizabeth v. American) 3. Reason for statutory bars: to avoid detrimental reliance i.e. it would be detrimental if others relied on an invention before it was patented and then the patentee could sue these others for infringement
13
PATENTS
New Patent Reform: The America Invents Act (AIA)

y NOVELTY: 102. Conditions for patentability; novelty and loss of right to patent: A person shall be entitled to a patent unless (a)(1) the invention was known or used by others in this country, or 2 patented or described in a printed publication in this or a foreign country,4 or in public use, on sale, or otherwise available to the public3 before the invention thereof by the applicant for patent the effective filing date of the claimed invention,1 or (b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, or Critical Date: Invention date effective filing date; o Also removes all verbs to figure out who was first to invent: Lowers litigation costs Removed known or used by others in this country: makes patentees happy: doesnt matter anymore if someone else knew about it; cant sit on knowledge and try to invalidate patent; o Known or used otherwise available to the public (What does it mean for knowledge to be available?) in public use, or on sale used to be in (b) now that statutory bar section is removed; also added on sale and otherwise available to the public o Used to be two ways of telling patentee their invention was not novel: Someone knew about it in this country before you invented Someone published this before you invented o But had (b): once in public knowlege had a grace period of a year: (usually referred to something the inventor did; grace period gave them time to raise funds) Publication always applied to foreign, but now Public Use on Sale or otherwise available to the public are also world wide
1. 2.
3.
4. y
(b) EXCEPTIONS: for 1 yr. allowed to disclose this thing without destroying novelty of your invention o What does disclosure mean since its not defined?Patentees NOT happy: had this clear 1 yr. of things could do like public use or put on sale; now what? o Whole point of the year was commercialization (meet with VC, etc.), now may lose novelty *Test Note: not going to ask how law changed, going to ask how to apply; Need to master what we did and why to see how it will affect case law: Understand who is happy: Patentee or Possible Infringor? Note: remove verbs -> patentees happy; add verbs: infringers happy
A. Novelty 102(a): Classifies Prior Art as items patented, described in a printed publication, or in public use, on sale, or otherwise available to the public (see under novelty above) B. Exceptions 102(b): Narrower Grace Period Disclosures made 1 yr. or less before effective filing date will NOT count as prior art if: By the inventor; Derived from the inventor, or After the inventor had already publicly disclosed However, key term disclosure is undefined and it is unclear whether exception applies to all types of prior art including on sale activities C. Patent Races and First-to-File: Patent awarded to first to file a patent app; (Likely result in more provisional patent apps) 1. Eliminates current 102(g) and issues in determining who was first-to-invent (such as interferences, and questions of conception, diligence, reduction to practice, abandonment, suppression, and concealment 2. However, allows for a derivation action in civil court when the first-filer derived their claimed invention from another 291 a. Only allowed when patent office issues two patents that claim same invention b. Problem: doesnt define derived; if broad = copyright doctrines D. No Prior Use Rights: 1. Under new law, a prior user potentially liable for infringement 2. Under old law, if a prior user is sued for infringement could invalidate patent by claiming he was actually first to invent
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PATENTS
Patent Infringement and Claim Construction

A. Claim interpretation/claim construction 1. De novo review: claim construction is a matter of law and is reviewed de novo by the Federal Circuit (Phillips, p. 270). (Phillips dissent: this makes the trial court like a file clerk. Litigants can have a Markman hearing before trial to determine claim construction.) 2. Claim construction defined: the process of determining the meaning and scope of a patent. 3. Intrinsic evidence: a court should rely primarily on intrinsic evidence when doing claim construction (Phillips, baffles as defined within application is the applicable meaning, p. 270). Intrinsic evidence includes the claim itself, the specification (i.e. the entire patent application), and the prosecution history (in that order) (Phillips). a. PHOSITA: the relevant point of view is that of the PHOSITA, so intrinsic evidence is more relevant than extrinsic evidence. b. The patentee is free to be his own lexicographer. (Phillips) 4. Extrinsic evidence: a court should only look to extrinsic evidence if intrinsic evidence is not helpful. Extrinsic evidence includes dictionaries, encyclopedias, and treatises. (Phillips). B. Literal Infringement 1. All elements rule: in order for an accused invention to literally infringe a patent, the accused invention must contain each element of a patents claim (Larami, super-soaker did not contain all elements of patented device, p. 295) a. First step: break up the patent claims into elements (however it makes sense to do so) b. Second step: compare the elements of the patent and the accused device. The accused device must contain each element of the patent in order to infringe it literally (the accused produce MAY have more elements or features than the patent and still infringe it) c. Comprising versus consisting: consisting limits a patent to the specified elements, but comprising gives a patent protection against devices that infringe each element and then adds features. C. Doctrine of equivalents 1. Function, way, results test (triple identity test): if each element of an accused device performs substantially the same function in substantially the same way to obtain the same result, the accused device infringes the patent (p. 300) a. First step: break up the patent claims into elements b. Second step: compare the elements of the patent and the accused device. If the accused device meets the triple identity test for each element of the patent, the accused device infringes the patent. 2. Rationale behind the doctrine of equivalents: a. Increase incentives for inventors if devices that were substantially equivalent did not infringe, the incentives for inventors would be lower. b. Old moral justification non-literal infringement by unscruptulous people could destroy patent protections. D. E. [SECTION BREAK]
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COPYRIGHT
Copyright
ELEMENTS OF 1. Grants owners of 2. Original works (expression, not ideas) of authorship (independent creation) 3. Fixed in a tangible medium of expression 4. Exclusive rights to copy, prepare derivative works, distribution, public performance & display INFRINGEMENT: must prove both: 1) Ownership of a valid ; and 2) copying of constitutent elements of the work that are original
Requirements for Copyright Originality & Fixed

A. Originality (2 prong test) requires that the authors work demonstrate both: (1) Independent creation by the author (basically means did not copy); AND (2) a modicum of creativity: requires only a trivial variation on something already in existence, doesnt need to be nonobvious but cannot be so mechanical or routine as to require no creativity whatsoever (don't want judges being arbiters of taste) 102 1. Policy Rationale: (originality is constitutionally, art I, s.8, and statutorily required); all about balance: focus is on benefit to the public: want to enhance public domain to inspire others 2. NOT copyrightable even if independently created, b/c not original (why? Dont want to lock up fundamental building blocks, dont confuse and TM) a. Short phrases such as names, titles, and slogans b. Familiar symbols or designs c. Mere variations of typographical ornamentation, letter or coloring d. Mere listings of ingredients or contents 3. Compilations Of Facts: Facts are not copyrightable but compilations of facts are if there is sufficient selection, coordination, and arrangement of uncopyrightable facts in an original way? (doesnt have to presented in an innovative or suprising way) (Feist, alphabetical arrangment and selection lacked modicum of creativity. It expended sufficient effort to make directory useful but not enough creativity to make it original) 4. Database Problem & Utility (sweat works): assembling info is costly but may not be copyrightable under Feist because really hard to create a copyrightable database that is useful and in a way that competitors would still want contract law fills in gaps in IP law a. arg for protecting: lockean labor theory, economic (need incentive to compile data), fairness (unjust enrichment theory) b. arg against protecting: conflicts with basic premise of copyright law (protecting creativity); danger of monopoly and wasted resources (would lock up facts) 5. Maps: always have to sacrifice something when flatten. (Peters projection world map based on land mass: intellectual creativity in underlying mathematical formula) (Mason, TX maps original in two ways: (1) sufficient creativity in selection, coordination and arrangement of the facts that the map depicts; and (2) graphic artistry was itself sufficient) 6. Photos: can copyright if enough creativity in f-stop choices, composition, etc. 7. Thin Copyright: sometimes a court will give an auther that only demonstrates a modicum of creativity a thin copyright, which means protection does not extend very far B. Fixed in a Tangible Medium of Expression: a work is not copyrighted until fixed and thus is also not infringed until it is fixed; broad requirement and includes any medium now known or later developed. A work is fixed in a tangible medium of expression if: (1) sufficiently permanent or stable to permit the work to becommunicated for a period of more than transitory duration, AND (2) By or under the authority of the author [see class hypos]; 1. Broadcast: if a work consisting of sounds or images (or both) that are being transmitted, the work is fixed, if a fixation is being made at the same time as the transmission 2. Fundamental distinction between: (1) original work which is the product of authorship AND (2) the material objects in which it can be embodied (ex, a book is a particular kind of copy, not the work of authoriship)
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COPYRIGHT
Excluded Subject Matter: The Idea-Expression Dichotomy

