Kettle IP Abstract-2009
88
INTELLECTUAL PROPERTY ABSTRACT Professor John R. Kettle III Rutgers School of Law –Newark COPYRIGHT............................................................ 6 Background to Copyright Laws........................................6 What is the purpose of Copyright Law?...............................6 What is Copyrightable?..............................................6 Copyrightable Works when in a Fixed Form............................6 Works not subject to copyright under §102 (b).......................7 Originality in Copyright Law........................................7 Who owns the Copyright?.............................................7 Joint Authorship....................................................7 Work Made for Hire..................................................7 Copyright in a Collective Whole – Newspapers and Periodicals........8 SC Test to determine a common law employee..........................9 Commissioned Work...................................................9 Copyrights Licenses and Assignment..................................9 §201(d) Transfer of Ownership......................................10 Termination of Transfers...........................................10 Rights of Copyright Author.........................................11 Obtaining Copyright Protection.....................................11 Copyright Application Forms........................................12 Length of Copyright Protection.....................................13 1
-
Upload
amber-lynn -
Category
Documents
-
view
32 -
download
2
Transcript of Kettle IP Abstract-2009
INTELLECTUAL PROPERTY ABSTRACT
Professor John R. Kettle III Rutgers School of Law –Newark
COPYRIGHT.............................................................................................................6
Background to Copyright Laws..............................................................................6
What is the purpose of Copyright Law?.................................................................6
What is Copyrightable?..........................................................................................6
Copyrightable Works when in a Fixed Form..........................................................6
Works not subject to copyright under §102 (b)......................................................7
Originality in Copyright Law..................................................................................7
Who owns the Copyright?.......................................................................................7
Joint Authorship......................................................................................................7
Work Made for Hire...............................................................................................7
Copyright in a Collective Whole – Newspapers and Periodicals............................8
SC Test to determine a common law employee......................................................9
Commissioned Work...............................................................................................9
Copyrights Licenses and Assignment.....................................................................9
§201(d) Transfer of Ownership.............................................................................10
Termination of Transfers......................................................................................10
Rights of Copyright Author..................................................................................11
Obtaining Copyright Protection...........................................................................11
Copyright Application Forms...............................................................................12
Length of Copyright Protection............................................................................13
Copyright Infringement........................................................................................14
Remedies for Copyright Infringement..................................................................14
Defenses against infringement.............................................................................15
Statute of Limitations...........................................................................................15
Factors for fair use...............................................................................................15
Selected sections of the 1976 Copyright Act.......................................................16
1
Title II of Digital Millennium Copyright Act.........................................................18
18 U.S.C.A............................................................................................................19
WORK MADE FOR HIRE AGREMENT.................................................................20
IDEAS...................................................................................................................... 22
General Overview.................................................................................................22
Laws Protecting Ideas..........................................................................................22
Duration of Idea Protection..................................................................................22
Elements of IDEA Misappropriation.....................................................................22
Recovery for Idea Misappropriation.....................................................................22
How does recovery affect the novelty requirement.............................................23
California Rule......................................................................................................23
Submission Agreements.......................................................................................23
Defenses to Idea Misappropriation......................................................................24
Submission Letter................................................................................................24
PATENTS................................................................................................................25
Overview of Patent Law.......................................................................................25
Patent Laws and Procedures................................................................................25
Patent Definition...................................................................................................25
Types of Patents & Duration of Exclusivity..........................................................25
Patent Rights........................................................................................................26
Transfer of Patent Rights.....................................................................................26
Items not Patentable............................................................................................26
Requirements for Patentability............................................................................27
Obtaining Patent Protection.................................................................................29
Maintenance Fee’s...............................................................................................30
Patent Infringement.............................................................................................30
Determination of Patent Infringement.................................................................31
Defenses for Patent Infringement........................................................................31
Remedies for patent Infringement.......................................................................32
Relevant Patent Statutes......................................................................................33
TRADE SECRETS...................................................................................................34
Overview of Trade Secrets...................................................................................34
2
Definition of Trade Secret....................................................................................34
Protection of Trade Secrets..................................................................................35
Judicial view of Trade Secrets..............................................................................35
Determination of Trade Secrets...........................................................................35
Confidential Relationships in Trade Secret Law..................................................36
Trade Secret Protection (employer/employee relationship) and Misappropriation
.............................................................................................................................. 36
Doctrine of Inevitable Disclosure.........................................................................37
Misappropriation by Memory...............................................................................37
Duration of Trade Secret Protection....................................................................37
Misappropriation of a Trade Secret.....................................................................37
Elements of the Cause of Action for Trade Secret Misappropriation...................38
Criminally Liability...............................................................................................39
Liability Exceptions (Defenses)............................................................................39
Remedies for Trade Secret Misappropriation......................................................40
NONDISCLOSURE AGREEMENT........................................................................41
TRADEMARKS.......................................................................................................43
Overview of Trademarks......................................................................................43
Types of Trademarks............................................................................................43
Trademark Registration.......................................................................................44
Advantages of Federally Registered Marks.........................................................44
Registration Process.............................................................................................45
Supplemental Register.........................................................................................46
Use of Trademark Symbols TM, SM and ®................................................................46
Licensing Trademarks..........................................................................................46
Qualities of Protectable Trademarks....................................................................47
Un-Protected Trademarks....................................................................................48
Bars to Registration..............................................................................................48
Non-Use................................................................................................................49
Loss of Distinctiveness/Genericide - Abandonment.............................................49
Abandoned Marks.................................................................................................49
Prohibited Protection of Certain Marks...............................................................49
3
Deceptive Marks...................................................................................................50
Confusing Similarity to Prior Marks.....................................................................50
Geographically Descriptive or Deceptively Misdescriptive..................................50
Trade Dress/Functionality:...................................................................................51
Trademark Infringement......................................................................................52
Dilution §1127 of the Trademark Act...................................................................54
Factors for Determination of Dilution..................................................................55
Remedies for Mark Infringement.........................................................................56
Cyber Squatters....................................................................................................57
Defenses to Mark Infringement............................................................................57
Relevant Statutes.................................................................................................58
The Lanham Act (15 USC §1125-26)....................................................................58
1946 TRADEMARK ACT- 15 USC §1051 et seq....................................................58
RIGHT OF PUBLICITY (ROP)..............................................................................61
Overview...............................................................................................................61
Right of Publicity (definition)...............................................................................61
Sources of ROP Protection...................................................................................62
States Law & ROP................................................................................................62
ROP Infringment..................................................................................................62
Limits of Protection for ROP................................................................................63
Remedies for ROP Infringement...........................................................................64
Kettle Acronyms....................................................................................................65
Intellectual Property Related Websites.............................................................66
Online Law Journals Specializing in Intellectual Property (Law Schools)...68
INTELLECTUAL PROPERTY PROTECTION IN THE UNITED STATES..........69
4
COPYRIGHT
Background to Copyright Laws
Article 1, section 8, clause 8 of the United States Constitution
“[t]o promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries”
Initial copyright legislation, Act of 1790
Some works still fall under this act
Copyright Act of 1976, 17 U.S.C.A. §101 et.seq. (Effective 1/1/78)
The practice of Copyright Law is very date and fact sensitive – the date on which the copyright protection was received determines the duration of protection as well as the necessity for observing certain formalities to initiate or sustain the protection afforded the author.
§301 of the Copyright Act of 1976 preempted State copyright protection
States can now only afford protection to those works which are not fixed in a tangible form, and published sound recordings before February 15, 1972.
What is the purpose of Copyright Law?
Promote the creation of works of literature, art, music etc., by giving authors limited property rights in their works.
Public interest is served by the creation and dissemination of such works, which also encourages a competitive marketplace.
What is Copyrightable?
Original works of authorship in fixed in a tangible medium of expression as enumerated in 17 U.S.C.A. §102
Copyrightable Works when in a Fixed Form
(1) literary works;(2) musical works, including any accompanying words;(3) dramatic works, including any accompanying music;(4) pantomimes and choreographic works;(5) pictorial, graphic, and sculptural works;(6) motion pictures and other audiovisual works;(7) sound recordings; and (8) architectural works
Works not subject to copyright under §102 (b)
Any idea, procedure, process, system, method of operation, concept, principle, or discovery
5
Works of authorship which are not fixed in a tangible form of expression under the authority of the author
For example, a choreographic work which has not been either notated or recorded is not subject to federal copyright protection
Ideas are not subject to copyright protection only the author’s method of expressing such ideas
Originality in Copyright Law
A key component of copyright protection.
The Court in Feist Publications v. Rural Telephone Service, 499 U.S. 340 (1991) held that to qualify for copyright protection, a work must be original to the author, that is the author must have created it, (did not copy protectable expression from another) and that it possesses at least some minimal degree of creativity.
Anything which is considered common property or containing no original authorship, do not qualify for copyright protection.
Particular selection, arrangement, and coordination of facts could create copyright protection in the work as a whole, but not the individual parts.
Who owns the Copyright?
Under the 1976 Copyright Act, the copyright in a work of authorship becomes the property of the author of the work immediately upon being fixed in a tangible form
Joint Authorship
The authors of a joint work are co-owners of the copyright in the work, unless there is an agreement to the contrary.
To determine if the work is a work of joint authorship one must look at the intent of the parties at the time at which each made their contribution to the work, that is, each party must have intended that their work be a contribution to a whole, and, under the majority rule, each author must also have contributed copyrightable material.
Absent an agreement to the contrary, each joint author has the right to exercise his rights in the work as long as he accounts to the co-authors for any profits.
Work Made for Hire
6
In the case of a work made for hire, the employer, not the employee who may be the actual creator, is considered the author of the work and therefore the owner of the copyright.
§101 of the Copyright Act definition of “Work made for hire”1) a work prepared by an employee within the scope of his or her employment;
or (when hiring a freelancer)
2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.
The Supreme Court in Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) held that in deciding whether the work in question was indeed a work made for hire, the term employee should be interpreted according to common law agency principles.
SC Test to determine a common law employee
1. The level of skill required to do the work;2. The source of the tools and instrumentalities used to do the work;3. the location of the work;4. the duration of the relationship between the parties;5. whether the hiring party has the right to assign additional projects to the
worker;6. the extent of the worker’s discretion over when and how long to work;7. the method of payment;8. the worker’s role in hiring and paying assistants;9. whether the work is part of the regular business of the hiring party;10. whether the hiring party is in business;11. the provision of employee benefits; and 12. the tax treatment of the worker.
Under the general law of agency, the court looks to the hiring party's right to control the way in which the product is made in order to determine if the hired party is an employee or an independent contractor. Some of the factors relevant to this determination are: the skill required, the source of the instrumentalities and tools, the location of the work; the duration of the relationship between the parties, whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party's discretion over when and how long to work; the method of payment, the hired party's role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits, and the tax treatment of the hired party.To determine whether a work is for hire under the Copyright Act of 1976, 17 U.S.C.S. § 101 et seq., a court first should ascertain, using principles of general common law of agency, whether the work was prepared by an employee or an independent contractor. After making this determination, the court can apply the appropriate subsection of § 101 of the Copyright Act.
7
Copyright in a Collective Whole – Newspapers and Periodicals Each separate contribution to a periodical or other collective work is distinct from copyright in the collective work as a whole and vests initially with the author of the contribution.Thus, if a freelance journalist writes an article for a magazine, that is not on a work made for hire basis, the copyright to the article belongs to the journalist but the copyright for the magazine belongs to the publisher.
The Supreme Court in Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) held that in deciding whether the work in question was indeed a work made for hire, the term employee should be interpreted according to common law agency principles.
SC Test to determine a common law employee
13. The level of skill required to do the work;14. The source of the tools and instrumentalities used to do the work;15. the location of the work;16. the duration of the relationship between the parties;17. whether the hiring party has the right to assign additional projects to the
worker;18. the extent of the worker’s discretion over when and how long to work;19. the method of payment;20. the worker’s role in hiring and paying assistants;21. whether the work is part of the regular business of the hiring party;22. whether the hiring party is in business;23. the provision of employee benefits; and 24. the tax treatment of the worker.
Commissioned Work
If a person is found to be an independent contractor, in order for the work to be a work made for hire it must satisfy the requirements for commissioned works.
That is, it must fall into one of the nine categories enumerated in §101 (see above) and there must be a written agreement between the parties.
Note that the employer may nonetheless be entitled to a non-exclusive license by virtue of having paid for the work.
Copyrights Licenses and Assignment
Any or all of the copyright owner's exclusive rights or any subdivision of those rights may be transferred, but the transfer or licensing of exclusive rights is not valid unless that transfer or exclusive license is in writing and signed by the
8
owner or duly authorized agent.Licensing of a right on a nonexclusive basis does not require a written agreement.
§201(d) Transfer of Ownership (1) The ownership of a copyright may be transferred in whole or in part by any means of conveyance or by operation of law, and may be bequeathed by will or pass as personal property by the applicable laws of intestate succession.
(2) Any of the exclusive rights comprised in a copyright, including any subdivision of any of the rights specified by §106, may be transferred as provided by clause (1) and owned separately. The owner of any particular exclusive right is entitled, to the extent of that right, to all of the protection and remedies accorded to the copyright owner by this title.
The Bundle of Rights can be separated for Transfer (not all inclusive to transfer one right)
Copyright is a personal property right, and it is subject to the various state laws and regulations that govern the ownership, inheritance, or transfer of personal property as well as terms of contracts or conduct of business.
Transfers of copyright are normally made by contract. The Copyright Office does not have any forms for such transfers.
The law does provide for the recordation in the Copyright Office of transfers of copyright ownership
Recordation of transfer is not required to make a valid transfer between the parties, it does provide certain legal advantages and may be required to validate the transfer as against third parties.
