Fundamentals of Intellectual Property Outline State Law of IP

Rights in Undeveloped Ideas

1) 4 ways to get Something for your ideas a) Express Contract: come with a formalized proposal of a K for an idea, terms of document very important to consider and formulate; limited to contracting parties [court likely to enforce] b) Implied Contract: draft a letter to all possible parties, start talking w/o signing anything, assumes fair course of dealing and that mutual understandings will be implied based on letters, handshakes, conversations; clear understanding of who is contracting [court likely to enforce] c) Quasi-Contract: unjust enrichment, no course of dealing and no K i) 2 Key Concepts (1) Concreteness: not an abstract idea, specificity of idea to label it your idea, less originality the more abstract (2) Uniqueness: new, different, not something anyone else thought of, heavily limited b/c taking away a thought from everyone d) Property Interest: similar to quasi-K but hesitant to lump everything into a property interest w/o some concrete expression

2) Theories of Protection
a) Lueddecke v. Chevrolet Motor Co. i) Plaintiff alleged that through letters between the parties, plaintiff sold and conveyed to defendants ideas on how to correct the defect. Nothing in the correspondence indicated that plaintiff's idea was novel or useful enough to enable plaintiff to assert a property right. ii) Plaintiff did not know whether his suggestion would be necessary or practical and plaintiff had not experimented to determine its effectiveness. Plaintiff had no property right in the mere idea of experimentation. Defendants did not offer to make any agreement to pay plaintiff for his mere suggestion and defendants' correspondence did not invite plaintiff's suggestion. iii) Voluntarily divulging such information made plaintiff's suggestion common property available to defendants. b) Nadel v. Play by Play Toys & Novelties i) In Downey, the NY Ct of Appeals clarified that the novelty requirement in submission of idea cases is different for misappropriation of property and breach of contract claims

(1) In misappropriation claims, the idea must have originality or general novelty to support the claim (a) Why? - The law of property does not protect against the misappropriation or theft of that which is free and available to all (2) For contract-based claims in submission of idea cases, a showing of novelty to the buyer will supply sufficient consideration to support a K ii) Elements to consider when determining novelty: (1) Specificity or generality (2) Uniqueness (3) Commercial availability 3) Limits of Protection: The Place of Ideas in the Competitive Plan a) Copyright Act 301 preempts state law if three conditions are met: i) The work protected by the state law is fixed in a tangible medium of expression, (contract not oral) ii) Work comes within the subject matter of copyright, iii) State law grants a right that is equivalent to any of the exclusive rights within the general scope of copyright b) Generally, if there is an added element in the state law, then it is usually not preempted

Unfair Competition
1) Theories of Protection
a) What does Unfair Competition seek to protect? i) The original investors goodwill ii) Guarding against competitors deceptive acts iii) Preventing consumer confusion b) Misrepresentation deals with the situation in which a businesss use of deceptive or misleading representation in marketing its goods or services is likely not only to deceive consumers, but also to injury a competitors commercial interest i) 2 branches of unfair competition: (1) Passing off when misrepresentations relate to the source of goods or services, this branch of unfair competition regulates the misrepresentations (2) Misrepresentation when the deceptive representation relates to the qualities or characteristics of the goods or services, the unfair competition claim sounds in misrepresentation c) Misappropriation i) Competing policies: (1) Protection should be afforded one who expends labor and money to develop products (2) Freedom to imitate and duplicate is vital to the free market economy ii) Whether protection against misappropriation is necessary to foster creativity depends in part upon the expectations of that sector of the business community which deals with the particular intangible

Trade Secrets
1) Definition - any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. 2) Theory of Protection
a) Why protect? commercial morality, trade secret law helps prevent a wild west commercial environment i) Overall policy: trade secret law serves to protect the standards of commercial morality and encourage invention and innovation while maintaining the public interest in having open competition in the manufacture and sale of unpatented goods b) Factors to determine whether its a trade secret: i) Extent to which the info is known outside plaintiffs business ii) Extent to which it is known to employees and others involved in the business iii) Measures taken by claimant to guard the secret iv) Value of the information to the secret holder v) Ease or difficulty with which the information could be acquired or copied by others c) Trade secret doesnt have to be unique or novel, but at least must possess a modicum of originality which separates it from everyday knowledge d) Must always consider the steps taken by plaintiff to conceal the secret and whether the secret contains some actual or potential economic value e) Restatement of Torts Formulation: i) One who discloses or uses anothers trade secret, without a privilege to do so, is liable to the other if: (1) He discovered the secret by improper means, or (2) His disclosure or use constitutes a breach of confidence f) When may you use anothers trade secret? i) If you discover the process by reverse engineering applies to the finished product ii) If you discover it by your own independent research (1) However, one may not avoid these labors by taking the process from the discoverer without his permission at a time when he taking reasonable precautions to maintain its secrecy g) Remedies i) How valuable was the trade secret to the Plaintiff? then base a reasonable royalty on that ii) Injunction but how long should it last?

(1) Majority view only as long as it remains a secret. Once that information becomes public, then the injunction is ended (2) Minority view if we want to encourage commercial morality then someone should benefit when it becomes public 3) Limits of Protection a) Personal Limits: Restraints on Post-Employment Competition i) Trade secret misappropriation Defendant has new job: P can prove trade secret misappropriation by showing defendants new employment will inevitably lead him to rely on the plaintiffs trade secrets ii) If an injunction issues, where do you draw the line w/r/t employment? (1) Ask, will employee be using just general skills? Or will the employee be using specific information (a) If you have specific information rising to level of trade secret, courts more likely to enjoin you from utilizing that type of information w/ your subsequent employer iii) Negative Covenants Restricting Competition (1) Judicial disfavor in enforcing these agreements (2) Only enforceable to the extent they are reasonable look to: (a) Reasonable in time and area? (b) Necessary to protect employers legitimate interests? (c) Not harmful to general public (d) Not unreasonably burdensome to the employee b) Economic Interests: The Place of Ideas in the Competitive Plan i) Copyright Act 301 preempts state law if three conditions are met: (1) The work protected by the state law is fixed in a tangible medium of expression, (contract not oral) (2) Work comes within the subject matter of copyright, (3) State law grants a right that is equivalent to any of the exclusive rights within the general scope of copyright ii) Generally, if there is an added element in the state law, then it is usually not preempted