A. Excluded Subject matter = Copyright does not protect ideas, or the functional aspects of a work: procedure, process, system, or method of operation 102(b) 1. Three types of unprotectable ideas: a. The general concept, b. the functional principles or solutions, or c. the building blocks (basic plot or character outlines) 2. Non-original elements are not protected. Even expressive elements that necessarily follow from the unprotected ideas are also unprotected. ASK: are there alternative ways to implement the functional purpose of the work? (Baker v. Selden) a. Scenes faire Doctrine: elements may be unprotected if they are commonly found in works of that genre (ex. cop shows) 3. Merger Doctrine: (idea that constrains expression) Descriptions largely dictated by the systems they describe are unprotected. If there are extremely limited number of ways of expressing idea then idea behind work merges with expression and no copyright. a. Limits protection to the extent of the relevant idea. (Others are only allowed to copy what is necessary to use that idea) b. Morrissey v. Procter & Gamble (1st Cir 1967)(460)(sweepstakes): Rules of a sweepstakes competition setting forth how the competition operates are unprotected; Policy: If gave copyright protection to explanation, effect would to give one competitor exclusive rights to hold such sweepstakes competition) 4. Functional Aspects: (may be patentable) Does the element have a utilitarian function? Statutory categories: Is it a procedure, process, system, or method of operation? a. Is it necessary to copy the element to implement an unprotected idea? Scope of protection depends on how broadly the unprotected idea is defined b. Need for competitors to copy?: Increases efficiency? Is the element an industry standard or necessary for compatibility with other works? B. Hands Levels of Abstraction Test (p.446) (levels of generality) List things from most specific to most general and at one point draw a line: everything above is copyrightable and below is not (bumblebee pin: P wants line drawn very low: so copyright on all insect pins; D wants as high up as possible) 1. Where to draw the line between idea & expression? Finding balance: is it fair for plaintiff to tie up for number of years (policy of balancing & public access to ideas) (Baker: reasoned by analogy and examples) a. POLICY Q: we want to keep ideas public domain, and we want functional aspects (keep inventions, systems, and processes) in patent law; (Channeling Doctrine = Rule that one form of IP ends and other form begins, thus if you want to stop people from using a new system that is patent law) (Baker) 2. Baker v. Selden, p.442 (blank forms): P had copyright on book explaining an accounting syst (system unprotected as functional) Book contained an essay explained how system worked and forms to implement it. Forms used to implement accounting system unprotected because necessary to use the unprotected system. Preventing copying of the forms would have effect of protecting the system. a. blank forms are very close to the pure idea b. Note: Even the detailed explanatory essay in Baker could be unprotected (if ct found it is necessary to the idea depends on level of abstraction)
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COPYRIGHT
OWNERSHIP: Works for Hire & Joint Works

A. WHO IS THE AUTHOR? 201(a): Copyright vests initially in the author of the work. She may transfer any or all of her rights. Gen Rule is that the actual creator of the work is the author. (Note: Rules assigning ownership are gap-filling rules. Thus, only come into play if parties have not effectively addressed the issue) 1. POLICY= Reduce transaction costs and holdout problems in large compilation works like movies (work for hire preassigns a work to ER from moment of creation and avoids the need to negotiate assignment agreements) a. Contract Law & Termination Rights = As a substitute for work for hire status, if work does not fall within one of the 9 statutory categories, parties are free to assign copyright interest through contracts. However, not a perfect substitute because authors cannot assign away inalienable right to terminate transfers down the road b. Only way assignees can avoid this termination is to show copyright vested in their name ab initio (from the beginning). Which can only be done if the work falls within definition of work made for hire (meaning, if there was no work for hire doctrine, an employee who assigned rights to ER br K would still have ability to terminate later) 2. Shop Rights (1976 Act) = Congress rejected Shop Right proposal where employer would have right to use to extent necessary for regular business employee would retain all other rights (like patents and TS) in favor of full ER rights a. Teacher Exception: Idea that universities cant claim ownership of a professors work. But, no textual support in 1976 act b. NO copyright for works of the US government 3. INDIVIDUAL WORKS: Factors: If more than one person claims to be the author: a. Who initiated the work? b. Who Contributed original creative expression, c. Who Controlled the production of the work d. Whom do the parties consider the author? e. Whom third parties recognized as author?
Works Made For Hire:

If work is a work made for hire, employer presumed to be the author and, unless the parties expressly agree otherwise, owns the copyright. (Work-for-Hire: Legal fiction that it wasnt human beings that authored the book, it was the company that employed them) 1. RULE: 101. Two types of works made for hire: a. If Employee AND work prepared within scope of employment, OR b. If Independent Contractor (1) certain works specially ordered or commissioned (9 categories) AND (2) parties expressly agree in writing that it's a work made for hire. 2. STEP 1: Was the work specially ordered or commissioned (independent contractor)? a. Did the parties sign a work made for hire agreement b. AND Does the work fall within one of the 9 specific categories? i. Contribution to a collective work, ii. Part of a motion picture or other audiovisual work, iii. Translation, iv. Supplementary work, v. Compilation, vi. Instructional text, vii. Test, or Answer material for a test, or viii. Atlas c. If NO express agreement in writing or not one of the above types, then can NOT be a work for hire unless (1) hired party can be classified as an employee AND (2) work was done within scope of employment
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COPYRIGHT 3. STEP 2: Was work done by an EMPLOYEE? (Controlling the artist and the work is NOT enough for employee status to make the work a work made for hire, CCNV) a. FACTORS: To determine if hired party is an EMPLOYEE under agency law, consider: (focus on relationship between hired and hiring parties; not on the relationship between the hiring party and the product) i. Does hiring party have the right to control how the product is accomplished? ii. Whose tools were used? iii. Where is work located? (hiring partys place of business? or hirees home?) iv. What is the duration of the relationship between the parties? v. Does the hiring party have the right to assign additional projects? vi. How much discretion does artist have over when and how long he works? vii. Method of Payment? (ex. salary vs. paid on completion?) viii. What role did the hired party have in hiring and paying assistants? ix. Is the work part of hired partys regular business? x. Employee benefits and tax treatment of hired party b. CCNV v. Reid, (SCt 1989)(489)CCNV conceived idea of homeless nativity scene and directed enough of sculptors effort so that he produced what they, not he, wanted, but ct held sculptor was an independent contractor; not an employee and no written agreement. not a work made for hire: i. Factors against EE status= (1) Sculptor is a skilled occupation , (2) He supplied his own tools and worked in his own studio w/o daily supervision (3) Contract was only for 2 months and CCNV had no right to assign other tasks (4) He had complete freedom in deciding when and how long to work (5) K price payable upon completion cf to a salary 4. STEP 3: If employee, was work done within SCOPE OF EMPLOYMENT? a. Is work within the type he was employed to perform? b. Does it occur substantially within the authorized time and space limits? c. Is the purpose, at least in part, is to serve the employer?
Joint Works: (101):