Termination of Transfers
§ 203 of the Copyright Act of 1976 provides that assuming a grant by its language didn’t terminate on a specific date, any grant of a copyright made after 1/1/78 may be terminated by the author or his heirs during the five years following the end of the 35th year of the grant, or if publication rights are granted then the earlier of 35 years after publication or 40 years after the grant, notwithstanding the duration specified in the grant.
o No Publication 35th yr after grant
o Publication Grant 35 yrs. after publication or 40 yrs. after grant (whichever is earlier)
Written notice of the intent to terminate must be provided not less than 2 years or more than 10 years before the termination date specified. A copy of the notice shall be recorded in the Copyright Office before the effective date of the termination, as a condition to its taking effect.
o Min. 2 yr prior to termination date < written notice of termination < max.10 yr prior to termination date
§203 (4)(A)For works already under statutory copyright protection before 1978, the present law provides a similar right of termination covering the newly added years
9
that extended the former maximum term of the copyright from 56 to 95 years, and for the Sonny Bono 20 year extension to copyright duration for works created under the 1976 Copyright Act (See §304 of the 1976 Act for these important additional termination rights).
Rights of Copyright Author
§106 of the Copyright Act enumerates the exclusive rights held by the copyright owner:
Subject to §§107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:
“Bundle of Rights”
1. to reproduce the copyrighted work in copies or phonorecords;
2. to prepare derivative works based upon the copyrighted work;
3. 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;
4. in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;
5. 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
6. in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.
The unauthorized use of any one of these rights by another is generally considered infringement of author’s copyright.
§106(a), also known as the Visual Artist’s Rights Act or VARA confers special rights on the author of a visual work, even if she transfers ownership of the copyright.
o rights is the right to prevent such distortion or modification or mutilation, of her work which would be prejudicial to her reputation or honor.
o prevent destruction of her work.
This right lasts during the life of the author if the work is after June 1, 1991 or life of the author plus 70 years if the work is prior to that date.
Interesting note: unless there is an express written agreement transferring ownership of the copyright, a painter who sells his work still retains the copyright in the work and the exclusive §106 rights under copyright, even if he no longer has the right to physical possession of the work. The purchaser of the artwork would be limited to display and subsequent sale or transfer of the artwork.
Obtaining Copyright Protection
Act of 1909 with proper notice and registration for certain unpublished works.
Under 1976 Copyright Act, there is no longer any requirement to publish or register the work. Copyright is secured automatically when the work is created, that is, fixed in a tangible medium (copy or phonorecord) for the first time.
10
There are, however, certain advantages to registering the copyright with the Copyright Office.
o The registration is a public record of the author’s copyright claim, thus forestalling an innocent infringer defense;
o Registration is a prerequisite to filing an infringement suit in court; (not required for VARA claim)
o If made within 5 years of publication the registration will be prima facie evidence of the validity of the copyright and the facts stated in the certificate;
o If registration is made within 3 months of publication or prior to an infringement of the work, statutory damages and attorney’s fees will be available to the copyright owner in court actions – otherwise the owner can only avail himself of an award of actual damages and defendant’s profits; and
o The owner of a registered copyright may record that registration with the U.S. Customs Service to protect against the importation of infringing copies.
Registering the work is a fairly simple procedure involving a submission to the Library of Congress, Copyright Office, of
1. A properly completed application form [see chart following for which form to use];
2. A nonrefundable filing fee for each application: and
3. A non-returnable deposit of a copy, or two copies if required, of the work being registered.
Copyright Application Forms
Form PA:for published and unpublished works of the performing arts (musical and dramatic works, pantomimes and choreographic works, motion pictures and other audiovisual works)
Form SE: for serials, works issued or intended to be issued in successive parts bearing numerical or chronological designations and intended to be continued indefinitely (periodicals, newspapers, magazines, newsletters, annuals, journals, etc.)
Form SR: for published and unpublished sound recordingsForm TX: for published and unpublished nondramatic literary worksForm VA: for published and unpublished works of the visual arts
(pictorial, graphic, and sculptural works, including architectural works)
Form G/DN: a specialized form to register a complete month's issues of a daily newspaper when certain conditions are met
Short Form/SE and Form SE/GROUP:
specialized SE forms for use when certain requirements are met
Short Forms TX, PA, and VA:
short versions of applications for original registration. For further information about using the short forms, request publication SL-7.
Form GATT and specialized forms to register a claim in a work or group of
11
Form GATT/GRP: related works in which U. S. copyright was restored under the 1994 Uruguay Round Agreements Act (URAA). For further information, request Circular 38b.
For Renewal RegistrationForm RE: for claims to renew copyright in works copyrighted under the law
in effect through December 31, 1977 (1909 Copyright Act) and registered during the initial 28-year copyright term
Form RE Addendum:
accompanies Form RE for claims to renew copyright in works copyrighted under the 1909 Copyright Act but never registered during their initial 28-year copyright term
For Corrections and AmplificationsForm CA:
for supplementary registration to correct or amplify information given in the Copyright Office record of an earlier registration
For a Group of Contributions to PeriodicalsForm GR/CP:
an adjunct application to be used for registration of a group of contributions to periodicals in addition to an application Form TX, PA, or VA
Length of Copyright Protection
Published or registered on or before 1922 – now in public domain
Published with notice from 1923-63 – 28 years + 47 + 20 (if renewal filed) Published with notice from 1964-77 – 28 years + automatic 67 years extension
Created before 1/1/78 but not published – protected from 1/1/78 for life + 70 years or 12/31/2002, whichever is greater
Created before 1/1/78 but published between then and 12/31/2002 – protected from 1/1/78 + life + 70 years or 12/31/2047, whichever is greater.
Created 1/1/78 or after o Individual life + 70 years o Corporation, work made for hire, anonymous, or pseudonymous – earlier of
95 years from publication or 120 years from creation
Note: The duration of protection for joint works under the 1976 Copyright Act, is determined by the life of the author who lived longest.
If the author or coauthor is a corporation, work made for hire, anonymous, or pseudonymous author, then term is the earlier of 95 years from publication or 120 years from creation, and not life + 70 years.
Copyright Infringement
§501 of the 1976 Copyright Act provides that:
12
(a) Anyone who violates any of the exclusive rights of the copyright owner as provided by §106, subject to the limitations on rights found in §§107-122 (defenses), or of the author as provided in §106A(a), or one who imports copies or phonorecords into the United States in violation of §602, is an infringer of the copyright or right of the author, as the case may be.
Thus, anyone who copies or uses protectable expression from a copyrighted work without the permission of the copyright owner (or as allowed by statute) is an infringer.
A plaintiff must establish that he or she is: Owner of the applicable right of copyright; That there is substantial similarity between the works; That the defendant had access to the plaintiff’s work; and The defendant made an unauthorized use or copy of plaintiff’s
copyrightable expression.
A claim for vicarious liability (new it was happening and did not stop it) or contributory infringement (helped) is also possible under the copyright laws.
Remedies for Copyright Infringement
Chapter 5 of the 1976 Copyright Act details the remedies available to copyright owners whose works have been infringed. There are both civil and criminal remedies, some of which are:
§502 – Injunctions to prevent or restrain infringement
§503 - Impounding and Disposition of Infringing Articles - court may order that the infringing goods be impounded.
§504 – Damages and profits – the copyright owner’s actual damages and any additional profits of the infringer or statutory damages if the plaintiff qualifies for statutory damages. To qualify the copyright owner must have registered the work within the first 90 days of publication or prior to the infringement. (not required for a VARA claim)
§505 – Cost and attorney fees – granted at court’s discretion to the prevailing party. Plaintiff must be eligible for the statutory damage election to receive the award.
§506 – Criminal Offenses – for any person who willfully infringes a copyright either for commercial advantage or reproducing phonorecords or copyrighted works which have a total retail value of more than $1000. (see also 18 USC §2319)
Defenses against infringement Fair Use - §107 of the Copyright Act of 1976 provides a limitation on the copyright owners exclusive rights. This allows the fair use of a copyrighted work for purposes such as criticism, comment, news reporting, teaching, scholarship and research.
Parody and satire is also considered a fair use as social commentary and criticism.
Statute of Limitations
Civil, 3 yr.
Criminal, 5 yr.
13
Factors for fair use
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.
The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.
Innocent infringer – no copyright notice - was not put on notice that the material was subject to copyright protection.
Work is in the public domain.
Work is original to defendant as well – did not copy plaintiff’s copyrightable expression.
Statute of Limitations – 3 years for civil cases, 5 years for criminal action.
First Sale Doctrine - §109 provides that a purchaser of a copyrighted work can sell, give away or otherwise dispose of the copy or phonorecord (there are certain prohibitions on phonorecord and software lending or renting) without obtaining the prior authorization of the copyright owner. The purchaser cannot however reproduce (except for certain private use), create a derivative version, or publicly perform the work. For example, if you buy a CD, you may copy that CD onto an audiotape for your own use, but you cannot sell or transfer hat audiotape copy. You may sell the original CD, but like the copy the original cannot be rented or loaned. There is a statutory exception for public libraries.
Copyright registration obtained by fraud.
§110 Point of Sale exceptionException to the “public performance” right found in §106, allows retailers of playback equipment to play them publicly for purposes of selling the equipment. Limitations found in §§108-122.
Selected sections of the 1976 Copyright Act
17 U.S.C.A. §§101-810§101 - Definitions
§102(a)- Works that are protected under the Copyright Act. Literary works; musical works
(including any accompanying words); dramatic works (including any accompanying music); pantomimes & choreographic works; pictorial, graphic and sculptural works; motion pictures & other audiovisual works; sound recordings and architectural works. [Computer programs and “compilations” may be registered as
14
literary works.]
§102(b) - Works that are not copyrightable-i.e. ideas, procedure, system, concept, method of operation, research, etc.
§106 - Rights-Gives © owner exclusive right to do and to authorize to: reproduce the © work in copies or phonorecords; prepare derivative works; distribute copies or phonorecords; perform work publicly; display © work publicly; perform work publicly via digital audio transmission (in case of sound recordings).
§106(a) - VARA-Visual Artists Rights Act- Gives moral rights of attribution, integrity, honor
and protection against mutilation or destruction to the author of a qualifying visual work whether
or not the author retains © ownership. Author can sue in federal court without registering the
work.
§107-122 - Limitations to §106 Rights.
§107 - Limitations on Rights provided in §106-Fair Use - for purposes of criticism, comment, news reporting, teaching, scholarship or research.
§109 - First Sale Doctrine-Generally, can sell, give away or otherwise dispose of copy or phonorecord (see phonorecord and software prohibitions mentioned above) without authorization from © owner, but cannot reproduce (except for private use) or publicly perform it.
§110 - Exemption of certain public performance and displays. Four part-test; single or limited receiving apparatus; commonly used in private homes; provided free of charge; not further transmitted to public.
§115 - Compulsory licensing- Permitted use upon payment of specified royalties and compliance with statute .
§115(c) - Royalties (mechanical) – sound recording compulsory license fees to re-record a musical composition.
§201(a) - Ownership “vests initially in author or authors of work.” Joint workers are co-owners. Joint Authorship-issue of intent and copyrightable contribution. Majority view – show intent & separately copyrightable works; Minority View- Parties intend to be co-authors, final work combined copyrightable - even if investor only contributes money.
§201(b) - Works made for hire-Exception to 201(a).
§201(c) - Contributions to Collective Works
15
§203(a) - Termination of transfers and licenses granted by author after 1/1/78
§204 - Transfer of © not valid unless in writing or by operation of law.
§301 - Preemption. 3 conditions: state law must beequivalent; right must be work of authorship fixed in tangible medium of expression; must come within the subject matter of © as specified by sections 102, 103and rights under 106.
§302(c) - Duration of copyright for works created on or after January 1978. (Life + 70 years for individual; or earlier of 95 years from publication or 120 years from creation for corporation, work made for hire; anonymous, or pseudonymous authors)
§302(e) - Presumption that 95 yrs after the work is published or 120 yrs after creation, copyright law presumes death of the author.
§303 - Duration of work created but not published or © before 1/1/78. If author alive and work not in public domain, work subsists (survives) from 1/1/78 & endures for §302 term. Work may not expire before 12/31/2002. If published before 12/31/2002, © shall not expire prior to 12/31/2047.
§304 - Owners renewal rights. 19 years copyright extension and Sonny Bono (CTEA) 20 year extension. Termination of rights and licenses granted pre-Jan. 1, 1978 to recapture extension periods provided for in this section.
§401(d) & 402(d) - Publication. If notice is on published copy or phonorecord, courts give no weight to innocent infringer defense as mitigation of actual or statutory damages except as in §504(c)(2).
§401-406 - Notice of Copyright, i.e. visual, phono or sound recordings, government or collective work.
§405(a)(2) – For works published prior to March 1, 1989 , allows copyrightable work published without required notice to hold incipient copyright for 5 years - thereafter if omission is cured through registration and reasonable effort by adding notice to all copies distributed in U.S. after the omission is discovered, copyright is perfected and valid retroactively for entire period after cure.
§407 - Deposit (mandatory) of Copies or Phonorecords with Library of Congress.
§501 - Copyright Infringement
§502 - Injunction as remedy for infringements
§503 - Impounding and Disposition of Infringing Articles as remedy for infringement.
16
§504(a)(b) - Damages and Profits as remedy for infringement – Plaintiff’s loss & Defendant’s profit (subject to apportionment.)
§504(c) - Statutory Damages as remedy for infringement-entitled to elect in lieu of actual damages if timely registered (*prior to infringement or first 90 days after publication)
§505 - Costs and Attorney fees as remedy for infringement to prevailing party. (Plaintiff’s must qualify registration as * above)
§506 - Criminal Infringement. Also 18 USC §2319.
Title II of Digital Millennium Copyright Act
§512 – Safe Harbor Provisionsgives ISP providers safe harbor from direct or secondary © liability when they offer transmission or routing services, information location tools, or system caching or storage.
§601(b)(1) - Right to import certain goods bearing ©.
§1101 - Piracy-Unauthorized fixation & trafficking in sound recordings & music videos.
§1201 – Anti-Circumvention Provisions. Prohibits the circumvention of a "technological measure" that "effectively controls access to a work" protected under copyright law.