Right of Publicity
1) Theory of Protection
a) The right of publicity protects the celebritys pecuniary interest in the commercial exploitation of his identity i) If the celebritys identity is commercially exploited, there has been an invasion of his right whether or not his name or likeness is used ii) An identity may be exploited even if the persons name or picture is not used, as long as what is used clearly identifies the wronged person (1) Right of publicity can extend to look-a-likes, sound-a-likes b) Equitable relief will be granted if there is likelihood of confusion. Factors to consider: i) Strength of plaintiffs mark ii) Relatedness of the goods iii) Similarity of the marks iv) Evidence of actual confusion v) Marketing channels used vi) Likely degree of purchaser care vii) Defendants intent in selecting the mark viii) Likelihood of expansion of the product lines c) Strength of mark refers to level of recognition of the celebrity d) In determining intent, relevant question is whether defendant intended to profit by confusing consumers 2) Limits of Protection a) First amendment v. right of publicity: i) In balancing between First Amendment and right to publicity, test is whether work adds significant creative elements as to be transformed into something more than a mere celebrity likeness or imitation. ii) Another way to formulate the test is: (1) Whether a product containing a celebritys likeness is so transformed that it has become primarily the defendants own expression rather than the celebritys likeness iii) Reasoning (1) When artistic expression takes the form of a literal depiction or imitation of a celebrity for commercial gain, directly trespassing on the right of publicity without adding significant expression beyond that trespass, the state law interest in protecting the fruits of artistic labor outweighs the expressive interests of the imitative artists b) How a claim works: i) Artist faced with right of publicity challenge (1) He/she may raise 1st amendment as affirmative defense inasmuch as it contains significant transformative elements

Federal Law of Intellectual Property

Trademark Law
1) Theories of Protection: Passing Off
a) Rule- the imitator of anothers goods must sell them as his own production. He cannot lawfully palm them off on the public as the goods of his competitor b) Calculus of Passing Off: i) Unfair competition seeks to accommodate the interest of businesses is choosing and investing in symbols that will capture their goodwill, and the interest of consumers in being free from confusion about the source of goods and services, by protecting: (1) The first to use a name, brand or other symbol in connection w/ sale of goods/services AGAINST (2) Another competitor whose subsequent use of the symbol (3) Confuses, or is likely to confuse, consumers into believing that the first user, rather than the competitor, is the source of the goods or services

2) Requirements for Protection

a) Use and Use in Commerce i) Distinction between TM applications based on use and applications based on intent to use (1) Based on Use (a) PTO will review the app for compliance with statutory formalities. If it qualifies for statutory protection it will be published in the Official Gazette for purposes of opposition. If no one opposes the application, the PTO will then register the mark (b) If you file based on use you have to submit a specimen to show how the mark is being used (2) Intent to use (ITU) (a) Same initial steps as applications based on use. Difference lies after the opposition period. If no one successfully opposes the application the PTO will issue a "notice of allowance" (i) Following the notice of allowance, it will register the mark if, within six months, the applicant files a verified statement that the mark is in use in commerce (b) Applicant gains "constructive use" by filing this type of application (i) Filing the application "shall constitute constructive use of the mark, conferring a right of priority, nationwide in effect, on or in connection with the goods or services specified in the registration (c) The filing of the ITU application constitutes constructive use as of the filing date, with nationwide priority over anyone else w/ 3 exceptions: (i) Someone has used it, (ii) Filed, or (iii) Has earlier effective foreign priority date before your filing,

1. Then constructive use doesnt apply (prior user, prior applicant, someone with earlier effective foreign priority date) ii) Use for Priority v. Use for Registration (1) What constitutes Use for Priority? (a) Test: (i) Adoption (ii) Essential test - Use in a way sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark 1. Use analogous to TM use is ok to establish priority (b) Typical Scenario (i) Mark used in advertisement for product which not yet sold 1. If the product is sufficiently advertised so that a substantial amount of public will associate the use with the owner (2) What constitutes Use for Registration? (a) Technical trademark use (i) Goods - mark is used in connection with the goods and sold (ii) Services - mark is used in connection with the services (iii) Need use in commerce 1. Use in commerce a. Gastown case - court ruled that use in commerce includes use in intrastate commerce that directly affects interstate commerce b. Concept of what constitutes 'in commerce' is ever broadening iii) ITU Applicant rights v. First Commercial User (1) I.e., A files ITU, B commences commercial use (a) B brings suit. Can A be preliminarily enjoined from engaging in commercial use reqd for full registration on a motion by B? (i) No, as long as As ITU privilege has not expired 1. Reasoning: ITUs permit the holder of the ITU to use the mark in commerce, obtain registration, and thereby secure priority retroactive to the date of filing the ITU application (ii) However, if B can demonstrate that it used the mark before the holder filed its ITU application or that filing was invalid, may be entitled to an injunction (b) Could A sue B on the same facts? (i) No, there would be no instance for likelihood of confusion to the consumers since they have not used it yet (ii) Constructive use can be used defensively but not offensively to prevent someone else from using the mark if they have not yet used the mark in commerce

b) Distinctiveness and Related Statutory Standards i) Relative Inquiry 2 questions (1) Does the Plaintiff have a protectable property right in the name it seeks to defend from use by others? (a) The Mark must be sufficiently distinctive or must have acquired secondary meaning (2) Was there infringement? Judged by likelihood of confusion ii) 4 Categories of Protectable (or not Protectable) Marks: (1) Arbitrary mark does not relate to goods at all (i.e. Apple, Kodak) (a) Protectable - Inherently distinctive (2) Suggestive suggests a characteristic & requires imagination by consumer in order to be understood as descriptive (a) Protectable - Inherently distinctive (3) Descriptive (a) Only protectable, if at all, if it has acquired secondary meaning NOT inherently distinctive (b) If merely descriptive, they have to be in the public domain, otherwise competitors cant use those terms to describe their goods (c) Test for determining whether suggestive or descriptive: (i) Imagination test how much imagination required on part of consumer in trying to pull some indication from the mark about the qualities, characteristics, effect, purpose, or ingredients of the product or service more imagination cuts toward suggestive (ii) Are sellers of similar product likely to use, or actually do use, the term in connection with their goods? cuts toward descriptive (d) Secondary meaning (i) Plaintiff must show that the primary significance of the term in the mind of the consuming public is not the product but the producer (ii) 5 types of evidence considered in ascertaining whether secondary meaning has attached to a mark: 1. Survey evidence 2. The length and manner of use of the name 3. The nature and extent of advertising and promotion of the name 4. The volume of sales; and 5. Instances of actual confusion (4) Generic (a) Never protectable by TM

