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Intellectual Property Law FALL 2012 GHOSH, GRUNER & REIS 1. TRADE SECRETS 1.1 Is it a trade secret? 1.1.1 Definition. A formula, process, device or other business info that is kept confidential to maintain an advantage over competitors. (No federal statute and no formalities.) 1.1.2 Factors to be Considered in Determining Trade Secret Status. To determine if something is a trade secret, courts will consider: 1) how widely the information is known outside Ps business, 2) who within Ps company knows the information, 3) whether P has taken reasonable measures to ensure the information remains secret, 4) how difficult it would be for others to legally acquire or duplicate the information, 5) whether the information gives P a commercial, competitive advantage over others, and 6) how much effort or money P expended in developing and acquiring the information. 1.1.3 Term. Perpetual if use and privacy continues. 1.1.4 UTSA v. Restatements 1.1.4.1 The Uniform Trade Secrets Act does not limit trade secret status to info or idea used continuously in the πs business. (The Restatement does). 1.2 Elements: (1) Information; (2) Value Through Secrecy; (3) Reasonable Efforts of Protection 1.2.1 Information. 1.2.1.1 DeGiorgio v. Megabyte International. Under Trade Secrets Act, only tangible lists of customers and suppliers are property of employer and warrant protection as trade secrets. Appellants were effectively enjoined from utilizing personal knowledge of customer lists and vendor information b/c they contained the identities of actual customers and vendors and specific information concerning them. The information on the lists also was not readily ascertainable from any source other than original business records. 1.2.2 That derives actual or potential economic value from the fact that it is not known or readily ascertainable by others 1.2.2.1 Buffets v. Klinke. Buffet restaurant chain's recipes lacked requisite novelty and economic value to be entitled to trade secret protection under Washington law; although chain's recipes were more detailed than those of competitors, they had their origins in well-known American cuisine and could be easily discovered by others. 1.2.3 Is subject to reasonable efforts to maintain its secrecy. 1.2.3.1 Buffets v. Klinke. An owner of a trade secret must take reasonable efforts to maintain its secrecy through such methods as use of confidentiality agreements and technological and physical protections. As with reasonableness standards in many other fields, courts will look to all the surrounding facts and circumstances to determine whether a trade secret owner has protected her trade secret. 1.2.3.2 Factors for Reasonable Efforts. (Learning Curve) 1.2.3.2.1 The extent to which the information is known outside of the plaintiff's business;

Intellectual Property Law Outline

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Page 1: Intellectual Property Law Outline

Intellectual Property LawFALL 2012

GHOSH, GRUNER & REIS

I. TRADE SECRETS

A. Is it a trade secret?1. Definition. A formula, process, device or other business info that is kept confidential to maintain an advantage over competitors. (No federal statute and no formalities.)2. Factors to be Considered in Determining Trade Secret Status. To determine if something is a trade secret, courts will consider: 1) how widely the information is known outside Ps business, 2) who within Ps company knows the information, 3) whether P has taken reasonable measures to ensure the information remains secret, 4) how difficult it would be for others to legally acquire or duplicate the information, 5) whether the information gives P a commercial, competitive advantage over others, and 6) how much effort or money P expended in developing and acquiring the information. 3. Term. Perpetual if use and privacy continues.4. UTSA v. Restatements

a) The Uniform Trade Secrets Act does not limit trade secret status to info or idea used continuously in the πs business. (The Restatement does).

B. Elements: (1) Information; (2) Value Through Secrecy; (3) Reasonable Efforts of Protection1. Information.

a) DeGiorgio v. Megabyte International. Under Trade Secrets Act, only tangible lists of customers and suppliers are property of employer and warrant protection as trade secrets. Appellants were effectively enjoined from utilizing personal knowledge of customer lists and vendor information b/c they contained the identities of actual customers and vendors and specific information concerning them. The information on the lists also was not readily ascertainable from any source other than original business records.

2. That derives actual or potential economic value from the fact that it is not known or readily ascertainable by othersa) Buffets v. Klinke. Buffet restaurant chain's recipes lacked requisite novelty and economic value to be entitled

to trade secret protection under Washington law; although chain's recipes were more detailed than those of competitors, they had their origins in well-known American cuisine and could be easily discovered by others.

3. Is subject to reasonable efforts to maintain its secrecy. a) Buffets v. Klinke. An owner of a trade secret must take reasonable efforts to maintain its secrecy through such

methods as use of confidentiality agreements and technological and physical protections. As with reasonableness standards in many other fields, courts will look to all the surrounding facts and circumstances to determine whether a trade secret owner has protected her trade secret.

b) Factors for Reasonable Efforts. (Learning Curve)(1) The extent to which the information is known outside of the plaintiff's business; (2) The extent to which the information is known by employees and others involved in the π's business; (3) The extent of measures taken by the plaintiff to guard the secrecy of the information;(4) The value of the information to the plaintiff's business and to its competitors;(5) The amount of time, effort and money expended by the plaintiff in developing the information; and(6) The ease or difficulty with which the info could be properly acquired or duplicated by others.

C. Use and Disclosure by Employees and Former Employees (also considered a reasonable effort of TS protection)Employers typically require certain employees to sign agreements promising not to disclose confidential information and not to compete with the employer after leaving the job.1. Covenants Not to Compete. Covenants not to compete restrict an employee’s ability to earn a living and are strictly scrutinized by courts to ensure they are reasonable in regard to time, scope and subject matter.

a) Courts are unlikely to enforce covenants not to compete b/c they are against public policy. Courts will hesitate to enforce the agreements unless (1) it is reasonably necessary to protect the employer, (2) the agreement is reasonable as to the time and geographical area, (3) the restrictions are not harmful to the general public, and (4) the restrictions are not unreasonably burdensome to the employee.

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2. Non-disclosure Agreements. An employer and employee may expressly agree that the employee will not disclose the employer’s TS or that an employee will assign all his inventions in advance to the employer.3. In Absence of Express Agreement. Trade secrets can be protected even in the absence of written agreement if parties have a relationship of trust and confidence with each other, as in the case in the employer-employee relationship. An employee owes a duty of confidentiality to his employer, which prohibits him from using or disclosing TS that the employer discloses to him w/i the scope of his employment.4. Inevitable Disclosure. Under this doctrine, adopted by some jurisdictions, the court will enjoin former employee from taking a new position if: (1) the former employee knows Ps trade secrets, (2) the employee’s new job duties are so similar to those of the former position that it would be difficult not to rely on those trade secrets, and (3) the former employee cannot be relied on to avoid using the trade secrets.

D. Actionable Misappropriation1. Breach of Confidence . If ∆’s unauthorized disclosure of a trade secret was in breach of confidence, then it is actionable. A duty of confidentiality requires ∆ to refrain from disclosing the secret w/o permission. This duty arises when the parties are in a special relationship (can be implied relationship of trust and confidence) and the receiver of the TS has knowledge that the giver intended the TS to remain secret. The parties can also create a duty by express or implied contractual agreement. (Smith v. Dravo)2. Acquired through Improper Means. B will be liable for disclosure or use of As trade secret if she acquired the trade secret through improper means. This includes illegal conduct and conduct which is below generally accepted standards of commercial morality. (E.I. DuPont)

Acquisition, disclosure, or use of a trade secret w/ notice that provider acquired it through improper means: If X acquires Ys trade secret through improper means and gives it to Z, Z will be liable for subsequent disclosure if he has notice that it was a trade secret and was obtained through improper means. (E.I. DuPont)

3. The effect of ∆s modification of πs trade secret. The fact that ∆ modified or improved π’s TS before using or disclosing it will not relieve ∆ from liability as long as π can show the info ∆ used or disclosed was substantially derived from πs TS. (Mangren Research)

Note: In a non-UTSA state, a ∆ does not have to engage in illegal conduct or commit a specific wrong in the course of obtaining a trade secret. Misappropriation is the acquisition of a trade secret by any improper means, whether or not those means are illegal. (E.I. DuPont)

E. Proper Means of Acquiring a Trade Secret (Defenses to Misappropriation)Trade secrets do not enjoy absolute monopoly protection afforded patented processes, and trade secrets will lose their character as private property when owner divulges them or when they are discovered through proper means.1. *Honest Discoverer. A competitor who has expended effort to independently discover the trade secret should not be held liable for his honest efforts. No defense to say that the trade secret could have been developed independently. The ∆ must have actually uncovered the trade secret thru his efforts. (Boeing Co. v. Sierrain Corp). It is no defense to say that the trade secret could have been developed independently. The ∆ must have actually uncovered the trade secret thru his efforts. (Boeing Co. v. Sierrain)2. *Reverse Engineering. Reverse engineering is “starting with the known product and working backward to find the method by which it was developed.” A lock purchaser's own reverse engineering of his own lock, and subsequent publication of serial number-key code correlation is an independent invention and reverse engineering expressly allowed by trade secret doctrine. Further, Defendant's procurement of individual locksmiths' reverse engineering data with respect to lock company's tubular locks was not “improper means” under California trade secret law; lock owners did not owe a duty to lock company to prevent disclosure of data. (Chicago Lock v. Fanberg)3. Innocent Wrongful User . “The discoverer of a new process or trade secret . . . has no exclusive right to it against . . . one who in good faith acquires knowledge of it without breach of contract or of a confidential relationship with the discoverer.” (Speedry Chemical Products v. Carter’s Ink)

a) Exceptions. A competitor who innocently hires an employee of a TS owner cannot be liable for trade secret misappropriation but the departing employee can be liable.

b) Misappropriation liability attaches after the receipt of notice. Notice given by a trade secret owner to a person engaging in innocent wrongful use of a trade secret can ensure subsequent protections against further use of the trade secret.

