1. 11/6/2018
Class 2: Booth : The Legal Infrastructure of Business Intellectual Property
Randal C. Picker
James Parker Hall Distinguished Service Professor of Law
The Law School
The University of Chicago
Copyright © Randal C. Picker. All Rights Reserved.

2. The First Monday in October
U.S. Supreme Court
November 6, 2018

3. Information Essentials
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Information Essentials
First Copy Costs High
Expensive to create the first copy
Second Copy Costs Low
Additional copies can be created for very little
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4. Information Essentials
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Information Essentials
Public Good Quality
Competing Uses
I eat the banana; you can’t
Non-Competing Uses
I sing the song; you can too
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5. Information Trade-Offs
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Information Trade-Offs
Creation Incentives v. Optimal Use
Given public-good character, positive price for use results in waste
It costs next-to-nothing for the next person to use, so a positive price results in too little use
November 6, 2018

6. Constitution The Congress shall have the Power . . .
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Constitution
The Congress shall have the Power . . .
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)
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7. 11/6/2018
Copyright
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8. 102. Subject matter of copyright: In general
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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.
November 6, 2018

9. 102(a) The Key Copyright “Equation” OWA + F + TME = ©
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102(a)
The Key Copyright “Equation”
OWA + F + TME = ©
Sec. 102(a): Original work of authorship fixed in tangible medium of expression gives rise to copyright
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10. 102(a) (Cont.) Works of authorship include the following categories:
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102(a) (Cont.)
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;
November 6, 2018

11. 102(a) (Cont.) (5) pictorial, graphic, and sculptural works;
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102(a) (Cont.)
(5) pictorial, graphic, and sculptural works;
(6) motion pictures and other audiovisual works;
(7) sound recordings; and
(8) architectural works.
November 6, 2018

12. 11/6/2018
Section 102(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.
November 6, 2018

13. Let’s Try It
Two Examples
The Poem
The Grocery List
November 6, 2018

14. Idea/Expression Dichotomy
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Idea/Expression Dichotomy
No Control over Ideas
You cannot use copyright to gain control over an idea (102(b))
Copyright Protects Expressions of Ideas
My expression of an idea doesn’t block you from creating your expression of the idea
Both of our expressions will be protected under 102(a)
November 6, 2018

15. Duration of Copyright Sec. 302(a) In General
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Duration of Copyright
Sec. 302(a) In General
Copyright in a work created on or after January 1, 1978, subsists from its creation and, except as provided by the following subsections, endures for a term consisting of the life of the author and 70 years after the author’s death.
November 6, 2018

16. Rights under 106 106. Exclusive rights in copyrighted works
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Rights under 106
106. Exclusive rights in copyrighted works
Subject to sections 107 through 121, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:
(1) to reproduce the copyrighted work in copies or phonorecords;
(2) to prepare derivative works based upon the copyrighted work;
November 6, 2018

17. 11/6/2018
Rights under 106
(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted works publicly;
November 6, 2018

18. 11/6/2018
Rights under 106
(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works … to display the copyrighted work publicly;
(6) <omit for our purposes>
November 6, 2018

19. November 6, 2018
Derivative Work

20. Section 107. Limitations on exclusive rights: Fair use.
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Section 107. Limitations on exclusive rights: Fair use.
Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.
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21. Section 107. Limitations on exclusive rights: Fair use.
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Section 107. Limitations on exclusive rights: Fair use.
In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
November 6, 2018

22. Section 107. Limitations on exclusive rights: Fair use.
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Section 107. Limitations on exclusive rights: Fair use.
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.
November 6, 2018

23. 11/6/2018
Link
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24. 11/6/2018
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Campbell (US 1994)

25. “Although such transformative use is not absolutely necessary for a finding of fair use, … the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works. Such works thus lie at the heart of the fair use doctrine’s guarantee of breathing space within the confines of copyright … and the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.”
November 6, 2018
Campbell (US 1994)

26. “The central purpose of this investigation is to see, in Justice Story’s words, whether the new work merely ‘supersede[s] the objects’ of the original creation, … or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is ‘transformative.’ Leval ”
November 6, 2018
Campbell (US 1994)

27. Dr. Seuss v. Penguin, 109 F.3d 1394 (9th Cir. 1997)
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Dr. Seuss v. Penguin, 109 F.3d 1394 (9th Cir. 1997)
November 6, 2018

