Chapter 8

Creation and Notice

A copyright exists automatically upon the creation of the work. Authors are not required to register the creation with the government in order to protect the work, although it is advised.

Patent Exhaustion

A patent holder's rights over the patented product generally end once it is sold to a lawful purchaser. This doctrine, patent exhaustion, gives the buyer or anyone to whom he resells the article, the right to freely use or resell the article. However, the purchaser of a patentable article does not have the right to reproduce it under the patent exhaustion doctrine.

Patents

Provides its owner with the exclusive right to make, use, or sell an invention or process during the patent period which is usually 20 years from the date of the filing.

Principal Considerations

Licensing agreements require careful partner selection.

Standards for Patentability

The U.S. awards patents based on the "first to file" standard used in most nations of the world.

Maintaining Secrecy

The owner must take reasonable steps to maintain secrecy.

Patent Infringement

Patent infringement occurs when a person makes, uses, or sells the patented invention without the patent holder's authorization.

Risks of Licensing

Perhaps the greatest risk is that the licensee, after gaining access to the licensor's technology, will sever the licensing relationship and become a competitor.

Authors Guild v. Google

The court found that Google's making of a digital copy of a book to provide a search function is a transformative use which augments public knowledge by making available information about an author's book without providing the public with a substantial substitute for those copyrighted books. The court reasoned also that authors' derivative rights do not include an exclusive right to supply information of the sort provided by Google about their works.

Playboy Enterprises v. Netscape Communications

The court found that Netscape's use of the trademark for business purposes in commerce diluted Playboy's trademark.

BMG Music v. Gonzalez

The court found that a copyright infringer is generally prohibited from reducing its liability by claiming innocent infringement if proper notice has been given. Here, even though the copyright notice appeared on CDs rather than on the internet where defendant accessed the music files, she could have learned of the copyright if she has inquired.

Arista Records v. Flea World

The court found that a flea market was liable for vicarious copyright infringement because it permitted vendors to illegally sell copyrighted merchandise.

Association for Molecular Pathology v. Myriad Genetics

The court found that a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated. However, synthetically made DNA is patent eligible because it is not naturally occurring.

McBee v. Delica Co

The court found that the U.S. court did not have jurisdiction over this trademark claim because there was no evidence proving American customers actually saw Delica's products.

Patentability of Incremental Advances

A court must consider the scope and content of the prior art; differences between the prior art and claims at issue; and the level of ordinary skill in the new art.

Fair Use

A defendant might be able to avoid liability if his use of the copyrighted material falls within the fair use defense. There are four factors for evaluating whether a use is fair use: (1) purpose and character of the use; (2) nature of the copyrighted work; (3) amount and substantiality of portions used; and (4) effect on the market.

Trademark Infringement

A plaintiff must show (1) it possesses the trademark, (2) the defendant used the mark in commerce, (3) the defendant's use of the mark was in connection with a sale, distribution, or advertising of goods or services, (4) the defendant's use of the mark will likely confuse customers.

Trademarks

A trademark is a distinctive word, name, symbol or device used by a business to distinguish its goods from those of its competitors.

The Registration Process

A trademark is not eligible for registration in the absence of prior commercial use.

Negotiating the Agreement

Licensing agreements, including global agreements, require meticulous planning and a great deal of flexibility.

Advantage of Licensing

Numerous benefits are provided to both the licensor and the licensee. Licensors receive royalty payments and market presence. Licensees gain access to products and ideas that otherwise might not be available and may gain a competitive advantage.

Bikram's Yoga College v. Evolation Yoga

The Court held that the plaintiff's "graceful flow" sequence is an idea and that Copyright law excludes protection for any such idea regardless of the form in which it is used within a compilation" or "choreographic" work.

Kirstsaeng v. John Wiley & Sons

The U.S. Supreme Court has found that the first sale doctrine permits the owner of a lawfully purchased copyrighted work, even in a foreign country, to resell it in the U.S. without limitations imposed by the copyright holder.

Apple v. Samsung Electronics

The court found that Apple (having previously proven patent infringement by Samsung) was entitled to a permanent injunction against the sale of Samsung's smartphones in the United States. Apple needed only to prove that certain features of the Samsung phone related to the infringement and were important to customers when they were considering the phone and not that the infringing features were the sole reason for custom interest.