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4. *Independent invention. These are complete defenses to trade secret misappropriation.F. Remedies (UTSA)

1. Injunction. Injunctions and payment of “reasonably royalties” serve to make the injured parties whole.2. Damages. Punitive measures like recovery for “unjust enrichment” and exemplary damages for “willful and malicious” misappropriation are aimed at discouraging would be wrongdoers.3. Attorney’s Fees. If (i) a claim of misappropriation is made in bad faith, (ii) a motion to terminate an injunction is made or resisted in bad faith, or (iii) willful and malicious misappropriation exists, the court may award reasonable attorney's fees to the prevailing party. {UTSA §4]

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II. COPYRIGHT LAW [17 USC §102]A. Purpose and Nature

1. Statutory definition . The ’76 Act provides that copyright subsists in “original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced or otherwise communicated, either directly or with the aid of a machine or device.” 2. Nature of copyright law . The ultimate purpose of copyright law is to stimulate the creation and dissemination of as many works of authorship as possible, in order to benefit the public. It does this by giving creators of works limited rights in their works. © protection is limited to an author’s particular method of expressing an idea. © never gives rights in the idea being expressed, or in facts or other elements of the public domain which may be incorporated into the work.3. The Public Domain . The public domain is the priceless repository of works that are ineligible for copyright, were created before copyright law existed, have had their copyrights expire, or have been freely given to the public by their authors. (Edlred v. Ashcroft)4. Terms

a) 1976 Act. Term life of the author + 70 yrs (was originally +50 years until 1998, Sonny Bono Extension)b) 1909 Act. 28 yrs + 67 yrs (if renewed) (was +47 years until 1992 Amend. allowed auto renewal of 28 yrs.)c) Works for Hire (and pseudonymous and anonymous works). 95 years from publication or 120 years from

creation (whichever expires first)

B. Copyright Requirements1. Subject matter is within purview of copyright . The protectable works + originality + fixation.2. Originality requirement . Work of authorship must be original. Originality requires independent creation/intellectual endeavor plus a modicum of creativity. The requisite level of creativity is extremely low; even a slight amount will suffice. (Feist Publications v. Rural Telephone Services)3. Fixation requirement . Federal copyright attaches to the intangible work of authorship, not the physical manifestation of it. Fixation can take many forms. §101 provides that a work is fixed in a tangible medium of expression “when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.” 4. Exclusion of ideas, procedures and processes . © protection never gives rights in ideas, procedures, processes, systems, methods of operation, concepts, principles or discoveries. When use of an idea requires copying π’s expression, the expression is not protected.

a) You can’t copyright a system. Any author may explain the truths of a science or the methods of an art that are the property of the entire world and get a copyright in the work, i.e., book containing a system can be copyrighted but the system itself cannot be copyrighted. (Baker v. Selden)

b) Facts aren’t copyrightable but compilations of facts can be. (Fiest Publications v. Rural Telephone Service)c) Something that’s copyrighted can contain both elements that are copyrightable and those that aren’t. So

people can use the unprotected stuff. A combination of unprotectable elements is eligible for copyright protection only if those elements are numerous enough and their selection and arrangement original enough that their combo constitutes an original work of authorship. (Satava v. Lowry)

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5. Copyright Formalities . a) The 1976 Copyright Act removed the formal requirements of registration, publication, and notice to obtain

copyright protection.b) Now. © is created as soon as a work is fixed in a tangible medium of expression that can be perceived by

human device or machine. However, timely registration is still required in order to bring a suit for copyright infringement and to obtain statutory remedies and attorney’s fees.

C. Things That Can’t be Copyrighted1. Exclusion of ideas, procedures and processes . © protection never gives rights in ideas, procedures, processes, systems, methods of operation, concepts, principles or discoveries. When use of an idea requires copying π’s expression, the expression is not protected.

a) You can’t copyright a system. Any author may explain the truths of a science or the methods of an art that are the property of the entire world and get a copyright in the work, i.e., book containing a system can be copyrighted but the system itself cannot be copyrighted. (Baker v. Selden)

b) Facts aren’t copyrightable but compilations of facts can be. (Fiest Publications v. Rural Telephone Service)c) Something that’s copyrighted can contain both elements that are copyrightable and those that aren’t. So

people can use the unprotected stuff. A combination of unprotectable elements is eligible for copyright protection only if those elements are numerous enough and their selection and arrangement original enough that their combo constitutes an original work of authorship. (Satava v. Lowry)

2. Merger Doctrine . When subject matter of a work is so narrow that there are only a limited number of ways to express it, there may be no copyright in any one form of expressing it. To provide otherwise might enable a person to have a monopoly in the subject matter, or idea, by obtaining all the alternative forms of expressing it.3. Scenes a faire . An author may not obtain copyright in scenes a faire: incidents, characters, settings, or other elements which are indispensable in the treatment of a given topic.

D. Categories of Protectable Works of Authorship 17 USC §102(a)“Works of authorship” include: literary works, musical works, dramatic works, pantomines and choreographic works, pictorial, graphic and sculptural works, motion pictures and audiovisual works, sound recordings and architectural works. Not exclusive. (17 USC §102)

1. Pictorial, Graphic & Sculptural . These include two-dimensional and three-dimensional works of fine, graphic and applied photographs, prints and art reproductions, maps, globes, charts, diagrams, models, technical drawings, etc.

a) Not Utilitarian Aspects. Such works shall include works of artistic craftsmanship insofar as their form but not their mechanical or utilitarian aspects are concerned; the design of a useful article shall be considered a pictorial, graphic, or sculptural work only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.

b) Useful Article. A “useful article” is an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information. (Pivot Point)

c) Separability . Pictorial, graphic and sculptural features of useful articles may be copyrighted if they are physically or conceptually separable from the utilitarian aspects of the useful article.

(1) The test is if the design features were significantly influenced by utilitarian considerations, then the features are inextricably intertwined with the function and are not copyrightable. If the design features weren’t influenced by utilitarian functions of the article, but merely for aesthetic reasons, the design features are copyrightable. (Brandir International v. Cascade Pacific Lumber)

(2) Examples. (Pivot Point)(1) Ornamental belt buckles. Copyrightable - The primary ornamental aspects of the buckles is conceptually separable from their subsidiary utilitarian function. The buckles are art.(2) Clothing display torsos. Not copyrightable – to the extent the forms possess aesthetically pleasing features, even when these features are considered in the aggregate, they cannot be conceptualized as existing independently of their utilitarian function.(3) Ribbon bicycle rack. Not copyrightable. It was, in its final form, essentially a product of industrial design.

2. Software – Computer programs . The ’76 Act expressly protects computer programs, which it defines as “a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result.”

a) Generally. Computer programs are copyrightable as literary works. If pictorial or graphic authorship predominates, the computer program may be copyrightable as pictorial or graphic works.

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(1) Computer programs are usually task-oriented, performing very specific tasks and utilitarian functions but also may include literary expression. A computer program is copied onto a computer every time it is used. Section 117 provides that it is not an infringement for the owner of a program to make an additional copy of the program for use or as an archival or backup copy.

(2) Revisions. Section 117 also authorizes modifications to create new variations of play for personal enjoyment. Program revisions and modifications are copyrightable as derivative works. Each separately published version of a computer program should be separately registered, assuming each contains a sufficient amount of new or revised authorship to sustain a claim of copyright.

(3) Computer languages are written in specialized alphanumeric languages (e.g., Basic, C or Java), called source code, that are human-readable. Must be translated into machine-readable object code, consisting of only two symbols, 0 and 1. Object code is not readable by humans. Both source code and object code are copyrightable.

b) Computer Programs & Trade Secrets. © law compliments trade secret law in protecting software. (1) When depositing a computer program source code with the Library of Congress, you deposit the first

25 pages and the last 25 pages. (2) If it contains trade secrets, then you can redact the trade secrets from the source code.

c) Determining Infringement Of.(1) Computer program code contains literal and non-literal elements. Software is considered a literary

work for the purposes of copyright law, and non-literal elements of literary works are protected under copyright. As such, non-literal elements of program code are also protected. In order to determine the extent of protection for non-literal elements, it is important to determine where to draw the line between expression (copyrighted) & idea. (Because © protects the expression of an idea but not the idea itself.) The A/F/C test is one way of drawing that line for computer programs.

(2) Abstraction/Filtration/Comparison. Court will abstract or dissect the allegedly infringed program’s structure, filter out the unprotectable elements (such as processes, facts, merger material, and scenes a faire), and then compare the remaining protectable elements of the two works to determine substantial similarity and whether infringement exists. (Computer Associates v. Altai)

d) Video Games. Certain elements of video games, such as a sequence of sounds and images, are copyrightable as audiovisual works apart from the underlying computer program.

3. Architectural Works .a) Definition. The design of a building as embodied in any tangible medium of expression, including a building,

architectural plans, or drawings. The work includes the overall form as well as the arrangement & composition of spaces & elements in the design, but doesn’t include individual standard features.

(1) “Building, architectural plans, drawings” – encompasses building design(2) “Overall form, arrangement and composition of spaces and elements” – Takes the form of selection,

coordination, arrangement of unprotectable elements into an original, protectable whole. Interior architecture can be protect.

(3) Does not include standard features- common windows, doors and other staple components are not protected.

b) General.(1) Before 1990, architectural works were only protected by pictorial, graphic and pictorial works,

§102(a)(5). Now, protected by §102(a)(8) as well.(2) So architects can receive two levels of protection for their works: one for the design of a building as

embodied in buildings, architectural plans, or drawings under §102(a)(8) and one for diagrams, models, and technical drawings themselves under §102(a)(5).

(3) Does not include bridges, tents or mobile homes.(4) There is no separability test for architectural works.

c) §120(a). Scope of exclusive rights in architectural works. (1) Pictorial Representations Permitted. The copyright in an architectural work that has been constructed

does not include the right to prevent the making, distributing, or public display of pictures, paintings, photographs, or other pictorial representations of the work, if the building in which the work is embodied is located in or ordinarily visible from a public place.

d) Infringement & Substantial Similarity (Vermont Timber Works). (1) Under the Copyright Act, “one infringes when he or she violates one of the exclusive rights to a work

held by a copyright owner.” To establish infringement, one of the elements that must be proven is “copying of constituent elements of the work that are original.” Copying may be shown to be “so extensive that it render[s] the infringing and copyrighted works ‘substantially’ similar”.

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(2) Substantial similarity can be measured by the “ordinary observer” test. As such, 2 works will be said to be substantially similar if a reasonable, ordinary observer, upon examination of the 2 works, would “conclude that the ∆ unlawfully appropriated the π’s protectable expression. The 2 works need not be exact copies to be substantially similar.

