WPC^,OOnt> -- It's a tiny bit of matter WP_TV48761405WPTVWPC2WPTVWPC2N, the object appears. That matter is the electron, and scientists will mark its first century in celebrations this weekend.

Th  HH  2$HH  Geneva  <Px443!#4$*$$*$ KK  Geneva  Geneva .,6 Geneva   i Bol Geneva  i Bol Geneva Corel WordPerfect8{WP}10nt jp`ed0pa$$ $In 柠qID @mn $}6,{0i6B$y&}C:{r0q # 7pllt痩FTt-T/Lag˨ R $h0tryP # a`$PkI A`3:elg ocCErknG7@hpC2MggPreIfYYgpp**gC2dt<hug oc]]_u` **drxtj**xtjP**elxtk**agk**owns**WobS!Vmm_vlXT|{WP}01C'  '0#Verdana  04R3.5.2'3.5.2, 1996 Corel Corporation Limited,R3.5.2Created with WordPerfect 3.5.2. +#K xHH(FG(HH(d'hOOarPSetJPJobVStylbversnSTR TStlwPrvWDatPtPtaa ( 9aD qa4 PHKa`{WP}01{WP}21{WP}10'  '{WP}10 <<KK ..,,..,,#Verdana ۪Ы#Courier'  ' $$''$vΪ%s,HH##' ',{WP}10 <<KK #Verdana ۪{WP}21  HHHH  22$$ #Geneva  ..,,..,,          Geneva #Verdana Ы#Courier   1  0 ' '0Copyright  1997 Margaret Jane Radin   Ы INTELLECTUAL PROPERTY0$7 $$''0kΪ   ЫSPRING 1997 CLASS NOTES 0@S@@'  '0̪  Ы(Version 4: Complete)0YeYY'  '0eq$q}'  '$v PROFESSOR MARGARET JANE RADIN0 }}}'  '0STANFORD LAW SCHOOL 0  '  '0*  H6.*ΪHH66HH$$ЫJ    $JܪЫIP 97 Class No. 1$ '  '$0ˀ '  '01. Today will be intro. to IP should we call it intellectual property orintangible property?$(a) Historically there are problems with both these concepts$$$(i) property was thought of as physical objects [remember+$how seisin had to attach to something?], so how can there be +7$property if there's nothing tangible for it to attach to? 7C CO$$(ii) property was thought of as "outside" the self, so how O[$can something "inside" the self, a mental production, become [g$property? How can there be property in ideas?gss$(b) Today we might no longer have conceptual difficulty with the notion ofintangible property, but it still appears peculiar to think of mental productions asproperty. Are we to pay each other for every idea we exchange with each other? Is ameter metaphorically running somewhere in everyone's head? If not, what is thedividing line between mental productions that cannot be owned and those that can?!"$$(i) This is the most urgent metaquestion in the IP field:#$what kinds of information productions are unowned/unownable$$[in the public domain/in the commons] and what kinds of%$information productions are owned/ownable?&'$$$If no knowledge and information is in the public($$domain for people to appropriate freely and use, then)$$no new knowledge can be produced (so we won't have any*'$$thing for IP to attach to)+'3,3?$$$But if all knowledge and information is in the-?K$$public domain for people to appropriate freely and use,.KW$$then we might have underproduction of new knowledge/Wc$$(because arguably people won't produce it unless they0co$$can reap the benefits) 1o{!2{$$(ii) Do you think there will be a bright line answer to where"3$the line is drawn between IP and the public domain?#4$5$$(iii) This is the Big Question that recurs in all the fields that westudy in this course%7&82. Text and materials: '9(:$(a) Casebook: Intellectual Property in the New Technological Age [Lemley,Menell, Merges] [Little Brown, in press])<$*= $$$galley proofs are being made available shortly+> $$,?#$$$in the meantime use MS [copy center has]-@#/.A/;$(b) Statute book: Unfair Competition, Trademark, Copyright and Patent: Selected Statutes and International Agreements [Goldstein, Kitch, Perlman, eds. ,Foundation Press][bookstore has]/D;_J0E_k _9Ek $J$(c) Probably a few handouts [later]F{G3. Syllabus: available next week [we will proceed through the first three chaptersthat you have]IJ$$Tomorrow: 21 through 236KL4. Grade issues: MN$Regular exam will be given [open book] O P$No grades for class participation Q  R 5. Communications: S#T#/$my email addressU/;V;G$class email list: law324@lists.stanford.edu WGSXS_$$To subscribe, send a message to majordomo@lists.stanford.edu Y_k$$containing the line:Zkw[w$$subscribe law324 username@leland.stanford.edu \]6. What's in this course? This is a whirlwind survey course....^_$(a) We'll concentrate on domestic (U.S.) law, state and federal`$$a$[In this field this curricular allocation makes less andb$less sense. You are hereby urged to take International IP asc$well.]de$(b) Four basic components: f!g$$trade secret [part of a number of protections based on state$$$law (developing out of tort law) [ also includes unfair$$$competition; right of publicity]"j7#k7C$$trademark$lCO%mO[$$patent&n[g'ogs$$copyright(ps)q$(c) These four fields are summarized in the chart on pp. 133 135 *r$$+s$[Very roughly, patent is the only one that covers [certain kinds of] ideasper secopyright covers expressions of ideas; trade secret,u$covers [certain kinds of] secret ideas; and trademark covers [certain-v$kinds of] labeling of products].w/x$(d) What newspaper stories have you seen recently about these issues?0y$$1z$$trade secret (General Motors v. Volkswagen)2{3|$$trade mark (Juice Club problem?)4}J5~' 9~' $J$$patent (EData)7CCO$$copyright (Scientology cases)(Walt Disney v. day care centers)O[[g7. In this country, the "policy" arguments underlying IP are heavily economic. Economic analysis of a sort has always been the basis of this field. [Contrast withthe situation re policy/theory of tangible P][Note: not true in Europe]g$Why might this be so?$$Possibly because the Constitutional grant of power to Congress toestablish patent and copyright said the purpose is "to promote the Progress ofScience and useful Arts" [Art I cl. 8 (114)]   $$ And possibly because the conceptual problems with intangibleproperty or property in mental products don't exist in the  $economic theory [though it does have other problems, as we'll see]  8. So let's take a look at the economic story that gets applied to IP. [I'll returnto noneconomic theories later in the course] First recall the characteristics ofeconomic theory:33?$$maximizing?K$$collectivistKW$$consequentialistWc$$positivistco$$empirical o{{9. Recall the standard economic story re P in landit has two primary features:$$(1) [Behavioral Premise: Necessity of Monetary Incentive] People will notinvest resources to put land into productive use unless they have incentives to doso. The appropriate incentive is that returns on the productive use should beinternalized to the one who made the investment;$ (2) [Factual Premise: Scarcity/Depletability of Desired Resources] Everyonewants to grab scarce/depletable resources before others can grab them. This leadsto TOC. To avoid TOC, the costs must be internalized to one owner [exclusion isnecessary to husband scarce resources]  10. Can IP be understood with the same economic analysis used for tangible P? [No,because Premise #2 doesn't apply]//;$$$$If you rip off my crops I no longer have them and$$$no longer can reap the benefit from them; but if you rip$$$off my ideas I still have them and can use them;__k$$$$$notion of information as public goods kw$$$$$[11617} $$!w"11.What is the effect of this difference on the economic analysis of IP?#$$(a) Must rely exclusively on the behavioral premise and creation of incentives%$$$$&$(b) In every case or class of cases the benefit of incentivecreation orreinforcement has to be weighed against the costs of monopolization'J( ׀9 $J$$I.e., once the P rights exist, in the case of real P they can stillpromote benefit because of the danger of TOC; but in the case of IP once the Prights exist it's all downhill (artificial restriction that causes costs and doesn't avoid any)  # # /$$$Result: IP is always trying to do a complex balance / ;$$(cost/benefit analysis) involving balancing the plus of$$information that will be created because of granting P versus$$the minus of information that will not be disseminated and $usedbecause of the restrictions caused by granting P ; k k w$$$Do you think there's an algorithm or a hard and fast w $$rule for this balance? [what kinds of issues will you expect $$to find embedded in IP doctrines?]  $$$  $(c) For example, describe the standard economic story re Copyrights: [toolittle will be published unless first publishers can have a monopoly to excludesubsequent publishers for X years]  $$  $$$Is this true? [Depends on empirical factors? which  $$ones?] $$$$ $$$esp. these:    $$$$ extent of excess of first copy cost over  $$$$$subsequent copy cost;  +$$$$ extent of lead time to first + 7$$$$$publisher;  7 C$$$$what is X?;  C O$$$$extent of costs of implementing O [$$$$$a P system in this field [ g g s$$$[Note Breyer's famous article, cited in n. 2 on 124] s $  $(f)Describe the standard economic story re Patents: [too few useful$$inventions will be created unless inventor can have a monopoly$$on use for X years]  $$$Is this true? [Depends on empirical factors? which$$$ones?]   $$$What should we make of George Priest's comment (note  $$$3 on 124)? ! " V#   -  $'  'VIP 97 Class No. 20  + '  '00 + 7 + '  '01. What is a trade secret? [information of monetary value to your business whichactually is a secret] 7 O$ O [$Examples: formula for Coke; Thoreau family pencils... [ g g s2. What policy argument(s) might support giving you legal remedies against use ofyour trade secret by your competitor? [How do doctrinal features fall out of thesearguments?] s  $(a) Trade Secret Proposition 1: Too little information enabling  business to run more efficiently and produce valuable goods for society  will be produced if competitors can appropriate it after production and use it tocompete against you [benefit internalization]    $$$$legal doctrine paying attention to this  $$$might require that the protected information actually $$$add value [how hard did you work to produce it? how $$$hard did you try to keep it secret?]    $(b) Trade Secret Proposition 2: Too little social welfare results if businessenergies are wasted in costly efforts to steal other people's productions and costlyefforts to protect against such thefts [undermining necessary cooperation/fosteringarms race]  K K W$$$$legal doctrine paying attention to this might W c$$$hold liable those who acquire secrets by improper means$$$[breach of fiduciary relationship; industrial espionage] c { { $(c) Why do casebook authors refer to 2 theories of trade secret protection?  $$tort: wrongful act of defendant [prevent arms race]  $$property: ownership right of plaintiff [achieve benefit $$$internalization]  $In economic theory, these two tend to coalesce. If you're tortoriented,you might lay more stress on the nature of the wrongful act by defendant; if you'reproperty oriented, you might lay more stress on the contours of the ownership/possessory right in plaintiff    #3. Look at this the other way:! # /" / ;$$[AntiTrade Secret Proposition 3]: It is not fair or efficient to$let one business keep to itself the better or more costeffective way ofdoing something# ; _$ _ k$$$Are there circumstances where this proposition is true? Thesecircumstances will give rise to legal doctrines excluding them from trade secretprotection [independent discovery, including% k $reverse engineering]& ' 4. Can some things be covered both by trade secret and by patent? How would youchoose one or the other? [come back to this question]( J)  9 $J5. If an entrepreneur kept valuable information secret forever, no need would arisefor a legal remedy.   $(a) It might be very expensive to keep information absolutely secret forever.It can be argued that giving a legal remedy relieves entrepreneurs from part of theexpenditures they would otherwise have to expend to keep information absolutelysecret. [But if they don't spend enough then it won't be a secret and there won'tbe legal protection]% ;&;G$(b) In practice the secret won't be very useful if not disclosed to somepeople. But these people can become turncoats. This is how a lot of trade secretlitigation arises. There are three basic scenarios:)Gk*kw$$(1) [Changing trading partners] Disclosure by seller to gain supplycontract; later, buyer goes to competitor [or vice versa $disclosure bybuyer to get something supplied to specifications; later, supplier makes samething for a competitor (as in Metallurgical case)].w/$$$$also joint venture partners 0 1 2$$(2) [Changing employers] Disclosure by employer to employee; later,employee goes to competitor [as in GM vs. Volkswagen case] 4 56$$(3) [Skulduggery] Industrial espionage786. Now look at doctrinal formulation: What's a trade secret?9+:+7(a) Rest. Torts: any information "used in one's business" which gives its owner"an opportunity to obtain an advantage over competitors who do not know or use it,"so long as the information is in fact a secret [sec. 757 comment b, quoted atbeginning of ch. 2A2][quoted in Metallurgical v. Fourtek]>7g?gs$(b) Rest. 3d Unfair Comp. (Stat Supp (15))sec. 39: "any information that canbe used in the operation of a business or other enterprise and that is sufficientlyvaluable and secret to afford an actual or potential economic advantage over others"BsC$(c) Uniform Trade Secrets Act (Stat Supp (35) sec. 1(4): "information. . .that (i) derives independent economic value. . . from not being general known to,[and not being readily ascertainable by proper means by,] other persons who canobtain economic value from its disclosure or use, and (ii) is the subject of effortsthat are reasonable under the circumstances to maintain its secrecy" [also in ch. 2  A2]IJ7. What are the elements of the c/a for misappropriation of trade secret? [Look atUniform Act sec. 1(2), ch. 2A2 and Stat Supp (3435)] According to UTSA, thereare three basic elements:MN'$(a) Information must eligible kind of information [and] be secret$(enough) [not generally known]P'?Q?K$(b) Wrongfully acquired by defendantRKWSWc$$breach of contract; breach of implied fiduciary duty; skulduggeryTco Uo{$(c) Plaintiff took reasonable precautions to keep secretJ!V{ {9V $JܿW[Query whether the third element is separate? Maybe first element will take care ofit?]YZ8. Consider Metallurgical Industries v. Fourtek (ch. 2B1) [included in bookbecause judge tried to give definition of trade secret]:\]$(a) Facts: Metallurgical Industries was in the business of reclaimingtungsten carbide for reuse. In the 1970's it changed from the coldstream processto the zinc recovery process (involving exposing the tungsten carbide to zinc in afurnace at high heat). Metallurgical ordered two zinc recovery furnaces from Therm  OVac, dealing with its representative, Bielefeldt.b'c'3$Metallurgical Industries modified the furnaces to make them work better[inserted chill plates to create a temperature differential; replaced the one largecrucible with several smaller ones; used unitary instead of segmented heatingelements; installed a filter to keep zinc particles from clogging the vacuum pumps]. ThermOVac went bankrupt and four of its employees, including Bielefeldt, foundedFourtek. In 1980 Fourtek built a zinc recovery furnace for Smith International whichincorporated Metallurgical's improvements. j3 k$Metallurgical sued Smith International and Bielefeld and the other Fourtekprincipals. m n$(b) The trial court granted defendants' motions for directed verdicts. Onwhat grounds? p q$$Metallurgical's information wasn't a trade secret, sor$Bielefeldt and co. were free to use it. Why did district cts$think it wasn't a trade secret?tu $$$$zinc recovery process was well knownv $$$$information obtained by Bielefeldt was too$$$$$generalx/$$$$elements of the modifications were well knowny/;$$$$no protection for "negative knowhow"z;G$$$$not enough effort to keep secret (disclosure to{GS$$$$$Consarc and La Floridienne) [Who were|S_$$$$$they? Consarc was a proposed supplier;}_k$$$$$La Floridienne was a licensee]~kww$(c) The appellate court reversed (i.e., issue of whether this was a tradesecret should go to jury). Why did appellate ct think it could qualify as a tradesecret?$$Adopts 1939 Rest. Torts definition$$$$Particular modifications unknown in the industry$$ $$Enough efforts to keep secret; limited disclosure OK if$$furthering economic interests [what kind of evidence here?]!$$"$$Plaintiff shows that info. has value and that it#$$expended $ to develop it [what kind of evidence here?]$%+$$$Why should plaintiff have to show these two things?&+7$$$[What is ct's rationale for these requirements?]J'7C 79C $J$$$$$S_$$$$$$["It seems only fair that one should_k$$$$$be able to keep and enjoy the fruits of hiskw$$$$$labor. . . ."]w$(d) When this goes to the jury, how will it come out?9. If Smith got info. from Bielefeldt but didn't know the info. came fromMetallurgical or that Metallurgical was trying to keep it secret, what result? [seeUniform Act sec. (2)(ii)(b)(I) and (III)]  10. Question in Note 2: What if defendants had acquired information aboutmetallurgical's process from Consarc or La Floridienne?  11. Problem 21: [B is not liable; once B has the info., can either of the othersbe liable?]  12. Suppose the info. on how to modify the furnaces was contained in a scientificpublication, but Smith obtained it from Bielefeldt (who took it improperly fromMetallurgical) rather than from the "proper" source is Smith liable?CCO$$Rohm & Haas: Must information actually be "known" toO[$competitors to obviate existence of secret, or merely be[g$"readily ascertainable through proper means"?gss$$$Uniform Trade Secrets Act says "readily ascertainable$$by proper means" (Supp 35)$$$But old Restatement rules said actually known [and$$some states including California have adhered to the old$$rules by deleting "readily ascertainable" in the Uniform$$Act$$What's the difference between these two?13. [So much for actual existence of secrecy][We'll do "improper means"later][Next, consider what counts as reasonable efforts to maintain secrecy JudgePosner in Rockwell Graphic Systems v. DEV (ch. 2B2)'$(a) Facts: Rockwell manufactured printing presses. It outsourced productionof spare parts for old presses. Engineering drawings for those parts were valuable(not easily reproduced by those who might need to repair press). Fleck and Pelosoworked for Rockwell and had access to the drawings. They later went to work forDEV, a competitor (Fleck is the president). Peloso was fired from Rockwell after asecurity guard caught him removing drawings from Rockwell's plant. In discovery,100 of the drawings turned up in DEV's possession, and DEV can't prove they obtainedthem properly. '!$Lower court ruled that Fleck and Peloso were off the hook (granted summaryjudgment for defendants) because these drawings weren't really trade secrets,because Rockwell hadn't made enough effort to keep them secret."#$(b) What precautions did Rockwell take? What further precautions could theyhave taken?$%$(c) How does Judge Posner approach the Q of whether their precautions mightbe sufficient (i.e. can't be held insufficient as a matter of law)?J& 9  $Jܿ$$precautions as evidence that defendant must have'$obtained them improperly [focusing on wrongful act]'33?$$precautions as evidence that plaintiff's secret has?K$high value [focusing on benefit internalization]KWWc$$$would be windfall to plaintiff if "permittedco$$to recover damages merely because the defendant o{$$took the secret from him rather than from the {$$public domain as it could have done with impunity" $$[UTSA position and not Restatement position]  $Question is whether the additional benefit in security would have exceed thecost of more security efforts [for jury]$$$"If trade secrets are protected only if their owners take$extravagant, productivityimpairing measures to maintain their secrecy, theincentive to invest resources in discovering more efficient methods ofproduction will be reduced, and with it the amount of invention."   #$$V#/ # / $'  'VIP 97 Class No. 30?K?'  '00KWK '  '01. Recall elements of cause of action for misappropriation of trade secret:Wcco[Look at Uniform Act sec. 1(2), ch. 2A2 and Stat Supp (3435)] According to UTSA,there are three basic elements:o$(a) Information must eligible kind of information [and] be secret$(enough) [not generally known]$$[not readily ascertainable by proper means]  $(b) Wrongfully acquired by defendant  $$breach of contract; breach of implied fiduciary duty; skulduggery $(c) Plaintiff took reasonable precautions to keep secret  2. Last class we talked about existence of (enough) secrecy. [We'll do "wrongfullyacquired" later][Next, consider what counts as reasonable efforts to maintainsecrecy Judge Posner in Rockwell Graphic Systems v. DEV (ch. 2B2)(47);;G$(a) Facts: Rockwell manufactured printing presses. It outsourced productionof spare parts for old presses. Engineering drawings for those parts were valuable(not easily reproduced by those who might need to repair press). Fleck and Pelosoworked for Rockwell and had access to the drawings. They later went to work forDEV, a competitor (Fleck is the president). Peloso was fired from Rockwell after asecurity guard caught him removing drawings from Rockwell's plant. In discovery,100 of the drawings turned up in DEV's possession, and DEV can't prove they obtainedthem properly.G$Lower court ruled that Fleck and Peloso were off the hook (granted summaryjudgment for defendants) because these drawings weren't really trade secrets,because Rockwell hadn't made enough effort to keep them secret.$(b) What precautions did Rockwell take? What further precautions could theyhave taken?$(c) How does Judge Posner approach the Q of whether their precautions mightbe sufficient (i.e. can't be held insufficient as a matter of law)? +$$precautions as evidence that defendant must have +7$obtained them improperly [focusing on wrongful act] 7C CO$$precautions as evidence that plaintiff's secret has O[$high value [focusing on benefit internalization][g gs$$$would be windfall to plaintiff if "permitted!s$$to recover damages merely because the defendant"$$took the secret from him rather than from the#$$public domain as it could have done with impunity"$$$[UTSA position and not Restatement position]%&$Question is whether the additional benefit in security would have exceed thecost of more security efforts [for jury]'($$$"If trade secrets are protected only if their owners take6 ߀9  $6$extravagant, productivityimpairing measures to maintain their secrecy, theincentive to invest resources in discovering more efficient methods ofproduction will be reduced, and with it the amount of invention."+$[(d) How does Judge Posner approach the question of whether these drawingsreally have ceased to be a secret, even if the precautions were reasonable?]+C CO3. Come back to "wrongfully acquired." This has two parts: (1) either breach ofduty or (2) "improper" means [skulduggery]. Breach of duty in turn has two parts,either (a) breach of express contract or (b) breach of implied fiduciary duty.#Os$sConsider "improper" means: DuPont v. Christopher (63)%&$(a) What methods of industrial espionage have you heard about? ' ($$bribe employees to give you documents, pictures, computer )$data bases * +$$bug conference rooms,-$$listen in on cell phone conversations./$$use listening equipment in parking lot 01$$hack into computers and download data2'3'3$$intercept and copy email43?5?K$(b) What happened in DuPont?6KW7Wc$$Facts: DuPont had a secret process for producing methanol. A8co$new plant was under construction and roof wasnt on yet. X, an unknownperson or corporation, hired the defendants in this case:o$to fly over and take photos. ;<$$Who should DuPont sue? X. But what if it cant find out=$who X is?> ?$$In this suit DuPont sued the people who took the photos,!@$claiming wrongful appropriation of its trade secret (63)."A$During the litigation the aerial photographers wouldnt#B$answer Qs about who X was. DuPont moved to compel them$C$to answer.%D&E $$Then what? [Do they have to answer? Depends upon whether DuPontstates a valid claim against them.....'G #(H#/$(c) Argue for defendant: DuPont has no valid claim against us, because...)I/;*J;G$$we didnt breach any confidential relationship+KGS$$,LS_$$we didnt do anything illegal-M_k.Nkw$(d) Ct applies Texas law, which had adopted Rest. 757 (see 64)/Ow0P$$ improper means is independent of the1Q$requirement of breach of confidenceJ2R 9R  $JܿS$$$cf. Unif. Act (2) (ii) (A)[Supp 34, (2)(ii)(A)]TU$(e) So what is improper means?VW$$independently illegal? [e.g., trespass?] XY $$$[see comment f, (65)][cf. Unif. Act 1(1)]Z  [#$$immoral? (66) \#/ ]/;$$inefficient to protect against? (66) ^;G _GS$(f) What if X didnt hire the Christophers but as independent entrepreneursthey took the photos and then shopped them around to DuPonts competitors? [Cancompetitor Y safely purchase the photos?]bSwcw$$Is competitor Y acquiring by improper means?de$$See Unif. Act 1(2)(i)fg$(g) What if competitor observes your product and deconstructs it, then buildsa copy? [see note on reverse engineering (67n.2)][also locksmith case Fanberg][Why is reverse engineering exempt?]jk$$[Is what the Christophers did just a method of viewingl$the competitors product?]mn$$$Trying to view a "process," which is harder thano$$viewing a "product" [see note 2 (67)pq+$$[So how "devious" can you be, as long as you don't commit a $tortsuch as trespass? (1) use information overheard in bar acrosss+C$the street from the plant? (2) follow trucks leaving the plant totCO$see where they come from to learn what they're supplying? (3)uO[$carefully read classified ads to see what employees are needed tov[g$deduce what company is doing? (4) get investigative reporter to do wgs$a story on it? (5) pretend you're an investigative reporter doing a!xs$story?]"y#z$$Problem 26 (68): Suppose Christophers could have${$"readily ascertained from a proper source"? [BTW, in this problem%|$does duPont have a c/a against the EPA for destroying its&}$trade secret?][see Monsanto (62)]'~(4. So much for skulduggery (Part I of "wrongfully acquired.") Now Part II: breachof duty/confidential relationship)*$(a) Duty of nondisclosure can be express (contractual). Get people to signNDA's before they see any of your confidential drawings, documents, etc. (See,e.g., (101).)+,'$(b) Under what circs will duty of nondisclosure be implied? Consider Smith v.Dravo (69)-'?.?K$Facts: Mr. Smith invented shipping containers. Some aspects were patentedand some were kept as trade secret. His business was just getting started when he6 W9 K $6unfortunately died. His estate wanted to sell the business to pay inheritancetaxes. K$Defendant (operator of a barge line) negotiated with Cowan, the estaterepresentative, about buying the business. Cowan sent detailed information; also,defendant's representatives traveled to Sturgeon Bay , Wisconsin, and viewed theplant. $Negotiations broke down when defendant refused to accept any of plaintiff'soffers. The day after the final negotiation, the defendant informed plaintiff'scustomer that it would supply shipping containers itself. It made them 4 inchesnarrower so they wouldn't interoperate with plaintiff's. It sold them to customerson lists disclosed by the plaintiff during the negotiations.   $Cowan didn't get defendant to sign any agreement promising not to discloseinformation before he disclosed everything to defendant.  3 3 ?$(c) Ct holds for plaintiffwhy? [(71) understood disclosure was forlimited purpose; trust][cf. Rest. 3d Unfair Comp. sec. 41 (73)]  ? W  W c$(d) Argue for defendants?   c o  o {$$Cowan didn't take reasonable precaution to protect this bec.  { $asking for NDA is cheap  $$Defendant didn't appropriate trade secret because it $made changes in the product [see (74 n. 6)]  $$No trade secret here in the first place? [see (72) notes 12]   5. Consider more generally methods of "proper" acquisition (that negate the 2delement of the c/a):  $(a) Holder does something to lose the the secret: e.g., publication ! ! !$$analogy in real P: abandonment; dedication to public!!#!#!/$(b) Holder does nothingcompetitor discovers it independently!/!;!;!G$$including "reverse engineering" (74)!G!S!S!_$$$what is reverse engineering? [have you reverse !_!k$$$engineered anything?] !k!w!!w!$$$no analogy in real P? [patents are more like real P in"!!$$that you own the idea no matter how someone else comes by it]#!!$!!6. Consider Chicago Lock v. Fanberg (75):%!!&!!$(a) Facts: Chicago Lock Co. (plaintiff) made tubular locks which wereespecially secure because keys are difficult to reproduce. In order to getduplicates when they needed them, customers hired locksmiths to pick the lock,decipher the tumbler configuration and grind a duplicate tubular key. Locksmithsrecorded the key code (i.e. the tumbler configuration) and the serial number of thelock when they had to do this, in case they were called upon to do it again. VictorFanberg (defendant) collected this info. from the various locksmiths and made itinto a manual which explained how to make duplicate keys for all the locks for which6 "9! $6any locksmith had done this, provided the serial number was known. He sold themanual for $49.95, and had sold 350 of them by the time of trial. Chicago Lock Co.did not grant permission for these activities.  !"S"S"_$Trial ct held: The key codes constituted a trade secret, and Fanberg acquiredthem through improper means, therefore liable for misappropriation of Chicago LockCo.'s trade secret"_"""$$What exactly did they do that was improper?""""$(b) 9th Circuit reverses:""""$$If Fanberg bought a bunch of locks himself, and ""$figured out the key codes and published them, this would not be ""$improper means. (77) [Explain?] "" ""$$But, did the individual locksmiths behave improperly ""$in transmitting the info. to Fanberg knowing he was going to collate it$and publish it? [And did Fanberg behave improperly by collating and$publishing?]"###+$$$Ct says (78) the locksmiths may have owed an implied$$duty to the customers not to disclose their key codes, but#+#C$$they do not owe an implied duty to the lock company#C#O#O#[$$$$Therefore defendant Fanberg didn't improperly#[#g$$$procure any improper activities by the locksmiths#g#s#s#$(c) 9th Circuit explains that reverse engineering is legal. If it weren't,trade secret would be more like patent monopoly. And that would be preempted byfederal patent law (79)####$$$why is it thought to be a good idea to have trade##$$secret weaker than patent in this way?####7. Consider problem 29 (80):####$(a) Is it legal to reverse engineer a product if the company doesn't knowthat's what you want it for and wouldn't have sold it to you if it knew? [onceproduct is sold on the market, anyone can reverse engineer]#$$$$(b) Can company get around this by licensing rather than selling, and makinglicensing (contract) conditional on promise that buyer will not disclose info. andwill not resell?$$? $?$K$$cf. (80n.2): can trade secret owner get user to contract!$K$W$not to reverse engineer?"$W$c#$c$o$(c) If info. is acquired "improperly" but then you add value for the public,does this excuse the tainted acquisition? [No; but why not?]