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Intellectual Property
University of Pennsylvania School of Law
Wagner, R. Polk

Intellectual Property

Wagner

2014

“To promote the progress of science and the useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries…

(Art. I, § 8, cl. 8)

Types of IP: Trade Secret, Patent, Copyright, Trademark/Trade Dress

Point of IP Rights

– development, protect creators

– non-rivalry of goods

– incentivize innovation

Ways Around IP

1) R&D Subsidies

· government tells people to go create something (Ex. NIH)

· useful b/c private inventors might be risk-averse or high costs to enter field

· downside: have to know in advance what we want and what its worth, market does a good job figuring that out on its own, could be areas of research that the gov’t might not want to promote and also they may not recognize a great invention where the market would; need great central planning and there is a potential for political corruption

2) Awards

· Get best people in the world to work on a problem, get ton of research focused on that interests, incentivize people- competition not just money can also motivate people

· Downside: have to know what you want, lead to wasteful work and less innovation; need an omniscient person or group to feel that one project in particular is extremely important

– BOTH OF THESE do not allow for rewarding accidental discovery and it is hard for literature and film to be explained in this way

· Example of consequentialist thinking

IP Rights Justification

1) Natural Rights Theory- Labor Theory (John Locke), Combining your labor with something makes it your property, Non-consequential = desert theory (I deserve it because I created it, aka “sweat of the brow” theory, Problems: patent racing and overinvestment in certain types of patents, underinvestment in development of other types of patents and inefficient investment

2) Personhood Theory- Radin, property is part of what defines you as a person, Individuals are bound up with certain objects (within limits), certain things are especially bound up with the person and they thus cause greater loss- should not be able to be taken away easily, most naturally seen in copyright (increasing years on the copyright term has brought this closer to personhood and farther away from a utilitarian justification), not in TM à doesn’t explain all of IP

1) Utilitarian/Economic Theory- consequential, care about results much more than how you get there, Constitution – based = Art I § 8: “promote Arts”- desire to promotes progress of science and the artsà based on consequentialism (to promote ends), want to provide incentives for investment in creativity/invention, but concerned with the Access / Incentive tradeoff

IP as Property Rights- IP rights are a grant of rights to exclude others from the scope of the IP right, interference with the free market

Public Goods- nominal and nonexcludable, can’t exclude to just paying customers, will be under produced unless there is an intervention (paid for by taxes), problem with free-riders in IP, can argue that copyright and patent laws protect “public goods”

IP Rights Process

– allow for supra-normal economic returns (more than just marginal costs) b/c IP rights give the right to exclude (Ex. If CD’s were not copyrighted then more and more would enter market, drive down price and creator would stop creating b/c not able to recoup huge up-front costs)

– economic reward is determined by the market and varies with one measure of the social value, allows for flexibility and adaptability

– not quite monopolies b/c having a right to your property is not a market and monopoly means exclusive rights to a market, not just a particular good, are other substitutes here (market alternatives), but these holders have the right to charge above marginal cost

– Downside:

o Less competitive markets = deadweight loss- by giving person right to own work will mean some people can’t buy product even though he would lower the price

§ Deadweight loss- net cost to society due to market imperfections or government interventions like trade restrictions, losses by consumers or producers that are not offset by gains elsewhere, like increased government revenues.

o Property rights can stimulate undesirable behavior

o transactions don’t happen, can harm future activities

o Significant costs of administration, enforcement

– Need to balance social welfare with the deadweight cost of the economy—need to find the sweet spot in the middle where the owner’s rights, the incentives and the costs are even

I. Copyright

Types of Work

Literary and artistic works

Standard

Originality, authorship, fixation in a tangible medium

Acquisition

Automatic, registration for enforcement/remedies

Law

17 U.S.C.

Term

Life of Author + 70 years or 95/120 years

History of Copyright

– Statute of Anne (England, 1710)- Gave book authors 14 year monopoly over their works, renewable once (better to give to the authors than to the printers who would create a monopoly)

– Many of the United States passed similar laws shortly after independence

o Copyright Act of 1790—very similar to Statute of Anne/14 years and renewable for 14 years- granted authors protection for books, maps, charts

o Copyright Act of 1909—expanded terms of “all writings” include manuscripts, speeches, etc; broadened scope of copyright protection- all writings to reach works in progress and speeches/ increased term to 28 years and 28 years of renewal; continued discriminating against foreign works

o Copyright Act of 1976— copyright protection was extended to sound recordings—all written works fixed in tangible medium of expression/ life of author + 50 years or 75 for anonymous works or works made for hire; added fixation requirement and fair use, compulsory licensing requirements and preempting state protections that impinged on federal protection