18 U.S.C.A.
§§ 2318-19A - (Vessel Hulls) Criminal-Record Piracy & Copyright Infringement
17
WORK MADE FOR HIRE AGREMENT
REPRESENTATION/WARRANTY AGREEMENTAgreement by and between Jane Doe, located at 123 Author Lane, Bookhaven, New
York 12345 (hereinafter also referred to as “OWNER”), and_____________________________________________________________________________(hereinafter referred to as “you” or “your”)
This Work-Made-For-Hire Agreement when signed by OWNER and you will confirm the following as our mutual understanding and agreement:
In consideration of the total sum-certain amount of ____________________dollars ($ ), you agree to create, provide to and perform for OWNER the specially ordered work and services, referred to below, on a work-made-for-hire basis, and on the terms and conditions hereof, to be used as a contribution to a collective work or to a compilation, or as a part of an audiovisual work, and/or for other uses. All rights of copyright, authorship and ownership to the specially ordered work and services will vest in OWNER as the author. You obtain no rights of copyright, no right to further compensation, nor any other property or equitable rights in the specially ordered work and services, or in the work in which it is used. To the extent the rights, including copyright, to the specially ordered work and services do not automatically vest in the OWNER, you hereby transfer to OWNER all such rights, including world-wide copyright and renewal rights. You understand and agree that OWNER reserves the right to terminate your work and services before completion. If so terminated, Owner will retain all rights to the work as stated above, and you shall be entitled to a fair and reasonable portion of the above stated compensation, based upon the amount of work/services provided to OWNER.
You represent and warrant to OWNER, its successors, designees, licensees and transferees, (all hereinafter referred to as “User”) that all items and materials, including photographs, visual images and designs, writings, dialogue, other copyrightable works, and ideas, created and provided by you to OWNER hereunder, will not obligate User to make payment to any other party, nor violate the right of privacy or publicity of any person or party, nor constitute a libel or slander against any person or party, nor infringe upon the trademark, service mark, trade dress, copyright, literary, dramatic, artistic, intellectual, or other legal or equitable rights of any person or party. You agree that Owner may use your name/identity in connection with the work and services but is not obligated to do so.
You understand that the information provided to you, used and created by you, and that which becomes known by you in connection with your work and services for OWNER, which includes ideas, concepts, art, audio-visual, and written materials from which you will be working, is to be treated by you as proprietary, trade secret, and confidential information of OWNER. You warrant you will not disclose or use such information separate of your services rendered, and without the OWNER’ s prior written approval.
The specially ordered work and services you will create and provide to OWNER, which duties you cannot assign are: _____________________________________________________________________________________________
18
_______________________________________________________________________________________________________________________
The due date(s) for the work and services:______________________________________
_____________________________________________________You agree to return to OWNER or OWNER’ s designee, all the copyrightable works,
and elements thereof, information, and materials related thereto that were provided to you, obtained by you, and that developed and created hereunder, within twenty for (24) hours of the last day of work and services, or as otherwise indicated to you in writing by OWNER or OWNER’ s designee. Furthermore, you are to assert no lien against or otherwise cause the materials and rights of OWNER to be encumbered. OWNER’ s designee hereunder is ___________________________________
You represent and warrant that: you have the full right and authority to enter into this Agreement; you have not made any contract or commitment in conflict with this Agreement, nor know of any potential conflict that would interfere with or prevent the use of the work and your services; and that you agree to indemnify User for breach of any kind and all above representations and warranties. You also agree that the warranties made, rights obtained, and duty indemnification shall survive the termination or completion of the work and services under this Agreement.
The undersigned have read, understand and approve this Agreement, and indicate acceptance by signing in the space below.
AGREED AND ACCEPTED:
JANE DOE _________________________ ________________________ Print Name Owner: Print Name
By:______________________ By:_____________________ Signature Signature
________________________ Date:____________________ Tax ID Number
Date_______ ___________
19
IDEAS
General Overview
A constant flow of creative ideas is crucial to a variety of industries but is perhaps nowhere more evident to the public than the entertainment industry and Everybody is generally free to copy or use ideas.
This expectation of compensation for an idea is the focus of the Law of Undeveloped Ideas.
Laws Protecting Ideas
Society feels that public policy is served by providing incentives to people to create and disclose new ideas and offering legal rights in new ideas may accomplish this.
Ideas are protected under the common law and actions for infringement are brought in state courts.
Duration of Idea Protection
Determined by the terms of the contract – may be indefinite.
Elements of IDEA Misappropriation
1. The idea has to be novel. This comes under the “I know it when I see it” test, depends on the context. Case law has identified three views of novelty:
a. The idea must be original to the plaintiff – he should have conceived of the idea himself;
b. The idea must be innovative and creative in nature; or
c. The idea must be both original to the plaintiff and innovative.
2. The idea is in a concrete form. This requirement is generally held to mean that the idea is not abstract and is capable of being reduced to writing or used within 24 hours. Courts have three views of concreteness in case law:
a. The idea must be reduced to tangible form – it must have been committed to writing or incorporated into a tangible product;
b. The idea must be fully developed – reduced to a detailed form ready for immediate use with little or no additional work on the user’s part; or
c. The idea must be both reduced to tangible form and fully developed.
3. The idea must have been used by the defendant.
4. The plaintiff had an expectation of payment (see theory of recovery supra).
Recovery for Idea Misappropriation
20
1. A claim that the recipient of the idea expressly promised to pay the submitter if he used the idea - the express contract theory. This is the best way to protect an idea – enter into a contract.
2. That the recipient impliedly promised to pay – implied contract theory. Courts will look to see whether a contract was intended to be made even though it was not expressly stated. Some of the factors the courts look to determine an implied contract or the parties’ expectations are:
a. whether the defendant has paid for ideas in the past;
b. whether the plaintiff has customarily been paid for his ideas; and
c. whether there is an industry custom for paying for ideas.
Express declaration of not paying for an idea will be upheld by the courts
3. That the law imposes an obligation to pay on a quasi-contract/unjust enrichment ground if the idea is used. This is based on whether the defendant received a benefit for which equity and justice require him to pay – unjust enrichment. The intent of the parties is generally not relevant.
4. That the recipient of the idea took property – the idea – and thus committed the tort of conversion. This theory is extreme and rarely used.
5. That a fiduciary relationship existed and was violated by the recipient - breach of confidentiality. The plaintiff must show the existence of a duty of confidentiality.
How does recovery affect the novelty requirement
Courts vary the amount of novelty required in an idea depending on the theory of recovery. To recover on a quasi-contract theory of unjust gain the idea must be truly novel, for an implied contract slightly less so and even less novelty is required for an express contract.
Some courts, however, find that in order for consideration to be sufficient to support a contract, even an express contract, the idea must be novel to some extent.
For a beach of a confidential relationship the court will generally not require any novelty – the breach of a fiduciary duty is enough to support recovery.
California Rule
If the person who submitted the idea is considered a professional submitter, that is, a person who works in the advertising or entertainment industry and regularly submits ideas as a profession, courts will usually imply an obligation to pay onto companies who use ideas submitted by such professionals on a services rendered basis, quantum meruit.
Submitter does not need to prove all of the elements of a misappropriation.
21
Submission Agreements
The idea holder may present the recipient with an agreement prior to disclosing the idea (or visa versa). This agreement will generally indicate that the material to be revealed is confidential and that it is the holder’s intent to realize and protect the maximum monetary and economic value of the confidential material. (See example agreement following this section.)
The idea recipient may refuse to look at any idea which is submitted unless the submitter signs its own submission agreement. This agreement usually states that conditions under which the recipient will pay for the idea.
Defenses to Idea Misappropriation
1. Independent development – the defendant must
show that he developed the idea independently, without recourse to the plaintiff’s idea or received it from a different party. Many companies have implemented practices to keep unsolicited ideas segregated from their creative departments in order to show that the idea could not have been appropriated from the plaintiff.
2. The idea was not novel – see novelty, supra.
3. The idea was not concrete – see concrete form,
Submission Letter
Re: Confidential Information of (client)
Dear Recipient.
We are pleased to inform you and your company (both hereafter referred to as you or your) that (law firm) is legal counsel to the (client) hereinafter known as (C). Our client will be disclosing to you information about a (subject matter of idea i.e. script, toy, process) and related marketing concepts that C requires you to treat as Confidential Material. The Confidential Material is valuable to C and is disclosed to you for evaluation purposes only. Our client requires that no use or disclosure of the Confidential Material be made by you, in whole or in part, until C enters into a written agreement specific to your use of the Confidential Material.
Please understand that C’s intent is to realize and protect the maximum monetary and economic value of its Confidential Material. To this end, by meeting with C and reviewing its Confidential Material, you agree to use all reasonable safeguards to prevent unauthorized disclosure and unauthorized use of the Confidential Material by yourself, your officers, employees, affiliates, and other contacts. This duty of confidentiality, non-disclosure and non-use is to be honored for the maximum period allowed by law.
C thanks you for your understanding, interest and trust.
Sincerely,
22
PATENTS
Overview of Patent Law
Inventions are the motor which has driven our society from its rural agrarian roots to an industrial marvel. The writers of the Constitution recognized this when they gave Congress the power to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.
Congress used its power and enacted the Patent Act which enumerated the protections which accrue to the holder of a patent, as well as the requirements for attaining a patent. The Founding Fathers and Congress reasoned that allowing the inventor to profit from his invention would provide an added stimulus or impetus to creativity.
Patent Laws and Procedures
The Patent Act is codified at 35 U.S.C. §§ 1-376. Rules relating to patents may be found in Title 37 of the CFR and the United States Patent and Trademark Office’s (USPTO) Manual of Patent Examining Procedure contains useful information.
The USPTO website at www.uspto.gov provides not only information on patents and the application procedure but provides for online filing of applications.
Patent Definition
A patent for an invention is the grant of a property right to the inventor, for a limited period of time, issued by the Patent and Trademark Office.
Types of Patents & Duration of Exclusivity
Utility patents (20yrs. from filling date after 1995, prior 17 yrs. from grant) may be granted to anyone who invents or discovers any new and useful process, machine, article of manufacture, or compositions of matters, or any new useful improvement thereof;
Design patents (14yrs. from date of grant) may be granted to anyone who invents a new, original, and ornamental design for an article of manufacture; and
Plant patents (20yrs. from filling date after 1995, prior 17 yrs. from grant) may be granted to anyone who invents or discovers and asexually reproduces any distinct and new variety of plants.
23
Patent Rights
The right conferred by the patent grant is, in the language of the statute and of the grant itself, “the right to exclude others from making, using, offering for sale, or selling” the invention in the United States or “importing” the invention into the United States.
What is granted is not the right to make, use, offer for sale, sell or import, but the right to exclude others from making, using, offering for sale, selling or importing the invention.
Transfer of Patent Rights
A patent is personal property and may be sold to others or mortgaged; it may be bequeathed by a will, and it may pass to the heirs of a deceased patentee.
The owner of a patent may grant licenses to others. Since the patentee has the right to exclude others from making, using, offering for sale, or selling or importing the invention, no one else may do any of these things without his/her permission.
A patent license agreement is in essence nothing more than a promise by the licensor not to sue the licensee. No particular form of license is required; a license is a contract and may include whatever provisions the parties agree upon, including the payment of royalties.
The patent law provides for the transfer or sale of a patent, or of an application for patent, by an instrument in writing.
Assignee, when the patent is assigned to him or her, becomes the owner of the patent and has the same rights that the original patentee had.
The Office records assignments, grants, and similar instruments sent to it for recording, and the recording serves as public notice.
Items not Patentable
1. Printed materials
2. Products of nature* (unimproved or unaltered by man)
3. Laws of nature
4. Mathematical formulas or methods of calculation (exception is found with business method patents)
5. Fraud based inventions – things which are likely to injure the public or to promote fraud.
Exception* – Patenting life - Products of nature which can be patented: The Court held in Diamond v. Chakrabarty, 447 U.S. 303, 313 (1980) that man made microorganisms are patentable under a “but for human hands” test: “the distinction [is] not between living and inanimate things, but between products of nature, whether living or not, and human made inventions.” Thus, if a living thing would not exist but for human hands, it is patentable.
Requirements for Patentability
24
I. The invention must fall under one of the categories of patentable objects as delineated in §101 of the Patent Act:
1. Machines –constructed things;
2. Processes – process, act or method – primarily industrial or technical processes;
3. Articles of manufacture - articles that are made - includes all manufactured articles;
4. Compositions of matter - chemical compositions which may include mixtures of ingredients as well as new chemical compounds;
5. New and useful improvements of the above (new combinations of old products and processes to produce a new and useful result); and
6. Business methods.
7.
II. The invention must be novel - §102(a):
A person shall be entitled to a patent unless--
(a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent.
If the invention is not novel the applicant’s invention will be deemed “anticipated” and will not qualify for a patent. The invention may be anticipated by prior public knowledge, a prior patent of the same invention, or a prior description of the invention published in a printed publication that teaches the art (“prior art”).
The court in In re Borst, 345 F.2d 851 (C.C.P.A.) (1965) cert. Denied, 382 U.S. 973 (1966) discussed the criteria for determining “known by others” by first holding that the invention must have been fully disclosed and second that the disclosed invention must have been accessible to the U.S. public. It further held that the prior knowledge must have been sufficient to allow a person of ordinary skill in the relevant art to reduce the invention to practice.
First to Conceive Rule: The requirement of novelty in §102 reflects the aim of U.S. Patent law to protect the first person to invent something, not the first to patent. However, §102(g) requires that the inventor use reasonable diligence to reduce his invention to practice to maintain priority.
§102(b) provides that the invention shall not be entitled to a patent if “the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country more than one year prior to the date of the application for patent in the United States. . .”
The Twelve Month Clock applies to both the “on sale” and “public use” bars in §102(b). If either of the two is found to have occurred more than 12 months prior to the application, the inventor loses his right to a patent.
A. The on sale bar: The following conditions must have occurred 12 months prior to the application:
1. The product is the subject of a commercial offer for sale and
2. The invention must be ready for patenting, either by
25
a. Proof of actual RTP- Reduction to Practice usually involves actually making the invention.
b. Proof of constructive RTP – preparation of drawings that would enable a person of ordinary skill in the art to make the invention.
B. The public use bar: When an inventor allows his invention to be used even by others, with or without compensation, this is also a public use and starts the twelve month clock.
1. Experimental use exception: the use of an invention by an inventor or others under his control for purposes of perfecting the invention will not bar the receipt of a patent under 102(b). Factors relevant to whether a use is public or experimental:
a) length of test period;
b) whether payment is made by others who use the invention;
c) whether users agree to keep it a secret;
d) whether records were kept of progress;
e) whether persons other than the inventor performed the experiments or tests;
f) how many tests were performed; and
g) how long the testing period was in relation to tests of other similar invention.
