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Introduction to Intellectual Property
University of Iowa School of Law
Hovenkamp, Herbert J.

Intellectual Property

Causes of Action

1. Trademark
1.1. Infringement
1.2. Dilution
1.3. Cybersquatting.
1.4. Contributory infringement. CB 135.
1.5. False endorsement.
1.6. Reverse passing off.
1.7. False advertising. CB 135.
2. Copyright
2.1. Infringement
2.2. Contributory or vicarious infringement
2.3. DMCA
3. Patent
3.1. Valid patent

Organizing Framework

Policies of Intellectual Property
1. Welfare maximization (a problem only when transaction costs and weak exclusivity)
1.1. Achieve dynamic efficiency (i.e., incentive to improve a resource; effected by right to exclude)
1.2. Achieve allocative efficiency (i.e., resource in hands of efficient user; effected by alienability)
1.3. Internalize externalities (solved if resource is owned and owner has effective/strong exclusivity) (externalities are relevant to both allocative and dynamic efficiency)
1.4. Minimize regime costs (the resources spent to identify, communicate, protect property rights)
1.5. Minimize error costs (allocation of entitlements is difficult, sometimes sub-optimal)
2. Freedom of expression
3. Privacy
4. Natural Law (rejected, but still influential) (tends toward absolute property rights)
4.1. Cult of the Author (i.e., Author qua Muse-inspired Genius)
4.2. Lockean Labor Theory of Value (i.e., sweat of the brow)
5. Democracy (requires cheap and plentiful information)
6. Fairness
6.1. Distributional fairness (typically this is the quintessence of property theory; not in IP?)
6.2. Reliance-based fairness (i.e., protecting reasonable/justified expectations)
7. Protecting marginalized groups (e.g., minorities, poor, etc.)
8. Liberty (decentralized property disables Leviathan)
9. Individual autonomy (property enables Man qua Attempter) (my favorite policy)

Tensions / Trade-offs in Intellectual Property (private property v. public domain)
1. Dynamic efficiency v. internalize externalities: IP qua incentive v. IP qua input (fuels future creativity, i.e., public-domain IP has positive externalities). I.e., public good / tragedy of commons v. rights thicket / tragedy of the anticommons / OTSOG.
2. Dynamic efficiency v. allocative efficiency: IP qua incentive v. IP qua monopoly (creates deadweight loss; enables monopoly leveraging through lock-ins/network effects and tie-ins). Compare INS (granting Π a quasi-copyright over fresh news so as to incentivize reporting); Grokster (holding that protecting Π’s copyright qua incentive outweighed the risk that an expansive contributory liability regime would risk monopoly leveraging) with Skylink (thwarting Π’s attempt to use its copyright/monopoly to leverage monopoly power into the generic GDO market); Lotus (holding Π had no copyright/monopoly on the user interface, else Π would be able to take advantage of the network/lock-in effects to increase monopoly power in software markets); TrafFix (denying Π a trademark over functional springs, else Π would have super-patent on the signs); Sony (granting third-party users the fair-use privilege of “time shifting” Π’s programming, releasing Δ from contributory liability, less Π leverage its monopoly power into the VCR market); Heileman (denying Π a trademark over a generic term, less Π use its monopoly over a term to gain market power in the beer market); Playboy (entitling Δ to use Π’s trademark for a nominative use to market herself).
3. Dynamic efficiency v. freedom of expression: IP qua monopoly v. IP qua medium of expression. (Solved through fair use doctrine qua public access doctrine). Compare Michigan Document (en banc) (protecting Π’s copyright by denying a fair use for coursepack copying at the expense of the education interests advanced by cheap coursepacks) with
4. Natural Law v. all other policies: IP qua absolute right v. IP qua relative right. Compare USOC (denying a fair-use privilege in Π’s trademark to the Gay Olympics); MAI (defining formally “copying” so as to find infringement by repairmen who copied program onto RAM, and then denying repairmen a fair-use privilege in Π’s program for momentary copying) with any case entitling a fair-use privilege to further expression, efficiency, etc.
5. Freedom of expression v. freedom of expression. IP qua fuel for expression v. IP qua barrier to expression. Compare Harper & Row (denying Δ a fair-use privilege to quote from Π’s book for news reporting purposes b/c that would undermine the incentives to write books) with Suntrust (entitling Δ with a fair-use privilege to parody Π’s work, even for a for-profit parody); Acuff-Rose (same); L.L.Bean (entitling Δ with a fair-use privilege to use Π’s trademark for parody, even for a for-profit parody); Wal-Mart (same).

Archetypes of Argumentation (a lawyer fills conceptual boxes with the motive of persuasion)
1. Metaphors. Boyle loves these. I doubt their persuasive value. Goal: Say “This is like …” 5 times.
2. Judge 1 Literalism. Use the plain meaning of the rule to decide cases. I.e., the conceptual boxes that are the components of the rule are assumed to be self-defining, apple-like concepts. Ignore the policies motivating the rule. That’s judicial activism.
3. Judge 3 Policy. Those conceptual boxes aren’t self-defining. Language is fundamentally ambiguous. To define the concepts, we must resort to the policies motivating the rule. Law is above all consequentialist. Any given holding will have a huge set of consequences, but only a subset of those consequences matter. That subset of consequences is defined by the policies that motivate the law. The job of a judge is to decide which holding will most effect the policies (i.e., the judge acts as an economist, doing cost-benefit analysis). Of course this begs the question: how does the Judge-Economist discover the policies? From the plain meaning of the rule? Maybe J1 wasn’t so dumb.
4. Precedent. A mix between J1 and J2. Decided cases stand in to assist the identification of the likely consequences of any holding, to help define the motivating policies, and to facilitate a weighing of the costs and benefits. An added advantage is that law-abiders now can act in the Shadow of the Law.
5. Baselines and presumptions. The starting point of analysis affects the outcome of analysis. E.g., “this is my right, why should I subsidize you?” v. “you never had a right, so what’s the problem?”
6. Time-framing. Subset the consequences of a holding by focusing on different time spans.