(b) Refers to the product as opposed to the source. Where the term refers to product, you cant protect it/get exclusive rights to it (c) TMs are supposed to identify source, not product - thats the basic dichotomy the law makes (d) No specific statutory section to have refusal on being generic (i) So its rejected on mere-descriptiveness iii) Deceptive Matter (1) Section 2(a) of the Lanham Act bars registration of a mark which consists of or comprises deceptive matter (2) That a mark or part of a mark may be inapt or misdescriptive as applied to an applicant's goods does not make it deceptive (3) Registerable? (a) Deceptively misdescriptive marks can be registered upon proof of secondary meaning under section 29(f) (b) Deceptive marks can never be registered (4) In relation to deceptive misdescriptiveness, we use this standard: (a) Is the term misdescriptive of the character, quality, function, composition or use of the goods (b) If so, are prospective buyers likely to believe that the misdescription actually describes the goods (c) If so, is the misdescription likely to affect the decision to purchase iv) Confusing Similarity to Prior Marks (1) Most common refusal of registration is confusing similarity to prior marks (2) Confusing similarity factors: (a) Similarity of marks, are they identical? (look alike, sound alike, commercial impression imparted) (b) Similarity of goods. Specific nature of goods (c) Whether there are sophisticated purchasers (d) Cost of good/service (3) Other considerations (a) The closer the marks are, the farther away the goods can be to support a likelihood of confusion (b) Analyzing the marks, especially ones w/ more than one design/word (i) Have to look at the marks in their entirety, but its not improper to bisect the marks and give less weight to the less distinctive part of the mark and more weight to the more distinctive part

(c) Consent to use agreement? (i) Should be given great weight (ii) However, no weight to naked consent agreements v) Merely Descriptive or Deceptively Misdescriptive (1) Because one merchandiser has latched onto one of the descriptive terms does not mean it can force its competitors to limit themselves to the use of the others; All of the generic names for a product belong in the public domain vi) Primarily Geographically Descriptive or Deceptively Misdescriptive (1) To support a refusal on the grounds that the mark is geographically misdescriptive, have to show the fact that the goods dont come from there have a material effect on t he publics purchasing decision (2) When is this analysis applicable? (a) Mark must contain a geographic place (b) There has to be a goods-place association (i) If the goods do come from the place, it will be refused as geographically descriptive (2(e)(2) refusal) 1. However, can still be protected/registered if has secondary meaning (ii) If the goods do not come from the place and the misrepresentation would materially affect the publics decision to purchase the goods, it will be refused as geographically deceptively misdescriptive (NAFTA 2(e)(3) refusal) 1. No amount of secondary meaning will allow protection c) Statutory Subject Matter i) Types of Marks 4 Categories (1) Trademarks (a) "word, name, symbol, or device, or any combination thereof, that a person either uses or has a bona fide intention to use (2) Service marks (a) "word, name, symbol, or device, or any combination thereof, that a person either uses or has a bona fide intention to use (3) Collective marks (a) a trademark or service mark used by the members of a cooperative, an association or other collective group or organization [or which such an entity has a bona fide intention to use], and includes marks used to indicate membership in a union, an association or other organization (b) 2 types: (i) Collective trademark or collective service mark (ii) Collective membership mark

(4) Certification marks (a) word, name, symbol, or device, or any combination thereof but one that is used (or intended for use) by a person other than its owner (i) Anyone who meets the standards has to be able to use the certification mark, you can't discriminate ii) Content (1) Functionality Doctrine (a) Prevents TM law, which seeks to promote competition by protecting a firm's reputation, from instead inhibiting legitimate competition by allowing a producer to control a useful product feature (b) Product features are functional cannot serve as a trademark - if it is essential to the use or purpose of the article or if it affects the cost or quality of the article (i) In other words, if exclusive use of the feature would put competitors at a significant non-reputation-related disadvantage (c) Overall policy: (i) Dont want to protect if to protect it would have an adverse effect on competition

3) Administrative Procedures
a) See notes

4) Rights and Remedies

a) Rights - Geographic Boundaries i) Zone of natural expansion (1) If the use of the marks by the registrant and the unauthorized user are confined to two sufficiently distinct and geographically separate markets, with no likelihood that the registrant will expand his use into defendant's market, so that no public confusion is possible, then the registrant is not entitled to enjoin the junior user's of the mark (2) Ex. 2 companies use same mark, same product, in different parts of the country (a) One co., (A), moves into Bs territory and sues B for TM infringement (b) W/in Bs jurisdiction, B owns that mark because consumers associate that product with Bs territory (c) As natural zone of expansion did not fall w/in Bs jurisdiction (d) Constructive use wont help A here because of the earlier use exception (i) Dont get constructive use and constructive notice confused (kicks in at the time the registration issues) ii) Common law principle Tea Rose/Rectanus Doctrine (1) Has been carried into the Lanham Act (2) Under the act today, if Bs first use of the mark took place before A filed to get a registration, and B is a good faith junior user in a remote geographic area, B has better rights to the use of that mark in that remote geographic area and can even expand its

use of the mark up until the time that a registration issues in favor of A, at which point Bs geographical expansion is cut off iii) Presumption of federal registration (1) Registration presumes you get the right to use the mark nationwide iv) Concurrent Use (1) As a general rule in concurrent use proceedings between to applicants, the senior user is entitled to a registration covering the entire US, less the area in which the junior user has established territorial rights. (a) But, territorial rights need not to be coextensive with territorial use v) Constructive Notice v. Constructive Use (1) Constructive Notice 2 consequences (a) Prevents a junior user who begins her use after the date of the senior user's registration from acquiring any right to use the mark, and (b) It confines the rights of any senior, unregistered user to the territory that the user occupied at the time of the registration (2) Constructive Use (a) Prevents a junior user from acquiring any right to use the mark after the application's filing date, so long as a registration ultimately issues; it does not, however, freeze the rights of any senior unregistered user vi) Related Use Doctrine (1) A - uses mark on shirts (2) B - uses mark on socks (3) A - uses mark on socks (a) Who has better right to the use of the mark on socks ? (b) A would be considered to have better rights because of the relatedness of the goods b) Rights Dilution Under State Law i) One can recover on dilution, even though there is no likelihood of confusion. There can still be injury to the selling power of the trademark ii) Standard to make a claim under dilution: (1) Marks must be very or substantially similar, absent such similarity, there can be no viable claim of dilution iii) 2 ways to show dilution of a mark: (1) Blurring - Diluting of the distinctiveness of the Ps mark (a) If a reasonable buyer is not at all likely to link the two uses of the trademark in his or her own mind, even subtly or subliminally, then there can be no dilution (i) Dilution theory presumes some kind of mental association in the reasonable buyers mind between the two partys uses of the mark