(3) If substantial similarity of the works, burden of proof shifts to ∆ to show independent creation.E. Derivative Works

1. Definition (§101). A work based upon one or more pre-existing works . . . when a work is recasted, transformed or adapted. (Note. To constitute a separately ©able derivative work, an adaptation must contain substantial, not merely trivial, variations.)2. Common Forms (§101). A translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form. 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”.

a) Note. © in a “new version” covers only the material added by the later author, and has no effect one way or the other on the copyright or public domain status of the preexisting material.

3. Originality Requirement. For © protection to attach to a later, allegedly derivative work, it must display some originality of its own. It cannot be an uncreative variation on the earlier, underlying work.

a) The latter work must contain sufficient new expression, over and above that embodied in the earlier work for the latter work to satisfy copyright law’s requirement of originality.

b) Derivative works require a higher level of originality in order to be able to distinguish between what’s the first work and what’s the attached work.

4. Permission. In order to make a derivative work, you have to get the permission of the person that owns it if they still have the copyright. However, you do not need that person’s permission to then copyright your derivative work.

a) However, if it’s in the public domain, if you’re the author of the work, etc.b) Public domain illustrations. If a song goes into the public domain, someone can remaster it. If “Bad” CD goes

into the public domain, someone could add new liner notes and copyright that new version as a new sound recording. However, the copyright in the derivative work has no effect on the copyright of the underlying work.

5. Illustration. There’s A, B and C. If you can’t tell whether C came from B or A, then B is not distinguishable enough from A to be a copyrightable derivative work.6. Distinguished from Compilations.

a) A compilation results from a process of selecting, bringing together, organizing, and arranging previously existing material of all kinds, regardless of whether the individual items in the material have been or ever could have been subject to ©.

b) A derivative work requires a process of recasting, transforming or adapting “one or more preexisting works.” And that preexisting work has to be ©able regardless of whether or not it was copyrightable.

F. Ownership of Copyright1. Works for Hire . If a work is “made for hire”, the employer or other person who ordered and financed the work is deemed the author for copyright purposes and is the initial owner of the copyright.

a) There are two ways for a work to be a “work for hire”: (1) It is prepared by an employee in the scope of his employment , or

(1) Factors/considerations to determine if an employee/employer relationship exists:(i) right to control manner and means of work(ii) skills required(iii) source of instrumentalities and tools(iv) location of work(v) duration of the relationship b/t the parties (CCNV v. Reid)

(2) Doesn’t have to have a written contract.(2) Works created by independent contractors may be works for hire if

(1) It is one of nine enumerated categories of work, and (2) The parties have expressly agreed in a written document that the work will be considered “work for hire.”

(i) Enumerated categories of work: 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…

b) Term. 95 years from publication or 120 years from creation, the first to expire. c) Note.

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(1) Freelance work is not considered a work for hire because (a) it’s not an employee-employer relationship unless (b) there was a commissioned work with a contract/something in writing.

(2) Works that would ordinarily be considered those of an independent contractor or outside the scope of employment can by contractual agreement be treated as “works for hire.” [Casebook] Otherwise, independent contractor work is not a word for hire. (CCNV v. Reid)

2. Joint Authorship .a) Definition. A work prepared by two or more authors with the intention that their contributions be merged into

inseparable or interdependent parts of a unitary whole. (17 U.S.C. §101)(1) Both authors have to make independent copyrightable contributions; they have to contribute

distinguishable work to the copyrightable item.(2) “Ideas, refinements and suggestions standing alone are not the subjects of copyright.” (Maurizo v.

Goldsmith)(3) A one word change, e.g., changing “burgundy” to “red” is not sufficient enough to be an independent

copyrightable contribution. It’s just a refinement. b) Second Circuit Test for Joint Work. A joint authorship exists if each putative co-author has

(1) intended at the time of creation to be a co-author, and(2) made independently copyrightable contributions to the work.

c) As a joint work…(1) Each author has a copyright in the whole work.(2) The co-authors have duties to each other. They share proceeds and owe a duty of accounting to each

other. d) Derivative rights. While one co-author has the right to revise a joint work in order to create a individual

derivative work, the other co-author acquires no property rights in the newly created work prepared without his or her involvement. Thus, joint authorship in a prior work is insufficient to make one a joint-author of a derivative work.

3. Transfer of Ownership . a) The ownership of a copyright may be transferred in whole or in part by any means of conveyance. Can also be

bequeathed by will or pass as personal property by intestate succession. 17 USC §201(d).b) Must be in writing and signed by the owner of the rights conveyed or such owner’s duly authorized agent. 17

USC §204(a).c) Include Assignments and Exclusive Licenses. An exclusive license effectively conveys parts of the copyright

holder’s rights to licensee, so it is treated as a transfer of ownership. Has to be in writing.(1) A gives B the exclusive right to make copies of A’s book.(2) A gives B the exclusive right to sell copies of A’s book in Clarksville, TN(3) Note! If you make an exclusive grant, you are even excluding yourself. The author, his or herself, is

excluded from making that use.d) Termination of Transfer.

(1) 1909. 28 years from the date of copyright. 1 year window in which to do the termination.(2) 1976. 35 years from the date of transfer. 5 year window in which to do the termination.

e) A non-exclusive license is not a transfer of copyright ownership. (1) By contrast, a nonexclusive license effectively says “I authorize you to do the following, but I can turn

around and authorize someone else to do it as well.”(2) The key is whether the copyright owner retains the ability to grant similar licenses to others… if so, it

would be considered a nonexclusive license.(3) Ex. Letting a record store play the song in the store.

4. Compilations . Compilations are works formed by collecting and assembling preexisting materials or data (an arrangement of preexisting facts or data).

a) A “compilation” is a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship. The term “compilation” includes collective works. [17 U.S.C. §101]

b) Copyrighting. Compilations are copyrightable. Choices such as selection and arrangement, so long as they are made independently by the compiler and entail a minimal degree of creativity. When copyrighting a compilation, the copyright only extends to the original elements of a compilation. (Feist)

c) Compilation can include parts that are not copyrighted.d) The author is the person that puts it together.

(1) If you contribute to the compilation, your status as a co-author depends on whether your contribution was copyrightable.

e) “Compilation” includes collective works.

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(1) Compilations that include collective works. Periodical issues, anthologies, etc. that compile a number of separate, independently copyrightable works.

(2) Compilations that are NOT collective works. Directories, catalogs, or databases that compile facts which are not separately copyrightable.

5. Collective Works . a) Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as

a whole, and vests initially in the author of the contribution. In the absence of an express transfer of the copyright or of any rights under it, the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work and any later collective work in the same series. [17 USC §201(c)]

b) So in the absence of a writing to the contrary, the author of a collective work will have the following privileges: (1) privilege to reproduce and distribute the individual contributions as part of the collective work, (2) the privilege to reproduce the individual contributions as part of later revisions, (3) privilege to reproduce the individual contributions in a later work of the same series.

c) Owner of a copyright in collective work is presumed to have acquired only the reproducing and distribution rights.

6. Compilations v. Derivative Works. Some overlap between the two but they represent different concepts. The individual items in a compilation do not have to be subject to ©. The preexisting works on which derivative works are base must themselves come within the general §102 subject matter of © regardless of whether it is/was ©ed.

G. Rights Afforded by Copyright1. Exclusive rights of copyright [17 USC §106] . Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

a) To reproduce the copyrighted work in copies or phonorecords;b) To prepare derivative works based upon the copyrighted work;c) To distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of

ownership, or by rental, lease, or lending;d) In the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and

other audiovisual works, to perform the copyrighted work publicly;e) In the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or

sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

f) In the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.

2. Moral rights in works of visual art . Moral rights are rights of creators of copyrighted works. a) Types. They include the right of attribution, the right to have a work published anonymously or

pseudonymously, and the right to the integrity of the work, and the right to disclosure.(1) Attribution. The right of an artist to have his work attributed to him in the form in which the artist

created it. Almost two fold: get attribution to your work and to NOT get attribution to the work you didn’t create.

(2) Integrity. The preserving of the integrity of the work bars the work from alteration, distortion, or mutilation.

(3) Disclosure. Right to decide when and whether a work will be published.(4) Others (not in U.S.): following rights (right to resale royalties); right to respond to criticisms; right of

withdraw, etc.b) Notes. Moral rights die with the author. They are viewed as a natural right (Europe). But in the U.S. it’s more

based on the philosophy of economics.3. VARA Protections. VARA was the first federal copyright legislation to grant protection to moral rights. Under VARA, works of art that meet certain requirements afford their authors additional rights in the works, regardless of any subsequent physical ownership of the work itself, or regardless of who holds the copyright to the work. Set forth in §106A of the Copyright Act.

a) Ex. A painter may insist on proper attribution of his painting and in some instances may sue the owner of the physical painting for destroying the painting even if the owner of the painting lawfully owned it.

b) Before VARA, the U.S. position was that U.S. Law already provided moral right protections req’d by the Berne Convention.

(1) Distortion of a work §106(2) derivative works(2) Distortion of a work violating license contract law(3) Misattribution of authorship trademark law; false advertising

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(4) Misattribution /distortion that harmed author’s reputation slander/libel; defamation or unfair competition.

c) Integrated Art. A work that is comprised of two or more physical objects that must be presented together as the artist intended for the work to retain its meaning and integrity.

(1) Protected by VARA (but exception regarding site-specific art)(2) Ex. If a piece of seaweed breaks off of a sea-themed sculpture, it could still be an integrated work if

the author thinks/feels the work still retains its meaning and integrity. It hinges on the artist’s intent.(3) Site-specific Art. Site-specific art, a subset of an integrated art, is artwork created to exist in a certain

place.(1) VARA does not protect location as a component of site-specific work. VARA covered works that can be moved as long as the move does not constitute "destruction, distortion, or mutilation." (Phillips v. Pembroke) (2) Typically, the artist takes the location into account while planning and creating the artwork. The location of the art is one of the component physical objects. To remove a work of site-specific art from its original site is to destroy it. (3) Compared to plop art. Where a separately conceived art object is simply placed in a space.

d) Attribution and Integrity. Rights of attribution and integrity. Subject to §107 and independent of the exclusive rights provided in section 106, the author of a work of visual art shall have the right to prevent any intentional distortion, mutilation, or other modification of that work which would be prejudicial to his or her honor or reputation, and any intentional distortion, mutilation, or modification of that work is a violation of that right. [17 U.S.C. 106A]

(1) Exceptions. The modifications of a work of visual art which is a result of the passage of time or the inherent nature of the materials is not a distortion, mutilation, or other modification.

