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Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE

Table of Contents
Trademark Law 1
Copyright Law 7
Patent Law 16
Remedies 25
Indirect Infringement 29
The Right to Copy and Overlapping Regimes 33
Contract and Controversy over the Extension of IP Protection 38
Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE

I. Trademark Law
a) Is the trademark protectable?

Must use mark to identify and distinguish goods and to indicate source
o Indicate source = must create separate and distinct commercial impression that
identifies source of the goods
o Bona fide use (not token)
For goods, requires affixation on packaging, good, containers, label,
associated documents
For services, requires use in advertising, etc.
If you dont register, only get priority in geographical area where used or
established
Use in interstate commerce provides priority date UNLESS mark requires
secondary meaning, in which case priority determined by when secondary
meaning acquired
o OR intent to use AND application to register
Must be followed by bona fide use within 6 months (may be extended up to
three years if you have good cause: 15 USC 1051(d))
Constructive (filing TM application) use is nationwide: if you register a TM,
youre considered to have used it across the country
Though if small party can show it had been using TM in little local
area, court may protect those rights
Intent to use application gives priority date
Intent to use must be based on bona fide intent to use mark
Must continue use
o If A abandons mark, can B adopt it?
No clear rule, but if B is deceptive, possible false advertising or cancellation
claims
Open question if consumer confused w/o deception by B
Mark must be used in commerce (defined as use in ordinary course of trade)
Priority: need to be the first person to use it
o Is mark registered?
If not, priority only in geographical area where used or advertised
If yes, nationwide priority
o Use in interstate commerce provides priority date UNLESS mark requires secondary
meaning, in which case priority determined by when secondary meaning acquired
o Cant establish priority via small sales in particular city and a few items mailed to
other states must be enough to link mark with brand in consumers minds and put
other producers on notice (Zazu, 7th Cir.)
o Analogous use:
Say Brooklyn Dodgers were about to move to LA, had done advertising, etc.;
then later get TM rights in LA Dodgers, could get priority over someone
who just started using mark on restaurant or t-shirt

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Fact-dependent: want to be fair to party and take into account public


expectations
Distinctiveness
o Do you need to show secondary meaning?
Arbitrary or fanciful (Black & White for whiskey; Kodak): dont need to
prove secondary meaning
Suggestive: gives you some idea of what product/service is (Coppertone):
dont need secondary meaning
Descriptive: actually describes product or service (International Business
Machines, Kentucky Fried Chicken): need secondary meaning
To identify whether a term is descriptive, look at: dictionary
definitions, imagination test (does term require imagination to reach
conclusion as to nature of goods? If so, its suggestive), whether
competitors would need to use the term, whether term has actually
been used
Can use EZ and other acronyms to avoid finding of descriptiveness
(or genericness): courts will ask whether misspelling or acronym has
same connotation as original descriptive or generic mark if yes, no
protection
Generic: never protectable (cant TM laptop for computer company),
regardless of secondary meaning
Generic = name of a category of goods; term competitors would need
to describe their product
Trade dress can be inherently distinctive (Two Pesos v. Taco Cabana; SC): is
it unique, unusual, and unexpected?
Product design requires secondary meaning (Samara Bros.; SC): design not
intended to identify source of product
o How do you prove secondary meaning?
Circumstantial evidence: sales, ads, etc.
Consumer surveys (beware: issues of demographics, geographic areas, size,
how question phrased)
May limit secondary meaning to geographic region
Cant trademark something functional
o What is functional?
Feature is functional if exclusive use of the feature would put competitors at
a significant non-reputation-related disadvantage; cant permit where use of a
color would permit one competitor to interfere with legitimate, non-
trademark-related competition through actual or potential exclusive use of
important product ingredient (Qualtex; SC)
Essential to use or purpose of device (Inwood; SC)
Affects the cost or quality of the device (Inwood)

b) How do you register your TM?

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Why register?
o Enhanced remedies (especially for counterfeiting) in federal court
o Prima facie evidence of validity and ownership
o Opportunity to achieve incontestability of mark
o Nationwide constructive notice of ownership and use main reason to register
o Right to bring federal suit w/o regard to diversity or minimum amt in controversy
o Some customs benefits if people are importing articles bearing your mark
Step 1: design mark
Step 2: TM search for already existing marks
Step 3: commercial use (interstate) (more than token use)
Step 4: apply
Step 5: PTO examination
o If your application refused, can appeal to TM trial and appeals board (TTAB)
o If they refuse, can get judicial review
Claim in district court appeals etc., not used very often
More typically, file with Federal Circuit
Very rare: petition director of PTO
Step 6: TM published in TM gazette people may oppose
o How do you challenge a TM?
Can argue priority, mark descriptive, etc.
Can be brought by anyone likely to be damaged
Step 7: certificate of registration
After five years, mark becomes incontestable
Is your mark not registrable? (15 USC 1052)
o (a) Consists of immoral, deceptive, scandalous matter, or matter which may disparage
a third party or falsely suggest a connection with the third party
Not stopping anyone from using mark
Original purpose to protect public welfare/morals; now not enforced very
strongly
o (b) Consists of or comprises flag
o (c) Name, portrait, etc. of living person w/o his consent
o (d) Likely to cause confusion with another mark that hasnt been abandoned unless
Director approves concurrent registration (e.g., limit to particular kind of good)
o (e): (1) merely descriptive or deceptively misdescriptive [no secondary meaning]; (2)
primarily geographically descriptive, except as indications of regional origin
[registrable under 4 (collective and certification marks)]; (3) primarily
geographically deceptively descriptive; (4) primarily merely a surname [surname has
to have secondary meaning to register]; (5) comprises any matter that, as a whole, is
functional
For misdescriptive marks (using word in a way that doesnt describe item:
cameo for jewelry not containing cameos):
Is mark misdescriptive?

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If yes, will customers believe misdescription (i.e., will people think


that cameos actually contain cameos?)
If yes, then deceptively misdescriptive, but still okay if it has
secondary meaning unless misdescription is material to decision to
purchase: ask customers: are you buying this because you think it
contains cameos?
Geographical terms
1052(a): bars registration of geographical indication which, when used in
connection w/wines or spirits, identifies a place other than the origin of the
good, thanks to TRIPS Agreement
1052(e)(2): primarily geographically descriptive term cant be registered
unless it has secondary meaning, or unless its used as a collective or
certification mark (e.g., certifying that this wine comes from Napa)
1052(e)(3): if its primarily geographically deceptively misdescriptive, even if
secondary meaning, cant be registered unless grandfathered in pre-TRIPS
Test:
Descriptive: secondary meaning OK, no secondary meaning cant
Misdescriptive: deceptive cant be registered, non-deceptive OK
(consumers dont associate product with place OR arbitrary, e.g.,
Atlantic Monthly)
In Re Nantucket (Court of Customs and Patent Appeals): geographically
misdescriptive b/c shirts dont come from Nantucket, but people dont
necessarily think shirts came from there this is acceptable use of
Nantucket
o Primarily merely a surname, unless acquires secondary meaning
Traditionally, always allowed to use own name in products; now, balance
interest in using own name from resultant consumer confusion
Gallo problem: ask: are these marks likely to cause confusion at all, or are
cheese and salami different enough from wine that people will think they
wont have anything to do with winery? Who acquired secondary meaning
first? Are cheese and salami necessary expansion of mark?

c) How do you sue for infringement? (32(1))


Need to show five elements:
o Ownership of valid TM
Person who controls the first use of the mark for relevant goods/services is
owner (typically employer) (15 USC 1055)
o Used by alleged infringer
o Use occurred in commerce
Use required for infringement is broader than type of use necessary to support
registration: doesnt require use on good, containers, packaging, labels,
associated documents just needs to be used in commerce
o Used in connection with sale, offering for sale, distribution, or advertising of goods or
services

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o Likelihood of confusion
Product placement OK (e.g., Kraft ads in front of Pasta Roni boxes)
Is it a functional use not seen by consumers? (1-800 Contacts; 2nd Cir.)
Rescuecom (2nd Cir.) example: Google made internal use of TM to sell mark
to customers for advertising purposes internal use can lead to infringement,
consumers deceived
Go through Sleekcraft (9th Cir.) factors to determine likelihood of confusion
Strength of mark: more distinctive, less likely confusion will occur
Proximity of goods: how similar? Used for similar things?
Similarity of marks: sight, sound, meaning
Evidence of actual confusion
o Problem: can always find someone whos confused
o May not want to wait until public confused
Marketing channels used
Type of goods/degree of care likely to be exercised: more expensive
less likely to be confused
Defendants intent in selecting mark: did you intend to copy?
Likelihood of expansion of product line: how likely is it that
consumers will be confused in the future?
Consider industries: if industries very different, consumers may not be likely
to be confused (Brooklyn Dodgers; SDNY)
Consider consumer sophistication (Brooklyn Dodgers: people in Brooklyn
know the dodgers left)
Keep in mind: potential defenses (below)

d) How do you sue for dilution?