2. Accidental use exception: occurs when an inventor stumbles on the invention for the first time but is not immediately able to duplicate it.
3. Foreign Use exception: Unpatented use without enabling disclosures in a foreign country is not a public use bar to a US patent.
III. The invention must be non-obvious
§103 provides that an invention is not patentable if it would have been obvious to a person having ordinary skill in the pertinent art as it existed when the invention was made. The requirement of non-obviousness looks at the relevant prior art to determine whether an invention would have been obvious at the time of invention, even if none of the prior art was identical. This issue was addressed by the Supreme Court in Graham v. John Deere Co., 383 U.S. 1, 17 (1966). The Court held that three factors need to be considered in order to make the determination:
1. The scope and content of the pertinent prior art. In considering the scope of the prior art the court will consider that prior art which is reasonably pertinent to the particular problem solved by the invention.
2. Differences between the pertinent prior art and the invention at issue.
3. The ordinary level of skill in the pertinent art.
\
Courts may also consider what are termed secondary considerations such as:
1. The commercial success of the patented application;
2. Commercial acquiescence by the competition;
3. Commercial licensing;
26
4. Expert acknowledgements;
5. Failure of others to invent despite long felt demand; and
6. Invention by others at the same time.
IV. The invention must be useful.
§101 of the Patent Act provides that “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore”. This section encompasses both the requirements of novelty, which has been discussed above, and usefulness.
The term “useful” in this connection refers to the condition that the subject matter must have a useful purpose, that there is a current, significant, beneficial use for the invention. “Useful” includes operativeness, that is, a machine which will not operate to perform the intended purpose would not be called useful, and therefore would not be granted a patent.
Obtaining Patent Protection
In order to gain protection for his invention, the inventor must apply for and receive a patent from the United States Patent and Trademark Office. §§111-122 of the Patent Act address the application process. Some of the basic components of the application are:
The application must be in writing. (§111)
The application shall include a specification or “written description of the invention and 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 . . . to make and use the same. . .” (§112)
The specification must include a claim or claims “particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.” §112. This is a very important part of the application as the claims define the scope of the protection afforded by the patent.
The application shall include a drawing if it is “necessary for the understanding of the subject matter sought to be patented,” §113, or a model or specimen, (§114)
The applicant must include an oath to the effect that “he believes himself to be the original and first inventor” of the invention and state which is his country of citizenship. (§115)
A fee must be paid.
Inventions which are joint creations may be filed jointly and may be owned jointly. Any joint owner of a patent, no matter how small the part interest, may make, use, offer for sale and sell and import the invention for his or her own profit provided they do not infringe another’s patent rights, without regard to the other owners, and may sell the interest or any part of it, or grant licenses to others, without regard to the other joint owner, unless the joint owners have made a contract governing their relation to each other.
27
It is accordingly dangerous to assign a part interest without a definite agreement between the parties as to the extent of their respective rights and their obligations to each other if the above result is to be avoided.
After the application is filed it is assigned to an examiner who evaluates the application for its compliance with the legal requirements as well as searching through U.S. patents, publications of patent applications, foreign patent documents, and available literature, to see if the claimed invention is new, useful and nonobvious and if the application meets the requirements of the patent statute and rules of practice. A decision is reached by the examiner based, inter alia, on the above mentioned factors. If the application is rejected as filed, which happens quite often, the applicant must request reconsideration in writing with specific reference to the Examiner’s grounds for rejection. The applicant must clearly indicate why they believe the inventions should receive a patent in view of the objections made by the examiner in rejecting the patent application. This often involves a series of correspondence between the USPTO and the applicant, which correspondence may later be used to clarify the limits of the patent. If the application is rejected a second time, that rejection is usually final.
Maintenance Fee’s Maintenance fees need to be paid every 3 ½, 7 ½ and 11 ½ years or else the patent is cancelled. (Subject to certain statutory exceptions.)
Patent Infringement
§271 of the Patent Act provides that: “whoever without authority 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 therefor, infringes the patent.”
There are two types of patent infringement:
1. Literal infringement – where the infringing article is identical or “reads on” to the claims of the patented article held by the plaintiff.
2. The doctrine of equivalents (D/O/E/) – occurs when the infringing article “performs substantially the same function in substantially the same manner to obtain the same result.” Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605 (1950). A D/O/E/ claim is examined on an element by element basis also in light of the file wrapper* to determine whether any of the claims are equivalent. It is not applied to the invention as a whole.
*File wrapper – term of art equivalent to prosecutorial history. All of the correspondence dealing with the prosecution of the patent including such items as action letters and responses to action letters.
The Act also imposes liability for:
§271(b) - Inducement of Infringement– anyone who actively induces infringement is liable. Some activities which are considered to be active inducement are: the distribution of instructions on the use of a patented process; encouragement of a licensee to breach his license
§271(c) – Contributory infringement – Those who sell components made or adapted especially for use in an infringement of a patent are held liable for contributory
28
infringement while those who sell commodities which have a substantial non-infringing use are not liable for infringement.
Determination of Patent Infringement
“The construction of a patent, including terms of art within its claim, is exclusively within the province of the court.” Markman v. Westview, 517 U.S. 370, 372 (1996). This holding has led to so called Markman hearings which are held for declaratory construction of claims.
A jury decides the question of infringement – whether the defendant’s device actually infringed the patent.
Defenses for Patent Infringement
1. The patent is invalid for being non-obvious, not novel or not useful;
2. “Fraud on the Patent Office” - the defendant needs to prove that the holder of the patent made misrepresentations or withheld material information during the patent application process and did so intentionally.
3. Misuse of the patent – equivalent to the equitable doctrine of unclean hands. The patentee uses his patent in such a way as to gain more market power than the grant of the patent was intended to convey. For example, if the patentee puts a condition into a license to make, use, sell or import the patented invention on the licensee’s agreement to purchase goods or another license from the patentee.
4. The patent is cancelled for lack of payment of maintenance fees.
5. The invention was abandoned - §102(c) refers to the intentional surrender of the invention to the public.
6. Innocent infringer - §287 provides that notice must be given that the article is patented. If no notice is given to the infringer, either through such notice or by the filing of an action of infringement, the infringer is not liable for money damages.
7. The patent has expired.
8. Experimentation exception: a person may make a patented article or process i). to ascertain whether the specifications are accurate or ii). for experimentation which is not for profit or business purposes – “philosophical experimentation.”
9. Equitable Defenses:
Laches: 1. The patentee unreasonably and inexcusably delayed bringing an infringement action and 2. the delay caused material prejudice to the defendant. If the plaintiff delays suit for more than 6 years after the date he knows or should have known of the infringement there is a presumption of laches.
Prosecution laches: there was an unreasonable and unexplained delay in prosecuting the patent application which may bar enforcement of the patent.
Equitable Estoppel: If the defendant can prove that the patentee i). by misleading conduct led the defendant into reasonably inferring that the patentee did not intend to enforce his patent, ii). the defendant relied on that conduct and
29
iii). due to his reliance the defendant will be materially prejudiced if the suit proceeds, then the defense will bar plaintiff’s claim.
File Wrapper Estoppel or prosecution history estoppel: Patent owner is estopped from later reclaiming subject matter which he gave up during prosecution of the patent.
Assignor Estoppel: An inventor is estopped from challenging the validity of his patent which he had earlier assigned.
Remedies for Patent Infringement
Injunctive relief: §283 provides that courts “may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent.” Courts will usually grant a prevailing plaintiff a permanent injunction while preliminary injunctions are granted on a clear showing of infringement of a valid patent.
However, if the court finds that the plaintiff has suppressed the patent (suppression under §102(g) where an inventor opts to withhold the technology, either by maintaining it as a trade secret or simply neglecting it), that is, not exploited it in any way, the court may deny the injunction and instead require that the infringer pay the patentee a reasonable royalty while continuing to produce the item.
Damages: §284 – the court shall award damages “adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer. . .” Courts read the foregoing to mean all proximately caused damages such as lost profits on sales of the patented device as well as lost profits on sales of unpatented articles sold with the patented one.
Panduit Test for lost profits (Rite- Hite v. Kelley Corp., 774 F. Supp. 1514, 1540-41 (E.D. Wis. 1991) – patentee must establish:
1. Demand for the patented article;
2. Absence of acceptable non-infringing substitutes;
3. Manufacturing and marketing capacity to meet the demand; and
4. The amount of profit he would have made.
Entire Market Value Rule - The entire market value rule permits recovery of damages based on the value of an entire apparatus containing several features, when the feature patented constitutes the basis for customer demand. Rite- Hite v. Kelley Corp., 774 F. Supp. 1514, 1542 (E.D. Wis. 1991).
Treble damages - §284 also provides that the court may increase the damages up to three times the amount found or assessed. This is usually applicable only to willful infringement.
Attorney’s fees & Costs - §285 – Allows the court to award attorney fees to the prevailing party in exceptional cases. This is usually a willful infringement by the defendant or unclean hands by the plaintiff.
Time Limitation on Damages - §286 – the six year rule – prohibits the recovery of damages for any infringements that occurred more than 6 years prior to filing suit.
30
Relevant Patent Statutes
United States Constitution – Article 1, Section 8, Clause 8: To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.
35 U.S.C.A. §§1-376
§101 What can be patented. Matter, processes, business methods, machines, articles of manufacture, or new and useful improvements.
§102 Must be novel
§103 Must be non-obvious
§101 Must be Useful
§§111-122 Application requirements and procedures
§154 Utility Patent. Duration 20 yrs from filing.
§161 Plant Patent-Asexually reproduced. Duration 20 yrs from filing
§171 Design Patent, Duration 14 yrs from date patent granted.
§271 Direct/Contributory Infringement
§283 Injunctive relief
§284 Damages - no less than reasonable
royalty - up to 3x assessed or awarded.
§285 Attorney fees-Only in exceptional cases
§286 Time Limitation on damages – 6 year rule
§287 Notice and marking requirement for damages
31
TRADE SECRETS
Overview of Trade Secrets
Coca-Cola® is an immensely popular drink bringing in ever increasing global revenues. Obviously, Coke® is a good product and one that competitors would like to produce. However, it isn’t that easy just to go out and reproduce a drink with the exact taste of Coca-Cola®. You can’t go to a recipe book and get the formula and a hit or miss approach to reaching the formula hasn’t seemed to work either. Coca-Cola®’s huge success and competitive advantage is owed in part to its decision to keep the formula a trade secret.
Definition of Trade Secret
"Trade secret" means information, including a formula, pattern, compilation, program device, method, technique, or process, that:
(i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable using proper means by other persons who can obtain economic value from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. (Uniform Trade Secrets Act §1(4)). In the alternative, many courts have adopted the formulation used by the Restatement of Torts, §757: "
i. Any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. In other words, it is any information which would give a business an economic competitive advantage.
A trade secret does not need to be novel or inventive.
However, it does need to be in continuous use in the claimant’s business. One of the most successful trade secrets to date has been the formula for Coca-Cola® (Coke®).
Trade secrets work as an alternative to and broadening of the patent system. In our Coca-Cola® example, Coke® could have decided to get the formula patented. But, this would have given them protection for only a limited period of time after which the formula would be in the public domain- available to anyone who wanted to exploit it. By keeping the formula a trade secret, Coke® has protected its economic interest for a potentially unlimited period of time.
Trade secrets also protect subject matter which could not receive a patent (e.g., client lists or pricing information are not patentable, they are eligible for protection as trade secrets).
32
Protection of Trade Secrets
Trade secrets are protected by common law theories of misappropriation, by the states that adopted all or part of the Uniform Trade Secrets Act and the Federal Economic Espionage Act of 1996.
Many states also provide protection for trade secrets in their statutes.
The American Law Institute provides a thorough discussion of trade secrets in Restatement (Third) of Unfair Competition (1993).
Contract law plays a large role in the protection of trade secrets.
Judicial view of Trade Secrets
There are two different conceptions of trade secret protection.
(i) Some courts see trade secret law as ensuring proper conduct. These courts look to whether the information which was appropriated was acquired in a fair and ethical manner.
(ii) The others view trade secret law as creating a proprietary interest akin to copyright, patents or trademarks. These courts emphasize the value and secrecy of the subject matter for which the trade secret status is claimed.
Judge Posner finds these views to be complementary. In Rockwell Graphic Systems, Inc. v. DEV Industries, Inc., 925 F.2d 174, 178 (7th Cir. 1991), he finds that the two different conceptions of trade secret protection are better described as different emphases.
(i) The first emphasizes the desirability of deterring efforts that have as their sole purpose and effect the redistribution of wealth from one firm to another.
(ii) The second emphasizes the desirability of encouraging inventive activity by protecting its fruits.
The approaches differ, if at all, only in that the second does not limit the class of improper means to those that fit a preexisting pigeonhole in the law of tort or contract or fiduciary duty--and it is by no means clear that the first approach assumes a closed class of wrongful acts, either.
Determination of Trade Secrets
The court in Forest Laboratories, Inc. v. Formulations, Inc., 299 F. Supp. 202, 205-206 (E.D. Wis. 1969), laid out the factors to the determination of trade secret status:
1. the extent to which the information is known outside of the plaintiff’s (P’s) business;
2. the extent to which it is known by employees and others involved in the business;
3. the extent of measures taken by P to guard the secrecy of the information;
4. the value of the information to him and to his competitors;
33
5. the amount of effort or money expended by P in developing the information; and
6. the ease or difficulty with which the information could be properly acquired or duplicated by other.
Confidential Relationships in Trade Secret Law
A duty of confidentiality requires that the party who gains knowledge of the trade secret refrain from disclosing or using that secret without the trade secret owner’s permission.
The duty can arise in several ways:
1. Parties in special relationships – Parties will be found to be in a confidential relationship with the claimant if they are an agent-principal relationship (employer-employee relationships are included), are partners or joint ventures or if they are in some other fiduciary relationship such as an attorney-client.
2. Express contracts – parties may expressly contract to maintain a trade secret in confidence. (See Non-Disclosure Agreement at end of this section.)
