Morgan Stephens
INTELLECTUAL PROPERTY OUTLINE
FALL 2009
MYERS
IP and The Constitution- Article I, § 8- The Intellectual Property Clause
I.
Patents and Copyrights
a. “To promote the progress of science and useful arts, by securing, for limited times
to authors and inventors, the exclusive right to their respective writings and
discoveries”
i. Science refers to knowledge / authors and writings apply to science
ii. Useful arts refers to technology / inventors and discoveries applies to
discoveries
b. Purpose- “to promote the progress of science and useful arts”- this creates some
benefit and, hopefully, improvement of the public welfare
II.
What power does this give to Congress
a. The power to give exclusive rights to people qualifying as authors and inventors
b. Note- Trademarks are granted under the Commerce clause, not the IP clause
c. State law can also govern copyright and patent
III.
So why do we protect/secure patents in our Constitution?
a. Public good/economic justification (The Incentive View)- Inventors right to
exclude to make a profit after recouping research losses, but we don’t want
perpetual right to exclude…this is where “limited times” clause comes in.
i. At the end of the “limited time”, generic products enter the market (think
of prescription drugs) and drive prices down
ii. This amply rewards inventors and authors, encouraging more
development, while at the same time providing benefits of inventions and
works of authorship to public (i.e. balance of interests)
b. Natural Rights – John Locke’s theory that each person is entitled to the fruits of
his labor. Think of the Ansel Adams photograph.
i. Not much support from the Constitution, but does appear in some IP laws
ii. Patent expiration doesn’t fit under this view of IP law
iii. This theory believes in longer/stronger protection
iv. There is an increasing trend in the U.S. because of the international
influence of Natural Rights, so we are moving closer to this.
c. Disclosure Theory- without any incentive, you might be tempted to hide your
invention. This fits in with both of the aforementioned reasons for IP law.
IV.
General Information in IP
a. Considerations in Every IP issue
i. Type- what type of right is in question
ii. Validity- is there an enforceable right? Does the item in question have the
right characteristics under patent, copyright, or trademark to deserve
protection?
iii. Ownership- how many entities are making use of the trademark, and who
gets the right. Whose ownership claim is superior?
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iv. Infringement- Was the right infringed upon?
v. Defenses- determining whether an infringing actor has a valid defense to
justify the infringement against a valid owner of IP.
vi. Remedies- what relief is available to the plaintiff? (e.g. money, damages,
injunctions)
b. Balancing of interests- IP law must try to balance the reward/incentive of the
creator with the public’s interest in gaining access to the information otherwise
protected. The inventor gets a legal monopoly or exclusive right, but at some
point the idea(s) fall into the public domain.
Trademark Law
Overview
I.
Trademark Law
a. Origins-Artisans and craftsmen formed guilds and applied symbols to their
products to signify the identity of their makers. The common law provided
protection for the trademarks through actions for deceit.
i. “Palming off”- eventually, English/American common law slowly
developed an offshoot of the tort of fraud and deceit called “passing off”
or “palming off”. Simply stated, this occurs when one passes his goods
off as the goods of another. Therefore, the law eventually began to
recognize the “good will” developed by the artisan’s brand, allowing them
to prevent another from unjustly enriching from his brand
ii. Restatement definition of Palming Off- “one is subject to liability of
another… if, in connection with the marketing of goods or services, the
actor makes a representation likely to deceive or mislead prospective
purchasers by causing the mistaken belief that the actor’s business is the
business of the other, or that the actor is the agent , affiliate, or associate of
the other, or that the goods or services that the actor markets are produced,
sponsored, or approved by the other”
b. Goals of trademarks and Reasons for protections:
i. Protect the goodwill that the owner has developed by consistently
producing a good product
ii. To prevent the consumer from being confused or deceived about the origin
of the goods
iii. Unjust enrichment- tied closely to good will

Warner v. Eli Lilly (U.S. 1924)
o Π Lilly made a product called Coco-Quinine for 50 years, and then Δ Warner
came out with something called Quin-Coco, which was chemically the same
product, which Δ sold for less.
o Supreme Court does not go along with Π’s infringement charge because the
names are generic descriptors essentially.
o The concern is that druggists are filling orders of Π’s product, but they are
instead using Δ’s cheaper, but basically identical product.
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 This clearly harms Π, and there is also a consumer confusion element.
o The Court concludes that Π cannot enjoin Δ from making the product, but it
can prevent the intentional defrauding of consumers by substitution of
products.
o Trademark Law is the solution…the truthful branding of the product.
 State law Unfair Competition claim
 Patent law gives no remedy because there is nothing being “invented”.
 This is a “palming off” case – representing someone else’s products as
one’s one. Common law tort action.
II.
4 Types of Trademarks
a. Brand
b. Service mark
c. Certification mark
d. Collective mark
Trademark Rights
I.
Spectrum of Distinctiveness [Abercrombie & Fitch v. Hunting World (1976)]a. Generic- a term that “refers, or has come to be understood as referring, to the
genus of which the particular product is a species”
i. In other words, the public associates the mark with all products of that
kind, regardless of the name brand who produces it
ii. NO protection under trademark law
iii. So how do you protect from becoming generic?
1. Have name for product separate from the brand name
2. Try to develop good will in other markets (e.g. Nike)
3. Enforce your right- sue infringers
4. Require media to use the ®
o King-Seely Thermos v. Aladdin Industries (2nd 1963)
 Π King Sealy made thermos for years. Π wanted the court to enjoin Δ
from marketing a product called thermos. Π wanted Δ to use the term
Π had developed and
marketed the word to the point where the word has become generic.
 The Court agreed that thermos has become a generic consumer term so
Δ couldn’t be completely enjoined. However, the Δ had to put its
name on their thermos to avoid confusion
 Π was basically too success in its marketing.
 Note 3: Aspirin and Tabasco are other examples of brands
becoming the generic term for the product, no matter the
producer.
 Abercrombie & Fitch v. Hunting World (2nd Cir., 1976)
o Case concerns use of the term “safari” to describe and identify articles
of clothing. Π claimed Δ had infringed on its use of “safari” to
describe clothing.
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o Court ruled “safari” was generic with regards to some clothing (e.g.
hats) and suggestive, or merely descriptive, with regards to other
articles (e.g., boots)
b. Descriptive- a term /phrase that explains a quality of the product (e.g. “Deep bowl
spoon”; “Bubbling Champagne”; surnames)
i. Not protected, but can be upon proof of secondary meaning (see below)
ii. Secondary meaning- the descriptive term has been come to recognize the
product as that of a particular producer. The name has been used so much
that customers recognize it.
c. Suggestive- terms that have some association with the underlying product or
service, but requires some imagination to see the connection (e.g. “gobble, gobble
turkey meat”; “chicken of the sea”)
i. More clever than a descriptive mark
ii. Protected under trademark law
d. Fanciful/Arbitrary- greatest amount of mark protection
i. Arbitrary- the use of an existing word to describe the product in which no
connection is recognizable (e.g. Arm & Hammer baking soda; Camel
Cigarettes, Apple Computer)
1. Great protection because there is no reason for a competitor to use
the mark
2. Term would become generic if it was associated with the product it
sold (e.g. Apple Fruit; Camel Desert transportation)
ii. Fanciful- the creation of a new word to explain your product
3. Great protection
4. Example- Kodak, FedEx, Exxon
Generic
Descriptive
Suggestive
Arbitrary or Fanciful
Thermos
Safari hat
Safari boot (trait)
Steak and Ale Restaurant
Citibank
At-A-Glance
Kodak
Exxon
Not Protected
Somewhat Protected
Protected
Protected (Strongest)
II.
Secondary meaning of descriptive terms [IKC v. Mighty Star]
a. Protected if the plaintiff can show that the descriptive/generic term has developed
a secondary meaning. The test comes down to how consumers perceive the
product.
b. Test
i. Amount and manner of advertising
ii. Volume of sales
iii. Length and manner of use
iv. Direct consumer testimony
v. Consumer surveys
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
III.


