Plaintext
Patterns of
Information Law
Intellectual Property Done Right
James Grimmelmann
Table of Contents
Introduction 23
1 Undeveloped Ideas 35
Desny v. Wilder . . . . . . . . . . . . . . . . . . . 35
Michael J. Burstein, Exchanging Information
Without Intellectual Property . . . . . . . . . . 37
Apfel v. Prudential-Bache Securities, Inc. . . . . . 38
Bizarro World Problem . . . . . . . . . . . . . . 41
Debt Collection Problem . . . . . . . . . . . . . 41
2 Trade Secret 43
A Subject Ma er . . . . . . . . . . . . . . . . . . . . . . . . 43
Restatement (Third) of Unfair Competition § 39 43
Religious Technology Center v. Netcom On-Line
Communications Services, Inc. . . . . . . . . . 44
B Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . 52
UTSA § 1(4) . . . . . . . . . . . . . . . . . . . . 52
1 Actual Secrecy . . . . . . . . . . . . . . . . . . . . . 52
United States v. Lange . . . . . . . . . . . . . . . 52
Learning Curve Toys, Inc. v. PlayWood Toys, Inc. 55
Exploits Problem . . . . . . . . . . . . . . . . . 66
2 Priority . . . . . . . . . . . . . . . . . . . . . . . . . 67
3 Collaborations . . . . . . . . . . . . . . . . . . . . . 67
Restatement (Third) of Unfair Competition §
42 cmt. e . . . . . . . . . . . . . . . . . . . . 67
C Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . 68
United States v. Lange . . . . . . . . . . . . . . . 69
Rockwell Graphic Systems, Inc. v. DEV Indus-
tries, Inc. . . . . . . . . . . . . . . . . . . . . 69
D Infringement: Similarity . . . . . . . . . . . . . . . . . . 72
Big Vision Private, Ltd. v. E.I. Dupont De
Nemours & Co. . . . . . . . . . . . . . . . . . 72
E Infringement: Prohibited Conduct . . . . . . . . . . . . 72
1 Proving Infringement . . . . . . . . . . . . . . . . . 73
Grynberg v. BP, PLC . . . . . . . . . . . . . . . . 73
2 Direct Infringement . . . . . . . . . . . . . . . . . . 74
Restatement (Third) of Unfair Competitition §
43 . . . . . . . . . . . . . . . . . . . . . . . . 74
UTSA § 1(1) . . . . . . . . . . . . . . . . . . . . 74
E.I. du Pont de Nemours & Co. v. Christopher . . 75
Kamin v. Kuhnau . . . . . . . . . . . . . . . . . . 78
3 Secondary Infringement . . . . . . . . . . . . . . . 81
UTSA § 1(2) . . . . . . . . . . . . . . . . . . . . 82
F Defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Questions . . . . . . . . . . . . . . . . . . . . . . 83
Flaming Moe’s Problem . . . . . . . . . . . . . 83
Locksmiths Problem . . . . . . . . . . . . . . . 84
G Privacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Restatement (Second) of Torts § 652B . . . . . . 85
Neil M. Richards & Daniel J. Solove, Privacy’s
Other Path: Recovering the Law of Confiden-
tiality . . . . . . . . . . . . . . . . . . . . . . 86
Florida v. Riley . . . . . . . . . . . . . . . . . . . 88
Kyllo v. United States . . . . . . . . . . . . . . . 89
H Government Secrets . . . . . . . . . . . . . . . . . . . . . 91
Freedom of Information Act . . . . . . . . . . . 91
U.S. Dept. of Justice v. Tax Analysts . . . . . . . . 92
Chrysler Corp. v. Brown . . . . . . . . . . . . . . 93
Coastal States Gas Corp. v. Department of Energy 95
Congressional Research Service, The Protec-
tion of Classified Information: The Legal
Framework . . . . . . . . . . . . . . . . . . . 100
Phillippi v. Central Intelligence Agency . . . . . . 103
3 Patent 107
United States Constitution, art. I, § 8, cl. 8 . . . 107
A Subject Ma er . . . . . . . . . . . . . . . . . . . . . . . . 108
Patent Act § 101 . . . . . . . . . . . . . . . . . . 108
1 Utility . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Juicy Whip, Inc. v. Orange Bang, Inc. . . . . . . . 108
MPEP §§ 2701, 2701.01 . . . . . . . . . . . . . . 112
2 Statutory Subject Ma er . . . . . . . . . . . . . . . 116
Tun-Jen Chiang, The Rules and Standards of
Patentable Subject Ma er . . . . . . . . . . . . 116
Mayo Collaborative v. Prometheus Labs . . . . . . 117
Tax Planning Patent Problem . . . . . . . . . . 120
B Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . 121
1 Claims . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Patent Act § 112(b)-(d) . . . . . . . . . . . . . . 125
a Indefiniteness . . . . . . . . . . . . . . . . . . . 125
Nautlius, Inc. v. Biosig Instruments Inc. . . . . . 125
Freeny v. Apple Inc. . . . . . . . . . . . . . . . . 125
Datamize, LLC v. Plumtree Software, Inc. . . . . . 128
b Claim Drafting . . . . . . . . . . . . . . . . . . 130
Catalina Marketing Intern. v. Coolsavings.com . . 130
MPEP §§ 2111, 2173 . . . . . . . . . . . . . . . . 130
2 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . 131
Patent Act § 112(a) . . . . . . . . . . . . . . . . . 131
a Enablement . . . . . . . . . . . . . . . . . . . . 131
O’Reilly v. Morse . . . . . . . . . . . . . . . . . . 131
Wyeth & Cordis Corp. v. Abbo Labs. . . . . . . . 132
Plastic Dye Problem . . . . . . . . . . . . . . . . 136
b Wri en Description . . . . . . . . . . . . . . . 136
Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co . . 136
c Best Mode . . . . . . . . . . . . . . . . . . . . . 137
MPEP § 2165 . . . . . . . . . . . . . . . . . . . . 137
Salt Shaker Problem . . . . . . . . . . . . . . . . 138
3 Patent Prosecution . . . . . . . . . . . . . . . . . . . 139
Cuozzo Speed Technologies, LLC v. Lee . . . . . . 139
Patent Act § 122 . . . . . . . . . . . . . . . . . . 139
37 C.F.R. pt 1 . . . . . . . . . . . . . . . . . . . . 140
Therasense, Inc. v. Becton, Dickinson and Co. . . . 140
a Priority Dates . . . . . . . . . . . . . . . . . . . 141
USPTO, General Information Concerning
Patents . . . . . . . . . . . . . . . . . . . . . 141
b Multiple Applications . . . . . . . . . . . . . . 141
Patent Act § 121 . . . . . . . . . . . . . . . . . . 141
MPEP §§ 201.07 . . . . . . . . . . . . . . . . . . 142
c Judicial Review . . . . . . . . . . . . . . . . . . 142
d Post-Grant Proceedings . . . . . . . . . . . . . 143
Patent Act § 121 . . . . . . . . . . . . . . . . . . 143
Cuozzo Speed Technologies, LLC v. Lee . . . . . . 143
4 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
Patent Act § 135(a)(2) . . . . . . . . . . . . . . . 145
C Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . 145
1 Collaborations . . . . . . . . . . . . . . . . . . . . . 145
MPEP § 2137.01 . . . . . . . . . . . . . . . . . . 145
Patent Act § 135 . . . . . . . . . . . . . . . . . . 147
2 Priority: Novelty and Statutory Bars . . . . . . . . 147
a Categories of Prior Art . . . . . . . . . . . . . . 148
1 ”patented” . . . . . . . . . . . . . . . . . . . . . 149
2 ”described in a printed publication” . . . . . . 149
In re Klopfenstein . . . . . . . . . . . . . . . . . . 149
3 ”in public use” . . . . . . . . . . . . . . . . . . . 154
Mark A. Lemley, Does “Public Use” Mean the
Same Thing It Did Last Year? . . . . . . . . . 154
Egbert v. Lippmann . . . . . . . . . . . . . . . . . 156
Lough v. Brunswick Corp . . . . . . . . . . . . . . 159
4 ”on sale” . . . . . . . . . . . . . . . . . . . . . . 161
MPEP §§ 2152.02(d), 2133.03(b) & (c) . . . . . . 161
5 ”otherwise available to the public” . . . . . . . 162
b Anticipation . . . . . . . . . . . . . . . . . . . . 163
MPEP § 2131 . . . . . . . . . . . . . . . . . . . . 163
Titanium Metals Corp. of America v. Banner . . . 164
c Priority . . . . . . . . . . . . . . . . . . . . . . . 169
1 Old § 102 . . . . . . . . . . . . . . . . . . . . . . 169
MPEP § 2138 . . . . . . . . . . . . . . . . . . . . 169
Morway v. Bondi . . . . . . . . . . . . . . . . . . 171
2 New § 102 . . . . . . . . . . . . . . . . . . . . . 172
Patent Act § 102 . . . . . . . . . . . . . . . . . . 172
Questions . . . . . . . . . . . . . . . . . . . . . . 173
Pleistocene Park Problem . . . . . . . . . . . . . 173
3 Nonobviousness . . . . . . . . . . . . . . . . . . . . 174
Patent Act § 103 . . . . . . . . . . . . . . . . . . 174
KSR Intern. Co. v. Teleflex Inc. . . . . . . . . . . 175
In re Clay . . . . . . . . . . . . . . . . . . . . . . 185
KSR Problem . . . . . . . . . . . . . . . . . . . . 187
D Infringement: Similarity . . . . . . . . . . . . . . . . . . 188
Jeanne C. Fromer, Claiming Intellectual Property 188
N.D. Cal. Model Patent Jury Instructions . . . 189
1 Claim Construction . . . . . . . . . . . . . . . . . . 190
Phillips v. AWH Corp. . . . . . . . . . . . . . . . 190
Thorner v. Sony Computer Entertainment Amer-
ica LLC . . . . . . . . . . . . . . . . . . . . . 195
2 Literal Infringement . . . . . . . . . . . . . . . . . . 201
Angelo Mongiello’s Children, LLC v. Pizza Hut,
Inc. . . . . . . . . . . . . . . . . . . . . . . . 201
3 Doctrine of Equivalents . . . . . . . . . . . . . . . . 203
Freedman Seating Co. v. American Seating Co. . . 203
Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki
Co. . . . . . . . . . . . . . . . . . . . . . . . . 211
Johnson & Johnston Associates v. R.E. Service Co. 212
4 A Hybrid: Means-Plus-Function Claims . . . . . . 213
Kemco Sales, Inc. v. Control Papers Co., Inc. . . . 213
Super Soaker Problem . . . . . . . . . . . . . . 215
E Infringement: Prohibited Conduct . . . . . . . . . . . . 216
Herman v. Youngstown Car Mfg. Co. . . . . . . . 216
1 Direct Infringement . . . . . . . . . . . . . . . . . . 216
Patent Act § 271(a) . . . . . . . . . . . . . . . . . 216
Akamai Technologies, Inc. v. Limelight Networks,
Inc. . . . . . . . . . . . . . . . . . . . . . . . 216
2 Indirect Infringement . . . . . . . . . . . . . . . . . 217
Patent Act § 271(b)-(c) . . . . . . . . . . . . . . . 217
Limelight Networks, Inc. v. Akamai Technologies,
Inc. . . . . . . . . . . . . . . . . . . . . . . . 217
Global-Tech Appliances, Inc. v. SEB S.A. . . . . . 218
Commil USA, LLC v. Cisco Systems Inc. . . . . . 219
Lucent Technologies, Inc. v. Gateway, Inc. . . . . . 219
Questions . . . . . . . . . . . . . . . . . . . . . . 221
F Defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
1 Invalidity . . . . . . . . . . . . . . . . . . . . . . . . 221
Microsoft Corp. v. i4i Ltd. Partnership . . . . . . 221
2 Exhaustion . . . . . . . . . . . . . . . . . . . . . . . 221
Aktiebolag v. E.J. Co. . . . . . . . . . . . . . . . . 221
Quanta Computer, Inc. v. LG Electronics, Inc. . . 226
Lexmark Intern., Inc. v. Impression Products, Inc. 232
3 Miscellaneous . . . . . . . . . . . . . . . . . . . . . 234
Patent Act §§ 273, 287 . . . . . . . . . . . . . . . 234
Madey v. Duke University . . . . . . . . . . . . . 234
4 Copyright 237
A Subject Ma er . . . . . . . . . . . . . . . . . . . . . . . . 237
Copyright Act § 102(a) . . . . . . . . . . . . . . 237
Feist Publications, Inc. v. Rural Telephone Service
Co. . . . . . . . . . . . . . . . . . . . . . . . . 238
1 Creativity: How Much Is a Modicum? . . . . . . . 238
37 C.F.R. § 202.1(a) . . . . . . . . . . . . . . . . 238
Feist Publications, Inc. v. Rural Telephone Service
Co. . . . . . . . . . . . . . . . . . . . . . . . . 239
Arrows Problem . . . . . . . . . . . . . . . . . . 242
Baseball Card Price Report Problem . . . . . . 243
2 Aesthetic Nondiscrimination . . . . . . . . . . . . . 243
Bleistein v. Donaldson Lithographing Co. . . . . . 243
Copyright Compendium § 310 . . . . . . . . . 245
Mitchell Bros. Film Group v. Cinema Adult Theater246
Belcher v. Tarbox . . . . . . . . . . . . . . . . . . 246
3 Idea and Expression . . . . . . . . . . . . . . . . . . 247
Copyright Act § 102(b) . . . . . . . . . . . . . . 247
Blehm v. Jacobs . . . . . . . . . . . . . . . . . . . 247
Walker v. Time Life Films, Inc. . . . . . . . . . . . 254
Hula Problem . . . . . . . . . . . . . . . . . . . 254
Baker v. Selden . . . . . . . . . . . . . . . . . . . 254
Bikram’s Yoga College of India v. Evolation Yoga . 257
Concrete Machinery Co. v. Classic Lawn Orna-
ments . . . . . . . . . . . . . . . . . . . . . . 261
Cooking for Kids Problem . . . . . . . . . . . . 261
B Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . 261
Sheldon v. Metro-Goldwyn Pictures Corp. . . . . . 261
1 Authorship . . . . . . . . . . . . . . . . . . . . . . . 262
Burrow-Giles Lithographic Co. v. Sarony . . . . . 262
Monkey Selfie Problem . . . . . . . . . . . . . . 263
Copyright Act § 105 . . . . . . . . . . . . . . . . 264
2 Collaborations . . . . . . . . . . . . . . . . . . . . . 264
Copyright Act §§ 201, 202 . . . . . . . . . . . . 264
Thomson v. Larson . . . . . . . . . . . . . . . . . 265
Greene v. Ablon . . . . . . . . . . . . . . . . . . . 270
Community for Creative Non-Violence v. Reid . . 271
Garcia v. Google, Inc. . . . . . . . . . . . . . . . . 275
3 Derivative Works . . . . . . . . . . . . . . . . . . . 277
Copyright Act § 103 . . . . . . . . . . . . . . . . 277
DC Comics v. Towle . . . . . . . . . . . . . . . . 277
Picke v. Prince . . . . . . . . . . . . . . . . . . . 278
Keeling v. Hars . . . . . . . . . . . . . . . . . . . 280
C Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . 281
1 Formalities Then . . . . . . . . . . . . . . . . . . . . 281
Christopher Sprigman, Reform(aliz)ing Copyright281
Estate of Martin Luther King v. CBS, Inc. . . . . . 282
Estate of Martin Luther King v. CBS, Inc. . . . . . 284
Wildman v. New York Times Co. . . . . . . . . . . 284
2 Formalities Now . . . . . . . . . . . . . . . . . . . . 285
a Fixation . . . . . . . . . . . . . . . . . . . . . . . 285
Copyright Compendium § 305 . . . . . . . . . 285
Stern Electronics, Inc. v. Kaufman . . . . . . . . . 287
Questions . . . . . . . . . . . . . . . . . . . . . . 288
Photoshoot Problem . . . . . . . . . . . . . . . 289
b Registration . . . . . . . . . . . . . . . . . . . . 290
Copyright Compendium § 202 . . . . . . . . . 290
c Deposit . . . . . . . . . . . . . . . . . . . . . . . 291
Copyright Compendium §§ 1502, 1511 . . . . . 291
d Notice . . . . . . . . . . . . . . . . . . . . . . . . 292
Copyright Compendium §§ 2202, 2204 . . . . . 292
3 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . 293
Copyright Act §§ 302, 305 . . . . . . . . . . . . 293
Eldred v. Ashcroft . . . . . . . . . . . . . . . . . . 294
Klinger v. Conan Doyle Estate . . . . . . . . . . . 296
D Infringement: Similarity . . . . . . . . . . . . . . . . . . 298
Sheldon v. Metro-Goldwyn Pictures Corp. . . . . . 298
Nichols v. Universal Pictures Corporation . . . . . 298
Arnstein v. Porter . . . . . . . . . . . . . . . . . 301
Children’s Book Problem . . . . . . . . . . . . . 302
Go lieb Development LLC v. Paramount Pictures . 302
Boisson v. Banian, Ltd. . . . . . . . . . . . . . . . 304
New Yorker Problem . . . . . . . . . . . . . . . 308
E Infringement: Prohibited Conduct . . . . . . . . . . . . 309
1 Proof of Copying . . . . . . . . . . . . . . . . . . . . 309
Three Boys Music Corp. v. Bolton . . . . . . . . . 309
Bee Gees Problem . . . . . . . . . . . . . . . . . 315
2 Direct Infringement . . . . . . . . . . . . . . . . . . 316
Copyright Act § 106 . . . . . . . . . . . . . . . . 316
Capitol Records, LLC v. ReDigi Inc. . . . . . . . . 317
CoStar Group, Inc. v. LoopNet, Inc. . . . . . . . . 319
American Broadcasting v. Aereo, Inc. . . . . . . . 320
Copyright Act § 110 . . . . . . . . . . . . . . . . 324
3 Secondary Liability . . . . . . . . . . . . . . . . . . 325
Fonovisa, Inc. v. Cherry Auction, Inc. . . . . . . . 325
Sony Corp. of America v. Universal City Studios,
Inc. . . . . . . . . . . . . . . . . . . . . . . . 329
Metro-Goldwyn-Mayer Studios Inc. v. Grokster,
Ltd. . . . . . . . . . . . . . . . . . . . . . . . 330
Exclusive Rights Problem . . . . . . . . . . . . 330
4 Paracopyright . . . . . . . . . . . . . . . . . . . . . . 331
Copyright Act § 1201 . . . . . . . . . . . . . . . 331
MDY Industries, LLC. v. Blizzard Entertainment,
Inc. . . . . . . . . . . . . . . . . . . . . . . . 331
Copyright Act § 1202 . . . . . . . . . . . . . . . 336
Murphy v. Millennium Radio Group LLC . . . . . 337
F Defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 338
1 First Sale . . . . . . . . . . . . . . . . . . . . . . . . 338
Copyright Act § 109 . . . . . . . . . . . . . . . . 338
UMG Recordings, Inc. v. Augusto . . . . . . . . . 339
Capitol Records, LLC v. ReDigi Inc. . . . . . . . . 342
2 Fair Use . . . . . . . . . . . . . . . . . . . . . . . . . 343
Copyright Act § 107 . . . . . . . . . . . . . . . . 343
Fair Use Checklist . . . . . . . . . . . . . . . . . 343
Harper & Row, Publishers, Inc. v. Nation Enter-
prises . . . . . . . . . . . . . . . . . . . . . . 344
Campbell v. Acuff-Rose Music, Inc. . . . . . . . . 351
City of Inglewood v. Teixeira . . . . . . . . . . . . 353
Fox Broadcasting Co., Inc. v. Dish Network LLC . 359
Capitol Records, LLC v. ReDigi Inc. . . . . . . . . 362
Chicago HOPE Problem . . . . . . . . . . . . . 363
3 Section 512 . . . . . . . . . . . . . . . . . . . . . . . 363
Copyright Act § 512 . . . . . . . . . . . . . . . . 363
UMG Recordings, Inc. v. Shelter Capital Partners 365
4 Statutory Licenses . . . . . . . . . . . . . . . . . . . 370
WPIX, Inc. v. ivi, Inc. . . . . . . . . . . . . . . . 370
Fox Television Stations, Inc. v. AereoKiller . . . . 372
5 Miscellaneous . . . . . . . . . . . . . . . . . . . . . 374
Copyright Act §§ 108, 121 . . . . . . . . . . . . 374
5 Music 375
Steve Albini, The Problem with Music . . . . . . 375
A Musical Works and Sound Recordings . . . . . . . . . 376
Robert Brauneis, Musical Work Copyright for
the Era of Digital Sound Technology . . . . . . 376
White-Smith Music Publishing Co. v. Apollo Co. . 377
Copyright Office, F C P -
P - ₁₉₇₂ S R . . . . 378
Copyright Act §§ 101, 102 . . . . . . . . . . . . 379
Lydia Pallas Loren, Untangling the Web of Mu-
sic Copyrights . . . . . . . . . . . . . . . . . . 379
Newton v. Diamond . . . . . . . . . . . . . . . . 380
B Reproductions . . . . . . . . . . . . . . . . . . . . . . . . 382
1 Musical Works . . . . . . . . . . . . . . . . . . . . . 382
Copyright Act § 115(a) . . . . . . . . . . . . . . 382
37 C.F.R. pt. 385 . . . . . . . . . . . . . . . . . . 383
Lydia Pallas Loren, Untangling the Web of Mu-
sic Copyrights . . . . . . . . . . . . . . . . . . 383
Leadsinger, Inc. v. BMG Music Pub. . . . . . . . 384
2 Sound Recordings . . . . . . . . . . . . . . . . . . . 385
Copyright Act § 114(b) . . . . . . . . . . . . . . 385
Bridgeport Music, Inc. v. Dimension Films . . . . 385
VMG Salsoul, LLC v. Ciccone . . . . . . . . . . . 387
C Performances . . . . . . . . . . . . . . . . . . . . . . . . . 389
United States v. American Society of Composers,
Authors, and Publishers . . . . . . . . . . . . . 389
1 Musical Works . . . . . . . . . . . . . . . . . . . . . 390
a Broadcasting and Receiving . . . . . . . . . . . 390
Buck v. Jewell-LaSalle Realty Co. . . . . . . . . . . 390
Copyright Act § 110(5) . . . . . . . . . . . . . . 391
b The Performing Rights Organizations . . . . . 392
Broadcast Music, Inc. v. Columbia Broadcasting
System, Inc. . . . . . . . . . . . . . . . . . . . 392
ASCAP 2010 Radio Station License Agreement . . 394
Range Road Music, Inc. v. East Coast Foods, Inc. . 395
Robert Stigwood Grp., Ltd. v. Sperber . . . . . . . 396
c Miscellaneous . . . . . . . . . . . . . . . . . . . 398
Copyright Act § 116 . . . . . . . . . . . . . . . . 398
History of the Jukebox License Office . . . . . . . . 398
Copyright Act § 110 . . . . . . . . . . . . . . . . 398
2 Sound Recordings . . . . . . . . . . . . . . . . . . . 399
Copyright Act § 114 . . . . . . . . . . . . . . . . 399
Copyright Office, C M
M . . . . . . . . . . . . . . . . . 399
D State-Law Protection for Pre-1972 Sound Recordings . 402
Copyright Act §§ 301(c) . . . . . . . . . . . . . . 402
RCA Mfg. Co. v. Whiteman . . . . . . . . . . . . 403
Copyright Office, F C P -
P - ₁₉₇₂ S R . . . . 404
Flo & Eddie, Inc. v. Sirius XM Radio, Inc. . . . . 406
Flo & Eddie, Inc. v. Sirius XM Radio, Inc. . . . . 408
UMG Recordings, Inc. v. Escape Media Group, Inc.409
Capitol Records, LLC v. Vimeo, LLC . . . . . . . . 410
E Bootlegging . . . . . . . . . . . . . . . . . . . . . . . . . 411
Metropolitan Opera Assoc. v. Wagner-Nichols
Recorder Corp. . . . . . . . . . . . . . . . . . 412
Copyright Act § 1101(a) . . . . . . . . . . . . . 413
United States v. Martignon . . . . . . . . . . . . 413
Questions . . . . . . . . . . . . . . . . . . . . . . 415
6 Trademark 417
The Trade-Mark Cases . . . . . . . . . . . . . . . 417
A Subject Ma er . . . . . . . . . . . . . . . . . . . . . . . . 418
Lanham Act § 45 (“trademark”) . . . . . . . . . 418
Drug Stamps Problem . . . . . . . . . . . . . . 418
1 Word Marks . . . . . . . . . . . . . . . . . . . . . . 419
Zatarains, Inc. v. Oak Grove Smokehouse, Inc. . . 419
Innovation Ventures, LLC v. N.V.E., Inc. . . . . . 425
TMEP § 1202 . . . . . . . . . . . . . . . . . . . . 426
Elliot v. Google Inc. . . . . . . . . . . . . . . . . . 426
TMEP § 1209.03 . . . . . . . . . . . . . . . . . . 432
2 Designs . . . . . . . . . . . . . . . . . . . . . . . . . 434
Star Industries, Inc. v. Bacardi & Co. Ltd. . . . . . 434
Melting Bad Problem . . . . . . . . . . . . . . . 435
B Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . 436
1 Priority at Common Law . . . . . . . . . . . . . . . 436
Galt House Inc. v. Home Supply Company . . . . 436
United Drug Co. v. Theodore Rectanus Co. . . . . 438
Planetary Motion, Inc. v. Techsplosion, Inc. . . . . 441
Dudley v. HealthSource Chiropractic, Inc. . . . . . 444
CreAgri, Inc. v. USANA Health Sciences, Inc. . . 445
Bilgewater Bill’s Problem . . . . . . . . . . . . . 448
2 Federal Registration . . . . . . . . . . . . . . . . . . 448
a Registration . . . . . . . . . . . . . . . . . . . . 448
Lanham Act §§ 1(a), 7 . . . . . . . . . . . . . . . 448
Burger King of Florida, Inc. v. Hoots . . . . . . . 449
Bilgewater Bill’s Problem, Redux . . . . . . . . 450
b Intent-to-Use Applications . . . . . . . . . . . 451
Lanham Act § 1(b) . . . . . . . . . . . . . . . . . 451
Kelly Services, Inc. v. Creative Harbor, LLC [I] . . 451
Kelly Services, Inc. v. Creative Harbor, LLC [II] . 455
Bilgewater Bill’s Problem, Re-Redux . . . . . . 456
3 Collaborations . . . . . . . . . . . . . . . . . . . . . 456
Boogie Kings v. Guillory . . . . . . . . . . . . . . 456
TMEP § 1201.03 . . . . . . . . . . . . . . . . . . 458
Duff Problem . . . . . . . . . . . . . . . . . . . 459
C Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . 459
1 Registration . . . . . . . . . . . . . . . . . . . . . . . 459
Lanham Act § 2(a) . . . . . . . . . . . . . . . . . 459
Lanham Act § 2 . . . . . . . . . . . . . . . . . . 460
In re Tam . . . . . . . . . . . . . . . . . . . . . . 460
In re Boulevard Entertainment, Inc. . . . . . . . . 461
TMEP §§ 1302–1304 . . . . . . . . . . . . . . . . 461
TMEP §§ 904, 1401, 1402 . . . . . . . . . . . . . 462
TMEP § 906 . . . . . . . . . . . . . . . . . . . . 463
2 Opposition . . . . . . . . . . . . . . . . . . . . . . . 463
Lanham Act §§ 2(d), 12, 13 . . . . . . . . . . . . 463
B&B Hardware, Inc. v. Hargis Industries, Inc. . . 464
B&B Hardware, Inc. v. Hargis Industries, Inc. . . 466
3 Maintenance . . . . . . . . . . . . . . . . . . . . . . 466
Lanham Act §§ 8,9 . . . . . . . . . . . . . . . . . 466
4 Cancellation and Incontestability . . . . . . . . . . 467
Lanham Act §§ 14, 15 . . . . . . . . . . . . . . . 467
Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc. . . . . 468
5 Abandonment . . . . . . . . . . . . . . . . . . . . . 469
Lanham Act § 45 (“abandoned”) . . . . . . . . 469
Procter & Gamble Co. v. Johnson & Johnson Inc. . 469
Trademark Throwback Problem . . . . . . . . . 473
D Infringement: Confusion . . . . . . . . . . . . . . . . . 473
Lanham Act § 32 . . . . . . . . . . . . . . . . . . 474
Virgin Enterprises Ltd. v. Nawab . . . . . . . . . 474
Sally Beauty Co., Inc. v. Beautyco, Inc. . . . . . . 484
Cheat Sheet Problem . . . . . . . . . . . . . . . 485
Boats Problem . . . . . . . . . . . . . . . . . . . 485
E Infringement: Prohibited Conduct . . . . . . . . . . . . 486
1 Threshold Conditions . . . . . . . . . . . . . . . . . 486
Rescuecom Corp. v. Google Inc. . . . . . . . . . . 486
Radiance Foundation, Inc. v. NAACP . . . . . . . 492
2 Theories of Confusion . . . . . . . . . . . . . . . . 496
a Reverse Confusion . . . . . . . . . . . . . . . . 496
Restatement (Third) of Unfair Competition §
20 cmt. f . . . . . . . . . . . . . . . . . . . . 496
b Initial Interest Confusion . . . . . . . . . . . . 497
Grotrian, Helfferich, Schul , Th. Steinweg Nachf
v. Steinway & Sons . . . . . . . . . . . . . . . 497
Brookfield Communications v. West Coast Enter-
tainment . . . . . . . . . . . . . . . . . . . . . 497
Hearts on Fire Company, LLC v. Blue Nile, Inc. . . 498
c Post-Sale Confusion . . . . . . . . . . . . . . . 500
General Motors Corp. v. Keystone Automotive In-
dustries, Inc. . . . . . . . . . . . . . . . . . . 500
3 Section 43(a) . . . . . . . . . . . . . . . . . . . . . . 503
Lanham Act § 43(a)(1)(A) . . . . . . . . . . . . . 503
a Unfair Competition . . . . . . . . . . . . . . . 504
Margreth Barre , Finding Trademark Use . . . . 504
William R. Warner & Co. v. Eli Lilly & Co. . . . . 505
Blinded Veterans Association v. Blinded American
Veterans Foundation . . . . . . . . . . . . . . 506
b False Endorsement . . . . . . . . . . . . . . . . 509
Yale Electric Corp. v. Robertson . . . . . . . . . . 509
Conan Properties, Inc. v. Conans Pizza, Inc. . . . 510
International Order of Job’s Daughters v. Linde-
burg & Co. . . . . . . . . . . . . . . . . . . . 512
c Failure to A ribute . . . . . . . . . . . . . . . . 514
Dastar Corp. v. Twentieth Century Fox Film Corp 514
4 Dilution . . . . . . . . . . . . . . . . . . . . . . . . . 519
Frank I. Schechter, The Rational Basis of Trade-
mark Protection . . . . . . . . . . . . . . . . . 519
Jeremy N. Sheff, The (Boundedly) Rational Basis
of Trademark Liability . . . . . . . . . . . . . 520
Ty Inc. v. Perryman . . . . . . . . . . . . . . . . 521
Lanham Act § 43(c) . . . . . . . . . . . . . . . . 521
Nike, Inc. v. Nikepal Intern., Inc. . . . . . . . . . 523
Dilution Lightning Round . . . . . . . . . . . . 530
5 Problems . . . . . . . . . . . . . . . . . . . . . . . . 532
Ambush Marketing Problem . . . . . . . . . . . 532
Jack Daniel’s Problem . . . . . . . . . . . . . . . 533
Paper Handbag Problem . . . . . . . . . . . . . 533
6 Secondary Liability . . . . . . . . . . . . . . . . . . 533
Inwood Laboratories, Inc. v. Ives Laboratories, Inc. 533
Philip Morris USA Inc. v. Lee . . . . . . . . . . . 534
F Defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 537
Lanham Act § 43(c)(3) . . . . . . . . . . . . . . . 537
1 Descriptive Fair Use . . . . . . . . . . . . . . . . . . 537
Zatarains, Inc. v. Oak Grove Smokehouse, Inc. . . 537
2 Nominative Fair Use . . . . . . . . . . . . . . . . . . 539
New Kids on the Block v. New America Pub., Inc. . 539
Smith v. Chanel, Inc. . . . . . . . . . . . . . . . . 544
3 Exhaustion . . . . . . . . . . . . . . . . . . . . . . . 548
Champion Spark Plug Co. v. Sanders . . . . . . . 548
Hart v. Amazon.com, Inc. . . . . . . . . . . . . . 550
4 Expressive Use . . . . . . . . . . . . . . . . . . . . . 550
Louis Vui on Malletier v. Haute Diggity Dog . . 550
Louis Vui on Mallatier v. Warner Bros. . . . . . . 560
5 Miscellaneous . . . . . . . . . . . . . . . . . . . . . 566
Lanham Act § 32(2) . . . . . . . . . . . . . . . . 566
Trademark Defenses Lightning Round . . . . . 567
G Other Identifier Registries . . . . . . . . . . . . . . . . . 573
1 Phone Numbers . . . . . . . . . . . . . . . . . . . . 573
Holiday Inns, Inc. v. 800 Reservation, Inc. . . . . 573
2 Radio Callsigns . . . . . . . . . . . . . . . . . . . . . 575
In re WSM, Inc. . . . . . . . . . . . . . . . . . . . 575
3 Business Names . . . . . . . . . . . . . . . . . . . . 577
Model Business Corporation Act . . . . . . . . 577
Harvard Business Services v. Coyle . . . . . . . . 579
Cooper v. Goodman . . . . . . . . . . . . . . . . . 580
Friedman v. Rogers . . . . . . . . . . . . . . . . . 580
4 Ticker Symbols . . . . . . . . . . . . . . . . . . . . . 582
Eric Levenson, Investors Buy Up Worthless
Stock After Confusing It for an Actual Success-
ful Company . . . . . . . . . . . . . . . . . . 582
FINRA Uniform Practice Advisory # 39 -13 . . . . 583
Central Parking Corp. v. Park One Inc. . . . . . . 583
Exxon Corp. v. Xoil Energy Resources, Inc. . . . . 584
MDT Corp. v. New York Stock Exchange, Inc. . . 586
Comments of James Angel on General Portability
Filing . . . . . . . . . . . . . . . . . . . . . . 588
5 ISBNs . . . . . . . . . . . . . . . . . . . . . . . . . . 594
ISBN.org, FAQs: General Questions . . . . . . . 594
6 License Plates . . . . . . . . . . . . . . . . . . . . . . 596
Wooley v. Maynard . . . . . . . . . . . . . . . . . 596
Mitchell v. Maryland Motor Vehicle Administration597
Nevada Administrative Code § 482.320 . . . . 602
7 Domain Names . . . . . . . . . . . . . . . . . . . . . 603
Anticybersqua ing Consumer Protection Act . 603
Uniform Domain-Name Dispute Resolution
Policy . . . . . . . . . . . . . . . . . . . . . . 605
8 Online Accounts . . . . . . . . . . . . . . . . . . . . 608
Twi er Rules . . . . . . . . . . . . . . . . . . . . 608
9 Stage Names . . . . . . . . . . . . . . . . . . . . . . 610
Professional Name Policy . . . . . . . . . . . . . . 610
David Fagundes, Talk Derby to Me: Intellec-
tual Property Norms Governing Roller Derby
Pseudonyms . . . . . . . . . . . . . . . . . . . 610
7 Advertising 619
A False Advertising . . . . . . . . . . . . . . . . . . . . . . 620
Lanham Act § 43(a)(1)(B) . . . . . . . . . . . . . 620
1 ”Ownership”: Competitor Standing . . . . . . . . 620
American Washboard Co. v. Saginaw Mfg. Co. . . 621
Ely-Norris Safe Co. v. Mosler Safe Co. . . . . . . . 621
Mosler Safe Co. v. Ely-Norris Safe Co. . . . . . . . 622
Lexmark International, Inc. v. Static Control
Components, Inc. . . . . . . . . . . . . . . . . 622
2 ”Infringement”: Prohibited Conduct . . . . . . . . 626
Greater Houston Transportation Company v.
Uber Technologies, Inc. . . . . . . . . . . . . . 626
Procter & Gamble Co. v. Haugen . . . . . . . . . 628
3 ”Infringement”: Falsity and Materiality . . . . . . 629
Pizza Hut, Inc. v. Papa John’s Intern., Inc. . . . . 629
McNeil-PPC, Inc. v. Pfizer Inc. . . . . . . . . . . 642
Satellite TV Problem . . . . . . . . . . . . . . . 645
4 Secondary Liability . . . . . . . . . . . . . . . . . . 646
Duty Free Americas, Inc. v. Estee Lauder Compa-
nies, Inc. . . . . . . . . . . . . . . . . . . . . . 646
B Alternatives to Competitor Suits . . . . . . . . . . . . . 649
1 Commercial Disparagement and Related Torts . . 649
HipSaver, Inc. v. Kiel . . . . . . . . . . . . . . . . 649
Aviation Charter, Inc. v. Aviation Research . . . . 650
2 Consumer Suits . . . . . . . . . . . . . . . . . . . . 653
Perrine v. Sega of America, Inc. . . . . . . . . . . 653
3 FTC Enforcement . . . . . . . . . . . . . . . . . . . 656
Federal Trade Commission v. Winsted Hosiery
Company . . . . . . . . . . . . . . . . . . . . 656
Kraft, Inc. v. FTC . . . . . . . . . . . . . . . . . . 658
Le er from Federal Trade Commission to Mi-
crosoft Corp. and Starcom MediaVest Group . . 659
C Other Sources of Advertising Law . . . . . . . . . . . . 662
1 Trademark . . . . . . . . . . . . . . . . . . . . . . . 662
Lanham Act §§ 2(e)(1), (f) . . . . . . . . . . . . 662
In re Budge Mfg. Co. . . . . . . . . . . . . . . . . 662
2 Certifications . . . . . . . . . . . . . . . . . . . . . . 664
Lanham Act § 45 (“certification mark”) . . . . . 664
TMEP § 1306 . . . . . . . . . . . . . . . . . . . . 665
Fair Trade USA Farm Workers Standard . . . . . 666
Understanding the FCC Regulations for Low-
Power, Non-Licensed Transmi er . . . . . . . 667
Inspection & Grading of Meat and Poultry: What
Are the Differences? . . . . . . . . . . . . . . . 668
3 Geographic Indications . . . . . . . . . . . . . . . . 669
Justin Hughes, Champagne, Feta, and Bourbon –
The Spirited Debate About Geographical Indi-
cations . . . . . . . . . . . . . . . . . . . . . . 669
TRIPS arts. 22–24 . . . . . . . . . . . . . . . . . 671
Lanham Act § 2 . . . . . . . . . . . . . . . . . . 672
Guantanamera Cigar Co. v. Corporacion Habanos 673
Labeling and Advertising of Distilled Spirits,
27 C.F.R Part 5 . . . . . . . . . . . . . . . . . 677
Textile Products Identification Act . . . . . . . 678
Melting Bad Problem, Redux . . . . . . . . . . 679
4 Regulation . . . . . . . . . . . . . . . . . . . . . . . 679
POM Wonderful LLC v. The Coca-Cola Company 680
Rebecca Tushnet, It Depends on What the Mean-
ing of ”False” is: Falsity and Misleadingness
in Commercial Speech Doctrine . . . . . . . . . 682
Commack Self-Service Kosher Meats, Inc. v. Weiss 684
Levy v. Kosher Overseers Ass’n of America, Inc. . 687
5 Mandatory Disclosures . . . . . . . . . . . . . . . . 688
American Meat Institute v. Dept. of Agriculture . 688
National Ass’n of Mfrs. v. Securities and Ex-
change Commission [I] . . . . . . . . . . . . . 690
National Ass’n of Mfrs. v. Securities and Ex-
change Commission [II] . . . . . . . . . . . . . 691
6 Self-Regulation . . . . . . . . . . . . . . . . . . . . . 692
Mead Johnson Nutritionals (Enfamil LIPIL) . . . . 692
CARU Press Release . . . . . . . . . . . . . . . . 695
7 Problems . . . . . . . . . . . . . . . . . . . . . . . . 696
Scavenger Hunt Problem . . . . . . . . . . . . . 696
problems/fortunetelling . . . . . . . . . . . . . 696
8 Personality Rights 697
A Right of Publicity . . . . . . . . . . . . . . . . . . . . . . 697
1 Ownership . . . . . . . . . . . . . . . . . . . . . . . 697
a Privacy Theories . . . . . . . . . . . . . . . . . 698
Roberson v. Rochester Folding Box Co. . . . . . . 698
New York Civil Rights Law § 51 . . . . . . . . . 700
Pavesich v. New England Life Ins. Co. . . . . . . . 701
O’Brien v. Pabst Sales Co. . . . . . . . . . . . . . 704
b Property Theories . . . . . . . . . . . . . . . . . 705
Haelan Laboratories v. Topps Chewing Gum . . . 705
Joseph R. Grodin, Note: The Right of Publicity:
A Doctrinal Innovation . . . . . . . . . . . . . 707
Fraley v. Facebook, Inc. . . . . . . . . . . . . . . . 708
2 Subject Ma er . . . . . . . . . . . . . . . . . . . . . 710
Midler v. Ford Motor Co. . . . . . . . . . . . . . . 710
White v. Samsung Electronics America, Inc. . . . . 713
White v. Samsung Electronics America, Inc. . . . . 716
3 Procedures . . . . . . . . . . . . . . . . . . . . . . . 718
Hebrew University of Jerusalem v. General Motors 718
4 Infringement: Similarity . . . . . . . . . . . . . . . 723
Hooker v. Columbia Pictures Industries, Inc. . . . 723
5 Infringement: Prohibited Conduct . . . . . . . . . 725
a Direct Infringement . . . . . . . . . . . . . . . 725
Stephano v. News Group Publications, Inc. . . . . 725
Washington v. Brown & Williamson Tobacco Corp. 728
b Secondary Liability . . . . . . . . . . . . . . . . 730
Perfect 10, Inc. v. Cybernet Ventures, Inc. . . . . . 730
6 Defenses . . . . . . . . . . . . . . . . . . . . . . . . . 733
Allison v. Vintage Sports Plaques . . . . . . . . . 733
Rosa and Raymond Parks Institute for Self Devel-
opment v. Target Corp. . . . . . . . . . . . . . 735
No Doubt v. Activision Publishing, Inc. . . . . . . 739
7 Problems . . . . . . . . . . . . . . . . . . . . . . . . 748
Governator Problem . . . . . . . . . . . . . . . 748
Tony Twist Problem . . . . . . . . . . . . . . . . 749
B Moral Rights . . . . . . . . . . . . . . . . . . . . . . . . . 750
Peter Baldwin, T C W : T
C T -A B . . . 751
Roberta Rosenthal Kwall, Copyright and the
Moral Right: Is an American Marriage Possible?751
Berne Convention art. 6bis . . . . . . . . . . . . 754
Copyright Act § 106A . . . . . . . . . . . . . . . 754
1 Integrity . . . . . . . . . . . . . . . . . . . . . . . . . 756
Massachuse s Museum of Contemporary Art
Foundation v. Büchel . . . . . . . . . . . . . . 756
Philips v. Pembroke Real Estate, Inc. . . . . . . . . 764
Clean Flicks of Colorado, LLC v. Soderbergh . . . . 768
Prepared Statement of Taylor Hackford on Behalf
of the Directors Guild of America . . . . . . . . 769
2 A ribution . . . . . . . . . . . . . . . . . . . . . . . 771
Williams v. UMG Recordings, Inc. . . . . . . . . . 771
Catherine L. Fisk, Credit Where It’s Due: The
Law and Norms of A ribution . . . . . . . . . 772
C People as Trademarks . . . . . . . . . . . . . . . . . . . 774
Lanham Act §§ 2(c), (d)(4) . . . . . . . . . . . . 774
Peaceable Planet, Inc. v. Ty, Inc. . . . . . . . . . . 774
David B. Findlay, Inc. v. Findlay . . . . . . . . . 775
Hebrew University of Jerusalem v. General Mo-
tors LLC . . . . . . . . . . . . . . . . . . . . . 779
Brown v. Electronic Arts, Inc. . . . . . . . . . . . 780
Melting Bad Problem, Re-Redux . . . . . . . . 782
D Personal Names . . . . . . . . . . . . . . . . . . . . . . . 782
Laura A. Heymann, Naming, Identity, and
Trademark Law . . . . . . . . . . . . . . . . . 782
Carlton F.W. Larson, Naming Baby: The Consti-
tutional Dimensions of Parental Naming Rights 783
In re Mokiligon . . . . . . . . . . . . . . . . . . . 785
Petition of Variable . . . . . . . . . . . . . . . . . 786
In re Ravitch . . . . . . . . . . . . . . . . . . . . 787
In re Serpentfoot . . . . . . . . . . . . . . . . . . 788
Weingand v. Lorre . . . . . . . . . . . . . . . . . 789
Application of Clark . . . . . . . . . . . . . . . . . 790
In re Name Change of Handley . . . . . . . . . . . 791
In re Porter . . . . . . . . . . . . . . . . . . . . . 792
E Defamation and False Light . . . . . . . . . . . . . . . . 792
Milkovich v. Lorain Journal Co. . . . . . . . . . . 792
Restatement (Second) of Torts § 652E . . . . . . 797
Tyne ex rel. Tyne v. Time Warner Entertainment
Co., L.P. . . . . . . . . . . . . . . . . . . . . . 798
Restatement (Second) of Torts § 564 cmt. d . . 801
Jessica Litman, Information Privacy/Information
Property . . . . . . . . . . . . . . . . . . . . . 802
9 Design 803
A Patent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 803
B Copyright . . . . . . . . . . . . . . . . . . . . . . . . . . . 803
1 Useful Articles . . . . . . . . . . . . . . . . . . . . . 804
Mazer v. Stein . . . . . . . . . . . . . . . . . . . 804
Copyright Act § 101 (”useful article”) . . . . . . 805
H.R. Rep No. 94-1476 . . . . . . . . . . . . . . . 806
Brandir Intern., Inc. v. Cascade Pacific Lumber Co. 807
Eames Chair Problem . . . . . . . . . . . . . . . 813
Copyright Act § 113 . . . . . . . . . . . . . . . . 813
Report of the Register of Copyrights on the
General Revision of the Copyright Law
(1961) . . . . . . . . . . . . . . . . . . . . . . 814
Model Car Problem . . . . . . . . . . . . . . . . 815
2 Architecture . . . . . . . . . . . . . . . . . . . . . . . 815
Kevin Emerson Collins, Economically Defeasi-
ble Rights to Facilitate Information Disclosure:
The Hidden Wisdom of Pre-AWCPA Copyright 816
Copyright Act § 120 . . . . . . . . . . . . . . . . 817
37 C.F.R. § 202.11 . . . . . . . . . . . . . . . . . 817
Intervest Construction., Inc. v. Canterbury Estate
Homes . . . . . . . . . . . . . . . . . . . . . . 817
Zalewski v. Cicero Builder Dev., Inc. . . . . . . . . 818
Embassy Problem . . . . . . . . . . . . . . . . . 821
3 Moral Rights . . . . . . . . . . . . . . . . . . . . . . 821
Cheffins v. Stewart . . . . . . . . . . . . . . . . . 821
C Trademark . . . . . . . . . . . . . . . . . . . . . . . . . . 826
Wal-Mart Stores, Inc. v. Samara Brothers, Inc. . . 827
Lanham Act §§ 2(e)(5), 43(a)(3) . . . . . . . . . 830
TrafFix Devices, Inc. v. Marketing Displays, Inc. . 830
In re Florists’ Transworld Delivery, Inc. . . . . . . 835
Maker’s Mark Distillery, Inc. v. Diageo North
America, Inc. . . . . . . . . . . . . . . . . . . 837
Eames Chair Problem, Revisited . . . . . . . . 838
Pez Dispenser Problem . . . . . . . . . . . . . . 838
D Design Patent . . . . . . . . . . . . . . . . . . . . . . . . 838
Patent Act §§ 171, 173 . . . . . . . . . . . . . . . 839
1 Subject Ma er . . . . . . . . . . . . . . . . . . . . . 844
a Articles of Manufacture . . . . . . . . . . . . . 844
In re Hruby . . . . . . . . . . . . . . . . . . . . . 844
In re AlSabah . . . . . . . . . . . . . . . . . . . . 847
b Ornamentality . . . . . . . . . . . . . . . . . . . 849
In re Webb . . . . . . . . . . . . . . . . . . . . . . 849
Rosco, Inc. v. Mirror Lite Co. . . . . . . . . . . . 851
In re Koehring . . . . . . . . . . . . . . . . . . . . 852
2 Procedures . . . . . . . . . . . . . . . . . . . . . . . 854
MPEP § 1503 . . . . . . . . . . . . . . . . . . . . 854
Patent Act § 173 . . . . . . . . . . . . . . . . . . 856
3 Ownership . . . . . . . . . . . . . . . . . . . . . . . 856
a Novelty . . . . . . . . . . . . . . . . . . . . . . . 857
International Seaway Trading Corp. v. Walgreens
Corp. . . . . . . . . . . . . . . . . . . . . . . . 857
b Obviousness . . . . . . . . . . . . . . . . . . . . 859
MRC Innovations, Inc. v. Hunter Mfg., LLP, . . . 859
4 Infringement: Similarity . . . . . . . . . . . . . . . 863
Egyptian Goddess, Inc. v. Swisa, Inc. . . . . . . . 863
Wing Shing Products (BVI) Co. v. Sunbeam Prod-
ucts, Inc. . . . . . . . . . . . . . . . . . . . . . 868
OddzOn Products, Inc. v. Just Toys, Inc. . . . . . 873
L.A. Gear, Inc. v. Thom McAn Shoe Co. . . . . . . 874
5 Infringement: Prohibited Conduct . . . . . . . . . 874
Patent Act § 289 . . . . . . . . . . . . . . . . . . 874
Milo & Gabby, LLC v. Amazon.com . . . . . . . . 875
6 Defenses . . . . . . . . . . . . . . . . . . . . . . . . . 877
Jazz Photo Corp. v. International Trade Com’n . . 877
Ralph D. Clifford & Richard J. Pel -Steele, The
Constitutionality of Design Patents . . . . . . 877
Eames Chair Problem, Re-revisited . . . . . . . 879
E Sui Generis Regimes . . . . . . . . . . . . . . . . . . . . 880
1 Semiconductor Masks . . . . . . . . . . . . . . . . . 880
Pamela Samuelson, Creating a New Kind of In-
tellectual Property: Applying the Lessons of
the Chip Law to Computer Programs . . . . . . 880
Kal Raustiala & Christopher Sprigman, The
Piracy Paradox, Innovation and Intellectual
Property in Fashion Design . . . . . . . . . . . 882
Altera Corp. v. Clear Logic, Inc. . . . . . . . . . . 882
2 Vessel Hulls . . . . . . . . . . . . . . . . . . . . . . . 885
Bonito Boats, Inc. v. Thunder Craft Boats, Inc. . . 885
Copyright Act ch. 13 . . . . . . . . . . . . . . . 887
Maverick Boat Co., Inc. v. American Marine
Holdings, Inc. . . . . . . . . . . . . . . . . . . 890
F Fashion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 893
1 Copyright . . . . . . . . . . . . . . . . . . . . . . . . 893
Jack Adelman, Inc. v. Sonners & Gordon, Inc. . . . 893
Cheney Bros. v. Doris Silk Corporation . . . . . . 894
Fashion Originators’ Guild of America v. Federal
Trade Commission . . . . . . . . . . . . . . . 895
Peter Pan Fabrics, Inc. v. Brenda Fabrics, Inc. . . . 898
Varsity Brands, Inc. v. Star Athletica, LLC . . . . 899
2 Trademark . . . . . . . . . . . . . . . . . . . . . . . 904
Christian Louboutin v. Yves Saint Laurent America904
Christian Louboutin v. Yves Saint Laurent America911
3 Design Patent . . . . . . . . . . . . . . . . . . . . . . 914
Kal Raustiala & Christopher Sprigman, The
Piracy Paradox, Innovation and Intellectual
Property in Fashion Design . . . . . . . . . . . 914
4 Sui Generis Protection? . . . . . . . . . . . . . . . . 915
James Surowiecki, The Piracy Paradox . . . . . . 915
C. Sco Hemphill & Jeannie Suk, The Law, Cul-
ture, and Economics of Fashion . . . . . . . . . 916
Innovative Design Protection Act of 2012 . . . 918
10 Software 925
A Trade Secret . . . . . . . . . . . . . . . . . . . . . . . . . 925
Barr-Mullin, Inc. v. Browning . . . . . . . . . . . 926
Silvaco Data Systems v. Intel Corp. . . . . . . . . 926
B Patent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 930
1 Subject Ma er . . . . . . . . . . . . . . . . . . . . . 930
a Then . . . . . . . . . . . . . . . . . . . . . . . . 930
In re Bernhart . . . . . . . . . . . . . . . . . . . . 930
In re Alappat . . . . . . . . . . . . . . . . . . . . 931
State Street Bank & Trust Co. v. Signature Finan-
cial Group . . . . . . . . . . . . . . . . . . . . 934
b Now . . . . . . . . . . . . . . . . . . . . . . . . . 935
Alice Corp. v. CLS Bank Int’l . . . . . . . . . . . 935
McRO, Inc. v. Bandai Namco Games America Inc. 941
Synopsys, Inc. v. Mentor Graphics Corp. . . . . . 946
2 Procedures . . . . . . . . . . . . . . . . . . . . . . . 951
Williamson v. Citrix Online, LLC . . . . . . . . . 951
Mark A. Lemley, Software Patents and the Re-
turn of Functional Claiming . . . . . . . . . . 953
3 Obviousness . . . . . . . . . . . . . . . . . . . . . . 954
Apple Inc. v. Samsung Electronics Co., Ltd. . . . . 954
C Copyright . . . . . . . . . . . . . . . . . . . . . . . . . . . 959
1 Subject Ma er . . . . . . . . . . . . . . . . . . . . . 959
Apple Computer, Inc. v. Franklin Computer Corp. 959
Adobe Systems Inc. v. Southern Software Inc. . . . 961
Whelan Associates, Inc. v. Jaslow Dental Labora-
tory, Inc. . . . . . . . . . . . . . . . . . . . . . 963
Computer Associates Intern., Inc. v. Altai, Inc. . . 964
Oracle America, Inc. v. Google Inc. . . . . . . . . 969
Oracle America, Inc. v. Google Inc. . . . . . . . . 975
Tetris Problem . . . . . . . . . . . . . . . . . . . 982
2 Defenses . . . . . . . . . . . . . . . . . . . . . . . . . 982
Copyright Act § 117 . . . . . . . . . . . . . . . . 982
Sega Enterprises Ltd. v. Accolade, Inc. . . . . . . . 983
Universal City Studios, Inc. v. Corley . . . . . . . 985
D Trademark . . . . . . . . . . . . . . . . . . . . . . . . . . 987
Apple Inc. v. Samsung Electronics Co., Ltd. . . . . 987
E Design Patent . . . . . . . . . . . . . . . . . . . . . . . . 988
Michael Risch, Functionality and Graphical User
Interface Design Patents . . . . . . . . . . . . 989
Smartphone Problem . . . . . . . . . . . . . . . 991
11 Biotechnology 993
A Patent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 993
1 Subject Ma er . . . . . . . . . . . . . . . . . . . . . 993
Association for Molecular Pathology v. Myriad
Genetics, Inc. . . . . . . . . . . . . . . . . . . 993
In re Roslin Institute (Edinburgh) . . . . . . . . . 995
Ariosa Diagnostics, Inc. v. Sequenom, Inc. . . . . 998
DNA Copyright Problem . . . . . . . . . . . . . 1001
2 Ownership . . . . . . . . . . . . . . . . . . . . . . .1001
Schering Corp. v. Geneva Pharmaceuticals . . . . 1001
Eli Lilly and Co. v. Zenith Goldline Pharm. Inc. . 1003
3 Infringement: Similarity . . . . . . . . . . . . . . .1004
Boehringer Ingelheim Vetmedica, Inc. v. Schering-
Plough Corp. . . . . . . . . . . . . . . . . . . 1004
4 Defenses . . . . . . . . . . . . . . . . . . . . . . . . .1007
Bowman v. Monsanto Co. . . . . . . . . . . . . . 1007
B Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1012
1 Plant Patents . . . . . . . . . . . . . . . . . . . . . .1012
Imazio Nursery, Inc. v. Dania Greenhouses . . . . 1012
Mark D. Janis & Jay P. Kesan, U.S. Plant Variety
Protection: Sound and Fury ... ? . . . . . . . . 1013
Patent Act §§ 161–163 . . . . . . . . . . . . . . . 1014
37 CFR § 1.164 . . . . . . . . . . . . . . . . . . . 1014
a Subject Ma er . . . . . . . . . . . . . . . . . . .1020
In re Arzberger . . . . . . . . . . . . . . . . . . . 1020
b Procedures . . . . . . . . . . . . . . . . . . . . .1021
In re Greer . . . . . . . . . . . . . . . . . . . . . . 1021
c Ownership . . . . . . . . . . . . . . . . . . . . .1024
Ex parte Moore . . . . . . . . . . . . . . . . . . . 1024
Dunn v. Ragin v. Carlile . . . . . . . . . . . . . . 1025
In re LeGrice . . . . . . . . . . . . . . . . . . . . 1028
Yoder Bros., Inc. v. California-Florida Plant Corp. 1030
d Infringement . . . . . . . . . . . . . . . . . . .1032
Imazio Nursery, Inc. v. Dania Greenhouses . . . . 1032
Armstrong Nurseries, Inc. v. Smith . . . . . . . . 1036
2 Plant Variety Protection Act . . . . . . . . . . . . .1037
S. Rep. 91-1246 (1970) . . . . . . . . . . . . . . . 1037
a Subject Ma er . . . . . . . . . . . . . . . . . . .1049
PVPA § 42 . . . . . . . . . . . . . . . . . . . . . 1049
b Procedures . . . . . . . . . . . . . . . . . . . . .1049
PVPA § 52 . . . . . . . . . . . . . . . . . . . . . 1049
Genecorp, Inc. v. Progeny Advanced Genetics, Inc. 1050
PVPA § 83 . . . . . . . . . . . . . . . . . . . . . 1052
c Ownership . . . . . . . . . . . . . . . . . . . . .1053
PVPA § 42 . . . . . . . . . . . . . . . . . . . . . 1053
d Defenses . . . . . . . . . . . . . . . . . . . . . .1055
PVPA §§ 44, 112–115 . . . . . . . . . . . . . . . 1055
Jim Chen, The Parable of the Seeds . . . . . . . . 1056
e Infringement . . . . . . . . . . . . . . . . . . .1061
PVPA § 111 . . . . . . . . . . . . . . . . . . . . . 1061
22 TABLE OF CONTENTS
Delta and Pine Land Co. v. Sinkers Corp. . . . . . 1063
3 The Punchline . . . . . . . . . . . . . . . . . . . . .1073
JEM Ag Supply, Inc. v. Pioneer Hi-Bred Interna-
tional, Inc. . . . . . . . . . . . . . . . . . . . . 1073
C Drug Approval . . . . . . . . . . . . . . . . . . . . . . . .1075
1 Patent Issues . . . . . . . . . . . . . . . . . . . . . .1075
Kara B. Swanson, Food and Drug Law as Intel-
lectual Property Law . . . . . . . . . . . . . . 1075
Merck KGaA v. Integra Lifesciences I, Ltd. . . . . 1079
Eli Lilly & Co. v. Medtronic, Inc. . . . . . . . . . 1079
2 Hatch-Waxman . . . . . . . . . . . . . . . . . . . . .1081
United States v. Generix Drug Corp. . . . . . . . 1082
FTC v. Actavis, Inc. . . . . . . . . . . . . . . . . 1083
Actavis Elizabeth LLC v. U.S. Food and Drug Ad-
min. . . . . . . . . . . . . . . . . . . . . . . . 1083
Erika Lie an, The Myths of Data Exclusivity . . 1085
Caraco Pharmaceutical Labs v. Novo Nordisk . . . 1087
FTC v. Actavis, Inc. . . . . . . . . . . . . . . . . 1090
3 Orphan Drugs . . . . . . . . . . . . . . . . . . . . .1094
Genentech, Inc. v. Bowen . . . . . . . . . . . . . . 1094
Sigma-Tau Pharmaceuticals, Inc. v. Schwe . . . 1096
D Drug Marketing . . . . . . . . . . . . . . . . . . . . . . .1098
1 Names . . . . . . . . . . . . . . . . . . . . . . . . . .1098
Note on Drug Naming . . . . . . . . . . . . . . 1098
S. Rep. 87-448 (1961) . . . . . . . . . . . . . . . 1103
21 C.F.R. § 201.10 . . . . . . . . . . . . . . . . . 1104
Kos Pharmaceuticals, Inc. v. Andrx Corp. . . . . . 1105
666 Problem . . . . . . . . . . . . . . . . . . . . 1108
2 Design . . . . . . . . . . . . . . . . . . . . . . . . . .1108
Shire US Inc. v. Barr Laboratories, Inc. . . . . . . 1108
Jeremy A. Greene & Aaron S. Kesselheim,
Why Do the Same Drugs Look Different? Pills,
Trade Dress, and Public Health . . . . . . . . . 1111
3 Labeling and Advertising . . . . . . . . . . . . . . .1113
Consumer-Directed Broadcast Advertisements:
Guidance for Industry . . . . . . . . . . . . . . 1114
Le er from Robert Dean, Division Director,
OPDP, FDA, to Eric Gervais . . . . . . . . . . 1115
United States v. Caronia . . . . . . . . . . . . . . 1117
Wyeth v. Levine . . . . . . . . . . . . . . . . . . . 1120
PLIVA, Inc. v. Mensing . . . . . . . . . . . . . . 1121
SmithKline Beecham v. Watson Pharmaceuticals . 1122
Bizarro World Redux Problem . . . . . . . . . . 1125
Introduction
Why This Book?
This book takes its subtitle from Sheldon Axler’s Linear Algebra Done
Right and its inspiration from a line by the great mathematician Emil
Artin: ”It is my experience that proofs involving matrices can be
shortened by 50% if one throws the matrices out.” Matrices are nu-
merical representations of mathematical operations; proofs involving
them tend to look something like:
a1,1 · · · a1,i ··· a1,n ca1,1 · · · ca1,i ··· ca1,n
.. .. .. .. .. ..
. . . . . .
c aj,1 · · · aj,i ··· aj,n = caj,1 · · · caj,i ··· caj,n
. .. .. . .. ..
.. . . .. . .
am,1 · · · am,i · · · am,n cam,1 · · · cam,i · · · cam,n
Axler’s book throws most of the matrices out, and as a result, is one
of the clearest college mathematics textbooks ever wri en. There are
matrices and proofs using them, but they are secondary to the alge-
braic explanations and proofs, which tend to look more like:
cT (v) = T (cv)
This book is my a empt to take intellectual property law and throw
the matrices out. The matrices aren’t literal matrices, of course, or
IP would be much less fun and interesting to study, to teach, and to
practice. Instead, the matrices consist of built-up expectations about
how the subject is structured, and how it should be taught. But many
of these traditions have nothing but tradtion to support them. Cast
them aside, and what emerges is simpler, richer, and more elegant.
Coverage
The first tradition to is the assumption that ”intellectual property” pri-
marily means patent, copyright, and trademark. These three fields
24 TABLE OF CONTENTS
dominate most IP courses and most casebooks. Trade secret law usu-
ally makes a walk-on appearance, as does the right of publicity, but
that is typically it. Design patents, false advertising, and idea protec-
tion may be mentioned as afterthoughts. I don’t mean to denigrate
patent, copyright, and trademark. They are important, and an IP
course that omi ed one of them would be seriously deficient. But
they are not so much more important than other fields of IP that they
should push those other fields out of the picture.
For one thing, these other fields are important in regular ”IP” prac-
tice: just ask any observer of the smartphone design-patent wars, any
employment lawyer negotiating an NDA, or any business lawyer re-
It probably does not help that the Big viewing ad copy for substantiation. A professor who lets students
Three are all federal regimes, leading leave the IP survey unaware these bodies of law even exist commits
students to neglect the importance of
academic malpractice.
state law.
If that weren’t enough, these other fields help illuminate the tra-
ditional ones. Trademark law’s treatment of descriptive and mis-
descriptive marks looks very different after a trip through false-
advertising law: the difference between an arbitrary mark and a mis-
descriptive one is whether consumers are in on the joke. Recognizing
that the reverse engineering privilege in trade secret law is a form of
exhaustion helps clarify exhaustion in patent law.
Thus, this book casts an extremely broad net when including IP
regimes. In my view, intellectual property consists of any private
right to prevent other people from using information. This encom-
passes contracts for the use of information, trade secrets, copyrights,
trademarks, unfair competition, parts of false advertising law, geo-
graphic indications, rights of publicity, moral rights, design patents,
and a miscellany of federal and state regimes like boat-hull protec-
tions and common-law misappropriation. They are all given serious
a ention.
Having cast a wide net to gather in IP regimes, the book then casts
its net widely again within each system. My working mo o when
debating what to include was no unpleasant surprises. It is fine to ges-
ture at something big and messy whose details are not filled in in the
slightest – like the compulsory copyright license for satellite broad-
casting, whose rules fill dozens of pages in sections 119 and 122 of title
17. But it is not fine to pass by something that comes up regularly, is
important when it does, and whose existence is not easily predictable
–like the exemption in section 110 for many in-person noncommercial
public performances. Thus, the book is unusually detailed in cov-
ering theories of liability and major defenses: examples include the
DMCA’s prohibition on removing copyright management informa-
tion, the unfair-competition cause of action for deliberate passing off
even in the absence of trademark rights, and the limitation of patent
remedies against medical practitioners.
TABLE OF CONTENTS 25
And finally, the book casts its net widely a third time to sweep
in bodies of law that are not traditionally regarded as ”intellectual
property” at all, but have something to teach about how intellectual
property law works. Sometimes, this is because they provide use-
ful points of comparison: FOIA and classification effectively create a
body of secrecy law for the government, and seeing how they work
clarifies what is distinctive about trade secret law. Sometimes, it is
because they provide the backdrop against which ”intellectual prop-
erty” law plays out: pharmaceutical patent law is unintelligible with-
out a grounding in the drug-approval process. And sometimes, it
is because they really are intellectual property law: Actors Equity
gives out stage names on a first-come first-served basis, and while
the resulting rights are narrow and privately created, they are abso-
lute within the relevant domain. Thus, the book includes such un-
usual topics as FOIA, privacy torts, drug approval and labeling, state
business name registries, country-of-origin labeling statutes, the law
of personal name changes, and the BBB’s advertising self-regulatory
programs.
Given this wide range of subjects, the book does not cover each of
them in equal depth. Instead, I have tried to do two things. On the
one hand, I try to give a good conceptual sense for how each body
of IP law thinks about the world. Students should know that copy-
right is built around originality and similarity; that trademark is built
around distinctiveness, priority, and confusion; that advertising is
built around truth; and so on. The cases and materials are selected
and arranged to build this intuition, even at the expense of detail. The
point is to leave readers in a position where they can make plausible
interpolations in the parts of the subjects they have not seen. A good
first guess and good research skills will take you surprisingly far.
On the other hand, the book is relentlessly comparative. I don’t
mean that it’s internationally comparative, although some sections
do sketch the major distinctions between the U.S. approach and other
countries’ (e.g. on geographic indications and moral rights). In-
stead, it draws every possible comparison within American IP law.
It does this at a macro level, emphasizing the similarities and the
differences between the basic principles undergirding each body of
IP law. For example, patent and copyright think similarly about in-
centives, while trademark and false advertising think similarly about
consumers. And it does this at a micro level, se ing up similar doc-
trines across IP fields to compare and contrast. For example, trade
secret law shares with copyright law the requirement that the defen-
dant must have copied from the plaintiff to infringe, which plays out in
their similarly permissive a itude in allowing multiple independent
parties to lay claim to the same information simultaneously. They
stand in sharp contrast to patent and trademark, where subsequent
26 TABLE OF CONTENTS
independent creation can only mitigate the consequences of infringe-
ment, rather than negating it entirely.
A Taxonomy of IP
To make the internal logic of each IP field clearer, and to facilitate
comparisons between them, I have imposed a rigorous structure on
The only exceptions are those fields, them. The two basic issues for any form of IP are protection and
like geographic indications, discussed infringement; as far as possible, I try to keep them distinct. I insist
too briefly to bother with the full struc-
on the division even for areas, like rights of publicity, where it is not
ture.
conventionally made. But whether the defendants are trading on the
plaintiff’s identity is a different question than which aspects of that
identity are protectable at all, and separating them clarifies what is at
stake in each.
I further divide protection into subject ma er, ownership, and
procedures, or, roughly ”what?”, ”who?” and ”how?” In copyright,
for example, subject ma er includes Feist’s famous ”modicum of cre-
ativity” and the idea/expression dichotomy; ownership includes joint
works, works made for hire, and derivative works; and procedures
include term, registration, deposit, notice, and fixation. Yes, fixation.
It isn’t a question of what information is copyrightable so much as
what one must do to obtain a copyright in that information (answer:
not much). This arrangement is a bit unconventional, but I think it’s
clearer. I tend to break up subject ma er doctrines into thresholds,
which ask whether something is [creative, secret, distinctive, etc.]
enough for an IP field to care about, and boundary conditions like
functionality, which declare something the wrong kind of thing for
an IP field. Ownership rules subdivide into rules to allocate owner-
ship with collaborations, rules to assign priority among competitors,
None of these divisions are as fully im- and rules for derivative creation that builds on others’ information.
plemented as I would like in the current Procedures are too diverse to taxonomize systematically, although
version.
registration and notice are common that I have tried to flag them
wherever they appear, and their absence wherever they don’t.
I subdivide infringement into similarity, prohibited conduct, and
defenses. The distinction between the first two is all-important. Sim-
ilarity is a test of the relationship between the plaintiff’s information
and the defendant’s; prohibited conduct deals with what the defen-
dant did with that information. Similarity is the domain of claim con-
struction and the every-element rule, of substantial similarity, and
of the likelihood of confusion. Prohibited conduct is the domain
of ”makes, uses, offers to sell, or sells” and of the exclusive rights.
It further breaks down into threshold conditions like Lanham Act
§ 43(a)(1)(B)’s ”in commercial advertising or promotion,” into intent
requirements (or their absence), (sometimes) into proof of copying
from the plaintiff, into the specific enumerated or unenumerated the-
TABLE OF CONTENTS 27
ories of direct infringement, and into various secondary liability doc-
trines. Here is where I have found the comparative method most use-
ful; it has forced me to find and present cases on topics like secondary
liability for right of publicity violations and on proving copying in
trade secret misappropriation. They exist, and they display interest-
ing and revealing variations from their more familiar cousins.
Some IP defenses are idiosyncratic, like the compulsory mechan-
ical license in copyright or the vestigial experimental use defense in
patent. But others display systematic consistency across almost all of
IP. The exhaustion defenses, which define the interface between intel-
lectual property rights in information and personal property rights in
tangible things, are essentially universal – and especially revealing,
because while every IP field embraces the exhaustion principle, each
IP field puts characteristically different limits on it. Another cluster
of common defenses protect expressive uses. Sometimes these lim-
its are internal to the doctrinal logic of an IP field; sometimes they
appear as separate defenses; sometimes they are explicitly stated as
First Amendment requirements. Again, both the similarities and the
differences are instructive.
Organization
There are three natural ways to organize material on intellectual prop-
erty. One could – like most casebooks – present it by field: trade se-
cret, patent, copyright, trademark, etc., in each case starting with pro-
tectability and moving through infringement. One could present it
by subject ma er: literature, music, characters, industrial design, soft-
ware, etc., in each case discussing all of the relevant IP fields. Or one
could present it by doctrine: subject ma er, ownership, procedure,
similarity, etc., in each case moving through relevant IP fields. I have
used all three.
Large parts of the book are organized by IP field: there are chap-
ters (or major sections) devoted to trade secret, patent, copyright,
trademark, false advertising, right of publicity, and design patents.
Each of them takes a single IP field and marches through the sex-
partite taxonomy of topics. The order varies a bit (the complexity
and centrality of patent prosecution means it makes sense to address
patent procedures before patent ownership), sometimes the divisions
aren’t worth insisting on (in trademark, similarity tests are just one
factor in multiple likelihood of confusion tests), and some areas omit
one or more entirely (there are no meaningful procedural prerequi-
sites to protection against false advertising). But these sections all
more or less stick to this structure. These six topics – subject ma er,
ownership, procedures, similarity, prohibited conduct, and defenses
– suffice to give a reasonably clear account of how an IP field looks at
28 TABLE OF CONTENTS
the world.
Mixed in with these in-depth treatments are quicker hits on re-
I would have liked to include a chapter lated fields of IP and IP-adjacent law. The general rule is that they
on federal preemption that also covers are presented in connection with the major IP fields they shed light
the miscellaneous fragments of state
on. Thus intrusion on seclusion, FOIA, and classification show up
IP law that survive preemption and are
not already covered elsewhere. I did in the trade secret chapter; phone numbers, radio callsigns, and busi-
not complete that chapter in time for ness name registries in the trademark chapter; FTC and consumer
my fall 2016 course. false advertising suits in the advertising chapter; and so on.
Conversely, I have also distributed out subject-ma er-specific
parts of traditional IP fields to chapters dedicated to IP fields that
more squarely address those subject ma ers. This first happens in
the advertising chapter; I deliberately hold over the material on cer-
tification marks and deceptive marks from the trademark chapter so
that I can juxtapose it with the false advertising materials. Materiality
in the context of Lanham Act § 2(a) makes more sense once readers
have seen it at work in § 43(a)(1)(B) cases. I pull similar stunts by
pu ing moral rights in the ”personality rights” chapter rather than
the copyright chapter; geographically descriptive and misdescriptive
marks in the geographic indications chapter; useful articles, architec-
tural works, and functional marks in the design chapter alongside
design patents.
The extreme examples of this approach are the chapters devoted
to software and to biotechnology, both of which are immensely im-
portant and can only properly be understood by considering how
different IP fields interact. Software requires consideration of trade
secret, copyright, and patent; biotechnology law involves patent and
trademark, but also discussion of the FDA drug approval process and
regulation of drug marketing and labeling. (Again, my broad under-
standing of what is relevant to IP means that I have no compunction
against treating these regulatory regimes as establishing de facto IP
regimes.)
This "rest" of the book remains hypo- The rest of the book consists of chapters devoted to cross-cu ing
thetical for now. topics where there is more insight to be gained from se ing out gen-
eral principles and then seeing how different IP fields play out vari-
ations on the theme: litigation, remedies, transactions, and interna-
tional IP. One could include these issues within each substantive
chapter, but for the most part, I find it clearer just to save these is-
sues for dedicated chapters.
What This Book Is Not
This is, as I said, a book about the structure of IP law. Traditional
casebooks try to do many other things, and I want to be clear on the
sacrifies I have made.
This is not a book on learning to think like a lawyer. I have made
TABLE OF CONTENTS 29
no concessions to making cases ”teachable” in a standard Socratic
sense. I have cut out procedural postures. I have cut out reason-
ing from precedent. I have cut out dissents, even brilliant and well-
argued ones. I have cut judges’ names, and sometimes cut parties’
names. In extreme cases, I have cut out all the facts, or all of the rea-
soning supporting a holding.
Part of this is a sense that traditional case reading and analysis –
valuable skills that they are – are overvalued in most law schools. Part
of it also is the freedom that comes from teaching IP to LLM students,
for whom ”thinking like a lawyer” is not something to be learned but
one of the prerequisites for admission. And part of it is the critical
distance that I have gained on the enterprise of legal education since
moving to an institution where most of my colleagues are not law
professors. Things that once seemed natural to me are strange now.
This is also not a book on IP policy. My discussions of the policy
rationales for IP fields are exceedingly brief. I have cut substantial
chunks of the policy discussions from the cases I excerpt. In some
cases, the policy arguments are essential to understanding the hold-
ings and the concepts they rely on. But if this book is at all useful for
teeing up discussions of IP policy, it is entirely by accident.
Cases and Materials
The overriding principle for my selection of cases and other materi-
als was clarity. Accordingly, I have tried hard to find cases that are
either broadly representative of the doctrinal point they stand for or
that state it succinctly. In my years of teaching the IP survey I came
to loathe the memorable but unusual cases, because students invari-
ably remembered them for the wrong points. I have tried to avoid
including cases that go off on tangents that haven’t been picked up
on; they give an incorrect impression of where the action is.
Where there is a genuine doctrinal split in contemporary caselaw,
I have tried to make this clear in the materials I have chosen: either by
pairing cases on either side of an issue, by picking a case with a strong
and well-taken dissent, or by picking a case that respectfully presents
the other side of the debate before disagreeing with it. Where there is
not a major split in the caselaw, I have tried hard to present the false
impression of one.
I have also tried to strike a balance between teachability and au-
thority. My sense is that most casebooks tend too much towards re-
spectful but excessive quotation from Supreme Court opinions. But
for various institutional reasons – including the Supreme Court’s rar-
ified docket, its emphasis on following its own precedents to the ex-
clusion of ”inferior” courts’ wisdom, its frequent unwillingness to re-
solve the actual case before it, and some Justices’ regre able writerly
30 TABLE OF CONTENTS
habits – Supreme Court opinions are often terrible teaching cases. I
have responded by excerpting these cases with extreme brevity, or
by presenting them in reflection – as other courts apply the Supreme
Court’s holdings to crisper fact pa erns.
Editing
My editorial technique is borrowed from Sweeney Todd: extensive
and shocking cuts. These are pedagogical materials, not a legal brief.
I have not put words in anyone else’s mouth, but I have been uncon-
cerned with the usual editorial apparatus of ellipses and brackets. I
drop words from sentences, sentences from paragraphs, paragraphs
from opinions – all with no indication that anything is gone. I also
reorder paragraphs and sometimes sentences as needed to improve
the readability of a passage. My goal is to make it easy for the reader.
If it ma ers to you what the original said, consult the original.
Similarly, I have been ruthless in pruning citations. Editorial con-
ventions that make sense in briefs and opinions are not appropriate
for teaching materials. Generally, I have kept citations only when
the case being cited is important in its own right or when the citation
is impossible to remove without great awkwardness. I have had no
qualms about a ributing to courts things they quoted other courts as
saying.
I also discarded the tradition that a case should be presented as
a case. There are cases with wonderful discursive passages – like
Judge Posner’s musings on the protectability of names as trademarks
in Peaceable Planet – embedded in larger messes. My edit of peaceable-
planet keeps this discussion of name marks and discards everything
else, including the facts and holding. There are also cases that are
important for their holdings, like Grokster and AWH, but which take
their damn time ge ing there. I kept the holdings and cut everything
else.
Sometimes, the best way to make a point isn’t with a case at all.
The federal government has published outstanding guides to patent,
copyright, and trademark law: the MPEP, Compendium, and TMEP,
respectively. I have freely drawn from them, along with Restatement
sections, regulations, and law-review articles whenever I thought
that they covered the ground be er than the cases I had to work with.
For rarely-litigated ma ers like the deposit requirement, these sec-
ondary materials are far and away the best option. I have wri en
notes and introductory materials where necessary, but I tried to keep
them focused on bringing out structural issues, rather than saying
again what others have already said be er.
TABLE OF CONTENTS 31
Formatting
Another crucial early decision was to format the text with a two-
and-three-quarter-inch outer margin, placing notes and illustrations
in the margin alongside the text they pertain to. The design is not
original; I had seen it used very effectively in Donald Knuth et al’s
Concrete Mathematics, Robert Bringhurst’s The Elements of Typographic
Style, and Edward Tufte’s books on information design. From my
point of view, it solved three problems simultaneously:
First, the narrower text column is typographically a ractive. With There is a reason that law reviews print
such a larger outer margin, the resulting column is five inches wide, on pages that are narrower than 8.5
inches.
which makes for lines that have a comfortable font size and a com-
fortable length. Extended reading is easier and the page looks nice.
Second, margins are for marginalia. A note in the margin is less
intrusive than a box cut out of the text and easier to glance back and
forth to than a footnote. The result is that I have been free to annotate
the text liberally and a li le Talmudically. I have extensively deco-
rated the margin with illustrations from the cases being excerpted. I
have also included quotations and case summaries that might have
gone in the notes after a case in a traditional casebook, or been pre-
sented as squib cases. Having the margin available lets me include
them precisely where they are relevant. Sometimes I include see also
citations to interesting articles. And occasionally I pop in with a lead-
ing question or just a straight-up joke.
And third, the margin enables me to remove citations and other
unnecessary apparatus from the body of cases themselves. For the
most part, cases are presented with only the name of the case in the
main text: the citation is evacuated to the margin. This is another
way of clarifying of the cases themselves; citations are a remarkable
hindrance to readability. By pu ing citations alongside the text (as
in some law reviews’ online supplements), I believe I have resolved
the Garner-Posner debate over whether citations belong in text or in
footnotes. The best answer is neither: they belong in the margin.
Document Production
I used the XeLaTeX document preparation system to prepare the
manuscript of this book. XeLaTeX is a computer typse ing system
derived from Leslie Lamport’s LATEXand built on Donald Knuth’s TEX.
I type out the text of the book in a set of individual text files, marked
up with tags like
\textit{this is in italics}
. XeLaTeX then assembles the hundreds of individual files into a sin-
gle PDF output.
32 TABLE OF CONTENTS
This approach has several advantages compared with a more tra-
ditional word processor. First, where Word or Pages.app might have
choked or slowed down on a document this size, XeLaTeX has no
trouble at all. True, I needed to take a minute to recompile the PDF
each time I make changes. But the editing itself is fast and responsive.
Second, this method gave me fine-grained control over every as-
pect of how the book appears. My choice of a wide margin, for ex-
ample, with sidenotes that float with the main text, would have been
extremely difficult to implement in a word processor. With XeLaTeX,
it was a ma er of specifying the width of the margins and then writ-
ing a few commands to place materials in them in particular ways. I
have been able to customize the fonts, the colors, the forma ing of
trademarks and the captioning of images. I have also been able to hy-
perlink the short forms of cases back to the full citation introducing
them – all while automatically pulling them into the indices at the
back of the book.
Some of my more specific forma ing choices are also worth com-
menting on. At the moment, the book is set primarily in Palatino,
which I chose because it is an a ractive typeface that is widely avail-
able and happens to be Cornell’s principal typeface. (Similarly, the
accent color is Cornell red.) The header typeface, used for the running
heads, the marginal notes and captions, and case names, is Myriad,
which is also widely available.
I think the choice to use splashes of color is a no-brainer. It doesn’t
print out on black-and-white printers, but given that so many people
read so much on screens already, it livens up the experience for the
majority. I also think the use of a contrasting sans-serif font is eas-
ily defensible; it makes entirely clear what is part of the excerpted
material and what is editoral apparatus.
Permissions
Excerpts from cases and statutes are in the public domain as edicts of
government. Congressional reports, excerpts from the MPEP, Copy-
right Compendium and TMEP, and other federal materials are in the
public domain as government works. All other excerpted materials
are used under the fair use provisions of 17 U.S.C. § 107. If you dis-
agree with my interpretation of fair use as applied to any particular
materials, please get in touch with me to discuss.
All of my own contributions to these materials – including any
original writing, edits to existing materials, and the selection and ar-
rangement of those materials – are hereby made available for free
reuse under the terms of the Creative Commons Attribution 4.0 Interna-
tional license. Credit is not important to me, but I do care that you
preserve the license notice if you redistribute these materials.
TABLE OF CONTENTS 33
In Closing
Although I respectfully disagree with the organizational choices and
emphases of all existing casebooks, I have learned a great deal from
them. Many cases in these materials came to my a ention as good
teaching prospects because I found them in other books and admired
how the authors used them. I am grateful to everyone else who has
blazed a trail through the overgrowth that is IP law; I hope they will
not begrudge me blazing one more.
These materials were assembled for my Fall 2016 Intellectual Prop-
erty survey course at Cornell Tech. I may revise and update them the
next time I teach the course. I am sure that many errors remain (in-
deed, I have marked many on my printouts of the chapters) – but
I have not had the to go back and fix even the ones I know of, let
alone to look for the rest. I welcome any comments, suggestions, and
corrections and will try to incorporate them if I am able to make re-
visions. If you would like to customize these materials for your own
use or others’, please get in touch so we can discuss the mechanics.
I hope that you enjoy working with these materials as much as I
have enjoyed assembling them.
November 11, 2016
James Grimmelmann
Cornell Tech and Cornell Law School
james.grimmelmann@cornell.edu
34 TABLE OF CONTENTS
1
Undeveloped Ideas
To understand intellectual property law, it is necessary to understand
the problems it tries to solve. And thus we start with one of the neg-
ative spaces of intellectual property: the submission of undeveloped See Elizabeth L. Rosenblatt, A Theory of
ideas. These ideas – for reasons we will study in detail later – fail to IP's Negative Space, 34 Colum. J. L. &
Arts 317 (2011).
qualify for protection under the various bodies of intellectual prop-
erty law. And yet they still have value, which means there are re-
wards to be reaped by anyone who can create them and get them
into the right hands.
Desny v. Wilder
46 Cal. 2d 715 (1956)
In November, 1949, plaintiff telephoned Wilder’s office. Wilder’s sec-
Billy Wilder was the famous director of
retary, who was also employed by Paramount, answered, and plain- films such as Double Indemnity (1949)
tiff stated that he wished to see Wilder. At the secretary’s insistence and Some Like It Hot (1959)
that plaintiff explain his purpose, plaintiff “told her about this fantas-
tic unusual story. ... I described to her the story in a few words. ... I
told her that it was the life story of Floyd Collins who was trapped
and made sensational news for two weeks ... and I told her the plot....
I described to her the entrapment and the death, in ten minutes, prob-
ably. She seemed very much interested and she liked it.” Plaintiff In 1925, Floyd Collins was exploring
sought to send Wilder a copy of the story but when the secretary a cave in Kentucky when a rock fell
learned of its length of some 65 pages she stated that Wilder would on his leg, pinning him where he was.
He was trapped about 50 feet under-
not read it, that he wanted stories in synopsis form, that the story
ground and his friends were for sev-
would first be sent to the script department, and “in case they think eral days able to reach him from the
it is fantastic and wonderful, they will abbreviate it and condense it cave’s entrance, but neither Collins nor
in about three or four pages, and the producers and directors get to his would-be rescuers could get at the
see it.” Plaintiff protested that he preferred to do the abbreviating rock. The story of the trapped caver
became a media sensation. Unfortu-
of the story himself, and the secretary suggested that he do so. Two nately, by the time a rescue shaft dug
days later plaintiff, after preparing a three or four page outline of the from the surface reached him after two
story, telephoned Wilder’s office a second time and told the secretary weeks of work, Collins had already died.
the synopsis was ready. The secretary requested plaintiff to read the
synopsis to her over the telephone so that she could take it down in
shorthand, and plaintiff did so. During the conversation the secretary
36 CHAPTER 1. UNDEVELOPED IDEAS
told plaintiff that the story seemed interesting and that she liked it.
“She said that she would talk it over with Billy Wilder and she would
let me know.” Plaintiff on his part told the secretary that defendants
could use the story only if they paid him “the reasonable value of it
... I made it clear to her that I wrote the story and that I wanted to
sell it. ... I naturally mentioned again that this story was my story
which has taken me so much effort and research and time, and there-
fore if anybody used it they will have to pay for it ... She said that if
Billy Wilder of Paramount uses the story, ‘naturally we will pay you
for it.’” Plaintiff’s only subsequent contact with the secretary was a
telephone call to her in July, 1950, to protest the alleged use of his
Ace in The Hole (1951), directed and co- composition and idea in a photoplay. The photoplay, as hereinafter
written by Wilder shown in some detail, closely parallels both plaintiff’s synopsis and
the historical material concerning the life and death of Floyd Collins.
We conclude that conveyance of an idea can constitute valuable
consideration and can be bargained for before it is disclosed to the
proposed purchaser, but once it is conveyed, i.e., disclosed to him
and he has grasped it, it is henceforth his own and he may work with
it and use it as he sees fit. In the field of entertainment the producer
may properly and validly agree that he will pay for the service of
conveying to him ideas which are valuable and which he can put to
The court also stated that disclosure profitable use. But, assuming legality of consideration, the idea pur-
might constitute a benefit sufficient to veyor cannot prevail in an action to recover compensation for an ab-
support a future promise to pay. Cf. Re-
stract idea unless (a) before or after disclosure he has obtained an ex-
statement (Second) of Contracts § 86
(“A promise made in recognition of press promise to pay, or (b) the circumstances preceding and a end-
a benefit previously received by the ing disclosure, together with the conduct of the offeree acting with
promisor from the promisee is binding knowledge of the circumstances, show a promise of the type usually
to the extent necessary to prevent in- referred to as “implied” or “implied-in-fact.”
justice.”).
Such inferred or implied promise, if it is to be found at all, must
be based on circumstances which were known to the producer at and
preceding the time of disclosure of the idea to him and he must vol-
untarily accept the disclosure, knowing the conditions on which it
is tendered. The idea man who blurts out his idea without having
first made his bargain has no one but himself to blame for the loss
of his bargaining power. The law will not imply a promise to pay
for an idea from the mere facts that the idea has been conveyed, is
valuable, and has been used for profit; this is true even though the
conveyance has been made with the hope or expectation that some
obligation will ensue. So, if the plaintiff here is claiming only for the
conveyance of the idea of making a dramatic production out of the
life of Floyd Collins he must fail unless in conformity with the above
stated rules he can establish a contract to pay.
From plaintiff’s testimony, as epitomized above, it does not ap-
pear that a contract to pay for conveyance of the abstract photoplay
idea had been made, or that the basis for inferring such a contract
37
from subsequent related acts of the defendants had been established,
at the time plaintiff disclosed his basic idea to the secretary. Defen-
dants, consequently, were at that time and from then on free to use
the abstract idea if they saw fit to engage in the necessary research
and develop it to the point of a usable script.
Carter, Justice:
I concur only in the result reached in the majority opinion.
When we consider the difference in economic and social back-
grounds of those offering such merchandise for sale and those pur-
chasing the same, we are met with the inescapable conclusion that it
is the seller who stands in the inferior bargaining position. It should
be borne in mind that producers are not easy to contact; that those
with authority to purchase for radio and television are surrounded
by a coterie of secretaries and assistants; that magazine editors and
publishers are not readily available to the average person. It should
also be borne in mind that writers have no way of advertising their
wares – that, as is most graphically illustrated by the present opinion,
no producer, publisher, or purchaser for radio or television, is going
to buy a pig in a poke. And, when the writer, in an earnest endeavor
to sell what he has wri en, conveys his idea or his different interpre-
tation of an old idea, to such prospective purchaser, he has lost the
result of his labor, definitely and irrevocably. And, in addition, there
is no way in which he can protect himself. If he says to whomever
he is permi ed to see, or, as in this case, talk with over the telephone,
“I won’t tell you what my idea is until you promise to pay me for it,”
it takes no Sherlock Holmes to figure out what the answer will be!
This case is a beautiful example of the practical difficulties bese ing
a writer with something to sell.
It seems to me that in the ordinary situation, when the so-called
“idea man” has an opportunity to see, or talk with, the prospective
purchaser, or someone in his employ, it is at that time, without any-
thing being said, known to both parties that the one is there to sell,
and the other to buy. This is surely true of a department store when
merchandise is displayed on the counter – it is understood by anyone
entering the store that the merchandise so displayed is for sale – it is
completely unnecessary for the storekeeper, or anyone in his employ,
to state to anyone entering the store that all articles there are for sale.
I am at a loss to see why any different rules should apply when it is
ideas for sale rather than normal run of merchandise.
Michael J. Burstein 91 Tex. L. Rev. 227 (2012)
Exchanging Information Without Intellectual Property
An inventor seeking funds or development expertise may be reluc-
tant to disclose information about her invention for fear that the re-
38 CHAPTER 1. UNDEVELOPED IDEAS
cipients of the information can take it for themselves. On the other
side of the transaction, the funders or developers will be unwilling
to commit money or resources to the project unless or until they can
See Kenneth J. Arrow, Economic Welfare assess its value. Arrow observed this dynamic and deemed it a “fun-
and the Allocation of Resources for Inven- damental paradox”: the value of information “for the purchaser is
tion, in The Rate and Direction of Inven-
not known until he has the information, but then he has in effect ac-
tive Activity (1962). It is now usually
called “Arrow’s Information Paradox” in quired it without cost.” More recently, Cooter and his collaborators
his honor. have described this phenomenon as a “double trust dilemma”: “To
develop an innovation, the innovator must trust the investor not to
steal his idea, and the investor must trust the innovator not to steal
his capital.”
Apfel v. Prudential-Bache Securities, Inc.
81 N.Y.2d 470 (1993)
Defendant, an investment bank, seeks to avoid an agreement to pur-
chase plaintiffs’ idea for issuing and selling municipal bonds. Its prin-
cipal contention is that plaintiffs had no property right in the idea be-
cause it was not novel and, therefore, consideration for the contract
was lacking. For reasons which follow, we conclude that a showing of
novelty is not required to validate the contract. The decisive question
is whether the idea had value, not whether it was novel.
I
In 1982, plaintiffs, an investment banker and a lawyer, approached
defendant’s predecessor with a proposal for issuing municipal secu-
rities through a system that eliminated paper certificates and allowed
bonds to be sold, traded, and held exclusively by means of comput-
erized “book entries”. Initially, the parties signed a confidentiality
agreement that allowed defendant to review the techniques as de-
tailed in a 99-page summary. Nearly a month of negotiations fol-
lowed before the parties entered into a sale agreement under which
plaintiffs conveyed their rights to the techniques and certain trade
names and defendant agreed to pay a stipulated rate based on its use
of the techniques for a term from October 1982 to January 1988. Un-
der the provisions of the contract, defendant’s obligation to pay was
to remain even if the techniques became public knowledge or stan-
dard practice in the industry and applications for patents and trade-
marks were denied. Plaintiffs asserted that they had not previously
disclosed the techniques to anyone and they agreed to maintain them
in confidence until they became public.
From 1982 until 1985, defendant implemented the contract, al-
though the parties dispute whether amounts due were fully paid.
Defendant actively encouraged bond issuers to use the computerized
“book entry” system and, for at least the first year, was the sole under-
writer in the industry employing such a system. However, in 1985,
following a change in personnel, defendant refused to make any fur-
39
ther payments. It maintained that the ideas conveyed by plaintiffs
had been in the public domain at the time of the sale agreement and
that what plaintiffs sold had never been theirs to sell. Defendant’s
a empts to patent the techniques proved unsuccessful. By 1985, in-
vestment banks were increasingly using computerized systems, and
by 1990 such systems were handling 60% of the dollar volume of all
new issues of municipal securities.
Plaintiffs commenced this litigation seeking $45 million in com-
pensatory and punitive damages.
II
Under the traditional principles of contract law, the parties to a con-
tract are free to make their bargain, even if the consideration ex-
changed is grossly unequal or of dubious value. Absent fraud or un-
conscionability, the adequacy of consideration is not a proper subject
for judicial scrutiny. It is enough that something of “real value in the
eye of the law” was exchanged. The fact that the sellers may not have
had a property right in what they sold does not, by itself, render the
contract void for lack of consideration.
Manifestly, defendant received something of value here; its own
conduct establishes that. After signing the confidentiality agreement,
defendant thoroughly reviewed plaintiffs’ system before buying it.
Having done so, it was in the best position to know whether the idea
had value. It decided to enter into the sale agreement and aggres-
sively market the system to potential bond issuers. For at least a year,
it was the only underwriter to use plaintiffs’ “book entry” system for
municipal bonds, and it handled millions of such bond transactions
during that time. Having obtained full disclosure of the system, used
it in advance of competitors, and received the associated benefits of
precluding its disclosure to others, defendant can hardly claim now
the idea had no value to its municipal securities business. Indeed, de-
fendant acknowledges it made payments to plaintiffs under the sale
agreement for more than two years, conduct that would belie any
claim it might make that the idea was lacking in value or that it had
actually been obtained from some other source before plaintiffs’ dis-
closure.
III
Defendant’s position rests on Downey v. General Foods Corp., Soule v. Downey: 331 N.Y.2d 56 (1971)
Bon Ami Co. and similar decisions. It contends those cases establish Soule: 201 App. Div. 794 (1922)
an exception to traditional principles of contract law and require that
the idea must be novel before it can constitute valid consideration for
a contract.
In Downey, plaintiff submi ed an idea for an advertising cam-
paign. A short time later, defendant General Foods mounted a cam-
40 CHAPTER 1. UNDEVELOPED IDEAS
paign that was similar to the one plaintiff had suggested and plaintiff
sought damages in a complaint alleging several theories for recovery.
We ordered the dismissal of the complaint on two separate grounds:
first, the lack of novelty and, second, defendant’s prior possession of
the idea – i.e., its lack of novelty as to defendant. To the extent plain-
tiff’s causes of action were grounded on assertions of a property right,
we found that they were untenable “if the elements of novelty and
originality [were] absent, since the property right in an idea is based
upon these two elements.” Second, we concluded that the defendant
possessed plaintiff’s ideas prior to plaintiff’s disclosure. Thus, the
ideas could have no value to defendant and could not supply consid-
eration for any agreement between the parties.
In Soule, plaintiff made an express contract with Bon Ami to
disclose a way to increase profits. The idea consisted largely of a
proposal to raise prices. The Appellate Division, in a frequently
cited opinion, denied plaintiff any recovery, finding that the bargain
lacked consideration because the idea was not novel. This Court af-
firmed but it did so on a different basis: it held that plaintiff had failed
to show that profits resulted from the disclosure.
These decisions do not support defendant’s contention that nov-
elty is required in all cases involving disclosure of ideas. Indeed, we
have explicitly held that it is not. Downey, Soule and cases in that line
of decisions involve a distinct factual pa ern: the buyer and seller
contract for disclosure of the idea with payment based on use, but no
separate postdisclosure contract for use of the idea has been made.
Thus, they present the issue of whether the idea the buyer was using
was, in fact, the seller’s.
Such transactions pose two problems for the courts. On the one
hand, how can sellers prove that the buyer obtained the idea from
them, and nowhere else, and that the buyer’s use of it thus consti-
tutes misappropriation of property? Unlike tangible property, an
idea lacks title and boundaries and cannot be rendered exclusive by
the acts of the one who first thinks it. On the other hand, there is no
equity in enforcing a seemingly valid contract when, in fact, it turns
out upon disclosure that the buyer already possessed the idea. In
such instances, the disclosure, though freely bargained for, is mani-
festly without value. A showing of novelty, at least novelty as to the
buyer, addresses these two concerns. Novelty can then serve to estab-
lish both the a ributes of ownership necessary for a property-based
claim and the value of the consideration – the disclosure – necessary
for contract-based claims.
There are no such concerns in a transaction such as the one before
us. Defendant does not claim that it was aware of the idea before
plaintiffs disclosed it but, rather, concedes that the idea came from
them. When a seller’s claim arises from a contract to use an idea en-
41
tered into after the disclosure of the idea, the question is not whether
the buyer misappropriated property from the seller, but whether the
idea had value to the buyer and thus constitutes valid consideration.
In such a case, the buyer knows what he or she is buying and has
agreed that the idea has value, and the Court will not ordinarily go be-
hind that determination. The lack of novelty, in and of itself, does not
demonstrate a lack of value. To the contrary, the buyer may reap ben-
efits from such a contract in a number of ways — for instance, by not
having to expend resources pursuing the idea through other channels
or by having a profitmaking idea implemented sooner rather than
later. The law of contracts would have to be substantially rewri en
were we to allow buyers of fully disclosed ideas to disregard their
obligation to pay simply because an idea could have been obtained
from some other source or in some other way.
Bizarro World Problem
Apfel and Desny give us a glimpse of a world without intellectual
property laws. Suppose that you lived in such a world. A client Note that the defendant in Apfel tried
comes to you with one of the following. How would you advise her and failed to obtain a patent on the
computerized-book-entry idea, and
to proceed?
that the plaintiff’s suit proceeded
• A 75,000-word novel about a boy who discovers that he is a wiz- under general principles of contract
ard law. Ideas, such as "a movie about
the death of Floyd Collins," are not
• A new drug for treating heart disease, which will cost $100 mil- copyrightable.
lion to test in humans
• An easier-to-hold design for a pipe wrench
• A process for producing pure aluminum from aluminum ore
that reduces the cost by 85%
• A catchy song about taking revenge on a cheating boyfriend,
recorded in the client’s kitchen with lots of background noise
• A recut version of a popular action movie, which takes five min-
utes off the running time and makes it more suspenseful
• A sketch for an elegant off-the-shoulder dress
• A joke about traffic in Los Angeles
• The perfect name for a laundromat
Debt Collection Problem
Debt collection is a shady, high-pressure business. Collection agen-
cies buy unpaid debts in bulk from lenders and from each other, usu-
ally for a fraction of the face value of the debts. The buyer typically re-
ceives a spreadsheet listing the debtors, their addresses, the amounts
they owe, and perhaps some information about previous failed at-
tempts at collection, along with an assignment of the seller’s right to
collect the debt. Then the buyer goes to work, calling the debtor, send-
42 CHAPTER 1. UNDEVELOPED IDEAS
ing le ers, negotiating payment schedules or write-downs of the debt
in exchange for partial payment, and threatening legal action and per-
haps following through, Unsurprisingly, debt collectors are known to
use sharp tactics, including issuing unfounded legal threats, making
repeated calls, trying to collect on debts that have been discharged
in bankruptcy or where the statute of limitations has expired, and
sometimes even intimating the possibility of violence. The federal
Fair Debt Collection Practices Act and numerous state laws try to pre-
vent these abusive tactics. Here is another:
Jake Halpern, Paper Boys, N.Y. Times, Around the same time that Theresa was ge ing phone
Aug. 15, 2014. calls from a mysterious law firm, Siegel received an email
from the owner of an agency that he had hired to do his
collecting. The collectors at this agency were ge ing the
same message from many debtors: We just paid off these
accounts – to someone else. Siegel was both flummoxed
and concerned. Was this the work of a renegade collector
at one of his agencies who was collecting on his own and
pocketing the cash? Or had the paper simply been stolen
from his offices?
The notion that a portfolio of debt could be stolen may
seem improbable, but plenty of debt brokers are all too
willing to sell “bad paper.” Such brokers sometimes “dou-
ble sell” or “triple sell” the same file to multiple unsuspect-
ing buyers. Other times, a broker may sell paper that he
does not own and obtained by nefarious means. I spoke
at length with one debt broker from Buffalo, who told me
that he had hired a hacker from China to break into a for-
mer client’s email account and obtain his password. Once
he had the client’s password, the broker had access to his
paper. He then simply took a portfolio and, subsequently,
sold it to another buyer — who didn’t know and didn’t ask
where it came from.
Is this an ”intellectual property” problem? Does it have anything in
common with the problems discussed in Desny and Apfel?
2
Trade Secret
Trade secret law protects against the theft of valuable business secrets. The leading trade secret treatises are
Doctrinally, trade secret law has deep common-law roots as a branch Roger M. Milgrim & Eric Bensen, Mil-
grim on Trade Secrets (Matthew Bender,
of “unfair competition” law. Over time it has become more statutory
on Lexis), Louis Altman & Malla Pol-
and more federal. The Uniform Trade Secrets Act has been adopted lack, Callmann on Unfair Competition,
in some form by 47 states. The federal Economic Espionage Act crimi- Trademarks, and Monopolies (Thomson
nalized an important subset of trade secret misappropriation, and the West, on Westlaw), and Melvin F. Jager,
2016 Defend Trade Secrets Act added a federal civil cause of action Trade Secrets Law (Thomson West, on
Westlaw). The older Restatement (First)
and an important seizure remedy.
of Torts and the newer Restatement
Why protect trade secrets? At least four stories rub elbows in the (Third) of Unfair Competition are regu-
cases and commentary. larly cited.
• Contracting: protecting trade secrets helps resolve Arrow’s In-
formation Paradox by making it possible to contract securely
for disclosing them.
• Innovation: keeping secrets safe gives companies incentives to
invest in creating valuable information in the first place.
• Arms Race: unless trade secrets received legal protection, com-
panies would inefficiently overinvest in self-help to protect
them, and other companies would inefficiently overinvest in
stealing them.
• Competition: trade secret law deters unethical business prac-
tices and encourages companies to compete with each other
fairly.
A Subject Matter
Restatement (Third) of Unfair Competition
A trade secret is any information that can be used in the operation of § 39
a business or other enterprise and that is sufficiently valuable and se- Definition of Trade Secret
cret to afford an actual or potential economic advantage over others.
44 CHAPTER 2. TRADE SECRET
cmt. e Subject ma er. – A trade secret can consist of a formula, pa ern,
compilation of data, computer program, device, method, tech-
nique, process, or other form or embodiment of economically
valuable information. A trade secret can relate to technical mat-
ters such as the composition or design of a product, a method of
manufacture, or the know-how necessary to perform a particu-
lar operation or service. A trade secret can also relate to other
aspects of business operations such as pricing and marketing
techniques or the identity and requirements of customers.
The prior Restatement of this topic limited the subject ma er
of trade secret law to information capable of ”continuous use in
the operation of a business,” thus excluding information relat-
ing to single events such as secret bids and impending business
announcements or information whose secrecy is quickly de-
stroyed by commercial exploitation. Both the case law and the
prior Restatement, however, offered protection against the ”im-
proper” acquisition of such short-term information under rules
virtually identical to those applicable to trade secrets. The def-
inition of ”trade secret” adopted in the Uniform Trade Secrets
Act does not include any requirement relating to the duration
of the information’s economic value. The definition adopted in
this Section similarly contains no requirement that the informa-
tion afford a continuous or long-term advantage.
Not every secret is a trade secret. When one fifth-grader asks another
to cross her heart and hope to die before revealing a bit of gossip
about a mutual friend, this is not the kind of secret the courts will
take an interest in. The economic value requirement performs this
screening function.
In theory, economic value could be a threshold test: the courts
could ask whether particular information is valuable enough for
trade secret law to protect. But in practice, the threshold of value
is so low it rarely ma ers. “It is sufficient if the secret provides an ad-
Restatement (Third) of Unfair Competi- vantage that is more than trivial.” Instead, economic value expresses
tion § 39 cmt. e a general exclusion from trade secret subject ma er. Personal – rather
than professional – secrets are the wrong sort of thing for trade secret
law.
Religious Technology Center v. Netcom On-Line Communications
Services, Inc.
923 F. Supp. 1231 (N.D. Cal. 1995)
Plaintiffs, two Scientology-affiliated organizations claiming copy-
right and trade secret protection for the writings of the Church’s
A. SUBJECT MATTER 45
founder, L. Ron Hubbard, brought this suit against defendant Den-
nis Erlich, a former Scientology minister turned vocal critic of the
Church, who allegedly put plaintiffs’ protected works onto the In-
ternet.
I. B
Defendant Dennis Erlich was a member of the Church of Scientol-
ogy from approximately 1968 until 1982. During his years with the
Church, Erlich received training to enable him to provide ministerial
counseling services, known as “auditing.” While with the Church, Er-
lich had access to various Scientology writings, including those of the
Church’s founder, L. Ron Hubbard, which the Church alleges include
published literary works as well as unpublished confidential materi-
als (the “Advanced Technology works”). According to plaintiffs, Er-
lich had agreed to maintain the confidentiality of the Advanced Tech-
nology works.
Since leaving the Church, Erlich has been a vocal critic of Scien-
tology and he now considers it part of his calling to foster critical de-
bate about Scientology through humorous and critical writings. Er-
lich has expressed his views about the Church by contributing to the
Internet “Usenet news-group” called “alt.religion.scientology” (“the
newsgroup’’), which is an on-line forum for the discussion of issues
related to Scientology.
Plaintiff Religious Technology Center (“RTC’’), a nonprofit reli-
gious corporation, “was formed by Scientologists, with the approval
of Hubbard, to act as the protector of the religion of Scientology and
to own, protect, and control the utilization of the Advanced Technol-
ogy in the United States.”
RTC allege[s] that Erlich misappropriated its trade secrets in the
works, the confidentiality of which it alleges has been the subject of
elaborate security measures. RTC further claims that those works are
extremely valuable to the Church. Erlich admits to having posted ex-
cerpts from some of the works, but argues that the quotations were
used to provide context for debate and as a basis for his criticism. Er-
lich further argues that he has neither claimed authorship of any of
the works nor personally profited from his critique, satire, and com-
mentary. Erlich contends that all of the documents he posted had
been previously posted anonymously over the Internet, except for
one, which he claims he received anonymously through the mail.
C. Likelihood of Success on Trade Secret Claim
In the third cause of action, plaintiff RTC alleges that Erlich misap-
propriated its trade secrets. California has adopted a version of the Cal. Civ. Code § 3426.1 et seq.
Uniform Trade Secret Act.
46 CHAPTER 2. TRADE SECRET
To establish its trade secret claim, RTC must show, inter alia,
that the Advanced Technology works (1) have independent economic
value to competitors and (2) have been kept confidential.
1. Nature of Works
As a preliminary ma er, Erlich argues that the Advanced Technol-
ogy works cannot be trade secrets because of their nature as religious
Wollersheim: 796 F.2d 1076 (9th Cir. scriptures. In Religious Technology Center v. Wollersheim, the Ninth Cir-
1986) cuit rejected the Church’s application for a preliminary injunction on
the basis of a trade secret claim against a splinter Scientology group
that had acquired stolen copies of the Advanced Technology. The
Church argued not that the works gave them a competitive market
advantage but that disclosure of the works would cause its adher-
ents “religious harm from premature unsupervised exposure to the
materials.” Although the Ninth Circuit rejected plaintiffs’ trade se-
cret argument based on the spiritual value of the harm, it later noted
that it had left open the question of whether the Advanced Technol-
ogy works could qualify as trade secrets, assuming plaintiffs could
prove that the secrets confer on them an actual economic advantage
over competitors. Nonetheless, the court noted that such an allega-
tion would “raise grave doubts about the Church’s claim as a religion
and a not-for-profit corporation.”
The Church contends that the Advanced Technology works con-
sist of “processes and the theory behind those processes that are to
be used precisely as set forth by L. Ron Hubbard to assist the parish-
ioner in achieving a greater spiritual awareness and freedom.” Erlich
responds that the works are essentially religious texts. Erlich argues
that the Church cannot have trade secrets because trade secret law
is necessarily related to commerce. The Church contends that, like
other organizations, it must pay bills, and that licensing fees from
these documents allow it to continue operating.
The Church’s status as a religion does not itself preclude it from
holding a trade secret. R § 39 cmt. d (“[N]onprofit entities
such as ... religious organizations can also claim trade secret protec-
tion for economically valuable information such as lists of prospec-
tive members or donors.’’); UTSA § 3426.1(c) (defining “person” to
include a “corporation ... or any other legal or commercial entity”).
Vien: 827 F. Supp. 629 (S.D. Cal. 1993) With the exception of Bridge Publications, Inc. v. Vien [(another Sci-
entology case)], there is li le authority to support a finding that re-
ligious materials can constitute trade secrets. However, there is “no
category of information [that] is excluded from protection as a trade
Clark: 453 F.2d 1006 (9th Cir.1972) secret because of its inherent qualities.” Clark v. Bunker (upholding as
a trade secret a “detailed plan for the creation, promotion, financing,
and sale of contracts for ‘prepaid’ or ‘pre-need’ funeral services”).
Nor is there any authority to support Erlich’s argument that the
A. SUBJECT MATTER 47
Church’s religious texts cannot be trade secrets because, unlike most
trade secrets, these secrets are not used in the production or sales
of a commodity but are the commodities themselves. The Church’s Ad-
vanced Technology “course” materials, which are an integral part of
the Church’s spiritual counseling techniques, do not appear funda-
mentally different from the course manuals upheld as trade secrets
in SmokEnders, Inc. v. Smoke No More, Inc.: SmokEnders: 184 U.S.P.Q. 309 (S.D. Fla.
1974)
The SmokEnders (“SE’’) program requires a endees to
follow a rigid structured regimen comprised of specific
assignments and detailed concepts as recited in the man-
ual.
The SE program is a step-by-step regimented program
which requires that each person a ending a SE program
perform each act of the program at a particular time. Each
act required by a SE seminar a endee must be performed
by a endees at the same time in the program, with each a
minimum departure from the program.
The SE trade secret resides in the composite program
as it is arranged for step-by-step delivery to the a endees.
SmokEnders is arguably distinguishable because only the “modera-
tors” and not the a endees were given access to the course materi-
als in that case. However, the adherents of the Church, unlike the
a endees and like the moderators in SmokEnders, are under a duty
of confidentiality as to the materials. This case is analogous to Smok-
Enders because in both cases the “commodity” that is produced from
the trade secrets is the result achieved by the person using the course
materials and their techniques (whether it be stopping smoking or
reaching a “higher spiritual existence”).
Thus, there is at least some precedent for granting trade secret sta-
tus to works that are techniques for improving oneself (though not
specifically spiritually). Conversely, there is no authority for exclud-
ing religious materials from trade secret protection because of their
nature. Indeed, there is no authority for excluding any type of in-
formation because of its nature. While the trade secret laws did not
necessarily develop to allow a religion to protect a monopoly in its re-
ligious practices, the laws have nonetheless expanded such that the
Church’s techniques, which clearly are “used in the operation of the
enterprise,” are deserving of protection if secret and valuable. Restatement (Third) of Unfair Competi-
Although trade secret status may apply to works that are tech- tion § 39
niques for spiritually improving oneself, the secret aspect of those
techniques must be defined with particularity. See R (re- § 39 cmt. d
quiring plaintiff to define the information claimed as a trade secret
with sufficient definiteness). It appears that plaintiffs are claiming
that the entire works themselves, which they describe as “processes
48 CHAPTER 2. TRADE SECRET
and the theory behind those processes,” constitute the trade secrets.
This definition is problematic because it is impossible to determine
when the “secret” has been lost after portions of the works have been
disclosed. Although plaintiffs’ definition has at least some support
in SmokEnders, where the court upheld as a trade secret a “composite
stop-smoking program” found in an instructional manual, this court
is not satisfied that plaintiffs have identified their trade secrets with
sufficient definiteness to support injunctive relief.
2. Independent Economic Value
A trade secret requires proof of independent economic value, actual
or potential, from not being generally known to the public or to other
persons who can obtain economic value from its disclosure or use. A
trade secret must have sufficient value in the owner’s operation of its
enterprise such that it provides an actual or potential advantage over
others who do not possess the information.
RTC’s president, Warren McShane, a ests that
The Advanced Technology is a source of substantial rev-
enue for RTC in the form of licensing fees paid by
Churches that are licensed to use the Advanced Tech-
nology. These Churches themselves receive a significant
amount of their income from donations by parishioners
for services based upon the Advanced Technology. These
Churches pay RTC a percentage of the donations paid by
parishioners for the services based upon the Advanced
Technology. These donations and fees provide the major-
ity of operating expenses of these various Church organi-
zations.
The Church’s need for revenues to support its services is no less be-
cause of its status as a religion. RTC points out that it receives six per-
cent of what the individual churches receive in licensing fees. This
evidence is sufficient to establish the value of the Advanced Technol-
ogy works to the Church.
Erlich also argues that, to constitute a trade secret, information
must give its owner a competitive advantage, which implies that the
Church must have competitors. Although Erlich is clearly not a “com-
petitor” of the Church, there is no requirement that a trade secret have
any value to the defendant; the value can be to others who do not pos-
sess it. This evidence can be shown by direct evidence of the impact
of the information on the business or by circumstantial evidence of
the resources invested in producing the information, the precautions
taken to protect its secrecy, and the willingness of others to pay for
its access. The several past instances of breakaway Scientology-like
groups exploiting RTC’s Advanced Technology works for their profit
A. SUBJECT MATTER 49
constitute reasonable circumstantial evidence that these works give
the Church a competitive advantage. In fact, McShane’s declaration
constitutes direct evidence that the works have a significant impact
on the donations received by the Church, providing a majority of its
operating expenses. The status of the Advanced Technology works
as trade secrets should not depend on Erlich’s use of them. Accord-
ingly, this court finds support for the court’s conclusion in Vien that
the Church has shown independent economic value.
3. Secrecy
Information is protectable as a trade secret where the owner has
taken efforts that are reasonable under the circumstances to main-
tain its secrecy. “Reasonable efforts” can include advising employ-
ees of the existence of a trade secret, limiting access to the informa-
tion on a “need to know basis,” The court finds that RTC has put
forward sufficient evidence that it took steps that were reasonable
under the circumstances to protect its purported trade secrets. RTC’s
president describes elaborate means taken to ensure the confidential-
ity of the Advanced Technology works, including use of locked cab-
inets, safes, logging and identification of the materials, availability
of the materials at only a handful of sites worldwide, electronic sen-
sors a ached to documents, locked briefcases for transporting works,
alarms, photo identifications, security personnel, and confidentiality
agreements for all of those given access to the materials. McShane
testifies that all copies of the Advanced Technology works that are
outside of the Church were gained through improper means, such
as by theft. Thirty-five other declarants confirm that the measures
mentioned by McShane have been used, though not in exactly the
same manner, in other Churches and at other times. There is further
evidence that Erlich himself signed confidentiality agreements with
respect to the Advanced Technology materials and, specifically, the
upper-level “NOTS” course materials. The court is unpersuaded by
Erlich’s claims that the Church’s measures have not covered all loca-
tions where the Advanced Technology works are found and do not
cover crucial time periods. Efforts at maintaining secrecy need not
be extreme, just reasonable under the circumstances. The Church has
made more than an adequate showing on this issue.25
25
The notion that the Church’s trade secrets are disclosed to thousands of parish-
ioners makes this a rather unusual trade secrets case. However, because parish-
ioners are required to maintain the secrecy of the materials, the court sees no rea-
son why the mere fact that many people have seen the information should negate
the information’s trade secret status. While it is logically more likely that a secret
will leak out when more people are entrusted with it, absent evidence of leakage
the court finds that giving out the secrets to a large number of people, though no
more than necessary, is not itself an unreasonable security step.
50 CHAPTER 2. TRADE SECRET
Erlich raises a number of objections to the Church’s claims of con-
fidentiality. Erlich argues that the Church’s trade secrets have been
made available to the public through various means. The unpro-
tected disclosure of a trade secret will cause the information to for-
feit its trade secret status, since “information that is generally known
or readily ascertainable through proper means by others is not pro-
Restatement § 39 cmt. f. tectable as a trade secret.” Once trade secrets have been exposed to
the public, they cannot later be recalled.
Erlich argues that many of the Advanced Technology documents
Fishman: No. 91-6426 (C.D. Cal. 1994) have been available in open court records in another case, Church
of Scientology Int’l v. Fishman, destroying the necessary element of
secrecy. However, the Fishman court recently issued an order seal-
ing the file pending a decision on whether the documents are trade
secrets. Even if those records were temporarily open to the public,
the court will not assume that their contents have been generally dis-
closed, especially when this question is still pending before the dis-
trict court in Fishman. Such a disclosure, without evidence that the se-
crets have become generally known, does not necessarily cause RTC
to forfeit its trade secrets. The contrary result would mean that if doc-
uments were ever filed without a sealing order, even for a short time,
the court would not be able to decide that they should be sealed be-
cause the documents would have lost their potential trade secret sta-
tus by virtue of the temporary unsealing. The only fair result would
be to allow trade secret status for works that are otherwise protectable
as trade secrets unless they were somehow made generally available
to the public during the period they were unsealed, such as by publi-
cation.
Erlich further asserts that the Advanced Technology has been
largely disclosed in the popular press. These articles may reveal in-
formation referring to or hinting at the trade secrets, but may not dis-
close the secrets themselves, see However, as previously noted, the
court is not certain how to properly define the “secrets.” To the ex-
tent that someone uses or discloses any information taken from any of
these articles, there is clearly no trade secret claim. However, much of
Erlich’s postings copied all or almost all of sections of the Advanced
Technology works, which is far more than has ever been disclosed
in the popular press. In fact, several of the works posted by Erlich
are not mentioned in any of the clippings in the Berger declaration.
Arguably, the Church’s alleged secrets are such that their value de-
pends on the availability of the complete courses and not mere frag-
ments, thus disclosures that describe parts of the works or disclose
isolated portions do not necessarily suffice to ruin the value of the en-
tire works as secrets. However, without a clearer definition of what
constitute the “secrets,” the court is unable to determine whether
some have been made generally known to the public.
A. SUBJECT MATTER 51
Finally, Erlich newly emphasizes in his Reply that the works he
posted were not secrets because he received them through proper
means: eight of the documents were allegedly previously posted
anonymously to a public portion of the Internet and one of the doc-
uments allegedly came to Erlich anonymously through the U.S. mail.
Erlich claims that because the alleged trade secrets were received
from “public sources,” they should lose their trade secret protection.
Although the Internet is a new technology, it requires no great leap
to conclude that because more than 25 million people could have ac-
cessed the newsgroup postings from which Erlich alleges he received
the works, these works would lose their status as secrets. While the
Internet has not reached the status where a temporary posting on a
newsgroup is akin to publication in a major newspaper or on a tele-
vision network, those with an interest in using the Church’s trade se-
crets to compete with the Church are likely to look to the newsgroup.
Thus, posting works to the Internet makes them “generally known”
to the relevant people – the potential “competitors” of the Church.
The court is troubled by the notion that any Internet user, includ-
ing those using “anonymous remailers” to protect their identity, can
destroy valuable intellectual property rights by posting them over the
Internet, especially given the fact that there is li le opportunity to
screen postings before they are made. Nonetheless, one of the Inter-
net’s virtues, that it gives even the poorest individuals the power to
publish to millions of readers, can also be a detriment to the value of
intellectual property rights. The anonymous (or judgment proof) de-
fendant can permanently destroy valuable trade secrets, leaving no
one to hold liable for the misappropriation. Although a work posted
to an Internet newsgroup remains accessible to the public for only a
limited amount of time, once that trade secret has been released into
the public domain there is no retrieving it. While the court is per-
suaded by the Church’s evidence that those who made the original
postings likely gained the information through improper means, as
no one outside the Church or without a duty of confidence would
have had access to those works, this does not negate the finding that,
once posted, the works lost their secrecy. Although Erlich cannot
rely on his own improper postings to support the argument that the
Church’s documents are no longer secrets, evidence that another in-
dividual has put the alleged trade secrets into the public domain pre-
vents RTC from further enforcing its trade secret rights in those mate-
rials. Because there is no evidence that Erlich is a privy of any of the
alleged original misappropriators, he is not equitably estopped from
raising their previous public disclosures as a defense to his disclo-
sure. The court is thus convinced that those postings made by Erlich
were of materials that were possibly already generally available to
the public. Therefore, RTC has not shown a likelihood of success on
52 CHAPTER 2. TRADE SECRET
an essential element of its trade secret claim.
B Ownership
Uniform Trade Secrets Act
§1
(4) “Trade secret” means information, including a formula, pa ern,
Definitions compilation, program, device, method, technique, or process,
that:
(i) derives independent economic value, actual or potential,
from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the cir-
cumstances to maintain its secrecy.
It is clear, uncontroversial, and unsurprising that the essential re-
quirement for owning a trade secret is actual secrecy: the information
must not be widely known. The concept is not complicated, but it is
subtle. “Secrecy” is something of a term of art; whether something is
considered secret as a factual ma er depends heavily on what kinds
Most of this chapter is devoted to help- of observation and disclosure trade secret law will protect against.
ing you understand this sentence. But because this book is, well, this book, we will also direct our at-
tention to two other important facts about the way the actual-secrecy
element operates. It resolves priority questions by allowing multiple
independent parties each to have a trade secret in the same informa-
tion. And it resolves questions of allocating ownership within collab-
orations by looking to contract, agency, and employment law.
1 Actual Secrecy
United States v. Lange
312 F.3d 263 (7th Cir. 2002)
Ma hew Lange has been convicted of violating 18 U.S.C. § 1832, part
of the Economic Espionage Act of 1996. This statute makes it a felony
to sell, disseminate, or otherwise deal in trade secrets, or a empt to
do so, without the owner’s consent. Lange stole computer data from
Replacement Aircraft Parts Co. (RAPCO), his former employer, and
a empted to sell the data to one of RAPCO’s competitors. He allows
that his acts violated § 1832, if the data contained “trade secrets,” but
denies that the data met the statutory definition [that the] ”informa-
tion derives independent economic value, actual or potential, from
B. OWNERSHIP 53
not being generally known to, and not being readily ascertainable
through proper means by, the public.” 18 U.S.C. § 1839
RAPCO is in the business of making aircraft parts for the after-
market. It buys original equipment parts, then disassembles them to
identify (and measure) each component. This initial step of reverse
engineering, usually performed by a drafter such as Lange, produces
a set of measurements and drawings. Because this case involves an
effort to sell the intellectual property used to make a brake assembly,
we use brakes as an illustration.
Knowing exactly what a brake assembly looks like does not enable
RAPCO to make a copy. It must figure out how to make a substitute
with the same (or be er) technical specifications. Aftermarket manu-
facturers must experiment with different alloys and compositions un-
til they achieve a process and product that fulfils requirements set by
the Federal Aviation Administration for each brake assembly. Com-
pleted assemblies must be exhaustively tested to demonstrate, to the
FAA’s satisfaction, that all requirements have been met; only then
does the FAA certify the part for sale. For brakes this entails 100 de-
structive tests on prototypes, bringing a spinning 60-ton wheel to a
halt at a specified deceleration measured by a dynamometer. Fur-
ther testing of finished assemblies is required. It takes RAPCO a
year or two to design, and obtain approval for, a complex part; the
dynamometer testing alone can cost $75,000. But the process of ex-
perimenting and testing can be avoided if the manufacturer demon-
strates that its parts are identical (in composition and manufacturing
processes) to parts that have already been certified. What Lange, a
disgruntled former employee, offered for sale was all the informa-
tion required to obtain certification of several components as identi-
cal to parts for which RAPCO held certification. Lange included with
the package – which he offered via the Internet to anyone willing to
pay his price of $100,000 – a pirated copy of AutoCAD, the computer-
assisted drawing software that RAPCO uses to maintain its drawings
and specifications data. One person to whom Lange tried to peddle
the data informed RAPCO, which turned to the FBI. Lange was ar-
rested following taped negotiations that supply all the evidence nec-
essary for conviction – if the data satisfy the statutory definition of
trade secrets.
According to Lange, all data obtained by reverse engineering
some other product are “readily ascertainable ... by the public” be-
cause everyone can do what RAPCO did: buy an original part, disas-
semble and measure it, and make a copy. The prosecutor responds
to this contention by observing that “the public” is unable to reverse
engineer an aircraft brake assembly.
The prosecutor’s assumption is that the statutory reference in
§ 1839(3) to “the public” means the general public – the man in the
54 CHAPTER 2. TRADE SECRET
street. Ordinary people don’t have AutoCAD and 60-ton flywheels
ready to hand. But is the general public the right benchmark?
A problem with using the general public as the reference group
for identifying a trade secret is that many things unknown to the pub-
lic at large are well known to engineers, scientists, and others whose
intellectual property the Economic Espionage Act was enacted to pro-
tect. This makes the general public a poor benchmark for separating
commercially valuable secrets from obscure (but generally known)
information. Suppose that Lange had offered to sell Avogadro’s num-
ber for $1. Avogadro’s number, 6.02×1023 , is the number of molecules
per mole of gas. It is an important constant, known to chemists since
1909 but not to the general public (or even to all recent graduates of a
chemistry class). We can’t believe that Avogadro’s number could be
called a trade secret. Other principles are known without being com-
prehended. Most people know that E = mc2 , but a pop quiz of the
general public would reveal that they do not understand what this
means or how it can be used productively.
One might respond that the context of the word “public” ad-
dresses this concern. The full text of § 1839(3)(B) is: “the informa-
tion derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable
through proper means by, the public”. Avogadro’s number and other
obscure knowledge is not “generally known to” the man in the street
but might be deemed “readily ascertainable to” this hypothetical per-
son. It appears in any number of scientific handbooks. Similarly one
can visit a library and read Einstein’s own discussion of his famous
equation. Members of the general public can ascertain even abstruse
information, such as Schrodinger’s quantum field equation, by con-
sulting people in the know – as high school dropouts can take advan-
tage of obscure legal rules by hiring lawyers.
Section 1839(3)(B) as a whole refers to the source of economic
value – that the information is not known to or easily discoverable
by persons who could use it productively. And for purposes of this
case those people would be engineers and manufacturers of aircraft
parts, who have ample means to reverse engineer their competitors’
products. It is by keeping secrets from its rivals that RAPCO captures
the returns of its design and testing work. Thus it is unnecessary here
to decide whether “general” belongs in front of “public” – for even if
it does, the economically valuable information is not “readily ascer-
tainable” to the general public, the educated public, the economically
relevant public, or any sensible proxy for these groups.
Lange wants us to proceed as if all he tried to sell were measure-
ments that anyone could have taken with calipers after disassembling
an original-equipment part. Such measurements could not be called
trade secrets if, as Lange asserts, the assemblies in question were easy
B. OWNERSHIP 55
to take apart and measure. But no one would have paid $100,000
for metes and bounds, while Lange told his customers that the data
on offer were worth more than that asking price. Which they were.
What Lange had, and tried to sell, were the completed specifications
and engineering diagrams that reflected all the work completed af-
ter the measurements had been taken: the metallurgical data, details
of the sintering, the results of the tests, the plans needed to produce
the finished goods, everything required to get FAA certification of a
part supposedly identical to one that had been approved. Those de-
tails “derived independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable
through proper means by, the public.” Every firm other than the
original equipment manufacturer and RAPCO had to pay dearly to
devise, test, and win approval of similar parts; the details unknown to
the rivals, and not discoverable with tape measures, had considerable
“independent economic value … from not being generally known”. A
sensible trier of fact could determine that Lange tried to sell trade se-
crets. It was his customer’s cooperation with the FBI, and not public
access to the data, that prevented closing of the sale.
Learning Curve Toys, Inc. v. PlayWood Toys, Inc.
342 F. 3d 714 (7th Cir. 2003)
PlayWood Toys, Inc. (“PlayWood”) obtained a jury verdict against
Learning Curve Toys, Inc. and its representatives, Roy Wilson, Harry
Abraham and John Lee (collectively, “Learning Curve”), for misap-
propriation of a trade secret in a realistic looking and sounding toy
railroad track under the Illinois Trade Secrets Act 765 ILCS 1065/1 et seq.
I. B
In 1992, Robert Clausi and his brother-in-law, Sco Moore, began cre-
ating prototypes of wooden toys under the name PlayWood Toys,
Inc., a Canadian corporation. Clausi was the sole toy designer and
Moore was the sole officer and director of PlayWood. Neither Clausi
nor Moore had prior experience in the toy industry, but Clausi had
“always been a bit of a doodler and designer,” and the two men de-
sired to “create high-quality hardwood maple toys for the indepen-
dent toy market.” As a newly formed corporation, PlayWood did not
own a facility in which it could produce toys. Instead, it worked in
conjunction with Mario Borsato, who owned a wood-working facil-
ity. Subject to a wri en confidentiality agreement with PlayWood,
Borsato manufactured prototypes for PlayWood based on Clausi’s
design specifications.
PlayWood’s first a empt to market publicly its toys was at the
Toronto Toy Fair on January 31, 1992. PlayWood received favorable
reviews from many of the toy retailers in a endance; PlayWood also
learned that the best way to get recognition for its toys was to a end
56 CHAPTER 2. TRADE SECRET
the New York Toy Fair (“Toy Fair”) the following month. Based on
this information, Clausi and Moore secured a position at the Toy Fair
in order to display PlayWood’s prototypes. It was during this Toy
Fair that Clausi and Moore first encountered Learning Curve repre-
sentatives Roy Wilson, Harry Abraham and John Lee.
On the morning of February 12, 1993, the first day of the Toy
Fair, Roy Wilson stopped at PlayWood’s booth and engaged Clausi
and Moore in conversation. Wilson identified himself as Learning
Curve’s toy designer and explained that his company had a license
from the Bri Allcroft Company to develop Thomas the Tank Engine
& Friends™ (hereinafter “Thomas”) trains and accessories. Wilson
commented that he was impressed with the look and quality of Play-
Wood’s prototypes and raised the possibility of working together un-
der a custom manufacturing contract to produce Learning Curve’s
line of Thomas products. Clausi and Moore responded that such
an arrangement would be of great interest to PlayWood. Later that
same day, Harry Abraham, Learning Curve’s vice president, and
John Lee, Learning Curve’s president, also stopped by PlayWood’s
booth. They too commented on the quality of PlayWood’s prototypes
and indicated that PlayWood might be a good candidate for a manu-
facturing contract with Learning Curve.
Clausi and Moore continued to have discussions with Learning
Curve’s representatives over the remaining days of the Toy Fair,
which ended on February 14. During these discussions, Lee indicated
that he would like two of his people, Abraham and Wilson, to visit
PlayWood in Toronto the day after the Toy Fair ended in order to
determine whether the two parties could work out a manufacturing
arrangement for some or all of Learning Curve’s wooden toys.
On February 18, 1993, Abraham and Wilson visited PlayWood
in Toronto as planned. The meeting began with a tour of Borsato’s
woodworking facility, where the prototypes on display at the Toy
Fair had been made. After the tour, the parties went to the confer-
ence room at Borsato’s facility. At this point, according to Clausi and
Moore, the parties agreed to make their ensuing discussion confiden-
tial. Clausi testified:
After we sat down in the board room, Harry [Abraham of
Learning Curve] immediately said: “Look, we’re going to
disclose confidential information to you guys, and we’re
going to disclose some designs that Roy [Wilson of Learn-
ing Curve] has that are pre y confidential. If Brio were to
get their hands on them, then we wouldn’t like that. And
we’re going to do it under the basis of a confidential un-
derstanding.”
And I said: “I also have some things, some ideas on
B. OWNERSHIP 57
how to produce the track and produce the trains now that
I’ve had a chance to look at them for the last couple of
days, and I think they’re confidential as well. So if we’re
both okay with that, we should continue.” So we did.
Moore testified to the existence of a similar conversation:
It was at this point that Harry Abraham told us that
they were going to disclose some confidential documents,
drawings, pricing, margins, and asked us if we would
keep that information confidential. ...
I believe it was Robert [Clausi] who said that, you
know, absolutely, we would keep it confidential. In fact,
we had some ideas that we felt would be confidential we
would be disclosing to them, and would they keep it, you
know, confidential? Would they reciprocate? And Harry
[Abraham] said: “Absolutely.” And then we proceeded
to go along with the meeting.
Immediately after the parties agreed to keep their discussion confi-
dential, Wilson, at Abraham’s direction, showed Clausi and Moore
drawings of various Thomas characters and provided information on
the projected volume of each of the products. Clausi testified that he
considered the documents disclosed by Learning Curve during the
meeting confidential because they included information on products
not yet released to the public, as well as Learning Curve’s projected
volumes, costs and profit margins for various products.
The parties’ discussion eventually moved away from train pro-
duction and focused on track design. Wilson showed Clausi and
Moore drawings of Learning Curve’s track and provided samples
of their current product. At this point, Abraham confided to Clausi
and Moore that track had posed “a bit of a problem for Learning
Curve.” Abraham explained that sales were terrific for Learning
Curve’s Thomas trains, but that sales were abysmal for its track.
Abraham a ributed the lack of sales to the fact that Learning Curve’s
track was virtually identical to that of its competitor, Brio, which had
the lion’s share of the track market. Because there was “no differenti-
ation” between the two brands of track, Learning Curve’s track was
not even displayed in many of the toy stores that carried Learning
Curve’s products. Learning Curve had worked unsuccessfully for
several months a empting to differentiate its track from that of Brio.
After detailing the problems with Learning Curve’s existing track,
Abraham inquired of Clausi whether “there was a way to differenti-
ate” its track from Brio’s track. Clausi immediately responded that he
“had had a chance to look at the track and get a feel for it [over] the last
few days” and that his “thoughts were that if the track were more real-
58 CHAPTER 2. TRADE SECRET
istic and more functional, that kids would enjoy playing with it more
and it would give the retailer a reason to carry the product, especially
if it looked different than the Brio track.” Clausi further explained
that, if the track “made noise and [] looked like real train tracks, that
the stores wouldn’t have any problem, and the Thomas the Tank line,
product line would have [] its own different track” and could “effec-
tively compete with Brio.” Abraham and Wilson indicated that they
were “intrigued” by Clausi’s idea and asked him what he meant by
“making noise.”
Clausi decided to show Abraham and Wilson exactly what he
meant. Clausi took a piece of Learning Curve’s existing track
from the table, drew some lines across the track (about every three-
quarters of an inch), and stated: “We can go ahead and machine
grooves right across the upper section, which would look like railway
tracks, and down below machine li le indentations as well so that it
would look more like or sound more like real track. You would roll
along and bumpity-bumpity as you go along.” Clausi then called Bor-
sato into the conference room and asked him to cut grooves into the
wood “about a quarter of an inch deep from the top surface.” Borsato
left the room, complied with Clausi’s request, and returned with the
cut track three or four minutes later. Clausi ran a train back and forth
over the cut piece of track. The track looked more realistic than before,
but it did not make noise because the grooves were not deep enough.
Accordingly, Clausi instructed Borsato to cut the grooves “just a li le
bit deeper so that they go through the rails.” Borsato complied with
Clausi’s request once again and returned a few minutes later with
the cut piece of track. Clausi proceeded to run a train back and forth
over the track. This time the track made a “clickety-clack” sound,
but the train did not run smoothly over the track because the grooves
were cut “a li le bit too deep.” Based on the sound produced by the
track, Clausi told Abraham and Moore that if PlayWood procured a
contract with Learning Curve to produce the track, they could call it
“Clickety-Clack Track.”
Both Abraham and Wilson indicated that Clausi’s concept of cut-
ting grooves into the track to produce a clacking sound was a novel
concept. Thereafter, Wilson and Clausi began to discuss how they
could improve the idea to make the train run more smoothly on the
track, but Abraham interrupted them and stated: “No, focus. You
guys have to get the contract for the basic product first, and then we
can talk about new products, because it takes [our licensor] a long
time to approve new products and new designs.”
The meeting ended shortly thereafter without further discussion
about Clausi’s concept for the noise-producing track. Before he left,
Wilson asked Clausi if he could take the piece of track that Bor-
sato had cut with him while the parties continued their discussions.
B. OWNERSHIP 59
Clausi gave Wilson the piece of track without hesitation. The piece
of track was the only item that Abraham and Wilson took from the
meeting. Clausi and Moore did not ask Wilson for a receipt for the
cut track, nor did they seek a wri en confidentiality agreement to
protect PlayWood’s alleged trade secret. After the meeting, Clausi
amended PlayWood’s confidentiality agreement with Borsato to en-
sure that materials discussed during the meeting would remain confi-
dential. Clausi also stamped many of the documents that he received
from Learning Curve during the meeting as confidential because they
included information on products not yet released to the public. Play-
Wood never disclosed the contents of Learning Curve’s documents to
anyone.
During March of 1993, PlayWood and Learning Curve met on
three separate occasions to discuss further the possibility of Play-
Wood manufacturing Learning Curve’s Thomas products. At one of
the meetings, and at Learning Curve’s request, PlayWood submi ed
a manufacturing proposal for the Thomas products. Learning Curve
rejected PlayWood’s proposal. Learning Curve told Clausi that its li-
censor wanted the Thomas products to be made in the United States.
Thereafter, PlayWood had no contact with Learning Curve un-
til late October of 1993, when Abraham contacted Clausi to discuss
another possible manufacturing contract because Learning Curve’s
secondary supplier was not providing enough product. Again, Play-
Wood submi ed a manufacturing proposal at Learning Curve’s re-
quest, but it too was rejected. Learning Curve later stated that its new
business partner had decided to manufacture the product in China.
Clausi and Moore continued to work on PlayWood’s toy concepts.
After the 1994 New York Toy Fair, which was not particularly suc-
cessful for PlayWood, Clausi and Moore began to focus their efforts
on refining PlayWood’s concept for the noise-producing track. Dur-
ing this time, Clausi and Moore made no a empt to license or sell the
concept to other toy companies because they believed that PlayWood
still had “an opportunity to get in the door” with Learning Curve if
they could perfect the concept and also because they believed that
they were bound by a confidentiality agreement.
In December of 1994, while shopping for additional track with
which to experiment, Moore discovered that Learning Curve was sell-
ing noise-producing track under the name “Clickety-Clack Track.”
Like the piece of track that Clausi had Borsato cut during PlayWood’s
February 18, 1993, meeting with Learning Curve, Clickety-Clack
Track™ has parallel grooves cut into the wood, which cause a “clack-
ing” sound as train wheels roll over the grooves. Learning Curve was
promoting the new track as
the first significant innovation in track design since the in-
60 CHAPTER 2. TRADE SECRET
ception of wooden train systems.... It is quite simply the
newest and most exciting development to come along re-
cently in the wooden train industry, and it’s sure to cause
a sensation in the marketplace.... [I]t brings that sound
and feel of the real thing to a child’s world of make-believe
without bells, whistles, electronic sound chips or moving
parts.
PlayWood promptly wrote a cease and desist le er to Learning Curve.
The le er accused Learning Curve of stealing PlayWood’s concept
for the noise-producing track that it disclosed to Learning Curve “in
confidence in the context of a manufacturing proposal.” Learning
Curve responded by seeking a declaratory judgment that it owned
the concept.
Previously, on March 16, 1994, Learning Curve had applied for
U.S. Pat. No. 5,454,513 a patent on the noise-producing track. The patent, which was ob-
tained on October 3, 1995, claims the addition of parallel impressions
or grooves in the rails, which cause a “clacking” sound to be emi ed
On the facts as found by the jury, as train wheels roll over them. The patent identifies Roy Wilson of
Wilson was not the inventor and the Learning Curve as the inventor.
patent should not have issued.
Clickety-Clack Track™provided an enormous boost to Learning
Curve’s sales. Learning Curve had $20 million in track sales by the
first quarter of 2000, and $40 million for combined track and accessory
sales.
II. D
The parties agree that their dispute is governed by the Illinois Trade
The relevant portions of the ITSA track Secrets Act (“Act”). To prevail on a claim for misappropriation of a
the UTSA. trade secret under the Act, the plaintiff must demonstrate that the
information at issue was a trade secret, that it was misappropriated
and that it was used in the defendant’s business. The issue currently
before us is whether there was legally sufficient evidence for the jury
to find that PlayWood had a trade secret in its concept for the noise-
producing toy railroad track that it revealed to Learning Curve on
February 18, 1993.
Although the Act explicitly defines a trade secret in terms of [ac-
tual secrecy and reasonable efforts], Illinois courts frequently refer
to six common law factors (which are derived from § 757 of the Re-
statement (First) of Torts) in determining whether a trade secret ex-
ists: (1) the extent to which the information is known outside of the
plaintiff’s business; (2) the extent to which the information is known
by employees and others involved in the plaintiff’s business; (3) the
extent of measures taken by the plaintiff to guard the secrecy of the
information; (4) the value of the information to the plaintiff’s busi-
ness and to its competitors; (5) the amount of time, effort and money
expended by the plaintiff in developing the information; and (6) the
B. OWNERSHIP 61
ease or difficulty with which the information could be properly ac-
quired or duplicated by others.
Contrary to Learning Curve’s contention, we do not construe the
foregoing factors as a six-part test, in which the absence of evidence
on any single factor necessarily precludes a finding of trade secret
protection. Instead, we interpret the common law factors as instruc-
tive guidelines for ascertaining whether a trade secret exists under
the Act.
1. Extent to which PlayWood’s concept for noise-producing toy railroad
track was known outside of PlayWood’s business
PlayWood presented substantial evidence from which the jury could
have determined that PlayWood’s concept for noise-producing toy
railroad track was not generally known outside of Playwood’s busi-
ness. It was undisputed at trial that no similar track was on the
market until Learning Curve launched Clickety-Clack Track™ in late
1994, more than a year after PlayWood first conceived of the concept.
Of course, as Learning Curve correctly points out, merely being the
first or only one to use particular information does not in and of itself
transform otherwise general knowledge into a trade secret. If it did,
the first person to use the information, no ma er how ordinary or
well known, would be able to appropriate it to his own use under the
guise of a trade secret. However, in this case, there was additional ev-
idence from which the jury could have determined that PlayWood’s
concept was not generally known within the industry.
First, there was substantial testimony that Learning Curve had at-
tempted to differentiate its track from that of its competitors for sev-
eral months, but that it had been unable to do so successfully.
Furthermore, PlayWood’s expert witness, Michael Kennedy, tes-
tified that PlayWood’s concept, as embodied in Clickety-Clack
Track™, was unique and permi ed “its seller to differentiate itself
from a host of competitors who [were] making a generic product.”
Kennedy explained that the look, sound and feel of the track made
it distinct from other toy railroad track: “[W]hen a child runs a train
across this track, he can feel it hi ing those li le impressions. And
when you’re talking about young children[,] having the idea that they
can see something that they couldn’t see before, feel something that
they couldn’t feel before, hear something that they couldn’t hear be-
fore, that is what differentiates this toy from its other competitors.”
Finally, PlayWood presented evidence that Learning Curve
sought and obtained a patent on the noise-producing track. It goes
without saying that the requirements for patent and trade secret pro-
tection are not synonymous. Unlike a patentable invention, a trade
secret need not be novel or unobvious. The idea need not be com-
plicated; it may be intrinsically simple and nevertheless qualify as a
62 CHAPTER 2. TRADE SECRET
secret, unless it is common knowledge and, therefore, within the pub-
lic domain. However, it is commonly understood that if an invention
has sufficient novelty to be entitled to patent protection, it may be
said a fortiori to be entitled to protection as a trade secret.
2. Extent to which PlayWood’s concept was known to employees and others
involved in PlayWood’s business
We agree with PlayWood that the evidence was sufficient to establish
that its concept for noise-producing track was known only by key
individuals in its business.
At the outset, we note briefly that PlayWood was a small business,
consisting only of Clausi and Moore. Illinois courts have recognized
on several occasions that the expectations for ensuring secrecy are
different for small companies than for large companies. Apart from
Clausi (PlayWood’s sole toy designer and the person who conceived
of the concept for noise-producing track) and Moore (PlayWood’s
sole officer and director), the only person who knew about the con-
cept was Borsato, the person who physically produced PlayWood’s
prototype at Clausi’s direction. The concept was disclosed to Borsato
in order for PlayWood to develop fully its trade secret. Moreover,
Borsato’s actions were governed by a wri en confidentiality agree-
ment with PlayWood. Indeed, as an extra precaution, Clausi even
amended PlayWood’s confidentiality agreement with Borsato imme-
diately after the February 18, 1993, meeting to ensure that materials
discussed during the meeting would remain confidential.
3. Measures taken by PlayWood to guard the secrecy of its concept
There also was sufficient evidence for the jury to determine that Play-
Wood took reasonable precautions to guard the secrecy of its concept.
The Act requires the trade secret owner to take actions that are “rea-
sonable under the circumstances to maintain [the] secrecy or confi-
dentiality” of its trade secret; it does not require perfection. Whether
the measures taken by a trade secret owner are sufficient to satisfy the
Act’s reasonableness standard ordinarily is a question of fact for the
jury. Indeed, we previously have recognized that only in an extreme
case can what is a “reasonable” precaution be determined, because
the answer depends on a balancing of costs and benefits that will vary
from case to case.
Here, the jury was instructed that it must find “by a preponder-
ance of the evidence that PlayWood’s trade secrets were given to
Learning Curve as a result of a confidential relationship between
the parties.” By returning a verdict in favor of PlayWood, the jury
necessarily found that Learning Curve was bound to PlayWood by
a pledge of confidentiality. The jury’s determination is amply sup-
ported by the evidence. Both Clausi and Moore testified that they
B. OWNERSHIP 63
entered into an oral confidentiality agreement with Abraham and
Wilson before beginning their discussion on February 18, 1993. In
particular, Clausi testified that he told Abraham and Wilson: “I also
have some things, some ideas on how to produce the track and pro-
duce the trains now that I’ve had a chance to look at them for the last
couple of days, and I think they’re confidential as well. So if we’re
both okay with that, we should continue.” In addition to this testi-
mony, the jury heard that Learning Curve had disclosed substantial
information to PlayWood during the February 18th meeting, includ-
ing projected volumes, costs and profit margins for various products,
as well as drawings for toys not yet released to the public. The jury
could have inferred that Learning Curve would not have disclosed
such information in the absence of a confidentiality agreement. Fi-
nally, the jury also heard (from several of Learning Curve’s former
business associates) that Learning Curve routinely entered into oral
confidentiality agreements like the one with PlayWood.
PlayWood might have done more to protect its secret. As Learn-
ing Curve points out, PlayWood gave its only prototype of the noise-
producing track to Wilson without first obtaining a receipt or writ-
ten confidentiality agreement from Learning Curve—a decision that
proved unwise in hindsight. Nevertheless, we believe that the jury
was entitled to conclude that PlayWood’s reliance on the oral confi-
dentiality agreement was reasonable under the circumstances of this
case. First, it is well established that the formation of a confidential re-
lationship imposes upon the disclosee the duty to maintain the infor-
mation received in the utmost secrecy and that the unprivileged use
or disclosure of another’s trade secret becomes the basis for an action
in tort. Second, both Clausi and Moore testified that they believed
PlayWood had a realistic chance to “get in the door” with Learning
Curve and to produce the concept as part of Learning Curve’s line of
Thomas products. Clausi and Moore did not anticipate that Learn-
ing Curve would violate the oral confidentiality agreement and uti-
lize PlayWood’s concept without permission; rather, they believed in
good faith that they “were going to do business one day again with
Learning Curve with respect to the design concept.” Finally, we be-
lieve that, as part of the reasonableness inquiry, the jury could have
considered the size and sophistication of the parties, as well as the
relevant industry. Both PlayWood and Learning Curve were small
toy companies, and PlayWood was the smaller and less experienced
of the two.
4. Value of the concept to PlayWood and to its competitors
There was substantial evidence from which the jury could have de-
termined that PlayWood’s concept had value both to PlayWood and
to its competitors. It was undisputed at trial that Learning Curve’s
64 CHAPTER 2. TRADE SECRET
sales skyrocketed after it began to sell Clickety-Clack Track™. In
addition, PlayWood’s expert witness, Michael Kennedy, testified
that PlayWood’s concept for noise-producing track had tremendous
value. Kennedy testified that the “cross-cuts and changes in the
[track’s] surface” imparted value to its seller by causing the track to
“look different, feel different and sound different than generic track.”
Kennedy further testified that, in his opinion, the track would have
commanded a premium royalty under a negotiated license agree-
ment because the “invention allows its seller to differentiate itself
from a host of competitors who are making a generic product with
whom it is competing in a way that is proprietary and exclusive, and
it gives [the seller] a significant edge over [its] competition.”
Despite this evidence, the district court concluded that Play-
Wood’s concept had no economic value. The court’s conclusion was
based, in part, on the fact that PlayWood’s prototype did not work
perfectly; as noted by the court, the first set of cuts were too shallow
to produce sound and the second set of cuts were too deep to per-
mit the train to roll smoothly across the track. In the district court’s
view, even if the concept of cu ing grooves into the wooden track
in order to produce noise originated with Clausi, the concept lacked
value until it was refined, developed and manufactured by Learning
Curve.
We cannot accept the district court’s conclusion because it is be-
lied by the evidence. At trial, Kennedy was asked whether, in his
opinion, the fact that PlayWood’s prototype did not work perfectly af-
fected the value of PlayWood’s concept, and he testified that it did not.
Kennedy testified that he would assign the same value to PlayWood’s
concept as it was conceived on February 18, 1993, as he would the
finished product that became known as Clickety-Clack Track™ be-
cause, at that time, he would have known “that most of the design
[had] already been done and that [he] just need[ed] to go a li le bit
further to make it really lovely.” Kennedy further testified that it was
standard practice in the industry for a license to be negotiated based
on a prototype (much like the one PlayWood disclosed to Learning
Curve) rather than a finished product and that the license generally
would cover the prototypical design, as well as any enhancements
or improvements of that design. Based on this testimony, we cannot
accept the district court’s conclusion that PlayWood’s concept pos-
sessed no economic value.
It is irrelevant under Illinois law that PlayWood did not actually
use the concept in its business. The proper criterion is not ‘actual use’
but whether the trade secret is “of value” to the company. Kennedy’s
testimony was more than sufficient to permit the jury to conclude that
the concept was “of value” to PlayWood. It is equally irrelevant that
PlayWood did not seek to patent its concept. So long as the concept
B. OWNERSHIP 65
remains a secret, i.e., outside of the public domain, there is no need for
patent protection. Professor Milgrim makes this point well: “Since Milgrim § 1.08[1]
every inventor has the right to keep his invention secret, one who has
made a patentable invention has the option to maintain it in secrecy,
relying upon protection accorded to a trade secret rather than upon
the rights which accrue by a patent grant.” It was up to PlayWood,
not the district court, to determine when and how the concept should
have been disclosed to the public.
5. Amount of time, effort and money expended by PlayWood in developing
its concept
PlayWood expended very li le time and money developing its con-
cept; by Clausi’s own account, the cost to PlayWood was less than
one dollar and the time spent was less than one-half hour. The dis-
trict court determined that “such an insignificant investment is insuf-
ficient as a ma er of Illinois law to establish the status of a ‘trade
secret.’” We believe that the district court gave too much weight to
the time, effort and expense of developing the track.
A significant expenditure of time and/or money in the production
of information may provide evidence of value. However, we do not
understand Illinois law to require such an expenditure in all cases.
As pointed out by the district court, several Illinois cases have
emphasized the importance of developmental costs. However, no-
tably, none of those cases concerned the sort of innovative and cre-
ative concept that we have in this case. Indeed, several of the cases in
Illinois that emphasize developmental costs concern compilations of
data, such as customer lists. In that context, it makes sense to require
the expenditure of significant time and money because there is noth-
ing original or creative about the alleged trade secret. Given enough
time and money, we presume that the plaintiff’s competitors could
compile a similar list.
Here, by contrast, we are dealing with a new toy design that has
been promoted as “the first significant innovation in track design
since the inception of wooden train systems.” Toy designers, like
many artistic individuals, have intuitive flashes of creativity. Often,
that intuitive flash is, in reality, the product of earlier thought and
practice in an artistic craft. We fail to see how the value of PlayWood’s
concept would differ in any respect had Clausi spent several months
and several thousand dollars creating the noise-producing track.
6. Ease or difficulty with which PlayWood’s concept could have been prop-
erly acquired or duplicated by others
Finally, we also believe that there was sufficient evidence for the jury
to determine that PlayWood’s concept could not have been easily ac-
quired or duplicated through proper means. PlayWood’s expert wit-
66 CHAPTER 2. TRADE SECRET
ness, Michael Kennedy, testified: “This is a fairly simple product if
you look at it. But the truth is that because it delivers feeling and
sound as well as appearance, it isn’t so simple as it first appears. It’s
a li le more elegant, actually, than you might think.” In addition to
Kennedy’s testimony, the jury heard that Learning Curve had spent
months a empting to differentiate its track from Brio’s before Clausi
disclosed PlayWood’s concept of noise-producing track. From this
evidence, the jury could have inferred that, if PlayWood’s concept
really was obvious, Learning Curve would have thought of it earlier.
Despite this evidence, the district court concluded that Play-
Wood’s concept was not a trade secret because it could have been
easily duplicated, stating that “[h]ad PlayWood succeeded in produc-
ing and marketing [the] notched track, the appearance of the track
product itself would have fully revealed the concept PlayWood now
claims as a secret.” Of course, the district court was correct in one
sense; PlayWood’s own expert recognized that, in the absence of
patent or copyright protection, the track could have been reverse en-
gineered just by looking at it. However, the district court failed to
appreciate the fact that PlayWood’s concept was not publicly avail-
Milgrim § 1.05[4] able. As Professor Milgrim states: “A potent distinction exists be-
tween a trade secret which will be disclosed if and when the product
in which it is embodied is placed on sale, and a ’trade secret’ embod-
ied in a product which has been placed on sale, which product admits
of discovery of the ’secret’ upon inspection, analysis, or reverse engi-
neering. Until disclosed by sale the trade secret should be entitled to
Callmann § 14.15 protection.” see also Callmann (“The fact that a secret is easy to dupli-
cate after it becomes known does not militate against its being a trade
secret prior to that time.”). Reverse engineering can defeat a trade se-
cret claim, but only if the product could have been properly acquired
by others, as is the case when the product is publicly sold. Here, Play-
Wood disclosed its concept to Learning Curve (and Learning Curve
alone) in the context of a confidential relationship; Learning Curve
had no legal authority to reverse engineer the prototype that it re-
ceived in confidence. Accordingly, we must conclude that the jury
was entitled to determine that PlayWood’s concept could not easily
have been acquired or duplicated through proper means.
Exploits Problem
Exploit brokers are in the business of helping people defeat computer
security. Governments want to thumb through the hard drives of ter-
rorists, criminals, and dissidents. Identity thieves want passwords
and bank account numbers. Extortionists want to delete data and
hold it for ransom. Corporate spies want access to competitors’ com-
puters. All of them are willing to pay handsomely for the technical
tools that enable them to do so. These tools are typically built around
B. OWNERSHIP 67
”exploits”: short pieces of software that take advantage of bugs in
commonly-used software like Windows, Adobe Flash, and iOS. As
soon as as software companies learn about these bugs, they race to
issue updates to fix them; once that happens, any exploits based on
those bugs stop working. Thus, secrecy is essential to the exploit busi-
ness in two ways: many of the uses are illegal, and exploits become
worthless soon after they become public knowledge.
Can exploit brokers – who buy exploits from the computer secu-
rity experts who discover them and then resell those exploits to vari-
ous clients – rely on trade secret law? Should they be able to? Do the
materials in this chapter and the previous one shed any light on how
you would expect the exploit business to work, and how it ought to
be regulated?
2 Priority
Because there is no requirement that a trade secret be unique – more
than one person can have the same information and each has a valid
and independent trade secret provided the other requirements are
met – trade secret does not generally raise difficult issues about which
of several competing claimants developed the information first.
3 Collaborations
Restatement (Third) of Unfair Competition
cmt. e. Allocation of ownership between employers and employees. – The § 42
law of agency has established rules governing the ownership of Breach of Confidence by Employees
valuable information created by employees during the course of
an employment relationship. See Restatement, Second, Agency
§ 397. In the absence of a contrary agreement, the law ordinar-
ily assigns ownership of an invention or idea to the person who
conceives it. However, valuable information that is the prod-
uct of an employee’s assigned duties is owned by the employer,
even when the information results from the application of the
employee’s personal knowledge or skill.
An employee is ordinarily entitled to claim ownership of
patents and trade secrets developed outside the scope of the
employee’s assigned duties, even if the invention or idea re-
lates to the employer’s business and was developed using the
employer’s time, personnel, facilities, or equipment. In the lat-
ter circumstances, however, the employer is entitled to a “shop
right”—an irrevocable, nonexclusive, royalty-free license to use
the innovation. Similarly, employees retain ownership of infor-
68 CHAPTER 2. TRADE SECRET
mation comprising their general skill, knowledge, training, and
experience.
Although the rules governing ownership of valuable infor-
mation created during an employment relationship are most
frequently applied to inventions, the rules are also applicable to
information such as customer lists, marketing ideas, and other
valuable business information. If an employee collects or devel-
ops such information as part of the assigned duties of the em-
ployment, the information is owned by the employer. Thus, if
the information qualifies for protection as a trade secret, unau-
thorized use or disclosure will subject the employee to liability.
cmt. g. Contractual protection. – Absent an applicable statutory prohi-
bition, agreements relating to the ownership of inventions and
discoveries made by employees during the term of the employ-
ment are generally enforceable according to their terms. Em-
ployment agreements sometimes include provisions granting
the employer ownership of all inventions and discoveries con-
ceived by the employee during the term of the employment. In
some situations, however, it may be difficult to prove when a
particular invention was conceived. The employee may have an
incentive to delay disclosure of the invention until after the em-
ployment is terminated in order to avoid the contractual or com-
mon law claims of the employer. It may also be difficult to es-
tablish whether a post-employment invention was improperly
derived from the trade secrets of the former employer. Some
employment agreements respond to this uncertainty through
provisions granting the former employer ownership of inven-
tions and discoveries relating to the subject ma er of the for-
mer employment that are developed by the employee even af-
ter the termination of the employment. Such agreements can
restrict the former employee’s ability to exploit the skills and
training desired by other employers and may thus restrain com-
petition and limit employee mobility. The courts have therefore
subjected such “holdover” agreements to scrutiny analogous to
that applied to covenants not to compete. Thus, the agreement
may be unenforceable if it extends beyond a reasonable period
of time or to inventions or discoveries resulting solely from the
general skill and experience of the former employee.
C Procedures
The Restatements treated reasonable The most important – and arguably the only – procedural prerequi-
efforts as part of the secrecy analysis. site to having a valid trade secret is making reasonable efforts to pre-
Under the UTSA, EEA, and DTSA, it is a serve its secrecy. There is no requirement that the owner of a trade
separate element.
C. PROCEDURES 69
secret register it as one with a government agency, or take other for-
mal steps to identify the secret in advance. Remember that everyone
agrees a trade secret must actually be secret to be protected; what
does a reasonable efforts requirement add? Why?
United States v. Lange
312 F.3d 263 (7th Cir. 2002)
One ingredient of a trade secret is that “the owner thereof has taken
reasonable measures to keep such information secret”. Lange con-
tends that the proof fell short, but a sensible trier of fact could have
concluded that RAPCO took “reasonable measures to keep the infor-
mation secret”. RAPCO stores all of its drawings and manufactur-
ing data in its CAD room, which is protected by a special lock, an
alarm system, and a motion detector. The number of copies of sensi-
tive information is kept to a minimum; surplus copies are shredded.
Some information in the plans is coded, and few people know the
keys to these codes. Drawings and other manufacturing information
contain warnings of RAPCO’s intellectual property rights; every em-
ployee receives a notice that the information with which he works is
confidential. None of RAPCO’s subcontractors receives full copies
of the schematics; by dividing the work among vendors, RAPCO en-
sures that none can replicate the product. This makes it irrelevant
that RAPCO does not require vendors to sign confidentiality agree-
ments; it relies on deeds (the spli ing of tasks) rather than promises
to maintain confidentiality. Although, as Lange says, engineers and
drafters knew where to get the key to the CAD room door, keeping
these employees out can’t be an ingredient of “reasonable measures
to keep the information secret”; then no one could do any work. So
too with plans sent to subcontractors, which is why dissemination to
suppliers does not undermine a claim of trade secret.
925 F.2d 174 (7th Cir. 1991)
Rockwell Graphic Systems, Inc. v. DEV Industries, Inc. Rockwell, which manufactures print-
ing presses, sued DEV, a competing
The requirement of reasonable efforts has both evidentiary and reme-
manufacturer, for making replacement
dial significance, and this regardless of which of the two different con- parts for Rockwell presses. A key com-
ceptions of trade secret protection prevails. (Both conceptions have ponent of Rockwell’s claims ws that
footholds in Illinois law, as we shall see.) The first and more common DEV had in its possession about 100
merely gives a remedy to a firm deprived of a competitively valu- “piece part drawings”: detailed manu-
facturing diagrams for parts to Rock-
able secret as the result of an independent legal wrong, which might
well presses. Rockwell alleged that the
be conversion or other trespass or the breach of an employment con- piece part drawings had been stolen
tract or of a confidentiality agreement. Under this approach, because by former Rockwell employees includ-
the secret must be taken by improper means for the taking to give ing Fleck and Peloso, both of whom
rise to liability, the only significance of trade secrecy is that it allows were subequently employed by DEV.
Along the way, DEV argued that Rock-
the victim of wrongful appropriation to obtain damages based on the well failed to make reasonable efforts
competitive value of the information taken. The second conception to keep the diagrams secret, which led
of trade secrecy is that “trade secret” picks out a class of socially valu- Judge Posner to discuss the purpose of
able information that the law should protect even against nontrespas- the reasonable efforts requirement.
70 CHAPTER 2. TRADE SECRET
sory or other lawful conduct.
It should be apparent that the two different conceptions of trade
secret protection are be er described as different emphases. The first
emphasizes the desirability of deterring efforts that have as their sole
purpose and effect the redistribution of wealth from one firm to an-
other. The second emphasizes the desirability of encouraging inven-
tive activity by protecting its fruits from efforts at appropriation that
are, indeed, sterile wealth-redistributive – not productive – activities.
The approaches differ, if at all, only in that the second does not limit
the class of improper means to those that fit a preexisting pigeonhole
in the law of tort or contract or fiduciary duty – and it is by no means
clear that the first approach assumes a closed class of wrongful acts,
either.
Under the first approach, at least if narrowly interpreted so that
it does not merge with the second, the plaintiff must prove that the
defendant obtained the plaintiff’s trade secret by a wrongful act, il-
lustrated here by the alleged acts of Fleck and Peloso in removing
piece part drawings from Rockwell’s premises without authorization,
in violation of their employment contracts and confidentiality agree-
ments, and using them in competition with Rockwell. Rockwell is
unable to prove directly that the 100 piece part drawings it got from
DEV in discovery were stolen by Fleck and Peloso or obtained by
other improper means. But if it can show that the probability that
DEV could have obtained them otherwise – that is, without engaging
in wrongdoing – is slight, then it will have taken a giant step toward
proving what it must prove in order to recover under the first theory
of trade secret protection. The greater the precautions that Rockwell
took to maintain the secrecy of the piece part drawings, the lower
the probability that DEV obtained them properly and the higher the
probability that it obtained them through a wrongful act; the owner
had taken pains to prevent them from being obtained otherwise.
Under the second theory of trade secret protection, the owner’s
precautions still have evidentiary significance, but now primarily as
evidence that the secret has real value. For the precise means by
which the defendant acquired it is less important under the second
theory, though not completely unimportant; remember that even the
second theory allows the unmasking of a trade secret by some means,
such as reverse engineering. If Rockwell expended only paltry re-
sources on preventing its piece part drawings from falling into the
hands of competitors such as DEV, why should the law, whose ma-
chinery is far from costless, bother to provide Rockwell with a rem-
edy? The information contained in the drawings cannot have been
worth much if Rockwell did not think it worthwhile to make serious
efforts to keep the information secret.
The remedial significance of such efforts lies in the fact that if the
C. PROCEDURES 71
plaintiff has allowed his trade secret to fall into the public domain,
he would enjoy a windfall if permi ed 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. It would be like
punishing a person for stealing property that he believes is owned
by another but that actually is abandoned property. If it were true,
as apparently it is not, that Rockwell had given the piece part draw-
ings at issue to customers, and it had done so without requiring the
customers to hold them in confidence, DEV could have obtained the
drawings from the customers without commi ing any wrong. The
harm to Rockwell would have been the same as if DEV had stolen the
drawings from it, but it would have had no remedy, having parted
with its rights to the trade secret. This is true whether the trade se-
cret is regarded as property protected only against wrongdoers or as
property protected against the world. In the first case, a defendant is
perfectly entitled to obtain the property by lawful conduct if he can,
and he can if the property is in the hands of persons who themselves
commi ed no wrong to get it. In the second case the defendant is per-
fectly entitled to obtain the property if the plaintiff has abandoned it
by giving it away without restrictions.
It is easy to understand therefore why the law of trade secrets re-
quires a plaintiff to show that he took reasonable precautions to keep
the secret a secret. If analogies are needed, one that springs to mind
is the duty of the holder of a trademark to take reasonable efforts to
police infringements of his mark, failing which the mark is likely to
be deemed abandoned, or to become generic or descriptive (and in
either event be unprotectable). The trademark owner who fails to po-
lice his mark both shows that he doesn’t really value it very much
and creates a situation in which an infringer may have been unaware
that he was using a proprietary mark because the mark had drifted
into the public domain, much as DEV contends Rockwell’s piece part
drawings have done.
But only in an extreme case can what is a “reasonable” precaution
be determined on a motion for summary judgment, because the an-
swer depends on a balancing of costs and benefits that will vary from
case to case and so require estimation and measurement by persons
knowledgeable in the particular field of endeavor involved. On the
one hand, the more the owner of the trade secret spends on prevent-
ing the secret from leaking out, the more he demonstrates that the
secret has real value deserving of legal protection, that he really was
hurt as a result of the misappropriation of it, and that there really was
misappropriation. On the other hand, the more he spends, the higher
his costs. The costs can be indirect as well as direct. The more Rock-
well restricts access to its drawings, either by its engineers or by the
vendors, the harder it will be for either group to do the work expected
72 CHAPTER 2. TRADE SECRET
of it. Suppose Rockwell forbids any copying of its drawings. Then
a team of engineers would have to share a single drawing, perhaps
by passing it around or by working in the same room, huddled over
the drawing. And how would a vendor be able to make a piece part
– would Rockwell have to bring all that work in house? Such recon-
figurations of pa erns of work and production are far from costless;
and therefore perfect security is not optimum security.
D Infringement: Similarity
The essence of trade secret misappropriation is to obtain or use se-
cret information acquired through “improper means.” Note that this
essence includes an implicit requirement that the information the de-
fendant obtained or used is the same information the plaintiff claims
as a trade secret.
Big Vision Private, Ltd. v. E.I. Dupont De Nemours & Co.
1 F. Supp. 3d 224 (S.D.N.Y. 2014)
Big Vision’s second argument is that DuPont’s recyclable banner
product lines misappropriate Big Vision’s trade secret. Quite sim-
ply, Big Vision cannot demonstrate that its recyclable banners are
substantially similar to DuPont’s. The parties do not dispute that
DuPont’s recyclable banner products are not made by either lamina-
tion or coextrusion. None of DuPont’s recyclable banner products
use the three-layer structures tested at the Trials, the range of CaCO3
tested at the Trials, or “minimal” amounts of Entira (to the extent it
has been defined), since DuPont’s products either use 100% or 0%
Entira. Furthermore, DuPont’s recyclable banner products are not
printable with solvent ink. Thus, to the extent Big Vision’s trade se-
cret is discernible, DuPont’s products implicate almost none of its
elements.60
E Infringement: Prohibited Conduct
Before you dive into the new cases, look back at the cases from the
first half of the chapter. You read them as cases on the existence of
trade secrets. They are also cases on misappropriation. What did the
defendants in each case do? Was it misappropriation? This duality
is typical of intellectual property cases. Both protectability and mis-
appropriation are required to find a defendant liable, which means
that both protectability and misappropriation are potentially in play
60
Plaintiff argues that because DuPont’s banners do not exhibit the four-item
“wish list” that Big Vision’s trade secret is supposed to cause, DuPont must have
ineptly misappropriated its trade secret. While clever, this argument is not a fair
reading of the record, which makes clear that DuPont’s recyclable banners are sim-
ply not substantially similar to Big Vision’s alleged trade secret.
E. INFRINGEMENT: PROHIBITED CONDUCT 73
in every case. A trade secret defendant can win by showing that the For more on the relationship between
plaintiff lacked a valid protectable trade secret in the first place, or by protection and infringement, see Mark
A. Lemley & Mark P. McKenna, Scope, 57
showing that the defendant did not misappropriate that trade secret.
Wm & Mary L. Rev. 2197 (2016).
1 Proving Infringement
Grynberg v. BP, PLC
No. 06 Civ. 6494 (RJH), 2011 U.S. Dist.
In the enormous record before the court, there is no direct evidence LEXIS 34286 (S.D.N.Y. Mar. 30, 2011)
that ARCO used Grynberg’s information in evaluating Tengiz or the
Caspian pipeline. How ARCO came to make those investments is no
mystery however: engineers and executives alike have testified in de-
tail as to the evaluation and decision-making process. With respect to
both investments, publically available resources were used initially,
and then supplemented at length in data rooms set up by the orga-
nizations managing the investment – for Tengiz the Chevron data
room and for the Caspian Pipeline the Oman data room. Further, al-
though plaintiff’s experts state generally that the publically available
sources were inferior to Grynberg’s information, plaintiff concedes
that his information – obtained in 1989-90 – was ”outdated” by 1996.
Moreover, plaintiff admits that when Chevron invested in Tengiz it
had been given access by the Kazakhs to all the information to which
Grynberg was privy, information that would have been available in
the comprehensive and up to date data rooms prepared for ARCO
when it reviewed the Tengiz investment years later.
Plaintiff argues that ARCO’s alleged use can be proven circum-
stantially, in much the same way that “use of a trade secret can be
proven by showing access to the trade secret plus the subsequent sim-
ilarity of the trade secret and a Defendant’s product.” Indeed, the law
of trade secrets acknowledges the basic logic that when two prod-
ucts look alike, there is probably more than a coincidental connec-
tion between them. See Electro-Miniatures Corp. v. Wendon Co. (mis- Electro-Miniatures: 771 F.2d 23, 26 (2d
appropriation provable by circumstantial evidence where company Cir. 1985)
that had struggled to produce printed circuit slip rings suddenly “is-
sued a catalog depicting an entire line of printed circuit slip ring as-
semblies, resembling those built by the plaintiff”). Nor is there any
inherent reason to limit this approach to cases involving products
(electrical or otherwise). Logically, in any case where what is done
or produced by the alleged thief bears some unique markers of the
allegedly stolen secrets, it may be inferred that the thief used the se-
crets. Thus in Rochester Midland Corp. v. Enerco Corp., use of pricing, Rochester Midland: No. 1:08-cv98,
product, and customer information could be inferred where eighteen 2009 U.S. Dist. LEXIS 46103, 2009 WL
1561817, *19 (W.D. Mich. June 1, 2009)
accounts associated with a poached employee switched to the defen-
dant company shortly after the confidential information was brought
over. However, the inference is only as strong as logic demands –
74 CHAPTER 2. TRADE SECRET
where an alleged thief’s products lack a suspicious similarity to the
secrets, the inference would not lie.
Grynberg could make a circumstantial case for use under this the-
ory, then, only to the extent that ARCO’s actions bore the unique
marks of his information, or showed a suspicious similarity to it.
ARCO did eventually make investments in Tengiz and the Caspian
pipeline, which were among the investments that Grynberg had en-
dorsed and relayed information about. However ARCO also de-
clined to pursue other investments Grynberg had advocated, such as
the Karachaganak oil field also in the area of mutual interest. More-
over nothing about ARCO’s investments bears the markers of the
Grynberg information in such a way as to justify inferring the use
of that information. It is not as if ARCO built wells at particular loca-
tions previously suggested by Grynberg, worked primarily through
contacts developed by Grynberg, or tied its investments to Gryn-
berg’s numbers in a suspiciously similar way. Rather, an oil company
chose to invest in one of the largest oil fields in the world, in a manner
different from that envisioned by Grynberg at the time he developed
his proposed consortium. That it did so is unsurprising and does not
evince the kind of suspicious similarity present in Electro-Miniatures
and Rochester Midland. Accordingly an inference of use based on sim-
ilarity is not appropriate here.
2 Direct Infringement
Restatement (Third) of Unfair Competition
§ 43
“Improper” means of acquiring another’s trade secret ... include theft,
Improper Acquisition of Trade Secrets fraud, unauthorized interception of communications, inducement of
or knowing participation in breach of confidence, and other means
either wrongful in themselves or wrongful under the circumstances
of the case. Independent discovery and analysis of publicly available
products or information are not improper means of acquisition.
Uniform Trade Secrets Act
§ 1(1)
“Improper means” includes theft, bribery, misrepresentation, breach
Definitions or inducement of a breach of a duty to maintain secrecy, or espionage
through electronic or other means;
These lists of ”improper means” can be roughly divided into two
types of wrongful conduct. On the one hand there is espionage, which
E. INFRINGEMENT: PROHIBITED CONDUCT 75
often involves theft, trespass, or computer hacking. On the other
hand there is breach of confidence, which often involves violating a
promise to keep someone else’s secrets. It is tempting to to conclude
that “improper means” consist of torts (espionage) and breach of con-
tract (breach of confidence), but this equation is a li le too pat.
E.I. du Pont de Nemours & Co. v. Christopher
431 F.2d 1012 (5th Cir. 1970)
This is a case of industrial espionage in which an airplane is the cloak
and a camera the dagger. The defendants-appellants, Rolfe and Gary
Christopher, are photographers in Beaumont, Texas. The Christo-
phers were hired by an unknown third party to take aerial pho-
tographs of new construction at the Beaumont plant of E. I. DuPont de
Nemours & Company, Inc. Sixteen photographs of the DuPont facil-
ity were taken from the air on March 19, 1969, and these photographs
were later developed and delivered to the third party. Edmund Kitch, in The Law and Eco-
DuPont subsequently filed suit against the Christophers, alleging nomics of Rights in Valuable Information,
that the Christophers had wrongfully obtained photographs reveal- 9 J. Legal Stud. 683 (1980), speculates
that "The appearance of the airplane
ing DuPont’s trade secrets which they then sold to the undisclosed
at such an opportune moment [may
third party. DuPont contended that it had developed a highly se- have] suggested to DuPont that some
cret but unpatented process for producing methanol, a process which kind of inside leak had tipped off the
gave DuPont a competitive advantage over other producers. This photographers (or their client) to the
process, DuPont alleged, was a trade secret developed after much opportunity."
expensive and time-consuming research, and a secret which the com-
pany had taken special precautions to safeguard. The area pho-
tographed by the Christophers was the plant designed to produce
methanol by this secret process, and because the plant was still un-
der construction parts of the process were exposed to view from di-
rectly above the construction area. Photographs of that area, DuPont
alleged, would enable a skilled person to deduce the secret process
for making methanol. DuPont thus contended that the Christophers
had wrongfully appropriated DuPont trade secrets by taking the pho-
tographs and delivering them to the undisclosed third party.
The Christophers argued both at trial and before this court that
they commi ed no “actionable wrong” in photographing the DuPont
facility and passing these photographs on to their client because they
conducted all of their activities in public airspace, violated no gov-
ernment aviation standard, did not breach any confidential relation,
and did not engage in any fraudulent or illegal conduct. In short, the
Christophers argue that for an appropriation of trade secrets to be
wrongful there must be a trespass, other illegal conduct, or breach of
a confidential relationship. We disagree.
It is true, as the Christophers assert, that the previous trade secret
cases have contained one or more of these elements. However, we do
not think that the Texas courts would limit the trade secret protection
exclusively to these elements.
76 CHAPTER 2. TRADE SECRET
Although the previous cases have dealt with a breach of a confi-
dential relationship, a trespass, or other illegal conduct, the rule is
much broader than the cases heretofore encountered. Not limiting
itself to specific wrongs, Texas adopted subsection (a) of the Restate-
ment which recognizes a cause of action for the discovery of a trade
secret by any “improper” means.
The question remaining, therefore, is whether aerial photography
of plant construction is an improper means of obtaining another’s
trade secret. We conclude that it is and that the Texas courts would
so hold. The Supreme Court of that state has declared that “the un-
doubted tendency of the law has been to recognize and enforce higher
Hyde: 314 S.W.2d 763 (Tex. 1958) standards of commercial morality in the business world.” Hyde Cor-
poration v. Huffines. That court has quoted with approval articles indi-
cating that the proper means of gaining possession of a competitor’s
secret process is through inspection and analysis of the product in
order to create a duplicate. Later another Texas court explained:
The means by which the discovery is made may be obvi-
ous, and the experimentation leading from known factors
to presently unknown results may be simple and lying
in the public domain. But these facts do not destroy the
value of the discovery and will not advantage a competi-
tor who by unfair means obtains the knowledge without
paying the price expended by the discoverer.”
Fowler: 316 S.W.2d 111 (Tex. Civ. App.
Brown v. Fowler. We think, therefore, that the Texas rule is clear. One
1958)
may use his competitor’s secret process if he discovers the process
by reverse engineering applied to the finished product; one may use
a competitor’s process if he discovers it by his own independent re-
search; but one may not avoid these labors by taking the process from
the discoverer without his permission at a time when he is taking rea-
sonable precautions to maintain its secrecy. To obtain knowledge of
a process without spending the time and money to discover it inde-
pendently is improper unless the holder voluntarily discloses it or
fails to take reasonable precautions to ensure its secrecy.
In the instant case the Christophers deliberately flew over the
DuPont plant to get pictures of a process which DuPont had at-
tempted to keep secret. The Christophers delivered their pictures to
a third party who was certainly aware of the means by which they
had been acquired and who may be planning to use the information
contained therein to manufacture methanol by the DuPont process.
The third party has a right to use this process only if he obtains this
knowledge through his own research efforts, but thus far all informa-
tion indicates that the third party has gained this knowledge solely by
taking it from DuPont at a time when DuPont was making reasonable
efforts to preserve its secrecy. In such a situation DuPont has a valid
E. INFRINGEMENT: PROHIBITED CONDUCT 77
cause of action to prohibit the Christophers from improperly discov-
ering its trade secret and to prohibit the undisclosed third party from
using the improperly obtained information.
In taking this position we realize that industrial espionage of the
sort here perpetrated has become a popular sport in some segments
of our industrial community. However, our devotion to free wheel-
ing industrial competition must not force us into accepting the law
of the jungle as the standard of morality expected in our commercial
relations. Our tolerance of the espionage game must cease when the
protections required to prevent another’s spying cost so much that
the spirit of inventiveness is dampened. Commercial privacy must
be protected from espionage which could not have been reasonably
anticipated or prevented. We do not mean to imply, however, that
everything not in plain view is within the protected vale, nor that all
information obtained through every extra optical extension is forbid-
den. Indeed, for our industrial competition to remain healthy there
must be breathing room for observing a competing industrialist. A
competitor can and must shop his competition for pricing and exam-
ine his products for quality, components, and methods of manufac-
ture. Perhaps ordinary fences and roofs must be built to shut out in-
cursive eyes, but we need not require the discoverer of a trade secret
to guard against the unanticipated, the undetectable, or the unpre-
ventable methods of espionage now available.
In the instant case DuPont was in the midst of constructing a plant.
Although after construction the finished plant would have protected
much of the process from view, during the period of construction the
trade secret was exposed to view from the air. To require DuPont to
put a roof over the unfinished plant to guard its secret would impose
an enormous expense to prevent nothing more than a school boy’s
trick. We introduce here no new or radical ethic since our ethos has
never given moral sanction to piracy. The marketplace must not de-
viate far from our mores. We should not require a person or corpora-
tion to take unreasonable precautions to prevent another from doing
that which he ought not do in the first place. Reasonable precautions
against predatory eyes we may require, but an impenetrable fortress
is an unreasonable requirement, and we are not disposed to burden
industrial inventors with such a duty in order to protect the fruits
Would Christopher have been decided
of their efforts. “Improper” will always be a word of many nuances, the same way if it were 2015 and the de-
determined by time, place, and circumstances. We therefore need fendants used publicly available satel-
not proclaim a catalogue of commercial improprieties. Clearly, how- lite photos from Google Earth to ob-
ever, one of its commandments does say “thou shall not appropri- serve the the construction of the plant?
What if they flew a small ten-pound
ate a trade secret through deviousness under circumstances in which
remote-control drone over the plant?
countervailing defenses are not reasonably available.” What if they flew the drone over their
Having concluded that aerial photography, from whatever alti- neighbor's fenced backyard and pho-
tude, is an improper method of discovering the trade secrets exposed tographed him sunbathing nude?
78 CHAPTER 2. TRADE SECRET
during construction of the DuPont plant, we need not worry about
whether the flight pa ern chosen by the Christophers violated any
federal aviation regulations. Regardless of whether the flight was le-
gal or illegal in that sense, the espionage was an improper means of
discovering DuPont’s trade secret.
Kamin v. Kuhnau
374 P.2d 912 (Or. 1962)
For approximately 25 years plaintiff had been employed by a kni ing
mill as a mechanic. In 1953 he entered into the garbage collection
business. From the time plaintiff entered into the garbage collection
business he began thinking of methods of facilitating the loading of
garbage trucks and of compressing or packing the materials after they
were loaded. By 1955 he had done some experimental work on his
own truck, devising a hoist mechanism operated by hydraulic cylin-
ders to lift a bucket from the ground to the top of the truck box. By
this time he had also arrived at the conclusion that the packing of the
loaded materials could best be effected through the use of a hydrauli-
cally operated plow which would move against the loaded materials
and compress them against the interior of the truck. At the time plain-
tiff conceived this solution there were on the market garbage truck
bodies containing various “packer” mechanisms, including hydrauli-
cally operated plows. However, plaintiff and defendant apparently
were not aware of the use of hydraulic cylinders for this purpose and
thought that plaintiff’s idea was novel in this respect.
In January, 1955, plaintiff made arrangements with defendant
Kuhnau, president and manager of Oregon Rental Equipment Com-
pany, to use the company’s machine shop and one or more of its em-
ployees to assist plaintiff in carrying on further experimental work in
developing plaintiff’s ideas. This experimental work was carried on
for approximately one year. According to plaintiff’s evidence, all of
the experimental work was done under his supervision and Kuhnau
had no voice or control as to the manner in which the developmen-
tal work was to be carried on. It is Kuhnau’s contention that he and
the employees of Oregon Rental Equipment Company contributed
suggestions and ideas which were used in the development and im-
provement of the truck body and compressor mechanism.
In the course of working on the project several persons who were
engaged in the garbage collection business came to the defendant’s
machine shop, observed the progress being made by plaintiff and
made suggestions as to the practical application of plaintiff’s idea.
Sometime in the summer of 1956 the truck and compressor mecha-
nism which plaintiff was seeking to develop was crystallized substan-
tially in the form in which it now exists.
When plaintiff had completed his experimental work he began to
receive orders for truck bodies embodying his improvements. The
E. INFRINGEMENT: PROHIBITED CONDUCT 79
first two units sold were manufactured by Oregon Rental Equipment
Company. After the sale of these two units (in the spring of 1956)
Kuhnau terminated his connections with Oregon Rental Equipment
Company. He rented a machine shop at another location and began
business under the name of R.K. Truck Sales. Between May and Octo-
ber, 1956, he manufactured ten units for plaintiff. For each unit Kuh-
nau received an amount agreed upon by the parties. Plaintiff fixed
the selling price of the unit and his profit consisted of the difference
between the selling price and the amount he paid Kuhnau.
On or about October 1, 1956, Kuhnau informed plaintiff that he
was going to manufacture truck bodies in competition with plaintiff.
Kuhnau testified that the relationship was terminated as a result of a
disagreement over the amount he was to receive for manufacturing
the unit for plaintiff. Plaintiff contends that Kuhnau terminated the
relationship for the purpose of entering into competition with plain-
tiff. The units manufactured by Kuhnau were similar to those which
he had previously manufactured for plaintiff. However, there were
some differences in the design of the two units. The principal differ-
ence was that Kuhnau mounted the hydraulic cylinder operating the
plow or blade under the truck bed whereas the cylinder in plaintiff’s
truck was above the bed. There was testimony supporting plaintiff’s
assertion that it was his idea to place the cylinder under the bed of
the truck but that suggestion was not adopted because Kuhnau did
not think it was feasible.
Whether the information disclosed was intended to be appropri-
able by the disclosee will depend upon the relationship of the parties
and the circumstances under which the disclosure was made. It is
not necessary to show that the defendant expressly agreed not to use
the plaintiff’s information; the agreement may be implied. And the
implication may be made not simply as a product of the quest for
the intention of the parties but as a legal conclusion recognizing the
need for ethical practices in the commercial world. In the case at bar
the relationship between plaintiff and Kuhnau was such that an obli-
gation not to appropriate the plaintiff’s improvements could be im-
plied. Kuhnau was paid to assist plaintiff in the development of the
la er’s idea. It must have been apparent to Kuhnau that plaintiff was
a empting to produce a unit which could be marketed. Certainly it
would not have been contemplated that as soon as the packer unit
was perfected Kuhnau would have the benefit of plaintiff’s ideas and
the perfection of the unit through painstaking and expensive experi-
mentation. It is to be remembered that the plaintiff’s experimentation
was being carried on, not on the assumption that he was duplicating
an existing machine, but upon the assumption that he was creating a
new product. It has been recognized in the cases that a manufacturer
who has been employed to develop an inventor’s ideas is not entitled
80 CHAPTER 2. TRADE SECRET
to appropriate those ideas to his own use.
Hyde is closely in point. In that case the defendant manufacturer,
having gained knowledge of a garbage compressor through a licens-
ing agreement with the plaintiff inventor, repudiated the agreement
and proceeded to manufacture and sell on its own account a compres-
sor of similar design. Defendant was enjoined. The court held that
the parties were in a confidential relationship and that the informa-
tion relating to the compressor acquired by the defendant incident to
that relationship could not be appropriated by him. In that case, as in
the present case, plaintiff obtained a patent during the course of the
trial. The defendant argued that since plaintiff’s process was revealed
by the patent the process could not be regarded as a trade secret. The
court held that the public disclosure of plaintiff’s process did not re-
move defendant’s duty not to exploit the economic advantage gained
through the information initially disclosed to him by plaintiff. We see
no essential difference between the facts in the Hyde case and the case
at bar.
The principles applied in the foregoing cases have been recog-
McKinzie: 252 P.2d 564 (Or. 1953) nized by this court. In McKinzie v. Cline, the plaintiff employed the de-
fendants to manufacture a gun swivel which one of the plaintiffs had
invented. The defendants discontinued manufacturing the swivel for
the plaintiffs and proceeded to manufacture and sell it for their own
account. It was held that defendants violated a confidential relation-
ship which existed between the parties and that therefore plaintiffs
were entitled to an injunction and damages. In that case, as in the
present one, plaintiffs had placed their product on the market and
had discussed its manufacture with various machinists. The court
noted that there was no “evidence in the record that anyone other
than defendant Cline and the plaintiffs had any knowledge of the in-
side workings of the gadget.” The court went further and held that
even though others might have become acquainted with the manufac-
turing process this would not entitle the defendants to violate the con-
fidence reposed in them by the plaintiffs. With respect to this point,
defendants in the present case argue that the McKinzie case is distin-
guishable from the case at bar in that the mechanism of the gun swivel
was complex, whereas the mechanism of the garbage truck was not.
The evidence does not support this contention. The description of the
packer mechanism, particularly the manner in which the blade was
a ached (the proper adjustment of which was one of the principal im-
provements claimed by plaintiff), would indicate that it was of such
complexity that more than a general inspection of the unit would be
required to reveal the secret of plaintiff’s improvements. The McK-
inzie case followed the line of authority previously discussed which
de-emphasizes the elements of secrecy and novelty and stresses the
breach of the confidential relation between the parties. The court
E. INFRINGEMENT: PROHIBITED CONDUCT 81
adopted the higher standard of commercial ethics to which we have
already alluded:
If our system of private enterprise on which our nation has
thrived, prospered and grown great is to survive, fair deal-
ing, honesty and good faith between contracting parties
must be zealously maintained; therefore, if one who has
learned of another’s invention through contractual rela-
tionship, such as in the present case, takes unconscionable
and inequitable advantage of the other to his own enrich-
ment and at the expense of the la er, a court of equity will
extend its broad equitable powers to protect the party in-
jured.
We reaffirm this declaration of business ethics and hold that defen-
dant Kuhnau violated his duty to plaintiff by appropriating the infor-
mation derived through their business relationship.
Defendants contend that there was no proof that their product
contained the improvements alleged to have been developed by
plaintiff. There is evidence that the plaintiff’s and defendants’ trucks
were similar in structure and design. The trial judge, who inspected
the trucks, concluded that defendants’ trucks used the improvements
developed by plaintiff. Where a person develops a product similar to
that developed by his discloser, the proof of similarity may be suffi-
cient to impose upon the disclosee the burden of proving that there
was no misappropriation. Hoeltke v. C.M. Kemp Mfg. Co. stated: “The Hoeltke: 80 F.2d 912 (4th Cir. 1936)
similarity of defendant’s device to that of complainant is strong proof
that one was copied from the other; for it is hardly probable that dif-
ferent persons should independently of each other invent devices so
nearly similar at so nearly the same time.” In the same case the court
said that “one who admi edly receives a disclosure from an inven-
tor, proceeds thereafter to manufacture articles of similar character,
and, when called to account, makes answer that he was using his own
ideas and not the ideas imparted to him” must sustain his position
by proof that is “clear, satisfactory, and beyond a reasonable doubt.”
We are of the opinion that there was sufficient evidence to support the
conclusion that defendants appropriated plaintiff’s improvements.
3 Secondary Infringement
If a vice-president at MatrixCorp receives an email from someone call-
ing himself Cypher offering to provide details of a computer graph-
ics technology similar to one used by its competitor NeoCorp, can he
take the deal? A moment’s thought should suggest that the answer
depends on how Cypher obtained the information and on what Ma-
trixCorp knows about it. What about MatrixCorp’s customers? Do
82 CHAPTER 2. TRADE SECRET
they need to worry that their widgets were produced using a misap-
propriated trade secret?
Uniform Trade Secrets Act
§1
(2) “Misappropriation” means:
Definitions (i) acquisition of a trade secret of another by a person who
knows or has reason to know that the trade secret was ac-
quired by improper means; or
(ii) disclosure or use of a trade secret of another without ex-
press or implied consent by a person who
(A) used improper means to acquire knowledge of the
trade secret; or
(B) at the time of disclosure or use, knew or had reason to
know that his knowledge of the trade secret was
(I) derived from or through a person who had utilized
improper means to acquire it;
(II) acquired under circumstances giving rise to a duty
to maintain its secrecy or limit its use; or
(III) derived from or through a person who owed a
duty to the person seeking relief to maintain its se-
crecy or limit its use; or
(C) before a material change of his [or her] position, knew
or had reason to know that it was a trade secret and
that knowledge of it had been acquired by accident or
mistake.
F Defenses
The two most significant “defenses” to trade secret infringement are
independent discovery and reverse engineering. I put “defenses” in
quotation marks to emphasize that neither adds anything to the doc-
trines you have already seen. The defendant who establishes that
she independently came up with the same information has actually
defeated a crucial element of the plaintiff’s case-in-chief: that the de-
For more, see Grynberg. fendant stole the information from the plaintiff.
Similarly, the usual definitions of “improper means” simply ex-
clude reverse engineering: the plaintiff who proves only that the de-
fendant reverse engineered her product has again failed to show an
act of misappropriation. Reverse engineering is conventionally de-
fined as “starting with the known product and working backward
to divine the process which aided in its development or manufac-
Kewanee: 416 U.S. 470 (1974) ture.” Kewanee Oil Co. v. Bicron Corp. Courts sometimes add that the
F. DEFENSES 83
“known product” must have been obtained lawfully: it is no defense
to argue that you reverse engineered the widget-making-machine
you stole from your competitor’s factory.
Why allow reverse engineering? For one thing, it reflects a policy
of recognizing personal property owners’ rights over their things. If
you buy it, you can break it down. Reverse engineering also promotes
the same values as trade secret law itself. In the words of the Supreme
Court, it is “an essential part of innovation” that “often leads to sig-
nificant advances in technology.” Bonito Boats, Inc. v. Thunder Craft Bonito Boats: 489 U.S. 14 (1989)
Boats, Inc.
Questions
1. In 2007, the New England Patriots football team videotaped the
hand signals used by coaches for the New York Jets to send in-
structions to players on the field. Anyone in the stadium with
a clear line of sight is able to see the signals. The National Foot-
ball League’s rules allow for such videotaping, but only from
specific areas not including the areas the Patriots taped from
(which had be er views). Did the Patriots misappropriate a
trade secret?
2. In 2011, the Houston Astros baseball team hired Jeff Luhnow
as their new general manager. Previously, Luhnow had been
an executive with the St. Louis Cardinals. While with the Car-
dinals, Luhnow and others build an extensive database with
detailed statistical information about players and reports on
prospective hires. When Luhnow moved to the Astros, several
Cardinals employees went with him. Other Cardinals employ-
ees suspected that Luhnow might have helped design a similar
database for the Astros. They guessed that he and the other ex-
Cardinal employees might have used the same passwords for
the new Astros system, a guess that turned out to be correct.
The Cardinals employees logged into the Astros system using
these passwords and examined some of the information in it.
Identify all of the trade secret issues these facts raise.
Flaming Moe’s Problem
Based on Mason v. Jack Daniel Distillery,
Moe Szyslak is the owner of Moe’s Tavern, where the specialty drink
518 So.2d 130 (Ala. Ct. Civ. App. 1987)
is a “Flaming Moe.” Moe mixes the drinks in a back room, then sets
them on fire in front of customers.
1. Representatives from Tipsy McStagger’s Good-Time Drinking
and Eating Emporium meet with Moe to discuss licensing the
recipe. As part of the negotiations, Moe tells them how it’s
made. Tipsy McStagger’s breaks off talks and start selling its
own version. What result?
84 CHAPTER 2. TRADE SECRET
2. A Tipsy’s employee orders a Flaming Moe, pours it into a ther-
mos, and uses a gas chromatograph to analyze its chemical com-
position. By so doing, he learns that the secret ingredient is
cough syrup. What result?
3. A Tipsy’s employee goes to Moe’s Tavern and bribes a bar-
tender to tell her the formula. What result?
4. Same facts as before, except that anyone who tastes the drink
can recognize that it’s cough syrup. The Tipsy’s employee still
bribes the bartender to tell them. What result?
5. Woud Moe be be er off trying to patent the formula for the
Flaming Moe? Would society be be er off if he did?
Locksmiths Problem
Based on Chicago Lock Co. v. Fanberg,
676 F.2d 400 (9th Cir. 1982)
You represent the Chicago Lock Company, whose “Ace” series of
locks is used in vending machines, burglar alarms, and other high-
security se ings. Ace locks use an unusual cylindrical key that re-
quires specialized equipment to cut. Each lock has a serial number
printed on it; the company uses a secret formula to translate the con-
figuration of tumblers inside the lock into a serial number. The com-
pany’s policy is that it will sell replacement keys only to the registered
owner of a lock with a given serial number. All Ace locks and keys
are stamped “Do Not Duplicate.”
For years, locksmiths have known how to analyze Ace locks. After
a few minutes poking at the lock with their tools, they can write down
the configuration of pins and tumblers inside the lock. They can then
go back to their toolkits and grind a replacement key, which will open
the lock. If the locksmiths keep the configuration information on file,
they can grind replacement keys in the future without needing to go
back to the lock and analyze it again. Individual locksmiths have, for
years, kept such files for their local customers.
Recently, Morris and Victor Fanberg, two locksmiths, published
a book entitled “AA Advanced Locksmith’s Tubular Lock Codes.”
They asked locksmiths around the country to send them lists of Ace
lock serial numbers and the corresponding tumbler configurations.
Based on that information, they were able to program a computer to
reconstruct Chicago’s secret formula. The book contains a table that
shows how to turn an Ace serial number into a key configuration,
which any locksmith with the proper equipment could then use to
cut a key opening the lock with that serial number.
Because the serial numbers on Ace locks are frequently printed
on the outside, Chicago is concerned that the publication of this book
will undermine the security of Ace locks. It has asked you whether it
can and should sue the Fanbergs for damages and to halt publication
of the book. What is your advice? Is there anything further it would
G. PRIVACY 85
be helpful for you to know? Are there changes that Chicago Lock can
and should make to its procedures in the future?
G Privacy
Restatement (Second) of Torts
One who intentionally intrudes, physically or otherwise, upon the § 652B
solitude or seclusion of another or his private affairs or concerns, is Intrusion upon Seclusion
subject to liability to the other for invasion of his privacy, if the intru-
sion would be highly offensive to a reasonable person.
cmt. b The invasion may be by physical intrusion into a place in which
the plaintiff has secluded himself, as when the defendant forces
his way into the plaintiff’s room in a hotel or insists over the
plaintiff’s objection in entering his home. It may also be by the
use of the defendant’s senses, with or without mechanical aids,
to oversee or overhear the plaintiff’s private affairs, as by look-
ing into his upstairs windows with binoculars or tapping his
telephone wires. It may be by some other form of investigation
or examination into his private concerns, as by opening his pri-
vate and personal mail, searching his safe or his wallet, exam-
ining his private bank account, or compelling him by a forged
court order to permit an inspection of his personal documents.
cmt. c The defendant is subject to liability under the rule stated in
this Section only when he has intruded into a private place, or
has otherwise invaded a private seclusion that the plaintiff has
thrown about his person or affairs. Thus there is no liability
for the examination of a public record concerning the plaintiff,
or of documents that the plaintiff is required to keep and make
available for public inspection. Nor is there liability for observ-
ing him or even taking his photograph while he is walking on
the public highway, since he is not then in seclusion, and his ap-
pearance is public and open to the public eye. Even in a public
place, however, there may be some ma ers about the plaintiff,
such as his underwear or lack of it, that are not exhibited to the
public gaze; and there may still be invasion of privacy when
there is intrusion upon these ma ers.
One who gives publicity to a ma er concerning the private life of an- § 652D
other is subject to liability to the other for invasion of his privacy, if Publicity Given to Private Life
the ma er publicized is of a kind that (a) would be highly offensive to
a reasonable person, and (b) is not of legitimate concern to the public.
86 CHAPTER 2. TRADE SECRET
cmt. b Private life. – The rule stated in this Section applies only to pub-
licity given to ma ers concerning the private, as distinguished
from the public, life of the individual. There is no liability
when the defendant merely gives further publicity to informa-
tion about the plaintiff that is already public. Thus there is no
liability for giving publicity to facts about the plaintiff’s life that
are ma ers of public record, such as the date of his birth, the fact
of his marriage, his military record, the fact that he is admi ed
to the practice of medicine or is licensed to drive a taxicab, or
the pleadings that he has filed in a lawsuit. On the other hand,
if the record is one not open to public inspection, as in the case
of income tax returns, it is not public, and there is an invasion
of privacy when it is made so.
Similarly, there is no liability for giving further publicity to
what the plaintiff himself leaves open to the public eye. Thus he
normally cannot complain when his photograph is taken while
he is walking down the public street and is published in the
defendant’s newspaper. Nor is his privacy invaded when the
defendant gives publicity to a business or activity in which the
plaintiff is engaged in dealing with the public. On the other
hand, when a photograph is taken without the plaintiff’s con-
sent in a private place, or one already made is stolen from his
home, the plaintiff’s appearance that is made public when the
picture appears in a newspaper is still a private ma er, and his
privacy is invaded.
Every individual has some phases of his life and his activ-
ities and some facts about himself that he does not expose to
the public eye, but keeps entirely to himself or at most reveals
only to his family or to close friends. Sexual relations, for exam-
ple, are normally entirely private ma ers, as are family quar-
rels, many unpleasant or disgraceful or humiliating illnesses,
most intimate personal le ers, most details of a man’s life in
his home, and some of his past history that he would rather for-
get. When these intimate details of his life are spread before the
public gaze in a manner highly offensive to the ordinary reason-
able man, there is an actionable invasion of his privacy, unless
the ma er is one of legitimate public interest.
96 Geo. L.J. 123 (2007)
Neil M. Richards & Daniel J. Solove
Privacy's Other Path: Recovering the Law of Confidentiality
According to the oft-told legend, the right to privacy was born when
Samuel Warren and Louis Brandeis penned The Right to Privacy in
1890. Spanning just twenty-eight pages in the Harvard Law Review,
the article identified privacy as an implicit concept running through-
G. PRIVACY 87
out Anglo-American common law. Warren and Brandeis also based
much of their argument for a right to privacy upon Prince Albert v. Prince Albert: (1848) 41 Eng. Rep. 1171
Strange, an English case from 1848. (Ch.)
The dispute arose when Queen Victoria and her husband Al-
bert, the Prince Consort, sued in equity to prevent the exhibition by
William Strange of etchings that the royal couple had made of their
family. They intended the etchings to be shared only with their fam-
ily and close friends. On appeal, the Lord Chancellor agreed that
Strange had no right to print and sell the etchings or the catalog. The
Chancellor concluded that Prince Albert had a common law literary
property right in the unpublished work – essentially, a common law
copyright in unpublished works. Prince Albert suggested that intel- Put this thought aside for now; com-
lectual property law could afford a remedy of restricting publication mon law literary property will return in
the Copyright and Music chapters.
in unpublished works. Warren and Brandeis took this facet of the
opinion and used it to turn Prince Albert from an opinion protecting
intellectual property rights to a case protecting individual feelings
and emotions from the pain of unwanted publicity.
The story of privacy in Britain serves as an interesting contrast to
the American experience. English law, like American law, also de-
veloped a law of “private” information. As in America, this English
strand of the common law also traces its origins back to Prince Albert.
Warren and Brandeis minimized the second basis for the judgment
– breach of confidence. Because Victoria and Albert had circulated
copies of the etchings only to a few friends, and had only sent copies
outside such a circle to the printer for purpose of making these copies,
the Lord Chancellor concluded that Strange’s possession “must have
originated in a breach of trust, confidence, or contract,” most likely
by a clerk to the royal printer. Disclosure represented a breach of con-
fidence because a clerk to trusted professionals like printers and mer-
chants owed the same implied contractual duty as his master “that
he will not make public that which he learns in the execution of his
duty as clerk.” Thus, the printer’s assistant had a duty to the Queen
and the Prince to maintain the confidentiality of their etchings. The
breach of this duty could be enforced against subsequent holders of
the etchings and the plates used to make copies of them.
The English law of confidence is quite different from the Amer-
ican law of privacy. Consider the case of Barrymore v. News Group Barrymore: [1997] F.S.R. 600 (Ch.) (U.K.)
Newspapers, Ltd.. Actor Michael Barrymore had a homosexual affair
with Paul Winco , who worked for a company Barrymore jointly
owned with his wife. Winco provided details of the affair to a news-
paper, including le ers wri en by Barrymore. The court held that
there was a breach of confidence: “When people enter into a personal
relationship of this nature, they do not do so for the purpose of it sub-
sequently being published in The Sun, or any other newspaper. The
information about the relationship is for the relationship and not for
88 CHAPTER 2. TRADE SECRET
a wider purpose.”
The results in these cases would very likely be different under
American privacy law. Courts might dismiss the cases, either con-
cluding that the information was not private since others knew about
it or finding that the information was “of legitimate concern to the
public.” Beyond the privacy torts, the American breach of confiden-
tiality tort would have difficulty because only a few courts have held
that it can make third parties liable for knowingly using information
obtained via a breach. Moreover, the American tort currently has
been applied only to a limited set of relationships; courts have not
yet extended the tort to friends or lovers. In contrast, English law is
much more open-ended in the relationships it protects.
Florida v. Riley
488 U.S. 445 (1989)
This case originated with an anonymous tip to the Pasco County Sher-
iff’s office that marijuana was being grown on respondent’s prop-
erty. When an investigating officer discovered that he could not see
the contents of [respondent’s] greenhouse from the road, he circled
twice over respondent’s property in a helicopter at the height of 400
feet. With his naked eye, he was able to see through the openings in
the roof and one or more of the open sides of the greenhouse and to
identify what he thought was marijuana growing in the structure. A
warrant was obtained based on these observations, and the ensuing
search revealed marijuana growing in the greenhouse. Respondent
was charged with possession of marijuana under Florida law. The
trial court granted his motion to suppress [for violating the Fourth
Amendment’s prohibition on ”unreasonable searches and seizures.”]
Ciraolo: 476 U.S. 207 (1986)
California v. Ciraolo controls this case. There, acting on a tip, the
police inspected the backyard of a particular house while flying in a
fixed-wing aircraft at 1,000 feet. With the naked eye the officers saw
what they concluded was marijuana growing in the yard. A search
warrant was obtained on the strength of this airborne inspection, and
marijuana plants were found.
We recognized that the yard was within the curtilage of the house,
that a fence shielded the yard from observation from the street, and
that the occupant had a subjective expectation of privacy. We held,
however, that such an expectation was not reasonable and not one
that society is prepared to honor. Our reasoning was that the home
and its curtilage are not necessarily protected from inspection that
involves no physical invasion. What a person knowingly exposes to
the public, even in his own home or office, is not a subject of Fourth
Amendment protection. As a general proposition, the police may see
what may be seen from a public vantage point where they have a
right to be, Thus the police, like the public, would have been free to
inspect the backyard garden from the street if their view had been
G. PRIVACY 89
unobstructed. They were likewise free to inspect the yard from the
vantage point of an aircraft flying in the navigable airspace as this
plane was.
We arrive at the same conclusion in the present case.
Kyllo v. United States
533 U.S. 27 (2001)
This case presents the question whether the use of a thermal-imaging
device aimed at a private home from a public street to detect relative
amounts of heat within the home constitutes a ”search” within the
meaning of the Fourth Amendment.
In 1991 Agent William Ellio of the United States Department
of the Interior came to suspect that marijuana was being grown in
the home belonging to petitioner Danny Kyllo. Indoor marijuana
growth typically requires high-intensity lamps. In order to determine
whether an amount of heat was emanating from petitioner’s home
consistent with the use of such lamps, at 3:20 a.m. on January 16,
1992, Agent Ellio and Dan Haas used an Agema Thermovision 210
thermal imager to scan the triplex. Thermal imagers detect infrared
radiation, which virtually all objects emit but which is not visible to
the naked eye. The imager converts radiation into images based on
relative warmth—black is cool, white is hot, shades of gray connote
relative differences; in that respect, it operates somewhat like a video
camera showing heat images. The scan of Kyllo’s home took only a
few minutes and was performed from the passenger seat of Agent
Ellio ’s vehicle across the street from the front of the house and also
from the street in back of the house. The scan showed that the roof
over the garage and a side wall of petitioner’s home were relatively
hot compared to the rest of the home and substantially warmer than
neighboring homes in the triplex. Agent Ellio concluded that peti-
tioner was using halide lights to grow marijuana in his house, which
indeed he was. Based on tips from informants, utility bills, and the
thermal imaging, a Federal Magistrate Judge issued a warrant autho-
rizing a search of petitioner’s home, and the agents found an indoor
growing operation involving more than 100 plants.
One might think that examining the portion of a house that is in
plain public view, while it is a ”search” despite the absence of tres-
pass, is not an ”unreasonable” one under the Fourth Amendment.
But in fact we have held that visual observation is no ”search” at all.
In assessing when a search is not a search, we have applied somewhat
in reverse the principle first enunciated in Ka v. United States. Ka Katz: 389 U.S. 347 (1967)
involved eavesdropping by means of an electronic listening device
placed on the outside of a telephone booth – a location not within
the catalog (”persons, houses, papers, and effects”) that the Fourth
Amendment protects against unreasonable searches. We held that
the Fourth Amendment nonetheless protected Ka from the warrant-
90 CHAPTER 2. TRADE SECRET
less eavesdropping because he ”justifiably relied” upon the privacy of
the telephone booth. As Justice Harlan’s oft-quoted concurrence de-
scribed it, a Fourth Amendment search occurs when the government
violates a subjective expectation of privacy that society recognizes as
reasonable. We have applied the test on two different occasions in
holding that aerial surveillance of private homes and surrounding
areas does not constitute a search. Ciraolo; Florida v. Riley.
We think that obtaining by sense-enhancing technology any in-
formation regarding the interior of the home that could not otherwise
have been obtained without physical intrusion into a constitutionally
protected area, constitutes a search – at least where (as here) the tech-
nology in question is not in general public use. This assures preserva-
tion of that degree of privacy against government that existed when
the Fourth Amendment was adopted. On the basis of this criterion,
the information obtained by the thermal imager in this case was the
product of a search.
The Government also contends that the thermal imaging was con-
stitutional because it did not ”detect private activities occurring in
Dow Chemical: 476 U.S. 227 (1986) private areas,” It points out that in Dow Chemical Co. v. United States
we observed that the enhanced aerial photography did not reveal
any ”intimate details.” Dow Chemical, however, involved enhanced
aerial photography of an industrial complex, which does not share
the Fourth Amendment sanctity of the home. The Fourth Amend-
ment’s protection of the home has never been tied to measurement
Silverman: 365 U.S. 505 (1961) of the quality or quantity of information obtained. In Silverman v.
United States, for example, we made clear that any physical invasion
of the structure of the home, ”by even a fraction of an inch,” was too
much, and there is certainly no exception to the warrant requirement
for the officer who barely cracks open the front door and sees nothing
but the nonintimate rug on the vestibule floor. In the home, our cases
show, all details are intimate details, because the entire area is held
safe from prying government eyes.
Justice Stevens, dissenting:
There is, in my judgment, a distinction of constitutional magni-
tude between ”through-the-wall surveillance” that gives the observer
or listener direct access to information in a private area, on the one
hand, and the thought processes used to draw inferences from in-
formation in the public domain, on the other hand. The Court has
crafted a rule that purports to deal with direct observations of the
inside of the home, but the case before us merely involves indirect
deductions from ”off-the-wall” surveillance, that is, observations of
the exterior of the home.
H. GOVERNMENT SECRETS 91
H Government Secrets
Freedom of Information Act
(a) Each agency shall make available to the public information as 5 U.S.C. § 552
follows: Public information; agency rules, opin-
(3) (A) … each agency, upon any request for records which ions, orders, records, and proceedings
(i) reasonably describes such records and (ii) is made
in accordance with published rules stating the time,
place, fees (if any), and procedures to be followed,
shall make the records promptly available to any per-
son.
(b) This section does not apply to ma ers that are –
(1) (A) specifically authorized under criteria established by an
Executive order to be kept secret in the interest of national
defense or foreign policy and (B) are in fact properly clas-
sified pursuant to such Executive order;
(2) related solely to the internal personnel rules and practices
of an agency;
(3) specifically exempted from disclosure by statute …
(4) trade secrets and commercial or financial information ob-
tained from a person and privileged or confidential;
(5) inter-agency or intra-agency memorandums or le ers
which would not be available by law to a party other than
an agency in litigation with the agency;
(6) personnel and medical files and similar files the disclosure
of which would constitute a clearly unwarranted invasion
of personal privacy;
(7) records or information compiled for law enforcement pur-
poses, but only to the extent that the production of such
law enforcement records or information (A) could reason-
ably be expected to interfere with enforcement proceed-
ings, (B) would deprive a person of a right to a fair trial
or an impartial adjudication, (C) could reasonably be ex-
pected to constitute an unwarranted invasion of personal
privacy, (D) could reasonably be expected to disclose the
identity of a confidential source … (E) would disclose tech-
niques and procedures for law enforcement investigations
or prosecutions … if such disclosure could reasonably be
expected to risk circumvention of the law, or (F) could rea-
sonably be expected to endanger the life or physical safety
of any individual;
92 CHAPTER 2. TRADE SECRET
(8) contained in or related to examination, operating, or con-
dition reports prepared by, on behalf of, or for the use of
an agency responsible for the regulation or supervision of
financial institutions; or
(9) geological and geophysical information and data, includ-
ing maps, concerning wells.
U.S. Dept. of Justice v. Tax Analysts
492 U.S. 136 (1989)
The question presented is whether the Freedom of Information Act re-
quires the United States Department of Justice (Department) to make
available copies of district court decisions that it receives in the course
of litigating tax cases on behalf of the Federal Government. We hold
that it does.
We consider first whether the district court decisions at issue are
Kissinger: 445 U.S. 136 (1980) ”agency records,” a term elaborated upon both in Kissinger v. Re-
Forsham: 445 US 169 (1980) porters Comm. for Freedom of Press and in Forsham v. Harris. Kissinger
involved three separate FOIA requests for wri en summaries of
telephone conversations in which Henry Kissinger had participated
when he served as Assistant to the President for National Security Af-
fairs from 1969 to 1975, and as Secretary of State from 1973 to 1977. At
the time of this request, these summaries were stored in Kissinger’s
office at the State Department in his personal files. We first concluded
that the summaries were not ”agency records” at the time they were
made because the FOIA does not include the Office of the President
in its definition of ”agency.” We further held that these documents
did not acquire the status of ”agency records” when they were re-
moved from the White House and transported to Kissinger’s office at
the State Department, a FOIA-covered agency.
Forsham, in turn, involved a request for raw data that formed the
basis of a study conducted by a private medical research organization.
Although the study had been funded through federal agency grants,
the data never passed into the hands of the agencies that provided
the funding, but instead was produced and possessed at all times by
the private organization. We recognized that records of a nonagency
certainly could become records of an agency as well, but the fact that
the study was financially supported by a FOIA-covered agency did
not transform the source material into ”agency records.” Nor did the
agencies’ right of access to the materials under federal regulations
change this result. As we explained, ”the FOIA applies to records
which have been in fact obtained, and not to records which merely
could have been obtained.”
Two requirements emerge from Kissinger and Forsham, each of
which must be satisfied for requested materials to qualify as ”agency
records.” First, an agency must either create or obtain the requested
H. GOVERNMENT SECRETS 93
materials. In performing their official duties, agencies routinely avail
themselves of studies, trade journal reports, and other materials pro-
duced outside the agencies both by private and governmental orga-
nizations. To restrict the term ”agency records” to materials gener-
ated internally would frustrate Congress’ desire to put within public
reach the information available to an agency in its decision-making
processes.
Second, the agency must be in control of the requested materials
at the time the FOIA request is made. By control we mean that the ma-
terials have come into the agency’s possession in the legitimate con-
duct of its official duties. This requirement accords with Kissinger’s
teaching that the term ”agency records” is not so broad as to include
personal materials in an employee’s possession, even though the ma-
terials may be physically located at the agency.
Applying these requirements here, we conclude that the re-
quested district court decisions constitute ”agency records.” First, it is
undisputed that the Department has obtained these documents from
the district courts. Second, the Department clearly controls the dis-
trict court decisions that Tax Analysts seeks.
Chrysler Corp. v. Brown
441 U.S. 281 (1979)
The expanding range of federal regulatory activity and growth in the
Government sector of the economy have increased federal agencies’
demands for information about the activities of private individuals
and corporations. These developments have paralleled a related con-
cern about secrecy in Government and abuse of power. The Freedom
of Information Act (hereinafter FOIA) was a response to this concern,
but it has also had a largely unforeseen tendency to exacerbate the
uneasiness of those who comply with governmental demands for in-
formation. For under the FOIA third parties have been able to obtain
Government files containing information submi ed by corporations
and individuals who thought that the information would be held in
confidence.
This case belongs to a class that has been popularly denominated
”reverse-FOIA” suits. Chrysle seeks to enjoin agency disclosure on
the grounds that it is inconsistent with the FOIA and 18 U.S.C. § 1905,
a criminal statute with origins in the 19th century that proscribes dis-
closure of certain classes of business and personal information. We
agree with the Court of Appeals for the Third Circuit that the FOIA
is purely a disclosure statute and affords Chrysler no private right
of action to enjoin agency disclosure. But we cannot agree with that
court’s conclusion that this disclosure is ”authorized by law” within
the meaning of § 1905.
As a party to numerous Government contracts, Chrysler is re-
quired to comply with Executive Orders 11246 and 11375, which
94 CHAPTER 2. TRADE SECRET
charge the Secretary of Labor with ensuring that corporations that
benefit from Government contracts provide equal employment op-
portunity regardless of race or sex. The United States Department of
Labor’s Office of Federal Contract Compliance Programs (OFCCP)
has promulgated regulations which require Government contrac-
tors to furnish reports and other information about their affirmative-
action programs and the general composition of their work forces.
OFCCP regulations require that Chrysler make available to this
agency wri en affirmative-action programs (AAP’s) and annually
submit Employer Information Reports, known as EEO-1 Reports.
Regulations promulgated by the Secretary of Labor provide for
public disclosure of information from records of the OFCCP and its
compliance agencies. It is the voluntary disclosure contemplated by
this regulation, over and above that mandated by the FOIA, which is
the gravamen of Chrysler’s complaint in this case.
This controversy began on May 14, 1975, when the [government]
informed Chrysler that third parties had made an FOIA request for
disclosure of the 1974 AAP for Chrysler’s Newark, Del., assembly
plant.
Although we have not had to face squarely the question whether
the FOIA textitex proprio vigore forbids governmental agencies from
disclosing certain classes of information to the public, we have con-
sistently recognized that the basic objective of the Act is disclosure.
Chrysler contends that the nine exemptions in general, and Ex-
emption 4 in particular, reflect a sensitivity to the privacy interests of
private individuals and nongovernmental entities. That contention
may be conceded without inexorably requiring the conclusion that
the exemptions impose affirmative duties on an agency to withhold
information sought. In fact, that conclusion is not supported by the
language, logic, or history of the Act.
Enlarged access to governmental information undoubtedly cuts
against the privacy concerns of nongovernmental entities, and as a
ma er of policy some balancing and accommodation may well be de-
sirable. We simply hold here that Congress did not design the FOIA
exemptions to be mandatory bars to disclosure.
Chrysler contends, however, that even if its suit for injunctive re-
lief cannot be based on the FOIA, such an action can be premised on
18 U.S.C. § 1905 the Trade Secrets Act. The Act provides:
Whoever, being an officer or employee of the United
States or of any department or agency thereof, publishes,
divulges, discloses, or makes known in any manner or to
any extent not authorized by law any information coming
to him in the course of his employment or official duties
or by reason of any examination or investigation made by,
H. GOVERNMENT SECRETS 95
or return, report or record made to or filed with, such de-
partment or agency or officer or employee thereof which
information concerns or relates to the trade secrets, pro-
cesses, operations, style of work, or apparatus, or to the
identity, confidential statistical data, amount or source of
any income, profits, losses, or expenditures of any person,
firm, partnership, corporation, or association; or permits
any income return or copy thereof or any book containing
any abstract or particulars thereof to be seen or examined
by any person except as provided by law; shall be fined
not more than $1,000, or imprisoned not more than one
year, or both; and shall be removed from office or employ-
ment.
The Court of Appeals held that the Trade Secrets Act was not appli-
cable to the agency disclosure at issue here because such disclosure
was ”authorized by law” within the meaning of the Act. The court
found the source of that authorization to be the OFCCP regulations
that DLA relied on in deciding to disclose information on the Ham-
tramck and Newark plants. [The Court disagreed.]
We reject, however, Chrysler’s contention that the Trade Secrets
Act affords a private right of action to enjoin disclosure in violation
of the statute. Most importantly, a private right of action is not nec-
essary to make effective the congressional purpose, for we find that
review of DLA’s decision to disclose Chrysler’s employment data is
available under the Administrative Procedures Act.
Section 10(a) of the APA provides that ”a person suffering legal
wrong because of agency action, or adversely affected or aggrieved
by agency action, is entitled to judicial review thereof.” We conclude 5 U.S.C. § 702.
that DLA’s decision to disclose the Chrysler reports is reviewable
agency action and Chrysler is a person ”adversely affected or ag-
grieved” within the meaning of § 10(a).
Coastal States Gas Corp. v. Department of Energy
617 F.2d 854 (D.C. Cir. 1980)
This case raises issues concerning the scope of Exemptions 5 and 7
to the general disclosure requirements of the Freedom of Informa-
tion Act. In 1975 and 1976, plaintiff Coastal States Gas Corporation
(Coastal States) filed Freedom of Information requests with the de-
fendant, seeking copies of agency interpretations of its regulations
which had not been made public. The issue in this appeal is focused
on memoranda from regional counsel to auditors working in DOE’s
field offices, issued in response to requests for interpretations of reg-
ulations within the context of particular facts encountered while con-
ducting an audit of a firm. The plaintiff contends that these memo-
randa constituted a body of ”secret law” which the agency was using
96 CHAPTER 2. TRADE SECRET
in its dealings with the public and which must be disclosed, while
DOE responds that the documents were properly withheld under Ex-
emption 5, as documents which would not be subject to disclosure
during discovery, and in a few cases, under Exemption 7 as docu-
ments within an investigatory file.
After the 1973 oil embargo, a compliance program was established
to assure the observance of petroleum pricing and allocation regula-
tions. Ten regional offices were established within which regional
counsel were located. Each regional office also employed auditors
and other investigative personnel, whose job was auditing individual
firms to assure compliance with the regulations. These audits were
not ”investigations;” at that point, no charge had been made nor was
a violation necessarily suspected.
While the regional counsel has many responsibilities, the partic-
ular task relevant to this case is that of providing interpretations of
the pertinent regulations to the auditors at this early stage of compli-
ance review. If the auditors should encounter a problem of regula-
tory interpretation, a request for advice would be sent to the regional
counsel, couched in a specific factual context, either real or hypothet-
ical. The response would be a legal memorandum, interpreting any
applicable regulations in light of those facts, and often pointing out
additional factors which might make a difference in the application
of the regulation.
The agency points out that these were not ”formal” interpreta-
tions of the regulations, emphasizing that there is a published pro-
cedure for issuing such interpretations. Also, the agency insists that
the interpretations were not ”binding” on the audit staff; it contends
that the agency staff ”is free to reject the memorandum.” The district
court found, however, that in fact the advice was regularly and consis-
tently followed by the non-legal staff, a conclusion which we find to
be fully supported by the evidence. There is evidence in the record
that agency staff failed to follow a regional counsel opinion only if
it could be distinguished on the facts, or if the ma er were referred
to a higher authority within the agency. Furthermore, in some of
the offices the documents were indexed by subject ma er and used
as precedent in later cases; they were circulated among the area of-
fices and supplied to new personnel; they were at times ”amended”
or ”rescinded,” which would hardly be necessary if the documents
contained merely informal suggestions to staff which could be disre-
garded; and on at least one occasion a regional counsel memorandum
involving the audit of a different firm was cited to a member of the
public as binding precedent.
The language of Exemption 5 is cast in terms of discovery law; the
agencies need turn over no documents ”which would not be available
by law to a private party in litigation with the agency.” This discovery
H. GOVERNMENT SECRETS 97
standard can only serve as a rough guide to the courts, since decisions
as to discovery are usually based on a balancing of the relative need
of the parties, and standards vary according to the kind of litigation
involved. It is clear, however, that Congress intended that agencies
should not lose the protection traditionally afforded through the ev-
identiary privileges simply because of the passage of the FOIA. The
courts have recognized that Exemption 5 protects, as a general rule,
materials which would be protected under the a orney-client privi-
lege, the a orney work-product privilege, or the executive ”delibera-
tive process” privilege.
We have difficulty in perceiving any purpose which would be
served by applying the a orney-client privilege in this case. While it
is clear that an agency can be a ”client” and agency lawyers can func-
tion as ”a orneys” within the relationship contemplated by the priv-
ilege, this does not seem to be such a case. It is hard to imagine the
”confidential information” which an auditor might have communi-
cated to the regional counsel. The factual situations the auditor com-
municates to the a orneys are encountered in the course of auditing
third parties, the companies. They do not contain private information
concerning the agency. Rather than ”counseling,” intended to assist
the agency in protecting its interests, the memoranda here seem to
be neutral, objective analyses of agency regulations. They resemble,
in fact, question and answer guidelines which might be found in an
agency manual. In sharp contrast are the documents and memoranda
in issue in Mead Data Cent., Inc. v. US Dept. of Air Force, in which dis- Mead Data: 566 F.2d 242 (D.C. Cir. 1977)
closure was sought of material generated in the course of negotiating
a contract between the Air Force and a private company. In such a
case, the Government is dealing with its a orneys as would any pri-
vate party seeking advice to protect personal interests, and needs the
same assurance of confidentiality so it will not be deterred from full
and frank communications with its counselors. This case bears li le
resemblance to that situation.
Assuming, however, that the purposes of the a orney-client priv-
ilege might be served by extending its protection to the situation here,
we agree with the district court that DOE has failed to demonstrate
a fundamental prerequisite to assertion of the privilege: confidential-
ity both at the time of the communication and maintained since. The
agency has admi ed that it does not know who has had access to the
documents, and there is undisputed testimony that at least in some
regions, copies of the memoranda were circulated to all area offices,
filed and indexed for future use, relied on as precedent and used as
training materials for new personnel.
Another traditional area of privilege which has been recognized
under Exemption 5 is a orney work-product. This doctrine stands in
contrast to the a orney-client privilege; rather than protecting confi-
98 CHAPTER 2. TRADE SECRET
dential communications from the client, it provides a working a or-
ney with a ”zone of privacy” within which to think, plan, weigh facts
and evidence, candidly evaluate a client’s case, and prepare legal the-
ories. There is one significant limitation of the doctrine, however,
which defeats the agency’s claim of privilege here; it has uniformly
been held to be limited to documents prepared in contemplation of lit-
igation. o the extent the Government provided some indication in its
index that a specific claim had taken shape in the course of an audit,
so that the a orney’s work could fairly, if generously, be character-
ized as ”in contemplation of litigation,” the district court permi ed
these documents to be withheld. Beyond that, the DOE has failed to
carry its burden of establishing that litigation was fairly foreseeable
at the time the memoranda were prepared, and thus is not entitled to
invoke the exception.
A privilege unique to the government is one which is variously
described as predecisional or deliberative process privilege. The priv-
ilege has a number of purposes: it serves to assure that subordi-
nates within an agency will feel free to provide the decisionmaker
with their uninhibited opinions and recommendations without fear
of later being subject to public ridicule or criticism; to protect against
premature disclosure of proposed policies before they have been fi-
nally formulated or adopted; and to protect against confusing the is-
sues and misleading the public by dissemination of documents sug-
gesting reasons and rationales for a course of action which were not
in fact the ultimate reasons for the agency’s action.
In deciding whether a document should be protected by the privi-
lege we look to whether the document is ”predecisional” –whether it
was generated before the adoption of an agency policy – and whether
the document is ”deliberative” – whether it reflects the give-and-take
of the consultative process. The exemption thus covers recommenda-
tions, draft documents, proposals, suggestions, and other subjective
documents which reflect the personal opinions of the writer rather
than the policy of the agency. Documents which are protected by the
privilege are those which would inaccurately reflect or prematurely
disclose the views of the agency, suggesting as agency position that
which is as yet only a personal position. To test whether disclosure
of a document is likely to adversely affect the purposes of the priv-
ilege, courts ask themselves whether the document is so candid or
personal in nature that public disclosure is likely in the future to sti-
fle honest and frank communication within the agency. Human ex-
perience teaches that those who expect public dissemination of their
remarks may well temper candor with a concern for appearances and
for their own interests to the detriment of the decisionmaking process.
We also ask whether the document is recommendatory in nature or is
a draft of what will become a final document, and whether the docu-
H. GOVERNMENT SECRETS 99
ment is deliberative in nature, weighing the pros and cons of agency
adoption of one viewpoint or another. Finally, even if the document
is predecisional at the time it is prepared, it can lose that status if it is
adopted, formally or informally, as the agency position on an issue
or is used by the agency in its dealings with the public.
It is readily apparent that the memoranda in issue bear li le re-
semblance to the types of documents intended to be protected under
the deliberative process privilege. The documents were not sugges-
tions or recommendations as to what agency policy should be. Unlike
the documents in EPA v. Mink and Murphy v. Dep’t of the ArmyMur- Mink: 410 U.S. 73 (1973)
phymurphy613 F.2d 1151 (1979), the memoranda are not advice to a
superior, nor are they suggested dispositions of a case, as in Renego- Grumman: 421 U.S. 168 (1975)
tiation Bd. v. Grumman Aircraft Engineering Corp.. They are not one
step of an established adjudicatory process, which would result in a
formal opinion, as were the documents held exempt in NLRB v. Sears, Sears, Roebuck: 421 U.S. 132 (1975)
Roebuck & Co. There is nothing subjective or personal about the mem-
oranda; they are simply straightforward explanations of agency reg-
ulations in specific factual situations. They are more akin to a ”re-
source” opinion about the applicability of existing policy to a certain
state of facts, like examples in a manual, to be contrasted to a factual
or strategic advice giving opinion. Nor do they reflect agency give-
and-take – of the deliberative process – by which the decision itself
is made. Characterizing these documents as ”predecisional” simply
because they play into an ongoing audit process would be a serious
warping of the meaning of the word. No ”decision” is being made or
”policy” being considered; rather the documents discuss established
policies and decisions – the agency regulations – in the light of a spe-
cific, and often hypothetical, fact pa ern.
Exemption 7 affords protection to investigatory files to prevent
harm to the government’s case in court. In 1974, the scope of the
privilege was sharply narrowed when Congress, dissatisfied with the
broad scope given to Exemption 7 by the courts, amended the exemp-
tion to make it clear that the Government must establish not only that
the document was prepared in the course of an ”investigation,” but
that disclosure of the document would ”interfere with enforcement
proceedings.” The Government asserts this privilege as to fifty-three
documents.
We need not decide whether any of these memoranda are of a sort
which would be protected if the Government had demonstrated – or
even conclusorily asserted – that there are presently active investiga-
tions underway or contemplated in each of these fifty-three cases. .
There is no reason to protect yellowing documents contained in long-
closed files. DOE made no effort whatsoever in the district court to
demonstrate that any of these cases are still under investigation or
being actively pursued. The district court was correct in concluding
100 CHAPTER 2. TRADE SECRET
that DOE had failed generally to meet its burden of establishing the
prerequisites to invocation of Exemption 7.
Congressional Research Service
(2013)
The Protection of Classified Information: The Legal Framework
Congress has directed the President to establish procedures govern-
ing the access to classified material so that no person can gain such
access without having undergone a background check. With the au-
thority to determine classification standards vested in the President,
these standards tend to change whenever a new administration takes
control of the White House.
The present standards for classifying and declassifying informa-
Exec. Order No. 13526, 3 C.F.R. 298 tion were last amended on December 29, 2009. Under these stan-
(2009). dards, the President, Vice President, agency heads, and any other of-
ficials designated by the President may classify information upon a
determination that the unauthorized disclosure of such information
could reasonably be expected to damage national security. Such in-
formation must be owned by, produced by, or under the control of
the federal government, and must concern one of the following:
• military plans, weapons systems, or operations;
• foreign government information;
• intelligence activities, intelligence sources/methods, cryptol-
ogy;
• foreign relations or foreign activities of the United States, in-
cluding confidential sources;
• scientific, technological, or economic ma ers relating to na-
tional security;
• federal programs for safeguarding nuclear materials or facili-
ties;
• vulnerabilities or capabilities of national security systems; or
• weapons of mass destruction.
Information may be classified at one of three levels based on the
amount of danger that its unauthorized disclosure could reasonably
be expected to cause to national security. Information is classified
as ”Top Secret” if its unauthorized disclosure could reasonably be
expected to cause ”exceptionally grave damage” to national secu-
rity. The standard for ”Secret” information is ”serious damage” to
national security, while for ”confidential” information the standard is
”damage” to national security. Significantly, for each level, the orig-
inal classifying officer must identify or describe the specific danger
potentially presented by the information’s disclosure. In case of sig-
nificant doubt as to the need to classify information or the level of
classification appropriate, the information is to remain unclassified
H. GOVERNMENT SECRETS 101
or be classified at the lowest level of protection considered appropri-
ate.
The officer who originally classifies the information establishes
a date for declassification based upon the expected duration of the
information’s sensitivity. If the office cannot set an earlier declassifi-
cation date, then the information must be marked for declassification
in 10 years’ time or 25 years, depending on the sensitivity of the in-
formation. The deadline for declassification can be extended if the
threat to national security still exists.
Classified information is required to be declassified ”as soon as
it no longer meets the standards for classification.” The original clas-
sifying agency has the authority to declassify information when the
public interest in disclosure outweighs the need to protect that infor-
mation. On December 31, 2006, and every year thereafter, all informa-
tion that has been classified for 25 years or longer and has been deter-
mined to have ”permanent historical value” under Title 44 of the U.S.
Code will be automatically declassified, although agency heads can
exempt from this requirement classified information that continues
to be sensitive in a variety of specific areas.
Access to classified information is generally limited to those who
demonstrate their eligibility to the relevant agency head, sign a
nondisclosure agreement, and have a need to know the information.
The need-to-know requirement can be waived, however, for former
Presidents and Vice Presidents, historical researchers, and former
policy-making officials who were appointed by the President or Vice
President. The information being accessed may not be removed from
the controlling agency’s premises without permission. Each agency
is required to establish systems for controlling the distribution of clas-
sified information.
Under E.O. 13526, each respective agency is responsible for main-
taining control over classified information it originates and is respon-
sible for establishing uniform procedures to protect classified infor-
mation and automated information systems in which classified in-
formation is stored or transmi ed. Agencies that receive informa-
tion classified elsewhere are not permi ed to transfer the informa-
tion further without approval from the classifying agency. Persons
authorized to disseminate classified information outside the execu-
tive branch are required to ensure it receives protection equivalent to
those required internally.
Generally, federal law prescribes a prison sentence of no more
than a year and/or a $1,000 fine for officers and employees of the fed-
eral government who knowingly remove classified material without
the authority to do so and with the intention of keeping that material
at an unauthorized location. Stiffer penalties – fines of up to $10,000
and imprisonment for up to 10 years – a ach when a federal em-
102 CHAPTER 2. TRADE SECRET
ployee transmits classified information to anyone that the employee
has reason to believe is an agent of a foreign government. A fine
and a 10-year prison term also await anyone, government employee
or not, who publishes, makes available to an unauthorized person,
or otherwise uses to the United States’ detriment classified informa-
tion regarding the codes, cryptography, and communications intelli-
gence utilized by the United States or a foreign government. Finally,
the disclosure of classified information that discloses any informa-
tion identifying a covert agent, when done intentionally by a person
with authorized access to such identifying information, is punishable
by imprisonment for up to 15 years. A similar disclosure by one who
learns the identity of a covert agent as a result of having authorized ac-
cess to classified information is punishable by not more than 10 years’
imprisonment. Under the same provision, a person who undertakes
a ”pa ern of activities intended to identify and expose covert agents”
with reason to believe such activities would impair U.S. foreign intel-
ligence activities, and who then discloses the identities uncovered as
a result is subject to three years’ imprisonment, whether or not viola-
tor has access to classified information.
In addition to the criminal penalties outlined above, the executive
branch employs numerous means of deterring unauthorized disclo-
sures by government personnel using administrative measures based
on terms of employment contracts. The agency may impose disci-
plinary action or revoke a person’s security clearance. The revocation
of a security clearance is usually not reviewable by the Merit System
Protection Board and may mean the loss of government employment.
Government employees may be subject to monetary penalties for dis-
closing classified information. Violators of the Espionage Act and the
Atomic Energy Act provisions may be subject to loss of their retire-
ment pay.
Agencies also rely on contractual agreements with employees,
who typically must sign non-disclosure agreements prior to obtain-
ing access to classified information, sometimes agreeing to submit
all materials that the employee desires to publish to a review by the
agency. The Supreme Court enforced such a contract against a for-
mer employee of the Central Intelligence Agency (CIA), upholding
the government’s imposition of a constructive trust on the profits of
a book the employee sought to publish without first submi ing it to
Snepp v. United States, 444 U.S. 507 CIA for review.
(1980)
Under some circumstances, the government can also use injunc-
tions to prevent disclosures of information. The courts have gener-
ally upheld injunctions against former employees’ publishing infor-
mation they learned through access to classified information. The
Supreme Court also upheld the State Department’s revocation of
passports for overseas travel by persons planning to expose U.S.
H. GOVERNMENT SECRETS 103
covert intelligence agents, despite the fact that the purpose was to
disrupt U.S. intelligence activities rather than to assist a foreign gov-
ernment. Haig v. Agee, 453 U.S. 280 (1981).
As noted above, E.O. 13526 sets the official procedures for the de-
classification of information. Once information is declassified, it may
be released to persons without a security clearance. Leaks, by con-
trast, might be defined as the release of classified information to per-
sons without a security clearance, typically journalists. Recent high-
profile leaks of information regarding sensitive covert operations in
news stories that seemed to some to portray the Obama Administra-
tion in a favorable light raised questions regarding the practice of
“instant declassification,” or whether disclosure of classified informa-
tion to journalists may ever be said to be an “authorized disclosure”
by a senior official.
The processes for declassification set forth in E.O. 13526 seem to
presuppose that agencies and classifying officials will not have any
need or desire to disclose classified information in their possession
other than to comply with the regulations. Yet it has long been noted
that there seems to be an informal process for “instant declassifica-
tion” of information whose release to the public serves an immediate
need.
As a practical ma er, there is li le to stop agency heads and other
high-ranking officials from releasing classified information to per-
sons without a security clearance when it is seen as suiting govern-
ment needs. The A orney General has prosecutorial discretion to
choose which leaks to prosecute. If in fact a case can be made that
a senior official has made or authorized the disclosure of classified
information, successful prosecution under current laws may be im-
possible because the scienter requirement (i.e., guilty state of mind)
is not likely to be met.
Executive branch policy appears to treat an official disclosure as
a declassifying event, while non- a ributed disclosures have no ef-
fect on the classification status of the information. For example, the
Department of Defense instructs agency officials, in the event that
classified information appears in the media, to neither confirm nor
deny the accuracy of the information.
Phillippi v. Central Intelligence Agency
546 F.2d 1009 (D.C. Cir. 1976)
This is an action under the Freedom of Information Act, in which
plaintiff-appellant seeks to compel the Central Intelligence Agency
to disclose certain records alleged to be in its possession concerning
its relationship with the Hughes Glomar Explorer.
In March 1975 several news organizations published stories pur-
porting to describe a secret operation conducted by the United States.
The central figure in these stories was the Hughes Glomar Explorer., a
104 CHAPTER 2. TRADE SECRET
large vessel publicly listed as a research ship owned and operated by
the Summa Corporation. According to the stories, the ship’s actual
owner and operator was the Government of the United States.
Following publication of these stories, other stories described the
alleged efforts of the CIA to convince the news media not to make
public what they had learned about the Glomar Explorer. The la er
stories interested appellant, a journalist, and she filed a FOIA request
for all Agency records relating to the reported contacts with the me-
dia. That request was denied on two grounds. First, the Agency
claimed that ”any records that might exist which reveal any CIA con-
nection with or interest in the activities of the Glomar Explorer; and,
indeed, any data that might reveal the existence of any such records”
would be classified and therefore exempt from disclosure. Second,
the Agency stated that
the fact of the existence or non-existence of the records you
request would relate to information pertaining to intelli-
gence sources and methods which the Director of Central
Intelligence has the responsibility to protect from unau-
thorized disclosure in accordance with the National Secu-
50 U.S.C. § 403(d)(3) rity Act of 1947.
We are dealing with a case in which the Agency has refused to con-
firm or deny the existence of materials requested under the FOIA.
In effect, the situation is as if appellant had requested and been re-
fused permission to see a document which says either ”Yes, we have
records related to contacts with the media concerning the Glomar Ex-
plorer” or ”No, we do not have any such records.” On appeal appel-
lant does not assert that the Government may never claim that na-
tional security considerations require it to refuse to disclose whether
or not requested documents exist. Rather, her principal argument,
and the only question we decide, is that the Agency should have been
required to support its position on the basis of the public record.
It is clear that the FOIA contemplates that the courts will resolve
fundamental issues in contested cases on the basis of in camera ex-
aminations of the relevant documents. Appellant maintains that this
authority does not extend to in camera examination of affidavits, the
procedure used below. In the peculiar context of this case we must re-
ject this contention. When the Agency’s position is that it can neither
confirm nor deny the existence of the requested records, there are no
relevant documents for the court to examine other than the affidavits
which explain the Agency’s refusal. Therefore, to fulfill its congres-
sionally imposed obligation to make a de novo determination of the
propriety of a refusal to provide information in response to a FOIA
request the District Court may have to examine classified affidavits
in camera and without participation by plaintiff’s counsel.
H. GOVERNMENT SECRETS 105
Before adopting such a procedure, however, the District Court
should a empt to create as complete a public record as is possible.
Adapting these procedures to the present case would require the
Agency to provide a public affidavit explaining in as much detail as
is possible the basis for its claim that it can be required neither to
confirm nor to deny the existence of the requested records.[7] The
Agency’s arguments should then be subject to testing by appellant,
who should be allowed to seek appropriate discovery when neces-
sary to clarify the Agency’s position or to identify the procedures by
which that position was established. Only after the issues have been
identified by this process should the District Court, if necessary, con-
sider arguments or information which the Agency is unable to make
public.
106 CHAPTER 2. TRADE SECRET
3
Patent
United States Constitution
art. I, § 8, cl. 8
The Congress shall have Power … To promote the Progress of Science Looking at these cases is much like
and useful Arts, by securing for limited Times to Authors and Inven- looking at a wonderful machine. But,
tors the exclusive Right to their respective Writings and Discoveries. of course, when looking at a beautiful
piece of machinery that functions like a
Patent law provides exclusive rights over new and useful inven-
clock or like clockwork, the next question
tions. Although it structure has shifted over time, the modern syn- might be whether this wonderful
thesis of patent law (appropriately enough) is an intricately interlock- precision instrument bears any relation
ing doctrinal machine. The mainspring of this system is the claim: a to reality.
precise statement of the technologies over which the inventor asserts —Dan L. Burk, Biotechnology in the
Federal Circuit: A Clockwork Lemon", 46
rights. The point of of patent prosecution is to generate appropriately Ariz. L. Rev. 441 (2004)
clear claim language that covers (or ”reads on”) what the inventor ac- The name of the game is the claim.
tually invented; patent infringement is directed to comparing claims —Giles S. Rich
with the defendant’s product or process. As we will see, patent law No economist, on the basis of present
uses a handful of basic concepts – e.g., ”prior art reference,” ”the per- knowledge, could possibly state with cer-
son of ordinary skill in the art,” and ”equivalent” – but it uses them tainty that the patent system, as it now
operates, confers a net benefit or a net
again and again. The key to understanding patent law is to pay at-
loss upon society. If we did not have a
tention to these recurring concepts. patent system, it would be irresponsible,
Why patent law? Three stories are usually advanced, two of on the basis of our present knowledge
which should already be familiar. It is said that patent law serves of its economic consequences, to recom-
an innovation function by giving incentives that enable investors to mend instituting one. But since we have
had a patent system for a long time, it
recoup their investment and a contracting function by enabling them
would be irresponsible, on the basis of
to commercialize their inventions without fear of being ripped off by our current knowledge, to recommend
business partners or imitated by competitors. But patent law also is abolishing it.
designed to serve a disclosure function: it requires inventors to make —Fritz Machlup
public significant information about how their inventions work, and The leading patent treatises are Donald
multiple doctrines subtly push actors toward greater disclosure. S. Chisum, Chisum on Patents (Matthew
Bender, on Lexis), R. Carl Moy, Moy's
Walker on Patents (Thomson Reuters,
on Westlaw), and Robert C. Faber, Faber
on Mechanics of Patent Claim Drafting
(PLI, on Bloomberg Law).
108 CHAPTER 3. PATENT
A Subject Matter
Patent Act
35 U.S.C. § 101
Whoever invents or discovers any new and useful process, machine,
Inventions patentable manufacture, or composition of ma er, or any new and useful im-
provement thereof, may obtain a patent therefor, subject to the con-
ditions and requirements of this title.
As interpreted by the courts, this section imposes two conditions on
patentability: utility and statutory subject ma er. It is conventional
to begin with statutory subject ma er. We begin with utility.
1 Utility
Utility was at one time a subject ma er exclusion from patentability.
No longer. But it still does some important work as a threshold con-
dition, which can significantly affect the timing of patentability.
Juicy Whip, Inc. v. Orange Bang, Inc.
185 F.3d 1364 (Fed. Cir. 1999)
I
Juicy Whip, Inc., is the assignee of United States Patent No. 5,575,405,
which is entitled “Post-Mix Beverage Dispenser With an Associated
Simulated Display of Beverage.” A “post-mix” beverage dispenser
stores beverage syrup concentrate and water in separate locations un-
til the beverage is ready to be dispensed. The syrup and water are
mixed together immediately before the beverage is dispensed, which
is usually after the consumer requests the beverage. In contrast, in a
“pre-mix” beverage dispenser, the syrup concentrate and water are
pre-mixed and the beverage is stored in a display reservoir bowl un-
til it is ready to be dispensed. The display bowl is said to stimulate
impulse buying by providing the consumer with a visual beverage
display. A pre-mix display bowl, however, has a limited capacity and
is subject to contamination by bacteria. It therefore must be refilled
and cleaned frequently.
The invention claimed in the ‘405 patent is a post-mix beverage
dispenser that is designed to look like a pre-mix beverage dispenser.
The claims require the post-mix dispenser to have a transparent bowl
that is filled with a fluid that simulates the appearance of the dis-
pensed beverage and is resistant to bacterial growth. The claims also
require that the dispenser create the visual impression that the bowl
is the principal source of the dispensed beverage, although in fact the
A. SUBJECT MATTER 109
beverage is mixed immediately before it is dispensed, as in conven-
tional post-mix dispensers.
The District Court concluded that the invention lacked utility be-
cause its purpose was to increase sales by deception, i.e., through
imitation of another product. The court explained that the purpose
of the invention “is to create an illusion, whereby customers believe
that the fluid contained in the bowl is the actual beverage that they
are receiving, when of course it is not.” Although the court acknowl-
edged Juicy Whip’s argument that the invention provides an accurate
representation of the dispensed beverage for the consumer’s benefit
while eliminating the need for retailers to clean their display bowls,
the court concluded that those claimed reasons for the patent’s utility
“are not independent of its deceptive purpose, and are thus insuffi-
cient to raise a disputed factual issue to present to a jury.”
II
The threshold of utility is not high: An invention is “useful” under
section 101 if it is capable of providing some identifiable benefit.
To be sure, since Justice Story’s opinion in Lowell v. Lewis, it has Lowell: 15 F. Cas. 1018 (C.C.D. Mass.
been stated that inventions that are “injurious to the well-being, good 1817)
policy, or sound morals of society” are unpatentable. As examples of
such inventions, Justice Story listed “a new invention to poison peo-
ple, or to promote debauchery, or to facilitate private assassination.”
Courts have continued to recite Justice Story’s formulation, but the
principle that inventions are invalid if they are principally designed
to serve immoral or illegal purposes has not been applied broadly in
recent years. For example, years ago courts invalidated patents on
gambling devices on the ground that they were immoral, but that is
no longer the law.
In holding the patent in this case invalid for lack of utility, the dis-
trict court relied on two Second Circuit cases dating from the early
years of this century, Rickard v. Du Bon, and Sco & Williams v. Aristo Rickard: 103 F. 868 (2d Cir. 1900)
Hosiery Co.. In the Rickard case, the court held invalid a patent on a Aristo Hosiery: 7 F.2d 1003 (2d Cir. 1925)
process for treating tobacco plants to make their leaves appear spot-
ted. At the time of the invention, according to the court, cigar smok-
ers considered cigars with spo ed wrappers to be of superior quality,
and the invention was designed to make unspo ed tobacco leaves ap-
pear to be of the spo ed – and thus more desirable – type. The court
noted that the invention did not promote the burning quality of the
leaf or improve its quality in any way; “the only effect, if not the only
object, of such treatment, is to spot the tobacco, and counterfeit the
leaf spo ed by natural causes.”
The Aristo Hosiery case concerned a patent claiming a seamless
stocking with a structure on the back of the stocking that imitated a
seamed stocking. The imitation was commercially useful because at
110 CHAPTER 3. PATENT
US. Patent Nov. 19, 1996 Sheet 1 of 3 5,575,405
55%,. K55
W
/
9Q
as? /
U.S. Patent No. 5,575,405, Post-Mix Beverage Dispenser With an As-
sociated Simulated Display of Beverage.
A. SUBJECT MATTER 111
the time of the invention many consumers regarded seams in stock-
ings as an indication of higher quality. The court noted that the im-
itation seam did not “change or improve the structure or the utility
of the article,” and that the record in the case justified the conclusion
that true seamed stockings were superior to the seamless stockings
that were the subject of the patent. “At best,” the court stated, “the
seamless stocking has imitation marks for the purposes of deception,
and the idea prevails that with such imitation the article is more sal-
able.” That was not enough, the court concluded, to render the inven-
tion patentable.
We decline to follow Rickard and Aristo Hosiery, as we do not re-
gard them as representing the correct view of the doctrine of utility
under the Patent Act of 1952. The fact that one product can be altered
to make it look like another is in itself a specific benefit sufficient to
satisfy the statutory requirement of utility.
It is not at all unusual for a product to be designed to appear to
viewers to be something it is not. For example, cubic zirconium is
designed to simulate a diamond, imitation gold leaf is designed to
imitate real gold leaf, synthetic fabrics are designed to simulate ex-
pensive natural fabrics, and imitation leather is designed to look like
real leather. In each case, the invention of the product or process
that makes such imitation possible has “utility” within the meaning
of the patent statute, and indeed there are numerous patents directed
toward making one product imitate another. See, e.g., U.S. Pat. No.
5,762,968 (method for producing imitation grill marks on food with-
out using heat); U.S. Pat. No. 5,899,038 (laminated flooring imitating
wood); U.S. Pat. No. 5,571,545 (imitation hamburger). Much of the
value of such products resides in the fact that they appear to be some-
thing they are not. Thus, in this case the claimed post-mix dispenser
meets the statutory requirement of utility by embodying the features
of a post-mix dispenser while imitating the visual appearance of a
pre-mix dispenser.
The fact that customers may believe they are receiving fluid di-
rectly from the display tank does not deprive the invention of utility.
Orange Bang has not argued that it is unlawful to display a repre-
sentation of the beverage in the manner that fluid is displayed in the
reservoir of the invention, even though the fluid is not what the cus-
tomer will actually receive. Moreover, even if the use of a reservoir
containing fluid that is not dispensed is considered deceptive, that is
not by itself sufficient to render the invention unpatentable. The re-
quirement of “utility” in patent law is not a directive to the Patent and
Trademark Office or the courts to serve as arbiters of deceptive trade
practices. Other agencies, such as the Federal Trade Commission and
the Food and Drug Administration, are assigned the task of protect-
ing consumers from fraud and deception in the sale of food prod-
112 CHAPTER 3. PATENT
Watson: 517 F.2d 465 (C.C.P.A. 1975) ucts. Cf. In re Watson (stating that it is not the province of the Patent
Office to determine, under section 101, whether drugs are safe). As
the Supreme Court put the point more generally, “Congress never in-
tended that the patent laws should displace the police powers of the
States, meaning by that term those powers by which the health, good
order, peace and general welfare of the community are promoted.”
Webber: 103 U.S. (13 Otto) 344 (1880) Webber v. Virginia.
"The patent for a dynamite powder Of course, Congress is free to declare particular types of inven-
does not prevent the State from pre- tions unpatentable for a variety of reasons, including deceptiveness.
scribing the conditions of its manufac-
Cf. 42 U.S.C. § 2181(a) (exempting from patent protection inventions
ture, storage, and sale, so as to protect
the community from the danger of ex- useful solely in connection with special nuclear material or atomic
plosion. A patent for the manufacture weapons). Until such time as Congress does so, however, we find no
and sale of a deadly poison does not basis in section 101 to hold that inventions can be ruled unpatentable
lessen the right of the State to control for lack of utility simply because they have the capacity to fool some
its handling and use."
members of the public. The district court therefore erred in holding
---Webber
that the invention of the ‘405 patent lacks utility because it deceives
the public through imitation in a manner that is designed to increase
product sales.
Manual of Patent Examination Procedure (Rev. Nov. 2013)
§ 2107
A claimed invention must have a specific and substantial utility. This
Guidelines for Examination of Applica- requirement excludes “throw-away,” “insubstantial,” or “nonspe-
tions for Compliance with the Utility Re- cific” utilities, such as the use of a complex invention as landfill.
quirement Credibility is assessed from the perspective of one of ordinary
skill in the art in view of the disclosure and any other evidence of
record (e.g., test data, affidavits or declarations from experts in the art,
patents or printed publications) that is probative of the applicant’s
assertions. An applicant need only provide one credible assertion of
specific and substantial utility for each claimed invention to satisfy
the utility requirement.
§ 2107.01 I. S S R
General Principles Governing Utility Re-
Courts have recognized that the term “useful” used with reference
jections
to the utility requirement can be a difficult term to define. Where an
applicant has set forth a specific and substantial utility, courts have
been reluctant to uphold a rejection under 35 U.S.C. § 101 solely on
the basis that the applicant’s opinion as to the nature of the specific
and substantial utility was inaccurate.
Practical considerations require the Office to rely on the inventor’s
understanding of his or her invention in determining whether and in
what regard an invention is believed to be “useful.” Because of this,
Office personnel should focus on and be receptive to assertions made
by the applicant that an invention is “useful” for a particular reason.
A. SUBJECT MATTER 113
A. Specific Utility
A “specific utility” is specific to the subject ma er claimed and can
“provide a well-defined and particular benefit to the public.” In re Fisher: 421 F.3d 1365 (Fed. Cir. 2005)
Fisher. This contrasts with a general utility that would be applicable
to the broad class of the invention. Office personnel should distin-
guish between situations where an applicant has disclosed a specific
use for or application of the invention and situations where the ap-
plicant merely indicates that the invention may prove useful without
identifying with specificity why it is considered useful. For example,
indicating that a compound may be useful in treating unspecified
disorders, or that the compound has “useful biological” properties,
would not be sufficient to define a specific utility for the compound.
Similarly, a claim to a polynucleotide whose use is disclosed simply
as a “gene probe” or “chromosome marker” would not be considered
to be specific in the absence of a disclosure of a specific DNA target.
See Fisher (“Any EST [expressed sequence tag] transcribed from any
gene in the maize genome has the potential to perform any one of the
alleged uses. Nothing about applicant’s seven alleged uses set the
five claimed ESTs apart from the more than 32,000 ESTs disclosed in
the application or indeed from any EST derived from any organism.
Accordingly, we conclude that applicant has only disclosed general
uses for its claimed ESTs, not specific ones that satisfy § 101.”). A gen-
eral statement of diagnostic utility, such as diagnosing an unspecified
disease, would ordinarily be insufficient absent a disclosure of what
condition can be diagnosed. Contrast the situation where an appli-
cant discloses a specific biological activity and reasonably correlates
that activity to a disease condition. Assertions falling within the la er
category are sufficient to identify a specific utility for the invention.
Assertions that fall in the former category are insufficient to define a
specific utility for the invention, especially if the assertion takes the
form of a general statement that makes it clear that a “useful” inven-
tion may arise from what has been disclosed by the applicant.
B. Substantial Utility
“[A]n application must show that an invention is useful to the pub-
lic as disclosed in its current form, not that it may prove useful at
some future date after further research. Simply put, to satisfy the
‘substantial’ utility requirement, an asserted use must show that the
claimed invention has a significant and presently available benefit to
the public.” Fisher. The claims at issue in fisher were directed to ex-
pressed sequence tags (ESTs), which are short nucleotide sequences
that can be used to discover what genes and downstream proteins are
expressed in a cell. The court held that “the claimed ESTs can be used
only to gain further information about the underlying genes and the
114 CHAPTER 3. PATENT
proteins encoded for by those genes. The claimed ESTs themselves
are not an end of [applicant’s] research effort, but only tools to be used
along the way in the search for a practical utility. Applicant does not
identify the function for the underlying protein-encoding genes. Ab-
sent such identification, we hold that the claimed ESTs have not been
researched and understood to the point of providing an immediate,
well-defined, real world benefit to the public meriting the grant of a
patent.” Thus a “substantial utility” defines a “real world” use. Utili-
ties that require or constitute carrying out further research to identify
or reasonably confirm a “real world” context of use are not substan-
tial utilities. For example, both a therapeutic method of treating a
known or newly discovered disease and an assay method for identi-
fying compounds that themselves have a “substantial utility” define
a “real world” context of use. An assay that measures the presence of
a material which has a stated correlation to a predisposition to the on-
set of a particular disease condition would also define a “real world”
context of use in identifying potential candidates for preventive mea-
sures or further monitoring. On the other hand, the following are
examples of situations that require or constitute carrying out further
research to identify or reasonably confirm a “real world” context of
use and, therefore, do not define “substantial utilities”:
(A) Basic research such as studying the properties of the claimed
product itself or the mechanisms in which the material is in-
volved;
(B) A method of treating an unspecified disease or condition;
(C) A method of assaying for or identifying a material that itself has
no specific and/or substantial utility;
(D) A method of making a material that itself has no specific, sub-
stantial, and credible utility; and
(E) A claim to an intermediate product for use in making a final
product that has no specific, substantial and credible utility.
Office personnel must be careful not to interpret the phrase “imme-
diate benefit to the public” or similar formulations in other cases to
mean that products or services based on the claimed invention must
be “currently available” to the public in order to satisfy the utility
requirement. Rather, any reasonable use that an applicant has iden-
tified for the invention that can be viewed as providing a public ben-
efit should be accepted as sufficient, at least with regard to defining
a “substantial” utility.
C. Research Tools
Some confusion can result when one a empts to label certain types
of inventions as not being capable of having a specific and substantial
A. SUBJECT MATTER 115
utility based on the se ing in which the invention is to be used. One
example is inventions to be used in a research or laboratory se ing.
Many research tools such as gas chromatographs, screening assays,
and nucleotide sequencing techniques have a clear, specific and un-
questionable utility (e.g., they are useful in analyzing compounds).
An assessment that focuses on whether an invention is useful only
in a research se ing thus does not address whether the invention is
in fact “useful” in a patent sense. Instead, Office personnel must dis-
tinguish between inventions that have a specifically identified sub-
stantial utility and inventions whose asserted utility requires further
research to identify or reasonably confirm. Labels such as “research
tool,” “intermediate” or “for research purposes” are not helpful in
determining if an applicant has identified a specific and substantial
utility for the invention.
II. W I I ; ”I ”U
An invention that is “inoperative” (i.e., it does not operate to produce
the results claimed by the patent applicant) is not a “useful” invention
in the meaning of the patent law. However, as the Federal Circuit has
stated, “[t]o violate 35 U.S.C. § 101 the claimed device must be totally
incapable of achieving a useful result.” Brooktree Corp.v.Advanced Mi- Brooktree: 977 F.2d 1555,(Fed. Cir.
cro Devices, Inc.. See also E.I. du Pont De Nemours and Co. v. Berkley 1992)
and Co. (“A small degree of utility is sufficient. The claimed inven- Berkley: 620 F.2d 1247 (8th Cir. 1980)
tion must only be capable of performing some beneficial function. An
invention does not lack utility merely because the particular embodi-
ment disclosed in the patent lacks perfection or performs crudely. A
commercially successful product is not required. Nor is it essential
that the invention accomplish all its intended functions or operate
under all conditions, partial success being sufficient to demonstrate
patentable utility. In short, the defense of non-utility cannot be sus-
tained without proof of total incapacity.”) If an invention is only par-
tially successful in achieving a useful result, a rejection of the claimed
invention as a whole based on a lack of utility is not appropriate.
Situations where an invention is found to be “inoperative” and
therefore lacking in utility are rare, and rejections maintained solely
on this ground by a Federal court even rarer. In many of these cases,
the utility asserted by the applicant was thought to be incredible in
the light of the knowledge of the art, or factually misleading when
initially considered by the Office. Other cases suggest that on ini-
tial evaluation, the Office considered the asserted utility to be incon-
sistent with known scientific principles or speculative at best as to
whether a ributes of the invention necessary to impart the asserted
utility were actually present in the invention. However cast, the un-
derlying finding by the court in these cases was that, based on the fac-
tual record of the case, it was clear that the invention could not and
116 CHAPTER 3. PATENT
did not work as the inventor claimed it did. Indeed, the use of many
labels to describe a single problem (e.g., a false assertion regarding
utility) has led to some of the confusion that exists today with regard
Consider U.S. Pat No. 6,960,975 B1 to a rejection based on the “utility” requirement. Examples of such
for a "Space Vehicle Propelled by the cases include: an invention asserted to change the taste of food us-
Pressure of Inflationary Vacuum State."
ing a magnetic field, a perpetual motion machine, a flying machine
Does it matter if the USPTO occasion-
ally issues a patent on a device that vio- operating on “flapping or flu er function,” a “cold fusion” process
lates the known laws of physics? for producing energy, a method for increasing the energy output of
fossil fuels upon combustion through exposure to a magnetic field,
uncharacterized compositions for curing a wide array of cancers, and
a method of controlling the aging process. These examples are fact
specific and should not be applied as a per se rule. Thus, in view of
the rare nature of such cases, Office personnel should not label an
asserted utility “incredible,” “speculative” or otherwise unless it is
clear that a rejection based on “lack of utility” is proper.
2 Statutory Subject Matter
Tun-Jen Chiang
2010 Wisc. L. Rev. 1353
The Rules and Standards of Patentable Subject Matter
A close examination of all of the patentable subject-ma er categories
reveals a clear distinction. Virtually all of the restrictions, save two,
have been in the nature of categorical rules. The two exceptions are
the closely-related (indeed, for all practical purposes, identical) prohi-
bitions on patenting “laws of nature” and “abstract ideas.” The laws
of nature and abstract ideas prohibitions account for almost the en-
tirety of patentable subject-ma er case law, and the consequent un-
certainty in the area. Section 101 thus contains a dichotomy: clear
exclusionary rules that have almost never caused administrative dif-
ficulty or litigation; and a vague scope limiting standard that has
caused tremendous difficulty and much litigation.
At present, there are two clear subject-ma er exclusions from
patentability: nuclear weapons and human organisms. Federal
statutes direct that ”No patent shall hereafter be granted for any in-
vention or discovery which is useful solely in the utilization of spe-
Nuclear weapons: 42 U.S.C. § 2181(a). cial nuclear material or atomic energy in an atomic weapon” and that
”Notwithstanding any other provision of law, no patent may issue on
Human organisms: America Invents a claim directed to or encompassing a human organism.” What poli-
Act § 33(a). cies do these exclusions express?
As for laws of nature and abstract ideas, the Supreme Court pro-
foundly shifted course in a series of four major decisions between
2010 and 2014. Three of them are excerpted in this book: Mayo here,
A. SUBJECT MATTER 117
Myriad in the biotechnology chapter, and CLS Bank in the software
chapter. (The fourth, Bilski, is discussed in CLS Bank.)
Mayo Collaborative v. Prometheus Labs
132 S. Ct. 1289 (2012)
Section 101 of the Patent Act defines patentable subject ma er. The
Court has long held that this provision contains an important implicit
exception. Laws of nature, natural phenomena, and abstract ideas are
not patentable.
I
A
The patents before us concern the use of thiopurine drugs in the treat-
ment of autoimmune diseases, such as Crohn’s disease and ulcerative
colitis. When a patient ingests a thiopurine compound, his body me-
tabolizes the drug, causing metabolites to form in his bloodstream.
Because the way in which people metabolize thiopurine compounds
varies, the same dose of a thiopurine drug affects different people
differently, and it has been difficult for doctors to determine whether
for a particular patient a given dose is too high, risking harmful side
effects, or too low, and so likely ineffective.
At the time the discoveries embodied in the patents were made,
scientists already understood that the levels in a patient’s blood of
certain metabolites, including, in particular, 6-thioguanine and its nu-
cleotides (6-TG) and 6-methyl-mercaptopurine (6-MMP), were corre-
lated with the likelihood that a particular dosage of a thiopurine drug
could cause harm or prove ineffective. But those in the field did not
know the precise correlations between metabolite levels and likely
harm or ineffectiveness. The patent claims at issue here set forth pro-
cesses embodying researchers’ findings that identified these correla-
tions with some precision.
More specifically, the patents – U.S. Patent No. 6,355,623 (623
patent) and U.S. Patent No. 6,680,302 (302 patent) – embody findings
that concentrations in a patient’s blood of 6-TG or of 6-MMP metabo-
lite beyond a certain level (400 and 7000 picomoles per 8 × 108 red
blood cells, respectively) indicate that the dosage is likely too high
for the patient, while concentrations in the blood of 6-TG metabolite
lower than a certain level (about 230 picomoles per 8 × 108 red blood
cells) indicate that the dosage is likely too low to be effective.
The patent claims seek to embody this research in a set of pro-
cesses. Like the Federal Circuit we take as typical claim 1 of the 623
Patent, which describes one of the claimed processes as follows:
A method of optimizing therapeutic efficacy for treatment
of an immune-mediated gastrointestinal disorder, com-
prising:
118 CHAPTER 3. PATENT
(a) administering a drug providing 6-thioguanine to a
subject having said immune-mediated gastrointesti-
nal disorder; and
(b) determining the level of 6-thioguanine in said sub-
ject having said immune-mediated gastrointestinal
disorder,
wherein the level of 6-thioguanine less than about 230
pmol per 8×108 red blood cells indicates a need to increase
the amount of said drug subsequently administered to
said subject and
wherein the level of 6-thioguanine greater than about 400
pmol per 8 × 108 red blood cells indicates a need to de-
crease the amount of said drug subsequently adminis-
tered to said subject.”
B
Respondent, Prometheus Laboratories, Inc. (Prometheus), is the sole
and exclusive licensee of the 623 and 302 patents. It sells diagnostic
tests that embody the processes the patents describe. For some time
petitioners, Mayo Clinic Rochester and Mayo Collaborative Services
(collectively Mayo), bought and used those tests. But in 2004 Mayo
announced that it intended to begin using and selling its own test–
a test using somewhat higher metabolite levels to determine toxicity
(450 pmol per 8 × 108 for 6-TG and 5700 pmol per 8 × 108 for 6-MMP).
Prometheus then brought this action claiming patent infringement.
The District Court found that Mayo’s test infringed claim 7 of the
623 patent. In interpreting the claim, the court accepted Prometheus’
view that the toxicity-risk level numbers in Mayo’s test and the claim
were too similar to render the tests significantly different. The num-
ber Mayo used (450) was too close to the number the claim used (400)
to ma er given appropriate margins of error. The District Court also
accepted Prometheus’ view that a doctor using Mayo’s test could vio-
late the patent even if he did not actually alter his treatment decision
in the light of the test. In doing so, the court construed the claim’s lan-
guage, ”indicates a need to decrease” (or ”to increase”), as not limited
to instances in which the doctor actually decreases (or increases) the
dosage level where the test results suggest that such an adjustment is
advisable.
II
Prometheus’ patents set forth laws of nature – namely, relationships
between concentrations of certain metabolites in the blood and the
likelihood that a dosage of a thiopurine drug will prove ineffective
A. SUBJECT MATTER 119
or cause harm. Claim 1, for example, states that if the levels of 6-TG
in the blood (of a patient who has taken a dose of a thiopurine drug)
exceed about 400 pmol per 8 × 108 red blood cells, then the admin-
istered dose is likely to produce toxic side effects. While it takes a
human action (the administration of a thiopurine drug) to trigger a
manifestation of this relation in a particular person, the relation it-
self exists in principle apart from any human action. The relation is a
consequence of the ways in which thiopurine compounds are metab-
olized by the body – entirely natural processes. And so a patent that
simply describes that relation sets forth a natural law.
The question before us is whether the claims do significantly more
than simply describe these natural relations. To put the ma er more
precisely, do the patent claims add enough to their statements of the
correlations to allow the processes they describe to qualify as patent-
eligible processes that apply natural laws? We believe that the answer
to this question is no.
A
If a law of nature is not patentable, then neither is a process reciting
a law of nature, unless that process has additional features that pro-
vide practical assurance that the process is more than a drafting effort
designed to monopolize the law of nature itself. A patent, for exam-
ple, could not simply recite a law of nature and then add the instruc-
tion ”apply the law.” Einstein, we assume, could not have patented
his famous law by claiming a process consisting of simply telling lin-
ear accelerator operators to refer to the law to determine how much
energy an amount of mass has produced (or vice versa). Nor could
Archimedes have secured a patent for his famous principle of flota-
tion by claiming a process consisting of simply telling boat builders
to refer to that principle in order to determine whether an object will
float.
What else is there in the claims before us? The process that each
claim recites tells doctors interested in the subject about the corre-
lations that the researchers discovered. In doing so, it recites an ”ad-
ministering” step, a ”determining” step, and a ”wherein” step. These
additional steps are not themselves natural laws but neither are they
sufficient to transform the nature of the claim.
First, the ”administering” step simply refers to the relevant audi-
ence, namely doctors who treat patients with certain diseases with
thiopurine drugs. That audience is a pre-existing audience; doctors
used thiopurine drugs to treat patients suffering from autoimmune
disorders long before anyone asserted these claims. In any event, the
prohibition against patenting abstract ideas cannot be circumvented
by a empting to limit the use of the formula to a particular techno-
logical environment.
120 CHAPTER 3. PATENT
Second, the ”wherein” clauses simply tell a doctor about the rel-
evant natural laws, at most adding a suggestion that he should take
those laws into account when treating his patient. That is to say, these
clauses tell the relevant audience about the laws while trusting them
to use those laws appropriately where they are relevant to their de-
cisionmaking (rather like Einstein telling linear accelerator operators
about his basic law and then trusting them to use it where relevant).
Third, the ”determining” step tells the doctor to determine the
level of the relevant metabolites in the blood, through whatever pro-
cess the doctor or the laboratory wishes to use. As the patents state,
methods for determining metabolite levels were well known in the
art. Indeed, scientists routinely measured metabolites as part of their
investigations into the relationships between metabolite levels and
efficacy and toxicity of thiopurine compounds. Thus, this step tells
doctors to engage in well-understood, routine, conventional activity
previously engaged in by scientists who work in the field. Purely con-
ventional or obvious pre-solution activity is normally not sufficient to
transform an unpatentable law of nature into a patent-eligible appli-
cation of such a law. The prohibition against patenting abstract ideas
cannot be circumvented by adding insignificant post-solution activ-
A patent lawyer walks into a barber shop. ity.
The barber takes a look at the lawyer for Fourth, to consider the three steps as an ordered combination
a bit, and then says, “Ok, that’ll be $20.”
adds nothing to the laws of nature that is not already present when
The lawyer responds, “But you didn’t cut
my hair!” The barber replies, “That’s ‘in- the steps are considered separately. Anyone who wants to make use
significant post-solution activity.'" of these laws must first administer a thiopurine drug and measure the
Michael S. Kwun, Alice Tells a Joke, 19 resulting metabolite concentrations, and so the combination amounts
Green Bag 2d 329 (2016). Unfair? to nothing significantly more than an instruction to doctors to apply
the applicable laws when treating their patients.
The upshot is that the three steps simply tell doctors to gather
data from which they may draw an inference in light of the correla-
tions. To put the ma er more succinctly, the claims inform a relevant
audience about certain laws of nature; any additional steps consist
of well-understood, routine, conventional activity already engaged
in by the scientific community; and those steps, when viewed as a
whole, add nothing significant beyond the sum of their parts taken
separately. For these reasons we believe that the steps are not suffi-
cient to transform unpatentable natural correlations into patentable
Is there anything here that the inven- applications of those regularities.
tors could have patented with better
drafting, or were their claims unsal- Tax Planning Patent Problem
vageable?
You are staff counsel to Representative Helvering (R-IA), who has
read a number of newspaper articles on the growing phenomenon
of “tax planning patents.” These patents describe transactions de-
signed to help a company reduce the taxes it owes. For example, one
such patent describes dividing a real estate portfolio into a number
B. PROCEDURES 121
of shares held as tenancies in common subject to a master lease, in
which each holder receives guaranteed annual income and is subject
to repurchase at fair market value at a specified date, such that the
investments qualify for tax-deferred treatment under … you get the
picture.
The Representative has asked you to help her think through For purposes of evaluating an inven-
the policy and legal issues these patents raise. She wants to know tion under section 102 [novelty] or 103
[nonobviousness], any strategy for reduc-
whether they are valid under current law and whether they’re con-
ing, avoiding, or deferring tax liability,
tributing to tax evasion. If they’re problematic, she would like your whether known or unknown at the time
suggestions on possible legislative fixes (either to the Patent Act or to of the invention or application for patent,
the Internal Revenue Code). shall be deemed insufficient to differen-
tiate a claimed invention from the prior
art.
B Procedures America Invents Act § 14(a). What do
you think of this solution?
A patent (an example follows) has two jobs. It must describe the
scope of the owner’s rights in the invention. This is the job of the
claims. It must also disclose the invention in enough detail that others
could (if not for the patent) make use of it. This is the job of the speci-
fication. The process of patent prosecution is designed not just to check
that the invention is substantively eligible to be patented (discussed
in the next section), but also to ensure that the claims and specifica-
tion adequately carry out their jobs.
B. PROCEDURES 125
1 Claims
Patent Act
(b) Conclusion. – The specification shall conclude with one or more 35 U.S.C. § 112
claims particularly pointing out and distinctly claiming the sub- Specification
ject ma er which the inventor or a joint inventor regards as the
invention.
(c) Form. – A claim may be wri en in independent or, if the nature
of the case admits, in dependent or multiple dependent form.
(d) Reference in Dependent Forms. – A claim in dependent form shall
contain a reference to a claim previously set forth and then spec-
ify a further limitation of the subject ma er claimed. A claim in
dependent form shall be construed to incorporate by reference
all the limitations of the claim to which it refers.
a Indefiniteness
Nautlius, Inc. v. Biosig Instruments Inc.
134 S. Ct. 2120 (2014)
The Patent Act requires that a patent specification ”conclude with one
or more claims particularly pointing out and distinctly claiming the sub-
ject ma er which the applicant regards as [the] invention.” According
to the Federal Circuit, a patent claim passes the threshold so long as
the claim is ”amenable to construction,” and the claim, as construed,
is not ”insolubly ambiguous.” We conclude that the Federal Circuit’s
formulation, which tolerates some ambiguous claims but not others,
does not satisfy the statute’s definiteness requirement. In place of
the ”insolubly ambiguous” standard, we hold that a patent is invalid
for indefiniteness if its claims, read in light of the specification delin-
eating the patent, and the prosecution history, fail to inform, with
reasonable certainty, those skilled in the art about the scope of the
invention.
Freeny v. Apple Inc.
No.2:13–CV–00361–WCB, 2014 WL
[Patent No. 7,110,744 (“the ’744 patent”), described a single device 4294505 (E.D. Tex. Aug. 28, 2014)
that can communicate wirelessly with a variety of providers, such as
hotel systems, vehicle parking systems, and toll systems, using mul-
tiple frequencies. It claimed:
A communication unit connected to a public communi-
cation system, the communication unit capable of detect- For "public communication system,"
ing a plurality of wireless devices and servicing each of think "Internet"
the plurality of wireless devices by providing access to
126 CHAPTER 3. PATENT
the public communication system when the wireless de-
vices are within a predetermined proximity distance from
the communication unit, the communication unit com-
prising [various elements, including a] transceiver simul-
taneously communicating with at least two wireless de-
vices with different types of low power communication
signals.]
The final term in dispute for purposes of claim construction is the
term “low power communication signals.” The plaintiffs argue that
the term “low power communication signals” should be construed to
mean “signals having a power for transmission up to a maximum of
several hundred feet.” The defendant argues that the term is indefi-
nite because the words “low power” are wholly lacking in specificity.
While it is true that the patent does not define the term “low
power” with precision, precision is not required as long as the claim
language is as specific as is reasonably possible under the circum-
stances, and as long as a person of skill in the art would understand
the scope of the claims with reasonable certainty. The Federal Circuit
has frequently addressed claim language that was imprecise and has
frequently upheld claims containing similar language, based on the
commonsense observation that sometimes precision is impossible to
achieve, consistent with an accurate description of the full scope of
the invention. As the court has explained: “Definiteness problems
often arise when words of degree are used in a claim. That some
claim language may not be precise, however, does not automatically
Seattle Box: 731 F.2d 818 (Fed. Cir. render a claim invalid.” Sea le Box Co. v. Indus. Crating & Packing,
1984) Inc. (upholding claim using term “substantially equal to”). When a
word of degree is used, “the district court must determine whether
the patent’s specification provides some standard for measuring that
degree. The trial court must decide, that is, whether one of ordinary
skill in the art would understand what is claimed when the claim is
read in light of the specification.”
Indefiniteness is a legal determination; if the court concludes that
a person of ordinary skill in the art, with the aid of the specification,
would understand what is claimed, the claim is not indefinite. For
example, the term “substantially” has frequently been held not in-
definite if a person of ordinary skill can discern from the claims and
specification what the bounds of the claim are with reasonable cer-
tainty. [Cases cited found the terms ”about 0.06,” ”substantially pla-
nar,” ”to increase substantially,” ”not interfering substantially,” ”rel-
atively small,” ”substantially equal to,” ”closely approximate,” and
”about 5:1 to about 7:1” not indefinite.] On numerous occasions, dis-
trict courts, including this court, have held similarly imprecise claim
language not indefinite. [Cases cited found the phrases “substan-
B. PROCEDURES 127
tially collimated,” ”roughly the same,” ”low frequency forces,” ”low
hydroxyl ion content,” and ”low DC electrical voltage” not indefi-
nite.]
In pressing its indefiniteness argument, the defendant relies heav-
ily on the Supreme Court’s recent decision in Nautilus, which ad-
dressed the issue of indefiniteness and modified the test applied in
some prior Federal Circuit cases. The Nautilus Court held “a patent’s
claims, viewed in light of the specification and prosecution history,
[must] inform those skilled in the art about the scope of the inven-
tion with reasonable certainty.” Contrary to the defendant’s sugges-
tion, that standard does not render all of the prior Federal Circuit and
district court cases inapplicable, nor does it require that the claim lan-
guage in this case be held indefinite. The Supreme Court recognized
that “some modicum of uncertainty” is “the price of ensuring the ap-
propriate incentives for innovation,” and that because patents are di-
rected to persons of skill in the art, all that is required is that the patent
apprise such persons of the scope of the invention. Indeed, the Court
cited with approval Eibel Process Co. v. Minn. & Ontario Paper Co., Eibel: 261 U.S. 45 (1923)
where the Court upheld claim language requiring a wire to be placed
at a “high” or “substantial” elevation. That language, the Eibel Court
held, would be sufficiently clear in context for persons of skill in the
art to understand and therefore was not invalid for indefiniteness.
In light of the applicable caselaw, including the Nautilus case, the
Court concludes that the term “low power communication signals”
is not indefinite. The specification on several occasions refers to low
power signals as those that do not communicate farther than a few
hundred feet. See, e.g., ’744 patent, col. 32, ll. 29–31 (“low power
wireless link ... does not typically communicate farther than about
300 feet”); id., col. 35, ll. 50–51 (detection range of “say several hun-
dred feet”); id., col. 36, ll. 31–38 (wireless connection ranges “will
vary from several hundred feet to only several feet”); id., col. 39,
ll. 13–15 (transmissions possible “within several hundred feet” of a
communication unit); id., col. 7, ll. 4–8 (transceiver capable of com-
municating “up to at least a predetermined proximity distance such
as a hundred feet”); id., col. 13, ll. 49–52 (different signal strengths
designed for detection at 500 feet and 20 feet); id., col. 16, ll. 49–
51 (authorization distance set at 500 feet and 20 feet). Moreover, the
plaintiffs’ expert filed a declaration pointing to the references in the
patent to infrared signals, 900 MHz signals, 1.8 GHz signals, and 2.4
GHz signals as examples of different types of low power communi-
cation signals. He explained that a common characteristic of such
signals is the limited distance over which they can be transmi ed,
as discussed in the specification. One of ordinary skill in the art, he
explained, would understand from reading the ’744 specification that
the claim term “different types of low power communication signals”
128 CHAPTER 3. PATENT
means “different types of communication signals having a power for
transmission up to a maximum of several hundred feet.” The defen-
dant has not submi ed a contrary expert declaration on the issue of
indefiniteness.
Accordingly, the Court concludes that the term “low power com-
munication signals,” viewed in light of the specification, would be un-
derstood by persons of skill in the art with reasonable certainty. The
asserted claims in the ’744 patent are therefore not indefinite. Further-
more, in light of the discussion of low power communications in the
specification, the Court agrees with the plaintiffs that the term should
be interpreted to mean “communication signals having a power for
transmission of up to a maximum of several hundred feet.”
Datamize, LLC v. Plumtree Software, Inc.
417 F.3d 1342 (Fed. Cir. 2005)
[U.S. Patent No. 6,014,137], entitled “Electronic Kiosk Authoring Sys-
tem,” discloses a software program that allows a person to author
user interfaces for electronic kiosks. “The authoring system enables
the user interface for each individual kiosk to be customized quickly
and easily within wide limits of variation, yet subject to constraints
adhering the resulting interface to good standards of aesthetics and
user friendliness.” ‘137 patent, Abstract. [It claimed, in relevant part
(emphasis added):
In an electronic kiosk system ... a method for defining
custom interface screens ... said method comprising the
steps of: ... providing a plurality of pre-defined interface
screen element types, each element type defining a form
of element available for presentation on said custom inter-
face screens, wherein each said element type permits lim-
ited variation in its on-screen characteristics in conformity
with a desired uniform and aesthetically pleasing look and
feel for said interface screens on all kiosks of said kiosk
system ... .
Datamize, the patentee, argued that the term “aesthetically pleasing”
should be contrued to refer to the intent of a person practicing the
invention. That person must intend to create an aesthetically pleasing
interface screen; whether she succeeds is irrelevant.]
Datamize’s proposed construction of “aesthetically pleasing” in
the context of claim 1 is not reasonable for several reasons. First and
foremost, the plain meaning of the claim language requires that the
look and feel of interface screens actually be “aesthetically pleasing.”
That the uniform and “aesthetically pleasing” look and feel must also
be “desired” does not alter that fact.
Here Datamize has offered no objective definition identifying a
standard for determining when an interface screen is “aesthetically
B. PROCEDURES 129
pleasing.” In the absence of a workable objective standard, “aes-
thetically pleasing” does not just include a subjective element, it is
completely dependent on a person’s subjective opinion. To the ex-
tent Datamize argues that such a construction of “aesthetically pleas-
ing” does not render the phrase indefinite, we disagree. The scope of
claim language cannot depend solely on the unrestrained, subjective
opinion of a particular individual purportedly practicing the inven-
tion. Some objective standard must be provided in order to allow
the public to determine the scope of the claimed invention. Even if
the relevant perspective is that of the system creator, the identity of
who makes aesthetic choices fails to provide any direction regarding
the relevant question of how to determine whether that person suc-
ceeded in creating an “aesthetically pleasing” look and feel for inter-
face screens. A purely subjective construction of “aesthetically pleas-
ing” would not notify the public of the patentee’s right to exclude
since the meaning of the claim language would depend on the un-
predictable vagaries of any one person’s opinion of the aesthetics of
interface screens. While beauty is in the eye of the beholder, a claim
term, to be definite, requires an objective anchor. Thus, even if we
adopted a completely subjective construction of “aesthetically pleas-
ing,” this would still render the ‘137 patent invalid.
And while the description of an embodiment provides examples
of aesthetic features of screen displays that can be controlled by the
authoring system, it does not explain what selection of these features
would be “aesthetically pleasing.” Major aesthetic choices appar-
ently may include some aspect of bu on styles and sizes, window
borders, color combinations, and type fonts. The wri en descrip-
tion, however, provides no guidance to a person making aesthetic
choices such that their choices will result in an “aesthetically pleas-
ing” look and feel of an interface screen. For example, the specifica-
tion does not explain what factors a person should consider when se-
lecting a feature to include in the authoring system. Left unanswered
are questions like: which color combinations would be “aesthetically
pleasing” and which would not? And more generally, how does one
determine whether a color combination is “aesthetically pleasing”?
Again, one skilled in the art reading the specification is left with the
unhelpful direction to consult the subjective opinions of aesthetic de-
sign specialists, database specialists, and academic studies.
Simply put, the definition of “aesthetically pleasing” cannot de-
pend on an undefined standard. We therefore affirm the district
court’s grant of summary judgment of invalidity of all claims of the
‘137 patent.
130 CHAPTER 3. PATENT
b Claim Drafting
Catalina Marketing Intern. v. Coolsavings.com
289 F.3d 801 (Fed. Cir. 2002)
In general, a preamble limits the invention if it recites essential struc-
ture or steps, or if it is necessary to give life, meaning, and vitality to
the claim. Conversely, a preamble is not limiting where a patentee de-
fines a structurally complete invention in the claim body and uses the
preamble only to state a purpose or intended use for the invention.
Perhaps a hypothetical best illustrates these principles: Inventor
A invents a shoe polish for shining shoes (which, for the sake of exam-
ple, is novel, useful, and nonobvious). Inventor A receives a patent
having composition claims for shoe polish. Indeed, the preamble of
these hypothetical claims recites ”a composition for polishing shoes.”
Clearly, Inventor B could not later secure a patent with composition
claims on the same composition because it would not be novel. Upon
discovering, however, that the polish composition grows hair when
rubbed on bare human skin, Inventor B can likely obtain method
claims directed to the new use of the composition to grow hair.
Manual of Patent Examination Procedure (Rev. Aug. 2012)
MPEP § 2111.03
The transitional phrases “comprising”, “consisting essentially of”
Transitional Phrases and “consisting of” define the scope of a claim with respect to what
unrecited additional components or steps, if any, are excluded from
the scope of the claim. The determination of what is or is not excluded
by a transitional phrase must be made on a case-by-case basis in light
of the facts of each case.
The transitional term “comprising”, which is synonymous with
“including,” “containing,” or “characterized by,” is inclusive or
open-ended and does not exclude additional, unrecited elements or
Gillette: 405 F.3d 1367 (Fed. Cir. 2005) method steps. In Gille e Co. v. Energizer Holdings Inc., the court held
that a claim to “a safety razor blade unit comprising a guard, a cap,
and a group of first, second, and third blades” encompasses razors
with more than three blades because the transitional phrase “compris-
ing” in the preamble and the phrase “group of” are presumptively
open-ended. The transitional phrase “consisting of” excludes any el-
ement, step, or ingredient not specified in the claim. The transitional
phrase “consisting essentially of” limits the scope of a claim to the
specified materials or steps and those that do not materially affect
the basic and novel characteristic(s) of the claimed invention.
MPEP 2173.05(e)
A claim is indefinite when it contains words or phrases whose mean-
Lack of Antecedent Basis ing is unclear. The lack of clarity could arise where a claim refers to
“said lever” or “the lever,” where the claim contains no earlier recita-
B. PROCEDURES 131
tion or limitation of a lever and where it would be unclear as to what
element the limitation was making reference. Similarly, if two differ-
ent levers are recited earlier in the claim, the recitation of “said lever”
in the same or subsequent claim would be unclear where it is uncer-
tain which of the two levers was intended.
Alternative expressions are permi ed if they present no uncertainty MPEP 2173.05(h)
or ambiguity with respect to the question of scope or clarity of the Alternative Limitations
claims. A “Markush” claim recites a list of alternatively useable
species. A Markush claim is commonly forma ed as: “selected from
the group consisting of A, B, and C;” however, the phrase “Markush
claim” means any claim that recites a list of alternatively useable
species regardless of format. Inventions in metallurgy, refractories,
ceramics, pharmacy, pharmacology and biology are most frequently
claimed under the Markush formula but purely mechanical features
or process steps may also be claimed by using the Markush style of
claiming. It is improper to use the term “comprising” instead of “con-
sisting of.”
2 Disclosure
Patent Act
The specification shall contain a wri en description of the invention, 35 U.S.C. § 112(a)
and of the manner and process of making and using it, in such full, Specification
clear, concise, and exact terms as to enable any person skilled in the
art to which it pertains, or with which it is most nearly connected, The phrase "person skilled in the art"
to make and use the same, and shall set forth the best mode contem- and the related phrase "person hav-
ing ordinary skill in the art" from Sec-
plated by the inventor or joint inventor of carrying out the invention.
tion 103 are frequently abbreviated to
"PHOSITA." The PHOSITA is the hypo-
thetical reasonable person of patent
law.
This language has been interpreted by the courts to create three dis-
tinct disclosure requirements: enablement, wri en description, and best
mode. Of the three, enablement is the most practically significant.
a Enablement
O'Reilly v. Morse
56 U.S. 62 (1853)
[Morse sued O’Reilly for infringing his patent on the telegraph. The
Supreme Court found that Morse was the inventor of the technology
and found that O’Reilly’s ”Columbian Telegraph” infringed. But it
narrowed Morse’s patent by striking its now-famous eighth claim:]
132 CHAPTER 3. PATENT
Eighth. I do not propose to limit myself to the specific ma-
chinery or parts of machinery described in the foregoing
specification and claims; the essence of my invention be-
ing the use of the motive power of the electric or galvanic
current, which I call electro-magnetism, however devel-
oped for marking or printing intelligible characters, signs,
or le ers, at any distances, being a new application of that
power of which I claim to be the first inventor or discov-
erer.
It is impossible to misunderstand the extent of this claim. He claims
the exclusive right to every improvement where the motive power
is the electric or galvanic current, and the result is the marking or
printing intelligible characters, signs, or le ers at a distance.
If this claim can be maintained, it ma ers not by what process or
machinery the result is accomplished. For aught that we now know
some future inventor, in the onward march of science, may discover
a mode of writing or printing at a distance by means of the electric
or galvanic current, without using any part of the process or combi-
nation set forth in the plaintiff’s specification. His invention may be
less complicated –less liable to get out of orderl– ess expensive in con-
struction, and in its operation. But yet if it is covered by this patent
the inventor could not use it, nor the public have the benefit of it with-
out the permission of this patentee.
Nor is this all, while he shuts the door against inventions of other
persons, the patentee would be able to avail himself of new discov-
eries in the properties and powers of electro-magnetism which scien-
tific men might bring to light. For he says he does not confine his
claim to the machinery or parts of machinery, which he specifies; but
claims for himself a monopoly in its use, however developed, for the
purpose of printing at a distance. New discoveries in physical sci-
ence may enable him to combine it with new agents and new ele-
ments, and by that means a ain the object in a manner superior to
the present process and altogether different from it. And if he can
secure the exclusive use by his present patent he may vary it with ev-
ery new discovery and development of the science, and need place
no description of the new manner, process, or machinery, upon the
records of the patent office. And when his patent expires, the public
must apply to him to learn what it is. In fine he claims an exclusive
right to use a manner and process which he has not described and
indeed had not invented, and therefore could not describe when he
obtained his patent. The court is of opinion that the claim is too broad,
and not warranted by law.
Wyeth & Cordis Corp. v. Abbott Labs.
720 F.3d 1380 (Fed. Cir. 2013)
B. PROCEDURES 133
Wyeth and Cordis Corporation (Wyeth) appeal from the U.S. District
Court for the District of New Jersey’s grant of summary judgment
that claims 1 and 2 of U.S. Patent No. 5,516,781 (’781 patent) and claim
1 of U.S. Patent No. 5,563,146 (’146 patent) are invalid for nonenable-
ment. Because we hold that there is no genuine issue of material fact
that the specification does not enable one of ordinary skill to practice
the asserted claims without undue experimentation, we affirm.
B
The patents-in-suit relate to the use of rapamycin for the treatment
and prevention of restenosis, which is the renarrowing of an artery.
To open a blocked artery, a physician guides a balloon catheter to the
site of accumulated plaque, and then inflates the balloon to crush the
plaque. As the balloon inflates, however, it may cause injury to the
arterial wall. That vascular injury causes smooth muscle cells to pro-
liferate, which thickens the arterial wall, and, in turn, leads to resteno-
sis.
The claims recite a method of treating or preventing “restenosis in
a mammal ... which comprises administering an antirestenosis effec-
tive amount of rapamycin to said mammal.” In general, “rapamycin”
may refer to a class of compounds. While the patents-in-suit use
the term “rapamycin,” the parties agree that the shared specification
discloses only one rapamycin species called sirolimus. Sirolimus is
naturally produced by a bacterium called Streptomyces hygroscopicus.
[Sirolimus’s chemical structure has two relevant features: a “macro-
cyclic triene ring” and a specific “substituent group.”]
The parties do not dispute that the effective filing date of both
patents is January 9, 1992. At that time, it was known that sirolimus
acts in part by binding two proteins at sites within the macrocyclic
ring. It was also known that there were four additional compounds
with the same macrocyclic ring as sirolimus, but different substituent
groups.
The parties also do not dispute that the specification discloses the
immunosuppressive and antirestenotic properties of sirolimus. The
specification discloses in vitro test data indicating that sirolimus in-
hibits rat smooth muscle cell proliferation. It also discloses in vivo
test data indicating that intraperitoneal injection of sirolimus in rats
reduced the thickening of the arterial wall following vascular injury.
In two separate actions, Wyeth sued the defendants for infringe-
ment of the patents-in-suit. The defendants market stent products
that elute everolimus and zotarolimus, two drugs that have the same
macrocyclic ring as sirolimus but different [substituent groups]. Af-
ter briefing and a hearing, the district court adopted Wyeth’s pro-
posed construction of “rapamycin” as “a compound containing a
macrocyclic triene ring structure produced by Streptomyces hygroscop-
134 CHAPTER 3. PATENT
icus, having immuno-suppressive and anti-restenotic effects.” Based
in part on that construction, the court granted defendants’ joint mo-
tions for summary judgment of invalidity for nonenablement and
lack of wri en description.
D
I.
A patent’s specification must describe the invention and “the man-
ner and process of making and using it, in such full, clear, concise,
and exact terms as to enable any person skilled in the art to which it
pertains ... to make and use the same.” 35 U.S.C. § 112(a). Claims
are not enabled when, at the effective filing date of the patent, one
of ordinary skill in the art could not practice their full scope without
undue experimentation.
II.
The central issue on appeal is whether practicing the full scope of
the claims requires excessive – and thus undue – experimentation.
The district court held that it does. It found that the claims cover
any structural analog of sirolimus that exhibits immunosuppressive
and antirestenotic effects. The court also found that, while the speci-
fication describes assays to ascertain whether a potential rapamycin
compound exhibits the recited functional effects, the only species dis-
closed is sirolimus. In further support of its holding of nonenable-
ment, the court relied on the unpredictability of the chemical arts, the
complexity of the invention, and the limited knowledge of treatment
of restenosis using sirolimus at the time of the invention.
Wyeth argues that the district court ignored evidence that prac-
ticing the full scope of the claims would have required only rou-
tine experimentation. First, a skilled artisan could ascertain whether
a candidate rapamycin compound has the same macrocyclic ring
as sirolimus. Second, a skilled artisan could routinely determine
whether a candidate has immunosuppressive and antirestenotic ef-
fects using the assays disclosed in the specification.
Regarding the amount of experimentation, Wyeth acknowledges
that one of its experts testified that there could be millions of
compounds made by varying the substituent groups outside of
sirolimus’s macrocyclic ring. Wyeth counters that the same expert
testified that the number of compounds that would exhibit the recited
functional effects would be significantly smaller. [Wyeth’s expert ar-
gued that a PHOSITA would have known that only compounds per-
meable across cell membranes, typically having molecular weights
below 1,200 Daltons would need to be considered. For purposes of
summary judgment, the court accepted this claim as true, and also the
claim that the assays would effectively confirm whether a candidate
B. PROCEDURES 135
compound had the desired immunosuppressive and antirestinotic ef-
fects.]
We agree with Appellees and the district court that there is no gen-
uine dispute that practicing the full scope of the claims, measured
at the time of filing, would require excessive experimentation. The
scope of the claims at issue is broad. Under the district court’s unchal-
lenged construction of “rapamycin,” the invention is a new method
of use of a known compound (sirolimus) and any other compounds
that meet the construction’s structural and functional requirements.
We also agree that there is no genuine dispute that the specification’s
guidance is limited to disclosures of the immunosuppressive and
antirestenotic properties of sirolimus and assays to screen for those
properties.
Yet, even accepting Wyeth’s assertions, we find no genuine dis-
pute that practicing the full scope of the claims would require more
than routine experimentation for two reasons.
First, there is no dispute that, even if potential rapamycin com-
pounds must have a molecular weight below 1,200 Daltons, there
are still at least tens of thousands of candidates. The specification
is silent about how to structurally modify sirolimus, let alone in a
way that would preserve the recited utility. Second, there is no gen-
uine dispute that it would be necessary to first synthesize and then
screen each candidate compound using the assays disclosed in the
specification to determine whether it has immunosuppressive and
antirestenotic effects. There is no evidence in the record that any par-
ticular substitutions outside of the macrocyclic ring are preferable. In-
deed, a Wyeth scientist confirmed the unpredictability of the art and
the ensuing need to assay each candidate by testifying that, “until
you test [compounds], you really can’t tell whether they work or not
[i.e., have antirestenotic effects].” In sum, there is no genuine dispute
that practicing the full scope of the claims would require synthesizing
and screening each of at least tens of thousands of compounds.
The remaining question is whether having to synthesize and
screen each of at least tens of thousands of candidate compounds
constitutes undue experimentation. We hold that it does. Undue
experimentation is a ma er of degree. Even a considerable amount
of experimentation is permissible, as long as it is merely routine or
the specification provides a reasonable amount of guidance regard-
ing the direction of experimentation. Yet, routine experimentation is
not without bounds.
Our cases have described limits on permissible experimentation
in the context of enablement. For example, in ALZA Corp. v. An- ALZA: 603 F.3d 935 (Fed. Cir. 2010)
drx Pharmaceuticals, LLC, we affirmed a judgment of nonenablement
where the specification provided “only a starting point, a direction
for further research.” We concluded that one of ordinary skill “would
136 CHAPTER 3. PATENT
have been required to engage in an iterative, trial-and-error process
to practice the claimed invention even with the help of the specifica-
Vaeck: 947 F.2d 488 (Fed. Cir. 1991) tion.” Finally, in In re Vaeck, we affirmed the PTO’s nonenablement
rejection of claims reciting heterologous gene expression in as many
as 150 genera of cyanobacteria. The specification disclosed only nine
genera, despite cyanobacteria being a “diverse and relatively poorly
understood group of microorganisms,” with unpredictable heterol-
ogous gene expression. Here, the specification similarly discloses
only a starting point for further iterative research in an unpredictable
and poorly understood field. Synthesizing candidate compounds de-
rived from sirolimus could, itself, require a complicated and lengthy
series of experiments in synthetic organic chemistry. Even pu ing
the challenges of synthesis aside, one of ordinary skill would need
to assay each of at least tens of thousands of candidates. Wyeth’s ex-
pert conceded that it would take technicians weeks to complete each
of these assays. The specification offers no guidance or predictions
about particular substitutions that might preserve the immunosup-
pressive and antirestenotic effects observed in sirolimus. The result-
ing need to engage in a systematic screening process for each of the
many rapamycin candidate compounds is excessive experimentation.
We thus hold that there is no genuine dispute that practicing the full
scope of the claims, measured at the filing date, required undue ex-
perimentation.
Plastic Dye Problem
You are drafting claims for a patent application for an industrial dye
that turns certain plastics an a ractive shade of blue. Your client has
tested it, with success, on PETE, HDPE, PEEK, and PVDC (all semi-
crystalline plastics). You could draft a broad claim that refers to “plas-
tic” or you could draft a narrow claim that refers to “a plastic selected
from the group of PETE, HDPE, PEEK, and PVDC.” What are the ad-
vantages and disadvantages of each approach?
b Written Description
Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co
598 F.3d 1336 (Fed Cir. 2010) (en Since its inception, this court has consistently held that § 112, first
banc)
paragraph, contains a wri en description requirement separate from
enablement, and we have articulated a fairly uniform standard,
which we now affirm. Specifically, the description must clearly al-
low persons of ordinary skill in the art to recognize that the inventor
invented what is claimed. In other words, the test for sufficiency is
whether the disclosure of the application relied upon reasonably con-
veys to those skilled in the art that the inventor had possession of the
claimed subject ma er as of the filing date.
B. PROCEDURES 137
The term “possession,” however, has never been very enlighten-
ing. It implies that as long as one can produce records documenting a
wri en description of a claimed invention, one can show possession.
But the hallmark of wri en description is disclosure. Thus, “posses-
sion as shown in the disclosure” is a more complete formulation. Yet
whatever the specific articulation, the test requires an objective in-
quiry into the four corners of the specification from the perspective of
a person of ordinary skill in the art. Based on that inquiry, the spec-
ification must describe an invention understandable to that skilled
artisan and show that the inventor actually invented the invention
claimed.
We have made clear that the wri en description requirement does
not demand either examples or an actual reduction to practice; a con-
structive reduction to practice that in a definite way identifies the
claimed invention can satisfy the wri en description requirement.
Conversely, we have repeatedly stated that actual “possession” or re-
duction to practice outside of the specification is not enough. Rather,
as stated above, it is the specification itself that must demonstrate
possession. And while the description requirement does not demand
any particular form of disclosure, or that the specification recite the
claimed invention in haec verba, a description that merely renders the
invention obvious does not satisfy the requirement.
c Best Mode
Manual of Patent Examination Procedure (Rev. Nov. 2013)
The best mode requirement is a safeguard against the desire on the § 2165
part of some people to obtain patent protection without making a The Best Mode Requirement
full disclosure as required by the statute. The requirement does not
permit inventors to disclose only what they know to be their second-
best embodiment, while retaining the best for themselves.
Determining compliance with the best mode requirement re-
quires a two-prong inquiry. First, it must be determined whether,
at the time the application was filed, the inventor possessed a best
mode for practicing the invention. This is a subjective inquiry which
focuses on the inventor’s state of mind at the time of filing. Second, if
the inventor did possess a best mode, it must be determined whether
the wri en description disclosed the best mode such that a person
skilled in the art could practice it. This is an objective inquiry, focus-
ing on the scope of the claimed invention and the level of skill in the
art. All applicants are required to disclose for the claimed subject mat-
ter the best mode contemplated by the inventor even if the inventor
was not the discoverer of that mode.
138 CHAPTER 3. PATENT
Failure to disclose the best mode need not rise to the level of ac-
tive concealment or inequitable conduct in order to support a rejec-
tion. Where an inventor knows of a specific material or method that
will make possible the successful reproduction of the claimed inven-
tion, but does not disclose it, the best mode requirement has not been
satisfied.
Section 15 of the Leahy-Smith America Invents Act (AIA) did not
eliminate the requirement for a disclosure of the best mode, but ef-
fective September 16, 2011, it amended 35 U.S.C. 282 (the provision
that sets forth defenses in a patent validity or infringement proceed-
ing) to provide that the failure to disclose the best mode shall not be
a basis on which any claim of a patent may be canceled or held in-
valid or otherwise unenforceable. As this change is applicable only
in patent validity or infringement proceedings, it does not alter cur-
rent patent examining practices as set forth above for evaluation of
an application for compliance with the best mode requirement of 35
U.S.C. 112.
Salt Shaker Problem
Assume that you represent the inventor of the first screw-top salt
shaker. (In this alternate universe, prior art salt shakers were filled
through a hole in the bo om.) Draft a claim for this new invention.
Suggestions:
• What are the constituent parts of the screw-top shaker? Your
claim will need to describe them and explain how they are re-
lated.
• Which features of the screw-top shaker are essential to its use?
Which can safely be omi ed?
• Once the new screw-top shaker is publicly available, competing
shaker-makers will try to invent around the patent. How can
you make their job harder?
• Inventors in other industries may be inspired by the screw-top
design. Can you make sure that your claim is not restricted to
the one use your client has in mind?
B. PROCEDURES 139
3 Patent Prosecution
Cuozzo Speed Technologies, LLC v. Lee
136 S. Ct. 2131 (2016)
An inventor obtains a patent by applying to the Patent Office. A
patent examiner with expertise in the relevant field reviews an appli-
cant’s patent claims, considers the prior art, and determines whether
each claim meets the applicable patent law requirements.
If the examiner rejects a claim, the applicant can resubmit a nar-
rowed (or otherwise modified) claim, which the examiner will con-
sider anew, measuring the new claim against the same patent law
requirements. If the examiner rejects the new claim, the inventor typ-
ically has yet another chance to respond with yet another amended
claim. Ultimately, the Patent Office makes a final decision allowing
or rejecting the application. The applicant may seek judicial review
of any final rejection.
Patent Act
(a) Confidentiality. – Except as provided in subsection (b), applica- 35 U.S.C. § 122
tions for patents shall be kept in confidence by the Patent and Confidential status of applications;
Trademark Office. publication of patent applications
(b) Publication. –
(1)(A) Subject to paragraph (2), each application for a patent shall
be published, in accordance with procedures determined
by the Director, promptly after the expiration of a period of
18 months from the earliest filing date for which a benefit is
sought under this title. At the request of the applicant, an
application may be published earlier than the end of such
18-month period.
140 CHAPTER 3. PATENT
(2)(B)(i) If an applicant makes a request upon filing, certifying that
the invention disclosed in the application has not and will
not be the subject of an application filed in another coun-
try, or under a multilateral international agreement, that
requires publication of applications 18 months after filing,
the application shall not be published as provided in para-
graph (1)
Code of Federal Regulations
A patent by its very nature is affected with a public interest. The pub-
37 C.F.R. § 1.56(a) (2015)
lic interest is best served, and the most effective patent examination
Duty to disclose information material
to patentability. occurs when, at the time an application is being examined, the Office
is aware of and evaluates the teachings of all information material to
patentability. Each individual associated with the filing and prose-
cution of a patent application has a duty of candor and good faith in
dealing with the Office, which includes a duty to disclose to the Office
all information known to that individual to be material to patentabil-
ity as defined in this section. The duty to disclose information exists
with respect to each pending claim until the claim is cancelled or with-
drawn from consideration, or the application becomes abandoned.
Therasense, Inc. v. Becton, Dickinson and Co.
649 F.3d 1276 (Fed. Cir. 2011) (en Inequitable conduct is an equitable defense to patent infringement
banc)
that, if proved, bars enforcement of a patent. This judge-made doc-
trine evolved from a trio of Supreme Court cases that applied the doc-
trine of unclean hands to dismiss patent cases involving egregious
misconduct before the PTO.
As the inequitable conduct doctrine evolved from these unclean
hands cases, it came to embrace a broader scope of misconduct, in-
cluding not only egregious affirmative acts of misconduct intended to
deceive both the PTO and the courts but also the mere nondisclosure
of information to the PTO. Inequitable conduct also diverged from
the doctrine of unclean hands by adopting a different and more po-
tent remedy – unenforceability of the entire patent rather than mere
dismissal of the instant suit.
To prevail on a claim of inequitable conduct, the accused infringer
must prove that the patentee acted with the specific intent to deceive
the PTO. A finding that the misrepresentation or omission amounts
to gross negligence or negligence under a “should have known” stan-
dard does not satisfy this intent requirement. In a case involving
nondisclosure of information, clear and convincing evidence must
show that the applicant made a deliberate decision to withhold a
known material reference. In other words, the accused infringer must
B. PROCEDURES 141
prove by clear and convincing evidence that the applicant knew of the
reference, knew that it was material, and made a deliberate decision
to withhold it.
Because direct evidence of deceptive intent is rare, a district court
may infer intent from indirect and circumstantial evidence. However,
to meet the clear and convincing evidence standard, the specific in-
tent to deceive must be the single most reasonable inference able to
be drawn from the evidence. Indeed, the evidence must be sufficient
to require a finding of deceitful intent in the light of all the circum-
stances.
This court holds that, as a general ma er, the materiality required
to establish inequitable conduct is but-for materiality. When an ap-
plicant fails to disclose prior art to the PTO, that prior art is but-for
material if the PTO would not have allowed a claim had it been aware
of the undisclosed prior art.
a Priority Dates
USPTO, General Information Concerning Patents
A provisional application for patent (provisional application) is a U.S.
national application filed in the USPTO under 35 U.S.C. § 111(b). A Provisional Application for Patent
provisional application is not required to have a formal patent claim
or an oath or declaration. Provisional applications also should not
include any information disclosure (prior art) statement since provi-
sional applications are not examined. A provisional application pro-
vides the means to establish an early effective filing date in a later
filed nonprovisional patent application filed under 35 U.S.C. § 111(a).
It also allows the term ”Patent Pending” to be applied in connection
with the description of the invention.
A provisional application for patent has a pendency lasting 12
months from the date the provisional application is filed. The 12-
month pendency period cannot be extended. Therefore, an appli-
cant who files a provisional application must file a corresponding
nonprovisional application for patent (nonprovisional application)
during the 12-month pendency period of the provisional application
in order to benefit from the earlier filing of the provisional applica-
tion.
b Multiple Applications
Patent Act
If two or more independent and distinct inventions are claimed in one 35 U.S.C. § 121
application, the Director may require the application to be restricted Divisional Applications
142 CHAPTER 3. PATENT
to one of the inventions. If the other invention is made the subject of
a divisional application it shall be entitled to the benefit of the filing
date of the original application. The validity of a patent shall not be
questioned for failure of the Director to require the application to be
restricted to one invention.
Manual of Patent Examination Procedure (Rev. July. 2015)
MPEP § 201.07
A continuation application is an application for the invention(s) dis-
Continuation Application closed in a prior-filed copending nonprovisional application. The dis-
closure presented in the continuation must not include any subject
ma er which would constitute new ma er if submi ed as an amend-
ment to the parent application. The inventorship in the continuation
application must include at least one inventor named in the prior-
filed application. At any time before the patenting, abandonment,
or termination of proceedings on an earlier application, an applicant
may have recourse to filing a continuation application in order to in-
troduce into the application a new set of claims and to establish a
right to further examination by the Office.
MPEP § 201.08
A continuation-in-part is an application filed during the lifetime of an
Continuation-in-Part Application earlier nonprovisional application, repeating some substantial por-
tion or all of the earlier nonprovisional application and adding ma er
not disclosed in the said earlier nonprovisional application.
What’s the difference? Divisionals and continuations repeat the spec-
ification of their parent applications; they are entitled to share its pri-
ority date. Divisionals are required when the examiner concludes
that an inventor is trying to claim two distinct inventions in the same
patent; they split the claims across two distinct applications. Contin-
uations allow an applicant to appeal the rejection of claims, or to add
new claims, without holding up the examination and issuance of the
claims the examiner allows. A continuation-in-part (CIP) adds new
subject ma er to the specification, so it is not automatically entitled
to the same priority date. Instead, priority dates are assessed on a
claim-by-claim basis.
c Judicial Review
Applicants can appeal rejections to the Patent Trial and Appeal Board
(PTAB). 35 U.S.C. § 134(a). If the PTAB also rejects the application, the
applicant can seek judicial review either before the Federal Circuit, id.
§ 141, or the Eastern District of Virginia, id. § 145.
B. PROCEDURES 143
d Post-Grant Proceedings
Patent Act
(a)In general. – Whenever any patent is, through error, deemed
35 U.S.C. § 251
wholly or partly inoperative or invalid, by reason of a defective Reissue of defective patents
specification or drawing, or by reason of the patentee claiming
more or less than he had a right to claim in the patent, the Di-
rector shall, on the surrender of such patent and the payment
of the fee required by law, reissue the patent for the invention
disclosed in the original patent, and in accordance with a new
and amended application, for the unexpired part of the term of
the original patent. No new ma er shall be introduced into the
application for reissue.
(d) Reissue patent enlarging scope of claims. – No reissued patent
shall be granted enlarging the scope of the claims of the orig-
inal patent unless applied for within two years from the grant
of the original patent.
Cuozzo Speed Technologies, LLC v. Lee
136 S. Ct. 2131 (2016)
For several decades, the Patent Office has also possessed the author-
ity to reexamine – and perhaps cancel – a patent claim that it had
previously allowed. In 1980, for example, Congress enacted a statute
providing for ”ex parte reexamination.”. That statute (which remains See 35 U.S.C. S 302 et seq.
in effect) gives ”any person at any time” the right to ”file a request
for reexamination” on the basis of certain prior art ”bearing on the
patentability” of an already-issued patent. If the Patent Office con-
cludes that the cited prior art raises ”a substantial new question of
patentability,” the agency can reexamine the patent. And that reex-
amination can lead the Patent Office to cancel the patent (or some of
its claims). Alternatively, the Director of the Patent Office can, on her
”own initiative,” trigger such a proceeding. And, as with examina-
tion, the patent holder can seek judicial review of an adverse final
decision.
In 1999 and 2002, Congress enacted statutes that established
another, similar procedure, known as ”inter partes reexamination.”
Those statutes granted third parties greater opportunities to partic-
ipate in the Patent Office’s reexamination proceedings as well as in
any appeal of a Patent Office decision.
In 2011, Congress enacted the statute before us. That statute mod-
ifies ”inter partes reexamination,” which it now calls ”inter partes re-
view” (IPR). Like inter partes reexamination, any third party can ask See 35 U.S.C. § 311 et seq.
the agency to initiate inter partes review of a patent claim. But the
new statute has changed the standard that governs the Patent Office’s
144 CHAPTER 3. PATENT
institution of the agency’s process. Instead of requiring that a request
for reexamination raise a ”substantial new question of patentability,”
it now requires that a petition show ”a reasonable likelihood that” the
challenger ”would prevail.”
The new statute provides a challenger with broader participation
rights. It creates within the Patent Office a Patent Trial and Appeal
Board (Board) composed of administrative patent judges, who are
patent lawyers and former patent examiners, among others. That
Board conducts the proceedings, reaches a conclusion, and sets forth
its reasons.
The statute sets forth time limits for completing this review. It
grants the Patent Office the authority to issue rules. Like its predeces-
sors, the statute authorizes judicial review of a ”final wri en decision”
canceling a patent claim. And, the statute says that the agency’s ini-
tial decision ”whether to institute an inter partes review” is ”final and
nonappealable.” Like the Court of Appeals, we believe that Cuozzo’s
contention that the Patent Office unlawfully initiated its agency re-
view is not appealable.