(ii) This mental association may be created where the P's mark is very famous and therefore has a distinctive quality for a significant percentage of the defendant's mar (2) Tarnishment Ds use of the mark tarnishes the reputation of Ps mark (a) Generally talking about situations where D's use of its mark is in connection with shoddy merchandise or in connections with something that some people might consider to be offensive in some way. iv) Factors militating against finding of dilution: (1) Ps mark must possess a distinctive quality capable of dilution (2) Plaintiff must show a likelihood of dilution c) Rights Dilution Under Federal Law i) Federal Trademark Dilution Act (FTDA) (1) Defines dilution as the lessening of the capacity of a famous mark to identify and distinguish goods or services (2) Congress said the test for recovering for dilution is no longer the need to show actual dilution but likelihood of dilution is sufficient ii) As in state law, federal dilution is actionable in 2 situations: (1) Dilution by blurring (a) An association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark and may be found regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury (b) 6 factors to determine whether there is dilution by blurring (i) The degree of similarity between the mark or trade name and the famous mark 1. In determining similarity, consider differences in the ways the marks are presented, look to the overall impression created and the context (ii) The degree of inherent or acquired distinctiveness of the famous mark (iii) The extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark (iv) The degree of recognition of the famous mark (v) Whether the user of the mark or trade name intended to create an association with the famous mark (vi) Any actual association between the mark or trade name and the famous mark. (2) Dilution by tarnishment (a) Dilution by tarnishment is an "association arising from the similarity between a mark or a trade name and a famous mark that harms the reputation of the famous mark (b) TM may be tarnished when (i) Linked to products of shoddy quality

(ii) Portrayed in an unwholesome or unsavory context, with the result that the public will associate the lack of quality or lack of prestige in the defendants good with the Ps unrelated goods d) Limitations on Rights i) Fair Use (1) Classic Use for fair use: (a) Using a term in its primary descriptive manner to describe and aspect of its product or service. (i) In these cases the D is using the term in issue not as a TM but just to describe some aspect of its product. (ii) Arises where P's mark starts at merely descriptive, acquires secondary meaning, and then somebody else wants to use that term to describe some aspect of their product. The D has to be allowed to do that to describe their product (2) Nominative Fair Use (a) D is using the term at issue to describe the Ps product, or referring to the P (b) Commercial user entitled to the nominative fair use defense if 3 requirements are met: (i) The product or service in question must be one not readily identifiable without use of the trademark; (ii) Only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and (iii) The user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the TM holder (c) Policy - the D is not trying to trade on the good will of the Ps mark, but merely referring to the Ps mark as a short hand reference where there is really no other way of doing it. Not using the term at issue as a source identifier (3) Parody (a) Defined as a simple form of entertainment conveyed by juxtaposing the irreverent representation of the TM with the idealized image created by the mark's owner (b) A parody must convey two simultaneous - and contradictory - messages: (i) That it is the original, (ii) But also that it is not the original and is instead a parody 1. This message must not only differentiate the alleged parody from the original but must also communicate some articulable element of satire, ridicule, joking, or amusement e) Limitations on Dilution i) Literary titles do not violate Lanham Act unless: (1) The title has no artistic relevance to the underlying work whatsoever, or, if it has some artistic relevance, unless the title explicitly misleads as to the source or the content of the work

ii) 3 statutory exemptions potentially dilutive by nevertheless permitted: (1) Comparative advertising (2) News reporting and commentary (3) Noncommercial use (a) Noncommercial use refers to a use that consists entirely of noncommercial, or fully constitutionally protected, speech (b) Def'n of commercial speech: "although the boundary between commercial and noncommercial speech has yet to be clearly delineated, the 'core notion of commercial speech' is that is 'does no more than propose a commercial transaction.' iii) Parody (1) A parody is not automatically a complete defense to a claim of dilution by blurring where the defendant uses the parody as its own designation of source, i.e. as a trademark (a) Parody only protected by fair use defense only if the parody not a designation of source for the persons own goods or services f) Remedies i) Accounting of Profits (1) Should be granted if: (a) The defendant is unjustly enriched (b) If the P sustained damages from the infringement, or (c) If an accounting is necessary to deter a willful infringer from doing so again ii) 90-95% of TM cases, if successful in establishing liability, you are going to get an injunction iii) Statutory (sect. 35 of Lanham Act) (1) In certain circumstances where the defendant has been found to be particularly egregious, the court can treble (3x) the damages (2) In exceptional cases, the P can recover its attorneys fees iv) Award of profits (1) If the P can show that the D acted willfully v) Burden (1) P has burden to show what the profits are, and then the burden shifts to the D to show if there were any deductions vi) Actual Damages (1) Damages can consist of loss sales, lesser or lower profit margin (2) Many courts will say you cannot get an award of damages unless you can show actual confusion (3) Cannot recover for the same injury twice, so if your injury is already being compensated through lost sales, your not going to be awarded damages through loss profits vii) Dilution remedies

(1) Unless you can establish that D acted willfully the remedy is only going to be an injunction g) Secondary Liability i) Contributory Infringement (1) If a mfr or distributor intentionally induces another to infringe a TM, or if it continues to supply its product to one whom it knows or has reason to know is engaging in TM infringement, the mfr or distributor is contributorially responsible for any harm done as a result of the deceit ii) Contributory infringement and Service providers (1) Service provider may be contributorially liable for infringing conduct of another if: (a) If the service provider "intentionally induces another to infringe a TM, and (b) If the service provider continues to supply its service to one whom it knows or has reason to know is engaging in TM infringement (i) More than general knowledge or reason to know that its service is being used to sell counterfeit goods (ii) Some contemporary knowledge or reason to know of which particular listings are infringing or will infringe in the future is necessary (2) Cannot be liability under secondary liability unless there is direct liability/infringement (3) Service provider not permitted willful blindness cannot shield itself by looking the other way (a) Willful blindness is equivalent to actual knowledge for purposes of the Lanham Act h) Infringement i) Polaroid factors to help determine whether Ds mark infringes Ps mark: (1) Strength of P's mark (a) Refers to distinctiveness of the mark, its tendency to identify the goods sold under the mark as emanating from a particular source (b) Determined by looking at two things: (i) Conceptual strength 1. Generic, descriptive, suggestive, arbitrary, or fanciful? (ii) Commercial strength 1. Same factors to determine whether secondary meaning exists 2. Depends on actual market place recognition (2) Similarity of the marks (a) Sight, sound, connotation or commercial impression (3) Similarity of the goods or services (proximity of the goods) (a) Goods dont have to be identical or even be competitive but have to be related in enough ways so that there is a likelihood of confusion (i) Closer the marks, further apart the goods can be (ii) Closer the goods are, further apart the marks can be (b) Measured by whether the products are: (1) complementary; (2) sold to the same class of purchasers; and (3) similar in use and function