(2) The modification of a work of visual art which is the result of conservation, or of the public presentation, including lighting and placement, of the work is not a destruction, distortion, mutilation, or other modification unless the modification is caused by gross negligence.

(3) Ex. Taking a signature off of a painting would affect the painter’s attribution. H. Infringement. π to show [1] Ownership of ©; [2] Unlawful copying; [3] Substantial similarity b/t items; [4] Access

1. Ownership of Valid Copyright . Easiest way to prove is to have a copyright registration. This serves as prima facie evidence that there is a valid copyright. Prima facie evidence flips the burden of proof from the π to the ∆. ∆ must then prove independent creation.2. Unlawful Copying . Copying the copyrightable elements of a work w/o owner’s permission or w/o the safety of one of the exceptions.

a) π must show ∆’s “actually copied” the item. b) Actual copying may be established by direct or indirect evidence.

3. Substantial similarity between the two objects . Substantially similar means an "ordinary observer, unless she set out to detect the disparities, would be disposed to overlook them, and regard the aesthetic appeal as the same." Courts need to consider the "total concept and feel" of the two works. (Boisson v. Banian)

a) The key is whether identifiable protected elements have been copied by the ∆.b) Viewed from the perspective of the ordinary observer. Generally, an allegedly infringing work is considered

substantially similar to a copyrighted work if “the ordinary observer unless he set out to detect the differences, would be disposed to overlook them, and regard their aesthetic appeal as the same.” (Boisson)

c) Where the work is targeted to a particular audience, the fact finder may consider whether that audience would find the works substantially similar.

4. Access . Must prove a party may have somehow known or could’ve known about the work/item that he or she copied.a) Direct. When you can prove someone saw, heard or had a copy of the work.b) Inferred/Indirect. Where the ∆’s access is inferred b/c of the wide dissemination of the work or that a party

had a reasonable possibility of viewing that prior work.5. Other infringements .

a) Vicarious liability . Alleged secondary infringer gets some benefit from the primary infringer’s action + they had the ability to control it. May be found whenever ∆ has the right and ability to control or supervise the direct infringer and a direct financial interest in the infringement.

b) Contributory infringement . Knowledge of infringement + participation in it in some manner. One who knowingly induces, causes or materially contributes to the infringing conduct of another is liable for contributory infringement.

(1) Two elements must be demonstrated: (1) ∆ must have known or have reason to know of the other person’s infringing activity, and (2) ∆ must actively participate by inducing, materially contributing to, or furthering the person’s directly infringing activity.

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(2) One will not be held liable for selling items that can be used to infringe if they have substantial non-infringing uses. Sony v. Universal

c) Willful Infringement . ∆ conduct can be considered willful if the ∆ had knowledge that his conduct represented infringement or perhaps recklessly disregarded the possibility. (Boisson)

(1) Innocent infringer. If the infringer was not aware and had no reason to be aware of the infringement, he can be declared an innocent infringer. (Boisson)

(2) An infringement that is not willful does not necessarily mean that the infringement is innocent and that the infringer is entitled to a reduction in damages.

I. Fair Use Doctrine and Other Limitations/Defenses1. Fair Use . Fair use used to be considered a right but with the 1976 Copyright Act it was applied by the court as a defense and limitation on copyrights.

a) The fair use of a copyrighted work (including reproduction in copies or phonorecords) for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is NOT an infringement of copyright. [17 USCS §107]

b) In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include— [codified in §107, concept came from Folsom v. Marsh]

(1) The purpose and character of the use , including whether such use is of a commercial nature or is for nonprofit educational purposes.

(1) Looks at at the nature and objects of the selections made. The inquiry here may be guided by the § 107 list, looking to whether the use is for criticism, comment or news reporting and the like. This is to investigate whether the new work merely “supersedes the objects” of the original creation or adds something new.(2) If the new work instead adds something new, with a further purpose or different character altering the first with new expression, meaning or message; it asks, in other words, whether and to what extent the new work is transformative.(3) Transformative factor. A derivative work is transformative if it uses a source work in completely new or unexpected ways. Importantly, a work may be transformative, and thus a fair use, even when all four of the statutory factors would traditionally weigh against fair use!

(2) The nature of the copyrighted work .(1) Looks at the value of the materials used. This factor calls for recognition that some works are closer to the core of intended copyright protection than others, with the consequence that fair use is more difficult to establish when the former works are copied.(2) Whether or not it’s a fictional or factual work. A song is a fictional work which would make the scale tip in the direction of unfair use.

(3) The amount and substantiality of the portion used in relation to the copyrighted work as a whole .(1) Amount. This is a quantitative analysis – how much was used?(2) Substantiality. This is a qualitative analysis – how important is this thing/part that we used?

(4) The effect of the use upon the potential market for or value of the copyrighted work .(1) This requires courts to consider not only the extent of market harm caused by the particular actions of the alleged infringer but also “whether unrestricted and widespread conduct of the sort engaged by the ∆ . . . would result in a substantially adverse impact on the potential market” for the original.

(5) Notes on the Factors. These criteria are relevant in determining whether the basic doctrine of fair use applies in a particular case.

(1) The four statutory fair use factors must be weighed together in light of the purposes of the ©. (Acuff-Rose) (2) Commercial use alone is not enough to find against fair use. The court must consider all four factors. (Acuff-Rose)

c) Notes. The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

2. Parody . A “literary or artistic work that imitates the characteristic style of an author or a work for comic effect or ridicule,” or as a “composition in prose or verse in which the characteristic turns of thought and phrase in an author or class of authors are imitated in such a ay as to make them appear ridiculous.” (Acuff-Rose)

a) Parodies are usually classified under the first factor looking to whether the use is for criticism or comment but “if the commentary has no critical bearing on the substance or style of the original composition . . . the claim to fairness in borrowing from another’s work diminishes accordingly and other factors, like the extent of its commerciality, loom larger.” (Acuff-Rose)

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b) Generally. It is the use of some elements of a prior author’s composition to create a new one that, at least in part, comments on that author’s work.

(1) The parodist’s work must conjure up the original to make social comment or criticism.(2) Generally, no more than is necessary to accomplish the parody may be taken.

c) Fair use & Parodies. Parodists often rely on the fair use defense. (1) Parody has to work its way through the relevant factors, and be judged case by case, in light of the

ends of copyright law. (Acuff-Rose) In a parody case, the second fair use factor (nature of the copyrighted work) is given little weight.

(2) When fair use is raised in defense of parody, a key question is whether a parodic character may reasonably be perceived.

(3) If parodist merely copies a work to make social comment on some other topic, fair use isnt available. 3. Other Fair Uses .

a) Intermediate Copying (and reverse engineering). The copying of a work in the act of reverse engineering. When the intermediate copying is “necessary” to gain access to the unprotected functional elements within a work, it lends itself to a finding of fair use. Copying of copyrighted materials is proper when directly related to securing access to unprotected materials and there are no other practical alternatives. (Sony v. Connectix)

b) Disassembly. Where disassembly is the only way to gain access to the ideas and functional elements embodied in a copyrighted computer program and where there is a legitimate reason for seeking such access, disassembly is a fair use of the copyrighted work, as matter of law. (Sega v. Accolade)

c) Time Shifting. The recording of programming to a storage medium to be viewed or listened to at a time more convenient to the consumer. Time shifting is a non-commercial use. Doesn’t decrease television viewership, so it did not have an effect on the potential market for the original work. (Sony v. Universal)

4. First Sale Doctrine . Once a copyright owner authorizes transfer of title to a copy, the transferee and his successors in interest are entitled to retransfer or otherwise dispose of that copy w/o returning to the copyright owner for authorization.

a) This is only valid for lawful copies. A person who acquires a pirated copy will infringe copyright by reselling it or otherwise distributing it to the public.

b) Ex. X buys a book and resells it to a used bookstore. No copyright violation b/c the copyright in the underlying work has no effect on the ownership rights of the chattel. BUT she would not be able to make copies of the book and resell those. Can also resell a painting.

J. Remedies: 17 USC § 5041. A © infringer shall be liable for either actual damages and profits or statutory damages. If a π proves willful infringement, the court has discretion to increase the statutory award.2. Possible remedies for copyright infringement include:

a) Injunctions . (Boisson)(1) Permanent injunctions where infringement has been found and there is a substantial likelihood of

future infringements. Once infringement has been found, permanent injunction against further infringement.

(2) Preliminary Injunctions. After a showing of harm and likelihood of success on the merits, prelim injunction granted. Courts are careful with prelim injunctions in regard to the potential harm to third parties. They don’t want parties not part of the lawsuit to be harmed by the injunction.

b) Impoundment and destruction of infringing items c) Damages . π must choose between actual and statutory damages.

(1) Actual damages = π’s loss + ∆’s gain(profits)(2) Statutory damages = $750 to $30,000 per infringement; can be as high as $150,000 for willful

infringement (particularly egregious) or as low as $200 for innocent infringer. (Only available if copyright was registered prior to the beginning of the infringement.)

(1) Factors. In exercising its discretion to determine the proper award, within the statutory range, a court looks at the π’s lost revenues, ∆’s profits, the value of the copyright and the deterrent effect of the award. (Boisson)

d) Court costs and attorneys’ fees (1) Available to the prevailing party; awarded at the discretion of the judge. (2) Prevailing party. A party need not be successful on all claims to be deemed the prevailing party. A

party can be deemed prevailing if it succeeds on a significant issue in litigation that achieves some benefits that the party sought in bringing suit. (Boisson)

(3) For π, only available if the copyright was registered prior to the infringement.3. NOTE. Court costs and attorney’s free and statutory damages are only available if copyright was registered prior to the beginning of the infringement. If you file your © after the infringement, you lose your ability to get statutory damages, court costs or atty fees.