$$o$%$$&$$'$$$$V($$ $|6$ $'  'VIP 97 Class No. 40$$$ǀ'  '00$$$Ӏ '  '01. Reverse engineering [cont'd]$$$$$% Chicago Lock v. Fanberg (75)[cont'd]:%%%%$(a) Facts: Chicago Lock Co. (plaintiff) made tubular locks which wereespecially secure because keys are difficult to reproduce. In order to getduplicates when they needed them, customers hired locksmiths to pick the lock,decipher the tumbler configuration and grind a duplicate tubular key. Locksmithsrecorded the key code (i.e. the tumbler configuration) and the serial number of thelock when they had to do this, in case they were called upon to do it again. VictorFanberg (defendant) collected this info. from the various locksmiths and made itinto a manual which explained how to make duplicate keys for all the locks for whichany locksmith had done this, provided the serial number was known. He sold themanual for $49.95, and had sold 350 of them by the time of trial. Chicago Lock Co.did not grant permission for these activities.   %%  %%$Trial ct held: The key codes constituted a trade secret, and Fanberg acquiredthem through improper means, therefore liable for misappropriation of Chicago LockCo.'s trade secret %% %%$$What exactly did they do that was improper? %% %%$(b) 9th Circuit reverses:%%%& $$If Fanberg bought a bunch of locks himself, and& &$figured out the key codes and published them, this would not be&&#$improper means. (77) [Explain?]&#&/&/&;$$But, did the individual locksmiths behave improperly&;&G$in transmitting the info. to Fanberg knowing he was going to collate it$and publish it? [And did Fanberg behave improperly by collating and$publishing?]&G&k&k&w$$$Ct says (78) the locksmiths may have owed an implied$$duty to the customers not to disclose their key codes, but &w&$$they do not owe an implied duty to the lock company!&&"&&$$$$Therefore defendant Fanberg didn't improperly#&&$$$procure any improper activities by the locksmiths$&&%&&$(c) 9th Circuit explains that reverse engineering is legal. If it weren't,trade secret would be more like patent monopoly. And that would be preempted byfederal patent law (79)(&&)&&$$$why is it thought to be a good idea to have trade*&'$$secret weaker than patent in this way? +''!,''2. Consider problem 29 (80):"-''+#.'+'7$(a) Is it legal to reverse engineer a product if the company doesn't knowthat's what you want it for and wouldn't have sold it to you if it knew? [onceproduct is sold on the market, anyone can reverse engineer]$1'7'[%2'['g$(b) Can company get around this by making buyer promise not to reverse6 'g93' $6engineer and disclose info. and not resell to someone who will?4'g'5''$$can't get promise not to resell (restraint on alienation)6''7''$$but, can you do it with licensing? [give buyer a license8''$to use your product with its info., rather than selling product,9''$and make license conditional on not reverse engineering it]:'';''$$cf. (80n.2): can trade secret owner get user to contract <''$not to reverse engineer? ["cts are split on this"] ='' >'($(c) If info. is acquired "improperly" but then you add value for the public,does this excuse the tainted acquisition? [No; but why not?] @(( A((+B(+(73. Go back to wrongful acquistion of trade secrets, breach of duty ofconfidentiality: the special case of departing employees (82)D(7(OE(O([ܖ Will it count as improper acquisition of trade secrets Jones leaves company A andgoes to work for company B, bring info. with him that was valuable to company A andnow will be valuable for its competitor?H([(I(($(a) Problem is this can range from taking 500 boxes of documents tomemorizing something on purpose to simply knowing it as a byproduct of one's workexperience....L((M(($$we want to prevent employees from stealing documentsN((O(($$we want to leave employees free to change jobs andP(($$practice their skills; we want to leave employees freeQ(($$to use the fruits of their learning and experienceR((S()$$$see, e.g., SI Handling (82) ["under PennsylvaniaT))$$$law and employee's general knowledge, skill,U))$$$and experience are not trade secrets"]V))'W)')3$$$this countervailing concern affects remedies asX)3)?$$well as liability [we don't want to enjoin people from Y)?)K$$working...]!Z)K)W"[)W)c$(b) Consider Informix v. Oracle: Who will win? [What questions would youwant to ask?]#])c){$^){)$$(1) Did the 11 engineers sign an agreement with Informix? What did itsay? [under contract to work for a period of time? under contract w/r tosecret information? under contract w/r to not working for competitors?] ["confidentiality agreement"#%b))Z.#$$(col. 3)]&c))'d))$$$What does employment agreement usually look like?(e)))f))$$$$confidentiality*g))$$$$invention assignment+h))$$$$noncompetition ,i)* -j* *$$$See example (101102) [come back to this: consider$$whether this is enforceable]J.l**/ *#9l*/ $Jܿm*?*K$$(2) What means did Oracle use to "lure away" the engineers?n*K*Wo*W*c$$(3) What information do the engineers have and how secret isp*c*o$it? [extended parallel server; Universal Server][research firm saysq*o*{$Informix is 1218 months ahead of the competition]r*{*s**$$$Will Informix want to give this information to thet**$$court?  u** v**$$(4) Could Informix argue that allowing the engineers to work forOracle will inevitably disclose their trade secrets, causing breach of theirconfidentiality agreements, therefore this should trump the $engineers'interest in working where they choose? z** {**$$$in general, no law against competitor hiring away |**$$employees (Diodes (85))}*+ ~+ +$$$But cf. PepsiCo v. Redmond (90) [upheld preliminary++#$$injunction preventing Gatorade/Snapple from employing+#+/$$former Pepsi manager][more often this argument is+/+;$$rejected]+;+G+G+S$$(5) What remedy will Informix ask for? [something designed+S+_$to prevent the employees from disclosing their trade secrets +_+k$see col. 3]+k+w+w+3. Now consider covenants not to compete. [Rather than just making employeespromise not to disclose trade secrets, you make them promise not to engage in anycompeting business]++++$(a) Problem is, are they enforceable? [If you work for Microsoft++once, can you be prevented from ever working for another software company anywherein the world for the rest of your life?] [If permitted, these will be limited intime and geographical scope (if relevant}++++$(b) Consider CTI v. Software Artisans (86):+++,$$$Facts: Hawkes signed agreement not to engage ,,$$in competing business for 12 months after he left!,,$$CTI. He and others left CTI and founded a new",,+$$competing company.#,+,7$,7,C$$$This was upheld under traditional "reasonableness"%,C,O$$test (867)[general rule...]&,O,[',[,g$$$Cf. New York (88): unenforceable unless needed to(,g,s$$prevent disclosure of trade secrets),s,*,,$$$Cf. California(88): unenforceable against employees+,,$$(but "reasonableness" test applies if ancillary to sale of,,,$$business)[So that's probably why Informix didn't make-,,$$their engineers sign them...].,,/,,4. Suppose employer did not make you sign either confidentiality or noncompetitionagreement. In the absence of agreement, are you free to work for competitor B usinginformation you picked upon the job at company A?J0,, ,߀9, $J$,-$(a) What factors will be relevant to deciding this question? ----$$Is the information actually secret? [Does absence of K show--+$lack of precautions to keep secret?]-+-7-7-C$$Is there an implied duty to keep secret?-C-O-O-[$$[How much will you be prevented from practicing your professionor trade?] -[-s -s-$(b) Consider Wexler v. Greenberg (93): -- --$$ Greenberg was chief chemist for Buckingham Wax Co. His job was toreverse engineer competitors products and to develop new formulas. Buckingham supplied products to Brite who marketed to users. Later Britehired Greenberg and he developed facility to make the stuff themselves usingformulas he developed when he worked for Buckingham. # --Z.#--$$Can Buckingham enjoin?----$$$[no trust or confidential relationship; merely-.$$his routine duties]....$$What could Buckingham have done to make this come out..'$differently?.'.3.3.?$$$[Make him sign NDA? covenant not to compete? make$$clear how much effort company put in...?][agreement stating.?.W$$that everything he does becomes P of the company?].W.c.c.o$$$.o.{5. What if Greenberg had signed employment contract in which he promised not to usein competitor's business anything he discovered while working at Buckingham?Consider covenants to assign inventions:.{...$(a) [Can employer claim that it owns everything that was in your thoughtsduring the time you worked for it?]....$$see (102) para 2 [note "trailer clause" (99)enforceable..$only if "reasonable"] ..!..$(b) [If not, can employer claim that it owns everything that you reduced towriting during the time you worked for it?]"./ #/ /$$ [If you invent something but don't write it down until the dayafter you quit, are you in the clear?]$///%///;$(c) [Only during working hours? Only related to company business?]&/;/G'/G/S$$see Cal. Labor Code sec. 2870 (98) ["freedom to create$$statutes"](/S/k)/k/w6. Consider common law rules for patentable inventions (97):*/w/+//$hired to invent: belongs to employer,//$J-// /9/ $J$inventions in employers shop: shop rights////$independent invention: belongs to employee////7. Review contract on (101): Is it enforceable?////8. Contracts to license the use of trade secrets:/0 0 0$(a) Big problem: licensee needs to see secret in order to buy, but once itsees, why should it buy? 00/ 0/0;$$at least, an argument to make enforcement of contractual NDA's verystrict 0;0S 0S0_$(b) If you contract to license a trade secret needed to manufacture yourproduct, and pay royalties, can you stop paying royalties once the info. is nolonger secret? 0_000$(c) Consider WarnerLambert (103)0000$$Facts: WarnerLambert licensed the secret formula for Listerine 75years ago. Judge interprets K as promising to pay royalties for as long as Warner  Lambert manufactured the product. In the meantime, the formula has become publicknowledge. WarnerLambert sues for declaratory judgment that it doesn't have to payanymore.0000$$$Argue for WarnerLambert: Successors of the00$$inventor no longer have any P rights. My competitors01$$don't have to pay, so they can produce more cheaply11$$against me.1111+$$$Argue for Lawrence successors: Freedom of K;1+17$$K doesn't depend on how long my P rights last [if we171C$$meant that, we could have said so]1C1O1O1[$$Result: Contract wins1[1g1g1s$$See notes 2 and 3 (107) [This rule is "controversial" and it1s1$raises the larger question to what extent actors can contract out of P11$rules] 11!11NEXT WEEK: 108168[trade secret remedies (108) [Litton; LambWeston]; Intro. topatents (121); patentable subject matter (136) Diamond v. Chakrabarty (136); FunkBros. (144); ParkeDavis (147); utility, Brenner, to 168]]" 11# 11$ 11V% 11 1߀(/ 1 $'  'VIP 97 Class No. 50121'  '00222 '  '02222+1. Contracts to license the use of trade secrets: [This is an ordinary contract,with a couple of wrinkles]2+2C2C2O$(a) Big problem: licensee needs to see secret in order to buy, but once itsees, why should it buy?2O2g2g2s$$not a problem with Listerine [you can see product w/o seeing$secret] but what about database [e.g., all cooks who have experience w/curlicue fries] 2s2 22$$at least, an argument to make enforcement of contractual NDA's verystrict 22 22$(b) If you contract to license a trade secret needed to manufacture yourproduct, and pay royalties, can you stop paying royalties once the info. is nolonger secret? !22"22$$of course, your contract can provide for this. But what#23$if it doesn't?$33%33$(c) Consider WarnerLambert (103)&33''3'33$$Facts: WarnerLambert licensed the secret formula for Listerine 75years ago. Judge interprets K as promising to pay royalties for as long as Warner  Lambert manufactured the product. In the meantime, the formula has become publicknowledge. WarnerLambert sues for declaratory judgment that it doesn't have to payanymore.,333o-3o3{$$$Argue for WarnerLambert: Successors of the.3{3$$inventor no longer have any P rights. My competitors/33$$don't have to pay, so they can produce more cheaply033$$against me.133233$$$Argue for Lawrence successors: Freedom of K;333$$K doesn't depend on how long my P rights last [if we433$$meant that, we could have said so]533633$$Result: Contract wins733 833$$See notes 2 and 3 (107) [This rule is "controversial" and it!934 $raises the larger question to what extent actors can contract out of P":4 4$rules][Recall previous discussion of employment contracts promising not touse any information even if it's no longer a trade secret]#<44/$=4/4;2. Remedy for misappropriation of Trade Secret: What are the possibilities?%>4;4G&?4G4S$(a) Plaintiff has traditional Prule entitlement [damages for past use, pluspermanent injunction against future use] 'A4S4k(B4k4w$(b) Plaintiff has a permanent liabilityrule entitlement [damages for pastuse plus compulsory license payments for future use])D4w4*E44$(c) Plaintiff has P rights (either Prule or Lrule) only until the info.6 49F4 $6actually ceases to be secret G44H44$$(1) until plaintiff ceases to keep it secret?I44J44$$ until someone else discovers/reverse engineers?K44L44$$(2) defendant can apply to dissolve the injunction?M45 N5 5$$ write injunction for only as long as ct thinks it would O55#$$reasonably take for others to discover the info.? P5#5/ Q5/5;$(d) What about kicker for extra deterrence? [don't change P rules into Lrules at will] e.g., treble or punitive damages? S5;5S T5S5_3. How will we measure damages for past use?U5_5kV5k5w$(a) disgorge defendant's excess profit [unjust enrichment]W5w5X55$ (b) pay for plaintiff's lost profit? [compensatory]Y55Z55$(c) amount equal to a reasonable royalty?[55\55$$how will ct figure this out? (110)]55^554. What remedy options are chosen by the UTSA? (1089); (Supp 35); What remedyoptions are chosen by the Rest.3d of Unfair Competition? (Supp 1617)`55a555. Consider Litton systems (110):b56c66$(a) Litton engineer testified that as a result of defendant's theft of itstrade secrets, it had lost various contracts and the value of its San Carlosoperation had declined significantly.f667g676C$(b) Law and economics scholar no. 1 (Rosenfield), for the plaintiff Litton,stressed deterrence: damages should exceed the greater of the victim's loss or thethief's expected gain, multiplied by a factor which reflects the probability ofdetection. k6C6sl6s6$$[On this theory, what would be wrong with limiting damages to thevictim's actual loss?] n66!o66$$[On this theory, what would be wrong with limiting damages"p66$to the defendant's actual unjust enrichment (gain due to theft)?]#q66$r66$(c) Law and economics scholar no. 2 (Teece), for the defendant Ssangyong,stressed administrability: damages should be equal to disgorging defendant's actualgain from the trade secret theft.%u66&v66$$[On this theory, what would be wrong with assessing punitive'w67$damages to achieve extra deterrence?](x77)y77$$[On this theory, what would be wrong with assessing damages $on thebasis of defendant's expected gain at the time of the theft?]*{773+|737?$(d) What did the judge decide? (see 113, last paragraph),}7?7K-~7K7W$(e) Question 3 (114): Does the UTSA permit Judge Walker to do this?J.7W7c 7W97c $Jܿ7s76. Injunctions (see LambWeston (114):7777$(a) Will injunctions be appropriate in departed employee cases?7777$$Depends. See, e.g., Baxter int'l v. Morris (118); recall77$Pepsico v. Redmond (9093) [unusual case]; what relief will77$be appropriate (if any) in Informix v. Oracle?77$$ 77 77$(b) How will length of injunction be determined? [one common method is "headstart" theory: enjoin defendant from using the stolen info. until such time asdefendant could have discovered it by proper means][Head Ski case (116)] 78 88$(c) Facts of LambWeston:  88'8'83$Plaintiff LambWeston invented a process and equipment for producing curlicuefries. It started working on the process in 1986 and was issued 2 patents on May22, 1990 [at which point the process and equipment ceased to be secret]. Beforethat, in January 1990, LambWeston employees allegedly gave copies of the patentapplication to defendant McCain, which allegedly built a prototype before thepatents issued in May.838{8{8$The court imposed an 8month injunction against McCain to make up for itsimproper head start. The injunction took effect March 27, 1991. McCain on appealsays ct abused its discretion because (1) didn't make findings about how long itwould have taken McCain to develop helical blade independently, (2) injunctionshould have ended on April 19, 1991 (rather than on [November 27, 1991]).8888$Held: Length of injunction was not abuse of discretion, because: 8888$Plaintiff says head start was 18 months, not 12, so if theft took88$place in April 1990, injunction should end October 19918889 $"Although the shape of the blade and the slicing process was public9 9$on May 22, the specifications, materials and manufacturing process99#$for making the blade were still trade secrets because they were not9#9/$included in the patent applications." (116)9/9;$$9;9G$$see note 2 (117)9G9S9S9_7. Intro. to patent.9_9k 9k9w$(a) Read (121128) as background; (I'm trying to get biotech appendixpromised in (121 n. 1).!9w9"99Start with overview of patent laws on (128); look at Patent Act (281)#99$99$$Sec. 101 Whoever invents or discovers...%99&99$$Sec. 271 Whoever without authority makes, uses, offers to sell,or sells...'99(99$$Sec. 154(2)Such grant shall be for a term [20 years from)99$date filed]*9:+::$(b) As casebook says (129), there are five basic requirements for6 :9:+ $6patentability:::;:;:G$$1. patentable subject matter [what things can and cannot be:G:S$$$propertized?]:S:_:_:k$$2. novelty [not anticipated]:k:w:w:$$3. utility [has to work]:: ::$$4. nonobviousness [has to be a leap forward] :: ::$$5. enablement [sufficient disclosure] :: ::$(c) The central part of a patent is what exactly you stake out P rights in(see p. 130): (because they're staked out in words instead of metes and bounds,there's an inherent vagueness)::::$$make claim as broad as possible? [a nonhuman mammal, rather thana mouse][means for support, rather than legs]:;$$$;;$$$but what if some previous patent covers some other;;+$$$nonhuman mammal?;+;7;7;C$$i.e., the trick is to make as broad as possible and still be;C;O$novel enough;O;[;[;g$(d) patent litigation has 2 parts;g;s;s;$$my device doesn't infringe;;;;$$$[claims (as interpreted) don't "read on" the "accused$$device"];;;;$$even if it does, your patent is invalid;;;;$$$[your patent doesn't meet all five requirements as above] ;;!;;$(e) cts hold patents invalid in a nontrivial number of cases (though see(128), CAFC is upholding them more than disparate cts did previously); moreover, ctsare not always in sync with the PTO";<#<<$$policy differences$<<'%<'<3$$PTO examiner my not have expertise or the benefit of high&<3$$(a) make claim as broad as possible? [see, e.g., "Transgenic$nonhuman mammals" (150)rather than a mouse][means for support, rather thanlegs] >>'$$$ >'>3$$$but what if some previous patent had covered some $othernonhuman mammal? >3>K>K>W$$(b) i.e., the trick is to make as broad as possible and still be>W>c$novel enough>c>o>o>{3. patent litigation has 2 parts>{>>>$$(a) my device doesn't infringe>>>>$$$[claims (as interpreted) don't "read on" the "accused$$$$device"]>>>>$$(b) even if it does, your patent is invalid >>!>>$$$[your patent doesn't meet all five requirements as above]">>#>>4. cts hold patents invalid in a nontrivial number of cases (though see (128), CAFCis upholding them more than disparate cts did previously); moreover, cts are notalways in sync with the PTO$>?#% ?#?/$$policy differences&!?/?;'"?;?G$$PTO examiner may not have expertise or the benefit of high(#?G?S$priced lawyers and experts)$?S?_*%?_?k$$$patents only get litigated when they turn out to be+&?k?w$$valuable,'?w?-(??5. Consider first element of patentability [subject matter];.)??/*??What types of things are patentable under the statute? Does the constitution limitwhat Congress can make patentable? [application to living things? computer6 ?9,? $6programs?]-??.??$(a) What does the Patent Act tell us about what is properly the subect ofpatent? [Read sec. 101 again together with sec. 100]0??$1?@ '  '$$$process [means process, art or method; includes a new02@ @@ <'  '0$$$use of a known process, machine, manufacture,03@@#@H'  '0$$$composition of matter, or material][or improvements4@#@/$$$on an existing process]5@/@; 6@;@G$$machine [or improvements on an existing machine] 7@G@S$$manufacture [or improvements on an existing manufacture] 8@S@_$$composition of matter [or improvements on an existing 9@_@k$$$composition of matter] :@k@w;@w@$$$Example of a new use of a known process? new<@@$$$use of a known machine? new use of a known=@@$$$manufacture? new use of a known composition of>@@$$$matter? new use of a known material??@@$$$$@@@A@@$$$Example of improvements on a process? machine?B@@$$$manufacture? composition of matter?C@@D@@$$$$Note: if you get a patent on improvements,E@@$$$$if the underlying process is patented, you still cant$$$use it without paying for it#G@AZ.#HAAIAA+$(b) Does the Constitution limit what Congress can make patentable? [topromote the progress of . . . useful arts]KA+ACLACAO$$1952 Committee reports said anything under the sunMAOA[$$that is made by man (138)NA[Ag OAgAs$(c) Traditional exclusion for natural principles (laws of nature) (138): why? [discovery of one can certainly promote the progress of useful arts in manycases]!RAsA"SAA$$manifestations of nature, free to all men and reserved exclusivelyto none#UAA$VAA$$does this deter investment in basic research?%WAA&XAA$$[includes abstract ideas, mathematical formulas: causes problems forwhat to do about computer programs...][later]'ZAA([AB$(d) Bioengineering: should living things be patentable? [as found in nature? as made by man?] Consider Diamond v. Chakrabarty (136))]BB*^BB'6. Diamond v. Chakrabarty (136):+_B'B3,`B3B?$(a) Chakrabarty (a microbiologist for G.E.) applied for patents relating tohis development of a genetically engineered bacterium which could help clean up oilspills. His claims were of 3 types (137):-cB?Bc.dBcBo$$for the method of producing the bacteria [process claim]J/eBoB{ Bo9eB{ $J$$fBB$$for combining the bacteria with a carrier material to floatgBB$$$on the waterhBBiBB$$for the bacteria themselves [product claim]jBBkBB$$Are any of these problematic? [only the bacteria themselves....explain][Consider carefully note 5 on p. 150][product claim; process claim; product  byprocess claim]nBBoBC$(b) How does Burger go about exploring the issue? pCC qCC$$his discovery is not natures handiwork but his rCC'$$$own; accordingly it is patentable (139) sC'C3 tC3C?$(c) Diamond is the Patent Examiner, not some wouldbeuC?CKinfringer. What arguments does the government put forward, and how does Burgeranswer them?wCKCcxCcCo$$genetic engineering was unforeseen when CongressyCoC{$$enacted sec. 101; including it should be left tozC{C$$Congress (141){CC|CC$$$[Patent Act is supposed to cover the}CC$$$unanticipated]~CCCC$$$[What is the relevance of Parker v. Flook citedCC$$on p. 141?]CCCC$$genetic engineering is dangerousCCCC$$$ if so, Congress should amend theCD $$$Act; once we look at the plain meaning, ourD D$$$job is done (142)DD# D#D/$$Congress didnt intend the Act to cover living!D/D;$$things [otherwise it wouldnt have had to enact"D;DG$$specific statutes to cover plants developed by#DGDS$$humans] (13940)$DSD_%D_Dk$$$[Did too?]&DkDw'DwD$(d) Decision was 54: Consider dissent (Brennan, Marshall, White,Powell)(142):(DD)DD$$Burger cant explain away that Congress thought*DD$$specific legislation was needed to get new plants+DD$$covered; moreover, bacteria were specifically,DD$$excluded from that legislation-DD.DD$$this extends the patent system (bec. Congress has/DD$$previously legislated in the belief that living organisms0DD$$arent covered); shouldnt do this, esp. where uniquely1DE$$implicates matters of public concern (144)2EE3EE$(e) What exactly are the matters of public concern?4EE+J5E+E7 E+9E7 $J$$life is gift of God, not an article of manufactureEGESESE_$$ note plant patents can monopolize food productsE_EkEkEw$$impact on the farm animal gene poolEwEEE$$cruelty to animalsEEEE7. Funk Bros. Seed Co. (144): Was earlier ct less willing to underwrite broadscope of patent? EE EE$(a) Plants fix nitrogen from the air using bacteria of the genus Rhizobiumwhich infect the roots of the plant. Different plants use different bacteria. Previously, people had manufactured and sold bacteria cultured in the laboratorythat were specific to particular plants (145). Mixed cultures had provedunsatisfactory because the different bacteria species were mutually inhibitory. [Why were people trying to produce a mixed culture?] Then Bond discovered thatcertain strains of the different species of bacteria would not be mutuallyinhibitory but could coexist. "Thus he provided a mixed culture of Rhizobiacapable of inoculating the seeds of plants belonging to several crossinoculationgroups." [See one of the claims in note 1, p. 144] EFC FCFODistrict ct held the product claims invalid for want of invention and dismissed thecomplaint. Ct of appeals held the product claims were valid and infringed. FOFgFgFsSupreme Court says:FsFFF$These qualities are the work of nature... (145)FFFF$[Explain Frankfurter concurrence (146): Apparently Bond's claims were sobroad as to cover anyone who combined any mutually compatible strains. Frankfurterthought that reached too far (would cover the idea of alloying metals, for example,and not just particular alloys); instead, he thought that particular strains shouldbe identified and that a new and useful property result from their combination.]FFFF8. Also consider ParkeDavis (147): Was L. Hand concerned more with practicalcommercial viability than with distinction between nature and man's handiwork?FGGG$(a) Takamine patented a pure extract from suprarenal glands of animals, whichParkeDavis (assignee of the patents), called adrenalin. [See the claim in footnoteon p. 148.] A competing company marketed a competing product. L. Hand holds thepatent on the product valid.GG?G?GK$$It's not a claim for a substance that has merely beenGKGW$extracted but otherwise unchanged, bec.GWGcGcGo$$$it doesn't have a saltGoG{G{G$$$the claim is broader, covering any product with theseGG$$characteristics, however it's arrived at [reconsider note 5GG$$on 150: should this claim be allowed?] GG!GG$$$$[or limit this type of patent to a"GG$$$$"productbyprocess" claim?]#GG$GG$$"But, even if it were merely an extracted product without%GG$change, there is no rule that such products are not patentable" (148)J&GG G9G $JܿHH$$$"it became for every practical purpose a new thingHH$$$commercially and therapeutically" (148)HH'H'H3$$$what do you think of the tree bark hypo (149 n. 1)? H3H?H?HK$(b) See note 6 (151): A new amendment bans patents on medical and surgicalprocedures. Why? [Is this different from ParkeDavis patenting adrenalin?]HKHcHcHo8. "Abstract Ideas" (151): [not the idea itself, but a device to make an ideapractically useful] HoH HH$(a) O'Reilly v. Morse (151): Morse wasn't allowed to patent electro  magnetism; but he was allowed to patent the process of using it to telegraph HH HH$(b) The Telephone Cases (152): Alexander Graham Bell was allowed to patentthe telephone but not all telephonic uses of electricity HHHH$(c) The Edata patent?HH$HH'  '$$(d) Mathematical formulas? [e=mc 2 ]0HHH'  '0HI $(e) Computer programs?I III#9. "Business Methods" (1534)I#I/I/I;$(a) Note Judge Newman (154n.1)I;IGIGIS$(b) [Computer software will change this rule?]ISI_I_Ik10. Take a look at problem 33 (156).IkIwIwINEXT WEEK: utility 157168; novelty and statutory bars 168193; nonobviousness 193  206...IIIIVII I$I $'  'VIP 97 Class No. 70IIIÀ'  '00IIIπ '  '0II1. Patent life forms (Diamond v. Chakrabarty) [cont'd]IIII(a) Decision was 54: Consider dissent (Brennan, Marshall, White, Powell)(142):IJ J J$$Burger cant explain away that Congress thoughtJJ#$$specific legislation was needed to get new plants J#J/$$covered; moreover, bacteria were specifically J/J;$$excluded from that legislation J;JG JGJS$$this extends the patent system (bec. Congress has JSJ_$$previously legislated in the belief that living organisms J_Jk$$arent covered); shouldnt do this, esp. where uniquely JkJw$$implicates matters of public concern (144) JwJ JJ(b) What exactly are the matters of public concern? JJJJ$$life is gift of God, not an article of manufactureJJJJ$$ note plant patents can monopolize food productsJJJJ$$impact on the farm animal gene poolJJJJ$$cruelty to animalsJJJK2. "Abstract Ideas" (151): [not the idea itself, but a device to make an ideapractically useful]KKKK+$(a) O'Reilly v. Morse (151): Morse wasn't allowed to patent electro  magnetism; but he was allowed to patent the process of using it to telegraphK+KCKCKO$(b) The Telephone Cases (152): Alexander Graham Bell was allowed to patentthe telephone but not all telephonic uses of electricity KOKg!KgKs$(c) The Online Resources patent?" KsK$#!KK'  '$$(d) Mathematical formulas? [e=mc 2 ]0$"KKK'  '0%#KK$(e) Computer programs?&$KK'%KK3. "Business Methods" (1534)(&KK)'KK$(a) Note Judge Newman (154n.1)*(KK+)KK$(b) [Computer software will change this rule?],*KK-+KL.,LL4. Utility ["new and useful" (sec. 101)]/-LL0.LL'$(a) Note on different types of utility (163)1/L'L320L3L?$$general (163)31L?LK42LKLW$$specific (164)53LWLcJ64LcLo Lc94Lo $J$$moral (1645)(gambling; spotted tobacco case; drugs and medicaldevices; radar detector (Whistler Corp. 165)6LL7LL$(b) problem of when pharmaceuticals are useful (162 n. 4)8LL9LL$(c) problem of when chemical process patents are usefulconsider Brenner v.Manson (157);LL<LL$$Facts: Manson applied for a patent on a process that produced aprticular chemical compound. The patent office denied the patent and the patentoffice Board of Appels agreed. The court reversed, however, because it believedthat it was enough for the process to actually produce the product it was claimed toproduce, so long as the product was not deterimental (158).ALMBMM'$$That is not the test of utility, says Fortas. What possibilities arethere? DM'M? EM?MK$$$process is useful if it really does produce the product FMKMW$$it is supposed to, even if we don't have any use for the product GMWMc$$right now [as ct below thought] HMcMoIMoM{$$$process if useful if it really does produce the product,JM{M$$and also the product is currently useful for research KMM$$$$LMM$$$$i.e., scientific laboratories will buy it?MMMNMM$$$process is useful if it really does produce the product,OMM$$and also the product is currently useful in aspects ofPMM$$ordinary life other than researchQMMRMM$$What does the S.Ct. hold? (159160)SMM$$$TMM$$$$Rationale? ["A patent is not a hunting license.."]UMN VN N$$(d) Is Brenner ct wrong to hold that utility for further researchshould not count as utility? [consider problem 35 (167)XNN/YN/N;ZN;NG5 Novelty ["new and useful" (sec. 101)]; [implementation in sec. 102][NGNS \NSN_6. Overview of sec. 102 (168):!]N_Nk"^NkNw$(a) The patent bargain is that in return for a monopoly [on breathroughinventions that wouldnt have been produced otherwise] the inventor must give it tothe public domain (the store of knowledge), (1) by disclosing it in the patent, soothers can use if they pay, and others can build on it, and (2) can use it for freeat the end of the term.