Trademark Rights

The first to use the trademark in commercial use within the U.S. will gain the "first in time equals first in right" principle.

Nature of Licensing

The licensing agreement permits an intellectually property owner to grant another the use of the protected technology in return for compensation.

Parties to the Licensing Agreement

The licensor owns the property and permits the licensee to use the property. The license itself cannot exceed the life of the intellectual property.

Extraterritorial Reach of U.S. Patent Law

When an infringement occurs overseas in violation of a company's patent rights in the foreign country, the patent holder generally must look to the courts of that nation for redress.

Territoriality Principle

priority of trademark rights in the US depends solely upon priority of use in the US, not on priority of use anywhere in the world.

Authors Guild v. Google

the court found that Google providing digital copies of a book subject to copyright to libraries did not make Google a contributory copyright infringer since Google only authorized non-infringing uses. The mere speculative possibility that the libraries might allow use of their copies in an infringing manner was not sufficient to find that Google was guilty as alleged.

Trademark Dilution

Trademark dilution laws focus on protecting the investment of trademark owners.

Copyright Infringement

a. To establish direct copyright infringement, a plaintiff must prove (1) ownership of a valid copyright and (2) copying of the elements of the work are original unless the actions fall within the fair use doctrine. b. Contributory copyright infringement requires the plaintiff to prove (1) direct infringement by a primary infringer, (2) knowledge of the infringement by the defendant, and (3) material contribution to the infringement by the defendant. Vicarious copyright infringement requires the plaintiff to prove (1) direct infringement my primary party, (2) direct financial benefit to the defendant, and (3) the defendant's right and ability to supervise the infringers.

Copyrights

A copyright prohibits the unauthorized reproduction of creative works. However, the Copyright Act expressly excludes protection for "...any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work."

The Need to License

In order to be successful, an intellectual property owner may have few options other than licensing it technology to others.

Reasons for Legal Protection

Trademarks are given legal protection to assist purchasers in distinguishing among the many competitors in a particular market. Trademarks must be distinctive to merit legal protection.

Famous Mark Exception

US consumers identify goods with a trademark that has been used abroad.

Extraterritorial Reach of U.S. Trademark Laws

While courts have recognized that U.S. trademark law may reach overseas, they have never adopted a precise test to govern such cases.

Misappropriation

An individual may freely use the trade secrets of another if he discovers them through proper channels such as reverse engineering. An individual is liable for disclosing or using a trade secret if she (1) acquired it by improper means; (2) obtained it from one who acquired it by improper means; (3) breached a duty of confidentiality regarding the secret; or (4) acquired it from someone who breached a duty of confidentiality regarding the secret.

Bed'N Linen v. Dutta-Roy

The court found the terms "By Design" and "bydesignfurniture.com" were eligible for trademark because "By Design" had been used in connection with the proprietor's goods or service for longer than five years and was in the minds of the consuming public associated not with the product but the producer; therefore, the name had acquired a secondary meaning.

Kimble v. Marvel Entertainment

The court held that all rights granted by license from a patentee terminate when the patent itself expires.

First Sale Doctrine

The doctrine states that the Copyright Act allows a purchaser of copyrighted material "lawfully made...without the authority of the copyright, to sell or otherwise dispose of the possession of that copy."

Limits on Negotiating Authority

Foreign host countries frequently refuse to enforce contractual provisions granting liberal termination rights to the licensor. In the United States, many states have laws protecting the rights of licensees.

Trade Secrets

Generally, a trade secret is developed by a firm and includes secret formulas, devices, processes, techniques, and compilations of information and must provide its owner with competitive advantage.

Patentable Creations

In the U.S. the following things may be patented: processes, machines, products, composition of elements, improvements of processes and machines, product designs, and asexually produced plants.

Technology Transfer Agreements

Technology transfer occurs when a business licenses its intellectual property to another.

Intellectual Property

intangible creative work that is embodied in physical form and includes copyrights, trademarks, and patents

Seneca Companies v. Midway Industrial Sup

the court reasoned that the owner of a trade secret may request monetary damages when there is a "misappropriation" of such trade secret if it was acquired by improper means (including from or through a person who had utilized improper means to acquire it.) The owner need not allege that the defendant actually used its trade secret to state a claim. (The extent to which a defendant uses a misappropriated trade secret becomes relevant only when determining damages.)