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III. PATENTS [35 U.S.C. §101]A. General

1. Nuts & bolts. 1 of 3 types + appropriate subject matter + novelty + usefulness + nonobvious + disclosure = patentable2. Compared to Others. A patent grants the patent holder the exclusive right to prevent others from making, using or selling any patented invention within the U.S. and importing a patented invention. Patent owner can enjoin the making, using, selling or importing of an infringing invention even if it was independently created. (Unlike copyright protection).3. There is an underlying assumption in patent law that a period of exclusivity is necessary to balance the costs of innovation and commercial exploitation.4. Term. Period of exclusivity is 20 years from the filing date of a utility or plant patent, and 14 years from the date of the grant for design patents.5. History. Congress passed the first Patent Act in 1790, based in large part on English law. Three years later, the statute was replaced with a new act authored by Thomas Jefferson. Patent Act of 1952. Codified the ideas of “novelty” and “infringement.” Codified in Title 35 of the USC. Most significant revisions since 1952 law were enacted in 2011 with the Leahy-Smith America Invents Act (AIA)

B. Types of Patents1. Utility. May be granted to anyone who invents or discovers any new and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof.2. Design. May be granted to anyone who invents a new, original, and ornamental design for an article of manufacture.3. Plant. Maybe granted to anyone who invents or discovers & asexually reproduces any distinct & new variety of plant.

C. Subject Matter – patent eligibility inquiry1. §101 – Scope/Subject Matter. There are four independent categories of inventions or discoveries that are eligible for protection: process, machine, manufacture or composition of matter.2. Process. Method of doing something to produce a given result.

a) There are two categorical limitations on “process” patents under §101 that would bar an application: the machine-or-transformation test and the categorical exclusion of business method patents.

(1) Machine-or-transformation test. An invention is a process only if (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing. -- Not the sole test but a useful one for determining whether some claimed inventions are processes under § 101. (Bilski)

(2) Categorical exclusion of business methods. A conclusion that business methods are not patentable in any circumstances would be erroneous. (Bilski)

3. Machine. A device with moving parts that accomplishes a result, such as a sewing machine or a blender.4. Manufacture. Includes anything under the sun that is made by humans.5. Composition of Matter. A combination of two or more chemical or other substances into a product.

D. Novelty, Utility & Nonobviousness1. Novelty (not published or known to public, not found in “prior art”) §102(a) says that a patent must be denied if: (1) applicant’s invention was known by others in the US b/f the applicant, (2) the applicant’s invention was used by others b/f the applicant invented, (3) applicant’s invention was described in a printed publication in the US or a foreign country b/f the applicant invented, or (4) applicant’s invention was patented in the US or a foreign country b/f the applicant invented.

a) “Known by others.” To have been known by others in the US prior to applicant’s invention date, the invention must have been (1) reduced to practice, actually or constructively, or otherwise described in writing sufficiently to enable a person with ordinary skill in the art (POSITA) to make it w/ undue experimentation, and (2) accessible to the public.

(1) Actual public knowledge is not necessary to invalidate a patent. Does not require affirmative publicizing. Non-secret use in the ordinary course of business is public use. (Rosaire v. Baroid)

b) “Used by others.” To be used by others in the US prior to applicant’s invention date, the invention must have been (1) reduced to actual practice, and (2) used in a manner for which it was intended by its inventor, and (3) accessible to the public.

(1) The proponent of the publication bar must show that prior to the critical date the reference was sufficiently accessible, at least to the public interested in the art, so that such a one by examining the reference could make the claimed invention w/o further research or experimentation. (In Re Hall)

c) Described in a printed publication. To find a printed publication which anticipates an applicant’s invention, several considerations are relevant. (1) must have been printed (satisfied if it was reduced to a discernible, tangible, permanent form), (2) there must have been a publication (typically found if an interested American exercising reasonable diligence could obtain the information, and (3) the printed publication must have set forth sufficient information about the invention that a POSITA could make it w/o further experimentation.

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d) Deemed patented: In order for an invention to be anticipated by a prior patent under § 102(a), it must appear that: 1) the applicant’s invention was the actual subject of a patent monopoly, 2) the patent effectively granted rights in the invention b/f the §102(a) applicant invented, and 3) the patent disclosure was available to the public b/f the §102(a) applicant’s invention date.

2. Must be useful. Although usefulness is not a stringent standard, the invention must be of some benefit to society to be “useful.”

a) Unless and until a process is refined and developed to the point where specific benefit exists in currently available form, there is insufficient justification for permitting an applicant to engross what may prove to be a broad field. (Brenner v. Mason)

b) Reduce to practice. In order to reduce to practice you have to know the utility. You can't come back later and say that someone else later found a use for the invention. (Brenner)

3. Nonobvious . To qualify for a grant of patent, the invention must be nonobvious to those having ordinary skill in the field or art to which the subject matter pertains. Meaning, the invention must be sufficiently inventive and must be an adequate distance beyond and above the state of the art/prior art. [35 USC § 103, added in 1952]

a) Factors. “The scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved.”

b) Secondary considerations such as commercial success, long felt but unsolved needs, and failure of others as factors that might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented. (Graham v. John Deere)

c) PHOSITA. The person having ordinary skill in the art of patent law is comparable to the hypothetical reasonable person used to decide other legal issues. The emphasis is on ordinary. To determine ordinary skill, one must take into account several factors: education of inventor, types of probs encountered in the art, rapidity of innovation, sophistication of technology, and education of workers active in the field.

4. Combinations/changes. Combinations/changes. A change is obvious if an ordinarily skilled artisan would have recognized an apparent reason to combine those elements and would have known how to do so.

a) To guard against hindsight-based analysis when combining prior art references, the Fed.Cir. developed the teaching-suggestion-motivation test.

b) Under the TSM test, the patent claim is only proved obvious if “some motivation or suggestion to combine the prior art teachings” can be found in the prior art, the nature of the problem, or the knowledge of a person having ordinary skill in the art.

5. Reduction to practice. Inventions may be patented if they have been reduced to practice, even if a physical embodiment of the invention has not been realized.

a) Actual reduction to practice involves making a physical embodiment of an invention (for example, a prototype), and using it successfully for its intended purpose.

b) Constructive reduction.6. Doctrine of Inherency. The rule that anticipation can be inferred despite a missing element in a prior-art reference if the missing element is either necessarily present in or a natural result of the product or process and a person of ordinary skill in the art would know it. On one hand, the doctrine precludes patenting an existing invention by merely claiming an inherent element. On the other hand, it allows the later patentability of a substance, usu. a chemical compound, that was inadvertently created but not recognized or appreciated.

E. Disclosure1. Enablement. The patent specification "contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same."2. Written description. The written description requirement aims to prevent applicants from claiming more than they disclosed after they file their application, or claiming new subject matter that the applicant had not previously thought of. 3. Definite claiming (clear and concise). The test for definitiveness is not whether there is a better, more specific way to have drafted the claim. The test is simply whether it is definitive enough so that someone skilled in the art could figure it out. Viewed from perspective of one skilled in the art.4. Best Mode. The specification shall set forth the best mode contemplated by the inventor of carrying out his invention. A patent will not be granted where the inventor has conceived of a preferred mode and concealed that information from the public.

a) An infringer can no longer assert the defense that a patent is invalid b/c the patentee failed to disclose the best mode of making the invention.

b) The only requirement is that the best way is disclosed. You can describe five different modes, but you do not have to point out that the third one is the best. But one of them should be your best way (at the time of filing).

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5. Means + Function. § 112 (6) allows a patentee to alternatively draft limitations as "a means or step for performing a specified function without the recital of structure, material, or acts in support thereof."

F. Non-Patentables1. There are three specific exceptions to §101’s broad patent-eligibility principles: laws of nature, physical phenomena, and abstract ideas. 2. Laws of nature.

a) Laws of nature , physical phenomena, scientific truths, and abstract ideas cannot be patented.b) Generally mere chemical or mathematical formulas or algorithms divorced from any tangible result cannot be

patented; however, chemical substances can be patented systems using formulas can be patented as processes, and items that are produced as the result of formulas can be patented.

3. Products of Nature. a) Only human-made invention can be patented. Naturally occurring substances cannot be protected by patent

even if they have previously been unknown to others.b) Genetically altered living organisms can be patented as “manufactures” or “compositions of matter.” The AIA

expressly prohibits the patenting of human organisms.4. Business methods and mental steps.

a) Systems for the operation of businesses cannot be patented unless they are more than mere abstract ideas.b) Similarly, processes consisting solely of mental steps, meaning human thought and deliberation, cannot be

patented.5. Other.

a) Printed Matter. Printed forms cannot be patented.b) Atomic weapons. Under the Atomic Energy Act of 1954, atomic weapons cannot be patented.c) Mere novelties or inventions that conflict with scientific principles, such as a perpetual motion machine, are

not patentable.d) An invention whose only purpose is detrimental or fraudulent or would promote illegal ends cannot be

patented (not useful).G. Statutory Bars to Protection

Under § 102(b), inventions that are in “public use” or “on sale” a year before filing cannot receive patent protection. This encourages patent owners to patent early or forgo patent protection.1. Public Use. An invention is deemed to be in pubic use if it is being used in the manner intended by the inventor without any confidentiality restrictions. If the public, with the knowledge and consent of the inventor, is permitted to use the invention without opposition, it is a fraud to the public to afterwards take out a patent.

a) Experimental use exception. The Public Use Exception is designed to get people to put their inventions into the public domain as soon as possible. But some inventions require some 'tinker-time' to perfect. It’s in the public interest to allow a limited extension for certain inventions that require longer to perfect. So the experimental use exception is a limited exception to the “public use” bar. Use of the invention so that the inventor can perfect the invention or ascertain whether it will fulfill its intended purpose.

