IP - Ghosh – 2009
Ghosh7@wisc.edu - Rm. 8111
1) 4 Areas:
a) Trade Secret, Copyright, Patent, Trademark
2) Trade Secrets
a) Most states adopted UTSA (Uniform Trade Secret Act)
i) Means information including a formula, pattern, compilation, phonogram… that (i) derives independent
economic value, actual or potential from not being generally know to, and not being readily ascertainable
by proper means by other persons who can obtain economic value from its disclosure or use, and (ii) is
subject of efforts that are reasonable under the circumstances to maintain its secrecy
b) Many Courts still rely on Rest. Of Torts (1939) § 1939
3) Notes:
a) Copyright & Patent – both federal law, both constitutional
b) Writing assignment – due October 12th – handed out next wk. or week after
i) Covers trade secret and 1st part of copyright material – basically like a memo
ii) Can re-write it – due in November
4) Foundation
a) IP is about protecting stuff – from what? From other people making money off of it
b) What’s the purpose of this law? You’re protecting people, but there’s also public benefit
c) What can be protected (subject matter)? What is IT?
d) How can it be protected?
i) What are the mechanics of protecting it?
e) How can it be enforced?
i) Litigation? Contracts (licensing) ?
f) Why are these categories separate? Why trademark and copyright?
i) Creating and marketing things are different
I.
TRADE SECRETS
g) Learning Curve Toys v. Playwood Inc. – 2003
i) Playwood obtained jury verdict against learning curve
ii) Learning curve entered into talk to make track for Playwood,
iii) Playwood stole the design, but perfected it
iv) Learning curve got a patent on
v) I: Trade secret under UTSA?
vi) H: Yes, jury awards a license to Playwood because of misappropriation of trade secret
vii) R: Learning curve was the first to develop this type of track; playwood’s design not generally known w/in
the industry; playwood had tried to keep the design secret – entered into a confidentiality agreement w/
learning curve; the design was very valuable;
viii) Notes:
(1) What first comes to mind?
(a) Clickety-Clack Track – talking about trademarks b/c of the identical name
(b) The problem is that Playwood never used that name and probably don’t have any rights in that
(c) The real concern is that the track is what’s valuable
(2) This identification is an important process in IP
(3) Playwood couldn’t sue because they didn’t have a patent
(a) Could’ve tried to invalidate the patent, however – but that’s the only remedy they would get – not
a very good remedy
(b) Also might’ve been able to get their own patent, but patent law doesn’t get the $$
(c) So, they go trade secret
(4) Copyright doesn’t protect this sort of work
(a) Normally protects entertainment work
(b) This is a functional, utilitarian type of work – this is a way to make a sound on a track – it’s a way
to make the sound, not the sound itself. Can’t copyright functional stuff
h) ITSA def. of trade secret:
i)
i)
Is sufficiently secret to derive economic value; actual or potential, from to generally known to other
persons who can obtain economic value from its disclosure; and
ii) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or
confidentiality
iii) Misappropriation
(1) Disclosure or use of a trade secret of a person without express or implied consent by another person
who:
(a) At the time of disclosure knew or had reason to know that knowledge of the trade secret was:
(i) Derived from or through a person who utilized improper means to acquire it
(ii) Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use
(iii) Derived from or through a person who owed a duty to the person seeking relief to maintain
its secrecy or limits its use
Mangren v. Nat’l Chem. Co. Inc.
i) Mangren developed mold release agents based on PTFE
ii) Took efforts to keep their formula a secret – code words
iii) Fmr. Employees took the recipe and developed similar solutions
iv) Mangren sued
v) I: Trade secret even though slightly modified recipe?
vi) H: Yes, trade secret, damages to Mangren
vii) R: Mangren tried to keep it a secret, had significant economic value; information not generally known in
the industry
viii) Also misappropriation b/c the
ix) For misappropriation there has to be improper means
(1) E.g. former employee
(2) Business negotiations
(3) An attorney who gave away some secrets
9/4/09
Notes: Tough to grapple with the 4 boxes of IP – TS, copyright, trademark, patent. In the Learning Curve case, there
are other possible issues lurking – could’ve argued patent, but wouldn’t have been effective
- Bratz dolls – protected under copyright law as a sculpture –
- Interesting questions as to whether the track itself can be copyrighted – it’s the process in which the track
makes noise
- Same distinction between the piano and the music the piano creates – instrument vs. the expressive uses of
that instrument.. This is the process in which the track makes noise
- Can we copyright the noise the track makes ? Well, it has to meet the threshold of originality. Even the noise
itself could have protection if it meets the threshold.
- Back to our original point: it’s the process we’re talking about and they can’t be copyright protected, but can
be patent-protected.
- Discussion about Harley Davidson – can we copyright / trademark the sound. Point being that these things
don’t fit into nice little categories as in our book.
- How do we know the sound is protected as a trade secret? What are the factors?
o Multiple sources of law
o UTSA – adopted on a state by state basis. Trade secrets are state law. Until ’96, was exclusively state
law.
 It’s a statute – meaning a legislature has to consider it.
 46 states have adopted it – some have a mish-mosh
 What about the remaining states?
- In other states they just have common law
o Allows for more wiggle room vs. a statutory codification
o MA, NY, TX, NC, NJ – have common law
o NJ – is a bit of a mish-mash
o The big IP jurisdictions stick to the common law
o But CA, IL, WI, etc. have statutory
- How do you know if something’s a trade secret under the UTSA?
o If it has value from being secret and if someone is trying to protect that value by keeping it secret
o What about bending your thumb back?
 Not a trade secret because not commercializable
- There has to be value in the information’s secrecy
- Very broad notion – at its core TS’s are anything you can do but someone else can’t
- Say you’re in glass working, tanning, etc. – TS has its roots in the guild system
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Do doctors have trade secrets? Well, they have knowledge that other people don’t have
He then quotes the definition of UTSA and notes that it’s very broad
o Phonograms – this could also be copyrighted.
o Trade secrets and copyrights and trade secrets and patents have a lot of overlap
Has to have independent economic value from not being generally known
He then moves onto the secrecy issue – what matters is: is the TS something someone else can’t figure out
Notice the judge in this case vacated
Why didn’t he think the track was a trade secret?
o It’s so simple to duplicate
o As soon as someone buys it, it’s no longer a secret
As an example – there are a lot of patents on keychains
Note the language: “not readily ascertainable by proper means …”
Packaging is a big thing now – black boxes covering up products in stores
What might the judge have missed?
o Trade secret before the track was marketed vs.
o Trade secret law getting at something more industry-specific
o Secrets vs. trade secrets
The appellate court looks at the common law factors to supplement
What if you had a recording device under the train? Or an intern under the train? Those aren’t trade secrets
because they’re readily ascertainable
What about this isn’t as simple as it seems?
It took 18 months to duplicate – there’s serious craftsmanship in crafting the grooves so the train runs
He emphasizes that the nature of the information can’t be something that people already know or something
that’s clear on its surface
o Also it’s not whether the public knows how it works – it’s thinking about trade secrets within the
confines of the particular industry or field. Whether a person in the trade would know
o There’s definitely an analysis you need to go through to identify: what it is, and whether or not it is
generally known
o Also, you have to maintain the secrecy
Historically, you don’t see much trade secret law applying to products because it’s generally easy to figure out
how most products work
However, you can patent products because with patents, you disclose how things work
How do you keep things secret?
o Keep the pool of people who know the information very small (e.g. Coke)
o The standard is that you have to take reasonable steps to keep things secret
o Reasonableness based off of cost/benefit and std. practices in the field
o Also how you tell the secret is important
Discussion of NDA’s – Non-disclosure agreements
There is a natural notion that trade secrets exist
How do you enforce trade secrets?
o For starters, we’re talking about litigation
Ghosh says the value of IP is not in suing each other
The idea is that somebody’s created something that society has deemed valuable. The goal is that the creator
will disseminate the knowledge and use it to make something
In the context of trade secret enforcement, we think of misappropriation
o Some examples in the playwood case
How do we understand misappropriation more broadly?
Mangren v. Corp.
- In Mangren, we have the definition
- Facts: Mangren developed mold release agent; it kept the chemicals it used secret. Chemicals were only
known to Mangren employees, codenames for each chemical were used.
- Two employees were terminated, worked for other companies and sold a substantially similar compound.
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I: Misappropiation under UTSA?
H: Yes.
Reasoning: Trade Secret because: (1) it was a list of customers and a process; (2) it was sufficiently secret
from not generally being known; (3) Mangren took reasonable efforts to protect its secrecy;
o Specifically, Mangren had its employees sign NDA’s, employees were advised of the secrecy, coded
labels used
Misappropriation because:
o
o
o
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UTSA definition of Misappropriation:
Disclosure or use of a trade secret of a person without express or implied consent by another person
who:
 At the time of disclosure knew or had reason to know that the knowledge of the trade secret
was:
 I. Derived from or through a person who utilized improper means to acquire it
 Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its
use; or
 Derived from or through a person who owed a duty to the person seeking relief to
maintain its secrecy or limit its use.
D’s argued they didn’t use the trade secret b/c they used different ingredients
Court cites In re Innovative Constr. Sys. Where using it w/ modifications you’re still liable as long as
the process is derived from the trade secret
Discussion:
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For misappropriation:
o Has to be a disclosure or use of the trade secret – i.e. there has to be a trade secret
2 types of misappropriation
o You have a direct duty to the owner and you’ve disclosed or used the secret
o Or you’ve got the information from somebody who had a duty to the owner
If you came up with the secret on your own, that’s not misappropriate
o Similar to reverse engineering
o If you have lots of people who came up with the idea on their own, then they all have the trade secret.
o But at that point, is the idea not readily ascertainable? So it might not be a trade secret at all
Read through p. 54 for Wed.
9/9/09
Statues v. Common law
- Common law you have to have most of the factors
- With statutory schemes, you don’t have to have all the factors
- In terms of common law, you look at:
o Is it generally known? Is it known w/in industry or the field?
- Patents & copyrights are public – they’re meant to be federal and government policy
- To have a trade secret, you have to trace the secret back – can’t be discovered independently
DuPont v. Christopher - aerial photography, have to pay $$, trespass
- F: Defendants, airplane photographers were hired by unknown third party to take aerial photographs of new
DuPont plant. Photos were delivered. DuPont asked for the name of the 3 rd party. D’s wouldn’t comply.
- DuPont filed suit alleging trade secret violation of secret unpatented process for producing methanol they
took special precautions to safeguard
- DuPont alleged a skilled person could deduce the process from the photos, sought injunctions prohibiting
circulation of the photos
- D’s argue there must be trespass or other illegal conduct.
- I: Misappropriation?
- H: No. can’t take processes from discoverer without his permission when he’s taking reasonable precautions
to maintain its secrecy. To obtain knowledge w/o spending time & money = misappropriation.
- To require a roof over the plant would be unreasonable.
- R: Restatement of Torts : one who discloses another’s trade secret is liable if he discovered the secret by
improper means or disclosure constitutes a breach of confidence…
- Notes:
o The brothers’ photograph in and of itself is not illegal. It’s the fact that they knew what they were
taking pictures of and delivered it to the unknown third party
o This is straight up common law jurisprudence
o So why again is the photography under common law thinking?
o Also note that we’re in the bible belt, so there’s business ethics and morality
Smith v. Dravo – shipping containers, negotiations, blueprints
- Smith came up w/ steel shipping containers that could be stacked, craned off, easily hoisted, moved. WWII
prevented smith from developing the container though.
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Upon Smith’s death, representative for P entered into negotiations w/ D to sell the entire business. Sent
blueprints, patent apps, mini container, letter of inquiry about users. Negotiations broke down
D’s made a wider container based off of P’s original design.
I: misappropriation of a trade secret?