c. What about Geographical terms? Clearly, descriptive, so in order to be protected,
the owner must show secondary meaning. Think of Oxford Steak Company.
Inter. Kennel Club of Chicago v. Mighty Star (7th Cir., 1988)
o Facts – Δ puts out a line of plush toys under the name International Kennel
Club. Π IKC doesn’t produce any similar products, but it does exist and is a
prominent name in dog circles. Π began receiving calls and letters asking if Π
was getting into the plush toy business. Some of these letters came from
vendors (potential competition) who set up at Π’s shows and were pissed that
IKC appeared to be getting into the plush toy business.
o IKC had developed its name as a Secondary Meaning. As IKC is clearly a
“descriptive mark” which has developed a secondary meaning as the specific
organization that is the Π in this case.
 Trademark owners do not have to be a gigantic company, you just
need a favorable balance of these 5 factors to determine if there is a
secondary meaning available for Descriptive marks.
o Why wouldn’t a disclaimer work? Why did the court of appeals uphold the
injunction and award money damages for the products already in production.
 The Trial court believed the evidence showed that a disclaimer would
not be sufficiently protective of Π’s trademark rights
Surnames [Findlay v. Findlay]
a. Old View- the Sacred right theory- had the right to use name any way you
wanted; this was largely limited b/c it had the potential of creating immense
consumer confusion
b. Treated the same as everything else- names considered descriptive terms; so proof
of secondary meaning is necessary
c. The case also looked at:
i. Good will developed in area
ii. Consumer confusion
iii. Unfair competition
David B. Findlay v. Findlay
o Facts: Brothers inherited art gallery from dad. Brothers had a spat and split
the company. David operated a gallery in New York, and Wally operated a
gallery in Miami. Wally then tried to open up a gallery in New York almost
next door to David’s gallery which had been operating at the location for
years. Both brothers are selling the same kinds of art.
o Normally, there is a general rule that a person may use its name to sell its own
products, and this use of name is protected by IP law so long as it has a
secondary mean, as surnames fall under Descriptive marks.
o However, here, there is a significant problem because great consumer
confusion will result, and potential injury to David (already established) if
Wally uses his own name in such close proximity to David.
o The Court says Wally can stay, if it uses a different name, or it can move
further way and use the family name Findlay.
Sullivan v. Ed Sullivan Radio and TV Show
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o Court grants Ed’s injunction against Sullivan, who was operating a TV repair
shop under the name Ed Sullivan Radio and TV shop.
o The Court determined that there was great potential for consumer confusion
with that exact name. The Court said he could go with just “Sullivan” or
“Edward Sullivan” and be okay, but “Ed Sullivan” violates the famous guy’s
trademark.
o If the famous Ed had not acted so quickly, he may have been estopped later if
the infringement grew out of control as having acquiesced to the infringement
IV.
Colors, Sounds, Scents, and Other Marks
a. Color [Qualitex v. Jacobson]- the Supreme Ct. has held that color can be a valid
trademark
i. Doctrine of Functionality- if the feature (i.e. color) is functional, it cannot
be trademarked. So in this case, if the color is not involved in the
functionality of the product, then it is not per se excluded from potential
trademarks.
1. How do you determine if a feature is functional?
a. “in general terms, a product feature is functional, and
cannot serve as a trademark, if it is essential to the use of
purpose of the article or it affects the cost or quality of the
article
b. Think of the monopoly- would the exclusive use of the
feature put competitors at a significant non-reputation
related disadvantage
2. Makes functional features identical to generic marks; both result
from a desire to encourage fair competition
ii. Aesthetic Functionality- serves some consumer preference for a color to
be associated with a product (e.g. blue=water). With this, no producer
gets an exclusive right to that color; anything that serves as a source
indicator for a consumer would qualify. Even though it is not functional,
can be a trademark (e.g. ABC’s three chimes, Mrs. Butterworth Bottle)
 Qualitex v. Jacobson Products
o Facts: Π registered the color green-gold as a trademark for its brand of
dry cleaning press pads. Π sued Δ for violation of its color trademark.
o U.S. Supreme Court held that color of a product can be a valid,
protectable trademark.
o Color of press pads doesn’t matter, so it’s not excluded; whereas, color
of a chalk board probably couldn’t be trademarked because there is a
very limited range of colors that work for a chalk board. Same thing
for camo gear.
b. Scent [In re Clark] - case on scented yarn.
i. Uses the Functionality doctrine stated above; so if the scent is not
functional, the owner can trademark it.
ii. So, in this case, the yarn owner could trademark the scent for her yarn;
BUT, if she sold air freshener, she could not trademark b/c it would be
functional
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
V.
In re Clark
o Facts: Owner of company wants a trademark on her floral scented
sewing thread. She claims she is the only one in the business with
scented thread, and her trademark request is for her particular floral
scent, which is similar to “Plumeria”. The Trademark Appeals Board
held that scent is like color, in that if the scent is not functionally
related to the product, thus scents are not precluded from trademarks
Marks Precluded From Registration in Trademark Law- See the Lanham Act
a. Scandalous Marks
i. The trademark statute precludes the registration of scandalous trademarks.
The user, however, is not precluded from using the mark due to the 1st
amendment.
o In re Old Glory Condom Corp.
 Condom company wanted to use the American flag to serve as
its trademark. The examining attorney denied the trademark
because she thought it would be “scandalous” in violation of
the Lanham Act.
 The appeals board reversed, concluding that the general
population would not find the trademark scandalous. Poll
taken determined that less than 5% of the population would be
offended by the trademark. Also, using dictionary definitions,
the board didn’t believe the condoms were scandalous
considering their AIDS awareness concerns.
ii. § 1052(a) - The statute allows a trademark if it helps distinguish one’s
product from another unless it’s immoral, deceptive, scandalous, or
disparaging.
iii. § 1052(b) - No protection when using the flag or official symbols of
governments.
1. The condom case was distinguished above because the flag was
stylized and not a depicture of an actual flag
iv. The statute allows a trademark if it helps distinguish one’s product from
another unless it’s immoral, deceptive, scandalous, or disparaging.
v. How do you determine if it’s offensive:
1. Will be precluded from registration of trademark if a reasonable
person would find the mark to be vulgar or offensive
2. Can still use, just no government protection
 Washington Redskins Caseo Was the trademark of “redskins” sufficiently offensive to be
deemed scandalous? Survey- showed people were offended by
it
o Doctrine of laches- may play role in case; if you sit on your
rights w/o challenging, people may detrimentally rely on your
failure to assert property rights, thus precluding you from suit
o Even if the Redskins lost? They could still use the mark, just
couldn’t prevent others from using it.
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b. Confusingly similar
i. Can’t use a mark that’s confusingly similar to a previously registered
trademark
c. Descriptive marks
i. Can’t register a descriptive trademark unless there is secondary meaning.
NOTE: If you’ve used the mark for 5 years, there is a presumption of
secondary meaning.
d. Misdescriptive Marks [In re Budge]
i. A mark which includes deceptive matter is barred from registration,
despite any disclaimers that may be present.
1. 3 Part Test used in case:
a. Is the term misdescriptive of the character, quality,
function, composition, or use of the goods? (I.e. is it
misdescriptive as applied to the good?)
b. If so, are prospective purchasers likely to believe the
misrepresentation actually describes the good?
c. If so, will the misdescription materially affect a potential
purchaser’s decision to buy the goods?
ii. All three must be met to deny registration.
o In re Budge Manufacturing
 Facts: Seat cover maker had a product called Lovee Lamb,
which was not made out of animal skin but instead was
synthetic fibers. The issue is whether there is sufficient
deception to deny its trademark request. Court ruled it was
deceptive, and barred registration.
e. § 1052(c) Image or signature of a living person- no protection for use of image or
signature of living person, and no using dead presidents while widow is alive.
f. § 1052(e) Geographic/Geographic/Surname marks- No protection for
descriptive/geographic/surname marks…unless (f) is satisfied, which requires the
“secondary meaning” as discussed above. But the secondary meaning doctrine
only applies to those.
g. If not excluded by § 1052, then you are eligible for trademarks in the General
Register and get all the rights that go along with it.
VI.
Service Marks [In re Dr. Pepper]
a. A mark used in the sale or advertising of services to identify and distinguish the
services of one person from the services of another so as to indicate the source of
that service.
b. Treated the same as trademarks- so you can register a trademark for both goods
and services (called a service mark). But, you must have a bona fide service.
 In re Dr Pepper Co. o Used “Pepper Man” for promotions - The Court denied the
service mark because Dr. Pepper was not engaged in a “bona
fide” line of business involving the mark. Since DP was not in
the business of running contests and promotions, DP couldn’t
get a service mark for Pepper Man.
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c. § 1053- if you have a business operating in service industry, you’re treated the
same was as a business that sells goods (i.e. businesses under trademark law)
VII.
Certification and Collective Marks
a. Certification mark- mark used upon or in connection with the products or services
of one or more persons other than the owner of the mark to certify regional or
other origin, material, mode of manufacturing, quality, accuracy or other
characteristics of such goods or services.
i. Can work to certify the goods of a third party (but cannot act at the same
time as a trademark
ii. Can certify either goods or services and show membership in a particular
group or association (collective group)
 Midwest Plastic v. Underwriters Laboratories
o Π wants to revoke Δ UL’s certification mark, claiming that UL did not
have control over its certification marks.
o The court held that UL had reasonable control over its certification
marks and that total control was not required.
o Also, the court held that UL was not using its mark for purposes other
than to certify.
 Had the mark been used both as a trademark and a certification,
the certification would be invalid.
b. Collective Mark - membership in a cooperative or collective group that allows its
PGA Tour
Trademark Ownership
I.
Common Law Trademark Use- who gets the ownership rights of a trademark?
a. Potential owner of a trademark must take steps to establish ownership
i. CL still very important, especially when no party has registered mark
under Lanham Act, b/c then CL controls who has rights to mark
 Galt House v. Home Supply Co.o Company asserting trademark had not engaged in business yet, but had
sat on the trademark for approximately 5-7 years. The Court held that
Π had not done anything with his mark, so Unfair Competition law
prohibits him from excluding others from using this name. Court also
says certain acts on their own (e.g. incorporation, making websites,
getting telephones) is not enough to establish ownership.
ii. In order to gain all possible rights, owner should:
1. incorporate
2. fulfill Lanham requirements
3. register both websites and telephone numbers
4. register under state trademark law
iii. Lanham Act- allows the potential owner of a trademark a reasonable
period to develop the mark, but if you sit on the rights, you’re precluded
from asserting rights. How do you register the mark under Lanham?
1. Use in commerce- ownership of a trademark accrues when goods
bearing the mark are placed in the market (bona fide use).
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a. [Blue Bell v. Farrah] - even the timing of the first shipment
of goods can effect who gets the mark’s ownership. Shows
you must look at facts to determine who owns
b. [Galt House]- b/c plaintiff failed to use the name, he never
put the goods “in commerce”, so he didn’t receive
protection
 Blue Bell v. Farah Manufacturing
o Two competitors used identical marks to identify their clothing lines.
There was no indication of bad faith on either party. Neither party
registered their mark according to the Lanham Act, so Texas
trademark law controlled, which required the court to look at which
party was the first to “use” the mark.
o Problems with both companies efforts before Sept.
 The Court concluded that internal sells do not count as a use.
Use only occurs when products are marketed and sold directly
to consumers. So Farah’s internal sells to its regional sells
people was no good.
 The Court also concluded that Blue Bell’s putting the new
mark on products that were previously marked and ordered
under another trade name does not satisfy “use” and does not
establish common law rights.
o Because Farah made an actual bona fide shipment on Sept., and Blue
Bell’s was not until Oct, the court awarded Farah the rights to the
disputed mark.
o The Court had to pick a winner to avoid consumer confusion and
protect the first party to use the mark. Someone has to win.
2. File an intent to use application- announces to everyone that you’re
asserting your rights to the name. This gives notice that you intend
to use it, so you need to get in the market and do so. The ITU is
good b/c it gives you some protection before actual
production/distribution begins. Process:
a. File application
b. Get 6 month “notice of allowance” to establish use (for
good cause, can receive up to 2 years)
c. When you begin use, file “statement of use” with the PTO
b. Definition of used: “a mark is used when it is affixed to the goods and the goods
are sold, displayed for sale, or otherwise publicly distributed.” (Texas statute)
II.
Statutory Rights
a. Good Faith Prior User/Limited Area Exception [Thrifty Rent-a-Car v. Thrift Cars]
- shows problem with only registering name in the state if a large corporation with
the same name registered federally moves in. The federal registration is more
protective. The court allowed the junior user continued use, but under several
exceptions (frozen to the area)
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i. Local area exception- the junior user is protected despite the federal
trademarks dominance so long as the use was established prior to the
other’s federal registration.
ii. To qualify for Limited area exception, must have:
1. Operation before the other in good faith
2. Legitimate business activity
3. Continuous pre-registration use
iii. But, before you do any of this, you should first complete a trademark
search. The test used to determine is the likelihood of confusion in terms
of consumer minds test.
o Thrifty Rent-a-Car (senior) v. Thrift Cars (junior)
 Senior began business in 1958 before junior. Junior only
operated in a limited geographic area beginning in 1962. After
junior established business, senior registered under Lanham in
1964.
 1964 is the key date; it freezes further activity and expansion
by junior. Had junior opened up in 1965, it would not have
had any geographic rights.
 Note 2 – similar facts to main case involving Burger King, but
here the junior has registered with Ill. state trademark
commission prior to senior’s federal registration. Federal law,
however, trumps state statutory trademark, so the outcome is
exactly the same. Junior only gets to keep its very localized
operation. State law registration did not make any difference.
b. Why register federally?
i. Constructive notice- most important benefit b/c you place everyone in the
country on notice; you have nationwide preemptive rights, b/c when you
register federally, there’s a presumption that you plan to expand
nationally. So all state laws are trumped. There is an exception for a
“good faith user without prior knowledge.” To invoke this exemption,
must show:
1. Prior use to other’s federal registration
2. Mark was continuously used
If you do receive the exception, you are frozen to that particular area
ii. Incontestability- eliminates the issue of who is trademark owner and
whether it’s a valid mark. This status is received if you’ve used the mark
w/o challenge for 5 years. To receive the status, you must file an
application with the PTO within 1 year of the 5th year (i.e. in b/t years 5
and 6). However, the mark can still be challenged on the following
grounds:
1. Obtained fraudulently, mark abandoned, fair use defense, limited
area exception, registered and prior user, antitrust,
2. Generic or abandoned are good challenges
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3. Note- cant challenge descriptive marks, b/c once you have
incontestability secondary meaning is presumed.
 Park ‘N Fly v. Dollar Park and Fly
o Π has an incontestible mark and is trying to enjoin Δ from
using its name.
o
o b/c mark was incontestable, defense was not applicable;
incontestability was conclusive evidence of secondary meaning
iii. Prima Facie validity of mark- you are presumed to be the owner of the
mark and the mark is presumed valid, whether it’s incontestable or not.
iv. Certain rights- rights prevent the importation of infringing goods
v. Enhanced remedies
vi. It’s only $325 dollars to garner all these benefits
c. § 1051 Intent-to-Use application window
i. ordinary way to proceed, for federal purposes, requires that mark be “used
in commerce”
ii. “Intent to use” (ITU) provision doesn’t require you to be currently using
the trademark, only that you have bonafide intent to do so.
iii. Filing “intent to use” application
1. givers 6 months to show you’re using the trademark
2. for good cause, can get a 6-month extension and then another year
extension, for up to two year window, but can’t “reserve” the mark
3. when you begin to use, inform the PTO
 Kodak v. B&H
 B&H was putting out intent to use application for trademark on
a couple of numbers; giving it 6 months to actually use the
trademark
 Kodak claims that numbers B&H was trying to trademark were
descriptive and had no secondary meanings
 Court said that Kodak did the right thing, but that at this point
of process, there was presumption that numbers would
overcome status as descriptive terms
 Dismissed case with without prejudice, so Kodak could file
again later
 Requirement for good faith prevents abuse
iv. Will typically get issue from client in one of two situations
1. client is sophisticated, has not put product on the market, has
trademark in mind and wants to secure rights before hand; “Intent
to use” is good avenue
a. before filing ITU, want to do a trademark search
b. go to OPT website and use search engine; search engine is
complicated though
c. if client has money, there are companies that specialize in
trademark searches
2. Client is already using trademark, but hasn’t trademarked it
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v. Once filed application to register trademark, notice will be published, and
if nobody objects, will be registered
1. Three possible pitfalls
a. Trademark application is rejected by OTP
b. Trademark is objected to by other person
c. Trademark is challenged for cancellation after registration
2. These conflicts are heard by TTAB, which stands for Trademark
Trial and Appeal Board
Trademark Infringement
I.
The Likelihood of Confusion Standard
a. Test- an appreciable number of ordinarily prudent purchasers are likely to be
misled or simply confused as to the source, sponsorship, or affiliation of
defendant’s goods or services [CBS v. Leiderman]
b. Polaroid 8 Factor Test:
i. Strength of the mark- look at the degree the mark is inherently distinctive
(spectrum of distinctiveness) and at secondary meaning
ii. Similarity- degree of similarity b/t the two marks. The test is to “assess
the overall impression” [Foxworthy]
iii. Proximity- product proximity of the marks
iv. Bridging- likelihood that the senior user will bridge the gap
v. Actual Confusion- evidence of actual confusion needed; surveys,
testimony
vi. Bad Faith of Junior User- on behalf of the junior user
vii. Quality of the Junior User’s Mark
viii. Consumer Sophistication
 CBS v. Liederman
o Π CBS is trying to enjoy Δ from opening a restaurant in NY called
“Television City”. Π has a studio called Television City out in LA.
o Balancing Test for Confusion Test –8 part Test.