(i) Proximity becomes less important when the products are adequately labeled and the consumers are more sophisticated because then consumers would merely be confronted with choices among similar products. (4) Actual confusion (a) Usually dont have to show actual confusion in order to win (b) Sometimes actual confusion is difficult to obtain (5) Sophistication of the purchasing public (a) The more expensive the product is, the more care the consumer will exercise before making the purchasing decision, therefore the less likely that person will be confused (6) Intent (a) Dont have to show intent to win (b) But if there is evidence of bad faith, most often the P is going to win (7) Marketing channels (a) i.e. Retail v. wholesale (8) Advertising ii) No side by side comparison (1) However if the products would be side by side in a grocery store then such comparison would be appropriate iii) Anti-Dissection Rule (1) Analyzing two marks for likelihood of confusion when they consist of more than one work and a design (a) They have to be looked at in their entireties, but its not improper to give more weight to the more distinctive part of the mark i) Trade Dress and Federal Unfair Competition Law i) Trade Dress i) Defn overall appearance or image of a business ii) Essentially 2 branches of trade dress protection: (1) Packaging (2) Product design/product configuration iii) Trade dress must be nonfunctional (1) In order for trade dress to be protectable/for P to prevail, the trade dress has to be non functional (a) A product feature is functional if it is essential to the use or purpose of the article or if it affects the cost or quantity of the article (b) Competitive necessity (i) A functional feature is one the exclusive use of which would not put competitors at a significant non-reputation-related disadvantage (ii) Looking at competitive necessity is appropriate in cases of aesthetic functionality

(c) If the trade dress is not registered, then the burden is on the P to establish that the trade dress is nonfunctional (i) Also have to establish likelihood of confusion generally look to same factors as word marks iv) No special rules w/r/t trade dress general principles in the Lanham Act apply v) Product design v. Packaging (1) Difficult to distinguish between product design and product packaging (a) However, to the extent that these are close cases, courts should err on the side of caution and classify ambiguous trade dress as product design (i) Product design Can never be inherently distinctive 1. Cannot be protected under section 43(a) w/out a showing of secondary meaning

Federal Law of Intellectual Property

Patent Law
1) Requirements for Protection
a) Statutory Subject Matter (35 USC 101) i) Live, man-made micro-organism is patentable subject matter under 101 (Chakrabarty) (1) By using the language any manufacture or composition of matter, Congress contemplated that patent laws should be given wide scope ii) 3 exceptions to 101s broad patent-eligibility: (1) Laws of nature (2) Physical phenomena (3) Abstract ideas iii) Process Patents (1) Federal Circuits test for determining patent eligibility of a process: machine or transformation test: (a) a claimed process is surely patent-eligible under 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing (2) SCOTUS said machine or transformation test not the sole test for determining patent eligibility of a process, but rather a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under 101. iv) Business Method Patents (1) No categorical exclusion of business method patents v) Process patents including a law of nature (1) If a law of nature not patentable, then neither is a process reciting a law of nature (a) Unless that process has additional features that provide practical assurance that the process is more than a drafting effort design to monopolize the law of nature itself Statutory Standards 1) Novelty (35 USC 102) a) Prior knowledge? 2 criteria i) Prior knowledge of an invention must be publicly known, not secret ii) Public knowledge standard: (1) In order for there to be public knowledge, should look to whether the disclosure is sufficient to enable one skilled in the art to reduce the disclosed invention to practice (2) Does not need to be reduced to practice to be prior knowledge b) Effective 102 refusal:

i) The single reference has to disclose every element of the claimed invention, either explicitly or inherently c) AIA changes i) SEE NOTE 2 PG 457 d) On-sale Bar (102(b)) i) Applies when two conditions are satisfied before the critical date (1 year before the filing of the patent application) ii) Precludes the patenting of an invention if the invention: (1) Is the subject of a commercial offer for sale and (2) Is ready for patenting (a) Can be proved if: (i) Invention has been reduced to practice before critical date or (ii) Sufficiently described, prior to the critical date, to enable a person skilled in the art to practice the invention e) Grace period i) One year grace period that the device can be on sale before you have to file patent application (1) If you file w/in grace period, then the on-sale activity is not invalidating prior art (2) If filing occurs more than one year before filing date, then the inventor loses the right to the invention and loses the right to get a patent ii) Policy if it out there for the public, people have a reasonable expectation that it is in the public domain iii) This grace period exists in new AIA f) Statutory Bar - Public Use Bar (102(b)) i) "[a] person shall be entitled to a patent unless(b) the invention wasin public usein this country, more than one year prior to the date of the application for patent in the United States." ii) Non-secret use? (1) Non-secret use prior to patenting does not in itself invalidate the patent (a) So long as the pre-patent use is controlled by the inventor and the invention is not made available to the public at large, non-secret use is ok iii) Policy: (1) Encourages inventors to assert their right to a patent with due diligence. (2) Simultaneously, it protects the public in its use of invention, (a) Encourages prompt disclosure of new and useful information, and (b) Discourages attempts to extend the length of the period of patent protection. iv) Experimental Use (1) If experimental use applies, then the statutory bar and grace period are not applicable (2) SEE FACTORS, NOTE 6 PG. 477

v) Presumption of Validity (1) 35 USC 282 places the burden of proof upon the party attacking the validity of the patent, and that burden of persuasion does not shift at any time to the patent owner vi) Changes under the AIA (1) If you, the inventor, disclose it within one year prior to the filing date, you're ok (2) If you disclose, and then someone else discloses, and then you file w/in one year from youre disclosure, then youre also ok (3) PTO's interpretation - if you disclose w/in one year, and then somone else dislcoses something very similar to what you have done, then you cannot take advantage of the grace period because it occurred prior to the filing of your application vii) Another major change (1) AIA establishes a grace period in some cases of third party disclosure, but for an inventor to qualify he or she must disclose prior to the third party disclosure. (a) If not, there is no grace period and later filed patent application will fail novelty test. (b) If you do, then as long as you filed within one year of first disclosure (your disclosure, not the third party's disclosure), then the application will meet 102 (2) This is a departure from old law, which incurred a once year grace period g) Priority (35 USC 102(g)) i) Under current law, patent granted to the first to invent, not first to apply (1) If the first inventor resumes work on the invention before the second inventor begins, the patent goes to the first inventor (a) The first inventor can show activity following reduction to practice to rebut an assumption of concealment or as evidence of renewed activity regarding the invention (2) Concealment (a) Legal inference of concealment based on "too long" delay between reduction to practice and application can be rebutted with evidence of resumption of activity on the invention prior to the earliest date to be claimed by the second inventor ii) AIA Changes (1) 102(g) is not carried forth in new AIA (a) Going to a first to file system gets rid of priority contests between two inventors in inference proceedings (b) Primary difference when we go to first to invent system is that we still have a grace period, whereas in the rest of the world there is no grace period. Other countries are absolute novelty requirement (2) Emphasize that we are moving to first inventor to file (a) Derivation proceeding - allows the true inventor to institute this proceeding and have the PTO make a determination as to who was the true inventor (3) Prior User Rights - note 4 pg. 484