H: There was misappropriation
R: P disclosed blueprints to D for purpose of company purchase, not for use in a new design; D did not begin
to design new container until after meeting w/ P; admittedly based design off of patent apps to “avoid
infringement”
Reverse Engineering
Chicago Lock v. Fanberg – locks, reverse engineering
- F: Chicago Lock manufactured locks, sued D’s, locksmiths and publishers of trade books to stop distribution of
key codes for its locks
- Posture: lower court enjoined distribution
- Sold well because of locks’ difficulty of reproducing their keys. D put together a list of codes for the locks, sold
them in a book; didn’t know who he sold to. Locks had serials on the outside, so now much easer to crack
locks;
- I: D’s contended violation of their 1st Amend. Rights, unconstitutionally vague law, and not a trade secret
- H: Dist. Ct. wrong in concluding they acquired trade secrets via improper means.
- R: Rest. Torts says you have to discover by improper means or have to learn from a third party who
discovered by improper means.
o There’s no fiduciary duty between the locksmith and the company
o Any absolute protection of the trade secret to reverse engineering would be preempted by patent law
Civil Remedies
Winston Research Corp. v. 3M Co.
- F: 3M alleges former employees developed a similar tape recorder to one 3M already developed via use of
confidential information
- Posture: Dist. Ct. granted injunction to 3M (Mincom) for 2 years
- I: Injunction appropriate?
- H: yes, appropriate because the trade secret would’ve been publicly disclosed after about 2 years
Remedies Generally for Trade Secret Violation
- Injunctive relief
o Applicable to actual or threatened misappropriation
o Stops when trade secret ceases to exist
o In appropriate circumstances acts to halt misappropriation can be compelled by Ct. order
- Damages
o Can get actual loss and unjust enrichment or royalties
o If willful and malicious misappropriation, can get exemplary damages no more than 2x the original
damages
- Attorneys’ fees
o If misappropriation made in bad faith, OR motion to terminate injunction made in bad faith OR willful
and malicious misappropriation => attorneys fees
- Notes:
o Trade secrets don’t expire. Patents do. And the two in Coca-Cola’s case are mutually exclusive
o So you have to protect your secrets though trade secret or through patent law
o When the trade secret is taken, you can give an injunction but only for as long as it would take to
figure out the secret
o The term is based upon the time it would take to reverse the TS. It’s highly fact dependent
 Typically 2-3 years for an injunction
NBA v. Motorola
- Motorola had a handheld pager which displayed updated game info. NBA got an injunction in Dist. Ct.
Offer subscription service. Give employees tickets for games. The game would then be broadcast by
Motorola via pager or whatever.
NBA sued. Why? NBA had a competing service. Decrease ticket value. Decrease advertisement and broadcast right
value.
How? Using what legal tool?
Why not TS?
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Motorola did not steal any sort of method or thing. Motorola seems to have come up with on there own
Information (score, playing of the game) is not really protected. Not really a secret.
o Tribal dances and such are more secretive. Could be TS.
What could be copyrighted?
o Perhaps the commentary of the game.
The dissemination - however they are not doing anything with broadcast, rather they're gathering the live
information and recording what they see.
What if they took there own equipment to record?
The live performance of the game is not copyrightable.
Takeaway: how do you translate protected right to a legal strategy?
Copyrights must ask, "what's being copied?"
TS and Copyright
(The stuff that's left over: miscellaneous state law: here the tort 'misappropriation' INS v Associated Press.)
INS would get wires from Associated Press wires and publish it as there own.
Question brought to SC: Is there IP in the news itself? Risk of being in the battle, authoring news feed.
Justice Brandite (dissent): no IP in the news.
Majority: there is quasi property right in the way news is gathered. Quasi IP and quasi law. They sort of made this
law out of nowhere.
 "hot news" there is temporary property right against competitors in that news.
 Not copyright because it is not copy of something that has been recorded. Rather, it is watching and
recording.
Elements of misappropriation in “hot news” law
- Info gathered at cost.
- Info is time sensitive. (Some jurisdictions do not have this second element)
- Defendant has copied or written (free riding) off of the plaintiff's claim.
o NBA fails on this element. Motorola invested
- Defendant is in competition with plaintiff in
- Ability of free riding reduces value of what plaintiff is doing.
Trade Secret (again, state law)
- misappropriation
- right of publicity
Other tool: Right of publicity
- If someone uses name or face for commercial advertising or purposes, this gives you a right of action against
that person.
o One of first privacy torts.
o Purely state law.
Midler v. Ford Motor - does right of publicity protect your voice? Is there common law remedy?
- Ad firm hired an imitator to perform a Midler song b/c she wouldn’t do it.
- Court held that impersonating Midler’s voice was a tort and pirated her identity
- Most jurisdictions have amended statute to cover voice.
Feist Publications v. Rural Tele.
- Rural published a phone book w/ white pages
- Feist used Rural’s data and compiled them into a regional directory
- Rural sued for copyright infringement
- Ct. held there was no infringement because while compilations of facts are copyrightable, there must be a
modicum of creativity in the way those facts are ordered and there wasn’t in this case because:
o Organizing the phone directory is too commonsensical to be creative
o And it was compelled by KS law that the carriers had to do this
- How does this differ from the Motorola case?
o Feist takes all the data straightaway, whereas Motorola employed people to type up the stats?
o Motorola wasn’t capturing the copyrightable part, whereas Feist was copying the copyrightable part
o This is the taking of something recorded
o Feist could’ve brought a misappropriation claim – but it would’ve applied to stealing the data
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 B/c it’s a trade secret
Looking to copyright law
o 1. Have to have a valid copyright and 2. It must be infringed
What counts as infringement?
o Using the copyright without permission of owner in a way exclusively reserved to the owner
What was Feist copying? Facts – a compilation of data OR:…..
o A database!
o So this decision has broad impact on other databases
 Westlaw and lexis wrote amicus briefs supporting rural
o It’s not the copying of the data it’s the copying of the database!
So was there a copyright in the rural telephone case?
Look to the copyright statutes to figure out if there’s a copyright
Rural argued that it put in the legwork to get all the #’s
o A basic question of what constitutes originality
o Rural argued that “sweat of the brow” is sufficient for originality
o The court rejected this argument
o Why?
 Work in and of itself is not enough
 Originality has 2 parts:
 1) it originates from the author of the work
 2) also has to have some degree of creativity
o Why did the court say they wanted to add another requirement for compilations of data?
 They took some of the language from the Constitution
 Art. I Sec. 8 Cl. 8
 Congress has the power to promote the progress of science and useful arts, b
securing for limited times to authors and inventors the exclusive right to their
respective writings and discoveries
 Note that it doesn’t say Congress must do this, it says they can do this
 Note this isn’t the copyright act, but it’s the first hints of copyright
 There’s nothing about copyright under interstate commerce – why?
 Some works are only distributed intrastate
 Not just any old type of work – talks about specific types of work
Feist stands for dismissing sweat of the brow
The Federal Trademark Act was enacted pursuant to Art. I Sec. 8 cl. 8
o Why? Interstate commerce was construed narrowly
o And in passing this Act, Art I. s. 8 cl. 8 was meant to protect original writings
o So even back then you had to have an element of creativity
The Feist Ct. also examined the Burrow-Giles case
o Involved a photo of Oscar Wilde
o Prior to this time, courts said it was just pushing a button and getting an image
 Courts at the time (a long time ago) had said photography was a parlor trick
 Courts were saying a photo is just using a mirror to get an image
o The Burrow-Giles court held that photos were something creative
o To be creative the product has to go through some human filter – choices have to be made
Again, this isn’t creative because it’s alphabetical – an almost mechanical type of labor
17 USC § 102 Subject Matter of Copyright: in General
(a) copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible
medium of expression…
- needs to be original
- needs to be a work of authorship
- fixed in a tangible medium, now known or later developed … (so later technologies are included in the
copyright)
- Again, the work has to be recorded, so live performances aren’t copyrightable Unless they’re copyrighted
- so if you had someone that did live performance, you’d want them to record their stuff
- To be original
- Has to be originated by the author
- has to be creative
Elements of Perfect Copyright
- Used to be publication, deposit, inscription, and notice
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You don’t need to have an inscription on artwork anymore, though you have to have it on photos
No need to be published anymore
No need to have it deposited w/ the copyright register, but you have to have it deposited if you want to bring
an action for infringement
9/14/09
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Remember the taking of facts are not preempted by copyright law
EU has its own body of law that gives separate protection for databases
Art. I Sec. 8 cl. 8
- Congress has power to promote useful arts
- The Constitution says “writing”
List of things that count as works of authorship
- (1) Literary works
- (2) musical works including any accompanying words
- (3) dramtic works incl. accompanying music
- (4) pantomimes and choreographic works;
- pictorial graphic and sculptural works (includes schematics, diagrams)
- motion pictures and other audiovisual works;
- sound recordings; and
- architectural works
- apparently computer software is a literary work
- Note:
o Apparently life music not added until ’72
o Radio and other sound recordings fought to keep copyright fees low
o Architectural works added in ’92 (the actual 3D building)
 Had to do w/ international treaties (Bern convention)
- Would clothing fit under this?
o Embroidery – probably not
- Yoga postures – can they be protected under copyright?
o Ct.s aid yoga positions are sort of like compliations
o Even though they’re not in the list, apparently covered by § 103
o What about set design, i.e. bldg.’s
o Is it sculpture or architectural works?
For trademarks, you have to go through a trademark something…
No administrative review for copyright
Your #1 hurdle in copyrighting is ‘originality’
Rights of the Copyright Owner - § 106
- To reproduce the copyrighted work in copies or photorecrods;
- To prepare derivative works based upon the copyrighted work (aka the ‘adaptation right’)
o Making some sort of transformation of the work in an original way
o E.g. book-> movie out of the book or movie -> book
o If ghosh covered the Stones, put it on youtube, that would be adaptation
o Also the transformation must be original to be infringement
 E.g. black & white movies -> color – is that a derivative work?
 Unoriginal coloration would be unoriginal
 Could be a violation of the reproduction right
 You could get a reproduction right license, but make a derivative and infringe
- To distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of
ownership, or by rental, lease, or lending
o Once the work has been sold, anyone else can resell it
o Called the “first sale doctrine”
o Rentals or licenses do not give the renter or lessee the right to reproduce
o Also the first sale doctrine only gives you the right to resell it, not make multiple copies, public
performances, or derivative works
- Public performance right
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Right to perform audio recordings by digital audio transmission
To display literary, musical, musical, dramatic, choreographic works, pantomimes, pictorial, graphic,
sculptural works including individual images of a motion picture or other audiovisual work
Twentieth Century Music Corp. v. George Aiken – 1975
- Aiken ran a fast food restaurant, played a radio
- The radio station had licenses to play the songs, but Aiken did not
- I: did Aiken’s playing the songs constitute a performance of the music under the copyright act?
- If it did constitute a performance, then he would be infringing
- H: no performance, so no infringement
- R: a different relationship exists between the broadcaster and viewer than a performer and an audience
member
o A broadcaster supplies electronic signals and the viewer purchases equipment to listen to the
performance
- Also, to hold that Aiken performed would result in copyright law that would be unenforceable and inequitable
Cleanflicks of CO v. Soderbergh – 2006
- P: motion picture studios moved for partial summary judgment on copyright infringement against
“Mechanical Editing Parties”
- Cleanflicks sells and rents cleaned up versions of movies to consumers
- The defendants and counterclaimants (who all do what Cleanflicks does) all argue “fair use” under §106(1) of
the Copyright Act which says:
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Fair use applies to:
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o
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(1) purpose and character of the use including whether it’s of a commercial nature or is for nonprofit
educational purposes;
(2) nature of the copyrighted work
(3) amount and substantiality of the portion used in relation to the copyrighted work as a whole
(4) the effect of the use upon the potential market for or value of the copyrighted work
Studios argue this violates their rights to create derivative works - § 101
o A “derivative work” is based upon one or more preexisting works, such as a translation, musical
arrangement , dramatization, fictionalization, motion picture version, sound recording, art
reproduction, abridgement, condensation, or any other form which a work may be recast,
transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations or other
modifications which, as a whole, represent an original work of authorship, is a “derivative work.”