Cuozzo further argues that the Patent Office lacked the legal au-
thority to issue its regulation requiring the agency, when conducting
an inter partes review, to give a patent claim ”its broadest reasonable
construction in light of the specification of the patent in which it ap-
37 CFR S 42.100(b). Why would the PTO pears.” Instead, Cuozzo contends that the Patent Office should, like
use a different standard of construction the courts, give claims their ordinary meaning as understood by a
than the courts? Why would it matter?
person of skill in the art.
The statute, however, contains a provision that grants the Patent
Office authority to issue ”regulations ... establishing and governing
inter partes review under this chapter.” The Court of Appeals held
that this statute gives the Patent Office the legal authority to issue its
broadest reasonable construction regulation. We agree.
Even more confusingly, the AIA also introduced ”post-grant review”
See 35 U.S.C. § 321 et seq. (PGR). PGR is only available within nine months after a patent issues
– except for a ”transitional” program that allows for PGR of any ”cov-
See AIA § 18 ered business method patent” at any time, but sunsets in 2020. IPR be-
comes available after the nine-month PGR window closes. The major
differences are that IPR only allows for challenges under § 102 (nov-
elty) and § 103 (nonobviousness) and that the threshold for the PTO
to hear an IPR is higher. Paradoxically, because of the wider range
of challenges available in PGR, the potential estoppel against parties
who bring one is much broader.
C. OWNERSHIP 145
4 Term
Patent Act
Subject to the payment of fees under this title, such grant shall be for a § 135
term beginning on the date on which the patent issues and ending 20 Contents and term of patent
years from the date on which the application for the patent was filed Prior to June 8, 1995, patent terms were
in the United States or, if the application contains a specific reference set at 17 years from the date of the
to an earlier filed application or applications under section 120, 121, patent grant. Given that applicants can
365(c), or 386(c), from the date on which the earliest such application partially control the pace at which ap-
plications move, can you think of ways
was filed. this rule was vulnerable to gamesman-
ship?
Section 135 also contains an extensive and intricate set of provisions
for adjusting the patent term ”if the issue of an original patent is de-
layed due to the failure of the Patent and Trademark Office” to act
expeditiously, as specified by the statute, in its examination of the
application.
C Ownership
1 Collaborations
Manual of Patent Examination Procedure (Rev. Nov. 2013)
The inventor, or each individual who is a joint inventor of a claimed § 2137
invention, in an application for patent (other than a provisional ap- Inventorship
plication) must execute an oath or declaration directed to the appli-
cation, except as provided for in 37 CFR 1.64.
The definition for inventorship can be simply stated: The thresh-
old question in determining inventorship is who conceived the inven-
tion. Unless a person contributes to the conception of the invention,
he is not an inventor. Insofar as defining an inventor is concerned,
reduction to practice, per se, is irrelevant. One must contribute to
the conception to be an inventor. With regard to the inventorship of
chemical compounds, an inventor must have a conception of the spe-
cific compounds being claimed. General knowledge regarding the
anticipated biological properties of groups of complex chemical com-
pounds is insufficient to confer inventorship status with respect to
specifically claimed compounds. One who suggests an idea of a re-
sult to be accomplished, rather than the means of accomplishing it,
is not an coinventor. See MPEP § 2138.04 - § 2138.05 for a discussion
146 CHAPTER 3. PATENT
of what evidence is required to establish conception or reduction to
practice.
In arriving at conception the inventor may consider and adopt
ideas and materials derived from many sources such as a suggestion
from an employee, or hired consultant so long as he maintains in-
tellectual domination of the work of making the invention down to
the successful testing, selecting or rejecting as he goes even if such
suggestion or material proves to be the key that unlocks his prob-
lem. (Adoption of the ideas and materials from another can become
a derivation.)
Difficulties arise in separating members of a team effort, where
each member of the team has contributed something, into those mem-
bers that actually contributed to the conception of the invention, such
as the physical structure or operative steps, from those members that
merely acted under the direction and supervision of the conceivers.
It is not essential for the inventor to be personally involved in carry-
ing out process steps where implementation of those steps does not
require the exercise of inventive skill. There is no requirement that
the inventor be the one to reduce the invention to practice so long as
Mattor: 530 F.2d 1391 (CCPA 1976) the reduction to practice was done on his behalf. See also Ma or v.
Coolegem (one following oral instructions is viewed as merely a tech-
Tucker: , nician); Tucker v. Naito 188 USPQ 260 (Bd. Pat. Inter. 1975) (inven-
Carrier: 81 F.2d 250 (CCPA 1936) tors need not “personally construct and test their invention”); Davis
v. Carrier (noninventor’s work was merely that of a skilled mechanic
carrying out the details of a plan devised by another).
The inventive entity for a particular application is based on some
contribution to at least one of the claims made by each of the named
inventors. “Inventors may apply for a patent jointly even though (1)
they did not physically work together or at the same time, (2) each
did not make the same type or amount of contribution, or (3) each
did not make a contribution to the subject ma er of every claim of
35 U.S.C. 116. the patent.” The statute neither states nor implies that two inventors
can be ”joint inventors” if they have had no contact whatsoever and
are completely unaware of each other’s work. What is required is
some quantum of collaboration or connection. In other words, for
persons to be joint inventors, there must be some element of joint be-
havior, such as collaboration or working under common direction,
one inventor seeing a relevant report and building upon it or hearing
another’s suggestion at a meeting. It is not necessary that the inven-
tive concept come to both joint inventors at the same time.
Each joint inventor must generally contribute to the conception
of the invention. A coinventor need not make a contribution to ev-
ery claim of a patent. A contribution to one claim is enough. “The
contributor of any disclosed means of a means-plus-function claim
element is a joint inventor as to that claim, unless one asserting sole
C. OWNERSHIP 147
inventorship can show that the contribution of that means was sim-
ply a reduction to practice of the sole inventor’s broader concept.”
Ethicon Inc. v. United States Surgical Corp. (The electronics technician Ethicon: 135 F.3d 1456 (Fed. Cir. 1998)
who contributed to one of the two alternative structures in the speci-
fication to define “the means for detaining” in a claim limitation was
held to be a joint inventor.).
Patent Act
(a)Institution of Proceeding. – 35 U.S.C. § 135
(1) In general. – An applicant for patent may file a petition Derivation proceedings
with respect to an invention to institute a derivation pro-
ceeding in the Office. The petition shall set forth with par-
ticularity the basis for finding that an individual named
in an earlier application as the inventor or a joint inventor
derived such invention from an individual named in the
petitioner’s application as the inventor or a joint inventor
and, without authorization, the earlier application claim-
ing such invention was filed.
(b) Determination by Patent Trial and Appeal Board. – In a derivation
proceeding instituted under subsection (a), the Patent Trial and
Appeal Board shall determine whether an inventor named in
the earlier application derived the claimed invention from an
inventor named in the petitioner’s application and, without au-
thorization, the earlier application claiming such invention was
filed. In appropriate circumstances, the Patent Trial and Appeal
Board may correct the naming of the inventor in any application
or patent at issue.
2 Priority: Novelty and Statutory Bars
Priority rules determine which of competing claimants is entitled to
an IP right based on an earlier claim. It is rarely as simple as ”first
in time” because what counts as ”first” could be assessed in different
ways. Priority rules select one of these ways of determining who is
”first” and determine the consequences of this fact. As we shall also
see, U.S. patent law mostly creates priority by preventing all but one –
or sometimes all – of the potential claimants from obtaining a patent.
As we shall also see, the AIA dramatically changed the priority rules
of U.S. patent law; it is the single biggest change made by the AIA.
Under Section 102, an applicant “shall be entitled to a patent un-
less” someone somewhere has done something that makes the inven-
tion not patentable. That something is called a prior art reference and it
is said to anticipate the applicant’s invention. Conceptually, any such
rule raises three questions:
148 CHAPTER 3. PATENT
• Which kinds of activities count as prior art? The present sec-
tion 102 uses the words “patented, described in a printed pub-
lication, or in public use, on sale, or otherwise available to the
public.” They are broad, but they do not exhaust the universe
of human activity. If Alfie files for a patent on an oven of a
type that Beth once built and then demolished without using or
telling anyone else, Beth’s secret use does not quality as prior
art and will not stand in the way of Alfie’s application. Exten-
sive caselaw glosses the meanings of these phrases, which are
far subtler than they may appear at first glance, and which have
changed substantially over time.
• What makes a prior art reference sufficiently similar to the ap-
plicant’s “claimed invention” to make it unpatentable? If Alfie
applies to patent an oven, Beth’s previous work on metalwork-
ing is irrelevant to the novelty of Alfie’s oven. Patent law has
se led on a remarkably elegant test to capture this idea: the test
for anticipation is simply the test for infringement plus the test
for enablement. A claim is anticipated by an enabling prior art
reference (and hence not novel) if that reference would infringe
the claim. “That which infringes, if later, would anticipate, if
Peters: 129 U.S. 530 (1889) earlier.” Peters v. Active Mfg. Co..
• When must an activity have taken place to qualify as prior art?
The present section 102 uses the words “before the effective fil-
ing date of the claimed invention,” so the patent applicant must
not only think of the invention and make it work but must also
make it to the Patent Office before anyone else goes public with
the same idea. If Alfie invents in January and files in March but
Beth publishes (or worse, files her own application) in Febru-
ary, Alfie is out of luck. This is one of the major changes in the
America Invents Act: under pre-AIA law, Alfie’s March appli-
cation based off a January invention date would have been good
enough. As we dig into the text of the AIA, we will see why it
is said to create a rule of “first inventor to file.”
Not coincidentally, these are the same kinds of questions one
must also ask about infringement: what kinds of conduct are prohib-
ited, what makes a defendant’s use too similar, and when does it fall
within the term of the plaintiff’s rights? This symmetry is baked into
patent law, as it is to many other fields of intellectual property law.
a Categories of Prior Art
Under the new § 102(a)(1), ”A person shall be entitled to a patent
unless the claimed invention was patented, described in a printed publi-
cation, or in public use, on sale, or otherwise available to the public before
the effective filing date of the claimed invention.” Most of the caselaw
C. OWNERSHIP 149
bearing on these phrases was developed under the old § 102; signifi-
cant relevant differences will be noted.
1 "patented"
U.S. patents pose few conceptual or practical difficulties; they are
prior art as of the day they issue. It is not always so easy to tell
whether a foreign right is a ”patent” within the meaning of § 102. In Carlson: 983 F.2d 1032 (Fed. Cir. 1992)
re Carlson held that a German Geschmacksmuster counted as a patent
for prior art purposes. A person may obtain one by ”depositing with
a local office an application with a drawing, photograph or sample
of the article.” That was enough, even though ”Geschmacksmuster
on display for public view in remote cities in a far-away land may
create a burden of discovery for one without the time, desire, or re-
sources to journey there in person or by agent to observe that which
was registered and protected under German law.” Such is life.
2 "described in a printed publication"
In re Klopfenstein
380 F.3d 1345 (Fed Cir. 2004)
Carol Klopfenstein and John Brent appeal a decision from the Patent
and Trademark Office’s Board of Patent Appeals and Interferences
(“Board”) upholding the denial of their patent application. The Board
upheld the Patent and Trademark Office’s (“PTO’s”) initial denial of
their application on the ground that the invention described in the
patent application was not novel under 35 U.S.C. § 102(b) because it
had already been described in a printed publication more than one
year before the date of the patent application. We affirm.
B
The appellants applied for a patent on October 30, 2000. Their patent
application, Patent Application Serial No. 09/699,950 (“the ‘950 appli-
cation”), discloses methods of preparing foods comprising extruded
soy cotyledon fiber (“SCF”). The ‘950 application asserts that feeding
mammals foods containing extruded SCF may help lower their serum
cholesterol levels while raising HDL cholesterol levels. The fact that
extrusion reduces cholesterol levels was already known by those of
ordinary skill in the art that worked with SCF. What was not known
at the time was that double extrusion increases this effect and yielded
even stronger results.
In October 1998, the appellants, along with colleague M. Liu, pre-
sented a printed slide presentation (“Liu” or “the Liu reference”)
entitled “Enhancement of Cholesterol-Lowering Activity of Dietary
Fibers By Extrusion Processing” at a meeting of the American Associ-
ation of Cereal Chemists (“AACC”). The fourteen-slide presentation
150 CHAPTER 3. PATENT
was printed and pasted onto poster boards. The printed slide pre-
sentation was displayed continuously for two and a half days at the
AACC meeting.
In November of that same year, the same slide presentation was
put on display for less than a day at an Agriculture Experiment Sta-
tion (“AES”) at Kansas State University.
Both parties agree that the Liu reference presented to the AACC
and at the AES in 1998 disclosed every limitation of the invention dis-
closed in the ‘950 patent application. Furthermore, at neither presen-
tation was there a disclaimer or notice to the intended audience pro-
hibiting note-taking or copying of the presentation. Finally, no copies
of the presentation were disseminated either at the AACC meeting or
at the AES, and the presentation was never catalogued or indexed in
any library or database.
DISCUSSION
B.
The appellants argue on appeal that the key to establishing whether
or not a reference constitutes a “printed publication” lies in determin-
ing whether or not it had been disseminated by the distribution of re-
productions or copies and/or indexed in a library or database. They
assert that because the Liu reference was not distributed and indexed,
it cannot count as a “printed publication” for the purposes of 35 U.S.C.
§ 102(b). To support their argument, they rely on several precedents
from this court and our predecessor court on “printed publications.”
Cronyn: F.2d 1158 (Fed. Cir. 1989) They argue that In re Cronyn, In re Hall, Massachuse s Institute of Tech-
Hall: 781 F.2d 897 (Fed. Cir. 1986) nology v. AB Fortia, and In re Wyer, among other cases, all support the
MIT: 774 F.2d 1104 (Fed. Cir. 1985) view that distribution and/or indexing is required for something to
Wyer: 655 F.2d 221 (CCPA 1981) be considered a “printed publication.”
We find the appellants’ argument unconvincing and disagree
with their characterization of our controlling precedent. Even if the
cases cited by the appellants relied on inquiries into distribution and
indexing to reach their holdings, they do not limit this court to find-
ing something to be a “printed publication” only when there is distri-
bution and/or indexing. Indeed, the key inquiry is whether or not a
reference has been made “publicly accessible.”
The statutory phrase “printed publication” has been interpreted
to mean that before the critical date the reference must have been
sufficiently accessible to the public interested in the art; dissemina-
tion and public accessibility are the keys to the legal determination
whether a prior art reference was “published.”
For example, a public billboard targeted to those of ordinary skill
in the art that describes all of the limitations of an invention and that is
on display for the public for months may be neither “distributed” nor
C. OWNERSHIP 151
“indexed” – but it most surely is “sufficiently accessible to the public
interested in the art” and therefore, under controlling precedent, a
“printed publication.”
Furthermore, the cases that the appellants rely on can be clearly
distinguished from this case. Cronyn involved college students’ pre-
sentations of their undergraduate theses to a defense commi ee
made up of four faculty members. Their theses were later catalogued
in an index in the college’s main library. The index was made up of
thousands of individual cards that contained only a student’s name
and the title of his or her thesis. The index was searchable by stu-
dent name and the actual theses themselves were neither included
in the index nor made publicly accessible. We held that because the
theses were only presented to a handful of faculty members and had
not been catalogued or indexed in a meaningful way, they were not
sufficiently publicly accessible for the purposes of 35 U.S.C. § 102(b).
In Hall, this court determined that a thesis filed and indexed in
a university library did count as a “printed publication.” The Hall
court arrived at its holding after taking into account that copies of the
indexed thesis itself were made freely available to the general public
by the university more than one year before the filing of the relevant
patent application in that case. But the court in Hall did not rest its
holding merely on the indexing of the thesis in question. Instead, it
used indexing as a factor in determining “public accessibility.” As
the court asserted:
The “printed publication” bar is grounded on the princi-
ple that once an invention is in the public domain, it is
no longer patentable by anyone. Because there are many
ways in which a reference may be disseminated to the
interested public, “public accessibility” has been called
the touchstone in determining whether a reference consti-
tutes a “printed publication” bar under 35 U.S.C. § 102(b).
In MIT, a paper delivered orally to the First International Cell Cul-
ture Congress was considered a “printed publication.” In that case,
as many as 500 persons having ordinary skill in the art heard the pre-
sentation, and at least six copies of the paper were distributed. The
key to the court’s finding was that actual copies of the presentation
were distributed. The court did not consider the issue of indexing.
The MIT court determined the paper in question to be a “printed pub-
lication” but did not limit future determinations of the applicability
of the “printed publication” bar to instances in which copies of a ref-
erence were actually offered for distribution. 4
4
With regard to scientific presentations, it is important to note than an entirely
oral presentation at a scientific conference that includes neither slides nor copies of
152 CHAPTER 3. PATENT
Finally, the Wyer court determined that an Australian patent ap-
plication kept on microfilm at the Australian Patent Office was suf-
ficiently accessible to the public and to persons skilled in the perti-
nent art to qualify as a ”printed publication.” The court so found even
though it did not determine whether or not there was “actual view-
ing or dissemination” of the patent application. Id. It was sufficient
for the court’s purposes that the records of the application were kept
so that they could be accessible to the public. Id.5 According to the
Wyer court, the entire purpose of the “printed publication” bar was
to “prevent withdrawal” of disclosures already in the possession of
the public by the issuance of a patent.
Thus, throughout our case law, public accessibility has been the
criterion by which a prior art reference will be judged for the pur-
poses of § 102(b). Oftentimes courts have found it helpful to rely
on distribution and indexing as proxies for public accessibility. But
when they have done so, it has not been to the exclusion of all other
measures of public accessibility. In other words, distribution and in-
dexing are not the only factors to be considered in a § 102(b) “printed
publication” inquiry.
C.
In this case, the Liu reference was displayed to the public approxi-
mately two years before the ‘950 application filing date. The reference
was shown to a wide variety of viewers, a large subsection of whom
possessed ordinary skill in the art of cereal chemistry and agriculture.
Furthermore, the reference was prominently displayed for approxi-
mately three cumulative days at AACC and the AES at Kansas State
University. The reference was shown with no stated expectation that
the information would not be copied or reproduced by those viewing
it. Finally, no copies of the Liu display were distributed to the pub-
lic and the display was not later indexed in any database, catalog or
library.
The duration of the display is important in determining the oppor-
tunity of the public in capturing, processing and retaining the infor-
mation conveyed by the reference. The more transient the display,
the less likely it is to be considered a “printed publication.” Con-
versely, the longer a reference is displayed, the more likely it is to
the presentation is without question not a “printed publication” for the purposes
of 35 U.S.C. § 102(b). Furthermore, a presentation that includes a transient display
of slides is likewise not necessarily a “printed publication.” See, e.g., Regents of the
Univ. of Cal. v. Howmedica, Inc., 530 F.Supp. 846 (D.N.J. 1981) (holding that “the
projection of slides at the lecture that was limited in duration and could not disclose
the invention to the extent necessary to enable a person of ordinary skill in the art
to make or use the invention” was not a “printed publication”).
5
Unlike in Cronyn, it was the actual patent application — and not just an index
card searchable by author name only — that was made publicly accessible.
C. OWNERSHIP 153
be considered a “printed publication.” In this case, the Liu reference
was displayed for a total of approximately three days. It was shown
at the AACC meeting for approximately two and a half days and at
the AES at Kansas State University for less than one day.
The expertise of the intended audience can help determine how
easily those who viewed it could retain the displayed material. As
Judge Learned Hand explained in Jockmus v. Leviton, a reference, Jockmus: 28 F.2d 812, (2d Cir. 1928)
“however ephemeral its existence,” may be a “printed publication”
if it “goes direct to those whose interests make them likely to observe
and remember whatever it may contain that is new and useful.” In
this case, the intended target audience at the AACC meeting was com-
prised of cereal chemists and others having ordinary skill in the art
of the ‘950 patent application. The intended viewers at the AES most
likely also possessed ordinary skill in the art.
Whether a party has a reasonable expectation that the information
it displays to the public will not be copied aids our § 102(b) inquiry.
Where professional and behavioral norms entitle a party to a reason-
able expectation that the information displayed will not be copied, we
are more reluctant to find something a “printed publication.” This
reluctance helps preserve the incentive for inventors to participate
in academic presentations or discussions. Where parties have taken
steps to prevent the public from copying temporarily posted infor-
mation, the opportunity for others to appropriate that information
and assure its widespread public accessibility is reduced. These pro-
tective measures could include license agreements, non-disclosure
agreements, anti-copying software or even a simple disclaimer in-
forming members of the viewing public that no copying of the infor-
mation will be allowed or countenanced. Protective measures are to
be considered insofar as they create a reasonable expectation on the
part of the inventor that the displayed information will not be copied.
In this case, the appellants took no measures to protect the informa-
tion they displayed — nor did the professional norms under which
they were displaying their information entitle them to a reasonable
expectation that their display would not be copied. There was no dis-
claimer discouraging copying, and any viewer was free to take notes
from the Liu reference or even to photograph it outright.
Finally, the ease or simplicity with which a display could be
copied gives further guidance to our § 102(b) inquiry. The more com-
plex a display, the more difficult it will be for members of the public to
effectively capture its information. The simpler a display is, the more
likely members of the public could learn it by rote or take notes ade-
quate enough for later reproduction. The Liu reference was made up
of 14 separate slides. One slide was a title slide; one was an acknowl-
edgement slide; and four others represented graphs and charts of ex-
periment results. The other eight slides contained information pre-
154 CHAPTER 3. PATENT
sented in bullet point format, with no more than three bullet points
to a slide. Further, no bullet point was longer than two concise sen-
tences. Finally, as noted earlier, the fact that extrusion lowers choles-
terol levels was already known by those who worked with SCF. The
discovery disclosed in the Liu reference was that double extrusion
increases this effect. As a result, most of the eight substantive slides
only recited what had already been known in the field, and only a
few slides presented would have needed to have been copied by an
observer to capture the novel information presented by the slides.
Suppose that the Liu presentation had
Upon reviewing the above factors, it becomes clear that the Liu ref-
not been shown at the AACC meeting
but instead been posted to Liu's per-
erence was sufficiently publicly accessible to count as a “printed pub-
sonal webpage. Printed publication? lication” for the purposes of 35 U.S.C. § 102(b). The reference itself
What if Liu had emailed it to a mailing was shown for an extended period of time to members of the public
list for cereal chemists? Are there fur- having ordinary skill in the art of the invention behind the ‘950 patent
ther questions you would want to ask
application. Those members of the public were not precluded from
before committing to an answer on ei-
ther of these hypotheticals? taking notes or even photographs of the reference. And the reference
itself was presented in such a way that copying of the information it
contained would have been a relatively simple undertaking for those
to whom it was exposed — particularly given the amount of time they
had to copy the information and the lack of any restrictions on their
copying of the information. For these reasons, we conclude that the
Liu reference was made sufficiently publicly accessible to count as a
“printed publication” under § 102(b).
3 "in public use"
The old § 102 got at this concept in two different ways. It denied a
patent where the invention was ”known or used by others” before
the date of invention (a ”novelty” rule) or where it was ”in public use”
It also used the phrase "in this coun- more than a year before the filing date (a ”statutory bar”). While the
try," which the AIA drops. Don't worry two provisions differed in their timing (more on this in the Priority
about the geographic issues for now.
section below), the most fundamental distinction was that ”known or
used by others” only applied to uses made by third parties, whereas
”in public use” also could be triggered by anyone, including the inven-
tor.
Mark A. Lemley
93 Tex. L. Rev. 1119 (2015)
Does “Public Use” Mean the Same Thing It Did Last Year?
An inventor can obtain a patent only if the invention is “novel” – that
is, that no one has done the same thing before. Rather than adopting
an absolute novelty rule, however, patent law has traditionally re-
quired that most categories of prior art be “accessible to the public.”
Thus, while [old] 35 U.S.C. § 102(a) bars a patent if the invention was
“known or used by others” before the applicant invented it, courts
have interpreted that term to mean “publicly known or used.” At
C. OWNERSHIP 155
the same time, the public accessibility requirement does not require
that the public have a realistic chance of accessing the information;
“public” seems to mean merely “not secret.” An invention performed
underground on private property in a rural area, an invention found
only inside the walls of a safe, and a single copy of a graduate thesis in
the basement of a library in Germany have all been held sufficiently
“public” to constitute prior art.
In addition to novelty, the Patent Act of 1952, like its predeces-
sors, created a series of “statutory bars” designed to prevent inven-
tors from making commercial use of their invention while keeping it
secret. [Old] section 102(b) provides that even a true first inventor
is not entitled to a patent if the invention has been “on sale” or “in
public use” more than a year before the inventor files her patent ap-
plication. As with [old] section 102(a), the courts have interpreted the
word “public” quite loosely, so that even uses that are extremely un-
likely to be viewed by the public are nonetheless classed as “public
uses” so long as they are not affirmatively secret. In the most extreme
example, the Supreme Court held that a woman engaged in a public
use of a corset invented by her fiancé when she wore it under her
clothing.
But even a very broad definition of “public” left a significant loop-
hole – an inventor could avoid the one-year statutory bar by commer-
cializing his invention but treating it as a trade secret. Because a secret
use is by definition not a public use, a company could make commer-
cial use of an invention indefinitely without triggering the one-year
period for filing. To solve this problem, courts for more than sev-
enty years have created a special rule for secret commercial uses: a
secret commercial use is not prior art that bars a third party from
later obtaining a patent, but it does start the one-year clock running
for the user. This rule originated in a 1940 opinion by Judge Learned
Hand in Metallizing Engineering v. Kenyon Bearing & Auto Parts. The Metallizing: 153 F.2d 516 (2d Cir. 1946)
court acknowledged that interpreting the same term (“public use”) to
have different meanings was hard to reconcile with the statute. But
Judge Hand reasoned that it was not the intent of the statute to en- It is a condition upon an inventor's right
courage secrecy, but instead to encourage disclosure. Metallizing’s to a patent that he shall not exploit his
discovery competitively after it is ready
split interpretation of public use served that goal in two ways. First,
for patenting. [If he does,] he forfeits his
it encouraged inventors to file a patent quickly rather than relying right regardless of how little the public
in trade secrecy, because they would lose the right to patent if they may have learned about the invention."
waited longer than a year. Second, the fact that a secret commercial —Judge Hand
use wouldn’t prevent a later patent from issuing to a third party adds
to the disclosure incentive, because an inventor who opts for trade se-
crecy may find that a later inventor has patented their own idea and
there is nothing they can do to stop it.
156 CHAPTER 3. PATENT
The PTO takes the position that the AIA, by collapsing the two
phrases (”known or used by others” and ”in public use”), and by
adding the new category of uses ”otherwise available to the public,”
eliminated this per se rule against secret commercialization by the
inventor. Some commentators agree; others, including Lemley, vehe-
mently disagreee. The courts have not yet se led on a clear answer.
Egbert v. Lippmann
104 U.S. 333 (1881)
This suit was brought for an alleged infringement of the com-
plainant’s reissued le ers-patent, No. 5216, dated Jan. 7, 1873, for
an improvement in corset-springs.
The original le ers bear date July 17, 1866, and were issued to
Samuel H. Barnes. The reissue was made to the complainant, under
her then name, Frances Lee Barnes, executrix of the original patentee.
The specification for the reissue declares:
This invention consists in forming the springs of corsets
of two or more metallic plates, placed one upon another,
and so connected as to prevent them from sliding off each
other laterally or edgewise, and at the same time admit of
their playing or sliding upon each other, in the direction
of their length or longitudinally, whereby their flexibility
and elasticity are greatly increased, while at the same time
much strength is obtained.
The second claim is as follows:
A pair of corset-springs, each member of the pair being
composed of two or more metallic plates, placed one on
another, and fastened together at their centres, and so con-
nected at or near each end that they can move or play on
each other in the direction of their length.
[The patent statute in force at the time had a two-year statutory bar,
whose] effect is to render le ers-patent invalid if the invention which
they cover was in public use, with the consent and allowance of the
inventor, for more than two years prior to his application.
The evidence on which the defendants rely to establish a prior
public use of the invention consists mainly of the testimony of the
complainant.
She testifies that Barnes invented the improvement covered by
his patent between January and May, 1855; that between the dates
named the witness and her friend Miss Cugier were complaining of
the breaking of their corset-steels. Barnes, who was present, and was
an intimate friend of the witness, said he thought he could make her
a pair that would not break. At their next interview he presented her
with a pair of corset-steels which he himself had made. The witness
C. OWNERSHIP 157
wore these steels a long time. In 1858 Barnes made and presented to
her another pair, which she also wore a long time. When the corsets
in which these steels were used wore out, the witness ripped them
open and took out the steels and put them in new corsets. This was
done several times.
It is admi ed, and, in fact, is asserted, by complainant, that these
steels embodied the invention afterwards patented by Barnes and
covered by the reissued le ers-patent on which this suit is brought.
Joseph H. Sturgis, another witness for complainant, testifies that
in 1863 Barnes spoke to him about two inventions made by himself,
one of which was a corset-steel, and that he went to the house of
Barnes to see them. Before this time, and after the transactions testi-
fied to by the complainant, Barnes and she had intermarried. Barnes
said his wife had a pair of steels made according to his invention in
the corsets which she was then wearing, and if she would take them
off he would show them to witness. Mrs. Barnes went out, and re-
turned with a pair of corsets and a pair of scissors, and ripped the
corsets open and took out the steels. Barnes then explained to wit-
ness how they were made and used.
The question for our decision is, whether this testimony shows a
public use within the meaning of the statute.
We observe, in the first place, that to constitute the public use of
an invention it is not necessary that more than one of the patented
articles should be publicly used. The use of a great number may tend
to strengthen the proof, but one well-defined case of such use is just
as effectual to annul the patent as many. For instance, if the inventor
of a mower, a printingpress, or a railway-car makes and sells only one
of the articles invented by him, and allows the vendee to use it for two
years, without restriction or limitation, the use is just as public as if
he had sold and allowed the use of a great number.
We remark, secondly, that, whether the use of an invention is pub-
lic or private does not necessarily depend upon the number of per-
sons to whom its use is known. If an inventor, having made his de-
vice, gives or sells it to another, to be used by the donee or vendee,
without limitation or restriction, or injunction of secrecy, and it is so
used, such use is public, even though the use and knowledge of the
use may be confined to one person.
We say, thirdly, that some inventions are by their very character
only capable of being used where they cannot be seen or observed by
the public eye. An invention may consist of a lever or spring, hidden
in the running gear of a watch, or of a rachet, shaft, or cog-wheel cov-
ered from view in the recesses of a machine for spinning or weaving.
Nevertheless, if its inventor sells a machine of which his invention
forms a part, and allows it to be used without restriction of any kind,
the use is a public one. So, on the other hand, a use necessarily open
158 CHAPTER 3. PATENT
to public view, if made in good faith solely to test the qualities of
the invention, and for the purpose of experiment, is not a public use
City of Elizabeth: 97 U.S. 126 (1878) within the meaning of the statute. City of Elizabeth v. American Nichol-
son Pavement Co..
Tested by these principles, we think the evidence of the com-
plainant herself shows that for more than two years before the appli-
cation for the original le ers there was, by the consent and allowance
of Barnes, a public use of the invention, covered by them. He made
and gave to her two pairs of corset-steels, constructed according to
his device, one in 1855 and one in 1858. They were presented to her
for use. He imposed no obligation of secrecy, nor any condition or
restriction whatever. They were not presented for the purpose of ex-
periment, nor to test their qualities. No such claim is set up in her
testimony. The invention was at the time complete, and there is no
evidence that it was afterwards changed or improved. The donee of
the steels used them for years for the purpose and in the manner de-
signed by the inventor. They were not capable of any other use. She
might have exhibited them to any person, or made other steels of the
same kind, and used or sold them without violating any condition or
restriction imposed on her by the inventor.
According to the testimony of the complainant, the invention was
completed and put to use in 1855. The inventor slept on his rights
for eleven years. Le ers-patent were not applied for till March, 1866.
In the mean time, the invention had found its way into general, and
almost universal, use. A great part of the record is taken up with the
testimony of the manufacturers and venders of corset-steels, show-
ing that before he applied for le ers the principle of his device was
almost universally used in the manufacture of corset-steels. It is fair
to presume that having learned from this general use that there was
some value in his invention, he a empted to resume, by his applica-
tion, what by his acts he had clearly dedicated to the public.
An abandonment of an invention to the public may be
evinced by the conduct of the inventor at any time, even
within the two years named in the law. The effect of the
law is that no such consequence will necessarily follow
from the invention being in public use or on sale, with the
inventor’s consent and allowance, at any time within two
years before his application; but that, if the invention is
in public use or on sale prior to that time, it will be con-
clusive evidence of abandonment, and the patent will be
void.
City of Elizabeth We are of opinion that the defence of two years’ pub-
lic use, by the consent and allowance of the inventor, before he made
application for le ers-patent, is satisfactorily established by the evi-
C. OWNERSHIP 159
dence.
Lough v. Brunswick Corp
86 F.3d 1113 (Fed. Cir. 1996)
[Lough designed an improved seal for outboard motors.] After some
trial and error with his grand-father’s metal lathe, he made six usable
prototypes in the spring of 1986. He installed one prototype in his
own boat at home. Three months later, he gave a second prototype
to a friend who installed it in his boat. He also installed prototypes in
the boat of the owner of the marina where he worked and in the boat
of a marina customer. He gave the remaining prototypes to longtime
friends who were employees at another marina in Sarasota. Lough
did not charge anyone for the prototypes. For over a year following
the installation of these prototypes, Lough neither asked for nor re-
ceived any comments about the operability of the prototypes. During
this time, Lough did not a empt to sell any seal assemblies.
On June 6, 1988, Lough filed a patent application entitled ”Liquid
Seal for Marine Stern Drive Gear Shift Shafts,” which issued as [U.S.
Patent No. 4,848,775A patent on July 18, 1989.
One is entitled to a patent unless, inter alia, ”the invention was ...
in public use ... in this country, more than one year prior to the date
of the application for patent in the United States.” . We have defined 35 U.S.C. § 102(b) (1994)
”public use” as including any use of the claimed invention by a per-
son other than the inventor who is under no limitation, restriction or
obligation of secrecy to the inventor. An evaluation of a question of
public use depends on how the totality of the circumstances of the
case comports with the policies underlying the public use bar. These
policies include: (1) discouraging the removal, from the public do-
main, of inventions that the public reasonably has come to believe are
freely available; (2) favoring the prompt and widespread disclosure
of inventions; (3) allowing the inventor a reasonable amount of time
following sales activity to determine the potential economic value of
a patent; and (4) prohibiting the inventor from commercially exploit-
ing the invention for a period greater than the statutorily prescribed
time.
Neither party disputes that Lough’s prototypes were in use before
the critical date. Thus, both parties agree that the issue presented on
appeal is whether the jury properly decided that the use of Lough’s
six prototypes in 1986, prior to the critical date, constituted experi-
mental use so as to negate the conclusion of public use.
”The use of an invention by the inventor himself, or of any other
person under his direction, by way of experiment, and in order to
bring the invention to perfection, has never been regarded as [a pub-
lic] use.” City of Elizabeth. This doctrine is based on the underlying
policy of providing an inventor time to determine if the invention is
suitable for its intended purpose, in effect, to reduce the invention
160 CHAPTER 3. PATENT
to practice. See id. (”It is sometimes said that an inventor acquires
an undue advantage over the public by delaying to take out a patent,
but this cannot be said with justice when the delay is occasioned by
a bona fide effort to bring his invention to perfection, or to ascertain
whether it will answer the purpose intended.”). If a use is experi-
mental, it is not, as a ma er of law, a public use within the meaning
of section 102.
To determine whether a use is ”experimental,” a question of law,
the totality of the circumstances must be considered, including vari-
ous objective indicia of experimentation surrounding the use, such as
the number of prototypes and duration of testing, whether records or
progress reports were made concerning the testing, the existence of
a secrecy agreement between the patentee and the party performing
the testing, whether the patentee received compensation for the use
of the invention, and the extent of control the inventor maintained
over the testing.
In order to justify a determination that legally sufficient experi-
mentation has occurred, there must be present certain minimal indi-
cia. The framework might be quite formal, as may be expected when
large corporations conduct experiments, governed by contracts and
explicit wri en obligations. When individual inventors or small busi-
ness units are involved, however, less formal and seemingly casual
experiments can be expected. Such less formal experiments may be
deemed legally sufficient to avoid the public use bar, but only if they
demonstrate the presence of the same basic elements that are required
to validate any experimental program.
It cannot be reasonably disputed that Lough’s use of the invention
was not ”experimental” so as to negate a conclusion of public use. It
is true that Lough did not receive any compensation for the use of the
prototypes. He did not place the seal assembly on sale before apply-
ing for a patent. Lough’s lack of commercialization, however, is not
dispositive of the public use question in view of his failure to present
objective evidence of experimentation. Lough kept no records of the
alleged testing. Nor did he inspect the seal assemblies after they had
been installed by other mechanics. He provided the seal assemblies
to friends and acquaintances, but without any provision for follow-
up involvement by him in assessment of the events occurring during
the alleged experiments, and at least one seal was installed in a boat
that was later sold to strangers. Thus, Lough did not maintain any
supervision and control over the seals during the alleged testing.
Lough argues that other evidence supports a finding that his uses
were experimental, including his own testimony that the prototypes
were installed for experimental purposes and the fact that the proto-
types were used in such a manner that they were unlikely to be seen
by the public. However, the expression by an inventor of his subjec-
C. OWNERSHIP 161
tive intent to experiment, particularly after institution of litigation, is
generally of minimal value. n addition, the fact that the prototypes
were unlikely to be seen by the public does not support Lough’s po-
sition. As the Supreme Court stated in Egbert:
Some inventions are by their very character only capable
of being used where they cannot be seen or observed by
the public eye. An invention may consist of a lever or
spring, hidden in the running gear of a watch, or of a ra-
chet, shaft, or cogwheel covered from view in the recesses
of a machine for spinning or weaving. Nevertheless, if its
inventor sells a machine of which his invention forms a
part, and allows it to be used without restriction of any
kind, the use is a public one.
Moreover, those to whom he gave the prototypes constituted ”the
public,” in the absence of meaningful evidence of experimentation.
We therefore hold that the jury had no legal basis to conclude that
the uses of Lough’s prototypes were experimental and that the pro-
totypes were not in public use prior to the critical date. Our holding
is consistent with the policy underlying the experimental use nega-
tion, that of providing an inventor time to determine if the invention
is suitable for its intended purpose, i.e., to reduce the invention to
practice. Lough’s activities clearly were not consistent with that pol-
icy. We do not dispute that it may have been desirable in this case
for Lough to have had his prototypes installed by mechanics of vari-
ous levels of skill in boats that were exposed to different conditions.
Moreover, Lough was free to test his invention in boats of friends
and acquaintances to further verify that his invention worked for its
intended purpose; however, Lough was required to maintain some
degree of control and feedback over those uses of the prototypes if
those tests were to negate public use.
4 "on sale"
The old § 102 used the phrase ”on sale,” as does the new § 102, so
the AIA would appear to have left the law here unchanged. But, as
it does with ”public use,” the PTO now takes the position that the
AIA no longer reaches secret commercialization. In its view, a secret
sale – for example, one subject to a confidentiality agreement – is not
”available to the public” and thus does not count as prior art. Again,
commentators are split and the courts have not yet se led the ques-
tion. Bracket the issue for now; we still need to understand what it
means for something to be ”on sale” at all.
Manual of Patent Examination Procedure (Rev. Nov. 2013) § 2152.02(d)
On Sale
162 CHAPTER 3. PATENT
The pre-AIA case law indicates that on sale activity will bar
patentability if the claimed invention was: (1) the subject of a com-
mercial sale or offer for sale, not primarily for experimental purposes;
Pfaff : 525 U.S. 55 (1998) and (2) ready for patenting. See Pfaff v. Wells Elecs., Inc.. Contract law
principles apply in order to determine whether a commercial sale or
offer for sale occurred.
§ 2133.03(b)
A sale is a contract between parties wherein the seller agrees to give
"On Sale" (describing pre-AIA law) and to pass rights of property in return for the buyer’s payment or
promise “to pay the seller for the things bought or sold.. A contract
for the sale of goods requires a concrete offer and acceptance of that
offer. See, e.g., Linear Tech. Corp. v. Micrel, Inc., 275 F.3d at 1040 (2001)
(Court held there was no sale where prospective purchaser submi ed
an order for goods at issue, but received an order acknowledgement
reading “will advise-not booked.” Prospective purchaser would un-
derstand that order was not accepted.).
An assignment or sale of the rights in the invention and potential
patent rights is not a sale of ”the invention.” In re Kollar, 286 F.3d 1326
(Fed. Cir. 2002), distinguishes licenses which trigger the on-sale bar
(e.g., a standard computer software license wherein the product is
just as immediately transferred to the licensee as if it were sold), from
licenses that merely grant rights to an invention which do not per se
trigger the on-sale bar (e.g., exclusive rights to market the invention
or potential patent rights).
2133.03(c)
The Supreme Court’s “ready for patenting” prong applies in the con-
The “Invention” (describing pre-AIA text of both the on sale and public use bars. “Ready for patenting,”
law) the second prong of the Pfaff test, may be satisfied in at least two ways:
by proof of reduction to practice before the critical date; or by proof
that prior to the critical date the inventor had prepared drawings or
other descriptions of the invention that were sufficiently specific to
enable a person skilled in the art to practice the invention. In Invit-
rogen Corp. v. Biocrest Manufacturing L.P., 424 F.3d 1374 (Fed. Cir.
2005), The patent was held invalid because the invention for a com-
puter chip socket was “ready for patenting” when it was offered for
sale more than one year prior to the application filing date. Even
though the invention had not yet been reduced to practice, the manu-
facturer was able to produce the claimed computer chip sockets using
the inventor’s detailed drawings and specifications, and those sock-
ets contained all elements of invention claimed in the patent.
5 "otherwise available to the public"
The old § 102 had a closed list of prior art categories. The open-ended
language ”otherwise available to the public” is new with the AIA. In
C. OWNERSHIP 163
the PTO’s view, ”This ’catch-all’ provision permits decision makers
to focus on whether the disclosure was ’available to the public,’ rather
than on the means by which the claimed invention became available
to the public or whether a disclosure constitutes a ’printed publica-
tion’ or falls within another category of prior art.” MPEP § 2152.02(e)
b Anticipation
Manual of Patent Examination Procedure
A claimed invention may be rejected under 35 U.S.C. 102 when the
§ 2131
invention is anticipated (or is “not novel”) over a disclosure that is Anticipation -- Application of 35 U.S.C.
available as prior art. To anticipate a claim, the disclosure must teach § 102
every element of the claim.
A claim is anticipated only if each and every element as set forth in
the claim is found, either expressly or inherently described, in a single
prior art reference. “When a claim covers several structures or com-
positions, either generically or as alternatives, the claim is deemed
anticipated if any of the structures or compositions within the scope
of the claim is known in the prior art.” Brown v. 3M, 265 F.3d 1349
(Fed. Cir. 2001) (claim to a system for se ing a computer clock to
an offset time to address the Year 2000 (Y2K) problem, applicable to
records with year date data in “at least one of two-digit, three-digit,
or four-digit” representations, was held anticipated by a system that
offsets year dates in only two-digit formats). The elements must be
arranged as required by the claim, but this is not an ipsissimis verbis
test, i.e., identity of terminology is not required.
A generic claim cannot be allowed to an applicant if the prior art dis-
§ 2131.02
closes a species falling within the claimed genus. The species in that Genus-Species Situations
case will anticipate the genus.
A genus does not always anticipate a claim to a species within
the genus. However, when the species is clearly named, the species
claim is anticipated no ma er how many other species are addition-
ally named. See Ex parte A, 17 USPQ 2d 1716 (BPAI 1990) (”The tenth
edition of the Merck Index lists ten thousand compounds. In our view,
each and every one of those compounds is ‘described’ as that term is
used in [pre-AIA] 35 U.S.C. § 102(a), in that publication.”).
Whether a generic disclosure necessarily anticipates everything
within the genusdepends on the factual aspects of the specific disclo-
sure and the particular products at issue. How one of ordinary skill
in the art would understand the relative size of a genus or species in
a particular technology is of critical importance.
In In re Petering, the prior art disclosed a generic chemical for-
mula “wherein X, Y, Z, P, and R’- represent either hydrogen or alkyl
164 CHAPTER 3. PATENT
radicals, R a side chain containing an OH group.” The court held
that this formula, without more, could not anticipate a claim to 7-
methyl-9-[d, l’-ribityl]-isoalloxazine because the generic formula en-
compassed a vast number and perhaps even an infinite number of
compounds. However, the reference also disclosed preferred sub-
stituents for X, Y, Z, P, R, and R. The court determined that this more
limited generic class consisted of about 20 compounds. The limited
number of compounds covered by the preferred formula in combi-
nation with the fact that the number of substituents was low at each
site, the ring positions were limited, and there was a large unchanging
structural nucleus, resulted in a finding that the reference sufficiently
described “each of the various permutations here involved as fully as
if he had drawn each structural formula or had wri en each name.”
The claimed compound was 1 of these 20 compounds. Therefore, the
reference “described” the claimed compound and the reference antic-
ipated the claims.
§ 2121
When the reference relied on expressly anticipates or makes obvious
Prior Art; General Level of Operability all of the elements of the claimed invention, the reference is presumed
Required to Make a Prima Facie Case to be operable. Once such a reference is found, the burden is on ap-
plicant to provide facts rebu ing the presumption of operability.
A prior art reference provides an enabling disclosure and thus an-
ticipates a claimed invention if the reference describes the claimed in-
vention in sufficient detail to enable a person of ordinary skill in the
art to carry out the claimed invention; proof of efficacy is not required
for a prior art reference to be enabling for purposes of anticipation.
Titanium Metals Corp. of America v. Banner
778 F.2d 775 (Fed. Cir. 1985)
This appeal is from an Order of the United States District Court for the
District of Columbia in a civil action brought pursuant to 35 U.S.C. §
145 against Donald W. Banner as Commissioner of Patents and Trade-
marks authorizing the Commissioner to issue to appellee a patent
containing claims 1, 2, and 3 of patent application serial No. 598,935
for “TITANIUM ALLOY.” The Commissioner has appealed. We re-
verse.
B
The inventors, Loren C. Covington and Howard R. Palmer, employ-
ees of appellee to whom they have assigned their invention and the
application thereon, filed an application on March 29, 1974, serial
No. 455,964, to patent an alloy they developed. The application in-
volved in this appeal contains the three claims on appeal. The alloy is
made primarily of titanium (Ti) and contains small amounts of nickel
(Ni) and molybdenum (Mo) as alloying ingredients to give the alloy
C. OWNERSHIP 165
certain desirable properties, particularly corrosion resistance in hot
brine solutions, while retaining workability so that articles such as
tubing can be fabricated from it by rolling, welding and other tech-
niques. The inventors apparently also found that iron content should
be limited, iron being an undesired impurity rather than an alloying
ingredient. They determined the permissible ranges of the compo-
nents, above and below which the desired properties were not ob-
tained. A precise definition of the invention sought to be patented
is found in the claims, set forth below, claim 3 representing the pre-
ferred composition, it being understood, however, that no iron at all
would be even more preferred.
1. A titanium base alloy consisting essentially by weight of about
0.6
2. A titanium base alloy as set forth in Claim 1 having up to 0.1
3. A titanium base alloy as set forth in Claim 1 having 0.8
The examiner’s final rejection, repeated in his Answer on appeal to
the Patent and Trademark Office (PTO) Board of Appeals (board),
was on the grounds that claims 1 and 2 are anticipated (fully met)
by, and claim 3 would have been obvious from, an article by Kal-
abukhova and Mikheyew, Investigation of the Mechanical Properties of
Ti-Mo-Ni Alloys, R M ₍M ₎ No. 3, pages 130-133
(1970) (in the court below and hereinafter called “the Russian article”)
under 35 U.S.C. §§ 102 and 103, respectively. The board affirmed the
examiner’s rejection.
The Russian article is short (3 pages), highly technical, and con-
tains 10 graphs as part of the discussion. As its title indicates, it re-
lates to ternary Ti-Mo-Ni alloys, the subject of the application at bar.
The examiner and the board both found that it would disclose to one
skilled in the art an alloy on which at least claims 1 and 2 read, so that
those claims would not be allowable under the statute because of lack
of novelty of their subject ma er. Since the article does not specif-
ically disclose such an alloy in words, a li le thinking is required
about what it would disclose to one knowledgeable about Ti-Ni-Mo
alloys. The PTO did that thinking as follows:
Figure 1c [a graph] shows data for the ternary titanium al-
loy which contains Mo and Ni in the ratio of 1:3. Amongst
the actual points on the graph is one at 1% Mo + Ni. At
this point, the amounts of Mo and Ni would be 0.25% and
0.75% respectively. A similar point appears on the graph
shown in Figure 2 of the article.
Appellants do not deny that the data points are dis-
closed in the reference. In fact, the Hall affidavit indi-
cates at least two specific points (at 1% and 1.25% Mo +
166 CHAPTER 3. PATENT
Ni) which would represent a description of alloys falling
within the scope of the instant claims.
On that basis, the board found that the claimed alloys were not new,
because they were disclosed in the prior art. It having been argued
that the Russian article contains no disclosure of corrosion-resistant
properties of any of the alloys, the board held: “The fact that a par-
ticular property or the end use for this alloy as contemplated by ap-
pellants was not recognized in the article is of no consequence.” It
therefore held the Russian article to be an anticipation, noting that
although the article does not discuss corrosion resistance, it does dis-
close other properties such as strength and ductility. The PTO further
points out that the authors of the reference must have made the alloys
to obtain the data points.
Being dissatisfied with the decision of the board, Titanium Metals
Corporation of America, as assignee of the Covington and Palmer ap-
plication, then brought an action in the District Court for the District
of Columbia against the Commissioner pursuant to 35 U.S.C. § 145.
The case came on for trial on January 24, 1980, before the Honor-
able John G. Penn and was concluded in two and a half hours. The tes-
timony of one witness was heard by the court, Dr. James C. Williams,
professor at Carnegie-Mellon University in Pi sburgh and an expert
in titanium metallurgy.
The court then concluded that claims 1-3 were not anticipated and
that claim 3 was wrongly rejected as directed to obvious subject mat-
ter. In the court’s view, Dr. Williams’ testimony tipped the scales in
favor of issuing a patent.
A. Anticipation, § 102
We are left in no doubt that the court was impressed by the totality of
the evidence that the applicants for patent had discovered or invented
and disclosed knowledge which is not to be found in the reference,
nor do we have any doubt about that ourselves. But those facts are
beside the point. The patent law imposes certain fundamental condi-
tions for patentability, paramount among them being the condition
that what is sought to be patented, as determined by the claims, be
new. The title of the application here involved is “Titanium Alloy,”
a composition of ma er. Surprisingly, in all of the evidence, nobody
discussed the key issue of whether the alloy was new, which is the
essence of the anticipation issue, including the expert Dr. Williams.
Plaintiff’s counsel, bringing Dr. Williams’ testimony to its climax, af-
ter he had explained the nature of the ingredients, the alloys made
therefrom, and their superior corrosion resistance in hot brine, etc.,
repetitively asked him such questions as “Does the [Russian] article
direct you as one skilled in the art to a titanium alloy having nickel
C. OWNERSHIP 167
present in an amount between .6 and .9 percent molybdenum in an
amount between .2 and .4 percent?” (emphasis ours) followed by “Is
there anything mentioned in the article about corrosion resistance?”
Of course, the answers were emphatically negative. But this and like
testimony does not deal with the critical question: do claims 1 and
2, to which the questions obviously relate, read on or encompass an
alloy which was already known by reason of the disclosure of the
Russian article?
Section 102, the usual basis for rejection for lack of novelty or an-
ticipation, lays down certain principles for determining the novelty
[of an invention], among which are the provisions in § 102(a) and (b)
that the claimed invention has not been “described in a printed publi-
cation in this or a foreign country,” either (a) before the invention by
the applicant or (b) more than one year before the application date to
which he is entitled (strictly a “loss of right” provision similar to nov-
elty). Either provision applies in this case, the Russian article having
a date some 5 years prior to the filing date and its status as “prior art”
not being questioned. The question, therefore, is whether claims 1
and 2 encompass and, if allowed, would enable plaintiff-appellee to
exclude others from making, using, or selling an alloy described in
the Russian article.
To answer the question we need only turn to the affidavit of James
A. Hall, a metallurgist employed by appellee’s TIMET Division, who
undertook to analyze the Russian article disclosure by calculating the
ingredient percentages shown in the graph data points, which he pre-
sented in tabular form. There are 15 items in his table. The second
item shows a titanium base alloy containing 0.25% by weight Mo and
0.75% Ni and this is squarely within the ranges of 0.2-0.4% Mo and
0.6-0.9% Ni of claims 1 and 2. As to that disclosed alloy of the prior
art, there can be no question that claims 1 and 2 read on it and would
be infringed by anyone making, using, or selling it. Therefore, the
statute prohibits a patent containing them. This seems to be a case
either of not adequately considering the novelty requirement of the
statute, the true meaning of the correlative term “anticipation,” or the
meaning of the claims.
By reason of the court’s quotations from cases holding that a ref-
erence is not an anticipation which does not enable one skilled in the
art to practice the claimed invention, it appears that the trial court
thought there was some deficiency in the Russian article on that score.
Enablement in this case involves only being able to make the alloy,
given the ingredients and their proportions without more. The evi-
dence here, however, clearly answers that question in two ways. Ap-
pellee’s own patent application does not undertake to tell anyone
how to make the alloy it describes and seeks to patent. It assumes
that those skilled in the art would know how. Secondly, appellee’s
168 CHAPTER 3. PATENT
expert, Dr. Williams, testified on cross examination that given the
alloy information in the Russian article, he would know how to pre-
pare the alloys “by at least three techniques.” Enablement is not a
problem in this case.
As we read the situation, the court was misled by the arguments
and evidence to the effect that the inventors here found out and dis-
closed in their application many things that one cannot learn from
reading the Russian article and that this was sufficient in law to justify
granting them a patent for their contributions—such things as what
good corrosion resistance the claimed alloys have against hot brine,
which possibly was not known, and the range limits of the Ni and Mo
content, outside of which that resistance diminishes, which are teach-
ings of very useful information. These things the applicants teach the
art and the Russian article does not. But throughout the trial counsel
never came to grips with the real issues: (1) what do the claims cover
and (2) is what they cover new? Under the laws Congress wrote, they
must be considered. Congress has not seen fit to permit the patenting
of an old alloy, known to others through a printed publication, by one
who has discovered its corrosion resistance or other useful properties,
or has found out to what extent one can modify the composition of
the alloy without losing such properties.
In hindsight, is there a claim that the
For all of the foregoing reasons, the court below commi ed clear
patentee's counsel could have drafted
that would have captured the newly-
error and legal error in authorizing the issuance of a patent on claims
discovered properties of the alloy (cor- 1 and 2 since, properly construed, they are anticipated under § 102
rosion resistance in hot brine) without by the Russian article which admi edly discloses an alloy on which
being anticipated by the Russian arti- these claims read.
cle?
B. Obviousness, § 103
Li le more need be said in support of the examiner’s rejection of claim
3, affirmed by the board, on the ground that its more specific subject
ma er would have been obvious at the time the invention was made
from the knowledge disclosed in the reference.
As admi ed by appellee’s affidavit evidence from James A. Hall,
the Russian article discloses two alloys having compositions very
close to that of claim 3, which is 0.3% Mo and 0.8% Ni, balance ti-
tanium. The two alloys in the prior art have 0.25% Mo-0.75% Ni and
0.31% Mo-0.94% Ni, respectively. The proportions are so close that
prima facie one skilled in the art would have expected them to have
the same properties. Appellee produced no evidence to rebut that
prima facie case. The specific alloy of claim 3 must therefore be con-
sidered to have been obvious from known alloys.
C. OWNERSHIP 169
c Priority
1 Old § 102
A person shall be entitled to a patent unless –
(a) the invention was [prior art by someone else] before the As hinted above, the categories of prior
invention thereof by the applicant for patent, or art under the old § 102 varied signif-
icantly from subsection to subsection.
(b) the invention was [prior art by anyone] more than one year It's not necessary to get into the de-
prior to the date of the application for patent, or tails to understand the modern prior-
(g) before such person’s invention thereof, the invention was ity rules. Some additional subsections
have been omitted. Old § 102 was ab-
made by another inventor who had not abandoned, sup- surdly intricate.
pressed, or concealed it. In determining priority of inven-
tion under this subsection, there shall be considered not
only the respective dates of conception and reduction to
practice of the invention, but also the reasonable diligence
of one who was first to conceive and last to reduce to prac-
tice, from a time prior to conception by the other.
Pay a ention to the structural differences between old subsections
(a), (b), and (g). Old § 102(a) was a novelty provision: it denied a
patent where someone else engaged in activity showing that the ap-
plicant’s invention was not novel when it was supposedly ”invented.”
Old § 102(b) was a statutory bar: it denied a patent to an applicant
who waited too long to apply. And old § 102(g) was a truepriority
provision that dealt with the non-uncommon situation in which two
parties independently came up with the same invention and neither
of them generated prior art that would block the other’s application.
To apply old § 102(a), it was necessary to break down the inven-
tive process. The basic concepts were ”invention” (i.e. ”conception”),
”reduction to practice,” and ”reasonable diligence,” which the follow-
ing materials gloss.
Manual of Patent Examination Procedure
Pre-AIA 35 U.S.C. 102(g) issues such as conception, reduction to prac- § 2138
tice and diligence, while more commonly applied to interference mat- Pre-AIA 35 U.S.C. 102(g)
ters, also arise in other contexts.
Subsection (g) of pre-AIA 35 U.S.C. 1§ 02 is the basis of interfer-
ence practice for determining priority of invention between two par-
ties. An interference is an inter partes proceeding directed at deter-
mining the first to invent as among the parties to the proceeding, in-
volving two or more pending applications naming different inven-
tors or one or more pending applications and one or more unexpired
170 CHAPTER 3. PATENT
patents naming different inventors. The United States [was] unusual
in having a first to invent rather than a first to file system. Upon con-
clusion of an interference, subject ma er claimed by the losing party
that was the basis of the interference is rejected under pre-AIA 35
U.S.C. 102(g).
Conception has been defined as “the complete performance of the
mental part of the inventive act” and it is “the formation in the mind
of the inventor of a definite and permanent idea of the complete and
operative invention as it is thereafter to be applied in practice.” Con-
ception is established when the invention is made sufficiently clear
to enable one skilled in the art to reduce it to practice without the ex-
ercise of extensive experimentation or the exercise of inventive skill.
Conception has also been defined as a disclosure of an invention
which enables one skilled in the art to reduce the invention to a prac-
tical form without “exercise of the inventive faculty.” It is se led that
in establishing conception a party must show possession of every fea-
ture recited in the count, and that every limitation of the count must
have been known to the inventor at the time of the alleged conception.
Hitzeman: 243 F.3d 1345 (Fed. Cir. Conception must be proved by corroborating evidence. In Hi eman
2001) v. Ru er, the inventor’s “hope” that a genetically altered yeast would
produce antigen particles having the particle size and sedimentation
rates recited in the claims did not establish conception, since the in-
ventor did not show that he had a “definite and permanent under-
standing” as to whether or how, or a reasonable expectation that, the
yeast would produce the recited antigen particles. There must be a
contemporaneous recognition and appreciation of the invention for
there to be conception. On rare occasions conception and reduction
to practice occur simultaneously.
Reduction to practice may be an actual reduction or a constructive
reduction to practice which occurs when a patent application on the
claimed invention is filed. The filing of a patent application serves as
conception and constructive reduction to practice of the subject mat-
ter described in the application. Thus the inventor need not provide
evidence of either conception or actual reduction to practice when
relying on the content of the patent application.
In an interference proceeding, a party seeking to establish an ac-
tual reduction to practice must satisfy a two-prong test: (1) the party
constructed an embodiment or performed a process that met every
element of the interference count, and (2) the embodiment or process
operated for its intended purpose. Actual reduction to practice re-
quires a showing of the invention in a physical or tangible form that
shows every element of the count. For an actual reduction to practice,
the invention must have been sufficiently tested to demonstrate that
it will work for its intended purpose, but it need not be in a commer-
cially satisfactory stage of development. If a device is so simple, and
C. OWNERSHIP 171
its purpose and efficacy so obvious, construction alone is sufficient
to demonstrate workability. The invention must be recognized and
appreciated for a reduction to practice to occur. An inventor need not
understand precisely why his invention works in order to achieve an
actual reduction to practice.
Morway v. Bondi
203 F.2d 742 (CCPA 1953)
[Morway (appellants) conceived on or before April 12, 1945 and filed
on December 27, 1946. Bondi (appellees) conceived on June 14, 1945
and filed on October 31, 1945. Both parties were entitled to construc-
tive reduction to practice as of their filing dates.]
Appellants contend that there was a reduction to practice between
January 31, 1945 and March 13, 1945. It is claimed that on January 30,
1945 Beerbower, one of the joint appellants herein, compounded a
grease containing Carbowax 1500, which grease is said to meet the is-
sue counts. That grease was subjected to a standard Norma-Hoffman
oxidation test. It is claimed that the results of this test were good, and
counsel for Morway et al. contends that there was an actual reduction
to practice when this grease was successfully tested.
Mr. Alan Beerbower, one of the appellants herein, testified on
cross-examination that the Norma-Hoffman bomb test merely mea-
sures resistance of the grease to oxidation under static or storage con-
ditions, but not under service conditions; and that he would not be
able to predict service life from Norma-Hoffman bomb results. In
view of the foregoing testimony by appellants’ expert witnesses, we
think it clear that a successful Norma-Hoffman laboratory test falls
far short of simulating actual service tests with sufficient closeness to
constitute a reduction to practice.
Thus, appellants, although first to conceive, were last to reduce
to practice. If they are to prevail, they must affirmatively establish
continuing and reasonable diligence in reducing to practice or rea-
sonable excuse for failure to act. Such diligence must be shown from
a date immediately prior to the time that Bondi conceived, on June
14, 1945, until reduction to practice by themselves as first conceivers.
The record shows the following activities by appellants:
• On June 7, August 1, August 15, and September 28, 1945, greases
meeting the counts were prepared, and laboratory tests, such as
the A.S.T.M. penetration test, were conducted on them.
• On October 2, 1945, Miss O’Halloran conducted a Ford Wheel
Bearing Test on the grease prepared September 28.
• On December 26, 1945, a grease meeting the counts was pre-
pared, and laboratory tests conducted on it.
• The record then shows further activities (mainly aimed at possi-
ble commercial exploitation of the grease in issue) in February,
172 CHAPTER 3. PATENT
May, August, and November of 1946.
There was no activity at all between June 7 and August 1, 1945,
thereby creating a hiatus of one and one-half months right at the out-
set of the critical period when Bondi entered the field. There is a fur-
ther hiatus of one and one-half months, during the early part of the
critical period, from August 15 to September 28, 1945, when there was
no activity at all by Morway et al. It seems manifest from the above
chronology that the activities by Morway et al. from early June 1945
to December 1946 were quite sporadic throughout that period.
In our opinion, the foregoing activities by appellants do not consti-
tute reasonable diligence in reducing the invention to practice during
the critical period.
Appellants have introduced testimony to the effect that the joint
inventors herein and other assisting members of the research team
which developed the grease of the issue counts had many other
projects and duties. For example, there is testimony indicating that
Mr. Morway’s primary assignment at the time in question was the
development of a carbon black lubricant; and that Mr. Beerbower’s
primary assignment was the development of a continuous process for
manufacturing greases. When the party first to conceive voluntarily
lays aside his inventive concept because he is engrossed in pursuit
of other projects, this is generally not an acceptable excuse for fail-
ure to act diligently in reducing to practice. Clearly there may be
circumstances creating exceptions to this rule, but we find no such
circumstances in this record.
Morway et al. also seek to explain their lack of diligence by refer-
ence to wartime assignments which allegedly took first call on their
time. In proper cases, war activities may reasonably excuse the first
conceiver’s failure to act diligently, but lack of diligence is not ex-
cused by a mere assertion that the applicant was engaged in war work.
We fail to find in the record before us adequate evidence of such war
activities as would excuse appellants’ lack of reasonable diligence.
2 New § 102
The AIA’s novelty provisions took effect on March 16, 2013. They
apply to any applications filed on or after that date. Applications
filed before that date are examined under the old pre-AIA rules.
Patent Act
35 U.S.C. § 102
(a) A person shall be entitled to a patent unless—
Conditions for patentability; novelty (1) the claimed invention was [prior art] before the effective
filing date of the claimed invention; or
C. OWNERSHIP 173
(2) the claimed invention was described in a [published patent
or application that] names another inventor and was effec-
tively filed before the effective filing date of the claimed
invention.
(b) Exceptions. –
(1) A disclosure made 1 year or less before the effective filing
date of a claimed invention shall not be prior art to the
claimed invention under subsection (a)(1) if—
(A) the disclosure was made by the inventor or joint inven-
tor or by another who obtained the subject ma er dis-
closed directly or indirectly from the inventor or a joint
inventor; or
(B) the subject ma er disclosed had, before such disclo-
sure, been publicly disclosed by the inventor or a joint
inventor or another who obtained the subject ma er
disclosed directly or indirectly from the inventor or a
joint inventor.
Do you see why the passage of the AIA is described as taking the
United States from a ”first to invent” system to a ”first inventor to
file” system? And also, in view of Morway, why the AIA’s propo-
nents described it as simplifying interference practice and giving in-
ventors greater certainty about their rights? (Who would have won
in Morway under the AIA?)
The AIA’s proponents also described it as harmonizing the United
States with the rest of the world, where priority is assessed strictly on
a first-to-file basis. The one-year grace period of new § 102(b)(1)(B),
however, is not typical of true first-to-file systems.
Questions
1. Suppose that from 1960 to 1972, the Acme Corporation sold
the Bait-o-Matic, a grey egg-shaped plastic container contain-
ing sharp-grained sand with a grain size of 1/25 of an inch de-
signed to be used to immobilize earthworms. Which claims, if
any, of the Lukehart worm-immobilizing patent are invalid be-
cause they were anticipated by the Bait-o-Matic?
2. Ivan Inventor is working on a new ba ery design. Ivan has iden-
tified promising materials, but has not yet found a way to com-
bine them safely in a sealed container. Ivan is afraid that others
are working on a similar invention. What factors do Ivan and
his patent a orney need to consider in deciding when to file?
174 CHAPTER 3. PATENT
Pleistocene Park Problem
Two biotechnology firms, Crichton Industries and Spielberg Genetics,
have been a empting to clone a wooly mammoth (an elephant-like
mammal that became extinct about 3,500 years ago) from sca ered
preserved DNA fragments. The teams made only slow progress at
first; the available mammoth DNA fragments were too short and too
numerous to combine into a complete DNA sequence using standard
laboratory techniques.
Then, on January 1, 2004, mathematician Rube Goldblum pub-
lished an academic paper describing efficient ways to arrange books
in libraries. Crichton’s lead researcher read the paper on February 2,
2005 and realized that the method Goldblum was describing could
be used to arrange DNA fragments and compile complete DNA se-
quences.
Goldblum published (on March 3, 2006), a follow-up academic pa-
per explaining how to apply his book-sorting method to the problem
of DNA compilation. An executive at Spielberg read the paper on
April 4, 2007, and decided to try the technique on the wooly mam-
moth problem.
On May 5, 2013, in a Crichton laboratory, a modern elephant im-
planted with a wooly mammoth embryo using standard artificial in-
semination techniques gave birth to a live wooly mammoth. On June
6, 2013, a Spielberg elephant successfully gave birth to a wooly mam-
moth. Because both teams started from the same, publicly available
sets of wooly mammoth DNA fragments, their DNA sequences were
identical. The next day, June 7, 2013, Spielberg held a press confer-
ence to announce the birth; it showed video of the baby mammoth
and its scientists passed out CDs with the DNA sequence.
On July 12, 2013, Spielberg filed a patent application claiming “a
wooly mammoth, having the DNA sequence …” Crichton filed its
own patent application on August 20, 2013 with an identical claim.
Which application, if either, should the PTO allow, and why?
Would the answer be different under the old § 102?
3 Nonobviousness
Patent Act
35 U.S.C. § 103
A patent for a claimed invention may not be obtained, notwithstand-
Conditions for patentability; non- ing that the claimed invention is not identically disclosed as set forth
obvious subject matter in section 102, if the differences between the claimed invention and
the prior art are such that the claimed invention as a whole would
have been obvious before the effective filing date of the claimed inven-
tion to a person having ordinary skill in the art to which the claimed
C. OWNERSHIP 175
invention pertains. Patentability shall not be negated by the manner
in which the invention was made.
KSR Intern. Co. v. Teleflex Inc. 550 U.S. 398 (2007)
The patent at issue, United States Patent No. 6,237,565 B1, is enti-
tled “Adjustable Pedal Assembly With Electronic Thro le Control.”
Supplemental App. 1. The patentee is Steven J. Engelgau, and the
patent is referred to as “the Engelgau patent.” Claim 4 of the Engel-
gau patent describes a mechanism for combining an electronic sensor
with an adjustable automobile pedal so the pedal’s position can be
transmi ed to a computer that controls the thro le in the vehicle’s
engine.
In Graham v. John Deere Co., the Court set out a framework for Graham: 383 U.S. 1 (1966)
applying the statutory language of § 103:
Under § 103, the scope and content of the prior art are to
be determined; differences between the prior art and the
claims at issue are to be ascertained; and the level of ordi-
nary skill in the pertinent art resolved. Against this back-
ground the obviousness or nonobviousness of the subject
ma er is determined. Such secondary considerations as
commercial success, long felt but unsolved needs, failure
of others, etc., might be utilized to give light to the cir-
cumstances surrounding the origin of the subject ma er
sought to be patented.
If a court, or patent examiner, conducts this analysis and concludes
the claimed subject ma er was obvious, the claim is invalid under §
103.
Seeking to resolve the question of obviousness with more unifor-
mity and consistency, the Court of Appeals for the Federal Circuit
has employed an approach referred to by the parties as the “teach-
ing, suggestion, or motivation” test (TSM test), under which 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 na-
ture of the problem, or the knowledge of a person having ordinary
skill in the art. KSR challenges that test, or at least its application in
this case.
I
A
In car engines without computer-controlled thro les, the accelerator
pedal interacts with the thro le via cable or other mechanical link.
The pedal arm acts as a lever rotating around a pivot point. In a cable-
actuated thro le control the rotation caused by pushing down the
176 CHAPTER 3. PATENT
pedal pulls a cable, which in turn pulls open valves in the carburetor
or fuel injection unit. The wider the valves open, the more fuel and air
are released, causing combustion to increase and the car to accelerate.
When the driver takes his foot off the pedal, the opposite occurs as the
cable is released and the valves slide closed.
In the 1990’s it became more common to install computers in cars
to control engine operation. Computer-controlled thro les open and
close valves in response to electronic signals, not through force trans-
ferred from the pedal by a mechanical link. Constant, delicate ad-
justments of air and fuel mixture are possible. The computer’s rapid
processing of factors beyond the pedal’s position improves fuel effi-
ciency and engine performance.
For a computer-controlled thro le to respond to a driver’s oper-
ation of the car, the computer must know what is happening with
the pedal. A cable or mechanical link does not suffice for this pur-
pose; at some point, an electronic sensor is necessary to translate the
mechanical operation into digital data the computer can understand.
Before discussing sensors further we turn to the mechanical de-
sign of the pedal itself. In the traditional design a pedal can be pushed
down or released but cannot have its position in the footwell adjusted
by sliding the pedal forward or back. As a result, a driver who wishes
to be closer or farther from the pedal must either reposition himself
in the driver’s seat or move the seat in some way. In cars with deep
footwells these are imperfect solutions for drivers of smaller stature.
To solve the problem, inventors, beginning in the 1970’s, designed
pedals that could be adjusted to change their location in the footwell.
Important for this case are two adjustable pedals disclosed in U.S.
Patent Nos. 5,010,782 (filed July 28, 1989) (Asano) and 5,460,061 (filed
Sept. 17, 1993) (Redding). The Asano patent reveals a support struc-
ture that houses the pedal so that even when the pedal location is ad-
justed relative to the driver, one of the pedal’s pivot points stays fixed.
The pedal is also designed so that the force necessary to push the
pedal down is the same regardless of adjustments to its location. The
Redding patent reveals a different, sliding mechanism where both
the pedal and the pivot point are adjusted.
We return to sensors. Well before Engelgau applied for his chal-
lenged patent, some inventors had obtained patents involving elec-
tronic pedal sensors for computer-controlled thro les. These inven-
tions, such as the device disclosed in U.S. Patent No. 5,241,936 (filed
Sept. 9, 1991) (‘936), taught that it was preferable to detect the pedal’s
position in the pedal assembly, not in the engine. The ‘936 patent dis-
closed a pedal with an electronic sensor on a pivot point in the pedal
assembly. U.S. Patent No. 5,063,811 (filed July 9, 1990) (Smith) taught
that to prevent the wires connecting the sensor to the computer from
chafing and wearing out, and to avoid grime and damage from the
C. OWNERSHIP 177
driver’s foot, the sensor should be put on a fixed part of the pedal
assembly rather than in or on the pedal’s footpad.
In addition to patents for pedals with integrated sensors inventors
obtained patents for self-contained modular sensors. A modular sen-
sor is designed independently of a given pedal so that it can be taken
off the shelf and a ached to mechanical pedals of various sorts, en-
abling the pedals to be used in automobiles with computer-controlled
thro les. One such sensor was disclosed in U.S. Patent No. (filed Dec.
18, 1992) (‘068). In 1994, Chevrolet manufactured a line of trucks us-
ing modular sensors a ached to the pedal support bracket, adjacent
to the pedal and engaged with the pivot shaft about which the pedal
rotates in operation.
The prior art contained patents involving the placement of sensors
on adjustable pedals as well. For example, U.S. Patent No. 5,819,593
(filed Aug. 17, 1995) (Rixon) discloses an adjustable pedal assembly
with an electronic sensor for detecting the pedal’s position. In the
Rixon pedal the sensor is located in the pedal footpad. The Rixon
pedal was known to suffer from wire chafing when the pedal was
depressed and released.
This short account of pedal and sensor technology leads to the
instant case.
B
Engelgau filed the patent application on August 22, 2000 as a con-
tinuation of a previous application for U.S. Patent No. 6,109,241,
which was filed on January 26, 1999. He has sworn he invented the
patent’s subject ma er on February 14, 1998. The Engelgau patent
discloses an adjustable electronic pedal described in the specification
as a “simplified vehicle control pedal assembly that is less expensive,
and which uses fewer parts and is easier to package within the vehi-
cle.” Claim 4 of the patent, at issue here, describes:
A vehicle control pedal apparatus comprising:
a support adapted to be mounted to a vehicle structure;
an adjustable pedal assembly having a pedal arm move-
able in for[e] and aft directions with respect to said sup-
port;
a pivot for pivotally supporting said adjustable pedal as-
sembly with respect to said support and defining a pivot
axis; and
an electronic control a ached to said support for control-
ling a vehicle system;
said apparatus characterized by said electronic control be-
ing responsive to said pivot for providing a signal that cor-
178 CHAPTER 3. PATENT
responds to pedal arm position as said pedal arm pivots
about said pivot axis between rest and applied positions
wherein the position of said pivot remains constant while
said pedal arm moves in fore and aft directions with re-
spect to said pivot.
We agree with the District Court that the claim discloses “a position-
adjustable pedal assembly with an electronic pedal position sensor
a ached to the support member of the pedal assembly. A aching
the sensor to the support member allows the sensor to remain in a
fixed position while the driver adjusts the pedal.”
Before issuing the Engelgau patent the U.S. Patent and Trademark
Office (PTO) rejected one of the patent claims that was similar to, but
broader than, the present claim 4. The claim did not include the re-
quirement that the sensor be placed on a fixed pivot point. The PTO
concluded the claim was an obvious combination of the prior art dis-
closed in Redding and Smith, explaining:
Since the prior art references are from the field of en-
deavor, the purpose disclosed would have been recog-
nized in the pertinent art of Redding. Therefore it would
have been obvious to provide the device of Redding with
the means a ached to a support member as taught by
Smith.
In other words Redding provided an example of an adjustable pedal
and Smith explained how to mount a sensor on a pedal’s support
structure, and the rejected patent claim merely put these two teach-
ings together.
Although the broader claim was rejected, claim 4 was later al-
lowed because it included the limitation of a fixed pivot point, which
distinguished the design from Redding’s. Engelgau had not included
Asano among the prior art references, and Asano was not mentioned
in the patent’s prosecution. Thus, the PTO did not have before it an
adjustable pedal with a fixed pivot point. The patent issued on May
29, 2001 and was assigned to Teleflex.
C
The District Court determined, in light of the expert testimony and
the parties’ stipulations, that the level of ordinary skill in pedal de-
sign was “an undergraduate degree in mechanical engineering (or an
equivalent amount of industry experience) and familiarity with pedal
control systems for vehicles.” Following Graham’s direction, the court
compared the teachings of the prior art to the claims of Engelgau. It
found “li le difference.” Asano taught everything contained in claim
4 except the use of a sensor to detect the pedal’s position and transmit
it to the computer controlling the thro le. That additional aspect was
C. OWNERSHIP 179
revealed in sources such as the ‘068 patent and the sensors used by
Chevrolet.
Under the controlling cases from the Court of Appeals for the Fed-
eral Circuit, however, the District Court was not permi ed to stop
there. The court was required also to apply the TSM test. The Dis-
trict Court held KSR had satisfied the test. It reasoned (1) the state
of the industry would lead inevitably to combinations of electronic
sensors and adjustable pedals, (2) Rixon provided the basis for these
developments, and (3) Smith taught a solution to the wire chafing
problems in Rixon, namely locating the sensor on the fixed structure
of the pedal. This could lead to the combination of Asano, or a pedal
like it, with a pedal position sensor.
The conclusion that the Engelgau design was obvious was sup-
ported, in the District Court’s view, by the PTO’s rejection of the
broader version of claim 4. Had Engelgau included Asano in his
patent application, it reasoned, the PTO would have found claim 4
to be an obvious combination of Asano and Smith, as it had found
the broader version an obvious combination of Redding and Smith.
As a final ma er, the District Court held that the secondary factor
of Teleflex’s commercial success with pedals based on Engelgau’s de-
sign did not alter its conclusion.
With principal reliance on the TSM test, the Court of Appeals re-
versed. It ruled the District Court had not been strict enough in apply-
ing the test, having failed to make “findings as to the specific under-
standing or principle within the knowledge of a skilled artisan that
would have motivated one with no knowledge of the invention to at-
tach an electronic control to the support bracket of the Asano assem-
bly.” The Court of Appeals held that the District Court was incorrect
that the nature of the problem to be solved satisfied this requirement
because unless the “prior art references address[ed] the precise prob-
lem that the patentee was trying to solve,” the problem would not
motivate an inventor to look at those references.
Here, the Court of Appeals found, the Asano pedal was designed
to solve the “constant ratio problem” – that is, to ensure that the
force required to depress the pedal is the same no ma er how the
pedal is adjusted—whereas Engelgau sought to provide a simpler,
smaller, cheaper adjustable electronic pedal. As for Rixon, the court
explained, that pedal suffered from the problem of wire chafing but
was not designed to solve it. In the court’s view Rixon did not teach
anything helpful to Engelgau’s purpose. Smith, in turn, did not relate
to adjustable pedals and did not “necessarily go to the issue of mo-
tivation to a ach the electronic control on the support bracket of the
pedal assembly.” When the patents were interpreted in this way, the
Court of Appeals held, they would not have led a person of ordinary
skill to put a sensor on the sort of pedal described in Asano.
180 CHAPTER 3. PATENT
That it might have been obvious to try the combination of Asano
and a sensor was likewise irrelevant, in the court’s view, because ”’ob-
vious to try’ has long been held not to constitute obviousness.”
II
A
We begin by rejecting the rigid approach of the Court of Appeals.
Throughout this Court’s engagement with the question of obvious-
ness, our cases have set forth an expansive and flexible approach in-
consistent with the way the Court of Appeals applied its TSM test
here. To be sure, Graham recognized the need for “uniformity and
definiteness.” Yet the principles laid down in Graham reaffirmed the
Hotchkiss: 52 U.S. 248 (1851) “functional approach” of Hotchkiss v. Greenwood.
Neither the enactment of § 103 nor the analysis in Graham dis-
turbed this Court’s earlier instructions concerning the need for cau-
tion in granting a patent based on the combination of elements found
in the prior art. For over a half century, the Court has held that
a patent for a combination which only unites old elements with no
change in their respective functions obviously withdraws what is al-
ready known into the field of its monopoly and diminishes the re-
sources available to skillful men. This is a principal reason for declin-
ing to allow patents for what is obvious. The combination of familiar
elements according to known methods is likely to be obvious when
it does no more than yield predictable results. Three cases decided
after Graham illustrate the application of this doctrine.
Adams: 383 U.S. 39 (1966) In United States v. Adams, a companion case to Graham, the Court
considered the obviousness of a “wet ba ery” that varied from prior
designs in two ways: It contained water, rather than the acids con-
ventionally employed in storage ba eries; and its electrodes were
magnesium and cuprous chloride, rather than zinc and silver chlo-
ride. The Court recognized that when a patent claims a structure al-
ready known in the prior art that is altered by the mere substitution
of one element for another known in the field, the combination must
do more than yield a predictable result. It nevertheless rejected the
Government’s claim that Adams’s ba ery was obvious. The Court re-
lied upon the corollary principle that when the prior art teaches away
from combining certain known elements, discovery of a successful
means of combining them is more likely to be nonobvious. When
Adams designed his ba ery, the prior art warned that risks were in-
volved in using the types of electrodes he employed. The fact that the
elements worked together in an unexpected and fruitful manner sup-
ported the conclusion that Adams’s design was not obvious to those
Anderson's Black-Rock: 396 U.S. 57 skilled in the art.
(1969) In Anderson’s-Black Rock, Inc. v. Pavement Salvage Co., the Court
C. OWNERSHIP 181
elaborated on this approach. The subject ma er of the patent be-
fore the Court was a device combining two pre-existing elements: a
radiant-heat burner and a paving machine. The device, the Court con-
cluded, did not create some new synergy: The radiant-heat burner
functioned just as a burner was expected to function; and the paving
machine did the same. The two in combination did no more than
they would in separate, sequential operation. In those circumstances,
“while the combination of old elements performed a useful function,
it added nothing to the nature and quality of the radiant-heat burner
already patented,” and the patent failed under § 103. Compare Adams and Anderson’s Black-
Finally, in Sakraida v. Ag Pro, Inc., the Court derived from the Rock What makes the two cases distin-
guishable
precedents the conclusion that when a patent “simply arranges old
Sakraida: 425 U.S. 273 (1976)
elements with each performing the same function it had been known
to perform” and yields no more than one would expect from such an
arrangement, the combination is obvious..
The principles underlying these cases are instructive when the
question is whether a patent claiming the combination of elements
of prior art is obvious. When a work is available in one field of en-
deavor, design incentives and other market forces can prompt vari-
ations of it, either in the same field or a different one. If a person
of ordinary skill can implement a predictable variation, § 103 likely
bars its patentability. For the same reason, if a technique has been
used to improve one device, and a person of ordinary skill in the art
would recognize that it would improve similar devices in the same
way, using the technique is obvious unless its actual application is
beyond his or her skill. Sakraida and Anderson’s Black-Rock are illus-
trative – a court must ask whether the improvement is more than the
predictable use of prior art elements according to their established
functions.
Following these principles may be more difficult in other cases
than it is here because the claimed subject ma er may involve more
than the simple substitution of one known element for another or the
mere application of a known technique to a piece of prior art ready
for the improvement. Often, it will be necessary for a court to look
to interrelated teachings of multiple patents; the effects of demands
known to the design community or present in the marketplace; and
the background knowledge possessed by a person having ordinary
skill in the art, all in order to determine whether there was an appar-
ent reason to combine the known elements in the fashion claimed by
the patent at issue. To facilitate review, this analysis should be made
explicit. As our precedents make clear, however, the analysis need
not seek out precise teachings directed to the specific subject ma er
of the challenged claim, for a court can take account of the inferences
and creative steps that a person of ordinary skill in the art would em-
ploy.
182 CHAPTER 3. PATENT
B
When it first established the requirement of demonstrating a teach-
ing, suggestion, or motivation to combine known elements in order
to show that the combination is obvious, the Court of Customs and
Patent Appeals captured a helpful insight. As is clear from cases such
as Adams, a patent composed of several elements is not proved obvi-
ous merely by demonstrating that each of its elements was, indepen-
dently, known in the prior art. Although common sense directs one
to look with care at a patent application that claims as innovation
the combination of two known devices according to their established
functions, it can be important to identify a reason that would have
prompted a person of ordinary skill in the relevant field to combine
the elements in the way the claimed new invention does. This is so
because inventions in most, if not all, instances rely upon building
blocks long since uncovered, and claimed discoveries almost of neces-
sity will be combinations of what, in some sense, is already known.
Helpful insights, however, need not become rigid and mandatory
formulas; and when it is so applied, the TSM test is incompatible with
our precedents. The obviousness analysis cannot be confined by a
formalistic conception of the words teaching, suggestion, and moti-
vation, or by overemphasis on the importance of published articles
and the explicit content of issued patents. The diversity of inventive
pursuits and of modern technology counsels against limiting the anal-
ysis in this way. In many fields it may be that there is li le discussion
of obvious techniques or combinations, and it often may be the case
that market demand, rather than scientific literature, will drive de-
sign trends. Granting patent protection to advances that would occur
in the ordinary course without real innovation retards progress and
may, in the case of patents combining previously known elements,
deprive prior inventions of their value or utility.
C
One of the ways in which a patent’s subject ma er can be proved ob-
vious is by noting that there existed at the time of invention a known
problem for which there was an obvious solution encompassed by
the patent’s claims.
The first error of the Court of Appeals in this case was to foreclose
this reasoning by holding that courts and patent examiners should
look only to the problem the patentee was trying to solve. The Court
of Appeals failed to recognize that the problem motivating the paten-
tee may be only one of many addressed by the patent’s subject mat-
ter. The question is not whether the combination was obvious to
the patentee but whether the combination was obvious to a person
with ordinary skill in the art. Under the correct analysis, any need
C. OWNERSHIP 183
or problem known in the field of endeavor at the time of invention
and addressed by the patent can provide a reason for combining the
elements in the manner claimed.
The second error of the Court of Appeals lay in its assumption
that a person of ordinary skill a empting to solve a problem will be
led only to those elements of prior art designed to solve the same
problem. The primary purpose of Asano was solving the constant
ratio problem; so, the court concluded, an inventor considering how
to put a sensor on an adjustable pedal would have no reason to con-
sider pu ing it on the Asano pedal. Common sense teaches, however, In cases in which “common sense” is used
that familiar items may have obvious uses beyond their primary pur- to supply a missing limitation, as dis-
tinct from a motivation to combine, our
poses, and in many cases a person of ordinary skill will be able to
search for a reasoned basis for resort to
fit the teachings of multiple patents together like pieces of a puzzle. common sense must be searching. Ap-
Regardless of Asano’s primary purpose, the design provided an obvi- pellees have failed to show why it would
ous example of an adjustable pedal with a fixed pivot point; and the be common sense for the “Add to address
prior art was replete with patents indicating that a fixed pivot point book” function to operate by first search-
ing for entries with the same telephone
was an ideal mount for a sensor. The idea that a designer hoping
number.
to make an adjustable electronic pedal would ignore Asano because Arendi S.A.R.I. v. Apple, Inc., No. 2015-
Asano was designed to solve the constant ratio problem makes li le 2073, --- F.3d --- (Fed. Cir Aug. 10, 2016).
sense. A person of ordinary skill is also a person of ordinary creativ- SRSLY?
ity, not an automaton.
The same constricted analysis led the Court of Appeals to con-
clude, in error, that a patent claim cannot be proved obvious merely
by showing that the combination of elements was obvious to try.
When there is a design need or market pressure to solve a problem
and there are a finite number of identified, predictable solutions, a
person of ordinary skill has good reason to pursue the known op-
tions within his or her technical grasp. If this leads to the anticipated
success, it is likely the product not of innovation but of ordinary skill
and common sense. In that instance the fact that a combination was
obvious to try might show that it was obvious under § 103.
III
When we apply the standards we have explained to the instant facts,
claim 4 must be found obvious.
B
The District Court was correct to conclude that, as of the time Engel-
gau designed the subject ma er in claim 4, it was obvious to a person
of ordinary skill to combine Asano with a pivot-mounted pedal po-
sition sensor. There then existed a marketplace that created a strong
incentive to convert mechanical pedals to electronic pedals, and the
prior art taught a number of methods for achieving this advance. The
Court of Appeals considered the issue too narrowly by, in effect, ask-
ing whether a pedal designer writing on a blank slate would have
184 CHAPTER 3. PATENT
chosen both Asano and a modular sensor similar to the ones used in
the Chevrolet truckline and disclosed in the ‘068 patent. The proper
question to have asked was whether a pedal designer of ordinary skill,
facing the wide range of needs created by developments in the field
of endeavor, would have seen a benefit to upgrading Asano with a
sensor.
In automotive design, as in many other fields, the interaction of
multiple components means that changing one component often re-
quires the others to be modified as well. Technological developments
made it clear that engines using computer-controlled thro les would
become standard. As a result, designers might have decided to de-
sign new pedals from scratch; but they also would have had reason
to make pre-existing pedals work with the new engines. Indeed, up-
grading its own pre-existing model led KSR to design the pedal now
accused of infringing the Engelgau patent.
For a designer starting with Asano, the question was where to
a ach the sensor. The consequent legal question, then, is whether
a pedal designer of ordinary skill starting with Asano would have
found it obvious to put the sensor on a fixed pivot point. The prior art
discussed above leads us to the conclusion that a aching the sensor
where both KSR and Engelgau put it would have been obvious to a
person of ordinary skill.
The ‘936 patent taught the utility of pu ing the sensor on the pedal
device, not in the engine. Smith, in turn, explained to put the sensor
not on the pedal’s footpad but instead on its support structure. And
from the known wire-chafing problems of Rixon, and Smith’s teach-
ing that “the pedal assemblies must not precipitate any motion in the
connecting wires,” the designer would know to place the sensor on
a nonmoving part of the pedal structure. The most obvious nonmov-
ing point on the structure from which a sensor can easily detect the
pedal’s position is a pivot point. The designer, accordingly, would
follow Smith in mounting the sensor on a pivot, thereby designing
an adjustable electronic pedal covered by claim 4.
Just as it was possible to begin with the objective to upgrade
Asano to work with a computer-controlled thro le, so too was it pos-
sible to take an adjustable electronic pedal like Rixon and seek an
improvement that would avoid the wire-chafing problem. Follow-
ing similar steps to those just explained, a designer would learn from
Smith to avoid sensor movement and would come, thereby, to Asano
because Asano disclosed an adjustable pedal with a fixed pivot.
The Bud Light Foozie consists of a foam
Like the District Court, finally, we conclude Teleflex has shown no
can holder attached to a foam we’re-
number-one finger. Obvious? What
secondary factors to dislodge the determination that claim 4 is obvi-
about a Sawzie -- a foam can holder at- ous. Proper application of Graham and our other precedents to these
tached to a rotary saw? facts therefore leads to the conclusion that claim 4 encompassed obvi-
ous subject ma er. As a result, the claim fails to meet the requirement
C. OWNERSHIP 185
of § 103.
IV
We build and create by bringing to the tangible and palpable real-
ity around us new works based on instinct, simple logic, ordinary
inferences, extraordinary ideas, and sometimes even genius. These
advances, once part of our shared knowledge, define a new thresh-
old from which innovation starts once more. And as progress be-
ginning from higher levels of achievement is expected in the normal
course, the results of ordinary innovation are not the subject of exclu-
sive rights under the patent laws. Were it otherwise patents might
stifle, rather than promote, the progress of useful arts.
In re Clay
Clay’s invention, assigned to Marathon Oil Company, is a process 966 F.2d 656 (Fed. Cir. 1992)
for storing refined liquid hydrocarbon product in a storage tank hav-
ing a dead volume between the tank bo om and its outlet port. The
process involves preparing a gelation solution which gels after it is
placed in the tank’s dead volume; the gel can easily be removed by
adding to the tank a gel-degrading agent such as hydrogen peroxide.
Two prior art references were applied against the claims on ap-
peal. They were U.S. Patent 4,664,294 (Hetherington), which dis-
closes an apparatus for displacing dead space liquid using impervi-
ous bladders, or large bags, formed with flexible membranes; and
U.S. Patent 4,683,949 (Sydansk), also assigned to Clay’s assignee,
Marathon Oil Company, which discloses a process for reducing the
permeability of hydrocarbon-bearing formations and thus improving
oil production, using a gel similar to that in Clay’s invention.
The Board agreed with the examiner that, although neither ref-
erence alone describes Clay’s invention, Hetherington and Sydansk
combined support a conclusion of obviousness. It held that one
skilled in the art would glean from Hetherington that Clay’s inven-
tion “was appreciated in the prior art and solutions to that problem
generally involved filling the dead space with something.”
The Board also held that Sydansk would have provided one
skilled in the art with information that a gelation system would have
been impervious to hydrocarbons once the system gelled. The Board
combined the references, finding that the “cavities” filled by Sydansk
are sufficiently similar to the “volume or void space” being filled by
Hetherington for one of ordinary skill to have recognized the appli-
cability of the gel to Hetherington.
DISCUSSION
The issue presented in this appeal is whether the Board’s conclusion
was correct that Clay’s invention would have been obvious from the
combined teachings of Hetherington and Sydansk.
186 CHAPTER 3. PATENT
A prerequisite to making this finding is determining what is
“prior art.” Although § 103 does not, by its terms, define the “art to
which [the] subject ma er [sought to be patented] pertains,” this de-
termination is frequently couched in terms of whether the art is anal-
ogous or not, i.e., whether the art is too remote to be treated as prior
art. Clay argues that the claims at issue were improperly rejected over
Hetherington and Sydansk, because Sydansk is nonanalogous art.
Two criteria have evolved for determining whether prior art is
analogous: (1) whether the art is from the same field of endeavor,
regardless of the problem addressed, and (2) if the reference is not
within the field of the inventor’s endeavor, whether the reference still
is reasonably pertinent to the particular problem with which the in-
ventor is involved.
The Board found Sydansk to be within the field of Clay’s en-
deavor because, as the Examiner stated, “one of ordinary skill in the
art would certainly glean from Sydansk that the rigid gel as taught
therein would have a number of applications within the manipula-
tion of the storage and processing of hydrocarbon liquids and that the
gel as taught in Sydansk would be expected to function in a similar
manner as the bladders in the Hetherington patent.” These findings
are clearly erroneous.
The PTO argues that Sydansk and Clay’s inventions are part of
a common endeavor – “maximizing withdrawal of petroleum stored
in petroleum reservoirs.” However, Sydansk cannot be considered
to be within Clay’s field of endeavor merely because both relate to
the petroleum industry. Sydansk teaches the use of a gel in uncon-
fined and irregular volumes within generally underground natural
oil-bearing formations to channel flow in a desired direction; Clay
teaches the introduction of gel to the confined dead volume of a man-
made storage tank. The Sydansk process operates in extreme condi-
tions, with petroleum formation temperatures as high as 115°C and
at significant well bore pressures; Clay’s process apparently operates
at ambient temperature and atmospheric pressure. Clay’s field of en-
deavor is the storage of refined liquid hydrocarbons. The field of en-
deavor of Sydansk’s invention, on the other hand, is the extraction of
crude petroleum. The Board clearly erred in considering Sydansk to
be within the same field of endeavor as Clay’s.
Even though the art disclosed in Sydansk is not within Clay’s field
of endeavor, the reference may still properly be combined with Het-
herington if it is reasonably pertinent to the problem Clay a empts to
solve. A reference is reasonably pertinent if, even though it may be in
a different field from that of the inventor’s endeavor, it is one which,
because of the ma er with which it deals, logically would have com-
mended itself to an inventor’s a ention in considering his problem.
Thus, the purposes of both the invention and the prior art are impor-
C. OWNERSHIP 187
tant in determining whether the reference is reasonably pertinent to
the problem the invention a empts to solve. If a reference disclosure
has the same purpose as the claimed invention, the reference relates
to the same problem, and that fact supports use of that reference in
an obviousness rejection. An inventor may well have been motivated
to consider the reference when making his invention. If it is directed
to a different purpose, the inventor would accordingly have had less
motivation or occasion to consider it.
Sydansk’s gel treatment of underground formations functions to
fill anomalies1 so as to improve flow profiles and sweep efficiencies
of injection and production fluids through a formation, while Clay’s
gel functions to displace liquid product from the dead volume of a
storage tank. Sydansk is concerned with plugging formation anoma-
lies so that fluid is subsequently diverted by the gel into the formation
matrix, thereby forcing bypassed oil contained in the matrix toward a
production well. Sydansk is faced with the problem of recovering oil
from rock, i.e., from a matrix which is porous, permeable sedimentary
rock of a subterranean formation where water has channeled through
formation anomalies and bypassed oil present in the matrix. Such a
problem is not reasonably pertinent to the particular problem with
which Clay was involved – preventing loss of stored product to tank
dead volume while preventing contamination of such product.
A person having ordinary skill in the art would not reasonably
have expected to solve the problem of dead volume in tanks for stor-
ing refined petroleum by considering a reference dealing with plug-
ging underground formation anomalies. The Board’s finding to the
contrary is clearly erroneous. Since Sydansk is non-analogous art, the
rejection over Hetherington in view of Sydansk cannot be sustained.
KSR Problem
In relevant part, claim 4 of the patent in suit in KSR comprises:
• A pedal
• that is adjustable
• and has a fixed pivot,
• and a sensor
• that is in the pedal
• and is and mounted on a fixed position
The Court had before it a number of pieces of prior art, and had
1
Sydansk refers to an anomaly, one of two general region types in an oil-bearing
geological formation, as “a volume or void space [e.g., ‘streaks, fractures, fracture
networks, vugs, solution channels, caverns, washouts, cavities, etc.’] in the forma-
tion having very high permeability relative to the matrix [the other region type,
consisting of homogeneous porous rock].”
188 CHAPTER 3. PATENT
to decide whether claim 4 was obvious in light of them. Please look
closely at the Court’s descriptions of the following prior art:
• Asano
• Redding
• ‘936
• Smith
• ‘068
• Certain 1994 Chevrolet trucks
• Rixon
Which of the characteristics of claim 4, as listed above, do each of
these prior art references disclose? Make a chart. What improvements,
if any, does each prior art reference suggest to a person having ordi-
nary skill in the art. Using your chart as a guide, explain whether the
Supreme Court’s analysis is persuasive.
D Infringement: Similarity
76 U. Chi. L. Rev. 719 (2009)
Jeanne C. Fromer
Claiming Intellectual Property
To claim the set of things protected by an intellectual property right,
one might be required to delineate to the public the set’s bounds so
that a third party could determine whether any particular embodi-
ment is a set member thus protected by the right. This sort of claiming
is known as peripheral claiming.” Alternatively, one might publicly
describe only some members of the set, which are clearly protected
under the right, and use them to determine whether other items are
similar enough to the enumerated members to fall also within the
same right. This sort of claiming is known as central claiming, in that
the rightsholder describes the central, or prototypical, set members,
but the right tends to cover a broader, similar set of items.
There is another important dimension on which claiming can
vary, which until now has not been readily appreciated. Either pe-
ripheral or central claiming can be done by exemplar or by charac-
teristic. Claiming by exemplar entails enumerating particular mem-
bers of the set of protected embodiments. In the case of peripheral
claiming by exemplar, one would enumerate each set member, while
for central claiming by exemplar, one would catalog only some set
members. Claiming by characteristic, on the other hand, requires a
description of the essential properties of the set’s members. For pe-
ripheral claiming by characteristic, one would describe the necessary
and sufficient features common to all members of the set of protected
embodiments. And for central claiming by characteristic, one would
D. INFRINGEMENT: SIMILARITY 189
express the features common to at least some central members of the
set of protected embodiments. Claiming by exemplar and by charac-
teristic can be seen as opposing points on a spectrum of how much
distillation of the actual works’ characteristics is necessary.
A statutory change in 1870 – requiring a patent applicant to ”par-
ticularly point out and distinctly claim the part, improvement, or
combination which he claims as his invention or discovery” – offi-
cially (though gradually) brought peripheral claiming, almost always
by characteristic, to American patent law. The Supreme Court held
that, pursuant to this statutory language, the articulated bounds of
the patent claim would govern the scope of the set of things pro-
tected by the patent right. Validity and infringement would thus be
measured by construing the claim’s bounds and then determining
whether particular embodiments fell within those bounds. Charac-
teristic peripheral claiming- – in contrast to central claiming (by char-
acteristic or exemplar) – thus did not require courts to decide which
of an invention’s properties were essential, as the patentee would de-
lineate these qualities in the patent claims.
At least two vestiges of central claiming have remained in the
patent system, namely the doctrine of equivalents and means-plus-
function claims.
190 CHAPTER 3. PATENT
Model Patent Jury Instructions for the Northern District of California
A patent’s claims define what is covered by the patent. A [product]
[method] directly infringes a patent if it is covered by at least one
claim of the patent.
Deciding whether a claim has been directly infringed is a two-step
process. The first step is to decide the meaning of the patent claim.
I have already made this decision, [and I will instruct you later as
to the meaning of the asserted patent claims] [and I have already in-
structed you as to the meaning of the asserted patent claims]. The
second step is to decide whether [alleged direct infringer] has [made,]
[used,] [sold,] [offered for sale] or [imported] within the United States
a [product] [method] covered by a claim of the [ ] patent. If it has, it
infringes. You, the jury, make this decision.
[With one exception,] you must consider each of the asserted
claims of the patent individually, and decide whether [alleged direct
infringer]’s [product] [method] infringes that claim. [The one excep-
tion to considering claims individually concerns dependent claims.
A dependent claim includes all of the requirements of a particular
independent claim, plus additional requirements of its own. As a re-
sult, if you find that an independent claim is not infringed, you must
also find that its dependent claims are not infringed. On the other
hand, if you find that an independent claim has been infringed, you
must still separately decide whether the additional requirements of
its dependent claims have also been infringed.]
There are two ways in which a patent claim may be directly in-
fringed. A claim may be “literally” infringed, or it may be infringed
under the “doctrine of equivalents.”
To decide whether [alleged infringer]’s [product] [method] liter-
ally infringes a claim of the [ ] patent, you must compare that [prod-
uct] [method] with the patent claim and determine whether every
requirement of the claim is included in that [product] [method]. If so,
[alleged infringer]’s [product] [method] literally infringes that claim.
If, however, [alleged infringer]’s [product] [method] does not have
every requirement in the patent claim, [alleged infringer]’s [product]
[method] does not literally infringe that claim. You must decide lit-
eral infringement for each asserted claim separately.
1 Claim Construction
Phillips v. AWH Corp.
415 F.3d 1303 (2005) (en banc)
It is a ”bedrock principle” of patent law that the claims of a patent
define the invention to which the patentee is entitled the right to ex-
clude. We have frequently stated that the words of a claim are gen-
erally given their ordinary and customary meaning. We have made
D. INFRINGEMENT: SIMILARITY 191
clear, moreover, that the ordinary and customary meaning of a claim
term is the meaning that the term would have to a person of ordinary
skill in the art in question at the time of the invention, i.e., as of the
effective filing date of the patent application.
The inquiry into how a person of ordinary skill in the art under-
stands a claim term provides an objective baseline from which to
begin claim interpretation. That starting point is based on the well-
se led understanding that inventors are typically persons skilled in
the field of the invention and that patents are addressed to and in-
tended to be read by others of skill in the pertinent art. S
Importantly, the person of ordinary skill in the art is deemed to
read the claim term not only in the context of the particular claim
in which the disputed term appears, but in the context of the entire
patent, including the specification. This court explained that point
well in Multiform Desiccants, Inc. v. Medzam, Ltd.: Multiform: 133 F.3d 1473 (Fed. Cir.
1998)
It is the person of ordinary skill in the field of the inven-
tion through whose eyes the claims are construed. Such
person is deemed to read the words used in the patent
documents with an understanding of their meaning in the
field, and to have knowledge of any special meaning and
usage in the field. The inventor’s words that are used
to describe the invention – the inventor’s lexicography –
must be understood and interpreted by the court as they
would be understood and interpreted by a person in that
field of technology. Thus the court starts the decisionmak-
ing process by reviewing the same resources as would that
person, viz., the patent specification and the prosecution
history.
B
In some cases, the ordinary meaning of claim language as understood
by a person of skill in the art may be readily apparent even to lay
judges, and claim construction in such cases involves li le more than
the application of the widely accepted meaning of commonly under-
stood words. In such circumstances, general purpose dictionaries
may be helpful. In many cases that give rise to litigation, however, de-
termining the ordinary and customary meaning of the claim requires
examination of terms that have a particular meaning in a field of art.
Because the meaning of a claim term as understood by persons of
skill in the art is often not immediately apparent, and because paten-
tees frequently use terms idiosyncratically, the court looks to those
sources available to the public that show what a person of skill in the
art would have understood disputed claim language to mean. Those
sources include the words of the claims themselves, the remainder of
192 CHAPTER 3. PATENT
the specification, the prosecution history, and extrinsic evidence con-
cerning relevant scientific principles, the meaning of technical terms,
and the state of the art.
1
Quite apart from the wri en description and the prosecution history,
the claims themselves provide substantial guidance as to the meaning
of particular claim terms.
To begin with, the context in which a term is used in the asserted
claim can be highly instructive. To take a simple example, the claim
in this case refers to ”steel baffles,” which strongly implies that the
term ”baffles” does not inherently mean objects made of steel. This
court’s cases provide numerous similar examples in which the use
of a term within the claim provides a firm basis for construing the
term. [Cited cases construed the claim term ”ingredients” in light of
the use of the term ”mixture” in the same claim phrase and the claim
term ”discharge rate” in light of the use of the same term in another
limitation of the same claim.]
Other claims of the patent in question, both asserted and
unasserted, can also be valuable sources of enlightenment as to the
meaning of a claim term. Because claim terms are normally used con-
sistently throughout the patent, the usage of a term in one claim can
often illuminate the meaning of the same term in other claims. Dif-
ferences among claims can also be a useful guide in understanding
the meaning of particular claim terms. For example, 1315*1315 the
presence of a dependent claim that adds a particular limitation gives
rise to a presumption that the limitation in question is not present in
the independent claim.
2
The claims, of course, do not stand alone. Rather, they are part of a
fully integrated wri en instrument, consisting principally of a speci-
fication that concludes with the claims. For that reason, claims must
be read in view of the specification, of which they are a part. The spec-
ification is always highly relevant to the claim construction analysis.
Usually, it is dispositive; it is the single best guide to the meaning of
a disputed term.
The importance of the specification in claim construction derives
from its statutory role. The close kinship between the wri en descrip-
tion and the claims is enforced by the statutory requirement that the
specification describe the claimed invention in ”full, clear, concise,
and exact terms.” In light of the statutory directive that the inven-
tor provide a ”full” and ”exact” description of the claimed invention,
the specification necessarily informs the proper construction of the
claims.
D. INFRINGEMENT: SIMILARITY 193
Consistent with that general principle, our cases recognize that
the specification may reveal a special definition given to a claim term
by the patentee that differs from the meaning it would otherwise pos-
sess. In such cases, the inventor’s lexicography governs. In other
cases, the specification may reveal an intentional disclaimer, or dis-
avowal, of claim scope by the inventor. In that instance as well, the
inventor has dictated the correct claim scope, and the inventor’s in-
tention, as expressed in the specification, is regarded as dispositive.
3
In addition to consulting the specification, we have held that a court
should also consider the patent’s prosecution history, if it is in evi-
dence. The prosecution history, which we have designated as part of
the ”intrinsic evidence,” consists of the complete record of the pro-
ceedings before the PTO and includes the prior art cited during the
examination of the patent. Like the specification, the prosecution his-
tory provides evidence of how the PTO and the inventor understood
the patent. Furthermore, like the specification, the prosecution his-
tory was created by the patentee in a empting to explain and ob-
tain the patent. Yet because the prosecution history represents an
ongoing negotiation between the PTO and the applicant, rather than
the final product of that negotiation, it often lacks the clarity of the
specification and thus is less useful for claim construction purposes.
Nonetheless, the prosecution history can often inform the meaning
of the claim language by demonstrating how the inventor under-
stood the invention and whether the inventor limited the invention
in the course of prosecution, making the claim scope narrower than
it would otherwise be.
C
Although we have emphasized the importance of intrinsic evidence
in claim construction, we have also authorized district courts to rely
on extrinsic evidence, which consists of all evidence external to the
patent and prosecution history, including expert and inventor testi-
mony, dictionaries, and learned treatises. However, while extrinsic
evidence can shed useful light on the relevant art, it is less significant
than the intrinsic record in determining the legally operative meaning
of claim language.
Within the class of extrinsic evidence, dictionaries and treatises
can be useful in claim construction. We have especially noted the
help that technical dictionaries may provide to a court to be er un-
derstand the underlying technology and the way in which one of skill
in the art might use the claim terms. Because dictionaries, and espe-
cially technical dictionaries, endeavor to collect the accepted mean-
ings of terms used in various fields of science and technology, those
194 CHAPTER 3. PATENT
resources have been properly recognized as among the many tools
that can assist the court in determining the meaning of particular ter-
minology to those of skill in the art of the invention. Such evidence,
may be considered if the court deems it helpful in determining the
true meaning of language used in the patent claims.
Extrinsic evidence in the form of expert testimony can be useful to
a court for a variety of purposes, such as to provide background on
the technology at issue, to explain how an invention works, to ensure
that the court’s understanding of the technical aspects of the patent is
consistent with that of a person of skill in the art, or to establish that
a particular term in the patent or the prior art has a particular mean-
ing in the pertinent field. However, conclusory, unsupported asser-
tions by experts as to the definition of a claim term are not useful to a
court. Similarly, a court should discount any expert testimony that is
clearly at odds with the claim construction mandated by the claims
themselves, the wri en description, and the prosecution history, in
other words, with the wri en record of the patent.
We have viewed extrinsic evidence in general as less reliable than
the patent and its prosecution history in determining how to read
claim terms, for several reasons. First, extrinsic evidence by defini-
tion is not part of the patent and does not have the specification’s
virtue of being created at the time of patent prosecution for the pur-
pose of explaining the patent’s scope and meaning. Second, while
claims are construed as they would be understood by a hypothetical
person of skill in the art, extrinsic publications may not be wri en by
or for skilled artisans and therefore may not reflect the understanding
of a skilled artisan in the field of the patent. Third, extrinsic evidence
consisting of expert reports and testimony is generated at the time of
and for the purpose of litigation and thus can suffer from bias that is
not present in intrinsic evidence. The effect of that bias can be exacer-
bated if the expert is not one of skill in the relevant art or if the expert’s
opinion is offered in a form that is not subject to cross-examination.
Fourth, there is a virtually unbounded universe of potential extrinsic
evidence of some marginal relevance that could be brought to bear on
any claim construction question. In the course of litigation, each party
will naturally choose the pieces of extrinsic evidence most favorable
to its cause, leaving the court with the considerable task of filtering
the useful extrinsic evidence from the fluff. Finally, undue reliance
on extrinsic evidence poses the risk that it will be used to change the
meaning of claims in derogation of the indisputable public records
consisting of the claims, the specification and the prosecution history,
thereby undermining the public notice function of patents.
In sum, extrinsic evidence may be useful to the court, but it is
unlikely to result in a reliable interpretation of patent claim scope un-
less considered in the context of the intrinsic evidence. Nonetheless,
D. INFRINGEMENT: SIMILARITY 195
because extrinsic evidence can help educate the court regarding the
field of the invention and can help the court determine what a person
of ordinary skill in the art would understand claim terms to mean, it
is permissible for the district court in its sound discretion to admit
and use such evidence. In exercising that discretion, and in weighing
all the evidence bearing on claim construction, the court should keep
in mind the flaws inherent in each type of evidence and assess that
evidence accordingly.
Thorner v. Sony Computer Entertainment America LLC
669 F.3d 1362 (Fed. Cir. 2012)
Craig Thorner and Virtual Reality Feedback Corporation (Appellants,
collectively) accused Sony Computer Entertainment America LLC
and a number of other Sony entities (Sony, collectively) of infringing
claims of U.S. patent no. 6,422,941 (‘941 patent) relating to a tactile
feedback system for computer video games. The district court con-
strued disputed claim terms and the parties stipulated to a judgment
of noninfringement. Because the district court improperly limited the
term “a ached to said pad” to mean a achment only to an external
surface and erred in its construction of the term “flexible”, we vacate
and remand.
BACKGROUND
The ‘941 patent describes a tactile feedback system for use with video
games. Figure 2 shows the many different embodiments of the inven-
tion:
Tactile feedback controller 110 is part of a larger gaming system
that operates one or more of the devices shown above. Each device
includes some type of actuator that provides tactile feedback to a user
in response to certain game activities. For instance, the actuators in
hand-held game controller 598 may vibrate during a crash in a car rac-
ing game. Independent claim 1 requires “a flexible pad,” “a plurality
of actuators a ached to said pad” and a control circuit that activates
the actuators in response to game activity. The accused products are
hand-held game controllers.
Two claim limitations are relevant to this appeal, “flexible pad”
and “a ached to said pad.” The district court held that flexible does
not mean simply “capable of being flexed.” It reasoned that this def-
inition was inappropriate because “many objects that are capable of
being flexed are not flexible. A steel I-beam is capable of being flexed,
but no one would call it ‘flexible.’” The court thus construed the term
to mean “capable of being noticeably flexed with ease.”
The district court then turned to the construction of “a ached to
said pad.” Appellants argued that a ached should be given its plain
and ordinary meaning and that an actuator can be a ached to the in-
side of an object. Sony argued that “a ached to said pad” should be
196 CHAPTER 3. PATENT
U.S. Patent Jul. 23, 2002 Sheet 2 0f 37 US 6,422,941 B1
@
F LO
U.S. Patent No. 6,422,941, Universal tactile feedback system for com-
puter video games and simulations
D. INFRINGEMENT: SIMILARITY 197
construed as affixed to the exterior surface of the pad and does not
include embedded within said pad. The court held that “the specifi-
cation redefines ‘a ached’ by implication.” The court held that the
word a ached was limited to a ached to the outside of an object be-
cause the embodiments in the specification consistently use the term
“a ached” to indicate affixing an actuator to the outer surface of an
object and use the word “embedded” when referring to an actuator
inside an object. For additional support for the notion that a ached
and embedded have different meanings, the court pointed to claim 1
which uses the word “a ached” and dependent claim 10 which uses
the word “embedded.”
Following claim construction, the parties stipulated to nonin-
fringement by the accused products. They stated that “under the
Court’s construction of the phrase ‘a ached to said pad,’ Defendants
have not infringed....” The stipulation further stated that the “parties
reserve their rights to challenge this or any other construction of the
disputed claim phrases of the ‘941 patent on appeal.”
DISCUSSION
The words of a claim are generally given their ordinary and custom-
ary meaning as understood by a person of ordinary skill in the art
when read in the context of the specification and prosecution history.
See AWH. There are only two exceptions to this general rule: 1) when
a patentee sets out a definition and acts as his own lexicographer, or
2) when the patentee disavows the full scope of a claim term either
in the specification or during prosecution. The use of the term “at-
tached” in this specification does not meet either of these exceptions.
To act as its own lexicographer, a patentee must clearly set forth a
definition of the disputed claim term other than its plain and ordinary
meaning. . It is not enough for a patentee to simply disclose a single
embodiment or use a word in the same manner in all embodiments,
the patentee must clearly express an intent to redefine the term. For
example, in 3M Innovative Properties Co. v. Avery Dennison Corp., we 3M Innovative Properties: 350 F.3d 1365
held that the patentee acted as its own lexicographer when the speci- (Fed.Cir. 2004)
fication stated: “‘Multiple embossed’ means two or more embossing
pa erns are superimposed on the web to create a complex pa ern of
differing depths of embossing.”). Similarly, we limited a patentee to
particular examples of solubilizers when it stated in the specification
that “[t]he solubilizers suitable according to the invention are defined
below.” Astrazeneca AB v. Mutual Pharm. Co.. Astrazeneca: 384 F.3d 1333 (Fed. Cir.
2004)
The standard for disavowal of claim scope is similarly exacting.
Where the specification makes clear that the invention does not in-
clude a particular feature, that feature is deemed to be outside the
reach of the claims of the patent, even though the language of the
claims, read without reference to the specification, might be consid-
198 CHAPTER 3. PATENT
ered broad enough to encompass the feature in question. The paten-
tee may demonstrate intent to deviate from the ordinary and accus-
tomed meaning of a claim term by including in the specification ex-
pressions of manifest exclusion or restriction, representing a clear dis-
SciMed: 242 F.3d 1337 (Fed. Cir. 2001) avowal of claim scope. For example, in SciMed Life Sys., Inc. v. Ad-
vanced Cardiovascular Sys., Inc., the patentee described two different
types of catheters in the prior art, those with dual lumens (side-by-
side) and those with coaxial lumens. In discussing the prior art, the
patentee disparaged the dual lumen configuration as larger than nec-
essary and less pliable than the coaxial type. Further, the specification
repeatedly described the “present invention” as a coaxial design. Fi-
nally, the specification stated: “The intermediate sleeve structure de-
fined above [coaxial design] is the basic sleeve structure for all embod-
iments of the present invention contemplated and disclosed herein.”
This court held that collectively this amounted to disavowal of the
dual lumen design.
Mere criticism of a particular embodiment encompassed in the
plain meaning of a claim term is not sufficient to rise to the level of
clear disavowal. Even where a particular structure makes it particu-
larly difficult to obtain certain benefits of the claimed invention, this
does not rise to the level of disavowal of the structure. It is likewise
not enough that the only embodiments, or all of the embodiments,
contain a particular limitation. We do not read limitations from the
specification into claims; we do not redefine words. Only the paten-
tee can do that. To constitute disclaimer, there must be a clear and
unmistakable disclaimer.
It is the claims that define the metes and bounds of the patentee’s
invention. The patentee is free to choose a broad term and expect
to obtain the full scope of its plain and ordinary meaning unless the
patentee explicitly redefines the term or disavows its full scope.
Claim 1 of the patent at issue includes the disputed claim terms:
In a computer or video game system, apparatus for provid-
ing, in response to signals generated by said computer or video
game system, a tactile sensation to a user of said computer or
video game system, said apparatus comprising:
a flexible pad;
a plurality of actuators, a ached to said pad, for selectively
generating tactile sensation; and a control circuit ... for gen-
erating a control signal to control activation of said plural-
ity of actuators....
I. “a ached to said pad”
Appellants argue that the district court erred by holding that the spec-
ification implicitly defined “a ached” to mean “affixed to an exterior
D. INFRINGEMENT: SIMILARITY 199
surface.” They argue that the term does not require any construction
and that the plain and ordinary meaning includes affixing an item to
either an exterior or an interior surface. They contend that the spec-
ification explicitly states whether an a achment is to an interior or
exterior surface: “a vibratory actuator can be a ached to [the] outer
side of the thro le handle.” They argue this shows that when the ap-
plicant wished to distinguish an internal from an external a achment,
he did so with deliberate, express language. Thus, appellants argue
that the specification contemplates “a ached” to have its plain and
ordinary meaning—a ached to either an interior or exterior surface.
Finally, appellants argue that the fact that claim 10 includes the word
“embedded” does not mean that “a ached” can only mean connected
to an exterior surface. Rather, appellants argue that “embedded” is
merely a narrower term that includes only a achment to an interior
surface.
Sony responds that the patent clearly identified two different con-
nections, “a ached to” and “embedded within.” It argues that in ev-
ery instance where the specification uses the term “a ached,” it refers
to an a achment to an outer surface. Conversely, in every embodi-
ment where the actuator is placed inside a housing, the specification
uses the term “embedded.” See, e.g., ‘941 patent col.32 l.66 (“embed-
ded within or a ached to”).
Our case law is clear, claim terms must be given their plain and
ordinary meaning to one of skill in the art. The plain meaning of
the term “a ached” encompasses either an external or internal a ach-
ment. We must decide whether the patentee has redefined this term
to mean only a achment to an external surface. As Sony argues, the
specification repeatedly uses the term “a ached” in reference to em-
bodiments where the actuators are “a ached to [an] outer side.” In
fact, the specification never uses the word “a ached” when referring
to an actuator located on the interior of a controller. We hold that this
does not rise to the level of either lexicography or disavowal. Both ex-
ceptions require a clear and explicit statement by the patentee. It is
not enough that the patentee used the term when referencing an at-
tachment to an outer surface in each embodiment. In fact, the specifi-
cation explains that an actuator was “a ached to [an] outer surface.”
If the applicant had redefined the term “a ached” to mean only “at-
tached to an outer surface,” then it would have been unnecessary to
specify that the a achment was “to [an] outer surface” in the specifi-
cation. We conclude that the term a ached should be given its plain
and ordinary meaning. The specification does not redefine a ached
nor is there any disavowal.
The fact that the specification uses the two terms “a ached” and
“embedded” as alternatives does not require a different result. There
is nothing inconsistent about the applicant’s use of the narrower term,
200 CHAPTER 3. PATENT
“embedded,” to describe embodiments affixed to an internal surface.
The plain and ordinary meaning of embedded, “a ached within,” is
narrower than “a ached.” Hence it makes sense that the applicant
would want to use embedded when it meant to explicitly claim at-
tached to the inside only. That does not mean the word a ached au-
tomatically means a ached to the external surface, as opposed to the
broader plain meaning—a ached to either the interior or exterior.
Other parts of the claim and specification also support this con-
struction. The claim at issue requires a “flexible pad.” The only em-
bodiment in the specification that includes flexible material is the seat
cushion 510 shown in Figure 2. The specification states that “the tac-
tile feedback seating unit 510 is a semi-rigid flexible foam structure
... with a plurality of actuators embedded within the foam structure.”
Thus, the only flexible embodiment in the specification has embed-
ded actuators. If we agreed with Sony that “a ached” must mean
a ached to an outer surface, then the claim would exclude the only
flexible embodiment disclosed in the specification. This is further ev-
idence that the term “a ached” should have its plain and ordinary
meaning which includes either internal or external a achments.
We hold that the term “a ached to said pad” should be given its
plain and ordinary meaning which encompasses either internal or ex-
ternal a achment. Because the parties based the stipulation of nonin-
fringement on the district court’s erroneous construction of this claim
term, we vacate and remand.
II. “flexible pad” …
Appellants argue that the term “flexible” simply means “capable of
being flexed” and that the district court erred by requiring “capable of
being noticeably flexed with ease.” They note that the specification
only uses the term “flexible pad” when referring to a “semi-rigid”
structure and that a “semi-rigid” structure would certainly not be
“noticeably flexed with ease.”
Sony responds that although the specification uses the term to re-
fer to a “semi-rigid” structure, that structure is made out of foam in
every embodiment. It argues that foam is capable of being noticeably
flexed with ease and thus a rigid, barely bendable material should not
be considered “flexible.” Sony also points to portions of the Mark-
man hearing where the district court judge inspected one of the ac-
cused hard plastic controllers. The judge noted that the controller
was rigid and “[i]f I try to flex this thing, I think that you’re going to
see it snap.”
We agree with the appellants that the district court improperly
limited the term. Neither the claims nor the specification requires
the “flexible pad” to be noticeably flexed with ease. The specifica-
tion says only that the flexible pad must be a semi-rigid structure.
D. INFRINGEMENT: SIMILARITY 201
The task of determining the degree of flexibility, the degree of rigid-
ity that amounts to “semi-rigid,” is part of the infringement analysis,
not part of the claim construction. The district court is of course free
on summary judgment to decide that there is no genuine issue of ma-
terial fact that the accused products in this case do not meet the plain
and ordinary meaning of the term “flexible.” We do not mean to sug-
gest that summary judgment is improper in this case, only that claim
construction is the wrong venue for this determination.
2 Literal Infringement
Angelo Mongiello's Children, LLC v. Pizza Hut, Inc.
70 F. Supp. 2d 196 (E.D.N.Y. 1999)
The complaint alleges that defendant’s method for making stuffed-
crust pizzas, in use between March of 1994 and at least July of 1996, in-
fringed plaintiff’s method for making pizza claimed in United States
Patent No. 4,661,361 dated April 28, 1987 (the ’361 patent).
In essence, plaintiff’s method is to create multiple, individually
sealed pockets made of dough that are filled with cheese (or other
ingredients) and enclosed within the outer rim of a pizza crust or
placed on a portion of the pizza crust. Tomato sauce and cheese cov-
ers the rest of the pie. The claims describe two basic methods: one
uses dough pulled over from the edge of the crust to cover the fill-
ings and form the pockets; the other places a separate piece of dough,
not from the edge, over the fillings to form a pocket.
[Claim 1 reads] as follows:
1. A method of making a pizza comprising the steps of:
(a) forming a generally flat dough base;
(b) placing a plurality of separated individual food portions
on the dough base such that, when the dough base is cut
into substantially equally sized portions, each individual
food portion is located upon a portion of each pie;
(c) covering each food portion with an unbaked dough section
of sufficient dimensions to cover said food portion thereby
forming a separate closed pocket about each food portion;
(d) covering the portions of the dough base which are not cov-
ered by said closed pockets with a layer of tomato sauce
and cheese to form an unbaked pizza product; and
(e) baking the unbaked product to obtain a pizza.
In early 1988 Anthony Mongiello sent defendant a copy of the ’361
patent, offering a license under it. Defendant responded by le er
dated May 17, 1988 that it was ”not a new concept for Pizza Hut”
and rejected the offer.
In March of 1995 defendant launched a cheese ”Stuffed Crust
202 CHAPTER 3. PATENT
Pizza.” The manager’s guide dated February 1995 describes defen-
dant’s method as follows:
• Place thumbs on edge of dough.
• Press dough ridge up the sides of pan.
– Dough must extend just above rim of pan (¼”)
• Evenly space five pieces of thawed mozzarella string cheese ap-
proximately a thumb’s width apart along the outside edge of
the dough
– Place close to bo om of pan where edge meets.
• Use thumb and index fingers to stretch and fold edge of the
dough over string cheese and press firmly to seal.
– Dough overlap should be visible on both sides of thumb.
– Keep stuffed edge at score line etched in pan to keep dough
in round shape.
• Use thumbs to press and seal overlapped dough to bo om edge.
• Use thumbs to push stuffed edge out to edge of pan....
• [after applying sauce, toppings, and baking] [a]ll Stuffed Crust
Pizzas are cut into 8 slices. If cheese is leaking through small
hole in crust, begin cu ing pizza at that spot.
An objective of the method was to create ”cheese pull,” which means
that the cheese within the crust joins together during baking so that
the consumer receives ”cheese in every bite.”
Defendant launched a pepperoni and cheese Stuffed Crust Pizza
in September of 1995, which contained a continuous layer of pepper-
oni slices beneath the five pieces of cheese within the outer edge of
the pizza. Plaintiff concedes that the pepperoni and cheese version
does not infringe the ’361 patent.
Shortly after learning of the 1995 launch of defendant’s Stuffed
Crust Pizza, Anthony Mongiello and his brother Lawrence cut open
Stuffed Crust Pizzas purchased from defendant’s restaurants. They
say that when they cut into the crusts, they observed ”pockets” of
mozzarella cheese and spots where ”a dough wall separated adjacent
mozzarella strings.”
Based on their observations of randomly occurring dough walls
dividing cheese within the crust of defendant’s baked product, the
Mongiellos believed that the method defendant used to make Stuffed
Crust Pizzas infringed on their claimed method.
Defendant argues that its method of making Stuffed Crust Pizza
does not infringe the ’361 patent, either literally or through substan-
tial equivalence, because it does not perform what it says are three
required elements of the claimed method [including]:
(1) The ”cu ing step” of claim 1: ”when the dough base is cut into
D. INFRINGEMENT: SIMILARITY 203
substantially equally sized pieces, each individual food portion
is located upon a portion of each piece.”
(2) The ”forming step” of claim 1: ”forming a separate closed
pocket about each food portion.”
Defendant says that the phrase ”such that, when the dough base is cut
into substantially equally sized portions, each individual food por-
tion is located upon a portion of each piece” is an essential limitation
of the claim requiring that the pizza be cut in a specific manner. Plain-
tiff contends that the phrase should be construed as an optional step
that merely explains where the food portions should be placed, and
says that the phrase really means: ”if the dough base were cut into
equal slices, a food portion would be on each slice.” Plaintiff argues
that cu ing the pizza such that there is an individual filled pocket on
each piece is not required, but that ”it is enough that it is possible to
do so.”
But the plain language of the claim says ”when,” not ”if.” If the
patent applicants had wanted the language to be hypothetical, they
would have drafted it in that manner. Two pages of further claim construc-
tion discussion omitted. Focus on what
In order to find literal infringement, the defendant must practice
the court does once it has construed
each and every element of the claimed method the claim language.
Defendant’s method, as described in the February 1995 manager’s
guide and the affidavit of Patricia Scheibmeir, a manager in defen-
dant’s research and development department, does not practice the
”cu ing” limitation as construed by the court. Although the Stuffed
Crust Pizzas in question used five separate pieces of cheese, sepa-
rated by a thumb’s width, the instructions direct that the pizza be
cut into eight slices using a ”rocker blade,” which cuts pizzas into an
even number of slices. It is thus impossible for individual portions of
cheese to be located on each portion of defendant’s pizza. This is the court's complete discussion
Since defendant does not practice one of the essential limitations of literal infringement. This is not atyp-
ical. Once claim construction is com-
of the ’361 patent, the court need not consider the other limitations
plete, applying the claim language is
before making a finding of no literal infringement. often (though not always) trivial. Why
might that be?
3 Doctrine of Equivalents
Freedman Seating Co. v. American Seating Co.
420 F.3d 1350 (Fed. Cir. 2005)
Freedman Seating Company (“Freedman”) sued American Seating
Company and Hi-Tech Seating Products (doing business as Kustom
Fit) (collectively, “American Seating”) for infringement of U.S. Patent
No. 5,492,389 (issued Feb. 20, 1996) (“the ‘389 patent”). Because
we conclude that the judgment of infringement under the doctrine
of equivalents has the effect of vitiating a limitation of the claims of
the ‘389 patent, we reverse the judgment and remand the case to the
204 CHAPTER 3. PATENT
district court with instructions to enter judgment of non-infringement
in favor of American Seating.
BACKGROUND
Freedman manufactures seats used in public transportation vehicles.
Its product line includes stowable seats, which are seats that have
the ability to fold away in order to create more interior space in a
vehicle. They are particularly useful for accommodating passengers
with wheelchairs, but may be used whenever more interior space is
needed.
Freedman also owns the ‘389 patent, titled “Stowable Seat.” The
figures shown below are representative of the stowable seat claimed
in the ‘389 patent.
Figure 1 shows the stowable seat (10) in the horizontal (or de-
ployed) position, while figure 2 shows the stowable seat in the ver-
tical (or stowed) position. Moving the seat from its horizontal to ver-
tical position involves “folding the seatback (16) flat against the seat-
base (14), unlocking the seatbase from its horizontally deployed po-
sition and raising the seatbase to its vertically stowed position where
it is locked in place.”
As shown by figure 1, the invention of the ‘389 patent does not
use an aisle leg to support the seat when in the horizontal position.
Rather, the invention is based on a cantilever design, which uses a di-
agonal truss (18), also referred to as a support member, to support the
aisle-end of the seat when in the horizontal position. This design, ac-
cording to the ‘389 patent, avoids difficulties a endant with stowing
and deploying seats that have a separate aisle leg.
In addition to providing aisle support, the diagonal truss allows
for translational movement of the seatbase between the horizontal
and vertical positions. This is due to the truss having a fixed end that
is a ached to the seat’s frame (12) at a pivot point (54), and a mov-
able end (56) that is “slidably mounted” in a runner track (58). When
stowing the seat, the movable end of the diagonal truss slides on the
runner track toward the middle of the seatbase, while the fixed end of
the diagonal truss rotates upward until the seat is in the vertical posi-
tion. Similarly, when the seat is deployed again, the movable end of
the diagonal truss slides toward the aisle end of the seatbase, while
the fixed end rotates downward until the seat is in the horizontal posi-
tion. This folding mechanism created by the slidably mounted move-
able end is known in the field of mechanical engineering as a “slider
crank,” which is a particular type of “four bar mechanism.”
Claim 1 is representative of the claims asserted against American
Seating; it reads:
A stowable seat for mounting to support member of a vehicle
wherein a space may be selectively provided for positioning an
D. INFRINGEMENT: SIMILARITY 205
US. Patent Feb. 20, 1996 Sheet 1 0f 3 5,492,389
j“;wé ‘
U.S. Patent No. 5,492,389, Stowable seat
206 CHAPTER 3. PATENT
article adjacent to the stowable seat, when stowed the seat com-
prising:
a frame a ached to a support member;
a cantilevered seatbase having a free end, a pivotable end
including a pivot mounted thereto for rotatably associat-
ing said pivotable end with said frame and for providing
said seatbase with a range of motion extending from a
horizontally deployed position to a vertically stowed po-
sition, a support member for supporting said seatbase in
said deployed position including a moveable end slidably
emphasis added mounted to said seatbase and a fixed end journalled with
said frame, and a first lock near said free end for releasably
locking said movable end to maintain said seatbase in said
deployed position; and
a seatback having a pivot for rotatably associating said
seatback with said seatbase and for providing said seat-
back with a range of motion extending from an unfolded
position to a folded position, said range of motion of
said seatback being perpendicular to said range of motion
of said seatbase, said seatback in said unfolded position
adapted to be a predetermined angle with respect to said
seatbase in said deployed position to provide seating and
said seatback in said folded position adapted to be adja-
cent said seatbase for stowing to provide the space for the
article.
American Seating Company and Kustom Fit also manufacture and
market seating products for the transportation industry. One partic-
ular seat is the Horizon EZ Fold (“EZ Fold”), which is a stowable seat.
The EZ Fold is in many respects similar, if not identical, to the inven-
tion claimed in the ‘389 patent. Most notably, neither device has an
aisle leg. However, and important to this case, the two products use
different types of support structures in lieu of the aisle leg. The in-
vention claimed in the ‘389 patent, of course, uses the slider crank,
which is described in part by the “slidably mounted” limitation. The
EZ Fold, on the other hand, uses what is known as a “fourth link.”
Like the slider crank, the fourth link is also a specific type of four
bar mechanism. However, the two mechanisms differ in that, where
the moveable end of the ‘389 patent’s support member is slidably
mounted to the seatbase, the moveable end of the EZ Fold’s support
member is rotatably mounted to the seatbase. Therefore, the move-
able end of the EZ Fold’s support member does not slide or otherwise
move along the seatbase. Rather, its only range of motion consists of
rotation throughout its revolute joints. That said, the EZ Fold’s fourth
link mechanism still provides the seatbase with fluid translational
D. INFRINGEMENT: SIMILARITY 207
motion, and thereby allows the seat to fold between the deployed
and stowed positions. It does this through an extra set of revolute
joints located in the midsection of its support member (“mid-joints”).
These mid-joints are shown below in two representative illustrations
of the EZ Fold product.
The illustration on the left shows the seat in the fully deployed po-
sition, and the illustration on the right shows the device in transition
between the deployed and stowed positions.
In due course, both parties filed motions for summary judgment
on the issue of infringement. The parties generally agreed that the
EZ Fold literally meets all of the limitations of claim 1 except for the
limitation requiring that the movable end of the support member be
“slidably mounted” to the seatbase. The accused product does not
literally meet this limitation because the EZ Fold’s support member
is rotatably mounted, not slidably mounted, to the seatbase.
American Seating argued that its support member and moveable
end were not equivalent to the corresponding structure claimed by
the ‘389 patent because its system used a fourth link, which cre-
ated a substantially different support structure than the slider crank
of the ‘389 patent. In particular, American Seating argued that the
support structures of the two devices created substantially different
distribution forces. The district court disagreed. As an initial mat-
ter, the court stated that force distributions were not claimed in the
‘389 patent and were therefore of minimal relevance. In addition,
the court found that any difference in force distributions was insub-
stantial, and that Freedman’s “slider-crank and [American Seating’s]
fourth link perform substantially the same function in substantially
the same manner to achieve substantially the same result.” The court
therefore granted Freedman summary judgment of infringement by
equivalence.
DISCUSSION
Patent infringement is a two step inquiry. First, the court must con-
strue the asserted claim. Second, the court must determine whether
the accused product or process contains each limitation of the prop-
208 CHAPTER 3. PATENT
erly construed claims, either literally or by a substantial equivalent.
Under the doctrine of equivalents, a product or process that does
not literally infringe upon the express terms of a patent claim may
nonetheless be found to infringe if there is ‘equivalence’ between the
elements of the accused product or process and the claimed elements
Warner-Jenkinson: 520 U.S. 17 (1997) of the patented invention.” Warner-Jenkinson Co. v. Hilton Davis Chem.
Co.. The doctrine evolved in recognition of the fact that
The language in the patent claims may not capture every
nuance of the invention or describe with complete preci-
sion the range of its novelty. If patents were always inter-
preted by their literal terms, their value would be greatly
diminished. Unimportant and insubstantial substitutes
for certain elements could defeat the patent, and its value
to inventors could be destroyed by simple acts of copying.
Festo. At the same time, the doctrine of equivalents necessarily adds
uncertainty to the scope of patent claims, and thereby detracts from
the public-notice function of patent claims and risks deterring non-
infringing and potentially innovative endeavors. See Festo (“If the
range of equivalents is unclear, competitors may be unable to de-
termine what is a permi ed alternative to a patented invention and
what is an infringing equivalent.”); Warner-Jenkinson (“There can be
no denying that the doctrine of equivalents, when applied broadly,
conflicts with the definitional and public-notice functions of the statu-
tory claiming requirements.”). In recognition of this risk, and in an
effort to strike the proper balance between protecting patentees while
also providing sufficient notice to the public, various rules of law
have emerged to constrain when and how the doctrine of equivalents
is to be applied.
Of relevance to this case is the “all limitations” rule. The rule
holds that an accused product or process is not infringing unless it
contains each limitation of the claim, either literally or by an equiva-
lent. This principle has two primary implications for the doctrine of
equivalents. First, the all limitations rule requires that equivalence
be assessed on a limitation-by-limitation basis, as opposed to from
the perspective of the invention as a whole. Second, an element of an
accused product or process is not, as a ma er of law, equivalent to
a limitation of the claimed invention if such a finding would entirely
vitiate the limitation.
There is no set formula for determining whether a finding of
equivalence would vitiate a claim limitation, and thereby violate the
all limitations rule. Rather, courts must consider the totality of the
circumstances of each case and determine whether the alleged equiv-
alent can be fairly characterized as an insubstantial change from the
claimed subject ma er without rendering the pertinent limitation
D. INFRINGEMENT: SIMILARITY 209
meaningless.
In Sage Products, Inc. v. Devon Industries, Inc. we affirmed the Sage Products: 126 F.3d 1420 (Fed. Cir.
district court’s grant of summary judgment of non-infringement un- 1997)
der the doctrine of equivalents. One of the asserted patents de-
scribed a container for discarding syringes and other like materials
and claimed, among other things, “an elongated slot at the top of the
container body” and a barrier means comprised of “a first constric-
tion extending over said slot.” We agreed that the district court prop-
erly interpreted “top of the container body” to mean “highest point,
level, or part of.” The accused product differed from the claimed in-
vention in that the slot was located in the interior of the container
rather than at the top of the container.
We concluded that finding infringement under these circum-
stances would vitiate the “slot at the top of the container body” and
“extending over said slot” limitations. We reached our conclusion
based on several considerations, including the simplicity of the struc-
ture, the specificity and narrowness of the claim, and the foreseeabil-
ity of variations at the time of filing the claim with the PTO:
The claim at issue defines a relatively simple structural
device. A skilled patent drafter would foresee the limit-
ing potential of the “over said slot” limitation. No sub-
tlety of language or complexity of the technology, nor any
subsequent change in the state of the art, such as later-
developed technology, obfuscated the significance of this
limitation at the time of its incorporation into the claim. If
[the patentee] desired broad patent protection for any con-
tainer that performed a function similar to its claimed con-
tainer, it could have sought claims with fewer structural
encumbrances. . . . Instead, [the patentee] left the PTO
with manifestly limited claims that it now seeks to expand
through the doctrine of 1361*1361 equivalents. However,
as between the patentee who had a clear opportunity to
negotiate broader claims but did not do so, and the pub-
lic at large, it is the patentee who must bear the cost of its
failure to seek protection for this foreseeable alteration of
its claimed structure.
Compare Hughes Aircraft Co. v. United States, 140 F.3d 1470, 1475
(Fed. Cir. 1998) (“This is a case in which a ‘subsequent change in the
state of the art, such as later-developed technology, obfuscated the
significance of [the] limitation at the time of its incorporation into the
claim.’”).
In Tronzo v. Biomet, Inc., we similarly concluded that a finding of Tronzo: 156 F.3d 1154 (Fed. Cir. 1998)
equivalence would vitiate the claimed limitation. The asserted claims
related to an artificial hip socket and included a limitation requiring
210 CHAPTER 3. PATENT
that the prosthesis’s body have “a generally conical outer surface.”
In finding infringement, the jury concluded that the hemispherical
shape of the accused product’s hemispherical cup was equivalent to
the “generally conical outer surface” limitation. We reversed, find-
ing no infringement as a ma er of law. We were particularly trou-
bled by expert testimony submi ed by the plaintiff, Tronzo, stating
that “when either a hemispherical cup or trapezoidal cup or any other
shape cup is successfully implanted into the body, it functions almost
exactly the same way.” We stated that, according to this theory of
infringement, “any shape would be equivalent to the conical limita-
tion.” “Such a result,” we concluded, “is impermissible under the all-
elements rule of Warner-Jenkinson because it would write the ‘gener-
Asyst Techs.: 402 F.3d 1188 (Fed. Cir. ally conical outer surface’ limitation out of the claims.” See also Asyst
2005) Techs., Inc. v. Emtrak, Inc. (holding that, under the “specific exclu-
sion” principle, “the term ‘mounted’ can fairly be said to specifically
Moore: 229 F.3d 1091 (Fed. Cir. 2000) exclude objects that are ‘unmounted’”); Moore U.S.A. v Standard Regis-
ter Co. (“[T]o allow what is undisputedly a minority (i.e., 47.8%) to be
equivalent to a majority would vitiate the requirement that the ‘first
and second longitudinal strips of adhesive … extend the majority of
the lengths of said longitudinal marginal portions.’”).
In the instant case, we think the district court’s finding of infringe-
ment under the doctrine of equivalents had the effect of entirely vi-
tiating the “slidably mounted” limitation. The parties agree that all
of the claims require a support member having “a moveable end slid-
ably mounted to” the seatbase. It is also not disputed that the move-
able end of the EZ Fold’s support member is rotatably mounted, not
slidably mounted, to the seatbase. Therefore, while the moveable end
of the EZ Fold’s support member has the ability to rotate, it cannot
slide or otherwise move along the seatbase. It is confined to a fixed
location. We think that this structural difference in the mounting of
the moveable end to the seatbase is not a subtle difference in degree,
but rather, a clear, substantial difference or difference in kind.
Freedman argues that the slider crank claimed in the ‘389 patent
and the fourth link mechanism used in the EZ Fold function in the
same way to produce identical results. Freedman asserts that this
is because “both the infringing seat and the claimed structure of the
‘389 patent provide the moveable end of the support member with
both translational and rotational motion relative to the seatbase.” The
problem, however, is that taken to its logical conclusion, Freedman’s
argument would mean that any support member capable of allowing
translational and rotational motion would be equivalent to a support
member “slidably mounted to said seatbase,” which reads “slidably
mounted” completely out of the claims. This is the precise type of
overextension of the doctrine of equivalents that the claim vitiation
D. INFRINGEMENT: SIMILARITY 211
doctrine is intended to prevent.
Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.
535 U.S. 722 (2002)
Petitioner Festo Corporation owns two patents [4,354,125 (Stoll) and
3,779,401 (Carroll)] for an improved magnetic rodless cylinder, a
piston-driven device that relies on magnets to move objects in a con-
veying system. The device has many industrial uses and has been em-
ployed in machinery as diverse as sewing equipment and the Thun-
der Mountain ride at Disney World. Petitioner’s patent applications,
as often occurs, were amended during the prosecution proceedings.
Both amended patents added a new limitation—that the inventions
contain a pair of sealing rings, each having a lip on one side, which
would prevent impurities from ge ing on the piston assembly. The
amended Stoll Patent added the further limitation that the outer shell
of the device, the sleeve, be made of a magnetizable material.
Prosecution history estoppel requires that the claims of a patent
be interpreted in light of the proceedings in the PTO during the ap-
plication process. Estoppel is a rule of patent construction that en-
sures that claims are interpreted by reference to those that have been
cancelled or rejected. The doctrine of equivalents allows the paten-
tee to claim those insubstantial alterations that were not captured in
drafting the original patent claim but which could be created through
trivial changes. When, however, the patentee originally claimed the
subject ma er alleged to infringe but then narrowed the claim in re-
sponse to a rejection, he may not argue that the surrendered territory
comprised unforeseen subject ma er that should be deemed equiva-
lent to the literal claims of the issued patent. On the contrary, by the
amendment the patentee recognized and emphasized the difference
between the two phrases and the difference which the patentee thus
disclaimed must be regarded as material.
A rejection indicates that the patent examiner does not believe the
original claim could be patented. While the patentee has the right
to appeal, his decision to forgo an appeal and submit an amended
claim is taken as a concession that the invention as patented does
not reach as far as the original claim. Were it otherwise, the inventor
might avoid the PTO’s gatekeeping role and seek to recapture in an
infringement action the very subject ma er surrendered as a condi-
tion of receiving the patent.
Prosecution history estoppel ensures that the doctrine of equiv-
alents remains tied to its underlying purpose. Where the original
application once embraced the purported equivalent but the paten-
tee narrowed his claims to obtain the patent or to protect its validity,
the patentee cannot assert that he lacked the words to describe the
subject ma er in question. The doctrine of equivalents is premised
on language’s inability to capture the essence of innovation, but a
212 CHAPTER 3. PATENT
prior application describing the precise element at issue undercuts
that premise. In that instance the prosecution history has established
that the inventor turned his a ention to the subject ma er in ques-
tion, knew the words for both the broader and narrower claim, and
affirmatively chose the la er.
We agree with the Court of Appeals that a narrowing amendment
made to satisfy any requirement of the Patent Act may give rise to an
estoppel. Estoppel arises when an amendment is made to secure the
patent and the amendment narrows the patent’s scope. A patentee
who narrows a claim as a condition for obtaining a patent disavows
his claim to the broader subject ma er, whether the amendment was
made to avoid the prior art or to comply with § 112. We must regard
the patentee as having conceded an inability to claim the broader sub-
ject ma er or at least as having abandoned his right to appeal a rejec-
tion. In either case estoppel may apply.
On the record before us, we cannot say petitioner has rebu ed the
presumptions that estoppel applies and that the equivalents at issue
have been surrendered. Petitioner concedes that the limitations at is-
sue – the sealing rings and the composition of the sleeve – were made
in response to a rejection for reasons under § 112, if not also because of
the prior art references. As the amendments were made for a reason
relating to patentability, the question is not whether estoppel applies
but what territory the amendments surrendered.
285 F.3d 1046 (Fed. Cir. 2000) (en
Johnson & Johnston Associates v. R.E. Service Co.
banc) Johnson and Johnston Associates (Johnston) asserted United States
Patent No. 5,153,050 (the ’050 patent) against R.E. Service Co. and
Mark Frater (collectively RES). [The patent concerned a method for
making printed circuit boards by adhering them to a stiff substrate
sheet during processing.]
When a patent drafter discloses but declines to claim subject mat-
ter, as in this case, this action dedicates that unclaimed subject ma er
to the public. Application of the doctrine of equivalents to recapture
subject ma er deliberately left unclaimed would conflict with the pri-
macy of the claims in defining the scope of the patentee’s exclusive
right.
Moreover, a patentee cannot narrowly claim an invention to avoid
prosecution scrutiny by the PTO, and then, after patent issuance, use
the doctrine of equivalents to establish infringement because the spec-
ification discloses equivalents. Such a result would merely encourage
a patent applicant to present a broad disclosure in the specification
of the application and file narrow claims, avoiding examination of
broader claims that the applicant could have filed consistent with the
specification. By enforcing this rule, the courts avoid the problem of
extending the coverage of an exclusive right to encompass more than
D. INFRINGEMENT: SIMILARITY 213
that properly examined by the PTO.
In this case, Johnston’s ’050 patent specifically limited the claims
to ”a sheet of aluminum” and ”the aluminum sheet.” The specifica-
tion of the ’050 patent, however, reads: ”While aluminum is currently
the preferred material for the substrate, other metals, such as stainless
steel or nickel alloys may be used.” Having disclosed without claim-
ing the steel substrates, Johnston cannot now invoke the doctrine
of equivalents to extend its aluminum limitation to encompass steel.
Thus, Johnston cannot assert the doctrine of equivalents to cover the
disclosed but unclaimed steel substrate.
A patentee who inadvertently fails to claim disclosed subject mat-
ter, however, is not left without remedy. Within two years from the
grant of the original patent, a patentee may file a reissue application
and a empt to enlarge the scope of the original claims to include the
disclosed but previously unclaimed subject ma er.. In addition, a Reissue: 35 U.S.C. § 251 (2000)
patentee can file a separate application claiming the disclosed subject
ma er.. Notably, Johnston took advantage of the la er of the two op- Separate application: 35 U.S.C. § 120
tions by filing two continuation applications that literally claim the (2000) (allowing filing as a continuation
application if filed before all applica-
relevant subject ma er
tions in the chain issue)
4 A Hybrid: Means-Plus-Function Claims
Kemco Sales, Inc. v. Control Papers Co., Inc.
208 F.3d 1352 (2000)
In order for an accused structure to literally meet a section 112, para-
graph 6 means-plus-function limitation, the accused structure must
either be the same as the disclosed structure or be a section 112, para-
graph 6 ”equivalent,” i.e., (1) perform the identical function and (2) be
otherwise insubstantially different with respect to structure. Under a
modified version of the function-way-result methodology, two struc-
tures may be ”equivalent” for purposes of section 112, paragraph 6
if they perform the identical function, in substantially the same way,
with substantially the same result.
If an accused structure is not a section 112, paragraph 6 equiva-
lent of the disclosed structure because it does not perform the iden-
tical function of that disclosed structure and hence does not literally
infringe, it may nevertheless still be an ”equivalent” under the doc-
trine of equivalents. Thus, if one applies the traditional function-
way-result test, the accused structure must perform substantially the
same function, in substantially the same way, to achieve substantially
the same result, as the disclosed structure. A key feature that distin-
guishes ”equivalents” under section 112, paragraph 6 and ”equiva-
lents” under the doctrine of equivalents is that section 112, paragraph
6 equivalents must perform the identical function of the disclosed
structure, while equivalents under the doctrine of equivalents need
214 CHAPTER 3. PATENT
only perform a substantially similar function.
Because the ”way” and ”result” prongs are the same under both
the section 112, paragraph 6 and doctrine of equivalents tests, a struc-
ture failing the section 112, paragraph 6 test under either or both
prongs must fail the doctrine of equivalents test for the same rea-
son(s).
In the present case, we agree with the district court that no reason-
able jury could have found that the TripLok infringes, either literally
or under the doctrine of equivalents. Turning first to literal infringe-
ment, it is clear that the foldover flap structure disclosed in the ’197
patent specification is not identical to the dual-lip structure in the ac-
cused device, so we must then ask whether the dual-lip structure is
an ”equivalent” structure under section 112, paragraph 6. In deter-
mining this under a modified function-way-result test, we note that
both the accused and disclosed structures perform the identical func-
tion, which is to close the envelope. However, unlike the disclosed
flap, which closes by folding over the envelope, the dual-lip structure
closes the accused envelope in a different way by meeting together
and binding via the internal adhesive. The accused structure’s differ-
ent way of closing also yields a substantially different result. The first
D. INFRINGEMENT: SIMILARITY 215
and second sealing means in the disclosed structure are ultimately
a ached to the outside of the envelope. In contrast, the first sealing
means in the TripLok envelope is internally a ached to the two lips
of the dual-lip structure, thereby sealing the envelope.
Based on this analysis, it is also clear that Control Papers does not
infringe under the doctrine of equivalents. When a court determines
that the ”way” and/or ”result” is/are substantially different under a
section 112, paragraph 6 equivalents analysis, a patentee cannot pre-
vail under the doctrine of equivalents for the same reason(s). In this
case, the dual-lip structure is not a section 112, paragraph 6 equiva-
lent of a fold-over flap because the ”way” and ”result” are substan-
tially different; accordingly, the dual-lip structure also cannot be an
equivalent under the doctrine of equivalents.
Super Soaker Problem
Based on Larami Corp. v. Amron, No.
This is claim 1 from U.S. Patent No. 4,239,129:
CIV. A. 91-6145, 1993 WL 69581 (E.D. Pa.
A toy comprising an elongated housing [case] having a Mar. 11, 1993)
chamber therein for a liquid [tank], a pump including a
piston having an exposed rod [piston rod] and extending
rearwardly of said toy facilitating manual operation for
building up an appreciable amount of pressure in said
chamber for ejecting a stream of liquid therefrom an ap-
preciable distance substantially forwardly of said toy, and
means for controlling the ejection.
Does the Super Soaker 50 infringe this claim? Note that to use a
Super Soaker, one fills it with water through the orange cap at the
back top. Sliding the yellow handle back and forth along the white
barrel pumps air into the green part, along with water. Pulling
the trigger opens a valve that causes the air to press water for-
ward, resulting in the Super Soaker’s famed superior soaking abil-
ity. (Conventional water pistols didn’t store up compressed air; they
drove water out the barrel using the force of the trigger pull itself.)
216 CHAPTER 3. PATENT
E Infringement: Prohibited Conduct
Herman v. Youngstown Car Mfg. Co.
191 F. 579 (6th Cir. 1911)
A patent is not the grant of a right to make or use or sell. It does not,
directly or indirectly, imply any such right. It grants only the right to
exclude others. The supposition that a right to make is created by the
patent grant is obviously inconsistent with the well-known fact that a
very considerable portion of the patents granted are in a field covered
by a former relatively generic or basic patent, are tributary to such
earlier patent, and cannot be practiced unless by license thereunder.
1 Direct Infringement
It is typically said that patent infringement is ”strict liability.” That
is, ”It is, of course, elementary, that an infringement may be entirely
inadvertent and unintentional and without knowledge of the patent.”
Blair v. Westinghouse Elec. Corp., 291 F. ”Similarly, evidence of copying is of no import on the question of
Supp. 664 (D.D.C. 1968) whether the claims of an issued patent are infringed, either literally
Depuy Spine, Inc. v. Medtronic Sofamor or by equivalents.”
Danek, Inc., 567 F.3d 1314 (Fed Cir.
2009)
Patent Act
35 U.S.C. § 271
(a) Except as otherwise provided in this title, whoever without au-
Infringement of patent thority makes, uses, offers to sell, or sells any patented inven-
tion, within the United States or imports into the United States
any patented invention during the term of the patent therefor,
infringes the patent.
Akamai Technologies, Inc. v. Limelight Networks, Inc.
797 F. 3d 1020 (Fed. Cir. 2015) (en
banc) In 2006, Akamai Technologies, Inc. (”Akamai”) filed a patent in-
fringement action against Limelight alleging infringement of U.S.
Patent No. 6,108,703 which claims methods for delivering content
over the Internet. The case proceeded to trial, at which the parties
agreed that Limelight’s customers – not Limelight – perform the ”tag-
ging” and ”serving” steps in the claimed methods. For example, as
for claim 34 of the ’703 patent, Limelight performs every step save
the ”tagging” step, in which Limelight’s customers tag the content to
be hosted and delivered by Limelight’s content delivery network.
Direct infringement under § 271(a) occurs where all steps of a
claimed method are performed by or a ributable to a single entity.
Where more than one actor is involved in practicing the steps, a court
must determine whether the acts of one are a ributable to the other
such that a single entity is responsible for the infringement. We will
hold an entity responsible for others’ performance of method steps
E. INFRINGEMENT: PROHIBITED CONDUCT 217
in two sets of circumstances: (1) where that entity directs or controls
others’ performance, and (2) where the actors form a joint enterprise.
The jury heard substantial evidence from which it could find
that Limelight directs or controls its customers’ performance of each
remaining method step, such that all steps of the method are at-
tributable to Limelight. Specifically, Akamai presented substantial
evidence demonstrating that Limelight conditions its customers’ use
of its content delivery network upon its customers’ performance of
the tagging and serving steps, and that Limelight establishes the man-
ner or timing of its customers’ performance. Therefore, Limelight is
liable for direct infringement.
2 Indirect Infringement
Patent Act
(b) Whoever actively induces infringement of a patent shall be li- 35 U.S.C. § 271
able as an infringer. Infringement of patent
(c) Whoever offers to sell or sells within the United States or im-
ports into the United States a component of a patented machine,
manufacture, combination or composition, or a material or ap-
paratus for use in practicing a patented process, constituting a
material part of the invention, knowing the same to be espe-
cially made or especially adapted for use in an infringement of
such patent, and not a staple article or commodity of commerce
suitable for substantial noninfringing use, shall be liable as a
contributory infringer.
Limelight Networks, Inc. v. Akamai Technologies, Inc.
134 S. Ct. 2111 (2014)
Neither the Federal Circuit nor respondents dispute the proposition
that liability for inducement must be predicated on direct infringe-
ment. This is for good reason, as our case law leaves no doubt that
inducement liability may arise if, but only if, there is direct infringe-
ment. Watch the dates! This is from an earlier
stage of the case. In this 2014 opinion,
One might think that this simple truth is enough to dispose of
the Supreme Court reverses a 2012 Fed-
this appeal. But the Federal Circuit reasoned that a defendant can eral Circuit opinion. Does seeing this
be liable for inducing infringement under § 271(b) even if no one has history change your view of the Federal
commi ed direct infringement within the terms of § 271(a) (or any Circuit's 2015 opinion on remand?
other provision of the patent laws), because direct infringement can
exist independently of a violation of these statutory provisions.
The Federal Circuit’s analysis fundamentally misunderstands
what it means to infringe a method patent. A method patent claims
a number of steps; under this Court’s case law, the patent is not in-
fringed unless all the steps are carried out. This principle follows
218 CHAPTER 3. PATENT
ineluctably from what a patent is: the conferral of rights in a particu-
lar claimed set of elements. Each element contained in a patent claim
is deemed material to defining the scope of the patented invention,
and a patentee’s rights extend only to the claimed combination of el-
ements, and no further.
The Federal Circuit seems to have adopted the view that Limelight
induced infringement on the theory that the steps that Limelight and
its customers perform would infringe the ‘703 patent if all the steps
were performed by the same person. But we have already rejected
the notion that conduct which would be infringing in altered circum-
stances can form the basis for contributory infringement, and we see
Deepsouth: 406 U.S. 518 (1972) no reason to apply a different rule for inducement. In Deepsouth Pack-
ing Co. v. Laitram Corp., a manufacturer produced components of a
patented machine and then exported those components overseas to
be assembled by its foreign customers. (The assembly by the foreign
customers did not violate U.S. patent laws.) In both Deepsouth and
this case, the conduct that the defendant induced or contributed to
would have been infringing if commi ed in altered circumstances: in
Deepsouth if the machines had been assembled in the United States,
and in this case if performance of all of the claimed steps had been
a ributable to the same person. In Deepsouth, we rejected the pos-
sibility of contributory infringement because the machines had not
been assembled in the United States, and direct infringement had con-
sequently never occurred. Similarly, in this case, performance of all
the claimed steps cannot be a ributed to a single person, so direct
infringement never occurred. Limelight cannot be liable for inducing
infringement that never came to pass.
Global-Tech Appliances, Inc. v. SEB S.A.
131 S. Ct. 2060 (2011)
[SEB held a U.S. patent on a deep fryer whose exterior surface re-
mained cool to the touch. Pentalpha cloned an SEB fryer it purchased
in Hong Kong (which did not bear U.S. patent markings). It sold
infringing fryers to Sunbeam, Fingerhut, and Montgomery Ward,
which resold them in the United States. Pentalpha argued that it did
not “induce” these sales under § 271(b) because it did not know about
the patent.]
[W]e now hold that induced infringement under § 271(b) requires
knowledge that the induced acts constitute patent infringement. We
nevertheless affirm the judgment of the Court of Appeals because the
evidence was plainly sufficient to support a finding of Pentalpha’s
knowledge under the doctrine of willful blindeness, [under which]
(1) the defendant must subjectively believe that there is a high prob-
ability that a fact exists and (2) the defendant must take deliberate
actions to avoid learning of that fact. Pentalpha’s belief that SEB’s
fryer embodied advanced technology that would be valuable in the
E. INFRINGEMENT: PROHIBITED CONDUCT 219
U.S. market is evidenced by its decision to copy all but the cosmetic
features of SEB’s fryer. Even more telling is [a Pentalpha executive’s]
decision not to inform the a orney from whom Pentalpha sought a
right-to-use opinion that the product to be evaluated was simply a
knock-off of SEB’s deep fryer.
Commil USA, LLC v. Cisco Systems Inc.
135 S. Ct. 1920 (2015)
The question the Court confronts today concerns whether a defen-
dant’s belief regarding patent validity is a defense to a claim of in-
duced infringement. It is not.
Invalidity is an affirmative defense that can preclude enforcement
of a patent against otherwise infringing conduct. An accused in-
fringer can, of course, a empt to prove that the patent in suit is in-
valid; if the patent is indeed invalid, and shown to be so under proper
procedures, there is no liability. That is because invalidity is not a de-
fense to infringement, it is a defense to liability. And because of that
fact, a belief as to invalidity cannot negate the scienter required for
induced infringement.
Lucent Technologies, Inc. v. Gateway, Inc.
In December 1986, three computer engineers at [Lucent’s predeces- 580 F.3d 1301 (Fed. Cir. 2009)
sor] AT&T filed a patent application, which eventually issued as the
Day patent. The patent is generally directed to a method of enter-
ing information into fields on a computer screen without using a key-
board. A user fills in the displayed fields by choosing concurrently
displayed, predefined tools adapted to facilitate the inpu ing of the
information in a particular field, wherein the predefined tools include
an on-screen graphical keyboard, a menu, and a calculator.
Lucent asserts that certain features of Outlook, Money, and Win-
dows Mobile, when used, practice the methods of claims 19 and 21.
For instance, Outlook includes a calendar tool that allows the user
to enter dates in a form when preparing a record of an appointment.
The tool displays a monthly calendar as a grid of numbered dates,
along with graphical controls that allow the user to scroll to adja-
cent months or skip directly to a different month and year. Once the
user defines a date with the tool, the software enters the numerical
day, month, and year into the corresponding field in the appointment
form. Similar to the number pad tool illustrated in the Day patent,
Outlook’s calendar date-picker tool enables the user to select a series
of numbers, corresponding to the day, month, and year, using graph-
ical controls. This date-picker calendar tool is incorporated in a few
of Outlook’s features. Microsoft Money and Windows Mobile have
similar functionalities.
According to Microsoft, Lucent did not prove contributory in-
fringement [under § 271(c)] because the products have substantial
220 CHAPTER 3. PATENT
noninfringing uses. Lucent counters that the date-picker tool does
not have any noninfringing uses. Thus, as framed by the parties, the
main issue reduces to whether the “material or apparatus” is the en-
tire software package or just the particular tool (e.g., the calendar
date-picker) that performs the claimed method. If the former, then
Microsoft prevails because the entire software package has substan-
tial noninfringing uses. If the material or apparatus is the specific
date-picker tool, then Lucent wins because that tool was “especially
made or especially adapted for” practicing the claimed method.
One example illustrates the problem with Microsoft’s approach.
Consider a software program comprising five – and only five – fea-
tures. Each of the five features is separately and distinctly patented
using a method claim. That is, the first feature infringes a method
claim in a first patent, the second feature infringes a method claim
in a second patent, and so forth. Assume also that the company sell-
ing the software doesn’t provide specific instructions on how to use
the five features, thus taking potential liability outside the realm of
§ 271(b). In this scenario, under Microsoft’s position, the software
seller can never be liable for contributory infringement of any one of
the method patents because the entire software program is capable of
substantial noninfringing use. This seems both untenable as a prac-
tical outcome and inconsistent with both the statute and governing
precedent.
Similarly, if, instead of selling Outlook with the date-picker, Mi-
crosoft had offered the date-picker for sale as a separate download
to be used with Outlook, there would be li le dispute that Microsoft
was contributing to infringement of the Day patent.
Hodosh: 833 F.2d 1575 (Fed. Cir. 1987) In Hodosh v. Block Drug Co., the patent at issue claimed “a method
for desensitizing teeth with a composition containing an alkali metal
nitrate.” The accused infringer sold toothpaste, e.g., “Sensodyne-F,”
containing potassium nitrate, an alkali metal nitrate. The accused
infringer argued that the sale of the toothpaste, which itself was not
patented, could not constitute contributory infringement because the
toothpaste contained a staple article, i.e., potassium nitrate. The court
rejected this argument. While potassium nitrate, when sold in bulk
form, was “a staple article or commodity of commerce suitable for
substantial noninfringing use,” it was suitable only for the infringing
use when sold as an ingredient in the toothpaste specially made to
perform the patented method of desensitizing teeth.
Here, the infringing feature for completing the forms, i.e., the
date-picker tool, is suitable only for an infringing use. Inclusion of
the date-picker feature within a larger program does not change the
date-picker’s ability to infringe. Because Microsoft included the date-
picker tool in Outlook, the jury could reasonably conclude, based on
the evidence presented, that Microsoft intended computer users to
F. DEFENSES 221
use the tool—perhaps not frequently—and the only intended use of
the tool infringed the Day patent.
Questions
1. Suppose that the Plano Bait Shop is selling empty open-topped
rectangular aluminum boxes, with a length slightly less than the
width of a bait box, lips at each end that are the right shape to at-
tach to the top edges of a bait box, and a detachable plastic cover.
Some buyers take the boxes, fill them with sharp-grained sand,
and use it to immobilize earthworms. Others take the boxes
and fill them with fish hooks, washcloths, or other items. Who,
if anyone, is infringing on the Lukehart patent? Does it ma er
if Plano includes instructions with the boxes explaining how to
fill them with sand to immobilize earthworms?
F Defenses
1 Invalidity
Microsoft Corp. v. i4i Ltd. Partnership
131 S. Ct. 2238 (2011)
Under § 282 of the Patent Act of 1952, ”[a] patent shall be presumed
valid” and ”[t]he burden of establishing invalidity of a patent or any
claim thereof shall rest on the party asserting such invalidity.” We
consider whether § 282 requires an invalidity defense to be proved
by clear and convincing evidence. We hold that it does.
2 Exhaustion
Aktiebolag v. E.J. Co.
121 F.3d 669 (Fed. Cir. 1997)
The facts in this case are not in dispute. The patents in suit [4,222,690
and 4,381,162] are directed to a drill with a shank portion and a
unique carbide tip geometry that has specially configured cu ing
edges resulting in a drill suitable for high-feed machining with im-
proved cu ing ability especially at its center portion. The drill tip is
not separately patented.
222 CHAPTER 3. PATENT
As illustrated in the above drawings from the ’690 patent, the drill
has a tip (1), shank portion (2), twisted grooves (3), projections (4)
(these projections bend and break the chips to render them smoothly
removable) and a conical end having a center point (11) at the apex of
the cone and a pair of cu ing edges (10). The drill shank (2) is made
of medium carbon steel. The drill tip (1) is made of a more durable
carbide and is brazed to the steel shank (2). Brazing is like soldering
but with a much higher melting point. It requires a temperature of
1300 degrees Fahrenheit to join the carbide tip to the steel shank.
Sandvik manufactures a commercial embodiment of the patented
drill. Although made of durable carbide, over time and use, the drill
tip dulls and may require resharpening. Resharpening, also known
as regrinding, involves pu ing a new edge on the drill tip. Normally,
the drill can cut through about one thousand inches of material before
needing resharpening, depending, of course, upon the hardness of
the material being cut. Sandvik expects the drill tip to be resharpened
and, in fact, issues guidelines explaining how to resharpen the tip so
as to maintain the specially configured cu ing edges. Sandvik does
not contend that resharpening constitutes infringement.
E.J. offers a drill repair service which includes resharpening and
retipping Sandvik drills. E.J. retips, at the request of its customers,
when the tip cannot be sharpened because it chips, cracks or simply
wears down after being resharpened several times. According to E.J’s
vice-president, Mr. Robert Hayes, some of E.J.’s customers elect not
to have the drill retipped when it cannot be resharpened any longer.
E.J. returns the drill to the customer or disposes of it at the customer’s
request. The parties agree that when the tip is damaged (i.e. chipped,
cracked or sufficiently worn down so that it cannot be resharpened),
the drill has reached the end of its useful life unless it is retipped.
E.J.’s retipping process includes removing the worn or damaged
F. DEFENSES 223
tip by heating the tip to 1300 degrees Fahrenheit using an acetylene
torch. E.J. then brazes in a rectangular piece of new carbide onto
the drill shank. After the piece of carbide has cooled, E.J. recreates
the patented geometry of the cu ing edges by machining the carbide.
This process includes: (1) grinding the carbide to the proper outside
diameter; (2) grinding the carbide to a point; (3) grinding the rake
surfaces of the new point; (4) grinding the center of the new point;
and (5) honing the edges. In the final steps of the machining process,
E.J. creates the cu ing edges by following Sandvik’s instructions for
tip resharpening.
Sandvik claims that E.J.’s retipping service constitutes an infring-
ing reconstruction of its patented drills. Sandvik does not manufac-
ture or sell replacement drill tips. It contends that it never intended
for the drills to be retipped. E.J. contends that its retipping service is
a lawful repair of the patented drills.
Direct infringement includes the making of a patented article
without authority. 35 U.S.C. § 271(a) (1994). Sandvik contends that
E.J. is reconstructing its patented drill and therefore infringing its ’690
and ’162 patents under § 271(a). However, when Sandvik sold its
patented drills to its customers, it granted them an implied license
to use the drill for its useful life, see Aro Mfg. Co. v. Convertible Top Aro II: 377 U.S. 476 (1964)
Replacement Co. (”Aro II”), and the implied license to use includes the
right to repair the patented drill.
The Supreme Court has taken an expansive view of what consti-
tutes a permissible repair. In Aro Mfg. Co. v. Convertible Top Re- Aro I: 365 U.S. 336 (1961)
placement Co. (”Aro I”), the Court held that the replacement of the
fabric portion of a convertible car top was a permissible repair, not
an infringing reconstruction. The Court held: ”No element, not itself
separately patented, that constitutes one of the elements of a combina-
tion patent is entitled to patent monopoly, however essential it may
be to the patented combination and no ma er how costly or difficult
replacement may be.” Therefore, even if E.J.’s retipping service cost
almost as much as the drill or if the replacement of the tip is difficult
and time consuming, as in this case, these factors are not dispositive
of reconstruction.
The Court also rejected the ”heart of the invention test.” See id.
(holding that replacement of the distinguishing part of the patented
combination does not amount to a reconstruction because a patent
covers the totality of the elements in a combination); see also Daw- Dawson Chem.: 448 U.S. 176 (1980)
son Chemical Co. v. Rohm & Haas Co. (This Court has ”eschewed the
suggestion that the legal distinction between ‘reconstruction’ and ‘re-
pair’ should be affected by whether the element of the combination
that has been replaced is an ‘essential’ or ‘distinguishing’ part of the
invention.”); Sage Products (”The size or relative importance of the
replacement part to the patented combination is not relevant when
224 CHAPTER 3. PATENT
determining whether conduct constitutes repair or replacement.”).
Therefore, the fact that E.J. may be replacing the novel features of
the ’690 patented invention is also not dispositive of reconstruction.
In Aro I, the Supreme Court further explained the test for what
constitutes a reconstruction: ”The decisions of this Court require the
conclusion that reconstruction of a patented entity, comprised of un-
patented elements, is limited to such a true reconstruction of the en-
tity as to ‘in fact make a new article,’ after the entity, viewed as a
whole, has become spent.” Although we question the district court’s
finding that the tip is, in fact, a separate part of the device, we need
not reach this issue because the court nevertheless failed to analyze
whether the replacement of this ”part” constituted reconstruction
consistent with Aro I.
There are a number of factors to consider in determining whether
a defendant has made a new article, after the device has become spent,
including the nature of the actions by the defendant, the nature of the
device and how it is designed (namely, whether one of the compo-
nents of the patented combination has a shorter useful life than the
whole), whether a market has developed to manufacture or service
the part at issue and objective evidence of the intent of the patentee.
Under the totality of the circumstances, we hold in this case that E.J.’s
actions are a reconstruction.
By E.J.’s own admission, the drill is ”spent” when the tip can no
longer be resharpened unless it is retipped. In fact, the record reveals
that E.J.’s customers may elect not to retip and inform E.J. to discard
the drill instead.
Moreover, the nature of the work done by E.J. shows that retip-
ping is more like reconstruction than repair. E.J. does not just a ach
a new part for a worn part, but rather must go though several steps
to replace, configure and integrate the tip onto the shank. It has to
break the worn or damaged tip from the shank by heating it to 1300
degrees Fahrenheit. It brazes to the shank a new rectangular block of
carbide and grinds and machines it to the proper diameter and cre-
ates the point. Thereafter, the tip is honed and sharpened, grinding
the rake surfaces and the center of the point and honing the edges.
These actions are effectively a re-creation of the patented invention
after it is spent.
This is not a case where it is clear that the patented device has
a useful life much longer than that of certain parts which wear out
Wilson: 50 U.S. 109 (1850) quickly. For example, in Wilson v. Simpson, in determining that a re-
pair had occurred, the Supreme Court focused specifically on the fact
that the machine was designed so that the knives had to be replaced
long before the other components:
The proof in the case, is, that one of [the patentee’s] ma-
F. DEFENSES 225
chines, properly made, will last in use for several years,
but that its cu ing-knives will wear out and must be re-
placed at least every sixty or ninety days. [If such a] part
of the combination is meant to be only temporary in the
use of the whole, and to be frequently replaced, because it
will not last as long as the other parts of the combination,
its inventor cannot complain.
See also Aro I (noting that the fabric had a much shorter expected life
(about three years) than the convertible car top); Porter v. Farmer Sup- Porter: 790 F.2d 882 (Fed. Cir. 1986)
ply Serv., Inc. (”The useful life of a disk is measured in weeks, that of a
harvester is five or six years. The district court found, and it is undis-
puted, that a purchaser can expect to wear out many disks during the
useful life of the header.”).
The drill tip in this case is not a part like the detachable knives in
the Wilson that have to be replaced periodically over the useful life
of the planing machine. The drill tip was not manufactured to be a
replaceable part, although it could be resharpened a number of times
to extend its life. It was not intended or expected to have a life of
temporary duration in comparison to the drill shank. And finally, the
tip was not a ached to the shank in a manner to be easily detachable.
In Aro I, the Supreme Court also noted that ”the consequent de-
mand for replacement fabrics has given rise to a substantial indus-
try.” Evidence of development in the industry could also be a factor
tending to prove that there is a reasonable expectation that the part
of the patented combination wears out quickly and requires frequent
replacement. In this case, there is no evidence of a substantial mar-
ket for drill retipping of the sort required for the Sandvik drill. There
is no evidence of large numbers of customers retipping these drills
or of companies (other than E.J.) offering to retip these drills. No
one manufactures replacement tips for Sandvik’s drill and although
some customers opt to retip the drill only a small percentage of all
drills manufactured are retipped.
Finally, there was no intent evidenced by the patentee that would
support E.J.’s argument that replacement of the tips is a repair. See
Sage Products (evidence that patentee intended the inner containers
to be replaced, that it manufactures replacement parts and instructs
customers to replace supports holding such replacement a permis-
sible repair); Porter (considering that the patentee sold replacement
cu ing disks for its tomato harvester). The evidence shows that Sand-
vik never intended for its drills to be retipped. It did not manufacture
or sell replacement drill tips. It did not publish instructions on how
to retip its patented drills or suggest that the drills could or should be
retipped. Sandvik was aware that the drill tip would need occasional
resharpening and instructed its customer on how to resharpen the
226 CHAPTER 3. PATENT
tip. There is, therefore, no objective evidence that Sandvik’s drill tip
was intended to be a replaceable part. Although the repair or recon-
struction issue does not turn on the intention of the patentee alone,
the fact that no replacement drill tips have ever been made or sold by
the patentee is consistent with the conclusion that replacement of the
carbide tip is not a permissible repair.
Although there is no bright-line test for determining whether re-
construction or repair has occurred, we conclude based on all of the
facts in this case that E.J. is reconstructing an otherwise spent device
when it retips Sandvik’s drills. Accordingly, we hold that E.J.’s drill
tip replacements infringe the ’690 and ’162 patents.
Quanta Computer, Inc. v. LG Electronics, Inc.
553 U.S. 617 (2008)
I
Respondent LG Electronics, Inc. (LGE), purchased a portfolio of com-
puter technology patents in 1999 [relating to the storage of data in
computer memory.]
LGE licensed a patent portfolio, including the LGE Patents, to
Intel Corporation (Intel). The cross-licensing agreement (License
Agreement) permits Intel to manufacture and sell microprocessors
and chipsets that use the LGE Patents (the Intel Products). The Li-
cense Agreement authorizes Intel to ”‘make, use, sell (directly or indi-
rectly), offer to sell, import or otherwise dispose of’” its own products
practicing the LGE Patents. Notwithstanding this broad language,
the License Agreement contains some limitations. Relevant here, it
stipulates that no license
is granted by either party hereto . . . to any third party for
the combination by a third party of Licensed Products of
either party with items, components, or the like acquired
. . . from sources other than a party hereto, or for the use,
import, offer for sale or sale of such combination.
The License Agreement purports not to alter the usual rules of patent
exhaustion, however, providing that, ”[n]otwithstanding anything to
the contrary contained in this Agreement, the parties agree that noth-
ing herein shall in any way limit or alter the effect of patent exhaus-
tion that would otherwise apply when a party hereto sells any of its
Licensed Products.”
In a separate agreement (Master Agreement), Intel agreed to give
wri en notice to its own customers informing them that, while it had
obtained a broad license ”ensuring that any Intel product that you
purchase is licensed by LGE and thus does not infringe any patent
held by LGE,” the license ”does not extend, expressly or by implica-
tion, to any product that you make by combining an Intel product
F. DEFENSES 227
with any non-Intel product.” The Master Agreement also provides
that ”a breach of this Agreement shall have no effect on and shall not
be grounds for termination of the Patent License.”
Petitioners, including Quanta Computer (collectively Quanta),
are a group of computer manufacturers. Quanta purchased micro-
processors and chipsets from Intel and received the notice required
by the Master Agreement. Nonetheless, Quanta manufactured com-
puters using Intel parts in combination with non-Intel memory and
buses in ways that practice the LGE Patents. Quanta does not modify
the Intel components and follows Intel’s specifications to incorporate
the parts into its own systems.
II
The longstanding doctrine of patent exhaustion provides that the ini-
tial authorized sale of a patented item terminates all patent rights to
that item. In Adams v. Burke, the Court affirmed the dismissal of Adams: 17 Wall. 453 (1873)
a patent holder’s suit alleging that a licensee had violated postsale
restrictions on where patented coffin-lids could be used. ”Where a
person has purchased a patented machine of the patentee or his as-
signee,” the Court held, ”this purchase carries with it the right to the
use of that machine so long as it is capable of use.”
Although the Court permi ed postsale restrictions on the use of
a patented article in Henry v. A.B. Dick Co.,2 that decision was short A.B. Dick: 224 U.S. 1 (1912)
lived. In 1913, the Court refused to apply A.B. Dick to uphold price-
fixing provisions in a patent license. See Bauer & Cie v. O’Donnell. Bauer: 229 U.S. 1 (1913)
Shortly thereafter, in Motion Picture Patents Co. v. Universal Film Mfg. Motion Picture Patents: 243 U.S. 502
Co., the Court explicitly overruled A.B. Dick. In that case, a patent (1917)
holder a empted to limit purchasers’ use of its film projectors to
show only film made under a patent held by the same company. The
Court noted the ”increasing frequency” with which patent holders
were using A.B. Dick-style licenses to limit the use of their products
and thereby using the patents to secure market control of related, un-
patented items. Observing that ”the primary purpose of our patent
laws is not the creation of private fortunes for the owners of patents
but is to promote the progress of science and useful arts,” the Court
held that ”the scope of the grant which may be made to an inventor in
a patent, pursuant to the patent statute, must be limited to the inven-
2
The A.B. Dick Company sold mimeograph machines with an a ached license
stipulating that the machine could be used only with ink, paper, and other supplies
made by the A.B. Dick Company. The Court rejected the notion that a patent holder
”can only keep the article within the control of the patent by retaining the title,” and
held that ”any reasonable stipulation, not inherently violative of some substantive
law” was ”valid and enforceable.” The only requirement, the Court held, was that
”the purchaser must have notice that he buys with only a qualified right of use,”
so that a sale made without conditions resulted in ”an unconditional title to the
machine, with no limitations upon the use.”
228 CHAPTER 3. PATENT
tion described in the claims of his patent.” Accordingly, it reiterated
the rule that ”the right to vend is exhausted by a single, unconditional
sale, the article sold being thereby carried outside the monopoly of
the patent law and rendered free of every restriction which the ven-
dor may a empt to put upon it.”
Univis: 316 U.S. 241 (1942) This Court most recently discussed patent exhaustion in United
States v. Univis Lens Co.. Univis Lens Company, the holder of patents
on eyeglass lenses, licensed a purchaser to manufacture lens blanks3
by fusing together different lens segments to create bi- and tri-focal
lenses and to sell them to other Univis licensees at agreed-upon rates.
Wholesalers were licensed to grind the blanks into the patented fin-
ished lenses, which they would then sell to Univis-licensed prescrip-
tion retailers for resale at a fixed rate. Finishing retailers, after grind-
ing the blanks into patented lenses, would sell the finished lenses to
consumers at the same fixed rate. The United States sued Univis un-
15 U.S.C. §§ 1, 3, 15 der the Sherman Act, alleging unlawful restraints on trade. Univis
asserted its patent monopoly rights as a defense to the antitrust suit.
The Court granted certiorari to determine whether Univis’ patent
monopoly survived the sale of the lens blanks by the licensed manu-
facturer and therefore shielded Univis’ pricing scheme from the Sher-
man Act.
The Court assumed that the Univis patents containing claims for
finished lenses were practiced in part by the wholesalers and finish-
ing retailers who ground the blanks into lenses, and held that the sale
of the lens blanks exhausted the patents on the finished lenses. The
Court explained that the lens blanks ”embodi[ed] essential features
of the patented device and [were] without utility until . . . ground
and polished as the finished lens of the patent.” The Court noted that:
”where one has sold an uncompleted article which, be-
cause it embodies essential features of his patented inven-
tion, is within the protection of his patent, and has des-
tined the article to be finished by the purchaser in confor-
mity to the patent, he has sold his invention so far as it is
or may be embodied in that particular article.”
In sum, the Court concluded that the traditional bar on patent re-
strictions following the sale of an item applies when the item suffi-
ciently embodies the patent – even if it does not completely practice
the patent – such that its only and intended use is to be finished under
the terms of the patent.
III
3
Lens blanks are rough opaque pieces of glass of suitable size, design and com-
position for use, when ground and polished, as multi-focal lenses in eyeglasses.
F. DEFENSES 229
A
LGE argues that the exhaustion doctrine is inapplicable here because
it does not apply to method claims, which are contained in each of the
LGE Patents. LGE reasons that, because method patents are linked
not to a tangible article but to a process, they can never be exhausted
through a sale. Rather, practicing the patent – which occurs upon
each use of an article embodying a method patent–is permissible
only to the extent rights are transferred in an assignment contract.
Quanta, in turn, argues that there is no reason to preclude exhaus-
tion of method claims, and points out that both this Court and the
Federal Circuit have applied exhaustion to method claims. It argues
that any other rule would allow patent holders to avoid exhaustion
entirely by inserting method claims in their patent specifications.
Quanta has the be er of this argument. Nothing in this Court’s ap-
proach to patent exhaustion supports LGE’s argument that method
patents cannot be exhausted. It is true that a patented method may
not be sold in the same way as an article or device, but methods
nonetheless may be ”embodied” in a product, the sale of which ex-
hausts patent rights. Our precedents do not differentiate transactions
involving embodiments of patented methods or processes from those
involving patented apparatuses or materials. To the contrary, this
Court has repeatedly held that method patents were exhausted by
the sale of an item that embodied the method. In Ethyl Gasoline Corp. Ethyl Gasoline: 309 U.S. 436 (1940)
v. United States, for example, the Court held that the sale of a mo-
tor fuel produced under one patent also exhausted the patent for a
method of using the fuel in combustion motors.4 Similarly, as previ-
ously described, Univis held that the sale of optical lens blanks that
partially practiced a patent exhausted the method patents that were
not completely practiced until the blanks were ground into lenses.
These cases rest on solid footing. Eliminating exhaustion for
method patents would seriously undermine the exhaustion doctrine.
Patentees seeking to avoid patent exhaustion could simply draft their
patent claims to describe a method rather than an apparatus. Appa-
ratus and method claims may approach each other so nearly that it
will be difficult to distinguish the process from the function of the
apparatus. By characterizing their claims as method instead of appa-
ratus claims, or including a method claim for the machine’s patented
method of performing its task, a patent drafter could shield practi-
4
The patentee held patents for (1) a fluid additive increasing gasoline efficiency,
(2) motor fuel produced by mixing gasoline with the patented fluid, and (3) a
method of using fuel containing the patented fluid in combustion motors. The
patentee sold only the fluid, but a empted to control sales of the treated fuel. The
Court held that the sale of the fluid to refiners relinquished the patentee’s exclusive
rights to sell the treated fuel.
230 CHAPTER 3. PATENT
cally any patented item from exhaustion.
This case illustrates the danger of allowing such an end-run
around exhaustion. On LGE’s theory, although Intel is authorized
to sell a completed computer system that practices the LGE Patents,
any downstream purchasers of the system could nonetheless be liable
for patent infringement. Such a result would violate the longstand-
ing principle that, when a patented item is once lawfully made and
sold, there is no restriction on its use to be implied for the benefit of
the patentee.
B
We next consider the extent to which a product must embody a patent
in order to trigger exhaustion. Quanta argues that, although sales of
an incomplete article do not necessarily exhaust the patent in that ar-
ticle, the sale of the microprocessors and chipsets exhausted LGE’s
patents in the same way the sale of the lens blanks exhausted the
patents in Univis. Just as the lens blanks in Univis did not fully prac-
tice the patents at issue because they had not been ground into fin-
ished lenses, Quanta observes, the Intel Products cannot practice the
LGE Patents – or indeed, function at all – until they are combined
with memory and buses in a computer system. If, as in Univis, patent
rights are exhausted by the sale of the incomplete item, then LGE has
no postsale right to require that the patents be practiced using only In-
tel parts. Quanta also argues that exhaustion doctrine will be a dead
le er unless it is triggered by the sale of components that essentially,
even if not completely, embody an invention. Otherwise, patent hold-
ers could authorize the sale of computers that are complete with the
exception of one minor step – say, inserting the microprocessor into a
socket – and extend their rights through each downstream purchaser
all the way to the end user.
We agree with Quanta that Univis governs this case. As the Court
there explained, exhaustion was triggered by the sale of the lens
blanks because their only reasonable and intended use was to prac-
tice the patent and because they ”embodie[d] essential features of
[the] patented invention.” Each of those a ributes is shared by the
microprocessors and chipsets Intel sold to Quanta under the License
Agreement.
C
Having concluded that the Intel Products embodied the patents, we
next consider whether their sale to Quanta exhausted LGE’s patent
rights. Exhaustion is triggered only by a sale authorized by the patent
holder.
LGE argues that there was no authorized sale here because the Li-
cense Agreement does not permit Intel to sell its products for use in
F. DEFENSES 231
combination with non-Intel products to practice the LGE Patents. It
cites General Talking Pictures Corp. v. Western Elec. Co. I, and General General Talking Pictures I: 304 U.S. 175
Talking Pictures Corp. v. Western Elec. Co. II, in which the manufac- (1938)
turer sold patented amplifiers for commercial use, thereby breaching General Talking Pictures II: 305 U.S. 124
(1938)
a license that limited the buyer to selling the amplifiers for private and
home use. The Court held that exhaustion did not apply because the
manufacturer had no authority to sell the amplifiers for commercial
use, and the manufacturer ”could not convey to petitioner what both
knew it was not authorized to sell.” LGE argues that the same princi-
ple applies here: Intel could not convey to Quanta what both knew it
was not authorized to sell, i.e., the right to practice the patents with
non-Intel parts.
LGE overlooks important aspects of the structure of the Intel-LGE
transaction. Nothing in the License Agreement restricts Intel’s right
to sell its microprocessors and chipsets to purchasers who intend
to combine them with non-Intel parts. It broadly permits Intel to
”‘make, use, [or] sell’” products free of LGE’s patent claims. To be
sure, LGE did require Intel to give notice to its customers, includ-
ing Quanta, that LGE had not licensed those customers to practice
its patents. But neither party contends that Intel breached the agree-
ment in that respect. In any event, the provision requiring notice to
Quanta appeared only in the Master Agreement, and LGE does not
suggest that a breach of that agreement would constitute a breach of
the License Agreement. Hence, Intel’s authority to sell its products
embodying the LGE Patents was not conditioned on the notice or on
Quanta’s decision to abide by LGE’s directions in that notice.
LGE points out that the License Agreement specifically dis-
claimed any license to third parties to practice the patents by com-
bining licensed products with other components. But the question
whether third parties received implied licenses is irrelevant because
Quanta asserts its right to practice the patents based not on implied
license but on exhaustion. And exhaustion turns only on Intel’s own
license to sell products practicing the LGE Patents.
Alternatively, LGE invokes the principle that patent exhaustion
does not apply to postsale restrictions on ”making” an article. But
this is simply a rephrasing of its argument that combining the Intel
Products with other components adds more than standard finishing
to complete a patented article. As explained above, making a product
that substantially embodies a patent is, for exhaustion purposes, no
different from making the patented article itself. In other words, no
further ”making” results from the addition of standard parts–here,
the buses and memory – to a product that already substantially em-
bodies the patent.
The License Agreement authorized Intel to sell products that prac-
ticed the LGE Patents. No conditions limited Intel’s authority to sell
232 CHAPTER 3. PATENT
products substantially embodying the patents. Because Intel was au-
thorized to sell its products to Quanta, the doctrine of patent exhaus-
tion prevents LGE from further asserting its patent rights with respect
to the patents substantially embodied by those products.7
Lexmark Intern., Inc. v. Impression Products, Inc.
816 F. 3d 721 (Fed Cir. 2016) (en banc)
Lexmark International, Inc. makes and sells printers as well as toner
cartridges for its printers. Lexmark owns a number of patents that
cover its cartridges and their use.
Lexmark offers buyers a choice. A buyer may purchase a ”Regular
Cartridge” at full price, in which case the buyer is not subject to any
sale terms restricting reuse or resale of the cartridge. Alternatively, a
buyer may purchase a ”Return Program Cartridge” at a discount of
roughly 20 percent, subject to a single-use/no-resale restriction: the
buyer may not reuse the cartridge after the toner runs out and may
not transfer it to anyone but Lexmark once it is used, i.e., the buyer
must ”return” the cartridge ”only” to Lexmark.
The distinctness of the options for buyers, which produce differ-
ent revenues for Lexmark, is not just a ma er of different terms of
sale. It also is reflected in a microchip in the cartridges that, among
other things, communicates with the printer. For a Return Program
cartridge, the chip and printer, by monitoring toner levels, prevent
use of a refilled cartridge. For a Regular cartridge, the toner can
be replenished and the cartridge reused. To circumvent this tech-
nological measure, however, third parties have ”hacked” Lexmark’s
microchips and created their own ”unauthorized replacement” mi-
crochips” that, when installed in a Return Program cartridge, fool
the printer into allowing reuse of that cartridge. It is undisputed that
various companies gather spent cartridges, replace the microchips,
refill and ”remanufacture” the cartridges, and sell them to resellers
like Impression for marketing to consumers for use with Lexmark
printers.
Lexmark sells its cartridges in two channels of distribution. It
sells directly to end users, and it sells to ”re-sellers” (including whole-
salers, dealers, and distributors). There is no dispute about the ade-
quacy of notice to resellers as well as end users or the binding nature
of the Lexmark-reseller agreements.
Mallinckrodt: 976 F.2d 700 (Fed. Cir. We adhere to the holding of Mallinckrodt, Inc. v. Medipart, Inc., that
1992) a patentee, when selling a patented article subject to a single-use/no-
resale restriction that is lawful and clearly communicated to the pur-
chaser, does not by that sale give the buyer, or downstream buyers,
7
We note that the authorized nature of the sale to Quanta does not necessarily
limit LGE’s other contract rights. LGE’s complaint does not include a breach-of-
contract claim, and we express no opinion on whether contract damages might be
available even though exhaustion operates to eliminate patent damages.
F. DEFENSES 233
the resale/reuse authority that has been expressly denied. Such resale
or reuse, when contrary to the known, lawful limits on the authority
conferred at the time of the original sale, remains unauthorized and
therefore remains infringing conduct under the terms of § 271.
Mallinckrodt involved a patentee’s sale of its medical device to hos-
pitals, subject to a ”single use only” restriction. But some hospital
purchasers instead sent used devices to Medipart for reconditioning
and for replacement of certain components.
As the Mallinckrodt court observed, in General Talking Pictures II
”the patentee had authorized the licensee to make and sell amplifiers
embodying the patented invention for a specified use (home radios),”
and ”the defendant had purchased the patented amplifier from the
manufacturing licensee, with knowledge of the patentee’s restriction
on use,” but used it contrary to the restriction. The Supreme Court
held that the defendant was liable for infringement; it ”observed that
a restrictive license to a particular use was permissible, and treated
the purchaser’s unauthorized use as infringement of the patent.” This
court noted that the Supreme Court in General Talking Pictures II ”did
not decide the situation where the patentee was the manufacturer”
and seller. This court then held that to distinguish the patentee sale
(at issue in Mallinckrodt) from the licensee sale General Talking Pictures
II would be to make ”formalistic distinctions of no economic conse-
quence.”
The court in Mallinckrodt concluded that ”unless the condition vi-
olates some other law or policy, private parties retain the freedom to
contract concerning conditions of sale.” Thus, unless a sale restriction
is improper under some other body of law, whether within the Patent
Act or outside it, a patentee’s own sale of its patented article subject
to a clearly communicated restriction does not confer authority to sell
or use the article in violation of that restriction, i.e., does not exhaust
the patentee’s § 271 rights against such conduct involving that article.
The district court concluded in this case that Quanta overturned
the Mallinckrodt rule as to a patentee’s sale of a patented article subject
to a clearly communicated single-use/no-resale restriction. But no is-
sue as to such a sale was presented for decision or decided in Quanta.
And the Supreme Court in Quanta did not address the distinction be-
tween patentee sales and licensee sales on which the argument for
overturning Mallinckrodt rests.
Dyk, Circuit Judge, dissenting, with whom Circuit Judge Hughes
joins.
I respectfully dissent from the majority’s holding that Mallinckrodt
remains good law. I agree with the government that Mallinckrodt was
wrong when decided, and in any event cannot be reconciled with
the Supreme Court’s recent decision in Quanta. We exceed our role
234 CHAPTER 3. PATENT
as a subordinate court by declining to follow the explicit domestic
exhaustion rule announced by the Supreme Court.
3 Miscellaneous
Patent Act
§ 273(a)
A person shall be entitled to a defense under section 282(b) with
Defense to infringement based on prior respect to subject ma er consisting of a process, or consisting of a
commercial use machine, manufacture, or composition of ma er used in a manufac-
turing or other commercial process, that would otherwise infringe a
claimed invention being asserted against the person if –
Even though thousands of patent cases (1) such person, acting in good faith, commercially used the sub-
are filed every year, the prior use de- ject ma er in the United States, either in connection with an
fense is only rarely asserted. Why might
internal commercial use or an actual arm’s length sale or other
that be?
arm’s length commercial transfer of a useful end result of such
commercial use; and
(2) such commercial use occurred at least 1 year before the earlier
of either—
(A) the effective filing date of the claimed invention; or
(B) the date on which the claimed invention was disclosed to
the public in a manner that qualified for the exception from
prior art under section 102(b).
Madey v. Duke University
307 F.3d 1351 (Fed Cir. (2002)
[Madey owned a patent on certain laser technology. Duke practiced
the patent as part of a research project under a federally funded
grant.]
Madey argues, and we agree, that the district court had an overly
broad conception of the very narrow and strictly limited experimen-
tal use defense. The district court stated that the experimental use
defense inoculated uses that ”were solely for research, academic, or
experimental purposes,” and that the defense covered use that ”is
made for experimental, non-profit purposes only.” Both formulations
are too broad and stand in sharp contrast to our admonitions in Em-
brex and Roche that the experimental use defense is very narrow and
Embrex: 216 F. 3d 1343 strictly limited. In Embrex, Inc. v. Service Engineering Corp, we held
that the defense was very narrow and limited to actions performed
”for amusement, to satisfy idle curiosity, or for strictly philosophical
inquiry.” Further, use does not qualify for the experimental use de-
fense when it is undertaken in the ”guise of scientific inquiry” but has
”definite, cognizable, and not insubstantial commercial purposes.”
F. DEFENSES 235
Our precedent clearly does not immunize use that is in any way
commercial in nature. Similarly, our precedent does not immunize
any conduct that is in keeping with the alleged infringer’s legitimate
business, regardless of commercial implications. For example, major
research universities, such as Duke, often sanction and fund research
projects with arguably no commercial application whatsoever. How-
ever, these projects unmistakably further the institution’s legitimate
business objectives, including educating and enlightening students
and faculty participating in these projects. These projects also serve,
for example, to increase the status of the institution and lure lucrative
research grants, students and faculty.
In the present case, the district court a ached too great a weight to
the nonprofit, educational status of Duke, effectively suppressing the
fact that Duke’s acts appear to be in accordance with any reasonable
interpretation of Duke’s legitimate business objectives. The correct
focus should not be on the non-profit status of Duke but on the legit-
imate business Duke is involved in and whether or not the use was
solely for amusement, to satisfy idle curiosity, or for strictly philo-
sophical inquiry.
236 CHAPTER 3. PATENT
4
Copyright
Copyright protects creative expression. In some respects it is struc- The standard copyright treatises are
turally analogous to patent law: both reward someone who creates Melville B. Nimmer & David Nimmer,
Nimmer on Copyright (Matthew Bender,
valuable information with exclusive rights over it. But in many other
on Lexis), William F. Patry, Patry on
respects – including subject ma er, novelty, registration, term, and Copyright (Thomson Reuters, on West-
similarity – copyright is almost completely the opposite of patent. law), and Paul Goldstein, Goldstein on
The standard justification for copyright law is a familiar and util- Copyright (Wolters Kluwer).
itarian: to maximize public access to the fruits of human creativity.
Thus, copyright law provides an economic incentive to create new
expressive works, and provides protections to encourage the distri-
bution of those works. Another rationale, with more of a natural-law
flavor, is to protect authors’ non-economic rights by giving them cre-
ative control. One sometimes also sees arguments that link copyright
and freedom of speech in a shared goal of creating a diverse society
with a healthy culture and healthy democracy.
A Subject Matter
Copyright Act
Copyright protection subsists, in accordance with this title, in origi- 17 U.S.C. § 102(a)
nal works of authorship fixed in any tangible medium of expression, Subject matter of copyright: In general
now known or later developed, from which they can be perceived,
reproduced, or otherwise communicated, either directly or with the
aid of a machine or device. Works of authorship include the follow-
ing categories:
(1) literary works;
(2) musical works, including any accompanying words;
(3) dramatic works, including any accompanying music;
(4) pantomimes and choreographic works;
(5) pictorial, graphic, and sculptural works;
238 CHAPTER 4. COPYRIGHT
(6) motion pictures and other audiovisual works;
(7) sound recordings; and
(8) architectural works.
Feist Publications, Inc. v. Rural Telephone Service Co.
499 U.S. 340 (1991)
The sine qua non of copyright is originality. To qualify for copyright
protection, a work must be original to the author. Original, as the
term is used in copyright, means only that the work was indepen-
dently created by the author (as opposed to copied from other works),
and that it possesses at least some minimal degree of creativity. To
be sure, the requisite level of creativity is extremely low; even a slight
amount will suffice. The vast majority of works make the grade quite
easily, as they possess some creative spark, no ma er how crude,
humble or obvious it might be. Originality does not signify novelty;
a work may be original even though it closely resembles other works
so long as the similarity is fortuitous, not the result of copying. To il-
lustrate, assume that two poets, each ignorant of the other, compose
identical poems. Neither work is novel, yet both are original and,
hence, copyrightable.
Elsewhere, Feist helpfully expresses the elements of originality as ”in-
dependent creation plus a modicum of creativity.” The second prong
We will return to independent creation is the subject (pun intended) of this section. First, we look at it as
in the Ownership section. a threshold test: when are works uncopyrightable because they are
uncreative? Then, we ask whether it expresses any exclusions from
copyrightability. In one sense, no: courts are not to inquire into a
work’s quality or morality. In another sense, yes: ”ideas” are re-
garded as uncopyrightable, even if they are original.
1 Creativity: How Much Is a Modicum?
Code of Federal Regulations
37 C.F.R. § 202.1
The following are examples of works not subject to copyright and
Material not subject to copyright applications for registration of such works cannot be entertained:
"The chief similarity between the two (a) Words and short phrases such as names, titles, and slogans; fa-
works is identity of title [We Who Are miliar symbols or designs; mere variations of typographic orna-
Young], but it is well settled that the mentation, le ering or coloring; mere listing of ingredients or
copyright of a book or play does not
give the copyright owner the exclusive
contents;
right to the use of the title." Becker v. (d) Works consisting entirely of information that is common prop-
Loew's, Inc., 133 F.2d 889 (7th Cir. 1943) erty containing no original authorship, such as, for example:
A. SUBJECT MATTER 239
Standard calendars, height and weight charts, tape measures
and rulers, schedules of sporting events, and lists or tables taken
from public documents or other common sources.
Feist Publications, Inc. v. Rural Telephone Service Co.
499 U.S. 340 (1991)
This case requires us to clarify the extent of copyright protection avail-
able to telephone directory white pages.
I
Rural Telephone Service Company, Inc., is a certified public utility
that provides telephone service to several communities in northwest
Kansas. It is subject to a state regulation that requires all telephone
companies operating in Kansas to issue annually an updated tele-
phone directory. Accordingly, as a condition of its monopoly fran-
chise, Rural publishes a typical telephone directory, consisting of
white pages and yellow pages. The white pages list in alphabeti-
cal order the names of Rural’s subscribers, together with their towns
and telephone numbers. The yellow pages list Rural’s business sub-
scribers alphabetically by category and feature classified advertise-
ments of various sizes. Rural distributes its directory free of charge
to its subscribers, but earns revenue by selling yellow pages adver-
tisements.
[Feist published a telephone directory, containing both white and
yellow pages, covering a much larger geographic area. It contained
46,878 white-pages listings. Feist requested a license to Rural’s list-
ings; Rural refused.]
Unable to license Rural’s white pages listings, Feist used them
without Rural’s consent. Feist began by removing several thousand
listings that fell outside the geographic range of its area-wide di-
rectory, then hired personnel to investigate the 4,935 that remained.
These employees verified the data reported by Rural and sought to
obtain additional information. As a result, a typical Feist listing in-
cludes the individual’s street address; most of Rural’s listings do not.
Notwithstanding these additions, however, 1,309 of the 46,878 list-
ings in Feist’s 1983 directory were identical to listings in Rural’s 1982-
1983 white pages. Four of these were fictitious listings that Rural had
inserted into its directory to detect copying.
Rural sued for copyright infringement in the District Court for the
District of Kansas taking the position that Feist, in compiling its own
directory, could not use the information contained in Rural’s white
pages. Rural asserted that Feist’s employees were obliged to travel
door-to-door or conduct a telephone survey to discover the same in-
formation for themselves. Feist responded that such efforts were eco-
nomically impractical and, in any event, unnecessary because the in-
formation copied was beyond the scope of copyright protection. The
240 CHAPTER 4. COPYRIGHT
District Court granted summary judgment to Rural.
II
A
This case concerns the interaction of two well-established proposi-
tions. The first is that facts are not copyrightable; the other, that com-
pilations of facts generally are. Each of these propositions possesses
an impeccable pedigree.
The key to resolving the tension lies in understanding why facts
are not copyrightable. No one may claim originality as to facts. This
is because facts do not owe their origin to an act of authorship. The
distinction is one between creation and discovery: The first person to
find and report a particular fact has not created the fact; he or she has
merely discovered its existence.
Factual compilations, on the other hand, may possess the requi-
site originality. The compilation author typically chooses which facts
to include, in what order to place them, and how to arrange the col-
lected data so that they may be used effectively by readers. These
choices as to selection and arrangement, so long as they are made
independently by the compiler and entail a minimal degree of cre-
ativity, are sufficiently original that Congress may protect such com-
pilations through the copyright laws.
This inevitably means that the copyright in a factual compilation
is thin. Notwithstanding a valid copyright, a subsequent compiler
remains free to use the facts contained in another’s publication to aid
in preparing a competing work, so long as the competing work does
not feature the same selection and arrangement.
B
As we have explained, originality is a constitutionally mandated pre-
requisite for copyright protection. The Court’s decisions announcing
this rule predate the Copyright Act of 1909, but ambiguous language
in the 1909 Act caused some lower courts temporarily to lose sight of
this requirement.
Making ma ers worse, these courts developed a new theory to
justify the protection of factual compilations. Known alternatively
as “sweat of the brow” or “industrious collection,” the underlying
notion was that copyright was a reward for the hard work that went
into compiling facts. The classic formulation of the doctrine appeared
Jeweler's Circular: 281 F. 83 (2d Cir. in Jeweler’s Circular Publishing Co.:
1922)
The right to copyright a book upon which one has ex-
pended labor in its preparation does not depend upon
whether the materials which he has collected consist or
A. SUBJECT MATTER 241
not of ma ers which are publici juris, or whether such ma-
terials show literary skill or originality, either in thought
or in language, or anything more than industrious collec-
tion. The man who goes through the streets of a town and
puts down the names of each of the inhabitants, with their
occupations and their street number, acquires material of
which he is the author.
Without a doubt, the “sweat of the brow” doctrine flouted basic copy-
right principles. Throughout history, copyright law has recognized
a greater need to disseminate factual works than works of fiction or
fantasy. But “sweat of the brow” courts took a contrary view; they
handed out proprietary interests in facts and declared that authors
are absolutely precluded from saving time and effort by relying upon
the facts contained in prior works.
C
The definition of “compilation” is found in § 101 of the 1976 Act. It
defines a “compilation” in the copyright sense as “a work formed by
the collection and assembling of preexisting materials or of data that
are selected, coordinated, or arranged in such a way that the resulting
work as a whole constitutes an original work of authorship.”
As discussed earlier, however, the originality requirement is not
particularly stringent. A compiler may se le upon a selection or ar-
rangement that others have used; novelty is not required. Originality
requires only that the author make the selection or arrangement inde-
pendently (i. e., without copying that selection or arrangement from
another work), and that it display some minimal level of creativity.
Presumably, the vast majority of compilations will pass this test, but
not all will. There remains a narrow category of works in which the
creative spark is u erly lacking or so trivial as to be virtually nonex-
istent. Such works are incapable of sustaining a valid copyright.
In summary, the 1976 revisions to the Copyright Act leave no
doubt that originality, not “sweat of the brow,” is the touchstone of
copyright protection in directories and other fact-based works. Nor is
there any doubt that the same was true under the 1909 Act. The 1976
revisions were a direct response to the Copyright Office’s concern
that many lower courts had misconstrued this basic principle, and
Congress emphasized repeatedly that the purpose of the revisions
was to clarify, not change, existing law. The revisions explain with
painstaking clarity that copyright requires originality, § 102(a); that
facts are never original, § 102(b); that the copyright in a compilation
does not extend to the facts it contains, § 103(b); and that a compi-
lation is copyrightable only to the extent that it features an original
selection, coordination, or arrangement, § 101.
242 CHAPTER 4. COPYRIGHT
III
The selection, coordination, and arrangement of Rural’s white pages
do not satisfy the minimum constitutional standards for copyright
protection. As mentioned at the outset, Rural’s white pages are en-
tirely typical. Persons desiring telephone service in Rural’s service
area fill out an application and Rural issues them a telephone num-
ber. In preparing its white pages, Rural simply takes the data pro-
vided by its subscribers and lists it alphabetically by surname. The
end product is a garden-variety white pages directory, devoid of even
the slightest trace of creativity.
Rural’s selection of listings could not be more obvious: It pub-
lishes the most basic information – name, town, and telephone num-
ber – about each person who applies to it for telephone service. This
is “selection” of a sort, but it lacks the modicum of creativity neces-
sary to transform mere selection into copyrightable expression. Rural
expended sufficient effort to make the white pages directory useful,
but insufficient creativity to make it original.
We note in passing that the selection featured in Rural’s white
pages may also fail the originality requirement for another reason.
Feist points out that Rural did not truly “select” to publish the names
and telephone numbers of its subscribers; rather, it was required to
do so by the Kansas Corporation Commission as part of its monopoly
franchise. Accordingly, one could plausibly conclude that this selec-
tion was dictated by state law, not by Rural.
Nor can Rural claim originality in its coordination and arrange-
ment of facts. The white pages do nothing more than list Rural’s
subscribers in alphabetical order. This arrangement may, technically
speaking, owe its origin to Rural; no one disputes that Rural under-
took the task of alphabetizing the names itself. But there is nothing
remotely creative about arranging names alphabetically in a white
pages directory. It is an age-old practice, firmly rooted in tradition
and so commonplace that it has come to be expected as a ma er
of course. It is not only unoriginal, it is practically inevitable. This
time-honored tradition does not possess the minimal creative spark
required by the Copyright Act and the Constitution.
Because Rural’s white pages lack the requisite originality, Feist’s
use of the listings cannot constitute infringement. This decision
should not be construed as demeaning Rural’s efforts in compiling
its directory, but rather as making clear that copyright rewards origi-
nality, not effort. As this Court noted more than a century ago, “great
praise may be due to the plaintiffs for their industry and enterprise
in publishing this paper, yet the law does not contemplate their being
rewarded in this way.” Baker
Arrows Problem
A. SUBJECT MATTER 243
Is this logo (for a professional sports team) sufficiently creative to be
copyrightable?
Baseball Card Price Report Problem
The Baseball Card Price Report is a comprehensive printed list of col-
lectible baseball cards sold between 1909 and 2011. It lists 32,000 base-
ball cards and a market price for each of them. The market price is
Arrows logo
determined by obtaining transaction lists from several dozen large
dealers and averaging the sales prices for the card over the past year. Based on Eckes v. Card Prices Update,
736 F.2d 859 (2d Cir. 1984), and similar
The Report is organized by year: it has a section for 1909, a section
cases
for 1910, and so on. Each section is subdivided into a list of manufac-
turers (Topps, Upper Deck, and so on). Each manufacturer’s list is
then divided by teams, and players are listed alphabetically by last
name within a team section. For each card, the Report gives prices
for mint, excellent, very good, good, and fair condition cards. In addi-
tion, about 9,000 of the cards are noted with a star to indicate that they
are “premium” cards. These cards are considered especially valuable
beacuse the player is in the Hall of Fame, played for a famous team, or
some other reason that makes the card especially scarce or especially
prized by collectors.
An entrepreneur calling himself Tyrone Tyrannosaurus has
started a website called the “Collector’s Cheat Sheet.” The front of
the site consists of three drop-down menus: year, team, and player
name. Once a user selects all three, he is taken to a page that lists all
of the companies that made cards of that player in that year. If a card
is considered “premium” by the Report, the Cheat Sheet lists the card
in bold.
You represent Mr. Tyrannosaurus, who has received a cease-and-
desist le er from the publisher of the Report claiming that the Cheat
Sheet is infringing on a copyright in the Report. What is your advice
to your client?
2 Aesthetic Nondiscrimination
Bleistein v. Donaldson Lithographing Co.
188 U.S. 239 (1903)
[The plaintiffs produced three large color posters (”chro-
molithographs”) to be used as advertisements for Wallace’s
circus. Later, the defendant reproduced the posters in smaller
black-and-white versions, as advertisements for the same circus.
When sued, the defendants argued that the chromolithographs were
not copyrightable.]
We shall do no more than mention the suggestion that painting
and engraving unless for a mechanical end are not among the use-
Wallace circus poster
ful arts, the progress of which Congress is empowered by the Con-
(Holmes, J.)
244 CHAPTER 4. COPYRIGHT
stitution to promote. The Constitution does not limit the useful to
that which satisfies immediate bodily needs. It is obvious also that
the plaintiffs’ case is not affected by the fact, if it be one, that the
pictures represent actual groups – visible things. They seem from
the testimony to have been composed from hints or description, not
from sight of a performance. But even if they had been drawn from
the life, that fact would not deprive them of protection. The opposite
proposition would mean that a portrait by Velasquez or Whistler was
common property because others might try their hand on the same
face. Others are free to copy the original. They are not free to copy
the copy. The copy is the personal reaction of an individual upon
nature. Personality always contains something unique. It expresses
its singularity even in handwriting, and a very modest grade of art
has in it something irreducible, which is one man’s alone. That some-
thing he may copyright unless there is a restriction in the words of
the act.
If there is a restriction it is not to be found in the limited preten-
sions of these particular works. The least pretentious picture has
more originality in it than directories and the like, which may be copy-
righted.
[The copyright act in force at the time protected only defined cat-
egories of works, one of which was ”pictorial illustrations or works
connected with the fine arts.”] These chromolithographs are ”picto-
rial illustrations.” The word ”illustrations” does not mean that they
must illustrate the text of a book, and that the etchings of Rembrandt
or Steinla’s engraving of the Madonna di San Sisto could not be pro-
tected to-day if any man were able to produce them. Again, the act
however construed, does not mean that ordinary posters are not good
enough to be considered within its scope. The antithesis to ”illustra-
tions or works connected with the fine arts” is not works of ti le merit
or of humble degree, or illustrations addressed to the less educated
classes; it is ”prints or labels designed to be used for any other articles
of manufacture.” Certainly works are not the less connected with the
fine arts because their pictorial quality a racts the crowd and there-
fore gives them a real use – if use means to increase trade and to help
to make money. A picture is none the less a picture and none the
less a subject of copyright that it is used for an advertisement. And
if pictures may be used to advertise soap, or the theatre, or monthly
magazines, as they are, they may be used to advertise a circus. Of
course, the ballet is as legitimate a subject for illustration as any other.
A rule cannot be laid down that would excommunicate the paintings
of Degas.
It would be a dangerous undertaking for persons trained only to
the law to constitute themselves final judges of the worth of pictorial
illustrations, outside of the narrowest and most obvious limits. At the
A. SUBJECT MATTER 245
one extreme some works of genius would be sure to miss apprecia-
tion. Their very novelty would make them repulsive until the public
had learned the new language in which their author spoke. It may be
more than doubted, for instance, whether the etchings of Goya or the
paintings of Manet would have been sure of protection when seen
for the first time. At the other end, copyright would be denied to pic-
tures which appealed to a public less educated than the judge. Yet
if they command the interest of any public, they have a commercial
value – it would be bold to say that they have not an aesthetic and
educational value – and the taste of any public is not to be treated
with contempt. It is an ultimate fact for the moment, whatever may
be our hopes for a change. That these pictures had their worth and Compare: "The ultimate good desired
their success is sufficiently shown by the desire to reproduce them is better reached by free trade in ideas.
The best test of truth is the power of
without regard to the plaintiffs’ rights. We are of opinion that there
the thought to get itself accepted in
was evidence that the plaintiffs have rights entitled to the protection the competition of the market." Abrams
of the law. v. United States, 250 U.S. 616 (1919)
(Holmes, J., dissenting).
Compendium of U.S. Copyright Office Practices (3d ed. 2014)
As a general rule, the Copyright Office will not consider factors that
§ 310
have no bearing on whether the originality requirement has been met.
Factors That Will Not Be Considered in
The fact that a work may be novel, distinctive, innovative, or even the Examination of Originality
unique is irrelevant to this analysis. The Copyright Office does not
consider the aesthetic value, artistic merit, or intrinsic quality of a
work. For example, the Office will not look for any particular style of
creative expression. Likewise, the Office will not consider whether a
work is visually appealling or wri en in elegant prose. For the same
reasons, the Office will not consider the truth or falsity of the facts
set forth in a work of authorship. Nor will the Office consider the
soundness of the views expressed in the work.
The Office will focus only on the actual appearance or sound of
the work that has been submi ed for registration, but will not con-
sider any meaning or significance that the work may evoke. The Of-
fice will not consider the author’s inspiration for the work, creative
intent, or intended meaning. The U.S. Copyright Office will not con-
sider the author’s creative skill and experience, because the author’s
personal or professional history is irrelevant to the determination of
copyrightability.
The Office will not consider the amount of time, effort, or expense
required to create the work. As a general rule, the Office will not con-
sider possible design alternatives that the author may have consid-
ered when he or she created the work. Likewise, the Office will not
consider potential variations in the use of the work, such as the fact
that the work could be presented in a different color, in a different
size, or with a different orientation. As a general rule, the materials
246 CHAPTER 4. COPYRIGHT
used to create a work have no bearing on the originality analysis. For
example, the U.S. Copyright Office will not consider the fact that a
jewelry design was constructed with precious metals or gemstones,
or the fact that a silk screen was printed on a particular paper stock.
The U.S. Copyright Office will not consider the marketability or com-
mercial success of the work, because these issues are irrelevant to the
originality analysis.
Mitchell Bros. Film Group v. Cinema Adult Theater
604 F.2d 852 (5th Cir. 1979)
Plaintiffs-appellants owned a properly registered copyright on a mo-
tion picture titled ”Behind the Green Door.” Two groups of defen-
dants, each group consisting of a theater and several individuals,
obtained copies of the movie without plaintiffs’ permission and in-
fringed the copyright by exhibiting the film at the theaters. We hold
that the district court erred in permi ing the assertion of obscenity as
an affirmative defense to the claim of infringement, and, accordingly,
reverse without reaching the question whether the film is obscene.
The district court did not base its decision on standards found
within the [1909 Copyright] Act, which it described as ”silent as to
works which are subject to registration and copyright.” The Act is
not ”silent.” Rather, the statutory language ”all the writings of an au-
thor” is facially all-inclusive, within itself admi ing of no exceptions.
There is not even a hint in the language of § 4 that the obscene nature
"Copyright law is even more
pornography-friendly than the First of a work renders it any less a copyrightable ”writing.”
Amendment. The First Amendment Society’s view of what is moral and immoral continually changes.
will only protect pornography if it To give one example, in Martine i v. Maguire, the play ”The Black
is not obscene or illegal for other Crook,” because it featured women clad in flesh-colored tights, was
reasons; for example, if it contains
depictions of children. Copyright law
held to be ”grossly indecent, and calculated to corrupt the morals
offers protections to pornography no of the people” and hence uncopyrightable. By the early part of this
matter what material it contains. The century, it had become clear that this judgment reflected the moral
First Amendment merely prevents the standards of a bygone era.
government from interfering in the cre- Denying copyright protection to works adjudged obscene by the
ation, distribution and consumption
of pornography that is not obscene
standards of one era would frequently result in lack of copyright pro-
or otherwise illegal. With the current tection (and thus lack of financial incentive to create) for works that
practice of indiscriminately according later generations might consider to be not only non-obscene but even
pornographic works copyright pro- of great literary merit. Many works that are today held in high re-
tection, the government encourages
gard have been adjudged obscene in previous eras. English courts of
and incentivizes the production of
pornography that is non-progressive
the nineteenth century found the works of Byron, Southey and Shel-
and non-useful and therefore beyond ley to be immoral. American courts have found these books, among
the scope of the Intellectual Property others, obscene: Edmund Wilson, M H C ;
Clause of the U.S. Constitution. This Henry Miller, T C and T C ; Erskine
must cease." Ann Bartow, Copyright
Caldwell, G ’ L A ; Lillian Smith, S F ; D. H.
Law and Pornography, 91 Or. L. Rev. 1
(2012). Lawrence, L C ’ L ; Theodore Dreiser, A A -
Martinetti: 16 Fed. Cas. 920 (C.C.Cal. T .
1867)
A. SUBJECT MATTER 247
Belcher v. Tarbox 486 F.2d 1087 (9th Cir. 1973)
Defendant’s primary contention is that the works were not entitled
to copyright protection since they, and the advertising material asso-
ciated with them, fraudulently represented to the public that users of
the system described could beat the horses.
There is nothing in the Copyright Act to suggest that the courts are
to pass upon the truth or falsity, the soundness or unsoundness, of the
views embodied in a copyrighted work. The gravity and immensity
of the problems, theological, philosophical, economic and scientific,
that would confront a court if this view were adopted are staggering
to contemplate. It is surely not a task lightly to be assumed, and we
decline the invitation to assume it.
3 Idea and Expression
Copyright Act
In no case does copyright protection for an original work of author-
17 U.S.C. § 102
ship extend to any idea, procedure, process, system, method of opera- Subject matter of copyright: In general
tion, concept, principle, or discovery, regardless of the form in which
it is described, explained, illustrated, or embodied in such work.
It is hornbook law that ideas are not copyrightable, only an author’s
individual expression of those ideas. But what qualifies as an ”idea”
can only be learned by seeing what courts treat as one. Sometimes
”idea” refers to the general creative concept for a work, as distinguished
from its more specific details. Sometimes ”idea” is used as a synec-
doche for other § 102(b) exclusions – ”procedure, process, system,
method of operation” – that describe functional ma er in a work. In
addition, two closely related doctrines – merger and scènes à faire –
help implement these exclusions.
Blehm v. Jacobs
702 F. 3d 1193 (10th Cir. 2012)
Appellant Gary Blehm brought this copyright infringement action
against brothers Albert and John Jacobs and the Life is Good Com-
pany (collectively ”Life is Good”). Mr. Blehm is the creator of copy-
righted posters featuring cartoon characters called ”Penmen.” He
contends that numerous Life is Good depictions of a cartoon char-
acter called ”Jake” infringe on his copyrighted works. The district
court granted Life is Good’s motion for summary judgment, holding
that no infringement occurred because the copyrighted and accused
works are not substantially similar.
248 CHAPTER 4. COPYRIGHT
I. B
Mr. Blehm is a commercial artist who lives in Colorado Springs, Col-
orado. In the late 1980s, he developed characters called ”Penmen.”
According to Mr. Blehm, each Penman is ”a deceptively-simple look-
ing figure” that ”engages in a variety of activities pulled directly from
his colorful life experiences.” The Penmen have ”round heads, dispro-
portionately large half-moon smiles, four fingers, large feet, dispro-
portionately long legs, and a message of unbridled optimism.”
The Penmen are a product of Mr. Blehm’s commercial art training.
Through his training, Mr. Blehm learned how to ”add a slight bend
to a figure’s limb to show weight bearing into it” and how, as he puts
it, to apply negative space. Eventually, Mr. Blehm developed rules
and guidelines for drawing each Penman. These rules and guidelines
include a specific shape for each Penman’s head, specific length and
height requirements for each character, rules on fluidity and perspec-
tive, and the ”Penmen parallel curve,” which Mr. Blehm employs to
”create eye-pleasing shapes within the negative space.”
In 1990, Mr. Blehm began selling his posters to distributors. From
1990 to 2004, Prints Plus sold his posters nationally.
Starting in 1989, the Jacobs brothers designed and sold t-shirts
”infused with a positive undertone as a reflection of their beliefs.”
The brothers sold t-shirts in areas around Boston, including Harvard
Square, not far from the Harvard Coop. During the 1993 holiday sea-
son, the Jacobses sold t-shirts from carts in the Cambridgeside Galle-
ria and the Emerald Square Mall, both of which had Prints Plus stores
that sold Mr. Blehm’s posters.
According to the Jacobses, around April 1994 John Jacobs drew a
sketch of a figure with a red face, wide smile, sunglasses, and a beret.
The figure was enclosed in two circles. John hung the sketch on the
wall of the brothers’ apartment.
The Jacobses recall hosting a party in August 1994 at their apart-
ment and soliciting feedback on the sketch from their friends. After a
friend stated that the figure in the sketch ”really has life figured out,”
John Jacobs wrote ”Life is good” under the image. They named the
image ”Jake,” a spinoff of their last name.
The Jacobses soon made and sold t-shirts featuring Jake at street
fairs and to retailers. As demand for the shirts increased, John Jacobs
added a torso, arms, and feet to the Jake head. Jake was portrayed en-
gaging in simple activities, such as biking, hiking, golfing, and play-
ing soccer.
The Jacobses incorporated Life is Good in 1997 with the ”overar-
ching themes of optimism, simplicity, humor, and humility.”
II. D
A. SUBJECT MATTER 249
A. Substantial Similarity
1. Legal Framework
In order to prove copying of legally protectable material, a plain-
tiff must typically show substantial similarity between legally [pro-
tectable] elements of the original work and the allegedly infringing
work. This commonly stated rule raises two questions: First, what
elements of a copyrighted work are legally protectable? Second,
how do courts determine whether a copyrighted work’s legally pro-
tectable elements are ”substantially similar” to an accused work?
Section 102(a) of the Copyright Act states that a copyright protects
the ”original works of authorship fixed in any tangible medium of ex-
pression,” including pictorial and graphic works. 17 U.S.C. S 102(a).
To gain protection, the work must demonstrate at least some minimal
degree of creativity, but even a slight amount will suffice. The vast
majority of works make the grade quite easily, as they possess some
creative spark, no ma er how crude, humble or obvious it might be.
But legal protection does not extend to all aspects of a copyrighted
work. Section 102(b) provides, ”In no case does copyright protection
... extend to any idea ... [or] concept ... regardless of the form in which
it is described, explained, illustrated, or embodied in such work.” 17
U.S.C. S 102(b). This provision enshrines the fundamental tenet that
copyright protection extends only to the author’s original expression
and not to the ideas embodied in that expression.
Thus, courts comparing works must first distill the protectable el-
ements of the copyrighted work – i.e., determine what aspects consti-
tute protectable expression. But this process, although sound in the-
ory, is difficult to apply in practice. More than 50 years ago, Judge
Learned Hand recognized that ”[t]he test for infringement of a copy-
right is of necessity vague.” Peter Pan Fabrics, Inc. v. Martin Weiner Peter Pan Fabrics: 274 F.2d 487 (2nd Cir.
Corp.. Because ”no principle can be stated as to when an imitator has 1960)
gone beyond copying the ’idea,’ and has borrowed its ’expression[,]’
[d]ecisions must therefore inevitably be ad hoc.” Id.We follow this
case-by-case approach, and are mindful that copyright law seeks to
achieve a proper balance between competition based on public ideas
and incentive to produce original work.
Because the idea/expression distinction is the most complex part
of the substantial similarity inquiry, we discuss a few examples
where courts have separated the two. In Country Kids ’N City Slicks, Country Kids: 77 F.3d 1280 (10th Cir.
Inc. v. Sheen, this court held that copyright protection did not ”ex- 1996)
tend to the size, shape and medium” of wooden dolls. We explained
that the Copyright Act is concerned with artistic innovation and ex-
cludes protection for a work’s ”utilitarian qualities.” The idea of a
wooden doll is not copyrightable, nor are ”any basic and utilitarian
250 CHAPTER 4. COPYRIGHT
aspects of the dolls, such as the shape of a human body and standard
doll poses which are both friendly and inviting and also utilitarian in
their ease of manufacture and adaptability to the a achment of vari-
ous wardrobes.”
Similarly, a copyright owner has no monopoly over the idea of
fashion dolls with a bra y look or a itude, or dolls sporting trendy
clothing. Nor does copyright protection extend to the idea of creating
a doll with an upturned nose, bow lips, and widely spaced eyes, even
if the allegedly infringing work has explicitly taken this idea from the
copyrighted work.
Copyright instead protects the particularized expression of the
idea of a doll with such features. For example, although a copyright
owner has no monopoly over the idea of a muscular doll in a stan-
dard pose, the owner may have a valid infringement claim for copy-
ing of the particularized expression of that idea, such as the decision
to accentuate certain muscle groups relative to others. A copyright
owner’s original stylistic choices qualify as protectable expression if
Aliotti: 831 F.2d 898 (9th Cir. 1987) the choices are not dictated by the underlying idea. See Alio i v. R.
Dakin & Co. (stuffed dinosaur toys cannot be substantially similar be-
cause of shared physiognomy, but a distinctive ”eye style and stitch-
ing” could qualify as protectable expression if they are ”not dictated
by the idea of stuffed dinosaur dolls”).
In architecture, there is no copyright protection for the idea of
Sturdza: 281 F.3d 1287 (D.C. Cir. 2002) using domes, wind-towers, parapets and arches.” Sturdza v. United
Arab Emirates. ”To hold otherwise would render basic architectural
elements unavailable to architects generally, thus running afoul of
the very purpose of the idea/expression distinction: promoting incen-
tives for authors to produce original work while protecting society’s
interest in the free flow of ideas.” On the other hand, the combina-
tion of common architectural elements and use of specific designs
may constitute original expression that is protected. An architectural
design may infringe if its use of public-domain elements gives off
a similar unique effect in decoration and design as the copyrighted
work.
Thus, a sweater designer can have copyright protection over an
original way of using squirrels as a design element in conjunction
with fall colors, stripes, and panels, even though those elements indi-
Lollytogs: 71 F.3d 996, 1004 (2d vidually constitute ideas in the public domain. See Knitwaves, Inc. v.
Cir.1995) Lollytogs Ltd.. A plaintiff’s ”selective and particularized” alterations
of a public-domain carpet pa ern also can constitute protectable ex-
Tufenkian: 338 F.3d 127 (2nd Cir. 2003) pression. Tufenkian Imp./Exp. Ventures, Inc. v. Einstein Moomjy, Inc..
2. Comparing the Penmen and Jake Images
The district court was correct that Mr. Blehm has no copyright over
the idea of a cartoon figure holding a birthday cake, catching a Fris-
A. SUBJECT MATTER 251
bee, skateboarding, or engaging in various other everyday activities.
Nor can the Jake images infringe on the Penmen because the figures
share the idea of using common anatomical features such as arms,
legs, faces, and fingers, which are not protectable elements. See Baby Baby Buddies: 611 F.3d 1308 (11th Cir.
Buddies, Inc. v. Toys ”R” Us, Inc.. (no copyright protection over com- 2010)
mon anatomical features of teddy bear). Mr. Blehm’s copyright also
does not protect Penmen poses that are a ributable to an associated
activity, such as reclining while taking a bath or lounging in an inner
tube. These everyday activities, common anatomical features, and
natural poses are ideas that belong to the public domain; Mr. Blehm
does not own these elements.
Although we do not consider these unprotected elements in our
substantial similarity analysis, we acknowledge that Mr. Blehm’s
works do contain some protectable expression. The Penmen at first
glance might be considered simple stick figures, but they are more
nuanced than a child’s rudimentary doodling. For example, the pro-
totypical Penman has a rounded, half-moon smile that takes up a sub-
stantial portion of the face. Mr. Blehm has chosen to omit any other
facial features on the Penmen. Each figure is filled in black, except for
the white half-moon smile, and each Penman’s head is detached, hov-
ering above the body. Many of the Penmen stand facing the viewer,
flashing the half-moon smile.
Mr. Blehm also drew the Penmen according to his own rules and
guidelines. The figure’s head might be perceived as slightly dispro-
portional to the body. Its arms and legs are thin, long, and dispropor-
tionate to the torso, which is relatively short. Mr. Blehm also chose to
give the Penmen four fingers – each about as thick as their arms and
legs – on each hand, as well as feet that are disproportionately long
and thick compared with the rest of the body.
Having identified protectable expression in Mr. Blehm’s draw-
ings, we must determine whether that expression is substantially sim-
ilar to the allegedly infringing Life is Good images. Life is Good is not
entitled to summary judgment unless its Jake figures are so dissimilar
from the protectable elements of the Penmen that no reasonable jury
could find for Mr. Blehm on the question of substantial similarity.
To show substantial similarity, Mr. Blehm provided the district
court with an exhibit juxtaposing 67 individual Penmen with a corre-
sponding, allegedly infringing Jake image. We have reviewed these
images and agree with the district court’s grant of summary judg-
ment in favor of Life is Good. We now address two of Mr. Blehm’s
proposed comparisons, which he highlights in his appellate brief,
and explain why the Life is Good images are so dissimilar from the
protectable elements of Mr. Blehm’s images that no reasonable jury
could find in his favor.
252 CHAPTER 4. COPYRIGHT
a. The Peace Sign Images
The first example in Mr. Blehm’s exhibit juxtaposes a Penman and
Jake image standing and displaying the peace sign. Because we must
separate unprotected ideas from expression, our analysis does not
consider that both drawings share the idea of a cartoon figure making
a common hand gesture. But we do consider whether the Jake image
is substantially similar to Mr. Blehm’s expression of this idea.
Mr. Blehm urges us to find certain similarities between the im-
ages. He notes that both have round heads. But Mr. Blehm has no
Peace sign images
copyright protection in general human features. Further, the figures’
heads are not similarly round. Jake’s head is more oval and some-
what misshapen, whereas the Penman’s head is circular and uniform.
Mr. Blehm suggests that the figures have similar proportions,
such as the size of the figures’ heads, arms, legs, and feet compared
with their bodies. A close review of the figures, however, yields the
opposite conclusion. Jake’s head is very large compared with the
body, while the Penman’s head is relatively proportional. The Pen-
man’s arms and legs are long and disproportionate to its truncated
torso. Jake, on the other hand, has more proportional limbs com-
pared with his torso. The figures’ feet are distinctly different: the
Penman’s are thick, long, and roll-shaped, but Jake’s are shorter and
triangular.
Nevertheless, there are some similarities between the Penman and
Jake. Both have black-line bodies, four fingers, and large half-moon
smiles, and their feet are pointed outward. But even these similarities
have important differences, or are not protectable expression. For
example, Jake’s fingers appear stubbier. The choice to display the
figures’ feet outward also naturally flows from the common idea of
drawing a two-dimensional stick figure and is thus unprotected.
The figures’ smiles thus seem to be the crux of this litigation. The
Penman and Jake both face the viewer with disproportionately large
half-moon smiles. A smile can be drawn in various ways. Here, they
share a crescent shape, but the idea of a crescent-shaped smile is un-
protected. Rather, the expression of the smiles must be substantially
similar and important to the overall work.
The Penman’s smile is all white, as is Jake’s. The smiles on both
figures take up a large portion of the head. But the Penman’s smile
is rounded on the tips, whereas the tips of Jake’s smile are sharper
angled. Jake’s smile, by virtue of the size of his head, is much larger
compared with his body than is the Penman’s. And although both
smiles are white, the Penman’s is set on an all-black head, making it
appear different from Jake’s, which is the outline of a smile on a white
head with black sunglasses.
Indeed, Mr. Blehm’s decision to omit eyes and other facial fea-
A. SUBJECT MATTER 253
tures on the Penman makes the figure susceptible to an interpretation
that the Penman is not smiling at all. One interpretation is that the
white space on the head is not a smile, but is the Penman’s face with
no features. The black above the half-moon shape can be perceived
as hair swooping down over the Penman’s forehead. Thus, the Pen-
man’s lack of facial features make it susceptible to different interpre-
tations. The Jake figure is not susceptible to similar confusion.
Any similarity between smiles also is insubstantial in light of other
differences between the figures. Jake’s head is a ached to the body,
and his head is white and has black sunglasses. The Penman’s head is
detached and is black with no eyes. Jake sports a beret, and his whole
figure is displayed on a color background, whereas the Penman has
no headwear and is portrayed against a plain white background.
The Jake image’s arms are positioned differently from the Pen-
man, with Jake’s left arm curved, rather than sharp and angular. Mr.
Blehm also chose a unique feature for the Penman’s peace-sign ex-
pression – white space in the figure’s hand – that the Jake image does
not share.
We conclude that no reasonable juror could determine that the
Jake figure is substantially similar to the protected, expressive choices
Mr. Blehm used for the Penman figure.
b. The Frisbee Images
In another example, a Penman and Jake a empt to catch Frisbees be-
tween their legs. The two figures’ poses are similar – suspended in
the air with legs outstretched and a hand descending to catch the disc
– but we do not consider the pose in our analysis. Such a pose is com-
mon to this activity and is not protected expression. Again, the fig- Frisbee images
ures have large, half-moon smiles. And unlike the ”peace sign” Jake,
this Jake image has legs that are disproportionate to a truncated torso.
The Penman’s legs also are long with respect to the torso, but not as
disproportionate as Jake’s.
Jake’s legs are curved, but the Penman’s are straightened. The
Jake image’s head differs in the same important ways as in the ”peace
sign” images. Jake’s arms appear to extend from his head, but the
Penman’s arms a ach to the top of the torso. Jake’s torso is much
thinner (and disproportionately shorter) than the Penman’s; Jake has
three fingers on each hand (not four); and the Jake image, unlike the
Penman image, incorporates color on the canvas and disc. Jake’s feet
are defined – toes and arches are visible – but the Penman’s are not.
Although the images share a similar idea of catching a Frisbee be-
tween the legs, the protectable expression in the Penman is not sub-
stantially similar to the Jake image.
c. Other Images
Selected other images
254 CHAPTER 4. COPYRIGHT
Mr. Blehm highlights 65 other Penmen as having been copied. At-
tached to this opinion is the ”Penmen-Jake Chart” Mr. Blehm submit-
ted to the district court in an effort to demonstrate substantial simi-
larity.
We have reviewed these images, and an analysis similar to the
discussion above applies.
Copying alone is not infringement. The infringement determina-
tion depends on what is copied. Assuming Life is Good copied Pen-
men images when it produced Jake images, our substantial similarity
analysis shows it copied ideas rather than expression, which would
784 F.2d 44 (2d Cir. 1986) make Life is Good a copier but not an infringer under copyright law.
Based on Reece v. Island Treasures Art
Gallery, Inc., 468 F. Supp. 2d 1197 (D. Walker v. Time Life Films, Inc.
Haw. 2006)
In the district court, appellant proffered lists of specific alleged simi-
larities in an a empt to prove fragmented literal similarity between
the book and the film. None of these claims alters our conclusion that
the district court properly held that as a ma er of law no substantial
similarity exists between the protectible elements of the works. For
example, appellant notes that both the book and the film depict cock-
fights, drunks, stripped cars, prostitutes and rats; both feature as cen-
tral characters third- or fourth-generation Irish policemen who live in
Queens and frequently drink; both show disgruntled, demoralized
police officers and unsuccessful foot chases of fleeing criminals.
These similarities, however, relate to uncopyrightable material.
Elements such as drunks, prostitutes, vermin and derelict cars would
appear in any realistic work about the work of policemen in the South
Bronx. These similarities therefore are unprotectible as “scènes à
Kim Taylor Reece, Makanani faire,” that is, scenes that necessarily result from the choice of a se ing
or situation. Neither does copyright protection extend to copyright or
“stock” themes commonly linked to a particular genre. Foot chases
and the morale problems of policemen, not to mention the familiar
figure of the Irish cop, are venerable and often-recurring themes of
police fiction. As such, they are not copyrightable except to the ex-
tent they are given unique – and therefore protectible – expression in
an original creation.
Hula Problem
Consider this photograph and stained glass image of hula dancers.
The dancers’ pose (kneeling, with right arm extended, etc.) is tradi-
tional. So is their dress (including the lei, etc.). Does the stained glass
infringe on the photograph? Are there further facts it would be help-
ful to know?
Marylee Colucci, Nohe
Baker v. Selden
101 U.S. 99 (1880)
A. SUBJECT MATTER 255
Charles Selden, the testator of the complainant in this case, in the year
1859 took the requisite steps for obtaining the copyright of a book, en-
titled ”Selden’s Condensed Ledger, or Book-keeping Simplified,” the
object of which was to exhibit and explain a peculiar system of book-
keeping. In 1860 and 1861, he took the copyright of several other
books, containing additions to and improvements upon the said sys-
tem. The bill of complaint was filed against the defendant, Baker, for
an alleged infringement of these copyrights.
The book or series of books of which the complainant claims the
copyright consists of an introductory essay explaining the system
of book-keeping referred to, to which are annexed certain forms or
blanks, consisting of ruled lines, and headings, illustrating the sys-
tem and showing how it is to be used and carried out in practice.
This system effects the same results as book-keeping by double entry;
but, by a peculiar arrangement of columns and headings, presents
the entire operation, of a day, a week, or a month, on a single page,
or on two pages facing each other, in an account-book. The defen- Selden's Condensed Ledger
dant uses a similar plan so far as results are concerned; but makes
a different arrangement of the columns, and uses different headings.
If the complainant’s testator had the exclusive right to the use of the
system explained in his book, it would be difficult to contend that the
defendant does not infringe it, notwithstanding the difference in his
form of arrangement; but if it be assumed that the system is open to
public use, it seems to be equally difficult to contend that the books
made and sold by the defendant are a violation of the copyright of
the complainant’s book considered merely as a book explanatory of
the system. Where the truths of a science or the methods of an art are
the common property of the whole world, any author has the right
to express the one, or explain and use the other, in his own way. As
an author, Selden explained the system in a particular way. It may
be conceded that Baker makes and uses account-books arranged on
substantially the same system; but the proof fails to show that he has
violated the copyright of Selden’s book, regarding the la er merely
as an explanatory work; or that he has infringed Selden’s right in any
way, unless the la er became entitled to an exclusive right in the sys-
tem.
It is contended that he has secured such exclusive right, because
no one can use the system without using substantially the same ruled
lines and headings which he has appended to his books in illustration
of it. In other words, it is contended that the ruled lines and head-
ings, given to illustrate the system, are a part of the book, and, as
such, are secured by the copyright; and that no one can make or use
similar ruled lines and headings, or ruled lines and headings made
and arranged on substantially the same system, without violating the
copyright.
256 CHAPTER 4. COPYRIGHT
There is no doubt that a work on the subject of book-keeping,
though only explanatory of well-known systems, may be the subject
of a copyright; but, then, it is claimed only as a book. Such a book
may be explanatory either of old systems, or of an entirely new sys-
tem; and, considered as a book, as the work of an author, conveying
information on the subject of book-keeping, and containing detailed
explanations of the art, it may be a very valuable acquisition to the
practical knowledge of the community. But there is a clear distinc-
tion between the book, as such, and the art which it is intended to
illustrate. The mere statement of the proposition is so evident, that
it requires hardly any argument to support it. The same distinction
may be predicated of every other art as well as that of book-keeping.
A treatise on the composition and use of medicines, be they old or
new; on the construction and use of ploughs, or watches, or churns;
or on the mixture and application of colors for painting or dyeing;
or on the mode of drawing lines to produce the effect of perspective,
– would be the subject of copyright; but no one would contend that
the copyright of the treatise would give the exclusive right to the art
or manufacture described therein. The copyright of the book, if not
pirated from other works, would be valid without regard to the nov-
elty, or want of novelty, of its subject-ma er. The novelty of the art
or thing described or explained has nothing to do with the validity of
the copyright. To give to the author of the book an exclusive property
in the art described therein, when no examination of its novelty has
ever been officially made, would be a surprise and a fraud upon the
public. That is the province of le ers-patent, not of copyright. The
claim to an invention or discovery of an art or manufacture must be
subjected to the examination of the Patent Office before an exclusive
right therein can be obtained; and it can only be secured by a patent
from the government.
The copyright of a work on mathematical science cannot give to
the author an exclusive right to the methods of operation which he
propounds, or to the diagrams which he employs to explain them,
so as to prevent an engineer from using them whenever occasion re-
quires. The very object of publishing a book on science or the useful
arts is to communicate to the world the useful knowledge which it
contains. But this object would be frustrated if the knowledge could
not be used without incurring the guilt of piracy of the book. And
where the art it teaches cannot be used without employing the meth-
ods and diagrams used to illustrate the book, or such as are similar to
them, such methods and diagrams are to be considered as necessary
incidents to the art, and given therewith to the public; not given for
the purpose of publication in other works explanatory of the art, but
for the purpose of practical application.
Of course, these observations are not intended to apply to orna-
A. SUBJECT MATTER 257
mental designs, or pictorial illustrations addressed to the taste. Of
these it may be said, that their form is their essence, and their object,
the production of pleasure in their contemplation. This is their final
end. They are as much the product of genius and the result of com-
position, as are the lines of the poet or the historian’s periods. On
the other hand, the teachings of science and the rules and methods
of useful art have their final end in application and use; and this ap-
plication and use are what the public derive from the publication of
a book which teaches them. But as embodied and taught in a literary
composition or book, their essence consists only in their statement.
This alone is what is secured by the copyright. The use by another
of the same methods of statement, whether in words or illustrations,
in a book published for teaching the art, would undoubtedly be an
infringement of the copyright.
Recurring to the case before us, we observe that Charles Selden,
by his books, explained and described a peculiar system of book-
keeping, and illustrated his method by means of ruled lines and blank
columns, with proper headings on a page, or on successive pages.
Now, whilst no one has a right to print or publish his book, or any
material part thereof, as a book intended to convey instruction in the
art, any person may practise and use the art itself which he has de-
scribed and illustrated therein. The use of the art is a totally different
thing from a publication of the book explaining it. The copyright of a
book on book-keeping cannot secure the exclusive right to make, sell,
and use account-books prepared upon the plan set forth in such book.
Whether the art might or might not have been patented, is a question
which is not before us. It was not patented, and is open and free to
the use of the public. And, of course, in using the art, the ruled lines
and headings of accounts must necessarily be used as incident to it.
The conclusion to which we have come is, that blank account-
books are not the subject of copyright; and that the mere copyright
of Selden’s book did not confer upon him the exclusive right to make
and use account-books, ruled and arranged as designated by him and
described and illustrated in said book.
Bikram's Yoga College of India v. Evolation Yoga
803 F.3d 1032 (9th Cir. 2015)
We must decide whether a sequence of twenty-six yoga poses and
two breathing exercises developed by Bikram Choudhury and de-
scribed in his 1979 book, B ’ B Y C , is entitled
to copyright protection.
In 1971, Bikram Choudhury, the self-proclaimed ”Yogi to the
stars,” arrived in Beverly Hills, California. He soon became a central
figure in the growing popularity of yoga in the United States. Choud-
hury developed a sequence of twenty-six asanas and two breath-
ing exercises, arranged in a particular order, which he calls the ”Se-
258 CHAPTER 4. COPYRIGHT
quence.” Choudhury opened his own studio, where he began offer-
ing ”Bikram Yoga” classes. In a Bikram Yoga class, the Sequence is
practiced over the course of ninety minutes, to a series of instructions
(the ”Dialogue”), in a room heated to 105 degrees Fahrenheit to sim-
ulate Choudhury’s native Indian climate.
Evolation Yoga offers several types and styles of yoga, includ-
ing ”hot yoga,” which is similar to ”Bikram’s Basic Yoga System.”
Evolation acknowledges that hot yoga ”includes 26 postures and two
breathing exercises and is done for 90 minutes, accompanied by a se-
ries of oral instructions, in a room heated to approximately 105 de-
grees Fahrenheit.” [Choudhury sued.]
Though Choudhury emphasizes the aesthetic a ributes of the Se-
quence’s ”graceful flow,” at bo om, the Sequence is an idea, process,
or system designed to improve health. Copyright protects only the
expression of this idea – the words and pictures used to describe the
Sequence – and not the idea of the Sequence itself.
A. The Sequence Is an Unprotectable Idea.
Following Baker, and recognizing this vital distinction between ideas
and expression, courts have routinely held that the copyright for a
work describing how to perform a process does not extend to the pro-
Palmer: 287 F.3d 1325 (11th Cir. 2002) cess itself. In Palmer v. Braun, for example, the Eleventh Circuit held
that meditation exercises described in a copyrighted manual on ex-
ploring the consciousness were ”a process” unentitled to copyright
protection. The court explained that the ”exercises, while undoubt-
edly the product of much time and effort, are, at bo om, simply a
process for achieving increased consciousness. Such processes, even
if original, cannot be protected by copyright.”
As Choudhury describes it, the Sequence is a ”system” or a
”method” designed to ”systematically work every part of the body,
to give all internal organs, all the veins, all the ligaments, and all the
muscles everything they need to maintain optimum health and max-
imum function. An essential element of this ”system” is the order in
which the yoga poses and breathing exercises are arranged. B ’
B Y C instructs readers, ”Do the poses in the strict
order given in this book. Nothing about Bikram’s Beginning Yoga
Class is haphazard. It is designed to scientifically warm and stretch
muscles, ligaments, and tendons in the order in which they should
be stretched.” For instance, Choudhury explains, ”Camel Pose (Us-
trasana) stretches the abdomen and compresses the spine; so for the
next posture, I chose the Rabbit Pose (Sasangasana), which does the
converse: stretches the back and compresses the abdomen.”
Choudhury contends that the Sequence’s arrangement of pos-
tures is ”particularly beautiful and graceful.” But beauty is not a basis
for copyright protection. The performance of many ideas, systems,
A. SUBJECT MATTER 259
or processes may be beautiful: a surgeon’s intricate movements, a
book-keeper’s careful notations, or a baker’s kneading might each
possess a certain grace for at least some viewers. Indeed, from Ver-
meer’s milkmaid to Lewis Hine’s power house mechanic, the individ-
ual engrossed in a process has long a racted artistic a ention. But
the beauty of the process does not permit one who describes it to
gain, through copyright, the monopolistic power to exclude all others
from practicing it. This is true even where, as here, the process was
conceived with at least some aesthetic considerations in mind. Just
as some steps in a recipe may reflect no more than the author’s belief
that a particular ingredient is beautiful or that a particular cooking
technique is impressive to watch and empowering to practice, some
elements in Choudhury’s Sequence may reflect his aesthetic prefer-
ences. Yet just like the recipe, the Sequence remains unprotectable as
a process the design of which primarily reflects function, not expres-
sion. Johannes Vermeer, The Milkmaid
B. The Sequence Is Not a Copyrightable Compilation.
By claiming copyright protection for the Sequence as a compilation,
Choudhury misconstrues the scope of copyright protection for com-
pilations. As we have explained, the Sequence is an idea, process, or
system; therefore, it is not eligible for copyright protection. That the
Sequence may possess many constituent parts does not transform it
into a proper subject of copyright protection. Virtually any process
or system could be dissected in a similar fashion. Baker’s examples
of ”how-to” treatises are instructive: ”A treatise on the construction
and use of ploughs, or watches, or churns, or on the mode of drawing
lines to produce the effect of perspective” would likely list the steps
necessary to perform the process it describes. The watchmaking trea-
tise’s author could not claim a copyright in the process of making a
watch, however, by breaking down the process into multiple steps
and labeling it a ”compilation.” Likewise, Choudhury cannot obtain Lewis Hine, Power house mechanic
copyright protection for the Sequence as a compilation by separately working on steam pump
identifying the poses and breathing exercises it contains.
Moreover, according to Choudhury himself, the medical and func-
tional considerations at the heart of the Sequence compel the very se-
lection and arrangement of poses and breathing exercises for which
he claims copyright protection. According to Bikram’s Beginning
Yoga Class, the ”strict order” of the poses ”is designed to scientifi-
cally warm and stretch muscles, ligaments, and tendons in the order
in which they should be stretched.” Read in the light most favorable
to Choudhury, the record demonstrates that the overarching reason
for the organization of the poses and breathing exercises in the Se-
quence is to further the basic goals of the method: to a ain ”[p]roper
weight, muscle tone, glowing complexion, boundless energy, vibrant
260 CHAPTER 4. COPYRIGHT
good health, and a sense of well-being.” The Sequence’s composition
renders it more effective as a process or system, but not any more
suitable for copyright protection as an original work of authorship.
It makes no difference that similar results could be achieved
through a different organization of yoga poses and breathing exer-
cises. Choudhury argues that he could have chosen from ”hundreds
of postures” and ”countless arrangements of these postures” in de-
veloping the Sequence. But the possibility of a aining a particular
end through multiple different methods does not render the uncopy-
Whatever It Takes: 402 F.3d 700, 711-12 rightable a proper subject of copyright. See ATC Distribution Group,
(6th Cir. 2005) Inc. v. Whatever It Takes Transmissions & Parts, Inc. (”To be sure, the
publisher of a catalog describing a transmission parts numbering sys-
tem could have arranged the parts information in other ways that
were potentially less clear or useful, but this fact alone is insufficient
to demonstrate the creativity necessary for copyright protection.”).
Though it may be one of many possible yoga sequences capable of
a aining similar results, the Sequence is nevertheless a process and
is therefore ineligible for copyright protection.
C. The Sequence Is Not a Copyrightable Choreographic Work.
The Sequence is not copyrightable as a choreographic work for the
same reason that it is not copyrightable as a compilation: it is an idea,
process, or system to which copyright protection may ”in no case”
extend. We recognize that the Sequence may involve ”static and ki-
netic successions of bodily movement in certain rhythmic and spa-
Compendium II, S 450.01 tial relationships.”. So too would a method to churn bu er or drill
for oil. That is no accident: ”successions of bodily movement” of-
ten serve basic functional purposes. Such movements do not become
copyrightable as ”choreographic works” when they are part and par-
cel of a process. Even if the Sequence could fit within some colloquial
definitions of dance or choreography, it remains a process ineligible
for copyright protection.
Our day-to-day lives consist of many routinized physical move-
ments, from brushing one’s teeth to pushing a lawnmower to shaking
a Polaroid picture, that could be (and, in two of the preceding exam-
"Shake it, shake it like a Polaroid ples, have been) characterized as forms of dance. Without a proper
picture." understanding of the idea/expression dichotomy, one might obtain
—OutKast, Hey Ya (LaFace Records
monopoly rights over these functional physical sequences by describ-
2003)
ing them in a tangible medium of expression and labeling them chore-
ographic works.
IV. C
Although there is no cause to dispute the many health, fitness, spir-
itual, and aesthetic benefits of yoga, and Bikram Yoga in particular,
they do not bring the Sequence into the realm of copyright protection.
B. OWNERSHIP 261
Concrete Machinery Co. v. Classic Lawn Ornaments
843 F.2d 600 (1st Cir. 1988)
Some ideas admit of only a limited number of expressions. When
there is essentially only one way to express an idea, the idea and its
expression are inseparable and copyright is no bar to copying that
expression. See, e.g., Herbert Rosenthal Jewelry Corp. v. Kalpakian Herbert Rosenthal: 446 F.2d 738 (9th
(idea and expression of copyrighted “jeweled bee pin” inseparable Cir.1971)
and thus copying not prohibited); Morrissey v. Proctor & Gamble Morrissey: 379 F.2d 675 (1st Cir. 1967)
Co. (since few ways to express rules for “sweepstakes,” no infringe-
ment although defendant’s rules only slightly different from plain-
tiff’s rules).7 When the idea and its expression are not completely
inseparable, there may still be only a limited number of ways of ex- Based on Lapine v. Seinfeld, No. 08-
pressing the idea. In such a case, the burden of proof is heavy on the cv-128, 2009 WL 2902584 (S.D.N.Y Sept.
plaintiff who may have to show “near identity” between the works 10, 2009)
at issue. This showing is necessary because, as idea and expression
merge, fewer and fewer aspects of a work embody a unique and cre-
ative expression of the idea; a copyright holder must then prove sub-
stantial similarity to those few aspects of the work that are expression
not required by the idea. …
Cooking for Kids Problem
Missy Lapine is the author of T S C : S S -
H H F K ’F M (published
2007), which “presents over 75 recipes that ingeniously disguise the
most important superfoods inside kids’ favorite meals.” Jessica Sein-
feld is the author of D D : S S G
Y K E G F (published 2008), which “is filled with
traditional recipes that kids love, except they’re stealthily packed
The Sneaky Chef
with veggies hidden in them so kids don’t even know!” Infringe-
ment? Are there further facts it would be helpful to know?
B Ownership
Sheldon v. Metro-Goldwyn Pictures Corp.
Borrowed the work must indeed not be, for a plagiarist is not himself
pro tanto an “author”; but if by some magic a man who had never
known it were to compose anew Keats’s Ode on a Grecian Urn, he
7
The rationale for this rule, as Judge Aldrich stated, is that “to permit copy-
righting [in that case] would mean that a party or parties, by copyrighting a mere
handful of forms [of expression], could exhaust all possibilities of future use of the Deceptively Delicious
substance ... [and thus] the subject ma er would be appropriated by permi ing the
copyrighting of its expression. We cannot recognize copyright as a game of chess
81 F.2d 49 (2d Cir. 1936)
in which the public can be checkmated.”
(Hand, J.)
262 CHAPTER 4. COPYRIGHT
would be an “author,” and, if he copyrighted it, others might not copy
Compare: "Pierre Menard did not want that poem, though they might of course copy Keats’s.
to compose another Quixote, which
surely is easy enough -- he wanted to
compose the Quixote. Nor, surely, need
one have to say that his goal was never
a mechanical transcription of the orig-
Because of this rule permi ing multiple independent creation, copy-
inal; he had no intention of copying it. right (like trade secret) does not need complicated priority doctrines,
His admirable ambition was to produce as patent and trademark do. The price paid for simplicity here,
a number of pages which coincided -- though, is that copyright (like trade secret) must include proof of
word for word and line for line -- with
copying from the plaintiff as part of its infringement analysis.
those of Miguel de Cervantes." Jorge
Luis Borges, Pierre Menard, Author of the Two kinds of issues about initial copyright ownership do arise
Quixote (1941) (Andrew Hurley trans.). with some regularity. First, there is the problem of whether certain
kinds of allegedly ”creative” processes should be regarded as result-
ing in copyrightable authorship at all. Second, there is the prob-
lem of dividing up ownership among multiple parties who do con-
tribute authorship. Copyright slices this problem up along two di-
mensions: contemporaneous collaborations are addressed as joint
works or works made for hire, whereas sequential creation is ana-
lyzed in terms of derivative works.
1 Authorship
111 U.S. 53 (1884)
Burrow-Giles Lithographic Co. v. Sarony
The suit was commenced by an action at law in which Sarony was
plaintiff and the lithographic company was defendant, the plaintiff
charging the defendant with violating his copyright in regard to a
photograph, the title of which is “Oscar Wilde No. 18.” A jury being
waived, the court made a finding of facts on which a judgment in
favor of the plaintiff was rendered for the sum of $600 for the plates
and 85,000 copies sold and exposed to sale, and $10 for copies found
in his possession.
The constitutional question is not free from difficulty.
The eighth section of the first article of the Constitution is the great
repository of the powers of Congress, and by the eighth clause of that
section Congress is authorized:
To promote the progress of science and useful arts, by se-
curing, for limited times to authors and inventors, the ex-
clusive right to their respective writings and discoveries.
It is insisted in argument, that a photograph being a reproduction on
Oscar Wilde No. 18 paper of the exact features of some natural object or of some person,
Napoleon Sarony, 1821–96, was a
is not a writing of which the producer is the author.
celebrity photographer: i.e., both a [The Court reviewed early copyright statutes conferring copy-
photographer of celebrities and a right protection on maps, charts, designs, engravings, etchings, cuts,
celebrity in his own right. and other prints.]
B. OWNERSHIP 263
These statutes certainly answer the objection that books only, or
writing in the limited sense of a book and its author, are within the
constitutional provision. Both these words are susceptible of a more
enlarged definition than this. An author in that sense is “he to whom
anything owes its origin; originator; maker; one who completes a
work of science or literature.” W . So, also, no one would Joseph Emerson Worcester, 1784–
now claim that the word writing in this clause of the Constitution, 1865, was the number-two lexi-
cographer of his day, after Noah
though the only word used as to subjects in regard to which authors Webster.
are to be secured, is limited to the actual script of the author, and ex-
cludes books and all other printed ma er. By writings in that clause
is meant the literary productions of those authors, and Congress very
properly has declared these to include all forms of writing, printing,
engraving, etching, &c., by which the ideas in the mind of the author
are given visible expression. The only reason why photographs were
not included in the extended list in the act of 1802 is probably that
they did not exist, as photography as an art was then unknown, and
the scientific principle on which it rests, and the chemicals and ma-
chinery by which it is operated, have all been discovered long since
that statute was enacted.
But it is said that an engraving, a painting, a print, does embody
the intellectual conception of its author, in which there is novelty, in-
vention, originality, and therefore comes within the purpose of the
Constitution in securing its exclusive use or sale to its author, while
the photograph is the mere mechanical reproduction of the physical
features or outlines of some object animate or inanimate, and involves
no originality of thought or any novelty in the intellectual operation
connected with its visible reproduction in shape of a picture.
The third finding of facts says, in regard to the photograph in Does this passage adequately explain
question, that it is a “useful, new, harmonious, characteristic, and why Napoleon Sarony rather than Os-
car Wile owned the copyright? What
graceful picture, and that plaintiff made the same ... entirely from
about Sarony's camera operator, Ben-
his own original mental conception, to which he gave visible form by jamin Richardson?
posing the said Oscar Wilde in front of the camera, selecting and ar-
ranging the costume, draperies, and other various accessories in said
photograph, arranging the subject so as to present graceful outlines,
arranging and disposing the light and shade, suggesting and evoking
the desired expression, and from such disposition, arrangement, or
representation, made entirely by plaintiff, he produced the picture in
suit.”
These findings, we think, show this photograph to be an original
work of art, the product of plaintiff’s intellectual invention, of which
plaintiff is the author, and of a class of inventions for which the Con-
stitution intended that Congress should secure to him the exclusive
right to use, publish and sell, as it has done by section 4952 of the
Revised Statutes.
264 CHAPTER 4. COPYRIGHT
Monkey Selfie Problem
Based on Naruto v. Slater, No. 15-cv-
Nature photographer David Slater was traveling in Indonesia when
04324, 2016 WL 362231 (N.D. Cal. Jan.
28, 2016) a monkey picked up his camera and pushed the shu er bu on, re-
sulting in this photograph. Is it copyrightable? If so, who owns the
copyright?
Does it ma er whether Slater had chosen his camera’s se ings
(e.g., shu er speed, aperture, autofocus) for taking close-up daytime
outdoor wildlife photographs? If he was specifically trying to get
monkeys to pick up the camera and take selfies? If he took the pho-
tograph himself and then falsely passed it off as a monkey selfie?
Copyright Act
Copyright protection under this title is not available for any work of
the United States Government, but the United States Government is
not precluded from receiving and holding copyrights transferred to
it by assignment, bequest, or otherwise.
Monkey selfie
2 Collaborations
17 U.S.C. § 105 Copyright Act
Subject matter of copyright: United
States Government works
Compare: "There has always been a (a) Initial Ownership. – Copyright in a work protected under this
judicial consensus that no copyright title vests initially in the author or authors of the work. The
could be secured in the products of the authors of a joint work are coowners of copyright in the work.
labor done by judicial officers in the
discharge of their judicial duties. The
(b) Works made for hire. – In the case of a work made for hire, the
whole work done by the judges consti- employer or other person for whom the work was prepared is
tutes the authentic exposition and in- considered the author for purposes of this title, and, unless the
terpretation of the law, which, binding parties have expressly agreed otherwise in a wri en instrument
every citizen, is free for publication to
signed by them, owns all of the rights comprised in the copy-
all." Banks v. Manchester, 128 U.S. 244
(1888). right.
A “joint work” is a work prepared by two or more authors with the
17 U.S.C. § 201 intention that their contributions be merged into inseparable or inter-
Ownership of copyright
dependent parts of a unitary whole.
A “work made for hire” is
17 U.S.C. § 101 (1) a work prepared by an employee within the scope of his or her
Definitions employment; or
(2) a work specially ordered or commissioned for use as a contribu-
tion to a collective work, as a part of a motion picture or other
audiovisual work, as a translation, as a supplementary work,
as a compilation, as an instructional text, as a test, as answer
material for a test, or as an atlas, if the parties expressly agree
B. OWNERSHIP 265
in a wri en instrument signed by them that the work shall be
considered a work made for hire.
Ownership of a copyright, or of any of the exclusive rights under a 17 U.S.C. § 202
copyright, is distinct from ownership of any material object in which Ownership of copyright as distinct from
the work is embodied. Transfer of ownership of any material object, ownership of material object
including the copy or phonorecord in which the work is first fixed,
does not of itself convey any rights in the copyrighted work embod-
ied in the object; nor, in the absence of an agreement, does transfer of
ownership of a copyright or of any exclusive rights under a copyright
convey property rights in any material object.
Thomson v. Larson 147 F.3d 195 (2d Cir. 1998)
Plaintiff-appellant Lynn Thomson claims that, along with principal
playwright Jonathan Larson, she co-authored a “new version” of the
critically acclaimed Broadway musical Rent.
B
Rent, the Puli er Prize and Tony Award-winning Broadway modern
musical based on Puccini’s opera La Bohème, began in 1989 as the joint
project of Billy Aronson and composer Jonathan Larson. Aronson
and Larson collaborated on the work until their amicable separation
in 1991. At that time, Larson obtained Aronson’s permission to de-
velop the play on his own.
In the summer of 1992, Larson’s Rent script was favorably re-
ceived by James Nicola, Artistic Director of the New York Theatre
Workshop (“NYTW”), a non-profit theater company in the East Vil-
lage. Larson continued to develop and revise the “workshop version”
of his Rent script. In the spring of 1993, Nicola urged Larson to allow
the NYTW to hire a playwright or a bookwriter to help revamp the
storyline and narrative structure of the play.
In May 1995, in preparation for Rent’s off-Broadway opening
scheduled for early 1996, Larson agreed to the NYTW’s hiring of
Lynn Thomson, a professor of advanced playwrighting at New York
University, as a dramaturg5 to assist him in clarifying the storyline of
the musical. Thomson signed a contract with the NYTW, in which she
agreed to provide her services with the workshop production from
May 1, 1995, through the press opening, scheduled for early Febru-
ary of 1996. The agreement stated that Thomson’s “responsibilities
shall include, but not be limited to: Providing dramaturgical assis-
5
Dramaturgs provide a range of services to playwrights and directors in connec-
tion with the production and development of theater pieces. According to Thom-
son’s testimony, the role of the dramaturg “can include any number of the elements
that go into the crafting of a play,” such as “actual plot elements, dramatic structure,
character details, themes, and even specific language.”
266 CHAPTER 4. COPYRIGHT
tance and research to the playwright and director.” In exchange, the
NYTW agreed to pay “a fee” of $2000, “[i]n full consideration of the
services to be rendered” and to provide for billing credit for Thom-
son as “Dramaturg.” The Thomson/NYTW agreement was silent as
to any copyright interests or any issue of ownership with respect to
the final work.
In the summer and fall of 1995, Thomson and Larson worked ex-
tremely intensively together on the show. For the most part, the two
worked on the script alone in Larson’s apartment. Thomson testified
that revisions to the text of Rent didn’t begin until early August 1995.
Larson himself entered all changes directly onto his computer, where
he kept the script, and Thomson made no contemporaneous notes of
her specific contributions of language or other structural or thematic
suggestions. Thomson alludes to the “October Version” of Rent as
the culmination of her collaborative efforts with Larson. That new
version was characterized by experts as “a radical transformation of
the show.”
A “sing-through” of the “October Version” of Rent took place in
early November 1995. And on November 3, 1995, Larson signed a
contract with the NYTW for ongoing revisions to Rent. This agree-
ment identified Larson as the “Author” of Rent and made no refer-
ence to Thomson. The contract incorporated by reference an earlier
draft author’s agreement that set forth the terms that would apply if
the NYTW opted to produce Rent. The earlier draft author’s agree-
ment gave Larson approval rights over all changes in text, provided
that any changes in text would become his property, and assured him
billing as “sole author.”
The final dress rehearsal was held on January 24, 1996. Just hours
after it ended, Larson died suddenly of an aortic aneurysm. Over
the next few weeks, Nicola, Greif, Thomson, and musical director
Tim Weil worked together to fine-tune the script. The play opened
off-Broadway on February 13, 1996, to rave reviews. On February
23, Rent’s move to Broadway was announced. Since its opening on
Broadway on April 29, 1996, the show has been “an astounding criti-
cal, artistic, and commercial success.”
Before the Broadway opening, Thomson, in view of her contri-
butions to Rent, sought compensation and title page dramaturgical
credit from the Broadway producers. And on April 2, 1996, she
signed a contract in which the producers agreed to pay her $10,000
plus a nominal $50/ week for her dramaturgical services. Around
the same time, upon the producers’ advice, Thomson approached Al-
lan S. Larson, Nane e Larson, and Julie Larson McCollum (“Larson
Heirs”), the surviving members of Jonathan Larson’s family, to re-
quest a percentage of the royalties derived from the play. In a le er
to the Larson family, dated April 8, 1996, Thomson stated that she
B. OWNERSHIP 267
believed Larson, had he lived, would have offered her a “small per-
centage of his royalties to acknowledge the contribution I made.” In
reply, the Larson Heirs offered Thomson a gift of 1% of the author’s
royalties. Negotiations between Thomson and the Larson Heirs, how-
ever, broke down.
After the parties failed to reach a se lement, Thomson brought
suit against the Larson Heirs, claiming that she was a co-author of
Rent and that she had never assigned, licensed, or otherwise trans-
ferred her rights. Thomson sought declaratory relief and a retroac-
tive and on-going accounting under the Copyright Act. Specifically,
she asked that the court declare her a “co-author” of Rent and grant
her 16% of the author’s share of the royalties.11
T ’ C -A C
The Copyright Act defines a “joint work” as “a work prepared by
two or more authors with the intention that their contributions be
merged into inseparable or interdependent parts of a unitary whole.”
17 U.S.C. § 101 (1994). The touchstone of the statutory definition is the
intention at the time the writing is done that the parts be absorbed or
combined into an integrated unit.
Joint authorship entitles the co-authors to equal undivided inter-
ests in the whole work – in other words, each joint author has the
right to use or to license the work as he or she wishes, subject only to
the obligation to account to the other joint owner for any profits that
are made.
In Childress v. Taylor, our court interpreted this section of the Act Childress: 945 F.2d 500 (1991)
and set forth “standards for determining when a contributor to a
copyrighted work is entitled to be regarded as a joint author” where
the parties have failed to sign any wri en agreement dealing with
coauthorship. While the Copyright Act states only that co-authors
must intend that their contributions “be merged into ... a unitary
whole,” Judge Newman explained why a more stringent inquiry than
the statutory language would seem to suggest is required:
An inquiry so limited would extend joint author status
to many persons who are not likely to have been within
the contemplation of Congress. For example, a writer fre-
11
Thomson claims that she seeks 16% of the proceeds “because of her respect for
Larson’s role as the principal creator of the work.” Thomson derives the 16% figure
in the following way: she alleges that 48% of the Rent script is new in relation to the
1994 Workshop version (prior to her involvement); as co-author, she is, therefore,
entitled to 50% of this part (or 24% of the total revenues); but since there are three
components to Rent (book, lyrics, and music) and she did not contribute to one
(music), she is entitled to 2/3, or 16% of the total revenues. Thomson also sought
the right to quote freely from various versions of Rent in a book that she planned
to write.
268 CHAPTER 4. COPYRIGHT
quently works with an editor who makes numerous use-
ful revisions to the first draft, some of which will consist of
additions of copyrightable expression. Both intend their
contributions to be merged into inseparable parts of a uni-
tary whole, yet very few editors and even fewer writers
would expect the editor to be accorded the status of joint
author, enjoying an undivided half interest in the copy-
right in the published work.
The potential danger of allowing anyone who makes even a min-
imal contribution to the writing of a work to be deemed a statutory
co-author – as long as the two parties intended the contributions to
merge — motivated the court to set forth a two-pronged test. A co-
authorship claimant bears the burden of establishing that each of the
putative co-authors (1) made independently copyrightable contribu-
tions to the work; and (2) fully intended to be co-authors.
1. Independently Copyrightable Contributions
Childress held that collaboration alone is not sufficient to establish
joint authorship. Rather, the contribution of each joint author must
be independently copyrightable.
Without making specific findings as to any of Thomson’s claims
regarding lyrics or other contributions, the district court concluded
that Thomson “made at least some non-de minimis copyrightable
contribution,” and that Thomson’s contributions to the Rent libre o
were “certainly not zero.” Once having said that, the court de-
cided the case on the second Childress prong – mutual intent of co-
authorship. It hence did not reach the issue of the individual copy-
rightability of Thomson’s varied alleged contributions (plot develop-
ments, thematic elements, character details, and structural compo-
nents).
2. Intent of the Parties
Childress mandates that the parties “entertain in their minds the con-
cept of joint authorship.” This requirement of mutual intent recog-
nizes that, since coauthors are afforded equal rights in the coauthored
work, the “equal sharing of rights should be reserved for relation-
ships in which all participants fully intend to be joint authors.”
Childress and its progeny, however, do not explicitly define the
nature of the necessary intent to be co-authors. The court stated that
“[i]n many instances, a useful test will be whether, in the absence of
contractual arrangements concerning listed authorship, each partic-
ipant intended that all would be identified as co-authors.” But it is
also clear that the intention standard is not strictly subjective.
i. Decisionmaking Authority
B. OWNERSHIP 269
An important indicator of authorship is a contributor’s decisionmak-
ing authority over what changes are made and what is included in a
work. See, e.g., Erickson v. Trinity Theatre, Inc. (an actor’s suggestion of Erickson: 13 F.3d 1061 (7th Cir. 1994)
text does not support a claim of co-authorship where the sole author
determined whether and where such contributions were included in
the work); Maruel v. Smith (claimant had a contractual right to control Maurel: 271 F. 211 (2d Cir. 1921)
the contents of the opera).
The district court determined that Larson “retained and intended
to retain at all times sole decision-making authority as to what went
into Rent.” In support of its conclusion, the court relied upon Thom-
son’s statement that she was “fla ered that [Larson] was asking [her]
to contribute actual language to the text” and found that this state-
ment demonstrated that even Thomson understood “that the ques-
tion whether any contribution she might make would go into the
script was within Mr. Larson’s sole and complete discretion.” More-
over, as the court recognized, the November agreement between Lar-
son and the NYTW expressly stated that Larson had final approval
over all changes to Rent and that all such changes would become Lar-
son’s property.
ii. Billing
In discerning how parties viewed themselves in relation to a work,
Childress also deemed the way in which the parties bill or credit them-
selves to be significant. As the district court noted, “billing or credit
is ... a window on the mind of the party who is responsible for
giving the billing or the credit.” And a writer’s a ribution of the
work to herself alone is “persuasive proof ... that she intended this
particular piece to represent her own individual authorship” and is
“prima facie proof that [the] work was not intended to be joint.” Weiss- Weissmann: 868 F.2d 1313 (2d Cir.
mann v. Freeman Thomson claims that Larson’s decision to credit her 1989)
as “dramaturg” on the final page of Rent scripts reflected some co-
authorship intent. Thomson concedes that she never sought equal
billing with Larson, but argues that she did not need to do so in or-
der to be deemed a statutory co-author.
The district court found, instead, that the billing was unequivocal:
Every script brought to [the court’s] a ention says “Rent, by Jonathan
Larson.” In addition, Larson “described himself in the biography he
submi ed for the playbill in January 1996, nine days before he died,
as the author/composer, and listed Ms. Thomson on the same doc-
ument as dramaturg.” And while, as Ms. Thomson argues, it may
indeed have been highly unusual for an author/composer to credit
his dramaturg with a byline, we fail to see how Larson’s decision to
style her as “dramaturg” on the final page in Rent scripts reflects a
co-authorship intent on the part of Larson. The district court prop-
erly concluded that “the manner in which [Larson] listed credits on
270 CHAPTER 4. COPYRIGHT
the scripts strongly supports the view that he regarded himself as the
sole author.”
iii. Wri en Agreements with Third Parties
Just as the parties’ wri en agreements with each other can consti-
tute evidence of whether the parties considered themselves to be co-
authors, so the parties’ agreements with outsiders also can provide
insight into co-authorship intent, albeit to a somewhat more a enu-
ated degree.
The district court found that Larson “listed himself or treated him-
self as the author in the November 1995 revisions contract that he
entered into with the NYTW, which in turn incorporated the earlier
draft author’s agreement that had not been signed.” That agreement
identifies Larson as Rent’s “Author” and does not mention Thomson.
It also incorporates the terms of a September 1995 draft agreement
(termed “Author’s Agreement”) that states that Larson “shall receive
billing as sole author.” The district court commented, moreover, that
“[t]he fact that [Larson] felt free to enter into the November 1995 con-
tract on his own, without the consent of and without any reference to
Ms. Thomson quite apart from whatever the terms of the agreements
are, indicates that his intention was to be the sole author.”
C
Based on all of the evidence, the district court concluded that “Mr.
Larson never regarded himself as a joint author with Ms. Thomson.”
We believe that the district court correctly applied the Childress stan-
dards to the evidence before it and hold that its finding that Larson
never intended co-authorship was not clearly erroneous.
794 F.3d 133 (1st Cir. 2015)
Greene v. Ablon
Authors who create a joint work co-own the copyright in that work.
Joint authors share equal undivided interests in the whole work – in
other words, each joint author has the right to use or to license the
work as he or she wishes, subject only to the obligation to account to
the other joint author for any profits that are made. Even if it is clear
that one co-author has contributed more to the work than another
co-author, they are nevertheless equal owners of the copyright in the
absence of an agreement to the contrary.
A co-owner must account to other co-owners for any profits he
earns from licensing or use of the copyright. The duty to account
comes from equitable doctrines relating to unjust enrichment and
general principles of law governing the rights of co-owners. We ac-
knowledge the theoretical appeal of the notion that if one owner per-
mits free use of the copyright, that owner incurs a debt to his co-
owner because the use, paid-for or not, partially depletes the value of
B. OWNERSHIP 271
the copyright. However, the duty to account is for profits, not value.
Community for Creative Non-Violence v. Reid
490 U.S. 730 (1989)
I
In the fall of 1985, CCNV decided to participate in the annual Christ-
mastime Pageant of Peace in Washington, D. C., by sponsoring a dis-
play to dramatize the plight of the homeless. As the District Court
recounted:
”Snyder and fellow CCNV members conceived the idea
for the nature of the display: a sculpture of a modern Na-
tivity scene in which, in lieu of the traditional Holy Family,
the two adult figures and the infant would appear as con-
temporary homeless people huddled on a streetside steam
grate. The family was to be black (most of the homeless in
Washington being black); the figures were to be life-sized,
and the steam grate would be positioned atop a platform
‘pedestal,’ or base, within which special-effects equipment
would be enclosed to emit simulated ‘steam’ through the
grid to swirl about the figures. They also se led upon a
title for the work – ‘Third World America’ – and a legend
for the pedestal: ‘and still there is no room at the inn.’ “
Snyder made inquiries to locate an artist to produce the sculpture.
He was referred to respondent James Earl Reid, a Baltimore, Mary-
land, sculptor. In the course of two telephone calls, Reid agreed to
sculpt the three human figures. CCNV agreed to make the steam
James Earl Reid, Third World America
grate and pedestal for the statue. Reid proposed that the work be
cast in bronze, at a total cost of approximately $100,000 and taking
six to eight months to complete. Snyder rejected that proposal be-
cause CCNV did not have sufficient funds, and because the statue
had to be completed by December 12 to be included in the pageant.
Reid then suggested, and Snyder agreed, that the sculpture would
be made of a material known as “Design Cast 62,” a synthetic sub-
stance that could meet CCNV’s monetary and time constraints, could
be tinted to resemble bronze, and could withstand the elements. The
parties agreed that the project would cost no more than $15,000, not
including Reid’s services, which he offered to donate. The parties did
not sign a wri en agreement. Neither party mentioned copyright.
After Reid received an advance of $3,000, he made several
sketches of figures in various poses. At Snyder’s request, Reid sent
CCNV a sketch of a proposed sculpture showing the family in a
crechelike se ing: the mother seated, cradling a baby in her lap; the
father standing behind her, bending over her shoulder to touch the
baby’s foot. Reid testified that Snyder asked for the sketch to use
272 CHAPTER 4. COPYRIGHT
in raising funds for the sculpture. Snyder testified that it was also
for his approval. Reid sought a black family to serve as a model for
the sculpture. Upon Snyder’s suggestion, Reid visited a family liv-
ing at CCNV’s Washington shelter but decided that only their newly
born child was a suitable model. While Reid was in Washington, Sny-
der took him to see homeless people living on the streets. Snyder
pointed out that they tended to recline on steam grates, rather than
sit or stand, in order to warm their bodies. From that time on, Reid’s
sketches contained only reclining figures.
Throughout November and the first two weeks of December 1985,
Reid worked exclusively on the statue, assisted at various times by a
dozen different people who were paid with funds provided in install-
ments by CCNV. On a number of occasions, CCNV members visited
Reid to check on his progress and to coordinate CCNV’s construc-
tion of the base. CCNV rejected Reid’s proposal to use suitcases or
shopping bags to hold the family’s personal belongings, insisting in-
stead on a shopping cart. Reid and CCNV members did not discuss
copyright ownership on any of these visits.
On December 24, 1985, 12 days after the agreed-upon date, Reid
delivered the completed statue to Washington. There it was joined
to the steam grate and pedestal prepared by CCNV and placed on
display near the site of the pageant. Snyder paid Reid the final in-
stallment of the $15,000. The statue remained on display for a month.
In late January 1986, CCNV members returned it to Reid’s studio in
Baltimore for minor repairs. Several weeks later, Snyder began mak-
ing plans to take the statue on a tour of several cities to raise money
for the homeless. Reid objected, contending that the Design Cast 62
material was not strong enough to withstand the ambitious itinerary.
He urged CCNV to cast the statue in bronze at a cost of $35,000, or
to create a master mold at a cost of $5,000. Snyder declined to spend
more of CCNV’s money on the project.
In March 1986, Snyder asked Reid to return the sculpture. Reid re-
fused. He then filed a certificate of copyright registration for “Third
World America” in his name and announced plans to take the sculp-
ture on a more modest tour than the one CCNV had proposed. Sny-
der, acting in his capacity as CCNV’s trustee, immediately filed a com-
peting certificate of copyright registration.
Snyder and CCNV then commenced this action against Reid.
II
A
The Copyright Act of 1976 provides that copyright ownership “vests
initially in the author or authors of the work.” 17 U. S. C. § 201(a). As
a general rule, the author is the party who actually creates the work,
B. OWNERSHIP 273
that is, the person who translates an idea into a fixed, tangible expres-
sion entitled to copyright protection. § 102. The Act carves out an im-
portant exception, however, for “works made for hire.” If the work
is for hire, “the employer or other person for whom the work was
prepared is considered the author” and owns the copyright, unless
there is a wri en agreement to the contrary. § 201(b). Classifying a
work as “made for hire” determines not only the initial ownership of
its copyright, but also the copyright’s duration, § 302(c), and the own-
ers’ renewal rights, § 304(a), termination rights, § 203(a), and right to
import certain goods bearing the copyright, § 601(b)(1). The contours
of the work for hire doctrine therefore carry profound significance for
freelance creators – including artists, writers, photographers, design-
ers, composers, and computer programmers – and for the publish-
ing, advertising, music, and other industries which commission their
works.
The dispositive inquiry in this case therefore is whether “Third
World America” is “a work prepared by an employee within the
scope of his or her employment” under § 101(1). The Act does not
define these terms. In the absence of such guidance, four interpre-
tations have emerged. The first holds that a work is prepared by
an employee whenever the hiring party retains the right to control
the product. A second, and closely related, view is that a work is
prepared by an employee under § 101(1) when the hiring party has
actually wielded control with respect to the creation of a particular
work. A third view is that the term “employee” within § 101(1) car-
ries its common-law agency law meaning. Finally, respondent and
numerous amici curiae contend that the term “employee” only refers
to “formal, salaried” employees.
Nothing in the text of the work for hire provisions indicates that
Congress used the words “employee” and “employment” to describe
anything other than the conventional relation of employer and em-
ploye. On the contrary, Congress’ intent to incorporate the agency
law definition is suggested by § 101(1)’s use of the term, “scope of
employment,” a widely used term of art in agency law.
We therefore conclude that the language and structure of § 101
of the Act do not support either the right to control the product or
the actual control approaches.8 The structure of § 101 indicates that a
8
We also reject the suggestion of respondent and amici that the term “em-
ployee” refers only to formal, salaried employees. The Act does not say “formal”
or “salaried” employee, but simply “employee.” Moreover, respondent and those
amici who endorse a formal, salaried employee test do not agree upon the content
of this test. Compare, e. g., Brief for Respondent 37 (hired party who is on payroll
is an employee) with Tr. of Oral Arg. 31 (hired party who receives a salary or com-
missions regularly is an employee); and Brief for Volunteer Lawyers for the Arts,
Inc., et al. as Amici Curiae 4 (hired party who receives a salary and is treated as an
274 CHAPTER 4. COPYRIGHT
work for hire can arise through one of two mutually exclusive means,
one for employees and one for independent contractors, and ordinary
canons of statutory interpretation indicate that the classification of a
particular hired party should be made with reference to agency law.
In sum, we must reject petitioners’ argument. Transforming a
commissioned work into a work by an employee on the basis of the
hiring party’s right to control, or actual control of, the work is in-
consistent with the language, structure, and legislative history of the
work for hire provisions. To determine whether a work is for hire
under the Act, a court first should ascertain, using principles of gen-
eral common law of agency, whether the work was prepared by an
employee or an independent contractor. After making this determi-
nation, the court can apply the appropriate subsection of § 101.
B
We turn, finally, to an application of § 101 to Reid’s production of
“Third World America.” In determining whether a hired party is an
employee under the general common law of agency, we consider the
hiring party’s right to control the manner and means by which the
product is accomplished. Among the other factors relevant to this
inquiry are the skill required; the source of the instrumentalities and
tools; the location of the work; the duration of the relationship be-
tween the parties; whether the hiring party has the right to assign
additional projects to the hired party; the extent of the hired party’s
discretion over when and how long to work; the method of payment;
the hired party’s role in hiring and paying assistants; whether the
work is part of the regular business of the hiring party; whether the
hiring party is in business; the provision of employee benefits; and
the tax treatment of the hired party. No one of these factors is deter-
minative.
Examining the circumstances of this case in light of these factors,
we agree with the Court of Appeals that Reid was not an employee
of CCNV but an independent contractor. True, CCNV members di-
rected enough of Reid’s work to ensure that he produced a sculp-
ture that met their specifications. But the extent of control the hiring
party exercises over the details of the product is not dispositive. In-
deed, all the other circumstances weigh heavily against finding an
employment relationship. Reid is a sculptor, a skilled occupation.
Reid supplied his own tools. He worked in his own studio in Bal-
timore, making daily supervision of his activities from Washington
practicably impossible. Reid was retained for less than two months,
a relatively short period of time. During and after this time, CCNV
had no right to assign additional projects to Reid. Apart from the
employee for Social Security and tax purposes is an employee).
B. OWNERSHIP 275
deadline for completing the sculpture, Reid had absolute freedom to
decide when and how long to work. CCNV paid Reid $15,000, a sum
dependent on completion of a specific job, a method by which inde-
pendent contractors are often compensated. Reid had total discretion
in hiring and paying assistants. Creating sculptures was hardly regu-
lar business for CCNV. Indeed, CCNV is not a business at all. Finally,
CCNV did not pay payroll or Social Security taxes, provide any em-
ployee benefits, or contribute to unemployment insurance or workers’
compensation funds.
Because Reid was an independent contractor, whether “Third
World America” is a work for hire depends on whether it satisfies
the terms of § 101(2). This petitioners concede it cannot do. Thus, Is CCNV a joint author?
CCNV is not the author of “Third World America” by virtue of the
work for hire provisions of the Act.
Garcia v. Google, Inc.
786 F. 3d 733 (9th Cir. 2015) (en banc)
In July 2011, Cindy Lee Garcia responded to a casting call for a film
titled Desert Warrior, an action-adventure thriller set in ancient Ara-
bia. Garcia was cast in a cameo role, for which she earned $500. She
received and reviewed a few pages of script. Acting under a profes-
sional director hired to oversee production, Garcia spoke two sen-
tences: ”Is George crazy? Our daughter is but a child?” Her role was
to deliver those lines and to ”seem[] concerned.”
Garcia later discovered that writer-director Mark Basseley
Youssef (a.k.a. Nakoula Basseley Nakoula or Sam Bacile) had a dif-
ferent film in mind: an anti-Islam polemic renamed Innocence of Mus-
lims. The film, featuring a crude production, depicts the Prophet Mo-
hammed as, among other things, a murderer, pedophile, and homo-
sexual. Film producers dubbed over Garcia’s lines and replaced them
with a voice asking, ”Is your Mohammed a child molester?” Garcia
appears on screen for only five seconds.
Almost a year after the casting call, in June 2012, Youssef up-
loaded a 13-minute-and-51-second trailer of Innocence of Muslims
to YouTube, the video-sharing website owned by Google, Inc., which
boasts a global audience of more than one billion visitors per month.
After it was translated into Arabic, the film fomented outrage across
the Middle East, and media reports linked it to numerous violent
protests. An Egyptian cleric issued a fatwa against anyone associ-
ated with Innocence of Muslims, calling upon the ”Muslim Youth in
America[] and Europe” to ”kill the director, the producer[,] and the
actors and everyone who helped and promoted this film.” Garcia re-
ceived multiple death threats.
Legal wrangling ensued. Garcia asked Google to remove the film,
asserting it was hate speech and violated her state law rights to pri-
vacy and to control her likeness. Garcia also sent Google five take-
276 CHAPTER 4. COPYRIGHT
down notices under the Digital Millenium Copyright Act, 17 U.S.C.
§ 512, claiming that YouTube’s broadcast of Innocence of Muslims
infringed her copyright in her ”audio-visual dramatic performance.”
Google declined to remove the film.
[Garcia sued Google and Youssef for copyright infringement.]
The central question is whether the law and facts clearly favor
Garcia’s claim to a copyright in her five-second acting performance as
it appears in Innocence of Muslims. The answer is no. This conclusion
does not mean that a plaintiff like Garcia is without options or that
she couldn’t have sought an injunction against different parties or on
other legal theories, like the right of publicity and defamation.5
Innocence of Muslims is an audiovisual work that is categorized as
a motion picture and is derivative of the script. Garcia is the author of
none of this and makes no copyright claim to the film or to the script.
Instead, Garcia claims that her five-second performance itself merits
copyright protection.
Garcia’s theory of copyright law would result a legal morass –
splintering a movie into many different ”works,” even in the ab-
sence of an independent fixation. Simply put, as Google claimed, it
”make[s] Swiss cheese of copyrights.”
Take, for example, films with a large cast—the proverbial ”cast of
thousands.” The silent epic Ben-Hur advertised a cast of 125,000 peo-
ple. In the Lord of the Rings trilogy, 20,000 extras tramped around
Middle-Earth alongside Frodo Baggins (played by Elijah Wood).
Treating every acting performance as an independent work would
not only be a logistical and financial nightmare, it would turn cast of
thousands into a new mantra: copyright of thousands.
The reality is that contracts and the work-made-for-hire doctrine
govern much of the big-budget Hollywood performance and produc-
tion world. Absent these formalities, courts have looked to implied
licenses. Indeed, the district court found that Garcia granted Youssef
just such an implied license to incorporate her performance into the
film. But these legal niceties do not necessarily dictate whether some-
thing is protected by copyright, and licensing has its limitations. As
filmmakers warn, low-budget films rarely use licenses. Even if film-
makers diligently obtain licenses for everyone on set, the contracts
are not a panacea. Third-party content distributors, like YouTube
and Netflix, won’t have easy access to the licenses; litigants may dis-
pute their terms and scope; and actors and other content contributors
can terminate licenses after thirty five years. Untangling the complex,
difficult-to-access, and often phantom chain of title to tens, hundreds,
5
Down the road, Garcia also may have a contract claim. She recalls signing
some kind of document, though she cannot find a copy. We take no position on
this claim.
B. OWNERSHIP 277
or even thousands of standalone copyrights is a task that could tie the
distribution chain in knots. And filming group scenes like a public
parade, or the 1963 March on Washington, would pose a huge bur-
den if each of the thousands of marchers could claim an independent
copyright.
3 Derivative Works
Copyright Act
(a) The subject ma er of copyright as specified by section 102 in- 17 U.S.C. § 103
cludes compilations and derivative works, but protection for a Subject matter of copyright: Compila-
work employing preexisting material in which copyright sub- tions and derivative works
sists does not extend to any part of the work in which such ma-
terial has been used unlawfully.
(b) The copyright in a compilation or derivative work extends only
to the material contributed by the author of such work, as dis-
tinguished from the preexisting material employed in the work,
and does not imply any exclusive right in the preexisting mate-
rial. The copyright in such work is independent of, and does not
affect or enlarge the scope, duration, ownership, or subsistence
of, any copyright protection in the preexisting material.
A “compilation” is a work formed by the collection and assembling 17 U.S.C. § 101
of preexisting materials or of data that are selected, coordinated, or Definitions
arranged in such a way that the resulting work as a whole constitutes
an original work of authorship. The term “compilation” includes col-
lective works.
A “collective work” is a work, such as a periodical issue, anthol-
ogy, or encyclopedia, in which a number of contributions, constitut-
ing separate and independent works in themselves, are assembled
into a collective whole.
A “derivative work” is a work based upon one or more preex-
isting works, such as a translation, musical arrangement, dramati-
zation, 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 modifica- 802 F.3d 1012 (2015)
tions, which, as a whole, represent an original work of authorship, Towle manufactured and sold replicas
is a “derivative work”. of the Batmobiles used in the 1996
television series and the 1989 Tim Bur-
DC Comics v. Towle ton movie. Because the series and the
movie were made under licensing ar-
When a copyright owner authorizes a third party to prepare a deriva- rangements, the court discussed the
tive work, the owner of the underlying work retains a copyright in scope of derivative-work copyrights.
278 CHAPTER 4. COPYRIGHT
that derivative work with respect to all of the elements that the deriva-
tive creator drew from the underlying work and employed in the
derivative work. By contrast, the creator of the derivative work has
a copyright only as to those original aspects of the work that the
derivative creator contributed, and only to the extent the derivative
creator’s contributions are more than trivial. Logically, therefore, if
[another] third party copies a derivative work without authorization,
it infringes the original copyright owner’s copyright in the underly-
ing work to the extent the unauthorized copy of the derivative work
also copies the underlying work.
207 F. 3d 402 (7th Cir. 2000)
Pickett v. Prince
The defendant, identified only as ”Prince” in the caption of the vari-
ous pleadings, is a well-known popular singer whose name at birth
was Prince Rogers Nelson, but who for many years performed un-
der the name Prince (which is what we’ll call him) and since 1992
has referred to himself by an unpronounceable symbol. The sym-
bol (which rather strikingly resembles the Egyptian hieroglyph ankh,
but the parties make nothing of this, so neither shall we) is his trade-
mark but it is also a copyrighted work of visual art that licensees of
Prince have embodied in various forms, including jewelry, clothing,
and musical instruments.
In 1993 the plaintiff made a guitar in the shape of the Prince sym-
bol; he concedes that it is a derivative work within the meaning of 17
U.S.C. § 101. The plaintiff claims (truthfully, we assume for purposes
of the appeal) to have shown the guitar to Prince. Shortly afterwards
Prince appeared in public playing a guitar quite similar to the plain-
tiff’s.
The plaintiff brought this suit for copyright infringement in 1994,
but it languished for years in the district court. In January 1997 Prince
counterclaimed for infringement of the copyright on his symbol.
Picke claims the right to copyright a work derivative from an-
other person’s copyright without that person’s permission and then
to sue that person for infringement by the person’s own derivative
work. Picke ’s guitar was a derivative work of the copyrighted
Prince symbol, and so was Prince’s guitar. Since Prince had (or so
we must assume) access to Picke ’s guitar, and since the two gui-
tars, being derivatives of the same underlying work, are, naturally,
very similar in appearance, Picke has – if he is correct that one can
copyright a derivative work when the original work is copyrighted
by someone else who hasn’t authorized the maker of the derivative
work to copyright it – a prima facie case of infringement. Picke must,
he concedes, show that his derivative work has enough originality to
Ferdinand Pickett, Symbol-shaped gui- entitle him to a copyright, and also that the copyright is limited to the
tar features that the derivative work adds to the original. But he insists
B. OWNERSHIP 279
that with these limitations his copyright is valid.
We need not pursue the issue of originality of derivative works.
The Copyright Act grants the owner of a copyright the exclusive right
to prepare derivative works based upon the copyrighted work. So
Picke could not make a derivative work based on the Prince symbol
without Prince’s authorization even if Picke ’s guitar had a smidgeon
of originality. This is a sensible result. A derivative work is, by def-
inition, bound to be very similar to the original. Concentrating the
right to make derivative works in the owner of the original work pre-
vents what might otherwise be an endless series of infringement suits
posing insoluble difficulties of proof. Consider two translations into
English of a book originally published in French. The two transla-
tions are bound to be very similar and it will be difficult to establish
whether they are very similar because one is a copy of the other or be-
cause both are copies of the same foreign-language original. Whether
Prince’s guitar is a copy of his copyrighted symbol or a copy of Pick-
e ’s guitar is likewise not a question that the methods of litigation
can readily answer with confidence. If anyone can make derivative
works based on the Prince symbol, we could have hundreds of Pick-
e s, each charging infringement by the others.
Picke relies for his implausible theory primarily on section 103(a)
of the Copyright Act, which provides that while copyright can be ob-
tained in derivative works, ”protection for a work employing preex-
isting material in which copyright subsists does not extend to any
part of the work in which such material has been used unlawfully.”
Picke reads this as authorizing a person other than the owner of the
original work to make a derivative work, merely forbidding him to
infringe the original. It is very difficult to see how a derivative work
not made by the owner of the original work could fail to infringe it,
given the definition of derivative works.
Picke relied in the district court on a dictum in Eden Toys, Inc. Eden Toys: 697 F.2d 27 (2d Cir. 1982)
v. Florelee Undergarment Co., that a stranger can make a derivative
work without the permission of the owner of the copyright of the
original work if the original work does not ”pervade” the deriva-
tive work. The suggestion, if taken seriously (which it has not been),
would inject enormous uncertainty into the law of copyright and un-
dermine the exclusive right that section 106(2) gives the owner of
the copyright on the original work. It also rests on a confusion be-
tween the determination of whether a work is derivative and the de-
termination of who has the right to make the derivative work. De-
fined too broadly, ”derivative work” would confer enormous power
on the owners of copyrights on preexisting works. The Bernstein-
Sondheim musical West Side Story, for example, is based loosely on
Shakespeare’s Romeo and Juliet, which in turn is based loosely on
Ovid’s Pyramus and Thisbe, so that if ”derivative work” were de-
280 CHAPTER 4. COPYRIGHT
fined broadly enough (and copyright were perpetual) West Side Story
would infringe Pyramus and Thisbe unless authorized by Ovid’s
heirs. We can thus imagine the notion of pervasiveness being used
to distinguish a work fairly described as derivative from works only
loosely connected with some ancestral work claimed to be their orig-
inal. In that sense Prince’s symbol clearly ”pervades” both guitars. If
it did not, the guitars might not be derivative works, but they would
not be derivative works that anyone was free to make without obtain-
ing Prince’s permission.
Keeling v. Hars
809 F.3d 43 (2d Cir. 2015)
Plaintiff–Appellee Jaime Keeling is the author of Point Break Live!
(“PBL”), a parody stage adaptation of the 1991 Hollywood action
movie Point Break, starring Keanu Reeves and Patrick Swayze. In
the film, Reeves plays a rookie FBI agent who goes undercover to
infiltrate a gang of bank-robbing surfers led by Swayze’s character.
The Keeling-authored PBL parody parallels the characters and plot
elements from Point Break and relies almost exclusively on selected
dialogue from the screenplay. To this raw material, Keeling added
jokes, props, exaggerated staging, and humorous theatrical devices
to transform the dramatic plot and dialogue of the film into an irrever-
ent, interactive theatrical experience. For example, in Keeling’s PBL
parody, Point Break ’s death-defying scene in which Reeves’s charac-
ter must pick up bricks, blindfolded, in a swimming pool takes place,
instead, in a kiddie pool. Massive waves in the film are replaced by
squirt guns in the PBL parody. A central conceit of the PBL parody is
that the Keanu Reeves character is selected at random from the audi-
ence and reads his lines from cue cards, thereby lampooning Reeves’s
reputedly stilted performance in the movie. Keeling added to the ef-
fect that the audience was watching the making of the film by creat-
ing a set of film-production characters in the PBL parody, including
a director, cinematographer, and production assistants. Keeling pos-
sesses no copyright or license with regard to the Point Break motion
picture.
Defendant–Appellant Eve Hars owns production company New
Rock Theater Productions, LLC (“New Rock”). In 2007, Keeling ex-
ecuted a production agreement with Hars, pursuant to which New
Rock would stage a two-month production run of PBL from October
through December 2007. During that time period, Hars conferred
with an entertainment a orney and the holder of the copyright to the
Hollywood screenplay for Point Break, and eventually Hars came to
believe that Keeling did not lawfully own any rights to the PBL par-
ody play. Accordingly, after its initial two-month run, Hars sought
to renegotiate the terms of the contract upon its expiration and, in
effect, continue to produce PBL without further payment to Keeling.
C. PROCEDURES 281
Keeling refused renegotiation, threatened suit, and registered a copy-
right in PBL, without first obtaining permission from the copyright
holders of the original Point Break. Keeling’s asserted copyright in
PBL became effective on January 4, 2008. Hars and New Rock contin-
ued to stage performances of PBL for four years thereafter without
payment to or authorization from Keeling.
If a work employs preexisting copyrighted material lawfully – as
in the case of a ”fair use” – nothing in the statute prohibits the ex-
tension of the ”independent” copyright protection promised by Sec-
tion 103.7 A close reading of the statute therefore makes plain that an
unauthorized but lawful fair use employing preexisting copyrighted
material may itself merit copyright protection. It is not the invocation
of fair use that provides the work copyright protection, and perhaps
thinking so has created some confusion on the part of the defendant.
It is the originality of the derivative work that makes it protectable,
and fair use serves only to render lawful the derivative work, such
that it may acquire – as would other lawful derivative works – such
protection.
C Procedures
Copyright, the statute tells us, subsists as soon as a work is created. Any who talks about "copyrighting" a
The author doesn’t need to do anything more to become a copyright work is confused. At best, they are
thinking about "registering" the work,
owner. But it was not always thus. And this is not to say that copy-
which does have several important ad-
right has no procedural wrinkles – only that these procedures are not vantages. At worst, they think that
preconditions on copyright protection. unregistered works are not protected
by copyright and may freely be copied.
1 Formalities Then This is wrong, wrong, totally wrong. Cor-
rect them.
Christopher Sprigman
57 Stan. L. Rev. 485
Reform(aliz)ing Copyright
For most of our history, U.S. copyright law has included a system
of procedural mechanisms, referred to collectively as “copyright for-
malities,” that helped to maintain copyright’s traditional balance be-
tween providing private incentives to authors and preserving a ro-
bust stock of public domain works from which future creators could
draw. From the first copyright statute in 1790, Congress required that
authors register their copyrights, give notice (by marking published
copies with an indication of copyright status such as the “©” sym-
bol, as well as other information about copyright ownership), and
(perhaps most importantly) renew their rights after a relatively short
initial term by reregistering their copyright. Failure to comply with
7
To be sure, the independent copyright protection in the new work is limited to
that work’s original content.
282 CHAPTER 4. COPYRIGHT
these requirements either terminated the copyright (in the case of
nonrenewal) or prevented it from arising in the first place.
Estate of Martin Luther King v. CBS, Inc.
194 F.3d 1211 (11th Cir. 1999)
The Estate of Martin Luther King, Jr., Inc. brought this copyright in-
fringement action against CBS, Inc. after CBS produced a video doc-
umentary that used, without authorization, portions of civil rights
leader Dr. Martin Luther King’s famous ”I Have a Dream” speech at
the March on Washington on August 28, 1963.
On September 30, 1963, approximately one month after the deliv-
ery of the Speech, Dr. King took steps to secure federal copyright
protection for the Speech under the Copyright Act of 1909, and a
certificate of registration of his claim to copyright was issued by the
Copyright Office on October 2, 1963. Almost immediately thereafter,
Dr. King filed suit in the Southern District of New York to enjoin the
unauthorized sale of recordings of the Speech and won a preliminary
injunction on December 13, 1963.
Because of the dates of the critical events, the determinative issues
in this case are properly analyzed under the Copyright Act of 1909
(”1909 Act”), rather than the Copyright Act of 1976 (”1976 Act”) that
is currently in effect. The question is whether Dr. King’s a empt
to obtain statutory copyright protection on September 30, 1963 was
effective, or whether it was a nullity because the Speech had already
been forfeited to the public domain via a general publication.
Under the regime created by the 1909 Act, an author received
state common law protection automatically at the time of creation
of a work. This state common law protection persisted until the mo-
ment of a general publication. When a general publication occurred,
the author either forfeited his work to the public domain, or, if he had
therebefore complied with federal statutory requirements, converted
his common law copyright into a federal statutory copyright.
In order to soften the hardship of the rule that publication de-
stroys common law rights, courts developed a distinction between
a ”general publication” and a ”limited publication.” Only a general
publication divested a common law copyright. A general publication
occurred when a work was made available to members of the public
at large without regard to their identity or what they intended to do
with the work. Conversely, a non-divesting limited publication was
one that communicated the contents of a work to a select group and
for a limited purpose, and without the right of diffusion, reproduc-
tion, distribution or sale. The issue before us is whether Dr. King’s
delivery of the Speech was a general publication.
It appears from the case law that a general publication occurs
only in two situations. First, a general publication occurs if tangi-
ble copies of the work are distributed to the general public in such
C. PROCEDURES 283
a manner as allows the public to exercise dominion and control over
the work. Second, a general publication may occur if the work is ex-
hibited or displayed in such a manner as to permit unrestricted copy-
ing by the general public. See Le er Edged in Black Press, Inc. v. Public Letter Edged in Black: 320 F. Supp. 1303
Bldg. Comm’n of Chicago (invoking this exception where ”there were (N.D. Ill. 1970)
no restrictions on copying [of a publicly displayed sculpture] and no
guards preventing copying” and ”every citizen was free to copy the
maque e for his own pleasure and camera permits were available to
members of the public”). However, the case law indicates that re-
strictions on copying may be implied, and that express limitations
in that regard are deemed unnecessary. See American Tobacco Co. v. American Tobacco: 207 U.S. 284 (1907)
Werckmeister (holding that there is no general publication where art-
work is exhibited and ”there are bylaws against copies, or where it
is tacitly understood that no copying shall take place, and the public
are admi ed . . . on the implied understanding that no improper
advantage will be taken of the privilege” (emphasis added)); Burke v. Burke: 598 F.2d 688 (1st Cir. 1979)
National Broadcasting Co. (holding that releasing a film to a professor
and host of an educational television program, and authorizing him
to copy and broadcast same on public television was a limited pub-
lication because the grant of permission to use the film contained an
implied condition against distributing copies of the film to others or
using it for other purposes); Nu v. National Inst. Incorporated for the Nutt: 31 F.2d 236 (2d Cir. 1929)
Improvement of Memory (lectures were not generally published when
delivered because oral delivery is not publication, and ”[e]ven where
the hearers are allowed to make copies of what was said for their per-
sonal use, they cannot later publish for profit that which they had not
retained the right to sell”).
The case law indicates that distribution to the news media, as op-
posed to the general public, for the purpose of enabling the reporting
of a contemporary newsworthy event, is only a limited publication.
This rule comports with common sense; it does not force an author
whose message happens to be newsworthy to choose between ob-
taining news coverage for his work and preserving his common-law
copyright.
With the above principles in mind, in the summary judgment pos-
ture of this case and on the current state of this record, we are unable
to conclude that CBS has demonstrated beyond any genuine issue of
material fact that Dr. King, simply through his oral delivery of the
Speech, engaged in a general publication making the Speech avail-
able to members of the public at large without regard to their iden-
tity or what they intended to do with the work. A performance, no
ma er how broad the audience, is not a publication; to hold other-
wise would be to upset a long line of precedent. This conclusion is
not altered by the fact that the Speech was broadcast live to a broad
radio and television audience and was the subject of extensive con-
284 CHAPTER 4. COPYRIGHT
temporaneous news coverage. We follow the above cited case law
indicating that release to the news media for contemporary coverage
of a newsworthy event is only a limited publication.
Estate of Martin Luther King v. CBS, Inc.
13 F. Supp. 2d 1347 (N.D. Ga. 1998)
An advance text of Dr. King’s speech was available in the press tent;
This is from the District Court opinion
on appeal in the Court of Appeals opin- no copyright notice appeared on the text or was asserted concurrent
ion above. with the giving of the speech. CBS contends that there were no re-
strictions regarding entry into the press tent and that individuals out-
side of the press entered the area and obtained copies of the day’s
speeches. The Estate argues that Dr. King furnished this advance
text for the sole purpose of assisting press coverage of the March and
that he had been assured that it would be available only to the press.
Following the March, the SCLC reprinted the speech in its entirety
in its September 1963 newsle er with no copyright notice or other re-
strictions. The newsle er bore Dr. King’s name and title as President
at the top of its masthead. Generally, the SCLC news-le er had a
large national circulation and was also sent to those who asked for
copies.
However, material facts are in dispute as to whether the use of
Dr. King’s speech in the newsle er was authorized and also as to the
actual availability of the advance text. Accordingly, for the purposes
of summary judgment, this court does not rest its holding upon the
newsle er or the advance text but upon the context of Dr. King’s
speech itself.
42 F. Supp. 412 (S.D.N.Y. 1941)
Wildman v. New York Times Co.
This suit arose by reason of a wri en request sent to defendant’s
newspaper for the words of the verse ”Remember This” by F. Col-
lis Wildman. Several Sundays later in its Queries and Answers page
defendant printed the answer to the said request, giving the title, the
name of the author and the full text of the verse; followed by ”This
request was answered by a number of readers, some of whom sent
the poem”.
Plaintiff claims that this publication in the newspaper without his
consent was in derogation of his rights in the copyrighted verse. He
wrote it on or about October 4, 1911. Plaintiff applied for a copyright
and received the certificate of registration on or about July 3, 1926.
On June 23, 1926, he did cause his verse to be printed on a card by a
printer in Philadelphia; 3,000 copies of it. At the end of the verse, at
the right is the name ”F. Collis Wildman”. In the lower left corner of
card is printed the word ”Copyright”. Three thousand of these cards,
described as above, were sold to the public by the plaintiff.
The law is well se led that the provisions of the statute as to no-
tice must be complied with and by selling a copyrighted article oth-
C. PROCEDURES 285
erwise there is deication to the public and the copyright protection is
lost. Publication with notice of copyright is the essence of compliance
with the statute, and publication without proper notice amounts to a
dedication to the public sufficient to defeat all subsequent efforts at
copyright protection.
With the above principles in mind, I can only come to the con-
clusion that the plaintiff, when he had printed and sold the cards in
June, 1926, dedicated his verse to the public. I can only conclude that
there was no sufficient or legal copyright notice a ached. There was
no date a ached. There apparently was no claim of copyright on the
printed card by him personally, although this is somewhat question-
able in view of the fact that his own name was at the end of the verse.
However, he did not comply with the statute; and the alleged notice,
if it was intended as a notice of copyright, is insufficient to secure to
the plaintiff any right under the copyright registration.
2 Formalities Now
Formalities are dramatically less important under contemporary
copyright law. The 1976 Copyright Act moderated their impact in
some significant ways, and in 1988, the United States joined the inter-
national Berne Convention for the Protection of Literary and Artis-
tic Works, which requires that copyright ”shall not be subject to any
formality.” Thus, formalities are important mostly for older works –
those published before March 1, 1989, when the Berne Convention
Implementation Act came into force. But for those works, as the cases above
For modern works, the main ”formality” is fixation, which is such show, the formalities can be vitally im-
portant. Copyright due diligence for
a thin prerequisite that it is more like the minimal condition required
older works requires a careful investiga-
for the legal system to be sure it knows what the copyrighted work tion of the formalities.
even is. But traces of the other formalities remain, and competent
copyright practice requires complying with them.
a Fixation
Compendium of U.S. Copyright Office Practices (3d ed. 2014)
A work of authorship may be deemed copyrightable, provided that § 305
it has been “fixed in any tangible medium of expression, now known The Fixation Requirement
or later developed, from which [it] can be perceived, reproduced, or
otherwise communicated, either directly or indirectly with the aid
of a machine or device.” Specifically, the work must be fixed in a 17 U.S.C. § 102(a)
copy or phonorecord “by or under the authority of the author” and
the work must be “sufficiently permanent or stable to permit it to be
perceived, reproduced, or otherwise communicated for a period of
more than transitory duration.” 17 U.S.C. § 101
286 CHAPTER 4. COPYRIGHT
The terms “copy” and “phonorecord” are very broad. They cover
all of the material objects in which copyrightable works are capable
of being fixed.
17 U.S.C. § 101 • Copies are “material objects, other than phonorecords, in which
a work is fixed by any method now known or later developed,
and from which the work can be perceived, reproduced, or oth-
erwise communicated, either directly or with the aid of a ma-
chine or device,” including the material object “in which the
work is first fixed.”
17 U.S.C. § 101 • Phonorecords are “material objects in which sounds, other than
those accompanying a motion picture or other audiovisual
work, are fixed by any method now known or later developed,
and from which the sounds can be perceived, reproduced, or
otherwise communicated, either directly or with the aid of a
machine or device,” including “the material object in which the
sounds are first fixed.”
There are countless ways that a work may be fixed in a copy or
phonorecord and it makes no difference what the form, manner, or
medium of fixation may be. For example, a work may be expressed in
words, numbers, notes, sounds, pictures, or any other graphic or sym-
bolic indicia and the author’s expression may be fixed in a physical
object in wri en, printed, photographic, sculptural, punched, mag-
netic, or any other stable form.
Most works are fixed by their very nature, such as an article
printed on paper, a song recorded in a digital audio file, a sculpture
rendered in bronze, a screenplay saved in a data file, or an audiovi-
sual work captured on film. Nevertheless, some works of authorship
may not satisfy the fixation requirement, such as an improvisational
speech, sketch, dance, or other performance that is not recorded in
a tangible medium of expression. Other works may be temporarily
embodied in a tangible form, but may not be sufficiently permanent
or stable to warrant copyright protection, such as purely evanescent
or transient reproductions such as those projected briefly on a screen,
shown electronically on a television, or captured momentarily in the
memory of a computer.
The Office rarely encounters works that do not satisfy the fixation
requirement because the Office requires applicants to submit copies
or phonorecords that contain a visually or aurally perceptible copy of
the work. However, the Office may communicate with the applicant
or may refuse registration if the work or the medium of expression
only exists for a transitory period of time, if the work or the medium
is constantly changing, or if the medium does not allow the specific
elements of the work to be perceived, reproduced, or otherwise com-
C. PROCEDURES 287
municated in a consistent and uniform manner.
Stern Electronics, Inc. v. Kaufman
669 F.2d 852 (2nd Cir. 1982)
Video games like “Scramble” can roughly be described as comput-
ers programmed to create on a television screen cartoons in which
some of the action is controlled by the player. In Stern’s “Scramble,”
for example, the video screen displays a spaceship moving horizon-
tally through six different scenes in which obstacles are encountered.
With each scene the player faces increasing difficulty in traversing the
course and scoring points. The first scene depicts mountainous ter-
rain, missile bases, and fuel depots. The player controls the altitude
and speed of the spaceship, decides when to release the ship’s sup-
ply of bombs, and fires lasers that can destroy a acking missiles and
aircraft. He a empts to bomb the missile bases (scoring points for
success), bomb the fuel depots (increasing his own diminishing fuel
supply with each hit), avoid the missiles being fired from the ground,
and avoid crashing his ship into the mountains. And that is only
scene one. In subsequent scenes the hazards include missile-firing
enemy aircraft and tunnel-like airspaces. The scenes are in color, and
the action is accompanied by ba lefield sounds.