Dilution is association arising from similarity b/w accused mark and famous mark that either
impairs distinctiveness of famous mark (blurring) or harms reputation of famous mark
(tarnishment)
o What is a famous mark?
Extent of advertising
Extent of sales
Extent of actual recognition
Whether its registered
o Consider these factors for blurring:
Degree of similarity
Degree of distinctiveness of famous mark
Extent of exclusive use of famous mark
Degree famous mark is recognized among public
Intent of alleged diluter
Actual association
Coined, fanciful marks: Kodak pianos: identical use of a coined,
fanciful mark (Kodak, Rolex) is evidence that ordinary consumer,

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when confronted with identical mark on far removed goods/services,


will make an association w/famous mark b/c no other significance to
word other than as famous TM
Non-coined, fanciful terms: Amazon online seller, Saturn autos, Tide
detergent: cannot be presumed that ordinary consumer, when
confronted with these kids of marks used on nonconfusing, far
removed goods or services, will inevitably and necessarily think of
famous mark must prove association
For blurring, need to show that association will cause impairment of
distinctiveness of mark
o Tarnishment
Famous mark must be used on defendants unsavory goods (Enjoy Cocaine)
Using mark to criticize marks owner not tarnishment
Using mark to display or refer to plaintiffs own product legal
Only need to show likelihood of dilution, not actual dilution
Diluter must use mark/trade name in commerce

e) Are any defenses to applicable?


Infringement defenses (15 USC 1115(b))
o Registration obtained fraudulently
o Abandonment
Must be intentional, actual nonuse for two consecutive years
Rule against assignments in gross: cant sell TM to someone who wants to use
it for something different
Companies also get in trouble for naked licensing: keep TM, license to
someone else who can use at same time
Need to exercise reasonable amount of quality control when you license
(Dawn Donuts; 2nd Cir.)
o Genericity
Murphy Bed (2nd Cir.) case: term can become generic
Look at newspapers, magazines, dictionaries, decision of PTO/TTAB, ads to
see if public using term as generic term
o Unclean hands
o Fair use
First Amendment comes into fair use question
Classic fair use: accurate usage to describe product or their geographic origin
Dont need to prove no likelihood of consumer confusion (KP
Permanent Make-Up; SC)
Some possibility of consumer confusion must be compatible with fair
use possible tests:
o Greater likelihood of confusion narrower scope of fair use
o Accurate use fair use
o Multi-factor test (Restatement): accuracy, commercial
justification, mark strength

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Nominative fair use: non-TM use: comparative advertising and other


referential usage
9th Cir. three-factor test (New Kids on the Block)
o Could you have described what youre describing w/o TM?
o Has the mark been used by defendant more than is reasonably
necessary to identify plaintiff?
o Has defendant done anything that would falsely suggest
sponsorship or endorsement by TM holder?
o Burden of proof on plaintiff to show it doesnt meet these
requirements
o Replaces likelihood of confusion inquiry
3 Cir. test (LendingTree)
rd

o Plaintiff must prove likelihood of confusion


o Then, burden shifts to defendants to show use is fair
Is there a title at issue?
Ginger Rogers (2nd Cir.) In context of allegedly misleading titles using
a celebritys name, that balance wont lead to infringement unless title
has no artistic relevance to underlying work or, if it has some, unless
the title explicitly misleads as to source/content of work
o Priority
o Antitrust
o Functionality
o Laches, estoppel, acquiescence
Dilution Defenses
o Fair use, other than as a designation of source, including
o Comparative advertising
o Parody, criticism, commentary upon famous mark owner or its goods or services
Barbie Girl (9th Cir.): is speech noncommercial? Protected
Some courts make it easier to get a fair use exemption for parody (borrows
from copyright context)
If court finds that likely to create impression that TM owner sponsored it, may
not permit (Michelob Oily case)
o News reporting and news commentary
o Any noncommercial use
First Amendment
o Some circuits treat separately, others as part of likelihood of confusion analysis or fair
use defenses

II. Copyright Law


a) Is copyright protectable?
Is it original?
o Did YOU independently create it?
Ask whether two works are substantially the same

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Often, wont have direct evidence of someones independent creation: rely on


circumstantial evidence
Some courts have found no independent creation when someone heard a song,
forgot theyd heard it, and wrote a similar song, or song played on radio for a
year
o Does it embody a modicum of creativity?
De minimis expression not original: rhythm, words and short phrases (names,
titles, slogans), menu items
Courts dont judge artistic merit of work
o Is it a compilation or a collective work?
Compilation = work formed by the collection and assembling of preexisting
materials or of data that are selected, coordinated, arranged in such a way that
the resulting work as a whole constitutes an original work of authorship
Collective work = periodical issue, anthology, or encyclopedia in which a
number of contributions, constituting separate and independent works in
themselves, are assembled into a collective whole
Facts arent copyrightable (Feist; SC)
Can have a copyright in the creative aspects of a compilation or collective
work if the way you organize it, etc., is creative (Feist: right to introduction,
original material in yellow pages ads; but alphabetical arrangement and
selection of which data to include fell below threshold)
Does it meet fixation requirement?
o Work is fixed in a tangible medium of expression when its embodiment in a copy or
phonorecord [technical terms] sufficiently stable to permit it to be perceived,
reproduced, or otherwise communicated for a period of more than transitory duration
o Copies = material objects, other than phonorecords, in which a work is fixed by any
method now known or later developed, and from which the work can be perceived,
reproduced, or otherwise communicated, either directly or with the aid of a machine
or device
o Code can count as fixed medium of expression
o Participation of video game player doesnt prevent fixation
o Writing something down yourself even if no one will see it counts as fixation
o Need authority of the author to count as fixation
Have necessary formalities been met?
o Notice
1909 Act (for pre-1978 works): before you published, you had common law
protection; after, either you gave notice via , in which youd be eligible for
federal protection, or you didnt public domain
1976 Act (for post-1978 works): notice required, but you had five years to
cure inadequate notice
Post-Berne: notice optional, still useful to avoid innocent infringer defense
o Registration
1909 Act: registration optional, shorter terms, had to renew to retain copyright

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1976 Act: registration optional but some advantages: prima facie evidence of
valid copyright, was prerequisite to suit
Incentives: statutory damages and attorneys fees available
o Deposit with LoC
Also prerequisite to suit, but only for US works post-Berne
Potential sanctions for failure to deposit copy of work
o Recording transfer
If you dont do it, a bona fide purchaser for value of copyright voids transfer
Is the subject matter protectable?
o Literary works
Verbal, can be recorded on pretty much any kind of material object
Binary code is included (KS thinks this is purely policy-driven: most people
cant read that and know what it says!)
o Musical works and sound recordings
Sound recordings = works that result from the fixation of a series of musical,
spoken, or other sounds, but not including the sounds accompanying a motion
picture or other AV work, regardless of the nature of the material objects in
which theyre embodied
Sound recording doesnt include sound accompanying a motion picture
This means that output of musical creativity can have lots of copyrights
involved: composition, arrangement, lyrics as literary work, sound recording
if you want to use particular song, may need to get lots of different licenses
o Dramatic works
Portraying story by means of dialogue or acting, can often be literary
o Pantomimes and choreographic works
Must still be fixed, either via recording or certain style of notation
o Pictorial, graphic, and sculptural works
Includes fine arts, applied arts, photographs, prints/reproductions, maps,
globes, charts, diagrams, models, technical drawings (incl. architectural
plans), includes works of artistic craftsmanship in form but not in mechanical
or utilitarian aspects
Useful articles doctrine: useful articles can be protected by copyright only if
design has pictorial, graphic, or sculptural features that you can identify
separately
o Motion pictures and other audiovisual works
AV works = consist of a series of related images which are intended to be
shown by the use of machines or devices together w/accompanying sounds
Lots of different copyrights can be involved: screenplay w/literary copyright,
motion picture copyright, musical works and arrangements
o Architectural works
Can fix architectural work by building the building, people who copy building
can be liable for infringement
Originally, could say building protected as PGS, but would have to decide
which aspects were utilitarian

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Only habitable structures not, say, bridges included


Can take pictures of buildings postcard/book, dont need license
Dont need copyright license to take down building, etc.
o Derivative works and compilations
Work based on a preexisting work
Could get copyright protection for derivative works, but you need licenses
from all of those whose work youre sampling
Also have to meet originality requirement
Some case law that suggests that originality requirement for derivative
works higher than other works still pretty minimal
Dont want multiple copyrights on the same thing
Even if you know who original author was, someone else probably holds that
copyright by now: for older works, problems figuring out who owns it
o Copyright protection doesnt extend to:
Ideas
Idea is the idea of a bookkeeping system, or even the general idea that
you should keep track of disbursements and receipts and record them;
expression is the particular categories you use, the way you lay out
forms, etc. (Baker; SC)
Nicholas v. Universal Pictures (2nd Cir.): look at patterns of
increasing generality: goal is to figure out at each level story, plot
outline, subplot, general characters/scenes, specific character elements,
text what is copyrightable
CAI v. Altai (2nd Cir.): abstraction, filtration, comparison
o Abstraction: retrace designers steps: attempt to figure out what
the idea is (cant be protected); for computer programs, code
programs ultimate function (most protection no
protection)
o Filtration: examining structural components at each level of
abstraction to determine whether particular inclusion at that
level was idea or was dictated by considerations of
efficiency. Was it required by factors external to program? Was
it taken from public domain?
o Comparison: compare whats left after above steps and whether
defendant copied that, as well as assess copied portions
relative importance in overall program
Procedure
Process
System
Method of operation
Command menu hierarchy a method of operation (Lotus), but still not
copyrightable because people get used to it policy decision about
how best to promote innovation
Concept

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Principle
Discovery
Public software interface (Lotus; SC)
Useful articles (w/r/t PGS works: must be able to separate out artistic
elements)
Expression included in merger doctrine
Idea and expression merge: cant copyright sweepstakes rules, e.g.,
because then public would be deprived of idea (Morrissey; 1st Cir.)
Scenes a faire doctrine: doesnt extend to incidents, characters or settings
which are as a practical matter indispensable, or at least standard in the
treatment of a given topic
Blank forms not copyrightable

b) Who owns the copyright?