I: The issue is whether the DVD-R’s the defendants make are “transformative”
The Supreme Court said a use is transformative if it “adds something new, with a further purpose or different
character, altering the first with new expression, meaning or message.”
H: The defendants don’t add anything new, they remove scenes from these movies, so not a derivative work
There were still distribution and reproduction violations
Notes:
o Director has a very specific vision of how the movie is supposed to be
o They have their vision and the question is: should we care about this vision?
o Typical rights theory – defines the rights you have but doesn’t give the motivation for the rights can
enforce them for artistic or economic reasons
o If soderbergh had a right of integrity, alteration would affect the rights of the artist – so unoriginal
changes would violate the right of integrity
European Copyright Law
- Recognizes specific non-economic rights
- Tries to recognize inherent or special rights associated w/ authors, creative people, etc.
- Goes back to a moral rights concept
o Says there are special non-economic rights we want to recognize
o Moral rights part of copyright? Separate? In U.S. law they’re supposed to be alien
 Or neutral
- Stems back to the artistic traditions in Europe - artists had to survive through a patronage system
o Someone sponsored you – moral rights came out of this – why should artists be at the behest of
whoever’s their patron at the given time?
o Sort of recognizing the artist’s personal liberty – stems back to the French revolution
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 Declaration of rights of man and citizen – included the rights of an artist
 Therefore we should be able to protect that aspect
What rights fall under moral rights?
 Integrity
 Right artist has in maintaining integrity of work that’s being created
 If someone makes an alteration, mutilates, or destroys the work
 It’s not a property damage notion – it’s that the work is an extension of the artist
and that messing with the work is messing with the artist’s personality
 Attribution
 You have the right to have your name included – includes the right to have your
name included and the right not to have the wrong name included
 Thinking about the Copyright Act, none of the rights cover attribution, having the
name of the author attached
 What if you did want to go after someone for non-attribution?
o You could go after them for defamation – sort of the closest thing you get to
attribution outside of copyright or moral rights
 Divulgation
 Has to do with the right of divulging or revealing the right to the public
 Think: publication, distribution, covers a whole swath of things and the obvious
analogy is to the distribution right
 E.g. the publication of something you didn’t want published
o Could involve distribution, reproduction
 Suppose you’re an artist, you sell the work to someone for $100, and it’s resold for $100k
 What rights are implicated?
 Well, not distribution because of the first sale doctrine, in which once you sell, that
person can re-sell
 But what of the other rights? Usually the artist gets to keep the rights unless
expressly provided? None under U.S. law
 Divulgation covers this called droit de suite
o Can get a portion of the resale proceeds
o Does it carry over to the family?
 Should the heir benefit?
 International copyright treaties required people who signed on to recognize moral rights
 US IP law copyright law more specifically didn’t have protection for moral rights
 The battle in the 20th century is could the US sign onto the Berne convention even
though the US doesn’t seem to recognize moral rights
 If you want to move to a position where each country recognizes the copyright law
of other countries, so an EU country recognizes copyrights by American authors i.e.
non –US countries recognize movie rights, software rights, tv rights, music rights,
etc.
 U.S. made a big change in recognizing moral rights by § 106A
 VARA – doesn’t create moral rights broadly, but recognizes moral rights for
particular types of creative rights
 Covers sculptures, photo’s, graphics works, not movies, tv, music, etc.
 Also does not cover works made for hire – protects individual artists not companies,
corporations or artists. Also only lasts for the life of the artist
 The other thing the U.S. pointed to was State law – special rights in CA, NY, LA

Maurizio v. Goldsmith – 2000
- The parties met at a social event hosted by a movie production co. in the summer of 1989.
- Goldsmith started writing First Wives’ Club early chapters, Mauriziio drafted the outlines for the book,
allegedly wrote two chapters, allegedly had been promised co-authorship
- Both parties arguably worked on the outlines – there was at least an implicitly manifested intent
- There were also chapters independently written by Maurizio
- Goldsmith moved for summary judgment alleging no material issues of fact
- I: Was there a joint work?
- H: For a joint work, (1) both parties have to intend the work be joint and the (2) material each party created
has to be copyrightable
- In this case, there was enough evidence to survive summary judgment on these issues
-
Notes:
o The film copyright probably owned by the studio as work for hire
o Could there be a work for hire?
o Maurizio would have to be Goldsmith’s employee – very fact-specific
 Hire people to mow your lawn, etc. – no employees
 OR you’d have to specially order or commission the work and get it in writing
 I.e. Goldsmith contracted with Maurizio – doesn’t fit into one of the categories listed
for a work for hire
 You also have to have a writing to have a work made for hire
 Some interesting cases where there’s a check memo that says “work made for hire”
– problems arise because only a signature on one side
o What if Goldsmith got Maurizio to sign for a work for hire afterward?
 If there’s a big gap in time, courts will wonder if it was meant to be a work for hire
 If it wasn’t a work made for hire, what would the effect be? It would be some sort of a
transfer or assignment of copyright
o
Arthur Rutenberg Homes Inc v. Drew Homes, Inc.
- Chrysalis homes hired an architectural firm the Heise group to prepare architectural plans. They verbally
agreed that any resulting drawings would belong to Chrysalis in ‘88
- A decision came down saying that this sort of agreement (“work-for-hire”) did not assign Chrysalis the
copyright
- As a result, Chrysalis secured a certificate of release in ’90.
- Chrysalis sold its business to Arthur Rutenberg Corp. The assignments for the building plans from Heise to
Chrisalis and Chrysalis to ARC were recorded in the Copyright office. All copyrights held by chrysalis were
assigned to ARC in January 1991
- While the action was pending, ARC obtained a supplemental copyright fixing the copyright to reflect Heise as
the author
- I: did ARC hold the valid copyright?
- H: yes, they did because as long as there was an oral agreement, a subsequent written conveyance of a
copyright may happen later, and the oral agreement may still be in effect.
- In order to re-assign a copyright under § 204 (a) it must be in writing, however.
- The defense argued that MGB homes precluded ARC from owning the copyright because at the time of the
infringement no copyright was held by Chrysalis / ARC. Again, the court said that the oral agreements were in
effect and that the ex post facto agreements were sufficient to assign the copyrights to ARC
VARA – 17 USC § 106(A)
- (f) contains a pre-emption clause – preempts state common law
David Philips v. Pembroke Real Estate, Inc.
- Philips had built sculptures in a park in Boston, claimed they were “site-specific” pieces of art that were
covered under VARA AND the exception doesn’t apply to site-specific art
- District court says the exception 106(A)(a)(3)(a) applies to site-specific art
- Look at the definition under VARA
o Needs to painting, drawing, print, or sculpture < 200 copies
o There’s nothing about a whole area being the work of art – seems to refer to plop art
- I: site-specific covered under VARA?
- H: no
- Reasoning: wouldn’t make sense to allow protection for site-specific pieces of art then allow an exception
which would allow their movement effectively destroying them (statutory constructional argument)
- Notes:
o Philips argues the art is not plop art it’s site-specific where it really matters where it is
o There’s a case law about whether site-specific art is given different treatment than plop-art
o
Notes:
-
Copyrights post 1978 – need:
(1) fixed
(2) work of authorship
(3) original
§ 106(A)(a)(3)(A)
- modification of a work of visual art which is the result of conservation or the public presentation, including
lighting and placement, of the work is not a destruction, distortion, mutilation, or other modification … unless
caused by gross negligence
- Destruction not a violation of the adaptation right – cuts through the derivative work
- Think about removing a column or something there for engineering purposes
o Wouldn’t be a violation of adaptation, but could be a violation of integrity right
 Except for the above section of VARA
Things before 1923 are in the public domain for the most part
- interesting exceptions for unpublished manuscripts
- Period between ’23 and ’78, you have to wonder about for Copyright Law
- 1909 Copyright Act governs
- How did you know if something was copyrighted in this in between era?
- The same (1), (2), (3) requirements are in effect
- The list of works is pretty much the same except for recordings, architectural works
- Same standard of originality – note Feist said that originality is constitutional
- There was also a publication with notice requirement
o Notice is the © the name of the copyright owner, the date it was published
o This is not a requirement now
o Could be protected under a common law copyright dealing with things that are unpublished
- The ’78 act tried to abolish common copyright
- What if you published something and didn’t give notice? (i.e. no © )
o You gave it to the public
o The technical harsh rule was that you lost your copyright
o But exceptions were created so you could correct by publishing it correctly
- Lots of cases where you don’t want to put the notice on there because it doesn’t work for art
- Generally if there’s no notice, it’s in the public domain
- Fifth requirement is that there be registration with deposit
o You had to register the work – filled out the forms, paid the fees
o Again if you didn’t register w/ the deposit, you lost copyright
o The deposit requirement is to deposit a copy at the LoC
 Exceptions where there’s only one copy of the work, a unique work
 The copyright office is in the library of congress
o Typically a 1-year window from the time of creation
- Before the ‘70’s, porn wasn’t copyrightable, and they wouldn’t register it, so no copyright
- The question is: what exactly is the job of the copyright office?
o Should they investigate whether you stole the copyright?
o Very different from patent or trademark office – is it ministerial? Or is there scrutiny?
o One of the functions is to preserve works – that’s why we have the registration requirement
 The rest of the world doesn’t have the registration requirement
 Implications for international copyrights
 So in ’76, registration is no longer a requirement
o For any infringement that occurs before you’ve registered your work, the copyright owner cannot get
statutory damages and attorneys
 It has to show actual damages to get some sort of recovery for copyright infringement
- How do we trace copyrights?
o Prior to ’78, if no registration, then no copyright
o Post ’78, if there’s registration it tells you something about who’s got ownership
o But what if there isn’t registration ? Or what if there is pre ’78 and you want to figure out who is the
current owner
- The initial owner of copyright is the author
- The possibilities for who is the owner:
o (1) Single / multiple authors
 What does this mean for Maurizio? Working on entirely separate pieces of the work
 What is single authorship? Everything came from one thing – say everything came from the
outline in the Maurizio case – not thinking of the work as an integrated whole
 Consider an author an artist doing the drawings – multiple authorship argument is that the
author owns the words, the illustrator owns the copyright in the illustrations
 Can be very difficult to figure out who owns what
 Proofreaders, editors likely not considered original, so no copyright
What about people who coach people to talk a certain way, do they have a copyright?
 Generally it’s viewed as sweat of the brow
(2) Joint authors
 You have intent to integrate the parts into an indivisible whole
 What if people don’t have an idea about copyright – the law says we want to treat these
problems as a joint work
 Sort of a legal fiction
 If it’s a joint work, each author has copyright in the whole work
 In the book example, writer could license illustrator
 But you do owe duties to your co-authors
 Have to share proceeds, owe a duty of accounting
 The problematic issue is intent – people come out of the wood work when a work blows up
 Case of Hardy Boys – multiple authors work on the canon over time but they want the
appearance of a single author
(3) Work for hire
 Didn’t exist until the 1909 Copyright Act – the beginning of mass produced culture
 Arose out of the movie industry – multiple contributors: screenwriters, actors, bestboys,
 From a copyright standpoint, very successful unionization SAG, WGA, etc.