television production, so kind of a plus for Π.

Π

Δ because of no real overlap based on
difference of industries and geographic distance.
 Bridging the Gap – Π has not really attempted to enter the food
business, so there won’t be any competition between Π and Δ,
so plus for Δ.

Δ because the restaurant hasn’t
opened yet

Δ because no evidence of
bad faith.

plus for Δ because there is
every indication that Δ will operate a first-class restaurant.
 Sophistication of
– ordinary
sophistication.
13
II.
o Judgment call, but Δ was, and probably should have been, the winner.
 Foxworthy v. Custom Tees
o Custom tee using slight variation of Foxworthy’s “you might be a
redneck”
o All the factors of the balancing test weighed in Foxworthy’s favor.
o Note with Nissan Case, where Mr. Nissan had website.
 Pretty boarder line case, until Mr. Nissan began allowing car
companies to advertise on his website.
Dilution
a. The idea that one trademark might dilute the other or reduce its
distinctiveness/uniqueness. The case defines it as “either the blurring of a mark’s
product identification or the tarnishment of the affirmative associations a mark
has come to convey.” The purpose is to prevent “the whittling away of an
established trademark’s selling power and value through its unauthorized use by
others upon dissimilar products.” Likelihood of dilution is not that dissimilar
from the likelihood of consumer confusion. There is a difference, though. It seems
like the test is focused more on the economic effects of the dilution.
b. Consumer confusion does not suffice when the parties are in different markets, so
look to dilution.
c. Categories of injury:
i. Tarnishment- of business reputation
ii. Blurring (i.e. distinctiveness)- the relationship b/t the senior mark owner
and its mark (e.g. Mead claims that lexis will no longer be synonymous
with its search engine if Lexus is allowed to continue naming cars)
d. Elements of a claim:
i. Famous- The mark is famous
ii. Causality- The other mark must cause
iii. Dilution
iv. Of the distinctive mark
v. In a commercial setting
 Mead Data Central (Lexis) v. Toyota Motor Sales (Lexus)
o Π owns Lexis. Δ manufactures cars. Π sues to enjoin D’s use under
the state dilution statute.
o Mead lost b/c their Lexis is used only w/ attorneys/accountants, thus
the different markets of the two mark holders made the distinction less.
In other words, the two marks can coexist w/o any major confusion
e. Lanham Act- requires “actual dilution of the distinctive quality of the mark”
i. Likelihood of harm is not enough
ii. Lanham does not mention tarnishment
1. Tarnishment is alive and well under state dilution law. Ex. AdultsR-Us tarnishes Toys-R-Us
iii. Mental association in the minds of consumers is not enough to prove
dilution
1. Mental association does not reduce the capacity of the famous
mark to identify its owner.
f. How do you proof actual dilution under the Lanham act?
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III.
i. Actual loss of sales- Proving loss of sales is not necessary, but it may be
one way to show “actual dilution”
ii. Survey- if done correctly is probably a very good way to show “actual
dilution”.
iii. Identical marks- Nearly identical marks also bolster a dilution claim.
iv. Circumstantial evidence
 Moseley v. Victoria’s Secret (case in supplement)
o Facts: Π sued to enjoin Moseley from opening a store called “Victor’s
Secret” claiming the junior mark would create confusion and dilute the
distinctiveness of the mark. Moseley changed the name to Victor’s
Little Secret to try to make a distinction.
o District Court (CA 6th affirmed) gave summary judgment to Mosley
because “no confusion exists as a matter of law”. The U.S. Supreme
Court reverses for more fact finding.
v. See pages 217-219 for examples of Dilution case
g. Infringement analysis in Parody cases- look at facts to determine likelihood of
confusion, and uses a very similar test. The court laid out several factors to
consider:
i. Strength of the mark
ii. Similarity b/t the two marks
iii. Competitive proximity of the product in which the marks are placed
iv. Intent of infringer to pass off goods as those of senior holder
v. Incidents of actual confusion
vi. Degree of care likely to be exercised by customers of the trademark holder
 Mutual of Omaha Insurance v. Novak
o Novak makes parody T-shirts, taking the Mutual design and
twisting it into the “Mutant of Omaha”.
o Mutual used a survey where the District Court believed enough
people though that Mutual was “going along” with the message
of Novak’s T-shirt.
o The Court determined there was a sufficient likelihood of
confusion to enjoin Novak’s use, or rather, the Court held the
District Court’s opinion was not clearly erroneous.
 Court said both parties produced T-shirts. This is a
stretch.
 Look at factors in LOC above.
o Note Budweiser/Myrtle Beach case (t-shirt used parody of
Budweiser can to make “King of Beaches” T-shirt). The court
weighed the facts and came out with a different conclusion.
Defenses
a. Abandonment, Descriptive use, and Equitable defenses
i. Abandonment- a mark is abandoned when “its use has been discontinued
with intent not to resume such use.”
1. Four ways in which a mark is abandoned
a. Non-use with intent not to resume use
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b. Assignment in gross- can’t license the mark by itself; the
good will of the mark must accompany (see [Quaker]}
c. Naked licensing – trademark owner who licenses out the
name without any attempt to control the use or quality of
the goods or service.
d. Deliberate action of the trademark, e.g., “we’re given up
these trademark.”
2. Restatement definition on page 237 lists first factor above and then
generally describes the other three factors, but basically the same
 STW Co. v. The Quaker Oats Co. (1993).
 Whether «THIRST-AID» as used by Gatorade infringers on
STW’s trademark rights.
 Defense of Abandonment
o Non-use of non-essential part of trademark doesn’t
constitute abandonment and there was enough evidence
of intent to use to overcome prima facie case for
abandonment; so STW wins
 When transferring a trademark, be sure to include the phrase:
“and all goodwill appurtenant thereto”; satisfied here so STW
wins
ii. Generic Marks- always a defense
iii. Fair Use
1. Consumer confusion is the primary inquiry, but a defense doesn’t
require absolutely 0% confusion
2. Fair Use Defense only applies to Descriptive Terms that are NOT
used as an actual trademark.
3. Defense applies primarily to description of the product or the
geography origin of the product.
 KP v. Lasting Impressions - permanent makeup case. Fair Use
Defense
o Dispute is over the use of the mark microcolor/micro
colors. KP asserts affirmative defense of “fair use”.
iv. Equitable Defenses
1. Consent
2. Laches- most common, defendant must prove:
a. plaintiff had knowledge of the defendant’s unauthorized
use of confusingly similar mark
b. Plaintiff unreasonable delayed action
c. Defendant was unduly prejudiced as a result of the
defendant’s delay
3. Waiver
4. Estoppel- plaintiff knowingly acquiesced to defendant’s use of the
mark- detrimental reliance argument
5. Unclean hands- e.g. trademark owner who made a
misrepresentation in his application for use of the mark
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b. Comparative Advertising [Channel knock-off case]
i. Comparative advertising is Ok so long as a reasonable consumer isn’t
confused as to the origin of the product
ii. Even though there is free-riding going on, the rule is that the competitor
can make a direct comparison to a competitor as long as everything is
truthful.
 R.G. Smith v. Chanel
o Chanel got prelim injunction against Smith after Smith was using
Chanel’s trademark to advertise its own copycat fragrance. District
Court hammers Smith, but the appellate court reverses and allows
Smith to continue the advertising as it had.
o Chanel could not get a patent for its fragrance, so it could not use its
trademark to exclude Smith from the market.
o The Court held that comparative advertising is fine b/c the consumer
wouldn’t be confused as to origin of the product
c. Used or Reconditioned Goods
i. Can keep the name of a reworked good so long as it’s not a major rework
of the product
ii. In other words, you can’t have an essentially/completely different product
labeled as the product of the original maker.
1. Protects the name of the primary mark holder from reputation
injury resulting from worthless refurbished products.
2. Balancing of the rights of the mark owner with the rights of the
public to purchase cheaper, second-run goods (consumers know
what their buying v. reputation of manufacturer)
 Champion Spark Plug v. Sanders
o Sanders reconditioned Champ spark plugs. The boxes said the
renewing company’s name and Champion. The spark plugs still said
“Champion” and very small said “renewed”. Nowhere on the plug
was the name Sanders. District court said Sanders must remove all
references to Champion’s trademarks.
o Appellate Court and Supreme Court held that Champion did not have
to be removed from the outside of the box so long as the consumer
would not be confused that the plugs were not 1st class goods made
only by Champion.
d. Remedies
e. Depending on the infringing act, could be
i. Injunction- most common
ii. Defendant’s profit/revenues
iii. Reasonable royalties for use of the mark; how determined? [Quaker]
1. Look at similar royalties contracts
2. Survey people
3. Bring in experts
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iv. Compensatory damages- damages sustained by Plaintiff
v. Attorney’s fees- court Costs (Usually reserved for bad faith actions)
vi. Other damages- include destruction of fraudulent/counterfeit goods
 Sands, Taylor, and Woods v. Quaker Oats - Gatorade case continued.
o Damages to award Π for Δ’s infringement.
o District Court awards Π 10% of Δ’s revenue occurring during the ad
campaign, which was more than $24.5 million.
o Appellate Court reverses hold this to be too much. Instead, the court says
a reasonable royalty should have been awarded. How to determine
reasonable royalty.
 Look at similar royalty’s contracts to see what is reasonable.
 Survey people
 Bring in an expert - either attorney or professor or someone
o Court reverses the District Court and remands. District Court later
determined that the award should be about $10 million, which the Circuit
court affirmed.
o The appellate court never disturbs the DC’s award of attorney’s fees.
 Usually attorneys’ fees are reserved for bad faith actions of the
defendant. This seems like a pretty weak case for this type of
penalty.
Federal Unfair Competition: § 43(a) of the Lanham Act (Applies mainly in Trademarks)
I.
Attribution- major change that dramatically alters work or undermines reputation.
This is a broad provision.
a. Elements:
i. Alterations (major)
ii. Failure to credit; or
iii. Improper credit
 Choe v. Fordham Law - law review case
o Choe gets a comment published, but he is extremely displeased about
the version of his comment that was actually published in the law
journal. Court rules for Defendant… why?
o For Plaintiff to have a COA, the defendant must have made it appear
he was the author of a work not his own.
o Had the comment been substantially different from what he produced,
then he may have had a claim under §43(a): false designation of
origin likely to cause confusion of the true origin.
b. 43(a) protects against:
i. § 43(a) is a federal unfair competition statute that only applies when
substantially false statements made about goods or services.
ii. Dramatic alteration - think Monty Python example. Results in
embarrassment to the author. Name is placed in the credits and harms the
credited.
iii. Flip Side - Name is left out of the credits for a product. Both sides of the
coin are actionable under 43(a)
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II.
Trade Dress- the total image and overall appearance of the business. Court says it’s
the “total image of a product and may include such features as size, shape, color, or
color combination, texture, graphics, or even particular sales techniques.” (ex. Mrs.
Butterworth’s bottle)
a. When is Trade Dress protected:
i. Nonfunctional- Trade Dress is not protected if it serves a functional
purpose.
1. A feature is functional if it is essential to the use of the product
2. Or, anything that improves the operation of the product
3. Shows limits of Trademark law- it encompasses everything but the
product itself
And
ii. Inherently distinctive a product is inherently distinctive if its intrinsic
nature serves to identify a particular source (e.g. Butterworth’s bottle, for
the 8th time).
iii. Secondary meaning- same as above, and occurs when “in the minds of
the public, the primary significance of a mark is to identify the source of
the product rather than the product itself.”
 Two Pesos v. Taco Cabana
o Taco Cabana claimed to have a protected trade dress protected by the
Lanham act which was violated by Two Pesos.
o The Court looked to the total picture of the trade dress: décor, bright
colors, artifacts, employee dress, menu items/presentation, etc, and held
that Taco Cabana had an inherently distinctive trade dress, deserving
protection by the Lanham Act.
o The Supreme Court analyzed the issue here as if it was a regular
trademark dispute. The Court basically considered the entirety of the trade
dress as one overarching trademark.
b. Trade Dress does not just apply to the décor of a restaurant. It also applies to the
total packaging of all consumer goods. Think of all the packaging involved in a
case of beer. The overall appearance is the trade dress protected (potentially) by
the Lanham Act.
c. Also, there is strong public policy in favor of protecting Trade Dress for purposes
of establishing consumer good will and advertising creativity.
III.
Product Configurations (Product design)
a. Can’t be treated the same as trade dress
i. Product design is not immediately recognizable as a brand like trade dress
(i.e. it’s not inherently distinctive)
ii. So, to win, the plaintiff must show a secondary meaning
iii. Can’t be functional
Wal-Mart Stores v. Samara Brothers
o Wal-Mart gets a clothing manufacturer to take Samara’s clothing designs and
create a line for Wal-Mart with only minor changes.