Is Δ liable for trademark infringement?

1. Did Π own a valid mark?
1.1. Physical use?
1.2. Cognitive use?
1.2.1. Generic?
1.2.2. Merely descriptive, without secondary meaning?
1.3. § 1052 prohibitions?
1.3.1. Resembles another mark (consumer confusion)?
1.3.2. Functionality?
2. Did Δ “infringe” P’s trademark? (I.e., is there a likelihood of consumer confusion.)
3. Affirmative defenses?
3.1. Fair use?
3.2. Nominal use?

Π is entitled to various remedies if (I) Π owns a valid mark, (II) Δ’s use of its mark infringed Π’s mark, and (III) Δ can not escape liability through an affirmative defense.

I. Does Π own a valid trademark? § 1052.

Rule. Lanham Act intends to protect marks that are used “to indicate the source of the goods.” § 1127; Qualitex (S.Ct.1995) at 45.[1] A mark is used in this “trademark function” only if the mark is (A) physically used in commerce and (B) cognitively used. Even if used in a trademark function, a mark is outside the scope of trademark if (C) the mark falls with any of the § 1052 prohibitions. E.g. Qualitex at 46; Two Pesos at 42 (“It is also clear that eligibility for protection under § 43(a) depends on nonfunctionality.”).

Policy. Trademarks should be granted only when they enable/facilitate competition. Sometimes, granting a trademark will not facilitate competition, e.g. a functional mark precludes rivals from competing on that trademarked feature. Doctrine disqualifies these marks for trademark protection.

Subject matter. Trademark protection extends to any word, name, symbol, or device that serves to identify the source of the product by distinguishing the product from competing products. This includes product packing and product configuration, i.e., trade dress (“the total look and feel”).

Unregistered marks. The Lanham Act protects both registered and unregistered trademarks. § 1125; Two Pesos. The “general principles qualifying a mark for registration under [§ 1052] … are … applicable in determining whether an unregistered mark is entitled to protection under [§ 1125].” Two Pesos.

Incontestable marks. If the mark has been registered for five years, the validity of the mark is incontestable. § 1115(b).

Trade dress. Trade dress claimants must prove dress is not functional. See infra.

how the relevant purchasing public’s understanding of a contested term, including purchaser testimony, consumer surveys, dictionary definitions, trade journals, newspapers, and other publications.” Dial-A-Mattress at 57.

Compound-word term. If the components of the mark are common descriptive terms, i.e. generic, a combination of such terms is also generic. Multistate Legal Studies at 36 (finding that “Multistate Bar Examination” was generic); Dial-A-Mattress at 57.

Compound-word phrase. However, compound-word phrases are treated differently from compound-word terms. With phrases, even if the constituent parts are generic, the phrase as a whole might be distinctive. Dial-A-Mattress at 57 (finding that “1-888-Matress” was a phrase and thus the phrase test should have been applied to determine whether it was “generic”).

[1] Microstrategy (“§ 43(a) of the Lanham Act … does require that in order to obtain trademark protection ‘a designation must be proven to perform the job of identification: to identify one source and distinguish it from other sources.”).

[2] Microstrategy (“‘a plaintiff must show that it has actually used the designation at issue as a trademark’; thus the designation or phrase must be used to ‘perform[] the trademark function of identifying the source of the merchandise to the customers.’”).

[3] Heilman at 35 (“[A] term for which trademark protection is claimed generally fits somewhere in the spectrum of classifications ranging from (1) generic or common descriptive and (2) merely descriptive to (3) suggestive and (4) arbitrary and fanciful. A generic or common descriptive term is one which is commonly used as the name or description of a kind of goods. It cannot become a trademark under any circumstances…. A merely descriptive term specifically describes a characteristic or ingredient of an article. It can, by acquiring a secondary meaning, i.e., becoming ‘distinctive of the applicant’s goods’… become a valid trademark. A suggestive term suggests rather than describes an ingredient or characteristic of the goods and requires the observer or listener to use imagination and perception to determine the nature of the goods. Such a term can be protected without proof of a secondary meaning [e.g. “Tide” or “Coppertone”]. An arbitrary or fanciful term enjoys the same protection as a suggestive term but is far enough removed from the merely descriptive not to be vulnerable to possible attack as being merely descriptive rather than suggestive [e.g. “Kodak”].”).

[4] “Marks which are merely descriptive of a product are not inherently distinctive. When used to describe a product, they do not inherently identify a particular source, and hence cannot be protected.” Two Pesos at 42; § 1052(e). “However, descriptive marks may acquire the distinctiveness which will allow them to be protected under the Act. Section 2 [§ 1052] provides that a descriptive mark that otherwise could not be registered under the Act may be registered if it ‘has become distinctive of the applicant’s goods in commerce.’” Two Pesos at 42 (citing § 1052(f)). “This acquired distinctiveness is generally called ‘secondary meaning.’” Two Pesos at 42.

[5] Dial-A-Mattress at 57 (“The determination of whether a mark is generic is made according to a two-part inquiry: ‘First, what is the genus of the goods or services at issue? Second, is the term sought to be registered … understood by the relevant public primarily to refer to that genus of goods or services.”).