Tenancy in common: if a work is found to be a joint work, the coauthors own it in tenancy in common, which means they have equal claims to the profits from it (key motivation in Lee courts holding)for a work to be a joint work and owned by two authors/artists as tenants in common, there must be: 1. A copyrightable work: some courts say that each authors contribution must be independently copyrightable, but Posner has said that sometimes this is not necessarily true (comic book case) 2. Two or more authors: each person must actually be an author which requires that(Aalmuhammed v. Lee, Islam expert not a coauthor because Lee was in control, p. 497) a. Control: each author must superintend the work by exercising control (most important) b. Share intent: each author must share objective manifestations of a shared intent to be a coauthor with the other coauthor c. Audience appeal: the audience appeal of the work must be based on the contributions of both authors and the share of each in its success cannot be separately appraised. 3. The authors intend that their contributions be merged into inseparable or interdependent parts of a unitary whole: This prong is relatively easy to satisfy (A v. Lee)
INFRINGEMENT (Rights)
A. 17 U.S.C. 106. Exclusive Rights of Copyright Owners: 1. To make copies 2. Prepared derivative works 3. Distribute to public 4. Public Performance & Display 5. Digital Audio Transmission
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COPYRIGHT
RIGHT TO MAKE COPIES

106(1): Broad right, not limited to exact reproduction. Owner has right to prevent others from making exact or substantially similar reproductions by any means now known or later developed A. INFRINGEMENT Analysis = Must prove: (1) Copying-in-fact AND (2) Improper Appropriation (issues of facts particularly well suited for a jury) B. STEP 1: Did D ACTUALLY COPY from Ps work rather than develop independently? 1. Direct Evidence= (easy case) eyewitness testimony, Ds admission, distinctive flaws; usually hard to prove so need circumstantial proof 2. Circumstantial Proof of Copying = SLIDING SCALE TEST: = ACCESS + SIMILARITIES (similarity judged on a sliding scale + objective criteria) a. (Understanding Tip: Substantial Similarities Probative Similarities: tending to prove copying, irrespective of whether copying infringed Ps copyright) 3. Arnstein v. Porter (2nd Cir. 1946) p.521 Although similarities alone are insufficient to prove copying, sufficient evidence of access to survive summary judgment: work had sold a million copies and been played on the radio created an issue of fact regarding access. Thus, jury should decide if story is credible (Facts: P claims evidence of access b/c someone broke in and stole his music, but offers no evidence it was actually the D.)
NO EVIDENCE OF ACCESS NO SIMILARITIES SIMILARITIES
nd
ACCESS no infringement (no amount of access sufficient) Question of fact for jury to decide if works sufficiently similar to prove D copied (may use dissection analysis and expert testimony that independent creation unlikely)
no infringement (2 Cir): (may infer copied don t need to prove access) must be so strikingly similar that its impossible D developed independently (Repp, phantom of opera song) (7th Cir): Can t infer based on speculation. Need enough evidence for a reasonable possibility of access (Selle, even if strikingly similar, doesn t prove D copied P, both could have copied from public domain, Bee Gees song) Burden Shifting Presumption (7 Cir, Posner): can infer copied (and access) if strikingly similar and not to anything in public domain. Can rebut by disproving access or showing independent creation.
th
4. Subconscious Copying: Dont need knowledge or bad faith to find D copied-in-fact. Chiffons v. George Harrison: infringement even though D did not deliberately reproduce. While neither phrase is novel (or uncommon), experts at trial agreed pattern of juxtaposing four repetitions of each short phrase is highly unique. (Lawyer TIP: to reducing risk of infringement, return unopened submissions and keep clean rooms) 5. Proof Of Copying By Deliberate Error Or Common Mistake = Original work may have minor errors or misspellings, whether put there deliberately (Feist) or by mistake. similar errors in both help prove copied C. STEP 2: ILLICITI COPYING: If establish copying ASK did the D appropriate sufficient protected material to violate owners rights? 1. In general: Infringement by reproducing it in whole or in any substantial part, and by duplicating it exactly or by imitation or simulation. Wide departures may still be infringement as long as the authors expression rather than merely his ideas are taken. a. There is NO bright-line rule for how similar a work has to be to be a copyright violation. (Nicholas)Can be an illicit coping even if did not copy literal text, but the two works must be substantially similar 2. Subjective Standard (ordinary observer): Substantial Similarity is judged from the perspective of the ordinary observer (the eyes and ears of the trier of fact); Dissection & expert testimony are irrelevant
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COPYRIGHT a. Some courts have narrowed to impressions of Target Audience for the work (Blue Box Factory court allowed expert evidence about how cabbage patch dolls would be perceived by children) 3. Nichols v. Universal (2nd Cir. 1930) p.527: as long as a D only takes the uncopyrightable elements of a plaintiff's work, the two works will NOT be substantially similar enough to constitute copyright infringement.Nichols wrote a play about a Jewish family living in New York. Universal made a movie about a Jewish family living in NY: NO infringement. Although the two plays shared a number of the same themes and the general plot, the similarities tended to be general things, universal concepts, and stereotypical characters. There was nothing unique to Nichols' play that was found in Universal's movie a. Scenes A Faire Doctrine: General Concepts or ideas are not copyrightable. Cant copyright some general plot outline like father who disapproves of daughters fianc 4. TEST: Two Part Analysis (Disputed Issue in analysis Does the fact finder compare the two works as a whole or only those elements that are protectable?) a. Objective Test = to determine protected elements, analytically dissect objective manifestations of creativity (plots, themes, dialoue, mood, setting, pace, sequence, characters) in Ps work. b. Subjective Test = trier of fact takes purely subjective prospective and determines whether the Ds work improperly appropriates protected expression 5. THRESHOLD = How much must be taken? Depends on the nature of the work: even a small amt of the original, if it is qualitatively significant, may be sufficient to be an infringement a. Fragmented Literal Similarity: cases where D has copied a distinct literal element of Ps work and incorporated it into a larger work of his own b. ANALYSIS: issue in each case will depend on whether the similarity relates to matter which constitutes a substantial portion of plaintiffs work not whether it is a substantial portion of defendants work c. Claim that infringment is such a little one is no defense; But, if the similarity is only as to nonessential matters, then should not find a substantial similarity 6. SLIDING SCALE & VIRTUAL IDENTITY TEST: more similarity is required when less protectable matter is at issue; If copyright is thin works must be virtually identical (i.e., if work involves unprotectable elements or if the range of creative expression is limited) (Incredible Technologies, screen displays for two golf video games) a. Maps vs. Elegantly written biography: Because fact-based works differ as to the relative proportion of fact and fancying, amt of similarity required for infringement differs 7. DE MINIMIS DOCTRINE: (the law does not concern itself with trifles) Applied where the copying is so trivial as to fall below the quantitative threshold of substantial similarity (but dont forget if its qualitative important, wont apply de minimis) a. Digital Sampling (mash ups) copyright act bars application of de minimis doctrine; thus copying even a single note could be infringement (digital sampling is literal copying of existing sound recordings)Bridgeport Music (6th Cir): sound recording owner has the exclusive right to sample his own recording. based on rt to prepare derivative work in which actual sounds fixed in the recording are rearranged, remixed i. However, this does not prevent another from duplicating the sound of another recording as long as it consists of entirely independent fixation (basically, you simulate sounds just cant use the actual recording) ii. POLICY: bright line rule (get a license or do not sample) eases enforcement but does not stifle creativity because a well functioning market exists and artist are free to record their own riff
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COPYRIGHT
THE DISTRIBUTION RIGHT

