Intellectual Property Attack Outline h4i4a

Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE

Table of Contents Trademark Law 1 Copyright Law 7 Patent Law

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Remedies 25 Indirect Infringement

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The Right to Copy and Overlapping Regimes

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Contract and Controversy over the Extension of IP Protection

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I.

Trademark Law

a) Is the trademark protectable? 

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Must use mark “to identify and distinguish goods” and “to indicate source” o Indicate source = must create separate and distinct commercial impression that identifies source of the goods o Bona fide use (not token)  For goods, requires affixation on packaging, good, containers, label, associated documents  For services, requires use in advertising, etc.  If you don’t , only get priority in geographical area where used or established  Use in interstate commerce provides priority date UNLESS mark requires secondary meaning, in which case priority determined by when secondary meaning acquired o OR intent to use AND application to  Must be followed by bona fide use within 6 months (may be extended up to three years if you have good cause: 15 USC 1051(d))  Constructive (filing TM application) use is nationwide: if you a TM, you’re considered to have used it across the country  Though if small party can show it had been using TM in little local area, court may protect those rights  Intent to use application gives priority date  Intent to use must be based on bona fide intent to use mark Must continue use o If A abandons mark, can B adopt it?  No clear rule, but if B is deceptive, possible false advertising or cancellation claims  Open question if consumer confused w/o deception by B Mark must be used in commerce (defined as use in ordinary course of trade) Priority: need to be the first person to use it o Is mark ed?  If not, priority only in geographical area where used or d  If yes, nationwide priority o Use in interstate commerce provides priority date UNLESS mark requires secondary meaning, in which case priority determined by when secondary meaning acquired o Can’t establish priority via small sales in particular city and a few items mailed to other states  must be enough to link mark with brand in consumers’ minds and put other producers on notice (Zazu, 7th Cir.) o Analogous use:  Say Brooklyn Dodgers were about to move to LA, had done advertising, etc.; then later get TM rights in “LA Dodgers,” could get priority over someone who just started using mark on restaurant or t-shirt 1

Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE  

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

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

b) How do you your TM?

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Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE 

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

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If yes, will customers believe misdescription (i.e., will people think that “cameos” actually contain cameos?)  If yes, then deceptively misdescriptive, but still okay if it has secondary meaning unless misdescription is material to decision to purchase: ask customers: are you buying this because you think it contains cameos?  Geographical  1052(a): bars registration of geographical indication which, when used in connection w/wines or spirits, identifies a place other than the origin of the good, thanks to TRIPS Agreement  1052(e)(2): primarily geographically descriptive term can’t be ed unless it has secondary meaning, or unless it’s used as a collective or certification mark (e.g., certifying that this wine comes from Napa)  1052(e)(3): if it’s primarily geographically deceptively misdescriptive, even if secondary meaning, can’t be ed unless grandfathered in pre-TRIPS  Test:  Descriptive: secondary meaning OK, no secondary meaning can’t  Misdescriptive: deceptive can’t be ed, non-deceptive OK (consumers don’t associate product with place OR arbitrary, e.g., Atlantic Monthly)  In Re Nantucket (Court of Customs and Patent Appeals): geographically misdescriptive b/c shirts don’t come from Nantucket, but people don’t necessarily think shirts came from there  this is acceptable use of “Nantucket” o Primarily merely a surname, unless acquires secondary meaning  Traditionally, always allowed to use own name in products; now, balance interest in using own name from resultant consumer confusion  Gallo problem: ask: are these marks likely to cause confusion at all, or are cheese and salami different enough from wine that people will think they won’t have anything to do with winery? Who acquired secondary meaning first? Are cheese and salami necessary expansion of mark? c) How do you sue for infringement? (32(1))  Need to show five elements: o Ownership of valid TM  Person who controls the first use of the mark for relevant goods/services is owner (typically employer) (15 USC 1055) o Used by alleged infringer o Use occurred in commerce  Use required for infringement is broader than type of use necessary to registration: doesn’t require use on good, containers, packaging, labels, associated documents  just needs to be used in commerce o Used in connection with sale, offering for sale, distribution, or advertising of goods or services

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

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

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when confronted with identical mark on far removed goods/services, will make an “association” w/famous mark b/c no other significance to word other than as famous TM Non-coined, fanciful : Amazon online seller, Saturn autos, Tide detergent: cannot be presumed that ordinary consumer, when confronted with these kids of marks used on nonconfusing, far removed goods or services, will inevitably and necessarily think of famous mark  must prove association For blurring, need to show that association will cause “impairment of distinctiveness of mark”

o Tarnishment  Famous mark must be used on defendant’s unsavory goods (“Enjoy Cocaine”)  Using mark to criticize mark’s owner not tarnishment  Using mark to display or refer to plaintiff’s own product legal Only need to show likelihood of dilution, not actual dilution Diluter must use mark/trade name in commerce

e) Are any defenses to applicable?  Infringement defenses (15 USC 1115(b)) o Registration obtained fraudulently o Abandonment  Must be intentional, actual nonuse for two consecutive years  Rule against assignments in gross: can’t sell TM to someone who wants to use it for something different  Companies also get in trouble for naked licensing: keep TM, license to someone else who can use at same time  Need to exercise reasonable amount of quality control when you license (Dawn Donuts; 2nd Cir.) o Genericity  Murphy Bed (2nd Cir.) case: term can become generic  Look at newspapers, magazines, dictionaries, decision of PTO/TTAB, ads to see if public using term as generic term o Unclean hands o Fair use  First Amendment comes into fair use question  Classic fair use: accurate usage to describe product or their geographic origin  Don’t need to prove no likelihood of consumer confusion (KP Permanent Make-Up; SC)  Some possibility of consumer confusion must be compatible with fair use  possible tests: o Greater likelihood of confusion  narrower scope of fair use o Accurate use  fair use o Multi-factor test (Restatement): accuracy, commercial justification, mark strength 6

Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE Nominative fair use: non-TM use: comparative advertising and other referential usage  9th Cir. three-factor test (New Kids on the Block) o Could you have described what you’re describing w/o TM? o Has the mark been used by defendant more than is reasonably necessary to identify plaintiff? o Has defendant done anything that would falsely suggest sponsorship or endorsement by TM holder? o Burden of proof on plaintiff to show it doesn’t meet these requirements o Replaces likelihood of confusion inquiry rd  3 Cir. test (LendingTree) o Plaintiff must prove likelihood of confusion o Then, burden shifts to defendants to show use is fair  Is there a title at issue?  Ginger Rogers (2nd Cir.) In context of allegedly misleading titles using a celebrity’s name, that balance won’t lead to infringement unless title has no artistic relevance to underlying work or, if it has some, unless the title explicitly misleads as to source/content of work o Priority o Antitrust o Functionality o Laches, estoppel, acquiescence Dilution Defenses o Fair use, other than as a designation of source, including o Comparative advertising o Parody, criticism, commentary upon famous mark owner or its goods or services  Barbie Girl (9th Cir.): is speech noncommercial? Protected  Some courts make it easier to get a fair use exemption for parody (borrows from copyright context)  If court finds that likely to create impression that TM owner sponsored it, may not permit (Michelob Oily case) o News reporting and news commentary o Any noncommercial use First Amendment o Some circuits treat separately, others as part of likelihood of confusion analysis or fair use defenses 

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II.

Copyright Law

a) Is copyright protectable?  Is it original? o Did YOU independently create it?  Ask whether two works are “substantially the same” 7

Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE Often, won’t have direct evidence of someone’s independent creation: rely on circumstantial evidence  Some courts have found no independent creation when someone heard a song, forgot they’d heard it, and wrote a similar song, or song played on radio for a year o Does it embody a modicum of creativity?  De minimis expression not original: rhythm, words and short phrases (names, titles, slogans), menu items  Courts don’t judge artistic merit of work o Is it a compilation or a collective work?  “Compilation” = work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, arranged in such a way that the resulting work as a whole constitutes an original work of authorship  “Collective work” = periodical issue, anthology, or encyclopedia in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole  Facts aren’t copyrightable (Feist; SC)  Can have a copyright in the creative aspects of a compilation or collective work if the way you organize it, etc., is creative (Feist: right to introduction, original material in yellow pages ads; but alphabetical arrangement and selection of which data to include fell below threshold) Does it meet fixation requirement? o Work is fixed in a tangible medium of expression when its embodiment in a copy or phonorecord [technical ] … sufficiently stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration o Copies = material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device o Code can count as fixed medium of expression o Participation of video game player doesn’t prevent fixation o Writing something down yourself — even if no one will see it — counts as fixation o Need authority of the author to count as fixation Have necessary formalities been met? o Notice  1909 Act (for pre-1978 works): before you published, you had common law protection; after, either you gave notice via ©, in which you’d be eligible for federal © protection, or you didn’t  public domain  1976 Act (for post-1978 works): notice required, but you had five years to cure inadequate notice  Post-Berne: notice optional, still useful to avoid innocent infringer defense o Registration  1909 Act: registration optional, shorter , had to renew to retain copyright 

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Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE 1976 Act: registration optional but some advantages: prima facie evidence of valid copyright, was prerequisite to suit  Incentives: statutory damages and attorney’s fees available o Deposit with LoC  Also prerequisite to suit, but only for US works post-Berne  Potential sanctions for failure to deposit copy of work o Recording transfer  If you don’t do it, a bona fide purchaser for value of copyright voids transfer Is the subject matter protectable? o Literary works  Verbal, can be recorded on pretty much any kind of material object  Binary code is included (KS thinks this is purely policy-driven: most people can’t read that and know what it says!) o Musical works and sound recordings  Sound recordings = works that result from the fixation of a series of musical, spoken, or other sounds, but not including the sounds accompanying a motion picture or other AV work, regardless of the nature of the material objects … in which they’re embodied  Sound recording doesn’t include sound accompanying a motion picture  This means that output of musical creativity can have lots of copyrights involved: composition, arrangement, lyrics as literary work, sound recording  if you want to use particular song, may need to get lots of different licenses o Dramatic works  Portraying story by means of dialogue or acting, can often be literary o Pantomimes and choreographic works  Must still be fixed, either via recording or certain style of notation o Pictorial, graphic, and sculptural works  Includes fine arts, applied arts, photographs, prints/reproductions, maps, globes, charts, diagrams, models, technical drawings (incl. architectural plans), includes works of artistic craftsmanship in form but not in mechanical or utilitarian aspects  “Useful articles” doctrine: useful articles can be protected by copyright only if design has pictorial, graphic, or sculptural features that you can identify separately o Motion pictures and other audiovisual works  AV works = consist of a series of related images which are intended to be shown by the use of machines or devices … together w/accompanying sounds  Lots of different copyrights can be involved: screenplay w/literary copyright, motion picture copyright, musical works and arrangements o Architectural works  Can fix architectural work by building the building, people who copy building can be liable for infringement  Originally, could say building protected as PGS, but would have to decide which aspects were utilitarian 