 In this case, though, the employer gets the copyright even though they don’t do anything
creative
 A real legal fiction – because if you have too many people working on the project,
you don’t want a million different copyrights
 The legal fiction is that the employer is the author
 Patent law – you get rights through assignment and the
 Under work for hire, there is no assignment, the employer is deemed to be the author
 Think of movie studios or publishers of book series
 Back to the web page example: the way in which you can ensure you have the copyright is to
hire everyone else as an employee
 The issue in Rutenberg Homes is who is the owner of the architectural designs
 Definition:
 (1) a work prepared by an employee within the scope of his or her employment; or
 (2) a work specially ordered or commissioned for use as a contribution to a
collective work, as part of a motion picture or other audiovisual work, as a
translation, as a supplementary work, as a compilation, as an instructional text, as a
test, as answer material for a test, or as an atlas. If the parties expressly agree in a
written instrument signed by them that the work shall be considered a work made
for hire….
 What is a collective work? Think newspaper, law review, magazine
 There are only specialized cases where an independent contractor relationship can
create a work for hire
 Another example: you hire someone to do special effects or make the soundtrack for
the movie
 What about independent contractors?
o Specially commissioned
o It’s an audiovisual work
o Parties have to expressly agree in a written instrument that’s it’s a work for
hire
 Sculpture and Architectural works can’t be works for hire

o
o
-
Chrysalis hired Heise to make designs
o The question that arose was: is this a work for hire?
o
Rutenberg
o If registration doesn’t confer copyright, neither can erroneous registration take it away
o Second circuit takes a different view
 View is that copyright registration is tied up with copyright ownership
 If you fail to register, then court lacks subject matter jurisdiction
 This is the background in the Reed Elsevier case
 Some owners had registered and others hadn’t registered

So are registration and ownership different – i.e. even if there’s no registration, is there
ownership?
Fair Use in Parody
Irving Berlin v. E.C. Publications
- Mad Magazine created 25 parodies based off of Irving Berlin songs
- Said they were to be ‘Sung to’ or ‘Sung to the tune of’ a well-known popular song
- The theme and content of the parodies differed markedly from those of the originals
- No allegation that the originals sound like the parodies – there’s no argument that the parodies would be an
acceptable substitute for the originals
- Plaintiffs argue copying for commercial gain may never be used for fair use
- I: fair use for parodies?
- H: yes
- Reasoning:
o Test: It turns on the ‘substantiality’ in quantity and quality of the material taken from the originals
o While brief passages of lyrics used, that’s OK because parodies have to ‘conjure up’ the originals
- Notice the court doesn’t look at this case and create a categorical exception – courts tend to avoid exceptions
o Be careful in treating fair use as a categorical exception
o It’s very easy for an infringer to get away with infringement
o They also eschew categorical exceptions because it’s too difficult to pin down what goes in the
category: what’s a parody? What’s a satire?
o Talking about the Jack Benny parody of the movie Gaslight – he took too much and used the same
elements
- The court uses satire and parody almost interchangeably
o The mad versions took just enough to conjure up or refer to the original work
o They didn’t take too much
-
Rewrite Due Monday, November 9th
You’ll get the higher of the two
The final will build on the same fact pattern
Handed out right after Thanksgiving
Read mountain top and Kellogg’s case
Mountain Top Beverage Group v. Wildlife Brewing
- Involves manufacture and sale of malt liquor, both with names “Wildcat”
- BLSS filed tried to register its trademark,
o You have to file a statement of use (SOU) w/ the USPTO
o The SOU consisted of a photo of a bottle w/ the mark affixed to and a signed statement fo the
president of BLSS that they’re using it in commerce
- Defendants, Mountain Top figured out that BLSS had never actually sold any of their beverage and that it was
just a dummy sample
- Defendants counterclaimed from suit. Because of the Trademark Law revision Act,t eh quantum of use to
support registration changed. Prior to ’89, the applicant had to be using the mark in commerce before
registration. The necessary minimum was a “quantum use”
- I: Token use?
- H: It’s a dummy sample, which was held not to be enough to register the trademark
Kellogg Company v. Toucan Gulf
- Kelloggs sued Toucan Gulf for using their Toucan Sam Logo
- They said it looked like toucan Sam (Bird on golf club) and because the Toucan was used to market golf putter
called “Toucan Gold”
- Kellogg supplied evidence they had marketed extensively their Toucan, that it most people associated it w/
Froot Loops, showed a commercial from the 80’s when Toucan Sam played Golf, and illustrated that they sold
golf bolls w/ his logo on them
- However, the golf balls were only sold at their HQ
- I: Trademark infringement?
- H: No
- Reasoning:
o They Toucans don’t’ look similar
o No chance of confusion – no impact in recognition of Toucan Sam after this company entered in the
market
Again, the golf balls had limited distribution; basically, Kellogg’s is not going to get into the golf
equipment industry
See: The 8 part test on p. 472:
o (1) strength of P’s mark; (2) relatedness of the good or services offered by the parties; (3) similarity
of the marks; (4) any evidence of actual confusion; (5) the marketing channels used by the parties;
(6) the probable degree of purchaser care and sophistication; (7) the defendant’s intent; and (8) the
likelihood of either party expanding its product line using the marks
There is also a dilution law claim - § 43(a) of the Lanham Act amended to contain a provision to protect for
the dilution of a famous mark
o Defined as the lessening of the capacity of a famous mark to identify and distinguish goods and
services
Five-part test: mark must be: (1) famous; (2) distinctive. Use of junior mark must (3) be in commerce; (4)
have begun subsequent to the senior mark becoming famous; and (5) cause dilution of the distinctive quality
of the senior mark
o You must show actual dilution not the likelihood of dilution
o Because Toucan Sam’s recognition was not diminished, no dilution
o
-
-
-
§ 106(A) – interesting for its exclusions
- The exceptions for conservation, preservation, lighting
- It’s possible that the chemicals used to clean a painting if they mutilated it could be a violation under VARA
- That’s what the exemptions are for
- A lot of the relations
- Hypo about Nickelodeons where you put in a nickel and hear a song – is there copyright in those songs?
o Aiken might be applicable or there might be exemptions
- Issues that affect museums: suppose they want to digitize their artwork
o Is there a copyright owned by these pieces and does putting it on the web infringe?
o 17 USC § 1710 – very important provision in the copyright act exempting public performances
o Exempts state fairs, religious services, the classroom, fraternal orgs, veterans orgs
- Cleanflicks amendment § 110 – very narrow exemption for private household – can’t make a copy but can edit
out certain parts
o His point is that the copyright acts are like a tax code – very narrow exemptions and exceptions
- Why would you need this if it’s a private performance?
o Movies can be performed pseudo-publicly – in broader social gatherings
o The question for me is: can you modify if it’s a private performance?
o Well yes, because you have to infringe explicitly, right? It’s categorical
- If you don’t get an exemption, you have to rely on fair use – 17 USC § 107
o The [bad] practice is that people engage in infringement and then they claim fair use in their heads
- House report on Fair Use – p. 175
o There’s a note in the report saying that fair use is an equitable rule
o When you think about fair use, you realize that there is infringement, but we don’t hold them liable
under an equitable doctrine
o Justification – even though someone violated the statute, we
o Fair use is a uniquely American notion – usually they’re talking about a statutory exemption
 Things like the VCR – in other jurisdictions, very clearly copyright infringement
 Other courts try to create legal systems to fit the problem with an exemption
o Other jurisdictions may be moving toward fair use
o The first opinion about fair use is an 1821 opinion by J. Story in a Mass. Case
 Folsom v. Marsh - starts off by saying certain uses of copyright are a justification for
copyright infringement
 Dealt with the editing of George Washington’s papers – the infringer argued there was
general public interest by educating people broadly about G.W. (sold a 3 volume set of
washington’s papers)
 Story said it was not a justification – Story said that all Folsom had done was create a market
substitute for the 21 vol. set of G.W.’s papers and undercut any justification
 So this case is good because it does set out exceptions for copyright infringement
-
1976 Copyright Act codified fair use – before it was just a common law doctrine
Another great fair use case is Geiss v. Time Magazine
o Dealt w/ the famous Zepruder film? The JFK assassination film
o Was made part of the warren commission – so the stills were published
o So, Geiss had the copyrights, so he sued for copyright infringement
The court under equitable principles said this is something where the public would want to know –
there’s great public interest – and all they did was publish a few stills, not the entire movie, so public
interest justification for Copyright infringement
Four part test for fair use on p. 137 – 2 things that are important
o The fair use is now statutory – makes a difference that it’s statutory because in some ways it moves
away from a pure justification sort of defense
o Now it has to come in under one of the four narrow cases
o The four factors are the ones the court has to consider – they’re fairly detailed
o One of the implications is the court looks only to those four factors – it’s no longer as open ended,
equitable, common law doctrine
o Also, the factors have to be weighed against each other
o It really has to fit the defense in the contours of the particular statutory provision
o Think if the Geiss case would’ve come out the same way post 1976
o
-
Copyright Duration
- Wayy back in the day it used to be 14 year terms – because it was the length of an apprenticeship
- So congress doubled this to 28 years – people living longer – then everything became a multiple of 14
- Before the 1976 Act
o Registration and Publication used to be the critical factors for determining when the copyright began
o Have to have all 5 things happen for copyright to begin in the pre ’76 Act
o Registration or publication (whichever happened last) was when you got the copyright
o The duration was 2x 28 year terms – The first term lasts 28 years from the aforementioned moment
and |---------------------|---------------------| (the second 28 year term was not automatic) – you have to
renew your registration.
o Lots of situations where things fell into the public domain because people didn’t re-register
o The famous example is it’s a wonderful life - fell into the public domain

o NOW it’s as soon as you’ve fixed the work
- Under the ’76 Act (when first enacted in 1978)
o An attempt to catch up with the rest of the world
o The rest of the world based copyright on the artist’s life - on the theory that the author’s lifetime
he/she should be able to control & maintain the work
o So the term under the 76 act is: life of the author plus another 50 years
o The way to think of this is a life estate plus a term of years – no requirement of renewal when the
author died
o An the copyright of course transfers – could be to the kids, spouse, university
o The copyright statute does have its own rules for intestate succession
o It’s in a federal statute
o Remember Jan 1st, 1978 was the beginning of the ’76 Act
o What happened with stuff copyrighted under the ’76 act still copyrighted as they fall under the ’09
act
o So anything published before 1922 is in the public domain
o Anything previously in public domain is still in the public domain
o How does congress deal w/ copyrights of works before the ’76 act?
o Works before the act, you got 75 years from when the work was first created
 Simple – 75 from the time the copyright was first created
- Under the Sunny Bono Act (amended 1976 Act in 1998)
o Enacted non-coincidentaly – things were starting to go into the public domain as of 1997 and beyond
(75 years + 22 = 1997)
o Lots of Irving Berlin songs and Mickey mouse were copyrighted back then
o Added 20 more years of additional protection across the board so the current term under the
amended ’76 act
o So the term is life of author + 70 years – the impetus was that all the stuff from the 20’s was going to
go into the public domain
o Why don’t they do it forever? Because the constitution says that copyright has to be for fixed times
o So you just lobby for longer acts
o For joint authors it’s the loner of the 2
o For Monday: Monday, Toucan, two Pesos, Wal-Mart
Two Pesos Inc. v. Taco Cabana, INC – Sup. Ct. 1992
- I: whether the trade dress of a restaurant may be protected under § 43(a) of the Trademark Act (Lanham Act)
-
-
-
Taco Caban (TC) operates restaurants in San Antonio that server Mexican Food. Trade dress is described as
having a festive atmosphere w/ bright colors, artifacts, etc.