Is it a work made for hire?
o Created before 1978? Look at 1909 Act
Author includes employer in case of works made for hire (not defined)
Presumption that works prepared by employees within scope of employment
are works made for hire
Independent contractor: if a work is commissioned, made for hire; can be
rebutted by evidence establishing contrary intent of the parties (e.g., hiring
party didnt actually request that person make work, wasnt able to direct and
supervise the way work was made, evidence about industry standards)
o Created after 1978? Look at 1976 Act
201(b): In case of a work made for hire, employer/other person for whom
work prepared considered author, and unless the parties have expressly agreed
otherwise in a written instrument signed by them, owns all of the rights
comprised in the copyright
101: definitions: a work made for hire = work prepared by employee w/in
scope of his employment OR 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 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. . . .
Supplementary work: 101: a secondary adjunct to a work by another
author for the purpose of illustrating, commenting upon, etc. such
as forwards, afterwards, illustrations
Use agency meaning when determining whether a party is an employee (Reid;
SC)
Right to control work being performed
Skill required
Source of instrumentalities and tools
Location of work

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Duration of relationship
Right to assign additional projects
Hired partys discretion
Method of payment
Role in hiring and paying assistants
Regular course of employers business
Payment of employee benefits/taxes
Also must be within scope of employment
o Of kind hes employed to perform
o Occurs substantially within the authorized time/space limits
o Is actuated, at least in part, by purpose to serve master
o Does the academic exception to work for hire apply?
Has the termination of transfer right been exercised?
o Author who has transferred ownership has a right between 35 and 40 years from date
of assignment/license to terminate transfer, regardless of agreements to the contrary
o Advance written notice signed by author or termination right holders; notice must
identify the grant and the work, state effective date, served upon grantee 2-10
years before effective date
o All rights revert to author except pre-existing authorized derivative works can
continue to be used
o No termination rights for works for hire (not clear whether sound recordings are
works for hire)
Is it a joint work?
o 101: A joint work is a work prepared by two or more authors with the intention that
their contributions be merged into inseparable or interdependent parts of a unitary
whole
o House report: [A] work is joint if the authors collaborated with each other, or if
each of the authors prepared his or her contribution with the knowledge and intention
that it would be merged with the contributions of other authors as inseparable or
interdependent parts of a unitary whole. The touchstone here is the intention, at the
time the writing is done, that the parts be absorbed or combined into an integrated unit
o Joint owners considered tenants in common: undivided copyrights
Each joint owner may exercise exclusive rights to copyrighted work w/o
permission of co-owners; when they assign or give exclusive license, consent
required, but not if granting a non-exclusive license; also duty to give owners
share of what you make using copyright
o Three elements required under Aalmuhammed v. Lee (9th Cir.):
Copyrightable contribution by each author (not all circuits require)
Two or more authors
Intent to merge parts
o Control/discretion important considerations to determine authorship (Lee)
Whether party superintends the work by exercising control
Objective manifestations of shared intent to be co-authors

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Whether audience appeal of the work turns on both contributions and share of
each in its success cannot be appraised
Is it a compilation/collective work?
o 101: A compilation is a work formed by the collection and assembling of
preexisting materials or of data that are selected, coordinated, or arranged in such a
way that the resulting work as a whole constitutes an original work of authorship.
The term compilation includes collective works.
o 101: A collective work is a work, such as a periodical issue, anthology, or
encyclopedia, in which a number of contributions, constituting separate and
independent works in themselves, are assembled into a collective whole.
o 201(c): Copyright in each separate contribution to a collective work is distinct
from copyright in the collective work as a whole, and vests initially in the author of
the contribution. In the absence of express transfer of the copyright or of any rights
under it, the owner of the copyright in the collective work is presumed to have
acquired only the privilege of reproducing and distributing the contribution as part of
that particular collective work, any revision of that collective work, and any later
collective work in the same series.
Is the work in the public domain yet?
o Copyright term: life of author + 70 years, or 95 years from first publication in case of
anonymous works, pseudonomous works, works made for hire (or 120 years from
year of creation, whichever comes first)

c) How do you prove copyright infringement?

Ownership of valid copyright


Copying
o Direct evidence (rarely available): someone leaves a band and takes copy of
music
o Circumstantial evidence: similarity and access
o Arnstein v. Porter: sliding scale: if theres evidence of access that suggests there
could be copying and similarity, need less evidence of copying; if no evidence of
access, similarity has to be striking
o Look into particular notes, etc., to determine if theres copying, ask experts
Improper appropriation of copyrighted work
o Look at substantial similarity of copyrighted material
Can copy public domain, merged material, scenes a faire, functional items
Consider: amount of protected material copied, compared to allegedly
infringed work; how exact copy is; how easy was it to license your piece?
Arnstein v. Porter (2nd Cir.): take into account view of lay observer: dont
drill down into particular notes or ask experts, etc.
Nicholas v. Universal Pictures (2nd Cir.): look at patterns of increasing
generality: goal is to figure out at each level story, plot outline,
subplot, general characters/scenes, specific character elements, text
what is copyrightable
CAI v. Altai (2nd Cir.): abstraction, filtration, comparison

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Abstraction: retrace designers steps: attempt to figure out what the


idea is (cant be protected); for computer programs, code
programs ultimate function (most protection no protection)
Filtration: examining structural components at each level of
abstraction to determine whether particular inclusion at that level
was idea or was dictated by considerations of efficiency. Was it
required by factors external to program? Was it taken from public
domain?
Comparison: compare whats left after above steps and whether
defendant copied that, as well as assess copied portions relative
importance in overall program; certain cases can use intended
audience observer, technical cases may allow expert testimony,
but rule is lay observer
Limitations on exclusive right to copy
o Archival copies for public libraries
o Ephemeral copies by broadcasters (can make copy during course of retransmitting
program)
o Cover versions of musical works
o Non-commercial copies of musical compositions and sound recordings
o Software: back-up copy, copy to run program
o Fair use

d) What rights do copyright holders have?


Reproduction right
Right to prepare derivative works
o 101: A derivative work is a work based on one or more preexisting works, such as a
translation, musical arrangement, dramatization, fictionalization, motion picture
version, sound recording, art reproduction, abridgement, condensation, or any other
form in which a work may be recast, transformed, or adapted. A work consisting of
editorial revisions, annotations, elaborations, or other modifications which, as a
whole, represent an original work of authorship, is a derivative work.
o Potentially higher amount of creativity required for derivative works (e.g. Uncle Sam
bank case, Wizard of Oz plates case)
o Literary characters made into movie are protected if the constitute the story being told
and are extensively delineated (Maltese Falcon (9th Cir.), Anderson v. Stallone
(C.D. Cal.))
o Fictional facts copyrightable (Seinfeld Aptitude Test case (2nd Cir.))
o To infringe, a derivative work need not be fixed
Right to distribute copies
o BUT first sale doctrine: copyright holder cannot restrict subsequent resale or
distribution by a purchaser (or recipient of other lawful transferee) of a particular
lawful copy; purchaser cant copy work, but can resell, lease, donate, or dispose of it
without restriction
Right to perform the work publicly (other than sound recording)

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o Can only display a lawfully owned copy one image at a time, to viewers present at the
place where the copy is located
o 101: to perform or display publicly means: 1) to perform or display it in a place
open to the public or any place where a substantial number of persons outside of a
normal circle of a family and its social acquaintances is gathered; or (2) to transmit or
otherwise communicate a performance or display of the work to a place specified by
clause (1) or to the public, by means of any device or process, whether the members
of the public capable of receiving the performance or display receive it in the same
place or in separate places and at the same time or at different times.
Court held that DVR isnt a public performance, but could argue that it is: lots
of members of the public seeing this in different time zones and different
places
o Exceptions:
o 17 USC 110
Face-to-face teaching, distance learning
Religious services, free face-to-face charitable performances
TV, radio, etc. in small businesses, restaurants, certain other establishments
Keeping TV on in bar is a big controversy lots of specific
requirements and limitations
Argument that this is inconsistent with Berne convention: US brought
to dispute forum and lost, hasnt changed rules yet
Agricultural or horticultural fairs
Record and sheet music stores to promote sales (though probably not video
stores)
Noncommercial performance or a nondramatic literary work for
transmission to blind, deaf
Single noncommercial performance of dramatic literary work (after 10 years)
to blind through radio
Various performances for nonprofit veterans and fraternal organizations (but
not frats and sororities, unless for charitable fundraising)
Cleaning up videos for private home viewing
o 17 USC 114: various exemptions to the right in digital transmissions of sound
recordings (106(6)), note subscription, interactive services not exempted
o Compulsory licenses
Various retransmissions of cable and satellite broadcasts
Jukeboxes, subscription digital audio services, webcasting
Public broadcasting stations
Right to display work publicly (other than sound recording)
Right to perform sound recording publicly by means of digital audio transmission
Moral rights
o Limited to works of visual art
Defined as a painting, drawing, print, or sculpture, existing in a single copy, in
a limited edition of 200 copies or fewer that are signed and consecutively
numbered by the author, or a still photographic image producer for exhibition

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purposes only, existing in a single copy that is signed by the author or in


limited edition of 200 copies or fewer that are signed by the author and
consecutively numbered by the author
Doesnt include (A) poster, map, globe, chart, technical drawing, diagram,
model, applied art, motion picture or A/V work, book, magazine, newspaper,
data base, electronic publication, advertising material, packaging (B) work
made for hire (C) any work not subject to protection
o Protection afforded against: false attribution; intentional distortion, mutilation, or
other modification of a work which would be prejudicial to the authors honor or
reputation; destruction of a work of recognized stature
o Attaches to artist after painting sold
o Should be subject to fair use doctrine, but maybe not parody
o Modification due to passage of time and conservation permissible
o Encourages artists to make works: they know the integrity of their vision will be
protected, though limits what public can do with piece of art because first sale
doctrine doesnt apply

e) Does fair use defense apply?