2) Nonobviousness (35 USC 103) a) 103 - Patentability is to depend, in addition to novelty and utility, upon the non-obvious nature of the subject matter sought to be patented to a person having ordinary skill in the pertinent art b) Standard: i) Whether the inventions set forth in the claims, each as a whole, would have been obvious to one of ordinary skill in the art when they were made, in view of the teachings of the prior art as a whole c) SCOTUS provided an analytical framework here that the courts and PTO can utilize in making the nonobviousness determination: i) Scope and content of prior art (1) PRIOR ART Any prior knowledge or activity regarding a particular invention, that may be considered by the Patent and Trademark Office, in granting or denying a patent application or by the court in determining a patent infringement action (2) Standard: (a) Is it reasonably pertinent to the particular problem with which the inventor was involved? ii) Differences between claimed invention and the prior art iii) Ordinary skill in the art iv) Secondary considerations (1) Commercial success: (a) In order for commercial success so show non-obviousness, you also have to show there is a nexus between the commercial success enjoyed by the product and the invention. If the commercial success is attributable to the fact that the company has a large marketing budget, then the fact there is commercial success is not going to be particularly relevant (2) Long felt but unsolved needs, (3) The failure of others, (4) Industry acquiescence (a) One way it can be demonstrated is if a number of other companies in the industry have taken a license - leads the courts to assume that the taking of a license shows the invention is valid because otherwise you wouldnt take the license d) Obviousness is a legal question based on factual evidence e) AIA Changes i) Under AIA nonobviousness will be measure at the time of filing, not at the time of invention

f) KSR and the TSM Test i) Teaching, suggestion, motivation test used by the Federal Circuit: (1) A patent claim is only proved obvious if "some motivation or suggestion to combine the prior art teachings" can be found in the prior art, the nature of the problem, or the knowledge of a person having ordinary skill in the art." (2) The logic behind this test was that hindsight was the real problem with patent law (3) The other thing that was happening was the insistency on using secondary considerations ii) SCOTUS in KSR said that the TSM test is not the end all be all test its a good starting point but it shouldnt be trapped in the rigidness of finding some motivation (1) Also said, w/r/t determining scope and content of prior art, (a) Youre not limited to prior art focusing on the particular problem which the patentee is addressing, but the particular problem that is being addressed by the patent claims - its a broader inquiry (2) Obvious to try (a) SCOTUS said obvious to try is a relevant factor (b) A person of ordinary skill is also a person of ordinary creativity, not an automaton (c) It determining whether something is obvious you have to apply common sense g) Section 102 and 103 in Concert: What is Prior art? i) When does something become prior art? (1) The disclosures contained in the patent become a part of the prior art as of the time the application was filed, not at the time the patent is issued (2) A co-pending application in the PTO is prior art: (a) "The delays of the patent office ought not to cut down the effect of what has been done[the first applicant] had taken steps that would make it public as soon as the Patent Office did its work, although, of course, amendments might be required of him before the end could be reached. We see no reason in the words of policy of the law for allowing [the second applicant] to profit by the delay." ii) Difference between novelty and loss of right (1) There may be novelty when an inventor invents his invention, but if he sleeps on his rights and does not file he will not be entitled to a patent as a matter of policy (a) What starts the period running is clearly the availability of the invention to the public through the categories of disclosure in 102(b), which include a printed publication anywhere describing the invention. (i) If the reference contains enough disclosure to make his invention obvious, the principle of the statute would seem to require denial of a patent to him (ii) The same is true where a combination of two publications or patents makes the invention obvious and they both have dates more than a year before the filing date

3) Utility a) 35 U.S.C.S. 101 Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title. i) Law requires that the invention not be frivolous or injurious to the well-being, good policy, or sound morals of society ii) No qualification of general utility in the statutes b) Process claims i) Until the process claim has been reduced to production of product shown to be useful, the metes and bounds of that monopoly are not capable of precise delineation ii) Unless and until a process is refined and developed to this point where specific benefit exists in currently available form there is insufficient justification for permitting an applicant to engross what may prove to be a broad field iii) A patent is not a hunting license. It is not a reward for the search, but compensation for its successful conclusion 4) Inventorship a) For a valid patent to issue, the claimed invention must have originated with the applicant or applicant i) The law is that the inventor or inventors are the ones who are entitled to a patent 5) Enabling Disclosure (35 USC 112) a) Contains the written description, enablement and best mode requirements i) Subjective tests b) Best mode requirement is subjective to the inventor at the time of filing i) You have to disclose best mode to get your patent, (1) But if you get your patent it wont be invalidated if you did not disclose best mode c) Subsequently developed formulae cannot be used to render non-enabling or indefinite that which was enabling and definite at the time the application was filed i) A patent is not invalid because of a need for experimentation (1) A patent is invalid only when those skilled in the art are required to engage in undue experimentation to practice the invention ii) Distinguishing what infringes from what doesnt is the role of the claims, not the specification. Infringement 1) Direct Infringement (aka literal infringement) a) Look at the claims and the infringed product. Does it contain each and every element of the claimed invention? i) If it does, there is direct infringement and it is the end of the case

2) Doctrine of Equivalents a) Rule that two inventions are the same for purposes of patent infringement if they achieve essentially the same result in the same manner despite trivial differences i) If the alleged infringing product has the same function, operates in the same way, and produces the same result, then there is infringement under the doctrine of equivalents ii) Probative Inquiry in determining equivalence: (1) Does the accused product or process contain elements identical or equivalent to each claimed element of the patented invention b) Doctrine of equivalents must be applied to individual elements of the claim, and not to the invention as a whole c) Proper time for evaluating equivalency is at the time of infringement, not at the time the patent was issued 3) Prosecution History Estoppel (aka File Wrapper Estoppel) a) Available as a defense to infringement i) States that the difference between the original claims the claim and narrowed/amended cannot be recaptured (1) Not going to be able to rely on the doctrine of equivalents to recover on a claim of infringement based on the doctrine of equivalents ii) If alleged infringer raises prosecution history estoppel, patentee must show that the purpose for the amendment was not related to patentability (1) If they are successful, the doctrine of prosecution history estoppel is precluded (a) However, if they are not successful in establishing such a purpose, a court should presume that the purpose behind the required amendment was related to patentability (2) Presumption places burden on patentee to show: (a) The amendment was not made for any reason dealing with patentability (i.e. to avoid prior art), and (b) That the amended claim might still be infringed under the Doctrine of Equivalents iii) Scope of Prosecution History Estoppel (1) May apply to any claim amendment made to satisfy Patent Acts requirements (2) Amendment is not an absolute bar to a claim of infringement under the doctrine of equivalents Rights and Remedies 1) Rights a) Right to exclude is the patent monopoly for a period of 20 years i) One infringes a patent if he begins manufacture of a patented product during the life of the patent, even if he does not complete it until after the patent's expiration ii) Repair does not infringe