28. Says the Court Not Fair Use
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Says the Court
Not Fair Use
These stanzas and the illustrations simply retell the Simpson tale. Although The Cat NOT in the Hat! does broadly mimic Dr. Seuss’ characteristic style, it does not hold his style up to ridicule. The stanzas have “no critical bearing on the substance or style of” The Cat in the Hat. Katz and Wrinn merely use the Cat’s stove-pipe hat, the narrator (“Dr.Juice”), and the title (The Cat NOT in the Hat!) “to get attention” or maybe even “to avoid the drudgery in working up something fresh.” Acuff-Rose, 510 U.S. at 580.
November 6, 2018

29. Leibovitz v. Paramount, 137 F.3d 109 (2nd Cir. 1998)
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Leibovitz v. Paramount, 137 F.3d 109 (2nd Cir. 1998)
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30. 11/6/2018
Says the Court
Fair Use
Whether it “comments” on the original is a somewhat closer question. Because the smirking face of Nielsen contrasts so strikingly with the serious expression on the face of Moore, the ad may reasonably be perceived as commenting on the seriousness, even the pretentiousness, of the original. The contrast achieves the effect of ridicule that the Court recognized in Campbell would serve as a sufficient “comment” to tip the first factor in a parodist’s favor. …
November 6, 2018

31. Parody Videos? 1984 Hillary George Bush/U2
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Parody Videos?
1984 Hillary
Original 1984 Apple commercial
Obama campaign ad
George Bush/U2
U2 live
The George Bush version
And again
November 6, 2018

32. “Google’s mission is to organize the world‘s information and make it universally accessible and useful.”
November 6, 2018

33. November 6, 2018
NYT, 8 Oct 2004

34. November 6, 2018
Google Books

35. November 6, 2018
AG Complaint, 20 Sept 2005

36. November 6, 2018
Settlement, 28 Oct 2008

37. November 6, 2018
SDNY Opinion, 22 Mar 2011

38. The Fair Use Litigation
Key Questions
Is what Google did transformative?
How does what Google did effect the market for the works?
Did Google’s efforts intrude on the derivative work right?
November 6, 2018

39. 11/6/2018
Trademark
November 6, 2018

40. An Introduction to Trademark Law
The Velcro Videos
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41. 11/6/2018
Trademark Law Basics
Trademark protection emerges under state statutory and common law
Federal Registration System Overlays State Law
“The owner of a trademark used in commerce may request registration of its trademark on the principal register … “ (1051(a)(1))
November 6, 2018

42. November 6, 2018
uspto.gov

43. November 6, 2018
uspto.gov

44. November 6, 2018
uspto.gov

45. Possibility 1: Register First, Use Second
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Possibility 1: Register First, Use Second
1051(b)(1) contemplates registration prior to use with a six-month window
A person who has a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the Patent and Trademark Office an application and a verified statement, in such form as may be prescribed by the Director.
Six-month window seen in 1051(d)(1)
November 6, 2018

46. Registration Scope: Particular Goods or Services
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Registration Scope: Particular Goods or Services
37 CFR Requirements for a complete trademark application
(a) The application must be in English and include the following:
(6) A list of the particular goods or services on or in connection with which the applicant uses or intends to use the mark.
November 6, 2018

47. Registration Scope: Particular Goods or Services
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Registration Scope: Particular Goods or Services
37 CFR Bases for filing
(a)(1) The requirements for an application based on section 1(a) of the Act are:
(i) The trademark owner's verified statement that the mark is in use in commerce on or in connection with the goods or services listed in the application.
November 6, 2018

48. 11/6/2018
TM vs. ®
Sec sets out ® as symbol to give notice of federally registered trademark TM
This is the convention for a trademark that is not federally registered
November 6, 2018

49. What Does a Trademark Dispute Look Like?
November 6, 2018
B&B Hardware (U.S. 2015)

50. Trademark: Opposition to Registration
November 6, 2018
B&B Hardware (U.S. 2015)

51. Trademark: Infringement and Likelihood of Confusion
November 6, 2018
B&B Hardware (U.S. 2015)

52. Trademark: Opposition to Registration
November 6, 2018
B&B Hardware (U.S. 2015)

53. Trademark: Benefits of Federal Registration
November 6, 2018
B&B Hardware (U.S. 2015)

54. Trademark: Opposition Proceedings
November 6, 2018
B&B Hardware (U.S. 2015)

55. USPTO Trademark Search
Tess = Trademark Electronic Search System
Search on “Velcro”
November 6, 2018

56. Distinctiveness Classification
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Distinctiveness Classification
Increasing Distinctiveness
Generic
Cola Soft Drink/Oil Change Firm/New Jersey Oil Company
Descriptive
Coca-Cola/Quick Oil Changers/?
Suggestive
Jolt Cola/Jiffy Lube/Standard
Arbitrary or Fanciful
Tab/Exxon
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57. Key Legal Consequences
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Key Legal Consequences
Generic
No mark may be claimed
Mark, even a registered mark, can always be challenged as generic and lose status as protected trademark
Cellophane, aspirin, escalator, thermos
Fighting Generic Status: Kleenex Brand tissues, Xerox, Velcro
November 6, 2018