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Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE  Only habitable structures — not, say, bridges — included  Can take pictures of buildings  postcard/book, don’t need license  Don’t need copyright license to take down building, etc. o Derivative works and compilations  Work based on a preexisting work  Could get copyright protection for derivative works, but you need licenses from all of those whose work you’re sampling  Also have to meet originality requirement  Some case law that suggests that originality requirement for derivative works higher than other works — still pretty minimal  Don’t want multiple copyrights on the same thing  Even if you know who original author was, someone else probably holds that copyright by now: for older works, problems figuring out who owns it o Copyright protection doesn’t extend to:  Ideas  Idea is the idea of a bookkeeping system, or even the general idea that you should keep track of disbursements and receipts and record them; expression is the particular categories you use, the way you lay out forms, etc. (Baker; SC)  Nicholas v. Universal Pictures (2nd Cir.): look at “patterns of increasing generality”: goal is to figure out at each level — story, plot outline, subplot, general characters/scenes, specific character elements, text — what is copyrightable  CAI v. Altai (2nd Cir.): abstraction, filtration, comparison o Abstraction: retrace designer’s steps: attempt to figure out what the idea is (can’t be protected); for computer programs, code  program’s ultimate function (most protection  no protection) o Filtration: examining structural components at each level of abstraction to determine whether particular inclusion at that level was “idea” or was dictated by considerations of efficiency. Was it required by factors external to program? Was it taken from public domain? o Comparison: compare what’s left after above steps and whether defendant copied that, as well as assess copied portion’s relative importance in overall program  Procedure  Process  System  Method of operation  Command menu hierarchy a method of operation (Lotus), but still not copyrightable because people get used to it — policy decision about how best to promote innovation  Concept

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Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE     

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

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

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Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE        

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

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Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE Whether audience appeal of the work turns on both contributions and share of each in its success cannot be appraised Is it a compilation/collective work? o § 101: “A ‘compilation’ is a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship. The term ‘compilation’ includes collective works.” o § 101: “A ‘collective work’ is a work, such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole.” o § 201(c): “Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution. In the absence of express transfer of the copyright or of any rights under it, the owner of the copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series.” Is the work in the public domain yet? o Copyright term: life of author + 70 years, or 95 years from first publication in case of anonymous works, pseudonomous works, works made for hire (or 120 years from year of creation, whichever comes first) 

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c) How do you prove copyright infringement?  

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Ownership of valid copyright Copying o Direct evidence (rarely available): someone leaves a band and takes copy of music o Circumstantial evidence: similarity and access o Arnstein v. Porter: sliding scale: if there’s evidence of access that suggests there could be copying and similarity, need less evidence of copying; if no evidence of access, similarity has to be striking o Look into particular notes, etc., to determine if there’s copying, ask experts Improper appropriation of copyrighted work o Look at substantial similarity of copyrighted material  Can copy public domain, merged material, scenes a faire, functional items  Consider: amount of protected material copied, compared to allegedly infringed work; how exact copy is; how easy was it to license your piece?  Arnstein v. Porter (2nd Cir.): take into view of lay observer: don’t drill down into particular notes or ask experts, etc.  Nicholas v. Universal Pictures (2nd Cir.): look at “patterns of increasing generality”: goal is to figure out at each level — story, plot outline, subplot, general characters/scenes, specific character elements, text — what is copyrightable  CAI v. Altai (2nd Cir.): abstraction, filtration, comparison 13


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Abstraction: retrace designer’s steps: attempt to figure out what the idea is (can’t be protected); for computer programs, code  program’s ultimate function (most protection  no protection)  Filtration: examining structural components at each level of abstraction to determine whether particular inclusion at that level was “idea” or was dictated by considerations of efficiency. Was it required by factors external to program? Was it taken from public domain?  Comparison: compare what’s left after above steps and whether defendant copied that, as well as assess copied portion’s relative importance in overall program; certain cases can use “intended audience” observer, technical cases may allow expert testimony, but rule is lay observer Limitations on exclusive right to copy o Archival copies for public libraries o Ephemeral copies by broadcasters (can make copy during course of retransmitting program) o Cover versions of musical works o Non-commercial copies of musical compositions and sound recordings o Software: back-up copy, copy to run program o Fair use