(1) One does not infringe a patent when he replaces worn-out parts on a patented product with parts that alter its function iii) Reconstruction, however, does infringe. (1) It is a form of making, which is specifically included in statutory language 2) Remedies a) 35 USC 284 damages adequate to compensate for the infringement 2 methods: i) Reasonably royalty (1) This is a floor for damages (2) Recoverability: (a) To find an award for reasonable royalty - court puts itself in the position of the parties at the time the infringement took place (i) Look to similar agreements for similar technologies. (ii) Or better yet, if the patentee has licensed its product to others, what are its terms? ii) Lost profits (1) Theory as a result of the infringement, I have lost money on those sales (2) Recoverability: (a) Patentee must show a reasonable probability that but for the infringement, it would have made the sales that were made by the infringer (b) If a particular injury is reasonably foreseeable by an infringing competitor, then that injury is generally compensable (3) Patentee is entitled to all the damages that flow from the infringement of the manufacture or sale of his/her invention (a) Entire market value rule: (i) If there is some functional relationship between the patented and unpatented items, then the patentee could recover damages based on lost sales or reasonable warranty based on the unpatented component (ii) I.e. damages for unpatented component parts are recoverable if they function together with the patented component to produce a desired result 1. If they can work independently shows no functional relationship b) Permanent injunction i) Not automatic upon finding of infringement ii) Must go through the consideration of all the equitable factors to determine if permanent injunction appropriate c) Laches i) If alleged infringer succeeds on a laches defense, patentee is barred from recovering based on activity occurring before the suit ii) But, patentee not barred on recovering based on what took place after the suit and not barred from getting an injunction

d) Equitable Estoppel i) Where an alleged infringer establishes the defense of equitable estoppel, the patentee's claim may be entirely barred Preemption 1) Unfair Competition and Trademark Law a) A states unfair competition law cannot impose liability for, or prohibit, the copying of an article which is unprotectable under either federal or copyright laws i) These unprotected articles are in the public domain, therefore a state cannot prevent the copying of such an article on the basis that its unfair competition law would be violated due to the probability of confusion as to source 2) Trade Secret Law a) Federal law does not preempt state trade secret law i) Preemption will only be found if state trade secret law interferes with the policies underlying patent law b) In cases where the trade secret is not patentable i) No conflict in this context, as trade secret law takes nothing from patent law c) In cases where a trade secret is also patentable creates greater conflict i) The real conflict is disclosure, basic quid pro quo of patent law requires disclosure, but this is not so in trade secret law (1) However, the advantages of patent are so great, that as a matter of practicality, one possessing a patentable product will always opt for the patent as opposed to trade secret

Federal Law of Intellectual Property

Copyright Law
1) Requirements for Protection a) Formalities Notice and Publication i) Copyright Act of 1976 (17 USC) is operative statute (1) Says that copyright subsists when you have 2 events occurring: (a) Original work of authorship (b) Work fixed in a tangible medium of expression (2) Term of protection = life of author + 70 years ii) Berne Convention 1989 Amendments to the act (1) No longer require copyright notice b) Formalities Registration and Deposit i) Do not have to register your copyright, but there are good reasons to do so: (1) If you register w/in first 5 years of publication is prima facie evidence of validity of registration (2) Most important - If you do sue somebody and are successful, you're probably going to want attorneys fees and statutory damages. You cant get either of these unless you register your work w/in certain periods of time (3) If you want to bring a suit and the work is protected under US copyright, it wasnt always clear if you could do so unless you had registration c) Statutory Subject Matter i) Section 102 General Subject Matter of Copyright (1) Original Work of Authorship (2) Fixation in Tangible Form (a) A work would be considered fixed in tangible medium of expression if there has been an authorized embodiment in a copy or phonorecord and if that embodiment "is sufficiently permanent or stable" to permit the work "to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration." (3) These two elements merge through fixation in order to produce subject matter copyrightable under the statute (a) Distinction (i) Object in which the original work of authorship is fixed 1. can only be fixed in copies or phonorecords (ii) Original work of authorship 1. Can be in many forms ii) Section 101 Categories of Works of Authorship: (1) Musical works; dramatic works; pantomimes and choreographic works; literary works; pictorial, graphic, and sculptural works; motion pictures and audiovisual works; and sound recordings

iii) Idea/Expression Dichotomy (1) Copyright does not protect the underlying idea, only protects the expression of that idea (a) i.e. the protection afforded by a copyright on a book explaining an art or system extends only to the authors unique explanation thereof and does not preclude others from using the system or the forms necessarily incidental to such use d) Originality i) Has to be an independent creation with a degree of minimum creativity (1) If you independently created it and it contains some degree of creativity, it will be an original work ii) Judges are not equipped to judge art, and even if they were, they dont want to be making value judgments iii) Facts are not copyrightable, but compilations of facts are (1) No one can claim originality to facts b/c they do not owe their origin to an act of authorship (2) Factual compilations, however, may possess the requisite originality (a) Compilations are selected, coordinated, and arranged facts. These selections, coordinations, and arrangements are the only things protected, not the underlying facts 2) Ownership a) Default rule person who created the work, authored the work, owns the copyright to the work i) Exception work made for hire doctrine (1) If a work is considered to be made for hire, then the employer is considered the author of the work (2) Significant consequences if work determined to be a work made for hire: (a) Who owns the copyright? (b) How long does the copyright last? (c) Whether any assignments or licenses granted under the copyright may be terminated under the termination of transfer provisions (3) Work is created for hire if: (a) The work is created by an employee within the scope of his employment (b) Employee: defined by common law agency principles (i) One party performs labor for another under circumstances in which that other person exerts substantial control over the work environment on the laborer, as well as the manner of performance (c) Factors to consider: (i) The level of skill required, tax treatment of the putative employee, the singleness of the assignment, and the source of the instrumentalities of the labor