#cNwN$dNN$(b) The bargain gives rise to several separate issues: %eNN&fNN$$(1)Does the relevant public already know the exact process,'gNN$etc., at the time the claimed invention is made? [This is called(hNN$anticipation])iNN$$*jNO$$$Which parts of the statute are directed at this?+kOO,lOO$$$$102(a): prior to date of invention, it was (i)6 O9m O $6$$$known or used by others in this country; or (ii)$$$described in a printed publication in any country; or$$$(iii) patented in any countrypOO_qO_Ok$$$$102(e): prior to date of invention, it wasrOkOw$$$(iv) described in a pending application, whichsOwO$$$was later grantedtOO$$$$$uOO$$$$vOO$$(2)Does the relevant public already have enough informationwOO$so that the claimed invention is obvious at the time it is made? xOO yOO$$$Which parts of the statute are directed at this? zOO {OO$$$$103 [to be considered later]  |OO}OO$$(3)Who is the relevant public? [to be considered later]~OPPP$(b) In addition, our system gives patents to the first to invent, rather thanthe first to patent (disclose). [sec. 102(g)] This system is risky for the publicdomain, because it encourages people to keep their inventions secret as long aspossible. PPCPCPO$$(1)Explain: Inventor A invents something important but $keepsit secret. When competitor B later invents the same $thing, A can contest thepatent, and A would win, because first $to invent. [Might be economicallyrational to let someonePOP$$else see whether its commercially viable and then come outPP$$of the woodwork and claim the patent!]PPPP$$(2)Which parts of the statute are directed at this problem?PPPP$$$102(b): you cant get a patent if your application isPP$$dated more than one year after (i) patented in any country;PP$$(ii) described in a printed publication in any country;PP$$(iii) in public use in this country; (iv) on sale in this country;PPPP$$$102(d): cant get a patent in U.S. if your applicationPQ$$is dated more than one year after your application in aQQ$$foreign country QQ!QQ'$$$102(g): cant get a patent if you suppress or conceal"Q'Q3$$your invention#Q3Q?$Q?QK%QKQW7. Now focus on sec. 102(a) [before the applicant's date of "invention," thedevice was known or used in this country, or patented or described in a printedpublication anywhere]&QWQ{'Q{Q$(a) Consider Rosaire (169): What counts as being known?(QQ)QQ$$$Facts: Rosaire and Horvitz got two patents on method ofprospecting for oil (Horvitz interest assigned to Rosaire). The method involvedanalyzing gases for emanations from nearby hydrocarbon deposits. They claimedthey invented this process in $1936. But, "appellee contends that Teplitz andhis coworkers [who worked for Gulf, not appellee] knew and extensively used inthe field the same alleged inventions before any date asserted by6 Qۀ9!!Q $6$Rosaire"(170)QRRR$$$What issues? (1) What was the date of activities ofRR$$Teplitz and coworkers? (2) Does what Teplitz and coworkersRR'$$did amount to being"known" for purposes of sec. 102(a)?R'R3R3R?$$$$[See finding of fact (170)]R?RKRKRW$$$What about the fact that Teplitz invented this first and$$later applied for a patent in 1939 (170)? Should Teplitz get the$$patent instead of Rosaire? [see below; Griffith] RWR{ R{R$$$What about appellant's claim that Teplitz's activities RR$$were merely an experiment?[see Picard (1723 n. 4) RR$$also RRRR$$$What about the fact that appellee (National Lead Co.)$$gets to infringe someone's patent and then defend by claiming$$that actually someone else had it before the patentee?RRRR$$$What about the fact that Rosaire and Horvitz couldn't$$have known what Gulf employees were doing?RRRS $ S SSS#$(b) Summary: What counts as being known?S#S/$S/S;$$$public (not secret)S;SGSGSS$$$$ any commercial useSSS_S_Sk$$$$ not an abandoned experimentSkSwSwS$$$intentionally produced (not accidental) (note 1734)SSSS$$$published [What counts as printed publication? SeeSS$$$$In re Hall] SS!SS7. Statutory bars [didn't file soon enough (time clock); or, someone else inventedfirst even if you filed first (priority)]"SS#SS$(a) Read sec. 102(b) $SS%SS$(b) What counts as printed publication?&ST'TT$$Consider Hall (175)(TT)TT+$$$Facts: Hall wanted to patent a chemical compound. [What is areissue application? see sec. 251]. Hall's effective filing date is February27, 1979. It turns out that a German doctoral dissertation anticipated thisproduct; the degree was awarded on November 2, 1977. Therefore, if the Germandissertation counts as a printed publication, Hall's application is too lateunder 102(b).*T+Ts+TsT$$$$ Two issues: ,TT-TT$$$$(1) Can a dissertation in German count as a printed6 T9""T $6$$$publication to bar a U.S. patent?TTTT$$$$$Yes, if made available to the publicTTTT$$$$(2) Then, what date was this dissertation madeTT$$$available to the public?TTTU$$$$$Date it was put into the main library of theUU$$$$$University UU UU+$$$$$See Affidavit of Dr. Will (1756) U+U7 U7UC$$$$What date would Hall have had to have his$$$application filed by? UCU[U[Ug$$Note 3 (177): publication = available to at least one memberUgUs$of the general public; with journals this means receipt by at leastUsU$one subscriber (thus, if you submit a manuscript by mistke you canUU$get it back before it's published)UUUU$$$See also, DuPont v. Cetus (grant proposal not a$$publication)UUUU$(c) Consider Problem 37 (177)UUUU)$VUU U߀,##U $'  'V,IP 97 Class No. 80UVU'  '00VVV '  '0VV1 Now focus onsec. 102(a) [before the applicant's date of "invention," thedevice was known or used in this country, or patented or described in a printedpublication anywhere]VVCVCVO$(a) Consider Rosaire (169): What counts as being known?VOV[V[Vg$$$Facts: Rosaire and Horvitz got two patents on method ofprospecting for oil (Horvitz interest assigned to Rosaire). The method involvedanalyzing gases for emanations from nearby hydrocarbon deposits. They claimedthey invented this process in $1936. But, "appellee contends that Teplitz andhis coworkers [who worked for Gulf, not appellee] knew and extensively used inthe field the same alleged inventions before any date asserted by$Rosaire"(170) VgV  VV$$$What issues? (1) What was the date of activities of  VV$$Teplitz and coworkers? (2) Does what Teplitz and coworkers  VV$$did amount to being"known" for purposes of sec. 102(a)?  VV VV$$$$[See finding of fact (170)]VWWW$$$What about the fact that Teplitz invented this first and$$later applied for a patent in 1939 (170)? Should Teplitz get the$$patent instead of Rosaire? [see below; Griffith]WW3W3W?$$$What about appellant's claim that Teplitz's activitiesW?WK$$were merely an experiment?[see Picard (1723 n. 4)WKWW$$alsoWWWcWcWo$$$What about the fact that appellee (National Lead Co.)$$gets to infringe someone's patent and then defend by claiming$$that actually someone else had it before the patentee?WoWWW$$$$Compare with real property ejectment suits;WW$$$trespasser doesn't get to set up invalidity of possessor'sWW$$$title why the difference?WW WW$$$$$$no disorderly scrambles?!WW$$$$$$public domain?"WW#WW$$$What about the fact that Rosaire and Horvitz couldn't$$have known what Gulf employees were doing?%WX  &X X$ !'XX#"(X#X/$(b) Summary: What counts as being known?#)X/X;$$*X;XG$$$public (not secret)%+XGXS&,XSX_$$$$ any commercial use'-X_Xk(.XkXw$$$$ not an abandoned experiment)/XwX*0XX$$$intentionally produced (not accidental) (note 1734)+1XXJ,2XX X92$$X $J$$$published [What counts as printed publication? See3XX$$$$In re Hall]4XX5XX2. Statutory bars [didn't file soon enough (time clock); or, someone else inventedfirst even if you filed first (priority)]7XX8XX$(a) Read sec. 102(b) 9XY :Y Y$(b) What counts as printed publication? [similar to sec. 102(a)];YY# <Y#Y/$$Consider Hall (175) =Y/Y; >Y;YG$$$Facts: Hall wanted to patent a chemical compound. [What is areissue application? see sec. 251]. Hall's effective filing date is February27, 1979. It turns out that a German doctoral dissertation anticipated thisproduct; the degree was awarded on November 2, 1977. Therefore, if the Germandissertation counts as a printed publication, Hall's application is too lateunder 102(b). DYGY EYY$$$$ Two issues: FYYGYY$$$$(1) Can a dissertation in German count as a printed$$$publication to bar a U.S. patent?IYYJYY$$$$$Yes, if made available to the publicKYYLYY$$$$(2) Then, what date was this dissertation madeMYY$$$available to the public?NYZOZZ$$$$$Date it was put into the main library of thePZZ$$$$$UniversityQZZ+RZ+Z7$$$$$See Affidavit of Dr. Will (1756)SZ7ZCTZCZO$$$$What date would Hall have had to have his$$$application filed by? [November (?) 1978]VZOZgWZgZs$(c) Note 3 (177): publication = available to at least one memberXZsZ$of the general public; with journals this means receipt by at leastYZZ$one subscriber (thus, if you submit a manuscript by mistke you can ZZZ$get it back before it's published)![ZZ"\ZZ$$$See also, DuPont v. Cetus (grant proposal not a$$publication)#^ZZ$_ZZ$(d) Consider Problem 37 (177)%`ZZ&aZZ'bZZ3. What counts as known or used (under sec. 102(b)? [similar to sec. 102(a)](cZ[)d[[$(a) Egbert v. Lippmann (178)*e[[+f[['$$Note that the predecessor to 102(b) said "in public use for morethan 2 years with the consent and allowance of the inventor" (179),h['[?-i[?[K$$Facts: Barnes invented a better corset spring and his girl friend.j[K[W$(later his wife) used it, along with a friend of hers, starting in 1855;6 [W9k%%[W $6$he didn't apply for a patent until 1866. "In the meantime the inventionhad found its way into general, almost universal, use."m[W[n[[$$Ct says this is "public" and a bar: why?o[[p[[$$$[giving to someone else with no restrictions (18081),q[[$$even if only to one person]r[[s[[$(b) NB note 3 (182) Egbert not read broadly; but even a single sale will bea bar ["on sale"]u[[ v[[$$$Does this also apply to an offer to sell? [Yes] w[\ x\\$ (c) experimental use exception (see City of Elizabeth (183) y\\ z\\'$$Invented of more durable wooden pavement had it laid on{\'\3$public street, where people and horses walked on it for 6 years. Is thispublic use? }\3\K~\K\W$$$No, because experimental use doesn't count [and how\W\c$$about the length of time? suitable for the experiment see\c\o$$(185)] \o\{\{\$(d) Answer questions 1 and 2 on p. 187\\\\4. Priority (187) (sec. 102(g))\\\\$(a) Under what circumstances can someone who files an application first stillnot get the patent? [Generally, first to invent wins]\\\\$$How does this work? [after someone files an application,\\$or after the patent is issued, someone claiming to be first to\\$invent files an application, and the PTO declares an\\$interference][see sec. 135]\] ] ]$(b) When has someone invented? [reduction to practice] ]]#!]#]/$$What is reduction to practice? [making a workable prototype]"]/];#];]G$(c ) So, is it possible for A to conceive first, B to conceive second,$]G]S$but B reduces to practice first and counts as first to invent, B gets the$patent? [even if A is first to file?]%]S]k&]k]w$$$Yes. But only if A isn't diligent enough between']w]$$conception and reduction to practice [second sentence of(]]$$sec. 102(g)])]]*]]$(d)What about bad incentive to keep invention secret until somebody elsetries to exploit? +]]$$$,]]$$second inventor can win if 1st kept invention-]]$$$secret [1st sentence of sec. 102(g)].]]/]]$$second inventor can also win if 1st "abandoned"0]]$1]^$(e) Consider Griffith v. Kanamaru (188)2^^J3^^ ^9&&^ $J$$$Griffith (for Cornell U.) and Kanamaru (for a Japanese$chemical firm) both invented an aminocarnitine compound useful in $thetreatment of diabetes. Kanamaru got the patent and Griffith's later applicationfor the same thing caused an interference.^/^_^_^k$$$Who was first to reduce to practice?^k^w^w^$$$$Griffith = January 11, 1984^^$$$$Kanamaru = [November 17, 1982 he has^^$$$$$to go by filing date; read note 2 on p. 191]^^^^$$$$$[not true anymore; see note on GATT/TRIPS ^^$$$$$$(1923) ^^ ^^$$$So, Griffith in order to win would have to come ^^$$within the exception in 102(b)? [1st to conceive AND diligent ^^$$in reduction to practice]^^^_$$$$Was Griffith the first to conceive? ____$$$$$When didhe conceive? [June 30, 1981] $$$$$When did Kanamaru conceive? [again, has to$$$$$go by filing date: November 17, 1982]__C_C_O$$$$Was Griffith diligent enough under 102(g)?_O_[_[_g$$$$$$following Univ. policy of waiting for_g_s$$$$$$$$outside funding_s_$$$$$$waiting for a graduate student____$(e) Answer question 1 on p. 191____$$$Griffith would win if he had reduced to practice on __$$11/16/82 [even though Kanamaru filed first]__$$$Does the diligence of the first to reduce to practice__$$matter? [well, if he's *really* not diligent, perhaps could__$$claim he "abandoned"] __!__$(f) Read Note 3: Who would have won under first to file rule?"_`#``$(g) Read Note 4: What happens to Griffith after Kanamaru wins?$``%``'&`'`35. Nonobviousness [how does it differ from novelty?]'`3`?(`?`K$(a) Read sec. 103(a))`K`W*`W`c$$[Note 103(b) is a 1996 amendment giving special solicitude to$biotech processessee (206n.3)]+`c`{,`{`$(b) The S. Ct. explained and interpreted the nonobviousness requirement inGraham v. John Deere Co. (193 )-``.``$ Facts: Graham (a plow manufacturer) holds a patent on a spring clampwhich permits plow shanks to be pushed upward when they hit obstructions in thesoil. He patented one version in 1950 (the 811 patent) and then another version in1953 (the 798 patent). The later one changes the position of the shank and the6 `π9''` $6hinge plate so that the shank can flex more and this makes the plow work better. The PTO first rejected this as not being distinguished from his earlier patent(204), but then allowed it after he substituted 2 new claims.`a$aa$Graham sues competitors (John Deere et al.) for using the device covered bythe 798 patent. They respond that the patent is invalid; specifically that thesubject matter as a whole would have been obvious at the time the invention was madeto a person having ordinary skill in the art under sec. 103. S.Ct. gets the casebecause two circuits reached different decisions on same patent (194).aaWaWac$(c) Why do patents have to meet a nonobviousness test? Is this testconstitutionally required? [Yes]aca{a{a$$(194): innovation; advancement; and things which addaa$to the sum of useful knowledgeaa aa$$(196): not creators natural right, but benefit to society; aa$high standard for patentability aa aa$(d) Previous to the 1952 Act the courts used invention aarather than nonobviousnessnessaaaa$$Hotchkiss (1978) [inventor vs. skilful mechanic]aaab $$Cuno (199) [flash of creative genius][see last sentence of 103]b bbb#$(d) Did codification as nonobviousness lower the threshold of patentability;or was it just an attempt to use less misleading words to accomplish the samething? (194, 200)b#bGbGbS$(e) How will court go about determining nonobviousness?bSb_b_bk$$(199) scope and content of the prior art; differences betweenbkbw$the prior art and the claims at issue; level of ordinary skill in thepertinent art#bwbZ.#bb$$(199): secondary considerations: commercial success; failurebb$of others; satisfaction of longfelt demandbbbb$$$NB (214) [later]bbbb$[(f) Question of law or question of fact? (199)] bb!bb$(g) How applied to this case?" bb# bc$$what was scope and content of the prior art? (204)$ cc% cc$$what were the differences between the prior art and the& cc+$$claims at issue? (204)'c+c7(c7cC$$what was the level of ordinary skill in the pertinent art?)cCcO$$$(205)*cOc[+c[cg$(h) What is the role of prosecution history ("file wrapper") in this case?,cgcs-cscNEXT: nonobviousness [cont'd]to 216; enablement to 228; infringementliteral to 241; doctrine of equivalents, etc. to 264J.cc c9((c $Jܿcc$Vcc c ))c $'  'VIP 97 Class No. 90cccπ'  '00cccۀ '  '0cc1. Nonobviousness [how does it differ from novelty?]cccd $(a) Read sec. 103(a)d ddd#$(b) The S. Ct. explained and interpreted the nonobviousness requirement inGraham v. John Deere Co. (193 )!d#d; "d;dG$ Facts: Graham (a plow manufacturer) holds a patent on a spring clampwhich permits plow shanks to be pushed upward when they hit obstructions in thesoil. He patented one version in 1950 (the 811 patent) and then another version in1953 (the 798 patent). The later one changes the position of the shank and thehinge plate so that the shank can flex more and this makes the plow work better. The PTO first rejected this as not being distinguished from his earlier patent(204), but then allowed it after he substituted 2 new claims. )dGd$ *dd$Graham sues competitors (John Deere et al.) for using the device covered bythe 798 patent. They respond that the patent is invalid; specifically that thesubject matter as a whole would have been obvious at the time the invention was madeto a person having ordinary skill in the art under sec. 103. S.Ct. gets the casebecause two circuits reached different decisions on same patent (194). /dd 0dd$(c) Why do patents have to meet a nonobviousness test? Is this testconstitutionally required? [Yes]2de3ee$$(194): innovation; advancement; and things which add4ee$to the sum of useful knowledge5ee+6e+e7$$(196): not creators natural right, but benefit to society;7e7eC$high standard for patentability8eCeO9eOe[$(d) Previous to the 1952 Act the courts used invention:e[egrather than nonobviousnessness;eges<ese$$Hotchkiss (1978) [inventor vs. skilful mechanic]=ee>ee$$Cuno (199) [flash of creative genius][see last sentence of 103]?ee@ee$(d) Did codification as nonobviousness lower the threshold of patentability;or was it just an attempt to use less misleading words to accomplish the samething? (194, 200)CeeDee$(e) How will court go about determining nonobviousness?Eee Fee$$(199) scope and content of the prior art; differences between!Gef$the prior art and the claims at issue; level of ordinary skill in thepertinent art#"IffZ.##Jff'$$(199): secondary considerations: commercial success; failure$Kf'f3$of others; satisfaction of longfelt demand%Lf3f?&Mf?fK$$$NB (214) [later]'NfKfW(OfWfc$[(f) Question of law or question of fact? (199)])PfcfoJ*Qfof{ fo9Q**f{ $J$(g) How applied to this case?RffSff$$what was scope and content of the prior art? (204)TffUff$$what were the differences between the prior art and theVff$$claims at issue? (204)WffXff$$what was the level of ordinary skill in the pertinent art?Yff$$$(205) Zff [fg$(h) What is the role of prosecution history ("file wrapper") in this case?{(2056)] ]gg ^gg' _g'g32. One way nonobvious differs from novelty is that to "anticipate," "a single priorart reference must disclose every element of what the patenteee claims as hisinvention," (207), whereas something can be obvious even if you would have to lookat different references to figure it out (if it would be obvious to look in thesedifferent places and put the ideas together.dg3goegog{Consider In re Vaeck (207):fg{gggg$(a) Patent examiner rejected the patent, and the PTO's appeals board affirmedthe rejected; but ct here reverses the rejection. [I.e., PTO says the claimedinvention would have been obvious and ct says no it wouldn't.]jggkgg$(b) What was the claimed invention?lggmgg$$[a hybrid gene that allowed manufacture of protein that killed$insects expressed in a cyanobacterium (bluegreen algae) that floated on topof water so insects would eat it][see bottom of (208)]pggqgh $(c) Why did PTO think it would have been obvious to anyone skilled in theart? [What are "references"?]sh h#th#h/$$Dzelzkalns discloses a chimeric gene capable of being highly$expressed in a cyanobacterium [but not with the insecticidal protein]vh/hGwhGhS$$Sekar I, Sekar II, and Ganescan teach genes encoding the insecticidalprotein and the advantages of expressing such genes in hosts from anotherspecies [but not the cyanobacterium]zhShw{hwh$(d) Why did the judge think it wasn't obvious?|hh}hh$$obviousness is a legal question; standard of review is ~hh$clearly erroneous (209)!hh"hh$$2 factors to consider:#hh$hh$$$whether the prior art would suggest that the procedure/%hh$$device be tried&hh'hh$$$whether the prior art would also have revealed . ..(hi$$a reasonable expectation of success. [Why this factor??])ii*ii$(e) What else would the PTO have needed to win on obviousness?+ii+J,i+i7 i+9++i7 $J$$i. [one of the references should hint at what can be done; e.g., inO'Farrell, a prior reference mentioned preliminary evidence that its method could dowhat the later applicant claimed (211); so, in the case at bar, one of thereferences should have suggested that cyanobacteria would be attractive hosts forexpressing unrelated foreign genes, but, instead, the relevant prior art onlyindicated that cyanobacteria are attractice hosts for foriegn genes involved inphotosynthesis (210)]iGiii$$$Will it work if the suggestion is only implicit? (211 n. 1)iiii$$ii. [What about the reasonable expectation of success factor?]iiii$$$See (212 n. 2; In re Bell) ["undue experimentation"$implies nonobviousness]iiii3. Consider problem 39 (213) ij jj4. "Objective evidence"/ "Secondary considerations" (214) jj jj+$(a) Secondary considerations such as commercial success, longfelt need,failure of others, copying, and unexpected results may tip the scale in favor ofpatentability (conclusion of nonobviousness). j+jOjOj[$$How does the reasoning go? [If there was so much demandj[jg$for this, others would definitely have made it if they could; commercialsuccess shows the level of demand]jgjjj$(b) But this reasoning is thought to be problematic. Why?jjjj$$Commercial success need not be due to the innovationjj$$(215)jjjj$$Merges says failure of others is less problematic forjj$nonobviousness (216); explain...jjjj$$$$What about longfelt need but no evidencejj$$$that others tried and failed?jkkk5. Enablement [Adequate Description/Disclosure][5th element of patentability]kkkk'$(a) Read sec. 112k'k3 k3k?$$3 requirements (223 n. 1): written description; clear claim;!k?kK$enablement"kKkW$#kWkc$(b) The purpose is twofold(217):$kcko%kok{$$prove to the world that the applicant was in fact in possessionof the invention at the time of the application [otherwise someone else might bethe first inventor] [Fiers v. Revel (217)]&k{k'kk$$enable those skilled in the relevant art to make and use the$invention(kk)kk$(c) The invention must be described well enough that one of ordinary skill inthe art can make and use the invention*kkJ+kk k9,,k $J$$if one skilled in the art has to use "undue experimentation,"ll$then it is not properly disclosed [see (227 n. 3)]llll'$$$this means applicant won't get the patentl'l3l3l?$$$recall that if prior art references would require "unduel?lK$$experimentation" to discover the applicant's device/process,lKlW$$then the applicant will get the patentlWlc lclo$$can these conflict? [yes, if applicant needs to argue in patent lol{$$$no. 1 that prior art would require undue experimentation l{l$$$to one skilled in the art, then, in patent no. 2, disclosing ll$$$in same way as prior art did wouldn't be good enough ll$$$to get the patent .... see (226 n. 1)llll$$who is the one who must be enabled? [see (228 n. 5)]llll$(d) The "best mode" of carrying out the invention must be disclosed (228 n. 6)[What is the rationale for this requirement?] llll6. Broad claims often run into enablement difficulties. [I.e., you may claimtransgenic nonhuman mammal, but your specification only tells how to make a mouse]lm m m$(a) How will this come up? [you sue someone who has made a catmm#and he responds that your specifications don't enable the cat so your patent isinvalid]m#m;m;mG$(b) E.g., consider the incandescent lamp case (217):mGmSmSm_$Facts: The Sawyer and Man patent claimed "incandescing conductor for anelectric lamp, of carbonized fibrous or textile material." (see claims (218). Theyhad actually used carbonized paper. Thomas Edison found that carbonized bamboo of aparticular species worked better. Is Edison infringing the Sawyer and Man patent?m_mmm$$Does the Edison lamp literally infringe claim 1? [yes, carbonizedbamboo is carbonized fibrous material]mmmm$$What defenses does Edison have?mm mm$$$[novelty, utility, fraud (217)]!mm"mm$$$enablement: the description of the device in the patent#mm$$application doesn't enable one, without undue experimentation,$mn$$to arrive at the particular species of bamboo that works best%nn$$[read (220, 221)]&nn'nn+$Edison wins because claims 1 and 2 are invalid. What about claim 3? (218)(n+n7)n7nC7. Consider Problem 310 (209)*nCnO+nOn[$,n[ng-ngns.nsnNEXT: infringementliteral to 241; doctrine of equivalents, etc. to 264/nn0nnV1nn n8--n $'  'VIP 97 Class No. 100nnn'  '0!0nnn '  '0nn1. Enablement/disclosure [cont'd]: consider problem 310 (209)nn nn2. Now we've surveyed all 5 elements of patent validity. We're ready to move on toinfringement. Recall litigation pattern: no oo$$(1) We didn't infringe oo$$(2) Even if we did infringe, your patent is invalid  oo+  o+o7Look at sec. 271: what is infringement?  o7oC  oCoO3. The main thing you do in adjudicating infringement is see if the claims of thepatent "read on" the accused device. [Literal infringement] [What is nonliteralinfringement? see below ("doctrine of equivalents")]  oOos oso$(a) An obvious case of literal infringement is if I just take your device andcopy it exactly. oo oo$(b) Can there be literal infringement even if the accused device is not anexact copy? oo oo$$Yes, because the legally operative scope of the property oo$right is not the patented device itself but the words of the claim (as oo$applied to the accused device) oo oo$$$ E.g., if your claim says "transgenic nonhuman mammal" op$$w/ X biological property, and your device is a mouse, a$$transgenic rabbit with X biological property can infringe pp pp'$$$$[Infringer might still win by claiming patent was p'p3$$$invalid for lack of enablement] p3p? p?pK$$$Another example: Sawyer and Man patent claim 1 said pKpW$$carbonized fibrous material. Edison's use of carbonized bamboo pWpc$$would infringe, even though he didn't copy their use of pcpo$$carbonized paper.  !pop{! "p{p$(c) Although the accused device needn't be an exact copy of the" #pppatentee's device, in order for it to be literally infringing it does need# $ppto incorporate every element of the patentee's claim (see (240 n. 1)).$ %pp% &pp$$$What elements are there in claim to "transgenic$$nonhuman mammal" w/ X biological property? [(1) transgenic$$(2) nonhuman (3) mammal (4) X biological property]& )pp' *pp$$$$ So, in other words, a "transgenic nonhuman( +pp$$$mammal" without X property wouldn't infringe, etc.) ,pp* -pq $(d) What if infringer just changes a really trivial element?+ .q q, /qq#$$Suppose the claim for a complicated apparatus included a- 0q#q/$glass cylinder and the accused device was exactly the. 1q/q;$same except the cylinder was plastic / 2q;qG0 3qGqS$$$It's still not literal infringement (240 n. 1); but it might6 qS9 4..qk $6$$be infringement by doctrine of equivalents (difference is 5qSq{$$so trivial that it's unfair to let infringer get away with 6q{q$$it) 7qq 8qq$$$[Of course, patentees will try not to write claims 9qq$$this way. What's a better way to draft it? [use more general :qq$$terms for the appropriate properties of the material]] ;qq <qq4. Consider Larami v. Amron (229):  =qq  >qq$(a) Facts: One Esposito patented a toy water gun, which squirted water underpressure created by a hand pump, and also made noise and light. He assigned thepatent to Amron and TTMP. Larami made a toy water gun ("Super Soaker") thatsquirted out water under pressure created by a hand pump, but didn't make noise andlight. Larami brought action for declaratory judgment that Super Soaker didn'tinfringe TTMP (Totally Rad Soaker) [action also was for damages for tortiousinterference with contractual relations, etc., because TTMP was advertising thatLarami was infringing]  FqrG  GrGrS$(b) In order to decide case, what must judge do? (1) interpret the claims;(2) see if, as interpreted, they cover the accused product.  IrSrk Jrkrw$$$Note: Markman (253) Krwr Lrr$$$ Mrr$(c) Here, claims for the light and noise capabilities were not in issue. What about the watersquirting capabilities? Read the claim (232) Orr Prr$$$After the judge examined the SuperSoaker, what Qrr$$did he decide? [no chamber therein, because tank was Rrr$$on the outside] [this is an interpretation of "therein" and a Srr$$determination that it is an element of the claim] Trr Urr$(d) But, isn't the pressurepump the main invention and the placement of thetank trivial?  Wrs Xss$$$Still, because the claim said "therein," it isn't Yss+$$literal infringement Zs+s7 [s7sC$$$Might try to argue by equivalents [but ct here \sCsO$$thought the placement of the tank outside the gun was ]sOs[$$such a dramatic improvement that it couldn't be  ^s[sg$$held to be equivalent (233)]! _sgss" `sss$(e) Could Esposito have drafted the patent in such a way that it would beliterally infringed even by guns whose tank wasn't inside the body of the toy? ["anelongated housing and a chamber for a liquid connected to said housing in such a wayas to permit water to flow from the chamber through the housing ..." ?? see also(234 n. 1)]# ess$ fss5. Consider Genentech v. Welcome (234)% gss$& hss$(a) Facts: Genentech had three patents relating to a protein called tPA(tissue plasminogen activator) which is important in dissolving blood clots andstopping heart attacks (235). The '603 patent relates to purifying human tPA foundin melanoma; the '075 patent relates to producing tPA through genetic engineering(236).J' mst t9 m//t $Jܿ nt+t7$$The claim of the '603 patent (236) claimed "human plasminogenactivator...having a specific activity of about 500,000 IU/mg..." pt7tO qtOt[$$The claim of the '075 patent (237) claimed "a DNA sequence encodinghuman tissue plasminogen activator" st[ts ttst$$Defendants produced products called mettPA and FE1X using biochemicalmethods to alter naturally occurring tPA (238239). FE1X has a much longer half  life in the body making dosage easier. Do they infringe? wtt xtt$(b) How will ct approach the issue? First, interpret the claims. What aretheir essential elements and how broad are they? [To look at it the other way, whatare their limitations?] {tt  |tt$$What are the elements of the '603 claim? What are its  }tt$limitations? [see elements (236); cts interpretation (238)]  ~tt  tu$(c) Result? [(239)]  uu uu$$Why didn't defendants' products at least infringe the '075 uu'$patent which related to a genetically engineered product and not u'u3$to the purified human product? u3u? u?uK6. Consider the doctrine of equivalents. [Graver Tank v. Linde Mfg. (242): uKuW uWuc$(a) Facts: Linde owned a patent covering an electric welding process andfluxes to be used with it. Their flux was a compound called Unionmelt. Thedistrict court held four flux claims to be valid and infringed by Lincolnmelt,defendants competitive product; rest of claims invalid. The district courtsfindings on validity (vel non) were upheld after going all the way to the S.Ct. Nowthe S.Ct. has the case again for rehearing, limited to the question of whether the 4valid flux claims have been infringed. ucu uu$$The patent owned by Linde claimed a welding compound containing a majorproportion of alkaline earth metal silicate. Linde's product, Unionmelt, containedsilicates of calcium and magnesium (both alkaline earth metal silicates). Thecompetitive product, Lincolnmelt, consisted of 88.49% manganese silicate (not analkaline earth metal silicate) and calcium silicate. In welding it worked the sameas Unionmelt.  