The game is built into a cabinet containing a cathode ray tube, a
number of electronic circuit boards, a loudspeaker, and hand controls
for the player. The electronic circuitry includes memory storage de-
vices called PROMs, an acronym for “programmable read only mem-
ory.” The PROM stores the instructions and data from a computer
program in such a way that when electric current passes through the
circuitry, the interaction of the program stored in the PROM with
the other components of the game produces the sights and sounds of
the audiovisual display that the player sees and hears. The memory
devices determine not only the appearance and movement of the im-
ages but also the variations in movement in response to the player’s
operation of the hand controls.
Stern manufactures amusement equipment, including video
games, for distribution worldwide. Even in the fast-paced world
of video games, “Scramble” quickly became a big success. Approx-
imately 10,000 units were sold at about $2,000 each in the first two
months for an initial sales volume of about $20 million. …
[Omni was enjoined from distributing its own “Scramble” arcade
games. One of its arguments was that Stern’s Scramble was not fixed.]
Omni contends that Konami is not entitled to secure a copyright
in the sights and sounds of its “Scramble” game because the audio-
visual work is neither “fixed in any tangible medium of expression”
nor “original” within the meaning of § 102(a). Both contentions arise
from the fact that the sequence of some of the images appearing on Scramble
the screen during each play of the game will vary depending upon
288 CHAPTER 4. COPYRIGHT
the actions taken by the player. For example, if he fails to avoid en-
emy fire, his spaceship will be destroyed; if he fails to destroy enough
fuel depots, his own fuel supply will run out, and his spaceship will
crash; if he succeeds in destroying missile sites and enemy planes,
those images will disappear from the screen; and the precise course
travelled by his spaceship will depend upon his adjustment of the
craft’s altitude and velocity.
If the content of the audiovisual display were not affected by the
participation of the player, there would be no doubt that the display
itself, and not merely the wri en computer program, would be eligi-
ble for copyright. The display satisfies the statutory definition of an
"Audiovisual works' are works that con- original “audiovisual work,” and the memory devices of the game
sist of a series of related images which satisfy the statutory requirement of a “copy” in which the work is
are intrinsically intended to be shown
“fixed.” The audiovisual work is permanently embodied in a mate-
by the use of machines or devices such
as projectors, viewers, or electronic rial object, the memory devices, from which it can be perceived with
equipment, together with accompany- the aid of the other components of the game.
ing sounds, if any, regardless of the na- We agree with the District Court that the player’s participation
ture of the material objects, such as does not withdraw the audiovisual work from copyright eligibility.
films or tapes, in which the works are
No doubt the entire sequence of all the sights and sounds of the game
embodied." 17 U.S.C. § 101
are different each time the game is played, depending upon the route
and speed the player selects for his spaceship and the timing and ac-
curacy of his release of his craft’s bombs and lasers. Nevertheless,
many aspects of the sights and the sequence of their appearance re-
main constant during each play of the game. These include the ap-
pearance (shape, color, and size) of the player’s spaceship, the enemy
craft, the ground missile bases and fuel depots, and the terrain over
which (and beneath which) the player’s ship flies, as well as the se-
quence in which the missile bases, fuel depots, and terrain appears.
Also constant are the sounds heard whenever the player successfully
destroys an enemy craft or installation or fails to avoid an enemy mis-
sile or laser. It is true, as appellants contend, that some of these sights
and sounds will not be seen and heard during each play of the game
in the event that the player’s spaceship is destroyed before the entire
course is traversed. But the images remain fixed, capable of being
seen and heard each time a player succeeds in keeping his spaceship
aloft long enough to permit the appearances of all the images and
sounds of a complete play of the game. The repetitive sequence of a
substantial portion of the sights and sounds of the game qualifies for
copyright protection as an audiovisual work.
Questions
Which of the following are sufficiently fixed to be copy-
rightable? In each case where your answer is “yes,” identify
the material object.
C. PROCEDURES 289
• A song sung on the sidewalk?
• A song wri en out as sheet music?
• A song on a CD?
• A diagram on a blackboard?
• A PowerPoint slide?
• A sonnet in your mind?
• A photograph?
• The Fast and the Furious: Tokyo Drift?
• Our class on copyrightable subject ma er?
Latte art. Fixed?
Photoshoot Problem
You represent Shelbyville Stages, a concert promoter. You have
booked the eccentric pop musician Plastica for a twelve-city tour in
the Northeast. The marketing staff at Shelbyville have recently dis-
covered an image online that they think would be perfect for using
on the concert posters. It features Plastica stepping down the landing
ramp of a flying saucer, backlit, carrying a pair of cheerleader’s pom-
poms, with a guitar slung over her back, and wearing her trademark
disinterested scowl.
A similar photograph was the cover of this month’s Them, a
celebrity fashion magazine. An unknown party or party unknown,
however, extensively Photoshopped it to make it look like a faded,
weather-beaten Old West “WANTED” poster. The marketing staff
tell you that this was a stroke of genius; the combination of the an-
tique look with the kitschy futuristic technology gives the whole
thing what they call a “neo-horsepunk flying-car feel” and the out-
law theme plays off Plastica’s expression. Their research has deter-
mined that the following people were in some way connected with
the image:
• Plastica herself, who has spent years crafting her stage persona,
which might be described as “heroin-ravaged all-American girl
from outer space.”
• Plastica’s hair-stylist, Alicia Abt, who produced the compli-
cated multi-layer updo in which she appears in the photograph,
with a single side ponytail and a Statute-of-Liberty-style ring of
spikes.
• Plastica’s personal trainer, Ben Boardwell, who has spent years
working with her to develop her musculature to combine
strength with a suggestion of wasted potential.
• A celebrity photographer, Charles Carmack, who decided on
the flying-saucer theme, chose the placement of props, and in-
structed Plastica on how to pose.
290 CHAPTER 4. COPYRIGHT
• Carmack’s salaried assistant, Denyse Dozier, who operated the
camera and pushed the bu on that took the photographs.
• A Photoshop expert, Ernest Eames, who digitally smoothed out
the wrinkles in Plastica’s face, extended her neck by two inches,
and made a hundred other similar tweaks.
• Them magazine, where the modified photograph ran.
• Some unknown person with the username SeePeteyPhotoshop,
who added the Old West theme and uploaded the modified
photo to the photosharing site AwfulThings.com.
Based on these facts, advise Shelbyville Stages on whether it will be
possible to obtain sufficient permissions to use the Old West version
of the photo for the concert posters, and, if so how to go about it.
b Registration
Compendium of U.S. Copyright Office Practices (3d ed. 2014)
§ 202
Under the current copyright law, a work of authorship is protected
Purposes and Advantages of Registra- by copyright from the moment it is created, provided that the work
tion is original and has been fixed in a tangible medium of expression.
Although registration is not required for a work to be protected by
copyright, it does provide several important benefits:
• A registration creates a public record that includes key facts re-
lating to the authorship and ownership of the claimed work, as
well as information about the work, such as title, year of cre-
ation, date of publication (if any), and the type of authorship
that the work contains (e.g., photographs, text, sound record-
ings).
• Registration (or a refusal to register) is a prerequisite to filing a
lawsuit for copyright infringement involving a U.S. work. Al-
though registration is permissive, both the certificate and the
original work must be on file with the Copyright Office before
a copyright owner can sue for infringement.
• To claim statutory damages or a orney’s fees in a copyright
infringement lawsuit, a work must be registered before the in-
fringement began or within three months after the first publica-
tion of the work.
• A registration constitutes prima facie evidence of the validity
of the copyright and the facts stated in the certificate of regis-
tration, but only if the work is registered before or within five
years after the work is first published.
• A registration provides information to prospective licensees,
such as the name and address for obtaining permission to use
C. PROCEDURES 291
the work.
• A document that has been recorded with the U.S. Copyright Of-
fice may provide constructive notice of the facts stated therein,
but only if the document specifically identifies a work of author-
ship and only if that work has been registered.
• The deposit copy(ies) submi ed with an application for regis-
tration of a published work may satisfy the mandatory deposit
requirement, provided that the applicant submi ed the best edi-
tion of the work.
• A registration is necessary to secure the full benefits of a prereg-
istration that has been issued by the U.S. Copyright Office.
• The U.S. Customs and Border Protection Service may seize for-
eign pirated copies of a copyright owner’s work, provided that
the work has been registered with the U.S. Copyright Office and
the certificate of registration has been recorded with the U.S.
Customs and Border Protection Service.
• A registration is required to claim royalties under the compul-
sory license for making and distributing phonorecords.
c Deposit
Compendium of U.S. Copyright Office Practices (3d ed. 2014)
The U.S. Copyright Act provides for two separate sets of deposit re-
quirements: deposits submi ed in connection with registration ap- § 1502
Deposit for Registration Distinguished
plications and those submi ed in accordance with the mandatory de- from Mandatory Deposit
posit provisions (or “legal deposit” provisions) of the law. The U.S.
Copyright Office administers both sets of provisions.
The Register of Copyrights specifies by regulation the form of de-
posit that must accompany a copyright claim and registration appli-
cation. Said regulations reflect and inform the ability of the Office
to examine the work for copyrightable authorship, to verify the au-
thorship claimed in the application, and to verify the facts stated in
the application. Deposits may also be used for evidentiary purposes
in litigation involving a copyrighted work. Since registration is not
required as a condition for copyright protection, the Register has the
authority to adjust or exempt the deposit requirements as appropri-
ate for certain works or application procedures, weighing the needs
or concerns of applicants and the public. Deposits may also be se-
lected by the Library of Congress.
Mandatory deposit is a statutory requirement for the benefit of
the national collection of the Library of Congress. The owner of copy-
292 CHAPTER 4. COPYRIGHT
right or the owner of the exclusive right of publication in a work pub-
lished in the United States must deposit two copies or phonorecords
of the work within three months after publication.
In most cases, a deposit submi ed for registration may be used to
satisfy the mandatory deposit requirement, provided that the appli-
cant submits two complete copies or two complete phonorecords of
the best edition of the work. In such cases, there is no need to sub-
mit additional copies or phonorecords for the purpose of mandatory
deposit.
For some classes of works, the deposit requirements for registra-
tion and mandatory deposit are not the same. In such cases, a sepa-
rate submission of copies, phonorecords, or identifying material may
be needed to register the work and to satisfy the mandatory deposit
requirements. For example, mandatory deposit for a computer pro-
gram requires two complete copies of the best edition, while regis-
tration may be accomplished with identifying material containing a
selection of the source code for that work. In the digital context, such
nuance and distinction is even more important, and applicable regu-
lations are therefore subject to change.
§ 1511
Submi ing a published work for the use or disposition of the Li-
Mandatory Deposit brary is not a condition of copyright protection. However, if compli-
ance with the mandatory deposit requirement is not accomplished
within three months of publication, the Register of Copyrights may
facilitate, demand, negotiate, or exempt the provision of copies or
phonorecords for the Library of Congress at any time after a work
has been published in the United States. If the Office issues a writ-
ten demand and if required copies or phonorecords are not received
within three months of receipt of the demand, the copyright owner
or owner of the exclusive right of publication in that work may be
subject to fines or other monetary liability.
d Notice
Compendium of U.S. Copyright Office Practices (3d ed. 2014)
§ 2202.2(A)
Although notice is optional for unpublished works, foreign works, or
Advantages to Using Notice on Post- works published on or after March 1, 1989, the U.S. Copyright Office
Berne Works strongly encourages copyright owners to use a notice for the follow-
ing reasons:
• It puts potential users on notice that copyright is claimed in the
work.
• In the case of a published work, a notice may prevent a defen-
dant in a copyright infringement action from a empting to limit
C. PROCEDURES 293
his or her liability for damages or injunctive relief based on an
innocent infringement defense.
• It identifies the copyright owner at the time the work was first
published for parties seeking permission to use the work.
• It identifies the year of first publication, which may be used
to determine the term of copyright protection in the case of an
anonymous work, a pseudonymous work, or a work made for
hire.
• It may prevent the work from becoming an orphan work by
identifying the copyright owner and/or specifying the term of
the copyright.
A notice for a work published before March 1, 1989 that has been § 2204.1
fixed in copies should include the following elements: Notice for Works Fixed in Copies
• The symbol © or the word “Copyright” or the abbreviation
“Copr.”;
• The year of first publication for the work; and
• The name of the copyright owner, or an abbreviation by which
the name can be recognized, or a generally known alternative
designation of the owner.
The elements of the notice should appear as a single continuous state-
ment containing the copyright symbol or the word “Copyright” or
the abbreviation “Copr.,” followed by the year of first publication,
followed by the name of the copyright owner.
Examples:
• © 1978 John Doe
• Copyright 1980 John Doe
• Copr. 1982 John Doe
3 Term
There is no way around it: copyright terms for older works are a mess
and require careful investigation. The details are beyond the scope
of this course, but you have been warned.
Copyright Act
(a) In General.— Copyright in a work created on or after January 1,
17 U.S.C. § 302
1978, subsists from its creation and, except as provided by the Duration of copyright: Works created
following subsections, endures for a term consisting of the life on or after January 1, 1978
of the author and 70 years after the author’s death.
(b) Joint Works.— In the case of a joint work prepared by two or
more authors who did not work for hire, the copyright endures
294 CHAPTER 4. COPYRIGHT
for a term consisting of the life of the last surviving author and
70 years after such last surviving author’s death.
(c) Anonymous Works, Pseudonymous Works, and Works Made
for Hire.— In the case of an anonymous work, a pseudonymous
work, or a work made for hire, the copyright endures for a term
of 95 years from the year of its first publication, or a term of 120
years from the year of its creation, whichever expires first. …
17 U.S.C. § 305
All terms of copyright provided by sections 302 through 304 run to
Duration of copyright: Terminal date the end of the calendar year in which they would otherwise expire.
537 U.S. 186 (2003)
Eldred v. Ashcroft
This case concerns the authority the Constitution assigns to Congress
to prescribe the duration of copyrights. In 1998, in the measure here
under inspection [the Sonny Bono Copyright Term Extension Act
(CTEA)], Congress enlarged the duration of copyrights by 20 years.
Petitioners are individuals and businesses whose products or services
build on copyrighted works that have gone into the public domain.
They seek a determination that the CTEA fails constitutional review
under both the Copyright Clause’s ”limited Times” prescription and
the First Amendment’s free speech guarantee.
Petitioners do not challenge the ”life-plus-70-years” timespan it-
self. ”Whether 50 years is enough, or 70 years too much,” they ac-
knowledge, ”is not a judgment meet for this Court.” Congress went
awry, petitioners maintain, not with respect to newly created works,
but in enlarging the term for published works with existing copy-
rights. The ”limited Tim[e]” in effect when a copyright is secured,
petitioners urge, becomes the constitutional boundary, a clear line
beyond the power of Congress to extend.
The Nation’s first copyright statute, enacted in 1790, provided a
federal copyright term of 14 years from the date of publication, renew-
able for an additional 14 years if the author survived the first term.
The 1790 Act’s renewable 14-year term applied to existing works (i.
e., works already published and works created but not yet published)
and future works alike. Congress expanded the federal copyright
term to 42 years in 1831 (28 years from publication, renewable for
an additional 14 years), and to 56 years in 1909 (28 years from publi-
cation, renewable for an additional 28 years). Both times, Congress
applied the new copyright term to existing and future works; to qual-
ify for the 1831 extension, an existing work had to be in its initial
copyright term at the time the Act became effective.
In 1976, Congress altered the method for computing federal copy-
right terms. For works created by identified natural persons, the 1976
C. PROCEDURES 295
Act provided that federal copyright protection would run from the
work’s creation, not – as in the 1790, 1831, and 1909 Acts – its publica-
tion; protection would last until 50 years after the author’s death. In
these respects, the 1976 Act aligned United States copyright terms
with the then-dominant international standard adopted under the
Berne Convention for the Protection of Literary and Artistic Works.
These new copyright terms, the 1976 Act instructed, governed all
works not published by its effective date of January 1, 1978, regard-
less of when the works were created. For published works with exist-
ing copyrights as of that date, the 1976 Act granted a copyright term
of 75 years from the date of publication, a 19-year increase over the
56-year term applicable under the 1909 Act.
The measure at issue here, the CTEA, installed the fourth major
duration extension of federal copyrights. Retaining the general struc-
ture of the 1976 Act, the CTEA enlarges the terms of all existing and
future copyrights by 20 years. For works created by identified natu-
ral persons, the term now lasts from creation until 70 years after the
author’s death. This standard harmonizes the baseline United States
copyright term with the term adopted by the European Union in 1993.
We address first the determination of the courts below that
Congress has authority under the Copyright Clause to extend the
terms of existing copyrights. The CTEA’s baseline term of life plus 70
years, petitioners concede, qualifies as a ”limited Tim[e]” as applied
to future copyrights. Petitioners contend, however, that existing
copyrights extended to endure for that same term are not ”limited.”
Petitioners’ argument essentially reads into the text of the Copyright
Clause the command that a time prescription, once set, becomes for-
ever ”fixed” or ”inalterable.” The word ”limited,” however, does not
convey a meaning so constricted.
Satisfied that the CTEA complies with the ”limited Times” pre-
scription, we turn now to whether it is a rational exercise of the leg-
islative authority conferred by the Copyright Clause. On that point,
we defer substantially to Congress. By extending the baseline United
States copyright term to life plus 70 years, Congress sought to ensure
that American authors would receive the same copyright protection
in Europe as their European counterparts. The CTEA may also pro-
vide greater incentive for American and other authors to create and
disseminate their work in the United States. In addition to interna-
tional concerns, Congress passed the CTEA in light of demographic,
economic, and technological changes and rationally credited projec-
tions that longer terms would encourage copyright holders to invest
in the restoration and public distribution of their works.
Petitioners separately argue that the CTEA is a content-neutral
regulation of speech that fails heightened judicial review under the
First Amendment. We reject petitioners’ plea for imposition of un-
296 CHAPTER 4. COPYRIGHT
commonly strict scrutiny on a copyright scheme that incorporates
its own speech-protective purposes and safeguards. In addition to
spurring the creation and publication of new expression, copyright
law contains built-in First Amendment accommodations. First, it dis-
tinguishes between ideas and expression and makes only the la er el-
igible for copyright protection. Second, the ”fair use” defense allows
the public to use not only facts and ideas contained in a copyrighted
work, but also expression itself in certain circumstances. When, as in
this case, Congress has not altered the traditional contours of copy-
right protection, further First Amendment scrutiny is unnecessary.
Klinger v. Conan Doyle Estate
755 F.3d 496 (7th Cir. 2014)
Arthur Conan Doyle published his first Sherlock Holmes story in
1887 and his last in 1927. There were 56 stories in all, plus 4 nov-
els. The final 10 stories were published between 1923 and 1927. As a
result of statutory extensions of copyright protection culminating in
the 1998 Copyright Term Extension Act, the American copyrights on
those final stories (copyrights owned by Doyle’s estate, the appellant)
will not expire until 95 years after the date of original publication –
between 2018 to 2022, depending on the original publication date of
each story. The copyrights on the other 46 stories and the 4 novels,
all being works published before 1923, have expired.
Leslie Klinger, the appellee in this case, co-edited an anthol-
ogy called A S S : S I S
H C (2011). Klinger’s anthology consisted of stories writ-
ten by modern authors but inspired by, and in most instances depict-
ing, the genius detective Sherlock Holmes and his awed sidekick Dr.
Watson. Klinger didn’t think he needed a license from the Doyle es-
tate to publish these stories, since the copyrights on most of the works
in the ”canon” had expired. But the estate told Random House, which
had agreed to publish Klinger’s book, that it would have to pay the
estate $5000 for a copyright license. Random House bowed to the
demand, obtained the license, and published the book.
[Klinger made arrangements to publish a sequel.] Instead of ob-
taining a license, Klinger sued the estate, seeking a declaratory judg-
ment that he is free to use material in the 50 Sherlock Holmes stories
and novels that are no longer under copyright, though he may use
nothing in the 10 stories still under copyright that has sufficient orig-
inality to be copyrightable.
The issue is whether copyright protection of a fictional character
can be extended beyond the expiration of the copyright on it because
the author altered the character in a subsequent work. In such a case,
the Doyle estate contends, the original character cannot lawfully be
copied without a license from the writer until the copyright on the
C. PROCEDURES 297
later work, in which that character appears in a different form, ex-
pires.
We cannot find any basis in statute or case law for extending a
copyright beyond its expiration. When a story falls into the public do-
main, story elements – including characters covered by the expired
copyright – become fair game for follow-on authors, as held in Sil- Silverman: 870 F.2d 40 (2d Cir.1989)
verman v. CBS Inc., a case much like this one. At issue was the right
to copy fictional characters (Amos and Andy) who had appeared in
copyrighted radio scripts. The copyrights covered the characters be-
cause they were original. As in this case the characters also appeared
in subsequent radio scripts that remained under copyright, though
the copyrights on the original scripts in which the characters had ap-
peared had expired. The court ruled that ”a copyright affords protec-
tion only for original works of authorship and, consequently, copy-
rights in derivative works secure protection only for the incremental
additions of originality contributed by the authors of the derivative
works.”
And so it is in our case. The ten Holmes-Watson stories in which
copyright persists are derivative from the earlier stories, so only origi-
nal elements added in the later stories remain protected. The freedom
to make new works based on public domain materials ends where the
resulting derivative work comes into conflict with a valid copyright,
as Klinger acknowledges. But there is no such conflict in this case.
Lacking any ground known to American law for asserting post-
expiration copyright protection of Holmes and Watson in pre-1923
stories and novels going back to 1887, the estate argues that creativ-
ity will be discouraged if we don’t allow such an extension. It may
take a long time for an author to perfect a character or other expres-
sive element that first appeared in his early work. If he loses copy-
right on the original character, his incentive to improve the character
in future work may be diminished because he’ll be competing with
copiers, such as the authors whom Klinger wishes to anthologize. Of
course this point has no application to the present case, Arthur Conan
Doyle having died 84 years ago. More important, extending copy-
right protection is a two-edged sword from the standpoint of induc-
ing creativity, as it would reduce the incentive of subsequent authors
to create derivative works (such as new versions of popular fictional
characters like Holmes and Watson) by shrinking the public domain.
For the longer the copyright term is, the less public-domain material
there will be and so the greater will be the cost of authorship, because
authors will have to obtain licenses from copyright holders for more
material – as illustrated by the estate’s demand in this case for a li-
cense fee from Pegasus.
Most copyrighted works include some, and often a great deal
of, public domain material – words, phrases, data, entire sentences,
298 CHAPTER 4. COPYRIGHT
quoted material, and so forth. The smaller the public domain, the
more work is involved in the creation of a new work. The defendant’s
proposed rule would also encourage authors to continue to write sto-
ries involving old characters in an effort to prolong copyright protec-
tion, rather than encouraging them to create stories with entirely new
characters. The effect would be to discourage creativity.
D Infringement: Similarity
This section starts with passages from three classic copyright cases
that set out the essential issues in assessing similarity. They are fol-
lowed by two more recent cases that work through the details in a
more concrete se ing.
Sheldon v. Metro-Goldwyn Pictures Corp.
81 F.2d 49 (2nd Cir. 1936)
(Learned Hand, J.)
The plaintiffs’ originality is necessarily limited to the variants they
introduced. Nevertheless, it is still true that their whole contribution
may not be protected; for the defendants were entitled to use, not only
all that had gone before, but even the plaintiffs’ contribution itself, if
they drew from it only the more general pa erns; that is, if they kept
clear of its “expression.”
True, much of the picture owes nothing to the play; some of it
is plainly drawn from the novel; but that is entirely immaterial; it is
enough that substantial parts were lifted; no plagiarist can excuse the
wrong by showing how much of his work he did not pirate.
Nichols v. Universal Pictures Corporation
45 F.2d 119 (2d Cir. 1930)
[The plaintiff’s play, Abie’s Irish Rose, and the defendant’s movie,
The Cohens and the Kellys, both concerned the tension between an
Irish family and a Jewish family when their children fall in love and
marry.]
(Learned Hand, J.) It is of course essential to any protection of literary property,
whether at common-law or under the statute, that the right cannot be
limited literally to the text, else a plagiarist would escape by imma-
terial variations. That has never been the law, but, as soon as literal
appropriation ceases to be the test, the whole ma er is necessarily at
large, so that, as was recently well said by a distinguished judge, the
decisions cannot help much in a new case. When plays are concerned,
the plagiarist may excise a separate scene or he may appropriate part
of the dialogue. Then the question is whether the part so taken is
”substantial.” It is the same question as arises in the case of any other
copyrighted work. But when the plagiarist does not take out a block
in situ, but an abstract of the whole, decision is more troublesome.
Upon any work, and especially upon a play, a great number of pat-
terns of increasing generality will fit equally well, as more and more
D. INFRINGEMENT: SIMILARITY 299
of the incident is left out. The last may perhaps be no more than the
most general statement of what the play is about, and at times might
consist only of its title; but there is a point in this series of abstractions
where they are no longer protected, since otherwise the playwright
could prevent the use of his ”ideas,” to which, apart from their ex-
pression, his property is never extended. Nobody has ever been able
to fix that boundary, and nobody ever can. In some cases the question
has been treated as though it were analogous to lifting a portion out
of the copyrighted work, but the analogy is not a good one, because,
though the skeleton is a part of the body, it pervades and supports the
whole. In such cases we are rather concerned with the line between
expression and what is expressed. As respects plays, the controversy
chiefly centers upon the characters and sequence of incident, these
being the substance.
But we do not doubt that two plays may correspond in plot closely
enough for infringement. How far that correspondence must go is
another ma er. Nor need we hold that the same may not be true as
to the characters, quite independently of the ”plot” proper, though,
as far as we know, such a case has never arisen. If Twelfth Night
were copyrighted, it is quite possible that a second comer might so
closely imitate Sir Toby Belch or Malvolio as to infringe, but it would
not be enough that for one of his characters he cast a riotous knight
who kept wassail to the discomfort of the household, or a vain and
foppish steward who became amorous of his mistress. These would
be no more than Shakespeare’s ”ideas” in the play, as li le capable of
monopoly as Einstein’s Doctrine of Relativity, or Darwin’s theory of
the Origin of Species. It follows that the less developed the characters,
the less they can be copyrighted; that is the penalty an author must
bear for marking them too indistinctly.
In the two plays at bar we think both as to incident and character,
the defendant took no more – assuming that it took anything at all
– than the law allowed. The stories are quite different. One is of a
religious zealot who insists upon his child’s marrying no one outside
his faith; opposed by another who is in this respect just like him, and
is his foil. Their difference in race is merely an obbligato to the main
theme, religion. They sink their differences through grandparental
pride and affection. In the other, zealotry is wholly absent; religion
does not even appear. It is true that the parents are hostile to each
other in part because they differ in race; but the marriage of their
son to a Jew does not apparently offend the Irish family at all, and it
exacerbates the existing animosity of the Jew, principally because he
has become rich, when he learns it. They are reconciled through the
honesty of the Jew and the generosity of the Irishman; the grandchild
has nothing whatever to do with it. The only ma er common to the
two is a quarrel between a Jewish and an Irish father, the marriage of
300 CHAPTER 4. COPYRIGHT
their children, the birth of grandchildren and a reconciliation.
If the defendant took so much from the plaintiff, it may well have
been because her amazing success seemed to prove that this was a
subject of enduring popularity. Even so, granting that the plaintiff’s
play was wholly original, and assuming that novelty is not essential
to a copyright, there is no monopoly in such a background. Though
the plaintiff discovered the vein, she could not keep it to herself; so
defined, the theme was too generalized an abstraction from what she
wrote. It was only a part of her ”ideas.”
Nor does she fare be er as to her characters. It is indeed scarcely
credible that she should not have been aware of those stock figures,
the low comedy Jew and Irishman. The defendant has not taken from
her more than their prototypes have contained for many decades. If
so, obviously so to generalize her copyright, would allow her to cover
what was not original with her. But we need not hold this as ma er
of fact, much as we might be justified. Even though we take it that
she devised her figures out of her brain de novo, still the defendant
was within its rights.
We assume that the plaintiff’s play is altogether original, even to
an extent that in fact it is hard to believe. We assume further that, so
far as it has been anticipated by earlier plays of which she knew noth-
ing, that fact is immaterial. Still, as we have already said, her copy-
right did not cover everything that might be drawn from her play;
its content went to some extent into the public domain. We have to
decide how much, and while we are as aware as any one that the line,
whereever it is drawn, will seem arbitrary, that is no excuse for not
drawing it; it is a question such as courts must answer in nearly all
cases. Whatever may be the difficulties a priori, we have no question
on which side of the line this case falls. A comedy based upon con-
flicts between Irish and Jews, into which the marriage of their chil-
dren enters, is no more susceptible of copyright than the outline of
Romeo and Juliet.
The plaintiff has prepared an elaborate analysis of the two plays,
showing a ”quadrangle” of the common characters, in which each is
represented by the emotions which he discovers. She presents the
resulting parallelism as proof of infringement, but the adjectives em-
ployed are so general as to be quite useless. Take for example the
a ribute of ”love” ascribed to both Jews. The plaintiff has depicted
her father as deeply a ached to his son, who is his hope and joy; not
so, the defendant, whose father’s conduct is throughout not actuated
by any affection for his daughter, and who is merely once overcome
for the moment by her distress when he has violently dismissed her
lover. ”Anger” covers emotions aroused by quite different occasions
in each case; so do ”anxiety,” ”despondency” and ”disgust.” It is un-
necessary to go through the catalogue for emotions are too much col-
D. INFRINGEMENT: SIMILARITY 301
ored by their causes to be a test when used so broadly. This is not the
proper approach to a solution; it must be more ingenuous, more like
that of a spectator, who would rely upon the complex of his impres-
sions of each character.
Arnstein v. Porter 154 F.2d 464 (2d Cir. 1946)
[The plaintiff, Ira B. Arnstein, alleged that Cole Porter copied numer-
ous songs from him. Arnstein was a serial and vexatious litigant;
among his allegations was that Porter “had stooges right along to fol-
low me, watch me, and live in the same apartment with me.”]
Assuming that adequate proof is made of copying, that is not
enough; for there can be “permissible copying,” copying which is
not illicit. Whether (if he copied) defendant unlawfully appropriated
presents, too, an issue of fact. The proper criterion on that issue is
not an analytic or other comparison of the respective musical compo-
sitions as they appear on paper or in the judgment of trained musi-
cians.32 The plaintiff’s legally protected interest is not, as such, his
reputation as a musician but his interest in the potential financial re-
turns from his compositions which derive from the lay public’s appro-
bation of his efforts. The question, therefore, is whether defendant
took from plaintiff’s works so much of what is pleasing to the ears of
lay listeners, who comprise the audience for whom such popular mu-
sic is composed, that defendant wrongfully appropriated something
which belongs to the plaintiff.
Surely, then, we have an issue of fact which a jury is peculiarly
fi ed to determine.35
We should not be taken as saying that a plagiarism case can never
arise in which absence of similarities is so patent that a summary
judgment for defendant would be correct. Thus suppose that Ravel’s
“Bolero” or Shostakovitch’s “Fifth Symphony” were alleged to in-
fringe “When Irish Eyes Are Smiling.” But this is not such a case.
For, after listening to the playing of the respective compositions, we
are, at this time, unable to conclude that the likenesses are so trifling
that, on the issue of misappropriation, a trial judge could legitimately
direct a verdict for defendant.
At the trial, plaintiff may play, or cause to be played, the pieces
in such manner that they may seem to a jury to be inexcusably alike,
in terms of the way in which lay listeners of such music would be
likely to react. The plaintiff may call witnesses whose testimony may
aid the jury in reaching its conclusion as to the responses of such au-
diences. Expert testimony of musicians may also be received, but it
32
Where plaintiff relies on similarities to prove copying (as distinguished from
improper appropriation) paper comparisons and the opinions of experts may aid
the court.
35
It would, accordingly, be proper to exclude tone-deaf persons from the jury.
302 CHAPTER 4. COPYRIGHT
will in no way be controlling on the issue of illicit copying, and should
be utilized only to assist in determining the reactions of lay auditors.
The impression made on the refined ears of musical experts or their
views as to the musical excellence of plaintiff’s or defendant’s works
are u erly immaterial on the issue of misappropriation; for the views
of such persons are caviar to the general – and plaintiff’s and defen-
dant’s compositions are not caviar.
Children’s Book Problem
You are law clerk to a judge hearing a copyright infringement case.
The plaintiff’s work is a children’s book; the allegedly infringing
work is a G-rated animated movie. The plaintiff has offered an expert
witness who has made a chart of 83 alleged similarities; the defendant
has offered an expert witness who will testify that the book primarily
appeals to “verbally oriented” children aged 9-11, while the movie
primarily apeals to “visually orented” children aged 6-8.
Will you restrict the jury pool to children? To parents? What spe-
cial instructions, if any, will you give the jury regarding its task of
assessing similarity? Will you allow the plaintiff’s expert to testify?
The defendant’s? If you allow either of them to testify, what will you
instruct the jury regarding the relevance of the opinions they offer?
How will you allow the parties to present the works to the jury dur-
ing the trial? Will you allow the jury to have copies of the book and
a DVD of the movie with them during deliberations?
Gottlieb Development LLC v. Paramount Pictures
590 F. Supp. 2d 625 (S.D.N.Y. 2008)
In the motion picture ”What Women Want,” released by defendant
Paramount Pictures Corporation in 2000, Mel Gibson plays an ad-
vertising executive who acquires the ability to ”hear” what women
are thinking. In one scene, Gibson and his co-star Helen Hunt brain-
storm with other employees to develop ideas for marketing certain
consumer products to women. At various points during the scene, a
pinball machine – the ”Silver Slugger” – appears in the background.
The Silver Slugger is distributed by plaintiff Go lieb Development
LLC, and Paramount used the pinball machine in the scene without
Go lieb’s permission.
The Silver Slugger features three original designs (the ”Designs”):
(1) a depiction of a baseball diamond on the backglass, which is the
upright back portion of the pinball machine; (2) another baseball di-
amond on the playfield, which is the playing surface of the machine;
and (3) the layout of the parts of the playfield. The Designs are copy-
righted, and Go lieb has owned the copyrights since 1998.
The legal maxim ”de minimis non curat lex” – ”the law does not
concern itself with trifles” – applies in the copyright context. For ex-
Still from What Women Want (2000) ample, if the copying is de minimis and so ”trivial” as to fall below the
D. INFRINGEMENT: SIMILARITY 303
quantitative threshold of substantial similarity, the copying is not ac-
tionable.
There is no plausible claim of copyright infringement here. Al-
though Go lieb has sufficiently pled unauthorized copying of its De-
signs, the use of the Silver Slugger was de minimis as a ma er of law.
Hence, no reasonable juror could find substantial similarity in the le-
gal sense, and thus the copying is not actionable.
The scene in question lasts only three-and-a-half minutes, and the
Silver Slugger appears in the scene sporadically, for no more than
a few seconds at a time. More importantly, the pinball machine is
always in the background; it is never seen in the foreground. It never
appears by itself or in a close-up. It is never mentioned and plays no
role in the plot. It is almost always partially obscured (by Gibson and
pieces of furniture), and is fully visible for only a few seconds during
the entire scene. The Designs (on the backglass and playfield of the
pinball machine) are never fully visible and are either out of focus
or obscured. Indeed, an average observer would not recognize the
Designs as anything other than generic designs in a pinball machine.
Go lieb cites to Ringgold v. Black Entertainment Television, Inc. in Ringgold: 126 F.3d 70 (2d Cir. 1997)
support of its claim, but the facts of that case are inapposite. Ringgold
involved the unauthorized use of a copyrighted poster in an episode
of a HBO television series. The poster was shown, in whole or in part,
nine times during a five-minute scene at the end of the episode. The
poster (or a portion thereof) was seen for 1.86 to 4.16 seconds at a time,
for a total of 26.75 seconds. In some instances, the poster appeared at
the center of the screen. As the Second Circuit held, the poster was
”plainly observable.”
More importantly, there was a qualitative connection between the
poster and the show. The poster included a painting depicting a Sun-
day School picnic held by the Freedom Baptist Church in Atlanta,
Georgia, in 1909, and was intended to convey ”aspects of the African-
American experience in the early 1900s.” The show was ”ROC,” a tele-
vision ”sitcom” series about a middle-class African-American family
living in Baltimore, and the scene in question was of a gathering in
a church hall with a minister. The Second Circuit noted that HBO’s
production staff ”evidently thought that the poster was well suited
as a set decoration for the African-American church scene of a ROC
episode.” The Second Circuit concluded:
From the standpoint of a quantitative assessment of the
segments, the principal four-to-five second segment in
which almost all of the poster is clearly visible, albeit in
less than perfect focus, reenforced by the briefer segments
in which smaller portions are visible, all totaling 26 to 27
seconds, are not de minimis copying. The painting compo- Still from ROC (1992)
304 CHAPTER 4. COPYRIGHT
nent of the poster is recognizable as a painting, and with
sufficient observable detail for the ”average lay observer”
to discern African-Americans in Ringold’s colorful, vir-
tually two-dimensional style. The de minimis threshold
of actionable copying of protected expression has been
crossed.
In the present case, the ”average lay observer” would not be able to
discern any distinctive elements of Go lieb’s Designs – the baseball
players clad in stylized, futuristic gear. The best that the average lay
observer could make out in the background is a typical home-plate
layout with baseball players arrayed around it. The unique expres-
sive element of the Designs is not discernable in those brief moments
when the backglass is visible. The only other protected element of
the backglass is the ”Silver Slugger” logo in the upper left hand cor-
ner, which is glimpsed fleetingly, and in poor focus, during the scene.
The camera sweeps past the logo without dwelling or focusing on it.
The average lay observer would not discern the stylized aspects of
the logo a ributable to Go lieb based on the way the logo appears in
the background of the scene.
Moreover, while use of a copyrighted work in the background
may still be a basis for an infringement claim, where the use is de min-
imis, the copying will not be actionable, even where the work was cho-
sen to be in the background for some thematic relevance. As the Sec-
ond Circuit explained in Ringgold, ”in some circumstances, a visual
work, though selected by production staff for thematic relevance, or
at least for its decorative value, might ultimately be filmed at such dis-
tance and so out of focus that a typical program viewer would not dis-
cern any decorative effect that the work of art contributes to the set.”
Here, undoubtedly the Silver Slugger was chosen by the production
staff because it fit in with the ”sporty” theme of the background in the
scene; but the Silver Slugger was one of numerous background items,
and it was filmed in such a manner and appears so fleetingly that I
conclude there is no plausible claim for copyright infringement here.
Accordingly, Go lieb’s copyright infringement claim is dismissed.
Boisson v. Banian, Ltd.
273 F.3d 262 (2d Cir. 2001)
Plaintiffs Judi Boisson and her wholly-owned company, American
Country Quilts and Linens, Inc., d/b/a Judi Boisson American Coun-
try, brought suit alleging that defendants Vijay Rao and his wholly-
owned company Banian Ltd., illegally copied two quilt designs.
B
Judi Boisson has been in the quilt trade for over 20 years, beginning
her career by selling antique American quilts – in particular, Amish
D. INFRINGEMENT: SIMILARITY 305
quilts – she purchased in various states throughout the country. By
the late 1980s, having difficulty finding antique quilts, she decided
to design and manufacture her own and began selling them in 1991
through her company. Boisson published catalogs in 1993 and 1996 to
advertise and sell her quilts. Her works are also sold to linen, gift, an-
tique, and children’s stores and high-end catalog companies. Various
home furnishing magazines have published articles featuring Bois-
son and her quilts.
In 1991 plaintiff designed and produced two alphabet quilts enti-
tled ”School Days I” and ”School Days II.” Although we later describe
the quilts in greater detail, we note each consists of square blocks
containing the capital le ers of the alphabet, displayed in order. The
blocks are set in horizontal rows and vertical columns, with the last
row filled by blocks containing various pictures or icons. The le ers
and blocks are made up of different colors, set off by a white border
and colored edging.
Defendant Vijay Rao is the president and sole shareholder of de-
fendant Banian Ltd., incorporated in November 1991. Rao is an elec-
trical engineer in the telecommunications industry who became inter-
ested in selling quilts in February 1992. To that end, he imported from
India each of the three alphabet quilts at issue in this case. He sold
them through boutique stores and catalog companies. The first quilt
he ordered was ”ABC Green Version I,” which he had been shown by
a third party. Defendants have not sold this pa ern since 1993. ”ABC
Green Version II” was ordered in September 1994, based upon mod-
ifications to ”ABC Green Version I” requested by Rao. Defendants
reordered this quilt once in April 1995, and then stopped selling it in
March 1997. Regarding ”ABC Navy,” Rao testified that he designed
the quilt himself based upon ”ABC Green Version II” and imported
finished copies in November 1995. Defendants voluntarily withdrew
their ”ABC Navy” quilts from the market in November 1998 follow-
ing the initiation of this litigation.
IV. S S :O O .M
D O
Generally, an allegedly infringing work is considered substantially
similar to a copyrighted work if ”the ordinary observer, unless he
set out to detect the disparities, would be disposed to overlook them,
and regard their aesthetic appeal as the same.” Folio Impressions Inc. Folio Impressions: 937 F.2d 759 (2d Cir.
v. Byer California. Yet in Folio Impressions, the evidence at trial showed 1991)
the plaintiff designer had copied the background for its fabric from a
public domain document and ”contributed nothing, not even a triv-
ial variation.” Thus, part of the plaintiff’s fabric was not original and
therefore not protectible. We articulated the need for an ordinary ob-
server to be ”more discerning” in such circumstances.
306 CHAPTER 4. COPYRIGHT
The ordinary observer would compare the finished prod-
uct that the fabric designs were intended to grace
(women’s dresses), and would be inclined to view the
entire dress – consisting of protectible and unprotectible
elements – as one whole. Here, since only some of the
design enjoys copyright protection, the observer’s inspec-
tion must be more discerning.
We reiterated that a ”more refined analysis” is required where a plain-
tiff’s work is not ”wholly original,” but rather incorporates elements
Key Publications: 945 F.2d 509 (2d Cir. from the public domain. Key Publications, Inc. v. Chinatown Today
1991) Publishing Enterprises, Inc.. In these instances, ”what must be shown
is substantial similarity between those elements, and only those ele-
ments, that provide copyrightability to the allegedly infringed com-
pilation.” In contrast, where the plaintiff’s work contains no material
imported from the public domain, the ”more discerning” test is un-
necessary. In the case at hand, because the alphabet was taken from
the public domain, we must apply the ”more discerning” ordinary
observer test.
In applying this test, a court is not to dissect the works at issue into
separate components and compare only the copyrightable elements.
To do so would be to take the ”more discerning” test to an extreme,
which would result in almost nothing being copyrightable because
original works broken down into their composite parts would usu-
ally be li le more than basic unprotectible elements like le ers, colors
and symbols. This outcome – affording no copyright protection to an
original compilation of unprotectible elements – would be contrary
to the Supreme Court’s holding in Feist.
Although the ”more discerning” test has not always been identi-
fied by name in our case law, we have nevertheless always recognized
that the test is guided by comparing the ”total concept and feel” of
Streetwise Maps: 159 F.3d 739 (2d Cir. the contested works. For example, in Streetwise Maps, Inc. v. Van-
1998) Dam, Inc. we found no infringement – not because the plaintiff’s map
consisted of public domain facts such as street locations, landmasses,
bodies of water and landmarks, as well as color – but rather ”because
the total concept and overall feel created by the two works may not
be said to be substantially similar.”
In the present case, while use of the alphabet may not provide
a basis for infringement, we must compare defendants’ quilts and
plaintiffs’ quilts on the basis of the arrangement and shapes of the
le ers, the colors chosen to represent the le ers and other parts of
the quilts, the quilting pa erns, the particular icons chosen and their
placement. Our analysis of the ”total concept and feel” of these works
Hamil America: 193 F.3d 92 (2d Cir. should be instructed by common sense. Cf. Hamil America, Inc. v.
1999) GFI (noting that the ordinary observer test involves an examination
D. INFRINGEMENT: SIMILARITY 307
of ”total concept and feel,” which in turn can be guided by ”good
eyes and common sense”).
V. C
A. ”School Days I” v. ”ABC Green” Versions
”School Days I” consists of six horizontal rows, each row containing
five blocks, with a capital le er or an icon in each block. The group-
ings of blocks in each row are as follows: A-E; F-J; K-O; P-T; U-Y; and
Z with four icons following in the last row. The four icons are a cat,
a house, a single-starred American flag and a basket. ”ABC Green
Version I” displays the capital le ers of the alphabet in the same for-
mation. The four icons in the last row are a cow jumping over the
moon, a sailboat, a bear and a star. ”ABC Green Version II” is iden-
tical to ”ABC Green Version I,” except that the picture of the cow
jumping over the moon is somewhat altered, the bear is replaced by
a teddy bear si ing up and wearing a vest that looks like a single-
starred American flag, and the star in the last block is represented in
a different color.
School Days I
All three quilts use a combination of contrasting solid color fabrics
or a combination of solid and polka-do ed fabrics to represent the
blocks and le ers. The following similarities are observed in plain-
tiffs’ and defendants’ designs: ”A” is dark blue on a light blue back-
ground; ”B” is red on a white background; ”D” is made of polka-dot
fabric on a light blue background; ”F” on plaintiffs’ ”School Days I”
is white on a pink background, while the ”F” on defendants’ ”ABC
Green” versions is pink on a white background; ”G” has a green back-
ground; ”H” and ”L” are each a shade of blue on a white background;
”M” in each quilt is a shade of yellow on a white background. ”N” is
green on a white background; ”O” is blue on a polka-dot background;
”P” is polka-dot fabric on a yellow background; ”Q” is brown on a
light background; ”R” is pink on a gray/purple background. ”S” is
white on a red background; ”T” is blue on a white background; ”U”
is gray on a white background; ”V” is white on a gray background;
”W” is pink on a white background; ”X” is purple in all quilts, albeit
in different shades, on a light background; ”Y” is a shade of yellow
on the same light background; and ”Z” is navy blue or black, in all
the quilts.
Boisson also testified that defendants utilized the same unique
shapes as she had given to the le ers ”J,” ”M,” ”N,” ”P,” ”R” and
”W.” With respect to the quilting pa erns, ”School Days I” and the
”ABC Green” versions feature diamond-shaped quilting within the
blocks and a ”wavy” pa ern in the plain white border that surrounds
the blocks. The quilts are also edged with a 3/8” green binding.
From this enormous amount of sameness, we think defendants’ ABC Green
308 CHAPTER 4. COPYRIGHT
quilts sufficiently similar to plaintiffs’ design as to demonstrate il-
legal copying. In particular, the overwhelming similarities in color
choices lean toward a finding of infringement. Although the icons
chosen for each quilt are different and defendants added a green rect-
angular border around their rows of blocks, these differences are not
sufficient to cause even the ”more discerning” observer to think the
quilts are other than substantially similar insofar as the protectible el-
ements of plaintiffs’ quilt are concerned. Moreover, the substitution
in ”ABC Green Version II” of the teddy bear wearing a flag vest as
the third icon causes this version of defendants’ quilt to look even
more like plaintiffs’ quilt that uses a single-starred American flag as
its third icon. Consequently, both of defendants’ ”ABC Green” quilts
infringed plaintiffs’ copyright on its ”School Days I” quilt.
B. ”School Days I” v. ”ABC Navy”
We agree with the district court, however, that Rao did not infringe
on plaintiffs’ design in ”School Days I” when he created ”ABC Navy.”
While both quilts utilize an arrangement of six horizontal rows of five
blocks each, ”ABC Navy” does not have its four icons in the last row.
Rather, the teddy bear with the flag vest is placed after the ”A” in
the first row, the cow jumping over the moon is placed after the ”L”
in the third row, the star is placed after the ”S” in the fifth row, and
the sailboat is placed after the ”Z” in the last row. Further, the colors
chosen to represent the le ers and the blocks in ”ABC Navy” are, for
the most part, entirely different from ”School Days I.” Defendants
dropped the use of polka-dot fabric, and plaintiffs did not even of-
fer a color comparison in their proposed findings of fact to the dis-
trict court, as they had with each of the ”ABC Green” versions. The
ABC Navy quilting pa ern in the plain white border is changed to a ”zig-zag”
in ”ABC Navy,” as opposed to plaintiffs’ ”wavy” design. Finally, al-
though defendants use a binding around the edge of their quilt, in
this instance it is blue instead of green.
Looking at these quilts side-by-side, we conclude they are not sub-
stantially similar to one another. Just as we rejected defendants’ ear-
lier argument and held that what few differences existed between
”School Days I” and the ”ABC Green” quilts could not preclude a find-
ing of infringement, plaintiffs’ emphasis on the similarity in style be-
tween some of the le ers between ”School Days I” and ”ABC Navy”
cannot support a finding of infringement. Because no observer, let
alone a ”more discerning” observer, would likely find the two works
to be substantially similar, no copyright violation could properly be
found.
Based on Steinberg v. Columbia Pictures
Industries, Inc., 663 F. Supp. 706 (S.D.N.Y. New Yorker Problem
1987)
E. INFRINGEMENT: PROHIBITED CONDUCT 309
Below you will find a cover from the New Yorker and a poster for
the movie Moscow on the Hudson. The copyright owners of the for-
mer have sued the producers of the la er for copyright infringement.
You are the judge assigned to the case, which you have conducted
as a bench trial by the consent of the parties. Write the portion of
your opinion finding substantial similarity or the lack thereof. Be as
specific as you can.

E Infringement: Prohibited Conduct
1 Proof of Copying
Three Boys Music Corp. v. Bolton
212 F.3d 477 (9th Cir. 2000)
In 1994, a jury found that Michael Bolton’s 1991 pop hit, ”Love Is a
Wonderful Thing,” infringed on the copyright of a 1964 Isley Brothers’
song of the same name. The district court denied Bolton’s motion
for a new trial and affirmed the jury’s award of $5.4 million. Bolton,
his co-author, Andrew Goldmark, and their record companies (”Sony
Music”) appeal.
I. B
The Isley Brothers, one of this country’s most well-known rhythm
and blues groups, have been inducted into the Rock and Roll Hall
of Fame. They helped define the soul sound of the 1960s with songs
such as ”Shout,” ”Twist and Shout,” and ”This Old Heart of Mine,”
and they mastered the funky beats of the 1970s with songs such as
”Who’s That Lady,” ”Fight the Power,” and ”It’s Your Thing.” In 1964,
the Isley Brothers wrote and recorded ”Love is a Wonderful Thing”
310 CHAPTER 4. COPYRIGHT
for United Artists. The Isley Brothers received a copyright for ”Love
is a Wonderful Thing” from the Register of Copyrights on February
6, 1964.
Hoping to benefit from the Isley Brothers’ Motown success,
United Artists released ”Love is a Wonderful Thing” in 1966. The
song was not released on an album, only on a 45-record as a single.
Several industry publications predicted that ”Love is a Wonderful
Thing” would be a hit—”Cash Box” on August 27, 1966, ”Gavin Re-
port” on August 26, 1966, and ”Billboard” on September 10, 1966. On
September 17, 1966, Billboard listed ”Love is a Wonderful Thing” at
number 110 in a chart titled ”Bubbling Under the Hot 100.” The song
was never listed on any other Top 100 charts. In 1991, the Isley Broth-
ers’ ”Love is a Wonderful Thing” was released on compact disc.
Michael Bolton is a singer/songwriter who gained popularity in
"There was nothing wrong with [the the late 1980s and early 1990s by reviving the soul sound of the 1960s.
name 'Michael Bolton'] until I was Bolton has orchestrated this soul-music revival in part by covering
about twelve years old and that no-
old songs such as Percy Sledge’s ”When a Man Love a Woman” and
talent ass clown became famous and
started winning Grammys." Otis Redding’s ”(Si in’ on the) Dock of the Bay.” Bolton also has writ-
—Office Space (1999) ten his own hit songs. In early 1990, Bolton and Goldmark wrote a
song called ”Love Is a Wonderful Thing.” Bolton released it as a sin-
gle in April 1991, and as part of Bolton’s album, ”Time, Love and
Tenderness.” Bolton’s ”Love Is a Wonderful Thing” finished 1991 at
number 49 on Billboard’s year-end pop chart.
On February 24, 1992, Three Boys Music Corporation filed a copy-
right infringement action.
II. D
Proof of copyright infringement is often highly circumstantial, par-
ticularly in cases involving music. A copyright plaintiff must prove
(1) ownership of the copyright; and (2) infringement—that the defen-
"'Substantial similarity,' while said to dant copied protected elements of the plaintiff’s work. Absent direct
be required for indirect proof of copy- evidence of copying, proof of infringement involves fact-based show-
ing, is actually required only after copy-
ings that the defendant had access to the plaintiff’s work and that the
ing has been established to show that
enough copying has taken place. A sim-
two works are substantially similar. Given the difficulty of proving
ilarity, which may or may not be sub- access and substantial similarity, appellate courts have been reluctant
stantial, is probative of copying if, by to reverse jury verdicts in music cases.
definition, it is one that under all the
circumstances justifies an inference of A. Access
copying. In order to emphasize the
function of such similarity and avoid Proof of access requires an opportunity to view or to copy plain-
the confusion of double usage, this Ar- tiff’s work. This is often described as providing a ”reasonable op-
ticle suggests use of the term probative portunity” or ”reasonable possibility” of viewing the plaintiff’s work.
similarity in place of substantial similar-
ity in this context." Alan Latman, "Pro-
We have defined reasonable access as ”more than a bare possibility.”
bative Similarity" as Proof of Copying: To- Nimmer has elaborated on our definition: ”Of course, reasonable
ward Dispelling Some Myths in Copyright opportunity as here used, does not encompass any bare possibility
Infringement in the sense that anything is possible. Access may not be inferred
E. INFRINGEMENT: PROHIBITED CONDUCT 311
through mere speculation or conjecture. There must be a reasonable
possibility of viewing the plaintiff’s work—not a bare possibility.”
”At times, distinguishing a ‘bare’ possibility from a ‘reasonable’ pos- Nimmer § 13.02[A]
sibility will present a close question.”
Circumstantial evidence of reasonable access is proven in one of
two ways: (1) a particular chain of events is established between
the plaintiff’s work and the defendant’s access to that work (such
as through dealings with a publisher or record company), or (2) the
plaintiff’s work has been widely disseminated. Goldstein remarks
that in music cases the ”typically more successful route to proving
access requires the plaintiff to show that its work was widely dissemi-
nated through sales of sheet music, records, and radio performances.”
. Nimmer, however, cautioned that ”[c]oncrete cases will pose dif- Goldstein § 8.3.1.1
ficult judgments as to where along the access spectrum a given ex-
ploitation falls.” Nimmer§ 13.02[A]
Proof of widespread dissemination is sometimes accompanied by
a theory that copyright infringement of a popular song was subcon-
scious. Subconscious copying has been accepted since Learned Hand
embraced it in a 1924 music infringement case: ”Everything registers
somewhere in our memories, and no one can tell what may evoke
it. Once it appears that another has in fact used the copyright as the
source of this production, he has invaded the author’s rights. It is
no excuse that in so doing his memory has played him a trick.” Fred Fred Fisher: 298 F. 145 (S.D.N.Y. 1924)
Fisher, Inc. v. Dillingham. In Fred Fisher, Judge Hand found that the
similarities between the songs ”amount[ed] to identity” and that the
infringement had occurred ”probably unconsciously, what he had
certainly often heard only a short time before.”
In modern cases, however, the theory of subconscious copying
has been applied to songs that are more remote in time. ABKCO Mu- ABKCO: 722 F.2d 988 (2d Cir. 1983)
sic, Inc. v. Harrisongs Music, Ltd. is the most prominent example.
In ABKCO, the Second Circuit affirmed a jury’s verdict that former
Beatle George Harrison, in writing the song ”My Sweet Lord,” sub-
consciously copied The Chiffons’ ”He’s So Fine,” which was released
six years earlier. Harrison admi ed hearing ”He’s So Fine” in 1963,
when it was number one on the Billboard charts in the United States
for five weeks and one of the top 30 hits in England for seven weeks.
The court found: ”the evidence, standing alone, by no means compels
the conclusion that there was access ... it does not compel the conclu-
sion that there was not.” In ABKCO, however, the court found that
”the similarity was so striking and where access was found, the re-
moteness of that access provides no basis for reversal.” Furthermore,
the mere lapse of a considerable period of time between the moment
of access and the creation of defendant’s work does not preclude a
finding of copying.
The Isley Brothers’ access argument was based on a theory of
312 CHAPTER 4. COPYRIGHT
widespread dissemination and subconscious copying. They pre-
sented evidence supporting four principal ways that Bolton and
Goldmark could have had access to the Isley Brothers’ ”Love is a
Wonderful Thing”:
(1) Bolton grew up listening to groups such as the Isley Brothers
and singing their songs. In 1966, Bolton and Goldmark were 13 and
15, respectively, growing up in Connecticut. Bolton testified that he
had been listening to rhythm and blues music by black singers since
he was 10 or 11, ”appreciated a lot of Black singers,” and as a youth
was the lead singer in a band that performed ”covers” of popular
songs by black singers. Bolton also testified that his brother had a
”pre y good record collection.”
(2) Three disk jockeys testified that the Isley Brothers’ song was
widely disseminated on radio and television stations where Bolton
and Goldmark grew up. First, Jerry Blavi testified that the Isley
Brothers’ ”Love is a Wonderful Thing” was played five or six times
during a 13-week period on the television show, ”The Discophonic
Scene,” which he said aired in Philadelphia, New York, and Hartford-
New Haven. Blavi also testified that he played the song two to three
times a week as a disk jockey in Philadelphia and that the station is
still playing the song today. Second, Earl Rodney Jones testified that
he played the song a minimum of four times a day during an eight to
14 to 24 week period on WVON radio in Chicago, and that the station
is still playing the song today. Finally, Jerry Bledsoe testified that he
played the song on WUFO radio in Buffalo, and WWRL radio in New
York was playing the song in New York in 1967 when he went there.
Bledsoe also testified that he played the song twice on a television
show, ”Soul,” which aired in New York and probably in New Haven,
Connecticut, where Bolton lived.
(3) Bolton confessed to being a huge fan of the Isley Brothers and
a collector of their music. Ronald Isley testified that when Bolton saw
Isley at the Lou Rawls United Negro College Fund Benefit concert in
1988, Bolton said, ”I know this guy. I go back with him. I have all
his stuff.” Angela Winbush, Isley’s wife, testified about that meeting
that Bolton said, ”This man needs no introduction. I know everything
he’s done.”
(4) Bolton wondered if he and Goldmark were copying a song by
another famous soul singer. Bolton produced a work tape a empting
to show that he and Goldmark independently created their version of
”Love Is a Wonderful Thing.” On that tape of their recording session,
Bolton asked Goldmark if the song they were composing was Marvin
Gaye’s ”Some Kind of Wonderful.” The district court, in affirming the
jury’s verdict, wrote about Bolton’s Marvin Gaye remark:
This statement suggests that Bolton was contemplating
E. INFRINGEMENT: PROHIBITED CONDUCT 313
the possibility that the work he and Goldmark were cre-
ating, or at least a portion of it, belonged to someone else,
but that Bolton wasn’t sure who it belonged to. A reason-
able jury can infer that Bolton mistakenly a ributed the
work to Marvin Gaye, when in reality Bolton was subcon-
sciously drawing on Plaintiff’s song.
The appellants contend that the Isley Brothers’ theory of access
amounts to a ”twenty-five-years-after-the-fact-subconscious copying
claim.” Indeed, this is a more a enuated case of reasonable access and
subconscious copying than ABKCO. In this case, the appellants never
admi ed hearing the Isley Brothers’ ”Love is a Wonderful Thing.”
That song never topped the Billboard charts or even made the top
100 for a single week. The song was not released on an album or com-
pact disc until 1991, a year after Bolton and Goldmark wrote their
song. Nor did the Isley Brothers ever claim that Bolton’s and Gold-
mark’s song is so ”strikingly similar” to the Isley Brothers’ that proof
of access is presumed and need not be proven.
Despite the weaknesses of the Isley Brothers’ theory of reasonable
access, the appellants had a full opportunity to present their case to
the jury. Three rhythm and blues experts (including legendary Mo-
town songwriter Lamont Dozier of Holland-Dozier-Holland fame)
testified that they never heard of the Isley Brothers’ ”Love is a Won-
derful Thing.” Furthermore, Bolton produced copies of ”TV Guide”
from 1966 suggesting that the television shows playing the song
never aired in Connecticut. Bolton also pointed out that 129 songs
called ”Love is a Wonderful Thing” are registered with the Copyright
Office, 85 of them before 1964.
The Isley Brothers’ reasonable access arguments are not without
merit. Teenagers are generally avid music listeners. It is entirely plau-
sible that two Connecticut teenagers obsessed with rhythm and blues
music could remember an Isley Brothers’ song that was played on
the radio and television for a few weeks, and subconsciously copy
it twenty years later. Furthermore, Ronald Isley testified that when
they met, Bolton said, ”I have all his stuff.” Finally, as the district
court pointed out, Bolton’s remark about Marvin Gaye and ”Some
Kind of Wonderful” indicates that Bolton believed he may have been
copying someone else’s song.
B. Substantial Similarity
Under our case law, substantial similarity is inextricably linked to the
issue of access. In what is known as the ”inverse ratio rule,” we re-
quire a lower standard of proof of substantial similarity when a high
degree of access is shown. Furthermore, in the absence of any proof
of access, a copyright plaintiff can still make out a case of infringe-
314 CHAPTER 4. COPYRIGHT
ment by showing that the songs were ”strikingly similar.”
1. Evidence of Substantial Similarity
Bolton and Goldmark argue that there was insufficient evidence of
substantial similarity because the Isley Brothers’ expert musicologist,
Dr. Gerald Eskelin, failed to show that there was copying of a com-
bination of unprotectible elements. On the contrary, Eskelin testi-
fied that the two songs shared a combination of five unprotectible
elements: (1) the title hook phrase (including the lyric, rhythm, and
pitch); (2) the shifted cadence; (3) the instrumental figures; (4) the
verse/chorus relationship; and (5) the fade ending. Although the ap-
pellants presented testimony from their own expert musicologist, An-
thony Ricigliano, he conceded that there were similarities between
the two songs and that he had not found the combination of unpro-
tectible elements in the Isley Brothers’ song ”anywhere in the prior
art.” The jury heard testimony from both of these experts and ”found
infringement based on a unique compilation of those elements.” We
refuse to interfere with the jury’s credibility determination, nor do
we find that the jury’s finding of substantial similarity was clearly
erroneous.
2. Independent Creation
Bolton and Goldmark also contend that their witnesses rebu ed the
Isley Brothers’ prima facie case of copyright infringement with evi-
dence of independent creation. By establishing reasonable access and
substantial similarity, a copyright plaintiff creates a presumption of
copying. The burden shifts to the defendant to rebut that presump-
tion through proof of independent creation.
The appellants’ case of independent creation hinges on three fac-
tors: the work tape demonstrating how Bolton and Goldmark created
their song, Bolton and Goldmark’s history of songwriting, and testi-
mony that their arranger, Walter Afanasieff, contributed two of five
unprotectible elements that they allegedly copied. The jury, however,
heard the testimony of Bolton, Goldmark, Afanasieff, and Ricigliano
about independent creation. The work tape revealed evidence that
Bolton may have subconsciously copied a song that he believed to
be wri en by Marvin Gaye. Bolton and Goldmark’s history of song-
writing presents no direct evidence about this case. And Afanasieff’s
contributions to Bolton and Goldmark’s song were described by the
appellants’ own expert as ”very common.” Once again, we refuse
to disturb the jury’s determination about independent creation. The
substantial evidence of copying based on access and substantial sim-
ilarity was such that a reasonable juror could reject this defense.
3. Inverse-Ratio Rule
E. INFRINGEMENT: PROHIBITED CONDUCT 315
Although this may be a weak case of access and a circumstantial case
of substantial similarity, neither issue warrants reversal of the jury’s
verdict. An amicus brief on behalf of the recording and motion pic-
ture industries warns against watering down the requirements for
musical copyright infringement. This case presents no such danger.
The Ninth Circuit’s inverse-ratio rule requires a lesser showing of sub-
stantial similarity if there is a strong showing of access. In this case,
there was a weak showing of access. We have never held, however,
that the inverse ratio rule says a weak showing of access requires a
stronger showing of substantial similarity. Nor are we redefining the
test of substantial similarity here; we merely find that there was sub-
stantial evidence from which the jury could find access and substan-
tial similarity in this case.
Bee Gees Problem
Based on Selle v. Gibb, 741 F.2d 896 (7th
The plaintiff, Ronald Selle, an amateur musician, recorded a demo Cir. 1984)
tape of his song “Let It End.” He performed the song several times
with his band in the Chicago area at small local clubs. He sent casse e
tapes of the recording to eleven music companies. Eight returned it
to him; three never responded. Sometime later, he heard what he
thought was his song playing on the radio; it turned out to be “How
Deep Is Your Love” by the Bee Gees, which was used on the sound-
track to Saturday Night Fever. Selle sued the Bee Gees and their record
company, Polygram.
The Bee Gees were three brothers: Maurice, Robin, and Barry
Gibb. They did not read or write music; instead, they composed their
songs by playing together in a studio, refining their ideas. In discov-
ery and at trial, they testified that they created “How Deep Is Your
Love” during recording sessions at the Chateau d’Herouville near
Pontoise, a remote village in France about 25 miles northwest of Paris.
Barry Gibb and Blue Weaver, a keyboard player at the sessions, tes-
tified that Weaver played a “beautiful chord” at Barry’s request, and
the two of them refined the idea into a rough “work tape,” which was
produced in evidence.
Selle provided an musicological analysis of the two songs from Ar-
rand Parsons, a professor of music at Northwestern University. Par-
sons testified that the first eight bars of each song (Theme A) have
twenty-four notes out of thirty-four and forty notes in plaintiff’s and
defendants’ compositions, respectively, that are identical in pitch and
symmetrical positions. Out of thirty-five rhythmic impulses in plain-
tiff’s composition and forty in defendants’, thirty are identical. In
the last four bars of both songs (Theme B), fourteen notes in each are
identical in pitch. Of the fourteen rhythmic impulses in Theme B of
both songs, eleven are identical. Finally, both Theme A (the first eight
bars) and Theme B (the last four bars) occur in the same position in
316 CHAPTER 4. COPYRIGHT
each composition. Based on his structural analysis of the two songs,
coupled with his detailed analysis of the melodies of Themes A and
B in both of them, Mr. Parsons gave his opinion that the two songs
could not have been independently created.
Maurice Gibb was then called by the plaintiff as an adverse party
witness. The opening melody from one of the songs was played for
him. He identified it as “How Deep Is Your Love.” Counsel for the
plaintiff then read a stipulation of the parties that the music which
had been played to Maurice Gibb was “the melody of Theme B, the
first two phrases of Ronald Selle’s ‘Let It End.’” Plaintiff rested his
case in chief. Defendants did not call an expert witness to testify.
The jury returned a general verdict of infringement in favor of the
plaintiff, Selle, but the District Court judge entered judgment notwith-
standing the verdict for the defendants, and the Court of Appeals af-
firmed. Who was right: the jury or the judges? You may, if you want,
listen to the plaintiff’s and defendants’ songs. (Should you?)
2 Direct Infringement
Copyright Act
17 U.S.C. § 106
Subject to sections 107 through 122, the owner of copyright under
Exclusive rights in copyrighted works this title has the exclusive rights to do and to authorize any of the
following:
(1) to reproduce the copyrighted work in copies or phonorecords;
(2) to prepare derivative works based upon the copyrighted work;
(3) to distribute copies or phonorecords of the copyrighted work to
the public by sale or other transfer of ownership, or by rental,
lease, or lending;
(4) in the case of literary, musical, dramatic, and choreographic
works, pantomimes, and motion pictures and other audiovisual
works, to perform the copyrighted work publicly;
(5) in the case of literary, musical, dramatic, and choreographic
works, pantomimes, and pictorial, graphic, or sculptural works,
including the individual images of a motion picture or other au-
diovisual work, to display the copyrighted work publicly;
17 U.S.C. § 101
“Copies” are material objects, other than phonorecords, in which a
Definitions work is fixed by any method now known or later developed, and
from which the work can be perceived, reproduced, or otherwise
communicated, either directly or with the aid of a machine or de-
vice. The term “copies” includes the material object, other than a
phonorecord, in which the work is first fixed.
E. INFRINGEMENT: PROHIBITED CONDUCT 317
To “display” a work means to show a copy of it, either directly
or by means of a film, slide, television image, or any other device or
process or, in the case of a motion picture or other audiovisual work,
to show individual images nonsequentially.
To “perform” a work means to recite, render, play, dance, or act
it, either directly or by means of any device or process or, in the case
of a motion picture or other audiovisual work, to show its images in
any sequence or to make the sounds accompanying it audible.
Capitol Records, LLC v. ReDigi Inc.
934 F. Supp. 2d 640 (S.D.N.Y. 2013)
ReDigi markets itself as ”the world’s first and only online market-
place for digital used music.” To sell music on ReDigi’s website, a
user must first download ReDigi’s ”Media Manager” to his computer.
Once installed, Media Manager analyzes the user’s computer to build
a list of digital music files eligible for sale.
After the list is built, a user may upload any of his eligible files
to ReDigi’s ”Cloud Locker,” an ethereal moniker for what is, in fact,
merely a remote server in Arizona. ReDigi asserts that the process
involves ”migrating” a user’s file, packet by packet— ”analogous to
a train”—from the user’s computer to the Cloud Locker so that data
does not exist in two places at any one time. Capitol asserts that, se-
mantics aside, ReDigi’s upload process ”necessarily involves copy-
ing” a file from the user’s computer to the Cloud Locker. Regardless,
at the end of the process, the digital music file is located in the Cloud
Locker and not on the user’s computer. Moreover, Media Manager
deletes any additional copies of the file on the user’s computer and
connected devices.
If ReDigi determines that the file has not been tampered with or
offered for sale by another user, the file is stored in the Cloud Locker,
and the user is given the option of simply storing and streaming the
file for personal use or offering it for sale in Re-Digi’s marketplace. If
a user chooses to sell his digital music file, his access to the file is ter-
minated and transferred to the new owner at the time of purchase.
Thereafter, the new owner can store the file in the Cloud Locker,
stream it, sell it, or download it to her computer and other devices.
1. Reproduction Rights
Courts have consistently held that the unauthorized duplication of
digital music files over the Internet infringes a copyright owner’s ex-
clusive right to reproduce. However, courts have not previously ad-
dressed whether the unauthorized transfer of a digital music file over
the Internet – where only one file exists before and after the transfer
– constitutes reproduction within the meaning of the Copyright Act.
The Court holds that it does.
318 CHAPTER 4. COPYRIGHT
ReDigi stresses that it ”migrates” a file from a user’s computer to
its Cloud Locker, so that the same file is transferred to the ReDigi
server and no copying occurs. However, even if that were the case,
the fact that a file has moved from one material object – the user’s
computer – to another—the ReDigi server—means that a reproduc-
tion has occurred. Similarly, when a ReDigi user downloads a new
purchase from the ReDigi website to her computer, yet another repro-
duction is created. It is beside the point that the original phonorecord
no longer exists. It ma ers only that a new phonorecord has been cre-
ated.
C.M. Paula: 355 F. Supp. 189 (N.D. Tex. ReDigi struggles to avoid this conclusion by pointing to C.M.
1973) Paula Co. v. Logan, where the defendant used chemicals to lift im-
ages off of greeting cards and place them on plaques for resale. The
court determined that infringement did not occur because ”should
defendant desire to make one hundred ceramic plaques, defendant
Courts are split on whether this process would be required to purchase one hundred separate prints.” ReDigi
infringes the adaptation right. Com- argues that, like the defendant in C.M. Paula, its users must purchase
pareMirage Editions, Inc. v. Albuquerque
a song on iTunes in order to sell a song on ReDigi. Therefore, no
ART Co., 856 F.2d 1341 (9th Cir. 1988)
(yes), withLee v. A.R.T. Co., 125 F.3d 580 ”duplication” occurs. ReDigi’s argument is unavailing. Ignoring the
(7th Cir. 1997) (no). questionable merits of the court’s holding in C.M. Paula, ReDigi’s ser-
vice is distinguishable from the process in that case. There, the copy-
righted print, or material object, was lifted from the greeting card and
transferred in toto to the ceramic tile; no new material object was cre-
ated. By contrast, ReDigi’s service by necessity creates a new material
object when a digital music file is either uploaded to or downloaded
from the Cloud Locker.
2. Distribution Rights
London-Sire: 542 F. Supp. 2d 153 (D. Like the court in London-Sire Records, Inc. v. John Doe 1, the Court
Mass 2008) agrees that ”an electronic file transfer is plainly within the sort of
transaction that § 106(3) was intended to reach and fits within the
definition of ‘distribution’ of a phonorecord.” For that reason, ”courts
have not hesitated to find copyright infringement by distribution in
cases of file-sharing or electronic transmission of copyrighted works.”
Gruebel: 453 F. Supp. 2d 961 (N.D. Tex. Arista Records LLC v. Greubel (collecting cases).
2006) There is no dispute that sales occurred on ReDigi’s website. Capi-
tol has established that it was able to buy more than one-hundred of
its own recordings on ReDigi’s webite, and ReDigi itself compiled a
list of its completed sales of Capitol’s recordings. ReDigi, in fact, does
not contest that distribution occurs on its website—it only asserts that
the distribution is protected by the fair use and first sale defenses.
3. Performance and Display Rights
Audio streams are performances because a stream is an electronic
transmission that renders the musical work audible as it is received
E. INFRINGEMENT: PROHIBITED CONDUCT 319
by the client-computer’s temporary memory. This transmission, like
a television or radio broadcast, is a performance because there is a
playing of the song that is perceived simultaneously with the trans-
mission.
Public display includes ”show[ing] a copy of [a work], either di-
rectly or by means of a film, slide, television image, or any other
device or process.” The Ninth Circuit has held that the display of a 17 U.S.C. § 101
photographic image on a computer may implicate the display right,
though infringement hinges, in part, on where the image was hosted. Perfect 10, Inc. v. Amazon.com, Inc., 508
Capitol alleges that ReDigi infringed its copyrights by streaming F.3d 1146 (9th Cir. 2007), held that the
operator of the computer from which
thirty-second song clips and exhibiting album cover art to potential
the image was transmitted for display
buyers. ReDigi counters that it only posted such content pursuant to infringed the display right.
a licensing agreement and within the terms of that agreement. ReDigi
also asserts that it promptly removed the content when its licenses
were terminated, and instead sent users to YouTube or iTunes for
previews. Capitol, in response, claims that ReDigi’s use violated the
terms of those licenses and did not cease at the time the licenses were
terminated. As such, there are material disputes as to the source
of the content, whether ReDigi was authorized to transmit the con-
tent, when authorization was or was not revoked, and when ReDigi
ceased providing the content. Because the Court cannot determine
whether ReDigi infringed Capitol’s display and performance rights
on the present record, ReDigi’s motion for summary judgment on its
alleged infringement of these exclusive rights is denied.
CoStar Group, Inc. v. LoopNet, Inc.
373 F.3d 544 (4th Cir. 2004)
CoStar is a national provider of commercial real estate information,
and it claims to have collected the most comprehensive database of
information on commercial real estate markets and commercial prop-
erties in the United States and the United Kingdom. LoopNet is an
Internet service provider (”ISP”) whose website allows subscribers,
generally real estate brokers, to post listings of commercial real es-
tate on the Internet. Beginning in early 1998, CoStar became aware
that photographs for which it held copyrights were being posted on
LoopNet’s website by LoopNet’s subscribers.
While the Copyright Act does not require that the infringer know
that he is infringing or that his conduct amount to a willful viola-
tion of the copyright owner’s rights, it nonetheless requires conduct
by a person who causes in some meaningful way an infringement.
Were this not so, the Supreme Court could not have held, as it did in
Sony, that a manufacturer of copy machines, possessing constructive
knowledge that purchasers of its machine may be using them to en-
gage in copyright infringement, is not strictly liable for infringement.
This, of course, does not mean that a manufacturer or owner of ma-
chines used for copyright violations could not have some indirect lia-
320 CHAPTER 4. COPYRIGHT
bility, such as contributory or vicarious liability. But such extensions
of liability would require a showing of additional elements such as
knowledge coupled with inducement or supervision coupled with a
financial interest in the illegal copying.
But to establish direct liability, something more must be shown
than mere ownership of a machine used by others to make illegal
copies. There must be actual infringing conduct with a nexus suffi-
ciently close and causal to the illegal copying that one could conclude
that the machine owner himself trespassed on the exclusive domain
Netcom: 907 F. Supp. 1361 (N.D. Cal. of the copyright owner. Religious Technology Center v. Netcom On-
1995) line Communication Services, Inc. described this nexus as requiring
Same case, different opinion some aspect of volition or causation. Indeed, counsel for both par-
ties agreed at oral argument that a copy machine owner who makes
the machine available to the public to use for copying is not, without
more, strictly liable under § 106 for illegal copying by a customer. The
ISP in this case is an analogue to the owner of a traditional copying
machine whose customers pay a fixed amount per copy and operate
the machine themselves to make copies. When a customer duplicates
an infringing work, the owner of the copy machine is not considered
a direct infringer. Similarly, an ISP who owns an electronic facility
that responds automatically to users’ input is not a direct infringer.
If the Copyright Act does not hold the owner of the copying machine
liable as a direct infringer when its customer copies infringing ma-
terial without knowledge of the owner, the ISP should not be found
liable as a direct infringer when its facility is used by a subscriber to
violate a copyright without intervening conduct of the ISP.
American Broadcasting v. Aereo, Inc.
134 S. Ct. 2498 (2014)
The Copyright Act of 1976 gives a copyright owner the ”exclusive
right” to ”perform the copyrighted work publicly.” The Act’s Trans-
mit Clause defines that exclusive right as including the right to
17 U.S.C. S 101 ”transmit or otherwise communicate a performance ... of
the [copyrighted] work ... to the public, by means of any
device or process, whether the members of the public ca-
pable of receiving the performance ... receive it in the
same place or in separate places and at the same time or
at different times.”
We must decide whether respondent Aereo, Inc., infringes this exclu-
sive right by selling its subscribers a technologically complex service
that allows them to watch television programs over the Internet at
about the same time as the programs are broadcast over the air. We
conclude that it does.
I
E. INFRINGEMENT: PROHIBITED CONDUCT 321
For a monthly fee, Aereo offers subscribers broadcast television pro-
gramming over the Internet, virtually as the programming is being
broadcast.
Aereo’s system is made up of servers, transcoders, and thousands
of dime-sized antennas housed in a central warehouse. It works
roughly as follows: First, when a subscriber wants to watch a show
that is currently being broadcast, he visits Aereo’s website and selects,
from a list of the local programming, the show he wishes to see.
Second, one of Aereo’s servers selects an antenna, which it dedi-
cates to the use of that subscriber (and that subscriber alone) for the
duration of the selected show. A server then tunes the antenna to
the over-the-air broadcast carrying the show. The antenna begins to
receive the broadcast, and an Aereo transcoder translates the signals
received into data that can be transmi ed over the Internet.
Third, rather than directly send the data to the subscriber, a server
saves the data in a subscriber-specific folder on Aereo’s hard drive. In
other words, Aereo’s system creates a subscriber-specific copy – that
is, a ”personal” copy – of the subscriber’s program of choice.
Fourth, once several seconds of programming have been saved,
Aereo’s server begins to stream the saved copy of the show to the sub-
scriber over the Internet. (The subscriber may instead direct Aereo to
stream the program at a later time, but that aspect of Aereo’s service
is not before us.) The subscriber can watch the streamed program
on the screen of his personal computer, tablet, smart phone, Internet-
connected television, or other Internet-connected device. The stream-
ing continues, a mere few seconds behind the over-the-air broadcast,
until the subscriber has received the entire show.
Aereo emphasizes that the data that its system streams to each
subscriber are the data from his own personal copy, made from the
broadcast signals received by the particular antenna allo ed to him.
Its system does not transmit data saved in one subscriber’s folder to
any other subscriber. When two subscribers wish to watch the same
program, Aereo’s system activates two separate antennas and saves
two separate copies of the program in two separate folders. It then
streams the show to the subscribers through two separate transmis-
sions – each from the subscriber’s personal copy.
II
History makes plain that one of Congress’ primary purposes in
amending the Copyright Act in 1976 was to overturn this Court’s de-
termination that community antenna television (CATV) systems (the
precursors of modern cable systems) fell outside the Act’s scope. In
Fortnightly Corp. v. United Artists Television, Inc., the Court consid- Fortnightly: 392 U.S. 390, (1968)
ered a CATV system that carried local television broadcasting, much
of which was copyrighted, to its subscribers in two cities. The CATV
322 CHAPTER 4. COPYRIGHT
provider placed antennas on hills above the cities and used coaxial
cables to carry the signals received by the antennas to the home tele-
vision sets of its subscribers. Asked to decide whether the CATV
provider infringed copyright holders’ exclusive right to perform their
works publicly, the Court held that the provider did not ”perform” at
all. The Court drew a line: ”Broadcasters perform. Viewers do not
perform.” And a CATV provider ”falls on the viewer’s side of the
line.”
In 1976 Congress amended the Copyright Act in large part to
Teleprompter: 415 U.S. 394 (1974) reject the Court’s holdings in Fortnightly and Teleprompter Corp. v.
Teleprompter extended Fortnightly Columbia Broadcasting System, Inc.. The amended statute clarifies that
from local rebroadcasts to rebroad- to ”perform” an audiovisual work means ”to show its images in any
casts of distant television stations.
sequence or to make the sounds accompanying it audible.” Under
17 U.S.C. S 101
this new language, both the broadcaster and the viewer of a televi-
sion program ”perform,” because they both show the program’s im-
ages and make audible the program’s sounds. Congress also enacted
the Transmit Clause, which specifies that an entity performs pub-
licly when it ”transmit[s] ... a performance ... to the public.” Cable
system activities, like those of the CATV systems in Fortnightly and
Teleprompter, lie at the heart of the activities that Congress intended
this language to cover. The Clause thus makes clear that an entity that
acts like a CATV system itself performs, even if when doing so, it sim-
ply enhances viewers’ ability to receive broadcast television signals.
Congress further created a new section of the Act to regulate cable
17 U.S.C. S 111 companies’ public performances of copyrighted works. Section 111
creates a complex, highly detailed compulsory licensing scheme that
sets out the conditions, including the payment of compulsory fees,
under which cable systems may retransmit broadcasts.
This history makes clear that Aereo is not simply an equipment
provider. Rather, Aereo, and not just its subscribers, ”perform[s]”
(or ”transmit[s]”). Aereo’s activities are substantially similar to those
of the CATV companies that Congress amended the Act to reach.
III
Next, we must consider whether Aereo performs petitioners’ works
”publicly,” within the meaning of the Transmit Clause. As we have
said, an Aereo subscriber receives broadcast television signals with
an antenna dedicated to him alone. Aereo’s system makes from those
signals a personal copy of the selected program. It streams the con-
tent of the copy to the same subscriber and to no one else. One and
only one subscriber has the ability to see and hear each Aereo trans-
mission. The fact that each transmission is to only one subscriber, in
Aereo’s view, means that it does not transmit a performance ”to the
public.”
In terms of the Act’s purposes, these differences do not distin-
E. INFRINGEMENT: PROHIBITED CONDUCT 323
guish Aereo’s system from cable systems, which do perform ”pub-
licly.” Viewed in terms of Congress’ regulatory objectives, why
should any of these technological differences ma er? They concern
the behind-the-scenes way in which Aereo delivers television pro-
gramming to its viewers’ screens. They do not render Aereo’s com-
mercial objective any different from that of cable companies. Nor
do they significantly alter the viewing experience of Aereo’s sub-
scribers. Why would a subscriber who wishes to watch a television
show care much whether images and sounds are delivered to his
screen via a large multisubscriber antenna or one small dedicated an-
tenna, whether they arrive instantaneously or after a few seconds’ de-
lay, or whether they are transmi ed directly or after a personal copy
is made? And why, if Aereo is right, could not modern CATV sys-
tems simply continue the same commercial and consumer-oriented
activities, free of copyright restrictions, provided they substitute such
new technologies for old? Congress would as much have intended
to protect a copyright holder from the unlicensed activities of Aereo
as from those of cable companies.
The subscribers to whom Aereo transmits television programs
constitute ”the public.” Aereo communicates the same contempora-
neously perceptible images and sounds to a large number of people
who are unrelated and unknown to each other. This ma ers because,
although the Act does not define ”the public,” it specifies that an en-
tity performs publicly when it performs at ”any place where a sub-
stantial number of persons outside of a normal circle of a family and
its social acquaintances is gathered.”. The Act thereby suggests that 17 U.S.C S 101
”the public” consists of a large group of people outside of a family
and friends.
Neither the record nor Aereo suggests that Aereo’s subscribers re-
ceive performances in their capacities as owners or possessors of the
underlying works. This is relevant because when an entity performs
to a set of people, whether they constitute ”the public” often depends
upon their relationship to the underlying work. When, for example,
a valet parking a endant returns cars to their drivers, we would not
say that the parking service provides cars ”to the public.” We would
say that it provides the cars to their owners. We would say that a car
dealership, on the other hand, does provide cars to the public, for it
sells cars to individuals who lack a pre-existing relationship to the
cars. Similarly, an entity that transmits a performance to individuals
in their capacities as owners or possessors does not perform to ”the
public,” whereas an entity like Aereo that transmits to large numbers
of paying subscribers who lack any prior relationship to the works
does so perform.
IV
324 CHAPTER 4. COPYRIGHT
Aereo and many of its supporting amici argue that to apply the Trans-
mit Clause to Aereo’s conduct will impose copyright liability on other
technologies, including new technologies, that Congress could not
possibly have wanted to reach. We agree that Congress, while in-
tending the Transmit Clause to apply broadly to cable companies and
their equivalents, did not intend to discourage or to control the emer-
gence or use of different kinds of technologies. But we do not believe
that our limited holding today will have that effect.
Justice SCALIA, with whom Justice THOMAS and Justice ALITO
join, dissenting.
Unlike video-on-demand services, Aereo does not provide a pre-
arranged assortment of movies and television shows. Rather, it as-
signs each subscriber an antenna that – like a library card – can be
used to obtain whatever broadcasts are freely available. Some of
those broadcasts are copyrighted; others are in the public domain.
The key point is that subscribers call all the shots: Aereo’s automated
system does not relay any program, copyrighted or not, until a sub-
scriber selects the program and tells Aereo to relay it. Aereo’s opera-
tion of that system is a volitional act and a but-for cause of the result-
ing performances, but, as in the case of the copy shop, that degree of
involvement is not enough for direct liability.
That conclusion does not necessarily mean that Aereo’s service
complies with the Copyright Act. Quite the contrary. The Networks’
complaint alleges that Aereo is directly and secondarily liable for in-
fringing their public-performance rights and also their reproduction
rights. Their request for a preliminary injunction – the only issue be-
fore this Court – is based exclusively on the direct-liability portion of
the public-performance claim (and further limited to Aereo’s ”watch”
function, as opposed to its ”record” function). Affirming the judg-
ment below would merely return this case to the lower courts for
consideration of the Networks’ remaining claims.
Copyright Act
17 U.S.C. § 110
Notwithstanding the provisions of section 106, the following are not
Limitations on exclusive rights: Exemp- infringements of copyright:
tion of certain performances and dis- (1) performance or display of a work by instructors or pupils in
plays
the course of face-to-face teaching activities of a nonprofit ed-
ucational institution, in a classroom or similar place devoted to
instruction, unless, in the case of a motion picture or other au-
diovisual work, the performance, or the display of individual
images, is given by means of a copy that was not lawfully made
under this title, and that the person responsible for the perfor-
mance knew or had reason to believe was not lawfully made;
E. INFRINGEMENT: PROHIBITED CONDUCT 325
(2) [similar uses in distance education, subject to numerous condi-
tions]
(3) performance of a nondramatic literary or musical work or of a
dramatico-musical work of a religious nature, or display of a
work, in the course of services at a place of worship or other
religious assembly;
(4) performance of a nondramatic literary or musical work other-
wise than in a transmission to the public, without any purpose
of direct or indirect commercial advantage and without pay-
ment of any fee or other compensation for the performance to
any of its performers, promoters, or organizers … ;
(6) performance … in the course of an annual agricultural or hor-
ticultural fair … ;
(10) [certain private charitable fundraising performances by non-
profit veterans and fraternal organizations]
3 Secondary Liability
Fonovisa, Inc. v. Cherry Auction, Inc.
76 F.3d 259 (9th Cir. 1996)
This is a copyright and trademark enforcement action against the op-
erators of a swap meet, sometimes called a flea market, where third-
party vendors routinely sell counterfeit recordings that infringe on
the plaintiff’s copyrights and trademarks.
B
The plaintiff and appellant is Fonovisa, Inc., a California corporation
that owns copyrights and trademarks to Latin/Hispanic music record-
ings. Fonovisa filed this action in district court against defendant-
appellee, Cherry Auction, Inc., and its individual operators (collec-
tively “Cherry Auction”). For purposes of this appeal, it is undis-
puted that Cherry Auction operates a swap meet in Fresno, California,
similar to many other swap meets in this country where customers
come to purchase various merchandise from individual vendors. The
vendors pay a daily rental fee to the swap meet operators in exchange
for booth space. Cherry Auction supplies parking, conducts advertis-
ing and retains the right to exclude any vendor for any reason, at
any time, and thus can exclude vendors for patent and trademark
infringement. In addition, Cherry Auction receives an entrance fee
from each customer who a ends the swap meet.
There is also no dispute for purposes of this appeal that Cherry
Auction and its operators were aware that vendors in their swap meet
were selling counterfeit recordings in violation of Fonovisa’s trade-
marks and copyrights. Indeed, it is alleged that in 1991, the Fresno
County Sheriff’s Department raided the Cherry Auction swap meet
326 CHAPTER 4. COPYRIGHT
and seized more than 38,000 counterfeit recordings. The following
year, after finding that vendors at the Cherry Auction swap meet were
still selling counterfeit recordings, the Sheriff sent a le er notifying
Cherry Auction of the on-going sales of infringing materials, and re-
minding Cherry Auction that they had agreed to provide the Sheriff
with identifying information from each vendor. In addition, in 1993,
Fonovisa itself sent an investigator to the Cherry Auction site and ob-
served sales of counterfeit recordings.
Although the Copyright Act does not expressly impose liability
on anyone other than direct infringers, courts have long recognized
that in certain circumstances, vicarious or contributory liability will
be imposed.
V C I
The concept of vicarious copyright liability was developed in the
Second Circuit as an outgrowth of the agency principles of respon-
deat superior. The landmark case on vicarious liability for sales of
Shapiro: 316 F.2d 304 (2d Cir. 1963) counterfeit recordings is Shapiro, Bernstein and Co. v. H.L. Green
Co.. In Shapiro, the court was faced with a copyright infringement
suit against the owner of a chain of department stores where a con-
cessionaire was selling counterfeit recordings. Noting that the nor-
mal agency rule of respondeat superior imposes liability on an em-
ployer for copyright infringements by an employee, the court endeav-
ored to fashion a principle for enforcing copyrights against a defen-
dant whose economic interests were intertwined with the direct in-
fringer’s, but who did not actually employ the direct infringer.
The Shapiro, court looked at the two lines of cases it perceived as
most clearly relevant. In one line of cases, the landlord-tenant cases,
the courts had held that a landlord who lacked knowledge of the
infringing acts of its tenant and who exercised no control over the
leased premises was not liable for infringing sales by its tenant. In
the other line of cases, the so-called “dance hall cases,” the operator of
an entertainment venue was held liable for infringing performances
when the operator (1) could control the premises and (2) obtained a
direct financial benefit from the audience, who paid to enjoy the in-
fringing performance.
From those two lines of cases, the Shapiro, court determined that
the relationship between the store owner and the concessionaire in
the case before it was closer to the dance-hall model than to the
landlord-tenant model. It imposed liability even though the defen-
dant was unaware of the infringement. Shapiro deemed the impo-
sition of vicarious liability neither unduly harsh nor unfair because
the store proprietor had the power to cease the conduct of the conces-
sionaire, and because the proprietor derived an obvious and direct
financial benefit from the infringement. The test was more clearly
E. INFRINGEMENT: PROHIBITED CONDUCT 327
articulated in a later Second Circuit case as follows: “even in the ab-
sence of an employer-employee relationship one may be vicariously
liable if he has the right and ability to supervise the infringing activ-
ity and also has a direct financial interest in such activities.” Gershwin Gershwin: 443 F.2d 1159 (2d Cir. 1971)
Publishing Corp. v. Columbia Artists Management, Inc..
The district court in this case agreed with defendant Cherry Auc-
tion that Fonovisa did not, as a ma er of law, meet either the con-
trol or the financial benefit prong of the vicarious copyright infringe-
ment test articulated in Gershwin, supra. Rather, the district court
concluded that based on the pleadings, Cherry Auction neither su-
pervised nor profited from the vendors’ sales. In the district court’s
view, with respect to both control and financial benefit, Cherry Auc-
tion was in the same position as an absentee landlord who has sur-
rendered its exclusive right of occupancy in its leased property to its
tenants.
This analogy to absentee landlord is not in accord with the facts
as alleged in the district court and which we, for purposes of appeal,
must accept. The allegations below were that vendors occupied small
booths within premises that Cherry Auction controlled and patrolled.
According to the complaint, Cherry Auction had the right to termi-
nate vendors for any reason whatsoever and through that right had
the ability to control the activities of vendors on the premises. In ad-
dition, Cherry Auction promoted the swap meet and controlled the
access of customers to the swap meet area. In terms of control, the
allegations before us are strikingly similar to those in Shapiro, and
Gershwin.
In Shapiro, for example, the court focused on the formal licens-
ing agreement between defendant department store and the direct
infringer-concessionaire. There, the concessionaire selling the boot-
leg recordings had a licensing agreement with the department store
(H.L. Green Company) that required the concessionaire and its em-
ployees to “abide by, observe and obey all regulations promulgated
from time to time by the H.L. Green Company,” and H.L. Green
Company had the “unreviewable discretion” to discharge the con-
cessionaires’ employees. In practice, H.L. Green Company was not
actively involved in the sale of records and the concessionaire con-
trolled and supervised the individual employees. Nevertheless, H.L.
Green’s ability to police its concessionaire — which parallels Cherry
Auction’s ability to police its vendors under Cherry Auction’s simi-
larly broad contract with its vendors – was sufficient to satisfy the
control requirement.
We next consider the issue of financial benefit. The plaintiff’s alle-
gations encompass many substantive benefits to Cherry Auction from
the infringing sales. These include the payment of a daily rental fee
by each of the infringing vendors; a direct payment to Cherry Auc-
328 CHAPTER 4. COPYRIGHT
tion by each customer in the form of an admission fee, and incidental
payments for parking, food and other services by customers seeking
to purchase infringing recordings.
Cherry Auction nevertheless contends that these benefits cannot
satisfy the financial benefit prong of vicarious liability because a com-
mission, directly tied to the sale of particular infringing items, is re-
quired. They ask that we restrict the financial benefit prong to the
precise facts presented in Shapiro, where defendant H.L. Green Com-
pany received a 10 or 12 per cent commission from the direct in-
fringers’ gross receipts. Cherry Auction points to the low daily rental
fee paid by each vendor, discounting all other financial benefits flow-
ing to the swap meet, and asks that we hold that the swap meet is
materially similar to a mere landlord. The facts alleged by Fonovisa,
however, reflect that the defendants reap substantial financial bene-
fits from admission fees, concession stand sales and parking fees, all
of which flow directly from customers who want to buy the coun-
terfeit recordings at bargain basement prices. The plaintiff has suffi-
ciently alleged direct financial benefit.
Our conclusion is fortified by the continuing line of cases, starting
with the dance hall cases, imposing vicarious liability on the operator
of a business where infringing performances enhance the a ractive-
Polygram: 855 F. Supp. 1314 (D. Mass. ness of the venue to potential customers. In Polygram International
1994) Publishing, Inc. v. Nevada/TIG, Inc., for example, direct infringers were
participants in a trade show who used infringing music to communi-
cate with a endees and to cultivate interest in their wares. The court
held that the trade show participants “derived a significant financial
benefit from the a ention” that a endees paid to the infringing mu-
sic. In this case, the sale of pirated recordings at the Cherry Auction
swap meet is a “draw” for customers, as was the performance of pi-
rated music in the dance hall cases and their progeny.
Plaintiffs have stated a claim for vicarious copyright infringement.
C C I
Contributory infringement originates in tort law and stems from the
notion that one who directly contributes to another’s infringement
should be held accountable. Contributory infringement has been de-
scribed as an outgrowth of enterprise liability, and imposes liability
where one person knowingly contributes to the infringing conduct
of another. The classic statement of the doctrine is in Gershwin: “One
who, with knowledge of the infringing activity, induces, causes or
materially contributes to the infringing conduct of another, may be
held liable as a ‘contributory’ infringer.”
There is no question that plaintiff adequately alleged the element
of knowledge in this case. The disputed issue is whether plaintiff ad-
equately alleged that Cherry Auction materially contributed to the
E. INFRINGEMENT: PROHIBITED CONDUCT 329
infringing activity. We have li le difficulty in holding that the alle-
gations in this case are sufficient to show material contribution to
the infringing activity. Indeed, it would be difficult for the infring-
ing activity to take place in the massive quantities alleged without
the support services provided by the swap meet. These services in-
clude, inter alia, the provision of space, utilities, parking, advertising,
plumbing, and customers.
Here again Cherry Auction asks us to ignore all aspects of the en-
terprise described by the plaintiffs, to concentrate solely on the rental
of space, and to hold that the swap meet provides nothing more. Yet
Cherry Auction actively strives to provide the environment and the
market for counterfeit recording sales to thrive. Its participation in
the sales cannot be termed “passive,” as Cherry Auction would pre-
fer.
The district court apparently took the view that contribution to
infringement should be limited to circumstances in which the de-
fendant “expressly promoted or encouraged the sale of counterfeit
products, or in some manner protected the identity of the infringers.”
Given the allegations that the local sheriff lawfully requested that
Cherry Auction gather and share basic, identifying information about
its vendors, and that Cherry Auction failed to comply, the defen-
dant appears to qualify within the last portion of the district court’s
own standard that posits liability for protecting infringers’ identities.
Moreover, we agree with the Third Circuit’s analysis in Columbia Pic- Aveco: 800 F.2d 59 (3rd Cir. 1986)
tures Industries, Inc. v. Aveco, Inc. that providing the site and facilities
for known infringing activity is sufficient to establish contributory
liability.
Sony Corp. of America v. Universal City Studios, Inc.
464 U.S. 417 (1984)
Petitioners manufacture and sell home video tape recorders [the ”Be-
tamax”]. Respondents own the copyrights on some of the television
programs that are broadcast on the public airwaves. Some members
of the general public use video tape recorders sold by petitioners to
record some of these broadcasts, as well as a large number of other
broadcasts. The question presented is whether the sale of petitioners’
copying equipment to the general public violates any of the rights
conferred upon respondents by the Copyright Act.
If vicarious liability is to be imposed on Sony in this case, it must
rest on the fact that it has sold equipment with constructive knowl-
edge of the fact that its customers may use that equipment to make
unauthorized copies of copyrighted material. There is no precedent
in the law of copyright for the imposition of vicarious liability on such
a theory. The closest analogy is provided by the patent law cases
to which it is appropriate to refer because of the historic kinship be-
tween patent law and copyright law.
330 CHAPTER 4. COPYRIGHT
We recognize there are substantial differences between the patent
and copyright laws. But in both areas the contributory infringement
doctrine is grounded on the recognition that adequate protection of
a monopoly may require the courts to look beyond actual duplica-
tion of a device or publication to the products or activities that make
such duplication possible. The staple article of commerce doctrine
must strike a balance between a copyright holder’s legitimate de-
mand for effective – not merely symbolic – protection of the statutory
monopoly, and the rights of others freely to engage in substantially
unrelated areas of commerce. Accordingly, the sale of copying equip-
ment, like the sale of other articles of commerce, does not constitute
contributory infringement if the product is widely used for legitimate,
unobjectionable purposes. Indeed, it need merely be capable of sub-
stantial noninfringing uses.
[The Court held that the Betamax was capable of two substantial
nonnfringing uses. The first was recording programs for later view-
ing (”time-shifting”) with the permission of the copyright owner. Re-
ligious and educational broadcasters (including Fred Rogers of Mister
Rogers’ Neighborhood) testified that they did not object to time-shifting.
The second noninfringing use was time-shifting even without broad-
caster permission, which was protected as fair use.]
Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.
545 U.S. 913 (2005)
The question is under what circumstances the distributor of a product
capable of both lawful and unlawful use is liable for acts of copyright
infringement by third parties using the product. We hold that one
who distributes a device with the object of promoting its use to in-
fringe copyright, as shown by clear expression or other affirmative
steps taken to foster infringement, is liable for the resulting acts of
infringement by third parties.
Exclusive Rights Problem
You work for a copyright owner who is determined to bring suit
against the following. In each case, identify every theory of copy-
right liability available. Be sure to consider both the different § 106
rights and the various flavors of secondary liability. Be creative.
• A woman calling herself Makeover Morticia gives tutorials on
how to put on makeup effectively, which she livesstreams on
a Google Hangout. She is paid by makeup companies to use
their products and promote them on her streams. She regu-
larly streams music from Spotify over her computer speakers
as she works; this background music is audible to her viewers.
Sometimes she turns up the music and tells the audience, ”You
should totally download this.”
E. INFRINGEMENT: PROHIBITED CONDUCT 331
• Terminations is a best-selling dystopian young-adult novel. Fan-
nie Frederickson, a young adult, writes a sequel in the form of a
play, which she titles Reversions. Her high school’s drama club
performs Reversions as its annual fall drama. It gives three per-
formances, for which it charges $5 admission; the proceeds are
used to pay for a cast party at a local diner.
• The Renton Theater obtains a digital copy of the movie Rager
under a license permi ing it exhibition at a single theater. But
in addition to showing the movie in its own theater, Renton re-
peatedly duplicates Rager and rents out the copies to ten other
movie theaters.
• Diversion Devices sells high-capacity digital video recorders
with DVD-R drives. Some buyers of Diversion’s DVRs use them
to record television programs onto DVRs, which they give as
presents to friends, family, and co-workers.
4 Paracopyright
Copyright Act
(a) Violations Regarding Circumvention of Technological Measures. –
17 U.S.C. § 1201
(1) (A) No person shall circumvent a technological measure Circumvention of copyright protection
that effectively controls access to a work protected un- systems
der this title.
(2) No person shall manufacture, import, offer to the public,
provide, or otherwise traffic in any technology, product,
service, device, component, or part thereof, that –
(A) is primarily designed or produced for the purpose of
circumventing a technological measure that effectively
controls access to a work protected under this title;
(B) has only limited commercially significant purpose or
use other than to circumvent a technological measure
that effectively controls access to a work protected un-
der this title; or
(C) is marketed by that person or another acting in con-
cert with that person with that person’s knowledge for
use in circumventing a technological measure that ef-
fectively controls access to a work protected under this
title.
MDY Industries, LLC. v. Blizzard Entertainment, Inc.
629 F.3d 928 (9th Cir. 2010)
Blizzard Entertainment, Inc. (”Blizzard”) is the creator of World of
Warcraft (”WoW”), a popular multiplayer online role-playing game
332 CHAPTER 4. COPYRIGHT
in which players interact in a virtual world while advancing through
the game’s 70 levels. MDY Industries, LLC and its sole member
Michael Donnelly (”Donnelly”) (sometimes referred to collectively
as ”MDY”) developed and sold Glider, a software program that au-
tomatically plays the early levels of WoW for players.As explained
in the Frequently Asked Questions (”FAQ”) on MDY’s website for
Glider:
Glider ... moves the mouse around and pushes keys on
the keyboard. You tell it about your character, where you
want to kill things, and when you want to kill. Then it kills
for you, automatically. You can do something else, like eat
dinner or go to a movie, and when you return, you’ll have
a lot more experience and loot.
Glider does not alter or copy WoW’s game client software, does not
allow a player to avoid paying monthly subscription dues to Blizzard,
and has no commercial use independent of WoW.
The parties dispute Glider’s impact on the WoW experience. Bliz-
zard contends that Glider disrupts WoW’s environment for non-
Glider players by enabling Glider users to advance quickly and un-
fairly through the game and to amass additional game assets. MDY
contends that Glider has a minimal effect on non-Glider players, en-
hances the WoW experience for Glider users, and facilitates disabled
players’ access to WoW by auto-playing the game for them.
After MDY began selling Glider, Blizzard launched Warden, its
technology designed to prevent players who used bots from connect-
ing to the WoW servers. Blizzard used Warden to ban most Glider
users in September 2005. Blizzard claims that MDY is liable un-
der DMCA S 1201(a)(2) and (b)(1) because it thereafter programmed
Glider to avoid detection by Warden.
Warden has two components. The first is a software module
called ”scan.dll,” which scans a computer’s RAM prior to allowing
the player to connect to WoW’s servers. If scan.dll detects that a bot
is running, such as Glider, it will not allow the player to connect and
play. After Blizzard launched Warden, MDY reconfigured Glider
to circumvent scan.dll by not loading itself until after scan.dll com-
pleted its check. Warden’s second component is a ”resident” compo-
nent that runs periodically in the background on a player’s computer
when it is connected to WoW’s servers. It asks the computer to report
portions of the WoW code running in RAM, and it looks for pa erns
of code associated with known bots or cheats. If it detects a bot or
cheat, it boots the player from the game, which halts the computer’s
copying of copyrighted code into RAM.
The district court assessed whether MDY violated DMCA
§ 1201(a)(2) and (b)(1) with respect to three WoW components. First,
E. INFRINGEMENT: PROHIBITED CONDUCT 333
the district court considered the game client software’s literal ele-
ments: the source code stored on players’ hard drives. Second, the
district court considered the game client software’s individual non-
literal elements: the 400,000+ discrete visual and audible components
of the game, such as a visual image of a monster or its audible roar.
Finally, it considered the game’s dynamic non-literal elements: that
is, the ”real-time experience of traveling through different worlds,
hearing their sounds, viewing their structures, encountering their in-
habitants and monsters, and encountering other players.”
Although the text suffices to resolve the issues before us, we also
consider the legislative history in order to address the parties’ argu-
ments concerning it. Our review of that history supports the view
that Congress created a new anticircumvention right in S 1201(a)(2)
independent of traditional copyright infringement.
The Federal Circuit has adopted a different approach to the
DMCA. In essence, it requires S 1201(a) plaintiffs to demonstrate that
the circumventing technology infringes or facilitates infringement of
the plaintiff’s copyright (an ”infringement nexus requirement”). See
Chamberlain Group, Inc. v. Skylink Techs., Inc.; Storage Tech. Corp. v. Chamberlain: 381 F.3d 1178 (Fed. Cir.
Custom Hardware Eng’g & Consulting, Inc.. 2004)
In Chamberlain, the plaintiff sold garage door openers (”GDOs”) Storage Tech: 421 F.3d 1307 (Fed. Cir.
2005)
with a ”rolling code” security system that purportedly reduced the
risk of crime by constantly changing the transmi er signal necessary
to open the door.Customers used the GDOs’ transmi ers to send the
changing signal, which in turn opened or closed their garage doors.
Plaintiff sued the defendant, who sold ”universal” GDO transmit-
ters for use with plaintiff’s GDOs, under S 1201(a)(2). The plaintiff
alleged that its GDOs and transmi ers both contained copyrighted
computer programs and that its rolling code security system was a
technological measure that controlled access to those programs. Ac-
cordingly, plaintiff alleged that the defendant – by selling GDO trans-
mi ers that were compatible with plaintiff’s GDOs – had trafficked in
a technology that was primarily used for the circumvention of a tech-
nological measure (the rolling code security system) that effectively
controlled access to plaintiff’s copyrighted works.
The Federal Circuit rejected the plaintiff’s claim, holding that the
defendant did not violate § 1201(a)(2) because, inter alia, the defen-
dant’s universal GDO transmi ers did not infringe or facilitate in-
fringement of the plaintiff’s copyrighted computer programs. The
linchpin of the Chamberlain court’s analysis is its conclusion that
DMCA coverage is limited to a copyright owner’s rights under the
Copyright Act as set forth in § 106 of the Copyright Act. Thus,
it held that § 1201(a) did not grant copyright owners a new anti-
circumvention right, but instead, established new causes of action
for a defendant’s unauthorized access of copyrighted material when
334 CHAPTER 4. COPYRIGHT
it infringes upon a copyright owner’s rights under § 106. Id. at 1192,
1194. Accordingly, a § 1201(a)(2) plaintiff was required to demon-
strate a nexus to infringement — i.e., that the defendant’s trafficking
in circumventing technology had a ”reasonable relationship” to the
protections that the Copyright Act affords copyright owners.
While we appreciate the policy considerations expressed by the
Federal Circuit in Chamberlain, we are unable to follow its approach
because it is contrary to the plain language of the statute.
We agree with the district court that MDY’s Glider does not vio-
late DMCA § 1201(a)(2) with respect to WoW’s literal elements and
individual non-literal elements, because Warden does not effectively
control access to these WoW elements. First, Warden does not con-
trol access to WoW’s literal elements because these elements — the
game client’s software code — are available on a player’s hard drive
once the game client software is installed. Second, as the district court
found:
WoW’s individual nonliteral components may be ac-
cessed by a user without signing on to the server. As was
demonstrated during trial, an owner of the game client
software may use independently purchased computer
programs to call up the visual images or the recorded
sounds within the game client software. For instance, a
user may call up and listen to the roar a particular mon-
ster makes within the game. Or the user may call up a
virtual image of that monster. Since a player need not en-
counter Warden to access WoW’s individual non-literal
elements, Warden does not effectively control access to
those elements.
Lexmark: 387 F.3d 522 (6th Cir. 2004) Our conclusion is in accord with the Sixth Circuit’s decision in Lex-
mark International v. Static Control Components. In Lexmark, the plain-
tiff sold laser printers equipped with an authentication sequence, ver-
ified by the printer’s copyrighted software, that ensured that only
plaintiff’s own toner cartridges could be inserted into the printers.
The defendant sold microchips capable of generating an authentica-
tion sequence that rendered other manufacturers’ cartridges compat-
ible with plaintiff’s printers.
The Sixth Circuit held that plaintiff’s § 1201(a)(2) claim failed be-
cause its authentication sequence did not effectively control access
to its copyrighted computer program. Rather, the mere purchase of
one of plaintiff’s printers allowed ”access” to the copyrighted pro-
gram. Any purchaser could read the program code directly from the
printer memory without encountering the authentication sequence.
The authentication sequence thus blocked only one form of access:
the ability to make use of the printer. However, it left intact another
E. INFRINGEMENT: PROHIBITED CONDUCT 335
form of access: the review and use of the computer program’s literal
code.
The Sixth Circuit explained:
Just as one would not say that a lock on the back door of a
house ”controls access” to a house whose front door does
not contain a lock and just as one would not say that a lock
on any door of a house ”controls access” to the house after
its purchaser receives the key to the lock, it does not make
sense to say that this provision of the DMCA applies to
otherwise-readily-accessible copyrighted works. Add to
this the fact that the DMCA not only requires the techno-
logical measure to ”control access” but requires the mea-
sure to control that access ”effectively,” and it seems clear
that this provision does not naturally extend to a techno-
logical measure that restricts one form of access but leaves
another route wide open.
Here, a player’s purchase of the WoW game client allows access to
the game’s literal elements and individual non-literal elements. War-
den blocks one form of access to these elements: the ability to access
them while connected to a WoW server. However, analogously to the
situation in Lexmark, Warden leaves open the ability to access these
elements directly via the user’s computer. We conclude that Warden
is not an effective access control measure with respect to WoW’s lit-
eral elements and individual non-literal elements, and therefore, that
MDY does not violate § 1201(a)(2) with respect to these elements.
We conclude that MDY meets each of the six textual elements for
violating § 1201(a)(2) with respect to WoW’s dynamic non-literal ele-
ments. That is, MDY (1) traffics in (2) a technology or part thereof (3)
that is primarily designed, produced, or marketed for, or has limited
commercially significant use other than (4) circumventing a techno-
logical measure (5) that effectively controls access (6) to a copyrighted
work.
The first two elements are met because MDY ”traffics in a tech-
nology or part thereof” — that is, it sells Glider. The third and fourth
elements are met because Blizzard has established that MDY markets
Glider for use in circumventing Warden, thus satisfying the require-
ment of § 1201(a)(2)(C). Indeed, Glider has no function other than to
facilitate the playing of WoW. The sixth element is met because, as
the district court held, WoW’s dynamic non-literal elements consti-
tute a copyrighted work. See, e.g., Atari Games Corp. v. Oman (the Atari Games: 888 F.2d 878 (D.C. Cir.
audiovisual display of a computer game is copyrightable indepen- 1989)
dently from the software program code, even though the audiovisual
display generated is partially dependent on user input).
The fifth element is met because Warden is an effective access con-
336 CHAPTER 4. COPYRIGHT
trol measure. Both of Warden’s two components ”require[] the appli-
cation of information, or a process or a treatment ... to gain access to
the work.” For a player to connect to Blizzard’s servers which pro-
vide access to WoW’s dynamic non-literal elements, scan.dll must
scan the player’s computer RAM and confirm the absence of any bots
or cheats. The resident component also requires a ”process” in order
for the user to continue accessing the work: the user’s computer must
report portions of WoW code running in RAM to the server. More-
over, Warden’s provisions were put into place by Blizzard, and thus,
function ”with the authority of the copyright owner.” Accordingly,
Warden effectively controls access to WoW’s dynamic non-literal ele-
ments. We hold that MDY is liable under § 1201(a)(2) with respect to
WoW’s dynamic non-literal elements.
Copyright Act
17 U.S.C. § 1202
(a) False Copyright Management Information. – No person shall
Integrity of copyright management in- knowingly and with the intent to induce, enable, facilitate, or
formation conceal infringement –
(1) provide copyright management information that is false,
or
(2) distribute … copyright management information that is
false.
(b) Removal or Alteration of Copyright Management Information. – No
person shall, without the authority of the copyright owner or
the law –
(1) intentionally remove or alter any copyright management
information, …
knowing, or, with respect to civil remedies under section 1203,
having reasonable grounds to know, that it will induce, enable,
facilitate, or conceal an infringement of any right under this ti-
tle.
(c) Definition. – As used in this section, the term “copyright man-
agement information” means any of the following information
conveyed in connection with copies or phonorecords of a work
or performances or displays of a work, including in digital
form, except that such term does not include any personally
identifying information about a user of a work or of a copy,
phonorecord, performance, or display of a work:
(1) The title and other information identifying the work, in-
cluding the information set forth on a notice of copyright.
(2) The name of, and other identifying information about, the
author of a work.
E. INFRINGEMENT: PROHIBITED CONDUCT 337
(3) The name of, and other identifying information about, the
copyright owner of the work, including the information set
forth in a notice of copyright.
(5) With the exception of public performances of works by ra-
dio and television broadcast stations, in the case of an au-
diovisual work, the name of, and other identifying infor-
mation about, a writer, performer, or director who is cred-
ited in the audiovisual work.
(6) Terms and conditions for use of the work.
(7) Identifying numbers or symbols referring to such informa-
tion or links to such information.
(8) Such other information as the Register of Copyrights may
prescribe by regulation.
Murphy v. Millennium Radio Group LLC
650 F.3d 295 (3d Cir. 2011)
In 2006, Murphy was hired by the magazine New Jersey Monthly
(“NJM ”) to take a photo of Craig Carton and Ray Rossi, who at the
time were the hosts of a show on the New Jersey radio station WKXW,
which is owned by Millennium Radio Group. NJM used the photo to
illustrate an article in its “Best of New Jersey” issue naming Carton
and Rossi “best shock jocks” in the state. The photo (“the Image”) de-
picted Carton and Rossi standing, apparently nude, behind a WKXW
sign. Murphy retained the copyright to the Image.
An unknown employee of WKXW then scanned in the Image from
NJM and posted the resulting electronic copy to the WKXW web-
site and to another website, myspacetv.com. The resulting image, as
scanned and posted to the Internet, cut off part of the original NJM
caption referring to the “Best of New Jersey” award. It also elimi-
nated NJM’s gu er credit (that is, a credit placed in the inner margin,
or “gu er,” of a magazine page, ordinarily printed in a smaller type
and running perpendicular to the relevant image on the page) iden-
tifying Murphy as the author of the Image. The WKXW website in-
vited visitors to alter the Image using photo-manipulation software
and submit the resulting versions to WKXW. A number of visitors
eventually submi ed their versions of the photo to WKXW, and it
posted 26 of those submissions to its site. The Station Defendants
never received Murphy’s permission to make use of the Image.
In April 2008, Murphy sued the Station Defendants for violations
of § 1202 of the Digital Millennium Copyright Act of 1998 (“DMCA”).
Murphy’s argument is straightforward. He contends that the
NJM gu er credit identifying him as the author of the Image is CMI
because it is “the name of ... the author of [the Image]” and was “con-
veyed in connection with copies of [the Image].” By posting the Im-
age on the two websites without the credit, therefore, the Station De-
338 CHAPTER 4. COPYRIGHT
fendants “remove[d] or alter[ed]” CMI and “distribute [d]” a work
knowing that its CMI had been “removed or altered” in violation of
§ 1202.
The Station Defendants, on the other hand, insist that one cannot
read § 1202 in isolation, but must interpret it in conjunction with §
1201 and in light of the legislative history of the DMCA to impose
an additional limitation on the definition of CMI. They argue that
the chapter as a whole protects various kinds of automated systems
which protect and manage copyrights. Specifically, § 1201 covers the
systems (the “technological measures” discussed above) that protect
copyrighted materials and § 1202 covers the systems that manage
copyrighted materials (such as the name of the author of a work).
Therefore, they conclude, despite the apparently plain language of
§ 1202, information like the name of the author of a work is not CMI
unless it also functions as part of an “automated copyright protec-
tion or management system.” In other words, to remove, as the Sta-
tion Defendants did, a printed credit from a magazine photograph
which was then posted to a website does not violate § 1202, because
the credit, although apparently meeting the definition of § 1202(c)(2),
was not part of an “automated copyright protection or management
system.”
Read in isolation, § 1202 simply establishes a cause of action for
the removal of (among other things) the name of the author of a work
when it has been “conveyed in connection with copies of” the work.
The statute imposes no explicit requirement that such information be
part of an “automated copyright protection or management system,”
as the Station Defendants claim. In fact, it appears to be extremely
broad, with no restrictions on the context in which such information
must be used in order to qualify as CMI. If there is a difficulty here,
it is a problem of policy, not of logic.
F Defenses
1 First Sale
Copyright Act
17 U.S.C. § 109
(a) Notwithstanding the provisions of section 106(3), the owner of
Limitations on exclusive rights: Effect a particular copy or phonorecord lawfully made under this title,
of transfer of particular copy or or any person authorized by such owner, is entitled, without the
phonorecord authority of the copyright owner, to sell or otherwise dispose of
the possession of that copy or phonorecord.
(b) Notwithstanding the provisions of subsection (a), unless autho-
rized by the owners of copyright in the sound recording or the
F. DEFENSES 339
owner of copyright in a computer program and in the case of
a sound recording in the musical works embodied therein, nei-
ther the owner of a particular phonorecord nor any person in
possession of a particular copy of a computer program may,
for the purposes of direct or indirect commercial advantage,
dispose of, or authorize the disposal of, the possession of that
phonorecord or computer program by rental, lease, or lending.
(c) Notwithstanding the provisions of section 106(5), the owner of
a particular copy lawfully made under this title, or any person
authorized by such owner, is entitled, without the authority of
the copyright owner, to display that copy publicly, either di-
rectly or by the projection of no more than one image at a time,
to viewers present at the place where the copy is located.
UMG Recordings, Inc. v. Augusto
628 F. 3d 1175 (9th Cir. 2011)
Like many music companies, UMG ships specially-produced promo-
tional CDs to a large group of individuals (“recipients”), such as
music critics and radio programmers, that it has selected. There is
no prior agreement or request by the recipients to receive the CDs.
UMG does not seek or receive payment for the CDs, the content and
design of which often differs from that of their commercial counter-
parts. UMG ships the promotional CDs by means of the United States
Postal Service and United Parcel Service. Relatively few of the recip-
ients refuse delivery of the CDs or return them to UMG, and UMG
destroys those that are returned.
Most of the promotional CDs in issue in this case bore a statement
(the “promotional statement”) similar to the following:
This CD is the property of the record company and is li-
censed to the intended recipient for personal use only. Ac-
ceptance of this CD shall constitute an agreement to com-
ply with the terms of the license. Resale or transfer of pos-
session is not allowed and may be punishable under fed-
eral and state laws. Some of the CDs bore a more succinct
statement, such as “Promotional Use Only—Not for Sale.”
Augusto was not among the select group of individuals slated to re-
ceive the promotional CDs. He nevertheless managed to acquire nu-
merous such CDs, many of which he sold through online auctions at
eBay.com. Augusto regularly advertised the CDs as “rare industry
editions” and referred to them as “Promo CDs.”
After several unsuccessful a empts at halting the auctions
through eBay’s dispute resolution program, UMG filed a complaint
against Augusto in the United States District Court for the Central
District of California, alleging that Augusto had infringed UMG’s
340 CHAPTER 4. COPYRIGHT
copyrights in eight promotional CDs for which it retained the “ex-
clusive right to distribute.”
Although UMG, as the owner of the copyright, has exclusive
rights in the promotional CDs, exemptions, compulsory licenses, and
defenses found in the Copyright Act narrow those rights. Augusto
invokes the “first sale” doctrine embodied in § 109(a) of the Act. 17
U.S.C. § 109(a). He argues that the circumstances a ending UMG’s
distribution of the discs effected a “sale” (transfer of ownership) of
the discs to the original recipients and that, under the “first sale” doc-
trine, the recipients and subsequent owners of those particular copies
were permi ed to sell or otherwise dispose of those copies without
authorization by the copyright holder.
UMG, on the other hand, contends that the promotional statement
effected a license with the recipients and, because the recipients were
not owners but licensees of the CDs, neither they nor Augusto were
entitled to sell or otherwise transfer the CDs.
Notwithstanding its distinctive name, the first sale doctrine ap-
plies not only when a copy is first sold, but when a copy is given
away or title is otherwise transferred without the accouterments of a
Bobbs-Merrill: 210 U.S. 339 (1908) sale. The seminal illustration of the principle is found in Bobbs-Merrill
Co. v. Straus, where a copyright owner unsuccessfully a empted to
restrain the resale of a copyrighted book by including in it the follow-
ing notice: “The price of this book at retail is $1 net. No dealer is
licensed to sell it at a less price, and a sale at less price will be treated
as an infringement of the copyright.” The Court noted that the statu-
tory grant to a copyright owner of the “sole right of vending” the
work did not continue after the first sale of a given copy. “The pur-
chaser of a book, once sold by authority of the owner of the copyright,
may sell it again, although he could not publish a new edition of it.”
The a empt to limit resale below a certain price was therefore held
invalid.
The rule of Bobbs-Merrill remains in full force, enshrined as it is in
§ 109(a) of the Act: a copyright owner who transfers title in a par-
ticular copy to a purchaser or donee cannot prevent resale of that
particular copy. We have recognized, however, that not every trans-
fer of possession of a copy transfers title. Particularly with regard to
computer software, we have recognized that copyright owners may
create licensing arrangements so that users acquire only a license to
use the particular copy of software and do not acquire title that per-
mits further transfer or sale of that copy without the permission of
the copyright owner.
The same question is presented here. Did UMG succeed in cre-
ating a license in recipients of its promotional CDs, or did it convey
title despite the restrictive labeling on the CDs? We conclude that,
under all the circumstances of the CDs’ distribution, the recipients
F. DEFENSES 341
were entitled to use or dispose of them in any manner they saw fit,
and UMG did not enter a license agreement for the CDs with the re-
cipients. Accordingly, UMG transferred title to the particular copies
of its promotional CDs and cannot maintain an infringement action
against Augusto for his subsequent sale of those copies.
Our conclusion that the recipients acquired ownership of the CDs
is based largely on the nature of UMG’s distribution. First, the pro-
motional CDs are dispatched to the recipients without any prior ar-
rangement as to those particular copies. The CDs are not numbered,
and no a empt is made to keep track of where particular copies are
or what use is made of them. As explained in greater detail below,
although UMG places wri en restrictions in the labels of the CDs, it
has not established that the restrictions on the CDs create a license
agreement.
We also hold that, because the CDs were unordered merchandise,
the recipients were free to dispose of them as they saw fit under the
Unordered Merchandise Statute, 39 U.S.C. § 3009, which provides in
pertinent part that,
(a) [e]xcept for free samples clearly and conspicuously marked as
such, the mailing of unordered merchandise constitutes an un-
fair method of competition and an unfair trade practice.
(b) Any merchandise mailed in violation of subsection (a) of this
section may be treated as a gift by the recipient, who shall have
the right to retain, use, discard, or dispose of it in any manner
he sees fit without any obligation whatsoever to the sender.
There are additional reasons for concluding that UMG’s distribution
of the CDs did not involve a consensual licensing operation. Some of
the statements on the CDs and UMG’s purported method of securing
agreement to licenses militate against a conclusion that any licenses
were created. The sparest promotional statement, “Promotional Use
Only—Not for Sale,” does not even purport to create a license. But
even the more detailed statement is flawed in the manner in which it
purports to secure agreement from the recipient. The more detailed
statement provides:
This CD is the property of the record company and is li-
censed to the intended recipient for personal use only. Ac-
ceptance of this CD shall constitute an agreement to com-
ply with the terms of the license. Resale or transfer of pos-
session is not allowed and may be punishable under fed-
eral and state laws.
It is one thing to say, as the statement does, that “acceptance” of the
CD constitutes an agreement to a license and its restrictions, but it is
quite another to maintain that “acceptance” may be assumed when
342 CHAPTER 4. COPYRIGHT
the recipient makes no response at all. This record reflects no re-
sponses. Even when the evidence is viewed in the light most favor-
able to UMG, it does not show that any recipients agreed to enter into
a license agreement with UMG when they received the CDs.
Because the record here is devoid of any indication that the recip-
ients agreed to a license, there is no evidence to support a conclusion
that licenses were established under the terms of the promotional
statement. Accordingly, we conclude that UMG’s transfer of posses-
sion to the recipients, without meaningful control or even knowledge
of the status of the CDs after shipment, accomplished a transfer of ti-
tle.
Because we conclude that UMG’s method of distribution trans-
ferred the ownership of the copies to the recipients, we have no
need to parse the remaining provisions in UMG’s purported licens-
ing statement; UMG dispatched the CDs in a manner that permi ed
their receipt and retention by the recipients without the recipients ac-
cepting the terms of the promotional statements. UMG’s transfer of
unlimited possession in the circumstances present here effected a gift
or sale within the meaning of the first sale doctrine.
Capitol Records, LLC v. ReDigi Inc.
934 F. Supp. 2d 640 (S.D.N.Y. 2013)
As an initial ma er, it should be noted that the first sale defense is,
by its own terms, limited to assertions of the distribution right. Be-
cause the Court has concluded that ReDigi’s service violates Capitol’s
reproduction right, the first sale defense does not apply to ReDigi’s
infringement of those rights.
In addition, the first sale doctrine does not protect ReDigi’s dis-
tribution of Capitol’s copyrighted works. This is because, as an
unlawful reproduction, a digital music file sold on ReDigi is not
”lawfully made under this title.” 17 U.S.C. § 109(a). Moreover, the
statute protects only distribution by ”the owner of a particular copy
or phonorecord ... of that copy or phonorecord.” Here, a ReDigi
user owns the phonorecord that was created when she purchased
and downloaded a song from iTunes to her hard disk. But to sell
that song on ReDigi, she must produce a new phonorecord on the
ReDigi server. Because it is therefore impossible for the user to sell
her ”particular” phonorecord on ReDigi, the first sale statute cannot
provide a defense. Put another way, the first sale defense is limited
to material items, like records, that the copyright owner put into the
stream of commerce. Here, ReDigi is not distributing such material
items; rather, it is distributing reproductions of the copyrighted code
embedded in new material objects, namely, the ReDigi server in Ari-
zona and its users’ hard drives. The first sale defense does not cover
this any more than it covered the sale of casse e recordings of vinyl
records in a bygone era.
F. DEFENSES 343
Finally, ReDigi feebly argues that the Court’s reading of Section
109(a) would in effect exclude digital works from the meaning of the
statute. That is not the case. Section 109(a) still protects a lawful
owner’s sale of her ”particular” phonorecord, be it a computer hard
disk, iPod, or other memory device onto which the file was originally
downloaded. While this limitation clearly presents obstacles to resale
that are different from, and perhaps even more onerous than, those
involved in the resale of CDs and casse es, the limitation is hardly
absurd – the first sale doctrine was enacted in a world where the ease
and speed of data transfer could not have been imagined. There are
many reasons for why such physical limitations may be desirable. It
is left to Congress, and not this Court, to deem them outmoded.
2 Fair Use
Copyright Act
Notwithstanding the provisions of sections 106 and 106A, the fair use 17 U.S.C. § 107
of a copyrighted work, including such use by reproduction in copies Limitations on exclusive rights: Fair use
or phonorecords or by any other means specified by that section, for
purposes such as criticism, comment, news reporting, teaching (in-
cluding multiple copies for classroom use), scholarship, or research,
is not an infringement of copyright. In determining whether the use
made of a work in any particular case is a fair use the factors to be
considered shall include
(1) the purpose and character of the use, including whether such
use is of a commercial nature or is for nonprofit educational
purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to
the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of
the copyrighted work.
The fact that a work is unpublished shall not itself bar a finding of
fair use if such finding is made upon consideration of all the above
factors.
Fair Use Checklist
The four fair use factors are a checklist of questions to ask about the
facts in a given case, not a majority vote. As you see from the read-
ings, they interrelate, and they are not all of equal importance. I find it
helpful to break the factors down into a slightly more detailed check-
list:
344 CHAPTER 4. COPYRIGHT
• Factor one (”purpose and character of the [defendant’s] use”):
– Is the use for criticism, comment, or another use specifi-
cally mentioned in the flush text at the start of section 107?
– Is the use commercial or noncommercial?
– Is the use transformative?
• Factor two (”nature of the [plaintiff’s] copyrighted work”):
– Is the work primarily informational or primarily expres-
sive?
– Is the work published or unpublished?
• Factor three (”amount and substantiality of the portion used”):
– How much did the defendant copy quantitatively from the
plaintiff’s work?
– How qualitatively important were the copied portions to
the plaintiff’s work?
– How extensive was the defendant’s copying in light of any
proffered justifications?
• Factor four (”effect of the use upon the potential market”):
– What is the relevant market, and is it one the plaintiff can
legitimately claim a right to?
– Did the plaintiff suffer losses because the defendant’s work
substituted for her own, or for some other reason?
• Miscellaneous:
– Did the defendant give appropriate a ribution to the plain-
tiff’s work as a source?
– Did either party engage in any dishonest or illegal conduct
that bears directly on the copying?
– Is there anything else significant in the facts not already
accounted for?
Harper & Row, Publishers, Inc. v. Nation Enterprises
471 U.S. 539 (1985)
In February 1977, shortly after leaving the White House, former Pres-
ident Gerald R. Ford contracted with petitioners Harper & Row and
Reader’s Digest, to publish his as yet unwri en memoirs. In addition
to the right to publish the Ford memoirs in book form, the agreement
gave petitioners the exclusive right to license prepublication excerpts,
known in the trade as “first serial rights.” Two years later, as the
memoirs were nearing completion, petitioners negotiated a prepubli-
cation licensing agreement with Time, a weekly news magazine. Time
agreed to pay $25,000, $12,500 in advance and an additional $12,500
at publication, in exchange for the right to excerpt 7,500 words from
Mr. Ford’s account of the Nixon pardon. The issue featuring the ex-
F. DEFENSES 345
cerpts was timed to appear approximately one week before shipment
of the full length book version to bookstores. Exclusivity was an im-
portant consideration; Harper & Row instituted procedures designed
to maintain the confidentiality of the manuscript, and Time retained
the right to renegotiate the second payment should the material ap-
pear in print prior to its release of the excerpts.
Two to three weeks before the Time article’s scheduled release, an
unidentified person secretly brought a copy of the Ford manuscript
to Victor Navasky, editor of The Nation, a political commentary mag-
azine. Mr. Navasky knew that his possession of the manuscript was
not authorized and that the manuscript must be returned quickly to
his “source” to avoid discovery. He hastily put together what he be-
lieved was “a real hot news story” composed of quotes, paraphrases,
and facts drawn exclusively from the manuscript. Mr. Navasky at-
tempted no independent commentary, research or criticism, in part
because of the need for speed if he was to “make news” by “pub-
lish[ing] in advance of publication of the Ford book.” The 2,250-word
article, reprinted in the Appendix to this opinion, appeared on April
3, 1979. As a result of The Nation’s article, Time canceled its piece and
refused to pay the remaining $12,500.
[Harper & Row sued for copyright infringement.]
The Nation has admi ed to lifting verbatim quotes of the author’s
original language totaling between 300 and 400 words and constitut-
ing some 13% of The Nation article. In using generous verbatim ex-
cerpts of Mr. Ford’s unpublished manuscript to lend authenticity to
its account of the forthcoming memoirs, The Nation effectively arro-
gated to itself the right of first publication, an important marketable
subsidiary right. For the reasons set forth below, we find that this use
of the copyrighted manuscript, even stripped to the verbatim quotes
conceded by The Nation to be copyrightable expression, was not a fair
use within the meaning of the Copyright Act.
III
A
Fair use was traditionally defined as “a privilege in others than the
owner of the copyright to use the copyrighted material in a reason-
able manner without his consent.” The statutory formulation of the H. Ball, Law of Copyright and Literary
defense of fair use in the Copyright Act reflects the intent of Congress Property (1944)
to codify the common-law doctrine. Section 107 requires a case-by-
case determination whether a particular use is fair, and the statute
notes four nonexclusive factors to be considered. This approach was
intended to restate the pre-existing judicial doctrine of fair use, not
to change, narrow, or enlarge it in any way.”
As early as 1841, Justice Story gave judicial recognition to the doc-
346 CHAPTER 4. COPYRIGHT
trine in a case that concerned the le ers of another former President,
George Washington.
“[A] reviewer may fairly cite largely from the original
work, if his design be really and truly to use the passages
for the purposes of fair and reasonable criticism. On the
other hand, it is as clear, that if he thus cites the most im-
portant parts of the work, with a view, not to criticise,
but to supersede the use of the original work, and sub-
stitute the review for it, such a use will be deemed in law
a piracy.”
Folsom: 9 F. Cas. 342 (CC Mass. 1841)
Folsom v. MarshAs Justice Story’s hypothetical illustrates, the fair use
doctrine has always precluded a use that “supersede[s] the use of the
original.”
Perhaps because the fair use doctrine was predicated on the au-
thor’s implied consent to “reasonable and customary” use when he
released his work for public consumption, fair use traditionally was
not recognized as a defense to charges of copying from an author’s as
yet unpublished works. This absolute rule, however, was tempered
in practice by the equitable nature of the fair use doctrine. In a given
case, factors such as implied consent through de facto publication on
performance or dissemination of a work may tip the balance of eq-
uities in favor of prepublication use. But it has never been seriously
disputed that “the fact that the plaintiff’s work is unpublished is a
factor tending to negate the defense of fair use.” Id.Publication of an
author’s expression before he has authorized its dissemination seri-
ously infringes the author’s right to decide when and whether it will
be made public, a factor not present in fair use of published works.
B
Respondents, however, contend that First Amendment values re-
quire a different rule under the circumstances of this case. The thrust
of the decision below is that the scope of fair use is undoubtedly wider
when the information conveyed relates to ma ers of high public con-
cern. Respondents advance the substantial public import of the sub-
ject ma er of the Ford memoirs as grounds for excusing a use that
would ordinarily not pass muster as a fair use – the piracy of ver-
batim quotations for the purpose of “scooping” the authorized first
serialization. Respondents explain their copying of Mr. Ford’s ex-
pression as essential to reporting the news story it claims the book it-
self represents. In respondents’ view, not only the facts contained in
Mr. Ford’s memoirs, but “the precise manner in which [he] expressed
himself [were] as newsworthy as what he had to say.” Respondents
argue that the public’s interest in learning this news as fast as possible
outweighs the right of the author to control its first publication.
F. DEFENSES 347
Respondents’ theory, however, would expand fair use to effec-
tively destroy any expectation of copyright protection in the work
of a public figure. Absent such protection, there would be li le in-
centive to create or profit in financing such memoirs, and the public
would be denied an important source of significant historical infor-
mation. The promise of copyright would be an empty one if it could
be avoided merely by dubbing the infringement a fair use “news re-
port” of the book.
Nor do respondents assert any actual necessity for circumventing
the copyright scheme with respect to the types of works and users at
issue here.[6] Where an author and publisher have invested extensive
resources in creating an original work and are poised to release it to
the public, no legitimate aim is served by pre-empting the right of
first publication. The fact that the words the author has chosen to
clothe his narrative may of themselves be “newsworthy” is not an
independent justification for unauthorized copying of the author’s
expression prior to publication.
IV
Whether The Nation article constitutes fair use under § 107 must be
reviewed in light of the principles discussed above. The factors enu-
merated in the section are not meant to be exclusive: Since the doc-
trine is an equitable rule of reason, no generally applicable definition
is possible, and each case raising the question must be decided on its
own facts. The four factors identified by Congress as especially rele-
vant in determining whether the use was fair are: (1) the purpose and
character of the use; (2) the nature of the copyrighted work; (3) the
substantiality of the portion used in relation to the copyrighted work
as a whole; (4) the effect on the potential market for or value of the
copyrighted work. We address each one separately.
Purpose of the Use. The Second Circuit correctly identified news
reporting as the general purpose of The Nation’s use. News reporting
is one of the examples enumerated in § 107 to give some idea of the
sort of activities the courts might regard as fair use under the circum-
stances. This listing was not intended to be exhaustive, or to single
out any particular use as presumptively a “fair” use. The drafters re-
sisted pressures from special interest groups to create presumptive
categories of fair use, but structured the provision as an affirmative
defense requiring a case-by-case analysis. The fact that an article ar-
guably is “news” and therefore a productive use is simply one factor
in a fair use analysis.
We agree with the Second Circuit that the trial court erred in fix-
ing on whether the information contained in the memoirs was actu-
ally new to the public. Courts should be chary of deciding what is
and what is not news. The Nation has every right to seek to be the
348 CHAPTER 4. COPYRIGHT
first to publish information. But The Nation went beyond simply re-
porting uncopyrightable information and actively sought to exploit
the headline value of its infringement, making a “news event” out
of its unauthorized first publication of a noted figure’s copyrighted
expression.
The fact that a publication was commercial as opposed to non-
profit is a separate factor that tends to weigh against a finding of fair
use. Every commercial use of copyrighted material is presumptively
an unfair exploitation of the monopoly privilege that belongs to the
owner of the copyright. In arguing that the purpose of news reporting
is not purely commercial, The Nation misses the point entirely. The
crux of the profit/nonprofit distinction is not whether the sole motive
of the use is monetary gain but whether the user stands to profit from
exploitation of the copyrighted material without paying the custom-
ary price.
In evaluating character and purpose we cannot ignore The Na-
tion’s stated purpose of scooping the forthcoming hard-cover and
Time abstracts. The Nation’s use had not merely the incidental ef-
fect but the intended purpose of supplanting the copyright holder’s
commercially valuable right of first publication. Also relevant to the
“character” of the use is the propriety of the defendant’s conduct.
“Fair use presupposes good faith and fair dealing. The trial court
found that The Nation knowingly exploited a purloined manuscript.
Unlike the typical claim of fair use, The Nation cannot offer up even
the fiction of consent as justification. Like its competitor news-
weekly, it was free to bid for the right of abstracting excerpts from
“A Time to Heal.” Fair use “distinguishes between a true scholar and
Wainwright: 558 F. 2d 91 (2d Cir. 1977) a chiseler who infringes a work for personal profit.“ Wainwright Secu-
rities Inc. v. Wall Street Transcript Corp.
Nature of the Copyrighted work. Second, the Act directs a ention to
the nature of the copyrighted work. “A Time to Heal” may be charac-
terized as an unpublished historical narrative or autobiography. The
law generally recognizes a greater need to disseminate factual works
than works of fiction or fantasy. See Gorman, Fact or Fancy? The Im-
29 J. Copyright Soc. 560 (1982) plications for Copyright:
Even within the field of fact works, there are gradations
as to the relative proportion of fact and fancy. One may
move from sparsely embellished maps and directories to
elegantly wri en biography. The extent to which one
must permit expressive language to be copied, in order
to assure dissemination of the underlying facts, will thus
vary from case to case.”
Even within the field of fact works, there are gradations as to the rel-
ative proportion of fact and fancy. One may move from sparsely em-
F. DEFENSES 349
bellished maps and directories to elegantly wri en biography. The
extent to which one must permit expressive language to be copied, in
order to assure dissemination of the underlying facts, will thus vary
from case to case.
Some of the briefer quotes from the memoirs are arguably neces-
sary adequately to convey the facts; for example, Mr. Ford’s charac-
terization of the White House tapes as the “smoking gun” is perhaps
so integral to the idea expressed as to be inseparable from it. But
The Nation did not stop at isolated phrases and instead excerpted sub-
jective descriptions and portraits of public figures whose power lies
in the author’s individualized expression. Such use, focusing on the
most expressive elements of the work, exceeds that necessary to dis-
seminate the facts.
The fact that a work is unpublished is a critical element of its “na-
ture.” Our prior discussion establishes that the scope of fair use is
narrower with respect to unpublished works. While even substantial
quotations might qualify as fair use in a review of a published work
or a news account of a speech that had been delivered to the public or
disseminated to the press, see House Report, at 65, the author’s right
to control the first public appearance of his expression weighs against
such use of the work before its release. The right of first publication
encompasses not only the choice whether to publish at all, but also
the choices of when, where, and in what form first to publish a work.
In the case of Mr. Ford’s manuscript, the copyright holders’ inter-
est in confidentiality is irrefutable; the copyright holders had entered
into a contractual undertaking to “keep the manuscript confidential”
and required that all those to whom the manuscript was shown also
“sign an agreement to keep the manuscript confidential.” While the
copyright holders’ contract with Time required Time to submit its pro-
posed article seven days before publication, The Nation’s clandestine
publication afforded no such opportunity for creative or quality con-
trol. It was hastily patched together and contained “a number of inac-
curacies.” App. 300b-300c (testimony of Victor Navasky). A use that
so clearly infringes the copyright holder’s interests in confidentiality
and creative control is difficult to characterize as “fair.”
Amount and Substantiality of the Portion Used. Next, the Act directs
us to examine the amount and substantiality of the portion used in
relation to the copyrighted work as a whole. In absolute terms, the
words actually quoted were an insubstantial portion of “A Time to
Heal.” The District Court, however, found that “[T]he Nation took
what was essentially the heart of the book.” We believe the Court
of Appeals erred in overruling the District Judge’s evaluation of the
qualitative nature of the taking. A Time editor described the chapters
on the pardon as “the most interesting and moving parts of the en-
tire manuscript.” The portions actually quoted were selected by Mr.
350 CHAPTER 4. COPYRIGHT
Navasky as among the most powerful passages in those chapters. He
testified that he used verbatim excerpts because simply reciting the in-
formation could not adequately convey the “absolute certainty with
which [Ford] expressed himself”; or show that “this comes from Pres-
ident Ford,”; or carry the “definitive quality” of the original. In short,
he quoted these passages precisely because they qualitatively embod-
ied Ford’s distinctive expression.
As the statutory language indicates, a taking may not be excused
merely because it is insubstantial with respect to the infringing work.
As Judge Learned Hand cogently remarked, “no plagiarist can excuse
the wrong by showing how much of his work he did not pirate.” Shel-
don. Conversely, the fact that a substantial portion of the infringing
work was copied verbatim is evidence of the qualitative value of the
copied material, both to the originator and to the plagiarist who seeks
to profit from marketing someone else’s copyrighted expression.
Stripped to the verbatim quotes, the direct takings from the un-
published manuscript constitute at least 13% of the infringing arti-
cle. The Nation article is structured around the quoted excerpts which
serve as its dramatic focal points. In view of the expressive value
of the excerpts and their key role in the infringing work, we cannot
agree with the Second Circuit that the “magazine took a meager, in-
deed an infinitesimal amount of Ford’s original language.”
Effect on the Market. Finally, the Act focuses on “the effect of the
use upon the potential market for or value of the copyrighted work.”
This last factor is undoubtedly the single most important element of
fair use. “Fair use, when properly applied, is limited to copying by
others which does not materially impair the marketability of the work
Nimmer § 1.10[D] which is copied.” The trial court found not merely a potential but an
actual effect on the market. Time’s cancellation of its projected seri-
alization and its refusal to pay the $12,500 were the direct effect of
the infringement. The Court of Appeals rejected this factfinding as
clearly erroneous, noting that the record did not establish a causal
relation between Time’s nonperformance and respondents’ unautho-
rized publication of Mr. Ford’s expression as opposed to the facts
taken from the memoirs. We disagree. Rarely will a case of copyright
infringement present such clear-cut evidence of actual damage. Peti-
tioners assured Time that there would be no other authorized publica-
tion of any portion of the unpublished manuscript prior to April 23,
1979. Any publication of material from chapters 1 and 3 would permit
Time to renegotiate its final payment. Time cited The Nation’s article,
which contained verbatim quotes from the unpublished manuscript,
as a reason for its nonperformance.
More important, to negate fair use one need only show that if the
challenged use should become widespread, it would adversely affect
the potential market for the copyrighted work. This inquiry must
F. DEFENSES 351
take account not only of harm to the original but also of harm to the
market for derivative works. “If the defendant’s work adversely af-
fects the value of any of the rights in the copyrighted work (in this
case the adaptation [and serialization] right) the use is not fair.” Nimmer § 13.05[B]
The Nation conceded that its verbatim copying of some 300 words
of direct quotation from the Ford manuscript would constitute an
infringement unless excused as a fair use. Because we find that
The Nation’s use of these verbatim excerpts from the unpublished
manuscript was not a fair use, the judgment of the Court of Appeals
is reversed, and the case is remanded for further proceedings consis-
tent with this opinion.
Campbell v. Acuff-Rose Music, Inc.
510 U.S. 569 (1994)
In 1964, Roy Orbison and William Dees wrote a rock ballad called
”Oh, Pre y Woman” and assigned their rights in it to respondent
Acuff-Rose Music, Inc.
Petitioners Luther R. Campbell, Christopher Wongwon, Mark
Ross, and David Hobbs are collectively known as 2 Live Crew, a
popular rap music group. In 1989, Campbell wrote a song entitled
”Pre y Woman,” which he later described in an affidavit as intended,
”through comical lyrics, to satirize the original work.” On July 5, 1989,
2 Live Crew’s manager informed Acuff-Rose that 2 Live Crew had
wri en a parody of ”Oh, Pre y Woman,” that they would afford all
credit for ownership and authorship of the original song to Acuff-
Rose, Dees, and Orbison, and that they were willing to pay a fee for
the use they wished to make of it. Enclosed with the le er were a
copy of the lyrics and a recording of 2 Live Crew’s song. Acuff-Rose’s
agent refused permission, stating that ”I am aware of the success en-
joyed by ‘The 2 Live Crews’, but I must inform you that we cannot
permit the use of a parody of ‘Oh, Pre y Woman.’” Nonetheless, in
June or July 1989, 2 Live Crew released records, casse e tapes, and
compact discs of ”Pre y Woman” in a collection of songs entitled ”As
Clean As They Wanna Be.” The albums and compact discs identify
the authors of ”Pre y Woman” as Orbison and Dees and its publisher
as Acuff-Rose.
Almost a year later, after nearly a quarter of a million copies of the
recording had been sold, Acuff-Rose sued 2 Live Crew and its record
company, Luke Skyywalker Records, for copyright infringement.
The first factor in a fair use enquiry is ”the purpose and character
of the use, including whether such use is of a commercial nature or
is for nonprofit educational purposes.” § 107(1). The central purpose
of this investigation is to see, in Justice Story’s words, whether the
new work merely ”supersede[s] the objects” of the original creation,
Folsom, or instead adds something new, with a further purpose or
different character, altering the first with new expression, meaning,
352 CHAPTER 4. COPYRIGHT
or message; it asks, in other words, whether and to what extent the
Leval, Toward a Fair Use Standard: 103 new work is ”transformative.”Pierre Leval, Toward a Fair Use Standard.
Harv. L. Rev. 1105 (1990) Although such transformative use is not absolutely necessary for a
finding of fair use,11 the goal of copyright, to promote science and the
arts, is generally furthered by the creation of transformative works.
Such works thus lie at the heart of the fair use doctrine’s guarantee
of breathing space within the confines of copyright, and the more
transformative the new work, the less will be the significance of other
factors, like commercialism, that may weigh against a finding of fair
use.
Suffice it to say now that parody has an obvious claim to transfor-
mative value, as Acuff-Rose itself does not deny. Like less ostensibly
humorous forms of criticism, it can provide social benefit, by shed-
ding light on an earlier work, and, in the process, creating a new one.
We thus line up with the courts that have held that parody, like other
Fisher: 794 F. 2d 432 (9th Cir. 1986) comment or criticism, may claim fair use under § 107. See, e.g., Fisher
v. Dees (”When Sonny Sniffs Glue,” a parody of ”When Sunny Gets
Elsmere: 482 F. Supp. 741 (S.D.N.Y 1980) Blue,” is fair use); Elsmere Music, Inc. v. National Broadcasting Co. (”I
Love Sodom,” a ”Saturday Night Live” television parody of ”I Love
New York,” is fair use).
The germ of parody lies in the definition of the Greek parodeia,
as ”a song sung alongside another.” Modern dictionaries accordingly
describe a parody as a ”literary or artistic work that imitates the char-
acteristic style of an author or a work for comic effect or ridicule,” or
as a ”composition in prose or verse in which the characteristic turns
of thought and phrase in an author or class of authors are imitated
in such a way as to make them appear ridiculous.” For the purposes
of copyright law, the nub of the definitions, and the heart of any par-
odist’s claim to quote from existing material, is the use of some el-
ements of a prior author’s composition to create a new one that, at
least in part, comments on that author’s works. If, on the contrary,
the commentary has no critical bearing on the substance or style of
the original composition, which the alleged infringer merely uses to
get a ention or to avoid the drudgery in working up something fresh,
the claim to fairness in borrowing from another’s work diminishes ac-
cordingly (if it does not vanish), and other factors, like the extent of
its commerciality, loom larger. Parody needs to mimic an original
to make its point, and so has some claim to use the creation of its
victim’s (or collective victims’) imagination, whereas satire can stand
on its own two feet and so requires justification for the very act of
borrowing.
The fact that parody can claim legitimacy for some appropriation
11
The obvious statutory exception to this focus on transformative uses is the
straight reproduction of multiple copies for classroom distribution.
F. DEFENSES 353
does not, of course, tell either parodist or judge much about where to
draw the line.
We have less difficulty in finding that critical element in 2 Live
Crew’s song than the Court of Appeals did, although having found it
we will not take the further step of evaluating its quality. The thresh-
old question when fair use is raised in defense of parody is whether a
parodic character may reasonably be perceived. Whether, going be-
yond that, parody is in good taste or bad does not and should not
ma er to fair use. As Justice Holmes explained, ”It would be a dan-
gerous undertaking for persons trained only to the law to constitute
themselves final judges of the worth of [a work], outside of the nar-
rowest and most obvious limits. At the one extreme some works of
genius would be sure to miss appreciation. Their very novelty would
make them repulsive until the public had learned the new language
in which their author spoke.” Bleistein; cf. Yankee Publishing Inc. v. Yankee Publishing: 809 F. Supp. 267
News America Publishing, Inc. (”First Amendment protections do not (S.D.N.Y. 1992) (Leval, J.)
apply only to those who speak clearly, whose jokes are funny, and
whose parodies succeed”).
While we might not assign a high rank to the parodic element here,
we think it fair to say that 2 Live Crew’s song reasonably could be
perceived as commenting on the original or criticizing it, to some de-
gree. 2 Live Crew juxtaposes the romantic musings of a man whose
fantasy comes true, with degrading taunts, a bawdy demand for sex,
and a sigh of relief from paternal responsibility. The later words can
be taken as a comment on the naivete of the original of an earlier day,
as a rejection of its sentiment that ignores the ugliness of street life
and the debasement that it signifies. It is this joinder of reference and
ridicule that marks off the author’s choice of parody from the other
types of comment and criticism that traditionally have had a claim to
fair use protection as transformative works.18
City of Inglewood v. Teixeira
No. 15-cv–01815, 2015 WL 5025839
In this action, the City makes two basic allegations. First, that it en- (C.D. Cal. Aug. 20, 2015)
joys a copyright interest in the video recordings it makes of open pub-
lic meetings of the Inglewood City Council. Second, that Teixeira has
18
Finally, regardless of the weight one might place on the alleged infringer’s state
of mind, compare Harper & Row (fair use presupposes good faith and fair dealing)
(quotation marks omi ed), with Folsom (good faith does not bar a finding of in-
fringement); Leval, Toward a Fair Use Standard (good faith irrelevant to fair use anal-
ysis), we reject Acuff-Rose’s argument that 2 Live Crew’s request for permission to
use the original should be weighed against a finding of fair use. Even if good faith
were central to fair use, 2 Live Crew’s actions do not necessarily suggest that they
believed their version was not fair use; the offer may simply have been made in a
good-faith effort to avoid this litigation. If the use is otherwise fair, then no permis-
sion need be sought or granted. Thus, being denied permission to use a work does
not weigh against a finding of fair use.
354 CHAPTER 4. COPYRIGHT
violated the City’s copyright by using portions of these videos in mak-
ing his own videos that criticize the City and its elected officials (the
“Teixeira Videos”).
The City alleges that it is the valid copyright owner of video
recordings, including six of Inglewood Council meetings from 2011
to 2013 (“the “City Council Videos”) for which it has submi ed ap-
plications for copyright registration by the Register of Copyrights.s
Teixeira is a resident of Inglewood, California. He operates a web-
site, Inglewoodwatchdog.wix.com, and posts videos on YouTube as
Dehol Trouth. The City alleges that Teixeira has willfully and inten-
tionally used infringing copies of the City Council Videos in question
and distributed them in online media, thereby violating the City’s ex-
clusive reproduction and distribution rights.
III. D
In his Motion, Teixeira makes two arguments as to why the City’s ac-
tion should be dismissed. First, under California law, the City may
not claim and assert a copyright interest in the City Council Videos.
Second, even if the City had an enforceable copyright interest in the
videos, the Teixeira Videos fall squarely within the fair use protec-
tions of § 107 of the Copyright Act.
For the reasons explained below, the Court agrees with both of
Teixeira’s arguments.
[Although federal law allows states and local government to claim
copyright protection in works they create, the court held that Califor-
nia state law did not authorize local governments to do so.]
B. Teixeira’s Activity is Protected Fair Use
Because the Court has determined that the City cannot state a claim
it need not address whether Teixeira’s copying constitutes fair use.
Because the Court is dismissing the action, however, the Court will
rule on fair use so that all issues may be appealed now, if the City
chooses to do so.
Teixeira argues that he uses small portions of the freely available
City Council Videos in order to create his own videos that comment
on and criticize activities of the City Council, and in particular Mayor
James Bu s. This, he contends, falls squarely within the protections
of the fair use doctrine as codified at § 107 of the Copyright Act.
The City argues that fair use has never protected “such system-
atic infringement of copyright works for years at a time” and that
“[c]opyrights would become meaningless if such wholesale theft
were tolerated.” The City contends that it is not trying to impinge
on Teixeira’s First Amendment but merely seeks to have him “stop
posting substantially all of the [City Council Videos] with [Teixeira’s]
comments posted on top of them.” The City continues to say that
F. DEFENSES 355
“[w]hat is really going on here is that the Defendant wants to criti-
cize the City without doing his own work.” The City also argues that
a decision on the basis of fair use is not proper at this stage in the
litigation.
A review of the videos is sufficient for the Court to rule that the
Teixeira Videos are protected by the fair use doctrine as a ma er of
law. The Teixeira Videos use brief portions of the larger works in
order to comment on, and criticize the political activities of the City
Council and its members. He uses carefully chosen portions specifi-
cally for the purposes of exercising his First Amendment rights, and
in doing so, substantially transforms the purpose and content of the
City Council Videos.
2. Each Statutory Factor Favors a Finding of Fair Use
The Court determines that each statutory factor in § 107 favors a find-
ing of fair use.
a. Purpose and Character of Use …
There is presently no evidence before the Court as to whether Teix-
eira has produced the videos for a commercial purpose beyond the
City’s allegation that he uses them to generate income, which the
Court must accept as true on a motion under Rule 12(b)(6). Teixeira
notes in his Reply that should the case proceed he will show that he
does not produce the videos for commercial purposes. Teixeira, how-
ever, does not rely on the non-commercial nature of the videos and
the Court need not either. As the Supreme Court explained in Camp-
bell, the more transformative the new work, the less will be the signif-
icance of other factors, like commercialism, that may weigh against
a finding of fair use. See also Hustler Magazine Inc. v. Moral Majority Hustler: 796 F.2d 1148 (9th Cir. 1986)
Inc. (“Even assuming that the use had a purely commercial purpose,
the presumption of unfairness can be rebu ed by the characteristics
of the use”).
The videos Teixeira produces address local politics in the City of
Inglewood. They consist of his narrating his criticism of Mayor Bu s
over slides or other text, documents—such as a report by the Ingle-
wood city clerk—and video clips, some of which are taken from the
City Council Videos over which the City claims a copyright interest.
The videos range in time from 3 minutes and 43 second to 15 min-
utes long, and the clips from the City Council Videos are considerably
shorter. Some of the clips are used unadorned but they are most of-
ten frequently overlaid with Teixeira’s oral and wri en commentary
and criticism, as well as music. Even when unadorned, they form
only part of longer videos, with the clips contrasted with documents,
sound recordings, and other video clips, accompanied with Teixeira’s
wri en and oral commentary.
356 CHAPTER 4. COPYRIGHT
Teixeira’s use is highly transformative. His purpose falls directly
within two of the categories explicitly referenced in § 107: criticism
and commentary. The Teixeira Videos are also directed at political
and other ma ers of public concern and constitute core First Amend-
ment protected speech. The fair use doctrine generally provides a
greater scope of protection when the works involve address ma ers
of public concern.
The City’s contention that Teixeira is “simply republishing un-
transformed, copies of the Copyrighted works, and free-riding on the
City’s expenses” is plainly incorrect on even the most cursory review
of the Teixeira videos. The City’s claim that “[t]he facts alleged a com-
plete lack of transformativeness” is also irrelevant given the reference
by the Complaint to the videos themselves.
Free Republic: No. 98-cv07840, 2000 WL The City’s reliance on Los Angeles Times v. Free Republic is also un-
565200 (C.D.Cal. Apr. 4, 2000) persuasive. The defendant hosed an online bulletin board on which
“generally, exact copies of whole or substantial portions of articles
[we]re posted.” The court rejected the arguments by the defendants
that the works were transformative because the board did not sub-
stitute for the newspapers’ websites, and because users added com-
ments. The court noted that “[c]opying portions of a copyrighted
work for the purpose of criticism or commentary is often consid-
ered fair use.” However, the court concluded that limited commen-
tary added to verbatim copies was not sufficient, and the amount
of copying—full, verbatim copies—was too great to justify the lim-
ited commentary provided on the board. The purpose, the court con-
cluded, was primarily to provide the content of the articles and the an-
cillary commentary was not sufficient to render the copying transfor-
mative because the copied works substituted for the originals. (“For
those who visit the site regularly, therefore, the articles posted there
serve as substitutes for the originals found on plaintiffs’ websites or
in their newspapers.”)
Teixeira’s use of the clips from the City Council Videos is of a
wholly different sort. The clips are carefully chosen and heavily
edited. Teixeira juxtaposes them with other materials, puts his own
commentary over and around them, and uses specific clips to under-
score and support the points he makes in his videos. No person wish-
ing to find out what occurred during a lengthy City Council meeting
would be satisfied with viewing any of the Teixeira Videos.
Indeed, the videos identified in the Complaint as infringing are
quintessential transformative works for the purpose of criticism and
commentary on ma ers of public concern. Even as used for commer-
cial purpose—a fact which the Court assumes to be true—this factor
alone would go a substantial way to support a finding of fair use.
b. Nature of the Copyrighted Work
F. DEFENSES 357
The purportedly copyright material is not creative in nature. The City
Council Videos are straightforward recordings of public proceedings.
The City’s arguments address whether there is sufficient creativity
to warrant copyright protection at all. While the videos are very likely
sufficiently “creative” to fall within the scope of copyright protection,
this does not mean that this factor favors the City.
Given the barely creative nature of the City Council Videos, and
their informational purpose, they enjoy very narrow copyright pro-
tection. This factor therefore weighs in favor of a finding of fair use.
c. Amount and Substantiality of the Portion Used
As described above with regards to the first factor, Teixeira uses only
small portions of the total works and uses them for very specific and
particular purposes. In five of the six accused videos, he intersperses
short clips of the City Council Videos between wri en slides, pictures,
other video clips, and his own commentary.
The first and second videos are approximately 15 minutes long
and contain clips from the City Council meeting held on July 20, 2010.
The video of the meeting is more than four hours long. The clips used
in Teixeira’s first two videos, are all under a minute long, and most of
them 15 seconds or less. The videos address issues regarding Mayor
Bu s’ Inglewood residency issues that arose while he was running for
mayor, and his interactions with the City’s Clerk regarding a report
she compiled as to his voter registration and qualification to run for
mayor.
The third video is the shortest of the Teixeira videos at three min-
utes and 43 seconds. It is almost wholly comprised of a single clip
from the City Council meeting on May 22, 2012, at which Mayor
Bu s reads a statement regarding a request for information about a
shooting. This is the longest clip used by Teixeira in any of the ac-
cused videos. Throughout the video there is music added by Teixeira,
but more importantly, his commentary runs along the bo om of the
screen as Bu s talks. Teixeira ridicules Bu s’ physical tics as he talks,
notes his apparent nervousness and stu ering, and specifically iden-
tifies points at which Teixeira alleges Bu s is lying. The full video of
the meeting runs more than three hours.
The City argues that Teixeira fails to meet his supposed burden
of showing that it is “essential” to make the copies for his purpose of
commenting on it. The City contends that each topic area of the City
Council meetings is “an independent and entire work” and Teixeira
cannot show why it is necessary to copy these “entire” works. How-
ever, a review of the videos makes it clear that Teixeira has copied
only the parts of the City Council Videos that serve his purpose of
making comment on them, or criticizing very particular statements
by Bu s. This use of another’s material has been frequently recog-
358 CHAPTER 4. COPYRIGHT
Northland: 868 F. Supp. 2d 962 (C.D. Cal. nized as protected fair use. See Northland Family Planning Clinic, Inc.
2012) v. Center for Bio–Ethical Reform (holding that using verbatim portions
of plaintiff’s pro-abortion video in making a video protesting abor-
tion was fair use). The City’s exceptionally narrow view of an “entire”
work is without merit and contrary to the purpose of the fair use doc-
trine, which permits the use of reasonable quantities of a work for the
purpose of criticism and comment.
Teixeira’s use of the clips from the City Council Videos is limited
to his purpose of criticizing Bu s and the City Council, and comment-
ing on the proceedings of the City Council. Teixeira chooses small
and very specific parts of lengthy proceedings to make his point in
his videos. The extent of his copying is reasonable in light of his pur-
pose. Accordingly, this factor also strongly favors a finding of fair
use.
d. Effect of Use on the Market
This factor strongly favors Teixeira because there is no market for the
City Council Videos and the accused works are not a substitute for
the original works.
The City argues that the factor favors its position because Teix-
eira’s copying denies the City of the opportunity to “recoup its ex-
penses” and “deprives [the City] of potential revenue.” This argu-
ment is without merit and flatly contradicted by the California law
that governs the City’s creation and use of the City Council Videos.
California law prevents public agencies from charging the public
anything more than the “direct costs of duplication” when providing
Cal. Gov. Code § 6253(b) public records.
The City therefore may only collect fees to reimburse for the di-
rect costs of providing copies of any record it creates, including the
City Council Videos. It is specifically barred by law from charging
any fee to recoup the costs of original production. And it is certainly
not permi ed to use the City Council Videos to generate any form of
revenue. There can therefore be no commercial market for the City
Council Videos and no activity by Teixeira can deprive the City of
any revenue.
Because copyright’s purpose is to protect the commercial interest
of authors so as to incentivize the creation of further works the lack
of a market for the City Council Videos suggests that the City has no
interest in copyright protection of the City Council Videos.
Further, even if the City could generate revenue from its works,
Teixeira’s videos are not a substitute. The original works are lengthy,
unadorned videos of City Council meetings. Teixeira’s videos are
considerably shorter, contain even shorter portions of the City Coun-
cil meetings, and are exclusively for the purpose of presenting Teix-
eira’s views and commentary on Inglewood city politics).
F. DEFENSES 359
Accordingly, this factor also strongly favors a finding of fair use.
3. Teixeira’s Videos are Fair Use as a Ma er of Law
Having reviewed the accused videos, the Court determines that—
even assuming the City has any copyright interest to assert—they
are clearly protected by the fair use doctrine. Indeed, the Court can
scarcely conceive of works that are more appropriately protected by
the fair use doctrine and § 107 than the Teixeira Videos. He is en-
gaged in core First Amendment speech commenting on political af-
fairs and ma ers of public concern. To do so, he has taken carefully
selected and short portions of significantly longer works, and embel-
lished them with commentary and political criticism through music,
his voice, and wri en subtitles. Even if California law allowed the
City to assert a copyright claim, Teixeira’s activities plainly fall within
the protections of fair use.
The City accuses Teixeira of wanting “to criticize the City without
doing his own work” by “posting substantially all of the full [City
Council Videos] with [his] comments posted on top of them.” Even
if the City’s characterization of the Teixeira Videos were accurate, fair
use would allow such use for the purpose of commentary.
Fox Broadcasting Co., Inc. v. Dish Network LLC
723 F.3d 1067 (9th Cir. 2013)
Plaintiffs Fox Broadcasting Company, Twentieth Century Fox Film
Corp., and Fox Television Holdings, Inc. (collectively, ”Fox”) own
the copyrights to television shows that air on the Fox television net-
work. Its primetime lineup includes shows such as Glee, Bones, The
Simpsons, and Family Guy. One distributor that Fox contracts with
is Dish Network, the third-largest pay television service provider in
the United States.
In March 2012, Dish released to its customers the Hopper, a set-
top box with digital video recorder (DVR) and video on demand ca-
pabilities. At the same time it released the Hopper, Dish introduced
a feature called PrimeTime Anytime that works only on the Hopper.
PrimeTime Anytime allows a subscriber to set a single timer to record
any and all primetime programming on the four major broadcast net-
works (including Fox) every night of the week. To enable PrimeTime
Anytime, a Hopper user presses the ”*” bu on on the remote control
to reach the PrimeTime Anytime setup screen. The user selects ”En-
able,” and a new menu appears where the viewer can disable record-
ings of certain networks on certain days of the week and change the
length of time that the shows are saved (between two and eight days).
By default, PrimeTime Anytime records primetime shows on all four
networks each night of the week and saves all recordings for eight
days.
In May 2012, Dish started offering a new feature, AutoHop, that al-
360 CHAPTER 4. COPYRIGHT
lows users to automatically skip commercials. AutoHop is only avail-
able on shows recorded using PrimeTime Anytime, typically on the
morning after the live broadcast. It is not available for all primetime
programs. When a user plays back a PrimeTime Anytime recording,
if AutoHop is available, a pop-up screen appears that allows the user
to select the option to ”automatically skip over” commercial breaks.
By default, AutoHop is not selected.
If a customer enables AutoHop, the viewer sees only the first and
last few seconds of each commercial break. A red kangaroo icon
appears in the corner of the screen to demonstrate that AutoHop is
skipping commercials. Unlike the 30-second skip feature available
on many DVRs, once a user has enabled AutoHop, the user does
not press anything to skip through commercials. AutoHop does not
delete commercials from the recording. Customers can see the com-
mercials if they manually rewind or fast-forward into a commercial
break.
Fox sued Dish for copyright infringement and breach of contract
and sought a preliminary injunction. The district court denied the
motion.
The district court did not abuse its discretion in concluding that
Fox was unlikely to succeed on its claim of secondary copyright in-
fringement for the PrimeTime Anytime and AutoHop programs. Sec-
ondary liability for copyright infringement does not exist in the ab-
sence of direct infringement by a third party. Therefore, to establish
secondary liability, Fox must establish that Dish’s users are infring-
ing. There is no dispute that Fox has established a prima facie case
of direct infringement by Dish customers because Fox owns the copy-
rights to its shows and the users make copies. Thus, the burden shifts
to Dish to demonstrate that it is likely to succeed on its affirmative
defense that its customers’ copying was a fair use. Dish has met this
burden.
As the district court recognized, the Supreme Court’s analysis in
Sony provides strong guidance in assessing whether Dish customers’
copying of Fox programs is a ”fair use.” In Sony, the Supreme Court
held that Sony was not liable for secondary infringement for manu-
facturing Betamax VCRs because customers used the machines pri-
marily for time-shifting.
Fox and its amici argue that Dish customers use PrimeTime Any-
time and AutoHop for purposes other than time-shifting – namely,
commercial-skipping and library-building. These uses were briefly
discussed in Sony, in which the Court recognized that some Beta-
max customers used the device to avoid viewing advertisements and
accumulate libraries of tapes. In Sony, about 25 percent of Betamax
users fast-forwarded through commercials. Additionally, a ”substan-
tial number of interviewees had accumulated libraries of tapes.” One
F. DEFENSES 361
user owned about 100 tapes and bought his Betamax intending to
”build a library of casse es,” but this ”proved too expensive.” Be-
cause the Betamax was primarily used for timeshifting, the Court
in Sony never expressly decided whether commercial-skipping and
library-building were fair uses.
Yet, as the district court held, commercial-skipping does not im-
plicate Fox’s copyright interest because Fox owns the copyrights to
the television programs, not to the ads aired in the commercial breaks.
If recording an entire copyrighted program is a fair use, the fact that
viewers do not watch the ads not copyrighted by Fox cannot trans-
form the recording into a copyright violation. Indeed, a recording
made with PrimeTime Anytime still includes commercials; AutoHop
simply skips those recorded commercials unless a viewer manually
rewinds or fast-forwards into a commercial break. Thus, any anal-
ysis of the market harm should exclude consideration of AutoHop
because ad-skipping does not implicate Fox’s copyright interests.
Analyzing PrimeTime Anytime under the fair use factors, Dish
has demonstrated a likelihood of success on its customers’ fair use
defense. As for the first factor, the ”purpose and character of the use,
including whether such use is of a commercial nature or is for non-
profit educational purposes,” Dish customers’ home viewing is non-
commercial under Sony, which held that ”time-shifting for private
home use” was a ”noncommercial, nonprofit activity,” Here, the dis-
trict court found that PrimeTime Anytime is used for time-shifting,
and that the Hopper is available only to private consumers.
Sony also governs the analysis of the second and third factors, the
”nature of the copyrighted work” and ”the amount and substantiality
of the portion used in relation to the copyrighted work as a whole,”
Sony held that ”when one considers the nature of a televised copy-
righted audiovisual work, and that time-shifting merely enables a
viewer to see such a work which he had been invited to witness in
its entirety free of charge, the fact that the entire work is reproduced,
does not have its ordinary effect of militating against a finding of fair
use.” The same analysis applies here, and thus the fact that Dish users
copy Fox’s entire copyrighted broadcasts does not have its ordinary
effect of militating against a finding of fair use.
Finally, we consider the ”effect of the use upon the potential mar-
ket for or value of the copyrighted work.This is the ”most important
element of fair use.” Harper & Row Because Dish customers’ taping
is ”for a noncommercial purpose,” the likelihood of future market
harm is not presumed but ”must be demonstrated.”Sony Fox ”need
only show that if the challenged use should become widespread,
it would adversely affect the potential market for the copyrighted
work.” Harper & Row
Because Fox licenses its programs to distributors such as Hulu and
362 CHAPTER 4. COPYRIGHT
Apple, the market harm analysis is somewhat different than in Sony,
where no such secondary market existed for the copyright-holders’
programs. However, the record before the district court establishes
that the market harm that Fox and its amici allege results from the au-
tomatic commercial-skipping, not the recording of programs through
PrimeTime Anytime. Indeed, Fox often charges no additional license
fees for providers to offer Fox’s licensed video on demand, so long
as providers disable fast-forwarding. This indicates that the ease of
skipping commercials, rather than the on-demand availability of Fox
programs, causes any market harm. And as we have discussed, the
commercial-skipping does not implicate any copyright interest.
Therefore, the district court did not abuse its discretion in conclud-
ing that Fox was unlikely to succeed on its secondary infringement
claim.
Capitol Records, LLC v. ReDigi Inc.
934 F. Supp. 2d 640 (S.D.N.Y. 2013)
On the record before it, the Court has li le difficulty concluding
that ReDigi’s reproduction and distribution of Capitol’s copyrighted
works falls well outside the fair use defense. ReDigi obliquely argues
that uploading to and downloading from the Cloud Locker for stor-
age and personal use are protected fair use. Significantly, Capitol
does not contest that claim. Instead, Capitol asserts only that upload-
ing to and downloading from the Cloud Locker incident to sale fall
outside the ambit of fair use. The Court agrees.
Each of the statutory factors counsels against a finding of fair use.
The first factor requires the Court to determine whether ReDigi’s
use ”transforms” the copyrighted work and whether it is commercial.
Both inquiries disfavor ReDigi’s claim. Plainly, the upload, sale, and
download of digital music files on ReDigi’s website does nothing to
”add[] something new, with a further purpose or different character”
to the copyrighted works. Campbell ReDigi’s use is also undoubtedly
commercial. ReDigi and the uploading user directly profit from the
sale of a digital music file, and the downloading user saves signif-
icantly on the price of the song in the primary market. ReDigi as-
serts that downloads for personal, and not public or commercial, use
”must be characterized as noncommercial, nonprofit activity.” How-
ever, ReDigi twists the law to fit its facts. When a user downloads
purchased files from the Cloud Locker, the resultant reproduction
is an essential component of ReDigi’s commercial enterprise. Thus,
ReDigi’s argument is unavailing.
The second factor – the nature of the copyrighted work – also
weighs against application of the fair use defense, as creative works
like sound recordings are close to the core of the intended copyright
protection and far removed from the ... factual or descriptive work
more amenable to fair use.
F. DEFENSES 363
The third factor – the portion of the work copied – suggests a sim-
ilar outcome because ReDigi transmits the works in their entirety.
Finally, ReDigi’s sales are likely to undercut the market for or
value of the copyrighted work and, accordingly, the fourth factor cuts
against a finding of fair use. The product sold in ReDigi’s secondary
market is indistinguishable from that sold in the legitimate primary
market save for its lower price. The clear inference is that ReDigi
will divert buyers away from that primary market. ReDigi incredibly
argues that Capitol is preempted from making a market-based argu-
ment because Capitol itself condones downloading of its works on
iTunes. Of course, Capitol, as copyright owner, does not forfeit its
right to claim copyright infringement merely because it permits cer-
tain uses of its works. This argument, too, is therefore unavailing.
Chicago HOPE Problem
Compare Shepard Fairey’s famous Obama “HOPE” poster with the
photograph he used as a starting point. Assume that the photo-
graph’s copyright is owned by the Associated Press, which used it
to illustrate a news story about a campaign event and then offered it
for licensing through a stock photography bureau. Assume further
that Fairey created the poster to support Obama, that he then licensed
it for free to the Obama campaign, that the campaign has given out Obama “HOPE” poster by Shepard
Fairey
tens of thousands of prints to supporters and it has been distributed
widely for free online. And finally, note that Fairey became signifi-
cantly more famous as a result of the poster and the publicity it re-
ceived, and that he initially lied under oath in trying to conceal the
fact that he had used the photograph as a source. Fair use?
3 Section 512
Copyright Act
(c) Information Residing on Systems or Networks At Direction of
Users.—
(1) In general.— A service provider shall not be liable for mon-
etary relief, or, except as provided in subsection (j), for in-
junctive or other equitable relief, for infringement of copy-
right by reason of the storage at the direction of a user of
material that resides on a system or network controlled Obama photograph by Mannie Garcia
or operated by or for the service provider, if the service
provider— …
(C) upon notification of claimed infringement as de- 17 U.S.C. § 512
Limitations on liability relating to ma-
scribed in paragraph (3), responds expeditiously to re- terial online
364 CHAPTER 4. COPYRIGHT
move, or disable access to, the material that is claimed
to be infringing or to be the subject of infringing activ-
ity.
(2) Designated agent.— The limitations on liability estab-
lished in this subsection apply to a service provider only if
the service provider has designated an agent to receive no-
tifications of claimed infringement described in paragraph
(3), by making available through its service, including on
its website in a location accessible to the public, and by pro-
viding to the Copyright Office, substantially the following
information:
(A) the name, address, phone number, and electronic mail
address of the agent.
(B) other contact information which the Register of Copy-
rights may deem appropriate. …
(3) Elements of notification.—
(A) To be effective under this subsection, a notification
of claimed infringement must be a wri en communi-
cation provided to the designated agent of a service
provider that includes substantially the following:
(i) A physical or electronic signature of a person au-
thorized to act on behalf of the owner of an exclu-
sive right that is allegedly infringed.
(ii) Identification of the copyrighted work claimed to
have been infringed, or, if multiple copyrighted
works at a single online site are covered by a single
notification, a representative list of such works at
that site.
(iii) Identification of the material that is claimed to be
infringing or to be the subject of infringing activity
and that is to be removed or access to which is to be
disabled, and information reasonably sufficient to
permit the service provider to locate the material.
(iv) Information reasonably sufficient to permit the ser-
vice provider to contact the complaining party,
such as an address, telephone number, and, if
available, an electronic mail address at which the
complaining party may be contacted.
(v) A statement that the complaining party has a good
faith belief that use of the material in the manner
complained of is not authorized by the copyright
owner, its agent, or the law.
F. DEFENSES 365
(vi) A statement that the information in the notification
is accurate, and under penalty of perjury, that the
complaining party is authorized to act on behalf
of the owner of an exclusive right that is allegedly
infringed. …
UMG Recordings, Inc. v. Shelter Capital Partners
667 F.3d 1022 (9th Cir. 2011)
Veoh Networks (Veoh) operates a publicly accessible website that en-
ables users to share videos with other users. When a video is up-
loaded, various automated processes take place. Veoh’s software
automatically breaks down the video file into smaller 256-kilobyte
”chunks,” which facilitate making the video accessible to others.
Veoh’s software also automatically converts, or ”transcodes,” the
video file into Flash 7 format. This is done because ”the vast majority
of internet users have software that can play videos” in this format.
Veoh’s computers also automatically extract metadata from in-
formation users provide to help others locate the video for viewing.
Users can provide a title, as well as tags or keywords that describe the
video, and can also select pre-set categories describing the video, such
as ”music,” ”faith” or ”politics.” The Veoh system then automatically
assigns every uploaded video a ”permalink,” or web address, that
uniquely identifies the video and makes it available to users. Veoh
employees do not review the user-submi ed video, title or tags be-
fore the video is made available.
Veoh employs various technologies to automatically prevent
copyright infringement on its system. In 2006, Veoh adopted ”hash
filtering” software. Whenever Veoh disables access to an infringing
video, the hash filter also automatically disables access to any identi-
cal videos and blocks any subsequently submi ed duplicates. Veoh
also began developing an additional filtering method of its own, but
in 2007 opted instead to adopt a third-party filtering solution pro-
duced by a company called Audible Magic. Audible Magic’s technol-
ogy takes audio ”fingerprints” from video files and compares them
to a database of copyrighted content provided by copyright holders.
If a user a empts to upload a video that matches a fingerprint from
Audible Magic’s database of forbidden material, the video never be-
comes available for viewing. Approximately nine months after begin-
ning to apply the Audible Magic filter to all newly uploaded videos,
Veoh applied the filter to its backlog of previously uploaded videos.
This resulted in the removal of more than 60,000 videos, including
some incorporating UMG’s works. Veoh has also implemented a pol-
icy for terminating users who repeatedly upload infringing material,
and has terminated thousands of user accounts.
Despite Veoh’s efforts to prevent copyright infringement on its
366 CHAPTER 4. COPYRIGHT
system, both Veoh and UMG agree that some of Veoh’s users were
able to download unauthorized videos containing songs for which
UMG owns the copyright. The parties also agree that before UMG
filed its complaint, the only notices Veoh received regarding alleged
infringements of UMG’s works were sent by the Recording Indus-
try Association of America (RIAA). The RIAA notices listed specific
videos that were allegedly infringing, and included links to those
videos. The notices did not assert rights to all works by the identi-
fied artists, and did not mention UMG. UMG does not dispute that
Veoh removed the material located at the links identified in the RIAA
notices.
In September 2007, UMG filed suit against Veoh for direct, vicari-
ous and contributory copyright infringement, and for inducement of
infringement.
A
We must first decide whether the functions automatically performed
by Veoh’s software when a user uploads a video fall within the mean-
ing of ”by reason of the storage at the direction of a user.” 17 U.S.C.
§ 512(c)(1). Although UMG concedes that ”[s]torage on comput-
ers involves making a copy of the underlying data,” it argues that
”nothing in the ordinary definition of ‘storage’ encompasses” the
automatic processes undertaken to facilitate public access to user-
uploaded videos. Facilitation of access, UMG argues, goes beyond
”storage.” Therefore the creation of chunked and Flash files and the
streaming and downloading of videos fall outside § 512(c).
By its terms, § 512(c) presupposes that service providers will pro-
vide access to users’ stored material, and we would thus contravene
the statute if we held that such access disqualified Veoh from the safe
harbor. Section 512(c) codifies a detailed notice and takedown pro-
cedure by which copyright holders inform service providers of in-
fringing material accessible through their sites, and service providers
then ”disable access to” such materials. This carefully considered
protocol, and the statute’s a endant references to ”disabl[ing] ac-
cess” to infringing materials would be superfluous if we accepted
UMG’s constrained reading of the statute. Indeed, it is not clear how
copyright holders could even discover infringing materials on service
providers’ sites to notify them as the protocol dictates if § 512(c) did
not contemplate that there would be access to the materials.
The technological processes involved in providing web hosting
services require those service providers to make, transmit and down-
load multiple copies of users’ stored materials. To create a website,
the user uploads content to the web host’s computers, which make
an initial copy. Then, when another Internet user wants to access the
website by clicking a link or entering the URL, all the website’s rel-
F. DEFENSES 367
evant content is transmi ed to the user’s computer, where another
copy is automatically made by the user’s web browser software in
order to assemble the materials for viewing and listening. To carry
out their function of making websites available to Internet users, web
hosting services thus routinely copy content and transmit it to Inter-
net users. We cannot see how these access-facilitating processes are
meaningfully distinguishable from Veoh’s for § 512(c)(1) purposes.
B
It is undisputed that, until the filing of this lawsuit, UMG had not
identified to Veoh any specific infringing video available on Veoh’s
system. Nevertheless, UMG contends that Veoh hosted a category of
copyrightable content – music – for which it had no license from any
major music company. UMG argues Veoh thus must have known
this content was unauthorized, given its general knowledge that its
services could be used to post infringing material. UMG urges us to
hold that this sufficiently demonstrates knowledge of infringement.
We cannot, for several reasons.
As an initial ma er, contrary to UMG’s contentions, there are
many music videos that could in fact legally appear on Veoh. Among
the types of videos subject to copyright protection but lawfully avail-
able on Veoh’s system were videos with music created by users and
videos that Veoh provided pursuant to arrangements it reached with
major copyright holders, such as SonyBMG. If merely hosting mate-
rial that falls within a category of content capable of copyright pro-
tection, with the general knowledge that one’s services could be used
to share unauthorized copies of copyrighted material, was sufficient
to impute knowledge to service providers, the § 512(c) safe harbor
would be rendered a dead le er: § 512(c) applies only to claims of
copyright infringement, yet the fact that a service provider’s website
contained copyrightable material would remove the service provider
from § 512(c) eligibility.
These considerations are reflected in Congress’ decision to enact a
notice and takedown protocol encouraging copyright holders to iden-
tify specific infringing material to service providers. They are also
evidenced in the ”exclusionary rule” that prohibits consideration of
substantially deficient § 512(c)(3)(A) notices for purposes of ”deter-
mining whether a service provider has actual knowledge or is aware
of facts and circumstances from which infringing activity is apparent.. 17 U.S.C. § 512(c)(3)(B)(i)
We therefore hold that merely hosting a category of copyrightable
content, such as music videos, with the general knowledge that one’s
services could be used to share infringing material, is insufficient to
meet the actual knowledge requirement under § 512(c)(1)(A)(i).
We reach the same conclusion with regard to the § 512(c)(1)(A)(ii)
inquiry into whether a service provider is ”aware of facts or cir-
368 CHAPTER 4. COPYRIGHT
cumstances from which infringing activity is apparent.” The district
court’s conception of this ”red flag test” properly followed our analy-
CCBill: 488 F.3d 1102 (9th Cir. 2007) sis in Perfect 10, Inc. v. CCBill LLC, which reiterated that the burden re-
mains with the copyright holder rather than the service provider. The
plaintiffs in CCBill argued that there were a number of red flags that
made it apparent infringing activity was afoot, noting that the defen-
dant hosted sites with names such as ”illegal.net” and ”stolencelebri-
typics.com,” as well as password hacking websites, which obviously
infringe. We disagreed that these were sufficient red flags because
”we do not place the burden of determining whether materials are ac-
tually illegal on a service provider,” and ”we impose no such inves-
tigative duties on service providers.” For the same reasons, we hold
that Veoh’s general knowledge that it hosted copyrightable material
and that its services could be used for infringement is insufficient to
constitute a red flag.
We are not persuaded that UMG’s other purported evidence of
Veoh’s actual or apparent knowledge of infringement warrants trial.
First, UMG points to the tagging of videos on Veoh’s service as ”mu-
sic videos.” Relying on the theory rejected above, UMG contends that
this demonstrates Veoh’s knowledge that it hosted a category of in-
fringing content. Relatedly, UMG argues that Veoh’s purchase of
certain search terms through the Google AdWords program demon-
strates knowledge of infringing activity because some of the terms
purchased, such as ”50 Cent,” ”Avril Lavigne” and ”Britney Spears,”
are the names of UMG artists. However, artists are not always in ex-
clusive relationships with recording companies, so just because UMG
owns the copyrights for some Britney Spears songs does not mean
it owns the copyright for all Britney Spears songs. Indeed, 50 Cent,
Avril Lavigne and Britney Spears are also affiliated with Sony-BMG,
which gave Veoh permission to stream its videos by these artists. Fur-
thermore, even if Veoh had not had such permission, we recognize
that companies sometimes purchase search terms they believe will
lead potential customers to their websites even if the terms do not
describe goods or services the company actually provides. For exam-
ple, a sunglass company might buy the search terms ”sunscreen” or
”vacation” because it believed that people interested in such searches
would often also be interested in sunglasses. Accordingly, Veoh’s
search term purchases do li le to demonstrate that it knew it hosted
infringing material.
UMG comes closer to meeting the § 512(c)(1)(A) requirements
with its evidence of emails sent to Veoh executives and investors
by copyright holders and users identifying infringing content. One
email, sent by the CEO of Disney, a major copyright holder, to
Michael Eisner, a Veoh investor, stated that the movie Cinderella III
and various episodes from the television show Lost were available
F. DEFENSES 369
on Veoh without Disney’s authorization. If this notification had come
from a third party, such as a Veoh user, rather than from a copyright
holder, it might meet the red flag test because it specified particu-
lar infringing material. As a copyright holder, however, Disney is
subject to the notification requirements in § 512(c)(3), which this in-
formal email failed to meet. Accordingly, this deficient notice ”shall
not be considered under paragraph (1)(A) in determining whether a
service provider has actual knowledge or is aware of facts or circum-
stances from which infringing activity is apparent.”. Further, even if 17 U.S.C. § 512(c)(3)(B)(i)
this email could have created actual knowledge or qualified as a red
flag, Eisner’s email in response assured Disney that he would instruct
Veoh to ”take it down,” and Eisner copied Veoh’s founder to ensure
this happened ”right away.” UMG nowhere alleges that the offend-
ing material was not immediately removed, and accordingly Veoh
would be saved by § 512(c)(1)(A)(iii), which preserves the safe har-
bor for service providers with such knowledge so long as they ”act[]
expeditiously to remove, or disable access to, the material.”
C
UMG appeals the district court’s determination that Veoh did not
have the necessary right and ability to control infringing activity and
thus remained eligible for safe harbor protection.
As discussed in the knowledge context, it is not enough for a ser-
vice provider to know as a general ma er that users are capable of
posting unauthorized content; more specific knowledge is required.
Similarly, a service provider may, as a general ma er, have the le-
gal right and necessary technology to remove infringing content, but
until it becomes aware of specific unauthorized material, it cannot
exercise its ”power or authority” over the specific infringing item. In
practical terms, it does not have the kind of ability to control infring-
ing activity the statute contemplates.
Our reading of § 512(c)(1)(B) is informed and reinforced by our
concern that the statute would be internally inconsistent were we to
interpret the ”right and ability to control” language as UMG urges.
First, § 512(m) cuts against holding that Veoh’s general knowledge
that infringing material could be uploaded to its site triggered an obli-
gation to ”police” its services to the ”fullest extent” possible. As we
have explained, § 512(m) provides that § 512(c)’s safe harbor protec-
tion may not be conditioned on ”a service provider monitoring its
service or affirmatively seeking facts indicating infringing activity.”
UMG’s reading of the ”right and ability to control” language would
similarly run afoul of CCBill, , which likewise clarified that § 512(c)
”impose[s] no such investigative duties on service providers,” and
”place[s] the burden of policing copyright infringement ... squarely
on the owners of the copyright.” We are not persuaded by UMG’s
370 CHAPTER 4. COPYRIGHT
suggestion that Congress meant this limitation on the duty to mon-
itor to apply only to service providers who do not receive a direct
financial benefit under subsection (B). Rather, we conclude that a ser-
vice provider must be aware of specific infringing material to have
the ability to control that infringing activity within the meaning of §
512(c)(1)(B). Only then would its failure to exercise its ability to con-
trol deny it a safe harbor.
Second, § 512(c) actually presumes that service providers have the
sort of control that UMG argues satisfies the § 512(c)(1)(B) ”right and
ability to control” requirement: they must ”remove[] or disable ac-
cess to” infringing material when they become aware of it. 17 U.S.C.
§ 512(c)(1)(A)(iii) & (C). UMG argues that service providers have ”the
right and ability to control” infringing activity, § 512(c)(1)(B), as long
as they have ”the ability to locate infringing material” and ”terminate
users’ access.” Under that reading, service providers would have the
”right and ability to control” infringing activity regardless of their be-
coming ”aware of” the material. Under that interpretation, the pre-
requisite to § 512(c) protection under § 512(c)(1)(A)(iii) and (C), would
at the same time be a disqualifier under § 512(c)(1)(B). Congress could
not have intended for courts to hold that a service provider loses im-
munity under the safe harbor provision of the DMCA because it en-
gages in acts that are specifically required by the DMCA.
Accordingly, we hold that the ”right and ability to control” under
§ 512(c) requires control over specific infringing activity the provider
knows about. A service provider’s general right and ability to remove
materials from its services is, alone, insufficient. Of course, a service
provider cannot willfully bury its head in the sand to avoid obtain-
ing such specific knowledge. Viewing the evidence in the light most
favorable to UMG, as we must here, we agree with the district court
there is no evidence that Veoh acted in such a manner. Rather, the evi-
dence demonstrates that Veoh promptly removed infringing material
when it became aware of specific instances of infringement. Although
the parties agree, in retrospect, that at times there was infringing ma-
terial available on Veoh’s services, the DMCA recognizes that service
providers who are not able to locate and remove infringing materi-
als they do not specifically know of should not suffer the loss of safe
harbor protection.
4 Statutory Licenses
WPIX, Inc. v. ivi, Inc.
691 F.3d 275 (2d Cir. 2012)
On September 13, 2010, ivi began streaming plaintiffs’ copyrighted
programming over the Internet, live, for profit, and without plain-
tiffs’ consent. ivi began by retransmi ing signals from approxi-
F. DEFENSES 371
mately thirty New York and Sea le broadcast television stations; by
February 2, 2011, ivi was also retransmi ing signals from stations in
Chicago and Los Angeles. Within five months of its launch, ivi had of-
fered more than 4,000 of plaintiffs’ copyrighted television programs
to its subscribers.
Specifically, ivi captured and retransmi ed plaintiffs’ copy-
righted television programming live and over the Internet to paying
ivi subscribers who had downloaded ivi’s ”TV player” on their com-
puters for a monthly subscription fee of $4.99 (following a 30-day free
trial). For an additional fee of $0.99 per month, subscribers were able
to record, pause, fast-forward, and rewind ivi’s streams.
Almost immediately after ivi’s launch, several affected program
owners and broadcast stations sent cease-and-desist le ers to ivi. ivi
responded to these le ers on or about September 17, 2010, purport-
ing to justify its operations on the ground that it was a cable system
entitled to a compulsory license under § 111 of the Copyright Act.
Section 111(c)(1) of the Copyright Act provides:
Secondary transmissions to the public by a cable system 17 U.S.C. § 111(c)(1)
of a performance or display of a work embodied in a pri-
mary transmission made by a broadcast station licensed
by the Federal Communications Commission ... shall be
subject to statutory licensing upon compliance with the
requirements of subsection (d) where the carriage of the
signals comprising the secondary transmission is permis-
sible under the rules, regulations, or authorizations of the
Federal Communications Commission.
A ”cable system” is defined as:
a facility, located in any State, territory, trust territory, or 17 U.S.C. § 111(f )(3)
possession of the United States, that in whole or in part re-
ceives signals transmi ed or programs broadcast by one
or more television broadcast stations licensed by the Fed-
eral Communications Commission, and makes secondary
transmissions of such signals or programs by wires, ca-
bles, microwave, or other communications channels to
subscribing members of the public who pay for such ser-
vice. For purposes of determining the royalty fee under
subsection (d)(1), two or more cable systems in contigu-
ous communities under common ownership or control or
operating from one headend shall be considered as one
system.
Based on the statutory text alone, it is simply not clear whether
a service that retransmits television programming live and over the
Internet constitutes a cable system under § 111. That is, it is unclear
372 CHAPTER 4. COPYRIGHT
whether such a service (1) is or utilizes a ”facility” (2) that receives
and retransmits signals (3) through wires, cables, microwave, or other
communication channels.
The legislative history indicates that Congress enacted § 111 with
the intent to address the issue of poor television reception, or, more
specifically, to mitigate the difficulties that certain communities and
households faced in receiving over-the-air broadcast signals by en-
abling the expansion of cable systems.
Through § 111’s compulsory license scheme, Congress intended
to support localized – rather than nationwide – systems that use cable
or optical fibers to transmit signals through a physical, point-to-point
connection between a transmission facility and the television sets of
individual subscribers.
Congress did not, however, intend for § 111’s compulsory license
to extend to Internet transmissions. Indeed, the legislative history in-
dicates that if Congress had intended to extend § 111’s compulsory
license to Internet retransmissions, it would have done so expressly –
either through the language of § 111 as it did for microwave retrans-
missions or by codifying a separate statutory provision as it did for
17 U.S.C. §§ 111, 119 satellite carriers.
To the extent that there is any doubt as to Congress’s intent, how-
ever, we conclude that the position of the Copyright Office eliminates
such doubt in its entirety. The Copyright Office is the administra-
tive agency charged with overseeing § 111’s compulsory licensing
scheme. Although Congress has not expressly delegated authority
to the Copyright Office to make rules carrying the force of law, agen-
cies charged with applying a statute certainly may influence courts
facing questions the agencies have already answered.
The Copyright Office has consistently concluded that Internet re-
transmission services are not cable systems and do not qualify for §
111 compulsory licenses. The Copyright Office has maintained that
§ 111’s compulsory license for cable systems is intended for localized
retransmission services; under this interpretation, Internet retrans-
mission services are not entitled to a § 111 license. In light of the
Copyright Office’s expertise, the validity of its reasoning, the consis-
tency of its earlier and later pronouncements, and the consistency of
its opinions with Congress’s purpose in enacting § 111, we conclude
that the Copyright Office’s position is reasonable and persuasive.
Fox Television Stations, Inc. v. AereoKiller
115 F. Supp. 3d 1152 (C.D. Cal. 2015)
The Copyright Office is not the only agency involved in this issue. As
the Copyright Office acknowledged, the FCC is considering new reg-
ulations in this area. Those potential regulations are relevant in two
ways to this case; one direct and one indirect. The direct way is that
§ 111 requires that the retransmission be permissible under FCC reg-
F. DEFENSES 373
ulations. Currently, Plaintiffs point to no ways in which Defendants
are in violation of FCC regulations. There simply do not appear to
be any that address Defendants’ particular transmissions, and Plain-
tiffs have made no showing that Defendants are in violation of any
more general regulations, for example, of the type we all comply with
by operating devices bearing this familiar inscription; ”This device
complies with part 15 of the FCC Rules. Operation is subject to the
following two conditions: (1) This device may not cause harmful in-
terference, and (2) this device must accept any interference received,
including interference that may cause undesired operation.” 47 C.F.R. § 15.19
The indirect way that the FCC proceedings are relevant is that the
FCC is considering whether internet-based services qualify as ”mul-
tichannel video programming distributors” under communications
law. Plaintiffs argue that the FCC’s potential future rules are irrele-
vant, as they will not extend a § 111 license to anybody. That might
be literally true, but nevertheless the Copyright Office thinks the FCC
proceedings are relevant to that question. In any event, the proposed
rules appear to provide a parallel path to program access for inter-
net retransmi ers. The NPM proposes to modernize the FCC’s inter-
pretation of the term ”multichannel video programming distributor
(”MVPD”) by including with its scope services that make available
for purchase, by subscribers or customers, multiple linear streams of
video programming, regardless of the technology used to distribute
the programming. This is intended to ”enable cable operators to
untether their video offerings from their current infrastructure, and
could encourage them to migrate their traditional services to Internet
delivery.” The NPM also requests comment on whether the proposed
retransmission consent rules would ”force broadcasters to negotiate
with and license their signals to potentially large numbers of Internet-
based distributors.”
Defendants emphasize this second, indirect involvement by the
FCC, and represent that they will comply with any applicable regula-
tions that arise out of this rulemaking. What the FCC might or might
not do does not directly impact the analysis here, which is necessarily
grounded in current law. Nonetheless, the rulemaking again empha-
sizes that this is not the only forum in which these issues are being
debated, and that this is not the only forum for resolving them.
Other notable statutory licenses include a parallel licensing regime
for satellite broadcasts, §§ 119 and 121; several music-licensing
regimes, § 114 (webcasting), § 115 (cover versions), and § 116 (juke-
boxes); and a system of negotiated royalties for works used in non-
commercial broadcasting, § 118.
374 CHAPTER 4. COPYRIGHT
5 Miscellaneous
Copyright Act
§ 108
(a) Except as otherwise provided in this title, it is not an infringe-
Limitations on exclusive rights: Repro- ment of copyright for a library or archives, or any of its employ-
duction by libraries and archives ees acting within the scope of their employment, to reproduce
no more than one copy or phonorecord of a work, except as
provided in subsections (b) and (c), or to distribute such copy
or phonorecord, under the conditions specified by this section,
if –
(1) the reproduction or distribution is made without any pur-
pose of direct or indirect commercial advantage;
(2) the collections of the library or archives are (i) open to the
public, or (ii) available not only to researchers affiliated
with the library or archives or with the institution of which
it is a part, but also to other persons doing research in a spe-
cialized field; and
(3) the reproduction or distribution of the work includes a no-
tice of copyright …
§ 121(a)
It is not an infringement of copyright for an authorized entity to re-
Limitations on exclusive rights: Repro- produce or to distribute copies or phonorecords of a previously pub-
duction for blind or other people with lished, nondramatic literary work if such copies or phonorecords are
disabilities reproduced or distributed in specialized formats exclusively for use
by blind or other persons with disabilities.
5
Music
Music copyright could be a course unto itself. Its doctrines bear the References on music copyright and the
scars of a long and ambivalent history. As you read the chapter, keep music business include Al Kohn & Bob
Kohn, Kohn on Music Licensing, Kohn
three distinctions in mind: between musical works (think sheet mu-
and Donald S. Passman, All You Need to
sic) and sound recordings (think CDs and MP3s), between reproduc- Know About the Music Business, Pass-
ing a work and performing it, and between state and federal law. man
Copyright law has explored every possible variation and combina-
tion of the three. One does not simply walk into music copyright.
But first, a word on the music industry.
Steve Albini (1993)
The Problem with Music
Whenever I talk to a band who are about to sign with a major label,
I always end up thinking of them in a particular context. I imagine
a trench, about four feet wide and five feet deep, maybe sixty yards
long, filled with runny, decaying shit. I imagine these people, some of
them good friends, some of them barely acquaintances, at one end of
this trench. I also imagine a faceless industry lackey at the other end
holding a fountain pen and a contract waiting to be signed. Nobody
can see what’s printed on the contract. It’s too far away, and besides,
the shit stench is making everybody’s eyes water. The lackey shouts
to everybody that the first one to swim the trench gets to sign the
contract. Everybody dives in the trench and they struggle furiously
to get to the other end. Two people arrive simultaneously and be-
gin wrestling furiously, clawing each other and dunking each other
under the shit. Eventually, one of them capitulates, and there’s only
one contestant left. He reaches for the pen, but the Lackey says “Actu-
ally, I think you need a li le more development. Swim again, please.
Backstroke.” And he does of course. …
The Balance Sheet: This is how much each player got paid at the end of the
game.
• Record company: $ 710,000
376 CHAPTER 5. MUSIC
• Producer: $ 90,000
• Manager: $ 51,000
• Studio: $ 52,500
• Previous label: $ 50,000
• Agent: $ 7,500
• Lawyer: $ 12,000
• Band member net income each: $ 4,031.25
The band is now ¹⁄₄ of the way through its contract, has made the
music industry more than 3 million dollars richer, but is in the hole
$ 14,000 on royalties. The band members have each earned about ¹⁄₃
as much as they would working at a 7-11, but they got to ride in a
tour bus for a month. The next album will be about the same, except
that the record company will insist they spend more time and money
on it. Since the previous one never “recouped,” the band will have
no leverage, and will oblige. The next tour will be about the same,
except the merchandising advance will have already been paid, and
the band, strangely enough, won’t have earned any royalties from
their T-shirts yet. Maybe the T-shirt guys have figured out how to
count money like record company guys. Some of your friends are
probably already this fucked.
A Musical Works and Sound Recordings
(Unpublished draft 2014)
Robert Brauneis
Musical Work Copyright for the Era of Digital Sound Technology
Throughout history, plenty of music has been made and transmit-
ted from generation to generation without wri en scores. Musicians
working within what might be called folk traditions learn music by
listening to performances and imitating them, often repeatedly with
the guidance and corrections of a formal or informal teacher, until
they have them more-or-less fixed in memory. At another extreme,
mechanical musical devices, such as music boxes, musical clocks,
and mechanical organs, have existed for centuries. Such musical au-
tomata make music without any human performance at all, and the
musical pa erns are fixed, not in wri en notation or human mem-
ory, but in physical arrangements such as pins placed on a barrel or
perforations made on a disc.
During the nineteenth century and into the early decades of the
twentieth century, however, the dominant model of musical practice
cast music as a two-stage art, necessarily comprised of two funda-
mentally different activities: composition and performance. Compo-
sition was a deliberative activity that allowed rethinking and editing.
A. MUSICAL WORKS AND SOUND RECORDINGS 377
Its end product was a wri en score, a stable, visually perceptible set
of prescriptions for musicians to follow. Scores virtually universally
used a system of notation – Western staff or stave notation – which is
mainly discrete: composers choose between an F and an F sharp, or
between a quarter note and an eighth note, instead of se ing pitches
or durations along a continuum. However, staff notation typically
indicates relative rather than absolute pitch and duration, and also
gives inexact cues about ma ers such as dynamics (loudness), articu-
lation (legato and staccato rendering of note sequences), timbre, and
so on. Thus, it leaves room for – and requires – interpretive choices
in performance.
Performance contrasts with composition in many respects. While
a score is stable and visually perceptible, performance is unrepeat-
able, evanescent, and aural. While composition is a deliberative pro-
cess that allows for trial-and-error editing, performance is a real-time,
low-deliberation, no-editing activity.
As printing costs dropped and pianos proliferated in upper-
middle class parlors around the country, printed musical scores be-
gan to play an important and profitable role in the dissemination of
music into millions of homes. While some of those scores came from
the European classical tradition, the biggest sellers were sheet music
of popular songs, in simple arrangements that could be performed
by a single amateur pianist-vocalist. Most of the music copyright lit-
igation through the middle of the twentieth century was about such
popular sheet music, and it is fair to say that the conception of mu-
sic copyright held by several generations of judges was influenced by
sheet music of that type.
White-Smith Music Publishing Co. v. Apollo Co.
209 U.S. 1 (1908)
The actions were brought to restrain infringement of the copyrights of
two certain musical compositions, published in the form of sheet mu-
sic, entitled, respectively, ”Li le Co on Dolly” and ”Kentucky Babe.”
The appellee, defendant below, is engaged in the sale of piano play-
ers and player pianos, known as the ”Apollo,” and of perforated rolls
of music used in connection therewith.
Without entering into a detailed discussion of the mechanical con-
struction of such instruments and rolls, it is enough to say that the mu-
sical rolls consist of perforated sheets, which are passed over ducts in
such manner that the same are kept sealed until, by means of perfo-
rations in the rolls, air pressure is admi ed to sound the notes. This
is done with the aid of an operator, upon whose skill and experience
the success of the rendition largely depends. As the roll is drawn, the
effect is to produce the melody or tune for which the roll has been
cut.
Musical compositions have been the subject of copyright protec-
378 CHAPTER 5. MUSIC
tion since the statute of February 3, 1831, and laws have been passed
including them since that time. The action was brought under the
provisions of the copyright act, § 4952, giving to the author, inventor,
designer or proprietor of any book, map, chart, dramatic or musical
composition the sole liberty of printing, reprinting, publishing, com-
pleting, copying, executing, finishing and vending the same.
What is meant by a copy? Various definitions have been given
by the experts called in the case. The one which most commends
itself to our judgment is perhaps as clear as can be made, and defines
a copy of a musical composition to be ”a wri en or printed record
of it in intelligible notation.” It may be true that in a broad sense a
mechanical instrument which reproduces a tune copies it; but this is
a strained and artificial meaning. When the combination of musical
sounds is reproduced to the ear it is the original tune as conceived by
the author which is heard. These musical tones are not a copy which
appeals to the eye.
After all, what is the perforated roll? The fact is clearly established
in the testimony in this case that even those skilled in the making of
these rolls are unable to read them as musical compositions, as those
in staff notation are read by the performer. It is true that there is some
testimony to the effect that great skill and patience might enable the
operator to read his record as he could a piece of music wri en in
staff notation. But the weight of the testimony is emphatically the
other way, and they are not intended to be read as an ordinary piece
of sheet music, which to those skilled in the art conveys, by reading,
in playing or singing, definite impressions of the melody.
These perforated rolls are parts of a machine which, when duly
applied and properly operated in connection with the mechanism to
which they are adapted, produce musical tones in harmonious combi-
nation. But we cannot think that they are copies within the meaning
of the copyright act.
It may be true that the use of these perforated rolls, in the absence
of statutory protection, enables the manufacturers thereof to enjoy
the use of musical compositions for which they pay no value. But
such considerations properly address themselves to the legislative
and not to the judicial branch of the Government.
Copyright Office
(2011)
Federal Copyright Protection for Pre-1972 Sound Recordings
The 1909 Copyright Act, passed the following year, granted copy-
right owners of musical compositions rights with respect to mechan-
ical reproductions of their compositions, for example, in records or
piano rolls.
While the 1909 Act provided protection for copyright holders
of musical compositions whose works were reproduced in sound
A. MUSICAL WORKS AND SOUND RECORDINGS 379
recordings, it included no explicit protection for sound recordings per
se. As a result, over the subsequent decades the courts and the Copy-
right Office consistently refused to recognize copyright in sound
recordings. In the absence of federal protection, states provided pro-
tection against duplication of sound recordings under common law
theories, usually unfair competition or common law copyright.
The general copyright revision process became stalled in the late
1960s and early 1970s. Congress, persuaded that the situation con-
cerning sound recordings was becoming urgent, decided to bring
sound recordings under the federal copyright law without waiting
for the overall revision. On November 15, 1971 it passed the Sound
Recording Amendment, which for the first time made sound record-
ings eligible for federal copyright. The effective date of the Sound
Recording Amendment was February 15, 1972, four months after it
was passed. It applied to sound recordings first fixed on or after that
date.
Copyright Act
… Works of authorship include the following categories: § 102
(2) musical works, including any accompanying words; Subject matter of copyright; In general
(7) sound recordings;
“Sound recordings” are works that result from the fixation of a series § 101
of musical, spoken, or other sounds, but not including the sounds Definitions
accompanying a motion picture or other audiovisual work, regard-
less of the nature of the material objects, such as disks, tapes, or other
phonorecords, in which they are embodied.
Lydia Pallas Loren
53 Case W. L. Rev. 637 (2003)
Untangling the Web of Music Copyrights
Currently, a sound recording embodies both the work that is pro-
tected by the sound recording copyright and the work that is pro-
tected by the musical work copyright. In copyright terms, the sound
recording is a derivative work based on the musical work.
Courts have recognized that reproducing or publicly performing
a derivative work also constitutes a reproduction or performance of
the work, or works, on which the derivative work is based. In mu-
sic, if a webcasting radio station wishes to utilize sound recordings
of musical works, the station must obtain permission from both the
sound recording copyright owners and the musical work copyright
owners.
380 CHAPTER 5. MUSIC
To the extent that music copyright is divided between musical works
and sound recordings, it becomes necessary to distinguish them and
to allocate authorship between them.
Newton v. Diamond
388 F.3d 1189 (9th Cir. 2004)
The plaintiff and appellant in this case, James W. Newton, is an ac-
complished avant-garde jazz flutist and composer. In 1978, he com-
posed the song ”Choir,” a piece for flute and voice intended to in-
corporate elements of African-American gospel music, Japanese cer-
emonial court music, traditional African music, and classical music,
among others. According to Newton, the song was inspired by his
earliest memory of music, watching four women singing in a church
in rural Arkansas. In 1981, Newton performed and recorded ”Choir”
and licensed all rights in the sound recording to ECM Records for
$5,000. The license covered only the sound recording, and it is undis-
puted that Newton retained all rights to the composition of ”Choir.”
Sound recordings and their underlying compositions are separate
works with their own distinct copyrights.
The defendants and appellees include the members of the rap and
hip-hop group Beastie Boys, and their business associates. In 1992,
Beastie Boys obtained a license from ECM Records to use portions
of the sound recording of ”Choir” in various renditions of their song
”Pass the Mic” in exchange for a one-time fee of $1,000. Beastie Boys
did not obtain a license from Newton to use the underlying composi-
tion. Pursuant to their license from ECM Records, Beastie Boys digi-
tally sampled the opening six seconds of Newton’s sound recording
of ”Choir.” Beastie Boys repeated or ”looped” this six-second sam-
ple as a background element throughout ”Pass the Mic,” so that it
appears over forty times in various renditions of the song.
The portion of the composition at issue consists of three notes,
C—D flat—C, sung over a background C note played on the flute.
The score to ”Choir” also indicates that the entire song should be
played in a ”largo/senza-misura” tempo, meaning ”slowly/without-
measure.”
Because the defendants were authorized to use the sound record-
ing, our inquiry is confined to whether the unauthorized use of the
composition itself was substantial enough to sustain an infringement
claim. Therefore, we may consider only Beastie Boys’ appropriation
of the song’s compositional elements and must remove from consid-
eration all the elements unique to Newton’s performance. Stated an-
other way, we must ”filter out” the licensed elements of the sound
recording to get down to the unlicensed elements of the composition,
as the composition is the sole basis for Newton’s infringement claim.
In filtering out the unique performance elements from considera-
tion, and separating them from those found in the composition, we
A. MUSICAL WORKS AND SOUND RECORDINGS 381
find substantial assistance in the testimony of Newton’s own experts,
[who] reveal the extent to which the sound recording of ”Choir” is
the product of Newton’s highly developed performance techniques,
rather than the result of a generic rendition of the composition. As
a general ma er, according to Newton’s expert Dr. Christopher Do-
brian, ”the contribution of the performer is often so great that s/he
in fact provides as much musical content as the composer.” This is
particularly true with works like ”Choir,” given the improvisational
nature of jazz performance and the minimal scoring of the composi-
tion. Indeed, as Newton’s expert Dr. Oliver Wilson explained:
The copyrighted score of ”Choir”, as is the custom in
scores wri en in the jazz tradition, does not contain indi-
cations for all of the musical subtleties that it is assumed
the performer-composer of the work will make in the
work’s performance. The function of the score is more
mnemonic in intention than prescriptive.
And it is clear that Newton goes beyond the score in his performance.
For example, Dr. Dobrian declared that ”Mr. Newton blows and
sings in such a way as to emphasize the upper partials of the flute’s
complex harmonic tone, although such a modification of tone color
is not explicitly requested in the score.” Dr. Dobrian also concludes
that Newton ”uses breath control to modify the timbre of the sus-
tained flute note rather extremely” and ”uses portamento to glide ex-
pressively from one pitch to another in the vocal part.” Dr. Dobrian
concedes that these elements do not appear in the score, and that they
are part of Newton’s performance of the piece.
A crucial problem with the testimony of Newton’s experts is that
they continually refer to the ”sound” produced by the ”Newton tech-
nique.” A sound is protected by copyright law only when it is ”fixed
in a tangible medium.” 17 U.S.C. § 102(a). Here, the only time any
sound was fixed in a tangible medium was when a particular per-
formance was recorded. Newton’s copyright extends only to the el-
ements that he fixed in a tangible medium – those that he wrote on
the score. Thus, regardless of whether the average audience might The court seems to be either assum-
recognize the ”Newton technique” at work in the sampled sound ing or asserting that Newton's musi-
cal work copyright is coextensive with
recording, those performance elements are beyond consideration in
what is in the written score. Is that
Newton’s claim for infringement of his copyright in the underlying right? Note that musical works can be
composition. fixed in sheet music, in phonorecords,
On the undisputed facts of this record, no reasonable juror could or as part of an audiovisual work (e.g. a
find the sampled portion of the composition to be a quantitatively movie), and the Copyright Office will al-
low any of these to be used as a deposit
or qualitatively significant portion of the composition as a whole.
copy. See Copyright Compendium §
Quantitatively, the three-note sequence appears only once in New- 1509.2(A) (3d ed. 2014). Would New-
ton’s composition. When played, the segment lasts six seconds and ton have been better off never writing
is roughly two percent of the four-and-a-half-minute ”Choir” sound out sheet music for "Choir" at all?
382 CHAPTER 5. MUSIC
recording licensed by Beastie Boys. Qualitatively, this section of the
composition is no more significant than any other section. Indeed,
with the exception of two notes, the entirety of the scored portions of
”Choir” consist of notes separated by whole and half-steps from their
neighbors and is played with the same technique of singing and play-
ing the flute simultaneously; the remainder of the composition calls
for sections of improvisation that range between 90 and 180 seconds
in length.
On the undisputed facts of this case, we conclude that an aver-
age audience would not discern Newton’s hand as a composer, apart
from his talent as a performer, from Beastie Boys’ use of the sample.
The copying was not significant enough to constitute infringement.
B Reproductions
1 Musical Works
The ordinary rules of copyright mostly apply to the reproduction
right in musical works. The notable exception is the statutory ”cover
For historical reasons -- which you can version” license in § 115 that allows others to record and sell sound
probably guess -- these licenses are recordings if they pay a fixed royalty to the copyright owner of the
known as "mechanicals."
musical work.
Copyright Act
§ 115(a)
(1) When phonorecords of a nondramatic musical work have been
Scope of exclusive rights in nondra- distributed to the public in the United States under the authority
matic musical works: Compulsory of the copyright owner, any other person … may, by complying
license for making and distributing with the provisions of this section, obtain a compulsory license
phonorecords to make and distribute phonorecords of the work. …
(2) A compulsory license includes the privilege of making a musi-
cal arrangement of the work to the extent necessary to conform
it to the style or manner of interpretation of the performance in-
volved, but the arrangement shall not change the basic melody
or fundamental character of the work, and shall not be subject
to protection as a derivative work under this title, except with
the express consent of the copyright owner.
§ 801(b)
Subject to the provisions of this chapter, the functions of the Copy-
Copyright Royalty Judges; appoint- right Royalty Judges shall be as follows:
ment and functions (1) To make determinations and adjustments of reasonable terms
The judges are commonly referred to as and rates of royalty payments as provided in sections 112(e),
the "Copyright Royalty Board" or CRB.
114, 115, 116, 118, 119, and 1004. The rates applicable under
B. REPRODUCTIONS 383
sections 114(f)(1)(B), 115, and 116 shall be calculated to achieve
the following objectives:
(A) To maximize the availability of creative works to the pub-
lic.
(B) To afford the copyright owner a fair return for his or her
creative work and the copyright user a fair income under
existing economic conditions.
(C) To reflect the relative roles of the copyright owner and the
copyright user in the product made available to the public
with respect to relative creative contribution, technological
contribution, capital investment, cost, risk, and contribu-
tion to the opening of new markets for creative expression
and media for their communication.
(D) To minimize any disruptive impact on the structure of the
industries involved and on generally prevailing industry
practices.
Code of Federal Regulations
(a) Physical phonorecord deliveries and permanent digital downloads. – 37 C.F.R. § 385.3 (2015)
For every physical phonorecord and permanent digital down- Royalty rates for making and distribut-
load made and distributed, the royalty rate payable for each ing phonorecords.
work embodied in such phonorecord shall be either 9.1 cents
or 1.75 cents per minute of playing time or fraction thereof,
whichever amount is larger.
(b) Ringtones. – For every ringtone made and distributed, the roy-
alty rate payable for each work embodied therein shall be 24
cents.
Lydia Pallas Loren
53 Case W. L. Rev. 637 (2003)
Untangling the Web of Music Copyrights
Most creators of phonorecords do not use the compulsory license
mechanism to obtain permission to use musical works. In 1927 the
National Music Publishers Company created the Harry Fox Agency,
a wholly owned subsidiary, to issue and administer mechanical li-
censes. Today, most mechanical licenses are obtainde through the
Harry Fox Agency. The Harry Fox Agency has authority to issue li- Harry Fox is now owned by SESAC, one
censes only for those musical works for which Harry Fox has been of the performing rights organizations
discussed below.
granted authority by the copyright owner to act on the copyright
owner’s behalf. However, the number of copyright owners that have
entered into such agreements is staggering: Harry Fox represents
over 27,000 music publishers, who in turn represent the interests of
more than 160,000 songwriters, who own more than 2.5 million copy-
384 CHAPTER 5. MUSIC
righted musical works.
While the creators of most sound recordings do not utilize the
statutory provisions for the compulsory mechanical license, the avail-
ability of such a license does affect the rate paid under a license
granted by Harry Fox and the terms of the license. The parties to the
licenses administered by Harry Fox are negotiating in the shadow of
the compulsory license that both parties know could be used instead.
Thus, for example, it is rare that the agreed license rate exceeds the
rate set by the Copyright Office.
Leadsinger, Inc. v. BMG Music Pub.
512 F.3d 522 (9th Cir. 2008)
Karaoke devices necessarily involve copyrighted works because both
musical compositions and their accompanying song lyrics are essen-
tial to their operation. BMG owns or administers copyrights in mu-
sical compositions and through its licensing agent, the Harry Fox
Agency, has issued to Leadsinger compulsory mechanical licenses to
copyrighted musical compositions under § 115 of the Copyright Act.
In addition to the mechanical fee required to secure a compulsory li-
cense, BMG has demanded that Leadsinger and other karaoke compa-
Why a fee for printing lyrics? Does this nies pay a ”lyric reprint” fee and a ”synchronization fee.” Leadsinger
demand make more sense if you re- has refused to pay these additional fees and filed for declaratory judg-
member that recorded music used to
ment to resolve whether it has the right to visually display song lyrics
be primarily distributed on black plas-
tic discs in cardboard sleeves? in real time with song recordings without holding anything more
than the § 115 compulsory licenses it already possesses.
In its complaint, Leadsinger describes the karaoke device it man-
ufactures as ”an all-in-one microphone player” that has recorded
songs imbedded in a microchip in the microphone. When the micro-
phone is plugged into a television, the lyrics of the song appear on
the television screen in real time as the song is playing, enabling the
consumer to sing along with the lyrics. Though most karaoke com-
panies put their recordings on casse es, compact discs, or use a com-
pact disc + graphic (”CD + G”) or DVD format, these other karaoke
devices, much like Leadsinger’s, display lyrics visually when played
in a device that is connected to a television.
While it is true that the microchip in Leadsinger’s device stores vi-
sual images and visual representations of lyrics in addition to sounds,
the plain language of the Copyright Act does not expressly pre-
clude a finding that devices on which sounds and visual images are
fixed fall within the definition of phonorecords. The definition of
phonorecords is explicit, however, that audiovisual works are not
phonorecords and are excluded from § 115’s compulsory licensing
scheme. We need not se le upon a precise interpretation of § 101’s
definition of phonorecords in this case because Leadsinger’s karaoke
device meets each element of the statutory definition of audiovisual
works and, therefore, cannot be a phonorecord.
B. REPRODUCTIONS 385
As stated above, § 101 of the Copyright Act defines audiovisual
works as works consisting of ”a series of related images” that are
”intrinsically intended to be shown by the use of machines.” First, "Timed relation" is the crucial operative
the visual representation of successive portions of song lyrics that phrase of the typical "synchronization
license" used to license a musical work
Leadsinger’s device projects onto a television screen constitutes ”a se-
for use in a movie, television show, or
ries of related images.” Though Leadsinger suggests that its images of other audiovisual work. The phrase is
song lyrics are not related, the images bear a significant relationship not in the Copyright Act, but a little
when examined in context. In its complaint, Leadsinger explained thought about the nature of musical
that the purpose of karaoke is for the consumer to sing the lyrics to a and audiovisual works shows why the
element of timing is key. The standard
song ”in real time” as the song is playing. To accomplish this purpose,
phrase used to describe the analogous
it is necessary that the images of song lyrics be presented sequentially license for the use of a sound record-
so as to match the accompanying music and make the lyrics readable. ing as part of an audiovisual work is a
We hold that Leadsinger’s device falls within the definition of an "master use license" -- the idea being
audiovisual work. As a result, in addition to any § 115 compulsory that the copyright owner allows the li-
censee to use the "master" recordings,
licenses necessary to make and distribute phonorecords, Leadsinger from which the copies sold commer-
is also required to secure synchronization licenses to display images cially are made. The phrase is mildly
of song lyrics in timed relation with recorded music. anachronistic in an age of digital pro-
duction.
2 Sound Recordings
Copyright Act
The exclusive right of the owner of copyright in a sound recording
17 U.S.C. § 114(b)
under clause (1) of section 106 is limited to the right to duplicate the Scope of exclusive rights in sound
sound recording in the form of phonorecords or copies that directly recordings
or indirectly recapture the actual sounds fixed in the recording. The
exclusive right of the owner of copyright in a sound recording under
clause (2) of section 106 is limited to the right to prepare a derivative
work in which the actual sounds fixed in the sound recording are re-
arranged, remixed, or otherwise altered in sequence or quality. The
exclusive rights of the owner of copyright in a sound recording un-
der clauses (1) and (2) of section 106 do not extend to the making or
duplication of another sound recording that consists entirely of an in-
dependent fixation of other sounds, even though such sounds imitate
or simulate those in the copyrighted sound recording.
Everyone agrees that under § 114(b), reproductions of sound record-
ings are to be judged by a different standard of similarity than other
types of works. But they disagree on what that standard is.
Bridgeport Music, Inc. v. Dimension Films
This action arises out of the use of a sample from the composition 410 F.3d 792 (6th Cir. 2005)
and sound recording ”Get Off Your Ass and Jam” (”Get Off”) in the
386 CHAPTER 5. MUSIC
rap song ”100 Miles and Runnin’” (”100 Miles”), which was included
in the sound track of the movie I Got the Hook Up (Hook Up). The
recording ”Get Off” opens with a three-note combination solo guitar
”riff” that lasts four seconds. According to one of plaintiffs’ experts,
Randy Kling, the recording ”100 Miles” contains a sample from that
guitar solo. Specifically, a two-second sample from the guitar solo
was copied, the pitch was lowered, and the copied piece was ”looped”
and extended to 16 beats. Kling states that this sample appears in the
sound recording ”100 Miles” in five places; specifically, at 0:49, 1:52,
2:29, 3:20 and 3:46. By the district court’s estimation, each looped
segment lasted approximately 7 seconds.
Bridgeport and Westbound claim to own the musical composition
and sound recording copyrights in ”Get Off Your Ass and Jam” by
George Clinton, Jr. and the Funkadelics. We assume, as did the dis-
trict court, that plaintiffs would be able to establish ownership in the
copyrights they claim. There seems to be no dispute either that ”Get
Off” was digitally sampled or that the recording ”100 Miles” was in-
cluded on the sound track of I Got the Hook Up.
Although musical compositions have always enjoyed copyright
protection, it was not until 1971 that sound recordings were subject
to a separate copyright. If one were to analogize to a book, it is not
the book, i.e., the paper and binding, that is copyrightable, but its
contents. There are probably any number of reasons why the deci-
sion was made by Congress to treat a sound recording differently
from a book even though both are the medium in which an original
work is fixed rather than the creation itself. None the least of them
certainly were advances in technology which made the ”pirating” of
sound recordings an easy task. The balance that was struck was to
give sound recording copyright holders the exclusive right ”to dupli-
cate the sound recording in the form of phonorecords or copies that
directly or indirectly recapture the actual sounds fixed in the record-
ing.” This means that the world at large is free to imitate or simulate
the creative work fixed in the recording so long as an actual copy of
the sound recording itself is not made. That leads us directly to the
issue in this case. If you cannot pirate the whole sound recording, can
you ”lift” or ”sample” something less than the whole. Our answer to
that question is in the negative.
To begin with, there is ease of enforcement. Get a license or do
not sample. We do not see this as stifling creativity in any significant
way. It must be remembered that if an artist wants to incorporate a
”riff” from another work in his or her recording, he is free to dupli-
cate the sound of that ”riff” in the studio. Second, the market will con-
trol the license price and keep it within bounds. The sound recording
copyright holder cannot exact a license fee greater than what it would
cost the person seeking the license to just duplicate the sample in the
B. REPRODUCTIONS 387
course of making the new recording. Third, sampling is never acci-
dental. It is not like the case of a composer who has a melody in his
head, perhaps not even realizing that the reason he hears this melody
is that it is the work of another which he had heard before. When you
sample a sound recording you know you are taking another’s work
product.12
This analysis admi edly raises the question of why one should,
without infringing, be able to take three notes from a musical com-
position, for example, but not three notes by way of sampling from a
sound recording. Why is there no de minimis taking or why should
substantial similarity not enter the equation. Our first answer to this
question is what we have earlier indicated. We think this result is
dictated by the applicable statute. Second, even when a small part of
a sound recording is sampled, the part taken is something of value.
No further proof of that is necessary than the fact that the producer of
the record or the artist on the record intentionally sampled because it
would (1) save costs, or (2) add something to the new recording, or (3)
both. For the sound recording copyright holder, it is not the ”song”
but the sounds that are fixed in the medium of his choice. When those
sounds are sampled they are taken directly from that fixed medium.
It is a physical taking rather than an intellectual one.
This case also illustrates the kind of mental, musicological, and
technological gymnastics that would have to be employed if one were
to adopt a de minimis or substantial similarity analysis. The district
judge did an excellent job of navigating these troubled waters, but not
without dint of great effort. When one considers that he has hundreds
of other cases all involving different samples from different songs, the
value of a principled bright-line rule becomes apparent.
VMG Salsoul, LLC v. Ciccone
824 F.3d 871 (9th Cir. 2016)
In the early 1990s, pop star Madonna Louise Ciccone, commonly
known by her first name only, released the song Vogue to great com-
mercial success. In this copyright infringement action, Plaintiff VMG
Salsoul, LLC, alleges that the producer of Vogue, Shep Pe ibone,
copied a 0.23-second segment of horns from an earlier song, known as
Love Break, and used a modified version of that snippet when record-
ing Vogue. Plaintiff asserts that Defendants Madonna, Pe ibone, and
others thereby violated Plaintiff’s copyrights to Love Break.
Plaintiff has submi ed evidence of actual copying. In particular,
Tony Shimkin has sworn that he, as Pe ibone’s personal assistant,
helped with the creation of Vogue and that, in Shimkin’s presence,
12
The opinion in Grand Upright Music Ltd. v. Warner Bros. Records, Inc., 780 F.
Supp. 182 (S.D.N.Y. 1991), one of the first cases to deal with digital sampling, begins
with the phrase, ”Thou shalt not steal.”
388 CHAPTER 5. MUSIC
Pe ibone directed an engineer to introduce sounds from Love Break
into the recording of Vogue. Additionally, Plaintiff submi ed reports
from music experts who concluded that the horn hits in Vogue were
sampled from Love Break.
Plaintiff argues that even if the copying here is trivial, that fact is ir-
relevant because the de minimis exception does not apply to infringe-
ments of copyrighted sound recordings. Plaintiff urges us to follow
the Sixth Circuit’s decision in Bridgeport, which adopted a brightline
rule: For copyrighted sound recordings, any unauthorized copying –
no ma er how trivial – constitutes infringement.
We squarely held in Newton that the de minimis exception applies
to claims of infringement of a copyrighted composition. But it is an
open question in this circuit whether the exception applies to claims
of infringement of a copyrighted sound recording.
A straightforward reading of the third sentence in S 114(b) re-
veals Congress’ intended limitation on the rights of a sound record-
ing copyright holder: A new recording that mimics the copyrighted
recording is not an infringement, even if the mimicking is very well
done, so long as there was no actual copying. That is, if a band played
and recorded its own version of Love Break in a way that sounded
very similar to the copyrighted recording of Love Break, then there
would be no infringement so long as there was no actual copying of
the recorded Love Break. But the quoted passage does not speak to
the question that we face: whether Congress intended to eliminate
the longstanding de minimis exception for sound recordings in all cir-
cumstances even where, as here, the new sound recording as a whole
sounds nothing like the original.
We disagree [with Bridgeport’s ”physical taking” analysis] for
three reasons. First, the possibility of a ”physical taking” exists with
respect to other kinds of artistic works as well, such as photographs,
Sandoval: 147 F.3d 215 (2d Cir. 1998) as to which the usual de minimis rule applies. See, e.g., Sandoval v.
New Line Cinema Corp. (affirming summary judgment to the defen-
dant because the defendant’s use of the plaintiff’s photographs in
a movie was de minimis). A computer program can, for instance,
”sample” a piece of one photograph and insert it into another photo-
graph or work of art. We are aware of no copyright case carving out
an exception to the de minimis requirement in that context, and we
can think of no principled reason to differentiate one kind of ”phys-
ical taking” from another. Second, even accepting the premise that
sound recordings differ qualitatively from other copyrighted works
and therefore could warrant a different infringement rule, that the-
oretical difference does not mean that Congress actually adopted a
different rule. Third, the distinction between a ”physical taking” and
an ”intellectual one,” premised in part on ”saving costs” by not hav-
ing to hire musicians, does not advance the Sixth Circuit’s view. The
C. PERFORMANCES 389
Supreme Court has held unequivocally that the Copyright Act pro-
tects only the expressive aspects of a copyrighted work, and not the
”fruit of the [author’s] labor.” Feist. Indeed, the Supreme Court in
Feist explained at length why, though that result may seem unfair,
protecting only the expressive aspects of a copyrighted work is ac-
tually a key part of the design of the copyright laws. Accordingly,
all that remains of Bridgeport’s argument is that the second artist has
taken some expressive content from the original artist. But that is al-
ways true, regardless of the nature of the work, and the de minimis
test nevertheless applies.
We hold that the ”de minimis” exception applies to actions alleg-
ing infringement of a copyright to sound recordings.
C Performances
If the only quirk of music copyright were the division between com- On performances and copyright, see
position and performance, there would be no need for this chapter. generally Rebecca Tushnet, Perfor-
mance Anxiety: Copyright Embodied
Other arts also routinely distinguish between source text and perfor-
and Disembodied, 60 J. Copyright
mance: theater, dance, television, and film all routinely split author- Soc'y 209 (2013); Michael W. Carroll,
ship between writer and performer. But music copyright is unique Copyright’s Creative Hierarchy in the
in the degree to which reproduction and performance are governed Performing Arts, 14 Vand. J. Ent. & Tech.
by startlingly different rules. So we start with a quick hit on the tech- L. 797 (2012).
nical difference between reproduction and performance according to
the Copyright Act.
United States v. American Society of Composers, Authors, and
Publishers
627 F.3d 64 (2d Cir. 2010)
Yahoo! and RealNetworks offer their customers the ability to down-
load musical works over the Internet. It is undisputed that these
downloads create copies of the musical works, for which the parties
agree the copyright owners must be compensated. However, the par-
ties dispute whether these downloads are also public performances
of the musical works, for which the copyright owners must separately
and additionally be compensated. The district court held that these
downloads are not public performances, and we agree.
The downloads at issue in this appeal are not musical perfor-
mances that are contemporaneously perceived by the listener. They
are simply transfers of electronic files containing digital copies from
an on-line server to a local hard drive. The downloaded songs are not
performed in any perceptible manner during the transfers; the user
must take some further action to play the songs after they are down-
loaded. Because the electronic download itself involves no recitation,
rendering, or playing of the musical work encoded in the digital trans-
mission, we hold that such a download is not a performance of that
work, as defined by § 101.
390 CHAPTER 5. MUSIC
The Internet Companies’ stream[ing] transmissions, which all par-
ties agree constitute public performances, illustrate why a download
Some podcasting apps let you start lis- is not a public performance. A stream is an electronic transmission
tening to an episode before it is com- that renders the musical work audible as it is received by the client-
pletely downloaded. Reproduction,
computer’s temporary memory. This transmission, like a television
performance, or both?
or radio broadcast, is a performance because there is a playing of
the song that is perceived simultaneously with the transmission. In
contrast, downloads do not immediately produce sound; only af-
ter a file has been downloaded on a user’s hard drive can he per-
ceive a performance by playing the downloaded song. Unlike musi-
cal works played during radio broadcasts and stream transmissions,
downloaded musical works are transmi ed at one point in time and
performed at another. Transmi al without a performance does not
constitute a public performance.
1 Musical Works
The general rule is that permission of the copyright owner is required
to perform a musical work. But in practice, most uses – including
broadcasting – are covered by a blanket license issued by one of the
”performing rights organizations” (PROs): ASCAP, BMI, and SESAC.
Musical-work copyright owners sign up with one of the three PROs,
if they wish, which then issues public- performance licenses for all
of the works in its ”repertory,” i.e., one license allows the licensee
to perform any musical work available through that PRO. The copy-
right owners still control the licensing of their other rights, and they
are free to negotiate public-performance licenses individually as well.
We first discuss the scope of public-performance rights in musical
works, then focus on the role of the PROs, and finish with a few mis-
cellaneous cases: jukeboxes and music stores.
a Broadcasting and Receiving
Buck v. Jewell-LaSalle Realty Co.
283 U.S. 191 (1931)
These suits were brought in the federal court for western Missouri by
the American Society of Composers, Authors and Publishers, and one
of its members, against the Jewell-LaSalle Realty Company, which op-
erates the LaSalle Hotel at Kansas City. The hotel maintains a master
radio receiving set which is wired to each of the public and private
rooms. As part of the service offered to its guests, loud-speakers or
head-phones are provided so that a program received on the master
set can, if desired, be simultaneously heard throughout the building.
Among the programs received are those transmi ed by Wilson Dun-
can who operates a duly licensed commercial broadcasting station
in the same city. Duncan selects his own programs and broadcasts
C. PERFORMANCES 391
them for profit. There is no arrangement of any kind between him
and the hotel. Both were notified by the plaintiff society of the exis-
tence of its copyrights and were advised that unless a license were ob-
tained, performance of any copyrighted musical composition owned
by its members was forbidden. Thereafter, a copyrighted popular
song, owned by the plaintiffs, was repeatedly broadcast by Duncan
and was received by the hotel company and made available to its
guests.
Although the art of radio broadcasting was unknown at the time
the Copyright Act of 1909 was passed, and the means of transmission
and reception now employed are wholly unlike any then in use, it is
not denied that such broadcasting may be within the scope of the Act.
The argument here urged, however, is that since the transmi ing of a
musical composition by a commercial broadcasting station is a public
performance for profit, control of the initial radio rendition exhausts
the monopolies conferred – both that of making copies (including
records) and that of giving public performances for profit (including
mechanical performances from a record); and that a monopoly of the
reception, for commercial purposes, of this same rendition is not war-
ranted by the Act. The analogy is invoked of the rule under which
an author who permits copies of his writings to be made cannot, by
virtue of his copyright, prevent or restrict the transfer of such copies.
Compare Bobbs-Merrill. This analogy is inapplicable. It is true that con-
trol of the sale of copies is not permi ed by the Act, but a monopoly
is expressly granted of all public performances for profit.
The defendant next urges that it did not perform, because there
can be but one actual performance each time a copyrighted selection
is rendered; and that if the broadcaster is held to be a performer, one
who, without connivance, receives and distributes the transmi ed se-
lection cannot also be held to have performed it. But nothing in the
Act circumscribes the meaning to be a ributed to the term ”perfor-
mance,” or prevents a single rendition of a copyrighted selection from
resulting in more than one public performance for profit. While this
may not have been possible before the development of radio broad-
casting, the novelty of the means used does not lessen the duty of the
courts to give full protection to the monopoly of public performance
for profit which Congress has secured to the composer. No reason is
suggested why there may not be more than one liability. And since
the public reception for profit in itself constitutes an infringement,
we have no occasion to determine under what circumstances a broad-
caster will be held to be a performer, or the effect upon others of his
paying a license fee. 17 U.S.C. § 110
Limitations on exclusive rights: Exemp-
Copyright Act tion of certain performances and dis-
plays
392 CHAPTER 5. MUSIC
Notwithstanding the provisions of section 106, the following are not
infringements of copyright:
(5) (A) except as provided in subparagraph (B), communication
of a transmission embodying a performance or display of
a work by the public reception of the transmission on a
single receiving apparatus of a kind commonly used in pri-
(B) allows "establishments," i.e. busi- vate homes, unless
nesses open to the public, of less than
2,000ft2 (3,750ft2 for restaurants and
(i) a direct charge is made to see or hear the transmission;
bars) to play the musical works in ra- or
dio and TV broadcasts using any equip- (ii) the transmission thus received is further transmi ed
ment. Larger establishments can use
to the public;
up to 6 loudspeakers or 4 screens of no
more than 55�.
b The Performing Rights Organizations
Broadcast Music, Inc. v. Columbia Broadcasting System, Inc.
441 U.S. 1 (1979)
Since 1897, the copyright laws have vested in the owner of a copy-
righted musical composition the exclusive right to perform the work
publicly for profit, but the legal right is not self-enforcing. In 1914,
Victor Herbert and a handful of other composers organized ASCAP
because those who performed copyrighted music for profit were so
numerous and widespread, and most performances so fleeting, that
as a practical ma er it was impossible for the many individual copy-
right owners to negotiate with and license the users and to detect
unauthorized uses. ASCAP was organized as a ”clearing-house” for
copyright owners and users to solve these problems associated with
the licensing of music. As ASCAP operates today, its 22,000 members
grant it nonexclusive rights to license nondramatic performances of
their works, and ASCAP issues licenses and distributes royalties to
copyright owners in accordance with a schedule reflecting the nature
and amount of the use of their music and other factors.
BMI, a nonprofit corporation owned by members of the broad-
casting industry, was organized in 1939, is affiliated with or repre-
sents some 10,000 publishing companies and 20,000 authors and com-
posers, and operates in much the same manner as ASCAP. Almost
every domestic copyrighted composition is in the repertory either of
ASCAP, with a total of three million compositions, or of BMI, with
one million.
Both organizations operate primarily through blanket licenses,
which give the licensees the right to perform any and all of the com-
positions owned by the members or affiliates as often as the licensees
desire for a stated term. Fees for blanket licenses are ordinarily a per-
centage of total revenues or a flat dollar amount, and do not directly
depend on the amount or type of music used. Radio and television
broadcasters are the largest users of music, and almost all of them
C. PERFORMANCES 393
hold blanket licenses from both ASCAP and BMI.
The complaint filed by CBS charged various violations of the Sher-
man Act and the copyright laws. CBS argued that ASCAP and BMI
are unlawful monopolies and that the blanket license is illegal price
fixing, an unlawful tying arrangement, a concerted refusal to deal,
and a misuse of copyrights.
The Department of Justice first investigated allegations of anti-
competitive conduct by ASCAP over 50 years ago. In separate com-
plaints in 1941, the United States charged that the blanket license,
which was then the only license offered by ASCAP and BMI, was an
illegal restraint of trade and that arbitrary prices were being charged
as the result of an illegal copyright pool. The Government sought to
enjoin ASCAP’s exclusive licensing powers and to require a different
form of licensing by that organization. The case was se led by a con-
sent decree that imposed tight restrictions on ASCAP’s operations.
Following complaints relating to the television industry, successful
private litigation against ASCAP by movie theaters, and a Govern-
ment challenge to ASCAP’s arrangements with similar foreign orga-
nizations, the 1941 decree was reopened and extensively amended in
1950.
Under the amended decree, which still substantially controls the
activities of ASCAP, members may grant ASCAP only nonexclusive
rights to license their works for public performance. Members, there-
fore, retain the rights individually to license public performances,
along with the rights to license the use of their compositions for other
purposes. ASCAP itself is forbidden to grant any license to perform
one or more specified compositions in the ASCAP repertory unless
both the user and the owner have requested it in writing to do so.
ASCAP is required to grant to any user making wri en application a
nonexclusive license to perform all ASCAP compositions, either for
a period of time or on a per-program basis. ASCAP may not insist on
the blanket license, and the fee for the per-program license, which is
to be based on the revenues for the program on which ASCAP mu-
sic is played, must offer the applicant a genuine economic choice be-
tween the per-program license and the more common blanket license.
If ASCAP and a putative licensee are unable to agree on a fee within
60 days, the applicant may apply to the District Court for a determi-
nation of a reasonable fee, with ASCAP having the burden of proving
reasonableness.
CBS would prefer that ASCAP be authorized, indeed directed, to
make all its compositions available at standard per-use rates within
negotiated categories of use. But if this in itself or in conjunction with
blanket licensing constitutes illegal price fixing by copyright owners,
CBS urges that an injunction issue forbidding ASCAP to issue any
blanket license or to negotiate any fee except on behalf of an individ-
394 CHAPTER 5. MUSIC
ual member for the use of his own copyrighted work or works. Thus,
we are called upon to determine that blanket licensing is unlawful
across the board. We are quite sure, however, that the per se rule
does not require any such holding.
The blanket license, as we see it, is not a naked restraint of trade
with no purpose except stifling of competition, but rather accompa-
nies the integration of sales, monitoring, and enforcement against
unauthorized copyright use. As we have already indicated, ASCAP
and the blanket license developed together out of the practical situa-
tion in the marketplace: thousands of users, thousands of copyright
owners, and millions of compositions. Most users want unplanned,
rapid, and indemnified access to any and all of the repertory of com-
positions, and the owners want a reliable method of collecting for the
use of their copyrights. Individual sales transactions in this industry
are quite expensive, as would be individual monitoring and enforce-
ment, especially in light of the resources of single composers. Indeed,
as both the Court of Appeals and CBS recognize, the costs are pro-
hibitive for licenses with individual radio stations, nightclubs, and
restaurants, and it was in that milieu that the blanket license arose.
ASCAP, in short, made a market in which individual composers are
inherently unable to compete fully effectively.
With this background in mind, which plainly enough indicates
that over the years, and in the face of available alternatives, the blan-
ket license has provided an acceptable mechanism for at least a large
part of the market for the performing rights to copyrighted musical
compositions, we cannot agree that it should automatically be de-
clared illegal in all of its many manifestations.
ASCAP 2010 Radio Station License Agreement
Available on the ASCAP website
The term of this Agreement commences as of January 1, 2010, and
1 ends on December 31, 2016, unless earlier terminated as hereinafter
Term provided.
A. “ASCAP Repertory” means musical works for which ASCAP
2
Definitions. has the right to license for public performance now or hereafter
during the term of this Agreement. All compositions wri en
and copyrighted by ASCAP members and in the repertory on
the date this Agreement is executed are included for the full
term of this Agreement. Compositions wri en or copyrighted
by ASCAP members during the license term are included for
the full balance of the term.
3.
ASCAP Grant of Rights and Limitations.
C. PERFORMANCES 395
A. ASCAP grants LICENSEE a non-exclusive Through-to-the-
Audience License to perform publicly in the U.S. Territory, A "through-to-the-audience" license is
by Radio Broadcasting or New Media Transmissions, non- defined in the ASCAP consent judg-
ment: it covers each intermediary in
dramatic performances of all musical works in the ASCAP
privity with LICENSEE until the trans-
Repertory during the Term. mission reaches its audience.
B. If you elect to pay a license fee on the blanket basis for your
4.
Radio Broadcasting, subject to the election provisions of Para-
License Fee; Minimum Fee; Taxes. …
graphs 6.A and 6.B below, you agree to pay us a license fee of
1.7% of your Revenue Subject to Fee from Radio Broadcasting
for each year 2012 through 2016 of the Agreement.
G. Minimum Fee. In no event shall your total annual license fee be
less than $588.
H. Annual Reports. You will submit a report of the license fee due
for each year 2012 through 2016 of this Agreement, by April 1st
of the following year, by fully completing the Statement of Ac-
count that will be made available on ASCAP’s website. For the
avoidance of any doubt, all Annual Reports must be submi ed
using the electronic format and Internet-based delivery trans-
mission methodology to be developed by ASCAP.
Range Road Music, Inc. v. East Coast Foods, Inc.
668 F.3d 1148 (9th Cir. 2012)
East Coast owns and operates the Roscoe’s House of Chicken
and Waffles chain of restaurants in Southern California. The co-
defendant, Herbert Hudson, is the sole officer and director of East
Coast.
The Long Beach Roscoe’s opened in 2001. A ached to the restau-
rant is a bar and lounge area called the ”Sea Bird Jazz Lounge.”
Though the parties dispute whether East Coast owns the Long Beach
Roscoe’s, as it does the other locations, Hudson submi ed a signed
liquor license application for the Long Beach Roscoe’s to the Califor-
nia Department of Alcoholic Beverage Control in 2001, which named
the applicant as ”East Coast Foods Inc.”
Shortly after the Long Beach Roscoe’s opened, ASCAP contacted
East Coast to offer it a license to perform music by ASCAP members
at the restaurant and lounge. East Coast did not purchase a license,
and between 2001 and 2007 East Coast ignored repeated requests
from ASCAP to pay licensing fees. In 2008, ASCAP engaged an inde-
pendent investigator, Sco Greene, to visit the Long Beach Roscoe’s,
make notes of his visit, and prepare a detailed investigative report in-
dicating whether copyright infringement was occurring at the venue.
Greene, who considers himself knowledgeable about every genre of
music ”except heavy metal and explicit rap,” had conducted over 300
investigations for ASCAP when he was retained for the Roscoe’s job.
396 CHAPTER 5. MUSIC
Greene visited Roscoe’s on May 30, 2008. During his visit, he
surreptitiously noted the musical compositions performed by that
night’s live musical act, Azar Lawrence & the L.A. Legends, as well as
songs played from a CD over the lounge’s sound system. During the
live performance, he was able to personally identify the jazz composi-
tions ”All or Nothing at All,” ”It’s Easy To Remember,” ”My Favorite
Things,” and ”Be-Bop,” all popularly associated with John Coltrane.
In several cases, the band leader announced the titles of the songs
before playing them. Greene also identified four songs by the jazz-
fusion group Hiroshima that played on the venue’s CD player: ”Bop-
Hop,” ”Once Before I Sleep,” ”One Fine Day,” and ”Only Love.” He
did not personally recognize the Hiroshima songs, but he approached
the CD player and transcribed the titles directly from the CD jewel
case as the songs played.
After Greene submi ed his investigative report, ASCAP con-
firmed that the Music Companies own validly registered copyrights
to all eight of the songs Greene identified. The Music Companies
sued East Coast and Hudson for eight counts of copyright infringe-
ment, corresponding to the eight songs Greene heard publicly per-
formed at the Long Beach Roscoe’s.
We agree with the district court that East Coast and Hudson are
jointly and severally liable for the infringement. Overwhelming ev-
idence showed that East Coast and Hudson exercised control over
both the Long Beach Roscoe’s and the Sea Bird Jazz Lounge, and de-
rived a financial benefit from the musical performances in the lounge.
Robert Stigwood Grp., Ltd. v. Sperber
457 F.2d 50 (2d Cir. 1972)
Timothy Rice wrote the libre o for Jesus Christ Superstar and Andrew
Lloyd Webber composed the score of the opera’s overture and 22
songs which depict the last seven days in the life of Christ. The Robert
Stigwood Group Limited (”Stigwood”) acquired the rights for stage
productions and dramatic presentations of the opera, and its rights
are those allegedly infringed.
Each Original American Touring Company (”OATC”) so-called
concert consists of 20 of the 23 songs from Jesus Christ Superstar,
sung sequentially with one exception, and three additional religious
works.
OATC’s claim that its productions do not infringe Stigwood’s
rights is based upon the usual and customary agreement between
the American Society of Composers, Authors and Publishers (”AS-
CAP”) and Leeds Music Corporation, an ASCAP member. ASCAP
is authorized by its members to license only nondramatic performing
rights of compositions in its repertory. Consequently, pursuant to the
standard ASCAP agreement utilized here, ASCAP was authorized by
C. PERFORMANCES 397
Leeds to give:
1. (b) The non-exclusive right of public performance of Does this language, and how the court
the separate numbers, songs, fragments or arrangements, interprets it, tell us anything useful
about when a musical work is "nondra-
melodies or selections forming part or parts of musical
matic" within the meaning of the 1976
plays and dramatico-musical compositions, the Owner re- Copyright Act?
serving and excepting from this grant the right of per-
formance of musical plays and dramatico-musical com-
positions in their entirety, or any part of such plays or
dramatico-musical compositions on the legitimate stage.
Thus, while ASCAP licensees can perform the individual songs from
Jesus Christ Superstar, paragraph 3 of the standard license indicates
that it does not extend to presentations of:
(a) Oratorios, choral, operatic, or dramatico-musical
works . . . in their entirety or songs or other excerpts from
operas or musical plays accompanied either by word, pan-
tomime, dance or visual representation of the work from
which the music is taken; but fragments or instrumental
selections from such works may be instrumentally ren-
dered without words, dialogue, costume, accompanying
dramatic action or scenic accessory and unaccompanied
by any stage action or visual representation (by motion
picture or otherwise) of the work of which such music
forms a part.
The facts before us vividly paint the dramatic nature of OATC’s per-
formance. 20 of 23 Superstar selections are performed in defendant’s In industry parlance, OATC needed
concert, all but one in identical sequence as in the copyrighted opera. "grand rights" -- a license for a dramatic
performance -- but ASCAP and other
The conclusion is inescapable that the story of the last seven days in
PROs only issue "small rights" -- licenses
the life of Christ is portrayed in the OATC performances substantially for nondramatic performances.
as in Superstar. One might appropriately ask why, if OATC did not
intend that the same story be told, would it insist on preserving the
sequence of the songs presented in Jesus Christ Superstar, which when
performed in that fashion, tell the story even in the absence of inter-
vening dialogue? As Rice v. American Program Bureau instructed, the Rice: 446 F.2d 685 (2d Cir. 1971)
lack of scenery or costumes in the OATC production does not ipso
facto prevent it from being dramatic. Indeed, radio performances of
operas are considered dramatic, because the story is told by the music
and lyrics. here can be no question that the OATC concerts, in which
singers enter and exit, maintain specific roles and occasionally make
gestures, and in which the story line of the original play is preserved
by the songsHow does the court know that the full ”score” of Jesus Christ
Superstar takes 87 minutes to perform? Won’t it depend on the performers?
which are sung in almost perfect sequence using 78 of the 87 minutes
of the original copyrighted score, is dramatic.
398 CHAPTER 5. MUSIC
c Miscellaneous
Copyright Act
§ 116(b)(1)
Any owners of copyright in [any nondramatic musical work em-
Negotiated licenses for public perfor- bodied in a phonorecord] and any operators of coin-operated
mances by means of coin-operated phonorecord players may negotiate and agree upon the terms and
phonorecord players rates of royalty payments for the performance of such works and
the proportionate division of fees paid among copyright owners, and
may designate common agents to negotiate, agree to, pay, or receive
such royalty payments.
History of the Jukebox License Office
From the JLO website
Before 1978, ”coin-operated phonorecord players,” commonly re-
ferred to as jukeboxes, generally were not licensed by ASCAP, BMI,
SESAC or the U.S. Government. However, due to revisions of the
Copyright Law, a provision was included for a compulsory license
from the U.S. Copyright Office for any publicly performed non-
dramatic musical works by means of a ”coin-operated phonorecord
player” (jukebox). This act was placed into effect in 1978. At that time
jukebox operators submi ed payments to the Licensing Division of
the U.S. Copyright Office in Washington D.C. Fees were structured
on a flat per-box rate.
Berne's strong preference for negoti- In 1989, the United States joined an international copyright treaty
ated licenses is reflected in the current named the Berne Convention. One aspect of the Berne Convention is
§ 116.
to offer ”negotiated” licenses as opposed to ”compulsory” licenses.
Consequently, ASCAP, BMI and SESAC negotiated a license with
the Amusement & Music Operators Association (AMOA), the largest
trade association representing jukebox operators.
The result of these negotiations was the 1990 creation of the Juke-
box License Office (JLO) and the Jukebox License Agreement, which
is administered by the JLO. This agreement provides jukebox opera-
tors total access to all songs in the ASCAP, BMI and SESAC reperto-
ries. The Jukebox License Agreement is a single, economical, music
license that provides the authorization required under the U.S. Copy-
right Law to publicly play virtually every copyrighted song on a coin-
operated jukebox.
The original Jukebox License Agreement was re-negotiated by AS-
CAP, BMI, SESAC and the AMOA in 1999 and again in 2001. A new
Jukebox License Agreement is now in effect as of January 1, 2007.
17 U.S.C. § 110 Copyright Act
Limitations on exclusive rights: Exemp-
tion of certain performances and dis-
plays
C. PERFORMANCES 399
Notwithstanding the provisions of section 106, the following are not
infringements of copyright:
(7) performance of a nondramatic musical work by a vending es-
tablishment open to the public at large without any direct or
indirect admission charge, where the sole purpose of the perfor-
mance is to promote the retail sale of copies or phonorecords of
the work, or of the audiovisual or other devices utilized in such
performance, and the performance is not transmi ed beyond
the place where the establishment is located and is within the
immediate area where the sale is occurring;
2 Sound Recordings
Most performances of sound recordings – including performances in
person and traditional ”terrestrial” radio broadcasts – are not cov-
ered by federal copyright law and do not require permission from the
copyright owner. But there is an exclusive right to control the perfor-
mance of a sound recording via ”digital audio transmission,” which
is subject to an immensely complicated statutory licensing system.
Copyright Act
The exclusive rights of the owner of copyright in a sound recording 17 U.S.C. § 114(a)
do not include any right of performance under section 106(4). Scope of exclusive rights in sound
recordings
Subject to sections 107 through 122, the owner of copyright under
this title has the exclusive rights to do and to authorize any of the
following: 17 U.S.C. § 106
Exclusive rights in copyrighted works
(6) in the case of sound recordings, to perform the copyrighted
work publicly by means of a digital audio transmission.
Copyright Office
(report of the Register of Copyrights
Copyright and the Music Marketplace 2015)
In the 1995 The Digital Performance Right in Sound Recordings Act
(DPRSRA), Congress gave sound recording owners an exclusive pub-
lic performance right, but one limited to digital audio transmissions,
and created the section 114 statutory license for noninteractive sub-
scription providers, including satellite radio, engaged in digital per-
formances. In 1998, Congress extended the section 114 compulsory
license to expressly include webcasting as a covered activity. Tra-
ditional over-the-air broadcasts, however, were expressly exempted
from the sound recording performance right.
Congress drew this legal distinction based on perceived differ-
ences between digital and traditional services, believing at the time
400 CHAPTER 5. MUSIC
that traditional broadcasters posed “no threat” to the recording in-
dustry, in contrast to digital transmission services. A longstanding
justification for the lack of a sound recording performance right has
been the promotional effect that traditional airplay is said to have
on the sale of sound recordings. In the traditional view of the market,
broadcasters and labels representing copyright owners enjoy a mutu-
ally beneficial relationship whereby terrestrial radio stations exploit
sound recordings to a ract the listener pools that generate advertis-
ing dollars, and, in return, sound recording owners receive exposure
that promotes record and other sales.
The section 114 statutory license allows different types of non-
interactive digital music services – free and paid internet radio ser-
vices, “preexisting” satellite radio services, and “preexisting” mu-
sic subscription services – to perform sound recordings upon com-
pliance with the statutory license requirements, including the pay-
ment of royalties as determined by the CRB. In addition, recognizing
that such digital services must make server reproductions of sound
recordings – sometimes called “ephemeral” copies – to facilitate their
digital transmissions, Congress established a related statutory license
under section 112 to authorize the creation of these copies. Rates and
terms for the section 112 license are also established by the CRB.
The section 112 and 114 licenses for sound recordings are subject
to a number of technical limitations. For instance, services relying
on the section statutory license are prohibited from publishing an ad-
vance program schedule or otherwise announcing or identifying in
advance when a specific song, album or artist will be played. Another
example is the “sound recording performance complement,” which
limits the number tracks from a single album or by a particular artist
that may be played during a 3-hour period.
Payment and reporting of royalties under the section 112 and
114 licenses are made to a single non-profit agent: SoundExchange.
SoundExchange was established by the RIAA in 2000 and in 2003 was
spun off as an independent entity. The Copyright Act specifies how
royalties collected under section 114 are to be distributed: 50% go to
the copyright owner of the sound recording, typically a record label;
45% go to the featured recording artist or artists; ²¹⁄₂% go to an agent
representing nonfeatured musicians who perform on sound record-
ings; and ²¹⁄₂% to an agent representing nonfeatured vocalists who
perform on sound recordings. Section 112 fees are paid by SoundEx-
change directly to the sound recording owner. Prior to distributing
royalty payments, SoundExchange deducts the reasonable costs in-
curred in carrying out its responsibilities.
The statutory licensing framework applies only to noninteractive
(i.e., radio-style) services; interactive or on-demand services are not
covered. The distinction between interactive and noninteractive ser-
C. PERFORMANCES 401
vices has been the ma er of some debate. The statute provides that
an interactive service is one that enables a member of the public to
receive either “a transmission of a program specially created for the
recipient,“ or “on request, a transmission of a particular sound record-
ing, whether or not as part of a program, which is selected by or on
behalf of the recipient.”
The statutory definition leads to the question of whether so-called
“personalized” or “custom” music streaming services—services that
tailor the music they play to individual user preferences—transmit
programs that are “specially created for the recipient.” In Arista Launch Media: 578 F.3d 148 (2d Cir.
Records LLC v. Launch Media, Inc., the Second Circuit held that one 2009)
such service that played songs for users based on users’ individual
ratings was not interactive because the service did not displace mu-
sic sales. Following the Launch Media decision, personalized music
streaming services such as Pandora and Rdio have obtained statu-
tory licenses as noninteractive services for their public performance
of sound recordings. The CRB-established rates do not currently dis-
tinguish between such customized services and other services that
simply transmit undifferentiated, radio-style programming over the
internet.
Notably, under section 114, the rate standard applicable to “pre-
existing” satellite radio and music subscription services (i.e., those
services that existed as of July 31, 1998) differs from that for other
services such as internet radio and newer subscription services. This
distinction is a legislative artifact.
Accordingly, because of the staggered enactment of the section
112 and 114 licenses, royalty rates for a limited set of older services –
Sirius XM, as the only preexisting satellite service, and Music Choice
and Muzak, as the only preexisting subscription services – are gov-
erned by the four-factor standard in section 801(b) of the Act. Mean-
while, for all internet radio and other newer digital music services,
and for all ephemeral recordings regardless of the service, the CRB is
to establish rates and terms “that most clearly represent the rates and
terms that would have been negotiated in the marketplace between
a willing buyer and a willing seller.”
In general, the CRB (like the CARP before it) has adopted “per-
performance” rates for internet radio, rather than the percentage-
of-revenue rates that are typical in PRO licenses. That per-stream
approach has proven controversial. After the CRB’s “Webcasting
II” decision in 2007, a number of internet radio services and broad-
casters complained that the per-performance rates were unsustain-
able. These concerns led Congress to pass legislation giving SoundEx-
change the authority to negotiate and agree to alternative royalty
schemes that could be binding on all copyright owners and others
entitled to royalty payments in lieu of the CRB-set rates.
402 CHAPTER 5. MUSIC
In the wake of Congress’ actions, SoundExchange reached agree-
ment with a number of internet radio services, in general adopting
royalty rates that were more closely aligned with the services’ rev-
enues. For example, in 2009, SoundExchange negotiated rates with
large commercial “pureplay” internet radio services (i.e., services like
Pandora that only transmit over the internet). Under that agreement,
those services agreed to pay the greater of 25% of gross revenues or
specified per-performance rates.
A streaming service that does not fall under the section 112 and
114 licenses – i.e., an interactive service – must negotiate a license
with a record company in order to use the label’s sound recordings.
Since direct licenses are agreed upon at the discretion of the copy-
right owner and the potential licensee, the license terms can be vastly
different from those that apply under the statutory regime. It is com-
mon for a music service seeking a sound recording license from a
label to pay a substantial advance against future royalties, and some-
times an administrative fee. Other types of consideration may also
be involved. For example, the major labels acquired a reported com-
bined 18% equity stake in the on-demand streaming service Spotify
allegedly based, at least in part, on their willingness to grant Spotify
rights to use their sound recordings on its service.
D State-Law Protection for Pre-1972 Sound
Recordings
As noted above, Congress did not federalize the copyrights in already
existing sound recordings when it added them to the Copyright Act.
States are free to apply their own law to such sound recordings until
2067. This bifurcation raises significant questions about the scope of
those rights – such as whether there is a public performance right –
and about whether familiar features of federal copyright law – such
as fair use and § 512 – apply to them. The dearth of caselaw does not
help.
Copyright Act
17 U.S.C. § 301(c)
With respect to sound recordings fixed before February 15, 1972, any
Preemption with respect to other laws rights or remedies under the common law or statutes of any State
shall not be annulled or limited by this title until February 15, 2067.
The preemptive provisions of subsection (a) shall apply to any such
rights and remedies pertaining to any cause of action arising from
undertakings commenced on and after February 15, 2067. No sound
recording fixed before February 15, 1972, shall be subject to copyright
D. STATE-LAW PROTECTION FOR PRE-1972 SOUND RECORDINGS 403
under this title before, on, or after February 15, 2067.
RCA Mfg. Co. v. Whiteman
114 F.2d 86 (2d Cir. 1940)
The dispute is as to whether W.B.O. Broadcasting Corporation, as
(Learned Hand, J.)
the purchaser of phonographic records prepared by RCA Manufac-
turing Company, Inc., of Whiteman’s orchestral performances, may
broadcast them by radio. Whiteman’s performances took place in stu-
dios of RCA Manufacturing Company, Inc., which arranged for their
reproduction upon ordinary phonographic disc records, and which,
with the consent of Whiteman, sold the records to the public at large.
Of the nine records here in question five were sold between Novem-
ber, 1932, and August 15, 1937, during which period every record
bore the legend: ”Not Licensed for Radio Broadcast”. "If you are not aware of the Beatles,
It is only in comparatively recent times that a virtuoso, conduc- you cannot not hope to understand
any music of the 1960s, because they
tor, actor, lecturer, or preacher could have any interest in the repro-
were ubiquitous and affected all the
duction of his performance. Until the phonographic record made other music. They were the dominant,
possible the preservation and reproduction of sound, all audible ren- inescapable sound of the era. Like
ditions were of necessity fugitive and transitory; once u ered they the Beatles, Whiteman's orchestra was
died; the nearest approach to their reproduction was mimicry. Of not only the most popular band of the
1920s, but was also enormously influ-
late, however, the power to reproduce the exact quality and sequence
ential in every field of music. When
of sounds has become possible, and the right to do so, exceedingly that period is referred to as the 'Jazz
valuable; people easily distinguish, or think they distinguish, the ren- Age,' conjuring up pictures of flappers,
dition of the same score or the same text by their favorites, and they bearskin coats, and F. Scott Fitzger-
will pay large sums to hear them. Hence this action. ald, the band that made that jazz was
Whiteman's. In purely musical terms,
Copyright in any form, whether statutory or at common-law, is a his innovations were huge: He defined
monopoly; it consists only in the power to prevent others from repro- the arranging style that would be used
ducing the copy-righted work. The records at bar embodied White- by virtually every later bandleader. If
man’s ”common-law property” – his contribution as a conductor – in he didn't swing, he appreciated mu-
precisely the same way that the record of such a score would embody sicians who could and hired many of
the most important white jazz artists of
his composition. Hence the question is no different from whether he that era. And he was the first person to
might disseminate a musical score to the public at large, but impose a force a broad public to treat jazz as se-
limitation upon it that buyers should not use it to broadcast for profit. rious, important music rather than just
It will hardly be argued that if it was a ”publication” in the sense that a noisy fad. As the Beatles' Sgt. Pep-
per was for rock, Whiteman's Rhapsody
that destroys the ”common-law property”, the restriction upon the
in Blue [commissioned by Whiteman
use of the record would be valid notwithstanding. If ”the common- and composed by George Gershwin]
law property” in the rendition be gone, then anyone may copy it who was the breakthrough through work in
chances to hear it, and may use it as he pleases. the struggle to have jazz recognized
Certainly when the ”common-law property” is in a work which as art music, bringing it out of the sa-
loons and dance halls and forcing 'seri-
the Copyright Act covers, there can be no doubt; Congress has
ous' music fans to take notice of it as
created the monopoly in exchange for a dedication, and when the the sound of their time." Elijah Wald,
monopoly expires the dedication must be complete. If the records How the Beatles Destroyed Rock 'n' Roll
were registrable under the act, the restriction would therefore cer- (2009).
tainly not limit the dedication. The fact that they are not within the act
should make no difference. That being true, we see no reason why
the same acts that unconditionally dedicate the common-law copy-
404 CHAPTER 5. MUSIC
right in works copyrightable under the act, should not do the same
in the case of works not copyrightable. Otherwise it would be possi-
ble, at least pro tanto, to have the advantage of dissemination of the
work at large, and to retain a perpetual though partial, monopoly in
it. That is contrary to the whole policy of the Copyright Act and of
the Constitution.
Whiteman and the plaintiff also rest their case upon the theory of
unfair competition. In the case at bar if Whiteman and RCA Manu-
facturing Company, Inc., cannot bring themselves within the law of
common-law copyright, there is nothing to justify a priori any contin-
uance of their control over the activities of the public to which they
have seen fit to dedicate the larger part of their contribution.
Copyright Office
(2011)
Federal Copyright Protection for Pre-1972 Sound Recordings
The states provide protection for pre-1972 sound recordings through
a patchwork of criminal laws, civil statutes and common law. Early
cases relied on common law, principally the tort of unfair competi-
tion, to protect sound recordings from unauthorized duplication and
sale. By the 1950s, record piracy had become a serious problem, with
pirates openly competing with record companies. For that reason, at-
tention shifted to legislation imposing criminal sanctions starting in
the 1960s.
In the 1960s, states began to pass laws making it a criminal offense
to duplicate and distribute sound recordings, without authorization,
for commercial purposes. New York was the first such state in 1967;
California was the second, in 1968. Several other states followed, and
Goldstein: 412 U.S. 546 (1973) after the Supreme Court ruled in Goldstein v. California in 1973 that
state law protection of sound recordings was constitutional, many
additional states passed such laws.
Most state criminal laws prohibit, at a minimum, duplication and
sale of recordings done knowingly and willfully with the intent to
sell or profit commercially from the copies. Many have express ex-
ceptions for activities such as broadcasting, archiving, and personal
use. It is unclear how many cases are brought under these statutes,
but they inform the protection for sound recordings under state law
and provide a backdrop for commercial transactions.
The formulation of prohibited activities varies from state to state.
Almost all states prohibit the act of duplicating without authoriza-
tion (often referred to as “transferring the sounds”). Most states also
prohibit advertising or offering for sale, and selling or otherwise dis-
tributing the unauthorized recordings. Some states also criminalize
activities such as transporting sound recordings within the state (or
possessing them) with knowledge that they are unauthorized, with
intent to sell them.
D. STATE-LAW PROTECTION FOR PRE-1972 SOUND RECORDINGS 405
A number of states have civil laws that address protection for pre-
1972 sound recordings, directly or indirectly. Section 980(a)(2) of the
California statute provides civil protection of pre-1972 sound record-
ings and is a good example:
The author of an original work of authorship consisting
of a sound recording initially fixed prior to February 15,
1972, has an exclusive ownership therein until February
15, 2047, as against all persons except one who indepen-
dently makes or duplicates another sound recording that
does not directly or indirectly recapture the actual sounds
fixed in such prior sound recording, but consists entirely
of an independent fixation of other sounds, even though
such sounds imitate or simulate the sounds contained in
the prior sound recording.
The few cases decided under § 980(a)(2) have viewed the section as
conferring an intangible property interest in the sound recordings
that can be protected in a misappropriation, conversion or unfair com-
petition claim. They have distinguished the property interest pro-
tected by this statute from copyright protection which, under Califor-
nia law, terminates upon publication. Some states specifically pro-
vide that there is a private right of action for violation of the state
criminal piracy provision.
Most states also have some form of non-statutory civil protec-
tion, although the precise nature of that protection varies from state
to state. The two most prevalent theories for providing protection
are common law copyright and misappropriation/unfair competition,
but courts have also protected sound recordings under other legal
theories, such as conversion.
The most notable case in recent years involving pre-1972 sound
recordings was Capitol Records, Inc. v. Naxos of America, Inc.. At is- Naxos: 4 N.Y.3d 540 (2005)
sue were recordings of classical music performances by Pablo Casals,
Edwin Fischer and Yehudi Menuhin, originally made in the 1930s.
Capitol, with a license from EMI, the successor of the original record-
ing company, remastered the recordings, and was distributing them
in the United States. Naxos obtained and restored the recordings in
the UK, where they were in the public domain, and began market-
ing them in the United States in competition with Capitol. The New
York Court of Appeals held that foreign sound recordings remain pro-
tected under “common law copyright” in New York until 2067, even
though they may be in the public domain in their home country.
In EMI Records Ltd. v. Premise Media Corp., a New York trial court, Premise Media: No. 601209/08, 2008
ruling on a motion for a preliminary injunction, considered the appli- WL 5027245 (N.Y. Sup. Aug. 8, 2008)
cability of the fair use defense to a claim for infringement of common
law copyright in a sound recording. Defendants had used an excerpt
406 CHAPTER 5. MUSIC
of John Lennon’s “Imagine,” a pre-1972 sound recording, in a docu-
mentary film entitled “Expelled.” The film a empts to counter criti-
cism of the theory of intelligent design. The 99-minute documentary
used a 15-second excerpt from Lennon’s 3-minute sound recording.
Plaintiffs argued that under common law copyright, any unau-
thorized use of a sound recording is actionable. Defendants argued
that only a reproduction of the complete recording was an infringe-
ment. The court rejected both claims, but ultimately concluded that
plaintiffs had established a prima facie claim of common law copy-
right infringement. The court observed that New York cases have
acknowledged the existence of a fair use defense to common law in-
fringement claims but that no case had actually applied fair use in
that context. The court recognized that fair use was generally unavail-
able as a defense with respect to unpublished works, principally to
protect the copyright owner’s right of first publication. In the case of
sound recordings, however, common law copyright protection exists
regardless of publication, reasoned the court. “Thus, the erosion of
the publication distinction in the context of sound recordings vitiates
the underlying rationale preventing application of pre-publication
fair use.” Accordingly, the court held that fair use was available as a
defense to plaintiffs’ copyright infringement claim.
The court turned for guidance to the federal law of fair use and
specifically to the fair use factors in 17 U.S.C. § 107 and the cases in-
terpreting them. The court ruled that defendants were likely to pre-
vail on their fair use defense, primarily because the use of the sound
recording excerpt in the film could be seen as transformative, convey-
ing a critical message about the song and the viewpoint it represents,
and because there was li le likely market effect from defendants’ use.
Flo & Eddie, Inc. v. Sirius XM Radio, Inc.
62 F. Supp. 3d 325 (S.D.N.Y. 2014)
Flo and Eddie is a California corporation, wholly owned by its prin-
cipals, Mark Volman and Howard Kaylan. Volman and Kaylan are
two of the original members of The Turtles, a 1960s rock group whose
hits included “Happy Together” and a cover of Bob Dylan’s “It Ain’t
Me Babe.”
Master recordings of the Turtles’ performances – all of which were
made prior to February 15, 1972 – were transferred to the Turtles’
members as part of a legal se lement. Volman and Kaylan purchased
the remaining Turtles’ members’ interests in the recordings, and ul-
timately transferred all ownership interests in the recordings to Flo
and Eddie.
Sirius is a Delaware corporation engaged in the satellite radio busi-
ness. Sirius provides digital audio content to its subscribers, who
pay a periodic fee. Sirius acknowledges that it “performs” sound
D. STATE-LAW PROTECTION FOR PRE-1972 SOUND RECORDINGS 407
recordings, including pre–1972 sound recordings, by broadcasting
them over its satellite radio network and streaming them over the in-
ternet. The pre–1972 sound recordings Sirius has performed include
Turtles recordings.
For all the copying it does do, it’s worth noting what Sirius does
not do. Sirius does not currently allow users to download and store
complete copies of any recordings. In this way, Sirius differs from
file-sharing services such as Napster and Limewire. Nor does Sirius
allow users to listen to a particular recording whenever they choose
to do so. In this way, Sirius differs from some internet radio services
like Spotify. Users can customize the programming they receive to
a limited extent using the “My SXM” feature. For example, a user
could choose to emphasize folk music and deemphasize rock music
on a 70s channel. But that user could not choose to listen only to Bob
Dylan, much less a particular Bob Dylan recording, while excluding
anything by Led Zeppelin.
Sirius has moved for summary judgment. It argues that New York
common law copyrights in pre–1972 sound recordings do not afford
an exclusive right of public performance.
I conclude that the New York Court of Appeals would recognize
the exclusive right to public performance of a sound recording as
one of the rights appurtenant to common law copyright in such a
recording. The common law typically protects against unauthorized
reproduction of copies or phonorecords, unauthorized distribution
by publishing or vending, and unauthorized performances. New
York courts have long afforded public performance rights to holders
of common law copyrights in works such as plays and films. The Sec-
ond Circuit concluded over three decades ago that New York would
recognize a public performance right in compilations of film clips.
Sirius principally argues that no such right exists because New
York case law contains no discussion of public performance rights
in sound recordings. But the exact same argument could have been
made (and undoubtedly was made, and rejected) in Naxos – a case
decided only in 2005, more than a century after sound recordings
were invented. The very fact that Naxos was decided in favor of the
common law copyright holder, after more than a century of judicial
silence, means that this court can infer nothing – certainly not that
the common law copyright in sound recordings does not encompass
all of the rights traditionally accorded to copyright holders in other
works, including the right of public performance – from the fact that
this is the first case to raise the issue.
An arguably stronger argument can be made that years of judicial
silence implies exactly the opposite of what Sirius contends – not that
common law copyright in sound recordings carries no right of public
performance, but rather that common law copyright in sound record-
408 CHAPTER 5. MUSIC
ings comes with the entire bundle of rights that holders of copyright
in other works enjoy. No New York case recognizing a common law
copyright in sound recordings has so much as suggested that right
was in some way circumscribed, or that the bundle of rights appur-
tenant to that copyright was less than the bundle of rights accorded
to plays and musical compositions.
I question whether the investors would be truly surprised if Sir-
ius were to have to pay royalties in order to perform pre–1972 sound
recordings. Sirius, which broadcasts exclusively in non-analog form,
must pay royalties under federal law in order to broadcast post–1972
sound recordings. All Flo and Eddie seeks here is the right to receive
royalties under state law for the digital broadcasting of its pre–1972
recordings – hardly a shocking development in the world of digital
broadcasting.
Flo & Eddie, Inc. v. Sirius XM Radio, Inc.
No. 13–cv-23182, 2015 WL 3852692
(S.D. Fla. 2015) At the onset of this litigation, Flo & Eddie recognized that its property
rights were a ma er of state law and therefore filed three different ac-
tions in Florida, New York, and California. Of the three actions, this
one is relatively unique. California’s copyright statute has a specific
provision that addresses pre–1972 recordings. The New York district
court did not have the benefit of legislation, however, it was able to
rely on several cases interpreting New York law to find that Flo & Ed-
die had an exclusive right to publicly perform the sound recordings.
Florida is different. There is no specific Florida legislation cover-
ing sound recording property rights, nor is there a bevy of case law
interpreting common law copyright related to the arts.
If this Court adopts Flo & Eddie’s position, it would be creating
a new property right in Florida as opposed to interpreting the law.
The Court declines to do so. While the Court regularly interprets
Florida law to resolve claims in diversity jurisdiction, it is not the
Court’s place to expand Florida common law by creating new causes
of action. Federal courts are entrusted to apply state law, not make
it. The Court finds that the issue of whether copyright protection for
pre–1972 recordings should include the exclusive right to public per-
formance is for the Florida legislature.
Indeed, if this Court was to recognize and create this broad right in
Florida, the music industry—including performers, copyright own-
ers, and broadcasters—would be faced with many unanswered ques-
tions and difficult regulatory issues including: (1) who sets and ad-
ministers the licensing rates; (2) who owns a sound recording when
the owner or artist is dead or the record company is out of business;
and (3) what, if any, are the exceptions to the public performance
right. The Florida legislature is in the best position to address these
issues, not the Court. Accordingly, the Court finds that Florida com-
D. STATE-LAW PROTECTION FOR PRE-1972 SOUND RECORDINGS 409
mon law does not provide Flo & Eddie with an exclusive right of
public performance in The Turtles’ sound recordings.
UMG Recordings, Inc. v. Escape Media Group, Inc.
107 A.D.3d 51 (N.Y. App. Div. 2013)
Defendant Escape Media Group, Inc. developed, owns and operates
an Internet-based music streaming service called Grooveshark. Users
of Grooveshark can upload audio files (typically songs) to an archive
maintained on defendant’s computer servers, and other users can
search those servers and stream recordings to their own computers
or other electronic devices.
Plaintiff UMG Recordings, Inc. is the owner of the rights in many
popular sound recordings that have been uploaded to Grooveshark.
Many of those recordings were made prior to February 15, 1972 (the
pre–1972 recordings). Defendant concedes that it cannot ensure that
each work uploaded to its servers is a non-infringing work. However,
it has operated Grooveshark with the assumption that it is shielded
from infringement claims by copyright owners by 17 USC § 512, pop-
ularly known as the Digital Millenium Copyright Act (DMCA).
Initially, it is clear to us that the DMCA, if interpreted in the man-
ner favored by defendant, would directly violate section 301(c) of the
Copyright Act. Had the DMCA never been enacted, there would
be no question that UMG could sue defendant in New York state
courts to enforce its copyright in the pre–1972 recordings, as soon as
it learned that one of the recordings had been posted on Grooveshark.
However, were the DMCA to apply as defendant believes, that right
to immediately commence an action would be eliminated. Indeed,
the only remedy available to UMG would be service of a takedown
notice on defendant. This is, at best, a limitation on UMG’s rights,
and an implicit modification of the plain language of section 301(c).
The word “limit” in 301(c) is unqualified, so defendant’s argument
that the DMCA does not contradict that section because UMG still
retains the right to exploit its copyrights, to license them and to cre-
ate derivative works, is without merit. Any material limitation, es-
pecially the elimination of the right to assert a common-law infringe-
ment claim, is violative of section 301(c) of the Copyright Act.
For defendant to prevail, we would have to conclude that
Congress intended to modify section 301(c) when it enacted the
DMCA. However, there is no reason to conclude that Congress recog-
nized a limitation on common-law copyrights posed by the DMCA
but intended to implicitly dilute section 301(c) nonetheless. Such
an interpretation is disfavored where, as here, the two sections can
reasonably co-exist, each in its own field of operation. Congress ex-
plicitly, and very clearly, separated the universe of sound recordings
into two categories, one for works “fixed” after February 15, 1972,
to which it granted federal copyright protection, and one for those
410 CHAPTER 5. MUSIC
fixed before that date, to which it did not. Defendant has pointed to
nothing in the Copyright Act or its legislative history which prevents
us from concluding that Congress meant to apply the DMCA to the
former category, but not the la er.
Finally, we reject defendant’s argument that the very purpose of
the DMCA will be thwarted if it is deemed not to apply to the pre–
1972 recordings. The statutory language at issue involves two equally
clear and compelling Congressional priorities: to promote the exis-
tence of intellectual property on the Internet, and to insulate pre–
1972 sound recordings from federal regulation. Defendant’s concerns
about interpreting the statutes in the manner advocated by UMG
are no more compelling than UMG’s concerns about interpreting the
statutes in the manner advanced by defendant. Under such circum-
stances, it would be far more appropriate for Congress, if necessary,
to amend the DMCA to clarify its intent, than for this Court to do so
by fiat.
Capitol Records, LLC v. Vimeo, LLC
—F.3d —, 2016 WL 3349368
Defendant Vimeo, LLC1 is an Internet service provider, which oper-
ates a website on which members can post videos of their own cre-
ation, which are then accessible to the public at large. Plaintiffs are
record companies and music publishing companies, which own copy-
rights in sound recordings of musical performances. Their complaint
alleges that Vimeo is liable to Plaintiffs for copyright infringement by
reason of 199 videos posted on the Vimeo website, which contained
allegedly infringing musical recordings for which Plaintiffs owned
the rights.
The first question we consider is whether the district court erred in
granting partial summary judgment to Plaintiffs, rejecting the avail-
ability of the DMCA’s safe harbor for infringement of sound record-
This is the Pre-1972 Sound Recordings ings fixed prior to February 15, 1972. On this question, the district
report excerpted above. court accepted without discussion the position taken by the United
States Copyright Office in a report prepared in 2011 that the safe
harbor does not protect against liability for infringement of pre-1972
sound recordings.
The Pre-1972 Sound Recordings Report arrived at its conclusion
that § 512(c)’s safe harbor applies only to post-1972 sound recordings
by the following reasoning: The term “infringement of copyright,”
which is employed in § 512(c), “is defined in section 501(a) as the vi-
olation of ‘any of the exclusive rights of the copyright owner as pro-
vided by sections 106 through 122.’” Therefore, that term, when used
in § 512(c), “only refers to infringement of rights protected under ti-
tle 17, and does not include infringement of rights protected under
[state] law.”
While we unhesitatingly acknowledge the Copyright Office’s su-
E. BOOTLEGGING 411
perior expertise on the Copyright Act, we cannot accept its reading
of § 512(c). It is based in major part on a misreading of the statute.
A literal and natural reading of the text of § 512(c) leads to the con-
clusion that its use of the phrase “infringement of copyright” does
include infringement of state laws of copyright. One who has been
found liable for infringement of copyright under state laws has in-
disputably been found “liable for infringement of copyright.” In this
instance, Congress did not qualify the phrase “infringement of copy-
right” by adding, as it did in other circumstances, the words, “under
this title.” See, e.g., § 106 (“Subject to sections 107 through 122, the
owner of copyright under this title has the exclusive rights to do and
to authorize any of the following ....); § 201(a) (“Copyright in a work
protected under this title vests initially in the author or authors of
the work.”). To interpret § 512(c)’s guarantee that service providers
“shall not be liable ... for infringement of copyright” to mean that they
may nonetheless be liable for infringement of copyright under state
laws would be, at the very least, a strained interpretation – one that
could be justified only by concluding that Congress must have meant
something different from what it said.
To construe § 512(c) as leaving service providers subject to liabil-
ity under state copyright laws for postings by users of infringements
of which the service providers were unaware would defeat the very
purpose Congress sought to achieve in passing the statute. Service
providers would be compelled either to incur heavy costs of moni-
toring every posting to be sure it did not contain infringing pre-1972
recordings, or incurring potentially crushing liabilities under state
copyright laws. It is not as if pre-1972 sound recordings were suf-
ficiently outdated as to render the potential liabilities insignificant.
Some of the most popular recorded music of all time was recorded
before 1972, including work of The Beatles, The Supremes, Elvis Pres-
ley, Aretha Franklin, Barbra Streisand, and Marvin Gaye.
E Bootlegging
The Copyright Clause allows protection only for ”writings.” Under
the 1909 Copyright Act, a live performance was not subject to federal
copyright; there was nothing to publish with notice of copyright or
to register to secure protection. This left a substantial hole, one that
states sometimes filled.
The 1976 Copyright Act mostly carried forward the exclusion of
live performances, this time because they are not considered ”fixed.”
There was one exception: a work is considered ”fixed” if it is be-
ing simultaneously recorded and transmi ed, thus allowing copy-
right protection for live broadcasts of concerts, sporting events, etc.
Again, states partially filled the gap with so-called anti-bootlegging
412 CHAPTER 5. MUSIC
statutes. Congress followed their example with the 1994 Uruguay
Round Agreements Act, which (among other things) added civil anti-
bootlegging provisions to Title 17 and criminal anti-bootlegging pro-
visions to Title 18.
Metropolitan Opera Assoc. v. Wagner-Nichols Recorder Corp.
199 Misc. 786 (N.Y. Sup. 1950)
Metropolitan Opera is an educational membership corporation. Over
a period of sixty years it has, by care, skill and great expenditure,
maintained a position of pre-eminence in the field of music and grand
opera. By reason of this skill and pre-eminence it has created a na-
tional and world-wide audience and thereby a large market for radio
broadcasts and phonograph recordings of its performances.
Metropolitan Opera has sold the exclusive right to broadcast its
opera performances during the 1949–50 season to American Broad-
casting, for which Metropolitan Opera receives $100,000. Under
the contract for the 1949–50 season, American Broadcasting broad-
cast Metropolitan Opera performances of eighteen operas between
November 26, 1949, and March 25, 1950.
Since November 26, 1949, the defendants have recorded these
broadcast performances of Metropolitan Opera and have used their
master recordings to make phonograph records of Metropolitan
Opera performances. The defendants have advertised and sold these
records as records of broadcast Metropolitan Opera performances.
That defendants’ piratical conduct and practices constitute unfair
competition both with Metropolitan Opera and Columbia Records is
made abundantly clear by the record. Plaintiff Metropolitan Opera
derives income from the performance of its operatic productions in
the presence of an audience, from the broadcasting of those produc-
tions over the radio, and from the licensing to Columbia Records
of the exclusive privilege of making and selling records of its own
performances. Without any payment to Metropolitan Opera for the
benefit of its extremely expensive performances, and without any
cost comparable to that incurred by Columbia Records in making
its records, defendants offer to the public recordings of Metropoli-
tan Opera’s broadcast performances. This constitutes unfair compe-
tition.
The performance of the opera in the opera house and the broad-
cast of the opera performance over the network of American Broad-
casting under an exclusive broadcasting contract with Metropolitan
Does the 1976 Copyright Act's treat- Opera did not abandon the plaintiffs’ rights to this performance. At
ment of live broadcasts as "fixed" if common law the public performance of a play, exhibition of a picture
they are fixed simultaneously with their or sale of a copy of the film for public presentation did not constitute
transmission suffice for the Met's live
an abandonment of nor deprive the owner of his common-law rights.
Saturday afternoon opera radio broad-
casts, which continue to this day?
The care with which the Metropolitan Opera made its limited grants,
granting exclusive right to a single network and restricting the la er’s
E. BOOTLEGGING 413
right to record and granting exclusive rights to record to Columbia
Records, again reserving the right to approve all records before their
release, shows clearly no intent to abandon but, on the contrary, an at-
tempt to retain effective control over the broadcasting and recording
of its performances. The fact that performances today can take place
over the radio as well as in the theatre and thereby reach a wider au-
dience does not change the principle involved.
Copyright Act
Anyone who, without the consent of the performer or performers in- 17 U.S.C. § 1101(a)
volved – Unauthorized fixation and trafficking
(1) fixes the sounds or sounds and images of a live musical per- in sound recordings and music videos
formance in a copy or phonorecord, or reproduces copies or
phonorecords of such a performance from an unauthorized fix-
ation,
(2) transmits or otherwise communicates to the public the sounds
or sounds and images of a live musical performance, or
(3) distributes or offers to distribute, sells or offers to sell, rents or
offers to rent, or traffics in any copy or phonorecord fixed as
described in paragraph (1), regardless of whether the fixations
occurred in the United States,
shall be subject to the remedies provided in sections 502 through 505,
to the same extent as an infringer of copyright.
United States v. Martignon
492 F.3d 14 (2d. Cir. 2007)
This appeal presents a recurring issue in constitutional law: the ex-
tent to which Congress can use one of its powers to enact a statute
that it could not enact under another of its arguably relevant pow-
ers. Here the statute involved is Section 2319A of Title 18 which
prohibits the unauthorized recording of performances as well as the
copying, distribution, sale, rental, and trafficking of these bootlegged
phonorecords.1
On October 27, 2004, a grand jury charged Martignon, the pro-
prietor of Midnight Records in Manha an, with one count of vio-
lating Section 2319A by reproducing an unauthorized phonorecord
and by distributing and selling and offering to distribute and sell
phonorecords of performances which had been recorded or fixed
without the consent of the performer or performers. Martignon
moved to dismiss the indictment, arguing that Section 2319A violated
1
17 U.S.C. § 1101(a) provides that copyright remedies shall be available against
persons who commit the same acts. Unlike Section 2319A, Section 1101 does not
require any particular mens rea or that the act be performed for commercial gain
or private financial gain.
414 CHAPTER 5. MUSIC
the Copyright Clause because live performances are not ”Writings”
within the meaning of the clause and because live performances were
given protection for perpetuity rather than for a ”limited Time[]”.
Martignon also claimed that the statute violated the First Amend-
ment.
Because the government concedes Congress could not have en-
acted Section 2319A pursuant to the Copyright Clause, we must
determine whether the Copyright Clause’s limitations also limit
Congress’s power to regulate creative works under the Commerce
Clause.
Section 2319A does not create and bestow property rights upon
authors or inventors, or allocate those rights among claimants to
them. It is a criminal statute, falling in its codification between the
law criminalizing certain copyright infringement and the law crimi-
nalizing ”trafficking in counterfeit goods or services.” It is, perhaps,
analogous to the law of criminal trespass. Rather than creating a right
in the performer him-or herself, it creates a power in the government
to protect the interest of performers from commercial predations. Sec-
tion 2319A does not grant the performer the right to exclude others
from the performance — only the government can do that. Neither
may the performer transfer his or her interests under Section 2319A to
another. Section 2319A only prevents others from doing something
without the authorization of the protected person. It may therefore
protect the property interests an individual holds by virtue of other
laws, but it does not itself allocate those interests. Section 2319A is
not a law ”secur[ing] ... rights,” nor is it a copyright law. We there-
fore conclude that it was not enacted under the Copyright Clause. We
have no need to examine whether it violates limits of the Copyright
Clause and proceed instead to an examination of its sustainability un-
der the Commerce Clause.
It is by now well established that legislative Acts adjusting the
burdens and benefits of economic life come to the Court with a pre-
sumption of constitutionality. A court may invalidate legislation en-
acted under the Commerce Clause only if it is clear that there is no
rational basis for a congressional finding that the regulated activity
affects interstate commerce, or that there is no reasonable connec-
tion between the regulatory means selected and the asserted ends.
Section 2319A has substantial commercial and economic aspects. In-
deed, regulation of bootlegging is necessary at the federal level be-
cause of its interstate and international commercial aspects. Without
this scope, bootlegging could be adequately regulated, as it has been
in the past, by the states. Given the nexus between bootlegging and
commerce, it is clear that absent any limitations stemming from the
Copyright Clause, Congress would have had the power to enact Sec-
tion 2319A(a)(1) & (3) under the Commerce Clause. Further, Section
E. BOOTLEGGING 415
2319A regulates only fixing, selling, distributing, and copying with
a commercial motive, activities at the core of the Commerce Clause.8
It would have been eminently reasonable for Congress to conclude
that the sale and distribution of bootleg phonorecords will have a
substantial interstate effect on the sale and distribution of legitimate
phonorecords. Because Section 2319A is not a copyright law and its
enactment was well within the scope of Congress’s Commerce Clause
authority, it is constitutionally permissible unless some other consti-
tutional provision prevents its enforcement.
Questions
1. The folk singer-songwriter Richard Shindell released the song
”The Next Best Western” on his 1997 album Reunion Hill. The
musical work copyright (registration no. PA0000967996) is
owned by Amalgamated Balladry and is part of the ASCAP
repertory. The sound recording copyright (registration no.
SR0000297971) is owned by Shanachie Records. For each of the
following uses, what licenses (if any) would you need, from
whom, and how could you obtain them?
• Playing ”The Next Best Western” from a Reunion Hill CD
on WTWP, a broadcast radio station.
• Streaming ”The Next Best Western” live on the Internet as
it plays on WTWP.
• Turning on the radio to WTWP in your home as ”The Next
Best Western comes on.
• Turning on the radio to WTWP in the coffeeshop you run
as ”The Next Best Western comes on.
• Using the Reunion Hill version of ”The Next Best Western”
in a TV commercial.
• Recording a hard-rock cover of ”The Next Best Western”
which you sell on CDs.
• Selling your hard-rock cover as downloadable MP3s.
• Using your hard-rock cover in a commercial.
• Playing ”The Next Best Western” live on guitar at a sold-
out concert at Carnegie Hall.
• Recording your sold-out Carnegie Hall concert and selling
CDs.
8
This commercial purpose distinguishes Section 2319A from Section 1101. A
person who recorded a concert for her personal enjoyment would not violate Sec-
tion 2319A. Further, because no commercial motive is required for a Section 1101
violation, we specifically limit today’s holding to Section 2319A and express no
opinion on Section 1101’s constitutionality.
416 CHAPTER 5. MUSIC
• Playing the entirety of Reunion Hill live on guitar at a sold-
out concert at Carnegie Hall.
• Playing ”The Next Best Western” on guitar in Central Park
on a warm spring day.
• Playing ”The Next Best Western” from a Reunion Hill CD
on a boombox in Central Park on a warm spring day.
• Singing ”The Next Best Western” as you walk down the
street.
• Playing ”The Next Best Western” from a CD of Reunion Hill
• Se ing ”The Next Best Western” as your cellphone ring-
tone.
• Selling ringtones of ”The Next Best Western” to other peo-
ple.
• Sampling ”The Next Best Western” from a CD of Reunion
Hill and using the sample in a hip-hop track.
• Selling karaoke DVDs that include ”The Next Best West-
ern” and its lyrics, set to pictures of trucks and highways.
• Pu ing a Reunion Hill CD in a folk-music-only coin-
operated jukebox.
• Running a streaming-music service that includes the Re-
union Hill version of ”The Next Best Western” as one of
the 3,000,000 tracks users can stream.
• Running a streaming-music service that includes a hard-
rock cover of ”The Next Best Western” as one of the
3,000,000 tracks users can stream.
• Running a streaming-video service that includes a movie
in which the Reunion Hill version of ”The Next Best West-
ern” appears on the soundtrack.
2. Which of your answers to the previous question might change if
”The Next Best Western” had been released in 1967 rather than
1997?
3. How many distinct types of licenses have you encountered in
this chapter? Which of these license types would be necessary
features of any well-functioning copyright system, and which
of them are accidents of history?
4. Is there anything good that can be said aout how United States
copyright law deals with music? Or should we burn the whole
thing to the ground and start again?
6
Trademark
Trademarks are different.
The Trade-Mark Cases 100 U.S. 82 (1879)
Any a empt to identify the essential characteristics of a trademark
with inventions and discoveries in the arts and sciences, or with the
writings of authors, will show that the effort is surrounded with in-
surmountable difficulties.
The ordinary trademark has no necessary relation to invention or
discovery. The trademark recognized by the common law is gener-
ally the growth of a considerable period of use, rather than a sudden
invention. It is often the result of accident, rather than design, and
when under the act of Congress it is sought to establish it by regis-
tration, neither originality, invention, discovery, science, nor art is
in any way essential to the right conferred by that act. If we should
endeavor to classify it under the head of writings of authors, the ob-
jections are equally strong.
The trademark may be, and generally is, the adoption of some-
thing already in existence as the distinctive symbol of the party using
it. At common law, the exclusive right to it grows out of its use, and
not its mere adoption. By the act of Congress, this exclusive right
a aches upon registration. But in neither case does it depend upon
novelty, invention, discovery, or any work of the brain. It requires
no fancy or imagination, no genius, no laborious thought. It is sim-
ply founded on priority of appropriation. We look in vain in the
The leading trademark treatises are J.
statute for any other qualification or condition. If the symbol, how-
Thomas McCarthy, McCarthy on Trade-
ever plain, simple, old, or well known, has been first appropriated marks and Unfair Competition (Thom-
by the claimant as his distinctive trademark, he may by registration son Reuters, on Westlaw), Callmann,
secure the right to its exclusive use. Jerome Gilson & Anne Gilson LaLonde,
Gilson on Trademarks (LexisNexis, on
Lexis), and Siegrun D. Kane, Kane on
Trademark Law: A Practicioner's Guide
(PLI).
Suppose that the Knockoff Soda Corporation starts selling a cola in
418 CHAPTER 6. TRADEMARK
red cans bearing the familiar COCA-COLA name and logo. There are
various reasons we might describe this as wrongful:
• Most obviously, there is a consumer protection rationale: some
consumers will be deceived into buying a can of soda made by
Knockoff rather than by the Coca-Cola Company.
• There is an unfair competition angle: Knockoff unjustifiably free
rides on the Coca-Cola Company’s reputation for quality.
• More subtly, there is a search costs rationale. If consumers can-
not quickly tell the difference between a can of COCA-COLA
made by Knockoff and one made by Coca-Cola, they will spend
"What’s great about this country is that
more time inspecting cans in minute detail, or give up entirely.
America started the tradition where • And perhaps there is a cultural angle, given the importance of
the richest consumers buy essentially brands like COCA-COLA in modern society.
the same things as the poorest. You
can be watching TV and see Coca-Cola, Trademark law is a large and sprawling thing. It is a hybrid of state
and you know that the President drinks and federal protection; the two regimes interrelate so thoroughly that
Coke, Liz Taylor drinks Coke, and just they must be studied together. It has a clear core of liability, sur-
think, you can drink Coke, too. A Coke rounded by a messy penumbra of related causes of action. (The
is a Coke and no amount of money can
get you a better Coke than the one the
boundary between this chapter and the chapter on false advertising,
bum on the corner is drinking. All the for example, is entirely nebulous.) And its subject ma er has ex-
Cokes are the same and all the Cokes panded so greatly over time that it too, spans multiple chapters.
are good. Liz Taylor knows it, the Pres-
ident knows it, the bum knows it, and
you know it."—Andy Warhol
A Subject Matter
The basis of trademark protection is distinctiveness: the capacity of
15 U.S.C. § 1127 [Lanham Act § 45] a word, phrase, logo, or other symbol to identify to consumers the
Construction and definitions; intent of source of goods or services. We begin with words and phrases and
chapter then consider what graphic design elements add. (”Exotic” trade-
The phrase "even if that source is un- marks, such as scents and product designs, will be considered in the
known" was added in 1984 to reverse Design chapter.)
the holding in Anti-Monopoly, Inc. v.
General Mills Fun Group, 684 F. 2d 1316
(9th Cir. 1982) that MONOPOLY was Lanham Act
generic for the board game because
consumers didn't know and didn't care The term “trademark” includes any word, name, symbol, or device,
who made it.
or any combination thereof used by a person … to identify and distin-
guish his or her goods, including a unique product, from those man-
ufactured or sold by others and to indicate the source of the goods,
even if that source is unknown.
Drug Stamps Problem
Drug dealers in many cities sell heroin in single-dose bags for about
$10. Frequently, the bags are labeled with a “stamp”: a phrase, image,
or both. Stamps include EXORCIST, FLATLINE, and GET HIGH OR
DIE TRYING (this last one is laced with fentanyl). Fans of The Wire
SHOOTERS drug stamp may remember PANDEMIC, WMD, and RED TOPS, among others.
A. SUBJECT MATTER 419
Why would drug dealers mark their bags in this way? What func-
tions do the stamps serve? Does it ma er whether these are legally
enforceable trademarks?
1 Word Marks
Zatarains, Inc. v. Oak Grove Smokehouse, Inc.
698 F.2d 786 (5th Cir. 1983)
Zatarain’s is the manufacturer and distributor of a line of over one
hundred food products. Two of these products, “Fish-Fri” and
“Chick-Fri,” are coatings or ba er mixes used to fry foods.
Zatarain’s “Fish-Fri” consists of 100% corn flour and is used to fry
fish and other seafood. “Fish-Fri” is packaged in rectangular card-
board boxes containing twelve or twenty-four ounces of coating mix.
The legend “Wonderful FISH-FRI® .” is displayed prominently on
the front panel, along with the block Z used to identify all Zatarain’s
products. The term “Fish-Fri” has been used by Zatarain’s or its pre-
decessor since 1950 and has been registered as a trademark since 1962.
Zatarain’s “Chick-Fri” is a seasoned corn flour ba er mix used
for frying chicken and other foods. The “Chick-Fri” package, which
is very similar to that used for “Fish-Fri,” is a rectangular cardboard
container labelled “Wonderful CHICK-FRI.” Zatarain’s began to use
the term “Chick-Fri” in 1968 and registered the term as a trademark
in 1976.
Zatarain’s products are not alone in the marketplace. At least
four other companies market coatings for fried foods that are denom- Zatarain's Fish-Fri
inated “fish fry” or “chicken fry.” Appellee Oak Grove Smokehouse,
Inc. (“Oak Grove”) began marketing a “fish fry” and a “chicken fry”
in March 1979. Both products are packaged in clear glassine packets
that contain a quantity of coating mix sufficient to fry enough food for
one meal. The packets are labelled with Oak Grove’s name and em-
blem, along with the words “FISH FRY” OR “CHICKEN FRY.”spices.
Oak Grove’s “FISH FRY” has a corn flour base seasoned with various
spices; Oak Grove’s “CHICKEN FRY” is a seasoned coating with a
wheat flour base.
Appellee Visko’s Fish Fry, Inc. (“Visko’s”) entered the ba er mix
market in March 1980 with its “fish fry.” Visko’s product is packed
in a cylindrical eighteen-ounce container with a resealable plastic lid.
The words “Visko’s FISH FRY” appear on the label along with a pho-
tograph of a pla er of fried fish. Visko’s coating mix contains corn
flour and added
Other food manufacturing concerns also market coating mixes.
Boochelle’s Spice Co. (“Boochelle’s”), originally a defendant in this
lawsuit, at one time manufactured a seasoned “FISH FRY” packaged
in twelve-ounce vinyl plastic packets. Pursuant to a se lement be- Zatarain's Chick-Fri
420 CHAPTER 6. TRADEMARK
tween Boochelle’s and Zatarain’s, Boochelle’s product is now labelled
“FISH AND VEGETABLE FRY.” Another ba er mix, “YOGI Brand ®
OYSTER SHRIMP and FISH FRY,” is also available. A product called
“Golden Dipt Old South Fish Fry” has recently entered the market as
well.
The district court found that Zatarain’s trademark “Fish-Fri” was
a descriptive term with an established secondary meaning, but held
that Oak Grove and Visko’s had a “fair use” defense to their asserted
infringement of the mark. The court further found that Zatarain’s
trademark “Chick-Fri” was a descriptive term that lacked secondary
meaning, and accordingly ordered the trademark registration can-
Oak Grove's Fish Fry
celled. Additionally, the court concluded that Zatarain’s had pro-
duced no evidence in support of its claims of unfair competition on
the part of Oak Grove and Visko’s. [Descriptiveness and secondary
meaning are addressed here; the fair use portion of the case is ex-
cerpted in the Defenses section.] …
A. Basic Principles
The threshold issue in any action for trademark infringement is
whether the word or phrase is initially registerable or protectable.
Courts and commentators have traditionally divided potential trade-
marks into four categories. A potential trademark may be classified
as (1) generic, (2) descriptive, (3) suggestive, or (4) arbitrary or fanci-
ful. These categories, like the tones in a spectrum, tend to blur at the
edges and merge together. The labels are more advisory than defini-
tional, more like guidelines than pigeonholes. Not surprisingly, they
are somewhat difficult to articulate and to apply.
A generic term is the name of a particular genus or class of which
an individual article or service is but a member. A generic term con-
notes the “basic nature of articles or services” rather than the more
individualized characteristics of a particular product. Generic terms
can never a ain trademark protection. Furthermore, if at any time a
registered trademark becomes generic as to a particular product or
service, the mark’s registration is subject to cancellation. Such terms
as aspirin and cellophane have been held generic and therefore un-
protectable as trademarks.
A descriptive term identifies a characteristic or quality of an arti-
cle or service, such as its color, odor, function, dimensions, or ingredi-
ents. Descriptive terms ordinarily are not protectable as trademarks;
they may become valid marks, however, by acquiring a secondary
meaning in the minds of the consuming public. Examples of descrip-
tive marks would include “Alo” with reference to products contain-
ing gel of the aloe vera plant and “Vision Center” in reference to a
business offering optical goods and services. As this court has often
noted, the distinction between descriptive and generic terms is one of
A. SUBJECT MATTER 421
degree. The distinction has important practical consequences, how-
ever; while a descriptive term may be elevated to trademark status
with proof of secondary meaning, a generic term may never achieve
trademark protection.
A suggestive term suggests, rather than describes, some particular
characteristic of the goods or services to which it applies and requires
the consumer to exercise the imagination in order to draw a conclu-
sion as to the nature of the goods and services. A suggestive mark is
protected without the necessity for proof of secondary meaning. The
term “Coppertone” has been held suggestive in regard to sun tanning
products.
Arbitrary or fanciful terms bear no relationship to the products
or services to which they are applied. Like suggestive terms, arbi-
trary and fanciful marks are protectable without proof of secondary
meaning. The term “Kodak” is properly classified as a fanciful term
for photographic supplies; “Ivory” is an arbitrary term as applied to
soap.
As noted earlier, descriptive terms are ordinarily not protectable
as trademarks. They may be protected, however, if they have ac-
quired a secondary meaning for the consuming public. The concept
of secondary meaning recognizes that words with an ordinary and
primary meaning of their own may by long use with a particular
product, come to be known by the public as specifically designating
that product. In order to establish a secondary meaning for a term, a
plaintiff must show that the primary significance of the term in the
minds of the consuming public is not the product but the producer.
The burden of proof to establish secondary meaning rests at all times
with the plaintiff; this burden is not an easy one to satisfy, for a high
degree of proof is necessary to establish secondary meaning for a de-
scriptive term. Proof of secondary meaning is an issue only with re-
spect to descriptive marks; suggestive and arbitrary or fanciful marks
are automatically protected upon registration, and generic terms are
unprotectible even if they have acquired secondary meaning.
B. “FISH-FRI”3
1. Classification
Throughout this litigation, Zatarain’s has maintained that the term
“Fish-Fri” is a suggestive mark. Oak Grove and Visko’s assert that
“fish fry” is a generic term identifying a class of foodstuffs used to
fry fish; alternatively, Oak Grove and Visko’s argue that “fish fry” is
merely descriptive of the characteristics of the product.
We are mindful that the concept of descriptiveness must be con-
3
We note at the outset that Zatarain’s use of the phonetic equivalent of the words
“fish fry” — that is, misspelling it — does not render the mark protectable.
422 CHAPTER 6. TRADEMARK
strued rather broadly. Whenever a word or phrase conveys an im-
mediate idea of the qualities, characteristics, effect, purpose, or in-
gredients of a product or service, it is classified as descriptive and
cannot be claimed as an exclusive trademark. Courts and commen-
tators have formulated a number of tests to be used in classifying a
mark as descriptive.
A suitable starting place is the dictionary, for the dictionary def-
inition of the word is an appropriate and relevant indication ‘of the
ordinary significance and meaning of words’ to the public. Webster’s
Third New International Dictionary lists the following definitions for
the term “fish fry”: “1. a picnic at which fish are caught, fried, and
eaten; .... 2. fried fish.” Thus, the basic dictionary definitions of the
term refer to the preparation and consumption of fried fish. This is at
least preliminary evidence that the term “Fish-Fri” is descriptive of
Zatarain’s product in the sense that the words naturally direct a en-
tion to the purpose or function of the product.
The “imagination test” is a second standard used by the courts
to identify descriptive terms. This test seeks to measure the relation-
ship between the actual words of the mark and the product to which
they are applied. If a term requires imagination, thought and per-
ception to reach a conclusion as to the nature of goods, it is consid-
ered a suggestive term. Alternatively, a term is descriptive if standing
alone it conveys information as to the characteristics of the product.
In this case, mere observation compels the conclusion that a product
branded “Fish-Fri” is a prepackaged coating or ba er mix applied
to fish prior to cooking. The connection between this merchandise
and its identifying terminology is so close and direct that even a con-
sumer unfamiliar with the product would doubtless have an idea of
its purpose or function. It simply does not require an exercise of the
imagination to deduce that “Fish-Fri” is used to fry fish. Accordingly,
the term “Fish-Fri” must be considered descriptive when examined
under the “imagination test.”
A third test used by courts and commentators to classify descrip-
tive marks is whether competitors would be likely to need the terms
used in the trademark in describing their products. A descriptive
term generally relates so closely and directly to a product or service
that other merchants marketing similar goods would find the term
useful in identifying their own goods. Common sense indicates that
in this case merchants other than Zatarain’s might find the term “fish
fry” useful in describing their own particular ba er mixes. While
Zatarain’s has argued strenuously that Visko’s and Oak Grove could
have chosen from dozens of other possible terms in naming their coat-
ing mix, we find this position to be without merit. The fact that a term
is not the only or even the most common name for a product is not
determinative, for there is no legal foundation that a product can be
A. SUBJECT MATTER 423
described in only one fashion. There are many edible fish in the sea,
and as many ways to prepare them as there are varieties to be pre-
pared. Even piscatorial gastronomes would agree, however, that fry-
ing is a form of preparation accepted virtually around the world, at
restaurants starred and unstarred. The paucity of synonyms for the
words “fish” and “fry” suggests that a merchant whose ba er mix is
specially spiced for frying fish is likely to find “fish fry” a useful term
for describing his product.
A final barometer of the descriptiveness of a particular term exam-
ines the extent to which a term actually has been used by others mar-
keting a similar service or product. This final test is closely related to
the question whether competitors are likely to find a mark useful in
describing their products. As noted above, a number of companies
other than Zatarain’s have chosen the word combination “fish fry”
to identify their ba er mixes. Arnaud’s product, “Oyster Shrimp and
Fish Fry,” has been in competition with Zatarain’s “Fish-Fri” for some
ten to twenty years. When companies from A to Z, from Arnaud to
Zatarain’s, select the same term to describe their similar products, the
term in question is most likely a descriptive one.
2. Secondary Meaning
Descriptive terms are not protectable by trademark absent a showing
of secondary meaning in the minds of the consuming public. To pre-
vail in its trademark infringement action, therefore, Zatarain’s must
prove that its mark “Fish-Fri” has acquired a secondary meaning and
thus warrants trademark protection. The district court found that
Zatarain’s evidence established a secondary meaning for the term
“Fish-Fri” in the New Orleans area. We affirm.
In assessing a claim of secondary meaning, the major inquiry is
the consumer’s a itude toward the mark. The mark must denote to
the consumer a single thing coming from a single source, to support
a finding of secondary meaning. Both direct and circumstantial evi-
dence may be relevant and persuasive on the issue.
Factors such as amount and manner of advertising, volume of
sales, and length and manner of use may serve as circumstantial ev-
idence relevant to the issue of secondary meaning. While none of
these factors alone will prove secondary meaning, in combination
they may establish the necessary link in the minds of consumers be-
tween a product and its source. It must be remembered, however,
that the question is not the extent of the promotional efforts, but their
effectiveness in altering the meaning of the term to the consuming
public
Since 1950, Zatarain’s and its predecessor have continuously used
the term “Fish-Fri” to identify this particular ba er mix. Through
the expenditure of over $400,000 for advertising during the period
424 CHAPTER 6. TRADEMARK
from 1976 through 1981, Zatarain’s has promoted its name and its
product to the buying public. Sales of twelve-ounce boxes of “Fish-
Fri” increased from 37,265 cases in 1969 to 59,439 cases in 1979. From
1964 through 1979, Zatarain’s sold a total of 916,385 cases of “Fish-
Fri.”
In addition to these circumstantial factors, Zatarain’s introduced
at trial two surveys conducted by its expert witness, Allen Rosen-
zweig. In one survey, telephone interviewers questioned 100 women
in the New Orleans area who fry fish or other seafood three or more
times per month. Of the women surveyed, twenty-three percent spec-
ified Zatarain’s “Fish-Fri” as a product they “would buy at the gro-
cery to use as a coating” or a “product on the market that is espe-
cially made for frying fish.” In a similar survey conducted in person
at a New Orleans area mall, twenty-eight of the 100 respondents an-
swered “Zatarain’s ‘Fish-Fri’” to the same questions.8
The authorities are in agreement that survey evidence is the
most direct and persuasive way of establishing secondary meaning.
The district court believed that the survey evidence produced by
Zatarain’s, when coupled with the circumstantial evidence of adver-
tising and usage, tipped the scales in favor of a finding of secondary
meaning. Were we considering the question of secondary meaning
de novo, we might reach a different conclusion than did the district
court, for the issue is close. Mindful, however, that there is evidence
in the record to support the finding below, we cannot say that the
district court’s conclusion was clearly erroneous. Accordingly, the
finding of secondary meaning in the New Orleans area for Zatarain’s
descriptive term “Fish-Fri” must be affirmed. …
C. “CHICK-FRI”
1. Classification
Most of what has been said about “Fish-Fri” applies with equal force
to Zatarain’s other culinary concoction, “Chick-Fri.” “Chick-Fri” is at
least as descriptive of the act of frying chicken as “Fish-Fri” is descrip-
tive of frying fish. It takes no effort of the imagination to associate
the term “Chick-Fri” with Southern fried chicken. Other merchants
are likely to want to use the words “chicken fry” to describe similar
products, and others have in fact done so. Sufficient evidence exists
8
The telephone survey also included this question: “When you mentioned ‘fish
fry,’ did you have a specific product in mind or did you use that term to mean
any kind of coating used to fry fish?” To this inartfully worded question, 77%
of the New Orleans respondents answered “specific product” and 23% answered
“any kind of coating.” Unfortunately, Rosenzweig did not ask the logical follow-up
question that seemingly would have ended the inquiry conclusively: “Who makes
the specific product you have in mind?” Had he but done so, our task would have
been much simpler.
A. SUBJECT MATTER 425
to support the district court’s finding that “Chick-Fri” is a descriptive
term; accordingly, we affirm.