2. On sale. An inventor shall not exploit his discovery competitively after it is ready for patenting; he must content himself with either secrecy or legal monopoly. An invention is deemed to be on sale if it is offered for sale, even though no actual sales occur. Even a single sale or offer to sell may bar patentability.

a) Requirements. Definite sale or offer to sell; the thing on sale must either be the invention itself, something that makes the invention ‘obvious,’ drawings sufficient to be enabling; sale is primarily for profit.

H. Registration Requirements 1. First to File. Only the first, true inventor is entitled to patent protection and priority so inventors must attest to their “inventorship.” The U.S. is moving to a first to file system soon Effective March 16, 2013. Encourages independent inventors and lawyers to patent inventions. Creates less administrative burden for the patent examining agency but may burden small inventors to hurry up and patent things. Most of the world uses a first to file system.2. Patent Document. A patent must include a drawing, specification and at least one claim.

a) Drawing. Sketch/diagram of the invention.b) Specification. Establishes that a specification should include: (1) a written description of the invention, (2) that

it is clear and concise, and (3) which should enable any person skilled in the art to make and use the invention described, and (4) discloses the best mode for carrying out the invention.

c) Claims. Used to determine the scope of the intellectual property patented. When there is a question of infringement, claims determine the extent of an inventor’s protection.

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3. Oath and Duty of Candor (§115). Requires patent applicants to take an oath that they invented the subject matter under consideration for a patent. Patent applicants also have a duty of candor under 37 CFR sect. 1.56 that only requires a good faith standard.

a) Inequitable Conduct. Occurs when a patent applicant breaches the applicant's duty of candor and good faith to the USPTO while applying for a patent.

b) Resides in failure to disclose material information or submission of false material information with INTENT to deceive, and those two elements, materiality and intent, must be proven by clear and convincing evidence.

I. Joint Inventors1. Joint Inventors. One must show by clear and convincing evidence that the suggestions and contributions of third persons amount to co-inventorship. (Hess v. Advanced Cardiovascular) When a person claims to be an inventor because he has suggested a non-obvious combination of prior art elements to the named inventors, he might be a co-inventor. (Nartron v. Schukra)2. Joint Inventions. When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. Inventors may apply for a patent jointly even though.3. Omitted Inventor. If a joint inventor refuses to join in an application for patent or cannot be found or reached after diligent effort, the application may be made by the other inventor on behalf of himself and the omitted inventor. The Director, on proof of the pertinent facts and after such notice to the omitted inventor as he prescribes, may grant a patent to the inventor making the application, subject to the same rights which the omitted inventor would have had if he had been joined. The omitted inventor may subsequently join in the application.

J. Infringement1. Direct Infringement. Direct infringement occurs when a person without authorization makes, uses, offers to sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefore.2. Doctrine of Equivalents. Allows a court to hold a party liable for patent infringement even though the infringing device or process does not fall within the literal scope of the patent claim but nevertheless is equivalent to the claimed invention.

a) It must have an equivalent of EACH element of the patent invention in order to infringe under the doctrine.b) Inquiry is often framed as 1) whether Ds differing element performs substantially the same function in

substantially the same way to obtain the same result as the claimed element.c) In making this evaluation, considerations include: 1) whether POSITA would have known the differing

elements were interchangeable at time of infringement, 2) whether finding Ds invention equivalent would give patentee more rights than she would have gotten from the PTO, and 3) how great a departure the patentee’s invention is from the prior art.

3. Literal Infringement. If the accused invention, device or process falls within the language used in a patent claim, there is literal infringement b/c the accused invention is the same as that protected by the grant of patent.

a) Each element of the claim must be present in the accused device for literal infringement to exist. If the claim includes elements or steps that are not present in the accused device, there is no literal infringement.

b) Ex. Claim with elements A, B, C and D and alleged infringer with elements A, B, C would not be literal infringement.

4. Prosecution History Estoppel. Patentee will sometimes omit certain claims or narrow them to avoid rejection on the basis they are precluded by prior art. The inventor/patentee is bound by this prosecution history in a later action alleging infringement under the doctrine of equivalents and is estopped from alleging that the claim was intended to be broader or asserting a position inconsistent with one taken earlier.5. Contributory Infringement. Under patent law, contributory infringement is a form of indirect infringement where an infringer provides a material component part of a patented invention. The component part must be a nonstable item without any substantial non-infringing uses. For liability to be found…

a) The contributory infringer must act with knowledge (the supplier knew its product was essentially made/adapted for use in an infringement of the patent)

b) The product’s use must constitute a material part of the inventionc) The product is not a staple article or commodity of commerce suitable for substantial noninfringing used) The supplier’s product was used to commit acts of direct infringement.

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6. Seeking relief. Patent holders who believe infringement has occurred may seek relief in the federal court system. District courts first hear patent claims; on appeal, all patent claims go to the CAFC. If the U.S. gov’t infringes a patent, the patent holder may sue in the U.S. Court of Federal Claims.

K. Defenses1. Invalidation. Under the invalidity defense, a ∆ may assert that he or she is accused of infringing a patent claim that is invalid and therefore the π has no cause of action against them. A patent is presumed valid. However, ∆ may overcome this by proving w/ clear and convincing evidence that a condition of patentability was not satisfied.2. Inequitable conduct. Inequitable conduct occurs when a patent applicant breaches the applicant's duty of candor and good faith to the USPTO while applying for a patent.3. Patent misuse. The patentee has misused his patent if he uses it unreasonably to extend his market power beyond what Congress intended. If the D can demonstrate patent misuse, the patentee will be denied enforcement of his patent until the misuse ceases and doesn’t enjoy the benefit from prior misuse.4. Laches. The person invoking laches is asserting that an opposing party has "slept on its rights," and that, as a result of this delay, circumstances have changed such that it is no longer just to grant the plaintiff’s original claim. Put another way, failure to assert one’s rights in a timely manner can result in a claim being barred by laches.5. Equitable Estoppel. A claim that the ∆ reasonably relied on the π’s assertion that it would not bring an infringement claim. Requirements. To establish the defense of estoppel, a ∆ must prove (1) the patentee, through misleading conduct, led the ∆ to reasonably infer that it did not intend to enforce its patent against the ∆, (2) the ∆ relied on that conduct, and (3) due to its reliance, the ∆ will be materially prejudiced if the patentee’s suit is allowed to proceed. (Aukerman)6. Term Limit. A claim that the allegedly infringing activity took place after the patent term had run out and therefore did not constitute infringement. (Paper Converting Machine) However, in order to assert a term limits defense successfully, one must not have engaged in substantially infringing activities during the patent’s term.

L. Remedies1. Injunctive Relief. (You always want injunctive relief.)

a) Preliminary. Stops the allegedly infringing action so that the plaintiff does not suffer additional damages during the pendency of trial. Factors: likelihood of success on the merits, irreparable injury, balance of hardships, public interest.

b) Permanent. If the plaintiff’s claim of infringement is successful, the court will then issue a permanent injunction barring the defendant’s infringing action going forward.

2. Damages. May include lost profits, statutory damages. The patentee is not required to make, use or sell its patented invention in order to receive compensation for lost sales of a patentee’s device that directly competes with the infringing device if it is proven that those lost sales were caused in fact by the infringement.3. Attorneys fees. The court in exceptional cases may award reasonable attorney fees to the prevailing party.

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IV. TRADEMARK LAW [15 U.S.C. §1051]A. General

1. Definition. Word, phrase, logo or other graphic symbol used by a manufacturer or seller to distinguish its product or products from those of others. The main purpose is to designate the source of goods or services. Designed to identify the source of goods or services. EX. Just Do It, I’m lovin’ it, Dell, Dell logo, etc. 2. Distinctive mark + use in the marketplace!3. Purpose. 1- Identify source of goods; 2- Prevent consumer confusion in the marketplace. Protects public from buying fake/faulty goods and protects the reputation and goodwill of sellers.4. Originality/creativity. Level of originality/creativity is at the oppose level of the spectrum from patent. A patent has a high degree of novelty. ™ doesn’t have as high of a degree of novelty.

B. Types of Marks1. Service . Used to identify and distinguish the service of others and to indicate the source of services, even if that source is unknown. The law of ™s and service marks overlap so, as is typical practice, trademark includes both trademarks and service marks. Compared to Trademark. ™ marks a good. Service mark marks a service.2. Certification . ™s used by certification organizations to certify that a product or service meets a specified quality standard.3. Collective . Indicates that goods/services were produced by a collective group or by members of such a group to represent affiliation with the body (unions or trade assocs.)4. Trademark v . Tradename. A trademark must be attached to a product or service to refer to the manufacturing or selling source of the product of service. If any one of these prongs is missing, we no longer have a trademark. We either have a TRADE NAME or a GENERIC NAME.

a) Trade Name. If the mark is not attached to a product or service but is referring to a manufacturer, company, seller, the mark is serving as a TRADE NAME! Ex. When Hilton is used to refer to the corporation. [Not when it is used to describe a brand of hotel – then it’s a trademark/service mark.]

b) Generic Name. If the mark is attached to a product or service but is not referring to a manufacturer or seller, the mark is serving as a generic name.

C. Validity (Alderman)1. Validity. That the public recognizes π’s symbol as identifying his business and distinguishing it from those of others. Validity can be shown in two ways:

a) The symbol is inherently distinctive (arbitrary, fanciful or suggestive) or b) The symbol has become distinctive through the acquisition of secondary meaning (descriptive or generic).

D. Distinctiveness (discussed in Alderman)In order to serve as a ™, a mark must be distinctive (capable of identifying the source of a particular good.) In determining whether a mark is distinctive, the courts group marks into four categories, based on the relationship between the mark and the underlying product (below). Because marks in each of these categories vary w/ respect to their distinctiveness, the requirements for and degree of legal protection afforded a particular ™ will depend upon the category it’s in.