3. Implied contracts –If the defendant has notice that the information which is to be disclosed is to be kept in confidence and agrees to receive the information or, in the alternative, does not object prior to receipt, may be considered to have implicitly agreed to abide by the duty of confidentiality.
Trade Secret Protection (employer/employee relationship) and Misappropriation
The employer can require the employee to enter into an express agreement not to disclose or use any trade secrets belonging to the employer.
The employer may also ask the employee to sign an agreement in which he assigns in advance all of the trade secrets which he may develop during his employment.
The employer may also ask the employee to sign a non-compete agreement in which the employee will agree to not compete with the employer for a specific time in a specific area (courts narrowly interpret these agreements).
Even if there is no express agreement of confidence, the employee, as agent, owes a duty of confidentiality to his employer, the principal. This duty remains even after employment is terminated.
Note: if the employee owns the same trade secret he owes no duty to the employer regarding use or disclosure of the secret.
34
Doctrine of Inevitable Disclosure
Inevitable disclosure applies if a former employee has taken or intends to take a job where use of a trade secret is inevitable.
The Doctrine provides that
1) if a former employee knows the former employer’s trade secrets;
2) it would be difficult for him not to rely on or use the trade secrets in his new position because the duties in the new position are so related or similar to those in his old position; and
3) the former employee or his employer cannot be counted on to avoid use of the secrets, the former employee may be enjoined from taking the new position – but only for a limited time – until the threat to the trade secrets is dissipated. See Pepsico, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995).
Misappropriation by Memory
Addresses whether an employer can stop a former employee from using trade secrets retained in memory. This doctrine governs where a former employee has already used a memorized trade secret. In this instance, the remedy would be to obtain an injunction which would prevent further use of the information.
The misappropriation by memory doctrine illustrates how the distinction between tangible and memorized secrets is now nearly universally rejected.
The difficulty with this doctrine lies in distinguishing between a protectable trade secret and non-protectable knowledge and skills which the employee acquired through his employment or experience.
Duration of Trade Secret Protection
A trade secret is protected as long as it remains a secret.
Misappropriation of a Trade Secret
The Uniform Trade Secrets Act defines misappropriation as:
(i) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or
(ii) disclosure or use of a trade secret of another without express or implied consent by a person who
(A) used improper means to acquire knowledge of the trade secret; or
(B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was
(I) derived from or through a person who has utilized improper means to acquire it;
35
(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or
(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or
(C) before a material change of his position, knew or had reason to know that it was a trade secret ad that knowledge of it had been acquired by accident or mistake.
Elements of the Cause of Action for Trade Secret Misappropriation
1. The Plaintiff must show that the disclosure and/or use was of an actual trade secret (see above for factors which determine a trade secret). P must also show that the defendant had notice of the fact that the information was a trade secret and was wrongfully acquired.
2. The acquisition of the trade secret had to have been by wrongful or improper means. Improper means may be illegal acts such as theft, bribery or wiretapping. However, improper means does not necessarily imply that the means are illegal; the standard for improper conduct or behavior is much broader. The court in E.I. duPont deNemours & Co. v. Christopher, 431 F.2d 1012, 1016 (5th Cir. 1970) cited the Restatement of Torts §757, comment f at 10 (1939) in its discussion of improper means: “means which fall below the generally accepted standards of commercial morality and reasonable conduct.” In the DuPont case, competitors had hired an aerial photographer to take photographs of the construction of a new DuPont plant. The court held that this was an improper method of discovering DuPont’s trade secret.
3. As an alternative to the unauthorized acquisition in 2, supra, the Plaintiff could show an unauthorized disclosure and/or use resulting in a breach of confidence. In this case both the party who endeavors to obtain the trade secret and induces one to breach a confidence, and the person who violates the confidentiality may be liable.
Elements of a breach of confidence:
(1) existence of a trade secret;
(2) communicated to the defendant;
(3) while he is in a position of trust and confidence; and
(4) use by the defendant to the injury of the plaintiff.
36
Criminally Liability
The Federal Economic Espionage Act of 1996 addresses trade secret thefts committed
“with intent to convert a trade secret, that is related to or included in a product that is produced for or placed in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will injure any owner of that trade secret.”
The Act provides for fines and/or imprisonment.
Liability Exceptions (Defenses)
1. Reverse Engineering and Independent development – If a competitor obtains the trade secret through lawful or proper means, he may use that information without liability.
a. Reverse engineering is a technique by which the product of a secret formula or process is analyzed, first to retrace the steps essential to its creation and then to recreate the formula or process itself.
b. Reverse engineering of a competitor’s unpatented product, provided that the competitor lawfully obtains that product, is a proper means of obtaining the secret.
i. Thus, if a competitor buys a bottle of Coke® and figures out how to duplicate the formula by analyzing it in his laboratory or even obtaining outside help in analyzing the formula, based on the Coke® he purchased, he is free to use that formula.
c. Even if a trade secret is obtained by reverse engineering, that does not automatically mean it was not improperly obtained.
2. Independent development (aka clean room development) of the product is also generally not subject to liability.
3. “Bona Fide Purchaser” exception or innocent or unknowing unauthorized use.
a. As stated in the Restatement of Torts §758(b):
i. “One who. . . another’s trade secret from a third person without notice that it is secret and that the third party’s disclosure is a breach of his duty to the other, or who learns the secret through a mistake without notice of the secrecy and the mistake . . . is liable to the other for a disclosure or use of the secret after the receipt of such notice [that it is a trade secret] unless prior thereto he has in good faith paid value for the secret or has so changed his position that to subject him to liability would be inequitable.”
37
Remedies for Trade Secret Misappropriation
1. Injunctive relief: the modern rule holds that injunctions are appropriate only for the period of time that the subject matter of the trade secret would have remained unavailable to the defendant but for the misappropriation.
2. Other courts hold that the injunction can be issued for what they consider a “reasonable commercial lead time.”
3. Courts will weigh evidence as to the amount of time a person of ordinary skill would have required to reverse engineer or independently discover the subject matter of the trade secret to determine an appropriate “lead time.”
4. A few courts will issue a permanent injunction – mostly as a punitive measure for the infringer’s conduct.
5. Damages: Courts will usually award either an amount equal to the loss suffered by the holder of the trade secret or the gain realized by the person who misappropriated the secret, whichever is greater.
a. Monetary damages are usually limited to the time that the information obtained by the misappropriation would not have been available to the defendant.
38
NONDISCLOSURE AGREEMENT
Agreement by and between ________________________________with the mailing address_____________________________________________ (hereinafter also referred to as “Company”), and_________________________with the mailing address________________________________(hereinafter referred to as “Recipient”).
This Nondisclosure Agreement when signed by Company and Recipient will confirm the following as our mutual understanding and agreement:
In consideration of being shown or told about certain trade secrets, concepts, ideas, and information relating to_________________________________________, including but not limited to:
(1) writings, drawings, data, know-how, improvements, specifications, inventions, patents, trademark and copyright applications;
(2) technical information including, but not limited to, methods, processes, formulae, compositions, systems, techniques, computer programs and research projects;
(3) business information including, but not limited to, customer lists, pricing data, source of supply, financial data and marketing, production or merchandising systems or plans;
(4) or other proprietary information belonging to Company that is not known by Recipient or the general public prior to Company’s disclosure, and all copies and analysis derived therefrom (all hereinafter “Confidential Information”), Recipient warrants and agrees that:
(a) Recipient will, subject to the exceptions set forth in paragraph (b) below, maintain in confidence and not disclose or cause to be disclosed, disseminated or distributed to any person, entity, businesses, or government and Confidential Information known by Recipient to be, or identified by Company or on Company’s behalf as, Confidential Information.
All Confidential Information shall be maintained by Recipient in confidence and may only be disclosed to the extent such Confidential Information: (i) is disclosed to the general public by Company; (ii) is lawfully disclosed to Recipient by a party not under a duty of confidentiality to Company; (iii) becomes general public knowledge through an act or omission of a party other than Recipient through no fault of Recipient; (iv) is already in Recipient’s possession at the time of receipt from Company and such prior possession can be properly established by Recipient; or (v) is required by law, regulation, rule act, or order of any governmental authority or agency to be disclosed by Recipient, provided however, that Recipient gives Company sufficient advance notice to seek a protective order or other similar order with respect to the Confidential Information and thereafter discloses only the minimum Confidential Information required to be disclosed in order to comply.
39
Until such time, Recipient will not use or disclose either directly or indirectly, any of the Confidential Information without Company’s prior written consent. Recipient agrees that the Confidential Information is valuable to Company and is disclosed to Recipient for private evaluation purposes on the terms of this Agreement, with the understanding that Company’s intent is to realize and protect the maximum monetary and economic value of the Confidential Information.
(b) Recipient shall limit disclosure of the Confidential Information received hereunder to only those of its officers and employees who have a legitimate need to know. Recipient shall advise its officers and employees upon disclosure to them of any Confidential Information of the confidential and proprietary nature thereof and the terms and conditions of this Nondisclosure Agreement. Moreover, Recipient shall use all reasonable safeguards to prevent unauthorized disclosure and unauthorized use by such officers and employees.
If Recipient and Company do not enter in an another written agreement regarding subsequent use of the Confidential Information, then Recipient will return to Company the Confidential Information, and all materials and items that relate in any way to the Confidential Information, within five (5) days of Company’s request to do so, provided however, the Recipient may maintain one copy of any such document or other material in a secure location only for purposes of identifying its obligations under this Nondisclosure Agreement. No license or other right is created or granted to Recipient as a result of Recipient’s evaluation of the Confidential Information. This Nondisclosure Agreement shall only be amended by a written instrument signed by both Company and Recipient.
This Agreement shall be binding upon Recipient and upon Recipient’s representatives and successors in interest, and shall inure to the benefit of the Company, its benefits and assigns.
Recipient agrees to honor this Nondisclosure Agreement for the maximum period allowed by law. In the event that any litigation or arbitration is commenced to enforce any of the provisions of this Nondisclosure Agreement, the prevailing party of said action shall be entitled to all costs thereof including reasonable attorneys fees. This Agreement shall be governed by and interpreted in accordance with the laws of the State of _________, and the undersigned agree to venue and personal jurisdiction in __________ state and federal courts.
The undersigned have read, understand and approve this Nondisclosure Agreement, and indicate acceptance by signing in the space below.
Signed this _____________day of ___________________, 200_____.
COMPANY: RECIPIENT:
By: __________________ By: _______________ Signature Signature
Print name/Title____________________ Print name/Title________ ______________
40
Tax ID. Number: ___________________ Tax I.D. Number ______________________
TRADEMARKS
Overview of Trademarks
The modern world is afloat in trademarks and service marks.
These marks, whether they be words, symbols or a combination of elements, serve to identify goods or services from a particular source, allowing the consumer, who assumes that there is a certain consistency to products or services from the same source, to draw upon her past experience to make a choice between competing products or services.
Businesses benefit because the trademark allows them to create and protect good will, that is, protect the business’s image, reputation and the hope that the customer will again buy their products or services. The consumer benefits because she is better able to identify the products or services which she prefers.
Originally, trademark law was protected under the common law of unfair competition, with rights accruing to the first to use the mark.
Common law is generally limited to the type of product or service, the geographic area of use, and a reasonable expansion for each (zone of expansion).
This established a senior versus junior concept often summarized as “the first to use gets the territory.” In 1946 Congress passed a series of federal statutes,
15 U.S.C.A. §§ 1051 – 1129, The Trademark Act, commonly known as the Lanham Act,
§§ 1-47, which both integrated and built upon the common law foundation, most notably by providing a system for registering the marks with the United States Patent and Trademark Office (“USPTO”). The act of federally registering the mark gives the trademark or service mark holder an opportunity for national protection. Various states have also passed trademark statutes.
Thus, the owner of a trademark may look to the common law of unfair competition, state trademark statutes and the federal Trademark Act to obtain relief for trademark infringement.
Types of Trademarks
Trademark [™ ®]: A trademark includes any word, name, symbol, or device or any combination, used or intended to be used, in commerce to identify and distinguish the goods of one manufacturer or seller from goods manufactured or sold by others, and to indicate the source of the goods.
In short, a trademark is a brand name. The terms “trademark” and “mark” are commonly used to refer to both trademarks and service marks.
Trademark rights may be used to prevent others from using a confusingly similar mark, but not to prevent others from making the same goods or from selling the same goods or services under a clearly different mark. Trademarks which are used in interstate or foreign commerce may be registered with the USPTO
41
Service mark [SM ®]: A service mark is any word, name, symbol device or any combination, used, or intended to be used, in commerce, to identify and distinguish the services of one provider from services provided by others, and to indicate the source of the service. A service mark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product. The terms “trademark” and “mark” are commonly used to refer to both trademarks and service marks.
Service marks that are used in interstate or foreign commerce may be registered with the USPTO.
Certification Mark: A certification mark, which is available only on the federal level, is any word, name, symbol, device, or any combination, used, or intended to be used, in commerce with the owner’s permission by someone other than its owner to certify regional or other geographic origin, material, mode of manufacture, quality, accuracy, or other characteristics of someone’s goods or services, or the work or labor on the goods or services was performed by members of a union or other organizations.
For example, UL in a circle signifies the Underwriters Laboratory which certifies the quality of electrical goods.
Collective mark: A collective mark, which is available only on the federal level, is a trademark or service mark used, or intended to be used, in commerce by the members of a cooperative, an association, or other collective group or organization, including a mark which indicates membership in a union, an association or other organization.
Some collective marks include SAG, AFL-CIO and ABA.
Trademark Registration
Mere use will protect a trademark.
Even an unregistered trademark is protected by the common law of unfair competition, state trademark laws and §43(a) of the Lanham Act.
To gain protection the owner of the mark must show that he has used the mark in commerce and that it distinguishes his goods or services from that of others.
Advantages of Federally Registered Marks
constructive notice to the public of the registrant's claim of ownership of the mark (which would eliminate the innocent infringer defense);
Prima facia evidence of the validity of the registration, ownership of the mark and the exclusive right to use the mark in commerce in connection with the goods and services specified in the certificate of registration;
The possibility of incontestability after 5 years giving limited grounds for others to attack a mark that is five years or older – makes the mark immune from cancellation and subject to attack only for fraud, genericide or abandonment;
the ability to bring an action concerning the mark in federal court;
recovery of profits, damages and costs in a federal court infringement action and the possibility of treble damages and attorney’s fees;
42
availability of criminal penalties for counterfeiting action;
the use of the U.S registration as a basis to obtain registration in foreign countries; and
the ability to file the U.S. registration with the U.S. Customs Service to prevent importation of infringing foreign goods.