Factors for determining fair use
o Purpose and character of the use, including whether commercial or
nonprofit/educational
Consider transformativeness of use (Koons; 2nd Cir.)
Consider commercial use
Consider public benefit of use
Consider parody, satire, justification for copying
Consider bad faith
o Nature of copyrighted work
Works that are closer to core of intended copyright protection deserve more
protection how creative is it?
o Amount and substantiality of portion used in relation to copyrighted work as a whole
o Effect of the use upon the potential market for or value of the copyrighted work; fact
that work is unpublished doesnt bar finding of fair use
Examples in statute
o Criticism
o Commentary
o News reporting
o Teaching
o Scholarship
o Research
Easier to get protection for parody than satire because in parody you need to use that item
(satire requires genuine creative rationale for borrowing image)
Examples in case law
o Harper & Row v. Nation (SC): republishing part of Fords biography not protected
as fair use: this was already about to come out; not the type of news reporting that

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was intended to be protected; commercial use less likely to be fair use; most
significant aspects were what was reproduced; also consider quantity; consider good
faith and fair dealing
o Campbell v. Acuff-Rose (SC; Pretty Woman case): consider purpose and character of
use (could be parody or satire); amount and substantiality of portion used (including
transformativeness want to make sure new user is adding value and degree to
which your work is aimed at original); effect on market (here, hard to predict
wont replace old song, may increase value of original song); this was okay
o Food Chain Barbie (9th Cir.): images of Barbie in blender: criticizing Barbies
embodiment of American consumer culture; this was okay
o Blanch v. Koons: photograph changed; commercial use but this is art; genuine
creative rationale; photographer never licensed this no harm to her for this to be
used
o Perfect 10 v. Amazon (9th Cir.): strongly outcome-driven: Google Image wont exist
if find for Perfect 10 here; court says this is transformative even though its the exact
photo not putting it in some socially meaningful context

III. Patent Law


a) What are the components of a patent?
Front page: patent number, application number, issue date, filing date, technology
classification, references (potential prior art) cited by examiner during prosecution
Specification: description of invention; fulfills disclosure requirements of 35 USC 112:
enablement, written description, best mode, often includes drawings, background, preferred
embodiment
Claims: metes and bounds of the exclusive right limited by
o Prior art
o Actual invention
o Precise wording critical
o Infringement determined by claims: infringe a claim, not a patent
o If you say comprising, need all elements and can have additional; consisting of =
must have those elements and only those [want to use comprising broader]
The more limitations (elements) in your claim, the more narrow the claim is; infringement
requires all limitations (or equivalent)
Dependent claims
o Claim 2: The apparatus of claim 1 wherein said handle means has a gripping
portion
o If infringes claim 2, also infringes claim 1 because it includes claim 1
o If claim 2 is invalid, claim 1 is also invalid because it is included in claim 2; if claim
1 is invalid, doesnt necessarily mean that claim 2 is invalid; but even if claims 1 and
2 are invalid, doesnt mean claim 3 is invalid because its a new combination of
elements
o So why do we have these separate claims? In case later on in infringement suit,
someone says that claim 1 is invalid claim 2 may still be valid because its

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narrower
Narrower claims also often tailored to exactly what you want to sell

b) How do you interpret patent claims?


Make a claim chart example of Larami v. Amron (E.D. Pa.; super soaker)
o Elongated housing having [may analyze what elongated means]
Chamber therein for a liquid
o Pump including a piston
Having exposed rod extending rearwardly of said toy
o Means for controlling ejection [of a stream of liquid]
o Super Soaker doesnt have a chamber therein no infringement
Canons of claim construction
o Narrow construction to preserve validity (Federal Circuit HATES this)
o Use ordinary meaning (to a PHOSITA)
o Use context (both in claims and in specification)
o Patentee is his/her own lexicographer
o Patentee cannot recapture disclaimed claim scope
o Claim differentiation (assume different patent claims have different scope)
o Purpose of the invention
o Difficulties in claim construction
One word may have multiple meanings
Difficulty in defining the item for which there wasnt previously a term/which
didnt preciously exist
What would people have thought at time of claim being filed?
Sometimes claim terms can include technological developments that happened
after patent issued
Read claims (may look at expert definitions) in light of specification (AWH; Fed. Cir.) BUT
dont read limitations into the claims based on the rest of the patent
Consider how PTO and inventor construed patent (AWH)
May also use dictionary definitions and expert testimony (no favoring dictionaries) (AWH)
Judge, not jury, decides (Markman; SC) Markman claim construction hearings

c) When is a patent infringed?


Literal infringement
o Accused party must be making, using, offering to sell, selling, or importing the
patented invention look at EMBODIMENT of alleged infringing article
o Step 1: construe claims to see what they mean
o Step 2: assess infringement of each limitation
o Step 3: assess doctrine of equivalents for each limitation
A patentee may invoke doctrine to sue producer of device if it performs
substantially the same function in substantially the same way to obtain the
same result (Sanitary Refrigerator Co.; SC)
As if its equivalent at the time of infringement, not at filing

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Step 1: look at each limitation and make sure theres an equivalent for each
Step 2: ask if PHOSITA would agree that the item performs substantially the
same function in substantially the same way to obtain the same result
After-arising technology can constitute literal infringement under doctrine of
equivalents (Hughes Aircraft; Fed. Cir.)
Joint infringement/divided infringement
o More than one party involved in steps of process
No infringement unless defendant controlled all parties who controlled
various parts of process (Paymentech; Fed. Cir.)
o Different countries?
General rule: patent rights are territorial
271(f) extends (b) and (c): Infringes if: whoever without authority
Supplies or causes to be supplied in or from the US
1) All or a substantial portion of components of a patented invention in
such manner as to actively induce the combination outside of the US in
a manner that would infringe if within the US OR
2) Any component of a patented invention that is especially made or
especially adapted for use in the invention AND Not a staple article or
commodity of commerce suitable for substantial noninfringing use
Knowing that component is so made or adapted AND Intending that
components will be combined outside of the US in a manner that
would infringe if within the US
271(g): non-patented items brought into US infringe if they use process
patented in US
Evidentiary problems: have to be able to prove that overseas factory is
using your process, and need enough evidence to survive motion to
dismiss
Identifying who you can sue can be difficult
Challenging issues RE: discovery
If control of system exercised in US, and beneficial use of system obtained in
the US, infringement (RIM; Fed. Cir.: Blackberry case where system worked
by having email transferred from user service to network in Canada, then back
to US)

d) Are any defenses applicable?


Experimental use/research exemption
o No punishment merely for philosophical experiments, or for the purpose of
ascertaining the sufficiency of the machine to produce the desired effects
o Limited in Madey v. Duke (Fed. Cir.): university research not exempted because its
in furtherance of legitimate business interests of university
o FDA exemption: if youre doing research reasonably related to developing
information for submission under FDA
Prior user defense
o Old law: Very limited defense for prior users of business methods

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o New Statute: Much more general prior user defense


Prior commercial use of a claimed invention
Commercial use includes nonprofit laboratory use, use during
regulatory review
Prior = In general, more than 1 year before patentees application was
filed
Not available if derived from the patentee
o Penalties are worse if you infringed knowing that someone else had made invention
Exhaustion
o Buyer may use and sell the article (equivalent of first sale doctrine) to another
buyer, who likewise may use and sell the article without infringement
o Doesnt give the right to make, use, or sell additional articles
Repair and reconstruction
o Owner of patented article may repair it, and may replace each of the unpatented
components of the article
o Cant go reconstruct it after the entity, viewed as a whole, is spent
No fair use
Blocking patent: i.e., A makes rocket launcher and B makes better rocket launcher
o Can make your own improvement and then negotiate with patentee, but first person
has more bargaining power and second person may not want to or be able to patent
for whatever reason
Reverse doctrine of equivalents (never applied by Federal Circuit): even if you literally
infringe, if your invention is so different, then you should be able to get out of infringement
Laches
Antitrust and patent misuse
o Patentee cant use restrictive practices to effectively broaden scope of patent grant to
anticompetitive effect (such as by requiring royalty payments beyond patent term)

e) Have all the requirements of a patent been met?