uv  v v$(b) Argument that Lincolnmelt does not infringe: Read the literal wording ofthe claim it says major proportion of alkaline earth metal silicate and theaccused compound instead has a major proportion of something which is not analkaline earth metal silicate [Trial court said patent wasnt literallyinfringed.] vvS vSv_$(c) Argument that Lincolnmelt infringes anyway: Permitting infringers toavoid patents by changing minor details would deny inventors the benefit of patentsand would mess up incentive structure. (243) If the thing is essentially the same itdoesnt have to be literally the same in every detail.. [sameness & difference] v_v vv$$if it performs substantially the same function in substantially$the same way to obain the same result, its the same [even if different inname, form, or shape (243) vv vv$$$equivalence can involve mechanical components orJ vv vˀ9 00v $J$$chemical ingredients vv vv$(d) Court says (243) that the doctrine operates not only in favor of thepatentee of a pioneer or primary invention, but also for the patentee of a secondaryinvention consisting of a combination of old ingredients which produce new anduseful results, although the area of equivalence may vary under the circumstances. What does this mean? vw; w;wG$$$cites Westinghouse (discussed on (25960) wGwS wSw_$$$"reverse" doctrine of equivalents [if what you did is w_wk$$enough of a breakthrough, even literal infringement can wkww$$be excused]  www  ww$(e) Whether or not to find infringement by applying doctrine of equivalentsis question of fact for trial court. In this case the issue is whether trial courterred in finding Lincolnmelt was equivalent to Unionmelt (and thus infringing).  ww  ww$$What kinds of factors led the trial court to make this decision? [(2445)]  ww ww$$$identical in operation and produce the same ww$$kind and quality of weld ww wx$$$no evidence that Lincolnweld was developed by xx$$independent R & D [court can infer that accused compound xx$$is copied] xx+ x+x7$$$prior art: Miller and Armor involved use of x7xC$$manganese silicate in weldling fluxes [expired patents] xCxO xOx[$$$$persons reasonably skilled in the art x[xg$$$$would have known manganese and magnesium xgxs$$$$were interchangeable [use of prior art in xsx$$$$favor of doctrine of equivalence] xx xx$$$Expert witnesses xx xx$$$Texts on inorganic chemistry  xx! xx$$$Visits to laboratories and observations of welding" xx$$$$demonstrations# xx$ xx$(f) Dissent: Patentee should be held to literal claim, because:% xx& xy$$(1) shouldnt be allowed to let things mentioned in' yy$specifications broaden the claim; what is not literally( yy$claimed is dedicated to the public (246)) yy'$* y'y3$$$inventor experimented with other ingredients+ y3y?$$including manganese and chose the ones claimed, y?yK- yKyW$$$$ might have thought couldnt get a. yWyc$$$$patent if claimed manganese, since/ ycyo$$$$it was known in prior (expired) patents [use of0 yoy{$$$$prior art against doctrine of equivalents]1 y{yJ2 yy y9 11y $J$$$see n. 1 (2467): hypothetical claim procedure in yy$$golf ball case yy yy$$(2) differences are more than de minimis (247 n. 2) yy yy$(g) CAFC dramatically reinterpreted doctrine of equivalents in HiltonDavis(1995)adds copying vs. independent design; and objective evidence (like knowninterchangeability in the prior art): question is whether differences are"insubstantial" or "substantial" [note: cert. granted, decision not yet issued] yz zz$$note this is a jury issue (2556) zz'  z'z3$$raises possibility that judge in Markman hearing will interpretclaim narrowly so that literal infringement can't be  z3zK$found, but then jury can give patentee victory anyway by  zKzW$finding equivalence  zWzc  zczo$(h) Doctrine of equivalents is accordionlike: cts give the patent broaderscope if they think it is a pioneer patent (see 250251) zoz zz$$Does this mean your pioneer patent could prevail zz$against an improvement doing exactly the same thing but zz$with a stronger material that hadn't been discovered yet zz$when your patent issued? (251; explain) zz zz$$$Hughes aircraft (yes); Laser Alignment (yes); zz$$$Texas Instruments (no) zz zz$(i) Problem of meanplusfunction claims (2612) zz z{ $$Read last paragraph of sec. 112 [allows meansplusfunction { {$claim for an element of a combination] {{# {#{/$$$Nevertheless, this only covers structure disclosed {/{;$$in the specification and equivalents thereof (262) {;{G {G{S$$$See note 3 (263): this has caused considerable  {S{_$$confusion... problem is, it seems to limit the doctrine! {_{k$$of equivalents (264)" {k{w# {w{$$ Example: What would happen if your means for performing$ {{$$a calculation in your process was an adding machine, and% {{$$the accused infringer's process used a computer?& {{' {{$$$Might be like Hughes Aircraft or Laser Alignment [but( {{$$not if doctrine of equivalents in your case is limited to the) {{$$meaning of equivalents in last para. of sec. 112]* {{+ {{$, {{[Add: Problem 311]- {{. {|/ ||NEXT: infringement [cont'd] and remedies to 308. Omit sec. G (design and plantpatents); move on to software patents intro (830850 [read on own]; 963990V0 ||+ ||6 22|+ $'  'VIP 97 Class No. 110 |;|G|;'  '0"0 |G|S|G '  '01. Infringement [cont'd][sec. 271(Supp 333)]: inducment and contributoryinfringement |S|k |k|w |w|$(a) Consider sec. 271(b) [active inducement] || ||$$see note on inducement (267) ||  ||$$in Water Technologies, a consultant supplied plans for  ||$an infringing device [he didn't make, sell, himself, but he induced  !||$his client to do so]  "||  #||$$importance of intent [statute doesn't say so?] $|| %||$$$$see also notice requirement for direct &|}$$$infringement (sec. 287) '}} (}}$$what do you need to know to count as intent? )}}+ *}+}7$$$that there is a patent that covers this +}7}C ,}C}O$$$that your activities will lead to infringement -}O}[ .}[}g$$$role of patent attorney's opinion letter re the above /}g}s 0}s} 1}}$(b) Consider sec. 271 (c) [contributory infringement] 2}} 3}}$$(1) Why should there be infringement liability for firm 4}}$that makes component of an infringing device? [Why should manufacturing anunpatented product automatically make you an infringer w/r to some other patentedproduct?] 7}}  8}}$$$Why the exemption for staple article or! 9}}$$commodity of commerce...? [see (283 n. 43)]" :}}# ;}~$$$Why the exemption for firm that doesn't know of$ <~~$$its product's adaption for infringement? [intent]% =~~& >~~'$$$$[is this necessary if the article has no' ?~'~3$$$$commercial noninfringing uses?]( @~3~?) A~?~K$$(2) Consider Bard v. ACS (264)* B~K~W+ C~W~c$$Facts: ACS was supplier of a catheter for use in angioplasty. $The method of angioplasty it was used in was patented by Bard. Bard suesACS for contributory infringement., F~c~- G~~$$In order to figure out whether there is contributory infringment,first court has to figure out whether there is any direct. I~~$infringement that defendant can contribute to/ J~~0 K~~$$$How does ct do this? [remember procedure: first1 L~~$$interpret claims, then see if they read on the accused2 M~~$$process] (265)J3 N~~ ~ۀ9 N33~ $J$ O~$$Why is summary judgment reversed? P Q$$Can catheter manufacturer be contributorily liable even if R'$doctor who uses infringing device is immunized? (266 n. 1) S'3 T3?$ U?K2. Defenses [other than patent invalidity] VKW  WWc$(a) experimental use (269)  Xco  Yo{$$note problem of gearing up to produce patented product before endof term  [{  \$$$this defense is very narrow, except for pharmaceuticals ]$$(271 n. 3) ^ _$(b) inequitable conduct [before the PTO]: Kingsdown (217) ` a$$(1) what counts as inequitable conduct? failure to disclose b$material information, or submission of false material information, c$with intent to deceive d e $$$e.g., not mentioning an important reference in f $$prior art (276 n. 2) g#$$$$ h#/ i/;$$$would it be bad enough if you were j;G$$$$merely negligent w/r to prior art, or would kGS$$$$have to omit it purposely or knowingly? lS_ m_k$$(2) would it be inequitable conduct to draft claims that cover nkw$the product of a competitor that is already on the market?  ow! p$$(3) would it be inequitable conduct to delay your prosecution tomake your patent issue as late as possible? [note, no longer a problem]" r# s$$$why would you do this? (276 n. 3)$ t% u$$$what are the ways you can delay an application?& v$$$[note sec. 133 6 months to respond to any PTO action]' w( x$$$$explain division; parent (sec. 121)) y* z$$(4) note sec. 253 (disclaimer): would it be inequitable conduct+ {$to fail to disclaim a claim that you came to think was invalid?, |- }+$$$see sec. 288: must disclaim invalid claim to recover. ~+7$$costs against infringer of valid portion of patent; also may have$$to disclaim to avoid inference of deceptive intention/ 7O0 O[$$$see also sec. 251 (reissue)1 [g2 gs$$(5) Go back to facts of Kingsdown: what happened? 3 s4 $$$Facts: Kingsdown sued Hollister for infringement of5 $$'363 patent (on a 2piece ostomy appliance). The claimsJ6  9 44 $J$$had been revised a lot during 6year prosecution. During this $$period Kingsdown got a new attorney who saw Hollister's $$competing product and filed a continuation application$$(apparently covering the competing product).  $$$$$[What is a continuation application? new $$$$application changing only the claims]  $$In the process of drafting the continuation application, the $$attorney copied over all the claims that the examiner had  +$$previously allowed. He made a mistake, however, w/r to  +7$$claim 43 he thought it was identical to allowed claim  7C$$50 in the original (parent) application, but instead it was  CO$$identical to a claim that the examiner had disallowed for  O[$$indefiniteness under sec. 112 [not "particular" and "distinct" [g$$enough]. Claim 43 made it into the final patent as claim 9. gs s$$Defendant claims that had claim 9 been written as the $$narrower, allowable original claim 50 rather than the $$rejected original claim 50, defendant would possibly $$have been able to defend against infringement.  $$Defendant therefore says Kinsdown's attorney, after $$seeing defendant's device, must have deliberately carried $$forward the wrong version of the claim because he saw $$that it would provide a stronger case for his client. $ $$Trial ct finds intent to deceive; what result? Patent is $$unenforceable. However, appellate court reverses $$explain (see 274).  '$$$ why did court think this didn't amount to inequitable$$$conduct? [finding of intent was clearly erroneous; gross$$$negligent wouldn't be enough culpability] 'K$$  KW! Wc$(c) patent misuse" co# o{$$issue of trying to "extend" monopoly to nonpatented items$ {% $$facts of Motion Picture Patents (278)& ' $$$make licensees of patented machine use only the( $$film utilizing patentee's other patents; make licensees comply$$with other laterimposed directives of patentee ) * $$$$ct thought this was outside scope of patent+ $$$grant (see 281), - $Over the years this doctrine has been narrowed: what does it now look like?. / $$sec. 271(c) : patentee can't sue for infringement if competitor0 #$sells "staple" product for use with patented product [i.e. can't tie to1 #/$staple product [don't need antitrust or patent misuse for this]2 /;3 ;G$$sec. 271(d): (1) patentee can himself sell a nonstaple product$necessary for the patent and it won't be patent misuse; moreover, (5) unless6 S9 55G $6patentee has market power in the relevant market for the patented (tying)product, it won't be patent misuse to refuse to sell the patented product unlessbuyer also purchases another product G $$$see Dawson Chemical (284)  $$what is left for patent misuse?  $$$royalty not measured by use? [Hazeltine (285)]  $$$grantback clauses (286)    $$$patent suppression? [not anymore; see sec. 271(d) (4)]    3. International patent law (290) [read on own mostly]  # #/$firsttofile system /; ;G$absolute priority [no oneyear grace period] GS S_$Paris Convention [12 months to file after 1st filing somewhere] _k kw$PCT [gives more time up to 30 months] w $GATT/TRIPS  $$what did we make others do? (295)  $$what changes did we make? (296)  4. Remedies  $(a) Property rules vs. liability rules (297)   $$argues for injunction! $$" $$what are exceptions?# +$ +7$(b) Look at sec. 283 % 7C& CO$ Injunction [preliminary; permanent]against future use' O[( [g$$Robertson (300); Kodak (301 n. 1)) gs$$$* s$$$[infrequent exceptions (301 n. 2)]+ , $(c) Look at sec. 284 [see also sec. 286; limited to 6 years worth; only afternotice sec. 287]- . $$damages for past use (compensatory; but not less than/ $a reasonable royalty)0 1 $$ct may increase the damages up to treble2 3 $(d) How will ct figure out what is compensatory? what is a reasonableroyalty?4 J5  9 66 $J$$reasonable royalty (as floor): (303) +7 7C$$Panduit (303): on how to calculate damages for sales the$patentee would have made absent the infringement [lost sales] C[ [g$$$what information do we need in order to be gs$$able to do this? s $$$$patentee has capacity to make and sell X amount$$$(manufacturing and marketing capability)   $$$$buyers would demand X amount (at what price?)    $$$$$$absence of noninfringing substitutes    $$Kodak (303, 305): even if products are not exact $substitutes, market competition can place some limits on what $you can charge ("cross elasticities of demand")this should be $taken into account in calculating lost profits  $$what about "market share" rule? [even if there are '$substitutes, assume patentee would have had same proportion '3$of infringer's sales as patentee's market share as a whole] (306) 3? ?K$$what about lost sales of unpatented components (307)? KW Wc$$$see TWM Mfg. (307) co o{$$$[recall sec. 271(d) patentee can sue people for {$$contributory infringement re nonstaple products, therefore $$keep this market for itself (2); can also tie even a staple $$product to the patented product, unless patentee has market$$power in the relevant market for the patented product(5)]  $$can you argue that if infringer weren't there you would have  $been a monopolist and therefore not only would have sold all the! $units he sold but in addition charged a higher price for them?" $(306)# $ $$what about situation where infringer has geared up% ! $before your patent expires in order to hit the ground running?& " $[how measure damages in this case? (3078)' ##( $#/) %/;* &;GNEXT: move on to software patents intro (830850 [read on own]; 963990+ 'GS, (S_#V- )_k _40 )77k $'  'VIP 97 Class No. 120 *{{'  '00 + '  '0 ,1. Remedies - .$(a) Property rules vs. liability rules (297) / 0$$argues for injunction 1$$  2$$what are exceptions?  3  4$(b) Look at sec. 283   5   6 $ Injunction [preliminary; permanent]against future use 7# 8#/$$Robertson (300); Kodak (301 n. 1) 9/;$$$ :;G$$$[infrequent exceptions (301 n. 2)] ;GS <S_$(c) Look at sec. 284 [see also sec. 286; limited to 6 years worth; only afternotice sec. 287] >_w ?w$$damages for past use (compensatory; but not less than @$a reasonable royalty) A B$$ct may increase the damages up to treble [will do this if C$infringement is "wilful"] D E$(d) How will ct figure out what is compensatory? and if it can't, what is areasonable royalty? G H$$(1) reasonable royalty (as floor): (303) I J$$$evidence of offers to license (before litigation)?  K$$$evidence of cost savings due to the patented process?$$$$[evidence of increased sales by infringer?this! M+$$$$would make it possible to determine lost profits?]" N+7$$$[what else goes into what a willing buyer would# O7C$$$$$have paid?]$ PCO% QO[$$(2) Panduit (303): on how to calculate damages for sales the$patentee would have made absent the infringement [lost sales]& S[s' Ts$$$a. what information do we need in order to be( U$$able to do this?) V* W$$$$patentee has capacity to make and sell X amount$$$(manufacturing and marketing capability); but infringer+ Y$$$sold Y amount, so patentee only sold [something less than$$$X], [- \$$$b. when are we entitled to infer that patentee has lost. ]$$sales of XY?/ ^0 _$$$$buyers would demand X amount (at what price?)1 `2 a$$$$absence of noninfringing substitutes (at what6 9 b883 $6$$$price?) cC dCO$$$ eO[ f[g$$(3) Kodak (303, 305): even if products are not exact ggs$substitutes, market competition can place some limits on what hs$patentee can charge ("cross elasticities of demand")this should be i$taken into account in calculating lost profits [i.e. absent the infringer$you might have sold all the units the infringer sold but not at the samehigh price you sold the units you yourself actually sold] l  m$$(4) can you argue that if infringer weren't there you would $havebeen a monopolist and therefore not only would have sold all the units he soldbut in addition charged a higher price for them?  p$(306)  q  r$$(5) what about "market share" rule? [even if there are  s$substitutes, assume patentee would have had same proportion t$of infringer's sales as patentee's market share as a whole] (306) u v'$$(6) what about lost sales of unpatented components (307)? w'3 x3?$$$see TWM Mfg. (307) y?K zKW$$$[recall sec. 271(d): patentee can sue people for {Wc$$contributory infringement re nonstaple products, therefore |co$$keep this market for itself (2); can also tie even a staple }o{$$product to the patented product, unless patentee has market$$power in the relevant market for the patented product(5)] { $$(7) what about situation where infringer has geared up $before your patent expires in order to hit the ground running? $[how measure damages in this case? (3078)   2. Consider patentability of computer programs:   $$(a) What exactly is a computer program?! " $$$source code (835)# $$$compiler (836)$ #$$$object code ((836)% #/$$$electrical states of transistors& /;' ;G$$(b) Pros and cons of patenting them?( GS) S_3. Diamond v. Diehr (963):* _k+ kw$(a) Summarize legal history prior to this case: (from Stevens dissent), w- $$ Prior to 1968, patenting a program would have been. $precluded by the mental steps doctrine and/or the function of a$machine doctrine; the PTO issued guidelines that excluded $computerprograms/ 0 $$However, in 1968 the Court of Customs and Patent Appeals repudiatedthe mental steps and function of a machine doctrines J1  ׀9 99 $Jܿ $$$In re Barnhard (1969) announced that a computer $$programmed with a new program was physical different $$from a computer without the program # #/$$$In re Benson (1971) held that computers are within the$$technological arts regardless of the uses to which they are put /G GS$$The S Ct reversed In re Benson in Gottschalk v. Benson (1972):Benson held that new mathematical procedures that can be Sk$conducted in old computers, like mental processes and abstract intellectualconcepts, are not patentable processes within the meaning of sec. 101 [no patentfor a new method of  k$calculation or an algorithm](965)    $$$The Court of Customs and Patent Appeals interpreted  $$Benson to preclude the patenting of a programrelated  $$process only when the claims, if allowed, would wholly $$preempt the algorithm itself [i.e., all uses of a mathematical $$formula]  $$The S Ct reversed this view in Parker v. Flook ((1978)(965):  $$$Facts of Flook: In a catalytic conversion process, a $$computer constantly monitored variables such as temperature $$pressure and flow rates. The computer repetitively +$$calculated the alarm limit a number that might signal +7$$the need to terminate or modify the catalytic conversion 7C$$process CO O[$$$$The Ct of Customs and Patent Appeals [g$$$interpreted this case to mean that if an application gs$$$is drafted in such a way that discloses an entire s$$$process as novel, it defines patentable subject $$$matter even if the only novel element that the $$$inventor claims to have discovered is a new  $$$computer program! " $(b) Did Diamond v. Diehr adopt this approach?# $ $$What was the claimed invention?% & $$$Applicant says? [a process of rubber curing which$$includes constantly measuring the temperature inside the mold$$by means of Arrhenius equation so as to stop the process at$$exactly the right time]' ( '$$$Examiner said? [a computer program for operating) '3$$a rubber molding process] [denied under Gottschalk and* 3?$$Flook]+ ?K, KW$$$Rehnquist says? [a physical and chemical process- Wc$$for molding precision synthetic rubber products; involves. co$$the transformation of an article into a different state or/ o{$$thing (964)0 {1 $$$Dissent (Stevens) says? [an improvedJ2  9 :: $J$$method of calculating the time that the mold should $$remain closed during the curing process]  $$How does Court distinguish Parker v. Flook? (9656)  $$$applicant here doesnt seek to preempt use of $$the equation in general, only use of it in conjunction $$with the rubbercuring process   4. After Diehr, is any computer program patentable as long as you draft the claimsproperly?  3  3?$(a) See FreemanWalterAbele (967 n. 1): all you have to do is include otherprocess steps or physical structures in the claim  ?W  Wc$(b) 14,000 issued software patents in the U.S. by 1994 (967 n. 2); 8,000 lastyear; lots of issued patents look bad (984 n. 4)what will happen? c{ {5. Federal Circuit still hasn't arrived at satisfactory position: consider In reAlappat (967) and then PTO's Examination Guideliness (1996) attempting to implementit  $(a) What did Alappat invent?  $$Claim was for "a rasterizer" (see 970971) [explain meansplus $function claim, sec. 112 para. 6]  $(b) Why did the PTO reject this claim? [the "mathematical algorithm" exception to patentable subject matter (972)]  $$$essentially, it was a computer program that #$$put together known formulas to interpolate between #/$$points to display a line on an oscilloscope's screen (978 n. 1) /; ;G$$$cf. Cohen (989): software patents appear to GS$$reward the inventor for recognizing the obviousthat S_$$a given function may be performed more efficiently or  _k$$more accurately if computerized! kw" w$(c) How does CAFC here deal with the "mathematical algorithm"# problem? ["This is not a disembodied mathematical concept which may be characterizedas an 'abstract idea,' but rather a specific machine to produce a useful, concrete,and tangible result." (973)$ % $$Does ct think that any programmed computer which can now& $do a certain task is therefore patentable? ' ( $$$(see (974)!) * $$Consider dissent's objection: + , $$$(976) "Alappat has arranged known circuit elements to- $$accomplish nothing other than the solving of a particular. +$$mathematical equation"; see also last paragraph (978)/ +70 7C$$$(977) music example: "Through the expedient of1 CO$$putting his music on known structure, can a composer nowJ2 O[ O9 ;;[ $J$$claim as his invention the structure of a compact disc or kw$$player piano roll containing the melody he discovered and w$$obtain a patent therefor?"   6. Consider PTOs new (Jan 1996) Examination Guidelines for ComputerImplementedInventions:  $(a) Consider the distinction between functional and nonfunctionaldescriptive material (981)   $$what is descriptive material? [(981) abstract ideas and laws   $of nature]    $$$"functional" descriptive material consists of data  $$structures and computer programs which impart functionality  +$$when encoded on a computerreadable medium +7 7C$$$"nonfunctional" descriptive material includes but is CO$$not limited to music, literary works and a compilation or !O[$$mere arrangement of data "[g #gs$$both types of descriptive material are nonstatutory when $s$claimed as descriptive material per se (981) % &$$"When functional descriptive material is recorded on some '$computerreadable medium it becomes structurally and functionally ($interrelated to the medium and will be statutory in most cases."(981) ) *$$$$"When nonfunctional descriptive material is +$$$recorded on some computerreadable medium it is ,$$$not structurally and functionally interrelated to the -$$$medium but is merely carried by the medium." (981) .  /$(b) Data structures not claimed as embodied in computerreadable media aredescriptive material per se and are not statutory because they are neither physicalthings nor statutory processes (981)! 2'" 3'3$(c) Computer programs claimed as computer listings per se...are not physicalthings, nor are they statutory processes, as they are not acts being performed....Incontrast, a claimed computerreadable medium encoded with a computer program definesstructural and functional interrelationships between the program and the mediumwhich permit the computer program's functionality to be realized, and is thusstatutory. (981)# 93{$ :{$(d) (983) To be statutory, a claimed process must either (1) result in aphysical transformation outside the computer for which a practical application inthe technological arts is either disclosed in the specification or would have beenknown to one skillled in the art; or (2) be limited by the language of the claim toa practical application within the technololgical arts% ?& @$$there is always physical transformation within a computer' A$(983) but that's not dispositive;( B) C$$a process consisting solely of mathematical operations is not* D$statutory (983)+ E J, F  9 F<< $J$ G'3$(e )Summary: H3? I?K What types of claims are nonstatutory? those that define JKW$$ KWc$$a data structure per se or computer program per se; i.e., Lco$information rather than a computerimplemented process or Mo{$specific machine or computer readable memory manufacture; N{  O$$a compilation or arrangement of nonfunctional information  P$or a known machinereadable storage medium that is encoded with  Q$such information;  R  S$$natural phenomena such as electricity and magnetism T UWhat types of claims are statutory? V W$$product claims: those identifying the physical structure of the$machine or manufacture in terms of its hardware or hardware and softwarecombination Z [#$$process claims: where the process manipulates some form \#/$of physical matter or energy; and results in a transformation or ]/;$reduction of the subject matter manipulated into a different state ^;G$or into a different thing to achieve a practical application _GS `S_ Examples of processes the PTO will consider statutory: a_k bkw$$A process that requires physical acts to be performed independent ofthe steps to be performed by a programmed computer, where those acts involve themanipulation of tangible physical objects and result in the objects havingdifferent physical attributes or structure; fw g$$A process that requires acts to be performed on the physical componentsof a computer (i.e., the process manipulates the components of the computer ratherthan data representing something external to the computer system) and the effect ofthe process is that the computer operates differently (such as an operating systemprocess); and l m$$A process that requires acts to be performed by a computer on data inthe form of an electrical or magnetic signal, where the data represents a physicalobject or activities external to the computer system (e.g., physical characteristicsof a chemical compound or a persons heart rate), and where the process causes sometransformation of the physical but intangible representation of the physical objector activities. sC  tCO7. How does Alappat come out under these guidelines?! uO[" v[g8. Consider Q 1 (984): can you patent any data structure as long as you draft itcorrectly?# xg$ y9 Note the general consensus that there are a lot of bad software patents outthere. (988 n. 2)% {& |$$(a) Compton's (988n. 46)' }( ~$$(b) worst software patent award (Aharonian)J)  ǀ9 == $Jܿ NEXT: copyright (ch. 4): 321389 [also read sections 101 103 of the copyrightact]  $$  +V +7 +H >>7 $'  'VIP 97 Class No. 130 GSG'  '0$0 S_S '  '0 _kMISSING PAGES 390429: AVAILABLE FRIDAY MORNING kw w1. [Update on HiltonDavis decided by S.Ct. on Mon. March 3]   Recall discussion on p. 255: CAFC held that doctrine of equivalents was for jury(even though called "equitable") and also (see note 4 on p. 248) that the propertest is whether the accused product is not "substantially" different from thepatented product (rather than functionwayresult test). This allowed broad scopefor jury and plaintiff won.   S.Ct. unanimously reverses. Doctrine of equivalents should not be allowed to expandpatent scope. S.Ct. doesn't accept defendant's argument that doctrine ofequivalents should be eliminated (because inconsistent with patent act'srequirements that invention be specifically claimed recall dissent in GraverTank); instead says doctrine of equivalents should be limited: "Each elementcontained in a patent claim is deemed material to defining the scope of the patentedinvention, and thus the doctrine of equivalents must be applied to individualelements of the claim, not to the invention as a whole."  C  COS.Ct. doesn't reach the question of whether equivalents is for judge or jury.  O[  [g2. Computer software [cont'd] gs sConsider Diamond v. Diehr (963):  $(a) Summarize legal history prior to this case:[shows that Court of Customsand Patent Appeals was at odds with S Ct during the 60's and '70's prior to Diamondv. Diehr]  $$ Prior to 1968, patenting a program would have been $precluded by the mental steps doctrine and/or the function of a$machine doctrine; the PTO issued guidelines that excluded $computerprograms  $$However, in 1968 the Court of Customs and Patent Appeals repudiatedthe mental steps and function of a machine doctrines   '$$$In re Barnhard (1969) announced that a computer '3$$programmed with a new program was physically different 3?$$from a computer without the program ?K KW$$$In re Benson (1971) held that computers are within the$$technological arts regardless of the uses to which they are put Wo o{$$The S Ct reversed In re Benson in Gottschalk v. Benson (1972):Benson held that new mathematical procedures that can be {$conducted in old computers, like mental processes and abstract intellectualconcepts, are not patentable processes within the meaning of sec. 101 [no patentfor a new method of  $calculation or an algorithm](965)! " $$$The Court of Customs and Patent Appeals interpreted# $$Benson to preclude the patenting of a programrelated$ $$process only when the claims, if allowed, would whollyJ%  9 ?? $J$$preempt the algorithm itself [i.e., all uses of a mathematical $$formula]  '$$The S Ct reversed this view in Parker v. Flook ((1978)(965): '3 3?$$$Facts of Flook: In a catalytic conversion process, a ?K$$computer constantly monitored variables such as temperature KW$$pressure and flow rates. The computer repetitively Wc$$calculated the alarm limit a number that might signal  co$$the need to terminate or modify the catalytic conversion  o{$$process [the S Ct held the computer program wasn't  {$$patentable subject mattersee (965)]    $$$$The Ct of Customs and Patent Appeals $$$interpreted this case to mean that if an application $$$is drafted in such a way that discloses an entire $$$process as novel, it defines patentable subject $$$matter even if the only novel element that the $$$inventor claims to have discovered is a new $$$computer program  $(b) Did Diamond v. Diehr adopt this approach?  $$(1) What was the claimed invention? # #/$$$Applicant says? [a process of rubber curing which$$includes constantly measuring the temperature inside the mold$$by means of Arrhenius equation so as to stop the process at$$exactly the right time] /_ _k$$$Examiner said? [a computer program for operating kw$$a rubber molding process] [denied under Gottschalk and w$$Flook]  $$$Rehnquist says? [a physical and chemical process  $$for molding precision synthetic rubber products; involves! $$the transformation of an article into a different state or" $$thing (964)# $ $$$[What do you think dissent (Stevens) says? [an$$improved method of calculating the time that the mold should% $$remain closed during the curing process]& ' $$(2) How does Court distinguish Parker v. Flook? (9656)( ) $$$applicant here doesnt seek to preempt use of* +$$the equation in general, only use of it in conjunction+ +7$$with the rubbercuring process, 7C- CO3. After Diehr, is any computer program patentable as long as you draft the claimsproperly? [claim whole process OK; claim computer part only not OK?]. Og/ gs$(a) See FreemanWalterAbele (967 n. 1): all you have to do is include otherprocess steps or physical structures in the claim0 s1 $(b) 14,000 issued software patents in the U.S. by 1994 (967 n. 2); 8,000 lastyear; lots of issued patents look bad (984 n. 4)what will happen?J2  9 @@ $Jܿ 4. Federal Circuit still hasn't arrived at satisfactory position: consider In reAlappat (967) and then PTO's Examination Guideliness (1996) attempting to implementit  $(a) What did Alappat invent?  $$Claim was for "a rasterizer" (see 970971) [explain meansplus $function claim, sec. 112 para. 6] + +7$(b) Why did the PTO reject this claim? [the "mathematical algorithm"  7Cexception to patentable subject matter (972)]  CO  O[$$$essentially, it was a computer program that  [g$$put together known formulas to interpolate between  gs$$points to display a line on an oscilloscope's screen (978 n. 1) s $$$cf. Cohen (989): software patents appear to $$reward the inventor for recognizing the obviousthat $$a given function may be performed more efficiently or $$more accurately if computerized  $(c) How does CAFC here deal with the "mathematical algorithm" problem? ["This is not a disembodied mathematical concept which may be characterizedas an 'abstract idea,' but rather a specific machine to produce a useful, concrete,and tangible result." (973)]  $$Does ct think that any programmed computer which can now $do a certain task is therefore patentable?   '$$$(see (974)! '3 3?$$Consider dissent's objection:  ?K KW$$$(976) "Alappat has arranged known circuit elements to Wc$$accomplish nothing other than the solving of a particular  co$$mathematical equation"; see also last paragraph (978)! o{" {$$$(977) music example: "Through the expedient of# $$putting his music on known structure, can a composer now$ $$claim as his invention the structure of a compact disc or% !$$player piano roll containing the melody he discovered and& "$$obtain a patent therefor?"' #( $) %5. Consider PTOs new (Jan 1996) Examination Guidelines for ComputerImplementedInventions:* '+ ($(a) Consider the distinction between functional and nonfunctionaldescriptive material (981), *- +#$$what is descriptive material? [(981) abstract ideas and laws . ,#/$of nature]/ -/;0 .;G$$$"functional" descriptive material consists of data1 /GS$$structures and computer programs which impart functionality 2 0S_$$when encoded on a computerreadable mediumJ3 1_k _9 1AAk $Jܿ 2{$$$"nonfunctional" descriptive material includes but is 3$$not limited to music, literary works and a compilation or 4$$mere arrangement of data 5 6$$both types of descriptive material are nonstatutory when 7$claimed as descriptive material per se (981) 8 9$$BUT "When functional descriptive material is recorded on somecomputerreadable medium it becomes structurally and functionally interrelated tothe medium and will be statutory in most cases."(981)  <  = $$$$"When nonfunctional descriptive material is  > $$$recorded on some computerreadable medium it is  ?#$$$not structurally and functionally interrelated to the  @#/$$$medium but is merely carried by the medium." (981) A/; B;G$$[Explain difference between "structurally and functionally CGS$$interrelated," on the one hand, and "merely carried," on the DS_$$other?] E_k Fkw$(b) Data structures not claimed as embodied in computerreadable media aredescriptive material per se and are not statutory because they are neither physicalthings nor statutory processes (981) Iw J$(c) Computer programs claimed as computer listings per se...are not physicalthings, nor are they statutory processes, as they are not acts being performed....Incontrast, a claimed computerreadable medium encoded with a computer program definesstructural and functional interrelationships between the program and the mediumwhich permit the computer program's functionality to be realized, and is thusstatutory. (981)[e.g., "software on a floppy disk"] P Q$(d) (983) To be statutory, a claimed process must either (1) result in aphysical transformation outside the computer for which a practical application inthe technological arts is either disclosed in the specification or would have beenknown to one skillled in the art; or (2) be limited by the language of the claim toa practical application within the technololgical arts V7 W7C$$there is always physical transformation within a computer XCO$(983) but that's not dispositive; YO[ Z[g$$a process consisting solely of mathematical operations is not [gs$statutory (983) \s ]$  ^$(e )Summary:! _" ` What types of claims are nonstatutory? those that define# a$$$ b$$a data structure per se or computer program per se; i.e.,% c$information rather than a computerimplemented process or& d$specific machine or computer readable memory manufacture;' e( f$$a compilation or arrangement of nonfunctional information) g$or a known machinereadable storage medium that is encoded with* h$such information;+ iJ, j' 9 jBB' $J$$natural phenomena such as electricity and magnetism k7C lCOWhat types of claims are statutory? mO[ n[g$$product claims: those identifying the physical structure of the$machine or manufacture in terms of its hardware or hardware and softwarecombination qg r$$process claims: where the process manipulates some form s$of physical matter or energy; and results in a transformation or t$reduction of the subject matter manipulated into a different state  u$or into a different thing to achieve a practical application  v  w Examples of processes the PTO will consider statutory:  x  y$$A process that requires physical acts to be performed independent ofthe steps to be performed by a programmed computer, where those acts involve themanipulation of tangible physical objects and result in the objects havingdifferent physical attributes or structure; } ~'$$A process that requires acts to be performed on the physical componentsof a computer (i.e., the process manipulates the components of the computer ratherthan data representing something external to the computer system) and the effect ofthe process is that the computer operates differently (such as an operating systemprocess); and 'c co$$A process that requires acts to be performed by a computer on data inthe form of an electrical or magnetic signal, where the data represents a physicalobject or activities external to the computer system (e.g., physical characteristicsof a chemical compound or a persons heart rate), and where the process causes sometransformation of the physical but intangible representation of the physical objector activities. o 7. How does Alappat come out under these guidelines?  8. Consider Q 1 (984): can you patent any data structure as long as you draft itcorrectly?  9. Note the general consensus that there are a lot of bad software patents outthere. (988 n. 2)  #$$(a) Compton's (988n. 46) #/ /;$$(b) worst software patent award (Aharonian) ;G GSNEXT: copyright (ch. 4): 321389 [also read sections 101 103 of the copyrightact] Sk kw10. Introduction to Copyright:  w! $(a) The paradigm activity forbidden by copyright is for publisher B to copy'  'and sell a book produced and sold by publisher A0" d'  '0# $$ Copyright developed in conjunction with the rise of print (whenbooks had to be hand copied by scribes rampant copying was not a problemprobablythere was too little copying, not too much)$ J%  ׀9 CC $J$$$copyright began as benefit for publishers, not $$authors (321), and, arguably, it still is  $$ Go back to Constitution: The policy is to grant timelimitedmonopolies sufficient to provide incentives to Authors [=publishers] to produceenough writings to promote progress of science ; ;G$$Now look at sec. 102(a) of the 1976 Act (Supp 125): the$categories after literary works came successively later and fit the$paradigm less well.  Gk kw$(b) The evil is copying, not merely coming up with the same thing w  $$Look at sec. 106: the copyright owner is the only one  $who can authorize making (1) and distribution (3) of copies    $$$it doesnt say the copyright owner would have to  $$authorize anyone else who happened to write the same $$thing, though [and distribute it]  $$$contrast with patent: the owner has the exclusive $$right to make and sell the invention [that means you can $$stop other people from making it]  $$$means prima facie case of copyright infringement $$includes showing that the defendant copied [often you can +$$infer it if the works are identical and sometimes +7$$publishers include a few mistakes to see if they get 7C$$reproduced] CO O[$(c) Sec. 102 (a): Two basic requirements of copyright: [g gs$$original work of authorship [in one of the named categories] s $$$ What is meant by originality?   $$$$! $$fixed in a tangible medium of expression" # $$$$what does this mean? (Sec. 101, Supp 121)$ % $(d) What kinds of things arent covered by copyright?& ' $$Sec. 102 (a):( ) $$(1) things that are unoriginal* + '$$$facts [problem with databases?], '3- 3?$$(2) things that arent fixed. ?K/ KW$$$improvisations0 Wc1 co$$$performance [unrecorded]2 o{$$$$If you go to a concert with a tape recorder in your3 {$$pocket, whose copyright do you violate?4 J5  9 DD $J$$$telephone conversations  $$$my lecture today [though what if Im reading it? basing $$$$it on notes?]  $$Sec. 102(b):  $$$NOT an idea, procedure, process, system, method $$of operation, concept, principle, or discovery    '$$$$basic dichotomy of copyright: expression of ideas$$(yes); ideas themselves (no)  '?  ?K$$sec. 105: [works of the U.S. govt.]  KW Wc$(e) How long does copyright last?  co o{$$ [sec. 302, for copyrights effective after the effective date of$the 1976 Act (1/1/78)] { $$ life of author plus 50 years; 75 years if work for hire  $$why does copyright last so much longer than patent?  $$V  π  EE $'  'VIP 97 Class No. 140 '  '0%0  '  '01. Introduction to copyright policy basis:  $(a) Three kinds of philosophical basis are mentioned: ' '3$$natural right of author 3? ?K$$personhood of author  KW  Wc$$social welfare costbenefit analysis (utilitarianism) co o{$(b) In this country, costbenefit analysis has been the most prevalentrationale {$$(1) Go back to Constitution: The policy is to grant timelimitedmonopolies sufficient to provide incentives to Authors [=publishers] to produceenough writings to promote progress of science$$(2) Island of monopoly in the sea of public domain? Recall discussionon first day of class (the Big Question about the dividing line between the publicdomain and private property in intellectual productions):  $$If no knowledge and information is in the public $$domain for people to appropriate freely and use, then $$no new knowledge can be produced (so we won't have any#$$thing for IP to attach to)#//;$$$But if all knowledge and information is in the;G$$public domain for people to appropriate freely and use,GS$$then we might have underproduction of new knowledgeS_$$(because arguably people won't produce it unless they_k$$can reap the benefits)kww$$(3) Describe the standard economic story re Copyrights: [too$little will be published unless first publishers can have a$monopology to exclude subsequent publishers for X years] $$!$$$Is this true? [Depends on empirical factors? which"$$ones?]#$$$$$$$$esp. these: %& $$$$what is X?; '!("$$$$ extent of excess of first copy cost over)#$$$$$subsequent copy cost;*$+%+$$$$ extent of lead time to first,&+7$$$$$publisher; -'7C$$$$.(CO$$$$extent of costs of implementing/)O[$$$$$a P system in this field0*[g1+gs2,s2. Introduction to Copyright the institution:3-J4. 9.FF $J$(a) The paradigm activity forbidden by copyright is for publisher B to copy'  'and sell a book produced and sold by publisher A00 '  '01$$(1) Copyright developed in conjunction with the rise of print (whenbooks had to be hand copied by scribes rampant copying was not a problemprobablythere was too little copying, not too much)45$$$copyright began as benefit for publishers, not6$$authors (321), and, arguably, it still is78$$(2) Now look at sec. 102(a) of the 1976 Act (Supp 125): the$categories after books [now literary works] came successively later andfit the paradigm less well. ;C <CO$(b) The evil is copying, not merely coming up with the same thing =O[ >[g$$Look at sec. 106: the copyright owner is the only one ?gs$who can authorize making (1) and distribution (3) of copies @sA$$$it doesnt say the copyright owner would have toB$$authorize anyone else who happened to write the sameC$$thing, though [and distribute it]DE$$$contrast with patent: the owner has the exclusiveF$$right to make and sell the invention [that means you canG$$stop other people from making it]HI$$$means prima facie case of copyright infringementJ$$includes showing that the defendant copied [often you canK$$infer it if the works are identical and sometimesL$$publishers include a few mistakes to see if they getM$$reproduced]N'O'3$$$does this mean only literal copying is covered?P3?Q?K$$$$No (though it did originally):RKW SWc$$$$$derivative works!Tco$$$$$plot elements (that are judged expressive)"Uo{$$$$$compilations (whose organization is#V{$$$$$$judged original)$W%X$(c) copyright is about objects ("copies")&Y'Z$$$fixed in a tangible medium of expression([)\$$$$what does this mean? (Sec. 101, Supp 121)*]+^$(d) copyright is about originality,_-`$$$original work of authorship [in one of the named$$$$categories][sec. 102(a)].b/c#$$$$ What is meant by originality?0d#/1e/;2f;G$(e) What kinds of things arent covered by copyright? [what is the scope of6 G9gGG_ $6public domain]hGoio{$$Sec. 102 (a):j{k$$(1) things that are unoriginallm$$$includes facts no$$$$[problem with databases?] p q$$(2) things that arent fixed r s$$$improvisations tu $$$performance [unrecorded]v $$$w#$$$$If you go to a concert with a tape recorder in yourx#/$$$pocket, whose copyright do you violate?y/;z;G$$$telephone conversations{GS|S_$$$speaking face to face}_k~kw$$$$my lecture today [though what if Im reading it?$$$$basing it on notes?]w$$$problems with digital transmission?$$(3) Not "ideas" [i.e. major distinction from patent] see Sec.$102(b):$$$NOT an idea, procedure, process, system, method$$of operation, concept, principle, or discovery $$$$basic dichotomy of copyright: expression of ideas$$(yes); ideas themselves (no)!"$$(4) sec. 105: [works of the U.S. govt.]#+$+7$$(5) In addition, some things that are covered by copyright will besubject to "fair use" as an affirmative defense%7O&O[$(e) How long does copyright last? '[g(gs$$ [sec. 302, for copyrights effective after the effective date of$the 1976 Act (1/1/78)])s$$*$$ life of author plus 50 years; 75 years if work for hire+,$$$$there are still copyrights extant under the 1909-$$$act which gave 28 years plus 28 years renewal term.$$$(i.e. anything copyrighted between 1941 and 1977)/03. How does the institution square with the rationale(s)?12$$why does copyright last so much longer than patent?3J4 9HH $J$$why has the time gotten progressively longer?++7$$why are all kinds of works given the same time of coverage?7CCO$$how can coverage of derivative works square with the needO[$$$for public domain to create new works?[ggs4. Consider originality:s $(a) First notice that copyright originality isn't anything like patentoriginality look at Alfred Bell v. Catalda Fine Arts (33)  $$Ct holds that reproductions of (uncopyrighted) works $of fine art can be copyrightedwhy? $$$"originality in this context means little more than$$a prohibition of actual copying" (331)$$$but it appears from last paragraph that some$$modicum of "creativity" is required (331)$$Consider Q 3 on p. 332 [what policy basis could there be for'$high standard of patent originality and low standard of copyright'3$originality?]3??K$(b) Since the originality requirement is so minimal, can we just do away withit and protect against copying? Consider Feist (334)Kcco$5. Problem with directories, databases, historical research, news and maps[facts but lots of work to gather them]o$$[Recall AP v. INS no copyright but taking news$stories gathered by someone else could amount to unfair$competition under state law] $$ Some courts were willing to reward sweat of the brow in factcompilations (3323) but this tendency was squelched by S.Ct. in Feist in1991[copyright is not a tool by which a compilation author may keep others fromusing the facts or data he or she has collected]!"$$Think about these questions: If we want to protect# $sweat of the brow in databases, etc., can Congress overrule$ $Feist? Should we look for some tool other than copyright?%#&#/6. Look into Feist (334).'/;(;G$(a) Facts: Rural Telephone Co. is a public utility that puts out a standardtelephone directory, with white pages and yellow pages. They make lots of moneyfrom selling advertising in the yellow pages. Feist publishes a competing directorywith white pages and yellow pages. It gathers together white page information from11 telephone companies in northwest Kansas. Feist competes with Rural to selladvertsing for the yellow pages.)G*$Feist approached each of the 11 telcos and offered to pay to use the whitepage info. All agreed except Rural [ = holdout]. [Later case holds that Ruralsholdout was unlawfully monopolistic; question: how could district ct do this unlessit assumed the copyright was invalid, contrary to its own decision in this case?] 6 9II $6Feist used the information anyway (3345); and Rural sued for copyrightinfringement. Summary judgment for Rural in lower courts.$(b) Compilations of facts are copyrightable (336) (see def. on Supp p. 120)and Sec. 103(a).#$(c) But the copyright is thin. (336) Explain.#//;$$It may seem unfair (336); why isnt it?;GGS$(d) What exactly is the basis of cts holding? Three parts:  S_ _k$$(1) facts are unoriginal (no matter how hard you work to get them)and  k $$(2) originality is required  $$$((a) its in the statute, $$$(b) its constitutionally required to be there; and $$(3) compilations of facts can be original iff the selection or$arrangement is original$(e) Unpack this. $$First, explain why facts are unoriginal.+$$$ Originality involves creativity(creative $$spark,335, 338); facts are out there waiting to be $$found (336firmdistinction between creation and+O$$$discovery) O[[g$$Next, explain why this compilation is unoriginalgss$$$$(338) there is nothing remotely creative$$$about arranging names alphabetically... $$Now, explain why originality is constitutionally required.!$$[Does this ct even have to reach this question?]"#$$$$Does copyright clause say this?$$$$$%$$$$$Do precedents say this?&'7. Return to questions: If we want to protect sweat of the brow in databases,etc., can Congress overrule Feist? ()  Should we look for some tool other than copyright? [NB 339 n. 5]* '+ '3[Should we want to protect sweat of the brow in databases?], 3?- ?K8. Consider problem 41 (341). [Bellsouth v. Donnelley, 999 F.2d 1436 (11th Cir.1993)].Kc/coNEXT: Fixation; formalities; idea/expression dichotomy; (nonfunctionality)/usefularticles; length of term; scope of rights (1st part)[341389; 390 439]J0o {9JJ $Jܿ $$V ǀ0KK $'  'VIP 97 Class No. 15 [cancelled]b LL $'  'bIP 97 Class No. 16$ '  '$&0  '  '0#1. Consider originality:#//;$(a) First notice that copyright originality isn't anything like patentoriginality look at Alfred Bell v. Catalda Fine Arts (33);S S_$$Ct holds that reproductions of (uncopyrighted) works!_k$of fine art can be copyrightedwhy? "kw #w$$$"originality in this context means little more than $$$a prohibition of actual copying" (331) % &$$$but it appears from last paragraph that some'$$modicum of "creativity" is required (331)()$$Consider Q 3 on p. 332 [what policy basis could there be for*$high standard of patent originality and low standard of copyright+$originality?],-$(b) Since the originality requirement is so minimal, can we just do away withit and protect against copying? Consider Feist (334)/0$2. Problem with directories, databases, historical research, news and maps[facts but lots of work to gather them]2737C$$[Recall AP v. INS no copyright but taking news4CO$stories gathered by someone else could amount to unfair5O[$competition under state law]6[g7gs$$ Some courts were willing to reward sweat of the brow in factcompilations (3323) but this tendency was squelched by S.Ct. in Feist in1991[copyright is not a tool by which a compilation author may keep others fromusing the facts or data he or she has collected];s<$$Think about these questions: If we want to protect=$sweat of the brow in databases, etc., can Congress overrule >$Feist? Should we look for some tool other than copyright?!?"@3. Look into Feist (334).#A$B$(a) Facts: Rural Telephone Co. is a public utility that puts out a standardtelephone directory, with white pages and yellow pages. They make lots of moneyfrom selling advertising in the yellow pages. Feist publishes a competing directorywith white pages and yellow pages. It gathers together white page information from11 telephone companies in northwest Kansas. Feist competes with Rural to selladvertsing for the yellow pages.%H?&I?K$Feist approached each of the 11 telcos and offered to pay to use the whitepage info. All agreed except Rural [ = holdout]. [Later case holds that Ruralsholdout was unlawfully monopolistic; question: how could district ct do this unlessit assumed the copyright was invalid, contrary to its own decision in this case?] Feist used the information anyway (3345); and Rural sued for copyrightinfringement. Summary judgment for Rural in lower courts.'OK(P$(b) Compilations of facts are copyrightable (336) (see def. on Supp p. 120)6 9QMM $6and Sec. 103(a).RS$(c) But the copyright is thin. (336) Explain.TU$$It may seem unfair (336); why isnt it?VW$(d) What exactly is the basis of cts holding? Three parts: XY$$(1) facts are unoriginal (no matter how hard you work to get them)and  [3 \3?$$(2) originality is required  ]?K ^KW$$$((a) its in the statute,  _Wc`co$$$(b) its constitutionally required to be there; and ao{b{$$(3) compilations of facts can be original iff the selection or$arrangement is originalde$(e) Unpack this. fg$$First, explain why facts are unoriginal.hi$$$ Originality involves creativity(creative $$spark,335, 338); facts are out there waiting to be $$found (336firmdistinction between creation andl$$$discovery) m n $$Next, explain why this compilation is unoriginalo#p#/$$$$(338) there is nothing remotely creativeq/;$$$about arranging names alphabetically...r;GsGS$$Now, explain why originality is constitutionally required.tS_$$[Does this ct even have to reach this question?] u_k!vkw$$$$Does copyright clause say this?"ww$$$$#x$$$$$Do precedents say this?$y%z4. Return to questions: &{'|$If we want to protect sweat of the brow in databases, etc., can Congressoverrule Feist? (~) Should we look for some tool other than copyright? [NB 339 n. 5]*+$[Should we want to protect sweat of the brow in databases?],-5. Consider problem 41 (341). [Bellsouth v. Donnelley, 999 F.2d 1436 (11th Cir.1993)].+/+76. Also note that the uncopyrightability of facts poses a problem for the"discoveries" of historians see (362 n. 2) [no copyright on historical research]07O1O[7. Fixation:J2[g [9NNg $Jܿw$(a) Note that fixation refers to any tangible medium$$problem w/ "copies" in computer memory (343)$$[this is serious]$(b) Note that fixation is required for federal protection, but state law(common law copyright) can apply to unfixed works$(c) Note (sec. 101) [Supp (121)] fixation can occur simultaneously w/transmission, but only counts if under authority of the author [(?)]  $(d) Apply these principles to Problem 42? (345)  $$$[Also note: new sec. 1101 added by the GATT implementation actmakes it infringement to fix musical performances w/o authorization orto copy, transmit, or traffic in unauthorized recordings of musicalperformances]# O~.#O[8. Formalities (345)[ggs$(a) notice of copyrights$$no longer required after Berne ratification (1989); but note$earlier regimes for earlier copyrights$(b) publication of the work$$no longer determines validity after Berne ratification (but stillrelevant for earlier schemes) [federal copyright now covers$work from moment of creation]; publication still has consequences$other than validity [see list on (348)]$(c) registration of the work with the Copyright office$$never determined validity, BUT'$'3$$$is still prima facie evidence of validity 3?!?K$$$is still required prior to bringing infringement action"KW$$$$(thought after Berne only for U.S. owners)(350)#Wc$co$$$and also, must register promptly in order to preserve%o{$$$$right to statutory damages and attorneys fees (350)&{$$$$[sec. 412]'($(d) deposit of a copy with the Library of Congress (350))*$$see sec. 407+,9. Ideas "vs." expression:-.$(a) Consider sec. 102(b): what is its purpose?/0$$distinguish from patent? [why?]1 2 $(b) Baker v. Selden (352):J3# 9OO# $J$$3?$$ Facts: Selden developed a method of bookkeeping that enabled one tosee summaries of financial results. He wrote books explaining it and included formsin his books. He claimed copyright for the books. Defendant Baker publishedcompeting forms for the same Selden system, using a different arrrangement of thecolumns and using different headings. (353) Baker makes and uses accountbooksarranged on substantially the same system (353)?‡‡“$$Held: Baker doesn't violate Selden's copyright. Explain“ŸŸ«$$$(1) Selden doesn't own the system, just the particular«·$$way he explained it. If he wanted to own the system itself,·$$he would have had to patent it. [idea vs. expression of idea] $$$(2) Because he doesn't own the system, anyone can $$use it. And in using it they must necessarily use forms that $$are substantially similar. (354)    $$$$Therefore the forms are not copyrightable. $$$[Why?] [They are part of the system, part of the idea;#$$$not merely one way to express the idea?]#//;$$$$Blank account books are not the subject of;G$$$copyright (356)GSS_$(c) See (358 n. 4): copyright regs. make blank forms uncopyrightable (do notin themselves convey information)_wwÃ$$$Consider problem 44:ÃÏÏÛ$$$$instructions are probably copyrightableÛç$$$$not the doctor's name and address (those are$$$$$facts)çÿ$$$$list of diseases *might* be creative (though notÿ$$$$$if it tracks insurance reimbursement$$$$$categories)$(d) What if information is conveyed but there is really substantially only oneway or a few ways to convey it? [might be an alternative way to look at Selden'sforms]. Consider Morrissey (358): $$$Facts: Morrissey copyrighted a set of rules for a salespromotional contest. Procter & Gamble ran a contest with substantially thesame rule 1 (35960). Morrissey alleged that Procter & Gamble copied. Trialct gives defendant summary judgment.#!OZ.#"O[$$$Trial ct says Baker v. Selden means substance of#[g$$contest is not copyrightable (yes); therefore that$gs$$rules springing from the substance aren't copyrightable%s$$(not so fast)(360).&ċ'ċė$$$$more than one way to express even this(ėģ$$$simple substance (360))ģį*įĻ$$$$nevetheless, defendant wins: why? (3601)+Ļ,$$$$$if one person can copyright only aJ- Ӏ9PP $J$$$$few methods of expression and thereby lock$$$$up the idea, public will lose$$$$$this is known as merger doctrine (361 n.1)+$(e) See also (362 n. 5): no copyright for standard incidents, characters, orsetting.+CCO$(f) Are recipes copyrightable?O[ [g10. Of course, the problem with ideas "vs." expression is that it's not really adichotomy, but a continuum. (See 357 n. 3) [Learned Hand]. Defendant will arguethat idea is very detailed and covers lots of specifics; plaintiff will argue thatidea is very general and all the specifics are due to plaintiff's creativeexpression. [Professor Goldstein suggests (3578) that courts engage in a rough sortof balancing...]  gů  ůŻ$$This is a serious problem for computer programs too [later] Ż $$Consider problem 45 (363)$$$ $NEXT: (nonfunctionality)/useful articles; length of term; scope of rights 363 438]'V'3 '8QQ3 $'  'VIP 97 Class No. 170COC'  '0'0O[O '  '01. Ideas "vs" expression [cont'd][ggs$(a) What if information is conveyed but there is really substantially only oneway or a few ways to convey it? [might be an alternative way to look at Selden'sforms]. Consider Morrissey (358):sƗƗƣ$$$Facts: Morrissey copyrighted a set of rules for a salespromotional contest. Procter & Gamble ran a contest with substantially thesame rule 1 (35960). Morrissey alleged that Procter & Gamble copied. Trialct gives defendant summary judgment.##ƣZ.#$$$$Trial ct says Baker v. Selden means substance of %$$contest is not copyrightable (yes); therefore that &$$rules springing from the substance aren't copyrightable '$$(not so fast)(360). ( )$$$$more than one way to express even this*'$$$simple substance (360)+'3,3?$$$$nevetheless, defendant wins: why? (3601)-?K.KW$$$$$if one person can copyright only a/Wc$$$$few methods of expression and thereby lock0co$$$$up the idea, public will lose1o{2{LJ$$$$$this is known as merger doctrine (361 n.1)3LJǓ4Ǔǟ$(b) See also (362 n. 5): no copyright for standard incidents, characters, orsetting [scenes a faire]6ǟǷ7Ƿ$(c) Are recipes copyrightable?892. Of course, the problem with ideas "vs." expression is that it's not really adichotomy, but a continuum. (See 357 n. 3) [Learned Hand]. Defendant will arguethat idea is very detailed and covers lots of specifics; plaintiff will argue thatidea is very general and all the specifics are due to plaintiff's creativeexpression. [Professor Goldstein suggests (3578) that courts engage in a rough sortof balancing...]?