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Rutgers University, Newark School of Law
Kettle, John R.

Copyright and Trademark
Fall 2011- Professor Kettle

I.           Introduction
a.   This class covers:
i.    Ideas à Common Law ONLY
ii.    Trade Secrets à Common Law and a little federal
iii.    Right of Publicity à Primarily state but has some federal
iv.    Trademarks ™/® à Common Law and Federal
v.    Copyrights © à Primarily Federal, some State protection still available
vi.    Patents à strongest of the monopolies with the shortest duration, this is Federal only
b.   The above topics balance the interests of three groups:
i.    Creators/Authors
ii.    Investors ($)/ Manufacturers/Studios
iii.    Consumers
c.   Constitutional Protections:
i.    Art. I §8(3) = Commerce Clause
1.   Interstate commerce covers © law and TM
ii.    Art. I §8(8) = Congress shall have the power… To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries
1.   Covers Patent and Copyright
2.   Eldred v. Ashcroft (SCOTUS 2003)
a.   ∏ argued that the Sonny Bono Act (CETA) was unconstitutional as it tried to override the time limits constraint and it did not require new consideration from the authors.  SCOTUS rejects this contention
b.   CETA, extending the © protection an additional 20 years (to Life + 70) is within Congress’s power under the Copyright Clause of the Constitution.
d.   What do you do if someone comes to you and says they want you to represent them???
i.    FIRST DO A CONFLICTS CHECK TO SEE IF IT’S EVEN FEASIBLE (and get your money up front)
ii.    Ask the following:
1.   What is it?
2.   Who’s idea is it? (may require another conflict check)
3.   Look for trade secrets à any information that gives that person or that company a competitive advantage over other companies
a.   Ex: how it works, what marketing campaign they intend to use, etc…
4.   Look to the Trademarks that could be an issue
a.   Think about the Yankees talking bottle opener
i.    ALSO à Think about the Rights of Publicity for the voice on the recording
5.   Think about the copyright à is there text or recordings that are used?
6.   Is there already a patent out there???

II.        Protection of Ideas
a.   A constant flow of creative ideas is crucial to a variety of industries but is perhaps nowhere more evident to the public than the entertainment industry
i.    EVERYBODY is generally free to use your ideas
ii.    The expectation of compensation for an idea is the focus of the Law of Undeveloped Ideas
b.   Idea protection is a Common Law Doctrine ONLY!!!
i.    When you are talking about an idea, it’s always a good idea to try and get it into one of the other areas that are governed by more than just the common law (ie- copyright or trademark)
ii.    Brought in STATE COURT
c.   Sellers v. American Broadcasting Company (11th Cir. 1982)
i.    ∏ filed a suit against ABC and Geraldo Rivera after he had signed a contract with them about his ideas on the death of Elvis.  ∆ ran another story about the death of Elvis that did not use the ∏’s ideas at all.  ∏ alleges they stole his idea.
ii.    For Idea Protection you MUST have (elements of idea misappropriation):
1.   A concrete form
a.   NOT abstract;
b.   Tangible form- capable of being reduced to writing or used in 24 hours; AND
c.   Fully Developed
2.   The idea MUST be novel
a.   Original to the ∏; AND
b.   Innovative and creative
c.   See “Novelty”
3.   ∆ must use the ∏’s idea
4.   ∏ must have an expectation of recovery
a.   See theory of recovery
iii.    ∏’s idea was not novel because it consisted of broad and general statements; was not in concrete form because it provided no substantiated details for the vague allegations he was making.  Also, the ∆ never used his theory in the news story they did run.
d.   Theories of Recovery:
1.   Express Contract Theoryà The idea that the recipient of the idea promised to pay the submitter if he used the idea
a.   In writing is best
b.   In theory, the issue of novelty really shouldn’t even be there because if the contract is good, then it doesn’t matter how novel it is (remember that novelty is a consideration).
c.   Requires the least amount of novelty, but some courts still require it to be novel to some extent
2.   Implied Contract Theoryà the recipient impliedly promised to pay for the use of the idea.
a.   Things you should look at:
i.    Whether the ∆ has paid for ideas in the past
ii.    Whether the ∏ has customarily been paid for his ideas
iii.    Whether there is an industry custom for paying for ideas
b.   W.C. Fields Letters
i.    ∏ sends some jokes to ∆ and ∆ uses them in a movie (“You can’t cheat an Honest Man”).
ii.    ∏ is able to win which is odd because jokes are not usually copyrightable à But the contractual nature of their letters back and forth implied that ∆ had told him he would pay, even though he never expressly said as much.
c.   The express declaration of NOT paying for an idea will be upheld in the courts.
3.   Quasi-Contract à unjust enrichment
a.   Here the novelty issue is of utmost importance to prove
b.   Requires the highest amount of novelty
ii.    Breach of Confidentialityà a fiduciary relationship existed and was violated by the recipient.
1.   ∏ MUST show the existence of a duty of confidentiality
2.   Courts don’t generally require ANY novelty, breach of a fiduciary duty is enough. 
iii.    Tort of Conversionà recipient took the property (idea).
1.   Rarely used’
iv.    Quantum Meruità if the work of a professional submitter (a person from the advertising or entertainment industries who regularly submits as part of their profession) is used by a company that regularly uses such submitted work, then the obligation to pay is implied onto the company.
e.   Submitting Agreements:
i.    The Holder may present the recipient with an agreement prior to disclosing the idea
1.   Indicates material is confidential, and
2.   The holder intends to realize and protect maximum monetary and economic value
ii.    The Recipient may refuse to look unless the holder signs an agreement
1.   Usually states the conditions under which the holder will be paid
iii.    Double Envelope Approach:
1.   Sending an envelope with a notice announcing an expectation of payment and that the idea is enclosed in a SASE
2.   If the recipient does not want to take the risk, they can send it back
f.    Novelty is of utmost importance to the protection of ideas.
i.    Luddecke v. Chevrolet Motor Co. (8th Cir. 1934)
1.   ∏ sent a series of letters to ∆ informing them how they could fix a defect on

