I. SOURCES AND LIMITS OF INTELLECTUAL PROPERTY LAW
– Copyright/ Patent CLAUSE – Article I., §8, Clause 8: Congress shall have the power . . . (8) 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
– ©: Copyright
– ®: Federally registered trademark
– ™/℠: Unregistered trademark and service mark
Golan v. Holder (SC 2012)
· FACTS: Copyrighted works lapsed back into the public domain. The public started using them. Petitioners argue the Uruguay Round Agreements Act, which allowed copyrights to works in the public domain, exceeded the copyright authority of Congress.
· HOLDINGS: Copyright authority of Congress did not exclude application of such protection to works in the public domain nor did it require that works remain in the public domain.
Eldred v. Ashcroft (S. Ct. 2003)
· ISSUE: Can Congress prescribe the DURATION of copyrights? YES, Congress was within its constitutional authority to place existing and future copyrights in parity.
Copyright Term Extension Act (CTEA) (1998) – legislation that enlarged the duration of copyrights for 20 years (70 yrs after author’s death)—applied to both existing and future copyrights.
1790 Act – first copyright statute – term of 14 years from date of publication renewable for an additional 14 years if the author survived the first term. (applied to existing and future works)
1831 Act – expanded to 42 years (28 years from publication, renewable for additional 14 years) (existing and future works), but to qualify for the extension, the existing work must be in its initial copyright term at the time the Act became effective.
1909 Act – 56 years (28 years from publication renewable for an additional 28 years) (existing and future works)
· 1976 Act [Effective: January 1, 1978] – altered method for computing federal copyright terms – protection lasted from work’s creation until 50 years after author’s death.
o For works created by individual natural persons, protection runs from the work’s creation, and lasts until 50 years after the author’s death. [Aligned the US with Berne]
o For anonymous works, pseudonymous works, and works made for hire, the term was 75 years from the date of publication or 100 years from creation, whichever expired first.
o The 1976 act became effective on Jan 1, 1978 and governed all works not published by this date.
· 1998 Act : Copyright Term Extension Act (CTEA) a.k.a. Sonny Bono Act extends it to 70 years after author’s death.
o For works created by individual natural persons, protection runs from the work’s creation, and lasts until 70 years after the author’s death.
o for anonymous works, pseudonymous works, and works made for hire, the term was 95 years from the date of publication or 120 years from creation, whichever expired first.
o Everything is increased by 20 years. This standard harmonizes the term with the term adopted by the European Union in 1993.
o Applies to all works not published by 1/1/78
o 1998 act became was enacted on Oct. 27, 1998
· The balance of power over intellectual property has shifted from state to federal from the 1800’s to now, though newer forms of IP have arisen through state law.
· Preemption – states cannot protect subject matter that comes within Congress’s Copyright-Patent power, but fails to qualify for federal protection – Section 301(a) of the Copyright act outlines preemption
· SUPREMACY CLAUSE—federal patent and copyright statutes preempt state laws
Art I, Section 8, Clause 3: page 1. Congress’ power to regulate Commerce with foreign Nations, and among the several states, and with the Indian Tribes
o This is the clause for federal trademark law
State laws also exist to protect IP.
o Trade secret law/ Right of publicity (some states call it a right of privacy).
The federal trade secret law is the Economic Espionage Act of 1998.
The federal right of publicity act is the Federal Trademark Act §43a a.k.a. 15 U.S.C. §1125(a)
– IP in GLOBAL community
· Paris Convention (For Patents/ Trademarks)
· Berne Convention (For copyrights) – Bars formalities as a condition to protection and requires:
1. NATIONAL TREATMENT—each treaty member must protect creations of nationals of other treaty members on same terms that it protects creations of its own citizens
2. MINIMUM STANDARDS—where the protection a country gives is less than what the treaty prescribes, country must give foreign nat’l no less than treaty standards
II. THE NATURE AND FUNCTIONS OF INTELLECTUAL PROPERTY LAW
· OBJECT of IP LAW—ensure consumers wide variety of intellectual goods at lowest price; achieves this end by giving individuals property rights in information produced and economic incentive to produce (opportunity to profit from their creations)
· IP Rights are Freely Alienable – the author/ inventor can transfer his rights
· ECONOMIC problems of IP LAW
o INAPPROPRIABILITY—information has little value to producer unless he can sell it, BUT selling it exposes it to competitors who can freely replicate it and sell at lower price than what initial producer needs to recoup his investment
o INDIVISIBILITY—information is intangible—cannot be completely consumed, unlimited number of users can consume w/o depletion.
o Once info is produced, it can benefit many users w/o imposing add’l costs on the producer.
· Public Policy Dilemma: if society withholds property rights from creative work, the price that its producers can charge for access to it will begin to approach zero; their revenues will diminish and, with them, their incentives to produce more. But if society confers property rights on creative works, prices will rise, and information produced will reach smaller, wealthier audiences, even though it might be that the work could be disseminated to everyone else at no additional cost.