Two Pesos (TP) is a competing restauarant that entered TC’s market, and TC sued
Sue dfor trade dress infringement and for theft of trade secrets under TX common law
Trial court held:
o TC has trade dress, it’s nonfunctional; inherently distinctive; has not acquired secondary meaning in
the TX market; alleged infringement creates likelihood of confusion
o TP deliberately and intionally infringed TC’s trade dress
Ct. App. Ruled the instructions were adequate and evidence supported the jury’s findings
Conflicts between the Circuits – 2nd Circuit protects unregistered trademarks only when secondary meaning
is shown
Sup Ct. granted Cert. to resolve the conflict
I: is trade dress that is inherently distinctive protectable under § 43(a) without showing that it has acquired a
secondary meaning?
H: yes, it is.
Reasoning:
o Lanham Act designed to protect persons engaged in commerce against unfair competition
o Marks classified in 5 categories: (1) generic (2) descriptive; (3) suggestive (4) arbitrary; or (5)
fanciful.
o Latter 3 categories because of their intrinsic nature are inherently distinctive and are entitled to
protection
o Generic marks not entitled to protection
The Lanham Act also says that a mark that otherwise could not be registered under the Act if it has become
distinctive of the applicant’s goods in commerce
o This is called “secondary meaning”
General rule regarding distinctiveness: an identifying mark is distinctive if:
o (1) it’s inherently distinctive or (2) has acquired distinctiveness through secondary meaning
By requiring a secondary meaning, it would hinder competition because [supposedly] trademarks foster
competition and the maintenance of quality by securing to the producer the benefits of good reputation
Wal-Mart Stores v. Samara Bros., Inc. – Sup. Ct. 2000 – Scalia Opinion
- Samar bros. manufactures children’s clothing – primarily flowery seersucker clothing sold to JCPenney
- Wal-Mart contracted with one of its suppliers to produce a similar line of children’s clothing
- Samar finds out about this, they issue cease-and-desists, and finally sue for copyright infringement, consumer
fraud, unfair competition, infringement of unregistered trade dress under § 43(a) of the Lanham Act
o This portion of the Act gives a producer a cause of action for the use … of any word, term , name,
symbol, or device, or any combination thereof… likely to cause confusion as to the origin,
sponsorship, or approval of his or her goods. – 15 U.S.C. § 1125(A)
- § 43(a) has been held to embrace trade dress – including packaging or “dressing” of a product
- To be distinctive, a mark’s intrinsic nature serves to identify a particular source. § 2
- Author’s note: Secondary Meaning is really not apposite for nonword marks because they have no primary
meaning – should be better termed ‘Acquired Meaning’
o Colors can’t acquire secondary meaning – they can invoke positive connotations and attract
consumer attention, but
o Design, like color is not inherently distinctive
o For words, they have to signal the product’s source – e.g. Tasty bread, Georgia peaches not good
enough
- The court says Two Pesos is inapposite because it dealt with trade dress, i.e. packaging rather than product
design.
- Sot he test is between product design and product packaging
Infringement Claims Under 15 USC § 1125(a)
Tumblebus v. Cranmer – Ct. App. 6th Cir., 2005
- P owned Tumblebus, Inc. a business in which she built buses with tumbling equipment and also sold the bus
to others who would market companies under the Tumblebus name, but not in her city of Lousiville, KY
- P sold a bus to one Pate, who in turn sold a bus to Cranmer, who then operated the bus in Louisville
o Cranmer had herself listed in the phone book as
- P had special stationary for the bus co. also
- When P figured out D was operating, she recommended a change in the bus co. name to something else
- D didn’t do it, and had herself in the phonebook as “Tumblebus of Louisville”
-
-
-
-
P sued alleging her business had declined as a result of the infringement of the unregistered trademark
Dist. Court held for P – that Tumblebus was protectable
In review they said that the protectibility depends on the mark’s distinctiveness
o Cramner argues that tumble and bus are generic terms
o P argues that Tumble and Bus were the most descriptive name P could think of, but this in and of
itself doesn’t prove the mark is generic, the court says (generic being a good thing)
o But because the ads for the service used other words to describe the service, like “gym on wheels”, it
indicates that Tumblebus was generic
o Also, tumblebus could be something else, like a van full of dryers
The test in this case is:
o (1); strength of plaintiff’s mark; (2) relatedness of the goods; (3) similarity of the marks; (4)
evidence fo actual confusion; (5) marketing channels used; (6) likely degree of purchaser care; (7)
defendant’s intent in selecting the mark; (8) likelihood of expansion of the product lines.
o Court says P satisfies the test
D argues P engaged in naked licensing
o Occurs when licensor fails to exercise reasonable control over the use of a mark by a licensee
o Claims this occurs because other licensees could use the name Tumblebus
o But this argument doesn’t hold water because you don’t lose trademark protection outside a small
geographic area
Also a first-sale argument – that she gets to resell the tumblebus and use it
o No dice here because it’s the service that’s being used, not product
Finally, Cramner argues that there can’t be an injunction against using P’s trade dress b/c of insufficient
findings. Court Agrees and remands for further determinations of what the trade dress is.
Yankee Candle v. Bridgewater
- Yankee makes candles, sues competitor Bridgewater for copyright and trade dress infringement.
- District court granted SJ for defendant
- To prevail plaintiff must prove that the dress is: (1) used in commerce; (2) non-functional; (3) distinctive.
o Distinctiveness may be either inherent or acquired (secondary meaning)
o Plaintiff must show that there’s confusion also
- P’s argue d’s copy their vertical shelving, the look and feel of the candles, the merchandise catalog
- P argues on appeal that the distinctive candle sizes and shapes, quantities sold, labels Vertical Design System,
and catalog stem from arbitrary choices and therefore are inherently distinctive and entitled to trademark
protection
- Citing Wal-Mart- the court holds that these claims fall under product / design configuration, so they’d have to
have acquired secondary meaning
- Court also says that the labels combined w/ the shelving, cataloging, candle containers and features are
neither product / design configuration nor product packaging
o But looking at Two Pesos, Yankee didn’t make a claim about the entire store and so can’t be
inherently distinctive because they’re closer to product configuration / design.
- Also, because Yankee tried to protect an entire series of labels, it must show that the several products are
sufficiently distinct and unique to merit protection
- The Court then examines secondary meaning:
o Says it can be proven through circumstantial evidence (i.e. aside from surveys the company took
about acquired meaning).
o Factors include: length and manner of the use, efforts made to promote a connection by the public
between the trade dress and the product’s source. Other factors include the product’s established
place int eh market and proof of intentional copying
o While Yankee showed its candles had high sales, it didn’t show there was a connection with the
marketing indicating the source of the product
KP Permanent Make-Up v. Lasting Impression
Trademarks
- should be able to be used to distinguish one product or service from another product or service
- Two ways to show a mark is distinctive
o (1) inherently distinctive OR
o (2) acquired distinctiveness (acquired meaning)
- Does the owner have to bring in surveys? IN Taco Cabana – they said if it’s inherently distinctive, you don’t
have to bring in this secondary evidence
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IN another case (Qualitex) the court looked at color – the Court said you have to show acquired
distinctiveness
o So apparently you can trademark colors?
You’ve got to show through survey that the trademark has acquired
o Apparently Booberry is not trademarkable because it turns your milk purple
In Taco Cabana – all the elements together can be inherently distinctive
o But the court says one element by itself can’t be distinctive
In Wal-Mart - The court held that colors can’t be trademarked because suddenly companies will start
trademarking every color of the rainbow one company takes brown, another black etc.
o In a way you’re saying a limited number of colors can enter the market
o And is chartreuse confusable w/ purple
o And the court says they don’t know how to handle that - maybe physicists do, but not the court
o So the burden is on the company to show this secondary meaning i.e. distinctiveness
o Back to Wal-Mart – the cut of the clothing – should that get trademark protection? Well, there are a
limited # of different cuts, so you get into the same problem
 So if one cut is slightly more angular than another, the court won’t take out its protractor and
figure out the difference
 You’ve got to have acquired distinctiveness
So if you start looking at these cases, you have to wonder what happened in Taco Cabana,
o If the idea is having a Mexican themed restaurant and you say y restaurant is distinctive, there’s an
underlying problem because how many different Mexican themes exist ?
So it’s not really clear what the meritorious difference is between the two cases
o Oh, but there’s a shift in the justices
o The big shift occurred with having justice Breyer – he joined after Taco Cabana
o He wrote the decision in the Qualitex case – and he’s more sophisticated in IP than the other justices
So th court is saying that if there’s a limited # of choices, then no trademark unless secondary meaning?
Back to Taco Cabana – remember TC expanded into Two Pesos’s market
o TC probabloy cared about the aesthetics of its restaurant
o Again, you’re only protected if there’s this customer association established
So there’s an underlying shift in the law but there’s no overruling of the previous precedent
o Justice White is gone, why do I care?
o The justices wouldn’t’ overrule their previous precedent
o The specific details of trade dress – you have to have secondary meaning
o Instead of killing Taco Cabana it just narrowed it or weakened it
So how do you reconcile Taco Cabana with these other sets of rules?
o Scalia asks what is this trade dress? See p. 502
o There was either product packaging or tertium quid = I have no idea what it means, but it’s akin to
product packaging
So the law of trade dress means: it’s either product design trade dress or it’s product packaging trade dress
o If it’s product packaging trade dress, it can be either inherently distinctive or acquired
 You get two bites at the apple (and at the tootsie pop?)
o For product design you’ve got to have inherent
o Another infamous paragraph (last one on p. 502) – Saying you’ll have to draw difficult lines between
product design and packaging
 Coca-Cola hypothetical about people who keep the bottle if it’s collectible
o So in what case? Everything – the UW experience, Bucky, etc. could be the packaging
o The problem is the lines between the two might blur
o Is the Aeron chari providing a relaxing comforting experience for those who sits in it? Or is it the way
it’s put together
 When he searches for a char, you don’t search for a relaxing sitting experience
 You askf or a chari and the notion of the chair has a certain design for it
 The shape or design of the chair has some trademark uses as well
 So the line between product and packaging might blur in certain situations
o What about a laptop? Oh my god, he just said Sun Workstation
 So is the way the computer is put together trademarkable?
 You have to show acquired distinctiveness in the product design
Does this test make sense? Well we can make it make sense
o Even in Taco Cabana, the line blurs, so why are we in the product design category/
o Would’ve made a lot of sense if the Court had gone the other way in Taco Cabana
How do you know if something is protected as a trademark?
o Use, Not otherwise barred? And then (3) distinctive
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Anu asks if Pizza Hut would fall under Wal-Mart or Taco Cabana – well, it depends on which aspect
o See: Yankee Candle – doesn’t have to deal w/ restaurants, but does deal w/ the retail space
o The case is looked at in summary judgment
o “Stores in malls, how quaint”
o The vertical storage system, the look and feel of the candles, the
o The shelving is functional and therefore it’s not subject to trademark protection
o “One fragrance per page, how tantalizing”
o Shuba says it’s “put together” – need to be carefulw hat language you use in your briefs
o W/ the candles, the labels look like packaging
o The shape of the candles – is the shape of the candles the packaging ?
o It’s a lot like issues that arise under product liability apparently – what’s the alternative design
o The bottom line is: is there any meaningful answer? No.
o Lawyers argue both sides – both product packaging and product design
o Yankee Candle: they didn’t’ bring in any [evidence of acquired distinctiveness
 They should’ve known they would have to show acquired distinctiveness
o You’d want to put something in your complaint to show acquired distinctiveness
o You have no idea whether the court will pick the product design or packaging
o Need to be able to do the coke bottle example – namely the coke the experience of the bottle itself
may be the product and the bottle may be the packaging
o So is the shape the way it’s being packaged or the way it’s designed?