#@#/$$see also 377 (structure sequence and organization)A/; B;G$$$This is a serious problem for computer programs too$$$[later]!DG_"E_k$$Consider problem 45 (363)#Fkw$Gwȃ3. Useful articles "vs" works of art: Brandir (365)%Hȃȏ&Iȏț$sec. 101'Jțȧ(Kȧȳ$(a) Facts: David Levine created abstract wire scupltures, later reworkedthem so that they could be used as bicycle racks, and started up a company (Brandir)to produce and sell them. The rack won an Industrial Designers Society of Americadesign award, and was selected for a gallery exhibition entitled "The Product ofDesign" Cascade Pacific copied the product. Brandir tries to register the6 9PRR $6copyright so he can sue Cascade Pacific but copyright office won't take it (368)Qȳ R $(b) Issue: no independent existence as a PCS work apart from its function asa useful articleT/U/;$(c) Plaintiff says: my scultures were copyrightable; they should becomeuncopyrightable just because I use them as bicycle racks. This can stand on its ownas minimalist art (some people don't realize it's a bicycle rack).X;_Y_k$(d) What is the legal test for whether a useful article can also becopyrighted as a work of art? [the artistic aspect must be separable from itsutilitarian aspect] \kɏ]ɏɛ$$the borderline with patent [the utilitarian aspect can be$patented, and we don't want unpatentable utilitarian items to be _ɛɳ$copyrightable as works of art] `ɳɿ aɿ$$moreover, design patent is specifically available for b$industrial designs cd$(e) How will court decide whether the artistic aspect is separable from theutilitarian? (372)fg$$physical separability [i.e., you can cut off or peel off the workh$of art]i+j+7$$conceptual separability k7ClCO$$$reasonable observer can perceive an aesthetic conceptmO[$$not related to the article's use [dissent in Brandir]n[gogs$$$"product of industrial design" [majority in$$Brandir][intent of creator to make a useful article?][formqsʋ$$is influenced by utilitarian concerns?]rʋʗsʗʣ$$$Goldstein stand alone test (373)tʣʯuʯʻ[How would Goldstein decide Brandir?]vʻw$Prob. 49 [Carol Barnhart case x!y$Prob. 47 [Mickey Mouse phone]"z#{4. No copyright in govt. works (374)$|%}$$what's a govt. work?&~'''3$$doesn't mean govt. can't own a copyright(3?)?K5. What rights does copyright include? *KW+Wc$LOOK at sec. 106,co-o{$see p. 408.{ˇ/ˇ˓$NOTE not all the different kinds of works have all of the rights therefore it becomes important to classify what species of work it is [problem as6 ˟9SS˷ $6everything becomes digitized]˓6. Classifying works (377):$(a) literary works includes anything expressed in words or numbers fixedin any medium$$includes characters and plot [SSO] if detailed'$$includes computer programs [but not what they DO, just how '3$they're written down] 3? ?K$(b) PGS (378) KW Wc$$2or 3dimensional [anything that stays still if it moves it'scosomething elseo{{̇$$$applied art OK [but significantly limited by utilitariaṅ̓$$function exception]̟̟̫̓$(c) architectural works̷̷̫$$Does the architect copyright the drawings? or the house itself?$[If someone builds a copy house from his own drawings, what $happens?]$$$previously copy house itself was OK, under Baker$$v. Selden $$$this was changed in 1990 (379] #$$$$now see sec. 101#//;$$$Is this protection subject to utilitarian function ;G$$inseparability limitation on PGS works?!GS"S_$$$$No; but something silimar? (380)#_k$kw$(d) dramatic, pantomime, choreographic (381)%w̓&̓͏$$$protection for fixed instructions on how to perform'͏͛$$a work [either written or filmed](͛ͧ)ͧͳ$$$important to distinguish between literary, musical*ͳͿ$$and dramatic works [protection for performance and display+Ϳ$$differs] ,-$$$$consider problem 413./$(e) musical works and sound recordings (382)01$$$musical work not the same thing as sound recording23+$$$$Hey Jude example (382)4+757C$$$$$[cover compulsory license for musical work]6CO7O[$(f) motion picture and other audiovisual worksJ8[g [9TTg $Jܿw΃$$see def. in sec. 101 [sound track is part of audiovisual work andtherefore is not a musical work or a sound recording]΃ΛΛΧ$$$no cover compulsory license [unlike musical work]Χγγο$$$does have public performance right [unlike sound$$$$recording]ο$(g) derivative works and compilations (384)  $$what is a compilation?  $$$sec. 101 ++7$$$includes collective works [come back to this]7CCO$$what is a derivative work? (384) [come back to this]O[[g7. Roth Greeting Cards (386): is this a case about compilation?gss$(a) Facts: Roth developed greeting cards. Messages were "I wuv you," "Imiss you already...and you haven't left yet" etc. Accompany art work was cutemoppet; boy sitting on a curb weeping. United produced greeting cards with samemessages and similar artwork and layout.ϯϯϻ$(b) Court below held this wasn't infringement (386):ϻ$$textual matter is uncopyrightable [why?]$$art work didn't infringe$(c) This court? "total concept and feel" [taking everything together thetotality is copyrightable]'$(d) Is Roth still good law after Feist? (388 n. 2)'3 3?$$see also West Publishing (problem 414 (389)!?K"KW8. Ownership: [Later: transfer]#Wc$co$(b) On the issue of who owns the copyright when it comes into%o{being [see sec. 201]&{Ї'ЇГ$$(1) the Author; with big exception for works made for hire [contrastwith patent](ГЫ)Ыз$$$what if the Author is plural? [joint work]{201(a) 2d*з$$$$sentence][like tenancy in common] (see 399)+,$$$$$turns on intent of each other that-$$$$contributions be merged./$$$$$ plus, each must contribute indepedently0 $$$$copyrightable material1 J2# 9UU# $J$$$$$$$see problem 417 (400)$$$$$$[Erickson v. Trinity Theatre (399)3KKW$$$can there be coownership without jointWc$$$$authorship? [sure; transfer...]coo{$$(2) When a work comes into being there can be divided{ч$ownership of the copyright in a different sense:чѓѓџ$$$derivative work: copyright in the underlying џѫ$$work is still owned by 1st author [2d author is infringing ѫѷ$$if doesn't get permission] ѷ $$$collective work (sec. 201(c)): copyright in the  $$individual contributions remains with each author, $$absent agreement    $$(3) works made for hire (201(b): how do we know when a work isprepared for an employer or other person? see definition (sec. 101)//;6. Consider CCNV v. Reid (390);GGS$(a) Facts: CCNV conceived idea for sculpture, 3d world america, todramatize plight of homeless black families in D.C., commissioned Reid to executeit. They told him what to do, provided pedestal, etc. They gave it back to him forrepairs and then he claimed copyright and wouldnt return it (392). [Does he haveto return the sculpture? Who owns the copyright?]Sҏҏқ$(b)Argument that CCNV owns the copyright? [They areқҧ$person for whom the work was prepared; it was theirҧҳ$idea; they exercised control over the work]ҳҿҿ$(c)Argument that Reid owns the copyright? [not an$employee; sculpture not within special classes of$ commissioned works that count as works for hire... (sec 101)  !$(d)Why these commissioned works and not others?!""#$$$What is meaning of scope of employment?#$$$[federal common law of agency (3934)]$%+%&+77. Scope of work for hire doctrine:&'7C'(CO$(a) Many people hired to produce works turn out to be independentcontractors.(*Og)+gs$$$If contract provides that work is a work for hire and *,s$$copyright will belong to the employer, will this make it so?+-Ӌ,.Ӌӗ$$$What should hiring party do? [assign copyrightsee-/ӗӣ$$(398 n. 4)].0ӣӯ/1ӯӻ$(b) OTOH, many people who consider that they own their works are teachers,and it looks like their publishing is done within the scope of their employment [seeteacher exception (398)]V04ӻ Ӏ94VV $'  'VIP 97 Class No. 1805'  '0(06 '  '071. Classifying works (377)[cont'd]:89+$(a) literary works:+7$;7C$(b) PGS (378)<CO =O[$(c) architectural works >[g ?gs$(d) dramatic, pantomime, choreographic (381) @s Aԋ$$$protection for fixed instructions on how to performBԋԗ$$a work [either written or filmed]CԗԣDԣԯ$$$important to distinguish between literary, musicalEԯԻ$$and dramatic works [protection for performance and displayFԻ$$differs] GH$$$$consider problem 413IJ$(e) musical works and sound recordings (382)KL$$$musical work not the same thing as sound recordingMN'$$$$Hey Jude example (382)O'3P3?$$$$$[cover compulsory license for musical work]Q?KRKW$(f) motion picture and other audiovisual worksSWc Tco$$see def. in sec. 101 [sound track is part of audiovisual work andtherefore is not a musical work or a sound recording]!VoՇ"WՇՓ$$$no cover compulsory license [unlike musical work]#XՓ՟$Y՟ի$$$does have public performance right [unlike sound$$$$recording]%[ի&\']$(g) derivative works and compilations (384)(^)_$$what is a compilation?*`+a $$$sec. 101,b -c#$$$includes collective works [come back to this].d#//e/;$$what is a derivative work? (384) [come back to this]0f;G1gGS2. Roth Greeting Cards (386): is this a case about compilation?2hS_3i_k$(a) Facts: Roth developed greeting cards. Messages were "I wuv you," "Imiss you already...and you haven't left yet" etc. Accompany art work was cutemoppet; boy sitting on a curb weeping. United produced greeting cards with samemessages and similar artwork and layout.J4mk֛ ֏9mWW֛ $Jܿnַ֫$(b) Court below held this wasn't infringement (386):oַp$$textual matter is uncopyrightable [why?]qr$$art work didn't infringe [why do you suppose it didn't?]st$(c) This court? "total concept and feel" [taking everything together thetotality is copyrightable]v w#$(d) Is Roth still good law after Feist? (388 n. 2) x#/ y/;$$see also West Publishing (problem 414 (389) z;G {GS3. Ownership: [Later: transfer]|S_}_k$(a) On the issue of who owns the copyright when it comes into~kwbeing [see sec. 201]w׃׃׏$$(1) the Author; with big exception for works made for hire [contrastwith patent]׏קק׳$$$what if the Author is plural? [joint work]{201(a) 2d׳׿$$$$sentence][like tenancy in common] (see 399)׿$$$$$turns on intent of each other that$$$$contributions be merged$$$$$ plus, each must contribute independently$$$$copyrightable material$$$$$$$see problem 417 (400)$$$$$$[Erickson v. Trinity Theatre (399)77C$$$can there be coownership without joint CO$$$$authorship? [sure; transfer...]!O["[g$$(2) When a work comes into being there can be divided#gs$ownership of the copyright in a different sense:$s%؋$$$derivative work: copyright in the underlying&؋ؗ$$work is still owned by 1st author [2d author is infringing'ؗأ$$if doesn't get permission](أد)دػ$$$collective work (sec. 201(c)): copyright in the*ػ$$individual contributions remains with each author,+$$absent agreement,-./$$(3) works made for hire (201(b): how do we know when a work isprepared for an employer or other person? see definition (sec. 101)01'4. Consider CCNV v. Reid (390)2'333?$(a) Facts: CCNV conceived idea for sculpture, 3d world america, todramatize plight of homeless black families in D.C., commissioned Reid to execute6 K9XX? $6it. They told him what to do, provided pedestal, etc. They gave it back to him forrepairs and then he claimed copyright and wouldnt return it (392). [Does he haveto return the sculpture? Who owns the copyright?]?ًًٗ$(b)Argument that CCNV owns the copyright? [They areٗ٣$person for whom the work was prepared; it was their٣ٯ$idea; they exercised control over the work]ٯٻٻ$(c)Argument that Reid owns the copyright? [not an$employee; sculpture not within special classes of$ commissioned works that count as works for hire... (sec 101)  $(d)Why these commissioned works and not others?  $$$What is meaning of scope of employment? $$[federal common law of agency (3934)]''3$(e) Even if Reid owns the copyright, does have have to return the sculpture?[see sec. 202]3KKW5. Scope of work for hire doctrine:Wcco$(a) Many people hired to produce works turn out to be independentcontractors, to the suprise of the hiring partyoڇڇړ$$$If contract provides that work is a work for hire and ړڟ$$copyright will belong to the employer, will this make it so?ڟګګڷ$$$What should hiring party do? [assign copyrightseeڷ$$(398 n. 4)]$(b) OTOH, many employees who do meet the definition and haven't contractedout of it do think they own their own works: consider teachers (publish or perish)[see teacher exception (398)] 6. Duration and renewal (401404): read on own #7. Now turn to transfer #/!/;$(a) What happens if you transfer ownership in your copyright? ";G#GS$$[see 201(d)(1)] $S_%_k$$[must be in writing unless by operation of lawstatute of frauds seesec. 204(a)]&kۃ'ۃۏ$(b) What happens if you're a joint author and transfer ownership of your co  owned copyright? (ۏۧ)ۧ۳$$[201(a) joint authors are tenants in common analogize with rulesof real property transfers]*۳+$(c) What happens if you attempt to transfer only the display right and keepall the other rights to yourself? ,-$$[see 201(d)(2) divisibility.J/ 9YY $J$$$[note this was more problematic under the 1909 Act$$$(406)]#;;G$(d) What happens if you don't actually transfer the right but you grant anonexclusive license? [i.e. you keep right and you can also license others]G__k$$this is not in definition of transfer and therefore doesn'tkw$$have to be in writing; can be oral or implied [but some statesw܃$$have statutes of frauds; not clear whether copyright act will܃܏$$preempt in that case]܏ܛ ܛܧ$(e) Can you mortgage a copyright? ܧܳ ܳܿ$$[See definition of transfer, sec. 101 (Supp 123)] ܿ $(e) The only limit on alienability is sec. 203 (termination of transfers) see summary on (407). Authors or their heirs can cancel transfers and bargain againanytime between year 35 and year 40.$$What is the purpose of this provision?$$Result in practice?++7$[(f) Note that foreign copyrights may have other inalienabilities, notablyinalienable moral rights.]7OO[$[(g) Note special protection against governmental seizure (sec. 201(e))  Title 11 = bankruptcy)[ss$$$What is the purpose?݋݋ݗ$$$Does it mean U.S. can't take in eminent domain?]ݗݣݣݯ8. Move on to examination of bundle of rights and how they are infringed:ݯݻfirst consider reproduction (copying)ݻ$(a) What constitutes copying? [see leg. history (409)] $$test is "substantial similarity"!"$(b) How will copying be proved?#$ $$direct evidence (e.g. confession; eyewitnesses)% '& '3$$indirect evidence:' 3?( ?K$$$access plus "substantial similarity" [not the same degree$$as in what constitutes copying, though would it be more or$$less? depends what other evidence there is])Ko*o{$$$$if we know *for sure* that defendant had no+{އ$$$opportunity to read or hear plaintiff's work, then even,އޓ$$$if defendant's work is identical we have to conclude-ޓޟ$$$it's just coincidence. OTOH, if defendant's work is.ޟޫ$$$identical, we're likely to think it is copied and even/ޫ޷$$$tend to infer there must have been access0޷J1 À9ZZ $J$$$$see (415 n. 2): 2d Cir. lets jury infer access$$$if defendant's work is strikingly similar; 7th Cir.$$$requires some prima facie case of access$$$$it's much easier to prove copying if the$$$original has some boobytraps (see (416 n. 4)''3$$$$it's much better for defendants if they 3?$$$can prove no access (see (416 n. 5)) !?K "KW$(c) We can see court doing this in Arnstein v. Porter (410) #Wc $co$$Facts: Arnstein was litigious composer of popular music. He suedCole Porter re "Begin the Beguine," "Night and Day," etc.  &o߇'߇ߓ$$$What was plaintiff's evidence on access?(ߓߟ)ߟ߫$$$$physical access?*߫߷+߷$$$$similarities of the works?,-$$Ct below granted summary judgment for Porter. What result onappeal?/0$$$Evidence on access seems fantastic, but let jury decide1 2 $$$Works seem similar enough for jury to decide they3#$$are copied [i.e. can't say no reasonable jury could hold them4#/$$to be copied like Shostakovich 5th symphony & When irish5/;$$eyes are smiling (412)6;G7GS$$$$Why does ct say testimony of experts will8S_$$$be irrelevant? (413)9_k :kw$$Dissent: On what point(s) did Judge Clark disagree?!;w"<$(d) Is any scienter required on copying? [no, see (415 n. 3)]#=$>NEXT: finish this chapter. at least get to 474 (1st part of fair use). musicguest on Friday 4/4%@&A$$V'B ˀ*B[[ $'  'VIP 97 Class No. 190C'  '00D '  '0E 1. Move on to examination of bundle of rights and how they are infringed [see sec.106]: first consider reproduction (copying)G #H#/$(a) This covers simple plagiarism (the original evil): what else?I/;J;G$ What constitutes copying [of protected expression]? [see leg. history(409)]LG_ M_k$$reproducing the work in whole or in any substantial part Nkw Ow$$test is "substantial similarity" [wide departures possible] P Q$(b) How will copying [of protected expression] be proved? We need twothings: (1) defendant copied the work; (2) defendant's copying is actionable(i.e., expression, not just ideas). What will be evidence on (1)?TU$$direct evidence (e.g. confession; eyewitnesses)VW$$indirect evidence:XY$$$access plus "substantial similarity" [not the same degree$$as in what constitutes infringement, though would it be more$$or less? depends what other evidence there is]\]+$$$$if we know *for sure* that defendant had no^+7$$$opportunity to read or hear plaintiff's work, then even_7C$$$if defendant's work is identical we have to conclude`CO$$$it's just coincidence. OTOH, if defendant's work isaO[$$$identical, we're likely to think it is copied and evenb[g$$$tend to infer there must have been accesscgsds$$$$see (415 n. 2): 2d Cir. lets jury infer accesse$$$if defendant's work is strikingly similar; 7th Cir.f$$$requires some prima facie case of accessg h$$$$it's much easier to prove copying if the!i$$$original has some boobytraps (see (416 n. 4)"j#k$$$$it's much better for defendants if they$l$$$can prove no access (see (416 n. 5))%m&n$(c) We can see court doing this in Arnstein v. Porter (410)'o(p$$Facts: Arnstein was litigious composer of popular music. He suedCole Porter re "Begin the Beguine," "Night and Day," etc. )r'*s'3$$$What was plaintiff's evidence on access?+t3?,u?K$$$$physical access?-vKW.wWc$$$$similarities of the works?/xco0yo{$$Ct below granted summary judgment for Porter. What result onappeal?J1{{ ㇀9{\\ $Jܿ|$$$Evidence on access seems fantastic, but let jury decide}~$$$Works seem similar enough for jury to decide they$$are copied [i.e. can't say no reasonable jury could hold them$$to be copied like Shostakovich 5th symphony & When irish$$eyes are smiling (412)$(d) What about (2)? [Once copying is inferred, what will be evidence that itamounts to infringement?]  '$$$whether defendant took from plaintiff's works so much '3$$of what is pleasing to the ears of lay listeners that it amounts$$to wrongful appropriation 3K KW$$$$issue for jury unless no reasonable lay listenerWc$$$could find them copied [like Shostakovich 5th symphonyco$$$and When Irish eyes are smiling (412) [also ifo{$$$no reasonable lay listener could find them *not* copied]{$$$$Why does ct say testimony of experts will$$$be irrelevant? (413)$$$$$[subjective] reaction of lay listeners$$Dissent: On what point(s) did Judge Clark disagree?$(e) Is any scienter required on copying? [no, see (415 n. 3)]2. More on (2): what constitutes wrongful appropriation ("too much" copying)? Consider Sid & Marty Krofft (417)#$(a) Facts: Sid & Marty Krofft developed a children's TV show called H.R.Pufnstuf. An advertising agency approached them to license the characters forMcDonalds, but then did the McDonald's project without permission. The McDonald'scharacters and setting were very similar to the Pufnstuf characters and setting(421). Sid & Marty Krofft lost market share. The jury found this was copying andwrongful appropriation.#kkw$(b) Assume McDonald's did copy and Sid & Marty Krofft did lose market share. Does that automatically mean that defendant must pay? w!$$If the advertising agency consulted an attorney before it $wentahead with the project, what might the attorney have said?"#$(c) This court says the process of determining whether there is infringementinvolves two tests, one extrinsic and one intrinsic. What does this mean?$%$$Extrinsic = type of similarities needed to infer access?&'$$$[analytic dissection and expert testimony]()$$Intrinsic = type of similarities needed to judge wrongful*$$$appropriation? ++,+7$$$[response of ordinary reasonable person]-7CJ.CO C9]]O $J$$$$see 2d Cir. def. (424)_kkw$(d) So why was it of no avail for McDonald's to point out all the differencesbetween their characters and the Pufnstuf characters?w$(e) Another interpretation (see note 1 (423):$$Objective: similarity between the objective manifestations of$creativity [what are potentially protectable elements]$$Subjective: was there wrongful appropriation?  $(f) [(423 n. 2)]: In the subjective test does the fact finder compare thetwo works as a whole or only those elements that are protectable?  $$Which is better for plaintiff? defendant? +$$Which comports better with copyright principles?+77C$$Which is embodied in the ordinary observer test?COO[$(g) Consider problem 425 (427) [see Salinger v. Random House, Inc., 811 F.2d90 (2d Cir. 1987).[ss$$Does Salinger own copyright in the letters?$$Were the letters copied? $$$[If so, might it be a fair use? see later]3. The right to prepare derivative works:$(a) What is a derivative work? [see sec. 101 (Supp 121)]$$recast, transformed, adapted [original work of its own] $$$So why is McDonaldland a "copy" and not a derivative$$work?!'"'3$$$$Goldstein: derivative work is for different#3?$$$market (?) (431)$?K%KW$$$Why would it matter what you call it?&Wc'co$$$$owner might have licensed you for one and not$$$$the other(o)$$$$remedy: if "copies" then all profits to plaintiff;*$$$if derivative work then maybe apportion profits [but+$$$not ownership],-$(b) Why should copyright cover the right to prepare derivative works at all? [Don't we want new creators to be able to use what's out there to create newworks?][note Goldstein: "quiet revolution" (429)]./$(c) What is the situation if the creator of the original work also prepares aderivative work? [2 copyrights]J0  9^^ $Jܿ'$(d) What is the situation if the creator of the original work grants someoneelse the right to prepare a derivative work? [original creator still has copyrightto original work, second author has copyright for derivative work] [see sec. 103(b)]'KKW$(e) What is the situation if someone else prepares a derivative work withoutthe permission of the creator of the original work?[original creator still hascopyright to original work, and also has copyright for derivative work infringergets no ownership rights even though added original work and value [sec. 103(a)](perhaps may apportion profits, but plaintiff can get an injunction againstmarketing the work)]W$$Why should copyright do this? [Goldstein (433) "1976 Act hasnot been particularly discriminating"] $$$[see (437 n. 3)] $$$perhaps a smidgen of moral right? (438)  4. Consider the reach of derivative works:     $(a) Midway (433) holds that speededup video game is a derivative work##/$Why not like speededup record, which is not a derivative work? [answer: there's a market for speededup games, but not speededup records?]/GGS$$is this original work of its own under def. of derivativeS_$work? _k kw$(b) Mirage v. Albuquerque A.R.T. (442) holds that physically pasting a copyyou have purchased onto a tile constitutes a derivative work w $$see (442 n. 1): some courts hold that in order to be an$infringing derivative work the work you added must be $copyrightableexpression itself$$Does this square with the moral rights explanation? or what?5. To be infringing, must the derivative work infringe the original work in thesense of copying protected expression? see E.T. and Lokey from Maldamar (435)$[Yes ideas can be freely copied]6. Consider problem 427 (439) +!+7"7C#CO$O[NEXT: finish this chapter. at least get to 474 (1st part of fair use). musicguest on Friday 4/4%[sV& s sX3 __ $'  'VIP 97 Class No. 200!돀'  '00"뛀 '  '0H[Guest lecture on music copyright Richard Abramson (HEWM)]V# 맀#`` $'  'VIP 97 Class No. 210$À'  '0*0%π '  '01. The right to prepare derivative works:&'$(a) What is a derivative work? [see sec. 101 (Supp 121)]() $$recast, transformed, adapted [original work of its own]* +#$$Goldstein: derivative work is for different ,#/$$$market (?) (431) -/; .;G$$Why would it matter what you call it? /GS 0S_$$$$owner might have licensed you for one and not$$$$the other2_w3w$$$$remedy: if "copies" then all profits to plaintiff;4$$$if derivative work then maybe apportion profits [but5$$$not ownership]67$(b) What is the situation if the creator of the original work also prepares aderivative work? [2 copyrights]9:$(c) What is the situation if the creator of the original work grants someoneelse the right to prepare a derivative work? [original creator still has copyrightto original work, second author has copyright for derivative work] [see sec. 103(b)]=>$(d) What is the situation if someone else prepares a derivative work withoutthe permission of the creator of the original work?[original creator still hascopyright to original work, and also has copyright for derivative work infringergets no ownership rights even though added original work and value [sec. 103(a)](perhaps may apportion profits, but plaintiff can get an injunction againstmarketing the work)]DOEO[$$Why should copyright do this? [Goldstein (433) "1976 Act hasnot been particularly discriminating"] G[sHs$$$[see (437 n. 3)]IJ$$$perhaps a smidgen of moral right? (438)KL2. Consider the reach of derivative works:  M!N$(a) Midway (433) holds that speededup video game is a derivative work"O#P$Why not like speededup record, which is not a derivative work? [answer: there's a market for speededup games, but not speededup records?]$R%S$$is this original work of its own under def. of derivative&T$work?'U(V'$(b) Mirage v. Albuquerque A.R.T. (442) holds that physically pasting a copyyou have purchased onto a tile constitutes a derivative work)X'?*Y?K$$see (442 n. 1): some courts hold that in order to be an+ZKW$infringing derivative work the work you added must be $copyrightableexpression itselfJ,\Wo c9\aao $Jܿ]$$Does this square with the moral rights explanation? or what?^_3 To be infringing, must the derivative work infringe the original work in thesense of copying protected expression? see E.T. and Lokey from Maldamar (435)ab$[Yes ideas can be freely copied]cd4. Consider problem 427 (439)e f5. Now consider the distribution right (sec. 106(3)) g h$(a) allied to the right to copy i j'$(b) limited by the first sale doctrine sec. 109(a)k'3l3?$$What is the purpose of the first sale doctrine?m?KnKW$$$we don't like restraint on alienation?oWcpco$$$copyright owner has already received reward?qo{r{$$Does this mean that copyright owners can't collect royalties fromstores that purchase videos and then rent them out to $consumers?tu$$What about stores that rent out records or software? [thesev$folks got their own statute sec. 109(b)]wx$$And note that the first sale doctrine is undermined for cyberspaceif it is held that everything your computer does makes a copy (see (443 n. 2)z{$(c) What happens when copyright holder sells product to foreign company, whoturns around and imports the product back into the U.S. and sells in competitionwith the holder? [See Sebastian International (439)]~#$$ "once transfer of ownership has canceled the distribution#/$right to a copy, the right does not survive so as to be infringed /;$by importation" (442)!;G"GS$(d) Why didn't first sale doctrine immunize against liability in Mirage v.Albuquerque A.R.T.? [ct there held that defendant created derivative work][ if not,first sale doctrine would have applied][decision has been criticized not on firstsale grounds but on grounds of what is a derivative work see 4423 n. 1]#S$$(e) Consider problem 429 (444)%&6. Now consider public performance and public display rights (secs. 106 (4) and (5)'($(a) performance is for things that move and display is for things that staystill (444))*$(b) performance is a broader right, because 109(c) immunizes displays of aparticular copy to viewers at the place where the copy is located [but not broadcastor transmission over computer network] (445)+,$$What is situation if painting is shown at a gallery?-J.+ 9bb+ $J$$What is situation if TV broadcast covers the gallery;G$$$opening and shows painting on TV?GSS_$(c) But, no performance right in sound recordings [except,_k$those that are digitally transmitted (1995 amendment)]kww$$$Look at sec. 114(a)$$$NOTE: performance of sound recordings will still $$infringe the copyrights of the composers/publishers of $$the music recorded [sec. 114(c)]  $(d) Performance [and to a lesser extent display] are also subject to compulsory license in some cases [will discuss later]$(e) Both performance and display rights are limited to those performances ordisplays that are "public" [see sec. 101 (Supp 1223)$$any place open to the public [covers all TV broadcasts]+$$any place where a substantial number of persons are $gathered["outside of a normal circle of family/social acquaintances"]+CCO$$What about showing Mary Poppins in daycare centers?O[[g$$Will all performances and displays on the Internet be public?gss$(f) What is the situation with respect to playing the radio, recordings, orvideotapes in stores?$$1. Aiken (446): Ct in 1975 held no infringement if$store owner plays radio rationale?$$$inequitable why? $$$wholly unenforceable? !"$$2. Aiken is overruled by 1976 Act except, perhaps,#$for very small stores $%$$$put definition of public performance together&'$$with small exemption in sec. 110(5)''3(3?$$$$[litigation over the nature of receiving)?K$$$$$apparatus]*KW+Wc$$$$[playing radio in commercial establishment,co$$$generally makes you liable for royalties to holders of-o{$$$music copyright].{/$$$What about the rationales of Aiken?01$$3. So does Tower Records have to pay royalties to the2$composers of the music on the records it plays in the store?34$$$it would, if it weren't for sec. 110(7)5J6 ۀ9cc $J$$4. So does Tower Video have to pay royalties to the$movie companies for any videos it shows in the store?$$$yes (448 n. 2) [nothing analogous to sec. 110(7)]''37. Reconsider the daycare center playing Mary Poppins in light of sec. 110 is itcovered by sec. 110 (1)? [not unless it's a nonprofit educational institution anddaycare center is a place devoted to instruction]3WWc8. Consider exemption for performing works at charitable events [sec. 110 (4)]:co o{$only if admission is free or if proceeds go exclusively to { charity; and only if it's a nondramatic literary or musical work [no playsor movies or ballets]; and only if copyright owner does not object  $$except, 110(10): if you're a veteran's organization or $a nonprofit fraternal organization, you can do it over the$copyright owner's objection for any charitable social function$$$except, if you're a college fraternity or sorority,$$the social function has to be held solely for a specific$$charitable purpose 9. What do you think of sec. 110 (6)?: [exemption for nondramatic musical worksperformed by nonprofit agricultural or horticultural organization in the course ofan annual fair] //;10. In general copyright gives owner a property rule (can refuse to license). There are a few inroads of liability rules (compulsory licenses).;SS_$(a) Sec. 111 cable retransmission rules [cable systems can retransmitbroadcast TV over their systems and pay a royalty to the TV networks]_ww$(b) Sec. 119 satellite reetransmission for "unserved households"mustaccount to networks$(c) Sec. 115 right to "cover" previous recordings [copyright owner of musiccan't stop you but will be paid statutory fee]$(d) Sec. 116 right to operate a jukebox [copyright owner of music can'tstop you but will be paid statutory fee] $(e) Sec. 118 public broadcasting stations may broadcast some works subjectto compulsory license if voluntary K not reached [only applies to musical and PGSworks not plays, books, movies]!"11. Moral Rights (451)#+$+7$(a) Moral rights stem from the continental tradition author's personalityright. They give inalienable rights to authors. Moral right has not beenofficially part of U.S. tradition.