A. Owner has right to distribute, through sale or other means, either the original or subsequent copies. Limited by First Sale Doctrine and Importation Right - 106(3) 1. LIMITATIONS on Distribution Right a. First Sale Doctrine 109(a): (aka the exhuastion principle) Copyright holder cannot restrict subsequent resale or distribution by a purchaser of a particularly lawful copy. (Purchaser may not copy but may resell, lease, donate, etc.) i. 109(b): Congress limited first sale doctrine by prohibiting rental of phonorecords and computer programs for profit, because feared primary effect was to encourage piracy b. Importation Rights: different prices in different national markets. holder has right to prohibit commercial importation into US of works acquired abroad (Exceptions: works for govt use; personal use; and scholarly, educational, or religious purposes) 2. POLICY: Why have a right to distribute that is limited by first sale doctrine? Allows authors to control first publication (ex. book release date); Easier to find & sue infringers: allows them to sue the distributors rather than actual infringers. B. First Sale & Derivative Works: (Art Tiles) Right to transfer applies only to the particular copy of the book which was purchased. The mere sale of the book does not transfer the copyright holders right to prepare derivative works. C. License vs. Sale (Software Marketing): labeling product as a license rather than a sale and arguing that first sale doctrine doesnt apply. RULE: A single payment giving the buyer an unlimited period in which it has a right to possession is a sale (Softman Products v. Adobe: first sale doctrine superseeded the EULA: software distributor lawfully acquired bundled products and then later sold unbundled in violation of the terms of an End User Licensing Agreement (EULA). 1. FACTORS for a Sale rather than License a. Temporally unlimited possession; b. Absence of time limits on copy possession; c. Unitary Pricing and payment schemes; d. Subsequent transfer not prohibited and doesnt require permission; e. Principal purpose of use restrictions is to protect intangible copyrightable subject matter and not to preserve prop interests in individ program copies 2. Promotional Copies = notice label stating Promotional Use Only-Not for Sale on free copies does not create a license that is not subject to the first sale doctrine. (UMG v. Augusto Held the economic realities of such distribution make it equal to a sale or gift. a. FACTORS: (1) the effective passage of title, (2) UMG does not expect to regain possession of the goods, and (3) absence of a recurring benefit to UMG
PUBLIC PERFORMANCE & DISPLAY RIGHTS

A. 106(4)(5): PERFORMANCE (moving) vs. DISPLAY (still) distinction determines scope of exclusive protections (First sale is a defense to distribution and display rts only; not relevant to infringement of perform right) 1. Performance = any physical act taken to make a work perceivable to the viewer or cause a work to be reproduced (even in a transient form that does not create a "copy) a. Requires some communicative element to be infringement (ex. mere act of input into a computer would not appear to be a performance) 2. Display = Owner of a particular copy is entitled to display it publicly, either directly or by the projection of no more than one image at a time, to viewers present at the place where the copy is located. (thus, displaying artwork in a gallery w/o authorization is ok) B. PUBLIC? (1) When at a public place or if not public place, then any where a substantial number of people outside of family and friends is gathered; or (2) If transmit to public (whether the members of public receive it in the same place or in separate places and at the same time or different times.)
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COPYRIGHT
INDIRECT LIABILITY Third Party Infringement of (two-step analysis)

A. STEP 1: Did the direct infringer actually infringe? (DO NOT SKIP THIS STEP: do copy analysis above and consider any defenses) (Sony, no direct infringement because time-shifting fair use, so third party liability. Is rest of case just dicta?) B. STEP 2: Is there a way to extend liability to third party? (three possible theories) (Basic doctrine derived from tort common law and also patent law analogies) 1. Respondeat Superior: an employer could be liable for its employees infringing activities while on the job, as long as the employee was acting within the scope of his employment (even if acts were not expressly authorized or were against orders. based on traditional agency law principles.) 2. Vicarious Liability: (requires more control) a. even if NO knowledge, still liable for acts of others if: i. Control: have right and ability to supervise (can control infringing conduct) ii. Direct Financial Interest: profit from infringing activity b. Dance Hall Owner: YES, playing of music was for profit of owner (entrance fees, etc.) Even if orchestra was under a K that made them an independent contractor c. BUT NOT Landlord/Tenant: just getting fixed rent not direct enough financial interest. Ability to evict probably not sufficient ability to supervise (see Perfect 10, visa credit card transactions)Note: want to show no right to control direct infringers actions, so dont tell tenant not to infringe 3. Contributory Infringement: (requires more knowledge) (Sony) a. can be liable for acts of others if: i. Knowledge of infringing activity, ii. AND induce, cause, or materially contribute to infringing conduct (requires taking an active step) b. Electronics store that sold blank tapes and made available both copyrighted works and a coin-operated Make-A-Tape system was contributorily liable for acts of customers c. Policy: copyright owner has exclusive right to authorize (cong. intent in house report) C. Cf. Cases note Sony is about when you can impute culpable intent (cant infer as a matter of law just from distributing a product that is widely used for legit purposes); Grokster is about proving intent to induce, i.e., when you have actual evidence of intent 1. Sony v Universal, p.587 (capable of substantial noninfringing uses): Sony not liable for selling copying equipment that others used to make infringing copies because VCRs widely used for noninfringing uses like time-shifting. (% of infringement cf. to fair uses) Merely selling a staple article of commerce capable of substantial non-infringing uses is NOT sufficient for contributory infringement. (Grokster, Cannot infer culpable intent as a matter of law just from a products uses or characteristics. need active step to induce) a. H: Merely distributing copying equipment did NOT cause, materially contribute, or influence direct infringement (constructive knowledge is not enough) i. No Sony EE had either direct involvement with infringing activities or direct contact with purchasers who infringed ii. Sony advertisement did not influence or encourage direct infringers b. Test derived from patent law which expressly holds not liable if sell item suitable for substantial non-infringing use. Sony ct changed suitable capable: wants to cover both present and possible future non-infringing uses i. Policy: if found contributory infringement then basically saying product is w/in patentees monopoly. Analogy to, dont want to extend beyond limited rts. ii. Some broadcasters WANTED users to timeshift. Court found that other broadcasters had no right to stop these authorized uses c. Balancing Test: if adequate protection requires the court to go beyond actual duplication to the products that make copying possible must balance: (1) Copyright holders legit
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COPYRIGHT demand for effective, not merely symbolic, protection; (2) AND, The rights of others to freely engage in substantially unrelated areas of commerce 2. Grokster, (inducement liability): unlike napster, no centralized server or indexing system. Only way assisted users infringement was by providing them with the decentralized peer-to-peer software. Under Sony rule, did not actually induce, cause, or materially contribute to infringement. Ct created new intent to induce rule: Proof of intent to induce infringement may be shown through evidence and third-party can still be liable even if device is capable of substantial noninfringing uses. (Note distinction: Dont have to take affirmative steps to prevent infringement; just cant induce infringement.) a. Evidence of Intent: To be liable must have purposeful, clear expression or other affirmative steps taken to foster infringement (intent to induce & acts of inducement) i. Need more intent than mere knowledge for distributor to be liable ii. Ordinary acts incident to distribution NOT enough (tech support, product updates) b. Factors: evidence of inducement based on combination of factors (none alone sufficient) i. Attempt to capture Napster audience by offering product as successor (similar design and name, unpublished ads for OpenNap; metatags sent request to site) ii. No attempt to develop filtering tools to diminish infringing activity (but NO affirmative duty to filter basing liability on this would be crushing b/c too difficult) iii. Business model depended on infringement (Advertising revenue dependent on high volume of infringement) c. Note: model is files shared not files traded (purely trading particular copies could be legal under first sale defense)
DEFENSES FAIR USE