1. Arbitrary/fanciful . An arbitrary/fanciful mark is a mark that bears no logical relationship to underlying product but they are inherently distinctive, i.e. capable of identifying an underlying product, and are given a high degree of protection

a) Fanciful- made-up, not really a word; Arbitrary- word used in meaningless context, e.g., “Apple Computers”b) EXs. “Exxon,” “Kodak,” “Apple” bear no inherent relationship to their underlying products (respectively,

gasoline, cameras, or computers). The Nike "swoosh" bears no inherent relationship to athletic shoes.2. Suggestive . A suggestive mark is a mark that evokes or suggests a characteristic of the underlying good. Like arbitrary or fanciful marks, suggestive marks are inherently distinctive and are given a high degree of protection.

a) EXs. “Coppertone” is suggestive of sun-tan lotion, but does not specifically describe the underlying product. Some exercise of imagination is needed to associate the word with the underlying product. At the same time, however, the word is not totally unrelated to the underlying product.

b) Tumblebus case. “Tumblebus” is considered suggestive because of the “degree of inferential reasoning necessary for a consumer to discern that the Tumblebus mark relates to the provision of on-site gymnastics and fitness instruction to children.” The connection between “tumble” and “bus” is not so obvious that a consumer seeing Tumblebus in isolation would not know that the term refers to mobile-gymnastics instruction and not a mobile laundry service using tumble-dryers.

3. Descriptive . A descriptive mark is a mark that directly describes, rather than suggests, a characteristic or quality of the underlying product (e.g. its color, odor, function, dimensions, or ingredients).

a) EXs. “Holiday Inn,” “All Bran,” and “Vision Center” all describe some aspect of the underlying product or service (respectively, hotel rooms, breakfast cereal, optical services). They tell us something about the product. If the message you get is “this is what the product does” then it’s descriptive.

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b) Unlike arbitrary or suggestive marks, descriptive marks are not inherently distinctive and are protected against infringement only if they have acquired "secondary meaning" in the minds of the consuming public. Descriptive marks must clear this additional hurdle because they are terms that are useful for describing the underlying product, and giving a particular manufacturer the exclusive right to use the term could confer an unfair advantage.

c) The more descriptive, the closer to generic and the harder it is to prove secondary meaning.4. Generic . A generic mark is a mark that describes the general category to which the underlying product belongs. Common name of a product, such as a car, soap or beverage. Generic marks are entitled to no protection under ™ law and cannot be exclusively appropriated by one party inasmuch as they are needed by competitors to describe their goods. Not distinctive of the actual names of the goods or services.

a) EXs. "Computer" is a generic term for computer equipment. Manufacturer selling "Computer" brand computers (or "Apple" brand apples) would have no exclusive right to use term w/ respect to that product.

b) Generic terms are not protected by ™ law because they are simply too useful for identifying a particular product. Giving a single manufacturer control over use of the term would give that manufacturer too great a competitive advantage. Under some circumstances, terms that are not originally generic can become generic over time (a process called "genericity"), and thus become unprotected.

c) But could be a combination of generic words and will be descriptive, e.g., “Home Depot” or “Container Store”d) Generic word meaningless in context could be protected, e.g., “Staples” or “Apple” (those are arbitrary)

5. Combination. A combination of 2/+ types are called composite names. The proper analysis is to look at the name as a whole not to dissect it into its component parts. (Alderman)6. Continuum of Protection

No protection <------------I--------------------I--------------------I---------------------> Protection Generic Descriptive Suggestive Arbitrary/Fancy

[Very] [Slight]

7. Secondary Meaning . When a mark used in commerce becomes so associated with a business enterprise that it becomes synonymous with that enterprise to the consumers in its market or line of business, then the term has acquired secondary meaning. Protection is not granted until the mark has been established in the marketplace.

a) Factors that support finding secondary meaning can be both direct and circumstantial. (Alderman)(1) Direct. Consumer testimony and consumer surveys.(2) Circumstantial. (1) Exclusivity, length and manner of use; (2) amount and manner of advertising; (3)

amount of sales and number of customers; (4) established place in the market; and (5) proof of intentional copying.

b) The issue of priority and ownership is not which party first used the name but which party first achieved secondary meaning in the trade name. (Alderman)

c) EXs. Holiday Inn, Kentucky Fried ChickenE. Content of Marks – What can be trademarked?

1. General . Recognizable words and combinations of words (slogans), arbitrary combinations of letters, combinations of letters and numbers, and numbers alone may serve as marks.

a) Drawings, scents, and sounds may serve as marks.2. Trade Dress . Overall visual image of either product packaging or business. (Two Pesos)

a) Distinctiveness. Trade dress will only be legally protected if it is distinctive. In other words, consumers must associate the shape, design, color scheme, or assemblage of features of the product or its container with a particular brand of goods. Similar conceptually to distinctiveness applied to work marks but application is different.

(1) Trade dress can satisfy the distinctiveness requirement either by proof that the trade dress has secondary meaning or by proof that it is inherently distinctive. (Two Pesos).

(2) Inherent Distinctiveness. If it is of such a design that a buyer will immediately rely on it to differentiate the product from those of competing manufacturers.

b) Product Design. Where a party claims trade dress protection in the design of the actual product rather than its packaging, trade dress cannot be inherently distinctive. (Walmart v. Samara). One must prove secondary meaning.

c) Non-functional. Trade dress must be “non-functional” to be protected. (1) A product or container design is considered functional if the product feature is essential to the use or

purpose of the product.

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(2) Expired Utility Patent. “Where the expired patent claimed the features in question, one who seeks to establish trade dress protection must carry the heavy burden of showing that the feature is not functional by showing that it is merely ornamental, incidental or arbitrary aspect of the device. (TrafFix)

(3) Alternative design possibilities. The existence of alternative design possibilities does not make the design non-functional. (TrafFix)

d) Infringement. Adopting the overall concept of another’s distinctive packaging or product image. 3. Composite Marks . A mark may be comprised of two or more of these elements. These composite marks must be evaluated as a whole for distinctiveness. (Alderman)

F. Federal Registration (Enables Federal protection and remedies)1. Common Law v. Federal Registration . Ownership of marks is automatic under the C/L as soon as the mark is first used in trade (or, for marks that are not inherently distinctive, as soon as the claimant obtains secondary meaning). No registration or other admin process is necessary to acquire the ownership rights. However, federal law provides that owners may register them on the Principal Register. Registration gives additional rights beyond those available at C/L. 2. Governing Act. Lanham Act, 15 USC §1051, was enacted by Congress based on the power granted to it by the Com. Cl. It provides for a national system of trademark registration and protects the owner of a federally registered mark against the use of similar marks if such use is likely to result in consumer confusion, or if the dilution of a famous mark is likely to occur. The scope of the Lanham Act is independent of and concurrent with state common law.3. Term. The trademark owner must maintain the mark and continue to use the mark to maintain his rights.4. Applications. Use application and intent-to-use applications.

a) I-T-U. ITU application allows a trademark applicant to begin the federal registration process without actually using the mark at the time of the application. But you still have to have the “use” in order to get the registration.

5. Opposition. If the trademark is not successfully opposed, then it is registered on the Principal Register.6. Supplemental Register. Marks that are capable of distinguishing goods or services but are not registerable on the Principal Register due to lack of distinctiveness may be registered on the Supplemental Register.7. Principal Register. To be registered on the Principal Register, mark must be (1) used in interstate commerce; (2) distinctive (valid); and (3) not otherwise barred by statute.

a) Use in Interstate Commerce. The talismanic test for use in commerce remains whether or not the use was sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark. (Mountain Top Beverage Group v. Wildlife Brewing)

b) Distinctive to Consumers. Inherent or acquired distinctiveness. “To merit trademark protection, a mark must be capable of distinguishing the products it marks from those of others.” (V. Secret) (Supra §D. Distinctiveness.)

c) Not Barred by 15 USC 1052. There are several marks that can’t be registered per se b/c blocked by statute:(1) Immoral, deceptive, or scandalous matter(2) Matter which may disparage or falsely suggest a connection w/ persons living or dead, institutions,

beliefs or national symbols or bring them into contempt or disrepute.(3) Geographic indication with respect to wines and spirits that identifies a place other than the origin of

the wine or spirits.(4) Flags, coat of arms, or insignia of the U.S., states, municipality or foreign nation.(5) Name, portrait or signature of particular living person except with consent.(6) Name, portrait or signature of a deceased POTUS during the life of his widow unless widow oks(7) Mark that resembles a registered mark & is likely to cause confusion, deception or mistake unless

those are determined unlikely by the USPTO.(8) Mark that is primarily geographically deceptively misdescriptive of product/service.(9) Matter that is functional.

8. If mark isn’t registered, there is no presumption of validity that comes with registration. G. Cause of Action: Confusion. Making the Case π must show Validity + Likelihood of Confusion (Alderman)

1. Likelihood of Confusion . An appreciable number of reasonable buyers would likely be confused by ∆’s actions.a) Appreciable Number. Need not be a majority. Some courts have found survey evidence of even low

percentages of actual confusion to be strong evidence of a likelihood of confusion. (Alderman)b) Likely. “Likely” has been interpreted as synonymous with probable confusion. (Alderman)c) Confusions.

(1) Direct/ordinary Confusion. When the junior user adopts a mark that so closely resembles the senior user’s mark that consumers are likely to be misled into believing that he senior user is the source of the junior user’s goods or services.

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(1) The junior user is attempting to free-ride on the reputation and goodwill of the senior user by adopting a similar mark or identical mark. (2) Ex. McDowells scene from Coming to America. Going to McDowells and thinking you’re in McDonald’s.

(2) Reverse Confusion. The similarity between the marks has the opposite effect as ordinary confusion: consumers are likely to be misled into believing that the senior user’s goods originate with the junior user. In other words, consumers encountering π’s (senior) products will assume that they are made by the ∆ (junior). Most commonly this results from the success of the junior user’s marketing success, which causes the junior user to become better known than the senior user.