%7[&[g$$U.S. did not accede to the Berne Convention for 100 years,'gs$primarily because Art. 6bis of the Berne Convention required(s$signatories to recognize moral rights (453 n. 2))*$$When U.S. acceded in 1988 Congress concluded that ourJ+ 9dd $J$law could be understood as complying in principle (453 n. 2; n. 4) $(b) The Visual Artists Rights Act of 1990 is the first explicit moral rightsprotection in the U.S. It is much narrower than moral right in Europe. [If you'regoing to destroy something, make sure it's by a U.S. artist and either she isn'tfamous or is dead] $(c) Consider VARA (sec. 106A) more closely:$$1. It applies only to works of visual art [check definition in+$sec. 101]+7$ 7C$$$does not apply to movies; literary works; music CO O[$$$consider John Huston case (454 n. 3); consider [g$$Shostakovich case gss$$2. It applies only during author's lifetime (106A)(d)[actually$through the end of the year of the author's death106A(d)(4)]$$$consider Picasso case (454 n. 3)$$$[and note that for works created before the effective$$date of the ACT it doesn't apply unless the artist still owns$$the work] !$$3. As to destruction of the work, it applies only to"$works of recognized stature; and the destruction must be#$intentional or grossly negligent (a)(3)(B)$%$$4. As to mutilation, distortion, and prejudicial modifications,&'$they have to be intentional (a)(3)(A)''3(3?$$$But note (c)(2): modification due to presentation or)?K$$placement doesn't count unless caused by gross negligence*KW +Wc$$$How would Richard Serra case come out under!,co$$VARA? (454 n. 4)"-o{#.{$$$Also note (c)(3): [If artist has transferred ownership$/$$of copyright, then] artist cannot prevent reproduction%0&1$$5. Waiver [sec. 106A(e)(1)]'2(3$(d) What happens if you're demolishing a building and find that the basementwalls are covered with murals and the gargoyles on the front are by a recognizedartist (who is still alive)?)6*7$$Look at sec. 113(d): [no VARA rights unless work can+8$be removed without mutilating it; and if it can be, artist has to,9 $remove it within 90 days after notice]-: .;#/<#/0=/;NEXT: Fair use (458509); read sec. G (Int'l issues) on own (509514); Remedies(514522); copyright and computer software (860862; 873908; 916927; 932955)1?;SV2@S_ S9@ee_ $'  'VIP 97 Class No. 220Ao{o'  '0+0B{{ '  '0CD1. Questions from yesterday:EF$(a) Sec. 115 cover right what is relationship between right to makephonorecords and rights in underlying composition?HI$$First look at nature of right in phonorecords J K$$phonorecords are only protected against copying [= dubbing]; L$it's OK to imitate them [sec. 114(b)] but what about sampling? [2d M $sentence of 114(b)] N O#$$sec. 115(a) gives right to use underlying musical work subject tocompulsory license (if phonorecords of the work have already been distributed tothe public in the U.S.)R#GSGS$$$you don't need permission from the owner of theTS_$$sound recording (unless you are dubbing it)U_kVkw$$sec. 115(b) limits your use of the underlying musical workWw$to performances that don't change the basic melody or fundamentalX$character of the workYZ$$$you can't protect your cover as a derivative work$$(unless the copyright owner agrees to give you that right)$$(115(b)]^$(b) Would resale royalties under state act be liable to preemption undersec. 301?`a$$the state rights in question have to be equivalent tob$rights granted under copyright [so maybe not][see 301(f)(2)(B)cd$$however, consider state protection against destruction,e+$mutilation, etc., in light of sec. 301[see 301(f)(1)] f+7!g7C$$but note 301(f)(2)(C) states can extend rights beyond"hCO$life of author#iO[$j[g$(c) Reconsider CCNV what rights did artist retain?%kgs&ls'm2. Moral Rights (451)(n)o$(a) Moral rights stem from the continental tradition author's personalityright. They give inalienable rights to authors. Moral right has not beenofficially part of U.S. tradition.*r+s$$U.S. did not accede to the Berne Convention for 100 years,,t$primarily because Art. 6bis of the Berne Convention required-u$signatories to recognize moral rights (453 n. 2).v/w$$When U.S. acceded in 1988 Congress concluded that our0x$law could be understood as complying in principle (453 n. 2; n. 4)J1y 9yff $Jܿz+7$(b) The Visual Artists Rights Act of 1990 is the first explicit moral rightsprotection in the U.S. It is much narrower than moral right in Europe. [If you'regoing to destroy something, make sure it's by a U.S. artist and either she isn'tfamous or is dead]~7ggs$(c) Consider VARA (sec. 106A) more closely:s$$1. It applies only to works of visual art [check definition in$sec. 101]$$$$does not apply to movies; literary works; music  $$$consider John Huston case (454 n. 3); consider $$Shostakovich case  $$2. It applies only during author's lifetime (106A)(d)[actually$through the end of the year of the author's death106A(d)(4)]$$$consider Picasso case (454 n. 3)'$$$[and note that for works created before the effective'3$$date of the ACT it doesn't apply unless the artist still owns3?$$the work]?KKW$$3. As to destruction of the work, it applies only toWc$works of recognized stature; and the destruction must beco$intentional or grossly negligent (a)(3)(B)o{{$$4. As to mutilation, distortion, and prejudicial modifications,$they have to be intentional (a)(3)(A)$$$But note (c)(2): modification due to presentation or$$placement doesn't count unless caused by gross negligence$$$How would Richard Serra case come out under $$VARA? (454 n. 4)!"$$$What about daVinci vs. Duchamp?#$ $$$Also note (c)(3): [If artist has transferred ownership% $$of copyright, then] artist cannot prevent reproduction]&#'#/$$5. Waiver [sec. 106A(e)(1)](/;);G$(d) What happens if you're demolishing a building and find that the basementwalls are covered with murals and the gargoyles on the front are by a recognizedartist (who is still alive)?*Gk+kw$$Look at sec. 113(d): [no VARA rights unless work can,w$be removed without mutilating it; and if it can be, artist has to-$remove it within 90 days after notice]./3. Fair use: defense to infringement on a casebycase basis01ܖ Consider fair use defense (sec. 107): certain unauthorized uses that come withinthe owners scope of rights are nevertheless not infringements. J2 ˀ9gg $Jܿ$(a) What kind of uses?[ such as criticism, comment, news reporting,teaching, scholarship, research]  $(b) Factors to be considered in a particular case shall include##/$$purpose [including whether commercial or nonprofit/;$$$educational];G$$nature of the copyrighted workGS$$amount and substantiality of the portion used S_$$effect on the potential market for the copyrighted work _k kw$(c) Is fair use a rule or a standard? [will people who want to exercise theirrights to criticize or comment or report be chilled by threat of copyrightliability?] w NEXT: Fair use (458509); read sec. G (Int'l issues) on own (509514); Remedies(514522); copyright and computer software (860862; 873908; 916927; 932955)V hh $'  'VIP 97 Class No. 230 '  '0,0  '  '01. Fair Use [cont'd]: Look again at sec. 107: our job is to understand both thestatutory factors and what's "really" going on//;2. Consider Sony v. Universal City Studios (468) [come back to Harper & Row later];GGS$(a) Facts: Sony manufactures VCRs (Betamax). Universal City holdscopyrights to some content shown on TV. VCRs can be used in ways that obviouslyinfringe copyright. Issue: Given that VCRs can be used to infringe copyright,should VCR manufacturer be contributorily liable? [What is contributory liability? see (456) ]S$(b) What will help us decide?  $$What are VCRs used for?  $$$piracy $$$licensed activities$$$timeshifting [is it or is it not infringing?]$$Is what they are used for either noninfringing or$infringing but excused bec. fair use?++7$(c) Is what theyre used for noninfringing? [not completely]7CCO$$1st part of the opinion develops facts that say thatO[$$PBS, Mr. Rogers, etc., license everybody to copy for[g$$home usegss$$2d part of the opinion develops theory that$$timeshifting is fair use [do they even need to reach$$this?]$(d) Consider timeshifting as fair use? !$$what is timeshifting"#$$how does sec. 107 apply to it?$%$$$ criticism, etc. [must be such as??]&$$$$'$$$ commercial vs. nonprofit educational?()'$$$nature*'3+3?$$$amount and substantiality,?K-KW$$$harm to market or potential market.Wc/co$(e) what would have happened if Sony lost this case?0o{1{$(f) Commercial vs. noncommercial use: Does Sony say there's a presumptionthat commercial use of copyrighted material is not fair use? Does Sony say thatthere's a presumption that noncommercial use is fair use? [(472)]J2 9ii $Jܿ3. Can use of someone elses work prior to publication ever be fair? [What doessec. 107 say?] Consider Harper & Row v. The Nation (459):$$(a) Consider the normal notion of fair use in news reporting (e.g., quotesfrom Primary Colors in stories speculating who wrote it)$$$$remember you dont even need fair use if youre $$scooping someone on facts or ideas ' '3$$$what if you steal someones research notes and  3?$$copy the facts? [maybe tort; not copyright]  ?K KW$$$$what if you steal someones manuscript Wc$$$and describe it? [maybe tort; not copyright unless co$$$you copy protected expression, literal or nonliteralo{$$$elements]{$(b) Describe facts in Harper & Row. Do they differ from normal newsreporting that sec. 107 means to exempt?$$$substantiality of copying of protected expression?$$$$(300 words)(the heart)$$$actually caused damage to proprietor? [Time didnt$$$$pay 12,500 because scooped]$$$work has not yet been published  $(c) Why is fair use disfavored (or precluded?) if the work is not published?# #/$$authors right to choose when (and whether) to!/;$$$publish (464)";G#GS$$$$is this a personality interest like right $S_$$$of disclosure in moral right jurisprudence?!%_k"&kw$$$$[free to develop ideas w/o fear of#'w$$$expropriation outweighs any short$($$$term news value%)&*$$$$$personal interest in creative control'+$$$$$property interest in exploitation of(,$$$$$$prepublication rights)-*.$(d) Note the economic theory of fair use: (465 n. 9)(see (473 n. 6)+/,0$$Will fair use disappear in the online world?-1.2/34. Consider American Geophysical Union v. Texaco (475)0415+$(a) Ct holds it violates copyright for research scientists to copy journalarticles for their research archives27+C38CO$(b) Rationale? (486) [potentially this use could be licensed, thereforethere's no right to use it w/o license]J4:Og [9:jjg $Jܿ;w$(c) Does this mean that "virtually every academic institution in the U.S. isregularly committing copyright infringement"? (493 n. 5)=>5. Parody and satire: 2 problems?@$(a) Parody and satire will be derivative works, so they have to be measuredlike everything else by copyright and its defenses [ideas, facts, already in publicdomain, scenes a faire, merger; fair use]. Why not a blanket exemption for parody? [1st amendment implicationsD could we argue such an exemption is C required?]EF$(b) Successful parody or satire may cut into the market for the original thats its purpose as criticism. Should this result subject the author to copyrightliability? (the more you succeed in your artistic genre they more you have to payoff those you criticize) J7 K7C6. Consider Campbell v AcuffRose Music (494): LCO MO[$(a) 2 Live Crew composed a parody of Pretty Woman by Roy Orbison. Theysought a license but copyright owner refused {"we cannot permit a parody" (495)}. 2Live Crew did it anyway and got sued. Ct of Appeals said this couldn't be a fairuse because of "blatantly commercial purpose" and [extent of borrowing from theoriginal, including taking the heart]. It is uncontested that this would becopyright infringement if it weren't for fair use. [Why couldn't 2 Live Crew justget this under compulsory license under sec. 115?] T[U$(b) Does S Ct say the fair use defense is C required? [Where in the C doesit say this?] (4956)WX$(c) What is the role of the transformative use? [Is this one of thestatutory factors? Should it be?] (496)Z[$(d) Is there now a special standard for parody?\]$$looks like parody can take the heart of the work because otherwise itcan't work as a parody (500)_3`3?$$$result here? (501) [remand to see if they took tooa?K$$much, but can't be too much as a matter of law]bKWcWc$$also parodist can claim that even if plaintiff's market isdco$hurt, it's hurt in a noncognizable way [no presumption of harmeo{$even for commercial purpose if work is parody (502)]f{g$$$you can kill plaintiff's commercial mkt withh$$a devastating parody [and this is not the type ofi$$market harm against which platiniff is to be j$$protected]!k$"l$(e) Does 2 Live Crew win?#m$n$$well, fair use is an affirmative defense, so it's up to defendant toproduce evidence that there's no commercial harm in the sense that is cognizable. 2Live Crew didn't do that [i.e., they need to produce evidence that their parody isnot undercutting AcuffRose's potential profit from a potential nonparodic rapderivative version of Pretty Woman] (503) . Hence this is an evidentiary hole to be6 9skk/ $6plugged on remand.t?u?KvKWwWcxcoNEXT: read sec. G (Int'l issues) on own (509514); Remedies (514522); copyrightand computer software (860862; 873908; 916927; 932955)zoV{ T{ll $'  'VIP 97 Class No. 240|'  '0-0} '  '0~1. What are the really important factors in fair use?$noncommercial?$transformative? [parody, criticism, political speech?]    $availability of mkt?      '$harm to plaintiff's mkt?  ' 3  3 ?$published? ? K K W$heart of the work? W c c o$ o {2. Summary on fair use: {   $(a) private property ( copyright maximalist position):    $$no fair use unless licensing market is too expensive to  $establish (market failure) [i.e. fair use is not Crequired]    $$no fair use for any commercial use    $$no fair use for any copying of unpublished work    $$no fair use for any copying of entire work    $(b) free speech (public domain maximalist position):   #! # /$$fair use for political and educational speech [i.e. fair use is" / ;$$$required by copyright clause and perhaps by 1st A]# ; G$ G S$$fair use for noncommercial uses% S _& _ k$$fair use to promote competition (interoperability)' k w( w 3. Remedies for copyright infringment (514) overview: )  *  $(a) criminal liability (sec. 506) [except VARA]+  ,  $$note sec. 509: seizure and forfeiture; also 506(b): all copies$and equipment will be forefeit-  .  $(b) Is this for criminal liability only? Note sec. 503:/  0  $$court may impound copies and equipment "at any time action ispending" [including ex parte after complain is filed] 1  2  $$$Do you think this section has 1st A problems?3  4  +$$and as part of final judgment ct may order destruction5 + 76 7 C$(c) Injunctions (temporary and permanent) sec. 502J7 C O  C9mm O $Jܿ _ k$$Note that injunctions are freely granted (even preliminary k w$injunctions) (520) [exception in Rear Window case] w   $(d) Damages (sec. 504)    $$(a)(1) and (b) owner's actual damages, plus profits of  $infringer in excess of that     $$(a)2) and (c) statutory damages election      $$$$500 $20,000 for each work infringed, in court's$$discretion      $$$$can increase to $100,000 if wilful (c)(2)    $$$$can decrease to $200 if innocent (c)(2)  + + 7$$$$not awarded if infringer in good faith 7 C$$$relying on fair use and infringer is connected  C O$$$with educational institution, library, or (for O [$$$published nondramatic literary works only) a [ g$$$public broadcaster (c)(2) g s s $$$(sec. 412) not eligible for statutory damages unless  $$work was registered at time infringed [or is published and$$registered w/in 3 months of publication]    $(e) Attorneys fees and costs to prevailing party (sec. 505) in court'sdiscretion (but only if work registered in accordance w/ sec. 412)    $$see (519 n. 2): this means either party    $(f) And note that in general a work must be registered in order to bring aninfringement action (sec. 411)so register when filing complaint if not donealready     4. Consider Sheldon v. MetroGoldwyn Pictures (516):!  '" ' 3$(a) Facts: Plaintiff's play, Dishonored Lady, was based upon a Scottishmurder trial in 1857. Defendant's movie, Letty Lynton, was based upon a novel thatwas based on the same trial. Defendant bought the movie rights to the novel butnegotiations to buy the movie rights to the play fell through (516). Ct Appconcluded that defendant's not only used the idea (a wanton girl kills her lover tofree herself for a better match, etc.) but also engaged in deliberate plagiarismfrom the play.# 3 $  $(b) Who now owns the copyright in the movie?%  &  $(c) As to profits already realized, who will get them?'  (  $Defendants claimed that even if they infringed, the main source of theirprofit is popular actors, scenery, expert producers and directors.)  *  $District court thought it was required to award all profits to plaintiff, butthought that was unfair and that 25% would be fair (517).+  J,    9nn $J$Ct App thought that apportionment could be made and that 20% would be fair. SCt. here affirms.33?$(d) Look again at sec. 504(b): how will this work in practice??KKW5. Copyright in computer programs:Wcco$(a) Computer programs are protected as literary works. [Recall definition ofliterary work in sec. 101] It protects at minimum against literal copying of sourceand object code. o$$UNLESS: fair use; merger; scenes a faire; method of operation...  $$[In what sense is object code a literary work?]  $$Serious problem w/ nonliteral copyingwhat is the idea and $whatis the expression? $$Also: remember 102(b) no copyright for procedure, process,$system, method of operation  $$##/$(b) Idea vs. expression of idea in software context/;;G$$Whelan case (3d Cir.) had said that the idea of managing a dentallab was the idea, and everything else was expression [very broad protection]G_ _k6. Idea vs. expression of idea in software context kw w$$Whelan case (3d Cir.) had said that the idea of managing a dentallab was the idea, and everything else was expression [very broad protection] $Whelan has been undermined by Computer Associates v. Altai (2d Cir.) (873):$(a) This is a leading case on how to analyze copyrightable elements ofcomputer programs. [3d Cir. hasnt overruled Whelan v. Jaslow, but its beenundermined...]$(b) How did dispute arise?  $The program in issue is a job scheduling program for IBM mainframe computersdeveloped by CA; it creates a schedule for various tasks and controls the computerwhile it performs them. One of its subprograms, called ADAPTER, enables the mainprogram to work on different operating systems that the IBM computer may be running;it allows computer user to use multiple operating systems.!C"CO$Altai is a competitor of CA. It hired away one of CAs employees (Arney). (The head of Altai (Williams) had also worked for CA and known him there.) Unbeknownst to anyone at Altai [great litigation strategy ??], Arney had taken withhim CAs code for the Adapter program. He used it to develop a competing product,Oscar 3.4., which copied about 30% of that code. [Note Altai is no longer appealingaward of $364,444 for this version.]#"O$#$Wait a minute: how come this isnt a claim for stealing a trade secret? [Ctsays preempted by copyright; see sec. 301(a)]%%J&& 9&oo $J$What did Altai do after they discovered that Arney had copied the code?[which they say happened when they got sued]()$$Clean room rewrite (see 875); developed Oscar 3.5*+$(c) CA claims Oscar 3.5 also infringes. It cant infringe by copyingstatements in the code (no literal elements (876). Remember infringement = copying. What does CA claim Altai copied in the new version?.7/7C$$list of services that program obtains from its0CO$$$operating system1O[$$general flow chart (structure of program) 2[g$$more specific organizational features 3gs$$$intermodular relationships 4s$$$parameter lists 5$$$macros 67$(d) Are nonliteral structures of literary works copyrightable? What wouldthese be?9:$$Does ct hold that nonliteral structures of computer;$programs are copyrightable? [Yes, in principle (876)]<=$(e) So now ct has to compare the nonliteral structure of one program withthe other to see whether they are substantially similar so that copying can beinferred. How is it going to do that?@A$$Abstraction (879): Decide at what level expression blendsB'$into idea. [Whelan was much too high.]C'3D3?$$Filtration (880): Filter out the uncopyrightable elementsE?KFKW$$$ideasGWc$$$$including ideas merged with expression [dictatedHco$$$by efficiency] (880)Io{J{$$$dictated by external factors (882)K$$$$analogous with scenes a faire L!M$$$in the public domain (883)"N#O$$Comparison (883): see if whats left is substantially similar$P%Q$(f) How applied in this case? (8867)&R'S$(g) Will judges be able to apply this test?(T)U 8 $$*V +W#NEXT: copyright and computer software (860862; 873908; 916927; 932955); trademark 523532 [read on own]; 543580; 595610; 622628 [read on own]; 628658;669735,Z#G-[GSJ.\S_ S|6\pp_ $J8IP 97 Class No. 25]o{^{_1. Have you wondered why Microsoft got away with copying Apple's user interface? See Apple v. Microsoft (917)ab$(a) Apple had registered the GUI as an audiovisual work. Does it fit withinthe definition?de$(b) What exactly did Windows copy?f g$$the source and/or object code? h i $$the structure, sequence, and organization of the code? j  k#$$the look and feel of the screen and mouse? [total concept and$$$feel]m#;n;G$oGS$(c) What did Apple do when Windows 1.0 first came out and it was a copy ofthe Mac interface?qSkrkw$$$What exactly did Apple license to Microsoft? [whatever theyhad in Windows 1.0 plus the right to use and sublicense derivative worksgenerated by Windows 1.0 )917)]uwv$(d) What's left for Apple to complain about in this case? [they say thatMicrosoft exceeded the scope of the license by making Windows more and more Mac  like]yz$(e) Dist ct held that under these circs the later Windows would have to be"virtually identical" to the Mac interface in order to infringe and infringmentof course applies only to protected expression, so would have to be "virtuallyidentical" to those parts that aren't filtered out by the Altai test~$$Explain? (923) vast majority of the copied features were$licensed, so the only claim of infringement would rest on Apple's+$unique structure and arrangement+77C$$Apple claims this is an artistic work and should receiveCO$broader protection but ct says it's more like a factual work (923)O[[g(f) Absent Apple's license to Microsoft for Windows 1.0, would this have been aninfringement? g!$$District ct finds (and Ct here affirms) that the following are ideas,therefore not protectable (919):"#$$$idea of a GUI$%$$$use of windows to display multiple images&'$$$use of icons()$$$use of menus*+$$$opening and closing of objectsJ, 9qq $Jܿ+7$$Also, district ct finds that merger and scenes a faire limit any7C$claim to unique expression of these ideas [use of overlapping windows; useof page metaphor, etc.]C[[g2. So far we've discussed how ideas, merger, scenes a faire limit copyrightabilityof computer programs. Another kind of limit on copyrightability of elements ofcomputer interface involves the 102(b) exclusion of process, system, procedure,method of operation.g$(a) Consider Lotus v. Borland (892). What exactly did Borland copy?$(b) Held? [the Lotus menu command hierarchy is an uncopyrightable method ofoperation]  $$*even if* the Lotus developers made expressive choices? $[yes]  $(c) Consider VCR button analogy (900) $(d) Does this mean that all GUIs are method of operation?'$(e) Why should object code be copyrightable if this isn't?'33?$(f) What is best argument in favor of Borland? [What rationale does itsuggest here?]?WWc$$make competition possible?coo{$$see Boudin (908 n. n7){3. In general the issue of making competition possible for things other than thecopyrighted item itself (interoperability) is an issue that comes up a lot in thesoftware context. A number of courts have thought that the place to put thisconcern is into fair use [though it doesn't seem to be about criticism, commentary,etc]$(a) Consider Lewis Galoob v. Nintendo (932)$$What did Galoob do that Nintendo objects to? [sold a gadget$which when plugged into Nintendo machine would alter its copyrighted games[create derivative works]#$$Ct holds that the Game Genie is used for a noncommercial #/$purpose (!) (935); therefore can't "presume" not fair use, but!/;$market harm must be shown";G#GS$$Can Nintendo show market harm? (936)$S_%_k$$Answer Q's in n. 1 on p. 937&kw'w$(b) Consider Sega v. Accolade (938)()$$$What did Accolade do that Sega objects to? (939) [acquiredcopies of Sega's game cartridges, ran them through a decompiler and gotprintouts of source code and then worked on source code in order to determinehow cartridge interacts with console and then kept only functionaldescriptions (not copies) and made game cartridges of their own that would6 ˀ9rr $6play in the Sega console]#Z.#$$Where's the copying in this scenario? [Sega had to copy the objectcode by running it in the computer in order to decomple it see 939 n. 2][see 941ܖ also the printouts and computer files containing Accolade's modifications of thedecompliled code]//;[Unfortunately, it turned out that Sega had a 4byte piece of code that had toappear in the cartridge in order for it to work, and this code caused a message toappear on the screen that said produced by or under license from Sega EnterprisesLtd ];kkw$ Issues: (1) Was it fair use for Accolade to make a copy of the object codein the Sega cartridges? [(2) Did it violate the Lanham Act for the Accoladecartridges to display the Sega message when they were plugged in?]w$How does court go about deciding whether its fair use for Accolade to copythe Sega program?  $$ Does it apply the 4 factors?  $$(1) copying for commercial purpose [Sony said should $be presumed unfair][(9456) overcome; why?]$$(2) nature of the work [literary work] [see 949 50 lower$degree of protection than more traditional literary works; why?]+$$(3) substantiality [copying entire work](951)+77C$$(4) market harm (947) [usurps the market vs. enables theCO$copier to enter the market]O[[g$ What is the real reason court rules this way? (951)gss$Notes and questions on p. 952955. See esp. Cohen article (citedin n.1) 8$NEXT: 543580; 595610; 622628 [read on own]; 628658; 669735 J! Ӏ*ss $JIP 97 Class No. 261. Consider the question: If interoperability is important if we think thatotherwise the copyright monopoly is extended "too far" is fair use the best wayto get there? What other possibilities are there?77C$$$object code is functional, not copyrightable [patentCO$$or nothing]O[[g$$$copyright misuse (954 n. 6) gs s$$$ intermediate copying [copies that aren't used to supplantsomeone's market, just used to help you make your own $product or perform yourown service]  $$$$problem over the scope of sec. 117 (9278)   $$$(1) limited to "owners"  $$$(2) essential step in the utilization of the program in a $$machine (117)(1)$$$$see Vault v. Quaid [OK to load program into$$$memory and run it for the purpose of learning$$$how to defeat its copy protection](5th Cir. 1988)''3$$$$but also see MAI v. Peak [anytime a "licensed"3?$$$program is loaded into RAM that's a copy for purposes?K$$$of copyright law] (9th Cir. 1993)KWWc2. If you were designing an IP regime for computer programs, what would it looklike? [Would it be copyright?]c{{3. Intro. to trademark:$(a) Common law of trademark (predecessor to federal statute) (see 5245) !$$Tort (deception of customers as to source) gives rise to unfair$competition (misappropriation of plaintiffs goodwill)" #!$$$Prove that defendant actually engaged in$"$$deception or intended to deceive (passing off defendants goods%#$$as plaintiffs)&$'% $$$ evidence of actual activity of defendant (?)(& )'#$$$strength of plaintiffs name or label, etc.*(#/+)/;$$$$ merely descriptive,*;G$$$ -+GS$$$$ secondary meaning.,S_/-_k$$$$so distinctive that court can presume without0.kw$$$more that defendant was being deceptive1/w20$$$$$these cases came to be called trademarkJ31 91tt $J$$$$(rest are still unfair competition)23$(b) Traditional trademark is geographic and industryspecific. Both theselimitations follow from its tort origin (dependence on likelihood of confusion):56$$Geographic (no likelihood of confusion if both sellers not7$in same territory)89 $$Industry specific [compartmentalized](no likelihood of confusion ifboth sellers not selling same kind of goods); # <#/$(c) The trademark act is essentially a recording act for marks (names,logos, etc.) that are used in commerce to identify your goods (or services).  >/G ?GS$What does registration do for you? @S_ A_k$$see sec. 1114 (Supp 94)BkwCw$$$[remedies: injunction; damages; treble damagesD$$$for intentional deception as to origin]EF$(d) How does a company go about creating an ownable trademark?GH$$first search the registerIJ$$next read sec. 1052 (Supp 77)KL$$next must be used in commerce (sec. 1051(a))MN$$$$This was only way to get valid trademarkO$$$before 1988 Revision Act. Now, however, youP$$$can also apply showing good faith intent toQ+$$$use (sec. 1051(b)) must follow up withR+7$$$actual useS7C TCO$$$$What is the purpose of requiring!UO[$$$actual use before registration?"V[g#Wgs$$$$$prevent warehousing of marks [Why do$Xs$$$$we want to do that? (otherwise you can cheaply%Y$$$$increase costs for your competitors create&Z$$$$barriers to entry)]'[(\$$$$But what is the downside of requiring)]$$$actual use?*^+_$$$$$company spends money on,`$$$$marketing, etc., not knowing whether-a$$$$registration will be granted?.b$$$$/c $$$$$$$[and Pat Off and courts will0d  $$$$$$start allowing token uses...]1e  2f  '4. Consider Blue Bell v. Farah (553) [race to be first to "use" mark]:3g ' 34h 3 ?(a) Facts: Blue Bell and Farah both manufacture mens clothing. They both want toown the trademark Time Out. They both claim that theyve used it in commerce. 6  K9juu c $6Each wants to enjoin the other from using it.k ? sHow should court decide who gets it? (Or should they both get it?) l s m  $[Try to find out who used it first]n  o  $[What facts are relevant to this inquiry?]p  $q  $$When did they conceive it?r   s  $$When did they actually put the label on goods? t  $$ u  $$When did they transfer goods from the factory to v  $$$their wholesalers? w !x!!$$When did they start marketing the goods?y!!z!!'$$When did labeled goods get in the hands of{!'!3$$$consumers?|!3!?}!?!K$$When did consumers first have a chance to identify~!K!W$$$the goods by means of the mark?!W!c!c!o$(b) Farah didnt acquire ownership by its July 3 shipment? Why not?[internal, not to customers]!o!$$!!$(c) Blue Bell didnt acquire ownership by its July 5 shipment? Why not? [badfaith attempt to reserve a mark (210)]!!!!$(d) Result?!!!!5. Note that common law trade mark is geographical: that is, you only acquirerights in the territory in which your product is distributed [or is reasonablylikely to be distributed (555)!!!!$!" 6. Note that ownership is acquired by use, not by registration. " "!""#$(a) What does registration do for you? [automatically gives nationwide scope]""#"/#"/";$(b) So what happens if you use a mark in California and on that basis youregister it, and it later turns out that someone else has been using it for the sametype of goods in New York? (556)$";"_$(c) What if two parties from different locations seek registration at thesame time? [(556) interference]%"_"w&"w"7. Consider Zazu v. L'Oreal (543)Judge Easterbrook explains use requirement andalso shows how traditional trademark is industryspecific [compartmentalized] andgeographic'""(""$(a) Facts: L'Oreal needed a trademark for hair cosmetics. They came up withsome possible names and researched them. Zazu was registered federally forclothing; there were 2 state service mark registrations and one of them was ZazuHair Design Ithe plaintiff]. )""*""$$What did L'Oreal do about the clothing people? (544) [explain this dealwhat rights would Riviera Slacks, Inc. have+"#$had against L'Oreal absent this deal?]J,## #9vv# $Jܿ###/$$What did L'Oreal do about ZHD?#/#;#;#G$$$tried to ascertain whether they were selling hair$$$products (544)#G#_#_#k$$$made a small interstate shipment in April 1986 (544)$${"It used this shipment as the basis for an application for$$federal registration..."}#k###$$$[NOTE: Even if L'Oreal gets federal registration, will##$$they be able to use the mark in ZHD's territory? ] ## ##$$In the meantime (perhaps unbeknownst to L'Oreal), ZHD ##$was gearing up to sell hair products itself.  ## ##$(b) ZHD now claims rights to use the mark that are prior to L'Oreal userights and therefore that L'Oreal's registration doesn't give it anything.###$$$What did ZHD do to establish "use" of the mark? [and when$$$did it do it?]$$$$+$$$looked for products in 1985 (544); a few things$+$7$$sold in bottles at salon w/ business card attached; 2 bottles$7$C$$shipped to friend in Texas and 2 shipments to friend in$C$O$$Florida (betw 19856; not public because not labled); had$O$[$$25,000 bottles silksreened late in 1985; began to sell small$[$g$$quantities in bottlles filled and labeled in the salon in Sept.$g$s$$1986$s$$$$(c) It's clear that if ZHD had sold products in commerce nationwide beforeL'Oreal "used" the mark and tried to register it, then L'Oreal couldn't registerbecause they don't "own" it$$$$$$Did trial ct think this was the case?$$$$$$$(546) Apparently yes. Trial ct relied on cases that$$$$said "token use" counted as "use" but actually those $$$$cases only meant you could register, not that you would!$$$$get actual ownership in absence of registration"$%#%%$$$There's a difference between "use" that will be enough$%%$$to give you putative ownership so you can register, and "use"%%%'$$that will give you real ownership rights if you haven't$$registered&%'%?'%?%K$$$$[Question: What happens if someone registers(%K%W$$$based on token use but then it turns out that someone)%W%c$$$else has established ownership by real use from an*%c%o$$$earlier date? Registrant loses (this case)]+%o%{,%{%$$$Easterbrook rationalizes this rule, how?-%%.%%$$$$Registration gives everyone notice, and "token/%%$$$use" is enough to make registrants not monopolistically0%%$$$warehouse marks while at the same time it doesn't1%%$$$make them spend money wastefully on promotion (546)J2%% %À9ww% $Jܿ%%$(d) Is this result changed if L'Oreal when it made its token use in April of1986 knew that ZHD was gearing up to go on the national market and L'Oreal justacted to beat them out in the race to register (rather than having to negotiate withthem)?%&&&'$$ZHD claimed this was "bad faith" and trial court agreed&'&3&3&?$$Easterbrook reverses: says "bad faith" cases apply only&?&K$(547) to attempts to reserve a mark w/o making genuine sales&K&W$to the public [Why is this the main evil?]&W&c &c&o$$$dissent says bad faith means any knowledge that &o&{$$someone else is using the mark (54950) &{& &&$(e) What (if any) rights does ZHD now have? &&&&$$(549) Salon services in Hinsdale area&&&&$$Hair products in Hinsdale area ?&&&&$$Hair products in Chicago area?&&&&8. Big change in the law in 1989 (550): now you can file intent to use which givesyou at least a year to "use", gives priority from the date of the application. Howwould this have worked in the Zazu case?&'''#9. Does this get rid of "token use"? (see (551 n. 3)'#'/'/';';'G'G'S'S'_'_'k$NEXT: 543580; 595610; 622628 [read on own]; 628658; 669735'k'wV'w' 'w#xx' $'  'VIP 97 Class No. 270''''  '0''''''1. Ownership/"use" [cont'd] ''''$(a) It's clear that if ZHD had sold products in commerce nationwide beforeL'Oreal "used" the mark and tried to register it, then L'Oreal couldn't registerbecause they don't "own" it'' '( $$Did trial ct think this was the case?  ( (  ((#$$$(546) Apparently yes. Trial ct relied on cases that  (#(/$$said "token use" counted as "use" but actually those  (/(;$$cases only meant you could register, not that you would (;(G$$get actual ownership in absence of registration(G(S(S(_$$$There's a difference between "use" that will be enough(_(k$$to give you putative ownership so you can register, and "use"(k(w$$that will give you real ownership rights if you haven't$$registered(w((($$$$[Question: What happens if someone registers(($$$based on token use but then it turns out that someone(($$$else has established ownership by real use from an(($$$earlier date? Registrant loses (this case)](((($$$Easterbrook rationalizes this rule, how?(((($$$$Registration gives everyone notice, and "token(($$$use" is enough to make registrants not monopolistically()$$$warehouse marks while at the same time it doesn't))$$$make them spend money wastefully on promotion (546) ))!))+$(b) Is this result changed if L'Oreal when it made its token use in April of1986 knew that ZHD was gearing up to go on the national market and L'Oreal justacted to beat them out in the race to register (rather than having to negotiate withthem)? %)+)[!&)[)g$$ZHD claimed this was "bad faith" and trial court agreed"')g)s#()s)$$Easterbrook reverses: says "bad faith" cases apply only$)))$(547) to attempts to reserve a mark w/o making genuine sales%*))$to the public [Why is this the main evil?]&+))',))$$$dissent says bad faith means any knowledge that(-))$$someone else is using the mark (54950)).))*/))$(c) What (if any) rights does ZHD now have?+0)),1))$$(549) Salon services in Hinsdale area-2)).3)*$$Hair products in Hinsdale area ?/4**05**$$Hair products in Chicago area?16**'27*'*32. Big change in the law in 1989 (550): now you can file intent to use which gives6 *398yy*3 $6you at least a year to "use", gives priority from the date of the application. Howwould this have worked in the Zazu case?:*3*g;*g*s3. Does this get rid of "token use"? (see (551 n. 3)<*s*=**4. Secondary meaning and its relationship to priority (563)[first consider termsthat are merely descriptive of the goods]: ?**@**$(a) If you trademark merely describes the goods generically, then it cannotbe presumed that mere use of the term by you indicates that consumers associateproduct with you and your particular quality, etc.C**D**$$Moreover, if you appropriate a descriptive word w/o which E**$competitor can't describe goods at all, that puts big burden on competitor[e.g., couldn't trademark "computer" or "chair" or "doll"] G*+ H++$(b) However, there are some descriptive words which still leave room forcompetitors ["safetylock"? "flowergro"?] J++' K+'+3$$With these the problem is you can't assume that there's anyL+3+?$good will associated with the mark, absent knowledge of theM+?+K$circumstances of useN+K+WO+W+c$$$Thus, sec. 1052 (e)(1) and (f): registration for descriptiveterms (if they aren't too generic to register at all) must await becoming"distinctive" in use [use for 5 years will be prima facie evidence]#R+c+Z.#S++5. Consider Zatarians v. Oak Grove (564):T++U++$(a) Zatarains sold "FishFri" and "ChickFri". The mark "FishFri" had beenin use since 1950 and registered since 1962. The mark "ChickFri" had been in usesince 1968 and registered since 1976 [not too long before suit in 1979]. Severalcompetitors began marketing similar products and called them "fish fry" and "chickenfry." Zatarains wants to enjoin competitors from using these terms on theirproducts.[++\++$(b) The district court found that Zatarain's trademark "FishFri" was adescriptive term with an established secondary meaning (565) explain^+,_,,#$$(1) characterization as "merely descriptive" term:`,#,/a,/,;$$alternative characterizations? Plaintiff claimed the termb,;,G$is "suggestive" why? (568) Defendant claimed the term isc,G,S$"generic" why? (568)d,S,_e,_,k$$how will ct decide how to characterize? (569) f,k,w!g,w,$$$look up in the dictionary"h,,#i,,$$$imagination test$j,,%k,,$$$whether competitors would need the terms&l,,'m,,$$$$actual use by competitors(n,,)o,,$$(2) if PTO finds that term is "merely descriptive" when you applyfor registration, what happens? they deny registration under sec. 1052(e)(1)6 ,9qzz, $6unless you have 5 years of use already under sec. 1052(f) or you can show has"become distinctive" i.e., hass,-#$acquired secondary meaningt-#-/u-/-;$$(3) finding that term has acquired secondary meaning (570)v-;-Gw-G-S$$plaintiff must prove that mark has acquired secondary meaning inthe minds of consumers how to do this?y-S-kz-k-w$$$extent of advertising; volume of sales{-w- |--$$$take a survey! }-- ~--$(c) Thus Zatarain's "FishFri" trademark is valid (registration won't becancalled). Nevertheless, ct still won't enjoin competitors for using if they areusing in good faith merely to describe their product [and not as a trademarkthemselves]Zatarain's only controls the penumbra of acquired secondary meaning,not the core descriptive meaning. -- --$$this is a species of "fair use" (572) [note that trademark "fair$use" is not the same as the copyright defense of "fair use"]-...$$how will ct tell whether competitor is using the term in the..$descriptive sense or in the trademark sense? (572)..+.+.7$(d) Ct looked differently at "ChickFri" and ruled that the mark should becancelled why?.7.O.O.[$$Zatarain's didn't establish secondary meaning.[.g.g.s$$$not enough advertising, etc..s...$$$survey evidence no good (573)....$(e) Does this case mean that even if your mark has been registered for a longtime, someone can come forward and try to get it cancelled on the ground that it'smerely descriptive (and you'll have to defend by commissioning surveys, etc.)?....$$see sec. 1119 [ct can cancel if it wants to]....$$see sec. 1064 [someone who claims he will be damaged can petition tocancel w/in 5 yearsparallel to 5 years you need under 1052(f) ] [no limit ifclaim is that term is generic]./ //$$after 5 years owner can file an affidavit for incontestability!//'$(sec. 1065); which means that challenges are limited to the 7 items listedin sec. 1115(c) [again, incontestability can't attach to anything"/'/?$which is or becomes generic]#/?/K$/K/W%/W/cV&/c/o /cX3{{/o $'  'VIP 97 Class No. 280///'  '00/// '  '01. Secondary meaning continued: questions yesterday about what scope of secondarymeaning required before "merely descriptive" [but not generic' mark] can be ////$(a) enforced against a particular defendant in a particular location and ////$(b) registered and enforced nationally (but with possible exemptions forparticular defendants who established themselves in good faith in a particularlocation prior to plaintiff's registration///0$On registration, the Trademark Office has generally required applicants . . .to show more than secondary meaning in a limited area (575) 00 00'$$still leaves issue of whether you can enforce against someone who isusing it in a place where you don't have secondary meaning 0'0? 0?0K$$$if they started before? or after? you registered 0K0W0W0cTwo kinds of issues about defining secondary meaning:0c0o0o0{$$scope of market0{000$$geographical scope0000Question is discussed on 574 n. 3. Fuddrucker's had not tried to register its tradedress but was bringing action under sec. 43(a) [sec. 1125(a)]. [sometimes referredto as federal common law explain]0000Case was reversed because jury instructions were improper on functionality as wellas secondary meaning. On secondary meaning, issue was whether there was likelihoodof confusion. Ct said jury could find likelihood of confusion even if Fuddrucker'sdidn't have secondary meaning in Arizona because restaurant customers travel.01 1 1$"The source of the geographical . . . limitations the court included in itsinstructions is a line of cases defining rights in unregistered trademarksbetween geographically remote users who adopted similar marks in good faithand without knowledge of each other's use. . . . The rule that developed inthose cases permits junior users to continue to use a mark adopted in goodfaith in the geographical area of the junior user's actual use. The rule hasonly limited applicability to services such as hotels or restaurants, becausetheir customers 'are ambulatory and on the move back and forth across thenation.'"# 11Z.#11112. Secondary meaning continued: return to sec. 1052(e)(1): what kind of term is"merely . . . deceptively misdescriptive"? [e.g., "softfur" on synthetic material]1111$$can a term which is deceptively misdescriptive ever be11$registered? [it would seem so, under sec. 1052(f) but note sec. 1125prohibition of misleading advertising, etc., as well as applicability ofequitable principles (sec. 1115(b)8))11 113. Move on to sec. 1052(e)(2): when will ct deny registration for terms that areprimarily geographically descriptive of the goods? [e.g., "Kansas City" barbecue if really from Kansas city]!12J"22+ 29||2+ $J$$can a term which is primarily geographically descriptive2;2G$ever be registered? [sec. 1052(f)]2G2S2S2_4. How about 1052(e)(3) ("primarily geographically deceptively misdescriptive")[e.g., "Cuban" cigars that don't come from Cuba]2_2w2w2$(a) Consider Nantucket shirt case (599). PTO refused to register Nantucketas trademark for shirts on the ground that shirts didn't come from Nantucket.2222$(b) Ct says this should have been registeredexplain22 22$$Can a mark which is geographically misdescriptive but not$deceptive be registered? 22 22$$$Sure. Dutch Boy for paint; Alaska for bananas... 22$$(602) 2223$$$Do you have to wait until the mark becomes distinctive33$$(develops secondary meaning)?3333+$(c) Note the French wine interests (6034): anything which is geographicallydeceptively misdescriptive can never be registered, whether or not it acquiressecondary meaning3+3O3O3[5. How about 1052(e)(4)("primarily merely a surname")?3[3g3g3s$ What's the reason for disfavoring registration of surnames? [but note theybecome registrable under subsec. (f) after acquiring secondary meaning]3s333$$$If my surname is registered to someone else, then I33$$can't start a business using my own name (see (605 n. 1))3333$$$This concern has faded (606): "Other than$$understandable pride and sense of identity, the modern$$business man loses nothing by losing the name. A junior33$$user's right to use his name thus must yield . . ."3333$Even after surname has secondary meaning, cts are somewhat more likely toallow second comer with same name to keep using own name with disclaimer (607 n. 3)3444$1052(e)(4) is interpreted not to cover surnames which aren't perceived"primarily merely" as such [see In re Garan (604)] 443!434?6. Move on to infringement (633)" 4?4K# 4K4W$(a) So far we have been talking mainly about defendant that uses the exactsame mark as plaintiff.$ 4W4o% 4o4{$(b) What about situation where marks are similar but not identical? As youwould expect, the main test for infringement is likelihood of consumer confusion. How will courts decide this?&4{4'44$$types of confusion:(44)44$$$confusion between two products*44+44$$$confusion about source of product [e.g. Tiffany light6 4ۀ9}}4 $6$$bulbs?]4555$$$confusion about affiliation or sponsorship [e.g.$$Fuddrucker's]55'5'53$$who is confused?535?5?5K$$$customers?5K5W5W5c$$$[others?] [potential customers?]$  5c5o'  '$0 !5o5{5ox'  '0 X7. Consider AMF v. Sleekcraft Boats (633)["Slickcraft" v. "Sleekcraft"] "5{5 #55$(a) "Slickcraft" has been registered for recreational boats $55since 1969. "Sleekcraft" has been in use for racing boats%55since 1968&55'55$$AMF notified owner of Sleekcraft of alleged trademark(55$infringement, which caused him to adopt logo and phrase)55$"boats by Nescher" (634) but he still got sued*55+55$(b) What factors are relevant to likelihood of confusion? [see list of 8] ,55-56 $$What is meant by "strength of mark"? [How is this related.6 6$to likelihood of confusion?]/66#06#6/$$What is meant by "proximity of goods"?16/6;26;6G$$$Trial ct found that the product lines are not36G6S$$competitive, and this ct affirms (635)46S6_56_6k$$$What else is relevant?66k6w 76w6$$$$$Likelihood of expansion (63940)!866"966$$Similarity of the marks [is this the crucial inquiry?]#:66$;66$$$visual; sound; meaning%<66&=66$$$$[ct here reverses trial court; no expert testimony'>66$$$or survey evidence to support trial judge's opinion that(?66$$$the two marks were easily distinguishable by eye and$$$ear])A66*B67$$$$cf. Bonamine v. Dramamine (637)+C77,D77$$Evidence of actual confusion [or is this the crucial inquiry?]-E77+.F7+77$$$trial ct found that amount of past confusion was/G777C$$negligible; held not clearly erroneous0H7C7O1I7O7[$$$how show actual confusion? (640 n. 4)2J7[7g3K7g7s$$Marketing channels (638)4L7s75M77$$Type of goods and purchaser care (638)6N77J7O77 79O~~7 $J$$$"The care exercised by the typical purchaser, thoughtP77$$it might virtually eliminate mistaken purchases, does notQ77$$guarantee that confusion as to association or sponsorship isR77$$unlikely"S77T77$$Intent/good faith (639)what relevance to likelihood ofU77$$$confusion?V78W888. Consider problem 56 (643) XZ "5{5$ #55'  '$$$b $555 5$~~5 $'  'bXXͲIP 97 Class No. 29\̳XX0%555'  '0&55'55(551. Infringement where marks are similar but not identical: likelihood of confusionܖ Consider AMF v. Sleekcraft Boats (633)["Slickcraft" v. "Sleekcraft"][cont'd]*55+56$(a) What factors are relevant to likelihood of confusion? [see list of 8] ,66-66$$What is meant by "strength of mark"? [How is this related .66'$to likelihood of confusion?] /6'63 0636?$$What is meant by "proximity of goods"? 16?6K 26K6W$$$Trial ct found that the product lines are not36W6c$$competitive, and this ct affirms (635)46c6o56o6{$$$What else is relevant?66{6766$$$$$Likelihood of expansion (63940)866966$$Similarity of the marks [is this the crucial inquiry?]:66;66$$$visual; sound; meaning<66=66$$$$[ct here reverses trial court; no expert testimony>66$$$or survey evidence to support trial judge's opinion that?66$$$the two marks were easily distinguishable by eye and$$$ear]A67 B7 7$$$$cf. Bonamine v. Dramamine (637)C77#D7#7/$$Evidence of actual confusion [or is this the crucial inquiry?]E7/7; F7;7G$$$trial ct found that amount of past confusion was!G7G7S$$negligible; held not clearly erroneous"H7S7_#I7_7k$$$how show actual confusion? (640 n. 4)$J7k7w%K7w7$$Marketing channels (638)&L77'M77$$Type of goods and purchaser care (638)(N77)O77$$$"The care exercised by the typical purchaser, thought*P77$$it might virtually eliminate mistaken purchases, does not+Q77$$guarantee that confusion as to association or sponsorship is,R77$$unlikely"-S77.T77$$Intent/good faith (639)what relevance to likelihood of/U77$$$confusion?0V781W882. Consider problem 56 (643)2X883Y88+3. Dilution: important deviation from traditional basis of trademark liability in certain cases the trademark owner's claim will be so strong that others can't useit even if no confusion because of product lines or geographical area4\8+8OV5]8O8[ 8O9]8[ $'  'V$(a) see legislative history of 1995 Dilution act (645)^8k8w_8w8$(b) take a look at dilution act (sec. 1125 (c) (646)(also Supp 105)`88a88$(c) What could be policy basis for doing this?b88c88$(d) Why does it apply only to "famous" marks?d88e884. Consider Mead v. Toyota (649) f88 g88$(a) Facts: Lexis vs. Lexus: owner of computerized legal research servicewants to enjoin Toyota from naming its new luxury car Lexus.  i88 j89$(b) Not a traditional trademark case car will not be confused with legalresearch service. Not Lanham Act (which didn't have dilution clause until 1995) but rather N.Y. state antidilution act (649). m99+n9+97$(c) Consider (651) ["whittling away"] this started out with exact identitybut now covers substantial similarityp979Oq9O9[$(d) Trial ct finds for Lexis why?r9[9gs9g9s$$thinks marks are substantially similart9s9u99$$thinks Lexis is strong and will be dilutedv99w99$(e) Ct app finds for Lexus why?x99y99$$thinks marks aren't substantially similarz99{99$$thinks Lexis isn't strong in the relevant market, which is the|99$general public and not just those who buy computerized legal}99$research service [i.e. not "famous" enough] (653)~999:$$$therefore Lexis won't be blurred (653):: ::$$$also no Q of tarnishment (652)[see (655 n. 2 for$$examples)!::3":3:?$(f) Would ct app get the same result if the marks were substantially similar? identical?#:?:W$:W:c$(g) Infringement vs. dilution: Since ct holds marks aren't substantiallysimilar, would ct say it wasn't infringement for another legal research service tobe called Lexus?%:c:&::5. Federal AntiDilution act and Internet domain names'::(::6. So far we've considered 2 types of infringement: by likelihood of confusion [asto source, or as to sponsorship or affiliation] or by dilution. Now consider someof the typical defenses to infringement.)::*::$(a) Of course, we've already seen some of the defenses: we were there first;your registration should be cancelled because merely descriptive w/o secondarymeaning . . . etc.+::,:; $(b) We've also mentioned (and will come back to) the notion that you can't6 ; 9; $6trademark generic words (things that are needed for the common language in order tomake competition possible).; ;?;?;K$(c) The most important defense we haven't yet mentioned is functionality. You can't trademark aspects of your product which are merely utilitarian orfunctional.;K;o;o;{$$Similar to genericness with language: these are aspects of;{;$the product which your competitors need to use if they are to;;$compete with you in supplying the product;;;;$$$$see Posner (679) ;; ;;$$$$see Rest. 3d Unfair Comp (679) ;; ;;$$Only exception is patent: we don't want trademarks to ;;$turn into perpetual pseudopatents;;;;$$$see (681)("Note on Policing Backdoor Patents");< $$["current trade dress cases call for screaming sirens and< <$$search lights"]<<#<#>>$(f) Ct here agreed or assumed that Stormy Clime product had establishedsecondary meaning. Does the result mean that that goodwill is just lost?>>+>+>7$$Yes? (674) Ct balances purposes of Lanham Act against >7>C$needs of free competition; free competition should prevail unless>C>O$we are within the area explicitly carved out for patent (6756) >O>[ >[>g[$ >g>s'  '$$b >s>>s >s > $'  'bXXͲIP 97 Class No. 30]Y̳XX0>>>'  '0>>>>1. Abandonment (685):>>>>Once a mark is owned, how does ownership end? [When ownership ends, who can useit?]>>>>$(a) One way ownership can end is by abandonment. What is abandonment? 2kinds of abandonment in statute (sec. 1127definitions) (Supp 110), which we cancall genericide and traditional P abandonment>? ??$ ??+$(b) Consider traditional P abandonment: ?+?7 ?7?C$$Abandonment is nonuse together with intent to relinquish$$ownership [see section 45 (Supp 110); ?C?[$$nonuse for (3) years can be prima facie evidence of?[?g$$abandonment]?g?s?s?$$[See also sec. 1058 (Supp 82); registration is for 10year$$terms, but after 5 years you must file??$$an affidavit or your registration will be canceled at the??$$6year mark for nonuse]????$$[Registration is for 10year terms. If you dont renew??$$your registration, does that terminate your ownership?]????2. What counts as nonuse with intent not to resume? Consider Major League Baseballv. Sed Non Olet Denarius, Ltd. (685) [L.A. Dodgers v. The Brooklyn Dodger]???@$$$Facts: Plaintiffs used to own Brooklyn Dodgers trademark. Theystopped using it in 1958 when they moved the team to Los Angeles, exceptsporadically for historical retrospectives, until 1981 when they started tolicense it for memorabilia (Tshirts, etc.) but a few of the licenses between1981 and 1988 were restaurantrelated (688). Plaintiff has federal trademarkregistrations for the word "Dodgers" (687) Meanwhile, in 1988 defendantopened a restaurant in Brooklyn called The Brooklyn Dodger and filed forregistration of the mark. Defendants logo, script, etc., is deliberatelysimilar to that of the baseball team (6878).# @@oZ.#@o@{$$L.A. Dodgers sues for infringement and The Brooklyn Dodger$defends on the ground of abandonment. @{@@@$$What must restaurant prove? nonuse + intent not to resume @@ @@$$$nonuse: (689) evidence shows "no commercial  @@$$trademark use" between 19581981 [at that time statute! @@$$only needed 2 years]" @@#@@$$$$$"historical interest" is warehousing and$@@$$$$$not allowed (690)%@@&@A $$$$BUT: L.A. kept using name Dodgers and blue'A A$$$color and particular script! They didn't abandon those,(AA#$$$did they?)A#A/V*A/A; A/9A; $'  'V$$$$$changes aren't "minor" (689)AKAWAWAc$$$$$Brooklyn is more than an appendage (689)AcAoAoA{$$$Still need intent not to resume (69091): A{AAA$$$$interpret this as plaintiff must show that itAA$$$intends to resume commercial use why? (69091)AA AA$$$$$L.A. can't show this? Why not? after AA$$$$$all, they did resume commercial use (691)  AA !AA$$$$$$too late to get it all back? (691) only "AA$$$$$limited to precise uses now#AA$AA$$[Note there was a dilution cause of action in this case as well.%AB $How should the dilution claim come out?]&B B'BB#3. Trademark will also be considered as abandoned if acts of owner cause the markto lose its trademark significance (sec. 1127(2)). This usually refers to thesituation where franchisor doesn't adequately control activities of franchisees. Consider Dawn Donut (693)+B#BS,BSB_$$[Note: assignments in gross are invalid (698), so you can't-B_Bk$simply license a mark. This poses a problem for franchising; see $(628  632)]/BkB0BB$$$Facts: Dawn was wholesaler of Donut mix. It sold mix to retailbakeries who baked donuts and labeled them Dawn. Meanwhile Hart's Food Storesalso sold donuts labeled Dawn, in Rochester, N.Y. #3BBZ.#4BB$Hart's Food Stores defended by arguing that Dawn didn't compete5BB$at retail level in Rochester therefore no likelihood of confusion. Ct heldDawn not likely to expand into Rochester therefore Hart wins.#7BBZ.#8BB$$Hart also defended by arguing that Dawn's inadequate control#9BBZ.#over franchisees constituted abandonment.:BC;CC$$Reason for this doctrine: (695) [otherwise too much <CC$risk public will be unwittingly deceived]!=CC+">C+C7$$Apply here: Dawn had written agreements w/ only#?C7CC$some of its franchisees. Dawn didn't inspect and check$@CCCO$quality. %ACOC[&BC[Cg$$Held? Majority said Dawn passed (not abandoned) but'CCgCs$Judge Lumbard (opinion here) would have remanded for more(DCsC$evidence on whether Dawn's policing was adequate (697) )ECC*FCC4. Now consider abandonment by genericide [loss of distinctiveness].+GCC,HCC$(a) First we have to recall why distinctiveness [notmerely  descriptiveness] is required: -JCC.KCC$$(i)What are the reasons why we dont let people own/LCC$words in ordinary language?0MCC$$$$J1NCC C9NC $J$$$$identify single source [identification, goodwillODD$$$$$rationale]PDD$$$$leave competitors free to describe [free speech,QDD+$$$$$competitive market rationale]RD+D7SD7DC$$(ii)Genericide refers to situation where word begins as (or becomes)distinctive mark, and then over time becomes a word in ordinary languageinstead.#VDCDgZ.#WDgDs$$$Examples: Murphy bed (700); aspirin; thermos;XDsD$$cellophane (702) YDD ZDD$(b) How can owner of mark prevent genericide? [DD \DD$$try to get the mind of the general public not to think of ]DD$your word as generic [see Xerox (704)]^DD_DD$$pressure dictionary writers (703)`DDaDD$$write letters to everyone who tries to use, etc. [either suebDD$everyone or license everyone?]cDEdEE$$put "TM" after word?eEEfEE'$(c) See Carter's suggestion (707) that court's declaration of genericidemight be a taking deserving of compensation. What do you think of this suggestion?hE'E?iE?EK5. Consider murky area where word or mark is arguably needed for communication/free speech but hasn't been abandoned or become generic (still has trademarksignificance). (707 n. 7). ["expressive genericity"; nominative use; parody] lEKEomEoE{$(a) What do you think of Dreyfuss's argument for "expressive genericity"?nE{EoEE$(b) Compare this with parody (L.L. Bean (714))pEEqEE$$'The ridicule conveyed by parody inevitably conflictsrEE$with one of the underlying purposes of the . . . antidilution sEE$statute" [i.e., parody, if successful, will tarnish]!tEE"uEE$$$this is case of 1st A vs. trademark principles: who#vEE$$wins?$wEE%xEE$$$$L.L. Bean case carves out 1st A parody defense&yEF $$$if purpose is noncommercial 'zF F({FF#$$$$$ has the problem that magazine here)|F#F/$$$$was sold! *}F/F;+~F;FG$$$$$and also the problem that whether or,FGFS$$$$not parody is marketed shouldn't make much-FSF_$$$$difference to 1st A principles.F_Fk/FkFw$$$$other courts balance the public interest in0FwF$$$avoiding consumer confusion against the public interest1FF$$$in free expression (719)2FF3FF$$Problem to think about on own: compare trademark treatment of parody6 F9F $6w/copyright treatment of parody: which is more satisfactory? 2 points to thinkabout:FF$$$$FF$$$$1. At least trademark cases explicitly applyFF$$$the 1st AFFFG $$$$2. At least copyright cases recognize thatG G$$$parody can be commercial and cause marketGG#$$$harm and still not cause such market harm in theG#G/$$$manner protected against G/G; G;GG$(c) Nominative use (711): GGGS GSG_$$Refers to situation where an owner's trademark is used by$someone else to refer to the owner, rather than to compete with the owner G_GwGwG$$$$New Kids of the Block (711): Kozinski holdsGG$$$it was OK for a newspaper to conduct reader poll (whichGG$$$it charged for) about popularity of band membersGGGG$$$$Rationale: "Much useful social and commercialGG$$discourse would be all but impossible if speakers were underGG$$threat of an infringement lawsuit every time they made$$reference to a person, company or product by using its$$trademark" (713) GGGG$$$$[Note this defense isn't limited to noncommercialGH$$purposes (even though Kozinski compares with Sony (713))HH$$why not?]HHHH+$$$$$outside the scope of trademark law becauseH+H7$$$$simply used to tell the truth not to confuseH7HC$$$$consumers or trade on somebody else's goodwillHCHO$$$$(713)HOH[H[Hg6. Remedies: HgHs!HsH$(a) Injunction (sec. 1116(a))"HH#HH$(b) Damages (sec. 1117(a), (b))$HH%HH$$ct has broad discretion to award amount that is just, and&HH$may award up to treble damages; treble damages mandated for'HH$"counterfeiting," absent finding of extenuating circumstances(HH)HH$(c) Court can also use equitable remedies such as*HH+HH$$required disclaimers,HI-II$$corrective advertising.II/II'$$$0I'I3$2Y