The actions available under the Lanham Act
- You have § 1125(a) same as 43(a) – just one was before the other was codified under USC
o They are referred to interchangeably
- § 1114 – referred to as traditional trademark law
o When someone takes someone else’s trademark and puts it on their product
o It’s using someone else’s trademark and putting on his / her product
- In this case the mark represents a product / service and the mark points to a source
o So by labeling it incorrectly you’re undermining this three-way relationship
o Think of fake Rolex watches, fake Beanie Babies
- Or, think Dastar you use the genuine product or service and put another mark on it
o You might take a genuine Firestone tire on it and putting another trademark on it
o E.g. take a coke bottle and putting a different label on the bottle
o This is known as reverse passing off
- This is actionable under § 1114 and § 1125 (see below)
- § 1114 and § 1125 have different roots
o 1114 applies to registered marks only – the idea is to promote use of the Lanham Act and use of
registration
o We want to have trademarks as a whole go into the Federal system – we want to have an integrated
marketplace
o Then the Fed. Govt. Said we should protect unregistered marks
o The two really have converged by having § 1125(a) cover both registered and unregistered marks
o The way trademark claims get pled is that someone will raise § 1114, 1125, and state claims, and
whatever other rights might be implicated (copyright, patent, etc.)
 1114 only had to deal w/ registered marks initially
 But if it was registered improperly,
o Remember that registration gives you benefits – specifically, the presumption of validity of the
trademark – you don’t have to prove again in court the use in interstate commerce, the
distinctiveness, etc.
o If you have 5 years of continuous use of the trademark, you have what’s known as the incontestable
trademark
 Only contestable on genericide and fraud
 What is genericide?
Tumblebus – p. 528 – Ct. App. 6th Cir., 2005
- They tried it first in Louisville – and another woman has her own bus
- There’s confusion
- Have to show ownership of the mark, and then who infringement – which the standard is likelihood of
confusion
- Going back to the diagram – when the consumers see one product or service that’s different from another
with the same mark, there’s confusion of source (see: the drawing three-way relationship above)
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The standard for likelihood of confusion – factors on p. 531 (same as in Toucan Golf) –
o He says the Tumblebuss one’s the best to use – they’re all basically the same, sometimes renumbered
Strength of the plaintiff’s mark
o Inherently distinctive? Acquired? If it’s inherently distinctive, you give more protection
Relatedness of the goods – is the trademark being applied to exactly the same service or something slightly
different
None of the factors are dispositive they’re all meant to be sliding scale
Likelihood of confusion is not a determinative standard – you have to examine all these subfactors
It’s important to recognize the plaintiff has the burden to show the likelihood of confusion
o Remember, you don’t need to show actual confusion
o Also the defendant does not have the burden to show that there’s no confusion
The defendant’s burden is to bring in evidence that rebuts the plaintiff’s case
The plaintiff has the burden so if the plaintiff brings in the evidence for likelihood of confusion and defendant
doesn’t bring in any evidence, plaintiff will win in that case
Court has to weigh the two sides’ evidence
o This comes up in KP Permanent Makeup
In this case, there’s the abandonment through “naked licensing”
o The owner is licensing the trademark without pointing back to the underlying product or service
o Say you take a trademark for motorcycles and send it to someone else who’s not using it for
motorcycles
o You’re not licensing your trademark with a product or service you’ve developed it with
o If you have a separate line for clothing or hats or something, that’s not naked licensing
Think about a donut factory – say there’s a Tom’s donuts – that’s the trademark
o And now you sell the donut shop including the trademark – or you license the trademark
o But the new proprietor makes donuts but he does something weird with the donuts
o so now it’s being applied to some other weird aspect of the product
o Whenever you license trademarks, you have to license the good will associated witht hat trademark
o Very abstract concept – means that you have to license with the trademark the types of things that
make the product or service that makes the association
o Can you lose distinctiveness through using the trademark? Yes, you can. So, get a separate trademark
The other defense is first sale:
o Once you’ve bought a trademarked product, you’ve got the right to resell it as-is (you’d hope that’s
the case because we sell cars and the like all the time)
o What counts as “as-is”? Well, that’s where the D got in trouble b/c she wasn’t selling as-as.
o OMG he made a Homer Simpson reference to him putting together his perfect car
o E.g. you bought a Lexus and you repaint it with purple polka dots
 Is that as-is? Lexis may not like the association, but most likely you’re fine
o Defendant has the burden on this
Fair use defense in trademark law
o Laid out in § 1115 of the Lanham Act – see p. 559
o § 1115(b)(4) – talks about the following as fair use: “use of the name, term, or device charged to be
an infringement is a use, otherwise than as a mark, … of a term or device which is descriptive of and
used fairly and in good faith only to describe the goods or services
o so (1) descriptive (KP – Permanent) or (2) nominative (Century 21)
In KP Permanent, the defendant said they’re only using MicroColors in a descriptive sense
o Consider the Froot Loops and Generics called Frooty Loops – infringement?
o Other cases that arise - suppose you’re in a repair shop, and you say on your sign, I fix jaguars, etc.
o Burden is on the defendant to show no confusion
o Defendant does not have to show absence of confusion to raise the defense – they can bring in
evidence to rebut Plaintiff’s prima facie case
o The court’s view is we live with small amounts of confusion – can’t erase all confusion, because we
want to give people the right ot use the mark in a purely descriptive way
o The other defense is nominative fair use – Century 21 the standard is on p. 564
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There are defenses where the defendant has burden
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Once you stop using marks, you run the risk of abandoning the mark
What constitutes abandonment is on facts and circumstances
Perhaps a company goes out of business or there’s intent not to use it
o Interesting case about Gatorade vs. ThirstAde – and the latter stopped using the mark
o So was it suspension of the mark or actual abandonment?
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Think about the McRib – it’s back (bitches!)
Dastar v. 20th Century Fox
- Book – published in 1948 – before the 1976 Copyright Act
- Book -> TV Show -> Dastar’s video
- Remember, at this time, you had to publish, fix, and it had to be a work of authorship
- You also had to publish and register it at this time
- Copyright lasted 28 + 28 years
- The book was renewed for another 28 years, but the TV show was not
- And the book gave rise to the TV show, and this wasn’t renewed
- The TV show was first broadcast on 1949
o So in 1977, the WWII show went into the public domain
- Dastar’s model was to do some minor editing of the film, and also to pass it off under their name
- Does 20th Century fox have any rights here?
o Well, you can use the tv show however you want, but the book is still under copyright, so there’s the
argument that you created a derivative work based off of the book
o Remember, 20th century got a license from the book
o If 20th century didn’t get the license, they couldn’t make the tv show in the first place
- Note that 20th Century wins on copyright infringement in the District Court
- Why did the 9th circuit reverse on the infringement?
- Ghosh says that if the TV show came out of nowhere, then you could feel free to modify it as you pleased
o He and Kyle are getting into an argument –
o Fucking shoot me – apparently if you base a derivative work in the public domain, you can’t do
anything to it because there’s an underlying work
- So if all they copied were things that were in the TV show, but not in the book, there would be no claim for the
underlying copyright infringement
- Of course Dastar copied elements more than just those that were in the TV show
- So why does the 9th Circuit reverse?
o The elements that Dastar copied were historical facts
o They didn’t copy original elements of authorship – factual elements are not protected by copyright
- So is everything historical not protected?
o If you made a carbon copy of the Eisenhower book, that’s copyright infringement even though you’re
copying something factual
o Because you’re copying expressive aspects and arrangement
o But because they took out facts to make the video, this would be acceptable
- Remember if the underlying work was LOTR, there would be copyright infringement because there are no
facts
- So, the copyright claim gets eviscerated here – the Supreme Court voted unanimously 8-0
- Now, onto trademarks:
o The mark connects the product / service with the source
o There are two ways of infringing – you can use the mark and apply it to the incorrect product or
service – this is “passing off”
o Or, you can take the genuine product and pass it off as coming from a different source – this is
reverse passing off
 That’s what we’ve got here – Dastar puts it off under their own name
- So, why no trademark claim?
o The court basically said tracing back the original source of these works is difficult how long is the
chain?
o Scalia’s point is “why doesn’t have a claim on this?”
o Let’s say you strip out all the credits and you rename it?
o Well, then ever person who contributed to the work could go after you for trademark passing off
 Best boys, electricians, etc.
- Is there another, more basic explanation?
o If you were the judge, would you come out
o Remember also, 20th century fox screwed up and didn’t renew
o Copyright has rules – do we really want trademark to be a backup to copyright when you screw up
your copyright?
o Scalia also looked up the dictionary definition of “origin” and said the tapes themselves were the
origin, not the movie?
Scalia questions whether this is analogous to taking a genuine product and putting the
wrong label on it
 Because the origin points back to the source
 So the question Scalia poses are: (1) what is the product? Is it the videotape or the
information on the videotape?
 Also, note the language “produced and distributed by entertainment distributing”
 Scalia reads this language to mean that Dastar did those things, which they exactly did
What does video mean?
 It could mean the funny entertaining content on the medium or it could mean the medium
itself
 Scalia reads this literally to mean that the video was actually made by Dastar
 Scalia doesn’t address the issue that normally we mean the information on the tape
Also criticism from moral rights folks
 They argue that you have the right of attribution – to have your name associated with your
work
Scalia says moral rights don’t matter - but what of that?
 There was a movement to amend the Copyright Act to add in moral rights
 Not much traction on this
 People viewed Dastar as a very odd fact pattern, and that because 20th Century didn’t deal
with their copyright , so they lose it.
 When you reduce the video to a physical tape, then it’s a commodity, and ALSO, you do have
the right origin – it’s the physical videotape
Also, copyrights go on for a long time, but trademarks go on forever
So if you allow trademark as a backup, it’s sort of a perpetual copyright
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Tate v. Scanlan Int’l, Inc.
- deals with the invention of “suture boots”
- Part of the invention involved using a Kitner sponge holder –
- You have the sponge holder and the clamps
- So the Nurse Practitioner goes to a company, Scanlan, and they say they’ll help her patent it until they realize
it might infringe on another patent for the Kitner sponge holder
- They only pay her $1k, a pittance
- She alleges Scanlan took her idea
- Why isn’t this a trade secret?
o Part of the value must derive from the fact that the information is kept secret
- What is the “it” you’d try to protect as a trade secret in this case?
o Well, it’s the system
o But there’s no value in the boots being secret
o The whole point of marketing these boots is saying, “here the boots are, use them in this way”
o So, you really need a patent
- So, should she have gotten the patent before she entered into talks with Scanlan
o Should she have stopped doing anything and then told someone else’s?
o It takes time, gives you protection, but also introduces delay
o Her choice was pretty rational – most people don’t have lawyers
- Remember, the value originates from the fact that it’s out in the open – that you can use this thing and that the
technique is out in the open
- Copyrightable?
o Ghosh says he’d bet against it
- Trade dress?
o Sounds more like design than the packaging, so trade dress is out
- We’ll start talking about Diamond & State Street, Gregor, Fujikawa
Patents
- Have to file an app w/ the USPTO – reviewed by patent examiner
- Obtaining it is called patent prosecution
- It takes 2-3 yrs. Usually, sometimes decades
- The basic point is to go through the requirements of patentability
- And the patent is either
- In Scanlan, there wasn’t a decision to get a patent on suture boots
- Tate has the problem that someone took her idea, and didn’t pay her what they said they were going to pay
her for invention
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Possibly there’s a case for common law misappropriation
o Most likely not a case for that
Another cause of action for theft of an idea
What can be protected – where’s the consideration on the other side? Is it gratuitous?
o On the one hand, if you promise someone $500k for an idea, so it should be enforceable
As a doctrinal matter, theft of an idea boils down to consideration was there consideration so someone could
be compensated?
