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

KETTLE COPYRIGHT & TRADEMARK SUMMER 2012

Copyright and Trademark Outline

I. OVERVIEW

IP Laws are here to protect the interest of 3 discrete groups:

Who are in the interest groups we need to be concerned about?

1.) Author/Creator/Inventor,

2.) Manufacturers/Publishers/ Money People/ Investors, Studios

3.) Public/Consumer

*Money encourages the author to create and the manufacturer to manufacture.

*Nobody would invest in an activity in which there is no return.

State or Federal Law Categories

Idea-State Law

Trade Secret-State Law Mostly

Copyright-Federal Law, new law preempted state law, but still few areas where common law/state law still apply.

Trademark-Common Law Based, State Based, and Federal. Federal Does not preempt state or common law in all cases. First in time, first to use are the one who acquire rights to it.

Patents-FEDERAL ONLY, no common law or state protection.

Right of Publicity-Primarily based on State Common Law and State Statutory Law, but it is possible to bring a claim under a Federal Trademark claim though.

****Federal laws that apply to patents and copyright comes from Article I, Section 8, Clause 8 -where congress was granted the power to act our copyright and patent laws to promote the progress of science and useful arts…

Article I, Section 8, Clause 8 source of federal copyright and patent legislation. The Constitution’s framers, in speaking of “Science” in Clause 8, were referring to works of authors, and by “USEFUL ARTS” were speaking of the work of inventors.

When the first copyright act was passed in 1790 you had copyright protection for initial 14 years and potential for renewal for another 14 years so 28 years total.

Then there was an amendment made to the copyright act that was an initial term of 28 and 14 which totals 42.

1909 Act-2 potential terms of 28 each for a total of 56.

1976 Copyright Act (CURRENT ACT) became effective on January 1, 1978

-Works authorized on or after 1978 had new terms

Individual=Life Plus 50 years

Corporation/Work made for hire, anonymous work, pseudonym Work= 75 years from publication or 100 years from creation

Copyright Term Extension Act (CTEA) effective Date 10/27/98

-Any works not put in public domain and were still valid got 20 years added to the duration of its protection

*Sonny Bono Copyright Extension

Individual=Life + 70 Years

Corporations= 95 years from publication or 120 years from creation

*Owners of copyrights would be happy they were getting 20 more years of protection

*People who would profit once the rights expire and would go into the public domain are unhappy.

-Sources who would make copies and would not have to pay royalties

-Businesses that make use and exploit public domain material

Eldred v. Ashcroft- Extending existing copyrights NOT exceed Congress’ Power

US SC 2003

Whether adding this 20 years was unconstitutional?

Argument was patent is 20 years but copyright is much longer, also argued what does “limited times” mean.

SC said constitutional-it is limited and it will have an ending, does not say in perpetuity.

-Argument was it will end up being in perpetuity if we don’t call this out.

-Justification in difference in years for patent v. copyright- In patent no one can make for use, offer to sell or import. There is not public access or compulsory licensing that other countries might have under their patent laws. Difference in the rights granted justify the differences in the duration.

-Another reason for this decision was GLOBAL HARMONY. IP law is now international and we belong to treaties and other countries were already granting life + 70 years, so we basically got on board and it was the driving force behind our treaty obligations.

-Justice Breyer thought this was making copyright in perpetuity by allowing this to occur.

Where does Congress get the power to regulate trademarks?

Article I, Section 8, Clause 3 (Commerce Clause)-source for federal trademark and unfair competition legislation.

What qualifies as a trademark?

-Distinctive Mark

-A word or design, logo

-Phrase Slogan

-NBC Chime (g, e, c)

-A Sound

-A Color (Tiffany’s Box)

Trademarks are only protected as adjectives, once they become a noun no longer protectable.

II. State Law of Intellectual Property

1.) Rights in Undeveloped Ideas (IDEA PROTECTION)

To be protected an Idea must be:

-Novel

-Concrete

-Must establish the Defendant used Plaintiff’s Idea

-Expectation of Payment

**Recovery is based on contract theory (either breach of express agreement to pya for it or implied obligation to pay.

Contract

-Express (Least amount of novelty)

-Implied (Little less novelty)

-Quasi (Unjust Enrichment) (Needs strongest degree of novelty)

-Breach of Confidentiality

Sellers v. American Broadcasting Co. (pg 36)-IDEA PROTECTION COA 11th Cir.

Facts: Plaintiff Sellers informed Geraldo a reporter employed by ABC that he had an “exclusive story,” concerning a “murder-death-theory,” of the King; Elvis Presley. Rivera signed an agreement guaranteeing Sellers copyright privileges and a public credit for uncovering the true cause of the King’s death. Sellers’ theory was that the King died because his physician and bodyguard replaced his cortisone with placebos resulting in a collapse of his cardiovascular system or that they suffocated him in order to prevent the King from seeking repayment of a $1.3 million loan for the construction of a racquetball center. Rivera informed Sellers that the information must be verified before it could be used and to contact him in the event that verification was obtained. ABC and Rivera ran an hour-long broadcast after their own investigation where it was determined that the King died of Polypharmacy (interaction of prescription drugs) and not cardiac arrhythmia as officially listed. The special broadcast and all subsequent follow-up stories did not suggest the King was murdered by a withdrawal of cortisone or by suffocation.

Holding: No. Lower court was correct in finding ABC and Rivera did not use Sellers’ exclusive story in any of their broadcasts, therefore there had not been any misappropriation or breach of their written contract. Sellers’ theories of suffocation and cortisone withdrawal were not used in ABC’s broadcast. The court found that Sellers revealed theory was too vague and uncertain to amount to a cause of action enforceable as a matter of law. Sellers broad, general statements concerning a possible overdose and gross negligence by his physician are not sufficiently concrete to give rise to a cause of action for misappropriation.