Analyze only in respect to direct user/infringer. The statute does not define fair use and analysis is so factspecific that you can never tell if it's a fair use unless all four factors are exactly on point with a prior case (fair use = right to hire a lawyer) A. In general: Fair Use 107 Affirmative Defense to infringement. 1. Favored Uses = (in preamble, p. 593) If issue falls within one of these favored uses, then more likely fair use, but not dispositive either way (i.e., favored use may not qualify as fair use and vis versa) still look to 4 factors a. Criticism and Comment b. News Reporting c. Teaching (including multiple copies for class use), d. Scholarship or Research 2. Four Factor Test (in brief): (1) Purpose and Character of the use (2) Nature of Copyrighted work (3) Amount and substantiality of the portion used (4) Effect upon the market 3. First Amend & Policy Rationale: fair use exception rooted in the First Amendment and used to encourage infringements that society likes and thinks is important (Ct rejects a 1st amend exception for news & public figures.1st amend protections are already embodied in Copyright laws idea/expression dichotomy. No need to expand: Policy: if we say no in public figures, then we would see no more public biographies)
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COPYRIGHT B. FOUR FACTORS For Fair Use: not exclusive list (know by numb) 1 & 4 will usually determine the case 1. Purpose and character of the use, - (D-Focused) including whether such use is of a commercial nature or is for nonprofit educational purposes a. News reporting (+): often a fair use (Harper, D could have freely copied facts and accomplished favored use of reporting without taking protected expression) b. Commercial (-) vs. Non-profit uses (+): commercial uses presumptively not fair uses (this Sony quote)(Kinkos, coursepacks not fair use because Kinkos was a for profit) i. Public Benefit: additional factor relevant in Sony ct focused on public benefit, and survey of how users used VCRs for time-shifting ii. TEST: Amt of broader public benefit vs. Private economic rewards directly acquired from commercial exploitation of copyrighted material. (Texaco, although weak link to commercial gain and immediate goal of research serves a broader public purpose, was still simply another factor of production for developing profitable products.) c. Archival Purposes:(-) were copies made for same basic purpose one would normally seek to obtain the original? (Sony, time-shifting not archival 70% of shows only watched once) (Texaco, copies superseded original: main purpose was archival: the ability to give numerous scientists own copy based on Ds purchase) d. Transformative Use: (+) Does the secondary use add something new, with a further purpose or different character? (Texaco, if dominant purpose had been to transform copy into a more useful format that more easily used in the lab, i.e., less bulky or to prevent damage to the original).(Campbell, 2Live Crew parody of pretty woman) i. TEST: Sliding scale: More transformative the new work is, less other factors matter,(policy of copyright law to promote creation)P e. Bad Faith: (-) (Harper, stole manuscript to exploit prepublication benefit, w/o license) 2. Nature of the copyrighted work - (P-focused) (how strong is the copyright?) a. Factual Works (+) vs. Fiction: facts usually get only a thin copyright, and uses of an authors facts, but not expression, likely to be fair use (Harper, autobiography)(Texaco, factual articles) i. Policy: greater need to disseminate factual work than works of fiction b. Unpublished works: (-) entitled to more protection because implicates authors privacy rights, thus key factor. (Generally, the authors right to control the first publication of an expression will outweigh a claim of fair use. BUT, congress added that this will not bar fair use defense, still need to consider all other factors, Harper & Row) c. Sony TV was initially free, time shifting provides public benefit because expands public access, also not all copyright holders objected 3. Amount and substantiality of the portion used in relation to the copyrighted work as a whole a. Qualitative: The Heart of it and part most interesting to readers (Harper & Row) b. Quantitative: Statute looks to amount taken in relation to original work. If taken in entirety usually not fair use (Texaco, but see Sony) c. Harper & Row adds factor of how much copied material contained in Ds work, focuses on what you did not infringe (small amount of whole book taken, 1%, but ct also considered the 13% of Nations article was copied material) (relevant in tv shows where whole poster in background but only for about 13 secs, some cts have found de minimis and avoided fair use analysis) d. Parody: took only amt necessary to make point or make useful (Google book snippets) 4. Effect upon the potential market for or value of the copyright work (MOST IMPORTANT!!) a. Defining Relevant market: need to first define the precise copyrighted works, (e.g. 8 individual articles) and then consider nature and history of market for those works. (Texaco, traditional market for journal subscriptions not relevant to determining effect of harm on market for individual articles, which not clearly defined)
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COPYRIGHT b. Licensing Revenue: If no easy way to pay for use, then unauthorized copying is more fair; But if ready market exist to pay fee for use, copying less fair. (Texaco, Because a market exists in which users can obtain photocopying license of individual articles, the lost licensing revenue caused substantial harm to the value of Ps copyright.) i. Vice of Circularity: avoided because licensing market is not conclusive, but only a factor in fair use analysis. (circularity: problem with defining harm as lost licensing revenue: whether they have to pay a licensing fee depends on if fair use, but ct holds not fair use because can pay licensing fee, i.e., if was fair use, there would be no market thus no harm) c. Impairing marketability: e.g., direct actual harm on market for prepublication from loss of licensing revenue from Time because no longer had exclusive (Sony) d. Markets for Derivative works: an effect on the market for derivatives of the original work is also relevant because a copyright author has the right to control the market for derivatives. (Campbell, secondary market for non-parodied rap versions) i. Traditional, reasonable, or likely to be developed markets: to avoid the circularity problem, when looking at the effect on derivative and secondary markets, courts should only look at traditional, reasonable, or likely to be developed markets (Texaco) e. Hypothetical/Future Harm: as relevant as actual present harm. If use becomes wide spread, would there be potential harm? (if can show likely future harm, actual present harm doesnt need to be shown, nor does future harm need to be certain) (Sony) i. Non-commercial uses = must show by preponderance of the evidence that some meaningful likelihood of future market harm existsIf intended use is for commercial gain, that likelihood may be presumed ii. POLICY: cts should be cautious about using copyright law to screen markets for technology. In Sony, movie studios criticized for trying to predict future effects of technology. Thought VCRs would cripple industry, instead helped expand marketplace. (ct. held no evidence of specific market harm) C. Harper & Row v. Nation (1985) (unpublished works: not fair use) The Nation magazine got a copy of Fords autobiography before publication and included quotes amounting to about 300 wds (of 200k words) As a result, Time Mag canceled its agreement to print prepublished excerpts D. Sony Corp v. Universal (time-shifting: fair use) Ct held no direct infringement (thus, no 3rd party liability) P failed to show any likelihood of specific non-minimal harm to potential market. Furthermore, timeshifting expands public access to freely broadcast tv. E. American Geophysical Union v. Texaco (2nd Cir. 1994) (611) (photocopying) Ct held that a profitseeking company may not make unauthorized copies of copyrighted materials published in scientific journals for use by the company's research scientists under the fair use doctrine F. PARODY: Campbell v. Acuff-Rose Music (1994): Group made rap parody of Pretty Woman as a commentary on both music and worldview of the original song. Lower ct rejected fair use because of commercial nature of use and substantial amt used. But Sup Ct reversed 1. Nature of Use= A Parody must borrow some from the original to make its point. Here parody was criticism/commentary thus more liekly fair use than if simply took material to free-ride effots of others; Transformative Use Ds added independent creative material to work 2. Nature of Work: highly protected, but that's normally the case in a parody 3. Amt Used: no more was taken than necessary for commentary 4. Mkt Harm: key issue was if parody had decreased any potential licensing revenue for other versions that P would have authorized G. [SECTION BREAK]
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TRADEMARK
TRADEMARKS
In general: Allows consumer to identify the source of goods or services. Purpose of Trademark law is to ensure that consumers can rely on marks in exercising their preference by prohibiting other marketplace participants from using marks in a way likely to confuse consumers about the source of a product or service. (Constitutional basis in commerce clause) A. RULE: Protects the (1) First person to use (2) a mark in commerce (3) to identify the source of goods and (4) to distinguish them from goods sold or made by others 1. Source Identifying Function = (broad) Symbol can be a word, phrase, a design, an image, a sound, a color, (or a combination). Basically anything that is used as a source identifier. a. NOT source identifiers: If symbol fulfilling some other function (describing product itself) or merely aesthetic (primarily decorative) 2. Distinctive = (single though anonymous source) Customers must identify mark with a single source, even if the actual source is unknown. Look to use in context of marketplace, does mark create a separate and distinct commercial impression? a. Inherently Distinctive Marks (arbitrary, fanciful, or suggestive marks) = Marks standing alone are sufficiently distinctive to qualify for protection. b. Acquired by Secondary Meaning = Descriptive marks require proof of an acquired secondary meaning as a source identifier (also geographic marks and personal names) B. Types of Marks: The Lanham Act 1. Trademark = mark that is used to distinguish the goods of one from the goods manufactured by others, and to indicate the source of the goods, even if source is unknown a. Mark is either (1) Used in commerce, or (2) a person has bona fide intention to use and has registered mark 2. Service Mark = Same as trademarks but used to identify a businesss services. Service must be sufficiently separate from sale of goods. Services that are only promoting, selling, advertising, or building up good will for ones own products are not sufficiently separate. (Dr.Pepper rejected mark for conducting contests for sale of drink) a. TEST: Is service normally expected or routine in furtherance of the sale of goods? If yes, no registration of service mark b. Cf. Trade Names = identify the company itself and cannot be registered under Act. 3. Certification Marks = used by person or organization other than its owner, to certify that goods or services of others have certain characteristics. (e.g., Good Housekeeping Seal of Approval). If don t follow federal restrictions cancellation of mark s registration: a. Owner cant use mark for its own goods (could compromise integrity of mark) b. Owner Must Control the mark: Owner must prohibit others from using the mark for purposes other than certifying c. Owner must be objective and may not discriminate: If goods/services satisfy objective standards, must certify 4. Collective Marks = two types a. Collective Membership Marks: Sole purpose of mark is to indicate that person displaying it is a member of an organization. Not used to identify gds/services b. Collective TM and Service Marks: marks adopted by a collective organization for use by its members in selling their individual goods/services (ex. co-op). Collective organization itself neither sells goods nor performs services under the mark, but may advertise gds/services sold under mark by members
Distinctiveness (The standard for protection)