Or maybe this is like unjust enrichment – the person who didn’t’ have a dollar to his name, and they’re given
$1, which eventually lands this guy the lottery – is there unjust enrichment?
o Well, if you give someone an idea, isn’t this similar? Not being compensated for an idea is unjust. Or
not?
o Could be contract or quasi-contract – still boils down to what the idea giver gave up
Different courts view this in different ways – theft of an idea:
o MN court asks: is this novel and concrete?
Does there have to be an express implied contract ? or if you just mention an idea offhand, then it’s quasi and
there’s unjust enrichment
The court screws up the opinion – says originality is based on non-obviousness and draw a comparison to
patent law
o The court looks at novelty from a qualitative standpoint – they want it to be innovative – not just
something that hasn’t existed before
o I wonder how patent examiners view this? Could someone think of stuff as worthless, therefore not
patentable?
Being concrete
o Courts mean that it’s something that’s been worked out to a certain extent
o Has to be more than a simple twinkle in the eye
o Again, this is for theft of an idea, but parallels to
Remedies
o The court looks to the equities of the case – they look to see what the remedies would’ve been had
there been a patent
o The court looks beyond the contract
Patents- Has to do with the notion of inventing something
- Somebody came up w/ a new product,
- From Bilski – you can see that almost anything could be patented – it’s a bit of a free for all
- Govt. grants you the exclusive right to make, use sell, offer to sell, import the subject of whatever your
invention is
- Important this is that it’s a grant by the govt.
- And it’s a very broad right
- The verbs in § 271 of the copyright act – you get rights like “use, sell, make” all these rights that you get and
can stop others from executing
- Patents traced back to the republic of Venice – had a system to encourage inventors to come to the republic to
sell and commercialize things
- Original patents statute goes back to 1474 or so
- Lots of discussions about patents in Roman and Classical Greek philosophy and political theory (Aristotle)
o Debate over whether govt. should spur innovation, give exclusivity, etc.
- The republic of Venice motto was of encouragement:
o Original grant was for 10 years – the idea that these don’t last forever
- In the U.S. you get 20 years from the date of application
- Where does the word “patent” come from?
o Came from the practice of Elizabethan times of the crown making grants to different individuals
o Could’ve been land, a privilege to market certain things,
o But you could only do w/ the grant what the crown said you could do
- There was something called the statute of monopolies
o Put limits on the crown of giving grants
o 1 exception for copyrights and another for inventions
o Patent also means “open” in latin
o The idea is that these grants were intended to be open grants
- So in modern day, Congress can give patents but has to be to promote useful arts, for authors, and for
discoveries
- The first sets of legislation Congress enacted in 1790 was Copyright and patents
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o Initially involved fed. Govt. but involved the Sec. of state, War, Atty. General
o They would actually consider the patents apparently
Processes didn’t work too well under the old system
So here’s the problem:
o You’ve invented something, but you’ve got to get approval from the govt.
o But you have to show them the actual thing – tough in the 1790’s
First Amendment, to address this: You don’t have to show us the thing, but has to be a description of the thing
o Just need a writeup of the thing
o And the writeup has to be something you’ve submitted that you’ve actually done
o And that’s how you should understand patents these days
o It’s really the written instrument that matters
o That’s what we think of (the written instrument) as the patent
You can either use Google or USPTO
o Similar to real property where the written description of the property that matters
o Similrly in patent law, the written description is what matters, even though the invention is out there
being used
o Think of it as a shield or something?
“Replaces reality w/ words, then replaces them w/ words”
Initially you only had the invention itself, then you have the writing of the invention meant to lay out its
details
o This became the basis for patent litigation
o The problem w/ the writing of the invention is that the judges would go outside the writing
o The response is to add more writing
o Specifically, the “claims” in the patent document
o Infringement has to be based on the “claims”
 Begins w/ phrase like “what is claimed is:”
o If you want to avoid the infringement, you have to design around the claims
o The art is to write the claim to claim the invention, but not claim too much
You have to have a description of the invention for the application
o And it cannot change
o You also have to have some preliminary claims
o Prosecution is about: will examiner approve the claims?
Say examiner says: invention is not novel or not patentable subject matter, or not enabled, nor not nonobvious, etc…
o The requirements are applied to the claims
o Your response: claims are fine but application of law by examiner is wrong
o Another response: withdraw the claims or to alter the claims in certain ways
o BATTLE is over the claims
Patent
o AGAIN Is WRITING ABOUT THE THING, not the THING ITSELF
o In that sense is different from other areas of IP – b/c you have to have a claim
o Analog w/ trademark b/c you have to register, but not usually a description of the mark, save trade
dress
o Patent law has level of removal – description outlining what your rights are
o Often times need to have different languages for same thing - different countries = different language
o Can have pictures as well as words – thinks you can only have drawings
1982 – U.S. Ct. App. For the Federal Circuit
o Special Appellate Court that is in DC – near the White House right across from the White House
o Deals w/ mostly appeals in patent law
o Have to have claim that gets you to the Fed. Circuit
o As is the custom, you sue someone for patent infringement in W.D. WI say – you appeal it to the
Federal Circuit – they have exclusive jurisdiction
o Same thing for E.D. TX, etc. etc.
o They’re hearing fewer cases in a year, and not all of them can be patent cases
o Very rare that you get cert. and head to the Supremes
o You could teach patent law like soap opera – main players SCOTUS, USPTO, Fed. Cir.
o Fed. Circuit opinions binding on all the Fed. Circuits re: patents
o Say a 5th Cir. Decided before 1982, then maybe prior precedent applies
o But they got their juris. From the CCPA
o What if you’ve to a patent law claim that also raises a licensing or contract issue?
That can be appealed to the Fed. Circuit – sometimes they come up w/ rulings re: patent
licensing – if it’s a K issue, then it has less sway
 Very interesting debate
 The Fed. Cir. Is starting to make pronouncements about the UCC (uh oh)
Requirements for patentability
o Patentable Subject Matter
 Legal basis in Const. – Art. I. Section 8, Cl. 8; 35 USC § 101 (Patent Act)
o Utility – it can actually do something (rules out a time machine) - § 101
o Novelty – what gets litigated the most – the easiest one to administer § 102
o Non-obviousness - § 103 (KSR case)
o Enablement - § 112
 You have to have a written description that someone in the art can read
 You have to disclose the recipe to get the patent – needs only to be understood by people in
the art
You need to understand the Sections b/c rejections come in under sections “rejected b/c of 102”
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Patentable Subject Matter – See: Diamond v. Chakrabarty
- tells you what sorts of things you can
- Useful arts
- Discoveries
- Inventions
- Const. doesn’t say anything about these – by arts they mean field in the const.
- § 101 says the invention has to be a process, machine, manufacture, or a composition of matter
o The Statute lays out specific things that qualify for patentability – so you invention better darn well
fit into one of those categories
o From a dictionary standpoint they seem to fit into one of those things
Diamond v. Chakrabarty
- Invented by biochemist
- He invented genetically altered bacteria
- Bacteria was able to breakdown carbon compounds (oil spills e.g.)
- Patent Office & Lower Ct. – problem is: it’s a living thing?
o Well, can’t they just patent the process of making it?
o Are these little guys machines?
o Ethical issues – cloning human beings
- USPTO said it was not in the subject matter
- SCOTUS said Sup. Ct. said it intended patents to be all encompassing
- I: can a living thing fit into patentable subject matter?
o Useful arts is interesting:
Patents – Recap
- Getting a patent – have to show that the claim meets the requirements of patentability
- (1) patentable subject matter, (2) utility, (3) novelty, (4) non-obviousness, (5) enabled
- At the end of the claim, whatever claims are left standing are referred to as the patent
- And once you get it, you sue – b/c someone’s making, selling, importing, or using
- Licensees only have to license what’s on the patent
- Defenses
o Patent claims are invalid – can raise any of the above (5) for invalidating the patent
o So, the patent owner sort of has to go through these hurdles twice
o But in litigation, the patent owner has already gone through prosecution, so the burden is on the
defendant to show one of these 5 don’t apply
Blandertung? - case about collateral estoppel – when a litigation resolves a particular issue, can the losing party raise
it again?
- Generally no, if there’s been a final adjudication on the merits
- So in litigation, generally once your patent claims are found invalid, you can’t litigate using them
- Some broader claims on your patent can be invalidated while others
- Different from trademark b/c when you file trademark, it’s up for everyone to oppose
o This doesn’t happen in patent litigation
Diamond v. Chakrabarty
- No issue w/ patentable subject matter w/ regard to the method claims
- 2nd claim was an innoculum floating on water – probably a manufacture or subject of matter on which it
would reside
- There have been patents on enzymes, hormones, chemical compounds
o But these largely related to extracted compounds
- Patents on plants
o Plant variety protection act – inventions where people grafted the plant, new plant varieties, etc.
- The interesting thing here is they’re trying to patent the bacteria under the same patent that might be used to
patent a steam engine, etc.
- Plant Act, Plant variety act had both excluded bacteria, or at least hadn’t mentioned it
- So, do you want to encourage development of genetically engineered stuff?
- So it wasn’t clear what the intent of the Const, or Congress when they revised the statute or when Cong.
Passed the 1st patent act. So, the examiner’s view was this [patent] was kind of an odd view
- And it wasn’t quite clear under what category this bacteria would fit in
- The process claim is fine, and the manufacture or composition of matter was AOK (the innocculum)
- But if you say the bacteria is a composition of matter or a process, it’s stretching things
- H: “anything under the sun that’s manmade is patentable”
- So where’s the limit? Can you patent any living thing?
o Sup. Ct. of Canada said they accept patenting of bacteria, but not multi-cellular organisms
o Canada says it’s a sort of organic freak of nature
- The only limitation, says the court are the “useful arts”
o The notion of what arts might be useful is pretty broad
- The operative word is made
- Remember, nature, physical phenomena, and abstract ideas not patentable
- There is an atomic materials exception
- There are lots of patents out there on illegal things
o Controlled substances, radar detectors, etc.
o If congress wants to exclude you, they can
- Many jurisdiction put limits on software, business methods
o Software programmers vigorously opposed patenting their software
o Initially sup. Ct. said software was sort of a series of mathematical steps, so not patentable
o Sort of in opposition to Diamond vs. Chakraburthy
o Resolved in one sense by software companies getting copyright on code
- So the software manufacturers drafted the claims for the software in different ways
o Look at the way the claims were written in the 70’s
o The claims in those cases were written in mathematical terms & words
- Later claims tried to tie into something more patent-like
o Diamond v. Diehr – Method for curing rubber
o One of the claims had to do w/ the arhenias equation, a method of regulating the temperature by
which you cure rubber
o There was software that was implementing the arhenias equation
o So the court talked about the arhenias equation in the context of how it regulated the machine
o And the court upheld the patent not because it was a machine
o They used language that it’s a software claim that’s tied to some sort of “tangible and concrete result”
- So now software patent aficionados got what they wanted, got some direction about how to draft software
claims.
o Has to be mathematics that shows some concrete result
o No language in Diamond v. Diehr about “anything under the sun that’s manmade”
o Sort of telling that they didn’t use this language
o It suggests that the court viewed different patents in different ways
o Perhaps useful to think of things as bifurcated
Diehr – method of curing rubber
- the patent at issue is a process
Chakrabarty – method of altering bacteria
- The issue was really manufacture and composition of matter
-
So you have one category for things that are manmade are patentable subject matter – no problem
-
Processes on the other hand seem to have a different approach b/c they didn’t say that everything under the
sun that’s manmade is patentable
-
The dates of these decisions are interesting as hell
1980 and ’81 – are the decisions and then ’82, the Federal Circuit gets created
And the court is VERY patent friendly
So the court issues a bunch of decisions, the big one of which is the State St. case on p. 250
State Street v. Signature Financial
- It’s about processes of doing business
- Was looked at very closely because you have a specialized court that’s actually making one of its first big
decisions about patentable subject matter (1998)
- Specific invention is a hub and spoke model of moving $$ between hub and spoke of mutual fund portfolios
- The issue is: should we even allow these business method patents – is this subject matter?