-The problem in this case is there was no consideration to accept the express agreement.

-The novelty of the idea would have been the consideration, The information is given in exchange for the money, but here the information was already known so sellers isn’t giving him anything.

*Novelty is equivalent to consideration.*

Idea Misappropriation Law

-Most claims fail on Novelty

2 Types of Novelty

General Novelty-Pretty much no one knows about this, what you shared no one knew

Recipient Novelty-Recipient did not know but others might have but the recipient got value from receiving it and should be obligated to pay.

#1 Defense-we did not use your clients idea-we used someone else’s idea or we had the idea in house.

“The ink is still wet”

-You challenge the recipient we already had it

-Prove it you already had it?

A week later they submit it to you and when you touch the paper the ink is still wet (it was just created)

-If you prepare nondisclosure agreements where someone’s defense is they had it already make them prove it in a very short period of time, like 48 hours with you sharing that information to come back to you with the information they had. More time you give them more likely they will find a way to come up with a way to say they had it already.

-Have them get the idea into a form that would be copyrightable b/c most ideas that are reduced to writing are protectable by copyright or patent law. The client may be better off pursuing those rights first before sharing it.

Company Submissions

-If you can’t get your client to agree or the fear is the other side won’t sign a written agreement or confidentiality agreement that will kill the opportunity to share the idea

2 soft approaches (less threatening) that satisfy implied contract element

1. Double envelope (outer envelope to recipient), inside envelope with a return address to your client or your office, postage prepaid, sealed, attached to the envelope is a notice to the person who opened the outer envelope. Notice states: Read before opening. In this sealed envelope is the confidential material being disclosed for the purpose of evaluation but not use until a separate agreement is entered into because the client is looking to protect a novel idea that the expectation is it will be confidential unless separate agreement is entered into. If you don’t agree to the terms, return the envelope. If you are agreeing you don’t mail it back sealed.

2. Softest approach

-Client sets up the meeting

-Your firm sends a letter to the recipient introducing yourself as the attorney and saying they will share a novel idea on a confidential basis

-Build into the letter confidentiality is expected, it is novel, and expectation of payment

-Nothing needs to be signed

-Your client shows up unless it scares off the person

-Client shows up the following week and person who received the letter from your office open the meeting stating thanks for letting me share this novel idea with you. Send a follow up letter saying what a novel idea and thanking them. Court would consider an implied contract-letter up front, you didn’

resentation branch of unfair competition law deals with the situation in which a business’s use of a deceptive or misleading representation in marketing its goods or services it likely not only to deceive consumers, but also to injure a competitor’s commercial interests.

-When such misrepresentations relate to the source of good or services, the passing off branch of unfair competition regulates them.

-When the deceptive representation relates to qualities or characteristics of the goods or services, the unfair competition claim sounds in misrepresentation.

-The Unfair Competition Restatement loosens this approach by making the likelihood of “commercial detriment” to the P an element of the cause of action for misrepresentation, and by defining “likely commercial detriment” to require “a reasonable basis for believing that the representation has caused or is LIKELY to cause a diversion of trade from the other or harm to the other’s reputation or good will.”

-Statutory provisions on false or deceptive advertising, at both the state and Federal Levels, may also address misrepresentations as to the qualities or characteristics of goods or services.

The principal state statutory provisions are often based on the Unfair Trade Practices and Consumer Protection Act, developed by the Federal Trade Commission in 1967. Some states have also adopted a version of the Uniform Deceptive Trade Practices Act.

b.) Misappropriation

Board of Trade of City of Chicago v. Dow Jones & Co. (pg 67)-SC of Illinois 1983

Facts: The Board of Trade of City of Chicago (P) was the largest commodities exchange market in the US. Member brokerages traded commodities futures contracts there much in the same manner that stock is traded in a stock exchange. Dow Jones & Co (D) offered a variety of financial services, including the most closely watched stock index in the country, the Dow Jones Industrial Average. In 1982, the practice of trading stock in future contracts, in which stock index futures were traded much in the manner of commodities futures, was instituted. As with commodities futures, success at this particular investment depended upon which direction the market went, in this case the market being either individual stocks or mutual funds.

The index adopted by the Board was based on the same companies as those utilized by Dow Jones. Even though the board (P) disclaimed any relation with Dow Jones, its company selection had the practical result of the indexes being the same.

Procedural Posture: Anticipating Dow Jones’s reaction, the board filed an action seeking a declaration that is practice was permissible. Dow Jones cross-claimed for an injunction against the use of the index. The trial court erred judgment in favor of the Board, but the appellate court reversed and enjoined the use of the index. The Board appealed.

Issue: May a party’s product or service be misappropriated even if the appropriating party offers a product unlike any offered by the other party?

Holding: Yes. A party’s product or service be misappropriated even if the appropriating party offers a product unlike any offered by the other party. This particular issue presents a conflict of philosophies regarding the concept of misappropriation. The Board argues that since the parties are not in competition with each other, use of Dow Jones’s index results in no loss to Dow Jones. When all is said and done, the overriding concern in any case is whether social utility is better served by allowing or prohibiting appropriation. Whether the parties occupy the same market is a consideration, but only one of several.

Here, Dow Jones has expended much time, energy, and money to achieve its highly respected status. In the context of stock market futures, any type of index can be used; giving Dow Jones a monopoly on its Industrial Average hardly stifles the market futures market. In fact, doing so may encourage innovation by forcing experimentation. In light of these considerations, the better decision is that the Board be prohibited from using Dow Jones’s index. AFFIRMED.