Utility
o Operability: rarely an issue with patents; says the invention does what the application
says it will; this requirement is to prevent fraud (patent examiner doesnt test
invention)
o Beneficial/moral utility: idea that you shouldnt patent things that are bad for society,
used to strike down patents for gambling machines, deceptive products, etc. Juicy
Whip v. Orange Bang (Fed. Cir.): deceptive inventions can be patented; PTO isnt
supposed to be deciding whats moral
Patent is, in effect, a subsidy for a certain type of research can ask yourself
if we want to be subsidizing an immoral/etc. invention
Idea that a patent is somehow a kind of stamp of approval
o Practical utility (most important requirement)
Need to have one use to meet requirements of utility doctrine
Used to need sufficient importance, then idea that it had to be an
improvement, then idea that you had to show commercial feasibility

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Dont apply commercial feasibility test: hard to know ex ante if something


will be commercially feasible; patents serve function of attracting financing;
but you still reach question of whether its too soon to patent something
If you have the kind of case where someone else comes up with really
practical use, and you didnt litigation over practical utility
Brenner v. Manson (US SC): last case we have on utility; attempted to patent
process to make steroid, which was thought, because of relationship to
existing steroids, would be useful, but no immediately clear use not
patentable
Concern about the fact that they dont know how broad the scope of
this use will be
o PTO utility guidelines
Need to have specific utility and substantial utility
Specific utility: this can be used for diagnosing Parkinsons, versus this can be
used for diagnosing some disease one day
Substantial utility: need real world use
Not basic research
Not method of identifying or making material with no use or treating
unspecified disease
Not a throw away utility (like using a genetically engineered mouse as
snake food, but if its super nutritious, may count: very fact-specific)
Still only require one non-trivial use: may very well happen that you disclose
a particular use, then someone else finds out that drug can also treat cancer
that person would have to get license from original patentee
BUT can get a new use patent
New law has expanded ability to challenge patent after its been issued
Enablement
o Must describe manner and process of making and using invention, in such full, clear,
concise, and exact terms as to enable any PHOSITA to make and use it (35 USC
112)
o Dont want PHOSITA to have to engage in undue experimentation to use
(Incandescent Lamp Patent case; SC)
Written description
o Claim definiteness: only time its not sufficiently definite is if its insolubly
ambiguous, and no narrowing construction can properly be adopted
o Specification must show that you actually thought of invention and must describe
invention in a way thats understandable to PHOSITA
o Gentry Gallery (Fed. Cir.): written description requirement failed because PHOSITA
would clearly understand that controls had to be on console, not anywhere else on
device; claims cannot be broader than the supporting disclosure narrow disclosure
limits claim breadth
o Can use words, drawings, detailed formulas
Best mode: must disclose best mode of practicing invention known to inventor at time of
filing

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o Toothless under new law: no longer available as validity defense


Novelty
o New law: first to file gets invention (old law: first to invent)
o The inquiry here is: Is there a single reference (prior art) with effective date of
reference (e.g., publication date) before critical date of invention (date of invention
for (a) [invention known or used by others in this country, or patented or described in
a printed publication in this or a foreign country before invention thereof by
applicant], (g) [another inventor establishes that the invention was made by such
other inventor and not abandoned, suppressed, concealed], one year before date of
filing for (b) [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]) that anticipates (has
everything in) claimed invention?
o Date of invention: start with reduction to practice, but if diligent from conception then
conception date can count
o Cant be anticipated under 102(a) and (e)
102(a) (novelty): 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
102(e): cant get patent if the invention was described in a patent application
pending before the PTO if that application later leads to a patent
Prior art can only arise before date of invention
Only a third party can bar novelty
Prior art needs to disclose every claim AND enable invention to defeat
novelty
Third-party trade secret use not held against inventor
Anticipation
Must describe and enable the invention: permit PHOSITA to make
Look at each claim separately: every claim must be disclosed in prior
reference, and reference must enable practicing invention
Doesnt have to give you a use
Asking, in sum, if this invention is already out there and available to
public
Inherent anticipation
Federal Circuit: if PHOSITA would look at disclosure and know that
claimed element was there, then inherent anticipation applies
Other cases: when its an inevitable consequence of practicing some
prior art
Examples: no finding of inherent anticipation: producing fat acids
during steam engine, accidental and unappreciated de minimis
production of element 95 in nuclear reactor; finding of inherent
anticipation: Claritin naturally produced chemical in body
anticipated, French patent application drawing showed crimped edge

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and someone else tried to patent a potless flower holder using a


crimped edge
Consider policy: courts dont want to take something away from
public thats already been out there
o Need to have priority (102(g))
102(g): no patent if before applicants invention, invention was 1) made by the
other inventor in an interference or 2) made by another inventor in this
country; not abandoned, suppressed, or concealed
Abandonment has to be intentional or deliberate
Conceal: use as trade secret, e.g.
To determine who made invention first, consider respective dates of
conception and reduction to practice, and reasonable diligence of anyone first
to conceive and second to reduce to practice
Conception date can count as invention date if you act diligently
between date you conceive and date you reduce to practice
Cant wait around for funding if you already have some or graduate
student (Griffith; Fed. Cir.)
Diligence
o Poverty or illness may excuse
o Dont need to quit your job to work on invention
o Reasonable delay due to overworked patent attorney
o Cant wait around to see if there will be commercial demand
o Cant work on other unrelated inventions
o If 1 conceives, then 2 conceives, then 2 reduces to practice,
then 1 reduces to practice, 1 still wins if diligent all the way
form before 2s conception through 1s reduction to practice
o Cant have abandoned invention (102(c))
Abandonment has to be intentional or deliberate
o Patent applicant must be the inventor, not one who has learned of invention from
someone else (102(f))
New law: you could theoretically steal invention and then patent it: no
requirement that you independently invent it to get protected
o Inventor may lose right to patent if doesnt file in time
102(b) (statutory bars): Unless 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 US
Prior art can arise before and after invention (critical date is filing + grace
period)
Inventor or third party can bar patent
Sufficient to bar patent if reference discloses the identical invention or if the
invention is obvious in light of the reference
Public use by applicant encompasses hidden use not under inventors control
and secret but commercial use by inventor

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Third party trade secret use not held against patent applicant
o Publications
When is a document printed and published? (In re Hall; Fed. Cir.)
Reasonable degree of distribution of document OR reasonable degree
of searchability (provided by subject matter indexing, e.g.)
o Cant have made public use of patent, but may experiment
Public use
Public means not trying to hide inventions (Rosaire; 5th Cir.: oil fields
case), no requirement of secrecy (Lippman; SC: corset case)
Experimental use (102(b))
Basic rule: if what youre doing in experimentation is trying to make
it, as opposed to youve made it and now its out there, doesnt count
as public use because youre still working on it
Experimentation aimed at reduction to practice isnt public use or on
sale
Experimentation must concern development of invention (the claimed
invention, suitable for intended purposes, not marketing/market
research)
Public use of pavement okay (Elizabeth; SC)
Inventing a boat part and not following up after giving it to users not
okay (Lough; Fed. Cir.)
Giving patients braces you invent isnt public use when patients under
control (TP)
Experimental use factors (Bartell Industries; Fed. Cir.)
o Necessity for public testing
o Amount of control over experiment retained by inventor
o Nature of invention
o Length of test period
o Whether payment made
o Whether there was a secrecy obligation
o Whether records of experiment were kept
o Who conducted experiment
o Degree of commercial exploitation during testing
o Whether invention reasonably requires evaluation under actual
conditions of use
o Whether testing systematically performed
o Whether inventor continually monitored invention
o Nature of contacts made with potential customers
o New law: old case law will probably carry over for 102(a) and (b); grace period now
specifically targeted at disclosures by inventor, or by someone who got information
from inventor, or inventor publicly disclosed information
Nonobviousness (103)
o Step 1: determine scope and content of prior art

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Does particular reference fit within 102(a), (b), or (g)? I.e., was it known or
used by others in this country before the invention of the claim of issue, or
was it in public use more than one year before the filing date of the claim at
issue even if it doesnt contain all limitations of the claim?
Is reference is an analogous art is it from the same field of endeavor, or,
does it solve same problem/still reasonably pertinent?
o Step 2: ascertain differences between prior art and claims at issue
o Step 3: find the level of ordinary skill in the pertinent art
Types of problems encountered in the art
Prior art solutions to those problems
Rapidity with which innovations are made
Sophistication of the technology
Educational level of active workers in field
o Step 4: determine the obviousness or nonobviousness of the subject matter (KSR;
SC)
TSM test (there must be a suggestion or teaching in the prior art to combine
elements shown in the prior art in order to find a patent obvious) isnt only
test question isnt whether combination was obvious to patentee but
whether combination was obvious to PHOSITA
If its obvious to try, could mean that its obvious
BUT if there are lots of possibilities and result is unpredictable, wont
be obvious (Kubin; Fed. Cir.)
Not present when person tries lots of combinations and one ends up
being good (Kubin)
General guidance from prior art or field doesnt constitute obviousness
(Kubin)
o Step 5: secondary considerations
Commercial success
Could mean it was obvious! In fashion now, or marketing efforts of
company
Need to show nexus between particular patented invention and
commercial success of article (could have very successful item with
one tiny patented thing)
Long-felt but unsolved needs
Failure of others
Awards and praise
Skepticism, teaching away, unexpected results
Licensing activity
Copying
Advances in collateral technology
Near-simultaneous inventions
o No patent if differences b/w invention and prior art are such that the subject matter as
a whole would have been obvious at the time of invention to PHOSITA
Patentable subject matter