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

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

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

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

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

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

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

b) How do you interpret patent claims?  Make a claim chart — example of Larami v. Amron (E.D. Pa.; super soaker) o Elongated housing having [may analyze what “elongated” means]  Chamber therein for a liquid o Pump including a piston  Having exposed rod extending rearwardly of said toy… o Means for controlling ejection [of a stream of liquid] o Super Soaker doesn’t have a “chamber therein”  no infringement  Canons of claim construction o Narrow construction to preserve validity (Federal Circuit HATES this) o Use ordinary meaning (to a PHOSITA) o Use context (both in claims and in specification) o Patentee is his/her own lexicographer o Patentee cannot recapture disclaimed claim scope o Claim differentiation (assume different patent claims have different scope) o Purpose of the invention o Difficulties in claim construction  One word may have multiple meanings  Difficulty in defining the item for which there wasn’t previously a term/which didn’t preciously exist  What would people have thought at time of claim being filed?  Sometimes claim can include technological developments that happened after patent issued  Read claims (may look at expert definitions) in light of specification (AWH; Fed. Cir.) BUT don’t read limitations into the claims based on the rest of the patent  Consider how PTO and inventor construed patent (AWH)  May also use dictionary definitions and expert testimony (no favoring dictionaries) (AWH)  Judge, not jury, decides (Markman; SC)  Markman claim construction hearings c) When is a patent infringed?  Literal infringement o Accused party must be making, using, offering to sell, selling, or importing the patented invention — look at EMBODIMENT of alleged infringing article o Step 1: construe claims to see what they mean o Step 2: assess infringement of each limitation o Step 3: assess doctrine of equivalents for each limitation  A patentee may invoke doctrine to sue producer of device if it performs substantially the same function in substantially the same way to obtain the same result (Sanitary Refrigerator Co.; SC)  As if it’s equivalent at the time of infringement, not at filing

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Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE Step 1: look at each limitation and make sure there’s an equivalent for each Step 2: ask if PHOSITA would agree that the item “performs substantially the same function in substantially the same way to obtain the same result”  After-arising technology can constitute literal infringement under doctrine of equivalents (Hughes Aircraft; Fed. Cir.) t infringement/divided infringement o More than one party involved in steps of process  No infringement unless defendant controlled all parties who controlled various parts of process (Paymentech; Fed. Cir.) o Different countries?  General rule: patent rights are territorial  271(f) extends (b) and (c): Infringes if: whoever without authority  Supplies or causes to be supplied in or from the US  1) All or a substantial portion of components of a patented invention in such manner as to actively induce the combination outside of the US in a manner that would infringe if within the US OR  2) Any component of a patented invention that is especially made or especially adapted for use in the invention AND Not a staple article or commodity of commerce suitable for substantial noninfringing use  Knowing that component is so made or adapted AND Intending that components will be combined outside of the US in a manner that would infringe if within the US  271(g): non-patented items brought into US infringe if they use process patented in US  Evidentiary problems: have to be able to prove that overseas factory is using your process, and need enough evidence to survive motion to dismiss  Identifying who you can sue can be difficult  Challenging issues RE: discovery  If control of system exercised in US, and beneficial use of system obtained in the US, infringement (RIM; Fed. Cir.: Blackberry case where system worked by having email transferred from service to network in Canada, then back to US)  

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d) Are any defenses applicable?  Experimental use/research exemption o No punishment “merely for philosophical experiments, or for the purpose of ascertaining the sufficiency of the machine to produce the desired effects” o Limited in Madey v. Duke (Fed. Cir.): university research not exempted because it’s in furtherance of legitimate business interests of university o FDA exemption: if you’re doing research reasonably related to developing information for submission under FDA  Prior defense o Old law: Very limited defense for prior s of business methods 19


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

e) Have all the requirements of a patent been met?  Utility o Operability: rarely an issue with patents; says the invention does what the application says it will; this requirement is to prevent fraud (patent examiner doesn’t test invention) o Beneficial/moral utility: idea that you shouldn’t patent things that are bad for society, used to strike down patents for gambling machines, deceptive products, etc.  Juicy Whip v. Orange Bang (Fed. Cir.): deceptive inventions can be patented; PTO isn’t supposed to be deciding what’s moral  Patent is, in effect, a subsidy for a certain type of research  can ask yourself if we want to be subsidizing an immoral/etc. invention  Idea that a patent is somehow a kind of stamp of approval o Practical utility (most important requirement)  Need to have one use to meet requirements of utility doctrine  Used to need sufficient “importance,” then idea that it had to be an “improvement,” then idea that you had to show commercial feasibility 20

Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE Don’t apply commercial feasibility test: hard to know ex ante if something will be commercially feasible; patents serve function of attracting financing; but you still reach question of whether it’s too soon to patent something  If you have the kind of case where someone else comes up with really practical use, and you didn’t  litigation over practical utility  Brenner v. Manson (US SC): last case we have on utility; attempted to patent process to make steroid, which was thought, because of relationship to existing steroids, would be useful, but no immediately clear use  not patentable  Concern about the fact that they don’t know how broad the scope of this use will be o PTO utility guidelines  Need to have specific utility and substantial utility  Specific utility: this can be used for diagnosing Parkinson’s, versus this can be used for diagnosing some disease one day  Substantial utility: need “real world” use  Not basic research  Not method of identifying or making material with no use or treating unspecified disease  Not a throw away utility (like using a genetically engineered mouse as snake food, but if it’s super nutritious, may count: very fact-specific)  Still only require one non-trivial use: may very well happen that you disclose a particular use, then someone else finds out that drug can also treat cancer  that person would have to get license from original patentee  BUT can get a “new use” patent  New law has expanded ability to challenge patent after it’s been issued Enablement o Must describe manner and process of making and using invention, in such full, clear, concise, and exact as to enable any PHOSITA … to make and use it (35 USC 112) o Don’t want PHOSITA to have to engage in undue experimentation to use (Incandescent Lamp Patent case; SC) Written description o Claim definiteness: only time it’s not sufficiently definite is if it’s “insolubly ambiguous, and no narrowing construction can properly be adopted” o Specification must show that you actually thought of invention and must describe invention in a way that’s understandable to PHOSITA o Gentry Gallery (Fed. Cir.): written description requirement failed because PHOSITA would clearly understand that controls had to be on console, not anywhere else on device; claims cannot be broader than the ing disclosure  narrow disclosure limits claim breadth o Can use words, drawings, detailed formulas Best mode: must disclose best mode of practicing invention known to inventor at time of filing 