58. Key Legal Consequences
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Key Legal Consequences
Descriptive
Describes product or its purpose
“Merely” descriptive: No mark may be claimed (1052(e)(1))
Descriptive such that mark has secondary meaning: Mark is good (1052(f))
Secondary meaning means mark means something more than the language itself, an association between the mark and the product in question
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59. Key Legal Consequences
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Key Legal Consequences
But if merely descriptive is registered and not challenged within five years, mark becomes inconstestable (1065)
Suggestive
Can be registered without any showing of secondary meaning
November 6, 2018

60. November 6, 2018
Matal v. Tam (US 2017)

61. November 6, 2018
Matal v. Tam (US 2017)

62. 11/6/2018
Inventions
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63. Trade Secrets The Common Law The Uniform Trade Secret Act
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Trade Secrets
The Common Law
The Uniform Trade Secret Act
Issued in 1979, with amendments in 1985
Codification
Versions adopted in 44 states + D.C.
The Economic Espionage Act of 1996
Makes it a federal crime to “steal” trade secrets
November 6, 2018

64. November 6, 2018

65. Background to Fed Trade Secrets Act (PL 114-153)
Congress.gov
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66. November 6, 2018

67. Patent Law Overview Section 101 provides:
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Patent Law Overview
Section 101 provides:
Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
November 6, 2018

68. Before 9/16/11: U.S. First to Invent
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Before 9/16/11: U.S. First to Invent
US is usually described as a first-to-invent scheme
Standard alternative internationally is first-to-file
Advantages of first-to-invent?
Stops the “race to the patent office” which might hurt small inventors, lead to sketchy disclosures, and increase risk of theft from true inventor.
November 6, 2018

69. Before 9/16/11: U.S. First to Invent
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Before 9/16/11: U.S. First to Invent
Gives inventor time to explore the invention’s value before filing. (So what?)
Decreases the volume of applications.
But first to file is more certain, consistent with dominant international practice, and might mean earlier disclosure.
November 6, 2018

70. Patent Law Overview Section 103 adds:
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Patent Law Overview
Section 103 adds:
A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.
November 6, 2018

71. Patent Law Overview Section 103 continues:
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Patent Law Overview
Section 103 continues:
Patentability shall not be negated by the manner in which the invention was made.
November 6, 2018

72. Patent Law Overview 20 Year Patent Term (154(a)(2))
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Patent Law Overview
20 Year Patent Term (154(a)(2))
Time runs from time date application was filed, so can be less than 20 years (and new rules for this)
Limited possibilities of extension (154(b))
November 6, 2018

73. 2nd Place and Independent Invention
Second place buys you nothing
Unlike trade secrets (and, as we will see, copyright), independent invention is not a good defense
Under the old scheme, first inventor held priority
Under the new scheme, first filer will hold it
November 6, 2018

74. Patent Law Overview Infringement (271(a))
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Patent Law Overview
Infringement (271(a))
“Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.”
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75. Patentable Subject Matter
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Patentable Subject Matter
Ideas Not Patentable
Can’t patent ideas, law of nature, physical phenomena
New minerals or new plants are “discovered” not invented and can’t be patented
November 6, 2018

76. Patent No. 3,009,235 (21 Nov. 1961)
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77. Patent No. 3,009,235 (21 Nov. 1961)
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78. Patent No. 3,009,235 (21 Nov. 1961)
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79. Patent No. 3,009,235 (21 Nov. 1961)
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80. Finding Patents Google Patents http://patents.google.com 5,970,479
November 6, 2018

81. November 6, 2018
Alice Corp ‘479 Patent

82. November 6, 2018
Alice Corp ‘479 Patent

83. November 6, 2018
Alice Corp ‘479 Patent

84. November 6, 2018
Alice Corp ‘479 Patent

85. Alice Corp. v. CLS Bank Int’l (U.S. 2014)

86. An Unpatentable Abstract Idea
“We hold that the claims at issue are drawn to the abstract idea of intermediated settlement, and that merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention.”
Alice Corp. v. CLS Bank Int’l (U.S. 2014)