Registration Process
Applications are filed with the United States Patent and Trademark Office and can even be filed online. Applications and forms can be found on the USPTO website located at www.uspto.gov.
Applications may be electronically filed at http://www.uspto.gov/teas/index.html.
In order to federally register a mark, the applicant must file one of two applications:
1) A “use” application - §1051 (a)(1): certifies that the owner has used the mark in commerce. The USPTO then examines the mark to see if it meets the requirements of §1052, if it qualifies the application is approved for publication in the Official Gazette for purposes of opposition. If no one successfully opposes the mark, it is registered on the Principal register (or if not sufficiently distinctive on the Supplemental Register): or
2) An “intent to use” application - §1051(b): The applicant may file an application which states that the applicant has a bona fide intent to use the mark in interstate commerce and trade, states how the mark will be used and describes on what goods or services it will be used and asserts that to the applicants knowledge the mark is not being used by another. For “intent to use” applications the PTO examines the mark as above, publishes it for opposition and if there is no opposition issues a “notice of allowance” (NOA). The applicant has six months after the NOA to commence use of the mark in interstate commerce, or request a 6-month extension. After the first 6-month extension the applicant can request up to four additional 6-month extensions. During the “ITU” application period, the application serves as constructive notice of priority of use.
The USPTO issues a certificate of registration after the registration is granted.
As provided for by §1057(b) of the Lanham Act, “[a] certificate of registration of a mark upon the principal register provided by this Act shall be prima facie evidence of the validity of the registered mark and of the registration of the mark, of the registrant's ownership of the mark, and of the registrant's exclusive right to use the registered mark in commerce on or in connection with the goods or services specified in the certificate, subject to any conditions or limitations stated in the certificate.”
NOTE: In order to maintain the mark, supplemental filings must be made.
In a Section 8 (§ 1058) filing the holder of the mark must, in the 6th year following registration, and at each ten year renewal, file an actual specimen of the mark and an affidavit setting forth the goods on which the mark in being used in commerce and those on which it is not being used, that such non-use is for excusable reasons which were not due to any intention to abandon the mark. If a Section 8 Affidavit of Continued Use is not filed, the registration may be cancelled.
43
A Section 15 filing (§1065) is made during the 6th year after registration to claim the mark as incontestable (as provided for in that section). If there is no adverse claim to the mark during the first five years the registrants right to use the mark becomes generally incontestable.
A Section 9 filing (§1059) must be made every 10 years to renew the registration. One must also file a Section 8 (mentioned above) with each Section 9 renewal.
Supplemental Register
§1091 of the Lanham Act provides that marks which are in lawful use and are capable of distinguishing an applicant’s goods or services but are not registrable on the principal register (because they are not inherently distinctive or do not have secondary meaning) may be registered on the Supplemental Register.
This will aid the owner who wishes to register the mark abroad.
However, the Supplemental Register will not provide the full advantages which accrue to those who are registered on the Principal Register, as discussed above. After 5 years of Supplemental registration the registrant can seek to move the mark to the Principal Register.
Use of Trademark Symbols TM , SM and ®
Any time you claim rights in a mark, you may use the "™" (trademark) or "SM" (service mark) designation to alert the public to your claim, regardless of whether you have filed an application with the USPTO.
However, you may use the federal registration symbol "®" only after the USPTO actually registers a mark, and not while an application is pending.
Also, you may use the registration symbol with the mark only on or in connection with the goods and/or services listed in the federal trademark registration.
Licensing Trademarks
A registered mark or a mark for which an application to register has been filed shall be assignable with the good will of the business in which the mark is used, or with that part of the good will of the business connected with the use of and symbolized by the mark.
The assignment must be in writing and should be registered with the USPTO. A cover sheet for registering the assignment may be found at www.uspto.gov but there is no form for the actual assignment. Assignments may be recorded online.
Licenses – both exclusive and non-exclusive - are often negotiated by companies to exploit a trademark.
The limitations on and duration of the license are defined by contract.
However, the licensor must beware of not granting a “naked license” (see abandonment below).
The trademark owner must maintain quality checks and controls on the goods or services to which the mark is affixed, even and especially when they are under a licensing agreement.
44
Qualities of Protectable Trademarks
Use in Commerce Prior to the Trademark Law Revision Act of 1988, the mark had to be used in the marketplace in connection with goods or services for federal registration.
No ownership rights would attach to a mark until it was used in commerce.
A mark which was not in use could not be registered.
Subsequent to the revision, effective 11/16/89, the use requirement was altered to allow federal trademark applications to be made upon a bona fide intention to use the mark.
However, the use cannot be a “token” use which is made only to obtain registration.
A corollary to the use requirement is that the owner of the mark also needs to show that the mark was properly “affixed” to the goods or services.
This is easily demonstrated in the case of goods by having the mark placed on the goods themselves ether directly, by tags, etc. In the case of a service mark the affixation requirement can be satisfied if the mark is used in the course of selling or advertising the services.
There must be a direct reference to the services provided.
Distinctiveness
The mark must be distinctive.
This requirement serves a dual purpose. It ensures that the mark identifies a single source for goods or services and ensures that competitors would be free to use these terms in describing their own goods or services.
A hierarchy of distinctiveness has been developed by the courts:
Inherently distinctive: Most protectable
Fanciful or Coined mark – has no meaning at all other than their trademark or service mark meaning- Xerox® copiers or Haagen Daz® ice cream.
Arbitrary mark – a mark which does not describe the product or service it identifies or any of its characteristics - Apple® computers; All-State® insurance.
Suggestive mark – a mark which indirectly describes the product or service it identifies - Coppertone® suntan lotion or Ivory® soap.
Consumers would intuitively understand that these marks indicate the origin and quality of the product or service because there is no other function they could perform.
NOT Inherently Distinctive
Descriptive marks: require secondary meaning for protection
1) marks which appear to describe the product or service they identify –
2) marks which describe the geographic location from which the goods or services emanate – Florida for oranges
45
3) marks which are a person’s surname – McDonalds
Consumers might not realize that these marks indicate origin, they are more likely to assume that they are merely describing the product. These marks need to acquire secondary meaning in order to be protected. If a mark which is descriptive does not acquire secondary meaning, no protection is available.
Secondary Meaning
Obtained by a mark when the public, after being exposed to the mark, has accepted it as an indication of the source of a product or services.
In other words, upon hearing the word McDonalds, the consumer will not think of a particular person named McDonald but rather the food chain.
§1052 (f) provides that: Except as expressly excluded . . . nothing herein shall prevent the registration of a mark used by the applicant which has become distinctive of the applicant's goods in commerce.
The Director may accept as prima facie evidence that the mark has become distinctive, as used on or in connection with the applicant's goods in commerce, proof of substantially exclusive and continuous use thereof as a mark by the applicant in commerce for the five years before the date on which the claim of distinctiveness is made (prima facie evidence of distinctness).
Un-Protected Trademarks
Generic marks - marks considered to be commonly descriptive in the United States-such as aspirin or nylon.
Bars to Registration
Loss of protection occurs when a trademark or service mark holder abandons the mark.
§1127 provides that:
A mark shall be deemed to be "abandoned" if either of the following occurs:
(1) When its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Non-use for three consecutive years shall be prima facie evidence of abandonment.
"Use" of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark.
(2) When any course of conduct of the owner, including acts of omission as well as commission, causes the mark to become the generic name for the goods or services on or in connection with which it is used or otherwise to lose its significance as a mark.
Purchaser motivation shall not be a test for determining abandonment under this paragraph.
46
Non-Use
Use of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a mark.
Thus “token” use of the mark will not prevent a finding of abandonment.
Loss of Distinctiveness/Genericide - Abandonment
Many times terms which started out as trademarks have become so generally descriptive of the item that they lose their distinctiveness and are no longer protectable as trademarks.
In order to become generic the principal significance of the word must be its indication of the nature of the class of the article.
Some examples of this are terms such as nylon, escalator, yo-yo, aspirin (in the USA), raisin bran, etc.
Companies exert considerable effort to make sure that their mark does not become generic. Xerox® has a campaign emphasizing that Xerox® is a brand name for a copier and Band-Aid® similarly has changed its jingle to “I am stuck on Band-Aid® brand ‘cause Band-Aids stuck on me.”
Another way to lose significance as a mark occurs when the owner licenses the mark but fails to maintain adequate controls over the quality of the goods or services to which the mark is affixed.
Assignment of a mark without a contemporaneous transfer of goodwill and failure to sue infringers can also be evidence of a failure to police. This is known as a naked license which is equivalent to abandonment.
Abandoned Marks
A finding of abandonment implies that the mark is in the public domain and the owner no longer has any rights to the mark.
However, if the owner has abandoned the mark through a formal declaration of abandonment, others may adopt the mark.
If the mark was abandoned through non-use or a “naked license”, a subsequent user may claim it after three years when the likelihood of confusion is lessened.
Prohibited Protection of Certain Marks
Scandalous or immoral marks: A mark which “consists of or comprises immoral, deceptive or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute. . .”
(§1052), shall not be registered.
47
Deceptive Marks
Marks which are deceptive are prohibited from gaining protection.
For example, a picture of the American Flag with the words National Aid to Consumers superimposed on it might confuse consumers into believing that there is an actual connection to the Federal Government and is thus unenforceable as a service mark for a credit agency because it would be deceptive.
However, if a mark is merely mis-descriptive it will only be barred from protection if it is also deceptive. The Shapley/Simmons test helps determine whether a misdescriptive mark is also deceptive:
1) Is the term misdescriptive of the character, quality, function, composition, or use of the goods?
2) If so, are prospective purchasers likely to believe that the misdescriptions actually describe the goods?
3) If so, is the misdescription likely to affect the decision to purchase?
4) If yes, the mark is deceptive and cannot be protected or registered. If no, it is merely deceptively misdescriptive and may be protected if it has acquired secondary meaning.
Example;
The United States Court of Appeals in In re Budge Manufacturing Co., 857 F.2d 773 (Fed. Cir. 1988), affirmed the ruling of the Trademark Trial and Appeal Board refusing registration of “LOVEE LAMB” for automotive seat covers finding the term LAMB to be deceptive matter under 15 U.S.C. §1052(a) since Budge’s goods were made wholly of synthetic fibers.
Confusing Similarity to Prior Marks
A mark which is confusingly similar to a mark or trade name that was in use by another and not been abandoned prior to the application will not be registered.
It is not necessary that the earlier mark be registered.
This reflects the common law doctrine that holds that the first person to use the mark on similar goods or services has priority over later users.
The confusing similarity prohibition against registration test is essentially similar to the test used for trademark infringement.
Geographically Descriptive or Deceptively Misdescriptive
If the mark is geographically descriptive and accurate, that is the mark primarily conveys to the consumer the indication that the goods or services came from that place, and the goods do indeed come from that geographical location then the mark is primarily geographically descriptive and can be registered or enforced upon a showing of secondary meaning.
On the other hand, if the mark is geographically deceptively misdescriptive, or deceptive, and the consumer believes that the goods or services came from that particular geographic location, when in fact they do not, it must be determined whether the mark is deceptively misdescriptive or deceptive.
48
If deceptive, the mark cannot be registered or enforced regardless of secondary meaning.
If deceptively misdescriptive, registration and enforcement is prohibited unless the mark acquired secondary meaning prior to December 8, 1993 (pursuant to NAFTA).
Trade Dress/Functionality:
Trade dress is used to refer to the look of a product, its design, packaging, and color - the total image of the product or business. When an applicant applies to register a product’s trade dress for goods or services, the examining attorney must consider two issues: (1) functionality; and (2) distinctiveness.
Trade dress is protected as a mark if the likely impact on the consumer it that she uses it to distinguish or identify the source of the product or service. The shape of a bottle, a distinctive design on a pair of running shoes, or even the total look of a restaurant may achieve protection as trade dress if the consumer identifies it as a source of the product or service.
For example, the shape of a Listerine bottle is a form of trade dress. The shape of the bottle is distinctive enough that consumers would recognize the product in that form of bottle as being Listerine brand mouthwash. The only other hurdle Warner-Lambert faced in registering the Listerine® bottle as trade dress is functionality.
Functional matter cannot be protected as trade dress or a trademark.
A feature is functional if it is "essential to the use or purpose of the product or if it affects the cost or quality of the product."
If competitors need to copy the trade dress in order to compete effectively, or if the feature is related to the utilitarian purpose of the product, it is functional.
In the case of the Listerine® bottle, a competitor would not have to copy the exact shape of the bottle in order to sell their own brand of mouthwash. The shape also has nothing to do
49
with the utilitarian use of the product. It is not functional. As a matter of fact, on the Listerine® bottle’s label there is a legend to the effect that: “This bottle design is a registered trademark of Warner-Lambert.” The design has also obtained design patent protection.
Color as trade dress
Courts have traditionally not been too keen on recognizing color alone (versus color integrated in a mark) as a trademark. However, in two leading cases the court has found that a color could be registered as a trademark. The court held in In re Owens-Corning Fiberglas Corp., 774 F.2d 1116 (C.A.F.C. 1985) that the color pink could be registered as a trademark for fiberglass insulation if there was secondary meaning. In Qualitex Co. v. Jacobson Products Co. Inc., 115 S. Ct. 1300 (1995), a manufacturer of pads for dry cleaning presses was allowed to enforce his rights in the green-gold color of its pads against a competitor. Here the reasoning of the Court was that while the color was not inherently distinctive, it was capable of identifying and distinguishing the goods of a particular producer.
The Court referred to the Lanham Act’s broad definition of what can constitute a trademark “any word, name, symbol, or device, or any combination thereof." §1127.
It opined that a symbol or device might be anything which carries meaning to a human being. The court bolstered its argument that color may be viewed as a symbol by noting that the scent of plumeria blossoms on sewing thread as well as the sound of NBC’s three chimes (the notes GEC) have received trademark protection as such.