§ 1980: incorporated protection for computer programs

§ 1998: Sonny Bono CTEA (author’s life + 70 years or 95 years after publication whichever is longer)

§ Berne Convention joined by US in 1989 to expand protection of US works in world and US influence on global copyright increased

§ In the digital age of the 1990s many amendment were added- levy on blank media, income for webcasts, criminal enforcement for piracy over digital networks increased/ penalties for those who circumvent © protection

– Philosophical roots

o Economic/utilitarian—method used in U.S.- Want to incentivize and stimulate artistic creativity for general public good, based in the constitution b/c consequentialist to promote science and the arts

o Natural rights/Lockean theory- Authors deserve to own the works they have created

o Personality theory- Strong in Europe (although has some influence in US through TRIPS- international agreement)

Change in Duration- longer over time b/c business have more interest so lobby and better technology to copy

Formalities- © not required but has advantages (§401-407), Berne Convention in 1989 CR became automatic

– registration is necessary to sue for CR infringement (see 411); also for availability of statutory damages

§ 102. Subject matter of copyright: In General

(a) Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Works of authorship include the following categories:

(1) literary works;

(2) musical works, including any accompanying words;

(3) dramatic works, including any accompanying music;

(4) pantomimes and choreographic works;

(5) pictorial, graphic, and sculptural works;

(6) motion pictures and other audiovisual works;

(7) sound recordings; and

(8) architectural works.

(b) In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.

Notes:

– spontaneous, one time performance is not subject to copyright

– (b)- ideas are not subject to copyright, Idea-Expression dichotomy to distinguish from patentable materials

– 2 criteria of copyright protection- originality and fixation in a tangible form

§101 “Fixed”

A work is “fixed” in a tangible medium of expression when…

“its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration. A work consisting of sounds, images, or both, that are being transmitted, is “fixed” for purposes of this title if a fixation of the work is being made si

to protect the fixed expression or manifestation of an idea rather than the fundamental idea itself

– §102(b) says ideas are not subject to copyright, maybe could get a patent

– Copyright is suppose to express expression

– MERGER doctrine:

o When there is only one or but a few ways of expressing an idea then the courts will find that the idea behind a work mergers with its expression and the work is not copyrightable

o When there are extra things that are not part of the system then those can be copyrighted

o When expression is intermingled with the idea then not subject to copyright protection

Baker v. Seldon, SCOTUS 1879

Point: Ideas and the expression of them is not always separable, no copyright over forms

Facts: Seldon wrote a book describing and forms for using bookkeeping system, Baker wrote similar books but used a different arrangement of columns and different headings

Holding: underlying bookkeeping system cannot be copyrighted (maybe patented)

Reasoning:

– difference between the book and the art which it intended to illustrate, system is a process/idea that is not subject to copyright

– only a limited way to express this idea, no way to separate the form from the idea of a book-keeping system, blank accounting forms are not subject to copyright

– err on side of too little protection, rather than too much

– Copyright meant to incentivize expression & dissemination of ideas – advance progress of “Science” but copyright counterproductive if thereby monopolize underlying ideas

– Some things are so basic and utilitarian, not what copyright was suppose to be protecting (expression)

– Might have been able to say Seldon’s forms were protected in a narrow way and Baker did not infringe

– Copyright Office Regulation FR § 202.1: no copyright for forms, recipes, other works verging on “merger”

Morrissey v. Proctor & Gamble, US Court of Appeals for the 1st Circuit, 1967

Point: An expression cannot be copyrightable if the information it conveys is so simple that there are only a handful of ways it can be expressed.

Facts: π is copyright owner of a set of rules for sales promotion contest of a sweepstakes, Δ copied rule 1 almost precisely for its own contest

Holding: rules are not copyrightable but only b/c could lead to exhausting all possibilities of future use

Reasoning:

– An expression is not copyrightable if it is so simple it can only be expressed in a handful of ways

– Some things are so fundamental that we don’t want to lock them up with copyright

– When there are only a limited number of ways to express something allowing copyrighting would exhaust all possibilities of future use

– does say that rules, even though very functional, there is more than one way to express the rules

Notes:

– For much the same reasons as no copyright allowed on ideas, processes, or methods, also no copyright on facts or even standardized methods of expression

E.g., scenes-á-faire: scenes, characters, even plots that are indispensable to or simply expected in discussing given topic, applies to computer software (as literary works), architectural works, etc

Scenes-á-Faire Doctrine- copyright does not extent to the incidents, character, or settings that are as a practical matter indispensable or at least standard in the treatment of a given topic, ex. all police shows are going to have the same stereotypical characters

– in computer programming: elements that are dictated by external factors such as “the mechanical specifications of the computer on which a particular program is intended to run,” considerations of efficiency, or “widely accepted programming practices within the computer industry.” (Atali)