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o Process
Process, art or method, and includes a new use of a known process, machine,
manufacture, composition of matter, or material (35 USC 100(b)) can be a
method of making something or using something
o Machine
Includes every mechanical device or combination of mechanical powers and
devices to perform some function and produce a certain effect or result
(Corning v. Burden; SC)
o Manufacture
The production of articles for use from raw or prepared materials by giving
to these materials new forms, qualities, properties, or combinations, whether
by hand-labor or machinery (American Fruit Growers (SC), cited in
Diamond (SC))
o Composition of matter
Broad scope: all compositions of two or more substances and all
composite articles, whether they be the results of chemical union, or of
mechanical mixture, or whether they be gases, fluids, powders, or solids
(Shell Development Co (Dist. D.C.) cited in Diamond)
Diamond v. Chakrabarty: manmade bacterium with markedly different
characteristics from any found in nature and having potential for significant
utility is patentable
o New and useful improvement thereof
o Exceptions to patentable subject matter: policy-driven
Transaction costs of licensing everyone to do this, problems with
disseminating knowledge about how to do this
No way to design around
Some kinds of natural products DNA sequence might be what it is
Cant design around some mathematical formula
Only one way to do it
Extremely expensive to design around
Claims that are really broad principles of nature
o Could have problems under 112
Importance of particular technology that we really dont have a very good way
to deal with those in patent law
No need for patent incentive in some kinds of things
Thats one reason against business methods
Sports moves
Laws of nature
Physical phenomena
Challenges to medically-related patents
Human DNA sequences unpatentable ask whether its different by
taking it out of the body; or ask is it chemically different by the time
you take it out of the body
Abstract ideas

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Challenges to business methods


o Patentable but lots of concern after Bilski (SC): need some
high enough bar
Challenges to medically-related patents
Products of nature

IV. Remedies

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Injunctions (patent: 35 USC 283; copyright: 17 USC 502; trademark: 15 USC 1116)
o In all three IP branches, usually there will be an injunction but not always
o Four-factor test for injunction
Plaintiff has suffered irreparable injury
Remedies available at law, such as monetary damages, are inadequate to
compensate plaintiff for that injury
Considering balance of hardships between plaintiff and defendant, a remedy in
equity is warranted
Public interest would not be disserved by a permanent injunction
o Patent
After eBay (SC), some lingering concern about injunctions being issued when
patent may function more as a way to get royalties than anything else
(Kennedy concurrence); courts start denying injunctions to non-practicing
patent holders
As long as theres some ability to design around, seems like this shouldnt be
such a big problem one way to look at this is to say if you have to use this
technology, may be more valuable than it seems, or may not have seemed to
have to do anything with the Internet can you find patents that arent in
your area that are still relevant?
o More exceptions w/TM and copyright: First Amendment issues, may think you had
fair use, protect TM to protect consumers association w/source
o Trade secret: actual or threatened misappropriation (UTSA 2(a))
Damages (patent: 35 USC 284; copyright: 17 USC 504; trademark: 15 USC 1117)
o Reasonable royalties (esp. in patent context, also available for trade secrets; some
courts permit in copyright)

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Royalties for past infringement


Court asks: if these people had had a negotiation and gotten a license,
what would they have agreed on?
This is the fallback for patent damages in case you cant prove
Long set of factors that courts take into account (Georgia-Pacific;
SDNY)
o Royalties received by patentee for the licensing of the patent in
suit, proving or tending to prove established royalty
o Rates paid by licensee for the use of other patents comparable
to patent in suit
o Nature and scope of license, as exclusive or non-exclusive, or
as restricted or non-restricted in terms of territory or w/r/t
whom manufactured product may be sold
o Licensors established policy and marketing program to
maintain his patent monopoly by not licensing others to use the
invention or by granting licenses under special conditions
designed to preserve that monopoly
o Commercial relationship b/w licensor and licensee, such as
whether they are competitors in same territory in the same line
of business, or whether they are inventor and promotor
o Effect of selling patented specialty in promoting sales of other
products of the licensee; that existing value of the invention to
the licensor as a generator of sales of his non-patented items;
and the extent of such derivative or convoyed sales
o The duration of the patent and term of license
o Established profitability of the product made under the patent,
its commercial success, and its current popularity
o Utility and advantages of the patent property over the old
modes or devices, if any, that had been used for working out
similar results
o The nature of the patented invention, the character of the
commercial embodiment of it as owned and produced by the
licensor, and the benefits to those who have used the invention
o Extent to which infringer has made use of the invention, and
any evidence probative of the value of that use
o The portion of the profit or of the selling price that may be
customary in the particular business or in comparable
businesses to allow for the use of the invention or analogous
inventions
o The portion of the realizable profit that should be credited to
the invention as distinguished from non-patented elements, the
manufacturing process, business risks, or significant features or
improvements added by the infringer
o Opinion testimony of qualified experts
o Amount that a licensor and licensee wouldve agreed upon at

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the time infringement began if both had been reasonably and


voluntarily trying to reach an agreement
Put a thumb on scale to make royalty higher
Damages supposed to compensate, not deter
Royalties for ongoing infringement
Cases where court decides not to issue injunction a lot like
compulsory license
o Choose either actual damages or statutory damages
Lost profits (patent, copyright, TM, trade secrets)
Profits that patentee/copyright holder/TM owner didnt make because
of the infringement
Can try to prove own lost profits BUT problems with this:
counterfactual world; marketing/advertising; profits could even be
lower than youd get: no more monopoly
TM may include corrective advertising costs
Four-factor test from Panduit (Fed. Cir.) in patent context:
o Demand for patented product
o Absence of acceptable noninfringing substitutes
May consider effect of economically significant
products on profit patentee wouldve made absent
infringement: such as instant and conventional
photography (Polaroid; Fed. Cir.)
o His manufacturing and marketing capability to exploit demand
o Amount of profit he would have made
Accounting of profits, aka disgorgement (patent (design only): 35 USC 289;
copyright 17 USC 504; trademark 15 USC 1117, trade secrets)
Instead of looking at the profits that the right-holder wouldve made,
look at profits that infringer actually did make and require them to
hand those profits over to the IP holder
Copyright: look at money infringer actually made (Tilghman; SC),
and to extent its due to infringement (which raises difficult factual
question) can get them to disgorge profits (MGM; 9th Cir.)
o Where theres a commingling of gains, cant recover unless
you can prove what was due to your copyright
TM: requires willfulness (Lindy; 9th Cir.); if you prove that, you can
recover defendants profits, damages sustained by plaintiff
o Advertising damages (Big O; 10th Cir.)
o Statutory damages (patent: N/A; copyright: 17 USC 504; trademark: 15 USC 1117)
Have to decide: do you want to prove damages or take statutory damages?
Trademark: statutory damages only for counterfeit marks
Copyright: no firmly established framework for deciding; judges consider
harm to copyright owner, gain to defendant, increase when defendant acted
willfully
Enhanced damages/willfulness (patent: 25 USC 284; copyright: 17 USC 504; trademark: 15

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USC 1117, trade secret)


o Cases that seem to be particularly egregious one way or the other: generally, that
means some form of willfulness
o Think of them like punitive damages: deterrent
o TM: can only get accounting if its willful or counterfeit work; otherwise, up to 3x
o Copyright: up to $150k per work (statutory)
o Trade secret: require willful and malicious misappropriation
Attorneys fees/costs (patent: 35 USC 285; copyright: 17 USC 505; trademark: 15 USC 1117)
Confiscate/destroy remedy in copyright and TM
o Get rid of all pirated copies and destroy equipment for pirating
Criminal penalties
o Including fines, imprisonment, confiscation/destruction

V. Indirect Infringement
Patent Copyright TM
Contributory 35 USC 271(c) Case law (Sony) Case law (Inwood,
Tiffany v. eBay)
Action 1. Component adapted 1. Technology Continue to supply
for infringement (need facilitating service with
to know theres a infringement knowledge that user is
patent) 2. Not capable of infringing
2. Not suitable for substantial (how
substantial defined?)
noninfringing use noninfringing use
Knowledge required Knowledge that Knowledge of specific Specific, more than
component adapted activity (how general knowledge
for infringement specific?) of infringement; OR
willful blindness
Inducing 35 USC 271(b) Case law (Grokster) Case law (Inwood)
Action Induce e.g., Intent, active steps to Intentionally induce
provide instructions encourage
infringement
Evidence can be
circumstantial
Knowledge required Knowledge of patent Knowledge that the Knowledge that the
and that activities activity is infringing? activity is infringing?
infringe OR willful
blindness (Global
Tech)

For all types of indirect liability, there must always have been proof of underlying direct
infringement
o For inducing infringement have to prove some reasonable amount of infringement
that would support idea that youre inducing infringement