Opponents of allowing color as a trademark argue that under a “color depletion” theory new competitors could be barred when all available colors have been adopted.
Trademark Infringement
Trademark infringement may occur in two ways:
1. Likelihood of Confusion – When the consumer is unable to accurately identify the source of goods or services in the marketplace; and
2. Likelihood of Dilution – When the use of the infringing mark erodes the senior mark holder’s good will.
The touchstone of trademark infringement is the likelihood of confusion. If a party which is competing with the holder of the mark uses a mark which is confusingly similar, consumers may believe they are buying the mark holder’s product when in fact they are purchasing the competitors.
As the court in Pikle-Rite Co. v. Chicago Pickle Co., 171 F. Supp. 671, 674 (NDIll 1959) opined: “'Whether there is an infringement of a trade-mark does not depend upon the use of identical words, nor on the question as to whether they are so similar that a person looking at one would be deceived into the belief that it was the other; but it is sufficient if one adopts a trade-name or a trade-mark so like another in form, spelling, or sound that one, with a not very definite or clear recollection as to the real trade-mark, is likely to become confused or misled.'”
50
The test most often used to determine the likelihood of confusion is termed the Polaroid Test (Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2 Cir. 1961)). The test evaluates the following factors:
1. The strength of the plaintiff’s mark – its distinctiveness;
2. Similarity of the marks in question – whether or not the consumer will believe that the product is from the same source as the one he knows under the plaintiff’s mark; *
3. Product proximity – how similar are the goods on which the marks are used;
4. Quality of the defendant’s goods;
5. Likelihood that the prior owner will bridge the gap**
6. Evidence of actual confusion
7. The good faith of the defendant
8. Sophistication of the buyers – the more sophisticated the buyer, the less likely the confusion. Lexis v. Lexus.
* in considering the similarity of the mark one should not forget the sound of the mark – the radio test.
X-on and Exxon do not look alike but would probably confuse the consumer who just heard the words spoken.
Similarity of meaning also falls under this rubric – Mobil’s winged horse was found to be infringed by the defendant’s use of the name Pegasus finding that the public had connected the two in their minds even though Mobil never used the word Pegasus for their mark. Also consider the words pledge v. promise or cyclone v. tornado…each of which was deemed to mean the same thing and prevent registration of the junior user.
**Bridging the Gap – the ability of the senior mark owner to expand its manufacturing of one product to that of manufacturing the same product type as the alleged infringer.
In addition to, or in the absence of, the likelihood of confusion, the Plaintiff may rely on a claim of the likelihood of dilution.
Statutory reference to this element is found in §43 of the Lanham Act, as amended by the Federal Trademark Dilution Act, (FTDA) a 1995 amendment to the Trademark Act of 1946. Dilution is the lessening of the capacity of a famous mark to identify and distinguish goods or services. Id. at §45.
The Supreme Court recently addressed the issue of dilution in Moseley v. Victoria Secret Catalogue, Inc., 537 U.S. 418 (2003) where it held that the FTDA requires proof of actual dilution. In Moseley, the trademark owner was Victoria’s Secret, which both parties acknowledged as a famous mark. The petitioner owned one store named “Victor’s Secret” which he changed to “Victor’s Little Secret” after a request by respondent’s to change the name. Respondent’s filed suit under the FTDA , charging that the petitioner’s use of the name “Victor’s Little Secret” would tarnish the reputation of the trademark ( the
51
store sold adult novelty items as well as lingerie) and blur and erode the distinctiveness of the trademark.
In its holding that the FTDA required proof of actual dilution rather than just a likelihood, the Supreme Court cited §43 (c)(1) of the Lanham Act which provides that: [t]he owner of a famous mark shall be entitled. . .to an injunction against another person's commercial use in commerce of a mark or trade name, if such use . . . causes dilution of the distinctive quality of the mark. The Supreme Court found that this text unambiguously required a showing of actual dilution. The Court further analyzed the definition of “dilution” in the Act and found that “[t]he contrast between the initial reference to an actual "lessening of the capacity" of the mark, and the later reference to a "likelihood of confusion, mistake, or deception" in the second caveat confirms the conclusion that actual dilution must be established.” Id. at 1124 .
Dilution §1127 of the Trademark Act
The term "dilution" means the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of:
1) competition between the owner of the famous mark and other parties, or
2) likelihood of confusion, mistake, or deception.
The Court further held that the “consequences of dilution” need not be proved.
However, in those cases where the marks are not identical “the mere fact that consumers mentally associate the junior user's mark with a famous mark is not sufficient to establish actionable dilution. . . such mental association will not necessarily reduce the capacity of the famous mark to identify the goods of its owner, the statutory requirement for dilution under the FTDA.” Id.
This leaves the issue of what factors are to be used to establish dilution. Justice Kennedy, who concurred with the opinion of the Court, addressed this issue and found that the word “capacity” in the definition above, should be given great consideration.
Thus, when a new mark is introduced the inquiry could be whether it impairs the capacity of the senior mark to identify and distinguish goods.
“If a mark will erode or lessen the power of the famous mark to give customers the assurance of quality and the full satisfaction they have in knowing they have purchased goods bearing the famous mark, the elements of dilution may be established. “ Id. at 1125-26.
Notwithstanding Justice Kennedy’s analysis of the issue, the Court in its opinion did discuss elements of a dilution claim and a test used to determine whether dilution has occurred. These factors are still relevant to a claim of dilution.
In its discussion, the Supreme Court found that in order to be capable of dilution, it must be found that the Plaintiff “ mark possesses a distinctive quality – i.e. it must be a
52
famous mark. Distinctiveness is equated with the strength of the mark or its selling power.
The Court cited §43(c) of the Lanham Act which provides the criteria for determining whether a mark is distinctive or famous:
(A) the degree of inherent or acquired
distinctiveness of the mark;
(B) the duration and extent of use of the mark in connection with the goods or services with which the mark is used;
(C) the duration and extent of advertising and publicity of the mark;
(D) the geographical extent of the trading area in which the mark is used;
(E) the channels of trade for the goods or services with which the mark is used;
(F) the degree of recognition of the mark in the trading areas and channels of trade used by the marks' owner and the person against whom the injunction is sought;
(G) the nature and extent of use of the same or similar marks by third parties; and
(H) whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register.
F actors for Determination of Dilution
The Court also referred to the “Nabisco” test, as found in Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208 (1999), which developed a list of ten factors used to determine if dilution has, in fact, occurred, while describing them as a "nonexclusive list" to "develop gradually over time" and with the particular facts of each case. Those factors are:
1. distinctiveness;
2. similarity of the marks;
3. proximity of the products and the likelihood of bridging the gap;
4. interrelationship among the distinctiveness of the senior mark, the similarity of the junior mark, and the proximity of the products;
5. shared consumers and geographic limitations;
6. sophistication of consumers;
7. actual confusion;
8. adjectival or referential quality of the junior use;
9. harm to the junior user and delay by the senior user; and
10. the effect of [the] senior's prior laxity in protecting the mark.
The factors in both analyses above, while not exclusive, will aid the court in determining whether actual dilution of the mark has or will occur.
53
Note: Vicarious liability and contributory infringement could also be actionable under trademark law.
Remedies for Mark Infringement
Injunctive relief (§1116)
Courts commonly grant injunctions against further trademark or service mark infringement, using the following factors in determining whether or not to grant an injunction:
1. the plaintiff’s likelihood of success on the merits;
2. the existence of irreparable injury to the plaintiff;
3. the respective hardship that the court’s grant or denial will have on each party; and
4. the public interest.
Destruction of infringing articles (§1118) may be ordered by the court after a finding of a willful violation of the Lanham Act.
Monetary damages (§ 1117) may also be available to the plaintiff. Under §43(a) of the Lanham Act damages are available to the plaintiff whether the mark is registered or unregistered.
Actual damages (§ 1117(a)) caused by actual confusion or intentional deception. The burden is on the plaintiff to show losses incurred due to the loss of sales and injury to reputation or good will. Proving and quantifying such losses is often quite difficult. How do you prove that you would have made a certain number of sales if the defendant had not infringed? The same is true of measuring or quantifying damage to a business’ good will.
Defendant’s profits (§ 1117(a)) – the plaintiff usually has to show intentional deception or bad faith on the part of the defendant to receive an award of defendant’s profits. The burden is on the plaintiff to prove the amount of defendant’s gross sales which are attributable to the infringement. The defendant must prove non-attributable profits and attributable losses/expenses as an off-set to the gross revenue claimed by the plaintiff.
In both instances, the courts have leeway to adjust the monetary award depending on such factors as whether they believe the defendant acted in good faith or the plaintiff has not been made whole.
The court may award cost of suit, treble damages and also reasonable attorney fees to the prevailing party.
Statutory Damages (§1117 (c)) – The plaintiff may elect to receive statutory damages for a case involving counterfeit marks. These range from $500 to $100,000 per counterfeit mark or, if the court finds the infringement was willful, $1,000,000 per counterfeit mark.
Cyber Squatters
54
§1117(d) for violations of §43(d)(1) if the defendant is a cyber squatter then the plaintiff may receive not less than $1,000 or more than $100,000 per domain name as the court deems just.
Defenses to Mark Infringement
1. Fair Use – Use in parodies or satire by a non-competitor is generally protected by the first amendment and is considered under the rubric of “fair use”. This also applies to the newsworthiness exception.
2. Abandonment – If the trademark owner abandons the mark either through explicit abandonment or non-use for 3 consecutive years.
3. Genericide – The trademark has become part of the public domain – see genericide supra.
4. No likelihood of confusion
5. No likelihood of dilution
6. Lack of distinctiveness
7. Fraud in the registration – the trademark holder committed fraud during the application process.
8. Plaintiff’s unclean hands
9. Functionality
10. Innocent infringer, for example, no notice was given of trademark status.
11. Violation of anti-trust laws
12. Trademark or service mark misuse
13. Naked license
14. Laches/acquiescence
15. State Statute of Limitations
16. Defendant is senior user of mark
Relevant Statutes
US Constitution, Article 1, Section 8, Clause 3 Basis for federal trademark and unfair competition
The Lanham Act (15 USC §1125-26 )
§43 Main source of substantive rights in marks. §43(a). Federal law of Unfair Competition
55
§43(a) False Affiliation-Even if mark is unregistered can bring claim for false affiliation.
Likelihood of confusion standard.
§43(c) Federal Anti-Dilution Provision-Mark has to be a
famous mark in order to be diluted.
§43(d) Anti-Cyber Squatting. i.e. taking a famous name, register the domain name and then try to sell it. Key is whether done in good faith.
§44 Foreign applicants don’t have to allege use.
1946 TRADEMARK ACT- 15 USC §1051 et seq.
§§1051, 1056-1059, 1062-1064, 1066-1071, 1112, 1113, 1123- Administrative Procedures.
§1051(b) Intent to Use
§1051(d)(1) Gives intent to use applicant second 6 month extension period and for good cause up to four more 6 month extensions.
§1052(a) Unregisterable marks. Deceptive marks can never be registered. However, deceptively misdescriptive marks (§2e) can be registered after proof of secondary meaning.
§1052(§2) Distinctiveness-ensures that the mark identifies a single source for goods or
services; denies protection to descriptive terms. If mark qualifies for registration, examiner will publish the mark in the Official Gazette for Opposition.
§1052(d) Confusing similarity to prior marks
§1052(e)(1) Merely descriptive of applicant’s goods.
§1052(e)(2) Bars registration of mark applied to goods that is primarily deceptively misdescriptive.
§1052(f) Secondary meaning; is mark distinctive.
Nothing in this chapter shall prevent the
registration of a mark that has become
distinctive of the applicant’s goods in
commerce.
§§1057(b), 1060, 1065, 1072, 1115 Rights & Remedies
§1058(§8) Affidavit of Continuous Use-(§ 8 Affidavit)
must file during 6th yr after initial
registration and with each §9 renewal. Must
certify continuing use to keep registration
alive. If not, registration is cancelled.
However, the mark still has state and common
law protection if registration is cancelled.
56
§1059(§9) Renewal Registration- Duration of Federal
Trademark. 10 years with subsequent 10
year renewal terms. Must be renewed every
10 years; six-months prior or three months post the effective date of the registration renewal.
Important or registration of mark is cancelled.
§1063(b) Intent to Use-If no successful opposition filed
notice of allowance will issue in case of intent to use (ITU) application.
§1064(§14) Cancellation of mark: can seek to cancel marks within first 5 years of registration (need damage claim) or anytime thereafter if generic/fraud/misrepresentation, or if mark became offensive.
§1065(§15) Incontestability of Right to Use Mark: under certain conditions mark deemed incontestable; file during 6th yr. Subject to §§1115(b) & 1064.
§1067 Gives competitors & potentially injured party
the ability to object to registration of the
mark.
§1070 Appeal to Trademark Trial and Appeal Board.
§1072(§22) Registration of trademark on principal
register is constructive notice of claim of
Ownership. Gives others notice of your use.
§§1091-96 Supplemental Register-If the mark lacks secondary meaning, after 5yrs it may statutorily attain secondary meaning and can be moved to primary register. Does not offer Principal Register protections.
§1111 Innocent infringer defense
§1111 (§29) Notice of ®. Display with mark; recovery of profits and damages if infringed.
§1114 Infringement of ® mark.
§1114(1)(a) Whether likely to cause confusion or mistake or deceive purchasers.
§1114 (§32) Remedies, Infringement; Innocent
Infringement by Printers and Publishers.
§1116 Injunctions. Full or partial – show likelihood of confusion
§1117 Monetary Recovery for Violation of Rights also statutory remedies.
§1118 Destruction of Articles-can destroy article if they are counterfeit under Lanham Act.
§1125(43(a) Infringement of unregistered mark. Claim allowed if interstate commerce involved.
57
§1125 (a-d) False Representation (a). False Designation of Origin; Descriptions; and Dilution; Cyber-squatting Forbidden.
