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Copyright & Trademark
Rutgers University, Newark School of Law
Kettle, John R.

 
COPYRIGHT & TRADEMARK
SUMMER
KETTLE
 
 
 
OUTLINE:
                                                                                                                     I.        GENERAL IP
PURPOSE OF IP LAWS:
Balancing of interests of creators/inventor/author, investors/publishers/manufacturers, consumers/public.
 
                                                                                                            II.        IDEA PROTECTION
Undeveloped Ideas
OVERVIEW:
 
Sellers v. American Broadcasting Co.
(11th Circ. 1982) Sellers had approached Geraldo with the real story behind Elvis’ death, and before divulging the tale Sellers demanded Geraldo sign a contract giving him copyright and acknowledgement to the story. Sellers said his bodyguard and doctor conspired to replace his cortisone with placebo, so they wouldn’t have to pay him back a loan. ABC didn’t use the story because Sellers came up with no evidence. Nine months later, ABC conducted an investigation of their own and ran a special revealing that Elvis had died of polypharmacy. Notably, they did not suggest murder by withdrawal of cortisone.
 
MISAPPROPRIATION OF AN IDEA/THEORY:
1.      IDEA IS NOVEL
2.      IN CONCRETE FORM
3.      MADE USE OF BY Defendant AND
4.      Plaintiff HAD AN EXPECTATION OF PAYMENT
 
Here, the idea that Elvis had died from prescription drugs was already being kicked around various newspapers, so Sellers’ idea wasn’t novel. His theory was vague and unsubstantiated, and thus not concrete. His specific theory concerning cortisone withdrawal may have been novel and concrete, but that’s not what ABC actually used.
 
Theories of Recovery
Conversion      ↑
K- Quasi          ↑
K- Implied      ↑  DEGREE OF NOVELTY NEEDED TO RECOVER
K- Express      ↑
 
Breach of Confidentiality – no novelty required
Theories of Protection – Misappropriation and Contract
 
Lueddecke v. Chevrolet Motor Co.
(8th Circ. 1932) Lueddecke wrote a letter to Chevy, claiming to have discovered a grave design defect and offering to divulge it upon a promise of compensation. Chevy replied that it does not enter into agreements with people over mystery ideas, and reminded him that before submitting anything for review he should protect himself by establishing legal ownership by e.g., notarizing his technical drawings. He responded not with any technical drawings or engineering calculations, but rather with a discussion. He simply stated that he (and others) have been bothered by the lopsided weighting of the car, and suggesting moving some parts to the right side.
 
The court begins analysis with a property based theory, finding that this was not novel (because of P’s own admission that many people knew of the problem) and it was also not useful, because Lueddecke himself had not done any experimentation or engineering (the hard part). His “mere suggestion” did not confer a property right that could be offered in consideration of compensation.
 
Next, his contract based theory fails, because Chevy never invited the formation of any contract, and specifically told him to protect himself by establishing legal ownership.
 
AN IDEA LACKING IN NOVELTY AND USEFULNESS IS A “MERE SUGGESTION” AND NOT PROTECTABLE. THE IDEA MUST BE FULLY DEVELOPED AND FLUSHED OUT.
 
Nadel v. Play By Play Toys
(2nd Circ. 2000) Nadel began developing an idea for a spinning toy, and created a prototype by transplanting the eccentric mechanism out of some Halloween toys into some monkey skin. The then gave the prototype to Wasserman at Play-By-Play, who represented that he wanted to adapt it into a Tazmanian Devil toy. Nadel was supposed to receive further materials to develop same, but never did. They released the toy later without ever involving or paying Nadel, claiming his idea was unoriginal and they had independently developed the idea without him in Hong Kong.
 
Sotomayor discuses Apfel (1993), which clarified the distinction between “novelty” pertaining to property based versus contract based misappropriation claims. Under New York contract law the standard is “novelty to the buyer”, so while an idea maybe unoriginal, it may have particular value to the buyer, thus serving as consideration. By contrast, a misappropriation (property based) claim requires that the idea the novel and original absolute terms because this theory only protects that which is not free and available to all.
 
Nadel Test for Novelty (Misappropriation Theory) 2nd Circuit
1.      Generality v. Specificity – is this a general concept one of specific application?
2.      Commonality – how many people are aware of the idea?
3.      Uniqueness – how different is this from ideas generally known?
4.      Commercial Availability – how available is this idea to the industry?
 
PROPERTY-BASED MISAPPROPRIATION REQ’S GENERAL NOVELTY
(no one has thought of it before)
 
Property rights by nature cannot attach to something freely available, as an idea already known to others clearly is.
 