- H: yes b/c even though it’s mathematical, it produces a concrete and tangible result
o Note that this language is taken from Diamond v. Diehr and they don’t talk about everything
manmade under the sun
- The court says the claim shouldn’t focus on which of the four categories: process, machine, etc. etc. but rather
the essential characteristics of the subject matter, in particular its practical utility
- So what the court was doing was:
o Conflating patentable subject matter and utility
o I.e. if there’s utility, then there’s patentable subject matter
- The business method exception:
o Before the state street case, people thought there was an exception that business method patents
weren’t patentable subject matter
o Why did they think this? There’s a case called Hotel Security Checking v. Lorraine (1908) involves a
book used for wait staff for taking orders
- But when the federal circuit goes back and reads it:
o They say the case was about non-obviousness not about patentable subject matter
o As long as you have some method of meeting requirements ob being concrete and tangible, it meets
the subject matter requirements
- Aftermath:
o All hell broke loose on processes
o Bilsi nothing suggested a machine – you could do it at home w/ a pen and pencil
o The question then is: is it patentable subject matter? USPTO rejected it b/c not patentable subject
matter
 So what did the Fed. Circuit say? They said it’s not concrete and tangible
 They run into problems w/ early precedent that emphasizes practicality
 So they came up w/ a test called the “machine-or-transformation test”
 “A process is patentable subject matter if it involves a machine or a transformation”
 If a process involves operating or initiating a machine, that’s patentable subjecdt matter
 And this points back to Diamond v. Dier b/c it used a machine & arrhenias eq’n.
 But think of chemical processes: what’s the machine there? Maybe you use a beaker, but if
you extend this, then mixed drinks are patentable
 That’s where the transformation comes in
 You have to have some real physical transformation occurring
o But it’s really not clear what a transformation is defined as
 The court was really talking about changing the underlying physical structure of stuff
 But what about financial things? A word processor? Aren’t these transforming things?
 The fed. Cir. Had examples of this
 And the Sup. Ct. granted cert. to evaluate the machine-or-transformation test
o There’s not tangible or concrete or abstract idea that’s being patented
o The USPTO doesn’t even discuss novelty, or non-obviousness b/c of patentable subject matter
o One of the cases before this was the Commiskey case, which dealt w/ a method of doing arbitration
 Federal Court affirmed this too b/c no machine
Brenner v. Manson
- USPTO denied patent app for certain steroids b/c it did not fulfill the utility requirement
- The steroids were close to another compound –no evidence that it actually reduced tumors in mice
-
CCPA reversed
I: what is the utility in a chemical process? Is it (1) because it produces the intended product? (2) because the
compound belongs to the same class of compounds under investigation
H: not a compound that’s not proven to do anything
R: they cite justice story’s definition of “useful”, say it’s not helpful
The pressure to hide the process to create the compound is overrated, and if inventor can’t figure out a use,
he has “every incentive” to make the invention known to the public
o WHAT A LOAD OF BS
It may block off whole areas of scientific development without compensating benefit to the public if allowed
Congress has erred on the side of non-patentability unless ‘utility’ is shown
o A potential utility is not utility
“A patent is not a hunting license. It is not a reward for the search, but compensation for its successful
conclusion”
Priority
- U.S. uses a “first to invent” regime – the first inventor to reduce the invention to practice gets the patent
- Disputes over who invented first are determined in an “interference” proceeding
o Requries that the invention was made by the inventor and not abandoned, suppressed, or concealed
o Or (2) the invention was made in this country by another inventor who had not abandoned,
suppressed, or concealed it.
o In determining priority of invention, consider not only the respective dates of coneption and
reduction to practice of the inention, but also the reasonable diligence of one who was first to
conceive last to reduce to practice, from a time prior to conception by the other.
Novelty
--- Date of invention -------| -------- | --------1yr. b4 date app. Date of ap.
-
-
So you have a choice, you can disclose it, or you can patent it
On sale – suggests there are a lot of commercial law issues raised
o Can be any sale of the product – doesn’t mean making a prototype and selling a bunch of
o Could be as simple as getting VC to finance the invention, but “on sale” is the term in the statute
o How could experimental use come up in “on sale” ? Test marketing. Like Crustless bread, e.g.
How do you know when you’re invention is on sale? See: Pfaff
o
Fujikawa v. Wattanasin
- Fujikawa appeals from 2 decisions of the Board of Patent Appeals and Interferences
- The Board granted priority of invention in two related interferences to Wattanasin
- At issue are some sort of compound for inhibiting cholesterol
- Fujikawa works for Nissan, Wattanasin for Sandoz pharma.
- Fujikawa registered on Aug. 20, 1987
- Appellant contends USPTO improperly fixed date of Wattanasin’s reduction to practice.
o And erred in concluding Wattanasin had not suppressed or concealed the invention,
- D was assigned patent in 1982, during ’84-’85 synthesized 3 compounds in vitro
- Each compound exhibited cholestorol-inhibiting activity, but Sandoz shelved the compound for 2 years b/c
the level of activity was low
- In ’87, interest piqued again and tests yielded positive results
- In Dec. ’87, the most active compounds subjected to in vitro testing
- In Jan. ’88, Sandoz gave the compound an ‘A’ Rating == patentable
- Data gathering took until October,
o Fujikawa contends atty. Was spurred to file b/c a patent to the same subject matter had been issued
to 3rd party, Picard and there was a dispute w/ Fujikawa over that
- USPTO held that 15 mos. Between in vitro testing and filing were not sufficient to constitute concealment
- Fujikawa points to anomalies in the test data of the compound, which undercuts the reliability of the in vivo
tests – the ct. sides with the USPTO
- I: Concealment?
- H: No.
- It’s de novo review on this issue, b/c it’s a question of law
o But it requires evidence that the inventor intentionally delayed filing in order to prolong the period
during which the invention is maintained in secret
o
There’s also the issue of spurring – namely whether a dispute spurred someone to file can be
concealment, but the court does not address this issue, says no spurring could’ve occurred
City of Elizabeth v. American Nicholson Pavement Corp.
- Nicholson had put a test road surface of wooden slats on a publicly owned toll road, which many people
crossed it
- It was constructed at his own expense, he checked it daily made improvements, etc.
- It was used by the public for 6 yrs before he filed for the patent
- I: was Nicholson’s surface on sale or in public use for > 2 yrs., thereby giving it public use
- H: no, not in public use.
- R: Highways are in public use – there’s no other way to test the surface w/o letting the public use it – i.e. he
has to do this if he wants to research such a surface
- With machines, you can keep them secret, but obviously not in this case
- In the interest of the public and the inventor, the invention should be properly tested before a patented is
granted for it
Pfaff v. Wells Electronics –
- Pfaff invented a novel socket for microprocessors
- Began work in Nov. 1980
- April 9th, 1982, he files
- But of course, he can’t have sold it before Apr. 19, 1981
- Mar. 17, 1981, he shows his drawings to TI
- On Apr. 8, 1981, the confirmatory memo from TI
o Confirmatory memo’s are used in K law – not much of a surprise as to when the sale occurred then
- Goods were delivered July 1981
o So, you see the patent application occurred < 1 yr. after this date (approx. 9 mos.)
o From Pfaff’s perspective, the contract wasn’t really fulfilled until all the parts were delivered
- So, the argument is to go after novelty
o Either show it’s not novel, or show that Pfaff had forfeited the invention
o Could this be public use? He’s showing it to a big company?
 No. He’s not showing it to the public at large
 Just have to show a substantial amount to the public
o What other things might you have been doing with TI?
 You probably get an NDA so it’s protected as a trade secret
- At this time, there was a split in the circuits as to what constitutes on sale
o One circuit said it wasn’t on sale until it was on the shelf
o The reasoning was: what if the K failed? Then you’re screwed
- But on the other hand, you might be getting advances and the publisher / manufacturer might delay the sale
o Or perhaps you get extra rounds of financing
o Soo, at the end of the day, it’s not when the K was formed, but when it was performed
- TI commissioned a bunch of them, he had the plans sent to a manufacturer, but didn’t get them back for > 1
yr. after he had created the drawing of the device, AND he marketed the invention to vendors
- Wells created a copy, basically, and Wells said that he had
- The Test (2 parts): see p. 297
o (1) The product must be the subject of a commercial offer for sale
 Note that it has to be specific enough to be an offer
o (2) The invention must be ready for patenting – can be satisfied by:
 Either reduction to practice or by proof that prior to the date of application, the inventor had
produced drawings etc. specific enough to show how the invention worked
Non-obviousness Requirement
- Eve though something’s new, it may not be patentable if it’s not sufficiently innovative
- Consider e.g. the snuglet – is something like this non-obvious?
o There are things that are non-obvious, like materials, etc.
- Codified by Congess
- First case dealing w/ this is Graham v. Deere
Graham v. Deere
- There was a plow and a prior art plow
- You’re supposed to determine through the prior art whether the invention was obvious or not
- This case gets cited a lot in other cases from a philosophy standpoint
-
Gets cited in novelty, licensing cases
The court really re-enforced the statutes
Top of p. 302 – the test of non-obviousness:
o It’s a mixed question of law & fact
o Under § 103, you first have to figure out the scope and content of prior art
o (2) Next, identify the differences between the prior art and the claims at issue
 Under novelty, you’re looking at the similarities – is there something in the prior art that’s
identical to this invention?
 If yes, the this invention is not novel
o Non-obviousness: look at the invention and prior art and determine the differences
 E.g. Snuggie: blanket w/ sleeves, not really like a sweater
 Or in Graham v. Deere the flex arms are on opposite sides of the plow
o (3) identify the level of ordinary skill in the pertinent art –
 Sometimes referred to as the PHOSITA std.
 Person Having Ordinary Skill In The Art
 Similar to the reasonable person std. – but they’re from a technical field
o Who would be a person having ordinary skill in the snuggie? Someone in fashion?
-
The TSM approach
Teach, suggest motivate – found in the KSR case
Perhaps there’s something that suggests or teaches you how to do something and it’s in the prior art, then not
going to fly under non-obviousness
If you challenge under non-obviousness, the challenger had to find something in the prior art that either
taught, suggested or motivated.
If they failed to show this, they failed to show it was obvious
o You have to articulate why this invention becomes obvious
Examples:
o Say a trash bag w/ a jack o’lantern
o What’s the prior art? There’s lots of prior arts in the crafts area with jack o’lanterns
o And lots of garbage bags that have the gusseting and resistance that would form it into a shape
o Bottom line: no combination of the two in prior art – so TSM satisfied
o But a lot of controversy over the TSM test
-
KSR
-
dealt w/ gas pedals on automobiles; could come up or move back to accommodate someone based on their
height
And the gas pedal also has to adjust the amt. of pressure required to push the pedal
The patent Teleflex had wasn’t a retractable version of the pedal, it used electronic sensors
Is this something that would be deemed non-obvious? The District ct. said it was obvious
The Fed. Cir. Reversed, saying that TSM test did not indicate prior art
So, the Supreme Ct. granted cert.
o They said, look at it a bit more common-sensically
o Don’t’ look at TSM so mechanically, sometimes the patent examiner or the court might have their
own common sense
o And PHOSITA’s common sense might be at play here
o To challenge, might need to show why it was a difficult thing to do, others have tried and failed
Enabled
- What you claim is something you also describe in your patent
- In consolidated electric, Edison was being sued for infringing on the light bulb
- The patent in the case involved filaments made from any fibrous or carbonous material
o But the inventor hadn’t shown these materials actually worked in the bulb
- You have to describe and tell others what your invention does, basically