A. RULE: mark must be distinctive, not merely descriptive. Mark must be capable of identifying a unique source. (question of fact) (either inherently distinctive or acquired through secondary meaning) 1. Distinctiveness depends on marks use in marketplace context, not only on the examination of the mark itself (issue of competition not semantics)
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TRADEMARK 2. POLICY: If its not distinctive, its use by others does not cause customer confusion as to source, so no need to protect w/ trademark law 3. Evaluating Distinctiveness: In determining category, evaluate mark in light of the particular good or service that it is meant to identify (ex. brilliant may be arbitrary for identifying apples but descriptive for diamonds) a. Rule of Composites: overall commercial impression of mark: Consider impression mark makes as a whole; two descriptive elements may combine to result in an inherently distinctive mark b. Misspellings: treated as if properly spelled c. Doctrine of Foreign Equivalents: generally translated into English and then evaluated if descriptive, but first look at consuming publics knowledge of the word. (eg. Volkswagen is descriptive bc it means cheap, popular car in german) B. CLASSIFICATION OF MARKS: (spectrum from stronger to weaker based on natural association) 1. Arbitrary and Fanciful Marks = word bears no relationship whatsoever to the product it describes; any value they possess in terms of name recognition comes form corporations use rather than a natural association (arbitrary: Apple; Fanciful: Kodak, Xerox) 2. Suggestive Marks = suggests, rather than describes, a product in peoples minds; (loosely linked to product). Consumer must engage in a mental process in order to associate mark with a description of product (Greyhound bus) a. 2 Test for if Suggestive (inherently distinctive) vs. Descriptive (need to show acquired secondary meaning) i. Imagination Test= Requires an exercise of imagination to draw a conclusion as to the nature of the product (ex. greyhound vs. fast to describe service) ii. Need Test = Do competitors need mark to describe their products? 3. Merely Descriptive Marks= describe a characteristic or quality of product itself. Not inherently distinctive, dont get automatic rights, need to build up secondary meaning as a source identifier before can be used as a TM (includes geographic marks, surnames, and product designs) a. Secondary Meaning: (fact specific) sufficient public exposure so that public recognizes mark as an indication of a single thing coming from a single source (goal is determining function of mark in eyes of the public, analyze in context of market) b. Substantial burden on P i. Direct Evidence: Through scientifically conducted consumer surveys (best) ii. Circumstantial Evidence: (1) Amount of advertising, (2) volume of sales, and (3) length and manner of use iii. Substantially exclusive and continuous use of mark for 5 yrs is prima facie evidence mark has obtained secondary meaning (Lanahm Act) 4. Generic Terms: (not distinctive and never protected, even if acquired secondary meaning) Indicates type or category product belongs. Tells the buyer what it is, not where it came from; These are either former marks which have become generic (aspirin or thermos or Murphy bed), or generic at birth (not registrable); (ex. peanuts) a. TEST: for determining if mark is generic: ASK What is the primary significance of the mark to the relevant purchasing public: (1) the common name of a class of product?; or (2) an indication of origin? i. Irrelevant Factors: Alternative common names and owners preventative measures to keep public from using it as a common mark ii. Determining the genus: if new product substantially differs from an established product class and common descriptive name of functional characteristic is the name of the product, and there is no commonly used alternative that effectively communicates same information generic b. GENERICIDE Lost trademark rights = If invented term established by product developer presumption of non-genericide and burden on D to prove otherwise (cf. to if term was commonly used before applied to product). [READ NOTES ON P. 895-900]
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TRADEMARK c. Evidence: Murphy Door Bed D proved genericness: term Murphy bed, in the eyes of a substantial majority of the public refers to a type of bed that can fold into a wall enclosure, not a bed manufactured by the Murphy Co. i. Decision of PTO and TTAB is given great weight ii. Included in many dictionaries as the standard description of a wall-bed iii. Ex of newspapers using phrase to describe generally a type of bed C. TESTS FOR DESCRIPTIVE or SUGGESTIVE MARK?: (Factual issue): (broad scope of what is descriptive): If word or phrase conveys an immediate idea of the qualities, characteristics, effect, purpose, or ingredients of a product or service Descriptive and cannot be claimed as an exclusive mark 1. Dictionary Definition: indicates ordinary significance and meaning of words to the public; Do the words naturally direct attention to the purpose or function of the product? (Zatarns basic dictionary definitions of fish fry refer to the preparation and consumption of fried fish) 2. Imagination Test: measures relationship between words and product. ASK: Would a consumer unfamiliar with the product have an idea of its purpose or function? a. If term requires imagination, thought and perception to reach a conclusion as to nature of the goods Suggestive b. If term standing alone conveys info as to the characteristics of product descriptive 3. Needs Test: would competitors likely need the term to describe their products? Descriptive term relates so closely and directly to product that other merchants marketing similar goods would find term useful in identifying their own goods. a. Irrelevant that term is the not the most common name for a product or if D had many other possibilities available to choose from to describe. 4. Actual Use: if a term has actually been used by others marketing a similar service. If other companies have selected the same term to describe their similar products, term is most likely descriptive. D. FAIR USE DEFENSE: Applies only to descriptive terms and only if term used fairly and in good faith only to describe to users the goods services or the geographic origin (cf : totally dif, more limited defense) 1. RULE: Ds still free use descriptive terms in their ordinary, descriptive sense, so long as such use will not tend to confuse customers as to the source of goods a. Only fringe of secondary meaning is given legal protection. No legal claim to an exclusive right in the original, descriptive sense of the term 2. Zatarains (5th Cir, 1983)(752): Use of fish fry was fair and in good faith. Dissimilar trade dress of products meant confusion at point of purchase (grocery shelves) would be virtually impossible a. Did not use term as a TM and never attempted to register, b. Believed it was a generic name for type of coating mix c. Consciously packaged and labeled products to minimize confusion
ACQUIRING OWNERSHIP: Priority And The Requirement Of Use

