Defenses & Remedies Intro IP – Prof Merges

Agenda Genericide Functionality Abandonment Parody/Nominative Use Remedies

William L. Murphy, who was born in Columbia, California, near Stockton on January 1, 1876, moved to San Francisco at the turn of the century. He lived in a one-room apartment that had a standard bed taking up most of the floor space. Because he wanted to entertain, he began experimenting with a folding bed, and applied for his first patent around The "Murphy Wall Bed Company" of California came into being that year. The first of the folding beds were manufactured in San Francisco. In 1918, William Murphy invented the pivot bed that pivoted on a doorjamb of a dressing closet, and then lowered into a sleeping position - some of which are still in use today.

During the 1920's and 1930's, the popularity of the Murphy Bed was at its peak and in 1925 the company moved its corporate headquarters to New York City and became the Murphy Door Bed Company, Inc. In the 50's and 60's, the beds were sold primarily as a specialty item for builders. William K. Murphy, son of the founder, took over as president. In the 70's this attitude changed dramatically…, focusing attention once more on the problem which William L. Murphy wrestled with in how to make the most of limited space.

Genericide doctrine Marks “born generic” (e.g., Video Buyer’s Guide) vs. those that become generic (Thermos, cellophane) Difference in burden of proving genericness – Burden on defendant/accused TM infringer in cases of “genericide by common usage”

Evidence of genericness PTO decisions Dictionary listings Examples of newspaper and magazine usage – Websites, blogs, etc. – the next frontier

K twist to the case Defendant enjoined from using “Murphy Bed” because of contract that prohibited it Why is defendant situated differently than a third party?

The Shredded Wheat case Genericide standard (“primary significance” test) Relationship to expired patent on machinery for making the product – Watch out for overstatements in the Brandeis opinion!

Antimonopoly case/revision “Buyer motivation” standard Rejected by Congress, see Lanham Act sec. 14, 15 USC 1064

Policing Costs Why necessary? (To prevent genericide, if possible – see Xerox) Always wasted? – Maybe not; may create an “alternative standard”, e.g., “copier” instead of Xerox

Merges, “Locke for the Masses: Property Rights and the Products of Collective Creativity,” 36 Hofstra L. Rev (2008)

Functionality What is the (asserted) TM? Why did district court deny injunction for TM holder?

District court No TM protection (injunction) here because: – (1) No “secondary meaning” for dual spring design – (2) This design is “functional”

Circuit split Role of expired patent – Eliminates chance for TD protection (Vornado) – Does not (other cases)

WalMart v. Samara Bros.

Sup Ct “A prior patent … has vital significance in resolving the trade dress claim” – p. 799 Strong evidence of functionality Heavy burden to show it is merely ornamental or arbitrary

Functionality generally “essential to use or purpose of article” “affects cost or quality of article” P. 801 Aesthetic functionality: “significant non- reputation related disadvantage”

Pagliero v Wallace China – p. 806

Abandonment By nonuse: Major League Baseball By non-supervision: Dawn Donuts

Abandonment facts No licensing by Dodgers until restaurants opened 1988

2 year rule 15 USC 1127 “Warehousing” – not okay Resumption of use – may revive the mark P

Supervision of licensees – Dawn Donut Definition of abandonment: 15 USC 1127 Quality control rationale: p. 817 Relate to merchandising industry...

Standard Likelihood of confusion – not here 1 st Amendment issues: not reached Dilution: noncommercial use, p. 826

New Kids on the Block

Remedies Section 35(a) Lanham Act 15 USC 1117(a)

[Plaintinff can] recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.... In assessing profits the plaintiff shall be required to prove defendant’s sales only; defendant must prove all elements of cost or deduction claimed. In assessing damages the court may enter judgment... for any sum above the amount found as actual damages, not exceeding three times such amount.

Lindy Pen Equitable Accounting: only for willful infringement, cases that meet equitable standard (disgorgement of Bic’s profits)

Other damages Lindy’s lost profits Bic’s actual profits