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

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o o

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

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

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Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE Does particular reference fit within 102(a), (b), or (g)? I.e., was it known or used by others in this country before the invention of the claim of issue, or was it in public use more than one year before the filing date of the claim at issue even if it doesn’t contain all limitations of the claim?  Is reference is an analogous art — is it from the same field of endeavor, or, does it solve same problem/still reasonably pertinent? o Step 2: ascertain differences between prior art and claims at issue o Step 3: find the level of ordinary skill in the pertinent art  Types of problems encountered in the art  Prior art solutions to those problems  Rapidity with which innovations are made  Sophistication of the technology  Educational level of active workers in field o Step 4: determine the obviousness or nonobviousness of the subject matter (KSR; SC)  TSM test (there must be a suggestion or teaching in the prior art to combine elements shown in the prior art in order to find a patent obvious) isn’t only test — question isn’t whether combination was obvious to patentee but whether combination was obvious to PHOSITA  If it’s obvious to try, could mean that it’s obvious  BUT if there are lots of possibilities and result is unpredictable, won’t be obvious (Kubin; Fed. Cir.)  Not present when person tries lots of combinations and one ends up being good (Kubin)  General guidance from prior art or field doesn’t constitute obviousness (Kubin) o Step 5: secondary considerations  Commercial success  Could mean it was obvious! In fashion now, or marketing efforts of company  Need to show nexus between particular patented invention and commercial success of article (could have very successful item with one tiny patented thing)  Long-felt but unsolved needs  Failure of others  Awards and praise  Skepticism, teaching away, unexpected results  Licensing activity  Copying  Advances in collateral technology  Near-simultaneous inventions o No patent if differences b/w invention and prior art are such that the subject matter as a whole would have been obvious at the time of invention to PHOSITA Patentable subject matter 

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Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE o Process  “Process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material” (35 USC 100(b)) — can be a method of making something or using something o Machine  “Includes every mechanical device or combination of mechanical powers and devices to perform some function and produce a certain effect or result” (Corning v. Burden; SC) o Manufacture  “The production of articles for use from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by hand-labor or machinery” (American Fruit Growers (SC), cited in Diamond (SC)) o Composition of matter  Broad scope: “all compositions of two or more substances and … all composite articles, whether they be the results of chemical union, or of mechanical mixture, or whether they be gases, fluids, powders, or solids” (Shell Development Co (Dist. D.C.) cited in Diamond)  Diamond v. Chakrabarty: manmade bacterium with markedly different characteristics from any found in nature and having potential for significant utility is patentable o New and useful improvement thereof o Exceptions to patentable subject matter: policy-driven  Transaction costs of licensing everyone to do this, problems with disseminating knowledge about how to do this  No way to design around  Some kinds of natural products — DNA sequence might be what it is  Can’t design around some mathematical formula  Only one way to do it  Extremely expensive to design around  Claims that are really broad — principles of nature o Could have problems under 112  Importance of particular technology that we really don’t have a very good way to deal with those in patent law  No need for patent incentive in some kinds of things  That’s one reason against business methods  Sports moves  Laws of nature  Physical phenomena  Challenges to medically-related patents  Human DNA sequences unpatentable  ask whether it’s different by taking it out of the body; or ask is it chemically different by the time you take it out of the body  Abstract ideas 26


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

IV. Remedies

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Injunctions (patent: 35 USC 283; copyright: 17 USC 502; trademark: 15 USC 1116) o In all three IP branches, usually there will be an injunction but not always o Four-factor test for injunction  Plaintiff has suffered irreparable injury  Remedies available at law, such as monetary damages, are inadequate to compensate plaintiff for that injury  Considering balance of hardships between plaintiff and defendant, a remedy in equity is warranted  Public interest would not be disserved by a permanent injunction o Patent  After eBay (SC), some lingering concern about injunctions being issued when patent may function more as a way to get royalties than anything else (Kennedy concurrence); courts start denying injunctions to non-practicing patent holders  As long as there’s some ability to design around, seems like this shouldn’t be such a big problem  one way to look at this is to say if you have to use this technology, may be more valuable than it seems, or may not have seemed to have to do anything with the Internet — can you find patents that aren’t in your area that are still relevant? o More exceptions w/TM and copyright: First Amendment issues, may think you had fair use, protect TM to protect consumers’ association w/source o Trade secret: actual or threatened misappropriation (UTSA 2(a)) Damages (patent: 35 USC 284; copyright: 17 USC 504; trademark: 15 USC 1117) o Reasonable royalties (esp. in patent context, also available for trade secrets; some courts permit in copyright) 28

Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE 

Royalties for past infringement  Court asks: if these people had had a negotiation and gotten a license, what would they have agreed on?  This is the fallback for patent damages in case you can’t prove  Long set of factors that courts take into (Georgia-Pacific; SDNY) o Royalties received by patentee for the licensing of the patent in suit, proving or tending to prove established royalty o Rates paid by licensee for the use of other patents comparable to patent in suit o Nature and scope of license, as exclusive or non-exclusive, or as restricted or non-restricted in of territory or w/r/t whom manufactured product may be sold o Licensor’s established policy and marketing program to maintain his patent monopoly by not licensing others to use the invention or by granting licenses under special conditions designed to preserve that monopoly o Commercial relationship b/w licensor and licensee, such as whether they are competitors in same territory in the same line of business, or whether they are inventor and promotor o Effect of selling patented specialty in promoting sales of other products of the licensee; that existing value of the invention to the licensor as a generator of sales of his non-patented items; and the extent of such derivative or convoyed sales o The duration of the patent and term of license o Established profitability of the product made under the patent, its commercial success, and its current popularity o Utility and advantages of the patent property over the old modes or devices, if any, that had been used for working out similar results o The nature of the patented invention, the character of the commercial embodiment of it as owned and produced by the licensor, and the benefits to those who have used the invention o Extent to which infringer has made use of the invention, and any evidence probative of the value of that use o The portion of the profit or of the selling price that may be customary in the particular business or in comparable businesses to allow for the use of the invention or analogous inventions o The portion of the realizable profit that should be credited to the invention as distinguished from non-patented elements, the manufacturing process, business risks, or significant features or improvements added by the infringer o Opinion testimony of qualified experts o Amount that a licensor and licensee would’ve agreed upon at 29


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the time infringement began if both had been reasonably and voluntarily trying to reach an agreement  Put a thumb on scale to make royalty higher  Damages supposed to compensate, not deter  Royalties for ongoing infringement  Cases where court decides not to issue injunction — a lot like compulsory license o Choose either actual damages or statutory damages  Lost profits (patent, copyright, TM, trade secrets)  Profits that patentee/copyright holder/TM owner didn’t make because of the infringement  Can try to prove own lost profits BUT problems with this: counterfactual world; marketing/advertising; profits could even be lower than you’d get: no more monopoly  TM may include corrective advertising costs  Four-factor test from Panduit (Fed. Cir.) in patent context: o Demand for patented product o Absence of acceptable noninfringing substitutes  May consider effect of economically significant products on profit patentee would’ve made absent infringement: such as instant and conventional photography (Polaroid; Fed. Cir.) o His manufacturing and marketing capability to exploit demand o Amount of profit he would have made  ing of profits, aka disgorgement (patent (design only): 35 USC 289; copyright 17 USC 504; trademark 15 USC 1117, trade secrets)  Instead of looking at the profits that the right-holder would’ve made, look at profits that infringer actually did make — and require them to hand those profits over to the IP holder  Copyright: look at money infringer actually made (Tilghman; SC), and to extent it’s due to infringement (which raises difficult factual question) can get them to disgorge profits (MGM; 9th Cir.) o Where there’s a commingling of gains, can’t recover unless you can prove what was due to your copyright  TM: requires willfulness (Lindy; 9th Cir.); if you prove that, you can recover defendant’s profits, damages sustained by plaintiff o Advertising damages (Big O; 10th Cir.) o Statutory damages (patent: N/A; copyright: 17 USC 504; trademark: 15 USC 1117)  Have to decide: do you want to prove damages or take statutory damages?  Trademark: statutory damages only for counterfeit marks  Copyright: no firmly established framework for deciding; judges consider harm to copyright owner, gain to defendant, increase when defendant acted willfully Enhanced damages/willfulness (patent: 25 USC 284; copyright: 17 USC 504; trademark: 15 30


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

V.

Indirect Infringement

Contributory Action

Knowledge required

Patent 35 USC 271(c)

Copyright Case law (Sony)

1. Component adapted for infringement (need to know there’s a patent) 2. Not suitable for substantial noninfringing use Knowledge that component adapted for infringement

1. Technology facilitating infringement 2. Not capable of substantial (how defined?) noninfringing use Knowledge of specific Specific, “more than activity (how general knowledge” specific?) of infringement; OR willful blindness Case law (Grokster) Case law (Inwood) Intent, active steps to Intentionally induce encourage infringement Evidence can be circumstantial Knowledge that the Knowledge that the activity is infringing? activity is infringing?