19

IV.
o The SC holds that Samara has not shown an inherently distinctive design and
must therefore show secondary meaning here under a trademark “trade dress”
claim here.
o Why is the Court not treating this “product configuration” the same as “trade
dress”.
 The Court compares the design of a product to the issues of colors in
the Qualitex case. Colors can be protected, only if the color obtains a
secondary meaning in relation to the product. This is a tough burden
in the case of colors AND product configurations.
o The Court concludes that product configuration must be non-functional AND
cannot be inherently distinctive because it is almost certainly not immediately
recognizable by the consuming public.
o Because the product configuration here is not inherently distinctive and
because Π has not shown a secondary meaning, then Π’s fails in its prima
facie case.
TrafFix Devices v. Marketing Displays, Inc.
o MDI at one time had a patent for its two-spring highway sign design, but it
had expired. Upon expiration, MDI’s competitor, TrafFix, reverse engineers
MDI’s signs. MDI claims its double spring design is a distinctive design,
protectable by the Lanham Act.
o The Court recognizes that a patent based on functionality does not necessarily
preclude a finding that the same feature can also be a “nonfunctional”
trademark feature. However, the Court recognizes that there is a presumption
that a feature cannot be both functional for purposes of a patent and
nonfunctional for purposes of a protectable trade dress.
o The Court determines that the dual spring design is functional, and it
recognizes that to give MDI trademark protection would allow them to
double-dip on their single design. There is a strong public policy in favor of
allowing competition after the expiration of a patent
False Advertising
a. Lanham act covers false statements of fact during advertising process- “any
person who... in connection w/ goods in commerce… false or misleading
descriptions/representations of fact, which in commercial advertising or
promotion, misrepresents the nature, characteristics, qualities, or geographic
origin… shall be liable for civil action…. Bla bla (p. 286)
b. Specific statements of fact (explicit or implicit representations that test proves its
product superior) are actionable.
i. Plaintiff must show:
1. There’s nothing that conclusively demonstrates that one
product is superior to another
2. OR that the advertisement though literally true, is likely to
mislead and confuse consumers.
ii. Designed to protect false actions by competitors that damage other
competitors in the marketplace
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
iii. As with other sections of the Lanham Act, § 43(a) (false advertising), the
wording is very broad to allow court interpretation. While the statutory
language seems to allow individual consumers to bring a false advertising
claim, courts have overwhelmingly held that this is not the purpose of the
Lanham Act, so such a claim is not allowed.
Castrol v. Quaker State
o Quaker claimed its oil was vastly superior to other oils in an overwhelming
majority of test engines. While Quaker’s oil did enjoy a faster “oiling” time,
Castrol argued there was absolutely no evidence that Quaker’s oil provided
better protection than Castrol’s product b/c “residual oil” in an engine negates
any advantages of having a faster oiling time.
o The Lanham Act protects against the false statements of fact used in
advertising against competitors.
 Because Quaker claimed that a test proved its facts, Castrol only had
to show the tests did not establish the claims made, so then Quaker had
the burden of proving its product was in fact superior.
 Had Quaker only claimed its product was superior without pointing to
facts, then Castrol would have had the burden of proof to show that
Quaker’s product was in fact NOT superior to Castrol’s product.
The Right of Publicity & Trade Secrets & Protecting Ideas
I.
Right of Publicity- protects one’s name, voice, likeness used for commercial
purposes w/out their consent. Applies to person only, including the famous as well as
mere mortals. Governed by the Uniform Trade Secret Act (USTA)
a. Plaintiff must allege
i. Defendant used Plaintiff’s identity
ii. Appropriation of Plaintiff’s name or likeness to Defendant’s
advantage
iii. Lack of consent
iv. Resulting injury
 Midler v. Ford Motor Co.
o Δ Ford launched its “yuppie” campaign, and Ford wanted Π Midler to use
her song in its ad. Π declined to allow her song to be used, or to sing for
the commercial. In response, Ford went and got one of her old backup
singers to sing Π’s song and was told to “sound as much as possible like
the Bette Midler record.” Π claims she has been deprived of her song and
image. Normally, the backup singer woman would be allowed to sing
however she did, but because she was hired by Ford to intentionally sound
like the Π, she was a claim under the Right of Publicity.
o Because Ford appropriated Midler’s identity, Δ violated Π’s common law
right of publicity. The court recognizes that a human voice is highly
identifiable and is deserving of protection under the common law.
o There are probably many times when imitation of a voice is not
actionable, but where the distinctive voice of a professional singer is
widely known and is deliberately intimidated in order to sell a product, the
product seller has committed a tort (at least in California).
21

Damages here certainly included an injunction and probably
included monetary damages in relation to what Π could have made
had she been paid to perform the commercial endorsement.
b. Recognized limitation for legitimate news reporting, commentary, entertainment,
works of fiction or nonfiction, or in advertising that is incidental to such uses (e.g.
celebrity pictures in magazines).
o Human Cannonball Case, note 6, p. 297. Not all news reports get
automatic protection from right of publicity suits. Because the news
report aired his entire, 15-second act, the media violated his common law
rights, and he could recover despite the media’s claim of 1st Amendment
protection.
c. What about the 1st Amendment?- Use the Rogers test applied in the Outkast case:
i. Artistic Relevance- is the use of the identity related to the artistic
expression and message of the song? If not used for marketing purposes,
not violation
ii. Misleading- would consumers believe the person whose identity was used
was associated with the song? But be careful, no consumer confusion
proof is necessary as in trademark law.
 Parks v. LaFace Records
o Rosa Parks sues inter alia for Right of Publicity and False Advertising
under the Lanham Act. Court uses the Rogers Test in order to balance the
First Amendment defenses of Outkast and the Right of Publicity/False
Advertising claim of Parks. Rogers is a two part test, and the same
analysis is applied to both claims of Parks:

the question is whether Park’s name has
something to do with the song, or whether Outkast used her name
solely for marketing purposes. Is the phrase “back of the bus”
enough, considering this phrase as used by Outkast, is saying other
rappers are inferior. Remanded
 Misleading Prong - Is Park’s name, as used, explicitly misleading
to consumers.
Court determines that reasonable minds could
not differ on this. There is clearly no explicit misleading, so the
trier of fact below will only consider “artistic relevance”.
d. What about photos/likeness of a person? [Tiger Woods case]- court applies
artistic relevance test again to person who took photos and made prints of past
champions
i. A person’s image or likeness cannot function as a trademark.
ii. Celebrity’s name may be used in the title of an artistic work so long as
there is some artistic relevance- a photo is not inherently distinctive
iii. However, celebrity can get royalties if it was a commercial product, like,
for example, a door mat.
 ETW (Tiger Woods) v. Jireh Publishing
o Woods sued Jireh and the artist of a painting artistically depicting Woods’
victory at the Masters.
o There is a proprietary right in one’s name, but not to the extent that Woods
is asking for here.
22
o The court finds artistic relevance under the Rogers Test.
e. Does the right of publicity survive death?
i. Becoming increasingly like survival statutes in torts
ii. Courts are prone to recognize commercial rights in IP after a the person
has died (think of the family members)
f. Right of Publicity is a personal tort but a commercial right of protection.
Corporations do not have a right of publicity.
g. Right of Publicity requires a showing of pecuniary loss, but False Advertising
does not.
II.
Trade Secrets
a. Trade secret law is a creature of state law, there is no federal trade secret
protection. Along with patent law, trade secret law is one of the principle ways in
which new inventions are protected.
b. Uniform Trade Secret Act (majority rule) Established in Minuteman v. Alexander
formula, pattern, compilation, program, device, method, technique, or process to
which all of the following apply:
i. Economic value- derives value from not being generally known (look at
competitive advantages)
1. Can be actual or potential value
2. Doesn’t require you to be the only corp. with the information
3. Can be multiple companies can have the formula, but it is still not
known to other competitors and the general public.
ii. Reasonable secrecy efforts- Information is the subject of efforts to
maintain its secrecy that are reasonable under the circumstances.
c. Another test:
i. Info not readily ascertainable
ii. Economic value- competitive advantage
iii. Reasonable efforts to maintain secrecy
iv. Developed at Plaintiff’s expense
d. Four ways trade secret infringement can occur
i. Breach of confidence
ways
1. Relationship - i.e., R&D employee
2. Employee given confidential information (or have good reason to
know it is) in employer’s operation.
a. Duty to implicitly maintain that information from
relationship of the parties.
3. Express agreement
a. For third party contractors, or employees
ii. Improper means
1. Illegal means- breaking into the plant
2. Fraudulent misrepresentations
3. Tapping wires
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4. Eavesdropping
5. Espionage [DuPont]
6. Receives by express agreement
- Lambweston v. McCain Foods
o company had sought and obtained patents for this machine
o can choose to seek patent protection or trade secret
o when you first develop something, probably develop it in secret and
only protect it through trade secret laws
o once its completed, must choose; In this case, there are two
inventions. One is the machine, and the other is the process for
making the machine
o They decided to patent the machine and keep the process for
manufacturing the machine as a trade secret. Process can theoretically
be protected by trade secret for an indefinite amount of time
- DuPont v. Christopher
o Christopher takes photographs for 3rd party. Gets sensitive
information. DuPont sues for misappropriation of trade secrets
claims that there must be some wrongful, i.e. illegal, conduct before
misappropriation of trade secrets;
o court found that only need to acquire information in improper way
o DuPont had taken reasonable means to protect trade secrets
o Improper conduct is broad description that has latitude for individual
circumstances. If conduct was designed to bypass reasonable
measures, (i.e., flying over fence), probably good argument for
improper conduct
iii. Receiving
1. Receives when knows or has reason to know came from improper
means, but didn’t actually arrange it
2. Very important to be able to sue these people; more likely to be
deep pockets and more likely to need injunction against them
iv. Accidental disclosure
1. Can be liability if know or have reason to know it is trade-secret
v. One of the above four must be shown for trade secret violation
e. Arguments/reasons for Trade secret:
i. Problems:
1. Trade secret law offers limited protection; unless you are capable
of keeping the information secret
2. If you want full protection, file a patent
3. Reverse engineering, independent research, and imitations are not
protected- only protects the secret information being obtained
directly from you.
ii. Benefits:
1. Patents expire, whereas trade secrets have no limit
2. May be unable to receive a patent
f. Remedies:
24
i. Temporary injunction - Court would determine the period of time it would
have taken the thief company to obtain the formula via legal means
ii. Damages could be awarded if the secret was re-sold.
III.
Non-Competition Agreementsi. 3 Part Test
1. Is the restraint reasonable in the sense that it is no greater than is
necessary to protect the employer in some legitimate business
interest?
a. Also look at whether it is too geographically broad
2. Is the restraint reasonable in the sense that it is not unduly harsh
and oppressive in curtailing his legitimate efforts to earn a
livelihood?
a. Rationale: We want competition; counter argument – but
D’s still got their info as hired workers under P.
b. Basically, look at whether the employee retains broad
employability?
3. Is the restraint reasonable from the standpoint of a sound public
policy?
ii. Difference from confidentiality agreement?- you don’t have to show a
breach in trade secret law under no-competes.
- Comprehensive Technologies International v. Software Artisans, Inc.
o Hawkes was employee. Part of his employment contract required that
he not reveal or use any of their trade secrets and for a year couldn’t
compete, hire other employees, or solicit customers of company.
Hawkes left with group of other employees and they all formed
corporation that produced software similar to former company’s
product. District court said non-compete was too broad,
o appellate court overturned after looking at 3 part test
IV.
Protecting Ideas- contractual theories are difficult to use for idea protection
i. To recover for the misappropriation of an idea
1. The idea is Novel; some courts soften this idea under bargain for
exchange principles
2. The idea is in concrete form
3. And the defendant must makes use of the idea
- Sellers v. American Broadcasting Co.
o Sellers allegedly promised Rivera true cause of Elvis’s death. They
signed agreement that sellers would get copyright and credit. Rivera
asked for more proof. Sellers called Rivera’s wife and said it was
verified, but wouldn’t reveal proof. 9 months later, ABC and Rivera
went to investigate, found proof, and used story
o NY court said contract was too vague and uncertain to be enforceable
b. Other methods of protecting ideas: Unjust Enrichment and Quasi-Contract;
ownership of invention/process ideas in employment situations
25
-
i. Unjust enrichment- P may recover under Unjust Enrichment theory
where the D is in possession of money or property which in good
conscience and justice he should not retain.
1. Compensation must be based upon the reasonable value of the use
and the reasonable value of the services rendered by the P.
2. [Materese]- course of dealing b/t parties to encourage employee to
build a loading device; employee never compensated
3. Factors to consider if Unjust enrichment principles apply:
a. Relationship b/t the parties before and after the disclosure
b. The seeking of disclosure
c. Promises of compensation
d. Specific character, novelty, and patentability of plaintiff’s
invention
e. Subsequent use made by the defendant
f. Lack of compensation given to plaintiff
ii. Spectrum of Employment
1. R&D employees- specifically hired to conduct research for the
company. The employer owns what’s developed
2. Outside Work- (employee in the garage scenario)- not an R&D
employee, not using resources of employer, essentially
“moonlighting”, then the rights belong to the employee
3. Shop Right- where P is an employee, not R&D, but develops an
invention/idea using company resources and time. Employee owns
invention, but employer gets perpetual license to use invention in
business. Don’t have to compensate employee. Concept is that
equitably, employer should have some right to use b/c of company
time and resources put into it
Matarese v. Moore-McCormack Lines, Inc.
o
theory of
quasi contract, or unjust enrichment. Important that he was not an
R&D employee; if he had been, he wouldn’t have had much right to
sue. Shop right prevents him from using his patent to sue; limits
ability to sue former employer.
o Π wins because his idea was concrete and novel (he applied for a
patent) AND his employer had promised him compensation
iii. Line b/t protected and unprotected idea?
1. Abstract ideas will not be given protection without a showing of
concreteness and novelty
2. For example, if you have an idea for a movie that encompasses one
sentence, no protection; but if you have plot structure, characters,
etc… you have a stronger argument for protection.
- Smith v. Recrion Corp.
26
o Smith, while employed as a keno writer by the Stardust Hotel in Las
Vegas, thought of idea that a recreational vehicle park constructed and
operated as a part of the luxury hotel would be a profitable idea.
Smith developed a brochure and had meeting with GM of hotel. GM
sent smith letter saying it was not interested. Two years later, Recrion
opened up camper park. Smith sued for express contract and implied
contract, and common law copyright
o Court found there was no express contract or implied contract
o Court went further to say that idea could not be protected by express or
implied contract unless it occurred before disclosure of the idea
o Looked at common law copyright, and said it must be concrete enough
reteness requisite;
still required a lot of research into idea
iv. Contractual claims1. Express contract- terms are expressed in words/writing
2. Implied contract- terms are manifested by conduct
3. Implied in fact- the court would have to determine that both parties
intended to contract, and that promises were exchanged.
PATENT LAW
Overview
I.
Patent Act of 1952
a. Patents are federally regulated; no state patent laws
b. Application process through the USPTO- Patent and Trade Office
II.
General Information
a. Novelty- this is the common idea in all patents; Once you establish novelty, you
can receive a patent. Can patent anything that is “the product of human
ingenuity”
b. Statutory Monopoly- Patents are a statutory right to exclude others during the life
of the patent, which is 20 years from the date of application (14 years for design
patents). This is a monopoly on your product, which allows you to exclude others
not only from copying the subject matter of the patent, but also from exploiting
any independently developed subject matter which is identical to, or equivalent to,
the patented invention.
c. Disclosure- but, if you get a patent, you must disclose information on the product
to the PTO. See enabling below.
d. Limits on Patentability
i. Laws of nature- a new mineral
 Diamond v. Chakrabarty
o Applicant developed bacteria which helps clean up oil spills.
Patent examiner refused to issue patent because the invention is a
living organism. The appeals court reverses because the bacteria
is not naturally occurring, has great economic utility, and was
truly novel.
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o Normally, natural processes are not patentable, but here,
Applicant has satisfied the requirements for obtaining a patent.
There is a clear difference here between discovering something
new in nature and human development of a new product. The
genetic engineering here made the bacteria a useful new product.
ii. Physical phenomena
iii. Abstract ideas
 State Street Bank v. Signature Financial Group
o Signature develops some great mutual fund software and State
Street wants to get a license. The talks break down, and State
Street files a DJ against Signature to invalidate the patent. State
Street wins at the trial court and Signature appeals.
o Mathematical Algorithm Exception - MA is not patentable as an
abstract idea with a product patent, but it may be patented if used
in a useful and concrete result as a process patent.
o Business Method Exception - court shoots this exception down
as invalid.
III.
3 types of Patents
a. Utility- garden variety patent; 3 types (20 years)
i. Product- examples include light bulbs, mousetraps. Eligible to “whoever
invents or discovers new and useful products, machines, manufacturers, or
composition of nature, or any new useful improvement thereof, may
obtain a patent therefore, subject to the conditions and requirements of this
title.” This basically covers “products of human ingenuity.”
ii. Process- process for accomplishing some result (e.g. chemical
production). 2 types of tests to determine if patent applies:
1. Mathematical Algorithm Test- whether it recites, directly or
indirectly, a mathematical algorithm, which the Sup. Ct. has
described as “a procedure for solving a given mathematical
problem.”
2. Physical Transformation test- determining whether the claimed
invention is applied to or limited by physical elements or process
steps; regardless of whether the invention performs mathematical
operations; if it transforms or reduces the subject matter to a
different state or thing, it is statutory under § 101. But, business
methods (ways of doing business) are not patentable b/c they’re
abstract ideas.
iii. Improvement- improvement on either #1 or #2. Examples include
improving an existing car (e.g. hybrid car, even though it could be a
product patent as well)
b. Design- patent on ornamental features of a product. Similar to trade dress in that
it deals with non-functional features of the product. (14 years)
c. Plant- as in botany, seeds, etc… Must be a distinct plant variety
Requirements/Triggers for Patent Protection
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I.
Utility patents- must be:
a. Novel- an invention is not patentable unless it differs from all products and
processes in existence at the time it was invented. So, the patent office doesn’t
allow a patent once there has been prior knowledge or used information of the
same device
i. Prior Art – is it new? (what is out there already, and cannot be claimed as
a new patentable invention):
 Connecticut Valley Enterprises v. United States
o Part of proving novenas is a major component of obtaining a
patent.
 This means there cannot be Prior Knowledge or Used
Information of the Prior Art under §102(a)
 This also means more than talking in abstraction about
the subject of the patent. CVE’s “invention” had been
produced by a prior inventor and then abandoned ???
ii. Prior Knowledge – (w/in US only) just merely writing an article speaking
in abstract terms that something can be done does not establish this.
- In Re Wyer
o The appellant, before applying for his application in the US, applied
for a patent in Australia a year earlier. You must bring something
brand new to the table to get a patent, so it can’t be a part of the state
of the art, which includes printed, published materials, but this printed,
published materials must actually tell you how the invention works to
void patentability.
o Prior art = knowledge/use, elsewhere patented, and published
somewhere in the world. The question is whether that application
qualified as publication
o Four criteria to determine if there if publication
 Intent to make public
 Activity in disseminating
 Production of a certain number of copies, and
 production by a method allowing production of a large
number of copies
o A person cannot serve as his own prior art. So a person’s prior
activities does not harm his ability to obtain a patent.
iii. Prior Use – (US only) something that can function (in present terms).
iv. Patented (worldwide) - a foreign or domestic patent application
constitutes a “printed publication.” Must be publicly accessible (is it
available online, etc.). A foreign patent that does not contain an enabling
disclosure does not qualify.
v. Design Patents- novelty of a design patent is to be considered in light of
the impact of the design upon the ordinary observer. This condition is
met when the “average observer takes the new design for a different, and
not a modified already existing design.”
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vi. Timing of Patents- you have one year from the time you place the
product/invention in public use, not counting experimental use, to obtain
patent (see Public use below)
vii. § 102(g)
1. Patent Rights granted to the first inventor, not first one to get the
patent application filed (US rule).
2. First inventor – as long as reasonably diligent in carrying out the
invention process.
a. reduces it to practice –
b. Exception: Inventors who deliberately concealing their
invention can forfeit their rights.
 Paulik v. Rizkalla
o Inventor works on an invention, but then he puts it aside, and
then picks it back up and works on it some more. Other guy
comes along and files a patent after first inventor has started back
on the project.
o 2nd guy argues that he won the foot race to the patent office, but
that is not the American law.
 We have a first to invent system, not a foot race system.
 Most other jurisdictions have a first to file approach.
o However, under our system, if an inventor works on a new
invention and then it goes dormant and he never picks it back up
in a reasonable time before the second guy comes along and
files, then the first inventor can lose his priority under “spurring”
doctrine.
 Also, a major purpose of patents is to disseminate
knowledge, so if an inventor is just sitting on an invention
waiting for it to develop into something else (more
lucrative), then he may lose his protection. This is a
reasonableness test.
b. Nonobvious- [John Deere]- under § 103- means there is actually something being
invented. 3 part test:
i. Scope and extent of the prior art
ii. Differences b/t the prior art and the claims at issue
iii. The level of ordinary skill in the pertinent art- not an “ordinary
inventor”
iv. Secondary considerations:
1. market considerations – commercial success
2. long-felt need – long felt, but unresolved needs
a. Look at prior unsuccessful (failed) attempts at making an
invention to solve a known problem. If you’re coming up
to a solution to a longstanding/baffling problem, then you
are probably going to get patent protection.
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II.
3. acquiescence among competitors – when others in the market
place see the invention, and add it to their own use, this shows
“nonobviousness.”
4. Favorable comments of experts in field
5. Failure of others
 Graham v. John Deere
o In this case, spring guard was the subject of the patent dispute. The
“inventor” was held to not be an inventor, but rather a smart mechanic.
Not Non-obvious.
c. Useful
i. Utility - The process must be refined and developed to the point where a
specific benefit exists in its currently available form. Because a monopoly
is being created, the Court requires that actual usefulness of the product be
shown.
1.
“distinctiveness”. This could be purely ornamental differences.
 Brenner v. Manson
o Π applied for a patent for a steroid which Π believed would be
useful for cancer treatment. Patent office rejected his application
because there was no proven utility yet, even though Π
established the steroid was closely related to other steroids which
did have a tumor-inhibiting effect in mice. The Supreme
affirmed.
ii. Design- To qualify, the design must be primarily ornamental (in place of
the useful requirement in utility patents). A utility patent would deal with
matters such as an arch support or tread for the shoe, whereas here, the
issue was design of color, etc…)
 Avia Group International v. L.A. Gear.
o To be patentable, the design may not be functional. It must be
ornamental only. The same shoe could have been patented under
both design and utility patents, but both patents could not be
granted on the same aspects of the show. Some parts of a shoe
may be protected by a utility patent, and other parts may be
protected by a design patent.
o Proving that a variety of designs that have the same function
affect is one way of showing that a particular design is
ornamental and thus protectable by a design patent.
 For example: Chair legs are obviously very functional.
A design patent may be granted for particular types or
designs of chair legs because many designs of chair legs
would accomplish the purpose of holding up the chair.
Public Use- § 102(b)- 1 year rule- shows that once you invent something, go ahead
and obtain a patent.
a. 1 Year Statute of Limitations- [Metallizing]- D’s challenged validity of P’s patent
on the ground that the inventor had placed the patented process into public use
more than 1 year before the patent application was filed.
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i. Sales constitutes a prior use that starts the 1 year time limit (to date of
application).
1. The 1 year limit is similar to a SOL.
2. Other countries require a patent before the item enters the market.
No grace period at all.
ii. Testing and experimentation – if purpose of use to test whether it will
work, then the inventor will not trigger the 1 year period. Even if the
experimentation discloses the product to the public.