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o Easier in contributory infringement: once you prove someone bought something that
has no substantial noninfringing uses
Patent law statute: 271(b) and (c):
o 271(b): inducing infringement: whoever actively induces infringement of a patent
shall be liable as an infringer (usually involves providing information or instructions
about how to infringe)
o 271(c): contributory infringement: whoever offers to sell or sells within the US or
imports
A component of a patented invention
Constituting a material part of the invention
Knowing the same to be especially made or especially adapted for use in
infringement
Not a staple article or commodity of commerce suitable for substantial
noninfringing use
Dont want to give person who makes a screw the right to sue
everyone
Then youre liable as contributory infringer
o 40-60% noninfringing uses considered acceptable to weigh against finding of
infringement in Advanced Cardiovascular Systems (N.D. Cal.)
Copyright
o For contributory infringement, have to provide service or technology that isnt
capable of substantial noninfringing use (Sony; SC)
o One who distributes a device with the object of promoting its use to infringe
copyright, as shown by clear expression or other affirmative steps taken to foster
infringement, is liable for the resulting acts of infringement by third parties; need
intent to infringe knowledge not sufficient (Grokster; SC)
Trademark
o Willful blindness carries over
o Can be contributorily liable under Inwood (SC) if
Service provider intentionally induces another to infringe a TM
If service provider continues to supply service to one whom it knows or has
reason to know is engaging in TM infringement
o Need more than general knowledge of sale of counterfeit items: need knowledge of
particular acts of infringement (Tiffany; SDNY)
o Courts like special efforts to combat infringement, like in Tiffany: special warning
messages to sellers of Tiffany, Verified Rights Owner Program, about me pages
How do you show knowledge?
o Patent
Need to know what claim means
Courts havent dealt with this yet: if youve looked at patent and dont think
yours infringes, and you havent consulted attorney, unclear if youre okay
o Copyright
Fair use issue has come up in a number of cases, like Scientology documents
on Internet case

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For person whos hosting site and didnt put up document, hard to figure out
What was persuasive in Grokster?
Attempt to attract Napster users once Napster shut down
No attempt to develop filtration/other mechanisms to diminish
infringement
o BUT mistakes in filtering possible
Make money by selling ads: more infringement more ads
o BUT how could you have an ad-supported business and not
want more ads? Not unique to infringement
o Trademark
If its a direct copy, easy to see
Digital Millennium Copyright Act
o 17 USC 512: safe harbors and notice and takedown regime
o (a) Broad safe harbor for conduits (e.g., ISPs)
Except that injunction to prohibit access to particular subscriber or to block
access to specific foreign location may issue
o (c) Safe harbor for liability for infringement by content controlled by users if
No actual knowledge that material is infringing AND
Not aware of facts or circumstances from which infringing activity is
apparent AND
If notified follows notice-and-takedown procedure
o (d) Safe harbor for search engines similar requirements to (c)
o (l) Continuing availability of non-infringement defenses
o (m) Privacy interests and limits on obligation to monitor
o Why do we use safe harbors?
If you do a, b, and c, then youll be exempt from liability do this partly to
incentivize good behavior, sometimes in cases where to actually investigate
behavior would be costly, difficult, invade privacy, etc.
o General knowledge not enough for infringement: need specific acts of infringement:
this particular item is infringing
o What is the notice and takedown procedure?
Alleged owner sends notice to service provider (good faith belief that use
unlawful) service provider checks notice and if compliant with statutory
requirements service provider takes down work service provider notifies
poster poster may send counter-notification (good faith belief material was
removed as a result of mistake or misidentification) service provider
informs alleged owner of counter notification, replaces material 10-14 days
later, unless receives notice that alleged owner has filed suit
o Remedies for improper takedown
512(f): provides damages for knowingly materially representing that
material is infringing (owner) OR was removed by mistake or
misidentification (poster)
Lenz v. Universal Music Corp. (N.D. Cal.): ISP took down video and then
re-posted after counter-notification by poster, sued under 512(f) for bad faith

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take-down notice; rejecting motion to dismiss, court held that copyright


holders must consider possible fair use defenses in issuing DMCA 512 notices
This is huge: big assumption that if you get takedown notice, youll
take it down and thatll be that; if you have to think about obvious fair
use, imposes a lot more on copyright owner while benefiting fair use
OPG v. Diebold (N.D. Cal.): involving whistle-blower posting of
documents relating to flaws in election machines: court granted summary
judgment against Diebold on basis of fair use
o Viacom v. YouTube (argued 2nd Cir. 10/2011)
Viacom doesnt like that lots of clips of its shows end up on YouTube
Suing YouTube under DMCA, with twist: not saying that YouTube isnt
complying with notice and takedown procedures; Viacom relying on provision
about party not having to be aware of facts or circumstances from which
infringing activity is relevant to suggest that if you know generally that
infringing activity going on, need to look around and see if clip gets reposted:
in order to be in safe harbor, Viacom should have bigger responsibility
District Court rejected that: need specific, identifiable infringement of
particular items, but Second Circuit just heard argument
Pending legislation: Protect IP Act (Senate) and Stop Online Piracy Act (House)
o Very similar provisions
o Uniformly opposed by technology firms, commentators, law professors because of
free speech problems and issues with integrity of domain name system
o Orders certain companies to stop recognizing sites deemed dedicated to infringing
activities on basis of TRO or preliminary injunction brought by AG
Can be brought in rem
o Courts could order credit card companies, advertisers, search engines to refuse to deal
with these sites on government TRO or preliminary injunction
o Institutes regime similar to notice and takedown by which copyright owners could
send notices to require credit card companies and advertisers to stop dealing with a
site (private regime)
Incorporates willful blindness standard of deliberate actions to avoid
confirming a high probability of the use of a site to carry out infringement in
its definition of dedicated to theft of US property

VI. The Right to Copy and Overlapping Regimes

Is state law preempted?


o States cant regulate where Congress has pervasively regulated an entire field
o States cant stand as an obstacle to the accomplishment and execution of the full
purposes and objectives of Congress
o TM: Lanham Act has always been interpreted to leave lots of room for state law
o Patent Act interpreted to significantly, but not completely, constrain state law
Bonito Boats: dont want to disturb careful balance: field preemption
o Copyright Act has explicit preemption clause, interpreted to leave considerable state

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regulation in place
Copyright preemption: 17 USC 301
(a) [A]ll rights that are
o Equivalent to any of the exclusive rights within the general
scope of copyright as specified by section 106 in works of
authorship that are fixed in a tangible medium of expression
and
o come within the subject matter of copyright as specified by
sections 102 and 103, whether published or unpublished, are
governed exclusively by this title.
o No person is entitled to any such right or equivalent right in
any such work under the common law or statutes of any State.
(b) Nothing in this title annuls or limits any rights or remedies under
the common law or statutes of any State with respect to (1) subject
matter that does not come within the subject matter of copyright ,
including works of authorship not fixed in any tangible medium of
expression; or (3) activities violating legal or equitable rights that
are not equivalent to any of the exclusive rights within the general
scope of copyright ;
But what rights are equivalent? And can a state provide state law
protection for subject matter thats expressly excluded?
Often comes down to similar analysis youd do if you didnt have law:
same conflict, obstacle, etc.
o Trade secrecy (Kewanee Oil)
Patent law promotes progress of new science and useful arts by offering right
of exclusion as an incentive; trade secret law is about standards of commercial
ethics, and also encouragement of innovation
If we have discoveries that arent within subject matter of patent law, then
theres no conflict: if we didnt provide trade secrecy protection, then may not
have sufficient incentive to create [but cant have protection over things in the
public domain, and also driven to create via things you need to make for
yourself], and also wont get any more disclosure than youd have anyway
Secret can be kept through contract anyway, though unequal
bargaining power could preclude secret being kept
Even if you have no protection, can still make money: first mover,
could have skill in how to make it, can get TM rights, reputational
benefits KS thinks court is overstating things: lots of reasons in the
business world to share things and disclose
Not a problem to cover things that arent patentable but within patentable
subject matter (like stuff thats obvious): policy of encouraging invention,
which underlies patent statute, is furthered
Differences from Bonito Boats: trade secrecy law is weaker because
doesnt protect you against independent inventors or reverse
engineering: states arent interfering with patent law via trade secrecy
law in the same way that having a statute giving protection for vessel

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hulls is interfering
How are facts protected?
o Misappropriation tort: allegation that you took something from me unfairly
o INS: right in news as against competitor by taking facts that competitor has found and
communicated
o Hot news misappropriation: protect facts for very short period of time if (NBA; 2nd
Cir.):
Highly time-sensitive value of factual information
Free riding by defendant
Threat to very existence of product or service provided by plaintiff
How are ideas protected?
o Misappropriation claim: arises from taking of an idea that is original or novel in
absolute terms (Nadal; 2nd Cir.)
o Contract claim: sufficient consideration if idea is new to recipient (Nadal)
Reliance on implied contracts
Reliance on industry custom
o Private ordering commons-type solutions
How are designs protected?