Inducing Action

35 USC 271(b) “Induce” — e.g., provide instructions

Knowledge required

Knowledge of patent and that activities infringe OR willful blindness (Global Tech)



TM Case law (Inwood, Tiffany v. eBay) Continue to supply service with knowledge that is infringing

For all types of indirect liability, there must always have been proof of underlying direct infringement o For inducing infringement have to prove some reasonable amount of infringement that would idea that you’re inducing infringement 31


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

32

Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE For person who’s hosting site and didn’t put up document, hard to figure out What was persuasive in Grokster?  Attempt to attract Napster s once Napster shut down  No attempt to develop filtration/other mechanisms to diminish infringement o BUT mistakes in filtering possible  Make money by selling ads: more infringement  more ads o BUT how could you have an ad-ed business and not want more ads? Not unique to infringement o Trademark  If it’s a direct copy, easy to see Digital Millennium Copyright Act o 17 USC 512: safe harbors and notice and takedown regime o (a) Broad safe harbor for “conduits” (e.g., ISPs)  Except that injunction to prohibit access to particular subscriber or to block access to specific foreign location may issue o (c) Safe harbor for liability for infringement by content controlled by s if  No actual knowledge that material is infringing AND  Not “aware of facts or circumstances from which infringing activity is apparent” AND  If notified follows “notice-and-takedown” procedure o (d) Safe harbor for search engines — similar requirements to (c) o (l) Continuing availability of non-infringement defenses o (m) Privacy interests and limits on obligation to monitor o Why do we use safe harbors?  If you do a, b, and c, then you’ll be exempt from liability — do this partly to incentivize good behavior, sometimes in cases where to actually investigate behavior would be costly, difficult, invade privacy, etc. o General knowledge not enough for infringement: need specific acts of infringement: this particular item is infringing o What is the notice and takedown procedure?  Alleged owner sends notice to service provider (good faith belief that use unlawful)  service provider checks notice and if compliant with statutory requirements  service provider takes down work  service provider notifies poster  poster may send counter-notification (good faith belief material was removed as a result of mistake or misidentification)  service provider informs alleged owner of counter notification, replaces material 10-14 days later, unless receives notice that alleged owner has filed suit o Remedies for improper takedown  512(f): provides damages for “knowingly materially representing” “that material … is infringing” (owner) OR … was removed by mistake or misidentification (poster)  Lenz v. Universal Music Corp. (N.D. Cal.): ISP took down video and then re-posted after counter-notification by poster, sued under 512(f) for bad faith  



33


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

VI. The Right to Copy and Overlapping Regimes 

Is state law preempted? o States can’t regulate where Congress has pervasively regulated an entire field o States can’t stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress o TM: Lanham Act has always been interpreted to leave lots of room for state law o Patent Act interpreted to significantly, but not completely, constrain state law  Bonito Boats: don’t want to disturb careful balance: field preemption o Copyright Act has explicit preemption clause, interpreted to leave considerable state 34

Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE regulation in place  Copyright preemption: 17 USC 301  (a) … [A]ll … rights that are o Equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and o come within the subject matter of copyright as specified by sections 102 and 103, … whether published or unpublished, are governed exclusively by this title. … o No person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.  (b) Nothing in this title annuls or limits any rights or remedies under the common law or statutes of any State with respect to— (1) subject matter that does not come within the subject matter of copyright … , including works of authorship not fixed in any tangible medium of expression; or … (3) activities violating legal or equitable rights that are not equivalent to any of the exclusive rights within the general scope of copyright …;  But what rights are “equivalent”? And can a state provide state law protection for subject matter that’s expressly excluded?  Often comes down to similar analysis you’d do if you didn’t have law: same conflict, obstacle, etc. o Trade secrecy (Kewanee Oil)  Patent law promotes progress of new science and useful arts by offering right of exclusion as an incentive; trade secret law is about standards of commercial ethics, and also encouragement of innovation  If we have discoveries that aren’t within subject matter of patent law, then there’s no conflict: if we didn’t provide trade secrecy protection, then may not have sufficient incentive to create [but can’t have protection over things in the public domain, and also driven to create via things you need to make for yourself], and also won’t get any more disclosure than you’d have anyway  Secret can be kept through contract anyway, though unequal bargaining power could preclude secret being kept  Even if you have no protection, can still make money: first mover, could have skill in how to make it, can get TM rights, reputational benefits  KS thinks court is overstating things: lots of reasons in the business world to share things and disclose  Not a problem to cover things that aren’t patentable but within patentable subject matter (like stuff that’s obvious): policy of encouraging invention, which underlies patent statute, is furthered  Differences from Bonito Boats: trade secrecy law is weaker because doesn’t protect you against independent inventors or reverse engineering: states aren’t interfering with patent law via trade secrecy law in the same way that having a statute giving protection for vessel 35


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

Purpose

Rule about utilitarian features

Design patent Provide incentives for ornamental design Design cannot be “primarily functional” or “dictated by functional considerations ”

Rule about ornamental features

Must be “product of aesthetic skill and artistic conception”

Compatible with utility patents?

Yes, if invention meets standards for both

Trade dress Avoid consumer confusion

Copyright Incentivize creative expression

Functional trade dress not protected; feature is functional if “essential to use or purpose” or “affects cost or quality” (avoid anti-competitive effects: all know item from particular source, but that company will be only producer  no competition w/r/t function) Can serve as trade dress except for “aesthetic functionality” — product configuration is a competitive necessity for protection: ornamental features not protected if it’s something people really want Expired utility patent strong evidence of functionality

101 Useful Article Doctrine: useful article only covered by PGS works if design incorporates pictorial features that can be identified separately from, and are capable of existing independently of, utilitarian aspects of article Must be physically or conceptually severable (cf. merger doctrine)

Yes, as long as separability requirement met (cf. software)