iii.
commercially, 1 year starts to run. One reason patents grant legal
monopoly is to encourage disclosure. Inventor cannot rely on secrecy and
then obtain patent in order to extend the time period of his monopoly.
 Metallizing Engineering Co. v. Kenyon Bearing and Auto Parts
o Δ’s successfully challenged validity of Π’s patent on the ground that
the inventor had placed the patented process into public use more than
1 year before the patent application was filed.
b. “On Sale” Pfaff v. Wells Electronics
o Π filed a patent application for a computer chip socket. Π showed a
sketch to Texas Instruments. TI agreed to buy 30,000 units of the new
device.
o The Court held that the sale triggered the 1 year period even though
the chips had not been produced as of yet.
o Π perhaps could have sold the patent or a license to TI without
triggering the 1 year limitation, but here sale focused on actual
product, so he’s screwed.
III.
Patent Specification- for both, only look at what inventor knew at the time of the
application
a. Enablingi. a patent is enabling when the disclosures made in the patent application
are sufficient to allow a person skilled in the art to make and use the
claimed invention.
ii. This requirement is designed to ensure that the subject matter of the
claimed invention is generally in the possession of the public and ready to
be reproduced following the expiration of the patent period.
iii. Test:
1. Define the scope of the claimed invention
2. Look to the disclosures made in the patent to ascertain whether,
given that level of disclosure, a person skilled in the art could
successfully reproduce the claimed invention in its entire scope
b. Best Mode- requires patent applicant to disclose the best way contemplated by
the inventor of carrying out the invention (i.e. making). But, if a better way
comes along during the patent period, the inventor has not duty to update his
patent registration.
 Christianson v. Colt Industries
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o Π challenged the validity of Δ’s patents on various rifle components. Π
says Δ didn’t disclose the Best Mode of using those inventions to make
the parts interchangeable with an M-16.
o Colt is able to hold back some important information here because Colt
artfully set out its patent claim with regard to interchangeability to some
rifles and it never claimed to be replacement parts to the M-16
specifically.
Patent Ownership
I.
Joint Ownership- priority or co-ownership of patents.
a. A joint invention is the product of a collaboration b/t two or more persons
working together to solve the problem addressed.
i. Each co-inventor has an equal interest in revenue from the invention.
They don’t qualitatively/quantitatively assess the actual contribution.
Each has rights to make use and license the invention.
ii. In a lawsuit, all co-inventors must consent to file suit.
b. 3 Part Test- When an invention is made by two or more persons jointly, they
shall apply for patents jointly and each make the required oath, excepts as
otherwise provided in this title. Inventors may apply for a patent jointly even
though
i. They did not physically work together or at the same time
ii. Each did not make the same type or amount of contribution
iii. Each did not make a contribution to the subject matter of every claim
of the patent
c. Collaboration- to be considered joint inventors, there must be some element of
joint behavior/ collaboration or connection.
d. Material Contribution- If there is any material contribution to the invention, they
are entitled to be listed as a co-inventor. The amount of contribution does not
have to be equal between the co-inventors.
i. What’s considered a material contribution? Can be worked out by
inventors, but if lawsuit, question of fact
ii. Disclosure of co-inventors filing patent- Inventorship requirement to
disclose and name all inventors on the patent.
1. Good faith - inadvertent or negligent omissions can be corrected.
2. Bad faith - however, attempts to deceive who invented the patent
would result in the patent’s invalidation.
iii. NOTE: If inventors have already conceptualized invention to the point
that a person of ordinary skill in the profession could reduce it to practice,
help reducing it to practice does not qualify somebody as a co-inventor.
Not a material contribution.
 Kimberly Clark Corp. v. Procter and Gamble
o Proctor and Gamble and Kimberly Clark both have ideas for leak proof
diapers with elasticized flaps. Kimberly Clark’s patent was issued in 1987
and based on work from 1982. P&G’s was issued in September of 1987
and was based on idea of Michael Lawson from 1985. District court gave
priority to Kimberly Clark. PG argues that two other inventors worked on
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idea in 1979 and 1982 and therefore Lawson’s patent qualified as joint
invention and should be given priority. BUT, Lawson didn’t know about
other inventors work
o Court ruled that joint invention required some collaboration b/w joint
inventors
 Burroughs Welcome v. Barr Laboratories
o This case deals with developing treatments for HIV virus. Inventors filed
patent application in GB for using AZT to treat Aids. Then, government
scientists helped test effectiveness, results showed effectiveness against
HIV as well as AIDS. Inventors filed 6 patents in US, 5 to treat aids, 1 to
treat HIV. Government scientists were not listed as co-inventors.
o Issue: Were government scientists co-inventors (i.e. did they make
material contribution) and so failure to include them invalidates patent, or
had other inventors already conceptualized patents to the point that a
person of ordinary skill in profession could reduce it to practice. Clearly
had conceptualized with respect to AIDS treatment, remanded to
determine whether they had conceptualized HIV treatment
o NOTE: Barr Laboratories erroneously argued that Burroughs needed
reasonable scientific evidence that drug treatments would work b/c of
unpredictability of field, but Court says only need to have it
conceptualized
Patent Infringement
I.
During the patent term, the holder of a design or utility patent has the right to exclude
others from making, using, selling, or offering to sell the invention throughout the
US, and from importing the invention into this country
i. Where the invention is a process, each of these exclusive rights extends to
products produced by the process
II.
§ 112 of Patent Act - Specification - required to describe the market and process of
making and using the invention so that any person skilled in the art can utilize it
III.
Literal Infringement
a. An accused product or process must embody every limitation in the claims
alleged to have an infringement
b. Invasion on the patent owner’s exclusive right to exclude others from making,
using, selling, offering to sell, and importing the invention.
c. Useful guide- whether persons reasonably skilled in the art would have known of
the interchangeability of an ingredient not contained in the patent with one that
was?
IV.
Equivalence i. Doctrine that prevents non-patent holder from avoiding patent
infringement by making a relatively obvious substitution in ingredient or
material of an invention or step of a process
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ii. Test is whether persons reasonably skilled in the art would have known of
the interchangeability of an ingredient (material or step) not contained in
the patent with one that was?
iii. Don’t want to reward creative drafting, a good patent application will try
to protect any possible use; must actually use it
V.
VI.
VII.
Reverse doctrine of equivalents i. if not doing the same thing in the same way, but appear on the surface of
the literal claim; court will try to look at form over substance
ii. However, slight change that does not fall within the literal language of
patent but is still the same in substance, can be ruled equivalent and
infringing
Pioneer Patent - pioneer patent expand the doctrine of equivalence
i. Policy is that when someone comes up with revolutionary change, there
will always be substitutes for some products, i.e., substituting NutraSweet
for Splenda
ii. Going to give patent holder broader rights b/c they have come up with
something so unique
Two Step Analysis for determining patent infringement (from Autogiro Co. v. US)
i. Determine the meaning of the claims in issue by a study of all relevant
patent documents
1. Compare the accused subject matter with the claims
2. Claims define the scope of the invention and create the boundaries
that other inventors may not cross. Infringements refer first to the
specific language of the patent claims.
3. Look at patent application of alleged infringer
 Marksman case - established rule that issue of interpreting scope of
patent claim is issue of law for the court and not an issue of fact for
a jury
ii. Read the claims on the accused structures
1. If the structures do the same work in substantially the same way
and accomplish substantially the same result, constitutes
infringement (I guess structures are material part of patent???)
2. Doesn’t just matter that they read literally on the structures (this is
Reverse Doctrine of Equivalency)
3. Infringing activities- was the patent holder’s exclusive right to the
patent violated by the defendant’s actions?
VIII. Other types of Infringement
i. Active Inducement or Infringement – actions that may cause, urge,
encourage, or aid another to infringe on a patent.
 Met-coil v. Korners
o
produce nonprocess and have no other use. P sued D for inducing
infringement of its patent. D argues that P, by selling the
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machines, granted its buyers an implied license to use the
patented method. Because Machine had no non-infringing
use (i.e., was only good for producing non-patented parts
that were used in patented process) and b/c circumstances
ii. Contributory Infringement – selling a component that has no other noninfringing use (that will be incorporated into a patented object)
IX.
Defenses- the assumption of validity of a patent can be overcome
i. Patent Invalidity- attacking the validity of a patent. Rationale for
allowing courts to review patents - Patents can make their way through
PTO and have fundamental flaws because the process is ex parte – no
competitors there to challenge it. (Meyers - on average, 33% of patents
challenged are invalidated).
1. Does patent fail to satisfy any of the requirements of patentability?
Novelty, non-obviousness, or usefulness (on its face).
2. On sale bar - Was invention offered for sale before 1 year prior to
the invention?
3. Fails best mode standard
4. Fails enablement requirement – disclosing how to carry out the
invention
5. Inventors not disclosed.
6. Patent owner has a presumption of validity; so burden on
challenger
ii. Inequitable conduct1. fraudulent concealment;
2. applicant has a duty to be forthcoming in disclose everything
material to PTO.
iii. Prosecution History Estoppel (also called File Wrapping)
1. When patent is rejected application and inventor narrows
application in order to receive patent, inventor is estopped from
claiming equivalence on some of the broader subject matter that
was cut out by the narrowing.
a. Often reason it is narrowed is that broader subject matter is
part of prior art. If it is, infringement claim based on
equivalence will be unsuccessful
2. Flexible rule as to what is barred. Have to look at reason
application was narrowed. Would patent have been rejected if
applicant had tried to include equivalents at issue?
3. Times when estoppel not applied
a. If the amendment is used only to add more description.
b. If the equivalent may have been unforeseeable at the time
of application;
c. Patentee could not reasonably be expected to have
described the insubstantial substitute in question.
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4. Policy behind PHE is that competitors should be able to rely on
fact that some rejected parts of patents application are invalid.
Often in tension with the equivalence rule.
iv. Laches or Estoppel- patent owner knew they were infringing, but sat on it
and didn’t enforce their rights.
v. Misuse- patent owner trying to bundle patent w/ other unpatented objects.
Alters free competition in the marketplace. Don’t want to broaden the
scope of the patent to the extent that a monopoly is created.
1. Done by Tie-ins, preventing competition through package deals
(think Microsoft and Office/Windows package), or Tie-outs,
preventing competition by excluding competitors’ products by
license use
2. [Court looks at market power:
a. Misuse – prevents patent holders in engaging in
overreaching in contractual/ licensing agreements.
i. anti-competitive conduct:
ii. attempts to fix the price
b. The more market power it has, the more concerned the
courts will be w/ the conduct of the patent holders.
 In re Recombinant DNA Technology Patent and Contract
Litigation
o Eli Lily argues Π Genen-tech misused its patent which
prohibits Π from enforcing its patents. Genen-tech
included provision in license agreement where licensee
would forfeit rights if they sold products that were not
produced by Genen-tech (tie-out provision). 1988 patent
Misuse Reform Act makes tying arrangements illegal only
if patent holder has market power, so case was remanded to
determine if Genen has market power
vi. Implied License- see [Met-Coil] above
1. Two Part test to determine if implied license
a. Equipment involved must have no non-infringing uses.
b. Circumstances of the sale must plainly indicate that t he
grant of a license should be inferred.
2. If patent owner wants to limit license, do so at time of sale.
Generally if you purchase a product you have the right to resell it,
export it, etc. even if it may have an effect of increasing
competition with the patent holder.
3. Shop Right Defense- see above
X.
Remedies
i. 35 U.S.C. § 284
1. Upon finding for the claimant the court shall award the claimant
damages adequate to compensate for the infringement, but in no
event less than a reasonable royalty for the use made of the
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invention by the infringer, together with interest and costs as fixed
by the court.
ii. Injunctive relief- stop the infringing action
iii. Monetary Damages- if you prove patent infringement, courts must award
“damages adequate to compensate for the infringement”
2. Types of Monetary Damages
a. Lost profits
b. Reasonable royalties
c. Increased damages- willful/bad faith damages
d. Attorney’s fees and costs
e. Pre-judgment interest
3. Patent prosecution is one of biggest areas for malpractice: tough
deadlines and no chance for correcting screw-ups (huge costs and
reliance to corporations).
4. Distinction that patent litigation doesn’t require taking the patent
bar. Drafting patent applications does require taking it.
Copyrights
Introduction
I.
Protects a broad range of creative expression/works. Some state law, but mostly
(today) preempted by the Federal Copyright Act.
II.
History/ Background of Copyright Protection
a. Originated in England in response to development of the printing press.
b. Constitutional origin – Intellectual property clause - Article I, § 8, clause 8, grants
Congress power “to promote the progress of science and useful arts, by securing
for limited times to authors and inventors…”
c. 1790 Copyright Act (14 years + renewal of 14 years) – first federal statute on
copyright – protected only a limited number of works like books, charts, and
maps. They later added designs, prints, photographs, musical compositions, etc.
Extended to protect foreign works in 1891.
i. Terms:
1. 14 years plus a 14 year renewable term
2. 28 + 14
3. 28 + 28
d. Copyright Act of 1909 – governed by first copyrights issued in 1923 – instead of
specific examples, it used a broad definition of “all the writings of an author.”
i. term – 75 years
ii. 1912 – added motion pictures
iii. 1971 – added sound recordings
e. Copyright Act of 1976 (current, but amended greatly) –
i. term – life of author + 50 years.
ii. 1998 Sonny Bono Copyright Term Extension Act – added 20 years to all
copyright terms. 1909 copyrights last for 95, and under 1976 it would be
life + 70 years.
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f. Reduction in formalities over time as well.
g. Increasing internationalization of copyright protection today.
h. Trend that Copyright industries play large role in economics –
i. C represent 12% of GNP (1.25 trillion dollars)
Subject Matter of Copyright
I.
Intro
 Burrow-Giles v. Sarony (1884) –
o D was producing thousand of duplicates of P’s picture. P charged D with
violating his copyright. Trial court found for P. P had elaborately created the
photo through selecting the costume arrangements, draperies, etc. Court held that
the photo was a product of the P’s creative work / intellectual invention and can
be protected.
o still litigation today over whether photos are protected
o Copyrights do not prevent others from trying to reproduce the same setting and
take their own photograph.
II.
Fixation Requirement
a. Copyrighted material must be “fixed in tangible medium of expression” (some
type of permanent form)
III.
formats in
which copyright works might exist.
a. Originality: The minimum requirement
i. Requirements:
1. Originality – author must be source of the work
2. Creativity – low threshold (not great artistic/creative judgment) as
long as some creativity
a. Does not require novelty.
b. e.g., 2 poets can draft identical poems and each is original
and both are copyrightable.
ii. Facts are not original, and not copyrightable.
1. Exception: the selection, coordination, or arrangement of the facts,
with enough creativity, may qualify for copyright, but still can’t
copyright underlying facts
iii. “Sweat of the Brow” Doctrine –
1. idea that effort going into factual compilations should be rewarded
2. not recognized under US copyright law b/c purpose is to advance
public good, not reward “authors”
3. doctrine essentially allows copyright of facts and ideas
 Feist v. Rural (1991 USSC) – Feist used, w/out consent, Rural’s directory
info of address listings/ phone numbers to create its own phone directory.
Court held that the alphabetical listing by Rural was not original and
therefore not copyrightable.
 West v. Mead (Lexis) –
 D was planning to use a pagination feature which would enable
Lexis users to determine the West page number to corresponding
39
b.
c.
d.
e.
opinion viewed w/ Lexis. West groups and arranges the cases into
reporters and volumes. The court holds that the case arrangements
West produces through this process is the result of considerable
labor, talent, and judgment, and are original works of authorship.
 Inconsistent w/ Feist because there is nothing original in
numbering 1-900.
Distinguishing Expression from Ideas and Facts
Originality in Derivative Works
Originality in Specialized Subject Matter
i. Computer Software
ii. Useful Articles
Subject Matter Excluded Due to Origin
Ownership, Assignment, and Licensing of Copyrights
I.
Initial Ownership
a. Joint Works
i. Work prepared by two or more authors with the intention that their
contributions be merged into inseparable or interdependent parts of a
unitary whole.
ii. Joint authors have an equal, undivided in the interest in the copyright.
iii. For a joint work to exist:
1. all joint authors must make copyrightable contributions AND
2. Both must intend for it to be a joint work.
3. There seems to be a presumption against joint authors because
there would be an extension of the copyright length.
iv. default rule in the absence of any agreement to the contrary is if there is
joint authorship, measure time from death of last living author
 Childress v. Taylor
o Taylor talked Childress into writing a play about Jackie Mabley so that
Taylor could star as Mabley in a play. When Taylor wanted to make
revisions to the play, Childress sued for copyright infringement.
Taylor had made numerous research contributions to Childress’ efforts
to write the play. There was no contract stipulating as to ownership
rights.
o The Court held that Childress did not have the intent to have a coauthor, and it appears that Taylor really didn’t intend to be a co-author.
She wanted to contribute to the play writing because she was wanted
to play the part of Mabley.
o Copyright rights can be assigned through contract agreements, and
here, that’s what ole Taylor should have done
b. Works Made for hire
i.
scope of his or her employment
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ii. Generally, the author or artist holds the copyright, but when it is work
made for hire, employer owns copyright
iii. Considerations in Work Made For Hire claims.
1. In order to determine if person is employee or independent
contractor, look at common law agency rules
2. Ask Meyers if we need to know factors?
3. Also, certain commissioned works are works for hire if there is an
express agreement.
 Community for Creative Nonviolence v. Reid
o Here, there is a question as to whether the artist was hired for the
purposes of making the sculpture.
o Court held Reid is independent and since a sculpture is not one of the
special categories under § 101(2), Reid is the owner of the copyright
iv. How long does a corporate entity last if they own the copyright
1. Copyright Act has a duration provision for works for hire:
a. 120 years from creation or
b. 95 years from publication, which ever expires first
c. Notice
i. © does not actually have to appear for a work to be protected, but this was
not always the case.
ii. Under 1909, if you published a work without the copyright notice, the
work was forfeited and the work fell into the public domain. This still
applies for works published under the 1909 act.
iii. Under 1976, you could cure failures of lack of copyright notice.
iv. Berne Convention Amendments is the current law, enacted on 3/1/89.
1. Before, International people didn’t require the formal
requirements, so they would lose in the US
2. Now, © is no longer a mandatory aspect
3. It is still important, though, to
a. Prerequisite to filing suit
b. Affects remedies available
c. Protects against the defense of inadvertent infringement.
v. Federal copyright now attaches when it is fixed in a tangible form or
medium
II.