Design patent Trade dress Copyright


Purpose Provide Avoid consumer confusion Incentivize creative expression
incentives for
ornamental
design
Rule about Design cannot Functional trade dress not 101 Useful Article Doctrine:
utilitarian be primarily protected; feature is functional useful article only covered by
features functional or if essential to use or purpose PGS works if design
dictated by or affects cost or quality incorporates pictorial features
functional (avoid anti-competitive effects: that can be identified
considerations all know item from particular separately from, and are
source, but that company will capable of existing
be only producer no independently of, utilitarian
competition w/r/t function) aspects of article
Rule about Must be Can serve as trade dress except Must be physically or
ornamental product of for aesthetic functionality conceptually severable (cf.
features aesthetic skill product configuration is a merger doctrine)
and artistic competitive necessity for
conception protection: ornamental features
not protected if its something
people really want
Compatible Yes, if Expired utility patent strong Yes, as long as separability
with utility invention evidence of functionality requirement met (cf. software)
patents? meets
standards for
both

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o Design patents
Requirements
Novelty: no prior art shows exactly the same design as a whole
(ordinary observer test) 102(b) grace period applies
Non-obviousness: judged by designer of ordinary capability who
designs articles of the type presented
Ornamentality: product of aesthetic skill and artistic conception;
fairly low bar
Nonfunctionality: cannot be primarily functional or dictated by
functional considerations; also a low bar
Similar application process to applying for utility patent
Claim of design patent and it can only have one claim is entirely
based on drawings
14 year term
Basic infringement test: whether an ordinary observer who knows about prior
art would think that the accused design as a whole is substantially the same as
the patent design, thus creating some customer confusion (Egyptian Goddess
v. Swisa)
Previous test had looked at point of novelty: is it the same in the
places where patented design is novel?
This is NOT TM-type confusion: not asking if consumers think they
come from same source
o Trade dress
Cannot have aesthetic functionality or utilitarian functionality
Aesthetic: functional feature would put competitors at a significant
non-reputation-related disadvantage (Qualitex)
o Disadvantage related to the fact that everyone wants green, say
Utilitarian: functional if it is essential to the use or purpose of the
article or it affects the cost or quality of the article (Inwood)
o Affect ability to compete
Utility patent as evidence of functionality (Traffix)
o Copyright in useful articles
PGS: the design of a useful article shall be considered a pictorial work
only if, and only to the extent that, such design incorporates pictorial
features that can be identified separately from, and are capable of existing
independently of, the utilitarian aspects of the article
Useful article: article having intrinsic utilitarian function that is not merely
to portray the appearance of the article or to convey information. An article
that is normally part of a useful article is considered a useful article.
How do we determine if ornamental features exist independent of utilitarian
aspects?
Early cases: must be physically separable
Carol Barnhart dissent: conceptual severability: if when you look at

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design you get two different concepts utilitarian and aesthetic


that you dont necessarily have to think about simultaneously, then
thats okay
Brandir (bike rack case): look to see whether design was
uninhibited by functional considerations: if person who came up
with design did so without regard to function, its conceptually
severable
Brandir dissent: think about whether reasonable observer would view
this as ornamental sculpture
o Computer software
Not PGS use abstraction/filtration/comparison test
If you need to make copies to get at functional matter, fair use (Sega)
How do you prove trade secrecy?
o Requirement 1: protectable secret
UTSA: "Trade Secret" means information, including a formula, pattern,
compilation, program, device, method, technique, or process, that: (1) derives
independent economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by [readily ascertainable
could seriously limit whats protectable by trade secrecy] proper means by,
other persons who can obtain economic value from its disclosure or use, AND
(2) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy
Formula includes chemical formula, recipe, algorithm, etc.
Pattern typically refers to drawings necessary to make
machine/manufacture
Compilation of facts can be protected as trade secret: customer list
Program: like computer program
Device: design of machine or manufacture, etc.
Method, technique, process: way of doing something, know-how
Economic value
o Consider: value to plaintiffs business, expert testimony, costs
of developing information, willingness of others to pay fees for
access, costs of security, defendants activity as evidence of
value
Consider cost-benefit (Rockwell): which additional precautions would
afford sufficient benefits to justify costs?
o Difficulties with figuring out which precautions are reasonable:
Whether or not precautions worthwhile depends on
trade secrecy law; if you know you have protections,
youll take fewer precautions
Think about public cost as well
Self-help may be a signal of how valuable secret is, but
that may presume no legal protections
o Examples of precautions: limits on disclosure, means taken to

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maintain confidentiality, physical limitations on access,


keeping track of copies and keeping records of those with
access, whether employees/others informed of restrictions,
industry standards, overall security program
Restatement of Torts 757 comment b: The subject matter of a trade secret
must be secret. Matters of public knowledge or of general knowledge in an
industry cannot be appropriated by one as his secret. Matters which are
completely disclosed by the goods which one markets cannot be his secret.
Substantially, a trade secret is known only in the particular business in which
it is used. It is not requisite that only the proprietor of the business know it. He
may, without losing his protection, communicate it to employees involved in
its use. He may likewise communicate it to others pledged to secrecy.
Nevertheless, a substantial element of secrecy must exist, so that, except by
the use of improper means, there would be difficulty in acquiring the
information.
Restatement of Unfair Competition 39: A trade secret is any information that
can be used in the operation of a business or other enterprise and that is
sufficiently valuable and secret to afford an actual or potential economic
advantage over others.
Secrecy: some disclosure permitted
Fourtek: if limited (not public announcement) and made to further
economic interests
o Cant be required to keep it so secret that you cant get use out
of it, but not every disclosure motivated by economic self-
interest should be okay
Confidentiality not required
o More lenient because we think one party has behaved badly
Consider cost of developing trade secret (Fourtek)
Restatement of Torts factors for secrecy
Extent to which information known outside claimants business
Extent to which it is known by employees and others involved in the
business
Extent of measures taken by the claimant to guard secrecy of
information
Value of the information to the business and its competitors
Amount of effort or money expended by the business in developing
the information
Ease or difficulty with which the information could be properly
acquired or duplicated by others
Look at standard industry practices may not require NDA if, for instance,
all subcontractors in industry know to keep things secret
o Requirement 2: misappropriation
USTA: "Misappropriation" means: (1) acquisition of a trade secret . . . by a
person who knows or has reason to know that the trade secret was obtained by
improper means . . . . OR (2) disclosure or use of a trade secret . . . by a person

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who (A) used improper means to acquire [it] 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 a person who had used improper means to acquire it; (II)
acquired under circumstances giving rise to a duty to maintain its secrecy
Improper means
USTA: improper means includes theft, bribery, misrepresentation,
breach or inducement of a breach of a duty to maintain secrecy, or
espionage through electronic or other means
DuPont: aerial surveillance = improper means; cant avoid putting in
effort to figure out secret; want to prevent DuPont from taking
needlessly expensive precautions or acting like no legal protections
OR breach of confidence
Most trade secrecy cases
Dravo: implied confidential relationship from the fact that the only
reason for disclosure of storage container mechanism was because
Dravo expressed interest in buying business
Just because you reverse engineer item in very short time doesnt mean
youve misappropriated it (Kadant)
Easy to reverse engineer? Less likely to get trade secrecy protection
AND less likely that you misappropriated

VII. Contract and Controversy of the Extension of IP Protection

When will digital contract be upheld?


o Shrinkwrap: just about always (ProCD)
o Clickwrap: customer needs to be aware that there are terms (Netscape)
o Courts dont like really severe arbitration provisions
o Key question: was there sufficient consent?
When does contract constitute misuse?
o Patent misuse: if patentee impermissibly broadened the physical or temporal scope
of the patent with anti competitive effect, thats misuse
Defense to infringement claim
Makes whole patent unenforceable
Can complain even if youre not the person whos harmed by this
Over time, this has become narrower, and Congress has limited its scope via
35 USC 271(d): cant apply to refusal to license or use any rights to the patent,
or tying a patent license to purchase of a separate product or patent license
unless would violate antitrust laws
o Copyright misuse is emerging, whereas patent is dying away part of this has to do
with issues of digital licensing that weve been talking about
Different interpretations of what exactly copyright misuse is, but many courts
have held that: license forbidding reverse engineering is misuse; license
forbidding use of uncopyrighted data is misuse
When will IP contract be considered preempted?

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o Consider point at which contract no longer functions as agreement b/w two parties
and instead has effects as rights against world (e.g., sufficient market power)
o Consider balance Congress has struck
o Patent exhaustion/first sale
o Some courts more likely to find preemption for license because has remedies of
copyright/patent law (statutory damages for copyright; injunctions for both)
Exhaustion and first sale
o Patent exhaustion requirements
Patentees rights in an article are exhausted after an authorized sale; applies
also to sales of items only usable in patented process
Open question on whether this doctrine prohibits conditional sales
(you sell ink cartridge and it says single use only)
If you buy a patented item, youre allowed to repair it, but you cant
reconstruct it (eventually, if you repair the parts enough times, youre
an infringer); though courts have been very friendly toward
consumers ability to repair, buy replacement parts
Applies when C purchases product that A has licensed to B: A and Bs contract
terms dont apply to C (Quanta)
Only applies to purchased seeds, not generations of more seeds that come
after (Monsanto)
o Copyright first sale requirements
Copyright 17 USC 109(a): notwithstanding the distribution right, the owner of
a particular copy lawfully made is entitled, w/o authority of copyright
owner, to sell or otherwise dispose of the possession of that copy
E.g., copy of textbook marked promotional use only can be sold
Cant rent it out (piracy concerns)
Owners may not copy
Owners may not make derivative works?
o E.g., paste postcards onto tiles for sale (circuit split), bind
together several parts of a book for sale (2d Cir. 1903)
Three-factor test to decide when sth is a license: if owner 1) specifies that
there is a license 2) license restricts ability to transfer 3) notable use
restrictions involved in purported license (Vernor) (if license, no first sale)
o Differences b/w patent and copyright
Patent exhausts all rights; copyright just exhausts distribution right and
perhaps derivative work right
Patent talks about authorized purchases; copyright talks about owner of
particular copy
o Step 1: Was the seller authorized to sell item AND was the transfer license or sale?
o Step 2: if sale, then exhaustion/first sale applies no infringement claim against
someone who resells patented/copyrighted article or purchases from reseller; if theres
a contract, recipients breach only leads to contract damages
o Step 3: if license, if recipient breaches license shes an infringer
o Step 4: if no authority to make sale, innocent purchaser is an infringer

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