(1) The junior user saturates the market with a similar trademark and overwhelms the senior user. (Freedom Card v. JPMorgan Chase). The public comes to assume the senior user’s products are really the junior user’s or that the former has become somehow connected to the latter. The result is that the senior user loses the value of the trademark – its product identity, control over its goodwill and reputation, and ability to move into new markets. (2) Purpose. Intended to enable small, senior users to protect their trademark rights against junior users whose marks have gained commercial strength through extensive marketing.(3) Note. ‘Junior’ and ‘senior’ are based on first in time (sr. user) and second in time (jr. user). It has less to do with size and scope of the companies. The junior user is usually the one that is more effective with marketing the particular mark. (4) Ex. Company J is a large shoe manufacturer and retailer that is well-known by consumers. Company J adopts and begins to sell shoes under the mark "TIPTOE." As part of the launch of its new "TIPTOE" line of shoes, Company J engages in a media blitz to promote the shoes. Company S, a small and lesser known manufacturer of shoes, has been manufacturing and selling shoes under the mark "TIPTOES" for a number of years and long before Company J adopted its new brand. As a result of Company J's marketing campaign and the familiarity of consumers with Company J's product, consumers are likely to mistakenly believe Company S's "TIPTOES" shoes are associated with Company J. This is the classic reverse confusion scenario.

(3) Factors for both (vary among circuits). 1- Similarity of marks/relatedness of products; 2-Manner/method/timeframe in which both π and ∆ used the marks; 3-physical area of use (same market); 4- strength of the marks; 5- Intent of ∆ (wrongful? intent to confuse?); 6- Actual confusions; 7- degree of care consumers will exercise, likelihood of being confused.

(4) Other confusions? (1) Point-of-sale confusion. Confusion that occurs at the point at which the buying decision is made.(2) Post-sale confusion. Confusion that occurs among the public after the sale is made.(3) Pre-sale confusion (initial interest). Confusion that occurs when the consumer is deciding where to make a purchase.

d) Trademark Parodies. Allowed to use the name of a trademark good in advertising, packaging, etc. or in identifying and parodying, criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner.

2. Relevant People. Purchasers & potential customers are relevant. Brand indifferent customers aren’t. (Alderman)3. Competition needed? Vast majority of modern decisions have adopted the rule that competition is not necessary between the parties for there to be a likelihood of confusion.

H. Cause of Action: Dilution. Making the Case π must show Famous Mark + ∆’s use + Likelihood of Dilution1. Definition . Dilution is the lessening of the capacity of a famous mark to identify and distinguish goods and services. (Kellogg) This gives π standing to stop others from using a similar mark. Dilution is not based on a likelihood of confusion standard but exists only to protect the quasi-property rights a holder has in maintaining the integrity and distinctiveness of its mark. (Kellogg)

a) Determining Famousness . The following eight factors (Lanham Act) are used in determining whether a mark is famous:

(1) Geographic reach of the mark in the pertinent market segment; (2) extent to which third parties use similar marks; (3) registration status of mark; (4) duration and extent of advertising and publicity; (5) channels of trade; (6) degree of recognition; (7) degree of inherent or acquired distinctiveness of the mark; and (8) duration and extent of use of the mark in connection with the goods and services.

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2. Act . Trademark Dilution Revision Act of 2005 – the owner of a famous, distinctive mark is entitled to an injunction against the use of a mark that is “likely” to cause dilution of the famous marks. 15 USC §1125(c). (Starbucks)3. Purpose . Dilution is a cause of action invented and reserved for a select class of marks – those marks with such powerful consumer associations that even noncompeting uses can impinge their value.4. Proving Dilution . A party (π) alleging dilution under §43(c) must satisfactorily prove that

a) Its mark is famous and distinctive;b) The ∆ is making commercial use of the mark/ trade name in commerce;c) The ∆’s use began after the π’s mark/trade name became famous; andd) The ∆’s use presents a likelihood of dilution of the distinctive value of the mark/ trade name by blurring or

tarnishment.5. Blurring Dilution . “An association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark,” §1125(c)(2)(B), and may be found “regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury. §1125(c)(1). (Starbucks)

a) Factors. Similarity of ∆’s mark w/ famous mark*; degree of distinctiveness of the famous mark; extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark; degree of recognition of famous mark; whether ∆ intended to create an association with the famous mark; and any actual association between ∆’s mark and famous mark. Federal registration is another fact to consider.

b) *Note. The statute never used the work “substantial” or “very” in connection with the similarity factor to be considered in examining a federal dilution claim.

6. Tarnishment Dilution . “An association arising from similarity b/t a mark and a famous mark that harms the reputation of the famous mark.” §1125(c)(2)(C).

a) Ex. When a ™ is linked to products of shoddy quality or is portrayed in an unwholesome or unsavory context, with the result that the public will associate the lack of quality or lack of prestige in the ∆’s goods with the π’s unrelated goods. (Starbucks)

7. Liability . Liability for dilution by blurring or tarnishment may arise even where there is not actual or likely confusion, no competition and no actual economic injury. 8. Parody Exception . According to 15 USC §1125(c)(3), “any fair use . . . in connection with (ii) identifying and parodying, criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner” shall not be actionable as dilution by blurring or dilution by tarnishment.”

I. Defenses1. Abandonment . In general, this defense can arise from nonuse of the trademark.

a) Naked Licensing. Arises from overuse. Specifically, occurs when a trademark owner fails to exercise reasonable control over the use of a mark by a licensee such that the presence of the mark on the licensee’s goods or services misrepresents their connection with the trademark owner since the mark no longer identifies goods or services that are under the control of the owner of the mark and the mark can no longer provide a meaningful assurance of quality. (Tumblebus)

b) Geographic Issues. Abandonment somewhere doesn’t necessarily mean abandonment everywhere. A trademark owner may decide to quit a particular market without prejudicing her rights in other markets as long as she continues use in those other markets.

2. First Sale . A purchaser who does not do more than stock, display, and resell a producer’s product under the producer’s trademark violates no right conferred upon the producer by the Lanham Act. (Tumblebus)

a) The trademark owner upon selling the trademarked product or service relinquishes rights to control subsequent sales of the product or service in an unaltered form.

3. Fair use . a) Classic Fair Use. Occurs when a descriptive mark is used in good faith for its primary, rather than secondary

meaning, and no consumer confusion is likely to result. (1) Ex. A cereal manufacturer may be able to describe its cereal as consisting of "all bran," without

infringing upon Kelloggs' rights in the mark "All Bran." Such a use is purely descriptive, and does not invoke the secondary meaning of the mark.

(2) A π claiming infringement of an incontestable mark must show likelihood of consumer confusion as part of the prima facie case, 15 USC § 1115(b), while the ∆ has no independent burden to negate the likelihood of confusion in raising the affirmative defense that at term is used descriptively not as mark, fairly and in good faith. (KP Permanent Make-up)

b) Nominative Fair Use. Occurs when use of a term is necessary for purposes of identifying another producer's product, not the user's own product. Where ∆ uses π’s mark to describe/refer to π’s product.

(1) Occurs when the alleged infringer uses the mark to describe the trademark holder’s product, even if the alleged infringer’s ultimate goals is to describe his own product.

(2) Also occurs if the only practical way to refer to something is to use the trademarked term.

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(3) Ex. The newspaper USA Today ran a telephone poll, asking its readers to vote for their favorite member of the music group New Kids on the Block.

(4) Third Circuit’s Test. (Century 21 Real Estate v. Lendingtree)(1) π must prove confusion is likely due to ∆'s use of π's mark. Once π has met this burden by showing a likelihood of confusion, burden then shifts to ∆ to show its use of π's mark is fair.

(i) Factors π can use to show likelihood of confusion: the price of the goods and other factors indicative of the care and attention expected of consumers when making a purchase; the length of time that the defendant has used the mark with evidence of actual confusion; the intent of the defendant in adopting the mark; and the evidence of actual confusion.

(2) Once π has shown likelihood of confusion, then ∆ can still show that its use is nonetheless fair.

(i) Three-prong test to show fairness: (a) Whether the use of the π's mark is necessary to describe π's products and services and ∆'s products or services; (b) Whether only so much of ∆'s mark was used as is necessary to describe π's products or services; and (c) Whether ∆'s conduct or language reflect the true and accurate relationship b/t π's and ∆'s products or services.

(3) Assuming that a nominative fair use ∆ can show these factors, then ∆'s use of π's trademark should be regarded as fair, even if π shows that consumers are likely to be confused.

c) Fair Use and Confusion. The fair use defense in ™ law is not precluded by the possibility of confusion. (KP Permanent Make-up v. Lasting Impression). However, courts may consider the possibility of confusion in analyzing whether a use is fair or not. Intent to show confusion is also relevant; hence, the general rule that no more of ™ should be used than necessary for the legitimate purpose.

(1) The burden of proving likelihood of confusion always has rested with the plaintiff. The affirmative defense should come into play only once plaintiff has met its burden of establishing the likely confusion.

d) Dist’d from Copyright. In copyright, fair use was originally a justification for infringement that developed along equitable lines, now there’s a four factor test that takes impact on the market into consideration. In trademark law, if the infringer uses the mark to refer to the trademark owner’s product or service or to refer to his own product or service, then the trademark infringing use is fair. Much more straightforward.

4. First Amendment. Trademark rights are therefore curbed to the extent possible to promote free speech and free competition in the marketplace. Therefore, First Amendment is raised as a defense as a defense to a trademark infringement claim. It is mostly in cases of parody trademarks the First Amendment defense most frequently arises.5. Parody . According to 15 USC §1125(c)(3), “any fair use . . . in connection with (i) advertising or promotion that permits consumers to compare goods or services or (ii) identifying and parodying, criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner” shall not be actionable as dilution by blurring or dilution by tarnishment.”

a) Ex. “If you like Wonderful by Taylor Swift, you’ll love Wonderland by Taylor Quick.” This is ok.J. Remedies

1. Once a mark is found invalid, the court should order cancellation, an administrative remedy to deregister a mark. (Gracie)2. Injunctive Relief.

a) Standard remedy subject to the usual equitable defenses but is discretionary. However, likelihood of success on the merits is usually enough to establish that there is irreparable injury that only an injunction can remedy.

b) An injunction will not be granted to prevent trademark use in a geographic area that the trademark owner has not entered. In such situations, the possibility of confusion is not considered grave enough to merit injunctive relief.

3. Accounting for profits made by infringer, payable to owner.4. Damages, which may be trebled when appropriate5. Attorney’s fees in “exceptional cases” to prevailing parties6. Costs of litigation