Duration
Eldred v. Ashcroft
o Π makes two claims.
 Congress exceeded the scope of its copyright powers by extending the
length of copyrights.
 The extension is a facial violation of the 1st amendment.
o Π’s claim against Congress’ power:
 Π claims “limited” in the Const. means that extensions are
unconstitutional.
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
Court defines “limited” as occupying a limited space in time, so
extensions are not bad.
 Also, Congress has regularly extended the duration of a
copyright since the founding
Exclusive Rights
I.
The § 106 Rights
a. Reproduction
 Horgan v. MacMillan, Inc.
o Issue: Does the still reproductions of the play infringe on the
copyrighted choreography of a play
o Possibly, but would need to be enough pictures to visualize
choreography
 Walt Disney Productions v. Filmation Associates
o Disney claims that Filmation copied cartoon figures from Disney’s
animated film Pinocchio and has begun to use them in producing a
it’s not fixed/permanent, and therefore is not an actionable copy.
o Court says it doesn’t have to be permanent in that sense, only has
to be fixed in tangible medium of expression so that it can be
perceived
b. Preparation of Derivative Works
i. Derivative work is a work based on one or more preexisting copyrighted
work. Examples:
1. translation
2. musical arrangement,
3. dramatization,
4. fictionalization,
5. motion picture version, sound recording,
6. art reproduction,
7. abridgment,
8. condensation,
9. or any other form in which a work may be recast, transformed, or
adapted
 Midway Mfg. V. Artic International
o Midway creates circuit boards that can be inserted into video game
machines to speed up play. Speeded up games are in demand b/c
they are more challenging. As owner of original copyright, Artic
should have right to monopolize faster circuit boards if it is a
derivative work. Court classified it as derivative work, partly b/c
some of the code was based on code from video game machine,