CONTRACT-BASED MISAPPROPRIATION ONLY REQ’S RECIPIENT NOVELTY (idea is novel only to the recipient)
 
The idea needs only be novel enough to constitute minimum consideration to support an enforceable contract. If the idea is so widespread as to have entered the public domain, the consideration may be so ineffectual as to fail as consideration.
 
New York uses contract theory.                                                      THREE WAYS TO PROTECT AN IDEA     
“Ink is still wet” – defense to novelty                                             1. Express Contract
                                                                                                         2. Double Envelope Approach
Defenses:                                                                                         3. Send a letter on behalf of client to venture
1.      Independently Developed                                                                        capital firm before client meets to discuss
2.      Idea was not novel                                                                                    idea
3.      Idea was not concrete
 
 
 
                                                                                                      III.        UNFAIR COMPETITION
Passing/palming off, false advertising, commercial disparagement, and misappropriation
 
R.2d. Unfair Competition §2:
“One who, in connection with marketing of goods or services, makes a representation relating to the actor’s own goods…that is likely to deceive or mislead prospective purchasers to the likely commercial detriment of another…is subject to liability.”
 
Lanham Act (TRADEMARK) § 43(a), 15 U.S.C. § 1125(a): (passing off / reverse, false advertising, commercial disparagement)
Prohibits the use of “false designations of origin” in connection with goods, services, or their containers that are “likely to cause confusion, to cause mistake, or to deceive as to the affiliation, connection, or association of [the user] with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities.” (cannot use doctrine if it subject matter would fall within patent or copyright law. See Dastar.)
Passing/Palming Off
Occurs when the defendant makes some form of false representation that leads consumers to believe that defendant’s business, goods, or services come from or are sponsored by or affiliated with the plaintiff.
 
1.      Direct False Representation
●       Example (Passing Off): defendant, the retailer, specifically tells customers that his goods or services come from plaintiff when in fact they do not. Most classic form is COUNTERFEITING
●       Example (Palming Off): (COCO-QUININE) William R. Warner v. Eli Lilly defendant, a retailer, fills customers’ orders for plaintiff’s brand by supplying brand X and not telling customers of the switch.
 
2.      Indirect False Representation
The defendant may in

which is obtained through a zinc recovery process. Metallurgical wished to exploit this new method, and ordered two zinc recovery furnaces from Therm-O-Vac. After receiving the furnaces, Metallurgical modified them extensively to improve performance through experimentation. A year later, they ordered a third furnace from Therm-O-Vac, including in their order their “hard-won” modification requests. They delivered the furnace complete with modifications before going bankrupt and re-forming as Fourtek, which went and built a furnace for Smith that incorporated the modifications.
 
PROTECTABLE TRADE SECRET
1.      SECRECY: if discussed with third parties, only “limited disclosure”, not made public to further economic interests
2.      VALUE: must provide a clear competitive advantage over competitors who do not know it
3.      COST: secret was obtained through time, effort, and  money
 
Court found all elements satisfied and also looked at a possible breach of confidentiality. Directed verdict as to Smith, because he did not actually use the trade secret, which is a required element of trade secret misappropriation.
 
Six Factor Test for Trade Secret Status/Claim: (Must be established before claim can be brought)
1.      How widely is the idea or information known outside the claimants business?
2.      Who within the claimants company knows the idea or information?
a.       Business must exercise reasonable precautions:
                                                                                      i.      Examples: reveal info on a “need to know” basis, notify workers that info is secret, restrictive covenants (confidentiality agreements/N.D.A.s), exit interviews, encryption.
                                                                                    ii.      Factors: Adequate compensation, unique/extraordinary, public policy.
3.      What measures has the claimant taken to ensure that the idea or information remains secret?
4.      The ease of difficulty with which the information could be properly acquired or duplicated by another.
5.      How valuable is the idea or information to the claimant and its competitors?
6.      How much effort or money the claimant expended in developing or acquiring the idea or information?
Improper Means
E.I. DuPont deNemours v. Christopher
(5th Circ. 1970) the Christopher’s were caught flying over P’s exposed construction site, taking pictures of machinery used in a new and secret process of producing methanol. P claims it sought to keep the technology secret to gain competitive advantage at great expense. Here, the expense to protect from industrial aerial espionage would have outweighed reason. Plaintiff need only take reasonable steps to protect itself. Even though the flight was lawful and the photos were lawful, this is not bar to liability if they obtained through “improper means.” If the plaintiff did not voluntarily reveal its trade secret to the defendant, and the plaintiff took reasonable measures to keep its trade secret a secret, reasonably accepted standards of commercial morality required that the defendant refrained from acquiring the trade secret in a manner that gave him a “free ride.”