1.   ∏ had bought furnaces from Therm-O-Vac and made modifications to them.  ∆, a rep. for Therm-O-Vac knew of the modifications and ∏ told him it was a trade secret.  When Therm-O-Vac went out of business, ∆ formed a new business and used the modifications.  Court says that these were trade secrets.
2.   A trade secret does not have to be novel or inventive à it only has to give a competitive advantage
a.   To be a trade secret, information must be a secret and meet other equitable considerations such as having value and incurring a cost to obtain.
v.    Negative Know-How: Knowing what not to do… this can be a huge advantage as well. 
vi.    Commercial Morality à the law recognizes morality in a business setting:
1.   Why did Pepsi turn down the formula for Coke when it was offered to them?
a.   Because it was the moral thing to do
b.   Because the people offering it had stolen the trade secret
2.   Most respectful companies will chose to pass on a trade secret when it is offered to them.
b.   What are the advantages and disadvantages of trade secrets?
i.    Advantage à no expiration because there is no registration (unlimited duration so long as it remains a secret)
1.   As opposed to a patent which makes the secret public knowledge but grants a limited monopoly.
2.   In a way, it is the opposite of patent law.
ii.    Disadvantage à if it is discovered, there is weak protection
1.   Reverse Engineering: when a party is able to take your product and dissect it to find the secrets. 
a.   This is a freedom!!! 
b.   Those who have not appropriated the secret improperly are free to replicate and use the secret subject matter.
2.   Independent discovery of information that another party holds as a trade secret is not actionable. 
c.   Trade Secrets are protected by:
i.    Common Law: Restatement of Torts §757 (1939): One who provides or uses another’s trade secrets, without a privilege to do so, is liable to the other if:
1.   (a) he discovers the secret by improper means, or
2.   (b) his disclosure or use constitutes a breach of confidence reposed in him by the other in disclosing the secret to him.
ii.    Uniform Trade Secret Act    
1.   The UTSA, as the product of private organizations, is not itself the law, but only a recommendation of the laws that should be adopted in the states. Once enacted by a state, the UTSA is codified into the state’s code of statutes.
2.   Enacted by 45 states and DC
iii.    Economic Espionage Act of 1996 (Chapter 90/110 Stat. 3488/18 USC §§ 1831-1839)
1.   18 USC §1832 à Theft of Trade Secrets
a.   Provides criminal liability for thefts of trade secrets “with an intent to convert a trade secret that is related to or included in a product that is produced for or placed in an interstate or foreign commerce, to the economic bereft of anyone other than the owner thereof, and with the intent and knowledge that it will injure any owner of that trade secret.”
b.   Reverse engineering is specifically exempt from liability. 
2.   GIVES CRIMINAL LIABILITY (Prison and/or fines)