Lewis Galoob Toys, Inc. v. Nintendo of America
o Lewis Galoob made Game genies. Nintendo sued, claiming it was
derivative work under same theory as midway. Court distinguished
b/c genie didn’t incorporate software or replace chip of Nintendo.
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Analogized to a spell checker not being a derivative work of a
word processor.
c. Public Distribution
- Religious Technology Center v. Netcom Internet (Scientology case)
o Guy put up website against scientology. Website had writings that
belonged to scientology. Scientology sued internet provider. Court
said could not sue internet provider b/c they were only acting as
conduit.
o Analogy to person who faxes copyrighted materially illegally; phone
company not liable, person who sends it is
i. Now, there is statute that prevents IP’s from being held liable for
copyright infringement of website
d. Public Performance and Public Display
i. A performance is “public” if it takes place “at a place open to the public or
at any place where a substantial number of persons outside of a normal
circle of a family and its social acquaintances is gathered.”
ii. One of principle purposes of this definition is to make clear that
performances in “semipublic” places such as clubs, lodges, factories,
summer camps, and schools are “public performances” subject to
copyright control.
o Columbia Pictures Industries, Inc., v. Redd Horne, Inc.


people can fit in each one, they are likely only to be filled with
family and close acquaintances.
Court said it was not distinguishable from any other public
iii. The definition also makes clear that the concepts of public performance
and public display include not only performances and displays that occur
initially in a public place, but also acts that transmit or otherwise
communicate a performance or display of the work to the public by means
of any device or process.
iv. The definition of “transmit” - to communicate a performance or display
“by any device or process whereby images or sound are received beyond
the place from which they are sent” - is broad enough to include all
conceivable forms and combinations of wires and wireless
communications media.
o On Command Video Corporation v. Columbia Pictures Industries
 On Command has hotel video-movie viewing system where
hotel occupant can order movie from his room. All movies are
in central place. When ordered, a machine places video in
player and transmits to room. While being played, only one
room can view it.
 Court ruled that b/c it was transmitted beyond the place from
which they are sent, it was violation of copyright.
e. The Scope of Exclusive Rights in Sound Recordings
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i. venue where live music is heard; bar or restaurant or shopping center
1. each of those activities is a public performance of copyrighted
music
2. each place is open to the public
ii. having cd doesn’t give right to distribution; first sale doctrine doesn’t
apply
1. for each of these places, better have a license or exemption
iii. Congress enacted § 110(5)
1. Communication of a transmission embodying a performance or
display of the work by a public perception of the public on a single
receiving apparatus of a kind commonly used in the home; … ???
(radio or TV broadcast)
2. BMI, ASCAP, & SESAT
a. These are non-profit organizations that go around and
enforce copyrights in public places such as restaurants
b. Also give non-exclusive license to broadcast their songs.
iv. What about bands that play live music?
1. Don’t have right to cover songs unless you get a license
2. Bars are often responsible for making sure have protection
II.
Specific Limitations of § 106 Rights
a. First Sale Rule
b. § 110 Limitations
c. § 117 Copying Computer Software
d. § 108 Library and Archival Copying
e. § 115 Compulsory Licensing of Musical Compositions for Reproduction on
Phonorecords
III.
Moral Rights
a. Moral v. economic rights
i.
ii. traditionally, U.S. hasn’t recognized moral rights and moral rights weren’t
historically important part of development
iii. Now, b/c of other countries’ recognition of them and treaty obligations,
they’re becoming more important
b. Right of Attribution
i. Right of author to be recognized by name as the author of his work or to
publish anonymously or pseudo-anonymously
ii. Right to prevent the author’s work from being attributed to someone else,
and
iii. Right to prevent the use of the author’s name on works created by others,
including distorted editions of the author’s original work
c. Right of Integrity
i. Right to prevent any deforming or mutilating changes to his work, even
after title of work has been transferred
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ii. In some jurisdictions, right of integrity also protects artwork from
destruction
d. Visual Artists Rights Act of 1990 (VARA)
i. Limitations
1. Doesn’t apply to works for hire
2. Has to apply to visual art
a. Paintings, sculptures, drawings, photographs, so long as
they are in limited edition
b. Movies, music, books, architectural works, computer
programs, etc. are NOT Included
3. Only life of the author, not life plus 70; only worried about the
moral rights of actual author
4. Must be work of some recognized stature
a. Probably proved by expert testimony
e. Berne Convention’s protection
i. “Independently of the author’s economic rights, and even after the transfer
of the said rights, the author shall have the right to claim authorship of the
work and to object to any distortion, mutilation or other modification of,
or other derogatory action in relation to the said work, which would be
prejudicial to his honor or reputation”
ii. B/c in Treaty, must recognize in U.S. Law
iii. US only recognizes visual rights, but Berne doesn’t limit that, so VARA
by itself doesn’t satisfy treaty
1. US response is that § 43 of Lanham act (unfair competition) and
various state laws provides same rights to anyone;
iv. But notice that Berne doesn’t actually cover destruction
o Carter v. Steele Helmsey-Spear
 Artist tried to prevent destruction of his sculpture, but court
found it was a work for hire, and therefore VARA didn’t apply.
Fair Use § 107
I.
II.
III.
Defenses of copyright
1. Work is not copyrightable (must be registered)
2. Independent creation
3. Both works copied from a common source
4. An express or implied license
5. Fair use
Limitation on § 106 (economic rights) and § 106(A) (moral rights)
Fair use of a copyright, including reproducing for following reasons, is not
infringement (however, it’s not automatic)
i. Criticism
ii. Comment
iii. News reporting
iv. Teaching (including multiple copies for classroom use)
v. Scholarship
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vi. Research
IV.
In determining whether the use made of a work in any particular case is a fair use the
following factors shall be considered (THIS IS HEART OF DEFENSE)
i. The purpose and character of the use, including whether such use is of
a commercial nature or is for nonprofit educational purposes;
ii. The nature of the copyrighted work
iii. The amount of substantiality of the portion used in relation to the
copyrighted work as a whole;
iv. The effect of the use upon the potential market for or value of the
copyrighted work. The fact that a work is unpublished shall not itself
bar a finding of fair use if such finding is made upon consideration of
all the above factors (just one of the things considered)
(REMEMBER FOR EXAM)
V.
VI.
The 1976 House Report lists examples, “ by no means exhaustive,” of the sort of
activities the courts might regard as fair use under the circumstances:
i. “Quotation of excerpts in a review or criticism for purposes of illustration
or comment;
ii. quotation of short passages in a scholarly or technical work, for illustration
or clarification of the author’s observations;
iii. use in a parody of some of the content of the work parodied;
iv. summary of an address or article, with brief quotations, in a news report;
v. reproduction by a library of a portion of a work to replace part of a
damaged copy;
vi. reproduction by a teacher or student of a small part of a work to illustrate a
lesson;
vii. reproduction of a work in legislative or judicial proceedings or reports;
viii. incidental and fortuitous reproduction, in a newsreel or broadcast, or a
work located in the scene of an event being reported
IF something can be a good substitute for the original work, it will not likely be fair
use.
 Sony v. Universal
o Universal and Disney brought action against Sony for manufacture of
home videotape recorders (Betamax VTRs). There were legitimate uses
of the VTR’s so court ruled in favor of Sony. Court essentially says
Sony is not going to be on the hook because some people might use it
to infringe on copyrights (had substantial non-infringing uses)
 Harper Row v. Nation Enterprises (Ford Memoir Case)
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VII.
o Harper Row had exclusive right to publish Ford’s memoirs, which
included why he pardoned Nixon. Time magazine reached license
agreement for exclusive prepublication or review. A few weeks before
time articles came out, somebody secretly brought book to editor for
National Magazine. National was in hurry to beat Time, so Editor didn’t
add any commentary. After being scooped, Time refused to pay. HR sued
for copyright infringement & Nation enterprises claimed fair use.
o Factors
 Character and substance of the use
 News reporting, but magazine went beyond mere reporting
and tried to gain revenue by publishing juicy parts from
book
 Nature of copyrighted work
 didn’t stop at isolated phrases, but instead excerpted
passages
 Fact that a word is unpublished is important, and makes fair
use doctrine more limited
 Amount and substantiality used
 Stripped to direct quotes, infringed quotes took up 13% of
article;
 court found that they had gutted book
 Effect of loss of license fees from Times
NOTE: the fact that fair use is in market copyright owner is not going to take
VIII.
wasn’t going to market to commercials.
SUNTRUST BANK pg 1087
IX. Pg. 1114 – examples of possible exam questions
X.
Thumbnail can be fair use
XI.
§110
1. Showing a movie in class is okay
2. Teach act – show a movie in distance education
3. Allows songs to be sung or heard in religious settings
4. Limited non-profit fundraiser
5. Getting radio or TV broadcast in business that’s open to the public
6. State agricultural fair
7. Play music in music store
8. People with handicaps
9. Handicap accommodations
10. Veteran’s and non-profit organizations (no frats)
11. Editing R rated movie for TV
Infringement, Defenses, Remedies
I.
Injunctions
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II.
III.
IV.
Actual damages and profits
Statutory damages and attorney’s fees
a. It’s difficult to prove the amount of harm so you can argue for statutory damages
b. A range of amounts that are possibly higher than your actual damages will be
Impounding, importation relief, prejudgment interest, and costs
48