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

Professor Caudill                                                        Property                                                                           Spring 2011
 
Intellectual Property
Ø  Constitution:  Congress has the power to promote the progress of science and arts, by securing for limited times to authors and inventors, the exclusive rights to their respective writings and discoveries.
I.        COPYRIGHTS
A.       Copyright – 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:
                                                               i.      Reproduce the work.
                                                              ii.      Prepare derivative works based upon the work.
                                                            iii.      Distribute copies of the work to the public.
                                                            iv.      Perform the work publicly.
                                                              v.      Display the work publicly.
B.       Originality – Work must be original for copyright protection. Requirement is mandated by Constitution, which empowers Congress to enact laws only promote the progress of Science.  W/o originality, “progress” is not promoted. The test is whether a work contains a “minimal level of creativity and originality.”  Copyright laws do not depend on the quality of the work. Bad poetry can be copyrighted.  A copyrightable work needs only to be “original.”
                                                               i.      Ex:  No copyright for removing Shakespeare “e’s” b/c not original and doesn’t promote science.  Didn’t write anything creative.  Translating Shakespeare to Spanish may get copyright b/c requires minimal creativity.
C.       Functionality – Not copyrightable.  Not allowed to copyright a function or procedure, but you can trademark procedures as long as it meets the trademark requirements.
D.       Familiar Shapes – Not copyrightable because such shapes and designs on their own without any more creativity do not originate with the alleged author. 
E.        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.
                                                               i.      Fair use Exception:  People can use a portion of your copyrighted material for educational/news purposes
F.        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.
G.       Comments:
                                                               i.      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.        TRADE DRESS
A.       Trade dress is overall appearance, feel, or whole image of a product (or business). 
B.       Secondary meaning is not required if the trade dress is inherently distinctive.
C.       Comments:
                                                               i.      A mark is inherently distinctive if it is unique and fits no other similar producer’s packaging – like Exxon.
                                                              ii.      A mark is not particularly distinctive if it partially describes the product like “Nice N’ Soft” bathroom tissue. In this case, the distinctiveness depends on proof that the mark has some degree of public association with the source – secondary meaning. So in addition to describing the goods as nice and soft, it has a secondary meaning – that the source of the goods is Nice N’ Soft.
                                                            iii.      Descriptive marks require more in the way of secondary meaning than fanciful or arbitrary ones because the descriptive marks may apply to many goods (lots of goods are nice and soft) where as with fanciful or arbitrary marks, the meaning of the marks is unique in being associated with that particular good (Exxon previously had no association at all) (not all computers are Apples).
III.    TRADEMARKS
A.       Trademark – 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. 
                                                               i.      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.
                                                             ii.      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.
Trademark Infringement
                                                               i.      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. 
                                                             ii.      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.
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.
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.
                                                               i.      Fanciful – one that is not otherwise a word (Exxon)
                                                             ii.      Arbitrary – one that has no connection to the product (Apple Computers)
                                                            iii.      Suggestive – merely suggests the product’s identity (Coppertone tanning lotion)
                                                            iv.      Descriptive – describes a good (Nice N’ Soft); can be copyrightable with secondary meaning
                                                             v.      Generic Identifications – cannot serve as trademarks (beer) and is never copyrightable
Comments:
                                                               i.      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
                                                              ii.      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.
                                                            iii.      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.
                                                            iv.      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.  
IV.      PATENTS
Requirements
                                                               i.      Novelty – the invention must be new, different from prior art.
                                                              ii.      Useful – must do something useful, it must have a function. An idea or concept is not useful in this sense and cannot be patented.
                                                            iii.      Non-Obviousness – 2 Tests:
1.       Subjective Test – The invention must not be obvious to a person of ordinary skill in the art
2.       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.
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. 
1.       Protects against reverse engineering. (Trade secrets do NOT).
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 expe

now where it is.  The rights go to finder but not superior to true owner.
a.        Tie-Breaker: when ownership category is ambiguous we presume property is lost.  Burden on landowner to rebut.
C.       Mislaid to Landowner
1.   Property is considered mislaid when the owner voluntarily puts it in a particular place, intending to retain ownership, but then fails to reclaim it or forgets where it is.  Rights go to land owner incase the owner returns.
a.        Look to the circumstances of how/where the property was left to determine if it was voluntarily placed or lost.
D.      Treasure Trove
1.   Property which carries the thought of antiquity.  Consists of gold, silver, currency, or the like intentionally concealed in the distant past by an unknown owner for safekeeping in a secret location.
II.      Bailments
A.       For Hire
1.  A bailment is the rightful possession of a chattel by someone other than the owner.  The property is legitimately transferred from the bailor to the bailee.  The bailee’s duty is reasonable care for the chattel and is governed by the ordinary negligence standard.    Liability depends on the fault of the bailee.  A bailee is presumed liable if the bailor can show that the following conditions were met:
a.       Express or implied agreement to create bailment
b.       Delivery in good condition
c.        Acceptance of the property
d.       Failure to return or return with damage
2.   Bailee’s Rebutting Presumption of Negligence
a.        Once negligence presumed on the bailee then the bailee has the burden of proving that he was not negligent b/c he has better access to the facts (res ipsa liquitor)
B.       Gratuitous bailment (bailment without payment)
1.   Less liability than bailment for hire.  Standard of care is only slight diligence.  Can be sued if bailor can prove that the bailee acted with gross negligence.
III.      Fugacious Property:  no one yet possesses.
A.       Rule of Capture
1.   Wild animals are not owned in their natural habitats.  Rule of capture holds that property rights are acquired only through physical possession.  The first person to kill or capture a wild animal acquires title to it.  This law was created to provide a bright line.  Policy is to reward success, minimize litigation, and establish certainty in property rights.
B.       Rule of Probable Capture (Ownership by Harpoon):  Doing all possible to make animal own (mortally wounding) then that is sufficient.
C.       Applying Capture Rule to Mineral Rights
1.   Stationary:
a.        Minerals fixed under the ground belong to landowner above; neighbor cannot dig down and over to get minerals
2.   Fugacious:
a.        Above landowners have constructive possession of oil under property, but others can lure it away as long as they don’t trespass.  Problem b/c people would compete by drilling on their property to get others oil.
                                                               i.            Solution to Invading Correlative Rights:  Forced Pooling – designed to avoid unnecessary drilling and competition and prevent waste by requiring neighbors to pool their interests and compensate for invasions
D.       Equitable Division:  Concept where the remedy employed to resolve legitimate competing claims is the equal division of the property.  Used when both parties have an equal and undivided interest in the property and the decision to equitably divide is based on promoting distributive fairness, economic efficiency, and preventing violence.
IV.    Negotiable Instruments
A.       Promissory note:  An agreement to pay someone money that contains 4 elements:
1.   Must be an unconditional promise to pay someone or do something (a condition will destroy the negotiable instrument),
2.   Must state a definite time period,
3.   Must state a specific amount,
4.   Must be signed.
B.       Possession of the promissory note establishes ownership and entitles the holder to collect.  Generally must show the original note but in special situations copy of the note will suffice if circumstantial evidence allows.
C.       Holder in Due Course Status:  A bona-fide purchaser of negotiable instrument who can claim rights against debtor.  Requires:
1.   Must have paid value for the negotiable instrument
2.   Must have made the purchase in good faith
3.  Must NOT have ACTUAL notice that the negotiable instrument is defective