2. Secondary Meaning
The district court concluded that Zatarain’s had failed to establish
a secondary meaning for the term “Chick-Fri.” We affirm this find-
ing. The mark “Chick-Fri” has been in use only since 1968; it was
registered even more recently, in 1976. In sharp contrast to its promo-
tions with regard to “Fish-Fri,” Zatarain’s advertising expenditures
for “Chick-Fri” were mere chickenfeed; in fact, Zatarain’s conducted
no direct advertising campaign to publicize the product. Thus the
circumstantial evidence presented in support of a secondary mean-
ing for the term “Chick-Fri” was paltry.
Allen Rosenzweig’s survey evidence regarding a secondary mean-
ing for “Chick-Fri” also “lays an egg.” The initial survey question was
a “qualifier:” “Approximately how many times in an average month
do you, yourself, fry fish or other seafood?” Only if respondents
replied “three or more times a month” were they asked to continue
the survey. This qualifier, which may have been perfectly adequate
for purposes of the “Fish-Fri” questions, seems highly unlikely to pro-
vide an adequate sample of potential consumers of “Chick-Fri.” This
survey provides us with nothing more than some data regarding fish
friers’ perceptions about products used for frying chicken. As such,
it is entitled to li le evidentiary weight.
It is well se led that Zatarain’s, the original plaintiff in this trade-
mark infringement action, has the burden of proof to establish sec-
ondary meaning for its term. This it has failed to do.
Innovation Ventures, LLC v. N.V.E., Inc.
694 F.3d 723 (6th Cir. 2012)
[The plaintiff sold a beverage using the mark 5-HOUR ENERGY. It
sued the makers of 6 HOUR POWER.] The 5-HOUR ENERGY mark
could be characterized as merely descriptive, in the sense that it sim-
ply describes a product that will give someone five hours of energy.
But that is not the end of such an inquiry. The first question one
would ask is how would the energy be transferred? Through food?
Through drink? Through injections? Through pills? Through exer-
cise? Also, one would ask what kind of energy is the mark referring
to? Food energy (measured in Calories)? Electrical energy? Nuclear
energy? With some thought, one could arrive at the conclusion that
the mark refers to an energy shot. But it is not as straightforward as
NVE suggests. Such cognitive inferences are indicative of “sugges-
tive” rather than descriptive marks.
The nature of the 5-HOUR ENERGY mark “shares a closer kinship
with those marks previously designated as suggestive than those la-
beled merely descriptive because of the degree of inferential reason- 5-Hour Energy and 6 Hour Power
426 CHAPTER 6. TRADEMARK
ing necessary for a consumer to discern” that the 5-HOUR ENERGY
mark relates to an energy shot. The connection between “5-hour” and
“ENERGY” is “not so obvious that a consumer seeing 5-HOUR EN-
ERGY in isolation would know that the term refers to” an energy
shot rather than, for example, a ba ery for electronics, an exercise
program, a backup generator, or a snack for endurance sports. Con-
necting the mark 5-HOUR ENERGY with the energy-shot product
requires imagination and perception to determine the nature of the
goods.
Trademark Manual of Examining Procedure
§ 1202.08
The title, or a portion of a title, of a single creative work must be re-
Title of a Single Creative Work fused registration unless the title has been used on a series of cre-
Cooper: 254 F.2d 611 (C.C.P.A. 1958) ative works. The title of a single creative work is not registrable. In re
Cooper (“A book title identifies a specific literary work and is not asso-
ciated in the public mind with the publisher, printer or bookseller.”).
§ 1202.18
The addition of the term HASHTAG or the hash symbol (#) to an oth-
Hashtag Marks erwise unregistrable mark typically cannot render it registrable. Cf.
TMEP § 1209.03(m) and §§ 1215-1215.10 regarding generic top-level
domain names.
Elliot v. Google Inc.
45 F.Supp. 3d 1156 (D. Ariz. 2014)
This case concerns two United States registrations of the GOOGLE
mark: Number 2884502 (the “‘502 Mark”) and Number 2806075 (the
“‘075 Mark”). The ‘502 Mark covers “computer hardware; computer
software for creating indexes of information, indexes of web sites and
indexes of other information resources.” The ‘075 Mark covers, inter
alia:
Computer services, namely, providing software interfaces
available over a network in order to create a personal-
ized on-line information service; extraction and retrieval
of information and data mining by means of global com-
puter networks; creating indexes of information, indexes
of web sites and indexes of other information sources in
connection with global computer networks; providing in-
formation from searchable indexes and databases of infor-
mation, including text, electronic documents, databases,
graphics and audio visual information, by means of global
computer information networks.
Plaintiffs contend the GOOGLE mark has become generic because a
majority of the public understands the word google, when used as a
verb, to mean the indiscriminate act of searching on the internet with-
A. SUBJECT MATTER 427
out regard to the search engine used. Underlying Plaintiffs’ argument
is the proposition that verbs, as a ma er of law, are incapable of dis-
tinguishing one service from another, and can only refer to a category
of services.
I. G F G
A mark is subject to cancellation if it “becomes the generic name for
the goods or services, or a portion thereof, for which it is registered.”. 15 U.S.C. § 1064(3)
“The primary significance of the registered mark to the relevant pub-
lic . . . shall be the test for determining whether the registered mark
has become the generic name of goods or services on or in connection
with which it has been used.” . Under the primary-significance test, a 15 U.S.C. § 1064(3)
mark is not generic when “he primary significance of the term in the
minds of the consuming public is not the product but the producer.
See Bayer Co. v. United Drug Co. (“What do the buyers understand by United Drug: , 272 F. 505 (S.D.N.Y. 1921)
the word for whose use the parties are contending?”) If the primary
significance of the trademark is to describe the type of product rather
than the producer, the trademark is a generic term and cannot be a
valid trademark.
The crux of Plaintiffs’ argument is the premise “a trademark
ceases to function as such when it is used primarily as a verb.” This
premise is flawed: a trademark performs its statutory function so
long as it distinguishes a product or service from those of others and
indicates the product’s or service’s source. Verb use of a trademark
is not fundamentally incapable of identifying a producer or denoting
source. A mark can be used as a verb in a discriminate sense so as to
refer to an activity with a particular product or service, e.g., “I will
PHOTOSHOP the image” could mean the act of manipulating an im-
age by using the trademarked Photoshop graphics editing software
developed and sold by Adobe Systems. This discriminate mark-as-
verb usage clearly performs the statutory source-denoting function
of a trademark.
However, a mark can also be used as a verb in an indiscrimi-
nate sense so as to refer to a category of activity in general, e.g., “I
will PHOTOSHOP the image” could be understood to mean image
manipulation by using graphics editing software other than Adobe
Photoshop. This use commandeers PHOTOSHOP to refer to some-
thing besides Adobe’s trademarked product. Such indiscriminate
mark-as-verb usage does not perform the statutory trademark func-
tion; instead, it functions as a synecdoche describing both a particular
species of activity (e.g. using Adobe’s PHOTOSHOP brand software)
and the genus of services to which the species belongs (e.g. using im-
age manipulation software in general).
It cannot be understated that a mark is not rendered generic
merely because the mark serves a synecdochian “dual function” of
428 CHAPTER 6. TRADEMARK
identifying a particular species of service while at the same time in-
dicating the genus of services to which the species belongs. Nor is
a mark generic merely because it has some significance to the public
as an indication of the nature or class of an article. Moreover, ca-
sual, non-purchasing uses of marks are not evidence of generic us-
age”because primary significance is determined by the use and un-
derstanding of the mark in the context of purchasing decisions.
The salient question is the primary significance of the term to the
consumer. If the term indicates a product of a single producer to the
consumer, it is a valid trademark. Thus, even if a mark qua verb is
used exclusively in the indiscriminate sense, the mark is not generic
if a majority of the consuming public nevertheless uses the mark qua
mark to differentiate one particular product or service from those of-
fered by competitors.
It is thus contrary to both the le er and spirit of trademark law to
strip a mark of legal protection solely because the mark – cultivated
by diligent marketing, enforcement, and quality control – has become
so strong and widespread that the public adopts the mark to describe
that act of using the class of products or services to which the mark
belongs. As one scholar has stated, “top-of-mind use of a trademark
in its verb form, far from indicating the mark’s generic status, may
Laura A. Heymann, The Grammar of well indicate the enduring fame of the brand.” . This is especially
Trademarks, 14 Lewis & Clark L. Rev. true where the mark in question is arbitrary or fanciful because such
1313 (2010)
terms had a different or no independent meaning before they were
adopted as marks.
II. E O E
Defendant’s expert linguist, Dr. Geoffrey Nunberg, opined about a
linguistic phenomenon observed in some “highly distinctive and fa-
mous marks” where “the name of a particular product is used to con-
vey the genus without actually denoting it.” Dr. Nunberg’s expert
report explains:
Trademarks are sometimes used in extended or figura-
tive ways to denote something independent of their pro-
prietary meaning (cf Astroturf for political movements,
Band-Aid for social remedies). In a special case of this
process, trademarks may be used as verbs to denote the
characteristic action associated with the product or service
they represent. Examples include TiVo, Fed-Ex, Skype,
and Google. Such verbs may be specific in their applica-
tion but such verbs may also be used in a representative
way to connote a more general action. Thus when some-
body says, “I need the book tomorrow – can you Fed Ex
it to me?” we ordinarily assume that a shipment by UPS
will be acceptable as well, without assuming that the verb
A. SUBJECT MATTER 429
to Fed-Ex simply means to ship by priority courier.
Accordingly, Dr. Nunberg asserts that the use of the word google as
a nonspecific verb does not compromise the status of the GOOGLE
mark because it literally denotes the use of Google’s search engine.
Consistent with his report, Dr. Nunberg opined that the GOOGLE
mark has not become generic and that the phrase “go google it” is
not necessarily shorthand for “look it up on the internet.”
Defendant’s survey expert, Dr. Gerald Ford, conducted a con- Not that Gerald Ford.
sumer survey modeled after the one used in E. I. DuPont de Nemours Yoshida: 393 F. Supp. 502 (E.D.N.Y.
& Co. v. Yoshida Int’l, Inc., to prove that the primary significance 1975)
of the TEFLON mark in the minds of consumers was DuPont’s non-
stick coating, rather than non-stick coatings in general. In Dr. Ford’s
“Teflon” survey, 420 randomly selected participants were contacted
via telephone and were asked whether “Hewle Packard” and “com-
puter” were brands names or common names. All 420 respondents
successfully identified “Hewle Packard” as a brand name and “com-
puter” as a common name.
The respondents were then asked to identify six names (STP;
Coke; Jello; refrigerator; margarine; aspirin) as either brand names
or common names and were told that “don’t know” or “no opin-
ion” was an acceptable answer. They were not told that “both”
was an acceptable answer, but answers of “both” were neverthe-
less recorded. The respondents were subsequently asked to apply
the brand name/common name distinction to another five names
(browser; website; Amazon; Yahoo; Google) specifically with re-
spect to searching on the internet. Last, the respondents were asked
whether they conducted searches on the internet – respondents who
did not were excluded from the results.
Excluding 19 respondents who answered they do not perform
searches on the internet, 93.77% identified GOOGLE as a brand name
and 5.25% identified GOOGLE as a common name. For purposes of
comparison, 93.52% of consumers identified the YAHOO! mark as
a brand name while 5.99% identified YAHOO! as a common name.
Both GOOGLE and YAHOO! beat out COKE: 89.53% of consumers
identified the COKE mark as a brand name while 6.73% identified
COKE as a common name. The only mark with higher brand name
recognition or lower common name misrecognition than GOOGLE
was the AMAZON mark at 96.51% and 2.99%, respectively.
III. P S G M C
P
As to dictionary usage, Plaintiffs are unable to cite to a single dic-
tionary whose definition of the word “google” neglects to mention
the trademark significance of the term. Plaintiffs accuse Defendant
of “intimidat[ing] [dictionaries] into submission” because Defendant
430 CHAPTER 6. TRADEMARK
enforces its mark. For example, Defendant asked the website word-
spy.com to modify its definition of google as a discriminate verb
(“To search for information on the Web, particularly by using the
Google search engine”) to “take into account the trademark status
of Google.” Likewise, Plaintiffs contend that the Merriam-Webster
dictionary “tempered its definition of google as a result of its fear
of Defendant” because the publisher stated “we were trying to be as
respectful as we possibly could be about Google’s trademark.” Plain-
tiffs also cite the opinions of both of their expert linguists in support of
the proposition that the inclusion of a word in dictionaries means that
the word carries generic usage. It is undisputed that both of Plain-
tiffs’ linguistic experts testified the GOOGLE mark serves to identify
Google as the provider of its search engine services. Viewing the evi-
dence in the light most favorable to Plaintiffs, it establishes the word
google carries meaning as an indiscriminate verb.
Shifting to mark-holder usage, Plaintiffs emphasize that Google
co-founder Larry Page stated on July 8, 1998, “Have fun and keep
googling.” Plaintiffs also cite to the fact that entering the search query
“define: google” into the Google search engine resulted in a verb def-
inition of: “Use an internet search engine, particularly google.com.”
Plaintiffs argue that non-enforcement of a mark suggests it is generic
and point to the fact that the GOOGLE mark is used in other do-
main names that Plaintiffs did not purchase. However, it is undis-
puted that: Defendant uses the GOOGLE mark to identify the Google
search engine in national advertising campaigns; has policies in place
that set strict standards for third party use of the mark; publishes
rules and guidelines for use of the mark; and spends sizeable sums
policing and enforcing its rights in the mark. While it is true that
non-enforcement of a mark may be evidence the mark is generic, the
undisputed facts make it unreasonable to infer that Defendant does
not enforce its rights in the mark.
If competitors can accurately describe their products or services
without using the mark in question, it suggests the mark is not
generic. A corollary of this point is that the existence of a short
and simple descriptive term for the genus to which the trademarked
species belongs also evidences the mark in question as not generic.
Q-Tips: 108 F. Supp. 845 (1952) E.g., Q-Tips, Inc. v. Johnson & Johnson (distinguishing the trade-
marked product “Q-Tips” from the descriptive term for the type of
goods “double tipped applicator”). In this case, “internet search en-
gines” is the short and simple descriptive term for the genus to which
the Google search engine belongs. It is undisputed that competing
search engine providers Yahoo! and Microsoft Bing routinely distin-
guish their search engine services from Google’s search engine ser-
vice in press releases and advertising campaigns. Thus, there is no
evidence of competitors’ usage capable of supporting the inference
A. SUBJECT MATTER 431
that the word google has become the common descriptive term for
the category of services to which the Google search engine belongs:
internet search engines.
As to media use, Plaintiffs contend that the media often uses the
word google as an indiscriminate verb. Some of Plaintiffs’ purported
evidence of indiscriminate verb use is inadmissible because it was not
timely disclosed. As Defendant points out, some of Plaintiffs’ media
evidence recognizes the trademark significance of the GOOGLE mark
and that Plaintiffs have not designated a single instance in which a
major media outlet has referred to a competing search engine as a
“google.” Plaintiffs’ media evidence consists mostly of verb usage,
some of which is followed by recognition of trademark significance.
Like Plaintiffs’ other evidence, the media’s use of the word google
establishes that it is sometimes used as verb to mean search on the
internet.
S
The word google has four possible meanings in this case: (1) a trade-
mark designating the Google search engine; (2) a verb referring to
the act of searching on the internet using the Google search engine;
(3) a verb referring to the act of searching on the internet using any
search engine; and (4) a common descriptive term for search engines
in general. The ‘502 and ‘075 marks are subject to cancellation only if
the fourth meaning is the primary significance of the word google to
a majority of the consuming public.
Accepting Plaintiffs’ evidence as true, 51% of those who utilize in-
ternet search engines use the word google as a verb to mean search
on the internet. This establishes that the second and third meanings
exist. Drawing all reasonable inferences in Plaintiffs’ favor, a major-
ity of the consuming public uses google-as-verb in its indiscriminate
sense to mean search on the internet without regard to the search en-
gine used. This means that the third meaning is more significant than
the second meaning. Plaintiffs then make the leap, without any com-
petent evidence, that the third meaning is the is the most frequently
used meaning and seek cancellation of the ‘502 and ‘075 Marks be-
cause of the frequency with which the word google is used as a verb.
This argument is factually and legally flawed. Factually, Plaintiffs
offer no competent evidence in support of their assertion that verb
use is more frequent than non-verb use. Legally, the test for whether
a mark has become generic is not whether its most frequent use is
as an indiscriminate verb, but whether its primary significance to a
majority of the consuming public is as a common descriptive term.
Even if the most frequent use of the word google is its third meaning,
Plaintiffs’ argument nevertheless fails because there is no evidence to
suggest that the primary significance of the word google is the fourth
432 CHAPTER 6. TRADEMARK
meaning because the third meaning is most frequently used.
Plaintiffs’ claim for trademark cancellation disappears when the
admissible evidence in the record is examined according to the laws
enacted by Congress. It is undisputed that well over 90% of the con-
suming public understands the word google with respect to search-
ing on the internet as designating not a common name, but a partic-
ular brand. This fact establishes that the first meaning (a trademark
designating the Google search engine) is more significant than is the
fourth meaning (a common descriptive term for search engines in
general) to a vast majority of the consuming public. Therefore, the
‘502 and ‘075 marks are not subject to cancellation. This is true even
though the Court accepts as true that the 51% of the public also under-
stands the third meaning (a verb referring to the act of searching on
the internet using any search engine) – it is undisputed that the first
and third meanings are not mutually exclusive and, in fact, coexist.
CONCLUSION
Accepting Plaintiffs’ evidence as true and drawing all justifiable in-
ferences therefrom in Plaintiffs’ favor, a majority of the public uses
the word google as a verb to refer to searching on the internet with-
out regard to search engine used. Giving Plaintiffs every reasonable
benefit, a majority of the public uses google-as-verb to refer to the
act of searching on the internet and uses GOOGLE-as-mark to refer
to Defendant’s search engine. However, there is no genuine dispute
about whether, with respect to searching on the internet, the primary
significance of the word google to a majority of the public who utilize
internet search engines is a designation of the Google search engine.
Therefore, Defendant is entitled to judgment as a ma er of law that
the ‘075 and ‘502 Marks are not generic.
Trademark Manual of Examining Procedure
1209.03(d)
When two descriptive terms are combined, the determination of
Combined Terms whether the composite mark also has a descriptive significance turns
upon the question of whether the combination of terms evokes a
new and unique commercial impression. If each component retains
its descriptive significance in relation to the goods or services, the
combination results in a composite that is itself descriptive. [Cases
cited found SNAP SIMPLY SAFER merely descriptive for “medical
devices, namely, cannulae; medical, hypodermic, aspiration and in-
jection needles; medical, hypodermic, aspiration and injection sy-
ringes”), PATENTS.COM merely descriptive of computer software
for managing a database of records that could include patents and for
tracking the status of the records by means of the Internet), SCREEN-
WIPE generic as applied to premoistened antistatic cloths for cleaning
A. SUBJECT MATTER 433
computer and television screens), and SUPERJAWS merely descrip-
tive for a variety of machine and hand tools including jaws).]
However, a mark comprising a combination of merely descrip-
tive components is registrable if the combination of terms creates a
unitary mark with a unique, nondescriptive meaning, or if the com-
posite has a bizarre or incongruous meaning as applied to the goods.
[Cases cited found SUGAR & SPICE not merely descriptive of bakery
products and SNO-RAKE not merely descriptive of a snow removal
hand tool.]
The Trademark Trial and Appeal Board has held that the addi-
tion of the prefix “e” does not change the merely descriptive signifi-
cance of a term in relation to goods or services sold or rendered elec-
tronically, where the record showed that the “e” prefix has become
commonly recognized as a designation for goods or services sold or
delivered electronically. In re Int’l Bus. Machs. Corp. (“We see no dif- IBM: 81 USPQ 2d 1677 (TTAB 2006)
ference in the meaning or connotation of ‘e-server’ and ‘eserver,’ and
consider them both to be an abbreviated form of ‘electronic server.’”).
Similarly, with appropriate evidence, the prefix “i” or “I” was held
to be understood by purchasers to signify Internet, when used in
relation to Internet-related products or services. In re Zanova, Inc. Zaonova: 59 USPQ 2d 1300 (TTAB 2000)
(ITOOL merely descriptive of computer software for use in creating
web pages, and custom design of websites for others). In these situa-
tions, the examining a orney should provide evidence of use of the
prefix “e” or “i” in relation to the goods or services.
The foreign equivalent of a merely descriptive English word is no 1209.03(g)
more registrable than the English word itself. A word taken from a Foreign Equivalents
well-known foreign modern language, which is, itself, descriptive of
a product, will be so considered when it is a empted to be registered
as a trade-mark in the United States for the same product. [Cases
cited held AYUMI and its Japanese-character equivalent held merely
descriptive for footwear where the evidence, including applicant’s
own admissions, indicated that the primary meaning of applicant’s
mark is “walking,” Chinese characters that mean ORIENTAL DAILY
NEWS merely descriptive of newspapers), and SAPORITO, an Ital-
ian word meaning “tasty,” merely descriptive because it describes a
desirable characteristic of applicant’s dry sausage.]
Although words from modern languages are generally translated
into English, the doctrine of foreign equivalents is not an absolute
rule, but merely a guideline. The doctrine should be applied only
when it is likely that the ordinary American purchaser would stop
and translate the foreign word into its English equivalent. The ”ordi-
nary American purchaser” in this context refers to the ordinary Amer-
ican purchaser who is knowledgeable in the foreign language. Defin-
ing “ordinary American purchaser” as the “average American buyer”
434 CHAPTER 6. TRADEMARK
would write the doctrine out of existence.” The “ordinary American
purchaser” includes all American purchasers, including those profi-
cient in a non-English language who would ordinarily be expected to
translate words into English.
1209.03(h)
As a general rule, an acronym or initialism cannot be considered de-
Acronyms scriptive unless the wording it stands for is merely descriptive of the
goods or services, and the acronym or initialism is readily understood
by relevant purchasers to be ”substantially synonymous” with the
merely descriptive wording it represents. [Cases cited held CMS not
substantially synonymous with the grape varietals cabernet, merlot,
and syrah and therefore not merely descriptive for wine, and NKJV
substantially synonymous with merely descriptive term “New King
James Version” and thus merely descriptive of bibles.]
412 F.3d 373 (2d Cir. 2005)
2 Designs
Star Industries, Inc. v. Bacardi & Co. Ltd.
In June 1996, inspired by the success of flavored vodkas introduced
by leading international companies such as Stolichnaya, Star’s pres-
ident decided to develop an orange-flavored Georgi vodka. A new
label was designed, consisting of the traditional Georgi label, which
contains a coat of arms and a logo consisting of stylized capital le ers
spelling ‘Georgi’ on a white background, together with three new el-
ements: an orange slice, the words “orange flavored,” and a large
elliptical le er “O” appearing below the “Georgi” logo and surround-
ing all of the other elements. The “O” was rendered as a vertical oval,
with the outline of the “O” slightly wider along the sides (about one
quarter inch thick) and narrowing at the top and bo om (about one
eighth inch thick); the outline of the “O” is colored orange and dec-
Georgi O orated with two thin gold lines, one bordering the inside and one
bordering the outside of the outline. Star was apparently the first
company to distribute an orange-flavored alcoholic beverage pack-
aged in a bo le bearing a large elliptical orange le er “O.”
In 2000 Bacardi began to develop an orange-flavored rum, which
it ultimately introduced nationally in 2001 under the name ”Bacardi
O.” Bacardi’s line of flavored rums originated in 1995 with ”Bacardi
Limon.” Unlike Bacardi’s other flavored rums, however, Bacardi O
was produced and marketed bearing a distinct label consisting of the
Bacardi logo and bat symbol above a large elliptical le er ”O” against
a clear background.
After sending a cease and desist le er to Bacardi in September
2001, Star filed the instant lawsuit in May 2002.
Bacardi O
The district court erred when it described the Star “O” as a ba-
A. SUBJECT MATTER 435
sic geometric shape or le er, and therefore rejected inherent distinc-
tiveness and required a showing of secondary meaning. The Star
“O” is not a “common basic shape” or le er, and the district court’s
holding to the contrary was premised on a misunderstanding of this
trademark law concept. Unshaded linear representations of common
shapes or le ers are referred to as “basic.” They are not protectable as
inherently distinctive, because to protect them as trademarks would
be to deprive competitors of fundamental communicative devices es-
sential to the dissemination of information to consumers. However,
stylized le ers or shapes are not “basic,” and are protectable when
original within the relevant market. See Courtenay Communications Courtenay: 334 F.3d 210 (2d Cir. 2003)
Corp. v. Hall (distinguishing case of mark consisting of word dis-
played with distinctive “typeface, color, and other design elements,”
which was protectable, from cases holding generic words not pro-
tectable); compareIn re W.B. Roddenbery Co. (holding design consisting Roddenberry: 135 U.S.P.Q. 215, (TTAB
of colored circle a ached to differently colored rectangle protectable 1962)
as inherently distinctive) withIn re Hillerich & Bradsby Co. (noting that Hillerich: 204 F.2d 287 (CCPA 1953)
applicant conceded that unshaded line oval was not inherently dis-
tinctive). Star’s “O” is sufficiently stylized to be inherently distinctive
and therefore protectable as a trademark. It is stylized with respect
to shading, border, and thickness, and each of these design elements
distinguishes it from the simple or basic shapes and le ers that have
been held unprotectable.
The Star “O” design had sufficient shape and color stylization to
render it slightly more than a simply linear representation of an el-
lipse or the le er “O.” It was, furthermore, a unique design in the
alcoholic beverage industry at the time it was introduced. This suf-
fices to establish its inherent distinctiveness and thus its protectabil-
ity. Furthermore, the Star “O” design is protectable separately from
the other design elements on the Georgi orange-flavored vodka la-
bel precisely because the “O” design is itself inherently distinctive.
However, the extent of stylization was marginal at best. The outline
of the “O,” though not uniform, is ordinary in its slightly varying
width, and the interior and exterior borders are also ordinary. The
result is a “thin” or weak mark, which will be entitled to only limited
protection.
Melting Bad Problem
You are the general counsel of Blancorp, a medium-sized scientific
and industrial chemical supply firm named for its founder and CEO,
Walter Blanco. He has been hoping for years to break in to the snow-
and-ice melter market with his own line of salts for homeowners,
businesses, and cities to spread on streets and sidewalks after snow-
storms. Blancorp’s research chemists have been studying a type of
naturally occurring rock salt from Quebec, Canada. Known locally as
436 CHAPTER 6. TRADEMARK
le loup bleu (French for “the blue wolf”), this particular variety is no-
table for its cobalt blue color and its remarkable resistance to clump-
ing. (Some other melters are either naturally or dyed blue, but they
all have lighter shades, Blanco assures you.)
Blanco has informed you that his chemists have succeeded in repli-
cating le loup bleu in the lab, with high purity, the same blue color,
and the same resistance to clumping. He has asked them to start full-
scale production immediately, and has come to you to discuss poten-
tial trademarks. Give Blanco your advice on which of the following
would be good choices from a legal and business perspectives:
• ALL-NATURAL BLUE
• ICE MELT
• LOUP BLEU
• CLUMPLESS
• COBALT WOLF
• QUIZMARUNK
• Sell the salt in a bag with a line drawing of a wolf
Do you have any other ideas or advice?
B Ownership
Ownership of trademarks is determined, in the first instance, by state
common law. Federal registration is an overlay onto this system; it
mostly assumes, rather than displaces, state law.
1 Priority at Common Law
Galt House Inc. v. Home Supply Company
483 S.W.2d 107 (Ky. 1972)
The plaintiff, Galt House, Inc., instituted this action to enjoin the de-
fendants, Home Supply Company, and its principal officer and stock-
holder, Al J. Schneider, from operating a new hotel in Louisville, Ken-
tucky, under the assumed trade name “Galt House.”
During the Nineteenth Century the Galt House Hotel was a fa-
mous hostelry in Louisville with an excellent and widely recognized
reputation. In 1838 the bar-room at the Galt House was the scene of
a killing as a result of which an a orney and judge and his two com-
panions were indicted for murder. The trial itself is famous in the
annals of Kentucky history.
In 1842 Charles Dickens toured America. In his account in “Amer-
ican Notes,” he was characteristically uncomplimentary in his de-
scription of Louisville; he was impressed, however, with the Galt
House. He wrote: “We slept at the Galt House; a splendid hotel; and
The second Galt House
were as handsomely lodged as though we had been in Paris, rather
B. OWNERSHIP 437
than hundreds of miles beyond the Alleghanies.” In 1858 Charles
Mackay, an English writer, passed through Louisville. In his account
in “Life and Liberty in America” he remarked: ”We crossed in the
steamer to Louisville, and once more found ourselves in a land of
plenty and comfort, in a flourishing city, in an excellent hotel – the
Galt House, one of the best conducted establishments in America.””
The Galt House, located on Main Street at Second Street, occu-
pied separate buildings during its existence as a hotel. The second
Galt House was destroyed by fire in January 1865 at a reported loss
of $1,000,000. The third Galt House, a magnificent structure in its
day, was abandoned as a hotel and ceased operations in 1920. Belk-
nap Hardware Company thereafter occupied the site of the last Galt
House.
Thus, it would appear that since 1920 there has been no use of the
name Galt House in connection with or to describe a hotel. The name
doubtless strikes interest when used in the presence of history buffs
and among those familiar with the folklore of Louisville. Among
such cognoscenti the name encourages remembrance of things past.
In February 1964, the plaintiff, Galt House, Inc., incorporated un-
der the laws of this state. In its articles of incorporation it adopted The third Galt House
as its corporate name the term “Galt House.” The plaintiff has no as-
sets and no liabilities; neither does it have corporate books or records.
Plaintiff’s president and sole shareholder is Arch Stallard, Sr., a real
estate broker in Louisville, Kentucky, who specializes in hotel and
motel real estate. Mr. Stallard has on occasions since the date of the
filing of plaintiff’s articles of incorporation made a few sporadic in-
quiries concerning possible locations for a hotel and considered en-
gaging in an enterprise by which a franchise operation would be ef-
fected. These few efforts came to naught and Mr. Stallard testified
that because of illness and death in his family he had been “laying
dormant.”
The defendant, Home Supply Company, is a Kentucky corpora-
tion organized sometime prior to 1950. The defendant, Al J. Schnei-
der, is its president and controlling shareholder. Home Supply Com-
pany is active in the business of constructing and operating hotels
in this state. It presently operates a hotel on the Kentucky State
Fair Board property under the assumed name “Executive Inn.” It is
presently engaged in the construction and completion of a high-rise
hotel on riverfront-development property belonging to an agency of
the City of Louisville.
In April 1969, Home Supply Company, through its president
Schneider, submi ed to the city agency plans of a hotel bearing the
name Galt House. Construction commenced in May 1970. A new
hotel, 26 stories in height with 714 rooms, is now nearly completed
and has affixed a sign bearing the name “The Galt House.” The ho- The fourth (and current) Galt House
438 CHAPTER 6. TRADEMARK
tel already has scheduled future conventions and room reservations,
although it will not open until after May 1972. In April 1971, Home
Supply Company applied for and received from the Secretary of State
of Kentucky a registration and service mark of the name “The Galt
House.”
Plaintiff filed suit in August 1971, seeking to enjoin the defendants
from any use of the name Galt House.
As found by the circuit judge, the corporation which operated the
last Galt House was formed in 1911 and its formal corporate existence
expired in 1961. From 1920 to 1961, however, it did not engage in the
hotel business. Therefore, the name Galt House had not been used
in connection with a going business for 49 years when defendants
undertook to use it as the name of their new hotel in 1969.
The primary argument asserted by the plaintiff actually rests
upon a premise that by mere incorporation under a corporate name
it retains the right to exclude others from the use of that name so long
as the corporation legally exists.
Kansas City Star: 299 F.2d 320 (8th Cir. In Duff v. Kansas City Star Company, the court held that there is no
1962) such thing as property in a trade-mark except as a right appurtenant
to an established business or trade with which the mark is employed.
This principle was applied to the trade name of a newspaper which
had not been published for eight years. The court decided that since
there was no established business (good will) to which the contested
name a ached, the plaintiff had no right to prevent another from us-
ing the name in an active, going business. The court pointed out that
the contested name was no more than the common name of a once-
published newspaper.
We are also unable to find that plaintiff has any standing to enjoin
under the theory that it was placed on the same footing with the for-
mer Galt House Corporation whose existence expired by operation
of law in 1961. There was no transfer of the name from the expiring
Galt House Corporation to plaintiff. The former Galt House Corpora-
tion at the end of its corporate term of existence as fixed by its articles
terminated its right to do business in 1961. It had not engaged in the
hotel business under its corporate name since 1920. The former Cor-
poration was incapable of possessing a business with a good will or a
corporate trade name. The name did not survive, for there was noth-
ing to which it could be a ached.
We must only determine whether the plaintiff has the right to pro-
hibit the defendants from using the name. We agree with the trial
judge that the plaintiff has no standing to enjoin the use of the name
by the defendants under the facts of this case.
United Drug Co. v. Theodore Rectanus Co.
248 U.S. 90 (1918)
B. OWNERSHIP 439
The essential facts are as follows: About the year 1877 Ellen M. Regis,
a resident of Haverhill, Massachuse s, began to compound and dis-
tribute in a small way a preparation for medicinal use in cases of
dyspepsia and some other ailments, to which she applied as a dis-
tinguishing name the word “Rex” – derived from her surname. The
word was put upon the boxes and packages in which the medicine
was placed upon the market, after the usual manner of a trade-mark.
Subsequently, in the year 1911, petitioner purchased the business
with the trade-mark right, and has carried it on in connection with its
other business, which consists in the manufacture of medicinal prepa-
rations, and their distribution and sale through retail drug stores,
known as “Rexall stores,” situate in the different States of the Union,
four of them being in Louisville, Kentucky.
Meanwhile, about the year 1883, Theodore Rectanus, a druggist
in Louisville, familiarly known as “Rex,” employed this word as a
trade-mark for a medicinal preparation known as a “blood purifier.”
He continued this use to a considerable extent in Louisville and vicin-
ity, spending money in advertising and building up a trade, so that
– except for whatever effect might flow from Mrs. Regis’ prior adop-
tion of the word in Massachuse s, of which he was entirely ignorant
– he was entitled to use the word as his trade-mark. In the year 1906
he sold his business, including the right to the use of the word, to
respondent; and the use of the mark by him and afterwards by re-
spondent was continuous from about the year 1883 until the filing of
the bill in the year 1912.
Petitioner’s first use of the word “Rex” in connection with the sale
of drugs in Louisville or vicinity was in April, 1912, when two ship-
Rex blood purifier advertisement
ments of “Rex Dyspepsia Tablets,” aggregating 150 boxes and valued
at $22.50, were sent to one of the “Rexall” stores in that city. Shortly
after this the remedy was mentioned by name in local newspaper ad-
vertisements published by those stores. In the previous September,
petitioner shipped a trifling amount – five boxes – to a drug store in
Franklin, Kentucky, approximately 120 miles distant from Louisville.
There is nothing to show that before this any customer in or near
Kentucky had heard of the Regis remedy, with or without the de-
scription “Rex,” or that this word ever possessed any meaning to the
Rexall dyspepsia tablets label
purchasing public in that State except as pointing to Rectanus and
the Rectanus Company and their “blood purifier.” That it did and
does convey the la er meaning in Louisville and vicinity is proved
without dispute.
The entire argument for the petitioner is summed up in the con-
tention that whenever the first user of a trade-mark has been reason-
ably diligent in extending the territory of his trade, and as a result of
such extension has in good faith come into competition with a later
user of the same mark who in equal good faith has extended his trade
440 CHAPTER 6. TRADEMARK
locally before invasion of his field by the first user, so that finally it
comes to pass that the rival traders are offering competitive merchan-
dise in a common market under the same trade-mark, the later user
should be enjoined at the suit of the prior adopter, even though the
la er be the last to enter the competitive field and the former have
already established a trade there.
The asserted doctrine is based upon the fundamental error of sup-
posing that a trade-mark right is a right in gross or at large, like a
statutory copyright or a patent for an invention, to either of which, in
truth, it has li le or no analogy. There is no such thing as property
in a trade-mark except as a right appurtenant to an established busi-
ness or trade in connection with which the mark is employed. The
law of trade-marks is but a part of the broader law of unfair competi-
tion; the right to a particular mark grows out of its use, not its mere
adoption; its function is simply to designate the goods as the product
of a particular trader and to protect his good will against the sale of
another’s product as his; and it is not the subject of property except
in connection with an existing business.
The owner of a trade-mark may not, like the proprietor of a
patented invention, make a negative and merely prohibitive use of it
as a monopoly. In truth, a trade-mark confers no monopoly whatever
in a proper sense, but is merely a convenient means for facilitating
the protection of one’s good-will in trade by placing a distinguishing
mark or symbol – a commercial signature – upon the merchandise or
the package in which it is sold.
It results that the adoption of a trade-mark does not, at least in the
absence of some valid legislation enacted for the purpose, project the
right of protection in advance of the extension of the trade, or oper-
ate as a claim of territorial rights over areas into which it thereafter
may be deemed desirable to extend the trade. And the expression,
sometimes met with, that a trade-mark right is not limited in its en-
joyment by territorial bounds, is true only in the sense that wherever
the trade goes, a ended by the use of the mark, the right of the trader
to be protected against the sale by others of their wares in the place
of his wares will be sustained.
Conceding everything that is claimed in behalf of the petitioner,
the entire business conducted by Mrs. Regis and her firm prior to
April, 1911, when petitioner acquired it, was confined to the New
England States with inconsiderable sales in New York, New Jersey,
Canada, and Nova Scotia. There was nothing in all of this to give
her any rights in Kentucky, where the principles of the common law
obtain.
Undoubtedly, the general rule is that, as between conflicting
claimants to the right to use the same mark, priority of appropria-
tion determines the question. But the reason is that purchasers have
B. OWNERSHIP 441
come to understand the mark as indicating the origin of the wares, so
that its use by a second producer amounts to an a empt to sell his
goods as those of his competitor. The reason for the rule does not
extend to a case where the same trade-mark happens to be employed
simultaneously by two manufacturers in different markets separate
and remote from each other, so that the mark means one thing in
one market, an entirely different thing in another. It would be a per-
version of the rule of priority to give it such an application in our
broadly extended country that an innocent party who had in good
faith employed a trade-mark in one State, and by the use of it had
built up a trade there, being the first appropriator in that jurisdiction,
might afterwards be prevented from using it, with consequent injury
to his trade and good-will, at the instance of one who theretofore had
employed the same mark but only in other and remote jurisdictions,
upon the ground that its first employment happened to antedate that
of the first-mentioned trader.
In this case, as already remarked, there is no suggestion of a sinis-
ter purpose on the part of Rectanus or the Rectanus Company. And
it results, as a necessary inference from what we have said, that pe-
titioner, being the newcomer in that market, must enter it subject to
whatever rights had previously been acquired there in good faith by
the Rectanus Company and its predecessor. In that market, until peti-
tioner entered it, “Rex” meant the Rectanus product, not that of Regis.
Planetary Motion, Inc. v. Techsplosion, Inc.
261 F.3d 1188 (11th Cir. 2001)
[In 1994, Byron Darrah released an email program he named Cool-
mail. Darrah made Coolmail available by posting it to a service
named Sunsite, where users with an Internet connection could down-
load it for free. Darrah made Coolmail available under the GNU Gen-
eral Public License, which allows users to copy, distribute, and mod-
ify the software as long as they adhere to various conditions, such as
releasing any modified versions under the GPL.]
We find that, under these principles, Darrah’s activities under
the COOLMAIL mark constitute a “use in commerce” sufficiently
public to create ownership rights in the mark. The distribution was
widespread, and there is evidence that members of the targeted pub-
lic actually associated the mark COOLMAIL with the Software to
which it was affixed. Darrah made the software available not merely
to a discrete or select group (such as friends and acquaintances, or
at a trade show with limited a endance), but to numerous end-users
via the Internet. The Software was posted under a filename bearing
the COOLMAIL mark on a site accessible to anyone who had access
to the Internet. End-users communicated with Darrah regarding the
Software by referencing the COOLMAIL mark in their e-mails. Ap-
442 CHAPTER 6. TRADEMARK
pellants argue that only technically-skilled UNIX users made use of
the Software, but there is no evidence that they were so few in num-
ber to warrant a finding of de minimis use.
The mark served to identify the source of the Software. The
COOLMAIL mark appeared in the subject field and in the text of the
announcement accompanying each release of the Software, thereby
distinguishing the Software from other programs that might perform
similar functions available on the Internet or sold in software compi-
lations. The announcements also apparently indicated that Darrah
was the “Author/Maintainer of Coolmail” and included his e-mail ad-
dress. The user manual also indicated that the Software was named
“Coolmail.” The German company S.u.S.E. was able to locate Darrah
in order to request permission to use his Software in its product un-
der the mark “Coolmail.” Appellants do not assert that S.u.S.E. was
unaware that the Software was called COOLMAIL when it contacted
Darrah.
Software is commonly distributed without charge under a GNU
General Public License. The sufficiency of use should be determined
according to the customary practices of a particular industry. That
the Software had been distributed pursuant to a GNU General Pub-
lic License does not defeat trademark ownership, nor does this in
any way compel a finding that Darrah abandoned his rights in trade-
mark. Appellants misconstrue the function of a GNU General Public
License. Software distributed pursuant to such a license is not neces-
sarily ceded to the public domain and the licensor purports to retain
ownership rights, which may or may not include rights to a mark.16
Heinemann: 342 F.Supp. 203 (N.D. Ill. Appellants cite Heinemann v. General Motors Corp. for the propo-
1972) sition that Darrah was a “hobbyist” unworthy of common law trade-
mark protection. Heinemann is factually distinguishable from the case
at hand. The plaintiff in Heinemann used a mark in connection with
his automobile before an automobile manufacturer independently
had adopted the same name for a new model. The court held that the
plaintiff had not established common law ownership rights based on
two findings. First, the court found that because Heinemann’s pur-
pose in using the mark was to “open [at a later date] an automobile
equipment shop which would have capitalized upon the slogan,” he
merely a empted to “reserve a trade or service mark pending the cre-
ation of a trade or business ....” The court reasoned as follows:
While the law does not require a nationwide business; an
old, established business; or even a profitable business
16
Because a GNU General Public License requires licensees who wish to copy,
distribute, or modify the software to include a copyright notice, the license itself is
evidence of Darrah’s efforts to control the use of the COOLMAIL mark in connec-
tion with the Software.
B. OWNERSHIP 443
for the acquisition of property interests in trade or service
marks, it does require a presently existing trade or busi-
ness for such acquisition. The exhibits disclose that Plain-
tiff had only a desire to open a business in futuro. To hold
otherwise would make a trade mark a property right in
gross, instead of a right appurtenant.
The Heinemann court also found that plaintiff Heinemann’s activities
consisted merely of occasionally racing or displaying the automobile
at fairs as a hobby, as evidenced by his testimony that he was em-
ployed at an oil company. Here, Darrah did not a empt to “ware-
house” the mark by promoting a product he merely intended to de-
velop and distribute at a later date. Darrah’s use of the mark to des-
ignate the distributed Software and each subsequent version thereof
indicates that his use was not mere sporadic or token use. Further-
more, unlike Heinemann, Darrah activities pertained to his chosen
profession. Darrah is employed as a computer systems administra-
tor, which entails the management and oversight of computer net-
works and systems as well as the development of software in support
thereof.
Appellants also rely on DeCosta v. Columbia Broad. Sys., Inc. to DeCosta: 520 F.2d 499, 513 (1st Cir.
argue that Darrah is an eleemosynary individual and therefore un- 1975)
worthy of protection under unfair competition laws. The DeCosta
court did not hold that the that the absence of a profit-oriented en-
terprise renders one an eleemosynary individual, nor did it hold that
such individuals categorically are denied protection.18 Common law
unfair competition protection extends to non-profit organizations be-
cause they nonetheless engage in competition with other organiza-
tions. Thus, an eleemosynary individual that uses a mark in connec-
tion with a good or service may nonetheless acquire ownership rights
in the mark if there is sufficient evidence of competitive activity.
Here, Darrah’s activities bear elements of competition, notwith-
standing his lack of an immediate profit-motive. By developing and
distributing software under a particular mark, and taking steps to
avoid ceding the Software to the public domain, Darrah made efforts
to retain ownership rights in his Software and to ensure that his Soft-
ware would be distinguishable from other developers who may have
distributed similar or related software. Competitive activity need
not be fueled solely by a desire for direct monetary gain. Darrah de-
rived value from the distribution because he was able to improve his
Software based on suggestions sent by end-users. Just as any other
18
It is unlikely that the plaintiff’s activities in De Costa—costumed performances
and distribution of his picture at local rodeos, parades, hospitals, etc. – would
generate a “public association” sufficient to confer him common law trademark
ownership rights.
444 CHAPTER 6. TRADEMARK
consumers, these end-users discriminate among and share informa-
tion on available software. It is logical that as the Software improved,
more end-users used his Software, thereby increasing Darrah’s recog-
nition in his profession and the likelihood that the Software would be
improved even further.
In light of the foregoing, the use of the mark in connection with the
Software constitutes significant and substantial public exposure of a
mark sufficient to have created an association in the mind of public.
Dudley v. HealthSource Chiropractic, Inc.
585 F. Supp. 2d 433 (W.D.N.Y. 2008)
[Plaintiff used the mark HEALTHSOURCE CHIROPRACTIC for his
chiropractic practice in Rochester, New York starting in 2003. De-
fendant started franchising chiropractic practices under the name
HEALTHSOURCE CHIROPRACTIC in 2006, initially in Ohio. It
quickly expanded to 325 franchisees nationwide. It awarded a fran-
chise in Rochster to one Dr. Divito, which opened in April 2007.]
The Plaintiff contends that he is the senior user of the Health-
Source Chiropractic mark not only in the greater Rochester area but
also on the internet.
Geographical zones of exclusivity developed to protect the rights
of concurrent, innocent adopters who used the same mark in different
geographic areas. There is li le likelihood of confusion, deception,
Plaintiff's website logo, at
or mistake when a mark is used by different businesses in distinct re-
http://healthsourcechiropractic.com/
gions of the country. Common law trademark rights only extend to
the territories in which the mark’s adopter sells its products, renders
its services, establishes recognition of its mark, or draws its trade. A
user of a mark who does not seek federal registration risks the pos-
sibility that another user will independently adopt the same mark
Defendant's website logo, at
and establish exclusive rights to use the mark in a remote area. The
http://healthsourcechiro.com/
trademark laws allow concurrent use of the same mark by multiple
adopters so long as each adopter’s use of the mark does not unrea-
sonably intrude on another user’s geographic zone of exclusivity. By
allowing concurrent use of a mark, the trademark laws tolerate a cer-
tain amount of confusion.
By claiming exclusivity to the HealthSource Chiropractic mark on
the internet, the Plaintiff assumes that the internet is a territory in
which he can establish exclusive rights. The internet is not, however,
a geographic territory to be subdivided; instead, it is a global com-
munication medium that is accessible from anywhere on the planet.
The internet has become vital for local, regional, national, and interna-
tional communication. It is used for selling, advertising, and market-
ing products and services as well as communicating with clients and
customers. An internet presence has become crucial for businesses of
all sizes, whether they operate locally or nationally.
B. OWNERSHIP 445
The rights of concurrent users would be substantially harmed if
one user were able to monopolize the internet to the exclusion of other
lawful users of the same mark. Unlike national advertising which
would often be cost-prohibitive for a local or regional user, the inter-
net is an almost-necessary tool for a user to develop its business and
remain competitive within its exclusive territory. Consequently, this
Court concludes that neither party can claim exclusive rights to the
internet.
Even though concurrent, lawful users of a mark should be allowed
to use their marks on the internet, use on the internet cannot be ma-
nipulated to intrude on another’s territory in bad faith. For instance,
it would be improper for a user to target internet advertisements to
consumers within another user’s exclusive territory or to advertise
on locally focused web sites that target that market.
In this case, the Defendants have taken reasonable measures to
ensure that they are not using the HealthSource Chiropractic mark
on the internet to intrude into the Plaintiff’s territory. The Defen-
dants have removed Dr. Divito’s practice completely from Health-
Source Inc.’s web site. Dr. Divito maintains his own web site,
rochesterspinalcare.com, for his Rochester practice and only uses the
HealthQuest mark on his web site. The Plaintiff has presented no
evidence that indicates the Defendants have used the HealthSource
mark on the internet to specifically target the Rochester market.
A trademark owner cannot reasonably expect to have exclusive
use of a term on the internet. Defendants presented evidence that as
of 2008 there were 754 registered domain names with that included
the term “healthsource.” Users of a mark must develop ways to dis-
tinguish themselves on the internet beyond resorting to the trade-
mark laws.
CreAgri, Inc. v. USANA Health Sciences, Inc.
474 F.3d 626 (9th Cir. 2007)
In a contest involving competing products claiming trademark prior-
ity, the district court determined, in order to acquire priority, a “use
in commerce” means a lawful use – here, a use compliant with federal
labeling requirements. We agree.
In the spring of 2001, Appellant CreAgri began selling Olivenol, a
dietary supplement containing an apparently beneficial antioxidant
found in olives called hydroxytyrosol. At the time, Olivenol’s label in-
dicated that each tablet contained 25mg of hydroxytyrosol, the prod-
uct’s primary active ingredient. CreAgri now admits that each tablet
contains at most 3mg of hydroxytyrosol and that Olivenol was, there-
fore, inaccurately labeled.
On June 18, 2002 – more than a year after CreAgri began selling
Olivenol – Appellee USANA filed an intent to use application with
the Patent and Trademark Office asserting that it intended to begin
446 CHAPTER 6. TRADEMARK
selling a series of vitamins, minerals, and nutritional supplements
containing an ingredient called Olivol, which – like Olivenol – is an
olive extract containing apparently beneficial polyphenols. USANA
began selling these products in August 2002, the PTO granted US-
ANA’s application, and OLIVOL is now listed on the principal reg-
ister with a priority date of June 18, 2002. The present suit arises be-
cause, according to CreAgri, the name of USANA’s Olivol ingredient
is confusingly similar to the name of its own Olivenol product and,
therefore USANA is infringing upon the trademark rights CreAgri
acquired when it began selling Olivenol more than a year earlier.
If “use in commerce” were the only requirement for acquiring
trademark rights,9 then CreAgri would have an easier path to estab-
lishing priority of its mark because it began selling Olivenol more
than one year before USANA’s intent to use application was filed.
But the inquiry does not stop with use in commerce. It has long been
the policy of the PTO’s Trademark Trial and Appeal Board that use
in commerce only creates trademark rights when the use is lawful.
The rationale for this rule is twofold. First, as a logical ma er, to
hold otherwise would be to put the government in the anomalous
position of extending the benefits of trademark protection to a seller
based upon actions the seller took in violation of that government’s
own laws. Second, as a policy ma er, to give trademark priority to
a seller who rushes to market without taking care to carefully com-
ply with the relevant regulations would be to reward the hasty at the
expense of the diligent.
By CreAgri’s own admission, each tablet sold under the Olivenol
name before June 18, 2002 contained, at most, 3mg of hydroxytyrosol,
while Olivenol’s label claimed that each tablet contained either 25mg
or 5mg of this nutrient. 21 C.F.R. § 101.9(g)(4)(i), however, requires
that the actual amount of a nutrient added to a product be “at least
equal to the value for that nutrient declared on the label.” Because
the actual amount of hydroxytyrosol (at most 3mg) was less than the
values for hydroxytyrosol declared on Olivenol’s labels (25mg and
5mg), CreAgri’s product was, at all relevant times, in violation.
Nexus
There must be some nexus between use of a mark and an alleged vio-
lation before it can be said that the unlawfulness of a sale or shipment
has resulted in a trademark’s invalidity. CreAgri argues that its label-
ing violation was collateral to its use of the Olivenol mark and, thus-
he former should not render the la er “unlawful.”
We neither adopt nor reject this rule because, even if the rule were
adopted, CreAgri could not benefit from it. While it may be possible
to conceive of a situation in which violation of a law in connection
with a trademarked product would have no effect on the rights inur-
B. OWNERSHIP 447
ing in that trademark, the nexus between a misbranded product and
that product’s name, particularly one designed for human consump-
tion, is sufficiently close to justify withholding trademark protection
for that name until and unless the misbranding is cured.
Potential Exemption
We also reject CreAgri’s argument that, because there was no ac-
cepted method for determining the hydroxytyrosol content of a
given substance at the time Olivenol’s labels were in error, Olivenol
was exempt from the FDCA’s labeling requirements. See 21 C.F.R.
§ 101.36(f)(2) (allowing a seller to apply for an exemption from these
regulations if it is technologically infeasible or otherwise impractica-
ble to comply with them). While it is unclear, as a factual ma er,
whether appropriate testing was technologically feasible at the time,
section 101.36(f)(2) does not provide for an automatic exemption but,
rather, expressly requires sellers to apply for and receive an exemption
from the FDA. CreAgri did neither
If CreAgri had applied for, and if the FDA had exercised its discre-
tion by granting, an exemption on the basis of technological infeasi-
bility, then CreAgri’s violation would be properly excused. CreAgri,
however, offered no evidence to show that it so much as applied to
the Office of Nutritional Products for an exemption, much less that
the FDA granted CreAgri “special allowances” from the FDCA’s la-
beling requirements.
Materiality
CreAgri’s final argument with respect to the apparent unlawfulness
of its use of “Olivenol” in commerce prior to USANA’s priority date
is that the labeling defect was so harmless or de minimis that it should
be excused as “immaterial” under General Mills, Inc. v. Health Valley General Mills: 24 U.S.P.Q.2d 1270 (TTAB
Foods(holding that a labeling defect is “material” only when it is “of 1992)
such gravity and significance that the usage must be considered un-
lawful – so tainted that, as a ma er of law, it can create no trademark
rights”).
General Mills involved a dispute between Health Valley Foods
(seller of Fiber 7 Flakes cereal) and General Mills, Inc. (seller of Fiber
One cereal), in which the former accused the la er of not having
lawfully used “Fiber One” in commerce when the la er applied for
trademark registration. Although the first eighteen boxes of Fiber
One – indeed, all boxes sold before General Mills applied for trade-
mark registration of the Fiber One mark – were mislabeled under the
FDCA, General Mills noticed the error, promptly corrected it, and
then sold over 600,000 correctly labeled boxes to consumers before
Health Valley Foods even applied to register “Fiber 7 Flakes.” Under
448 CHAPTER 6. TRADEMARK
these facts, the Trademark Trial and Appeal Board concluded that
cancelling Fiber One’s registration based on the original eighteen mis-
labeled boxes would be “Draconian.”
This case is categorically different. Whereas General Mills cor-
rected its labeling error before its competitor’s priority date – thus
eventually establishing the “lawful use in commerce” necessary for
trademark protection – CreAgri did not correct its labeling error be-
fore USANA’s priority date, and thus, there is not a single instance
of “lawful use in commerce” prior to June 18, 2002 upon which CreA-
gri can base its claim of priority. Accordingly, we need not decide
whether to adopt the generamills test for materiality; by any defini-
tion, Olivenol’s defect – which existed as to every bo le of Olivenol
sold prior to the competing registrant’s priority date – was material.
C
Because CreAgri’s admi ed violation cannot be deemed collateral to
use of the Olivenol mark, excused, or overlooked as immaterial, it fol-
lows that the Olivenol mark was not lawfully used in commerce prior
to Olivol’s June 18, 2002 priority date. As such, USANA’s mark has
priority over CreAgri’s mark, and a trademark infringement action
by CreAgri against USANA cannot stand.
Bilgewater Bill’s Problem
Consider the following sequence of events. Who has priority in Bal-
timore? In Sea le? In Chicago?
• A uses BILGEWATER BILL’S in Baltimore.
• B uses BILGEWATER BILL’S in Sea le.
2 Federal Registration
a Registration
Lanham Act
(a) Application for use of trademark. –
15 U.S.C. § 1051
Lanham Act § 1
(1) The owner of a trademark used in commerce may re-
Application for registration … quest registration of its trademark on the principal register
hereby established by paying the prescribed fee and filing
in the Patent and Trademark Office an application and a
Who is the "owner" of a trademark?
verified statement, in such form as may be prescribed by
the Director, and such number of specimens or facsimiles
of the mark as used as may be required by the Director.
35 U.S.C. § 1057
Lanham Act § 7 (b) Certificate as prima facie evidence. – A certificate of registration
Certificates of registration of a mark upon the principal register provided by this chapter
B. OWNERSHIP 449
shall be prima facie evidence of the validity of the registered
mark and of the registration of the mark, of the owner’s own-
ership of the mark, and of the owner’s exclusive right to use
the registered mark in commerce on or in connection with the
goods or services specified in the certificate, subject to any con-
ditions or limitations stated in the certificate.
(c) Application to register mark considered constructive use. – Contin-
gent on the registration of a mark on the principal register pro-
vided by this chapter, the filing of the application to register
such mark shall constitute constructive use of the mark, confer- 403 F.2d 904 (7th Cir. 1968)
ring a right of priority, nationwide in effect, on or in connection
with the goods or services specified in the registration.
Burger King of Florida, Inc. v. Hoots
Plaintiff Burger King of Florida, Inc. opened the first BURGER KING
restaurant in Jacksonville, Florida, in 1953. In July, 1961, plaintiffs
opened their first Illinois BURGER KING restaurant in Skokie. There-
after, on October 3, 1961, plaintiffs’ certificate of federal registration Defendant's restaurant
of the mark was issued. Subsequently, plaintiffs opened a restau-
rant in Champaign, Illinois, and at the time of the trial in November,
1967, were operating more than fifty BURGER KING restaurants in
the state of Illinois.
In 1957 the defendants, who had been operating an ice cream busi-
ness in Ma oon, Illinois, opened a BURGER KING restaurant there.
In July, 1959, they registered that name under Illinois law as their
trade mark, without notice of plaintiffs’ prior use of the same mark.
On September 26, 1962, the defendants, with constructive knowledge
of plaintiffs’ federal trade mark, opened a second similar restaurant,
in Charleston, Illinois.
We hold that plaintiffs’ federal registration of the trade mark Plaintiff's logo
BURGER KING gave them the exclusive right to use the mark in Illi-
nois except in the Ma oon market area in Illinois where the defen-
dants, without knowledge of plaintiffs’ prior use, actually used the
mark before plaintiffs’ federal registration. The defendants did not
acquire the exclusive right they would have acquired by their Illinois
registration had they actually used the mark throughout Illinois prior
to the plaintiffs’ federal registration.
Plaintiffs agree that the defendants as prior good faith users are to
be protected in the area that they had appropriated. Thus, the ques-
tion narrows to what area in Illinois the defendants have appropri-
ated by virtue of their Illinois registration.
At common law, defendants were entitled to protection in the
Logo used by plaintiff's franchisee in
Ma oon market area because of the innocent use of the mark prior Australia. Can you guess the back-
to plaintiffs’ federal registration. They argue that the Illinois Trade story?
450 CHAPTER 6. TRADEMARK
Mark Act was designed to give more protection than they already
had at common law, and that various provisions of the Illinois Act
indicate an intention to afford Illinois registrants exclusive rights to
use trade marks throughout the state, regardless of whether they ac-
tually used the marks throughout the state or not. However, the Act
itself does not express any such intention. Moreover, we think that
whether or not Illinois intended to enlarge the common law with re-
spect to a right of exclusivity in that state, the Illinois Act does not
enlarge its right in the area where the federal mark has priority.
The defendants argue also that unless they are given the right to
exclusive use throughout Illinois, many persons from all parts of Illi-
nois in our current mobile society will come in contact with the de-
fendants’ business and will become confused as to whether they are
ge ing the defendants’ product, as they intended.
We are not persuaded by this argument. Defendants have not
shown that the Illinois public is likely to confuse the products fur-
nished by plaintiffs and by defendants. We are asked to infer that
confusion will exist from the mere fact that both trade marks co-exist
in the state of Illinois. The mere fact that some people will travel from
one market area to the other does not, of itself, establish that confu-
sion will result.
Bilgewater Bill's Problem, Redux
1. Consider the following sequence of events. Who has priority in
Baltimore? In Sea le? In Chicago?
• A uses BILGEWATER BILL’S in Baltimore.
• B uses BILGEWATER BILL’S in Sea le.
• A files for federal trademark registration under § 1(a).
2. Consider the following sequence of events. Who has priority in
Baltimore? In Sea le? In Chicago?
• A uses BILGEWATER BILL’S in Baltimore.
• B uses BILGEWATER BILL’S in Sea le.
• B files for federal trademark registration under § 1(a).
3. Consider the following sequence of events. Who has priority in
Baltimore? In Sea le? In Chicago?
• A uses BILGEWATER BILL’S in Baltimore.
• B uses BILGEWATER BILL’S in Sea le.
• A files for federal trademark registration under § 1(a).
• B files for federal trademark registration under § 1(a).
B. OWNERSHIP 451
b Intent-to-Use Applications
Lanham Act
(b) Application for bona fide intention to use trademark. – 15 U.S.C. § 1051
(1) A person who has a bona fide intention, under circum- Lanham Act § 1
stances showing the good faith of such person, to use a Application for registration …
trademark in commerce may request registration of its
trademark on the principal register hereby established by
paying the prescribed fee and filing in the Patent and
Trademark Office an application and a verified statement,
in such form as may be prescribed by the Director.
(d) Verified statement that trademark is used in commerce. –
(1) Within six months after the date on which the notice of al-
lowance with respect to a mark is issued to an applicant un-
der subsection (b) of this section, the applicant shall file in
the Patent and Trademark Office, together with such num-
ber of specimens or facsimiles of the mark as used in com-
merce as may be required by the Director and payment
of the prescribed fee, a verified statement that the mark is
in use in commerce and specifying the date of the appli-
cant’s first use of the mark in commerce and those goods
or services specified in the notice of allowance on or in con-
nection with which the mark is used in commerce. Subject
to examination and acceptance of the statement of use, the
mark shall be registered.
(2) The Director shall extend, for one additional 6-month pe-
riod, the time for filing the statement of use under para-
graph (1), upon wri en request of the applicant before the
expiration of the 6-month period provided in paragraph
(1). In addition to an extension under the preceding sen-
tence, the Director may, upon a showing of good cause by
the applicant, further extend the time for filing the state-
ment of use under paragraph (1) for periods aggregating
not more than 24 months, pursuant to wri en request of
the applicant made before the expiration of the last exten-
sion granted under this paragraph.
Kelly Services, Inc. v. Creative Harbor, LLC [I]
124 F. Supp. 3d 768 (E.D. Mich. 2015)
This is a trademark dispute. Plaintiffs/Counter–Defendants Kelly
Services, Inc. and Kelly Properties, LLC (collectively, “Kelly”) and
Defendant/Counter–Plaintiff Creative Harbor, LLC (“Creative Har-
bor”) each developed a mobile application that provides job search-
452 CHAPTER 6. TRADEMARK
ing and job placement tools. Now, Kelly and Creative Harbor dispute
which company has priority to the trademark “WorkWire.” Creative
Harbor has filed two “intent to use” applications with the United
States Patent and Trademark Office (the “Creative ITUs”), and Cre-
ative Harbor claims priority based upon those filings. Kelly counters
that it has priority because it used the mark in commerce before Cre-
ative Harbor filed the Creative ITUs.
FACTUAL BACKGROUND
A. The Kelly Workwire App
Kelly provides career development information and job placement
tools to employers and prospective employees. In early 2013, Kelly
began developing an iPad application that would provide users
with access to personnel placement services, career information, job
searching tools, and a Kelly branch office locator. Kelly intended
to distribute the application through the Apple App Store. Kelly
decided to call its application “WorkWire” (the “Kelly WorkWire
App”).
Kelly completed the development of the Kelly WorkWire App on
February 4, 2014. That same day, Kelly submi ed the Kelly Work-
Wire App to Apple’s iTunes Connect, an Internet-based tool that al-
lows a software developer to submit an application for sale in the
Apple App Store, pending Apple’s approval of the application.
Approximately one week later, on February 10, 2014, Apple in-
formed Kelly that the Kelly WorkWire App was rejected because of
a problem with the application’s metadata. The next day, Kelly re-
submi ed the Kelly WorkWire App for Apple’s review.
On February 17, 2014, Apple informed Kelly that the Kelly Work-
Wire App had been approved and was “ready for sale.” However,
Apple’s designation of the Kelly WorkWire App as “ready for sale”
did not immediately make the Kelly WorkWire App available for the
public to download from the Apple App Store. The Kelly WorkWire
App was first released to the public via the Apple App Store on Febru-
ary 19, 2014, sometime after 8:11 p.m. Eastern Standard Time. A con-
sumer first downloaded the Kelly WorkWire App from the Apple
App Store on February 20, 2014.
Kelly's WorkWire app logo B. The Creative WorkWire App
In September 2013, Christian Jurgensen (“Jurgensen”), an en-
trepreneur based in Los Angeles, California, independently came
up with an idea for a mobile application for use by employers and
prospective employees. Jurgensen decided to call his application
“WorkWire” (the “Creative Workwire App”).
B. OWNERSHIP 453
In early February 2014, Jurgensen formed Creative Harbor as
the limited liability company responsible for the Creative WorkWire
App. At approximately the same time, Creative Harbor hired an intel-
lectual property a orney to provide advice on trademark protection.
On February 16, 2014, the a orney informed Creative Harbor that the
trademark for “WorkWire” was available.
Three days later, on February 19, 2014, Creative Harbor filed the
Creative ITUs with the United States Patent and Trademark Office
(the “USPTO”).1 The Creative ITUs were for the mark “WorkWire”
(hereinafter the “Mark”). The Creative ITUs were filed at 6:28 p.m.
and 7:56 p.m. Eastern Standard Time.
Creative Harbor has tried to make the Creative WorkWire App
available for download by the public through the Apple App Store.
However, Apple will not accept the Creative WorkWire App for post-
ing in the Apple App Store because the “WorkWire” name is already
Creative Harbor's WorkWire logo
being used by the Kelly WorkWire App. Creative Harbor acknowl-
edges that it has not used the Mark in commerce and therefore has
not completed registration of the Mark.
PROCEDURAL HISTORY
On March 10, 2014, Creative Harbor’s counsel sent a “cease and de-
sist” le er to Kelly. Creative Harbor stated that Kelly’s use of the
Mark in connection with the Kelly WorkWire App “constitutes trade-
mark infringement and unfair competition under federal and state
law.” Creative Harbor therefore “demand[ed] that Kelly ... cease all
use of the term ‘WorkWire’....” In response, Kelly filed this declara-
tory judgment action against Creative Harbor.
ANALYSIS
A. Kelly Did Not Use the Mark in Commerce Before Creative Filed the
Creative ITUs, and Thus Kelly Does Not Have Priority Based on Its
Alleged Prior Use
Ordinarily, priority to a mark is established “as of the first actual use
of [the] mark” in commerce. . However, the Lanham Act allows a
person not yet using a mark to file an anticipatory application for
registration – i.e., an ITU application – on the basis of an intent to use
the mark in the future. If the ITU applicant later uses the mark in a
commercial transaction and files a statement of use with the USPTO
within the prescribed time frame, the mark is registered and the date
1
As explained further below, an intent to use (“ITU”) application is an anticipa-
tory application for registration of a trademark based on the applicant’s intent to
use the mark in the future. Under certain circumstances, an ITU application estab-
lishes the applicant’s priority to the trademark over another person who adopted
the trademark after the ITU was filed.
454 CHAPTER 6. TRADEMARK
the ITU application was filed becomes the applicant’s constructive-
use date. This gives the [ITU] applicant priority-of-use over anyone
who adopts the mark after the constructive-use date.
Kelly argues that it used the Mark in commerce before Creative
Harbor filed the Creative ITUs and that Kelly therefore has priority
to the Mark over Creative Harbor. Creative Harbor contends that
Kelly did not use the Mark in commerce before the Creative ITUs
were filed and, thus, that Kelly does not have priority over Creative
Harbor. Accordingly, the issue with respect to priority is whether
Kelly actually used the Mark in commerce before Creative Harbor
filed the Creative ITUs. The Court holds that Kelly did not.
15 U.S.C. § 1127 Under the Lanham Act, “[t]he term ‘use in commerce’ means the
bona fide use of a mark in the ordinary course of trade, and not made
merely to reserve a right in a mark.”. Use in commerce requires a
genuine commercial transaction or an a empt to complete a genuine
commercial transaction. The use need not be extensive nor result in
deep market penetration or widespread recognition. However, there
has to be an ”open” use, that is to say, a use has to be made to the rele-
vant class of purchasers or prospective purchasers. An ”internal” use
cannot give rise to priority rights to a mark. S Indeed, the talismanic
test for use in commerce is whether or not the use was sufficiently
public to identify or distinguish the marked goods in an appropri-
ate segment of the public mind as those of the adopter of the mark.
Allard: 146 F.3d 350 (6th Cir. 1998) Applying this test in Allard Enters., Inc. v. Advanced Programming
Resources, Inc., the Sixth Circuit found sufficient public use when a
claimant offered its services to potential customers through “numer-
ous solicitations” bearing the mark.
Kelly contends that it used the Mark in commerce on February 4,
2014, when it submi ed the Kelly Workwire App to iTunes Connect
for Apple’s review. Kelly argues that its submission constitutes use
in commerce because it “engaged Apple, an unrelated company, at
arms-length, in the ordinary course of trade and subject to Apple’s
software developer’s requirements.” But Kelly has not shown that
its submission of the Kelly WorkWire App to Apple was sufficiently
open or public to identify or distinguish its application in the minds
of consumers. To the contrary, the bilateral exchange between Kelly
and iTunes Connect provided no notice of the Kelly WorkWire App
to potential consumers – i.e., persons who might eventually down-
load the Kelly WorkWire App from the Apple App Store. Indeed,
by merely submi ing the Kelly WorkWire App for Apple’s review,
Kelly did not make the Kelly WorkWire App available for download
by the public. At best, Kelly’s submission was a preparatory step to
making the Kelly WorkWire App available to consumers. an appli-
cant’s preparations to use a mark in commerce are insufficient to con-
stitute use in commerce.
B. OWNERSHIP 455
B. Creative Harbor is Not Entitled to a Declaration That it Has Priority At
this Time
In its Motion, Creative Harbor seeks summary judgment “on the is-
sue of priority in its right to use the Mark.” But Creative Harbor has
not yet established its priority. All that Creative Harbor has done is
file the Creative ITUs. The Creative ITUs – in and of themselves – do
not establish Creative Harbor’s priority to the Mark. Rather, the Cre-
ative ITUs merely establish Creative Harbor’s constructive-use date,
contingent on Creative Harbor’s registration of the Mark. Thus, in or-
der to establish its priority, Creative Harbor must actually complete
the registration of the Mark by using the Mark in commerce and fil-
ing a statement of use with the USPTO within the prescribed time
frame. Creative Harbor acknowledges that it has not yet used the
Mark. Accordingly, while Creative Harbor may establish its priority
at some point in the future, it is not now entitled to the declaration
that it seeks here.
C. Creative Harbor’s Additional Counterclaims Fail as a Ma er of Law
As noted above, Creative Harbor asserts Additional Counterclaims
against Kelly for unfair competition, trademark dilution, and inten-
tional interference with prospective business. Each of the Additional
Counterclaims is based on Creative Harbor’s assertion that Kelly in-
fringed on Creative Harbor’s alleged priority rights to the Mark. Cre-
ative Harbor says that it established those rights by filing the Creative
ITUs. But an intent-to-use application does not, by itself, confer any
rights enforceable against others.
Kelly Services, Inc. v. Creative Harbor, LLC [II]
140 F. Supp. 3d 611 (W.D. Mich. 2015)
The evidence makes clear that Creative Harbor had a “firm” intent to
use the Mark in connection with an iPhone application that connected
job seekers with employers. But evidence that Creative Harbor in-
tended to use the Mark with respect to some of the goods and services
listed in the Creative ITUs does not contradict Kelly’s evidence that
Creative Harbor lacked a firm intent to use the Mark on several of
the other services and goods listed in the ITUs. Kelly has identified
sworn deposition testimony by Creative Harbor’s CEO Christian Ju-
rgensen indicating that (1) in many respects, Creative Harbor merely
intended to reserve a right in the Mark and (2) Creative Harbor lacked
a firm intent to use the Mark with respect to several of the goods and
services listed in the Creative ITUs. Kelly directs the Court to the
following representative portions of Mr. Jurgensen’s testimony:
• Mr. Jurgensen conceded that at the time his a orney drafted
the Creative ITUs he (Jurgensen) “had clear ideas for some of
them, and some of them were meant for future exploration.”
456 CHAPTER 6. TRADEMARK
• In the Goods ITU, Creative Harbor stated that it intended to use
the Mark with “computer game software,” but Mr. Jurgensen
testified that Creative Harbor did “not” intend to use the Mark
“with a game.”
• In the Services ITU, Creative Harbor said that it intended to use
the Mark in connection with “business consulting” services, but
Mr. Jurgensen conceded that he “wanted to make sure [that]
was there included” because the company “could” perhaps per-
form those services “at some point” in the future.
Critically, Creative Harbor has not identified any objective evidence
that it had a bona fide intent to use the Mark in connection with many
of services and goods listed on the Creative ITUs, such as employee
relations information services, business consulting services, profes-
sional credentialing verification services, computer game software,
and/or computer hardware for integrating text and audio.
Absent fraud, an ITU applicant may cure an overbroad listing
of goods and/or services by deleting from its application the goods
and/or services on which it lacks a bona fide intent to use the mark.
Spirits Int'l: 99 U.S.P.Q.2d 1545 (T.T.A.B. In Spirits Int’l, B.V. v. S.S. Taris Zeytin Ve Zeytinyagi Tarim Satis Kooper-
2011) atifleri Birligi, the TTAB did not suggest that a tribunal may properly
Where does this leave the parties in the delete items that an applicant has not, itself, undertaken to delete. In-
courts? And in the Apple App Store? stead, the TTAB said that because the applicant had failed to make
the required deletions, the appropriate remedy was to void the en-
tire classes containing the goods for which the required intent was
lacking. Application of the Spirits Int’l framework leads the Court to
invalidate the Creative ITUs in their entirety.
Bilgewater Bill’s Problem, Re-Redux
Consider the following sequence of events. Who has priority in Bal-
timore? Who has priority in Sea le? Who has priority in Chicago?
• B files a § 1(b) intent-to-use application for BILGEWATER
BILL’S.
• A uses BILGEWATER BILL’S in Baltimore
• B uses BILGEWATER BILL’S in Sea le.
• B files a § 1(d) statement of use.
3 Collaborations
Boogie Kings v. Guillory
188 So.2d 445 (La. Ct. App. 1966)
In this action, plaintiff seeks to enjoin the defendant, Clinton Guillory,
who is also known and sometimes referred to herein as “Clint West,”
from using the trade name “The Boogie Kings.” The suit was insti-
tuted by “The Boogie Kings,” an unincorporated association doing
B. OWNERSHIP 457
business under that trade name, represented herein by three of the
officers or representatives of that association. The defendant filed an
answer and a reconventional demand, in which he alleges that he has
the exclusive right to use that trade name, and he prays for judgment
enjoining plaintiff from using it.
The evidence shows that in 1955 Douglas Ardoin and Harris
Miller formed a dance band or orchestra, and they mutually agreed
to call themselves “The Boogie Kings.” Other musicians joined the
band thereafter, and in 1964 it was composed of ten members. The
band was never incorporated and no formal partnership agreement,
oral or wri en, was ever entered into. The band functioned as an
organization with a definite membership, however, and as an orga-
nized band it acquired movable property and entered into contracts
for playing engagements and other ma ers. The evidence shows that
since the initial creation of the orchestra, the members from time to
time have elected one of their number to serve as “leader.” Although
there is some conflict in the testimony, we think the evidence estab-
lishes that all major decisions affecting the organization, the assets
and the operations of the band have been made by a majority vote of
the members.
Ardoin was elected and served as the first leader of the band, and
he was succeeded by Miller. Later, Ardoin was reelected to be the
leader, and he served as such until he withdrew completely from the
band in 1963. Thereafter, he discontinued his career as a musician.
Miller succeeded Ardoin as leader in 1963, and he served as such un-
til May, 1964, when a dispute arose between Miller and most of the
other members relative to a playing engagement. As the result of that
dispute, Miller withdrew as a member of the band.
Defendant, Guillory, joined the band as a drummer and vocalist
in 1963. Immediately after Miller withdrew in May, 1964, Guillory Clinton "Clint West" Guillory
was elected by the other members as leader. As the featured vocalist
in the band, he was known professionally as “Clint West.” In order
to capitalize on his popularity as a singer, the name of the band was
changed to “Clint West and the Boogie Kings,” this change of name
being made after defendant became the leader and with the approval
of a majority of the members.
During the la er part of the year 1964, or the first part of 1965,
this band was playing regularly at the Bamboo Club in Lake Charles
and occasionally at other places. Guillory acquired an interest in the
Moulin Rouge Club at that time, however, and he prevailed upon the
other members to discontinue playing at the Bamboo Club and to be-
gin playing regularly at the Moulin Rouge instead. A relatively short
time after making this change, all of the members except Guillory be-
came dissatisfied with the arrangement, and nine of the ten members
voted to go back to playing at the Bamboo Club. Guillory was the The Boogie Kings, circa 1965
458 CHAPTER 6. TRADEMARK
only member who refused to join them in this decision, and he there-
upon separated or disassociated himself from the other members.
Immediately after this split in the band occurred, the nine original
members elected a new leader, a new member came into the band to
take Guillory’s place, and the orchestra resumed playing regularly
at the Bamboo Club, and other places, under the name of “The Boo-
gie Kings.” Also, immediately after the split, Guillory joined with
nine other musicians to form a new orchestra, and this new group re-
sumed playing at the Moulin Rouge Club, and other places, and they
called themselves “Clint West and The Boogie Kings.”
Defendant contends that the band, as an organization or associa-
tion, never acquired a proprietary interest in this trade name, that the
right to use that name was vested originally in Ardoin and Miller, that
Miller acquired the exclusive right to use it when Ardoin abandoned
any claim to it, and that shortly prior to the “split” Miller specifically
gave to defendant Guillory the exclusive right to use the name, “The
Boogie Kings.”
In the instant suit, the evidence shows that during the period from
1955 to 1964 the band known by the trade name of “The Boogie Kings”
acquired a considerable amount of popularity. Because of its reputa-
tion as a musical organization or dance band, its trade name has ac-
quired some significance and value. The person or organization first
appropriating the name or having the legal right to use it, therefore,
has a proprietary interest in that name and is entitled to judgment
enjoining another from appropriating it.
In our opinion, this band, when first organized in 1955, became an
unincorporated association, and it has continued to be such an orga-
nization since that time. The evidence convinces us, as it apparently
did the trial judge, that the original trade name, “The Boogie Kings,”
was adopted by mutual agreement of the members of the band, that
a proprietary interest in that name became vested in the band, as an
unincorporated association, and that it did not become vested in any
individual member of that band. Miller, therefore, had no right or
authority to “give” or to transfer to defendant Guillory the exclusive
right to use that name.
Dissatisfied members of an association cannot deprive it of the
right to use its own name by incorporating themselves thereunder,
and enjoining it from using the same. We conclude that Guillory ac-
quired no right to use the trade name of the band, either from Miller
or from the circumstance that he had been elected as leader of the
band. The trial judge, therefore, correctly enjoined defendant from
continuing to use that name.
§ 1201.03 Trademark Manual of Examining Procedure
Use by Related Companies
C. PROCEDURES 459
Section 5 of the Trademark Act, 15 U.S.C. § 1055, states, in part, as
follows:
Where a registered mark or a mark sought to be registered
is or may be used legitimately by related companies, such
use shall inure to the benefit of the registrant or applicant
for registration, and such use shall not affect the validity
of such mark or of its registration, provided such mark is
not used in such manner as to deceive the public.
Section 45 of the Act, 15 U.S.C. § 1127, defines “related company” as
follows:
The term “related company” means any person whose use
of a mark is controlled by the owner of the mark with re-
spect to the nature and quality of the goods or services on
or in connection with which the mark is used.
Thus, § 5 of the Act permits applicants to rely on use of the mark by
related companies. Either a natural person or a juristic person may
be a related company. 15 U.S.C. § 1127.
The essence of related-company use is the control exercised over
the nature and quality of the goods or services on or in connection
with which the mark is used. When a mark is used by a related com-
pany, use of the mark inures to the benefit of the party who controls
the nature and quality of the goods or services. This party is the
owner of the mark and, therefore, the only party who may apply to
register the mark.
Duff Problem
Duff beer is, or was, a fictional beer on the animated cartoon sitcom
The Simpsons. Varieties mentioned on the show include Duff, Duff
Dry, Duff Light, Duff Adequate, Raspberry Duff, Lady Duff, and Tar-
tar Control Duff. Recently, the Fudd Corporation has started selling
beer under the DUFF name. Fudd is unaffiliated with Twentieth Cen-
tury Fox (which produces The Simpsons) and has not obtained per-
mission to sell DUFF beer. Trademark infringement? What if Fox
sold a line of Simpsons-themed beers including Duff? What if Fox
gave away “Duff beer” (actually ginger ale) to fans at conventions?
C Procedures
Duff beer "can"
1 Registration
15 U.S.C. § 1052
Lanham Act Lanham Act § 2
Trademarks registrable on principal
register
460 CHAPTER 6. TRADEMARK
No trademark … shall be refused registration on the principal register
on account of its nature unless it –
(e) Consists of a mark which (1) when used on or in connection
with the goods of the applicant is merely descriptive … of them,
(f) Except as expressly excluded in subsections (a), (b), (c), (d),
(e)(3), and (e)(5) of this section, nothing in this chapter shall pre-
vent the registration of a mark used by the applicant which has
become distinctive of the applicant’s goods in commerce.
Note that §§ 2(e)(1) and (f) of the Lanham Act restate the common-law
doctrine of descriptive and generic trademarks. “Merely” descriptive
marks are not protectable, but marks that have “become distinctive”
(i.e. acquired secondary meaning) are. A generic mark is considered
incapable of acquiring secondary meaning as a ma er of law.
Lanham Act
No trademark shall be refused registration on the principal register
15 U.S.C. § 1052
on account of its nature unless it—
Lanham Act § 2
Trademarks registrable on principal (a) Consists of or comprises immoral … or scandalous ma er; or
register ma er which may disparage or falsely suggest a connection
with persons, living or dead, institutions, beliefs, or national
symbols, or bring them into contempt, or disrepute; …
In re Tam
808 F.3d 1321 (Fed. Cir. 2015) (en
Section 2(a) of the Lanham Act bars the Patent and Trademark Office
banc)
(”PTO”) from registering scandalous, immoral, or disparaging marks.
The government enacted this law – and defends it today – because it
disapproves of the messages conveyed by disparaging marks. It is a
bedrock principle underlying the First Amendment that the govern-
ment may not penalize private speech merely because it disapproves
of the message it conveys. That principle governs even when the gov-
ernment’s message-discriminatory penalty is less than a prohibition.
Courts have been slow to appreciate the expressive power of
trademarks. Words—even a single word—can be powerful. Mr.
Simon Shiao Tam named his band THE SLANTS to make a state-
ment about racial and cultural issues in this country. With his band
name, Mr. Tam conveys more about our society than many volumes
of undisputedly protected speech. Another rejected mark, STOP
THE SLANTS logo THE ISLAMISATION OF AMERICA, proclaims that Islamisation is
C. PROCEDURES 461
undesirable and should be stopped. Many of the marks rejected
as disparaging convey hurtful speech that harms members of oft-
stigmatized communities. But the First Amendment protects even
hurtful speech.
The government cannot refuse to register disparaging marks be-
cause it disapproves of the expressive messages conveyed by the
marks. It cannot refuse to register marks because it concludes that
such marks will be disparaging to others. The government regula-
tion at issue amounts to viewpoint discrimination, and under the
strict scrutiny review appropriate for government regulation of mes-
sage or viewpoint, we conclude that the disparagement proscription
of § 2(a) is unconstitutional. Because the government has offered no
legitimate interests justifying § 2(a), we conclude that it would also
be unconstitutional under the intermediate scrutiny traditionally ap-
plied to regulation of the commercial aspects of speech. We there-
fore vacate the Trademark Trial and Appeal Board’s holding that Mr.
Tam’s mark is unregistrable, and remand this case to the Board for
further proceedings. WASHINGTON REDSKINS logo. Distin-
guishable?
In re Boulevard Entertainment, Inc.
334 F.3d 1336 (Fed. Cir. 2003)
The Boulevard Entertainment, Inc. seeks to register “1-800-JACK-
OFF” and “JACK-OFF” as marks on the Principal Register for “enter-
tainment in the nature of adult-oriented conversations by telephone.” Does the exclusion for immoral or scan-
The TTAB affirmed the refusal to register on the ground that the dalous marks survive Tam?
marks consist of or comprise scandalous ma er. Because substantial
evidence supports the TTAB’s finding that the term “jack-off” is an
offensive and vulgar reference to masturbation and that Boulevard’s
use of the marks refers to that meaning, we affirm.
Trademark Manual of Examining Procedure
Section 45 of the Trademark Act, 15 U.S.C. §1127, defines “collective § 1302
mark” as follows: 1302 Collective Marks Generally
The term “collective mark” means a trademark or service mark–
(1) used by the members of a cooperative, an association, or
other collective group or organization, or
(2) which such cooperative, association, or other collective
group or organization has a bona fide intention to use in
commerce and applies to register on the principal regis-
ter established by this [Act], and includes marks indicating
membership in a union, an association, or other organiza-
tion.
Under the Trademark Act, a collective mark is owned by a collective
entity even though the mark is used by the members of the collective.
462 CHAPTER 6. TRADEMARK
There are basically two types of collective marks: (1) collective
trademarks or collective service marks; and (2) collective member-
ship marks. The distinction between these types of collective marks
Aloe Creme: 192 USPQ 170 (TTAB 1976) is explained in Aloe Creme Labs., Inc. v. Am. Soc’y for Aesthetic Plastic
Surgery, Inc. as follows:
A collective trademark or collective service mark is a mark
adopted by a “collective” (i.e., an association, union, co-
operative, fraternal organization, or other organized col-
lective group) for use only by its members, who in turn
use the mark to identify their goods or services and distin-
guish them from those of nonmembers. The “collective”
itself neither sells goods nor performs services under a col-
lective trademark or collective service mark, but the col-
lective may advertise or otherwise promote the goods or
services sold or rendered by its members under the mark.
A collective membership mark is a mark adopted for the
purpose of indicating membership in an organized collec-
tive group, such as a union, an association, or other orga-
nization. Neither the collective nor its members uses the
REALTOR collective service mark.
collective membership mark to identify and distinguish
goods or services; rather, the sole function of such a mark
is to indicate that the person displaying the mark is a mem-
ber of the organized collective group.
Trademark Manual of Examining Procedure
In an application for registration of a mark, the applicant should des-
ignate the international class number(s) that are appropriate for the
identified goods and/or services whenever the information is known.
Sheet Metal Workers International As- International trademark classification, and the headings of the inter-
sociation collective membership mark. national trademark classes, are established by the Commi ee of Ex-
perts of the Nice Union and set forth in the International Classifica-
tion of Goods and Services for the Purposes of the Registration of
§ 1401.03
Marks (Nice Classification) published annually by the World Intel-
Designation of Class
lectual Property Organization (“WIPO”) on its website.
§ 1401.02(a) A wri en application must specify the particular goods and/or ser-
Headings of International Trademark vices on or in connection with which the applicant uses, or has a bona
Classes fide intention to use, the mark in commerce. To “specify” means to
name in an explicit manner. The identification should set forth com-
§ 1402.01
mon names, using terminology that is generally understood.
Specifying the Goods and/or Services - The applicant must identify the goods and services specifically to
in General provide public notice and to enable the USPTO to classify the goods
C. PROCEDURES 463
and services properly and to reach informed judgments concerning
likelihood of confusion. The USPTO has discretion to require the de-
gree of particularity deemed necessary to clearly identify the goods
and/or services covered by the mark.
Terminology that includes items in more than one class is consid-
ered indefinite.
Example: “Blankets” is not acceptable without qualifying word-
ing because it is not particular enough to identify the kind of blanket
on which the mark is used, e.g., fire blankets (Class 9), electric blan-
kets (Class 11), horse blankets (Class 18), and bed blankets (Class 24).
The accuracy of identification language in the original application
is important because the identification cannot later be expanded.
Specimens are required because they show the manner in which the § 904
mark is seen by the public. Specimens also provide supporting evi- Specimens
dence of facts recited in the application.
A trademark or service mark application for registration under
§ 1(a) of the Trademark Act must include one specimen for each class,
showing use of the mark in commerce on or in connection with the
goods, or in the sale or advertising of the services.
For a trademark application under § 1(a), allegation of use in an appli- § 904.03
cation under § 1(b), or affidavit of use under § 8 or § 71 of the Trade- Material Appropriate as Specimens for
mark Act, the specimen must show the mark as used on or in connec- Trademarks
tion with the goods in commerce. A trademark specimen should be
a label, tag, or container for the goods, or a display associated with
the goods. A photocopy or other reproduction of a specimen of the
mark as used on or in connection with the goods is acceptable.
Trademark Manual of Examining Procedure
The owner of a mark registered in the United States Patent and Trade- § TMEP 906
mark Office may give notice that the mark is registered by display- Federal Registration Notice
ing with the mark the words “Registered in United States Patent and
Trademark Office,” the abbreviation “Reg. U.S. Pat. & Tm. Off.,” or
the le er R enclosed within a circle, ®. A party may use terms such as
“trademark,” “trademark applied for,” “TM” and “SM” regardless of
whether a mark is registered. These are not official or statutory sym-
bols of federal registration.
2 Opposition
35 U.S.C. § 1057
Lanham Act Lanham Act § 2
Trademarks registrable on principal
register; concurrent registration
464 CHAPTER 6. TRADEMARK
No trademark by which the goods of the applicant may be distin-
guished from the goods of others shall be refused registration on the
principal register on account of its nature unless it –
(d) Consists of or comprises a mark which so resembles a mark reg-
istered in the Patent and Trademark Office, or a mark or trade
name previously used in the United States by another and not
abandoned, as to be likely, when used on or in connection with
the goods of the applicant, to cause confusion, or to cause mis-
take, or to deceive:
Provided, That if the Director determines that confusion,
mistake, or deception is not likely to result from the continued
use by more than one person of the same or similar marks un-
der conditions and limitations as to the mode or place of use
of the marks or the goods on or in connection with which such
marks are used, concurrent registrations may be issued to such
persons when they have become entitled to use such marks as
a result of their concurrent lawful use in commerce prior to (1)
the earliest of the filing dates of the applications pending or of
any registration issued under this chapter. Use prior to the fil-
ing date of any pending application or a registration shall not
be required when the owner of such application or registration
consents to the grant of a concurrent registration to the appli-
cant.
15 U.S.C § 1062
(a) Examination and publication. – Upon the filing of an application
Lanham Act § 12 for registration and payment of the prescribed fee, the Director
Publication shall refer the application to the examiner in charge of the reg-
istration of marks, who shall cause an examination to be made
and, if on such examination it shall appear that the applicant is
entitled to registration the Director shall cause the mark to be
published in the Official Gaze e of the Patent and Trademark
Office.
15 U.S.C. § 1063
(a) Any person who believes that he would be damaged by the reg-
Lanham Act § 13 istration of a mark upon the principal register may, upon pay-
Opposition to registration ment of the prescribed fee, file an opposition in the Patent and
Trademark Office, stating the grounds therefor, within thirty
days after the publication of the mark sought to be registered.
B&B Hardware, Inc. v. Hargis Industries, Inc.
135 S.Ct. 1293 (2015)
This case concerns the application of issue preclusion in the context of
trademark law. Petitioner, B&B Hardware, Inc. (B&B), and respon-
dent Hargis Industries, Inc. (Hargis), both use similar trademarks;
B&B owns SEALTIGHT while Hargis owns SEALTITE. Under the
C. PROCEDURES 465
Lanham Act, an applicant can seek to register a trademark through
an administrative process within the United States Patent and Trade-
mark Office (PTO). But if another party believes that the PTO should
not register a mark because it is too similar to its own, that party can
oppose registration before the Trademark Trial and Appeal Board
(TTAB).
The TTAB consists of administrative trademark judges and high-
ranking PTO officials, including the Director of the PTO and the Com-
missioner of Trademarks. Opposition proceedings before the TTAB
are in many ways similar to a civil action in a federal district court.
These proceedings, for instance, are largely governed by the Federal
Rules of Civil Procedure and Evidence. The TTAB also allows dis-
covery and depositions. The party opposing registration bears the
burden of proof, and if that burden cannot be met, the opposed mark
must be registered.
The primary way in which TTAB proceedings differ from ordinary
civil litigation is that proceedings before the Board are conducted in
writing, and the Board’s actions in a particular case are based upon
the wri en record therein. In other words, there is no live testimony.
Even so, the TTAB allows parties to submit transcribed testimony,
taken under oath and subject to cross-examination, and to request
oral argument.
Here, Hargis tried to register the mark SEALTITE, but B&B op-
posed SEALTITE’s registration. After a lengthy proceeding, the
TTAB agreed with B&B that SEALTITE should not be registered.
In addition to permi ing a party to object to the registration of a
mark, the Lanham Act allows a mark owner to sue for trademark
infringement. Both a registration proceeding and a suit for trade-
mark infringement, moreover, can occur at the same time. In this
case, while the TTAB was deciding whether SEALTITE should be reg-
istered, B&B and Hargis were also litigating the SEALTIGHT versus
SEALTITE dispute in federal court. In both registration proceedings
and infringement litigation, the tribunal asks whether a likelihood
of confusion exists between the mark sought to be protected (here,
SEALTIGHT) and the other mark (SEALTITE).
The question before this Court is whether the District Court in this
case should have applied issue preclusion to the TTAB’s decision that
SEALTITE is confusingly similar to SEALTIGHT. Here, the Eighth
Circuit rejected issue preclusion for reasons that would make it diffi-
cult for the doctrine ever to apply in trademark disputes. We disagree
with that narrow understanding of issue preclusion. Instead, consis-
tent with principles of law that apply in innumerable contexts, we
hold that a court should give preclusive effect to TTAB decisions if
466 CHAPTER 6. TRADEMARK
the ordinary elements of issue preclusion are met.
Justice GINSBURG, concurring.
The Court rightly recognizes that “for a great many registration
decisions issue preclusion obviously will not apply.” That is so be-
cause contested registrations are often decided upon a comparison
of the marks in the abstract and apart from their marketplace usage.
When the registration proceeding is of that character, there will be no
preclusion of the likelihood of confusion issue in a later infringement
suit. On that understanding, I join the Court’s opinion.
B&B Hardware, Inc. v. Hargis Industries, Inc.
800 F.3d 427 (8th Cir. 2015)
This ma er is on remand from the United States Supreme Court.
We directed the parties to submit supplemental briefing. Having re-
viewed the briefing, we now determine that the ordinary elements of
issue preclusion have been met and the usages of the marks adjudi-
cated before the TTAB were materially the same as the usages before
the district court. As noted in our prior opinions, the TTAB compared
the marks in question in the marketplace context when it determined
the likelihood of confusion issue for purposes of trademark registra-
tion.
3 Maintenance
Lanham Act
15 U.S. Code § 1058
(a) Time periods for required affidavits. – Each registration shall re-
Lanham Act § 8 main in force for 10 years, except that the registration of any
Duration, affidavits and fees mark shall be canceled by the Director unless the owner of the
registration files in the United States Patent and Trademark
Office affidavits that meet the requirements of subsection (b),
within the following time periods:
(1) Within the 1-year period immediately preceding the expi-
ration of 6 years following the date of registration under
this chapter or the date of the publication under section
1062(c) of this title.
(2) Within the 1-year period immediately preceding the expi-
ration of 10 years following the date of registration, and
each successive 10-year period following the date of regis-
tration.
(b) Requirements for affidavit. – The affidavit referred to in subsec-
tion (a) shall—
(1) (A) state that the mark is in use in commerce;
C. PROCEDURES 467
(B) set forth the goods and services recited in the registra-
tion on or in connection with which the mark is in use
in commerce;
(C) be accompanied by such number of specimens or fac-
similes showing current use of the mark in commerce
as may be required by the Director; and
(D) be accompanied by the fee prescribed by the Director;
(a) Period of renewal; time for renewal. – Subject to the provisions 15 U.S.C. § 1059
of section 1058 of this title, each registration may be renewed Lanham Act § 9
for periods of 10 years at the end of each successive 10-year pe- Renewal of registration
riod following the date of registration upon payment of the pre- Trick question: what is the maximum
scribed fee and the filing of a wri en application, in such form possible term a trademark could be in
as may be prescribed by the Director. effect?
4 Cancellation and Incontestability
Lanham Act
A petition to cancel a registration of a mark, stating the grounds relied 15 U.S. Code § 1064
upon, may, upon payment of the prescribed fee, be filed as follows Lanham Act § 14
by any person who believes that he is or will be damaged by the regis- Cancellation of registration
tration of a mark on the principal register established by this chapter
…
(1) Within five years from the date of the registration of the mark
under this chapter.
(3) At any time if the registered mark becomes the generic name
for the goods or services, or a portion thereof, for which it is
registered, or is functional, or has been abandoned, or its regis-
tration was obtained fraudulently or contrary to the provisions
of section 1054 of this title or of subsection (a), (b), or (c) of sec-
tion 1052 of this title for a registration under this chapter … or
with the permission of, the registrant so as to misrepresent the
source of the goods or services on or in connection with which
the mark is used. … A registered mark shall not be deemed
to be the generic name of goods or services solely because such
mark is also used as a name of or to identify a unique product or
service. The primary significance of the registered mark to the
relevant public rather than purchaser motivation shall be the
test for determining whether the registered mark has become
the generic name of goods or services on or in connection with 15 U.SC. § 1065
which it has been used. Lanham Act § 15
Incontestability of right to use mark un-
der certain conditions
468 CHAPTER 6. TRADEMARK
Except on a ground for which application to cancel may be filed at
§ 1064(5) pertains to certification any time under paragraphs (3) and (5) of section 1064 of this title
marks. See the False Advertising … the right of the owner to use such registered mark in commerce
chapter.
for the goods or services on or in connection with which such reg-
istered mark has been in continuous use for five consecutive years
subsequent to the date of such registration and is still in use in com-
merce, shall be incontestable: …
Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc.
469 U.S. 189 (1985)
Petitioner operates long-term parking lots near airports. After start-
ing business in St. Louis in 1967, petitioner subsequently opened fa-
cilities in Cleveland, Houston, Boston, Memphis, and San Francisco.
Petitioner applied in 1969 to the United States Patent and Trademark
Office (Patent Office) to register a service mark consisting of the logo
of an airplane and the words “Park’N Fly.” The registration issued in
August 1971. Nearly six years later, petitioner filed an affidavit with
the Patent Office to establish the incontestable status of the mark. As
required by § 15 of the Trademark Act of 1946 (Lanham Act), the affi-
davit stated that the mark had been registered and in continuous use
for five consecutive years, that there had been no final adverse deci-
sion to petitioner’s claim of ownership or right to registration, and
that no proceedings involving such rights were pending.
Respondent also provides long-term airport parking services, but
only has operations in Portland, Oregon. Respondent calls its busi-
ness “Dollar Park and Fly.” Petitioner filed this infringement action
Park 'N Fly service mark
in 1978 in the United States District Court for the District of Oregon
and requested the court permanently to enjoin respondent from us-
ing the words “Park and Fly” in connection with its business.
After a bench trial, the District Court found that petitioner’s mark
is not generic and observed that an incontestable mark cannot be chal-
lenged on the grounds that it is merely descriptive.
An incontestable mark that becomes generic may be canceled at
any time pursuant to § 14(c). That section also allows cancellation
of an incontestable mark at any time if it has been abandoned, if it
is being used to misrepresent the source of the goods or services in
connection with which it is used, or if it was obtained fraudulently
or contrary to the provisions of § 4, 15 U.S.C. § 1054, or §§ 2(a)-(c), 15
U.S.C. §§ 1052(a)-(c).
The language of the Lanham Act also refutes any conclusion that
an incontestable mark may be challenged as merely descriptive. The
Lanham Act expressly provides that before a mark becomes incon-
testable an opposing party may prove any legal or equitable de-
fense which might have been asserted if the mark had not been reg-
istered. Thus, § 33(a) would have allowed respondent to challenge
petitioner’s mark as merely descriptive if the mark had not become
C. PROCEDURES 469
incontestable. With respect to incontestable marks, however, § 33(b)
provides that registration is conclusive evidence of the registrant’s
exclusive right to use the mark, subject to the conditions of § 15 and
the seven defenses enumerated in § 33(b) itself. Mere descriptiveness
is not recognized as a basis for challenging an incontestable mark.
JUSTICE STEVENS, dissenting.
Congress enacted the Lanham Act “to secure trade-mark owners
in the goodwill which they have built up.” But without a showing of
secondary meaning, there is no basis upon which to conclude that pe-
titioner has built up any goodwill that is secured by the mark “Park’N
Fly.” In fact, without a showing of secondary meaning, we should
presume that petitioner’s business appears to the consuming public
to be just another anonymous, indistinguishable parking lot.
It is perfectly clear that the failure to include mere descriptiveness
among the grounds for challenging incontestability was based on the
understanding that such a mark would not be registered without a
showing of secondary meaning.
Because it would be demonstrably at odds with the intent of
Congress to grant incontestable status to a mark that was not eligi-
ble for registration in the first place, the Court is surely authorized to
require compliance with § 2(f) before granting relief on the basis of §
33(b).
5 Abandonment
Lanham Act
A mark shall be deemed to be “abandoned” if either of the following 15 U.S.C. § 1127
occurs: Lanham Act § 45
(1) When its use has been discontinued with intent not to resume Construction and definitions …
such use. Intent not to resume may be inferred from circum-
stances. Nonuse for 3 consecutive years shall be prima facie ev-
idence of abandonment. “Use” of a mark means the bona fide
use of such mark made in the ordinary course of trade, and not
made merely to reserve a right in a mark.
Procter & Gamble Co. v. Johnson & Johnson Inc. 485 F.Supp. 1185 (S.D.N.Y. 1979)
This is an action for trademark infringement, false designation of ori- (Leval, J.)
gin, unfair competition and trademark dilution. The plaintiff, Proc-
ter & Gamble Co. (“P&G”), an Ohio corporation, is one of the coun-
try’s largest manufacturers of household and personal use products.
The defendants are Johnson & Johnson Incorporated (“J&J”) and its
wholly-owned subsidiary Personal Products Company (“PPC”). PPC
470 CHAPTER 6. TRADEMARK
is the leading manufacturer of women’s external menstrual protec-
tion products.
The defendants’ trademarks which are alleged to infringe rights of
the plaintiff are “Assure!” as used on a woman’s menstrual tampon,
and “Sure & Natural”, as used on an external menstrual protection
shield. The plaintiff’s marks alleged to be infringed are SURE for an
underarm anti-perspirant deodorant and for a woman’s tampon, and
ASSURE for a mouthwash and a shampoo.
SURE for tampons, since 1964, and ASSURE for mouthwash and
shampoo, since 1970, have been carried by P&G in its “minor brands
program”. The minor brands program is designed by P&G to estab-
lish and maintain ownership rights over trademarks which have not
been assigned by P&G to any commercially marketed product.
In 1974 P&G’s office of legal counsel circulated a memorandum
institutionalizing the procedures to be followed for this brand main-
tenance program. The memorandum was revised in 1976 and was
received in evidence at the trial. The memorandum begins by stat-
ing that the failure to use a trademark for two consecutive years may
result in its loss. “The Minor Brands Sales Program is intended”, it
states, “to rebut any such inference of abandonment and thus main-
tain the company’s ability to subsequently use the marks on goods in
question as major brands.” The memorandum directs that the trade-
mark section of the legal division will annually prepare a list of ev-
ery mark owned by the company. The list will be divided into three
categories, to be designated as Major Brand, Minor Brand and No
Value. A major brand is one which is currently marketed on a day
to day basis. “A ‘No Value’ mark is one in which there is no current
commercial interest . . . All others automatically fall into the Minor
Brand category.” The memorandum goes on to state that each year
the list will be reviewed with each division. “A diligent assessment
will be made each year to place any marks which are in the Minor
Brand category but which are unlikely to be selected for Major Brand
usage within a reasonable period of time into the No Value category
so as to keep Minor Brands to a minimum.” The memorandum fur-
ther instructs that when the list of minor brands has been reviewed
each year, the trademark coordinator will pack 50 units of each prod-
uct in the Minor Brand category and ship the 50 units to at least 10
states with a recommendation of alternation of states in succeeding
years so as to achieve wide distribution. The shipments are made to
normal customers for each type of product.
The evidence showed that the system functioned as follows. The
distribution of goods in the Minor Brands Program is not handled by
persons normally involved in P&G’s merchandising operation. In-
deed few employees at any level of P&G are even aware of the minor
brands’ existence. In each division of the company, one employee is
C. PROCEDURES 471
charged with the distribution of minor brands. This “Minor Brands
Coordinator” causes labels to be made and simple packages to be pre-
pared for each minor brand. He then ships in accordance with the
standing wri en instructions from trademark counsel. For all items
in the Minor Brands Program regardless of size, cost or any other fea-
ture, the price billed is $2 per case.
As there are no products of P&G covered by these minor brands,
the coordinator takes some other P&G product in the brand category
to be shipped under the minor brand’s label. P&G’s Prell Shampoo is
bo led under 13 different minor brand labels for annual shipment at
$2 a case. P&G’s Scope Mouthwash is bo led under 7 different minor
brand labels for annual shipment. The situation as to tampons is par-
ticularly curious. Prior to 1974 when Rely was introduced, P&G had
no such product. Accordingly, it was the practice to buy the tampons
of other manufacturers and to repackage them under P&G’s various
minor brand tampon labels. PPC learned through documents pro-
duced at the trial that in the 1960’s, its own Modess tampons had
been purchased by P&G and repackaged and shipped under a “Sure”
Tampon label. In recent years for its minor brand tampons, P&G has
been purchasing and shipping Tampax. Although since 1974 P&G
has had a tampon product of its own, the Minor Brands Coordina-
tor for the paper goods division has continued to ship Tampax rather
than P&G’s own product, apparently through oversight.
None of P&G’s catalogues, price lists or other published materials
make any reference to the minor brands. Indeed it appears that virtu-
ally none of P& G’s personnel is aware of their existence. No steps are
taken to see whether these goods are actually sold by the recipients
of the shipments. The only evidence received in the trial concerning
any such resale was to the effect that once in 1977 the president of
PPC had seen some P&G minor brands including Sure Tampons on
the shelves of a store in Milwaukee and had bought a box.
P&G defends the validity of the Minor Brands Program on the
grounds that it is commercially necessary. It argues that the devel-
opment of new brands is an enormously lengthy process; numer-
ous products are under development at any one time; and it is very
hard to tell how soon a product under development will be ready for
market. The process of name selection and registration is also time-
consuming. If a product should become ready for market without
prior provision having been made for a name, the product could be
held up for quite some time while the name was being secured.
P&G has claimed rights to the Sure Tampon brand since 1964. Tak-
ing the facts in the light most favorable to P&G, the Sure Tampon
brand has resided in the Minor Brands Program for nearly 12 years,
with approximately 50 cases being shipped once a year. While there
may well be persons at P&G who would like to use the Sure name on
472 CHAPTER 6. TRADEMARK
a tampon to be marketed in the future, I find it most unlikely that the
Sure name will be assigned to a tampon while P&G’s uses that name
on an anti-perspirant.
P&G has owned the ASSURE mark for shampoo and mouthwash
since 1970. The shampoo mark has been maintained as a minor brand
since 1970 bringing in total revenues of $491.30. The mouthwash
brand has been in the program for only three years bringing in to-
tal revenues of $161.50; apparently for the first six years the ASSURE
mouth wash brand was not utilized at all. P&G has introduced a
new mouthwash and a shampoo into test markets without selecting
the name ASSURE.
Usage which is sporadic, nominal and intended solely for trade-
mark maintenance is insufficient to establish and maintain trademark
rights. Upon detailed review of all the pertinent facts, I have con-
cluded that P&G does not own a protectable interest in the marks in
question. I find that P&G has never put (these brands) on the market
in any meaningful way; indeed, it has given no indication (which I
would regard as convincing) that it has any current plans to do so.
Trademark rights are not created by sporadic, casual, and nominal
shipments of goods bearing a mark. There must a trade in the goods
sold under the mark or at least an active and public a empt to estab-
lish such a trade.
While P&G’s annual shipment of 50 cases for periods of nine to
twelve years may not be sporadic or casual, it is certainly nominal
and does not represent a bona fide a empt to establish a trade in any
meaningful way. A trademark maintenance program obviously can-
not in itself justify a minimal sales effort, or the requirement of good
faith commercial use would be read out of trademark law altogether.
I recognize that P&G’s minor brands program might well be
legally effective in other circumstances, as where a brand is reserved
in connection with reasonably well-formulated plans to use it on
a particular product under development, especially if the artificial
maintenance does not continue for an unreasonably long time. But
there must be a present intent to market the trademarked product.
P&G’s vague, remote and almost abstract intentions for the SURE
and ASSURE marks are not satisfactory. P&G’s personnel testified,
for example, as to each of its 13 minor shampoo brands (including
ASSURE), that it held a present intention to utilize them on a com-
mercially marketed product. At present, P&G offers only 3 shampoos
on the commercial market. While there are several shampoos under
development, I find no firm intention to use ASSURE on any of these.
Intentions which are so vague and remote and so unlikely to come to
fruition within a reasonable near future are not sufficient to meet the
test.
I conclude that P&G owns no enforceable rights in SURE tampon
D. INFRINGEMENT: CONFUSION 473
brand or in the ASSURE mark and that its action on behalf of those
interests must fail. P&G has failed to show that it established trade-
mark rights through bona fide commercial use.
Trademark Throwback Problem
Based on Major League Baseball v. Sed
In 1984, to great local anger, the Baltimore Colts of the National Foot- Non Olet Denarius, 817 F. Supp. 1103
ball League moved to Indianapolis. In 1993, a team in the Canadian (S.D.N.Y. 1993) (finding abandonment)
Football League proposed to play in Baltimore and to call itself the and Indianapolis Colts, Inc. v. Metro.
“Baltimore CFL Colts.” The NFL Colts sued, and won an injunction Baltimore Football, 34 F.3d 410 (7th Cir.
1994) (finding no abandonment).
against the CFL Colts’ use of the name. Properly decided? Does it
ma er whether the NFL Colts were selling merchandise with the old
team name and insignia? If the defendants proposed instead to open
up a bar in Baltimore under the name The Baltimore Colt?
D Infringement: Confusion
Baltimore CFL Colts logo
Unlike in other areas of IP, it is not so easy to divide trademark in-
fringement into ”similarity” and ”prohibited conduct.” The reason
is that trademark liability turns on consumer perceptions, and simi-
larity of marks is only one factor going into what consumers believe.
Their familiarity with the plaintiff and its trademark, the care they
take when shopping, and the similarity or difference between plain-
tiff’s and defendant’s goods, are all among the factors that can de-
termine whether consumers are confused when confronted with the
defendant’s trademark in an actual marketplace context.
Instead, it is more helpful to divide (direct) trademark infringe-
ment into the factual question of whether the defendant’s activities
create a likelihood of confusion among consumers, and the legal ques- It is commonly said that dilution is not
tion of what kinds of confusion are legally actionable. The former a confusion-based theory of liability,
since the gravamen is the harm is harm
typically turns on multifactor balancing tests and empirical questions
to the mark itself. I have never under-
about consumer perception. The later typically are stated as catego- stood this claim. Consumers are still
rial rules that certain kinds of conduct can and cannot give rise to confused, they're just confused about
liability. This approach preserves the standards-vs.-rules distinction something else: the mark itself. The
in breaking down infringement in other areas. same goes for other supposedly "non-
confusion based" theories of liability.
The paradigm theory of trademark confusion is point-of-sale con-
fusion about the source of goods: at the moment the consumer hands
over her money, she thinks she’s ge ing the plaintiff’s goods or ser-
vices, but is actually receiving the defendant’s. So we begin by study-
ing the standard multi-factor test for point-of-sale confusion about
source. Every circuit has its own list of factors; they differ in the de-
tails but mostly ask the same questions.
The next section will take up other theories of confusion. For the
most part, we will not separately consider the multi-factor balancing
tests they employ. First, the tests are generally variations on the basic
test described in this section; ge ing into the details of the differences
474 CHAPTER 6. TRADEMARK
adds li le insight. Second, once one leaves the calm waters of point-
of-sale confusion about source for the choppy seas of other theories
of liability, the multi-factor tests are mostly bullshit.
Lanham Act
15 U.S.C. § 1114 [Lanham Act § 32]
(1) Any person who shall, without the consent of the registrant—
Remedies; infringement … (a) use in commerce any reproduction, counterfeit, copy, or
colorable imitation of a registered mark in connection with
the sale, offering for sale, distribution, or advertising of
any goods or services on or in connection with which such
use is likely to cause confusion, or to cause mistake, or to
deceive; or
(b) reproduce, counterfeit, copy, or colorably imitate a reg-
istered mark and apply such reproduction, counterfeit,
copy, or colorable imitation to labels, signs, prints, pack-
ages, wrappers, receptacles or advertisements intended to
be used in commerce upon or in connection with the sale,
offering for sale, distribution, or advertising of goods or
services on or in connection with which such use is likely
to cause confusion, or to cause mistake, or to deceive,
shall be liable in a civil action by the registrant for the remedies
hereinafter provided.
Note that while § 32 of the Lanham Act speaks of infringement of
registered marks, § 43 (discussed in more detail below) also gives a
federal cause of action for infringement of unregistered marks – and
both of them coexist with state-law causes of action for trademark
infringement. In practice, the tests for consumer confusion about
source based on the defendant’s use of a mark under all of these
causes of action are effectively identical. The substantive and juris-
dictional distinctions between state and federal causes of action are
discussed in the Preemption and Litigation chapters, respectively.
Virgin Enterprises Ltd. v. Nawab
335 F.3d 141 (2d Cir. 2003)
Leval, Circuit Judge:
(Leval, J.) Plaintiff Virgin Enterprises Limited (“VEL” or “plaintiff”) appeals
from the denial of its motion for a preliminary injunction. This suit,
brought under § 32 of the Lanham Act, alleges that defendants in-
fringed plaintiff’s rights in the registered mark VIRGIN by operating
retail stores selling wireless telephones and related accessories and
D. INFRINGEMENT: CONFUSION 475
services under the trade name VIRGIN WIRELESS. We find that the
plaintiff is likely to succeed on the merits and was entitled to a pre-
liminary injunction.
B
Plaintiff VEL, a corporation with its principal place of business in Lon-
don, owns U.S. Registration No. 1,851,817 (“the 817 Registration”),
filed on May 5, 1991, and registered on August 30, 1994, for the VIR-
GIN mark as applied to “retail store services in the fields of ... com-
puters and electronic apparatus” (emphasis added). Plaintiff filed an
affidavit of continuing use, pursuant to 15 U.S.C. § 1058(a), on April
27, 2000, which averred that plaintiff had used the mark in connection
with retail store services selling computers and electronic apparatus.
Plaintiff also owns U.S. Registration No. 1,852,776 (“the 776 Regis-
tration”), filed on May 9, 1991, and registered on September 6, 1994,
for a stylized version of the VIRGIN mark for use in connection with
“retail store services in the fields of ... computers and electronic appa-
ratus,” and U.S. Registration No. 1,863,353 (“the 353 Registration”),
filed on May 19, 1992, and registered on November 15, 1994, for the
VIRGIN MEGASTORE mark. It is undisputed that these three regis-
trations have become incontestable pursuant to 15 U.S.C. § 1065.
VEL, either directly or through corporate affiliates, operates vari-
ous businesses worldwide under the trade name VIRGIN, including
an airline, large-scale record stores called Virgin Megastores, and an
internet information service. Plaintiff or its affiliates also market a
variety of goods branded with the VIRGIN name, including music
recordings, computer games, books, and luggage. Three of plain-
tiff’s megastores are located in the New York area. According to an
affidavit submi ed to the district court in support of plaintiff’s ap-
plication for preliminary injunction, Virgin Megastores sell a variety
of electronic apparatus, including video game systems, portable CD
players, disposable cameras, and DVD players. These stores adver-
tise in a variety of media, including radio.
Defendants Simon Bli and Daniel Gazal are the sole sharehold-
ers of defendants Cel-Net Communications, Inc. (“Cel-Net”); The
Cellular Network Communications, Inc., doing business as CNCG
(“CNCG”); and SD Telecommunications, Inc. (“SD Telecom”). Bli
and Gazal formed Cel-Net in 1993 to sell retail wireless telephones
and services in the New York area. Later, they formed CNCG to sell
wireless phones and services on the wholesale level. CNCG now sells
wireless phones and services to more than 400 independent wireless
retailers. In 1998, Cel-Net received permission from New York State
regulators to resell telephone services within the state.
Around 1999, Andrew Kastein, a vice-president of CNCG, began
to develop a Cel-Net brand of wireless telecommunications products.
476 CHAPTER 6. TRADEMARK
In early 1999, Cel-Net entered into negotiations with the Sprint PCS
network to provide telecommunications services for resale by Cel-
Net. In August 1999, Cel-Net retained the law firm Pennie & Ed-
monds to determine the availability of possible service marks for Cel-
Net. Pennie & Edmonds associate Elizabeth Langston researched
for Kastein a list of possible service marks; among the marks Cel-
Net asked to have researched was VIRGIN. Defendants claim that
Langston told Cel-Net officer Simon Corney that VIRGIN was avail-
able for use in the telecommunications field. Plaintiff disputed this,
offering an affidavit from Langston that she informed defendants that
she would not search the VIRGIN mark because her firm represented
plaintiff.
According to defendants, in December 1999, Cel-Net retained Cor-
porate Solutions, LLC and its principals Nathan Erlich and Tahir
Nawab as joint venture partners to help raise capital to launch Cel-
Net’s wireless telephone service. On December 2, 1999, Erlich and
Nawab filed four intent-to-use applications with the U.S. Patent and
Trademark Office (“PTO”) to register the marks VIRGIN WIRELESS,
VIRGIN MOBILE, VIRGIN COMMUNICATIONS, and VIRGIN NET
in the field of telecommunications services, class 38. On December
24, 1999, Corporate Solutions incorporated defendant Virgin Wire-
less, Inc. (“VWI”) and licensed to VWI the right to use the marks
VIRGIN WIRELESS and VIRGIN MOBILE. Meanwhile, one of plain-
tiff’s affiliates had begun to offer wireless telecommunication services
bearing the VIRGIN mark in the United Kingdom. A press release
dated November 19, 1999, found on plaintiff’s website, stated that its
Virgin Mobile wireless services were operable in the United States.
On June 23, 2000, defendant Bli signed a lease under the name
Virgin Wireless for a kiosk location in South Shore Mall in Long Is-
land from which to re-sell AT&T wireless services, telephones, and
accessories under the retail name Virgin Wireless. Defendants Cel-
Net and VWI later expanded their telecommunications re-sale oper-
ations to include two retail stores and four additional retail kiosks in
malls in the New York area and in Pennsylvania. All of these stores
have been run by VWI under the trade name VIRGIN WIRELESS.
VWI also has leases and bank accounts in its name, and has shown
evidence of actual retail transactions and newspaper advertisements.
In August 2000, plaintiff licensed Virgin Mobile USA, LLC, to
use the VIRGIN mark for wireless telecommunications services in
the United States. On August 10, 2000, plaintiff filed an intent-to-
use application with the PTO for use of the VIRGIN mark in the
United States on telecommunications services and mobile telephones.
On October 11, 2001, the PTO suspended this mark’s registration
in international class 9, which covers wireless telephones, and class
38, which covers telecommunications services, because the VIRGIN
D. INFRINGEMENT: CONFUSION 477
mark was already reserved by a prior filing, presumably defendants’.
On August 16, 2001, plaintiff filed another intent-to-use application
for the mark VIRGIN MOBILE to brand telecommunications services.
The PTO issued a non-final action le er for both of plaintiff’s pending
new registrations on October 31, 2001, which stated that defendant
Corporation Solutions’ pending applications for similar marks in the
same class could give rise to “a likelihood of confusion.” The PTO
suspended action on plaintiff’s application pending the processing
of Corporation Solutions’ applications.
In October 2001, plaintiff issued a press release announcing that
it was offering wireless telecommunications services and mobile tele-
phones in the United States.
Plaintiff became aware of Corporation Solutions’ application for
registration of the VIRGIN WIRELESS and VIRGIN MOBILE marks
by May 2000. In October 2001 and December 2001, defendant VWI
filed suits against plaintiff in the federal district courts in Arizona
and Delaware, alleging that plaintiff was using VWI’s mark. Plain-
tiff maintains (and the district court found) that it learned in January
2002 that VWI and Cel-Net were operating kiosks under the VIRGIN
WIRELESS name and two days later filed the present suit seeking to
enjoin defendants from selling mobile phones in VIRGIN-branded
retail stores.
D
We believe the district court accorded plaintiff too narrow a scope
of protection for its famous, arbitrary, and distinctive mark. There
could be no dispute that plaintiff prevailed as to the first prong of
the test – prior use and ownership. For years, plaintiff had used the
VIRGIN mark on huge, famous stores selling, in addition to music
recordings, a variety of consumer electronic equipment. At the time
the defendants began using VIRGIN, plaintiff owned rights in the
mark. The focus of inquiry thus turns to the second prong of the
test – whether defendants’ use of VIRGIN as a mark for stores selling
wireless telephone services and phones was likely to cause confusion.
There can be li le doubt that such confusion was likely.
The landmark case of Polaroid Corp. v. Polarad Electronics Corp., Polaroid: 287 F.2d 492 (2d Cir.1961)
outlined a series of nonexclusive factors likely to be pertinent in ad- (Friendly, J.)
dressing the issue of likelihood of confusion, which are routinely fol-
lowed in such cases.
Six of the Polaroid factors relate directly to the likelihood of con-
sumer confusion. These are the strength of the plaintiff’s mark; the
similarity of defendants’ mark to plaintiff’s; the proximity of the
products sold under defendants’ mark to those sold under plaintiff’s;
where the products are different, the likelihood that plaintiff will
bridge the gap by selling the products being sold by defendants; the
478 CHAPTER 6. TRADEMARK
existence of actual confusion among consumers; and the sophistica-
tion of consumers. Of these six, all but the last (which was found by
the district court to be neutral) strongly favor the plaintiff. The re-
maining two Polaroid factors, defendants’ good or bad faith and the
quality of defendants’ products, are more pertinent to issues other
than likelihood of confusion, such as harm to plaintiff’s reputation
and choice of remedy. We conclude that the Polaroid factors power-
fully support plaintiff’s position.
Strength of the mark. The strength of a trademark encompasses
two different concepts, both of which relate significantly to likeli-
hood of consumer confusion. The first and most important is inher-
ent strength, also called “inherent distinctiveness.” This inquiry dis-
tinguishes between, on the one hand, inherently distinctive marks –
marks that are arbitrary or fanciful in relation to the products (or ser-
vices) on which they are used – and, on the other hand, marks that
are generic, descriptive or suggestive as to those goods. The former
are the strong marks. The second sense of the concept of strength of
a mark is “acquired distinctiveness,” i.e., fame, or the extent to which
prominent use of the mark in commerce has resulted in a high degree
of consumer recognition.
Considering first inherent distinctiveness, the law accords broad,
muscular protection to marks that are arbitrary or fanciful in rela-
tion to the products on which they are used, and lesser protection,
or no protection at all, to marks consisting of words that identify or
describe the goods or their a ributes. The reasons for the distinction
arise from two aspects of market efficiency. The paramount objective
of the trademark law is to avoid confusion in the marketplace. The
purpose for which the trademark law accords merchants the exclu-
sive right to the use of a name or symbol in their area or commerce is
identification, so that the merchants can establish goodwill for their
goods based on past satisfactory performance, and the consuming
public can rely on a mark as a guarantee that the goods or services so
marked come from the merchant who has been found to be satisfac-
tory in the past. At the same time, efficiency and the public interest
require that every merchant trading in a class of goods be permi ed
to refer to the goods by their name, and to make claims about their
quality. Thus, a merchant who sells pencils under the trademark Pen-
cil or Clear Mark, for example, and seeks to exclude other sellers of
pencils from using those words in their trade, is seeking an advantage
the trademark law does not intend to offer. To grant such exclusiv-
ity would deprive the consuming public of the useful market infor-
mation it receives where every seller of pencils is free to call them
pencils. The trademark right does not protect the exclusive right to
an advertising message – only the exclusive right to an identifier, to
protect against confusion in the marketplace. Thus, as a ma er of
D. INFRINGEMENT: CONFUSION 479
policy, the trademark law accords broader protection to marks that
serve exclusively as identifiers and lesser protection where a grant of
exclusiveness would tend to diminish the access of others to the full
range of discourse relating to their goods.
The second aspect of efficiency that justifies according broader
protection to marks that are inherently distinctive relates directly to
the likelihood of confusion. If a mark is arbitrary or fanciful, and
makes no reference to the nature of the goods it designates, con-
sumers who see the mark on different objects offered in the mar-
ketplace will be likely to assume, because of the arbitrariness of the
choice of mark, that they all come from the same source. For exam-
ple, if consumers become familiar with a toothpaste sold under an un-
usual, arbitrary brand name, such as ZzaaqQ, and later see that same
inherently distinctive brand name appearing on a different product,
they are likely to assume, notwithstanding the product difference,
that the second product comes from the same producer as the first.
The more unusual, arbitrary, and fanciful a trade name, the more un-
likely it is that two independent entities would have chosen it. In con-
trast, every seller of foods has an interest in calling its product “deli-
cious.” Consumers who see the word delicious used on two or more
different food products are less likely to draw the inference that they
must all come from the same producer. In short, the more distinctive
the mark, the greater the likelihood that the public, seeing it used a
second time, will assume that the second use comes from the same
source as the first. The goal of avoiding consumer confusion thus
dictates that the inherently distinctive, arbitrary, or fanciful marks,
i.e., strong marks, receive broader protection than weak marks, those
that are descriptive or suggestive of the products on which they are
used.
The second sense of trademark strength, fame, or “acquired dis-
tinctiveness,” also bears on consumer confusion. If a mark has been
long, prominently and notoriously used in commerce, there is a
high likelihood that consumers will recognize it from its prior use.
Widespread consumer recognition of a mark previously used in com-
merce increases the likelihood that consumers will assume it iden-
tifies the previously familiar user, and therefore increases the likeli-
hood of consumer confusion if the new user is in fact not related to
the first. A mark’s fame also gives unscrupulous traders an incen-
tive to seek to create consumer confusion by associating themselves
in consumers’ minds with a famous mark. The added likelihood of
consumer confusion resulting from a second user’s use of a famous
mark gives reason for according such a famous mark a broader scope
of protection, at least when it is also inherently distinctive.
Plaintiff’s VIRGIN mark undoubtedly scored high on both con-
cepts of strength. In relation to the sale of consumer electronic equip-
480 CHAPTER 6. TRADEMARK
ment, the VIRGIN mark is inherently distinctive, in that it is arbitrary
and fanciful; the word “virgin” has no intrinsic relationship whatso-
ever to selling such equipment. Because there is no intrinsic reason
for a merchant to use the word “virgin” in the sale of consumer elec-
tronic equipment, a consumer seeing VIRGIN used in two different
stores selling such equipment will likely assume that the stores are
related.
Plaintiff’s VIRGIN mark was also famous. The mark had been
employed with world-wide recognition as the mark of an airline and
as the mark for megastores selling music recordings and consumer
electronic equipment. The fame of the mark increased the likelihood
that consumers seeing defendants’ shops selling telephones under
the mark VIRGIN would assume incorrectly that defendants’ shops
were a part of plaintiff’s organization.
There can be no doubt that plaintiff’s VIRGIN mark, as used on
consumer electronic equipment, is a strong mark, as the district court
found. It is entitled as such to a broad scope of protection, precisely
because the use of the mark by others in connection with stores selling
reasonably closely related merchandise would inevitably have a high
likelihood of causing consumer confusion.
Similarity of marks. When the secondary user’s mark is not identi-
cal but merely similar to the plaintiff’s mark, it is important to assess
the degree of similarity between them in assessing the likelihood that
consumers will be confused. Plaintiff’s and defendants’ marks were
not merely similar; they were identical to the extent that both con-
sisted of the same word, “virgin.”
The district court believed this factor did not favor plaintiff be-
cause it found some differences in appearance. Defendants’ logo
used a difference typeface and different colors from plaintiff’s. While
those are indeed differences, they are quite minor in relation to the
fact that the name being used as a trademark was the same in each
case.
Advertisement and consumer experience of a mark do not neces-
sarily transmit all of the mark’s features. Plaintiff, for example, ad-
vertised its Virgin Megastores on the radio. A consumer who heard
those advertisements and then saw the defendants’ installation using
the name VIRGIN would have no way of knowing that the two trade-
marks looked different. A consumer who had visited one of plain-
tiff’s Virgin Megastores and remembered the name would not neces-
sarily remember the typeface and color of plaintiff’s mark. The rep-
utation of a mark also spreads by word of mouth among consumers.
One consumer who hears from others about their experience with
Virgin stores and then encounters defendants’ Virgin store will have
no way knowing of the differences in typeface.
In view of the fact that defendants used the same name as plaintiff,
D. INFRINGEMENT: CONFUSION 481
we conclude the defendants’ mark was sufficiently similar to plain-
tiff’s to increase the likelihood of confusion. This factor favored the
plaintiff as a ma er of law. We conclude that the district court erred
in concluding otherwise on the basis of comparatively trivial and of-
ten irrelevant differences.
Proximity of the products and likelihood of bridging the gap. The next
factor is the proximity of the products being sold by plaintiff and de-
fendant under identical (or similar) marks. This factor has an obvious
bearing on the likelihood of confusion. When the two users of a mark
are operating in completely different areas of commerce, consumers
are less likely to assume that their similarly branded products come
from the same source. In contrast, the closer the secondary user’s
goods are to those the consumer has seen marketed under the prior
user’s brand, the more likely that the consumer will mistakenly as-
sume a common source.
While plaintiff had not sold telephones or telephone service prior
to defendant’s registration evincing intent to sell those items, plaintiff
had sold quite similar items of consumer electronic equipment. These
included computer video game systems, portable casse e-tape play-
ers, compact disc players, MP3 players, mini-disc players, and dis-
posable cameras. Like telephones, many of these are small consumer
electronic gadgets making use of computerized audio communica-
tion. They are sold in the same channels of commerce. Consumers
would have a high expectation of finding telephones, portable CD
players, and computerized video game systems in the same stores.
We think the proximity in commerce of telephones to CD players sub-
stantially advanced the risk that consumer confusion would occur
when both were sold by different merchants under the same trade
name, VIRGIN.
Our classic Polaroid test further protects a trademark owner by
examining the likelihood that, even if the plaintiff’s products were
not so close to the defendants’ when the defendant began to market
them, there was already a likelihood that plaintiff would in the rea-
sonably near future begin selling those products. VEL’s claim of prox-
imity was further strengthened in this regard because, as the district
court expressly found, “plans had been formulated [for VEL] to enter
[the market for telecommunications products and services] shortly in
the future.” VEL had already begun marketing telephone service in
England which would operate in the United States, and, as the dis-
trict court found, had made plans to sell telephones and wireless tele-
phone service under the VIRGIN name from its retail stores.
The district court, nonetheless, found in favor of the defendants
with respect to the proximity of products and services. We would or-
dinarily give considerable deference to a factual finding on this issue.
Here, however, we cannot do so because it appears the district court
482 CHAPTER 6. TRADEMARK
applied the wrong test. The court did not assess the proximity of de-
fendants’ VIRGIN-branded retail stores selling telephone products to
plaintiff’s VIRGIN-branded retail stores selling other consumer elec-
tronic products. It simply concluded that, because defendants were
selling exclusively telephone products and services, and plaintiff’s
electronic products did not include telephones or related services, the
defendants must prevail as to the proximity factor.
This represents a considerable misunderstanding of the Polaroid
test. The famous list of factors of likely pertinence in assessing like-
lihood of confusion in Polaroid was specially designed for a case like
this one, in which the secondary user is not in direct competition with
the prior user, but is selling a somewhat different product or service.
In Polaroid, the plaintiff sold optical and camera equipment, while
the defendant sold electronic apparatus. The test the court discussed
was expressly addressed to the problem “how far a valid trademark
shall be protected with respect to goods other than those to which its
owner has applied it.” 287 F.2d at 495 (emphasis added). The very
fact that the test includes the “proximity” between the defendant’s
products and the plaintiff’s and the likelihood that the plaintiff will
“bridge the gap” makes clear that the trademark owner does not lose,
as the district court concluded, merely because it has not previously
sold the precise good or service sold by the secondary user.
In our view, had the district court employed the proper test of
proximity, it could not have failed to find a high degree of proximity
as between plaintiff VEL’s prior sales of consumer electronic audio
equipment and defendants’ subsequent sales of telephones and tele-
phone services, which proximity would certainly contribute to likeli-
hood of consumer confusion. And plaintiff was all the more entitled
to a finding in its favor in respect of these ma ers by virtue of the fact,
which the district court did find, that at the time defendants began us-
ing the VIRGIN mark in the retail sale of telephones and telephone
services, plaintiff already had plans to bridge the gap by expanding
its sales of consumer electronic equipment to include sales of those
very goods and services in the near future. Consumer confusion was
more than likely; it was virtually inevitable.
Actual confusion. It is self-evident that the existence of actual con-
sumer confusion indicates a likelihood of consumer confusion. We
have therefore deemed evidence of actual confusion “particularly rel-
evant” to the inquiry.
Plaintiff submi ed to the district court an affidavit of a former em-
ployee of defendant Cel-Net, who worked at a mall kiosk branded as
Virgin Wireless, which stated that individuals used to ask him if the
kiosk was affiliated with plaintiff’s VIRGIN stores. The district court
correctly concluded that this evidence weighed in plaintiff’s favor.
Sophistication of consumers. The degree of sophistication of con-
D. INFRINGEMENT: CONFUSION 483
sumers can have an important bearing on likelihood of confusion.
Where the purchasers of a products are highly trained professionals,
they know the market and are less likely than untrained consumers
to be misled or confused by the similarity of different marks. The
district court recognized that “[r]etail customers, such as the ones
catered to by both the defendants and [plaintiff], are not expected
to exercise the same degree of care as professional buyers, who are
expected to have greater powers of discrimination.” On the other
hand, it observed that purchasers of cellular telephones and the ser-
vice plans were likely to give greater care than self-service customers
in a supermarket. Noting that neither side had submi ed evidence
on the sophistication of consumers, the court made no finding favor-
ing either side. We agree that the sophistication factor is neutral in
this case.
Bad faith and the quality of the defendants’ services or products. Two
factors remain of the conventional Polaroid test: the existence of bad
faith on the part of the secondary user and the quality of the sec-
ondary user’s products or services. Neither factor is of high relevance
to the issue of likelihood of confusion. A finding that a party acted
in bad faith can affect the court’s choice of remedy or can tip the bal-
ance where questions are close. It does not bear directly on whether
consumers are likely to be confused. The district court noted some ev-
idence of bad faith on the defendants’ part, but because the evidence
on the issue was scant and equivocal, the court concluded that such
a finding “at this stage [would be] speculative.” The court therefore
found that this factor favored neither party.
The issue of the quality of the secondary user’s product goes more
to the harm that confusion can cause the plaintiff’s mark and reputa-
tion than to the likelihood of confusion. In any event, the district
court found this factor to be “neutral” with respect to likelihood of
confusion.
******
In summary we conclude that of the six Polaroid factors that per-
tain directly to the likelihood of consumer confusion, all but one favor
the plaintiff, and that one – sophistication of consumers – is neutral.
The plaintiff is strongly favored by the strength of its mark, both in-
herent and acquired; the similarity of the marks; the proximity of the
products and services; the likelihood that plaintiff would bridge the
gap; and the existence of actual confusion. None of the factors favors
the defendant. The remaining factors were found to be neutral. Al-
though we do not suggest that likelihood of confusion may be prop-
erly determined simply by the number of factors in one party’s favor,
the overall assessment in this case in our view admits only of a finding
484 CHAPTER 6. TRADEMARK
in plaintiff’s favor that defendants’ sale of telephones and telephone-
related services under the VIRGIN mark was likely to cause substan-
tial consumer confusion.
We conclude that, as a ma er of law, plaintiff demonstrated ir-
reparable harm and likelihood of success on the merits and was enti-
tled to a preliminary injunction.
Sally Beauty Co., Inc. v. Beautyco, Inc.
304 F.3d 964 (9th Cir. 2002)
Sally Beauty Co., Inc. (“Sally Beauty”) and Marianna Imports, Inc.
(“Marianna”), collectively “Plaintiffs,” sued Beautyco, Inc. (“Beau-
tyco”) for trademark infringement, trade dress infringement, and
false advertising. Beautyco markets a line of hair care products un-
der the trade name GENERIX, which the Plaintiffs claim infringes the
trademark and trade dress of their competing line of hair care prod-
ucts called Generic Value Products.
The degree of similarity between marks rests on sight, sound, and
meaning. This court must determine whether the allegedly infring-
ing mark will confuse the public when singly presented, rather than
when presented side by side with the protected trademark. In so do-
ing, similarities are weighed more heavily than differences, particu-
larly when the competing marks are used in virtually identical prod-
ucts packaged in a similar manner.
The district court concluded that the similarity of marks weighed
in favor of Marianna. “Generic Value Products,” however, is not visu-
ally similar to “GENERIX.” Marianna’s mark consists of three words,
while Beautyco’s consists of only one. Although both marks begin
with the same six le ers, this similarity is not enough to outweigh
the visual differences in the marks.
The sound of the marks is also different. “Generic Value Products”
does not sound similar to “GENERIX.” In considering this subfactor,
the district court erred by shortening “Generic Value Products” to
simply “Generic” in comparing aural similarities between the marks.
The district court cited no authority which would permit the short-
ening of the trademark for the likelihood of confusion analysis. Mar-
Giant Food: 710 F. 2d 1565 (Fed. Cir. ianna relies on Giant Food, Inc. v. Nation’s Foodservice, Inc., in sup-
1983) port, but that case involved marks consisting of pictorial designs with
clearly dominant visual elements. In this case, however, the Generic
Value Products mark consists of words alone and no one word takes
precedence over the others.
In contrast, the meanings of “Generic Value Products” and
“GENERIX” are similar. Although “GENERIX” has no inherent
meaning, Beautyco admits in its motion for summary judgment that
the use of the word is obviously intended to convey the idea that its
product is inexpensive. Beautyco further concedes that Sally Beauty’s
use of “Generic” conveys the same idea. Taken as a whole, Generic
D. INFRINGEMENT: CONFUSION 485
Value Products conveys the same meaning as GENERIX.
On balance, the similarity in meaning between the marks favors
Marianna, but the differences in both sight and sound favor Beau-
tyco. Although similarities are to be weighed more heavily than dif-
ferences, the differences in this case are significant enough to lead us
to conclude that this factor weighs in favor of Beautyco.
Cheat Sheet Problem
Barton Beebe, An Empirical Study of the Multifactor Tests for Trademark
Infringement, 94 C . L. R . 1581 (2006) reports on an empirical
study of 331 litigated trademark cases and concludes that the factors
do not have equal importance. According to Beebe, the following
flowchart correctly decides every case in the sample set:
• Are the marks similar? If NO, then the defendant wins.
• Did the defendant act in bad faith? If YES, then the plaintiff
wins.
• Was there actual confusion? If YES, then the plaintiff wins.
• Were the goods proximate? If NO, then the defendant wins.
• Is the plaintiff’s mark strong? If YES, then the plaintiff wins; if
NO, then the defendant wins.
How should Professor Beebe’s findings influence our thinking about
trademark infringement? Should it change how lawyers argue cases,
how judges decide them, or how we study them in class?
Boats Problem
Following are the facts as stated in AMF Inc. v. Sleekcraft Boats. As- AMF: 599 F.2d 341 (9th Cir. 1979)
suming a jury verdict in favor of the plaintiff on a claim of trademark
infringement at trial, how should the court rule on the defendant’s
motion for judgment notwithstanding the verdict?
AMF and appellee Nescher both manufacture recreational
boats. AMF uses the mark Slickcraft, and Nescher uses
Sleekcraft.
AMF’s predecessor used the name Slickcraft Boat Com-
pany from 1954 to 1969 when it became a division of AMF.
The mark SLICKCRAFT was federally registered on April
1, 1969, and has been continuously used since then as a
trademark for this line of recreational boats.
Slickcraft boats are distributed and advertised nationally.
AMF has authorized over one hundred retail outlets to
sell the Slickcraft line. For the years 1966-1974, promo-
tional expenditures for the Slickcraft line averaged ap-
proximately $ 200,000 annually. Gross sales for the same Slickcraft (top) and Sleekcraft (bottom)
period approached $ 50,000,000. logos
486 CHAPTER 6. TRADEMARK
After several years in the boat-building business, appellee
Nescher organized a sole proprietorship, Nescher Boats,
in 1962. This venture failed in 1967. In late 1968 Nescher
began anew and adopted the name Sleekcraft. Since then
Sleekcraft has been the Nescher trademark. The name
Sleekcraft was selected without knowledge of appellant’s
use. After AMF notified him of the alleged trademark in-
fringement, Nescher adopted a distinctive logo and added
the identifying phrase “Boats by Nescher” on plaques af-
fixed to the boat and in much of its advertising. The
Sleekcraft mark still appears alone on some of appellee’s
stationery, signs, trucks, and advertisements..
The Sleekcraft venture succeeded. Expenditures for pro-
motion increased from $ 6,800 in 1970 to $ 126,000 in 1974.
Gross sales rose from $ 331,000 in 1970 to over $ 6,000,000
in 1975. Like AMF, Nescher sells his boats through autho-
AMF boat
rized local dealers.
Slickcraft boats are advertised primarily in magazines of
general circulation. Nescher advertises primarily in pub-
lications for boat racing enthusiasts. Both parties exhibit
Nescher boat
their product line at boat shows, sometimes the same
show
E Infringement: Prohibited Conduct
1 Threshold Conditions
Rescuecom Corp. v. Google Inc.
562 F.3d 123 (2d Cir. 2009)
Appeal by Plaintiff Rescuecom Corp. from a judgment of the United
States District Court for the Northern District of New York (Mordue,
Chief Judge) dismissing its action against Google, Inc., under Rule
12(b)(6) for failure to state a claim upon which relief may be granted.
Rescuecom’s Complaint alleges that Google is liable under §§ 32 and
43 of the Lanham Act, 15 U.S.C. §§ 1114 & 1125, for infringement,
false designation of origin, and dilution of Rescuecom’s eponymous
trademark. The district court believed the dismissal of the action was
1-800: 414 F.3d 400 (2d Cir. 2005) compelled by our holding in 1-800 Contacts, Inc. v. WhenU. Com, Inc.,
because, according to the district court’s understanding of that opin-
ion, Rescuecom failed to allege that Google’s use of its mark was a
”use in commerce” within the meaning of § 45 of the Lanham Act,
15 U.S.C. § 1127. We believe this misunderstood the holding of 1-
800. While we express no view as to whether Rescuecom can prove
a Lanham Act violation, an actionable claim is adequately alleged in
E. INFRINGEMENT: PROHIBITED CONDUCT 487
its pleadings. Accordingly, we vacate the judgment dismissing the
action and remand for further proceedings.
BACKGROUND
Rescuecom is a national computer service franchising company that (Leval, J.)
offers on-site computer services and sales. Rescuecom conducts a
substantial amount of business over the Internet and receives be-
tween 17,000 to 30,000 visitors to its website each month. It also ad-
vertises over the Internet, using many web-based services, including
those offered by Google. Since 1998, RESCUECOM has been a regis-
tered federal trademark, and there is no dispute as to its validity.
Google’s proprietary system responds to such a search request in
two ways. First, Google provides a list of links to websites, ordered in
what Google deems to be of descending relevance to the user’s search
terms based on its proprietary algorithms. The second way Google
responds to a search request is by showing context-based advertising.
AdWords is Google’s program through which advertisers pur-
chase terms (or keywords). When entered as a search term, the key-
word triggers the appearance of the advertiser’s ad and link. An
advertiser’s purchase of a particular term causes the advertiser’s ad
and link to be displayed on the user’s screen whenever a searcher
launches a Google search based on the purchased search term. Adver-
tisers pay Google based on the number of times Internet users ”click”
on the advertisement, so as to link to the advertiser’s website. For ex-
ample, using Google’s AdWords, Company Y, a company engaged in
the business of furnace repair, can cause Google to display its adver-
tisement and link whenever a user of Google launches a search based
on the search term, ”furnace repair.” Company Y can also cause its ad
and link to appear whenever a user searches for the term ”Company
X,” a competitor of Company Y in the furnace repair business. Thus,
whenever a searcher interested in purchasing furnace repair services
from Company X launches a search of the term X (Company X’s trade-
mark), an ad and link would appear on the searcher’s screen, inviting
the searcher to the furnace repair services of X’s competitor, Com-
pany Y. And if the searcher clicked on Company Y’s link, Company
Y’s website would open on the searcher’s screen, and the searcher
might be able to order or purchase Company Y’s furnace repair ser-
vices.
In addition to AdWords, Google also employs Keyword Sugges-
tion Tool, a program that recommends keywords to advertisers to be
purchased. The program is designed to improve the effectiveness
of advertising by helping advertisers identify keywords related to
their area of commerce, resulting in the placement of their ads before
users who are likely to be responsive to it. Thus, continuing the ex-
ample given above, if Company Y employed Google’s Keyword Sug-
488 CHAPTER 6. TRADEMARK
gestion Tool, the Tool might suggest to Company Y that it purchase
not only the term ”furnace repair” but also the term ”X,” its competi-
tor’s brand name and trademark, so that Y’s ad would appear on the
screen of a searcher who searched Company X’s trademark, seeking
Company X’s website.
Once an advertiser buys a particular keyword, Google links the
keyword to that advertiser’s advertisement. The advertisements con-
sist of a combination of content and a link to the advertiser’s webpage.
Google displays these advertisements on the search result page ei-
ther in the right margin or in a horizontal band immediately above
the column of relevance-based search results. These advertisements
are generally associated with a label, which says ”sponsored link.”
Rescuecom alleges, however, that a user might easily be misled to be-
lieve that the advertisements which appear on the screen are in fact
part of the relevance-based search result and that the appearance of
a competitor’s ad and link in response to a searcher’s search for Res-
cuecom is likely to cause trademark confusion as to affiliation, origin,
sponsorship, or approval of service. This can occur, according to the
Complaint, because Google fails to label the ads in a manner which
would clearly identify them as purchased ads rather than search re-
sults. The Complaint alleges that when the sponsored links appear
in a horizontal bar at the top of the search results, they may appear
to the searcher to be the first, and therefore the most relevant, entries
responding to the search, as opposed to paid advertisements.
Google’s objective in its AdWords and Keyword Suggestion Tool
programs is to sell keywords to advertisers. Rescuecom alleges
that Google makes 97% of its revenue from selling advertisements
through its AdWords program. Google therefore has an economic
incentive to increase the number of advertisements and links that ap-
pear for every term entered into its search engine.
Many of Rescuecom’s competitors advertise on the Internet.
Through its Keyword Suggestion Tool, Google has recommended
the Rescuecom trademark to Rescuecom’s competitors as a search
term to be purchased. Rescuecom’s competitors, some responding to
Google’s recommendation, have purchased Rescuecom’s trademark
as a keyword in Google’s AdWords program. This practice allegedly
allows Rescuecom’s competitors to deceive and divert users search-
ing for Rescuecom’s website.
DISCUSSION
Our court ruled in 1-800 that a complaint fails to state a claim under
the Lanham Act unless it alleges that the defendant has made ”use
in commerce” of the plaintiff’s trademark as the term ”use in com-
merce” is defined in 15 U.S.C. § 1127. The district court believed that
this case was on all fours with 1-800, and that its dismissal was re-
E. INFRINGEMENT: PROHIBITED CONDUCT 489
quired for the same reasons as given in 1-800. We believe the cases
are materially different. The allegations of Rescuecom’s complaint
adequately plead a use in commerce.
In 1-800, the plaintiff alleged that the defendant infringed the
plaintiff’s trademark through its proprietary software, which the de-
fendant freely distributed to computer users who would download
and install the program on their computer. The program provided
contextually relevant advertising to the user by generating pop-up
advertisements to the user depending on the website or search term
the user entered in his browser. For example, if a user typed ”eye
care” into his browser, the defendant’s program would randomly dis-
play a pop-up advertisement of a company engaged in the field of eye
care. Similarly, if the searcher launched a search for a particular com-
pany engaged in eye care, the defendant’s program would display
the pop-up ad of a company associated with eye care. The pop-up ad
appeared in a separate browser window from the website the user
accessed, and the defendant’s brand was displayed in the window
frame surrounding the ad, so that there was no confusion as to the
nature of the pop-up as an advertisement, nor as to the fact that the
defendant, not the trademark owner, was responsible for displaying
the ad, in response to the particular term searched.
Sections 32 and 43 of the Act, which we also refer to by their cod-
ified designations, 15 U.S.C. §§ 1114 & 1125, inter alia, impose liabil-
ity for unpermi ed ”use in commerce” of another’s mark which is
”likely to cause confusion, or to cause mistake, or to deceive,” § 1114,
”as to the affiliation... or as to the origin, sponsorship or approval of
his or her goods [or] services... by another person.” § 1125(a)(1)(A).
The 1-800 opinion looked to the definition of the term ”use in com-
merce” provided in § 45 of the Act, 15 U.S.C. § 1127. That definition
provides in part that ”a mark shall be deemed to be in use in com-
merce... (2) on services when it is used or displayed in the sale or
advertising of services and the services are rendered in commerce.”
15 U.S.C. § 1127. Our court found that the plaintiff failed to show
that the defendant made a ”use in commerce” of the plaintiff’s mark,
within that definition.
At the outset, we note two significant aspects of our holding in
1-800, which distinguish it from the present case. A key element of
our court’s decision in 1-800 was that under the plaintiff’s allegations,
the defendant did not use, reproduce, or display the plaintiff’s mark
at all. The search term that was alleged to trigger the pop-up ad was
the plaintiff’s website address. 1-800 noted, notwithstanding the sim-
ilarities between the website address and the mark, that the website
address was not used or claimed by the plaintiff as a trademark. Thus,
the transactions alleged to be infringing were not transactions involv-
ing use of the plaintiff’s trademark. 1-800 suggested in dictum that is
490 CHAPTER 6. TRADEMARK
highly relevant to our case that had the defendant used the plaintiff’s
trademark as the trigger to pop-up an advertisement, such conduct
might, depending on other elements, have been actionable.
Second, as an alternate basis for its decision, 1-800 explained why
the defendant’s program, which might randomly trigger pop-up ad-
vertisements upon a searcher’s input of the plaintiff’s website ad-
dress, did not constitute a ”use in commerce,” as defined in § 1127.
In explaining why the plaintiff’s mark was not ”used or displayed
in the sale or advertising of services,” 1-800 pointed out that, under
the defendant’s program, advertisers could not request or purchase
keywords to trigger their ads. Even if an advertiser wanted to dis-
play its advertisement to a searcher using the plaintiff’s trademark as
a search term, the defendant’s program did not offer this possibility.
The defendant’s program relied upon categorical associations such as
”eye care” to select a pop-up ad randomly from a predefined list of
ads appropriate to that category. To the extent that an advertisement
for a competitor of the plaintiff was displayed when a user opened
the plaintiff’s website, the trigger to display the ad was not based on
the defendant’s sale or recommendation of a particular trademark.
The present case contrasts starkly with those important aspects of
the 1-800 decision. First, in contrast to 1-800, where we emphasized
that the defendant made no use whatsoever of the plaintiff’s trade-
mark, here what Google is recommending and selling to its advertis-
ers is Rescuecom’s trademark. Second, in contrast with the facts of
1-800 where the defendant did not ”use or display,” much less sell,
trademarks as search terms to its advertisers, here Google displays,
offers, and sells Rescuecom’s mark to Google’s advertising customers
when selling its advertising services. In addition, Google encourages
the purchase of Rescuecom’s mark through its Keyword Suggestion
Tool.
Google, supported by amici, argues that 1-800 suggests that the in-
clusion of a trademark in an internal computer directory cannot con-
stitute trademark use. Several district court decisions in this Circuit
S&L Vitamins: 521 F. Supp. 2d 188 appear to have reached this conclusion. See, e.g., S&L Vitamins, Inc.
(E.D.N.Y.2007) v. Australian Gold, Inc. (holding that use of a trademark in metadata
did not constitute trademark use within the meaning of the Lanham
Act because the use ”is strictly internal and not communicated to the
Merck: 425 F. Supp. 2d 402 (S.D.N.Y. public”); Merck & Co., Inc. v. Mediplan Health Consulting, Inc. (holding
2006) that the internal use of a keyword to trigger advertisements did not
qualify as trademark use). This over-reads the 1-800 decision. First,
regardless of whether Google’s use of Rescuecom’s mark in its inter-
nal search algorithm could constitute an actionable trademark use,
Google’s recommendation and sale of Rescuecom’s mark to its adver-
tising customers are not internal uses. We did not imply in 1-800 that
an alleged infringer’s use of a trademark in an internal software pro-
E. INFRINGEMENT: PROHIBITED CONDUCT 491
gram insulates the alleged infringer from a charge of infringement,
no ma er how likely the use is to cause confusion in the marketplace.
If we were to adopt Google and its amici’s argument, the operators of
search engines would be free to use trademarks in ways designed to
deceive and cause consumer confusion.4 This is surely neither within
the intention nor the le er of the Lanham Act.
Google and its amici contend further that its use of the RESCUE-
COM trademark is no different from that of a retail vendor who
uses ”product placement” to allow one vender to benefit from a com-
petitors’ name recognition. An example of product placement oc-
curs when a store-brand generic product is placed next to a trade-
marked product to induce a customer who specifically sought out the
trademarked product to consider the typically less expensive, generic
brand as an alternative. Google’s argument misses the point. From
the fact that proper, non-deceptive product placement does not result
in liability under the Lanham Act, it does not follow that the label
”product placement” is a magic shield against liability, so that even a
deceptive plan of product placement designed to confuse consumers
would similarly escape liability. It is not by reason of absence of a use
of a mark in commerce that benign product placement escapes liabil-
ity; it escapes liability because it is a benign practice which does not
cause a likelihood of consumer confusion. In contrast, if a retail seller
were to be paid by an off-brand purveyor to arrange product display
and delivery in such a way that customers seeking to purchase a fa-
mous brand would receive the off-brand, believing they had go en
the brand they were seeking, we see no reason to believe the practice
would escape liability merely because it could claim the mantle of
”product placement.”
Unlike the practices discussed in 1-800, the practices here at-
tributed to Google by Rescuecom’s complaint are that Google has
made use in commerce of Rescuecom’s mark. Needless to say, a de-
fendant must do more than use another’s mark in commerce to vio-
late the Lanham Act. We have no idea whether Rescuecom can prove
that Google’s use of Rescuecom’s trademark in its AdWords program
causes likelihood of confusion or mistake. Rescuecom has alleged
that it does, in that would-be purchasers (or explorers) of its services
who search for its website on Google are misleadingly directed to the
4
For example, instead of having a separate ”sponsored links” or paid advertise-
ment section, search engines could allow advertisers to pay to appear at the top of
the ”relevance” list based on a user entering a competitor’s trademark – a function-
ality that would be highly likely to cause consumer confusion. Alternatively, sellers
of products or services could pay to have the operators of search engines automati-
cally divert users to their website when the users enter a competitor’s trademark as
a search term. Such conduct is surely not beyond judicial review merely because it
is engineered through the internal workings of a computer program.
492 CHAPTER 6. TRADEMARK
ads and websites of its competitors in a manner which leads them to
believe mistakenly that these ads or websites are sponsored by, or af-
filiated with Rescuecom. Whether Google’s actual practice is in fact
benign or confusing is not for us to judge at this time. We consider at
the 12(b)(6) stage only what is alleged in the Complaint.
We conclude that the district court was mistaken in believing that
our precedent in 1-800 requires dismissal.
Radiance Foundation, Inc. v. NAACP
786 F. 3d 316 (4th Cir. 2015)
The Radiance Foundation published an article online entitled
”NAACP: National Association for the Abortion of Colored People”
that criticized the NAACP’s stance on abortion. In response to a
cease-and-desist le er from the NAACP, Radiance sought a declara-
tory judgment that it had not infringed any NAACP trademarks. The
NAACP then filed counterclaims alleging trademark infringement
and dilution.
The National Association for the Advancement of Colored People,
be er known by its acronym ”NAACP,” is this country’s oldest and
largest civil rights organization, and one that holds a place of honor
in our history. It champions political, educational, social, and eco-
nomic equality of all citizens while working to eliminate racial and
other forms of prejudice within the United States. The NAACP owns
several trademarks, among them NAACP (federally registered) and
NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COL-
ORED PEOPLE.
The Radiance Foundation, established by Ryan Bomberger, is
also a non-profit organization focused on educating and influenc-
ing the public about issues impacting the African American commu-
nity. Radiance addresses social issues from a Christian perspective.
It uses as its platform two websites, TheRadianceFoundation.org and
TooManyAborted.com, where it posts articles on topics such as race
relations, diversity, fatherlessness, and the impact of abortion on
the black community. Radiance also runs a billboard campaign for
TooManyAborted.com; individuals may sponsor these billboards, li-
censing the artwork from Radiance. In addition to its billboard cam-
paign, Radiance funds its endeavors through donations from visitors
to its websites, which are facilitated by ”Donate” bu ons on the web-
pages that link to a PayPal site.
In January 2013, Bomberger authored an article criticizing the
NAACP’s annual Image Awards, entitled ”NAACP: National Asso-
ciation for the Abortion of Colored People.” The piece lambasted the
NAACP for sponsoring an awards event to recognize Hollywood fig-
ures and products that Radiance alleged defied Christian values and
perpetuated racist stereotypes. The article then criticized other of
the NAACP’s public stances and actions. It particularly targeted the
E. INFRINGEMENT: PROHIBITED CONDUCT 493
NAACP’s ties to Planned Parenthood and its position on abortion.
Though the NAACP has often claimed to be neutral on abortion, Ra-
diance maintains that the NAACP’s actions actually demonstrate sup-
port for the practice.
The article appeared on three websites: the two owned by Ra-
diance – TheRadianceFoundation.com and TooManyAborted.com –
and a third-party site called Life-News.com. Though the text of the
article was identical across the sites, the headlines and presentation
varied slightly. On TheRadianceFoundation.com, directly below the
headline was an image of a Too-ManyAborted billboard with the
headline ”NAACP: National Association for the Abortion of Colored
People” repeated next to it. The TooManyAborted.com site posted
the headline ”The National Association for the Abortion of Colored
People” with a graphic below of a red box with the words ”CIVIL
WRONG” followed by the modified NAACP name. Adjacent to
the article on both pages was an orange bu on with ”CLICK HERE
TO GIVE ONE-TIME GIFT TO THE RADIANCE FOUNDATION”
printed around the word ”DONATE.” Finally on LifeNews.com, the
third-party site, the NAACP’s Scales of Justice appeared as a graphic
underneath the headline.
II.
The first element of trademark infringement at issue is thus whether
Radiance’s use of the NAACP’s marks was ”in connection with the
sale, offering for sale, distribution, or advertising of any goods or
services.”. The NAACP urges us to give this requirement a ”broad 15 U.S.C. § 1114(1)(a)
construction,” but that construction would expose to liability a wide
array of noncommercial expressive and charitable activities. Such
an interpretation would push the Lanham Act close against a First
Amendment wall, which is incompatible with the statute’s purpose
and stretches the text beyond its breaking point. We decline to reach
so far.
At least five of our sister circuits have interpreted this element
as protecting from liability all noncommercial uses of marks. At the
very least, reading the ”in connection with” element to take in broad
swaths of noncommercial speech would be an overextension of the
Lanham Act’s reach that would intrude on First Amendment values.
It is true that neither of the Lanham Act’s infringement provisions
explicitly mentions commerciality. Still, this provision must mean
something more than that the mark is being used in commerce in the
constitutional sense, because the infringement provisions include a
separate Commerce Clause hook.
Although this case does not require us to hold that the commercial
speech doctrine is in all respects synonymous with the ”in connection
with” element, we think that doctrine provides much the best guid-
494 CHAPTER 6. TRADEMARK
ance in applying the Act.
Use of a protected mark as part of speech that does no more than
propose a commercial transaction thus plainly falls within the Lan-
Bolger: 463 U.S. 60 (1983) ham Act’s reach. Courts also look to the factors outlined in Bolger
v. Youngs Drug Products Corp.: whether the speech is an advertise-
ment; whether the speech references a particular good or service; and
whether the speaker (the alleged infringer) has a demonstrated eco-
nomic motivation for his speech.
In the context of trademark infringement, the Act’s purpose, as
noted, is to protect consumers from misleading uses of marks by com-
petitors. Thus if in the context of a sale, distribution, or advertise-
ment, a mark is used as a source identifier, we can confidently state
that the use is ”in connection with” the activity. Even the Second
Circuit, which rejected noncommerciality as an invariable defense to
Lanham Act liability, conceded that a ”crucial” factor is that the in-
fringer ”used the Mark not as a commentary on its owner, but instead
United We Stand: 128 F.3d 86 (2d Cir. as a source identifier.” United We Stand Am., Inc. v. United We Stand,
1997)
Am. New York, Inc.. The danger of allowing the ”in connection with”
element to suck in speech on political and social issues through some
strained or tangential association with a commercial or transactional
activity should thus be evident. Courts have uniformly understood
that imposing liability under the Lanham Act for such speech is rife
with the First Amendment problems.
III.
In finding that Radiance’s use of the NAACP’s marks was ”in con-
nection with” goods or services, the district court erred in several re-
spects. To begin, the court held that because the Radiance article ap-
peared in a Google search for the term ”NAACP,” it diverted ”Inter-
net users to Radiance’s article as opposed to the NAACP’s websites,”
which thereby created a connection to the NAACP’s goods and ser-
vices. But typically the use of the mark has to be in connection with
the infringer’s goods or services, not the trademark holder’s.
The district court proceeded to find that Radiance’s use of the
NAACP’s marks was also in connection with Radiance’s goods or
services. The court first found that there was a sufficient nexus ”with
Radiance’s own information services” because Radiance ”provided
information” on its website. That ruling, however, neuters the First
Amendment. The provision of mere ”information services” with-
out any commercial or transactional component is speech – nothing
more.
In the alternative, the court held that Radiance’s use of the
NAACP’s marks was in connection with goods or services, because
the use was ”part of social commentary or criticism for which they
solicit donations and sponsorship.” We need not address this point
E. INFRINGEMENT: PROHIBITED CONDUCT 495
with absolute pronouncements. Suffice it to say that the specific use
of the marks at issue here was too a enuated from the donation solic-
itation and the billboard campaign to support Lanham Act liability.
Although present on the article page, the Donate bu on was off to
the side and did not itself use the NAACP’s marks in any way. The
billboard campaign was displayed on a different page altogether. A
visitor likely would not perceive the use of the NAACP’s marks in the
article as being in connection with those transactional components of
the website.
Again, this is not to say that in all instances a solicitation by a non-
profit is immune from Lanham Act liability. A solicitation may sat-
isfy the ”in connection with” element if the trademark holder demon-
strates a sufficient nexus between the unauthorized use of the pro-
tected mark and clear transactional activity. Such a nexus may be
present, for example, where the protected mark seems to denote the
recipient of the donation. However, where, as here, the solicitations
are not closely related to the specific uses of the protected marks, we
are compelled to conclude that the district court erred in ruling that
the ”in connection element” was met.
IV.
The district court further held that Radiance diluted the ”NAACP”
and ”National Association for the Advancement of Colored People”
trademarks by tarnishing them. We respectfully disagree. Radiance’s The substance of dilution law will be
use of the marks was undeniably to criticize the NAACP’s perceived discussed in due course. For now, the
important part is that it is subject to an
position on abortion, thus falling squarely within the statute’s explicit
explicit statutory commerciality thresh-
exclusions. old.
The final exclusion protects ”[a]ny noncommercial use of a mark.”. 15 U.S.C. § 1125(c)(3)(C)
The term ”noncommercial” refers to the First Amendment commer-
cial speech doctrine. Commercial speech is speech that does no more
than propose a commercial transaction.
The district court held that because Radiance ”offered various op-
portunities for visitors to donate to Radiance, pay to sponsor bill-
boards, secure license content, or erect state-specific webpages for
a fee,” the use of the NAACP’s marks was commercial. We think
however, that the above [Bolger] factors mitigate against a finding of
commerciality. The article in contention was not an advertisement.
Nowhere in the piece did it offer the reader anything for sale. The
article did not even mention Radiance’s services. The only point ”Ra-
diance” even appeared in the article was as part of a passing refer-
ence to conservatives that the NAACP purportedly targets. The fact
that the websites provided opportunities to engage in financial trans-
actions does not demonstrate that the article itself was commercial.
The key here is the viewpoint of a reasonable reader. A person nav-
igating to the article, even if through a Google search for ”NAACP,”
496 CHAPTER 6. TRADEMARK
is highly unlikely to read the article as advertising a Radiance service
or proposing a transaction of any kind.
Trademark law in general and dilution in particular are not
proper vehicles for comba ing speech with which one does not agree.
Trademarks do not give their holders under the rubric of dilution the
rights to stymie criticism. Criticism of large and powerful entities in
particular is vital to the democratic function. Under appellee’s view,
many social commentators and websites would find themselves vic-
tims of litigation aimed at silencing or altering their message, because,
as noted, ”it is often virtually impossible to refer to a particular prod-
uct for purposes of comparison, criticism, point of reference or any
other such purpose without using the mark.” New Kids on the Block
The article in this case was harsh. But that did not forfeit its author’s
First Amendment liberties. The most scathing speech and the most
disputable commentary are also the ones most likely to draw their in-
tended targets’ ire and thereby a ract Lanham Act litigation. It is for
this reason that law does not leave such speech without protection.
2 Theories of Confusion
Now we begin in earnest our safari to observe exotic forms of liability
in their natural habitat. We have already met point-of-sale confusion
about source.
a Reverse Confusion
Standard (”forward”) confusion involves consumers confused into
thinking that the defendant’s goods came from the plaintiff. But
what if consumers are confused into thinking that the plaintiff ’s goods
came from the defendant? How could that even happen? Read on.
§ 20 cmt. f Restatement (Third) of Unfair Competition
Standard of Infringement
"Potential customers came to Big O
f. Reverse confusion. – In the typical case of trademark infringement,
dealers asking for BIGFOOT tires as a re-
sult of Goodyear's commercials. Big O
consumers are led to believe that the goods sold by the subsequent
salesmen then had to explain the differ- user of the mark are associated in some manner with the trademark
ence in the construction of these tires." owner. However, in some cases the subsequent user’s promotion of
Big O Tire Dealers, Inc. v. Goodyear Tire & the mark may so overwhelm the use by the prior user that most pur-
Rubber Co., 408 F. Supp. 1219 (D. Colo.
chasers come to associate the mark with the subsequent user. This
1976). "If consumers believe that Doc's
runs Fuddruckers, and they are disap- can result in reverse confusion – purchasers are likely to believe that
pointed with the quality of Doc's food the goods sold by the prior user are actually those of the subsequent
or service, they may be deterred from user.
patronizing Fuddruckers." Fuddruckers, The injury to the trademark owner caused by a likelihood of re-
Inc. v. Doc's B.R. Others, Inc.826 F.2d 837
verse confusion is more subtle than that resulting from direct confu-
(9th Cir. 1987). Are these harms plau-
sible? Are they really harms? Should sion. Reverse confusion does not ordinarily threaten a direct diver-
trademark law try to prevent them? sion of trade from the trademark owner; indeed, the owner’s sales
E. INFRINGEMENT: PROHIBITED CONDUCT 497
may benefit to some extent from the infringer’s promotion of the
mark. On the other hand, because of the infringer’s concurrent use of
the mark, the reputation of the trademark owner’s goods or services
among prospective purchasers is no longer within the owner’s exclu-
sive control. Failure to protect against reverse confusion would also
permit large subsequent users to undermine by extensive advertising
the investments of smaller firms in their trade symbols. Because these
potential injuries result from a likelihood of confusion as to the source
of goods or services, the creation of reverse confusion falls within the
traditional rules governing the infringement of trademarks.
Illustration:
8. A, a small tire manufacturer, sells BIGTRACK tires in a
regional market. Consumers in that market associate BIG-
TRACK with A. B, a prominent tire manufacturer, sub-
sequently begins selling BIGTRACK tires and engages
in an extensive promotional campaign on national televi-
sion. B’s advertising overwhelms A’s promotional efforts
with the result that consumers encountering A’s tires now
think that the tires are actually produced by B. B is subject
to liability to A under the rule stated in this Section.
b Initial Interest Confusion
Standard point of sale confusion takes place at the moment of pur-
chase. What if consumers are confused before then?
Grotrian, Helfferich, Schultz, Th. Steinweg Nachf v. Steinway & Sons
523 F.2d 1331 (2d Cir. 1975)
The issue here is not the possibility that a purchaser would buy a
Grotrian-Steinweg thinking it was actually a Steinway or that Gro-
trian had some connection with Steinway and Sons. The harm
to Steinway, rather, is the likelihood that a consumer, hearing the
”Grotrian-Steinweg” name and thinking it had some connection with
”Steinway”, would consider it on that basis. The ”Grotrian-Steinweg”
name therefore would a ract potential customers based on the rep-
utation built up by Steinway in this country for many years. Misled
into an initial interest, a potential Steinway buyer may satisfy him-
self that the less expensive Grotrian-Steinweg is at least as good, if
not be er, than a Steinway. Deception and confusion thus work to
appropriate defendant’s good will.
Brookfield Communications v. West Coast Entertainment 174 F.3d 1036 (9th Cir. 1999)
Suppose West Coast’s competitor (let’s call it ”Blockbuster”) puts up
a billboard on a highway reading–”West Coast Video: 2 miles ahead
at Exit 7”– where West Coast is really located at Exit 8 but Blockbuster
is located at Exit 7. Customers looking for West Coast’s store will pull
498 CHAPTER 6. TRADEMARK
off at Exit 7 and drive around looking for it. Unable to locate West
Coast, but seeing the Blockbuster store right by the highway entrance,
they may simply rent there. Even consumers who prefer West Coast
may find it not worth the trouble to continue searching for West Coast
since there is a Blockbuster right there. Customers are not confused in
the narrow sense: they are fully aware that they are purchasing from
Blockbuster and they have no reason to believe that Blockbuster is
related to, or in any way sponsored by, West Coast. Nevertheless, the
fact that there is only initial consumer confusion does not alter the fact
that Blockbuster would be misappropriating West Coast’s acquired
Blockbuster: 869 F. Supp. 505 (E.D. Mich goodwill. See Blockbuster Entertainment Group v. Laylco, Inc. (finding
1994) trademark infringement where the defendant, a video rental store,
a racted customers’ initial interest by using a sign confusingly to its
competitor’s even though confusion would end long before the point
of sale or rental).
Hearts on Fire Company, LLC v. Blue Nile, Inc.
603 F. Supp. 2d 274 (D. Mass. 2009)
[This was a keyword advertising case. Consult Rescuecom for a de-
scription of keyword advertising. The plaintiff alleged that the de-
fendant purchased its HEARTS ON FIRE trademark as a keyword
on the Webcrawler search engine.]
Rarely are cases so clear as the Ninth Circuit’s billboard – particu-
larly on the internet – and certainly not this one.
Infringement is not nearly so obvious from this vantage point.
Rather than a misleading billboard, this analogy is more akin to a
menu – one that offers a variety of distinct products, all keyed to the
consumer’s initial search. Sponsored linking may achieve precisely
this result, depending on the specific product search and its context.
When a consumer searches for a trademarked item, she receives a
search results list that includes links to both the trademarked prod-
uct’s website and a competitor’s website. Where the distinction be-
tween these vendors is clear, she now has a simple choice between
products, each of which is as easily accessible as the next. If the
consumer ultimately selects a competitor’s product, she has been di-
verted to a more a ractive offer but she has not been confused or
misled.9 While she may have go en to the search-results list via the
trademarked name, once there, the advertised products are easily dis-
tinguished.
In much the same way, keyword purchasing may, in many cases,
be analogized to a drug store that typically places its own store-
9
Consider, for instance, if Pepsi were to purchase sponsored links to its website
triggered by an internet user’s search for the ”Coca-Cola” trademark. Coca-Cola
would have difficulty suing Pepsi for infringement on an initial interest theory be-
cause these two products are widely recognized as competitors and, accordingly,
the likelihood of consumer confusion is exceedingly small.
E. INFRINGEMENT: PROHIBITED CONDUCT 499
brand generic products next to the trademarked products they em-
ulate in order to induce a customer who has specifically sought out
the trademarked product to consider the store’s less-expensive alter-
native. The generic product capitalizes on the recognizable brand
name but the consumer benefits by being offered a lower-cost prod-
uct. At no point is the consumer confused about the alternatives
presented to her. The goodwill invested in the protected mark re-
mains undisturbed while the consumer reaps the benefit of compet-
ing goods. Trademark infringement would seem to be unsupportable
in this scenario. Mere diversion, without any hint of confusion, is not
enough.
To be sure, the sponsored links appearing on a search-results page
will not always be a menu of readily distinguished alternatives. With
the intense competition for internet users’ a ention and mouseclicks,
online merchants may well be tempted to blur these distinctions, hop-
ing to create and capitalize on initial consumer confusion. Such con-
duct undoubtedly begins to sound in trademark infringement. Thus,
where a plaintiff has plausibly alleged some consumer confusion,
even at an initial stage of his product search, the question is a far
closer one.
Based on the twin goals of trademark protection, the Court con-
cludes that initial interest confusion can support a claim under the
Lanham Act – but only where the plaintiff has plausibly alleged that
consumers were confused, and not simply diverted. Many cases, in-
cluding this one, will fall somewhere between the incarnations of
so-called initial interest confusion discussed above – the misleading
billboard or the choice-enhancing menu. The Court’s task is to dis-
tinguish between them. As a preliminary ma er, the Court agrees
with the many scholars who find the deceptive billboard analogy of-
ten inapt in the internet context. Unlike the deceived shopper who
is unlikely to get back on the highway, the internet consumer can
easily click the ‘back’ bu on on her web browser and return almost
instantly to the search results list to find the sought-after brand. Her
added search costs, in other words, may often be very low while her
comparative choice among products is greatly expanded.
The crucial question in these cases is one of degree: Whether the
consumer is likely confused in some sustained fashion by the spon-
sored link and the defendant’s website, or whether the link serves in-
stead as a benign and even beneficial form of comparison shopping.
The menu analogy described above – where the competing products
are clearly distinguished – is not, in and of itself, truly a case of con-
fusion at all, and therefore cannot support an infringement claim. In
fact, in order for a plaintiff pleading initial interest confusion to pre-
vail, that confusion must be more than momentary and more than a
”mere possibility.” Grotrian As with any alleged trademark violation,
500 CHAPTER 6. TRADEMARK
plaintiffs must show a genuine and substantial likelihood of confu-
sion.
This principle was implicit in the bricks-and-mortar cases that laid
the groundwork for initial interest confusion as well as the Ninth Cir-
cuit’s billboard analogy, which assumed that the deceived shopper,
Mobil Oil: 818 F.2d 254 (2d Cir. 1987) once diverted, would not get back on the highway. See Mobil Oil Corp.
v. Pegasus Petroleum Corp. (competitor’s logo confused oil traders into
investing a considerable amount of time and effort into pre-sale ne-
gotiations with the defendant); Grotrian (similar mark would entice
even sophisticated consumers to consider defendant’s pianos, even if
any confusion was resolved prior to any purchase). Where, as here, a
plaintiff has alleged a plausible likelihood of confusion based on the
overall context in which a consumer performs his internet search, he
has stated a claim for trademark infringement and may proceed on
an initial interest theory.
c Post-Sale Confusion
Standard point of sale confusion takes place at the moment of pur-
chase. What if consumers are confused after then?
General Motors Corp. v. Keystone Automotive Industries, Inc.
453 F.3d 351 (6th Cir. 2006)
GM, currently the world’s largest automaker, owns registered trade-
marks in the Chevrolet ”bow tie” design and the ”GMC” design. The
instant case arose out of Tong Yang’s manufacturing and Keystone’s
distribution of replacement grilles with ”placeholders” bearing these
two designs.
For Chevrolets, the placeholder is a recessed space on the front of
the grille in the shape of a bow tie in which a heavy plastic GM ”bow
tie” emblem is inserted. Each emblem is a separate part always pur-
chased from GM and is secured to the placeholder with studs or pins
extending from the back of the emblem so as to pass through holes
in the placeholder. After inserted and secured in the placeholder of
a Chevrolet grille, the ”bow tie” emblem partially or wholly fills the
”bow tie” recess. [Similarly for GMC vehicles.]
A. Point-of-Sale Confusion
Likelihood of confusion at the point of sale involves a purchaser’s
confusion as to a product’s origin or sponsorship occurring at the
Tong Yang Chevrolet grille placeholder
time of purchase. The points of sale for most of Tong Yang’s grilles
are collision repair shops, but some are sold directly to individuals
over the internet. We need not exhaustively apply the eight-factor test
to reach the rather obvious conclusion that there is no likelihood of
confusion at the point of sale because buyers are expressly informed
that they are not purchasing GM grilles.
E. INFRINGEMENT: PROHIBITED CONDUCT 501
In Ferrari S.P.A. Esercizio v. Roberts, this Court noted that there
was no likelihood of point-of-sale confusion where a manufacturer
of ”knockoff” Ferraris informed his purchasers that his significantly
cheaper cars were not genuine Ferraris. Similarly, customers know-
ing they are purchasing a knockoff designer purse or Rolex watch
simply do not confuse the counterfeit with the original.
Likewise, in the instant case, no purchaser has reason to be con-
fused as to the origin of the replacement grilles. Collision repair
shops ordering Tong Yang parts do so intentionally and generally
at the bidding of insurance companies because non-original equip-
ment is less expensive and reduces the cost of repairing a vehicle.
Moreover, GM grilles are made by Siegel-Robert, Inc., and carry the
molded le ers ”SRI” to identify their origin, whereas Tong Yang
grilles are marked ”OTN” and ”Made in Taiwan.” In addition, Tong
Yang grilles are shipped in boxes and packaging markedly different
from those containing GM grilles with conspicuous logos of Tong
Yang and/or Keystone. The invoice accompanying Tong Yang parts
conspicuously carries the following disclaimer:
THESE REPLACEMENT PARTS ARE NOT MANUFAC-
TURED BY THE ORIGINAL MANUFACTURER. THESE
PARTS ARE REPLACEMENT FOR THE OEM PARTS,
AND MANUFACTURED IN TAIWAN FOR NORTH
AMERICA MARKET.
An automobile owner would have to possess complete ignorance of
this disclaimer, her insurance contract, and ordinary automobile re-
pair practices to be confused as to the origin of a Tong Yang grille
when ge ing her vehicle repaired. Individuals purchasing grilles di-
rectly from Keystone over the internet receive the same source in-
formation as collision repair shops and likewise could scarcely be
confused. In short, the transparent and conspicuous indications that
Tong Yang manufactured its grilles make confusion at the point of
sale all but impossible.
B. Downstream Confusion
In addition to point-of-sale confusion, the Sixth Circuit recognizes
that a likelihood of downstream confusion, also called ”post-sale”
confusion, is actionable. Thus, injection of knockoffs into the stream
of commerce may lead to a likelihood of confusion among the general
public.
Our review of cases discussing the harm of injecting knockoffs
into the stream of commerce further signals the likelihood of down-
stream confusion in this case. Even without point-of-sale confusion,
knockoffs can harm the public and the original manufacturer in a
number of ways, including: (1) the viewing public, as well as sub-
502 CHAPTER 6. TRADEMARK
sequent purchasers, may be deceived if expertise is required to dis-
tinguish the original from the counterfeit; (2) the purchaser of an
original may be harmed if the widespread existence of knockoffs de-
creases the original’s value by making the previously scarce common-
place; (3) consumers desiring high quality products may be harmed if
the original manufacturer decreases its investment in quality in order
to compete more economically with less expensive knockoffs; (4) the
original manufacturer’s reputation for quality may be damaged if in-
dividuals mistake an inferior counterfeit for the original; (5) the origi-
nal manufacturer’s reputation for rarity may be harmed by the influx
of knockoffs onto the market; and (6) the original manufacturer may
be harmed if sales decline due to the public’s fear that what they are
purchasing may not be the original. On the other hand, courts should
be wary of overprotecting public domain ideas and works whose ex-
ploitation can lead to economic efficiency, greater competition, and
lower costs for consumers.2
The instant case carries potential for downstream confusion and
corresponding harm to GM and the public. Unaided by the defen-
dants’ conspicuously marked packaging, the invoice disclaimer, or a
collision shop’s expertise, the viewing public could mistake a Tong
Yang grille for a GM grille. Such confusion could damage GM’s rep-
utation for quality if the public associates any inferior a ributes (e.g.,
improper fit or cracking) of Tong Yang’s grilles with GM. Other types
of possible downstream harm, such as that resulting from a prod-
uct’s reduced scarcity, however, are largely inapplicable to this case.
Nonetheless, visibility of the placeholder after the automobile is re-
paired and returned to the road may harm the public and GM.
If the placeholder cannot be seen after the Chevrolet ”bow tie”
or ”GMC” emblem is affixed, the wholly hidden placeholder cannot
cause downstream confusion as to origin or sponsorship. After all,
Polo Fashions: 816 F.2d 145 (4th Cir that which defies perception cannot confuse. Cf. Polo Fashions, Inc. v.
1987) Craftex, Inc. (In a suit involving knockoff Polo shirts, the placement
of the defendant’s mark inside the back of the neck of each shirt did
not prevent a likelihood of confusion stemming from the defendant’s
placement of the Polo trademark on the front of each shirt.).
The parties dispute whether the placeholder can be seen after the
emblem is secured. The District Court improperly resolved in favor
of the defendants this factual dispute regarding the visibility of the
placeholders after each emblem is affixed. If the placeholders remain
visible, the related question is raised whether the placeholders are
sufficiently visible to cause a likelihood of confusion. These genuine
2
It is worth emphasizing that GM seeks relief only under the laws of trademark
and unfair competition. Other legal theories, such as the laws of patent and trade
dress, also offer protection for certain a ributes of products.
E. INFRINGEMENT: PROHIBITED CONDUCT 503
disputes of material fact render summary judgment inappropriate, a
common disposition in evaluating likelihood of confusion.
3 Section 43(a)
Our safari continues with Section 43(a) of the Lanham Act.
Lanham Act
(a) Civil action. – 15 U.S.C. § 1125
(1) Any person who, on or in connection with any goods or Lanham Act § 43
services, or any container for goods, uses in commerce any False designations of origin, false de-
scriptions, and dilution forbidden
word, term, name, symbol, or device, or any combination
thereof, or any false designation of origin, false or mislead-
ing description of fact, or false or misleading representa-
tion of fact, which –
(A) is likely to cause confusion, or to cause mistake, or to
deceive as to the affiliation, connection, or association
of such person with another person, or as to the origin,
sponsorship, or approval of his or her goods, services,
or commercial activities by another person …
shall be liable in a civil action by any person who be-
lieves that he or she is or is likely to be damaged by such
act.
What does Section 43(a) do? Quite a lot: "Homer: Are you saying you're never
going to eat any animal again? What
• It provides a federal cause of action for infringement even of about bacon? Ham? Pork chops? Lisa:
unregistered marks. Dad, those all come from the same an-
• It provides a federal cause of action for infringement of trade imal. Homer: Ooh, yeah, right, Lisa. A
wonderful, magical animal." The Simp-
dress.
sons episode 3F03 ("Lisa the Vegetar-
• It provides a federal cause of action for false advertising.defer ian"). Section 43(a) is the wonderful
them to the Design and False Advertising chapters, respectively. magical animal of intellectual property
law.
To be precise, the false advertis-
• It provides a federal cause of action for unfair competition. ing cause of action comes from
• It provides a federal cause of action for confusion about spon- § 43(a)(1)(B), while the present section
sorship or affiliation. discusses § 43(a)(1)(A). See Rebecca
Tushnet, Running the Gamut from A to B:
The first of these requires li le discussion. The second and third re- Federal Trademark and False Advertising
quire so much discussion that we We consider the fourth and fifth in Law, 159 U. Pa. L. Rev. 1305 (2011).
this subsection, along with another theory of liability not supported
by Section 43(a): failure to a ribute (or ”reverse passing off”).
504 CHAPTER 6. TRADEMARK
a Unfair Competition
To understand the unfair-competition tort and how it differs from
trademark infringement, a page of history is helpful.
Margreth Barrett
43 Wake Forest L. Rev. 893 (2008)
Finding Trademark Use
At common law in the late 1800s and early 1900s, courts distinguished
between ”technical trademarks,” which were protected through a
suit for trademark infringement, and ”trade names” (or ”secondary
meaning marks”), which were protected (if at all) through a suit for
unfair competition.
Technical trademarks were what we would call ”inherently dis-
tinctive” marks today – words and symbols that were ”fanciful, ar-
bitrary, unique, distinctive, and nondescriptive in character,” and
which the claimant had physically affixed to articles of merchan-
dise. Trade names, by contrast, consisted of words and symbols that
described their user’s product or service, constituted geographical
terms, personal names, or designations common to the trade, or con-
stituted business or corporate names.
The courts distinguished between technical trademarks and sec-
ondary meaning marks on the reasoning that a business could legiti-
mately appropriate a fanciful or arbitrary word or symbol to its sole,
exclusive use, with no harm to others. A technical trademark, by defi-
nition, was either made up (and thus had no meaning) or had a mean-
ing that bore no descriptive or other logical relationship to the user’s
product. Accordingly, competitors had no legitimate reason to adopt
the same word or symbol to identify or describe their similar goods.
If they did so, they likely did it for the purpose of perpetrating a fraud
on the mark owner or the public. Their action could be characterized
as an invasion of the first user’s property rights.
In contrast, trade names consisted of descriptive, surname, geo-
graphic, and other words and symbols commonly used in the trade,
such as colors, squares, circles, stripes, or other common shapes. Nu-
merous competitors might legitimately want to use such words and
symbols in their own marketing activities. A business that adopted
such a word or symbol as its mark or name had no right to expect
exclusivity.
When competitors intentionally used a secondary meaning mark
for the purpose of confusing consumers about the source of their
goods, thus diverting trade from an earlier user, courts would inter-
vene – not on the ground that the plaintiff had property rights in the
word or symbol (as might be the case with regard to a technical trade-
mark), but because the defendant/competitor was engaged in fraud-
ulent conduct.
E. INFRINGEMENT: PROHIBITED CONDUCT 505
Plaintiffs in secondary meaning infringement cases generally had
to demonstrate that the defendant acted with fraudulent intent, while
courts would presume fraud in technical trademark infringement
cases.
Today, the Lanham Act for the most part does not draw any distinc-
tions in the protections it accords to inherently distinctive marks and
to marks with acquired distinctiveness. They are all protected un-
der the same likelihood-of-confusion standard. That would seem to
obliterate the need for a separate unfair-competition tort. Not quite
so fast.
William R. Warner & Co. v. Eli Lilly & Co.
265 U.S. 526 (1924)
Respondent is a corporation engaged in the manufacture and sale of
pharmaceutical and chemical products. In 1899 it began and has ever
since continued to make and sell a liquid preparation of quinine, in
combination with other substances, including yerba-santa and choco-
late, under the name of Coco-Quinine. Petitioner also is a pharma-
ceutical and chemical manufacturer[, which] in 1906 began the man-
ufacture of a liquid preparation which is substantially the same as
respondent’s preparation and which was put upon the market under
the name of Quin-Coco.
This suit was brought in the Federal District Court for the East-
ern District of Pennsylvania by respondent to enjoin petitioner from
continuing to manufacture and sell the preparation if flavored or col-
ored with chocolate; and also from using the name Quin-Coco, on the
ground that it was an infringement of the name Coco-Quinine, to the
use of which respondent had acquired an exclusive right.
First. We agree with the courts below that the charge of infringe- Coco-Quinine advertisement
ment was not sustained. The name Coco-Quinine is descriptive of
the ingredients which enter into the preparation. The same is equally
true of the name Quin-Coco. A name which is merely descriptive
of the ingredients, qualities or characteristics of an article of trade
cannot be appropriated as a trademark and the exclusive use of it af-
forded legal protection. The use of a similar name by another to truth-
fully describe his own product does not constitute a legal or moral
wrong, even if its effect be to cause the public to mistake the origin or
ownership of the product.
Second. The issue of unfair competition, on which the courts be-
low differed, presents a question of more difficulty.
It is apparent, from a consideration of the testimony, that the ef-
forts of petitioner to create a market for Quin-Coco were directed not
so much to showing the merits of that preparation as they were to
506 CHAPTER 6. TRADEMARK
demonstrating its practical identity with Coco-Quinine, and, since it
was sold at a lower price, inducing the purchasing druggist, in his
own interest, to substitute, as far as he could, the former for the lat-
ter. In other words, petitioner sought to avail itself of the favorable
repute which had been established for respondent’s preparation in
order to sell its own. Petitioner’s salesmen appeared more anxious to
convince the druggists with whom they were dealing that Quin-Coco
was a good substitute for Coco-Quinine and was cheaper, than they
were to independently demonstrate its merits. The evidence estab-
lishes by a fair preponderance that some of petitioner’s salesmen sug-
gested that, without danger of detection, prescriptions and orders for
Coco-Quinine could be filled by substituting Quin-Coco. More often,
however, the feasibility of such a course was brought to the mind of
the druggist by pointing out the identity of the two preparations and
the enhanced profit to be made by selling Quin-Coco because of its
lower price. There is much conflict in the testimony; but on the whole
it fairly appears that petitioner’s agents induced the substitution, ei-
ther in direct terms or by suggestion or insinuation. Sales to druggists
are in original bo les bearing clearly distinguishing labels and there
is no suggestion of deception in those transactions; but sales to the
ultimate purchasers are of the product in its naked form out of the
bo le; and the testimony discloses many instances of passing off by
retail druggists of petitioner’s preparation when respondent’s prepa-
ration was called for. That no deception was practiced on the retail
dealers, and that they knew exactly what they were ge ing is of no
consequence. The wrong was in designedly enabling the dealers to
palm off the preparation as that of the respondent. One who induces
another to commit a fraud and furnishes the means of consummating
it is equally guilty and liable for the injury.
Blinded Veterans Association v. Blinded American Veterans
872 F.2d 1035 (D.C. Cir 1989)
Foundation
(Ginsburg, J.)
The Blinded Veterans Association (BVA or the Association) sought
to enjoin the Blinded American Veterans Foundation (BAVF or the
Foundation) from using the words ”blinded” and ”veterans” in its
name and from using the initials ”BAV” as an acronym. We hold that
BVA’s name is not a protectable trademark because the term ”blinded
veterans” is generic. BVA, however, may be entitled to protection
against BAVF’s passing itself off as BVA.
Appellee Blinded Veterans Association is a nonprofit organization
founded in 1945 by a group of blinded World War II veterans. Appel-
lant BAVF is a nonprofit District of Columbia corporation founded in
September 1985 by three former officials of BVA. In 1986, BAVF ap-
plied to 552 local campaign organizations involved in the Combined
Federal Campaign (CFC). Those organizations listed BAVF, alphabet-
E. INFRINGEMENT: PROHIBITED CONDUCT 507
ically ahead of BVA, as a prospective recipient of CFC funds. Despite
its lack of significant accomplishments at that point, BAVF did rather
well in its initial fundraising foray: the Foundation’s 1986 income to-
talled between $35,000 and $40,000, half from CFC pledges and half
from corporate contributions.
If the name of one manufacturer’s product is generic, a competi-
tor’s use of that name, without more, does not give rise to an unfair
competition claim under section 43(a) of the Lanham Act. Neverthe-
less, such a claim might be supportable if consumer confusion or a
likelihood of consumer confusion arose from the failure of the defen-
dant to adequately identify itself as the source of the product.
The subsequent competitor cannot be prevented from using the
generic term to denote itself or its product, but it may be enjoined
from passing itself or its product off as the first organization or its
product. Thus, a court may require the competitor to take whatever
steps are necessary to distinguish itself or its product from the first
organization or its product. In the paradigm case, Kellogg Co. v. Na- Kellogg: 305 U.S. 111 (1938)
tional Biscuit Co., for example, the Supreme Court held that the term
”shredded wheat” is generic; the National Biscuit Company therefore
was not entitled to exclusive use of the term. Because National Biscuit
had been the only manufacturer of shredded wheat for many years,
however, the public had come to associate the product and the term
”shredded wheat” with that company. The Court therefore stated
that the Kellogg Company, which also produced a shredded wheat
cereal, could be required to ”use reasonable care to inform the public
of the source of its product.”19 See also, e.g., Singer Mfg. Co. v. June Mfg. Singer Mfg.: 163 U.S. 169 (1896)
Co. (holding that ”Singer” had become generic denotation of type of
sewing machine, but requiring that defendant not use the word on its
product or in advertisements ”without clearly and unmistakably stat-
ing ... that the machines are made by the defendant, as distinguished
from the sewing machines made by the Singer Manufacturing Com-
pany”); King-Seeley Thermos Co. v. Aladdin Indus., Inc. (finding ”ther- King-Seeley: 321 F.2d 577 (2d Cir. 1963)
mos” generic denotation of vacuum-insulated container, but affirm-
ing requirement that defendant distinguish its product from plain-
tiff’s by preceding ”thermos” with ”Aladdin’s,” by using only the
lower case ”t”, and by never using the words ”original” or ”genuine”
in describing its product); G.&C. Merriam Co. v. Saalfield (requiring Merriam: 198 F.369, 373-76 (6th Cir.
defendant to accompany generic term ”Webster’s Dictionary” with 1912)
sufficient explanation to avoid giving false impression that his book
was plaintiff’s).
Under the approach set forth in these cases, a court will not act
19
The Court then determined that Kellogg had sufficiently distinguished its prod-
uct by selling it in cartons different from National Biscuit’s in size, form, and color,
with a different label, a different number of biscuits in each carton, and the name
”Kellogg” displayed prominently.
508 CHAPTER 6. TRADEMARK
to remedy or prevent ”confusion generated by a mere similarity of
names. If a consumer confuses two manufacturers’ shredded wheat
cereal, for example, because both products share the same name
and the consumer has a general appetite for crunchy, pillow-shaped
wheat biscuits, there is no cause for judicial action. Such confusion
results merely from the manufacturers’ concurrent use of a generic
term to designate their products, and the late entrant into the shred-
ded wheat field cannot be said to have engaged in unfair competi-
tion. If, however, the consumer associates ”shredded wheat” with a
particular manufacturer, there is a risk that the consumer may erro-
neously assume that any product entitled ”shredded wheat” comes
from that manufacturer. A second manufacturer may increase the
risk of confusion by, for example, using a similar label, similar pack-
aging, misleading advertisements, or simply by failing to state the
product’s source. Only when there is a likelihood that the newcomer
might thus pass its product off as the original manufacturer’s may
a court require the newcomer to distinguish its product or to notify
consumers explicitly that its product does not come from the original
manufacturer.
Ultimately, to succeed on its passing off claim, BVA must prove
that the likely effect of BAVF’s actions is to induce the public to think
that BAVF is BVA. The evidence now in the record appears insuffi-
BVA logo, circa 2016
cient to establish this type of confusion. To prevail in this action, how-
ever, it is not enough for BVA to show confusion that is the natural
consequence of the two organizations’ use of generic names. What is
essential, we underscore, is evidence that people associate ”blinded
BAVF website banner, circa 2016
veterans” with BVA per se and that, because of specific actions by
BAVF that increase the risk of confusion, people are likely to think
BAVF is BVA.
We think it proper to permit the parties to submit additional evi-
dence trained on the question whether people are likely to think that
BAVF is actually BVA. It would fill out and sharpen the record to
prove (or disprove), for instance, that people who have contributed
to BVA in the past have contributed, or are likely to contribute, to
BAVF thinking it was BVA, or that people familiar with BVA’s long
service on behalf of blinded veterans are likely to think any group
with a name containing ”blinded veterans” or with the le ers ”B” ”A”
and ”V” in its logo is the same as, or is associated with, BVA.
If the district court, on remand, finds from the evidence that BAVF
is passing itself off as BVA, the court may order that BAVF distinguish
itself from BVA to avoid confusion. This case obviously differs from
Kellogg and other cases cited above because it involves the name of
an organization rather than the name of a particular product. This
difference precludes such a ready remedy as a aching the manufac-
turer’s name to the generic name of the product. The district court
E. INFRINGEMENT: PROHIBITED CONDUCT 509
could, however, require BAVF to a ach a prominent disclaimer to its
name alerting the public that it is not the same organization as, and is
not associated with, the Blinded Veterans Association. Alternatively,
the court could order that BAVF adopt another name containing the
term ”blinded veterans” that is less likely to confuse.
b False Endorsement
Another way that § 43(a) is useful to trademark owners is by supply-
ing a cause of action for the false suggestion of ”affiliation,” ”connec-
tion,” ”sponsorship” or ”approval.” Again, a li le history is useful.
At common law at the start of the 20th century, only trademark in-
fringements involving directly competing goods were actionable – a
rule following directly from the conceptual logic of technical trade-
mark infringement and unfair competition, which focused on the de-
fendant’s diversion of the plaintiff’s customers via deception.
As in Yale Electric, courts began to allow trademark infringement
suits against related but not directly competing goods. This had
two effects. First, it made relatedness of the goods into one of
the factors for the standard trademark-infringement likelihood-of-
confusion test. Second, it opened up a new and independent theory But see Mark A. Lemley & Mark
McKenna, Irrelevant Confusion, 62
of harm to the plaintiff, one not necessarily grounded in confusion
Stan. L. Rev. 412 (2010) ("We think
about source. Indeed, as in Conan Properties, the theory now works trademark law needs to refocus on
even against wholly different goods, where no reasonable consumer confusion that is actually relevant to
could think they originated from the plaintiff. There still must be purchasing decisions.")
a likelihood of confusion; it is just confusion about something else..
26 F.2d 972 (2d Cir. 1928)
Also watch out for the trademark defenses, which often limit liability
(Learned Hand, J.)
in such cases. Section 43(a) now incorporates this wider second un-
derstanding of confusion, which must be pleaded as a distinct cause
of action. The most controversial cases involve merchandising: use
of the trademark on apparel and other items purchased by people
who care about the mark because of what it signifies rather than as a
signal of who made the goods.
Yale Electric Corp. v. Robertson
The record contains many instances where the defendant’s buyers
did, or said that they should, suppose the plaintiff’s flash-lights to Defendant's YALE lock
be one of the defendant’s products, and it is extremely probable that
mistakes will continue unless the practice ceases.
Therefore, so far as we can see, only [one] point[] of law need be
considered: whether, in view of the fact that it makes no flash-lights
or ba eries, it may complain of the plaintiff’s use of its name. The
law of unfair trade comes down very nearly to this – as judges have
repeated again and again – that one merchant shall not divert cus-
tomers from another by representing what he sells as emanating from Plaintiff's YALE flashlight
510 CHAPTER 6. TRADEMARK
the second. This has been, and perhaps even more now is, the whole
Law and the Prophets on the subject, though it assumes many guises.
Therefore it was at first a debatable point whether a merchant’s good
will, indicated by his mark, could extend beyond such goods as he
sold. How could be lose bargains which he had no means to fill?
What harm did it do a chewing gum maker to have an ironmonger
use his trade-mark?
However, it has of recent years been recognized that a merchant
may have a sufficient economic interest in the use of his mark outside
the field of his own exploitation to justify interposition by a court. His
mark is his authentic seal; by it he vouches for the goods which bear
it; it carries his name for good or ill. If another uses it, he borrows
the owner’s reputation, whose quality no longer lies within his own
control. This is an injury, even though the borrower does not tarnish
it, or divert any sales by its use; for a reputation, like a face, is the
symbol of its possessor and creator, and another can use it only as a
mask. And so it has come to be recognized that, unless the borrower’s
use is so foreign to the owner’s as to insure against any identification
of the two, it is unlawful. The defendant need not permit another to
a ach to its good will the consequences of trade methods not its own.
Conan Properties, Inc. v. Conans Pizza, Inc.
752 F.2d 145 (5th Cir. 1985)
Conan Properties, Inc. (CPI) owns the literary property rights in the
fictional character CONAN THE BARBARIAN and licenses others
to use the character in various commercial and entertainment works.
CPI sued Conans Pizza, Inc. (Conans) for infringement of its fed-
eral trademark and for unfair competition and misappropriation of
its property under Texas common law.
The CONAN character was created in 1929 by Robert Howard.
But the character remained relatively dormant until the 1950’s, when
L. Sprague deCamp, a contemporary author, rediscovered and be-
gan writing books featuring CONAN THE BARBARIAN . As the title
might suggest, deCamp’s CONAN THE BARBARIAN series told the
tales of a gigantic, sword and ba le-ax wielding barbarian adventurer
who roamed the world in search of foes. Many of deCamp’s works
were illustrated by Frank Fraze a, an artist famous for his ”sword
and sorcery” style artwork. In 1970, the Howard estate licensed Mar-
vel Comics to publish a series of comic books featuring CONAN THE
BARBARIAN . To avoid litigation over who had rights in CONAN
THE BARBARIAN, the Howard estate and deCamp united their in-
terests in the CONAN character in 1976 and formed CPI. In that same
year the United States Patent and Trademark Office (USPTO) granted
CPI a federally registered trademark for the title CONAN THE BAR-
BARIAN for comic books.
E. INFRINGEMENT: PROHIBITED CONDUCT 511
Also in this same year, Sco Leist and Jerry Strader opened ”Co-
nans Pizza”, a restaurant in Austin, Texas.The restaurant’s menus,
signs, promotional material, specialty items, and general decor fea-
tured a barbarian-like man who closely resembled CPI’s CONAN
character. For example, Conans Pizza’s menus depicted a loincloth-
clad, sword wielding, sandal wearing, barbarian-like muscleman,
and they described one of the featured pizzas as the ”Savage, Bar-
baric, All the Way Pizza.” The owners decorated the restaurant with
dozens of reproductions of Frank Fraze a’s artwork, although only
a few of the reproductions actually represented CONAN THE BAR-
BARIAN.
To prevail on its trademark infringement and unfair competition
claims, CPI needed to demonstrate that Conans’ use of the CONAN
THE BARBARIAN mark and image was likely to create confusion
in the mind of the ordinary consumer as to the source, affiliation, or
sponsorship of Conans’ service and product. A nonexhaustive list
of factors to be considered in determining whether a likelihood of
confusion exists includes: (1) the type of trademark alleged to have
been infringed, (2) the similarity of design between the two marks, Conans Pizza interior, circa 2016
(3) similarity of the products or services, (4) the identity of the retail
outlets and purchasers, (5) the identity of the advertising medium uti-
lized, (6) the defendant’s intent, and (7) evidence of actual confusion.
Armco, Inc. v. Armco Burglar Alarms Co.. The absence or presence of
any one factor ordinarily is not dispositive; indeed, a finding of like-
lihood of confusion need not be supported by even a majority of the
seven factors.
We conclude that CPI presented sufficient evidence related to
these seven factors to permit the jury to find that Conans’ conduct
created a likelihood of confusion as to the source, sponsorship, or
affiliation of its service and product. The evidence adduced at trial
revealed that Conans was aware of the CONAN THE BARBARIAN
character prior to its adoption of the name Conans Pizza. Addition-
Conans Pizza logo, circa 2016
ally, Conans’ menus, advertising material, specialty items, and gen-
Armco: 693 F.2d 1155 (5th Cir. 1983)
eral decor featured a character unmistakably similar if not identical
to CONAN THE BARBARIAN.
Conans answers that no reasonable person could have believed
that its restaurants were related to CPI’s CONAN THE BARBAR-
IAN, since the products and services each provided were different.
We must disagree. Although CPI never licensed any entity to use
its mark in connection with restaurant services, ordinary consumers
may well believe that Conans was in fact licensed by CPI. At the trial
CPI presented evidence of numerous cartoon and other characters
whose names, marks, or images were used in extensive licensing pro-
grams to promote everything from children’s toys to fast-food restau-
rants. These characters included SNOOPY, POPEYE, DICK TRACY,
512 CHAPTER 6. TRADEMARK
PETER PAN, E.T., and ROY ROGERS. Many of today’s consumers
expect such endorsements and act favorably toward them. It is rea-
sonable to assume, as the jury found, that ordinary consumers who
patronized Conans Pizza and experienced the pervasive, inescapable
aura of CONAN THE BARBARIAN in those restaurants were likely
to believe that the restaurants were in some way licensed by or affili-
ated with CPI. We therefore leave undisturbed the jury’s findings of
trademark infringement and unfair competition.
International Order of Job's Daughters v. Lindeburg & Co.
633 F.2d 912 (9th Cir. 1980)
Appellee, the International Order of the Daughters of Job (Job’s
Daughters), sued appellant Lindeburg and Co. (Lindeburg), for
trademark infringement arising out of Lindeburg’s manufacture and
sale of jewelry bearing the Job’s Daughters insignia.
Job’s Daughters is a young women’s fraternal organization. Since
its establishment in 1921 it has used its name and emblem1 as collec-
tive marks. Since its inception Job’s Daughters has licensed at least
one jeweler to produce jewelry for it. Job’s Daughters sells some
of the licensed jewelry directly to its members. Jewelry bearing the
name or emblem is also sold by approximately 31,000 retailers across
the nation. Most of these retailers presumably have no connection
with the Job’s Daughters organization. Some sell jewelry manufac-
tured by Job’s Daughters’ licensees; others sell jewelry manufactured
by jewelers not licensed by the organization.
Lindeburg makes and sells fraternal jewelry. In 1954 it began sell-
ing jewelry and related items bearing the Job’s Daughters insignia.
Job's Daughters emblem In 1957 Lindeburg asked the Job’s Daughters trademark commi ee
to designate it an ”official jeweler.” The commi ee refused and in
1964 and 1966 asked Lindeburg to stop manufacturing and selling
unlicensed jewelry. Lindeburg did not comply with this request. In
1973 Lindeburg again sought permission to act as an official jeweler
for Job’s Daughters. Permission was granted for one year and then
withdrawn.
The name JOB’S DAUGHTERS and the Job’s Daughters insignia
are indisputably used to identify the organization, and members of
Lindeburg jewelry Job’s Daughters wear the jewelry to identify themselves as members.
In that context, the insignia are trademarks of Job’s Daughters. But
in the context of this case, the name and emblem are functional aes-
thetic components of the jewelry, in that they are being merchandised
on the basis of their intrinsic value, not as a designation of origin or
sponsorship.
It is not uncommon for a name or emblem that serves in one con-
1
The emblem consists of a representation of three girls within a double triangle.
The girls carry a dove, an urn, and a cornucopia. Between the bases of the two
triangles are the words ”Iyob Filiae,” the Latin translation of ”Daughters of Job.”
E. INFRINGEMENT: PROHIBITED CONDUCT 513
text as a collective mark or trademark also to be merchandised for
its own intrinsic utility to consumers. We commonly identify our-
selves by displaying emblems expressing allegiances. Our jewelry,
clothing, and cars are emblazoned with inscriptions showing the or-
ganizations we belong to, the schools we a end, the landmarks we
have visited, the sports teams we support, the beverages we imbibe.
Although these inscriptions frequently include names and emblems
that are also used as collective marks or trademarks, it would be naive
to conclude that the name or emblem is desired because consumers
believe that the product somehow originated with or was sponsored
by the organization the name or emblem signifies.
Job’s Daughters relies on Boston Professional Hockey Ass’n, Inc. v. Boston Hockey: 510 F.2d 1004 (5th Cir.
Dallas Cap & Emblem Mfg., Inc., in which the Boston Bruins and other 1975)
National Hockey League clubs brought a trademark infringement
suit against a company that sold replicas of the NHL team emblems.
The Fifth Circuit, applying the Lanham Act infringement test and fo-
cusing on the ”likelihood of confusion,” found infringement:
The confusion or deceit requirement is met by the fact that
the defendant duplicated the protected trademarks and
sold them to the public knowing that the public would
identify them as being the teams’ trademarks. The cer-
tain knowledge of the buyer that the source and origin of
the trademark symbols were the plaintiffs satisfies the re-
quirement of the act. The argument that confusion must
be as to the source of the manufacture of the emblem it-
self is unpersuasive, where the trademark, originated by
the team, is the triggering mechanism for the sale of the
emblem.
We reject the reasoning of Boston Hockey
Interpreted expansively, Boston Hockeyholds that a trademark’s
owner has a complete monopoly over its use in commercial merchan-
dising. But our reading of the Lanham Act and its legislative history
reveals no congressional design to bestow such broad property rights
on trademark owners. Its scope is much narrower: to protect con-
sumers against deceptive designations of the origin of goods and, con-
versely, to enable producers to differentiate their products from those
of others. The Boston Hockey decision transmogrifies this narrow pro-
tection into a broad monopoly. It does so by injecting its evaluation
of the equities between the parties and of the desirability of bestow-
ing broad property rights on trademark owners. A trademark is, of
course, a form of business property. But the ”property right” or pro-
tection accorded a trademark owner can only be understood in the
context of trademark law and its purposes. A trademark owner has a
property right only insofar as is necessary to prevent consumer confu-
514 CHAPTER 6. TRADEMARK
sion as to who produced the goods and to facilitate differentiation of
the trademark owner’s goods. The Boston Hockey court decided that
broader protection was desirable. In our view, this extends the pro-
tection beyond that intended by Congress and beyond that accorded
by any other court.
Our holding does not mean that a name or emblem could not
serve simultaneously as a functional component of a product and a
trademark. That is, even if the Job’s Daughters’ name and emblem,
when inscribed on Lindeburg’s jewelry, served primarily a functional
purpose, it is possible that they could serve secondarily as trade-
marks if the typical customer not only purchased the jewelry for its
intrinsic functional use and aesthetic appeal but also inferred from
the insignia that the jewelry was produced, sponsored, or endorsed
by Job’s Daughters. We recognize that there is some danger that the
consumer may be more likely to infer endorsement or sponsorship
when the consumer is a member of the group whose collective mark
or trademark is being marketed. Accordingly, a court must closely
examine the articles themselves, the defendant’s merchandising prac-
tices, and any evidence that consumers have actually inferred a con-
nection between the defendant’s product and the trademark owner.
We conclude from our examination of the trial judge’s findings
and of the underlying evidence that Lindeburg was not using the
Job’s Daughters name and emblem as trademarks. The insignia were
a prominent feature of each item so as to be visible to others when
worn, allowing the wearer to publicly express her allegiance to the
organization. Lindeburg never designated the merchandise as ”of-
ficial” Job’s Daughters’ merchandise or otherwise affirmatively indi-
cated sponsorship. Job’s Daughters did not show a single instance
in which a customer was misled about the origin, sponsorship, or
endorsement of Lindeburg’s jewelry, nor that it received any com-
plaints about Lindeburg’s wares. Finally, there was evidence that
many other jewelers sold unlicensed Job’s Daughters jewelry, imply-
ing that consumers did not ordinarily purchase their fraternal jewelry
from only ”official” sources. We conclude that Job’s Daughters did
not meet its burden of proving that a typical buyer of Lindeburg’s
merchandise would think that the jewelry was produced, sponsored,
or endorsed by the organization. The name and emblem were func-
tional aesthetic components of the product, not trademarks. There
could be, therefore, no infringement.
c Failure to Attribute
Section 43(a) is not infinitely elastic.
Dastar Corp. v. Twentieth Century Fox Film Corp
539 U.S. 23 (2003)
E. INFRINGEMENT: PROHIBITED CONDUCT 515
In this case, we are asked to decide whether § 43(a) of the Lanham
Act prevents the unaccredited copying of a work.
I
In 1948, three and a half years after the German surrender at Reims,
General Dwight D. Eisenhower completed Crusade in Europe, his writ-
ten account of the allied campaign in Europe during World War II.
Doubleday published the book, registered it with the Copyright Of-
fice in 1948, and granted exclusive television rights to an affiliate
of respondent Twentieth Century Fox Film Corporation (Fox). Fox,
in turn, arranged for Time, Inc., to produce a television series, also
called Crusade in Europe, based on the book, and Time assigned its
copyright in the series to Fox. The television series, consisting of 26
episodes, was first broadcast in 1949. It combined a soundtrack based
on a narration of the book with film footage from the United States
Army, Navy, and Coast Guard, the British Ministry of Information
and War Office, the National Film Board of Canada, and unidenti-
fied “Newsreel Pool Cameramen.” In 1975, Doubleday renewed the
copyright on the book as the “proprietor of copyright in a work made
for hire.” Fox, however, did not renew the copyright on the Crusade
television series, which expired in 1977, leaving the television series
in the public domain. Crusade in Europe (book)
[The respondents held the television rights to General Eisen-
hower’s book and reissued a videotape version of the original tele-
vision series.]
Enter petitioner Dastar. Anticipating renewed interest in World
War II on the 50th anniversary of the war’s end, Dastar released a
video set entitled World War II Campaigns in Europe. To make Cam-
paigns, Dastar purchased eight beta cam tapes of the original version
of the Crusade television series, which is in the public domain, copied
them, and then edited the series. Dastar’s Campaigns series is slightly
more than half as long as the original Crusade television series. Das- Crusade in Europe (television series)
tar substituted a new opening sequence, credit page, and final closing
for those of the Crusade television series; inserted new chapter-title
sequences and narrated chapter introductions; moved the “recap” in
the Crusade television series to the beginning and retitled it as a “pre-
view”; and removed references to and images of the book. Dastar cre-
ated new packaging for its Campaigns series and (as already noted) a
new title.
Dastar manufactured and sold the Campaigns video set as its own
product. The advertising states: “Produced and Distributed by: En-
tertainment Distributing “ (which is owned by Dastar), and makes
no reference to the Crusade television series. Similarly, the screen
credits state “DASTAR CORP presents” and “an ENTERTAINMENT
DISTRIBUTING Production,” and list as executive producer, pro- Campaigns in Europe box set
516 CHAPTER 6. TRADEMARK
ducer, and associate producer employees of Dastar. The Campaigns
videos themselves also make no reference to the Crusade television
series, New Line’s Crusade videotapes, or the book. Dastar sells its
Campaigns videos to Sam’s Club, Costco, Best Buy, and other retail-
ers and mail-order companies for $25 per set, substantially less than
New Line’s video set. In 1998, respondents Fox, SFM, and New Line
brought this action alleging that Dastar’s sale of its Campaigns video
set infringes Doubleday’s copyright in General Eisenhower’s book
and, thus, their exclusive television rights in the book. Respondents
later amended their complaint to add claims that Dastar’s sale of Cam-
paigns “without proper credit” to the Crusade television series consti-
tutes “reverse passing off”1 in violation of § 43(a) of the Lanham Act
and in violation of state unfair-competition law.
II
As it comes to us, the gravamen of respondents’ claim is that, in mar-
keting and selling Campaigns as its own product without acknowl-
edging its nearly wholesale reliance on the Crusade television series,
Dastar has made a “false designation of origin, false or misleading de-
scription of fact, or false or misleading representation of fact, which
. . . is likely to cause confusion . . . as to the origin . . . of his or her
goods.” § 43(a). That claim would undoubtedly be sustained if Das-
tar had bought some of New Line’s Crusade videotapes and merely
repackaged them as its own. Dastar’s alleged wrongdoing, however,
is vastly different: It took a creative work in the public domain – the
Crusade television series – copied it, made modifications (arguably
minor), and produced its very own series of videotapes. If “origin”
refers only to the manufacturer or producer of the physical “goods”
that are made available to the public (in this case the videotapes), Das-
tar was the origin. If, however, “origin” includes the creator of the un-
derlying work that Dastar copied, then someone else (perhaps Fox)
was the origin of Dastar’s product. At bo om, we must decide what
§ 43(a)(1)(A) of the Lanham Act means by the “origin” of “goods.”
III
The dictionary definition of “origin” is “[t]he fact or process of com-
ing into being from a source,” and “[t]hat from which anything pri-
Webster’s New International Dictionary marily proceeds; source.” . And the dictionary definition of “goods”
(2d ed. 1949) (as relevant here) is “[w]ares; merchandise.” We think the most nat-
ural understanding of the “origin” of “goods” – the source of wares
– is the producer of the tangible product sold in the marketplace, in
1
Passing off (or palming off, as it is sometimes called) occurs when a producer
misrepresents his own goods or services as someone else’s. “Reverse passing off,”
as its name implies, is the opposite: The producer misrepresents someone else’s
goods or services as his own.
E. INFRINGEMENT: PROHIBITED CONDUCT 517
this case the physical Campaigns videotape sold by Dastar. The con-
cept might be stretched to include not only the actual producer, but
also the trademark owner who commissioned or assumed responsi-
bility for (“stood behind”) production of the physical product. But as
used in the Lanham Act, the phrase “origin of goods” is in our view
incapable of connoting the person or entity that originated the ideas
or communications that “goods” embody or contain.
Section 43(a) of the Lanham Act prohibits actions like trademark
infringement that deceive consumers and impair a producer’s good-
will. It forbids, for example, the Coca-Cola Company’s passing off its
product as Pepsi-Cola or reverse passing off Pepsi-Cola as its product.
But the brand-loyal consumer who prefers the drink that the Coca-
Cola Company or PepsiCo sells, while he believes that that company
produced (or at least stands behind the production of) that product,
surely does not necessarily believe that that company was the “ori-
gin” of the drink in the sense that it was the very first to devise the
formula. The consumer who buys a branded product does not au-
tomatically assume that the brand-name company is the same entity
that came up with the idea for the product, or designed the product
– and typically does not care whether it is. The words of the Lanham
Act should not be stretched to cover ma ers that are typically of no
consequence to purchasers.
It could be argued, perhaps, that the reality of purchaser concern
is different for what might be called a communicative product – one
that is valued not primarily for its physical qualities, such as a ham-
mer, but for the intellectual content that it conveys, such as a book or,
as here, a video. The purchaser of a novel is interested not merely, if
at all, in the identity of the producer of the physical tome (the pub-
lisher), but also, and indeed primarily, in the identity of the creator
of the story it conveys (the author). And the author, of course, has at
least as much interest in avoiding passing off (or reverse passing off)
of his creation as does the publisher. For such a communicative prod-
uct (the argument goes) “origin of goods” in § 43(a) must be deemed
to include not merely the producer of the physical item (the publish-
ing house Farrar, Straus and Giroux, or the video producer Dastar)
but also the creator of the content that the physical item conveys (the
author Tom Wolfe, or – assertedly – respondents).
The problem with this argument according special treatment to
communicative products is that it causes the Lanham Act to conflict
with the law of copyright, which addresses that subject specifically.
The right to copy, and to copy without a ribution, once a copyright
has expired, like the right to make an article whose patent has expired
– including the right to make it in precisely the shape it carried when
patented – passes to the public. The rights of a patentee or copyright
holder are part of a carefully crafted bargain, under which, once the
518 CHAPTER 6. TRADEMARK
patent or copyright monopoly has expired, the public may use the
invention or work at will and without a ribution. Assuming for the
sake of argument that Dastar’s representation of itself as the “Pro-
ducer” of its videos amounted to a representation that it originated
the creative work conveyed by the videos, allowing a cause of action
under § 43(a) for that representation would create a species of mutant
copyright law that limits the public’s federal right to copy and to use
expired copyrights.
Reading “origin” in § 43(a) to require a ribution of uncopyrighted
materials would pose serious practical problems. Without a copy-
righted work as the basepoint, the word “origin” has no discernable
limits. A video of the MGM film Carmen Jones, after its copyright
has expired, would presumably require a ribution not just to MGM,
but to Oscar Hammerstein II (who wrote the musical on which the
film was based), to Georges Bizet (who wrote the opera on which the
musical was based), and to Prosper Mérimée (who wrote the novel
on which the opera was based). In many cases, figuring out who is in
the line of “origin” would be no simple task. Indeed, in the present
case it is far from clear that respondents have that status. Neither
SFM nor New Line had anything to do with the production of the
Crusade television series—they merely were licensed to distribute the
video version. While Fox might have a claim to being in the line of
origin, its involvement with the creation of the television series was
limited at best. Time, Inc., was the principal, if not the exclusive, cre-
ator, albeit under arrangement with Fox. And of course it was neither
Fox nor Time, Inc., that shot the film used in the Crusade television se-
ries. Rather, that footage came from the United States Army, Navy,
and Coast Guard, the British Ministry of Information and War Office,
the National Film Board of Canada, and unidentified “Newsreel Pool
Cameramen.” If anyone has a claim to being the original creator of
the material used in both the Crusade television series and the Cam-
paigns videotapes, it would be those groups, rather than Fox. We do
not think the Lanham Act requires this search for the source of the
Nile and all its tributaries.
Another practical difficulty of adopting a special definition of “ori-
gin” for communicative products is that it places the manufacturers
of those products in a difficult position. On the one hand, they would
face Lanham Act liability for failing to credit the creator of a work
on which their lawful copies are based; and on the other hand they
could face Lanham Act liability for crediting the creator if that should
be regarded as implying the creator’s “sponsorship or approval” of
the copy. In this case, for example, if Dastar had simply copied the
television series as Crusade in Europe and sold it as Crusade in Europe,
without changing the title or packaging (including the original cred-
its to Fox), it is hard to have confidence in respondents’ assurance
E. INFRINGEMENT: PROHIBITED CONDUCT 519
that they “would not be here on a Lanham Act cause of action,”
In sum, reading the phrase “origin of goods” in the Lanham Act
in accordance with the Act’s common-law foundations (which were
not designed to protect originality or creativity), and in light of the
copyright and patent laws (which were), we conclude that the phrase
refers to the producer of the tangible goods that are offered for sale,
and not to the author of any idea, concept, or communication embod-
ied in those goods. To hold otherwise would be akin to finding that
§ 43(a) created a species of perpetual patent and copyright, which
Congress may not do.
The creative talent of the sort that lay behind the Campaigns videos
is not left without protection. The original film footage used in the
Crusade television series could have been copyrighted, as was copy-
righted (as a compilation) the Crusade television series, even though
it included material from the public domain. Had Fox renewed the
copyright in the Crusade television series, it would have had an easy
claim of copyright infringement. And respondents’ contention that
Campaigns infringes Doubleday’s copyright in General Eisenhower’s
book is still a live question on remand. If, moreover, the producer of a
video that substantially copied the Crusade series were, in advertising
or promotion, to give purchasers the impression that the video was
quite different from that series, then one or more of the respondents
might have a cause of action – not for reverse passing off under the
“confusion . . . as to the origin” provision of § 43(a)(1)(A), but for
misrepresentation under the “misrepresents the nature, characteris-
tics [or] qualities” provision of § 43(a)(1)(B). For merely saying it is
the producer of the video, however, no Lanham Act liability a aches
to Dastar. 
4 Dilution
Now we move from section 43(a) to section 43(c). We start with some
background on the history and theory of dilution, then the statute,
then an example.
Frank I. Schechter 40 Harv. L. Rev. 813 (1927)
The Rational Basis of Trademark Protection
We have seen that the proper expansion of trademark law has been
hampered by obsolete conceptions both as to the function of a trade-
mark and as to the need for its protection. Commencing with the as-
sumption that a trademark designates either origin or ownership – in
other words, source- – he law, even in its most liberal interpretation
at the present time, will prevent the misuse of that mark only where
there is an actual confusion created by such misuse, resulting in ei-
ther diversion of trade or other concrete financial liability or injury to
520 CHAPTER 6. TRADEMARK
trade repute. However, we have intimated the possibility that the use
of trademarks on entirely non-related goods may of itself concretely
injure the owner of the mark even in the absence of those elements of
damage noted above. If so, what is the injury, and to what extent, if
any, should the law take cognizance of such injury?
Trademark pirates are growing more subtle and refined. They
proceed circumspectly, by suggestion and approximation, rather
than by direct and exact duplication of their victims’ wares and marks.
The history of important trademark litigation within recent years
shows that the use of similar marks on non-competing goods is per-
haps the normal rather than the exceptional case of infringement. In
the famous English Kodak case, cameras and bicycles were the arti-
cles in question; in the Aunt Jemima’s case, pancake flour and syrup;
in the Vogue case, fashion magazines and hats; in the Rolls-Royce
case, automobiles and radio parts; in the Beech-Nut case, food prod-
ucts and cigare es. In each in- stance the defendant was not actually
diverting custom from the plaintiff, and where the courts conceded
the absence of diversion of custom they were obliged to resort to an
exceedingly laborious spelling out of other injury to the plaintiff in
order to support their decrees. The real injury in all such cases can
only be gauged in the light of what has been said concerning the func-
tion of a trade- mark. It is the gradual whi ling away or dispersion
of the identity and hold upon the public mind of the mark or name by
its use upon non-competing goods. The more distinctive or unique
the mark, the deeper is its impress upon the public consciousness,
and the greater its need for protection against vitiation or dissocia-
tion from the particular product in connection with which it has been
used.
The following principles necessarily emerge: (1) that the value of
the modern trademark lies in its selling power; (2) that this selling
power depends for its psychological hold upon the public, not merely
upon the merit of the goods upon which it is used, but equally upon
its own uniqueness and singularity; (3) that such uniqueness or sin-
gularity is vitiated or impaired by its use upon either related or non-
related goods; and (4) that the degree of its protection depends in
turn upon the extent to which, through the efforts or ingenuity of its
owner, it is actually unique and different from other marks.
Jeremy N. Sheff
15 Tex. Intell. Prop. L.J. 331 (2007)
The (Boundedly) Rational Basis of Trademark Liability
Schechter’s theory of dilution rested on the premise that the ability of
a trademark to serve as a vehicle for creating and perpetuating good-
will depends on its ”uniqueness,” and that multiple unrelated uses
of an unusual or distinctive mark will prevent that mark from devel-
oping a strong, unique hold on the public consciousness. This the-
E. INFRINGEMENT: PROHIBITED CONDUCT 521
ory would give the first user of a particularly unique or distinctive
mark the right to enforce her mark broadly-not merely within the ge-
ographic markets in which she operated, but also in neighboring re-
gions; not merely against competing products, but also against sellers
of non-competing goods-all on the theory that any interference with
her efforts to build and retain the association of goodwill with her
trademark threatens gradually to weaken that association, thereby
reducing her incentive to cultivate such goodwill.
Ty Inc. v. Perryman
306 F.3d 509 (7th Cir. 2002)
But what is “dilution”? There are (at least) three possibilities relevant
(Posner, J.)
to this case, each defined by a different underlying concern. First,
there is concern that consumer search costs will rise if a trademark
becomes associated with a variety of unrelated products. Suppose an
upscale restaurant calls itself “Tiffany.” There is li le danger that the
consuming public will think it’s dealing with a branch of the Tiffany
jewelry store if it patronizes this restaurant. But when consumers
next see the name “Tiffany” they may think about both the restau-
rant and the jewelry store, and if so the efficacy of the name as an
identifier of the store will be diminished. Consumers will have to
think harder - incur as it were a higher imagination cost - to recog-
nize the name as the name of the store. Cf. Mead Data Central, Inc. Mead Data Centra: 875 F.2d 1026 (2d Cir.
v. Toyota Motor Sales, U.S.A., Inc. (“The [legislative] history [of New 1989)
York’s antidilution statute] disclosed a need for legislation to prevent
such ‘hypothetical anomalies’ as ‘Dupont shoes, Buick aspirin tablets,
Schli varnish, Kodak pianos, Bulova gowns’”). So “blurring” is one
form of dilution.
Now suppose that the “restaurant” that adopts the name “Tiffany”
is actually a striptease joint. Again, and indeed even more certainly
than in the previous case, consumers will not think the striptease joint
under common ownership with the jewelry store. But because of the
inveterate tendency of the human mind to proceed by association,
every time they think of the word “Tiffany” their image of the fancy
jewelry store will be tarnished by the association of the word with the
strip joint. So “tarnishment” is a second form of dilution.
Lanham Act
(c) Dilution by blurring; dilution by tarnishment. – 15 U.S.C. § 1125
(1) Injunctive relief. – Subject to the principles of equity, the Lanham Act § 43
owner of a famous mark that is distinctive, inherently or False designations of origin, false de-
scriptions, and dilution forbidden
through acquired distinctiveness, shall be entitled to an
injunction against another person who, at any time after
the owner’s mark has become famous, commences use of
a mark or trade name in commerce that is likely to cause
522 CHAPTER 6. TRADEMARK
dilution by blurring or dilution by tarnishment of the fa-
mous mark, regardless of the presence or absence of actual
or likely confusion, of competition, or of actual economic
injury.
(2) Definitions. –
(A) For purposes of paragraph (1), a mark is famous if it
is widely recognized by the general consuming public
of the United States as a designation of source of the
goods or services of the mark’s owner. In determin-
ing whether a mark possesses the requisite degree of
recognition, the court may consider all relevant factors,
including the following:
(i) The duration, extent, and geographic reach of ad-
vertising and publicity of the mark, whether adver-
tised or publicized by the owner or third parties.
(ii) The amount, volume, and geographic extent of
sales of goods or services offered under the mark.
(iii) The extent of actual recognition of the mark.
(iv) Whether the mark was registered …
(B) For purposes of paragraph (1), “dilution by blurring”
is association arising from the similarity between a
mark or trade name and a famous mark that impairs
the distinctiveness of the famous mark. In determin-
ing whether a mark or trade name is likely to cause di-
lution by blurring, the court may consider all relevant
factors, including the following:
(i) The degree of similarity between the mark or trade
name and the famous mark.
(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 in-
tended to create an association with the famous
mark.
(vi) Any actual association between the mark or trade
name and the famous mark.
(C) For purposes of paragraph (1), “dilution by tarnish-
ment” is association arising from the similarity be-
tween a mark or trade name and a famous mark that
E. INFRINGEMENT: PROHIBITED CONDUCT 523
harms the reputation of the famous mark.
Nike, Inc. v. Nikepal Intern., Inc.
No. 2:05-cv-1468-GEB-JFM, 2007 WL
The following findings of fact and conclusions of law issue as a result 2782030 (E.D. Cal. Sept. 18, 2007)
of a bench trial conducted in this trademark action. Plaintiff Nike,
Inc. (“Nike”), a company headquartered in Beaverton, Oregon which
uses the mark NIKE, contests the use of the mark NIKEPAL by De-
fendant Nikepal International, Inc. (“Nikepal”), a company located
in Sacramento, California.
Nike seeks an injunction preventing Nikepal from using the term
“Nike” (or any term confusingly similar thereto) alone or as part of
any trademark, domain name or business name under which Nikepal
offers goods or services in commerce.
F F
I. T P B
A. Nike
Nike was incorporated in 1968 under the original company name
Blue Ribbon Sports. In 1971, it adopted the NIKE mark to brand its
footwear products and in May 1978, the company’s name was offi-
cially changed to “Nike, Inc.” Today, Nike is the largest seller of ath-
letic footwear and apparel in the world. Nike sells around 180 mil-
lion pairs of shoes annually in the United States alone. Nike’s prin-
cipal business activity is the design, development, and worldwide
marketing and distribution of high quality and technologically ad-
vanced footwear, apparel, equipment, and accessories. Nike has con-
tinuously used the NIKE mark on and in connection with the various
products offered by the company since the 1970s. Sometimes, the Nike logo
word mark NIKE is the only brand used; sometimes, Nike’s Swoosh
design mark (i.e. the logo which frequently appears on products
along with NIKE, and in some instances alone) is also placed on the
product.
B. Nikepal
Nikepal was incorporated on May 18, 1998 by the company’s founder
and president, Palminder Sandhu (“Mr. Sandhu”), who then began
using the NIKEPAL mark in commerce. Nikepal provides services
and products to analytical, environmental, and scientific laboratories.
Nikepal’s trademark application to the PTO requested registration
for: “import and export agencies and wholesale distributorships fea- Nikepal logo
turing scientific, chemical, pharmaceutical, biotechnology testing in-
struments and glassware for laboratory use, electrical instruments,
paper products and household products and cooking appliances.”
524 CHAPTER 6. TRADEMARK
Nikepal distributes glass syringes in varying volumes and other labo-
ratory products to testing and power companies and also distributes
paper boxes (syringe carrying cases) and nylon valves and caps for
use with the syringes. Nikepal only distributes its products to labo-
ratories, not to individuals.
Nikepal does not have a retail office, but operates its business
through its website (located at www.nikepal.com), via email, and via
telephone. Nikepal is run by Mr. Sandhu, who also works as a trans-
portation engineer. Currently, Nikepal has one other part-time em-
ployee. Nikepal has only a few hundred customers, but it has a list of
thousands of prospective customers, some of whom receive materials
from Nikepal advertising its product and service offerings under the
mark NIKEPAL.
II. T P ’M
A. NIKE
Nike first registered the NIKE mark with the PTO in February 1974.
Nike owns ten (10) federal trademark registrations for the NIKE mark
alone, covering footwear, clothing, bags, timepieces, paper products
such as notebooks and binders, sport balls, swim accessories, and re-
tail store services, all of which related to pre-May 1998 uses of the
mark. By May 1998, Nike was also using and applied for trade-
mark registrations covering the use of the NIKE mark in combina-
tion with other terms or designs for footwear, clothing, bags, time-
pieces, posters, sport balls, swim accessories, weights, gloves, head-
gear, and retail store services. For example, Nike owns nineteen (19)
federal registrations for NIKE composite marks such as: NIKE and
the Swoosh design which has been in use since 1971; NIKE NIKE
AIR which has been in use since 1987; NIKE-FIT which has been in
use since 1990; NIKE TOWN which has been in use since 1990; NIKE
SHOP which has been in use since 1991; and NIKE GOLF which has
been in use since 1993. From 1998 to the present, Nike has continued
to use the mark NIKE alone and in combination with other terms or
designs.
B. NIKEPAL
Mr. Sandhu testified that he conceived of the term Nikepal when he
wanted to create a vanity license plate for his car. He testified that
he selected the word “Nike” by opening a dictionary to a random
page and choosing the first word he saw, and then combined it with
the first three le ers of his first name “Pal.” (“Pal” means friend or
benefactor. Mr. Sandhu admits he knew of the existence of the com-
pany Nike and its use of the NIKE mark at the time he devised the
term NIKEPAL. Despite Mr. Sandhu’s trial testimony concerning the
E. INFRINGEMENT: PROHIBITED CONDUCT 525
manner in which he conceived of the term NIKEPAL, the court does
not find it to be credible.
The “Nike” portion of the NIKEPAL mark is pronounced the same
way as the NIKE mark is pronounced: with a hard “i” (like bike) in
the first syllable and a hard “e” (like in “key”) in the second syllable.2
The articles of incorporation signed by Mr. Sandhu for Nikepal in
1998 display the company name as “NikePal International, Inc.,” with
the first word of the company name spelled “NikePal,” with a capital
“N” and a capital “P.”
In addition to using Nikepal as the company name, NIKEPAL
appears directly on some of Nikepal’s products, including on its sy-
ringe products, and on its marketing materials. Nikepal also places
www.nikepal.com on its syringes to identify the source of the syringe.
Nikepal also uses the NIKEPAL mark in a vanity phone number (1-
877-N-I-K-E-P-A-L), on its website, and in its domain names, includ-
ing nikepal.com, nikepal.biz, nikepal.us, nikepal.tv, nikepal.info, and
nikepal.net.
III. N ’ S
By the late 1980s, United States sales of NIKE branded products were
over one billion dollars per year. Starting in 1991 and through the
mid 1990s, sales of NIKE products in the United States were approx-
imately two billion dollars per year, and were above five billion dol-
lars per year by 1997. By 1997, Nike was the largest seller of athletic
footwear and apparel in the world. The geographic area of Nike’s
sales includes the United States and 140 countries throughout the
world. Since 1997, Nike has sold over 100,000,000 pairs of NIKE shoes
each year.
IV. A P NIKE M
Nike has undertaken significant expense to promote the NIKE mark.
Nike advertises in various types of media, including traditional print
advertising, such as magazines (of both special and general interest),
newspapers (of general circulation), leaflets, and billboards. Nike
also advertises in electronic media, including radio, television, ca-
ble and internet, on sides of buildings, on taxi cabs, and through di-
rect mailings. Nike’s television advertisements have run on network
2
Nikepal’s a orney a empted to convince the court that there is a pronunciation
difference between NIKE and NIKEPAL. In her questions during trial, for example,
she pronounced Nikepal’s mark as “nik-a-pal.” However, in answering her ques-
tions at trial, Mr. Sandhu, the president of Nikepal, alternated between the pronun-
ciation of NIKEPAL as “nik-a-pal” and as “Ny-key-pal.” Further, Nike’s witness,
Joseph Sheehan, a former FBI agent and now a private investigator, provided a tape
recording of the outgoing message heard on Nikepal’s answering machine which
clearly pronounced the term “Nike” with long, or hard, vowels, that is an “i” like in
“bike” and “e” like in “key” identical to the pronunciation of the Nike’s trademark.
526 CHAPTER 6. TRADEMARK
channels and have reached national audiences. Nike has also pro-
moted its mark by associating with athletes through endorsement
arrangements. By 1991, Nike was spending in excess of one hun-
dred million dollars per year in the United States alone to advertise
products bearing the NIKE mark. By 1997, Nike had spent at least
$1,567,900,000.00 to promote the NIKE mark in the United States.
V. N NIKE
The NIKE mark has been consistently ranked as a top brand in publi-
cations that survey the top brands each year. Since at least 1990, Nike
has been named one of the top forty (40) brands in the United States
based on the EquiTrend and other studies published in BrandWeek
and Financial World Magazine. Other brands ranked in such studies
include FRITO LAY, LEVI’S, CAMPBELLS’, HEWLETT-PACKARD,
SONY, PEPSI, and VISA. One story printed in Forbes magazine, re-
ported a survey conducted by Young & Rubicam that ranked the
NIKE brand among the top ten (10) in the United States in 1996 with
COKE, DISNEY, and HALLMARK.
VI. E A A
A survey conducted by Phillip Johnson of Leo J. Shapiro and Asso-
ciates (“Mr. Johnson’s survey”), a Chicago-based market research
firm, determined that a significant number of Nikepal’s potential
laboratory customers actually associated NIKE with NIKEPAL. Mr.
Johnson is an expert at designing surveys that measure consumer be-
havior.
In designing his study, Mr. Johnson used a universe of sur-
vey participants randomly selected from lists of companies that Mr.
Sandhu’s deposition testimony identified as the sources for Nikepal’s
current and prospective customers. Mr. Johnson conducted the sur-
vey by phone and asked respondents about their perception of a web-
site called nikepal.com. In designing his survey, Mr. Johnson chose
one of the ways that the NIKEPAL mark is used in commerce which
allowed him to reasonably recreate a purchasing context while ob-
taining a controlled and accurate measurement. Mr. Johnson tes-
tified that this survey replicated the circumstances in which people
typically encountered the NIKEPAL mark.
Once survey respondents were screened to confirm that they were
the persons most responsible for ordering laboratory equipment at
their business, they were asked: “What if anything, came to your
mind when I first said the word Nikepal?” Many survey respondents
who were not actually confused about the source of the Nikepal web-
site nonetheless identified Nike. Mr. Johnson testified that his sur-
vey revealed that the vast majority of respondents, 87%, associated
Nikepal with Nike; that is, when they encounter the mark NIKEPAL,
E. INFRINGEMENT: PROHIBITED CONDUCT 527
they think of Nike and/or its offerings.
C L
I. D
Under the Federal Trademark Dilution Revision Act5 :
The owner of a famous mark that is distinctive, inher-
ently or through acquired distinctiveness, shall be entitled
to an injunction against another person who, at any time
after the owner’s mark has become famous, commences
use of a mark or trade name in commerce that is likely to
cause dilution by blurring or dilution by tarnishment of
the famous mark, regardless of the presence or absence
of actual or likely confusion, of competition, or of actual
economic injury.
15 U.S.C. § 1125(c)(1) (“TDRA”). To prevail on its dilution claim,
Nike must prove 1) that its mark was famous as of a date prior to
the first use of the NIKEPAL mark and 2) that Nikepal’s use of its
allegedly diluting mark creates a likelihood of dilution by blurring
or tarnishment.6
A. Whether NIKE Was Famous Prior to the First Use of NIKEPAL
A “famous” mark is one that “is widely recognized by the general
consuming public of the United States as a designation of source of
the goods or services of the mark’s owner.” 15 U.S.C. § 1125(c)(2)(A).
[The court quoted the four statutory factors.]
Since Nikepal’s first use of NIKEPAL commenced in May 1998,
Nike must show that NIKE was famous before that date.
5
The TDRA, signed into law on October 6, 2006, amended the previous federal
anti-dilution statute (the Federal Trademark Dilution Act (“FTDA”)). The TDRA
revises the FTDA in three ways: it establishes that likelihood of dilution, and not
actual dilution, is a prerequisite to establish a dilution claim; it sets forth four rel-
evant factors courts may consider in determining famousness; and it also lists six
relevant factors that courts may consider in determining whether a likelihood of
dilution exists.
6
California’s anti-dilution statute, under which Nike also brings a claim, pre-
scribes:
Likelihood of injury to business reputation or a dilution of the dis-
tinctive quality of a mark registered under this chapter, or a mark
valid at common law, or a trade name valid at common law, shall be
a ground for injunctive relief notwithstanding the absence of compe-
tition between parties or the absence of confusion as to the source of
goods or services.
Cal. Bus. & Prof.Code § 14330. If Nike prevails on its federal dilution claim, it
will also prevail on its dilution claim under California law.
528 CHAPTER 6. TRADEMARK
With regard to the first factor, the evidence clearly establishes that
through various combinations of athlete endorsements, television, ra-
dio, print media, and billboard placements, NIKE was promoted na-
tionally for more than two decades before 1998. By the 1990s, Nike
was had spent in excess of a billion dollars for promotion of NIKE
products in the United States.
With regard to the second factor, Nike’s sales of NIKE products
reached the billion dollar per year level in the United States well be-
fore May 1998. By 1997, Nike had spent in excess of one billion dollars
to promote the NIKE mark in the United States.
Nike also satisfies the third factor, since recognition of the suc-
cess of NIKE has been recorded by various publications in surveys
and articles wri en prior to May 1998. Since the early 1990s, NIKE
has been consistently ranked as a top brand in brand surveys in the
United States and the world. Mr. Johnson, who in his professional
capacity is familiar with the reputation and methodology used in var-
ious brand surveys and literature, opined that these sources evinced
that NIKE was famous during the mid 1990s, before Nikepal adopted
its mark in 1998. Nikepal counters that only Nike’s Swoosh design
mark, and not the NIKE mark itself, is famous. However, Mr. John-
son’s survey revealed that when participants were exposed solely to
the word “Nike” without the Swoosh, the response overwhelmingly
indicated recognition of the NIKE mark.
Finally, with regard to the fourth factor, the NIKE mark is reg-
istered on the PTO’s principal register. Nike owns ten federal reg-
istrations for NIKE covering uses prior to 1998 which include retail
services, bags, footwear, apparel, heart monitors, electrical items and
paper products. Accordingly, the court concludes that NIKE was fa-
mous prior to Nikepal’s first use of the NIKEPAL mark.
B. Likelihood of Dilution by Blurring
The TDRA defines dilution by blurring as an “association arising
from the similarity between a mark or trade name and a famous mark
that impairs the distinctiveness of the famous mark.” 15 U.S.C. §
1125(c)(2)(A). [The court quoted the six statutory factors.]
(i) The Degree of Similarity
Marks in a dilution analysis must be identical or nearly identical. For
marks to be nearly identical to one another, they must be similar
enough that a significant segment of the target group of customers
sees the two marks as essentially the same.
The parties’ marks are nearly identical. The NIKEPAL mark is a
composite of the word “Nike” with the term of affinity, “pal.” The
composite nature of the NIKEPAL mark is evident in the logo selected
by the company which clearly features an “N” and a “P.” In each
E. INFRINGEMENT: PROHIBITED CONDUCT 529
case the dominant feature of the mark is the term “Nike.” In addi-
tion, the term “Nike” in both marks is pronounced identically with
an “i” like in “bike” and an “e” like in “key.” See Porsche Cars N. Am. Porsche Cars: No. Civ. S-00-471, 2000
Inc. v. Spencer (finding that the trademark PORSCHE was diluted WL 641209 (E.D. Cal. 2000)
by PORCHESOURCE.COM); see also Jada Toys, Inc. v. Ma el, Inc. Jada Toys: 496 F.3d 974 (2007)
(concluding “that a reasonable trier of fact could find that the HOT
WHEELS and HOT RIGZ marks are nearly identical.”).
Further, as shown by Mr. Johnson’s survey, the vast majority
of the survey respondents, representing a significant segment of
Nikepal’s target customer group, associate Nike and/or its products
and services when they encounter the mark NIKEPAL, thus perceiv-
ing the two marks as essentially the same. Accordingly, this factor
favors Nike.
(ii) Distinctiveness
Nikepal does not dispute that NIKE is, at the very least, suggestive.
Accordingly, NIKE is inherently distinctive and this factor favors
Nike.
(iii) Substantially Exclusive Use
The law does not require that use of the famous mark be absolutely
exclusive, but merely “substantially exclusive.” Therefore, a limited
amount of third party use is insufficient to defeat a showing of sub-
stantially exclusive use.
Nike asserts that its use of the NIKE mark is substantially ex-
clusive. Nikepal introduced evidence of use of the term “Nike” in
the company name “Nike Hydraulics, Inc.,” through a bo le jack
purchased from the company and a 1958 trademark registration for
“Nike” owned by Nike Hydraulics. However, this evidence is insuffi-
cient to disprove Nike’s claim that its use of NIKE is substantially ex-
clusive. Even Nikepal’s witness, Roger Smith, admi ed that he had
not encountered Nike Hydraulics before hearing that name in con-
nection with this action. Accordingly, the court finds that Nike’s use
of the NIKE mark is substantially exclusive and this factor therefore
favors Nike.9
(iv) Degree of Recognition
9
Nikepal also introduced evidence that the term “Nike” appears in dictionaries
referring to the Greek goddess of victory, that the image of Nike the goddess ap-
peared on some Olympic medals, and that the United States Government named
one of its missile programs “Nike.” However, Nikepal did not show that these
uses were made in commerce in association with the sale or marketing of goods or
services as required under the TDRA. (See 15 U.S.C. § 1125(c) (1) (providing that
under the TDRA, only “use of a mark or trade name in commerce” is actionable as
diluting a famous mark.).)
530 CHAPTER 6. TRADEMARK
The degree of recognition of NIKE is quite strong. Millions of NIKE
products are sold in the United States annually and the evidence
demonstrates that NIKE is readily recognized. This factor therefore
favors Nike.
(v) Intent to Create Association
Mr. Sandhu admi ed that he was aware of the existence of the NIKE
mark before he adopted the company name. Although he testified at
trial that he came up with the term Nikepal by opening the dictionary
to a random page and essentially finding that word by “fate,” his
testimony was not credible. Therefore, this factor favors Nike.
(vi) Actual Association
Nikepal registered the domain names nikepal.biz, nikepal.net,
nikepal.us, nikepal.info and nikepal.tv. The evidence shows that the
domain registrar assigned the domain names an “under construction”
page and then associated with that page promotions and advertise-
ment links to a number of web pages that offered NIKE products (or
products of Nike’s competitors in the shoe and apparel field). Thus,
in the internet context, there is actual association between NIKEPAL
and NIKE.
Further, Mr. Johnson’s survey also evinced that there is a strong
degree of association between NIKEPAL and NIKE. Mr. John-
son’s survey showed over 87% of the people in Nikepal’s own cus-
tomer pool associated the stimulus “Nikepal” with NIKE. The survey
presents ample proof of association between the marks to support a
finding that such exists in the general public. Accordingly, the court
finds that there is actual association between the NIKEPAL and NIKE
marks and this factor favors Nike.
In conclusion, since the six factors considered in the likelihood
of dilution analysis favor Nike, there is a likelihood that NIKE will
suffer dilution if Nikepal is allowed to continue its use of NIKEPAL.
Accordingly, Nike prevails on its federal and state dilution claims.
Dilution Lightning Round
In each case, what kind or kinds of trademark infringement are at
stake: confusion about source, confusion about sponsorship, dilu-
tion by blurring, or dilution by tarnishment? Should a court find
a violation of the trademark owner’s rights. (The respective marks
are TIFFANY’S for jewelry, I CAN’T BELIEVE IT’S NOT BUTTER!
for margarine, and NEW YORK STOCK EXCHANGE for securities-
trading services.)
E. INFRINGEMENT: PROHIBITED CONDUCT 531
532 CHAPTER 6. TRADEMARK
5 Problems
Ambush Marketing Problem
Section 15A of South Africa’s Merchandise Marks Act, as amended in
2002, provides that certain events may be designated as ”protected”
and that
For the period during which an event is protected, no per-
son may use a trade mark in relation to such event in a
manner which is calculated to achieve publicity for that
Women wearing orange
trade mark and thereby to derive special promotional ben-
efit from the event, without the prior authority of the or-
ganiser of such event.
Note that ”a trade mark” need not be the mark of the event’s orga-
E. INFRINGEMENT: PROHIBITED CONDUCT 533
nizer – section 15A prohibits the use of any trademark in this manner.
In 2010, South Africa was the host nation for the FIFA World
Cup.Thirty-six women a ended the Netherlands-Denmark game
wearing orange dresses. Orange is the national color of the Nether-
lands, and also is used prominently in advertising for the Dutch beer
company Bavaria. Did Bavaria or the women violate section 15A? If
they had done this in the United States, would they have violated any
provisions of the Lanham Act?
Jack Daniel’s Problem
The image on the top is the world-famous label from JACK
DANIEL’S whiskey. The image on the right is the front cover of a
novel by Patrick Wensink. Infringement?
Paper Handbag Problem
These ”handbags” bearing the GUCCI logo are actually made of pa-
per. In Chinese religious traditions, people burn them – along with Jack Daniel's logo
other paper effigies of luxury goods and paper ”money” in denomi-
nations up to $5,000,000,00 – as offerings to deceased relatives. Very
loosely, the idea is that doing so provides for the relatives’ comfort
in the afterlife. Does Gucci have the right under trademark law to
prevent the sale of these items bearing its trademarks?
6 Secondary Liability
Inwood Laboratories, Inc. v. Ives Laboratories, Inc.
[Ives sold the drug cyclandelate under the trademark CYCLOSPAS-
MOL. Ives marketed the drug, a white powder, to wholesalers, retail
pharmacists, and hospitals in colored gelatin capsules. It used a blue
capsule, imprinted with ”Ives 4124,” for its 200 mg dosage and a com-
bination blue-red capsule, imprinted with ”Ives 4148,” for its 400 mg
dosage. After Ives’ patent on cyclandelate expired, several generic
manufacturers, including the respondents, marketed cyclandelate in
200 mg and 400 mg capsules in colors identical to those selected by Broken Piano for President cover
Ives, but with no identifying marks or different ones than Ives used.]
The generic manufacturers also follow a normal industry prac-
tice by promoting their products primarily by distribution of catalogs
to wholesalers, hospitals, and retail pharmacies, rather than by con-
tacting physicians directly. The catalogs truthfully describe generic
cyclandelate as ”equivalent” or ”comparable” to CYCLOSPASMOL.
In addition, some of the catalogs include price comparisons of the
generic drug and CYCLOSPASMOL and some refer to the color of
the generic capsules. The generic products reach wholesalers, hospi- GUCCI "handbags"
tals, and pharmacists in bulk containers which correctly indicate the
manufacturer of the product contained therein. 456 U.S. 844 (1982)
534 CHAPTER 6. TRADEMARK
A pharmacist, regardless of whether he is dispensing CY-
CLOSPASMOL or a generic drug, removes the capsules from the con-
tainer in which he receives them and dispenses them to the consumer
in the pharmacist’s own bo le with his own label a ached. Hence,
the final consumer sees no identifying marks other than those on the
capsules themselves.
[Ives sued for trademark infringement. It alleged that some drug-
gists ignored physicians’ wri en instructions to dispense only CY-
Cyclandelate capsules CLOSPASMOL and dispensed generic products instead, and that
some druggists mislabeled generic drugs as CYCLOSPASMOL.] Ives
contended that the generic manufacturers’ use of look-alike capsules
and of catalog entries comparing prices and revealing the colors of
the generic capsules induced pharmacists illegally to substitute a
generic drug for CYCLOSPASMOL and to mislabel the substitute
drug CYCLOSPASMOL. Although Ives did not allege that the peti-
tioners themselves applied the Ives trademark to the drug products
they produced and distributed, it did allege that the petitioners con-
tributed to the infringing activities of pharmacists who mislabeled
generic cyclandelate.
As the lower courts correctly discerned, liability for trademark
infringement can extend beyond those who actually mislabel goods
with the mark of another. Even if a manufacturer does not directly
control others in the chain of distribution, it can be held responsible
for their infringing activities under certain circumstances. Thus, if a
manufacturer or distributor intentionally induces another to infringe
a trademark, or if it continues to supply its product to one whom it
knows or has reason to know is engaging in trademark infringement,
the manufacturer or distributor is contributorially responsible for any
harm done as a result of the deceit.
It is undisputed that those pharmacists who mislabeled generic
drugs with Ives’ registered trademark violated § 32. However,
whether these petitioners were liable for the pharmacists’ infringing
547 F. Supp. 2d 667 (W.D. Tex 2008) acts depended upon whether, in fact, the petitioners intentionally in-
duced the pharmacists to mislabel generic drugs or, in fact, continued
to supply cyclandelate to pharmacists whom the petitioners knew
were mislabeling generic drugs.
Philip Morris USA Inc. v. Lee
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff is the registered owner of the Marlboro word mark and
the Marlboro Roof Design label mark (collectively, the “Marlboro
Marks”), which it uses in connection with its tobacco products. Plain-
tiff initiated the present suit against numerous defendants, including
MARLBORO logo
Defendant Motohiro Miyagi (“Miyagi”).
E. INFRINGEMENT: PROHIBITED CONDUCT 535
Evidence submi ed by Plaintiff, along with the Affidavits, indi-
cates that Miyagi is a sales and distribution agent for Metrich Interna-
tional Company, a Chinese company that manufactures counterfeit
cigare es. Miyagi admits that, since 1999, he has been managing and
arranging for the sale of these goods, which he knows are counterfeit.
For his services, Miyagi receives a $10.00 commission per case.
Plaintiff alleges that Miyagi orchestrated a conspiracy to illegally
import 978 master cases of counterfeit Marlboro cigare es into the
United States.6 In August 2003, Miyagi obtained control over a large
quantity of counterfeit Marlboro cigare es manufactured by Metrich.
The goods were stored in a warehouse in Curaçao, Netherlands An-
tilles. Miyagi was responsible for finding people to purchase the
goods. To assist him, Miyagi contacted Florida-based Julian Balea
and arranged for Balea, and his company, Synergy Trading Group,
Inc., to advertise and offer the counterfeit cigare es for sale to buyers
in the United States. Acting as Miyagi’s agent, Balea advertised the
counterfeit Marlboro cigare es for sale on an Internet website.
William Lee and Felipe Castaneda, partners doing business to-
gether in El Paso, Texas, as the Kagro Company, responded to the
Internet advertisement, and offered to buy the counterfeit cigare es.
According to the sales invoice, Balea, Lee, and Castaneda reached a
deal whereby Kagro agreed to purchase 1,960 master cases of counter-
feit Marlboro cigare es. At his deposition, Balea testified that Miyagi
dictated the terms of the deal and retained final authority to approve
the transaction.
Once the deal was negotiated, Miyagi prepared to ship the coun-
terfeit cigare es from Curaçao to the United States. He enlisted the
services of John Tominelli (“Tominelli”) and his company, Southeast-
ern Cargo Services, Inc. (“Southeastern”), to inspect the goods in Cu-
raçao. Miyagi traveled to Curaçao and a ended the inspection. Af-
ter inspecting the goods, Tominelli issued a report that listed their
quantity, packaging, and freshness. In the report, the cigare es were
falsely described as “Made Under Authority of Philip Morris Prod-
ucts S.A., Neuchatel, Swi erland.” Once the inspection was com-
plete, Miyagi released the counterfeit cigare es to Tominelli, who
shipped them to Lee and Castaneda in El Paso, Texas.
On October 8, 2003, the United States Bureau of Customs and Bor-
der Protection (“Customs”) notified Plaintiff that it seized a shipment
of counterfeit Marlboro cigare es at the Port of Houston, Texas. The
cigare es had been shipped from Curaçao and were destined for El
Paso, Texas.
III. ANALYSIS
6
In each master case, there are fifty cartons, and in each carton, there are ten
packages of cigare es. Each package contains twenty cigare es.
536 CHAPTER 6. TRADEMARK
Plaintiff submits that Miyagi used the Marlboro Marks in commerce
when he offered for sale, sold, and imported counterfeit cigare es.
The extent of Miyagi’s participation in this venture, and specifically
in these activities, remains unclear. It is well established that per-
sons other than Miyagi directly conducted the relevant transactions.
For example, Balea individually, and through his company, Syn-
ergy, organized the sales transaction by advertising the availability
of the goods, contacting the buyers, and receiving the payment of
funds. At his deposition, Lee testified that he dealt only with Syn-
ergy, and was unaware of Miyagi’s existence. Tominelli performed
the inspection and shipped the goods. Indeed, Miyagi’s name ap-
pears on neither the sales invoice nor the inspection report. Thus,
one may arguably question whether Miyagi directly imported coun-
terfeit cigare es. This finding, however, does not shield Miyagi from
liability. The Court must look to whether Miyagi is liable for conduct
that constitutes unlawful infringement under a theory of vicarious
liability.
To hold a party liable for the infringing activities of another, a
plaintiff must prove that the party had (1) a direct financial interest
in the infringing activity, and (2) the right and ability to supervise the
infringing party’s acts or activities which caused the infringement.
Taylor Made: 265 F.Supp.2d, 732 (N.D. Taylor Made Golf Co. v. MJT Consulting Group (holding a defendant
Tex. 2003) personally liable for infringement where he procured and inspected
the goods and signed the purchase agreement, though another entity
Webbworld: 991 F.Supp. 543 (N.D. Tex. ultimately sold the goods); Playboy Enters. v. Webbworld, Inc. (holding
1997) an employer liable for an employee’s infringement where the former
had supervisory authority over the la er’s activities).
There is undisputed evidence that Miyagi had a direct financial
interest and control over the sale and importation of the counterfeit
cigare es into the United States. Miyagi admits Metrich paid him a
commission for each case of cigare es he sold.
There is also evidence that Miyagi had a right and ability to super-
vise Balea’s unlawful activities. Miyagi admits that he controlled the
counterfeit Marlboro cigare es as part of his responsibility to main-
tain and sell them for Metrich. It is Miyagi who hired Balea and
Synergy to assist him with the sale, retaining significant authority
over the transaction. At his deposition, Balea testified about his belief
that Miyagi was the actual seller of the goods. Balea understood that
Miyagi dictated the price of the goods and could exercise control over
the terms of the sale to Lee and Castaneda. Miyagi selected Tominelli
and Southeastern to perform an inspection and verify the goods. In
fact, Miyagi was present at the inspection and authorized the release
of goods upon verification. Miyagi’s a empted disclaimer of respon-
sibility on the grounds that he did not know the identity of the buyers
or that they lived in the United States is undercut by his admission
F. DEFENSES 537
that he knew that “the buyers [were] located in Texas.” Thus, there is
evidence that Miyagi used the Marlboro Marks in commerce when he,
acting through Balea, sold and imported counterfeit cigare es into
the United States. Accordingly, the Court holds Miyagi actions con-
stitute “use in commerce.”
Having shown that Miyagi used the Marlboro Marks in commerce
when he sold and imported counterfeit cigare es, Plaintiff is entitled
to summary judgment against Miyagi for violating §§ 32 and 43(a) of
the Lanham Act.
F Defenses
Lanham Act
(c) … 15 U.S.C. § 1125
(3) Exclusions. – The following shall not be actionable as di- Lanham Act § 43
lution by blurring or dilution by tarnishment under this False designations of origin, false de-
scriptions, and dilution forbidden
subsection:
(A) Any fair use, including a nominative or descriptive fair
use, or facilitation of such fair use, of a famous mark by
another person other than as a designation of source
for the person’s own goods or services, including use
in connection with—
(i) advertising or promotion that permits consumers
to compare goods or services; or
(ii) identifying and parodying, criticizing, or com-
menting upon the famous mark owner or the
goods or services of the famous mark owner.
(B) All forms of news reporting and news commentary.
(C) Any noncommercial use of a mark.
Note that these are statutory defenses to trademark dilution. They are
all based on well-established defenses to trademark infringement first
recognized by the courts. As you read the materials in this section,
consider the extent to which the statutory codification does or does
not track the common-law defenses recognized by the courts.
1 Descriptive Fair Use
Zatarains, Inc. v. Oak Grove Smokehouse, Inc.
698 F.2d 786 (5th Cir. 1983)
538 CHAPTER 6. TRADEMARK
Even when a descriptive term has acquired a secondary meaning suf-
ficient to warrant trademark protection, others may be entitled to
use the mark without incurring liability for trademark infringement.
When the allegedly infringing term is “used fairly and in good faith
only to describe to users the goods or services of [a] party, or their
geographic origin,” Lanham Act § 33(b)(4), 15 U.S.C. § 1115(b)(4), a
defendant in a trademark infringement action may assert the “fair
use” defense. The defense is available only in actions involving de-
scriptive terms and only when the term is used in its descriptive sense
rather than its trademark sense. In essence, the fair use defense pre-
vents a trademark registrant from appropriating a descriptive term
for its own use to the exclusion of others, who may be prevented
thereby from accurately describing their own goods. The holder of a
protectable descriptive mark has no legal claim to an exclusive right
in the primary, descriptive meaning of the term; consequently, any-
one is free to use the term in its primary, descriptive sense so long as
such use does not lead to customer confusion as to the source of the
goods or services.
Zatarain’s term FISH-FRI is a descriptive term that has acquired
a secondary meaning in the New Orleans area. Although the trade-
mark is valid by virtue of having acquired a secondary meaning, only
that penumbra or fringe of secondary meaning is given legal protec-
tion. Zatarain’s has no legal claim to an exclusive right in the origi-
nal, descriptive sense of the term; therefore, Oak Grove and Visko’s
are still free to use the words “fish fry” in their ordinary, descriptive
sense, so long as such use will not tend to confuse customers as to the
source of the goods.
The record contains ample evidence to support the district court’s
determination that Oak Grove’s and Visko’s use of the words “fish
fry” was fair and in good faith. Testimony at trial indicated that the
appellees did not intend to use the term in a trademark sense and had
never a empted to register the words as a trademark. Oak Grove
and Visko’s apparently believed “fish fry” was a generic name for
the type of coating mix they manufactured. In addition, Oak Grove
and Visko’s consciously packaged and labelled their products in such
a way as to minimize any potential confusion in the minds of con-
sumers. The dissimilar trade dress of these products prompted the
district court to observe that confusion at the point of purchase — the
grocery shelves — would be virtually impossible. Our review of the
record convinces us that the district court’s determinations are cor-
rect. We hold, therefore, that Oak Grove and Visko’s are entitled to
fair use of the term “fish fry” to describe their products; accordingly,
Zatarain’s claim of trademark infringement must fail.9
9
The district court also rejected Zatarain’s claims of unfair competition under
F. DEFENSES 539
2 Nominative Fair Use
New Kids on the Block v. New America Pub., Inc.
971 F. 2d 302 (9th Cir. 1992)
The individual plaintiffs perform professionally as The New Kids on (Kozinski, J.)
the Block, reputedly one of today’s ho est musical acts. This case
requires us to weigh their rights in that name against the rights of
others to use it in identifying the New Kids as the subjects of public
opinion polls.
B
No longer are entertainers limited to their craft in marketing them-
selves to the public. This is the age of the multi-media publicity
bli krieg: Trading on their popularity, many entertainers hawk
posters, T-shirts, badges, coffee mugs and the like — handsomely
supplementing their incomes while boosting their public images. The
New Kids are no exception; the record in this case indicates there are
more than 500 products or services bearing the New Kids trademark.
Among these are services taking advantage of a recent development
in telecommunications: 900 area code numbers, where the caller is
charged a fee, a portion of which is paid to the call recipient. Fans
can call various New Kids 900 numbers to listen to the New Kids talk
about themselves, to listen to other fans talk about the New Kids, or
to leave messages for the New Kids and other fans.
The defendants, two newspapers of national circulation, con-
ducted separate polls of their readers seeking an answer to a pressing
question: Which one of the New Kids is the most popular? USA To-
day’s announcement contained a picture of the New Kids and asked,
“Who’s the best on the block?” The announcement listed a 900 num-
ber for voting, noted that “any USA Today profits from this phone
line will go to charity,” and closed with the following:
New Kids on the Block are pop’s ho est group. Which of
the five is your fave? Or are they a turn off? ... Each call
costs 50 cents. Results in Friday’s Life section.
The Star’s announcement, under a picture of the New Kids, went to
the heart of the ma er: “Now which kid is the sexiest?” The an-
nouncement, which appeared in the middle of a page containing a
story on a New Kids concert, also stated:
the Lanham Act § 43(a) and La. Rev. Stat. Ann. § 51:1405(A), relying upon the
absence of any likelihood of confusion between the products of Zatarain’s, Oak
Grove, and Visko’s. We affirm these conclusions also.
It would make no sense to characterize defendant’s use as “fair” within the mean-
ing of the Lanham Act for the purposes of a trademark infringement claim and at
the same time characterize his use as “unfair” for the purpose of a section 43(a)
unfair competition claim under the same statute.
540 CHAPTER 6. TRADEMARK
Which of the New Kids on the Block would you most like
to move next door? STAR wants to know which cool New
Kid is the ho est with our readers.
Readers were directed to a 900 number to regis-
ter their votes; each call cost 95 cents per minute.1
D
I
A.
A trademark is a limited property right in a particular word, phrase
or symbol. And although English is a language rich in imagery, we
need not belabor the point that some words, phrases or symbols bet-
San Francisco Arts & Athletics: 483 U.S. ter convey their intended meanings than others. See San Francisco
522 (1987) Arts & Athletics, Inc. v. U.S.O.C. (Brennan, J., dissenting) (“[A] jacket
reading ‘I Strongly Resent the Draft’ would not have conveyed Co-
hen’s message.”). Indeed, the primary cost of recognizing property
rights in trademarks is the removal of words from (or perhaps non-
entrance into) our language. Thus, the holder of a trademark will be
denied protection if it is (or becomes) generic, i.e., if it does not re-
late exclusively to the trademark owner’s product. [Examples cited:
”shredded wheat” for cereal and ”air shu le” for hourly airline ser-
vice.] This requirement allays fears that producers will deplete the
stock of useful words by asserting exclusive rights in them. When a
trademark comes to describe a class of goods rather than an individ-
ual product, the courts will hold as a ma er of law that use of that
mark does not imply sponsorship or endorsement of the product by
the original holder.
A related problem arises when a trademark also describes a per-
son, a place or an a ribute of a product. If the trademark holder were
allowed exclusive rights in such use, the language would be depleted
in such the same way as if generic words were protectable. Thus
trademark law recognizes a defense where the mark is used only “to
describe the goods or services of [a] party, or their geographic ori-
gin.” 15 U.S.C. § 1115(b)(4). The “fair-use” defense, in essence, for-
1
The USA Today poll generated less than $300 in revenues, all of which the news-
paper donated to the Ber- klee College of Music. The Star’s poll generated about
$1600.
F. DEFENSES 541
bids a trademark registrant to appropriate a descriptive term for his
exclusive use and so prevent others from accurately describing a char-
acteristic of their goods. Once again, the courts will hold as a ma er
of law that the original producer does not sponsor or endorse another
product that uses his mark in a descriptive manner. [Example cited:
”ribbed” condoms.]
With many well-known trademarks, such as JELL-O, SCOTCH
TAPE and KLEENEX, there are equally informative non-trademark
words describing the products (gelatin, cellophane tape and facial tis-
sue). But sometimes there is no descriptive substitute, and a problem
closely related to genericity and descriptiveness is presented when
many goods and services are effectively identifiable only by their
trademarks. For example, one might refer to “the two-time world
champions” or “the professional basketball team from Chicago,” but
it’s far simpler (and more likely to be understood) to refer to the
Chicago Bulls. In such cases, use of the trademark does not imply
sponsorship or endorsement of the product because the mark is used
only to describe the thing, rather than to identify its source.
Indeed, it is often virtually impossible to refer to a particular prod-
uct for purposes of comparison, criticism, point of reference or any
other such purpose without using the mark. For example, refer-
ence to a large automobile manufacturer based in Michigan would
not differentiate among the Big Three; reference to a large Japanese
manufacturer of home electronics would narrow the field to a dozen
or more companies. Much useful social and commercial discourse
would be all but impossible if speakers were under threat of an in-
fringement lawsuit every time they made reference to a person, com-
pany or product by using its trademark.
A good example of this is Volkswagenwerk Aktiengesellschaft v. Vokswagenwerk: 411 F.2d 350 (9th Cir.
Church, where we held that Volkswagen could not prevent an au- 1969)
tomobile repair shop from using its mark. We recognized that in
“advertising [the repair of Volkswagens, it] would be difficult, if not
impossible, for [Church] to avoid altogether the use of the word
‘Volkswagen’ or its abbreviation ‘VW,’ which are the normal terms
which, to the public at large, signify appellant’s cars.” Church did
not suggest to customers that he was part of the Volkswagen organi-
zation or that his repair shop was sponsored or authorized by VW;
he merely used the words “Volkswagen” and “VW” to convey infor-
mation about the types of cars he repaired. Therefore, his use of the
Volkswagen trademark was not an infringing use.
The First Circuit confronted a similar problem when the holder
of the trademark “Boston Marathon” tried to stop a television station
from using the name:
The words “Boston Marathon” do more than call a en-
542 CHAPTER 6. TRADEMARK
tion to Channel 5’s program; they also describe the event
that Channel 5 will broadcast. Common sense suggests
(consistent with the record here) that a viewer who sees
those words flash upon the screen will believe simply that
Channel 5 will show, or is showing, or has shown, the
marathon, not that Channel 5 has some special approval
from the [trademark holder] to do so. In technical trade-
mark jargon, the use of words for descriptive purposes is
called a “fair use,” and the law usually permits it even if
the words themselves also constitute a trademark.
WCVB-TV: 926 F.2d 42 (1st Cir. 1991)
WCVB-TV v. Boston Athletic Ass’n. Similarly, competitors may use a ri-
val’s trademark in advertising and other channels of communication
if the use is not false or misleading..
Cases like these are best understood as involving a non-trademark
use of a mark – a use to which the infringement laws simply do not
apply, just as videotaping television shows for private home use does
not implicate the copyright holder’s exclusive right to reproduction.
Indeed, we may generalize a class of cases where the use of the trade-
mark does not a empt to capitalize on consumer confusion or to ap-
propriate the cachet of one product for a different one. Such nomi-
native use of a mark — where the only word reasonably available to
describe a particular thing is pressed into service — lies outside the
strictures of trademark law: Because it does not implicate the source-
identification function that is the purpose of trademark, it does not
constitute unfair competition; such use is fair because it does not im-
ply sponsorship or endorsement by the trademark holder. “When
the mark is used in a way that does not deceive the public we see no
such sanctity in the word as to prevent its being used to tell the truth.”
Prestonettes: 264 U.S. 359 (1924) Prestone es, Inc. v. Coty (Holmes, J.).
To be sure, this is not the classic fair use case where the defendant
has used the plaintiff’s mark to describe the defendant’s own prod-
uct. Here, the NEW KIDS trademark is used to refer to the New Kids
themselves. We therefore do not purport to alter the test applicable
in the paradigmatic fair use case. If the defendant’s use of the plain-
tiff’s trademark refers to something other than the plaintiff’s product,
the traditional fair use inquiry will continue to govern. But, where
the defendant uses a trademark to describe the plaintiff’s product,
rather than its own, we hold that a commercial user is entitled to a
nominative fair use defense provided he meets the following three
requirements: First, the product or service in question must be one
not readily identifiable without use of the trademark; second, only so
much of the mark or marks may be used as is reasonably necessary
to identify the product or service;7 and third, the user must do noth-
7
Thus, a soft drink competitor would be entitled to compare its product to Coca-
F. DEFENSES 543
ing that would, in conjunction with the mark, suggest sponsorship or
endorsement by the trademark holder.
B.
The New Kids do not claim there was anything false or misleading
about the newspapers’ use of their mark. Rather, the first seven
causes of action, while purporting to state different claims, all hinge
on one key factual allegation: that the newspapers’ use of the New
Kids name in conducting the unauthorized polls somehow implied
that the New Kids were sponsoring the polls. It is no more reasonably
possible, however, to refer to the New Kids as an entity than it is to
refer to the Chicago Bulls, Volkswagens or the Boston Marathon with-
out using the trademark. Indeed, how could someone not conversant
with the proper names of the individual New Kids talk about the
group at all? While plaintiffs’ trademark certainly deserves protec-
tion against copycats and those who falsely claim that the New Kids
have endorsed or sponsored them, such protection does not extend
to rendering newspaper articles, conversations, polls and compara-
tive advertising impossible. The first nominative use requirement is
therefore met.
Also met are the second and third requirements. Both The Star
and USA Today reference the New Kids only to the extent necessary
to identify them as the subject of the polls; they do not use the New
Kids’ distinctive logo or anything else that isn’t needed to make the
announcements intelligible to readers. Finally, nothing in the an-
nouncements suggests joint sponsorship or endorsement by the New
Kids. The USA Today announcement implies quite the contrary by
asking whether the New Kids might be “a turn off.” The Star’s poll is
more effusive but says nothing that expressly or by fair implication
connotes endorsement or joint sponsorship on the part of the New
Kids.
The New Kids argue that, even if the newspapers are entitled to a
nominative fair use defense for the announcements, they are not en-
titled to it for the polls themselves, which were money-making enter-
prises separate and apart from the newspapers’ reporting businesses.
According to plaintiffs, defendants could have minimized the intru-
sion into their rights by using an 800 number or asking readers to
call in on normal telephone lines which would not have resulted in
a profit to the newspapers based on the conduct of the polls them-
selves.
The New Kids see this as a crucial difference, distinguishing this
case from Vokswagenwerk, WCVB-TV and other nominative use cases.
The New Kids’ argument in support of this distinction is not entirely
Cola or Coke, but would not be entitled to use Coca-Cola’s distinctive le ering.
544 CHAPTER 6. TRADEMARK
implausible: They point out that their fans, like everyone else, have
limited resources. Thus a dollar spent calling the newspapers’ 900
lines to express loyalty to the New Kids may well be a dollar not
spent on New Kids products and services, including the New Kids’
own 900 numbers. In short, plaintiffs argue that a nominative fair use
defense is inapplicable where the use in question competes directly
with that of the trademark holder.
We reject this argument. While the New Kids have a limited prop-
erty right in their name, that right does not entitle them to control
their fans’ use of their own money. Where, as here, the use does not
imply sponsorship or endorsement, the fact that it is carried on for
profit and in competition with the trademark holder’s business is be-
Ideal Publishing: 195 U.S.P.Q. 761 side the point. See, e.g., Universal City Studios, Inc. v. Ideal Publishing
(S.D.N.Y. 1977) Corp. (magazine’s use of TV program’s trademark “Hardy Boys” in
connection with photographs of show’s stars not infringing). Voting
for their favorite New Kid may be, as plaintiffs point out, a way for
fans to articulate their loyalty to the group, and this may diminish
the resources available for products and services they sponsor. But
the trademark laws do not give the New Kids the right to channel
their fans’ enthusiasm (and dollars) only into items licensed or autho-
rized by them. See Job’s Daughters. The New Kids could not use the
trademark laws to prevent the publication of an unauthorized group
biography or to censor all parodies or satires which use their name.9
We fail to see a material difference between these examples and the
use here.
Summary judgment was proper as to the first seven causes of ac-
tion because they all hinge on a theory of implied endorsement; there
was none here as the uses in question were purely nominative.
Smith v. Chanel, Inc.
402 F.2d 562 (9th Cir. 1968)
Appellant R. G. Smith, doing business as Ta’Ron, Inc., advertised a
fragrance called ‘Second Chance’ as a duplicate of appellees’ ‘Chanel
No. 5,’ at a fraction of the la er’s price.1 Appellees were granted a
preliminary injunction prohibiting any reference to Chanel No. 5 in
the promotion or sale of appellants’ product. This appeal followed.
9
Consider, for example, a cartoon which appeared in a recent edition of a hu-
mor magazine: The top panel depicts a man in medieval garb hanging a poster
announcing a performance of ”The New Kids on the Block” to an excited group of
onlookers. The lower panel shows the five New Kids, drawn in caricature, hands
tied behind their backs, kneeling before ”The Chopping Block” awaiting execution.
Cracked # 17 (inside back cover) (Aug. 1992). Cruel? No doubt — but easily within
the realm of satire and parody.
F. DEFENSES 545
The action rests upon a single advertisement published in ‘Spe-
cialty Salesmen,’ a trade journal directed to wholesale purchasers.
The advertisement offered ‘The Ta’Ron Line of Perfumes’ for sale. It
gave the seller’s address as ‘Ta’Ron Inc., 26 Harbor Cove, Mill Valley,
Calif.’ It stated that the Ta’Ron perfumes ‘duplicate 100% Perfect the
exact scent of the world’s finest and most expensive perfumes and
colognes at prices that will zoom sales to volumes you have never
before experienced.’ It repeated the claim of exact duplication in a
variety of forms.
The advertisement suggested that a ‘Blindfold Test’ be used ‘on
skeptical prospects,’ challenging them to detect any difference be-
tween a well known fragrance and the Ta’Ron ‘duplicate.’ One sug-
gested challenge was, ‘We dare you to try to detect any difference
between Chanel #5 (25.00) and Ta’Ron’s 2nd Chance. $7.00.’
In an order blank printed as part of the advertisement each Ta’Ron
fragrance was listed with the name of the well known fragrance
which it purportedly duplicated immediately beneath. Below ‘Sec-
ond Chance’ appeared ‘*(Chanel #5).’ The asterisk referred to a state-
ment at the bo om of the form reading ‘Registered Trade Name of
Original Fragrance House.’
Appellees conceded below and concede here that appellants ‘have
the right to copy, if they can, the unpatented formula of appellees’
product.’ Moreover, for the purposes of these proceedings, appellees
assume that ‘the products manufactured and advertised by (appel-
lants) are in fact equivalents of those products manufactured by ap-
pellees.’ Finally, appellees disclaim any contention that the packag-
ing or labeling of appellants’ ‘Second Chance’ is misleading or con-
546 CHAPTER 6. TRADEMARK
fusing.4
I
The principal question presented on this record is whether one who
has copied an unpatented product sold under a trademark may use
the trademark in his advertising to identify the product he has copied.
We hold that he may, and that such advertising may not be enjoined
under either the Lanham Act or the common law of unfair competi-
tion, so long as it does not contain misrepresentations or create a rea-
sonable likelihood that purchasers will be confused as to the source,
identity, or sponsorship of the advertiser’s product.
Saxlehner: 216 U.S. 375 (1910) This conclusion is supported by direct holdings in Saxlehner v.
Societe Comptoir: 299 F.2d 33 (2d Cir. Wagner and Societe Comptoir de L’Industrie Cotonniere Etablissements
1962) Boussac v. Alexander’s Dept. Stores, Inc..
In Saxlehner the copied product was a ‘bi er water’ drawn from
certain privately owned natural springs. The plaintiff sold the nat-
ural water under the name ‘Hunyadi Janos,’ a valid trademark. The
defendant was enjoined from using plaintiff’s trademark to designate
defendant’s ‘artificial’ water, but was permi ed to use it to identify
plaintiff’s natural water as the product which defendant was copying.
Justice Holmes wrote:
We see no reason for disturbing the finding of the courts
below that there was no unfair competition and no fraud.
The real intent of the plaintiff’s bill, it seems to us, is to
extend the monopoly of such trademark or tradename as
she may have to a monopoly of her type of bi er water, by
preventing manufacturers from telling the public in a way
that will be understood, what they are copying and trying
to sell. But the plaintiff has no patent for the water, and the
defendants have a right to reproduce it as nearly as they
can. They have a right to tell the public what they are do-
ing, and to get whatever share they can in the popularity
of the water by advertising that they are trying to make
the same article, and think that they succeed. If they do
not convey, but, on the contrary, exclude, the notion that
they are selling the plaintiff’s goods, it is a strong propo-
sition that when the article has a well-known name they
have not the right to explain by that name what they imi-
tate. By doing so, they are not trying to get the good will
of the name, but the good will of the goods.
4
Appellants’ product was packaged differently from appellees’, and the only
words appearing on the outside of appellants’ packages were ‘Second Chance Per-
fume by Ta’Ron.’ The same words appeared on the front of appellants’ bo les;
the words ‘Ta’Ron trademark by International Fragrances, Inc., of Dallas and New
York’ appeared on the back.
F. DEFENSES 547
In Societe Comptoir, the defendant used plaintiff’s registered trade-
marks ‘Dior’ and ‘Christian Dior’ in defendant’s advertising in iden-
tifying plaintiff’s dresses as the original creations from which defen-
dant’s dresses were copied.1 The district court refused to grant a pre-
liminary injunction.
The appellate court considered plaintiff’s rights under both the
Lanham Act and common law. Noting that the representation that
defendant’s dresses were copies of ‘Dior’ originals was apparently
truthful and that there was no evidence of deception or confusion
as to the origin or sponsorship of defendant’s garments, the court
disposed of the claim of right under the Lanham Act as follows:
The Lanham Act does not prohibit a commercial rival’s
truthfully denominating his goods a copy of a design in
the public domain, though he uses the name of the de-
signer to do so. Indeed it is difficult to see any other means
that might be employed to inform the consuming public
of the true origin of the design.
We have found no holdings by federal or California appellate courts
contrary to the rule of these cases. Moreover, the principle for which
they stand – that use of another’s trademark to identify the trademark
owner’s product in comparative advertising is not prohibited by ei-
ther statutory or common law, absent misrepresentation regarding
the products or confusion as to their source or sponsorship – is also
generally approved by secondary authorities.
The rule rests upon the traditionally accepted premise that the
only legally relevant function of a trademark is to impart informa-
tion as to the source or sponsorship of the product. Appellees argue
that protection should also be extended to the trademark’s commer-
cially more important function of embodying consumer good will cre-
ated through extensive, skillful, and costly advertising. The courts,
however, have generally confined legal protection to the trademark’s
source identification function for reasons grounded in the public pol-
icy favoring a free, competitive economy.
Preservation of the trademark as a means of identifying the trade-
mark owner’s products, implemented both by the Lanham Act and
the common law, serves an important public purpose. It makes effec-
tive competition possible in a complex, impersonal marketplace by
providing a means through which the consumer can identify prod-
ucts which please him and reward the producer with continued pa-
1
Defendant described its dresses in newspaper advertisements as copies of
Dior’s original creations. Tags were hung on each garment reading ‘Original by
Christian Dior – Alexander’s Exclusive – Paris—Adaptation.’ ‘Dior’ or ‘Christian
Dior’ appeared more than a dozen times in a singing commercial on defendant’s
television fashion show.
548 CHAPTER 6. TRADEMARK
tronage. Without some such method of product identification, in-
formed consumer choice, and hence meaningful competition in qual-
ity, could not exist. On the other hand, it has been suggested that pro-
tection of trademark values other than source identification would
create serious anti-competitive consequences with li le compensat-
ing public benefit.
As Justice Holmes wrote in Saxlehner, the practical effect of such
a rule would be to extend the monopoly of the trademark to a
monopoly of the product. The monopoly conferred by judicial protec-
tion of complete trademark exclusivity would not be preceded by ex-
amination and approval by a governmental body, as is the case with
most other government-granted monopolies. Moreover, it would not
be limited in time, but would be perpetual.
A large expenditure of money does not in itself create legally pro-
tectable rights. Appellees are not entitled to monopolize the public’s
desire for the unpatented product, even though they themselves cre-
ated that desire at great effort and expense.
Disapproval of the copyist’s opportunism may be an understand-
able first reaction, but this initial response to the problem has been
curbed in deference to the greater public good. By taking his free
ride, the copyist, albeit unintentionally, serves an important public
interest by offering comparable goods at lower prices. Appellants’
advertisement makes it clear that the product they offer is their own.
If it proves to be inferior, they, not appellees, will bear the burden of
consumer disapproval.25
We are satisfied, therefore, that both authority and reason require
a holding that in the absence of misrepresentation or confusion as to
source or sponsorship a seller in promoting his own goods may use
the trademark of another to identify the la er’s goods.
3 Exhaustion
Champion Spark Plug Co. v. Sanders
331 U.S. 125 (1947)
Petitioner is a manufacturer of spark plugs which it sells under the
trade mark ‘Champion.’ Respondents collect the used plugs, repair
and recondition them, and resell them. Respondents retain the word
‘Champion’ on the repaired or reconditioned plugs. The outside box
or carton in which the plugs are packed has stamped on it the word
25
In addition, if appellants’ specific claims of equivalence are false, appellees may
have a remedy under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). [Ed: On re-
mand, the District Court found that ”The results of gas chromatograph tests prove
that the chemical composition of ’Second Chance’ is not identical to that of ’Chanel
No. 5,’” and thus the defendant had violated § 43(a). Smith v. Chanel, No. 45647
GBH, 1973 WL 19871, at *3 (N.D. Cal. May 22, 1973).]
F. DEFENSES 549
‘Champion,’ together with the le er and figure denoting the partic-
ular style or type. They also have printed on them ‘Perfect Process
Spark Plugs Guaranteed Dependable’ and ‘Perfect Process Renewed
Spark Plugs.’ Each carton contains smaller boxes in which the plugs
are individually packed. These inside boxes also carry legends indi-
cating that the plug has been renewed. But respondent company’s
business name or address is not printed on the cartons. On each in-
dividual plug is stamped in small le ers, blue on black, the word
‘Renewed,’ which at time is almost illegible.
We are dealing here with second-hand goods. The spark plugs,
though used, are nevertheless Champion plugs and not those of an-
other make. There is evidence to support what one would suspect,
that a used spark plug which has been repaired or reconditioned
does not measure up to the specifications of a new one. But the
same would be true of a second-hand Ford or Chevrolet car. And
we would not suppose that one could be enjoined from selling a car
whose valves had been reground and whose piston rings had been
replaced unless he removed the name Ford or Chevrolet. Prestone es
was a case where toilet powders had as one of their ingredients a
powder covered by a trade mark and where perfumes which were
trade marked were rebo led and sold in smaller bo les. The Court
sustained a decree denying an injunction where the prescribed labels
told the truth. Mr. Justice Holmes stated, ”A trade-mark only gives
the right to prohibit the use of it so far as to protect the owner’s good
will against the sale of another’s product as his. *When the mark is
used in a way that does not deceive the public we see no such sanc-
tity in the word as to prevent its being used to tell the truth. It is not
taboo.”
Cases may be imagined where the reconditioning or repair would
be so extensive or so basic that it would be a misnomer to call the ar-
ticle by its original name, even though the words ‘used’ or ‘repaired’
were added. But no such practice is involved here. The repair or
reconditioning of the plugs does not give them a new design. It is
no more than a restoration, so far as possible, of their original condi-
tion. The type marks a ached by the manufacturer are determined
by the use to which the plug is to be put. But the thread size and
size of the cylinder hole into which the plug is fi ed are not affected
by the reconditioning. The heat range also has relevance to the type
marks. And there is evidence that the reconditioned plugs are infe-
rior so far as heat range and other qualities are concerned. But inferi-
ority is expected in most second-hand articles. Indeed, they generally Adequately disclosed and disclaimed?
cost the customer less. That is the case here. Inferiority is immaterial
so long as the article is clearly and distinctively sold as repaired or
reconditioned rather than as new. The result is, of course, that the
second-hand dealer gets some advantage from the trade mark. But
550 CHAPTER 6. TRADEMARK
under the rule of Prestone es that is wholly permissible so long as the
manufacturer is not identified with the inferior qualities of the prod-
uct resulting from wear and tear or the reconditioning by the dealer.
Full disclosure gives the manufacturer all the protection to which he
is entitled.
Hart v. Amazon.com, Inc.
--- F.3d ---, 2016 WL 3360639 (June 13,
2016) Plaintiff’s pro se complaint is at times difficult to understand, but
his claims ultimately revolve around the same conduct: Amazon al-
legedly engaged in counterfeiting and displayed and sold counterfeit
copies of his books featuring his tradename and trademark. Plaintiff
claims that his trademarks include the name “Henrie a Press” and
a symbol “comprised of an open book with pages emerging there-
from.”
Plaintiff does not plausibly allege that the books sold through
Amazon were anything other than authentic original copies protected
under the first-sale doctrine. Even if Amazon’s actions were not pro-
tected by the first-sale doctrine, Plaintiff’s claim alleging consumer
confusion fails for additional reasons. Amazon argues that the alle-
gation that Amazon caused confusion by suggesting that Plaintiff is
affiliated with Amazon fails to state a “false endorsement” claim un-
der the Lanham Act.
Plaintiff’s claim centers on individuals re-selling copies of his
books through Amazon’s website without Plaintiff’s permission. The
mere fact that Amazon offers a platform to third-party sellers to sell
various products and, subsequently, those individuals sold Plaintiff’s
books, does not imply that Plaintiff has endorsed Amazon or has any
specific affiliation with Amazon. This is not the reality of commerce.
As a comparison, a shopper at a bookstore does not automatically
believe that just because a used book is appearing at the store, the
author is expressly endorsing that store. The same is true for a book
that is resold on Amazon.
4 Expressive Use
Louis Vuitton Malletier v. Haute Diggity Dog
507 F.3d 252 (4th Cir. 2007)
Louis Vui on Malletier S.A., a French corporation located in Paris,
that manufactures luxury luggage, handbags, and accessories, com-
menced this action against Haute Diggity Dog, LLC, a Nevada corpo-
ration that manufactures and sells pet products nationally, alleging
trademark infringement under 15 U.S.C. § 1114(1)(a), trademark dilu-
tion under 15 U.S.C. § 1125(c), copyright infringement under 17 U.S.C.
§ 501, and related statutory and common law violations. Haute Dig-
gity Dog manufactures, among other things, plush toys on which
F. DEFENSES 551
dogs can chew, which, it claims, parody famous trademarks on lux-
ury products, including those of Louis Vui on Malletier. The particu-
lar Haute Diggity Dog chew toys in question here are small imitations
of handbags that are labeled “Chewy Vuiton” and that mimic Louis
Vui on Malletier’s LOUIS VUITTON handbags.
I
Louis Vui on Malletier S.A. (“LVM”) is a well known manufacturer
of luxury luggage, leather goods, handbags, and accessories, which
it markets and sells worldwide. In connection with the sale of its
products, LVM has adopted trademarks and trade dress that are well
recognized and have become famous and distinct. Indeed, in 2006,
Business Week ranked LOUIS VUITTON as the 17th “best brand” of all
corporations in the world and the first “best brand” for any fashion
business.
LVM has registered trademarks for “LOUIS VUITTON,” in con-
nection with luggage and ladies’ handbags (the “LOUIS VUITTON
mark”); for a stylized monogram of “LV,” in connection with trav-
eling bags and other goods (the “LV mark”); and for a monogram
canvas design consisting of a canvas with repetitions of the LV mark
along with four-pointed stars, four-pointed stars inset in curved dia-
monds, and four-pointed flowers inset in circles, in connection with
traveling bags and other products (the “Monogram Canvas mark”).
In 2002, LVM adopted a brightly-colored version of the Monogram
Canvas mark in which the LV mark and the designs were of various
colors and the background was white (the “Multicolor design”), cre-
ated in collaboration with Japanese artist Takashi Murakami. For the
Multicolor design, LVM obtained a copyright in 2004. In 2005, LVM
adopted another design consisting of a canvas with repetitions of the
LV mark and smiling cherries on a brown background (the “Cherry
design”).
As LVM points out, the Multicolor design and the Cherry design
a racted immediate and extraordinary media a ention and public-
ity in magazines such as Vogue, W, Elle, Harper’s Bazaar, Us Weekly,
Life and Style, Travel & Leisure, People, In Style, and Jane. The press
published photographs showing celebrities carrying these handbags,
LVM Multiculor bag
including Jennifer Lopez, Madonna, Eve, Elizabeth Hurley, Carmen
Electra, and Anna Kournikova, among others. When the Multicolor
design first appeared in 2003, the magazines typically reported, “The
Murakami designs for Louis Vui on, which were the hit of the sum-
mer, came with hefty price tags and a long waiting list.” People Mag-
azine said, “the wait list is in the thousands.” The handbags retailed
in the range of $995 for a medium handbag to $4500 for a large travel
bag. The medium size handbag that appears to be the model for the
“Chewy Vuiton” dog toy retailed for $1190. The Cherry design ap-
552 CHAPTER 6. TRADEMARK
peared in 2005, and the handbags including that design were priced
similarly — in the range of $995 to $2740. LVM does not currently
market products using the Cherry design.
The original LOUIS VUITTON, LV, and Monogram Canvas
marks, however, have been used as identifiers of LVM products con-
tinuously since 1896.
During the period 2003-2005, LVM spent more than $48 million ad-
vertising products using its marks and designs, including more than
$4 million for the Multicolor design. It sells its products exclusively
in LVM stores and in its own instore boutiques that are contained
within department stores such as Saks Fifth Avenue, Bloomingdale’s,
Neiman Marcus, and Macy’s. LVM also advertises its products on
the Internet through the specific websites www.louisvui on.com and
www.eluxury.com.
Although be er known for its handbags and luggage, LVM also
markets a limited selection of luxury pet accessories – collars, leashes,
and dog carriers – which bear the Monogram Canvas mark and the
Multicolor design. These items range in price from approximately
$200 to $1600. LVM does not make dog toys.
Haute Diggity Dog, LLC, which is a relatively small and relatively
new business located in Nevada, manufactures and sells nationally
– primarily through pet stores – a line of pet chew toys and beds
whose names parody elegant high-end brands of products such as
perfume, cars, shoes, sparkling wine, and handbags. These include
— in addition to Chewy Vuiton (LOUIS VUITTON) — Chewnel No.
5 (Chanel No. 5), Furcedes (Mercedes), Jimmy Chew (Jimmy Choo),
Dog Perignonn (Dom Perignon), Sniffany & Co. (Tiffany & Co.),
and Dogior (Dior). The chew toys and pet beds are plush, made of
polyester, and have a shape and design that loosely imitate the sig-
nature product of the targeted brand. They are mostly distributed
and sold through pet stores, although one or two Macy’s stores car-
ries Haute Diggity Dog’s products. The dog toys are generally sold
for less than $20, although larger versions of some of Haute Diggity
Dog’s plush dog beds sell for more than $100.
Haute Diggity Dog’s “Chewy Vuiton” dog toys, in particular,
loosely resemble miniature handbags and undisputedly evoke LVM
handbags of similar shape, design, and color.
In lieu of the LOUIS VUITTON mark, the dog toy uses “Chewy
Vuiton”; in lieu of the LV mark, it uses “CV”; and the other symbols
and colors employed are imitations, but not exact ones, of those used
in the LVM Multicolor and Cherry designs.
II
LVM contends first that Haute Diggity Dog’s marketing and sale of
Chewy Vuitton dog toy its “Chewy Vuiton” dog toys infringe its trademarks because the ad-
F. DEFENSES 553
vertising and sale of the “Chewy Vuiton” dog toys is likely to cause
confusion.
To prove trademark infringement, LVM must show (1) that it
owns a valid and protectable mark; (2) that Haute Diggity Dog uses a
“re-production, counterfeit, copy, or colorable imitation” of that mark
in commerce and without LVM’s consent; and (3) that Haute Diggity
Dog’s use is likely to cause confusion. The validity and protectabil-
ity of LVM’s marks are not at issue in this case, nor is the fact that
Haute Diggity Dog uses a colorable imitation of LVM’s mark. There-
fore, we give the first two elements no further a ention. To deter-
mine whether the “Chewy Vuiton” product line creates a likelihood
of confusion, we have identified several nonexclusive factors to con-
sider: (1) the strength or distinctiveness of the plaintiff’s mark; (2) the
similarity of the two marks; (3) the similarity of the goods or services
the marks identify; (4) the similarity of the facilities the two parties
use in their businesses; (5) the similarity of the advertising used by
the two parties; (6) the defendant’s intent; and (7) actual confusion.
See Pizzeria Uno Corp. v. Temple. These Pizzeria Uno factors are not al- Pizzeria Uno: 747 F.2d 1522 (4th Cir.
ways weighted equally, and not all factors are relevant in every case. 1984)
Because Haute Diggity Dog’s arguments with respect to the Pizze-
ria Uno factors depend to a great extent on whether its products and
marks are successful parodies, we consider first whether Haute Dig-
gity Dog’s products, marks, and trade dress are indeed successful
parodies of LVM’s marks and trade dress.
For trademark purposes, a parody is defined as a simple form
of entertainment conveyed by juxtaposing the irreverent representa-
tion of the trademark with the idealized image created by the mark’s
owner. A parody must convey two simultaneous – and contradictory
– messages: that it is the original, but also that it is not the original
and is instead a parody. This second message must not only differ-
entiate the alleged parody from the original but must also commu-
nicate some articulable element of satire, ridicule, joking, or amuse-
ment. Thus, a parody relies upon a difference from the original mark,
presumably a humorous difference, in order to produce its desired ef-
fect. Jordache Enterprises, Inc. v. Hogg Wyld, Ltd. (finding the use of Jordache: 828 F.2d 1482 (10th Cir. 1987)
“Lardashe” jeans for larger women to be a successful and permissible
parody of “Jordache” jeans).
When applying the PETA criteria to the facts of this case, we agree
with the district court that the “Chewy Vuiton” dog toys are success-
ful parodies of LVM handbags and the LVM marks and trade dress
used in connection with the marketing and sale of those handbags.
First, the pet chew toy is obviously an irreverent, and indeed inten-
tional, representation of an LVM handbag, albeit much smaller and
coarser. The dog toy is shaped roughly like a handbag; its name
“Chewy Vuiton” sounds like and rhymes with LOUIS VUITTON; its
554 CHAPTER 6. TRADEMARK
monogram CV mimics LVM’s LV mark; the repetitious design clearly
imitates the design on the LVM handbag; and the coloring is simi-
lar. In short, the dog toy is a small, plush imitation of an LVM hand-
bag carried by women, which invokes the marks and design of the
handbag, albeit irreverently and incompletely. No one can doubt that
LVM handbags are the target of the imitation by Haute Diggity Dog’s
“Chewy Vuiton” dog toys.
At the same time, no one can doubt also that the “Chewy Vuiton”
dog toy is not the “idealized image” of the mark created by LVM. The
differences are immediate, beginning with the fact that the “Chewy
Vuiton” product is a dog toy, not an expensive, luxury LOUIS VUIT-
TON handbag. The toy is smaller, it is plush, and virtually all of
its designs differ. Thus, “Chewy Vuiton” is not LOUIS VUITTON
(“Chewy” is not “LOUIS” and “Vuiton” is not “VUITTON,” with
its two Ts); CV is not LV; the designs on the dog toy are simplified
and crude, not detailed and distinguished. The toys are inexpensive;
the handbags are expensive and marketed to be expensive. And, of
course, as a dog toy, one must buy it with pet supplies and cannot
buy it at an exclusive LVM store or boutique within a department
store. In short, the Haute Diggity Dog “Chewy Vuiton” dog toy un-
doubtedly and deliberately conjures up the famous LVM marks and
trade dress, but at the same time, it communicates that it is not the
LVM product.
Finally, the juxtaposition of the similar and dissimilar – the irrev-
erent representation and the idealized image of an LVM handbag –
immediately conveys a joking and amusing parody. The furry lit-
tle “Chewy Vuiton” imitation, as something to be chewed by a dog,
pokes fun at the elegance and expensiveness of a LOUIS VUITTON
handbag, which must not be chewed by a dog. The LVM handbag
is provided for the most elegant and well-to-do celebrity, to proudly
display to the public and the press, whereas the imitation “Chewy
Vuiton” “handbag” is designed to mock the celebrity and be used by
a dog. The dog toy irreverently presents haute couture as an object
for casual canine destruction. The satire is unmistakable. The dog toy
is a comment on the rich and famous, on the LOUIS VUITTON name
and related marks, and on conspicuous consumption in general. This
parody is enhanced by the fact that “Chewy Vuiton” dog toys are
sold with similar parodies of other famous and expensive brands —
“Chewnel No. 5” targeting “Chanel No. 5”; “Dog Perignonn” tar-
geting “Dom Perignon”; and “Sniffany & Co.” targeting “Tiffany &
Co.”
We conclude that the PETA criteria are amply satisfied in this case
and that the “Chewy Vuiton” dog toys convey just enough of the
original design to allow the consumer to appreciate the point of par-
ody, but stop well short of appropriating the entire marks that LVM
F. DEFENSES 555
claims.
Finding that Haute Diggity Dog’s parody is successful, however,
does not end the inquiry into whether Haute Diggity Dog’s “Chewy
Vuiton” products create a likelihood of confusion. See McCarthy
(“There are confusing parodies and non-confusing parodies. All they
have in common is an a empt at humor through the use of some-
one else’s trademark”). The finding of a successful parody only influ-
ences the way in which the Pizzeria Uno factors are applied. Indeed,
it becomes apparent that an effective parody will actually diminish
the likelihood of confusion, while an ineffective parody does not. We
now turn to the Pizzeria Uno factors.
A
As to the first Pizzeria Uno factor, the parties agree that LVM’s marks
are strong and widely recognized. They do not agree, however, as to
the consequences of this fact. LVM maintains that a strong, famous
mark is entitled, as a ma er of law, to broad protection. While it
is true that finding a mark to be strong and famous usually favors
the plaintiff in a trademark infringement case, the opposite may be
true when a legitimate claim of parody is involved. As the district
court observed, “In cases of parody, a strong mark’s fame and popu-
larity is precisely the mechanism by which likelihood of confusion is
avoided.”
We agree with the district court. It is a ma er of common sense
that the strength of a famous mark allows consumers immediately
to perceive the target of the parody, while simultaneously allowing
them to recognize the changes to the mark that make the parody
funny or biting. See Tommy Hilfiger Licensing, Inc. v. Nature Labs, LLC Tommy Hilfiger: 221 F.Supp.2d 410
(noting that the strength of the TOMMY HILFIGER fashion mark did (S.D.N.Y. 2002)
not favor the mark’s owner in an infringement case against TIMMY
HOLEDIGGER novelty pet perfume). In this case, precisely because
LOUIS VUITTON is so strong a mark and so well recognized as a
luxury handbag brand from LVM, consumers readily recognize that
when they see a “Chewy Vuiton” pet toy, they see a parody. Thus,
the strength of LVM’s marks in this case does not help LVM establish
a likelihood of confusion.
B
With respect to the second Pizzeria Uno factor, the similarities be-
tween the marks, the usage by Haute Diggity Dog again converts
what might be a problem for Haute Diggity Dog into a disfavored
conclusion for LVM.
Haute Diggity Dog concedes that its marks are and were designed
to be somewhat similar to LVM’s marks. But that is the essence of a
556 CHAPTER 6. TRADEMARK
parody — the invocation of a famous mark in the consumer’s mind,
so long as the distinction between the marks is also readily recog-
nized. While a trademark parody necessarily copies enough of the
original design to bring it to mind as a target, a successful parody
also distinguishes itself and, because of the implicit message commu-
nicated by the parody, allows the consumer to appreciate it.
In concluding that Haute Diggity Dog has a successful parody,
we have impliedly concluded that Haute Diggity Dog appropriately
mimicked a part of the LVM marks, but at the same time sufficiently
distinguished its own product to communicate the satire. The dif-
ferences are sufficiently obvious and the parody sufficiently blatant
that a consumer encountering a “Chewy Vuiton” dog toy would not
mistake its source or sponsorship on the basis of mark similarity.
This conclusion is reinforced when we consider how the parties
actually use their marks in the marketplace. The record amply sup-
ports Haute Diggity Dog’s contention that its “Chewy Vuiton” toys
for dogs are generally sold alongside other pet products, as well as
toys that parody other luxury brands, whereas LVM markets its hand-
bags as a top-end luxury item to be purchased only in its own stores
or in its own boutiques within department stores. These marketing
channels further emphasize that “Chewy Vuiton” dog toys are not,
in fact, LOUIS VUITTON products.
C
Nor does LVM find support from the third Pizzeria Uno factor, the
similarity of the products themselves. It is obvious that a “Chewy
Vuiton” plush imitation handbag, which does not open and is man-
ufactured as a dog toy, is not a LOUIS VUITTON handbag sold by
LVM. Even LVM’s most proximate products – dog collars, leashes,
and pet carriers – are fashion accessories, not dog toys. As Haute
Diggity Dog points out, LVM does not make pet chew toys and likely
does not intend to do so in the future. Even if LVM were to make dog
toys in the future, the fact remains that the products at issue are not
similar in any relevant respect, and this factor does not favor LVM.
D
The fourth and fifth Pizzeria Uno factors, relating to the similarity
of facilities and advertising channels, have already been mentioned.
LVM products are sold exclusively through its own stores or its own
boutiques within department stores. It also sells its products on the
Internet through an LVM-authorized website. In contrast, “Chewy
Vuiton” products are sold primarily through traditional and Inter-
net pet stores, although they might also be sold in some depart-
ment stores. The record demonstrates that both LVM handbags and
F. DEFENSES 557
“Chewy Vuiton” dog toys are sold at a Macy’s department store in
New York. As a general ma er, however, there is li le overlap in the
individual retail stores selling the brands.
Likewise with respect to advertising, there is li le or no overlap.
LVM markets LOUIS VUITTON handbags through high-end fashion
magazines, while “Chewy Vuiton” products are advertised primarily
through pet-supply channels.
The overlap in facilities and advertising demonstrated by the
record is so minimal as to be practically nonexistent. “Chewy Vuiton”
toys and LOUIS VUITTON products are neither sold nor advertised
in the same way, and the de minimis overlap lends insignificant sup-
port to LVM on this factor.
E
The sixth factor, relating to Haute Diggity Dog’s intent, again is neu-
tralized by the fact that Haute Diggity Dog markets a parody of LVM
products. As other courts have recognized, An intent to parody is not
an intent to confuse the public. Despite Haute Diggity Dog’s obvious
intent to profit from its use of parodies, this action does not amount
to a bad faith intent to create consumer confusion. To the contrary,
the intent is to do just the opposite — to evoke a humorous, satiri-
cal association that distinguishes the products. This factor does not
favor LVM.
F
On the actual confusion factor, it is well established that no actual
confusion is required to prove a case of trademark infringement, al-
though the presence of actual confusion can be persuasive evidence
relating to a likelihood of confusion.
While LVM conceded in the district court that there was no evi-
dence of actual confusion, on appeal it points to incidents where re-
tailers misspelled “Chewy Vuiton” on invoices or order forms, using
two Ts instead of one. Many of these invoices also reflect simultane-
ous orders for multiple types of Haute Diggity Dog parody products,
which belies the notion that any actual confusion existed as to the
source of “Chewy Vuiton” plush toys. The misspellings pointed out
by LVM are far more likely in this context to indicate confusion over
how to spell the product name than any confusion over the source or
sponsorship of the “Chewy Vuiton” dog toys. We conclude that this
factor favors Haute Diggity Dog.
In sum, the likelihood-of-confusion factors substantially favor
Haute Diggity Dog. But consideration of these factors is only a proxy
for the ultimate statutory test of whether Haute Diggity Dog’s mar-
keting, sale, and distribution of “Chewy Vuiton” dog toys is likely
558 CHAPTER 6. TRADEMARK
to cause confusion. Recognizing that “Chewy Vuiton” is an obvious
parody and applying the Pizzeria Uno factors, we conclude that LVM
has failed to demonstrate any likelihood of confusion. Accordingly,
we affirm the district court’s grant of summary judgment in favor of
Haute Diggity Dog on the issue of trademark infringement.
III
LVM also contends that Haute Diggity Dog’s advertising, sale, and
distribution of the “Chewy Vuiton” dog toys dilutes its LOUIS VUIT-
TON, LV, and Monogram Canvas marks, which are famous and dis-
tinctive. It argues, “Before the district court’s decision, Vui on’s fa-
mous marks were unblurred by any third party trademark use.” “Al-
lowing defendants to become the first to use similar marks will ob-
viously blur and dilute the Vui on Marks.” It also contends that
“Chewy Vuiton” dog toys are likely to tarnish LVM’s marks because
they “pose a choking hazard for some dogs.”
A
We address first LVM’s claim for dilution by blurring.
We begin by noting that 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. Al-
though the TDRA does provide that fair use is a complete defense and
allows that a parody can be considered fair use, it does not extend the
fair use defense to parodies used as a trademark.
The TDRA, however, does not require a court to ignore the exis-
tence of a parody that is used as a trademark, and it does not pre-
clude a court from considering parody as part of the circumstances
to be considered for determining whether the plaintiff has made out
a claim for dilution by blurring. Indeed, the statute permits a court
to consider “all relevant factors,” including the six factors supplied
in § 1125(c)(2)(B).
In sum, while a defendant’s use of a parody as a mark does not
support a “fair use” defense, it may be considered in determining
whether the plaintiff-owner of a famous mark has proved its claim
that the defendant’s use of a parody mark is likely to impair the dis-
tinctiveness of the famous mark.
In the case before us, when considering factors (ii), (iii), and (iv),
it is readily apparent, indeed conceded by Haute Diggity Dog, that
LVM’s marks are distinctive, famous, and strong. The LOUIS VUIT-
TON mark is well known and is commonly identified as a brand
of the great Parisian fashion house, Louis Vui on Malletier. So too
are its other marks and designs, which are invariably used with the
LOUIS VUITTON mark. It may not be too strong to refer to these
famous marks as icons of high fashion.
F. DEFENSES 559
While the establishment of these facts satisfies essential elements
of LVM’s dilution claim, the facts impose on LVM an increased bur-
den to demonstrate that the distinctiveness of its famous marks is
likely to be impaired by a successful parody. Even as Haute Diggity
Dog’s parody mimics the famous mark, it communicates simultane-
ously that it is not the famous mark, but is only satirizing it. And
because the famous mark is particularly strong and distinctive, it be-
comes more likely that a parody will not impair the distinctiveness of
the mark. In short, as Haute Diggity Dog’s “Chewy Vuiton” marks
are a successful parody, we conclude that they will not blur the dis-
tinctiveness of the famous mark as a unique identifier of its source.
It is important to note, however, that this might not be true if the
parody is so similar to the famous mark that it likely could be con-
strued as actual use of the famous mark itself. Factor (i) directs an
inquiry into the “degree of similarity between the junior mark and
the famous mark.” If Haute Diggity Dog used the actual marks of
LVM (as a parody or otherwise), it could dilute LVM’s marks by blur-
ring, regardless of whether Haute Diggity Dog’s use was confusingly
similar, whether it was in competition with LVM, or whether LVM
sustained actual injury. Thus, the use of DUPONT shoes, BUICK
aspirin, and KODAK pianos would be actionable under the TDRA
because the unauthorized use of the famous marks themselves on
unrelated goods might diminish the capacity of these trademarks to
distinctively identify a single source. This is true even though a con-
sumer would be unlikely to confuse the manufacturer of KODAK
film with the hypothetical producer of KODAK pianos.
But in this case, Haute Diggity Dog mimicked the famous marks;
it did not come so close to them as to destroy the success of its parody
and, more importantly, to diminish the LVM marks’ capacity to iden-
tify a single source. Haute Diggity Dog designed a pet chew toy to
imitate and suggest, but not use, the marks of a high-fashion LOUIS
VUITTON handbag. It used “Chewy Vuiton” to mimic “LOUIS
VUITTON”; it used “CV” to mimic “LV”; and it adopted imperfectly
the items of LVM’s designs. We conclude that these uses by Haute
Diggity Dog were not so similar as to be likely to impair the distinc-
tiveness of LVM’s famous marks.
B
LVM’s claim for dilution by tarnishment does not require an ex-
tended discussion. To establish its claim for dilution by tarnishment,
LVM must show, in lieu of blurring, that Haute Diggity Dog’s use of
the “Chewy Vuiton” mark on dog toys harms the reputation of the
LOUIS VUITTON mark and LVM’s other marks. LVM argues that the
possibility that a dog could choke on a “Chewy Vuiton” toy causes
this harm. LVM has, however, provided no record support for its as-
560 CHAPTER 6. TRADEMARK
sertion. It relies only on speculation about whether a dog could choke
on the chew toys and a logical concession that a $10 dog toy made in
China was of “inferior quality” to the $1190 LOUIS VUITTON hand-
bag. There is no record support, however, that any dog has choked
on a pet chew toy, such as a “Chewy Vuiton” toy, or that there is any
basis from which to conclude that a dog would likely choke on such
a toy.
We agree with the district court that LVM failed to demonstrate a
claim for dilution by tarnishment.
868 F. Supp. 2d 172 (S.D.N.Y. 2012)
Louis Vuitton Mallatier v. Warner Bros.
On December 22, 2011, Louis Vui on Malletier, S.A. (“Louis Vuit-
ton”) filed a complaint against Warner Bros. Entertainment Inc.
(“Warner Bros.”), focusing on Warner Bros.’ use of a travel bag in
the film The Hangover: Part II that allegedly infringes upon Louis
Vui on’s trademarks. Plaintiff’s complaint asserts three claims for re-
lief: (1) false designation of origin/unfair competition in violation of §
43(a) of the Lanham Act; (2) common law unfair competition; and (3)
trademark dilution in violation N.Y. Gen. Bus. Law 360-l. On March
14, 2012, defendant filed a motion to dismiss the complaint with prej-
udice for failure to state a claim upon which relief can be granted
pursuant to Fed.R.Civ.P. 12(b). The court has fully considered the
parties’ arguments, and for the reasons set forth below, defendant’s
motion is granted.
BACKGROUND
Louis Vui on is one of the premier luxury fashion houses in the
world, renowned for, among other things, its high-quality luggage,
trunks, and handbags. Louis Vui on’s principle trademark is the
highly-distinctive and famous Toile Monogram. Registered in 1932,
this trademark, along with its component marks (collectively, the
“LVM Marks”), are famous, distinctive, and incontestable.
Louis Vui on has invested millions of dollars and decades of time
and effort to create a global recognition that causes consumers to as-
sociate the LVM Marks with high-quality, luxury goods emanating
exclusively from Louis Vui on.
Warner Bros. is one of the oldest and most respected producers of
motion pictures and television shows in the country and the world.
In the summer of 2011, Warner Bros. released The Hangover: Part
II (“the Film”), the sequel to the 2009 hit bachelor-party-gone-awry-
comedy The Hangover. The Film has grossed roughly $580 million
globally as of the date of the Complaint, becoming the highest-gross
R-rated comedy of all time and one of the highest grossing movies in
2011.
Diophy is a company that creates products which use a mono-
F. DEFENSES 561
gram design that is a knock-off of the famous Toile Monogram
(the “Knock-Off Monogram Design”). The Diophy products bearing
the Knock-Off Monogram Design have been extensively distributed
throughout the United States, causing enormous harm to Louis Vuit-
ton. Despite the inferior quality of Diophy’s products, demand for
its products bearing the Knock-Off Monogram Design remains high
because they are far less expensive than genuine Louis Vui on prod-
ucts.
A. The Airport Scene
As alleged in the complaint, in one early scene in the Film the “four
main characters in Los Angeles International Airport before a flight to
Thailand for the character Stu’s bachelor party and wedding.” “[A]s
the characters are walking through the airport, a porter is pushing
on a dolly what appears to be Louis Vui on trunks, some hard-sided
luggage, and two Louis Vui on Keepall travel bags.”) Alan, one of
the characters, is carrying what appears to be a matching over-the-
shoulder Louis Vui on “Keepall” bag, but it is actually an infringing
Diophy bag.1 Moments later, Alan is seen si ing on a bench in the
airport lounge and places his bag (i.e., the Diophy bag) on the empty
seat next to him. Stu, who is si ing in the chair to the other side of the
bag, moves the bag so that Teddy, Stu’s future brother-in-law, can sit
down between him and Alan. (Id.) Alan reacts by saying: “Careful
that is ... that is a Lewis Vui on.” No other reference to Louis Vui on
or the Diophy bag is made after this point.
After the movie was released in theaters, Louis Vui on sent
Warner Bros. a cease and desist le er noting its objection to the use of
the Diophy bag in the Film. Despite being informed of its objection,
on December 6, 2011, Warner Bros. released the Film in the United
States on DVD and Blu-Ray. The complaint alleges that “many con-
sumers believed the Diophy [b]ag” used in the Film “was, in fact, a
genuine Louis Vui on,” and that Louis Vui on consented to Warner Still from The Hangover: part II
Bros.’ “misrepresentation” that the Diophy bag was a genuine Louis
Vui on product. Louis Vui on claims that its harm has been “exac-
erbated by the prominent use of the aforementioned scenes and the
LVM Marks in commercials and advertisements for the [F]ilm,” and
that Alan’s “Lewis Vui on” line has “become an oft-repeated and
hallmark quote from the movie.” Louis Vui on a aches to the com-
plaint, as Exhibit E, what it claims are “[r]epresentative Internet refer-
ences and blog excerpts” demonstrating that consumers mistakenly
believe that the Diophy bag is a genuine Louis Vui on bag.2
1
Warner Bros. does not dispute for the purposes of this motion that Louis Vuit-
ton’s representations with respect to the source of the bag are accurate.
2
Although the Court takes as true the allegations of the complaint, none of the
562 CHAPTER 6. TRADEMARK
B. The Present Motion
It is instructive to consider what this case is about and what it is not.
Louis Vui on does not object to Warner Bros.’ unauthorized use of
the LVM Marks or reference to the name Louis Vui on in the Film.
Nor does Louis Vui on claim that Warner Bros. misled the public
into believing that Louis Vui on sponsored or was affiliated with
the Film. Rather, Louis Vui on contends that Warner Bros. imper-
missibly used a third-party’s bag that allegedly infringes on the LVM
Marks. On the basis of Warner Bros.’ use of the allegedly infringing
Diophy bag in the Film, Louis Vui on asserts three causes of action:
(1) false designation of origin/unfair competition in violation of 15
U.S.C. § 1125(a), (2) common law unfair competition,4 and (3) trade-
mark dilution in violation of New York General Business Law § 360-l.
Warner Bros. now moves to dismiss the complaint in its entirety
on the ground that its use of the Diophy bag in the Film is protected
Rogers: 875 F.2d 994 (2d Cir.1989) by the First Amendment under the framework established by Rogers
v. Grimaldi.
DISCUSSION …
1. First Amendment
In Rogers, the Second Circuit held that the Lanham Act is inapplica-
ble to “artistic works” as long as the defendant’s use of the mark is
(1) “artistically relevant” to the work and (2) not “explicitly mislead-
ing” as to the source or content of the work. Louis Vui on does not
dispute that Warner Bros.’ challenged use of the mark is noncommer-
cial, placing it firmly within the purview of an “artistic work” under
Rogers. a. Artistic Relevance
The threshold for “artistic relevance” is purposely low and will be sat-
isfied unless the use has no artistic relevance to the underlying work
whatsoever. The artistic relevance prong ensures that the defendant
intended an artistic – i.e., noncommercial – association with the plain-
tiff’s mark, as opposed to one in which the defendant intends to as-
sociate with the mark to exploit the mark’s popularity and good will.
See Rogers (finding that the defendant satisfied the artistic relevance
prong where its use of the trademark was “not arbitrarily chosen just
Internet references and blog excerpts a ached to the complaint in Exhibit E show
that anyone is confused or mistaken into believing that the Diophy bag was a real
Louis Vui on bag. In one blog post, a commenter notes that the luggage on the cart
is real, but the bag carried by Alan is a “replica.” Although a few other posts and
comments refer to the bags generally as Louis Vui on bags, no one else specifically
writes about Alan’s bag, let alone its authenticity.
4
The standards for § 43(a) claims of the Lanham Act and common law unfair
competition claims are almost indistinguishable.
F. DEFENSES 563
to exploit the publicity value of [the plaintiffs’ mark] but instead ha[d]
genuine relevance to the film’s story”).
Warner Bros.’ use of the Diophy bag meets this low threshold.
Alan’s terse remark to Teddy to “[be] [c]areful” because his bag “is
a Lewis Vui on” comes across as snobbish only because the public
signifies Louis Vui on – to which the Diophy bag looks confusingly
similar – with luxury and a high society lifestyle. His remark also
comes across as funny because he mispronounces the French “Louis”
like the English “Lewis,” and ironic because he cannot correctly pro-
nounce the brand name of one of his expensive possessions, adding
to the image of Alan as a socially inept and comically misinformed
character. This scene also introduces the comedic tension between
Alan and Teddy that appears throughout the Film.
Louis Vui on contends that the Court cannot determine that the
use of the Diophy bag was artistically relevant until after discov-
ery. Specifically, Louis Vui on maintains that it should be able to re-
view the script and depose the Film’s creators to determine whether
Warner Bros. intended to use an authentic Louis Vui on bag or Dio-
phy’s knock-off bag. However, the significance of the airport scene
relies on Alan’s bag – authentic or not – looking like a Louis Vui on
bag. Louis Vui on does not dispute this was Warner Bros.’ intention,
and therefore the discovery it seeks is irrelevant. The Court is satis-
fied that Warner Bros.’ use of the Diophy bag (whether intentional or
inadvertent) was intended to create an artistic association with Louis
Vui on, and there is no indication that its use was commercially mo-
tivated. .11
Accordingly, the Court concludes that the use of the Diophy bag
has some artistic relevance to the plot of the Film.
b. Explicitly Misleading
11
For this reason, the present case is distinguishable from the cases cited by Louis
Vui on. In those cases, the court disbelieved the defendant’s claim that a commu-
nicative message was intended and/or expressed concern that the mark’s use was
commercially motivated. See Am. Dairy Queen Corp. v. New Line Prods., Inc., 35
F. Supp. 2d 727, (D. Minn. 1998) (defendant movie producers’ position was that
their proposed movie title [Ed: Dairy Queens] was not “designed to evoke or even
suggest any relationship at all to [plaintiff’s] trademarked name or any of its prod-
ucts”); Sherwood 48 Assocs. v. Sony Corp. of Am., 76 Fed. Appx. 389, 392 (2d Cir.
2003) (plaintiffs alleged that the defendant altered the plaintiffs’ marks “to gener-
ate revenue for their film,” and the defendant had not pled that the alteration had
“at least some artistic relevance in order to assert a valid First Amendment defense”
[Ed: the producers of the movie Spider-Man digitally altered the exterior of three
buildings in a scene filmed in New York’s Times Square.]); Parks v. LaFace Records,
329 F.3d 437, (6th Cir 2003) (finding that “reasonable persons could conclude that
there is no relationship of any kind between Rosa Park’s name and the content of
the song [Ed: “Rosa Parks” by OutKast],” and noting that the “marketing power”
of the song’s title “unquestionably enhanced the song’s potential sale to the con-
suming public”).
564 CHAPTER 6. TRADEMARK
Since using the Diophy bag has some relevance to the Film, Warner
Bros.’ use of it is unprotected only if it explicitly misleads as to the
source or the content of the work. The relevant question is whether
the defendant’s use of the mark is misleading in the sense that it in-
duces members of the public to believe the work] was prepared or
otherwise authorized by the plaintiff. Only a particularly compelling
finding of likelihood of confusion can overcome the First Amend-
ment interests.
Rogers and the cases adopting its holding have consistently
framed the applicable standard in terms of confusion as to the defen-
dant’s artistic work. See Rogers (“The title ‘Ginger and Fred’ contains
no explicit indication that Rogers endorsed the [defendant’s] film or
had a role in producing it.”).
It is not a coincidence that courts frame the confusion in relation
to the defendant’s artistic work, and not to someone else’s. This nar-
row construction of the Lanham Act accommodates the public’s in-
terest in free expression by restricting its application to those situa-
tions that present the greatest risk of consumer confusion: namely,
when trademarks are used to dupe consumers into buying a product
they mistakenly believe is sponsored by the trademark owner. When
this concern is present it will generally outweigh the public’s interest
in free expression. However, if a trademark is not used, in any di-
rect sense, to designate the source or sponsorship of the defendant’s
work, then “he consumer interest in avoiding deception is too slight
to warrant application of the Lanham Act.
Here, the complaint alleges two distinct theories of confusion: (1)
that consumers will be confused into believing that the Diophy bag
is really a genuine Louis Vui on bag; and (2) that Louis Vui on ap-
proved the use of the Diophy bag in the Film. However, even draw-
ing all reasonable inferences in the light most favorable to Louis Vuit-
ton, as the Court is required to do, neither of these allegations in-
volves confusion as to Warner Bros.’ artistic work. Specifically, Louis
Vui on does not allege that Warner Bros. used the Diophy bag in or-
der to mislead consumers into believing that Louis Vui on produced
or endorsed the Film. Therefore, the complaint fails to even allege the
type of confusion that could potentially overcome the Rogers protec-
tion.
Even if the Court assumes, arguendo, that Louis Vui on has
stated a cognizable claim of confusion, its claim would fail anyway.
The Second Circuit in Rogers emphasized that when First Amend-
ment values are involved, courts should narrowly construe the Lan-
ham Act and weigh the public interest in free expression against the
public interest in avoiding customer confusion. As such, where an
expressive work is alleged to infringe a trademark, the likelihood of
confusion must be particularly compelling.
F. DEFENSES 565
The Court concludes that Louis Vui on’s allegations of confu-
sion are not plausible, let alone “particularly compelling.” First, it
is highly unlikely that an appreciable number of people watching the
Film would even notice that Alan’s bag is a knock-off. Cf. . Got-
tlieb (no confusion of plaintiff sponsoring defendant’s film where “it
would be difficult for even a keen observer to pick out [plaintiff’s]
trademark” since “it appears in the background of the scene” and “oc-
cupies only a minute fraction [of] the frame for three segments lasting
approximately three seconds each”). In this regard, Louis Vui on is
trying to have it both ways: arguing that the Diophy bags are so simi-
lar as to create consumer confusion but at the same time so obviously
dissimilar that someone watching the Film would notice the slightly
different symbols used on the Diophy bag. Yet, the Diophy bag ap-
pears on screen for no more than a few seconds at a time and for less
than thirty seconds in total, and when it is on screen, it is usually in
the background, out of focus, or partially obscured by other things.
Like the appearance of the plaintiff’s mark in Go lieb, the Court finds
that the difference between the authentic and knock-off bag is so diffi-
cult to even notice, that a claim of confusion under the Lanham Act is
simply not plausible. Furthermore, Louis Vui on’s position assumes
that viewers of the Film would take seriously enough Alan’s state-
ments about designer handbags (even about those he does not cor-
rectly pronounce) that they would a ribute his views to the company
that produced the Film. This assumption is hardly conceivable, and
it does not cross the line into the realm of plausibility. Lastly, Louis
Vui on is objecting to a statement made by a fictional character in
a fictional movie, which it characterizes as an affirmative misrepre-
sentation. However, this assumes that the fictional Alan character
knew that his bag was a knock-off; otherwise, he would simply be
(innocently) misinformed about the origin of his bag. For these rea-
sons, the Court concludes that the likelihood of confusion is at best
minimal, and when balanced against the First Amendment concerns
implicated here, it is not nearly significant enough to be considered
particularly compelling.
Louis Vui on maintains that the Rogers test cannot be assessed
on a motion to dismiss. The Court disagrees. Although many courts
have considered the Rogers test on a summary judgment motion, not
on a motion to dismiss, the circuit has never stated that a court cannot
properly apply the Rogers test (or the likelihood of confusion factors)
on a motion to dismiss. In fact, the Second Circuit has suggested that
it would be appropriate where the court is satisfied that the products
or marks are so dissimilar that no question of fact is presented. In the
context of a motion to dismiss, courts have disposed of trademark
claims where simply looking at the work itself, and the context in
which it appears, demonstrates how implausible it is that a viewer
566 CHAPTER 6. TRADEMARK
will be confused into believing that the plaintiff endorsed the defen-
dant’s work (and without relying on the likelihood of confusion fac-
Stewart Surfboards: No. 10-cv-2982, tors to do so). See, e.g., Stewart Sur oards, Inc. v. Disney Book Group,
slip. op. (C.D. Cal. May 11, 2011) LLC (no likelihood of confusion that readers would believe that plain-
tiff sur oard manufacturer endorsed a Hannah Montana book be-
cause one of its sur oards appeared on the back cover); Go lieb (no
likelihood of confusion that viewers would believe plaintiff pinball
machine owner endorsed the movie “What Women Want” because
Burnett: 491 F.Supp.2d 962 (C.D. Cal. it appeared in the background of a few scenes); Burne v. Twentieth
2007) Century Fox Film Corp. (no likelihood of confusion that viewers would
believe plaintiff Carol Burne endorsed a Family Guy sketch making
Wham-O: 286 F. Supp. 2d 1254 (N.D. Cal. fun of her); cf. Wham-O, Inc. v. Paramount Pictures Corp. (denying
2003) preliminary injunction without discovery where no likelihood of con-
fusion that viewers would believe that plaintiff maker of the Slip ‘N
Slide endorsed the movie “Dickie Roberts: Former Child Star” be-
cause the protagonist (mis)used the toy water slide in one scene of
the movie).
Here, there is no likelihood of confusion that viewers would be-
lieve that the Diophy bag is a real Louis Vui on bag just because a
fictional character made this claim in the context of a fictional movie.
Neither is there a likelihood of confusion that this statement would
cause viewers to believe that Louis Vui on approved of Warner Bros.’
use of the Diophy bag. In a case such as this one, no amount of dis-
covery will tilt the scales in favor of the mark holder at the expense
of the public’s right to free expression.
Therefore, even assuming, arguendo, that Louis Vui on could
state a cognizable claim of confusion, Warner Bros.’ use of the Diophy
bag is protected under Rogers because it has some artistic relevance
to the Film and is not explicitly misleading.
5 Miscellaneous
Lanham Act
§ 32
(2) Notwithstanding any other provision of this chapter, the reme-
… innocent infringement by printers dies given to the owner of a right … of this title shall be limited
and publishers as follows:
(A) Where an infringer or violator is engaged solely in the busi-
ness of printing the mark or violating ma er for others and
establishes that he or she was an innocent infringer or in-
nocent violator, the owner of the right infringed … shall
be entitled as against such infringer or violator only to an
injunction against future printing.
F. DEFENSES 567
(B) Where the infringement or violation complained of is con-
tained in or is part of paid advertising ma er in a news-
paper, magazine, or other similar periodical or in an elec-
tronic communication, the remedies of the owner of the
right infringed shall be limited to an injunction against the
presentation of such advertising ma er in future issues
of such newspapers, magazines, or other similar periodi-
cals or in future transmissions of such electronic commu-
nications. The limitations of this subparagraph shall apply
only to innocent infringers and innocent violators.
Trademark Defenses Lightning Round
Do the following uses qualify for any trademark defenses? For your
reference, the relevant marks are LITTLE LEAGUE for children’s
sports; FORD for cars; 7-11 for groceries; FEDEX for delivery ser-
vices; GOT MILK for milk; MARLBORO for cigare es; LISTERINE
for mouthwash; M&MS for chocolate candy, and the angry mon-
key design for an ”on-line retailer store featuring clothing, namely,
patches, t-shirts, hats, bags and pouches and tactical gear.” It may
help to note that “I wish I knew how to quit you” is a line of dialogue
from Brokeback Mountain, and observe that black text on the white
portion of Target bo le of mouthwash reads ”Compare to FRESH-
BURST® LISTERINE®.” (Hint: it never hurts to start by articulating
the applicable theory or theories of infringement against which a de-
fense is needed.)
568 CHAPTER 6. TRADEMARK
F. DEFENSES 569
570 CHAPTER 6. TRADEMARK
F. DEFENSES 571
572 CHAPTER 6. TRADEMARK
G. OTHER IDENTIFIER REGISTRIES 573
G Other Identifier Registries
One of the core concepts of trademark law – a registry that assigns ex-
clusive rights in names or other identifiers – shows up in some other
contexts, as well. In each case, query what work if any trademark law
is doing and what lessons if any trademark law can teach.
1 Phone Numbers
Holiday Inns, Inc. v. 800 Reservation, Inc.
86 F.3d 619 (6th Cir. 1996)
Holiday Inns, Inc., filed this Lanham Act suit against the defendants,
alleging unfair competition and infringement of its trademark tele-
phone number, 1-800-HOLIDAY, known as a ”vanity number.” Since
1952, Holiday Inns has operated an international chain of hotels
through both franchise agreements and on its own, utilizing the name
”Holiday Inn.” Holiday Inns, Inc. owns registration in the United
States Patent and Trademark Office for several service marks, includ-
ing the ”Holiday Inn” mark, which was registered in 1954. Holiday
Inns has invested a great deal of time, money, and effort to increase
the traveling public’s awareness of its 1-800-HOLIDAY phone num-
ber, which can be dialed to secure reservations or to obtain informa-
tion about lodging facilities. According to the vice president of Hol-
iday Inns’s marketing, the company’s vanity number is included in
virtually all of its extensive media, print, and radio advertisements.
The telephone number is not, however, officially registered as a trade-
mark.
The defendants, Call Management Systems, Inc. (a consulting
firm that obtains and services 1-800 telephone numbers for busi-
574 CHAPTER 6. TRADEMARK
nesses), 800 Reservations, Inc. (an agency that makes reservations for
a number of hotel chains, including Holiday Inns), and Earthwinds
Travel, Inc. (a travel agency) had secured the use and were engaged
in using a telephone number that potential Holiday Inns customers
frequently dial by mistake when they unintentionally substitute the
number zero for the le er ”O.” That number, 1-800-405-4329, corre-
sponds to the alphanumeric 1-800-H[zero]LIDAY, known in the trade
as a ”complementary number.” It is referred to in this opinion as ”the
405 number” to distinguish it from the Holiday Inns numeric, 1-800-
465-4329.
Albert H. Montreuil, the 50
When Montreuil discovered that numbers complementing 1-800-
HOLIDAY had not been reserved, he decided, in May 1993, to reserve
them for Call Management. In fact, Montreuil freely admi ed during
the preliminary injunction hearing that his ”sole purpose” in choos-
ing the 405 number was to intercept calls from misdialed customers
who were a empting to reach Holiday Inns, and he acknowledged
that his company reaped benefits in direct proportion to Holiday
Inns’s efforts at marketing 1-800-HOLIDAY for securing reservations.
The few courts that have addressed similar issues have agreed
that telephone numbers may be protected as trademarks and that
a competitor’s use of a confusingly similar telephone number may
be enjoined as both trademark infringement and unfair competition.
Dial-a-Mattress: 880 F.2d 675 (2d Cir. See, e.g., Dial-A-Ma ress Franchise Corp. v. Page. In Dial-a-Ma ress,
1989) the plaintiff was the customer of record for the local telephone num-
ber 628-8737 in the various area codes of the New York metropolitan
region. Dial-A-Ma ress Franchise Corp. had advertised extensively
its services and its phone number in the area with the phrase ”DIAL-
A-MATTRESS and drop the last ‘S’ for savings.” The defendant, Page,
obtained the right to use 1-800-628-8737 (or 1-800-MATTRES) and
promoted his number as 1-800-MATTRESS.
The Second Circuit held that although the term ”ma ress” is a
generic term generally not entitled to protection under trademark
law, telephone numbers that correlate with generic terms may be en-
titled to protection. It further determined:
Defendant’s use of the telephone number 1-800-628-8737
was confusingly similar to plaintiff’s telephone number
628-8737 in those area code regions in which plaintiff
solicited telephone orders, especially in view of defen-
dant’s identification of its number as 1-800-MATTRESS af-
ter plaintiff had promoted identification of its number as
(area code)-MATTRES.
Despite Holiday Inns’s reliance upon the Dial-a-Ma ress decision, we
find the instant case and the Second Circuit opinion clearly distin-
G. OTHER IDENTIFIER REGISTRIES 575
guishable. In Dial-a-Ma ress, for example, the defendant intention-
ally promoted his vanity number and actively caused confusion; in
our case, the defendants engaged in only minimal advertisement of
their travel agency and never promoted a vanity number.
The defendants, on the other hand, cite cases which suggest that
the active promotion of a deceptively similar vanity number is nec-
essary before the trial court can conclude that unlawful infringement
has occurred. In American Airlines, Inc. v. A 1-800-A-M-E-R-I-C-A-N American Airlines: 622 F.Supp. 673 (N.D.
Ill. 1985)
Corp, for example, the defendant falsely advertised its airline reser-
vation service as an airline company in the yellow pages and listed
its company name as ”A 1-800-A-M-E-R-I-C-A-N.” In finding a Lan-
ham Act violation, the court clarified that the defendant’s ”wrongful
conduct lies in its misleading use of the ‘Airline Companies’ yellow-
pages listing rather than its mere use of its telephone number [1-800-
AMERICAN] as such.” In other words, the court issued an injunction
because the defendant’s publicity efforts misled the public and not be-
cause the defendant activated a 1-800 number that appeared confus-
ingly similar to the trademark, ”American Airlines.” See also Murrin Murrin: 726 F. Supp. 1195 (D. Minn.
v. Midco Communications, Inc. (granting a limited injunction forbid- 1989)
ding the advertisement or use of the vanity number 1-800-LAWYER
with ”dial” or with any symbols resembling dots or hyphens between
the le ers ”LAWYERS” but explicitly rejecting the argument that any
use of the phone number 529-9377 – which spells ”lawyers” on the
telephone keypad – constitutes infringement upon Murrin’s ”Dial
L.A.W.Y.E.R.S.” service mark).
We conclude that although Holiday Inns owns trademark rights
in its vanity number 1-800-HOLIDAY, it cannot claim such rights to
the 405 number. It follows that the defendant, Call Management, is
the rightful assignee of the telephone number 1-800-405-4329.
2 Radio Callsigns
In re WSM, Inc.
225 U.S.P.Q. 883 (TTAB 1985)
WSM, Incorporated adopted the call le ers “WSM” for its radio sta-
tion in 1925 and claims use of “WSM” as a service mark for radio
broadcasting services in interstate commerce since 1925. Its applica-
tion to register the le ers as a service mark was refused. The Examin-
ing A orney concedes that the le ers sought to be registered are used
by applicant as a service mark, but takes the position that applicant is
not the owner of the mark because the Federal Communications Com-
mission (FCC) licenses applicant to broadcast, approves applicant’s
call le ers, and retains the power to revoke the license to broadcast
along with the call le ers used to identify the station. Thus under the
Examining A orney’s theory the applicant cannot control the use of
576 CHAPTER 6. TRADEMARK
the mark, and as such is not its owner. Applicant appealed when the
refusal was made final.
The Examining A orney has apparently misunderstood the na-
ture of the relationship between the FCC and applicant. The FCC
licenses applicant to broadcast from a specified geographic location
on a specified frequency at a specified power during specified times.
The FCC exercises its authority to “designate” call le ers for licensed
broadcasters by permi ing the broadcasters to request whatever call
le ers they like. Prior to 1984 the requests were granted unless: (1)
another station had the same call le ers, (2) the requested call le ers
were not in good taste, or (3) the requested le ers were phonetically
and rythmically similar to existing call le ers of stations in the same
area, so that the stations would likely be confused. Prior to 1984 the
FCC administered a system whereby one licensed station could ob-
ject to the approval of another station’s call le ers, but only if both
stations were to serve the same area. These disputes between broad-
casters were resolved by the FCC. The interests of anyone who was
not a broadcaster were never considered by the FCC.
In 1984 the FCC rules regarding call le er approval and conflicts
were changed. The agency will now grant a request for particular
call signs if the identical call sign is not already in use by someone
else, and the FCC is no longer a forum for the resolution of disputes
47 C.F.R. § 73.3550 between stations. Section 73.3550(g) of the FCC Rules now provides
as follows:
Applicants may request call signs of their choice if the
combination is available. Objections to the assignment
of requested call signs will not be entertained at the FCC.
However, this does not hamper any party from asserting
such rights as it may have under private law in some other
forum. Should it be determined by an appropriate forum
that a station should not utilize a particular call sign, the
initial assignment of a call sign will not serve as a bar to
the making of a different assignment.
It is clear that the FCC is not the owner of the call le ers used by
the broadcasters which it regulates. The right to broadcast is what
the agency licenses to broadcasters. The right to use the call le ers
is not licensed in a trademark sense. The FCC neither adopts nor
uses call le ers as service marks, so it does not own any such marks.
Even prior to its new rules the agency did not assert ownership of call
le ers. It acted only as a third party to resolve disputes between the
owners of the call le ers, the broadcasters who actually use them.
The relationship between broadcasters and the FCC is analogous
to other areas of commerce where businesses are regulated by govern-
ment agencies. Pharmaceutical manufacturers, for example, operate
G. OTHER IDENTIFIER REGISTRIES 577
under complex regulations established and administered by a federal
agency. The right to market a particular drug is granted by the agency
and may be withdrawn by the agency for particular health or safety
reasons at any time. The ownership of the trademarks used to iden-
tify these goods is obtained by the manufacturers through adoption
and use, just as with any other trademark or service mark. The fact
that sales are regulated by the agency and the agency may withdraw
the right to market the goods has no bearing on the manufacturers’
ownership of, and right to register, these trademarks during the time
while they are in lawful use. If and when the agency rules that a man-
ufacturer may no longer sell a particular product, the use of the mark
in connection with that product ceases. If that or a similar product
is not sold again the manufacturer will no longer be able to maintain
trademark rights with respect to that particular kind of product. As
with any other goods or services, the rights in the marks are tied to
use.
In the case at hand the applicant obtained whatever rights it has
in its serivce mark by adopting it and using it to identify its broad-
casting services. The FCC neither selected the mark for applicant nor
used it to identify any services. While the agency may withdraw ap-
plicant’s license to broadcast, it cannot, under its rules, unilaterally
direct applicant to change its service mark or adopt another one. If
the FCC withdraws the broadcast license and applicant is therefore
unable to continue rendering broadcast services under the mark, the
issue of abandonment of the mark would arise, but as long as appli-
cant uses the mark to identify its services which are lawfully rendered
in commerce, applicant is the owner of its service mark.
In summary, we hold that through the adoption and use of the ser-
vice mark “WSM” the applicant is the owner of the mark within the
meaning of Section 1(a) of the Act and is therefore entitled to register
it.
3 Business Names
States regulate the official names of corporations. and other organiza- Recall also Galt House's discussion of
tions, and they also regulate assumed names people use when they’re the trademark-priority effect of incor-
porating a business name, viz. abso-
in business under a name other than their own (also referred to as
lutely nothing.
”doing business as” or ”d/b/a”). Typically, both kinds of names must
be registered; in fact, official names are part of the incorporation pa-
perwork. In both cases there aren’t many limits on the names that
can be registered – but there are a few.
Model Business Corporation Act (2010)
§ 4.01(b)
Corporate Name
578 CHAPTER 6. TRADEMARK
[A] corporate name must be distinguishable upon the records of the
secretary of state from (1) the corporate name of a corporation incor-
porated or authorized to transact business in this state …
cmt. 2 Names That Are “Distinguishable upon the Records of the Secretary
of State”. –
The revision of the Model Act is based on the fundamental
premise that its name provisions should only ensure that each cor-
poration has a sufficiently distinctive name so that it may be distin-
guished from other corporations upon the records of the secretary
of state. The general business corporation statute should not be a
partial substitute for a general assumed name, unfair competition, or
antifraud statute. As a result, the Model Act does not restrict the
power of a corporation to adopt or use an assumed or fictitious name
with the same freedom as an individual or impose a requirement that
an “official” name not be “deceptively similar” to another corporate
name (a requirement of earlier versions of the Model Act). Principles
of unfair competition, not the business corporation act, provide the
limits on the competitive use of similar names.
The phrase “distinguishable upon the records of the secretary of
state” is drawn from section 102(a)(1) of the Delaware General Cor-
poration Law. The principal justifications for requiring a distinguish-
able official name are (1) to prevent confusion within the secretary
of state’s office and the tax office and (2) to permit accuracy in nam-
ing and serving corporate defendants in litigation. Thus, confusion
in an absolute or linguistic sense is the appropriate test under the
Model Act, not the competitive relationship between the corpora-
tions, which is the test for fraud or unfair competition. The precise
scope of “distinguishable upon the records of the secretary of state” is
an appropriate subject of regulation by the office of secretary of state
in order to ensure uniformity of administration. Corporate names
that differ only in the words used to indicate corporateness are gener-
ally not distinguishable. Thus, if ABC Corporation is in existence, the
names “ABC Inc.,” “ABC Co.,” or “ABC Corp.” should not be viewed
as distinguishable. Similarly, minor variations between names that
are unlikely to be noticed, such as the substitution of a “,” for a “.”
or the substitution of an Arabic numeral for a word, such as “2” for
“Two,” or the substitution of a lower case le er for a capital, such as
“d” for “D,” generally should not be viewed as being distinguishable.
The elimination of the “deceptively similar” requirement that ap-
peared in earlier versions of the Model Act is based on the fact that the
secretary of state does not generally police the unfair competitive use
of names and, indeed, usually has no resources to do so. For example,
assume that “ABC Corporation” operates a retail furniture store in
Albany, New York, and another group wants to use the same name
to engage in a business involving imports of textiles in New York
G. OTHER IDENTIFIER REGISTRIES 579
City. An a empt to incorporate a second “ABC Corporation” (or a
very close variant such as “ABC Corp.” or “ABC Inc.”) should be
rejected because the names are not distinguishable upon the records
of the secretary of state. If the second group uses a distinguishable
official name, like “ABD Corporation,” it probably may lawfully as-
sume the fictitious name “ABC Corporation” to import goods in New
York City if it files the assumed name certificate required by New
York law. In these situations, the secretary of state will usually not
know in what business or in what geographical area “ABC Corpora-
tion” is active or what name ABD Corporation is actually using in its
business; the secretary of state simply maintains an alphabetical list
of “official” corporate names as they appear from corporate records
and decides whether a proposed name is distinguishable from other
“official names” by comparing the proposed name with those on the
list. This assumes that there is either no assumed name statute or
that if there is such a statute it requires only local filing in counties
or, as in New York, a central filing which does not become part of the
corporate records maintained by the secretary of state’s office. These
assumptions are generally if not universally correct.
Harvard Business Services v. Coyle
1997 Del. Super. LEXIS 70 (1997)
Plaintiff is a corporation engaged in the business of incorporating
companies and of acting as registered agent for such corporations.
Harvard has sought a writ of mandamus from this Court to compel
Defendants, the Director of the Division of Corporations and the Sec-
retary of State, to accept for filing a restated certificate of incorpora-
tion of a corporation proposed by Harvard to be called ”Bank Finan-
cial Services, Inc.”
Generally, the formation of banking companies is governed by
special statutes and such businesses are not permi ed to incorporate
under general incorporation acts. Notably, 8 Del. C. § 395 precludes
the use of the word ”trust” in the name of any corporation other than
those regulated under the banking laws. At least one commentator
has found it ”curious” that there is no statutory prohibition on the
use of the word ”bank” similar to the ”trust” prohibition.
The Secretary has an interest in furthering this general legislative
goal of preventing misconceptions by the public about the functions
of Delaware corporations. To further that goal, the Secretary has an
interest in restricting the use of the word ”bank.”
Surely, if an incorporator a empted to incorporate in Delaware
using obscene or libelous language in the proposed corporate name,
the Secretary would have the discretion to refuse such a filing. Sim-
ilarly, if a proposed corporation’s name consisted of five hundred
words, the Secretary would have the authority to refuse to accept the
certificate of incorporation for filing if the overly lengthy corporate
580 CHAPTER 6. TRADEMARK
name would cause undue confusion or difficulty in administration.
This discretion is not delineated in the statute, but seems implicit in
the Secretary’s duty to accept corporate filings.
This Court finds that although there is no explicit statutory restric-
tion on the use of the word ”bank” in the name of a corporation not
in fact exercising banking powers, the Secretary does possess some
limited, implied discretion when considering a proposed corporate
name which includes the word ”bank” but where that corporation
cannot engage in the business of banking.
Cooper v. Goodman
65 Misc. 2d 939 (N.Y. Sup. Ct. 1971)
Petitioner offered for filing certificates of doing business under the
names of ‘The Brothel’, ‘The Garden of Erotic Pleasures’, ‘Theatre O’,
and ‘Club Orgy’. Section 130 of the General Business Law requires
that a person doing business under an assumed name must file a cer-
tificate designating the person conducting such business.
The County, Clerk refused to file said certificates because they
would be employed for deceptive purposes indicating that some kind
of illegal or otherwise obscene activity may be expected within the es-
tablishments so described.
Obviously, the assumed names on the certificates were adopted
for the purpose of obtaining publicity, public a ention, and curiosity
with the expectation they would promote business for the establish-
ments. In fact, they may invite the a ention of the Police Department,
which would cause the establishments to be under police surveillance.
In such case the public would be protected from illegal activities.
"The obvious purpose of the Fictitious The filing of a certificate does not imply governmental approval
Names Act is to protect persons giv- of the assumed name or of the business acitivity. The filing is statuto-
ing credit in reliance on the assumed
rily required for the purpose of identifying the person operating the
or fictitious name and to definitely es-
tablish the identity of the individuals business under such assumed name.
owning the business for the informa- It has not been shown that the assumed names are in contraven-
tion of those who might have deal- tion of any provision of law. While the names are distasteful, that is
ings with the concern." textitFremd v. not a sufficient reason to deny their filing.
Horne, 1990 WL 362051 (Pa. Com. Pl.
1990)
Friedman v. Rogers
440 U.S. 1 (1979) The Texas Legislature approved the Texas Optometry Act (Act) in
1969. Section 5.13 (d), at issue here, prohibits the practice of optome-
try under an assumed name, trade name, or corporate name.
Once a trade name has been in use for some time, it may serve
to identify an optometrical practice and also to convey information
about the type, price, and quality of services offered for sale in that
practice. In each role, the trade name is used as part of a proposal of
a commercial transaction. Like the pharmacist who desired to adver-
Virginia Pharmacy: 425 U.S. 748 (1976) tise his prices in Virginia Pharmacy Board v. Virginia Citizens Consumer
Council, the optometrist who uses a trade name ”does not wish to ed-
G. OTHER IDENTIFIER REGISTRIES 581
itorialize on any subject, cultural, philosophical, or political. He does
not wish to report any particularly newsworthy fact, or to make gen-
eralized observations even about commercial ma ers.” His purpose
is strictly business. The use of trade names in connection with opto-
metrical practice, then, is a form of commercial speech and nothing
more.
A trade name is, however, a significantly different form of com-
mercial speech from that considered in Virginia Pharmacy and Bates.
In those cases, the State had proscribed advertising by pharmacists
and lawyers that contained statements about the products or services
offered and their prices. These statements were self-contained and
self-explanatory. Here, we are concerned with a form of commercial
speech that has no intrinsic meaning. A trade name conveys no in-
formation about the price and nature of the services offered by an
optometrist until it acquires meaning over a period of time by associ-
ations formed in the minds of the public between the name and some
standard of price or quality. Because these ill-defined associations of
trade names with price and quality information can be manipulated
by the users of trade names, there is a significant possibility that trade
names will be used to mislead the public.
The possibilities for deception are numerous. The trade name of
an optometrical practice can remain unchanged despite changes in
the staff of optometrists upon whose skill and care the public depends
when it patronizes the practice. Thus, the public may be a racted by
a trade name that reflects the reputation of an optometrist no longer
associated with the practice. A trade name frees an optometrist from
dependence on his personal reputation to a ract clients, and even al-
lows him to assume a new trade name if negligence or misconduct
casts a shadow over the old one. By using different trade names at
shops under his common ownership, an optometrist can give the pub-
lic the false impression of competition among the shops. The use of a
trade name also facilitates the advertising essential to large-scale com-
mercial practices with numerous branch offices, conduct the State ra-
tionally may wish to discourage while not prohibiting commercial
optometrical practice altogether.
The concerns of the Texas Legislature about the deceptive and mis-
leading uses of optometrical trade names were not speculative or hy-
pothetical, but were based on experience in Texas with which the leg-
islature was familiar when in 1969 it enacted § 5.13 (d). The forerun-
ner of § 5.13 (d) was adopted as part of a ”Professional Responsibility
Rule” by the Texas State Board of Examiners in Optometry in 1959.
In a decision upholding the validity of the Rule, the Texas Supreme
Court reviewed some of the practices that had prompted its adoption.
Texas State Bd. of Examiners in Optometry v. Carp. One of the plaintiffs Carp: 412 S.W.2d 307 (1967)
in that case, Carp, operated 71 optometrical offices in Texas under at
582 CHAPTER 6. TRADEMARK
least 10 different trade names. From time to time, he changed the
trade names of various shops, though the licensed optometrists prac-
ticing in each shop remained the same. He purchased the practices
of other optometrists and continued to practice under their names,
even though they were no longer associated with the practice. In sev-
eral instances, Carp used different trade names on offices located in
close proximity to one another and selling the same optical goods
and services. The offices were under common management, and had
a common staff of optometrists, but the use of different trade names
facilitated advertising that gave the impression of competition among
the offices.
The Texas court found that Carp used trade names to give a mis-
leading impression of competitive ownership and management of his
shops. It also found that Rogers, a party to this suit and a plaintiff in
Carp, had used a trade name to convey the impression of standard-
ized optometrical care. All 82 of his shops went under the trade
name ”Texas State Optical” or ”TSO,” and he advertised ”scientific
TSO eye examination[s]” available in every shop. The TSO advertis-
ing was calculated as well, the court found, to give ”the impression
that [Rogers or one of his brothers] is present at a particular office.
Actually they have neither been inside nor seen some of their eighty-
two offices distributed generally over Texas.” Even if Rogers’ use and
advertising of the trade name were not in fact misleading, they were
an example of the use of a trade name to facilitate the large-scale com-
mercialization which enhances the opportunity for misleading prac-
tices.
It is clear that the State’s interest in protecting the public from the
deceptive and misleading use of optometrical trade names is substan-
tial and well demonstrated. We are convinced that § 5.13 (d) is a con-
stitutionally permissible state regulation in furtherance of this inter-
est.
4 Ticker Symbols
The Atlantic
Eric Levenson
Investors Buy Up Worthless Stock After Confusing It for an Actual
Successful Company
Shortly after Google announced its deal to acquire thermostat-maker
Nest Labs for $3.2 billion, shares of NEST started trading like gang-
busters. Unfortunately, NEST is not the stock symbol for Nest Labs.
NEST actually represents the stock of Nestor Inc, an essentially
bankrupt company that has seen almost no stock activity since sell-
ing off its assets in 2009. No one is quite sure why the stock is even
Nestor stock price before and after Nest
acquisition announcement
still available to trade, but confused investors (or perhaps some un-
G. OTHER IDENTIFIER REGISTRIES 583
scrupulous ones) rushed to buy it up, mistakenly believing they were
ge ing in on Google’s Next Big Thing. Nestor’s stock price went up
1900 percent for the day, and reached a high of 10 cents after years
of trading for less than a penny a share. Economics blogger Kid Dyna-
mite noticed the stark increase in trading, and posted this graph on
his site. Notice the volatile rise after a long period of quiet.
FINRA Uniform Practice Advisory # 39 -13
(Oct. 7, 2013)
On Friday, October 4, 2013, the Financial Industry Regulatory Au-
thority, Inc. halted trading in the securities of Tweeter Home Enter-
tainment Group (former OTC Symbol: TWTRQ). FINRA determined
to impose a temporary halt because FINRA believed that trading in
the TWTRQ security demonstrated a widespread misunderstanding
related to the possible initial public offering of an unrelated security. Twitter's IPO prospectus, which pro-
For the avoidance of further confusion, FINRA has determined to posed the symbol TWTR, was dated Oc-
effect a symbol change for the common stock of Tweeter Home En- tober 3, 2013.
tertainment Group. Members hereby are advised that the symbol for
Tweeter Home Entertainment Group has been changed from TWTRQ
to THEGQ and that quoting and trading in Tweeter Home Entertain-
ment Group’s securities will resume under the new symbol, THEGQ,
effective October 8, 2013 at 9:30:00 a.m. E.T.
Central Parking Corp. v. Park One Inc.
In July, 1997, Southern Parking System, Inc., a parking lot manage- No. Civ.A. 97–2638, 1997 WL 655925
(E.D. La. Oct. 20, 1997)
ment services company, became Park One Incorporated. The selec-
tion of the name “Park One Incorporated” and the use of “pk1” as its
symbol came as the result of an extensive name search. Numerous
names were suggested; one name, “Trans Park,” was eventually de-
cided on and pursued until it was discovered that another company
held a federal trademark on the name. The second efforts at a name
search produced the “Park One Incorporated” name and the “pk1”
logo, an abbreviation of the full length name. Prior to final selection,
Park One’s a orney did a trademark search to ascertain that the logo
was not identical to nor too closely related to an existing trademark.
Central Parking Corporation is also engaged in parking manage-
ment services. The le ers “PK” designate Central’s stock on the New
York Stock Exchange; since October of 1995, Central has used the
“PK” mark in its advertising and marketing to show the symbol un-
der which its stock is traded. There is no evidence that Central has
used this mark outside its reference as its NYSE symbol. Central has
sued Park One for service mark infringement and seeks Park One’s
cessation of use of the “pk1” logo in its Motion for Preliminary In-
junction.
By Central’s own admission the le ers “PK” were selected as the
NYSE symbol because of its association with “parking” and because
584 CHAPTER 6. TRADEMARK
it was the closest combination of le ers approximating the word.
While Central argues that “PK” is a service mark, the evidence shows
that “PK” designates its New York Stock Exchange listing and is not a
service mark of the company. To the contrary, the “converging arrow-
head” mark has been federally registered by Central and is the perva-
sive logo in its business. The “PK” mark tends to describe the services
offered rather than to identify or distinguish a particular company.
Central’s clients are typically savvy business people who require
more than a logo before entering into complex and long term con-
tracts. Thus, they are not likely to be confused by Park One’s use of
“pk1” while “PK” is the NYSE symbol for Central.
Exxon Corp. v. Xoil Energy Resources, Inc.
552 F. Supp. 1008 (S.D.N.Y. 1981)
EXXON is one of the world’s larger business enterprises, engaged in
virtually every aspect of the oil and gas business, from exploratory
and developmental well drilling to refining and retail marketing. In
1972 plaintiff adopted the trade name ”EXXON”, a coined term first
registered as a trademark in 1968.
XOIL Energy Resources, Inc. are in the business of providing in-
terests in tax shelters related to exploratory and developmental oil
and gas well drilling. Plaintiff claims that defendants’ use of the
name XOIL in connection with oil and gas (or energy) enterprises,
will cause irreparable harm because it will be likely to cause the pub-
lic to confuse the name XOIL with EXXON.
The symbol ”XON” is used by the various stock exchanges where
Exxon securities are traded as a ticker symbol to designate those secu-
rities. Plaintiff contends that ”XON” has come to identify goods (viz.,
stock and other securities) sold by, sponsored by or originating with
the plaintiff, and is entitled to protection from marks or designations
which are confusingly similar. Plaintiff also argues that defendants’
securities are traded in the over-the-counter market, and that the sym-
bols for defendants’ securities, ”XOIL” and ”XPLR”, will be confused
with Exxon’s ticker symbol ”XON”. In the absence of any evidence
that the symbol ”XON” is known at all outside of that small segment
of the public which consists of the employees of stock exchanges, in-
vestment brokerage firms and their customers, and investment advi-
sors and their advisees, I continue my examination of the degree of
similarity of the ticker symbols ”XON”, ”XOIL”, and ”XPLR” to their
usage in the stock business.
The securities of at least six companies (other than plaintiff
or defendants) traded on various exchanges or in the over-the-
counter market are designated by symbols involving the le er
”X”. At least one of these companies is engaged in the oil business:
G. OTHER IDENTIFIER REGISTRIES 585
Company Name Exchanges on Which Traded Ticker Symbol
Excel Energy Over-the-Counter EXLL
Ex-Cello-Corp. New York, Boston XLO
Exolon Co. Boston EXL
XOMOX Corp. Over-the-Counter XOMX
XONICS, INC. Philadelphia, American XOX
Xtra Corp. New York, Boston XTR
For those who recognize and use such symbols, the addition, dele-
tion or change of a single le er is obviously more than sufficient to
enable those active in the securities field to differentiate between
the various symbols. I also note that most of the symbols cannot be
pronounced easily, and infer that they are used primarily in wri en
communications, or are spelled out whenever spoken. Obviously
these two forms of usage would tend to reduce the likelihood of
confusion stemming from visual similarity.
”XPLOR” and ”XOIL” are much more similar to plaintiff’s marks
aurally than visually. ”Exxon”, ”XOIL”, and ”Xplor” all commence
with an ”X” or ”ex” sound: ”X” and ”ex” are phonetically indistin-
guishable. ”Exxon” and ”Xplor” are also easily distinguishable when
heard. While there is a degree of aural similarity between ”XOIL” on
the one hand, and ”Exxon” on the other, the nature of defendants’
business is such that every transaction involves, at some point, a writ-
ten instrument. There could not be, under such circumstances, such
reliance on the sounding of the name ”XOIL” as to make aural simi-
larity an important factor.
The symbol ”XON” is used in the securities markets to identify
securities of the plaintiff. Plaintiff did not create this symbol, nor has
it registered or promoted this symbol as a trademark. No products
other than securities are identified by this symbol. Nor has any ev-
idence been introduced that plaintiff itself uses this mark on securi-
ties when it sells them. Thus unlike the trademarks involved in this
case, the symbol ”XON” is not owned by, used to sell products by, or
even created by plaintiff. Furthermore, while the symbol ”XON” has
a well-established secondary meaning in the investment community,
it has no significance outside that community, the size of which must
be considered small in relation to the general population. I find the
strength of the symbol ”XON” to be quite strong in the investment
community but so small as to be insignificant in the general popula-
tion.
As to the ticker symbol ”XON”, the relevant public is accustomed
to distinguishing ticker symbols one from another. In the context of
the securities market and those who are active in that market, there
are not such similarities between the symbol for plaintiff’s securi-
ties (”XON”) and the symbols for those of defendants (”XOIL” and
”XPLR”) as to lead to any confusion.
586 CHAPTER 6. TRADEMARK
Quite apart from other infirmities in plaintiff’s claims of infringe-
ment with respect to the ticker symbol ”XON” there is a lack of prox-
imity of product between the stocks and securities to which that sym-
bol pertains and the securities of defendants with the symbol ”XOIL”.
XOIL is a non-listed stock and trades in the over-the-counter mar-
ket while Exxon stock is listed on the principal exchanges. Plaintiff’s
stock has sold in the $70 per share range during this suit, while the
price of defendants’ XOIL stock has ranged from $4 per share at is-
suance to $16 per share. Since the securities of these two companies
do not sell in the same price range or in the same markets, I conclude
that they are not in close proximity.
Plaintiff argues that purchasers over-the-counter of XOIL Energy
Resources, Inc. stock, at a relatively low price, do not partake of the
sophistication of investors in limited partnerships. Plaintiff also sug-
gests that those who invest in defendants’ over-the-counter stock and
in its limited partnerships may in fact be quite unsophisticated, and
be directed to those investments by their brokers. I do not credit
these arguments. A market is not rendered less sophisticated because
business in that market is ordinarily transacted through brokers. To
the contrary, the brokers render a market, if anything, more sophis-
ticated: professional buyers are less likely to be subject to confusion.
MDT Corp. v. New York Stock Exchange, Inc.
858 F. Supp. 1028 (C.D. Cal. 1994)
Trading symbols are used within the securities business to identify a
specific publicly traded security; in particular trading symbols play
an important role in the technical execution of trading transactions
on the floor of the NYSE.
Medtronic was founded in 1949. It manufactures and sells a va-
riety of medical products, including cardiac pacemakers, artificial
heart valves, cardiopulmonary products and interventional vascular
products.
Since the early 1960s, Medtronic’s securities have been publicly
traded. At first they were traded over the counter. Then, beginning
on February 5, 1971, Medtronic’s securities were traded on NASDAQ
under the trading symbol MDTR.
On November 21, 1977 Medtronic began the listing of its stock on
the NYSE and its listing has remained there until the present time.
All stocks listed on the NYSE are assigned a unique trading symbol
which must comprise three or fewer le ers. Since they were first
listed on the NYSE, Medtronic’s securities have been identified by
the trading symbol MDT.
When a company is accepted for listing on the NYSE, it is asked
to submit three alternative choices for a three le er trading symbol.
If the requested symbol is available, the NYSE assigns it to the list-
G. OTHER IDENTIFIER REGISTRIES 587
ing company. A trading symbol is not available if it is already in use
by a listing company on either the NYSE or a number of other re-
gional exchanges. Approximately two-thirds of the first choices for
NYSE trading symbols are not available because they are already in
use. The sole criterion used by the NYSE in assigning a trading sym-
bol and the only ground on which a trading symbol will be denied is
the availability of a symbol.
The parties do not dispute that Medtronic’s motive for choosing
the MDT trading symbol was to obtain a trading symbol as close as
possible to its former NASDAQ trading symbol. The parties also
do not dispute that the assignment of the MDT trading symbol to
Medtronic was made in good faith, without any intent by either
Medtronic or the NYSE to violate any trademark or trade name held
by MDT Corp.
On July 1, 1988, MDT Corp. applied to list its publicly traded
securities on the New York Stock Exchange and on August 5, 1988, the
NYSE accepted MDT Corp.’s securities for listing. At that time, the
NYSE informed MDT Corp. that its first choice for a trading symbol
was not available because it was already being used to identify the
stock of Medtronic.
Starting in February of 1989, MDT Corp. began a empts to con-
vince Medtronic to change its NYSE trading symbol. Medtronic
never agreed to MDT Corp.’s demands, and since March 1989 has
consistently and repeatedly expressed to MDT Corp. that it was
unwilling to relinquish the MDT trading symbol. Similarly, since
1988, NYSE has consistently and repeatedly expressed to MDT Corp.
that it would not change Medtronic’s MDT trading symbol without
Medtronic’s consent.
In November 1977, when the MDT trading symbol was assigned
to Medtronic by the NYSE, MDT Corp. was not publicly traded and
was li le known in the public securities industry. MDT Corp. did not
go public until January 1987 when it listed its securities on NASDAQ
under the trading symbol MDTC. That was ten years after the MDT
trading symbol was assigned to Medtronic by the NYSE.
Until January 1987, MDT Corp. shares were never publicly traded,
there 1032*1032 were no publicly available reports from brokerage
or investment firms concerning trading in MDT Corp. shares, there
were no third party listings or brokerage reports of trades of MDT
Corp. shares, no trading symbol existed to identify MDT Corp.
shares, and MDT Corp. did not participate as an issuer in the mar-
ket for publicly traded securities.
Although MDT Corp. is the senior user of the MDT mark in the
medical products field, Medtronic, not MDT Corp., is the senior user
of the MDT mark within the context of the publicly traded securities
market.
588 CHAPTER 6. TRADEMARK
The doctrine of Inwood Laboratories requires that, to be liable for
contributory infringement, a party must have actively ”suggested,
even if only by implication” the infringement. MDT Corp. has not
argued, and indeed cannot argue, that either Medtronic or the NYSE
has in any way suggested, or even implied, that anyone should use
MDT the trading symbol as anything but a trading symbol. Instead,
MDT Corp. appears to interpret Inwood Laboratories to impose an af-
firmative duty on innocent third party users of a mark to police the
mark for its owner. No such duty exists.
Comments of James Angel on General Portability Filing
available online (2007)
As both an empirical researcher in finance and a personal investor,
I deal with stock exchange ticker symbols almost every day. I am
pleased that the topic of ticker symbols has come up, because there is
a need for improvements in the present system to prevent consumer
confusion. Here are my comments on the exchange symbology plans.
In brief:
• Just as with phone numbers, the rights to a particular ticker
symbol should belong to the issuers, not the exchanges. Issuers
generally expend considerable resources to associate their cor-
porate brand image with a particular set of characters, and their
claims should prevail over the far weaker claims of any partic-
ular exchange.
• Changing ticker symbols cause investor confusion, leading to
errors in both research and trading. Allowing issuers to keep
their ticker symbols when they change exchanges will lead to
fewer costly trading mistakes.
• Perpetual reservation of unused ticker symbols is a bad idea.
Unused tickers should be available to any legitimate issuer seek-
ing to use them on a first come, first served basis.
Introduction: Who owns the alphabet?
In the beginning, there was the stock ticker. Each exchange used its
own symbology for the instruments it traded. A stock traded on mul-
tiple exchanges could have multiple tickers. Or the same ticker could
mean different stocks on different exchanges. For example, AT&T
(then known as American Bell) first traded on the Boston Exchange
under the ticker symbol T in 1888. When AT&T listed on the NYSE,
it used the ticker symbol ATT and did not use the single le er T on
the NYSE until 1931.
This is still the international practice today. For example, the
ticker symbol FUN on the NYSE represents Cedar Fair, L.P., a maker
of amusement parks. The symbol FUN on the TSX in Toronto is
Fun Technologies PLC. This creates a lot of fun for investors and re-
G. OTHER IDENTIFIER REGISTRIES 589
searchers who deal with the stocks that are dually listed in the U.S.
and Canada.
To deal with this confusion in the United States, Standard and
Poor’s came up with a standard alphabet-only system of U.S. ticker
symbols which became the industry standard.
The NYSE, AMEX, and regional exchanges traditionally used one,
two, or three character ticker symbols to identify stocks. The NAS-
DAQ has traditionally used four or five character ticker symbols.
When a firm switched its stock listing from the NASDAQ to the
AMEX or NYSE, it would have to change its ticker symbol to a shorter
ticker symbol. Likewise, when a stock moved from the NYSE or
AMEX to the NASDAQ, it had to adopt a longer four or five charac-
ter ticker symbol. However, when stocks switched from the AMEX to
the NYSE they usually kept their shorter ticker symbol. Thus, there
is a long precedent of firms keeping their ticker symbols when they
switch exchanges.
Now NASDAQ wants to use shorter ticker symbols and its com-
petitors don’t want to let it. NASDAQ and its allies have proposed
se ing up a plan under the NMS rules to divvy up stock symbols
among the exchanges. The NYSE and its allies have proposed a com-
peting plan to keep the shorter ticker symbols all to themselves. This
brings up an interesting question: Who owns the alphabet, the ex-
changes or the issuers?
Issuers have the strongest claim to any particular ticker symbol.
The economic issues involved are very similar to those involved with
trademarks. I am not now, nor have I ever been, an a orney, so I will
not make a legal argument here. I will instead make an economic
argument as to how the rights to a particular ticker symbol should be
decided.
Trademark protection is quite broad and covers the use of such
a trademark in many other applications. The same economic consid-
erations that led society to create trademark protection can also be
applied to the more limited case of who should have the right to a
particular le er combination for use as a ticker symbol.
There are two issues here: First, should an issuer that moves its
listing from one exchange to another exchange have the right to take
its ticker symbol with it? Does the ticker symbol belong to the ex-
change or the firm? And second, should a group of exchanges, or
anyone else for that ma er, have an exclusive right to certain le er
combinations even when those combinations are not in use? Is a one-
, two-, or three- character ticker symbol such a unique signal of the
AMEX, NYSE, and regional exchanges that they should be able to pre-
clude NASDAQ-listed firms from using them? The proposed NMS
590 CHAPTER 6. TRADEMARK
plans give certain exchanges the right to reserve some symbols indef-
initely even through they have no current plans to use them.
Companies often go to great efforts to come up with ticker sym-
bols that appeal to investors. Sometimes ticker symbols reflect the
name of the company (AAPL or IBM for example). Other ticker
symbols have other associations with the issuer. Dynamic Materi-
als, which is engaged in explosive metal working, has ticker symbol
BOOM while Anheuser-Busch, the maker of Budweiser, uses ticker
symbol BUD. Southwest Airlines started its operations at Love Field
and thus uses the ticker LUV. The post- bankruptcy US Airways
chose LCC to signify that it is a Low Cost Carrier. Oftentimes these
symbols are seen as part of a firm’s identity.
Corporations sometimes include their ticker symbols in their ad-
vertising campaigns as a way to alert their customers that their stock
is publicly traded. When companies change their names, they of-
ten change their ticker symbols as well. Sometimes the firm’s iden-
tity and ticker symbol have become so intertwined that the company
changes its name to match its ticker. X was used for U.S. Steel long
before it changed its name to USX.
Over time, investors tend to associate a particular ticker symbol
far more with a particular company than with a particular exchange.
Thus, in terms of reducing investors’ search and transaction costs, it
makes sense to award the rights to a particular ticker symbol to the
issuer that has been using the ticker symbol.
It also makes economic sense to expand the pool of potential ticker
symbols for all issuers by giving all exchange-listed issuers full access
to all combinations of ticker symbols from one to five characters. Ford
Motor Company may well prefer the ticker FORD as it will cause less
confusion to investors than F. This will allow issuers to pick tickers
that be er match the issuer to the symbol, thus reducing communi-
cation costs and search costs.
Thus, the claim of any particular exchange or group of exchanges
to the entire class of shorter ticker symbols is quite weak. In general,
listed companies have expended far more resources in associating a
particular ticker symbol with their company than has anyone else. It
thus makes sense to allow issuers to keep their ticker symbols if they
choose to switch their listing from one market to another. There is no
good reason why an Amex or NYSE-listed firm should not be able to
keep its ticker symbol if it moves to NASDAQ. Likewise, there is no
good reason why a NASDAQ-listed firm should not be able to keep
its longer ticker if wants to move to the AMEX or NYSE.
Shorter ticker symbols should go to the more actively traded stocks, if they
want them.
G. OTHER IDENTIFIER REGISTRIES 591
In any language, the most frequently used words are typically the
shortest ones. This reduces the “cost” of using the language. Sim-
ilarly, the shortest ticker symbols should be used for the most fre-
quently traded securities, as shorter ticker symbols require less typ-
ing and may be easier to remember. This reduces the time it takes in-
vestors to type in ticker symbols and reduces the mental bandwidth
needed to remember the tickers. Some of the most actively traded
securities are NASDAQ listed, so economic efficiency would dictate
that such actively-traded NASDAQ stocks could also be able to use
shorter ticker symbols if they want them.
Traditionally, the exchanges used shorter ticker symbols for the
larger and more actively traded stocks. T stands for ATT (“Tele-
phone”) and F for Ford. Thus, shorter ticker symbols have a certain
cachet associated with larger issues. However, the shorter ticker sym-
bols are no longer exclusively used by the most actively traded shares.
Barnes Group Inc., ticker symbol B, has a three-month average daily
volume of only 384,863 shares.
Shorter ticker symbols can also lead to investor confusion as well.
Automated news search engines that search for a stock symbol some-
times bring up numerous false hits when searching for shorter ticker
symbols. Longer ticker symbols that are not recognized words yield
fewer false hits. Googling the le ers MSFT yields 7.3 million hits,
most of which are relevant to Microsoft. Googling the le er A yields
7.3 billion hits, most of which have nothing to do with Agilent. Thus,
some issuers will wisely choose to avoid shorter ticker symbols.
Ticker symbol portability is a good because it will reduce investor
confusion.
Speaking as both an investor and researcher, I can a est that mutat-
ing ticker symbols can be a large source of confusion and costly in-
vestment mistakes. When a ticker symbol changes, data vendors do
not always catch the change. I have personally run across many in-
stances in which data vendors have proffered up incorrect charts or
incorrect accounting information because of a missed symbol change.
Reducing the number of ticker symbol changes will be a plus for in-
vestors, and will reduce costs to the legions of unsung heroes in the
back offices who keep track of these things.
Ticker symbol portability will reduce the confusion to investors
and researchers that comes from changing ticker symbols. This is
similar to the rights to a particular telephone number. In the bad old
days, a phone company (either landline or mobile) would assign a
number to a customer. If a customer switched to another provider,
the customer had to give up the old number and get a new number
from the new provider. This was, to say the least, a nuisance. Now
the practice is that customers can keep their phone numbers when
592 CHAPTER 6. TRADEMARK
they switch providers. This is in line with economic efficiency as it
reduces the overall costs to the economy when everyone has to keep
track of new phone numbers. It also enhances competition between
phone companies. In the same manner, companies should be able
to take their ticker symbols with them when they switch exchanges.
This ticker symbol portability will result in fewer costs for issuers and
investors.
As such, I don’t think that NASDAQ’s proposal for three-
character portability goes far enough, and that such exchange ticker
symbol portability should extend to one- and two- (as well as three-,
four-, and five-) character tickers.
Exchanges should not be allowed to sit on unused symbols.
However, in order for trademarks to be recognized as intellectual
property (in which case others are precluded others from using them),
they generally need to be used. This makes economic sense because
parking unused trademarks reduces the potential benefits to con-
sumers and producers that would occur if someone else used the un-
used property. Thus, NASDAQ should not be allowed to park the
symbol FORD if Ford Motor Company wanted to use it on another ex-
change. The features in both proposed plans that allow the exchanges
to permanently reserve ticker symbols should not be approved.
Symbols should be allocated on a “first-come, first-served” basis.
If a ticker symbol is not in use, then it should be available to any le-
gitimate issuer that wants to use it. Symbols should be available to
issuers on a “first-come, first served” basis with a “Use it or lose it”
feature.
An issuer wishing to use a symbol could request the symbol, and
then would have a given length of time in which to actually use the
symbol. Use of the symbol would include actually trading the secu-
rity, or filing a listing application with an exchange, or a registration
statement with the SEC in anticipation of trading on an exchange.
Some tickers should be off limits.
Although issuers should, in general, be able to choose any symbol
they want, there are legitimate reasons why some tickers should not
be issued.
One exception to the “first-come, first-served” principle would be
for tickers that are so close to existing trademarks that allowing others
to grab them would sow confusion among investors. Thus, it should
not be permissible for someone other than Ford Motor Company to
grab the ticker FORD.
G. OTHER IDENTIFIER REGISTRIES 593
Words that many people find offensive should not be used as
ticker symbols. Thus, examples include ****, ****, ****, and <expletive
deleted.>
Symbols that are too close to an existing symbol, either in meaning
or on the keyboard, could also be precluded if common typos would
cause traders to make more “fat fingers” mistakes. For example, it
would not be a good idea to use both “FORM” and “FROM” as ticker
symbols.
Abandoned tickers should be unavailable for a six-month waiting period to
prevent confusion.
When a company abandons a desirable ticker, it is often recycled
quickly. For example, when Chrysler was taken over by Daimler
to become DaimlerChrysler, its ticker symbol C was in use for Citi-
group within a few weeks. Many investors keep track of portfolios
as lists of ticker symbols, and reassigned ticker symbols cause lots
of headaches. I have personally experienced situations in which data
vendors did not catch the switch, and supplied bad data to in the way
of bad price charts, or worse yet, bad accounting data.
When a ticker symbol is abandoned, there should be a six-month
waiting period before it can be reassigned. This will give investors
time to adapt to the switch.
The Plan needs a dispute resolution mechanism.
There will be inevitable disputes that arise over the rights to various
ticker symbols, and the Plan should come up with a method for re-
solving disputes. For example, one issuer may claim that it should
have the rights to a particular ticker symbol as it has already trade-
marked that word. Or there may be a dispute as to whether a par-
ticular claimant has actually used a ticker symbol to retain rights to
it. The dispute resolution mechanism of the plan should look at the
facts and circumstances in each particular case.
The National Market System Plan for the Selection and Reservation of Se-
curities Symbols, a/k/a the ”Symbols Reservation System,” is a joint
agreement among fifteen national exchanges. It is operated by the
Options Clearing Corporation. It allows for symbols of up to five
Not to be confused with the Office of
characters. One-to-three character symbols are reserved for stocks
the Comptroller of the Currency.
traded on a national exchange; four-and-five character symbols can
be used for any security or index. In general, symbols are portable
between exchanges:
If an [exchange] lists a security or product that previously
was listed on another [exchange], the New [exchange]
594 CHAPTER 6. TRADEMARK
shall have the rights to that symbol unless, in its discre-
tion, it consents to the symbol being retained by the For-
mer [exchange].
Each exchange may have up to 40 perpetual reservations and 3,000
temporary reservations – the symbol must be either used or released
within two years. If an exchange stops using a symbol (i.e. because
a company has merged or been delisted), it can retain the symbol for
up to two years. As for reuse:
A symbol, nonetheless, may not be reused to identify a
new security (other than the security that has been trad-
ing under such symbol) within 90 calendar days from the
last day of its use to identify the old security, without the
consent of the party that released the symbol. A party may
not reuse (or consent to the reuse of) a symbol to identify a
new security unless the party reasonably determines that
such use would not cause investor confusion.
5 ISBNs
ISBN.org
Available at ISBN.org website
FAQs: General Questions
What is an ISBN?
The International Standard Book Number (ISBN) is a 13-digit num-
ber that uniquely identifies books and book-like products published
internationally.
What is the purpose of an ISBN?
The purpose of the ISBN is to establish and identify one title or edi-
tion of a title from one specific publisher and is unique to that edition,
allowing for more efficient marketing of products by booksellers, li-
braries, universities, wholesalers and distributors.
What is the format of the ISBN?
Every ISBN consists of thirteen digits and whenever it is printed it
is preceded by the le ers ISBN. The thirteen-digit number is divided
into four parts of variable length, each part separated by a hyphen.
• Group or country identifier which identifies a national or geo-
graphic grouping of publishers;
• Publisher identifier which identifies a particular publisher
within a group;
• Title identifier which identifies a particular title or edition of a
title;
G. OTHER IDENTIFIER REGISTRIES 595
• Check digit is the single digit at the end of the ISBN which val-
idates the ISBN.
What is the format of the new ISBN-13?
Every ISBN will consist of thirteen digits in 2007. The thirteen digit
number is divided into five parts of variable length, each part sepa-
rated by a hyphen.
• The current ISBN-13 will be prefixed by ”978”
• Group or country identifier which identifies a national or geo-
graphic grouping of publishers;
• Publisher identifier which identifies a particular publisher
within a group;
• Title identifier which identifies a particular title or edition of a
title;
• Check digit is the single digit at the end of the ISBN which val-
idates the ISBN.
Who can assign ISBNs to a publisher?
There are over 160 ISBN Agencies worldwide, and each ISBN Agency
is appointed as the exclusive agent responsible for assigning ISBNs
to publishers residing in their country or geographic territory. The
United States ISBN Agency is the only source authorized to assign
ISBNs to publishers supplying an address in the United States, U.S.
Virgin Islands, Guam and Puerto Rico and its database establishes
the publisher of record associated with each prefix.
Once an ISBN publisher prefix and associated block of numbers
has been assigned to a publisher by the ISBN Agency, the publisher
can assign ISBNs to publications it holds publishing rights to. How-
ever, after the ISBN Agency assigns ISBNs to a publisher, that pub-
lisher cannot resell, re-assign, transfer, or split its list of ISBNs among
other publishers. These guidelines have long been established to en-
sure the veracity, accuracy and continued utility of the international
ISBN standard.
As defined by the ISO Standard, the ISBN publisher prefix (or
”root” of the ISBN) identifies a single publisher. If a second publisher
subsequently obtains an ISBN from the assigned publisher’s block of
ISBNs, there will be no change in the publisher of record for any ISBN
in the block as originally assigned.
If you are a new publisher, you should apply for your own ISBN
publisher prefix and plan to identify and circulate your books prop-
erly in the industry supply chain. You may encounter offers from
other sources to purchase single ISBNs at special offer prices; you
should be wary of purchasing from these sources for the reasons
596 CHAPTER 6. TRADEMARK
noted above. There are unauthorized re-sellers of ISBNs and this ac-
tivity is a violation of the ISBN standard and of industry practice. A
publisher with one of these re-assigned ISBNs will not be correctly
identified as the publisher of record in Books In Print or any of the
industry databases such as Barnes and Noble or Amazon or those of
wholesalers such as Ingram. If you have questions, contact the US
ISBN Agency for further advice.
6 License Plates
Wooley v. Maynard
430 U.S. 705 (1977)
Since 1969 New Hampshire has required that noncommercial vehi-
cles bear license plates embossed with the state mo o, ”Live Free or
Die.”
Another New Hampshire statute makes it a misdemeanor ”know-
ingly to obscure the figures or le ers on any number plate.” The term
”le ers” in this section has been interpreted by the State’s highest
court to include the state mo o.
Appellees George Maynard and his wife Maxine are followers
of the Jehovah’s Witnesses faith. The Maynards consider the New
Hampshire State mo o to be repugnant to their moral, religious, and
political beliefs,2 and therefore assert it objectionable to disseminate
this message by displaying it on their automobiles. Pursuant to these
beliefs, the Maynards began early in 1974 to cover up the mo o on
their license plates.
We are thus faced with the question of whether the State may con-
stitutionally require an individual to participate in the dissemination
of an ideological message by displaying it on his private property in
a manner and for the express purpose that it be observed and read by
the public. We hold that the State may not do so.
We begin with the proposition that the right of freedom of thought
protected by the First Amendment against state action includes both
the right to speak freely and the right to refrain from speaking at all.
The State points out that passenger vehicles, but not commercial,
trailer, or other vehicles are required to display the state mo o. Thus,
2
Mr. Maynard described his objection to the state mo o:
By religious training and belief, I believe my ”government” – Jeho-
vah’s Kingdom – offers everlasting life. It would be contrary to that
belief to give up my life for the state, even if it meant living in bondage.
Although I obey all laws of the State not in conflict with my con-
science, this slogan is directly at odds with my deeply held religious
convictions.
I also disagree with the mo o on political grounds. I believe that
life is more precious than freedom.
G. OTHER IDENTIFIER REGISTRIES 597
the argument proceeds, officers of the law are more easily able to de-
termine whether passenger vehicles are carrying the proper plates.
However, the record here reveals that New Hampshire passenger
license plates normally consist of a specific configuration of le ers
and numbers, which makes them readily distinguishable from other
types of plates, even without reference to the state mo o.13
Mitchell v. Maryland Motor Vehicle Administration
--- A.3d --- (Md. 2016)
What does Petitioner, John T. Mitchell, have in common with “Sein-
feld’s” Cosmo Kramer? Both received and displayed on their respec-
tive motor vehicles, for a period of time, vanity license plates bearing
words that had arguably scatological meanings.1 Mitchell did not
give up without a fight when the Maryland Motor Vehicle Adminis-
tration (MVA) recalled his vanity plates; hence, this litigation.
The MVA granted in 2009 John T. Mitchell’s application for van-
ity license plates bearing the word “MIERDA.” Two years later, the
MVA received a complaint about “MIERDA” on the plates displayed
on Mitchell’s vehicle. The MVA determined then that “mierda” trans-
lates into English as “shit” and rescinded the plates according to a
State regulation authorizing the denial or recall of vanity plates con-
taining “profanities, epithets, or obscenities.”
B
Maryland requires the obtention and display of registration plates on
in-state registered motor vehicles. The plates must contain an individ-
ualized registration number, consisting of le ers, numerals, or both,
which is assigned typically by the MVA. For an additional annual fee
of $50, an applicant may select a special, personalized registration
number, subject to the MVA’s approval. Known as “vanity plates,”
these plates allow the display of “a message with at least 2 and up
to 7 characters,” unless the chosen message “has already been issued
or ... is objectionable.” Indeed, Maryland regulations empower the Md. Motor Vehicle Admin., Person-
MVA to deny or rescind vanity plates whose messages bear “profan- alized (Vanity) License Plates, Mary-
land.gov
ities, epithets, or obscenities.”
The MVA offers also two options for customizing a license plate’s
general theme, which may, but need not, be combined with a van-
ity message. First, “background scene plates,” or “commemorative
plates,” display images and text associated with issues the State
13
New Hampshire passenger vehicle license plates generally consist of two let-
ters followed by four numbers. No other license plate category displays this combi-
nation, and no other category bears the state mo o. However, of the approximately
325,000 passenger plates in New Hampshire, 9,999 do not follow the regular pat-
tern, displaying numbers only, preceded by no le ers.
1
In “Seinfeld” (Episode 107 (27 April 1995)), Kramer was sent erroneously van-
ity plates bearing the words “ASSMAN,” which plates had been applied for by a
proctologist.
598 CHAPTER 6. TRADEMARK
wishes to promote through both its speech and fee revenue. Com-
memorative plates are available presently to support the Chesapeake
Bay and agriculture. Second, Maryland allows the customization of
“specialty plates” for members of nonprofit organizations who pay a
fee to express their organizations’ messages via logos, emblems, the
organization’s name, or another combination of characters. § 13–619.
The MVA sells specialty plates for a diverse range of issues from med-
ical and military interests to educational institution alumni associa-
tions, and hobbies.
I. U S C ’ F
A P F ,
“MIERDA” ,
.
In its most recent case elucidating the distinction between private
speech and government speech, the U.S. Supreme Court determined
that a Texas-issued specialty license plate displaying a Confederate
flag constituted speech by the government, not speech by the Texas
Division of the Sons of Confederate Veterans, the organization that
Walker: 135 S. Ct. 2239 (2015) sought the plate design. Walker v. Texas Div., Sons of Confederate Vet-
erans, Inc.. A court’s identification of speech as either that of the
government or of a private person or entity determines whether the
First Amendment applies at all: government statements (and gov-
ernment actions and programs that take the form of speech) do not
normally trigger the First Amendment rules designed to protect the
marketplace of ideas. The First Amendment protects, however, pri-
vate speech on government property, with some limitations.
The Court used three factors to disambiguate government speech
from private speech. The Court considered first whether the gov-
ernment used historically the mechanism of communication in ques-
tion “to speak to the public.” Many States, including Texas, used spe-
cialty plate slogans for nearly a century “to urge action, to promote
tourism, and to tout local industries.” Second, the Court considered
to whom the audience of the communications would tend reason-
ably to a ribute the speech: a private speaker or the public owner
of the property on which the speech takes place. Because of their
well-understood “governmental purposes of vehicle registration and
identification,” the display of “TEXAS” on each plate, and the State’s
ownership of specialty plate designs, “Texas license plate designs are
often closely identified in the public mind with the State.” Finally,
the Court looked to whether the government exercises control over
the communication, for example, by retaining “final approval author-
ity.” Texas had “direct control” over specialty plate messages, includ-
ing “the design, typeface, color, and alphanumeric pa ern for all li-
G. OTHER IDENTIFIER REGISTRIES 599
cense plates,” as well as “final approval authority” over the content
of a specialty plate design. These considerations, taken together, per-
suaded the Court to find the specialty plates at issue to be government
speech.
In the present case, a message on a vanity plate, such as
“MIERDA,” is private speech. Applying the Supreme Court’s first
analytical factor, historical usage, although license plates in general
function historically as government IDs for vehicles, vanity plates
display additionally a personalized message with intrinsic meaning
(sometimes clear, sometimes abstruse) that is independent of mere
identification and specific to the owner. The unique, personalized
messages communicated via vanity plates contrast with the generic,
depersonalized speech conveyed by a specialty plate: many Mary-
land vehicles display identical specialty plates; only the registration
numbers, which on a specialty plate have no intrinsic meaning and
carry no message, will vary. Additionally, private citizens, not the
State of Maryland, create and submit prospective vanity plate mes-
sages. So, historically, vehicle owners have used vanity plates to com-
municate their own personal messages and the State has not used van-
ity plates to communicate any message at all. Unlike the license plate
slogans that States use ‘to urge action, to promote tourism, and to tout
local industries, vanity plates are personal to the vehicle owner, and
are perceived as such.
Turning to the factor of audience perception, the personal nature
of a vanity plate message makes it unlikely that members of the
public, upon seeing the vanity plate, will think the message comes
from the State. Unlike the specialty plates at issue in Walker, vanity
plates bear unique, personalized, user-created messages that cannot
be a ributed reasonably to the government. The fact that this kind
of speech takes place on government property – a license plate – is
not transformative in this context of private speech into government
speech. Although perhaps the perception of a governmental impri-
matur is what makes “MIERDA” arguably clever or humorous in the
first place, this stems from the public perception of State permission
of private speech, not State endorsement or State expression. A fellow
motorist who understood the primary Spanish meaning or English
translation of “mierda” might think: “the MVA let you get away with
that?,” or “you pulled a fast one on the MVA!” Even these sentiments
are rooted in an understanding that the vehicle owner, not the gov-
ernment, is the speaker, and that the speaker implicated the State in
a private message that, surprisingly, the government permi ed, but
certainly did not endorse.
Considering the third factor of the government speech analysis,
the MVA’s statutory and regulatory authority to deny or rescind a
vanity plate based on the content of its message, does not rise to the
600 CHAPTER 6. TRADEMARK
level of such tight control that the personalized messages become gov-
ernment speech. Maryland does not exercise “direct control” over
the “alphanumeric pa ern” displayed on vanity plates in the same
or similar way that Texas controlled specialty plates. In Walker, the
State had sole control over the content of a specialty plate. With re-
spect to vanity plates in Maryland, vehicle owners, not the State, cre-
ate the proposed messages and apply for them. Although the MVA
retains discretion to deny a prospective vanity message, its authority
to recall vanity plates (but not specialty plates) issued erroneously
suggests that the MVA’s control over vanity plates does not rise to
the rigorous level required to transmogrify its regulatory approach
into government speech.
Contrarily, a recent ruling by the Indiana Supreme Court held that
vanity plates constitute government speech because “license plates
have long been used for government purposes” such as vehicle iden-
tification, their messages are perceived to be communicated on behalf
of the State, and the State maintains direct control over the messages
Vawter: 45 N.E.3d 1200 (Ind. 2015) they display. Comm’r of Indiana Bureau of Motor Vehicles v. Vawter
We reject the Vawter court’s reasoning because vanity plates represent
more than an extension by degree of the government speech found on
regular license plates and specialty plates. Vanity plates are, instead,
fundamentally different in kind from the aforementioned plate for-
mats. Maryland has not communicated historically to the public with
vanity messages. Observers of vanity plates understand reasonably
that the messages come from vehicle owners.
[Long discussion of public-forum doctrine.]
Maryland’s vanity plates constitute a nonpublic forum. The pur-
pose of the statutory mandate for license plates on vehicles registered
in Maryland is identification of vehicles on the road. Maryland began
offering vanity plates in 1971. From the vanity plate program’s incep-
tion, Maryland has required applicants to pay a revenue-generating
fee to the State. The purpose of the program was, and still is, to raise
money. This purpose does not evidence a State intent to facilitate
the full and free expression of ideas, but rather to tap into the egocen-
tricities of vehicle owners, to the State’s financial benefit. Admi edly,
Maryland did intend to open a public space for limited private expres-
sion via vanity plates, but only in the sense that it did not establish
accidentally the procedures for vehicle owners to submit prospective
vanity messages and procure vanity plates. This does not mean, how-
ever, that the State intended vanity plates to serve as a public forum,
but rather, that they happen to afford a limited space for speech as an
incentive to lure vehicle owners into paying for vanity plates, thereby
achieving the MVA’s purpose of raising revenue.
Maryland constrains the expressive potential of vanity plates in
accordance with the State’s purposes for license plates in general and
G. OTHER IDENTIFIER REGISTRIES 601
vanity plates in particular. The combination of characters on a plate,
whether a vanity plate or otherwise, must be unique to serve as a gov-
ernment ID. The State limits vanity messages to seven characters, pre-
sumably because that is sufficient to register a unique combination
of characters to each vehicle. Of course, pithy and clever individu-
als find invariably a way to express themselves in such a constrained
space, but that does not bear on whether the State intended to open
a public forum.
II. T S ’ U R “MIERDA” R
V N .
The prohibition of “profanities, epithets, or obscenities” on vanity
plates relates reasonably to Maryland’s purposes of vehicle identifi-
cation and revenue generation, which involve the public display of
license plates. Because the State requires motorists to display license
plates on their vehicles, the public is exposed to the messages that
appear on vanity plates. For be er or worse, our society sets apart
particular words as out-of-bounds; their u erance or display can be
understood reasonably as indecent or offensive, especially in the pres-
ence of minors. “Shit” is one of these words, and that is an English
translation, admi ed by Mitchell, of “mierda.” It is reasonable, there-
fore, for the State to protect knowledgeable observers of vanity plates
from the perception of such a term. Even though a witness to a vanity
plate message will discern easily the vehicle owner as the speaker, be-
cause the speech takes place on government property and only with
State permission, the message will be associated with the State. The
state has a legitimate interest in not communicating the message that
it approves of the public display of offensive scatological terms on
state license plates, and it is reasonable, therefore, for Maryland to
prohibit “profanities, epithets, or obscenities,” content with which it
does not wish to associate.
Neither the MVA’s content-restricting regulation, nor its actions
in accordance with that regulation, constitute viewpoint discrimina-
tion. Viewpoint discrimination occurs when the government targets
particular views taken by speakers on a subject, for example, to dis-
courage one viewpoint and advance another. Here, the Maryland
regulation targets only content—profanities, epithets, and obsceni-
ties – not a speaker’s viewpoint about such terms or any viewpoint
expressed with such terms. Clearly, the regulation does not target
viewpoints in support of organic agriculture. If Maryland wished
to suppress pro-agriculture speech, it probably would not speak in
favor of agriculture via commemorative plates, and it would restrict
the use on vanity plates of terms such as “FARM,” “COMPOST,” and
“CROPS.” This is not the case. Moreover, Maryland did not “impute
an offensive intent” on the part of Mitchell, as he claims. Mitchell’s
602 CHAPTER 6. TRADEMARK
subjective intent is irrelevant because the regulation restricts outright
and objectively profanities, not specific viewpoints for or against pro-
fanity. The MVA rescinded Mitchell’s plates not because of Mitchell’s
real or presumed intent, but based on the content with which Mary-
land is not willing to be associated, and the content the State is not
willing to inflict upon the discerning public.
Substantial evidence supported the MVA’s determination.
Wikipedia research (received in evidence by the ALJ without ob-
jection) revealed “mierda” to be an expletive in Spanish slang that
translates in its primary sense into “shit,” an expletive in English.
Mitchell’s testimony corroborated that “mierda” means “shit,”
among other things, in English. Finally, the MVA maintained that
it received a complaint from an observer of the vanity plate at
issue about the inappropriateness of “MIERDA.” This evidence is
adequate in an administrative law context for a “reasonable mind”
to conclude, as did the MVA, that the State could rescind permissibly
Mitchell’s “MIERDA” vanity plates.
Nevada Administrative Code
Nev. Admin. Code § 482.320
1. The le er “O,” the le er “I” and the le er “Q” must not be
Nomenclature used used alone but may be used with a combination of other le ers
and numbers if the combination does not create confusion be-
tween the le er “O” or “Q” and the number “0” or between the
le er “I” and the number “1.”
2. Only le ers, numbers and spaces may be used on personal-
ized prestige license plates. Le ers, numbers and spaces may
be used in any combination not prohibited by this section or
NRS 482.3667.
3. A blank plate will not be issued.
5. No more than seven characters may be on any one personal-
Which provisions of Nevada's vanity ized prestige license plate.
plate rules are constitutional given Tam,
6. No combination of le ers, numbers or spaces is allowed if it:
Wooley, and Walker?
(a) Creates confusion with any combination on other license
plates.
(b) Expresses contempt, ridicule or superiority of: (1) Race;
(2) Ethnic heritage; (3) Religion; or (4) Gender.
(c) Contains any connotation that is sexual, vulgar, deroga-
tory, profane or obscene.
(d) Contains a direct or indirect reference to a (1) Drug or
drug paraphernalia; or (2) Gang.
(e) Makes a defamatory reference to a person or group.
G. OTHER IDENTIFIER REGISTRIES 603
7. The person who first applies for a particular le er or num-
ber or combination of le ers, numbers or spaces and pays the
prescribed fee for registration and for the personalized prestige
license plates has priority to receive plates with that particular
le er or number or combination of le ers, numbers or spaces
once the application has been accepted by the Department.
Any le er or number or combination of le ers, numbers or spaces Nev. Admin. Code § 482.340
which is available for issuance may be reserved for a period of 30 days Reservations
after the date on which the applicant makes his or her reservation
with the Department. If license plates are to be manufactured in a
new format, the Director will extend the period of a reservation long
enough to allow an applicant to receive plates in the new format.
7 Domain Names
Anticybersquatting Consumer Protection Act
(1) (A) A person shall be liable in a civil action by the owner of a Lanham Act § 43(d)
mark, including a personal name which is protected as a 15 U.S.C. § 1125(d)
mark under this section, if, without regard to the goods or Cyberpiracy prevention
services of the parties, that person—
(i) has a bad faith intent to profit from that mark, includ-
ing a personal name which is protected as a mark un-
der this section; and
(ii) registers, traffics in, or uses a domain name that—
(I) in the case of a mark that is distinctive at the time
of registration of the domain name, is identical or
confusingly similar to that mark;
(II) in the case of a famous mark that is famous at the
time of registration of the domain name, is iden-
tical or confusingly similar to or dilutive of that
mark; or
(III) is a trademark, word, or name protected by reason
of section 706 of title 18 [i.e. the Olympics name,
logo, and related indicia] or section 220506 of title
36 [i.e. the Red Cross sign].
(B) (i) In determining whether a person has a bad faith in-
tent described under subparagraph (A), a court may
consider factors such as, but not limited to – See, e.g., Sporty's Farm LLC v. Sports-
man's Market, Inc., 202 F.3d 489 (2d Cir.
(I) the trademark or other intellectual property rights 2000) (discussing ACPA and applying
of the person, if any, in the domain name; factors).
604 CHAPTER 6. TRADEMARK
(II) the extent to which the domain name consists of
the legal name of the person or a name that is oth-
erwise commonly used to identify that person;
(III) the person’s prior use, if any, of the domain name
in connection with the bona fide offering of any
goods or services;
(IV) the person’s bona fide noncommercial or fair use
of the mark in a site accessible under the domain
name;
(V) the person’s intent to divert consumers from the
mark owner’s online location to a site accessible
under the domain name that could harm the good-
will represented by the mark, either for commer-
cial gain or with the intent to tarnish or disparage
the mark, by creating a likelihood of confusion as
to the source, sponsorship, affiliation, or endorse-
ment of the site;
(VI) the person’s offer to transfer, sell, or otherwise as-
sign the domain name to the mark owner or any
third party for financial gain without having used,
or having an intent to use, the domain name in the
bona fide offering of any goods or services, or the
person’s prior conduct indicating a pa ern of such
conduct;
(VII) the person’s provision of material and misleading
false contact information when applying for the
registration of the domain name, the person’s in-
tentional failure to maintain accurate contact infor-
mation, or the person’s prior conduct indicating a
pa ern of such conduct;
(VIII) the person’s registration or acquisition of multiple
domain names which the person knows are iden-
tical or confusingly similar to marks of others that
are distinctive at the time of registration of such do-
main names, or dilutive of famous marks of others
that are famous at the time of registration of such
domain names, without regard to the goods or ser-
vices of the parties; and
(IX) the extent to which the mark incorporated in the
person’s domain name registration is or is not dis-
tinctive and famous within the meaning of subsec-
tion (c).
(ii) Bad faith intent described under subparagraph (A)
G. OTHER IDENTIFIER REGISTRIES 605
shall not be found in any case in which the court de-
termines that the person believed and had reasonable
grounds to believe that the use of the domain name
was a fair use or otherwise lawful.
(C) In any civil action involving the registration, trafficking, or
use of a domain name under this paragraph, a court may
order the forfeiture or cancellation of the domain name or
the transfer of the domain name to the owner of the mark.
(2) [Provides an in rem action against the domain name if personal
jurisdiction over a suitable defendant is not available.]
(3) The civil action established under paragraph (1) and the in rem
action established under paragraph (2), and any remedy avail-
able under either such action, shall be in addition to any other
civil action or remedy otherwise applicable.
Uniform Domain-Name Dispute Resolution Policy
4. Mandatory Administrative Proceeding. –
UDRP
a. Applicable Disputes. – You are required to submit to a
This language is required to be in-
mandatory administrative proceeding in the event that a cluded in all contracts to register do-
third party (a ”complainant”) asserts that main names in most top-level domains
(i) your domain name is identical or confusingly simi- (e.g. .com). "You" refers to the the party
registering a domain-name; "we" is the
lar to a trademark or service mark in which the com-
domain-name registrar (e.g. Google
plainant has rights; and Domains or Namecheap).
(ii) you have no rights or legitimate interests in respect of
the domain name; and
(iii) your domain name has been registered and is being
used in bad faith.
b. Evidence of Registration and Use in Bad Faith. – For the pur-
poses of Paragraph 4(a)(iii), the following circumstances,
in particular but without limitation, if found by the Panel
to be present, shall be evidence of the registration and use
of a domain name in bad faith:
(i) circumstances indicating that you have registered or
you have acquired the domain name primarily for the
purpose of selling, renting, or otherwise transferring
the domain name registration to the complainant who
is the owner of the trademark or service mark or to
a competitor of that complainant, for valuable consid-
eration in excess of your documented out-of-pocket
costs directly related to the domain name; or
(ii) you have registered the domain name in order to pre-
606 CHAPTER 6. TRADEMARK
vent the owner of the trademark or service mark from
reflecting the mark in a corresponding domain name,
provided that you have engaged in a pa ern of such
conduct; or
(iii) you have registered the domain name primarily for
the purpose of disrupting the business of a competi-
tor; or
(iv) by using the domain name, you have intentionally at-
tempted to a ract, for commercial gain, Internet users
to your web site or other on-line location, by creating
a likelihood of confusion with the complainant’s mark
as to the source, sponsorship, affiliation, or endorse-
ment of your web site or location or of a product or
service on your web site or location.
c. How to Demonstrate Your Rights to and Legitimate Interests in
the Domain Name in Responding to a Complaint. – Any of the
following circumstances, in particular but without limita-
tion, if found by the Panel to be proved based on its eval-
uation of all evidence presented, shall demonstrate your
rights or legitimate interests to the domain name for pur-
poses of Paragraph 4(a)(ii):
(i) before any notice to you of the dispute, your use of, or
demonstrable preparations to use, the domain name
or a name corresponding to the domain name in con-
nection with a bona fide offering of goods or services;
or
(ii) you (as an individual, business, or other organization)
have been commonly known by the domain name,
even if you have acquired no trademark or service
mark rights; or
(iii) you are making a legitimate noncommercial or fair use
of the domain name, without intent for commercial
gain to misleadingly divert consumers or to tarnish the
trademark or service mark at issue.
i. Remedies. – The remedies available to a complainant pur-
suant to any proceeding before an Administrative Panel
shall be limited to requiring the cancellation of your do-
main name or the transfer of your domain name registra-
tion to the complainant.
k. Availability of Court Proceedings. – The mandatory admin-
istrative proceeding requirements set forth in Paragraph 4
shall not prevent either you or the complainant from sub-
mi ing the dispute to a court of competent jurisdiction for
G. OTHER IDENTIFIER REGISTRIES 607
independent resolution before such mandatory adminis-
trative proceeding is commenced or after such proceeding
is concluded. If an Administrative Panel decides that your
domain name registration should be canceled or trans-
ferred, we will wait ten (10) business days (as observed in
the location of our principal office) after we are informed
by the applicable Provider of the Administrative Panel’s
decision before implementing that decision. We will then
implement the decision unless we have received from you
during that ten (10) business day period official documen-
tation (such as a copy of a complaint, file-stamped by the
clerk of the court) that you have commenced a lawsuit
against the complainant in a jurisdiction to which the com-
plainant has submi ed. (In general, that jurisdiction is ei-
ther the location of our principal office or of your address
as shown in our Whois database.) If we receive such docu-
mentation within the ten (10) business day period, we will
not implement the Administrative Panel’s decision, and
we will take no further action, until we receive (i) evidence
satisfactory to us of a resolution between the parties; (ii)
evidence satisfactory to us that your lawsuit has been dis-
missed or withdrawn; or (iii) a copy of an order from such
court dismissing your lawsuit or ordering that you do not
have the right to continue to use your domain name.
1. Definitions. –
UDRP Rules
Panel means an administrative panel appointed by a
Provider to decide a complaint concerning a domain-name
registration.
Provider means a dispute-resolution service provider
approved by ICANN. A list of such Providers ap-
pears at http://www.icann.org/en/dndr/udrp/approved-
providers.htm.
3. The Complaint. –
(a) Any person or entity may initiate an administrative pro-
ceeding by submi ing a complaint [in electronic form] in
accordance with the Policy and these Rules to any Provider
approved by ICANN.
4. Notification of Complaint. –
(a) The Provider shall review the complaint for administra-
tive compliance with the Policy and these Rules and, if
in compliance, shall forward the complaint, including any
annexes, electronically to the Respondent and shall send
608 CHAPTER 6. TRADEMARK
Wri en Notice of the complaint to the Respondent within
three (3) calendar days following receipt of the fees to be
WIPO's current fee schedule is $1,500 paid by the Complainant in accordance with Paragraph 19.
for 1 to 5 domain names, or $4,000 for
5. The Response. –
a three-member panel
(a) Within twenty (20) days of the date of commencement of
the administrative proceeding the Respondent shall sub-
mit a response [in electronic form] to the Provider.
6. Appointment of the Panel and Timing of Decision. –
(a) Each Provider shall maintain and publish a publicly avail-
able list of panelists and their qualifications.
(b) If neither the Complainant nor the Respondent has elected
a three-member Panel, the Provider shall appoint, within
five (5) calendar days following receipt of the response by
the Provider, or the lapse of the time period for the submis-
sion thereof, a single Panelist from its list of panelists.
7. Impartiality and Independence. – A Panelist shall be impartial
and independent and shall have, before accepting appointment,
disclosed to the Provider any circumstances giving rise to jus-
tifiable doubt as to the Panelist’s impartiality or independence.
If, at any stage during the administrative proceeding, new cir-
cumstances arise that could give rise to justifiable doubt as to
the impartiality or independence of the Panelist, that Panelist
shall promptly disclose such circumstances to the Provider. In
such event, the Provider shall have the discretion to appoint a
substitute Panelist.
15. Panel Decisions
(a) A Panel shall decide a complaint on the basis of the state-
ments and documents submi ed and in accordance with
the Policy, these Rules and any rules and principles of law
that it deems applicable.
(b) In the absence of exceptional circumstances, the Panel
shall forward its decision on the complaint to the Provider
within fourteen (14) days of its appointment.
8 Online Accounts
Twitter Rules
We reserve the right to reclaim usernames on behalf of businesses or
The Twitter Rules individuals that hold legal claim or trademark on those usernames.
Accounts using business names and/or logos to mislead others may
be permanently suspended.
G. OTHER IDENTIFIER REGISTRIES 609
You may not engage in username squa ing. Accounts that are in-
active for more than six months may also be removed without further
notice. Some of the factors we take into consideration when determin-
ing what conduct is considered to be username squa ing are:
• the number of accounts created;
• creating accounts for the purpose of preventing others from us-
ing those account names;
• creating accounts for the purpose of selling those accounts; and
• using feeds of third-party content to update and maintain ac-
counts under the names of those third parties.
Using another’s trademark in a manner that may mislead or confuse
others about your brand affiliation may be a violation of our trade- Trademark policy
mark policy.
Referencing another’s trademark is not automatically a violation
of Twi er’s trademark policy. Examples include:
• Using a trademark in a way that is outside the scope of the trade-
mark registration (e.g. territory, or goods and services identi-
fied in the registration).
• Nominative and other fair uses of trademarks are protected
uses under our trademark policy, so long as the account is
clearly distinguished from the trademark owner. This includes
use by resellers in certain regions and accounts engaging in par-
ody, commentary, or news.
Twi er accounts portraying another person in a confusing or decep-
tive manner may be permanently suspended under the Twi er im- Impersonation policy
personation policy.
An account will not be removed if:
• the user shares your name but has no other commonalities, or
• the profile clearly states it is not affiliated with or connected to
any similarly-named individuals.
Accounts with similar usernames or that are similar in appearance
(e.g. the same avatar image) are not automatically in violation of the
impersonation policy. In order to be impersonation, the account must
also portray another person in a misleading or deceptive manner.
Users are allowed to create parody, newsfeed, commentary, and fan Parody, commentary, and fan ac-
accounts on Twi er, provided that the accounts follow the require- count policy
ments below. https://support.twitter.com/articles/106373
• Bio: The bio should indicate that the user is not affiliated with
the account subject by stating a word such as ”parody,” ”fake,”
610 CHAPTER 6. TRADEMARK
”fan,” or ”commentary,” and be done so in a way that would be
understood by the intended audience.
• Account name: The name should not be the exact name of the
account subject without some other distinguishing word, such
as ”not,” ”fake,” or ”fan,” and be done so in a way that would
be understood by the intended audience.
9 Stage Names
Professional Name Policy
Actors Equity, adopted 1986
The Association shall not enroll an applicant under a name, nor shall
a member use a name which is the same as, or resembles (so closely as
to tend to be confused with), the name of an existing enrolled mem-
ber, except that an applicant may enroll under and use such name
professionally upon proof of consent by the existing member, or a
finding by the National Council that under the circumstances there
is no likelihood of confusion, or that there are extenuating circum-
stances.
Administratively, the following procedures will be followed:
• If an applicant or member must change or alter his/her name
to distinguish it from an existing member, he/she may change
the first and/or last name completely or add a full middle name.
(Note: The use of a middle initial under these circumstances is
not acceptable.)
• If a member requests a Temporary Withdrawal/Suspended Pay-
ment inactive status, and if after (5) years he/she has not re-
turned to active status with AEA, any claim to the sole use
and possession which he/she may have to any name or names
within the jurisdiction of Actors’ Equity Association is hereby
declared null and void.
• If a member loses or resigns membership for any reason, he/she
may lose the exclusive right to the professional name.
Please note:
• All contracts, billings, programs and insurance cards must
show your professional name as recorded with Actors’ Equity
Association.
• The use by a member of a name in violation of the above rules
shall be an offense for which a member may be disciplined in
accordance with the pertinent Constitution Article.
David Fagundes
90 Tex. L. Rev. 1093 (2012)
Talk Derby to Me: Intellectual Property Norms Governing Roller Derby
Pseudonyms
G. OTHER IDENTIFIER REGISTRIES 611
Nicknames are common in all sports, but contemporary women’s
roller derby has taken this to a new level by publicly identifying
skaters almost exclusively by means of facetious pseudonyms called
“derby names” or “skate names.” An ideal derby name typically has
three components: it sounds something like a real name (i.e., has
a plausible first name–last name construction), it connects to derby
in some meaningful way (i.e., it suggests that the skater is fierce,
fast, or tough), and it creates some sense of an overall persona. L.A.
Derby Dolls blocker Tara Armov furnishes an example of a derby “A-
name.” “Tara” is a standard woman’s first name, while “Armov” is
a plausible-sounding last name. The name also suggests that Tara is
tough enough that she’ll tear your arm off. And the vaguely Slavic
overtones of her moniker suggest an Eastern Bloc motif that Tara
plays up by using faux Cyrillic le ering on her helmet.
The practice of using pseudonyms has created a patchwork of
derby names that are simultaneously fierce and funny. Derby names
may refer to great actresses (Grace Killy, Sophia LoRenegade), not-
so-great actresses (Gori Spelling), or miscreant heiresses (Paris Kill-
ton).48 Pseudonyms invoke ancient art (Venus de Maul’r) and pop
culture (Killo Ki y) alike. Skaters name-check favorite bands (Joy
Collision) or musicians both popular (Beonslay) and niche (Stiv Ska-
tor49). Multiple monikers may reference the same public figure
(Kristi Yamagotcha, Kristi Imahootchie). Some names don’t refer to
people or things but are just amusing puns (Anne R. Kissed, Anna
Notherthing). A skate name may refer back to derby itself (Helen
Wheels, Axles of Evil). Names can emphasize a skater’s fierceness
(Eva Destruction, Anita Kill) or downplay it (Sparkle Plenty). Some
derby sobri- quets could function easily as porn names (Tae Kwon
Ho), a few are outright gynecological (Vulvarine), and still others are
just gross (Emma Rhoids). Political events both happy (Paris Troika)
and tragic (Blanche Davidian) may be invoked. A few require a bit
of historical knowledge (Reyna Terror) or literary awareness (Penny
Dreadful, Madame Ovary) to decode. Derby names may pay homage
to the spirit of a place you love (Louise Ze Animal, Fleur de Lethal,
Dumaine A raction50). Almost all skate names are in English, but
some allude to phrases more familiar to foreign ears (Be e Noir, Fox
Sake). Names chosen at the early dawn of derby’s resurgence tended
to be more abstract and conceptual (Suzy Snakeeyes, Tawdry Tem-
pest), while a few are simply inscrutable (Lux, V. Lee). My personal
favorite is Raven Seaward of the L.A. Derby Dolls, whose name was
inspired by the television show Arrested Development.
48
The celebrities who are name-checked by derby girls have not, to my knowl-
edge, complained about the unauthorized plays on their names. Tori Spelling has
actually reached out to Gori Spelling and seems enthusiastic about having a derby
doppelganger.
612 CHAPTER 6. TRADEMARK
Derby pseudonyms are at least as important to the skaters who
adopt them as they are to the viewing public. First, nicknames serve
a simple, trademark-like function of facilitating derby girls’ notoriety
to the viewing public by differentiating skaters from one another. Ob-
viously, standard government names can serve this function as well,
but derby names are often particularly good source identifiers be-
cause they are tied to aesthetic features that fill out distinct personas.
And unlike real names (and standard trademarks), derby names also
serve an identity-concealing function in that they can separate a com-
petitor’s derby persona from her real-life identity, obscuring the lat-
ter from derby fans and the world more generally. This is important
for skaters who have professional careers (law, medicine) in which
participating in derby as an extracurricular activity may be looked
down on.61 Relatedly, made-up names can also decrease the chances
that overzealous fans (or, more concerningly, stalkers) will be able to
identify and track down skaters.
Second, skate names facilitate skaters’ abilities to develop identi-
ties within the roller derby world. Many participants are drawn to
derby because it provides a welcome contrast to the everyday grind
and provides a space that permits them to explore aspects of their
personalities that cannot find expression in their daily lives.
Finally, derby names are inextricably bound up with the sense of
community that the sport provides for its participants. Once a skater
secures a name, it’s how other people in the derby world will refer
to her in all se ings – not only during bouts, but at practices, social
events, and online – so much so that even teammates may not know
one another’s real names. You know you’ve left workaday life behind
and entered the insular derby community (whether at a practice, a
team dinner, or a night out at a bar) when people stop calling you
“Jane Smith” and instead refer to you as “Sasha Haughtbich.”
Even though derby names are theoretically unlimited, skaters fre-
quently choose names that turn out to be identical (or very similar to)
ones that other derby girls have thought of first. Countless skaters
have likely thought of the outstanding name “Princess Slay-Ya,” for
example, but it was first used by (and thus exclusively belongs to, for
reasons we shall shortly see) one of the Kansas City Roller Warriors.
One might suppose that because derby comprises a basically decent
community where people share common interests and make close
friends, there would be no objections if other skaters decided to use
names identical or very similar to preexisting ones.
Nope. However much derby may embody communal sharing
norms in many respects, name usage represents a glaring exception.
61
One skater who works as a lawyer explained that when she appears in court,
she doesn’t want the judge imagining her in skates and fishnets.
G. OTHER IDENTIFIER REGISTRIES 613
Derby girls react with anxiety and rancor to the discovery that others
have sought to skate under names similar to theirs. Name repetition,
and even similarity, triggers rage in skaters who feel they have supe-
rior rights in their derby aliases: “When you bite on someone’s style
you look like a douche and so uncool. Just imagine finding out at
2:30am in a bar when you are not completely sober that the person
you are talking to has an almost identical name as yours. SUPER AN-
NOYING.”
Derby girls care about maintaining the uniqueness of their aliases
for three primary reasons. First, names in derby function as trade-
marks do in the commercial world: they ensure that skaters will not
be confused with one another and that the viewing public can tell
skaters apart. This is particularly true in the context of actual bouts,
when announcers rely on derby names to relay action to spectators
over a public-address system. As competition becomes increasingly
interleague, the chances that two identically named skaters in leagues
thousands of miles apart could skate against one another no longer
seem so slim.
Second, and probably more importantly, though, skaters care
about the uniqueness of their names despite their lack of discernible
market value because skate names are a repository for the identities
that skaters work so hard to create in a subculture that is profoundly
important to them. Using a skater’s preexisting name – or even us-
ing a name very similar to a skater’s preexisting name – effects a dig-
nitary harm on several levels. First, it may detract from the hard-
earned social capital that a skater has built up within the derby world,
even where the senior skater’s fame is sufficiently strong that no one
is likely to confuse the junior skater with her. Second, overlapping
name use violates one of the central tenets of the derby world, the
“don’t be a douchebag rule,” so that not honoring the uniqueness of
a preexisting skate name communicates disrespect in the same way
as an intentional, if costless, trespass to land. Finally, names are typ-
ically a product of careful thought and effort, so that they express
not just the holder’s identity, but also her cleverness. Having multi-
ple skaters use the same sobriquet dilutes that sense of ingenuity by
making it seem commonplace.
Third, the gravity with which name infringement is treated in
the derby world may seem puzzling because derby nicknames are
theoretically infinite, so that overlap need only spur skaters to pick
a new one from an inexhaustible commons. Many skaters contest
whether derby names actually do comprise an inexhaustible com-
mons. Newer rollergirls in particular often complain that with exist-
ing names numbering in the five figures, it’s often necessary to think
of many possible nicknames before finding one that is unclaimed, so
that newer skaters often have to se le for a sixth-choice skate name.
614 CHAPTER 6. TRADEMARK
Not all names are created equal. Even if there is an infinitude of pos-
sible names, only some of those names will suit a skater’s personality
and style, so that a world in which skate names must be unique may
well cause a newer skater to experience a much lower chance of being
able to claim a name that truly suits her.
The roller derby world has eschewed trademark and other IP law
almost completely as a means of protecting skate names, turning in-
stead to its own skater-created and -operated system of name regula-
tion and registration.
As demand for names increased, and casual enforcement increas-
ingly failed, derby name regulation godmother and former Women’s
Flat Track Derby Association president Hydra stepped in to create
the ur-version of what has since become known as the Master Roster.
The Master Roster began as a humble Excel spreadsheet that noted
the same basic data about names that it still does today: a skater’s
derby name, the date that the name was entered on the Master Roster,
and the skater’s team affiliation. In early 2006, there were 2,585 regis-
tered names on the Master Roster, and the increasing pace of submis-
sion required the Roster’s administrators to release an updated ver-
sion of the spreadsheet every week. Soon after, the administrators re-
leased an online version of the Master Roster with a search algorithm
that enabled skaters to evaluate whether their proposed name was
similar to a preexisting one and even how close the proximity was.
This new functionality and increased accessibility enhanced the effi-
ciency of name registration significantly, and by late 2007, the num-
ber of registered names had already exceeded 10,000. This version of
the Master Roster remains publicly available online.
Three core principles govern derby name regulation. First is a
uniqueness requirement: only one skater can skate under a given
name. The second instantiates the idea of priority: where two names
are identical or excessively similar, the skater with the earlier claim
to the name has the right to use it. The third creates elemental stan-
dards for resolving overlapping name conflicts: where two names
are reasonably similar, the second skater must ask the first skater for
permission to use the name. This permission must be in writing and
submi ed to the Master Roster’s administrators in order to authen-
ticate it. Names that are very similar to preexisting names but that
have been approved via wri en permission by the senior skater are
listed on the Master Roster with the note “(cleared).”
The Master Roster’s name search feature allows users to deter-
mine the degrees of similarity between a proposed name and existing
names, and this result strongly determines the likelihood that a name
will be accepted or rejected. The derby name checker returns one of
five results, alerting users that a proposed moniker’s degree of sim-
ilarity to preexisting ones is either “very high,” “high,” “medium,”
G. OTHER IDENTIFIER REGISTRIES 615
“low,” or “very low.” Names of very high similarity are “almost guar-
anteed to be rejected,” while names of very low similarity are likely
to be accepted. For example, inpu ing the name “Nurse Wretched”
into the name checker returns the result that the name is identical
to a preexisting name (“Nurse Wretched”), of high similarity to an-
other preexisting name (“Nurse Ratchet”), and of low similarity to
yet another one (“Wretched”). This name would almost certainly be
rejected by the Master Roster’s administrators. These results are advi-
sory rather than dispositive, though: the administrators retain discre-
tion over the acceptance and rejection of all proposed derby names,
which is particularly salient in cases where a name has a nontrivial
degree of similarity to a preexisting one.
The Master Roster’s substantive rules are supported by a number
of formal registration procedures. For instance, skaters are advised
not to submit a name until they have been participating in derby for
at least a couple of months in order to avoid wastefully registering
a name to beginning skaters who end up dropping out or failing to
make a team. The submission of names to the Master Roster is ini-
tially organized by a designated skater within each league, a “name
wrangler,” who aggregates the names of qualifying new skaters, vets
them for validity, and submits them in batches to the Master Ros-
ter administrators. Priority in cases of identical submissions is deter-
mined by the date stamp on the e-mail received by the Master Ros-
ter’s administrators. In other words, registration is a ma er of filing
priority, not actual use, so that if two skaters simultaneously seek
to register the same name, the Master Roster’s administrators will
register the first submission they receive, regardless of which skater
adopted the name first.
The process of adding names to the registry raises a correlative
problem: what to do with names of skaters who have quit or re-
tired? This problem looms more and more as the number of derby
girls grows ever larger and names grow ever scarcer. Skaters (and
name wranglers) are encouraged to notify the Master Roster’s admin-
istrators when they are no longer using their names, and leagues of-
ten submit lists of names to the Master Roster that are to be deleted.
Name removal does not happen as often as it should, and certainly
not as often as name addition happens, for several reasons. First, in-
centives to retire one’s own name are weak. There are no ways to
sanction skaters who have left derby without doing the courtesy of
notifying the Master Roster that their names are now available. Sec-
ond, skaters often change their minds about retirement, so any derby
girl who has even a sliver of interest in returning to the sport will
be disinclined to give up her name. And third, even when disused
names are purged from the Master Roster, skaters may not want a
“used” name because using it may seem derivative rather than orig-
616 CHAPTER 6. TRADEMARK
inal and because it may have unwanted associations with its prior
user. As a result of all this, turnover in names tends to be slow, and
the Master Roster contains many names of skaters who have become
inactive, despite best efforts by name wranglers and list administra-
tors.
Assuming that there is agreement that two names are in conflict
(i.e., where they are either identical or substantially similar), an ad-
ditional issue remains: How are a skater’s superior name rights en-
forced? The Master Roster administrators can decline to register a
name, but as an informal organization, they lack any coercive force,
so a skater who consciously uses an overlapping name cannot be
fined or thrown in jail. And yet despite the total absence of formal co-
ercive sanctions, the incidence of repetitive name use is small, thanks
to informal enforcement norms. This raises two related puzzles: How
do skaters enforce rules governing derby name uniqueness, and why
is the level of compliance so high?
The answer to the how question is straightforward. The primary
means of enforcement is simply personal contact and interaction that
relies on skaters’ strong incentives to maintain the uniqueness of their
own names. These exchanges usually take the form of an e-mail ex-
change between the skater who wants to use a name and the one who
has registered a similar one. Skaters exhibit a high degree of defer-
ence to the first-to-register rule. The dog that didn’t bark in this con-
text is the number of times that skaters use the Master Roster to de-
termine that their proposed name is too similar to a preexisting one
and defer to the system by simply seeking another name. While it’s
impossible to measure absence of evidence, the number of times the
Master Roster (while far from perfectly effective) successfully fends
off name conflicts is almost certainly far greater than the number of
name conflicts it fails to deter.
the informal sanctions that skat- ers inflict on one another for
violating name-uniqueness norms effectuate compliance to a large
extent. Skaters unanimously agree that choosing a name that has
clearly been adopted by another skater—even a skater in another
league—without permission would be egregiously socially unaccept-
able within the derby community and lead to ostracism. And since
being part of a community is central to the derby experience, the
kind of shaming that flouting name-priority norms would engender
would undermine entirely the advantages of being part of derby in
the first place.
If these sanctions do not work, there is always the oldest form
of self-help: violence. Skaters have (perhaps facetiously) invoked
threats of physical harm against those who fail to respect the derby
world’s rules and norms of name usage. As one rollergirl put it, “sure
there’s no laws in place – you don’t even have to register your derby
G. OTHER IDENTIFIER REGISTRIES 617
name – it’s COURTESY. Ref might not see you smash me in the face—
but I know, and trust me baby, I’m comin for ya.” Added another, “I
totally agree with the not stealing/copying of names . . . . Someone
once said imitation was the best form of fla ery. . . . So fla er me
and then let me kick your a$$.” These threats are just talk, after all,
and should be taken with a grain of salt. There is no evidence (that
I’ve seen, anyway) of a derby girl beating up someone who used her
name without permission. But in a sport where skaters are skilled
at using full-body blocks at high speeds in the course of competition,
the idea of using violence to lay down the law against those who flout
shared norms about name usage certainly does not seem completely
implausible.
Instances of formal regulation represent a empts to protect derby
girls’ names and identities from infringement by actors external to the
derby world. Ivanna S. Pankin registered her name as a trademark
largely because she wanted to make sure that competitors outside
the derby world could not free ride on her business goodwill. Babe
Ruthless’s concern about unauthorized use of her moniker was di-
rected at a film production company, not at another roller derby girl.
In these and other instances, the Master Roster did sufficient work to
assure the skaters that no one else would compete under their derby
names. It remains necessary to invoke formal law only outside con-
texts that, and against individuals who, are not governed by roller
derby’s name-exclusivity norms.
618 CHAPTER 6. TRADEMARK
7
Advertising
False advertising law is not, strictly speaking, intellectual property
law, but it is a close relative. At the very lest, we need to say a bit about
adveritisng law to complete our survey of trademark law. Competi-
tor suits for false advertising have a lot in common with competitor
suits for trademark infringement and unfair competition, and trade-
mark law incorporates several devices to discourage misleading uses
of trademarks. But a slightly deeper dive – exploring advertising law
as a body of law devoted to controlling information – casts new light
on other areas of intellectual property as well.
Three issues are pervasive in advertising law: falsity, material-
ity and commerciality. Falsity is important because true statements
about one’s products (or others) generally enjoy robust First Amend-
ment protections. Not every false statement is actionable; only those
that is material to consumers’ purchasing decisions. And advertising
law only generally applies to statements ”in commercial advertising
or promotion,” to quote the Lanham Act. Falsity, materiality, and
commerciality all raise conceptual questions about the control infor-
mation that go well beyond advertising law. So we start with the tort
law of competitor suits for false advertising, then discuss its close tort
and tort-like substitutes, and then look more broadly at other sources
of advertising law.
The central concern of false advertising law is to prevent the dis-
semination of false commercial information. Note that this task nec-
essarily requires courts to distinguish true statements from false ones.
At least five different conceptions of truth bu heads in the caselaw:
• Scientific truth exists in the world and can be determined
through objective investigation.
• Linguistic truth is conventional; the true meaning of a term is
the meaning a reasonable listener (e.g., a reasonable consumer)
would regard it as having.
• Legal truth is a ma er of authority; courts must defer to what
620 CHAPTER 7. ADVERTISING
legislatures and agencies assert.
• Trademark truth is determined by priority of appropriation; the
owner of a mark is entitled to say definitively what it means.
• In a pluralistic society commi ed to free speech, there is no ab-
solute truth; everyone is entitled to express their own opinions.
As you read the cases, always ask which conception or conceptions
the courts are appealing to.
A False Advertising
The leading advertising treatises are As with trademark and unfair competition, state and federal law pro-
David H. Bernstein & Bruce P. Keller, vide overlapping – and often redundant – protections against false
The Law of Advertising, Marketing, and
advertising. We will focus on our old federal friend, section 43(a),
Promotions (Law Journal Press) and
James Astrachan, The Law of Advertis-
except that now our a ention turns to a different subparagraph.
ing (Matthew Bender, on Lexis, current
through 2014). See also the casebook Lanham Act
Rebecca Tushnet & Eric Goldman, Ad-
vertising & Marketing Law: Cases and
Materials (self-published, available in a
(a) Civil action. –
variety of convenient and inexpensive (1) Any person who, on or in connection with any goods or
formats) services, or any container for goods, uses in commerce any
word, term, name, symbol, or device, or any combination
thereof, or any false designation of origin, false or mislead-
15 U.S.C. § 1125 [Lanham Act § 43]
False designations of origin, false de- ing description of fact, or false or misleading representa-
scriptions, and dilution forbidden tion of fact, which— …
(B) in commercial advertising or promotion, misrepre-
sents the nature, characteristics, qualities, or geo-
graphic origin of his or her or another person’s goods,
services, or commercial activities,
shall be liable in a civil action by any person who believes
that he or she is or is likely to be damaged by such act.
In a sense, false advertising law shares the tort structure of trademark
law, but without the requirement that the plaintiff own a trademark.
See Rebecca Tushnet, Running the
Gamut from A to B: Federal Trademark
The false advertising tort lacks anything corresponding to procedural
and False Advertising Law, 159 U. Pa. L. rules, and subject ma er and ”similarity” are so interwoven that it
Rev. 1305 (2011). makes sense to treat them together.
1 "Ownership": Competitor Standing
One gains tort protection against competitors’ false advertising com-
petitors simply by having competitors – by engaging in a commercial
activity that has customers capable of being diverted by lies. This re-
quirement of competitor standing functions as a kind of ownership
A. FALSE ADVERTISING 621
rule. Modern standing law under § 43(a) is considerably more liberal
than its common-law precursors.
American Washboard Co. v. Saginaw Mfg. Co.
103 F. 281 (6th Cir. 1900)
[The plaintiff sold aluminum washboards marked ”aluminum.” It al-
leged that it had ”contracted for and purchased … the entire output
of sheet aluminum suitable for forming the rubbing sheets of wash-
boards.” The defendant sold zinc washboards, falsely marked ”alu-
minum.”]
We do not find it anywhere averred that the defendant, by means (Taft, J.)
of its imitation of complainant’s trade-mark, is palming off its goods
on the public as and for the goods of complainant. The bill is not pred- Why didn't the plaintiff sue for trade-
icated upon that theory. It undertakes to make a case, not because the mark infringement?
defendant is selling its goods as and for the goods of complainant, but
because the defendant is deceiving the public by selling to it a board
not made of aluminum, although false branded as such.
It is doubtless morally wrong and improper to impose upon the
public by the sale of spurious goods, but this does not give rise to a
private right of action unless the property rights of the plaintiff are
thereby invaded. There are many wrongs which can only be righted
through public prosecution, and for which the legislature, and not
the courts, must provide a remedy.
Take the metal which is the subject-ma er of the controversy in
this case. Many articles are now being put upon the market under the
name of aluminum, because of the a ractive qualities of that metal,
which are not made of pure aluminum, yet they answer the purpose
for which they are made and are useful. Can it be that the courts have
the power to suppress such trade at the instance of others starting in
the same business who use only pure aluminum?
Nor do we find anything in the allegations of the bill as to com-
plainant’s monopoly in the use of the metal aluminum for washboard
purposes which would extend its rights. We are not referred to any
case, nor can we think of any reason why one who has obtained a
monopoly in the material of which his goods are made should have
any broader rights in protecting his trade-name than another who is
engaged in competition in the same line of business.
Ely-Norris Safe Co. v. Mosler Safe Co.
7 F.2d 603 (2d Cir. 1925)
[The plaintiff held a patent [No. 827,351] for a safe with an ”explo-
sion chamber” – a design ”to prevent burglarious entrances to safes,
vaults, and the like through the doors by the use of explosives.” Its
safes had a metal band around the door to cover the explosion cham-
ber. The defendant sold safes with a metal band around the door, but
no explosion chamber beneath.]
(Learned Hand, J.)
622 CHAPTER 7. ADVERTISING
There is no part of the law which is more plastic than unfair com-
petition, and what was not reckoned an actionable wrong 25 years
ago may have become such today. While a competitor may, generally
speaking, take away all the customers of another that he can, there
are means which he must not use. One of these is deceit. We con-
ceive that in the end the questions which arise are always two: Has
the plaintiff in fact lost customers? And has he lost them by means
which the law forbids? The false use of the plaintiff’s name is only an
instance in which each element is clearly shown.
The reason, as we think, why such deceits have not been regarded
as actionable by a competitor, depends only upon his inability to
show any injury for which there is a known remedy. In an open
market it is generally impossible to prove that a customer, whom the
defendant has secured by falsely describing his goods, would have
bought of the plaintiff, if the defendant had been truthful. Without
that, the plaintiff, though aggrieved in company with other honest
traders, cannot show any ascertainable loss. The law does not allow
him to sue as a vicarious avenger of the defendant’s customers.
But, if it be true that the plaintiff has a monopoly of the kind of
wares concerned, and if to secure a customer the defendant must rep-
resent his own as of that kind, it is a fair inference that the customer
wants those and those only. Had he not supposed that the defendant
could supply him, presumably he would have gone to the plaintiff,
who alone could. If a tradesman falsely foists on a customer a substi-
tute for what the plaintiff alone can supply, it can scarcely be that the
plaintiff is without remedy, if he can show that the customer would
certainly have come to him, had the truth been told.
Mosler Safe Co. v. Ely-Norris Safe Co.
273 U.S. 132 (1927)
(Holmes, J.)
It is consistent with every allegation in the bill and the defendant in
argument asserted it to be a fact, that there are other safes with explo-
sion chambers beside that for which the plaintiff has a patent. There
is nothing to show that customers had they known the facts would
have gone to the plaintiff rather than to other competitors in the mar-
ket, or to lay a foundation for the claim for a loss of sales. The bill
is so framed as to seem to invite the decision that was obtained from
the Circuit Court of Appeals, but when scrutinized is seen to have so
limited its statements as to exclude the right to complain.
Lexmark International, Inc. v. Static Control Components, Inc.
134 S. Ct. 1377 (2014)
This case requires us to decide whether respondent, Static Control
Components, Inc., may sue petitioner, Lexmark International, Inc.,
for false advertising under the Lanham Act.
I. B
A. FALSE ADVERTISING 623
Lexmark manufactures and sells laser printers. It also sells toner
cartridges for those printers (toner being the powdery ink that laser
printers use to create images on paper). Lexmark designs its printers
to work only with its own style of cartridges, and it therefore domi-
nates the market for cartridges compatible with its printers. That mar-
ket, however, is not devoid of competitors. Other businesses, called
“remanufacturers,” acquire used Lexmark toner cartridges, refurbish
them, and sell them in competition with new and refurbished car-
tridges sold by Lexmark.
Lexmark would prefer that its customers return their empty car-
tridges to it for refurbishment and resale, rather than sell those car-
tridges to a remanufacturer. So Lexmark introduced what it called a
“Prebate” program, which enabled customers to purchase new toner
cartridges at a 20-percent discount if they would agree to return the
cartridge to Lexmark once it was empty. To enforce the Prebate terms,
Lexmark included a microchip in each Prebate cartridge that would
disable the cartridge after it ran out of toner; for the cartridge to be
used again, the microchip would have to be replaced by Lexmark.
Static Control is not itself a manufacturer or remanufacturer of
toner cartridges. It is, rather, the market leader in making and sell-
ing the components necessary to remanufacture Lexmark cartridges.
In addition to supplying remanufacturers with toner and various
replacement parts, Static Control developed a microchip that could
mimic the microchip in Lexmark’s Prebate cartridges. By purchasing
Static Control’s microchips and using them to replace the Lexmark
microchip, remanufacturers were able to refurbish and resell used
Prebate cartridges.
As relevant to its Lanham Act claim, Static Control alleged two
types of false or misleading conduct by Lexmark. First, it alleged
that through its Prebate program Lexmark “purposefully misleads
end-users” to believe that they are legally bound by the Prebate terms
and are thus required to return the Prebate-labeled cartridge to Lex-
mark after a single use. Second, it alleged that upon introducing the
Prebate program, Lexmark “sent le ers to most of the companies in
the toner cartridge remanufacturing business” falsely advising those
companies that it was illegal to sell refurbished Prebate cartridges
and, in particular, that it was illegal to use Static Control’s products
to refurbish those cartridges.
III. S C ’ R T S U § ₁₁₂₅₍ ₎
Thus, this case presents a straightforward question of statutory inter-
pretation: Does the cause of action in § 1125(a) extend to plaintiffs
like Static Control? The statute authorizes suit by “any person who
believes that he or she is likely to be damaged” by a defendant’s false
advertising.
624 CHAPTER 7. ADVERTISING
A. Zone of Interests
First, we presume that a statutory cause of action extends only to
plaintiffs whose interests fall within the zone of interests protected
by the law invoked.
We thus hold that to come within the zone of interests in a suit
for false advertising under § 1125(a), a plaintiff must allege an injury
to a commercial interest in reputation or sales. A consumer who is
hoodwinked into purchasing a disappointing product may well have
an injury-in-fact cognizable under Article III, but he cannot invoke
the protection of the Lanham Act – a conclusion reached by every
Circuit to consider the question. Even a business misled by a supplier
into purchasing an inferior product is, like consumers generally, not
under the Act’s aegis.
B. Proximate Cause
Second, we generally presume that a statutory cause of action is lim-
ited to plaintiffs whose injuries are proximately caused by violations
of the statute.
Put differently, the proximate-cause requirement generally bars
suits for alleged harm that is “too remote” from the defendant’s un-
lawful conduct. That is ordinarily the case if the harm is purely
derivative of misfortunes visited upon a third person by the defen-
dant’s acts. In a sense, of course, all commercial injuries from false
advertising are derivative of those suffered by consumers who are de-
ceived by the advertising; but since the Lanham Act authorizes suit
only for commercial injuries, the intervening step of consumer decep-
tion is not fatal to the showing of proximate causation required by the
statute.
We thus hold that a plaintiff suing under § 1125(a) ordinarily must
show economic or reputational injury flowing directly from the de-
ception wrought by the defendant’s advertising; and that that occurs
when deception of consumers causes them to withhold trade from
the plaintiff. That showing is generally not made when the decep-
tion produces injuries to a fellow commercial actor that in turn affect
the plaintiff. For example, while a competitor who is forced out of
business by a defendant’s false advertising generally will be able to
sue for its losses, the same is not true of the competitor’s landlord, its
electric company, and other commercial parties who suffer merely as
a result of the competitor’s inability to meet its financial obligations.
IV. A
Applying those principles to Static Control’s false-advertising claim,
we conclude that Static Control comes within the class of plaintiffs
whom Congress authorized to sue under § 1125(a).
A. FALSE ADVERTISING 625
To begin, Static Control’s alleged injuries – lost sales and damage
to its business reputation – are injuries to precisely the sorts of com-
mercial interests the Act protects. Static Control is suing not as a de-
ceived consumer, but as a “perso[n] engaged in” “commerce within
the control of Congress” whose position in the marketplace has been
damaged by Lexmark’s false advertising. § 1127. There is no doubt
that it is within the zone of interests protected by the statute.
Static Control also sufficiently alleged that its injuries were proxi-
mately caused by Lexmark’s misrepresentations. This case, it is true,
does not present the classic Lanham Act false-advertising claim in
which one competitor directly injures another by making false state-
ments about his own goods or the competitor’s goods and thus induc-
ing customers to switch. But although diversion of sales to a direct
competitor may be the paradigmatic direct injury from false advertis-
ing, it is not the only type of injury cognizable under § 1125(a). For at
least two reasons, Static Control’s allegations satisfy the requirement
of proximate causation.
First, Static Control alleged that Lexmark disparaged its business
and products by asserting that Static Control’s business was illegal.
When a defendant harms a plaintiff’s reputation by casting asper-
sions on its business, the plaintiff’s injury flows directly from the au-
dience’s belief in the disparaging statements. Courts have therefore
afforded relief under § 1125(a) not only where a defendant denigrates
a plaintiff’s product by name but also where the defendant damages
the product’s reputation by, for example, equating it with an inferior
product.
In addition, Static Control adequately alleged proximate causa-
tion by alleging that it designed, manufactured, and sold microchips
that both (1) were necessary for, and (2) had no other use than, refur-
bishing Lexmark toner cartridges. It follows from that allegation that
any false advertising that reduced the remanufacturers’ business nec-
essarily injured Static Control as well. Taking Static Control’s asser-
tions at face value, there is likely to be something very close to a 1:1
relationship between the number of refurbished Prebate cartridges
sold (or not sold) by the remanufacturers and the number of Prebate
microchips sold (or not sold) by Static Control. Where the injury al-
leged is so integral an aspect of the violation alleged, there can be no
question that proximate cause is satisfied.
Although we conclude that Static Control has alleged an adequate
basis to proceed under § 1125(a), it cannot obtain relief without evi-
dence of injury proximately caused by Lexmark’s alleged misrepre-
sentations. We hold only that Static Control is entitled to a chance to
prove its case.
626 CHAPTER 7. ADVERTISING
2 "Infringement": Prohibited Conduct
Notice the threshold condition in § 43(a)(1)(B): the challenged false
statement must be ”in commercial advertising or promotion.” This
threshold condition is heavily influenced by First Amendment con-
cerns. In addition, the statement must concern ”the nature, character-
istics, qualities, or geographic origin of his or her or another person’s
goods, services, or commercial activities,” a phrase that is expansive
but not infinitely so.
Greater Houston Transportation Company v. Uber Technologies, Inc.
155 F. Supp. 3d 670 (S.D Tex. 2015)
Plaintiffs are taxicab permit-holders in Houston and San Antonio,
who claim that Uber is unfairly competing with the taxicab industry
by misrepresenting the safety of its services to consumers.
First, Plaintiff cites Uber’s Senior Communications Associate, Lau-
ren Altmin’s statement on an NBC Detroit affiliate’s website, in a post
titled, “Local 4 Defenders: Is Uber X safe?”. The article on the website
republished Uber’s statement as follows:
What I can tell you is that Uber takes passenger safety very
seriously. We work every day to connect riders with the
safest rides on the road and go above and beyond local
requirements in every city we operate. Uber only part-
ners with drivers who pass an industry-leading screening
that includes a criminal background check at the county,
federal and multistate level going back as far as the law al-
lows. We also conduct ongoing reviews of drivers’ motor
vehicle records during their time as an Uber partner.
For more information on what makes Uber the safest
rides on the road, please see our website ...
Plaintiffs also point to a statement by Uber’s Head of Communica-
tions for North America, Lane Kasselman, in an April 24, 2014 article
on Mashable.com entitled “Faulty Background Checks May Put Uber
X Passengers at Risk, Report Says.” The statement quoted in the arti-
cle reads:
Uber’s industry-leading background checks help connect
consumers with the safest ride on the road.... Our driver
partner background checks are more thorough than those
of taxi [sic] in most cities and include county, state and
federal screens going back seven years. We continue to
improve and are always working hard to tighten our poli-
cies and processes to ensure that Uber remains the safest
transportation option available.
In addition, Plaintiffs take issue with a quote by Kasselman in an
A. FALSE ADVERTISING 627
April 24, 2014, NBCBayArea.com news article, titled “Is Uber Keep-
ing Riders Safe?”. In the article, Kasselman states, “We’re confident
that every ride on the Uber platform is safer than a taxi.” Plaintiffs
also allege that a similar email response from Kasselman included
in a news story on NBCLosAngeles.com, was false or misleading:
“We’re confident that every ride on Uber is safer than a taxi.”
Plaintiffs allege that Uber’s statements quoted in online news ar-
ticles were misleading to potential consumers. Defendant argues
that false-advertising claims under the Lanham Act must be based
on “commercial advertising or promotion,” and contends that state-
ments contained in news articles do not qualify as commercial adver-
tising.
Uber argues that each of its statements quoted in news articles
are “inextricably intertwined with the reporters’ coverage” in each
article, citing Boulé v. Hu on (affirming dismissal of a Lanham Act Boulé: 328 F.3d 84 (2d Cir.2003)
claim based on the defendant’s statements as quoted in a news ar-
ticle). Defendant further argues that the alleged statements are not In Boulé, the plaintiffs and defendants
commercial speech, because commercial speech is speech which does competed in selling paintings by Lazar
Khidekel. Two defendants, who were
no more than propose a commercial transaction.
Khidekel's son and daughter-in-law,
This area of law is currently evolving. The Second Circuit recently defendants were quoted in ARTnews
explored the commercial and non-commercial speech dichotomy in claiming that paintings being sold
Ony, Inc. v. Cornerstone Therapeutics, Inc.. The Ony, Inc court found by the plaintiff were not authentic
that publication and dissemination of a scientific study that had the Khidekels.
effect of touting a company’s product is noncommercial speech and Ony, Inc.: 720 F.3d 490 (2d Cir. 2013)
was thereby immune from the false advertising provisions of the Lan-
ham Act. The Fifth Circuit recently highlighted the difficulties in sep-
arating commercial from non-commercial speech, holding that the
dissemination of an article as part of a company’s marketing cam-
paign is in fact commercial speech. Eastman Chemical Co. v. PlastiPure, Eastman Chemical: .
Inc.
Each of Uber’s statements was issued by its corporate spokesper-
son or on Uber’s own official website as part of a concerted campaign
by the company in response to incidents that had been publicized in
the media. Three of the statements quoted in the media were made
by Uber’s Head of Communications for North America. Two more
were by other corporate representatives: Uber’s Senior Communica-
tions Associate and Uber’s Public Policy representative. One state-
ment was published on Uber’s own website, and then quoted in the
media.
Because Uber’s statements as a whole are issued with the in-
tent to influence consumer opinion, they thereby become commer-
cial speech even though they were contained in news media. In the
modern age of hybrid advertising and advertising in social media,
Courts must remain vigilant in order to separate commercial from
non-commercial speech, regardless of the form in which it was dis-
628 CHAPTER 7. ADVERTISING
seminated. The comments issued by Uber’s communication execu-
tives demonstrate a careful, uniform, and orchestrated message de-
signed to encourage and facilitate the commercial use of its product
and service. Thus, the Court finds that the disputed statements con-
tained in media articles are commercial speech, and are potentially
actionable under the Lanham Act.
Procter & Gamble Co. v. Haugen
222 F.3d 1262 (10th Cir. 2000)
[Randy Haugen, an Amway distributor, distributed a voice message
to other distributors saying
I wanna run something by you real quick that I think you
will find pre y interesting. Just talking to a guy the other
night about this very subject and it just so happens that
a guy brings information in and lays it on my desk this
morning, so here it goes.
It says the president of Procter & Gamble appeared on
the Phil Donahue Show on March 1, ’95. He announced
that due to the openness of our society, he was coming out
of the closet about his association with the church of satan.
He stated that a large portion of the profits from [P&G]
products go to support his satanic church. When asked
by Donahue if stating this on television would hurt his
business, his reply was, ”There are not enough Christians
in the United States to make a difference.” And below it
has a list of the [P&G] products which I’ll read: [the subject
message then lists 43 P&G products].
It says if you are not sure about a product, look for the
The allegedly Satanic P&G logo symbol of the ram’s horn that will appear on each prod-
uct beginning in April. The ram’s horn will form the 666
which is known as satan’s number. I’ll tell you it really
makes you count your blessings to have available to all of
us a business that allows us to buy all the products that we
want from our own shelf and I guess my real question is, if
people aren’t being loyal to themselves and buying from
their own business, then whose business are they support-
ing and who are they buying from. Love you. Talk to you
later. Bye.
Needless to say, the claims about P&G were entirely false.]
The district court granted defendants-appellees’ motion for sum-
mary judgment on P&G’s Lanham Act claim because it found the sub-
ject message, although ”identif[ying] . . . [P&G] products,” did not
”contain false representations about the qualities or characteristics of
those products,” and so did ”not relate to a product within the mean-
ing of the Lanham Act.” We agree with the district court that the sub-
A. FALSE ADVERTISING 629
ject message did not implicate the nature, characteristics, or qualities
of P&G’s products because it impugned no feature of the products
themselves, such as price, regulatory approval, scope of copyright,
or substitutability for another product.
However, in addition to challenging on appeal the district court’s
conclusion that there was no genuine issue as to misrepresentation
of the qualities or characteristics of its goods or services, P&G argues
that the district court erred in granting summary judgment because
the subject message’s representations regarding the infernal affilia-
tion of P&G and the use of its profits misrepresented ”the nature,
characteristics, [or] qualities . . . of . . . [its] commercial activities.”
The subject message linking P&G to Beelzebub clearly concerned
the ”nature, characteristics, [or] qualities . . . of . . . [P&G’s] commer-
cial activities,” under the plain meaning of that phrase. In particular,
the subject message asserted that ”a large portion of the profits from
[P&G] products go to support [the church of Satan].” Given the com-
mon association of Satan and immorality, a direct affiliation with the
church of Satan could certainly undermine a corporation’s reputation
and goodwill by suggesting the corporation conducts its commercial
activities in an unethical or immoral manner. There can be li le doubt
that products are often marketed and purchased not only on the ba-
sis of their inherent utility, but also for the images they project and
the values they promote. In that regard, the subject message itself
implies that recipients should question the values promoted by the
businesses from whom they purchase goods. In light of the forego-
ing reality of the marketplace, corporations cultivate their images and
values through a wide array of activities, including celebrity endorse-
ments, sponsorships, and charitable giving. Allegations that P&G
tithes the church of Satan concern just such commercial activities.
3 "Infringement": Falsity and Materiality
With no specific information as such to protect, false advertising law
lacks a similarity test. Instead, because it protects the truth, it asks
whether the challenged statements are false, and if so, whether the
lies are ones that are material to consumers.
Pizza Hut, Inc. v. Papa John’s Intern., Inc.
227 F.3d 489 (5th Cir. 2000)
This appeal presents a false advertising claim under section 43(a) of
the Lanham Act, resulting in a jury verdict for the plaintiff, Pizza Hut.
At the center of this appeal is Papa John’s four word slogan “Be er
Ingredients. Be er Pizza.”
The appellant, Papa John’s International Inc. (“Papa John’s”), ar-
gues that the slogan “cannot and does not violate the Lanham Act”
because it is “not a misrepresentation of fact.” The appellee, Pizza
630 CHAPTER 7. ADVERTISING
Hut, Inc., argues that the slogan, when viewed in the context of Papa
John’s overall advertising campaign, conveys a false statement of fact
actionable under section 43(a) of the Lanham Act. The district court,
after evaluating the jury’s responses to a series of special interrogato-
ries and denying Papa John’s motion for judgment as a ma er of law,
entered judgment for Pizza Hut stating:
When the “Be er Ingredients. Be er Pizza.” slogan is
considered in light of the entirety of Papa John’s post-May
1997 advertising which violated provisions of the Lanham
Act and in the context in which it was juxtaposed with the
false and misleading statements contained in Papa John’s
print and broadcast media advertising, the slogan itself
became tainted to the extent that its continued use should
be enjoined.
We conclude that (1) the slogan, standing alone, is not an objectifiable
statement of fact upon which consumers would be justified in relying,
and thus not actionable under section 43(a); and (2) while the slogan,
when utilized in connection with some of the post-May 1997 com-
parative advertising—specifically, the sauce and dough campaigns—
conveyed objectifiable and misleading facts, Pizza Hut has failed to
adduce any evidence demonstrating that the facts conveyed by the
slogan were material to the purchasing decisions of the consumers to
which the slogan was directed. Thus, the district court erred in deny-
ing Papa John’s motion for judgment as a ma er of law. We therefore
reverse the judgment of the district court denying Papa John’s mo-
tion for judgment as a ma er of law, vacate its final judgment, and
remand the case to the district court for entry of judgment for Papa
John’s.
I
A
Pizza Hut is a wholly owned subsidiary of Tricon Global Restaurants.
With over 7000 restaurants (both company and franchisee-owned),
Pizza Hut is the largest pizza chain in the United States. In 1984,
John Schna er founded Papa John’s Pizza in the back of his father’s
tavern. Papa John’s has grown to over 2050 locations, making it the
third largest pizza chain in the United States.
In May 1995, Papa John’s adopted a new slogan: “Be er Ingredi-
ents. Be er Pizza.” In 1996, Papa John’s filed for a federal trademark
registration for this slogan with the United States Patent & Trade-
mark Office (“PTO”). Its application for registration was ultimately
granted by the PTO. Since 1995, Papa John’s has invested over $300
million building customer goodwill in its trademark “Be er Ingredi-
A. FALSE ADVERTISING 631
ents. Be er Pizza.” The slogan has appeared on millions of signs,
shirts, menus, pizza boxes, napkins and other items, and has regu-
larly appeared as the “tag line” at the end of Papa John’s radio and
television ads, or with the company logo in printed advertising.
On May 1, 1997, Pizza Hut launched its “Totally New Pizza” cam-
paign. This campaign was the culmination of “Operation Lightning
Bolt,” a nine-month, $50 million project in which Pizza Hut declared
“war” on poor quality pizza. From the deck of a World War II air-
craft carrier, Pizza Hut’s president, David Novak, declared “war” on
“skimpy, low quality pizza.” National ads aired during this cam-
paign touted the “be er taste” of Pizza Hut’s pizza, and “dared” any-
one to find a “be er pizza.”
In early May 1997, Papa John’s launched its first national ad cam-
paign. The campaign was directed towards Pizza Hut, and its “To-
tally New Pizza” campaign. In a pair of TV ads featuring Pizza
Hut’s co-founder Frank Carney, Carney touted the superiority of
Papa John’s pizza over Pizza Hut’s pizza. Although Carney had left
the pizza business in the 1980’s, he returned as a franchisee of Papa
John’s because he liked the taste of Papa John’s pizza be er than any
other pizza on the market. The ad campaign was remarkably success-
ful. During May 1997, Papa John’s sales increased 11.7 percent over
May 1996 sales, while Pizza Hut’s sales were down 8 percent.
On the heels of the success of the Carney ads, in February 1998,
Papa John’s launched a second series of ads touting the results of a
taste test in which consumers were asked to compare Papa John’s and
Pizza Hut’s pizzas. In the ads, Papa John’s boasted that it “won big
time” in taste tests. The ads were a response to Pizza Hut’s “dare” to
find a “be er pizza.” The taste test showed that consumers preferred
Papa John’s traditional crust pizzas over Pizza Hut’s comparable piz-
zas by a 16-point margin (58% to 42%). Additionally, consumers pre-
ferred Papa John’s thin crust pizzas by a fourteen-point margin (57%
to 43%).
Following the taste test ads, Papa John’s ran a series of ads compar-
ing specific ingredients used in its pizzas with those used by its “com-
petitors.” During the course of these ads, Papa John’s touted the su-
periority of its sauce and its dough. During the sauce campaign, Papa
John’s asserted that its sauce was made from “fresh, vine-ripened
tomatoes,” which were canned through a process called “fresh pack,”
while its competitors—including Pizza Hut—make their sauce from
remanufactured tomato paste. During the dough campaign, Papa
John’s stated that it used “clear filtered water” to make its pizza
dough, while the “biggest chain” uses “whatever comes out of the
tap.” Additionally, Papa John’s asserted that it gives its yeast “sev-
eral days to work its magic,” while “some folks” use “frozen dough
or dough made the same day.” At or near the close of each of these
632 CHAPTER 7. ADVERTISING
ads, Papa John’s punctuated its ingredient comparisons with the slo-
gan “Be er Ingredients. Be er Pizza.”
Pizza Hut does not appear to contest the truthfulness of the un-
derlying factual assertions made by Papa John’s in the course of these
ads. Pizza Hut argues, however, that its own independent taste tests
and other “scientific evidence” establishes that filtered water makes
"Better Ingredients. Better Pizza" ad no difference in pizza dough, that there is no “taste” difference be-
tween Papa John’s “fresh-pack” sauce and Pizza Hut’s “remanufac-
tured” sauce, and that fresh dough is not superior to frozen dough.
In response to Pizza Hut’s “scientific evidence,” Papa John’s asserts
that “each of these ‘claims’ involves a ma er of common sense choice
(fresh versus frozen, canned vegetables and fruit versus remanufac-
tured paste, and filtered versus unfiltered water) about which indi-
vidual consumers can and do form preferences every day without
‘scientific’ or ‘expert’ assistance.”
In November 1997, Pizza Hut filed a complaint regarding Papa
John’s “Be er Ingredients. Be er Pizza.” advertising campaign with
the National Advertising Division of the Be er Business Bureau, an
industry self-regulatory body. This complaint, however, did not pro-
duce satisfactory results for Pizza Hut.
B
On August 12, 1998, Pizza Hut filed a civil action in the United States
District Court for the Northern District of Texas charging Papa John’s
with false advertising in violation of Section 43(a)(1)(B) of the Lanham
Act. The suit sought relief based on the above-described TV ad cam-
paigns, as well as on some 249 print ads. On March 10, 1999, Pizza
Hut filed an amended complaint. Papa John’s answered the com-
plaints by denying that its advertising and slogan violated the Lan-
ham Act. Additionally, Papa John’s asserted a counterclaim, charg-
ing Pizza Hut with engaging in false advertising. The parties con-
sented to a jury trial before a United States magistrate judge. The par-
ties further agreed that the liability issues were to be decided by the
jury, while the equitable injunction claim and damages award were
within the province of the court.
The trial began on October 26, 1999, and continued for over three
weeks. At the close of Pizza Hut’s case, and at the close of all evi-
dence, Papa John’s moved for a judgment as a ma er of law. The
motions were denied each time. The district court, without objection,
submi ed the liability issue to the jury through special interrogato-
ries. The special issues submi ed to the jury related to (1) the slogan
and (2) over Papa John’s objection, certain classes of groups of adver-
tisements referred to as “sauce claims,” “dough claims,” “taste test
claims,” and “ingredients claims.”
A. FALSE ADVERTISING 633
On November 17, 1999, the jury returned its responses to the spe-
cial issues finding that Papa John’s slogan, and its “sauce claims” and
“dough claims” were false or misleading and deceptive or likely to
deceive consumers. The jury also determined that Papa John’s “taste
test” ads were not deceptive or likely to deceive consumers, and that
Papa John’s “ingredients claims” were not false or misleading. As to
Papa John’s counterclaims against Pizza Hut, the jury found that two
of the three Pizza Hut television ads at issue were false or misleading
and deceptive or likely to deceive consumers.
On January 3, 2000, the trial court, based upon the jury’s verdict
and the evidence presented by the parties in support of injunctive re-
lief and on the issue of damages, entered a Final Judgment and issued
a Memorandum Opinion and Order. The court concluded that the
“Be er Ingredients. Be er Pizza.” slogan was “consistent with the le-
gal definition of non-actionable puffery” from its introduction in 1995
until May 1997. However, the slogan “became tainted . . . in light of
the entirety of Papa John’s post-May 1997 advertising.” Based on this
conclusion, the magistrate judge permanently enjoined Papa John’s
from “using any slogan in the future that constitutes a recognizable
variation of the phrase ‘Be er Ingredients. Be er Pizza.’ or which
uses the adjective ‘Be er’ to modify the terms ‘ingredients’ and/or
‘pizza’.” Additionally, the court enjoined Papa John’s from identify-
ing Frank Carney as a co-founder of Pizza Hut, “unless such advertis-
ing includes a voice-over, printed statement or a superimposed mes-
sage which states that Frank Carney has not been affiliated with Pizza
Hut since 1980,” and enjoined the dissemination of any advertising
that was produced or disseminated prior to the date of this judgment
and that explicitly or implicitly states or suggested that “Papa John’s
component is superior to the same component of Pizza Hut’s pizzas.”
Finally, the court enjoined Papa John’s from “explicitly or implicitly
claim[ing] that a component of Papa John’s pizza is superior to the
same component of Pizza Hut’s unless the superiority claim is sup-
ported by either (1) scientifically demonstrated a ributes of superi-
ority or (2) taste test surveys.” Additionally, the injunction required
that if the claim is supported by taste test surveys, the advertising
shall include a printed statement, voice-over or “super,” whichever
is appropriate, stating the localities where the tests were conducted,
the inclusive dates on which the surveys were performed, and the spe-
cific pizza products that were tested. The court also awarded Pizza
Hut $467,619.75 in damages for having to run corrective ads.
III
A
634 CHAPTER 7. ADVERTISING
A prima facie case of false advertising under section 43(a) requires
the plaintiff to establish:
(1) A false or misleading statement of fact about a product;
(2) Such statement either deceived, or had the capacity to deceive
a substantial segment of potential consumers;
(3) The deception is material, in that it is likely to influence the con-
sumer’s purchasing decision;
(4) The product is in interstate commerce; and
(5) The plaintiff has been or is likely to be injured as a result of the
statement at issue.
The failure to prove the existence of any element of the prima facie
case is fatal to the plaintiff’s claim.
B
The law governing false advertising claims under section 43(a) of the
Lanham Act is well se led. In order to obtain monetary damages or
equitable relief in the form of an injunction, a plaintiff must demon-
strate that the commercial advertisement or promotion is either liter-
ally false, or that if the advertisement is not literally false it is likely to
mislead and confuse consumers. If the statement is shown to be mis-
leading, the plaintiff must also introduce evidence of the statement’s
"Although factfinders usually base lit- impact on consumers, referred to as materiality.
eral falsity determinations upon the
explicit claims made by an advertise- (1)
ment, they may also consider any
claims the advertisement conveys by (a)
necessary implication. A claim is con-
veyed by necessary implication when, Essential to any claim under section 43(a) of the Lanham Act is a
considering the advertisement in its determination of whether the challenged statement is one of fact –
entirety, the audience would recog- actionable under section 43(a) – or one of general opinion – not ac-
nize the claim as readily as if it had tionable under section 43(a). Bald assertions of superiority or gen-
been explicitly stated. For instance,
eral statements of opinion cannot form the basis of Lanham Act li-
a factfinder found that an advertise-
ment that claimed a motor oil provided ability. Rather the statements at issue must be a specific and mea-
"longer engine life and better engine surable claim, capable of being proved false or of being reasonably
protection" without explicitly mention- interpreted as a statement of objective fact. A statement of fact is one
ing competitors nonetheless drew a that (1) admits of being adjudged true or false in a way that (2) admits
comparison by necessary implication
vis a vis those competitors." Clorox Co.
of empirical verification.
P.R. v. Procter & Gamble Commercial (b)
Co.228 F.3d 24 (1st Cir. 2000)
One form of non-actionable statements of general opinion under
section 43(a) of the Lanham Act has been referred to as “puffery.”
Puffery has been discussed at some length by other circuits. The
Third Circuit has described “puffing” as “advertising that is not de-
ceptive for no one would rely on its exaggerated claims.” Similarly,
the Ninth Circuit has defined “puffing” as “exaggerated advertising,
A. FALSE ADVERTISING 635
blustering and boasting upon which no reasonable buyer would rely
and is not actionable under 43(a).”
These definitions of puffery are consistent with the definitions
provided by the leading commentaries in trademark law. A leading
authority on unfair competition has defined “puffery” as an “exag-
gerated advertising, blustering, and boasting upon which no reason-
able buyer would rely,” or “a general claim of superiority over a com-
parative product that is so vague, it would be understood as a mere
expression of opinion.” McCarthy7 Similarly, Prosser and Keeton on
Torts defines “puffing” as “a seller’s privilege to lie his head off, so
long as he says nothing specific, on the theory that no reasonable man
would believe him, or that no reasonable man would be influenced
by such talk.”
Drawing guidance from the writings of our sister circuits and the
leading commentators, we think that non-actionable “puffery” comes
in at least two possible forms: (1) an exaggerated, blustering, and
boasting statement upon which no reasonable buyer would be justi-
fied in relying; or (2) a general claim of superiority over comparable
products that is so vague that it can be understood as nothing more
than a mere expression of opinion.
(2)
(a)
With respect to materiality, when the statements of fact at issue are
shown to be literally false, the plaintiff need not introduce evidence
on the issue of the impact the statements had on consumers. In such a
circumstance, the court will assume that the statements actually mis-
led consumers. On the other hand, if the statements at issue are ei-
ther ambiguous or true but misleading, the plaintiff must present ev-
idence of actual deception. The plaintiff may not rely on the judge or
the jury to determine, based solely upon their own intuitive reactions,
whether the advertisement is deceptive. Instead, proof of actual de-
ception requires proof that consumers were actually deceived by the
defendant’s ambiguous or true-but-misleading statements.
IV
We turn now to consider the case before us. Reduced to its essence,
the question is whether the evidence, viewed in the most favorable
light to Pizza Hut, established that Papa John’s slogan “Be er Ingre-
dients. Be er Pizza.” is misleading and violative of section 43(a) of
the Lanham Act. In making this determination, we will first consider
7
McCarthy on Trademarks goes on to state: “Vague advertising claims that
one’s product is ‘be er’ than that of competitors’ can be dismissed as mere puff-
ing that is not actionable as false advertising.”
636 CHAPTER 7. ADVERTISING
the slogan “Be er Ingredients. Be er Pizza.” standing alone to de-
termine if it is a statement of fact capable of deceiving a substantial
segment of the consuming public to which it was directed. Second,
we will determine whether the evidence supports the district court’s
conclusion that after May 1997, the slogan was tainted, and therefore
actionable, as a result of its use in a series of ads comparing specific in-
gredients used by Papa John’s with the ingredients used by its “com-
petitors.”
A
The jury concluded that the slogan itself was a “false or misleading”
statement of fact, and the district court enjoined its further use. Papa
John’s argues, however, that this statement “quite simply is not a
statement of fact, [but] rather, a statement of belief or opinion, and an
argumentative one at that.” Papa John’s asserts that because “a state-
ment of fact is either true or false, it is susceptible to being proved
or disproved. A statement of opinion or belief, on the other hand,
conveys the speaker’s state of mind, and even though it may be used
to a empt to persuade the listener, it is a subjective communication
that may be accepted or rejected, but not proven true or false.” Papa
John’s contends that its slogan “Be er Ingredients. Be er Pizza.”
falls into the la er category, and because the phrases “be er ingre-
dients” and “be er pizza” are not subject to quantifiable measures,
the slogan is non-actionable puffery.
We will therefore consider whether the slogan standing alone con-
stitutes a statement of fact under the Lanham Act. Bisecting the slo-
gan “Be er Ingredients. Be er Pizza.,” it is clear that the assertion
by Papa John’s that it makes a “Be er Pizza.” is a general state-
ment of opinion regarding the superiority of its product over all oth-
ers. This simple statement, “Be er Pizza.,” epitomizes the exagger-
ated advertising, blustering, and boasting by a manufacturer upon
Boston Beer Co.: 198 F.3d 1370 (Fed. Cir. which no consumer would reasonably rely. See, e.g., In re Boston
1999) Beer Co. (stating that the phrase “The Best Beer in America” was
“trade puffery” and that such a general claim of superiority “should
be freely available to all competitors in any given field to refer to their
3D0: 1994 WL 723601 (N.D.Cal. 1994) products or services”); Atari Corp. v. 3D0 Co. (stating that a manufac-
turer’s slogan that its product was “the most advanced home gaming
Nikkal: 735 F. Supp. 1227 (S.D.N.Y. 1990) system in the universe” was non-actionable puffery); Nikkal Indus.,
Ltd. v. Salton, Inc. (stating that a manufacturers claim that its ice
cream maker was “be er” than competition ice cream makers is non-
actionable puffery). Consequently, it appears indisputable that Papa
John’s assertion “Be er Pizza.” is non-actionable puffery.8
8
It should be noted that Pizza Hut uses the slogan “The Best Pizza Under One
Roof.” Similarly, other nationwide pizza chains employ slogans touting their pizza
A. FALSE ADVERTISING 637
Moving next to consider separately the phrase “Be er Ingredi-
ents.,” the same conclusion holds true. Like “Be er Pizza.,” it is typi-
cal puffery. The word “be er,” when used in this context is unquan-
tifiable. What makes one food ingredient “be er” than another com-
parable ingredient, without further description, is wholly a ma er
of individual taste or preference not subject to scientific quantifica-
tion. Indeed, it is difficult to think of any product, or any component
of any product, to which the term “be er,” without more, is quan-
tifiable. As our court stated in e Presidio Enterprises, Inc. v. Warner Presidio: 784 F.2d 674 (5th Cir. 1986)
Brothers Distribution Corp.:
The law recognizes that a vendor is allowed some latitude
in claiming merits of his wares by way of an opinion rather
than an absolute guarantee, so long as he hews to the
line of rectitude in ma ers of fact. Opinions are not only
the lifestyle of democracy, they are the brag in advertis-
ing that has made for the wide dissemination of products
that otherwise would never have reached the households
of our citizens. If we were to accept the thesis set forth
by the appellees, [that all statements by advertisers were
statements of fact actionable under the Lanham Act,] the
advertising industry would have to be liquidated in short
order.
Thus, it is equally clear that Papa John’s assertion that it uses “Be er
Ingredients.” is one of opinion not actionable under the Lanham Act.
Finally, turning to the combination of the two non-actionable
phrases as the slogan “Be er Ingredients. Be er Pizza.,” we fail to see
how the mere joining of these two statements of opinion could create
an actionable statement of fact. Each half of the slogan amounts to lit-
tle more than an exaggerated opinion of superiority that no consumer
would be justified in relying upon. It has not been explained convinc-
ingly to us how the combination of the two phrases, without more,
changes the essential nature of each phrase so as to make it action-
able. We assume that “Be er Ingredients.” modifies “Be er Pizza.”
and consequently gives some expanded meaning to the phrase “Bet-
ter Pizza,” i.e., our pizza is be er because our ingredients are be er.
Nevertheless, the phrase fails to give “Be er Pizza.” any more quan-
tifiable meaning. Stated differently, the adjective that continues to
describe “pizza” is “be er,” a term that remains unquantifiable, es-
pecially when applied to the sense of taste. Consequently, the slogan
as a whole is a statement of non-actionable opinion. Thus, there is no
as the “best”: (1) Domino’s Pizza uses the slogan “Nobody Delivers Be er.”; (2)
Danato’s uses the slogan “Best Pizza on the Block.”; (3) Mr. Ga i’s uses the slogan
“Best Pizza in Town: Honest!”; and (4) Pizza Inn uses the slogans “Best Pizza Ever.”
and “The Best Tasting Pizza.”
638 CHAPTER 7. ADVERTISING
legally sufficient basis to support the jury’s finding that the slogan
standing alone is a “false or misleading” statement of fact.
B
We next will consider whether the use of the slogan “Be er Ingre-
dients. Be er Pizza.” in connection with a series of comparative ads
found by the jury to be misleading – specifically, ads comparing Papa
John’s sauce and dough with the sauce and dough of its competitors
– ”tainted” the statement of opinion and made it misleading under
section 43(a) of the Lanham Act. Before reaching the ultimate ques-
tion of whether the slogan is actionable under the Lanham Act, we
will first examine the sufficiency of the evidence supporting the jury’s
conclusion that the comparison ads were misleading.
(1)
After the jury returned its verdict, Papa John’s filed a post-verdict mo-
tion under Federal Rule of Civil Procedure 50 for a judgment as a mat-
ter of law. In denying Papa John’s motion, the district court, while
apparently recognizing that the slogan “Be er Ingredients. Be er
Pizza.” standing alone is non-actionable puffery under the Lanham
Act, concluded that after May 1997, the slogan was transformed as a
result of its use in connection with a series of ads that the jury found
misleading. These ads had compared specific ingredients used by
Papa John’s with the ingredients used by its competitors. In essence,
the district court held that the comparison ads in which the slogan
appeared as the tag line gave objective, quantifiable, and fact-specific
meaning to the slogan. Consequently, the court concluded that the
slogan was misleading and actionable under section 43(a) of the Lan-
ham Act and enjoined its further use.
(2)
We are obligated to accept the findings of the jury unless the facts
point so overwhelmingly in favor of one party that no reasonable per-
son could arrive at a different conclusion. In examining the record
evidence, we must view it the way that is most favorable to uphold-
ing the verdict. Viewed in this light, it is clear that there is sufficient
evidence to support the jury’s conclusion that the sauce and dough
ads were misleading statements of fact actionable under the Lanham
Act.
Turning first to the sauce ads, the evidence establishes that de-
spite the differences in the methods used to produce their competing
sauces: (1) the primary ingredient in both Pizza Hut and Papa John’s
sauce is vine-ripened tomatoes; (2) at the point that the competing
sauces are placed on the pizza, just prior to pu ing the pies into the
oven for cooking, the consistency and water content of the sauces are
A. FALSE ADVERTISING 639
essentially identical; and (3) as noted by the district court, at no time
“prior to the close of the liability phase of trial was any credible ev-
idence presented [by Papa John’s] to demonstrate the existence of
demonstrable differences” in the competing sauces. Consequently,
the district court was correct in concluding that: “Without any sci-
entific support or properly conducted taste preference test, by the
wri en and/or oral negative connotations conveyed that pizza made
from tomato paste concentrate is inferior to the ‘fresh pack’ method
used by Papa John’s, its sauce advertisements conveyed an impres-
sion which is misleading. . . .” Turning our focus to the dough
ads, while the evidence clearly established that Papa John’s and Pizza
Hut employ different methods in making their pizza dough, again,
the evidence established that there is no quantifiable difference be-
tween pizza dough produced through the “cold or slow-fermentation
method” (used by Papa John’s), or the “frozen dough method” (used
by Pizza Hut).10 Further, although there is some evidence indicating
that the texture of the dough used by Papa John’s and Pizza Hut is
slightly different, this difference is not related to the manufacturing
process used to produce the dough. Instead, it is due to a difference
in the wheat used to make the dough. Finally, with respect to the dif-
ferences in the pizza dough resulting from the use of filtered water
as opposed to tap water, the evidence was sufficient for the jury to
conclude that there is no quantifiable difference between dough pro-
duced with tap water, as opposed to dough produced with filtered
water.
We should note again that Pizza Hut does not contest the truthful-
ness of the underlying factual assertions made by Papa John’s in the
course of the sauce and dough ads. Pizza Hut concedes that it uses
“remanufactured” tomato sauce to make its pizza sauce, while Papa
John’s uses “fresh-pack.” Further, in regard to the dough, Pizza Hut
concedes the truth of the assertion that it uses tap water in making its
pizza dough, which is often frozen, while Papa John’s uses filtered
water to make its dough, which is fresh – never frozen. Consequently,
because Pizza Hut does not contest the factual basis of Papa John’s fac-
tual assertions, such assertions cannot be found to be factually false,
but only impliedly false or misleading.
Thus, we conclude by saying that although the ads were true
about the ingredients Papa John’s used, it is clear that there was suffi-
cient evidence in the record to support the jury’s conclusion that Papa
John’s sauce and dough ads were misleading – but not false – in their
suggestion that Papa John’s ingredients were superior.
10
The testimony of Pizza Hut’s expert, Dr. Faubion, established that although
consumers stated a preference for fresh dough rather than frozen dough, when
taste tests were conducted, respondents were unable to distinguish between pizza
made on fresh as opposed to frozen dough.
640 CHAPTER 7. ADVERTISING
(3)
Thus, having concluded that the record supports a finding that the
sauce and dough ads are misleading statements of fact, we must now
determine whether the district court was correct in concluding that
the use of the slogan “Be er Ingredients. Be er Pizza.” in conjunc-
tion with these misleading ads gave quantifiable meaning to the slo-
gan making a general statement of opinion misleading within the
meaning of the Lanham Act.
In support of the district court’s conclusion that the slogan was
transformed, Pizza Hut argues that “in construing any advertising
statement, the statement must be considered in the overall context
in which it appears.” Building on the foundation of this basic legal
principle, Pizza Hut argues that “[t]he context in which Papa John’s
slogan must be viewed is the 2½ year campaign during which its ad-
vertising served as ‘chapters’ to demonstrate the truth of the ‘Be er
Ingredients. Be er Pizza.’ book.” Pizza Hut argues, that because
Papa John’s gave consumers specific facts supporting its assertion
that its sauce and dough are “be er” – specific facts that the evidence,
when viewed in the light most favorable to the verdict, are irrelevant
in making a be er pizza – Papa John’s statement of opinion that it
made a “Be er Pizza” became misleading. In essence, Pizza Hut ar-
gues, that by using the slogan “Be er Ingredients. Be er Pizza.” in
combination with the ads comparing Papa John’s sauce and dough
with the sauce and dough of its competitions, Papa John’s gave quan-
tifiable meaning to the word “Be er” rendering it actionable under
section 43(a) of the Lanham Act.
We agree that the message communicated by the slogan “Be er
Ingredients. Be er Pizza.” is expanded and given additional mean-
ing when it is used as the tag line in the misleading sauce and dough
ads. The slogan, when used in combination with the comparison
ads, gives consumers two fact-specific reasons why Papa John’s in-
gredients are “be er.” Consequently, a reasonable consumer would
understand the slogan, when considered in the context of the com-
parison ads, as conveying the following message: Papa John’s uses
“be er ingredients,” which produces a “be er pizza” because Papa
John’s uses “fresh-pack” tomatoes, fresh dough, and filtered water.
In short, Papa John’s has given definition to the word “be er.” Thus,
when the slogan is used in this context, it is no longer mere opinion,
but rather takes on the characteristics of a statement of fact. When
used in the context of the sauce and dough ads, the slogan is mislead-
ing for the same reasons we have earlier discussed in connection with
the sauce and dough ads.
(4)
A. FALSE ADVERTISING 641
Concluding that when the slogan was used as the tag line in the
sauce and dough ads it became misleading, we must now determine
whether reasonable consumers would have a tendency to rely on this
misleading statement of fact in making their purchasing decisions.
We conclude that Pizza Hut has failed to adduce evidence establish-
ing that the misleading statement of fact conveyed by the ads and
the slogan was material to the consumers to which the slogan was
directed. Consequently, because such evidence of materiality is nec-
essary to establish liability under the Lanham Act, the district court
erred in denying Papa John’s motion for judgment as a ma er of law.
As previously discussed, none of the underlying facts supporting
Papa John’s claims of ingredient superiority made in connection with
the slogan were literally false. Consequently, in order to satisfy its
prima facie case, Pizza Hut was required to submit evidence estab-
lishing that the impliedly false or misleading statements were mate-
rial to, that is, they had a tendency to influence the purchasing deci-
sions of, the consumers to which they were directed.13 We conclude
that the evidence proffered by Pizza Hut fails to make an adequate
showing.
In its appellate brief and during the course of oral argument, Pizza
Hut directs our a ention to three items of evidence in the record that
it asserts establishes materiality to consumers. First, Pizza Hut points
to the results of a survey conducted by an “independent expert” (Dr.
Dupont) regarding the use of the slogan “Be er Ingredients. Be er
Pizza.” as wri en on Papa John’s pizza box (the box survey). The re-
sults of the box survey, however, were excluded by the district court.
Consequently, these survey results provide no basis for the jury’s
finding.
Second, Pizza Hut points to two additional surveys conducted
13
In Johnson & Johnson v. Smithkline Beecham Corp., 960 F.2d 294 (2d Cir. 1992),
the Second Circuit discussed this requirement in some detail:
Where, as here, a plaintiff’s theory of recovery is premised upon a
claim of implied falsehood, a plaintiff must demonstrate, by extrinsic
evidence, that the challenged commercials tend to mislead or confuse
consumers. It is not for the judge to determine, based solely upon his
or her own intuitive reaction whether the advertisement is deceptive.
Rather, as we have reiterated in the past, “the question in such cases
is – what does the person to whom the advertisement is addressed
find to be the message?” That is, what does the public perceive the
message to be.
The answer to this question is pivotal because, where the advertise-
ment is literally true, it is often the only measure by which a court can
determine whether a commercial’s net communicative effect is mis-
leading. Thus, the success of a plaintiff’s implied falsity claim usually
turns on the persuasiveness of a consumer survey.
Id. at 287-98.
642 CHAPTER 7. ADVERTISING
by Dr. Dupont that a empted to measure consumer perception of
Papa John’s “taste test” ads. This survey evidence, however, fails to
address Pizza Hut’s claim of materiality with respect to the slogan.
Moreover, the jury rejected Pizza Hut’s claims of deception with re-
gard to Papa John’s “taste test” ads – the very ads at issue in these
surveys.
Finally, Pizza Hut a empts to rely on Papa John’s own tracking
studies and on the alleged subjective intent of Papa John’s executives
“to create a perception that Papa John’s in fact uses be er ingredi-
ents” to demonstrate materiality. Although Papa John’s 1998 Aware-
ness, Usage & A itude Tracking Study showed that 48% of the re-
spondents believe that “Papa John’s has be er ingredients than other
national pizza chains,” the study failed to indicate whether the con-
clusions resulted from the advertisements at issue, or from personal
eating experiences, or from a combination of both. Consequently, the
results of this study are not reliable or probative to test whether the
slogan was material. Further, Pizza Hut provides no precedent, and
we are aware of none, that stands for the proposition that the subjec-
tive intent of the defendant’s corporate executives to convey a partic-
ular message is evidence of the fact that consumers in fact relied on
the message to make their purchases. Thus, this evidence does not
address the ultimate issue of materiality.
In short, Pizza Hut has failed to offer probative evidence on
whether the misleading facts conveyed by Papa John’s through its
slogan were material to consumers: that is to say, there is no evi-
dence demonstrating that the slogan had the tendency to deceive con-
sumers so as to affect their purchasing decisions. Thus, the district
court erred in denying Papa John’s motion for judgment as a ma er
of law.
V
In sum, we hold that the slogan “Be er Ingredients. Be er Pizza.”
standing alone is not an objectifiable statement of fact upon which
consumers would be justified in relying. Thus, it does not constitute
a false or misleading statement of fact actionable under section 43(a)
of the Lanham Act.
Additionally, while the slogan, when appearing in the context of
some of the post-May 1997 comparative advertising – specifically, the
sauce and dough campaigns – was given objectifiable meaning and
thus became misleading and actionable, Pizza Hut has failed to ad-
duce sufficient evidence establishing that the misleading facts con-
veyed by the slogan were material to the consumers to which it was
directed. Thus, Pizza Hut failed to produce evidence of a Lanham
Act violation.
A. FALSE ADVERTISING 643
McNeil-PPC, Inc. v. Pfizer Inc.
351 F. Supp. 2d 226 (S.D.N.Y. 2005)
In June 2004, defendant Pfizer Inc. (“Pfizer”) launched a con-
sumer advertising campaign for its mouthwash, Listerine Antiseptic
Mouthrinse. Print ads and hang tags featured an image of a Listerine
bo le balanced on a scale against a white container of dental floss.
The campaign also featured a television commercial called the
“Big Bang.” In its third version, which is still running, the commer-
cial announces that “Listerine’s as effective as floss at fighting plaque
and gingivitis. Clinical studies prove it.”
In this case, plaintiff McNeil-PPC, Inc. (“PPC”), the market leader
in sales of string dental floss and other interdental cleaning products,
alleges that Pfizer has engaged in false advertising in violation of §
43(a) of the Lanham Act and unfair competition in violation of state
law.
Before the Court is PPC’s motion for a preliminary injunction en-
joining Pfizer from continuing to make these claims in its advertise-
ments. Listerine ad
Pfizer sponsored two clinical studies involving Listerine and floss:
the “Sharma Study” and the “Bauroth Study.” These studies pur-
ported to compare the efficacy of Listerine against dental floss in con-
trolling plaque and gingivitis in subjects with mild to moderate gin-
givitis.
In proving an advertising claim literally false, a plaintiff bears a
different burden depending on whether the advertisement purports
to be based on test results. Hence, where a defendant’s advertisement
contends that “clinical tests” prove the superiority of its product (an
“establishment claim”), the plaintiff need only prove that the tests re-
ferred to were not sufficiently reliable to permit one to conclude with
reasonable certainty that they established the proposition for which
they were cited. On the other hand, where a superiority claim does
not purport to rest on test results, the plaintiff may prove falsity only
upon adducing evidence that affirmatively shows defendant’s claim
to be false.
Pfizer’s advertisements make the explicit claim that “clinical stud-
ies prove that Listerine is as effective as floss against plaque and gin-
givitis.” As Pfizer purports to rely on “clinical studies,” this is an “es-
tablishment claim” and PPC need only prove that the studies referred
to were not sufficiently reliable to permit one to conclude with rea-
sonable certainty that they established the proposition for which they
were cited. Two questions are presented: first, whether the Sharma
and Bauroth Studies stand for the proposition that “Listerine is as ef-
fective as floss against plaque and gingivitis”; and second, assuming
they do, whether the studies are sufficiently reliable to permit one to
draw that conclusion with “reasonable certainty.”
644 CHAPTER 7. ADVERTISING
First, even pu ing aside the issue of their reliability, the two stud-
ies do not stand for the proposition that “Listerine is as effective as
floss against plaque and gingivitis.” The two studies included in their
samples only individuals with mild to moderate gingivitis. They ex-
cluded individuals with severe gingivitis or with any degree of pe-
riodontitis, and they did not purport to draw any conclusions with
respect to these individuals. Hence, the literal claim in Pfizer’s ad-
vertisements is overly broad, for the studies did not purport to prove
that Listerine is as effective as floss “against plaque and gingivitis,”
but only against plaque and gingivitis in individuals with mild to
moderate gingivitis. The advertisements do not specify that the “as
effective as floss” claim is limited to individuals with mild to mod-
erate gingivitis. Consequently, consumers who suffer from severe
gingivitis or periodontitis (including mild periodontitis) may be mis-
led by the ads into believing that Listerine is just as effective as floss
in helping them fight plaque and gingivitis, when the studies simply
do not stand for that proposition.
Second, the two studies were not sufficiently reliable to permit
one to conclude with reasonable certainty that Listerine is as effec-
tive as floss in fighting plaque and gingivitis, even in individuals with
mild to moderate gingivitis. What the two studies showed was that
Listerine is as effective as floss when flossing is not done properly.
The authors of both studies recognized that the plaque reductions in
the flossing groups were lower than would be expected and hypoth-
esized that “behavioral or technical causes” were the reason. Signifi-
cantly, in some of the plaque reduction scores for the flossing groups
there was greater improvement at three months than at six months,
suggesting a deterioration in flossing technique with the passage of
time.
Hence, the studies did not “prove” that Listerine is “as effective
as floss.” Rather, they proved only that Listerine is “as effective as
improperly-used floss.” The studies showed only that Listerine is as
effective as floss when the flossing is not performed properly. As one
of the ADA consultants observed in objecting to the advertising when
it was proposed, “for a substitute product to be ‘as good as’ or ‘be er’
than flossing it must be compared against the data of subjects who
demonstrate they can and are flossing effectively.”
Pfizer and its experts argue that the two studies are reliable,
notwithstanding the indications that the participants in the flossing
group did not floss properly, because these conditions reflect “real-
world se ings.” But the ads do not say that “in the real world,” where
most people floss rarely or not at all and even those who do floss have
difficulty flossing properly, Listerine is “as effective as floss.” Rather,
the ads make the blanket assertion that Listerine works just as well
as floss, an assertion the two studies simply do not prove. Although
A. FALSE ADVERTISING 645
it is important to determine how a product works in the real world,
it is probably more important to first determine how a product will
work when it is used properly.
Accordingly, I hold that PPC is likely to succeed on its claim of
literal false advertisement.
Satellite TV Problem
This advertisement for DirecTV ran on the Internet; it was shown to
customers in markets served by Time Warner Cable. Some of Time
Warner’s channels are analog; others are digital HD. DirecTV offers
only digital HD channels. The parties agree that the HD channels are
equivalent in quality. They also agree that the pixelated portions of
the ads are not accurate depictions of cable TV signals, either digital
or analog. Is the advertisement actionable?
646 CHAPTER 7. ADVERTISING
4 Secondary Liability
There’s not a lot of caselaw on secondary liability for false advertising
– but there is some.
Duty Free Americas, Inc. v. Estee Lauder Companies, Inc.
797 F.3d 1248 (10th Cir. 2015)
[DFA operates duty free stores in airports. It previously sold Es-
tée Lauder cosmetics. DFA purchased those cosmetics at wholesale
prices that were lower than the wholesale prices charged to tradi-
tional retailers, such as department stores. As a result, it was able
to offer its customers lower retail prices. In 2007, Estée Lauder an-
nounced plans to eliminate the difference and move to a system with
a single suggested retail price. As a result, DFA ended its relation-
ship with Estée Lauder and devoted the shelf space to other prod-
ucts. Some of its competitors continued to sell Estée Lauder products
and announced this fact to airport authorities during the bidding pro-
cesses to operate duty-free concessions at airports in Newark, Boston,
Orlando, and Atlanta. They also allegedly made various false state-
ments about DFA. It sued Estée Lauder on a number of theories, in-
cluding contributory false advertising.]
Whether § 43(a) of the Lanham Act includes within its ambit a
claim for false advertising based on contributory liability is a question
of first impression.
The rationale for allowing contributory trademark infringement
actions supports recognizing a similar theory of liability in the false
advertising context. For starters, § 43(a) of the Lanham Act contains
two different classes of prohibitions: one banning trademark infringe-
ment and one prohibiting false advertising.
These prohibitions are found in the same statutory provision,
and they share the same introductory clause. The placement of the
two prohibitions in the same statutory section—and correspondingly,
the fact that the introductory language banning both practices is
identical—suggests the two causes of action should be interpreted
to have the same scope.
Moreover, while the two causes of action are derived from the
same principles and contained in the same statute, the Supreme
Court has recognized that the false advertising provision of the Lan-
ham Act entails broader protections. See POM Wonderful (“The Lan-
ham Act’s trademark provisions are the primary means of achiev-
ing [the statute’s] ends. But the Act also creates a federal remedy
[for false advertising] that goes beyond trademark protection. The
broader remedy is at issue here.”). It would be odd indeed for us to
narrow the scope of the false advertising provision—a cause of action
plainly intended to encompass a broader spectrum of protection—
and hold that it could be enforced only against a smaller class of de-
A. FALSE ADVERTISING 647
fendants. Absent congressional direction, we are reluctant to limit
the statute’s scope in this way. Thus, we hold that a plaintiff may
bring a claim for contributory false advertising under § 43(a) of the
Lanham Act.
What, then, must a plaintiff establish in order to state a contrib-
utory false advertising claim? First, the plaintiff must show that a
third party in fact directly engaged in false advertising that injured
the plaintiff. Second, the plaintiff must allege that the defendant con-
tributed to that conduct either by knowingly inducing or causing the
conduct, or by materially participating in it.
Once the plaintiff establishes the elements of a direct false adver-
tising claim against a third party, it must allege that the defendant
contributed to that conduct. This means that the plaintiff must allege
that the defendant had the necessary state of mind—in other words
that it intended to participate in or actually knew about the false ad-
vertising. The plaintiff must also allege that the defendant actively
and materially furthered the unlawful conduct – either by inducing
it, causing it, or in some other way working to bring it about.
Analogies from trademark infringement, in which contributory
liability is more developed, can be instructive. Thus, for example, a
plaintiff may be able to make out the participation prong of a con-
tributory false advertising claim by alleging that the defendant di-
rectly controlled or monitored the third party’s false advertising. It
is also conceivable that there could be circumstances under which
the provision of a necessary product or service, without which the
false advertising would not be possible, could support a theory of con-
tributory liability. In determining whether a plaintiff has adequately
alleged facts to support such a claim, we look to whether the com-
plaint suggests a plausible inference of knowing or intentional par-
ticipation, examining the nature and extent of the communication”
between the third party and the defendant regarding the false ad-
vertising; “whether or not the defendant explicitly or implicitly en-
couraged the false advertising; whether the false advertising is seri-
ous and widespread, making it more likely that the defendant knew
about and condoned the acts; and whether the defendant engaged in
bad faith refusal to exercise a clear contractual power to halt the false
advertising.
The district court identified four allegedly false claims in the com-
plaint, each of which was made by a duty free operator to represen-
tatives of an airport and each of which DFA says we should a ribute
to Estée Lauder. First, Nuance stated in a le er to Atlanta officials:
“Given that Estée Lauder brands account for 20% of cosmetic and fra-
grance sales, at least in Orlando, and cosmetic and fragrance sales
constitute one of the largest sources of revenue for duty free stores, a
lack of access to Estée Lauder brands would cast doubt on the validity
648 CHAPTER 7. ADVERTISING
of DFA’s projected revenue streams.” Second, Travel Retail told Or-
lando officials: “[W]e strongly believe that Estée Lauder is a product
which you have to sell, also, to domestic passengers.” Third, Nuance
said during the Orlando appeal hearing: “With respect to DFA, I’d
like to echo Travel Retail’s concerns on DFA’s rents. ... DFA sales
project[ions] are deemed to be unreasonable and not sustainable in
light of the history.” Finally, Travel Retail informed the Orlando Air-
port Authority: “[F]ailure to offer the Estée Lauder product line will
negatively impact duty free and duty paid sales revenue for both in-
ternational and domestic travelers.” DFA argues that it also alleged
that Nuance, in its le er protesting the Atlanta award, stated “DFA
may have made misrepresentations about its ability to carry Estée
Lauder brands,” and we agree that this is an allegedly false claim the
district court failed to consider.
As for the first element, Estée Lauder claims that the duty free op-
erators did not engage in any false advertising. Estée Lauder urges
us to hold that DFA’s complaint is devoid of any false or mislead-
ing statements cognizable under the Lanham Act, but we need not
answer this fact-intensive question. We agree that DFA did not ade-
quately allege Estée Lauder contributed to any of the statements, and
thus affirm the district court’s dismissal on this ground.
We are unable to find in DFA’s complaint any facts that would
enable the court to draw the reasonable inference that Estée Lauder
induced or knowingly or intentionally participated in any of the al-
legedly false statements made by the other duty free operators. In
its complaint, DFA based its claim for contributory liability on the
fact that “[Estée Lauder] knew or should have known of the False
Claims, but [it] continued to supply [Estée Lauder] product [s] to its
favored duty free operators.... In doing so, [Estée Lauder] provided
its favored duty free operators with the means to continue making
the False Claims....” We cannot see how the mere sale of Estée Lauder
products can serve as a basis for holding the manufacturer liable for
any disparaging statements its customers make in the course of their
own separate business relations. In our view, selling Estée Lauder
products is too unrelated to the making of the allegedly false or mis-
leading statements to form a basis for liability – under either an in-
ducement or participation theory.
Moreover, contrary to DFA’s argument, there are simply no facts
in the complaint that suggest the existence of coordinated action or
encouragement, much less inducement, between Estée Lauder and
the operators on the decision to make the disputed claims to airport
authorities. There has been no allegation that by selling its products
to the duty free operators, Estée Lauder monitored, controlled, or par-
ticipated in operators’ statements to airport authorities during a com-
petitive bidding process for which Estée Lauder was not even present.
B. ALTERNATIVES TO COMPETITOR SUITS 649
More generally, there are no facts to suggest that Estée Lauder com-
monly exercises any level of control over or involvement in the duty
free operators’ conduct during airport RFP bidding.
In short, although we agree with DFA that a plaintiff may state a
claim against a defendant for contributory false advertising, we are
unwilling to extend the doctrine as far as DFA urges. The mere sale of
products in the course of an ordinary business relationship, without
more, cannot justify a finding that a defendant induced, encouraged,
caused, procured, or brought about false advertising. Contributory
false advertising claims are cognizable under the Lanham Act, but a
plaintiff must allege more than an ordinary business relationship be-
tween the defendant and the direct false advertiser in order to plau-
sibly plead its claim. DFA has failed to do so here.
B Alternatives to Competitor Suits
Other models relax the Lanham Act standing rules in various ways.
The Lanham Act generally only allows competing businesses to sue
each other. But various speech torts permit businesses to sue for cer-
tain false statements by non-competitors. On the other side of the v,
consumers and government agencies can sue businesses for certain
false statements. In each case, the substantive rules of liability (espe-
cially the treatment of falsity) are tweaked to account for the different
party configurations.
1 Commercial Disparagement and Related Torts
An unruly bundle of common-law torts try to protect individuals and
businesses from injurious falsehoods. The following materials are not
meant to be representative of this sprawling and doctrinally intricate
mess, only to give another take on falsity and to illustrate the com-
plete absence of anything resembling the competitor- or purchaser-
in-reliance- standing requirements.
HipSaver, Inc. v. Kiel
464 Mass. 517 (2013)
An action for commercial disparagement is similar in many respects
to an action for defamation, but there are important differences. Both
torts seek to impose liability on a defendant for harm sustained by a
plaintiff as a result of the publication of a false statement about the
plaintiff to others. A defamation action, which encompasses libel and
slander, affords a remedy for damage to the reputation of the injured
party. By comparison, an action for commercial disparagement af-
fords a remedy for harm to the economic interests of the injured party
that results in pecuniary loss. A plaintiff asserting such a claim seeks
650 CHAPTER 7. ADVERTISING
to recover damages for false disparaging statements about the plain-
tiff’s property, often a product or service being sold.
This court adopted the language of the Restatement (Second)
of Torts § 623A, regarding liability for commercial disparagement:
”One who publishes a false statement harmful to the interests of an-
other is subject to liability for pecuniary loss resulting to the other
if (a) he intends for publication of the statement to result in harm to
the interests of the other having a pecuniary value, or either recog-
nizes or should recognize that it is likely to do so, and (b) he knows
that the statement is false or acts in reckless disregard of its truth or
falsity.” Thus, in order to prevail on a claim alleging commercial dis-
paragement, a plaintiff must prove that a defendant: (1) published a
false statement to a person other than the plaintiff; (2) ”of and con-
cerning” the plaintiff’s products or services; (3) with knowledge of
the statement’s falsity or with reckless disregard of its truth or falsity;
(4) where pecuniary harm to the plaintiff’s interests was intended or
foreseeable; and (5) such publication resulted in special damages in
the form of pecuniary loss.7
Aviation Charter, Inc. v. Aviation Research
416 F.3d 864 (8th Cir. 2005)
Aviation Charter, Inc. (Aviation Charter), appeals from the district
court’s grant of summary judgment to Aviation Research Group/US
(ARGUS) on Aviation Charter’s claims of defamation and alleged vi-
Minn.Stat. § 325D.44(8) olations of the Minnesota Deceptive Trade Practices Act (MDTPA),
§ 43(a)(2) and the Lanham Act
ARGUS publishes and sells safety ratings of air charter service
providers. It bases its ratings on a methodology called the Charter
Evaluation and Qualifications (CHEQ) system, which has ”three ma-
jor components: Historical Safety Ratings, Current Aircraft and Pilot
Data, and On-Site Safety Audits.” June 12, 2003, CHEQ Report on
Aviation Charter. ARGUS maintains that it:
... conducts in-depth research into multiple public
databases to uncover accidents, incidents, enforcement
actions, and certification data relating to the operator.
Records that are discovered are assigned a score based on
the official cause, violation, or other data on record. Older
records have less impact on the score and are omi ed after
7
Notwithstanding many similarities between the torts of commercial disparage-
ment and defamation, it has been recognized that from the beginning, more strin-
gent requirements were imposed upon the plaintiff seeking to recover for commer-
cial disparagement in three important respects – falsity of the statement, fault of the
defendant and proof of damage. For purposes of this opinion, we need not elabo-
rate at length on these particular distinctions, other than to note that as the common
law of defamation has become infused with principles of the First Amendment to
the United States Constitution, these distinctions have narrowed.
B. ALTERNATIVES TO COMPETITOR SUITS 651
ten years. The total of all found records results in a Histor-
ical Safety Record score, with the higher score reflecting a
greater number of negative events.
Carriers are grouped into four classes of operation based on the num-
ber of aircraft they operate. ARGUS assigns carriers one of four rat-
ings: Does Not Qualify (DNQ), Silver, Gold, and Platinum. The Silver
rating is assigned to ”[t]hose operators with CHEQ scores within one
standard deviation of the median score for their class of operation.”
The DNQ rating is the lowest possible rating.
In 2001, ARGUS assigned a DNQ rating to Aviation Charter. The
following year, Senator Paul Wellstone and seven others died in an
Aviation Charter crash. Following the Wellstone crash, the Minneapo-
lis Star Tribune published an article entitled ”Wellstone charter firm
got poor safety evaluation.” The Star Tribune article referred to AR-
GUS’s report on Aviation Charter and quoted ARGUS’s president,
Joe Moeggenberg.
After the Star Tribune article was published, Aviation Charter con-
tacted ARGUS and inquired about the basis of its rating. Aviation
Charter concluded that ARGUS’s rating system was fundamentally
flawed and, when ARGUS refused to retract its rating, Aviation Char-
ter initiated this lawsuit.
A.
A statement is defamatory under Minnesota law if it is communicated
to a third party, is false, and tends to harm the plaintiff’s reputation
in the community. It is well recognized in Minnesota that the First
Amendment absolutely protects opinion that lacks a provably false
statement of fact. Statements about ma ers of public concern that are
not capable of being proven true or false and statements that reason-
ably cannot be interpreted as stating facts are protected from defama-
tion actions by the First Amendment.
We have characterized the balance of Aviation Charter’s defama-
tion claim as derivative of ARGUS’s comparison that ”Aviation Char-
ter, relative to other carriers of its size, has an unfavorable safety
record.” We must examine whether this comparison is ”sufficiently
factual to be susceptible of being proved true or false.” Milkovich If
ARGUS had offered a wholly subjective basis for its conclusion, or
even no basis whatsoever, then the comparison would likely have
lacked objectively verifiable criteria. ARGUS, however, asserted that
its comparative rating was derived from ”multiple public databases
to uncover accidents, incidents, enforcement actions, and certifica-
tion data relating to the operator.” Nonetheless, although ARGUS’s
comparison relies in part on objectively verifiable data, the interpre-
tation of those data was ultimately a subjective assessment, not an
652 CHAPTER 7. ADVERTISING
objectively verifiable fact. ARGUS’s description of its process illus-
trates the subjective component of its assessment:
Incidents are rated on a scale of 1-10. ARGUS has trained
its analysts to follow general guidelines for the type of in-
cident and severity of the action. The analysts then make
independent judgments based on the information in the
database regarding the report. They review the facts in the
documents and can ”hyper link” to the specific regulation
that was violated. If they believe that a drastic variation
from the computer assigned score is warranted, the three
analysts can caucus and discuss the incident and draw on
outside scores if necessary. The individual ”scores” for
each incident are then weighted so that the scores in the
most recent 36 months are more significant than those that
occurred more than three years ago. The weighted scores
are added together and compared to like-sized carriers.
ARGUS chose which underlying data to prioritize, performed a sub-
jective review of those data, and defined ”safety” relative to its own
Cf. Mayfair Farms, Inc. v. Socony Mo- methodology.
bil Oil Co., Inc.172 A.2d 26 (N.J. Super. ARGUS’s interpretation of the public database information avail-
1961) ("If the plaintiffs are convinced
able on Aviation Charter is not sufficiently factual to be susceptible of
they deserve three stars or better and
the defendants (through their editorial being proved true or false. It is a subjective interpretation of multiple
group) that two stars for Mayfair and objective data points leading to a subjective conclusion about avia-
one star for Pal's are enough, those tion safety. Cf. . Haynes v. Alfred A. Knopf, Inc. (”A statement of fact
are matters of judgment and opinion is not shielded from an action for defamation by being prefaced with
on which the court should not try to
the words ‘in my opinion,’ but if it is plain that the speaker is express-
say that either party is right or wrong.")
Should the same standard apply to ing a subjective view, an interpretation, a theory, conjecture, or sur-
restaurant reviews and aviation safety mise, rather than claiming to be in possession of objectively verifiable
ratings? facts, the statement is not actionable.”). Because ARGUS’s compara-
Haynes: 8 F.3d 1222 (7th Cir.1993) tive rating is not a provably false statement of fact, Aviation Charter’s
defamation claim fails with respect to that rating and the derivative
statements in the Star Tribune article.
B.
Aviation Charter asserts that ARGUS violated the Lanham Act be-
cause ARGUS’s statements to the Star Tribune were made to advertise
the fact that ARGUS was in the business of rating carriers like Avia-
tion Charter. The Lanham Act requires that a false statement, in order
to be actionable, must be made in commercial advertising or promo-
tion. For a statement to constitute commercial advertising or promo-
tion, it must be made, inter alia, by a defendant who is in commercial
competition with the plaintiff. The district court correctly found that
Aviation Charter’s Lanham Act action failed because ARGUS was not
in commercial competition with Aviation Charter.
B. ALTERNATIVES TO COMPETITOR SUITS 653
C.
The district court concluded that Aviation Charter’s MDTPA action,
like its Lanham Act action, failed because ARGUS was not in com-
petition with Aviation Charter. As ARGUS concedes, however, the
district court erred in so holding because the MDTPA provides that
”a complainant need not prove competition between the parties.” Minn.Stat. § 325D.44, subd. 2.
The MDTPA provides that a person engages in a deceptive trade
practice when, inter alia, the person ”disparages the goods, services,
or business of another by false or misleading representation of fact.”
As set forth above, ARGUS’s statement that Aviation Charter had fif-
teen FAA enforcement actions was false. Accordingly, that statement
would violate the MDTPA if it disparaged Aviation Charter. We con-
clude, however, that Aviation Charter cannot demonstrate that the
statement disparaged its business, given the full context of the Star
Tribune article.
2 Consumer Suits
Consumers can sometimes bring actions for common-law fraud or
under state unfair-competition laws that provide for consumer suits.
But these causes of action tend to have more stringent elements than
competitor suits, and can be especially difficult to maintain on a class-
wide basis.
Perrine v. Sega of America, Inc.
No. 13–cv–01962–JD, 2015 WL
In this consumer class action, plaintiff John Locke has moved for class 2227846 (N.D. Cal. May 12, 2015)
certification and defendant Gearbox has moved for dismissal or judg-
ment on the pleadings. The Court denies both motions.
The product at issue in this case is the video game “Aliens: Colo-
nial Marines” (“ACM”). The game, developed by Gearbox Software,
L.L.C. (“Gearbox”) and produced by Sega of America, Inc. (“Sega”),
was “held out as the canon sequel to James Cameron’s 1986 film
‘Aliens.’” Named plaintiff John Locke is an “avid fan of the series”
who pre-purchased a copy prior to its release. Damion Perrine, the
other named plaintiff, is also a “fan of the Aliens franchise,” and pur-
chased a copy of the game on its release date, February 13, 2013.
The complaint alleges a “classic bait-and-switch.” Plaintiffs allege
that defendants developed a “non-retail but technically superior ver-
sion” of the game that featured, among other things, “advanced arti-
ficial intelligence programming, certain gameplay sequences drawn
from the Aliens movie,” and “a highly advanced graphics engine (the
‘Demo Engine’),” and presented this version and described it to the
public as “actual gameplay.” The retail version that was ultimately
sold, however, allegedly “utilized different programming altogether
and a different—and much less advanced—graphics engine.” The
654 CHAPTER 7. ADVERTISING
complaint alleges that because of these differences, videogame indus-
try critics expressed “disappointment and surprise” following the
public release of the game, and that even Randy Pitchford, Presi-
dent of Gearbox, “acknowledged the discrepancy between the Aliens:
Colonial Marines hands-off demo and the final game.” On this basis,
the complaint asserts six claims for relief: (1) violation of the Con-
sumer Legal Remedies Act, Cal. Civil Code § 1750 (“CLRA”); (2)
violation of the Unfair Competition Law, Cal. Bus. & Prof.Code §
17200 (“UCL”); (3) violation of the False Advertising Law, Cal. Bus.
& Prof.Code § 17500 (“FAL”); (4) breach of express warranties; (5)
fraud in the inducement; and (6) negligent misrepresentation.
As an initial ma er, the proposed class as framed by the complaint
– “all persons in the United States who paid for a copy of the Aliens:
Colonial Marines video game either on or before February 12, 2013”
– is not certifiable. At a minimum, common questions of fact would
not predominate in the class as defined by the complaint; rather, in-
dividualized. And while it is true that “class members do not need
to demonstrate individualized reliance” for plaintiff’s claims under
the UCL and FAL, even for those claims, a presumption of reliance
does not arise when class members were exposed to quite disparate
information from various representatives of the defendant. For the
presumption to apply, it is necessary for everyone in the class to have
viewed the allegedly misleading advertising. Plaintiff’s original defi-
nition makes no a empt to limit the class to those who were exposed
to the allegedly misleading advertising here, and consequently it is
overbroad and not certifiable.
The obviousness of these principles is underscored by the fact that
plaintiff rapidly retreated at the hearing to “limit the class to people
who viewed an advertisement.” Plaintiff proposed to do this “by affi-
davit and claim form.” The Court directed the parties to submit sup-
plemental briefs on this issue, namely “whether the Court can and
should certify a class allowing class membership to be established by
assertion of the class members by way of, e.g., affidavits swearing
that a consumer viewed a certain video or trailer prior to placing a
pre-order for the game at issue.”
The parties responded, and the Court now concludes that the an-
swer to its question is no. The problem with plaintiff’s suggestion is
that the revised class lacks ascertainability. Ascertainability is an im-
portant requirement because it is needed for properly enforcing the
preclusive effect of final judgment. The class definition must be clear
in its applicability so that it will be clear later on whose rights are
merged into the judgment, that is, who gets the benefit of any relief
and who gets the burden of any loss.
The factual record in the case shows why ascertainability is a pipe
dream here. As the complaint acknowledges, this is not a case about
B. ALTERNATIVES TO COMPETITOR SUITS 655
a single misrepresentation. Rather, the non-retail version of the ACM
game is alleged to have been presented to the public “through a se-
ries of ‘actual gameplay’ demonstrations.” The first demonstration is
alleged to have occurred “at the annual ‘E3’ conference in early June
2011.” At the hearing, plaintiff explained that the ad campaign at is-
sue “started at the E3 2011 conference and concluded ... right before
the release date [of the game in] February of 2013.”
It is undisputed in the record that many trailers and commercials
were released during that time period, primarily via the Internet but
also through television. It is further undisputed that several videos
for ACM shown before the game’s release contain footage from only
the final retail version, rather than from the alleged non-retail version.
When pressed at the hearing to identify which specific videos or trail-
ers included the allegedly problematic E3 2011 video or portions of
it, plaintiff’s counsel answered that he could not “say with certainty
which ones” and that he “just [didn’t] have the information.” Coun-
sel added, ineffectually, that it does not “ma er that each and every
video didn’t have a specific scene from the 2011 reenactment,” be-
cause the E3 2011 video “was accessible through this time period”
and remains so today. And Mr. Locke, the only named plaintiff mov-
ing for class certification and seeking appointment as a class repre-
sentative, compounded the ascertainability problem by testifying in
deposition that he could not “answer ... with any degree of certainty”
a question regarding which videos he saw before he preordered his
copy of the game.
These facts distinguish this case from others in which self-
identification through affidavits was found to be permissible, and
places it in the camp of cases where such a proposal failed for lack
of ascertainability. As was the case in Xavier, there is “no good way
to identify” individuals who “have been exposed to Defendants’ at-
issue advertising before February 12, 2003 – the day that all ACM
preorders were made ‘final.’” Pu ing aside the fact that plaintiff has
failed to carry his burden of identifying which videos and trailers ac-
tually comprise defendants’ “at-issue advertising” here, there is no
good way to identify which purchasers viewed which videos prior to
purchasing the game. Certainly, defendants have no records of who
viewed what when, and plaintiff has not identified any document-
based method of identifying this information. Instead, plaintiff’s
suggestion is to permit class members to self-identify through the
submission of affidavits, but those affidavits would be highly unre-
liable and likely to embody the “subjective memory problem” that
was found to exist in Xavier v. Philip Morris USA Inc.. As Judge Alsup Xavier: 787 F. Supp. 2d 1075 (N.D.Cal.
noted in that case, “[s]wearing ‘I smoked 146,000 Marlboro cigare es’ 2011)
is categorically different from swearing ‘I have been to Paris, France,’
or ‘I am Jewish,’ or even ‘I was within ten miles of the toxic explosion
656 CHAPTER 7. ADVERTISING
on the day it happened,” and the “memory problem is compounded
by incentives individuals would have to associate with a successful
class or dissociate from an unsuccessful one.”
The reality of this memory problem is beyond meaningful dispute.
One of the two named plaintiffs here has already admi ed under oath
that he cannot identify “with any degree of certainty” which videos
he saw before he placed his pre-order of the game at issue. The other
named plaintiff, who no longer seeks to be a class representative but
whose testimony is relevant nevertheless, also testified under oath
that he could “not with certainty” remember all the videos he saw
for Aliens: Colonial Marines. He further affirmed that there were
“no records or no way for you to be able to recreate all of the different
videos or demonstrations you may have seen for the game.”
On this record, the Court finds that “persons who viewed an ad-
vertisement for ACM incorporating the Demoed Version,” cannot be
identified through any reliable and manageable means, and that the
proposed class lacks ascertainability.
3 FTC Enforcement
15 U.S.C. § 45(2) Section 5 of the Federal Trade Commission Act authorizes the FTC
to prevent ”unfair or deceptive acts or practices in or affecting com-
merce.” In some respects, this authority parallels the tests applied
to competitor suits under the Lanham Act. In other respects, it is
broader. State law often also provides for public enforcement by state
officials, typically state a orneys general. (We will not discuss these
”Baby FTC Acts” further here, other than to note their nickname.)
Federal Trade Commission v. Winsted Hosiery Company
258 U.S. 483 (1922)
The Winsted Hosiery Company has for many years manufactured un-
derwear which it sells to retailers throughout the United States. It
brands or labels the cartons in which the underwear is sold, as ”Nat-
B. ALTERNATIVES TO COMPETITOR SUITS 657
ural Merino”, ”Gray Wool”, ”Natural Wool”, ”Natural Worsted”, or
”Australian Wool”. None of this underwear is all wool. Much of it
contains only a small percentage of wool; some as li le as ten per cent.
The Federal Trade Commission instituted a complaint under § 5, and
called upon the company to show cause why use of these brands and
labels alleged to be false and deceptive should not be discontinued.
It is contended that the method of competition complained of is
not unfair within the meaning of the act, because labels such as the
Winsted Company employs, and particularly those bearing the word
”Merino”, have long been established in the trade and are generally
understood by it as indicating goods partly of co on; that the trade is
not deceived by them; that there was no unfair competition for which
another manufacturer of underwear could maintain a suit against the
Winsted Company; and that even if consumers are misled because
they do not understand the trade signification of the label or because
some retailers deliberately deceive them as to its meaning, the result
is in no way legally connected with unfair competition.
This argument appears to have prevailed with the Court of Ap-
peals; but it is unsound. The labels in question are literally false, and,
except those which bear the word ”Merino”, are palpably so. All are,
as the Commission found, calculated to deceive and do in fact de-
ceive a substantial portion of the purchasing public. That deception
is due primarily to the words of the labels, and not to deliberate de-
ception by the retailers from whom the consumer purchases. While it
is true that a secondary meaning of the word ”Merino” is shown, it is
not a meaning so thoroughly established that the description which
the label carries has ceased to deceive the public; for even buyers
for retailers, and sales people, are found to have been misled. The
facts show that it is to the interest of the public that a proceeding to
stop the practice be brought. And they show also that the practice
constitutes an unfair method of competition as against manufactur-
ers of all wool knit underwear and as against those manufacturers
of mixed wool and co on underwear who brand their product truth-
fully. For when misbranded goods a ract customers by means of
the fraud which they perpetrate, trade is diverted from the producer
of truthfully marked goods. That these honest manufacturers might Would any of these "honest manufac-
protect their trade by also resorting to deceptive labels is no defense turers" have had a private cause of ac-
tion against Winsted? Note the date of
to this proceeding brought against the Winsted Company in the pub-
the opinion
lic interest.
The fact that misrepresentation and misdescription have become
so common in the knit underwear trade that most dealers no longer
accept labels at their face value, does not prevent their use being an
unfair method of competition. A method inherently unfair does not
cease to be so because those competed against have become aware of
the wrongful practice. Nor does it cease to be unfair because the fal-
658 CHAPTER 7. ADVERTISING
sity of the manufacturer’s representation has become so well known
to the trade that dealers, as distinguished from consumers, are no
longer deceived. The honest manufacturer’s business may suffer, not
merely through a competitor’s deceiving his direct customer, the re-
tailer, but also through the competitor’s pu ing into the hands of the
retailer an unlawful instrument, which enables the retailer to increase
his own sales of the dishonest goods, thereby lessening the market for
the honest product. As a substantial part of the public was still misled
by the use of the labels which the Winsted Company employed, the
public had an interest in stopping the practice as wrongful; and since
the business of its trade rivals who marked their goods truthfully was
necessarily affected by that practice, the Commission was justified in
its conclusion that the practice constituted an unfair method of com-
petition; and it was authorized to order that the practice be discontin-
ued.
Kraft, Inc. v. FTC
970 F.2d 311 (7th Cir. 1992)
[Kraft Singles were classified as ”processed cheese”: part cheese and
part other ingredients. To differentiate them from ”imitation cheese”
slices, which contain li le or no cheese, Kraft advertised its Singles as
having ”five ounces of milk” per slice and emphasized their calcium
content. But 30% of the calcium in the milk in Kraft Singles was lost
during processing.]
In determining what claims are conveyed by a challenged adver-
tisement, the Commission relies on two sources of information: its
own viewing of the ad and extrinsic evidence. Its practice is to view
the ad first and, if it is unable on its own to determine with confidence
what claims are conveyed in a challenged ad, to turn to extrinsic ev-
idence. The most convincing extrinsic evidence is a survey of what
consumers thought upon reading the advertisement in question, but
the Commission also relies on other forms of extrinsic evidence in-
cluding consumer testimony, expert opinion, and copy tests of ads.
Kraft has no quarrel with this approach when it comes to deter-
mining whether an ad conveys express claims, but contends that the
FTC should be required, as a ma er of law, to rely on extrinsic ev-
idence rather than its own subjective analysis in all cases involving
allegedly implied claims. The basis for this argument is that implied
claims, by definition, are not self-evident from the face of an ad. This,
Still from Kraft Singles ad
combined with the fact that consumer perceptions are shaped by a
host of external variables – including their social and educational
backgrounds, the environment in which they view the ad, and prior
experiences with the product advertised – makes review of implied
claims by a five-member commission inherently unreliable.
Kraft bu resses its argument by pointing to the use of extrinsic
evidence in an analogous context: cases brought under § 43(a) of the
B. ALTERNATIVES TO COMPETITOR SUITS 659
Lanham Act. Courts hearing deceptive advertising claims under that
Act, which provides a private right of action for deceptive advertising,
generally require extrinsic proof that an advertisement conveys an
implied claim. Were this a Lanham Act case, a reviewing court in
all likelihood would have relied on extrinsic evidence of consumer
perceptions. While this disparity is sometimes justified on grounds
of advertising ”expertise” – the FTC presumably possesses more of it
than courts – Kraft maintains this justification is an illusory one in that
the FTC has no special expertise in discerning consumer perceptions.
While Kraft’s arguments may have some force as a ma er of pol-
icy, they are unavailing as a ma er of law. Courts, including the
Supreme Court, have uniformly rejected imposing such a require-
ment on the FTC, FTC v. Colgate-Palmolive Co. (FTC not required to Colgate-Palmolive: 380 U.S. 374 (1965)
conduct consumer surveys before determining that a commercial has
a tendency to mislead), and we decline to do so as well. We hold that
the Commission may rely on its own reasoned analysis to determine
what claims, including implied ones, are conveyed in a challenged
advertisement, so long as those claims are reasonably clear from the
face of the advertisement.
The Commission’s expertise in deceptive advertising cases,
Kraft’s protestations notwithstanding, undoubtedly exceeds that of
courts as a general ma er. That false advertising cases constitute a
small percentage of the FTC’s overall workload does not negate the
fact that significant resources are devoted to such cases in absolute
terms, nor does it account for the institutional expertise the FTC gains
through investigations, rulemakings, and consent orders.
We find substantial evidence in the record to support the FTC’s
finding. Although Kraft downplays the nexus in the ads between
milk and calcium, the ads emphasize visually and verbally that five
ounces of milk go into a slice of Kraft Singles; this image is linked
to calcium content, strongly implying that the consumer gets the cal-
cium found in five ounces of milk.
Kraft asserts that the literal truth of the Class Picture ads – they
are made from five ounces of milk and they do have a high concen-
tration of calcium – makes it illogical to render a finding of consumer
deception. The difficulty with this argument is that even literally true
statements can have misleading implications. Here, the average con-
sumer is not likely to know that much of the calcium in five ounces of
milk (30%) is lost in processing, which leaves consumers with a mis-
leading impression about calcium content. The critical fact is not that
reasonable consumers might believe that a ¾ ounce slice of cheese
actually contains five ounces of milk, but that reasonable consumers
might believe that a ¾ ounce slice actually contains the calcium in
five ounces of milk.
660 CHAPTER 7. ADVERTISING
Letter from Federal Trade Commission to Microsoft Corp. and Starcom
MediaVest Group
Aug. 26, 2015
Dear Counsel:
As you know, the staff of the Federal Trade Commission’s North-
west Region has conducted an investigation into whether Microsoft
Cmporation and its advertising agency, Starcom MediaVest Group
(“Starcom”), violated Section 5 of the Federal Trade Commission Act,
15 U.S.C. § 45, in connection with the promotion ofXbox One video
game consoles and certain Microsoft video game titles.
Our inquiry focused on an advertising campaign conducted by
Machinima, Inc., in late 2013 at the request of Starcom, acting on be-
half of Microsoft.
As part of that advertising campaign, Machinima, a multi-channel
network on YouTube, paid several of its network partners (video blog-
gers known as “influencers”) significant amounts of money to pro-
duce and upload Xbox One gameplay videos. The videos, which
were posted to YouTube in the days immediately prior to and after
the launch of the Xbox One, were intended to generate buzz around
and drive sales of the newly released Xbox One and the Microsoft
video game titles.
At Machinima’s direction, the influencers spoke favorably of the
Xbox One and the game titles in their videos.
The videos were uploaded by the influencers to their individual
YouTube channels, where they appeared to be independently pro-
duced by, and to reflect the personal views of, the influencers.
Machinima did not require the influencers to disclose in their
videos that they were being compensated for producing and upload-
ing the videos, and when the videos were uploaded, many (if not
most) of the influencers failed to make any kind of disclosure.
Section 5 of the FTC Act requires the disclosure of a material con-
nection between an advertiser and an endorser when such a relation-
ship is not apparent from the context of the communication that con-
tains the endorsement. In this case,the payment of significant sums to
video bloggers to post specific content promoting the Xbox One and
Microsoft’s game titles is a material connection that would not be rea-
sonably expected by YouTube viewers. As the advertiser, Microsoft
bears responsibility for the influencers’ failure to disclose such mate-
rial connections. Starcom, as Microsoft’s agent and the advertising
agency that managed the relationship with Machinima, also bears re-
sponsibility for the influencers’ failure to disclose.
However, upon careful review of this ma er, including nonpublic
information submi ed to the FTC, we have determined not to recom-
mend enforcement action against Microsoft or Starcom at this time.
We considered several factors in reaching this decision.
The failures to disclose here appear to be isolated incidents that oc-
B. ALTERNATIVES TO COMPETITOR SUITS 661
curred in spite of, and not in the absence of, policies and procedures
designed to prevent such lapses. Microsoft had a robust compliance
program in place when the Xbox One campaign was launched, in-
cluding specific legal and marketing guidelines concerning the FTC’s
Endorsement Guides and relevant training made available to employ-
ees, vendors and Starcom personnel. Since the Xbox One campaign,
Microsoft and Starcom have adopted additional safeguards regard-
ing sponsored endorsements, and they have commi ed to, among
other steps, specifically requiring their employees to monitor influ-
encer campaigns conducted by subcontractors in the future. In addi-
tion, Microsoft and Starcom took swift action to require that Machin-
ima insert disclosures into the campaign videos once they learned
that Machinima had paid the influencer and that no disclosures had
been made.
Our decision not to pursue enforcement action is not to be con-
strued as a determination that a violation may not have occurred, just
as the pendency of an investigation should not be construed as a de-
termination that a violation has occurred. The Commission reserves
the right to take further action as the public interest may warrant.
See also 16 C.F.R. pt. 255 (”Guides Concerning the Use of Endorse-
ments and Testimonials in Advertising”); F T C -
,. D :H M E D D -
A (Mar. 2013). In addition to disclosure, endorse-
ments can also raise falsity and substantiation issues about the en-
dorser’s experience with the product – and endorsement claims with-
out the endorser’s permission can raise § 43(a) false-endorsement and
right of publicity issues.
662 CHAPTER 7. ADVERTISING
C Other Sources of Advertising Law
1 Trademark
In a sense, trademark law treats consumer understandings – i.e. sec-
ondary meaning and goodwill – as a source of truth. A trademark
refers to its owner’s goods or services; using it to refer to something
else is false as a ma er of law. But in another, more accurate sense,
trademark law defers to consumer understandings only so long as
the mark owner is not using them to deceive. Arbitrary trademarks
like APPLE for computers are acceptable only because no one really
thinks the computers are made of apples.
Lanham Act
15 U.S.C. § 1052 [Lanham Act § 2]
No trademark … shall be refused registration on the principal register
Trademarks registrable on principal on account of its nature unless it—
register … (a) Consists of or comprises … deceptive … ma er; …
(e) Consists of a mark which (1) when used on or in connection
with the goods of the applicant is merely … deceptively misde-
scriptive of them … .
In re Budge Mfg. Co.
857 F.2d 773 (Fed. Cir. 1988)
Budge Manufacturing Co., Inc., appeals from the final decision of the
United States Trademark Trial and Appeal Board refusing registra-
tion of LOVEE LAMB for “automotive seat covers,” application Serial
No. 507,974 filed November 9, 1984. The basis for rejection is that the
term LAMB is deceptive ma er within the meaning of section 2(a) of
the Lanham Act as applied to Budge’s goods which are made wholly
from synthetic fibers. We affirm.
Section 2(a) of the Lanham Act bars registration of a mark which:
“Consists of or comprises ... deceptive ... ma er....” As stated in
Automatic Radio: 404 F.2d 1391 (CCPA In re Automatic Radio Mfg. Co.: “The proscription [of section 2(a)]
1969) is not against misdescriptive terms unless they are also deceptive.”
Thus, that a mark or part of a mark may be inapt or misdescrip-
tive as applied to an applicant’s goods does not make it “deceptive.”
Id.(AUTOMATIC RADIO not a deceptive mark for air conditioners,
ignition systems, and antennas).
Where the issue relates to deceptive misdescriptiveness within the
meaning of 2(a), we are in general agreement with the standard set
out by the board:
(1) Is the term misdescriptive of the character, quality, function,
composition or use of the goods?
C. OTHER SOURCES OF ADVERTISING LAW 663
(2) If so, are prospective purchasers likely to believe that the mis-
description actually describes the goods?
(3) If so, is the misdescription likely to affect the decision to pur-
chase?
In ex parte prosecution, the burden is initially on the Patent and
Trademark Office (PTO) to put forth sufficient evidence that the mark
for which registration is sought meets the above criteria of unregis-
trability. Mindful that the PTO has limited facilities for acquiring evi-
dence – it cannot, for example, be expected to conduct a survey of the
marketplace or obtain consumer affidavits – we conclude that the ev-
idence of record here is sufficient to establish a prima facie case of de-
ceptiveness. That evidence shows with respect to the three-pronged
test:
(1) Budge admits that its seat covers are not made from lamb or
sheep products. Thus, the term LAMB is misdescriptive of its
goods.
(2) Seat covers for various vehicles can be and are made from natu-
ral lambskin and sheepskin. Applicant itself makes automobile
seat covers of natural sheepskin. Lambskin is defined, inter alia,
as fine-grade sheep skin. The board’s factual inference is reason-
able that purchasers are likely to believe automobile seat covers
denominated by the term LAMB or SHEEP are actually made
from natural sheep or lamb skins.
(3) Evidence of record shows that natural sheepskin and lambskin
is more expensive than simulated skins and that natural and
synthetic skins have different characteristics. Thus, the misrep-
resentation is likely to affect the decision to purchase.
Faced with this prima facie case against registration, Budge had the
burden to come forward with countering evidence to overcome the
rejection. It wholly failed to do so.
Budge argues that its use of LAMB as part of its mark is not mis-
descriptive when considered in connection with the text in its adver-
tising, which states that the cover is of “simulated sheepskin.”
We conclude that the board properly discounted Budge’s advertis-
ing and labeling which indicate the actual fabric content. Misdescrip-
tiveness of a term may be negated by its meaning in the context of the
whole mark inasmuch as the combination is seen together and makes
a unitary impression. A.F. Gallun & Sons Corp. v. Aristocrat Leather Gallun: 135 USPQ 459 (TTAB 1962)
Prods., Inc. (COPY CALF not misdescriptive, but rather suggests im-
itation of calf skin). The same is not true with respect to explanatory
statements in advertising or on labels which purchasers may or may
not note and which may or may not always be provided. The statu-
tory provision bars registration of a mark comprising deceptive mat-
664 CHAPTER 7. ADVERTISING
ter. Congress has said that the advantages of registration may not be
extended to a mark which deceives the public. Thus, the mark stand-
ing alone must pass muster, for that is what the applicant seeks to
register, not extraneous explanatory statements.
Budge next argues that no reasonable purchaser would expect
to purchase lambskin automobile seat covers because none made of
lambskin are on the market. Only sheepskin automobile seat covers
are being made, per Budge. Not only was no evidence submi ed
on the point Budge seeks to make, only statements of Budge’s a or-
ney, but also the argument is without substance. The board properly
equated sheepskin and lambskin based on the dictionary definition
which indicates that the terms may be used interchangeably. In ad-
dition, while Budge would discount the evidence presented that bi-
cycle and airline seat coverings are made of lambskin, we conclude
that it does support the board’s finding that there is nothing incon-
gruous about automobile seat covers being made from lambskin. We
also agree with the board’s conclusion that any differences between
sheepskin and lambskin would not be readily apparent to potential
purchasers of automobile seat covers. The board’s finding here that
purchasers are likely to believe the misrepresentation is not clearly
erroneous.
Finally, we note the evidence of Budge’s extensive sales since 1974
under the mark. However, it is too well established for argument that
a mark which includes deceptive ma er is barred from registration
and cannot acquire distinctiveness.
None of the facts found by the board have been shown to be
clearly erroneous nor has the board erred as a ma er of law. Ac-
cordingly, we affirm the board’s decision that Budge’s mark LOVEE
LAMB for automobile seat covers made from synthetic fibers is de-
ceptive and is, thus, barred from registration.
2 Certifications
Certifications come in various forms. We start with Lanham Act cer-
tification marks (like the Fair Trade mark) because they draw heavily
from trademark law. There are also government-administered certi-
fications, some of which are mandatory (like the FCC’s equipment
labeling rules) and some of which are voluntary (like the USDA’s
food-grading certifications).
Lanham Act
15 U.S.C. § 1127 [Lanham Act § 45]
The term “certification mark” means any word, name, symbol, or de-
Construction and definitions; intent of vice, or any combination thereof–
chapter (1) used by a person other than its owner, or
C. OTHER SOURCES OF ADVERTISING LAW 665
(2) which its owner has a bona fide intention to permit a person
other than the owner to use in commerce and files an applica-
tion to register on the principal register established by this [Act],
to certify regional or other origin, material, mode of manufacture,
quality, accuracy, or other characteristics of such person’s goods or
services or that the work or labor on the goods or services was per-
formed by members of a union or other organization.
Trademark Manual of Examining Procedure
… Based on the statute, there are generally three types of certification § 1306.1
marks, that is, those that certify: Types of Certification Marks
1. Geographic origin. Certification marks may be used to cer-
tify that authorized users’ goods or services originate in a spe-
cific geographic region (e.g., SUNSHINE TREE for citrus from
Florida).
2. Standards met with respect to quality, materials, or mode of man-
ufacture. Certification marks may be used to certify that autho-
rized users’ goods or services meet certain standards in relation
to quality, materials, or mode of manufacture (e.g., approval by
Underwriters Laboratories) (UL certifies, among other things,
representative samplings of electrical equipment meeting cer-
tain safety standards).
3. Work/labor performed by member or that worker meets certain stan-
dards. Certification marks may also be used to certify that au-
thorized users’ work or labor on the products or services was
performed by a member of a union or other organization, or
that the performer meets certain standards.
A certification mark may not be used, in the trademark sense of § 1306.01(a)
“used,” by the owner of the mark; it may be used only by a person Use Is by Person Other than Owner of
or persons other than the owner of the mark. That is, the owner of a Certification Mark
certification mark does not apply the mark to his or her goods or ser-
vices and, in fact, usually does not a ach or apply the mark at all. The
mark is generally applied by other persons to their goods or services,
with authorization from the owner of the mark.
The owner of a certification mark does not produce the goods or
perform the services in connection with which the mark is used, and
thus does not control their nature and quality. Therefore, it is not
appropriate to inquire about control over the nature and quality of
the goods or services. What the owner of the certification mark does
control is use of the mark by others on their goods or services. This
control consists of taking steps to ensure that the mark is applied only
to goods or services that contain the characteristics or meet the re-
666 CHAPTER 7. ADVERTISING
quirements that the certifier/owner has established or adopted for the
certification.
§ 1306.01(b)
A certification mark is a special creature created for a purpose
Purpose Is to Certify, Not to Indicate uniquely different from that of an ordinary service mark or trade-
Source mark That is, the purpose of a certification mark is to inform pur-
chasers that the goods or services of a person possess certain char-
acteristics or meet certain qualifications or standards established by
another person. A certification mark does not indicate origin in a sin-
gle commercial or proprietary source the way a trademark or service
mark does. Rather, the same certification mark is used on the goods
or services of many different producers.
The message conveyed by a certification mark is that the goods
or services have been examined, tested, inspected, or in some way
checked by a person who is not their producer, using methods deter-
mined by the certifier/owner. The placing of the mark on goods, or
its use in connection with services, thus constitutes a certification by
someone other than the producer that the prescribed characteristics
or qualifications of the certifier for those goods or services have been
met.
Fair Trade USA Farm Workers Standard
Version 1.11 (2014)
The Fair Trade USA Farm Workers Standard takes a development
approach in that it differentiates between minimum criteria and
progress criteria. Minimum criteria are assessed during the first cer-
tification audit and represent minimum practices in social empow-
erment, economic development, and environmental responsibility.
These criteria are met prior to initial certification. Progress criteria are
fulfilled after the first year of certification and represent continuous
development towards increased social empowerment and economic
development as well as best practices in environmental responsibility.
…
ED-CE 1 Conditions of employment, including wages, either meet
or exceed the following standards: sector regulations, Collective Bar-
gaining Agreements that are in place with the employer, the regional
average minimum wage, and official minimum wages for similar oc-
cupations. The employer specifies wages for all functions. …
ED-CE 20 If the company provides the workers with housing, the con-
ditions and the infrastructure of the house must be such as to ensure
sanitation, safety, ventilation, reasonable protection from heat and
cold, privacy and security. Housing must be provided at reasonable
cost. Fire extinguishers are provided and workers should be trained
on how to use them. …
SR-ND 1 There is no discrimination, particularly on the basis of race,
Fair Trade Certified certification mark color, gender, sexual orientation, disability, marital status, family
C. OTHER SOURCES OF ADVERTISING LAW 667
obligations, age, religion, political opinion, union or worker’s repre-
sentative bodies or Fair Trade Commi ee membership, national ex-
traction or social origin or any other condition that could give rise to
discrimination, in: recruitment, promotion, access to training, remu-
neration, allocation of work, termination of employment, retirement
or other activities. …
ES-AC 1 Materials on the red list (prohibited materials) on the Fair
Trade USA Prohibited Materials List (see annex 1) are not used or
otherwise sold, handled, or distributed by the company.
ES-AC 2 The decision to use herbicides is based on the presence of
weeds and lack of alternative controls. If used, herbicides are only
one element of an integrated strategy against weeds, and are only
used in spot applications. …
S P P T
Produce - Banana
At FOB level, prices include the costs for the following packing mate-
rial:
• standard carton box,
• one plastic per carton box (banavac or polypack),
• pallet,
• edge corners,
• strips,
• up to 3 labels per banana hand
The costs for these standard packing and palletization materials are
covered by the exporter. However, the service related to packing (la-
bor costs) of above defined standard packing material is included in
the Ex Works prices and provided by the producer. Neither the Ex
Works nor the FOB prices include costs for additional or special pack-
ing materials such as “clusterbags” or “parafilm” and related services.
Costs for those packing materials and any associated labor must be
paid on top of the Fair Trade Minimum Prices to producers at Ex
Works or FOB level and be defined in the contract. Fair Trade Min-
imum Prices in any case refer to 18.14 kg of ripened fruit. If boxes
with different weight are used, Fair Trade Minimum Prices and Fair
Trade Premiums are calculated pro rata.
Understanding the FCC Regulations for Low-Power, Non-Licensed
Transmitter Federal Communications Commis-
Low-power, non-licensed transmi ers are used virtually everywhere. sion Office of Engineering and
Cordless phones, baby monitors, garage door openers, wireless home Technology Bulleting No. 63 (1993)
security systems, keyless automobile entry systems and hundreds of
668 CHAPTER 7. ADVERTISING
other types of common electronic equipment rely on such transmit-
ters to function. At any time of day, most people are within a few
meters of consumer products that use low-power, non-licensed trans-
So-called because they comply with mi ers. Part 15 transmi ers use very li le power, most of them less
the rules in 47 C.F.R. pt. 15. than a milliwa . They are ”non-licensed” because their operators are
not required to obtain a license from the FCC to use them.
The Federal Communications Commission (FCC) has rules to
limit the potential for harmful interference to licensed transmi ers
by low-power, non-licensed transmi ers. The certification procedure
requires that tests be performed to measure the levels of radio fre-
quency energy that are radiated by the device into the open air or
conducted by the device onto the power lines. results, and some ad-
ditional information about the device including design drawings.
Certified transmi ers also are required to have two labels at-
tached: an FCC ID label and a compliance label. The FCC ID la-
bel identifies the FCC equipment authorization file that is associated
with the transmi er, and serves as an indication to consumers that
the transmi er has been authorized by the FCC. The compliance la-
bel indicates to consumers that the transmi er was authorized under
Part 15 of the FCC rules and that it may not cause, nor is it protected
from, harmful interference.
Inspection & Grading of Meat and Poultry: What Are the Differences?
Required FCC logo
The inspection and grading of meat and poultry are two separate pro-
grams within the U.S. Department of Agriculture (USDA). Inspection
U.S. Department of Agriculture Food for wholesomeness is mandatory and is paid for with public funds.
Safety & Inspection Service fact sheet Grading for quality is voluntary, and the service is requested and
(last modified June 3, 2014) paid for by meat and poultry producers/processors.
Meat that has been federally inspected and passed for wholesome-
ness is stamped with a round purple mark. The dye used to stamp
the grade and inspection marks onto a meat carcass is made from a
food-grade vegetable dye and is not harmful. (The exact formula is
"proprietary/owned"? proprietary/owned by the maker of the dye.)The mark is put on car-
casses and major cuts. After trimming, the mark might not appear on
retail cuts such as roasts and steaks. However, meat that is packaged
in an inspected facility will have an inspection mark which identifies
the plant on the label.
After meat and poultry are inspected for wholesomeness, produc-
ers and processors may request that they have products graded for
quality by a licensed Federal grader. The USDA’s Agricultural Mar-
keting Service (h p://www.ams.usda.gov) is the agency responsible
for grading meat and poultry. Those who request grading must pay
for the service. Grading for quality means the evaluation of traits re-
lated to tenderness, juiciness, and flavor of meat; and, for poultry, a
USDA inspected mark normal shape that is fully fleshed and meaty and free of defects.
C. OTHER SOURCES OF ADVERTISING LAW 669
USDA grades are based on nationally uniform Federal standards
of quality. No ma er where or when a consumer purchases graded
meat or poultry, it must have met the same grade criteria. The grade
is stamped on the carcass or side of beef and is usually not visible on
retail cuts. However, retail packages of beef, as well as poultry, will
show the U.S. grade mark if they have been officially graded.
The grade symbol and wording are no longer copyrighted; how- "copyrighted"?
ever, according to the Truth in Labeling Law, it is illegal to mislead
or misrepresent the shield or wording.
Quality Grades:
• Prime grade is produced from young, well-fed beef ca le. It
has abundant marbling and is generally sold in restaurants and
hotels. Prime roasts and steaks are excellent for dry-heat cook-
ing (broiling, roasting, or grilling).
• Choice grade is high quality, but has less marbling than Prime.
Choice roasts and steaks from the loin and rib will be very ten-
der, juicy, and flavorful and are, like Prime, suited to dry-heat
cooking. Many of the less tender cuts, such as those from the
rump, round, and blade chuck, can also be cooked with dry heat
if not overcooked. Such cuts will be most tender if ”braised” —
roasted, or simmered with a small amount of liquid in a tightly
covered pan.
USDA Choice grade mark
• Select grade is very uniform in quality and normally leaner
than the higher grades. It is fairly tender, but, because it has
less marbling, it may lack some of the juiciness and flavor of the
higher grades. Only the tender cuts (loin, rib, sirloin) should be
cooked with dry heat. Other cuts should be marinated before
cooking or braised to obtain maximum tenderness and flavor.
• Standard and Commercial grades are frequently sold as un-
graded or as ”store brand” meat.
• Utility, Cu er, and Canner grades are seldom, if ever, sold at
retail but are used instead to make ground beef and processed
products.
3 Geographic Indications
Some countries have sui generis systems for protecting geographical in-
dications. The United States mostly does not; we protect them primar-
ily – but not exclusively – with trademarks and certification marks.
Justin Hughes
58 Hastings L.J. 299 (2006)
Champagne, Feta, and Bourbon -- The Spirited Debate About
Geographical Indications
670 CHAPTER 7. ADVERTISING
The French system of appellations d’origine contrôlées (AOC) is founded
on the idea of terroir. Terroir has no direct English translation, but
the notion behind the Latinate word is simple: the product’s qual-
ities come with the territory. As one Australian wine critic describes
it: “terroir . . . translates roughly as ‘the vine’s environment[,]’ but
has connotations that extend right into the glass: in other words, if a
wine tastes of somewhere, if the flavours distinctly make you think
of a particular place on the surface of this globe, then that wine is
expressing its terroir.”
Beliefs about terroir run deep in France, but not too deep, for if
they did there might not be a justification for the elaborate regula-
tory structure governing production of AOC foodstuffs. The INAO
regulates not just the geographic boundaries for each AOC, but all
“conditions of production,” including, for wine, the grape varietals,
hectare production quotas, natural alcohol content during vinifica-
tion, permi ed irrigation, etc. The Institut National des Appellations
d’Origine (INAO) regulations for AOC cheese place varying legal re-
quirements on rennet used in coagulation, curd drainage, milk tem-
perature at different points in curing, salting, and the use of lactic
proteins.
In contrast to a separate system for protecting appellations, some
countries, like the United States, subsume protection of geographi-
cal indications under trademark law. This is achieved through the
categories of “certification marks” and “collective marks.” …
Geographical words in product names (that is, labeling and adver-
tising) have three basic purposes. These are (1) to communicate geo-
graphic source, (2) to communicate (non- geographic) product quali-
ties, and (3) to create evocative value. The first of these is simple. “In-
dustria Argentina” or “Made in England” communicate a product’s
geographic origins. Second, geographic words are often used to com-
municate product characteristics other than geographic origin. This
second use often leads to the geographic words becoming “generic.”
The word loses its geographic meaning and acquires another mean-
ing based on non-geographic qualities of the product, as when people
go into a restaurant chinois off the Champs-Elysées or, nine time zones
away, Californians order French fries with their hamburger.
A third, more overlooked, category for use of geographical words
in product names is their use for evocative and aesthetic purposes.
These are typically uses of words which, in American trademark doc-
trine, would be “fanciful” or “arbitrary.” The evocative value of geo-
graphic words is most evident with geographic names of fictional or
no-longer existent places: ATLANTIS waterproofing services, POM-
PEII game machines,23 and SHANGRI-LA hotels.
Armed with this framework, we will see that the classical justifica-
tion for geographical indications is that they serve a special combina-
C. OTHER SOURCES OF ADVERTISING LAW 671
tion of (1) and (2): to communicate a product’s geographical source
and non-geographic qualities of the product that are related to its geo-
graphic origin. This is the idea of terroir: that the particular geography
produces particular product characteristics that cannot be imitated by
other regions. The idea of terroir undergirds the European Union
claim for stronger protection of geographical indications. This con-
cept helps justify the European Union’s demand, since 2004, for the
“return” of over forty words that have become generic names for food-
stuffs in other countries (e.g., Parmesan cheese, Champagne, Chablis,
Gorgonzola cheese, Parma ham, etc.). Although terroir and a claim
for a unique communications function for geographical indications
is the European Union’s public rhetoric, this Article concludes that
the European Commission has a simpler goal: control of geographic
words for their evocative value in the marketplace. The monopoly rents
available from exclusive control of this evocative value drive the EU
position in the debates over geographical indications.
Trade-Related Aspects of Intellectual Property (TRIPS), Uruguay
Round Agreement (1991)
1. Geographical indications are, for the purposes of this Agree- Art. 22
ment, indications which identify a good as originating in the Protection of Geographical Indications
territory of a Member, or a region or locality in that territory,
where a given quality, reputation or other characteristic of the
good is essentially a ributable to its geographical origin.
2. In respect of geographical indications, Members shall provide
the legal means for interested parties to prevent:
(a) the use of any means in the designation or presentation of
a good that indicates or suggests that the good in question
originates in a geographical area other than the true place
of origin in a manner which misleads the public as to the
geographical origin of the good;
(b) any use which constitutes an act of unfair competition
within the meaning of Article 10bis of the Paris Conven-
tion (1967) [i.e., “in the course of trade is liable to mis-
lead the public as to the nature, the manufacturing process,
the characteristics, the suitability for their purpose, or the
quantity, of the goods”]
3. A Member shall, ex officio if its legislation so permits or at the re-
quest of an interested party, refuse or invalidate the registration
of a trademark which contains or consists of a geographical in-
dication with respect to goods not originating in the territory in-
dicated, if use of the indication in the trademark for such goods
in that Member is of such a nature as to mislead the public as to
672 CHAPTER 7. ADVERTISING
the true place of origin.
Art. 23
1. Each Member shall provide the legal means for interested par-
Additional Protection for Geographical ties to prevent use of a geographical indication identifying
Indications for Wines and Spirits wines for wines not originating in the place indicated by the geo-
graphical indication in question or identifying spirits for spirits
not originating in the place indicated by the geographical indi-
cation in question, even where the true origin of the goods is
indicated or the geographical indication is used in translation
or accompanied by expressions such as “kind”, “type”, “style”,
“imitation” or the like.
2. The registration of a trademark for wines which contains or con-
sists of a geographical indication identifying wines or for spirits
which contains or consists of a geographical indication identify-
ing spirits shall be refused or invalidated, ex officio if a Member’s
legislation so permits or at the request of an interested party,
with respect to such wines or spirits not having this origin.
Art. 24
6. Nothing in this Section shall require a Member to apply its
International Negotiations, Exceptions provisions in respect of a geographical indication of any other
Member with respect to goods or services for which the relevant
indication is identical with the term customary in common lan-
guage as the common name for such goods or services in the
territory of that Member. …
Lanham Act
15 U.S.C. § 1052 [Lanham Act § 2]
No trademark … shall be refused registration on the principal register
Trademarks registrable on principal on account of its nature unless it—
register … (a) Consists of or comprises … a geographical indication which,
when used on or in connection with wines or spirits, identifies
a place other than the origin of the goods …
(e) Consists of a mark which … (2) when used on or in connection
with the goods of the applicant is primarily geographically de-
scriptive of them, except as indications of regional origin may
be registrable under section 1054 of this title [pertaining to col-
lective marks and certification marks], (3) when used on or in
connection with the goods of the applicant is primarily geo-
graphically deceptively misdescriptive of them, … .
C. OTHER SOURCES OF ADVERTISING LAW 673
Guantanamera Cigar Co. v. Corporacion Habanos
729 F. Supp. 2d 246 (D.D.C 2010)
This case comes before the Court on cross motions for summary judg-
ment filed by plaintiff Guantanamera Cigar Company’s (“GCC”) and
defendant Corporacion Habanos, S.A. (“Habanos”). Upon review-
ing the motions, the Court concludes that the Trademark Trial and
Appeal Board (“TTAB”) erred as a ma er of law in applying the
three-part test for primarily geographically deceptively misdescrip-
tive marks, which are barred from registration by the Lanham Act,
15 U.S.C. § 1052(e)(3). Therefore, the Court grants the plaintiff’s mo-
tion for summary judgment.
674 CHAPTER 7. ADVERTISING
I. F B
GCC is a small company based in Coral Gables, Florida. GCC man-
ufactures cigars in Honduras from non-Cuban seeds, then sells and
distributes them mainly in the Miami area, as well as other parts of
the United States. GCC filed a trademark application for the mark
GUANTANAMERA for use in connection with cigars on May, 14,
2001. When translated, “guantanamera” means “(i) the female adjec-
tival form of GUANTANAMO, meaning having to do with or belong-
ing to the city or province of Guantanamo, Cuba; and/or (ii) a woman
from the city or province of Guantanamo, Cuba.” Many people are
also familiar with the Cuban folk song, Guantanamera, which was
originally recorded in 1966.
Habanos, jointly owned by the Cuban government and a Spanish
entity, manufactures cigars. The Cuban embargo prohibits Habanos
from exporting cigars into the U.S. Habanos, however, owns trade-
GCC's GUANTANAMERA logo marks on many cigar brands outside the U.S., including registrations
or applications for GUANTANAMERA in more than 100 countries in
the world. On December 29, 1998, Habanos applied for the mark in
Cuba, and registered the mark on March 13, 2001. Habanos applied
for a U.S. Trademark on April 15, 2002, but its application remains
suspended because of GCC’s prior application.
Shortly after the TTAB published GCC’s application, Habanos
filed an opposition, which asserted that GUANTANAMERA was
primarily geographically deceptively misdescriptive, and therefore
barred from registration. The TTAB agreed and found that GUAN-
Habanos's GUANTANAMERA logo
TANAMERA was primarily geographically deceptively misdescrip-
tive and that Habanos had standing to oppose registration.
II. D
The TTAB improperly denied registration of GUANTANAMERA for
cigars because it used an incorrect legal standard. The TTAB must
deny registration of marks “which when used on or in connection
with the goods of the applicant is primarily geographically decep-
tively misdescriptive of them.” 15 U.S.C. § 1052(e)(3). A mark is “pri-
marily geographically deceptively misdescriptive” when:
(1) the primary significance of the mark is a generally
known geographic location, (2) the consuming public is
likely to believe the place identified by the mark indicates
the origin of the goods bearing the mark, when in fact the
goods do not come from that place, and (3) the misrepre-
sentation was a material factor in the consumer’s decision.
California Innovations: 329 F.3d 1334
(Fed. Cir. 2003) In re California Innovations, Inc.. The TTAB cited the proper legal stan-
dard, but erred in its application of the third part. The Court reviews
C. OTHER SOURCES OF ADVERTISING LAW 675
the three parts of the test—geographic location, goods-place associa-
tion, and materiality—as applied by the TTAB.
a. Geographic Location
There is significant evidence in the record to find that Cuba or Guan-
tanamo, Cuba is the primary significance of GUANTANAMERA.
The primary significance of a mark is a finding of fact. Guantanamera
literally means “girl from Guantanamo.” The Plaintiff argues that the
primary meaning of GUANTANAMERA is the famous Cuban song
by Joseito Fernandez. The TTAB recognized that the folk song’s his-
tory reinforces the geographic connection to Guantanamo and Cuba.
Based on the deferential standard of review, the Court finds that the
Plaintiff produced insufficient evidence to disturb the TTAB’s fac-
tual finding that GUANTANAMERA’s primary significance is a geo-
graphic location.
b. Goods-Place Association
There is sufficient evidence to find that the consuming public is likely
to believe that the Plaintiff’s cigars originate from Cuba. If consumers
are likely to believe that the place identified on the mark is the origin
of the goods, when in fact the goods do not come from that place,
the element is satisfied. See also In re Spirits International N.V. (leaving Spirits: 563 F.3d 1347 Fed. Cir. 2009)
the TTAB’s analysis of the goods-place association unaltered when
the TTAB found that Moscow was well known for vodka). The Fed-
eral Circuit characterized this element as a “relatively easy burden of
showing a naked goods-place association.”
The record contains ample evidence that cigar tobacco is pro-
duced in the Guantanamo province. There is also ample evidence
to support the finding that Cuba is well-known for cigars. The TTAB
did not err in finding that the goods-place association was met.
c. Materiality
The TTAB erred as a ma er of law in its analysis of materiality. To
establish a prima facie case, the TTAB or the opposition must show
that a significant portion of the relevant consumers would be materi-
ally influenced in the decision to purchase the product or service by
the geographic meaning of the mark. Accordingly, the Court holds
that Habanos never established a prima facie case for the third part
of the test before the TTAB.
In Spirits, the TTAB refused to register the mark MOSKOVSKAYA
for vodka because it was primarily geographically deceptively mis-
descriptive. MOSKOVSKAYA literally means “of or from Moscow,”
but the registrant admi ed that the vodka is not manufactured, pro-
duced, or sold in Moscow and has no connection to Moscow. The
TTAB found that the primary significance of the mark was a gen-
676 CHAPTER 7. ADVERTISING
erally known geographic location and recognized that Moscow is
renowned for vodka. Thus, the first two elements of the test were
satisfied. The Court took issue with the TTAB’s application of the
third element, the materiality requirement.
The TTAB reasoned that because 706,000 people in the United
States speak Russian, and because 706,000 is “an appreciable num-
ber,” the materiality requirement was satisfied. The Court remanded
the case without ruling on the merits because the TTAB failed to con-
sider whether Russia speakers were a “substantial portion” of the in-
tended audience. The Court noted that only 0.25% of the U.S. popu-
lation speaks Russian. To satisfy the materiality requirement, a sub-
stantial portion of relevant consumers must be likely to be deceived,
not an absolute number or particular segment (such as foreign lan-
guage speakers).
Here, the TTAB erred as a ma er of law in applying the materiality
requirement. The TTAB decided this case before the Federal Circuit
decided Spirits. The portion of the TTAB’s opinion that addressed
the materiality factor was only four sentences and did not make any
findings regarding a “substantial proportion” of materially deceived
consumers. The TTAB stated two reasons why the misrepresentation
is material in the minds of consumers: (1) Cuba’s “renown and repu-
tation for high quality cigars” and (2) the plaintiff’s subjective intent
to deceive customers evidenced by previously placing “Guantanam-
era, Cuba” and “Genuine Cuban Tobacco” on the packaging.
Spirits plainly demands more than a finding of Cuba’s reputation
for high quality cigars. In Spirits, Moscow’s renown reputation for
vodka was not enough to affirm the TTAB’s legal conclusion; likewise,
Cuba’s renown reputation for cigars is not enough in this case.
The Court finds the plaintiff’s false claims on the packaging
equally inadequate to satisfy Spirits. First, the registrant’s subjec-
tive intent provides li le, if any, insight into the minds of con-
sumers. Consumers could have numerous reasons as to why they
purchase Guantanamera cigars, but without any objective findings,
it is difficult to make an accurate conclusion as to whether the geo-
graphic misdescription will materially affect a “substantial portion”
of consumers. Second, the Court does not consider extraneous and
out-dated marketing material particularly relevant in determining a
mark’s ability to satisfy the § 1052(e)(3) registration bar. The Lan-
ham Act bars registration of marks that are primarily geographically
deceptively misdescriptive, not marks that are accompanied by de-
ceptive packaging material. See 15 U.S.C. § 1052.
Habanos a empts to distinguish Spirits by asserting that this case
meets the “substantial proportion” requirement. It argues that there
are millions of Spanish speakers in the U.S., that the English speaking
public recognizes “guantanamera” to mean Guantanamo, Cuba, and
C. OTHER SOURCES OF ADVERTISING LAW 677
that GCC targeted Spanish speaking consumers. Nevertheless, this
evidence fails to determine that a substantial proportion of the target
audience would be deceived into purchasing the cigars because of the
false goods-place association. Habanos never introduced evidence
that suggested material deception of a substantial proportion of the
relevant consuming public.
III. C
Therefore, this case is remanded to the TTAB so it may apply the
proper legal standard to the third part of the test for primarily ge-
ographically deceptively misdescriptive terms.
27 C.F.R. Part 5
Labeling and Advertising of Distilled Spirits
No person engaged in business as a distiller, rectifier, importer, 27 C.F.R. § 5.31(a)
wholesaler, or warehouseman and bo ler … shall sell or ship … any General
distilled spirits in bo les, unless such bo les are marked, branded,
labeled, or packaged, in conformity with §§ 5.31 through 5.42 [which
require, in pertinent part, that the ”class and type of distilled spirits
shall be stated in conformity with § 5.22 if defined therein”].
(b) Class 2; whisky. – “Whisky” is an alcoholic distillate from a fer- 27 C.F.R. § 5.22
mented mash of grain produced at less than 190° proof in such The standards of identity
manner that the distillate possesses the taste, aroma, and charac-
teristics generally a ributed to whisky, stored in oak containers
(except that corn whisky need not be so stored), and bo led at
not less than 80° proof …
(6) “Spirit whisky” is a mixture of neutral spirits and not less
than 5 percent on a proof gallon basis of whisky, or straight
whisky, or straight whisky and whisky, if the straight
whisky component is less than 20 percent on a proof gal-
lon basis.
(7) “Scotch whisky” is whisky which is a distinctive prod- Notice the tight interleaving of geo-
uct of Scotland, manufactured in Scotland in compliance graphic and nongeographic standards.
with the laws of the United Kingdom regulating the man-
ufacture of Scotch whisky for consumption in the United
Kingdom: Provided, That if such product is a mixture of
whiskies, such mixture is “blended Scotch whisky”
(d) Class 4; brandy. – …
(9) “Pisco” is grape brandy manufactured in Peru or Chile in
accordance with the laws and regulations of the country of
manufacture governing the manufacture of Pisco for con-
sumption in the country of manufacture.
678 CHAPTER 7. ADVERTISING
(k) Class 11; geographical designations. –
(1) Geographical names for distinctive types of distilled spir-
its (other than names found by the appropriate TTB offi-
cer under paragraph (k)(2) of this section to have become
generic) shall not be applied to distilled spirits produced
in any other place than the particular region indicated by
the name, unless (i) in direct conjunction with the name
there appears the word “type” or the word “American”
or some other adjective indicating the true place of pro-
duction, in le ering substantially as conspicuous as such
name, and (ii) the distilled spirits to which the name is
applied conform to the distilled spirits of that particular
region. The following are examples of distinctive types
of distilled spirits with geographical names that have not
become generic: Eau de Vie de Dan ig (Danziger Gold-
wasser), Ojen, Swedish punch.
(2) Only such geographical names for distilled spirits as the
appropriate TTB officer finds have by usage and common
knowledge lost their geographical significance to such ex-
tent that they have become generic shall be deemed to have
become generic. Examples at London dry gin, Geneva
(Hollands) gin.
(3) Geographical names that are not names for distinctive
types of distilled spirits, and that have not become generic,
shall not be applied to distilled spirits produced in any
other place than the particular place or region indicated
in the name. Examples are Armagnac, Greek brandy, , Ja-
maica rum, Puerto Rico rum, Demerara rum.
(l) Class 12; products without geographical designations but distinctive
of a particular place. –
(1) The whiskies of the types specified in paragraphs (b) (1),
(4), (5), and (6) of this section are distinctive products of the
United States and if produced in a foreign country shall
be designated by the applicable designation prescribed
in such paragraphs, together with the words “American
type” or the words “produced (distilled, blended) in __”,
the blank to be filled in with the name of the foreign coun-
Why is bourbon special? try: Provided, That the word “bourbon” shall not be used
to describe any whisky or whisky-based distilled spirits
not produced in the United States.
§ 70b Textile Products Identification Act
Misbranded and falsely advertised tex-
tile fiber products
C. OTHER SOURCES OF ADVERTISING LAW 679
(b) Except as otherwise provided in this subchapter, a textile fiber
product shall be misbranded if a stamp, tag, label, or other
means of identification, or substitute therefor authorized by sec-
tion 70c of this title, is not on or affixed to the product showing
in words and figures plainly legible, the following:
(1) The constituent fiber or combination of fibers in the tex-
tile fiber product, designating with equal prominence each
natural or manufactured fiber in the textile fiber product
by its generic name in the order of predominance by the
weight thereof if the weight of such fiber is 5 per centum
or more of the total fiber weight of the product, but nothing
in this section shall be construed as prohibiting the use of a
nondeceptive trademark in conjunction with a designated
generic name …
(2) The percentage of each fiber present, by weight, in the total
fiber content of the textile fiber product …
(3) The name of the manufacturer of the product …
(4) If it is an imported textile fiber product the name of the
country where processed or manufactured.
(5) If it is a textile fiber product processed or manufactured in
the United States, it be so identified.
Melting Bad Problem, Redux
Blancorp has come to you with a few more ideas for trademarks for
its clumpless ice-melter. The product is factory-made in the United
States (in Duluth, Minnesota, to be precise). Recall that it mimics the
properties of a naturally occurring rock salt from Quebec, Canada.
Give your opinion on the following names as trademarks:
• DULUTH
• HAWAIIAN
• ATLANTIS
• QUEBEC SALT
• CANADIAN BLUE
4 Regulation
In addition to the FTC’s (and state regulators’) general power to pre-
vent deceptive marketing, statutes and regulations sometimes give
authoritative meanings to particular terms. This raises two problems
of interest. First, when the legislative and executive branches have
said what a term means, how much room is there left for the judicial
branch to interpret it in a false advertising suit? And second, can the
680 CHAPTER 7. ADVERTISING
government say what words mean?
POM Wonderful LLC v. The Coca-Cola Company
134 S. Ct. 2228 (2014)
Coca-Cola, under its Minute Maid brand, created a juice blend con-
taining 99.4% apple and grape juices, 0.3% pomegranate juice, 0.2%
blueberry juice, and 0.1% raspberry juice. Despite the minuscule
amount of pomegranate and blueberry juices in the blend, the front la-
bel of the Coca-Cola product displays the words “pomegranate blue-
berry” in all capital le ers, on two separate lines. Below those words,
Coca-Cola placed the phrase “flavored blend of 5 juices” in much
smaller type. And below that phrase, in still smaller type, were the
words “from concentrate with added ingredients” — and, with a line
break before the final phrase — “and other natural flavors.” The prod-
uct’s front label also displays a vigne e of blueberries, grapes, and
raspberries in front of a halved pomegranate and a halved apple.
POM Wonderful LLC makes and sells pomegranate juice prod-
ucts, including a pomegranate-blueberry juice blend.
Alleging that the [Minute Maid] label is deceptive and misleading,
POM sued Coca-Cola under § 43 of the Lanham Act. That provision
allows one competitor to sue another if it alleges unfair competition
arising from false or misleading product descriptions. The Court of
Appeals for the Ninth Circuit held that, in the realm of labeling for
food and beverages, a Lanham Act claim like POM’s is precluded by a
second federal statute. The second statute is the Federal Food, Drug,
and Cosmetic Act (FDCA), which forbids the misbranding of food,
including by means of false or misleading labeling.
The FDCA statutory regime is designed primarily to protect the
health and safety of the public at large. The FDCA prohibits the mis-
branding of food and drink. A food or drink is deemed misbranded if,
inter alia, “its labeling is false or misleading,”, information required
to appear on its label “is not prominently placed thereon,” , or a label
does not bear “the common or usual name of the food, if any there
be,”. To implement these provisions, the Food and Drug Adminis-
tration (FDA) promulgated regulations regarding food and beverage
Minute Maid "Pomegranate Blueberry" labeling, including the labeling of mixes of different types of juice into
bottle one juice blend. . One provision of those regulations is particularly
21 U.S.C. §§ 331, 343 relevant to this case: If a juice blend does not name all the juices it con-
21 U.S.C. § 343(a) tains and mentions only juices that are not predominant in the blend,
21 U.S.C § 343(f ) then it must either declare the percentage content of the named juice
21 U.S.C. § 343(i) or “[i]ndicate that the named juice is present as a flavor or flavoring,”
See 21 C.F.R. § 102.33 e.g., “raspberry and cranberry flavored juice drink.”
Unlike the Lanham Act, which relies in substantial part for its en-
forcement on private suits brought by injured competitors, the FDCA
and its regulations provide the United States with nearly exclusive
enforcement authority, including the authority to seek criminal sanc-
C. OTHER SOURCES OF ADVERTISING LAW 681
tions in some circumstances. Private parties may not bring enforce-
ment suits.
Beginning with the text of the two statutes, it must be observed
that neither the Lanham Act nor the FDCA, in express terms, forbids
or limits Lanham Act claims challenging labels that are regulated by
the FDCA.
The structures of the FDCA and the Lanham Act reinforce the con-
clusion drawn from the text.The Lanham Act and the FDCA comple-
ment each other in major respects, for each has its own scope and pur-
pose. Although both statutes touch on food and beverage labeling,
the Lanham Act protects commercial interests against unfair compe-
tition, while the FDCA protects public health and safety. The two
statutes impose different requirements and protections.
The two statutes complement each other with respect to remedies
in a more fundamental respect. Enforcement of the FDCA and the de-
tailed prescriptions of its implementing regulations is largely commit-
ted to the FDA. The FDA, however, does not have the same perspec-
tive or expertise in assessing market dynamics that day-to-day com-
petitors possess. Competitors who manufacture or distribute prod-
ucts have detailed knowledge regarding how consumers rely upon
certain sales and marketing strategies. Their awareness of unfair com-
petition practices may be far more immediate and accurate than that
of agency rulemakers and regulators. Lanham Act suits draw upon
this market expertise by empowering private parties to sue competi-
tors to protect their interests on a case-by-case basis. By serving a
distinct compensatory function that may motivate injured persons to
come forward, Lanham Act suits, to the extent they touch on the same
subject ma er as the FDCA, provide incentives for manufacturers to
behave well. Allowing Lanham Act suits takes advantage of syner-
gies among multiple methods of regulation. This is quite consistent
with the congressional design to enact two different statutes, each
with its own mechanisms to enhance the protection of competitors
and consumers.
A holding that the FDCA precludes Lanham Act claims challeng-
ing food and beverage labels would not only ignore the distinct func-
tional aspects of the FDCA and the Lanham Act but also would lead
to a result that Congress likely did not intend. Unlike other types
of labels regulated by the FDA, such as drug labels, it would appear
the FDA does not preapprove food and beverage labels under its reg-
ulations and instead relies on enforcement actions, warning le ers,
and other measures. Because the FDA acknowledges that it does not
necessarily pursue enforcement measures regarding all objectionable
labels, if Lanham Act claims were to be precluded then commercial
interests – and indirectly the public at large – could be left with less
effective protection in the food and beverage labeling realm than in
682 CHAPTER 7. ADVERTISING
many other, less regulated industries. It is unlikely that Congress in-
tended the FDCA’s protection of health and safety to result in less
policing of misleading food and beverage labels than in competitive
markets for other products.
Rebecca Tushnet
41 Loy. L.A. L. Rev. 227 (2007)
It Depends on What the Meaning of "False" is: Falsity and Misleadingness
in Commercial Speech Doctrine
A key issue in advertising law is whether regulation of deception
can be wholesale or retail. California has a particularly restrictive
law that bars labeling products as “Made in U.S.A.” unless the over-
all product and the parts are substantially made in the U.S. In a re-
cent case, a California appeals court sustained this law against a First
Benson v. Kwikset Corp., 62 Cal. Rptr. 3d Amendment challenge. The court ruled that the legislature could
284 (Ct. App. 2007). determine that, as a general ma er, merchandise not meeting the
statute’s restrictive definition would be deceptively labeled if adver-
tised as “Made in U.S.A.” Thus, though the plaintiff had to meet
standing requirements showing that he’d been harmed by the mis-
representation, he could rely on the statutory definition to establish
that the defendants violated the law by using “Made in U.S.A.” and
“All American-Made” on products using Taiwanese- made screws
and parts sub-assembled in Mexico.
To the extent that the law is directed at consumer protection, cal-
ibrating it to promote domestic production will be extremely diffi-
cult. Producers who could use “Made in U.S.A.” if their products
had 40 percent or even 10 percent U.S. content might also keep some
jobs in the U.S. that would otherwise go overseas. Yet if consumers
expect “Made in U.S.A.” products to be made entirely or almost en-
tirely of U.S.-made parts, then a label that incentivizes producers to
keep some jobs in the U.S. might still be deceptive. Because regula-
tions on the advertising use of particular terms often aim both to pro-
tect consumers from deception and to encourage producers to make
products with certain components, this problem is a recurrent one.
If, however, legislatures choose definitions that protect consumer ex-
pectations, the fact that regulations might not be efficient is not a free
speech argument against them. The First Amendment is not indus-
trial policy.
Piazza's Seafood World: 448 F.3d 744, By contrast to the California appeal court’s deference to legisla-
753 (5th Cir. 2006) tive judgment, a recent Fifth Circuit case, Piazza’s Seafood World, LLC
The statute made it a crime to "adver- v. Odom decided that it was not inherently misleading to label Chi-
tise, sell, offer or expose for sale, or dis- nese catfish “Cajun.” The Fifth Circuit affirmed the district court’s
tribute food or food products as ‘Ca-
finding that Louisiana’s Cajun Statute was an unconstitutional reg-
jun’, ‘Louisiana Creole’, or any derivative
thereof unless the food or food product
ulation of commercial speech. As a result, a seafood importer was
... [was] produced, processed, or manu- free to use “Cajun” as a trademark for its catfish, even though they
factured in Louisiana. are from China, not Louisiana, and even though they are actually of
C. OTHER SOURCES OF ADVERTISING LAW 683
a different species than the domestic fish known as catfish. Despite
the widespread success of the proposition that fixing the meaning of
geographical indications protects and informs consumers, the Fifth
Circuit did not give any weight to the Louisiana legislature’s specific
judgment about the meaning of “Cajun.”
The Cajun case’s refusal to accept blanket bans on terms is in ten-
sion with the “Made in U.S.A.” decision, which accepted a legisla-
tive determination that “Made in U.S.A.” and similar terms would
invariably be misleading unless used according to the statutory def-
inition. Similarly, the Supreme Court, in San Francisco Arts & Ath-
letics accepted that “Congress reasonably could conclude that most
commercial uses of the Olympic words and symbols are likely to
be confusing,” which justified upholding a special law giving com-
plete control over commercial uses of the term “Olympic” to the U.S.
Olympic Commi ee, regardless of whether confusion or other harm
was shown in a particular case.
These categorical determinations of misleadingness are far from
isolated incidents. Regulation-by-definition is common, and requires
lawmakers to endorse one meaning at the expense of others. Con-
sider moral and environmental claims such as “dolphin-free tuna”:
one possible definition of dolphin-free tuna is tuna caught in a net
that didn’t happen to kill any dolphins. If the net brings up a dolphin,
you throw out the whole catch. This understanding of “dolphin-free
tuna” doesn’t address the fundamental objection that the method of
catching the tuna routinely and predictably kills a lot of dolphins.
However, it remains the case that the cans of tuna don’t have any dol-
phins in them and did not even need to have dead dolphins picked
out of them. Because of likely audience understanding, tuna caught
this way is not “dolphin-free.” In order to end semantic disputes,
Congress passed a law defining dolphin- free tuna. The Dolphin Protection Consumer In-
There has also been substantial debate over the proper definition formation Act, 16 U.S.C. § 1385(d)
of “organic,” an official definition of which has now been adopted by
the United States Department of Agriculture (“USDA”). Historically, Organic Production and Handling Re-
organic foods faced market difficulties because of a proliferation of quirements, 7 C.F.R. §§ 205.200–.299
(2007)
standards, which led to consumer suspicion that the organic label
was meaningless. Currently, products not meeting USDA standards, Arguably, this is the case with "natural"
but meeting some other definition of “organic,” cannot be labeled claims.
organic. Organic products must have at least 95 percent organic con-
tent, but the remainder can be non-organic if it is on an approved list
of ingredients without reasonably available organic substitutes. That
list is itself controversial, since interested parties dispute whether or
not various ingredients are available in organic form. In addition,
“made with organic” is a separate standard, requiring at least percent
organic content.
The issue of consumer response to standard-se ing is worth fur-
684 CHAPTER 7. ADVERTISING
ther discussion to show just how hard the problem is. By se ing
a standard, the government establishes what “organic” means. If
people misunderstand the term – in other words, if they continue
to give a different meaning to it – there is an information problem
that leads to inefficient results. If people do not understand the term
but nonetheless rely on it, then a key question is whether the govern-
ment has go en the social policy producing the underlying definition
right. Moreover, the correctness of the government’s definition has
to be compared to the situation without regulation, in which produc-
ers could give the term multiple meanings as long as they were not
intentionally fraudulent. If consumers still relied on the term with-
out understanding it or understanding that different producers were
using different definitions, the welfare effects would change, but not
obviously in any particular direction. To this must be added the like-
lihood that consumers would discount the term “organic” if they be-
lieved it to be self-defined, moderating both the harms and benefits
of varying definitions. Only if consumers carefully research multi-
ple meanings of unregulated terms – and only if they do this again
and again, for each term that makes a difference to them – can we ex-
pect the unregulated market to beat the government systematically
in shaping meaning.
Labels can also function as warnings, even without explicit eval-
uative statements. Dairy producers who use recombinant bovine
growth hormone (“rBST”, also known as “rBGH”) convinced the Sec-
ond Circuit to strike down a rBST labeling requirement for milk that,
Int’l Dairy Foods Ass’n v. Amestoy, 92 they argued, functioned as a scarlet le er. Labeling may encourage
F.3d 67 (2d Cir. 1996) otherwise uninterested consumers to think, mistakenly, that rBST in-
volves health risks—they may reason that there would be no label
if it didn’t make a difference. Thus, Monsanto, the major producer
of rBST, resisted labeling and also brought false advertising claims
against smaller dairies with non-treated cows who voluntarily la-
beled their own milk. In addition, Monsanto recently asked the Food
and Drug Administration (“FDA”) to act against other voluntary la-
beling. “Not treated with rBST” is a factual statement, but its truth
or falsity is not the key question. The dispute is over whether the im-
plications of “not treated with rBST” mislead consumers and distort
their purchases.
Commack Self-Service Kosher Meats, Inc. v. Weiss
294 F.3d 415 (2d Cir. 2002)
Plaintiffs-appellees are Commack Self-Service Kosher Meats, Inc.,
d/b/a Commack Kosher, an entity in Commack, Long Island engaged
in the meat business, and its owners, Brian and Jeffrey Yarmeisch.
Over the last sixteen years, the Yarmeisches have been cited for viola-
tions of New York’s kosher fraud laws on at least four occasions.
[For example,] the Department of Agriculture and Markets in-
C. OTHER SOURCES OF ADVERTISING LAW 685
spected Commack Kosher on January 7, 1987, and seized two pack-
ages of beef chuck side steaks, each of which was marked ”soaked
and salted.” The Department’s ”laboratory analysis did not reveal Leviticus 7:26 prohibits eating blood.
a significantly greater salt content in the outside surface of the steak Rabbinical authorities generally hold
that implementing this commandment
than in the inside.” The Department asserted that ”had the steak been
requires deveining meat, soaking it in
properly soaked and salted, the analysis would have indicated that water, salting it to draw out the blood,
the outside surface of the steak had a measurably higher salt content and then rinsing it.
than the inner part of the meat.” The Department therefore concluded
that ”the defendant’s steak was not soaked and salted according to or-
thodox Hebrew religious requirements and was improperly offered
for sale and represented as such.” Accordingly, the Department al- Cf. State v. Rachleff Kosher Provi-
leged violations of New York Agriculture and Markets Law section sions, Inc., 188 A.D.2d 458 (N.Y. App.
Div. 1992) (defendant "purchased
201-a(1), which prohibits the sale of any food product represented to
nonkosher meat which he processed,
be ”kosher” that has not been prepared ”in accordance with the or- packaged, and sold as kosher"); Bargh-
thodox Hebrew religious requirements. The Yarmeisches responded out v. Bureau of Kosher Meat and Food
to the claimed violations in a le er dated April 29, 1987, which con- Control, 66 F.3d 1337 (4th Cir. 1995) (de-
tained the following explanation of their soaking and salting method: fendant repeatedly "placed kosher hot
dogs on a rotisserie next to nonkosher
We take the side steak with the top and bo om fat left on hot dogs," which "allowed grease from
the meat and soak it in water for one half hour, salt for the nonkosher meat to contaminate
the kosher hot dogs, rendering them
one hour, and then rinse thoroughly. We then proceed to
nonkosher").
remove the fat and then face the meat (remove dark meat
before packaging).
This is the procedure for all meat that is labeled soaked
and salted, all of which is done under the direction of
Rabbi Berman who has been supervising this establish-
ment for approximately five years.
Rabbi Berman is a rabbi who adheres to the teachings of the Conserva-
tive branch of Judaism. The Yarmeisches’ le er further explained that
they believed their procedures for soaking and salting were in accor-
dance with kosher requirements and requested that the Department
”explain how [any problem with their procedures] can be rectified.”
The Yarmeisches claimed that by defining ”kosher” to mean food
that is ”prepared in accordance with orthodox Hebrew religious re-
quirements,” New York’s kosher fraud laws violate the Establish-
ment Clause. In cases involving facial challenges on Establishment
Clause grounds, we assess the constitutionality of an enactment by
reference to the three factors first articulated in Lemon v. Kur man: Lemon: 403 U.S. 602 (1971)
that a challenged law (1) have a valid secular purpose; (2) have a pri-
mary effect that neither advances nor inhibits religion; and (3) not
foster excessive state entanglement with religion.
It appears to us that the challenged laws excessively entangle gov-
ernment and religion because they (1) take sides in a religious ma er,
effectively discriminating in favor of the Orthodox Hebrew view of
dietary requirements; (2) require the State to take an official position
686 CHAPTER 7. ADVERTISING
on religious doctrine; and (3) create an impermissible fusion of gov-
ernmental and religious functions by delegating civic authority to in-
dividuals apparently chosen according to religious criteria.
The Department argues that the challenged laws do not exces-
sively entangle the government with religion because ”no one dis-
putes the meaning of the term ‘kosher.’” There is ample evidence
in the record to support the opposite conclusion. In a guide to ob-
servance of Jewish dietary law, published by the United Synagogue
Commission on Jewish Education, author Samuel H. Dresner notes
that
Over the years and in varying locales, rabbinic authorities
differed in their interpretations of specific laws of kashrut.
To cite a famous example: Sephardic Jews eat rice and
legumes on Passover, Ashkenazic Jews do not. Ashke-
nazic Jews, by and large, do not eat the hindquarters of
beef; Sephardic Jews do.
Some of the decisions recorded in this book are not ac-
cepted by all authorities on Jewish law, notably decisions
about wine, cheese, gelatin, swordfish and sturgeon. This
is not a novel situation in the history of Jewish law. There
have always been disagreements on various points.
Samuel H. Dresner, The Jewish Dietary Laws 55-56 (1982).
We find it indisputable that there are differences of opinion within
Judaism regarding the dietary requirements of kashrut. As a result,
because the challenged laws interpret ”kosher” as synonymous with
the views of one branch, those of Orthodox Judaism, the State has
effectively aligned itself with one side of an internal debate within
Judaism. This it may not do.
In order to assert that a food article does not conform to kosher
requirements, New York must take an official position as to what are
the kosher requirements. In doing so, the Department must either
interpret religious doctrine or defer to the interpretations of religious
officials in reaching its official position.
We also find that the challenged laws fail the second prong of the
Lemon test, which mandates that, to avoid conflict with the Establish-
ment Clause, a principal or primary effect of a challenged law must
neither advance nor inhibit religion. The challenged laws violate this
prohibition because they (1) have a primary effect that both advances
religion, by preferring the dietary restrictions of Orthodox Judaism
over those of other branches, and inhibits religion, by effectively pro-
hibiting other branches from using the kosher label in accordance
with their religious beliefs, and (2) create an impermissible joint exer-
cise of religious and civic authority that advances religion. We reach
this conclusion for reasons similar to those that demonstrate exces-
C. OTHER SOURCES OF ADVERTISING LAW 687
sive entanglement of government and religion.
Finally, because the secular purpose prong of the Lemon test is of-
ten easily satisfied, and is uncontested by the parties here, we address
it last. The parties here do not dispute that the challenged laws were
enacted for the secular purpose of protecting consumers from fraud
in the kosher food market.
We agree with the New Jersey Supreme Court that a state has ”a
valid interest in preventing fraud in the sale of any foods, including
kosher foods.” Ran-Dav’s County Kosher, Inc. v. State. This interest in Ran-Dav's: 608 A.2d 1353 (N.J. 1992)
protecting against fraud in the kosher food market extends to the gen-
eral public. Indeed, Jewish consumers reportedly now make up less
than thirty percent of the consumers of kosher food. The remainder In Commack Self-Service Kosher Meats,
are Muslims and others with similar religious requirements, persons Inc. v. Hooker, 680 F.3d 194 (2d Cir.
2012), the court rejected an Establish-
with special dietary restrictions, and those who simply prefer food
ment Clause challenge by the same
bearing the kosher label as a symbol of purity. The State clearly has plaintiffs against New York's revised
a valid secular interest in protecting from fraud all those who choose kosher certification laws, which require
to consume kosher food products. We do note, however, that the that anyone marketing food as kosher
challenged laws imperfectly accomplish this secular purpose because identify the individuals certifying the
food as kosher. Certifiers must regis-
their avowed purpose is amply covered by the existing general fraud
ter with the Department and provide
laws. For example, section 199-a(1) prohibits any misbranding of "a statement of such person's qualifica-
food, and therefore would penalize vendors who falsely represented tions for providing such certification."
their products to be kosher according to the standard described on A casual perusal of the statements on
the label. In other words, under the general statutory scheme gov- file at the Department's website shows
that most of them run to one or some-
erning fraud in the food industry, the State can prevent fraud in the times two sentences; they commonly
sale of kosher food in a less restrictive and neutral manner by simply mention the certifier's rabbinical ordi-
requiring that any vendor engaged in the sale of kosher food state nation, years of experience performing
the basis on which the food is labeled kosher. Thus, the valid secular kosher inspections, and occasionally a
purpose articulated by the State can be accomplished by nondiscrim- bit about the standards applied.
inatory means that do not advance religion. Cf. Wallace v. ConAgra Foods, Inc., 920
F. Supp. 2d 995 (D. Minn. 2013),
rev'd on other grounds, 747 F.3d 1025
Levy v. Kosher Overseers Ass'n of America, Inc. (8th Cir. 2014) (dismissing on Estab-
Kosher certification marks are used to designate food items that com- lishment Clause grounds a consumer
class action under state consumer pro-
ply with Judaism’s strict dietary laws. A kosher certification mark
tection laws against Hebrew National
informs the consumer that a certification agency has examined the for calling its hot dogs "100% Kosher"
manufacturing process, the ingredients, and the cleanliness of the when it allegedly used quotas for how
production facilities of a product to insure that the product is kosher. much beef would be certified as kosher,
Because the various kosher certification agencies employ their own regardless of the cows' status as clean
or unclean).
standards for accepting products as kosher, according to their partic-
ular interpretation of Judaism’s dietary requirements, it is important 104 F.3d 38 (2d Cir. 1997)
for a consumer to recognize the marks of the certification agencies
688 CHAPTER 7. ADVERTISING
that he trusts.
5 Mandatory Disclosures
Regulations sometimes tell companies what they must say, rather
than what they must not say.
American Meat Institute v. Dept. of Agriculture
760 F.3d 18 (D.C. Cir. 2014) (en banc)
Congress has required country-of-origin labels on a variety of foods,
7 U.S.C. §§ 1638, 1638a including some meat products and tasked the Secretary of Agricul-
ture with implementation. [Yadda yadda yadda.] The Secretary re-
sponded with a rule in 2013 requiring more precise information —
revealing the location of each production step. For example, meat
derived from an animal born in Canada and raised and slaughtered
in the United States, which formerly could have been labeled ”Prod-
uct of the United States and Canada,” would now have to be labeled
”Born in Canada, Raised and Slaughtered in the United States.”
The plaintiffs, a group of trade associations representing livestock
producers, feedlot operators, and meat packers, whom we’ll collec-
tively call American Meat Institute (”AMI”), challenged the 2013 rule
in district court as a violation of both the statute and the First Amend-
ment. AMI argues that the 2013 rule violates its First Amendment
right to freedom of speech by requiring it to disclose country-of-
origin information to retailers, who will ultimately provide the in-
formation to consumers.
Zauderer: 471 U.S. 626 (1985) The starting point common to both parties is that Zauderer v. Office
of Disciplinary Counsel of Supreme Court of Ohio applies to government
mandates requiring disclosure of ”purely factual and uncontrover-
sial information” appropriate to prevent deception in the regulated
party’s commercial speech. The key question for us is whether the
principles articulated in Zauderer apply more broadly to factual and
uncontroversial disclosures required to serve other government inter-
ests. [The court held that it does.] All told, Zauderer’s characterization
of the speaker’s interest in opposing forced disclosure of such infor-
mation as ”minimal” seems inherently applicable beyond the prob-
lem of deception.
In applying Zauderer, we first must assess the adequacy of the in-
terest motivating the country-of-origin labeling scheme. AMI argues
that, even assuming Zauderer applies here, the government has ut-
terly failed to show an adequate interest in making country-of-origin
information available to consumers. AMI disparages the govern-
C. OTHER SOURCES OF ADVERTISING LAW 689
ment’s interest as simply being that of satisfying consumers’ ”idle
curiosity.” But here we think several aspects of the government’s in-
terest in country-of-origin labeling for food combine to make the in-
terest substantial: the context and long history of country-of-origin
disclosures to enable consumers to choose American-made products;
the demonstrated consumer interest in extending country-of-origin
labeling to food products; and the individual health concerns and
market impacts that can arise in the event of a food-borne illness out-
break.
Supporting members of Congress identified the statute’s purpose
as enabling customers to make informed choices based on characteris-
tics of the products they wished to purchase, including United States
supervision of the entire production process for health and hygiene.
Some expressed a belief that with information about meat’s national
origin, many would choose American meat on the basis of a belief
that it would in truth be be er. Even though the production steps
abroad for food imported into the United States are to a degree sub-
ject to U.S. government monitoring, it seems reasonable for Congress
to anticipate that many consumers may prefer food that had been con-
tinuously under a particular government’s direct scrutiny.
Some legislators also expressed the belief that people would have
a special concern about the geographical origins of what they eat.
This is manifest in anecdotes appearing in the legislative record, such
as the collapse of the cantaloupe market when some imported can-
taloupes proved to be contaminated and consumers were unable to
determine whether the melons on the shelves had come from that
country. Of course the anecdote more broadly suggests the utility of
these disclosures in the event of any disease outbreak known to have
a specific country of origin, foreign or domestic.
The record is further bolstered by surveys the Agricultural Mar-
keting Service reviewed, such as one indicating that 71-73 percent of
consumers would be willing to pay for country-of-origin information
about their food. The AMS quite properly noted the vulnerabilities in
such data. Most obvious is the point that consumers tend to overstate
their willingness to pay; after all, the data sound possibly useful, and
giving a ”Yes” answer on the survey doesn’t cost a nickel. But such
studies, combined with the many favorable comments the agency re-
ceived during all of its rulemakings, reinforce the historical basis for
treating such information as valuable.
The self-evident tendency of a disclosure mandate to assure that
recipients get the mandated information may in part explain why,
where that is the goal, many such mandates have persisted for
decades without anyone questioning their constitutionality. In this
long-lived group have been not only country-of-origin labels but also
many other routine disclosure mandates about product a ributes, in-
690 CHAPTER 7. ADVERTISING
Fiber content: 16 C.F.R. pt. 303 cluding, for instance, disclosures of fiber content,, care instructions
Clothing care instructions: 16 C.F.R. pt. for clothing items, , and listing of ingredients .
423 AMI does not contest that country-of-origin labeling qualifies as
Ingredients: 21 C.F.R. § 101.4 factual, and the facts conveyed are directly informative of intrinsic
characteristics of the product AMI is selling. As to whether it is ”con-
troversial,” AMI objected to the word ”slaughter” in its reply brief.
Though it seems a plain, blunt word for a plain, blunt action, we can
understand a claim that ”slaughter,” used on a product of any ori-
gin, might convey a certain innuendo. But we need not address such
a claim because the 2013 rule allows retailers to use the term ”har-
vested” instead, and AMI has posed no objection to that. And AMI
does not disagree with the truth of the facts required to be disclosed,
so there is no claim that they are controversial in that sense.
We also do not understand country-of-origin labeling to be contro-
versial in the sense that it communicates a message that is controver-
sial for some reason other than dispute about simple factual accuracy.
Leaving aside the possibility that some required factual disclosures
could be so one-sided or incomplete that they would not qualify as
”factual and uncontroversial,” country-of-origin facts are not of that
type. AMI does not suggest anything controversial about the mes-
sage that its members are required to express.
National Ass'n of Mfrs. v. Securities and Exchange Commission [I]
748 F.3d 359 (D.C. Cir. 2014)
For the last fifteen years, the Democratic Republic of the Congo has
endured war and humanitarian catastrophe. Millions have perished,
mostly civilians who died of starvation and disease. Communities
have been displaced, rape is a weapon, and human rights violations
are widespread.
Armed groups fighting the war finance their operations by exploit-
ing the regional trade in several kinds of minerals. Those minerals—
gold, tantalum, tin, and tungsten1—are extracted from technologi-
cally primitive mining sites in the remote eastern Congo. They are
sold at regional trading houses, smelted nearby or abroad, and ulti-
mately used to manufacture many different products. Armed groups
profit by extorting, and in some cases directly managing, the mini-
mally regulated mining operations.
In 2010, Congress devised a response to the Congo war. Section
1502 of the Dodd–Frank Wall Street Reform and Consumer Protec-
15 U.S.C. §§ 78m(p), 78m note tion Act,, requires the Securities and Exchange Commission – the
agency normally charged with policing America’s financial markets
– to issue regulations requiring firms using “conflict minerals” to in-
vestigate and disclose the origin of those minerals. [Securities issuers
must state in reports to the SEC and on their websites which of their
products have “not been found to be ‘DRC conflict free.’”]
[The panel struck down the rule as constituting compelled speech.
C. OTHER SOURCES OF ADVERTISING LAW 691
Then American Meat Institute overruled NAM I. The panel issued the
following opinion on rehearing.]
National Ass'n of Mfrs. v. Securities and Exchange Commission [II]
800 F.3d 518 (D.C. Cir. 2015)
”Unncontroversial,” as a legal test, must mean something different
than “purely factual.” Perhaps the distinction is between fact and
opinion. But that line is often blurred, and it is far from clear that
all opinions are controversial. Is Einstein’s General Theory of Rela-
tivity fact or opinion, and should it be regarded as controversial? If
the government required labels on all internal combustion engines
stating that “USE OF THIS PRODUCT CONTRIBUTES TO GLOBAL
WARMING” would that be fact or opinion? It is easy to convert many
statements of opinion into assertions of fact simply by removing the
words “in my opinion” or removing “in the opinion of many scien-
tists” or removing “in the opinion of many experts.”
We agree with NAM that the statutory definition of “conflict free”
cannot save this law. As NAM forcefully puts it, “if the law were oth-
erwise, there would be no end to the government’s ability to skew
public debate by forcing companies to use the government’s pre-
ferred language. For instance, companies could be compelled to state
that their products are not ‘environmentally sustainable’ or ‘fair trade’
if the government provided ‘factual’ definitions of those slogans—
even if the companies vehemently disagreed that their [products]
were ‘unsustainable’ or ‘unfair.’ ”
In our initial opinion we stated that the description at issue –
whether a product is “conflict free” or “not conflict free” – was hardly
“factual and non-ideological.” We put it this way:
Products and minerals do not fight conflicts. The label
”[not] conflict free” is a metaphor that conveys moral re-
sponsibility for the Congo war. It requires an issuer to
tell consumers that its products are ethically tainted, even
if they only indirectly finance armed groups. An issuer,
including an issuer who condemns the atrocities of the
Congo war in the strongest terms, may disagree with that
assessment of its moral responsibility. And it may convey
that message through silence. By compelling an issuer to
confess blood on its hands, the statute interferes with that
exercise of the freedom of speech under the First Amend-
ment.
We see no reason to change our analysis in this respect. And we con-
tinue to agree with NAM that “requiring a company to publicly con-
demn itself is undoubtedly a more ‘effective’ way for the government
to stigmatize and shape behavior than for the government to have to
convey its views itself, but that makes the requirement more consti-
692 CHAPTER 7. ADVERTISING
tutionally offensive, not less so.”
6 Self-Regulation
The National Advertising Division of the Advertising Self-Regulatory
Council runs an ADR system, based entirely on wri en filings and
with decisions within 60 days. Participation is voluntary, and the
NAD takes no enforcement actions by itself. Given its subject-ma er
expertise, the FTC tends to accord the NAD’s decisions substantial
deference, even though they are not by themselves binding. Another
arm of the ASRC, the Children’s Advertising Review Unit, operates
a similar program under standards that are ”deliberately subjective,
going beyond the issues of truthfulness and accuracy to take into ac-
count the uniquely impressionable and vulnerable child audience.”
Mead Johnson Nutritionals (Enfamil LIPIL)
Case No. 4822CIII (Feb. 12, 2009)
This is the third compliance report stemming from a challenge in
which print, packaging and point of sale advertising claims made
by Mead Johnson Nutritionals for its Enfamil LIPIL infant formula
were challenged by Abbo Nutrition, a manufacturer of a competing
infant formula. The following claims were representative are repre-
sentative of those at issue: “Enfamil® LIPIL® is the only infant for-
mula shown in independent clinical studies to improve baby’s brain
and eye development.* [*vs. same routine formula without DHA and
ARA. Studied to 18 months.]”; “Enfamil LIPIL* improves mental de-
velopment by 7 points vs. same formula without LIPIL [† vs. same
routine formula without LIPIL. Studied at 18 months for brain and
12 months for eye. Longer term impact not measured.]”; “shown in
independent clinical studies to improve baby’s brain and eye devel-
opment” versus unsupplemented Enfamil.”
B
In its underlying decision, NAD recommended that the advertiser
either discontinue its “improve brain and eye development” claims—
or modify them by making clear that (a) the advertised improve-
ments are limited to only the first 18 months of an infant’s life; and
(b) the touted “improve[ment]” is with respect to a discontinued, or
prior, version of the product. With respect to the consumer-directed
coupon featuring a comparison to breastfed babies, NAD recom-
mended that the advertiser either discontinue the advertising, or
modify it by making clear that the advertised improvement is not
shown at four years, and that the comparison is with respect to the
now-discontinued Enfamil product. NAD further recommended that
the advertiser make clear that Enfamil Lipil has not been shown to
outperform Similac Advance with respect to mental and/or visual de-
C. OTHER SOURCES OF ADVERTISING LAW 693
velopment. With respect to the consumer-directed coupon that fea-
tures a chart that invites consumers to “compare the differences” be-
tween Enfamil Lipil and Similac Advance, NAD recommended that
the advertiser either discontinue this comparative advertisement, or
modify it by removing the comparison to Similac Advance.
With respect to the advertiser’s compositional comparison to me-
dian levels of DHA and ARA in breast milk, NAD determined that
there was no basis for it to examine this claim anew. With respect
to the health-care provider-directed claims, NAD recommended that
the advertiser discontinue side-by-side IQ graphs, and modify the
materials to ensure that they no longer convey the unsupported mes-
sage that Enfamil Lipil outperforms Similac with respect to the for-
mulas’ effects on IQ. NAD further recommended that the advertiser
discontinue any express or implied claims that based on the four-
year data, Enfamil Lipil makes a “difference” (as compared to un-
supplemented Enfamil.) Likewise, NAD recommended that the ad-
vertiser no longer claim that “new 4-year follow-up data” shows an
“impact” of Enfamil Lipil on cognitive development. NAD did find,
however, that the advertiser had a reasonable basis to claim a similar
performance to breastfed babies at four years. Finally, NAD noted
that nothing in this decision prevents the advertiser from presenting
health care professionals with clinical results from the Birch four-year
data, provided that it is done in an accurate and non-misleading man-
ner.
In June 2008, the challenger contacted the NAD to raise concerns
about advertising which it believed did not comply with NAD’s un-
derlying decision. The advertiser explained that all of the website
materials submi ed by the challenger were printed prior to NAD’s
decision and that it had already begun modifying this page prior to
the receipt of the challenger’s compliance inquiry. The advertiser no-
tified NAD that the claim, as revised, would now read: “The only in-
fant formula clinically shown to promote baby’s brain and eye devel-
opment*” “(*Versus prior formulation of same product without DHA
and ARA, with improvement demonstrated to 18 months.”) The ad-
vertiser further noted that it is in the process of comprehensively re-
viewing its entire website to ensure all relevant language has been
modified and that all new materials would comply with NAD’s de-
cision. Based on the advertiser’s assurances, NAD closed its compli-
ance review.
In November 2008, the challenger again contacted NAD about
concerns it had about advertising it alleged to be noncompliant with
NAD’s decision. The advertiser informed NAD that the professional
advertisement in question was distributed in error and will no longer
be disseminated. The advertiser noted that it has taken substantial
steps to comply with NAD’s decision. While expressing its deep dis-
694 CHAPTER 7. ADVERTISING
appointment that noncompliant advertising had continued to be dis-
seminated, NAD noted that the current advertisements comply with
NAD’s recommendations but cautioned that any noncompliant ad-
vertisements that are brought to its a ention after the issuance of the
instant decision will result in an automatic referral to the appropriate
government agency for possible law enforcement action pursuant to
section 4.1(B) of the NAD/NARB Procedures.
In February 2009, the challenger contacted NAD with concerns
it had about advertising for Enfamil LIPIL which it believed contra-
vened NAD’s decision.
D
NAD is incredulous that after two compliance proceedings, with the
second compliance proceeding making explicit that any noncompli-
ant advertising would result in a referral to the appropriate govern-
ment agency, that the advertiser would disseminate advertising that
clearly does not comply with NAD’s decision. For example, in its
underlying decision, NAD noted that with respect to the consumer-
directed coupon that features a chart that invites consumers to “com-
pare the differences” between Enfamil LIPIL and Similac Advance,
NAD recommended that the advertiser either discontinue this com-
parative advertisement or modify it by removing the comparison to
Similac Advance. In one of the current advertisements, the adver-
tiser features the claim “Enfamil LIPIL is now clinically shown to sup-
port cognitive development* and immune balance†” next to which is
a chart with one column for Similac Advance and one for Enfamil
LIPIL and has a check mark for Enfamil Lipil and “NO” for Simi-
lac for, among other things, “Only Enfamil LIPIL has been shown in
published independent clinical studies to improve BRAIN and EYE
development*” The faint asterisks refer to a inconspicuous disclosure
to the left of the claim and chart which states “vs. the prior version of
the product without DHA and ARA with improvement shown to 18
months.” This advertisement does not comply with NAD’s decision,
and NAD need look no further to determine noncompliance. The self-
regulatory process cannot function properly when advertisers state,
on the one hand, that they respect the process and will comply with
NAD’s decision, and then do the opposite. Accordingly, NAD has no
choice but to refer this ma er to the appropriate government agency
for possible law enforcement action pursuant to section 4.1(B) of the
NAD/NARB Procedures.
C. OTHER SOURCES OF ADVERTISING LAW 695
CARU Press Release May 29, 2007
The Children’s Advertising Review Unit (CARU) of the Council of
Be er Business Bureaus, Inc., has recommended that Lego Systems
Inc., maker of the Lego Racers: Crash Collection line of playsets, mod-
ify advertising to make it clear to the child audience that the toys sold
do not make sounds.
Broadcast advertising for Lego Racers: Crash Collection came
to the a ention of CARU, the children’s advertising industry’s self-
regulatory forum, through CARU’s ongoing monitoring efforts.
Commercials for the playsets feature two children playing with
LEGO pull-back motor racers. A voice-over states that the toys are
“built to crash.” When the cars hit each other, loud crashing noises
are heard and a voice-over screams “CRASH” in a long, drawn-out
manner while a bubble visual of the word “CRASH” appears on the
screen in large, cartoon-like le ers. The commercial features numer-
ous loud crash scenes, with the cars hi ing each other and various
other objects. On impact, in addition to the sounds synchronized
with the collision and the video and audio supers, special effects dra-
matize the cars breaking apart and pieces flying off in slow-motion.
CARU was concerned that the synchronization of the “crashing”
sound effects accompanying the colliding of the cars could poten-
tially mislead children into believing that the toys were equipped
with sound-effects equipment. CARU was also concerned that, be-
cause the toys do not have any sound capabilities, the commer-
cials would create unrealistic performance expectations that children Still from challenged Lego Racers ad
would not be able to duplicate.
In order to avoid potentially misleading the child audience,
696 CHAPTER 7. ADVERTISING
CARU recommended that the advertiser modify the commercial.
CARU further recommended that the advertiser include scenes of
real action play without special effects, which would serve to demon-
strate how much noise the toys do make.
The company, in its advertiser’s statement, said that it is a strong
supporter of CARU and “appreciates the opportunity to participate
in the self-regulatory process.”
“LSI will continue to remain sensitive to CARU’s concerns and do
its best to follow the Guidelines in future advertisements. LSI does
not plan to appeal this decision,” the company said.
7 Problems
Scavenger Hunt Problem
Find as many of the following as you can in the wild:
• An advertisement containing non-actionable puffery
• A literally false advertisement
• An advertisement that is not literally false but is misleading
• An establishment claim (bonus point if it is unsubstantiated)
• A registered certification mark
• A regulatory certification mark
• A deceptive trademark (not necessarily registered)
• A food label regulated by the FDA under the FDCA, together
with a citation to the specific section in the Code of Federal Regu-
lations that governs the label. Highlight the portion of the label
that is required by the regulation you cite.
• An endorsement on social media containing an advertising dis-
closure.
• An endorsement on social media not containing an advertising
disclosure, but which should have had one
• An advertisement directed at children that is misleading under
the standards applied by CARU
You are allowed one entry per category. All your submissions should
be examples you are comfortable having shown in class.
You get one point for each one you find on the Internet, and two
points for each one you find offline (submit a photo). You get a bonus
point for each of your entries that is unique, i.e., no one else in the
class submi ed it. Whoever gets the highest score will win bragging
rights and a prize of negligible value.
problems/fortunetelling
8
Personality Rights
One body of intellectual property law – the right of publicity –
squarely protects people’s names, appearances, and other aspects of
their personal identities. The policies underlying the right of pub-
licity overlap substantially with those of copyright, trademark, and
false advertising. It is helpful, therefore, to compare how these other
bodies of law deal with personal identity. In addition, the law of
naming and name changes sheds light both on right of publicity and
trademark, and the tort law of defamation also bears on the issues.
A Right of Publicity
Two closely related theories of the right of publicity should be famil-
iar. One is that it facilitates contracting over a type of information The leading treatise on the right of
– people’s fame, talent, and ability to make endorsements – that has publicity is J. Thomas McCarthy, The
Rights of Publicity & Privacy, McCarthy
significant commercial value. The other is that it incentivizes the cre-
on Publicity . Another valuable resource
ation of these valuable personas in the first place. But the right of is the website Rothman's Roadmap to
publicity is also closely linked to privacy. Historically, it grew out the Right of Publicity, which includes
of privacy torts, and it helps to protect people’s interest in not being state-by-state information on statutes
involuntarily exposed to the public eye. and caselaw.
1 Ownership
Who has publicity rights? Conceptually, the answer depends on the
reason(s) to recognize them. If publicity rights are privacy rights,
then arguably ordinary citizens have them but celebrities who have
voluntarily stepped out upon the public stage don’t. But if publicity
rights are property rights, then arguably celebrities have them but or-
dinary citizens who have done nothing to monetize their identities
don’t. The history of the rise of the right of publicity in the twentieth
century shows courts wrestling with both kinds of theories.
698 CHAPTER 8. PERSONALITY RIGHTS
a Privacy Theories
The different paths taken by New York (after Roberson) and Georgia
(in Pavesich) illustrate the two typical routes to the right of publicity
in the states that recognize it: by statute and by common law, respec-
tively. (Some states, like California, have both.) Pavesich hints and
O’Brien confirms that a privacy-focused rationale doesn’t work for
celebrities.
Roberson v. Rochester Folding Box Co.
64 N.E. 442 (N.Y. 1902)
The complaint alleges that the Franklin Mills Company, one of the
defendants, was engaged in a general milling business and in the
manufacture and sale of flour; that before the commencement of the
action, without the knowledge or consent of plaintiff, defendants,
knowing that they had no right or authority so to do, had obtained,
made, printed, sold, and circulated about 25,000 lithographic prints,
photographs, and likenesses of plaintiff, made in a manner particu-
larly set up in the complaint; that upon the paper upon which the
likenesses were printed and above the portrait there were printed,
in large, plain le ers, the words, ‘Flour of the Family,’ and below
the portrait, in large capital le ers, ‘Franklin Mills Flour,’ and in the
lower right-hand corner, in smaller capital le ers, ‘Rochester Folding
Box Co., Rochester, N. Y.’; that upon the same sheet were other ad-
vertisements of the flour of the Franklin Mills Company; that those
25,000 likenesses of the plaintiff thus ornamented have been conspicu-
ously posted and displayed in stores, warehouses, saloons, and other
public places; that they have been recognized by friends of the plain-
tiff and other people, with the result that plaintiff has been greatly hu-
miliated by the scoffs and jeers of persons who have recognized her
face and picture on this advertisement, and her good name has been
a acked, causing her great distress and suffering, both in body and
mind; that she was made sick, and suffered a severe nervous shock,
was confined to her bed, and compelled to employ a physician, be-
cause of these facts; that defendants had continued to print, make,
Flour of the Family advertisement use, sell, and circulate the said lithographs, and that by reason of the
foregoing facts plaintiff had suffered damages in the sum of $15,000.
The complaint prays that defendants be enjoined from making, print-
ing, publishing, circulating, or using in any manner any likenesses
of plaintiff in any form whatever; for further relief (which it is not
necessary to consider here); and for damages.
It will be observed that there is no complaint made that plaintiff
was libeled by this publication of her portrait. The likeness is said to
be a very good one, and one that her friends and acquaintances were
able to recognize. Indeed, her grievance is that a good portrait of her,
and therefore one easily recognized, has been used to a ract a en-
A. RIGHT OF PUBLICITY 699
tion toward the paper upon which defendant mill company’s adver-
tisements appear. Such publicity, which some find agreeable, is to
plaintiff very distasteful, and thus, because of defendants’ imperti-
nence in using her picture, without her consent, for their own busi-
ness purposes, she has been caused to suffer mental distress where
others would have appreciated the compliment to their beauty im-
plied in the selection of the picture for such purposes; but, as it is
distasteful to her, she seeks the aid of the courts to enjoin a further
circulation of the lithographic prints containing her portrait made as
alleged in the complaint, and, as an incident thereto, to reimburse her
for the damages to her feelings, which the complaint fixes at the sum
of $15,000. There is no precedent for such an action to be found in the
decisions of this court.
Nevertheless the Appellate Division reached the conclusion that
plaintiff had a good cause of action against defendants, in that defen-
dants had invaded what is called a ‘right of privacy’; in other words,
the right to be let alone. Mention of such a right is not to be found
in Blackstone, Kent, or any other of the great commentators upon
the law; nor, so far as the learning of counsel or the courts in this
case have been able to discover, does its existence seem to have been
asserted prior to about the year 1890, when it was presented with
a ractiveness, and no inconsiderable ability, in the Harvard Law Re-
view in an article entitled ‘Rights of a Citizen to His Reputation.’ The Samuel D. Warren & Louis D. Brandeis,
so-called ‘right of privacy’ is, as the phrase suggests, founded upon The Right to Privacy, 4 Harv. L. Rev. 193
(1890).
the claim that a man has the right to pass through this world, if he
wills, without having his picture published, his business enterprises
discussed, his successful experiments wri en up for the benefit of
others, or his eccentricities commented upon either in handbills, cir-
culars, catalogues, periodicals, or newspapers; and, necessarily, that
the things which may not be wri en and published of him must not
be spoken of him by his neighbors, whether the comment be favor-
able or otherwise. While most persons would much prefer to have
a good likeness of themselves appear in a responsible periodical or
leading newspaper rather than upon an advertising card or sheet, the
doctrine which the courts are asked to create for this case would ap-
ply as well to the one publication as to the other, for the principle
which a court of equity is asked to assert in support of a recovery in
this action is that the right of privacy exists and is enforceable in eq-
uity, and that the publication of that which purports to be a portrait
of another person, even if obtained upon the street by an impertinent
individual with a camera, will be restrained in equity on the ground
that an individual has the right to prevent his features from becom-
ing known to those outside of his circle of friends and acquaintances.
If such a principle be incorporated into the body of the law through
the instrumentality of a court of equity, the a empts to logically ap-
700 CHAPTER 8. PERSONALITY RIGHTS
ply the principle will necessarily result not only in a vast amount of
litigation, but in litigation bordering upon the absurd, for the right
of privacy, once established as a legal doctrine, cannot be confined
to the restraint of the publication of a likeness, but must necessarily
embrace as well the publication of a word picture, a comment upon
one’s looks, conduct, domestic relations or habits. And, were the
right of privacy once legally asserted, it would necessarily be held
to include the same things if spoken instead of printed, for one, as
well as the other, invades the right to be absolutely let alone. An in-
sult would certainly be in violation of such a right, and with many
persons would more seriously wound the feelings than would the
publication of their picture. And so we might add to the list of things
that are spoken and done day by day which seriously offend the sensi-
bilities of good people to which the principle which the plaintiff seeks
to have imbedded in the doctrine of the law would seem to apply. I
have gone only far enough to barely suggest the vast field of litiga-
tion which would necessarily be opened up should this court hold
that privacy exists as a legal right enforceable in equity by injunction,
and by damages where they seem necessary to give complete relief.
An examination of the authorities leads us to the conclusion that
the so-called ‘right of privacy’ has not as yet found an abiding place
in our jurisprudence, and, as we view it, the doctrine cannot now be
incorporated without doing violence to se led principles of law by
which the profession and the public have long been guided. I do not
say that, even under the existing law, in every case of the character
of the one before us, or, indeed, in this case, a party whose likeness
is circulated against his will is without remedy. By section 242 of
the Penal Code any malicious publication by picture, effigy, or sign,
which exposes a person to contempt, ridicule, or obloquy, is a libel,
and it would constitute such at common law. There are many arti-
cles, especially of medicine, whose character is such that using the
picture of a person, particularly that of a woman, in connection with
the advertisement of those articles, might justly be found by a jury to
cast ridicule or obloquy on the person whose picture was thus pub-
lished. The manner or posture in which the person is portrayed might
readily have a like effect. In such cases both a civil action and a crim-
inal prosecution could be maintained. But there is no allegation in
the complaint before us that this was the tendency of the publication
complained of, and the absence of such an allegation is fatal to the
maintenance of the action, treating it as one of libel.
New York Civil Rights Law
§ 51 Any person whose name, portrait, picture or voice is used within this
Action for injunction and for damages state for advertising purposes or for the purposes of trade without the
A. RIGHT OF PUBLICITY 701
wri en consent first obtained as above provided may maintain an
equitable action in the supreme court of this state against the person,
firm or corporation so using his name, portrait, picture or voice, to
prevent and restrain the use thereof; and may also sue and recover
damages for any injuries sustained by reason of such use.
Pavesich v. New England Life Ins. Co.
50 S.E. 68 (Ga. 1905)
Paolo Pavesich brought an action against the New England Mu-
tual Life Insurance Company, a nonresident corporation, Thomas B.
Lumpkin, its general agent, and J. Q. Adams, a photographer, both
residing in the city of Atlanta. The allegations of the petition were,
in substance, as follows: In an issue of the Atlanta Constitution, a
newspaper published in the city of Atlanta, there appeared a like-
ness of the plaintiff, which would be easily recognized by his friends
and acquaintances, placed by the side of the likeness of an ill-dressed
and sickly looking person. Above the likeness of the plaintiff were
the words: “Do it now. The man who did.” Above the likeness of
the other person were the words: “Do it while you can. The man
who didn’t.” Below the two pictures were the words: “These two pic-
tures tell their own story.” Under the plaintiff’s picture the following
appeared: “In my healthy and productive period of life I bought in-
surance in the New England Mutual Life Insurance Co., of Boston,
Mass., and to-day my family is protected and I am drawing an an-
nual dividend on my paid-up policies.” Under the other person’s
picture was a statement to the effect that he had not taken insurance,
and now realized his mistake. The statements were signed, “Thomas
B. Lumpkin, General Agent.” The picture of the plaintiff was taken New England Mutual Life Insurance ad
from a negative obtained by the defendant Lumpkin, or some one by
him authorized, from the defendant Adams, which was used with
his consent, and with knowledge of the purpose for which it was to
be used. The picture was made from the negative without the plain-
tiff’s consent, at the instance of the defendant insurance company,
through its agent, Lumpkin. Plaintiff is an artist by profession, and
the publication is peculiarly offensive to him. He never made any
such statement, and has not, and never has had, a policy of life insur-
ance with the defendant company. The publication is malicious, and
tends to bring plaintiff into ridicule before the world, and especially
with his friends and acquaintances, who know that he has no policy
in the defendant company.
The right of privacy has its foundation in the instincts of nature.
It is recognized intuitively, consciousness being the witness that can
be called to establish its existence. Any person whose intellect is in a
normal condition recognizes at once that as to each individual mem-
ber of society there are ma ers private, and there are ma ers public
so far as the individual is concerned. Each individual as instinctively
702 CHAPTER 8. PERSONALITY RIGHTS
resents any encroachment by the public upon his rights which are of a
private nature as he does the withdrawal of those of his rights which
are of a public nature. A right of privacy in ma ers purely private is
therefore derived from natural law.
All will admit that the individual who desires to live a life of seclu-
sion cannot be compelled, against his consent, to exhibit his person
in any public place, unless such exhibition is demanded by the law of
the land. He may be required to come from his place of seclusion to
perform public duties – to serve as a juror and to testify as a witness,
and the like; but, when the public duty is once performed, if he exer-
cises his liberty to go again into seclusion, no one can deny him the
right. One who desires to live a life of partial seclusion has a right to
choose the times, places, and manner in which and at which he will
submit himself to the public gaze. Subject to the limitation above re-
ferred to, the body of a person cannot be put on exhibition at any
time or at any place without his consent. The right of one to exhibit
himself to the public at all proper times, in all proper places, and in a
proper manner is embraced within the right of personal liberty. The
right to withdraw from the public gaze at such times as a person may
see fit, when his presence in public is not demanded by any rule of
law, is also embraced within the right of personal liberty. Publicity
in one instance, and privacy in the other, are each guarantied.
The right of privacy, however, like every other right that rests in
the individual, may be waived. This waiver may be either express
or implied, but the existence of the waiver carries with it the right to
an invasion of privacy only to such an extent as may be legitimately
necessary and proper in dealing with the ma er which has brought
about the waiver. It may be waived for one purpose, and still asserted
for another; it may be waived in behalf of one class, and retained
as against another class; it may be waived as to one individual, and
retained as against all other persons. The most striking illustration of
a waiver is where one either seeks or allows himself to be presented as
a candidate for public office. He thereby waives any right to restrain
or impede the public in any proper investigation into the conduct
of his private life which may throw light upon his qualifications for
the office, or the advisability of imposing upon him the public trust
which the office carries. But even in this case the waiver does not
extend into those ma ers and transactions of private life which are
wholly foreign, and can throw no light whatever upon the question
as to his competency for the office, or the propriety of bestowing it
upon him.
Cases may arise where it is difficult to determine on which side of
the line of demarkation which separates the right of privacy from the
well-established rights of others they are to be found; but we have lit-
tle difficulty in arriving at the conclusion that the present case is one
A. RIGHT OF PUBLICITY 703
in which it has been established that the right of privacy has been
invaded, and invaded by one who cannot claim exemption under
the constitutional guaranties of freedom of speech and of the press.
The form and features of the plaintiff are his own. The defendant
insurance company and its agent had no more authority to display
them in public for the purpose of advertising the business in which
they were engaged than they would have had to compel the plaintiff
to place himself upon exhibition for this purpose. Nothing appears
from which it is to be inferred that the plaintiff has waived his right
to determine himself where his picture should be displayed in favor
of the advertising right of the defendants. The mere fact that he is
an artist does not of itself establish a waiver of this right, so that his
picture might be used for advertising purposes. If he displayed in
public his works as an artist, he would, of course, subject his works
and his character as an artist, and possibly his character and conduct
as a man, to such scrutiny and criticism as would be legitimate and
proper to determine whether he was entitled to rank as an artist, and
should be accorded recognition as such by the public. But it is by
no means clear that even this would have authorized the publication
of his picture. The constitutional right to speak and print does not
necessarily carry with it the right to reproduce the form and features
of man. The plaintiff was in no sense a public character, even if a
different rule in regard to the publication of one’s picture should be
applied to such characters.
It is now to be determined whether first count in the petition set
forth a cause of action for libel. The publication did not mention the
plaintiff’s name, but it did contain a likeness of him that his friends
and acquaintances would readily recognize as his, and the words of
the publication printed under the likeness were put into the mouth
of him whose likeness was published. These words are harmless in
themselves. Standing alone, they contain nothing, and carry no infer-
ence of anything that is disgraceful, to be ashamed of, or calculated
to bring one into reproach.
It is alleged that the plaintiff did not have, and never had had, a
policy of insurance with the defendant company, and that this fact
was known to his friends and acquaintances. In the light of these
allegations, the words a ributed to the plaintiff become absolutely
false, and those who are acquainted with the facts, upon reading the
statement, would naturally ask, “For what purpose was this false-
hood wri en?” It was either gratuitous, or it was for a consideration;
and, whichever conclusion might be reached, the person to whom
the words were a ributed would become contemptible in the mind
of the reader. He would become at once a self-confessed liar. If he
lied gratuitously, he would receive and merit the contempt of all per-
sons having a correct conception of moral principles. If he lied for a
704 CHAPTER 8. PERSONALITY RIGHTS
consideration, he would become odious to every decent individual.
It seems clear to us that a jury could find from the facts alleged that
the publication, in the light of the extrinsic facts, was libelous, and
the plaintiff was entitled to have this question submi ed to the jury.
124 F.2d 167 (5th Cir. 1941)
O'Brien v. Pabst Sales Co.
Plaintiff, in physique as in prowess as a hurler, a modern David, is
a famous football player. Defendant, in bulk, if not in brass and vul-
nerability, a modern Goliath, is a distributor of Pabst beer. Plaintiff,
among other honors received during the year 1938, was picked by
Grantland Rice on his Collier’s All American Football Team. Defen-
dant, as a part of its advertising publicity for 1939, following its cus-
tom of ge ing out football schedule calendars, placed an order with
the Inland Lithographing Company, to prepare for and furnish to it,
35,000 Pabst 1939 football calendars. The calendars were to carry com-
plete schedules of all major college games; professional schedules;
and pictures of Grantland Rice’s 1938 All American Football Team,
the Inland Company to furnish photographs and necessary releases.
At the top of the calendar, as thus printed and circulated, were
the words ”Pabst Blue Ribbon.” Directly underneath were the words
”Football Calendar, 1939”; to the left of these words was a photograph
of O’Brien in football uniform characteristically poised for the throw;
to the right of them was a glass having on it the words ”Pabst Brew-
eries, Blue Ribbon Export Beer”; and to the right of the glass still, a
bo le of beer, having on it ”Pabst Blue Ribbon Beer.” Directly below
these was the intercollegiate football schedule for 1939, and in the cen-
ter of the calender were pictures, including that of O’Brien, of Grant-
land Rice’s All American Football Team for 1938. Near the bo om
was the schedule of the national football league and on the very bot-
tom margin, were the words ”Pabst Famous Blue Ribbon Beer.”
Claiming that this use of his photograph as part of defendant’s
advertising was an invasion of his right of privacy and that he had
been damaged thereby, plaintiff brought this suit.
The defenses were three. The first was that if the mere use of one’s
picture in truthful and respectable advertising would be an action-
able invasion of privacy in the case of a private person, the use here
was not, as to plaintiff, such an invasion, for as a result of his activities
and prowess in football, his chosen field, and their nationwide and
deliberate publicizing with his consent and in his interest, he was no
longer, as to them, a private but a public person, and as to their addi-
tional publication he had no right of privacy. The second defense was
that plaintiff, in his own interest and that of Texas Christian Univer-
sity, had posed for and had authorized the publicity department of T.
C. U. to distribute his picture and biographical data to newspapers,
A. RIGHT OF PUBLICITY 705
magazines, sports journals and the public generally, and that the par-
ticular picture whose use is complained of had been in due course
obtained from and payment for it had been made to the T. C. U. pub-
licity department. Third, no injury to appellant’s person, property or
reputation had been or could be shown and there was therefore no
basis for a recovery. The testimony fully supported these defenses.
Assuming then, what is by no means clear, that an action for right
of privacy would lie in Texas at the suit of a private person, we think
it clear that the action fails; because plaintiff is not such a person and
the publicity he got was only that which he had been constantly seek-
ing and receiving; and because the use of the photograph was by per-
mission, and there were no statements or representations made in
connection with it, which were or could be either false, erroneous or
damaging to plaintiff.
b Property Theories
Haelan shows the courts how courts overcame the conceptual obsta-
cles to developing a property theory of the right of publicity that
works for celebrities. Fraley shows how they turned it around to work
for ordinary people as well.
Haelan Laboratories v. Topps Chewing Gum
202 F.2d 866 (1953)
The plaintiff maintains that defendant invaded plaintiff’s exclusive
right to use the photographs of leading baseball-players. Probably be-
cause the trial judge ruled against plaintiff’s legal contentions, some
of the facts were not too clearly found.
1. So far as we can now tell, there were instances of the following
kind:
(a). The plaintiff, engaged in selling chewing-gum, made a con-
tract with a ballplayer providing that plaintiff for a stated term should
have the exclusive right to use the ball-player’s photograph in con-
nection with the sales of plaintiff’s gum; the ball-player agreed not to
grant any other gum manufacturer a similar right during such term;
the contract gave plaintiff an option to extend the term for a desig-
nated period.
(b). Defendant, a rival chewing-gum manufacturer, knowing of
plaintiff’s contract, deliberately induced the ball-player to authorize
defendant, by a contract with defendant, to use the player’s photo-
graph in connection with the sales of defendant’s gum either during
the original or extended term of plaintiff’s contract, and defendant
did so use the photograph.
Defendant argues that, even if such facts are proved, they show no
actionable wrong, for this reason: The contract with plaintiff was no
more than a release by the ballplayer to plaintiff of the liability which, Wes Westrum baseball card
706 CHAPTER 8. PERSONALITY RIGHTS
absent the release, plaintiff would have incurred in using the ball-
player’s photograph, because such a use, without his consent, would
be an invasion of his right of privacy under Section 50 and Section 51
of the New York Civil Rights Law; this statutory right of privacy is
personal, not assignable; therefore, plaintiff’s contract vested in plain-
tiff no ”property” right or other legal interest which defendant’s con-
duct invaded.
Both parties agree, and so do we, that, on the facts here, New York
”law” governs. And we shall assume, for the moment, that, under
the New York decisions, defendant correctly asserts that any such
contract between plaintiff and a ballplayer, in so far as it merely au-
thorized plaintiff to use the player’s photograph, created nothing but
a release of liability. On that basis, were there no more to the con-
tract, plaintiff would have no actionable claim against defendant. But
defendant’s argument neglects the fact that, in the contract, the ball-
player also promised not to give similar releases to others. If defen-
dant, knowing of the contract, deliberately induced the ball-player to
break that promise, defendant behaved tortiously.
2. The foregoing covers the situations where defendant, by itself
or through its agent, induced breaches. But in those instances where
[another company] induced the breach, we have a different problem;
and that problem also confronts us in instances where defendant,
with knowledge of plaintiff’s exclusive rights, used a photograph of
a ball-player without his consent during the term of his contract with
plaintiff.
With regard to such situations, we must consider defendant’s con-
tention that none of plaintiff’s contracts created more than a release
of liability, because a man has no legal interest in the publication of
his picture other than his right of privacy, i. e., a personal and non-
assignable right not to have his feelings hurt by such a publication.
A majority of this court rejects this contention. We think that, in
addition to and independent of that right of privacy (which in New
York derives from statute), a man has a right in the publicity value
of his photograph, i. e., the right to grant the exclusive privilege of
publishing his picture, and that such a grant may validly be made
”in gross,” i. e., without an accompanying transfer of a business or of
anything else. Whether it be labelled a ”property” right is immaterial;
for here, as often elsewhere, the tag ”property” simply symbolizes the
fact that courts enforce a claim which has pecuniary worth.
This right might be called a ”right of publicity.” For it is common
knowledge that many prominent persons (especially actors and ball-
players), far from having their feelings bruised through public expo-
sure of their likenesses, would feel sorely deprived if they no longer
received money for authorizing advertisements, popularizing their
countenances, displayed in newspapers, magazines, busses, trains
A. RIGHT OF PUBLICITY 707
and subways. This right of publicity would usually yield them no
money unless it could be made the subject of an exclusive grant which
barred any other advertiser from using their pictures.
We think the New York decisions recognize such a right. In 1984, the New York Court of Appeals
Plaintiff, in its capacity as exclusive grantee of a player’s ”right disagreed. "Since the 'right of publicity'
is encompassed under the Civil Rights
of publicity,” has a valid claim against defendant if defendant used
Law as an aspect of the right of privacy,
that player’s photograph during the term of plaintiff’s grant and with which is exclusively statutory in this
knowledge of it. It is no defense to such a claim that defendant is State, the plaintiff cannot claim an in-
the assignee of a subsequent contract. For the prior grant to plaintiff dependent common-law right of pub-
renders that subsequent grant invalid during the period of the grant licity." Stephano
to plaintiff.
Joseph R. Grodin
62 Yale L.J. 1123 (1953)
Note: The Right of Publicity: A Doctrinal Innovation
Haelan’s right of publicity probably gives a famous person more than
the right to assign a protectible interest in his name or picture. By
allowing an individual to make a grant of the publicity value of his
name or photograph, the Haelan case gave protection to persons’ com-
mercial interest in their personality independent of their privacy in-
terest. In so doing, Haelan implied that such commercial interest,
aside from any privacy interest, might justify legal protection of an
individual against unauthorized use of his name or picture. While a
famous person can generally invoke the right of privacy against an
advertiser who appropriates his name or picture without permission,
this right may not always afford adequate protection to his commer-
cial interest in his personality. Celebrities complaining of the unau-
thorized use of their names or likenesses have sometimes been held,
in effect, to have waived their right of privacy because they sought
and received publicity in the past. And where relief has been granted
under the privacy doctrine it is not clear whether plaintiffs have re-
covered damages for injury to the commercial interest in their pop-
ularity. But if the publicity value of a famous person’s name or pic-
ture is to be shielded without reference to the right of privacy, these
celebrities will be fully protected: prior publicity will enhance rather
than bar relief. They will be able to obtain an injunction or recover
damages commensurate with the advertising value of their names or
pictures.
And the right of publicity may be extended beyond advertising
cases. A famous person may wish to prevent appropriation of the
public appeal of his personality by a telecast reproduction of his per-
formance, a biography, or by use of his photograph for illustrating
newspapers or magazines. Here, as in the advertising situation, the
right of privacy has sometimes been considered waived because of
plaintiff’s past exposure in the public limelight, but this would not be
a ground for denying relief under the right of publicity. And, where
708 CHAPTER 8. PERSONALITY RIGHTS
courts have sometimes held that plaintiff’s privacy interest was out-
weighed by the public’s interest in news or information, the balance
may now swing in plaintiff’s favor if both his privacy and publicity
interests are considered.
In applying the right of privacy, courts have confused commercial
interests with privacy interests. The result of making one doctrine do
the work of two has been inadequate protection for both these inter-
ests in personality. The right of privacy gives inadequate protection
to the commercial interest in one’s personality because courts have
placed upon the right limitations which are appropriate only to the
privacy interest. Similarly, in some states the right of privacy gives in-
adequate protection even to the privacy interest because courts and
legislatures have implied that commercial benefit to the defendant
is an element of the cause of action. If courts wish to protect both
interests to at least some extent, they should do so under separate
doctrines, so that limitations appropriate to each interest may be im-
posed. The Haelan case takes a long step in this direction.
Fraley v. Facebook, Inc.
830 F.Supp.2d 785 (N.D. Cal. 2011)
At issue here is one of Facebook’s advertising practices, “Sponsored
Stories,” which appear on a member’s Facebook page, and which typ-
ically consist of another member’s name, profile picture, and an as-
sertion that the person “likes” the advertiser, coupled with the adver-
tiser’s logo. Sponsored Stories are generated when a member inter-
acts with the Facebook website or affiliated sites in certain ways, such
as by clicking on the “Like” bu on on a company’s Facebook page.
In this putative class action, plaintiffs allege that Facebook’s Spon-
Cal. Civ. Code § 3344 sored Stories violate California’s Right of Publicity Statute, Califor-
Cal. Bus. Prof. Code § 17200, nia’s Unfair Competition Law, and the common law doctrine of un-
which grants broader consumer stand- just enrichment.
ing than Lanham Act § 43(a)
Here, Plaintiffs allege not that they suffered mental anguish as a
result of Defendant’s actions, but rather that they suffered economic
injury because they were not compensated for Facebook’s commer-
cial use of their names and likenesses in targeted advertisements to
their Facebook Friends. Defendant does not deny that Plaintiffs may
assert economic injury, but insists that, because they are not celebri-
ties, they must demonstrate some preexisting commercial value to
their names and likenesses, such as allegations that they previously
received remuneration for the use of their name or likeness, or that
they have ever sought to obtain such remuneration.
First, the Court finds nothing in the text of the statute or in case
law that supports Defendant’s interpretation of § 3344 as requiring
a plaintiff pleading economic injury to provide proof of preexisting
commercial value and efforts to capitalize on such value in order to
survive a motion to dismiss. In cases involving celebrity plaintiffs,
A. RIGHT OF PUBLICITY 709
the mere allegation that the plaintiff was not compensated has been
deemed sufficient to satisfy the injury prong. Nor does the Court find
any reason to impose a higher pleading standard on non-celebrities
than on celebrities. California courts have clearly held that the statu-
tory right of publicity exists for celebrity and non-celebrity plaintiffs
alike.
Although generally, the greater the fame or notoriety of the iden-
tity appropriated, the greater will be the extent of the economic injury
suffered, the appropriation of the identity of a relatively unknown
person may result in economic injury or may itself create economic
value in what was previously valueless. Thus, courts have long recog-
nized that a person’s name, likeness, or other a ribute of identity can
have commercial value, even if the individual is relatively obscure. In
Downing v. Abercrombie & Fitch, the Ninth Circuit sustained the § 3344 Downing: 265 F.3d 994 (9th Cir. 2001)
claim of a surfer alleging that a clothing retailer had unlawfully used
a photograph of him surfing for advertising purposes. As explained
by the California appellate court, Although the unauthorized appro-
priation of an obscure plaintiff’s name, voice, signature, photograph,
or likeness would not inflict as great an economic injury as would be
suffered by a celebrity plaintiff, California’s appropriation statute is
not limited to celebrity plaintiffs.
Admi edly, these previous non-celebrity plaintiffs have typically
been models, entertainers, or other professionals who have cultivated
some commercially exploitable value through their own endeavors.
Nevertheless, the Court finds nothing requiring that a plaintiff’s com-
mercially exploitable value be a result of his own talents or efforts in
order to state a claim for damages under § 3344. In a society domi-
nated by reality television shows, YouTube, Twi er, and online social
networking sites, the distinction between a “celebrity” and a “non-
celebrity” seems to be an increasingly arbitrary one.
Moreover, even if non-celebrities are subject to a heightened
pleading standard under § 3344, the Court finds that Plaintiffs’ al-
legations satisfy the requirements for pleading a claim of economic
injury under § 3344. Plaintiffs quote Facebook CEO Mark Zuckerberg
stating that “nothing influences people more than a recommendation
from a trusted friend. A trusted referral influences people more than
the best broadcast message. A trusted referral is the Holy Grail of
advertising.”
Thus, Plaintiffs have alleged that, in the same way that celebri-
ties enjoy commercially exploitable opportunities among consumers
at large, they enjoy commercially exploitable opportunities to adver-
tise among their immediate friends and associates because in essence,
Plaintiffs are celebrities – to their friends. While traditionally, adver-
tisers had li le incentive to exploit a non-celebrity’s likeness because
such endorsement would carry li le weight in the economy at large,
710 CHAPTER 8. PERSONALITY RIGHTS
Plaintiffs’ allegations suggest that advertisers’ ability to conduct tar-
geted marketing has now made friend endorsements a valuable mar-
keting tool, just as celebrity endorsements have always been so con-
sidered.
2 Subject Matter
Typically the right of publicity covers at least one’s name and likeness.
How much further it extends is more controversial.
849 F.2d 460 (2d Cir. 1988)
Midler v. Ford Motor Co.
This case centers on the protectibility of the voice of a celebrated
chanteuse from commercial exploitation without her consent. Ford
Motor Company and its advertising agency, Young & Rubicam, Inc.,
in 1985 advertised the Ford Lincoln Mercury with a series of nine-
teen 30 or 60 second television commercials in what the agency called
“The Yuppie Campaign.” The aim was to make an emotional con-
nection with Yuppies, bringing back memories of when they were in
college. Different popular songs of the seventies were sung on each
commercial. The agency tried to get “the original people,” that is,
the singers who had popularized the songs, to sing them. Failing in
that endeavor in ten cases the agency had the songs sung by “sound
alikes.” Be e Midler, the plaintiff and appellant here, was done by a
sound alike.
Midler is a nationally known actress and singer. She won a
Grammy as early as 1973 as the Best New Artist of that year. Records
made by her since then have gone Platinum and Gold. She was
nominated in 1979 for an Academy award for Best Female Actress
in The Rose, in which she portrayed a pop singer. Newsweek in
its June 30, 1986 issue described her as an “outrageously original
singer/comedian.” Time hailed her in its March 2, 1987 issue as “a
legend” and “the most dynamic and poignant singer-actress of her
time.”
When Young & Rubicam was preparing the Yuppie Campaign it
presented the commercial to its client by playing an edited version
of Midler singing “Do You Want To Dance,” taken from the 1973 Mi-
dler album, “The Divine Miss M.” After the client accepted the idea
and form of the commercial, the agency contacted Midler’s manager,
Jerry Edelstein. The conversation went as follows: “Hello, I am Craig
Hazen from Young and Rubicam. I am calling you to find out if Be e
Midler would be interested in doing ...? Edelstein: “Is it a commer-
cial?” “Yes.” “We are not interested.”
Undeterred, Young & Rubicam sought out Ula Hedwig whom it
knew to have been one of “the Harle es” a backup singer for Mi-
dler for ten years. Hedwig was told by Young & Rubicam that “they
A. RIGHT OF PUBLICITY 711
wanted someone who could sound like Be e Midler’s recording of
[Do You Want To Dance].” She was asked to make a “demo” tape of
the song if she was interested. She made an a capella demo and got
the job.
At the direction of Young & Rubicam, Hedwig then made a record
for the commercial. The Midler record of “Do You Want To Dance”
was first played to her. She was told to “sound as much as possible
like the Be e Midler record,” leaving out only a few “aahs” unsuit-
able for the commercial. Hedwig imitated Midler to the best of her
ability.
After the commercial was aired Midler was told by “a number of
people” that it “sounded exactly” like her record of “Do You Want
To Dance.” Hedwig was told by “many personal friends” that they
thought it was Midler singing the commercial. Ken Fri , a personal
manager in the entertainment business not associated with Midler,
declares by affidavit that he heard the commercial on more than one
occasion and thought Midler was doing the singing.
Neither the name nor the picture of Midler was used in the com-
mercial; Young & Rubicam had a license from the copyright holder
to use the song. At issue in this case is only the protection of Midler’s Why couldn't Midler sue for copy-
voice. The district court described the defendants’ conduct as that right infringement for imitating her
recorded version?
“of the average thief.” They decided, “If we can’t buy it, we’ll take it.”
The court nonetheless believed there was no legal principle prevent-
ing imitation of Midler’s voice and so gave summary judgment for
the defendants. Midler appeals.
Nancy Sinatra once sued Goodyear Tire and Rubber Company on
the basis of an advertising campaign by Young & Rubicam featuring
“These Boots Are Made For Walkin’,” a song closely identified with
her; the female singers of the commercial were alleged to have im- If these two cases are indication, Young
itated her voice and style and to have dressed and looked like her. & Rubicam seems to have had a steady
line of business making commercials
The basis of Nancy Sinatra’s complaint was unfair competition; she
with sound-alikes of famous female
claimed that the song and the arrangement had acquired a secondary singers.
meaning which, under California law, was protectible. This court
noted that the defendants “had paid a very substantial sum to the
copyright proprietor to obtain the license for the use of the song and
all of its arrangements.” To give Sinatra damages for their use of the
song would clash with federal copyright law. Summary judgment
for the defendants was affirmed. Sinatra v. Goodyear Tire & Rubber Sinatra: 435 F.2d 711 (9th Cir. 1970)
Co. If Midler were claiming a secondary meaning to “Do You Want
To Dance” or seeking to prevent the defendants from using that song,
she would fail like Sinatra. But that is not this case. Midler does not
seek damages for Ford’s use of “Do You Want To Dance,” and thus
her claim is not preempted by federal copyright law. Copyright pro-
tects original works of authorship fixed in any tangible medium of
expression. A voice is not copyrightable. The sounds are not fixed.
712 CHAPTER 8. PERSONALITY RIGHTS
What is put forward as protectible here is more personal than any
work of authorship.
Bert Lahr once sued Adell Chemical Co. for selling Lestoil by
means of a commercial in which an imitation of Lahr’s voice accompa-
nied a cartoon of a duck. Lahr alleged that his style of vocal delivery
was distinctive in pitch, accent, inflection, and sounds. The First Cir-
cuit held that Lahr had stated a cause of action for unfair competition,
that it could be found “that defendant’s conduct saturated plaintiff’s
Lahr: 300 F.2d 256 (1st Cir. 1962) audience, curtailing his market.” Lahr v. Adell Chemical Co.. That
case is more like this one. But we do not find unfair competition here.
One-minute commercials of the sort the defendants put on would not
have saturated Midler’s audience and curtailed her market. Midler
did not do television commercials. The defendants were not in com-
petition with her.
California Civil Code section 3344 is also of no aid to Midler. The
statute affords damages to a person injured by another who uses the
person’s “name, voice, signature, photograph or likeness, in any man-
ner.” The defendants did not use Midler’s name or anything else
whose use is prohibited by the statute. The voice they used was Hed-
wig’s, not hers. The term “likeness” refers to a visual image not a vo-
cal imitation. The statute, however, does not preclude Midler from
pursuing any cause of action she may have at common law.
The companion statute protecting the use of a deceased person’s
name, voice, signature, photograph or likeness states that the rights it
Cal. Civ. Code. § 990(b) recognizes are “property rights.” By analogy the common law rights
are also property rights. Appropriation of such common law rights
Motschenbacher: 498 F.2d 821 (9th Cir. is a tort in California. In Motschenbacher v. R.J. Reynolds Tobacco Co.,
1974) what the defendants used in their television commercial for Winston
cigare es was a photograph of a famous professional racing driver’s
racing car. The number of the car was changed and a wing-like de-
vice known as a “spoiler” was a ached to the car; the car’s features
of white pinpointing, an oval medallion, and solid red coloring were
retained. The driver, Lothar Motschenbacher, was in the car but his
features were not visible. Some persons, viewing the commercial, cor-
rectly inferred that the car was his and that he was in the car and was
therefore endorsing the product. The defendants were held to have
invaded a “proprietary interest” of Motschenbacher in his own iden-
tity.
Midler’s case is different from Motschenbacher’s. He and his car
were physically used by the tobacco company’s ad; he made part
of his living out of giving commercial endorsements. But, as Judge
Koelsch expressed it in Motschenbacher, California will recognize an
injury from “an appropriation of the a ributes of one’s identity.” It
was irrelevant that Motschenbacher could not be identified in the ad.
The ad suggested that it was he. The ad did so by emphasizing signs
A. RIGHT OF PUBLICITY 713
or symbols associated with him. In the same way the defendants here
used an imitation to convey the impression that Midler was singing
for them.
Why did the defendants ask Midler to sing if her voice was not
of value to them? Why did they studiously acquire the services of a
sound-alike and instruct her to imitate Midler if Midler’s voice was
not of value to them? What they sought was an a ribute of Midler’s
identity. Its value was what the market would have paid for Midler
to have sung the commercial in person.
A voice is more distinctive and more personal than the automobile
accouterments protected in Motschenbacher. A voice is as distinctive
and personal as a face. The human voice is one of the most palpable
ways identity is manifested. We are all aware that a friend is at once
known by a few words on the phone. At a philosophical level it has
been observed that with the sound of a voice, “the other stands before
me.”. A fortiori, these observations hold true of singing, especially D. Ihde, Listening and Voice 77 (1976)
singing by a singer of renown. The singer manifests herself in the
song. To impersonate her voice is to pirate her identity.
We need not and do not go so far as to hold that every imitation
of a voice to advertise merchandise is actionable. We hold only that
when a distinctive voice of a professional singer is widely known and
is deliberately imitated in order to sell a product, the sellers have ap-
propriated what is not theirs and have commi ed a tort in California.
Midler has made a showing, sufficient to defeat summary judgment,
that the defendants here for their own profit in selling their product
did appropriate part of her identity.
White v. Samsung Electronics America, Inc.
971 F.2d 1395 (9th Cir. 1992)
Plaintiff Vanna White is the hostess of ”Wheel of Fortune,” one of
the most popular game shows in television history. An estimated
forty million people watch the program daily. Capitalizing on the
fame which her participation in the show has bestowed on her, White
markets her identity to various advertisers.
The dispute in this case arose out of a series of advertisements
prepared for Samsung by Deutsch. The series ran in at least half a
dozen publications with widespread, and in some cases national, cir-
culation. Each of the advertisements in the series followed the same
theme. Each depicted a current item from popular culture and a Sam-
sung electronic product. Each was set in the twenty-first century and
conveyed the message that the Samsung product would still be in
use by that time. By hypothesizing outrageous future outcomes for
the cultural items, the ads created humorous effects. For example,
one lampooned current popular notions of an unhealthy diet by de-
picting a raw steak with the caption: ”Revealed to be health food.
2010 A.D.” Another depicted irreverent ”news”-show host Morton
714 CHAPTER 8. PERSONALITY RIGHTS
Downey Jr. in front of an American flag with the caption: ”Presiden-
tial candidate. 2008 A.D.”
The advertisement which prompted the current dispute was for
Samsung videocasse e recorders (VCRs). The ad depicted a robot,
dressed in a wig, gown, and jewelry which Deutsch consciously se-
lected to resemble White’s hair and dress. The robot was posed next
to a game board which is instantly recognizable as the Wheel of For-
tune game show set, in a stance for which White is famous. The cap-
tion of the ad read: ”Longest-running game show. 2012 A.D.” Defen-
dants referred to the ad as the ”Vanna White” ad. Unlike the other
celebrities used in the campaign, White neither consented to the ads
nor was she paid.
Following the circulation of the robot ad, White sued Samsung
and Deutsch in federal district court under: (1) California Civil Code
S 3344; (2) the California common law right of publicity; and (3) S
43(a) of the Lanham Act.
Samsung game show ad
I. S ₃₃₄₄
White first argues that the district court erred in rejecting her claim
under section 3344. Section 3344(a) provides, in pertinent part, that
”[a]ny person who knowingly uses another’s name, voice, signature,
photograph, or likeness, in any manner, ... for purposes of advertis-
ing or selling, ... without such person’s prior consent ... shall be liable
for any damages sustained by the person or persons injured as a re-
sult thereof.”
White argues that the Samsung advertisement used her ”likeness”
in contravention of section 3344. In Midler, this court rejected Be e
Midler’s section 3344 claim concerning a Ford television commercial
in which a Midler ”sound-alike” sang a song which Midler had made
famous. In rejecting Midler’s claim, this court noted that ”the defen-
dants did not use Midler’s name or anything else whose use is pro-
hibited by the statute. The voice they used was another person’s, not
hers. The term ‘likeness’ refers to a visual image not a vocal imita-
tion.”
In this case, Samsung and Deutsch used a robot with mechanical
features, and not, for example, a manikin molded to White’s precise
features. Without deciding for all purposes when a caricature or im-
pressionistic resemblance might become a ”likeness,” we agree with
the district court that the robot at issue here was not White’s ”like-
ness” within the meaning of section 3344. Accordingly, we affirm
the court’s dismissal of White’s section 3344 claim.
II. R P
Carson: 698 F.2d 831 (6th Cir. 1983) In Carson v. Here’s Johnny Portable Toilets, Inc., the defendant had
marketed portable toilets under the brand name ”Here’s Johnny” –
A. RIGHT OF PUBLICITY 715
Johnny Carson’s signature ”Tonight Show” introduction – without
Carson’s permission. The sixth circuit held that the right was impli-
cated because the defendant had appropriated Carson’s identity by
usin the phrase ”Here’s Johnny.”
It is not important how the defendant has appropriated the plain-
tiff’s identity, but whether the defendant has done so. Motschenbacher,
Midler, and Carson teach the impossibility of treating the right of pub-
licity as guarding only against a laundry list of specific means of ap-
propriating identity. A rule which says that the right of publicity can
be infringed only through the use of nine different methods of appro-
priating identity merely challenges the clever advertising strategist
to come up with the tenth.
Indeed, if we treated the means of appropriation as dispositive in
our analysis of the right of publicity, we would not only weaken the
right but effectively eviscerate it. The right would fail to protect those
plaintiffs most in need of its protection. Advertisers use celebrities to
promote their products. The more popular the celebrity, the greater
the number of people who recognize her, and the greater the visibility
for the product. The identities of the most popular celebrities are not
only the most a ractive for advertisers, but also the easiest to evoke
without resorting to obvious means such as name, likeness, or voice.
Consider a hypothetical advertisement which depicts a mechani-
cal robot with male features, an African-American complexion, and
a bald head. The robot is wearing black hightop Air Jordan basket-
ball sneakers, and a red basketball uniform with black trim, baggy
shorts, and the number 23 (though not revealing ”Bulls” or ”Jordan”
le ering). The ad depicts the robot dunking a basketball one-handed,
stiff-armed, legs extended like open scissors, and tongue hanging out.
Now envision that this ad is run on television during professional
basketball games. Considered individually, the robot’s physical at-
tributes, its dress, and its stance tell us li le. Taken together, they
lead to the only conclusion that any sports viewer who has registered
a discernible pulse in the past five years would reach: the ad is about
Michael Jordan.
Viewed separately, the individual aspects of the advertisement in
the present case say li le. Viewed together, they leave li le doubt
about the celebrity the ad is meant to depict. The female-shaped
robot is wearing a long gown, blond wig, and large jewelry. Vanna
White dresses exactly like this at times, but so do many other women.
The robot is in the process of turning a block le er on a game-board.
Vanna White dresses like this while turning le ers on a game-board
but perhaps similarly a ired Scrabble-playing women do this as well.
The robot is standing on what looks to be the Wheel of Fortune game
show set. Vanna White dresses like this, turns le ers, and does this
on the Wheel of Fortune game show. She is the only one. Indeed,
716 CHAPTER 8. PERSONALITY RIGHTS
defendants themselves referred to their ad as the ”Vanna White” ad.
We are not surprised.
Television and other media create marketable celebrity identity
value. Considerable energy and ingenuity are expended by those
who have achieved celebrity value to exploit it for profit. The law
protects the celebrity’s sole right to exploit this value whether the
celebrity has achieved her fame out of rare ability, dumb luck, or a
combination thereof. We decline Samsung and Deutch’s invitation to
permit the evisceration of the common law right of publicity through
means as facile as those in this case. Because White has alleged facts
showing that Samsung and Deutsch had appropriated her identity,
the district court erred by rejecting, on summary judgment, White’s
common law right of publicity claim.
ALARCON, Circuit Judge, concurring in part, dissenting in part
The common theme in these federal cases is that identifying char-
acteristics unique to the plaintiffs were used in a context in which
they were the only information as to the identity of the individual.
The commercial advertisements in each case showed a ributes of
the plaintiff’s identities which made it appear that the plaintiff was
the person identified in the commercial. No effort was made to dis-
pel the impression that the plaintiffs were the source of the personal
a ributes at issue. The commercials affirmatively represented that
the plaintiffs were involved. The proper interpretation of Motschen-
bacher, Midler, and Carson is that where identifying characteristics
unique to a plaintiff are the only information as to the identity of the
person appearing in an ad, a triable issue of fact has been raised as to
whether his or her identity as been appropriated.
The case before this court is distinguishable from the factual show-
ing made in Motschenbacher, Midler, and Carson. It is patently clear to
anyone viewing the commercial advertisement that Vanna White was
not being depicted. No reasonable juror could confuse a metal robot
with Vanna White.
White v. Samsung Electronics America, Inc.
989 F.2d 1512 (9th Cir. 1993)
KOZINSKI, Circuit Judge, dissenting from the order rejecting the sug-
gestion for rehearing en banc
The majority isn’t, in fact, preventing the ”evisceration” of Vanna
White’s existing rights; it’s creating a new and much broader prop-
erty right, a right unknown in California law. It’s replacing the ex-
isting balance between the interests of the celebrity and those of the
public by a different balance, one substantially more favorable to the
celebrity. Instead of having an exclusive right in her name, likeness,
signature or voice, every famous person now has an exclusive right
A. RIGHT OF PUBLICITY 717
to anything that reminds the viewer of her. After all, that’s all Sam-
sung did: It used an inanimate object to remind people of White, to
”evoke [her identity].17
Consider how sweeping this new right is. What is it about the ad
that makes people think of White? It’s not the robot’s wig, clothes
or jewelry; there must be ten million blond women (many of them
quasi-famous) who wear dresses and jewelry like White’s. It’s that
the robot is posed near the ”Wheel of Fortune” game board. Remove
the game board from the ad, and no one would think of Vanna White.
But once you include the game board, anybody standing beside it –
a brune e woman, a man wearing women’s clothes, a monkey in a
wig and gown – would evoke White’s image, precisely the way the
robot did. It’s the ”Wheel of Fortune” set, not the robot’s face or dress
or jewelry that evokes White’s image. The panel is giving White an
exclusive right not in what she looks like or who she is, but in what
she does for a living.18
This is entirely the wrong place to strike the balance. Intellectual
property rights aren’t free: They’re imposed at the expense of future
creators and of the public at large. Where would we be if Charles
Lindbergh had an exclusive right in the concept of a heroic solo avia-
tor? If Arthur Conan Doyle had go en a copyright in the idea of the
detective story, or Albert Einstein had patented the theory of relativ-
ity? If every author and celebrity had been given the right to keep
people from mocking them or their work? Surely this would have
made the world poorer, not richer, culturally as well as economically.
Future Vanna Whites might not get the chance to create their per-
sonae, because their employers may fear some celebrity will claim the
17
Some viewers might have inferred White was endorsing the product, but that’s
a different story. The right of publicity isn’t aimed at or limited to false endorse-
ments; that’s what the Lanham Act is for.
18
Once the right of publicity is extended beyond specific physical characteristics,
this will become a recurring problem: Outside name, likeness and voice, the things
that most reliably remind the public of celebrities are the actions or roles they’re fa-
mous for. A commercial with an astronaut se ing foot on the moon would evoke
the image of Neil Armstrong. Any masked man on horseback would remind peo-
ple (over a certain age) of Clayton Moore. And any number of songs – ”My Way,”
”Yellow Submarine,” ”Like a Virgin,” ”Beat It,” ”Michael, Row the Boat Ashore,”
to name only a few – instantly evoke an image of the person or group who made
them famous, regardless of who is singing.
See also Carlos V. Lozano, West Loses Lawsuit over Batman TV Commercial, L.A.
Times, Jan. 18, 1990, at B3 (Adam West sues over Batmanlike character in commer-
cial); Nurmi v. Peterson, 10 U.S.P.Q.2d 1775, 1989 WL 407484 (C.D. Cal. 1989) (1950s
TV movie hostess ”Vampira” sues 1980s TV hostess ”Elvira”); text accompanying
notes 7-8 (lawsuits brought by Guy Lombardo, claiming big bands playing at New
Year’s Eve parties remind people of him, and by Uri Geller, claiming psychics who
can bend metal remind people of him). Cf. Motschenbacher, where the claim was
that viewers would think plaintiff was actually in the commercial, and not merely
that the commercial reminded people of him.
718 CHAPTER 8. PERSONALITY RIGHTS
persona is too similar to her own.21
3 Procedures
There are no procedural prerequisites to owning a right of publicity,
other perhaps than the vestigial suggestion (rejected in Fraley) that
one must have commercially exploited one’s likeness to sue for its
appropriation. The most interesting procedural issue raised by the
right of publicity is its duration.
Hebrew University of Jerusalem v. General Motors
903 F. Supp. 2d 932 (C.D. Cal. 2012)
I. I
Defendant General Motors LLC (”GM”) used an image of Albert Ein-
stein in a November 2009 advertisement for its 2010 Terrain vehi-
cle. The ad depicted Einstein’s face digitally pasted onto a muscled
physique, accompanied by the wri en message ”Ideas are sexy too.”
The ad ran in only one issue of People magazine. Plaintiff Hebrew
University of Jerusalem (”HUJ”), which claims to own Einstein’s
right of publicity as a beneficiary under Einstein’s will and thus ex-
clusive control of the exploitation of his name and likeness, brought
suit against GM for this unauthorized use of Einstein’s image.
For the reasons set forth below, the Court concludes that the New
Jersey Supreme Court would likely find that the postmortem right of
publicity endures for no more than 50 years after death.
IV. A
J. Thomas McCarthy, the leading commentator on the right of public-
ity, has characterized the determination of the right’s duration as ”by
nature almost arbitrary.” An ”almost arbitrary” ruling is unaccept-
able, however. The following analysis seeks to avoid one.
B. Status of Existing New Jersey Law Concerning the Duration of the
Postmortem Right of Publicity
Only one court in New Jersey, a federal district court, has ever dis-
cussed the question of duration, and it did not decide the issue. Es-
GM Terrain ad tate of Presley The primary question in Presley was whether New Jersey
McCarthy S 9:16
21
If Christian Slater, star of ”Heathers,” ”Pump up the Volume,” ”Kuffs,” and
Presley: 513 F. Supp. at 1339 (D.N.J.
”Untamed Heart” – and alleged Jack Nicholson clone – appears in a commercial,
1981)
can Nicholson sue? Of 54 stories on LEXIS that talk about Christian Slater, 26 talk
about Slater’s alleged similarities to Nicholson. Apparently it’s his nasal wisecracks
and killer smiles, St. Petersburg Times, Jan. 10, 1992, at 13, his eyebrows, O awa
Citizen, Jan. 10, 1992, at E2, his sneers, Boston Globe, July 26, 1991, at 37, his men-
acing presence, USA Today, June 26, 1991, at 1D, and his sing-song voice, Ganne
News Service, Aug. 27, 1990 (or, some say, his insinuating drawl, L.A. Times, Aug.
22, 1990, at F5). That’s a whole lot more than White and the robot had in common.
A. RIGHT OF PUBLICITY 719
recognized a descendible, postmortem right of publicity. The court
found that it does, holding that ”Elvis Presley’s right of publicity sur-
vived his death and became part of Presley’s estate.” With respect
to the duration of the right of publicity, however, the Presley court
merely stated that the state legislature should determine that ques-
tion, although it also noted that the federal Copyright Act, which at
that time provided for a copyright term of life plus 50 years, could
provide guidance. No state court in New Jersey has ever addressed
the issue.
Although the New Jersey Legislature has considered at least two
bills that would create a statutory right of publicity, it has thus far
not seen fit to enact such a right. See A.3536, 213th Legis. (N.J. 2008)
(proposing the ”Celebrity Image Protection Act,” with a postmortem
duration of 70 years); A.4476, 212th Legis. (N.J. 2007) (same). There
is nothing stopping HUJ from petitioning the New Jersey Legislature
to pass a statute, with retroactive applicability, that would create a
definitive postmortem right of publicity with the extended duration
that HUJ seeks here.
C. Aspects of the Right of Publicity that Should Affect Its Duration
1. The Right of Publicity’s Origins in the Right of Privacy
The right of publicity originally developed within the array of privacy
rights that are considered personal, are based on dignitary interests
and are not descendible.
Now, however, the right of publicity is widely understood, in-
cluding in New Jersey, to be akin to intellectual property. Addition-
ally, ”[w]ith its emphasis on commercial interests, the right of public-
ity also secures for plaintiffs the commercial value of their fame and
prevents the unjust enrichment of others seeking to appropriate that
value for themselves.” Restatement (Third) of Unfair Competi-
tion S 46 cmt. c.
Notwithstanding the trend toward treating the right of publicity
as a commercial property right, HUJ contends that the right of pub-
licity is a deeply personal right. It is true that one of the rationales
for recognizing a right of publicity remains its protection of an indi-
vidual’s interest in personal dignity and autonomy. Surely, however,
the personal interest that is at stake becomes a enuated after the per-
sonality dies.
A maximum 50-year postmortem duration here would be a rea-
sonable middle ground that is long enough for a deceased celebrity’s
heirs to take advantage of and reap the benefit of the personal aspects
of the right. See Restatement (Third) of Unfair Competition S 46 cmt.
h (”As a general ma er, however, the dignitary and proprietary in-
terests that support the recognition of a right of publicity become sub-
stantially a enuated after death. Post mortem uses are also less likely
720 CHAPTER 8. PERSONALITY RIGHTS
to create a false suggestion of endorsement or sponsorship.”). The ob-
viously humorous ad for the 2010 Terrain having been published 55
years or more after Einstein’s death, it is unlikely that any viewer of
it could reasonably infer that Einstein or whoever succeeded to any
right of publicity that Einstein may have had was endorsing the GMC
Terrain.
2. Copyright Law Considerations
HUJ argues that, if the Court must set a limit on the postmortem right
of publicity, it should be coterminus with the current federal Copy-
right Act, which protects copyrights for 70 years after death. This
Court disagrees. The purpose of the right and its underlying poli-
cies do not warrant a mechanical application of the Copyright Act’s
term of life plus 70 years. Indeed, although McCarthy ultimately rec-
ognizes that using the federal Copyright Act as a model will ”more
often than not provide the tie-breaking solution to the problem” of
McCarthy S 9:16 determining the postmortem duration of the right of publicity, , it is
clear that such an analogy is inconsistent with McCarthy’s own views
about the purpose and policies underlying the right. In fact, he would
prefer to limit the extent of the right to 10-20 years after death, despite
noting that other commentators have proposed longer durations, in-
cluding a life-plus-50-year term modeled after the former version of
the federal Copyright Act.
The current 70-year postmortem term was enacted by the 1998
Copyright Term Extension Act, which increased the length of copy-
right protection from its former duration of life plus 50 years. HUJ
acquired Einstein’s right of publicity in 1982, at which time the 1976
Copyright Act was in place – with a 50-year postmortem duration.
HUJ’s reasonable expectation at that time, based on the same theory
of analogy to copyright that it advocates today, necessarily would
have been that any rights it acquired would not last more than 50
years after Einstein’s death. Similarly, when the Presley court sug-
gested that the New Jersey Legislature consider the Copyright Act as
a guide in se ing a postmortem duration for the right of publicity,
that statute had only a life-plus-50-year duration. This was approxi-
mately one year before HUJ acquired its interest.
There are certain similarities between the goals of copyright and
those of the right of publicity. In a sense, both rights evolve from an
act of creation, whether it is the creation of a ”work” such as a writing
or the creation of a cultivated persona. These acts of creation are the
product of an individual’s choices and self-expression. Some courts,
accordingly, have analogized between copyright and the right of pub-
licity in the context of balancing the interests protected by those rights
with the interests protected under the First Amendment.
Despite the intersecting similarities between copyright and the
A. RIGHT OF PUBLICITY 721
right of publicity, however, that the right of publicity is an outgrowth
of the right of privacy suggests that the term of copyright protection
is far from a perfect precedent for determining the duration of the
right of publicity. First, as HUJ itself has argued, the right of pub-
licity is an intensely personal right meant, to some extent, to protect
against personal and dignitary harms, such as having one’s persona
associated with a product or idea of which he disapproves.
Moreover, the protection of copyright is designed to encourage
the future creation of works of art, whereas the interest sought to be
protected by the right of publicity is usually the byproduct of a differ-
ent and earlier endeavor. The commercial value of a person’s iden-
tity often results from success in endeavors such as entertainment or
sports that offer their own substantial rewards. Any additional in-
centive a ributable to the right of publicity may have only marginal
significance. For this reason, it is questionable whether those inter-
ests should be protected for as long a period after the death of the
person to whom they belong as are his copyrighted works.
D. Other States’ Laws
1. Common Law
Looking beyond New Jersey, in none of the five other states that rec-
ognize a common law postmortem right of publicity has any court
addressed the issue of the right’s duration, or even raised it as a ques-
tion needing to be answered. In none of those cases, however, was
the interval between the death of the person whose right of publicity
was at stake and the date of the alleged infringement of that right 50
years or longer. Indeed, in most of the cases the period was 10 years
or less. See, e.g., , Gignilliat v. Gignilliat, Savi & Be is, LLP (maximum Gignilliat: 684 S.E.2d 756 (S.C. 2009)
of 7 years at issue); Jim Henson Productions v. John T. Brady & Assoc. Jim Henson Productions: 867 F. Supp.
(maximum of 4 years at issue); Nature’s Way Products, Inc. v. Nature- 175 (S.D. Neb. 1994)
Pharma, Inc.; (maximum of 7 years at issue); Presley (permi ing right Nature's Way: 736 F. Supp. 245 (D. Utah
1990)
of publicity claim brought three years after Elvis’s death).
2. Statutes Florida: 40 years
Illinois: 50 years
The majority of states with statutory rights of publicity limit the
Kentucky: 50 years
right’s postmortem duration to 50 years or less. Seven states have Nevada: 50 years
statutory rights of publicity that permit the right to endure for up to Pennsylvania: 30 years
50 years. Texas: 50 years
Six states allow the postmortem right of publicity to reach 60 years Virginia: 20 years
or more. California: 70 years
Indiana: 100 years
Of the states whose statutes were enacted prior to the revision
Ohio: 60 years
of the Copyright Act in 1998, only California amended its statute to Oklahoma: 100 years
reflect the extended copyright term. Tennessee: indefinite
Thus, of the states with currently enacted statutory rights of pub- Washington: up to 75 years
722 CHAPTER 8. PERSONALITY RIGHTS
licity, a slight majority limits the duration of that right to 50 years or
less. Although this does not provide overwhelming support for such
a length of time, it does tip the balance slightly in that direction.
E. Public Policy Counsels in Favor of Limiting the Postmortem Right of
Publicity to Not More Than 50 Years
One of the overarching policy concerns in enforcing intellectual prop-
erty rights is the balance that must be struck between protecting an
individual’s right to reap the benefits of his creative endeavors and
the public’s freedom of expression. This policy concern extends to
the right of publicity.
An open-ended right of publicity, or even a postmortem duration
longer than 50 years, raises considerable First Amendment concerns
and creates a potentially infinite curb on expression. Additionally, an
extended right of publicity may interfere with or decrease the value
of copyrighted works, such as photographs, thereby pi ing one form
of protected property against another.
In addition to First Amendment implications, there is another con-
sideration. In the 57 years since Albert Einstein died, the means of
communication have increased and so has the proclivity of people
to use them frequently. Journalists, academics and politicians fre-
quently issue pronouncements about the impact on society, both in
the United States and around the globe, of the dizzying explosion in
the tools of communication. New devices and platforms have been
developed, including smart phones, personal computers, social net-
works, email, Twi er, blogs, etc. These technologies have caused a
swift and dramatic, but still developing, impact on ordinary life. It
has become a truism that their speed, their accessibility, and their
popularity appear to have changed social norms regarding privacy
and public expression. But it is not yet clear what this should mean
for the protection of such rights as the right of privacy, the right of ex-
pression and the right of publicity. For example, on balance should
the law increasingly protect people’s right of expression, now that
we enjoy so many fora in which to broadcast our views? Similarly,
should the law value the right of privacy less than before, given that
many social media devotees, especially young people, are said to
have li le compunction about revealing intimate information about
themselves? Conversely, should the law afford celebrities greater
rights in controlling publicity about themselves, to protect against
what appears to be a growing tendency of people to not just exalt but
even to exploit the fame and celebrity of others?
The Court does not profess to have answers to these questions,
but what is clear is that since the full impact of these rapid changes
remains uncertain, it would be imprudent to issue any ruling that
A. RIGHT OF PUBLICITY 723
strengthens (or at least lengthens) one right – that of the right of pub-
licity – to the potentially significant detriment of these other rights.
V. C
Absent a legislative directive to the contrary, to extend the right
of publicity beyond a half century would be inconsistent with the
Court’s responsibility to balance all of the interests that are at stake.
It also would risk having that right treated as an open-ended heredity
right. See McCarthy (noting the need ”to avoid descendants or heirs McCarthy S 9:16
unto the nth generation reaping the commercial rewards of a distant
and famous ancestor, a ‘favored bloodline’ concept out of step with
a society that has abolished hereditary titles” and that at some point,
the interests of free speech outweigh the interests of the heirs and ”the
person’s identity should enter the public domain as a part of history
and folklore”).
A maximum duration of 50 years appropriately reflects the bal-
ance between meaningful enforcement of the right of publicity after a
famous individual’s death and the public’s interest in free expression.
It aligns with the majority of current state statutes limiting the right’s
postmortem duration. And it approximates the period evidently con-
templated by the Presley court – the one court in New Jersey to have
discussed the duration of the right – when it encouraged that state’s
legislature to consider the issue with guidance from the then-current
Copyright Act.
The Ninth Circuit recently noted that Marilyn Monroe considered
herself to belong ”to the Public and to the world.” Milton H. Greene Milton H. Greene Archives: 692 F.3d 983
Archives, Inc. v. Marilyn Monroe LLC. There is no evidence that Albert (9th Cir 2012)
Einstein saw himself that way, but he did become the symbol and em-
bodiment of genius. His persona has become thoroughly ingrained
in our cultural heritage. Now, nearly 60 years after his death, that
persona should be freely available to those who seek to appropriate
it as part of their own expression, even in tasteless ads.
4 Infringement: Similarity
For a use to infringe, the plaintiff must be identifiable. This is effec-
tively a similarity test between the defendant’s use and the plaintiff’s
persona. Also, look back at the subject ma er cases and the cases
they discuss, especially Motschenbacher, which illustrate some vari-
ations on identifiability. Have the courts there conflated similarity
with subject ma er? Or is that precisely the point, that once identifia-
bility is shown, there is no need for limiting subject-ma er doctrines?
Hooker v. Columbia Pictures Industries, Inc.
Plaintiff is a professional woodcarver from Woodstock, Illinois. Ex- 551 F. Supp. 1060 (N.D. Ill. 1982)
amining the host of exhibits appended to the affidavit which he has
724 CHAPTER 8. PERSONALITY RIGHTS
submi ed, it appears that while plaintiff does carve other birds, he
specializes in ducks. Plaintiff’s ducks are of the highest quality. Some
of them are described as “exquisite” and sell for a great deal of money.
Plaintiff’s name is T.J. Hooker.
The defendants produce and broadcast a television series about a
fictional policeman in California. Never having heard of plaintiff or
his celebrated ducks, the defendants happened to name their imag-
inary policeman “T.J. Hooker.” Not surprisingly, the series is also
Not to be confused with the T.J. Hooper entitled “T.J. Hooker.”
Count I of the complaint is based upon the common law tort of ap-
propriation of the plaintiff’s name or likeness for the defendants’ ben-
efit or advantage. n order to state a claim for relief based on this the-
ory, it is vital that some “appropriation” be alleged. See W. Prosser,
Law of Torts § 117 (4th ed. 1971). “Appropriation” in this context
means more than the mere coincidental use of a name that happens
to be the same as that of the plaintiff. Dean Prosser explained this as
follows:
William Shatner in T.J. Hooker It is the plaintiff’s name as a symbol of his identity that
is involved here, and not as a mere name. Unless there
is some tortious use made of it, there is no such thing as
an exclusive right to the use of a name; and any one can
be given or assume any name he likes. It is only when he
makes use of the name to pirate the plaintiff’s identity for
some advantage of his own, as by impersonation to obtain
credit or secret information, or by posing as the plaintiff’s
wife, or providing a father for a child on a birth certificate,
that he becomes liable. It is in this sense that “appropria-
tion” must be understood. It is therefore not enough that a
name which is the same as the plaintiff’s is used in a novel,
or the title of a corporation, unless the context or the cir-
cumstances indicate that the name is that of the plaintiff....
Nor is there any liability when the plaintiff’s character, oc-
cupation, and the general outline of his career, with many
real incidents in his life, are used as the basis for a figure
in a novel who is still clearly a fictional one.
Similarly, the Restatement of Torts makes it clear that it is not the use
of the plaintiff’s name which constitutes a tort but rather the appro-
priation of the value of his name and reputation:
It is not enough that the defendant has adopted for himself
a name that is the same as that of the plaintiff, so long as he
does not pass himself off as the plaintiff or otherwise seek
to obtain for himself the values or benefits of the plaintiff’s
name or identity. Unless there is such an appropriation,
A. RIGHT OF PUBLICITY 725
the defendant is free to call himself by any name he likes,
whether there is only one person or a thousand others of
the same name. Until the value of the name has in some way
been appropriated, there is no tort.
Examining Count I in light of the foregoing principles, it is apparent
that plaintiff has failed to allege a tortious appropriation of his name.
Plaintiff does allege that “[d]efendants’ ... use of plaintiff’s name ap-
propriates the right of publicity in plaintiff’s celebrated name.” But
this broad, conclusory allegation cannot substitute for allegations of
facts showing that the defendants used the name “T.J. Hooker” as a
means of pirating plaintiff’s identity. By his own admission, the com-
mercial value of plaintiff’s name is in the field of wildlife art. Hunters,
sportsmen, and collectors identify plaintiff’s name with fine carvings
of ducks and other fowl. There is nothing in the complaint which can
be construed as an allegation that the defendants adopted the name
“T.J. Hooker” in order to avail themselves of plaintiff’s reputation as
an extraordinary woodcarver. Suppose that the plaintiff were the
Plaintiff admits that the fictional television series at issue here is star of a long-running top-rated real-
ity show about woodcarving. Same re-
a “police drama.” It is difficult to imagine a subject further removed
sult?
for the life of T.J. Hooker the artisan. The facts and circumstances
alleged by plaintiff provide no basis upon which it can be found that
the name “T.J. Hooker,” as used in the defendants’ fictional television
series, in any way refers to the real T.J. Hooker.
There being no well-pleaded allegation of appropriation of the
value of plaintiff’s name, plaintiff has failed to state a claim upon
which relief can be granted.
5 Infringement: Prohibited Conduct
a Direct Infringement
The usual threshold rule is that the right of publicity only applies
to commercial and advertising uses. The caselaw is thin on whether
violations need to be intentional.
Stephano v. News Group Publications, Inc.
64 N.Y.2d 174 (1984)
The plaintiff, a professional model, claims that the defendant used
his picture for trade or advertising purposes without his consent, and
thus violated his statutory right to privacy (Civil Rights Law, § 51),
by publishing a picture of him modeling a ”bomber jacket” in a mag-
azine article containing information regarding the approximate price
of the jacket, the name of the designer, and the names of three stores
where the jacket might be purchased. Plaintiff also claims that the de-
fendant’s conduct violated a common-law right of publicity. The trial
court granted summary judgment to the defendant concluding that
726 CHAPTER 8. PERSONALITY RIGHTS
the article reported a newsworthy event of fashion news, and was not
published for trade or advertising purposes. A divided Appellate Di-
vision reversed and denied summary judgment finding that factual
questions were presented as to whether the defendant had used the
plaintiff’s picture for trade purposes and whether the article consti-
tuted an advertisement in disguise.
In the summer of 1981 the plaintiff agreed to model for an article
on men’s fall fashions. The photographic session took place on Au-
gust 11, 1981. The defendant used two of the photographs taken dur-
ing that session to illustrate an article entitled ”Classic Mixes”, which
appeared under the heading ”Fall Fashions” in the September 7, 1981
issue of New York magazine. Another photograph taken during the
session was used, a week earlier, in the August 31, 1981 issue of New
York magazine, in a column entitled ”Best Bets”. That column, a reg-
ular feature in the magazine, contains information about new and un-
usual products and services available in the metropolitan area. One
of the items included in the August 31 column was a bomber jacket
modeled by the plaintiff. The text above the picture states: ”Yes Gior-
gio — From Giorgio Armani. Based on his now classic turn on the
bomber jacket, this co on-twill version with ‘fun fur’ collar features
the same cut at a far lower price — about $225. It’ll be available in the
stores next week. — Henry Post Bomber Jacket/Barney’s, Bergdorf
Goodman, Bloomingdale’s.”
It is the plaintiff’s contention that he agreed to model for one ar-
ticle only – the September 7, 1981 article on Fall Fashions – and that
the defendant violated his rights by publishing his photograph in the
August 31 ”Best Bets” column.1 The complaint alleges two causes
of action. First the plaintiff claims that the defendant violated his
civil rights by using his photograph for trade or advertising purposes
without his consent. In his second cause of action the plaintiff claims
that the defendant’s conduct ”invaded plaintiff’s right of publicity”.
On each cause of action the plaintiff seeks $350,000 in compensatory
damages and an equal amount in exemplary damages.
The only question is whether the defendant used the plaintiff’s
picture for trade or advertising purposes within the meaning of the
The "Best Bets" item featuring
statute when it published his picture in the ”Best Bets” column with-
Stephano
1
In his brief to this court the plaintiff claims that the defendant’s use of his pho-
tographs in both articles is in issue because the plaintiff did not give his wri en
consent to use them in either article. It appears that the plaintiff was injured at
the photographic session and subsequently refused to sign a release in order to
avoid compromising the unrelated action for physical injuries. Nevertheless, in
his complaint, he only objected to the August 31 ”Best Bets” article. Similarly, in
his papers in opposition to the motion for summary judgment, the plaintiff identi-
fied that publication alone as the basis for the complaint. Thus the only question
properly before us concerns the defendant’s liability for publishing the plaintiff’s
photograph in the ”Best Bets” article of August 31, 1981.
A. RIGHT OF PUBLICITY 727
out his consent.
The statute does not define trade or advertising purposes. How-
ever, the courts have consistently held, from the time of its enactment,
that these terms should not be construed to apply to publications con-
cerning newsworthy events or ma ers of public interest. The excep-
tion reflects Federal and State constitutional concerns for free dissem-
ination of news and other ma ers of interest to the public, but essen-
tially requires an interpretation of the statute to give effect to the leg-
islative intent. We have recently noted that this exception should be
liberally applied.
The newsworthiness exception applies not only to reports of polit-
ical happenings and social trends but also to news stories and articles
of consumer interest including developments in the fashion world.
Nevertheless, the plaintiff contends that the photograph in this case
did not depict a newsworthy event because it is a posed picture of
a professional model taken at a photographic session staged by the
defendant. However, the event or ma er of public interest which
the defendant seeks to convey is not the model’s performance, but
the availability of the clothing item displayed. A fashion display is,
of necessity, posed and arranged. Obviously the picture of the jacket
does not lose its newsworthiness simply because the defendant chose
to employ a person to model it in a controlled or contrived se ing.
The fact that the defendant may have included this item in its col-
umn solely or primarily to increase the circulation of its magazine
and therefore its profits, as the Appellate Division suggested, does
not mean that the defendant has used the plaintiff’s picture for trade
purposes within the meaning of the statute. Indeed, most publica-
tions seek to increase their circulation and also their profits. It is the
content of the article and not the defendant’s motive or primary mo-
tive to increase circulation which determines whether it is a newswor-
thy item, as opposed to a trade usage, under the Civil Rights Law. It
is se led that a picture illustrating an article on a ma er of public in-
terest is not considered used for the purposes of trade or advertising
within the prohibition of the statute unless it has no real relationship
to the article or unless the article is an advertisement in disguise. A
contrary rule would unreasonably and unrealistically limit the excep-
tion to nonprofit or purely altruistic organizations which are not the
only, or even the primary, source of information concerning news-
worthy events and ma ers of public interest.
The plaintiff’s primary contention is that his picture was used for
advertising purposes within the meaning of the statute. Although
the article was not presented to the public as an advertisement, and
was published in a column generally devoted to newsworthy items,
the plaintiff claims that it is in fact an advertisement in disguise.
The facts on which the plaintiff relies are entirely circumstantial.
728 CHAPTER 8. PERSONALITY RIGHTS
He does not claim to have personal knowledge, or direct proof, that
this particular article was actually published by the defendant for
advertisement purposes. The circumstances on which he bases his
claim are (1) the fact that the news column contains information nor-
mally included in an advertisement identifying the designer of the
jacket, the approximate price, and three places where the jacket may
be purchased, and (2) the fact that some or all of those stores men-
tioned in the article had previously advertised products in the maga-
zine. Those circumstances are not enough to raise a jury question as
to whether the article was published for advertising purposes.
The plaintiff does not dispute the fact that the information pro-
vided in the article is of legitimate reader interest. Indeed, similar in-
formation is frequently provided in reviews or news announcements
of books, movies, shows or other new products including fashions.
Nor does the plaintiff contend that it is uncommon for commercial
publishers to print legitimate news items or reviews concerning prod-
ucts by persons or firms who have previously advertised in the pub-
lisher’s newspaper or magazine. In short, the plaintiff has not pre-
sented any facts which would set this particular article apart from
the numerous other legitimate news items concerning new products.
He offers only his speculative belief that in this case the information
on the jacket was included in the defendant’s column for advertising
purposes or perhaps, more vaguely, to promote additional advertis-
ing. That, in our view, is insufficient to defeat the defendant’s motion
for summary judgment. The rule exempting articles of public inter-
est from the operation of the Civil Rights Law would, as a practical
ma er, lose much of its force if publishers of articles which are at
least prima facie newsworthy were required to incur the expense of a
trial to meet such general and insubstantial accusations of disguised
advertising. …
Finally, it should be emphasized that we do not mean to suggest
that a publisher who has employed a professional model to pose for
pictures to be used in an article may avoid the agreed fee, or oth-
erwise ignore contractual arrangements, if the model’s pictures are
used to illustrate a newsworthy article or one involving ma ers of
public interest. Although the complaint alludes to an agreement be-
tween the parties, the plaintiff has not sought to enforce a contract or
recover damages for a breach. Since the plaintiff chose to frame his
complaint entirely in terms of rights covered by the Civil Rights Law,
which we have concluded is not applicable in this case, the complaint
should be dismissed.
Washington v. Brown & Williamson Tobacco Corp.
1984 WL 63629223, U.S.P.Q. 1116 (E.D.
Pa. 1984)
Grover Washington, Jr., a well-known jazz saxophonist, alleges an ad-
vertising campaign invaded his right of publicity and contains false
A. RIGHT OF PUBLICITY 729
representation of sponsorship. The advertisements at issue were
prepared as part of a “Kool” cigare e campaign and include pho-
tographs of an individual whom plaintiff claims looks like him. As
a result of this alleged resemblance, it is asserted that the defendants
have falsely represented to the public that the plaintiff endorses Kools
and have appropriated for themselves the commercial value of plain-
tiff’s image and likeness. Plaintiff has asserted claims for false repre-
sentation and designation of sponsorship under section 43(a) of the
Lanham Act, 15 U.S.C. § 1125(a), and has also asserted pendent state
claims for violation of his right of publicity, unjust enrichment, and
quantum meruit.
The gist of the campaign was to display various musicians pho-
tographed playing instruments with the Kool logo and advertising
copy superimposed upon the photographs. The music theme was
selected because of the perception that music conveyed a positive im-
age that would appeal to a broad selection of consumers. In particu-
lar, jazz was believed to offer the broadest possible appeal because it
allowed the most personal interpretation for the viewer. (Dearth dep.
at 33).
After the theme had been decided upon, studio photographs were
taken of various musicians playing their instruments. Actual mu-
sicians were used, rather than models, because it was believed that
musicians would enhance the realism of the advertisements.
Among those picked was Ronald L. Brown, the individual whose
photograph the plaintiff alleges bears a likeness to him. Brown is a Grover Washington, Jr.
professional musician who is accomplished in playing the saxophone,
among other instruments. He was selected to appear in the advertise-
ments because he looked “appropriate.” [Three employees,] Lewis,
Dearth, and Vail, had the primary responsibility for the creation and
development of the campaign. None had ever seen Grover Washing-
ton or his photographs. In fact, of these three individuals only Lewis
had ever heard of the plaintiff prior to the commencement of this lit-
igation.
In January, 1982, the defendants began their music campaign na-
tionwide, with advertisements appearing in newspapers, magazines,
and on bill boards. The two advertisements at issue were among
those initially circulated. These advertisements show a black male,
with short hair and a beard playing the saxophone. In one, Brown
is photographed from the side and is standing relatively erect in an
open collar white shirt. In the other, he is again photographed from
the side, but is bent forward and is wearing a tweed coat. After view-
ing these advertisements, plaintiff commenced this action.
Defendants have premised their motion for summary judgment
upon their assertion that it is undisputed the resemblance between
the photograph of Ronald Brown and plaintiff was wholly coinciden- Kool ad featuring Ronald L. Brown
730 CHAPTER 8. PERSONALITY RIGHTS
tal because the individuals responsible for the creation and develop-
ment of the campaign had never seen the plaintiff or his picture prior
to the commencement of this litigation. Therefore, they argue, there
was no intent to either confuse the public as to the plaintiff’s sponsor-
Compare Flake v. Greensboro News Co., ship of their product or invade plaintiff’s right of publicity.
195 S.E. 55 (N.C. 1938), where the de- Admi edly, the case at bar presents a close question. In their de-
fendant published an ad reading "Keep
positions, Vail, Dearth, and Lewis stated that they had never seen
that Sylph-Like Figure by eating more
of Melt's Rye and Whole Wheat Bread, plaintiff or his photograph at the time they were developing the Kool
says Mlle. Sally Payne, exotic red haired advertising campaign. Not surprisingly, plaintiff has been unable to
Venus" but by mistake used a photo- rebut this assertion directly since information relating to an individ-
graph of Nancy Flake rather than one ual’s state of mind is generally within that person’s exclusive knowl-
of Sally Payne. The court held, "Upon
edge. Instead, plaintiff relies upon circumstantial evidence which he
the present record, from which it ap-
pears that said photograph was used contends demonstrates that in fact the defendants intentionally chose
by mistake and without malice and that Ronald Brown’s photograph to lead the public to believe that plain-
the defendants immediately desisted tiff endorsed the advertised products. Specifically, plaintiff points to
from the use thereof upon the discov- his solicitation by agents of Brown & Williamson to perform in the
ery of the mistake and made due apol-
ogy therefor, the plaintiff would be en-
Kool Jazz Festival, an alleged pa ern of displaying the disputed ad-
titled to a judgment for nominal dam- vertisement in cities in which plaintiff performed during the summer
ages only." of 1982, and the use of Milt Jackson, another renowned jazz musician,
as a model for the advertising campaign, as well as a host of other rel-
atively minor factual issues. However speculative they may be, the
inferences to be drawn from such facts are not questions for the court
to resolve. The task of making factual inferences must be done by
the jury. Moreover, because the issue of intent is a material fact, the
jury must be given an opportunity to observe the demeanor of Vail,
Dearth, and Lewis to evaluate the credibility of each.
One final issue must be addressed. Defendants argue that the
first amendment protects against liability where the cause of action
is based on a coincidental, unintended resemblance. Obviously, this
begs the question of whether the resemblance is in fact coincidental.
If it is ultimately determined that the defendants intentionally chose
the photographs of Ronald Brown in an effort to avail themselves
of the commercial value of plaintiff’s likeness, the first amendment
would not provide the absolute protection defendants seek. False
or misleading advertising is not within the ambit of absolute first
amendment protection.
b Secondary Liability
As with false advertising, there’s not a think body of caselaw on sec-
Greensboro Daily News ad misidentify- ondary liability for right of publicity violations, but there is enough
ing Nancy Flake as Sally Payne to sketch its contours.
Perfect 10, Inc. v. Cybernet Ventures, Inc.
213 F.Supp.2d 1146 (C.D. Cal. 2002)
A. RIGHT OF PUBLICITY 731
[Perfect 10 sold ”’classy’ pictures of nude women without breast im-
plants, cosmetic surgery, or the like” in a magazine and website.
Cybernet provided age-verification services for more than 300,000
pornographic websites. According to Perfect 10, approximately
900 of those sites displayed Perfect 10’s images without permission.
Many of the models in those photographs had assigned their rights
of publicity to Perfect 10.
On copyright, the court held that Cybernet did not directly in-
fringe Perfect 10’s copyrights but could potentially be liable as a con-
tributory or a vicarious infringer, and that it was unlikely that Cyber-
net qualified for the § 512(c) safe harbor for various reasons, includ-
ing that it had failed to reasonably implement a policy to terminate
repeat infringers.]
Neither party contests that third parties operating under the
Adult Check name have infringed the rights of publicity assigned to
Perfect 10 by a number of models. . Nor does either party suggest that
direct liability would not be appropriate against those third-parties
under either theory. Similarly, Perfect 10 does not assert any direct
liability theory against Cybernet. The likelihood of success thus boils
down to a question of “aiding and abe ing.”
California has adopted the joint liability principle laid out in the
Restatement (Second) of Torts § 876. Under the Restatement,
For harm resulting to a third person from the tortious con-
duct of another, one is subject to liability if he:
a) does a tortious act in concert with the other in pursuit
to a common design with him, or
b) knows that the other’s conduct constitutes a breach
of duty and gives substantial assistance or encourage-
ment so to conduct himself, or
c) gives substantial assistance to the other in accom-
plishing a tortious result and his own conduct, sepa-
rately considered, constitutes a breach of duty to the
third person.
Cybernet argues that there is no case directly recognizing the appli-
cability of this doctrine to the right of publicity torts. The Court finds
this argument unpersuasive, as the Restatement provides a back-
ground principle for all tort liability in the state of California.
Nor does the Court find convincing Cybernet’s argument that the
right of publicity itself contains an actual knowledge requirement.
Cybernet’s citations refer to the requirement that broadcasters of ad-
vertisements must have actual knowledge before they can be held
liable. Cybernet does not claim to be a medium used for advertising,
and the Court only focuses on rights of publicity infringements lo-
732 CHAPTER 8. PERSONALITY RIGHTS
cated on the websites, not infringements associated with webmaster
banner ads. Rather, Cybernet argues that the knowledge requirement
of section 3344(f) is a requirement for “aider and abe or” liability un-
der the statute.
The Court concludes otherwise. Although section 3344(f) pro-
vides clear evidence that secondary liability can be imposed for vi-
olations of publicity rights, it also provides evidence that the Califor-
nia legislature created a heightened knowledge requirement limited
to broadcasters of advertisements. The California legislature has not
extended this requirement to defendants like Cybernet. The Court
therefore defaults to the background assumption that secondary lia-
bility applies to right of publicity claims and it is to be found in con-
formance with the requirements established in the Restatement.
Perfect 10 has primarily focused its secondary theory of liability
on the second branch of the Restatement, requiring actual knowl-
edge of the tortious conduct and substantial participation. The Court
agrees with Perfect 10 that there is a serious question on the merits of
the substantial participation prong. As it stands, in the absence of ar-
gument to the contrary, the Court looks to the contributory infringe-
ment framework of copyright trademark law, where it has already
found just such participation, thus leading the Court to conclude Per-
fect 10 has established a strong likelihood of success with regard to
Cybernet’s substantial participation.
The Court recognizes that application of secondary liability princi-
ples is particularly applicable for claims of unfair competition, as the
California Supreme Court recognized as far back as 1935: “When a
scheme is evolved which on its face violates the fundamental rules of
honesty and fair dealing, a court of equity is not impotent to frustrate
American Philatelic: 46 P.2d 135 (1935) the consummation because the scheme is an original one.” American
Philatelic Soc’y v. Claibourne
In American Philatelic, a purveyor of stamps altered his normal
stamps to resemble rare perforated stamps. He then sold these
stamps to stamp dealers with clear notice that the stamps were not
of the rare variety. Nevertheless, his sales brochures and pricing es-
tablished that he both anticipated and effectively encouraged these
dealers to sell the stamps to the public as rare stamps. The California
Supreme Court had no problem finding these claims stated a claim
under the unfair competition law. American Philatelic’s equity lan-
guage reinforce the Court’s conclusion that Perfect 10’s theory of aid-
ing and abe ing liability for Cybernet based on third-party violations
of various rights of publicity has a strong likelihood of success.
A. RIGHT OF PUBLICITY 733
6 Defenses
The types of defenses to the right of publicity should be familiar by
now. First sale applies, but pay a ention to the details. And there
are also defenses for newsworthy uses and for creative ones. Very,
very, very loosely, newsworthiness incorporates some of the same
concerns as descriptive and nominative fair uses. Again, pay a en-
tion to the details; things may be different here than elsewhere.
Allison v. Vintage Sports Plaques
136 F.3d 1443 (11th Cir. 1998)
The issue presented in this case is whether the ”first-sale doctrine,”
a well-established limitation on intellectual property rights, applies
to the common-law right of publicity. We hold that it does. Accord-
ingly, we affirm the district court, which granted summary judgment
to the defendant.
Elisa Allison is the widow of Clifford Allison, a well-known race-
car driver. Orel Hershisher is a well-known professional baseball
player. [Both Clifford Allison and Hershisher had licensing contacts
for trading cards.]
Vintage Sports Plaques (”Vintage”) purchases trading cards from
licensed card manufacturers and distributors and, without altering
the cards in any way, frames them by mounting individual cards be-
tween a transparent acrylic sheet and a wood board. Vintage then
labels each plaque with an identification plate bearing the name of
the player or team represented. In addition to the mounted trading
card, some of the plaques feature a clock with a sports motif. Vin-
tage markets each plaque as a ”Limited Edition” and an ”Authentic
Collectible.” Vintage is not a party to any licensing agreement that
grants it the right to use the appellants’ names or likenesses for com-
mercial purposes and has never paid a royalty or commission to the
appellants for its use of their names or images. Appellants presum-
ably have received, however, pursuant to their respective licensing
agreements, royalties from the card manufacturers and distributors
for the initial sale of the cards to Vintage.
Appellants argue that we should not apply the first-sale doctrine
to common-law actions to enforce the right of publicity. There is vir-
tually no case law in any state addressing the application of the first-
sale doctrine to the right of publicity, perhaps because the applicabil-
ity of the doctrine is taken for granted.8
Appellants argue that the right of publicity differs from other
forms of intellectual property because the former protects ”identity,”
whereas the la er protect ”a particular photograph or product.” The
first-sale doctrine should not apply, they reason, because a celebrity’s
8
We note that some states that statutorily have recognized a right of publicity
have codified the first-sale doctrine. Vintage Sports Plaque
734 CHAPTER 8. PERSONALITY RIGHTS
identity continues to travel with the tangible property in which it is
embodied after the first sale. We find two significant problems with
appellants’ argument. First, the distinction that appellants draw be-
tween what is protected by the right of publicity and what is pro-
tected by other forms of intellectual property rights, such as copy-
right, is not sound. Copyright law, for example, does not exist merely
to protect the tangible items, such as books and paintings, in which
the underlying expressive material is embodied; rather, it protects as
well the author’s or artist’s particular expression that is included in
the tangible item. The copyright law thus would be violated not only
by directly photocopying a protected work, but also by publishing
language or images that are substantially similar to that contained in
the copyrighted work.
Second, and more important in our view, accepting appellants’
argument would have profoundly negative effects on numerous in-
dustries and would grant a monopoly to celebrities over their identi-
ties that would upset the delicate balance between the interests of the
celebrity and those of the public. Indeed, a decision by this court not
to apply the first-sale doctrine to right of publicity actions would ren-
der tortious the resale of sports trading cards and memorabilia and
thus would have a profound effect on the market for trading cards,
which now supports a multi-billion dollar industry. Such a holding
presumably also would prevent, for example, framing a magazine ad-
vertisement that bears the image of a celebrity and reselling it as a col-
lector’s item, reselling an empty cereal box that bears a celebrity’s en-
dorsement, or even reselling a used poster promoting a professional
sports team. Refusing to apply the first-sale doctrine to the right of
publicity also presumably would prevent a child from selling to his
friend a baseball card that he had purchased, a consequence that un-
doubtedly would be contrary to the policies supporting that right.
A holding that the first-sale doctrine does limit the right of public-
ity, on the other hand, would not eliminate completely a celebrity’s
control over the use of her name or image; the right of publicity pro-
tects against unauthorized use of an image, and a celebrity would
continue to enjoy the right to license the use of her image in the first
instance – and thus enjoy the power to determine when, or if, her im-
age will be distributed.
The issue before us, then, is whether the district court properly re-
solved as a ma er of law that Vintage’s plaques merely are the cards
themselves repackaged, rather than products separate and distinct
from the trading cards they incorporate. If they are the la er, as ap-
pellants contend that they are, then arguably Vintage is selling a prod-
uct by commercially exploiting the likenesses of appellants intending
to engender profits to their enterprise, a practice against which the
right of publicity seems clearly to protect.
A. RIGHT OF PUBLICITY 735
We conclude that the district court properly determined that, as
a ma er of law, Vintage merely resells cards that it lawfully obtains.
We think it unlikely that anyone would purchase one of Vintage’s
plaques for any reason other than to obtain a display of the mounted
cards themselves. Although we recognize that the plaques that in-
clude a clock pose a closer case, we conclude that it is unlikely that
anyone would purchase one of the clock plaques simply to obtain a
means of telling time, believing the clock to be, for example, a ”Her-
shisher Clock” or an ”Allison Clock.”
Rosa and Raymond Parks Institute for Self Development v. Target Corp.
90 F. Supp. 3d 1256 (M.D. Ala. 2015)
The Parks Institute is a Michigan 501(c)(3) corporation that owns
the name and likeness of the late Rosa Parks. Rosa Parks, who
was African-American, became an icon of the Civil Rights move-
ment when she refused to surrender her seat to a white passenger
on a racially segregated Montgomery, Alabama bus. Her actions ig-
nited the Montgomery Bus Boyco . Target is a national retail cor-
poration headquartered in Minneapolis, Minnesota. Target operates
more than 1,800 retail stores across the United States, as well as an
e-commerce website.
Beginning in 2009, Target offered for sale a collage-styled plaque
in a limited number of its retail stores. The plaque contained the fol-
lowing images, as described by its creator Stephanie Workman Mar-
ro : (1) a stylized rendering of the phrase ”Civil Rights”; (2) an illus-
trated exhibit submi ed in Browder v. Gayle, depicting where Rosa Browder: 142 F. Supp. 707 (M.D. Ala.
Parks was si ing on the bus prior to her arrest; (3) a stylized render- 1956)
ing of the word ”Change”; (4) an illustration of the Cleveland Avenue
bus; (5) a stylized rendering of Rosa Parks’s name and dates of birth
and death; (6) a picture of Rosa Parks’s Congressional Gold Medal; (7)
a photograph of Rosa Parks and Martin Luther King, Jr.; and (8) an
inspirational statement made by Rosa Parks. It was this plaque that
Elaine Steele, co-founder of the Parks Institute, and Anita Peek, Exec-
utive Director of the Parks Institute, discovered when they visited a
number of Target retail stores located in the state of Michigan.
Upon realizing that Target was selling a plaque adorned with im-
ages of and related to Rosa Parks, the Parks Institute filed this lawsuit
on November 6, 2013. Following a period of discovery, it became
clear that the lawsuit challenged Target’s sale of eight items in ad-
dition to the plaque: 1) the book Rosa Parks: My Story, by authors
Rosa Parks and Jim Haskins; 2) the book Who Was Rosa Parks?, by au-
thor Yona Zeldis McDonough and illustrator Nancy Harrison; 3) the
book Rosa Parks (Childhood of Famous Americans), by author Kathleen Rosa Parks plaque
Kudlinkski and illustrator Maryl Henderson; 4) the book Rosa Parks,
by author Eloise Greenfield and illustrator Gil Ashby; 5) the book A
Picture Book of Rosa Parks, by author David A. Adler and illustrator
736 CHAPTER 8. PERSONALITY RIGHTS
Robert Casilla; 6) the book, The Rebellious Life of Mrs. Rosa Parks, by
author Jeanne Theoharis; 7) the book The Story of Rosa Parks, by author
Patricia A. Pingry and illustrator Steven Walker; and 8) the American
television movie The Rosa Parks Story, wri en by Paris Qualles and
directed by Julie Dash.
Target argues that under Michigan law – and Alabama law – sum-
mary judgment is proper as to all of the Parks Institute’s claims be-
cause the plaque and biographical works are protected fully by the
First Amendment as biographical works that concern ma ers of le-
gitimate public interest. In opposition, the Parks Institute argues that
Target’s ”reliance on the First Amendment as protection for its action
in this case is misplaced.” Specifically, the Parks Institute avers that
there is no legal precedent that would allow Target to exploit Rosa
Parks’s image or likeness for its own commercial purposes.
Michigan law is fairly limited with regard to actions alleging the
unlawful commercial exploitation of a celebrity or public figure’s
Ruffin-Steinback: 82 F. Supp. 2d 723 identity. See Ruffin-Steinback v. dePasse (discerning how Michigan
(E.D. Mich. 2000) courts would address a claim for unlawfully depicting a public fig-
ure’s life story without consent by looking to ”all available sources”
because the Michigan Supreme Court had not spoken to the issue). In
2000, however, the Michigan federal district court in Ruffin-Steinback
addressed ”state law tort claims for violation of the right of public-
ity, unjust enrichment, negligence, conspiracy, invasion of privacy,
defamation and intentional infliction of emotional distress” brought
by the heirs and personal representatives of members of the Temp-
tations music group and associated individuals. In that case, the
plaintiffs challenged the National Broadcasting Company’s airing of
a two-night mini-series covering the story of the Temptations. The
mini-series was told from the perspective of Otis Williams, one of
the group’s founding members, but covered the lives of each of the
group’s members in detail.
[The Ruffin-Steinback court referred to Restatement (Third) of Un-
fair Competition § 47]:
The name, likeness, and other indicia of a person’s iden-
tity are used for the purposes of trade under the rule
stated in § 46 if they are used in advertising the user’s
goods or services, or are placed on merchandise marketed
by the user, or are used in connection with services ren-
dered by the user. However, use for the purposes of trade
does not ordinarily include the use of a person’s identity
in news reporting, commentary, entertainment, works of
fiction or nonfiction, or in advertising that is incidental to
such uses.
The court also noted that comment c to S 47 states that ”the right of
A. RIGHT OF PUBLICITY 737
publicity is not infringed by the dissemination of an unauthorized
print or broadcast biography.”
After looking to the Restatement, the court surveyed case law
and confirmed that courts in various jurisdictions treated unlicensed
works of biography similarly. Across jurisdictions, courts had been
reluctant ”to extend the right of publicity to depictions of life-stories
based on First Amendment considerations.” Id. Accordingly, the
court concluded that ”Michigan courts would not extend [the] right
of publicity tort” to prohibit biographical works and, ultimately, dis-
missed all of the derivative claims – unjust enrichment, conspiracy,
and negligence – finding that they were dependent on the plaintiffs’
right of publicity claims.
In this case, the Parks Institute is challenging Target’s sale of eight
biographical works, the majority of which are simplified accounts of
Rosa Parks’s life and accomplishments wri en to educate children
about the Civil Rights movement and to demonstrate how one coura-
geous individual can bring about significant change. The Parks In-
stitute does not claim that any of the biographical works cast Rosa
Parks in a false or defamatory light – separate causes of action for the
dissemination of inaccurate information. Rather, it bases the entirety
of its lawsuit on the idea that the First Amendment does not extend
to protect the unapproved commercial sale of items that depict the
name, likeness, story, or image of Rosa Parks.
For the reasons discussed at length in Ruffin-Steinback, however,
the Parks Institute is mistaken. The depiction of Rosa Parks’s life
story without the Parks Institute’s consent does not violate the Parks
Institute’s ownership rights to Rosa Parks’s name or likeness. To
quote from one of the biographical works at issue, Rosa Parks is per-
haps the most iconic heroine of the civil rights movement. And, as
both parties agree, one cannot talk about the Civil Rights movement
without including Rosa Parks. The importance of her story serves as
an apt reminder of why First Amendment protection for biographical
works is so vital.
Target’s sale of the seven books and one movie does not violate the
Parks Institute’s ownership rights in Rosa Parks’s name or likeness be-
cause they are biographical works. Accordingly, summary judgment
is due to be entered in favor of Target as to those eight items on the
Parks Institute’s right of publicity claim, as well as the unjust enrich-
ment and misappropriation claims since they are derivative causes of
action.
Because the collage-styled plaque is less of a biographical work
and more akin to a work of art, the legality of Target’s sale of the
plaque requires a separate analysis. The Michigan Supreme Court
has recognized that a plaintiff may bring suit for the misappropria-
tion of his or her name or likeness under its invasion of privacy tort.
738 CHAPTER 8. PERSONALITY RIGHTS
This cause of action is founded upon the interest of the individual
in the exclusive use of his own identity, in so far as it is represented
by his name or likeness, and in so far as the use may be of benefit
to him or to others. Because the tort has the potential to offer a trou-
blingly broad swath of protection, however, courts that have recog-
nized the appropriation tort have also uniformly held that the First
Amendment bars appropriation liability for the use of a name or like-
ness in a publication that concerns ma ers that are newsworthy or of
legitimate public concern.
The question whether a publication is sufficiently a ma er of pub-
lic interest to be protected by the privilege is ordinarily decided by
the court as a question of law. To make the decision, a court must ex-
amine the nature of the appropriation. For while a defendant can be
liable for the tort of misappropriation of likeness if defendant’s use of
plaintiff’s likeness was for a predominately commercial purpose, the
First Amendment will protect the appropriation if it has a redeeming
public interest, news, or historical value.
No doubt Target’s sale of the plaque served a commercial purpose.
Michigan courts, however, have applied the legitimate public interest
privilege to instances where the misappropriation occurred for the
Battaglieri: 680 N.W.2d 915 (Mich. Ct. purposes of making a profit. See, e.g., Ba aglieri v. Mackinac Center
App. 2004) For Public Policy (finding that a fundraising le er was within the priv-
ilege when it used quotes from the plaintiff without his consent be-
cause the quotes spoke to important policy issues). Additionally, the
legitimate public interest exception does not merely extend to cover
current events, as ma ers related to education and information are
within the scope of legitimate concern. As provided by the Restate-
ment (Second) of Torts:
Restatement (Second) Torts S 652D, The scope of a ma er of legitimate concern to the public
comment j is not limited to ”news,” in the sense of current events or
activities. It extends also to the use of names, likenesses
or fact in giving information to the public for purposes of
education, amusement or enlightenment, when the public
may reasonably be expected to have a legitimate interest
in what is published.
Expanding on this idea, a federal district court applying Michigan
law explained that the ”First Amendment privilege does not only ex-
tend to news in the sense of current events, but extends far beyond to
include all types of factual, educational, and historical data, or even
entertainment and amusement, concerning interesting phases of hu-
Armstrong: 655 F. Supp. 2d 779 (E.D. man activity in general.” Armstrong v. Eagle Rock Entm’t, Inc.
Mich. 2009) Applying these principles, the court found that Eagle Rock Enter-
tainment’s decision to use Louis Armstrong’s picture on the cover
liner of its DVD entitled, ”Mahavishnu Orchestra, Live at Montreux,
A. RIGHT OF PUBLICITY 739
1984, 1974,” without consent was protected by the First Amendment.
Specifically, under Michigan law, the court concluded that the DVD
and its packaging had an historical and entertainment value for jazz
fans everywhere. Michigan law and the First Amendment require a
similar determination in this case.
The collage-styled plaque contains several elements reminiscent
of the historic Civil Rights movement. In fact, by including a picture
of Rosa Parks and Martin Luther King, Jr., alongside stylized render-
ings of the words ”Civil Rights” and ”Change,” Stephanie Workman
Marro , the plaque’s creator, sought to inspire viewers to ”stand up
for what they believe is right” while telling the important story of
Rosa Parks’s courage during the Civil Rights movement. There can
be no doubt that Rosa Parks and her involvement in the Civil Rights
movement are ma ers of utmost importance, both historically and
educationally. Accordingly, just as Louis Armstrong’s image is sig-
nificant to the history of jazz, Rosa Parks’s name and image are his-
torically significant to the fight for equality in the South. Because Tar-
get’s sale of the collage-style plaque is protected by the First Amend-
ment, Target is entitled to summary judgment on all of the Parks In-
stitute’s claims regarding the plaque, in addition to the biographical
works.
No Doubt v. Activision Publishing, Inc.
122 Cal. Rptr. 3d 397 (Ct. App. 2011)
The rock band No Doubt brought suit against the video game pub-
lisher Activision Publishing, Inc. (Activision), based on Activision’s
release of the Band Hero video game featuring computer-generated
images of the members of No Doubt. Applying the transformative
use test first adopted in Comedy III Productions, Inc. v. Gary Saderup, Comedy III: 21 P.3d 797 (2001)
Inc., we conclude that the creative elements of the Band Hero video
game do not transform the images of No Doubt’s band members into
anything more than literal, fungible reproductions of their likenesses.
Therefore, we reject Activision’s contention that No Doubt’s right of
publicity claim is barred by the First Amendment. In addition, we dis-
agree with Activision’s contention that No Doubt must demonstrate
that Activision used the likenesses of the band members in an “ex-
plicitly misleading” way in order to prevail on its unfair competition
claim.
F P B
Defendant Activision is a leading international video game distrib-
utor and the creator and owner of the interactive Band Hero video
game. The game allows players to simulate performing in a rock
band in time with popular songs. By choosing from a number of
playable characters, known as “avatars,” players can “be” a guitarist,
a singer, or a drummer. Some of the available avatars are fictional
740 CHAPTER 8. PERSONALITY RIGHTS
characters created and designed by Activision while others are digi-
tal representations of real-life rock stars. Players can also design their
own unique fictional avatars. Represented by the avatars of their
choosing, players “perform” in various se ings, such as venues in
Paris and Madrid, a rock show at a shopping mall, and even outer
space.
In addition to allowing players to perform over 60 popular songs,
Band Hero permits players to create their own music and then play
their compositions using an avatar. As with all the Guitar Hero video
games, as players advance in the Band Hero game, they can “unlock”
characters and use them to play songs of the players’ choosing, in-
cluding songs the players have composed as well as songs made fa-
mous by other artists.
Plaintiff No Doubt is an internationally recognized rock band fea-
turing Gwen Stefani as its lead singer. No Doubt entered into a profes-
sional services and character licensing agreement (Agreement) with
Activision permi ing Activision to include No Doubt as one of the
rock bands featured in Band Hero.
As part of the Agreement, Activision agreed to license no more
than three No Doubt songs for use in Band Hero, subject to No
Doubt’s approval over the song choice. (Ultimately, the game in-
cluded two No Doubt songs.)
Pursuant to the Agreement, the members of No Doubt partici-
pated in a full-day motion capture photography session at Activi-
Band Hero screenshot sion’s studios so that the band members’ Band Hero avatars would
accurately reflect their appearances, movements, and sounds. No
Doubt then closely reviewed the motion capture photography and
the details related to the appearance and features of their avatars to
ensure the representations would meet their approval.
Approximately two weeks prior to the release of Band Hero, No
Doubt became aware of the “unlocking” feature of the game that
would permit players to use No Doubt’s avatars to perform any of
the songs included in the game, including songs that No Doubt main-
tains it never would have performed. The band also learned that fe-
male lead singer Gwen Stefani’s avatar could be made to sing in a
male voice, and the male band members’ avatars could be manipu-
lated to sing songs in female voices. The individual band member
avatars could be made to perform solo, without their band members,
as well as with members of other groups. No Doubt contends that
in the numerous communications with No Doubt, Activision never
communicated its intention to permit such manipulations of the No
Doubt avatars. Rather, No Doubt insists, Activision represented that
No Doubt’s likenesses within Band Hero would be used only in con-
junction with the selected No Doubt songs.
When No Doubt complained about the additional exploitation of
A. RIGHT OF PUBLICITY 741
their likenesses, Activision admi ed that it had hired actors to imper-
sonate No Doubt in order to create the representations of the band
members’ performances of the additional musical works other than
the No Doubt songs licensed for the game. No Doubt demanded that
Activision remove the “unlocking” feature for No Doubt’s avatars,
but Activision refused. Activision contends that No Doubt’s request
came only after the programming had been finalized and the manu-
facturers had approved the game for manufacture.
No Doubt filed a complaint against Activision in superior court,
seeking injunctive relief and damages for Activision’s allegedly unau-
thorized exploitation of No Doubt’s name, performances and like-
nesses. No Doubt alleged six causes of action: (1) fraudulent induce-
ment; (2) violation of statutory and common law right of publicity; (3)
breach of contract; (4) unfair business practices in violation of Busi-
ness and Professions Code section 17200; (5) injunctive relief; and (6)
rescission.
II. N D ’ C A P A
Video games generally are considered “expressive works” subject
to First Amendment protections. Further, Activision’s use of No “Like the protected books, plays, and
Doubt’s likenesses in Band Hero is a ma er of public interest be- movies that preceded them, video
games communicate ideas—and even
cause of the widespread fame No Doubt has achieved; there is a pub-
social messages—through many famil-
lic interest which a aches to people who, by their accomplishments, iar literary devices (such as characters,
mode of living, professional standing or calling, create a legitimate dialogue, plot, and music) and through
and widespread a ention to their activities. Accordingly, the use of features distinctive to the medium
No Doubt’s likenesses in the Band Hero video game meets the first (such as the player’s interaction with
the virtual world). That suffices to
requirement of the anti-SLAPP statute.
confer First Amendment protection.”
Brown v. Entertainment Merchant’s
III. N D ’ P S M
Ass’n, 131 S. Ct. 2729 (2011)
Claims
A. Right of Publicity Claim
No Doubt has alleged a claim for violation of the right of publicity
under Civil Code section 3344 as well as under common law. Sec-
tion 3344 provides in pertinent part: “Any person who knowingly
uses another’s name, voice, signature, photograph, or likeness, in any
manner, on or in products, merchandise, or goods, or for purposes of
advertising or selling, or soliciting purchases of, products, merchan-
dise, goods or services, without such person’s prior consent . . . shall
be liable for any damages sustained by the person or persons injured
as a result thereof.” The common law claim for misappropriation of
the right of publicity is similar, except there is no requirement that
the misappropriation have been done knowingly.
1. “Transformative Use” Defense
742 CHAPTER 8. PERSONALITY RIGHTS
Activision contends that its use of No Doubt’s likenesses in Band
Hero constitutes “protected First Amendment activity involving an
artistic work,” and thus No Doubt’s right of publicity claim is com-
pletely barred. However, Activision’s First Amendment right of free
expression is in tension with the rights of No Doubt to control the
commercial exploitation of its members’ likenesses.
In Comedy III, our Supreme Court directly confronted this tension.
The court in articulated
what is essentially a balancing test between the First
Amendment and the right of publicity based on whether
the work in question adds significant creative elements
so as to be transformed into something more than a mere
celebrity likeness or imitation.
[Thus,] when artistic expression takes the form of a lit-
eral 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 artist.
[A celebrity may enforce] the right to monopolize the
production of conventional, more or less fungible, images
of that celebrity. On the other hand, a work claimed to
violate a celebrity’s right of publicity is entitled to First
Amendment protection where added creative elements
significantly transform the celebrity depiction.
Another way of stating the inquiry is whether the
celebrity likeness is one of the ”raw materials” from which
an original work is synthesized, or whether the depiction
or imitation of the celebrity is the very sum and substance
of the work in question. We ask, in other words, whether a
product containing a celebrity’s likeness is so transformed
that it has become primarily the defendant’s own expres-
sion rather than the celebrity’s likeness. [The inquiry boils
down to] whether the literal and imitative or the creative
elements predominate in the work.
The court then applied its newly minted “transformative use” test
to the facts before it. The plaintiff was the owner of the rights to
the comedy act known as The Three Stooges. The defendant was
an artist who sold lithographs and T-shirts bearing a likeness of The
Three Stooges reproduced from a charcoal drawing the artist had cre-
ated. The owner sued for violation of the right of publicity under
Civil Code section 3344.1, the companion statute to section 3344 that
extends the right of publicity to the heirs and assignees of deceased
Saderup's Three Stooges drawing
A. RIGHT OF PUBLICITY 743
personalities.5
The court rejected the artist’s contention that the plaintiff’s claim
was barred by the First Amendment. The court could “discern no sig-
nificant transformative or creative contribution” in the artist’s literal
reproduction of the likenesses of The Three Stooges in its charcoal
drawing. The artist’s “undeniable skill is manifestly subordinated
to the overall goal of creating literal, conventional depictions of The
Three Stooges so as to exploit their fame.”
The court was careful to note that, in some circumstances, literal
reproductions of celebrity portraits may be protected by the First
Amendment. The court used the example of silk screens created by
artist Andy Warhol using images of celebrities such as Marilyn Mon-
roe, Elizabeth Taylor, and Elvis Presley. “Through distortion and the
careful manipulation of context, Warhol was able to convey a mes-
sage that went beyond the commercial exploitation of celebrity im-
ages and became a form of ironic social comment on the dehuman-
ization of celebrity itself.”
The Supreme Court again addressed the balance between the First
Amendment and celebrities’ rights of publicity in Winter v. DC Comics
in which the defendant was sued for misappropriation under section
3344 after publishing a series of comic books featuring two villain-
ous half-worm, half-human characters named the “Autumn broth-
ers.” The characters were quite obviously based on the musician Andy Warhol silkscreen of Marilyn Mon-
brothers Edgar and Johnny Winter, sharing their same long white roe
hair and albino features. Winter: 69 P.3d 473 (Cal. 2003)
Applying the “transformative use” test set forth in Comedy III, the
court held that the Winter brothers’ claim was barred by the First
Amendment as a ma er of law. The court found that the comic de-
pictions at issue were
not just conventional depictions of plaintiffs but contain
significant expressive content other than plaintiffs’ mere
likenesses. Although the fictional characters Johnny and
Edgar Autumn are less-than-subtle evocations of Johnny
and Edgar Winter, the books do not depict plaintiffs liter-
ally. Instead, plaintiffs are merely part of the raw mate-
rials from which the comic books were synthesized. To
the extent the drawings of the Autumn brothers resem-
ble plaintiffs at all, they are distorted for purposes of lam-
poon, parody, or caricature. And the Autumn brothers are
but cartoon characters—half-human and half-worm—in a
larger story, which is itself quite expressive.
Jonah Hex cover from Winter
The comic books featured “fanciful, creative characters, not pictures
5
The test developed in Comedy III applies equally to claims under section 3344.
744 CHAPTER 8. PERSONALITY RIGHTS
of the Winter brothers,” in stark contrast to Comedy III, where the
artist “essentially sold, and devoted fans bought, pictures of The
Three Stooges, not transformed expressive works by the artist.”
Kirby: 50 Cal. Rptr. 3d 607 (Ct. App. In Kirby v. Sega of America, Inc., the Court of Appeal applied
2006) the “transformative use” test in a case involving the alleged use of
a celebrity’s likeness in a video game. The plaintiff, Kierin Kirby,
achieved fame as the lead singer of the musical group Deee-Lite
which was popular in the early 1990’s. Kirby alleged that video game
distributor Sega violated her common law and statutory rights of
publicity when it released the video game Space Channel 5 that in-
cluded as its main character a computer-generated woman named
“Ulala” allegedly based on Kirby.
SC5 is set in outer space, in the 25th century, and Ulala is a reporter
who is sent to “investigate an invasion of Earth by dance-loving aliens
who shoot earthlings with ray guns, causing them to dance uncon-
trollably.” To advance in the game, players a empt to have Ulala
match the dance moves of various aliens and competitor reporters. A
Japanese choreographer and dancer created Ulala’s six main dance
moves.
Kirby contended that Sega misappropriated her likeness by giv-
ing Ulala similar facial features to her own as well as by borrowing
her distinctive look that combines retro and futuristic elements, in-
cluding red or pink hair, platform shoes, brightly colored formfi ing
clothes, and short skirts. In addition, Ulala’s name is a phonetic vari-
ation of “ooh la la,” which Kirby alleged was her “signature” lyrical
Ulala from Space Channel 5 expression included in three of her songs.
The Court of Appeal concluded that there was a question of fact as
to whether Sega had misappropriated Kirby’s likeness in creating the
character Ulala. However, the court found that even assuming Sega
used Kirby’s likeness, the First Amendment provided a complete de-
fense. “Notwithstanding certain similarities, Ulala is more than a
mere likeness or literal depiction of Kirby,” as Ulala’s physique, pri-
mary hairstyle and costumes, and dance moves differed from Kirby’s.
“Moreover, the se ing for the game that features Ulala—as a space-
age reporter in the 25th century—is unlike any public depiction of
Kirby. . . . Taken together, these differences demonstrate Ulala is
‘transformative,’ and respondents added creative elements to create a
new expression” such that the First Amendment barred Kirby’s claim.
Ulala was not merely “an imitative character contrived of minor digi-
tal enhancements and manipulations”, and unlike the use of the like-
nesses of The Three Stooges in Comedy III, any imitation of Kirby’s
likeness was not “the sum and substance” of Ulala’s character Rather,
like the “Autumn brothers” comic book characters in Winter, “Ulala
is a “fanciful, creative character” who exists in the context of a unique
and expressive video game.”
A. RIGHT OF PUBLICITY 745
2. Use of No Doubt’s Likenesses in Band Hero Is Not “Transformative”
Activision does not dispute that the avatars of No Doubt are
computer-generated recreations of the real band members, painstak-
ingly designed to mimic their likenesses. Indeed, as part of the licens-
ing agreement between Activision and No Doubt, No Doubt posed
for motion-capture photography to enable Activision to reproduce
their likenesses, movements, and sounds with precision. Activision
intentionally used these literal reproductions so that players could
choose to “be” the No Doubt rock stars. The game does not permit
players to alter the No Doubt avatars in any respect; they remain at
all times immutable images of the real celebrity musicians, in stark
contrast to the fanciful, creative characters in Winter and Kirby.
No Doubt asserts that such realistic depictions categorically dis-
qualify their Band Hero avatars from First Amendment protection.
However, as Comedy III held, even literal reproductions of celebrities
can be “transformed” into expressive works based on the context into
which the celebrity image is placed (noting, for instance, the Warhol
silk screens featuring celebrity portraits, through “careful manipula-
tion of context,” convey an ironic message about the “dehumaniza-
tion of celebrity” through reproductions of celebrity images); see also
ETW Corp. v. Jireh Publishing, Inc. [a painting featuring three literal ETW: 332 F.3d 915 (6th Cir. 2003)
likenesses of Tiger Woods in different poses in the foreground, with
the Augusta National Clubhouse behind him and the likenesses of
other famous golfing champions looking down on him, found wor-
thy of First Amendment protection because it was a “panorama” of
Woods’s historic 1997 victory at the world-famous Masters Tourna-
ment and conveyed a message about the significance of Woods’s
achievement through images suggesting that Woods would eventu-
ally join the ranks of the world’s best golfers].) Thus, when the con-
text into which a literal celebrity depiction is placed creates some-
thing new, with a further purpose or different character, altering the
Rick Rush portrait of Tiger Woods from
first likeness with new expression, meaning, or message, the depic- ETW
tion is protected by the First Amendment.
Nonetheless, although context may create protected expression in
the use of a celebrity’s literal likeness, the context in which Activision
uses the literal likenesses of No Doubt’s members does not qualify the
use of the likenesses for First Amendment protection. Activision con-
tends that as in Kirby, where Sega used Kirby’s likeness in a unique
and expressive video game, Activision’s use of No Doubt’s likenesses
in Band Hero is transformative because the video game shows the No
Doubt avatars “surrounded by unique, creative elements, including
in fanciful venues such as outer space . . . and performing songs
that No Doubt avowedly would never perform in real life.” Indeed,
according to Activision, No Doubt’s objection that the band can be
746 CHAPTER 8. PERSONALITY RIGHTS
made to perform songs it would never perform demonstrates that
the use of the No Doubt avatars is transformative.
However, that the members of No Doubt object to being shown
performing certain songs is irrelevant to whether that element of
Band Hero combined with others transforms the literal depictions of
No Doubt’s members into expression that is more Activision’s than
pure mimicry. In that inquiry, it is the differences between Kirby
and the instant case, not the similarities, which are determinative. In
Kirby, the pop singer was portrayed as an entirely new character—the
space-age news reporter Ulala. In Band Hero, by contrast, no ma er
what else occurs in the game during the depiction of the No Doubt
avatars, the avatars perform rock songs, the same activity by which
the band achieved and maintains its fame. Moreover, the avatars per-
form those songs as literal recreations of the band members. That the
Hilton: 599 F.3d 894 (9th Cir. 2010) avatars can be manipulated to perform at fanciful venues including
outer space or to sing songs the real band would object to singing, or
that the avatars appear in the context of a video game that contains
many other creative elements, does not transform the avatars into
anything other than exact depictions of No Doubt’s members doing
exactly what they do as celebrities. Hilton v. Hallmark Cards [Hall-
mark card featuring Paris Hilton’s head on a cartoon waitress’s body
was not a “transformative use” as in Kirby because, despite some dif-
ferences, the “basic se ing” was the same as an episode of Hilton’s
television show in which she is depicted as “born to privilege, work-
ing as a waitress”];6
Moreover, Activision’s use of lifelike depictions of No Doubt per-
forming songs is motivated by the commercial interest in using the
band’s fame to market Band Hero, because it encourages the band’s
sizeable fan base to purchase the game so as to perform as, or along-
Hallmark card from Hilton
6
An earlier Ninth Circuit decision, Hoffman v. Capital Cities/ABC, Inc., 255 F.3d
1180 (9th Cir. 2001), arguably reached a different conclusion on facts somewhat
similar to those in Hilton. In Hoffman, the court found that the First Amendment
barred Dustin Hoffman’s claim that Los Angeles Magazine had violated his right
of publicity when it published an article that included a photographic image of the
head of Hoffman in his “Tootsie” character superimposed on the body of a cartoon
male who was wearing an evening gown and high heels. The court only briefly ad-
dressed the transformative use defense, finding that “even if we were to consider
LAM an ‘artist’ and the altered ‘Tootsie’ photograph ‘artistic expression’ subject to
the Comedy III decision, there is no question that LAM’s publication of the ‘Tootsie’
photograph contained ‘significant transformative elements’” because “Hoffman’s
body was eliminated and a new, differently clothed body was substituted in its
place.” In Hilton, the Ninth Circuit noted that Hoffman had not addressed the trans-
formative use defense in great depth because the Supreme Court decided Comedy
III only after oral argument in the Hoffman case had taken place. Thus, Hilton con-
cluded that Hoffman was not controlling Ninth Circuit authority on the issue of the
transformative use defense. We similarly do not find Hoffman’s brief discussion or
L.A. Magazine article from Hoffman application of the transformative use defense compelling.
A. RIGHT OF PUBLICITY 747
side, the members of No Doubt. Thus, insofar as the depiction of No
Doubt is concerned, the graphics and other background content of the
game are secondary, and the expressive elements of the game remain
manifestly subordinated to the overall goal of creating a conventional
portrait of No Doubt so as to commercially exploit its fame. In other
words, nothing in the creative elements of Band Hero elevates the de-
pictions of No Doubt to something more than “conventional, more or
less fungible, images” of its members that No Doubt should have the
right to control and exploit. Thus, the trial court did not err in deny-
ing Activision’s motion to strike the right of publicity claim based on
Activision’s assertion of a First Amendment defense.
B. Unfair Competition Claim
To state a claim for unfair competition under Business and Profes-
sions Code section 17200, a plaintiff must show that members of the
public are likely to be deceived’” by a particular business practice. No
Doubt alleges that Activision violated section 17200 by deceiving the
public into believing that No Doubt authorized the use of its name
and likeness for the unlocking feature of Band Hero and that “No
Doubt approves and endorses the appearance of its members indi-
vidually performing songs that are wholly inappropriate and out of
character for No Doubt.”
When the challenged use of a trademark appears in an artistic
work that implicates First Amendment protections, some courts have
concluded that the standard “likelihood of confusion” test under the
Lanham Act is inadequate to address First Amendment concerns.
The seminal case is Rogers, in which the Second Circuit developed an
alternative to the “likelihood of confusion” test to be used for titles of
artistic works that borrow names protected by trademark.
Activision contends that we should construe section 17200 to in-
corporate the Rogers standard as an element of No Doubt’s unfair
competition claim, because the claim is “substantially congruent” to
a trademark infringement claim under the Lanham Act, given that for
both the ”ultimate test” is whether the public is likely to be deceived
or confused by the similarity of the marks.
Even if the Rogers “explicitly misleading” test might be applied
to some section 17200 claims involving the unauthorized use of a
celebrity’s likeness (a conclusion we do not reach),8 the test does not
apply to No Doubt’s section 17200 claim. Activision overlooks the
overarching conclusion in Rogers that the public interest in avoid-
ing consumer confusion must be balanced against the public interest
8
Although the “explicitly misleading” requirement of the Rogers test makes ob-
vious sense when the title of an artistic work is at issue, and thus conventional
“speech” is involved, we question whether it should apply when the actionable
wrong is the misappropriation of a celebrity’s likeness in a video game.
748 CHAPTER 8. PERSONALITY RIGHTS
in free expression. The “explicitly misleading” standard comes into
play only after a determination has been made that a challenged use
of a trademark is worthy of heightened First Amendment protection.
Here, we have already concluded that Activision’s use of No
Doubt’s avatars is not “transformative” because the avatars are sim-
ply precise computer-generated reproductions of the band members
that do not meld with the other elements of Band Hero to become,
in essence, Activision’s own artistic expression. In the case of such
a “nontransformative” use of celebrity likenesses, the public interest
in avoiding consumer confusion outweighs the public interest in free
expression, and it would make li le sense to require No Doubt to
make the almost impossible showing that Activision’s nontransfor-
mative use of the No Doubt avatars was “explicitly misleading.” Of
course, to prevail on its section 17200 claim, No Doubt will still have
to demonstrate that members of the public are likely to be deceived
by Activision’s use of the likenesses.
In sum, the trial court did not err in denying Activision’s motion
to strike No Doubt’s section 17200 claim based on Activision’s con-
tention that its challenged use of the No Doubt avatars was not ex-
plicitly misleading.
7 Problems
Governator Problem
Does this bobblehead doll violate Arnold Schwarzenegger’s right of
publicity? (As a reminder, following his action-movie acting career,
Schwarzenegger went into politics and served as Governor of Cali-
fornia from 2003 to 2011.)
A. RIGHT OF PUBLICITY 749
Tony Twist Problem
Anthony Rory Twist was a hockey player who played for the St. Louis
Blues and the Quebec Nordiques. He was known as an “enforcer”
who would pummel players from the opposing team if they disre-
spected or acted too aggressively toward his teammates.
Antonio Carlo Twistarelli a/k/a Tony Twist is a villain who ap-
pears in thirty-six issues of the Spawn comic book series by Todd
McFarlane. MacFarlane has sometimes given away copies of Spawn
comic books as promotions at hockey games.
Does Anthony Twist have a right of publicity case against McFar-
lane?
750 CHAPTER 8. PERSONALITY RIGHTS
B Moral Rights
Moral rights give authors strong and often inalienable rights against
uses of their works that could be harmful to their reputations that of-
B. MORAL RIGHTS 751
fend their artistic visions. Moral rights are usually described as a part
of copyright. In some respects, so they are. But the underlying theory
of moral rights derives more from natural-law considerations about
personal dignity than from any utilitarian balancing of incentives.
Some countries have well-developed moral rights traditions. The
United States does not. The clearest instantiation of something resem-
bling moral rights is in the federal Visual Artists Rights Act and state 17 U.S.C. § 106A
analogues.
Peter Baldwin (2014)
The Copyright Wars: Three Centuries of Trans-Atlantic Battle
The laws governing how artists, writers, musicians, choreographers,
directors, and other authors relate to their works are usually called
”copyright.” But this one word covers two very different approaches.
The very terms used to designate the European ”authors’ rights” al-
ternative – Urheberrecht in German and droit d’auteur in French – voice
a more encompassing approach.
Seen historically over its long development, copyright has focused
on the audience and its hopes for an expansive public domain. Au-
thors’ rights, in contrast, have targeted creators and their claims to
ensure the authenticity of their works. For its detractors, copyright
is philistine and commercial, treating noble creation as a mere com-
modity. It regards the creator as an entrepreneur and the work as a
product. The authors’ rights tradition, in turn, valiantly protects the
creators vision from commercialization and exploitation.
Authors’ rights derive from natural rights. The Continental ap-
proach defends creators and their work. In a sense, it seeks no other
interest – public or otherwise. Authors’ rights, says a distinguished
French jurist, seek to protect the author, not society. Because it sets
the author before all, writes a French law professor, balancing inter-
ests, on the model of the copyright system, is foreign to the French
tradition. The author, in the words of a standard French legal text-
book, ”owes society nothing. He has no more obligations in this re-
spect than the mason who builds or the farmer who ploughs. Quite
the contrary, society owes him.”
Roberta Rosenthal Kwall 38 Vand. L. Rev. 1 (1985)
Copyright and the Moral Right: Is an American Marriage Possible?
The moral right doctrine generally is said to encompass three major
components: the right of disclosure, the right of paternity, and the
right of integrity. Some formulations of the moral right doctrine also
include the right of withdrawal, the right to prevent excessive criti-
cism, and the right to prevent assaults upon one’s personality. For
purposes of illustration, these components will be explored briefly in
the context of the following hypothetical. A playwright, enthralled
752 CHAPTER 8. PERSONALITY RIGHTS
with the idea of writing a piece poking fun at the evangelical seg-
ment of society, suddenly envisions a story line through which she
can communicate her ideas. In one day she outlines the plot and
sketches some dialogue so that she will have a rough draft which she
can develop further when inspiration strikes again. At this point, the
playwright’s interest in her work would be protected by an aspect of
the moral right doctrine known as the right of disclosure or divulga-
tion. Underlying this component of the moral right is the idea that the
creator, as the sole judge of when a work is ready for public dissemi-
nation, is the only one who can possess any rights in an uncompleted
work. Prior to the time the playwright places her work into circula-
tion, therefore, she retains the same right to determine both the form
of her play before it is distributed and the timing of public circulation.
Suppose that a few days after the playwright had finished her
rough draft, she entered into an agreement with a publisher in which
she promised to produce the final publication version of the play
within six months. Subsequently, a personal crisis in the playwright’s
life triggers a deep sense of religious conviction and she no longer
wishes to finish the play. In these circumstances her refusal to com-
plete the play would be supported by her right to refuse to disclose,
a corollary to the right of disclosure. Application of this right would
preclude a judgment ordering the playwright to complete the play,
although a court might award the publisher damages for breach of
contract.
Some scholars believe that a second component of the moral right
doctrine, known as the right of withdrawal, would allow the play in
our hypothetical situation to recall all existing copies of her work if,
following actual publication, she experienced a radical change of the
convictions that originally provided the impetus for the play. Other
commentators, however, have expressed doubts regarding the viabil-
ity of the moral right of withdrawal because of the practical inconsis-
tency in assuming that the public will forget works to which it has
already been exposed.
To continue the illustration, now assume that the playwright
completes her work and subsequently visits a publisher with her
manuscript in hand and offers it to the publisher for $1500. The pub-
lisher conditionally agrees to this arrangement, providing the play-
wright makes certain revisions. When the playwright tenders the re-
vised manuscript to the publisher, the publisher refuses to publish
it with the playwright’s name, notwithstanding the appearance of
the playwright’s name on the original manuscript. In these circum-
stances the playwright would be protected by another component of
the moral right, the right of paternity. As its name suggests, the right
of paternity safeguards a creator’s right to compel recognition for his
work and prevents others from naming anyone else as the creator.
B. MORAL RIGHTS 753
Therefore, the playwright would be able to force publication of the
work under her name. Additionally, the right of paternity protects
a creator in the event that someone falsely a ributes to him a work
that is not his creation.
Two other aspects of the moral right doctrine are the creator’s
right to prevent excessive criticism and the creator’s right to relief
from other assaults on his personality. To appreciate fully the theo-
retical basis for these two rights, one must recall that the moral right
doctrine safeguards rights of personality rather than pecuniary rights.
The creator projects his personality into his work, and thus is entitled
to be free from vexatious or malicious criticism and from unwanted
assaults upon his honor and professional standing By virtue of the
prohibition against a acks on the creator’s personality, the creator
also is protected against misuse of his name and work. In the context
of our hypothetical situation, such misuse would occur if an antireli-
gious organization claimed that the playwright subscribed to antire-
ligious views solely by virtue of her authorship of the play.
In the hypothetical situation, now suppose the playwright enters
into an agreement with a movie producer authorizing the producer
to write a screenplay based upon her play. The final version of the
screenplay, however, distorts considerably the playwright’s theme
and mutilates her story line. The component of the moral right doc-
trine that would grant relief to the paywright in this situation is called
the right of integrity. This right lies at the heart of the moral right
doctrine. In our hypothetical case the adaptation process naturally
would require certain modifications in the playwright’s manuscript,
but the right of integrity prevents those who make such alterations
from destroying the spirit and character of the author’s work. Al-
though adaptations of a work from one medium to another present
the most obvious potential for violations of a creator’s right of in-
tegrity, in reality, any modification of a work can be problematic from
an integrity standpoint. Any distortion that misrepresents an artist’s
expression constitutes a violation of the creator’s right of integrity.
There is, however, one rather incongruous aspect of the right of in-
tegrity. If the artist in our hypothetical situation was a painter rather
than a playwright, the right of integrity probably would not allow her
to prevent the destruction of one of her paintings by its owner. Per-
haps the underlying rationale for this exception is that a work which
has been destroyed completely cannot reflect adversely upon the cre-
ator’s honor or reputation. Nevertheless, some commentators have
criticized the destruction exception on the ground that it negates the
creator’s right of paternity and frustrates the public’s interest in en-
joying the artist’s work.
All nations that have adopted the moral right doctrine statutorily
include at least some of the above protections, but the contours of the
754 CHAPTER 8. PERSONALITY RIGHTS
doctrine vary among the adhering countries.
Berne Convention for the Protection of Literary and Artistic Works
(1979)
Art. 6bis
(1) Independently of the author’s economic rights, and even after
Moral Rights the transfer of the said rights, the author shall have the right
to claim authorship of the work and to object to any distortion,
mutilation or other modification of, or other derogatory action
in relation to, the said work, which would be prejudicial to his
honor or reputation.
(2) The rights granted to the author in accordance with the preced-
ing paragraph shall, after his death, be maintained, at least un-
til the expiry of the economic rights, and shall be exercisable by
the persons or institutions authorized by the legislation of the
country where protection is claimed.
Copyright Act
17 U.S.C. § 106A
(a) Rights of A ribution and Integrity. – Subject to section 107 and
Rights of certain authors to attribution independent of the exclusive rights provided in section 106, the
and integrity author of a work of visual art—
(1) shall have the right—
(A) to claim authorship of that work, and
(B) to prevent the use of his or her name as the author of
any work of visual art which he or she did not create;
(2) shall have the right to prevent the use of his or her name as
the author of the work of visual art in the event of a distor-
tion, mutilation, or other modification of the work which
would be prejudicial to his or her honor or reputation; and
(3) subject to the limitations set forth in section 113 (d), shall
have the right—
(A) to prevent any intentional distortion, mutilation, or
other modification of that work which would be prej-
udicial to his or her honor or reputation, and any in-
tentional distortion, mutilation, or modification of that
work is a violation of that right, and
(B) to prevent any destruction of a work of recognized
stature, and any intentional or grossly negligent de-
struction of that work is a violation of that right. …
(c) Exceptions. –
(1) The modification of a work of visual art which is a result
B. MORAL RIGHTS 755
of the passage of time or the inherent nature of the mate-
rials is not a distortion, mutilation, or other modification
described in subsection (a)(3)(A).
(2) The modification of a work of visual art which is the result
of conservation, or of the public presentation, including
lighting and placement, of the work is not a destruction,
distortion, mutilation, or other modification described in
subsection (a)(3) unless the modification is caused by gross
negligence.
(3) The rights described in paragraphs (1) and (2) of subsec-
tion (a) shall not apply to any reproduction, depiction, por-
trayal, or other use of a work in, upon, or in any connection
with any item described in subparagraph (A) or (B) of the
definition of “work of visual art” in section 101, and any
such reproduction, depiction, portrayal, or other use of a
work is not a destruction, distortion, mutilation, or other
modification described in paragraph (3) of subsection (a).
…
(e) Transfer and Waiver. –
(1) The rights conferred by subsection (a) may not be trans-
ferred, but those rights may be waived if the author ex-
pressly agrees to such waiver in a wri en instrument
signed by the author. Such instrument shall specifically
identify the work, and uses of that work, to which the
waiver. …
(2) Ownership of the rights conferred by subsection (a) with
respect to a work of visual art is distinct from ownership of
any copy of that work, or of a copyright or any exclusive
right under a copyright in that work. Transfer of owner-
ship of any copy of a work of visual art, or of a copyright
or any exclusive right under a copyright, shall not consti-
tute a waiver of the rights conferred by subsection (a).
A “work of visual art” is— 17 U.S.C. § 101
(1) a painting, drawing, print, or sculpture, existing in a single Definitions
copy, in a limited edition of 200 copies or fewer that are signed
and consecutively numbered by the author, or, in the case of
a sculpture, in multiple cast, carved, or fabricated sculptures of
200 or fewer that are consecutively numbered by the author and
bear the signature or other identifying mark of the author; or
(2) a still photographic image produced for exhibition purposes
only, existing in a single copy that is signed by the author, or
in a limited edition of 200 copies or fewer that are signed and
756 CHAPTER 8. PERSONALITY RIGHTS
consecutively numbered by the author.
A work of visual art does not include—
(A) (i) any poster, map, globe, chart, technical drawing, di-
agram, model, applied art, motion picture or other
audiovisual work, book, magazine, newspaper, peri-
odical, data base, electronic information service, elec-
tronic publication, or similar publication;
(ii) any merchandising item or advertising, promotional,
descriptive, covering, or packaging material or con-
tainer;
(iii) any portion or part of any item described in clause (i)
or (ii);
(B) any work made for hire; or
(C) any work not subject to copyright protection under this ti-
tle.
1 Integrity
Start with the right of integrity. VARA protects it explicitly, copyright
law implicitly.
Massachusetts Museum of Contemporary Art Foundation v. Büchel
593 F.3d 38 (1st Cir. 2010)
Artist Christoph Büchel conceived of an ambitious, football-field-
sized art installation entitled ”Training Ground for Democracy,”
which was to be exhibited at the Massachuse s Museum of Con-
temporary Art (”MASS MoCA”). Unfortunately, the parties never
memorialized the terms of their relationship or their understanding
of the intellectual property issues involved in the installation in a
wri en agreement. Even more unfortunately, the project was never
completed. Numerous conflicts and a steadily deteriorating relation-
ship between the artist and the Museum prevented the completion of
”Training Ground for Democracy” in its final form.
I.
MASS MoCA opened in 1999 as a center for the creation and display
of contemporary art. The Museum ”seeks to catalyze and support
the creation of new art, expose [its] visitors to bold visual and per-
forming art in all stages of production, and re-invigorate the life of
a region in socioeconomic need.” In its expansive facility in North
Adams, Massachuse s, the Museum strives to ”make the whole cloth
of art making, presentation and public participation a seamless con-
tinuum.” Over the last decade, the Museum has hosted the produc-
tion and presentation of over sixty exhibits of visual art, including
over 600 works of art by more than 250 individual artists. Some of
B. MORAL RIGHTS 757
these works have been displayed in Building 5, the Museum’s signa-
ture exhibition space, which spans the length of a football field.
Christoph Büchel is a Swiss visual artist who lives and works in
Basel, Swi erland. He is known for building elaborate, politically
provocative environments for viewers to wander, and sometimes to
crawl, through. One critic has stated that ”Mr. Büchel’s environ-
ments are huge in scale,” ”like bristling three-dimensional history
paintings,” yet are ”so obsessively detailed that they might best be
described as panoramic collage.”
Büchel proposed, and the Museum agreed to, a project entitled
”Training Ground for Democracy.” Büchel conceived of the exhibit as
”essentially a village, ... contain[ing] several major architectural and
structural elements integrated into a whole, through which a visitor
could walk (and climb).” According to an affidavit submi ed to the
district court, Büchel envisioned the work in the following way:
It was to adopt the role-play of U.S. military training for
its visitors, who would be given the opportunity to ”vir-
tually” change their own various identities in relation to
the collective project called ”democracy”: training to be
an immigrant, training to vote, protest, and revolt, train-
ing to loot, training iconoclasm, training to join a political
rally, training to be the objects of propaganda, training to
be interrogated and detained and to be tried or to judge,
training to reconstruct a disaster, training to be in condi-
tions of suspended law, and training various other social
and political behavior. In August 2006, Büchel spent ten
days in residence at MASS MoCA. During this time, he
and a partner prepared a basic schematic model of the
proposed installation. MASS MoCA agreed to acquire, at
Büchel’s direction but its own expense, the materials and
items necessary for the project.
Unfortunately, the parties never formalized the contours of their
relationship or firmly established the project’s financial scope and
precise specifications by executing any wri en instrument. The par-
ties set an opening date of December 16, 2006 for the exhibit.
Over the course of the fall, tensions began to develop between
the artist and MASS MoCA employees, particularly Joseph Thomp-
son. The museum felt the artist’s directions were vague, and his fi-
nancial and logistical demands were increasingly unreasonable; the
artist felt the museum was compromising his artistic integrity and
failing to follow his instructions. One frequent source of conflict be-
tween the parties was the budget, with the Museum understandably
concerned about keeping its costs for the massive project under con-
trol, and Büchel understandably insistent that his vision for ”Training
758 CHAPTER 8. PERSONALITY RIGHTS
Ground” be fully realized.
For our purposes, the key conflict between MASS MoCA and the
artist involved Büchel’s dissatisfaction with the way in which the Mu-
seum was implementing his instructions and procuring the items nec-
essary for the installation. At various points in the development of the
installation, Büchel proposed several major components, some but
not all of which later became part of the installation ”as its elements
evolved through discussions with MASS MoCA during the construc-
tion process. These major components included a movie theater, a
house, a bar, a mobile home, various sea containers, a bomb carousel,
and an aircraft fuselage. The Museum had begun seeking out some
of these materials and others for potential use in the installation as
soon as Büchel left North Adams at the end of August 2006, and con-
tinued to do so throughout the fall. One of the Museum’s curators
described the search for these items (at Büchel’s direction) as ”the ul-
timate scavenger hunt.” However, problems soon arose, especially
between Thompson and Büchel, as to the progress of the project, par-
ticularly when, as Thompson explained in an internal Museum email
dated October 28, 2006, he had tried to ”move the project along” by
”making a few decisions in [Büchel’s] stead.” Thompson noted that
Büchel, whom he described as having ”clear vision” and ”rock solid
integrity,” had taken ”extreme, mortal[] offense” to Thompson’s ef-
forts.
Büchel remained onsite at the Museum working on ”Training
Ground” until December 17, 2006, when he left for the holidays. In
Büchel’s estimation, ”Training Ground” was then only about 40%
complete. At the time, he planned to return on January 8, 2007, in
order to finish the work in time for a March 3 opening. Meanwhile,
the Museum was running out of money for the project. In Büchel’s
Installation of "Training Ground for absence, MASS MoCA staff continued to work on the installation.
Democracy" at MASS MoCA in 2006
The parties disagree as to whether the employees were merely execut-
ing instructions left by the artist or whether their actions represented
independent artistic judgment, exercised in direct contravention of
Büchel’s express wishes.
As the vitriolic exchanges between the parties continued, and ne-
gotiations over the project’s eventual completion became hopeless,
”Training Ground” languished in its unfinished state. It became clear
that Büchel would not complete the installation. On May 22, 2007,
MASS MoCA announced the cancellation of ”Training Ground,” and
contemporaneously publicized the opening of a new exhibit entitled
Christoph Buchel, "Training Ground for
Training Ground for Democracy", instal-
”Made at MASS MoCA,” which was to be ”a documentary project
lation at Art Basel Miami Beach, 2007 exploring the issues raised in the course of complex collaborative
projects between artists and institutions.” The press release noted
that this lawsuit had been filed the previous day; it also highlighted
the Museum’s desire to use its ”other experiences working with
B. MORAL RIGHTS 759
artists” to ”provide [its] audience with thought-provoking insights
into the complexities of the art-making process.” The release further
explained that, due to ”space constraints imposed by the materials as-
sembled for Training Ground for Democracy,” the exhibition would
be presented in the Museum’s ”only remaining available gallery
space”; therefore, in order to enter the exhibit, visitors would have to
pass through Building 5, ”housing the materials and unfinished fab-
rications that were to have comprised elements of Training Ground
for Democracy.” The Museum represented that ”[r]easonable steps
[had] been taken to control and restrict the view of these materials,
pending a court ruling.”
When ”Made at MASS MoCA” opened, many in the art world
disagreed with the Museum’s handling of its dispute with Büchel,
though the parties have different views on whether the Museum’s
actions ultimately tarnished the artist’s reputation. Moreover, the
parties differ on whether the ”reasonable steps ... taken to control
and restrict the view of the[] materials” — the placement of yel-
low tarpaulins over the unfinished work — actually concealed all
of the individual components and vital design elements of ”Train-
ing Ground,” or whether the tarpaulins simply ”hid[] an elephant
behind a napkin,” effectively inviting individuals to peek behind the
cloth coverings and view the unfinished work. See Charles Giuliano,
Christoph Buchel’s Tarp Art at Mass MoCA: Crap Under Wrap (July
31,
The Museum sued Büchel on May 21, 2007, in the United States
District Court for the District of Massachuse s. The complaint as-
serted a single claim for declaratory relief under VARA. The Museum
sought a declaration that it was ”entitled to present to the public the
materials and partial constructions assembled in connection with an
exhibit planned with the Swiss artist Büchel.” Büchel responded by
asserting five counterclaims against the Museum. The first sought
a declaratory judgment and an injunction under VARA prohibiting
the Museum from publicly displaying ”the unfinished Work of Art
or any of its component elements.” The second sought damages for
MASS MoCA’s alleged violations of Büchel’s VARA rights by ”inten-
tionally distort[ing] and modif[ying] the Work of Art” and allowing
members of the public to ”see and pass through” the unfinished work,
both with and without the yellow tarpaulins. The third, fourth and
fifth counterclaims sought damages and injunctive relief under the
Copyright Act based on alleged violations of Büchel’s right to pub-
licly display and create derivative works from his work.
The district court ruled in favor of the Museum, noting that noth-
ing in VARA prevented MASS MoCA from showing the incomplete
project. Therefore, MASS MoCA was ”entitled to present” the unfin-
ished installation to the public as long as it posted a disclaimer that
760 CHAPTER 8. PERSONALITY RIGHTS
would ”inform anyone viewing the exhibit that the materials assem-
bled in Building 5 constitute an unfinished project that [did] not carry
out the installation’s original intent.” The court correspondingly de-
nied the artist’s request for injunctive relief barring public display of
the unfinished installation, ruling that he had failed to prove a likeli-
hood of success on the merits of his VARA claim.
However, several days after obtaining the ruling in its favor,
MASS MoCA changed course. The Museum posted an announce-
ment on its website stating that it had ”begun removing materials
gathered for Training Ground for Democracy and [would] not per-
mit the public to enter the planned installation.”
II.
Büchel argues that VARA applies with equal force to incomplete artis-
tic endeavors that would otherwise be subject to VARA protection.
The text of VARA itself does not state when an artistic project be-
comes a work of visual art subject to its protections. However, VARA
is part of the Copyright Act. Not surprisingly, based on section 101’s
general definitions, courts have held that the Copyright Act’s pro-
tections extend to unfinished works. Reading VARA in accordance
with the definitions in section 101, it too must be read to protect un-
finished, but ”fixed,” works of art that, if completed, would qualify
for protection under the statute.
III.
The right of a ribution under VARA gives an artist a claim for injunc-
tive relief to, inter alia, assert or disclaim authorship of a work. We
agree that VARA does not provide a damages remedy for an a ribu-
tion violation. Where the statutory language is framed as a right ”to
prevent” conduct, it does not necessarily follow that a plaintiff is en-
titled to damages once the conduct occurs. The question is whether
”doing” the act the artist has a right to prevent also triggers a dam-
ages remedy, and the statutory language indicates that Congress an-
swered that question for the a ribution right differently from the in-
tegrity right.
By dismantling ”Training Ground,” the Museum prevented the
Did MASS MoCA violate Büchel's further use of Büchel’s name in connection with the work, eliminating
VARA right against destruction in any basis for injunctive relief, and we therefore do not address the
§ 106A(a)(3)(B)?
a ribution claim in our VARA analysis.
Büchel alleges that MASS MoCA violated his right to integrity
in three distinct ways: first, by continuing to work on the instal-
lation without his authorization, particularly in early 2007, and by
then exhibiting the distorted artwork to the public; second, by using
tarpaulins to ”partially cover” – and thus modify and distort – the
installation, and allowing Museum visitors to see it in that condition;
B. MORAL RIGHTS 761
and third, merely by showing Büchel’s work in its unfinished state,
which he claims was a distortion. Büchel asserts that these actions
caused prejudice to his honor or reputation.
As we shall explain, we conclude that summary judgment was
improperly granted to MASS MoCA because material disputes of
fact exist concerning the first of Büchel’s integrity claims — i.e., that
MASS MoCA modified ”Training Ground” over his objections, to his
detriment. We further conclude that the record contains sufficient
evidence to allow a jury to find that MASS MoCA’s actions caused
prejudice to Büchel’s honor or reputation. The other integrity claims,
however, are unavailing.
1. Continuing Work on ”Training Ground”
Büchel asserts that, in the months following his departure from
North Adams in December 2006, the Museum encroached on his
artistic vision by making modifications to the installation that in
some instances were directly contrary to his instructions. In re-
jecting Büchel’s VARA claims, the district court described the Mu-
seum’s actions as perhaps ”occasionally misguided” a empts ”to im-
plement Büchel’s long-distance instructions.” The court found that
these ”[f]umbled efforts to assist in creating, or failing to create, a
work of art are not equivalent to distortion, modification, or mutila-
tion of the art.”
Although a jury might agree with the court’s assessment, the ev-
idence viewed in the light most favorable to Büchel would allow a
finding that at least some of the Museum’s actions violated VARA.
The record permits the inference that, even during his time as an
artist-in-residence at MASS MoCA, Museum staff members were
disregarding his instructions and intentionally modifying ”Training
Ground” in a manner that he did not approve.
Both in his deposition and in his affidavit, Büchel described ways
in which he felt the Museum had knowingly disregarded his spe-
cific instructions. For example, MASS MoCA’s decision to build a
cinderblock wall through the Cape Codstyle house in the installa-
tion, despite Büchel’s expressed desire that the construction await
his return, resulted in what Büchel considered a ”big distortion of
the meaning of that element.” The record is replete with similar al-
legations concerning other components of the installation, including
the cinema, the bomb carousel, the Saddam spiderhole, the police
car and the mobile home. Indeed, even the Museum, in its August 31,
2007 memorandum of law in support of its motion for summary judg-
ment, admi ed that the installation ”[m]aterials as they now stand
reflect significant aesthetic and design choices by MASS MoCA per-
sonnel, including with respect to the layout of the [m]aterials, and
with respect to the selection and procurement of pre-existing build-
762 CHAPTER 8. PERSONALITY RIGHTS
ings and vehicles that have been modified and incorporated into the
[m]aterials.”
The record also contains evidence from which a jury could con-
clude that the Museum’s alterations had a detrimental impact on
Büchel’s honor or reputation. An article in the Boston Globe reported
that, in February, Museum officials had shown the unfinished project
to a group of Museum directors and curators who were a ending
an arts conference in the area. Although the commentary generated
by these visits is not all negative, there was sufficient evidence for
a jury to find that the changes to ”Training Ground” caused preju-
dice to Büchel. The New York Times noted that the exhibition would
”certainly give people unfamiliar with his obsessive, history-driven
aesthetic an inaccurate sense of his art, and this is indeed a form of
damage.” A critic for the Boston Globe similarly observed that ”many
people are going to judge Büchel and his work on the basis of this
experience.” A review published in Berkshire Fine Arts – subtitled
”Crap Under Wrap” – concluded that it would be a ”huge mistake”
to uncover the installation, which offered ”virtually nothing of sub-
stance or interest.”
In concluding that Büchel has adduced sufficient evidence to sup-
port a right-of-integrity claim, we reject the Museum’s assertion that
to find a violation of Büchel’s right of integrity in these circumstances
would make it impossible for parties to collaborate on large-scale
artistic works. The Museum warns that, under Büchel’s interpreta-
tion, ”no one other than the artist himself ... may ever perform any
work in fabricating visual art unless that specific task has been autho-
rized by the artist.” We disagree. Although the artist’s vision must
govern, that principle does not prevent collaboration at the imple-
mentation level so long as the artist’s vision guides that implementa-
tion. Here, Büchel alleges a campaign of intentional distortion and
modification to his work in which Museum personnel repeatedly ig-
nored his express wishes. Our holding that the summary judgment
record precludes an affirmance of the district court on this claim may
serve as a cautionary tale to museums contemplating similar instal-
lations in the future — guiding them to document the terms of their
relationship and obtain VARA waivers where necessary — but it does
not prevent museums or other collaborators from working coopera-
tively with artists on such non-traditional artworks.
2. Showing ”Training Ground” Covered with Tarpaulins
Büchel also claims that MASS MoCA improperly modified and dis-
torted ”Training Ground” when it partially covered it with the yel-
low tarpaulins and displayed it in that condition. He asserts that
the record shows beyond dispute that visitors looked behind the
tarps, that the tarp-adorned installation was ”judged by others to be
B. MORAL RIGHTS 763
Büchel’s work, and that his honor and reputation were harmed by
it.” In response, the Museum argues that the yellow tarpaulins were
merely functional – a way of keeping people ”out” of the installation
– rather than an aesthetic modification of the artwork that gave MASS
MoCA patrons a distorted view of it.
Although the tarpaulins did prevent visitors to the Museum from
seeing the entire unfinished installation, the record shows that a num-
ber of people were able to form an impression of ”Training Ground”
despite the partial covering. For example, according to one observer,
[the tarps] don’t reach the floor, and they rise only about
two feet above eye level, so they don’t cover much. You
can easily crouch down to slip your head underneath or
peek through the slits between the vinyl sheets. Beyond
the passageway formed by the tarps, the monumental el-
ements of the installation rise all around you, plain as
day — the cinderblock walls, the two-story house, the
guard tower, the trailers, the carnival ride, all compacted
together in a claustrophobic, politically surreal borough
of hell, George Orwell by way of David Lynch.
Thomas Micchelli, Christoph Büchel Training Ground for Democ-
racy, The Brooklyn Rail (September 2007). Another critic noted that
the installation ”under all the tarps is really kind of a conceptual peep
show. It doesn’t take much effort or imagination to see most of the
work.... Mass MoCA is hiding an elephant behind a napkin,” and
called it a ”wink, wink, wrap show.” Photographs in the record con- Crap Under Wrap
firm that the covers did not obscure the general path and layout of the
installation. Indeed, given the location of ”Training Ground,” visi-
tors to ”Made at MASS MoCA” could not avoid seeing the unfinished
”Training Ground” bedecked in tarpaulins.
Nonetheless, although the installation unquestionably looked dif-
ferent with the tarpaulins partially covering it, we agree with the dis-
trict court that the mere covering of the artwork by the Museum, its
host, cannot reasonably be deemed an intentional act of distortion
or modification of Büchel’s creation. To conclude otherwise would
be to say that, even if all had gone well, the Museum would have
been subject to a right-of-integrity claim if it had partially covered
the work before its formal opening to prevent visitors from seeing it
prematurely.
This is not to say that MASS MoCA was necessarily acting with
pure intentions when it created ”Made at MASS MoCA” in close
proximity to the tarped ”Training Ground.” It might be a fair infer-
ence that the Museum was deliberately communicating its anger with
Büchel by juxtaposing his unfinished work with the successful artistic
collaborations depicted in its new exhibition. The partial covering of
764 CHAPTER 8. PERSONALITY RIGHTS
”Training Ground” may have been intended to highlight, rather than
hide, the failed collaboration. The right of integrity under VARA,
however, protects the artist from distortions of his work, not from
disparaging commentary about his behavior.
3. Exhibiting ”Training Ground” in Its Unfinished State
Büchel maintains that, even aside from the alleged modifications to
”Training Ground,” merely exhibiting the work of art in its unfinished
state, without the artist’s consent, constitutes a distortion. We reject
this claim. A separate moral right of disclosure (also known as the
right of divulgation) protects an author’s authority to ”prevent third
parties from disclosing [his or her] work to the public without the
author’s consent,” and is not covered by VARA.
Although Büchel proffered an expert who opined that showing an
unfinished work without the artist’s permission is inherently a distor-
tion, we decline to interpret VARA to include such a claim where a
separate moral right of disclosure is widely recognized in other ju-
risdictions and Congress explicitly limited the statute’s coverage to
the rights of a ribution and integrity. Any right Büchel possesses to
withhold display of his artwork must be found outside VARA.
IV.
We now assess Büchel’s challenge to the grant of summary judgment
for MASS MoCA on his Copyright Act claims. Büchel’s undeveloped
argument [that Mass MoCA violated the derivative works right] is so
perfunctory that we deem the claim waived. [But his public display
claim survived summary judgment.] The record reveals disputed is-
sues of fact with respect to whether the Museum’s copy was ”law-
fully made,” as it may have been created in violation of the artist’s
rights under VARA. Moreover, Büchel introduced evidence to rebut
the Museum’s assertion that ”the installation’s various components”
all belonged to, or were purchased by, MASS MoCA. Finally, Büchel
presented evidence that the Museum understood that the physical
copy of the installation belonged to him.
Philips v. Pembroke Real Estate, Inc.
443 Mass. 110 (2004)
David Phillips is a sculptor who has gained national recognition for
his site-specific artwork. In 1999, Pembroke Real Estate, Inc. com-
missioned Phillips to work on Eastport Park, a public green space in
the South Boston waterfront section of Boston. Phillips created ap-
proximately twenty-seven sculptures for the park, including abstract
bronze and granite works and a dozen realistic bronze sculptures of
hermit crabs, shrimp, and frogs. Phillips was responsible for the de-
sign and installation of rough stone walls, split granite paving stones,
and other landscape design elements. Most of Phillips’s sculpture
B. MORAL RIGHTS 765
and landscape elements are organized along a diagonal sight line, or
axis, passing through the park, and are unified by a theme of spiral
and circular forms. At the center of the axis is a large spherical sculp-
ture entitled ”Chords.”
Soon after the park was completed in the spring of 2000, Pembroke
determined that it was in need of alteration. A redesign scheme was
prepared by British landscape architect Elizabeth Banks. It called for
the removal and relocation of Phillips’s sculptures. Phillips protested
and, in January, 2003, Pembroke agreed to retain all but one of
Phillips’s sculptures. Phillips objected to Pembroke’s revised plan
and subsequently filed suit in the United States District Court for the David Phillips installation in Eastport
District of Massachuse s, seeking injunctive relief under the Federal Park
Visual Artists Rights Act and MAPA.
On August 21, 2003, at the conclusion of a nonevidentiary hearing,
the United States District Court judge issued a temporary restrain-
ing order enjoining Pembroke from altering the park. Subsequently,
Pembroke announced its intention to return to the original redesign
scheme, which called for the removal of all of Phillips’s sculptures.
After a two-day evidentiary hearing, the United States District Court
judge issued a memorandum and order in which she found ”that the
environment of Phillips’ integrated sculpture along the axis of the
Park is a critical element of those works, and changing the location
of the sculpture constitutes an alteration” under MAPA. Accordingly,
she ordered that Pembroke ”not alter, destroy, move or remove any
of the sculptures along the northeast-southwest axis of the Park until
the conclusion of this litigation or further order of the Court. With
respect to the other sculptures, Defendant may move the sculptures
but shall not destroy or alter them.”
Both parties filed interlocutory appeals with the United States
Court of Appeals for the First Circuit pursuant to 28 U.S.C. §
1292(a)(1) (2000). In the interim, the District Court judge certified the
present question:
”Under the facts and circumstances described in the Dis-
trict Court’s October 24, 2003 Memorandum and Order, to
what extent does the Massachuse s Art Preservation Act Mass. Gen. Laws ch. 231, § 85S (1984)
protect the placement of ‘site specific’ art?”
The term ”site-specific” art does not appear in any applicable Mas-
sachuse s statute. It is a term that has been defined in the art world
as art ”[that] is conceived and created in relation to the particular
conditions of a specific site.” Serra v. United States Gen. Servs. Ad- Serra: 847 F.2d 1045 (2d Cir. 1988)
min. (quoting sculptor Richard Serra). It has also been described as
”a combination of readymade work and a crafted work: the site is the
readymade work, from which the artist draws her inspiration, and
upon which the artist adds a crafted material. Together, the ready-
766 CHAPTER 8. PERSONALITY RIGHTS
made and the crafted material exist as the artwork.” Garson, Before
That Artist Came Along, It Was Just a Bridge: The Visual Artists Rights Act
and the Removal of Site-Specific Artwork, 11 C J.L. P . P ’
203, 230 (2001). The term ”site-specific” is also admi edly a sort of
catchall phrase for a variety of artworks that elevate, in varying de-
grees, the importance of the relationship between context and object.
In some works of site-specific art, the landscape provides the context
necessary to give full meaning to otherwise free-standing crafted ob-
jects. In other works, such as ”earthworks,” the artwork is completely
inextricable from its site because it is literally made from and imbed-
ded in nature.” The facts of this case present the former and not the
la er type of site-specific art.
After considering all the language used in MAPA, construed as
a whole, consistent with what we can glean of the Legislature’s in-
tentions in its enactment, we answer the question as follows: MAPA
does not protect the placement of the type of site-specific art at issue
here. Although it prohibits the physical destruction of the crafted
components of such art, MAPA does not protect it against the concep-
tual destruction or decontextualization that may result from the re-
moval of those components from the physical environment in which
they have been placed. If the crafted components of site-specific art
can be extracted from their surroundings without physical damage
to them, the statute is not violated by their removal.
MAPA followed the lead of similar legislation in California and
New York in a empting to graft onto a generally inhospitable com-
mon law tradition the civil law concept of droit moral, whereby a cre-
ative artist retains certain inalienable rights with respect to his or her
creation before and after publication, display or sale. To accomplish
its ends, MAPA protects both an artist’s ”right of integrity” (an artist’s
right not to have his or her creations altered), and an artist’s ”right of
paternity” (an artist’s right to claim or disclaim authorship of a work
of art). The rights of integrity and paternity continue for fifty years
after the artist’s death and are enforceable by the artist or by his duly
authorized representative by an action in the Superior Court.
It is apparent that in drafting the statute, the Legislature was con-
cerned not only with creating new rights for artists, but also with
protecting the rights of property owners who commission artworks
that become a ached to real property. This concern manifests itself
in the way § 85S (h) of MAPA addresses ”fine art” a ached to build-
ings. If the art can be removed from the building without causing
”substantial harm” to the art, the building owner may remove the art
after giving the artist notice and ninety days to reclaim and remove it
himself (at his own expense). If the artwork cannot be removed from
the building without causing the ”substantial physical defacement,
mutilation, alteration, or destruction” of the art, the owner may pro-
B. MORAL RIGHTS 767
ceed to remove it unless the artist has expressly reserved his rights
under the statute ”by an instrument in writing signed by the owner
of such building and properly recorded, prior to the installation of
such art”
This provision serves two purposes. First, it ensures that the
owner of a building will be able to remove unwanted art from his
property even if the removal would cause physical damage to the art
in ways otherwise prohibited by MAPA (unless the property owner
has signed a wri en instrument reserving the artist’s rights). Thus, it
prevents the artist from holding the building hostage to the artworks.
Second, by requiring that any enforceable reservation of rights be
”properly recorded,” the statute protects the integrity of the real prop-
erty conveyancing system and guards against the establishment of
unnoticed, undetectable, and indeterminate encumbrances.
If the Legislature intended to include the type of site-specific art
at issue here within MAPA’s protections, it would entail a radical
consequence for owners of land, that the Legislature directly averted
for owners of buildings. Specifically, rights afforded artists would
encumber private and public land with restrictions lasting for the
life of the artist plus fifty years, without the need for such restric-
tions to be recorded in a registry of deeds. We do not lightly read
such an intent into a legislative act given the recognized legislative
policy of discouraging land restrictions (especially unrecorded ones),
the common-law doctrine disapproving the long-term burdening of
property, and the corollary judicial practice of construing statutory
provisions regarding land restrictions in favor of freedom of alien-
ation.
The failure of the statute to address specifically the removal of fine
art from land suggests that the Legislature either did not intend the
statute’s protection to extend to the land upon which works of art
have been placed, or did not perceive the removal of free-standing
works of art from their sites as causing their ”physical defacement,
mutilation, alteration, or destruction.” Either way, there was no need
for it to consider the possibility that land might be also ”held hostage”
to a ached artworks. Given the Legislature’s evident concern that
works of fine art not burden buildings, and that restrictions encum-
bering buildings be properly recorded, it is apparent to us that if the
Legislature had understood that MAPA would have that same en-
cumbering effect on the sites of site-specific art, it would have ad-
dressed the subject directly.
This interpretation is also consistent with our view that the statu-
tory protection afforded fine art is protection from physical rather
than conceptual harm. In application, moving Phillips’s sculptures
will not result in their physical destruction, nor will it cause a physi-
cal alteration to the actual sculptures. The harm presented is decon-
768 CHAPTER 8. PERSONALITY RIGHTS
textualization. That this harm is significant to Phillips (and possibly
to the public) is not to be understated, but it is not the same harm as
the actual physical alteration or physical destruction of the artworks
crafted by the artist. The balance struck by the Legislature in 1984
deals only with the la er.
Clean Flicks of Colorado, LLC v. Soderbergh
433 F. Supp. 2d 1236 (D. Colo. 2006)
CleanFlicks is a limited liability company in Utah, owned by Ray
and Sharon Lines. It has created and publicly distributed copies of
the Studios’ movies that it altered by deleting ”sex, nudity, profan-
ity and gory violence,” using its own guidelines. CleanFlicks began
editing movies on VHS videocasse es in June, 2000, added DVDs at
some time and now does only DVDs. The deletions are from both
audio and visual content of the movies. The editing techniques used
include redaction of audio content, replacing the redaction with am-
bient noise, ”blending” of audio and visual content to provide tran-
sition of edited scenes, cropping, fogging or the use of a black bar to
obscure visual content.
CleanFlicks first obtains an original copy of the movie from its
customer or by its own purchase from an authorized retailer. It then
makes a digital copy of the entire movie onto the hard drive of a com-
puter, overcoming such technology as a digital content scrambling
protection system in the acquired DVD, that is designed to prevent
copying. After using software to make the edits, the company down-
loads from the computer an edited master copy which is then used to
Sign from CleanFlicks' window
create a new recordable DVD-R to be sold to the public, directly or in-
directly through a retailer. Thus, the content of the authorized DVD
has been changed and the encryption removed. The DVD-R bears the
CleanFlicks trademark. CleanFlicks makes direct sales and rentals to
consumers online through its web-site requiring the purchaser to buy
both the authorized and edited copies. CleanFlicks purchases an au-
thorized copy of each edited copy it rents. CleanFlicks stops selling
to any retailer that makes unauthorized copies of an edited movie.
The Studios claim that CleanFlicks is infringing their exclusive
right to reproduce the copyrighted works under § 106(1), the Studios’
right to create derivative works under § 106(2), and the exclusive right
of distribution of copies under § 106(3).
[CleanFlicks argued fair use.]
Under the purpose and character of use factor, the counterclaim
defendants concede that their use of the copyrighted works is for com-
mercial gain, but argue, correctly, that under Campbell, that fact is not
determinative. They seek to establish a public policy test that they
are criticizing the objectionable content commonly found in current
movies and that they are providing more socially acceptable alterna-
tives to enable families to view the films together, without exposing
B. MORAL RIGHTS 769
children to the presumed harmful effects emanating from the objec-
tionable content.
The accused parties make much of their public policy argument
and have submi ed many communications from viewers expressing
their appreciation for the opportunity to view movies in the se ing
of the family home without concern for any harmful effects on their
children. This argument is inconsequential to copyright law and is
addressed in the wrong forum. This Court is not free to determine the
social value of copyrighted works. What is protected are the creator’s
rights to protect its creation in the form in which it was created.
During the pendency of this case Congress enacted the Family
Movie Act of 2005, amending § 110 to provide an exemption for the At 17 U.S.C. § 110(11)
editing of motion pictures by a member of a private household if no
fixed copy of the altered version of the motion picture is created. That
statute eliminated from this case those parties selling technology en-
abling such private editing. The legislative history shows that the
amendment was not intended to exempt actions resulting in fixed
copies of altered works which the House Commi ee believed illegal.
Thus, the appropriate branch of government had the opportunity to
make the policy choice now urged and rejected it.
The primary argument on the fair use defense is the fourth statu-
tory factor. The counterclaim defendants contend that there is no
adverse effect from their use of the movies on the value of the copy-
righted work to the Studios. They suggest that the Studios benefit
because they are selling more copies of their movies as a result of
the editing parties’ practice of maintaining a one-to-one ratio of the
original and edited versions. It is assumed that the consumers of the
edited versions would not have themselves purchased the authorized
versions because of the objectionable content and the Studios do not
compete in this alternative market.
The argument has superficial appeal but it ignores the intrinsic
value of the right to control the content of the copyrighted work
which is the essence of the law of copyright. Whether these films
should be edited in a manner that would make them acceptable to
more of the public playing them on DVD in a home environment is
more than merely a ma er of marketing; it is a question of what au-
dience the copyright owner wants to reach.
Prepared Statement of Taylor Hackford on Behalf of the Directors
Guild of America Derivative Rights, Moral Rights, and
Directors put their full vision and often years of hard work into the Movie Filtering Technology, Hearing
creation of a film. That film is not only their vision, but it carries Before the Subcommittee on Courts,
the Internet, and Intellectual Prop-
their name and reflects on their reputation. Their ability to have their
erty of the Committee on the Judi-
names used to identify and market their films is of great economic ciary, House of Representatives (May
consequence. No ma er how many warnings or disclaimers some- 20, 2004)
770 CHAPTER 8. PERSONALITY RIGHTS
one puts on the film, it still has the director’s name on it. So directors
have great passion about protecting their work, which is their signa-
ture and brand identification, against unauthorized editing, and an
abiding belief that contracts and the law will prevent others from il-
legally profiting from or altering their work.
Because directors and their names are inextricably and promi-
nently linked with the movies they direct, the conduct of companies
that sell unauthorized software filters or edited versions of movies is
particularly harmful to directors. These companies are undoing, un-
dermining and superseding the artistic work in which a director has
invested a great deal of effort, and become closely associated by the
public. Removing scenes and dialogue from films interferes with the
story a director is trying to tell, and in so doing, can take away from
the narrative structure and overall vision that audiences associate
with a director. This editing can make movies into nonsense, com-
pletely changing their meaning. The director’s reputation is likely to
suffer when people viewing the film may believe they are watching
a version of the film that has been edited and authorized for release
by the director.
Proof of Life, starring Meg Ryan and Russell Crowe, told the story
of an American oil executive who was kidnapped for ransom by in-
surgents in a fictional South American country. At its core, this movie
centered on the kidnapping, the struggles of the kidnapped execu-
tive, and the impact of the event on his wife (Ryan) and his would-be
rescuer (Crowe).
Despite the u er centrality of the kidnapping to the story, I was
amazed to learn that at least one company, without any authorization
or contractual right to alter the film, removed the entire kidnapping
scene when it created a filter specifically designed to alter the viewing
of this film. It is important to note that this scene was shown on tele-
vision and airline versions virtually in its entirety, with only eleven
seconds removed. These types of minor, authorized edits are accept-
able, because, as the film’s director, I agreed to them for a particular
use.
In this case, the company had no authorization from the studio or
me, yet they unilaterally removed the entire kidnapping scene and al-
tered my film in a way that was extremely harmful to the basic telling
of the story. It also was harmful to the way viewers perceive me as
a director. This unauthorized version may lead viewers to believe
Taylor Hackford directs movies that just don’t make sense. Let me
explain why.
First, the subject of kidnapping for ransom is pivotal to the film,
and as the film’s director, I went to great lengths to portray it as real-
istically as possible. In the theatrical, airline, and television version
of the film, the audience sees how the abduction was carried out, and
B. MORAL RIGHTS 771
witnesses the organizational skill of the abductors and the depth of
their cruelty. All of these essential details, and the overall tension and
desperation of the scene, have been ripped from the film.
Second, the kidnapping scene, which takes place early in the
movie, establishes the foundation for the entire story that follows,
and is crucial to the overall dramatic purposes of the film. This scene
enables the audience to empathize with an ordinary person, who is
driving to work thinking about everyday problems on the job and
at home. This ”everyman” suddenly is wrenched from his daily life
and plunged into a nightmare that he had never imagined possible.
Removing this scene in its entirety leaves the audience unable to un-
derstand the context and meaning of the story, and renders the audi-
ence unable to connect emotionally to the character’s plight. In short,
removing the early kidnapping scene, from a movie about a kidnap-
ping, changes the basic nature of the movie.
2 Attribution
Given Büchel, VARA’s a ribution right isn’t much good, is it? And
given Dastar, trademark law isn’t much good for a ribution either, is
it? But there are a few ways in which the law prioritizes a ribution:
recall 1202
Unsurprisingly, private parties frequently insist on a ribution by
contract.
Williams v. UMG Recordings, Inc.
281 F. Supp. 2d 1177 (C.D. Cal. 2003)
Plaintiff Kelvin Williams styles himself as ”a talented young film di-
rector/writer/editor.” Defendant Cash Money is a record label [which
has a distribution contract with UMG].
In February of 2000, Plaintiff, Panzer and the Cash Money Defen-
dants collaborated on the production of a documentary. A dispute
over Plaintiff’s compensation subsequently developed, apparently re-
sulting in bad blood between Plaintiff and Panzer. In the meantime,
around March 2000, Plaintiff got involved in another project with
Panzer and the Cash Money Defendants involving post-production
work on a film entitled ”Baller Blockin’.”
The parties disagree as to the nature and extent of Plaintiff’s in-
volvement in the Baller Blockin’ project. Plaintiff claims that Defen-
dants contracted with him to restructure the entire film. Plaintiff con-
tends that he re-edited and re-scored the entire film and that it incor-
porates his copyrighted narration script (”Narration Script”). After
Baller Blockin’ was released, Plaintiff discovered his name was not
listed in the film’s credits and initiated this lawsuit.
Defendants argue that Dastar invalidates Plaintiff’s Lanham Act
claim. This Court agrees with Defendants. Plaintiff’s Lanham Act Baller Blockin' poster
772 CHAPTER 8. PERSONALITY RIGHTS
claim is based on the misa ribution of credits for ”story/screenplay”
and ”editing” on the Baller Blockin’ film. Plaintiff alleges that he
should be given credit for ”the authoring of the ‘Narration Script’ .
. ., editing film sequences and re-scoring the music.” Under Dastar,
however, the Supreme Court specifically held that the phrase ”origin
of goods” ”refers to the producer of tangible goods that are offered
for sale, and not to the author of any idea, concept, or communica-
tion embodied in those goods.” As such, Plaintiff would have a claim
if Defendants purchased copies of Plaintiff’s goods (i.e. the film) and
repackaged them as their own. By contrast, Plaintiff does not have
a claim for his authorship and direction embodied in that film. His
claim, therefore, is barred as a ma er of law.
Plaintiff then asserts that ”[i]f defendants [sic] argument were ac-
cepted, a talented director who directs a Summer blockbuster for ex-
ample can be deprived of the immense value of such a credit in the en-
tertainment industry, simply because the producer decides to name
himself as the director .... A reading that the Lanham Act does not
protect those people who provide services on films permits a form
of anarchy in the entertainment industry, where anybody could be
credited for anyone else’s work and have their credit obliterated.” In
Plaintiff’s hypothetical, the director has options to protect his interest
– obtaining a contractual right to a credit, relying on the regulation of
credits in union collective bargaining agreements (e.g., the Directors
Guild) or maintaining the copyright in the film. In light of Dastar, this
hypothetical director cannot bring a claim under the Lanham Act.
95 Geo. L.J. 49 (2006)
Catherine L. Fisk
Credit Where It's Due: The Law and Norms of Attribution
Hollywood (both motion picture and television production) has a
highly formal a ribution system that is thoroughly infused with
legally enforceable rules for granting screen credit. Elaborate rules
govern whose name will appear and whose will not, who can be
listed under which job title (director, screenplay by, key grip, etc.),
and the order and size of the print in which names are listed. The
credit rules are the subject of negotiations between the guilds repre-
senting various workers and the production companies, but currently
the administration of credit is left entirely to the guilds representing
each of the forms of talent. One of the most important things that
Hollywood guilds do is to administer the credit system.
The Writers Guild of America (WGA), the union representing
12,000 writers, administers the credit system for screenwriters. The
collective bargaining agreement between the WGA and the Alliance
of Motion Picture & Television Producers states that “credits for
screen authorship shall be given only pursuant to the terms of and
B. MORAL RIGHTS 773
in the manner prescribed in” the Theatrical Schedule A, a thirty page
addendum to the Basic Agreement. Theatrical Schedule A specifies
the criteria for screen credit. Disputes over credit are resolved pur-
suant to the WGA Credits Manual, which is not part of Theatrical
Schedule A but is approved by the WGA’s board of directors and by
a vote of the WGA membership. The WGA has a commi ee that de-
cides which names to submit to the studios to list as screenwriters.
Theatrical Schedule A limits screen credit to no more than two writ-
ers “except that in unusual cases, and solely as a result of arbitration,”
three writers or “two writing teams” (each of which can be no more
than two writers) may be credited. It also states, however, that the
writers may agree among themselves as to screen credit if they agree
unanimously and so long as the number of credited writers and the
form of credit are consistent with Theatrical Schedule A. Writers who
disagree with the Guild’s determination can seek arbitration. In 2002,
67 of 210 feature film writing credits were arbitrated.
Notwithstanding the formality and legally enforceable nature of
screen credit rights, informal norms also play a significant role. Pro-
ducer credits, one of the most important on a movie, are not gov-
erned by collective bargaining agreements because the studios do not
recognize the Producers Guild as a union. Therefore, some (includ-
ing a producer of the 2006 Academy Award winning movie Crash)
complain that producer screen credits are accorded by the Produc-
ers Guild unfairly. Because the guild agreements limit the number
of people who can be credited in some roles on any one film, power
relations among various possible contenders for credit affect who is
listed. Individual workers with significant bargaining power (actors,
directors, writers, and producers) negotiate for specific treatment on
each project, which may or may not reflect the same level of artis-
tic contribution as compared to others who receive a similar type of
credit on a different film or who receive the same credit (or no credit)
on the same film.
Other contributors to a project (lawyers, caterers, and animal
trainers) may be credited even though they are not subject to guild
agreements providing for credit. They may negotiate for credit in
the contract in which they agree to work on the project, or they may
be given credit at the whim of the producer or director as a form of
thanks. There are significant differences in the processes of credit at-
tribution for star actors, directors, producers, and writers than for the
best boys, grips, set painters, and still another set of norms governing
credit for caterers, assistants, lawyers, and accountants.
774 CHAPTER 8. PERSONALITY RIGHTS
C People as Trademarks
Trademark law has a few rules that explicitly apply to names and
other a ributes of personal identity. Are these special rules for spe-
cial subject ma er, or just the predictable application of trademark’s
usual principles?
Lanham Act
35 U.S.C. § 1052 [Lanham Act § 2]
No trademark by which the goods of the applicant may be distin-
Trademarks registrable on principal guished from the goods of others shall be refused registration on the
register; concurrent registration principal register on account of its nature unless it—
(c) Consists of or comprises a name, portrait, or signature identify-
ing a particular living individual except by his wri en consent,
or the name, signature, or portrait of a deceased President of
the United States during the life of his widow, if any, except by
the wri en consent of the widow.
(e) Consists of a mark which … (4) is primarily merely a surname
….
Peaceable Planet, Inc. v. Ty, Inc.
362 F.3d 986 (7th Cir. 2004)
Both companies sold plush camel toys
Although cases and treatises commonly describe personal names as
named "Niles." Trademark litigation en- a subset of descriptive marks, it is apparent that the rationale for
sued, giving Judge Posner an opportu- denying trademark protection to personal names without proof of
nity to discuss the considerations appli- secondary meaning can’t be the same as the rationale just sketched for
cable to personal names as trademarks
marks that are “descriptive” in the normal sense of the word. Names,
as distinct from nicknames like “Red” or “Shorty,” are rarely descrip-
tive. “Niles” may evoke but it certainly does not describe a camel,
any more than “Pluto” describes a dog, “Bambi” a fawn, “Garfield”
a cat, or “Charlo e” a spider. (In the Tom and Jerry comics, “Tom,”
the name of the cat, could be thought descriptive, but “Jerry,” the
name of the mouse, could not be.) So anyone who wanted to market
a toy camel, dog, fawn, cat, or spider would not be impeded in doing
so by having to choose another name.
The reluctance to allow personal names to be used as trademarks
reflects valid concerns (three such concerns, to be precise), but they
are distinct from the concern that powers the rule that descriptive
marks are not protected until they acquire secondary meaning. One
of the concerns is a reluctance to forbid a person to use his own name
in his own business. Supposing a man named Brooks opened a cloth-
ing store under his name, should this prevent a second Brooks from
opening a clothing store under his own (identical) name even though
consumers did not yet associate the name with the first Brooks’s
store? It should not.
C. PEOPLE AS TRADEMARKS 775
Another and closely related concern behind the personal-name
rule is that some names are so common — such as “Smith,” “Jones,”
“Schwar ,” “Wood,” and “Jackson” — that consumers will not as-
sume that two products having the same name therefore have the
same source, and so they will not be confused by their bearing the
same name. If there are two bars in a city that are named “Steve’s,”
people will not infer that they are owned by the same Steve.
The third concern, which is again related but brings us closest to
the rule regarding descriptive marks, is that preventing a person from
using his name to denote his business may deprive consumers of use-
ful information. Maybe “Steve” is a well-known neighborhood fig-
ure. If he can’t call his bar “Steve’s” because there is an existing bar
of that name, he is prevented from communicating useful informa-
tion to the consuming public.
David B. Findlay, Inc. v. Findlay
218 N.E.2d 531 (N.Y. 1966)
When should a man’s right to use his own name in his business be
limited? This is the question before us.
The individual plaintiff David B. Findlay (”David”) and the in-
dividual defendant Walstein C. Findlay (”Wally”) are brothers. The
Findlay art business was founded in 1870 by their grandfather in
Kansas City. Their father continued and expanded the business with
a Chicago branch managed by Wally and a New York branch estab-
lished and managed by David on East 57th Street. In 1936 the Kansas
City gallery was closed and in 1938, after a dispute, the brothers sep-
arated. By agreement David, as president of Findlay Galleries, Inc.,
and owner of nearly all of the stock of the original Missouri corpo-
ration, sold to Wally individually the Chicago gallery and allowed
Wally to use the name ”Findlay Galleries, Inc.” in the conduct of his
business in Chicago. Wally organized an Illinois corporation under
the name ”Findlay Galleries, Inc.” in 1938 and has since operated
his Chicago gallery. He also opened, in 1961, a Palm Beach, Florida,
gallery.
David, since the separation, has operated his gallery on East 57th
Street in Manha an. For many years he has conducted his business
on the second floor of 11-13 East 57th Street.
In October, 1963, Wally purchased the premises at 17 East 57th
Street and informed David of his plans to open an art gallery. David
objected to Wally’s use of the name ”Findlay” on 57th Street and by
le er announced he would ”resist any appropriation by you in New
York of the name Findlay in connection with a gallery * * * any funds
spent by you to establish a gallery at 17 East 57th Street under the
name Findlay Galleries, Inc. (or any variation thereof using the name
Findlay) are spent at your peril.” David also, in self-defense and in
an effort to survive, rented additional space at 15 East 57th Street so
776 CHAPTER 8. PERSONALITY RIGHTS
as to have a street level entrance.
David’s objections and pleas seemed to have some effect on Wally.
As renovation on the building was carried on from October, 1963
to September, 1964, a large sign proclaimed the coming opening of
”W.C.F. Galleries, Inc.” There was also a display and listing in the
New York Telephone directory under the same name and similar
advertisements in other publications. However, in September, 1964
the sign was suddenly changed to announce the imminent opening
of ”Wally Findlay Galleries” affiliated with ”Findlay Galleries, Inc.”
David immediately sought an injunction. Wally went ahead with his
opening and erected a sidewalk canopy from the curb to the building
displaying the name ”Wally Findlay Galleries.”
The trial court made very detailed findings and, based on them,
enjoined defendant from using the names ”Wally Findlay Galleries”,
”Findlay Galleries” and any other designation including the name
”Findlay” in the conduct of an art gallery on East 57th Street. The
Appellate Division has affirmed on the trial court’s findings and we
find evidence to sustain them.
In his quarter of a century on East 57th Street David has estab-
lished a valuable good will and reputation as an art dealer. Through
hard work, business ability and expenditure of large sums of money,
David has reached the level where a significant portion of his busi-
ness comes from people who have been referred to him by others
and told to go to ”Findlay’s on 57th St.”
The effect of Wally’s new gallery, with its long canopy, can only be
that those looking for ”Findlay’s on 57th St.” will be easily confused
and find their way into Wally’s rather than David’s gallery. Though
Wally perhaps did not deliberately set out to exploit David’s good
will and reputation, the trial court found, and we agree, that such
a result would follow if Wally were permi ed to operate a gallery
under the name ”Wally Findlay Galleries” next door to David.
There were numerous instances of people telephoning or ask-
ing at David’s for personnel of Wally’s or for art work exhibited at
Wally’s. Many regular customers congratulated David on the open-
ing of ”his” new gallery next door. Moreover, advertisements fre-
quently appeared on the same pages of the local press for ”Findlay
Galleries”, ”Findlay’s”, or ”Wally Findlay Galleries” thus making it
very difficult to tell whose advertisement it was. Even the art edi-
tors and reporters referred to Wally as ”Findlay Galleries” – the name
used for many years by David – or as ”the new Findlay Gallery.”
It is apparent that confusion has and must result from Wally’s
opening next to David. This is compounded by the fact that both
brothers have for years specialized in French impressionist and post-
impressionist painters. Therefore, quite naturally, both brothers have
in the past dealt in the works of such famous deceased painters as
C. PEOPLE AS TRADEMARKS 777
Modigliani, Degas, Renoir, Gauguin, Bonnard, Braque, Monet and
many others.
Although someone seeking a Renoir from David is unlikely to pur-
chase a Degas from Wally, it is likely that with respect to some of the
lesser-known impressionists such diversion might happen. More im-
portant, someone wishing to own a nude by Modigliani, a dancer by
Degas or a portrait of a girl by Renoir would not necessarily have a
particular painting in mind and would likely purchase any of these
species, whether it be in Wally’s or David’s. The items sold by the
two brothers are not unique, nonsubstitutional works.
Moreover, art, particularly modern art, is sold only to those who
see it. Works of art are sold to those who cross the threshold of the art
gallery and the more people you get into your gallery, the more art
you will sell. To this end David has worked hard to develop the name
”Findlay’s on 57th St.” and bring in customers. Many people who
have the finances to purchase art do not necessarily have the knowl-
edge to distinguish between the works of all the various painters rep-
resented by galleries such as Wally’s or David’s. For this reason they
rely on the reputation of the gallery. David has spent over 25 years in
developing satisfied customers who will tell others to go to ”Findlay’s
on 57th St.” This good will brings in customers who look for a work
of art that suits their fancy and, if Wally were to continue to use the
name Findlay, it is inevitable that some would walk into Wally’s by
mistake and would have their tastes satisfied there, to David’s great
harm.
The so-called ”sacred right” theory that every man may employ
his own name in his business is not unlimited. Moreover, fraud or
deliberate intention to deceive or mislead the public are not necessary
ingredients to a cause of action.
The present trend of the law is to enjoin the use even of a fam-
ily name when such use tends or threatens to produce confusion in
the public mind. Whether this confusion should be satisfied by mis-
placed phone calls or confusing advertisements alone we do not de-
cide because there has been a finding that diversion, as well as con-
fusion, will exist if Wally is not enjoined. Thus it is clear that the
”confusion” with which we are dealing includes impairment of good
will of a business.
In Meneely v. Meneely this court noted that one can use his own Meneely: 62 N.Y. 427 (1875)
name provided he does not resort to any artifice or contrivance for
the purpose of producing the impression that the establishments are
identical, or do anything calculated to mislead the public.
Thirty-five years later, we noted that, as a general principle of law,
one’s name is his property and he is entitled to its use. However, it
was equally a principle of law that no man can sell his goods as those
of another. ”He may not through unfairness, artifice, misrepresenta-
778 CHAPTER 8. PERSONALITY RIGHTS
tion or fraud injure the business of another or induce the public to
World's Dispensary: 96 N.E. 738 (N.Y. believe his product is the product of that other.” World’s Dispensary
1911) Med. Assn. v. Pierce
Ryan & Son: 205 N.E.2d 859 (N.Y. 1965) Ryan & Son v. Lancaster Homes is distinguishable from the present
case because there was lacking the crucial finding that in the absence
of relief plaintiff would be damaged by confusion and diversion.
There was no real competition between the two businesses. Again,
unlike the instant case where ”Findlay’s on 57th St.” is synonymous
in New York City with quality art galleries, ”Homes by Ryan” had not
become a trade name with a secondary meaning. The court reviewed
the law and cited the rule in Meneely. ”This rule has been qualified,
as we have said, only to the extent that use of a family name will be
restricted where such use tends or threatens to induce confusion in
the public mind”.
In the present case Wally knew that David had conducted his busi-
ness and built a reputation under the names ”Findlay Galleries” and
”Findlay’s on 57th St.” and that many years of effort and expenses
had gone into promoting the name of ”Findlay” in the art business
on 57th Street. He also knew that people would come into his gallery
looking for ”Findlay Galleries” and even instructed his employees
on this ma er before he opened. Nonetheless he opened his gallery
next door to David dealing in substantially similar works and using
the name Findlay. The bona fides of Wally’s intentions do not change
the applicable principles. The objective facts of this unfair competi-
tion and injury to plaintiff’s business are determinative, not the de-
fendant’s subjective state of mind. Wally’s conduct constituted unfair
competition and an unfair trade practice, and it is most inequitable
to permit Wally to profit from his brother’s many years of effort in
promoting the name of ”Findlay” on 57th Street. Wally should use
any name other than ”Findlay” in the operation of his business next
door to his brother.
In framing its injunction the trial court went no farther than was
necessary to avoid the harm threatened. It prevented the use of
the name Findlay but limited this to the particular area in which its
Today, the "Wally Findlay Gallery" and use would cause confusion and diversion – East 57th Street. It re-
the "David Findlay Jr. Gallery" are
solved the conflict with as li le injury as possible to Wally. The proof
under combined ownership and op-
erate from the same address at 724 showed and the trial court found that many, if not most of the leading
Fifth Avenue, between 56th and 57th art galleries, are now located on Madison Avenue and in the area of
Streets. The business is owned by the 60’s, 70’s and 80’s in New York City. Wally could probably have
James Borynack, who bought Wally's found an appropriate place for his New York gallery other than at
gallery after Wally's death in 1996, and
bought David Jr.'s gallery from David
17 East 57th Street and can now either find such another location or
Jr.s' daughter in 2016. remain where he is under some name such as ”W.C.F. Galleries”.
The decision in this case is in accord with the directions of our
court: ”The defendant has the right to use his name. The plaintiff has
the right to have the defendant use it in such a way as will not injure
C. PEOPLE AS TRADEMARKS 779
his business or mislead the public. Where there is such a conflict of
rights, it is the duty of the court so to regulate the use of his name
by the defendant that, due protection to the plaintiff being afforded,
there will be as li le injury to him as possible.” World’s Dispensary
Hebrew University of Jerusalem v. General Motors LLC
903 F. Supp. 2d 932 (C.D. Cal. 2012)
Plaintiff’s First Cause of Action asserts a claim for unfair competition
and false endorsement under the Lanham Act. Unlike the broader
right of publicity, which is infringed by the unpermi ed use of a per-
son’s identity containing no false inference that plaintiff endorses or
approves the product, § 1125(a) prohibits only false endorsement, not
mere use of an image or name. A false endorsement claim based on
the unauthorized use of a celebrity’s identity is a type of false asso-
ciation claim for it alleges misuse of a trademark which is likely to This is a trademark false-endorsement
confuse consumers as to the plaintiff’s sponsorship or approval of claim under § 43(a)(1)(A). Why not
the product. Only uses which suggest sponsorship or approval are a false-advertising claim under
§ 43(a)(1)(B), which would drop the
prohibited.
requirement that the defendant
Here, as defendant emphasizes, a minimal association exists be- use plaintiff's trademark and the
tween Plaintiff and the mark, which greatly reduces the likelihood likelihood-of-confusion analysis?
that consumers viewing the Advertisement will conclude that Plain-
tiff endorsed the product. “The Advertisement does not state ex-
pressly (or even imply) that Dr. Einstein (or HUJ) endorsed the Ter-
rain, nor would any reasonable reader reach that conclusion. In-
stead, the Advertisement uses Dr. Einstein’s face, superimposed on
someone else’s body, as a play on People magazine’s “Sexiest Man
Alive” edition, and to make a light-hearted point about the smart (but
“sexy”) features of the Terrain.”
Plaintif fails to point to any evidence in the record that establishes
a genuine dispute of material fact regarding consumer confusion.
Plaintiff “disputes” the facts relating to the Advertisement merely by
citing to the Advertisement itself and claiming that it “implies and
creates the false impression that Dr. Einstein’s estate and/or [Plain-
tiff] were associated with the Advertisement.” . Even if that is plausi-
ble – doubtful – this is a motion for summary judgment, not a motion
to dismiss, and the Court will not sift through the record a empting
to find evidence to support Plaintiff’s case.
The Court will assume, for purposes of this analysis, that Ein-
stein’s likeness constitutes a strong mark. Since the Advertisement
contains a photographic image of Einstein, the marks here are iden-
tical. However, Plaintiff has not even shown a tenuous connection
between the “goods” at issue. At most, the Terrain draws its value
from Einstein’s image only indirectly and remotely; the ad was not
for an Einstein product. Einstein is famous largely due to his tower-
ing intellect, a point emphasized by the “e = mc2 ” ta oo sported by
the Advertisement’s Einstein doppelganger. “So what the Advertise-
780 CHAPTER 8. PERSONALITY RIGHTS
ment suggests is that the Terrain vehicle is endowed with “smart (but
‘sexy’) features.” So what? Einstein = smart. Terrain = smart. Ergo,
does Einstein = Approval of Terrain? In short, any link between the
“hunky” model in the ad, Einstein’s image and the vehicle is too weak
to create a link between two “goods.”
Plaintiff points to no evidence of the strength of association be-
tween the mark and The Hebrew University of Jerusalem. Plaintiff
points to no evidence regarding the degree of care consumers are
likely to exercise when purchasing a car. Plaintiff points to no evi-
dence that Defendant intended to profit by confusing consumers into
believing Plaintiff endorsed the Terrain. Plaintiff points to no evi-
dence that it markets products bearing the image of Einstein through
the same marketing channels as Defendant or that any of its approved
product lines will expand to overlap with Defendant’s product lines.
Finally, Plaintiff points to no evidence of actual consumer confusion.
Plaintiff has failed to meet its burden of producing evidence suf-
ficient to create a genuine dispute of material fact. Accordingly, De-
fendant’s motion for summary judgment is GRANTED on Plaintiff’s
claim for unfair competition and false endorsement under the Lan-
ham Act.
Brown v. Electronic Arts, Inc.
724 F.3d 1235 (9th Cir. 2013)
Plaintiff-Appellant James ”Jim” Brown alleges that Defendant-
Appellee Electronic Arts, Inc. has violated § 43(a) of the Lanham Act,
through the use of Brown’s likeness in EA’s Madden NFL series of
football video games.
Jim Brown is widely regarded as one of the best professional foot-
ball players of all time. He starred for the Cleveland Browns from
1957 to 1965 and was inducted into the National Football League
Hall of Fame after his retirement. After his NFL career, Brown also
achieved success as an entertainer and public servant. There is no
question that he is a public figure whose persona can be deployed for
economic benefit.
EA is a manufacturer, distributor and seller of video games and
has produced the Madden NFL series of football video games since
1989. The Madden NFL series allows users of the games to control
avatars representing professional football players as those avatars
participate in simulated NFL games. In addition to these simulated
games, Madden NFL also enables users to participate in other aspects
of a simulated NFL by, for example, creating and managing a fran-
chise. Each version of Madden NFL includes the current year’s NFL
teams with the teams’ current rosters. Each avatar on a current team
is designed to mirror a real current NFL player, including the player’s
name, jersey number, physical a ributes, and physical skills. Some
versions of the game also include historical and all-time teams. Un-
C. PEOPLE AS TRADEMARKS 781
like for players on the current NFL teams, no names are used for the
players on the historical and all-time teams, but these players are rec-
ognizable due to the accuracy of their team affiliations, playing posi-
tions, ages, heights, weights, ability levels, and other a ributes. Al-
though EA enters into licensing agreements with the NFL and NFL
Players Association for its use of the names and likenesses of current
NFL players, Brown, as a former player, is not covered by those agree-
ments and has never entered into any other agreement allowing EA
to use his likeness in Madden NFL. Brown asserts that EA has used his
likeness in several versions of the game dating back at least to 2001
but that he has never been compensated.
A decade ago, we adopted the Rogers test as our method for bal- Madden NFL screenshot. The player
ancing the trademark and similar rights protected by § 43(a) of the with the ball has Jim Brown's uniform
number.
Lanham Act against First Amendment rights in cases involving ex-
pressive works. We agree with the district court that the use of Once the court adopts the Rogers
Brown’s likeness is artistically relevant to the Madden NFL games. As test, it's pretty much fourth-and-forty
for Brown. But consider In re NCAA
Brown points out in trying to undermine the status of the games as ex-
Student-Athlete Name & Likeness Licens-
pressive works, EA prides itself on the extreme realism of the games. ing Litigation, 724 F.3d 1268 (9th Cir.
As Brown emphasizes in arguing that it is in fact his likeness in the 2013), which applied No Doubt and
games: ”[I]t is axiomatic the ‘65 Cleveland Browns simply, by defi- the transformative-use test to athletes'
nition, cannot be the ’65 Cleveland Browns without the players who right of publicity claims against an-
other EA sports video game and found
played for the ’65 Cleveland Browns. This fundamental truth applies
no transformation because the game
especially to that team’s most famous player, Jim Brown.” Given the replicated their "physical characteris-
acknowledged centrality of realism to EA’s expressive goal, and the tics," "users manipulate the characters
importance of including Brown’s likeness to realistically recreate one in the performance of the same activ-
of the teams in the game, it is obvious that Brown’s likeness has at ity for which they are known in real life,"
and the context was "similarly realistic."
least some artistic relevance to EA’s work. Same court, same panel, same day.
Brown questions the artistic relevance of his likeness to Madden Also compare CBC Distribution & Mar-
NFL in part by pointing us to the Sixth Circuit’s decision in Parks v. keting v. Major League Baseball Ad-
LaFace Records. In Rosa and Raymond Parks Institute, civil rights hero vanced Media, 505 F.3d 818 (8th Cir.),
Rosa Parks sued the musical duo Outkast under § 43(a) after Outkast which held that fantasy baseball com-
petitions were shielded by the First
released a song called Rosa Parks. Partially due to the fact that one of Amendment from right of publicity li-
the members of Outkast had said that the song was not ”intended ... ability when they used actual players'
to be about Rosa Parks or the civil rights movement,” the Sixth Cir- names and statistics.
cuit concluded that the district court should have at least considered LaFace: 329 F.3d 437 (6th Cir. 2003)
additional evidence before deciding that the use of Ms. Parks’ name
was artistically relevant to the song.
One of the Sixth Circuit’s animating concerns in Rosa and Raymond
Parks Institute was that a celebrity’s name could be ”appropriated
solely because of the vastly increased marketing power of a prod-
uct bearing the name of [the celebrity].” 329 F.3d at 454. This is a
legitimate concern, but the facts in Rosa and Raymond Parks Institute
– specifically, the court’s determination that the lyrics of Outkast’s
song may very well have nothing to do with Rosa Parks or the civil
rights movement – made that concern much more realistic in that case
782 CHAPTER 8. PERSONALITY RIGHTS
than in this one. EA did not produce a game called Jim Brown Presents
Pinball with no relation to Jim Brown or football beyond the title; it
produced a football game featuring likenesses of thousands of cur-
rent and former NFL players, including Brown. Comparing this case
to Rosa and Raymond Parks Institute does not further Brown’s cause.
[The court found nothing explicitly misleading about Madden
NFL.]
Melting Bad Problem, Re-Redux
Walter Blanco from Blancorp is back again with yet more ideas for
possible trademarks for his clumpless ice-melter. Give your opinion
on the following potential trademarks:
• JONES
• BETTE MIDLER
• JAY Z
• WALTER BLANCO
• ROBIN HOOD
• CALVIN COOL EDGE
• BLANCO’S BLUE
D Personal Names
Personal names are to the right of publicity as business names are to
trademark. The law on permissible personal names is for the most
part a free-for-all: you can call yourself almost anything you want.
The occasional exceptions express some familiar policies.
Laura A. Heymann
86 Ind. L.J. 381 (2011)
Naming, Identity, and Trademark Law
Like trademarks, personal names serve denotative, connotative, and
associative functions. A name denotes in that it allows us to refer to
or identify a particular person who is not immediately present (and
thus could be pointed to), akin to trademark’s “source.” Indeed, as
one court noted, a name is, at root, “the label or appellation which [an
individual] bears for the convenience of the world at large in address-
ing him or in speaking of him or in dealing with him.” A personal
name also connotes, in that it brings to mind a certain set of qualities
or a ributes about the individual to whom the name is a ached. A
personal name suggests that an individual is either male or female,
that he or she is of a particular ethnicity or from a particular region,
or that he or she is young or old.
Finally, personal names also have an associational function. In
the same way the shared mark “Mercedes” can indicate a family
D. PERSONAL NAMES 783
of related goods, a surname can indicate a family of related people
and an indication of one’s social identity. Initiation into other so-
cial structures, such as fraternities or gangs, may be accompanied by
new names that represent the new associations; indeed, as early as
fifteenth-century Italy, virtually the only Tuscan family names were
those of a handful of great families whose kin, including affines,
adopted the name as a way of claiming the backing of a powerful
corporate group.
Carlton F.W. Larson 80 Geo. Wash. L. Rev. 159 (2011)
Naming Baby: The Constitutional Dimensions of Parental Naming Rights
In some states, parents may only choose surnames that are directly
connected to their own. Louisiana’s law is the most restrictive, requir-
ing that a child of a married couple bear the surname of the husband. See also Patrick McKenzie, Falsehoods
However, if both the husband and the wife agree, the surname “may Programmers Believe About Names; Ju-
lia Shear Kushner, The Right to Control
be the maiden name of the mother or a combination of the surname
One's Name, 57 UCLA L. Rev. 313 (2009)
of the husband and the maiden name of the mother.” Any other sur-
name, such as the surname of the mother’s mother, is prohibited.
Although many state laws are silent on this point, I suspect most
states would require parents to select a first name and a surname,
rather than just one name. Hawaii, for example, requires married
parents to select “both a family name and a given name chosen by
one of the child’s parents.”
Curiously, very few states explicitly impose a duty on parents to
name their child anything at all. Connecticut is not alone in not re-
quiring a child’s name to be entered on the birth certificate. For exam-
ple, Michigan statutory law does not explicitly require that a child’s
given name be included on the birth certificate, and indeed a Michi-
gan official has stated that “a child does not have to be given a name
at all.” Under Nevada law, a birth certificate need not include the
child’s name, but parents are given a form to submit “as soon as the
child shall have been named.”
A number of states, either through statute or administrative prac-
tice, prohibit the use of ideograms or pictograms as part of a child’s
name. This would preclude, for example, parents from naming
their child using the symbol denoting The Artist Formerly Known
as Prince.
As far as I can determine, no state prohibits the use of a numeral
if it is spelled out. It would be permissible, for example, to name
a child “Eight.” But several states prohibit the use of a numerical
symbol, which would prohibit naming a child “8.” New Jersey, for But see Jennifer 8. Lee, Yes, 8 Is My Mid-
example, permits the State Registrar to reject names that contain “nu- dle Name, Boston Globe, Aug. 8, 1996
merals” or a “combination of le ers, numerals, or symbols.” In Illi-
nois, administrative practice prohibits numerals when used as the
first character in a child’s name. Texas prohibits numerals as part of
784 CHAPTER 8. PERSONALITY RIGHTS
the name or suffix, although Roman numerals may be used for suf-
fixes. Thus, a child could be named “John William Turner III,” but
not “John William Turner 3” or “John William 3 Turner.”
Some states explicitly limit the length of names, whereas oth-
ers undoubtedly do so informally. Iowa administrative practice, for
example, prohibits names over a certain number of characters due
to technological limitations associated with its electronic data sys-
tems.52 In Massachuse s, the first, last, and middle names are limited
to forty characters because of software limitations.
Prohibitions of accent marks and other diacritical marks are com-
mon. For example, the California Office of Vital Records provides a
handbook to county vital records departments that states birth names
can be recorded using only “the 26 alphabetical characters of the
English language with appropriate punctuation if necessary.” The
handbook further specifies that “no pictographs, ideograms, diacriti-
cal marks” (including “é,” “ñ,” and “ç”) are allowed. Hence the pro-
hibition on “Lucía” discussed in the Introduction. In Massachuse s,
the “characters have to be on the standard american [sic] keyboard.
So dashes and apostrophes are fine, but not accent marks and the
such.” New Hampshire prohibits all special characters other than an
apostrophe or dash. Accordingly, “O’Connor” is a permissible name
in New Hampshire, but “Chacón” is not.
At least two states explicitly prohibit obscenities, and I suspect
many other states would prohibit obscene names as well. New Jersey
statutory law permits the State Registrar to reject any chosen names
or surnames that contain an obscenity. Under Nebraska statutory
law, the selection of a surname is the “parents’ prerogative, except
that the department [of Health and Human Services] shall not accept
a birth certificate with a child’s surname that implies any obscene or
objectionable words or abbreviations.” The statute is curiously sillent
with respect to an obscenity in the child’s first name.
Some states ostensibly impose no restrictions at all upon parents’
choice of names. For example, under Kentucky statutory law, the
child’s surname is “any name chosen by the parents.” A Kentucky
official has stated that the mother can give her child “any name she
wishes.” In response to e-mail inquiries, state officials in Delaware,
Maryland, and Montana all asserted that their states imposed no re-
strictions on parents’ choice of names.65 A Washington statute states
that an unmarried mother may “give any surname she so desires to
her child.” There is no similar statutory language with respect to mar-
ried parents or with respect to first names. South Carolina formerly
required that every child be given the surname of the father; now,
however, a state official asserts that the state “does allow a mother to
name her child without any restrictions.”
Yet one wonders if these statements are literally true. It seems
D. PERSONAL NAMES 785
unlikely that state officials would passively accept an expletive, a 700-
le er name, or a name wri en entirely in Greek characters. Put to the
acid test, these general statements about parents’ unfe ered ability to
select a name may well prove unreliable.
Many foreign jurisdictions are significantly more restrictive with
respect to naming practices. Portugal, for example, requires govern-
mental approval of names; a list of previously approved and rejected
names is available on the Internet. It makes for fascinating reading,
displaying a relentless enforcement of “authentic” Portuguese names.
Not surprisingly, “Svetlana,” “Johann,” “Ethel,” and “Andy” all fail
to make the cut, but so do “Carmencita,” “Catelina,” and “Iglesias.”
Portugal also prohibits names that “raise doubts about the sex of the
registrant.” In 2007, Venezuelan lawmakers proposed legislation that
would limit parents to 100 approved names, perhaps because at least
60 Venezuelans bore the first name “Hitler.” Spain specifically pro-
hibits “extravagant” or “improper” names. French law permits offi-
cials to reject first names that are considered contrary to the welfare
of the child. One such name was “Fleur de Marie,” rejected by French
courts as too eccentric. Argentina prohibits names that are “extrava-
gant, ridiculous, contrary to [its] customs, [or] that express or signify
political or ideological tendencies.” It has in the past also rejected
certain non-Spanish names, such as “Malcolm.”
The need for further prohibitions is at least debatable. After all,
most parents do not give their children ridiculous and hurtful names.
But it does happen. When I started researching this topic several
years ago, I assumed that no one would name his or her child “Adolf
Hitler.” But it happened. Indeed, at least sixty Venezuelans of vot-
ing age bear the first name “Hitler.” Similarly, at least one child is
alleged to be named for a venereal disease, and other American chil-
dren have been named “Satan.” Parents in Japan sought to name their
child, “Akuma,” which means “devil” or “demon.” Since 1984, two
children in the United Kingdom have been named “Superman,” and
six have been named “Gandalf.” A New Zealand judge ordered a girl
named “Talula Does The Hula From Hawaii” into court guardianship
so that her name could be changed. The judge stated, “It makes a fool
of the child and sets her up with a social disability and handicap.”
Other children in New Zealand have been named “Number 16 Bus
Shelter,” and “Violence.” Similarly, Swedish officials have rejected
a empts by parents to name children “Metallica” and “Brfxxccxxm-
npcccclllmmnprxvclmnckssqlbb11116.” Danish officials rejected the
proposed names “Anus” and “Monkey.”
In re Mokiligon
2005-NMCA-021 (N.M. Ct. App. 2005)
Petitioner, acting pro se, appeals the district court’s order denying his
request to change his name from “Snaphappy Fishsuit Mokiligon” to
786 CHAPTER 8. PERSONALITY RIGHTS
“Variable.”
Petitioner argued in his docketing statement that NMSA 1978, §
40–8–1 (1989) grants him the right to change his name. Section 40–8–1
reads, in pertinent part, as follows:
Any resident of this state over the age of fourteen years
may, upon petition to the district court of the district in
which the petitioner resides and upon filing the notice re-
quired with proof of publication, if no sufficient cause is
shown to the contrary, have his [or her] name changed or
established by order of the court.
We stated in our notice of proposed disposition that although it has
been held that a court has discretion to deny a name change under
statutes similar to ours, it is generally held that denial is limited to a
showing of an “unworthy motive, the possibility of fraud on the pub-
lic, or the choice of a name that is bizarre, unduly lengthy, ridiculous
or offensive to common decency and good taste.”
The court summarily denied Petitioner’s request without provid-
ing sufficient factual support for the denial. The docketing state-
ment represented that Petitioner did not receive a hearing, but was
informed by mail that his request was denied. Thus, there appears
to have been no showing of wrongful or fraudulent purpose, and the
name “Variable” does not appear obviously offensive.
We clarify, however, that Petitioner is restricted to using the word
‘variable’ as his legal name. The court is not granting him the power
to actually vary his legal name at will and he is limited to using ‘vari-
able,’ unless or until he changes his name again through a recognized
legal process.
2008-NMCA-105 (N.M. 2008)
Petition of Variable
Petitioner filed a request in district court to change his name to “Fuck
Censorship!” ” The district court denied the request stating that the
“proposed name change would be obscene, offensive and would not
comport with common decency.”
Petitioner argues on appeal that he is entitled to call himself what-
ever he wishes. He argues that the First Amendment to the United
States Constitution gives him that right and that it is improper gov-
ernment censorship to deny him that right.
We do not believe that the district court’s action infringes on Peti-
tioner’s right to free speech. Petitioner has a right under the common
law to assume any name that he wants so long as no fraud or mis-
representation is involved. He may do so without making any ap-
plication to the state. Thus, under the common law, Petitioner may
exercise his right to free speech and use any name at all. However,
once Petitioner files an application for a name change and seeks the
D. PERSONAL NAMES 787
approval of the courts for a name, it becomes the responsibility of
the courts to ensure that there are no lawful objections to the name
change.
Petitioner may make a political statement by changing his name,
but once he seeks the state’s imprimatur he is subject to the court’s
discretion in granting the government’s approval of the name. As the
court in Lee v. Ventura County Superior Court, stated in denying the pe- Lee: 11 Cal. Rptr. 2d 763 (1992)
tition of Lee to change his name to “nigger,” one has a common law
right to assume any name, and a right to engage in a social experi-
ment, but one does not have a right to require the state to participate
in the experiment.
In re Ravitch
754 A.2d 1287 (Pa. Super. 2000)
On October 26, 1998, Appellant filed a petition to change her name
from “Mary Ravitch” to “Mary R.” At the hearing, Appellant testi-
fied briefly that she no longer wished to use her ex-husband’s sur-
name “Ravitch” and did not want to revert to her premarital surname
“Gon.” Instead, she preferred to assume the “nice and simple” le er
“R” as her surname.
The primary purpose of the Judicial Change of Name Statute,
other than with regard to minor children, is to prohibit fraud by those
a empting to avoid financial obligations. Inquiry extends beyond
the intentions of the petitioner, however, and a court may properly
exercise its wide discretion to refuse a requested name if the name is
bizarre or unduly lengthy or difficult to pronounce or possessive of
a ridiculous offensive connotation.
While there is naturally some confusion a endant to all name
changes, Appellant’s desired surname is so bizarre that it would
likely be met with repeated suspicion and distrust in both business
and social se ings. Indeed, far from being a “nice and simple” iden-
tifier, an initialized surname has traditionally been used to preserve
one’s anonymity in various contexts. We thus associate Appellant’s
request with routinely denied requests for numerical or symbolized
surnames rather than with those accepted requests for non-western
or gender-transitional names. Finally, we must note that if courts
were to permit initialized official names as a ma er of course, we
would invite surname replication at an exponential rate, greatly in
excess of what is currently experienced with common surnames, so
as to make informal identification burdensome at best.
We find, therefore, that the trial court properly exercised its dis-
cretion when it ruled that the public interest overrides Appellant’s
personal interest in choosing the le er “R” as her official surname.
Where, as here, the desired name is devoid of any significance to the
petitioner and would likely spawn insurmountable difficulties affect-
ing both the petitioner and the general population, its denial is proper.
788 CHAPTER 8. PERSONALITY RIGHTS
Though we are to interpret the Judicial Change of Name Statute liber-
ally, we will not extend the statute to permit one to officially identify
oneself by use of a mere alphabetical symbol instead of by a mean-
ingful word or name.
In re Serpentfoot
285 Ga. App. 325 (2007)
Pro se appellant Serpentfoot appeals the superior court’s order
denying her third amended petition to change her name to Ann
Serpentfoot-Mooney and awarding $2,500 in a orney fees to Burge
Mooney III, who objected to the petition.
The record shows that Mooney is the publisher of the Rome News
Tribune. Appellant’s current name, as well as her former name, Anne
Otwell, appear in the newspaper on occasion in an unfla ering light.3
In her first petition, appellant sought to change her name to “Blowd-
je Mooney, IV.” Mooney objected on the ground that appellant in-
tended to defraud him and that this name change would cause him
embarrassment and ridicule. Appellant amended her petition three
times, on each occasion seeking an order to utilize the Mooney sur-
name.4
At the hearing held on the petition, appellant testified that the
newspaper refuses to stop using her former name, even though she
changed it to Serpentfoot after her arrest for protesting in the nude
during Christian prayers at government meetings; that the newspa-
per is blackmailing her and prints the name Otwell in order to hurt
her family and alienate her from her children; and that she chose
the surname Mooney, although she is “not particularly fond of the
name,” because she believes that Burge Mooney will not likely print
the name Otwell if it is associated with Mooney’s name. In her third
amended petition, appellant set forth the reason for seeking the name
change as follows:
3
This is due to various criminal and other newsworthy acts commi ed by appel-
lant. See Serpentfoot v. State, 524 S.E.2d 516 (Ga. App. 1999) (appellant’s suspended
sentence for public indecency revoked because she shot and killed her neighbors’
ten-year-old, crippled dog because it was annoying her).
4
Appellant chose “Bridge S. Mooney, IV,” then “S.S. Serpentfoot-Mooney,”
and finally, “Ann Serpentfoot-Mooney.
D. PERSONAL NAMES 789
I would like for our newspaper owner, Burge Mooney,
III to treat my name and the name of my previous hus-
band’s family, the same way he would like his name
treated. Since they, and I, pleaded with him and it did no
good, I see no solution to get him to practice “The Golden
Rule” as to my name unless my surname is the same as
his surname.
Given the probable harm to Burge Mooney and appellant’s im-
proper motives, the trial court exercised sound legal discretion in
denying the petition. Also, a person is not authorized to change his
name “with a view to deprive another fraudulently of any right under
the law.” Every individual has a common law right to the protection OCGA § 19-12-4.
of his own good name. Based on her testimony and the pleadings
appellant has included in the record, the court could have found that
she intended to deprive Mooney of his good name.
Weingand v. Lorre
41 Cal. Rptr. 778 (1964)
Appellant Eugene Weingand appeals from the judgment (‘Order’) en-
tered herein (1) denying appellant’s petition for change of name, and
(2) permanently restraining petitioner from using the name Peter Lo-
rie in either his personal or business activities unless petitioner first
obtains in writing the express wri en consent of Peter Lorre.
[The court discussed In re Ross.] There one Ross, an actor, had Ross: 67 P.2d 94 (1937)
used the name of Ian Keith as a stage name for some fifteen years; it
had become valuable to him and he desired it to be legally made his
name. There was no opposition but the trial court denied his petition
upon determining that he had once been adjudicated a bankrupt and
had not subsequently paid such debts. In reversing the judgment the
court held that a lawful bankruptcy proceeding without subsequent
payment of the discharged debts was not a substantial reason to jus-
tify the denial. The court then said:
The common law recognizes the right to change one’s per-
sonal name without the necessity of legal proceedings,
and the purpose of the statutory procedure is simply to
have, wherever possible, a record of the change. Hence
Mr. Ross may, regardless of the present petition, use the
name of Keith if he desires. And in keeping with the object
of the statute, a court to which he applies should normally
make its decree recording such change of name.
In light of the evidence herein and the substantial showing made in
opposition to the petition no abuse of discretion was exercised by
the trial court in denying the petitioner a legal record for change of
name. The evidence fully supports the findings of the court to the
790 CHAPTER 8. PERSONALITY RIGHTS
effect that it is not true petitioner’s last name is hard to pronounce;
it is true that petitioner has been engaged in show business and his
associates have called him by his proposed name for about one year;
petitioner has no family connection with the name Lorre or with any
other name sounding like Lorre or Lorie; that petitioner bears a phys-
ical resemblance of sorts to, and affects a manner of speech similar to
that for which Peter Lorre is known; that for more than one year peti-
tioner, in the course of his business transactions, has held himself out
to the public to be Peter Lorre, Peter Lorie, Peter Lorie, Jr., and also as
the son of Peter Lorre, the well-known actor. Petitioner, before mov-
ing to California, was active in theater groups in Germany and New
York City. For about one year he has been a ending an acting school
in Hollywood, California. That Peter Lorre is a world-famous actor
in motion pictures and television. His name is unique in the enter-
tainment industry and has acquired a secondary meaning in that it
cannotes the unique characterization, style, manner of speaking and
appearance of Mr. Lorre. That the appearance in the entertainment
industry of an actor bearing the name Peter Lorie would confuse the
public in that advertising and publicity for a performance of Peter
Lorie would draw members of the public expecting to see a perfor-
mance of Peter Lorre. This would directly affect the commercial and
professional value of the services and performances of Peter Lorre
both present and future. That petitioner has not acted in good faith
in filing his petition to change his name to Peter Lorie and his pur-
pose in seeking an order of the court authorizing such name change
is to ‘cash in’ on the reputation of Peter Lorre. These findings, based
upon credible evidence, constitute substantial reasons for the denial
by the court of the petition herein for a change of name.
The final ma er before us concerns the voluntary inclusion in the
conclusions of law and the judgment of a permanent injunction. As
pointed out in Ross, the common law recognizes the right of a person
to change his name without the necessity of legal proceedings. The
trial court therefore exceeded its jurisdiction in permanently enjoin-
ing petitioner from using the name Peter Lorie.
Application of Clark
85 N.Y.S.2d 667 (N.Y. Sup. 1948)
Identical applications are presented by Maxine Sheppard and Nancy
Clark for leave, by each, to assume the name of Nancy Clark-
Sheppard. Petitioners are actresses, radio and television artists and
desire to engage in television work as a partnership. Each avers that
”The theatre and its allied arts is justly famous throughout the ages
for its generosity. Unfortunately, this generosity does not always ex-
tend within its own ranks. Especially is this true in regard to publicity
and personal fame. We are about to launch this theatrical partnership.
Realizing the human frailities of woman, in particular her pe y jeal-
D. PERSONAL NAMES 791
ousies over career, we feel that by thus bearing the same name much
of this will be eliminated. Therefore, we wish to circumvent the pos-
sibility of having the spotlight of publicity trained more upon one of
us than the other. We wish to share and share alike in publicity, the
life blood of a performer.” To approve these requests would, it seems
to me, create a situation which may veritably lead to a ”Comedy of
Errors” and may tend to prejudice persons having business and com-
mercial relations with petitioners. The applications are denied.
In re Name Change of Handley
736 N.E.2d 125 (Ohio Probate Ct.
The petitioner filed an application with the court on December 29, 2000)
1999 to change his name to Santa Robert Claus. In his application,
he stated that children have called him “Santa Bob” year round and
that he lives his life for the children. The petitioner is a rotund gen-
tleman with a full white beard and wears wire glasses, which he says
a ributes to people commenting on his resemblance of Santa Claus.
The petitioner has been acting the role of Santa Claus for over forty
years, initially playing the role in a school play at age fourteen. The
petitioner receives gratuity for his portrayal of Santa Claus at various
events, but it does not cover his expenses incurred. The petitioner
stated in his application, “I don’t want people to say you look like
Santa, I want to be Santa.”
The court finds that there is an economic value to the name of
Santa Claus. The court finds no fraudulent intent of the petitioner to
take advantage of the economic value for the use of the name. How-
ever, the court finds public policy reasons to deny the petitioner’s
request, particularly the interference with the rights of others. The
petitioner is seeking more than a name change, he is seeking the iden-
tity of an individual that this culture has recognized throughout the
world, for well over one hundred years. Thus, the public has a pro-
prietary interest, a proprietary right in the identity of Santa Claus,
both in the name and the persona. Santa Claus is really an icon of
our culture; he exists in the minds of millions of children as well as
adults.
The history of Santa Claus – the North Pole, the elves, Mrs. Claus,
reindeer – is a treasure that society passes on from generation to gen-
eration, and the petitioner seeks to take not only the name of Santa
Claus, but also to take on the identity of Santa Claus. Although thou-
sands of people every year do take on the identity of Santa Claus
around Christmas, the court believes it would be very misleading to
the children in the community, particularly the children in the area
that the petitioner lives, to approve the applicant’s name change pe-
tition.
Therefore, for the foregoing reasons, the court finds that it would
792 CHAPTER 8. PERSONALITY RIGHTS
be against public policy to grant the application of the petitioner.
In re Porter
2001 UT 70
The issue before us is whether the trial court erred in denying David
Lynn Porter’s petition to change his name to “Santa Claus.” We con-
clude it did and reverse.
The reasons offered by the district court for denying Porter’s peti-
tion included that the name “Santa Claus” would likely “create con-
fusion, misunderstanding and intended or unintended, could allow
for substantial mischief.” The district court also feared that the name
could cause a substantial chilling effect for persons otherwise enti-
tled to exercise access to the courts but who would be hesitant to sue
Santa Claus.
On the record before us, we simply disagree with the district court.
Porter’s proposed name may be thought by some to be unwise, and
it may very well be more difficult for him to conduct his business
and his normal everyday affairs as a result. However, Porter has the
right to select the name by which he is known, within very broad lim-
its. Significantly, Porter already tells others that he is Santa Claus.
Allowing him to legally change his name to reflect his practice of do-
ing so is more likely to avoid greater confusion than to create it by
making Porter legally responsible for his actions in the name Santa
Claus.
E Defamation and False Light
Finally, while the tort law of defamation and false light is not strictly
speaking a body of intellectual property law, our survey would be
incomplete without it. Unlike the right of publicity (but like com-
mercial disparagement and false advertising), these torts are deeply
concerned with truth and falsity.
Milkovich v. Lorain Journal Co.
497 U.S. 1 (1990)
Respondent J. Theodore Diadiun authored an article in an Ohio news-
paper implying that petitioner Michael Milkovich, a local high school
wrestling coach, lied under oath in a judicial proceeding about an inci-
dent involving petitioner and his team which occurred at a wrestling
match. [The article stated, for example, ”Anyone who a ended the
meet, whether he be from Maple Heights, Mentor, or impartial ob-
server, knows in his heart that Milkovich and Sco lied at the hearing
after each having given his solemn oath to tell the truth.” Milkovich
sued for defamation. The Ohio courts concluded that the article con-
stituted constitutionally protected ”opinion.”]
Since the la er half of the 16th century, the common law has af-
forded a cause of action for damage to a person’s reputation by the
E. DEFAMATION AND FALSE LIGHT 793
publication of false and defamatory statements. In Shakespeare’s
Othello, Iago says to Othello:
Good name in man and woman, dear my lord, Is the
immediate jewel of their souls. Who steals my purse
steals trash; ’Tis something, nothing; ’Twas mine, ’tis
his, and has been slave to thousands; But he that filches
from me my good name Robs me of that which not
enriches him, And makes me poor indeed.”
Defamation law developed not only as a means of allowing an indi-
vidual to vindicate his good name, but also for the purpose of ob-
taining redress for harm caused by such statements. As the common
law developed in this country, apart from the issue of damages, one
usually needed only allege an unprivileged publication of false and
defamatory ma er to state a cause of action for defamation. The
common law generally did not place any additional restrictions on
the type of statement that could be actionable. Indeed, defamatory
communications were deemed actionable regardless of whether they
were deemed to be statements of fact or opinion. As noted in the 1977
Restatement (Second) of Torts § 566, Comment a:
Under the law of defamation, an expression of opinion
could be defamatory if the expression was sufficiently
derogatory of another as to cause harm to his reputation,
so as to lower him in the estimation of the community or to
deter third persons from associating or dealing with him.
The expression of opinion was also actionable in a suit for
defamation, despite the normal requirement that the com-
munication be false as well as defamatory.... This posi-
tion was maintained even though the truth or falsity of
an opinion—as distinguished from a statement of fact—is
not a ma er that can be objectively determined and truth
is a complete defense to a suit for defamation.
However, due to concerns that unduly burdensome defamation laws
could stifle valuable public debate, the privilege of “fair comment”
was incorporated into the common law as an affirmative defense to
an action for defamation. The principle of fair comment afforded le-
gal immunity for the honest expression of opinion on ma ers of legit-
imate public interest when based upon a true or privileged statement
of fact. As this statement implies, comment was generally privileged
when it concerned a ma er of public concern, was upon true or priv-
ileged facts, represented the actual opinion of the speaker, and was
not made solely for the purpose of causing harm. According to the
majority rule, the privilege of fair comment applied only to an ex-
pression of opinion and not to a false statement of fact, whether it
794 CHAPTER 8. PERSONALITY RIGHTS
was expressly stated or implied from an expression of opinion. Thus
under the common law, the privilege of “fair comment” was the de-
vice employed to strike the appropriate balance between the need for
vigorous public discourse and the need to redress injury to citizens
wrought by invidious or irresponsible speech.
New York Times: 376 U.S. 254 (1964) In 1964, we decided in New York Times Co. v. Sullivan that the First
Amendment to the United States Constitution placed limits on the ap-
plication of the state law of defamation. There the Court recognized
the need for “a federal rule that prohibits a public official from re-
covering damages for a defamatory falsehood relating to his official
conduct unless he proves that the statement was made with ‘actual
malice’ – that is, with knowledge that it was false or with reckless dis-
regard of whether it was false or not.” This rule was prompted by a
concern that, with respect to the criticism of public officials in their
conduct of governmental affairs, a state-law rule compelling the critic
of official conduct to guarantee the truth of all his factual assertions’
would deter protected speech.
Butts: 388 U.S. 130 (1967) Three years later, in Curtis Publishing Co. v. Bu s, a majority of
the Court determined that the New York Times test should apply to
criticism of ”public figures” as well as ”public officials.” The Court
has also determined that both for public officials and public figures,
a showing of New York Times malice is subject to a clear and convinc-
ing standard of proof.
The next step in this constitutional evolution was the Court’s
consideration of a private individual’s defamation actions involving
statements of public concern. Although the issue was initially in
doubt, the Court ultimately concluded that the New York Times malice
standard was inappropriate for a private person a empting to prove
Gertz: 418 U.S. 323 (1974) he was defamed on ma ers of public interest. Ger v. Robert Welch,
Inc. As we explained:
Public officials and public figures usually enjoy signifi-
cantly greater access to the channels of effective commu-
nication and hence have a more realistic opportunity to
counteract false statements than private individuals nor-
mally enjoy.
More important, public officials and public figures
have voluntarily exposed themselves to increased risk of
injury from defamatory falsehood concerning them. No
such assumption is justified with respect to a private indi-
vidual.
Nonetheless, the Court believed that certain significant constitutional
protections were warranted in this area. First, we held that the States
could not impose liability without requiring some showing of fault.
Second, we held that the States could not permit recovery of pre-
E. DEFAMATION AND FALSE LIGHT 795
sumed or punitive damages on less than a showing of New York Times
malice.
Still later, in Philadelphia Newspapers, Inc. v. Hepps, we held that Hepps: 475 U.S. 767 (1986)
“the common-law presumption that defamatory speech is false can-
not stand when a plaintiff seeks damages against a media defendant
for speech of public concern.” In other words, the Court fashioned a
constitutional requirement that the plaintiff bear the burden of show-
ing falsity, as well as fault, before recovering damages.
Respondents would have us recognize, in addition to the estab-
lished safeguards discussed above, still another First–Amendment-
based protection for defamatory statements which are categorized as
“opinion” as opposed to “fact.” For *18 this proposition they rely
principally on the following dictum from our opinion in Ger :
Under the First Amendment there is no such thing as a
false idea. However pernicious an opinion may seem, we
depend for its correction not on the conscience of judges
and juries but on the competition of other ideas. But there
is no constitutional value in false statements of fact.
Judge Friendly appropriately observed that this passage “has become
the opening salvo in all arguments for protection from defamation ac-
tions on the ground of opinion, even though the case did not remotely
concern the question.” Cianci v. New Times Publishing Co. Read in con- Cianci: 639 F.2d 54 (2d Cir. 1980)
text, though, the fair meaning of the passage is to equate the word
“opinion” in the second sentence with the word “idea” in the first
sentence. Under this view, the language was merely a reiteration of
Justice Holmes’ classic “marketplace of ideas” concept.
Thus, we do not think this passage from Ger was intended to
create a wholesale defamation exemption for anything that might be
labeled “opinion.” Not only would such an interpretation be contrary
to the tenor and context of the passage, but it would also ignore the
fact that expressions of “opinion” may often imply an assertion of
objective fact.
If a speaker says, “In my opinion John Jones is a liar,” he implies
a knowledge of facts which lead to the conclusion that Jones told an
untruth. Even if the speaker states the facts upon which he bases his
opinion, if those facts are either incorrect or incomplete, or if his as-
sessment of them is erroneous, the statement may still imply a false
assertion of fact. Simply couching such statements in terms of opin-
ion does not dispel these implications; and the statement, “In my
opinion Jones is a liar,” can cause as much damage to reputation as
the statement, “Jones is a liar.” As Judge Friendly aptly stated: “It
would be destructive of the law of libel if a writer could escape liabil-
ity for accusations of defamatory conduct simply by using, explicitly
or implicitly, the words ‘I think.’” Cianci
796 CHAPTER 8. PERSONALITY RIGHTS
Foremost, we think Hepps stands for the proposition that a state-
ment on ma ers of public concern must be provable as false before
there can be liability under state defamation law, at least in situa-
tions, like the present, where a media defendant is involved. Thus,
unlike the statement, ”In my opinion Mayor Jones is a liar,” the state-
ment, ”In my opinion Mayor Jones shows his abysmal ignorance by
accepting the teachings of Marx and Lenin,” would not be actionable.
Hepps ensures that a statement of opinion relating to ma ers of pub-
lic concern which does not contain a provably false factual connota-
tion will receive full constitutional protection.7
Next, [another] line of cases provides protection for statements
that cannot ”reasonably [be] interpreted as stating actual facts” about
Falwell: 485 U.S. 46 (1988) an individual. Hustler Magazine, Inc. v. Falwell. This provides assur-
ance that public debate will not suffer for lack of ”imaginative expres-
sion” or the ”rhetorical hyperbole” which has traditionally added
much to the discourse of our Nation.
We are not persuaded that, in addition to these protections, an
additional separate constitutional privilege for ”opinion” is required
to ensure the freedom of expression guaranteed by the First Amend-
ment. The dispositive question in the present case then becomes
whether a reasonable factfinder could conclude that the statements in
the Diadiun column imply an assertion that petitioner Milkovich per-
jured himself in a judicial proceeding. We think this question must
be answered in the affirmative. As the Ohio Supreme Court itself ob-
served: ”The clear impact in some nine sentences and a caption is that
Milkovich ‘lied at the hearing after . . . having given his solemn oath
to tell the truth.’” This is not the sort of loose, figurative, or hyperbolic
language which would negate the impression that the writer was se-
riously maintaining that petitioner commi ed the crime of perjury.
Nor does the general tenor of the article negate this impression.
We also think the connotation that petitioner commi ed perjury
is sufficiently factual to be susceptible of being proved true or false.
A determination whether petitioner lied in this instance can be made
on a core of objective evidence by comparing, inter alia, petitioner’s
testimony before the OHSAA board with his subsequent testimony
before the trial court.
The numerous decisions discussed above establishing First
Amendment protection for defendants in defamation actions surely
7
We note that the issue of falsity relates to the defamatory facts implied by a
statement. For instance, the statement, ”I think Jones lied,” may be provable as
false on two levels. First, that the speaker really did not think Jones had lied but
said it anyway, and second that Jones really had not lied. It is, of course, the second
level of falsity which would ordinarily serve as the basis for a defamation action,
though falsity at the first level may serve to establish malice where that is required
for recovery.
E. DEFAMATION AND FALSE LIGHT 797
demonstrate the Court’s recognition of the Amendment’s vital guar-
antee of free and uninhibited discussion of public issues. But there is
also another side to the equation; we have regularly acknowledged
the ”important social values which underlie the law of defamation,”
and recognized that ”[s]ociety has a pervasive and strong interest
in preventing and redressing a acks upon reputation.” Rosenbla v. Rosenblatt: 383 U.S. 75 (1966)
Baer. Justice Stewart in that case put it with his customary clarity: In his concurring opinion
The right of a man to the protection of his own reputation
from unjustified invasion and wrongful hurt reflects no
more than our basic concept of the essential dignity and
worth of every human being — a concept at the root of
any decent system of ordered liberty. ...
The destruction that defamatory falsehood can bring
is, to be sure, often beyond the capacity of the law to re-
deem. Yet, imperfect though it is, an action for damages
is the only hope for vindication or redress the law gives to
a man whose reputation has been falsely dishonored.”
We believe our decision in the present case holds the balance true.
Restatement (Second) of Torts
One who gives publicity to a ma er concerning another that places § 652E
the other before the public in a false light is subject to liability to the Publicity Placing Person in False Light
other for invasion of his privacy, if
(a) the false light in which the other was placed would be highly
offensive to a reasonable person, and
(b) the actor had knowledge of or acted in reckless disregard as to
the falsity of the publicized ma er and the false light in which
the other would be placed.
cmt. b. Relation to Defamation. – The interest protected by this Sec-
tion is the interest of the individual in not being made to appear be-
fore the public in an objectionable false light or false position, or in
other words, otherwise than as he is. In many cases to which the rule
stated here applies, the publicity given to the plaintiff is defamatory,
so that he would have an action for libel or slander under the rules
stated in Chapter 24. In such a case the action for invasion of privacy
will afford an alternative or additional remedy, and the plaintiff can
proceed upon either theory, or both, although he can have but one
recovery for a single instance of publicity.
It is not, however, necessary to the action for invasion of privacy
that the plaintiff be defamed. It is enough that he is given unreason-
able and highly objectionable publicity that a ributes to him char-
acteristics, conduct or beliefs that are false, and so is placed before
798 CHAPTER 8. PERSONALITY RIGHTS
the public in a false position. When this is the case and the ma er at-
tributed to the plaintiff is not defamatory, the rule here stated affords
a different remedy, not available in an action for defamation.
Illustrations:
5. A is a war hero, distinguished for bravery in a famous ba le.
B makes and exhibits a motion picture concerning A’s life, in
which he inserts a detailed narrative of a fictitious private life
a ributed to A, including a non-existent romance with a girl. B
knows this ma er to be false. Although A is not defamed by
the motion picture, B is subject to liability to him for invasion of
privacy.
cmt. c. Highly offensive to a reasonable person. – The rule stated in this
Section applies only when the defendant knows that the plaintiff, as
a reasonable man, would be justified in the eyes of the community in
feeling seriously offended and aggrieved by the publicity. Complete
and perfect accuracy in published reports concerning any individual
is seldom a ainable by any reasonable effort, and most minor errors,
such as a wrong address for his home, or a mistake in the date when
he entered his employment or similar unimportant details of his ca-
reer, would not in the absence of special circumstances give any seri-
ous offense to a reasonable person.
Illustrations:
6. A is a noted musician. B writes and publishes a biography of A,
which is in general a correct and favorable portrayal. Included
in the book are a number of minor mistakes concerning details
of A’s career, together with accounts of a few fictitious but quite
unimportant incidents in which A is reported to have been in-
volved and conversations he is reported to have had with others.
These are not defamatory and nothing in the book casts any ad-
verse reflection upon A’s character or reputation. B’s a ention
is called to these errors, but he nevertheless publishes the book.
B has not invaded A’s privacy.
Tyne ex rel. Tyne v. Time Warner Entertainment Co., L.P.
204 F. Supp. 2d 1338 (M.D. Fla. 2002)
In October 1991, the fishing vessel the Andrea Gail was caught in a se-
vere storm, and lost at sea. All of the crewmembers aboard the vessel
were presumed dead. Due to interest in the unusual meteorologi-
cal forces that caused the storm, the loss of the Andrea Gail became
the subject of news stories and a best-selling book, The Perfect Storm,
by Sebastian Junger. In June 2000, Warner Bros. released The Perfect
Storm (“the Picture”), a motion picture based on the book and the
events that occurred during the “storm of the century.”
[Plaintiffs were the surviving children and spouses of some of the
crew members. They sued the filmmakers of The Perfect Storm for]
E. DEFAMATION AND FALSE LIGHT 799
(1) unauthorized commercial appropriation of decedents’ likenesses,
in violation of Florida Statute § 540.08; (2) unauthorized commercial
appropriation of Plaintiffs’ likenesses, also in violation of § 540.08; (3)
common law invasion of privacy—false light; and (4) common law
invasion of privacy based on disclosure of private facts.
A. Section 540.08 Claims
Defendants concede that they did not obtain authorization to include
characters based on Plaintiffs and the decedents prior to the produc-
tion of The Perfect Storm. However, they argue that they did not vio-
late § 540.08 by failing to obtain such authorization, because The Per-
fect Storm is an expressive work that has no commercial advertising
purpose, and is, therefore, outside the scope of the rights protected
by § 540.08.
Despite Plaintiffs’ protestations to the contrary, the Court believes
that this case is squarely on point with the case of Loft v. Fuller. In Loft: 408 So.2d 619 (Fla. Ct. App. 1981)
that case, decedent Robert Loft was a commercial pilot who died in
the crash of Eastern Airlines Flight 401. In the weeks and months
following the crash, there were reported sightings of apparitions of
Flight 401 crew members, including Loft. These reports were exten-
sively covered by the news media. In 1976, John Fuller wrote a non-
fiction book about the crash, “The Ghost of Flight 401,” which was
later made into a motion picture. Loft’s family filed an action for in-
vasion of privacy and unauthorized publication of Loft’s name and
likeness, based on the movie’s depiction of Loft as a “reappearing
ghost.”
The Fourth District Court of Appeal held:
In our view, Section 540.08, by prohibiting the use of one’s
name or likeness for trade, commercial or advertising pur-
poses, is designed to prevent the unauthorized use of a
name to directly promote the product or service of the
publisher. Thus, the publication is harmful not simply
because it is included in a publication that is sold for a
profit, but rather because of the way it associates the in-
dividual’s name or his personality with something else.
Such is not the case here. While we agree that at least one
of the purposes of the author and publisher in releasing
the publication in question was to make money through
sales of copies of the book and that such a publication is
commercial in that sense, this in no way distinguished this
book from almost all other books, magazines or newspa-
pers and simply does not amount to the kind of commer-
cial exploitation prohibited by the statute.
The court’s statement makes it clear that merely using an individual’s
800 CHAPTER 8. PERSONALITY RIGHTS
name or likeness in a publication is not actionable under § 540.08. A
motion picture is not, therefore, in and of itself, a “commercial pur-
pose.” Furthermore, the promotion and advertising of the picture
also do not constitute a commercial purpose.
In the instant case, Plaintiffs have failed to raise a genuine issue of
material fact as to whether the use of decedents’ likenesses and their
own likenesses were used for the purposes of trade or a commercial
purpose. Plaintiffs have presented no evidence showing that their
names and likenesses were used to directly promote The Perfect Storm.
In the absence of such evidence, Plaintiffs have no cause of action
under § 540.08.
Finally, the Court addresses Plaintiffs’ argument that Defendants
are liable under § 540.08 because the Picture contains fictionalized el-
"We think it does not matter whether ements even though it purports to be “a true story.” This argument
the book is properly described as a bi- has no merit. No Florida court has interpreted § 540.08 to include
ography, a fictional biography, or any
an element of falsity. It is therefore immaterial whether The Perfect
other kind of literary work. It is not for
a court to pass on literary categories, Storm claims to be a work of fiction or nonfiction. Plaintiffs’ argu-
or literary judgment. It is enough that ments regarding the alleged fictionalization of the Picture suggest
the book is a literary work and not sim- that they have confused the statutory action of unauthorized publi-
ply a disguised commercial advertise- cation with the common law action of false light invasion of privacy.
ment for the sale of goods or services.
The Court, however, has no such problem distinguishing those two
The protection of the right of free ex-
pression is so important that we should causes of action. Consequently, the Court determines that the truth
not extend any right of publicity, if such or falsity of the events depicted in the Picture is of no import to the
exists, to give rise to a cause of ac- issue of whether there was unauthorized publication of the Plaintiffs’
tion against the publication of a literary and decedents’ likenesses.
work about a deceased person." Frosch
v. Grosset & Dunlap, Inc.427 N.Y.S.2d 828 B. False Light Invasion of Privacy
(N.Y. App. Div. 1980) (dismissing suit
by Marilyn Monroe's estate against the Plaintiffs Erica and Billie–Jo Tyne do not have standing to bring an
publisher of Norman Mailer's Marilyn)
action for false light invasion of privacy on their father’s behalf. It is
well-se led that:
a cause of action for invasion of the common law right of
privacy is strictly personal and may be asserted only by
the person who is the subject of the challenged publica-
tion. Relatives of a deceased person have no right of action
for invasion of privacy of the deceased person regardless
of how close such personal relationship was with the de-
ceased.
Loft The only recognized exception to this rule occurs when plaintiffs
experience an independent violation of their own personal privacy
rights other than the violation alleged to have occurred indirectly by
virtue of the publicity given to the deceased.
Plaintiffs argue that they have experienced an independent viola-
tion of their own personal privacy rights by having been individually
depicted in the Picture. It is true that both Erica and Billie–Jo Tyne
E. DEFAMATION AND FALSE LIGHT 801
are portrayed in the Picture. However, neither actress portraying Er-
ica or Billie–Jo speaks any lines at any point during the film. In the
film, the actresses are shown in a photograph in the wheelhouse of
the Andrea Gail; both Erica and Billie–Jo admi ed in requests for ad-
missions that their father kept such a photograph in the wheelhouse
of the vessel. The Picture also includes a scene depicting Erica and
Billie–Jo a ending their father’s memorial service. Both Erica and
Billie–Jo admit that they a ended the memorial service. Thus, the
Picture cannot be said to have portrayed Erica and Billie–Jo in a false
light, because they have admi ed to the factual accuracy of the scenes
depicting them. The Picture’s portrayal of the Tyne daughters is not
sufficiently egregious in nature to establish a claim of invasion of pri-
vacy against Defendants.
C. Invasion of Privacy—Public Disclosure of Private Facts
Plaintiffs Debra Tigue and Dale R. Murphy, Jr. assert claims for inva-
sion of privacy based on public disclosure of private facts. The com-
plaint alleges that The Perfect Storm falsely portrays Tigue and Mur-
phy, Jr. as living in Massachuse s. In their memorandum in opposi-
tion to the motion for summary judgment, Plaintiffs further contend
that “the depiction in the Picture of Debra Tigue as being intimately
involved with another man who is about to supplant the role of dece-
dent Murphy in the lives of both Debra Tipe and Dale R. Murphy,
Jr. is likewise entirely fabricated and has been advanced by Warner,
as alleged in the Complaint, in knowing or reckless disregard of the
truth.”
In response to the motion for summary judgment, Plaintiffs pri-
marily argue that the details of Tigue and Murphy, Jr.’s lives, as de-
picted in the Picture, are of no concern to the public. The Court need
not address this issue, however, because it is clear that the Picture did
not disclose private facts about Tigue and Murphy, Jr.
The Restatement (Second) of Torts has recognized that an essen-
tial element of the tort of public disclosure of private facts is that the
facts at issue be true. However, Plaintiffs argue that the Picture’s en-
tire depiction of Tigue and Murphy, Jr. is fabricated and false. Be-
cause none of the facts disclosed by the picture are alleged to be true,
Plaintiffs have no cause of action for invasion of privacy based on
public disclosure of private facts. In a situation where the “facts” dis-
closed in a publication are, in actuality, false, the interest invaded is
that protected by the defamation and false-light torts: the interest in
being represented truthfully to the world. However, because Tigue
and Murphy, Jr. did not assert claims for defamation or false light
invasion of privacy, they do not have a valid cause of action, and De-
fendants are entitled to summary judgment on their claims.
802 CHAPTER 8. PERSONALITY RIGHTS
Restatement (Second) of Torts
§ 564
cmt d. Fictitious character. – A libel may be published of an actual
Applicability of Defamatory Communi- person by a story or essay, novel, play or moving picture that is in-
cation to Plaintiff tended to deal only with fictitious characters if the characters or plot
bear such a resemblance to actual persons or events as to make it rea-
sonable for its readers or audience to understand that a particular
character is intended to portray that person. The fact that the author
or producer states that his work is exclusively one of fiction and in no
sense applicable to living persons is not decisive if readers actually
and reasonably understand otherwise. Such a statement, however, is
a factor to be considered by the jury in determining whether readers
did so understand it, or, if so, whether the understanding was reason-
able.
Illustration:
1. The A motion picture producing company produces a film
based upon historical events but offered as a fictitious play. In
the film, B, a young woman who was a participant in some of
these events, is represented as having yielded to the hypnotic
power of the villain. In spite of the deviations of the film from
the exact historical facts, B’s friends reasonably understand that
she is portrayed in the picture. The film is defamatory of B.
52 Stan. L. Rev. 1283 (2000)
Jessica Litman
Information Privacy/Information Property
The entire house of cards represented by Hollywood’s recognition of
property rights in subjects’ life stories is an illusory creation impelled
by the realities of financing. If one seeks either loans or investors,
it helps to have a piece of property to offer as collateral. Producers
of works based loosely on truth rather than fiction have no property
rights in their subjects. If the central actors in the story can be per-
suaded to ”sell” the exclusive rights to film what happened to them,
then those rights become property that a producer can take to the
bank, even though no court would enjoin such a production on the
ground that its principals lacked such a property right or had created
their production despite the fact that the relevant life story rights had
been sewn up by someone else.
9
Design
This chapter deals with IP protections for the designs of three-
dimensional objects. The fundamental conceptual challenge such ob-
jects present is that they can be both useful and beautiful, and the
bodies of IP law we have studied so far tend to insist either that the
only protect the useful aspects or only that they don’t protect the
useful aspects. Thus, the doctrinal challenge in each IP area is how
to draw the line between the utilitarian/functional/useful/applied as-
pects of an object’s design and everything else. As we will see, design
patents cut the Gordian knot by defining utility extraordinarily nar-
rowly. But to understand how that solution works, we first need to
see the difficulties other approaches face. And, as we will see, the
design-patent solution creates its own difficulties.
A Patent
There are no per se rules preventing the issuance of utility patents
on three-dimensional designs; they are just not usually an effective
tool for protecting design as such. One problem is utility: if the de-
sign’s only improvement over the prior art is that it looks be er, this
might not qualify even under the permissive Juicy Whip standard. An-
other is claim drafting: to twist the phrase, writing about design is
like dancing about architecture. Indefiniteness and enablement are
likely to hem in the applicant’s ability to capture the design in words.
So while utility patents are well adapted to capturing the functional
aspects of a design, they are so awkward as to be useless at capturing
everything else.
B Copyright
Copyright deals with the functionality problem for three-
dimensional objects in three different ways, depending on whether
804 CHAPTER 9. DESIGN
the work is sculptural or architectural, and on whether VARA is in
If you add in Baker and the variations in- play.
troduced for computer software, there
are at least five different functionality 1 Useful Articles
tests.
One could imagine drawing a distinction between fine art (like paint-
ings and novels) and non-art (like boats and tools). Bleistein, however,
dooms any inquiry into a work’s artistry. Instead, the modern test fo-
cuses on utility; if a work is useful at all, the question is how much
of the work is infected by its utility. You already know the answer
in two dimensions: it is given by Baker and the merger doctrine. In
three dimensions, the test is somewhat more stringent.
347 U.S. 201 (1954)
Mazer v. Stein
Respondents are partners in the manufacture and sale of electric
lamps. One of the respondents created original works of sculpture in
the form of human figures by traditional clay-model technique. From
this model, a production mold for casting copies was made. The re-
sulting statue es, without any lamp components added, were sub-
mi ed by the respondents to the Copyright Office for registration as
”works of art” or reproductions thereof and certificates of registra-
tion issued. Thereafter, the statue es were sold in quantity through-
out the country both as lamp bases and as statue es. Petitioners are
partners and, like respondents, make and sell lamps. Without autho-
rization, they copied the statue es, embodied them in lamps and sold
them.
[Under the 1909 Copyright Act, copyright extended to ”all the
writings of an author,” and the two potentially applicable classes of
works were ”Works of art; models or designs for works of art” and
”Reproductions of a work of art”.]
The case requires an answer, not as to a manufacturer’s right to
register a lamp base but as to an artist’s right to copyright a work of
art intended to be reproduced for lamp bases. Petitioners question
the validity of a copyright of a work of art for ”mass” production.
”Reproduction of a work of art” does not mean to them unlimited
reproduction. Their position is that a copyright does not cover indus-
trial reproduction of the protected article.
It is not the right to copyright an article that could have utility
that petitioners oppose. Their brief accepts the copyrightability of
the great carved golden saltcellar of Cellini but adds:
If, however, Cellini designed and manufactured this item
in quantity so that the general public could have salt
cellars, then an entirely different conclusion would be
reached. In such case, the salt cellar becomes an article of
Lamp base manufacture having utility in addition to its ornamental
B. COPYRIGHT 805
value and would therefore have to be protected by design
patent.
The [longstanding] practice of the Copyright Office was to allow reg-
istration ”as works of the fine arts” of articles of the same character
as those of respondents now under challenge. It is clear Congress in-
tended the scope of the copyright statute to include more than the tra-
ditional fine arts. Individual perception of the beautiful is too varied
a power to permit a narrow or rigid concept of art. We find nothing
in the copyright statute to support the argument that the intended
use or use in industry of an article eligible for copyright bars or inval-
idates its registration.
We hold that the [design] patentability of the statue es, fi ed
Salt cellar by Benvenuto Cellini.
as lamps or unfi ed, does not bar copyright as works of art. Nei-
The Cellini Salt Cellar, worth an esti-
ther the Copyright Statute nor any other says that because a thing is
mated $60 million, was stolen in 2003
patentable it may not be copyrighted. from the Kunsthistorisches Museum in
The economic philosophy behind the clause empowering Vienna and recovered in 2006 after the
Congress to grant patents and copyrights is the conviction that thief was identified.
encouragement of individual effort by personal gain is the best
way to advance public welfare through the talents of authors and
inventors in ”Science and useful Arts.” Sacrificial days devoted to
such creative activities deserve rewards commensurate with the
services rendered.
Douglas, J., concurring:
An important constitutional question underlies this case—a ques-
tion which was stirred on oral argument but not treated in the briefs.
The Copyright Office has supplied us with a long list of such arti-
cles which have been copyrighted – statue es, book ends, clocks,
lamps, door knockers, candlesticks, inkstands, chandeliers, piggy
banks, sundials, salt and pepper shakers, fish bowls, casseroles, and
ash trays. Perhaps these are all ”writings” in the constitutional sense.
But to me, at least, they are not obviously so.
Mazer frames the question. Here is how Congress tried to answer it
in the 1976 Copyright Act.
Copyright Act
• “Pictorial, graphic, and sculptural works” include two-
17 U.S.C. § 101
dimensional and three-dimensional works of fine, graphic, and Definitions
applied art, photographs, prints and art reproductions, maps,
globes, charts, diagrams, models, and technical drawings, in-
cluding architectural plans. Such works shall include works of
806 CHAPTER 9. DESIGN
artistic craftsmanship insofar as their form but not their mechan-
ical or utilitarian aspects are concerned; the design of a useful
article, as defined in this section, shall be considered a picto-
rial, graphic, or sculptural work only if, and only to the extent
that, such design incorporates pictorial, graphic, or sculptural
features that can be identified separately from, and are capable
of existing independently of, the utilitarian aspects of the arti-
cle.
• A “useful article” is an article having an intrinsic utilitarian
function that is not merely to portray the appearance of the arti-
cle or to convey information. An article that is normally a part
of a useful article is considered a “useful article”.
H.R. Rep No. 94-1476
1976 U.S.C.C.A.N. 5659
The Commi ee is seeking to draw as clear a line as possible between
copyrightable works of applied art and uncopyrighted works of in-
dustrial design. A two-dimensional painting, drawing, or graphic
work is still capable of being identified as such when it is printed on
or applied to utilitarian articles such as textile fabrics, wallpaper, con-
tainers, and the like. The same is true when a statue or carving is used
to embellish an industrial product or, as in the Mazer case, is incorpo-
rated into a product without losing its ability to exist independently
as a work of art. On the other hand, although the shape of an indus-
trial product may be aesthetically satisfying and valuable, the Com-
mi ee’s intention is not to offer it copyright protection under the bill.
Unless the shape of an automobile, airplane, ladies’ dress, food pro-
cessor, television set, or any other industrial product contains some
element that, physically or conceptually, can be identified as separa-
ble from the utilitarian aspects of that article, the design would not be
copyrighted under the bill. The test of separability and independence
from ‘the utilitarian aspects of the article’ does not depend upon the
nature of the design – that is, even if the appearance of an article is de-
termined by esthetic (as opposed to functional) considerations, only
elements, if any, which can be identified separately from the useful
article as such are copyrightable. And, even if the three-dimensional
design contains some such element (for example, a carving on the
back of a chair or a floral relief design on silver flatware), copyright
protection would extend only to that element, and would not cover
the over-all configuration of the utilitarian article as such.
In reporting S. 22, the House Judiciary Commi ee has deleted Ti-
tle II, which would create a new limited form of copyright protection
for ”original” designs which are clearly a part of a useful article, re-
gardless of whether such designs could stand by themselves, sepa-
B. COPYRIGHT 807
rate from the article itself. Thus designs of useful articles which do
not meet the design patent standard of ”novelty” would for the first
time be protected. The Commi ee chose to delete Title II in part be-
cause the new form of design protection provided by Title II could not
truly be considered copyright protection and therefore appropriately
within the scope of copyright revision. In addition, Title II left unan-
swered at least two fundamental issues which will require further
study by the Congress. These are: first, what agency should admin-
ister this new design protection system and. second, should typeface
designs be given the protections of the title? The issues raised by Title
II have not been resolved by its deletion from the Copyright Revision
Bill. Therefore, the Commi ee believes that it will be necessary to
reconsider the question of design protection in new legislation dur-
ing the 95th Congress. At that time more complete hearings on the
subject may be held.
Brandir Intern., Inc. v. Cascade Pacific Lumber Co.
834 F.2d 1142 (2d Cir. 1987)
The courts have had difficulty framing tests by which the fine line es-
tablishing what is and what is not copyrightable can be drawn. Once
again we are called upon to draw such a line, this time in a case in-
volving the ”RIBBON Rack,” a bicycle rack made of bent tubing that
is said to have originated from a wire sculpture.
Against the history of copyright protection well set out in the ma-
jority opinion in , and in
One aspect of the distinction that has drawn considerable a en-
tion is the reference in the House Report to ”physically or conceptu-
ally” separable elements. The District of Columbia Circuit in Esquire, RIBBON Rack
Inc. v. Ringer, (holding outdoor lighting fixtures ineligible for copy-
Esquire: 591 F.2d 796 (D.C. Cir. 1978)
right), called this an ”isolated reference” and gave it no significance.
In Kieselstein-Cord v. Accessories by Pearl, Inc., this court accepted the
idea that copyrightability can adhere in the ”conceptual” separation
of an artistic element. Indeed, the court went on to find such concep-
tual separation in reference to ornate belt buckles that could be and
were worn separately as jewelry.
In Carol Barnhart Inc. v. Economy Cover Corp., a divided panel
of this circuit affirmed a district court grant of summary judgment
of noncopyrightability of four life-sized, anatomically correct hu-
man torso forms. Carol Barnhart distinguished Kieselstein-Cord, but
it surely did not overrule it. The distinction made was that the orna-
mented surfaces of the belt buckles ”were not in any respect required
by their utilitarian functions,” but the features claimed to be aesthetic Lighting fixture in Esquire
or artistic in the Carol Barnhart forms were ”inextricably intertwined
Kieselstein-Cord: 632 F.2d 989 (2d Cir.
with the utilitarian feature, the display of clothes.” As Judge New- 1980)
man’s dissent made clear, the Carol Barnhart majority did not dispute Carol Barnhart: 773 F.2d 411 (2d Cir.
”that conceptual separability is distinct from ‘physical separability’ 1985)
808 CHAPTER 9. DESIGN
and, when present, entitles the creator of a useful article to a copy-
right on its design.”
”Conceptual separability” is thus alive and well, at least in this
circuit. The problem, however, is determining exactly what it is and
how it is to be applied. Judge Newman’s illuminating discussion in
dissent in Carol Barnhart proposed a test that aesthetic features are
conceptually separable if ”the article stimulates in the mind of the
beholder a concept that is separate from the concept evoked by its
utilitarian function.” This approach is to be distinguished from other
possible ways in which conceptual separability can be tested, includ-
ing whether the primary use is as a utilitarian article as opposed to
an artistic work, whether the aesthetic aspects of the work can be said
to be ”primary,” and whether the article is marketable as art, none
of which is very satisfactory. But Judge Newman’s test was rejected
outright by the majority as ”a standard so ethereal as to amount to
a ‘nontest’ that would be extremely difficult, if not impossible, to ad-
minister or apply.”
Perhaps the differences between the majority and the dissent in
Carol Barnhart might have been resolved had they had before them
Denicola: 67 Minn. L. Rev. 707 (1983) Robert C. Denicola, Applied Art and Industrial Design: A Suggested Ap-
proach to Copyright in Useful Articles. There, Professor Denicola points
out that although the Copyright Act of 1976 was an effort ”to draw as
clear a line as possible,” in truth ”there is no line, but merely a spec-
trum of forms and shapes responsive in varying degrees to utilitar-
ian concerns.” Denicola argues that ”the statutory directive requires
a distinction between works of industrial design and works whose
origins lie outside the design process, despite the utilitarian environ-
ment in which they appear.” He views the statutory limitation of
copyrightability as ”an a empt to identify elements whose form and
appearance reflect the unconstrained perspective of the artist,” such
features not being the product of industrial design. ”Copyrightabil-
ity, therefore, should turn on the relationship between the proffered
work and the process of industrial design.” He suggests that ”the
dominant characteristic of industrial design is the influence of non-
aesthetic, utilitarian concerns” and hence concludes that copyrighta-
bility ”ultimately should depend on the extent to which the work
reflects artistic expression uninhibited by functional considerations.”
To state the Denicola test in the language of conceptual separability, if
design elements reflect a merger of aesthetic and functional consider-
ations, the artistic aspects of a work cannot be said to be conceptually
separable from the utilitarian elements. Conversely, where design el-
ements can be identified as reflecting the designer’s artistic judgment
exercised independently of functional influences, conceptual separa-
bility exists.
We believe that Professor Denicola’s approach provides the best
B. COPYRIGHT 809
test for conceptual separability and, accordingly, adopt it here for sev-
eral reasons. First, the approach is consistent with the holdings of our
previous cases. In Kieselstein-Cord, for example, the artistic aspects
of the belt buckles reflected purely aesthetic choices, independent
of the buckles’ function, while in Carol Barnhart the distinctive fea-
tures of the torsos – the accurate anatomical design and the sculpted
shirts and collars – showed clearly the influence of functional con-
cerns. Though the torsos bore artistic features, it was evident that the
designer incorporated those features to further the usefulness of the
torsos as mannequins. Second, the test’s emphasis on the influence of
utilitarian concerns in the design process may help, as Denicola notes,
to ”alleviate the de facto discrimination against nonrepresentational
art that has regre ably accompanied much of the current analysis.” 3
Finally, and perhaps most importantly, we think Denicola’s test will Belt buckle from Kieselstein-Cord
not be too difficult to administer in practice. The work itself will con-
tinue to give ”mute testimony” of its origins. In addition, the parties
will be required to present evidence relating to the design process and
the nature of the work, with the trier of fact making the determination
whether the aesthetic design elements are significantly influenced by
functional considerations.
Turning now to the facts of this case, we note first that Brandir con-
tends, and its chief owner David Levine testified, that the original de-
sign of the RIBBON Rack stemmed from wire sculptures that Levine Torso from Carol Barnhart
had created, each formed from one continuous undulating piece of
wire. These sculptures were, he said, created and displayed in his
home as a means of personal expression, but apparently were never
sold or displayed elsewhere. He also created a wire sculpture in the
shape of a bicycle and states that he did not give any thought to the
utilitarian application of any of his sculptures until he accidentally
juxtaposed the bicycle sculpture with one of the self-standing wire
sculptures. It was not until November 1978 that Levine seriously
began pursuing the utilitarian application of his sculptures, when a
friend, G. Duff Bailey, a bicycle buff and author of numerous articles
about urban cycling, was at Levine’s home and informed him that
the sculptures would make excellent bicycle racks, permi ing bicy-
cles to be parked under the overloops as well as on top of the under-
loops. Following this meeting, Levine met several times with Bailey
3
We are reminded not only by Judge Gesell in the district court in Esquire but
by Holmes in Bleistein, by Mazer, and by numerous other opinions, that we judges
should not let our own view of styles of art interfere with the decisionmaking pro-
cess in this area. Denicola suggests that the shape of a Mickey Mouse telephone is
copyrightable because its form is independent of function, and ”a telephone shape Mickey Mouse telephone
owing more to Arp, Brancusi, or Moore than Disney may be equally divorced from
utilitarian influence.” This is true, of course, of the artist Christo’s ”Running Fence,”
approved as an example of conceptual separability in Kieselstein-Cord.
810 CHAPTER 9. DESIGN
and others, completing the designs for the RIBBON Rack by the use
of a vacuum cleaner hose, and submi ing his drawings to a fabricator
complete with dimensions. The Brandir RIBBON Rack began being
nationally advertised and promoted for sale in September 1979.
Between September 1979 and August 1982 Brandir spent some
$38,500 for advertising and promoting the RIBBON Rack, including
some 85,000 pieces of promotional literature to architects and land-
Christo and Jeanne-Claude, Running scape architects. Additionally, since October 1982 Brandir has spent
Fence (1972–76) some $66,000, including full-, half-, and quarter-page advertisements
in architectural magazines such as Landscape Architecture, Progres-
sive Architecture, and Architectural Record, indeed winning an ad-
vertising award from Progressive Architecture in January 1983. The
RIBBON Rack has been featured in Popular Science, Art and Archi-
tecture, and Design 384 magazines, and it won an Industrial Design-
ers Society of America design award in the spring of 1980. In the
spring of 1984 the RIBBON Rack was selected from 200 designs to be
included among 77 of the designs exhibited at the Katonah Gallery
in an exhibition entitled ”The Product of Design: An Exploration of
the Industrial Design Process,” an exhibition that was wri en up in
the New York Times.
Sales of the RIBBON Rack from September 1979 through January
1985 were in excess of $1,367,000. Prior to the time Cascade Pacific
began offering for sale its bicycle rack in August 1982, Brandir’s sales
were $436,000. The price of the RIBBON Rack ranges from $395 up to
$2,025 for a stainless steel model and generally depends on the size
of the rack, one of the most popular being the RB-7, selling for $485.
In November 1982 Levine discovered that another company, Cas-
cade Pacific Lumber Co., was selling a similar product.
Applying Professor Denicola’s test to the RIBBON Rack, we find
that the rack is not copyrightable. It seems clear that the form of the
rack is influenced in significant measure by utilitarian concerns and
thus any aesthetic elements cannot be said to be conceptually sep-
arable from the utilitarian elements. This is true even though the
sculptures which inspired the RIBBON Rack may well have been –
the issue of originality aside – copyrightable.
Brandir argues correctly that a copyrighted work of art does not
lose its protected status merely because it subsequently is put to a
functional use. The Supreme Court so held in Mazer, and Congress
specifically intended to accept and codify Mazer in section 101 of the
Copyright Act of 1976.
Had Brandir merely adopted one of the existing sculptures as
a bicycle rack, neither the application to a utilitarian end nor com-
mercialization of that use would have caused the object to forfeit its
copyrighted status. Comparison of the RIBBON Rack with the earlier
sculptures, however, reveals that while the rack may have been de-
B. COPYRIGHT 811
rived in part from one of more ”works of art,” it is in its final form es-
sentially a product of industrial design. In creating the RIBBON Rack,
the designer has clearly adapted the original aesthetic elements to ac-
commodate and further a utilitarian purpose. These altered design
features of the RIBBON Rack, including the spacesaving, open de-
sign achieved by widening the upper loops to permit parking under
as well as over the rack’s curves, the straightened vertical elements
that allow in- and above-ground installation of the rack, the ability to
fit all types of bicycles and mopeds, and the heavy-gauged tubular
construction of rustproof galvanized steel, are all features that com-
bine to make for a safe, secure, and maintenance-free system of park-
ing bicycles and mopeds. Its undulating shape is said in Progressive
Architecture, January 1982, to permit double the storage of conven-
tional bicycle racks. Moreover, the rack is manufactured from 2 3/8-
inch standard steam pipe that is bent into form, the six-inch radius
of the bends evidently resulting from bending the pipe according to
a standard formula that yields bends having a radius equal to three
times the nominal internal diameter of the pipe.
Brandir argues that its RIBBON Rack can and should be character-
ized as a sculptural work of art within the minimalist art movement.
Minimalist sculpture’s most outstanding feature is said to be its clar-
ity and simplicity, in that it often takes the form of geometric shapes,
lines, and forms that are pure and free of ornamentation and void of
association. As Brandir’s expert put it, ”The meaning is to be found
in, within, around and outside the work of art, allowing the artistic
sensation to be experienced as well as intellectualized.” People who
use Foley Square in New York City see in the form of minimalist art
the ”Tilted Arc,” which is on the plaza at 26 Federal Plaza. Numerous
museums have had exhibitions of such art, and the school of minimal-
ist art has many admirers.
It is unnecessary to determine whether to the art world the RIB-
BON Rack properly would be considered an example of minimalist
sculpture. The result under the copyright statute is not changed. Us-
ing the test we have adopted, it is not enough that, to paraphrase
Judge Newman, the rack may stimulate in the mind of the reason-
able observer a concept separate from the bicycle rack concept. While Richard Serra, Tilted Arc (1981)
the RIBBON Rack may be worthy of admiration for its aesthetic qual- Tilted Arc was dismantled and removed
ities alone, it remains nonetheless the product of industrial design. in 1989, i.e., the year before VARA's
Form and function are inextricably intertwined in the rack, its ulti- moral right against destruction of a
work of recognized stature.
mate design being as much the result of utilitarian pressures as aes-
thetic choices. Indeed, the visually pleasing proportions and sym-
metricality of the rack represent design changes made in response to
functional concerns. Judging from the awards the rack has received,
it would seem in fact that Brandir has achieved with the RIBBON
Rack the highest goal of modern industrial design, that is, the harmo-
812 CHAPTER 9. DESIGN
nious fusion of function and aesthetics. Thus there remains no artistic
element of the RIBBON Rack that can be identified as separate and
”capable of existing independently, of, the utilitarian aspects of the
article.” Accordingly, we must affirm on the copyright claim
WINTER, Circuit Judge, concurring in part and dissenting in part:
The grounds of my disagreement are that: (1) my colleagues’
adaptation of Professor Denicola’s test diminishes the statutory con-
cept of ”conceptual separability” to the vanishing point; and (2) their
focus on the process or sequence followed by the particular designer
makes copyright protection depend upon largely fortuitous circum-
stances concerning the creation of the design in issue.
In my view, Carol Barnhart and Kieselstein-Cord are not reconcil-
able. Carol Barnhart paid only lip service to the fact that the ”concep-
tual separability” of an article’s aesthetic utilitarian aspects may ren-
der the design of a ”useful article” a copyrightable ”sculptural work.”
Actually, the Carol Barnhart majority applied a test of physical sepa-
rability. They thus stated:
What distinguishes [the Kieselstein-Cord] buckles from
the Barnhart forms is that the ornamented surfaces of the
buckles were not in any respect required by their utilitar-
ian functions; the artistic and aesthetic features could thus
be conceived of as having been added to, or superimposed
upon, an otherwise utilitarian article. The unique artistic
design was wholly unnecessary to performance of the util-
itarian function. In the case of the Barnhart forms, on the
other hand, the features claimed to be aesthetic or artis-
tic, e.g., the life-size configuration of the breasts and the
width of the shoulders are inextricably intertwined with
the utilitarian feature, the display of clothes.
In contrast, Kieselstein-Cord focused on the fact that the belt buckles
at issue could be perceived as objects other than belt buckles:
We see in appellant’s belt buckles conceptually separable
sculptural elements, as apparently have the buckles’ wear-
ers who have used them as ornamentation for parts of the
body other than the waist.
My colleagues’ adaptation of the Denicola test tracks the Carol Barn-
hart approach, whereas I would adopt that taken in Kieselstein-Cord,
which allows for the copyrightability of the aesthetic elements of use-
ful articles even if those elements simultaneously perform utilitar-
ian functions.1 The la er approach received its fullest elaboration in
1
Indeed, Kieselstein-Cord approved Professor Nimmer’s example of Christo’s
”Running Fence” as an object whose sculptural features were conceptually, but not
B. COPYRIGHT 813
Judge Newman’s dissent in Carol Barnhart, where he explained that
”for the artistic design features to be ‘conceptually separate’ from the
utilitarian aspects of the useful article that embodies the design, the
article must stimulate in the mind of the beholder a concept that is
separate from the concept evoked by its utilitarian function.”
In other words, the relevant question is whether the design of a
useful article, however intertwined with the article’s utilitarian as-
pects, causes an ordinary reasonable observer to perceive an aesthetic
concept not related to the article’s use. The answer to this question is
clear in the instant case because any reasonable observer would easily
view the Ribbon Rack as an ornamental sculpture.2 Indeed, there is
evidence of actual confusion over whether it is strictly ornamental in
the refusal of a building manager to accept delivery until assured by
the buyer that the Ribbon Rack was in fact a bicycle rack. Moreover,
Brandir has received a request to use the Ribbon Rack as environmen-
tal sculpture, and has offered testimony of art experts who claim that
the Ribbon Rack may be valued solely for its artistic features. As one
of those experts observed: ”If one were to place a Ribbon Rack on
an island without access, or in a park and surround the work with a
barrier, its status as a work of art would be beyond dispute.”
My colleagues also allow too much to turn upon the process or se-
quence of design followed by the designer of the Ribbon Rack. They
thus suggest that copyright protection would have been accorded
”had Brandir merely adopted as a bicycle rack” an enlarged version
of one of David Levine’s original sculptures rather than one that
had wider upper loops and straightened vertical elements. I cannot
agree that copyright protection for the Ribbon Rack turns on whether
Levine serendipitously chose the final design of the Ribbon Rack dur-
ing his initial sculptural musings or whether the original design had
to be slightly modified to accommodate bicycles.
Eames Chair Problem
This is the Eames Lounge Chair by Charles and Ray Eames. Is its
design copyrightable?
Copyright Act
(a) Subject to the provisions of subsections (b) and (c) of this sec-
tion, the exclusive right to reproduce a copyrighted pictorial,
Eames Lounge Chair
physically, separable from its utilitarian aspects. The fact that the Running Fence’s
aesthetic features were ”inextricably intertwined” with its functional aspects, how-
ever, creates doubt as to whether it is a copyrightable ”sculptural work” under
Carol Barnhart or the instant decision. 17 U.S.C. § 113
2 Scope of exclusive rights in pictorial,
The reasonable observer may be forgiven, however, if he or she does not rec-
ognize the Ribbon Rack as an example of minimalist art. graphic, and sculptural works
814 CHAPTER 9. DESIGN
graphic, or sculptural work in copies under section 106 includes
the right to reproduce the work in or on any kind of article,
whether useful or otherwise.
(b) This title does not afford, to the owner of copyright in a work
that portrays a useful article as such, any greater or lesser rights
with respect to the making, distribution, or display of the useful
article so portrayed than those afforded to such works under the
law, whether title 17 or the common law or statutes of a State, in
effect on December 31, 1977, as held applicable and construed
by a court in an action brought under this title.
(c) In the case of a work lawfully reproduced in useful articles that
have been offered for sale or other distribution to the public,
copyright does not include any right to prevent the making, dis-
tribution, or display of pictures or photographs of such articles
in connection with advertisements or commentaries related to
the distribution or display of such articles, or in connection with
news reports. …
Report of the Register of Copyrights on the General Revision of the
Copyright Law (1961)
§ II.C.1.c
There remains the question of protection to be given to a copyrighted
Relationship between copyright and work of art that is utilized as a design in the manufacture of useful
the designs of useful articles articles. We believe that, where the copyrighted work is used as a
design or decoration of a useful article, it should continue, as under
the present law, to be protected by copyright if the owner wishes.
However, where the ”work of art” actually portrays the useful article
as such – as in a drawing, scale model, advertising sketch, or photo-
graph of the article – existing court decisions indicate that copyright
in the ”work of art” does not protect against manufacture of the use-
ful article portrayed. We agree with these decisions and the distinc-
tions made in them.
Some examples will illustrate these points.
(3) Since the protection available to a copyrighted pictorial,
graphic, or sculptural work is not affected by use of the work as
a design or decoration of a useful article, the foilowing works
would continue to be accorded full protection under the copy-
The present § 113 may be inartfully right statute:
worded, but do you see how it adopts
– A copyrighted painting reproduced on textile fabrics;
the Register's recommendations?
– A copyrighted cartoon drawing or photograph repro-
duced on fabrics or in the form of toys or dolls;
– A copyrighted drawing of a chair reproduced on a lamp-
shade;
B. COPYRIGHT 815
– A copyrighted sculptured figure used as a lamp base.
(4) Under distinotions indicated in existing court decisions, that
the copyright in a work portraying a useful article as such
would not protect against manufacture of that article, copyright
protection would not extend to the following cases:
– A copyrighted drawing of a chair, used to manufacture
chairs of that design;
– A copyrighted scale model of an automobile, used to man-
ufacture automobiles of that design;
– A copyrighted technical drawing showing the construc-
tion of a machine, used to manufacture the machine;
– A copyrighted picture of a dress, used to manufacture the
dress.
Model Car Problem
You represent Schafer Software, creator of the hit Out of Control series Loosely based on Meshwerks, Inc. v. Toy-
of racing video games. Sterling normally pays car companies licens- ota Motor Sales USA, Inc., 528 F.3d 1258
(10th Cir. 2008)
ing fees to include their cars in the Out of Control games as part of the
licensing agreement. Negotiations with Corley Motors have broken
down over Corley’s excessive licensing fee demands for its Corley
Polecat – ten times higher than any other company is demanding per
vehicle.
Marketing is desparate to include the Polecat in Out of Control
2017 and has asked the development team to think of ways to include
the Polecat without Corley’s cooperation. They have suggested two
ways of doing so. First, they could rent a Polecat and scan it with
a high-resolution laser scanner that would generate an extremely de-
tailed three-dimensional model. Second, it appears that digital copies
of Corley’s engineering diagrams for the Polecat have leaked onto
car-enthusiast websites, where they have been available for months
(with Corley’s tacit acquiescence, it appears). The diagrams contain
extremely detailed specifications for every part in the Polecat, as well
as renderings showing a fully assembled Polecat from numerous an-
gles. The developers believe that although both approaches would
require significant work by Corley’s 3D modeling artists, either ap-
proach would work for generating the files they would need to put
the Polecat in Out of Control 2017.
Should Schafer proceed, and if so, how?
2 Architecture
Initially, the 1976 Copyright Act treated buildings as useful articles.
3D car model
The 1990 Architectural Works Copyright Protection Act changed that,
adding ”architectural works” to the list of types of copyrightable sub-
816 CHAPTER 9. DESIGN
ject ma er in § 102(a) and adding a few special rules for them. The
AWCPA is purely prospective; it applies only to architectural works
created on or after December 1, 1990.
Kevin Emerson Collins
(unpublished draft 2015)
Economically Defeasible Rights to Facilitate Information Disclosure: The
Hidden Wisdom of Pre-AWCPA Copyright
Architects were not entitled to rights on par with the rights to which
other creative professionals were entitled. Most importantly, archi-
tectural drawings and buildings received different treatment: the
former were protected but the la er were not. Pre- AWCPA copy-
right recognized architectural drawings as copyrightable subject mat-
ter. Duplicating the original expression embodied in a drawing in
copy that is also a drawing violated pre-AWCPA copyright if per-
formed without authorization. However, pre-AWCPA copyright did
not protect original expression when that expression was embodied
in a constructed building. Copying a constructed building did not
constitute infringement before the AWCPA, even if the building was
constructed from copyrighted drawings and regardless of whether
the copy took the form of a drawing or a building. Constructed build-
ings were simply not copyrightable subject ma er, so they could be
freely copied. One architect was free to make “measured drawings”
of an original building constructed by another architect and use those
drawings to construct a copy of the building, even when the drawings
that were used to build the original building were copyrighted. In
other words, copying original expression from a constructed build-
ing was permi ed even though copying the exact same original ex-
pression from a drawing was not.
The doctrinal reasoning that supported the unprotectability of
constructed buildings has been viewed by some as suspect, but this
limit on pre-AWCPA copyright was never seriously challenged. Con-
structed buildings were classified as useful articles, so, in theory, they
could have been protected insofar as they had aesthetic aspects that
were conceptually separable from their utilitarian aspects. However,
apart from sculptures like gargoyles that were a ached to architec-
tural works, the aesthetic features of constructed buildings never
came to be viewed as separable from the buildings’ functional fea-
tures, so copyright protection never protected the architectural de-
signs embodied in constructed buildings. Even a highly original
building like Frank Lloyd Wright’s Guggenheim Museum was not
protectable at all under pre-AWCPA because the building’s original-
Frank Lloyd Wright, Guggenheim Mu- ity was not embodied in add-on ornamentation.
seum
Pre-AWCPA copyright also disprivileged constructed buildings
in another way. Although architectural drawings were copyrightable
subject ma er, constructing the building depicted in an architectural
B. COPYRIGHT 817
drawing was not actionable because it was not considered to involve
the creation of a derivative work.
Copyright Act
(a) Pictorial Representations Permi ed. – The copyright in an archi- 17 U.S.C. § 120
Scope of exclusive rights in architec-
tectural work that has been constructed does not include the
tural works
right to prevent the making, distributing, or public display of
pictures, paintings, photographs, or other pictorial representa-
tions of the work, if the building in which the work is embodied 17 U.S.C. § 101
is located in or ordinarily visible from a public place. Definitions
(b) Alterations to and Destruction of Buildings. – Notwithstanding
the provisions of section 106(2), the owners of a building em- 37 C.F.R. § 202.11
bodying an architectural work may, without the consent of the Architectural works
author or copyright owner of the architectural work, make or
authorize the making of alterations to such building, and de-
stroy or authorize the destruction of such building.
An “architectural work” is the design of a building as embodied in
any tangible medium of expression, including a building, architec-
tural plans, or drawings. The work includes the overall form as well
as the arrangement and composition of spaces and elements in the
design, but does not include individual standard features.
Code of Federal Regulations
(b) Definitions. –
(2) The term building means humanly habitable structures
that are intended to be both permanent and stationary,
such as houses and office buildings, and other permanent
and stationary structures designed for human occupancy, Is the Statue of Liberty an architectural
work?
including but not limited to churches, museums, gazebos,
and garden pavilions. 554 F.3d 914 (11th Cir. 2008)
(d) Works excluded. – The following structures, features, or works
cannot be registered:
(1) Structures other than buildings. – Structures other than
buildings, such as bridges, cloverleafs, dams, walkways,
tents, recreational vehicles, mobile homes, and boats.
Intervest Construction., Inc. v. Canterbury Estate Homes
The definition of an architectural work closely parallels that of a
”compilation” under the statute. Accordingly, any similarity compar-
ison of the works at issue here must be accomplished at the level of
protected expression – that is, the arrangement and coordination of Plaintiff's plan
818 CHAPTER 9. DESIGN
those common elements (”selected” by the market place, i.e., rooms,
windows, doors, and ”other staple building components”). In under-
taking such a comparison it should be recalled that the copyright pro-
tection in a compilation is ”thin.” Feist Thus, when viewed through
the narrow lens of compilation analysis only the original, and thus
protected arrangement and coordination of spaces, elements and
other staple building components should be compared.
Given that the plans at issue were protected by compilation copy-
rights which were ”thin,” the district court correctly determined that
the differences in the protectable expression were so significant that,
as a ma er of law, no reasonable properly-instructed jury of lay ob-
Defendant's plan
servers could find the works substantially similar. Accordingly, the
district court did not err in granting summary judgment to the ap-
pellee, the putative infringer.
Zalewski v. Cicero Builder Dev., Inc.
754 F.3d 95 (2d Cir. 2014)
What aspects of Zalewski’s designs are protectable? A fundamental
rule of copyright law is that it protects only “original works of author-
ship,” those aspects of the work that originate with the author himself.
Everything else in the work, the history it describes, the facts it men-
tions, and the ideas it embraces, are in the public domain free for oth-
ers to draw upon. It is the peculiar expressions of that history, those
facts, and those ideas that belong exclusively to their author. Thus,
any author may draw from the history of English-speaking peoples,
but no one may copy from A History of the English–Speaking Peoples.
Any artist may portray the Spanish Civil War, but no one may paint
another Guernica. And anyone may draw a cartoon mouse, but there
can be only one Mickey.
While we agree with the outcome in Intervest, we disagree with
its reasoning. Every kind of work at some level is a compilation, an
arrangement of uncopyrightable “common elements.” No individ-
ual word is copyrightable, but the arrangement of words into a book
is. No color is copyrightable, but the arrangement of colors on canvas
is. Likewise, doors and walls are not copyrightable, but their arrange-
ment in a building is. Some architectural designs, like that of a single-
room log cabin, will consist solely of standard features arranged in
standard ways; others, like the Guggenheim, will include standard
features, but also present something entirely new. Architecture, in
this regard, is like every art form.
Labeling architecture a compilation obscures the real issue. Ev-
ery work of art will have some standard elements, which taken in
isolation are un-copyrightable, but many works will have original
elements—or original arrangements of elements. The challenge in
adjudicating copyright cases is not to determine whether a work is a
creative work, a derivative work, or a compilation, but to determine
B. COPYRIGHT 819
what in it originated with the author and what did not. Intervest fails
to do this. It compares the floor plans of the two houses, “focusing
only on the narrow arrangement and coordination” of what it deems
“standard ... features” and intuits that there was no copying of the ar-
rangement. But it fails to provide any analysis of what made a feature
“standard” and unprotectable. Hence, we find it of li le assistance
here.
Courts should treat architectural copyrights no differently than
other copyrights. This is what Congress envisioned, and it is an ap-
proach we have employed before. In A ia v. Society of the New York Attia: 201 F.3d 50 (2d Cir. 1999)
Hospital, for example, the plaintiff had been retained by New York
Hospital to design an expansion of its facility over FDR Drive. The
hospital rejected his preliminary sketches, but ultimately went with a
similar design by another firm. The plaintiff admi ed that his draw-
ings were “preliminary and generalized” “outlines” of “concepts.”
Although there were some similarities between the plaintiff’s and the
defendant’s designs, there were also significant differences. Thus, we
held that any copying went to unprotected ideas, “concepts,” rather
than concrete expression.
In Peter F. Gaito Architecture, LLC v. Simone Development Corp., on
a similar set of facts, we held that copying of “architecture that was
light, airy, and transparent,” as well as design parameters and “gen-
eralized notions of where to place functional elements,” went only
to ideas and not protected expression. Finally, in Sparaco v. Lawler,
Matusky, Skelly, Engineers LLP, we held that although a construction
Plaintff's sketch in Attia
site preparation plan was preliminary in the sense that it pertained to
the early phases of construction, it was extremely detailed and thus Gaito Architecture: 602 F.3d 57 (2d Cir.
2010)
more than a mere idea.
Sparaco: 303 F.3d 460 (2d Cir. 2002)
Efficiency is an important architectural concern. Any design ele-
ments a ributable to building codes, topography, structures that al-
ready exist on the construction site, or engineering necessity should
therefore get no protection.
There are scènes-à-faire in architecture. Neoclassical government
buildings, colonial houses, and modern high-rise office buildings are
all recognized styles from which architects draw. Elements taken
from these styles should get no protection. Likewise, there are cer-
tain market expectations for homes or commercial buildings. Design
features used by all architects, because of consumer demand, also get
no protection.
Our prior architecture cases support this approach. In Sparaco,
we held that there can be no copyright in a plan insofar as it merely
represents the topography of a building site. Topography is an un-
copyrightable “fact.” In A ia we recognized that “generalized no-
tions of where to place functional elements, how to route the flow of
traffic, and methods of construction” are un-protectable. Architects
820 CHAPTER 9. DESIGN
cannot claim that good engineering is original to them—or at least
can get no copyright protection for it. Finally, in Gaito Architecture,
we held that there is no copyright in a building plan’s design param-
eters. Constraints placed on an architect by the way her client plans
to use the building do not originate with the architect.
After considering these principles and reviewing the designs in
question, we conclude that even if Defendants copied Zalewski’s
plans, they copied only the unprotected elements of his designs.
Plaintiff’s principal argument is that Defendants’ designs are so close
to his that Defendants must have infringed. He is correct that the
designs are, in many respects, quite close, but this is not enough. It
proves at most copying, not wrongful copying.
First, many of the similarities are a function of consumer expecta-
tions and standard house design generally. Plaintiff can get no credit
for pu ing a closet in every bedroom, a fireplace in the middle of
an exterior wall, and kitchen counters against the kitchen walls. Fur-
thermore, the overall footprint of the house and the size of the rooms
One of Zalewski's colonial designs are “design parameters” dictated by consumer preferences and the
lot the house will occupy, not the architect.
Finally, most of the similarities between Plaintiff’s and Defen-
dants’ designs are features of all colonial homes, or houses generally.
So long as Plaintiff was seeking to design a colonial house, he was
bound to certain conventions. He cannot claim copyright in those
conventions. Great artists often express themselves through the vo-
cabulary of existing forms. Shakespeare wrote his Sonnets; Brahms
composed his Hungarian Dances; and Plaintiff designed his colonial
houses. Because we must preserve these forms for future artists, nei-
ther iambic pentameter, nor European folk motifs, nor clapboard sid-
ing are copyrightable.
Plaintiff makes no a empt to distinguish those aspects of his de-
signs that were original to him from those dictated by the form in
which he worked. For example, Zalewski claims that the “front
porches are the same design, size, and in the same location.” But
a door centered on the front of the house is typical of many homes,
and colonials in particular. Moreover, there are subtle differences in
the paneling, size, and framing of Plaintiff’s and Defendants’ doors.
These differences are not great, but given the constraints of a colonial
design, they are significant. The same is true of the windows and
garage doors that Plaintiff claims are identical. They are quite simi-
lar in location, size, and general design, but again, the similarities are
due primarily to the shared colonial archetype. The window panes,
shu ers, and garage-door paneling all have subtle differences. Like-
wise, the designs’ shared footprint and general layout are in keep-
ing with the colonial style. There are only so many ways to arrange
four bedrooms upstairs and a kitchen, dining room, living room, and
B. COPYRIGHT 821
study downstairs. Beyond these similarities, Plaintiff’s and Defen-
dants’ layouts are different in many ways. The exact placement and
sizes of doors, closets, and countertops often differ as do the arrange-
ments of rooms.
Although he undoubtedly spent many hours on his designs, and
although there is certainly something of Plaintiff’s own expression
in his work, as long as Plaintiff adhered to a pre-existing style his
original contribution was slight—his copyright very thin. Only very
close copying would have taken whatever actually belonged to Plain-
tiff. Copying that is not so close would—and in this case did—only
capture the generalities of the style in which Plaintiff worked and el-
ements common to all homes. Defendants’ houses shared Plaintiff’s
general style, but took nothing from his original expression.
Embassy Problem
Here are sketches front and side elevations of plaintiff’s and defen- Based on Sturdza v. United Arab Emi-
dant’s designs for a proposed embassy. If the defendant had access rates, 281 F.3d 1287 (D.C. Cir. 2002)
to the plaintiff’s plans, are the similarities strong enough that a jury
could find infringement? Are they so strong that a jury must find
infringement?
3 Moral Rights
VARA excludes from its coverage works of ”applied art.” Query how
this standard differs from the tests applicable to the scope of copy-
right in a ”useful article” or an ”architectural work.”
Cheffins v. Stewart
825 F.3d 588 (9th Cir. 2016)
We must decide whether the Visual Artists Rights Act applies to a
used school bus transformed into a mobile replica of a 16th-century
822 CHAPTER 9. DESIGN
Spanish galleon.
Plaintiffs Simon Cheffins and Gregory Jones, along with a number
of volunteers, built the La Contesssa, a replica of a 16th-century Span-
ish galleon for use at the Burning Man Festival.1 Cheffins began his
creation by acquiring a used school bus. He and Jones then designed
and constructed the galleon facade, including a hull, decking, masts,
and a handcrafted figurehead. These elements and the bus were then
transported to the Black Rock Desert in northern Nevada, the site of
Burning Man, and assembled. When completed, the La Contesssa was
approximately sixty feet wide and sixteen feet long with a mast over
La Contessa
fifty feet tall.
The La Contesssa first appeared at the Festival in 2002. Festival
participants took rides on the La Contesssa, and at least two weddings
were performed on its deck. It reappeared in 2003 and 2005. In 2003,
it was used as part of a marching band performance, and, in 2005, it
was the centerpiece of a children’s treasure hunt, among other things.
After the 2003 and 2005 Festivals, Cheffins and Jones stored the La
Contesssa on land in Nevada held in life estate by one Joan Grant, who
had given them permission to do so. In late 2005, however, Grant’s
home burned down, causing her to abandon the life estate. There-
after, defendant Michael Stewart took possession of the land in fee
simple through a limited liability company.
Cheffins and Jones did not relocate the La Contesssa after the
change of property ownership. Rather, it sat unmoved on Stewart’s
land until December 2006. Sometime during that month, Stewart in-
tentionally burned the wooden structure of the La Contesssa so that a
scrap metal dealer could remove the underlying school bus from his
property.
As the text of the statute shows, the VARA only applies to ”works
of visual art.” On summary judgment, Stewart asserted, and the trial
court subsequently concluded, that the La Contesssa was not a ”work
of visual art” because it was ”applied art.”
The VARA does not define the term ”applied art,” and federal
Helmsley-Spear: 71 F.3d 77 (2d Cir. courts have rarely had occasion to interpret its meaning. In Carter
1995) v. Helmsley-Spear, Inc., the Second Circuit held that a sculpture con-
structed of portions of a school bus and affixed to a wall in a build-
ing lobby was not ”applied art.” It explained that the term ”applied
art” means ”two-and threedimensional ornamentation or decoration
that is affixed to otherwise utilitarian objects.” The court further ex-
plained that the sculpture was not ”applied art” simply because it
was affixed to ”the lobby’s floor, walls, and ceiling” because ”inter-
preting applied art to include such works would render meaningless
1
Installation by Jx3 from Helmsley-Spear Burning Man is an art and countercultural festival held each year for the week
preceding Labor Day.
B. COPYRIGHT 823
VARA’s protection for works of visual art installed in buildings.”
The Second Circuit provided an additional gloss on what consti-
tutes a ”work of visual art,” and by extension what constitutes ”ap-
plied art,” in Pollara v. Seymour, where it explained that the ”VARA Pollara: 344 F.3d 265, 269 (2d Cir. 2003)
may protect a sculpture that looks like a piece of furniture, but it does
not protect a piece of utilitarian furniture, whether or not it could
arguably be called a sculpture.” The court went on to hold that an
elaborate painted banner was not a ”work of visual art” eligible for
protection under the VARA.
We agree in large part with the Second Circuit’s analysis. As
the Second Circuit suggested, the focus of our inquiry should be on
whether the object in question originally was – and continues to be
– utilitarian in nature. Dictionary definitions suggest that, in its or-
dinary meaning, applied art consists of an object with a utilitarian
function that also has some artistic or aesthetic merit.
Further, this approach makes sense in the statutory context in
which ”applied art” is used in 17 U.S.C. § 101. ”Applied art” is enu-
merated in a list that also contains, inter alia, maps, globes, charts,
technical drawings, diagrams, models, newspapers, periodicals, data Banner by Joanne Pollara
bases, and electronic information services. The fact that the other
items in the list are utilitarian objects leads us to conclude that the
listed items are related by their practical purposes and utilitarian
functions, requiring a focus on utility when construing the term ”ap-
plied art.”
We therefore hold that an object constitutes a piece of ”applied
art” – as opposed to a ”work of visual art” – where the object ini-
tially served a utilitarian function and the object continues to serve
such a function after the artist made embellishments or alterations
to it.6 This test embraces the circumstances both where a functional
object incorporates a decorative design in its initial formulation, and
where a functional object is decorated after manufacture but contin-
ues to serve a practical purpose. Conversely, ”applied art” would
not include a piece of art whose function is purely aesthetic or a utili-
tarian object which is so transformed through the addition of artistic
elements that its utilitarian functions cease.
We respond briefly to the concern expressed in the concurrence
that the standard we adopt today may not be workable – that it raises
difficult questions regarding where exactly the line defining ”applied
art” will be drawn. The analysis we adopt today directs the court’s
a ention away from assessments of an object’s artistic merit and in-
6
With recognition that nearly every object on which art is installed will be in
some sense ”utilitarian,” we caution that the utilitarian function must be something
other than mere display of the work in question. See also 17 U.S.C. § 101 (”A ‘useful
article’ is an article having an intrinsic utilitarian function that is not merely to
portray the appearance of the article or to convey information.”).
824 CHAPTER 9. DESIGN
stead toward the object’s practical utility.
We now apply this standard to the facts of this case.
The La Contesssa began as a simple school bus – an object which
unquestionably served the utilitarian function of transportation. To
transform the bus into the La Contesssa, Cheffins and Jones adorned
it with the visual trappings of a 16th-century Spanish galleon. While
the La Contesssa’s elaborate decorative elements may have had many
artistic qualities, the La Contesssa retained a largely practical function
even after it had been completed. At Burning Man, the La Contesssa
was used for transportation, providing rides to festival-goers, hosting
musical performances and weddings, and serving as a stage for po-
etry and acrobatics shows. Indeed, the La Contesssa often was driven
about the Festival grounds and was banned from the Festival in 2004
because ”its unsafe driving practices far exceeded community toler-
ance and out-weighed the visual contribution” it made.
Under the definition we adopt today, the La Contesssa plainly was
”applied art.” It began as a rudimentary utilitarian object, and despite
being visually transformed through elaborate artistry, it continued to
serve a significant utilitarian function upon its completion. As ”ap-
plied art,” the La Contesssa was not a work of visual art under the
VARA and therefore not eligible for its protection. Therefore, the trial
court properly granted summary judgment to Stewart on Cheffins
and Jones’s VARA claim.
McKeown, Circuit Judge, concurring:
To be er effectuate the purpose of VARA, we need a more nu-
anced definition of ”applied art” that balances between the risk of un-
duly restricting VARA’s reach and the risks of turning judges into art
critics or consigning to litigation every work of art that includes some
utilitarian function. In determining whether a work is ”applied art,”
the right question to ask is whether the primary purpose of the work
as a whole is to serve a practical, useful function, and whether the aes-
thetic elements are subservient to that utilitarian purpose.Because the
bus/Spanish galleon La Contesssa is applied art under either standard,
I concur in the judgment.
Although many court decisions have addressed applied art, these
cases provide li le guidance on how to distinguish applied from vi-
sual art. The issue in nearly all applied art cases is whether the work
was copyrightable applied art or instead a noncopyrightable work of
”industrial design.”
The analysis in these cases is driven by the principle that works
may unquestionably be applied art, such as a detailed carving on the
back of a chair – an obviously utilitarian object – but may also en-
joy certain copyright protection.4 Whether such a work falls under
4
Indeed, examples of original ”pictoral, graphic, and sculptural works” pro-
B. COPYRIGHT 825
VARA’s protections is a different question. Thus, while these opin-
ions have coalesced around a definition of applied art for the purpose
of copyright protection as pictorial, graphic, and sculptural works
that are intended to be or have been embodied in useful articles, they
do not provide an answer under VARA because VARA protects a new
and different genus of ”works of visual art.”
VARA’s protections cannot be limited only to works entirely de-
void of any utilitarian purpose. Many outstanding sculptures, includ-
Caryatid Porch of the Erechtheum
ing the Caryatids of the Acropolis and the monumental carvings of
Ramses at the temple of Karnak are in fact columns that provided
buildings with structural integrity. Medieval tapestries not only rep-
resented a form of fine art, but also kept castles and cathedrals free
from drafts. Of course, the famous Bayeux tapestries, which depict
events leading to the Ba le of Hastings, retain their utilitarian func-
tion to some extent: they could still be used to keep a drafty castle
warm. Likewise, Tracy Emin’s My Bed, displayed at the Tate Britain,
incorporates Emin’s real bed as a ”monument to the heartache of a
Portion of the Bayeux tapestry
relationship breakdown.” The bed arguably retains its original utili-
tarian function – it remains a bed, and could still be slept in – but it is
no longer meant or used for this utilitarian purpose. Rather, like the
Bayeux tapestries, My Bed is now appreciated and viewed as a work
of creative expression and, when viewed as a whole, the utilitarian
object has become part of a visual art piece.
The modern era abounds with examples of fine art that serve
some utility. Perhaps the most famous sculpture of the modern era
– Rodin’s The Thinker – was conceived when the artist was designing
a set of monumental doors titled The Gates of Hell. Doors, of course, Tracy Emin, My Bed (1998)
are utilitarian objects that facilitate the movement of people into and
out of buildings. Likewise, a young Pablo Picasso painted a massive
background piece for the ballet Le Tricorne. Although that painting
surely served some utilitarian purpose as a stage curtain, following
that debut, it has been displayed as a painting for half a century. The
painting was the focus of intense debate when it was removed last
year from the Four Seasons restaurant in New York’s Seagram Build-
ing, where it had hung since 1959. Some sculptures designed by Dale
Chihuly are fantastically artistic and original and yet could also serve
a utilitarian purpose of diffusing fresh water or serving as a room di-
vider. The artistic and utilitarian aspects are entwined in some of
Chihuly’s pieces.
It is easy to imagine a sculpture composed of an array of utilitar-
ian objects. Indeed, a Florida plumber/artist who created a sculpture
with auto parts, plumbing fixtures and scrap wiring, found himself in
tected by copyright include dolls and toys, mosaics, and stained glass designs.
Auguste Rodin, The Gates of Hell (1880–
1917)
826 CHAPTER 9. DESIGN
the middle of VARA litigation when the ”junk” was removed.9 Auto-
matically relegating these pieces – which are unquestionably works
of visual art – beyond the scope of VARA simply because they may
serve some practical function would undermine the purpose of the
law.
To effect the purpose of VARA and provide guidance for the art
community, I believe courts should evaluate the work as a whole, ask-
ing whether its primary purpose is to serve a useful function and
whether the artistic creation is subservient to that purpose. If the
primary purpose is for the work to be viewed and perceived as art,
then any incidental utilitarian function will not push it outside the
Pablo Picasso, Stage Curtain for the Bal- scope of VARA. If a work’s primary purpose is functional, however,
let "Le Tricorne" (1919) no amount of aesthetic appeal will transfer it into visual art subject to
VARA’s protections. Determining a work’s primary purpose need
not constitute a judicial inquiry into the nature of art. Rather, as
in other legal contexts, courts should ask whether ”a reasonable ob-
server” would ”consider [the work] designed to a practical degree”
for a utilitarian or artistic purpose.
In this case, applying the analysis I outline yields the same result
as the majority: La Contesssa was applied art. The school bus-turned-
galleon was designed for, and employed as, a performance venue,
restaurant, and means of transportation around the Burning Man fes-
tival. Poets, acrobats, and bands performed on its decks. It drove
revelers from party to party within Nevada’s Black Rock desert. On
various occasions, the galleon was driven at high speeds, prompting
Dale Chihuly, The Sun
festival organizers to send Cheffins and Jones a le er condemning its
”unsafe driving practices.” When La Contesssa was not serving this
purpose, it was dragged to a field, covered with a tarp, and left to
sit idle for months at a time. Taken as a whole, this is powerful evi-
dence that the primary purpose of La Contesssa was to serve the utili-
tarian functions of performance venue, gathering space, and people-
mover. Although Cheffins and Jones testified passionately about La
Contesssa’s beauty and the artistic expression they felt it embodied –
and it is an impressive work of art in many respects – I conclude it is
applied art because its aesthetic appeal was subservient to its primary
utilitarian purpose. Thus, the VARA claim fails.
C Trademark
Trademark protects designs under the general heading of trade dress,
using the same general distinctiveness analysis as it does for word
9
The story of this fascinating dispute is outlined in Christopher J. Robinson’s
note The ”Recognized Stature” Standard in the Visual Artists Rights Act, 68 Fordham
L. Rev. 1935 (2000). The parties did not contest that the work was a sculpture, but
fought bi erly over whether the visual art was of ”recognized stature.”
C. TRADEMARK 827
marks and logos. But two very important limiting doctrines apply.
One is that product design is effectively always at most descriptive:
it can have acquired distinctiveness (via secondary meaning) but not
inherent distinctiveness. The other is that functional aspects of a de-
sign are never protectable, even if they have secondary meaning.
Wal-Mart Stores, Inc. v. Samara Brothers, Inc.
529 U.S. 205 (2000)
In this case, we decide under what circumstances a product’s design
(Scalia, J.)
is distinctive, and therefore protectible, in an action for infringement
of unregistered trade dress under § 43(a) of the Lanham Act.
Respondent Samara Brothers, Inc., designs and manufactures chil-
dren’s clothing. Its primary product is a line of spring/summer one-
piece seersucker outfits decorated with appliques of hearts, flowers,
fruits, and the like. A number of chain stores, including JCPenney,
sell this line of clothing under contract with Samara.
In 1995, Wal-Mart contracted with one of its suppliers, Judy-
Philippine, Inc., to manufacture a line of children’s outfits for sale in
the 1996 spring/summer season. Wal-Mart sent Judy-Philippine pho-
tographs of a number of garments from Samara’s line, on which Judy-
Philippine’s garments were to be based; Judy-Philippine duly copied,
with only minor modifications, 16 of Samara’s garments, many of
which contained copyrighted elements. In 1996, Wal-Mart briskly
sold the so-called knockoffs, generating more than $1.15 million in
gross profits.
The breadth of the definition of marks registrable under § 2, and
of the confusion-producing elements recited as actionable by § 43(a), Samara Brothers dress
has been held to embrace not just word marks, such as “Nike,” and
symbol marks, such as Nike’s “swoosh” symbol, but also “trade
dress” – a category that originally included only the packaging, or
“dressing,” of a product, but in recent years has been expanded
by many Courts of Appeals to encompass the design of a product.
[Cases cited protected the designs of bedroom furniture, sweaters,
and notebooks.] These courts have assumed, often without discus-
sion, that trade dress constitutes a “symbol” or “device” for purposes
of the relevant sections, and we conclude likewise.
The text of § 43(a) provides li le guidance as to the circumstances
under which unregistered trade dress may be protected. Nothing in §
43(a) explicitly requires a producer to show that its trade dress is dis-
tinctive, but courts have universally imposed that requirement, since
without distinctiveness the trade dress would not “cause confusion
... as to the origin, sponsorship, or approval of [the] goods,” as the
section requires.
In evaluating the distinctiveness of a mark under § 2 (and there-
fore, by analogy, under § 43(a)), courts have held that a mark can
be distinctive in one of two ways. First, a mark is inherently distinc-
828 CHAPTER 9. DESIGN
tive if its intrinsic nature serves to identify a particular source. In the
context of word marks, courts have applied the now-classic test orig-
inally formulated by Judge Friendly, in which word marks that are
“arbitrary” (“Camel” cigare es), “fanciful” (“Kodak” film), or “sug-
gestive” (“Tide” laundry detergent) are held to be inherently distinc-
tive. See Abercrombie & Fitch. Second, a mark has acquired distinc-
tiveness, even if it is not inherently distinctive, if it has developed
secondary meaning, which occurs when, in the minds of the public,
the primary significance of a mark is to identify the source of the prod-
uct rather than the product itself.
The judicial differentiation between marks that are inherently dis-
tinctive and those that have developed secondary meaning has solid
foundation in the statute itself. Nothing in § 2, however, demands
the conclusion that every category of mark necessarily includes some
marks “by which the goods of the applicant may be distinguished
from the goods of others” without secondary meaning – that in every
category some marks are inherently distinctive.
Indeed, with respect to at least one category of mark – colors – we
Qualitex: 514 U.S. 159 (1995) have held that no mark can ever be inherently distinctive. In Qualitex
Co. v. Jacobson Products Co., petitioner manufactured and sold green-
gold dry-cleaning press pads. After respondent began selling pads
of a similar color, petitioner brought suit under § 43(a), then added a
claim under § 32 after obtaining registration for the color of its pads.
We held that a color could be protected as a trademark, but only upon
a showing of secondary meaning. Reasoning by analogy to the Aber-
crombie & Fitch test developed for word marks, we noted that a prod-
Qualitex dry-cleaning pad
uct’s color is unlike a “fanciful,” “arbitrary,” or “suggestive” mark,
since it does not “almost automatically tell a customer that it refers
to a brand,” and does not “immediately signal a brand or a product
source.” However, we noted that, “over time, customers may come
to treat a particular color on a product or its packaging ... as signify-
ing a brand.” Because a color, like a “descriptive” word mark, could
eventually “come to indicate a product’s origin,” we concluded that
it could be protected upon a showing of secondary meaning.
It seems to us that design, like color, is not inherently distinc-
tive. The a ribution of inherent distinctiveness to certain categories
of word marks and product packaging derives from the fact that the
very purpose of a aching a particular word to a product, or encas-
ing it in a distinctive packaging, is most often to identify the source
of the product. Although the words and packaging can serve sub-
sidiary functions – a suggestive word mark (such as “Tide” for laun-
dry detergent), for instance, may invoke positive connotations in the
consumer’s mind, and a garish form of packaging (such as Tide’s
squat, brightly decorated plastic bo les for its liquid laundry deter-
Tide bottle gent) may a ract an otherwise indifferent consumer’s a ention on
C. TRADEMARK 829
a crowded store shelf – their predominant function remains source
identification. Consumers are therefore predisposed to regard those
symbols as indication of the producer, which is why such symbols
almost automatically tell a customer that they refer to a brand, and
immediately signal a brand or a product source. And where it is
not reasonable to assume consumer predisposition to take an affixed
word or packaging as indication of source – where, for example, the
affixed word is descriptive of the product (“Tasty” bread) or of a ge-
ographic origin (“Georgia” peaches) – inherent distinctiveness will
not be found. That is why the statute generally excludes, from those
word marks that can be registered as inherently distinctive, words
that are “merely descriptive” of the goods or “primarily geograph-
ically descriptive of them. In the case of product design, as in the
case of color, we think consumer predisposition to equate the feature
with the source does not exist. Consumers are aware of the reality
that, almost invariably, even the most unusual of product designs –
such as a cocktail shaker shaped like a penguin – is intended not to
identify the source, but to render the product itself more useful or
more appealing.
The fact that product design almost invariably serves purposes
other than source identification not only renders inherent distinc-
tiveness problematic; it also renders application of an inherent-
distinctiveness principle more harmful to other consumer interests.
Consumers should not be deprived of the benefits of competition
with regard to the utilitarian and esthetic purposes that product de-
sign ordinarily serves by a rule of law that facilitates plausible threats
of suit against new entrants based upon alleged inherent distinctive-
ness.
Respondent contends that our decision in Two Pesos, Inc. v. Taco
Cabana, Inc. forecloses a conclusion that product-design trade dress
can never be inherently distinctive. In that case, we held that the trade Penguin-shaped cocktail shaker
dress of a chain of Mexican restaurants, which the plaintiff described Two Pesos: 505 U.S. 763 (1992)
as “a festive eating atmosphere having interior dining and patio areas
decorated with artifacts, bright colors, paintings and murals,” could
be protected under § 43(a) without a showing of secondary mean-
ing. Two Pesos unquestionably establishes the legal principle that
trade dress can be inherently distinctive, but it does not establish that
product-design trade dress can be. Two Pesos is inapposite to our hold-
ing here because the trade dress at issue, the decor of a restaurant,
seems to us not to constitute product design. It was either product Taco Cabana exterior
packaging – which, as we have discussed, normally is taken by the
consumer to indicate origin – or else some tertium quid that is akin to
product packaging and has no bearing on the present case.
Respondent replies that this manner of distinguishing Two Pesos
will force courts to draw difficult lines between product-design and
830 CHAPTER 9. DESIGN
product-packaging trade dress. There will indeed be some hard cases
at the margin: a classic glass Coca-Cola bo le, for instance, may con-
stitute packaging for those consumers who drink the Coke and then
discard the bo le, but may constitute the product itself for those con-
sumers who are bo le collectors, or part of the product itself for those
consumers who buy Coke in the classic glass bo le, rather than a
can, because they think it more stylish to drink from the former. We
believe, however, that the frequency and the difficulty of having to
distinguish between product design and product packaging will be
much less than the frequency and the difficulty of having to decide
when a product design is inherently distinctive. To the extent there
are close cases, we believe that courts should err on the side of caution
Earl Dean's Coca-Cola bottle design and classify ambiguous trade dress as product design, thereby requir-
ing secondary meaning. The very closeness will suggest the existence
of relatively small utility in adopting an inherent-distinctiveness prin-
ciple, and relatively great consumer benefit in requiring a demonstra-
tion of secondary meaning.
We hold that, in an action for infringement of unregistered trade
dress under § 43(a) of the Lanham Act, a product’s design is distinc-
tive, and therefore protectible, only upon a showing of secondary
meaning.
Lanham Act
15 U.S.C. § 1052 [Lanham Act § 2]
Trademarks registrable on principal No trademark … shall be refused registration on the principal register
register … on account of its nature unless it—
(e) Consists of a mark which … (5) comprises any ma er that, as a
15 U.S.C. § 1125 [Lanham Act § 43]
whole, is functional.
False designations of origin, false de-
scriptions, and dilution forbidden (a) Civil Action
532 U.S. 23 (2001) (3) In a civil action for trade dress infringement under this
No. 3,646,696 and No. 3,662,482 chapter for trade dress not registered on the principal reg-
ister, the person who asserts trade dress protection has the
burden of proving that the ma er sought to be protected
is not functional.
TrafFix Devices, Inc. v. Marketing Displays, Inc.
Temporary road signs with warnings like ”Road Work Ahead” or
”Left Shoulder Closed” must withstand strong gusts of wind. An
inventor named Robert Sarkisian obtained two utility patents for a
mechanism built upon two springs (the dual-spring design) to keep
these and other outdoor signs upright despite adverse wind condi-
tions. The holder of the now-expired Sarkisian patents, respondent
Patented dual-spring design Marketing Displays, Inc. (MDI), established a successful business in
C. TRADEMARK 831
the manufacture and sale of sign stands incorporating the patented
feature. MDI’s stands for road signs were recognizable to buyers and
users (it says) because the dual-spring design was visible near the
base of the sign.
This litigation followed after the patents expired and a competi-
tor, TrafFix Devices, Inc., sold sign stands with a visible spring mech-
anism that looked like MDI’s. MDI and TrafFix products looked alike
because they were. When TrafFix started in business, it sent an MDI
product abroad to have it reverse engineered, that is to say copied.
Complicating ma ers, TrafFix marketed its sign stands under a name
similar to MDI’s. MDI used the name ”WindMaster,” while TrafFix,
its new competitor, used ”WindBuster.”
II
It is well established that trade dress can be protected under federal
law. The design or packaging of a product may acquire a distinctive-
ness which serves to identify the product with its manufacturer or
source; and a design or package which acquires this secondary mean-
ing, assuming other requisites are met, is a trade dress which may not
be used in a manner likely to cause confusion as to the origin, spon-
sorship, or approval of the goods. In these respects protection for
trade dress exists to promote competition. Congress confirmed this
statutory protection for trade dress by amending the Lanham Act to
recognize the concept. Lanham Act S 43(a)(3) provides: ”In a civil
action for trade dress infringement under this chapter for trade dress
not registered on the principal register, the person who asserts trade
dress protection has the burden of proving that the ma er sought to
be protected is not functional.” [The Court discussed Qualitex, Two
Pesos, and Wal-Mart Stores.] TrafFix "Little Buster" sign with dual-
Trade dress protection must subsist with the recognition that in spring base
many instances there is no prohibition against copying goods and
products. In general, unless an intellectual property right such as
a patent or copyright protects an item, it will be subject to copying.
Copying is not always discouraged or disfavored by the laws which
preserve our competitive economy. Allowing competitors to copy
will have salutary effects in many instances. Reverse engineering of
chemical and mechanical articles in the public domain often leads to
significant advances in technology.
The principal question in this case is the effect of an expired patent
on a claim of trade dress infringement. A prior patent, we conclude,
has vital significance in resolving the trade dress claim. A utility
patent is strong evidence that the features therein claimed are func-
tional. If trade dress protection is sought for those features the strong
evidence of functionality based on the previous patent adds great
weight to the statutory presumption that features are deemed func-
832 CHAPTER 9. DESIGN
tional until proved otherwise by the party seeking trade dress protec-
tion. Where the expired patent claimed the features in question, one
who seeks to establish trade dress protection must carry the heavy
burden of showing that the feature is not functional, for instance by
showing that it is merely an ornamental, incidental, or arbitrary as-
pect of the device.
In the case before us, the central advance claimed in the expired
utility patents is the dualspring design; and the dual-spring design is
the essential feature of the trade dress MDI now seeks to establish and
to protect. MDI did not, and cannot, carry the burden of overcoming
the strong evidentiary inference of functionality based on the disclo-
sure of the dual-spring design in the claims of the expired patents.
The dual springs shown in the Sarkisian patents were well apart
(at either end of a frame for holding a rectangular sign when one full
side is the base) while the dual springs at issue here are close together
(in a frame designed to hold a sign by one of its corners). As the Dis-
trict Court recognized, this makes li le difference. The point is that
the springs are necessary to the operation of the device. The fact that
the springs in this very different-looking device fall within the claims
of the patents is illustrated by MDI’s own position in earlier litiga-
tion. In the late 1970’s, MDI engaged in a long-running intellectual
property ba le with a company known as Winn-Proof. Although the
precise claims of the Sarkisian patents cover sign stands with springs
”spaced apart,” the Winn-Proof sign stands (with springs much like
the sign stands at issue here) were found to infringe the patents by
the United States District Court for the District of Oregon, and the
Sarkisian: 697 F.2d 1313 (1983) Court of Appeals for the Ninth Circuit affirmed the judgment. Sark-
isian v. WinnProof Corp. Although the WinnProof traffic sign stand
(with dual springs close together) did not appear, then, to infringe
the literal terms of the patent claims (which called for ”spaced apart”
springs), the WinnProof sign stand was found to infringe the patents
under the doctrine of equivalents. In light of this past ruling – a ruling
procured at MDI’s own insistence – it must be concluded the products
here at issue would have been covered by the claims of the expired
patents.
The rationale for the rule that the disclosure of a feature in the
claims of a utility patent constitutes strong evidence of functionality
is well illustrated in this case. The dual-spring design serves the im-
portant purpose of keeping the sign upright even in heavy wind con-
ditions; and, as confirmed by the statements in the expired patents, it
does so in a unique and useful manner. As the specification of one of
the patents recites, prior art ”devices, in practice, will topple under
the force of a strong wind.” The dual-spring design allows sign stands
to resist toppling in strong winds. Using a dual-spring design rather
than a single spring achieves important operational advantages. For
C. TRADEMARK 833
example, the specifications of the patents note that the ”use of a pair
of springs as opposed to the use of a single spring to support the
frame structure prevents canting or twisting of the sign around a
vertical axis,” and that, if not prevented, twisting ”may cause dam-
age to the spring structure and may result in tipping of the device.”
In the course of patent prosecution, it was said that ”the use of a
pair of spring connections as opposed to a single spring connection
forms an important part of this combination” because it ”forc[es] the
sign frame to tip along the longitudinal axis of the elongated ground-
engaging members.” The dual-spring design affects the cost of the
device as well; it was acknowledged that the device ”could use three
springs but this would unnecessarily increase the cost of the device.”
These statements made in the patent applications and in the course
of procuring the patents demonstrate the functionality of the design.
MDI does not assert that any of these representations are mistaken or
inaccurate, and this is further strong evidence of the functionality of
the dual-spring design.
III
In finding for MDI on the trade dress issue the Court of Appeals
gave insufficient recognition to the importance of the expired utility
patents, and their evidentiary significance, in establishing the func-
tionality of the device. The error likely was caused by its misinterpre-
tation of trade dress principles in other respects.
Discussing trademarks, we have said ”in general terms, a product
feature is functional, and 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. Qualitex. Expanding upon the meaning of this phrase, we
have observed that a functional feature is one the ”exclusive use of
which would put competitors at a significant nonreputation-related
disadvantage.” Id.The Court of Appeals in the instant case seemed to
interpret this language to mean that a necessary test for functional-
ity is ”whether the particular product configuration is a competitive
necessity.” This was incorrect as a comprehensive definition. A fea-
ture is also functional when it is essential to the use or purpose of
the device or when it affects the cost or quality of the device. The
Qualitex decision did not purport to displace this traditional rule. It
is proper to inquire into a ”significant non-reputation-related disad-
vantage” in cases of esthetic functionality, the question involved in
Qualitex. Where the design is functional under the traditional for-
mulation there is no need to proceed further to consider if there is
a competitive necessity for the feature. In Qualitex, by contrast, es-
thetic functionality was the central question, there having been no
indication that the green-gold color of the laundry press pad had any
bearing on the use or purpose of the product or its cost or quality.
834 CHAPTER 9. DESIGN
The Court has allowed trade dress protection to certain product
features that are inherently distinctive. In Two Pesos, however, the
Court at the outset made the explicit analytic assumption that the
trade dress features in question decorations and other features to
evoke a Mexican theme in a restaurant) were not functional. The
trade dress in those cases did not bar competitors from copying func-
tional product design features. In the instant case, beyond serving
the purpose of informing consumers that the sign stands are made by
MDI (assuming it does so), the dual-spring design provides a unique
and useful mechanism to resist the force of the wind. Functionality
having been established, whether MDI’s dual-spring design has ac-
quired secondary meaning need not be considered.
There is no need, furthermore, to engage, as did the Court of Ap-
peals, in speculation about other design possibilities, such as using
three or four springs which might serve the same purpose. Here,
the functionality of the spring design means that competitors need
not explore whether other spring juxtapositions might be used. The
dual-spring design is not an arbitrary flourish in the configuration of
MDI’s product; it is the reason the device works. Other designs need
not be a empted.
Because the dual-spring design is functional, it is unnecessary for
competitors to explore designs to hide the springs, say, by using a box
or framework to cover them, as suggested by the Court of Appeals.
The dual-spring design assures the user the device will work. If buy-
ers are assured the product serves its purpose by seeing the operative
mechanism that in itself serves an important market need. It would
be at cross-purposes to those objectives, and something of a paradox,
were we to require the manufacturer to conceal the very item the user
seeks.
In a case where a manufacturer seeks to protect arbitrary, inciden-
tal, or ornamental aspects of features of a product found in the patent
claims, such as arbitrary curves in the legs or an ornamental pa ern
painted on the springs, a different result might obtain. There the man-
ufacturer could perhaps prove that those aspects do not serve a pur-
pose within the terms of the utility patent. The inquiry into whether
such features, asserted to be trade dress, are functional by reason of
their inclusion in the claims of an expired utility patent could be aided
by going beyond the claims and examining the patent and its prosecu-
tion history to see if the feature in question is shown as a useful part of
the invention. No such claim is made here, however. MDI in essence
seeks protection for the dual-spring design alone. The asserted trade
dress consists simply of the dual-spring design, four legs, a base, an
upright, and a sign. MDI has pointed to nothing arbitrary about the
components of its device or the way they are assembled. The Lan-
ham Act does not exist to reward manufacturers for their innovation
C. TRADEMARK 835
in creating a particular device; that is the purpose of the patent law
and its period of exclusivity. The Lanham Act, furthermore, does not
protect trade dress in a functional design simply because an invest-
ment has been made to encourage the public to associate a particular
functional feature with a single manufacturer or seller. The Court of
Appeals erred in viewing MDI as possessing the right to exclude com-
petitors from using a design identical to MDI’s and to require those
competitors to adopt a different design simply to avoid copying it.
MDI cannot gain the exclusive right to produce sign stands using the
dual-spring design by asserting that consumers associate it with the
look of the invention itself.
In re Florists' Transworld Delivery, Inc.
106 U.S.P.Q.2d (TTAB 2013)
Florists’ Transworld Delivery, Inc. appealed from the final refusal
of the trademark examining a orney to register the proposed mark
shown [in the margin] for ”flowers and live cut floral arrangements.”
The specimen of use is reproduced [in the margin]. The description
of the mark is:
The mark consists of the color black as applied to a sub-
stantial portion of the outside surface of a box which
Proposed mark
serves as a container or packaging for the goods and in
part forms a background to design and literal elements
applied thereto.
Section 2(e)(5) of the Trademark Act prohibits registration of a mark
if it ”comprises any ma er that, as a whole, is functional.” There
Specimen of use
are two forms of functionality, utilitarian functionality and aesthetic
functionality. A feature that is not essential to the use or purpose of
the article, or does not affect the cost or quality of the article – in other
words, would not be considered as utilitarian functional – is still pro-
hibited from registration if the exclusive appropriation of that feature
would put competitors at a significant non-reputation related disad-
vantage.
In Brunswick Corp. v. British Seagull Ltd., the applicant sought to Brunswick Corp.: 35 F.3d 1527 (Fed. Cir.
register the color black for outboard engines. In affirming the Board’s 1994)
finding that the color black is de jure functional for outboard motors,
the Federal Circuit reasoned:
The color black does not make the engines function bet-
ter as engines. The paint on the external surface of an en-
gine does not affect its mechanical purpose. Rather, the
color black exhibits both color compatibility with a wide
variety of boat colors and ability to make objects appear
smaller. With these advantages for potential customers,
there is competitive need for engine manufacturers to use
836 CHAPTER 9. DESIGN
black on outboard engines.
Kichler: 192 F.3d 1349 (Fed. Cir. 1999) The Federal Circuit also focused on competitive need in L.D. Kich-
ler Co. v. Davoil, Inc.. There, the Federal Circuit reversed a district
court’s cancellation on summary judgment of a registration for the
”Olde Brick” finish of a lighting fixture backplate. The Federal Cir-
cuit found a genuine issue of material fact as to whether there was
a competitive need for others to use the ”Olde Brick” finish and re-
manded. In particular, the Court noted:
There is evidence that many customers prefer Olde Brick
and other composite ”rust-type” colors. It is not clear,
however, that Olde Brick is one of a few colors that are
uniquely superior for use in home decorating. Thus, the
district court erred in granting summary judgment that
Olde Brick was de jure functional.
In the present case, applicant seeks to register a single-color mark,
black, for the outside of the box which serves as the container or
packaging for its goods. We therefore determine factually whether
registration of the color black for boxes for flowers and live cut floral
arrangements serves a non-trademark purpose that would hinder the
ability of others to effectively compete with the registrant.
The evidence in the record reflects that, indeed, in the floral indus-
try, color has significance and communicates particular messages. It
is commonly known that a dozen red roses are given as a message
of love, particularly for Valentine’s Day. [Numerous florist websites
referred to the importance of the color of flowers in a bouquet and
its packaging, e.g. red roses in a white box. Numerous websites also
stated that black in connection with flowers connotes elegance or lux-
"The color is functional because it indi- ury.]
cates the flavor of the ice cream, for ex- In addition, the evidence reflects that black has significance on
ample, pink signifies strawberry, white
somber occasions such as in the context of death. Office action at 8),
signifies vanilla, brown signifies choco-
late, etc." Dippin' Dots, Inc. v. Frosty states ”Black has been … often associated with death.” Black is the tra-
Bites Distribution, 369 F.3d 1197 (11th ditional sign of mourning; it is common knowledge that black cloth-
Cir. 2004). Is that right? ing is traditionally worn at funerals. Flowers and floral displays play
an important role in the context of funerals and mourning; flowers are
ubiquitous at funerals and it is also common knowledge that flowers
are commonly presented as an expression of condolence. With regard
to floral packaging, black is an appropriate color for floral packaging,
and is used as floral packaging in bereavement bouquets
When we consider the evidence in the record, we find that the
examining a orney has demonstrated prima facie that there is a com-
petitive need for others in the industry to use the color black in con-
nection with floral arrangements and flowers. Competitors who, for
example, want to offer flowers for bereavement purposes, Halloween
C. TRADEMARK 837
or to imbue an element of elegance or luxury to their presentations
through packaging therefor will be disadvantaged if they must avoid
using the color black in such packaging. As the examining a orney
stated, ”competitors will need to use black packaging to convey an
appropriate message or sentiment, whether that is elegance, style, fes-
tivity, grief or sympathy” and ”allowing singular entities to control
certain colors, in a field where color is both dynamic and has sig-
nificance, would severely limit the availability of appropriate color
choices to consumers seeking particular floral arrangement gifts.”
Maker's Mark Distillery, Inc. v. Diageo North America, Inc.
703 F. Supp. 2d 671 (W.D Ky. 2010),
Plaintiff Maker’s Mark is a Kentucky-based distiller specializing in aff'd, 679 F.3d 41 (6th Cir. 2012)
bourbon whisky. Since 1958, when it first began producing bour-
bon, the company has capped its bo les with a red dripping wax
seal that partially covers the neck of the bo le and drips down to
the bo le’s shoulder. Since 1985, Maker’s Mark has held a federally
registered trademark, U.S. Trademark Reg. No. 1,370,465, consisting
of the ”wax-like coating covering the cap of the bo le and trickling
down the neck of the bo le in a freeform irregular pa ern.”Notably,
the trademark does not mention the color red – it is silent as to color.
[During the course of litigation, Maker’s Mark narrowed its argument
to assert protection only for a red dripping wax seal.]
The facts giving rise to this case began in the mid-1990s, when
[Jose] Cuervo executives decided to create a high-end tequila to cel-
ebrate the company’s 200th anniversary of producing tequila prod-
ucts legally. They designed the new product, Reserva de la Familia,
in conjunction with a U.S. marketing firm and production began in
1995. Initially, the Reserva bo le design included a straight-edge,
non-dripping wax seal capping the bo le, along with a stamp of the Maker's Mark
Cuervo crest imprinted into the wax and a small blue ribbon extend-
ing from underneath the wax.
Juan Domingo Beckmann, now Chief Executive Officer of Casa
Cuervo, testified that sometime around 1997, he decided to alter the
wax seal to include dripping wax after seeing such a bo le in mid-
production, before its drips were cut off. Beckmann thought the un-
cut seal, with its drips, created a unique and artisanal look. By 2001,
Reserva, with its red dripping wax seal, had entered the U.S. market.
Packaged in a wooden box designed each year by a different Mexican
artist, it retailed for about $100 per bo le.
Defendants argue the red dripping wax seal is functional because
it protects a cork from air, moisture and contaminants, thus preserv-
ing the contents of the bo le on some bo les of alcohol. They further
argue that drips are a natural byproduct of such a coating, and are
costly to remove. In the Court’s view, Cuervo completely failed to
show that wax seals are functional. Not only did Cuervo fall short of Cuervo Reserva
838 CHAPTER 9. DESIGN
proving that the wax seal on the Reserva bo le was functional, it also
did not prove that any current wax seal users employ the method for a
functional purpose. For example, Cuervo’s production manager, Al-
fredo Guerrero, acknowledged that the company seals other Cuervo
products with plastic caps or shrink wrap, and that some of those
methods are less expensive than creating a wax seal.
Even assuming that the Sixth Circuit would apply the aesthetic
functionality doctrine, the Court finds the case for its application here
is unpersuasive. None of Cuervo’s witnesses convinced the Court
that it would be difficult or costly for competitors to design around
the red dripping wax trademark. Furthermore, red wax is not the
only pleasing color of wax that competitors may employ on their
product, nor does it put competitors at a significant non-reputation
related disadvantage to be prevented from using red dripping wax.
There are other ways of making a bo le look artisanal or unique.
Therefore, the doctrine of aesthetic functionality is inapplicable here.
Eames Chair Problem, Revisited
Look again at the Eames Lounge Chair. Is its design protectable trade
dress?
Pez Dispenser Problem
Make yourself familiar, if you are not already, with PEZ dispensers.
To what extent can Patrafico AG (the PEZ corporate parent) obtain
trademark or trade dress protection in the appearance of PEZ dis-
pensers? Can it trademark the spring-loaded flip-top design? The
number of candies in a pack? The fluted front and footed base of
a dispenser? Does it ma er what heads the PEZ dispensers have?
Against what products and uses will these rights be effective?
D Design Patent
Design patent law has, until recently, been one of the most academi-
cally neglected fields of intellectual property law. The immense im-
portance of design patents in smartphone litigation, however, has
thrust them on the public stage again. As you read this section, pay
close a ention to how they deal with the limits on protections for
functional ma er hard-wired into copyright and trademark. There is
a functionality test for design patents, but it is far more forgiving.
There are no canonical design patent Design patents are an interesting hybrid of IP concepts we have
treatises. Chisum's patent-law treatise seen elsewhere. They borrow their basic structure from utility patent
has a chapter on design patents, and
law: a designer obtains exclusive rights to a design by filing an appli-
Matthew A. Smith has a draft treatise
availble online. cation that is examined under the same substantive and procedural
rules as a utility patent application would be. But the subject mat-
D. DESIGN PATENT 839
ter that is actually protected, and the infringement test used to mea-
sure similarity, looks much more like copyright. There are even hints
of tradmark-law confusion concepts in the historical infringement
tests for design patents, although recent cases insist that whether con-
sumers are confused is (mostly) not the right question to ask.
Patent Act
Whoever invents any new, original and ornamental design for an ar- 35 U.S.C. § 171
ticle of manufacture may obtain a patent therefor, subject to the con- Patents for designs
ditions and requirements of this title.
The provisions of this title relating to patents for inventions shall
apply to patents for designs, except as otherwise provided.
Patents for designs shall be granted for the term of fourteen years 35 U.S.C. § 173
from the date of grant. Term of design patent
United States Patent [19] [11] Patent Number: Des. 283,882
Giugiaro ‘ [45] Date of Patent: ** May 20, 1986
[54] AUTOMOBILE [56] References Cited
PUBLICATIONS
_ _ _ , Road & Track, 3/73, p. 50, Lamborghini P250 Uracco,
[75] Inventor: Giorgetto Giuglaro, Turin, Italy top right Side of page.
Primary Examiner-James M. Gandy
[73] Assignee: Delorean Motor Company Attorney, Agent, or Flrm—David A. Maxon
' [57] CLAIM
The ornamental design for an automobile, as shown and
[**] Term: 14 Years described.
DESCRIPTION
FIG. .1 is a front perspective view of an automobile
[21] Appl' NO‘: 273’091 showing my new design;
FIG. 2 is a rear perspective view thereof;
FIG. 3 is a front‘ elevational view thereof; and
[22] Filed: Jun. 12, 1981 FIG. 4 is a rear elevational view thereof‘
[52] US. Cl. ......................................... .. D12/91 The side opposite to that shown in FIGS. 1 and 2 of the
[58] Field of Search ................. .. D12/9l, 92; 296/185 drawing is substantially a mirror image thereof.
US. Patent May20, 1986 Sheetl of3 Des. 283,882
US. Patent Men/20,3986 Sheet20f3 Des. 283,882
US. Patent May20,l986 Sheet30f3 Des. 283,882
Ea.
844 CHAPTER 9. DESIGN
1 Subject Matter
Section 171 provides two subject ma er threshold conditions: a de-
sign patent can apply only to a design for ”an article of manufacture”
and the design must be ”ornamental.”
a Articles of Manufacture
In re Hruby
373 F.2d 997 (CCPA 1967)
(Rich, J.)
These appeals are from split decisions of the Patent Office Board of
Appeals wherein the majority affirmed the rejection of appellant’s
claims in four design patent applications. The single claim in each
application reads:
The ornamental design for a water fountain as shown and
described.
The sole rejection was that the claim in each case does not define an
article of manufacture. The precise question before us, therefore, is
whether that portion of a water fountain which is composed entirely
of water in motion is within the statutory term ”article of manufac-
ture.”
The board said, ”we appreciate that the forms created in water by
fountains are a well recognized and much used decorative device”
and that it ”is evident as urged by appellant that the shape created
in a specific fountain is manufactured by man in the sense that water
as a raw material is put into planned pa erns of motion for accom-
plishment of a decorative purpose.” The majority further expressed
disagreement with the examiner’s objection that the water of which
the designs are produced is a ”natural” product, and wisely so as that
argument would apply to every article made of wood or stone. Nor
did it think much of the argument that the water droplets constantly
changed position. Nevertheless the board majority concluded that
Figure 1 from Hruby's application
the water display itself is not ”an article of manufacture.” The only
reasons we can perceive for this conclusion in the board’s opinion
are that ”the pa ern created is wholly a fleeting product of nozzle
arrangements and control of operating pressure or pressures” and
that ”the pa ern exists only as a product or ‘effect’ of the mechanical
organization during its continued operation.”
The dissenting member of the board soundly answered the ”fleet-
ing” argument as follows:
Although appellant did not disclose the particular means
for producing the fountain effect, it is recognized that
if certain parameters such as orifice configuration, water
pressure and freedom from disturbing atmospheric con-
Figure 2 from Hruby's application ditions are maintained, the ornamental shape of the foun-
D. DESIGN PATENT 845
tain will remain substantially constant and will at such
times present an over-all appearance virtually the same
from day to day.
We agree with the dissenter on that and would add that the perma-
nence of any design is a function of the materials in which it is em-
bodied and the effects of the environment thereon. Considering the
fact that the Romans and the French built now famous fountains hun-
dreds of years ago which still produce the same water designs today,
the notion that a fountain is ”fleeting” is not one which will ”hold
water.”
The dissenting member continued:
It is true that a particular droplet or droplets may be
”a fleeting product” but the fountain itself is not. The
fountain in its entirety under proper conditions presents
a product of constant appearance rather than a fleeting
product. I assume that the majority would find no objec-
tion if a design effect would be produced in the form of
frozen water. Is it logical or reasonable to find objection
to a related design effect also having a constant appear-
ance merely because of continuous movement of water
droplets? I am unable to find any logical or legal basis
for such a distinction. It must be remembered that in a de-
sign it is the over-all appearance due to the form or shape
of the product that is determinative of patentability and
not the minutia of the details that form the design.
Again we agree. The physicists and philosophers teach us that what
we think we see is not really there at all; that the very concept of
”solid” is something of an illusion and objects are mostly empty space,
”substance” consisting of nuclei with electrons orbiting about them.
In common parlance, however, what we see here are fountains, not
droplets of water moving in space, any more than we see nuclei and
electrons or atoms or molecules in solid objects.
Fountains are what appellant (or someone connected with him)
sells. At oral argument, counsel presented us with a stereoscopic film-
slide card, a sales device showing fountains like those here involved
in three-dimensional pictures as offered for sale. There is no doubt
in our minds that prospective buyers of these fountains would select
them for the decoration of buildings or grounds according to specific,
reproducible3 designs, intending to us them as permanent decoration.
3
We use the term ”reproducible” in the practical sense of making another thing
which has the same appearance to the average viewer. The examiner was con-
cerned about the obvious fact that ”the exact arrangement and configuration of
droplets” could not be reproduced by a person skilled in the art. We do not
846 CHAPTER 9. DESIGN
The fountains are certainly made by man (manufactured) for sale to
and use by such buyers. They certainly carry into effect the plain
intent of the design patent statute, which is to give encouragement to
the decorative arts.
The brief for the Patent Office makes but a single argument in
support of the contention the fountains should not be considered to
be ”an article of manufacture.” It is, as the examiner contended, that
water sprays ”cannot exist of themselves,” being dependent on the
existence of the nozzles and the water under pressure. Only because
of this dependence are we asked to affirm the rejection.
We fail to see any force in this argument. It is not denied that
designs exist. It is perfectly clear that these designs are of the three-
dimensional or configuration-of-goods type. The ”goods” in this in-
stance are fountains, so they are made of the only substance foun-
tains can be made of – water. We see no necessary relation between
the dependence of these designs made of water upon the means for
producing them and their being articles of manufacture. A majority
of this court recently held patentable a grille for a radio cabinet with
a circularly brushed appearance which also had evenly-spaced small
perforations. The peculiarity of this grille was that ”with variations
in viewing angle and ambient lighting” (emphasis added) a varying
moire effect was produced and the majority felt that this effect made
the ornamental appearance unobvious and patentable. The design
was thus dependent, insofar as the feature which made it patentable
was concerned, on something outside itself, it did not exist alone,
Boldt's radio cabinet. Unfortunately, because without the proper angles of ambient lighting and viewing
the same moiré effect remarked on there was no moire effect.In re Boldt We do not see that the depen-
by the court also makes the image in
dence of the existence of a design on something outside itself is a
Boldt's filing hard to copy or scan faith-
fully. reason for holding it is not a design ”for an article of manufacture.”
Many such designs depend upon outside factors for the production
Boldt: 344 F.2d 990 (1965)
of the appearance which the beholder observes. The design of a lamp-
shade may not be apparent unless the lamp is lighted. The design of
a woman’s hosiery is not apparent unless it is in place on her legs.
The designs of inflated articles such as toy balloons, water toys, air
ma resses, and now even buildings are not apparent in the absence
of the compressed air which gives them form, as the water pressure
think this important. The same problem exists to some degree with most every-
thing made of such variable materials as wood, cloth, clay and many others which
minutely vary from piece to piece. What ma ers with an ornamental design is
only the ultimate over-all appearance of the article which embodies it. Technically,
”exact” reproduction is an impossibility. It is always an approximation. We see
no reason why design law — law being one of the greatest approximations of all
— should be any more concerned with the ”exact arrangement” of water droplets
than it is with the exact arrangement of molecules, grains of sand, or even grosser
building blocks so long as the general appearance is not affected.
D. DESIGN PATENT 847
here gives shape to the fountain. Even the design of wall paper is
not always fully apparent in the commodity as it is sold and requires
a wall and the services of a paperhanger to put it into condition for
enjoyment by the beholder, which is the ultimate purpose of all orna-
mental design.
Worley, Chief Judge, dissenting:
It is inconceivable that Congress could possibly have intended
Sec. 171, in le er or spirit, to allow an individual to remove from
the public domain and monopolize mere sprays of water. To do so,
one must necessarily rely on strained semantics at the expense of com-
mon sense. The instant sprays, so evanescent and fugitive in nature,
presumably subject to the whims of wind and weather, incapable of
existing in and of themselves, are merely the effect flowing from arti-
cles of manufacture, but certainly are no more articles of manufacture
per se than are the vapor trails of jets, wakes of ships or steam from
engines.
It appears that appellant presently enjoys patent protection on the
mechanical elements of the fountains, but apparently not satisfied
with that, now seeks to monopolize certain configurations of mov-
ing water, whether produced by a garden hose or otherwise. It is not
difficult to imagine the potential harassment that could result from
such a monopoly.
In re AlSabah No. 2015-1264 (Fed. Cir. 2015)
AlSabah seeks a design patent on, “The ornamental design for The examiner rejected AlSabah's appli-
a Teaching Aid for Teaching Arabic as shown and described.” cation, and the PTAB affirmed. This is
AlSabah’s design is a table of synopsized Arabic le ers divided into the brief for the USPTO in AlSabah's ap-
numbered groups and arranged in eleven rows and two columns. peal to the Federal Circuit, which af-
firmed the PTAB without opinion. 621
The Board properly found that AlSabah’s design is directed to
Fed. Appx. 659, 2015 WL 6080577 (Fed.
nonstatutory subject ma er as provided under 35 U.S.C. § 171 be- Cir. 2015).
cause the design is not embodied in or applied to an article of manu-
facture. Specifically, AlSabah seeks a design patent on a design for a
teaching aid, where the design is a table of information (synopsized
Arabic le ers divided into groups arranged in an eleven rows and
two columns). AlSabah’s design can theoretically be applied to a vari-
ety of articles, from poster boards to coffee mugs, but has not yet been
applied to any article. In other words, AlSabah seeks to improperly
patent an abstract design.
A design patent may be obtained for a “new, original and orna-
mental design for an article of manufacture.” An article of manu-
facture is a tangible man-made object. For example, a computer-
generated icon shown on a computer screen is a patentable design
on an article of manufacture. The icon itself is not patentable, but
when claimed as an icon embodied on a computer screen, monitor, AlSabah's design
848 CHAPTER 9. DESIGN
or other display panel, the combination of the icon and the display
panel (or portion thereof) is patentable as a design.
The phrase “design for an article of manufacture” encompasses
three categories of designs: (1) a design for an ornament, impression,
print or picture to be applied to an article of manufacture (surface or-
namentation); (2) a design for the shape or configuration of an article
Schnell: 46 F.2d 203 (CCPA 1931) of manufacture; and (3) a combination of the first two categories. In
re Schnell With respect to the sort of surface ornamentation at issue in
this appeal, this Court’s predecessor, the United States Court of Cus-
toms and Patent Appeals held that section 171 requires that ”design
must be shown not to be the mere invention of a picture, irrespective
of its manner of use, but that the applicant should be required to show
by an appropriate drawing the manner of its application.” The court
went on to state that “it is the application of the design to an article of
manufacture that Congress wishes to promote, and an applicant has
not reduced his invention to practice and has been of li le help to the
art if he does not teach the manner of applying his design.”
The title of AlSabah’s application and claim generically describe
the claimed design as being “for a Teaching Aid for Teaching Arabic.”
The drawing in AlSabah’s application fails to identify an article of
manufacture to which the claimed design must be affixed.Rather, the
drawing simply shows synopsized Arabic le ers in an eleven row by
two column table and nothing more – i.e., a mere abstract design.