A. RULE: Prior user to make genuine sales to customers wins; intent is not sufficient to establish rights in mark (Zazu) (need to keep track of facts) 1. Must use the mark on product. Bad faith attempts to reserve a mark not allowed (Blue Bell, blue bell used new labels on old jeans to reserve mark for new line. Ct held substantial shipment of new mark on the new line of jeans required) 2. Knowledge of anothers plans or intent to use mark is irrelevant (Zazu, to hold otherwise would reward ignorance and penalize entities for gathering knowledge) B. Use sufficient to register a mark is not necessarily enough to acquire rights in the absence of registration. 1. C/Law: Requires substantial sales. Must win race to market place to establish exclusive right 2. Fed Reg: allows slight sales + notice in register (Zazu old law req actual use prior to reg) a. Intent-to-Use Application = given a notice of allowance, if use mark within 6 months then initial application considered constructive use (nat priority as of that date) b. Use in commerce means commercial use typical in a particular industry
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TRADEMARK C. GEOGRAPHIC LIMITATION ON TM USE (Common law vs. Fed registered marks) 1. Unregistered Marks (C/Law) = only protected in the geographic areas in which mark is used (subject to exceptions to preserve cos goodwill): Even if product is not sold in a geographic area, can get exclusive use if marks reputation has been established there. (ex. by national advertising or media coverage) a. Expansion Markets: Can protect in area owner is expected to reach in normal expansion of business, even if no current likelihood of confusion in that area b. Knowledge and Good will: if a junior user knows about a prior user and is found to be trading off the goodwill of the prior user, a court will likely enjoin the junior user even if it is operating in a different geographic market. Only innocent (good faith) use of same mark is protected 2. Why Register? = Registration automatically confers nationwide protection of mark. Thus vital to protect business that plan to expand geographically a. Nationwide constructive use and notice: otherwise a mark is only protectable in the geographic area in which used (put on notice so no infringing use can be in good faith) b. Incontestability after five years: defendants have fewer defenses after a mark has been registered and gone unchallenged for five years. c. Right to sue in federal court 3. If conflict in a particular geographical area? a. If neither registers c/Law applies and earliest substantial user in that area wins b. If one registers and other does not registrant generally has exclusive use of mark throughout country. i. Limited Area defense for non-registrant: can claim priority in those areas where has made continuous use of mark since before registrant files application (but frozen to area in when registration application filed) c. If both register generally get concurrent use. Equity considerations to allow both to use but subject to restrictions on use necessary to prevent confusion among consumers
INFRINGEMENT Likelihood-of-Confusion & Dilution of Famous Marks

Analysis: Elements of an Infringement Claim 1. Ownership of a valid mark 2. Defendant used in commerce 3. The mark or something similar 4. In connection with the sale or advertising of goods 5. The use caused likelihood of confusion OR dilution of a famous mark
Likelihood Of Confusion
A. STEP 1: Did D use Ps mark as a trademark, to indicate the source of its goods or services? 1. Use in Commerce = D must actually use the mark as a trademark in commerce in order to be found to have infringed. This ensures that the D is using the mark in a way that is likely to indicate source to consumers. a. This requirement limits infringement cause of action to its purpose: preventing consumer confusion about source of goods b. No rights in gross in word or symbol that serves as a markTrademarks have no legal existence apart from their ole in identifying source c. Ds predatory intent (intent to free-ride off goodwill) can not substitute for trademark use. (TM law is not intended to prevent all forms of free-riding) 2. Rescuecom Google recommended TM for keyword advertising: a search for company X would display an ad for its competitor. Use in commerce where google used mark in sale of ad services (Cf. 1-800 case = pop-up ads in sep window, did not sell keywords or interfere with ability to access site. Did not use TM at all, instead relied on web address to trigger popup ad)
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TRADEMARK 3. Property Theory = Hypo: Use of CU logo on T-Shirts couple steps away from purpose of TM. More like property law, you are protecting your property, not the consumer protection. Use of infringed logo does not harm goodwill of CU B. STEP 2: If yes, likelihood of confusion? 1. CONFUSION RULE: Do products compete? a. compete directly then we look at similarity, (similar enough that confusion expected) b. don't compete at all (products unrelated) throw out of court (confusion too unlikely) c. products related but do not directly compete evaluate likelihood of confusion based on 8 factor test (fairness considerations) 2. TEST for Likelihood of Confusion: (Sleekcraft 8 Factors) once you overcome about 3 or 4, the rest is just gut feeling. Always keep in mind purpose of TM law is to prevent customer confusion about source (keep coming back to question: is the ordinary customer showing typical amount of care likely to be confuse?) a. Strength of Mark How distinctive is it? (arbitrary/fanciful, suggestive, descriptive, generic) Also commercial strength: mkt share, duration of use, # of customers, ads i. Weak mark is entitled to less (limited range) protection Cts will find infringement only if marks are quite similar, and goods closely related. b. Proximity of goods How directly do the goods compete? closer they are higher likelihood of confusion; 3 situations where less similarity needed for infringement: i. When the goods are complementary, ii. The products are sold to the same class of producers, iii. The goods are similar in use and function. c. Similarity of marks 3 Part Test: Sight, Sound and Meaning similarities weight more heavily than differences (compare as whole, dont dissect marks)(MORE IMPORTANT FACTOR)(Sleekcraft, DC and Ct of Appeals disagree here: DC found two marks easily distinguishable when written or spoken) i. Sight: (displayed with logo?; emphasis on housemark?) ii. Sound: (imp bc reputation by word-of-mouth) iii. Meaning: (by itself is sufficient for a claim of similarity) d. Evidence of Actual Confusion can be demonstrated by surveys or records from customer service centers (if shown, obviously shows likelihood of confusion, however, proving is difficult) (Sleekcraft, ct found that in light of number of sales and extent of advertising, past confusion was negligible) e. Marketing Channels Used overlapping markets, parallel, sales methods, advertising, pricing- e.g. the general class of people exposed to the products f. Type of good and the degree of care likely to be exercised by the purchaser: are consumers likely to understand the distinction by the time they make a purchase? (wholly indifferent consumers may be excluded, but standard includes ignorant and credulous) i. Expensive, high quality good customer takes care reduces, but does not eliminate confusion (e.g., Pencil TMs vs. Boat TMs) g. Defendants Intent in selecting mark bad faith: with the intention of riding off the plaintiffs goodwill? If yes, ct will presume D can accomplish his purpose: that the public will be deceived i. Does intent to confuse users really mean will be more likely be successful confusing? Arg is that if bad faith it will play out in all the other factors so shouldnt focus on this as an independent factor. ii. good faith not a defense but may be given considerable weight in remedy h. Likelihood of Expanding Product Lines (of either party) is the plaintiff likely to start making products that directly compete with the defendants? (e.g. diversifying the model lines in Sleekcraft). 3. Factors may Differ slightly in other courts but basically the same (i.e. Polaroid Factors) AMF Inc. v. Sleekcraft Boats (9th Cir 1979)(824) Although boat lines were not directly competitive (for different markets: one for families, one for racing enthusiasts), Slickcraft and Sleekcraft confusingly similar enough to warrant preliminary injunction) Intro to IP Outline, University of Colorado, Ohm Fall 2011 32
TRADEMARK C. TYPES OF CONFUSION 1. Confusion as to Source: e.g. Prell for shampoo and hair coloring; Two Types of Harm: if (1) inferior quality, consumers may blame Prell; (2) If want to expand then direct competition 2. Confusion as to Sponsorship/Endorsement: e.g. US Olympic Committee 3. Initial Interest Confusion: uses anothers mark to steer consumers to its own product, even though the consumer is not confused by the time of the transaction (e.g. McDonalds sign at exit, search engine metatags, People Eating Tasty Animals at peta.org) a. PETA confusion even though discovered almost immediately no affiliation and no commercial competition b. Playboy . Big difference between hijacking a customer to another site by making him think he is visiting TM owners site vs. distracting with another choice 4. Post-Sale Confusion: Consumers who buy knock-offs knowing they are knocks off (thus consumer not confused), but friends may be confused when they see it and think hmm, Rolex is not that nice, a. Even if other jeans are not lower quality, substantial number of confused people who see it, gives rise to c/a, e.g. stitching on back pocket of jeans b. Harm caused by Knockoffs: (1) too many knockoffs, sales decline from fear not purchasing orig; (2) public deceived if expert required to distinguish; (3) high value of orig, which is derived from scarcity, is lessened 5. Reverse Confusion: senior user is a smaller company and larger company uses its mark. Jr user makes Sr user look like infringer. No direct confusion because buyers of miracle bra wont think came from makers of miraclesuit a. BUT not for dual use TM ct held where the public, not defendant, used TM to describe another product, TM law does not stand in the way (Illinois HS used March Madness for high sch tournament then media started using to describe NCAA.) 6. Plagiarism or Reverse Passing Off: where D sells Ps work as her own is not covered by Lanham Act (copyrights job)
Dilution Of Famous Marks