BENEFITS of a PATENT SYSTEM
· INCENTIVE to invent by offering a reward to inventor—encourages expenditure of capital/time for research + development
· STIMULATES INVESTMENT OF ADD’L CAPITAL in further development and marketing of an invention—no one else can use, sell, make, so inventor will invest money to increase public consumption of his product.
· ENCOURAGES EARLY PUBLIC DISCLOSURE of tech info that otherwise might be kept secret, decreases likelihood of duplicative efforts.
· ENCOURAGES INTERNATIONAL EXCHANGE of products and info.
· COMPETITIVE RESEARCH—objectives of “race to the patent office”
o First to find patentable solution to a problem posed by needs and preferences of consumers
o After competitor has found a solution, gotten patent rights—ALTERNATIVE SOLUTION in order to be able to compete in the marketplace—“invent around the patent”
o Attempt to find all possible alternative solutions, even inferior, in order to BLOCK the competitor’s efforts to invent around the *first* patent.
o Lost economic investment for inventor who lost the race
o Is substitute invention a waste of time? Don’t we already have a solution to the problem? Shouldn’t inventors use their time to invent something NEW or is research for research’s sake OK?
o Alternative inventions aren’t as valuable as the original—inventive talent is wasted.
o Justification for “wasted effort” = serendipity! Might discover something new.
· Purpose of TRADEMARK Law
o Facilitates and enhances consumer decisions
o Creates incentives for firms to produce products of desirable qualities even when these are not observable before purchase, because the TM helps the consumer identify these unobservable features before they purchase the product
§ Information asymmetry—sellers have knowledge of unobservable features of a product that consumers do not.
§ Observable features can be imitated
§ If goods looked identical, consumers will only pick the one with “desirable qualities” by chance.
o Provided to consumer in “summary form”—trademark – symbol that consumer identifies with a specific combination of features.
· Trademark identifies a QUALITY STANDARD, specific features of a product—the VARIETY of that product.
· Success of trademark in conveying to consumer the unobservable features of the product depends on:
o underlying market conditions,
o the product,
o frequency of purchase,
o ease of information dissemination across consumers and
o consumer’s recall.
P’s theory that Elvis died of interaction of prescription meds was NOT NOVEL, because it was already in circulation
Rule: Broad, general story ideas may not form the basis of a breach of contract based copyright infringement action
Misappropriation (def.) : the unlawful use of another’s property or funds.
Lueddecke v. Chevrolet Motor Co. [8th Circ. 1934]
· P sent letter to Chevy saying that there was a serious error in the location of several individual units/mechanisms of the car. Letter asked for royalty or Chevy to make him an offer stating what the information would be worth to them. Reply from Chevy: Against policy to make agreement for inventions until Chevy knows what they are. Told him to send drawings and description of ideas and Committee will examine to determine if interested. P sent a letter back detailing the problem: either put extra springs in the driver’s side OR move some of the heavier individual units to the other side when the car is built. Specifically suggested the battery and the starter be moved to the passenger side to balance the weight and prevent the back left fender from scraping against the tires.
· Chevy’s letter back said “it would not be advisable to redesign our springs in this matter at the present time.”
· Ct says: IDEA WAS NOT NOVEL and P could NOT ASSERT a PROPERTY RIGHT.
o P’s letter said that OTHER PPL knew about the defectà P did not claim to “discover” the defect in the car.
o His FIRST IDEA=insert extra springsà Ct says this is generally known and COMMON PROPERTY.
o SECOND IDEA=relocate individual units within the car—P did not claim to know exactly what the shifting of units within the car would be practical or even necessary.
· Ct says: NOT DETAILED ENOUGH – Not Concrete
o Chevy requested drawings, which he did not submit.
o Ct says: P’s idea was really that companies should experiment in shifting units around until it was balanced.
· No evidence of agreement to pay P for his idea—Chevy said submit it, if we’re interested, we’ll come to some mutually satisfactory agreement.
· Copyright and Patent law protects those who originate and develop.
Rule: A P has no property rights in generalized suggestions party, therefore a company is not legally liable for incorporating them, unsolicited, into its products.
Nadel v. Play-By-Play Toys & Novelties, Inc. [2nd Circ. 2000]
· Submitted idea to company for new toy.
· Novelty Factors
o Generic v. Specific: Is it a generic concept or one of specific application?
o Commonality: How many people know of the idea?
o Uniqueness: How different is the idea from generally known ideas?
o Commercial Availability: How widespread is the idea’s use in the industry?
· For BREACH OF Contract CLAIM—novelty to RECIPIENT is sufficient because there is consideration so long as recipient received something of value—even if the consideration exchanged is grossly unequal.
· For MISAPPROPRIATION CLAIM—there must be novelty in the GENERAL sense because property law does not protect against misappropriation of that which is freely available to everyone.
· An idea may be so unoriginal or lacking in novelty generally that, as a matter of law, the buyer is deemed to have knowledge of the idea. [Neither Theory Works]