AlSabah argues that her application is in “full compliance” with
section 171 because teaching aids and tables are articles of manufac-
ture. While a design for a teaching aid is patentable subject ma er,
the problem for AlSabah is that her so-called design is the teaching
aid. And, although AlSabah’s design can be applied to an unlimited
number of articles of manufacture, there is no way for a person look-
ing at AlSabah’s claim and drawing to discern whether the claimed
design is applied, for example, to a paper handout, a computer icon,
or even a coffee mug. Without application to a defined article of man-
ufacture, AlSabah’s design is nothing more than an abstract idea.
AlSabah erroneously argues that her design is “applied to or em-
bodied in an article of manufacture” because “the design is printed
on a piece of white paper, and a piece of white paper is an article of
manufacture.” More specifically, AlSabah argues that her design is
“applied to or embodied” in paper because her design patent appli-
cation was printed on paper and submi ed to the USPTO for exam-
ination in paper form. According to AlSabah, an applicant can put
any printed material in a design patent application, submit it to the
USPTO, and because the application is transmi ed to the Office on pa-
per the application should not get rejected for not claiming a design
for an article of manufacture. Following AlSabah’s logic, all such pro-
posed design patents would be embodied in paper just because they
D. DESIGN PATENT 849
were submi ed to the USPTO for examination. But that makes li le
sense, what ma ers is the context of the application itself. AlSabah’s
design is not depicted as being a table on paper nor is it described as
being on paper in her application.
If AlSabah wanted to claim the design in Figure 1 as applied to pa-
per, AlSabah could have done so using broken or do ed lines to rep-
resent the paper. But AlSabah’s Figure 1 “as shown and described”
does not depict any article of manufacture, let alone paper. For all
these reasons, AlSabah’s arguments regarding paper are inapt.
b Ornamentality
In re Webb 916 F.2d 1553 (Fed. Cir. 1990)
This is an appeal from a decision of the U.S. Patent and Trademark
Office Board of Patent Appeals and Interferences affirming the final
rejection of the sole claim of appellants’ U.S. Design Patent Applica-
tion Serial No. 833,470. The Board affirmed the Examiner’s holding
that the design, “clearly not intended to be visible in actual use,” “is
not proper subject ma er under 35 U.S.C. § 171.” The Board’s deci-
sion creates a per se rule that a design for an article which will not
be visible in the final use for which the article was created is non-
statutory subject ma er even if the design is observed at some stage
of the article’s commercial life. We reverse and remand.
Hip stem prostheses of the design invented by Webb are metallic
implants that are generally used by orthopedic surgeons to supplant
the functioning of a diseased or broken femur, near the hip, where the
femur is joined to the pelvis. According to Webb, and not disputed by
the Patent and Trademark Office (“PTO”), surgeons are made aware
of differing brands and types of prostheses through advertisements
in professional journals and through trade shows, where the pros-
theses themselves are displayed. Advertisements that were put in
the record prominently and visually display the features of the pros-
theses. Furthermore, the applicant’s agent submi ed that “an im-
plant’s appearance is observed by potential and actual purchasers,
surgeons, nurses, operating room staff, and other hospital personnel.”
After purchase, the prosthesis is surgically implanted into a patient’s
body where the implant is to remain indefinitely. Neither party dis-
putes that, after implantation, the prosthesis is no longer visible to
the naked eye.
In the Final Office Action, the Examiner stated:
There is not sound reason or logic for “normal use” to in-
clude the repair, service, replacement, sale or display of
the article which incorporates the claimed design. While
such occasions are of course “normal” in the sense of com- Webb's '470 design
850 CHAPTER 9. DESIGN
monplace or routine occasions of an item’s use, for patent
purposes “normal use” should be limited to the ordinary
functioning for which it was designed, not incidents in
the article’s life which are not integral to its function or
purpose. Items are not designed for sale, display, replace-
ment or repair.
The issuance of design patents is limited by statute to designs that
are ornamental. Our predecessor court has affirmed the rejection of
design applications that cannot be perceived in their normal and in-
tended uses. For instance, the Court of Customs and Patent Appeals
affirmed the rejection of a design claim for a vent tube placed in the
wall of a frame house, stating that “it is well-se led that patentability
of a design cannot be based on elements which are concealed in the
Cornwall: 230 F.2d 457 (CCPA 1956) normal use of the device to which the design is applied.”In re Corn-
wall. Even earlier, that court affirmed the rejection of a design claim
Stevens: 173 F.2d 1015, (CCPA 1949) for a vacuum cleaner brush. In re Stevens. There the court noted:
Articles which are concealed or obscure are not proper
subjects for design patents, since their appearance can-
not be a ma er of concern. Almost every article is visible
when it is made and while it is being applied to the posi-
tion in which it is to be used. Those special circumstances,
however, do not justify the granting of a design patent
on an article such as here under consideration which is
always concealed in its normal and intended use.
We read those cases to establish a reasonable general rule that pre-
sumes the absence of ornamentality when an article may not be ob-
served. This is a sound rule of thumb, but it is not dispositive. In each
case, the inquiry must extend to whether at some point in the life of
the article an occasion (or occasions) arises when the appearance of
the article becomes a “ma er of concern.”
Here, we read the Board’s decision to have established a per se
rule under § 171 that if an article is hidden from the human eye when
it arrives at the final use of its functional life, a design upon that ar-
ticle cannot be ornamental. The rule in Stevens does not compel the
Board’s decision. Instead, Stevens instructs us to decide whether the
“article such as here under consideration” – a hip stem implant – “is
always concealed in its normal and intended use.” The issue before
us, then, is whether “normal and intended use” of these prosthetic
devices is confined to their final use.
Although we agree that “normal and intended use” excludes the
time during which the article is manufactured or assembled, it does
not follow that evidence that an article is visible at other times is
legally irrelevant to ascertaining whether the article is ornamental for
D. DESIGN PATENT 851
purposes of § 171. Contrary to the reasoning of the Examiner in this
case, articles are designed for sale and display, and such occasions
are normal uses of an article for purposes of § 171. The likelihood
that articles would be observed during occasions of display or sale
could have a substantial influence on the design or ornamentality of
the article.
In short, we construe the “normal and intended use” of an arti-
cle to be a period in the article’s life, beginning after completion of
manufacture or assembly and ending with the ultimate destruction,
loss, or disappearance of the article. Although the period includes all
commercial uses of the article prior to its ultimate destination, only
the facts of specific cases will establish whether during that period the
article’s design can be observed in such a manner as to demonstrate
its ornamentality.
It is possible, as in Stevens, that although an article may be sold
as a replacement item, its appearance might not be of any concern to
the purchaser during the process of sale. Indeed, many replacement
items, including vacuum cleaner brushes, are sold by replacement or
order number, or they are noticed during sale only to assess function-
ality. In such circumstances, the PTO may properly conclude that an
application provides no evidence that there is a period in the com-
mercial life of a particular design when its ornamentality may be a
ma er of concern. However, in other cases, the applicant may be able
to prove to the PTO that the article’s design is a “ma er of concern”
because of the nature of its visibility at some point between its man-
ufacture or assembly and its ultimate use. Many commercial items,
such as colorful and representational vitamin tablets, or caskets, have
designs clearly intended to be noticed during the process of sale and
equally clearly intended to be completely hidden from view in the
final use. Here, for example, there was ample evidence that the fea-
tures of the device were displayed in advertisements and in displays
at trade shows. That evidence was disregarded by the Board because,
in its view, doctors should select implants solely for their functional
characteristics, not their design. It is not the task of the Board to make
such presumptions.
Rosco, Inc. v. Mirror Lite Co.
304 F.3d 1373 (Fed. Cir. 2002)
Rosco, Inc. (“Rosco”) appeals the decision of the United States Dis-
trict Court for the Eastern District of New York finding Rosco’s design
patent, United States Design Patent No. 346,357 (“the ‘357 patent”),
invalid as functional.
Rosco and Mirror Lite are competitors in the school bus mirror
market. This dispute involves “cross-view” mirrors, which are con-
vex, three-dimensional, curved surface mirrors mounted on the front
fender of a school bus, enabling the bus driver to view the front and
852 CHAPTER 9. DESIGN
passenger side of a school bus. Rosco’s ‘357 design patent shows a
highly convex, curved-surface, three-dimensional oval mirror with a
black, flat metal backing. In May 1992, Rosco began manufacturing
the mirror of the ‘357 patent under the name “Eagle Eye.” Rosco al-
leged that Mirror Lite infringed the ‘357 patent by manufacturing and
selling a duplicate of Rosco’s mirror under the name “Hawk Eye.”
We apply a stringent standard for invalidating a design patent on
grounds of functionality: the design of a useful article is deemed func-
tional where the appearance of the claimed design is dictated by the
use or purpose of the article. [For a design patent to be valid,] the
design must not be governed solely by function, i.e., that this is not
the only possible form of the article that could perform its function.
Rosco's '357 design When there are several ways to achieve the function of an article of
manufacture, the design of the article is more likely to serve a pri-
marily ornamental purpose. That is, if other designs could produce
the same or similar functional capabilities, the design of the article in
question is likely ornamental, not functional.
The district court found that because the mirror’s oval shape, the
asserted point of novelty of the ‘357 patent, “of necessity dictates its
function,” the ‘357 patent was invalid as functional. The court based
its determination of functionality on its findings that the mirror of
the ‘357 patent offered a unique field of view (when compared to Mir-
ror Lite’s Bus Boy mirror); that Rosco represented to the Patent and
Trademark Office that its mirror provided a superb field of view; and
that Rosco marketed the mirror of the ‘357 patent as more “aerody-
namic” than other cross-view mirrors.
The mere fact that the invention claimed in the design patent ex-
hibited a superior field of view over a single predecessor mirror (here,
the Bus Boy) does not establish that the design was “dictated by” func-
tional considerations, as required by L.A. Gear. The record indeed
reflects that other mirrors that have non-oval shapes also offer that
particular field of view. Similarly, nothing in the record connects
the oval shape of the patented design with aerodynamics, and the
record shows that other non-oval shaped mirrors have the same aero-
dynamic effect.
Mirror Lite has not shown by clear and convincing evidence that
there are no designs, other than the one shown in Rosco’s ‘357 patent,
that have the same functional capabilities as Rosco’s oval mirror. Un-
der these circumstances it cannot be said that the claimed design of
the ‘357 patent was dictated by functional considerations.
In re Koehring
37 F.2d 421 (CCPA 1930)
This appeal from the decision of the Commissioner of Patents, refus-
ing a patent for a design for a concrete mixer truck body and frame,
presents as its main issue the very interesting, and oftimes trouble-
D. DESIGN PATENT 853
some, question as to what articles of manufacture may constitute the
subject-ma er of design patents. Before us the Commissioner urges
that it must be held, under In re Stimpson that this character of ma- Stimpson: 24 F.2d 1012 (D.C. Ct. App.)
chine is not ”inventively ornamental.” The riveting machine in con-
troversy in Stimpson was held not to be ornamental, because the draw-
ing showed that it was
purely utilitarian, and without ornamentation of any kind.
There is nothing about the assembled mechanical device
which serves to beautify, embellish, or adorn it. The sev-
eral parts of the mechanism, whether circular, curved,
rounded, or spiral, are assembled into an entirety which
is lacking in symmetry, wanting in grace, and destitute of
any appeal to the senses or emotions. The design has no
human interest, other than that aroused by the utilitarian
nature of the machine.
In our view of the case, the beauty and ornamentation requisite in de-
sign patents is not confined to such as may be found in the ”aesthetic
or fine arts.” It is not reasonable to presume that Congress, in basing
a patent right upon the ornamentation or beauty of a tool or mechan-
ical device, intended that such beauty and ornamentation should be
limited to such as is found in paintings, sculpture, and artistic objects,
and which excites the aesthetic sense of artists alone. "Design applications which disclose
subject matter which could be deemed
By the enactment of the design patent law, Congress expressed a
offensive to any race, religion, sex, eth-
desire to promote more beauty, grace, and ornamentation in things nic group, or nationality, such as those
used, observed, and enjoyed by our people. Appellant’s design of which include caricatures or depictions,
a truck body and frame for a concrete mixer shows the frame to be should be rejected as nonstatutory sub-
so designed as to place the different elements of the whole machine, ject matter." MPEP § 1504.01(e).
including the hood, gas tank, mixer, etc., into a more symmetrical
and compact whole than was known in the prior art. Aside from this
arrangement, which removes much of the unsightliness from the ma-
chine, the covering of the motor is made to resemble, in appearance,
an automobile hood, and the angular bars and framework of the same
are given a rounded or oval appearance. By the plan of assembly of
the more or less rounded hood, round gas tank, and rounded frame
corners into a compact and more symmetrical whole, an article, pos-
sessing more grace and pleasing appearance than existed in the prior
art, has been produced. This effect in the design as a whole is orna-
Koehring's design
mental and inventive.
Since it is clear that Congress meant the design patent law to ap-
ply to tools and mechanisms of utilitarian character, it follows, we
think, that it had in mind the elimination of much of the unsightly
repulsiveness that characterizes many machines and mechanical de-
vices which have a tendency to depress rather than excite the esthetic
sense. In this mechanical age, when machines, engines, and various
854 CHAPTER 9. DESIGN
kinds of mechanisms are transported on our public highways and
streets and moved by their own momentum from place to place, it
is certainly not undesirable that some of the unsightliness – and, as
frequently occurs, frightfulness – of such contrivances be eliminated,
if possible.
2 Procedures
Most of the mechanics of obtaining a design patent are the same as for
a utility patent. The principal difference is that designs are claimed
by illustration rather than in words. This creates some distinctive
drafting issues. Design patents also have a shorter term. (In addition,
design patent prosecution is procedurally simpler in several ways not
here relevant.)
Manual of Patent Examining Procedure
MPEP § 1503
A preamble, if included, should state the name of the applicant, the
Elements of a Design Patent Applica- title of the design, and a brief description of the nature and intended
tion Filed Under 35 U.S.C. ch. 16 use of the article in which the design is embodied.
No description of the design in the specification beyond a brief de-
scription of the drawing is generally necessary, since as a rule the il-
lustration in the drawing views is its own best description. However,
while not required, such a description is not prohibited and may be
incorporated, at applicant’s option, into the specification or may be
provided in a separate paper. Descriptions of the figures are not re-
quired to be wri en in any particular format, however, if they do not
describe the views of the drawing clearly and accurately, the exam-
iner should object to the unclear and/or inaccurate descriptions and
suggest language which is more clearly descriptive of the views.
The following types of statements are not permissible in the spec-
ification:
(1) A disclaimer statement directed to any portion of the claimed
design that is shown in solid lines in the drawings.
(2) Statements which describe or suggest other embodiments of the
claimed design which are not illustrated in the drawing disclo-
sure, except one that is a mirror image of that shown or has
a shape and appearance that would be evident from the one
shown.
(3) Statements describing ma ers that are directed to function or
are unrelated to the design.
A design patent application may only include a single claim. The
single claim should normally be in formal terms to “The ornamental
design for (the article which embodies the design or to which it is
D. DESIGN PATENT 855
applied) as shown.” The description of the article in the claim should
be consistent in terminology with the title of the invention.
When the specification includes a proper descriptive statement of
the design, or a proper showing of modified forms of the design or
other descriptive ma er has been included in the specification, the
words “and described” must be added to the claim following the term
“shown”; i.e., the claim must read “The ornamental design for (the
article which embodies the design or to which it is applied) as shown
and described.”
Full lines in the drawing show the claimed design. Broken lines
are used for numerous purposes. Under some circumstances, broken
lines are used to illustrate the claimed design (i.e., stitching and fold
lines). Broken lines are not permi ed for the purpose of identifying
portions of the claimed design which are immaterial or unimportant.
There are “no portions of a design which are ”immaterial” or ”not
important.” A design is a unitary thing and all of its portions are ma-
terial in that they contribute to the appearance which constitutes the
design.
Every design patent application must include either a drawing or
a photograph of the claimed design. As the drawing or photograph
constitutes the entire visual disclosure of the claim, it is of utmost
importance that the drawing or photograph be clear and complete,
and that nothing regarding the design sought to be patented is left to
conjecture.
When inconsistencies are found among the views, the examiner
should object to the drawings and request that the views be made
consistent. When the inconsistencies are of such magnitude that the
overall appearance of the design is unclear, the claim should be re-
jected under 35 U.S.C. 112(a) and (b) as nonenabling and indefinite. Are enablement and definiteness the
The drawings or photographs should contain a sufficient number same for design patents?
of views to disclose the complete appearance of the design claimed,
which may include the front, rear, top, bo om and sides. Perspec-
tive views are suggested and may be submi ed to clearly show the
appearance of three dimensional designs.
Views that are merely duplicative of other views of the design or
that are flat and include no surface ornamentation may be omi ed
from the drawing if the specification makes this explicitly clear. For
example, if the left and right sides of a design are identical or a mirror
image, a view should be provided of one side and a statement made
in the drawing description that the other side is identical or a mirror
image. If the design has a flat bo om, a view of the bo om may be
omi ed if the specification includes a statement that the bo om is flat
and devoid of surface ornamentation.
Sectional views presented solely for the purpose of showing the
internal construction or functional/ mechanical features are unneces-
856 CHAPTER 9. DESIGN
sary and may lead to confusion as to the scope of the claimed design.
The examiner should object to such views and require their cancel-
lation.. However, where the exact contour or configuration of the
exterior surface of a claimed design is not apparent from the views of
the drawing, and no a empt is made to illustrate features of internal
construction, a sectional view may be included to clarify the shape of
said design.
While surface shading is not required, it may be necessary in par-
ticular cases to shade the figures to show clearly the character and
contour of all surfaces of any 3-dimensional aspects of the design.
Surface shading is also necessary to distinguish between any open
and solid areas of the article. Lack of appropriate surface shading in
the drawing as filed may render the design nonenabling and indefi-
nite under 35 U.S.C. 112(a) and (b). Solid black surface shading is not
permi ed except when used to represent the color black as well as
color contrast. Oblique line shading must be used to show transpar-
ent, translucent and highly polished or reflective surfaces, such as a
mirror. Contrast in materials may be shown by using line shading in
one area and stippling in another. By using this technique, the claim
will broadly cover contrasting surfaces unlimited by colors.
The two most common uses of broken lines are to disclose the en-
vironment related to the claimed design and to define the bounds of
the claim. Structure that is not part of the claimed design, but is con-
sidered necessary to show the environment in which the design is
associated, may be represented in the drawing by broken lines. This
includes any portion of an article in which the design is embodied
or applied to that is not considered part of the claimed design. Un-
claimed subject ma er may be shown in broken lines for the purpose
of illustrating the environment in which the article embodying the de-
sign is used. Unclaimed subject ma er must be described as forming
no part of the claimed design or of a specified embodiment thereof.
A boundary line may be shown in broken lines if it is not intended to
form part of the claimed design.
Patent Act
35 U.S.C. § 173
Patents for designs shall be granted for the term of 15 years from the
Term of design patent date of grant.
3 Ownership
Skip this section. Not forever, just for a bit. Read the following section on the
similarity analysis in design patent infringement. Then come back. Don’t
worry. This section will still be here, and it will make much more sense.
Inventorship for design patents is much the same as for utility
D. DESIGN PATENT 857
patents and initial ownership. Design patents pose more difficult
questions when it comes to the tests for anticipation under § 102 and
for nonobviousness under § 103. The difficulty flows from the fact
that design patents use depictions rather than verbal claims, so that
the claim-based tests used for utility patents simply map cleanly onto
design patents.
a Novelty
For the most part, the are the rules for priority and for what counts as
prior art are thes same for design patents and utility patents. The test
for experimental use is a li le diffrent because what counts as neces-
sary experimentation is different for ornamentation than for function.
In In re Mann, for example, the applicant exhibited a wrought-iron ta- Mann: 861 F.2d 1581 (Fed. Cir. 1988)
ble embodying the design at a trade show, but argued that it was (Rich, J.)
an ”experimental use.” The court disagreed, writing, ”Obtaining the
reactions of people to a design – whether or not they like it – is not
’experimentation’ in that sense. In the case of a design, if market test-
ing shows that it has no appeal and the design is changed, the result
is a new and different design; the original design remains just what
it was.” It is the test for anticipation that requires modification.
International Seaway Trading Corp. v. Walgreens Corp.
589 F.3d 1233 (Fed. Cir. 2009)
Plaintiff International Seaway filed suit against Walgreens Corpora-
tion and Touchsport Footwear claiming infringement of Seaway’s
patents, U.S. Design Patents Nos. D529,263, D545,032, and D545,033.
The district court granted summary judgment for defendants, finding
that the claims of the asserted patents were invalid under 35 U.S.C. §
102 as anticipated by a patent assigned to Crocs, Inc., U.S. Design
Patent No. D517,789.
Seaway’s patents claim designs for casual, lightweight footwear,
which are typically referred to as ”clogs.” Seaway asserted that
Touchsport had imported and continued to import shoes that in-
fringed the Seaway patents and that Walgreens had sold and contin-
ued to sell the allegedly infringing shoes. The district court granted
summary judgment of anticipation, finding that the three Seaway
patents were anticipated by the Crocs ’789 patent.
It has been well established for over a century that the same test
must be used for both infringement and anticipation. his general rule
derives from the Supreme Court’s proclamation 120 years ago in the
context of utility patents: ”that which infringes, if later, would antic-
ipate, if earlier.” Peters The same rule applies for design patents. In
Egyptian Goddess, we abandoned the point of novelty test for design
patent infringement and held that the ordinary observer test should
serve as the sole test for design patent infringement. we now con-
858 CHAPTER 9. DESIGN
clude that the ordinary observer test must logically be the sole test
The test for anticipation of a utility for anticipation as well.
patent is the mirror image of the lit- Walgreens and Touchsport argue that the asserted differences be-
eral infringement test. But the design
tween the insoles of the patents-in-suit and the prior art ”were at most
patent infringement test bears more
than a passing resemblance to the doc- slight variations of design elements already present in the Crocs prior
trine of equivalents in utility patents. art.” We disagree. The insole pa ern for the patents-in-suit is dis-
What does this do to the symmetry ar- tinctly different than the Crocs insole pa ern.
gument? Should anticipation in de- The Crocs ’789 patent contains a long, U-shaped dimpling pa ern
sign patents be confined to identical
on the insole. In contrast, the patents-in-suit have a dimpling pa ern
designs? Or is it all irrelevant, since ob-
viousness under § 103 will take care of that includes multiple short rows of dimples. Because we cannot say
such cases? that these differences are insignificant as a ma er of law, a genuine is-
sue of material fact exists as to whether the designs would be viewed
as substantially similar in the eyes of the ordinary observer armed
with the knowledge of the prior art.
Beyond the insole features of its patented designs, Seaway argues
that a genuine issue of material fact exists as to whether the exterior
features of its designs preclude a finding of anticipation. It claims that
'789 insole four exterior features differ from the prior art to the degree necessary
to preclude summary judgment: (1) the number and arrangement of
the circular openings on the upper of the clog; (2) the number and
position of the rectangular cut-outs in the lower portion of the upper
of the clog; (3) the shape of the toe portion of the clog; and (4) the
raised pa ern of the outsole of the clog. These features are identical
in all three of Seaway’s patents-in-suit. With regard to these alleged
'263 insole dissimilarities, the district court stated:
Slight variations on the number and position of the circu-
lar holes on the top of the shoe, the rectangular holes on
the toe of the shoe as well as the design of different shaped
rectangles on the sole of the shoe would not convince a
reasonable jury, or an ordinary observer with knowledge
of the prior art, that the limitations were not inherently
'789 side view
disclosed in the ’789 patent. This conclusion does not
change merely because plaintiff slightly changed the ar-
rangement of the textured portions on the top and around
the bo om portion of the sides of the shoe.
We agree with the district court that these minor variations in the shoe
are insufficient to preclude a finding of anticipation because they do
not change the overall visual impression of the shoe. Although the or-
'263 side view dinary observer test requires consideration of the design as a whole,
this does not prevent the district court on summary judgment from
determining that individual features of the design are insignificant
from the point of view of the ordinary observer and should not be
considered as part of the overall comparison. The mandated over-
all comparison is a comparison taking into account significant differ-
D. DESIGN PATENT 859
ences between the two designs, not minor or trivial differences that
necessarily exist between any two designs that are not exact copies of
one another. Just as minor differences between a patented design and
an accused article’s design cannot, and shall not, prevent a finding of
infringement„ so too minor differences cannot prevent a finding of
anticipation.
b Obviousness
The Graham framework is nominally the same for design patents
and for utility patents. But the application is very different. Query 747 F.3d 1326 (Fed. Cir. 2014)
whether the tests used by the Federal Circuit survive KSR.
MRC Innovations, Inc. v. Hunter Mfg., LLP,
MRC Innovations, Inc. appeals from a final judgment of the U.S. Dis-
trict Court for the Northern District of Ohio granting summary judg-
ment of invalidity with respect to U.S. Design Patent No. D634,488.
The ’488 patent claims an ornamental design for a football jersey for
a dog.
The district court concluded that the ’488 patent would have been
obvious in view of several prior art pet jerseys. MRC now appeals
that determination. Obviousness is a question of law based on un-
derlying factual questions. The underlying factual inquiries include:
(1) the scope and content of the prior art; (2) the level of ordinary skill
in the art; (3) the differences between the claimed invention and the
prior art; and (4) objective evidence of non-obviousness. Graham.
In the context of design patents, the ultimate inquiry under sec-
tion 103 is whether the claimed design would have been obvious to
a designer of ordinary skill who designs articles of the type involved.
To answer this question, a court must first determine whether one of
ordinary skill would have combined teachings of the prior art to cre-
ate the same overall visual appearance as the claimed design. That
inquiry involves a two-step process. First, the court must identify
a single reference, something in existence, the design characteristics
of which are basically the same as the claimed design. The ”basically
the same” test requires consideration of the visual impression created '488 design
by the patented design as a whole. The trial court judge may deter- "The 'ordinary designer' means one
mine almost instinctively whether the two designs create basically who brings certain background and
the same visual impression, but ”must communicate the reasoning training to the problems of develop-
behind that decision. ing designs in a particular field, com-
parable to the 'mechanic' or 'routineer'
Once the primary reference is found, other ”secondary” refer-
in non-design arts. We do not have
ences may be used to modify it to create a design that has the same a name for that person in the design
overall visual appearance as the claimed design. These secondary field other than 'designer' which is also
references must be so related to the primary reference that the ap- the name we must use for the person
pearance of certain ornamental features in one would suggest the ap- who creates a patentable design." Nal-
bandian
860 CHAPTER 9. DESIGN
"For design patents, the role of one plication of those features to the other.
skilled in the art in the obviousness con-
text lies only in determining whether to A. Primary Reference
combine earlier references to arrive at a
The district court used the ”Eagles” pet jersey as the ”primary refer-
single piece of art for comparison with
the potential design or to modify a sin- ence” under step one of the analysis. MRC argues that this was legally
gle prior art reference. Once that piece erroneous because there are significant differences between the Ea-
of prior art has been constructed, obvi- gles jersey and the patented design of the ’488 patent. Specifically,
ousness, like anticipation, requires ap- there are three differences: (1) the patented design has a V-neck col-
plication of the ordinary observer test,
lar where the Eagles jersey has a round neck; (2) the patented design
not the view of one skilled in the art."
International Seaway contains an interlock fabric panel on the side portion of the design
rather than mesh; and (3) the patented design contains additional or-
namental surge stitching on the rear portion of the jersey. MRC ar-
gues that the district court overlooked these differences by focusing
on the claimed design at too high a level of abstraction. If the district
court had translated the claimed design into a verbal description as
required by High Point, MRC insists, it would have concluded that
neither the Eagles jersey nor any other prior art reference contained
design characteristics that were basically the same as the claimed de-
sign.
As an initial ma er, it is true that the district court did not ex-
pressly undertake to translate the claimed design into a verbal de-
scription. However, the purpose of requiring district courts to de-
scribe the claimed design in words is so that the parties and appel-
late courts can discern the trial court’s reasoning in identifying a pri-
mary reference. It is entirely clear from the district court’s opinion
what it considered to be the relevant design characteristics of the ’488
patented design.
First, the district court pointed out three key similarities between
the claimed design and the Eagles jersey: an opening at the collar
portion for the head, two openings and sleeves stitched to the body
of the jersey for limbs, and a body portion on which a football logo
is applied. If the district court’s analysis had ended there, it might
indeed have failed to meet the verbal description requirement. How-
ever, the district court went on to point out two additional similarities
between the two designs: first, the Eagles jersey is made ”primarily
of a mesh and interlock fabric”; and second, it contains at least some
ornamental surge stitching – both features found in the ’488 claimed
design. The district court also went on to acknowledge the three ma-
jor differences between the two designs that are enumerated above.
"Eagles" design
Taking all of those things together (the at least five design character-
istics that the claimed design shares with the Eagles jersey and three
design characteristics that differ from it), the district court painted a
clear picture of the claimed design. The district court did far more
than merely ask whether the Eagles jersey disclosed the general con-
cept of a pet jersey; it thoroughly considered the ”dstinctive visual ap-
D. DESIGN PATENT 861
pearances of the reference and the claimed design. Thus, the district
court did not err by failing to provide an express verbal description
of the claimed design; rather, it described the claimed design in the
context of comparing it to the prior art.
Nor did the district court err in finding that the design charac-
teristics of the ’488 design created basically the same overall visual
impression as the Eagles jersey prior art reference. As the district
court noted, both designs contain the same overall shape, similar
fabric, and ornamental surge stitching. That there are slight differ-
ences in the precise placement of the interlock fabric and the orna-
mental stitching does not defeat a claim of obviousness; if the designs
were identical, no obviousness analysis would be required. 1 Indeed,
we have permi ed prior art designs to serve as ”primary references”
when their differences are as great or greater than the differences in
this case. See Jore Corp. v. Kouvato, Inc. (finding prior art drill bit to
be a primary reference despite containing a smooth cylindrical shaft
rather than the grooved hexagonal shaft of the claimed design); In
re Nalbandian (finding tweezer design obvious in light of prior art
reference that contained vertical rather than horizontal fluting and
straight rather than curved pincers). 3
B. Secondary References
After concluding that the Eagles jersey could be a ”primary refer-
ence,” the district court determined that the V2 jersey and another
reference known as the ”Sporty K9” jersey were ”so related to the
1
This conclusion is not inconsistent with the law of this circuit on design patent "V2" design
infringement. In that context, we have often noted that design patents have ”almost Jore: 117 Fed. Appx. 761 (Fed. Cir.
no scope” beyond the precise images shown in the drawings. Mann. However, in 2005)
practice, our focus on the ”overall visual appearance” of a claimed design rather
Nalbandian: 661 F.2d 1214 (CCPA 1981)
than on individual features has led us to find products infringing despite differ-
ences in specific ornamental features. For example, in Crocs, Inc. v. International
Trade Commission, 598 F.3d 1294 (Fed. Cir. 2010), we concluded that all of the ac-
cused products infringed the asserted design patents despite the fact that two of
the infringing products (the Groovy DAWGSTM shoes and Big DAWGSTM shoes)
contained a wider shoe front with an additional row of holes, and another infring-
ing product (the Effervescent Waldies AT shoe) contained square holes on the top
of the shoe rather than round ones.
3
Alternatively, the district court could have relied on the V2 jersey as the pri-
mary reference. The only differences between the V2 jersey and the claimed de-
sign are: (1) that the V2 jersey does not contain an ”interlock” fabric panel; (2) it
has ”drop” sleeves while the claimed jersey has ”raglan-style” sleeves; and (3) the
V2 jersey lacks any ornamental surge stitching. A side-by-side comparison of the
two designs demonstrates that of those three differences, only the ornamental surge
stitching truly alters the ”overall visual appearance” of the design. Moreover, the
ornamental stitching on the claimed design is suggested by the seam lines on the
V2 jersey, further minimizing the difference in overall appearance. Thus, either
the ”Eagles” jersey or the V2 jersey could have served as a ”primary reference” for
purposes of the obviousness analysis.
862 CHAPTER 9. DESIGN
primary reference” that they could serve as ”secondary references”
that would motivate the skilled artisan to make the claimed design.
The district court found that both jerseys suggested the use of a
V-neck pa ern and non-mesh fabric on the side panels – the first two
differences described above. MRC argues that the district court erred
by failing to explain why a skilled artisan would have chosen to incor-
porate those features of the V2 and Sporty K9 jerseys with the Eagles
jersey.
We disagree. It is true that in order for secondary references to be
considered, there must be some suggestion in the prior art to modify
the basic design with features from the secondary references. How-
ever, the teachings of prior art designs may be combined only when
the designs are so related that the appearance of certain ornamental
features in one would suggest the application of those features to the
other. In other words, it is the mere similarity in appearance that it-
self provides the suggestion that one should apply certain features to
Borden: 90 F.3d 1570 (Fed. Cir. 1996) another design.
In re Borden discussed what is required for a reference to be con-
sidered sufficiently ”related” for that test to apply. There, we noted
that the secondary references were ”closely akin” to the claimed de-
sign, and relied heavily on the fact that ”the two missing design ele-
ments [were] not taken from unrelated references, but [were] found
in other dual-chamber containers.” Thus, those references could be
used ”to bridge the small gap between the [primary] container and
Borden’s claimed design.” So too, here, the secondary references that
the district court relied on were not furniture, or drapes, or dresses,
or even human football jerseys; they were football jerseys designed
to be worn by dogs. Moreover, as discussed above, the V2 could eas-
ily have served as a primary reference itself, so similar is its overall
visual appearance to that of the claimed design and the Eagles jersey.
Prior art barrel-shaped building We therefore agree that those references were ”so related” to the Ea-
gles jersey that the striking similarity in appearance across all three
jerseys would have motivated a skilled designer to combine features
from one with features of another.
With respect to the only remaining difference between the Eagles
jersey and the ’488 claimed design – the presence of additional or-
namental surge stitching running down the rear of the jersey – the
district court acknowledged that no prior art reference contained ex-
actly that same stitching on the rear of the jersey, but nevertheless
concluded that this was not a ”substantial” difference that created
a patentably distinct design, but rather was a ”de minimis change[]
which would be well within the skill of an ordinary designer in the
art.”
Barrel-shaped building design held ob- MRC argues that adding any ornamental feature to a primary ref-
vious in light of prior art erence that is not suggested by the prior art is, by definition, more
D. DESIGN PATENT 863
than de minimis. But our case law plainly contradicts that position;
on numerous occasions we have invalidated design patents despite
the inclusion of ornamental features that were entirely absent from
prior art designs. See, e.g., Nalbandian different shape of fluting on fin-
ger grips and different shape of pincers were de minimis differences
in design for tweezers); In re Cooper (affirming Board’s conclusion that Cooper: 480 F.2d 900 (CCPA 1973)
numerous changes to the design of a prior art building – including a
single rather than double door and the addition of windows – were
de minimis because the overall impression was still a building that
looked like a barrel).
Here, the Eagles jersey had already disclosed the use of ornamen-
tal surge stitching. The only additional step needed was to extend the
stitching down the sides of the rear of the jersey. Moreover, the V2
jersey plainly suggested the addition of vertical lines down the rear
of the jersey through the use of the seams between the two types of
fabric. We agree with the district court that adding ornamental surge
stitching on top of a preexisting seam was an insubstantial change
that would have been obvious to a skilled designer.6
4 Infringement: Similarity
The ”ordinary observer” analysis used to assess the similarity of de- "Judges and lawyers in general are
signs actually predates its use in copyright law, which borrowed the highly uncomfortable with images, yet
design patents force direct legal en-
term and some of the concepts from design patent law. Egyptian God-
gagement with images." Rebecca Tush-
dess sets out the modern test. Wing Shing shows the test in action net, The Eye Alone Is the Judge: Images
and deals with the problem of filtering out unoriginal elements of a and Design Patents, 19 J. Intell. Prop. L.
design; OddzOn deals with the related problem of filtering out unpro- 409 (2012)
tectable functional elements. L.A. Gear clears up a couple of concep-
tual points about how the analysis actually works.
Egyptian Goddess, Inc. v. Swisa, Inc.
543 F.3d 665 (Fed. Cir. 2008)
I
The starting point for any discussion of the law of design patents is
the Supreme Court’s decision in Gorham Co. v. White. That case in- Gorham: 81 U.S. 511 (1871)
volved a design patent for the handles of tablespoons and forks. In its
analysis of claim infringement, the Court stated that the test of iden-
tity of design ”must be sameness of appearance, and mere difference
of lines in the drawing or sketch ... or slight variances in configura-
tion... will not destroy the substantial identity.” Identity of appear-
6
To be clear, we do not intend to suggest that merely because one prior art ref-
erence used ornamental surge stitching, any use of such stitching would have been
a de minimis change. Rather, the addition of the surge stitching in this case was de
minimis because it merely followed the visual lines created by the seams of the V2
jersey; in other words, it served only to highlight a design feature that had already
existed in the V2 prior art jersey.
864 CHAPTER 9. DESIGN
ance, the Court explained, or ”sameness of effect upon the eye, is the
main test of substantial identity of design”; the two need not be the
same ”to the eye of an expert,” because if that were the test, ”there
never could be piracy of a patented design, for human ingenuity has
never yet produced a design, in all its details, exactly like another, so
like, that an expert could not distinguish them.”
The Gorham Court then set forth the test that has been cited in
many subsequent cases: ”If, in the eye of an ordinary observer, giv-
ing such a ention as a purchaser usually gives, two designs are sub-
stantially the same, if the resemblance is such as to deceive such an
observer, inducing him to purchase one supposing it to be the other,
the first one patented is infringed by the other.” In the case before
it, the Court concluded that ”whatever differences there may be be-
tween the plaintiffs’ design and those of the defendant in details of
ornament, they are still the same in general appearance and effect,
so much alike that in the market and with purchasers they would
pass for the same thing – so much alike that even persons in the trade
would be in danger of being deceived.”
Since the decision in Gorham, the test articulated by the Court in
that case has been referred to as the ”ordinary observer” test and has
been recognized by lower courts, including both of this court’s pre-
decessors, as the proper standard for determining design patent in-
Litton Systems: 728 F.2d 1423 (Fed. Cir. fringement. However, in a series of cases tracing their origins to Lit-
1984) ton Systems, Inc. v. Whirlpool Corp., this court has held that proof of
similarity under the ordinary observer test is not enough to establish
design patent infringement. Rather, the court has stated that the ac-
cused design must also appropriate the novelty of the claimed design
in order to be deemed infringing. The court in Li on Systems wrote
as follows:
For a design patent to be infringed, no ma er how similar
two items look, the accused device must appropriate the
novelty in the patented device which distinguishes it from
the prior art. That is, even though the court compares two
items through the eyes of the ordinary observer, it must
nevertheless, to find infringement, a ribute their similar-
ity to the novelty which distinguishes the patented device
from the prior art.
After identifying the combination of features in the design that it con-
sidered novel, the court in Li on Systems held that the accused design
had none of those features and therefore did not infringe.
In a number of cases decided after Li on Systems, this court has in-
terpreted the language quoted above to require that the test for design
patent infringement consider both the perspective of the ordinary ob-
server and the particular novelty in the claimed design.
D. DESIGN PATENT 865
The extent to which the point of novelty test has been a separate
test has not always been clear in this court’s case law. In cases decided
shortly after Li on, the court described the ordinary observer test and
the point of novelty test as ”conjunctive.” It has not been until much
more recently that this court has described the ordinary observer and
point of novelty tests as ”two distinct tests” and has stated that the
merger of the point of novelty test and the ordinary observer test is
legal error.
Regardless of the differences in the way it has been characterized,
the point of novelty test has proved reasonably easy to apply in sim-
ple cases in which the claimed design is based on a single prior art
reference and departs from that reference in a single respect. In such
cases, it is a simple ma er to identify the point of novelty and to de-
termine whether the accused design has appropriated the point of
novelty, as opposed to copying those aspects of the claimed design
that were already in the prior art. However, the point of novelty test
has proved more difficult to apply where the claimed design has nu-
merous features that can be considered points of novelty, or where
multiple prior art references are in issue and the claimed design con-
sists of a combination of features, each of which could be found in
one or more of the prior art designs. In particular, applying the point
of novelty test where multiple features and multiple prior art refer-
ences are in play has led to disagreement over whether combinations
of features, or the overall appearance of a design, can constitute the
point of novelty of the claimed design. In light of the questions sur-
rounding the status and application of the point of novelty test, we
use this case as a vehicle for reconsidering the place of the point of
novelty test in design patent law generally.
II
[The court reviewed previous caselaw in detail.]
As noted, this court has cited Li on Systems for the proposition
that the point of novelty test is separate from the ordinary observer
test and requires the patentee to point out the point of novelty in
the claimed design that has been appropriated by the accused design.
We think, however, that Li on Systems and the predecessor cases on
which it relied are more properly read as applying a version of the
ordinary observer test in which the ordinary observer is deemed to
view the differences between the patented design and the accused
product in the context of the prior art. When the differences between
the claimed and accused design are viewed in light of the prior art, the
a ention of the hypothetical ordinary observer will be drawn to those
aspects of the claimed design that differ from the prior art. And when
the claimed design is close to the prior art designs, small differences
between the accused design and the claimed design are likely to be
866 CHAPTER 9. DESIGN
important to the eye of the hypothetical ordinary observer. It was for
Whitman Saddle: 148 U.S. 674 (1893) that reason that the Supreme Court in Smith v. Whitman Saddle Co. fo-
cused on the one feature of the patented saddle design that departed
from the prior art – the sharp drop at the rear of the pommel. To an
observer familiar with the multitude of prior art saddle designs, in-
cluding the design incorporating the Granger pommel and the Jenifer
cantle, ”an addition frequently made,” the sharp drop at the rear of
the pommel would be important to the overall appearance of the de-
sign and would serve to distinguish the accused design, which did
not possess that feature, from the claimed design.
Applying the ordinary observer test with reference to prior art de-
signs also avoids some of the problems created by the separate point
of novelty test. One such problem is that the point of novelty test has
proved difficult to apply in cases in which there are several different
features that can be argued to be points of novelty in the claimed de-
sign. In such cases, the outcome of the case can turn on which of the
several candidate points of novelty the court or fact-finder focuses
on. The a ention of the court may therefore be focused on whether
the accused design has appropriated a single specified feature of the
claimed design, rather than on the proper inquiry, i.e., whether the
accused design has appropriated the claimed design as a whole.
In addition, the more novel the design, and the more points of nov-
elty that are identified, the more opportunities there are for a defen-
dant to argue that its design does not infringe because it does not copy
all of the points of novelty, even though it may copy most of them and
even though it may give the overall appearance of being identical to
the claimed design. In such cases, a test that asks how an ordinary ob-
server with knowledge of the prior art designs would view the differ-
ences between the claimed and accused designs is likely to produce
results more in line with the purposes of design patent protection.
This court has characterized the purpose of the point of novelty
test as being ”to focus on those aspects of a design which render the
design different from prior art designs.” That purpose can be equally
well served, however, by applying the ordinary observer test through
the eyes of an observer familiar with the prior art. If the accused de-
sign has copied a particular feature of the claimed design that de-
parts conspicuously from the prior art, the accused design is natu-
rally more likely to be regarded as deceptively similar to the claimed
design, and thus infringing. At the same time, unlike the point of
novelty test, the ordinary observer test does not present the risk of
assigning exaggerated importance to small differences between the
claimed and accused designs relating to an insignificant feature sim-
ply because that feature can be characterized as a point of novelty.
This approach also has the advantage of avoiding the debate over
the extent to which a combination of old design features can serve
D. DESIGN PATENT 867
as a point of novelty under the point of novelty test. An ordinary
observer, comparing the claimed and accused designs in light of the
prior art, will a ach importance to differences between the claimed
design and the prior art depending on the overall effect of those dif-
ferences on the design. If the claimed design consists of a combina-
tion of old features that creates an appearance deceptively similar to
the accused design, even to an observer familiar with similar prior
art designs, a finding of infringement would be justified. Otherwise,
infringement would not be found.
On the basis of the foregoing analysis, we hold that the ”point
of novelty” test should no longer be used in the analysis of a claim
of design patent infringement. In accordance with Gorham and sub-
sequent decisions, we hold that the ”ordinary observer” test should
be the sole test for determining whether a design patent has been in-
fringed.
In some instances, the claimed design and the accused design
will be sufficiently distinct that it will be clear without more that the
patentee has not met its burden of proving the two designs would
appear ”substantially the same” to the ordinary observer, as required
by Gorham. In other instances, when the claimed and accused designs
are not plainly dissimilar, resolution of the question whether the ordi-
nary observer would consider the two designs to be substantially the
same will benefit from a comparison of the claimed and accused de-
signs with the prior art, as in many of the cases discussed above and
in the case at bar. Where there are many examples of similar prior
art designs, as in a case such as Whitman Saddle, differences between
the claimed and accused designs that might not be noticeable in the
abstract can become significant to the hypothetical ordinary observer
who is conversant with the prior art.
We emphasize that although the approach we adopt will fre-
quently involve comparisons between the claimed design and the
prior art, it is not a test for determining validity, but is designed solely
as a test of infringement.
III
One of the issues raised by this court in its order granting en banc re-
view was whether trial courts should conduct claim construction in
design patent cases. While this court has held that trial courts have a
duty to conduct claim construction in design patent cases, as in util-
ity patent cases, the court has not prescribed any particular form that
the claim construction must take. To the contrary, the court has recog-
nized that design patents typically are claimed as shown in drawings,
and that claim construction is adapted accordingly. For that reason,
this court has not required that the trial court a empt to provide a de-
tailed verbal description of the claimed design, as is typically done in
868 CHAPTER 9. DESIGN
the case of utility patents. Given the recognized difficulties entailed
in trying to describe a design in words, the preferable course ordinar-
ily will be for a district court not to a empt to ”construe” a design
patent claim by providing a detailed verbal description of the claimed
design.
While it may be unwise to a empt a full description of the claimed
design, a court may find it helpful to point out, either for a jury or in
the case of a bench trial by way of describing the court’s own analy-
sis, various features of the claimed design as they relate to the accused
design and the prior art. Apart from a empting to provide a verbal
description of the design, a trial court can usefully guide the finder of
fact by addressing a number of other issues that bear on the scope of
the claim. Those include such ma ers as describing the role of partic-
ular conventions in design patent drafting, such as the role of broken
lines; assessing and describing the effect of any representations that
may have been made in the course of the prosecution history; and
distinguishing between those features of the claimed design that are
ornamental and those that are purely functional,
Wing Shing Products (BVI) Co. v. Sunbeam Products, Inc.
665 F. Supp. 2d 357 (S.D.N.Y. 2009)
Plaintiff Wing Shing owns United States Design Patent No. D348,585
for the ornamental design of a coffeemaker. Defendant Sunbeam is
a Delaware corporation that sells coffee makers under the MR. COF-
FEE brand. The subject of this action is a line of MR. COFFEE au-
tomatic coffee-making devices called the ”AR series,” which defen-
dants manufactured and sold between 2001 and 2006.
Sunbeam argues that the ‘585 patent and the primary accused de-
vice – the AR 10/12 – are so plainly dissimilar that, even without con-
sidering any prior art, no reasonable fact-finder could conclude that
they would appear ”substantially the same” to an ordinary observer.
The argument is not without merit. The two designs are pictured be-
low:
D. DESIGN PATENT 869
Two major differences between the designs are apparent. First,
they have different bases: the ‘585 has a ”bullnose” base – it is flat
with a rectangular cross section up to the tip, where the top and bot-
tom meet on a curve – while the AR 10/12 has a smooth base that
slopes gradually from the heating plate. The designs also have dra-
matically different tops: the ‘585’s is flat, whereas the AR’s has a
circular indent partially overhung by the lid to the water reservoir.
As Sunbeam points out, these differences come at ”focal points” in
the designs: the top and base are the most visually commanding fea-
tures of a coffeemaker, along perhaps with the brew basket. At least
one district court applying Egyptian Goddess has granted summary
judgment without considering prior art where two designs differed
primarily at one highly significant feature. Here, however, in the clut-
tered world of the drip-coffeemakers, it seems senseless to a empt to
determine whether the ”ordinary observer” would confuse two de-
signs without looking to the prior art for a point of reference. That ”a
purchaser of things of similar design,” as the ordinary observer has
been defined, could be deceived by the devices’ similarities seems un-
likely to the Court, but resolution of the inquiry would benefit from a
concrete guidepost. Thus, though the Court acknowledges manifest
differences in the overall appearance of the ‘585 and the AR 10/12, it
turns to the prior art for context.
Defendants identify numerous examples of prior art. The primary
piece is a coffeemaker called the ”Accel” that Sunbeam itself devel-
oped in the early 1990’s. The Accel and the ‘585 are pictured below:
870 CHAPTER 9. DESIGN
The two designs are quite similar. Each has a large, smooth brew
basket with a circular cross section that is partially encased by vertical
shafts connecting the brew basket to the base of the machine. Each
has a similarly shaped recess for the carafe. Both designs call to mind
the familiar white or black coffeemaker that graces most American
kitchens. As will be noted, differences exist, but on the whole the
claimed design when compared to the prior art bespeaks ”a field ...
crowded with many references relating to the design of the same type
of appliance.” Egyptian Goddess. Accordingly, the scope of protection
afforded the ‘585 patent falls in a narrow range.
As for dissimilarities, the base is surely the most prominent ob-
servable difference between the designs. In contrast to the ”bullnose”
on the ‘585, the Accel has an angular base with a trapezoidal cross sec-
tion. To the extent the devices have distinct overall appearances, their
different bases supply them. There are additional minor differences
– the top of the Accel is slightly crowned, while the ‘585’s is flat; and
the water reservoir on the ‘585 extends further around the circumfer-
D. DESIGN PATENT 871
ence of the brew basket – but these small details do not make nearly
the visual impression that the distinct bases do.
If the AR 10/12 (the accused design) had copied the ‘585’s bullnose
base – the one feature of the ‘585 that departs conspicuously from the
prior art as depicted in the Accel – an inference of infringement might
arise. Instead, the AR 10/12 has its own, unique base, as is all the more
apparent when viewed alongside both the ‘585 and the Accel:
872 CHAPTER 9. DESIGN
Because the AR 10/12 and the ‘585 differ at the very feature that
primarily distinguishes the ‘585 from the Accel, no ordinary observer
familiar with the Accel would be deceived into believing that the AR
10/12 and the ‘585 are the same. Indeed, since it is difficult to tell the
‘585 and the Accel apart without focusing on their bases, it would be
unreasonable to conclude that any observer capable of distinguishing
those two machines would confuse the AR 10/12 and the ’585, which
also have different bases. Additionally, the AR 10/12’s unique lid
configuration, which distances it from both the ‘585 and the prior art,
further solidifies the conclusion that no genuine issue of material fact
as to non-infringement exists here.
The Court remains mindful of the Federal Circuit’s admonition
to analyze the design as a whole and not engage in an element-by-
element comparison of the devices in question. Nonetheless, when
the prior art is used as a frame of reference, the tops and bases of
the devices in question dominate the overall visual impressions they
make. As Egyptian Goddess itself recognized, where a particular de-
sign element sharply distinguishes, against the context of the prior
art, the claimed design from the accused design, it is not error to fo-
cus on that element in the infringement analysis.
Plaintiff argues that summary judgment cannot be granted here
because, unlike in Egyptian Goddess, the AR 10/12 is closer to the
patented design than the prior art. Plaintiff contends that the AR
10/12 is closer to the ‘585 patent than the Accel because the ”body”
of the AR 10/12 – the region from ”the bo om of the lid to the top of
the base” – is ”substantially identical” to the body of the ‘585 design.
The Court does not find this argument persuasive. First, in focusing
on the ”body” of the design, plaintiff has chosen a frame of reference
that conveniently excludes the salient points of comparison – the top
and the base. Under this framework, the Accel itself could be found
to infringe, because to the layman’s eye, its ”body” is not readily dis-
tinguishable from the ‘585 patent. This is exactly the type of absurd
result that consideration of the prior art is meant to avoid. Secondly,
whether the accused device is ”closer” to the patented design than to
the prior art is not the controlling inquiry. Egyptian Goddess notes that
strong similarities between the accused design and the prior art are
an indication of non-infringement, but it does not require a mechan-
ical determination – which in this case of ”crowded art” would be
impractical – that the accused device is ”closer” to either the patent
or the prior art. Instead, Egyptian Goddess requires an assessment of
how the prior art will impact the ordinary observer’s perception of
the accused and claimed designs. Here, for example, though reason-
able jurors might disagree on whether the AR 10/12 is ”closer” to the
Accel or the ‘585 patent (it is different than both), no reasonable ju-
ror could dispute that an ordinary observer familiar with the Accel
D. DESIGN PATENT 873
would not believe the AR 10/12 to be the ”same as” the ‘585 patent.
OddzOn Products, Inc. v. Just Toys, Inc.
122 F.3d 1396 (Fed. Cir. 1997)
OddzOn is a toy and sporting goods company that sells the popu-
lar ”Vortex” tossing ball, a foam football-shaped ball with a tail and
fin structure. The Vortex ball is OddzOn’s commercial embodiment
of its design patent, U.S. Patent D346,001, which issued on April 12,
1994. Just Toys, Inc., another toy and sporting goods company, sells
a competing line of ”Ultra Pass” balls.
OddzOn argues that the district court erred in finding a lack of
infringement. We do not agree.
In Gorham, the claimed elements were purely ornamental, being
limited to the scroll work on the handle portion of flatware. If, on the
other hand, a design contains both functional and ornamental fea- '001 design
tures, the patentee must show that the perceived similarity is based
on the ornamental features of the design. The patentee must establish
that an ordinary person would be deceived by reason of the common
features in the claimed and accused designs which are ornamental.
In construing the claim of OddzOn’s patent, the district court care-
fully noted the ornamental features that produced the overall ”rocket-
like” appearance of the design. We agree with the district court’s
claim construction, which properly limits the scope of the patent to
its overall ornamental visual impression, rather than to the broader
Ultra Pass balls
general design concept of a rocket-like tossing ball.
OddzOn argues that the shape of a football with an arrow-like tail
is an ornamental feature because ”it is not required for a tossing ball.”
While OddzOn correctly states that there are many ways of designing
”tossing balls,” it is undisputed that the ball in question is specifically
designed to be thrown like a football, yet travel farther than a tradi-
tional foam football. It is the football shape combined with fins on a
tail that give the design these functional qualities. The tail and fins
on OddzOn’s design add stability in the same manner as do the tail
and fins found on darts or rockets. They are no less functional simply
because ‘tossing balls’ can be designed without them.
Because the accused products are clearly similar to OddzOn’s de-
sign in terms of their football shape and their tail and fins, it was
incumbent on OddzOn to submit evidence establishing that the or-
namental aspects of their football-with-tail-and-fin combination ac-
counted for the similarity perceived by the survey participants. None
of the evidence, when viewed in the light most favorable to OddzOn,
would support a jury verdict that the accused devices are similar to
the patented design with its football-shaped ball, slender tailshaft, Plaintiff's and defendant's designs
and three fins which seemingly protrude out of the football and gen- from Gorham
tly flare outwardly.
874 CHAPTER 9. DESIGN
OddzOn also submi ed evidence establishing that Just Toys’ balls
were returned to OddzOn by retailers on nineteen different occasions.
The district court excluded this evidence of alleged ”actual confusion”
on the ground of lack of relevance. We agree with OddzOn that the
exclusion of the ”actual confusion” evidence on relevance grounds
was an abuse of discretion. Given the low threshold for relevancy, it
is clear that the evidence was relevant. We find this error harmless,
however, because it does not change the result of OddzOn’s appeal.
L.A. Gear, Inc. v. Thom McAn Shoe Co.
988 F.2d 1117 (Fed. Cir. 1993)
Although design patent analysis requires comparison of the claimed
design with the accused articles, Melville has not argued that the
patent drawing differs from the embodiment in the L.A. Gear shoe,
and has offered no reason why the finding of substantial similarity
between the actual shoes was not applicable to the infringement anal-
ysis. When the patented design and the design of the article sold by
the patentee are substantially the same, it is not error to compare the
patentee’s and the accused articles directly; indeed, such comparison
may facilitate application of the Gorham criterion of whether an or-
dinary purchaser would be deceived into thinking that one were the
other.
Design patent infringement relates solely to the patented design,
and does not require proof of unfair competition in the marketplace,
or allow of avoidance of infringement by labelling.
5 Infringement: Prohibited Conduct
Patent Act
35 U.S.C. § 289
Whoever during the term of a patent for a design, without license
Additional remedy for infringement of of the owner, (1) applies the patented design, or any colorable imita-
design patent tion thereof, to any article of manufacture for the purpose of sale, or
(2) sells or exposes for sale any article of manufacture to which such
design or colorable imitation has been applied shall be liable to the
owner to the extent of his total profit, but not less than $250.
Nothing in this section shall prevent, lessen, or impeach any other
remedy which an owner of an infringed patent has under the provi-
sions of this title, but he shall not twice recover the profit made from
the infringement.
A few notes:
D. DESIGN PATENT 875
1. Section 289 provides additional remedies; the clear implication
is that the usual theories of direct, inducing, and contributory
patent infringement under § 271 are also available for design
patents. (See Milo & Gabby below.)
2. As with utility patents, there is no requirement of copying from
the plaintiff; design patents give a general right to exclude any-
one from using the patented design.
3. Design patents probably also borrow their rules on intent from
utility patent law: one can infringe without knowing of the
patent or intending to infringe it.
4. Both prongs of § 289 have explicitly commercial thresholds:
they turn on ”the purpose of sale” and on ”sells or exposes for
sale,” respectively.
5. § 289 is silent on questions of indirect liability. There is essen-
tially no caselaw on point.
Milo & Gabby, LLC v. Amazon.com
144 F. Supp. 3d 1251 (W.D. Wash.
In this action, Plaintiffs, Milo & Gabby, LLC and Karen Keller, sought 2015)
money damages from Defendant, Amazon.com, Inc., for its “offering
to sell” products that allegedly infringe certain design patents. Ama-
zon has stipulated that the allegedly infringing products are substan-
tially similar to the designs covered by the Milo & Gabby patents. How much does it matter that the
When a third-party seller wants to offer a new product for sale on plaintiff held design rather than utility
the Amazon.com platform, the third-party seller is responsible for patents? Not at all, or less than zero?
sending Amazon, via an automated file upload system, content re- The description of Amazon's opera-
lated to the new product, such as a product description, an image of tions is taken from an earlier unre-
ported opinion, available at 2015 WL
the product, and the product’s price. This content is used to automat- 4394673 (July 16, 2015).
ically generate a “product detail page” and, in some instances, to cre-
ate advertisements related to the new product. The third-party seller
is responsible for the uploaded content, and specifically represents
and warrants that it has the right to grant Amazon a license to use
all content, trademarks, and other materials provided by it. Under
Amazon’s Intellectual Property Violations Policy, third-party sellers
are responsible for ensuring that the products they offer for sale are
legal. With respect to images, third-party sellers agree that it is their
responsibility to “ensure that they have all the necessary rights for
the images they submit.” Third-party sellers may ship their products
to customers directly or, for a fee, use the “Fulfillment by Amazon”
(“FBA”) service. Third-party sellers who use Amazon’s FBA service
retain legal title to their products, while Amazon provides fulfillment
services for the products, such as storage and shipping.D547,587
While the Federal Circuit has most often addressed “offer to sell”
liability in the jurisdictional context, analyzing where the offer took U.S. Des. Pat. No. , "Cow-Shaped Pillow
place, this Court is not aware of any Federal Circuit case directly ad- Case"
876 CHAPTER 9. DESIGN
dressing the central issue before this Court—that is, who made the
alleged “offer to sell.” Thus, this Court acknowledges its difficulty in
reaching its conclusion in this ma er.
Nonetheless, based on the factual determinations made by the
Jury, the Court concludes that Amazon did not “offer to sell the al-
leged infringing products in this case. The Jury specifically found
the following:
• Amazon, through its website, did not communicate a descrip-
tion of the allegedly infringing products;
• Amazon, through its website, did not communicate the price at
which the allegedly infringing product could be purchased;
• Amazon did not provide the descriptions of the allegedly in-
fringing products;
• Amazon did not set the price at which the allegedly infringing
products could be purchased;
• Amazon did not set the quantity(ies) of the allegedly infringing
product(s) for sale on its website;
• Amazon, through its website, did not communicate that it was
willing to enter into a bargain to sell the allegedly infringing
products
Based on these findings, and having reviewed the evidence and tes-
timony presented in this ma er, the Court can only conclude that
Amazon did not offer to sell the alleged infringing products because
there was no manifestation of the willingness of Amazon to enter into
a bargain, so made as to justify another person in understanding that
If the third-party sellers are infringing his assent to that bargain is invited and will conclude it.
by both selling and offering to sell However, the Court is troubled by its conclusion and the impact
the infringing products, could Milo &
it may have on the many small retail sellers in circumstances similar
Gabby hold Amazon liable for contrib-
utory patent infringement or inducing to the Plaintiffs. There is no doubt that we now live in a time where
patent infringement under § 271(b) or the law lags behind technology. This case illustrates that point. Ama-
(c)? Does § 289 work against Amazon? zon’s representative, Christopher Poad, testified that Amazon com-
pletely changed the online market place by creating a platform where
any seller can offer products to Amazon’s customers. He further tes-
tified that Amazon allows sellers to offer their products with minimal
effort, by simply filling out an online information form, clicking on an
agreement to Amazon’s terms and conditions, and providing certain
banking information. Amazon then offers those sellers both payment
processing and fulfillment services, all with an asserted interest in
providing the best service to their customers. Mr. Poad also testified
that when customers cannot resolve problems with a particular seller,
Amazon will often step in to make things right. As a result, Amazon
enables and fosters a market place reaching millions of customers,
where anyone can sell anything, while at the same time taking li le
D. DESIGN PATENT 877
responsibility for “offering to sell” or “selling” the products.1 Indeed,
under the current case law, Amazon has been able to disavow itself
from any responsibility for “offering to sell” the products at all. The
purpose of adding ”offer[] to sell” to section 271(a) was to prevent
generating interest in a potential infringing product to the commer-
cial detriment of the rightful patentee. In this instance, the Court is
not convinced that such purpose has been fulfilled. However, that is
a subject which must be addressed to Congress and not the courts.
6 Defenses
Jazz Photo Corp. v. International Trade Com'n
264 F.3d 1094 (2001)
[Fuji Photo Film Co. sold disposable cameras.] The cameras are in-
tended by the patentee to be used only once. After the film is ex-
posed the photo-processor removes the film container by breaking
open a pre-weakened portion of the plastic casing which is accessed
by removal of the cardboard cover. Discarded LFFPs, subsequently
purchased and refurbished by the respondents, are the subject of this
action.
We conclude that for used cameras whose first sale was in the
United States with the patentee’s authorization, and for which the
respondents’ activities were limited to the steps of (1) removing the
cardboard cover, (2) cu ing open the plastic casing, (3) inserting new
film and a container to receive the film, (4) replacing the winding
wheel for certain cameras, (5) replacing the ba ery for flash cameras,
(6) rese ing the counter, (7) resealing the outer case, and (8) adding a
new cardboard cover, precedent requires that the described activities
be deemed to be permissible repair.
[Most of the opinion dealt with the repair/reconstruction distinc-
tion as it bore on the exhaustion of Fuji’s utility patents. But the court
also discussed exhaustion of Fuji’s design patents.]
The patented designs depict the exterior shape of the camera. The
exterior design is unaffected by the ”remanufacturing” process; it re-
mains in its original form in the outer box and plastic structure of the
camera. The respondents do not dispute that their cameras have the
same design as the original cameras; indeed, their argument is that
their cameras are the original cameras, repaired for reuse.
For original cameras that have been permissibly repaired, the prin-
ciple of exhaustion applies to the design patents as well as to the util-
ity patents. The design patent right, like all patent rights, is exhausted
by unrestricted first sale in the United States, and is not infringed by
the importation and resale of the repaired articles in their original Figure 1, U.S. Des. Pat. No. D345,750,
design. "Single use camera."
878 CHAPTER 9. DESIGN
Ralph D. Clifford & Richard J. Peltz-Steele
14 Chi.-Kent L. J. Intell. Prop. 553
(2015)
The Constitutionality of Design Patents
A federal case in 2013, closed upon voluntary dismissal without a
court opinion, nicely demonstrates the need for a fair use defense in
design patent law. Until the expiration of its 14-year term in April
2014, patent D423,184 protected this “pre el,” which we call the
Peace Pre el.
Plaintiff Leslie Friend of Pi sburgh, Pennsylvania, purchased the
design patent in the last year of its validity from the sister of the inven-
tor, Michael Lamont, who had passed away in 2007. Friend’s a or-
neys told media that Friend planned to start a pre el business. She
then discovered the design on offer from an online Massachuse s
pre el purveyor called Laurel Hill Foods. Laurel Hill sold pre el
chips in the shape of a peace sign in three flavors – ”everything,” sea
salt, and honey multigrain– which Laurel Hill bought from a Penn-
sylvania company, Keystone Pre els. Friend sued Laurel Hill and
Keystone.
Commentators on the Friend lawsuit suggested that Laurel Hill
pre el chips were not deep enough, in dimension, to run afoul of
the Peace Pre el design patent, in which figure 2 suggests a depth
of dough equivalent to the width depicted in figure 1. We disagree.
Employing design patent infringement analysis, the minimal novelty
requirement would be satisfied by the peace-sign shape of the pret-
zel dough, which is what differentiates the product from the tradi-
'184 design
tional pre el knot. That very novelty is the defining characteristic
of Laurel Hill pre el chips. The ordinary observer very well might
purchase the one, supposing it to be the other. So Friend had a strong
lawsuit on her hands, even while she never got her pre el business
off the ground, and the impetus for Lamont’s initial conception in
1999 was all but forgo en. Neither news reports nor the case record
explain why Friend voluntarily dismissed with prejudice just four
months after filing, but it is reasonable to speculate that a se lement
was reached.
The missing piece in the Friend lawsuit, and the unresolved prob-
lem presented by design patents, is fair use. Insofar as Friend was
a sympathetic plaintiff, Laurel Hill and Keystone were profiting off
the ingenuity of another and may have been expected fairly to pay
up. But change the defendant to a non-commercial user, and the case
takes on a different cast. Imagine a city rally for Ukrainian-Russian
peace at which a sponsoring ethnic bakery makes and gives away
peace-sign-shaped pre els. Or suppose that a German-American cit-
izens group decides to counter community angst over immigration
by uniting local persons of different backgrounds in Oktoberfest beer
gardens to dialog over homemade peace-sign-shaped pre els. Peace-
sign-shaped cookies, adorned or not with sugar crystals, or other ed-
D. DESIGN PATENT 879
ibles, also might run afoul of the design patent, as the controlling di-
agrams say nothing about the edible ingredients.
Farther afield, suppose shaped pre els become objets d’art. A
la er-day Andy Warhol or redirected Thomas Forsyth might create
a range of artwork meant to comment on the inequality of food dis-
tribution around the world, even employing bread dough as ironic
medium. The Peace Pre el might be just one entry in a series of
works, perhaps alongside a doughy stalk of wheat, a floury planet
earth, and a bready bas-relief of scythe-wielding farm workers.
We can complicate the case further if we trade out the peace sign
for a more controversial symbol. To choose a plaintiff that engen-
ders less sympathy, suppose that the multinational oil and gas com-
pany BP obtained a design patent on a distinctive container for motor
oil—let us borrow the double-sphere bo le in which POM Wonder-
ful sells fruit juice. After the BP oil spill, a protestor and artist creates
a sculpture depicting a blackened, oil-sodden pelican, surrounded
by upturned BP oil bo les, also blackened,but recognizable by their
shape. The artist might re-create (make) the bo les, or use discarded
bo les. The artist might auction off (sell) the sculpture and donate
the proceeds to an environmental advocacy group.
Critical training is hardly required to perceive the artist’s message
favoring environmental protection, or inversely, blaming BP for envi-
ronmental degradation. But the work plainly runs afoul of the design
patents, as the artist has made or used, and sold, the patented bo les.
The ordinary observer properly perceives the BP bo les; indeed, the
artist might be using BP bo les, which our auction winner buys be-
Hypothetical anti-BP protest sculpture
cause they are what they appear to be.
Without the structural safeguards and fair use defense that shape
copyrights to accommodate free speech, design patents exclude the
activists and artists from political advocacy and social commentary.
These functions lie at the heart of First Amendment protection, and
for good reason. If design patents can be perverted to freeze out
this speech, then the public policy goals of free speech395 are not
achieved.
It is unnecessary to craft a new strict scrutiny test under the First
Amendment because the copyright fair use doctrine provides a well-
drawn test designed already to accommodate the balance between
the IP Clause and the First Amendment. The deep similarity of copy-
rights and design patents, notwithstanding their semantic differences
and historical divergence, further suggest the appropriateness of fair
use to design patents with only slight adaptations that can be done
as a ma er of constitutional law, without modification to statutory
patent law
Eames Chair Problem, Re-revisited
880 CHAPTER 9. DESIGN
Look again at the Eames Lounge Chair. Could its design be effectivey
protected with a design patent?
E Sui Generis Regimes
There are two sui generis design-protection regimes codified in the
Copyright Act. Neither has been extensively used. Compare them to
copyright, to design patent, and to each other.
1 Semiconductor Masks
Under the Semiconductor Chip Protection Act of 1984, the ”mask
works” used to create computer chips are protected by a special sui
17 U.S.C. ch. 9 generis IP regime. It is codified in the Copyright Act and borrows ex-
tensively from copyright law in some respects, while relaxing the ap-
plication of the useful article rule. As will be seen, the SCPA also bor-
rows from trade secret law. Does the resulting hybrid make sense?
70 Minn. L. Rev. 471 (1985)
Pamela Samuelson
Creating a New Kind of Intellectual Property: Applying the Lessons of the
Chip Law to Computer Programs
Semiconductor chip products are most frequently manufactured by
a process known as ”photolithography” or ”masking.” After the two
and three dimensional features of shape and configuration of a chip
have been determined, the layout (or ”topography”) of the chip can
be fixed in pictorial form – a so-called ”composite” drawing of the var-
ious layers of the chip, shown in different colors on a very large sheet
of paper. The same information can be recorded in digital form, by
storing all the relevant coordinates of points in the composite draw-
ing. This information is then used to generate a series of ”masks,”
which are stencils used to manufacture chips. Chips are manufac-
tured by etching material (or otherwise removing it) away from semi-
conductor wafers and depositing material (or otherwise placing it) on
the wafers. The etching and depositing processes configure the chips
to the pa erns comprising the mask. The masks are used to control
the etching and depositing processes.
Congress generally allows utilitarian works to be freely copied
if they do not meet the patent standards of novelty and invention.
For chip designs, however, Congress made an exception. The House
Commi ee [debating the Semiconductor Chip Protection Act of 1984]
perceived the chip to be ”at the vortex” of the new information soci-
ety. ”More than perhaps any other invention, the semiconductor chip
has brought us into the information age.” Laying out the pa ern of
circuits so that hundreds of thousands or even a million transistors
can be fit efficiently and economically onto the surface of a chip is ”a
E. SUI GENERIS REGIMES 881
fine art and also a costly one.” The period of time from the initial lay-
out of the design to the successful manufacture of the first chip can
”take the innovating chip firm years, consume thousands of hours of
engineer and technician time, and cost millions of dollars. The devel-
opment costs for a single new chip can reach $100 million.” By com-
parison, copying a chip’s design is very cheap. In several months,
for a cost of less than $50,000, a pirate firm can duplicate the mask
work of an innovator. This piracy was perceived to be a clear threat,
not only to the health of the U.S. semiconductor industry, but to the
growth of American information industries.
The major argument in favor of sui generis protection for chip de-
signs, as reflected in the House Report, was actually an anti-copyright
argument. Mask works and chip products were not subject ma ers
that historically had been regarded as copyrightable, and the House
Commi ee believed there were sound reasons for refusing to extend
copyright protection to include them. The Register of Copyrights had
refused to register mask works and chip products because they were
”utilitarian” in a copyright sense; that is, they had a function beyond
merely portraying an appearance or conveying information.
Although copyright sometimes had been extended to artistic fea-
tures of utilitarian works, such features were only protected by copy-
right when they could be identified separately from and were capable
of existing independently of the utilitarian aspects of the work. In
the case of chips and chip masks, this ”separate-identification-and-
independent-existence” test could not be met. That is, a copyright
for a chip product or chip mask would have to be a copyright on its
functional features.
The House Commi ee recognized that mask works were in some
respects similar to maps, technical drawings, photographs, and au-
diovisual works, all clearly copyrightable. The Commi ee described
these similarities as ”superficial,” however, and found mask works to
be ”in fact very dissimilar in function and nature of creativity” from
these other items. Mask works were to be protected because of
the technical and creative skill employed in laying out or
designing electronic circuitry. Mask works have no intrin-
sic aesthetic purpose. Even if the layouts convey informa-
tion, that is not their sole or main purpose: their primary
purpose is to be used in the manufacture of a useful article
– semiconductor chip products.
This is a mask for the Intel 4004, re-
leased in 1971 -- hundreds of times sim-
pler than the state of the art in 1984,
and millions of times simpler than cur-
rent chips.
882 CHAPTER 9. DESIGN
Kal Raustiala & Christopher Sprigman
92 Va. L. Rev. 1687 (2006)
The Piracy Paradox, Innovation and Intellectual Property in Fashion
Design
In 1984, Congress adopted the Semiconductor Chip Protection Act.
The SCPA protects ”mask works,” which are the stencils used to con-
trol the process of etching onto silicon wafers the circuitry that make
up a microprocessor.
Under the SCPA, a mask work is protected if it is fixed in a semi-
conductor chip and is original. The SCPA requires that mask works
either be registered with the Copyright Office or be commercially ex-
ploited as a condition of protection.
Once an owner complies with the SCPA’s formalities, he pos-
sesses the exclusive right for a period of ten years ”to reproduce the
mask work by optical, electronic, or any other means.” As in copy-
right law, the exclusive right of reproduction granted is not limited
to identical copies. The owner of a mask work protected by the SCPA
has the right to enjoin any work that is ”substantially similar” to the
protected work. The SCPA also gives the owner an exclusive right for
the same ten-year period ”to import or distribute” a chip for which
the protected mask work has been used in production.
Altera Corp. v. Clear Logic, Inc.
424 F.3d 1079 (9th Cir. 2005)
This case involves an infringement action by Altera against Clear
Logic under the Semiconductor Chip Protection Act of 1984. A
jury found for Altera on all claims and a judgment was entered for
E. SUI GENERIS REGIMES 883
$30.6 million in damages, $5.4 million in prejudgment interest and
$394,791.68 in costs. The district court judge also entered an injunc-
tion preventing Clear Logic from engaging in those activities against
Altera. We affirm the judgment and the injunction. This is one of a very small handful of re-
ported cases on the SCPA.
I. O
Altera and Clear Logic are competitors in the semiconductor industry.
Altera manufactures programmable logic devices (”PLDs”), which
are chips that can be programmed to perform various logic functions.
A customer uses Altera’s MAX+PLUS II software to program the PLD
to perform the desired function. The software helps to route the func-
tions through the thousands of transistors that make up the PLD, ide-
ally achieving the maximum functionality for the particular function
desired. Because the PLD can be programmed and reprogrammed,
the customer, working with Altera, can continue to work with the
PLD and the software until the PLD meets the customer’s exact needs.
This process can take months.
Clear Logic manufactures a different type of chip: Application-
Specific Integrated Circuits (”ASICs”). These chips are designed to
perform one specific function and cannot be programmed by the cus-
tomer. They use less power, are smaller and, for a customer with a
large order, are often cheaper. Customers will sometimes start with
PLDs and switch to ASICs once they have determined exactly what
they need the chips to do. Traditionally, a company that converts
from PLDs to ASICs must again start from a high level of descrip-
tion and work toward the end product, the ASIC. This can take a few
months and there is a substantial risk that even after the initial at-
tempt, the first chip will not work and more time and money will
have to be invested in perfecting the product.
Clear Logic works from a different business model. When cus-
tomers program Altera devices, using the Altera software, a file called
a bitstream is generated. Clear Logic asks customers to send the bit-
stream to Clear Logic, and Clear Logic uses the bitstream to create
an ASIC for the customer. Clear Logic only produces ASICs that are
compatible with Altera chips. The laser process Clear Logic uses to
create chips with the bitstream allows for a turnaround time of just a
few weeks, and rarely produces an incompatible chip.
II. T S C D P
S C P A
Altera asserts that the placement of groupings of transistors on the
chip was copied, and does not specifically address the layout of the
transistors within those groupings. Clear Logic argues that the place-
ment of the groupings is a system or an idea and is not entitled to
protection under the SCPA. We reject this contention; the boundaries
884 CHAPTER 9. DESIGN
and organization of these groupings are more than conceptual.
Commentators have suggested analyzing the levels of abstraction
in the production of a computer program or a mask work to identify
the distinction between ideas and expression, and the degree of sim-
ilarity, in these formats. Under this approach, we identify the broad
idea behind the design and assess each successive step in the design
process, identifying the point at which the idea becomes protectable
expression.
In considering the chip design process, we recognize, as do the
parties, that with each step, the ideas become more concrete until
they are finally expressed in the layout of the transistors in the mask
work. The customer’s idea is at the highest level of abstraction, and
the schematics and floor plans convey more concrete ideas, 1086*1086
designating how the chip may be structured or organized. These
drawings are preliminary sketches that would not be protected un-
der traditional copyright principles. It is not until the level of the
mask work, the piece of the process that Congress chose to protect,
that there is an expression of that idea. Those ideas that are physi-
cally expressed in the mask work are subject to protection under the
SCPA.
The district court correctly determined that the organization of the
groupings is physically a part of the mask work. The mask work is
structured according to the groupings that Altera highlighted and the
district court correctly allowed the jury to determine whether those
similarities constituted an infringement of the act. Unlike the out-
line of an article or the chapters in a book, these groupings physically
dictate where certain functions will occur on a chip and describe the
interaction of parts of the chip. The placement of logic groupings in a
mask work is not an abstract concept; it is embodied in the chip and
affects the chip’s performance and efficiency as well as the chip’s tim-
ing. It is the province of the jury to determine whether those aspects
of the mask work are material, and whether the similarity between
the mask works is substantial.
III. R E
The SCPA specifically protects the right of
17 U.S.C. S 906 (1) a person to reproduce the mask work solely for the purpose of
teaching, analyzing, or evaluating the concepts or techniques
embodied in the mask work or the circuitry, logic flow, or orga-
nization of components used in the mask work; or
(2) a person who performs the analysis or evaluation described in
paragraph (1) to incorporate the results of such conduct in an
original mask work which is made to be distributed.
This reverse engineering provision explicitly protects industry prac-
E. SUI GENERIS REGIMES 885
tices and encourages innovation. The second mask work must not
be substantially identical to the original, and as long as there is evi-
dence of substantial toil and investment in creating the second mask
work, rather than mere plagiarism, the second chip will not infringe
the original chip, even if the layout of the two chips is, in substantial
part, similar.
The legislative history, relying on the testimony of industry repre-
sentatives, indicated that most cases would probably present clear cut
evidence of direct copying or of innovation and that in cases falling
into the gray area between outright copying and complete originality,
the courts should consider the presence or absence of a paper trail by
the second firm. A firm that simply copied another firm’s mask work
would have no evidence of its own investment and labor, whereas
a legitimate reverse engineering job would require a trail of paper
work documenting the analysis of the original chip as well as the de-
velopment of an independent design. In Brooktree, the Federal Circuit
analyzed the defendant’s paper trail, but held that ”the sheer volume
of paper” was not dispositive.
The SCPA’s reverse engineering provision allows copying the en-
tire mask work. It does not distinguish between the protectable and
non-protectable elements of the chip as long as the copying is for the
purpose of teaching, evaluating, or analyzing the chip. Although the
product created from that analysis must be original, the process of
studying the chip is not limited to copying ideas or concepts. The
district court’s instructions initially define ”legitimate reverse engi-
neering” to allow copying and analyzing only ”non-protectable con-
cepts or techniques.” This is an incorrect statement of the law. [The
incorrect statement was held not to have been prejudicial.]
2 Vessel Hulls
The Vessel Hull Design Protection Act of 1988 is also codified in the
Copyright Act. Like the SCPA, the VHDPA borrows from copyright
law while also easing the useful article rule. Pay a ention to how
closely Maverick Boat hews to copyright – or doesn’t.
Bonito Boats, Inc. v. Thunder Craft Boats, Inc.
489 U.S. 141 (1989)
We must decide today what limits the operation of the federal patent
system places on the States’ ability to offer substantial protection to
utilitarian and design ideas which the patent laws leave otherwise
unprotected.
In September 1976, petitioner Bonito Boats developed a hull de-
sign for a fiberglass recreational boat which it marketed under the
trade name Bonito Boat Model 5VBR. Designing the boat hull re-
quired substantial effort on the part of Bonito. A set of engineering
886 CHAPTER 9. DESIGN
drawings was prepared, from which a hardwood model was created.
The hardwood model was then sprayed with fiberglass to create a
mold, which then served to produce the finished fiberglass boats for
sale. The 5VBR was placed on the market sometime in September
1976.
In May 1983, after the Bonito 5VBR had been available to the pub-
lic for over six years, the Florida Legislature enacted Fla. Stat. §
559.94. The statute makes ”[i]t ... unlawful for any person to use the
"My vast erudition on the subject al- direct molding process to duplicate for the purpose of sale any man-
lows me to formulate a highly techni- ufactured vessel hull or component part of a vessel made by another
cal and scrupulously accurate descrip-
without the wri en permission of that other person.” The statute also
tion of plug molding: Take a boat, turn
it upside-down, and spread Silly Putty makes it unlawful for a person to ”knowingly sell a vessel hull or com-
all over it; after you remove the goop, ponent part of a vessel duplicated in violation of subsection (2).”
then turn it right-side-up, and pour sil- On December 21, 1984, Bonito filed this action in the Circuit Court
icone in the resulting space. Now, you of Orange County, Florida. The complaint alleged that Thunder Craft
have a new boat that is identical to the
Boats had violated the Florida statute by using the direct molding pro-
old boat. That is 'plug molding,' also
known as 'hull splashing.'" David Nim- cess to duplicate the Bonito 5VBR fiberglass hull, and had knowingly
mer, Copyright and the Fall Line31 Car- sold such duplicates in violation of the Florida statute.
dozo Arts & Ent. L.J. 803 (2013) It is readily apparent that the Florida statute does not operate to
prohibit ”unfair competition” in the usual sense that the term is un-
derstood. [For the most part] the common-law tort of unfair competi-
tion has been limited to protection against copying of nonfunctional
aspects of consumer products which have acquired secondary mean-
ing such that they operate as a designation of source. In contrast to
the operation of unfair competition law, the Florida statute is aimed
directly at preventing the exploitation of the design and utilitarian
conceptions embodied in the product itself.
In this case, the Bonito 5VBR fiberglass hull has been freely ex-
posed to the public for a period in excess of six years. For purposes
of federal law, it stands in the same stead as an item for which a patent
has expired or been denied: it is unpatented and unpatentable. Yet,
the Florida statute allows petitioner to reassert a substantial property
right in the idea, thereby constricting the spectrum of useful public
knowledge.
That the Florida statute does not remove all means of reproduc-
tion and sale does not eliminate the conflict with the federal scheme.
In essence, the Florida law prohibits the entire public from engaging
in a form of reverse engineering of a product in the public domain.
This is clearly one of the rights vested in the federal patent holder,
but has never been a part of state protection under the law of unfair
competition or trade secrets.
It is for Congress to determine if the present system of design and
utility patents is ineffectual in promoting the useful arts in the con-
text of industrial design. By offering patent-like protection for ideas
deemed unprotected under the present federal scheme, the Florida
E. SUI GENERIS REGIMES 887
statute conflicts with the strong federal policy favoring free compe-
tition in ideas which do not merit patent protection. We therefore
agree with the majority of the Florida Supreme Court that the Florida
statute is preempted by the Supremacy Clause, and the judgment of
that court is hereby affirmed.
Copyright Act
(a) Designs Protected. – 17 U.S.C. S 1301
(1) In general. – The designer or other owner of an original de- Designs protected
sign of a useful article which makes the article a ractive or Why am I including such extensive ex-
distinctive in appearance to the purchasing or using public cerpts from a rarely used sui generis
may secure the protection provided by this chapter upon statute for boat designs? Wrong
question! The right question is why
complying with and subject to this chapter. Congress drafted such a detailed and
(2) Vessel features. – The design of a vessel hull, deck, or com- extensive sui generis statute for boat de-
bination of a hull and deck, including a plug or mold, is signs. Pay close attention to the defini-
tions.
subject to protection under this chapter, notwithstanding
section 1302(4).
(b) Definitions. – For the purpose of this chapter, the following
terms have the following meanings:
(1) A design is ”original” if it is the result of the designer’s cre-
ative endeavor that provides a distinguishable variation
over prior work pertaining to similar articles which is more
than merely trivial and has not been copied from another
source.
(2) A ”useful article” is a vessel hull or deck, including a plug
or mold, which in normal use has an intrinsic utilitarian
function that is not merely to portray the appearance of
the article or to convey information. An article which nor-
mally is part of a useful article shall be deemed to be a use-
ful article.
(3) A ”vessel” is a craft –
(A) that is designed and capable of independently steering
a course on or through water through its own means
of propulsion; and
(B) that is designed and capable of carrying and transport-
ing one or more passengers.
Protection under this chapter shall not be available for a design that 17 U.S.C S 1302
is – Designs not subject to protection
(1) not original;
(2) staple or commonplace, such as a standard geometric figure, a
888 CHAPTER 9. DESIGN
familiar symbol, an emblem, or a motif, or another shape, pat-
tern, or configuration which has become standard, common,
prevalent, or ordinary;
(3) different from a design excluded by paragraph (2) only in in-
significant details or in elements which are variants commonly
used in the relevant trades;
(4) dictated solely by a utilitarian function of the article that em-
bodies it; or
(5) embodied in a useful article that was made public by the de-
signer or owner in the United States or a foreign country more
than 2 years before the date of the application for registration
under this chapter.
17 U.S.C § 1303
Protection for a design under this chapter shall be available notwith-
Revisions, adaptations, and rearrange- standing the employment in the design of subject ma er excluded
ments from protection under section 1302 if the design is a substantial revi-
sion, adaptation, or rearrangement of such subject ma er. Such pro-
tection shall be independent of any subsisting protection in subject
ma er employed in the design, and shall not be construed as secur-
ing any right to subject ma er excluded from protection under this
chapter or as extending any subsisting protection under this chapter.
17 U.S.C § 1304
The protection provided for a design under this chapter shall com-
Commencement of protection mence upon the earlier of the date of publication of the registration
under section 1313(a) or the date the design is first made public as
defined by section 1310(b).
17 U.S.C § 1305
(a) In General. – Subject to subsection (b), the protection provided
Term of protection under this chapter for a design shall continue for a term of 10
years beginning on the date of the commencement of protection
under section 1304.
(b) Expiration. – All terms of protection provided in this section
shall run to the end of the calendar year in which they would
otherwise expire.
17 U.S.C § 1308
The owner of a design protected under this chapter has the exclusive
Exclusive rights right to –
(1) make, have made, or import, for sale or for use in trade, any
useful article embodying that design; and
(2) sell or distribute for sale or for use in trade any useful article
embodying that design.
17 U.S.C § 1309
Infringement
E. SUI GENERIS REGIMES 889
(b) Acts of Sellers and Distributors. – A seller or distributor of an
infringing article who did not make or import the article shall
be deemed to have infringed on a design protected under this
chapter only if that person –
(1) induced or acted in collusion with a manufacturer to make,
or an importer to import such article, except that merely
purchasing or giving an order to purchase such article in
the ordinary course of business shall not of itself constitute
such inducement or collusion; or
(2) refused or failed, upon the request of the owner of the de-
sign, to make a prompt and full disclosure of that person’s
source of such article, and that person orders or reorders
such article after receiving notice by registered or certified
mail of the protection subsisting in the design.
(c) Acts Without Knowledge. – It shall not be infringement under
this section to make, have made, import, sell, or distribute, any
article embodying a design which was created without knowl-
edge that a design was protected under this chapter and was
copied from such protected design.
(d) Acts in Ordinary Course of Business. – A person who incorpo-
rates into that person’s product of manufacture an infringing
article acquired from others in the ordinary course of business,
or who, without knowledge of the protected design embodied
in an infringing article, makes or processes the infringing article
for the account of another person in the ordinary course of busi-
ness, shall not be deemed to have infringed the rights in that
design under this chapter except under a condition contained
in paragraph (1) or (2) of subsection (b). Accepting an order or
reorder from the source of the infringing article shall be deemed
ordering or reordering within the meaning of subsection (b)(2).
(e) Infringing Article Defined. – As used in this section, an “infring-
ing article” is any article the design of which has been copied
from a design protected under this chapter, without the consent
of the owner of the protected design. An infringing article is not
an illustration or picture of a protected design in an advertise-
ment, book, periodical, newspaper, photograph, broadcast, mo-
tion picture, or similar medium. A design shall not be deemed
to have been copied from a protected design if it is original and
not substantially similar in appearance to a protected design.
(g) Reproduction for Teaching or Analysis. – It is not an infringement
of the exclusive rights of a design owner for a person to repro-
duce the design in a useful article or in any other form solely for
the purpose of teaching, analyzing, or evaluating the appear-
890 CHAPTER 9. DESIGN
ance, concepts, or techniques embodied in the design, or the
function of the useful article embodying the design.
17 U.S.C § 1310
(a)Time Limit for Application for Registration. – Protection under this
Application for registration chapter shall be lost if application for registration of the design
is not made within 2 years after the date on which the design is
first made public.
(h) Pictorial Representation of Design. – The application for registra-
tion shall be accompanied by two copies of a drawing or other
pictorial representation of the useful article embodying the de-
sign, having one or more views, adequate to show the design,
in a form and style suitable for reproduction, which shall be
deemed a part of the application.
(a) Determination of Registrability of Design; Registration. – Upon the
filing of an application for registration in proper form under sec-
Diagram from vessel hull registration
DVH0507 (2012) tion 1310, and upon payment of the fee prescribed under section
1316, the Administrator shall determine whether or not the ap-
plication relates to a design which on its face appears to be sub-
17 U.S. Code § 1313 ject to protection under this chapter, and, if so, the Register shall
Examination of application and issue register the design. Registration under this subsection shall be
or refusal of registration announced by publication. The date of registration shall be the
date of publication.
17 U.S.C § 1329
The issuance of a design patent for an original design for an article
Relation to design patent law of manufacture shall terminate any protection of the original design
under this chapter.
Maverick Boat Co., Inc. v. American Marine Holdings, Inc.
418 F.3d 1186 (11th Cir. 2005)
Maverick, AMH, and Blazer are manufacturers of recreational boats,
and each company manufactures a boat known as the “bay boat.”
Maverick introduced its Pathfinder 2200 V–Hull bay boat at its July
1998 dealer meeting, and it sold more than 30 of these boats that same
This is the only reported case alleging year. Following this initial sale, however, Maverick became aware
infringement under the VHDPA. of problems with the boat’s tooling. Specifically, Maverick became
aware of customer complaints about the “sheer line” (the intersection
of the hull sides with the top of the boat’s deck) on the boat. Paul Ellig,
who was primarily responsible for correcting the sheer line, testified
at trial that the irregularities in the boat’s lines were not intended to
be present in the original boat and, thus, were the result of mistakes.
Because the sheer line was off, other boat lines, including the
“style line” (the offset made on the hull sides to establish a unique
Pathfinder 2200 TRS (updated version graphic form or signature of the model or brand name) and the “chine
of design at issue) line” (the line formed by the intersection of the hull lines with the
E. SUI GENERIS REGIMES 891
bo om of the boat), were also off. Ellig testified that once an element
of a boat is changed because of an irregularity, other aspects of the
boat are also affected. Maverick corrected these lines in a “revised
design.” However, at trial, Maverick did not introduce any records
to show the changes that it made to any of the boat’s lines: Maver-
ick did not introduce any internal memoranda, drawings, correspon-
dence, or documents of any kind that refer to the “revised design.”
For a period of time after the original model had been retooled,
both the “original design” and the “revised design” were in produc-
tion. On or about May 4, 1999, Maverick began shipping boats with
the revised design. The name and model number of the boat re-
mained the same, and Maverick’s advertisements never mentioned
the design change. Also, during the time that Maverick sold both
the “original design” and the “revised design,” it never informed its
dealers or the public which design they were obtaining.
On February 27, 2001, Maverick submi ed the application for
Registration Number DVH 0049 to the United States Copyright Of-
fice. Maverick admi ed in its pleadings that pursuant to 17 U.S.C. §
1302(5), DVH 0049 is invalid because it was for the “original design,”
which was made public more than two years prior to the date of its
application.
On April 10, 2001, Maverick submi ed a second application, for
the Pathfinder 2200 V–Hull, Registration Number DVH 0056, to the
United States Copyright Office. The registration states that the de-
sign is a “new improved version of earlier design. Revised original
hull (forward) shape, style line location.” Leffew photographed a
Pathfinder 2200 V–Hull and submi ed the photographs with the ap-
plication for DVH 0056. But, Leffew did not know the model year of
the boat depicted in the photographs that he submi ed. In fact, when
Leffew photographed the boats for each application, he did not know
Photograph of Pathfinder 2200 from
whether he was photographing a boat with an original or revised de- registration no. DVH 0056
sign.
During the summer of 2001, Maverick learned that AMH was mar-
keting a boat with a vessel hull that appeared to have been copied
from a Pathfinder 2200 V–Hull. Maverick asked Lee Dana, an archi-
tect and small craft designer, to analyze the respective hull designs
and make a determination as to their similarities. On December 3,
2001, Dana sent a le er to Maverick stating, in part, that “it is very
probable that the mold for the 22 Pro–Line was ‘back cast’ from a 22
Pathfinder Hull.” [Similarly for Blazer’s 2220 bay boat.]
A. Cancellation of DVH 0056
Maverick argued in the district court (as it does here) that its revised
design is a substantial revision of the original design and, thus, that
it is entitled to protection pursuant to 17 U.S.C. § 1303. The district Blazer 2200
892 CHAPTER 9. DESIGN
court disagreed and specifically found that the design Maverick reg-
istered in DVH 0056 was not a “substantial revision, adaptation, or
rearrangement” of the original Pathfinder 2200 V–Hull design as re-
quired by 17 U.S.C. § 1303.
The district court correctly determined that the changes made to
the original design were merely corrections to a mistake, and not sub-
stantial. AMH and Blazer’s expert witness, Augusto Villalon, testi-
fied that the changes made to the original design were minimal (such
as straightening the sheer line) and that they did not affect the de-
sign of the boat. Maverick did not proffer any expert testimony as
to the differences between the two boats. In fact, Maverick did not
a empt to secure an original design to compare it with a revised de-
sign, and it did not point to any specific differences between the two
boats – either apparent to the naked eye or based on specific measure-
ments – that would demonstrate the extent of the differences in the
two designs. Moreover, Maverick failed to introduce any records to
reflect the actual changes between the original design and the alleged
revised design; there was no change made to the name of the boat or
the model number of the boat; the two boats were held out to the pub-
lic as the same boat; nothing in Maverick’s advertising indicated that
there was an original and a revised design; and Maverick sold both
versions simultaneously without any representation that one was an
original design and the other a revised design.
We conclude that the district court was correct in finding that the
changes made by Maverick to the original Pathfinder 2200 V–Hull de-
sign were merely corrections to a mistake. In fact, the correction of an
unintended problem does not create a new design, but merely makes
the original design what it was always intended to be. Accordingly,
we agree with the district court’s finding that Maverick is not entitled
to the protection offered by the VHDPA for DVH 0056.
B. AMH and Blazer’s Infringement
Because we agree with the district court that Maverick’s Pathfinder
2200 V–Hull design is not protected under the VHDPA, we need not
address Maverick’s infringement claim. The district court, however,
addressed it for the sake of argument; so, we will discuss it briefly.
[The district court had wri en:
There is no dispute that AMH and Blazer used the
Pathfinder 2200 V–Hull as a starting point for the devel-
opment of the allegedly infringing boat. However, this
fact alone does not constitute infringement. There are ten
differences between the Pathfinder 2200 V–Hull and the
Pro–Line 22. Mr. Deal himself testified that there are a
number of differences between the decks of the Pathfinder
F. FASHION 893
2200 V–Hull and the Pro–Line 22. These differences in- Congress responded to Maverick Boat
by amending the VHDPA to clarify that
clude: the cockpit sole was raised by two inches at the aft
it applies to "a vessel hull or deck."
end, an anchor compartment was added, the aft platform Where does that leave the test for in-
was raised and its compartments redesigned, and the en- fringement under the VHDPA?
tire deck surface was covered with a special non-skid ma-
terial. In addition to the differences in the deck, the hull
of the Pro–Line 22 is six inches longer than the hull of the
Pathfinder 2200 V–Hull. The changes AMH made in get-
ting from the Pathfinder 2200 V–Hull as its starting point
to the Pro–Line 22 demonstrate that the Pro–Line 22 is an
original and is “not substantially similar in appearance”
to the allegedly protected design of the Pathfinder 2200
V–Hull, particularly where the protected design includes
the deck of the vessel.]
After reviewing the record, we cannot say that those findings are
clearly erroneous. In fact, the evidence at trial clearly showed that the
differences between the hulls of AMH’s Pro–Line 22 and Maverick’s
Pathfinder 2200 V–Hull were substantially greater than the minimal
differences between the designs in Maverick’s invalid DVH 0049 and
DVH 0056. Thus, at a minimum, Maverick cannot credibly claim that
DVH 0056 is valid over the admi edly invalid DVH 0049, while at the
same time claiming that AMH’s accused boat (which is substantially
different) is an infringement of DVH 0056.
F Fashion
Fashion offers a fascinating case study in the limits of the various tech-
niques for protecting designs. This section finishes with materials on
a proposed fashion-specific legal regime. Does it solves the recurring
problems of design law, or just create new ones?
1 Copyright
Jack Adelman, Inc. v. Sonners & Gordon, Inc.
112 F. Supp. 187 (S.D.N.Y. 1934)
The bill of complaint alleges that the defendants have infringed plain-
tiff’s copyright of a drawing of a dress by making and selling a dress
like the one in plaintiff’s drawing.
Does the copyright of a drawing of a dress give the owner of that
copyright the exclusive monopoly to produce the dress itself? This
depends solely upon the extent of the rights secured by the copyright
owner upon filing his drawing in the copyright office.
Plaintiff stated in its application that it was filing a drawing for
registration. The dress itself could hardly be classed as work of art
894 CHAPTER 9. DESIGN
and filed in the Register’s office. Moreover, [a Copyright Office regu-
lation] lists ”garments” among those articles in which ”The exclusive
right to make and sell ... should not be sought by copyright regis-
tration.” All the plaintiff could accomplish under this section was to
register its drawing, and unless we read into the statute something
which is not there plaintiff secured no exclusive monopoly of the
dress shown in the drawing. This seems clear if it be kept in mind
that it is the drawing which is assumed to be a work of art and not
the dress. It follows that plaintiff’s copyright gives it the exclusive
right to make copies or reprints of the drawing only, and that it gives
the copyright owner no monopoly of the article illustrated.
Bracken: 151 F. 136 (C.C. N.D. Ill. 1907) Plaintiff cites Bracken v. Rosenthal which held that a photograph
of a copyrighted piece of sculpture was an infringement. But the dis-
tinction is plain. A dress is not copyrightable. A picture of a dress is;
and the statute expressly includes sculpture.
Cheney Bros. v. Doris Silk Corporation
35 F.2d 279 (2d Cir. 1929)
The plaintiff, a corporation, is a manufacturer of silks, which puts out
(Learned Hand, J.)
each season many new pa erns, designed to a ract purchasers by
their novelty and beauty. Most of these fail in that purpose, so that
not much more than a fifth catch the public fancy. Moreover, they
have only a short life, for the most part no more than a single season
of eight or nine months. It is in practice impossible, and it would be
very onerous if it were not, to secure design patents upon all of these;
it would also be impossible to know in advance which would sell
well, and patent only those. Besides, it is probable that for the most
part they have no such originality as would support a design patent.
Again, it is impossible to copyright them under the Copyright Act, or
at least so the authorities of the Copyright Office hold. So it is easy
for any one to copy such as prove successful, and the plaintiff, which
is put to much ingenuity and expense in fabricating them, finds itself
without protection of any sort for its pains.
Taking advantage of this situation, the defendant copied one of
the popular designs in the season beginning in October, 1928, and
undercut the plaintiff’s price.
The plaintiff asks for protection only during the season, and needs
no more, for the designs are all ephemeral. It seeks in this way to
disguise the extent of the proposed innovation, and to persuade us
that, if we interfere only a li le, the solecism, if there be one, may be
pardonable. But the reasoning which would justify any interposition
at all demands that it cover the whole extent of the injury. A man
whose designs come to harvest in two years, or in five, has prima fa-
cie as good right to protection as one who deals only in annuals. Nor
could we consistently stop at designs; processes, machines, and se-
crets have an equal claim. The upshot must be that, whenever any
F. FASHION 895
one has contrived any of these, others may be forbidden to copy it.
That is not the law. In the absence of some recognized right at com-
mon law, or under the statutes — and the plaintiff claims neither — a
man’s property is limited to the cha els which embody his invention.
Others may imitate these at their pleasure.
True, it would seem as though the plaintiff had suffered a
grievance for which there should be a remedy, perhaps by an amend-
ment of the Copyright Law, assuming that this does not already cover
the case, which is not urged here. It seems a lame answer in such
a case to turn the injured party out of court, but there are larger is-
sues at stake than his redress. Judges have only a limited power to
amend the law; when the subject has been confided to a Legislature,
they must stand aside, even though there be an hiatus in completed
justice. An omission in such cases must be taken to have been as
deliberate as though it were express, certainly after long-standing ac-
tion on the subject-ma er. Indeed, we are not in any position to pass
upon the questions involved. We must judge upon records prepared
by litigants, which do not contain all that may be relevant to the is-
sues, for they cannot disclose the conditions of this industry, or of
the others which may be involved. Congress might see its way to cre-
ate some sort of temporary right, or it might not. Its decision would
certainly be preceded by some examination of the result upon the
other interests affected. Whether these would prove paramount we
have no means of saying; it is not for us to decide. Our vision is in-
evitably contracted, and the whole horizon may contain much which
will compose a very different picture.
Fashion Originators' Guild of America v. Federal Trade Commission
312 U.S. 457 (1941)
The Circuit Court of Appeals, with modifications not here challenged,
affirmed a Federal Trade Commission decree ordering petitioners to
cease and desist from certain practices found to have been done in
combination and to constitute ”unfair methods of competition” tend-
ing to monopoly.
Some of the members of the combination design, manufacture,
sell and distribute women’s garments – chiefly dresses. Others are
manufacturers, converters or dyers of textiles from which these gar-
ments are made. Fashion Originators’ Guild of America (FOGA), an
organization controlled by these groups, is the instrument through
which petitioners work to accomplish the purposes condemned by
the Commission. The garment manufacturers claim to be creators
of original and distinctive designs of fashionable clothes for women,
and the textile manufacturers claim to be creators of similar origi-
nal fabric designs. After these designs enter the channels of trade,
other manufacturers systematically make and sell copies of them, the
copies usually selling at prices lower than the garments copied. Peti-
896 CHAPTER 9. DESIGN
tioners call this practice of copying unethical and immoral, and give it
the name of ”style piracy.” And although they admit that their ”orig-
inal creations” are neither copyrighted nor patented, and indeed as-
sert that existing legislation affords them no protection against copy-
ists, they nevertheless urge that sale of copied designs constitutes an
unfair trade practice and a tortious invasion of their rights. Because
of these alleged wrongs, petitioners, while continuing to compete
with one another in many respects, combined among themselves to
combat and, if possible, destroy all competition from the sale of gar-
ments which are copies of their ”original creations.” They admit that
to destroy such competition they have in combination purposely boy-
co ed and declined to sell their products to retailers who follow a pol-
icy of selling garments copied by other manufacturers from designs
put out by Guild members. As a result of their efforts, approximately
12,000 retailers throughout the country have signed agreements to
”cooperate” with the Guild’s boyco program, but more than half of
these signed the agreements only because constrained by threats that
Guild members would not sell to retailers who failed to yield to their
demands – threats that have been carried out by the Guild practice of
placing on red cards the names of noncooperators (to whom no sales
Fashion Originators Guild registration are to be made), placing on white cards the names of cooperators (to
whom sales are to be made), and then distributing both sets of cards
to the manufacturers.
The one hundred and seventy-six manufacturers of women’s gar-
ments who are members of the Guild occupy a commanding posi-
tion in their line of business. In 1936, they sold in the United States
more than 38% of all women’s garments wholesaling at $6.75 and up,
and more than 60% of those at $10.75 and above. The power of the
combination is great; competition and the demand of the consuming
public make it necessary for most retail dealers to stock some of the
products of these manufacturers. And the power of the combination
is made even greater by reason of the affiliation of some members of
the National Federation of Textiles, Inc. – that being an organization
composed of about one hundred textile manufacturers, converters,
dyers, and printers of silk and rayon used in making women’s gar-
ments. Those members of the Federation who are affiliated with the
Fashion Originators Guild label
Guild have agreed to sell their products only to those garment manu-
facturers who have in turn agreed to sell only to cooperating retailers.
The Guild maintains a Design Registration Bureau for garments,
and the Textile Federation maintains a similar Bureau for textiles. The
Guild employs ’shoppers’ to visit the stores of both cooperating and
non-cooperating retailers, for the purpose of examining their stocks,
to determine and report as to whether they contain copies of regis-
tered designs. An elaborate system of trial and appellate tribunals
Fashion Originators Guild red card exists, for the determination of whether a given garment is in fact a
F. FASHION 897
copy of a Guild member’s design. In order to assure the success of
its plan of registration and restraint, and to ascertain whether Guild
regulations are being violated, the Guild audits its members books.
And if violations of Guild requirements are discovered, as, for exam-
ple, sales to red-carded retailers, the violators are subject to heavy
fines.
Paragraph 3 of the Clayton Act declares ”It shall be unlawful for 15 U.S.C. § 14
any person engaged in commerce to make a sale or contract for sale
of goods on the condition, agreement or understanding that the pur-
chaser thereof shall not use or deal in the goods of a competitor or
competitors of the seller, where the effect of such sale, or contract for
sale may be to substantially lessen competition or tend to create a
monopoly in any line of commerce.” The relevance of this section of
the Clayton Act to petitioners’ scheme is shown by the fact that the
scheme is bo omed upon a system of sale under which (1) textiles
shall be sold to garment manufacturers only upon the condition and
understanding that the buyers will not use or deal in textiles which
are copied from the designs of textile manufacturing Guild members;
(2) garment manufacturers shall sell to retailers only upon the condi-
tion and understanding that the retailers shall not use or deal in such
copied designs. And the Federal Trade Commission concluded in the
language of the Clayton Act that these understandings substantially
lessened competition and tended to create a monopoly. We hold
that the Commission, upon adequate and unchallenged findings, cor-
rectly concluded that this practice constituted an unfair method of
competition. 15 U.S.C. §§ 1, 2
Not only does the plan in the respects above discussed thus con- In the proceedings below, Judge
Learned Hand wrote for the Second
flict with the principles of the Clayton Act; the findings of the Com-
Circuit, "The author of a design for
mission bring petitioners’ combination in its entirety well within the a dress should be deemed to be
inhibition of the policies declared by the Sherman Act itself. Section on the same footing as the author
1 of that Act makes illegal every contract, combination or conspiracy of a drawing or a picture; and the
in restraint of trade or commerce among the several states; Section author of a drawing or a picture
has a "common-law property" in its
2 makes illegal every combination or conspiracy which monopolizes
reproduction. While we have been
or a empts to monopolize any part of that trade or commerce. And unable to discover any case which
among the many respects in which the Guild’s plan runs contrary squarely presented the situation -- that
to the policy of the Sherman Act are these: it narrows the outlets is, in which "intellectual property", not
to which garment and textile manufacturers can sell and the sources covered by the copyright act then in
existence, was challenged because
from which retailers can buy; subjects all retailers and manufacturers of its "publication" -- there are plenty
who decline to comply with the Guild’s program to an organized boy- of general expressions in the books
co ; takes away the freedom of action of members by requiring each that the "common-law property" does
to reveal to the Guild the intimate details of their individual affairs; not survive. We conclude therefore
and has both as its necessary tendency and as its purpose and effect that, regardless of whether the Guild's
designs could be registered or not,
the direct suppression of competition from the sale of unregistered "publication" of them was a surrender
textiles and copied designs. of all its "common-law property" in
But petitioners further argue that their boyco and restraint of in- them."
898 CHAPTER 9. DESIGN
terstate trade is not within the ban of the policies of the Sherman and
Clayton Acts because ”the practices of FOGA were reasonable and
necessary to protect the manufacturer, laborer, retailer and consumer
against the devastating evils growing from the pirating of original de-
signs and had in fact benefited all four.” The Commission declined to
hear much of the evidence that petitioners desired to offer on this sub-
ject. As we have pointed out, however, the aim of petitioners’ combi-
nation was the intentional destruction of one type of manufacture and
sale which competed with Guild members. The purpose and object
of this combination, its potential power, its tendency to monopoly,
the coercion it could and did practice upon a rival method of compe-
tition, all brought it within the policy of the prohibition declared by
the Sherman and Clayton Acts. Under these circumstances it was not
error to refuse to hear the evidence offered, for the reasonableness of
the methods pursued by the combination to accomplish its unlawful
object is no more material than would be the reasonableness of the
prices fixed by unlawful combination.
Peter Pan Fabrics, Inc. v. Brenda Fabrics, Inc.
169 F. Supp. 142 (S.D.N.Y. 1959)
Plaintiff Peter Pan Fabrics has obtained certificate of copyright cov-
ering a design printed upon dress fabric. The design is known as
”Style 680, Range 1, Byzantium”. Defendant is producing and selling
a printed fabric almost indisguishable from plaintiff’s.
The problem to be decided is whether a design printed upon dress
fabric is a proper subject of copyright. In Bleistein, Mr. Justice Holmes
dispelled the idea that the word ”art” in the Copyright Act imported
any idea of merit or high degree or appeal to the be er educated
classes. In Mazer, Mr. Justice Reed said in the opinion of the court:
It is clear Congress intended the scope of the copyright
statute to include more than the traditional fine arts. Her-
bert Putnam, Esq., then Librarian of Congress and active
in the movement to amend the copyright laws, told the
joint meeting of the House and Senate Commi ees:
The term ”works of art” is deliberately intended
Peter Pan's fabric as a broader specification than ”works of the
fine arts” in the present statute with the idea
that there is subject-ma er (for instance, of ap-
plied design, not yet within the province of de-
sign patents), which may properly be entitled to
protection under the copyright law.
In Dr. Putnam’s statement before the joint meeting we have an au-
thoritative construction of the term ”works of art” in the Copyright
Act as including ”applied design”. No be er description of the sub-
F. FASHION 899
ject ma er of this litigation could be devised.
I therefore find that plaintiffs’ design is a proper subject of copy-
right both as a work of art and as a print. It was described in the
application for copyright as a work of art but that does not preclude
sustaining its copyrightability on the ground that it is a print.
Varsity Brands, Inc. v. Star Athletica, LLC
799 F.3d 468 (6th Cir. 2015), cert
Are cheerleading uniforms truly cheerleading uniforms without the granted, 136 S. Ct. 1823 (2016)
stripes, chevrons, zigzags, and color blocks? That is the question that
strikes at the heart of this appeal. Plaintiffs have registered copy-
rights for multiple graphic designs that appear on the cheerleading
uniforms and warm-ups they sell. Defendant also sells cheerleading
gear bearing graphic designs that, according to Varsity, are substan-
tially similar to the designs for which Varsity has valid copyrights.
Qestion One: We begin our analysis by first identifying whether
Varsity’s designs are ”pictorial, graphic, or sculptural works.” Var-
sity’s designs, for which they received copyright registration, are
”two-dimensional works of ... graphic ... art.”
Question Two: Are Varsity’s designs ”design[s] of ... useful ar-
ticle[s?] Varsity’s designs are sketches that depict cheerleading crop
tops and skirts — the components of a cheerleading uniform. In other
words, they are designs of cheerleading uniforms and sportswear,
which have an ”intrinsic utilitarian function that is not merely to por-
tray the appearance of [clothing] or to convey information.”
Question Three: What are the ”utilitarian aspects” of cheerlead-
ing uniforms? Cheerleading uniforms have ”an intrinsic utilitarian
function,” namely to cover the body, wick away moisture, and with-
stand the rigors of athletic movements. Star contends that cheerlead-
ing uniforms identify the wearer as a cheerleader and a member of
a cheerleading team. But this is no different than saying that a utili-
tarian aspect of a cheerleading uniform is to convey to others the fact
that the wearer of the uniform is a cheerleader for a particular team.
And therefore Star’s purported utilitarian aspect of a cheerleading
uniform is an impermissible factor.
It also appears that Star makes one final argument as to why Var-
sity’s graphic designs cannot ”be identified separately from, and are
[in]capable of existing independently of, the utilitarian aspects of the
article”: the designs’ ”decorative function” is one of the ”utilitarian
aspects” of a cheerleader uniform.
To the extent that Star contends that pictorial, graphic, or sculp-
tural features are inextricably intertwined with the utilitarian aspects
of a cheerleading uniform because they serve a decorative function,
we reject that argument. Such a holding would render nearly all art-
work unprotectable. Under this theory of functionality, Mondrian’s
painting would be unprotectable because the painting decorates the Varsity uniform design
900 CHAPTER 9. DESIGN
room in which it hangs. But paintings are copyrightable. It would
also render the designs on laminate flooring unprotectable because
the flooring would be otherwise una ractive. But the Copyright Act
protects flooring designs that hide wear or other imperfections in
the product. And statue es adorning the base of a lamp would not
be copyrightable under this theory because they serve the function
of decorating an otherwise boring lamp base. But they are copy-
rightable under certain circumstances.Mazer Finally, holding that the
decorative function is a ”utilitarian aspect[] of [an] article,” would
make all fabric designs, which serve no other function than to make
a garment more a ractive, ineligible for copyright protection. But it
is well-established that fabric designs are eligible for copyright pro-
tection. We therefore conclude that a pictorial, graphic, or sculptural
Piet Mondrian, Trafalgar Square (1939– work’s ”decorative function” does not render it unable to ”be iden-
43) tified separately from,” or ”[in]capable of existing independently of,
the utilitarian aspects of the article.”
Question Four: Can we identify pictorial, graphic, or sculptural
features separately from the parts of the cheerleading-uniform de-
sign, which cover the body, permit free movement, and wick mois-
ture? We can identify graphic features of Varsity’s designs — the
arrangement of stripes, chevrons, zigzags, and color-blocking. The
district court concluded that these graphic features are not separately
identifiable from a cheerleading uniform because a cheerleading uni-
form ”without team colors stripes, chevrons, and similar designs typ-
ically associated with sports in general, and cheerleading in particu-
lar, is not recognizable as a cheerleading uniform.” We disagree. First,
Varsity’s graphic designs do not enhance the cheerleading uniform’s
functionality qua clothing. A plain white cheerleading top and plain
white skirt still cover the body and permit the wearer to cheer, jump,
kick, and flip. The top and skirt are still easily identified as cheer-
leading uniforms without any stripes, chevrons, zigzags, or color-
blocking. Moreover, the record establishes that not all cheerleading
uniforms must look alike to be cheerleading uniforms. The five Var-
sity designs are examples of how a cheerleading uniform still looks
like a cheerleading uniform no ma er how different the arrangement
of the stripes, chevrons, colorblocks, and zigzags appear on the sur-
face of the uniform. All of Varsity’s graphic designs are interchange-
able. Varsity’s customers choose among the designs in the catalog,
including the five designs at issue, select one of the designs, and then
customize the color scheme. The interchangeability of Varsity’s de-
signs is evidence that customers can identify differences between the
graphic features of each design, and thus a graphic design and a blank
cheerleading uniform can appear ”side by side” — one as a graphic
design, and one as a cheerleading uniform. We therefore conclude
that each of these graphic design concepts can be identified separately
F. FASHION 901
from the utilitarian aspects of the cheerleading uniform.
Question Five: Can the arrangement of stripes, chevrons, color
blocks, and zigzags ”exist[] independently of” the utilitarian aspects
of a cheerleading uniform? We believe they can. Varsity’s designers
sketch their designs and select, place, and arrange various graphic
elements, such as stripes, lines, chevrons, inverted chevrons, angles,
curves, coloring, and shapes. Varsity’s production department either
applies these graphic designs onto cheerleading uniforms or recre-
ates the designs by sewing panels of fabric together. Varsity’s de-
signs may be incorporated onto the surface of a number of different
types of garments, including cheerleading uniforms, practice wear,
t-shirts, warm-ups, and jackets, among other things. This evidence
establishes that the designs are transferrable to articles other than
the traditional cheerleading uniform (crop top and skirt). In addi-
tion, the interchangeability of Varsity’s various designs is evidence
that the graphic design on the surface of the uniform does not affect
whether the uniform still functions as a cheerleading uniform. In-
deed, nothing (save perhaps good taste) prevents Varsity from print-
ing or painting its designs, framing them, and hanging the resulting
prints on the wall as art. We therefore conclude the arrangement of
stripes, chevrons, color blocks, and zigzags are wholly unnecessary
to the performance of the garment’s ability to cover the body, permit
free movement, and wick moisture.
Because we conclude that the graphic features of Varsity’s designs
”can be identified separately from, and are capable of existing inde-
pendently of, the utilitarian aspects of [cheerleading uniforms],” we
hold that Varsity’s graphic designs are copyrightable subject ma er.
This conclusion is faithful to the statutory text of the Copyright Act
and consistent with other courts’ treatment of the protectability of
clothing and the pictorial and graphic features that appear on cloth-
ing under the Copyright Act. Courts have drawn a line between
”fabric design” and ”dress design.” ”Fabric designs” are ”designs im-
printed on a fabric, such as a rose petal, which in a completed dress
may appear repeatedly throughout the dress fabric, or may appear
but once on a given dress.” Nimmer. Take the work of Piet Mondrian,
for example. Mondrian’s artwork or design is separable as a work of
art because not only is it possible to recreate the design on t-shirts, gro-
cery bags, cellphone cases, or notebooks, but also it actually has been
done: Yves St. Laurent used Mondrian’s famous color-blocking and
thick, black stripes to create cocktail dresses known as the ”Mondrian
look.” Mondrian’s arrangement of color blocks and use of stripes are
pictorial and graphic features ”that can be identified separately from,
and are capable of existing independently of, the utilitarian aspects
of” Yves St. Laurent’s dress.
In contrast, it is impossible either physically or conceptually to YSL Mondrian dresses
902 CHAPTER 9. DESIGN
separate a ”dress design,” which ”graphically sets forth the shape,
style, cut, and dimensions for converting fabric into a finished dress
or other clothing garment,” from the utilitarian aspects of clothing,
i.e., to cover, protect, and warm the body. Nimmer The shapes of
the neckline (v-neck, square-neck, crew-neck), sleeves (short, long,
puffy), skirt shape (a-line, pencil, midi, maxi), trouser cut (pleated,
plain-front, cuffed), or pockets (patch, welt, je ed) – these are the
components of a design that are inextricably connected with the util-
itarian aspects of clothing: pockets store pencils or pens; pants and
skirts cover the legs; shirts cover the torso modestly or less modestly
depending on the neckline. The designs of these components of an
article of clothing ”can[not] be identified separately from, [or be] ca-
pable of existing independently of, the utilitarian aspects of the article
[of clothing].”
The Copyright Act protects fabric designs, but not dress designs.
A designer may obtain valid copyrights for ”a multicolored striped
sweater with puffy leaf appliques” and a cardigan, ”which has a
Knitwaves: 71 F.3d at 996 (2d Cir. 1995) squirrel and leaves appliqued onto its multipaneled front.” Knitwaves,
Inc. v. Lollytogs Ltd. The sweater has a utilitarian function — to pro-
vide warm cover for the torso and arms — and the sweaters still per-
form that function without the leaf or squirrel designs. Similarly, the
design of a rose and ”the placement of that rose repeated in horizon-
tal rows against an ornate background” on fabric receive copyright
protection. Folio Impressions. But the creative arrangement of sequins,
beads, ribbon, and tulle, which form the bust, waistband of a dress,
do not qualify for copyright protection because each of these elements
Sweater from Knitwaves (bust, waistband, and skirt) all serve to clothe the body. Jovani Fash-
Jovani: 808 F. Supp. 2d 542 (S.D.N.Y. ion, Ltd. v. Cinderella Divine, Inc. And a collection of uniforms, which
2011) includes chef hats shaped like vegetables, tuxedo jackets with a ”dis-
tinctive shawl collar styling with a deep V neckline,” and semi-fi ed
jackets with princess seams and star bu ons, does not receive copy-
Galiano: 416 F. 3d 411 (5th Cir. 2005) right protection. Galiano v. Harrah’s Operating Co., Inc. Creative and
arguably a ractive as these articles may be, they are merely inventive
designs used to cover the wearer’s body and hair. Thus, the design
of these hats and jackets (useful articles) ”can[not] be identified sep-
arately from,” and are not ”capable of existing independently of, the
utilitarian aspects of” a hat or a jacket.
Because we believe that the graphic features of Varsity’s
cheerleading-uniform designs are more like fabric design than dress
design, we hold that they are protectable subject ma er under the
Copyright Act. We therefore enter summary judgment for Varsity
solely on the issue of the protectability of Varsity’s designs as pic-
torial, graphic, or sculptural works. We express no opinion about
whether Varsity’s designs are ineligible for copyright protection be-
F. FASHION 903
cause they lack originality or any other reason.
McKEAGUE, Circuit Judge, dissenting.
I agree with the majority’s general approach. We first define the
work’s function and then ask whether the claimed elements can be
identified separately from, or exist independently of, that function. I
depart with the majority’s analysis, however, in how the function of
these designs is defined. I would hold that there is no conceptual sep-
arability and that Varsity’s designs are not copyrightable. I therefore
dissent.
Function. The majority explains that the function of a cheerlead-
ing uniform is to wick away moisture and ”permit the wearer to cheer,
jump, kick, and flip.” That broad definition could be used to describe
all athletic gear. But the particular athletic uniforms before us serve
to identify the wearer as a cheerleader. Without stripes, braids, and
chevrons, we are left with a blank white pleated skirt and crop top.
As the district court recognized, the reasonable observer would not
associate this blank outfit with cheerleading. This may be appropri-
ate a ire for a match at the All England Lawn Tennis Club, but not
for a member of a cheerleading squad.
Clothing provides many functions, but a uniform at its core iden-
tifies its wearer as a member of a group. It follows that the stripes,
braids, and chevrons on a cheerleading uniform are integral to its
identifying function. The majority rejects this categorization because
this holding would purportedly ”render nearly all artwork unpro-
tectable.” That’s not true. It renders unprotectable only artwork that
is integral to an item’s utilitarian function. In defining that function,
we are confined by caselaw and by common sense. Take a dresser,
for example. The function of a dresser is to store clothes and other ar-
ticles. Any ornamental designs displayed on the surface of a dresser
are not integral to that function. Those ornamental designs would
therefore be copyrightable. In contrast, a painting is not subject to
the separability analysis because it does not qualify as a ”useful arti-
cle.”
Separability. Once function is properly defined, it logically follows:
the placement of the stripes, braids, and chevrons is not separable
from that function. In Jovani, in relation to a prom dress, the court ex-
cluded from copyright ”the arrangement of decorative sequins and
crystals on the dress bodice; horizontal satin ruching on the dress
waist; and layers of tulle on the skirt.” Here, as in that case, there is
no evidence that Varsity’s designers exercised artistic judgment in-
dependently of functional influences, rather than as a merger of aes-
thetic and functional considerations. In both cases, the designers’ aes-
thetic considerations merged with functional concerns: to cover the
body in an a ractive way for a special occasion, and to identify the
904 CHAPTER 9. DESIGN
wearer as a member of a particular cheerleading squad. Without the
stripes, braids, and chevrons, a blank shell of a cheerleading uniform
would lose an important dimension of its functional utility.
It is apparent that either Congress or the Supreme Court (or both)
must clarify copyright law with respect to garment design. The law in
this area is a mess – and it has been for a long time. The majority takes
a stab at sorting it out, and so do I. But until we get much-needed
clarification, courts will continue to struggle and the business world
will continue to be handicapped by the uncertainty of the law.
2 Trademark
778 F. Supp. 2d 445 (S.D.N.Y. 2011)
Christian Louboutin v. Yves Saint Laurent America
Sometime around 1992 designer Christian Louboutin had a bright
idea. He began coloring glossy vivid red the out-soles of his high
fashion women’s shoes. Whether inspired by a stroke of original
genius or, as competitor YSL retorts, copied from King Louis XIV’s
red-heeled dancing shoes, or Dorothy’s famous ruby slippers in ”The
Wizard of Oz,” or other styles long available in the contemporary mar-
ket – including those sold by YSL Christian Louboutin deviated from
industry custom. In his own words, this diversion was meant to give
his line of shoes ”energy,” a purpose for which he chose a shade of red
because he regarded it as ”engaging, flirtatious, memorable and the
color of passion,” as well as ”sexy.” In pursuit of the red sole’s virtues,
Louboutin invested substantial amounts of capital building a reputa-
tion and good will, as well as promoting and protecting Louboutin’s
claim to exclusive ownership of the mark as its signature in women’s
high fashion footwear.
Over the years, the high fashion industry responded. Christian
Louboutin’s bold divergence from the worn path paid its dividends.
Louboutin succeeded to the point where, in the high-stakes commer-
cial markets and social circles in which these things ma er a great
deal, the red outsole became closely associated with Louboutin. Lead-
ing designers have said it, including YSL, however begrudgingly.
Film stars and other A-list notables equally pay homage, at prices
that for some styles command as much as $1,000 a pair. And even at
Louboutin Pigalle red-sole shoe that expense, a respectable niche of consumers wears the brand, to the
tune of about 240,000 pairs a year sold in the United States, with rev-
enues of approximately $135 million projected for 2011. When Holly-
wood starlets cross red carpets and high fashion models strut down
runways, and heads turn and eyes drop to the celebrities’ feet, lac-
quered red outsoles on high-heeled, black shoes flaunt a glamorous
statement that pops out at once. For those in the know, cognitive
bulbs instantly flash to associate: ”Louboutin.” This recognition is
F. FASHION 905
acknowledged, for instance, at least by a clientele of the well-heeled,
in the words of a lyrical stylist of modern times:
Boy, watch me walk it out ... Walk this right up out the Jennifer Lopez, "Louboutins" (Epic
house I’m throwin’ on my Louboutins ... Records 2009)
The PTO awarded a trademark with Registration No. 3,361,597
(the ”Red Sole Mark”) to Louboutin on January 1, 2008. The certificate
of registration includes both a verbal description of the mark and a
line drawing intended to show placement of the mark as indicated [in
the margin.] The verbal description reads: ”THE MARK CONSISTS
OF A LACQUERED RED SOLE ON FOOTWEAR.”
YSL, a fashion house founded in 1962, produces seasonal collec-
tions that include footwear. According to YSL, red outsoles have
appeared occasionally in YSL collections dating back to the 1970s.
Louboutin takes issue with four shoes from YSL’s Cruise 2011 collec-
tion: the Tribute, Tribtoo, Palais and Woodstock models. Each of the
challenged models bears a bright red outsole as part of a monochro-
matic design in which the shoe is entirely red (or entirely blue, or
entirely yellow, etc.).
Courts have approved the use of a single color as a trademark
for industrial products. See, e.g., Qualitex (green-gold for pads used
on dry cleaning presses); In re Owens-Corning Fiberglas Corp. (pink Line drawing from Louboutin's registra-
for fibrous glass insulation). In some industrial markets the design, tion
shape and general composition of the goods are relatively uniform, so
as to conform to industry-wide standards. Steel bolts, fiber glass wall
insulation and cleaning press pads, for example, are what they are
regardless of which manufacturer produces them. The application
of color to the product can be isolated to a single purpose: to change
the article’s external appearance so as to distinguish one source from
another.
But, whatever commercial purposes may support extending
trademark protection to a single color for industrial goods do not eas-
ily fit the unique characteristics and needs – the creativity, aesthetics,
taste, and seasonal change – that define production of articles of fash-
ion. That distinction may be readily visualized through an image of
the incongruity presented by use of color in other industries in con- YSL monochromatic Tribtoo in suede
trast to fashion. Can one imagine industrial models sashaying down
Owens-Corning: 774 F.2d 1116 (Fed. Cir.
the runways in displays of the designs and shades of the season’s col- 1985)
lections of wall insulation? The difference for Lanham Act purposes,
as elaborated below, is that in fashion markets color serves not solely
to identify sponsorship or source, but is used in designs primarily to
advance expressive, ornamental and aesthetic purposes.
In the fashion industry, the Lanham Act has been upheld to per-
mit the registration of the use of color in a trademark, but only in
distinct pa erns or combinations of shades that manifest a conscious
906 CHAPTER 9. DESIGN
effort to design a uniquely identifiable mark embedded in the goods.
See, e.g., , Dooney & Bourke (”LV” monogram combined in a pa ern
Euro Moda: No. 08 Civ. 5781, 2009 WL of rows with 33 bright colors); Burberry Ltd. v. Euro Moda, Inc. (reg-
1675080 (S.D.N.Y. June 10, 2009) istered Burberry check pa ern entitled to statutory presumption of
validity). In these cases the courts clearly point out that the approved
trademark applies to color not as an abstract concept, or to a specific
single shade, but to the arrangement of different colors and thus their
synergy to create a distinct recognizable image purposely intended
to identify a source while at the same time serving as an expressive,
ornamental or decorative concept.
The narrow question presented here is whether the Lanham Act
extends protection to a trademark composed of a single color used as
an expressive and defining quality of an article of wear produced in
the fashion industry. In other words, the Court must decide whether
there is something unique about the fashion world that militates
against extending trademark protection to a single color, although
such registrations have sometimes been upheld in other industries.
To answer this question, and recognizing the fanciful business
from which this lawsuit arises, the Court begins with a fanciful hy-
pothetical. Suppose that Monet, having just painted his water lilies,
encounters a legal challenge from Picasso, who seeks by injunction to
bar display or sale of those works. In his complaint, Picasso alleges
that Monet, in depicting the color of water, used a distinctive indigo
that Picasso claims was the same or too close to the exquisite shade
that Picasso declares is ”the color of melancholy,” the hallmark of his
Blue Period, and is the one Picasso applied in his images of water in
paintings of that collection. By virtue of his long-standing prior use
of that unique tinge of blue in context, affirmed by its registration by
the trademark office, Picasso asserts exclusive ownership of the spe-
cific tone to portray that color of water in canvas painting. Should a
court grant Picasso relief?
The creative energies of painter and fashion designer are devoted
to appeal to the same sense in the beholder and wearer: aesthetics.
Both strive to please patrons and markets by creating objects that not
only serve a commercial purpose but also possess ornamental beauty
(subjectively perceived and defined). Quintessentially, both painting
and fashion embrace ma ers of taste. In consequence, they share vi-
cissitudes natural to any ma er of palate or pale e. They change as
the seasons change. Styles, features, whole lines come and go with
passing likes and dislikes, to be replaced by new articles with origins
from regions where genius charts a different course. Items fall in and
out of fashion in all nuances of the word, conveying not only currency
but seasonality and transience. Perhaps capturing something of that
relative inconstancy, painting and fashion share a vocabulary. They
speak in ethereal terms like fanciful, inventive, eccentric, whimsical,
F. FASHION 907
visionary, and, to quote Louboutin again, ”engaging, flirtatious” – all
words which also have in common an aim to evoke and affect things
of the moment.
These creative means also share a dependence on color as an indis-
pensable medium. Color constitutes a critical a ribute of the goods
each form designs. Alone, in combinations, in harmonious or even
incongruous blends, in varying pa erns and shapes, the whole spec-
trum of light serves as a primal ingredient without which neither
painting nor fashion design as expressive and ornamental art would
flourish. For, color depicts elemental properties. As it projects expres-
sion of the artist’s mental world, it captures the mutability, the fancy,
the moods of the visual world, in both spheres working as a means
to execute singular concepts born of imagination for which not just
any other shade will do. Hence, color in this context plays a unique
role. It is a feature purposely given to an article of art or design to
depict the idea as the creator conceived it, and to evoke an effect in-
tended. In ornamenting, it draws a ention to itself, and to the object
for which its tone forms a distinct expressive feature. From these per-
spectives, color in turn elementally performs a creative function; it
aims to please or be useful, not to identify and advertise a commer-
cial source.
But, as an offshoot of color, perhaps most crucial among the fea-
tures painting and fashion design share as commerce and art, are two
interrelated qualities that both creative fields depend upon to thrive,
and indeed to survive: artistic freedom and fair competition. In both
forms, the greatest range for creative outlet exists with its highest,
most vibrant and all-encompassing energies where every pigment of
the spectrum is freely available for the creator to apply, where every
painter and designer in producing artful works enjoys equal freedom
to pick and choose color from every streak of the rainbow. The con-
trary also holds. Placing off limit signs on any given chromatic band
by allowing one artist or designer to appropriate an entire shade and
hang an ambiguous threatening cloud over a swath of other neighbor-
ing hues, thus delimiting zones where other imaginations may not
veer or wander, would unduly hinder not just commerce and compe-
tition, but art as well.
No one would argue that a painter should be barred from em-
ploying a color intended to convey a basic concept because another
painter, while using that shade as an expressive feature of a similar
work, also staked out a claim to it as a trademark in that context. If
as a principle this proposition holds as applied to high art, it should
extend with equal force to high fashion. The law should not counte-
nance restraints that would interfere with creativity and stifle compe-
tition by one designer, while granting another a monopoly invested
with the right to exclude use of an ornamental or functional medium
908 CHAPTER 9. DESIGN
necessary for freest and most productive artistic expression by all en-
gaged in the same enterprise.
The question of whether the use of a single color in the fashion
industry can constitute a valid mark necessarily raises another one:
whether a single color may be ”functional” in that context. Use of a
single color has been held functional, and therefore not protectable
under the Lanham Act, in other contexts. See, e.g., Brunswick Corp
(black for marine outboard engines held functional because it is ”com-
patible with a wide variety of boat colors and [can] make objects ap-
Deere: 560 F.Supp. 85 (S.D. Iowa 1982) pear smaller”); Deere & Co. v. Farmhand, Inc. (green for farm equip-
ment held functional because farmers ”prefer to match their loaders
to their tractor”), These cases illustrate the principle that aesthetic ap-
"The 'classic” aesthetic functionality peal can be functional; often we value products for their looks.
cases are actually about cognitive or Louboutin’s claim to ”the color red” is, without some limitation,
psychological responses in consumers,
overly broad and inconsistent with the scheme of trademark registra-
not aesthetics per se. Based on that
observation, I propose that aesthetic tion established by the Lanham Act. Awarding one participant in the
functionality should only be found designer shoe market a monopoly on the color red would impermis-
by courts when the product feature sibly hinder competition among other participants. YSL has various
at issue triggers a positive cognitive, reasons for seeking to use red on its outsoles – for example, to ref-
psychological, or aesthetic response
erence traditional Chinese lacquer ware, to create a monochromatic
among a substantial composite of the
relevant consumers and that response shoe, and to create a cohesive look consisting of color-coordinating
predates the trademark owner’s activi- shoes and garments. Presumably, if Louboutin were to succeed on
ties." Justin Hughes, Cognitive and Aes- its claim of trademark infringement, YSL and other designers would
thetic Functionality in Trademark Law, be prohibited from achieving those stylistic goals. In this respect,
36 Cardozo L. Rev. 1227 (2015)
Louboutin’s ownership claim to a red outsole would hinder compe-
tition not only in high fashion shoes, but potentially in the markets
for other women’s wear articles as well. Designers of dresses, coats,
bags, hats and gloves who may conceive a red shade for those articles
with matching monochromatic shoes would face the shadow or real-
ity of litigation in choosing bands of red to give expression to their
ideas.
The effects of this specter – the uncertainty and apprehension it
generates – are especially acute in the fashion industry because of its
grounding on the creative elements discussed above. Fashion is de-
pendent on colors. It is subject to temporal change. It is susceptible to
taste, to idiosyncrasies and whims and moods, both of designers and
consumers. Thus, at any moment when the market and the deities
of design, by whatever fancy they decide those things, proclaim that
”passion” is in for a given season and must be expressed in reds in the
year’s various collections, Louboutin’s claim would cast a red cloud
over the whole industry, cramping what other designers could do,
while allowing Louboutin to paint with a full pale e.
Louboutin would thus be able to market a total outfit in his red,
while other designers would not. And this impediment would apply
not just with respect to Louboutin’s registered ”the color red,” but,
F. FASHION 909
on its theory as pressed in this litigation, to a broader band of various
other shades of red which would be available to Louboutin but which
it could bar others from using.
Louboutin asserts that it is the color depicted in the registration’s
drawing, and not the verbal reference to the ”color red,” that controls.
In its reply brief, Louboutin identified that color for the first time as
Pantone No. 18-1663 TP, or ”Chinese Red,” part of the PANTONE
TEXTILE color system. Yet that identification raises additional issues.
Louboutin cannot amend or augment its PTO registration by repre-
sentations it makes in this litigation. Accordingly, the color that gov-
erns here remains, as Louboutin points out, the shade of red depicted
in the registration’s drawing. As Louboutin concedes, however, be-
cause of varying absorption and reflection qualities of the material
to which it is applied, a color as it manifests on paper would appear
quite different – some lighter, some darker hues – on other mediums
such as leather and cloth. A competitor examining the Louboutin reg-
istration drawing for guidance as to what color it applies to may there-
fore remain unable to determine precisely which shade or shades it
encompasses and which others are available for it to safely use.
Moreover, YSL has represented to the Court that the precise color
of the styles Louboutin challenges is not Chinese Red, and that YSL
has never used Pantone No. 18-1663 TP on its outsoles. Undaunted,
Louboutin insists that YSL has nonetheless infringed the Red Sole
Mark because its challenged shoe models use a shade confusingly
too close to Chinese Red. Yet Louboutin cannot provide a satisfactory
explanation as to why those models – but not others previously made
by YSL that also bear a red outsole – are confusingly similar to its
claimed mark. The larger question this conflict poses is how close
to a protected single color used in an item of fashion can the next
competitor approach without encountering legal challenge from the
first claimant of a shade as a trademark.
In response to this legal dilemma, Louboutin proposes that the
Court simply draw a designated range both above and below the bor-
derlines of Pantone No. 18-1663 TP, and declare all other stripes of
red within that zone forbidden to competitors. Its suggested metric
references Olay Co., Inc. v. Cococare Prods., Inc. (issuing injunction re- Olay: 218 U.S.P.Q. 1028 (S.D.N.Y. 1983)
quiring infringer to use ”a discernibly different pink, at least 40% dif-
ferent in terms of [Pantone Matching System] tones” from that used
by registrant). Louboutin’s proposal would have the effect of appro-
priating more than a dozen shades of red – and perhaps other colors
as well6 – and goes far beyond the injunction upon which Louboutin
6
Louboutin’s suggestion that the Court require other designers to stay some
percentage away from Chinese Red raises the question: some percentage of what?
Chinese Red, like any color, is made up of a certain combination of other colors.
910 CHAPTER 9. DESIGN
relies. In Olay, the protectable interest was not ”in the color pink
alone,” but rather in the color in combination with graphics and pack-
aging. Here, Louboutin’s claimed mark is, in essence, the color red
alone when used on the soles of ”high fashion” footwear. Moreover,
although Louboutin a empts in these proceedings to limit the scope
of the mark to high-heeled footwear, no such limitation appears on
the face of the registration.
The other options Louboutin’s claim would leave other competi-
tors are no more practical or palatable. As YSL endeavored to do
during a deposition of Christian Louboutin in connection with this
action, other designers could seek advance clearance from Christian
Louboutin himself, spreading the fan of shades before him to see at
what tint his red light changes to amber. Or they could go to court
and ask for declaratory relief holding that a proposed red sole is not
close enough to Chinese Red to infringe Louboutin’s mark, thereby
turning the judge into an arbiter of fashion design. Though Quali-
tex points out that in trademark disputes courts routinely are called
upon to decide difficult questions involving shades of differences in
words or phrases or symbols, the commercial contexts in which the
application of those judgments generally has arisen has not entailed
use of a single color in the fashion industry, where distinctions in de-
signs and ideas conveyed by single colors represent not just ma ers
of degree but much finer qualitative and aesthetic calls.
Because Louboutin’s registration specifies that it covers women’s
high fashion ”designer footwear,” the description is broad enough
to encompass all styles of shoes, not just the high-heeled model illus-
trated in the PTO registration. Louboutin’s argument that it would
not pursue a claim of infringement based upon red outsoles on, for
example, flat shoes, wedges or ki en heels, is cold comfort to com-
peting designers. In fact, in one case in Paris, Louboutin sought to
enforce its French trademark for a ”shoe sole in the color red” against
the company Zara France, S.A.R.I., which is not a high-end retailer.
Another dimension of uncertainty the Red Sole Mark creates per-
tains to its coating. Louboutin’s claim extends not just to the base of
”the color red,” but also to its gloss. In the registration, it is described
more specifically as ”lacquered” red. Thus, it is not clear, for exam-
ple, whether the protection of Louboutin’s trademark would apply
to a ”Chinese Red” outsole that was not shiny, but entirely flat. In
fact, that issue has surfaced in this case. YSL asserts that the color
Based on the Court’s research, this combination can be expressed in various metrics,
such as a combination of RGB (red, green, blue) or CMYK (cyan, magenta, yellow,
black), or HSB (hue, saturation, brightness). In Adobe Color Picker, a variance of
just 10 percent in any of these inputs, in either direction, yields more than a dozen
shades visibly different from Chinese Red, in some cases so different as to appear
to the casual observer pink on one side of Chinese Red or orange on the other.
F. FASHION 911
tone of some of the shoes Louboutin challenges is not lacquered at all
but a flat red. By bringing this litigation, Louboutin is of course call-
ing upon the Court to pass judgment as well on the degree of buffing
that a competitor may give to a Chinese Red outsole before it begins
to infringe on Louboutin’s rights.
Finally, conferring legal recognition on Louboutin’s claim raises
the specter of fashion wars. If Louboutin owns Chinese Red for the
outsole of high fashion women’s shoes, another designer can just as
well stake out a claim for exclusive use of another shade of red, or in-
deed even Louboutin’s color, for the insole, while yet another could,
like the world colonizers of eras past dividing conquered territories
and markets, plant its flag on the entire heel for its Chinese Red. And
who is to stop YSL, which declares it pioneered the monochrome shoe
design, from trumping the whole footwear design industry by assert-
ing rights to the single color shoe concept in all shades? And these
imperial color wars in women’s high fashion footwear would repre-
sent only the opening forays. What about hostile color grabs in the
markets for low-fashion shoes? Or for sports shoes? Or expanding be-
yond footwear, what about inner linings, collars, or bu ons on coats,
jackets, or dresses in both women’s and men’s apparel?
In sum, the Court cannot conceive that the Lanham Act could
serve as the source of the broad spectrum of absurdities that would
follow recognition of a trademark for the use of a single color for fash-
ion items. Because the Court has serious doubts that Louboutin pos-
sesses a protectable mark, the Court finds that Louboutin cannot es-
tablish a likelihood that it will succeed on its claims for trademark
infringement and unfair competition under the Lanham Act.
Christian Louboutin v. Yves Saint Laurent America 696 F.3d 206 (2d Cir. 2012)
The District Court’s holding that a single color can never serve as a
trademark in the fashion industry is inconsistent with the Supreme
Court’s decision in Qualitex.
III. T “F ”D
Although the theory of aesthetic functionality was proposed as early
as 1938, the first court to adopt the theory as the basis for denial of
protection of a design was the United States Court of Appeals for
the Ninth Circuit in Pagliero v. Wallace China Co.. In Pagliero, the Pagliero: 198 F.2d 339 (9th Cir. 1952)
Court of Appeals determined that the Wallace China Company was
not entitled to the exclusive use of a particular floral design on ho-
tel china, despite its ”creation of a substantial market for its products
bearing these designs by virtue of extensive advertising.” The design,
the Court held, was ”functional” because it satisfied ”a demand for
the aesthetic as well as for the utilitarian.” Because the ”particular
feature is an important ingredient in the commercial success of the
912 CHAPTER 9. DESIGN
product, the interest in free competition permits its imitation in the
absence of a patent or copyright.”
Despite its apparent counterintuitiveness (how can the purely aes-
thetic be deemed functional, one might ask?), our Court has long
accepted the doctrine of aesthetic functionality. We have rejected,
however, the circular ”important ingredient” test formulated by the
Pagliero court, which inevitably penalized markholders for their suc-
cess in promoting their product. Instead, we have concluded that
Lanham Act protection does not extend to configurations of ornamen-
tal features which would significantly limit the range of competitive
designs available. Accordingly, we have held that the doctrine of aes-
thetic functionality bars protection of a mark that is necessary to com-
pete in the relevant market.
We note that a product feature’s successful source indication can
sometimes be difficult to distinguish from the feature’s aesthetic func-
tion, if any. Therefore, in determining whether a mark has an aes-
thetic function so as to preclude trademark protection, we take care
to ensure that the mark’s very success in denoting (and promoting)
its source does not itself defeat the markholder’s right to protect that
mark. Because aesthetic function and branding success can some-
times be difficult to distinguish, the aesthetic functionality analysis
is highly fact-specific.
We now turn to the per se rule of functionality for color marks in
the fashion industry adopted by the District Court – a rule that would
effectively deny trademark protection to any deployment of a single
color in an item of apparel. As noted above, Qualitex expressly held
that ”sometimes a color will meet ordinary legal trademark require-
ments, and, when it does so, no special legal rule prevents color alone
from serving as a trademark.” In other words, the Supreme Court
specifically forbade the implementation of a per se rule that would
deny protection for the use of a single color as a trademark in a par-
ticular industrial context. Qualitex requires an individualized, fact-
based inquiry into the nature of the trademark, and cannot be read to
sanction an industry-based per se rule. The District Court created just
such a rule, on the theory that ”there is something unique about the
fashion world that militates against extending trademark protection
to a single color.”
Even if Qualitex could be read to permit an industry-specific per se
rule of functionality (a reading we think doubtful), such a rule would
be neither necessary nor appropriate here. We readily acknowledge
that the fashion industry, like other industries, has special concerns
in the operation of trademark law; it has been argued forcefully that
United States law does not protect fashion design adequately. In-
deed, the case on appeal is particularly difficult precisely because, as
the District Court well noted, in the fashion industry, color can serve
F. FASHION 913
as a tool in the pale e of a designer, rather than as mere ornamenta-
tion.
Nevertheless, the functionality defense does not guarantee a com-
petitor the greatest range for his creative outlet, but only the ability
to fairly compete within a given market.
IV. T R S M
Having determined that no per se rule governs the protection of
single-color marks in the fashion industry, any more than it can do
so in any other industry, we turn our a ention to the Red Sole Mark.
The Red Sole Mark has acquired limited secondary meaning as a dis-
tinctive symbol that identifies the Louboutin brand, and it is therefore
a valid and protectable mark as modified below.
We see no reason why a single-color mark in the specific context
of the fashion industry could not acquire secondary meaning – and
therefore serve as a brand or source identifier – if it is used so con-
sistently and prominently by a particular designer that it becomes a
symbol, the primary significance of which is to identify the source of
the product rather than the product itself.
In light of the evidence in the record, including extensive con-
sumer surveys submi ed by both parties during the preliminary in-
junction proceedings, and of the factual findings of the District Court,
we think it plain that Louboutin’s marketing efforts have created
what the able district judge described as “a ... brand with worldwide
recognition.” We hold that the lacquered red outsole, as applied to a
shoe with an “upper” of a different color, has “come to identify and
distinguish” the Louboutin brand, and is therefore a distinctive sym-
bol that qualifies for trademark protection.
We further hold that the record fails to demonstrate that the sec-
ondary meaning of the Red Sole Mark extends to uses in which the
sole does not contrast with the upper – in other words, when a red
sole is used on a monochromatic red shoe. As the District Court ob-
served, ”When Hollywood starlets cross red carpets and high fashion
models strut down runways, and heads turn and eyes drop to the
celebrities’ feet, lacquered red outsoles on high-heeled, black shoes
flaunt a glamorous statement that pops out at once.” As clearly sug-
gested by the District Court, it is the contrast between the sole and
the upper that causes the sole to ”pop,” and to distinguish its creator.
The evidentiary record further demonstrates that the Louboutin
mark is closely associated with contrast. For example, Pinault, the
chief executive of YSL’s parent company, wrote that the ”distinctive
signature” of the Mark is in its ”contrast with the general presenta-
tion of the shoe, particularly its upper.” Of the hundreds of pictures
of Louboutin shoes submi ed to the District Court, only four were
monochrome red. And Louboutin’s own consumer surveys show
914 CHAPTER 9. DESIGN
that when consumers were shown the YSL monochrome red shoe, of
those consumers who misidentified the pictured shoes as Louboutin-
made, nearly every one cited the red sole of the shoe, rather than its
general red color.
Because we conclude that the secondary meaning of the mark held
by Louboutin extends only to the use of a lacquered red outsole that
contrasts with the adjoining portion of the shoe, we modify the Red
15 U.S.C. § 1119 Sole Mark, pursuant to Section 37 of the Lanham Act, insofar as it
is sought to be applied to any shoe bearing the same color ”upper”
as the outsole. We therefore instruct the Director of the Patent and
Trade Office to limit the registration of the Red Sole Mark to only
those situations in which the red lacquered outsole contrasts in color
with the adjoining ”upper” of the shoe.
In sum, we hold that the Red Sole Mark is valid and enforce-
able as modified. This holding disposes of the Lanham Act claims
brought by both Louboutin and YSL because the red sole on YSL’s
monochrome shoes is neither a use of, nor confusingly similar to, the
Red Sole Mark. Having limited the Red Sole Mark as described above,
and having established that the red sole used by YSL is not a use of
the Red Sole Mark, it is axiomatic that we need not – and should not
– address either the likelihood of consumer confusion or whether the
modified Mark is functional.
3 Design Patent
Kal Raustiala & Christopher Sprigman
92 Va. L. Rev. 1687 (2006)
The Piracy Paradox, Innovation and Intellectual Property in Fashion
Design
The design patent provision fails to shelter fashion design for two
principal reasons.
The first reason is doctrinal. Unlike copyright, which extends to
all ”original” expression, that is, all expression not copied in its en-
tirety from others and that contains a modicum of creativity, design
patents are available only for designs that are truly ”new,” and does
not extend to designs that are merely reworkings of previously exist-
ing designs. Because so many apparel designs are reworkings and
are not ”new” in the sense that the patent law requires, most will not
qualify for design patent protection.
There is, moreover, a second and more substantial limitation to
the relevance of design patent as a form of protection for fashion de-
signs. The process of preparing a patent application is expensive, the
waiting period lengthy (more than eighteen months, on average, for
design patents), and the prospects of protection uncertain (the United
States Patent and Trademark Office rejects roughly half of all applica-
F. FASHION 915
tions for design patents). Given the short shelf-life of many fashion
designs, the design patent is simply too slow and uncertain to be rel-
evant.
4 Sui Generis Protection?
James Surowiecki The New Yorker (Sept. 24, 2007)
The Piracy Paradox
Designers’ frustration at seeing their ideas mimicked is understand-
able. But this is a classic case where the cure may be worse than
the disease. There’s li le evidence that knockoffs are damaging the
business. Fashion sales have remained more than healthy—estimates
value the global luxury-fashion sector at a hundred and thirty bil-
lion dollars— and the high-end firms that so often see their designs
copied have become stronger. More striking, a recent paper by the
law professors Kal Raustiala and Christopher Sprigman suggests that
weak intellectual-property rules, far from hurting the fashion indus-
try, have instead been integral to its success. The professors call this
effect “the piracy paradox.”
The paradox stems from the basic dilemma that underpins the
economics of fashion: for the industry to keep growing, customers
must like this year’s designs, but they must also become dissatisfied
with them, so that they’ll buy next year’s. Many other consumer
businesses face a similar problem, but fashion—unlike, say, the tech-
nology industry—can’t rely on improvements in power and perfor-
mance to make old products obsolete. Raustiala and Sprigman argue
persuasively that, in fashion, it’s copying that serves this function,
bringing about what they call “induced obsolescence.” Copying en-
ables designs and styles to move quickly from early adopters to the
masses. And since no one cool wants to keep wearing something af-
ter everybody else is wearing it, the copying of designs helps fuel the
incessant demand for something new.
The situation is not necessarily easy on designers, who have to
keep coming up with new ideas rather than being able to milk a trend
for years. But it means that in the industry as a whole there is more
innovation, more competition, and probably more sales than there
otherwise would be. And the absence of copyrights and patents also
creates a more fertile ground for that innovation, since designers are
able to take other people’s ideas in new directions. Had the designers
who came up with the pinstripe or the stile o heel been able to bar
others from using their creations, there would have been less innova-
tion in fashion, not more.
If copying were pu ing a serious dent in designers’ profits, it
might slow the pace of innovation, since designers would have less
916 CHAPTER 9. DESIGN
incentive to produce good work. But while knockoffs undoubtedly
do steal some sales from originals, they are, for the most part, tar-
geted at an entirely different market segment—people who appreci-
ate high style but can’t afford high prices. That limits the damage
knockoffs do, as does the fact that fashion is one of the few indus-
tries in the world where people are still willing to pay a considerable
premium to own original brands instead of imitations. (That’s why
counterfeits, which pretend to be original products, are illegal.) The
best evidence of this is the fact that luxury-goods makers, far from
cu ing their prices in response to the knockoff boom, have instead
been able to raise prices consistently. In fact, given the importance to
fashion of what the law professor Jonathan Barne calls “aspirational
utility”—the enjoyment people get from imitating the life style of the
rich and famous—one might think of knockoffs as being like gateway
drugs: access to the lower-quality version makes buyers all the more
interested in eventually ge ing the real stuff.
C. Scott Hemphill & Jeannie Suk
61 Stan. L. Rev. 1147 (2009)
The Law, Culture, and Economics of Fashion
Copying in fashion is not a new problem. U.S. designers in the early
20th century – and, before that, French couturiers – were plagued
by competitors who made sketches at shows or measured the seams
of procured originals to discern their pa erns, and then used local
labor to make the copies. Often, these copies could be accomplished
quickly, and the copies reached the market before the original.
What has changed is not the fact or speed of copying, but the large
scale and low cost at which rapid copies can be made. (For compari-
son, just think of music, where rapid copying has long been feasible,
while large-scale, low-cost rapid copying is a new phenomenon.) To-
day, a pa ern can be based upon an Internet broadcast of the runway
show and transmi ed electronically to a low- cost contract manufac-
turer overseas. A gradual easing in import quotas, begun in 1995, has
increased scale and thereby lowered overseas manufacturing costs.
Electronic communications and express shipping ensure that proto-
types and finished articles can be brought to market quickly. As a
result, thousands of inexpensive copies of a new design can be pro-
duced, from start to finish, in six weeks or less.
The most striking consequence of low-cost, high-scale, rapid copy-
ing is not in beating an original to market, but in the ability to wait
and see which designs succeed, and copy only those. Copyists can
choose a target after retailers have made their buying decisions, or
even after the product reaches stores, and customers have begun to
buy. Such copyists can reach market well before the relevant trend
has ended.
Retailers and manufacturers exploit the resulting opportunity.
F. FASHION 917
They sell copies at a discount to the original – necessarily, given the
lower quality – but earn a profit thanks to lower unit costs and the
avoided expense of design. The most notorious copyist retailer is For-
ever 21, though copying also extends to a wide range of department
stores and specialty clothing retailers.
Copying is not a necessary element of the fast-fashion business
model. Even retailers that sell copies do not sell only copies. And
some fast-fashion firms eschew line-for-line copies. For example, the
two leading fast-fashion firms, Zara and H&M, avoid close copying.
Although Zara and H&M may have become conflated with Forever
21 in the public mind, their strategies are different. Like the copy-
ists, they move product to market very quickly. But their on-trend
product, reactive though it is to the latest offerings of top designers,
is not a precise copy. Instead, it is an adaptation or interpretation,
developed by in-house designers.
A common normative response against the idea of intellectual
property protection for fashion design grows out of the assumption
that fashion is a visible marker of status. On this theory, making
it more difficult to copy fashion may seem undesirable because it
would promote the ability of wealthy people to enjoy and signal their
status through apparel that only they can have, and thwart those
who want to purchase cheaper knockoffs of those goods. After all,
if rampant copying makes available cheaper knockoffs, that may dis-
rupt the ability of the wealthy to distinguish themselves as a group
through the signal of fashion. On this view, perhaps permission
to copy effectively softens the socially stratifying effects of fashion,
while legal restrictions on copying would reinforce them.
But there is much more to fashion than signals about status. In
light of the broader and more varied communicative and expressive
aspects of fashion, status is only one of a wide variety of signals that
fashion makes possible. Fashion has the potential to afford a broad
vocabulary for the expression of a vast range of possible messages.
Conscious or not, people’s fashion choices signify and communicate,
with meaningful individual and collective valences. We have identi-
fied this dynamic between differentiation and flocking as the key to
the experience of fashion in social life. People use fashion to signal in-
dividual differences while also partaking in common movement with
the collectivity.
The current intellectual property regime, in which legal protec-
tion from design copying is lacking, tends, if anything, to push fash-
ion consumption and production in the direction of status and luxury
rather than more polyvalent innovation. In sum, we have noted two
distortions. The first is toward the creation of designs that are legally
more difficult to copy. Trademark and trade dress already protect the
most salient status-signaling items in fashion, those adorned with lo-
918 CHAPTER 9. DESIGN
gos of high-end brands. Therefore, those who want to enable effective
status signal-jamming should be critical of trademark protection, and
not necessarily resist copyright protection for fashion design. The sec-
ond distortion is toward the creation of goods that are naturally (as
opposed to legally) more difficult to copy, or goods that are more
difficult for design copying to harm – for example, goods involving
unusual or expensive materials or difficult workmanship.
The result of these distortions is to push creators toward the high-
end realm of status and luxury, and away from devoting creative re-
sources to design innovation. In a regime that protected original de-
signs from copying, we would expect to see a shift in resources from
developing brand-name or luxury goods or a empting close copies
of designs toward developing a richer, more polycentric language of
fashion that draws on and reinvents available inspirations and influ-
ences. We would expect to see greater range and variety in fashion
innovation that would enlarge the vocabulary and the set of symbols
with which we may produce meaning.
At bo om, though, the main reason not to accommodate the
lovers of cheap fashion knockoffs is more basic. It is the same rea-
son that we do not have a legal regime that permits people freely to
make and sell photocopies of another author’s book and retain the
profits. It is the theory of incentives. Obviously, people always want
to purchase inexpensive copies of creative works or have them for
free. The reason to disallow it is not to deprive them of that benefit
but rather to provide creators with an incentive to create. That is no
less true in fashion.
Innovative Design Protection Act of 2012
S. 3523 (as introduced Sept. 10, 2012)
A BILL
To amend title 17, United States Code, to extend protection to fash-
ion design, and for other purposes. [The IDPA would have amended
chapter 13 as follows:]
17 U.S.C. S 1301
(a) Designs Protected. –
Designs protected (1) In general. – The designer or other owner of an original de-
sign of a useful article which makes the article a ractive or
distinctive in appearance to the purchasing or using public
may secure the protection provided by this chapter upon
complying with and subject to this chapter.
(2) Vessel features. – The design of a vessel hull, deck, or com-
bination of a hull and deck, including a plug or mold, is
subject to protection under this chapter, notwithstanding
section 1302(4).
F. FASHION 919
(4) Fashion Design. -- A fashion design is subject to protection under
this chapter.
(b) Definitions. – For the purpose of this chapter, the following
terms have the following meanings:
(1) A design is ”original” if it is the result of the designer’s cre-
ative endeavor that provides a distinguishable variation
over prior work pertaining to similar articles which is more
than merely trivial and has not been copied from another
source.
(2) A ”useful article” is a vessel hull or deck, including a plug
or mold, or an article of apparel, which in normal use has an
intrinsic utilitarian function that is not merely to portray
the appearance of the article or to convey information. An
article which normally is part of a useful article shall be
deemed to be a useful article.
(8) A "fashion design"
(A) is the appearance as a whole of an article of apparel, includ-
ing its ornamentation; and
(B) includes original elements of the article of apparel or the orig-
inal arrangement or placement of original or non-original el-
ements as incorporated in the overall appearance of the arti-
cle of apparel that --
(i) are the result of a designer’s own creative endeavor; and
(ii) provide a unique, distinguishable, non-trivial and non-
utilitarian variation over prior designs for similar types
of articles.
(10) The term ‘apparel’ means --
(A) an article of men’s, women’s, or children’s clothing, including
undergarments, outerwear, gloves, footwear, and headgear;
(B) handbags, purses, wallets, tote bags, and belts; and
(C) eyeglass frames.
(11) In the case of a fashion design, the term ‘substantially identical’
means an article of apparel which is so similar in appearance as
to be likely to be mistaken for the protected design, and contains
only those differences in construction or design which are merely
trivial.”; and
(c) Rule Of Construction. -- In the case of a fashion design under this chap-
ter, those differences or variations which are considered non-trivial for
the purposes of establishing that a design is subject to protection under
subsection (b)(8) shall be considered non-trivial for the purposes of es-
tablishing that a defendant’s design is not substantially identical under
subsection (b)(11) and section 1309(e)
920 CHAPTER 9. DESIGN
17 U.S.C S 1302
Protection under this chapter shall not be available for a design that
Designs not subject to protection is –
(1) not original;
(2) staple or commonplace, such as a standard geometric figure, a
familiar symbol, an emblem, or a motif, or another shape, pat-
tern, or configuration which has become standard, common,
prevalent, or ordinary;
(3) different from a design excluded by paragraph (2) only in in-
significant details or in elements which are variants commonly
used in the relevant trades;
(4) dictated solely by a utilitarian function of the article that em-
bodies it; or
(5) (A) in the case of a design of a vessel hull embodied in a useful ar-
ticle that was made public by the designer or owner in the
United States or a foreign country more than 2 years be-
fore the date of the application for registration under this
chapter.
(B) in the case of a fashion design, embodied in a useful article that
was made public by the designer or owner in the United States or
a foreign country before the date of enactment of this chapter or
more than 3 years before the date upon which protection of the
design is asserted under this chapter.
17 U.S.C § 1303
Protection for a design under this chapter shall be available notwith-
Revisions, adaptations, and rearrange- standing the employment in the design of subject ma er excluded
ments from protection under section 1302 if the design is a substantial revi-
sion, adaptation, or rearrangement of such subject ma er. Such pro-
tection shall be independent of any subsisting protection in subject
ma er employed in the design, and shall not be construed as secur-
ing any right to subject ma er excluded from protection under this
chapter or as extending any subsisting protection under this chap-
ter. The presence or absence of a particular color or colors or of a pictorial or
graphic work imprinted on fabric shall not be considered in determining the
protection of a fashion design under section 1301 or 1302 or in determining
infringement under section 1309.
17 U.S.C § 1305
(a) In General. – Subject to subsection (b), the protection provided
Term of protection under this chapter
(a) for a design of a vessel hull, shall continue for a term of
10 years beginning on the date of the commencement of
protection under section 1304; and
(b) for a fashion design, shall continue for a term of 3 years begin-
F. FASHION 921
ning on the date of the commencement of protection under sec-
tion 1304.
(d) Fashion Design. – 17 U.S.C § 1306
(1) In General. -- In the case of a fashion design, the owner of the Design notice
design shall provide written notice of the design protection to any
person the design owner has reason to believe has violated or will
violate this chapter.
(3) Commencement of Action. -- An action for infringement of a fash-
ion design under this chapter shall not commence until the date
that is 21 days after the date on which written notice required un-
der this subsection was provided to the defendant.
(4) Limitation on Damages. -- A person alleged to be undertaking
action leading to infringement under this chapter shall be held li-
able only for damages and profits accrued after the date on which
the action for infringement is commenced against such person
under paragraph (3).
The owner of a design protected under this chapter has the exclusive 17 U.S.C § 1308
right to – Exclusive rights
(1) make, have made, or import, for sale or for use in trade, any
useful article embodying that design; and
(2) sell or distribute for sale or for use in trade any useful article
embodying that design.
(b) Acts of Sellers, Importers and Distributors. – A retailer, seller, im- 17 U.S.C § 1309
porter or distributor of an infringing article who did not make or Infringement
import the article shall be deemed to have infringed on a design
protected under this chapter only if that person –
(1) induced or acted in collusion with a manufacturer to make,
or an importer to import such article, except that merely
purchasing or giving an order to purchase such article in
the ordinary course of business shall not of itself constitute
such inducement or collusion; or
(2) refused or failed, upon the request of the owner of the de-
sign, to make a prompt and full disclosure of that person’s
source of such article, and that person orders or reorders
such article after receiving notice by registered or certified
mail of the protection subsisting in the design.
(c) Acts Without Knowledge. – It shall not be infringement under
this section to make, have made, import, sell, offer for sale, or
distribute, any article embodying a design which was created
922 CHAPTER 9. DESIGN
without knowledge either actual or reasonably inferred from the to-
tality of the circumstances that a design was protected under this
chapter and was copied from such protected design.
(d) Acts in Ordinary Course of Business. – A person who incorpo-
rates into that person’s product of manufacture an infringing
article acquired from others in the ordinary course of business,
or who, without knowledge of the protected design embodied
in an infringing article, makes or processes the infringing article
for the account of another person in the ordinary course of busi-
ness, shall not be deemed to have infringed the rights in that
design under this chapter except under a condition contained
in paragraph (1) or (2) of subsection (b). Accepting an order or
reorder from the source of the infringing article shall be deemed
ordering or reordering within the meaning of subsection (b)(2).
(e)(f) Infringing Article Defined. – (1) In General. -- As used in this sec-
tion, an “infringing article” is any article the design of which has
been copied from a design protected under this chapter, with-
out the consent of the owner of the protected design. An infring-
ing article is not an illustration or picture of a protected design
in an advertisement, book, periodical, newspaper, photograph,
broadcast, motion picture, or similar medium. (2) Vessel Hull De-
sign. -- In the case of a design of a vessel hull, a design shall not be
deemed to have been copied from a protected design if it is orig-
inal and not substantially similar in appearance to a protected
design. (3) Fashion Design. -- In the case of a fashion design, a de-
sign shall not be deemed to have been copied from a protected design
if that design -- (A) is not substantially identical in overall visual appear-
ance to and as to the original elements of a protected design; or (B) is
the result of independent creation.
(g)(h) Reproduction for Teaching or Analysis. – It is not an infringement
of the exclusive rights of a design owner for a person to repro-
duce the design in a useful article or in any other form solely for
the purpose of teaching, analyzing, or evaluating the appear-
ance, concepts, or techniques embodied in the design, or the
function of the useful article embodying the design.
(i) Home Sewing Exception. --
(1) In general. -- It is not an infringement of the exclusive rights of
a design owner for a person to produce a single copy of a pro-
tected design for personal use or for the use of an immediate fam-
ily member, if that copy is not offered for sale or use in trade during
the period of protection.
(2) Rule of Construction. -- Nothing in this subsection shall be con-
strued to permit the publication or distribution of instructions or
F. FASHION 923
patterns for the copying of a protected design.
(a) Time Limit for Application for Registration. – In the case of a design 17 U.S.C § 1310
of a vessel hull, protection under this chapter shall be lost if appli- Application for registration
cation for registration of the design is not made within 2 years
after the date on which the design is first made public. Registra-
tion shall not apply to fashion designs.
924 CHAPTER 9. DESIGN
10
Software
The programmer, like the poet, works only slightly re- Frederick P. Brooks, The Mythical Man-
moved from pure thought-stuff. He builds his castles in Month (1975)
the air, from air, creating by exertion of the imagination.
Few media of creation are so flexible, so easy to polish and
rework, so readily capable of realizing grand conceptual
structures. Yet the program construct, unlike the poet’s
words, is real in the sense that it moves and works, pro-
ducing visible outputs separate from the construct itself.
The magic of myth and legend has come true in our time.
One types the correct incantation on a keyboard, and a dis-
play screen comes to life, showing things that never were
nor could be.
Software presents a subtly different functionality problem than phys-
ical designs do. Software is plainly functional: when run on a com-
puter, it does something. But there are at least two distinct ways in
which software might be more than just functional. First, the soft-
ware’s code might contain nonexpressive elements: multiple differ-
ent programs can do the same thing, so a programmer typically has
at least some design choices not dictated by a given function. Sec-
ond, the thing the software does might be expressive: it might show
a movie or play a song. (Recall Stern’s treatment of a video game as
an audiovisual work.) Complicating ma ers even more, a program’s
output might itself be both aesthetic and functional, which is typically
the case for user interfaces. Pay a ention to how each body of intel-
lectual property law teases out these different aspects of software.
A Trade Secret
Trade secret protection is obviously available and effective for soft-
ware used internally within a business. The more interesting ques-
tion is whether and how a business can make software available to
926 CHAPTER 10. SOFTWARE
others while mainting at least some of the software’s design as a se-
cret. A later chapter will consider whether contractual restrictions
help, but for now, focus on the practical question of what software
necessarily discloses to its users.
Barr-Mullin, Inc. v. Browning
424 S.E.2d 226 (N.C. Ct. App. 1993)
According to defendants, the COMPU-RIP software is not a trade
secret since it is (1) not subject to reasonable efforts to maintain its
secrecy and (2) defendants reverse engineered this software. The
COMPU-RIP software is contained in the form of ”programmable
read-only memory chips” (PROMS) imbedded in the COMPU-RIP
machinery. These PROMS contain only the ”object code” version of
the computer program. This is the version of the computer software
which is ”read” by the computer’s machinery. Computer program-
mers do not write computer software in object code; rather, the soft-
ware is wri en in ”source code” and then translated into object code
so that the computer can execute the program. Since the COMPU-RIP
software was sold in PROM form, the source code was not available
to the general public.
The affidavits of Timothy Toombs and Gary Ruggles, who holds
a Ph.D. in Electrical Engineering, indicate that because the COMPU-
RIP software is distributed in object code form it is practically impos-
sible to make any meaningful changes to the software. This evidence
establishes the COMPU-RIP software was subject to reasonable ef-
forts to maintain its secrecy. As to the question of reverse engineer-
ing, the affidavits indicate that it is practically impossible to make any
modification to the COMPU-RIP software using only the object code
contained in the PROMS. We find the evidence presented establishes
the COMPU-RIP software was not ”readily ascertainable” through
Barr-Mullin Compu-Rip rip saw feeder reverse engineering.
Silvaco Data Systems v. Intel Corp.
184 Cal. App. 4th 210 (2010)
Silvaco develops and markets computer applications for the elec-
tronic design automation (EDA) field, which covers the entire com-
plex process of designing electronic circuits and systems. Among the
various subcategories of EDA software are circuit simulators, which
permit the designer to create a virtual model of a proposed circuit in
order to test its properties before incurring the expense and delay of
manufacturing a working prototype.
Among Silvaco’s software products is SmartSpice, an analog cir-
cuit emulator. In December 2000, Silvaco filed a suit against Circuit
Semantics, Inc. (CSI), a competing developer of EDA software, alleg-
ing that CSI, aided by two former Silvaco employees, had misappro-
priated trade secrets used in SmartSpice, and had incorporated them
SmartSpice screenshot in its own product, DynaSpice. Silvaco eventually secured a judg-
A. TRADE SECRET 927
ment against CSI. It then brought actions against several purchasers
of CSI software, including Intel. It alleged that by using CSI’s soft-
ware, these end users had misappropriated the Silvaco trade secrets
assertedly incorporated in that software.
The parties appear to agree, and we may accept for purposes of
this opinion, that ”source code” describes the text in which computer
programs are originally wri en by their human authors using a high-
level programming language.4 . One who possesses the source code
for a program may readily ascertain its underlying design, and may
directly incorporate it, or pieces of it, into another program. In order
to yield a functioning computer application, however, source code
must generally be translated or ”compiled” into machine-readable
(executable) code. After a program is compiled, it may still be rep-
resented as text, but the text is not readily intelligible to human be-
ings, consisting of strings of binary (base 2) or hexadecimal (base
16) numbers.5 For this reason, the source code for many if not most
commercial software products is a secret, and may remain so despite
widespread distribution of the executable program.
A. Question Presented
The contention presents a question of law: whether a defendant can
be liable for misappropriation of a trade secret which is admi edly
embodied in source code, based upon the act of executing, on his
own computer, executable code allegedly tainted by the incorpora-
tion of design features wrongfully derived from the plaintiff’s source
4
This is an accurate enough description where, as here, the facts conform to what
one writer has called the ”Standard Scenario.” Ed Felten, Source Code and Object
Code. In this scenario, human programmers write a program in a high-level pro-
gramming language; this source code is then processed through software known as
a compiler to produce object code that may be executed on a machine. Departures
from the standard scenario, however, are increasingly common. Another writer
asserts that among programmers the terms ”source” and ”object” do not really
describe ”well-defined classes of code” but are ”actually relative terms.” David S.
Toure ky, Source vs. Object Code: A False Dichotomy He continues, ”Given a device
for transforming programs from one form to another, source code is what goes
into the device, and object code (or ‘target’ code) is what comes out. The target
code of one device is frequently the source code of another.” The upshot seems to
be that the correct use of these terms reflects variables that may not have any partic-
ular legal significance. Here, the essential variable for legal purposes is the extent
to which the code reveals the underlying design, i.e., the methods and algorithms
used by the developer. See Felten (suggesting distinctions based on whether code is
in ”‘he form in which programmers customarily read and edit it’” and the extent to
which it is ”human-readable”). The distinguishing feature for our purposes is that
what the parties call ”source” code is wri en by programmers and readily under-
stood by them, whereas object or machine code is compiled by and for machines
and does not readily yield its underlying design to human understanding.
5
For example, the instruction MOV for an Intel 32-bit microprocessor may be rep-
resented as 10110000 01100001 in binary code or B0 61 in hexadecimal.
928 CHAPTER 10. SOFTWARE
code. It is undisputed that the object code executed by Intel could
not disclose the underlying source code or permit the exploitation of
its features and design. It could not, in short, impart knowledge of
the trade secret. The question is whether, in such circumstances, Intel
could be found to have misappropriated Silvaco’s trade secrets.
B. Trade Secret
It is critical to any CUTSA cause of action – and any defense – that the
information claimed to have been misappropriated be clearly identi-
fied. Pursuant to this requirement, Silvaco filed a document, under
seal, designating the trade secrets claimed by it. The designation iden-
tified trade secrets in six categories. The first five categories referred
only to source code.
The sixth category of claimed trade secrets was described as ”the
... trade secrets identified in Exhibit B ... and the source code imple-
menting such trade secrets.” Exhibit B consists of 22 pages of techni-
cal verbiage most of which may be readily intelligible only to those
within the EDA field. This much, however, seems reasonably clear:
the exhibit does not designate information as such but rather de-
scribes various features, functions, and characteristics of the design
and operation of Silvaco’s software products. Thus the first of the 24
listed subcategories is a ”proprietary method” of carrying out a func-
tion apparently found in competing programs as well. This asserted
secret is also described as ”a methodology for” implementing that
function, apparently in an unusual way, which ”contributes to per-
formance and accuracy improvements.” This ”trade secret methodol-
ogy” is ”implemented” by two named ”modules,” also described as
”functions,” which ”represent part” of the critical ”algorithm.” Three
”unique features” of this method are listed: The ”integration” of two
other operations; a ”method” of ”changing and controlling” a vari-
able, which ”affects the performance of the simulation”; and a mode
Do you understand what the court is of ”implementation” that produces ”efficiency.”
talking about here? Did the court? Sil- Silvaco’s sixth category thus appears to a empt to characterize
vaco's lawyers? various aspects of the underlying design as trade secrets. The design
may constitute the basis for a trade secret, such that information con-
cerning it could be actionably misappropriated; but it is the informa-
tion – not the design itself – that must form the basis for the cause of
action. And while the finished (compiled) product might have dis-
tinctive characteristics resulting from that design – such as improved
performance – they cannot constitute trade secrets because they are
not secret, but are evident to anyone running the finished program.
Indeed, to the extent they tend to disclose the underlying design, it
ceases to be a protectable secret for that same reason. The sixth cate-
gory therefore fails to describe a trade secret other than source code.
Since none of the other categories even purport to do so, Intel is quite
A. TRADE SECRET 929
correct to premise its argument on the proposition that the only trade
secrets at issue are found in Silvaco’s source code.
C. Misappropriation
Misappropriation of a trade secret may be achieved through three
types of conduct: ”acquisition,” ”disclosure,” or ”use.”
There is no suggestion that Intel ever disclosed Silvaco’s source
code to anyone, and it is difficult to see how it might have done so
since there is no evidence that it ever had the source code to disclose.
Silvaco emphasizes that wrongful acquisition of a trade secret may
be actionable in itself. But there is no basis to suppose that Intel ever
”acquired” the source code constituting the trade secrets.
Silvaco has never explained how any conduct by Intel constituted
”use” of its source code. One clearly engages in the ”use” of a se-
cret, in the ordinary sense, when one directly exploits it for his own
advantage, e.g., by incorporating it into his own manufacturing tech-
nique or product. But ”use” in the ordinary sense is not present when
the conduct consists entirely of possessing, and taking advantage of,
something that was made using the secret.
One who bakes a pie from a recipe certainly engages in the ”use”
of the la er; but one who eats the pie does not, by virtue of that act
alone, make ”use” of the recipe in any ordinary sense, and this is true
even if the baker is accused of stealing the recipe from a competitor,
and the diner knows of that accusation. Yet this is substantially the
same situation as when one runs software that was compiled from al-
legedly stolen source code. The source code is the recipe from which
the pie (executable program) is baked (compiled). Nor is the anal-
ogy weakened by the fact that a diner is not ordinarily said to make
”use” of something he eats. His metabolism may be said to do so, or
the analogy may be adjusted to replace the pie with an instrument,
such as a stopwatch. A coach who employs the la er to time a race
certainly makes ”use” of it, but only a sophist could bring himself to
say that coach ”uses” trade secrets involved in the manufacture of the
watch.
Intel appears to have been in substantially the same position as
the customer in the pie shop who is accused of stealing the secret
recipe because he bought a pie with knowledge that a rival baker had
accused the seller of using the rival’s stolen recipe. The customer does
not, by buying or eating the pie, gain knowledge of the recipe used
to make it.
Strong considerations of public policy reinforce the commonsense
conclusion that using a product does not constitute a ”use” of trade
secrets employed in its manufacture. If merely running finished soft-
ware constituted a use of the source code from which it was compiled,
then every purchaser of software would be exposed to liability if it
930 CHAPTER 10. SOFTWARE
were later alleged that the software was based in part upon purloined
source code. This risk could be expected to inhibit software sales and
discourage innovation to an extent far beyond the intentions and pur-
pose of CUTSA.
B Patent
1 Subject Matter
a Then
417 F.2d 1395 (CCPA 1969)
In re Bernhart
[Two Boeing employees developed a mathematical technique to dis-
For a discussion of the mathematics in- play two-dimensional representations of three-dimensional objects.
volved, see Andrew Chin, Ghost in the They claimed, for example:]
"New Machine", 16 N.C. J.L. & Tech. 623
(2015). 13 A plo ing method ... comprising:
(a) a first step of programming the computer to compute the
position of planar Cartesian coordinate axes in the given
plane relative to the given set of object points …
(c) the step of applying the computer output to the input of
a planar plo ing apparatus adapted to provide on a plane
a succession of straightline segments that connect between
sequential points having positions corresponding to the co-
ordinates computed by the second step.
18 A system for providing a drawing of an object comprising in
combination: electronic digital computer means programmed
Figure 2 from the application to respond to applied signals (xe,ye,ze) and a series of groups
The patent ultimately issued as U.S. Pat. of signals (xi,yi,zi) to provide a corresponding series of pairs
No. 3,519,997 of output signals (vi,wi) with the relationship between signals
(xi,yi,zi) and (xe,ye,ze) to the signals (vi,wi) being defined as
follows …
Looking first at the apparatus claims, these claims recite, and can be
infringed only by, a digital computer in a certain physical condition,
i. e., electro-mechanically set or programmed to carry out the recited
routine. Accordingly, we think it clear that applicants have not de-
fined as their invention anything in which the human mind could be
used as a component. Nor are the ”printed ma er” cases, cited by
the board, supra, controlling as to these apparatus claims either on
the facts or in principle. On their facts, those cases dealt with claims
defining as the invention certain novel arrangements of printed lines
or characters, useful and intelligible only to the human mind. Here
the invention as defined by the claims requires that the information be
processed not by the mind but by a machine, the computer, and that
B. PATENT 931
the drawing be done not by a draftsman but by a plo ing machine.
There is one further rationale used by both the board and the ex-
aminer, namely, that the provision of new signals to be stored by the
computer does not make it a new machine, i.e. it is structurally the
same, no ma er how new, useful and unobvious the result. This ra-
tionale really goes more to novelty than to statutory subject ma er
but it appears to be at the heart of the present controversy. To this
question we say that if a machine is programmed in a certain new
and unobvious way, it is physically different from the machine with-
out that program; its memory elements are differently arranged. The
fact that these physical changes are invisible to the eye should not
tempt us to conclude that the machine has not been changed. If a
new machine has not been invented, certainly a ”new and useful im-
provement” of the unprogrammed machine has been, and Congress
has said in § 101 that such improvements are statutory subject mat-
ter for a patent. It may well be that the vast majority of newly pro-
grammed machines are obvious to those skilled in the art and hence
unpatentable under § 103. We are concluding here that such ma-
chines are statutory under § 101, and that claims defining them must
be judged for patentability in light of the prior art.
In re Alappat
33 F.3d 1526 (Fed. Cir. 1994)
[Alappat’s invention dealt with the problem of displaying continu-
ous analog signals on a discrete digital display. Illuminating only the
closest pixels to the signal results in jagged, uneven edges. In Alap-
pat’s method, all the pixels close to the signal are illuminated, with
brightness proportional to how close they are to the signal.] Employ-
ing this anti-aliasing technique eliminates any apparent discontinu- (Rich, J.)
ity, jaggedness, or oscillation in the waveform, thus giving the visual
appearance of a smooth continuous waveform. In short, and in lay
terms, the invention is an improvement in an oscilloscope compara-
ble to a TV having a clearer picture.Figure 4 from the application images/alappat.png
Claim 15, the only independent claim in issue, reads: The patent issued as U.S. Pat. No.
5,440,676
A rasterizer for converting vector list data represent-
ing sample magnitudes of an input waveform into anti-
aliased pixel illumination intensity data to be displayed
on a display means comprising:
(a) means for determining the vertical distance between
the endpoints of each of the vectors in the data list;
(b) means for determining the elevation of a row of pix-
els that is spanned by the vector;
(c) means for normalizing the vertical distance and ele-
vation; and
932 CHAPTER 10. SOFTWARE
(d) means for outpu ing illumination intensity data as
a predetermined function of the normalized vertical
distance and elevation.
The Board erred in its reasoning that claim 15 is unpatentable merely
because it ”reads on a general purpose digital computer ‘means’
to perform the various steps under program control.” Alappat ad-
mits that claim 15 would read on a general purpose computer pro-
grammed to carry out the claimed invention, but argues that this
alone also does not justify holding claim 15 unpatentable as directed
to nonstatutory subject ma er. We agree. We have held that such pro-
gramming creates a new machine, because a general purpose com-
puter in effect becomes a special purpose computer once it is pro-
grammed to perform particular functions pursuant to instructions
from program software.
Under the Board’s reasoning, a programmed general purpose
computer could never be viewed as patentable subject ma er under
§ 101. This reasoning is without basis in the law. The Supreme Court
has never held that a programmed computer may never be entitled to
patent protection. Indeed, the Benson court specifically stated that its
decision therein did not preclude ”a patent for any program servicing
a computer.” Consequently, a computer operating pursuant to soft-
ware may represent patentable subject ma er, provided, of course,
that the claimed subject ma er meets all of the other requirements of
Title 35. In any case, a computer, like a rasterizer, is apparatus not
mathematics.
Archer, Chief Judge, dissenting:
I disagree with the majority’s conclusion that Alappat’s ”raster-
izer,” which is all that is claimed in the claims at issue, constitutes an
invention or discovery within 35 U.S.C. § 101. Alappat has arranged
known circuit elements to accomplish nothing other than the solving
of a particular mathematical equation represented in the mind of the
reader of his patent application.
Consider for example the discovery or creation of music, a new
song. Music of course is not patentable subject ma er; a composer
cannot obtain exclusive patent rights for the original creation of a mu-
sical composition. But now suppose the new melody is recorded on
a compact disc. In such case, the particular musical composition will
define an arrangement of minute pits in the surface of the compact
disc material, and therefore will define its specific structure. Alterna-
tively suppose the music is recorded on the rolls of a player piano or
a music box.
Through the expedient of pu ing his music on known structure,
can a composer now claim as his invention the structure of a com-
B. PATENT 933
pact disc or player piano roll containing the melody he discovered
and obtain a patent therefor? The answer must be no. The composer
admi edly has invented or discovered nothing but music. The dis-
covery of music does not become patentable subject ma er simply
because there is an arbitrary claim to some structure.
And if a claim to a compact disc or piano roll containing a newly
discovered song were regarded as a ”manufacture” and within § 101
simply because of the specific physical structure of the compact disc,
the ”practical effect” would be the granting of a patent for a discov-
ery in music. Where the music is new, the precise structure of the
disc or roll would be novel under § 102. Because the patent law can-
not examine music for ”nonobviousness,” the Patent and Trademark
Office could not make a showing of obviousness under § 103. The re-
sult would well be the award of a patent for the discovery of music.
Alappat admits that each of the circuitry elements of the claimed
”rasterizer” is old. He says they are merely ”form.” Thus, they are
only a convenient and basic way of electrically representing the math-
ematical operations to be performed, that is, converting vector data
into matrix or raster data. In Alappat’s view, it is the new mathematic
operation that is the ”substance” of the claimed invention or discov-
ery. Claim 15 as a whole thus claims old circuitry elements in an ar-
rangement defined by a mathematical operation, which only performs
the very mathematical operation that defines it. Rather than claiming
the mathematics itself, which of course Alappat cannot do, Alappat
claims the mathematically defined structure. But as a whole, there
is no ”application” apart from the mathematical operation that is as-
serted to be the invention or discovery. What is going on here is a
charade.
This is not to say that digital circuitry cannot be an element in an
otherwise statutory machine. Under Diehr, it can.26
Thus unlike the rubber curing process in Diehr, the claimed raster-
izer here is not an application of mathematics in an otherwise statu-
tory process or product. The rasterizer is simply the mathematical
conversion of data. In Diehr, the input data were derived by a claimed
component of the overall rubber curing process – the press and ther-
mocouple – which fed data to the claimed computer. Here, however,
as the specification and claims indicate, the waveform data converted
by the claimed rasterizer are not required to come from a particular
machine connected up to the rasterizer, and, as Alappat admits, it
does not ma er how the data are selected. The sets of waveform num-
26
Likewise, but not present in this case, improved digital circuitry itself, such as
faster digital processors, would be statutory subject ma er. Unlike the ”rasterizer”
in this case, they are not simply a claimed arrangement of circuit elements defined
by a mathematical operation which does nothing more than solve the operation
that defines it.
934 CHAPTER 10. SOFTWARE
bers converted by the claimed rasterizer could come simply from the
mind and hand of a person. The end product of the claimed rasterizer
is not precisely cured rubber as it was in Diehr but rather different
data as a mathematical function of the original data. Sure the data
have some use. Most data have uses, and that is why people spend
time calculating data. But just having some use for data does not
make the creation of particular data patentable. Alappat’s claimed
rasterizer is newly discovered mathematics and not the invention or
discovery of a process or product applying it.
Finally, a ”general purpose computer” issue has been raised as an
aside in this case. Ge ing back to the music analogy, Alappat is like
a composer who claims his song on a compact disc, and then argues
that the compact disc is equivalent to a player piano or a music box
with the song on a roll or even sheet music because they all represent
the same song. The composer is thus clearly asking for (and ge ing
from the majority) a patent for the discovery of a song and a patent
covering every physical manifestation of the song.
Thus, a known circuit containing a light bulb, ba ery, and switch
is not a new machine when the switch is opened and closed to re-
cite a new story in Morse code, because the ”invention or discovery”
is merely a new story, which is nonstatutory subject ma er. An old
stereo playing a new song on a compact disc is not a new machine be-
cause the invention or discovery is merely a new song, which is non-
statutory subject ma er. The ”perforated rolls [of a player piano] are
parts of a machine which, when duly applied and properly operated
in connection with the mechanism to which they are adapted, pro-
duce musical tones in harmonious combination.” White-Smith. Yet a
player piano playing Chopin’s scales does not become a ”new ma-
chine” when it spins a roll to play Brahms’ lullaby.29
149 F.3d 1368 (Fed. Cir. 1998) State Street Bank & Trust Co. v. Signature Financial Group
The patented invention [U.S. Pat No. 5,193,056] relates generally to a
system that allows an administrator to monitor and record the finan-
cial information flow and make all calculations necessary for several
mutual funds to pool their investment funds into a single portfolio.
Unpatentable mathematical algorithms are identifiable by show-
ing they are merely abstract ideas constituting disembodied concepts
or truths that are not ”useful.” From a practical standpoint, this
means that to be patentable an algorithm must be applied in a ”use-
ful” way. In Alappat, we held that data, transformed by a machine
29
Of course, a player piano itself could be a new machine, for example in relation
to a music box, and, likewise, a player piano capable because of design of improved
piano-playing might also be a new machine. In such cases, the invention or discov-
ery is the quality of the structure of the piano – its mode of operation – and not the
Figure 4 from the patent particular piece of music being played.
B. PATENT 935
through a series of mathematical calculations to produce a smooth
waveform display on a rasterizer monitor, constituted a practical ap-
plication of an abstract idea (a mathematical algorithm, formula, or
calculation), because it produced ”a useful, concrete and tangible re-
sult” – the smooth waveform.
Similarly, in Arrhythmia Research Technology Inc. v. Corazonix Corp., Arrythmia: 958 F.2d 1053 (Fed. Cir.
we held that the transformation of electrocardiograph signals from a 1992)
patient’s heartbeat by a machine through a series of mathematical
calculations constituted a practical application of an abstract idea (a
mathematical algorithm, formula, or calculation), because it corre-
sponded to a useful, concrete or tangible thing – the condition of a
patient’s heart.
Today, we hold that the transformation of data, representing dis-
crete dollar amounts, by a machine through a series of mathematical
calculations into a final share price, constitutes a practical applica-
tion of a mathematical algorithm, formula, or calculation, because it
produces ”a useful, concrete and tangible result” – a final share price
momentarily fixed for recording and reporting purposes and even ac-
cepted and relied upon by regulatory authorities and in subsequent
trades.
b Now
Alice Corp. v. CLS Bank Int'l
134 S. Ct. 2347 (2014)
The patents at issue in this case disclose a computer-implemented
scheme for mitigating ”se lement risk” (i.e., the risk that only one
party to a financial transaction will pay what it owes) by using a
third-party intermediary. The question presented is whether these
claims are patent eligible under 35 U.S.C. S 101, or are instead drawn
to a patent-ineligible abstract idea. We hold that the claims at issue
are drawn to the abstract idea of intermediated se lement, and that
merely requiring generic computer implementation fails to transform
that abstract idea into a patent-eligible invention.
I
A
Petitioner Alice Corporation is the assignee of several patents that
disclose schemes to manage certain forms of financial risk. Accord-
ing to the specification largely shared by the patents, the invention
”enabl[es] the management of risk relating to specified, yet unknown,
future events.” The specification further explains that the ”invention
relates to methods and apparatus, including electrical computers and
data processing systems applied to financial ma ers and risk manage-
ment.”
936 CHAPTER 10. SOFTWARE
The claims at issue relate to a computerized scheme for mitigat-
ing ”se lement risk” – i.e., the risk that only one party to an agreed-
upon financial exchange will satisfy its obligation. In particular, the
claims are designed to facilitate the exchange of financial obligations
between two parties by using a computer system as a third-party
intermediary. The intermediary creates ”shadow” credit and debit
records (i.e., account ledgers) that mirror the balances in the parties’
real-world accounts at ”exchange institutions” (e.g., banks). The in-
termediary updates the shadow records in real time as transactions
are entered, allowing only those transactions for which the parties’
updated shadow records indicate sufficient resources to satisfy their
mutual obligations. At the end of the day, the intermediary instructs
the relevant financial institutions to carry out the ”permi ed” trans-
actions in accordance with the updated shadow records, thus miti-
gating the risk that only one party will perform the agreed-upon ex-
change.
In sum, the patents in suit claim (1) the foregoing method for
exchanging obligations (the method claims), (2) a computer system
configured to carry out the method for exchanging obligations (the
system claims), and (3) a computer-readable medium containing pro-
gram code for performing the method of exchanging obligations (the
media claims). All of the claims are implemented using a computer;
the system and media claims expressly recite a computer, and the
parties have stipulated that the method claims require a computer as
well.
II
Section 101 of the Patent Act defines the subject ma er eligible for
patent protection. We have long held that this provision contains an
important implicit exception: Laws of nature, natural phenomena,
and abstract ideas are not patentable.
We have described the concern that drives this exclusionary prin-
Bilski: 561 U. S. 593 (2010) ciple as one of pre-emption. See, e.g., Bilski v. Kappos, (upholding the
patent ”would pre-empt use of this approach in all fields, and would
effectively grant a monopoly over an abstract idea”). Laws of nature,
natural phenomena, and abstract ideas are the basic tools of scien-
tific and technological work. Monopolization of those tools through
the grant of a patent might tend to impede innovation more than it
would tend to promote it,” thereby thwarting the primary object of
the patent laws. We have repeatedly emphasized this concern that
patent law not inhibit further discovery by improperly tying up the
future use of these building blocks of human ingenuity.
At the same time, we tread carefully in construing this exclusion-
ary principle lest it swallow all of patent law. At some level, all inven-
tions embody, use, reflect, rest upon, or apply laws of nature, natural
B. PATENT 937
phenomena, or abstract ideas.. Thus, an invention is not rendered
ineligible for patent simply because it involves an abstract concept.
See Diamond v. Diehr. ”Applications” of such concepts ”to a new and Diehr: 450 U.S. 175 (1981)
useful end,” we have said, remain eligible for patent protection.
Accordingly, in applying the S 101 exception, we must distinguish
between patents that claim the building blocks of human ingenuity
and those that integrate the building blocks into something more,
thereby transforming them into a patent-eligible invention, The for-
mer would risk disproportionately tying up the use of the underlying
ideas, and are therefore ineligible for patent protection. The la er
pose no comparable risk of pre-emption, and therefore remain eligi-
ble for the monopoly granted under our patent laws.
III
In Mayo, we set forth a framework for distinguishing patents that
claim laws of nature, natural phenomena, and abstract ideas from
those that claim patent-eligible applications of those concepts. First,
we determine whether the claims at issue are directed to one of those
patent-ineligible concepts. If so, we then ask, what else is there in the
claims before us? To answer that question, we consider the elements
of each claim both individually and as an ordered combination to de-
termine whether the additional elements transform the nature of the
claim into a patent-eligible application. We have described step two
of this analysis as a search for an ”inventive concept” – i.e., an ele-
ment or combination of elements that is sufficient to ensure that the
patent in practice amounts to significantly more than a patent upon
the ineligible concept itself.
A
We must first determine whether the claims at issue are directed to
a patent-ineligible concept. We conclude that they are: These claims
are drawn to the abstract idea of intermediated se lement.
The ”abstract ideas” category embodies the longstanding rule that
an idea of itself is not patentable. In Go schalk v. Benson, for example, Benson: 409 U. S. 63 (1972)
this Court rejected as ineligible patent claims involving an algorithm
for converting binary-coded decimal numerals into pure binary form,
holding that the claimed patent was ”in practical effect a patent on
the algorithm itself.” And in Parker v. Flook, we held that a mathemat- Flook: 437 U.S. 584 (1978)
ical formula for computing ”alarm limits” in a catalytic conversion
process was also a patent-ineligible abstract idea.
We most recently addressed the category of abstract ideas in Bilski.
The claims at issue in Bilski described a method for hedging against
the financial risk of price fluctuations. Claim 1 recited a series of
steps for hedging risk, including: (1) initiating a series of financial
transactions between providers and consumers of a commodity; (2)
938 CHAPTER 10. SOFTWARE
identifying market participants that have a counterrisk for the same
commodity; and (3) initiating a series of transactions between those
market participants and the commodity provider to balance the risk
position of the first series of consumer transactions. Claim 4 put the
concept articulated in claim 1 into a simple mathematical formula.
The remaining claims were drawn to examples of hedging in com-
modities and energy markets.
All members of the Court agreed that the patent at issue in Bil-
ski claimed an abstract idea. Specifically, the claims described the
basic concept of hedging, or protecting against risk. The Court ex-
plained that ”hedging is a fundamental economic practice long preva-
lent in our system of commerce and taught in any introductory fi-
nance class.” The concept of hedging as recited by the claims in suit
was therefore a patent-ineligible abstract idea, just like the algorithms
at issue in Benson and Flook.
It follows from our prior cases, and Bilski in particular, that the
claims at issue here are directed to an abstract idea. Petitioner’s
claims involve a method of exchanging financial obligations between
two parties using a third-party intermediary to mitigate se lement
risk. The intermediary creates and updates ”shadow” records to re-
flect the value of each party’s actual accounts held at ”exchange in-
stitutions,” thereby permi ing only those transactions for which the
parties have sufficient resources. At the end of each day, the interme-
diary issues irrevocable instructions to the exchange institutions to
carry out the permi ed transactions.
On their face, the claims before us are drawn to the concept of
intermediated se lement, i.e., the use of a third party to mitigate set-
tlement risk. Like the risk hedging in Bilski, the concept of interme-
Perhaps the most striking feature of the diated se lement is a fundamental economic practice long prevalent
opinion is its focus on the requirement in our system of commerce. The use of a third-party intermediary
for an ‘‘inventive concept.’’ This choice of (or ”clearing house”) is also a building block of the modern economy.
terminology is perhaps unfortunate, as Thus, intermediated se lement, like hedging, is an ”abstract idea” be-
it closely resembles the terminology of
‘‘inventive step’’ that is used in much of
yond the scope of § 101.
the world to designate the requirement
B
for a patentable invention to be a signifi-
cant advance over the prior art. Typically
Because the claims at issue are directed to the abstract idea of interme-
the ‘‘inventive step’’ requirement, which
is found in many patent systems, includ- diated se lement, we turn to the second step in Mayo’s framework.
ing as Art. 52 of the European Patent Con- We conclude that the method claims, which merely require generic
vention, is considered equivalent to the computer implementation, fail to transform that abstract idea into a
‘‘non-obviousness’’ requirement found in patent-eligible invention.
Sec. 103 of the American patent statute,
rather than equivalent to any U.S. subject 1
matter provision.
—Dan L. Burk, The Inventive Concept in At Mayo step two, we must examine the elements of the claim to deter-
Alice Corp. v. CLS Bank Int'l., 45 IIC 865 mine whether it contains an ”inventive concept” sufficient to ”trans-
(2014). form” the claimed abstract idea into a patent-eligible application. A
B. PATENT 939
claim that recites an abstract idea must include ”additional features”
to ensure ”that the claim is more than a drafting effort designed to
monopolize the abstract idea.”
The introduction of a computer into the claims does not alter the
analysis at Mayo step two. In Benson, for example, we considered a
patent that claimed an algorithm implemented on a general-purpose
digital computer. Because the algorithm was an abstract idea, the
claim had to supply a new and useful application of the idea in or-
der to be patent eligible. But the computer implementation did not
supply the necessary inventive concept; the process could be carried
out in existing computers long in use. We accordingly held that sim-
ply implementing a mathematical principle on a physical machine,
namely a computer, is not a patentable application of that principle.
Flook is to the same effect. There, we examined a computerized
method for using a mathematical formula to adjust alarm limits for
certain operating conditions (e.g., temperature and pressure) that
could signal inefficiency or danger in a catalytic conversion process.
Once again, the formula itself was an abstract idea and the computer
implementation was purely conventional. In holding that the process
was patent ineligible, we rejected the argument that implementing a
principle in some specific fashion will automatically fall within the
patentable subject ma er of § 101. Thus, Flook stands for the propo-
sition that the prohibition against patenting abstract ideas cannot be
circumvented by a empting to limit the use of the idea to a particular
technological environment.
In Diehr, by contrast, we held that a computer-implemented pro-
cess for curing rubber was patent eligible, but not because it involved
a computer. The claim employed a well-known mathematical equa-
tion, but it used that equation in a process designed to solve a techno-
logical problem in conventional industry practice. The invention in
Diehr used a thermocouple to record constant temperature measure-
ments inside the rubber mold – something the industry had not been
able to obtain. The temperature measurements were then fed into
a computer, which repeatedly recalculated the remaining cure time
by using the mathematical equation. These additional steps trans-
formed the process into an inventive application of the formula. In
other words, the claims in Diehr were patent eligible because they
improved an existing technological process, not because they were
implemented on a computer.
These cases demonstrate that the mere recitation of a generic com-
puter cannot transform a patent-ineligible abstract idea into a patent-
eligible invention. Stating an abstract idea ”while adding the words
’apply it’” is not enough for patent eligibility. Mayo. Nor is limiting
the use of an abstract idea to a particular technological environment.
Stating an abstract idea while adding the words ”apply it with a com-
940 CHAPTER 10. SOFTWARE
puter” simply combines those two steps, with the same deficient re-
sult. Thus, if a patent’s recitation of a computer amounts to a mere
instruction to implement an abstract idea on a computer, that addi-
tion cannot impart patent eligibility.
The fact that a computer necessarily exists in the physical, rather
than purely conceptual, realm, is beside the point. There is no dispute
that a computer is a tangible system (in § 101 terms, a ”machine”), or
that many computer-implemented claims are formally addressed to
patent-eligible subject ma er. But if that were the end of the § 101
inquiry, an applicant could claim any principle of the physical or so-
cial sciences by reciting a computer system configured to implement
the relevant concept. Such a result would make the determination of
patent eligibility depend simply on the draftsman’s art, thereby evis-
cerating the rule that laws of nature, natural phenomena, and abstract
ideas are not patentable.
2
The representative method claim in this case recites the following
steps: (1) ”creating” shadow records for each counterparty to a trans-
action; (2) ”obtaining” start-of-day balances based on the parties’ real-
world accounts at exchange institutions; (3) ”adjusting” the shadow
records as transactions are entered, allowing only those transactions
for which the parties have sufficient resources; and (4) issuing irrevo-
cable end-of-day instructions to the exchange institutions to carry out
the permi ed transactions. Petitioner principally contends that the
claims are patent eligible because these steps ”require a substantial
and meaningful role for the computer.” As stipulated, the claimed
method requires the use of a computer to create electronic records,
track multiple transactions, and issue simultaneous instructions; in
other words, the computer is itself the intermediary.
In light of the foregoing, the relevant question is whether the
claims here do more than simply instruct the practitioner to imple-
ment the abstract idea of intermediated se lement on a generic com-
puter. They do not.
Taking the claim elements separately, the function performed by
the computer at each step of the process is purely conventional. Us-
ing a computer to create and maintain ”shadow” accounts amounts
to electronic recordkeeping – one of the most basic functions of a com-
puter. The same is true with respect to the use of a computer to ob-
tain data, adjust account balances, and issue automated instructions;
all of these computer functions are well-understood, routine, conven-
tional activities previously known to the industry. In short, each step
does no more than require a generic computer to perform generic
computer functions.
Considered as an ordered combination, the computer compo-
B. PATENT 941
nents of petitioner’s method add nothing that is not already present
when the steps are considered separately. Viewed as a whole, pe-
titioner’s method claims simply recite the concept of intermediated
se lement as performed by a generic computer. The method claims
do not, for example, purport to improve the functioning of the com-
puter itself. Nor do they effect an improvement in any other technol-
ogy or technical field. Instead, the claims at issue amount to ”nothing
significantly more” than an instruction to apply the abstract idea of
intermediated se lement using some unspecified, generic computer.
Under our precedents, that is not enough to transform an abstract
idea into a patent-eligible invention.
C
Petitioner’s claims to a computer system and a computer-readable
medium fail for substantially the same reasons. Petitioner conceded
below that its media claims rise or fall with its method claims. As
to its system claims, petitioner emphasizes that those claims recite
”specific hardware” configured to perform ”specific computerized
functions.” But what petitioner characterizes as specific hardware –
a ”data processing system” with a ”communications controller” and
”data storage unit,” for example – is purely functional and generic.
Nearly every computer will include a ”communications controller”
and ”data storage unit” capable of performing the basic calculation,
storage, and transmission functions required by the method claims.
As a result, none of the hardware recited by the system claims offers a
meaningful limitation beyond generally linking the use of the method
to a particular technological environment, that is, implementation via
computers.
Put another way, the system claims are no different from the
method claims in substance. The method claims recite the abstract
idea implemented on a generic computer; the system claims recite a
handful of generic computer components configured to implement
the same idea. This Court has long warned against interpreting § 101
in ways that make patent eligibility depend simply on the drafts-
man’s art. Holding that the system claims are patent eligible would
have exactly that result.
Because petitioner’s system and media claims add nothing of sub-
stance to the underlying abstract idea, we hold that they too are
patent ineligible under § 101.
McRO, Inc. v. Bandai Namco Games America Inc.
--- F.3d --- (Fed Cir. Sept. 13, 2016)
[3D animators depict facial expressions by defining the positions of
the vertices for a character’s face as it pronounces different phonemes,
like ”ahh.” The set of vertex positions for a phoneme is a ”morph
target”; the set of positions for a face at rest is the ”neutral model.”
942 CHAPTER 10. SOFTWARE
The difference between a morph target and the neutral model is
the target’s ”delta set.”Traditionally, animators would identify the
”keyframes” for morph targets by working from a ”timed transcrpt”
that listed when the character pronounced each phoneme. A com-
puter would then automatically generate intermediate facial expres-
sions between two keyframes by blending the morph targets for the
two.]
For example, the face halfway between the neutral model and the
“oh” face can be expressed simply by se ing the “oh” morph weight
to 0.5, i.e., 50%, as shown [in the margin] to the left. The model
halfway to the next syllable, in turn, could be expressed by se ing
both the “oh” morph weight and that for the next syllable each to
0.5, creating a blend of those two delta sets. Because the pronounced
phoneme and drawn keyframe corresponded in time, this prior art
process synchronized the lips and facial expression of the 3–D char-
acter.
The patents [Nos. 6,307,576 and 6,611,278] criticize the preexisting
keyframe approach as “very tedious and time consuming, as well as
inaccurate due to the large number of keyframes necessary to depict
speech.” Essentially, the patents aim to automate a 3–D animator’s
Example morph target for the “ahh”
phoneme
tasks, specifically, determining when to set keyframes and se ing
those keyframes. This automation is accomplished through rules that
are applied to the timed transcript to determine the morph weights.
The patents describe many exemplary rule sets that go beyond simply
matching single phonemes from the timed transcript with the appro-
priate morph target. Instead, these rule sets aim to produce more re-
alistic speech by “taking into consideration the differences in mouth
Two facial expression models
positions for similar phonemes based on context.”
One exemplary set of rules provided and applied in the specifi-
cation of the ’576 patent is for a character transitioning from silence
through saying “hello.” This exemplary set of rules provides for in-
serting a transition starting shortly before the first syllable after a si-
lence. The transition marks when the character begins to transition
from silence, shown by the closed-mouthed neutral model, to the
morph target for the first syllable, with its open-mouthed shape. That
is, the rule automates a character’s facial expressions so the character
will wait until shortly before it starts speaking to begin opening its
mouth. In terms of the prior art method, the effect of this rule is to
automatically create a keyframe at a point that no phoneme is being
pronounced. If instead no transition were placed at that position, the
resulting animation would have an unrealistic quality. The character
would open its mouth gradually from the beginning of the sequence
through its first u erance as a result of the computer interpolating
a continuous transition between those two points. In the prior art
Timed transcript of phonemes system, an animator would have to subjectively identify the problem-
B. PATENT 943
atic sequence and manually fix it by adding an appropriate keyframe.
The invention, however, uses rules to automatically set a keyframe
at the correct point to depict more realistic speech, achieving results
similar to those previously achieved manually by animators.
Claim 1 of the ’576 patent is representative and dispositive of the
asserted claims3 for the purposes of appeal:
A method for automatically animating lip synchroniza-
tion and facial expression of three-dimensional characters
comprising:
• obtaining a first set of rules that define output morph
weight set stream as a function of phoneme sequence
and time of said phoneme sequence;
• obtaining a timed data file of phonemes having a plu-
rality of sub-sequences;
• generating an intermediate stream of output morph
weight sets and a plurality of transition parameters
between two adjacent morph weight sets by evaluat-
ing said plurality of sub-sequences against said first
set of rules;
• generating a final stream of output morph weight
sets at a desired frame rate from said intermediate
stream of output morph weight sets and said plural-
ity of transition parameters; and
• applying said final stream of output morph weight
sets to a sequence of animated characters to produce
lip synchronization and facial expression control of
said animated characters.
The defendants are generally video game developers and publishers.
The district court determined that claim 1 of the ’567 patent is
“drawn to the abstract idea of automated rules-based use of morph
targets and delta sets for lip-synchronized three-dimensional anima-
tion.” We disagree.
Courts must be careful to avoid oversimplifying the claims by
looking at them generally and failing to account for the specific
requirements of the claims. Here, the claims are limited to rules
with specific characteristics. As the district court recognized dur-
ing claim construction, “the claims themselves set out meaningful re-
quirements for the first set of rules: they define a morph weight set
stream as a function of phoneme sequence and times associated with
said phoneme sequence.” They further require “applying said first
set of rules to each sub-sequence of timed phonemes.” The specific,
claimed features of these rules allow for the improvement realized by
the invention.
944 CHAPTER 10. SOFTWARE
As the specification confirms, the claimed improvement here is
allowing computers to produce “accurate and realistic lip synchro-
nization and facial expressions in animated characters” that previ-
ously could only be produced by human animators. As the district
court correctly recognized, this computer automation is realized by
improving the prior art through “the use of rules, rather than artists,
to set the morph weights and transitions between phonemes.” The
rules are limiting in that they define morph weight sets as a func-
tion of the timing of phoneme sub-sequences. Defendants do not dis-
pute that processes that automate tasks that humans are capable of
performing are patent eligible if properly claimed; instead, they ar-
gue that the claims here are abstract because they do not claim spe-
cific rules. This argument echoes the district court’s finding that the
claims improperly purport to cover all rules. The claimed rules here,
however, are limited to rules with certain common characteristics, i.e.,
a genus.
Claims to the genus of an invention, rather than a particular
species, have long been acknowledged as patentable. Patent law
has evolved to place additional requirements on patentees seeking to
claim a genus; however, these limits have not been in relation to the
abstract idea exception to § 101. Rather they have principally been
in terms of whether the patentee has satisfied the tradeoff of broad
disclosure for broad claim scope implicit in 35 U.S.C. § 112. It is self-
evident that genus claims create a greater risk of preemption, thus
implicating the primary concern driving § 101 jurisprudence, but this
does not mean they are unpatentable.
Claim 1 is focused on a specific asserted improvement in com-
puter animation, i.e., the automatic use of rules of a particular type.
We disagree with Defendants’ arguments that the claims simply use
a computer as a tool to automate conventional activity. While the
rules are embodied in computer software that is processed by general-
purpose computers, Defendants provided no evidence that the pro-
cess previously used by animators is the same as the process required
by the claims. Defendants concede an animator’s process was driven
by subjective determinations rather than specific, limited mathemat-
ical rules. McRO states that animators would initially set keyframes
at the point a phoneme was pronounced to represent the correspond-
ing morph target as a starting point for further fine tuning. This activ-
ity, even if automated by rules, would not be within the scope of the
claims because it does not evaluate sub-sequences, generate transi-
tion parameters or apply transition parameters to create a final morph
weight set. It is the incorporation of the claimed rules, not the use of
the computer, that “improved [the] existing technological process”
by allowing the automation of further tasks. CLS Bank This is unlike
Flook, Bilski, and Alice, where the claimed computer-automated pro-
B. PATENT 945
cess and the prior method were carried out in the same way.
Further, the automation goes beyond merely organizing existing
information into a new form or carrying out a fundamental economic
practice. The claimed process uses a combined order of specific rules
that renders information into a specific format that is then used and
applied to create desired results: a sequence of synchronized, ani-
mated characters. While the result may not be tangible, there is noth-
ing that requires a method be tied to a machine or transform an article
to be patentable. The concern underlying the exceptions to § 101 is
not tangibility, but preemption.
The limitations in claim 1 prevent preemption of all processes for
achieving automated lip-synchronization of 3–D characters. McRO
has demonstrated that motion capture animation provides an alter-
native process for automatically animating lip synchronization and
facial expressions. Even so, the absence of complete preemption
does not demonstrate patent eligibility. The narrower concern here
is whether the claimed genus of rules preempts all techniques for au-
tomating 3–D animation that rely on rules. Claim 1 requires that
the rules be rendered in a specific way: as a relationship between
sub-sequences of phonemes, timing, and the weight to which each
phoneme is expressed visually at a particular timing (as represented
by the morph weight set). The specific structure of the claimed
rules would prevent broad preemption of all rules-based means of
automating lip synchronization, unless the limits of the rules them-
selves are broad enough to cover all possible approaches. There has
been no showing that any rules-based lip-synchronization process
must use rules with the specifically claimed characteristics.
Defendants’ a orney’s argument that any rules-based lip-
synchronization process must use the claimed type of rules has ap-
peal, but no record evidence supports this conclusion. Defendants
again rely only on the patents’ description of one type of rules, but the
description of one set of rules does not mean that there exists only one
set of rules, and does not support the view that other possible types
of rules with different characteristics do not exist. The only infor-
mation cited to this court about the relationship between speech and
face shape points to the conclusion that there are many other possi-
ble approaches to automating lip synchronization using rules. For ex-
ample, Amicus Public Knowledge cites Kiyoshi Honda, Physiological
Processes of Speech Processing, as support for the proposition that the In Springer Handbook of Speech Produc-
claimed rules reflect natural laws. Honda shows, however, that the tion (Jacob Benesty et al. eds., 2008)
interaction between vocalization and facial expression is very com-
plex, and there are relationships present other than those required
by the claimed rules. This complex interaction permits development
of alternative rules-based methods of animating lip synchronization
and facial expressions of three-dimensional characters, such as sim-
946 CHAPTER 10. SOFTWARE
ulating the muscle action underlying characters’ facial expressions.
Under these circumstances, therefore, we need not assume that fu-
ture alternative discoveries are foreclosed.
Because we find that claim 1 is not directed to ineligible subject
ma er, we do not reach Alice step two.
Synopsys, Inc. v. Mentor Graphics Corp.
--- F.3d --- (Fed. Cir. Oct. 17, 2016)
Synopsys, Inc. appeals the District Court for the Northern District of
California’s grant of summary judgment invalidating certain claims
of U.S. Patent Nos. 5,530,841, 5,680,318, and 5,748,488 under 35 U.S.C.
§ 101.
B
In the early days of logic circuits, a designer was required to specify
his design in great detail. He would do so in the form of a schematic
diagram that identified individual hardware components and the in-
terconnections between them or via a set of Boolean logic equations
that specified the precise functionality of the design. A fabrication fa-
cility would then build the corresponding physical circuit based on
the architecture presented in the detailed design.
Over time, logic circuits became more and more complex. As com-
plexity increased, many designers began to focus on the higher-level
functionality of their designs. [New computer languages known
as ”hardware description languages”] allowed designers to describe
only the desired operation of the logic circuit rather than having to
specify the actual individual components and interconnections of the
logic circuit.
The introduction of HDLs necessitated the development of com-
puterized design tools that could translate the functional description
of the logic circuit into a detailed design for fabrication. Early com-
puterized design tools, however, could only recognize and translate
simple circuit elements.
The Gregory Patents describe constructs known as ”control flow
graphs,” and ”assignment conditions,” that provide a scheme to
translate HDL-based functional descriptions of logic circuits into
hardware component descriptions of those same circuits without re-
quiring the designer to instantiate any individual hardware compo-
nents.
Representative claim 1 and the associated portion of the specifica-
tion of U.S. Pat. No. 5,530,841 detail the method of using assignment
conditions to translate from a functional description of a level sensi-
tive latch into a hardware component description of that same latch.
Claim 1 reads:
A method for converting a hardware independent user descrip-
tion of a logic circuit, that includes flow control statements in-
B. PATENT 947
cluding an IF statement and a GOTO statement, and directive
statements that define levels of logic signals, into logic circuit
hardware components comprising:
converting the flow control statements and directive state-
ments in the user description for a logic signal Q into an as-
signment condition AL(Q) for an asynchronous load func-
tion AL( ) and an assignment condition AD(Q) for an asyn-
chronous data function AD( ); and
generating a level sensitive latch when both said assign-
ment condition AL(Q) and said assignment condition
AD(Q) are nonconstant;
wherein said assignment condition AD(Q) is a signal on a
data input line of said flow through latch;
said assignment condition AL(Q) is a signal on a latch gate
line of said flow through latch; and
an output signal of said flow through latch is said logic
signal Q.
A level sensitive latch is a basic form of memory. It is a hardware
component that stores a binary input (i.e., the value ”1” or ”0”), but
only when a specified condition is true. A level sensitive latch can be
described functionally using HDL code as follows:
TABLE 8
If (COND)
Q: = D
else
endif
Here, ”D” represents the input to the latch and ”Q” the output.
The relationship between input D and output Q is dictated by the
”flow control statement” defined by the line of code ”If(COND).” In
this example, when condition ”COND” is true (i.e., has the value ”1”),
the code flows to the immediately following line of code – i.e., ”Q: =
D” – and output Q is assigned the value of input D. In contrast, when
condition COND is false (i.e., has the value ”0”), the code skips the di-
rective statement ”Q: = D” and flows directly to the line of code ”else.”
In this example, no instructions follow ”else.” The value of output Q
therefore remains unchanged. In sum, when condition COND is true,
output Q is assigned the value of input D; when condition COND is
false, output Q retains its prior value regardless of whether the value
of input D remains the same or changes.
The claimed method takes the functional description of the latch
as an input. It then converts the functional description into an equiv-
alent description in the form of (1) an asynchronous load function;
and (2) an asynchronous data function. Here, the asynchronous load
948 CHAPTER 10. SOFTWARE
function for output Q is COND because output Q is assigned a new
value (i.e., it is ”loaded”) whenever condition COND is true. The
asynchronous data function for Q is ”COND*D” because output Q
is assigned the value ”1” if, and only if, both condition COND and
input D are true.
The assignment conditions associated with the functional descrip-
tion of the latch are summarized in the table below:
TABLE 9
Assignment Conditions
Variable AL() AD() SL() SD() DC() Z()
Q COND COND*D 0 0 0 0
Claim 1 specifies that where, as here, the asynchronous load
function and the asynchronous data function are non-constant, the
claimed method generates a level sensitive latch. A hardware
component description of the level sensitive latch is shown below:
Figure 8A
Importantly, the Gregory Patents make clear that HDL code ex-
isted in the prior art. The HDL code for the level sensitive latch shown
in Table 8 was already well known by the time the claimed inven-
tions of the Gregory Patents were conceived. The same is true of the
circuit diagram for a level sensitive latch shown in Figure 8A; circuit
diagrams like this existed long before the Gregory Patents. What Gre-
gory instead claims to have invented is a process for interpreting the
HDL code in Table 8 that uses the assignment conditions of Table 9
to identify the circuit diagram of Figure 8A as the hardware that per-
forms the function recited in the HDL code. At bo om, the informa-
tion provided in Table 8 (code), Table 9 (assignment conditions), and
Figure 8A (circuit diagram) are all equivalent representations of the
same thing: a level sensitive latch.
I. A S ₁: A A C
B. PATENT 949
The district court based its Alice Step 1 analysis on a basic premise:
”the claims are directed to a mental process.” We held in CyberSource CyberSource: 654 F.3d 1366 (Fed. Cir.
Corp. v. Retail Decisions, Inc. that mental processes are ”a subcategory 2011)
of unpatentable abstract ideas.” As we explained:
Methods which can be performed entirely in the hu-
man mind are unpatentable not because there is anything
wrong with claiming mental method steps as part of a
process containing non-mental steps, but rather because
computational methods which can be performed entirely
in the human mind are the types of methods that embody
the basic tools of scientific and technological work that are
free to all men and reserved exclusively to none.
While the Supreme Court has altered the § 101 analysis since Cyber-
Source in cases like Mayo and Alice, we continue to treat analyzing
information by steps people go through in their minds, or by math-
ematical algorithms, without more, as essentially mental processes
within the abstract-idea category.
Although the Asserted Claims are devoid of any reference to a
computer or any other physical component, Synopsys suggests that
the ”complexity” of the claimed methods would make it implausible
– if not impossible – for a skilled logic circuit designer to perform the
methods mentally or with pencil and paper.
Synopsys’ argument is belied by the actual claims at issue. Claim
1 recites a method of changing one description of a level sensitive
latch (i.e., a functional description) into another description of the
level sensitive latch (i.e., a hardware component description) by way
of a third description of that very same level sensitive latch (i.e., as-
signment conditions). As demonstrated above and in the patent spec-
ification itself the method can be performed mentally or with pencil
and paper. The skilled artisan must simply analyze a four-line snip-
pet of HDL code and translate this short piece of code into assignment I.e., turn Table 8 into Table 9 and then
conditions and further translate those two assignment conditions into into Figure 8A
a schematic representation of a level sensitive latch.
Although an understanding of logic circuit design is certainly re-
quired to perform the steps, the limited, straightforward nature of the
steps involved in the claimed method make evident that a skilled ar-
tisan could perform the steps mentally. The inventors of the Gregory
Patents confirmed this point when they admi ed to performing the
steps mentally themselves.
Synopsys next argues that even if the Asserted Claims could be
performed mentally they would, in practice, be performed on a com-
puter. In support of this argument, counsel for Synopsys during oral
argument pointed to the ”200 pages of code” a ached to the speci-
fications of the Gregory Patents that he contended reveal the ”true
950 CHAPTER 10. SOFTWARE
novelty” of the Asserted Claims.
While Synopsys may be correct that the inventions of the Gregory
Patents were intended to be used in conjunction with computer-based
design tools, the Asserted Claims are not confined to that conception.
On their face, the claims do not call for any form of computer im-
plementation of the claimed methods. Because the Asserted Claims
make no mention of employing a computer or any other physical de-
vice, they are so broad as to read on an individual performing the
claimed steps mentally or with pencil and paper.
For this reason, we need not decide whether a computer-
implemented version of the invention would not be ”directed to” an
abstract idea. And, for the same reasons, Synopsys cannot rely on our
Enfish: 822 F.3d 1327 (Fed. Cir. 2016) decisions in Enfish, LLC v. Microsoft Corp. and McRO to support the
patentability of the Asserted Claims. In Enfish, we held that claims
directed to a specific improvement to the way computers operate to
store and retrieve data were not unpatentably abstract. In McRO, we
similarly held that claims that recited a specific asserted improve-
ment in computer animation were not directed to an unpatentable
abstract idea. By their terms and the district court’s unchallenged
constructions, the Asserted Claims do not involve the use of a com-
puter in any way. The Asserted Claims thus cannot be characterized
as an improvement in computer technology.
Synopsys’ argument that ”the asserted claims do not preempt all
conversions” from functional descriptions of logic circuits to hard-
ware component descriptions of logic circuits likewise misses the
mark. While preemption may signal patent ineligible subject ma er,
the absence of complete preemption does not demonstrate patent el-
igibility.
We recognize that defining the precise abstract idea of patent
claims in many cases is far from a straightforward exercise. But, here,
the Asserted Claims are drawn to the abstract idea of: translating a
functional description of a logic circuit into a hardware component
description of the logic circuit. As detailed above, this translation is
a mental process.
II. A S ₂: D A C
Synopsys equates the inventive concept inquiry with novelty and con-
tends that the Asserted Claims contain an inventive concept because
they were not shown to have been anticipated by or obvious over the
prior art. That position misstates the law. A claim for a new abstract
idea is still an abstract idea. The search for a § 101 inventive concept
is thus distinct from demonstrating § 102 novelty.
That being said, the contours of what constitutes an inventive con-
cept are far from precise.
B. PATENT 951
In DDR Holdings, LLC v. Hotels.com, L.P., we held that claims ”di- DDR Holdings: 773 F.3d 1245 (Fed. Cir.
rected to systems and methods of generating a composite web page 2014)
that combines certain visual elements of a ’host’ website with content
of a third-party merchant” contained the requisite inventive concept.
We explained that the claims at issue involved a technological solu-
tion that overcame a specific challenge unique to the Internet.
In BASCOM Global Internet Servs., Inc. v. AT&T Mobility LLC, we BASCOM: 827 F.3d 1341 (Fed. Cir. 2016)
likewise held that claims ”directed to filtering content on the Internet”
contained an inventive concept. We recognized that ”the limitations
of the claims, taken individually, recite generic computer, network
and Internet components, none of which is inventive by itself.” We
explained, however, that ”an inventive concept can be found in the
non-conventional and non-generic arrangement of known, conven-
tional pieces.” We found that the claims at issue contained just such
an inventive arrangement through ”the installation of a filtering tool
at a specific location, remote from the end-users, with customizable
filtering features specific to each end user.” The claimed custom filter
could be located remotely from the user because the invention ex-
ploited the ability of Internet service providers to associate a search
request with a particular individual account. This technical solution
overcame defects in prior art embodiments and elevated an otherwise
abstract idea to a patentable invention.
The Asserted Claims contain no such technical solution. To the Are McRO and Synopsys compatible?
extent the Asserted Claims add anything to the abstract idea, it is
the use of assignment conditions as an intermediate step in the trans-
lation process. But, given that the claims are for a mental process,
assignment conditions, which merely aid in mental translation as op-
posed to computer efficacy, are not an inventive concept that takes
the Asserted Claims beyond their abstract idea. The Asserted Claims
do not introduce a technical advance or improvement. They contain
nothing that amounts to significantly more than a patent upon the
abstract idea itself.
2 Procedures
Williamson v. Citrix Online, LLC
792 F.3d 1339 (Fed. Cir. 2015)
[U.S. Patent No. 6,155,840] describes methods and systems for “dis-
tributed learning” that utilize industry standard computer hard-
ware and software linked by a network to provide a classroom or
auditorium-like metaphor—i.e., a “virtual classroom” environment.
The objective is to connect one or more presenters with geographi-
cally remote audience members. The disclosed inventions purport
to provide “the benefits of classroom interaction without the detri-
mental effects of complicated hardware or software, or the costs and
952 CHAPTER 10. SOFTWARE
inconvenience of convening in a separate place.”
There are three main components of the “distributed learning”
system set forth in the ′840 patent: (1) a presenter computer, (2) audi-
ence member computers, and (3) a distributed learning server. The
distributed learning server implements a “virtual classroom” over a
computer network, such as the Internet, to facilitate communication
and interaction among the presenter and audience members. The pre-
senter computer is used by the presenter to communicate with the
audience members and control information that appears on the audi-
ence member’s computer screen. An audience member’s computer
is used to display the presentation and can be used to communicate
with the presenter and other audience members.
Means-plus-function claiming occurs when a claim term is
drafted in a manner that invokes 35 U.S.C. § 112, para. 6, which states:
An element in a claim for a combination may be expressed
as a means or step for performing a specified function
without the recital of structure, material, or acts in sup-
port thereof, and such claim shall be construed to cover
the corresponding structure, material, or acts described in
the specification and equivalents thereof.
In enacting this provision, Congress struck a balance in allowing
patentees to express a claim limitation by reciting a function to be
performed rather than by reciting structure for performing that func-
tion, while placing specific constraints on how such a limitation is
to be construed, namely, by restricting the scope of coverage to only
the structure, materials, or acts described in the specification as cor-
responding to the claimed function and equivalents thereof.
We begin with the observation that the claim limitation in ques-
tion is not merely the introductory phrase “distributed learning con-
trol module,” but the entire passage “distributed learning control
module for receiving communications transmi ed between the pre-
senter and the audience member computer systems and for relay-
ing the communications to an intended receiving computer system
and for coordinating the operation of the streaming data module.”
This passage, as lengthy as it is, is nonetheless in a format consistent
with traditional means-plus-function claim limitations. It replaces
the term “means” with the term “module” and recites three functions
performed by the “distributed learning control module.”
Having found that the “distributed learning control module” is
subject to application of § 112, para. 6, we next determine whether
the specification discloses sufficient structure that corresponds to the
claimed function. We conclude that it does not.
The district court identified three claimed functions associated
with the “distributed learning control module” term: (1) receiving
B. PATENT 953
communications transmi ed between the presenter and the audience
member computer systems; (2) relaying the communications to an
intended receiving computer system; and (3) coordinating the opera-
tion of the streaming data module. The district court then found that
the specification fails to disclose structure corresponding to the “co-
ordinating” function. On appeal, it is undisputed that the claimed
“coordinating” function is associated with the “distributed learning
control module.” Thus, we must ascertain whether adequate struc-
ture corresponding to this function is disclosed in the specification.
The district court was correct that the specification of the ′840
patent fails to disclose corresponding structure. The wri en descrip-
tion of the ′840 patent makes clear that the distributed learning con-
trol module cannot be implemented in a general purpose computer,
but instead must be implemented in a special purpose computer – a
general purpose computer programmed to perform particular func-
tions pursuant to instructions from program software. A special pur-
pose computer is required because the distributed learning control
module has specialized functions as outlined in the wri en descrip-
tion. In cases such as this, involving a claim limitation that is subject
to § 112, para. 6 that must be implemented in a special purpose com-
puter, this court has consistently required that the structure disclosed
in the specification be more than simply a general purpose computer
or microprocessor. We require that the specification disclose an al-
gorithm for performing the claimed function. The algorithm may be
expressed as a mathematical formula, in prose, or as a flow chart, or
in any other manner that provides sufficient structure.
Because the ′840 patent fails to disclose any structure correspond-
ing to the “coordinating” function of the “distributed learning con-
trol module,” we affirm the judgment that claims 8–16 are invalid for
indefiniteness.
Mark A. Lemley
2013 Wisc. L. Rev. 905
Software Patents and the Return of Functional Claiming
Functional claiming is back. While experienced patent lawyers today
generally avoid writing their patent claims in means-plus-function
format, software patentees have increasingly been claiming to own
the function of their program, not merely the particular way they
achieved that goal. They have effectively captured ownership not
of what they built, but of anything that achieves the same goal, no
ma er how different it is. They claim to own the function itself.
Fortunately, the solution to the problem is correspondingly sim-
ple: we must take seriously the dictate of Section 112(f). If we limit
patent claims that purport to cover functions to the actual structure,
material, or acts the patentee built or described, the result will be that
software patents will cover, not every possible way of implement-
954 CHAPTER 10. SOFTWARE
ing a goal, but the way the patentee actually implemented the goal
“and equivalents thereof.” And in computer software, the “struc-
ture” or “acts” that perform the function are not simply “a com-
puter” or “a client-server system” but “a computer programmed in
a particular way.” That is, the structure of a software patent must
involve software, not just the hardware substrate on which all soft-
ware runs. Specifically, as recent Federal Circuit indefiniteness cases
have shown, patentees will have to disclose the algorithms they use
to achieve particular ends, and the patent will be limited to those al-
gorithms and equivalents thereof. This will leave room for later en-
trants to design around the patent and develop different algorithms
to achieve the same result.
3 Obviousness
Apple Inc. v. Samsung Electronics Co., Ltd.
--- F.3d ---
The jury found claim 8 of [Apple’s] U.S. Patent No. 8,046,721 in-
fringed and not invalid. The district court later denied Samsung’s
requested JMOL and entered judgment accordingly. On February
26, 2016, a panel of this court reversed the denial of JMOL with re-
gard to the jury verdict of non-obviousness as to the ′721 patent. We
agree with the district court that the jury’s fact findings supported
the conclusion that claim 8 would have been obvious.
The ′721 patent discloses a portable device with a touch-sensitive
display that can be “unlocked via gestures” performed on the screen.
The patent teaches that a “problem associated with using touch
screens on portable devices is the unintentional activation or deactiva-
tion of functions due to unintentional contact with the touch screen.”
“Unintentional activation or deactivation of functions due to unin-
tentional contact with the touch screen” is commonly referred to as
“pocket dialing.” Greg Christie, an inventor of the ′721 patent, de-
scribed the problem he and his colleagues set out to solve:
We were worried about accidental use, pocket dialing,
the phone ge ing shut down accidentally, or since we
were going to have all these features on the phone, like
e-mail and messaging, we were worried that, you know,
mail could be sent accidentally or deleted accidentally or
Figure 5B from the '721 patent
the phone would answer itself simply because the touch
surface—you know, if it was like, like, the touch surface
against your leg in your pocket, we were worried that just,
like, you know, jostling around, moving around would
trigger things on the screen.
The ′721 patent also describes the importance of making phone acti-
iPhone lock screen
B. PATENT 955
vation as “user-friendly” and “efficient” as possible. It teaches:
Accordingly, there is a need for more efficient, user-
friendly procedures for unlocking such devices, touch
screens, and/or applications. More generally, there is a
need for more efficient, user-friendly procedures for tran-
sitioning such devices, touch screens, and/or applications
between user interface states (e.g., from a user interface
state for a first application to a user interface state for a
second application, between user interface states in the
same application, or between locked and unlocked states).
In addition, there is a need for sensory feedback to the
user regarding progress towards satisfaction of a user in-
put condition that is required for the transition to occur.
Mr. Christie testified that the ease of the user interface was a central
design consideration when developing the slide to unlock feature:
We thought to introduce some sort of definite gesture. We
knew we wanted to have some instruction. We knew we
wanted the interface to be obvious to the customer. It
would be possibly the first experience even in a retail en-
vironment. They’re deciding whether they want to buy it.
They pick up this iPhone, you know, it would be very bad
if they looked at the phone that they had heard so much
about and they look at it and say “I can’t figure out how
to use this. I don’t know how to unlock it. It’s locked.” At
the same time, we knew that people would be unlocking
their phone, you know, tens or hundreds of times a day,
so we didn’t want the instruction to be, you know, insult-
ing or talk down to the customer. We didn’t want it to
be cumbersome, something that they would grow tired of
after a while.
Apple’s expert, Dr. Cockburn, explained that there was a tension be-
tween preventing pocket dialing and ease of use: “It has to work. It
has to succeed in preventing accidental activation by mistake. But yet
it needs to be something that’s easy to do, but not so easy that it can
occur by accident, and it succeeds in that.”
Apple asserted claim 8, which depends from claim 7, against sev-
eral Samsung devices. These claims recite:
7. A portable electronic device, comprising:
a touch-sensitive display;
memory;
one or more processors; and
one or more modules stored in the memory and configured
956 CHAPTER 10. SOFTWARE
for execution by the one or more processors, the one or
more modules including instructions:
to detect a contact with the touch-sensitive display at
a first predefined location corresponding to an unlock
image;
to continuously move the unlock image on the touch-
sensitive display in accordance with the movement of
the detected contact while continuous contact with the
touch-sensitive display is maintained, wherein the un-
lock image is a graphical, interactive user-interface ob-
ject with which a user interacts in order to unlock the
device; and
to unlock the hand-held electronic device if the unlock
image is moved from the first predefined location on
the touch screen to a predefined unlock region on the
touch-sensitive display.
8. The device of claim 7, further comprising instructions to display
visual cues to communicate a direction of movement of the un-
lock image required to unlock the device.
Samsung argues claim 8 would have been obvious in light of the com-
bination of Neonode and Plaisant. “Neonode” refers to the Neon-
ode N1 Quickstart Guide. Neonode discloses a mobile device with
a touch-sensitive screen. It explains that a user may unlock the de-
vice by pressing the power bu on. After the user presses the power
bu on, text appears instructing the user to “Right sweep to unlock.”
Sweeping right then unlocks the unit.
Neonode N1 Quickstart Guide illustra- “Plaisant” refers to a video and corresponding two-page paper
tion published in 1992 titled “Touchscreen Toggle Design” by Catherine
Plaisant and Daniel Wallace. The authors of the paper conducted an
experiment to determine which controls (“toggles”) users prefer on
wall-mounted controllers for “entertainment, security, and climate
control systems.” These controllers were intended to be installed
“flushmounted into the wall or the cabinetry.” The authors presented
six alternative unlocking mechanisms to a group of fifteen undergrad-
uate students, including a “slider toggle” where a user could activate
the controller by “grab[bing] the pointer and slid[ing] it to the other
side.” The students preferred “toggles that are pushed” over “toggles
that slide,” and generally ranked the slider fifth of the six alternatives.
The paper also notes that sliders “were not preferred,” “sliding is a
more complex task than simply touching,” and that “sliders are more
difficult to implement than bu ons.”
On appeal, Apple does not contest that, together, Neonode and
Plaisant disclose all the elements of claim 8. Rather, the parties dis-
Illustration from Plaisant paper
B. PATENT 957
pute whether a person of ordinary skill in the art would have been
motivated to combine one of the unlocking mechanisms disclosed in
Plaisant with Neonode. Samsung argues “there was no evidence of
any kind suggesting that Plaisant’s application to a wall-mounted de-
vice would lead inventors not to combine Plaisant with Neonode.” Its
expert, Dr. Greenberg, testified that a person of ordinary skill “would
be highly interested” in both references because “they both deal with
touch base systems, they both deal with user interfaces.” Dr. Green-
berg testified that “a person looking at this would just think it natural
to combine these two, as well taking the ideas in Plaisant, the slider,
and pu ing them on the Neonode is, is just a very routine thing to
think about in terms of interaction design.” Samsung points to the
Plaisant reference which states that sliding movement “is less likely
to be done inadvertently.”
Apple counters that a skilled artisan designing a mobile phone
would not have been motivated to turn to a wall-mounted air condi-
tioning controller to solve the pocket dialing problem. Its expert, Dr.
Cockburn, testified that a person of ordinary skill would not have
been naturally motivated to combine Neonode and Dr. Cockburn
testified that the way the Plaisant controllers “were intended to be
used was the touch screen would be mounted into a wall or into cab-
inetry and it would be used to control, for remote control, office or
home appliances, like air conditioning units or heaters.” He also ex-
plained to the jury that Plaisant itself discloses that sliding toggles
were less preferred than the other switches disclosed. Apple points
to Plaisant’s teachings that “sliders were not preferred,” “sliding is
a more complex task,” and “sliders are more difficult to implement.”
Apple argues there was substantial evidence for the jury to conclude
that there would not have been a motivation to combine Plaisant and
Neonode to arrive at the claimed invention.
The district court determined that a reasonable jury could have
found that a person of ordinary skill would not have been motivated
to combine Plaisant and Neonode:
A reasonable jury could infer from [Dr. Cockburn’s] tes-
timony that an ordinary artisan would not have been mo-
tivated to combine elements from a wall-mounted touch-
screen for home appliances and a smartphone, particu-
larly in view of the “pocket dialing” problem specific to
mobile devices that Apple’s invention sought to address.
Additionally, Dr. Cockburn explained that Plaisant “teach[es] away
from the use of sliding,” because it “tells you not to use the sliding
[toggle] mechanism.” We agree with the district court that on this
record, the jury’s implicit fact findings that Plaisant would not have
provided a skilled artisan with a motivation to combine its slider tog-
958 CHAPTER 10. SOFTWARE
gle switch with Neonode is supported by substantial evidence. In
addition to the statements in Plaisant, the court explained:
Dr. Cockburn testified, contrary to Dr. Greenberg, that
a person of ordinary skill in the art would not have been
motivated to combine the Neonode and Plaisant in such
a way as to invent claim 8. He provided two reasons.
First, Plaisant described “toggle designs” intended to be
used with a “touch screen [that] would be mounted into
a wall or into cabinetry” for controlling “office or home
appliances, like air conditioning units or heaters.” A rea-
sonable jury could infer from this testimony that an ordi-
nary artisan would not have been motivated to combine
elements from a wall-mounted touchscreen for home ap-
pliances and a smartphone, particularly in view of the
“pocket dialing” problem specific to mobile devices that
Apple’s invention sought to address.
We agree with the district court’s analysis. Because the jury found the
issue of validity in favor of Apple, we presume it resolved the conflict-
ing expert testimony and found that a skilled artisan would not have
been motivated to combine the slider toggle in Plaisant with the cell
phone disclosed in Neonode. The question for our review is whether
substantial evidence supports this implied fact finding. We conclude
that it does. Neonode discloses a mobile phone. Plaisant discloses
a wall-mounted air conditioning controller. The jury had both ref-
erences before it. Although Samsung presents arguments for com-
bining the two references, these arguments were before the jury. We
agree with the district court: “A reasonable jury could infer from this
testimony that an ordinary artisan would not have been motivated to
combine elements from a wall-mounted touchscreen for home appli-
ances and a smartphone, particularly in view of the ‘pocket dialing’
problem specific to mobile devices that Apple’s invention sought to
address.”
The record includes Plaisant and Neonode and all that these refer-
ences teach, including Plaisant’s reference to inadvertent activation,
complexity, difficult implementability, and that users do not prefer
sliders. Though the prior art references each relate to touchscreens,
the totality of the evidence supports the conclusion that it would not
have been obvious for a skilled artisan, seeking an unlock mechanism
that would be both intuitive to use and solve the pocket dialing prob-
lem for cell phones, to look to a wall-mounted controller for an air con-
ditioner. The two-page Plaisant paper published in 1992 reported the
results of a user-preference survey of fifteen undergraduates on six
different computer-based switches. That a skilled artisan would look
to the Plaisant paper directed to a wall-mounted interface screen for
C. COPYRIGHT 959
appliances and then choose the slider toggle, which the study found
rated fifth out of six options in usability, to fulfill a need for an in-
tuitive unlock mechanism that solves the pocket dialing problem for
cell phones seems far from obvious.
[The en banc court also discussed secondary considerations.
Among other things, it noted:
• Industry praise. – When Steve Jobs unveiled the slide to unlock
feature, the audience burst into cheers.
• Copying. – Internal Samsung documents praised the iPhone’s
slide to unlock feature as ”a creative way of solving UI complex-
ity” and concluded that Samsung’s designs would be be er if
they were more like the iPhone’s.
• Commercial success. – Apple wanted a vivid easily comprehen-
sible demonstration of how its iPhone touch screens worked to
make customers comfortable with it. Slide to unlock was the
first feature shown in Apple’s first iPhone commercial. These
facts were evidence that the iPhone’s commercial success was
due in part to slide to unlock.
• Long-felt need. – Apple’s experts testified to the deficiencies
of numerous previous ”frustrating” solutions to the pocket-
dialing problem, and internal Samsung documents showed that
it had tried four other alternatives and concluded they were all
inferior to slide to unlock.]
C Copyright
Software copyright has been intensely controversial.
1 Subject Matter
Some of the most important software subject-ma er holdings arose
in the context of similarity analyses. In order to explain whether the
defendant’s allegedly infringing software, courts must first filter out
the unprotectable aspects of plaintiff’s software. Thus, Whelan and
Altai are included here rather in a section on similarity because of
their importance to subsequent caselaw.
Apple Computer, Inc. v. Franklin Computer Corp.
Apple, one of the computer industry leaders, manufactures and mar- 714 F.2d 1240 (3d Cir. 1983)
kets personal computers (microcomputers), related peripheral equip-
ment such as disk drives (peripherals), and computer programs (soft-
ware). It presently manufactures Apple II computers and distributes
over 150 programs. Apple has sold over 400,000 Apple II comput-
ers, employs approximately 3,000 people, and had annual sales of
$335,000,000 for fiscal year 1981.
960 CHAPTER 10. SOFTWARE
Programs sold by Franklin in conjunction with its ACE 100 com-
puter were virtually identical with those covered by fourteen Ap-
ple copyrights. The variations that did exist were minor, consisting
merely of such things as deletion of reference to Apple or its copy-
right notice.5 Franklin did not dispute that it copied the Apple pro-
grams. Its witness admi ed copying each of the works in suit from
the Apple programs.
Franklin’s principal defense is that the Apple operating system
programs are not capable of copyright protection.
A. Copyrightability of a Computer Program Expressed in Object Code
Certain statements by the district court suggest that programs ex-
pressed in object code, as distinguished from source code, may not
be the proper subject of copyright. We find no basis in the statute for
any such concern. The district court here questioned whether copy-
right was to be limited to works designed to be ”read” by a human
reader as distinguished from read by an expert with a microscope
Apple II and patience. The suggestion that copyrightability depends on a com-
municative function to individuals stems from the early decision of
White-Smith, which held a piano roll was not a copy of the musical
composition because it was not in a form others, except perhaps for
a very expert few, could perceive. However, it is clear from the lan-
guage of the 1976 Act and its legislative history that it was intended
to obliterate distinctions engendered by White-Smith.
Under the statute, copyright extends to works in any tangible
means of expression ”from which they can be perceived, reproduced, or
otherwise communicated, either directly or with the aid of a machine
or device.” Further, the definition of ”computer program” adopted by
Congress in the 1980 amendments is ”sets of statements or instruc-
Franklin ACE 100
tions to be used directly or indirectly in a computer in order to bring
17 U.S.C. § 102
about a certain result.” As source code instructions must be trans-
17 U.S.C. § 101
lated into object code before the computer can act upon them, only
instructions expressed in object code can be used ”directly” by the
computer.
The district court also expressed uncertainty as to whether a com-
puter program in object code could be classified as a ”literary work.”
However, the category of ”literary works”, one of the seven copy-
rightable categories, is not confined to literature in the nature of Hem-
ingway’s For Whom the Bell Tolls. The definition of ”literary works”
in section 101 includes expression not only in words but also ”num-
bers, or other ... numerical symbols or indicia”, thereby expanding
5
For example, 8 bytes of memory were altered in the Autostart ROM program
so that when the computer is turned on ”ACE 100” appears on the screen rather
than ”Apple II.” The Franklin DOS 3.3 program also had 16 bytes (out of 9000) that
allowed use of upper and lower case.
C. COPYRIGHT 961
the common usage of ”literary works.” Cf. Harcourt, Brace & World, Harcourt, Brace: 329 F. Supp. 517
Inc. v. Graphic Controls Corp. (the symbols designating questions (S.D.N.Y. 1971)
or response spaces on exam answer sheets held to be copyrightable
”writings” under 1909 Act); Reiss v. National Quotation Bureau, Inc. Reiss: 276 F. 717 (S.D.N.Y. 1921)
(code book of coined words designed for cable use copyrightable).
Thus a computer program, whether in object code or source code, is a
”literary work” and is protected from unauthorized copying, whether
from its object or source code version.
C. Copyrightability of Computer Operating System Programs
We turn to the heart of Franklin’s position on appeal which is that
computer operating system programs, as distinguished from appli-
cation programs, are not the proper subject of copyright. Franklin
argues that an operating system program is either a ”process”, ”sys-
tem”, or ”method of operation” and hence uncopyrightable.
Franklin’s a ack on operating system programs as ”methods” or
”processes” seems inconsistent with its concession that application
programs are an appropriate subject of copyright. Both types of pro-
grams instruct the computer to do something. Therefore, it should
make no difference whether these instructions tell the computer to
help prepare an income tax return (the task of an application pro-
gram) or to translate a high level language program from source code
into its binary language object code form (the task of an operating
system program such as ”Applesoft”). Since it is only the instruc- Wait! Is Applesoft an operating system
tions which are protected, a ”process” is no more involved because or an application?
the instructions in an operating system program may be used to ac-
tivate the operation of the computer than it would be if instructions
were wri en in ordinary English in a manual which described the
necessary steps to activate an intricate complicated machine. There
is, therefore, no reason to afford any less copyright protection to the
instructions in an operating system program than to the instructions
in an application program.
Franklin’s argument that an operating system program is part of
a machine mistakenly focuses on the physical characteristics of the
instructions. But the medium is not the message. We have already
considered and rejected aspects of this contention in the discussion
of object code and ROM. The mere fact that the operating system pro-
gram may be etched on a ROM does not make the program either a
machine, part of a machine or its equivalent. Furthermore, as one of Does this reasoning make the SCPA
Franklin’s witnesses testified, an operating system does not have to pointless? Should conductor mask de-
be permanently in the machine in ROM, but it may be on some other signs be registered as literary works be-
cause they are equivalent to computer
medium, such as a diske e or magnetic tape, where it could be read-
programs? For that matter, what does
ily transferred into the temporary memory space of the computer. In this reasoning suggest about the Fed-
fact, some of the operating systems at issue were on diske e. eral Circuit's "new machine" justifica-
tion for software patents?
962 CHAPTER 10. SOFTWARE
Adobe Systems Inc. v. Southern Software Inc.
45 U.S.P.Q.2d 1827 (ND Cal Feb. 2,
1998)
[Computer outline fonts are a set of points, selected by the font’s de-
This description of digital typefaces is
signer, describing the outside of a le er. The advantage of outlined
taken from Blake Fry, Why Typefaces computer fonts is that since only the outline of the le er is described,
Proliferate Without Copyright Protection, a character can be enlarged or shrunk by simply increasing or de-
8 J. Telecomm. & High Tech. L. 425 creasing the distance between the points. For displaying or printing,
(2010)
software connects these lines, and shades in the le er.]
Computer programs are protectable literary works. Typeface de-
Eltra: 579 F.2d 294 (4th Cir. 1978) signs are not copyrightable. Eltra Corp. v. Ringer. A computer pro-
gram is not rendered unprotectable merely because its output is not
protectable. Thus, the fact that a computer program produces unpro-
tectable typefaces does not make the computer program itself unpro-
tectable.
In a 1988 Copyright Office Policy Decision, the Copyright Office
determined that digitized typefaces were not copyrightable because
they were not computer programs and required li le selection or ar-
rangement beyond that dictated by the uncopyrightable typeface de-
sign. However, in 1992 the Copyright Office issued a final regula-
tion regarding the registrability of “computer programs that generate
typefaces” which appears to back off the 1988 policy decision. The
1992 Regulation states:
The Copyright Office is persuaded that creating scalable
typefonts using already digitized typeface represents a
significant change in the industry since our previous Pol-
icy Decision. We are also persuaded that computer pro-
grams designed for generating typeface in conjunction
with printing devices may involve original computer in-
structions entitled to protection under the Copyright Act.
For example, the creation of scalable font output pro-
grams to produce harmonious fonts consisting of hun-
dreds of characters typically involves many decisions in
drafting the instructions that drive the printer. The ex-
pression of these decisions is neither limited by the un-
protectible shape of the le ers nor functionally mandated.
This expression, assuming it meets the usual standard of
authorship, is thus registrable as a computer program.
Defendants state that “merely manipulating an unprotectable font
image to create another, slightly different (but still unprotectable)
font image cannot possibly give rise to protectable expression” De-
fendants assert that no ma er what points are selected by the Adobe
editor performing the process, they correspond directly to, and hence
are determined by, the unprotectable font shape. Therefore, because
the output is not protected and there cannot be any creativity in what
the editor does to obtain the output, nothing is protectable.
C. COPYRIGHT 963
The evidence presented shows that there is some creativity in de-
signing the font software programs. While the glyph dictates to a
certain extent what points the editor must choose, it does not dictate
every point that must be chosen. Adobe has shown that font editors
make creative choices as to what points to select based on the image in
front of them on the computer screen. The code is determined directly
from the selection of the points. That some creativity is involved is
illustrated by the fact that two independently working programmers
using the same data and same tools can produce an indistinguishable
output but will have few points in common. Accordingly, the court
finds that the Adobe font software programs are protectable original
works of authorship. Thus, any copying of the points is copying of
literal expression, that is, in essence, copying of the computer code
itself.
Whelan Associates, Inc. v. Jaslow Dental Laboratory, Inc.
797 F.2d 1222 (3d Cir. 1986)
[Jaslow, a dental laboratory, hired Whelan, a software development
firm, to develop dental laboratory bookkeeping software called Den-
talab. Whelan kept the copyright; Jaslow marketed the software to How are DENTALAB and DENTCOM as
other dental firms and received a 35% commission. One of Jaslow’s trademarks?
owner/officers allegedly used his access to the Dentalab software to
develop a competing dental-firm bookkeeping program, Dentcom,
which was wri en in a different programming language: BASIC
rather than EDL.]
The Arnstein ordinary observer test, which was developed in cases
involving novels, plays, and paintings, is of doubtful value in cases in-
volving computer programs on account of the programs’ complexity
and unfamiliarity to most members of the public. We therefore join
the growing number of courts which do not apply the ordinary ob-
server test in copyright cases involving exceptionally difficult mate-
rials, like computer programs, but instead adopt a single substantial
similarity inquiry according to which both lay and expert testimony
would be admissible.
It is well, though recently, established that copyright protection
extends to a program’s source and object codes. In this case, how-
ever, the district court did not find any copying of the source or ob-
ject codes, nor did the plaintiff allege such copying. Rather, the dis-
trict court held that the Dentalab copyright was infringed because the
overall structure of Dentcom was substantially similar to the overall
structure of Dentalab. The question therefore arises whether mere
similarity in the overall structure of programs can be the basis for
a copyright infringement, or, put differently, whether a program’s
copyright protection covers the structure of the program or only the
program’s literal elements, i.e., its source and object codes.
The copyrights of other literary works can be infringed even when
964 CHAPTER 10. SOFTWARE
there is no substantial similarity between the works’ literal elements.
One can violate the copyright of a play or book by copying its plot
Fox v. MCA: 715 F.2d 1327, 1329 (9th Cir. or plot devices. See, e.g., Twentieth Century-Fox Film Corp. v. MCA,
1983) Inc. (13 alleged distinctive plot similarities between Ba lestar Galac-
tica and Star Wars may be basis for a finding of copyright violation);
Krofft: 562 F.2d 1157 (9th Cir. 1977) Sid & Marty Krofft Television v. McDonald’s Corp. (similarities between
McDonaldland characters and H.R. Pufnstuf characters can be estab-
lished by ”total concept and feel” of the two productions. By anal-
ogy to other literary works, it would thus appear that the copyrights
of computer programs can be infringed even absent copying of the
literal elements of the program. Defendants contend, however, that
what is true of other literary works is not true of computer programs.
They assert two principal reasons, which we consider in turn.
Defendants argue that the structure of a computer program is, by
definition, the idea and not the expression of the idea, and therefore
that the structure cannot be protected by the program copyright.
Just as Baker focused on the end sought to be achieved by Selden’s
book, the line between idea and expression may be drawn with ref-
erence to the end sought to be achieved by the work in question. In
other words, the purpose or function of a utilitarian work would be
the work’s idea, and everything that is not necessary to that purpose
or function would be part of the expression of the idea. Where there
are various means of achieving the desired purpose, then the partic-
ular means chosen is not necessary to the purpose; hence, there is
expression, not idea.
It is clear that the purpose of the utilitarian Dentalab program was
to aid in the business operations of a dental laboratory. It is equally
clear that the structure of the program was not essential to that task:
there are other programs on the market, competitors of Dentalab and
Dentcom, that perform the same functions but have different struc-
tures and designs. The conclusion is thus inescapable that the de-
tailed structure of the Dentalab program is part of the expression, not
the idea, of that program.
Computer Associates Intern., Inc. v. Altai, Inc.
982 F. 2d 693 (1992)
The essentially utilitarian nature of a computer program complicates
the task of distilling its idea from its expression. In order to describe
both computational processes and abstract ideas, its content com-
bines creative and technical expression. The variations of expression
found in purely creative compositions, as opposed to those contained
in utilitarian works, are not directed towards practical application.
For example, a narration of Humpty Dumpty’s demise, which would
clearly be a creative composition, does not serve the same ends as, say,
a recipe for scrambled eggs – which is a more process oriented text.
Thus, compared to aesthetic works, computer programs hover even
C. COPYRIGHT 965
more closely to the elusive boundary line described in § 102(b).
To the extent that an accounting text and a computer program are
both a set of statements or instructions to bring about a certain result,
they are roughly analogous. In the former case, the processes are
ultimately conducted by human agency; in the la er, by electronic
means. In either case, as already stated, the processes themselves are
not protectable. But the holding in Baker goes farther. The Court con-
cluded that those aspects of a work, which ”must necessarily be used
as incident to” the idea, system or process that the work describes, are
also not copyrightable. Selden’s ledger sheets, therefore, enjoyed no
copyright protection because they were ”necessary incidents to” the
system of accounting that he described. From this reasoning, we con-
clude that those elements of a computer program that are necessarily
incidental to its function are similarly unprotectable.
We think that Whelan’s approach to separating idea from expres-
sion in computer programs relies too heavily on metaphysical dis-
tinctions and does not place enough emphasis on practical consider-
ations.
We think that district courts would be well-advised to undertake
a three-step procedure in order to determine whether the non-literal
elements of two or more computer programs are substantially simi-
lar. This approach breaks no new ground; rather, it draws on such
familiar copyright doctrines as merger, scenes a faire, and public do-
main.
In ascertaining substantial similarity under this approach, a court
would first break down the allegedly infringed program into its con-
stituent structural parts. Then, by examining each of these parts for
such things as incorporated ideas, expression that is necessarily in-
cidental to those ideas, and elements that are taken from the public
domain, a court would then be able to sift out all non-protectable ma-
terial. Left with a kernel, or possible kernels, of creative expression
after following this process of elimination, the court’s last step would
be to compare this material with the structure of an allegedly infring-
ing program. The result of this comparison will determine whether
the protectable elements of the programs at issue are substantially
similar so as to warrant a finding of infringement.
Step One: Abstraction
As applied to computer programs, the abstractions test will comprise
the first step in the examination for substantial similarity. Initially, in
a manner that resembles reverse engineering on a theoretical plane,
a court should dissect the allegedly copied program’s structure and
isolate each level of abstraction contained within it. This process be-
gins with the code and ends with an articulation of the program’s
966 CHAPTER 10. SOFTWARE
ultimate function. As an anatomical guide to this procedure, the fol-
lowing description is helpful:
Steven R. Englund, Note, Idea, Pro- At the lowest level of abstraction, a computer program
cess, or Protected Expression?: Determin- may be thought of in its entirety as a set of individual
ing the Scope of Copyright Protection of
instructions organized into a hierarchy of modules. At a
the Structure of Computer Programs, 88
Mich. L. Rev. 866 (1990) higher level of abstraction, the instructions in the lowest-
level modules may be replaced conceptually by the func-
tions of those modules. At progressively higher levels
of abstraction, the functions of higher-level modules con-
ceptually replace the implementations of those modules
in terms of lower-level modules and instructions, until fi-
nally, one is left with nothing but the ultimate function of
the program. A program has structure at every level of
abstraction at which it is viewed. At low levels of abstrac-
tion, a program’s structure may be quite complex; at the
highest level it is trivial.
Step Two: Filtration
Once the program’s abstraction levels have been discovered, the sub-
stantial similarity inquiry moves from the conceptual to the concrete.
We endorse, a successive filtering method for separating protectable
expression from non-protectable material. This process entails exam-
ining the structural components at each level of abstraction to deter-
mine whether their particular inclusion at that level was ”idea” or
was dictated by considerations of efficiency, so as to be necessarily
incidental to that idea; required by factors external to the program
itself; or taken from the public domain and hence is nonprotectable
expression. The structure of any given program may reflect some, all,
or none of these considerations.
Strictly speaking, this filtration serves the purpose of defining the
scope of plaintiff’s copyright. By applying well developed doctrines
of copyright law, it may ultimately leave behind a core of protectable
material. Further explication of this second step may be helpful.
(a) Elements Dictated by Efficiency
In the context of computer program design, the concept of efficiency
is akin to deriving the most concise logical proof or formulating the
most succinct mathematical computation. Thus, the more efficient
a set of modules are, the more closely they approximate the idea or
process embodied in that particular aspect of the program’s structure.
While, hypothetically, there might be a myriad of ways in which
a programmer may effectuate certain functions within a program, –
i.e., express the idea embodied in a given subroutine – efficiency con-
cerns may so narrow the practical range of choice as to make only one
C. COPYRIGHT 967
or two forms of expression workable options. Of course, not all pro-
gram structure is informed by efficiency concerns. It follows that in
order to determine whether the merger doctrine precludes copyright
protection to an aspect of a program’s structure that is so oriented, a
court must inquire whether the use of this particular set of modules is
necessary efficiently to implement that part of the program’s process
being implemented. If the answer is yes, then the expression repre-
sented by the programmer’s choice of a specific module or group of
modules has merged with their underlying idea and is unprotected.
Efficiency is an industry-wide goal. Since, as we have already
noted, there may be only a limited number of efficient implementa-
tions for any given program task, it is quite possible that multiple pro-
grammers, working independently, will design the identical method
employed in the allegedly infringed work. Of course, if this is the
case, there is no copyright infringement.
(b) Elements Dictated By External Factors
In many instances it is virtually impossible to write a program to per-
form particular functions in a specific computing environment with-
out employing standard techniques. This is a result of the fact that a
programmer’s freedom of design choice is often circumscribed by ex-
trinsic considerations such as (1) the mechanical specifications of the
computer on which a particular program is intended to run; (2) com-
patibility requirements of other programs with which a program is
designed to operate in conjunction; (3) computer manufacturers’ de-
sign standards; (4) demands of the industry being serviced; and (5)
widely accepted programming practices within the computer indus-
try.
The district court in Q-Co Industries, Inc. v. Hoffman rested its hold- Q-Co: 625 F. Supp. 608 (S.D.N.Y. 1985)
ing on what, perhaps, most closely approximates a traditional scenes
a faire rationale. There, the court denied copyright protection to four
program modules employed in a teleprompter program. This deci-
sion was ultimately based upon the court’s finding that ”the same
modules would be an inherent part of any prompting program.”
(c) Elements taken From the Public Domain
Material found in the public domain is free for the taking and can-
not be appropriated by a single author even though it is included in
a copyrighted work. We see no reason to make an exception to this
rule for elements of a computer program that have entered the pub-
lic domain by virtue of freely accessible program exchanges and the
like. Thus, a court must also filter out this material from the allegedly
infringed program before it makes the final inquiry in its substantial
similarity analysis.
968 CHAPTER 10. SOFTWARE
Step Three: Comparison
The third and final step of the test for substantial similarity that we be-
lieve appropriate for non-literal program components entails a com-
parison. Once a court has sifted out all elements of the allegedly in-
fringed program which are ”ideas” or are dictated by efficiency or
external factors, or taken from the public domain, there may remain
a core of protectable expression. In terms of a work’s copyright value,
this is the golden nugget. At this point, the court’s substantial simi-
larity inquiry focuses on whether the defendant copied any aspect of
this protected expression, as well as an assessment of the copied por-
tion’s relative importance with respect to the plaintiff’s overall pro-
gram.
Evidentiary Analysis
The district court took the first step in the analysis set forth in this
opinion when it separated the program by levels of abstraction. The
district court stated:
As applied to computer software programs, this abstrac-
tions test would progress in order of ”increasing general-
ity” from object code, to source code, to parameter lists,
to services required, to general outline. In discussing the
particular similarities, therefore, we shall focus on these
levels.
Moving to the district court’s evaluation of OSCAR 3.5’s structural
components, we agree with Judge Pra ’s systematic exclusion of non-
protectable expression. With respect to code, the district court ob-
served that after the rewrite of OSCAR 3.4 to OSCAR 3.5, ”there re-
mained virtually no lines of code that were identical to ADAPTER.”
Accordingly, the court found that the code ”present[ed] no similarity
at all.”
Next, Judge Pra addressed the issue of similarity between the
two programs’ parameter lists and macros. He concluded that, view-
ing the conflicting evidence most favorably to CA, it demonstrated
that ”only a few of the lists and macros were similar to protected el-
ements in ADAPTER; the others were either in the public domain or
dictated by the functional demands of the program.” As discussed
above, functional elements and elements taken from the public do-
main do not qualify for copyright protection. With respect to the few
remaining parameter lists and macros, the district court could rea-
sonably conclude that they did not warrant a finding of infringement
given their relative contribution to the overall program. In any event,
the district court reasonably found that, for lack of persuasive evi-
dence, CA failed to meet its burden of proof on whether the macros
C. COPYRIGHT 969
and parameter lists at issue were substantially similar.
The district court also found that the overlap exhibited between
the list of services required for both ADAPTER and OSCAR 3.5 was
”determined by the demands of the operating system and of the appli-
cations program to which it was to be linked through ADAPTER or
OSCAR” In other words, this aspect of the program’s structure was
dictated by the nature of other programs with which it was designed
to interact and, thus, is not protected by copyright.
Finally, in his infringement analysis, Judge Pra accorded no
weight to the similarities between the two programs’ organizational
charts, ”because the charts were so simple and obvious to anyone ex-
posed to the operation of the programs.” CA argues that the district
court’s action in this regard ”is not consistent with copyright law” —
that ”obvious” expression is protected, and that the district court er-
roneously failed to realize this. However, to say that elements of a
work are ”obvious,” in the manner in which the district court used
the word, is to say that they ”follow naturally from the work’s theme
rather than from the author’s creativity.” This is but one formulation
of the scenes a faire doctrine, which we have already
Oracle America, Inc. v. Google Inc.
872 F. Supp. 2d 974 (N.D. Cal. 2012)
This action was the first of the so-called ”smartphone war” cases tried
to a jury. This order includes the findings of fact and conclusions of
law on a central question tried simultaneously to the judge, namely
the extent to which, if at all, certain replicated elements of the struc-
ture, sequence and organization of the Java application programming
interface are protected by copyright. The facts here are drawn primarily from
Sun Microsystems, Inc. (”Sun”) developed the Java ”platform” for the Court of Appeals' opinion, which
immediately follows.
computer programming and released it in 1996.1 The aim was to re-
lieve programmers from the burden of writing different versions of
their computer programs for different operating systems or devices.
The Java platform, through the use of a virtual machine, enabled soft-
ware developers to write programs that were able to run on different
types of computer hardware without having to rewrite them for each
different type. With Java, a software programmer could ”write once,
run anywhere.”
The Java virtual machine (”JVM”) plays a central role in the over-
all Java platform. The Java programming language itself – which in-
cludes words, symbols, and other units, together with syntax rules
for using them to create instructions – is the language in which a Java
programmer writes source code, the version of a program that is in a
human-readable language. For the instructions to be executed, they
must be converted (or compiled) into binary machine code (object
1
Oracle acquired Sun in 2010.
970 CHAPTER 10. SOFTWARE
code) consisting of 0s and Is understandable by the particular com-
puting device. In the Java system, source code is first converted into
”bytecode,” an intermediate form, before it is then converted into
binary machine code by the Java virtual machine that has been de-
signed for that device.
Sun wrote a number of ready-to-use Java programs to perform
common computer functions and organized those programs into
groups it called ”packages.” These packages, which are the applica-
tion programming interfaces at issue in this appeal, allow program-
mers to use the prewri en code to build certain functions into their
own programs, rather than write their own code to perform those
functions from scratch. They are shortcuts. Sun called the code for
a specific operation (function) a ”method.” It defined ”classes” so
that each class consists of specified methods plus variables and other
elements on which the methods operate. To organize the classes
for users, then, it grouped classes (along with certain related ”inter-
faces”) into ”packages.” The parties have not disputed the district
court’s analogy: Oracle’s collection of API packages is like a library,
each package is like a bookshelf in the library, each class is like a book
on the shelf, and each method is like a how-to chapter in a book.
The original Java Standard Edition Platform (”Java SE”) included
eight packages of pre-wri en programs. The district court found,
and Oracle concedes to some extent, that three of those packages –
java.lang.java.io, and java.util – were ”core” packages, meaning that
programmers using the Java language had to use them in order to
make any worthwhile use of the language. By 2008, the Java plat-
form had more than 6,000 methods making up more than 600 classes
grouped into 166 API packages. There are 37 Java API packages at
issue in this appeal, three of which are the core packages identified
by the district court. These packages contain thousands of individual
elements, including classes, subclasses, methods, and interfaces.
Every package consists of two types of source code — what the
parties call (1) declaring code; and (2) implementing code. Declaring
code is the expression that identifies the prewri en function and is
sometimes referred to as the ”declaration” or ”header.” As the dis-
trict court explained, the ”main point is that this header line of code
introduces the method body and specifies very precisely the inputs,
name and other functionality.” The expressions used by the program-
mer from the declaring code command the computer to execute the
associated implementing code, which gives the computer the step-by-
step instructions for carrying out the declared function.
For example, one of the Java API packages at issue is ”java. lang.”
Within that package is a class called ”math,” and within ”math” there
are several methods, including one that is designed to find the larger
of two numbers: ”max.” To invoke this method from another pro-
C. COPYRIGHT 971
gram (or class), the following call could be included in the program:
int a = java.lang.Math.max (2, 3);
Upon reaching this statement, the computer would go and find the
max method under the Math class in the java.lang package, input ’2’
and ’3’ as arguments, and then return a ’3,’ which would then be set
as the value of ’a.’ The declaration for the ”max” method, as defined
for integers, is
public static int max (int x, int y) {
The word ”public” means that other programs can call on it. (If this
instead says ”private,” then it can only be accessed by other methods
inside the same class.) The word ”static” means that the method can
be invoked without creating an instance of the class. (If this instead
is an instance method, then it would always be invoked with respect
to an object.) The word ”int” means that an integer is returned by
the method. (Other alternatives are ”boolean,” ”char,” and ”String”
which respectively mean ”true/false,” ”single character,” and ”char-
acter string.”) Each of these three parameters is drawn from a short
menu of possibilities, each possibility corresponding to a very spe-
cific functionality. The word ”max” is a name and any name (other
than a reserved word [i.e, a few names like ”int” and ”public” that
have specific and rigidly defined roles in the Java language]) could
have been used.. The phrase ”(int x, int y)” identifies the arguments
that must be passed into the method, stating that they will be in in-
teger form. The ”x” and the ”y” could be ”a” and ”b” or ”arg1” and
”arg2,” so there is a degree of creativity in naming the arguments.
Finally, ”{” is the beginning marker that tells the compiler that the
method body is about to follow. The marker is mandatory.
Although Oracle owns the copyright on Java SE and the API pack-
ages, it offers three different licenses to those who want to make use
of them. The first is the General Public License, which is free of
charge and provides that the licensee can use the packages – both
the declaring and implementing code – but must ”contribute back”
its innovations to the public. This arrangement is referred to as an
”open source” license. The second option is the Specification License,
which provides that the licensee can use the declaring code and or-
ganization of Oracle’s API packages but must write its own imple-
menting code. The third option is the Commercial License, which is
for businesses that want to use and customize the full Java code in
their commercial products and keep their code secret. Oracle offers
the Commercial License in exchange for royalties. To maintain Java’s
”write once, run anywhere” mo o, the Specification and Commercial
Licenses require that the licensees’ programs pass certain tests to en-
sure compatibility with the Java platform.
972 CHAPTER 10. SOFTWARE
The accused product is Android, a software platform that was
designed for mobile devices and competes with Java in that market.
Google acquired Android, Inc. in 2005 as part of a plan to develop
a smartphone platform. Later that same year, Google and Sun be-
gan discussing the possibility of Google taking a license to use and
to adapt the entire Java platform for mobile devices. They also dis-
cussed a possible co-development partnership deal with Sun under
which Java technology would become an open-source part of the An-
droid platform, adapted for mobile devices. The parties negotiated
for months but were unable to reach an agreement. The point of
contention between the parties was Google’s refusal to make the im-
plementation of its programs compatible with the Java virtual ma-
chine or interoperable with other Java programs. Because Sun/Oracle
found that position to be anathema to the ”write once, run anywhere”
philosophy, it did not grant Google a license to use the Java API pack-
ages.
When the parties’ negotiations reached an impasse, Google de-
cided to use the Java programming language to design its own vir-
tual machine – the Dalvik virtual machine (”Dalvik VM”) – and ”to
write its own implementations for the functions in the Java API that
were key to mobile devices.” Google developed the Android plat-
form, which grew to include 168 API packages – 37 of which corre-
spond to the Java API packages at issue in this appeal.
With respect to the 37 packages at issue, ”Google believed Java ap-
plication programmers would want to find the same 37 sets of func-
tionalities in the new Android system callable by the same names
as used in Java.” To achieve this result, Google copied the declaring
source code from the 37 Java API packages verbatim, inserting that
code into parts of its Android software. In doing so, Google copied
the elaborately organized taxonomy of all the names of methods,
classes, interfaces, and packages – the ”overall system of organized
names – covering 37 packages, with over six hundred classes, with
over six thousand methods. The parties and district court referred to
this taxonomy of expressions as the ”structure, sequence, and organi-
zation” or ”SSO” of the 37 packages. It is undisputed, however, that
Google wrote its own implementing code [with some exceptions not
here relevant].
Google released the Android platform in 2007, and the first An-
droid phones went on sale the following year. Oracle indicated at
oral argument that Android phones contain copies of the accused por-
tions of the Android software. Android smartphones rapidly grew in
popularity and now comprise a large share of the United States mar-
ket. Google provides the Android platform free of charge to smart-
phone manufacturers and receives revenue when customers use par-
ticular functions on the Android phone. Although Android uses the
C. COPYRIGHT 973
Java programming language, it is undisputed that Android is not
generally Java compatible. As Oracle explains, ”Google ultimately
designed Android to be incompatible with the Java platform, so that
apps wri en for one will not work on the other.”
A C L C F
All agree that everyone was and remains free to program in the Java
language itself. All agree that Google was free to use the Java lan- Wait. Why is everyone free to program
guage to write its own API. While Google took care to provide fresh in Java? Is everyone free to program in
Java?
line-by-line implementations (the 97 percent), it generally replicated
the overall name organization and functionality of 37 packages in
the Java API (the three percent). The main issue addressed herein
is whether this violated the Copyright Act and more fundamentally
whether the replicated elements were copyrightable in the first place.
This leads to the first holding central to this order and it concerns
the method level. As long as the specific code wri en to implement a
method is different, anyone is free under the Copyright Act to write
his or her own method to carry out exactly the same function or spec-
ification of any and all methods used in the Java API. Contrary to Or-
acle, copyright law does not confer ownership over any and all ways
to implement a function or specification, no ma er how creative the
copyrighted implementation or specification may be. The Act con-
fers ownership only over the specific way in which the author wrote
out his version. Others are free to write their own implementation to
accomplish the identical function, for, importantly, ideas, concepts
and functions cannot be monopolized by copyright.
To return to our example, one method in the Java API carries out
the function of comparing two numbers and returning the greater.
Google – and everyone else in the world – was and remains free to
write its own code to carry out the identical function so long as the
implementing code in the method body is different from the copy-
righted implementation. This is a simple example, but even if a
method resembles higher mathematics, everyone is still free to try
their hand at writing a different implementation, meaning that they
are free to use the same inputs to derive the same outputs so long as
the implementation in between is their own.
Much of Oracle’s evidence at trial went to show that the design
of methods in an API was a creative endeavor. Of course, that is
true. Inventing a new method to deliver a new output can be cre-
ative, even inventive, including the choices of inputs needed and out-
puts returned. But such inventions – at the concept and functionality
level – are protectable only under the Patent Act. Under the Copy-
right Act, no ma er how creative or imaginative a Java method spec-
ification may be, the entire world is entitled to use the same method
specification (inputs, outputs, parameters) so long as the line-by-line
974 CHAPTER 10. SOFTWARE
implementations are different. To repeat the Second Circuit’s phras-
ing, ”there might be a myriad of ways in which a programmer may
express the idea embodied in a given subroutine.” Altai The method
specification is the idea. The method implementation is the expression.
No one may monopolize the idea.
To carry out any given function, the method specification as set
forth in the declaration must be identical under the Java rules (save
only for the choices of argument names). Any other declaration
would carry out some other function. The declaration requires pre-
cision. Significantly, when there is only one way to write something,
the merger doctrine bars anyone from claiming exclusive copyright
ownership of that expression. Therefore, there can be no copyright
violation in using the identical declarations. Nor can there be any
copyright violation due to the name given to the method (or to the
arguments), for under the law, names and short phrases cannot be
copyrighted.
In sum, Google and the public were and remain free to write their
own implementations to carry out exactly the same functions of all
methods in question, using exactly the same method specifications
and names. Therefore, at the method level – the level where the heavy
lifting is done – Google has violated no copyright, it being undis-
puted that Google’s implementations are different.
***
Even so, the second major copyright question is whether Google was
and remains free to group its methods in the same way as in Java,
that is, to organize its Android methods under the same class and
package scheme as in Java. For example, the Math classes in both
systems have a method that returns a cosine, another method that re-
turns the larger of two numbers, and yet another method that returns
logarithmic values, and so on. As Oracle notes, the rules of Java did
not insist that these methods be grouped together in any particular
class. Google could have placed its trigonometric function (or any
other function) under a class other than Math class. Oracle is entirely
correct that the rules of the Java language did not require that the
same grouping pa ern (or even that they be grouped at all, for each
method could have been placed in a stand-alone class). There was
nothing in the rules of the Java language that required that Google
replicate the same groupings even if Google was free to replicate the
same functionality.
The main answer to this argument is that the overall scheme of
file name organization is also a command structure for a system or
method of operation of the application programming interface. The
commands are (and must be) in the form
C. COPYRIGHT 975
java.package.Class.method()
and each calls into action a pre-assigned function.
That a system or method of operation has thousands of com-
mands arranged in a creative taxonomy does not change its character
as a method of operation. Yes, it is creative. Yes, it is original. But it
is nevertheless a command structure, a system or method of opera-
tion – a long hierarchy of over six thousand commands to carry out
pre-assigned functions. For that reason, it cannot receive copyright
protection.
***
Interoperability sheds further light on the character of the command
structure as a system or method of operation. Surely, millions of lines
of code had been wri en in Java before Android arrived. These pro-
grams necessarily used the java.package.Class.method() command
format. These programs called on all or some of the specific 37 pack-
ages at issue and necessarily used the command structure of names
at issue. Such code was owned by the developers themselves, not by
Oracle. In order for at least some of this code to run on Android, Google was
required to provide the same java.package.Class.method() command system
using the same names with the same ”taxonomy” and with the same func-
tional specifications. Google replicated what was necessary to achieve
a degree of interoperability – but no more, taking care, as said before,
to provide its own implementations.
That interoperability is at the heart of the command structure is
illustrated by Oracle’s preoccupation with what it calls ”fragmen-
tation,” meaning the problem of having imperfect interoperability
among platforms. When this occurs, Java-based applications may not
run on the incompatible platforms. For example, Java-based code us-
ing the replicated parts of the 37 API packages will run on Android
but will not if a 38th package is needed. Such imperfect interoperabil-
ity leads to a ”fragmentation” – a Balkanization – of platforms, a cir-
cumstance which Sun and Oracle have tried to curb via their licensing
programs. In this litigation, Oracle has made much of this problem,
at times almost leaving the impression that if only Google had repli-
cated all 166 Java API packages, Oracle would not have sued. While
fragmentation is a legitimate business consideration, it begs the ques-
tion whether or not a license was required in the first place to replicate
some or all of the command structure. (This is especially so inasmuch
as Android has not carried the Java trademark, and Google has not
held out Android as fully compatible.) The immediate point is this:
fragmentation, imperfect interoperability, and Oracle’s angst over it
illustrate the character of the command structure as a functional sys-
tem or method of operation.
976 CHAPTER 10. SOFTWARE
Oracle America, Inc. v. Google Inc.
750 F.3d 1339 (Fed. Cir. 2014)
We are mindful that the application of copyright law in the computer
context is often a difficult task. On this record, however, we find that
the district court failed to distinguish between the threshold question
of what is copyrightable – which presents a low bar – and the scope
Why the Federal Circuit? Because the of conduct that constitutes infringing activity. The court also erred
case originally included patent claims, by importing fair use principles, including interoperability concerns,
giving the Federal Circuit appellate ju-
into its copyrightability analysis. For the reasons that follow, we con-
risdiction. Note that the Federal Circuit
here is technically applying Ninth Cir- clude that the declaring code and the structure, sequence, and orga-
cuit law. nization of the 37 Java API packages are entitled to copyright protec-
tion.
1. Declaring Source Code
Under the merger doctrine, a court will not protect a copyrighted
work from infringement if the idea contained therein can be ex-
pressed in only one way. For computer programs, this means that
when specific parts of the code, even though previously copyrighted,
are the only and essential means of accomplishing a given task, their
later use by another will not amount to infringement.
Atari: 975 F. 2d 832 (Fed. Cir. 1992) In Atari Games Corp. v. Nintendo of America Inc., for example,
Nintendo designed a program – the 10NES – to prevent its video
game system from accepting unauthorized game cartridges. Nin-
tendo ”chose arbitrary programming instructions and arranged them
in a unique sequence to create a purely arbitrary data stream” which
”serves as the key to unlock the NES.” Because Nintendo produced
expert testimony ”showing a multitude of different ways to generate
a data stream which unlocks the NES console,” we concluded that
Nintendo’s specific choice of code did not merge with the process.
The evidence showed that Oracle had unlimited options as to the
selection and arrangement of the 7000 lines Google copied. Using the
district court’s ”java.lang. Math.max” example, Oracle explains that
the developers could have called it any number of things, including
”Math.maximum” or ”Arith.larger.” This was not a situation where
Oracle was selecting among preordained names and phrases to cre-
ate its packages. As the district court recognized, moreover, ”the An-
droid method and class names could have been different from the
names of their counterparts in Java and still have worked.” Because
alternative expressions were available, there is no merger.
We further find that the district court erred in focusing its merger
analysis on the options available to Google at the time of copying. It
is well-established that copyrightability and the scope of protectable
activity are to be evaluated at the time of creation, not at the time of in-
fringement. The focus is, therefore, on the options that were available
to Sun/Oracle at the time it created the API packages. Of course, once
C. COPYRIGHT 977
Sun/Oracle created ”java.lang.Math.max,” programmers who want
to use that particular package have to call it by that name. But nothing
prevented Google from writing its own declaring code, along with its
own implementing code, to achieve the same result. In such circum-
stances, the chosen expression simply does not merge with the idea
being expressed.7
The district court is correct that words and short phrases such
as names, titles, and slogans are not subject to copyright protection.
The court failed to recognize, however, that the relevant question for
copyrightability purposes is not whether the work at issue contains
short phrases – as literary works often do – but, rather, whether those
phrases are creative. And, by dissecting the individual lines of declar-
ing code at issue into short phrases, the district court further failed
to recognize that an original combination of elements can be copy-
rightable.
By analogy, the opening of Charles Dickens’ A Tale of Two Cities is
nothing but a string of short phrases. Yet no one could contend that "It was the best of times, it was the
this portion of Dickens’ work is unworthy of copyright protection worst of times, it was the age of wis-
dom, it was the age of foolishness, it
because it can be broken into those shorter constituent components.
was the epoch of belief, it was the
The question is not whether a short phrase or series of short phrases epoch of incredulity, it was the season
can be extracted from the work, but whether the manner in which of Light, it was the season of Darkness,
they are used or strung together exhibits creativity. it was the spring of hope, it was the
Although the district court apparently focused on individual lines winter of despair, we had everything
before us, we had nothing before us,
of code, Oracle is not seeking copyright protection for a specific short
we were all going direct to Heaven, we
phrase or word. Instead, the portion of declaring code at issue is were all going direct the other way --
7,000 lines, and Google’s own ”Java guru” conceded that there can in short, the period was so far like the
be ”creativity and artistry even in a single method declaration.” Be- present period, that some of its noisi-
cause Oracle exercised creativity in the selection and arrangement of est authorities insisted on its being re-
ceived, for good or for evil, in the su-
the method declarations when it created the API packages and wrote perlative degree of comparison only."
the relevant declaring code, they contain protectable expression that Charles Dickens, A Tale of Two Cities
is entitled to copyright protection. "Mr. Burns: This is a thousand mon-
keys working at a thousand typewriters.
2. The Structure, Sequence, and Organization of the API Packages Soon, they'll have written the greatest
novel known to man. Let's see ... 'It was
The district court found that the SSO of the Java API packages is cre-
the best of times, it was the blurst of
ative and original, but nevertheless held that it is a system or method times!' You stupid monkey!" The Simp-
of operation and, therefore, cannot be copyrighted. In reaching this sons, "Last Exit to Springfield" (episode
conclusion, the district court seems to have relied upon language con- 9F15).
tained in a First Circuit decision, Lotus Development Corp. v. Borland Lotus: 49 F.3d 807 (1st Cir. 1995), aff'd
International, Inc.. without opinion by equally divided court,
In Lotus, it was undisputed that the defendant copied the menu 516 U.S. 233 (1996)
command hierarchy and interface from Lotus 1-2-3, a computer
7
he district court did not find merger with respect to the structure, sequence,
and organization of Oracle’s Java API packages. Nor could it, given the court’s
recognition that there were myriad ways in which the API packages could have
been organized.
978 CHAPTER 10. SOFTWARE
spreadsheet program that enables users to perform accounting func-
tions electronically on a computer. The menu command hierarchy re-
ferred to a series of commands – such as ”Copy,” ”Print,” and ”Quit”
– which were arranged into more than 50 menus and submenus. Al-
though the defendant did not copy any Lotus source code, it copied
the menu command hierarchy into its rival program. The question
before the court was whether a computer menu command hierarchy
is copyrightable subject ma er.
Although it accepted the district court’s finding that Lotus devel-
opers made some expressive choices in selecting and arranging the
command terms, the First Circuit found that the command hierarchy
was not copyrightable because, among other things, it was a ”method
of operation” under Section 102(b). In reaching this conclusion, the
court defined a ”method of operation” as ”the means by which a per-
son operates something, whether it be a car, a food processor, or a
computer.” Because the Lotus menu command hierarchy provided
”the means by which users control and operate Lotus 1-2-3,” it was
deemed unprotectable. For example, if users wanted to copy mate-
rial, they would use the ”Copy” command and the command terms
would tell the computer what to do. According to the Lotus court, the
”fact that Lotus developers could have designed the Lotus menu com-
mand hierarchy differently is immaterial to the question of whether it
is a ‘method of operation.’ The court further indicated that, ”[i]f spe-
cific words are essential to operating something, then they are part of
a ‘method of operation’ and, as such, are unprotectable.”
On appeal, Oracle argues that the district court’s reliance on Lotus
is misplaced because it is distinguishable on its facts and is inconsis-
tent with Ninth Circuit law. We agree. First, while the defendant in
Lotus did not copy any of the underlying code, Google concedes that
it copied portions of Oracle’s declaring source code verbatim. Sec-
ond, the Lotus court found that the commands at issue there (copy,
print, etc.) were not creative, but it is undisputed here that the declar-
ing code and the structure and organization of the API packages are
both creative and original. Finally, while the court in Lotus found
the commands at issue were ”essential to operating” the system, it is
undisputed that – other than perhaps as to the three core packages –
Google did not need to copy the structure, sequence, and organiza-
tion of the Java API packages to write programs in the Java language.
More importantly, however, the Ninth Circuit has not adopted the
court’s ”method of operation” reasoning in Lotus, and we conclude
that it is inconsistent with binding precedent. Specifically, we find
that Lotus is inconsistent with Ninth Circuit case law recognizing that
the structure, sequence, and organization of a computer program is
eligible for copyright protection where it qualifies as an expression
of an idea, rather than the idea itself. We find, moreover, that the
C. COPYRIGHT 979
hard and fast rule set down in Lotus and employed by the district
court here – i.e., that elements which perform a function can never
be copyrightable – is at odds with the Ninth Circuit’s endorsement
of the abstraction-filtration-comparison analysis.
Here, the district court recognized that the SSO ”resembles a tax-
onomy,” but found that ”it is nevertheless a command structure,
a system or method of operation — a long hierarchy of over six
thousand commands to carry out pre-assigned functions.”12 In other
words, the court concluded that, although the SSO is expressive, it is
not copyrightable because it is also functional. The problem with the
district court’s approach is that computer programs are by definition
functional – they are all designed to accomplish some task. If we were
to accept the district court’s suggestion that a computer program is
uncopyrightable simply because it ”carr[ies] out pre-assigned func-
tions,” no computer program is protectable. That result contradicts
Congress’s express intent to provide copyright protection to com-
puter programs, as well as binding Ninth Circuit case law finding
computer programs copyrightable, despite their utilitarian or func-
tional purpose.
On appeal, Oracle does not — and concedes that it cannot — claim
copyright in the idea of organizing functions of a computer program
or in the ”package-class-method” organizational structure in the ab-
stract. Instead, Oracle claims copyright protection only in its particu-
lar way of naming and organizing each of the 37 Java API packages.
Oracle recognizes, for example, that it ”cannot copyright the idea of
programs that open an internet connection,” but ”it can copyright the
precise strings of code used to do so, at least so long as other language
is available to achieve the same function.” Thus, Oracle concedes that
Google and others could employ the Java language – much like any-
one could employ the English language to write a paragraph without
violating the copyrights of other English language writers. And, that
Google may employ the ”package-class-method” structure much like
authors can employ the same rules of grammar chosen by other au-
thors without fear of infringement. What Oracle contends is that, be-
yond that point, Google, like any author, is not permi ed to employ
the precise phrasing or precise structure chosen by Oracle to flesh
out the substance of its packages — the details and arrangement of
the prose.
3. Google’s Interoperability Arguments are Irrelevant to Copyrightability
Oracle also argues that the district court erred in invoking interop-
erability in its copyrightability analysis. Specifically, Oracle argues
12
This analogy by the district court is meaningful because taxonomies, in varying
forms, have generally been deemed copyrightable. See, e.g., Practice Management
980 CHAPTER 10. SOFTWARE
that Google’s interoperability arguments are only relevant, if at all, to
fair use – not to the question of whether the API packages are copy-
rightable. We agree.
Connectix: 203 F.3d 596 (9th Cir. 2000) The district court characterized Accolade and Sony Computer En-
tertainment v. Connectix Corp. as ”close analogies” to this case. Ac-
cording to the court, both decisions ”held that interface procedures
that were necessary to duplicate in order to achieve interoperability
were functional aspects not copyrightable under Section 102(b).” The
district court’s reliance on Accolade and Connectix in the copyrighta-
bility context is misplaced, however. Both cases were focused on fair
use, not copyrightability. In Accolade, for example, the only question
was whether Accolade’s intermediate copying was fair use. The court
never addressed the question of whether Sega’s software code, which
had functional elements, also contained separable creative expression
entitled to protection.
This is not a case where Google reverse-engineered Oracle’s Java
packages to gain access to unprotected functional elements contained
therein. Had Google reverse engineered the programming packages
to figure out the ideas and functionality of the original, and then cre-
ated its own structure and its own literal code, Oracle would have no
remedy under copyright whatsoever. Instead, Google chose to copy
both the declaring code and the overall SSO of the 37 Java API pack-
ages at issue.
We disagree with Google’s suggestion thatAccolade and Connectix
created an ”interoperability exception” to copyrightability. Because
copyrightability is focused on the choices available to the plaintiff at
the time the computer program was created, the relevant compati-
bility inquiry asks whether the plaintiff’s choices were dictated by
a need to ensure that its program worked with existing third-party
programs. Whether a defendant later seeks to make its program inter-
operable with the plaintiff’s program has no bearing on whether the
software the plaintiff created had any design limitations dictated by
external factors. Stated differently, the focus is on the compatibility
needs and programming choices of the party claiming copyright pro-
tection – not the choices the defendant made to achieve compatibility
with the plaintiff’s program. Consistent with this approach, courts
have recognized that, once the plaintiff creates a copyrightable work,
a defendant’s desire ”to achieve total compatibility... is a commer-
cial and competitive objective which does not enter into the ... issue
of whether particular ideas and expressions have merged.” Apple v.
Franklin
Whether Google’s software is ”interoperable” in some sense with
any aspect of the Java platform (although as Google concedes, cer-
tainly not with the JVM) has no bearing on the threshold question of
whether Oracle’s software is copyrightable. It is the interoperability
C. COPYRIGHT 981
and other needs of Oracle – not those of Google – that apply in the
copyrightability context, and there is no evidence that when Oracle
created the Java API packages at issue it did so to meet compatibility
requirements of other pre-existing programs.
Google maintains on appeal that its use of the ”Java class and
method names and declarations was ‘the only and essential means’ of
achieving a degree of interoperability with existing programs wri en
in the Java language.” Indeed, given the record evidence that Google
designed Android so that it would not be compatible with the Java
platform, or the JVM specifically, we find Google’s interoperability
argument confusing. While Google repeatedly cites to the district
court’s finding that Google had to copy the packages so that an app
wri en in Java could run on Android, it cites to no evidence in the
record that any such app exists and points to no Java apps that ei-
ther pre-dated or post-dated Android that could run on the Android
platform. The compatibility Google sought to foster was not with Or-
acle’s Java platform or with the JVM central to that platform. Instead,
Google wanted to capitalize on the fact that software developers were
already trained and experienced in using the Java API packages at is-
sue. Google’s interest was in accelerating its development process
by leveraging Java for its existing base of developers. Although this
competitive objective might be relevant to the fair use inquiry, we con-
clude that it is irrelevant to the copyrightability of Oracle’s declaring
code and organization of the API packages.
Finally, to the extent Google suggests that it was entitled to copy
the Java API packages because they had become the effective indus-
try standard, we are unpersuaded. Google cites no authority for its
suggestion that copyrighted works lose protection when they become
popular, and we have found none. In fact, the Ninth Circuit has re-
jected the argument that a work that later becomes the industry stan-
dard is uncopyrightable. See Practice Management. Info. Corp. v. Am. Practice Management: 121 F.3d 516,
Med. Ass’n (noting that the district court found plaintiff’s medical (9th Cir. 1997)
coding system entitled to copyright protection, and that, although
the system had become the industry standard, plaintiff’s copyright
did not prevent competitors ”from developing comparative or bet-
ter coding systems and lobbying the federal government and private
actors to adopt them. It simply prevents wholesale copying of an ex-
isting system.”). Google was free to develop its own API packages
and to lobby programmers to adopt them. Instead, it chose to copy
Oracle’s declaring code and the SSO to capitalize on the preexisting
community of programmers who were accustomed to using the Java
API packages. That desire has nothing to do with copyrightability.
For these reasons, we find that Google’s industry standard argument
has no bearing on the copyrightability of Oracle’s work.
[On remand, the jury found that Google’s copying was a fair use.
982 CHAPTER 10. SOFTWARE
The District Court declined to set aside the verdict. The case is now
on appeal again on a variety of grounds.]
Tetris Problem
Based on Tetris Holding, LLC v. Xio Inter- Your client, Thoth Software, would like to create and sell a version
active, Inc., 863 F. Supp. 2d 394 (D.N.J. of Tetris for the Digix gaming console. What aspects of the game can
2012) and Spry Fox LLC v. LOLApps Inc.,
104 U.S.P.Q.2d 1299 (W. D. Wash 2012)
Thoth imitate without fear of liability? The name? Falling blocks?
The shapes of the blocks? Their colors? Lines that disappear when
completely filled in? The music? The graphics around the play field?
2 Defenses
When in 1980 Congress confirmed that software was copyrightable
as a literary work, it rewrote Section 117 to codify a kind of limited
exhaustion rule for software. Accolade shows that the courts have also
used fair use to create a fairly robust reverse engineering defense to
software copyright. Although it arises in the DMCA context, Corley
shows how the courts have applied the First Amendment to software
copyright.
Copyright Act
17 U.S.C. § 117
(a) Making of Additional Copy or Adaptation by Owner of Copy. –
Limitations on exclusive rights: Com- Notwithstanding the provisions of section 106, it is not an in-
puter programs fringement for the owner of a copy of a computer program to
make or authorize the making of another copy or adaptation of
that computer program provided:
(1) that such a new copy or adaptation is created as an essen-
tial step in the utilization of the computer program in con-
junction with a machine and that it is used in no other man-
ner, or
(2) that such new copy or adaptation is for archival purposes
only and that all archival copies are destroyed in the
event that continued possession of the computer program
should cease to be rightful.
(b) Lease, Sale, or Other Transfer of Additional Copy or Adaptation. –
Any exact copies prepared in accordance with the provisions of
this section may be leased, sold, or otherwise transferred, along
with the copy from which such copies were prepared, only as
part of the lease, sale, or other transfer of all rights in the pro-
gram. Adaptations so prepared may be transferred only with
the authorization of the copyright owner.
(c) Machine Maintenance or Repair. – Notwithstanding the provi-
sions of section 106, it is not an infringement for the owner or
C. COPYRIGHT 983
lessee of a machine to make or authorize the making of a copy
of a computer program if such copy is made solely by virtue
of the activation of a machine that lawfully contains an autho-
rized copy of the computer program, for purposes only of main-
tenance or repair of that machine, if –
(1) such new copy is used in no other manner and is destroyed
immediately after the maintenance or repair is completed;
and
(2) with respect to any computer program or part thereof that
is not necessary for that machine to be activated, such pro-
gram or part thereof is not accessed or used other than to
make such new copy by virtue of the activation of the ma-
chine.
Sega Enterprises Ltd. v. Accolade, Inc.
977 F.2d 1510 (9th Cir. 1992)
Sega develops and market video entertainment systems, including
the ”Genesis” console and video game cartridges. Sega licenses its
copyrighted computer code and its ”SEGA” trademark to a num-
ber of independent developers of computer game software. Those
licensees develop and sell Genesis-compatible video games in com-
petition with Sega. Accolade is not and never has been a licensee of
Sega.
Accolade reverse engineered Sega’s video game programs in or-
der to discover the requirements for compatibility with the Genesis
console. As part of the reverse engineering process, Accolade trans-
formed the machine-readable object code contained in Sega’s game
cartridges into human-readable source code using a process called
”disassembly” or ”decompilation”2 Accolade purchased a Genesis Sega Genesis console
console and three Sega game cartridges, wired a decompiler into What about cases like Barr-Mullin and
the console circuitry, and generated printouts of the resulting source Silvaco, which asserted that reverse en-
code. Accolade engineers studied and annotated the printouts in or- gineering object code was impossible?
der to identify areas of commonality among the three game programs.
They then loaded the disassembled code back into a computer, and
experimented to discover the interface specifications for the Gene-
sis console by modifying the programs and studying the results. At
the end of the reverse engineering process, Accolade created a devel-
opment manual that incorporated the information it had discovered
about the requirements for a Genesis-compatible game. The manual
contained only functional descriptions of the interface requirements
and did not include any of Sega’s code.
[In creating its own games for the Genesis, Accolade] did not copy
Sega’s programs, but relied only on the information concerning inter-
2
Disassembly devices are commercially available and are widely used within
the software industry.
984 CHAPTER 10. SOFTWARE
face specifications for the Genesis that was contained in its develop-
ment manual. With the exception of the interface specifications, none
of the code in Accolade’s games is derived in any way from its exam-
ination of Sega’s code. In 1990, Accolade released ”Ishido”, a game
which it had originally developed and released for use with the Mac-
intosh and IBM personal computer systems, for use with the Genesis
console.
Accolade contends that its disassembly of copyrighted object code
as a necessary step in its examination of the unprotected ideas and
functional concepts embodied in the code is a fair use. Because, in
the case before us, disassembly is the only means of gaining access
to those unprotected aspects of the program, and because Accolade
has a legitimate interest in gaining such access (in order to determine
how to make its cartridges compatible with the Genesis console), we
Ishido screenshot agree with Accolade. Where there is good reason for studying or ex-
amining the unprotected aspects of a copyrighted computer program,
disassembly for purposes of such study or examination constitutes a
fair use.
There is no evidence in the record that Accolade sought to avoid
performing its own creative work. Indeed, most of the games that
Accolade released for use with the Genesis console were originally
developed for other hardware systems.
Accolade copied Sega’s software solely in order to discover the
functional requirements for compatibility with the Genesis console
– aspects of Sega’s programs that are not protected by copyright.
To the extent that there are many possible ways of accomplishing
a given task or fulfilling a particular market demand, the program-
mer’s choice of program structure and design may be highly creative
and idiosyncratic. However, computer programs are, in essence, util-
itarian articles – articles that accomplish tasks. As such, they contain
many logical, structural, and visual display elements that are dictated
by the function to be performed, by considerations of efficiency, or by
external factors such as compatibility requirements and industry de-
mands. Altai
Sega argues that even if many elements of its video game pro-
grams are properly characterized as functional and therefore not pro-
tected by copyright, Accolade copied protected expression. Sega is
correct. The record makes clear that disassembly is wholesale copy-
ing. Because computer programs are also unique among copyrighted
works in the form in which they are distributed for public use, how-
ever, Sega’s observation does not bring us much closer to a resolution
of the dispute.
The unprotected aspects of most functional works are readily ac-
cessible to the human eye. The systems described in accounting
textbooks or the basic structural concepts embodied in architectural
C. COPYRIGHT 985
plans, to give two examples, can be easily copied without also copy-
ing any of the protected, expressive aspects of the original works.
Computer programs, however, are typically distributed for public
use in object code form, embedded in a silicon chip or on a floppy
disk. For that reason, humans often cannot gain access to the unpro-
tected ideas and functional concepts contained in object code without
disassembling that code – i.e., making copies. If disassembly of copy-
righted object code is per se an unfair use, the owner of the copyright
gains a de facto monopoly over the functional aspects of his work –
aspects that were expressly denied copyright protection by Congress.
Universal City Studios, Inc. v. Corley
273 F.3d 429 (2001)
Our case concerns a security device, CSS computer code, that pre-
vents access by unauthorized persons to DVD movies. The CSS code
is embedded in the DVD movie. Access to the movie cannot be ob-
tained unless a person has a device, a licensed DVD player, equipped
with computer code capable of decrypting the CSS encryption code.
In its basic function, CSS is like a lock on a homeowner’s door, a com-
bination of a safe, or a security device a ached to a store’s products.
DeCSS is computer code that can decrypt CSS. In its basic function, The District Court noted in a foot-
it is like a skeleton key that can open a locked door, a combination that note, "Professor Touretzky of Carnegie
can open a safe, or a device that can neutralize the security device Mellon University convincingly demon-
strated that computer source and ob-
a ached to a store’s products. DeCSS enables anyone to gain access
ject code convey the same ideas as
to a DVD movie without using a DVD player. various other modes of expression, in-
The initial use of DeCSS to gain access to a DVD movie creates no cluding spoken language descriptions
loss to movie producers because the initial user must purchase the of the algorithm embodied in the
DVD. However, once the DVD is purchased, DeCSS enables the ini- code. He drew from this the conclu-
sion that the preliminary injunction ir-
tial user to copy the movie in digital form and transmit it instantly
rationally distinguished between the
in virtually limitless quantity, thereby depriving the movie producer code, which was enjoined, and other
of sales. The advent of the Internet creates the potential for instanta- modes of expression that convey the
neous worldwide distribution of the copied material. same idea, which were not,, although
[The District Court found that DeCSS was a ”technology” that was of course he had no reason to be aware
that the injunction drew that line only
”primarily designed” to circumvent CSS in violation of § 1201(a)(2)
because that was the limit of the re-
of the DMCA. It enjoined the defendant-appellants from posting the lief plaintiffs sought. With commend-
DeCSS code to the Internet.] able candor, he readily admitted that
At first glance, one might think that Congress has as much au- the implication of his view that the spo-
thority to regulate the distribution of computer code to decrypt DVD ken language and computer code ver-
sions were substantially similar was not
movies as it has to regulate distribution of skeleton keys, combina- necessarily that the preliminary injunc-
tions to safes, or devices to neutralize store product security devices. tion was too broad; rather, the logic of
However, despite the evident legitimacy of protection against unau- his position was that it was either too
thorized access to DVD movies, just like any other property, regula- broad or too narrow. Once again, the
tion of decryption code like DeCSS is challenged in this case because question of a substantially broader in-
junction need not be addressed here,
DeCSS differs from a skeleton key in one important respect: it not as plaintiffs have not sought broader re-
only is capable of performing the function of unlocking the encrypted lief."
986 CHAPTER 10. SOFTWARE
DVD movie, it also is a form of communication, albeit wri en in a lan-
guage not understood by the general public. As a communication,
the DeCSS code has a claim to being ”speech,” and as ”speech,” it
has a claim to being protected by the First Amendment.
Computer programs are not exempted from the category of First
Amendment speech simply because their instructions require use of
a computer. A recipe is no less ”speech” because it calls for the use
of an oven, and a musical score is no less ”speech” because it speci-
fies performance on an electric guitar. Arguably distinguishing com-
puter programs from conventional language instructions is the fact
that programs are executable on a computer. But the fact that a pro-
gram has the capacity to direct the functioning of a computer does not
mean that it lacks the additional capacity to convey information, and
it is the conveying of information that renders instructions ”speech”
for purposes of the First Amendment. The information conveyed by
most ”instructions” is how to perform a task.
The Appellants vigorously reject the idea that computer code can
be regulated according to any different standard than that applicable
to pure speech, i.e., speech that lacks a nonspeech component. Al-
though recognizing that code is a series of instructions to a computer,
they argue that code is no different, for First Amendment purposes,
than blueprints that instruct an engineer or recipes that instruct a
cook. We disagree. Unlike a blueprint or a recipe, which cannot yield
any functional result without human comprehension of its content,
human decision-making, and human action, computer code can in-
stantly cause a computer to accomplish tasks and instantly render
the results of those tasks available throughout the world via the In-
ternet. The only human action required to achieve these results can
be as limited and instantaneous as a single click of a mouse. These
realities of what code is and what its normal functions are require a
First Amendment analysis that treats code as combining nonspeech
and speech elements, i.e., functional and expressive elements.
We recognize that the functional capability of computer code can-
not yield a result until a human being decides to insert the disk con-
taining the code into a computer and causes it to perform its function
(or programs a computer to cause the code to perform its function).
Nevertheless, this momentary intercession of human action does not
diminish the nonspeech component of code, nor render code entirely
speech, like a blueprint or a recipe.
Neither the DMCA nor the posting prohibition is concerned with
whatever capacity DeCSS might have for conveying information to
a human being, and that capacity, as previously explained, is what
arguably creates a speech component of the decryption code. The
DMCA and the posting prohibition are applied to DeCSS solely be-
cause of its capacity to instruct a computer to decrypt CSS. That func-
D. TRADEMARK 987
tional capability is not speech within the meaning of the First Amend-
ment. The Government seeks to justify both the application of the
DMCA and the posting prohibition to the Appellants solely on the
basis of the functional capability of DeCSS to instruct a computer to
decrypt CSS, i.e., without reference to the content of the regulated
speech. This type of regulation is therefore content-neutral, just as
would be a restriction on trafficking in skeleton keys identified be-
cause of their capacity to unlock jail cells, even though some of the
keys happened to bear a slogan or other legend that qualified as a
speech component.
As a content-neutral regulation with an incidental effect on a
speech component, the regulation must serve a substantial govern-
mental interest, the interest must be unrelated to the suppression of
free expression, and the incidental restriction on speech must not bur-
den substantially more speech than is necessary to further that inter-
est. The Government’s interest in preventing unauthorized access to
encrypted copyrighted material is unquestionably substantial, and
the regulation of DeCSS by the posting prohibition plainly serves that
interest. Moreover, that interest is unrelated to the suppression of
free expression.
Posting DeCSS on the Appellants’ web site makes it instantly
available at the click of a mouse to any person in the world with access
to the Internet, and such person can then instantly transmit DeCSS
to anyone else with Internet access. Although the prohibition on
posting prevents the Appellants from conveying to others the speech
component of DeCSS, the Appellants have not suggested, much less
shown, any technique for barring them from making this instanta-
neous worldwide distribution of a decryption code that makes a
lesser restriction on the code’s speech component.
D Trademark
While trademark and trade dress law are excellent for protecting
trademarks for software, they don’t do particularly well protecting
software qua software.
Apple Inc. v. Samsung Electronics Co., Ltd.
786 F.3d 983 (Fed. Cir. 2015)
Apple sued Samsung in April 2011. On August 24, 2012, the first jury
reached a verdict that numerous Samsung smartphones infringed
and diluted Apple’s patents and trade dresses in various combina-
tions. The diluted trade dresses are Trademark Registration No.
3,470,983 and an unregistered trade dress defined in terms of certain
elements in the configuration of the iPhone.
The ’983 trade dress is a federally registered trademark. The ’983
trade dress claims the design details in each of the sixteen icons on the
988 CHAPTER 10. SOFTWARE
iPhone’s home screen framed by the iPhone’s rounded-rectangular
shape with silver edges and a black background:
The first icon depicts the le ers ”SMS” in green inside a
white speech bubble on a green background; ...
the seventh icon depicts a map with yellow and orange
roads, a pin with a red head, and a red-and-blue road sign
with the numeral ”280” in white; ...
the sixteenth icon depicts the distinctive configuration of
applicant’s media player device in white over an orange
background.
It is clear that individual elements claimed by the ’983 trade dress
are functional. For example, there is no dispute that the claimed de-
tails such as ”the seventh icon depicts a map with yellow and orange
roads, a pin with a red head, and a red-and-blue road sign with the
numeral ‘280’ in white” are functional. Apple’s user interface expert
Apple's '983 trade dress registration testified on how icon designs promote usability. This expert agreed
that ”the whole point of an icon on a smartphone is to communicate
to the consumer using that product, that if they hit that icon, certain
functionality will occur on the phone.” The expert further explained
that icons are ”visual shorthand for something” and that ”rectangu-
lar containers” for icons provide ”more real estate” to accommodate
the icon design. Apple rebuts none of this evidence.
Apple contends instead that Samsung improperly disaggregates
the ’983 trade dress into individual elements to argue functionality.
But Apple fails to explain how the total combination of the sixteen
icon designs in the context of iPhone’s screen-dominated rounded-
rectangular shape – all part of the iPhone’s ”easy to use” design
theme – somehow negates the undisputed usability function of the
individual elements. Apple’s own brief even relies on its expert’s
testimony about the ”instant recognizability due to highly intuitive
icon usage” on ”the home screen of the iPhone.” Apple’s expert was
discussing an analysis of the iPhone’s overall combination of icon de-
signs that allowed a user to recognize quickly particular applications
to use. The iPhone’s usability advantage from the combination of
its icon designs shows that the ’983 trade dress viewed as a whole
”s nothing other than the assemblage of functional parts. There is
no separate overall appearance which is non-functional. The undis-
puted facts thus demonstrate the functionality of the ’983 trade dress.
E Design Patent
The Apple-Samsung smartphone litigation has put design patents
on the map in a good way. We saw in the previous chapter that
they provided a natural solution to the problem of protecting three-
E. DESIGN PATENT 989
dimensional designs. How well do they fit software, and what as-
pects of software might they cover?
Michael Risch
17 Stan. Tech. Rev. 53 (2013)
Functionality and Graphical User Interface Design Patents
Today, design patents cover only images displayed on a screen. As
many claims are wri en, merely viewing an image on a blog page
or in a PDF file associated with this Article (which includes some
patented images) would constitute infringement. From a theoretical
point of view, something seems off about that: viewing an image on
a display screen can hardly be considered an article of manufacture,
yet the law outlaws precisely such use, even if one is simply viewing the
patent itself on a computer!
Thus, the second threshold question is whether an ephemeral im-
age, viewable anywhere and in any context, can be considered an
“article of manufacture” under the statute. The guidelines, issued in
1996, give surprisingly li le a ention to this question. Courts have
long held that “surface ornamentation” constitutes an article of man-
ufacture, and displayed images are part of a surface. Thus, the guide-
lines only ask whether the image is part of a display, not whether an
ephemeral image is they type of thing that should ever be protected.
Even if one accepts that copyrightable works should be protected
by design patent, this does not mean that all copyrightable expres-
sion qualifies for patent protection. Consider, for example, protec-
tion of structure, sequence, and organization of factual information.
This may well be protected by copyright, but does not fall under the
design patent umbrella.
Protection of user interfaces essentially merges the copyright
law’s fixation requirement with patent law’s “article of manufacture”
requirement. Fixation is the cornerstone of copyright: no work can
be protected if it is not fixed in a tangible medium. But fixation is
far from permanent; loading a file into computer memory is suffi-
ciently fixed, even if the computer could be turned off or the memory
changed.
The question, then, is whether any image present in computer
memory – fixed, to be sure – becomes an “article of manufacture,”
even if it is not displayed on the screen at all times. Thus far, the PTO
has said yes, and courts have not asked the question, assuming that if
a patent is issued, then it must be an article of manufacture. Indeed,
design patents now protect “animations,” which are a series of im-
ages that move in sequence, such as a spinning icon or a simulated
folding of a page to emulate a book on a display screen.
Protection of displays appears to rest on two seminal cases issued
by that Court of Customs & Patent Appeals, the precursor to the Fed-
eral Circuit. The first case is Hruby, which held that the shape of water
990 CHAPTER 10. SOFTWARE
moving in a fountain could be a patented design, even though the wa-
Zahn: 617 F.2d 261 (C.C.P.A. 1980) ter was moving and could be turned off. The second precedent is In
re Zahn in which the C.C.P.A. ruled that a portion of a manufacture
could be separated by a “broken line” to separate the new, protectable
design from the preexisting remainder of the article. Though the no-
tion that a portion of an article could be patented is more than 140
years old, the Zahn court’s broken line rule leads to the near ubiquity
of broken lines in graphical displays that separate the image from the
rest of the display.
Despite the apparent reasonableness of Hruby and Zahn with re-
spect to the facts of those cases, their extension to user interfaces is
troubling. Courts and commentators have simply not asked the dif-
ficult questions. Collapsing fixation, animation, and display screen
into an “article of manufacture” leaves design patents on a very slip-
pery slope.
For example, there is no theoretical bar to protecting every dis-
played copyrightable work with a design patent. Every television
show and movie is theoretically a novel and non-obvious design
to be incorporated into display screens everywhere. Indeed, every
photograph captured and displayed on every mobile device might
be protected. Every doodle on an electronic Etch-a-Sketch could be
patented. Any use of the material would be infringing, without any
consideration of fair use, the ideas represented by the work, or even
the First Amendment.
Further, and perhaps more unse ling, the only apparent reason
why such claims have not been made before is that nobody thought
to do so, because there is no body of law to avoid such an outcome.
The PTO has almost no tools to reject small, or even large, snippets
of movies. While only a single inventive design may be covered by a
patent, multiple patents might be filed on different—but important—
segments of audiovisual works, sufficient to block all downstream
use with no fair use defense. A design patent protecting four or five
screen captures from the famous Hitler Downfall movie scene would
eliminate all claims to fair use of that short but endlessly entertaining
parody clip. The PTO has no track record of rigorously examining
images to determine whether they are novel or obvious. Even if it did,
the exact combination of images in that screen is unlikely to appear
elsewhere.
This parade of horribles might be solved in two ways. First, courts
could recognize that an article of manufacture (or portion thereof)
requires more than copyright fixation. Instead, an article of man-
ufacture requires permanence at the point of manufacture, display,
and use. To be sure, many elements might be hidden at one point
or another, such as bo oms of drawers, collapsible devices, folding
elements that become hidden, or even water fountains. But each of
E. DESIGN PATENT 991
these examples is different in kind from the ephemeral images on a
display screen. Ephemeral images can be configured by moving bits
in memory, and as such, they are not ornamental articles of manufac-
ture; instead, they are displays of information. In short, the PTO’s
1996 concern about patenting images was well founded, but the solu-
tion was not to add “on a display screen” to patent claims. Instead,
the solution was to recognize that images divorced from manufac-
ture do not qualify as articles – they can be shown on any article, any
screen, and any device, and that is not what design patents are meant
to protect.
A second solution might recognize that modern commercial prod-
ucts live under a big tent. As such, there may be times when the
design of the product includes designs on the screen. However, pro-
tection for displayed surface designs should be limited in a number
of ways to ensure that the design is an ornamental article of manufac-
ture, rather than an ephemeral image.
Smartphone Problem
Here are Figure 1 from Design Patent 604,305 (left), assigned to Apple, Based on Apple Inc. v. Samsung Elec-
and a picture of the Samsung Galaxy S (right). Does the Galaxy S tronics Co., Ltd., 786 F.3d 983 (Fed. Cir.
2015)
infringe the ’305 pagent?
992 CHAPTER 10. SOFTWARE
11
Biotechnology
Biotechnology raises not one but two recurring intellectual property
issues. The first is that its subject ma er is a mix of the natural and the
artificial. As we saw in Mayo and Myriad, drawing the line between
the two can be difficult and contentious. The second distinctive prob-
lem of biotechnology is that biology is exceptionally complicated; bi-
ological systems are unpredictable and hard to model. What’s more,
the biological systems we most care about – living human bodies –
are nost just complicated beyond our present understanding but also
so precious that experiments on them cannot be undertaken lightly.
This means that biological innovation is often slow and amazingly
expensive, but also amazingly valuable when successful. These facts
inflect the IP system in some important ways. Most importantly,
they give rise to an extensive and intensive regulatory regime that
restricts how drugs and similar medical technologies are researched
and commercialized. Like a supertanker steaming through a boat
pond, this regime has drawn the intellectual property system along
into its wake.
A Patent
1 Subject Matter
Association for Molecular Pathology v. Myriad Genetics, Inc.
133 S. Ct. 2107 (2013)
[According to the Supreme Court’s summary, human DNA consists
of a long string of nucleotides, each of which is one of four molecular
fragments commonly abbreviated A, C, T, and G. Each sequence of
three nucleotides codes for one of twenty amino acids, the molecules
from which the body builds proteins. A gene is sequence of nu-
cleotides that code for the amino acids making up a protein; put an-
other way, a gene contains the information the body uses to make
a particular protein. Naturally occurring DNA sequences contain
994 CHAPTER 11. BIOTECHNOLOGY
portions, called ”introns,” that do not actually code for amino acids;
those portions are ignored when the body makes proteins from genes.
The remaining portions of DNA, which do code for amino acids and
which are used in making proteins, are called ”exons.”
Myriad discovered that mutations in two human genes, BRCA1
and BRCA2, substantially increased a woman’s risk of developing
breast cancer. It developed and marketed a test for these mutations.
It also obtained multiple patents related to the discovery and the test,
which it used to prevent competition from other tests. Claim 1 of
patent 5,747,282, for example, claimed ”an isolated DNA coding for a
BRCA1 polypeptide,” with ”the amino acid sequence set forth in [an
a achment listing a sequence of 1,863 amino acids].” Other claims
covered cDNA (short for ”complementary DNA”), which is created
using synthetic laboratory methods by copying naturally occurring
DNA. The resulting molecule differs in that it contains only exons
and omits the introns.]
It is undisputed that Myriad did not create or alter any of the ge-
netic information encoded in the BRCA1 and BRCA2 genes. The lo-
cation and order of the nucleotides existed in nature before Myriad
found them. Nor did Myriad create or alter the genetic structure
of DNA. Instead, Myriad’s principal contribution was uncovering
the precise location and genetic sequence of the BRCA1 and BRCA2
genes within chromosomes 17 and 13. The question is whether this
renders the genes patentable.
Chakrabarty: 443 U.S. 303 (1980) Myriad recognizes that our decision in Diamond v. Chakrabarty
is central to this inquiry. In Chakrabarty, scientists added four plas-
mids to a bacterium, which enabled it to break down various compo-
nents of crude oil. The Court held that the modified bacterium was
patentable. It explained that the patent claim was ”not to a hitherto
unknown natural phenomenon, but to a nonnaturally occurring man-
ufacture or composition of ma er — a product of human ingenuity
having a distinctive name, character and use.” The Chakrabarty bac-
terium was new ”with markedly different characteristics from any
found in nature,” due to the additional plasmids and resultant ”ca-
pacity for degrading oil.” In this case, by contrast, Myriad did not
create anything. To be sure, it found an important and useful gene,
but separating that gene from its surrounding genetic material is not
an act of invention.
Groundbreaking, innovative, or even brilliant discovery does not
by itself satisfy the § 101 inquiry.
Nor are Myriad’s claims saved by the fact that isolating DNA
from the human genome severs chemical bonds and thereby creates
a nonnaturally occurring molecule. Myriad’s claims are simply not
expressed in terms of chemical composition, nor do they rely in any
way on the chemical changes that result from the isolation of a par-
A. PATENT 995
ticular section of DNA. Instead, the claims understandably focus on
the genetic information encoded in the BRCA1 and BRCA2 genes. If
the patents depended upon the creation of a unique molecule, then
a would-be infringer could arguably avoid at least Myriad’s patent
claims on entire genes (such as claims 1 and 2 of the ’282 patent) by
isolating a DNA sequence that included both the BRCA1 or BRCA2
gene and one additional nucleotide pair. Such a molecule would
not be chemically identical to the molecule ”invented” by Myriad.
But Myriad obviously would resist that outcome because its claim
is concerned primarily with the information contained in the genetic
sequence, not with the specific chemical composition of a particular
molecule.
cDNA does not present the same obstacles to patentability as The Court draws a distinction between
naturally occurring, isolated DNA segments. As already explained, unpatentable genomic DNA and
patentable cDNA, but the difference
creation of a cDNA sequence from mRNA results in an exons-only
between these two types of DNA lies in
molecule that is not naturally occurring. Petitioners concede that how they are made, not their sequence.
cDNA differs from natural DNA in that ”the non-coding regions have A cDNA generated from an organism
been removed.” They nevertheless argue that cDNA is not patent eli- without introns (e.g. bacteria) will have
gible because ”the nucleotide sequence of cDNA is dictated by nature, the exact same sequence as genomic
DNA. Furthermore, the splice junctions
not by the lab technician.” That may be so, but the lab technician un-
in human cDNA are natural: they were
questionably creates something new when cDNA is made. cDNA re- not designed by an inventor.
tains the naturally occurring exons of DNA, but it is distinct from the —Eric Grote, Legal and Scientific
DNA from which it was derived. As a result, cDNA is not a ”prod- Flaws in the Myriad Genetics Litigation
uct of nature” and is patent eligible under § 101, except insofar as (unpublished draft 2014).
very short series of DNA may have no intervening introns to remove
when creating cDNA. In that situation, a short strand of cDNA may
be indistinguishable from natural DNA.
Justice SCALIA, concurring in part and concurring in the judgment.
I join the judgment of the Court, and all of its opinion except Part
I-A and some portions of the rest of the opinion going into fine de-
tails of molecular biology. I am unable to affirm those details on my
own knowledge or even my own belief. It suffices for me to affirm,
having studied the opinions below and the expert briefs presented
here, that the portion of DNA isolated from its natural state sought
to be patented is identical to that portion of the DNA in its natural
state; and that complementary DNA (cDNA) is a synthetic creation
not normally present in nature.
In re Roslin Institute (Edinburgh)
750 F.3d 1333 (2014)
On July 5, 1996, Keith Henry Stockman Campbell and Ian Wilmut
successfully produced the first mammal ever cloned from an adult
somatic cell: Dolly the Sheep. A clone is an identical genetic copy of
a cell, cell part, or organism.
Campbell and Wilmut obtained a patent on the somatic method of
996 CHAPTER 11. BIOTECHNOLOGY
cloning mammals, which has been assigned to Roslin. See U.S. Patent
No. 7,514,258. The ‘258 patent is not before us in this appeal. Instead,
the dispute here concerns the Patent and Trademark Office’s (PTO)
rejection of Campbell’s and Wilmut’s claims to the clones themselves,
set forth in the ‘233 application, titled Quiescent Cell Populations for
Nuclear Transfer.
The ‘233 application claims the products of Campbell’s and
Wilmut’s cloning method: ca le, sheep, pigs, and goats. Claim 155
Dolly the Sheep
and 164 is representative:
155. A live-born clone of a pre-existing, non-embryonic,
donor mammal, wherein the mammal is selected from cat-
tle, sheep, pigs, and goats.
Even before the Supreme Court’s recent decision in Myriad, the
Funk Bros.: 333 U.S. 127 (1948) Court’s opinions in Chakrabarty and Funk Bros. Seed Co. v. Kalo In-
oculant Co., made clear that naturally occurring organisms are not
patentable.
In Funk Bros, the Supreme Court considered a patent that claimed
a mixture of naturally occurring strains of bacteria that helped legu-
minous plants extract nitrogen from the air and fix it in soil. The
Court concluded that this mixture of bacteria strains was not patent
eligible because the patentee did not alter the bacteria in any way.
Critically, in Funk Bros., the Court explained:
We do not have presented the question whether the meth-
ods of selecting and testing the non-inhibitive strains are
patentable. We have here only product claims. The paten-
tee does not create a state of inhibition or of non-inhibition
in the bacteria. Their qualities are the work of nature.
Those qualities are of course not patentable. For patents
cannot issue for the discovery of the phenomena of nature.
The qualities of these bacteria, like the heat of the sun, elec-
tricity, or the qualities of metals, are part of the storehouse
of knowledge of all men. They are manifestations of laws
of nature, free to all men and reserved exclusively to none.
Thus, while the method of selecting the strains of bacteria might have
been patent eligible, the natural organism itself – the mixture of bac-
teria – was unpatentable because its ”qualities are the work of nature”
unaltered by the hand of man.
The patent at issue in Chakrabarty claimed a genetically engineered
bacterium that was capable of breaking down various components of
crude oil. The patent applicant created this non-naturally occurring
bacterium by adding four plasmids to a specific strain of bacteria. The
Court held that the modified bacterium was patentable because it was
”new” with ”markedly different characteristics from any found in na-
A. PATENT 997
ture and one having the potential for significant utility.” As the Court
explained, the patentee’s ”discovery is not nature’s handiwork, but
his own.”
Accordingly, discoveries that possess ”markedly different charac-
teristics from any found in nature,” are eligible for patent protection.
In contrast, any existing organism or newly discovered plant found in
the wild is not patentable. See also In re Beineke (holding that a newly Beineke: 690 F.3d 1344 (Fed. Cir. 2012)
discovered type of plant is not eligible for plant patent protection, in
part, because such a plant was not ”in any way the result of the patent
applicant’s creative efforts or indeed anyone’s creative efforts.”).
While Roslin does not dispute that the donor sheep whose genetic
material was used to create Dolly could not be patented, Roslin con-
tends that copies (clones) are eligible for protection because they are
”the product of human ingenuity” and ”not nature’s handiwork, but
their own.” Roslin argues that such copies are either compositions of
ma er or manufactures within the scope of § 101. However, Dolly
herself is an exact genetic replica of another sheep and does not pos-
sess markedly different characteristics from any farm animals found
in nature. Dolly’s genetic identity to her donor parent renders her
unpatentable.
Supreme Court decisions regarding the preemptive force of fed-
eral patent law confirm that individuals are free to copy any un-
patentable article, such as a live farm animal, so long as they do not
infringe a patented method of copying. In Sears, Roebuck & Co. v. Sears, Roebuck: 376 U.S. 225 (1964)
Stiffel Co., the question was whether the defendant could be held li-
able under state law for copying a lamp design whose patent protec-
tion had expired. The Court explained that ”when the patent expires
the monopoly created by it expires, too, and the right to make the
article – including the right to make it in precisely the shape it car-
ried when patented – passes to the public.” The Court further clari-
fied that ”an unpatentable article, like an article on which the patent
has expired, is in the public domain and may be made and sold by
whoever chooses to do so.” Roslin’s claimed clones are exact genetic
copies of patent ineligible subject ma er. Accordingly, they are not
eligible for patent protection.
Roslin argues that its claimed clones are patent eligible because
they are distinguishable from the donor mammals used to create
them. First, Roslin contends that ”environmental factors” lead to phe-
notypic differences that distinguish its clones from their donor mam-
mals. A phenotype refers to all the observable characteristics of an
organism, such as shape, size, color, and behavior, that result from
the interaction of the organism’s genotype with its environment. A
mammal’s phenotype can change constantly throughout the life of
that organism not only due to environmental changes, but also the
physiological and morphological changes associated with aging.
998 CHAPTER 11. BIOTECHNOLOGY
Roslin argues that environmental factors lead to phenotypic dif-
ferences between its clones and their donor mammals that render
their claimed subject ma er patentable. However, these differences
are unclaimed. Indeed, the word ”cloned” in the pending claims
connotes genetic identity, and the claims say nothing about a phe-
notypic difference between the claimed subject ma er and the donor
mammals. Moreover, Roslin acknowledges that any phenotypic dif-
ferences came about or were produced quite independently of any
effort of the patentee. Contrary to Roslin’s arguments, these pheno-
typic differences do not confer eligibility on their claimed subject mat-
ter. Any phenotypic differences between Roslin’s donor mammals
and its claimed clones are the result of environmental factors, unin-
fluenced by Roslin’s efforts.
Second, Roslin urges that its clones are distinguishable from their
original donor mammals because of differences in mitochondrial
DNA, which originates from the donor oocyte rather than the donor
nucleus. Mitochondria are the organelles (cellular bodies) that pro-
duce the energy eukaryotic cells need to function. Mitochondria pos-
sess their own DNA, which is distinct from the DNA housed in the
cell’s nucleus. In the cloning process, the clone inherits its mitochon-
drial DNA from its donor oocyte, instead of its donor somatic cell.
Therefore, Dolly’s mitochondrial DNA came from the oocyte used
to create her, not her donor mammary cell. Roslin argues that this
difference in mitochondrial DNA renders its product claims patent
eligible.
But any difference in mitochondrial DNA between the donor and
cloned mammals is, too, unclaimed. Furthermore, Roslin’s patent
application does not identify how differences in mitochondrial DNA
influence or could influence the characteristics of cloned mammals.
Finally, Roslin argues that its clones are patent eligible because
they are time-delayed versions of their donor mammals, and there-
fore different from their original mammals. But this distinction can-
not confer patentability. The difficulty with the time-delayed charac-
teristic is that it is true of any copy of an original.
Ariosa Diagnostics, Inc. v. Sequenom, Inc.
788 F. 3d 1371 (Fed. Cir. 2015)
In 1996, Drs. Dennis Lo and James Wainscoat discovered cell-free
fetal DNA (”cffDNA”) in maternal plasma and serum, the portion
of maternal blood samples that other researchers had previously dis-
carded as medical waste. cffDNA is non-cellular fetal DNA that cir-
culates freely in the blood stream of a pregnant woman. Applying a
combination of known laboratory techniques to their discovery, Drs.
Lo and Wainscoat implemented a method for detecting the small frac-
tion of paternally inherited cffDNA in maternal plasma or serum to
determine fetal characteristics, such as gender. The invention, com-
A. PATENT 999
mercialized by Sequenom as its MaterniT21 test, created an alter-
native for prenatal diagnosis of fetal DNA that avoids the risks of
widely-used techniques that took samples from the fetus or placenta.
In 2001, Drs. Lo and Wainscoat obtained U.S Patent No. 6,258,540,
which relates to this discovery.
The parties agree that the patent does not claim cffDNA or pater-
nally inherited cffDNA. Instead, the ’540 patent claims certain meth-
ods of using cffDNA. The steps of the method of claim 1 of the ’540
patent include amplifying the cffDNA contained in a sample of a
plasma or serum from a pregnant female and detecting the paternally
inherited cffDNA. Amplifying cffDNA results in a single copy, or a
few copies, generating thousands to millions of copies of that particu-
lar DNA sequence. In the amplification step, DNA is extracted from
the serum or plasma samples and amplified by polymerase chain re-
action (”PCR”) or another method. PCR exponentially amplifies the
cffDNA sample to detectable levels.
Ariosa makes and sells the Harmony Test, a non-invasive test
used for prenatal diagnosis of certain fetal characteristics. [Sequenom
threatened suit and Ariosa filed an action seeking a declaratory judg-
ment of noninfringement.]
It is undisputed that the existence of cffDNA in maternal blood is
a natural phenomenon. Sequenom does not contend that Drs. Lo and
Wainscoat created or altered any of the genetic information encoded
in the cffDNA, and it is undisputed that the location of the nucleic
acids existed in nature before Drs. Lo and Wainscoat found them.
The method ends with paternally inherited cffDNA, which is also a
natural phenomenon. The method therefore begins and ends with a
natural phenomenon. Thus, the claims are directed to ma er that is
naturally occurring.
Because the claims at issue are directed to naturally occurring phe-
nomena, we turn to the second step of Mayo’s framework. In the sec-
ond step, we examine the elements of the claim to determine whether
the claim contains an inventive concept sufficient to ”transform” the
claimed naturally occurring phenomenon into a patenteligible appli-
cation. For process claims that encompass natural phenomenon, the
process steps are the additional features that must be new and useful.
Like the patentee in Mayo, Sequenom contends that the claimed
methods are patent eligible applications of a natural phenomenon,
specifically a method for detecting paternally inherited cffDNA. Us-
ing methods like PCR to amplify and detect cffDNA was well-
understood, routine, and conventional activity in 1997. The method
at issue here amounts to a general instruction to doctors to apply
routine, conventional techniques when seeking to detect cffDNA. Be-
cause the method steps were well-understood, conventional and rou-
tine, the method of detecting paternally inherited cffDNA is not new
1000 CHAPTER 11. BIOTECHNOLOGY
and useful. The only subject ma er new and useful as of the date of
the application was the discovery of the presence of cffDNA in ma-
ternal plasma or serum.
Sequenom argues that there are numerous other uses of cffDNA
aside from those claimed in the ’540 patent, and thus, the ’540 patent
does not preempt all uses of cffDNA. While preemption may signal
patent ineligible subject ma er, the absence of complete preemption
does not demonstrate patent eligibility. In this case, Sequenom’s at-
tempt to limit the breadth of the claims by showing alternative uses
of cffDNA outside of the scope of the claims does not change the con-
clusion that the claims are directed to patent ineligible subject ma er.
Where a patent’s claims are deemed only to disclose patent ineligible
subject ma er under the Mayo framework, as they are in this case,
preemption concerns are fully addressed and made moot.
Linn, Circuit Judge, concurring:
I join the court’s opinion invalidating the claims of the ’540 patent
only because I am bound by the sweeping language of the test set out
in Mayo. In my view, the breadth of the second part of the test was
unnecessary to the decision. This case represents the consequence –
perhaps unintended – of that broad language in excluding a meritori-
ous invention from the patent protection it deserves and should have
been entitled to retain.
The Supreme Court’s blanket dismissal of conventional post-
solution steps leaves no room to distinguish Mayo from this case,
even though here no one was amplifying and detecting paternally-
inherited cffDNA using the plasma or serum of pregnant mothers. In-
deed, the maternal plasma used to be routinely discarded, because, as
Dr. Evans testified, ”nobody thought that fetal cell-free DNA would
be present.”
It is hard to deny that Sequenom’s invention is truly meritorious.
Prior to the ’540 patent, prenatal diagnoses required invasive meth-
ods, which presented a degree of risk to the mother and to the preg-
nancy. The available techniques were time-consuming or required
expensive equipment. In a groundbreaking invention, Drs. Lo and
Wainscoat discovered that there was cell-free fetal DNA in the mater-
nal plasma. The Royal Society lauded this discovery as ”a paradigm
shift in non-invasive prenatal diagnosis,” and the inventors’ article
describing this invention has been cited well over a thousand times.
The commercial embodiment of the invention, the MaterniT21 test,
was the first marketed non-invasive prenatal diagnostic test for fetal
aneuploidies, such as Down’s syndrome, and presented fewer risks
and a more dependable rate of abnormality detection than other tests.
Unlike in Mayo, the ’540 patent claims a new method that should be
patent eligible. While the instructions in the claims at issue in Mayo
A. PATENT 1001
had been widely used by doctors – they had been measuring metabo-
lites and recalculating dosages based on toxicity/inefficacy limits for
years – here, the amplification and detection of cffDNA had never be-
fore been done. The new use of the previously discarded maternal
plasma to achieve such an advantageous result is deserving of patent
protection.
In short, Sequenom’s invention is nothing like the invention at is-
sue in Mayo. But for the sweeping language in the Supreme Court’s
Mayo opinion, I see no reason, in policy or statute, why this break-
through invention should be deemed patent ineligible.
DNA Copyright Problem
Two law professors collaborated with a biotechnology company to
create what they called ”Prancer”:
a DNA sequence that provides a set of instructions for the The Copyright Office said "no." Its rea-
synthesis of a protein comprising 231 amino acids linked soning, along with the professors' re-
sponse, are detailed in Christopher M.
together in a specific order. The set of instructions is
Holman, Claes Gustafsson, & Andrew
coded in the standard genetic code, and is interpretable by W. Torrance, Are Engineered Genetic Se-
most living biological systems. The encoded protein is flu- quences Copyrightable?, 35 Biotech. L.
orescent, which is a useful functional a ribute in biotech- Rep. 103 (2016). But try not to peek
nology. before you try your hand at coming up
with the best reasons for and against!
Is Prancer a copyrightable work of authorship?
2 Ownership
The doctrines here are familiar. Schering illustrates some of the inher-
ent difficulty in determining novelty (and also infringement) given
that biological systems transform substances in complex ways. Eli
Lilly v. Zenith considers the novelty implications of clinical drug test-
ing.
Schering Corp. v. Geneva Pharmaceuticals
339 F.3d 1373 (Fed. Cir. 2003)
The District Court correctly determined that that U.S. Patent No.
4,282,233 inherently anticipates claims 1 and 3 of Patent No.
4,659,716.
Schering owns the ’233 and ’716 patents on antihistamines. Anti-
histamines inhibit the histamines that cause allergic symptoms.
The prior art ’233 patent covers the antihistamine loratadine,
the active component of a pharmaceutical that Schering markets
as CLARITIN. Unlike conventional antihistamines when CLARITIN
was launched, loratadine does not cause drowsiness.
The more recent ’716 patent at issue in this case covers a metabo-
lite of loratadine called descarboethoxyloratadine (DCL).. A metabo-
lite is the compound formed in the patient’s body upon ingestion of a
1002 CHAPTER 11. BIOTECHNOLOGY
pharmaceutical. The ingested pharmaceutical undergoes a chemical
conversion in the digestion process to form a new metabolite com-
pound. The metabolite DCL is also a non-drowsy antihistamine. The
’716 patent issued in April 1987 and will expire in April 2004 (the ’233
patent issued in 1981 and has since expired).
A patent is invalid for anticipation if a single prior art reference
discloses each and every limitation of the claimed invention. More-
over, a prior art reference may anticipate without disclosing a feature
of the claimed invention if that missing characteristic is necessarily
present, or inherent, in the single anticipating reference. Inherent an-
ticipation does not require that a person of ordinary skill in the art at
the time would have recognized the inherent disclosure.
DCL is not formed accidentally or under unusual conditions
when loratadine is ingested. The record shows that DCL necessarily
and inevitably forms from loratadine under normal conditions. DCL
is a necessary consequence of administering loratadine to patients.
Loratadine This court recognizes that this may be a case of first impression,
because the prior art does not disclose any compound that is identi-
fiable as DCL. In this court’s prior inherency cases, a single prior art
reference generally contained an incomplete description of the antic-
ipatory subject ma er, i.e., a partial description missing certain as-
pects. Inherency supplied the missing aspect of the description.
This court sees no reason to modify the general rule for inherent
anticipation in a case where inherency supplies the entire anticipa-
tory subject ma er. The patent law principle ”that which would liter-
ally infringe if later in time anticipates if earlier,” bolsters this conclu-
sion. Similarly, if granting patent protection on the disputed claim
would allow the patentee to exclude the public from practicing the
Descarboethoxyloratadine prior art, then that claim is anticipated. The public remains free to
make, use, or sell prior art compositions or processes, regardless of
whether or not they understand their complete makeup or the under-
lying scientific principles which allow them to operate. The doctrine
of anticipation by inherency, among other doctrines, enforces that ba-
sic principle. Thus, inherency operates to anticipate entire inventions
as well as single limitations within an invention.
Turning to this case, the use of loratadine would infringe claims 1
and 3 of the ’716 patent covering the metabolite DCL. This court has
recognized that a person may infringe a claim to a metabolite if the
person ingests a compound that metabolizes to form the metabolite.
An identical metabolite must then anticipate if earlier in time than the
claimed compound.
This court’s conclusion on inherent anticipation in this case does
not preclude patent protection for metabolites of known drugs. With
proper claiming, patent protection is available for metabolites of
Kratz: 592 F.2d 1169 (CCPA 1979) known drugs. Cf. In re Kra (stating that a naturally occurring straw-
A. PATENT 1003
berry constituent compound does not anticipate claims to the sub-
stantially pure compound); In re Bergstrom (stating that a material oc- Bergstrom: 427 F.2d 1394 (CCPA 1970)
curring in nature in less pure form does not anticipate claims to the
pure material).
But those metabolites may not receive protection via compound
claims. In this case, for instance, claims 1 and 3 broadly encompass
compounds defined by structure only. Such bare compound claims
include within their scope the recited compounds as chemical species
in any surroundings, including within the human body as metabo-
lites of a drug. As this case holds, these broad compound claims are
inherently anticipated by a prior art disclosure of a drug that metab-
olizes into the claimed compound.
A skilled patent drafter, however, might fashion a claim to cover
the metabolite in a way that avoids anticipation. For example, the
metabolite may be claimed in its pure and isolated form, as in Kra
and Bergstrom, or as a pharmaceutical composition (e.g., with a phar-
maceutically acceptable carrier). The patent drafter could also claim
a method of administering the metabolite or the corresponding phar-
maceutical composition. The ’233 patent would not provide an en-
abling disclosure to anticipate such claims because, for instance, the
’233 patent does not disclose isolation of DCL.
Eli Lilly and Co. v. Zenith Goldline Pharm. Inc.
364 F. Supp. 2d 820 (S.D. Ind. 2005)
Defendants have failed to prove by clear and convincing evidence
that the HGAA, HGAB, and HGAC Phase I clinical trials of olanzap-
ine were public. These studies were conducted by Lilly personnel in Olanzapine is an antipsychotic
the Lilly clinic. Lilly restricted access to the facility and provided full- approved for the treatment of
time security. In addition, the studies were fully controlled by Lilly. schizophrenia and bipolar disorder;
Eli Lilly marketed it under the brand
The volunteers, who were healthy and not suffering from schizophre-
name ZPYREXA.
nia, were paid by Lilly for their services, remained in the research
ward for the duration of the study, and were closely monitored by
doctors and medical staff employed by Lilly. Only Lilly employees
administered the drug. The fact that the volunteers were allowed vis-
itors does not change the analysis.
Defendants’ argument that the clinical trials were ”public” be-
cause the patients did not sign a confidentiality agreement is unper-
suasive and legally unsound. First, because the patients were not
informed of the identity of the compound they were taking and were
kept at Lilly facilities at all times, a confidentiality agreement would
have been superfluous. Second, the presence or absence of a confiden-
tiality agreement is not controlling. It is simply one of many factors
to be taken into consideration.
Even if Lilly’s Phase I clinical trials of olanzapine constituted a
public use of the compound more than one year prior to Lilly’s ap-
plication for its patent, it was an experimental use. The evidence
1004 CHAPTER 11. BIOTECHNOLOGY
demonstrates that the art with respect to this type of atypical antipsy-
chotic drug was highly unpredictable. Small structural changes led to
very different properties. Furthermore, the art was plagued with un-
predicted side effects that rendered otherwise promising compounds
useless in the clinical se ing. These side effects could only be under-
stood when the compounds were tested in actual patients. Olanza-
pine was conceived as a compound that would have antipsychotic
activity but not produce flumezapine’s toxic effects in schizophrenic
patients. Accordingly, testing olanzapine in actual schizophrenic pa-
tients was required to prove it would ”work for its intended purpose,”
i.e., as a safe, atypical antipsychotic drug used to treat human patients
suffering from or susceptible to psychotic disorders. These Phase I
clinical trials in healthy human volunteers were required by regula-
tory agencies before the compound could be tested in schizophrenic
patients. For these reasons, the clinical tests constitute an experimen-
tal use and negate a finding that they were a ”public use” as defined
in patent law.
3 Infringement: Similarity
When are two substances the ”same” for purposes of patent infringe-
ment? In the biotechnology context, the answer is not always straight-
forward.
Boehringer Ingelheim Vetmedica, Inc. v. Schering-Plough Corp.
320 F.3d 1339 (Fed. Cir. 2003)
Porcine Reproductive Respiratory Syndrome (also known as “Mys-
tery Swine Disease” or Swine Infertility and Respiratory Syndrome),
swept through commercial pig herds in the 1980s. A previously un-
known disease, PRRS had its most pronounced effect on young and
newborn piglets. Up to thirty percent of the piglets in li ers from
infected sows were stillborn, and up to eighty percent of piglets in
infected herds died before weaning. The financial consequences to
the commercial pig industry were severe.
Researchers seeking a cause for PRRS could not identify any
known pathogen behind the epidemic (hence the name “Mystery
Swine Disease”). Scientists at Boehringer were the first to solve the
mystery, discovering that a previously unknown virus was responsi-
ble for the disease.
Boehringer began with a homogenate of lung, brain, spleen, liver,
and kidney tissues from an infected piglet. Samples of this combined
homogenate were then added to a panel of 15 different cultured mam-
malian cell lines. While viruses themselves are too small to see with-
out the aid of an electron microscope, a viral infection often gives rise
to morphological changes in the host cell. An observable change in a
host cell due to viral infection is known as a cytopathic effect, or CPE.
A. PATENT 1005
These changes may include cell rounding, disorientation, swelling or
shrinking, death, or detachment from the culture surface, and are vis-
ible with ordinary microscopes as perturbations of the cultured cell
monolayer. Boehringer’s scientists found evidence of a virus present
in PRRS-infected animals when they observed a CPE in cultured MA–
104 embryonic monkey kidney cells, one of the 15 cell lines inoculated
with PRRS homogenate.
Continued propagation of a virus requires that the virus be pas-
saged, which entails removing [a portion] of the culture and adding
it to a fresh culture of cells. Boehringer scientists passaged the PRRS
virus eight times on MA–104 cells, and deposited a sample of the
virus from the eighth passage with the American Type Culture Col-
lection (ATCC), which assigned it deposit number VR–2332.
The ′778 patent claims this process for growing and isolating the
PRRS virus: inoculating cultured monkey cells with the PRRS virus,
and incubating the inoculated cells until a CPE is observed. Claim 2
is the only claim at issue in this case, and depends from claim 1:
1. A method of growing and isolating swine infertility and respi-
ratory syndrome virus, ATCC–VR2332, which comprises inoc-
ulating the virus on a full or partial sheet of simian cells in the
presence of serum in a suitable grown medium and incubating
the inoculated cell sheet at about 34 C. to 37 C. until CPE is ob-
served.
2. The method as recited in claim 1 wherein the simian cell line is
MA–104.
Schering, like Boehringer, developed a vaccine against PRRS by at-
tenuating the PRRS virus in cell culture. A enuation is a process
wherein a virus is repeatedly passaged on a cultured cell line, some-
times under altered culture conditions (such as lowered temperature).
Variant viruses that are be er adapted to grow on the cultured cell
line will grow faster than the original virus; after many serial pas-
sages, such a variant will completely replace the original in the cul-
ture. Frequently, however, those variants adapted to grow in a par-
ticular environment (such as cultured monkey kidney cells) are ill-
suited to grow or cause disease in the original environment (a live
pig). If the a enuated virus will not productively infect pigs, but re-
tains enough structural similarity to the original virus such that an
immune response mounted against the a enuated virus will protect
the pig against the original virus, then the a enuated virus may be
used as a vaccine to protect against PRRS. Both Boehringer and Scher-
ing developed a enuated viruses effective as vaccines against PRRS.
Boehringer filed suit against Schering, alleging that Schering’s
vaccine virus, which is also grown on MA–104 monkey kidney cells,
was prepared by a process that infringed the method claimed by the
1006 CHAPTER 11. BIOTECHNOLOGY
′778 patent.
Boehringer argues that the term “ATCC–VR2332” should be un-
derstood as a “prototype” or “generic” term for all PRRS viruses,
rather than as a reference to the deposited strain. Boehringer chose
to claim its virus using the term “ATCC–VR2332,” a term on its face
referring to a particular ATCC deposit. Boehringer did not use the
broader term “PRRS virus,” nor did Boehringer a empt to claim the
virus in terms of the more general functional and structural proper-
ties disclosed by the specification. Boehringer did not choose to de-
fine the term “ATCC–VR2332” in the specification, nor did Boehringer
state that ATCC–VR2332 was a “generic” or “prototype” virus, nor
did Boehringer assert that viruses related to but not identical to the
isolated strain were within the scope of the invention. These choices
must be held against it. We therefore conclude that the district court
properly construed “ATCC–VR2332” to refer to the strain of virus de-
posited with the ATCC.
Schering argues that no reasonable jury could find that Schering’s
VR2525 virus is equivalent to the ATCC–VR2332 viral strain recited
by the claim in suit. Under the “function-way-result” analysis, Scher-
ing focuses on the fact that ATCC–VR2332 is a pathogenic virus, caus-
ing PRRS, while Schering’s VR2525 is not. Schering argues that this
distinction precludes a finding of equivalence, because Schering’s
virus generates a protective immune response when administered
to pigs, while a pig inoculated with ATCC–VR2332 develops PRRS.
Thus, when administered to pigs, VR2525 resembles ATCC–VR2332
in neither function, way, nor result. Schering’s argument, however,
flies in the face of the basic principle that the relevant analysis is of
the role played by each element in the context of the specific patent
claim, not whether the accused element is capable of performing dif-
ferent roles than the claim element in other contexts. What happens
when the virus is administered to a pig is irrelevant to the assessment
of whether the two viral strains are equivalent in the in vitro culture
method defined by claim 2. The jury was presented with expert testi-
mony from which it could conclude that VR2525 plays the same role
as VR2332 in performance of the claimed method. The fact that, in
other contexts, VR2525 can perform other functions in different ways
to yield a different result is not relevant.
Schering further argues that a finding of no substantial differences
is precluded by the evidence that there are at least 73 nucleotide dif-
ferences between VR2525 and ATCC–VR2332 in a particular region
of their RNA genomes. Schering’s expert (as well as Boehringer’s)
noted that even a single nucleotide substitution can have a substan-
tial effect on viral function. Schering proposes that in the face of this
evidence, no reasonable jury could have concluded that two viruses
having at least 73 nucleotide divergences lack substantial differences.
A. PATENT 1007
However, the uncontroversial fact that even a single nucleotide or
amino acid substitution may drastically alter the function of a gene
or protein is not evidence of anything at all. The mere possibility that
a single mutation could affect biological function cannot as a ma er
of law preclude an assertion of equivalence, and Schering made no
showing that any of these substitutions actually affected any property
of the virus relevant to the claim at hand. While it may be reasonable
to assume that genetic similarity is a relevant comparison between the
viruses for purposes of the claimed method, the jury was presented
with expert testimony that the two viral genomes are highly similar
overall and that any differences between the two are insignificant. A
reasonable jury could easily rely on this testimony to conclude that
the genetic differences between VR2525 and ATCC–VR2332 are in-
substantial in the context of the claimed method.
4 Defenses
Bowman v. Monsanto Co. 133 S. Ct. 1761 (2013)
Under the doctrine of patent exhaustion, the authorized sale of a
patented article gives the purchaser, or any subsequent owner, a right
to use or resell that article. Such a sale, however, does not allow the
purchaser to make new copies of the patented invention. The ques-
tion in this case is whether a farmer who buys patented seeds may
reproduce them through planting and harvesting without the patent
holder’s permission. We hold that he may not.
I
Respondent Monsanto invented a genetic modification that enables
soybean plants to survive exposure to glyphosate, the active ingredi-
ent in many herbicides (including Monsanto’s own Roundup). Mon-
santo markets soybean seed containing this altered genetic mate-
rial as Roundup Ready seed. Farmers planting that seed can use
a glyphosate-based herbicide to kill weeds without damaging their
crops. Two patents issued to Monsanto cover various aspects of its
Roundup Ready technology, including a seed incorporating the ge-
netic alteration.
Monsanto sells, and allows other companies to sell, Roundup
Ready soybean seeds to growers who assent to a special licensing
agreement. That agreement permits a grower to plant the purchased
seeds in one (and only one) season. He can then consume the re-
sulting crop or sell it as a commodity, usually to a grain elevator or
agricultural processor. But under the agreement, the farmer may not
save any of the harvested soybeans for replanting, nor may he sup-
ply them to anyone else for that purpose. These restrictions reflect the
ease of producing new generations of Roundup Ready seed. Because
1008 CHAPTER 11. BIOTECHNOLOGY
glyphosate resistance comes from the seed’s genetic material, that
trait is passed on from the planted seed to the harvested soybeans:
Indeed, a single Roundup Ready seed can grow a plant containing
dozens of genetically identical beans, each of which, if replanted, can
grow another such plant – and so on and so on. The agreement’s
terms prevent the farmer from co-opting that process to produce his
own Roundup Ready seeds, forcing him instead to buy from Mon-
santo each season.
Petitioner Vernon Bowman is a farmer in Indiana who, it is fair
to say, appreciates Roundup Ready soybean seed. He purchased
Roundup Ready each year, from a company affiliated with Monsanto,
for his first crop of the season. In accord with the agreement just de-
scribed, he used all of that seed for planting, and sold his entire crop
to a grain elevator (which typically would resell it to an agricultural
processor for human or animal consumption).
Bowman, however, devised a less orthodox approach for his sec-
ond crop of each season. Because he thought such late-season plant-
ing “risky,” he did not want to pay the premium price that Monsanto
charges for Roundup Ready seed. He therefore went to a grain ele-
vator; purchased “commodity soybeans” intended for human or an-
imal consumption; and planted them in his fields. Those soybeans
came from prior harvests of other local farmers. And because most of
those farmers also used Roundup Ready seed, Bowman could antici-
pate that many of the purchased soybeans would contain Monsanto’s
patented technology. When he applied a glyphosate-based herbicide
to his fields, he confirmed that this was so; a significant proportion of
the new plants survived the treatment, and produced in their turn a
new crop of soybeans with the Roundup Ready trait. Bowman saved
seed from that crop to use in his late-season planting the next year –
and then the next, and the next, until he had harvested eight crops
in that way. Each year, that is, he planted saved seed from the year
before (sometimes adding more soybeans bought from the grain ele-
vator), sprayed his fields with glyphosate to kill weeds (and any non-
resistant plants), and produced a new crop of glyphosate-resistant –
i.e., Roundup Ready – soybeans.
After discovering this practice, Monsanto sued Bowman for in-
fringing its patents on Roundup Ready seed. Bowman raised patent
exhaustion as a defense, arguing that Monsanto could not control
his use of the soybeans because they were the subject of a prior au-
thorized sale (from local farmers to the grain elevator). The District
Court rejected that argument, and awarded damages to Monsanto of
$84,456.
II
A. PATENT 1009
The doctrine of patent exhaustion limits a patentee’s right to control
what others can do with an article embodying or containing an in-
vention. Under the doctrine, the initial authorized sale of a patented
item terminates all patent rights to that item. And by exhaust[ing]
the [patentee’s] monopoly” in that item, the sale confers on the pur-
chaser, or any subsequent owner, the right to use [or] sell” the thing
as he sees fit. Univis. We have explained the basis for the doctrine as
follows: “[T]he purpose of the patent law is fulfilled with respect to
any particular article when the patentee has received his reward ... by
the sale of the article”; once that “purpose is realized the patent law
affords no basis for restraining the use and enjoyment of the thing
sold.” Id.
Consistent with that rationale, the doctrine restricts a patentee’s
rights only as to the “particular article” sold; it leaves untouched the
patentee’s ability to prevent a buyer from making new copies of the
patented item. The purchaser of the patented machine does not ac-
quire any right to construct another machine either for his own use
or to be vended to another. Rather, a second creation of the patented
item calls the monopoly, conferred by the patent grant, into play for
a second time. That is because the patent holder has “received his
reward” only for the actual article sold, and not for subsequent recre-
ations of it. If the purchaser of that article could make and sell end-
less copies, the patent would effectively protect the invention for just
a single sale. Bowman himself disputes none of this analysis as a gen-
eral ma er: He forthrightly acknowledges the “well se led” princi-
ple “that the exhaustion doctrine does not extend to the right to ‘make’
a new product.”
Unfortunately for Bowman, that principle decides this case
against him. Under the patent exhaustion doctrine, Bowman could
resell the patented soybeans he purchased from the grain elevator;
so too he could consume the beans himself or feed them to his ani-
mals. Monsanto, although the patent holder, would have no business
interfering in those uses of Roundup Ready beans. But the exhaus-
tion doctrine does not enable Bowman to make additional patented
soybeans without Monsanto’s permission (either express or implied).
And that is precisely what Bowman did. He took the soybeans he pur-
chased home; planted them in his fields at the time he thought best;
applied glyphosate to kill weeds (as well as any soy plants lacking
the Roundup Ready trait); and finally harvested more (many more)
beans than he started with. That is how “to ‘make’ a new product,”
to use Bowman’s words, when the original product is a seed. Be-
cause Bowman thus reproduced Monsanto’s patented invention, the
exhaustion doctrine does not protect him.
Were the ma er otherwise, Monsanto’s patent would provide
scant benefit. After inventing the Roundup Ready trait, Monsanto
1010 CHAPTER 11. BIOTECHNOLOGY
would, to be sure, receive its reward for the first seeds it sells. But in
short order, other seed companies could reproduce the product and
market it to growers, thus depriving Monsanto of its monopoly. And
farmers themselves need only buy the seed once, whether from Mon-
santo, a competitor, or (as here) a grain elevator. The grower could
multiply his initial purchase, and then multiply that new creation, ad
infinitum – each time profiting from the patented seed without com-
pensating its inventor. Bowman’s late-season plantings offer a prime
illustration. After buying beans for a single harvest, Bowman saved
enough seed each year to reduce or eliminate the need for additional
purchases. Monsanto still held its patent, but received no gain from
Bowman’s annual production and sale of Roundup Ready soybeans.
The exhaustion doctrine is limited to the “particular item” sold to
avoid just such a mismatch between invention and reward.
Bowman principally argues that exhaustion should apply here be-
cause seeds are meant to be planted. The exhaustion doctrine, he re-
minds us, typically prevents a patentee from controlling the use of
a patented product following an authorized sale. And in planting
Roundup Ready seeds, Bowman continues, he is merely using them
in the normal way farmers do. Bowman thus concludes that allowing
Monsanto to interfere with that use would “creat[e] an impermissible
exception to the exhaustion doctrine” for patented seeds and other
“self-replicating technologies.
But it is really Bowman who is asking for an unprecedented excep-
tion – to what he concedes is the “well se led” rule that “the exhaus-
tion doctrine does not extend to the right to ‘make’ a new product.”
Reproducing a patented article no doubt “uses” it after a fashion. But
as already explained, we have always drawn the boundaries of the ex-
haustion doctrine to exclude that activity, so that the patentee retains
an undiminished right to prohibit others from making the thing his
Cotton-Tie: 106 U.S. 89 (1882) patent protects. See, e.g., Co on–Tie Co. v. Simmons (holding that a
purchaser could not “use” the buckle from a patented co on-bale tie
to “make” a new tie). That is because, once again, if simple copying
were a protected use, a patent would plummet in value after the first
sale of the first item containing the invention. The undiluted patent
monopoly, it might be said, would extend not for 20 years (as the
Patent Act promises), but for only one transaction. And that would
result in less incentive for innovation than Congress wanted. Hence
our repeated insistence that exhaustion applies only to the particular
item sold, and not to reproductions.
Nor do we think that rule will prevent farmers from making ap-
propriate use of the Roundup Ready seed they buy. Bowman himself
stands in a peculiarly poor position to assert such a claim. As noted
earlier, the commodity soybeans he purchased were intended not for
planting, but for consumption. Indeed, Bowman conceded in deposi-
A. PATENT 1011
tion testimony that he knew of no other farmer who employed beans
bought from a grain elevator to grow a new crop. So a non-replicating
use of the commodity beans at issue here was not just available, but
standard fare. And in the more ordinary case, when a farmer pur-
chases Roundup Ready seed qua seed – that is, seed intended to grow
a crop – he will be able to plant it. Monsanto, to be sure, conditions
the farmer’s ability to reproduce Roundup Ready; but it does not –
could not realistically – preclude all planting. No sane farmer, after
all, would buy the product without some ability to grow soybeans
from it. And so Monsanto, predictably enough, sells Roundup Ready
seed to farmers with a license to use it to make a crop. Applying our
usual rule in this context therefore will allow farmers to benefit from
Roundup Ready, even as it rewards Monsanto for its innovation.
Still, Bowman has another seeds-are-special argument: that soy-
beans naturally “self-replicate or ‘sprout’ unless stored in a controlled
manner,” and thus “it was the planted soybean, not Bowman” him-
self, that made replicas of Monsanto’s patented invention. Brief for
Petitioner 42; see Tr. of Oral Arg. 14 (“[F]armers, when they plant
seeds, they don’t exercise any control ... over their crop” or “over
the creative process”). But we think that blame-the-bean defense
tough to credit. Bowman was not a passive observer of his soy-
beans’ multiplication; or put another way, the seeds he purchased
(miraculous though they might be in other respects) did not sponta-
neously create eight successive soybean crops. As we have explained,
Bowman devised and executed a novel way to harvest crops from
Roundup Ready seeds without paying the usual premium. He pur-
chased beans from a grain elevator anticipating that many would be
Roundup Ready; applied a glyphosate-based herbicide in a way that
culled any plants without the patented trait; and saved beans from
the rest for the next season. He then planted those Roundup Ready
beans at a chosen time; tended and treated them, including by exploit-
ing their patented glyphosate-resistance; and harvested many more
seeds, which he either marketed or saved to begin the next cycle. In
all this, the bean surely figured. But it was Bowman, and not the
bean, who controlled the reproduction (unto the eighth generation)
of Monsanto’s patented invention.
Our holding today is limited – addressing the situation before us,
rather than every one involving a self-replicating product. We rec-
ognize that such inventions are becoming ever more prevalent, com-
plex, and diverse. In another case, the article’s self-replication might
occur outside the purchaser’s control. Or it might be a necessary but
incidental step in using the item for another purpose. Cf. 17 U.S.C.
§ 117(a)(1) (“[I]t is not [a copyright] infringement for the owner of a
copy of a computer program to make ... another copy or adaptation
of that computer program provide[d] that such a new copy or adap-
1012 CHAPTER 11. BIOTECHNOLOGY
tation is created as an essential step in the utilization of the computer
program”). We need not address here whether or how the doctrine
of patent exhaustion would apply in such circumstances. In the case
at hand, Bowman planted Monsanto’s patented soybeans solely to
make and market replicas of them, thus depriving the company of
the reward patent law provides for the sale of each article. Patent
exhaustion provides no haven for that conduct.
§ 287(c)(1)
With respect to a medical practitioner’s performance of a medical
Limitation on damages and other activity that constitutes an infringement under section 271(a) or (b),
remedies; marking and notice the provisions of sections 281, 283, 284, and 285 [i.e., all meaningful
Why are doctors special? remdedies] shall not apply against the medical practitioner or against
a related health care entity with respect to such medical activity.
B Plants
1 Plant Patents
Imazio Nursery, Inc. v. Dania Greenhouses
69 F.3d 1560 (Fed. Cir. 1995)
(Rich, J.)
At least as early as 1892, legislation was proposed to grant patent
rights for plantrelated inventions. Plant patent legislation was sup-
ported by such prominent individuals as Thomas Edison who stated
that ”nothing that Congress could do to help farming would be of
greater value and permanence than to give to the plant breeder the
same status as the mechanical and chemical inventors now have
through the law.” It was also supported by Luther Burbank, a leading
plant breeder of the day, whose widow stated that her late husband
”said repeatedly that until Government made some such provision
[for plant patent protection] the incentive to create work with plants
was slight and independent research and breeding would be discour-
aged to the great detriment of horticulture.”
The Townsend-Purnell Plant Patent Act was passed by Congress
on May 13, 1930 and was signed by President Hoover on May 23,
1930. It was the first legislation anywhere in the world to grant patent
rights to plant breeders and was enacted to ”afford agriculture, so far
as practicable, the same opportunity to participate in the benefits of
the patent system as has been given to industry, and thus assist in
placing agriculture on a basis of economic equality with industry.”
Before enactment of the Plant Patent Act, two factors were thought
to prevent plants from being patentable subject ma er. The first was
the belief that plants, even those bred by man, were products of na-
ture and therefore not subject to patent protection. The second factor
was that plants were not considered amenable to the ”wri en descrip-
tion” requirement of the predecessor of 35 U.S.C. § 112, first para-
B. PLANTS 1013
graph. In promulgating the Plant Patent Act, Congress addressed
both concerns. It explained that the work of the plant breeder ”in aid
of nature” was subject to patent protection. Additionally, the wri en
description requirement, applicable to utility patents, was relaxed in
favor of a ”description ... as complete as is reasonably possible.”
As originally enacted, the provisions for plant patent protection
were made as amendments to the general patent law. With the pro-
mulgation of the 1952 Patent Act, the plant patent provisions were
included as a separate chapter of the statute. It should be noted that
although the plant patent provisions were separated from the util-
ity patent provisions with the enactment of the 1952 Patent Act, the
statute explicitly states that ”the provisions of this title relating to
patents for inventions shall apply to patents for plants, except as oth-
erwise provided.”
The only amendment to the plant patent provisions since enact-
ment of the 1952 Patent Act came in 1954 when section 161 was
amended to preclude patent protection for plants found in an uncul-
tivated state, thereby broadening the statute to include plants found
in a cultivated state and subsequently asexually reproduced.
Mark D. Janis & Jay P. Kesan
39 Houston L. Rev. 727 (2002)
U.S. Plant Variety Protection: Sound and Fury ... ?
Congress never adopted explicit legislation implementing fully the
patent approach to the problem of incentives for plant breeding. In-
stead, in the Townsend-Purnell Plant Patent Act of 1930, Congress
created a plant patent regime limited to varieties that had been asex-
ually reproduced.
The House Report accompanying the plant patent legislation ac-
knowledged that the asexual reproduction requirement “greatly nar-
rows the scope of the bill.” The bill proposed “to give the necessary
incentive to preserve new varieties” by encouraging breeders to mul-
tiply asexually the new and valuable varieties that they discovered,
but the bill did not “give any patent protection to the right of propa-
gation of the new variety by seed, irrespective of the degree to which
the seedlings come true to type.”
For U.S. law purposes, then, the plant patent legislation created
a distinction between plants propagated asexually and plants repro-
duced via seed. It might be tempting to view the distinction as in-
evitable, flowing as a ma er of necessity from the intrinsic qualities
of plants. By extension, the appearance of sui generis plant variety
regimes would likewise seem to rest on a straightforward, biological
rationale.
In fact, the introduction of the asexual/sexual distinction in U.S.
plant intellectual property law was as much a ma er of political ex-
pediency as it was a ma er of biology, as a careful analysis of the his-
1014 CHAPTER 11. BIOTECHNOLOGY
tory of the plant patent legislation reveals.38 Major nursery operators
– whose varieties were easily propagated asexually – comprised the
chief lobbying influence advocating patent protection for plant inno-
vation, and put recognition of plant breeding as “invention” on equal
footing with invention in other industrial sectors. By contrast, seed
companies saw themselves predominantly as brokers rather than as
developers of new varieties. In addition, the nursery operators dealt
in ornamentals and fruits, while the seed companies dealt in staples
of the food supply. One may assume that patent protection extend-
ing to the la er may have been politically unpalatable at the outset of
the Great Depression.
Patent Act
35 U.S.C. § 161
Whoever invents or discovers and asexually reproduces any distinct
Patents for plants and new variety of plant, including cultivated sports, mutants, hy-
brids, and newly found seedlings, other than a tuber propagated
plant or a plant found in an uncultivated state, may obtain a patent
therefor, subject to the conditions and requirements of this title.
The provisions of this title relating to patents for inventions shall
apply to patents for plants, except as otherwise provided.
35 U.S.C. § 162
No plant patent shall be declared invalid for noncompliance with sec-
Description, claim tion 112 if the description is as complete as is reasonably possible.
In the case of a plant patent, the grant shall include the right to ex-
35 U.S.C. § 163 clude others from asexually reproducing the plant, and from using,
Grant offering for sale, or selling the plant so reproduced, or any of its parts,
throughout the United States, or from importing the plant so repro-
duced, or any parts thereof, into the United States.
Code of Federal Regulations
37 C.F.R. § 1.164
The claim shall be in formal terms to the new and distinct variety of
Claim the specified plant as described and illustrated, and may also recite
the principal distinguishing characteristics. More than one claim is
not permi ed.
37 C.F.R. § 1.165
(a) Plant patent drawings should be artistically and competently
Plant drawings executed and must comply with the requirements of § 1.84.
View numbers and reference characters need not be employed
38
Professor Cary Fowler has provided an insightful study of the subject. See gen-
erally Cary Fowler, The Plant Patent Act of 1930: A Sociological History of its Creation,
82 J. Pat. & Trademark Off. Soc’y 621 (2000).
B. PLANTS 1015
unless required by the examiner. The drawing must disclose
all the distinctive characteristics of the plant capable of visual
representation.
(b) The drawings may be in color. The drawing must be in color if
color is a distinguishing characteristic of the new variety. Two
copies of color drawings or photographs must be submi ed.
The applicant may be required to furnish specimens of the plant, or its 37 C.F.R. § 1.166
flower or fruit, in a quantity and at a time in its stage of growth as may Specimens
be designated, for study and inspection. Such specimens, properly
packed, must be forwarded in conformity with instructions furnished
to the applicant. When it is not possible to forward such specimens,
plants must be made available for official inspection where grown.
USOOPP15399P3
(12) United States Plant Patent (10) Patent No.: US PP15,399 P3
Zaiger et al. (45) Date of Patent: Dec. 7, 2004
(54) CHERRY TREE NAMED ‘ROYAL KAY” (58) Field of Search ........................................... Plt./181
(50) Latin Name: Prunus avium Primary Examiner—Anne Marie Grunberg
Varietal Denomination: Royal Kay (57) ABSTRACT
(76) Inventors: Gary Neil Zaiger, 1907 Elm Ave., e A new and distinct variety of cherry tree (Prunus avium).
Modesto, CA (US).95358. Leith Marie The following features of the tree and its fruit are charac
Gardner, 1207 Grimes Ave., Modesto, terized with the tree budded on ‘Mahaleb’ Rootstock (non
CA (US) 95358, Grant Gene Zaiger, patented), grown on Handford sandy loam soil with Storie
4005 California Ave., Modesto, CA Index rating 95, in USDA Hardiness Zone 9, near Modesto,
(US) 95358 Calif., with standard commercial fruit growing practices
:: - - - - - - such as pruning, thinning, spraying, irrigation and fertiliza
(*) Notice. Subject to any disclaimer, the term of this tion. Its novelty consist of the following combination of
patent is extended or adjusted under 35 desirable features:
U.S.C. 154(b) by 93 days. 1. Vigorous, upright tree growth.
(21) Appl.
-
No.: 10/302,701 2.3. Emil maturing n the early season.
Fruit with attractive red skin color.
(22) Filed: Nov. 25, 2002 4. Heavy and regular production of large size fruit.
(65) Prior Publication Data 5. Fruit with very good flavor and eating quality.
US 2004/0103463 P1 May 27, 2004 6. Fruit with good handling and storage quality.
(51) Int. Cl." .................................................. A01B 5/00
(52) U.S. Cl. ....................................................... Plt./181 1 Drawing Sheet
1 2
BACKGROUND OF THE VARIETY it’s heavy fruit production, early maturity, and good fruit
1. Field of the Invention
quality.
In the field of plant genetics, we conduct an extensive and ASEXUAL REPRODUCTION OF THE VARIETY
continuing plant-breeding program including the organiza 5
tion and asexual reproduction of orchard trees, and of which Asexual reproduction of the new and distinct variety of
plums, peaches, nectarines, apricots, cherries and interspe cherry tree was by budding to ‘Mahaleb’ Rootstock (non
cifics are exemplary. It was against this background of our patented), as performed by us in our experimental orchard
activities that the present variety of cherry tree was origi located near Modesto, Calif., and shows that reproductions
nated and asexually reproduced by us in our experimental 10 run true to the original tree and all characteristics of the tree
orchard located near Modesto, Stanislaus County, Calif. and its fruit are established and transmitted through suc
2. Prior Varieties ceeding asexual propagations.
Among the existing varieties of cherry trees, which are SUMMARY OF THE NEW VARIETY
known to us, and mentioned herein, are ‘Stella’ Cherry
(non-patented) and ‘Early Burlat Cherry (non-patented). 15 The present new variety of cherry tree is of large size,
vigorous, upright growth and a regular bearer of large fruit
STATEMENT REGARDING FEDERALLY with medium firmness, very good flavor and eating quality.
SPONSORED RESEARCH AND The fruit is further characterized by its attractive red skin
DEVELOPMENT color and early fruit maturity. In comparison to the standard
20 commercial cherry variety ‘Early Burlat’ (non-patented), the
Not applicable. new variety blooms approximately 7 days earlier and the
fruit is approximately 3 days earlier in maturity. In com
ORIGIN OF THE VARIETY parison to “Stella’ Cherry (non-patented), the new variety
The present new variety of cherry tree (Prunus avium) blooms approximately 7 days earlier and the fruit matures
was developed by us in our experimental orchard located 25 approximately 25 days earlier. In comparison to its parent
near Modesto, Calif. The new cherry tree was selected in plant, the instant plant ripens earlier.
1992 from a group of open pollinated seedlings grown from PHOTOGRAPH OF THE VARIETY
seed of a selected seedling with the field identification
number 13HA431. The seedling cherry tree (13HA431) 30
The accompanying color photographic illustration shows
originated as a third generation seedling from open polli typical specimens of the foliage and fruit of the present new
nated seed of ‘Stella’ Cherry (non-patented) and was cherry variety. The illustration shows the upper and lower
selected to be used as a parent in our cherry breeding surface of the leaves, an exterior and sectional view of a fruit
program. We grew a large number of these open pollinated divided in its suture plane to show flesh color, pit cavity and
seedlings on their own root under careful observation and 35
the stone remaining in place. The photographic illustration
selected the present variety for asexual reproduction due to was taken shortly after being picked (shipping ripe) and the
US PP15,399 P3
5 6
Form.—Globose. Slightly flattened at apex and base. Ridges.—A small, narrow ridge on each side of suture,
Suture.—Shallow, relatively smooth. extending from base to apex.
Ventral surface.—Smooth, nearly rounded. Tendency to split.—None.
Apex-Varies from slightly retuse to rounded. Color—Varies from 10YR 7/6 to 10YR 7/8 when dry.
Base.—Retuse. Kernal:
Cavity.—Rounded. Average depth 1.8 mm. Average Form.—Ovoid.
diameter 2.2 mm. Taste.—Bitter.
Stem: Viability—Viable. Good embryo development.
Size.—Medium. Average length 34.9 mm. Average Size.—Average length 7.9 mm. Average width 5.1 mm.
width 1.6 mm. Average depth 4.4 mm.
Color—Varies from 2.5GY 4/4 to 2.5GY 5/4. Skin color—Varies from 10YR 5/6 to 10YR 6/8 when
Flesh: dry.
Ripens.—Evenly. Use: Dessert. Market — local and long distance.
Texture.—Smooth, relatively meaty. Keeping quality: Good. Held well for 21 days in cold storage
Fibers.-Few, small and tender. at 38° to 42° F and maintained good appearance and
Firmness.-Medium firm, comparable to ‘Early Burlat' eating quality.
Cherry (non-patented). Shipping quality: Good. Minimal bruising or scarring in
Aroma.-Slight. packing and shipping trials.
Amydgalin.—Undetected. Plant disease resistance/susceptibility: No specific testing
Eating quality.—Good. for relative plant/fruit disease has been designed. Under
Flavor—Very good, good balance between acid and close observation during planting, growing and harvesting
Sugar. of fruit, under normal cultural and growing conditions
Juice.—Moderate amount, enhances flavor. near Modesto, Calif., no particular plant/fruit disease
Brix—Average of 13.5°, varies slightly with amount of resistance or susceptibility has been observed. Any vari
fruit per tree and climatic conditions. ety or selection observed during indexing of plant char
Color—Varies from 2.5R 4/8 to 5R 3/8. Varies with acteristics with abnormal susceptibility is destroyed and
fruit maturity. Pit cavity color 5R 2/6. eliminated from our breeding program.
Skin:
Thickness.-Medium. The present new variety of cherry tree, its flowers, foliage
Surface.—Smooth. and fruit herein described may vary in slight detail due to
Bloom.—Wanting. climate, soil conditions and cultural practices under which
Tendency to crack.-None during dry weather, only the variety may be grown. The present description is that of
slight tendency to crack in wet weather, varies with the variety grown under the ecological conditions prevailing
stage of fruit maturity. near Modesto, Calif.
Color—Varies from 2.5R 2/4 to 5R 3/10. It is claimed:
Tenacity.—Tenacious to flesh.
Astringency.—None. 1. A new and distinct variety of cherry tree, substantially
Stone: as illustrated and described, characterized by its large size,
Type.—Clingstone. vigorous, upright growth and being a regular and productive
Size.—Medium. Average length 11.3 mm. Average bearer of large size fruit with very good flavor and eating
width 8.9 mm. Average thickness 7.2 mm. quality; the fruit is further characterized by its attractive red
Form.—Ovoid. skin color and by maturing in the early season with good
Base.—Slightly rounded. handling and shipping qualities, and in comparison to ‘Early
Apex-Round to slight apical point. Burlat Cherry (non-patented), the new variety blooms
Surface.—Smooth, except for ridges near suture. approximately 7 days earlier and the fruit is approximately
Sides.—Equal to unequal. Some stones have one side 3 days earlier in maturity.
extending further from suture plane.
1020 CHAPTER 11. BIOTECHNOLOGY
a Subject Matter
In re Arzberger
112 F.2d 834 (CCPA 1940)
This is an appeal from a decision rejecting the single claim of ap-
pellant’s application for a plant patent. The alleged invention is de-
scribed by the examiner in his statement to the Board of Appeals as
follows:
This application relates to a species of bacteria. This
species of bacteria is named by applicant Clostridium
saccharo-butyl-acetonicum-liquefaciens and cultured by him
from Louisiana cane field soil. These bacteria are useful
for producing butyl alcohol, acetone, and ethyl alcohol
when grown in a suitable nutrient carbohydrate medium.
Reproduction of these bacteria is asexual, by binary fis-
sion.
We are of the opinion that, while bacteria possess some of the char-
acteristics of plants and some of the characteristics of animals, it is
generally recognized by scientists that the characteristics of plants
predominate in bacteria, and bacteria are usually scientifically classi-
Times and taxonomies change. To- fied as plants.
day, plants are classified as eukary- In Webster’s New International Dictionary the first definition of
otes (whose cells have organelles with
”plant” reads as follows: ”1. A young tree, shrub, or herb, planted or
membranes), along with animals, fungi,
many amoebas and algae, and much ready to plant; a slip, cu ing, or sapling; * * *.” The third definition
more. Bacteria are prokaryotes (which is a lengthy description of plants from a scientific standpoint, and in
lack such organelles) and make up their this definition bacteria are mentioned.
own domain of life. Asking whether We think it may fairly be said that in the common language of
bacteria are plants or animals is like ask-
the people, the meaning of the word ”plant” is as stated in the first
ing whether Africans are from Mexico
or Ecuador. definition, above quoted. At any rate, whether Congress intended to
include in the term ”plant” all organic ma er which may be scientifi-
cally classified as plants is open to such doubt as to warrant resort to
the legislative history of the provision here involved. It is sufficient
to say that it fairly appears therefrom that the word ”plant” as used
therein was used in its popular sense and not in its scientific sense,
and that the bill was designed for the benefit of agriculturalists and
horticulturalists.
It will be observed that the reports of the Commi ees state that
the bill provides that any person who invents or discovers a new and
distinct variety of plant shall be given by patent an exclusive right
to propagate that plant by asexual reproduction, and propagation
by asexual reproduction is defined in the reports to be ”by grafting,
budding, cu ings, layering, division, and the like, but not by seeds.”
While it is true that the bacteria here involved are asexually repro-
duced, it is not here claimed that appellant propagates them by any
B. PLANTS 1021
of the methods above set out, and we do not understand that appel-
lant claims that the bacteria here involved are capable of being repro-
duced by any of such methods. This, we think, is a strong indication
of the character of plants intended to be embraced in the enactment
of the legislation under consideration.
That the scientific meaning of a word is not always controlling in
the interpretation of statutes was established in the case of Nix v. Hed- Nix: 149 U.S. 304 (1893)
den, where, in the interpretation of a tariff statute, the Supreme Court
held that a tomato is a vegetable, although it is scientifically classified
as a fruit. The court in its opinion stated: ”Botanically speaking, toma-
toes are the fruit of a vine, just as are cucumbers, squashes, beans, and
peas. But in the common language of the people, whether sellers or
consumers of provisions, all these are vegetables which are grown in
kitchen gardens, and which, whether eaten cooked or raw, are, like
potatoes, carrots, parsnips, turnips, beets, cauliflower, cabbage, cel-
ery, and le uce, usually served at dinner in, with, or after the soup,
fish, or meats which constitute the principal part of the repast, and
not, like fruits generally, as dessert.”
So here, we think that Congress, in the use of the word ”plant,”
was speaking ”in the common language of the people,” and did not
use the word in its strict, scientific sense. The Patent Office tribunals
were correct in holding that the subject ma er of the claim before us
is not within the plant provision.
b Procedures
In re Greer 484 F.2d 488 (CCPA 1973)
Appellant’s invention relates to a variety of Bermuda grass found
growing in a bed of, and allegedly distinct from, a variety of Bermuda
grass known as Zimmerly Select. The particular characteristics relied
upon by appellant to distinguish his grass from known varieties of
Bermuda grass are set forth in the claim which reads as follows:
1. A new and distinct variety of BERMUDA GRASS
PLANT, substantially as shown and described, character-
ized particularly by its outstanding reproductive proper-
ties, its large, glossy rhizomes, its high level of resistance
to common Bermuda grass diseases and the large percent-
age of above ground stolons which remain green in freez-
ing weather.
With regard to the ”outstanding reproductive” characteristics of the
claimed grass, the specification, in substance, indicates that when the
stolons 2 of the grass are planted they cover the soil surface as quickly
2
Webster’s Third New International Dictionary, 1971 edition, provides the fol-
1022 CHAPTER 11. BIOTECHNOLOGY
as do the rhizomes when planted (in fact faster).
In support of the claim that the plant produces ”large, glossy rhi-
zomes” the specification states that ”some are almost as large in diam-
eter as a lead pencil.” Additionally it states that they ”penetrated the
soil from one inch to two and one-half inches deeper than Coastal
Bermuda [grass] rhizomes grown under identical conditions.” The
specification also indicates that by visual observation of rhizomes, it
could be seen that the rhizomes of the claimed grass were larger than
those of other Bermuda grasses grown the same way. However, no
actual measurements are reported.
To support the claim that the new grass is distinct from others
because of the large percentage of stolons remaining green in freez-
ing weather, the specification indicates that a test plot of the claimed
grass remained green under the same winter conditions where Zim-
merly Select, Coastal Bermuda, and native Bermuda had become dor-
mant.
The claim that the grass is disease resistant is based on the failure
of the applicant and other growers of his grass to observe disease in
plots of the grass. However, the specification also reveals that other
varieties of Bermuda grass grown at the same locations also remained
free of disease.
In conformance with the usual procedure for the examination of
applications for plant patents, the application was submi ed by the
Patent Office to the Department of Agriculture for its evaluation of
the assertions made in the specification supporting the claim that the
grass was a distinct and new variety of plant. In due course a report
was provided by the Department of Agriculture to the Patent Office.
1. The claimed grass is reported as superior to five other
varieties of bermudagrass in its ability to withstand freez-
ing weather. No comparative data were included in the
application to show the relative winter survival of the
claimed grass vs. other varieties. In addition to the lack of
survival data, it [is] not clear from the application that all
varieties were planted and managed in the same fashion.
2. The claimed grass is reported to have a high level of
resistance to common bermudagrass diseases.It is stated,
however, that no disease was noted on bermudagrass va-
rieties grown at the same locations as the claimed grass.
lowing definitions: stolon - a horizontal branch from the base of a plant that is either
above or below ground and produces new plants from buds at its tip or nodes (as
in the strawberry); rhizome - a more or less elongate stem or branch of a plant that
is often thickened or tuber shaped as a result of deposits of reserve food material, is
usu. horizontal and underground, produces shoots above and roots below, and is
distinguished from a true root in possessing buds, nodes and usu. scalelike leaves
- called also rootstalk.
B. PLANTS 1023
This information does not support the claim for disease
resistance as the named varieties differ greatly in their re-
action to disease (from highly susceptible to highly resis-
tant). ...
In support of its conclusion that the rejection under § 112 should be
affirmed the board cited the following excerpt from the legislative
history of the Plant Patent Act of 1930:
Modern methods of identification, together with such am-
plification thereof as may reasonably be expected, will ren-
der it possible and practicable to describe clearly and pre-
cisely the characteristics of a particular variety. When this
can not be done by an applicant for a patent, the variety
is not clearly distinguishable as a distinct variety, and no
patent would issue.
From it the board reasoned as follows:
Accordingly, we believe it to be clear that the instant fail-
ure to adequately differentiate the claimed grass from
other known varieties of Bermuda grass must result in the
denial of a patent. We will sustain the rejection.
Appellant has a acked the soundness of the board’s decision princi-
pally on the ground that § 162 relieves the applicant for a plant patent
of the strict requirements of § 112.
In view of the statute, we must agree with appellant that a dis-
closure containing a description not fully in compliance with § 112
might still be adequate under § 162. In this regard this court, recog-
nizing present technological limitations, has concluded that there is
no requirement for a how-to-make disclosure in a plant patent appli-
cation. See LeGrice.
Nevertheless, we do not agree that it was contemplated by
Congress that § 162 would operate to allow an applicant to allege
characteristics which might be capable of distinguishing one variety
of plant from another without sufficient disclosure to establish that
these characteristics are indeed present in the claimed plant and ab-
sent in the varieties to which it is most closely related.
In the instant case we do not doubt that Bermuda grass having
different reproductive properties, disease resistance, etc., when com-
pared to the same properties of known varieties, would be a distinct
variety of Bermuda grass. However, if, as is true in this case, the
characteristics chosen to define the new plant are meaningless unless
compared with predecessor plant varieties, it is incumbent upon the
applicant to provide information of such a character that a meaning-
ful comparison can be made. It is our view that the Patent Office in
1024 CHAPTER 11. BIOTECHNOLOGY
this case was justified in its conclusion that the criteria used to sup-
port the claim did not allow for such a meaningful comparison.
c Ownership
Ex parte Moore
115 U.S.P.Q. 145 (BPAI 1957)
This is an appeal from the final rejection of the following claim:
The new and distinct variety of peach tree as shown and
described, characterized by its hardiness and resistance to
cold and the late time of ripening of the fruit.
Mr. Francis Miller built a house in 1918 and the following year he
noticed a small peach tree growing in his yard which he believed
sprang from a peach seed planted by one of the men who worked
on the house the preceding year. He protected the tree from injury
and watered and fertilized it along with the grass and other vegeta-
tion in the yard. The tree lived some twelve years or more and before
annual crops of large, luscious peaches. During all of this time Miller
had no idea that the peach tree in his yard was a new variety. In so
far as he was concerned, it was just a peach tree.
In 1928, when the tree was about ten years old and after it had
borne seven annual crops, Mr. William Moore, the applicant in the
application here on appeal, who was a friend of Miller and an or-
chardist and developer of new varieties of orchard trees by profes-
sion, saw the peach tree in Miller’s yard and recognized that it was a
new variety. He requested permission to take grafts for the purpose
of asexually reproducing the tree on his own farm and with Miller’s
consent he took ten scions and grafted them on native root stock and
had produced several successive generations from the original tree
at the time the instant application was filed, thus demonstrating that
the peach tree was in fact a new variety.
The issue in this appeal turns about the meaning to be given the
word ”discovers” in 35 U.S.C. § 161. It is the examiner’s view that
Miller is the one who discovered the new seedling peach tree rather
than appellant because, according to two affdavits by Miller of record,
Miller ”noticed” or ”took notice” of the existence of the new seedling
growing in his yard and cultivated it long before appellant Moore
observed it and recognized it as a new variety. That the seedling was
growing in Miller’s yard and that Miller was aware of its existence is
corroborated by an affidavit by appellant, also of record in the case.
The examiner’s position, as we understand it, is that it was the intent
of Congress that the word ”discovers” in 35 U.S.C. 161 be read as
meaning ”finds”, and Miller is the one who found the peach tree, not
appellant.
B. PLANTS 1025
Appellant’s view, on the other hand, is that although Miller may
have found the seedling in the sense that he became aware of its pres-
ence in his yard, he did not ”find” the new variety because he had no
appreciation that the tree was different from other peach trees in the
vicinity and, lacking such appreciation, he did not asexually repro-
duce it and thus establish that the tree was in fact a new variety. In
contrast to this he argues that appellant was the one who realized that
the tree might perhaps be a new variety and took steps to determine
that fact by asexual reproduction through five generations. Since ap-
pellant was the first to discover the fact that the tree in Miller’s yard
was a new variety and then took steps by asexual reproduction to es-
tablish the fact that it was a new variety, it is appellant’s view that he
is the one who really was the discoverer of the new variety under the
meaning of the statute.
After careful consideration of the examiner’s position as devel-
oped at length in his answer, as well as that of appellant, we are of
the opinion that appellant Moore is the one who discovered the new
variety according to the intent of the statute.
If the word ”discovers,” as used in the statute, is to be construed as
meaning ”finds,” and ”finds” is construed as merely becoming aware
of the existence of a plant without any appreciation that it is a new
variety and no a empt is made to perpetuate the variety by asexual
reproduction, it seems to us that the constitutional objective of ad-
vancing the progress of science and useful arts will to a large degree
be nullified in so far as found seedlings are concerned. To illustrate;
had the ma er been left entirely in Miller’s hands he would have
done nothing to preserve the variety because, although he knew it
was a peach tree, so far as he was aware, it had no unusual character-
istics and was just an ordinary peach tree. When it had lived out its
life span of twelve years and died, the new variety would have been
lost for all time. Miller found a peach tree but he did not discover a
new variety.
Dunn v. Ragin v. Carlile
50 U.S.P.Q. 472 (BPI 1941)
This is an interference involving an application filed March 1, 1940,
by Arthur A. Dunn, an application filed October 14, 1939, by Robert
Lee Ragin and an application filed May 8, 1937, by Charles W. Carlile.
Dunn and Carlile are represented by the same a orney and the Dunn
application is assigned to Carlile.
The invention relates to a new variety of seedless orange and or-
ange tree of the so-called pineapple type. The new variety of orange
tree defined in the issue count originated as a mutation or bud varia-
tion, commonly called a bud sport, on a pineapple orange tree grow-
ing in a cultivated orange grove located in Brevard County, Florida.
All the parties to this interference rely upon the propagation of trees
1026 CHAPTER 11. BIOTECHNOLOGY
from the same bud variation as establishing their respective rights to
a patent. While this fact might appear to present a question of origi-
nality it is believed that the real issue is purely one of priority among
the applicants.
It has long been held that an invention comprises two main inven-
tive acts, conception, and reduction to practice. The question of what
constitutes a conception and reduction to practice has been dealt with
and decided in an abundance of cases and this question is so well
defined in these cases as to require no further comment or citation.
In each of these previously decided cases the inventions involved re-
lated to a new and useful art, machine, manufacture, or composition
of ma er. None have related to a new variety of plant. By analogy,
however, it may be said that there must be a conception and reduc-
tion to practice in cases involving the invention or discovery of a new
plant as well as in the previously referred to cases.
The question of what constitutes a reduction to practice is not be-
lieved to present any real problem. A reduction to practice may ordi-
narily be an actual reduction to practice, that is an actual successful
building of a machine or performance of the art or process and so on,
or it may be a constructive reduction to practice by the filing of a valid
allowable application for a patent describing and claiming the inven-
tion. The principle of a constructive reduction to practice is a pure
fiction of law and came into being as a result of judicial interpreta-
tion on the theory that a valid application for a patent completes the
invention and makes it available to the public enabling any one of this
group skilled in the art to which it relates to reproduce or perform the
invention disclosed.
It should be noted that the statute provides as a prerequisite to the
filing of an application for a plant patent that the alleged new variety
of plant be asexually reproduced. It seems evident therefore that the
filing of an application could not complete the invention but that an
actual reduction to practice prior to the filing date of the application
is an essential requirement. The mere filing of an application for a
patent for a new variety of plant would not enable anyone to repro-
duce such a plant. The plant must actually be in being and reproduc-
tions thereof must be obtainable by one of the usual forms of asexual
propagation as for example grafting, budding, inarching, division or
the like. It would appear therefore that the filing of an application for
a plant patent by itself can not properly be considered a constructive
reduction to practice because of the statutory prerequisite.
It is believed that an actual reduction to practice is completed
when the new variety is actually reproduced by any satisfactory
method of asexual propagation and it is determined that the progeny
in fact possess the characteristic or characteristics which distinguish
it as a new variety. In the case under consideration an actual reduc-
B. PLANTS 1027
tion to practice would be established when by asexual propagation
citrus trees were produced which bore fruits having all the a ributes
of the variety known as a pineapple orange with the exception of its
habit of containing seeds.
A new variety may popularly be said to be conceived or discov-
ered when an individual becomes aware of its existence. An inventor
can not properly be said to have discovered a new variety of plant
until he is certain that it is in fact a new variety. In cases like the in-
stant case, where the new variety is produced by bud variation it is
believed the conception or discovery occurs when the asexual repro-
duction establishes the bud variation to be in fact a true bud variation
or new variety, since the only real test of a true bud variety is its abil-
ity to be perpetuated through bud propagation.
The facts as related in the Dunn record are that in 1930 or at least
sometime prior to 1933 R. V. Williams, an employee on the grove ad-
joining that owned by Dunn, discovered a seedless orange growing
on a tree in the Dunn grove. He communicated knowledge of his dis-
covery to Dunn and Dunn went to the location designated and found
that one limb of the tree bore seedless oranges, while the remainder
of the tree bore fruit heavily seeded in accordance with the standard
characteristics of the variety. Dunn testified that he observed the tree
from year to year until 1937 in order to determine if the habit was
fixed. In January of that year the senior party Carlile was at the Dunn
grove picking fruit, his company having purchased the crop. Dunn
informed Carlile of the seedless tree and allegedly requested him to
reproduce the same. Later the tree and all rights in it were sold to
Carlile who ultimately removed it and transplanted it in his own
nursery. Carlile cut budwood from the tree and budded the same
to root stock in order to produce additional specimens. In Novem-
ber 1938 the trees thus reproduced had fruit sufficiently matured to
determine that they were in fact seedless orange trees of the pineap-
ple type. At least three generations of such trees had been produced
and had borne fruit by the time the testimony was given in this case.
Trees were sold as early as July, 1938 to a Mr. MacDonald in Miami
and all have since produced seedless oranges.
The Ragin story is as follows: In 1934 Ragin obtained permission
from Dunn to cut budwood on the Dunn grove. While cu ing bud-
wood he met the witness Williams who informed him that he had
found a seedless orange. Williams did not designate the exact tree
and Ragin sought it out while cu ing budwood. Ragin took bud-
wood and budded some to root stock but also top-worked several
trees in order to get more rapid growth. Top-working consists of
cu ing out the crown of a mature tree and budding or grafting to
it the new growth desired. In 1935 the trees thus top-worked were
shown to Springer, nursery inspector for the Florida Plant Board. At
1028 CHAPTER 11. BIOTECHNOLOGY
that time Ragin told Springer that the new growth was of seedless
oranges. The following year Springer again inspected the same trees
which were then bearing fruit. He cut fruit and found it to be in fact
seedless. He later inspected other trees and found the fruit thereon to
be seedless. Springer’s testimony stands unchallenged and must be
accepted as true. Since Springer testified that he cut fruit the follow-
ing summer it must be held that Ragin actually reduced to practice no
later than the end of the summer of 1936 that is September 15, 1936.
The party Dunn first learned of the seedless oranges sometime
prior to 1933 according to the testimony in his behalf. Thereafter he
did nothing until he sold the tree to Carlile. Dunn insists that Carlile
was his agent in reducing the invention to practice and that he not
only sold the tree but also sold his rights in the invention. Since there
was no conception until the invention was reduced to practice Dunn
could not have sold anything except the tree for he had nothing else
to sell. Since Dunn did nothing he can not be held to be an inventor.
Even if it were held that the reduction to practice by Carlile did inure
to the benefit of Dunnhis effective date for conception and reduction
to practice would not be earlier than November, 1938. This date is
considerably later than September 15, 1936, the date established for
Ragin.
Dunn contends however that the finding of the parent tree consti-
tuted the conception or discovery contemplated by the statute. If it
be assumed without so holding that this contention is correct, Dunn
could not prevail since it is not believed that he has established any
diligence during the required period. If Dunn’s testimony is to be
accepted at its face value it would appear that he did absolutely noth-
ing beyond merely observing the tree for a period of seven years. .
Dunn’s excuse for failure to act is not believed to be either convinc-
ing or adequate and award must be made in favor of Ragin.
301 F.2d 929 (CCPA 1962)
In re LeGrice
The issue on these consolidated appeals is whether appellant is enti-
tled under 35 U.S.C. § 161 to a patent on each of his applications se-
rial numbers 709,127 and 709,128, filed January 15, 1958, each entitled
‘Rosa Floribunda Plant.’ The Patent Office Board of Appeals affirmed
the final rejection of both applications under 35 U.S.C. § 102(b) on
the ground that the inventions had been described in printed publi-
cations in England more than one year prior to the dates of filing of
the said applications. The publications occur in the National Rose So-
ciety Annual of England and in catalogues. The Annual describes ap-
pellant as having raised the roses described and the catalogues show
color pictures of these roses. There is no dispute that the publications
relate to and picture the identical roses which were originated by ap-
B. PLANTS 1029
pellant and which he now seeks to patent.
We think it is sound law, consistent with the public policy under-
lying our patent law, that before any publication can amount to a
statutory bar to the grant of a patent, its disclosure must be such that
a skilled artisan could take its teachings in combination with his own
knowledge of the particular art and be in possession of the invention.
In view of the long line of cases dealing with other types of in-
ventions antedating 1930, we think Congress, by failing to provide
otherwise, intended that the provisions of section 102(b), as applied
to plant patents, should not be interpreted otherwise than they had
been with respect to other inventions, i.e., that only an ‘enabling’ pub-
lication is effective as a bar to a subsequent patent.
While man can and does assist nature by the cross-pollination of
selected parent plants, the actual creation of the new plant, because
of the almost infinite number of possible combinations between the
genes and chromosomes, is not presently subject to a controlled re-
production by act of man. While those skilled in this art now under-
stand the mechanics of plant reproduction and the general principles
of plant heredity, they are not presently able to control the factors
which govern the combinations of genes and chromosomes required
to produce a new plant having certain predetermined desired prop-
erties.
Appellant in his brief points out:
The description of a plant in a plant patent or in a printed
publication at best can only recite, as historical facts, that
at one time a certain plant existed, was discovered in a
certain manner, and was asexually reproduced. This in-
formation may be interesting history, but cannot enable
others to reproduce the plant. Prior public use and sale of
a plant are the avenues by which a plant enters the public
domain.
In the case of manufactured articles, processes and chemical compo-
sitions, a different situation prevails. Wri en descriptions and draw-
ings in publications can often enable others to manufacture the article,
practice the process or produce the chemical composition.
We therefore hold that the descriptions in the printed publications
here in issue do not meet the requirement of an ‘enabling’ description,
as the statute has been interpreted in numerous cases.
We do not agree with the examiner and the board that this creates
an ”anomaly” when dealing with plant patents which requires that
”plant publications must be totally ignored as printed publications.”
Instead, it requires that the facts of each case be carefully considered
to determine whether the description in the printed publication in
question does in fact place the invention in the possession of the pub-
1030 CHAPTER 11. BIOTECHNOLOGY
lic. Each case must be decided on its own particular facts in deter-
mining whether, in fact, the description in the printed publication is
adequate to put the public in possession of the invention and thus bar
patentability of a plant under the conditions stated in section 102(b).
While the present knowledge of plant genetics may mean as a prac-
tical ma er, that the descriptions in such general publications as are
here involved cannot be relied upon as a statutory bar under section
102(b), we must be mindful of the scientific efforts which are daily
adding to the store of knowledge in the fields of plant heredity and
plant eugenics which one skilled in this art will be presumed to pos-
sess.
Yoder Bros., Inc. v. California-Florida Plant Corp.
537 F.2d 1347 (5th Cir. 1976)
Normally, the three requirements for patentability are novelty, util-
ity, and nonobviousness. For plant patents, the requirement of dis-
tinctness replaces that of utility, and the additional requirement of
asexual reproduction is introduced.
The concept of novelty refers to novelty of conception, rather than
novelty of use; no single prior art structure can exist in which all of
the elements serve substantially the same function. As applied to
plants, the Patent Office Board of Appeals held that a ”new” plant
had to be one that literally had not existed before, rather than one
that had existed in nature but was newly found, such as an exotic
Foster: 90 U.S.P.Q. 16 (BPAI 1951) plant from a remote part of the earth.Ex parte Foster In Greer, the court
indicated that the Board believed that novelty was to be determined
by a detailed comparison with other known varieties.
The legislative history of the Plant Patent Act is of considerable
assistance in defining ”distinctness.” The Senate Report said:
In order for the new variety to be distinct it must have
characteristics clearly distinguishable from those of exist-
ing varieties and it is immaterial whether in the judgment
of the Patent Office the new characteristics are inferior
or superior to those of existing varieties. Experience has
shown the absurdity of many views held as to the value
of new varieties at the time of their creation.
The characteristics that may distinguish a new vari-
ety would include, among others, those of habit; immu-
nity from disease; or soil conditions; color of flower, leaf,
fruit or stems; flavor; productivity, including ever-bearing
qualities in case of fruits; storage qualities; perfume; form;
and ease of asexual reproduction. Within any one of the
above or other classes of characteristics the differences
which would suffice to make the variety a distinct variety,
will necessarily be differences of degree.
B. PLANTS 1031
A definition of ”distinctness” as the aggregate of the plant’s distin-
guishing characteristics seems to us a sensible and workable one.
The third requirement, nonobviousness, is the hardest to apply
to plants, though we are bound to do so to the best of our ability.
Rephrasing the John Deere tests for the plant world, we might ask
about (1) the characteristics of prior plants of the same general type,
both patented and nonpatented, and (2) the differences between the
prior plants and the claims at issue. We see no meaningful way to ap-
ply the third criterion to plants – i. e. the level of ordinary skill in the
prior art. Criteria one and two are reminiscent of the ”distinctness”
requirement already in the Plant Patent Act. Thus, if we are to give ob-
viousness an independent meaning, it must refer to something other
than observable characteristics.
We think that the most promising approach toward the obvious-
ness requirement for plant patents is reference to the underlying con-
stitutional standard that it codifies – namely, invention.
The general thrust of the ”invention” requirement is to ensure that
minor improvements will not be granted the protection of a seven-
teen year monopoly by the state. In the case of plants, to develop
or discover a new variety that retains the desirable qualities of the
parent stock and adds significant improvements, and to preserve the
new specimen by asexually reproducing it constitutes no small feat.
This Court’s case dealing with the patent on the chemical com-
pound commonly known as the drug ”Darvon,” Eli Lilly & Co. v. Eli Lilly v. Generix, Inc.: 460 F.2d 1096
Generix Drug Sales, provides some insight into the problem of how (5th Cir. 1972)
to apply the ”invention” requirement to a new and esoteric subject
ma er. The court first noted that
analogical reasoning is necessarily restricted in many
chemical patent cases because of the necessity for physio-
logical experimentation before any use can be determined.
In fact, such lack of predictability of useful result from
the making of even the slightest variation in the atomic
structure or spatial arrangement of a complex molecule
deprives the instant claims of obviousness and anticipa-
tion of most of their vitality.
The court resolved the apparent dilemma by looking to the therapeu-
tic value of the new drug instead of to its chemical composition:
Reason compels us to agree that novelty, usefulness and
non-obviousness inhere in the true discovery that a chemi-
cal compound exhibits a new needed medicinal capability,
even though it be closely related in structure to a known
or patented drug.
The same kind of shift in focus would lead us to a more produc-
1032 CHAPTER 11. BIOTECHNOLOGY
tive inquiry for plant patents. If the plant is a source of food, the
ultimate question might be its nutritive content or its prolificacy. A
medicinal plant might be judged by its increased or changed ther-
apeutic value. Similarly, an ornamental plant would be judged by
its increased beauty and desirability in relation to the other plants
of its type, its usefulness in the industry, and how much of an im-
provement it represents over prior ornamental plants, taking all of
its characteristics together.
d Infringement
Imazio Nursery, Inc. v. Dania Greenhouses
69 F.3d 1560 (Fed. Cir. 1995)
I. B
Bruno Imazio, the owner of Imazio Nursery, Inc. (Imazio), is the in-
ventor of the U.S. Plant Patent No. 5,336, which is entitled ”Heather
Named Erica Sunset.” According to the ’336 patent, Mr. Imazio dis-
covered Erica Sunset heather in 1978 ”as a seedling of unknown
pollen parentage growing in a cultivated field of Erica persoluta, the
variety believed to be the seed parent, where it was noticed because of
its early blooming and particularly because of its reaching full bloom,
from base to tip, more than a month before the parent plant begins
to bloom.” It was the early blooming of the Erica Sunset, during the
Christmas and Valentine’s Day seasons, that distinguished the Erica
Sunset from other known varieties.
The sole claim of the ’336 patent recites:
A new variety of Heather persoluta, substantially as
herein shown and described, particularly characterized
by its profuse production of blooms over the entire length
of the stem beginning in early December.
In April 1992, Imazio sued Coastal for patent infringement alleging
that Coastal’s ”Holiday Heather” infringed the ’336 patent.
The trial court adopted the standard that the Plant Patent Act
”bars the asexual reproduction and sale of any plant which is the same
variety (i.e., has the same essential characteristics) as the patented
plant, whether or not the infringing plant was originally cloned from
the patented plant.” The district court also addressed whether inde-
pendent creation could be a defense to plant patent infringement.
The district court stated that ”independent creation is not a proper
defense to patent infringement” and asserted that ”the courts’ recog-
nition of an independent creation defense would inadvertently entice
deliberate infringement, with a fraudulent defense of independent
creation asserted.”
B. PLANTS 1033
On the merits of the infringement charge, the trial court reviewed
the testimony of both parties’ experts and found that the ”undisputed
evidence thus shows that the patented Erica Sunset heather and the
Holiday Heather are the same plants both morphologically (inter-
nal and external characteristics) and phenologically (blooming cy-
cle).” The trial court concluded that Imazio had ”successfully demon-
strated that the Holiday Heather is an asexual reproduction of the
Erica Sunset.”
IV. S C
We first consider the scope of protection of plant patents.
1. The meaning of the term ”variety”
The parties dispute the meaning of the term ”variety” in section 161.
Imazio argues that in providing plant patent protection for ”any dis-
tinct and new variety of plant,” it was intended that a plant patent
cover ”all plants of that new and distinct variety, i.e., all plants hav-
ing the same essential and distinctive characteristics.” Thus, argues
Imazio, ”variety” should be construed in its technical, taxonomical
sense and should be interpreted to encompass more than just clones
of a single plant. Coastal, on the other hand, contends that ”variety”
should be construed in the vernacular sense as ”something different
from others of the same general kind.” Coastal maintains that by use
of the term ”variety” Congress did not intend to afford plant patent
protection to a range of plants but intended only to protect a single
plant.
The Plant Patent Act does not define ”variety.” However, the leg-
islative history of the Plant Patent Act states:
new and distinct varieties fall into three classes – sports,
mutants, and hybrids. In the first class of cases, the sports,
the new and distinct variety results from bud variation
and not seed variation. A plant or portion of a plant
may suddenly assume an appearance or character dis-
tinct from that which normally characterizes the variety or
species. In the second class of cases, the mutants, the new
and distinct variety results from seedling variation by self
pollenization of species. In the third class of cases, the hy-
brids, the new and distinct variety results from seedlings
of cross pollenization of two species, two varieties, or a
species and a variety.
Thus, upon passage of the Plant Patent Act, a patentable variety
could be either a sport, mutant, or hybrid. In addition, by amend-
ment in 1954, Congress added another class of plants, newly found
seedlings, subject to the exception that such seedlings found in an
1034 CHAPTER 11. BIOTECHNOLOGY
uncultivated state cannot be patented.
Section 161 also requires that a patentable variety be new. Ad-
ditionally, the variety must be distinct. As to this requirement, the
legislative history states that
in order for the new variety to be distinct it must have
characteristics clearly distinguishable from those of exist-
ing varieties. The characteristics that may distinguish a
new variety would include, among others, those of habit;
immunity from disease; resistance to cold, drought, heat,
wind, or soil conditions; color of flower, leaf, fruit, or
stems; flavor; productivity, including ever-bearing quali-
ties in case of fruits; storage qualities; perfume; form; and
ease of asexual reproduction. Within any one of the above
or other classes of characteristics the differences which
would suffice to make the variety a distinct variety, will
necessarily be differences of degree.
The legislative history is clear that Congress intended that distinct
and new cultivated sports, mutants, hybrids, and newly found
seedlings be entitled to plant patent protection.
Although the legislative history does not answer the question of
what ”variety” means in terms of whether a single plant or a range
of plants is protected by a plant patent, in addition to being distinct
and new, a patentable plant must also be asexually reproduced. As
discussed below, this additional requirement informs the scope of
protection of plant patents and hence directs the meaning of ”variety”
in § 161.
2. The significance of the asexual reproduction requirement
The legislative history defines asexual reproduction as reproduction
by ”grafting, budding, cu ings, layering, division, and the like, but
not by seeds.” The legislative history further states that
whether the new variety is a sport, mutant, or hybrid, the
patent right granted is a right to propagate the new vari-
ety by asexual reproduction. It does not include the right
to propagate by seeds. This limitation in the right granted
recognizes a practical situation and greatly narrows the
scope of the bill. Whether the new variety is a hybrid,
mutant or sport, there is never more than one specimen
of it produced except through asexual reproduction. For
example, without asexual reproduction there would have
been but one true McIntosh or Greening apple tree. These
varieties of apples could not have been preserved had it
not been through human effort in the asexual reproduc-
B. PLANTS 1035
tion of the two original trees. They could not have been
reproduced true to the type by nature through seedlings.
The legislative history additionally sets forth that plants sought to be
patented
must be asexually reproduced in order to have their iden-
tity preserved. This is necessary since seedlings either of
chance or self-pollenization from any of these would not
preserve the character of the individual.
It is clear from the legislative history that as a result of the asexual re-
production requirement, only a single plant, i.e., reproduction from
one original specimen in the words of Congress, is protected by a
plant patent. At the time of enactment, Congress recognized that the
asexual reproduction prerequisite greatly narrowed the scope of pro-
tection of plant patents but found such a limitation necessary to en-
sure that the characteristics of the plant to be patented were main-
tained. Additionally, it has since been recognized that as intimated
by Congress, asexual reproduction confirms the existence of a new
variety by separating variations resulting from fluctuations in envi-
ronmental conditions from true plant variations.
Due to the asexual reproduction prerequisite, plant patents cover
a single plant and its asexually reproduced progeny. See Senate Re-
port at 6 (Plant patent protection encourages ”those who own the sin-
gle specimen to reproduce it asexually and create an adequate sup-
ply.”). Thus, the term ”variety” in section 161 must be interpreted
consistently with this requirement. Accordingly, ”variety” in section
161 cannot be read as affording plant patent protection to a range of
plants, as asserted by Imazio.
V. I
As to the first step, consistent with our analysis above, the scope of the
claim of the ’336 patent is the asexual progeny of the Heather persoluta
shown and described in the ’336 patent specification. To perform the
second step of the infringement analysis, we first look to the language
of the statute.
Section 163 grants to plant patentees the right to exclude others
from asexually reproducing the plant or selling or using the plant so
reproduced. 35 U.S.C. § 163. As stated above, the trial court held
that asexual reproduction is shown if the patentee can prove that the
alleged infringing plant has the same essential characteristics as the
patented plant. We disagree.
We must construe the term ”asexual reproduction” in section 163
in the same way as we did in section 161. Thus, for purposes of plant
patent infringement, the patentee must prove that the alleged infring-
ing plant is an asexual reproduction, that is, that it is the progeny of
1036 CHAPTER 11. BIOTECHNOLOGY
the patented plant.
Below, the parties disputed whether independent creation is a
proper defense to plant patent infringement. The trial court refused
to recognize such a defense stating that the ”patent holder would
have great difficulties enforcing his patent rights if a defendant were
allowed to raise independent creation as an affirmative defense.” The
trial court reasoned that it would be hard for the patentee to refute
evidence of independent creation because all such evidence would
be in the defendant’s control.
We must reject the trial court’s analysis of the independent cre-
ation defense because it is contrary to the plain meaning of the statute.
The statute requires asexual reproduction of the patented plant for
there to be infringement. It is necessarily a defense to plant patent
infringement that the alleged infringing plant is not an asexual re-
production of the patented plant. Part of this proof could be, thus,
that the defendant independently developed the allegedly infringing
plant. However, the sine qua non is asexual reproduction. That is
what the patentee must prove and what the defendant will seek to
disprove.
The judgment of infringement of the ’336 patent is reversed. The
case is remanded for further proceedings consistent with this opinion.
Armstrong Nurseries, Inc. v. Smith
170 F. Supp. 519 (E.D. Tex. 1958)
In 1955, Defendant Dyess requested Defendant Hood to grow roses
for him and agreed to furnish Defendant Hood or make available for
Defendant Hood’s use the requisite budwood. In accordance with
such agreement Defendant Dyess did subsequently furnish and make
available to Defendant Hood a quantity of budwood for different va-
rieties with which Defendant Hood dormant budded or caused to be
dormant budded approximately 73,000 rose plants in a certain field
in his possession and under his control.
Among said 73,000 rose plants were approximately 1,500 rose
plants, more or less, characterized by a vigorous upright-growing
habit; the production of flat glossy, dark green, medium size foliage
during spring growing with increase in size until a ainment of large
proportions during late summer and fall; high resistance to mildew
and anthracnose; by long moderately heavy stems having a fairly
large number of medium to large thorns in the spring diminishing in
late season until relative freedom of thorns is reached; by the shape of
bud and open bloom combined with wide contrast between outer sur-
face petal color and inner surface petal color and extreme brilliance
of the la er in the opening bud and newly opening flower, substan-
tially as shown and described in Plant Patent No. 792, being of the
variety of rose plant commonly known as ’Forty-Niner’.
B. PLANTS 1037
Defendant Hood was unaware when he first budded the aforesaid
73,000 rose plants that any of them were of the aforesaid patented
varieties. Later when the crop came on and Defendant Hood ques-
tioned Defendant Dyess in respect of the varieties of said patented
rose plants, Defendant Dyess told Defendant Hood that those plants
which were in fact of the variety shown and described in the Plant
Patent No. 792 and commonly known as ’Forty-Niner’ were a new
variety known as ’Fifty-Five.’
Defendant Hood has never possessed and does not now possess
a proper license or sub license (grower) authorizing him to asexually
reproduce, grow, sell, or use the aforesaid patented rose plants.
By reason of his unauthorized dormant budding and cultivation
of the aforesaid patented rose plants, Defendant Hood has infringed
Plant Patent No. 792.
At the time Defendant Dyess furnished Defendant Hood the afore-
said budwood Defendant Dyess did not possess a current valid grow-
ing license or sub license, and by his dealings with Defendant Hood
in respect of said budwood and the rose plants subsequently grown
by Defendant Hood, he actively induced the infringement of said
Plant Patents by Defendant Hood and is an infringer of the rights of
said patentees under said respective plant patents.
2 Plant Variety Protection Act
Senate Report No. 1246, 91st Congress, 2d Session (1970)
Plant Variety Protections Act
Under the patent law, patent protection is limited to those varieties of
plants which reproduce asexually, that is, by such methods as graft-
ing or budding. No protection is available to those varieties of plants
which reproduce sexually, that is, generally by seeds. Thus, patent
protection is not available with respect to new varieties of most of
the economically important agricultural crops, such as co on or soy-
beans.
Subsequently, legislation was introduced to encourage the devel-
opment of novel varieties of sexually reproduced plants by the is-
suance of certificates of plant variety protection by the Department
of Agriculture to establish such protection, was reported by the Com-
mi ee on Agriculture and Forestry, and on August 24 this legislation
was referred to this commi ee for the purpose of reviewing its im-
pact on the plant patent statute. The commi ee recommends the bill,
S. 3070, favorably as amended.
200800282
No.
Seminis Vegetable Seeds, Inc.
Whereas, THERE HAS BEEN PRESENTED TO THE
Secretary of Agriculture
An application requesting a certificate of protection for an alleged distinct variety of sexually
reproduced, or tuber propagated plant, the name and description of which are contained in the
application and exhibits, a copy of which is hereunto annexed and made a part hereof, and the various
requirements of LAW in such cases made and provided have been complied with, and the title thereto
is, from the records of the PLANT VARIETY PROTECTION OFFICE, in the applicant(s) indicated in the said
copy~ and Whereas, upon due examination made, the said applicant(s) is (are) adjudged to be entitled
to a certificate of plant variety protection under the LAW. .
Now, therefore, this certificate of plant variety protection is to grant unto the said applicant(s) and the
ors, heirs or assigns of the said applicant( s) for the term of TWENTY years from the date of this
grant, subject to the payment of the reHuired fees and periodic replenishment of viable basic seed of the
variety in a public repository as provided by LAW, the right to exclude others from selling the variety,
offering it for sale, or reproducing it, or importing it, or exporting it, or conditioning it for
agation, or stocking it for any of the above purposes, or using it in producing a hybrid or different
therefrom, to the extent provided by the PLANT VARIETY PROTECTION ACT. (84 STAT. 1542, AS
'0,7 U.S.C. 2321 ET SEQ.)
CARROT
'RF714911A'
In Testimony Whereof, I have hereunto set my
hand and caused the seal of the Plant Variety
Protection Office to be affixed at the City of
Washington, D. C. this trVenty-second day of
June, in the year two thousand and ten.
Commissioner
Plant Variety Protection Office
Agricultural Marketing Service
~-
REPRODUCE lOCALl Y.lnclude form number and date on all reDroductlons Form AODroved - OMB No. 0581-0055
U.S. DEPARTMENT OF AGRICULTURE The following statements are made in accordance with the Privacy Act of 1974 (5 U.S.C. 552a) and
AGRICULTURAL MARKETING SERVICE the Paperwork Reduction Act (PRA) of 1995.
SCIENCE AND TECHNOLOGY - PLANT VARIETY PROTECTION OFFICE
Application is required in order to determine if B plant variety protection certificate is to be issued
APPLICATION FOR PLANT VARIETY PROTECTION CERTIFICATE (7 U.S.C. 2421). Information is held confidential until certificate is issued (7 U.S.C. 2426).
(Instructions and infonnalion co/lection burden statement on reverse)
1. NAME OF OWNER 2. TEMPORARY DESIGNATION OR 3. VARIETY NAME
RF1jJ.jCjJ14
EXPERIMENTAL NAME
Seminis Vegetable Seeds, Inc. RF 71-4911A
4. ADDRESS (Street and No .• or R.F.D. No., City, State, and ZIP Code, and Country) 5. TELEPHONE (include area code) FOR OFFICIAL USE ONLY
(805) 647-1572 PVPO NUMBER
2700 Camino del Sol
Oxnard, CA 93030-7967 6. FAX (include area code)
#2 0 0 8 0 0 2 8 2
(805) 918-2545 FiliNG DATE
:J une s-;
7. IF THE OWNER NAMED IS NOT A "PERSON". GIVE FORM OF 8. IF INCORPORATED, GIVE 9. DATE OF INCORPORATION
ORGANIZATION (corporation, partnership, association, etc.) STATE OF INCORPORATION
;2002
Corporation California 4 June 1962
F FiliNG AND EXAMINATION FEES:
q 3g;l. 00
10. NAME AND ADDRESS OF OWNER REPRESENTATIVE(S) TO SERVE IN THIS APPLICATION. (First person listed will receive all papers) E
E
$
s
Carol Miller Sara Boeke R DATE b/S'Jog
Seminis Vegetable Seeds, Inc. Seminis Vegetable Seeds, Inc. E
c CERTIFICATION FEE:
37437 State Hwy 16 P.O. Box 97, NL-6700 AB "lh8.oo
E
I $
v
Woodland, CA 95695 Wageningen, Netherlands E
D
DATE 3118/10
11. TELEPHONE (Include area COde) 12. FAX (Include area code) 13. E-MAil
(530) 669-6274 (530) 669-6112 carol.l.miller@seminis.com
14. CROP KIND (Common Name) 16. FAMilY NAME (Botanical) 18. DOES THE VARIETY CONTAIN ANY TRANSGENES? (OPTIONAL)
Carrot Umbelliferae D YES D NO
IF SO. PLEASE GIVE THE ASSIGNED USDA-APHIS REFERENCE NUMBER FOR THE
15. GENUS AND SPECIES NAME OF CROP 17. IS THE VARIETY A FIRST GENERATION HYBRID?
APPROVED PETITION TO DEREGULATE THE GENETICAllY MODIFIED PLANT FOR
Daucus carota DYES 0NO COMMERICALIZA TlON.
19. CHECK APPROPRIATE BOX FOR EACH ATTACHMENT SUBMITTED 20. DOES THE OWNER SPECIFY THAT SEED OF THIS VARIETY BE SOLD AS A CLASS
(Follow instructions on reverse) OF CERTIFIED SEED? (See Section 83(a) of the Plant Variety Protection Act}
a. 0 Exhibit A. Origin and Breedin9 History of the Variety D YES (If "yes". answer «ems 21 and 22 belOW)
21. DOES THE OWNER SPECIFY THAT SEED OF THIS VARIETY
o NO (If "no", go to item 23)
BE LIMITED AS TO
b. [2] Exhibit B. Statement of Distinctness NUMBER OF CLASSES?
c. 0 Exhibit C. ObjecUve Description of Variety D YES 0 NO
d. D Exhibit D. Additional DeseripUon of the Variety (Optional) IF YES. WHICH CLASSES? 0 FOUNDATION o REGISTERED o CERTIFIED
e. o Exhibit E. Statement of the Basis of the Owne~s Ownership
22. DOES THE OWNER SPECIFY THAT SEED OF THIS VARIETY BE LIMITED AS TO
o
NUMBER OF GENERATIONS?
f. Exhibit F. Declaration Regarding Deposit YES NO
D 0
g. [2] Voucher Sample (3,000 viable untreated seeds or, for tuber propagated varieties, verification IF YES, SPECIFY THE NUMBER 1,2,3, etc. FOR EACH CLASS.
that tissue culture will be deposited and maintained in an approved public repository)
g. o Filing and Examination Fee ($4,382). made payable to "Treasurer of the United
States" (Mail to the Plant Variety Protection Office)
D FOUNDATION D REGISTERED DCERTIFIED
(If additional explanation is necessary, please use the space indicated on the reverse.)
23. HAS THE VARIETY (INCLUDING ANY HARVESTED MATERIAL) OR A HYBRID PRODUCED 24. IS THE VARIETY OR ANY COMPONENT OF THE VARIETY PROTECTED BY
FROM THIS VARIETY BEEN SOLD. DISPOSED OF, TRANSFERRED. OR USED IN THE U. S. OR INTEllECTUAL PROPERTY RIGHT (PLANT BREEDER'S RIGHT OR PATENT)?
OTHER COUNTRIES?
D YES 0 NO 0 YES D NO
IF YES. YOU MUST PROVIDE THE DATE OF FIRST SALE. DISPOSITION, TRANSFER. OR USE IF YES, PLEASE GIVE COUNTRY, DATE OF FILING OR ISSUANCE AND ASSIGNED
FOR EACH COUNTRY AND THE CIRCUMSTANCES. (Please use space indicated on reverse.) REFERENCE NUMBER. (Please use space indicated on reverse.)
25. The owners declare that a viable sampfe of basic seed of the variety has been furnished with application and will be replenished upon request in accordance with such regulations as may be applicable, or
for a tuber propagated variety a tissue culture will be deposited in a public repository and maintained for the duration of the certificate.
The undersigned owner(s) is(are) the owner of this sexually reproduced or tuber propagated plant variety, and believe(s) that the variety is new, distinct, uniform, and stable as required in Section 42, and is
entitled to protection under the provisions of Section 42 of the Plant Variety Protection Act.
Owner(s) is (are) informed that false representation herein can jeopardize protection and result in penalties.
SIGNATURE OF OWNER
NAME (Please print or type)
Carol L. Miller
CAPACITY OR TITLE CAPACITY OR TITLE DATE
PVP Specialist
(See reverse fat instructions and information colfection burden statement)
ST -410 (02-06) designed by the Planl Variety Protection Office using Word 2003.
#200800282
GENERAL INSTRUCTIONS: To be effectively filed with the Plant Variety Protection Office (PVPO), ALL of the following items must be received in the PVPO: (1)
Completed application form signed by the owner; (2) completed exhibits A, B, C, E, F; (3) for a tuber reproduced variety, verification that a viable (in the sense
that it will reproduce an entire plant) tissue culture will be deposited and maintained in an approved public repository; and (4) payment by credit card or check
drawn on a U.S. bank for $4,382 ($518 filing fee and $3,864 examination fee), payable to "Treasurer of the United States" (See Section 97.6 of the Regulations
and Rules of Practice). NEW: With the application for a seed reproduced variety or by direct deposit soon after filing, the applicant must provide at least 3,000
viable untreated seeds of the variety per se, and for a hybrid variety at least 3,000 untreated seeds of each line necessary to reproduce the variety. Partial
applications will be held in the PVPO for not more than 90 days; then returned to the applicant as un-filed. Mail application and other requirements to Plant Variety
Protection Office, AMS, USDA, Room 401, NAL Building, 10301 Baltimore Avenue, Beltsville, MD 20705-2351. Retain one copy for your files. All items on the
face of the application are self explanatory unless noted below. Corrections on the application form and exhibits must be initialed and dated. DO NOT use
masking materials to make corrections. If a certificate is allowed, you will be requested to send a payment by credit card or check payable to "Treasurer of the
United States" in the amount of $768 for issuance of the certificate. Certificates will be issued to owner, not licensee or agent.
NOTES: It is the responsibility of the applicanUowner to keep the PVPO informed of any changes of address or change of ownership or assignment or owner's
representative during the life of the application/certificate. The fees for filing a change of address; owner's representative; ownership or assignment; or any
modification of owner's name is specified in Section 97.175 of the regulations. (See Section 101 of the Act, and Sections 97.130, 97.131, 97. 175(h) of/he
Regulations and Rules of Practice.)
Plant Variety Protection Office
Telephone: (301) 504-5518 FAX: (301) 504-5291
General E-mail: PVPOmail@usda.gov
Homepage: http://www.ams.usda.gov/science/pvpo/PVPindex.htm
SPECIFIC INSTRUCTIONS:
To avoid conflict with other variety names in use, the applicant must check the appropriate recognized authority and provide evidence that the permanent name of
the application variety (even if it is a parental, inbred line) has been cleared by the appropriate recognized authority before the Certificate of Protection is issued.
For example, for agricultural and vegetable crops, contact: U.S. Department of Agriculture, Agricultural Marketing Service, Livestock and Seed Programs, Seed
Regulatory and Testing Branch, 801 Summit Crossing Place, Suite C, Gastonia, North Carolina 28054-2193 Telephone: (704) 810-8870.
http://www.ams.usda.gov/lsg/seed.htm.
ITEM
19a. Give: (1) the genealogy, including public and commercial varieties, lines, or clones used, and the breeding method;
(2) the details of subsequent stages of selection and multiplication;
(3) evidence of uniformity and stability; and
(4) the type and frequency of variants during reproduction and multiplication and state how these variants may be identified
19b. Give a summary of the variety's distinctness. Clearly state how this application variety may be distinguished from all other varieties in the same crop. If the
new variety is most similar to one variety or a group of related varieties:
(1) identify these varieties and state all differences objectively;
(2) attach replicated statistical data for characters expressed numerically and demonstrate that these are clear differences; and
(3) submit, if helpful, seed and plant specimens or photographs (prints) of seed and plant comparisons which clearly indicate distinctness.
19c. Exhibit C forms are available from the PVPO Office for most crops; specify crop kind. Fill in Exhibit C (Objective Description of Variety) form as completely as
possible to describe your variety.
19d. Optional additional characteristics and/or photographs. Describe any additional characteristics that cannot be accurately conveyed in Exhibit C. Use
comparative varieties as is necessary to reveal more accurately the characteristics that are difficult to describe, such as plant habit, plant color, disease
resistance, etc.
1ge. Section 52(5) of the Act requires applicants to furnish a statement of the basis of the applicant's ownership. An Exhibit E form is available from the PVPO.
20. If "Yes" is specified (seed of this variety be sold by variety name only, as a class of certified seed), the applicant MAY NOT reverse this affirmative decision
after the variety has been sold and so labeled, the decision published, or the certificate issued. However, if "No" has been specified, the applicant may
change the choice. (See Regulations and Rules of Practice, Section 97.103).
23. See Sections 41, 42, and 43 of the Act and Section 97.5 of the regulations for eligibility requirements.
24. See Section 55 of the Act for instructions on claiming the benefit of an earlier filing date.
22. CONTINUED FROM FRONT (Please provide a statement as to the limitation and sequence of generations that may be certified.)
23. CONTINUED FROM FRONT (Please provide the date of first sale, disposition, transfer, or use for each country and the circumstances, if the variety
(including any harvested material) or a hybrid produced from this variety has been sold, disposed of, transferred, or used in the U.S. or other countries.)
24. CONTINUED FROM FRONT (Please give the country, date of filing or issuance, and assigned reference number, if the variety or any component of the
variety is protected by intellectual property right (Plant Breeder's Right or Patent).)
U.S. Patent Application No. 11/874,629 Entitled "Carrots Having Increased Lycopene Content" by Robert V. Maxwell filed 18-0ct-07.
According to the Paperwork Reduction Act of 1995. an agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a valid OMS control number. The
vaUd OMS control number for this information collection;s 0581-0055. The time required to complete this information collection is estimated to average 1.4 hours per response, including the time for reviewing
instroctions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status,
parental status, religion, sexual on.~ntation, genetic information, political beliefs, reprisal, or because all or part of an indNidual's income is derived from any public assistance program (Not all prohibited bases apply to
all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice
and TOO).
To file a complaint of discrimination. wnte to USDA. Director. Office of Civil Rights. 1400 Independence Avenue. S. W., Washington. D.C. 20250-9410. or calf (800) 795-3272 (voice) or (202) 720-6382 (TOO). USDA is
an equal opportunity provider and employer.
ST ~70 (02-06) designed by the Plant Variety Protection Office using Word 2003.
EXHIBIT A i\F1/t./?/I"
Origin and Breeding History of Red Carrot Male Sterile,
RF 71-4911 A was developed via work based at the Seminis Breeding Station in Payette, Idaho.
Reproductive cycles were carried out at Payette, while the vegetative cycles were performed at the
Elmore Forms, Inc. property near Brawley, California. Roots are grown at the Southern California
location and transported to Idaho for seed production.
Line RF 71-4911 A exhibits a number of improved traits including uniform red color throughout an
internal root cross-section and high petaloid male-sterility stability. A pedigree breeding system was used
for line development and improvement. The development of the line can be summarized as follows.
Sept. 2000 Planted seeds of 'Nutri-red' and 'USDA line 4367S' (an orange male sterile line released
by the USDA) in the Imperial Valley, California.
Feb. 2001 Harvested roots of 'Nutri-red' and 'USDA line 4367S' for FI hybrids. Planted individual
roots selected from 'Nutri-red' and made crosses with 'USDA line 4367S', establishing
new sub-line populations of 'Nutri-red' with their respective hybrids.
Sept. 2001 Planted hybrid seed and new sub-lines in California.
Feb. 2002 Harvested hybrids of 'Nutri-red' sub-lines and 'USDA line 4367S' (all orange roots) in
preparation of first backcross to the respective sub-lines.
Sept. 2002 Planted BCI seed in California with the respective sub-lines.
Feb. 2003 Selected red roots within the BC I population and prepared for backcrossing, again, to the
'Nutri-red' sub-lines.
Sept. 2003 Planted BC2 seed in California with the respective sub-lines.
Feb. 2004 Most backcrosses appeared to be nearly stable, though some orange roots caused concern
about the possible genetic inheritance. Red roots were again selected and prepared for
backcrossing to 'Nutri-red' sub-lines.
Sept. 2004 Planted BC3 seed in California with the respective sub-lines.
Feb. 2005 Harvested roots and found that 100% of all backcross populations had complete
expression of Iycopene. Selected best lines for hybrid production and possible increase,
one set of lines being RF 71-4911A & B.
Sept. 2005/6 Planted new hybrids and backcross lines for potential advancement and seed increase.
Feb. 2006/7 Evaluated and selected best hybrid combinations.
In summary, individual roots of 'Nutri-red' were found which lacked the fertility restorer gene. Repeated
backcrossing of an orange carrot with male-sterile cytoplasm to one of these 'Nutri-red' roots resulted in
the development of RF 71-4911 A in a stable, red pigmented phenotype.
From observations made during two generations of multiplication and seed increases (during 2005 and
2006), RF 71-4911 A was found to be uniform and stable within commercially acceptable limits. As is
true with other carrot varieties, a small percentage of off-types can occur within commercially acceptable
limits for almost any characteristic during the course of repeated multiplications. No variants are know or
expected to occur.
Exhibit A for Carrot, RF 71-491 IA - Page I of I
~._,
#200800282
EXHIBIT B f(F1(L{11/4
Statement of Distinctness for Red Carrot, ~
RF 71-4911A is the result of work to develop a male sterile line derived from a population of 'Nutri-red', a red
carrot release developed by Seminis Vegetable Seeds, Inc. Individual roots of 'Nutri-red' were selected and
crossed with a known male sterile line of orange color. The progeny were evaluated for flower type to identify any
'Nutri-red' root selections that lacked the nuclear fertility restorer gene. One root in particular, identified as RF 71-
4911 B, was found to be lacking this gene. Continued backcrossing of the male sterile progeny to the male sterile
maintainer resulted in the development of RF 71-4911 A.
The RF 71-4911 A population is a more slender and refined carrot type, somewhat similar to the original 'Nutri-red'
population. Roots are medium to narrow in diameter with a gradual taper to the root tip. They have a very smooth
skin texture.
To our knowledge, the most similar variety to RF 71-4911 A is 'Nutri-red'. The comparative characteristics which
best distinguish the two varieties include, but may not be limited to:
• Root Base: the roots ofRF 71-4911A have a semi-blunt base, whereas the roots of 'Nutri-red' have a pointed
base.
• Root Exterior Color: the exterior root color of RF 71-4911A is light red with an RHS color chart value of
184C, whereas 'Nutri-red' is dark red with an RHS color chart value of 590.
• Flower Type: the flowers of RF 71-4911 A are 100% male sterile, whereas the flowers of 'Nutri-red' are 100%
male fertile.
• Flower Color: the flowers of RF 71-4911A are green with an RHS color chart value of I94C, whereas the
flowers of 'Nutri-red' are white with an RHS color chart value of N 1550.
The following photographs of RF 71-4911 A and 'Nutri-red' depict the visual differences described above:
RF 71-4911A: Nutri-red:
;;
.;;
"
~ :z
J
Exhibit B for RF 71-4911A - Page I of I
--
RtoPRODUCE LOCALLY. Include form number and date on all reproductions. Form Approved OMS NO 0581-0055
According to the Paperwork Reduction Act of 1995. an agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a valid OMB control number. The
~ valid OMB control number for this information collection is 0581-0055. The time required to complete this information collection is estimated to average 2.0 hours per response, including the time for reviewing
.
instructions, searching existing data sources, gathering
The U. S. Department of Agriculture (USOA) prohibits discrimination
and maintaining the data needed, and completing and reviewing the collection of information .
in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status,
parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or part of an individual's income is derived from any public assistance program (Not all prohibited bases apply
to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600
(voice and TOO).
To file a complaint of discrimination. write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S. W .. Washington, D. C. 20250-9410, or call (800) 795-3272 (voice) or (202) 720-6382 (TOO). USDA is
an equal opportunity provider and employer.
U.S. DEPARTMENT OF AGRICULTURE Exhibit C
AGRICULTURAL MARKETING SERVICE
SCIENCE AND TECHNOLOGY
PLANT VARIETY PROTECTION OFFICE
BELTSVILLE, MD 20705
OBJECTIVE DESCRIPTION OF VARIETY
Carrot Daucus carota
NAME OF APPLICANT (S) TEMPORARY OR EXPERIMENTAL DESIGNATION VARIETY NAME
S<W)iniS V~ e.-fo.ble.-Seffls InC ..
ADDRESS (Str~et and No. or RD No., City, SlflU, Zip CoJ~ lind CountT)~ FOR OFFICIAL USE ONLY
:J.100 Urn; no del Sot
PVPONUl\IBER
Ox-nard ~ ~A 03D30
PLEASE READ ALL INSTRUCTIONS CAREFULLY:
In the spaces on the left, enter the appropriate numbers that describe the characteristics of the application variety. On the right, enter the appropriate numbers
that describe the characteristics of the most similar comparison variety. Right justify whole numbers by adding leading zeros if necessary. The variety that you
choose for comparison should be the most similar one in terms of overall morphology, background and maturity. The comparison variety should be grown in field
trials with the application variety for 2-3 location/years (environments) in the region and season of best adaptability. At least one year of trials should be
conducted within the United States of America. In general, measurements of quantitative traits should be taken from one trial on 15-25 randomly selected
lants or (ant arts to obtain avera es and statistics that describe a tical field of the variet . Form technical content last u dated Feb. 2003.
A Iication Variet Com arison Varie
1. TYPE: Comparison Variety Name Nutrl - red
1a. 61 == Amsterdam =
2 Flakee 3 = Berlicum 4 = Chantenay 5 = Danvers J2 Type _
Imperator 7 = Nantes 8 = Other (Specify) _
2. REGION OF ADAPTATION IN THE U.S.A.:
L 1 = Northeast 2 = Northwest 3 = Southeast 4 = Southwest '1- Region of Adaptability
5 = North Central 6 = South Central 7 = Most Regions
3. MARKET MATURITY:
1eL Q. No Days from Seeding to Harvest 1..;;1.0 Days to Market Maturity
4. PLANT TOP: (At Harvest Stage)
L Habit: 1 = Erect 2 = Semi-erect 3 = Prostrate Habit
D. i.l em Plant Top Height (from Shoulder to Top of Crown) n5 Qcm Plant Top Height
I21.l mm Plant Top Neck Diameter Q 3 0 mm Plant Top Neck Diameter
_1_ Top Attachment: 1 = Single 2 = Multiple -L Top Attachment
5. LEAF: (At Harvest Stage)
2 Name of Color Chart: 1= Munsell Book of Color
3 = Other (Specify)
2 = RHS Colour Chart
_
2- Name of Color Chart
3 Blade Color: 1= Light Green 2 = Medium Green 3 = Dark Green
4 = Other (Specify) _
~ Blade Color:
Color Chart Value /3;2, f2 Color Chart Value .A1/3L/ A
ST -470-78 (02-06) designed by the Plant Variety Protection Office using Microsoft Word 2000.
#200800282
Exhlblt C (Carrot)
--------------A,;Ao:;;Dllfuiica:;;t;ti~o~n\.V;;;aririe;;;i~tyi;;"""------------...,.---------;:C::o::m=Daa':;ri=so::n~V ••.a=n:;:.e:-;:-:-ty--------
5. LEAF: (continued)
~ Blade Divisions: 1= Fine 2 = Medium 3 = Coarse 2 Blade Divisions
0251 cm Blade Length (Without Petiole) .ill 0 cm Blade Length
o-.11em Petiole Length from Crown to First Pinna J2 ~ 0 em Petiole Length
_,_ Petiole Anthocyanin: 1 = Absent 2 = Present _'_ Petiole Anthocyanin
_'_ Petiole Pubescence: 1 = Absent 2 = Present _'_ Petiole Pubescence
6. ROOT: (At Market Maturity)
-1 i' mm Cortex (Phloem) Thickness (Midpoint X-Section) L c) mm Cortex (Phloem) Thickness
.13- mm Core (Xylem) Thickness (Midpoint X-Section) .Lo mm Core (Xylem) Thickness
..z. 1/ em Carrol Length (Minus Taproot) ~ tJ em Carrot Length
0'< D mm Length of Taproot LJ...2. 0 mm Length of Taproot
() 3 te mm Diameter at Shoulder ~ J 2. mm Diameter at Shoulder
()3 L mm Diameter at Midpoint 02 Z. mm Diameter at Midpoint
_1_ Amount Exposed (Above Ground): 1 = None 2 = 1-10% 3 = 11-20%
4 = 21-30% 5 = 31-40% 6 = > 40% _'_ Amount Exposed
2. Shape: 1 = Round
= Conic 3 = Cylindrical
2 ~ Shape
Collar: 1 = Sunken 2 = Level 3 = Square 2. Collar
,
~
2 Shoulder: 1 = Rounded 2 = Sloping 3 = Square 2- Shoulder
2 Base: 1 = Pointed 2= Medium = Blunt3 Base
..£ Surface Smoothness: 1 = Very Smooth 2 = Dimpled or Corrugated ~ Surface Smoothness
2- Number of Secondary Root Scars: 1 = None 2 = Few 3 = Many ..£ Number of Secondary Root Scars
_'_ Appearance of Secondary Root Scars: 1 = Not Prominent 2 = Prominent 'Z Appearance of Secondary Root Scars
2 Halo: 1 = None 2 = Faint 3 = Prominent 2 Halo
~ Zoning: 1 = None 2 = Faint 3 = Prominent ~ Zoning
I Flavor Harshness: 1 = Very Harsh 2 = Moderately Harsh 3 = Mildly Harsh _'_ Flavor Harshness
L Flavor Sweetness: 1 = Not Sweet 2 = Moderately Sweet 3 = Very Sweet _'_ Flavor Sweetness
Notes:
Halo: Cross-section showing color difference between xylem and phloem.
Zoning: Longitudinal cut showing color difference between xylem and phloem.
Application Variety Comparison Variety
SSiTT
-4::r770oi:7.7Biiii(Oi2.2.06:o61)
d,d.;;.i;;lg:;;;nod;;jib:;yiiilh;;8PPJaj;n;;;t~v;;'arl~.;t;ty;"ip;;;ro;;t8;;:c;Uuon;;;;C0ffl~c;;;87.uds';;;nll;;Miii,cr;:;;;:os;;;oftftlAW;.::ord;;<';2Nooiiio.------------------------------
"~h
#200800282
exhibit C (Carrot)
Application Variety Comparison Variety
COLORS:
Color choices: 1 = White 2 = Yellow 3 = Orange 4 = Red 5 = Purple 6 = Green 7 = Salmon 8 = Light 9 = Dark 10 = Other (describe)
Color Examples: Q~ = Yellow; ~i = Orange-Red; gi = Dark Red
L Name of Color Chart: 1 = Munsell Book of Color 2 = RHS Colour Chart 3 = Other (Specify) _
:J.J Shoulder (Color chart value
9" C''IC q c.f 9!1 D
Above Ground Exterior Color: Shoulder (Color chart value
Above Ground Exterior Color: Skin (Color chart value log" c !1'I Skin (Color chart value 5"'"'7 D
Below Ground Exterior Color: 'i tj Shoulder (Color chart value 1<jl1 c. 9c.f Shoulder (Color chart value ~c:;D
Below Ground Exterior Color: 8" L/ Skin (Color chart value /1(4 c. q t{ Skin (Color chart value SVD
X-Section Interior Color: C?i- Xylem (Core) (Color chart value 1'1'/ ]) 1l!l Xylem (Color chart value CD 18
X-Section Interior Color. :i.'i.. Phloem (Color chart value IflI7J o!i Phloem (Color chart value _~_J_A
__
7. FLOWER:
04. Flower Color (Color chart value I t:t <-/ C ()L Flower Color (Color chart value tJJ~ )
2. Male Fertility: 1 = Fertile 2 = Male-Sterile 3 = Other _ _'_ Male Fertility
2. Anthers: 1=Normal 2=Petalold 3= Other _'_Anthers
7. SEED:
I 2 5"em Height of Seed Stalk &! S" em Height of Seed Stalk
2. Stalk Pubescence: 1 = Absent 2 = Little 3 = Moderate 4 = Heavy ~ Stalk Pubescence
1 .2.0 mm Diameter of First Order Umbel 1.~ 0 mm Diameter of First Order Umbel
~ Seed Spines: 1 = Absent 2 = Present L Seed Spines
,.2 () S;;mg per 100 Seeds :£.1 J? mg per 100 Seeds
8. DISEASE REACTIONS: (1 = Susceptible; 2 = Resistant; give races if known)
...l Alternaria Blight _'_ Alternaria Blight
i Aster Yellows -L Aster Yellows
_ cavity Spot _1_ Cavity Spot
_ Cercospora Blight _ Cercospora Blight
_ Motley Owarf Virus _'_ Motley Dwarf Virus
_ Powdery Mildew
_' Powdery Mildew
_ Pythium Root Dieback _'_ Pythium Root Dieback
I Schlerotinia Decay _'_ Schlerotinia Decay
_ Other (Specify) _ Other (Specify)
9. INSECT REACTIONS: (1 = Susceptible; 2 = Resistant; give races if known)
~ Root Knot Nematode Root Knot Nematode
_ Other (Specify)
_ Other (Specify) ~IA-- __
ST -170.78 (02-<18)designed by the Plant Variety Protectlon Offtce using Microsoft Word 2000.
1
Pago 3 of4
#200800282
exhibit C (carrot)
Application Variety Comparison Variety
10. PHYSIOLOGICAL REACTIONS: (1 = Susceptible and 2 = Resistant)
2 Bolting 2. Bolting
~ Root Splitting -.!: Root Splitting
COMMENTS:
I
I
I
I
I
I
II
ST-470.78 (02.06) designed by lIle Plant Variety ProleclJon OffIce usIng MIcrosoft Word 2000.
REPRODUCE LOCALLY. Inc Iude f orm num ber an d e d"Itlon d ate on a repro d uctlons. FORM APPROVED OMB N o. 0581 0055 - -
U.S. DEPARTMENT OF AGRICULTURE
AGRICULTURAL MARKETING SERVICE Application is required in order to determine if a plant variety protection
certificate is to be issued (7 U.S.C. 2421). The information is held
EXHIBIT E confidential until the certificate is issued (7 U.S.C. 2426).
STATEMENT OF THE BASIS OF OWNERSHIP
1. NAME OF APPLICANT(S) 2. TEMPORARY DESIGNATION 3. VARIETY NAME
OR EXPERIMENTAL NUMBER
Seminis Vegetable Seeds, Inc.
RF 7l-49IIA f<f11t./9/1 A
4. ADDRESS (Street and No .. or R.F.D. No .• City. State, and ZIP. and Country) 5. TELEPHONE (Include area code) 6. FAX (Include area code)
(805) 647-1572 (805) 918-2545
2700 Camino del Sol
Oxnard, California 93030
7. PVPO NUMBER
#20 Oe 0 02 82
8. Does the applicant own all rights to the variety? Mark an "X" in the appropriate block. If no, please explain. D DYES NO
9. Is the applicant (individual or company) a U.S. national or a U.S. based company? If no, give name of country.
EI YES
10. Is the applicant the original owner? If no, please answer Q.!!! of the following:
DlYES
D
a. If the original rights to variety were owned by individual(s), is (are) the original owner(s) a U.S. National(s)?
DYES NO If no, give name of country
b. If the original rights to variety were owned by a company(ies), is (are) the original owner(s) a U.S. based company?
DYES 0 NO If no, give name of country
11. Additional explanation on ownership (Trace ownership from original breeder to current owner. Use the reverse for extra space if needed):
The variety named in this application was developed by the Seminis Vegetable Seeds, Inc., employee (breeder) identified below. By
agreement between the employee and Seminis Vegetable Seeds, Inc., all rights to any invention, discovery, or development made by an
employee are assigned to the Company. No rights to such an invention, discovery, or development are retained by the employee.
Employee (Breeder): Rob Maxwerll
Site Location: Payette, Idaho
PLEASE NOTE:
Plant variety protection can only be afforded to the owners (not licensees) who meet the following criteria:
1. If the rights to the variety are owned by the original breeder, that person must be a U.S. national, national of a UPOV member country, or
national of a country which affords similar protection to nationals of the U.S, for the same genus and species.
2. If the rights to the variety are owned by the company which employed the original breeder(s), the company must be U.S. based, owned by
nationals of a UPOV member country, or owned by nationals of a country which affords similar protection to nationals of the U.S. for the same
genus and species.
3. If the applicant is an owner who is not the original owner, both the original owner and the applicant must meet one of the above criteria.
The original breeder/owner may be the individual or company who directed the final breeding. See Section 41 (a)(2) of the Plant Variety Protection
Act for definitions.
According to the Paperwork Reduction Act of 1995. an agency may not conduct or sponsor. and a person is not required to respond to a collection of information unless it displays a valid OMS
control number. The valid OMS control number (or this information collection is 0581"()055. The time required to complele this information collection is estimated to average 0.1 hour per response,
including the time for reviewing the instructions, searching exisUng data sources, gathering and maintaining the data needed, and compleUng and reviewing the colledron of informaUon.
The U.S. Department of Agriculture (USDA) prohibits discriminatron in all its programs and activities on the basis of race, color, national origin, gender, religion, age, disability, sexua/orientatron,
marital or family status, political beliefs, parental status, or protected genetic information. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for
communication of program information (Braille. large print, audiotape. etc.) should contact USDA' s TARGET Center at 202-720-2600 (voice and TOO).
To file a complaint of discrimination. write USDA, Director, OffICe of Civil Rights. Room 326-W, Whitten Building, 14th and Independence Avenue. SW. Washington. D.C. 20250-9410 or call (202)
720-5964 (voice and TOO). USDA is an equal oppot1umty provide and employer.
ST-470-E (04-03) designed by the Plant Variety Protection Office using Word 2000
REPROOUCE LOCALLY. Include form number and date on all reproductions. Form Approved OMB NO 0581-0055
According to the Paperwork Reduction Act of 1995. an agency may not conduct or sponsor, and a person;s not required to respond to a collection of information unless it displays a valid OMS control number. The valid
OMB control number for this information collection;s 0581-0055. The time required to complete this information collection is estimated to average 5 minutes per response. including the tfme for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis o(face, color, nationa! origin. gender, religion, age, disability, sexual orientation, marital or family status,
political beliefs. parental status. or protected genetic information. (Not all prohibited bases apply to a/1 programs.) Persons with disabilities who require alternative means for communication of program information
(Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at 202.720-2600 (voice and TOD).
To fife a complaint of discrimination, write USDA, Director, Office of Civil Rights, Room 326-W, WhiUen Building, 14th and Independence Avenue, SW, Washington, DC 20250.9410 orca1/202-720-5964 (voice and TOD).
USDA is an equal opportunity provider and employer.
U.S. DEPARTMENT OF AGRICULTURE
AGRICULTURAL MARKETING SERVICE
SCIENCE AND TECHNOLOGY
PLANT VARIETY PROTECTION OFFICE
BELTSVILLE, MD 20705
EXHIBIT F
DECLARATION REGARDING DEPOSIT
NAME OF OWNER (S) ADDRESS (Street and No. or RD No., City, State, and Zfp Code and Country) TEMPORARY OR EXPERIMENTAL DESIGNATION
Seminis Vegetable Seeds, Inc. 2700 Camino del Sol RF 71-4911A
Oxnard, CA 93030 VARIETY NAME
NAME OF OWNER REPRESENTATIVE (S) ADDRESS (Street and No. or RD No., City, Stale, and Zip Code and Country)
Carol L. Miller
37'137 Sta.kH-igltlWa:] liP PVPO NUMBER
WoodlcLnd, CA g5<:095'
#200800282
I do hereby declare that during the life of the certificate a viable sample of propagating material of the subject
variety will be deposited, and replenished as needed periodically, in a public repository in the United States in
accordance with the regulations established by the Plant Variety Protection Office.
~~
Signature Date
ST-470.F (04-03) designed by the Plant Variety Protection Office using Microsoft Word 2002.
B. PLANTS 1049
a Subject Matter
Plant Variety Protection Act
(a) In general. – The breeder of any sexually reproduced or tuber
7 U.S.C § 2402
propagated plant variety (other than fungi or bacteria) who has Right to plant variety protection; plant
so reproduced the variety, or the successor in interest of the varieties protectable
breeder, shall be entitled to plant variety protection for the vari- As enacted in 1970, the PVPA ex-
ety, subject to the conditions and requirements of this chapter, empted "okra, celery, peppers, toma-
if the variety is – toes, carrots, and cucumbers" as a
result of lobbying by the Campbell's
(1) new ... Soup Company. The exemption was
(2) distinct ... repealed in 1980. Tuber-propagated
plants, such as potatoes, were added in
(3) uniform, in the sense that any variations are describable, 1994.
predictable, and commercially acceptable;
(4) stable, in the sense that the variety, when reproduced, will
remain unchanged with regard to the essential and distinc-
tive characteristics of the variety with a reasonable degree
of reliability commensurate with that of varieties of the
same category in which the same breeding method is em-
ployed.
(6) Sexually reproduced. – The term “sexually reproduced” includes
7 U.S.C § 2401(a)
any production of a variety by seed, but does not include the Definitions and rules of construction
production of a variety by tuber propagation.
(7) Tuber propagated. – The term “tuber propagated” means propa-
gated by a tuber or a part of a tuber.
(9) Variety. – The term “variety” means a plant grouping within a
single botanical taxon of the lowest known rank, that, without
regard to whether the conditions for plant variety protection are
fully met, can be defined by the expression of the characteristics
resulting from a given genotype or combination of genotypes,
distinguished from any other plant grouping by the expression
of at least one characteristic and considered as a unit with re-
gard to the suitability of the plant grouping for being propa-
gated unchanged. A variety may be represented by seed, trans-
plants, plants, tubers, tissue culture plantlets, and other ma er.
b Procedures
Plant Variety Protection Act
An application for a certificate recognizing plant variety rights shall 7 U.S.C § 2422
contain: Content of application
1050 CHAPTER 11. BIOTECHNOLOGY
(1) The name of the variety except that a temporary designation
will suffice until the certificate is to be issued. The variety shall
be named in accordance with regulations issued by the Secre-
tary.
(2) A description of the variety se ing forth its distinctiveness,
uniformity, and stability and a description of the genealogy
and breeding procedure, when known. The Secretary may re-
quire amplification, including the submission of adequate pho-
tographs or drawings or plant specimens, if the description is
not adequate or as complete as is reasonably possible, and sub-
mission of records or proof of ownership or of allegations made
in the application. An applicant may add to or correct the de-
scription at any time, before the certificate is issued, upon a
showing acceptable to the Secretary that the revised description
is retroactively accurate. Courts shall protect others from any
injustice which would result. The Secretary may accept records
of the breeder and of any official seed certifying agency in this
country as evidence of stability where applicable.
(3) A statement of the basis of the claim of the applicant that the
variety is new.
(4) A declaration that a viable sample of basic seed (including any
propagating material) necessary for propagation of the variety
will be deposited and replenished periodically in a public repos-
itory in accordance with regulations to be established hereun-
der.
(5) A statement of the basis of applicant’s ownership.
7 U.S.C § 2321
There is hereby established in the Department of Agriculture an office
Establishment to be known as the Plant Variety Protection Office, which shall have
the functions set forth in this chapter.
7 U.S.C § 2329
The Secretary [of Agriculture] shall maintain a register of descrip-
Register of protected plant varieties tions of United States protected plant varieties.
The Secretary [of Agriculture] may publish, or cause to be published,
7 U.S.C § 2330(a)(1) in such format as the Secretary shall determine to be suitable, the de-
Publications scriptions of plant varieties protected including drawings and pho-
tographs.
Genecorp, Inc. v. Progeny Advanced Genetics, Inc.
50 U.S.P.Q.2d 1213 (N.D. Cal. 1998)
Genecorp has filed a complaint against Progeny alleging infringe-
ment of Plant Variety Protection Certificate No. 8400060 which cov-
ers a variety of leaf le uce known as Genecorp Green. The Genecorp
Green Certificate was issued on August 31, 1986 and will expire on
B. PLANTS 1051
August 31, 2004.
Genecorp’s complaint alleges that Progeny infringed the
Genecorp Green Certificate by producing, marketing and sell-
ing a variety of leaf le uce known as Savannah Green. On May 28,
1996 Progeny filed Plant Variety Protection Certificate Application
No. 9600262 for Savannah Green.
On February 10, 1997, Genecorp initiated a protest proceeding
against Progeny’s Savannah Green PVP Application by filing a Pe-
tition to Protest. According to plaintiff’s counsel, the Plant Variety
Protection Office has advised that “it generally takes two years to pro-
cess an application for a Plant Variety Protection Certificate.”
Defendant Progeny argues that Genecorp’s infringement suit
should be stayed because the doctrine of primary jurisdiction re-
quires that the Savannah Green PVP Application be processed before
the suit continues. The doctrine of primary jurisdiction comes into
play whenever enforcement of a claim requires the resolution of is-
sues which, under a regulatory scheme, have been placed within the
special competence of an administrative body. Primary jurisdiction
would require a court to refer such issues to the administrative body
and stay further proceedings so as to give the parties a reasonable op-
portunity to seek an administrative ruling. Two factors are used to
determine whether the doctrine of primary jurisdiction applies: (1)
the desirable uniformity that results when the administrative agency
rules first and (2) the expert and specialized knowledge that the ad-
ministrative agency could apply to an issue.
Here, primary jurisdiction does not apply on the basis of unifor-
mity because the PVP Office will not resolve important questions re-
garding Genecorp’s infringement claim when it decides whether to
issue a PVP Certificate for Savannah Green. To obtain a PVP Cer-
tificate, the applicant need only show that the variety is new, dis-
tinct, uniform and stable.It does not appear that the PVP Office makes
any findings or can provide any remedy with respect to infringement
when it examines a PVP Application. Instead, the PVP Act provides
that a civil action shall be the remedy for infringement available to
the owner of PVP certificate.
At first it appears that if the PVP Office issues a PVP Certificate
for Savannah Green and if a proceeding in this court results in a find-
ing of infringement of Genecorp Green, then the two decisions will
not produce desired uniformity. This seems to be a problem because
the issuance of a PVP Certificate means implicitly that the PVP Of-
fice found Savannah Green to be “clearly distinct” from Genecorp
Green. However, the issuance of a PVP Certificate for Savannah
Green would not mean that Progeny did not commit any acts that
constitute infringement of the Genecorp Green Certificate. To prove
its infringement claim, Genecorp must show either that Savannah
1052 CHAPTER 11. BIOTECHNOLOGY
Green is a variety to which the infringement provision of the PVP
Act applies or that Progeny commi ed infringement of the Genecorp
Green certificate in the process of creating Savannah Green. There-
fore, the desire for uniformity does not justify primary jurisdiction
in this case because the PVP Office will not make sufficient findings
as to infringement, if at all, when it examines the Savannah Green
application.
While the PVP Office does have expert and specialized knowl-
edge, the PVP Act itself has not restricted determinations of “clearly
distinguishable” exclusively to the PVP Office. Therefore, primary
jurisdiction does not warrant a stay on this ground because the PVP
Act allows courts to make determinations of what is “clearly distin-
guishable” and does not appear to mandate that the PVP Office be
the primary forum for resolution of the issue.
Finally, defendant Progeny contends that a stay is warranted in
this case because stays are routinely granted in patent reexamination
cases. The court disagrees because the Savannah Green Application
and the protest by Genecorp are significantly different from a patent
reexamination proceeding. In particular, the fact that the patent in
dispute in a reexamination proceeding has already been issued is sig-
nificant because the existence of a patent creates certain intellectual
property rights in the holder of the patent. In this case, no rights have
been conferred on defendant Progeny by way of its Savannah Green
Application. Therefore, the court finds that the Savannah Green PVP
Application process is significantly different from a patent reexami-
nation and that a stay is not required on this ground.
Plant Variety Protection Act
PVPA § 83
(b) Term. –
7 U.S.C § 2483 (1) In general. – Except as provided in paragraph (2), the term
Contents and term of plant variety pro- of plant variety protection shall expire 20 years from the
tection
date of issue of the certificate in the United States, except
that … (B) in the case of a tree or vine, the term of the plant
variety protection shall expire 25 years from the date of is-
sue of the certificate.
(2) Exceptions. – If the certificate is not issued within three
years from the effective filing date, the Secretary may
shorten the term by the amount of delay in the prosecu-
tion of the application a ributed by the Secretary to the
applicant.
(c) Expiration upon failure to comply with regulations; notice. – The
term of plant variety protection shall also expire if the owner
fails to comply with regulations, in force at the time of certifi-
B. PLANTS 1053
cating, relating to replenishing seed in a public repository, or
requiring the submission of a different name for the variety, ex-
cept that this expiration shall not occur unless notice is mailed
to the last owner recorded as provided in section 2531(d) of this
title and the last owner fails, within the time allowed thereafter,
not less than three months, to comply with said regulations,
paying an additional fee to be prescribed by the Secretary.
c Ownership
Plant Variety Protection Act
(a) In general. – The breeder of any sexually reproduced or tuber 7 U.S.C § 2402
propagated plant variety ... shall be entitled to plant variety Right to plant variety protection; plant
protection for the variety ... if the variety is – varieties protectable
(1) new, in the sense that, on the date of filing of the applica- As enacted in 1970, the PVPA used a
tion for plant variety protection, propagating or harvested "date of determination" priority system
that substantially resembled the pre-
material of the variety has not been sold or otherwise dis-
AIA "first to invent" priority system. The
posed of to other persons, by or with the consent of the PVPA was amended in 1994 to switch to
breeder, or the successor in interest of the breeder, for pur- an AIA-like "date of filing" system to en-
poses of exploitation of the variety (A) in the United States, able the U.S. to ratify the International
more than 1 year prior to the date of filing [or longer peri- Union for the Protection of New Vari-
eties of Plants.
ods for activity outside of the United States]
(2) distinct, in the sense that the variety is clearly distinguish-
able from any other variety the existence of which is pub-
licly known or a ma er of common knowledge at the time
of the filing of the application;
(3) uniform ...; and
(4) stable ...
(b) Multiple applicants. –
(1) In general. – If 2 or more applicants submit applications
on the same effective filing date for varieties that cannot
be clearly distinguished from one another, but that fulfill
all other requirements of subsection (a), the applicant who
first complies with all requirements of this chapter shall
be entitled to a certificate of plant variety protection, to the
exclusion of any other applicant.
(2) Requirements completed on same date. –
(A) In general. – Except as provided in subparagraph (B),
if 2 or more applicants comply with all requirements
for protection on the same date, a certificate shall be
issued for each variety.
(B) Varieties indistinguishable. – If the varieties that are the
1054 CHAPTER 11. BIOTECHNOLOGY
subject of the applications cannot be distinguished in
any manner, a single certificate shall be issued jointly
to the applicants.
7 U.S.C § 2401
(a) Definitions. – As used in this chapter:
Definitions and rules of construction (2) Breeder. – The term “breeder” means the person who di-
rects the final breeding creating a variety or who discovers
and develops a variety. If the actions are conducted by an
agent on behalf of a principal, the principal, rather than
the agent, shall be considered the breeder. The term does
not include a person who redevelops or rediscovers a vari-
ety the existence of which is publicly known or a ma er of
common knowledge.
(b) Rules of construction. – For the purposes of this chapter:
(1) Sale or disposition for nonreproductive purposes. – The sale or
disposition, for other than reproductive purposes, of har-
vested material produced as a result of experimentation or
testing of a variety to ascertain the characteristics of the va-
riety, or as a by-product of increasing a variety, shall not
be considered to be a sale or disposition for purposes of
exploitation of the variety.
(2) Sale or disposition for reproductive purposes. – The sale or dis-
position of a variety for reproductive purposes shall not be
considered to be a sale or disposition for the purposes of
exploitation of the variety if the sale or disposition is done
as an integral part of a program of experimentation or test-
ing to ascertain the characteristics of the variety, or to in-
crease the variety on behalf of the breeder or the successor
in interest of the breeder.
(3) Sale or disposition of hybrid seed. – The sale or disposition of
hybrid seed shall be considered to be a sale or disposition
of harvested material of the varieties from which the seed
was produced.
(4) Application for protection or entering into a register of varieties.
– The filing of an application for the protection or for the
entering of a variety in an official register of varieties, in
any country, shall be considered to render the variety a
ma er of common knowledge from the date of the appli-
cation, if the application leads to the granting of protection
or to the entering of the variety in the official register of va-
rieties, as the case may be.
(5) Distinctness. – The distinctness of one variety from another
may be based on one or more identifiable morphological,
B. PLANTS 1055
physiological, or other characteristics (including any char-
acteristics evidenced by processing or product characteris-
tics, such as milling and baking characteristics in the case
of wheat) with respect to which a difference in genealogy
may contribute evidence.
(6) Publicly known varieties. –
(A) In general. – A variety that is adequately described by
a publication reasonably considered to be a part of the
public technical knowledge in the United States shall
be considered to be publicly known and a ma er of
common knowledge.
(B) Description. – A description that meets the require-
ments of subparagraph (A) shall include a disclosure
of the principal characteristics by which a variety is dis-
tinguished.
(C) Other means. – A variety may become publicly known
and a ma er of common knowledge by other means.
d Defenses
Somewhat unusually, we need to talk about defenses before dis-
cussing what constitutes infringement under the PVPA. The reason is
that one particular defense, the ”brown-bagging” provision, has cast
such a long shadow over the (relatively scant) PVPA caselaw that it
drives many of the interpretive controversies. For now, take it for
granted that obviously large-scale commercialization – like sales on
the open market between strangers of PVPA-protected seeds to farm-
ers who then plant the seeds and sell them on the open market to
strangers, and so on – infringe. We will return to the details in the
next subsection.
Plant Variety Protection Act
The Secretary may declare a protected variety open to use on a basis
PVPA § 44
of equitable remuneration to the owner, not less than a reasonable 7 U.S.C § 2404
royalty, when the Secretary determines that such declaration is nec- Public interest in wide usage
essary in order to insure an adequate supply of fiber, food, or feed
in this country and that the owner is unwilling or unable to supply
the public needs for the variety at a price which may reasonably be
deemed fair. Such declaration shall remain in effect not more than
two years. In the event litigation is required to collect such remuner-
ation, a higher rate may be allowed by the court.
PVPA § 112
Nothing in this chapter shall abridge the right of any person, or the 7 U.S.C § 2542
successor in interest of the person, to reproduce or sell a variety de- Grandfather clause
1056 CHAPTER 11. BIOTECHNOLOGY
veloped and produced by such person more than one year prior to
the effective filing date of an adverse application for a certificate of
plant variety protection.
PVPA § 113
Except to the extent that such action may constitute an infringement
7 U.S.C § 2543 under subsections (3) and (4) of section 2541 [1] of this title, it shall
Right to save seed; crop exemption not infringe any right hereunder for a person to save seed produced
by the person from seed obtained, or descended from seed obtained,
by authority of the owner of the variety for seeding purposes and
use such saved seed in the production of a crop for use on the farm
of the person, or for sale as provided in this section. A bona fide
sale for other than reproductive purposes, made in channels usual
for such other purposes, of seed produced on a farm either from seed
obtained by authority of the owner for seeding purposes or from seed
produced by descent on such farm from seed obtained by authority
of the owner for seeding purposes shall not constitute an infringe-
ment. A purchaser who diverts seed from such channels to seeding
purposes shall be deemed to have notice under section 2567 of this
title that the actions of the purchaser constitute an infringement.
PVPA § 114
The use and reproduction of a protected variety for plant breeding or
7 U.S.C. § 2544 other bona fide research shall not constitute an infringement of the
Research exemption protection provided under this chapter.
Transportation or delivery by a carrier in the ordinary course of its
PVPA § 115 business as a carrier, or advertising by a person in the advertising
7 U.S.C § 2545
Intermediary exemption
business in the ordinary course of that business, shall not constitute
an infringement of the protection provided under this chapter.
Jim Chen
81 Notre Dame L. Rev. 105 (2005)
The Parable of the Seeds
A. The PVPA in Overview
The PVPA contains an intriguing limitation designed to preserve the
”public interest in wide usage” in an otherwise protected variety.”
The Secretary of Agriculture may ”declare a protected variety open
to use on a basis of equitable remuneration to the owner,” but only
if the Secretary determines that compulsory licensing of a protected
variety ”is necessary in order to insure an adequate supply of fiber,
food, or feed in this country and that the owner is unwilling or unable
to supply the public needs for the variety at a price which may rea-
sonably be deemed fair.” Compulsory licensing under this provision
”shall remain in effect not more than two years.”
To my knowledge, however, the PVPA’s ”public interest” provi-
sion has never been invoked. Evidently, at no time since 1970 has
B. PLANTS 1057
the United States approached so precarious a state of food security
that the Secretary of Agriculture has felt compelled to compromise
proprietary interests conferred under the PVPA.
The PVPA contains two further limitations of arguably greater in-
terest to breeders and policy-makers. The PVPA’s extravagantly com-
plicated and controversial ”crop exemption” in principle permits a
farmer ”to save seed” from protected varieties and to ”use such saved
seed in the production of a crop.” The other exemption, known as the
PVPA’s ”research exemption,” declares simply that ”the use and re-
production of a protected variety for plant breeding or other bona
fide research shall not constitute infringement.”
These exemptions represent the most significant distinctions be-
tween the PVPA and the Patent Act. But for its crop and research
exemptions, the PVPA might be the legal tool of choice for commer-
cial plant breeders seeking to protect their investment in new plant
varieties. Whereas patents are relatively expensive to obtain and set
a higher threshold for protection,” plant variety protection is easier
and cheaper to obtain. In contrast with the PVPA’s relatively mod-
est request for ”a description of the variety se ing forth its distinc-
tiveness, uniformity and stability and a description of the genealogy
and breeding procedure, when known,” the Patent Act demands far
more extensive obligations of description and disclosure. Nothing in
the PVPA imposes the equivalent of the Patent Act’s requirements
of nonobviousness and enablement. In particular, the absence of a
nonobviousness requirement is a significant difference if one accepts
that the nonobviousness criterion performs the principal work of dis-
criminating between patent-worthy and patent-unworthy inventions.
In short, whereas the Patent Act offers robust protection in exchange
for a comprehensive disclosure of the technology underlying a new
plant variety, the PVPA grants much weaker protection upon deliv-
ery of a lower-quality disclosure.
Given the historic difficulty that plant breeders have encountered
in a empting to satisfy the Patent Act’s description requirement, the
PVPA provides an alternative, more accessible legal system in which
the plant genome essentially speaks for itself. The PVPA’s exemp-
tions, however, have effectively diverted many plant breeders toward
the Patent Act. In exchange for fulfilling the Patent Act’s more rigor-
ous process, plant breeders can evade the PVPA’s research and crop
exemptions. Quite significantly, the right to save seed of plants regis-
tered under the PVPA does not impart the right to save seed of plants
patented under the Patent Act. Patent-holders are also immune, un-
like their counterparts whose varieties are protected only under the
PVPA, from the use of a certified plant variety to develop a new in-
bred line. The PVPA defines the ”use” of a protected ”variety in pro-
ducing a hybrid or different variety” as infringement, but excludes
1058 CHAPTER 11. BIOTECHNOLOGY
from that definition the use of a protected variety in ”developing”
such a variety.
B. The Crop Exemption
Section 113 has always allowed farmers who plant seed protected by
a PVPA certificate to engage in a ”bona fide sale for other than repro-
ductive purposes, made in channels usual for such other purposes.”
This uncontroversial aspect of the crop exemption protects farmer-to-
market sales of a crop grown from protected seeds as food or feed or
for other nonreproductive purposes. Indeed, if the PVPA lacked this
exemption, the statute would bar farmers from selling any protected
crop whose seed is sold for food or fiber. Throughout the history
of the PVPA, section 113 has also permi ed farmers ”to save seed
produced by [them] from seed obtained, or descended from seed ob-
tained, by authority of the owner of the variety for seeding purposes
and to use such saved seed in the production of a crop” for on-farm
use. This facet of the crop exemption protects the traditional agricul-
tural practice known as ”bin run,” or the use of seed from one crop to
produce subsequent crops. At least with respect to self-pol- linated
crops such as wheat, soybeans, and co on, all of which reproduce
true-to-type, legal protection of bin run effectively restricts a breeder
to a single sale of each variety to each individual grower of a par-
ticular crop. (Cross-pollinated hybrid crops such as corn, sorghum,
and sunflowers are a different ma er; because they lose hybrid vigor
after a single planting, farmers must buy new seed each planting sea-
son.) The bin run exemption is a robust version of copyright law’s
”first sale” doctrine: the plant breeder gets exactly one chance to sell
the information ”encoded” in PVPA-certified seed to any individual
farmer.
As enacted in 1970, however, section 113 also allowed ”a person,
whose primary farming occupation is the growing of crops for sale
for other than reproductive purposes, to sell such saved seed to other
persons so engaged, for reproductive purposes.” This version of the
statute prevailed for nearly a quarter century. Its effect was plain: the
old crop exemption enabled farmers to go directly into the business of
selling PVPA-protected seeds alongside the plant breeders. In one of
the earliest cases interpreting section 113, a federal court of appeals
recognized the incompatibility between brown-bag sales under the
crop exemption and the PVPA’s overarching purpose of spurring the
development of new plant varieties:
In purpose and operation, the farmer exemption appears
to be at odds with the primary purpose of the Act. While
the main body of the Act assures developers of novel vari-
eties the exclusive right to sell and reproduce that variety,
B. PLANTS 1059
the crop exemption dilutes that exclusivity by allowing in-
dividual farmers to sell the protected variety without lia-
bility. The broader the construction given the exemp- tion,
the smaller the incentive for breeders to invest the substan-
tial time and effort necessary to develop new strains. The
less time and effort that is invested, the smaller the chance
of discovering superior agricultural products. If less time
and effort is invested, long-term benefits to the farmer in
the form of superior crops and higher yields will be lost.
The legal firestorm over brown-bagging would not go wholly
unchecked. The judicial and legislative branches of the United States
government eventually intervened. In the 1995 decision of Asgrow,
the Supreme Court limited brown-bag sales to ”only such seed as
[a farmer] has saved for the purpose of replanting his own acreage.”
While the Asgrow case awaited the Supreme Court’s decision on the
merits, Congress in 1994 repealed the brown-bagging provisions of
the PVPA’s crop exemption. In conformity with the Supreme Court’s
presumptive refusal to grant retroactive effect to statutes, Asgrow gov-
erned only cases filed under the PVPA as that statute read before
its 1994 amendments; all post-1994 sales of seed protected under the
PVPA have conveyed no brown-bagging privileges on farmers.
By eliminating farmers as a significant source of competition
for commercially developed seed, the legislative rejection of brown-
bagging restored much of the PVPA’s value to commercial plant
breeders. The 1994 amendment also represented a significant setback
for the recognition of farmers’ rights in American law.
C. The Research Exemption
The PVPA generally withholds liability from ”any act done privately
and for noncommercial purposes.” The statute’s more focused re-
search exemption provides that ”[t]he use and reproduction of a pro-
tected variety for plant breeding or other bona fide research shall not
constitute infringement.” The presence of a research exemption sep-
arate from the noncommercial acts exemption may suggest that a
competing plant breeder can lawfully appropriate a protected vari-
ety without authority and use it in a breeding program to develop
new commercial varieties, at least as long as such new varieties are
different enough not to be ”essentially derived” from the original pro-
tected variety. The interpretation of the research exemption is vital
to the proper functioning of the PVPA, because its coverage, if mis-
construed, could overlap entirely with the statute’s def- inition of in-
fringement. Congress expected that PVPA infringement would ”al-
most never” arise through ”independent work, but by willful repro-
duction starting from the protected variety itself.”
1060 CHAPTER 11. BIOTECHNOLOGY
PVPA infringement almost invariably begins with a supply of pro-
tected seed. Coupled with sufficient knowledge of agronomy and a
penchant for experimentation, access to PVPA-protected reproduc-
tive ma er may enable other parties to propagate specimens of a pro-
tected plant for purposes other than feed, fiber, or food. This is true
even of hybrids, which over the course of the twentieth century be-
came the predominant form of cultivar in many crops. Traditionally
associated with allogamous, or cross-pollinating, crops such as maize,
sunflower, brassicas, curcurbits, carrots, beets, and onions, the use
of hybrid cultivars has become common even in certain autogamous
(i.e., self-pollinating) crops, including sorghum, tomato, and peppers
and in the production of allogamous crops in nonindustrialized coun-
tries. Hybrid corn, perhaps the most commercially valuable crop pro-
duced by this technique, begins with the development of two inbred
lines by self-pollination and selection until each line is relatively ho-
mozygous. The use of pollen from the male inbred line to fertilize
silks on the female inbred line then yields hybrid seed.
Despite all precautions, each bag of hybrid seeds contains a small
amount of inbred seeds. These ”chasing selfs,” if planted, reproduce
the parent lines true-to-type. With sufficient patience and land, a
competing plant breeder, a farmer, or an academic researcher can
use chasing selfs to unlock the inbred parent lines of a hybrid vari-
Does chasing selfs violate the trade se- ety of corn, sorghum, or sunflower. Planting all the seeds from a bag
cret rights of the first breeder? Does of hybrid seed in a configuration that puts adequate space between
the answer depend on how the com-
plants facilitates ready identification of any inadvertently included
peting breeder obtained the hybrid
seeds? See Pioneer Hi-Bred Intern. v. inbred plants. Lacking heterosis, or hybrid vigor, inbred plants look
Holden Foundation Seeds, Inc., 35 F. 3d different from the taller hybrids. In the past decade, major commer-
1226 (8th Cir. 1994). cial seed breeders have resolved several lawsuits alleging breach of
intellectual property rights through use of the ”chasing selfs” tech-
nique.
The crucial issue presented by the research exemption is the defi-
nition of ”plant breeding or other bona fide research.” This verbal for-
mulation defines the extent of research activities shielded from PVPA
liability. The plain language of the research exemption shields only
genuine, bona fide research activities. Surreptitious acts, such as ef-
forts to isolate chasing sefs in a bag of hybrid seed, cannot constitute
”plant breeding or other bona fide research.” Whatever else it might
be, it is hard to imagine how surreptitious exploitation of another
party’s proprietary seed for the purpose of duplicating that variety
could be viewed as a ”good faith” activity. There is nothing ”bona
fide” about converting another company’s proprietary plant variety.
Competitors do not enjoy some sort of open-ended ”breeder’s ex-
emption” entitling them to unauthorized exploitation of proprietary
seed.
B. PLANTS 1061
e Infringement
Plant Variety Protection Act
(a) Acts constituting infringement. – Except as otherwise provided 7 U.S.C § 2541
in this subchapter, it shall be an infringement of the rights of the Infringement of plant variety protec-
owner of a protected variety to perform without authority, any tion
of the following acts in the United States, or in commerce which
can be regulated by Congress or affecting such commerce, prior
to expiration of the right to plant variety protection but after ei-
ther the issue of the certificate or the distribution of a protected
plant variety with the notice under section 2567 of this title: "Owners may give notice to the pub-
lic by physically associating with or af-
(1) sell or market the protected variety, or offer it or expose it
fixing to the container of seed of a va-
for sale, deliver it, ship it, consign it, exchange it, or solicit riety or by fixing to the variety, a la-
an offer to buy it, or any other transfer of title or possession bel containing either the words 'Unau-
of it; thorized Propagation Prohibited' or the
words 'Unauthorized Seed Multiplica-
(2) import the variety into, or export it from, the United States; tion Prohibited' and after the certificate
(3) sexually multiply, or propagate by a tuber or a part of a issues, such additional words as 'U.S.
tuber, the variety as a step in marketing (for growing pur- Protected Variety'." 7 U.S.C. § 2567
poses) the variety;
(4) use the variety in producing (as distinguished from devel-
oping) a hybrid or different variety therefrom;
(5) use seed which had been marked “Unauthorized Propa-
gation Prohibited” or “Unauthorized Seed Multiplication
Prohibited” or progeny thereof to propagate the variety;
(6) dispense the variety to another, in a form which can be
propagated, without notice as to being a protected variety
under which it was received;
(7) condition the variety for the purpose of propagation, ex-
cept to the extent that the conditioning is related to the ac-
tivities permi ed under section 2543 of this title;
(8) stock the variety for any of the purposes referred to in para-
graphs (1) through (7);
(9) perform any of the foregoing acts even in instances in
which the variety is multiplied other than sexually, except
in pursuance of a valid United States plant patent; or
(10) instigate or actively induce performance of any of the fore-
going acts.
(c) Applicability to certain plant varieties. – This section shall apply
equally to –
(1) any variety that is essentially derived from a protected va-
riety, unless the protected variety is an essentially derived
1062 CHAPTER 11. BIOTECHNOLOGY
variety;
(2) any variety that is not clearly distinguishable from a pro-
tected variety;
(3) any variety whose production requires the repeated use of
a protected variety; and
(4) harvested material (including entire plants and parts of
plants) obtained through the unauthorized use of propa-
gating material of a protected variety, unless the owner of
the variety has had a reasonable opportunity to exercise
the rights provided under this chapter with respect to the
propagating material.
(d) Acts not considered infringing. – It shall not be an infringement of
the rights of the owner of a variety to perform any act concern-
ing propagating material of any kind, or harvested material, in-
cluding entire plants and parts of plants, of a protected variety
that is sold or otherwise marketed with the consent of the owner
in the United States, unless the act involves further propagation
of the variety or involves an export of material of the variety,
that enables the propagation of the variety, into a country that
does not protect varieties of the plant genus or species to which
the variety belongs, unless the exported material is for final con-
sumption purposes.
(e) Private noncommercial uses. – It shall not be an infringement
of the rights of the owner of a variety to perform any act done
privately and for noncommercial purposes.
PVPA § 41(a)
(3) Essentially derived variety. –
7 U.S.C § 2401(a) (A) In general. – The term “essentially derived variety” means
Definitions and rules of construction a variety that—
(i) is predominantly derived from another variety (re-
ferred to in this paragraph as the “initial variety”) or
from a variety that is predominantly derived from the
initial variety, while retaining the expression of the es-
sential characteristics that result from the genotype or
combination of genotypes of the initial variety;
(ii) is clearly distinguishable from the initial variety; and
(iii) except for differences that result from the act of deriva-
tion, conforms to the initial variety in the expression of
the essential characteristics that result from the geno-
type or combination of genotypes of the initial variety.
(B) Methods. – An essentially derived variety may be obtained
by the selection of a natural or induced mutant or of a so-
B. PLANTS 1063
maclonal variant, the selection of a variant individual from
plants of the initial variety, backcrossing, transformation
by genetic engineering, or other method.
Delta and Pine Land Co. v. Sinkers Corp.
177 F.3d 1343 (1999)
Delta Pine and Land is a developer and breeder of co on planting
seed. It holds numerous PVP Certificates protecting its novel seed
varieties. DPL sells these protected co onseed varieties through ap-
proved distributors. The authorized distributors sell seed to growers
who plant the seed, harvest the co on, and then dispose of all excess
protected co onseed.
The court described the delinting pro-
Sinkers’s principal business activity consists of delinting and con-
cess as follows: "To process cottonseed,
ditioning co onseed for use as planting seed. Co on growers bring such as a farmer might purchase from
undelinted co onseed to Sinkers, Sinkers delints the co onseed per Delta, the seed is first taken to a gin
their request, and then turns the co onseed over to whomever the where most of the fiber or lint is sep-
grower specifies. The delinting process is an essential step in prepar- arated from the seed. The seed can
then be taken to a delinter, such as
ing co onseed for planting. Virtually all co on farmers in the United
Sinkers. The delinting process removes
States utilize delinted co onseed in planting their crops. the remaining lint. Undelinted, but
The PVPA gives the holder of a PVP Certificate rather broad ex- ginned, cottonseed arrives at Sinkers's
clusive rights. However, at the time this case was brought in the Kennett facility in a truck. In some
district court, there was one express, broad exemption to these ex- cases, individual farmers bring cotton-
seed to the facility in pickup trucks.
clusive rights.3 The PVPA allowed a farmer to save seed and to use
In other cases, however, large quanti-
such ”saved seed” to produce crops on his own farm, and further- ties of cottonseed, from many different
more allowed certain ”farmer-to-farmer” sales of excess saved seed. distributors, farmers and farming co-
This exemption was contained in 7 U.S.C. § 2543, which provided as operatives, arrive in tractor-trailer rigs.
follows: Upon its arrival at Sinkers's facility, un-
delinted cottonseed is placed in a "run
Except to the extent that such action may constitute an in- bin". The seed is then fed into an auger,
fringement under [§§ 2541(3) and (4)], it shall not infringe where it is wetted with a sulfuric acid
solution. From there, the seed passes
any right hereunder for a person to save seed produced by
through a centrifuge where the solu-
him from seed obtained . . . by authority of the owner of tion is spun off. The seed emerges
the variety for seeding purposes and use such saved seed in a damp-dry condition and is passed
in the production of a crop for use on his farm, or for sale through two dryers and two buffers.
as provided in this section: Provided, that without regard In the drying and buffing process, all
remaining lint is separated from the
to [§ 2541(3)] it shall not infringe any right hereunder for
seed. After culls, sticks and debris are
a person, whose primary farming occupation is the grow- removed from the bulk seed, the seed
ing of crops for sale for other than reproductive purposes, is treated with chemicals (if the client
to sell such saved seed to other persons so engaged, for so requests—this is the "conditioning"
reproductive purposes. stage of the process, the seed hav-
ing by now been delinted), and then
The Supreme Court later interpreted this exemption to mean that, for placed in fifty-pound bags After the
a farmer to meet the requirements of the above proviso, the farmer seed has been bagged, it is loaded onto
trucks and transported to its next des-
3
his exemption is no longer part of the PVPA. The pertinent language was tination, which may or may not be the
deleted from the statute in 1994 greatly narrowing this sole express exemption. The place from which the seed was sent, de-
amendments deleting certain language, however, apply only to PVP Certificates is- pending on the instructions given to
sued after April 4, 1995, that were not pending on or before that date. the delinter."
1064 CHAPTER 11. BIOTECHNOLOGY
may sell for reproductive purposes only so much seed as he has saved
Asgrow: 513 U.S. 179, (1995) for the purpose of replanting his own acreage. Asgrow Seed Co. v. Win-
terboer Presumably, such sales occur only when the farmer reduces or
eliminates his co on acreage, and, thus, has ”saved seed” for which
he or she has no farming use. Otherwise, there has been li le case law
interpreting the PVPA. But the language of the statute is clear: the
only express exemption to a PVP Certificate holder’s rights is that
included in section 2543 for farmer-to-farmer transfers of protected
seed. In the instant case, however, the district court implied an addi-
tional exemption to the rights of a PVP Certificate holder. We must
decide if the court was correct in its discernment and its definition of
this exemption.
I. T P W A : ₇ U.S.C. § ₂₅₄₁₍₁₎
Delta alleges that Sinkers infringed their rights under 7 U.S.C. §
2541(1) ”merely by virtue of its transfer of possession of seed with-
out the benefit of an exemption from PVPA liability.” Sinkers’s de-
fense rested on an extension of the express exemption for the farmer-
to-farmer sales that it viewed as implied in the PVPA, as previously
interpreted. Sinkers argued that it was a mere passive third-party to
the lawful transfers of possession incident to sales arranged between
farmers under the express exemption and therefore could not itself be
liable. Until Asgrow, the leading case on the farmer-to-farmer exemp-
People's Gin Co: 694 F.2d 1012 (5th Cir. tion was Delta and Pine Land Co. v. Peoples Gin Co.. It remains the only
1983) other significant precedent on implied exemptions under the PVPA.
In People’s Gin Co, the sole issue was whether the involvement of
a third party broker rendered otherwise exempt sales between farm-
ers ineligible for the exemption. The Fifth Circuit held that 7 U.S.C.
§ 2543 ”only exempts sales of the protected variety from one farmer
directly to another farmer accomplished without the active interven-
tion of a third party.” That case concerned the infringement liability
of a farmer’s co-operative which was brokering exchanges of seed be-
tween its members. The fact that the farmer’s cooperative, Peoples
Gin Company, also ran a gin was not an issue in that case, as the
whole focus was on the cooperative’s brokering activities. In the in-
stant case, however, the district court made a fact-finding that Sinkers
did not broker or actively intervene to arrange the sales that led to the
transfers of possession challenged by Delta. We must agree with that
fact-finding because on this record it cannot be seen as clearly erro-
neous. Indeed, it is essentially undisputed. Therefore, we see this
case as entirely distinguishable on its facts from People’s Gin Co. The
issue raised in this case, then, is one of first impression. It is whether
a passive third-party to a sales transaction, such as a ginner or a delin-
ter, can be held liable for infringement under 7 U.S.C. § 2541(1), as a
participant in unauthorized possession transfers, if they fall outside
B. PLANTS 1065
the farmer-to-farmer exemption.
The district court, in resolving this issue, relied on People’s Gin
Co and in particular the language ”active intervention” used by the
Fifth Circuit to distinguish between exempt and non-exempt farmer-
to-farmer sales. People’s Gin Co focused solely on sales – selling the
protected seed, offering it for sale or soliciting an offer to buy it, and
did not reach the transfer of possession clause at issue in the instant
case. The district court acknowledged this distinction, but still de-
cided that as this was a subsection (1) case, if the Fifth Circuit had
drawn a distinction with regards to selling and buying seed, then that
distinction could be drawn with regards to the transfer of possession
clause. Accordingly, the district court applied an active/passive (or
broker/non-broker) distinction to the subsection (1) transfer of pos-
session claim in the instant case, even though Sinkers was obviously
not a broker, holding that:
the passive conduct of [Sinkers] on the facts here [does]
not ... constitute a delivery, shipment or transfer of posses-
sion of seed by [Sinkers] within the meaning of § 2541(1),
regardless of whether the seed involved is protected or the
underlying sale or transfer involving [Sinkers’s] customer
is within the § 2543 exemption.
Today we hold that the district court’s interpretation of 7 U.S.C. §
2541(1) is erroneous. Because the plain language of subsection (1) it-
self does not require the transfer act to be an ”active” one, i.e., by a
broker, the subsection necessarily appears to comprehend a situation
where infringement by transfer of possession could occur without
the delinter or a third party brokering a sale, or deciding to whom
to transfer possession, but rather was nonetheless transferring pos-
session without authorization from the PVP Certificate holder. Ap-
plying the exemption more broadly to grant blanket immunity to a
delinter conflicts with the provision providing for liability for any
transfer of possession of protected seed.
There is, to be sure, a statement in People’s Gin Co that:
A sale is exempt if the seller instructs his cooperative to
forward his seed to a particular named buyer. In that situ-
ation, the cooperative has not arranged the sale. Nor has
it played an active role in the transaction. It has merely
served as the vehicle for the transfer of possession.
We agree with the district court that such a factual scenario was not
present and hence not at issue in People’s Gin Co and consequently
this statement is dictum.
More importantly, we do not believe the adaptation of Peoples to
this case by the district court was consistent with the structure and
1066 CHAPTER 11. BIOTECHNOLOGY
purpose of the prohibition on unauthorized and non-exempt trans-
fers of possession in subsection (1). The district court is, in effect,
adding limiting language (”actively”) to subsection (1) that was left
out by Congress in subsection (1) and used by Congress only in sub-
section (8). The district court found that Sinkers did not induce any-
one to take possession of or sell the seed. The district court also found
that Sinkers did not transfer title to the seed. However, Sinkers un-
deniably transferred possession[5] of the seed, when it delivered the
seed to whomever its customer requested delivery be made. Sinkers
was given control over the undelinted seed by the farmer or cooper-
ative that delivered the seed to Sinkers, and then Sinkers transferred
control of the delinted seed to the farmer or cooperative identified as
the recipient by Sinkers’s customer. For these reasons, we hold there
is no requirement associated with subsection (1) of active interven-
tion or brokering, as there is with subsection (8).
On the other hand, the broadest possible reading of subsection
(1) does not make much sense to us, either. We cannot imagine that
Congress would have meant to make a completely innocent third-
party liable for infringement because it transferred possession of seed
to a farmer at the request of another farmer, its customer. An exam-
ple of when Congress could not have meant to impose liability might
be where a single farmer, Joan, brings in one truckload of seed to be
delinted, and Farmer Bob picks the seed up in a transfer of posses-
sion that is illegal, because, unbeknownst to the delinter, Joan does
not actually farm co on. Thus, while the transaction appears to fall
within the exemption for farmer-to-farmer transfer, actually it does
not. The delinter, we think, should be liable for all illegal transfers of
possession, when not brokered by them, only if it has scienter. That
is, when transferring possession of protected seed under instructions
from its customer, the delinter is liable only if it knows the transfer
is not within the exemption for farmer-to-farmer transfers. Absent
scienter, however, involvement in farmer-to-farmer transfers outside
the express exemption, should not subject delinters and ginners to li-
ability for infringement.
The dissent disagrees with this test, arguing, in effect, that delin-
ters and ginners should not be liable for infringement, even with sci-
enter, as long as they did not broker the transfer of possession of
the seed. We do not believe that Congress meant for delinters and
ginners to be exempt from infringement of the PVPA, even when
they are following the instructions of their customers, if they know
they are participating in an illegal activity. An example of a scenario
highlighting this difference between the dissent’s view and our own
might be one in which Farmer Joan brings in her seed to be delinted,
and signs a contract for two points of delivery. Farmer Joan has had
a bumper harvest of protected co onseed this year, in our example,
B. PLANTS 1067
and Farmer Bob has had a terrible year. Farmer Joan agrees to sell her
excess protected seed to Farmer Bob, so that he doesn’t have to pay
the higher prices charged by the PVP Certificate holder for the pro-
tected seed. Farmer Joan tells the delinter that she would like half of
her seed delinted and returned to her so that she can replant the same
acreage that she had the year before (e.g., the ”saved seed” allowed
under Asgrow). Farmer Joan then tells the delinter that she would
like the other half of her protected seed delinted and delivered to
Farmer Bob to use for reproductive purposes on his farm. The delin-
ter at this point clearly has scienter, and knows that Farmer Joan, at
least, is participating in an unlawful activity. We cannot believe that
Congress did not mean for the delinter to be found liable for infring-
ing the PVPA in this scenario, but that is the result the dissent’s test
would cause. According to their ”brokerage test”, the delinter has
done nothing wrong here. We feel that if Congress meant the delin-
ters and ginners to be able to follow unquestioningly their customer’s
orders and still avoid liability, surely they would have wri en an ex-
press per se exemption into the PVPA, just as they did for common
carriers. The common carrier exception is in
PVPA § 115, 7 U.S.C. §2545, excerpted
We therefore hold that the correct reading of subsection (1) re-
above.
quires that a delinter, ginner, or other third-party transferor facilitat-
ing a farmer-to-farmer sale know (knowledge is presumed in a sce-
nario where the third party brokers the transaction) or should rea-
sonably know that its unauthorized transfer of possession is an in-
fringing transaction, i.e., that the sale is not exempt under section
2543. Liability for infringement under subsection (1) thus turns on
knowledge. If Sinkers knew, or should have known, that the transfer
of possession was not within the farmer-to-farmer exemption, then it
can be held liable for infringing subsection (1), but only then.
We note that the district court also erred in stating that ”the pas-
sive conduct of Sinkers on the facts here does not constitute infringe-
ment regardless of whether the seed involved is within the § 2543 ex-
emption.” Under Asgrow a farmer is allowed to save seed to replant
his or her own acreage the next year. In order to plant the seed it must
be delinted. Therefore, Asgrow must also carve an exemption out for
the transfer of possession of protected seed to a delinter if it is only
the seed the farmer is saving for his or her own acreage. Whether the
seed involved is within the section 2543 exemption thus becomes a
crucial and important question.
We note that the scenario where the seed is returned to the farmer
or cooperative from which the seed was received potentially compli-
cates application of the ”should have known” standard, as a farmer
is entitled to save seed for reproductive use on his own farm, and
may in fact save seed for several years of future plantings. However,
there are still ”red flags” which a delinter such as Sinkers can spot. If
1068 CHAPTER 11. BIOTECHNOLOGY
a farmer returns year after year with more seed than he or she could
possibly use, based either on Sinkers’s knowledge of the actual size
of the farmer’s acreage or, imply an absurdly large amount of seed,
then clearly this seed is not being saved for reproductive purposes
just for the farmer’s own acreage, and Sinkers would have scienter.
We note that the dissent expresses concern over the ”paper trail”
that it speculates this test will create. First of all, the certificate holder
is required to prove that the ginners and/or delinters knew or should
have known they were processing ”hot seed.” Thus, there is no bur-
den on the ginner or delinter to disprove anything. Accordingly, in
many situations no record keeping would be needed.
Presumably the ginners and delinters process seed full-time. This
would suggest that they work with the same farmers from year to
year, and have some idea of how much seed is a reasonable amount
of saved seed for a particular farmer, or farming cooperative law-
fully to bring in for processing. It should be obvious, for example,
that enough seed to replant forty square miles of co on fields is not
a reasonable amount for a cooperative to bring in as saved seed for
processing. In such a case, but only then, the ginner or delinter may
indeed want to ask for wri en reassurance that it will not be breaking
the law by processing this huge quantity of seed, because processing
inevitably requires transferring possession of the seed, once delinted
or ginned, to someone. However, this wri en assurance does not im-
part immunity. If the certificate holder can prove actual knowledge,
or show that the delinter or ginner should have known it was han-
dling hot seed, the delinter or ginner is still liable for infringement of
the PVPA. We note, furthermore, that while, of course, on this record
we could not describe the contents of a standard contract between
a farmer or cooperative and a delinter or ginner, it is reasonable to
assume that it would address: the price per pound for the process-
ing; the delivery terms; and the condition the farmer can expect the
seed to be in when it is returned or re-delivered by the ginner and/or
delinter. This contract may also specify the chemical conditioning
treatments the farmer or cooperative wants the seed exposed to (”So
... they tell you ... whether they want [the seed] double treated or
triple treated”); the amount of cleaning the seed should be given (”we
have ... some farmers that like to have the seed ... cleaned a li le
heavy [,t]ake a li le more waste out to give you a be er seed”); it
may give the farmer a warranty that his seed will not be mixed with
colored co onseed, that his seed will not be mixed with non-USDA
approved seed, and that he will receive the same variety of seed back
that he dropped off to be processed. We do not believe, with this
many other specifications which may be present in a contract for cot-
tonseed processing, that it is placing a significant burden on the delin-
ters or ginners to place one more paragraph in the contract, thus pro-
B. PLANTS 1069
viding some limited protection against liability. Accordingly, our test
hardly ”creates” a complex record-keeping regime. One apparently
already exists.
II. A I B : ₇ U.S.C. § ₂₅₄₁₍₈₎
Delta next alleged that by willfully ignoring the large quantities of
apparently protected seed that Sinkers was processing without its
authority, Sinkers actively induced unlawful transfers of possession
by others, and thus infringed Delta’s rights under 7 U.S.C. § 2541(8).
The district court found, as stated above, that Sinkers did not inter-
vene as a third-party in the transfers of possession of the protected
seed. We agree, for it was not clear error for the district court to find
that Sinkers did not broker protected seed transfers and did not ac-
tively induce anyone to transfer possession of the seed to other parties
in any way violative of the statute. Sinkers merely turned delinted
seed over to whomever its customers, such as Nodena, identified.
In subsection (8) of section 2541, the critical words ”instigate or ac-
tively induce”, clearly evince congressional intent to limit liability
under this subsection to those such as brokers, who perform such
functions when they arrange transfers of seed, in the instant case via
the delinter, between independent sellers and buyers. The district
court correctly found, however, that Sinkers did not perform either of
these functions. Certainly, its findings are not clearly erroneous. In-
deed, the facts seem undisputed. Delta argues here only that Sinkers
recklessly or with willful indifference transferred possession of large
quantities of protected seed in violation of the PVPA. This might be
true, but we make no decision on that issue here, because, even if the
allegation is true, it is insufficient to trigger 7 U.S.C. § 2541(8). Sinkers
did not broker the sale or transfer of possession of any protected seed,
or otherwise instigate or actively induce others to infringe.
III. T N R : ₇ U.S.C. § ₂₅₄₁₍₆₎
Finally, we address the issue of the notice required under subsection
(6) of 7 U.S.C. § 2541. The district court only summarily addressed
this issue, holding that ”the Court would read the ‘under which it
was received’ clause of § 2541(6) to limit the notice requirement to
instances in which the seed was received with a label stating that it
was a protected variety.” We vacate the judgment based on this hold-
ing by the district court. The proper test is not whether a physical
label is somehow a ached to the seed when the seed is received, but
rather whether through that or other means the one in receipt, here
Sinkers, knew, or should have known that the seed is a protected va-
riety. Subsection (6) provides that it is infringement to ”dispense the
novel variety to another ... without notice as to being a protected vari-
ety under which it was received.” The notice that must be received is
1070 CHAPTER 11. BIOTECHNOLOGY
not restricted to actual notice, or to notice in the form of labels on the
seed, as the district court concluded, or else Congress would surely
have included language indicating such restrictions.
By comparison, a patentee seeking to give notice to the public that
an item is patented is required by Congress to mark it according to a
specific list of acceptable methods as detailed in 35 U.S.C. § 287. The
language here is much broader, and merely reads that dispensing of
the novel variety without notice that it is a novel variety infringes the
rights of the holder of the PVP Certificate covering the novel variety.
Because Congress gave specific notice requirements in 35 U.S.C. § 287,
and omi ed these requirements in subsection (6), we read the la er
statute not to require express notice, or labels on receipt, in order for
a failure to give notice to infringe.
In the Nodena example, the district court found that references in
Sinkers’s own germination logs to this seed as ”Lot 5” seed reflected
Nodena’s own designation of the seed in that manner to indicate that
the seed was DPL-50 seed. Under the test applied by the district court,
because this seed arrived with no physical tag on it to indicate that
it was protected DPL-50 seed, Sinkers had no responsibility to no-
tify its transferee that the transferred seed was protected seed. How-
ever, Sinkers was informed by Nodena that it was Lot 5 seed, accord-
ing to the notations in its own logs. If on remand the district court
finds that Sinkers had notice, i.e., that it knew the term ”Lot 5” was
Nodena’s way of designating protected DPL-50 seed, then Sinkers
infringed Delta’s PVPA rights when it did not label the bags contain-
ing Nodena’s delinted seed as protected seed. We further understand
that in order to protect the vigor and germination ability of the co on-
seed, the delinter and ginner need to know the type of seed they are
processing so that they know how to process it, e.g., the proper stor-
age method, the amount of moisture to expose it to, and the tempera-
ture least likely to cause it to germinate early. Early maturation seed
that has undergone no chemical treatments by the manufacturer, is
processed differently from late maturation seed that may have been
genetically altered to not be affected by herbicides. It is, therefore,
likely that they are accurately informed by the cooperative and farm-
ers of the varieties of seed being delivered for processing and that
they may want to take affirmative steps, e.g., germination tests, to
assure themselves of the exact varieties accepted for processing, lest
they become liable for harming the seed. Once a ginner or delinter
has determined the variety of co onseed undergoing processing, it
has an affirmative duty to label the co onseed with the variety upon
returning or re-delivering the co on-seed.
Clevenger, Circuit Judge, dissenting:
I agree that some limit must be placed on the transfer of posses-
B. PLANTS 1071
sion statute to avoid absurd results. Even the Supreme Court has
noted that this statute is virtually impossible to parse satisfactorily.
See Asgrow
Some 17 years ago, the Fifth Circuit (which incidentally knows
more about co on growing, ginning and delinting than we) grappled
with the Act and found another way of placing some sensible lim-
its on the transfer and labeling provisions of the Act. In People’s Gin
Co, that court held that a party who is but a passive participant in a
farmer-to-farmer transfer cannot be held liable under the Act. In that
case, the defendants were found to have arranged sales transactions
among the farmers; not being merely passive, they were held liable
under the Act. From 1983 until today, People’s Gin Co has been the law
of the Co on Belt. Indeed, when this case was brought, the plaintiffs
were under the impression that Sinkers had been actively participat-
ing in arranging the farmer-to-farmer transfers, and that this presum-
ably would be an easy case for them to win under the law of People’s
Gin Co. As is so often the case, however, discovery proved the plain-
tiffs wrong: the evidence proves, as a ma er of fact, that Sinkers has
been a mere passive conduit in the farmer-to-farmer sales. For that
reason, the district court simply applied the law of the Co on Belt
and relieved Sinkers from liability under the Act. The court quite rea-
sonably noted that a delinter who is merely passively carrying out the
instruction of its customers in delivering or releasing delinted seed is
not substantively different from a delinter who merely returns the
delinted seed to the person who asked it to be delinted. The court
opined, and I agree, that a mere return of delinted seed to the sender
should not violate the transfer of possession provision.
The majority prefers not to follow the lead of the Fifth Circuit. I
think it is a mistake to read a scienter requirement into the transfer
of possession provision. It seems clear that Congress put the scienter
element where it belongs, in section 2541(8).
Under the law as stated in People’s Gin Co, ginners and delinters
were saved the need to create a ”paper trail” to protect completely
passive conduct from liability under the Act. Under the rule devised
by the majority in this case, ginners and delinters will become paper-
keeping traffic cops. Ginners and delinters will have to keep upto-
date records on the membership of co on cooperatives, including the
acreage planted in co on each season by each member of the coop-
erative. Under the majority’s rule, a forty member cooperative (forty
farms of roughly a square mile each) will be a prima facie suspect of
delivering excess seed to the ginner or delinter. Ginners and delinters
will also have to keep current with any increase in acreage purchased
by farmers during the course of a year, so they can satisfy themselves
that a farmer is not delivering too much seed for ginning or delint-
ing. Presumably ginners and delinters will want to ask those who
1072 CHAPTER 11. BIOTECHNOLOGY
deliver seed to them to provide them with certificates that say some-
thing like ”the seed we are delivering is within the current section
2543 exemption.” Those who deliver the seed to those who deliver
it to ginners and delinters will also want some kind of certificate, to
the same effect. The paper trail presumably will lead right back to
the section 2543 farmer who is trying to save seed for his own use,
or for sale as now permi ed under section 2543. I can see mountains
of paper piling up throughout the Co on Belt. I can also see lots of
work for lawyers trying and defending this kind of case. And many
headaches for judges, who will have to decide if a case is lost, or won,
when there are (as there inevitably will be) glitches here and there in
the paper trial that, in a perfect, Federal Circuit world, will lead from
farmer Joan on her south 40 to her neighbor with the truck who brings
her seed to a coop, which gives the seed to a another to take it first
to the ginner, then to the delinter and finally either back to Joan or to
the person who buys her seed. Now all of this seems like a whole lot
of trouble being visited on a se led law that went unchallenged for a
very long time, and only got challenged in this case when the proofs
under the se led law ran against the plaintiff.
The majority responds to my concern by guessing what goes into
a co onseed delinting contract, assuming farmer Joan signs such a
contract, and then postulating that all a ginner or delinter needs to do
to avoid liability is to stick a clause in the contract saying something
like ”you promise me that the amount of seed you are delivering does
not exceed the amount you can lawfully save for replanting.” That it
will be so easy to satisfy the scienter requirement seems to me all the
more reason why we should leave se led law alone.
The majority opinion notes that Congress amended the Act in
1994. That amendment preserves the right of a farmer to save seed
from the crop he produces from protected seed he has purchased.
The farmer must either use such saved seed ”in the production of
a crop for use on the farm of the person,” or sell such amount of the
saved seed in a ”bona fide sale for other than reproductive purposes.”
This case, of course, arises under the statute before its amendment,
and therefore neither the majority nor I can say with authority how
the holding of the majority will apply to the future. We can predict,
however, that a farmer who has purchased protected seed, and who
wishes to use or sell the seed propagated by his plantings of protected
seed—as the amended Act permits—will need the services of a delin-
ter. It thus seems that, in order to avoid the absurd results that fol-
low from an unrestrained reading of the Act, either a ”passive” or
a ”knowing” exception to the statute, or some other escape valve, is
required.
I of course recognize that I, like the majority, read an exception
into an otherwise broad statute. Whether either of us is correct in so
B. PLANTS 1073
doing is a ma er for others to determine. Perhaps the Supreme Court
will wish to grapple with the Act, again.
3 The Punchline
JEM Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc.
534 U.S. 124 (2001)
This case presents the question whether utility patents may be issued
for plants under, or whether the Plant Variety Protection Act and the
Plant Patent Act of 1930 are the exclusive means of obtaining a federal
statutory right to exclude others from reproducing, selling, or using
plants or plant varieties. We hold that utility patents may be issued
for plants.
The United States Patent and Trademark Office (PTO) has issued
some 1,800 utility patents for plants, plant parts, and seeds. Seven-
teen of these patents are held by Pioneer Hi-Bred International. Pio-
neer’s patents cover the manufacture, use, sale, and offer for sale of
the company’s inbred and hybrid corn seed products. A patent for
an inbred corn line protects both the seeds and plants of the inbred
line and the hybrids produced by crossing the protected inbred line
with another corn line. See, e.g., U.S. Pat. No. 5,506,367. A hybrid
plant patent protects the plant, its seeds, variants, mutants, and triv-
ial modifications of the hybrid. See U.S. Pat No. 5,491,295.
As this Court recognized over 20 years ago in Chakrabarty, the lan-
guage of § 101 is extremely broad. Several years after Chakrabarty, the
PTO Board of Patent Appeals and Interferences held that plants were
within the understood meaning of ”manufacture” or ”composition of
ma er” and therefore were within the subject ma er of § 101. In re Hi- Hibberd: 227 U.S.P.Q. 443 (BPAI 1985)
bberd. It has been the unbroken practice of the PTO since that time to
confer utility patents for plants. To obtain utility patent protection,
a plant breeder must show that the plant he has developed is new,
useful, and nonobvious. In addition, the plant must meet the specifi-
cations of § 112, which require a wri en description of the plant and
a deposit of seed that is publicly accessible.
The 1930 PPA conferred patent protection to asexually repro-
duced plants. Significantly, nothing within either the original 1930
text of the statute or its recodified version in 1952 indicates that the
PPA’s protection for asexually reproduced plants was intended to be
exclusive. Importantly, chapter 15 nowhere states that plant patents
are the exclusive means of granting intellectual property protection
to plants. Although unable to point to any language that requires,
or even suggests, that Congress intended the PPA’s protections to
be exclusive, petitioners advance three reasons why the PPA should
preclude assigning utility patents for plants. We find none of these
arguments to be persuasive.
1074 CHAPTER 11. BIOTECHNOLOGY
First, petitioners argue that plants were not covered by the gen-
eral utility patent statute prior to 1930. Prior to 1930, two factors were
thought to remove plants from patent protection. The first was the be-
lief that plants, even those artificially bred, were products of nature
for purposes of the patent law. The second obstacle to patent protec-
tion for plants was the fact that plants were thought not amenable
to the wri en description requirement of the patent law. The PPA
thus gave patent protection to breeders who were previously unable
to overcome these obstacles.
This does not mean, however, that prior to 1930 plants could not
have fallen within the subject ma er of § 101. Rather, it illustrates
only that in 1930 Congress believed that plants were not patentable
under § 101, both because they were living things and because in
practice they could not meet the stringent description requirement.
Yet these premises were disproved over time. As this Court held in
Chakrabarty, ”the relevant distinction” for purposes of § 101 is not ”be-
tween living and inanimate things, but between products of nature,
whether living or not, and humanmade inventions.” In addition, ad-
vances in biological knowledge and breeding expertise have allowed
plant breeders to satisfy § 101’s demanding description requirement.
Second, petitioners maintain that the PPA’s limitation to asexu-
ally reproduced plants would make no sense if Congress intended
§ 101 to authorize patents on plant varieties that were sexually re-
produced. But this limitation once again merely reflects the reality
of plant breeding in 1930. At that time, the primary means of repro-
ducing bred plants true-to-type was through asexual reproduction.
Congress thought that sexual reproduction through seeds was not
a stable way to maintain desirable bred characteristics. Thus, it is
hardly surprising that plant patents would protect only asexual re-
production, since this was the most reliable type of reproduction for
preserving the desirable characteristics of breeding.
Third, petitioners argue that in 1952 Congress would not have
moved plants out of the utility patent provision and into § 161 if it
had intended § 101 to allow for protection of plants. Petitioners again
rely on 138*138 negative inference because they cannot point to any
express indication that Congress intended § 161 to be the exclusive
means of patenting plants. But this negative inference simply does
not support carving out subject ma er that otherwise fits comfort-
ably within the expansive language of § 101, especially when § 101
can protect different a ributes and has more stringent requirements
than does § 161.
By passing the PVPA in 1970, Congress specifically authorized
limited patent-like protection for certain sexually reproduced plants.
Petitioners therefore argue that this legislation evidences Congress’
intent to deny broader § 101 utility patent protection for such plants.
C. DRUG APPROVAL 1075
Petitioners’ argument, however, is unavailing for two reasons. First,
nowhere does the PVPA purport to provide the exclusive statutory
means of protecting sexually reproduced plants. Second, the PVPA
and § 101 can easily be reconciled. Because it is harder to qualify for
a utility patent than for a Plant Variety Protection (PVP) certificate, it
only makes sense that utility patents would confer a greater scope of
protection.
At the time the PVPA was enacted, the PTO had already issued
numerous utility patents for hybrid plant processes. Many of these
patents, especially since the 1950’s, included claims on the products
of the patented process, i. e., the hybrid plant itself. Such plants were
protected as part of a hybrid process and not on their own. Nonethe-
less, these hybrids still enjoyed protection under § 101, which reaf-
firms that such material was within the scope of § 101.
Justice Breyer, with whom Justice Stevens joins, dissenting:
I believe that the words ”manufacture” or ”composition of ma er”
do not cover these plants. That is because Congress intended the two
more specific statutes to exclude patent protection under the Utility
Patent Statute for the plants to which the more specific Acts directly
refer.
C Drug Approval
The Food and Drug Administration oversees one of the most inten-
sive regulatory regimes in the whole of the U.S. Code. A ”new drug,” Cf. Anna B. Laakmann, A Property The-
for example, cannot be shipped in interstate commerce unless it has ory of Medical Innovation, 56 Jurimet-
rics J. 117 (2016); Robin Feldman, Reg-
gone through the FDA approval process. Why does this ma er to an
ulatory Property: The New IP, Colum. J.L.
IP course? First, because the structure of regulatory approval changes & Arts (forthcoming)
the IP strategies of actors affected by it. Second, because Congress There are similar but different regula-
has rewri en the patent laws to take account of the realities of regu- tory regimes for the approval of animal
latory approval for certain products. (Medtronic summarizes.) Third, drugs; of medical devices like syringes,
because the regulatory approval gateway is itself a source of IP-like pacemakers, and diagnostic tests; and
of "biological products" like vaccines,
rights, which can give one company the effectively exclusive right
blood plasma, and genetic therapies.
to use the information embedded in its drug product. And fourth, We focus on drugs in this section be-
because Congress has created entirely new forms of informational cause they illustrate all of the essential
exclusivity to deal with the wrinkles of the system. issues.
1 Patent Issues
The modern drug regulatory regime is, in one sense, oriented to-
wards patent as its preferred form of intellectual property. But its
demands have also compelled patent law to adapt to be er fit.
Kara B. Swanson 2011 Wisc. L. Rev. 331
Food and Drug Law as Intellectual Property Law
1076 CHAPTER 11. BIOTECHNOLOGY
Within the nineteenth-century food and drug markets, the predom-
inant use of intellectual property was to protect medicines. Patents
were not, however, the preferred means of protecting commercial in-
terests in medicines. Despite the use of the term ”patent medicines”
to describe nineteenth-century nostrums, only a small percentage of
medicines were patent-protected in the nineteenth century. What
were widely referred to as ”patent medicines” during the nineteenth
and early twentieth centuries were usually not patented. ”Patent
medicines” referred to proprietary medicines, medicines sold by only
one manufacturer, containing a secret combination of ingredients. A
historian of the entrepreneurs who sold such nostrums in the nine-
teenth and twentieth centuries has argued that only the least savvy
sought patent protection for their recipes.
No one but the manufacturer knew what was in the pills, liquids,
or ointments sold. When patients bought such medicines as self-
treatment, or, as often happened, when physicians prescribed them,
neither prescribing doctor nor patient knew what was being ingested.
Instead, both relied upon advertising copy about the powers of the
medicine and the recommended dosage.
Secrecy allowed the manufacturer to hide, for example, the fact
that the medicine contained mostly water, or common household in-
gredients, or significant amounts of alcohol, the revelation of which,
it was argued, would drive away consumers. Doctors and pharma-
cists further alleged that manufacturers had no compunction about
changing the ingredients of a medicine to respond to fluctuations in
prices of ingredients, while continuing to sell it under the same pack-
aging, using the secrecy of their formulas to disguise shifting com-
positions. Businessmen bought and sold trade names rather than se-
cret formulas, patents, or manufacturing know-how as they sought
to maximize profits.
Elite regular physicians contrasted proprietary medicines based
on secrecy against what they called ”ethical” medicines. These
medicines were the formulary medicines, known parts of the materia
medica. These medicines were listed in the United States Pharmacopeia
or the National Formulary, and, if mixtures, could be compounded by
any druggist based on published formulae. They, too, were sold un-
der brand names that could be protected as trademarks, but the brand
name identified the manufacturer, not the particular product. These
so-called ethical manufacturers who built businesses on supplying
doctors and pharmacists with consistent, good quality supplies of for-
mulary drugs were a small part of the drug market.” By the turn of the
twentieth century, as the campaign of regular physicians against pro-
prietary medicines gained strength, the ethical medicines were also
defined by their advertisement to physicians, rather than directly to
the public.
C. DRUG APPROVAL 1077
Regular physicians had long criticized the sale and use of propri-
etary medicines, even as medical journals accepted advertisements
from their manufacturers and many doctors wrote prescriptions for
such medicines. The critiques generally fell into three categories: (1)
such nostrums were sold for far more than the value of their ingre-
dients, and therefore were a fraud on the public’s pocketbook; (2)
such nostrums actively harmed their users by containing powerful
drugs such as morphine; and (3) such nostrums in no way fulfilled
the promises made on their labels and in their elaborate advertise-
ments, like claims to cure cancer, tuberculosis, and syphilis. At best,
consumers were being hoodwinked, and at worst, they were poison-
ing themselves and their children.
A campaign for comprehensive federal regulation began in
earnest in 1879, when the first federal food and drug bill was intro-
duced into Congress. From that year until 1906, such a bill was un-
successfully introduced into every Congress. The 1906 Act as finally
passed outlawed the interstate shipment of ”adulterated” or ”mis-
branded” food or drugs and their manufacture within the District of
Columbia and the territories.
The proprietary medicine manufacturers quickly reduced the
Act’s regulatory power to inhibit their business model by winning
the case United States v. Johnson. In his opinion, Justice Oliver Wen- Johnson: 221 U.S. 488 (1911)
dell Holmes declared that Congress had not intended to consider any
claims about therapeutic value made on product labels as false or mis-
leading, for such were merely ma ers of opinion, not susceptible to
examination by the Bureau of Chemistry. Thus, manufacturers could
continue to fill their labels with broad claims of cure. Congress at-
tempted to strengthen the regulation of false claims of therapeutic
value by passing the Sherley Amendment in 1912. This fix, however,
failed to fully correct the problem, as the courts interpreted the lan-
guage of the amendment prohibiting ”false and fraudulent” claims
to require a showing of intentional falsehood. While the FDA did
pursue egregious claims of cure, with so many testimonials as to the
value of their products, manufacturers could easily avoid a jury find-
ing of intentional falsehood.
After two decades of agitation and five years of effort within the
FDR administration, the new bill, the Federal Food, Drug, and Cos-
metic Act, passed in 1938. The new Act was much longer and more
detailed, as its drafters had sought to close perceived loopholes in the
first regulatory scheme. All drugs had to bear a label with ”an accu-
rate statement of the quantity of the contents in terms of weight, mea-
sure, or numerical count” as well as the name and address of the man-
ufacturer or distributer. Most significantly, for any non-formulary
drug, the ”common or usual name” of each active ingredient had
to be listed on the label. Finally, many ingredients of proprietary
1078 CHAPTER 11. BIOTECHNOLOGY
medicines would be revealed to the public, even if the exact formulae
were not.
From a contemporary perspective, we might assume that the pu-
rity campaign, as a campaign against trade secrets, would embrace
patents as a be er intellectual property regime. Patents are often un-
derstood as a complementary choice to trade secrets, offering a strong
limited-term monopoly in exchange for public disclosure. Today, we
are very familiar with the arguments for the use of patents to pro-
tect pharmaceuticals-patents allow a period of exclusive sales during
which time the originator of a new medicine reaps monopoly pricing
as a just reward for a large investment in research and development,
providing the necessary reward to incentivize the risky and expen-
sive process of drug development. Once the drug comes off patent,
other manufacturers can make and sell the same drug, causing the
price paid by consumers to drop.
In 1938, as the world of laboratory-created drugs was just emerg-
ing, this argument was not yet dominant. Instead, Americans, and
particularly American doctors and pharmacists, were familiar with
another argument regarding patents and medicines, an argument
that had persisted over the previous century. This older argument
described ”medical patents” – a term which lumped together any
patents to medicines, methods of treatment, and medical devices –
as unethical.
Yet, the new scientific ways of knowing had changed the land-
scape of both trade secrets and patents within the drug market.
Chemistry made keeping secrets from competitors much more diffi-
cult. The proprietary medicines could be analyzed and their contents
publicized. Manufacturers did not even necessarily need to do this
work themselves; the AMA did some of this analysis and publication
as part of its campaign against secrecy.
The remarkable aspect of the late 1930s in retrospect is not that
medical patents became commonplace, unopposed by both the ethi-
cal manufacturers and organized medicine, but that for a brief win-
dow of time, the medical profession envisioned medical patents al-
lowing a medically controlled drug marketplace. Rather than seeing
patents as an unmitigated evil, allowing the privatization of what
should be used for the public benefit, the medical profession saw
them as a way of increasing its own authority, a counterweight to the
profit-oriented firms and the useful, but medically uninformed, fed-
eral bureaucrats in the FDA and the patent office. Instead of patents
making medical professionals unethical, the control of patents by eth-
ical professionals would make patents, now perceived as necessary
aspects of a new, more complicated pharmacopeia, ethical.
Instead, through the federal food and drug regulation and the
new science, doctors traded a drug marketplace dominated by secret
C. DRUG APPROVAL 1079
proprietaries that offered li le therapeutic value for a drug market-
place dominated by new corporatized proprietaries that offered med-
ical miracles. Organized medicine had to be content with the control
it would increasingly gain as prescription drugs became a legal cat-
egory. As self-dosing became less common, doctors became the key
gatekeepers on the demand side of the burgeoning market in pharma-
ceuticals. During the course of the twentieth century, doctors gained
the ability to control their patient’s access to medications, but lost any
hope that doctors or medically controlled organizations would exer-
cise control over the supply side. What medications were available
for doctors to prescribe would be determined by the drug companies
and the FDA.
Merck KGaA v. Integra Lifesciences I, Ltd.
545 U.S. 193 2005)
The Federal Food, Drug, and Cosmetic Act (FDCA) regulates the
As amended at 21 U.S.C § 301 eq seq.
manufacture, use, or sale of drugs. Under the FDCA, a drugmaker
must submit research data to the FDA at two general stages of new-
drug development. First, a drugmaker must gain authorization to
conduct clinical trials (tests on humans) by submi ing an investiga-
tional new drug application (IND). The IND must describe ”preclin-
ical tests (including tests on animals) of the drug adequate to justify
the proposed clinical testing.” Second, to obtain authorization to mar- 21 U. S. C. § 355(i)(1)(A);
ket a new drug, a drugmaker must submit a new drug application
(NDA), containing ”full reports of investigations which have been
made to show whether or not the drug is safe for use and whether
the drug is effective in use.” Pursuant to FDA regulations, the NDA 21 U.S.C. § 355(b)(1)
must include all clinical studies, as well as preclinical studies related
to a drug’s efficacy, toxicity, and pharmacological properties.
Eli Lilly & Co. v. Medtronic, Inc.
496 U.S. 661 (1990)
Under federal law, a patent ”grant[s] to the patentee, his heirs or as-
signs, for the term of seventeen years, . . . the right to exclude others Now twenty years.
from making, using, or selling the invention throughout the United
States.” Except as otherwise provided, ”whoever without authority 35 U.S.C. § 154.
makes, uses or sells any patented invention, within the United States
during the term of the patent therefor, infringes the patent.”. The 35 U.S.C. § 271(a)
parties agree that the 1984 Act was designed to respond to two un-
intended distortions of the 17-year patent term produced by the re-
quirement that certain products must receive premarket regulatory
approval. First, the holder of a patent relating to such products would
as a practical ma er not be able to reap any financial rewards during
the early years of the term. When an inventor makes a potentially
useful discovery, he ordinarily protects it by applying for a patent
at once. Thus, if the discovery relates to a product that cannot be
marketed without substantial testing and regulatory approval, the
1080 CHAPTER 11. BIOTECHNOLOGY
”clock” on his patent term will be running even though he is not yet
able to derive any profit from the invention.
The second distortion occurred at the other end of the patent term.
In 1984, the Court of Appeals for the Federal Circuit decided that the
manufacture, use, or sale of a patented invention during the term of
the patent constituted an act of infringement, see § 271(a), even if it
was for the sole purpose of conducting tests and developing infor-
Roche v. Bolar: 733 F. 2d 858 (Fed. Cir. mation necessary to apply for regulatory approval. See Roche Prod-
1984) ucts, Inc. v. Bolar Pharmaceutical Co. Since that activity could not
be commenced by those who planned to compete with the paten-
tee until expiration of the entire patent term, the patentee’s de facto
monopoly would continue for an often substantial period until regu-
latory approval was obtained. In other words, the combined effect of
the patent law and the premarket regulatory approval requirement
was to create an effective extension of the patent term.
The Drug Price Competition and Patent Term Restoration Act of
Informally known as Hatch-Waxman, 1984 sought to eliminate this distortion from both ends of the patent
after its Congressional champions period. Section 201 of the Act established a patent-term extension for
patents relating to certain products that were subject to lengthy regu-
latory delays and could not be marketed prior to regulatory approval.
The eligible products were described as follows:
35 U.S.C. § 156(f ) (2016). NB: the
(1) The term ‘product’ means:
language has been amended since
Medtronic; this is the current version. (A) A human drug product.
(B) Any medical device, food additive, or color additive sub-
ject to regulation under the Federal Food, Drug, and Cos-
metic Act.
(2) The term ‘human drug product’ means the active ingredient of
–
(A) a new drug, antibiotic drug, or human biological product
(as those terms are used in the Federal Food, Drug, and
Cosmetic Act and the Public Health Service Act), or
(B) a new animal drug or veterinary biological product (as
those terms are used in the Federal Food, Drug, and Cos-
metic Act and the Virus-Serum-Toxin Act) …
Section 201 provides that patents relating to these products can be ex-
tended up to five years if, inter alia, the product was ”subject to a reg-
ulatory review period before its commercial marketing or use,” and
”the permission for the commercial marketing or use of the product
after such regulatory review period [was] the first permi ed commer-
cial marketing or use of the product under the provision of law under
which such regulatory review period occurred.”
The distortion at the other end of the patent period was addressed
by § 202 of the Act. That added to the provision prohibiting patent in-
C. DRUG APPROVAL 1081
fringement, the paragraph at issue here, establishing that ”it shall not 35 U.S.C. § 271(e)(1)
be an act of infringement to make, use, or sell a patented invention …
solely for uses reasonably related to the development and submission
of information under a Federal law which regulates the manufacture,
use, or sale of drugs.” This allows competitors, prior to the expiration
of a patent, to engage in otherwise infringing activities necessary to
obtain regulatory approval.
The core of the present controversy is that petitioner interprets the
statutory phrase, ”a Federal law which regulates the manufacture,
use, or sale of drugs,” to refer only to those individual provisions
of federal law that regulate drugs, whereas respondent interprets it
to refer to the entirety of any Act (including, of course, the FDCA)
at least some of whose provisions regulate drugs. If petitioner is cor-
rect, only such provisions of the FDCA as § 505, governing premarket
approval of new drugs, are covered by § 271(e)(1), and respondent’s
submission of information under FDCA § 515, governing premarket
approval of medical devices, would not be a noninfringing use.
It seems most implausible to us that Congress, being demonstra-
bly aware of the dual distorting effects of regulatory approval require-
ments in this entire area – dual distorting effects that were roughly
offse ing, the disadvantage at the beginning of the term producing a
more or less corresponding advantage at the end of the term – should
choose to address both those distortions only for drug products; and Merck v. Integra is to similar effect:
for other products named in § 201 should enact provisions which not § 271(e) protects "uses of patented in-
ventions in preclinical research, the re-
only leave in place an anticompetitive restriction at the end of the
sults of which are not ultimately in-
monopoly term but simultaneously expand the monopoly term itself, cluded in a submission to the FDA."
thereby not only failing to eliminate but positively aggravating distor-
tion of the 17-year patent protection. It would take strong evidence
to persuade us that this is what Congress wrought, and there is no
such evidence here.
2 Hatch-Waxman
A firm that develops a new (or ”pioneer”) drug has a regulatory ad-
vantage: following approval of its NDA, no other firm is legally al-
lowed to market the drug. A generic firm could of course submit its
own NDA. This would probably be faster and cheaper than the pio-
neer firm’s NDA: after all, it would know what drug to test and write
up. But it would still be slow and expensive, because it would require
a full course of clinical testing and regulatory filing. So some firms
tried to argue that generic drugs required no new approval from the
FDA (Generix).
In 1984, Congress enacted a grand bargain between pioneer and
generic firms commonly known as Hatch-Waxman that alters this
baseline in several important ways:
1082 CHAPTER 11. BIOTECHNOLOGY
1. It gives generic firms the option of filing an ”abbreviated” NDA,
or ANDA, in place of a full NDA based on new clinical trials
(Actavis).
2. It then prohibits the FDA from approving ANDAs during cer-
tain statutory exclusivity periods. Actavis Elizabeth illustrates,
and Erika Lie an discusses.
3. It creates specialized procedures to sort out conflicting claims
over patents potentially reading on generic drugs (Caraco).
4. Finally, it gives a limited form of exclusivity to generic drug
firms who successfully challenge patents: 180 days during
which no other ANDA can be approved for the same product.
FTC v. Actavis illustrates the economic significance of this ex-
clusivity.
United States v. Generix Drug Corp.
460 U.S. 453 (1983)
The active ingredients in most prescription drugs constitute less than
10% of the product; inactive ”excipients” (such as coatings, binders,
and capsules) constitute the rest. The term ”generic drug” is used to
describe a product that contains the same active ingredients but not
necessarily the same excipients as a so-called ”pioneer drug” that is
marketed under a brand name.1 Respondent Generix is a distributor
of generic drugs manufactured by other firms.
The Government initiated this action to enjoin Generix from dis-
tributing in interstate commerce a number of generic drug products
that contain eight specified active ingredients. It alleged that the FDA
had never approved new drug applications with respect to any of
those products.
The Court of Appeals for the Fifth Circuit, now the Eleventh Cir-
cuit held that the statutory prohibition against the sale of a ”new
drug” without prior approval does not apply to a drug product hav-
ing the same active ingredients as a previously approved drug prod-
uct, regardless of any differences in excipients. It based that con-
clusion on its view that the statutory requirement of evaluating the
safety and effectiveness of new drugs must normally relate to active
ingredients, because the precise technique of formulating the finished
drug is not part of the information generally known to the medical or
scientific community. Moreover, it believed that the legislative his-
tory suggested that Congress had not intended to create a product-
by-product licensing system.
1
Generic drugs, also called ”copycat” or ”me-too” drugs, are usually marketed
at relatively low prices because their manufacturers do not incur the research, de-
velopment, and promotional costs normally associated with the creation and mar-
keting of an original product.
C. DRUG APPROVAL 1083
The Court of Appeals misread the statutory text. Generic drug
products are quite plainly drugs within the meaning of the FDCA.
FTC v. Actavis, Inc.
133 S. Ct. 2223 (2013)
A drug manufacturer, wishing to market a new prescription drug,
must submit a New Drug Application to the federal Food and Drug
Administration and undergo a long, comprehensive, and costly test-
ing process, after which, if successful, the manufacturer will receive
marketing approval from the FDA. See 21 U.S.C. § 355(b)(1) (requir-
ing, among other things, ”full reports of investigations” into safety
and effectiveness; ”a full list of the articles used as components”; and
a ”full description” of how the drug is manufactured, processed, and
packed).
Once the FDA has approved a brand-name drug for marketing,
a manufacturer of a generic drug can obtain similar marketing ap-
proval through use of abbreviated procedures. The Hatch-Waxman
Act permits a generic manufacturer to file an Abbreviated New Drug
Application specifying that the generic has the same active ingredi-
ents as and is biologically equivalent to, the already-approved brand-
name drug. In this way the generic manufacturer can obtain approval
while avoiding the costly and time-consuming studies needed to ob-
tain approval for a pioneer drug. The Hatch-Waxman process, by
allowing the generic to piggy-back on the pioneer’s approval efforts,
speeds the introduction of low-cost generic drugs to market, thereby
furthering drug competition.
Actavis Elizabeth LLC v. U.S. Food and Drug Admin.
625 F.3d 760 (D.C. Cir. 2010)
The Hatch–Waxman Amendments allowed generic versions of previ-
ously approved drugs to gain approval through the submission of an
ANDA. These abbreviated applications reduce the effort required to
gain marketing approval by, among other things, allowing the appli-
cant to rely on clinical studies submi ed as part of a previous new
drug application.
The Hatch–Waxman Amendments also grant various periods of
marketing exclusivity to certain pioneer drugs. The exclusivity pro-
visions protect these drugs from generic competition for the specified
terms by preventing the submission of abbreviated applications that
refer to them.
If an application submi ed under subsection (b) of this 21 U.S.C § 355(j)(5)(f )(ii)
section for a drug, no active ingredient (including any es-
ter or salt of the active ingredient) of which has been ap-
proved in any other application under subsection (b) of
this section, is approved after September 24, 1984, no ap-
plication may be submi ed under this subsection which
1084 CHAPTER 11. BIOTECHNOLOGY
refers to the drug for which the subsection (b) application
was submi ed before the expiration of five years from the
21 U.S.C. § 355(j)(5)(F)(iii)
date of the approval …
The Best Pharmaceuticals for Children In addition to this five-year period, the Amendments grant three-year
Act gives six moths of additional exclu- exclusivity to drugs that include previously approved active ingredi-
sivity if the applicant conducts certain
ents if the application for the drug “contains. reports of new clinical
require forms of pediatric testing. See
21 U.S.C. § 355a.
investigations … essential to the approval of the application and con-
21 C.F.R. § 314.108(a) & (b)(2)) ducted or sponsored by the applicant.”
The FDA has implemented these exclusivity provisions through
regulations. The regulations give five years of exclusivity for each
“drug product that contains a new chemical entity.”. A “new chem-
ical entity” is “a drug that contains no active moiety that has been
approved by FDA in any other” new drug application. “Active moi-
ety” is defined as “the molecule or ion … responsible for the physi-
ological or pharmacological action of the drug substance.” [Various
related forms of molecules or ions, including esters, salts, and other
forms that differ only in their noncovalent bonds, are considered to
be the same ”active moiety.”]
In 2007, the Food and Drug Administration approved Vyvanse, a
Lisdexamfetamine name-brand drug for the treatment of a ention deficit hyperactivity
disorder. Two years later, Actavis submi ed an application for lisdex-
amfetamine dimesylate, a generic version of the same drug. The FDA
returned Actavis’ application. It did so because it had previously de-
termined that Vyvanse was entitled to five years of marketing exclu-
sivity under the Hatch-Waxman Amendments to the Federal Food,
Drug, and Cosmetic Act. Actavis brought this action claiming that
Vyvanse was not entitled to five years of exclusivity.
Lisdexamfetamine dimesylate is a salt of lisdexamfetamine. Since,
under the agency’s regulations, salts are not considered active
moieties, the agency’s analysis centered on the lisdexamfetamine
molecule alone. Lisdexamfetamine consists of a portion of lysine, a
Lysine common amino acid, connected to dextroamphetamine. These two
parts are linked by [a covalent bond]. Once it enters the body, lisdex-
amfetamine undergoes a chemical conversion to produce dextroam-
phetamine.
Actavis thinks this language [quoted above] prevents the FDA
from granting five-year exclusivity to any drug containing a drug
molecule (such as lisdexamfetamine) that eventually produces a pre-
viously approved drug molecule in the body.
Actavis relies mainly on the term “active ingredient,” which it
says obligates the FDA to identify the particular drug molecule that
reaches the “site” of the drug’s action. This molecule, Actavis argues,
is necessarily the “active ingredient” of the drug in question, regard-
Dextroamphetamine
less of the form of the molecule before it enters the body. But there
C. DRUG APPROVAL 1085
is nothing to indicate that Congress used the term in the sense Ac-
tavis urges. The Hatch–Waxman Amendments do not define active
ingredient. The legislative history establishes only that Congress was
concerned with providing incentives for innovation by granting five-
year exclusivity to “new chemical entities” and is silent on what de-
termines novelty.
Actavis argues that by using the term “active,” Congress was re-
quiring the FDA to determine the particular molecule that provides
the drug’s “activity,” which it claims is limited to the drug’s specific
therapeutic effect. If this molecule has been previously approved,
then five-year exclusivity is not warranted. But the FDA is right—or
at least we have been given no reason to doubt – that the activity of
a drug cannot be reduced to such a simple formulation. The agency
has concluded that the entire pre-ingestion drug molecule should be
deemed responsible for the drug’s activity, which can include its “dis-
tribution within the body, its metabolism, its excretion, or its toxic-
ity.” There is no reason to believe Congress thought differently – or
thought about it at all.
In the FDA’s view, drug derivatives such as lisdexamfetamine are
“major innovations” deserving five-year exclusivity. The FDA’s reg-
ulations leave many types of drug derivatives eligible only for three-
year exclusivity. The FDA’s policy is based on its view that drug
derivatives containing covalent bonds are, on the whole, distinct from
other types of derivative drugs such that the former are uniquely de-
serving of “new chemical entity” status and the resulting five-year
exclusivity. We are hard pressed to second-guess the FDA’s view,
especially since it rests on the agency’s evaluations of scientific data
within its area of expertise. At best, Actavis has offered evidence that Note that Hatch-Waxman NCE active-
some covalent structural changes do not alter the basic properties of ingredient exclusivity applies only to
ANDAs. Actavis remained free to sub-
the drug in question and that some noncovalent structural changes
mit a full NDA in support of its proposal
do. But agencies may employ bright-line rules for reasons of admin- to market lisdexamfetamine dimesy-
istrative convenience, so long as those rules fall within a zone of rea- late.
sonableness and are reasonably explained. The FDA has explained
that its policy is based in part on the “difficulty in determining pre-
cisely which molecule, or portion of a molecule, is responsible for a
drug’s effects.” Nothing in the record establishes that the FDA’s ap-
proach is unreasonable. Given the complexity of the statutory regime,
we defer to the agency’s interpretation.
Erika Lietzan 20 Lewis & Clark L. Rev. 91 (2016)
The Myths of Data Exclusivity
The conventional narrative indicates that data exclusivity is affirma- Lietzan defines data exclusivity as "pro-
tively provided by the state—the subtext being that the natural state hibitions on submission or approval of
abbreviated applications, which implic-
of affairs is one without data exclusivity. Many legal scholars and itly or explicitly rely on previously sub-
policy writers describe data exclusivity as comparable to intellectual mitted data."
1086 CHAPTER 11. BIOTECHNOLOGY
property, as patent-like, or even as a sub-type of intellectual prop-
erty. The innovative industry also tends to characterize it as a type of
intellectual property. Both economic and legal scholars analogize to
monopoly when describing market conditions during data exclusiv-
ity – the subtext again being that natural competition has been affir-
matively blocked by the State. The key to the conventional narrative
is that exclusivity is artificial and provided, as a benefit, to pioneers.
But there is another way to understand what is going on. The gov-
ernment requires a license to market new drugs, which it will issue
after reviewing the results of research to support the marketability
of the drug. Anyone may apply for a license, and indeed – subject
to any relevant patent protection one or another of the companies
might enjoy as well as their business judgment about the value of the
investment – multiple companies may file for licenses to market the
same drug or drugs that are similar. That is to say, the drug approval
statutes – the regulatory apparatuses – do not preclude two, or three
or more applicants from seeking approval of the same thing on the
same terms. From a regulatory perspective, all face the same scientific
burden – preclinical and clinical research in a full application, show-
ing the finished product is safe and effective. The second and third
applicant will have a reduced burden as a practical ma er simply
because approval of the first product – and the large volume of infor-
mation released about the contents of the application – will eliminate
much of the trial and error that the first applicant experienced. They
will know what to study and what not to study, they will know how
to design their trials, they will know what results to expect, and they
can reverse engineer the first entrant’s product to determine a suit-
able formulation, route of administration, dosage form, and strength.
All of this will save these applicants some time and money, but the
bulk of their expenses remain, deriving from the clinical trials that
What does the FDA's new drug ap- must still be performed to obtain a license.
proval process look like from a trade- After a period of time, federal law permits other companies to
secret point of view? Does this help ex-
obtain licenses for identical or highly similar medicines without the
plain the term "data exclusivity?
same amount of supporting research. The drug approval statutes re-
move the high evidentiary hurdle and substitute a different one, with
a significantly lower investment requirement. A license to market
is now available for the price of comparative analytical testing and
perhaps modest comparative clinical testing. As a scientific ma er,
these follow-on applicants are able to obtain licenses because they
rely on the research performed by the earlier applicant. That these
are reliance-based applications should not be controversial. FDA has
conceded that as a regulatory ma er a follow- on applicant uses the
first entrant’s research, even if sometimes couching it as using the
“fact” of the first entrant’s approval. Many courts charac- terizing
generic drug approval use the same language. In brief, then, once
C. DRUG APPROVAL 1087
data exclusivity expires, any applicant may justify market entry us-
ing the research paid for and submi ed by the pioneer to justify its
own entry to the market. This reframes data exclusivity as a period
before the law gives the pioneer’s competitors something not previ-
ously available to them – a faster and cheaper license, resulting from
permission to rely on the pioneer’s research.
When the narrative is recast, the central myth of exclusivity is ex-
posed; it is not a grant of anything to anyone. Data exclusivity is the
absence of an abbreviated pathway. It does not prevent subsequent en-
trants from doing exactly what the first entrant did—developing the
product, testing it, submi ing a full application, and launching the
drug, subject to relevant patent and business considerations. Con-
trasting data exclusivity with market exclusivity should make this Lietzan defines market exclusivity
clear. as "prohibitions on submission or
approval of any competing appli-
Orphan-drug exclusivity is the main example in current U.S. law
cation, even if supported by a full
of market exclusivity. An orphan drug is intended to treat a rare dis- complement of original data."
ease or condition; the sponsor makes this showing by demonstrating
that the dis- ease affects fewer than 200,000 persons in this country or
that the com- pany does not expect to recover its costs of research and
development when marketing the product. If a drug has been desig-
nated as an orphan drug, then – upon approval – it is entitled to seven
years of market exclusivity. This means the FDA may not approve the
same drug for the same condition for seven years, even if proposed
in a full application supported by original research. Orphan-drug ex-
clusivity is an affirmatively granted right, in the sense that it prevents
subsequent entrants from doing what they would ordinarily and oth-
erwise be permi ed to do – study the molecule themselves and reach
the market on the same terms as the first entrant.
Caraco Pharmaceutical Labs v. Novo Nordisk 132 S. Ct. 1670 (2012)
Because the FDA cannot authorize a generic drug that would infringe
a patent, the timing of an ANDA’s approval depends on the scope
and duration of the patents covering the brand-name drug. Those
patents come in different varieties. One type protects the drug com-
pound itself. Another kind – the one at issue here – gives the brand
manufacturer exclusive rights over a particular method of using the
drug. In some circumstances, a brand manufacturer may hold such
a method-of-use patent even after its patent on the drug compound
has expired.
To facilitate the approval of generic drugs as soon as patents allow,
the Hatch-Waxman Amendments and FDA regulations direct brand
manufacturers to file information about their patents. The statute
mandates that a brand submit in its NDA ”the patent number and 21 U.S.C. S S 355(b)(1)
the expiration date of any patent which claims the drug for which
the [brand] submi ed the [NDA] or which claims a method of using
1088 CHAPTER 11. BIOTECHNOLOGY
such drug.” And the regulations issued under that statute require
that, once an NDA is approved, the brand provide a description of
any method-of-use patent it holds. That description is known as a use
code, and the brand submits it on FDA Form 3542. As later discussed,
the FDA does not a empt to verify the accuracy of the use codes that
brand manufacturers supply. It simply publishes the codes, along
with the corresponding patent numbers and expiration dates, in a
fat, brightly hued volume called the Orange Book (less colorfully but
more officially denominated Approved Drug Products with Thera-
peutic Equivalence Evaluations).
After consulting the Orange Book, a company filing an ANDA
must assure the FDA that its proposed generic drug will not infringe
the brand’s patents. When no patents are listed in the Orange Book or
all listed patents have expired (or will expire prior to the ANDA’s ap-
proval), the generic manufacturer simply certifies to that effect. Oth-
erwise, the applicant has two possible ways to obtain approval.
One option is to submit a so-called section viii statement, which
asserts that the generic manufacturer will market the drug for one or
more methods of use not covered by the brand’s patents. A section
viii statement is typically used when the brand’s patent on the drug
compound has expired and the brand holds patents on only some
approved methods of using the drug. If the ANDA applicant follows
this route, it will propose labeling for the generic drug that ”carves
out” from the brand’s approved label the still-patented methods of
use. The FDA may approve such a modified label as an exception
to the usual rule that a generic drug must bear the same label as the
brand-name product. FDA acceptance of the carve-out label allows
the generic company to place its drug on the market (assuming the
ANDA meets other requirements), but only for a subset of approved
uses – i.e., those not covered by the brand’s patents.
Of particular relevance here, the FDA will not approve such an
ANDA if the generic’s proposed carve-out label overlaps at all with
the brand’s use code. The FDA takes that code as a given: It does
not independently assess the patent’s scope or otherwise look behind
the description authored by the brand. According to the agency, it
lacks ”both the expertise and the authority” to review patent claims;
although it will forward questions about the accuracy of a use code to
the brand, its own ”role with respect to patent listing is ministerial.”
Thus, whether section viii is available to a generic manufacturer de-
pends on how the brand describes its patent. Only if the use code pro-
vides sufficient space for the generic’s proposed label will the FDA
approve an ANDA with a section viii statement.
The generic manufacturer’s second option is to file a so-called
paragraph IV certification, which states that a listed patent ”is in-
valid or will not be infringed by the manufacture, use, or sale of the
C. DRUG APPROVAL 1089
[generic] drug.”. A generic manufacturer will typically take this path 21 U.S.C. S 355(j)(2)(A)(vii)(IV)
in either of two situations: if it wants to market the drug for all uses,
rather than carving out those still allegedly under patent; or if it dis-
covers, as described above, that any carve-out label it is willing to
adopt cannot avoid the brand’s use code. Filing a paragraph IV certi-
fication means provoking litigation. The patent statute treats such a
filing as itself an act of infringement, which gives the brand an imme-
diate right to sue.. Assuming the brand does so, the FDA generally 35 U.S.C. S 271(e)(2)(A)
may not approve the ANDA until 30 months pass or the court finds
the patent invalid or not infringed. Accordingly, the paragraph IV
process is likely to keep the generic drug off the market for a lengthy
period, but may eventually enable the generic company to market its
drug for all approved uses.
In the late 1990’s, evidence mounted that some brands were ex-
ploiting this statutory scheme to prevent or delay the marketing of
generic drugs, and the Federal Trade Commission (FTC) soon issued
a study detailing these anticompetitive practices. That report focused
a ention on brands’ submission of inaccurate patent information to
the FDA. In one case cited by the FTC, Mylan Pharmaceuticals, Inc. v. Mylan v. THompson: 268 F.3d 1323 (Fed.
Thompson, a brand whose original patent on a drug was set to expire Cir. 2001)
listed a new patent ostensibly extending its rights over the drug, but
in fact covering neither the compound nor any method of using it.
The FDA, as was (and is) its wont, accepted the listing at its word
and accordingly declined to approve a generic product. The generic
manufacturer sued to delete the improper listing from the Orange
Book, but the Federal Circuit held that the Hatch-Waxman Amend-
ments did not allow such a right of action. As the FTC noted, that
ruling meant that the only option for generic manufacturers in My-
lan’s situation was to file a paragraph IV certification (triggering an
infringement suit) and then wait out the usual 30-month period be-
fore the FDA could approve an ANDA.
Congress responded to these abuses by creating a mechanism, in 21 U.S.C. S 355(j)(5)(C)(ii)(I)
the form of a legal counterclaim, for generic manufacturers to chal- Justice Kagan's statutory construction
lenge patent information a brand has submi ed to the FDA. The pro- discussion makes for entertaining read-
vision authorizes an ANDA applicant sued for patent infringement ing but would take us too far afield.
to ”assert a counterclaim seeking an order requiring the [brand] to Here's a sample: "'Not an' sometimes
means 'not any,' in the way Novo claims.
correct or delete the patent information submi ed by the [brand] un-
If your spouse tells you he is late be-
der subsection (b) or (c) [of S 355] on the ground that the patent does cause he 'did not take a cab,' you will in-
not claim either (aa) the drug for which the [brand’s NDA] was ap- fer that he took no cab at all (but took
proved; or (bb) an approved method of using the drug.” the bus instead). But now stop a mo-
The counterclaim thus enables a generic competitor to obtain a ment. Suppose your spouse tells you
that he got lost because he 'did not
judgment directing a brand to ”correct or delete” certain patent in-
make a turn.' You would understand
formation that is blocking the FDA’s approval of a generic product. that he failed to make a particular turn,
This case raises the question whether the counterclaim is available to not that he drove from the outset in a
fix a brand’s use code. straight line."
1090 CHAPTER 11. BIOTECHNOLOGY
The text and context of the provision demonstrate that a generic
company can employ the counterclaim to challenge a brand’s over-
broad use code. The Hatch-Waxman Amendments authorize the
FDA to approve the marketing of a generic drug for particular un-
patented uses; and section viii provides the mechanism for a generic
company to identify those uses, so that a product with a label match-
ing them can quickly come to market. The statutory scheme, in other
words, contemplates that one patented use will not foreclose market-
ing a generic drug for other unpatented ones. Within that framework,
the counterclaim naturally functions to challenge the brand’s asser-
tion of rights over whichever discrete use (or uses) the generic com-
pany wishes to pursue. That assertion, after all, is the thing blocking
the generic drug’s entry on the market. The availability of the counter-
claim thus matches the availability of FDA approval under the statute:
A company may bring a counterclaim to show that a method of use
is unpatented because establishing that fact allows the FDA to autho-
rize a generic drug via section viii.
Consider the point as applied to this case. Caraco wishes to mar-
ket a generic version of repaglinide for two (and only two) uses.
Under the statute, the FDA could approve Caraco’s application so
long as no patent covers those uses, regardless whether a patent pro-
tects yet a third method of using the drug. Novo agrees that Caraco
could bring a counterclaim if Novo’s assertion of patent protection for
repaglinide lacked any basis – for example, if Novo held no patent,
yet claimed rights to the pair of uses for which Caraco seeks to mar-
ket its drug. But because Novo has a valid patent on a different use,
Novo argues that Caraco’s counterclaim evaporates. And that is so
even though, once again, Caraco has no wish to market its product for
that patented use and the FDA stands ready, pursuant to the statute,
to approve Caraco’s product for the other two. To put the ma er sim-
ply, Novo thinks the counterclaim disappears because it has a patent
for a method of use in which neither Caraco nor the FDA is interested
at all.
Another aspect of the counterclaim provision – its description
of available remedies–dispatches whatever remains of Novo’s argu-
ments. According to the statute, a successful claimant may obtain
an order requiring the brand to ”correct or delete” its patent infor-
mation. Our interpretation of the statute gives content to both those
remedies: It deletes a listing from the Orange Book when the brand
holds no relevant patent and corrects the listing when the brand has
misdescribed the patent’s scope. By contrast, Novo’s two arguments
would all but read the term ”correct” out of the statute.
FTC v. Actavis, Inc.
133 S.Ct. 2223 (2013)
C. DRUG APPROVAL 1091
Company A sues Company B for patent infringement. The two com-
panies se le under terms that require (1) Company B, the claimed in-
fringer, not to produce the patented product until the patent’s term
expires, and (2) Company A, the patentee, to pay B many millions
of dollars. Because the se lement requires the patentee to pay the al-
leged infringer, rather than the other way around, this kind of se le-
ment agreement is often called a ”reverse payment” se lement agree-
ment. And the basic question here is whether such an agreement can
sometimes unreasonably diminish competition in violation of the an-
titrust laws.
Apparently most if not all reverse payment se lement agreements
arise in the context of pharmaceutical drug regulation, and specifi-
cally in the context of suits brought under statutory provisions allow-
ing a generic drug manufacturer (seeking speedy marketing approval
[under an ANDA]) to challenge the validity of a patent owned by an
already-approved brand-name drug owner.
The Hatch-Waxman Act requires the generic manufacturer in its
Abbreviated New Drug Application to ”assure the FDA” that the
generic ”will not infringe” the brand-name’s patents. The generic
can provide this assurance in one of several ways.. It can certify that 21 U.S.C. § 355(j)(2)(A)(vii)
the brand-name manufacturer has not listed any relevant patents. It
can certify that any relevant patents have expired. It can request ap-
proval to market beginning when any still-in-force patents expire.
Or, it can certify that any listed, relevant patent ”is invalid or will
not be infringed by the manufacture, use, or sale” of the drug de-
scribed in the Abbreviated New Drug Application. Taking this last-
mentioned route (called the ”paragraph IV” route), automatically
counts as patent infringement, and often means provoking litigation. 35 U.S.C. § 271(e)(2)(A)
If the brand-name patentee brings an infringement suit within 45
days, the FDA then must withhold approving the generic, usually
for a 30-month period, while the parties litigate patent validity (or
infringement) in court. If the courts decide the ma er within that
period, the FDA follows that determination; if they do not, the FDA
may go forward and give approval to market the generic product.
Hatch-Waxman provides a special incentive for a generic to be
the first to file an ANDA taking the paragraph IV route. That ap-
plicant will enjoy a period of 180 days of exclusivity (from the first
commercial marketing of its drug). During that period of exclusiv- 21 U.S.C § 355(j)(5)(B)(iv)
ity no other generic can compete with the brand-name drug. If the
first-to-file generic manufacturer can overcome any patent obstacle
and bring the generic to market, this 180-day period of exclusivity
can prove valuable, possibly worth several hundred million dollars.
Indeed, the Generic Pharmaceutical Association said in 2006 that the
”vast majority of potential profits for a generic drug manufacturer
materialize during the 180-day exclusivity period.” The 180-day ex-
1092 CHAPTER 11. BIOTECHNOLOGY
clusivity period, however, can belong only to the first generic to file.
Should that first-to-file generic forfeit the exclusivity right in one of
the ways specified by statute, no other generic can obtain it.
In 1999, Solvay Pharmaceuticals, a respondent here, filed a New
Drug Application for a brand-name drug called AndroGel. The FDA
approved the application in 2000. In 2003, Solvay obtained a relevant
patent and disclosed that fact to the FDA, as Hatch-Waxman requires.
Later the same year another respondent, Actavis, Inc. (then
known as Watson Pharmaceuticals), filed an Abbreviated New Drug
Application for a generic drug modeled after AndroGel. [Other par-
ties omi ed.] Solvay initiated paragraph IV patent litigation against
Actavis and Paddock. Thirty months later the FDA approved Ac-
tavis’ first-to-file generic product, but, in 2006, the patent-litigation
parties all se led. Under the terms of the se lement Actavis agreed
that it would not bring its generic to market until August 31, 2015,
65 months before Solvay’s patent expired (unless someone else mar-
keted a generic sooner). Actavis also agreed to promote AndroGel to
urologists. Solvay agreed to pay an estimated $19-$30 million annu-
ally, for nine years, to Actavis. The companies described these pay-
ments as compensation for other services Actavis promised to per-
form, but the FTC contends the other services had li le value. Ac-
cording to the FTC the true point of the payments was to compensate
Actavis for agreeing not to compete against AndroGel until 2015.
On January 29, 2009, the FTC filed this lawsuit against all the set-
tling parties. The FTC’s complaint alleged that respondents violated
15 U.S.C. § 45 § 5 of the Federal Trade Commission Act by unlawfully agreeing ”to
share in Solvay’s monopoly profits, abandon their patent challenges,
and refrain from launching their low-cost generic products to com-
pete with AndroGel for nine years.”
Solvay’s patent, if valid and infringed, might have permi ed it
to charge drug prices sufficient to recoup the reverse se lement pay-
ments it agreed to make to its potential generic competitors. And we
are willing to take this fact as evidence that the agreement’s anticom-
petitive effects fall within the scope of the exclusionary potential of
the patent. But we do not agree that that fact, or characterization, can
immunize the agreement from antitrust a ack.
This Court’s precedents make clear that patent-related se lement
agreements can sometimes violate the antitrust laws. For one thing,
to refer simply to what the holder of a valid patent could do does not
by itself answer the antitrust question. The patent here may or may
not be valid, and may or may not be infringed. And that exclusion
may permit the patent owner to charge a higher-than-competitive
price for the patented product. But an invalidated patent carries with
it no such right. And even a valid patent confers no right to exclude
products or processes that do not actually infringe. The paragraph
C. DRUG APPROVAL 1093
IV litigation in this case put the patent’s validity at issue, as well as
its actual preclusive scope. The parties’ se lement ended that litiga-
tion. The FTC alleges that in substance, the plaintiff agreed to pay the
defendants many millions of dollars to stay out of its market, even
though the defendants did not have any claim that the plaintiff was
liable to them for damages. That form of se lement is unusual. There
is reason for concern that se lements taking this form tend to have
significant adverse effects on competition.
Given these factors, it would be incongruous to determine an-
titrust legality by measuring the se lement’s anticompetitive effects
solely against patent law policy, rather than by measuring them
against procompetitive antitrust policies as well. Rather, the general
procompetitive thrust of the Hatch-Waxman Act, its specific provi-
sions facilitating challenges to a patent’s validity, and its later-added
provisions requiring parties to a patent dispute triggered by a para-
graph IV filing to report se lement terms to the FTC and the Antitrust
Division of the Department of Justice, all suggest the contrary.
But, one might ask, as a practical ma er would the parties be able
to enter into such an anticompetitive agreement? Would not a high
reverse payment signal to other potential challengers that the paten-
tee lacks confidence in its patent, thereby provoking additional chal-
lenges, perhaps too many for the patentee to ”buy off?” Two special
features of Hatch-Waxman mean that the answer to this question is
”not necessarily so.” First, under Hatch-Waxman only the first chal-
lenger gains the special advantage of 180 days of an exclusive right
to sell a generic version of the brand-name product. And as noted,
that right has proved valuable – indeed, it can be worth several hun-
dred million dollars. Subsequent challengers cannot secure that ex-
clusivity period, and thus stand to win significantly less than the first
if they bring a successful paragraph IV challenge. That is, if subse-
quent litigation results in invalidation of the patent, or a ruling that
the patent is not infringed, that litigation victory will free not just the
challenger to compete, but all other potential competitors too (once
they obtain FDA approval). The potential reward available to a sub-
sequent challenger being significantly less, the patentee’s payment
to the initial challenger (in return for not pressing the patent chal-
lenge) will not necessarily provoke subsequent challenges. Second,
a generic that files a paragraph IV after learning that the first filer
has se led will (if sued by the brand-name) have to wait out a stay
period of (roughly) 30 months before the FDA may approve its ap-
plication, just as the first filer did. These features together mean that
a reverse payment se lement with the first filer removes from con-
sideration the most motivated challenger, and the one closest to in-
troducing competition. It may well be that Hatch-Waxman’s unique
regulatory framework, including the special advantage that the 180-
1094 CHAPTER 11. BIOTECHNOLOGY
day exclusivity period gives to first filers, does much to explain why
in this context, but not others, the patentee’s ordinary incentives to
resist paying off challengers (i.e., the fear of provoking myriad other
challengers) appear to be more frequently overcome.
The FTC urges us to hold that reverse payment se lement agree-
ments are presumptively unlawful and that courts reviewing such
agreements should proceed via a ”quick look” approach, rather than
applying a ”rule of reason.” We decline to do so. That is because
the likelihood of a reverse payment bringing about anticompetitive
effects depends upon its size, its scale in relation to the payor’s an-
ticipated future litigation costs, its independence from other services
for which it might represent payment, and the lack of any other con-
vincing justification. The existence and degree of any anticompetitive
consequence may also vary as among industries. These complexities
lead us to conclude that the FTC must prove its case as in other rule-
of-reason cases.
To say this is not to insist that the Commission need litigate the
patent’s validity, empirically demonstrate the virtues or vices of the
patent system, present every possible supporting fact or refute every
possible pro-defense theory. We leave to the lower courts the struc-
turing of the present rule-of-reason antitrust litigation.
3 Orphan Drugs
Lie an contrasts the ”data exclusivity” granted to pioneer drugs to
the ”market exclusivity” granted to orphan drugs. This section con-
siders the orphan-drug exclusivity in more detail. Because it pro-
hibits any subsequent NDA, it is in effect a true IP regime that gives
patent-like protection for the only economically significant use of a
product.
Genentech, Inc. v. Bowen
676 F. Supp. 301 (D.D.C. 1987)
As food and drug regulatory statues go, the Orphan Drug Act is rela-
tively straightforward and politically uncontroversial. A pharmaceu-
tical company often must spend $80 million or more to develop a sin-
gle new drug. When the potential market for a drug is small – because
the number of persons afflicted with the particular disease or condi-
tion which the drug treats is relatively small – it may be impossible
for the manufacturer to recover its sizable research and development
investment, much less realize an acceptable return on that investment.
The Act is designed to combat the general unwillingness of pharma-
ceutical manufacturers to invest in the development of commercial
drugs for the treatment of diseases which, although devastating to
their victims, afflict too small a proportion of the population to make
them commercially viable.
C. DRUG APPROVAL 1095
The Act seeks to encourage the development of ”orphan drugs”
by reducing the overall financial cost of development, while enhanc-
ing the developer’s ability to recover that cost through sale of the
drug. Specifically, the Act a empts to reduce development costs
by streamlining the FDA’s approval process for orphan drugs, by
providing tax breaks for expenses related to orphan drug develop-
ment,[by authorizing the FDA to assist in funding the clinical testing
necessary for approval of an orphan drug, and by creating an Orphan
Products Board to coordinate public and private development efforts.
The Act seeks to enhance the orphan drug manufacturer’s ability to
recover his investment by granting the manufacturer seven years of
exclusive marketing rights ”for such drug for such [rare] disease or
condition.” A ”rare disease or condition” is one which ”affects less
than 200,000 persons in the United States,” or one which ”affects more 21 U.S.C. § 360bb
than 200,000 in the United States and for which there is no reasonable
expectation that the cost of developing and making available in the
United States a drug for such disease or condition will be recovered
from sales in the United States of such drug.”
Qualification for orphan drug benefits occurs in a two-step pro-
cess. At any phase of the research and development process, a manu-
facturer who believes its drug will treat a ”rare disease or condition”
may apply to the FDA for designation as ”a drug for a rare disease
or condition.” Although the Act does not limit the number of drugs
that may be designated for treatment of a particular rare disease the
FDA’s present policy is to not consider requests for orphan drug des-
ignation made after that drug has received full FDA marketing ap-
proval for that particular disease.
While any number of drugs may receive the development-phase
benefits of the Act, only one manufacturer may receive exclusive mar-
keting rights. This post-development benefit is reserved for the first
manufacturer to receive full FDA approval of its drug as safe and ef-
fective for commercial sale.
If the FDA … approves an application … for a drug desig- 21 U.S.C. § 360cc(a)
nated under section 360bb of this title for a rare disease or
condition, the FDA may not approve another application
… for such drug for such disease or condition for a person
who is not the holder of such approved application … un-
til the expiration of seven years from the date of approval
of the approved application. …
The FDA may authorize another manufacturer to produce ”such drug
for such disease or condition” only if the exclusive marketer consents
in writing or is incapable of providing sufficient quantities of the
drug.
As originally enacted, the Act limited the availability of exclusive
1096 CHAPTER 11. BIOTECHNOLOGY
marketing rights to drugs ”for which a United States Le er of Patent
may not be issued....” In considering the proposed legislation, the
House Commi ee on Energy and Commerce found that many po-
tential orphan drugs are not patentable, and stated: ”In order to pro-
vide some incentive for the development of these particular orphan
drugs, the Commi ee’s bill includes an exclusive marketing right for
the sponsor of such a drug.” Thus, the exclusivity provision of the
Act was designed to complement the patent laws, filling gaps which
might leave orphan drug manufacturers unprotected.
In 1985, Congress amended the Act to delete the non-patentability
criterion in the exclusivity provision. The Commi ee’s expectation
when it drafted the original provision in 1983 had been that exclu-
sivity would be used primarily by orphan drugs that could not get
product patents. However, experience under the Act demonstrated
that reliance on the incentives of patent protection for all patentable
orphan drugs would be insufficient. First, many patents expire be-
fore completion of the clinical testing necessary for FDA marketing
approval. Second, in many cases the product patent on a drug is held
by an individual or company other than the one that intends to test
the drug for use against a rare disease, and prior academic publica-
tion in the area precludes issuance of a use patent. Accordingly, the
fact that a product patent has been issued does not always ensure
that a manufacturer will have a sufficient incentive to apply for per-
mission to market the drug as an orphan drug.
In expanding the exclusivity provision to cover both patented
and unpatented orphan drugs, the Commi ee noted that the provi-
sion would only benefit the sponsors of drugs with less than seven
years of product patent protection available, and explained the dif-
ference between exclusivity under the Act and traditional patent pro-
tection. First, traditional patents generally offer much broader pro-
tection than orphan drug exclusivity, which is limited to treatment
of a particular disease. Second, while the inviolability of a patent is
limited only by the holder’s ability to enforce his rights in court, or-
phan drug exclusivity exists only so long as the sponsor adequately
supplies the market.
The Commi ee expressed its desire that elimination of the
patentability distinction, while probably still not making orphan
drugs profitable business ventures, would strengthen development
by providing greater certainty to potential orphan drug sponsors.
Sigma-Tau Pharmaceuticals, Inc. v. Schwetz
288 F.3d 141 (4th Cir. 2002)
Sigma-Tau Pharmaceuticals developed a drug to treat a rare condi-
tion known as carnitine deficiency in people with inborn metabolic
C. DRUG APPROVAL 1097
disorders.1 The FDA designated Sigma-Tau’s levocarnitine drug an
”orphan drug” and approved Sigma-Tau’s application to market it.
Its exclusivity for inborn metabolic disorders expired in 1999.
Sigma-Tau later received FDA approval for use of its levocarnitine
drug for the prevention and treatment of a second rare condition –
carnitine deficiency in patients with end-stage renal disease who are
undergoing dialysis. Sigma-Tau’s exclusivity for treating carnitine
deficiency in ESRD patients expires in 2006.
The FDA recently approved the applications of two drug manu-
facturers, private intervenor Gensia Sicor Pharmaceuticals, Inc. and
Bedford Laboratories, to market and sell generic forms of Sigma-
Tau’s levocarnitine drug. The agency approved the generics for the
treatment of patients with inborn metabolic disorders, the unpro-
tected indication. The generics compete with Carnitor.
As a result of these generic drug approvals, Sigma-Tau brought
suit against the FDA on May 10, 2001. Sigma-Tau sought to have
the approvals rescinded, or, in the alternative, to have the FDA
change the generics’ labeling to protect Sigma-Tau’s orphan exclu-
sivity. Sigma-Tau submits that the generics were in fact intended for
use in patients with ESRD who are undergoing dialysis, and that they
thereby infringed on the seven-year period of orphan exclusivity that
Carnitor currently enjoys under the ODA.
The plain language of the ODA is unambiguous, and the FDA’s
approvals of the generics in this case comported with the clear word-
ing of the statute. It is apparent that the FDA did not ”approve an-
other application ... for such drug for such disease or condition” here,
but rather approved ”another application ... for such drug” for a dif-
ferent disease or condition, one that was no longer subject to exclu-
sivity. That is, the agency approved generic versions of Sigma-Tau’s
levocarnitine drug for people with inborn metabolic disorders, for
which the period of orphan exclusivity had expired. The FDA did
not approve the generics for the treatment of ESRD patients.
By using the words ”such drug for such disease or condition,”
Congress made clear its intention that § 360cc(a) was to be disease-
specific, not drug-specific. In other words, the statute as wri en pro-
tects uses, not drugs for any and all uses.
Sigma-Tau contends that the FDA was obligated to look beyond
the labeling to what Sigma-Tau maintains is the reality of the situa-
tion, which is that most of the need for the generics – and thus most
of the money to be made – lies in treating patients with ESRD. But
this point is unavailing.
1
Carnitine deficiency can manifest itself in many ways, including the failure to
thrive in infants, cardiomyopathy, recurrent infections, muscle weakness, and liver
dysfunction.
1098 CHAPTER 11. BIOTECHNOLOGY
The evidentiary basis for the agency’s approvals must be the use
for which the approvals are sought – that is, the use for which the
generics are labeled. The FDA necessarily approves the generics be-
fore their manufacturers engage in any actual marketing. If we were
to ignore the deference due the FDA and impose exacting eviden-
tiary standards upon its generic drug approval process, the agency
would be faced with formidable problems. This is because many of
the sources of evidence and market data to which Sigma-Tau points
cannot be effectively analyzed in the pre-approval context. Thus, the
intended-use inquiry Sigma-Tau urges upon us might evolve into a
foreseeable-use test. Then, once the FDA approved an orphan drug
for a protected indication, generic competitors might be prohibited
from entering the market for almost any use.
As the district court noted, not only might this course of events re-
sult in extensions of exclusivity periods that Congress never intended,
but it also might frustrate the longstanding practice of Congress, the
FDA, and the courts not to interfere with physicians’ judgments and
their prescription of drugs for off-label uses. In light of the ensuing
effects on the delivery of health care and drug prices in this country,
such interference with off-label use is not something we would be
wise to welcome, let alone help to bring about. Even Sigma-Tau ap-
pears to agree that the medical community’s foreseeable off-label use
of drugs does not violate the ODA.
D Drug Marketing
Even after approval, the regulatory regime for dugs creates interest-
ing intellectual property issues because the marketing of drugs is heav-
ily restricted. We focus on issues relating to drugs’ names, physical
design, and advertising.
1 Names
Trademark law regulates drug names to prevent confusion. But it is
not the only body of law that does so: the FDA also limits what drug
makers can and cannot call their drugs.
Note on Drug Naming
Drug names are trademarks, right? So trademark law applies? Yes,
but.
Any given drug typically has numerous names. (To illustrate,
we’ll focus on drugs with a single active ingredient.) Consider as an
example the chemical with the following molecular structure shown
in the margin. It has the molecular formula C17 H17 ClN6 O3 , but the
A chemical molecular formula is a poor name, because it is far from unique.
D. DRUG MARKETING 1099
Many other organic compounds also have seventeen carbon atoms,
seventeen hydrogens, a chlorine, a nitrogen, and six oxygens. In-
stead, here are some of the names this molecule goes by:
• IUPAC Name: According to the Nomenclature of Organic
Chemistry, a 1600-page guide published and regularly re-
vised by the International Union of Pure and Applied
Chemists, the preferred IUPAC name of this molecule is
[(7S)-6-(5-chloropyridin-2-yl)-5-oxo-7H-pyrrolo[3,4-b]pyrazin-7-yl]
4-methylpiperazine-1-carboxylate. This name is derived by
systematically listing each component of the molecule, one at a
time. Here, for example, 5-chlorpoyridine-2-yl describes the
ring at the right of the molecule, with the 5 specifying where
the chlorine atom is a ached to it and the 2 specifying where
it is a ached to the rest of the molecule. The Nomenclature
describes in exacting detail the components, their names, the
order to list them in, and the various numbers, hyphens, and
other connectives that explain the components’ relationship in
the molecule. In trademark terms, the IUPAC name describes
the molecule’s structure and is intended to serve as a generic
term for it.
• InChI: The IUPAC name contains components like
chlorpoyridine that reflect the history of the common names
people gave to molecules and their parts: pyridine is the nitro-
gen ring by itself. These common names don’t directly reflect
the underlying structure, so translating them back into the
structure requires a great deal of knowledge about the different
components and their names. The IUPAC has also promul-
gated a system, called InChI (short for ”International Chemical
Identifier”) for converting molecular structures into more
completely explicit descriptions that can be more straight-
forwardly converted back. The InChI for this molecule is
InChI=1S/C17H17ClN6O3/c1-22-6-8-23(9-7-22)17(26)27-16-14-13(19-4-5-20-14)15(25)24(16)12
The InChI individually names each atom in the molecule,
so it is longer, but also a li le more transparent – which Pyridine
makes it easier for computers to reason about molecular
structure. (A similar but somewhat less rigorous descrip-
tion system called SMILES would describe the molecule as
CN1CCN(CC1)C(=O)OC2C3=NC=CN=C3C(=O)N2C4=NC=C(C=C4)Cl.)
The InChI also describes the molecule’s structure and is
intended to serve as a generic term for it.
• CAS Registry Number: IUPAC names and InChIs are long and
can be unwieldy – imagine transcribing an InChI trying to make
sure you had each digit right, or glancing at two IUPAC names
to see whether they were the same. The Chemical Abstracts
1100 CHAPTER 11. BIOTECHNOLOGY
Service, operated by the American Chemical Society (the lead-
ing professional organization for chemists in the United States)
maintains an index of molecules that operates on very different
principles. Each molecule in the index has a systematic name
given according to the system Naming and Indexing of Chemical
Substances for Chemical Abstracts published by the CAS – very
much like the IUPAC system but only 156 pages and different in
some respects – but also an index number, which has no chem-
ical significance, i.e. bears no relationship to the molecule’s
structure. Nonetheless, it is still intended to serve as a generic
term for the molecule: anyone who looks up 138729-47-2 in the
CAS Registry will find the molecular diagram and its system-
atic name, along with much more information about it. Because
they are short, CAS Registry numbers are easier to read aloud
and recognize at a glance; they are also commonly used in com-
puter databases of chemicals. CAS Registry Numbers are as-
signed by the CAS; one must submit an application and pay a
fee to obtain one. But as just noted, they are not ”owned” by the
applicant; the point is to make information about the chemical
available to all (useful, for example, if one would like to adver-
tise and sell a new compound one has just formulated).
• InChIKey: An interesting hybrid of the InChI and CAS Reg-
istry Number is the InChIKey. Take an InChI, and then run
it through a hashing algorithm (specified by IUPAC) to yield
a unique string of le ers and numbers with a fixed length
and format. This string has no chemical meaning, just like a
CAS Registry Number. But it is decentralized like an InChI:
anyone can come up with one. This molecule’s InChIKey is
GBBSUAFBMRNDJC-INIZCTEOSA-N.
• Adopted Name: All of these chemical names aren’t particu-
larly meaningful to humans. So humans have given the
molecule an adopted name (also called a ”nonproprietary
name”): eszopiclone. Adopted names for drugs are assigned
by the United States Adopted Names Council, which is spon-
sored by the American Medical Association, the United States
Pharmacopeial, and the American Pharmacists Association,
and collaborates with the FDA. It works with applicants – typ-
ically companies considering manufacturing drugs – to devise
appropriate adopted names according to a detailed list of criteria.
Here are a few of the principles:
1. A nonproprietary name should be useful primarily to
health care practitioners, especially physicians, pharma-
cists, nurses, educators, dentists and veterinarians.
2.a The name for the active moiety of a drug should be a single
D. DRUG MARKETING 1101
word, preferably with no more than four syllables.
3.a A common, simple word element (a ”stem”) should be in-
corporated in the names of all members of a group of re-
lated drugs when pertinent, common characteristics can
be identified, such as similarity of pharmacological action. For example, the stem -clone indi-
cates a hypnotic traquilizer, the stem
4. A name should be free from conflict with other nonpropri-
-cog is used for blood coagulation
etary names and with established trademarks and should factors, and the stem -conazole de-
be neither confusing nor misleading. ... scribes an antifungal agent.
1. Prefixes that imply ”be er,” ”newer” or ”more effective;”
prefixes that evoke the name of the sponsor, dosage form,
duration of action or rate of drug release should not be
used. Examples include ”dura,” ”forte,” or ”efex.”
New adopted names are subject to a long list of specific require-
ments, such as that ”the le er ’f’ should be used instead of ’ph’.”
The USAN Council publishes a list of adopted names, and it
also works with the applicant to forward proposed adopted
names to the World Health Organization for inclusion in its
own International Nonproprietary Names index. As the names
of this type of name suggest, it too is meant to be generic in the
sense that anyone is free to use the name to refer to the chemical
– but notice how trademark considerations are starting to creep
into the choice of names. Adopted names chosen this way are
partly descriptive (look at those stems) and partly coined (look
at the list of things the names may not describe). (Here is the
USAN Council’s statement on eszopiclone.)
• Established Name: The FDA considers some names to be ”estab-
lished names” for drugs – or, informally, the ”generic name,” See 21 C.F.R. § 299.4
because it generally functions as a generic name in the trade-
mark law sense. The distinction between an adopted name and
an established name is simply that the la er has the FDA’s sanc-
tion as ”the” generic name, not just ”a” generic name. (As we
will see in a moment, the FDA requires drugmakers to list the
established name of their products, even when they also use a
trademark). Where the USAN Council has selected an assigned Are the following the names of drugs or
name, the FDA will treat it as the established name, so the estab- of elves?
lished name of this drug is also eszopiclone. But not all estab- – Frova
lished names come through the USAN Council. Some drugs – Erestor
have ”common names”: i.e., the names that have come to be – Isentress
used generically by the public to refer to the drug. aspirin is – Qvar
an example. – Celeborn
• Proprietary Name: And now back to trademarks. When a drug- – Oropher
maker submits an application to the FDA, it must also list the See Which Is It: Prescription Drug or
proprietary name it proposes to market the drug under. The Tolkien Elf? at How Stuff Works: Enter-
tainment
1102 CHAPTER 11. BIOTECHNOLOGY
FDA will then engage in an extensive substantive examination
of the name designed to minimize errors by medical profession-
als and patients. Under its Contents of a Complete Submission for
the Evaluation of Proprietary Names (2016) and Best Practices in De-
veloping Proprietary Names for Drugs (draft 2014), the FDA will,
for example:
– Require that the proprietary name be different from the
established name. Indeed, the proprietary name may not
incorporate USAN stems at all.
– Reject proposed proprietary names that are confusingly
similar to other proprietary names, established names, or
ingredient names. This is a much more searching inquiry
that the trademark likelihood of confusion analysis. The
FDA will compare the proposed name against its Phonetic
and Orthographic Computer Analysis system for look-
alike and sound-alike combinations, and also conduct or
require ”simulation studies”:
Name simulation tests should reflect the full range
and variety of tasks involved in the prescribing,
transcribing, dispensing, and administration of
drugs, as well as tasks involved in consumer se-
lection of OTC drugs. Simulations should include
common and easily simulated characteristics of
real use, such as using ruled or unruled paper,
prescription pads, computer order entry, and tele-
phone orders to approximate wri en, oral, and
electronic prescribing in the se ing of care for
the proposed product (e.g., inpatient and outpa-
tient se ings, long-term care). Simulations also
should approximate the diversity of real-world
prescribing conditions by varying factors such as
background noise, handwriting samples, differ-
ent ink colors, directions for use, and different
voices/accents. In addition, the simulation study
should present the proprietary name with the cor-
responding product characteristics (e.g., strength,
route, dosage, and frequency) that are likely to be
used to communicate prescriptions and orders for
the proposed product.
– Prevent the use of the same proprietary name on products
with different active ingredients.
– Reject a proposed proprietary name that could ”result in ...
misbranding if it is false or misleading, such as by making
D. DRUG MARKETING 1103
misrepresentations with respect to safety or efficacy.” The
FDA elaborates:
For example, a fanciful proprietary name may mis-
brand a product by suggesting that it has some
unique effectiveness or composition when it does
not. For example, FDA likely would object to
a proposed proprietary name that contained the
prefix best or that sounds like best because it im-
plies superiority over other currently available
therapies. In the absence of appropriate scientific
evidence to support claims that the product is su-
perior to other competing products currently on
the market to treat the condition, such a proposed
name would be misleading.
Note that this review is separate and apart from the USPTO’s
review of a trademark application. This is true on the back end
as well as the front end: someone proposing to sell a compet-
ing branded version of the same drug will need to get its name
through the FDA’s approval process, not just past the trade-
mark standard. The result – as you can probably guess by now
– is that the FDA’s rigorous standards for proprietary names
in effect create a special and distinctive trademark system for
branded drugs. Here, our molecule is sold under the propri-
etary name Lunesta for the treatment of insomnia. The brand
name doesn’t directly say that it works as a sleep aid, but it cer-
tainly suggests certain appealing characteristics of one.
Senate Report No. 448, 87th Congress, 1st Session (1961)
Administered Prices--Drugs
In addition to patent controls and the vast amounts spent on advertis-
ing and promotion, the control of the market by the large drug com-
panies stems from a third source of power; this is their remarkable
success in persuading physicians to prescribe by trade names rather
than generic names. Where this is done the small manufacturer is
automatically excluded from the market, regardless of whether the
drugs are patented or non-patented, and the opportunity for price
competition disappears. This state of affairs is furthered by anything
which causes the physician to be apprehensive of, or have difficulty
in, prescribing by generic names.
The multiplicity of names’ for products in the drug industry vir-
tually exceeds the bounds of human imagination. First, there is the
chemical name which a empts to spell out the structural makeup of
the drug; and here a variety of forms of expression is possible. Next
comes the generic name which may or may not represent an abbrevi-
1104 CHAPTER 11. BIOTECHNOLOGY
ation of the more complex chemical name; this is the name commonly
used to identify the drug in formularies, the teaching of medicine, etc.
Ordinarily a drug has one generic name, but there are cases where
two or three are employed. Finally a drug usually has a host of in-
dividual trade names used by the various companies engaged in the
promotion of the product. In consequence, a single drug product is
represented in the market by such complex body of nomenclature as
to intimidate even the initiates in the field. And if one can visualize
this situation for a single drug multiplied by the thousands of drugs
currently marketed, he can get some impression of the chaos existing
in the area of drug nomenclature.
The new so-called synthetic penicillin illustrates the problem.
The chemical name for this product is alpha-phenoxyethyl penicillin
potassium. This set of syllables is also used as a generic name. In
addition, there are two other generic names – potassium penicillin
152 and phenethicillin potassium. Since the product is protected
by patent, there are only six sellers, each of whom markets under
his own trade name. Thus the prescribing physician is bombarded
with promotional material for Syncillin, Darcil, Alpen, Chemipen,
Dramcillin-S, and Maxipen. All of these are, of course, the same chem-
ical compound.
Speaking of them, Dr. Walter Modell, professor of pharmacology
and therapeutics at Cornell University Medical College, stated:
They are colored differently (pink, peach, green, and two
shades of yellow) and are advertised as distinctive materi-
als but no effort is made in promotional material to inform
the physician who is urged to use them that they are oth-
erwise identical.
In this example the busy practitioner is confronted with three generic
names, six brand names used as the name of the drug itself, and at
least five different colors. Thus, there are 14 different identification
symbols for the identical drug. In terms of nomenclature, each prod-
uct stands isolated; indeed, there is an a empt to conceal the identical
nature of the drug.
Code of Federal Regulations
Drugs; statement of ingredients
(1) If the label or labeling of a prescription drug bears a proprietary
21 C.F.R. § 201.10(g) name or designation for the drug or any ingredient thereof, the
established name, if such there be, corresponding to such pro-
prietary name or designation shall accompany such proprietary
name or designation ...
(2) The established name shall be printed in le ers that are at least
half as large as the le ers comprising the proprietary name or
D. DRUG MARKETING 1105
designation with which it is joined, and the established name
shall have a prominence commensurate with the prominence
with which such proprietary name or designation appears, tak-
ing into account all pertinent factors, including typography, lay-
out, contrast, and other printing features.
Kos Pharmaceuticals, Inc. v. Andrx Corp.
369 F.3d 700 (3d Cir. 2004)
On October 3, 2000, Kos filed an application with the PTO to register
ADVICOR as the mark for a new medication designed to improve
cholesterol levels. This new drug combines 20 milligrams of lovas-
tatin (which lowers LDL, or ”bad” cholesterol) with varying strengths
(500, 750, or 1000 milligrams) of an extended-release formulation of
niacin (which increases HDL, or ”good” cholesterol). Kos has been
selling its proprietary extended-release form of niacin under the trade
name Niaspan since 1997. In July 2001 Kos began advertising, and in
December 2001 began selling, its new combination drug, Advicor.
Shortly after Kos began marketing Advicor, it learned that Andrx
planned to use the mark ALTOCOR for its own new anticholesterol
medication, which would contain only a single active ingredient, an
extended-release form of lovastatin, in varying strengths (10, 20, 40
or 60 milligrams). Andrx announced on January 31, 2002 that it had
received preliminary marketing approval for Altocor from the FDA.
On February 5, 2002, the PTO published for opposition the ALTO-
COR mark, which Andrx had applied to register in December 2000.
Kos tried to dissuade or otherwise prevent Andrx from using the
ALTOCOR mark several times, both before and after Andrx began
selling its new drug. Kos also expressed its concerns about potential
confusion to the FDA division responsible for reviewing proposed
new drug names from a public health perspective, the Office of Drug
Safety’s Division of Medication Errors and Technical Support. The
Division of Medication Errors had preliminarily approved the name
Altocor in November 2001. At that time, the Division stated that the
”name Advicor looks and sounds similar to Altocor,” but concluded
that the ”difference in the wri en strengths” of the drugs reduced the
risk of ”error ... between the two products.”
The parties submi ed competing medical affidavits to support
their respective views as to the nature and severity of potential con-
sequences of mis-filled prescriptions. Per Kos, niacin – and thus Ad-
vicor, but not Altocor – may cause serious injury, or even death, to
patients with various conditions or sensitivities to the drug. Other,
less serious, side effects of niacin may worry patients who have not
been warned of those effects, and who may thus discontinue needed
treatment. Patients who mistakenly receive Altocor rather than Advi-
cor are also at risk, says Kos, since the conditions the niacin is meant
1106 CHAPTER 11. BIOTECHNOLOGY
to address will remain untreated. Andrx, on the other hand, claims
that the ”safety profile of both products is similar” and that there need
not be ”any unusual concern” about ”harm to the public if the Andrx
product is substituted for the KOS product.”
[The District Court denied a preliminary injunction. The Court
of Appeals reversed. The excerpts that follow focus on the relation-
ship between the FDA’s consideration of the proposed name and the
likelihood of confusion inquiry under the Lanham Act.]
The District Court used an overly narrow definition of confusion,
in effect evaluating the likelihood of misdispensing rather than con-
fusion. Andrx also claims that ”the FDA and the USPTO have de-
termined that the marks are not confusingly similar.” But neither of
those proceedings can supplant the required Lanham Act analysis.
First, the FDA applies a standard different from the Lanham Act ”like-
lihood of confusion” test at issue here. The FDA reviews proposed
drug names to predict potential confusion that may arise in the ac-
tual prescription process. Misdispensing is not the only type of con-
fusion actionable under the Lanham Act. Indeed, to the extent that
the FDA’s proprietary name review is relevant here, the reviewing di-
vision’s statement that the ”name Advicor looks and sounds similar
to Altocor” actually supports Kos’s claim.
The facial similarity of the marks is apparent on their face. Both
are seven-le er, three-syllable words that begin and end with the
same le ers and the same sounds. The marks are also similar in that
both are coined words, not found even in approximation in the En-
glish or any other familiar language. Two names that look and sound
similar will naturally seem even more similar where there are no dif-
ferences in meaning to distinguish them. Nor can the similarity of
coined marks be explained by, or ameliorated by virtue of, any rela-
tionship between the marks and the products identified.
The district court and the parties treated medical professionals,
such as doctors, nurses and pharmacists, as the relevant consumers.12
These trained professionals may be expected to be knowledgeable
about, and to exercise care in distinguishing between, medicines. We
have emphasized a countervailing concern that weighs against allow-
ing the expertise of physicians and pharmacists to trump other factors
in assessing the likelihood of confusion in drug cases. Prevention of
confusion and mistakes in medicines is too vital to be trifled with
since confusion in such products can have serious consequences for
12
We note that neither the parties nor the court below addressed the possible con-
fusion of ultimate consumers. While doctors and pharmacists play a gate-keeping
role between patients and prescription drugs, they are not the ultimate consumers.
Patients are. Courts have noted that drugs are increasingly marketed directly to
potential patients through, for example, ”ask-your-doctor-about-Brand-X” style ad-
vertising.
D. DRUG MARKETING 1107
the patient.
Andrx argues that confusion is even less likely here than in other
cases involving medical professionals since prescriptions must reflect
the different chemical composition of the drugs, with Advicor pre-
scriptions specifying strengths of two active ingredients, and Alto-
cor only one. Of course, this difference in prescribing is not relevant
to the common practice of providing samples or to any type of con-
fusion other than misdispensing. There is no reason to believe that
medical expertise as to products will obviate confusion as to source
or affiliation or other factors affecting goodwill.
Advicor and Altocor are both prescription drugs used to improve
cholesterol levels. The products are of the same type and serve the
same function in slightly different (but overlapping) ways that may
be appropriate for slightly different (but overlapping) sets of patients.
That doctors will need to decide which drug to prescribe does not
mean they won’t see the drugs as related or otherwise associate them.
Indeed, it could be argued that the opposite is true, that is, that they
will associate the products because they must consider both to decide
which to prescribe.
The parties submi ed competing medical affidavits to support
their respective views as to the nature and severity of the potential
consequences of a mis-filled prescription. Andrx also disputed Kos’s
allegations as to the risks of misdispensing by arguing it is extremely
unlikely that a pharmacist would improperly fill a prescription. The
district court resolved this dispute in Andrx’s favor, holding that Kos
had not proven that the public would face a serious health risk absent
an injunction. The colloquy at the hearing shows that the court was
impressed by the FDA’s statement that the ”possibility of confusion
was minimal,” and was persuaded that ”it would be difficult to imag-
ine a situation” where the drugs would be confused ”when a pharma-
cist is filling a prescription.” We note that, although the FDA’s inquiry
is not equivalent to the Lanham Act ”likelihood of confusion” test, its
review of proprietary drug names is relevant in assessing the health
risks of mis-filled prescriptions. Indeed, the purpose of FDA review
is to predict potential confusion that may arise in the actual prescrip-
tion process. We defer to the district court’s resolution of this factual
dispute because its finding is supported by the record and is thus not
clearly erroneous.
We must, however, distinguish between the court’s finding that
Kos did not establish a ”serious health risk” and its conclusion that
”therefore, the public interest does not favor” injunctive relief. While
we defer to the former, the court’s ultimate assessment of the public
interest is clearly erroneous because it does not take into account the
1108 CHAPTER 11. BIOTECHNOLOGY
right of the public not to be deceived or confused.
666 Problem
In United States v. 70 1/2 Dozen Bo les, and 76 1/2 Dozen Bo les of ”666”,
1938-1964 FDLI Jud. Rec. 89 (M.D. Ga. 1944), the Monticello Drug
Company had sold a product containing quinine under the name
”666”. During World War II, the supply of quinine was restricted and
Monticello stopped pu ing it in 666. It was seized and destroyed as
a ”misbranded drug” under the theory that keeping the same name
and trade dress would mislead consumers into ”accepting the new
product under the impression that they were obtaining the old prod-
uct.” Is this theory sound? Is it consistent with what you know of
trademark law?
Bottle of 666, date unknown. 2 Design
One might expect the law of drug trade dress to track the law of drug
names closely. One would be wrong.
Shire US Inc. v. Barr Laboratories, Inc.
329 F.3d 348 (3d Cir. 2003)
Adderall is a central nervous system stimulant used in treating
a ention deficit hyperactivity disorder (ADHD) available only by
prescription and dispensed to patients in pharmacy vials labeled
”prescription-only” as required by law. Adderall is composed of the
mixed salts of a single-entity amphetamine and is a controlled sub-
stance. Shire first placed Adderall on the market in 1996 and since
that time it has enjoyed substantial success so that by 2001 it had a
32% market share in the United States ADHD prescription market.
Adderall originally came in two dosage strengths and colors, 10
mg. (blue, round) and 20 mg. (orange, round). The tablets are
currently either blue or pale orange/peach and either round or oval.
Color and size vary with the tablet’s strength, seven of which cur-
rently are prescribed: 5 mg. (blue, round), 7.5 mg. (blue, oval), 10 mg.
(blue, round), 12.5 mg. (orange/peach, round), 15 mg. (orange/peach,
oval), 20 mg. (orange/peach, round), and 30 mg. (orange/peach,
round). Adderall tablets are scored and stamped with the mark ”AD”
on one side and the dosage size, e.g., ”10” on the other.
Shire’s product literature, promotional materials, and mailings,
which its sales staff distributed to physicians, feature color pictures
of the Adderall tablets and sometimes direct patients to examine the
tablets to ensure that they have received exactly the drug prescribed.
Shire does not advertise its products in general consumer publica-
tions, but pictures of Adderall tablets appear in the Physician’s Desk
Reference and in certain consumer books. While Shire continues to
Shire 20mg Adderall mixed am-
phetamine salts
sell Adderall, it altered its marketing strategy for 2002 and discontin-
D. DRUG MARKETING 1109
ued promoting Adderall, promoting instead a patented, sustained-
release version of the drug, Adderall XR.
Barr, a public company that develops and manufactures generic
and proprietary pharmaceuticals, was the first manufacturer of a
generic equivalent to Adderall. It began developing a generic am-
phetamine salt alternative in 1998 and started marketing it in Febru-
ary 2002 after submi ing an ANDA” to the FDA and obtaining its ap-
proval. The FDA has approved Barr’s generic amphetamine salts as
safe and effective, and has classified Barr’s product, which it manufac-
tures in accordance with FDA regulations, as therapeutically equiva-
lent to Adderall. Barr’s product is the bioequivalent of Adderall, for
which it thus may be interchanged freely. According to Shire, how-
ever, the products contain different inactive ingredients, and, in par-
ticular, Barr’s tablets contain saccharin, a once controversial ingredi-
ent the FDA only recently removed from its list of banned substances.
Barr manufactures its generic amphetamine salts in 5 mg. (blue,
oval), 10 mg. (blue, oval), 20 mg. (orange/peach, oval), and 30 mg.
(orange/peach, oval) tablets.4 Barr’s generic amphetamine salts are
oval and convex in shape. Both the size and the color of Barr’s tablets
are linked to dosage. The face of the tablets has a ”b” mark or the
trade name Barr, and contains a numerical product code. The district
court, on the basis of its physical examination of the tablets and the
record before it, determined that while Barr’s tablets, like Shire’s, are
blue and peach/light orange and those colors are keyed to dosage
amounts, their shape and markings are different and ”[j]uxtaposed
against one another, the products are similar though not identical.”
On April 30, 2002, Shire filed this action against Barr, alleging
that Barr’s sale of generic amphetamine salts copying Adderall’s ap-
pearance constituted unfair competition and diluted Shire’s rights un-
der federal and state law. The district court found that Shire ”has Barr 20mg mixed amphetamine salts
not credibly rebu ed Barr’s theory that the similar color-coding and
shape of the products are particularly meaningful for ADHD patients
and enhance efficacy” [and thus are functional].
Dr. Lawson F. Bernstein’s declaration explains that because
ADHD patients overuse visual cues, (1) when therapeutically equiv-
alent ADHD products have similar visual recognition properties,
adult ADHD patients will experience less confusion in correctly iden-
tifying the agent and/or its dosage strength; (2) given that almost all
4
For Barr’s product to be approved as a generic equivalent for Adderall, it was
required to produce the same dosage strengths available for Adderall. Shire, how-
ever, launched its mid-range dosages (7.5 mg., 12.5 mg. and 15 mg.) after Barr filed
its ANDA with the FDA. In an internal memorandum, Shire indicated that its mo-
tivation for introducing these new strengths was to ”buy time” to protect market
share because generic substitutes would not be available for all strengths, thereby
minimizing competition from substitutes.
1110 CHAPTER 11. BIOTECHNOLOGY
patients require some initial dosage titration and a subsequent sub-
stantial majority require intermi ent dosage adjustment, the color
coding of a particular preparation of mixed amphetamine salts tablets
confers a substantial degree of clinical functionality for the patient
in the titration/adjustment process; (3) many adult patients may
take multiple daily dosages of different strength amphetamine salts
tablets, also inferring the usefulness of similar color-coding.
Dr. Blume’s affidavit explains that a generic drug’s similar ap-
pearance to the branded product ”enhances patient safety and com-
pliance with the medically prescribed dosing regimen” and that
safety and compliance ”would be particularly important for ADHD
drugs when non-medical intermediaries (such as school secretaries)
dispense mid-day doses to children [treated for ADHD].” Blume’s
affidavit explains, ”Dosage form similarities enhance patient accep-
tance” and points to generic formulations of other central nervous
system drugs that are identical or mirror the brand drug in color.”
Gregory Drew, a registered pharmacist and Vice President of
Pharmacy Health Services for Rite Aid Corporation, explains that
Rite Aid prefers that ”the generic tablet look as similar to the branded
tablet as possible” so as to ”increase patient acceptance and comfort,”
as well as compliance and that ”all other things being equal, Rite Aid
will choose to stock the generic product that most closely resembles
the branded product.”
Most of the opinions on which Shire relies were district court opin-
ions from the early 1980s14 which the court here was not bound to fol-
low. In addition, the cases on which Shire relies are distinguishable
on their facts.
Most significantly, though the cases involved prescription drugs,
none involved controlled substances and in all of the cases there was
evidence of the passing off of the defendant’s product by pharmacists,
or of an intent to induce illegal substitution on the defendant’s part.
It is true that in several of the cases on which Shire relies, the de-
fendant offered affidavits and declarations of pharmacists and physi-
cians making claims relating to functionality that the courts in those
SK&F: 625 F.2d 1055 (3d Cir. 1980) cases did not credit the evidence. For example, in SK&F, Co. v. Premo
Pharmaceutical Lab., Dr. Shafer, a physician, submi ed an affidavit in
which he supported the sale of similarly configured generic tablets as
he believed this configuration would enable the patient to feel confi-
dent that there was no change in the chemistry of the medication and
14
Those cases were decided prior to: (1) the enactment in 1984 of the Hatch-
Waxman amendment, which established a federal policy favoring the marketing
of therapeutic equivalents of generic drugs, (2) the 1999 amendment to 15 U.S.C.
§ 1125(a)(3) which places the burden of proving non-functionality of unregistered
trade dress on the plaintiff, and (3) the Supreme Court’s decisions in Wal-Mart and
TrafFix.
D. DRUG MARKETING 1111
that patients might become uneasy, confused or react adversely if the
generic medication looked different from the market innovator. But
we explained that the district court nevertheless ”apparently chose
not to credit the assertion of the Shafer affidavit, crediting instead
the affidavits of Drs. Meyerson and Tannenbaum that in their expe-
rience the appearance of a drug bears no established relationship to
its therapeutic efficacy.” Just as in SK&F we deferred to the district
court’s findings of fact it is appropriate for us to do so in this case as
well.
While district courts in this circuit have rejected functionality ar-
guments similar to those the court credited in this case, other district
courts, such as that in Ives Laboratories, Inc. v. Darby Drug Co.19 , have Ives: 488 F. Supp. 394 (E.D.N.Y. 1980)
credited similar testimony bearing on functionality. In Ives the man-
ufacturer of the prescription drug cyclandelate sought an injunction
against manufacturers of generic cyclandelate claiming that the de-
fendants’ use of the same capsule colors was ”a false designation of
origin” or a ”false description or representation” of defendants’ prod-
uct. But the district court in Ives found that capsule colors were func-
tional in several respects. ”First, many elderly patients associate the
appearance of their medication with its therapeutic effect. Second,
some patients co-mingle their drugs in a single container and then
rely on the appearance of the drug to follow their doctors’ instruc-
tions. Third, to some limited extent color is also useful to doctors
and hospital emergency rooms in identifying overdoses of drugs.”
Jeremy A. Greene & Aaron S. Kesselheim
365 New Eng. J. Med. 83 (2011)
Why Do the Same Drugs Look Different? Pills, Trade Dress, and Public
Health
Protection of intellectual property covering the physical a ributes
of pills therefore served two primary purposes. One purpose
of trade-dress protection was to reduce the practice of palming
off. Premo Pharmaceuticals was sued for trade-dress infringement
when it marketed its generic version of the diuretic hydrochloroth-
iazide/triamterene with a maroon-and-white capsule identical to that
of brand-name drug Dyazide, produced by Smith, Kline and French.
In SK&F, the Third Circuit Court of Appeals upheld trade-dress pro-
tection because near-identical pills would facilitate the practice of
”unscrupulous pharmacists” in ”substituting less expensive generic
drugs for the brand name drugs prescribed without informing their
customers and without passing along the benefit of the lower price.”
The court also found that the color scheme was nonfunctional be-
19
The court of appeals reversed in Ives, but the Supreme Court in turn reversed
the court of appeals in Inwood Laboratories, Inc. v. Ives Laboratories, Inc.
1112 CHAPTER 11. BIOTECHNOLOGY
cause it did not help patients identify the drug, pointing to other
maroon-and-white capsules that were not diuretics.
A second purpose, the courts rationalized, was to allow trade-
dress protection to serve a public health function by preventing the
substitution of a drug that was similar but not identical to another.
In SK&F, the two diuretic products were chemically equivalent, but
their rate of absorption into the bloodstream (bioavailability) differed.
In another case, a federal district court in Michigan enjoined a com-
petitor from producing a version of the diet pill phentermine that was
similar in appearance to a brand-name version because the efficacy of
the hydrochloride salt of phentermine in the generic manufacturer’s
version did not necessarily match the efficacy of the brand-name man-
ufacturer’s phentermine resin complex, so the two drugs were not in-
Pennwalt: 472 F.Supp. 413 (E.D. Mich. terchangeable. Pennwalt v. Zenith Laboratories. Notably, both these
1979) arguments upholding pharmaceutical trade-dress rights were meant
to protect consumers from deception by the producers of look-alike
drugs.
AstraZeneca’s omeprazole (Prilosec) was widely promoted as
”the purple pill” after its launch in 1989. As Prilosec’s market ex-
clusivity was ending, AstraZeneca launched the prescription-only
follow-on product esomeprazole (Nexium) as ”the new purple pill”
in 2001 to encourage patients accustomed to taking Prilosec to switch
to Nexium. Notably, when AstraZeneca began to sell omeprazole
without a prescription as Prilosec OTC, the company changed the
Image from AstraZeneca website at color of its product to salmon pink. Conversely, as Lilly’s green-and-
purplepill.com
cream capsule fluoxetine (Prozac, 20 mg) faced generic-drug competi-
tion in 2001, the company repackaged fluoxetine in pink-and-purple
capsules and marketed it as a new drug, Sarafem (20 mg), which was
approved by the FDA in 2000 for the treatment of a new indication
– perimenstrual dysphoric disorder. In this case, the change in color
was designed to discourage physicians from prescribing the less ex-
pensive generic fluoxetine in place of Sarafem.
The 1997 FDA guidelines for expanding direct-to-consumer
(DTC) advertising of prescription drugs further enhanced the power
Nexium capsules of pharmaceutical trade dress as broadcast campaigns began to in-
clude images of the pills themselves. One of the first drugs to be
promoted heavily to consumers after its approval in 1998 was Via-
gra (sildenafil), Pfizer’s drug for treating erectile dysfunction. The
company included a picture of the drug in nearly all the advertise-
ments for it, which served to identify the brand of Viagra with both
the color (pale blue) and the shape (diamond) of the tablets.
[Despite Shire,] claims of trade dress remain vital in the pharma-
ceutical market. With increasing generic competition, trade-dress
strategies are described in industry publications as ways for innova-
Viagra tablet tor firms to retain market share for their products after their patents
D. DRUG MARKETING 1113
and market exclusivity expire. During at least the past 5 years, brand-
name pharmaceutical companies have begun to license their trade
dress to manufacturers of so-called authorized generics, which adver-
tise the characteristic of similar appearance as a reason for consumers
to use these products.
If brand-name pharmaceutical manufacturers are no longer able
to rely on trade dress to protect the a ributes of their products, fed-
eral policies affecting this field need to be sharply reconsidered. A
first step toward reform would be to include FDA certification of
pharmaceutical size, shape, and color in the drug-approval process.
For example, a pill’s a ributes could be proposed by the manufac-
turer during the original New Drug Application. Currently, such
a process occurs for the brand name of the medication; extending
it to pill appearance should not require additional legislation. This
would create a clear path for generic manufacturers to declare dur-
ing the ANDA process that their products have similar appearances.
Where these drugs do differ (e.g., as in dyes, fillers, or excipients),
physicians or pharmacists could still locate manufacturer data from
unique identifier codes embossed on pills. Further public health ben-
efits could emerge if the reduction in trade dress helps to combat the
physician’s persistent use of, and the patient’s preference for, costly
brands when generic equivalents are available.
The obvious limitation of this approach is that it would apply only
to newly introduced pharmaceutical products, leaving most of the
existing therapeutic armamentarium unaffected. Therefore, we sug-
gest that a rational scheme be created for pharmaceuticals that have
already been approved whereby each distinct agent could be identi-
fied by a combination of its size, shape, and color. An example of
such a scheme is the successful introduction in the United Kingdom
of color-coding for metered-dose inhalers. Patients with asthma had
frequently confused bronchodilators with steroid inhalers, leading
the National Health Service to systematize inhaler appearance: all
short-acting inhalers (bronchodilators) became blue and all preven-
tive agents (steroids) became brown, orange, or burgundy. A similar
color-coding scheme was piloted in the United States for ophthalmo-
logic products, in which the caps on generic preparations of atropine,
pilocarpine, and other drug products having multiple strengths were
color-coded to match those of the innovator-drug products.
3 Labeling and Advertising
The FDA strictly controls what drug makers must, may, and may not
say when marketing their drugs. (In particular, all approved drugs
must have a ”label” that gives detailed information on how to use
them and on potential health risks form using them.) These rules de-
1114 CHAPTER 11. BIOTECHNOLOGY
part – in several fairly significant ways – from the usual general rules
for false advertising. Hatch-Waxman requires that generic versions
of a drug have a label that is ”the same as the labeling approved for”
the drug they copy. Is it any surprise that legally mandated copying
raises intellectual property issues?
Consumer-Directed Broadcast Advertisements: Guidance for Industry
(1999) (last updated 2002)
This guidance is intended to assist sponsors who are interested in ad-
vertising their prescription human and animal drugs, including bio-
logical products for humans, directly to consumers through broad-
cast media, such as television, radio, or telephone communications
systems.
The Federal Food, Drug, and Cosmetic Act (the Act) requires that
manufacturers, packers, and distributors (sponsors) who advertise
prescription human and animal drugs, including biological products
for humans, disclose in advertisements certain information about the
advertised product’s uses and risks. For prescription drugs and bi-
ologics, the Act requires advertisements to contain ”information in
brief summary relating to side effects, contraindications, and effec-
21 U.S.C. § 352(n) tiveness” . The resulting information disclosure is commonly called
the brief summary.
21 CFR § 202.1 The prescription drug advertising regulations distinguish be-
tween print and broadcast advertisements. Print advertisements
must include the brief summary, which generally contains each of
the risk concepts from the product’s approved package labeling. Ad-
vertisements broadcast through media such as television, radio, or
telephone communications systems must disclose the product’s ma-
jor risks in either the audio or audio and visual parts of the presenta-
tion; this is sometimes called the major statement.
Sponsors of broadcast advertisements are also required to present
a brief summary or, alternatively, may make ”adequate provision ...
for dissemination of the approved or permi ed package labeling in
21 CFR § 202.1(e)(1) connection with the broadcast presentation”. This is referred to as
the adequate provision requirement. The regulations thus specify that
the major statement, together with adequate provision for dissemina-
tion of the product’s approved labeling, can provide the information
disclosure required for broadcast advertisements.
The purpose of this guidance is to describe an approach that FDA
believes can fulfill the requirement for adequate provision in connec-
tion with consumer-directed broadcast advertisements for prescrip-
tion drug and biological products. The approach presumes that such
advertisements:
• Are not false or misleading in any respect. For a prescription
drug, this would include communicating that the advertised
D. DRUG MARKETING 1115
product is available only by prescription and that only a pre-
scribing healthcare professional can decide whether the prod-
uct is appropriate for a patient.
• Present a fair balance between information about effectiveness
and information about risk.
• Include a thorough major statement conveying all of the prod-
uct’s most important risk information in consumer-friendly lan-
guage.
• Communicate all information relevant to the product’s indi-
cation (including limitations to use) in consumer-friendly lan-
guage.
A sponsor wishing to use consumer-directed broadcast advertise-
ments may meet the adequate provision requirement through an ap-
proach that will allow most of a potentially diverse audience to have
reasonably convenient access to the advertised product’s approved
labeling. One acceptable approach to disseminating the product’s
approved labeling is described below. This approach includes the
following components.
• Disclosure in the advertisement of an operating toll-free tele-
phone number for consumers to call for the approved package
labeling.
• Reference in the advertisement to a mechanism to provide
package labeling to consumers with restricted access to so-
phisticated technology, such as the Internet, and those who
are uncomfortable actively requesting additional product infor-
mation or are concerned about being personally identified in
their search for product information. [The FDA recommended
print advertisements or ”the availability of sufficient numbers
of brochures containing package labeling in a variety of pub-
licly accessible sites (e.g., pharmacies, doctors’ offices, grocery
stores, public libraries).”]
• Disclosure in the advertisement of an Internet web page (URL)
address that provides access to the package labeling.
• Disclosure in the advertisement that pharmacists, physicians
(or other healthcare providers), or veterinarians (in the case of
animal drugs) may provide additional product information to
consumers.
Letter from Robert Dean, Division Director, OPDP, FDA, to Eric Gervais
Aug. 7, 2015
Dear Mr. Gervais:
The Office of Prescription Drug Promotion (OPDP) of the U.S.
Food and Drug Administration (FDA) has reviewed the Kim Kar-
dashian Social Media Post for DICLEGIS (doxylamine succinate and
1116 CHAPTER 11. BIOTECHNOLOGY
pyridoxine hydrochloride) delayed-release tablets, for oral use (DI-
CLEGIS) submi ed by Duchesnay, Inc. (Duchesnay) under cover
of Form FDA 2253. The social media post was also submi ed as a
complaint to the OPDP Bad Ad Program. The social media post is
false or misleading in that it presents efficacy claims for DICLEGIS,
but fails to communicate any risk information associated with its use
and it omits material facts. Thus, the social media post misbrands DI-
CLEGIS within the meaning of the FDCA and makes its distribution
21 U.S.C. §§ 352(a), (n); 321(n); 331(a). violative. These violations are concerning from a public health per-
See 21 CFR § 202.1(e)(5) spective because they suggest that DICLEGIS is safer than has been
demonstrated.
According to its FDA-approved product labeling (PI) (emphasis
in original):
DICLEGIS is indicated for the treatment of nausea and
vomiting of pregnancy in women who do not respond to
conservative management.
Limitations of Use
DICLEGIS has not been studied in women with hyper-
emesis gravidarum.
DICLEGIS is contraindicated in women with known hypersensitiv-
ity to doxylamine succinate, other ethanolamine derivative antihis-
tamines, pyridoxine hydrochloride or any inactive ingredient in the
formulation, as well as in women who are taking monoamine oxi-
dase inhibitors (MAOIs). The PI for DICLEGIS includes Warnings
and Precautions regarding activities requiring mental alertness and
concomitant medical conditions. In addition, the most common ad-
verse reaction reported with DICLEGIS was somnolence.
The social media post is misleading because it presents various
efficacy claims for DICLEGIS, but fails to communicate any risk in-
formation. For example, the social media post includes the following
claims:
OMG. Have you heard about this? As you guys know
my #morningsickness has been pre y bad. I tried chang-
ing things about my lifestyle, like my diet, but nothing
helped, so I talked to my doctor. He prescribed me #Di-
clegis, and I felt a lot be er and most importantly, it’s been
studied and there was no increased risk to the baby. I’m
so excited and happy with my results that I’m partnering
with Duchesnay USA to raise awareness about treating
morning sickness. If you have morning sickness, be safe
and sure to ask your doctor about the pill with the preg-
nant woman on it and find out more www.diclegis.com;
The challenged Kim Kardashian Social www.DiclegisImportantSafetyInfo.com.
Media Post
D. DRUG MARKETING 1117
The social media post, however, entirely omits all risk informa-
tion. We note the statement, “[F]ind out more www.diclegis.com;
www.DiclegisImportantSafetyInfo.com[,]” appears at the end of the
social media post; however, this does not mitigate the misleading
omission of risk information. By omi ing the risks associated with
DICLEGIS, the social media post misleadingly fails to provide mate-
rial information about the consequences that may result from the use
of the drug and suggests that it is safer than has been demonstrated.
In addition, the social media post is misleading because it fails to
provide material information regarding DICLEGIS’ full approved in-
dication, including important limitations of use. Specifically, it fails
to convey that DICLEGIS has not been studied in women with hyper-
emesis gravidarum.
OPDP requests that Duchesnay immediately cease misbranding
DICLEGIS and/or cease introducing the misbranded drug into inter-
state commerce.
United States v. Caronia 703 F.3d 149 (2d Cir. 2012)
Under the Federal Food, Drug and Cosmetic Act, before drugs are
distributed into interstate commerce, they must be approved by the
FDA for specific uses. To obtain FDA approval, drug manufacturers
are required to demonstrate, through clinical trials, the safety and
efficacy of a new drug for each intended use or indication.
Once FDA-approved, prescription drugs can be prescribed by
doctors for both FDA-approved and -unapproved uses; the FDA gen-
erally does not regulate how physicians use approved drugs. Indeed,
courts and the FDA have recognized the propriety and potential pub-
lic value of unapproved or off-label drug use. Off-label use is an ac-
cepted and necessary corollary of the FDA’s mission to regulate in
this area without directly interfering with the practice of medicine.
FDA-approved indications were not intended to limit or interfere
with the practice of medicine nor to preclude physicians from using
their best judgment in the interest of the patient.The FDA itself has
observed:
Once a drug has been approved for marketing, a physician
may prescribe it for uses or in treatment regimens or pa-
tient populations that are not included in approved label-
ing. Such ”unapproved” or, more precisely, ”unlabeled”
uses may be appropriate and rational in certain circum-
stances, and may, in fact, reflect approaches to drug ther-
apy that have been extensively reported in medical litera-
ture.
The FDCA prohibits ”misbranding.” A drug is misbranded if, inter
alia, its labeling fails to bear ”adequate directions for use,”, which 21 U.S.C. § 352(f )
1118 CHAPTER 11. BIOTECHNOLOGY
FDA regulations define as ”directions under which the lay[person]
21 C.F.R. § 201.5 can use a drug safely and for the purposes for which it is intended.”3
FDA regulations define intended use by reference to ”the objective
intent of the persons legally responsible for the labeling of drugs,”
which may be demonstrated by, among other evidence, ”oral or writ-
ten statements by such persons or their representatives” and ”the cir-
cumstances that the article is, with the knowledge of such persons or
their representatives, offered and used for a purpose for which it is
21 C.F.R. § 201.128. neither labeled nor advertised.”
The consequences for misbranding are criminal. Pharmaceuti-
cal manufacturers and their representatives can face misdemeanor
charges for misbranding or felony charges for fraudulent misbrand-
ing. The government has repeatedly prosecuted – and obtained con-
victions against – pharmaceutical companies and their representa-
tives for misbranding based on their off-label promotion. The FDCA
and its accompanying regulations do not expressly prohibit the ”pro-
motion” or ”marketing” of drugs for off-label use. The regulations
do recognize that promotional statements by a pharmaceutical com-
pany or its representatives can serve as proof of a drug’s intended
use. Off-label promotional statements could thus presumably consti-
tute evidence of an intended use of a drug that the FDA has not ap-
proved. The FDA, however, has concluded that ”an approved drug
that is marketed for an unapproved use (whether in labeling or not)
is misbranded because the labeling of such drug does not include
‘adequate directions for use.’” Thus, the government has treated pro-
motional speech as more than merely evidence of a drug’s intended
use – it has construed the FDCA to prohibit promotional speech as
misbranding itself.
Orphan Medical manufactured the drug Xyrem, a powerful cen-
tral nervous system depressant. Xyrem can cause serious side ef-
fects, including difficulty breathing while asleep, confusion, abnor-
mal thinking, depression, nausea, vomiting, dizziness, headache,
bedwe ing, and sleepwalking. If abused, Xyrem can cause addi-
tional medical problems, including seizures, dependence, severe
withdrawal, coma, and death. Xyrem’s active ingredient is gamma-
hydroxybutryate (”GHB”). GHB has been federally classified as the
”date rape drug” for its use in the commission of sexual assaults.
Despite the risks associated with Xyrem and GHB, the FDA ap-
proved Xyrem for two medical indications. In July 2002, the FDA ap-
proved Xyrem to treat narcolepsy patients who experience cataplexy,
a condition associated with weak or paralyzed muscles. In Novem-
3
A drug is also misbranded if, inter alia: its label is false or misleading; the label
fails to display required information prominently; its container is misleading; or it
is dangerous to health when used in the dosage, manner, frequency, or duration
prescribed, recommended, or suggested on the label.
D. DRUG MARKETING 1119
ber 2005, the FDA approved Xyrem to treat narcolepsy patients with
excessive daytime sleepiness (”EDS”), a neurological disorder caused
by the brain’s inability to regulate sleep-wake cycles.
Caronia was audio-recorded on two occasions as [he] promoted
Xyrem for unapproved uses, including unapproved indications [in-
cluding chronic fatigue chronic pain, and restless leg] and unap-
proved subpopulations [patients under 16]. He was found guilty of
conspiracy to introduce a misbranded drug into interstate commerce.
On appeal, Caronia principally argues that the misbranding pro-
visions of the FDCA prohibit off-label promotion, and therefore, un-
constitutionally restrict speech. Caronia argues that the First Amend-
ment does not permit the government to prohibit and criminalize a
pharmaceutical manufacturer’s truthful and non-misleading promo-
tion of an FDA-approved drug to physicians for off-label use where
such use is not itself illegal and others are permi ed to engage in such
speech.
As off-label drug use itself is not prohibited, it does not follow
that prohibiting the truthful promotion of off-label drug usage by a
particular class of speakers would directly further the government’s
goals of preserving the efficacy and integrity of the FDA’s drug ap-
proval process and reducing patient exposure to unsafe and ineffec-
tive drugs. Prohibiting off-label promotion by a pharmaceutical man-
ufacturer while simultaneously allowing off-label use ”paternalisti-
cally” interferes with the ability of physicians and patients to receive
potentially relevant treatment information; such barriers to informa-
tion about off-label use could inhibit, to the public’s detriment, in-
formed and intelligent treatment decisions. In fact, in granting safe
harbor to manufacturers by permi ing the dissemination of off-label
information through scientific journals, the FDA itself recognizes that
public health can be served when health care professionals receive
truthful and non-misleading scientific and medical information on
unapproved uses of approved drugs.
If the government is concerned that off-label promotion may mis-
lead physicians, it could guide physicians and patients in differentiat-
ing between misleading and false promotion, exaggerations and em-
bellishments, and truthful or non-misleading information. The gov-
ernment could develop its warning or disclaimer systems, or develop
safety tiers within the off-label market, to distinguish between drugs.
The government could require pharmaceutical manufacturers to list
all applicable or intended indications when they first apply for FDA
approval, enabling physicians, the government, and patients to track
a drug’s development. To minimize off-label use, or manufacturer
evasion of the approval process for such use, the government could
create other limits, including ceilings or caps on off-label prescrip-
tions. The FDA could further remind physicians and manufacturers
1120 CHAPTER 11. BIOTECHNOLOGY
of, and even perhaps further regulate, the legal liability surround-
ing off-label promotion and treatment decisions.[11] Finally, where
off-label drug use is exceptionally concerning, the government could
prohibit the off-label use altogether.
Accordingly, even if speech can be used as evidence of a drug’s
intended use, we decline to adopt the government’s construction of
the FDCA’s misbranding provisions to prohibit manufacturer promo-
tion alone as it would unconstitutionally restrict free speech. We con-
strue the misbranding provisions of the FDCA as not prohibiting and
criminalizing the truthful off-label promotion of FDA-approved pre-
scription drugs.
Wyeth v. Levine
129 S. Ct. 1187 (2009)
Phenergan is Wyeth’s brand name for promethazine hydrochloride,
an antihistamine used to treat nausea. The injectable form of Phener-
gan can be administered intravenously through either the ”IV-push”
method, whereby the drug is injected directly into a patient’s vein, or
the ”IV-drip” method, whereby the drug is introduced into a saline
solution in a hanging intravenous bag and slowly descends through a
catheter inserted in a patient’s vein. The drug is corrosive and causes
irreversible gangrene if it enters a patient’s artery.
Diana Levine’s injury resulted from an IV-push injection of Phen-
ergan. Phenergan entered Levine’s artery, either because the needle
penetrated an artery directly or because the drug escaped from the
vein into surrounding tissue (a phenomenon called ”perivascular ex-
travasation”) where it came in contact with arterial blood. As a result,
Levine developed gangrene, and doctors amputated first her right
hand and then her entire forearm. In addition to her pain and suf-
fering, Levine incurred substantial medical expenses and the loss of
her livelihood as a professional musician. Although Phenergan’s la-
beling warned of the danger of gangrene and amputation following
inadvertent intra-arterial injection, Levine alleged that the labeling
was defective because it failed to instruct clinicians to use the IV-drip
method of intravenous administration instead of the higher risk IV-
push method.
The question presented is whether federal law pre-empts Levine’s
claim that Phenergan’s label did not contain an adequate warning
Wyeth and PLIVA are technically failure- about using the IV-push method of administration.
to-warn products liability cases. But if Wyeth first argues that Levine’s state-law claims are pre-empted
you think of an "adequate warning" as because it is impossible for it to comply with both the state-law duties
a statement required to make a prod-
underlying those claims and its federal labeling duties. The FDA’s
uct's label not misleading, they have
a lot in common with false advertising
premarket approval of a new drug application includes the approval
law. of the exact text in the proposed label. Generally speaking, a manu-
facturer may only change a drug label after the FDA approves a sup-
plemental application. There is, however, an FDA regulation that
D. DRUG MARKETING 1121
permits a manufacturer to make certain changes to its label before
receiving the agency’s approval. Among other things, this ”changes
being effected” (CBE) regulation provides that if a manufacturer is
changing a label to ”add or strengthen a contraindication, warning,
precaution, or adverse reaction” or to ”add or strengthen an instruc-
tion about dosage and administration that is intended to increase the
safe use of the drug product,” it may make the labeling change upon
filing its supplemental application with the FDA; it need not wait for
FDA approval.
Wyeth suggests that the FDA, rather than the manufacturer, bears
primary responsibility for drug labeling. Yet through many amend-
ments to the FDCA and to FDA regulations, it has remained a central
premise of federal drug regulation that the manufacturer bears re-
sponsibility for the content of its label at all times. It is charged both
with crafting an adequate label and with ensuring that its warnings
remain adequate as long as the drug is on the market. Of course, the
FDA retains authority to reject labeling changes made pursuant to
the CBE regulation in its review of the manufacturer’s supplemental
application, just as it retains such authority in reviewing all supple-
mental applications. But absent clear evidence that the FDA would
not have approved a change to Phenergan’s label, we will not con-
clude that it was impossible for Wyeth to comply with both federal
and state requirements.
PLIVA, Inc. v. Mensing
131 S. Ct. 2567 (2011)
Metoclopramide is a drug designed to speed the movement of food
through the digestive system. The Food and Drug Administration
(FDA) first approved metoclopramide tablets, under the brand name
Reglan, in 1980. Five years later, generic manufacturers also began
producing metoclopramide. The drug is commonly used to treat
digestive tract problems such as diabetic gastroparesis and gastroe-
sophageal reflux disorder. Evidence has accumulated that long-term
metoclopramide use can cause tardive dyskinesia, a severe neurolog-
ical disorder. Accordingly, warning labels for the drug have been
strengthened and clarified several times [in 1985, 2004, and 2009].
Gladys Mensing and Julie Demahy, the plaintiffs in these consol-
idated cases, were prescribed Reglan in 2001 and 2002, respectively.
Both received generic metoclopramide from their pharmacists. After
taking the drug as prescribed for several years, both women devel-
oped tardive dyskinesia.
In separate suits, Mensing and Demahy sued the generic drug
manufacturers that produced the metoclopramide they took. Each
alleged, as relevant here, that long-term metoclopramide use caused
her tardive dyskinesia. Mensing and Demahy have pleaded that the
Manufacturers knew or should have known of the high risk of tardive
1122 CHAPTER 11. BIOTECHNOLOGY
dyskinesia inherent in the long-term use of their product. They have
also pleaded that the Manufacturers knew or should have known that
their labels did not adequately warn of that risk. The parties do not
dispute that, if these allegations are true, state law required the Man-
ufacturers to use a different, safer label.
Federal law imposes far more complex drug labeling require-
ments. [Under Hatch-Waxman,] brand-name and generic drug man-
ufacturers have different federal drug labeling duties. A brand-name
manufacturer seeking new drug approval is responsible for the accu-
racy and adequacy of its label. A manufacturer seeking generic drug
approval, on the other hand, is responsible for ensuring that its warn-
ing label is the same as the brand name’s.
According to the FDA, the Manufacturers could have proposed –
indeed, were required to propose – stronger warning labels to the
agency if they believed such warnings were needed. If the FDA
had agreed that a label change was necessary, it would have worked
with the brand-name manufacturer to create a new label for both the
brand-name and generic drug.
Where state and federal law directly conflict, state law must give
way. We have held that state and federal law conflict where it is im-
possible for a private party to comply with both state and federal re-
quirements.
We find impossibility here. It was not lawful under federal law
for the Manufacturers to do what state law required of them.
If the Manufacturers had independently changed their labels to
satisfy their state-law duty, they would have violated federal law.
Taking Mensing and Demahy’s allegations as true, state law imposed
on the Manufacturers a duty to a ach a safer label to their generic
metoclopramide. Federal law, however, demanded that generic drug
labels be the same at all times as the corresponding brand-name drug
labels. Thus, it was impossible for the Manufacturers to comply with
both their state-law duty to change the label and their federal law
In 2013, the FDA announced a complex duty to keep the label the same.
proposed rule to allow generics to up- The federal duty to ask the FDA for help in strengthening the
date their labels. As of 2016, the final
corresponding brand-name label, assuming such a duty exists, does
rule was still pending.
not change this analysis. Although requesting FDA assistance would
have satisfied the Manufacturers’ federal duty, it would not have sat-
isfied their state tort-law duty to provide adequate labeling. State
law demanded a safer label; it did not instruct the Manufacturers to
communicate with the FDA about the possibility of a safer label.
SmithKline Beecham v. Watson Pharmaceuticals
211 F.3d 21 (2d Cir. 2000)
This appeal arises out of a copyright action alleging infringement of
appellant’s copyright in a user’s guide and audiotape developed for
its Nicore e-brand gum. Appellees, in obtaining approval to sell a
D. DRUG MARKETING 1123
competing generic nicotine gum product, were directed by the FDA
to use labeling almost identical to appellant’s copyrighted guide and
tape.
Appellees cannot be liable for copyright infringement because the
Hatch-Waxman Amendments require generic drug producers to use
the same labeling as was approved by the FDA for, and is used by,
the producer of the pioneer drug.
Appellant SmithKline manufactures and sells Nicore e nicotine
polacrilex gum, an over-the-counter product designed to help smok-
ers overcome the cigare e habit.
Appellee Watson obtained FDA approval for the OTC market-
ing of a generic version of nicotine gum intended to compete di-
rectly with Nicore e. To obtain that approval from the FDA, Watson
had to comply with the requirement imposed by the Hatch-Waxman
Amendments that ”the labeling proposed for [its] new drug [be] the
same as the labeling approved for” Nicore e. Thus, Watson’s generic 21 U.S.C. § 355(j)(2)(A)(v)
nicotine gum was accompanied by a user guide and audio tape that
were virtually identical to SmithKline’s.
Watson asserts that this copying, having been dictated by the FDA,
is a ”fair use” protected under 17 U.S.C. § 107. The United States, in its
amicus curiae brief, argues instead that in submi ing its copyrighted
materials for FDA approval, SmithKline gave the FDA an implied,
nonexclusive license to permit or require generic drug applicants to
copy the user’s guide and audiotape in their own nicotine gum pack-
aging.
In our view, the case can more easily be disposed of on the
straightforward ground that the Hatch-Waxman Amendments to the
FFDCA not only permit but require producers of generic drugs to
use the same labeling as was approved for, and is used in, the sale
of the pioneer drug, even if that label has been copyrighted. Because
those Amendments were designed to facilitate rather than impede
the approval and OTC sale of generic drugs, the FDA’s requirement
that Watson use much of SmithKline’s label precludes a copyright
infringement action by SmithKline.
If SmithKline’s copyright claim has merit, then Watson cannot re-
alistically use the ANDA process to sell its generic nicotine gum be-
cause it will either have to change the label and lose FDA approval or
be enjoined from using a label that infringes SmithKline’s copyright.
We are thus faced with a conflict between two statutes. The Hatch-
Waxman Amendments require generic drug producers to use label-
ing that will infringe upon copyrights in labels of pioneer drugs. The
Copyright Act seems to prohibit such copying. However, applying
the familiar canon that, where two laws are in conflict, courts should
adopt the interpretation that preserves the principal purposes of each,
the conflict is less stark and more easily resolved than it might seem.
1124 CHAPTER 11. BIOTECHNOLOGY
The purposes of the Hatch-Waxman Amendments would be severely
undermined if copyright concerns were to shape the FDA’s applica-
tion of the ”same” labeling requirement.
Our point here is not only that Congress would have provided ex-
plicitly that the Hatch-Waxman Amendments trump the copyright
laws had it foreseen the statutory conflict exposed by the present
action, although we firmly believe that to be obvious. Our point is
also that the profit sought by the creator of the pioneer drug label
flows primarily from the administrative approval of the drug and the
patent and exclusivity periods free from competition that follow. The
pertinent purpose of the copyright laws – to encourage the produc-
tion of creative works by according authors a property right in their
works so that authors will not have to share profits from their labors
with free riders – is not seriously implicated by allowing the ”same”
labeling requirement to trump a copyright under the Hatch-Waxman
Amendments. It is simply not conceivable that, if we reject SmithK-
line’s claim, pioneer drug producers will so fear the copying of labels
by future generic drug producers that some pioneer producers – or
even one of them – will lack the incentive to create labeling needed
for FDA approval.
Coda
Bizarro World Redux Problem
Your client is interested in commercializing one of the following ideas
and is curious what forms of intellectual property protection she can
and should use. How would you advise her to proceed?
• A 75,000-word novel about a boy who discovers that he is a wiz-
ard
• A new drug for treating heart disease, which will cost $100 mil-
lion to test in humans
• An easier-to-hold design for a pipe wrench
• A process for producing pure aluminum from aluminum ore
that reduces the cost by 85%.
• A catchy song about taking revenge on a cheating boyfriend,
recorded in her kitchen with lots of background noise
• A recut version of a popular movie, which takes five minutes
off the running time and makes it much more suspenseful and
exciting
• A sketch for an elegant off-the-shoulder dress
• A joke about traffic in Los Angeles
• The perfect name for a laundromat
Now look back at the Bizarro World Problem from the first chapter.
How have your answers changed? How different is our world from
Bizarro World? How is ours be er because it has intellectual prop-
erty law, and how is it worse?