A. To protect famous marks where unauthorized use dilutes the distinctiveness of the mark (does not require competition or likelihood of confusion or actual economic harm. Actual or likely dilution required, rather than mere possibility. (see statute in CB) 1. For a dilution claim, P must prove: a. Famous mark that is distinctive b. D using mark in commerce (e.g., not mere registration of a domain name) c. Similarity gives rise to an association btwn marks d. Likely to impair the distinctiveness or likely to harm reputation 2. Uses that do NOT dilute: fair uses are defenses to dilution including: a. Parody (unless the parodying mark is the defendants own mark), b. News reporting and news commentary, c. Noncommercial uses, and d. Comparative advertising. 3. Property Theory = dilution to property rights even if no customer confusion (a tort) B. FAMOUS MARKS = a mark that is distinctive, inherently or through acquired meaning, and widely recognized by the general population of the US (not niche fame UT silhouette not famous outside niche of college sporting events) 1. FACTORS: a. Extent of advertising b. Amount of sales of goods; c. Extent of actual recognition; d. Registered C. BLURRING = Lessening the distinctiveness of the mark, which means that the mark no longer makes the consumer think of one particular product or quality. (Blurring is lessening the capacity of a famous mark to
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TRADEMARK identify and distinguish goods or services or reduces the publics perception that the mark signifies something unique, singular, or particular.) 1. FACTORS a. Similarity b. Degree of inherent or acquired distinctiveness c. Does owner engage in substantially exclusive use? d. Degree of recognition e. Intent to create association w/ famous mark f. Actual association between two marks 2. Louis Vuitton, (p. 841) chewy vuiton dog toys did not blur Louis Vuittons brand because they were parodies, adopted imperfectly the design to imitate and suggest, but not use the mark While a parody intentionally creates an association with the famous mark, a successful parody also intentionally communicates it is not the famous mark, but a satire (but, actual use may dilute) D. TARNISHMENT = Requires that the junior user has used the mark on Ds unsavory goods in way that hurts the reputation of the famous mark, even in the absence of confusion (e.g., Enjoy Cocaine in same font as Coca-Cola) 1. NOT tarnishment: a. using a mark to criticize the marks owner. b. using mark to refer to Ps own product (comparative advertising) 2. Louis Vuitton speculative danger that dogs would choke on toy did NOT tarnish Louis Vuittons brand 3.
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IP Colorado Ohm Fall2011

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IP Colorado Ohm Fall2011

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School: Professor: Course: Textbook: 2010).

Intro to IP Outline, University of Colorado, Ohm Fall 2011

Intro to IP Outline Table of Contents

Intro to IP Outline, University of Colorado, Ohm Fall 2011

Element 1: Protectable Subject Matter

Element 2: Reasonable Efforts To Maintain Secrecy

Intro to IP Outline, University of Colorado, Ohm Fall 2011

Intro to IP Outline, University of Colorado, Ohm Fall 2011

Defense: Reverse Engineering

TRADE SECRETS & EMPLOYEES CONTRACTS

EXPRESS AGREEMENTS (3 Types)

Elements of Patentability (5 req for a valid patent)

Intro to IP Outline, University of Colorado, Ohm Fall 2011

Intro to IP Outline, University of Colorado, Ohm Fall 2011

Intro to IP Outline, University of Colorado, Ohm Fall 2011

Intro to IP Outline, University of Colorado, Ohm Fall 2011

New Patent Reform: The America Invents Act (AIA)

Patent Infringement and Claim Construction

Intro to IP Outline, University of Colorado, Ohm Fall 2011

Requirements for Copyright Originality & Fixed

Excluded Subject Matter: The Idea-Expression Dichotomy

Intro to IP Outline, University of Colorado, Ohm Fall 2011

OWNERSHIP: Works for Hire & Joint Works

Works Made For Hire:

Intro to IP Outline, University of Colorado, Ohm Fall 2011

Joint Works: (101):

RIGHT TO MAKE COPIES

Intro to IP Outline, University of Colorado, Ohm Fall 2011

Intro to IP Outline, University of Colorado, Ohm Fall 2011

THE DISTRIBUTION RIGHT

PUBLIC PERFORMANCE & DISPLAY RIGHTS

INDIRECT LIABILITY Third Party Infringement of (two-step analysis)

DEFENSES FAIR USE

Intro to IP Outline, University of Colorado, Ohm Fall 2011

Intro to IP Outline, University of Colorado, Ohm Fall 2011

Distinctiveness (The standard for protection)

ACQUIRING OWNERSHIP: Priority And The Requirement Of Use

INFRINGEMENT Likelihood-of-Confusion & Dilution of Famous Marks

Intro to IP Outline, University of Colorado, Ohm Fall 2011

Dilution Of Famous Marks

Intro to IP Outline, University of Colorado, Ohm Fall 2011

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