§1127 Definitions
58
RIGHT OF PUBLICITY (ROP)
Overview
Michael Jordan earns more money from his endorsements than he does playing basketball. Michael Douglas and Catherine Zeta-Jones sue a magazine in Britain for publishing unauthorized photos of their wedding – and the court finds that the wedding was “a valuable trade asset, a commodity the value of which depended, in part at least, upon its content at first being kept secret and then of it being made public. . . .” George Wendt and John Ratzenberger laid claim to their characters - Norm and Cliff on Cheers – and won. These examples demonstrate how expansively the right of publicity is construed and its broad economic power.
Steven J. Hoffman in his article, Limitations on the Right of Publicity, 28 Bull. Copr. Soc’y., 111, 116-122 (1980) discussed three basic policy considerations behind the right of publicity (ROP):
The ROP vindicates the economic interests of celebrities, enabling those whose achievements have imbued their identities with pecuniary value to profit from their fame;
ROP fosters the production of intellectual and creative works by providing the financial incentive for individuals to expend the time and resources necessary to produce them; and
ROP serves both individual and societal interests by preventing what our legal tradition regards as wrongful conduct: unjust enrichment and deceptive trade practices.
Right of Publicity (definition)
The right of publicity (ROP) is the right of a celebrity to control and profit from the commercial use of his or her name, image, likeness, performance, voice, biographical facts, and symbolic representation.
The term celebrity refers to an individual who has reached a celebrated status. This includes entertainers, sports figures, politicians, business people and other public figures. While most cases founded on right of publicity claims have been brought by or on the behalf of a celebrity, it is suggested by several commentators that the right of publicity extends to non-celebrities to the extent they have a pecuniary value in their identity.
The right of public figures to protection under the rubric of the ROP was decided in Martin Luther King, Jr. Center for Social Change v. American Heritage Products, Inc., 250 Ga. 135, 143 (1982) which held “that the appropriation of another's name and likeness, whether such likeness be a photograph or sculpture, without consent and for the financial gain of the appropriator is a tort in Georgia, whether the person whose name and likeness is used is a private citizen, entertainer, or as here a public figure who is not a public official.” Although this is a Georgia decision, the ROP has been extended to public figures and private citizens in all jurisdictions.
59
The factors listed above comprise the celebrity’s identity which is broader than just image or likeness. Identity would include anything which the public associates with the celebrity such that its unauthorized use would cause a likelihood of confusion as to whether the celebrity is endorsing such use. For example, a particular phrase associated with the celebrity such as “Here’s Johnny” (see Carson v. Here’s Johnny Portable Toilets, Inc., 698 F.2d 831 (6th Cir. 1983) or a symbolic representation of the celebrity, such as a robot dressed to indicate Vanna White standing before a recognizable gameboard, which the court in White v. Samsung Electronics America, Inc., 971 F.2d 1395 (9th Cir. 1992), found violated Ms. White’s ROP. In Midler v. Ford Motor Co., 849 F.2d 460 (9th Cir. 1988) the court found that Ford Motor Company’s use of a professional singer to imitate Bette Midler’s voice in a commercial was an appropriation of an attribute of her identity, and violated her right of publicity.
Sources of ROP Protection
The ROP is protected primarily by state laws. Each state grants the right to a lesser or greater degree. For example, California will extend the right even so far as to protect a celebrity’s ROP when that celebrity’s image is merely evoked.
California is by far the most expansive state in its interpretation of the ROP.
Federal protection may be attained through §43(a) of the Lanham Act (15 U.S.C. § 1125) which addresses false affiliation.
Restatement (3d) of Unfair Competition §46 discusses common law protection.
States Law & ROP
The majority of states (including California) view the ROP as a property right and hold that it is descendible (although exploitation during the person’s lifetime is sometimes required) and may be assigned or sold. A minority of states (including New York) hold that it is an element of the right of privacy and ends with the death of the individual.
ROP Infringment
Unauthorized commercial exploitation of a plaintiff’s identity through use of his/her identity violates the plaintiff’s publicity rights. In some states even the mere evocation of the identity is actionable.
How does §43(a) of the Lanham Act protect the right of publicity?
§43(a) asks whether the defendant’s use of the plaintiff’s identity is likely to confuse the public as to whether the celebrity sponsored or endorsed the product or service – false endorsement or false affiliation. The court in White, supra, adopted the Sleekcraft test (AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979) and found eight factors to be relevant as to whether a likelihood of confusion exists:
1. strength of the plaintiff’s (P) mark – level of recognition which the celebrity enjoys among members of society;
2. relatedness of the goods – reasons for or sources of the P’s fame;
3. similarity of the marks – what aspects of the celebrity were used by the defendant;
60
4. evidence of actual confusion;
5. marketing channels used;
6. likely degree of purchase care – what is the sophistication of the consumer;
7. defendant’s intent in selecting the mark – D’s intent in using the celebrity’s identity; and
8. likelihood of expansion of the product lines – would the celebrity be likely to endorse such a product in an authorized way.
Note: A defendant will violate the ROP only if what he appropriates are those elements that identify the plaintiff to the public. This would include such recognizable factors as a celebrity’s voice – if that is what identifies that celebrity to the public. Thus, in Midler v. Ford Motor Co., 849 F.2d 460, 463 (9th Cir. 1992), the court held that “when a distinctive voice of a professional singer is widely known and is deliberately imitated in order to sell a product, the sellers have appropriated what is not theirs and have committed a tort. . . .”
Limits of Protection for ROP
1. The first amendment – a newsworthy facts exception to ROP will protect use of the plaintiff’s identity in the context of news reporting. The first amendment gives people engaging in political, artistic and other forms of expression – except for those compromising commercial speech – some leeway in commenting on the characteristics and actions of another.
For example, the court in Comedy III Productions, Inc. v. Gary Saderup, Inc., 25 Cal.4th 387 (2001) held that “when an artist is faced with a right of publicity challenge to his or her work, he or she may raise as an affirmative defense that the work is protected by the First Amendment inasmuch as it contains significant transformative elements or that the value of the work does not derive primarily from the celebrity's fame” (emphasis added). Id. at 407. The court especially noted that transformative elements are not confined to parody but may take many forms “from factual reporting. . .to fictionalized portrayal.” Id. at 406.
2. Fair Use – the use of a celebrity’s identity for parody, satire, and criticism, is generally not considered an infringement of the ROP. (See Fair Use in Copyright, supra).
Preemption under §301 of the Copyright Act – The majority view is that ROP will rarely be preempted under §301 because while the person’s persona may be fixed in the photos, videos, films, etc., the subject matter of the ROP – the celebrity’s fame and identity is not fixed. The requirements of identifiably and commercial purposes distinguish ROP from copyright claims. See Wendt and White, supra.
The minority view is represented in cases such as Baltimore Orioles, Inc. v. Major League Baseball Player’s Ass’n, 805 F.2d 663 (7th Cir. 1986) in which the court held that the players' rights of publicity (under state law) in their game time performances were preempted by federal copyright law. Judge Alex Kozinski who serves on the 9th Circuit Court of Appeals is one of the leading proponents of the minority view. His dissents in Wendt v. Host International, Inc., 197 F.3d 1284 (9th Cir. 1999) as well as in White v. Samsung Electronics America, Inc., 989 F.2d 1512 (9th Cir. 1993) explicitly set out his rationale regarding Federal preemption of the ROP
61
Remedies for ROP Infringement
1. Injunctive relief – Courts will usually grant permanent injunctions when unauthorized use is found on the grounds that ROP interests are unique and such use may cause irreparable harm.
2. Destruction or impoundment – Some state statutes provide for the impoundment of the alleged infringing products and may order the destruction of those products if the plaintiff prevails in the suit.
3. Damages – Courts will generally grant monetary damages consisting of the fair market value, or reasonable royalty, of the defendant’s use of the plaintiff’s identity. Courts will also consider injury to the plaintiff’s reputation which results in damage to the plaintiff’s marketability, when calculating damages. Some jurisdictions have also permitted the plaintiff to recover defendant’s profits, as long as this does not constitute double recovery. Punitive damages are awarded in extreme cases.
The Lanham Act – authorizes treble damages for a ROP claim under §43(a).
4. Attorney Fees – Some states authorize granting of attorneys fees to the prevailing party, others only to a prevailing plaintiff.
62
Kettle Acronyms
AFC, Abstration, Filtration & Comparison
BTG, Bridging the gap
FITGTT, First in time gets the territory.
FOM, Family of Marks
FSD, First Sale Doctrine
ICANN: Internet Corporation for Assigned Names and Numbers.
LOC, Likelihood of Confusion
LOD, Likelihood of Dilution
RGD, Related Goods Doctrine
ROP, Right of Publicity
SAC, Selection arrangement coordination
SOB, Sweat of the Brow
SOL, Statute of Limitations
ZOE, Zone of Expansion
63
Intellectual Property Related Websites
U.S. Patent & Trademark Office www.uspto.govU.S. Copyright Office www.copyright.govUSPTO links to International IP info www.uspto.gov/main/profiles/international.htm World Intellectual Property Org. www.wipo.orgWIPO Berne Convention www.wipo.org/treaties/en/ip/berne/index.html WTO IP (TRIPS)
www.wto.org/english/tratop_e/trips_e/trips_e.htmIntellectual Property Law Server www.intelproplaw.comIP Law Server from Oppedahl & Larson LLP www.patents.comAmerican IP Law Association (AIPLA) www.aipla.orgCopyright Society of the U.S.A. www.csusa.orgASCAP www.ascap.comBMI www.bmi.comSESAC www.sesac.comEuropean Patent Office www.european-patent-office.orgMadrid System for the International Registration of Marks
www.wipo.int/madrid/en/index.htmlJapanese Patent Office www.jpo.go.jpICANN www.icann.orgUK IP on the internet www.intellectual-property.gov.ukUK Patent Office www.patent.gov.ukCanadian IP on the internet www.cipo.gc.caAustralian IP home page www.ipaustralia.gov.auHong Kong IP dept www.info.gov.hk/ipd/Computer Crime and IP Section of the Criminal Division of the U.S. Dept. of Justice www.cybercrime.govThomson & Thomson www.thomson-thomson.comU.S. Dept. of Agriculture Biotech Patents Database www.nal.usda.gov/bic/Biotech_Patents/Cornell University Legal Information Institute www.law.cornell.edu/topics/trademark.htmlLaw Libraries’ Society of DC IP www.llsdc.org/ip.htmThe Trilateral IP Websites (U.S., EU, Japan)
www.uspto.gov/web/tws/index.htmlNAFTA Secretariat www.nafta-sec-alena.org/Intellectual Property Owners Association www.ipo.orgInternational Trademark Association www.inta.orgDelphion Intellectual Property Network www.delphion.comInternational Intellectual Property Institute www.iipi.orgPatent Café www.patentcafe.comInternet Patent News www.bustpatents.comQPAT – U.S. Patent Database www.qpat.comPatent Attorneys Directory www.inventnet.com
64
Manual of Patent Examining Procedure patents.ame.nd.edu/mpepIP Search Engine www.ipsearchengine.com
65
Online Law Journals Specializing in Intellectual Property (Law Schools)
Boston College www.bc.edu/bc_org/avp/law/st_org/iptf/Univ. of Baltimore ubmail.ubalt.edu/~ubiplj/ Albany Law School www.albanylawjournal.orgBoston University www.bu.edu/law/scitech/U of California - Hastings www.uchastings.edu/comment/John Marshall www.jmls.edu/jcil/index.htmlWilliam & Mary www.wm.edu/law/publications/jol/University of Virginia www.vjolt.net/University of West Virginia www.wvu.edu/~wvjolt/
66
INTELLECTUAL PROPERTY PROTECTION IN THE UNITED STATES
Ideas Copyright Trademark
Service Mark
Patent Trade Secret
ROP
Legal basis Common law 17 USC §101 et. seq.
18 USC § §2318-19A
State law* (*unfixed works and
certain phonorecord
s)
15 USC §1051 et.
seq.
State law
Common law
35 USC §100 et.
seq.
18 USC § 1831 et.
seq.
state law
common law
Subject Matter
An idea which is novel and in concrete
form presented with the
expectation of payment
Original works of
authorship fixed in a tangible medium
(fed.)
Unfixed (state)
Trademarks, service
marks, collective
marks (fed),
certification marks (fed) and
trade dress
Inventions which
are novel, non-
obvious and
useful.
Any informatio
n which gives you a competitiv
e advantage, i.e. method
or process.,
formula by remaining
secret.
Method of Establishm
ent
Contract (express, implied or
quasi), breach of
confidentiality, conversion
File application
with US Copyright Office (pre
1/1/78)
Automatic upon
fixation post 1/1/78
File application
with US Patent and Trademark
Office and/or use
in commerce
§ 8, 9 & 15 filings to maintain
File application with US
Patent and
Trademark Office
Give notice of status as trade secret
67
Duration of
Protection
Pursuit to duration of contract – potentially unlimited
Pre1/1/1978 Max. 95 years (28+28+19+20)
Post 1/1/1978
Individual – life + 70 yrs.
Corporation – or anonymous – earlier of 95 years from publication or 120 from creation
Can be forever
Design – 14 years from grant
Utility & Plant – 20 years from application filing
Can be forever as
long as it is kept secret
Symbol © ® ™ SM US Patent no. or Patent
pending
Proprietary legend
Forum for Enforcem
ent
State court Federal Courts or
State court (if not fixed)
Federal or State court
Federal Court
Federal or State court
Ideas Copyright Trademark Service Mark
Patent Trade Secret
Infringed by
Misappropriation without
compensation
Breach of Confidentiality
Unauthorized copying
or use
Use of the mark or something similar which would cause confusion or dilution of the mark
Make, use or sell, offer to sell, or import into USA without permission
Breach of confidentiality, commercial morality, improper reverse engineering, obtained by improper
68
means
Defenses
Wasn’t plaintiff’s idea,
not novel
Public Domain, Fair Use,
not copyrightable material,
innocent infringer, statute of
limitations, laches,
acquiescence, no access, unclean hands,
original did not copy, licensee.
Senior user, Laches, equitable estoppel, abandonment, genericide, lack of distinctiveness, fraud in registration, unclean hands, ™ misuse, violation of anti-trust laws, no likelihood of confusion or dilution, functionality, lack of notice, fair use, licensee
Fraud in application, prior art, lack of novelty, obvious , 12 month clock bar, file wrapper estoppel, fees not paid, licensee.
Wasn’t a secret, reverse
engineering
69
