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Property I
Villanova University School of Law
Caudill, David S.

Property Caudill Spring 2015

Exam

4 questions, 45 minutes each (3-4 issues a question) The first issue… The Second issue… (IRAC) C = How court may come out on issue.

– IP

– Personal Property

– Real Estate Transactions

– Zoning/Takings

– (probably question on leases and common law estates)

IP – Copyrights, Trademarks, Patents, and Trade Secrets

I. Copyrights – A copyright protects an original work of authorship fixed in a tangible medium that is communicable and is not an idea, process, procedure, method of operation, concept principle or discovery. Copyright is right to use and authorize others to use. Owner of has the exclusive right to do and to authorize others to:

A. Reproduce the work.

B. Prepare derivative works based upon the work.

C. Distribute copies of the work to the public.

D. Perform the work publicly.

E. Display the work publicly.

F.Article I, Clause 8, US Constitution: gives authors exclusive rights to their writings

1. 17 USC 102 (The Copyright Act)

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.

G. Work must be original to qualify for copyright protection, It does not take much originality to justify a copyright. The test is whether a work contains a “minimal level of creativity and originality.”

H. Familiar Shapes – Not copyrightable because such shapes and designs on their own without any more creativity do not originate with the alleged author.

I. Copyright Protection – Copyright protection arises automatically from creation. Registration is not required for creation of property interest or copyright protection, but is required to enforce by a suit & provides extra security.

1. Fair use Exception: People can use a portion of your copyrighted material for educational/news purposes

2. Enforcement of a Copyright – Infringement of a copyright arises only when there is evidence that the infringer had access to the copyrighted work. Mere coincidental similarity is not a copyright infringement if the alleged infringer produced the second creation with no influence from the first.

3. Comments:

4. Copyrights are inexpensive and gives the owner the exclusive right to use and authorize others to use, however copyrights are relatively hard to enforce because the holder has to prove that the alleged copyright infringer had access to the copyrighted materials.

II.Trademarks

A. Trademark is a name, symbol, or other distinctive device that is used/intended for use in commerce to identify the source of the goods. (Service mark is same except associated w/a service rather than a tangible product.)

B. Protecting Trademarks – A trademark provides protection against other marks that might create the likelihood of confusion and the test is whether there is likelihood that a potential consumer would be confused by its source.

C. Trademarks arise automatically from use. Registration of a trademark is not required to establish rights to the mark, nor is it required to begin use of the mark. However, trademark registration is required to enforce.

D. Unlike copyrights or patents, trademark can last indefinitely if the owner continues to use the mark to identify its goods or services. Trademark registrations are for specific terms, but may be renewed based on continuous use during the term of the registration. Trademarks are very inexpensive to obtain.

E. Trademark Infringement

1. Rather than focusing on the device itself or on imitation by the alleged infringer, trademark infringement occurs if there is likelihood that a potential consumer of the goods would be confused about their source.

2. Instances of actual confusion, similarity of sight and sound, and other similarities are all factors of confusion. Proof of actual confusion is best. Trademarks can also protect against marks that dilute your trademark.

F.Functionality Doctrine – Functional aspects of a product are not registrable trademarks. A feature of a product is functional if it is essential to the use or purpose of the article or if it affects the cost or quality of the article so that exclusive use of the feature would put competitors at a significant non-reputation-related disadvantage.

G. Distinctiveness & Secondary Meaning: Terms that are fanciful, arbitrary or suggestive are trademarkable even without secondary meaning. Descriptive words can be trademarkable if secondary meaning is given to them and generic words are usually never copyrightable.

1. Fanciful – one that is not otherwise a word (Exxon)

2. Arbitrary – one that has no connection to the product (Apple Computers)

3. Suggestive – merely suggests the product’s identity (Coppertone tanning lotion)

4. Descriptive – describes a good (Nice N’ Soft); can be copyrightable with secondary meaning

5. Generic Identifications – cannot serve as trademarks (beer) and is never copyrightable

H. Comments:

1. Distinctiveness – An identifying mark is distinctive and capable of being protected if it either (1) is inherently distinctive or (2) has acquired distinctiveness through secondary meaning

2. Secondary meaning is acquired when, in the minds of the public, the primary significance of a product feature is to identify the source of the product rather than the product itself.

3. Color can sometimes be a trademark. Color is a device that can indicate a source so long as the color is associated with a secondary meaning and is not functional. (Qualitex dry cleaning case)

I. Trademarkable?

1. Your name on your law firm – Yes, used to distinguish your legal services.

2. Green Handled Hammer – Yes, if green acquired a secondary meaning and indicates source/distinguishes manufacturer and b/c green is not functional.

3. Fire Equipment Painted Red – No, it’s functional aspect, when you look for fire equipment you look for red; functionality also applies to making a product significantly less competitive – b/c basically all fire equipment is red, trademarking color would place others at a significant non-reputation based disadvantage b/c it may be seen as less quality; plus typical, it’s not distinguishable.

4. Unregistered Trade Dress

a) Trade dress is overall appearance, feel, or whole image of a product (or business)

b)Two Pesos v. Taco Cabana: Secondary meaning not required to prevail for claim under section 43(a) of Lanham Act where the trade dress at issue is inherently distinctive. Secondary meaning only necessary of descriptive marks not distinctive marks

III. Patents

A. Requirements

1. Novelty – the invention must be new, different from prior art.

2. Useful – must do something useful, it must have a function. An idea or concept is not useful in this sense and cannot be patented.

3. Non-Obviousness – 2 Tests:

a) Subjective Test – The invention must not be obvious to a person of ordinary skill in the art

b)Objective Test – The inventions results in unexpected commercial success b/c of a new need in market place. Expert doubts are important factors relating to non-obviousness.