(ii) How someone is compensated goes a long way in determining whether someone has created a work made for hire or not b) Joint Works i) Defn a work prepared by two or more authors with intent that contributions be merged into a whole ii) Collaborative contribution produces a joint work when: (1) The contribution represents original expression that could stand on its own as the subject matter of the copyright (a) i.e. each part has to be separately copyrightable (2) Parties must have intended to be joint authors at the time the work was created iii) Rights of Joint Authors (1) Joint authors hold undivided interests in a work, no matter how minor their contribution (2) Each author, as co-owner, has the right to use or license the use of the work, subject to an accounting to the other co-owners for any profits c) Transfers of Ownership i) Distinguish between collective work and compilation (1) Compiliation each independent part is not copyrightable (2) Collective work each independent part is copyrightable ii) 201(c) Absent an express transfer of the copyright or any rights under it, the owner of the copyright in the collective work is presumed to have acquired only: (1) The privilege of reproducing and distributing the contribution as part of that particular collective work (2) Any revision of that collective work, and (a) Revision denotes a new version (3) Any later collective work in the same series iii) Protects freelancers copyright in his or her contribution 3) Rights and Remedies a) Rights 5 Fundamental Rights for Copyright Owners: i) Reproduce as copies or phonorecords (1) Right to copy not limited to exact reproductions (2) A work has to be fixed in order for it to be a copy (a) In order to be fixed, the work has to be: (i) An embodiment sufficiently permanent or stable for it to be reproduced (ii) Has to be for a period of more than transitory duration ii) Prepare derivative works based on copyrighted work (1) Derivative work defined as anyform in which a work may be recast, transformed, or adapted

(2) Derivative work is based on a pre-existing work, but the copyright in the derivative only covers that in the derivative which is original to the derivative (a) The copyright in the original work belongs to the owner of the underlying work, but by definition, a derivative work has additional, new copyrightable material, which is not in most cases attributed by the original copyright owner, but the owner of the original copyright owns the new copyrightable derivative part (3) Statutory examples: (a) Translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a derivative work (4) Some courts have held that framing and other methods of mounting do not infringe the authors right to make derivative works (a) This is because it does not possess a sufficient level of creativity iii) Distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership (1) Closely tied to the right to copy (2) An important limitation on the right to distribute is the first sale doctrine (section 109(a) of the copyright act) (a) Provides that if the copyright owner parts w/ title to a particular copy of a work, then he or she at that point loses all control over use of that work by the purchaser (i) The theory is that the consideration that is provided by the sale of the work would cover any subsequent use of that work by the purchaser (ii) Only goes to that particular copy (3) Related right importation right section 602 of the Act (a) Prohibits the importation into the united states of copyrighted works acquired abroad iv) Public Performance (1) In general, no public performance rights in sound recordings (a) Artists get no money from their music being played on the radio v) Public Display b) The first 3 rights apply to all copyrighted works. Close relationship between the first three, in many cases the alleged infringer is found to infringe all 3 of these rights c) Limitations i) Fair Use (1) This doctrines notion is that one using a copyrighted work should not have to obtain a copyright holders permission to use the copyrighted work in a situation where a reasonably copyright holder would in fact grant permission

(2) Four factors to be considered in determining whether fair use: (a) Purpose of the use (i) Commercial or non-profit? 1. The crux of this distinction is whether the user stands to profit from exploitation of the copyrighted material without paying the customary price 2. If a use is commercial as opposed to non-profit, that weighs against a finding of fair use (ii) If the work essentially supersedes the original, chances are youre not going to have fair use (iii) Transformative use? 1. Weighs toward a finding of fair use 2. By transforming, youre not superseding the original and its not acting as a substitute (b) Nature of the copyrighted work (i) The law generally recognizes a greater need to disseminate factual works as opposed to fiction/fantasy (c) Amount and substantiality of the portion used (i) Have to weigh both quantity and quality of what was taken 1. No plagiarist can excuse the wrong by showing how little he did not pirate 2. Conversely, if a substantial portion of what was copied is verbatim, that is evidence of qualitative value of the copied material 3. Even if small amount copied, if what was copied is of high expressive value and plays a key role in the infringing work, that weighs against fair use (d) Effect on the market (i) Most important element of fair use (ii) To negate fair use, one need only show that if the challenged use should become more widespread, it would adversely affect the potential market of the copyrighted work (iii) Must also take into account the harm to the derivative market (3) Parody (a) Affirmative defense to an action for copyright infringement under the fair use doctrine that the infringer's use of the copyrighted material was permissible for the purpose of criticism or satire (b) Applied to amount and substantiality factor: (i) In order for it to be a Parody, people have to understand that is a parody, people have to understand what it is that youre making fun of 1. Otherwise it would not be an effective parody

ii) Secondary Liability (1) Vicarious Liability: (a) There must be control over the infringing activity and there must be a financial benefit over the infringing activity to be held for vicarious liability (2) Contributory Liability: (a) There must be knowledge of the infringing activity and material contribution to the infringing conduct to be held liable for contributory liability d) Exclusive Rights and New Technologies i) If a machine which copies is capable of substantial, non-infringing uses, then it is going to be found to be non-infringing, and you cant hold defendant liable for contributory infringement ii) Have to analyze these cases on a case by case determination, taking a holistic approach and weigh every factor where theyre applicable iii) Inducement Rule (1) Premises liability on purposeful, culpable expression and conduct (2) One who distributes a device to promote its use to infringe copyright as shown by affirmative steps to foster infringement, is liable for the resulting acts of infringement by third parties 4) Infringement a) Infringement = copying AND unlawful appropriation i) If a party engages in just copying but does not unlawfully appropriate, then there is no liability, and vice versa. There has to be both ii) Copying (1) Usually has to be established through circumstantial evidence (2) Most important circumstantial evidence is proof of access (a) May be able to offer proof of direct access. (3) Inference of access (a) May be established circumstantially by proof of striking similarity (i) This inference says that the possibilities of independent creation, coincidence and prior common source are, as a practical matter, precluded (b) If successful, copying is presumably proved simultaneously (c) However, although proof of striking similarity may permit an inference of access, P must still meet some minimum threshold of proof which demonstrates that the inference of access is reasonable iii) Unlawful appropriation 2 different issues to look at (1) Look at Ps work and pull out the uncopyrightable material from the copyrightable expression, only want to protect that which is protectable

(2) Compare that which is protected with the defendants work, and then make a determination as to whether those works based on that comparison are substantially similar (a) Need substantial similarity of protectable expression b) Abstractions test i) The more general or abstract, to the extent that the similarities relate to general concepts, then its less likely that the courts are going to find infringement (1) Its only where the similarities are more of a concrete expression where youre going to find infringement