36


o Design patents  Requirements  Novelty: no prior art shows exactly the same design “as a whole” (ordinary observer test)  102(b) grace period applies  Non-obviousness: judged by “designer of ordinary capability who designs articles of the type presented  Ornamentality: “product of aesthetic skill and artistic conception”; fairly low bar  Nonfunctionality: cannot be “primarily functional” or “dictated by functional considerations”; also a low bar  Similar application process to applying for utility patent  Claim of design patent — and it can only have one claim — is entirely based on drawings  14 year term  Basic infringement test: whether an ordinary observer who knows about prior art would think that the accused design as a whole is substantially the same as the patent design, thus creating some customer confusion (Egyptian Goddess v. Swisa)  Previous test had looked at “point of novelty”: is it the same in the places where patented design is novel?  This is NOT TM-type confusion: not asking if consumers think they come from same source o Trade dress  Cannot have aesthetic functionality or utilitarian functionality  Aesthetic: functional feature would “put competitors at a significant non-reputation-related disadvantage” (Qualitex) o Disadvantage related to the fact that everyone wants green, say  Utilitarian: functional if “it is essential to the use or purpose of the article or it affects the cost or quality of the article” (Inwood) o Affect ability to compete  Utility patent as evidence of functionality (Traffix) o Copyright in useful articles  PGS: “the design of a useful article … shall be considered a pictorial … work only if, and only to the extent that, such design incorporates pictorial … features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article”  “Useful article”: article having intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information. An article that is normally part of a useful article is considered a “useful article.”  How do we determine if ornamental features exist independent of utilitarian aspects?  Early cases: must be physically separable  Carol Barnhart dissent: conceptual severability: if when you look at 37


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

38

Intellectual Property / Fall 2011 / Katherine Strandburg / ATTACK OUTLINE maintain confidentiality, physical limitations on access, keeping track of copies and keeping records of those with access, whether employees/others informed of restrictions, industry standards, overall security program  Restatement of Torts 757 comment b: The subject matter of a trade secret must be secret. Matters of public knowledge or of general knowledge in an industry cannot be appropriated by one as his secret. Matters which are completely disclosed by the goods which one markets cannot be his secret. Substantially, a trade secret is known only in the particular business in which it is used. It is not requisite that only the proprietor of the business know it. He may, without losing his protection, communicate it to employees involved in its use. He may likewise communicate it to others pledged to secrecy. Nevertheless, a substantial element of secrecy must exist, so that, except by the use of improper means, there would be difficulty in acquiring the information.  Restatement of Unfair Competition 39: A trade secret is any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable and secret to afford an actual or potential economic advantage over others.  Secrecy: some disclosure permitted  Fourtek: if limited (not public announcement) and made to further economic interests o Can’t be required to keep it so secret that you can’t get use out of it, but not every disclosure motivated by economic selfinterest should be okay  Confidentiality not required o More lenient because we think one party has behaved badly  Consider cost of developing trade secret (Fourtek)  Restatement of Torts factors for secrecy  Extent to which information known outside claimant’s business  Extent to which it is known by employees and others involved in the business  Extent of measures taken by the claimant to guard secrecy of information  Value of the information to the business and its competitors  Amount of effort or money expended by the business in developing the information  Ease or difficulty with which the information could be properly acquired or duplicated by others  Look at standard industry practices — may not require NDA if, for instance, all subcontractors in industry know to keep things secret o Requirement 2: misappropriation  USTA: "Misappropriation" means: (1) acquisition of a trade secret . . . by a person who knows or has reason to know that the trade secret was obtained by improper means . . . . OR (2) disclosure or use of a trade secret . . . by a person 39


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who …(A) used improper means to acquire [it] or (B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was . . . (I) derived from a person who had used improper means to acquire it; (II) acquired under circumstances giving rise to a duty to maintain its secrecy … Improper means USTA: improper means includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means DuPont: aerial surveillance = improper means; can’t avoid putting in effort to figure out secret; want to prevent DuPont from taking needlessly expensive precautions or acting like no legal protections OR breach of confidence Most trade secrecy cases Dravo: implied confidential relationship from the fact that the only reason for disclosure of storage container mechanism was because Dravo expressed interest in buying business Just because you reverse engineer item in very short time doesn’t mean you’ve misappropriated it (Kadant) Easy to reverse engineer? Less likely to get trade secrecy protection AND less likely that you misappropriated

VII. Contract and Controversy of the Extension of IP Protection 





When will digital contract be upheld? o Shrinkwrap: just about always (ProCD) o Clickwrap: customer needs to be aware that there are (Netscape) o Courts don’t like really severe arbitration provisions o Key question: was there sufficient consent? When does contract constitute misuse? o Patent misuse: if patentee “impermissibly broadened the ‘physical or temporal scope’ of the patent with anti competitive effect,” that’s misuse  Defense to infringement claim  Makes whole patent unenforceable  Can complain even if you’re not the person who’s harmed by this  Over time, this has become narrower, and Congress has limited its scope via 35 USC 271(d): can’t apply to refusal to license or use any rights to the patent, or tying a patent license to purchase of a separate product or patent license unless would violate antitrust laws o Copyright misuse is emerging, whereas patent is dying away  part of this has to do with issues of digital licensing that we’ve been talking about  Different interpretations of what exactly copyright misuse is, but many courts have held that: license forbidding reverse engineering is misuse; license forbidding use of uncopyrighted data is misuse When will IP contract be considered preempted? 40


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

41

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