B. What is a patent? – A patent protects anyone who invents or discovers any new and useful process, machine, manufacture or composition of matter or any new and useful improvement thereof. A patent grants the right to exclude infringers. A patent on an invention does not necessarily grant the right to make, use, offer for sale, selling or importing the invention, but the right to exclude others from doing so.

C. Protects against reverse engineering. (Trade secrets do NOT).

D. Protecting Patents – A patent, unlike a copyright or trademark, does not arise from the act of creation or from mere use. Instead, a person who believes he has invented something must file a patent application with the USPTO. The application must describe how to make and use the invention. Although the initial application must be kept confidential by the Patent Office, the grant of patent results in public disclosure of the invention. Process is expensive.

E. Infringement – A person infringes another’s patent if he makes, uses, offers to sell, sells, or imports a patented product or uses a patented process without the authority or permission of the patent owner.

1. The infringer does not need to be aware of the patent to be liable for infringement, although a willful infringer may be liable for enhanced damages.

F.Typical defenses to infringement include:

1. There is no infringement.

2. The patent is invalid/unenforceable.

3. ∆ sued for infringing a patent can argue that the invention was not new, useful, or non-obvious. Though it must give deference to the USPTO’s decision, a jury will ultimately decide the facts.

G. Types of Infringement

1. Literal Infringement: Where the invention is exactly copied. Literal infringement occurs when the accused infringer’s product or process has all elements described in a patent claim.

2. Doctrine of Equivalents Infringement: Occurs when the infringer makes an insubstantial change so that an element described in the patent claims is replaced by an “equivalent.”

a) Defense: Prosecution History Estoppel – If the inventor who narrowed a patent claim in order to persuade Patent Office to issue a patent cannot later claim infringement when a competitor uses what the inventor has deliberately surrendered.

H. Remedies for Infringement – Includes not only damages, but also an injunction against further acts on infringement. Damages may be increased up to 3x the actual damage if the infringement is willful and sometimes attorney’s fees.

I. Copyright Infringement vs. Patent Infringement

1. Patent infringement does not require kno

ance of the evidence standard, but some states impose a “clear and convincing” evidence standard.

3. Presumptions – Sometimes we presume the elements have been satisfied.

a) Marital Presumption – There is a presumption of a gift in a transfer b/t spouses during marriage. Land part of marital estate and divisible on divorce where spouse had contributed to development of property (Plog)

b)Recording a deed in the public records can create a presumption that the deed was delivered and sometimes presumes acceptance. These presumptions reflect the courts preference to rely on deed records valid to avoid the difficulty of proving acceptance.

B. Inheritance by Will

1. Devisee: A person who receives real property from decedent under a will is the devisee.

2. Bequest: A gift of personal property or money under a will is called a bequest.

C. Inheritance Without A Will – If a person dies without a will, the recipients take the property by DESCENT under state inheritance statutes.

II. By Purchase/Transfer – In property transfer agreements, the equitable title passes to the purchaser for the remainder of the contracting period, but the actual legal title stays with owner/seller until the deed has been executed. Person w/equitable title is responsible for taxes or damages during the interim.

III. Adverse Possession

A. Elements to be an Adverse Possessor

1. Actual and Open Possession – Possession is visible and obvious so that the record owner can recognize the possibility of losing the land. Constructive notice is sufficient.

2. Hostile/Non-Permissive – The adverse possessor’s claim to the exclusive right to the land must be inconsistent with the property rights of the record owner. Use by permission is not adverse.

a) Family Relationship Presumption – Some court holds that a close familial relationship between the party claiming adverse possession and the title holder is merely one fact to consider in determining whether use was permissive or hostile. Other courts have held that family relationships create a presumption of permissive use.

3. Continuous – Land should be occupied with hostility for amount of time required by statute.

a) Tacking Successive Possessions for Continuity – Successive occupancies of different possessors can be tacked together. The current claimant adds the time of possession of a predecessor. The rule permitting tacking makes sense, provided that hostile and open occupancy by others is continuous since that is inconsistent with the record owner’s claim of title. (X adversely possesses for six years, Y continues X’s possession for four more, the possessory time is ten years.)

B. Curing: To cure, the landowner must sue to Quiet Title.

IV. Grant: When the government patents land to earliest historic occupiers. This stands up against anything, even discovery.

Possessory and Future Interests

I. Ownership of Real Property

A. Ownership of Real Property

1. Absolute Ownership

a) Fee Simple Absolute (FSA) – A fee simple absolute is absolute ownership, it is the highest form of property ownership – can endure forever. You have clear and exclusive title to the property. No unusual encumbrances.

B. Multiple Interests in the Same Property

1. Division on a Time Plane – We can divide the ownership over time. For example, in a future estate, the current owner of the fee can grant it to “my daughter for her life and then upon her death to her daughter.”

2. Partition or Partial Sale – Fee owner can convey east half to son and west half to daughter, splitting the fee into two equal fees. Or two concurrent owners can partition property that they both own into two separate parcels, each owned only by one in fee simple.

a) Undivided Concurrent Interests

(1) Tenancy in Common

(a) The grantees have co-ownership in FSA [aka cotenancy]. Both tenants own undivided interest in the fee.

(b) Created by the language: “To A and B and their heirs” [heirs being merely a term of art]

(c) Purpose: If grantor wants to convey to two or more people w/o splitting property and property is hard to divide. Generally a bad idea unless divided b/t people who can be expected to fully cooperate w/one another.

(d) Rights Created: