Monday, August 31, 2009
Does Google's Book Settlement Open the Door to Book Spying?
The concern deals with how Google may track the public search of the anticipated vast digital book files residing on Google's computers. At present, a book browser can walk through aisle after aisle of books in libraries and book stores, examining books of interest without having the browser’s conduct tracked. No one maintains data on which aisle the browser walks down or which books the browser examines and reads. But Google is different. We already have familiarity with Google’s tracking methods for monitoring a web user’s search inquiries and web viewing habits. There is no reason to believe that Google’s digital book catalog will not have similar capabilities to track a user’s browsing interests, and to record the types of books a person examines and downloads.
Is this right? Is this what the public expects when it comes to browsing and reading books? Is the public willing to allow Google’s big brother website monitoring habits to apply to the public perusal of books? Recall that in 1953 Ray Bradbury published Farenheit 451 about the control of public thought and expression via the control of books.
It does not appear that Google’s settlement agreement speaks to its intention to monitor reading habits. This suggests, of course, that unless Google is forced not to monitor book viewing and selections then there is no good reason to believe that Google won’t track the public’s review and reading of books. More information about the position of the EFF, ACLU of N. Cal. and the Samuelson Clinic at Berkeley is available online at this link.
Transfer of Patent Without a Writing
Last week’s Federal Circuit case challenged the right of involuntary assignment in a foreclosure under UCC Article 9 when there was no written assignment and when the recipient of the patent is not the patentee, heir or assignee. In particular, the patent owner granted a written security interest in the patent to a lender as collateral for a loan. The loan became in default and the lender foreclosed pusuant to the UCC Article 9 foreclosure obligations under state law. While there was no writing expressly transferring the patent, the Federal Circuit held that an assignment is not the only method of transferring a patent. Rather, ownership of a patent may be transferred by operation of law; in this case, by forclosure under state procedures following a default of a security interest. The Federal Circuit went on to explain that ownership of a patent is not limited to the three classes of entites described in Sect. 154(a)(1) (patentee, heir, or assignee).
The Federal Circuit’s ruling last week is consistent with the understanding that the Patent Act does not preempt, and is not inconsistent with, UCC Article 9 methods for acquiring title through state foreclosure rules. The Federal Circuit held that the Patent Act is not in conflict with local law relating to collateralization and foreclosure of personal property. Lack of a writing does not void a transfer by foreclosure, including a transfer to someone other than the patentee, heir or assign.
The Federal Circuit explained its policy reasoning:
The policy justifications for permitting transfers of patent ownership through operation of law without a writing also support our holding. First, if foreclosure on security interests secured by patent collateral could not transfer ownership to the secured creditor, a large number of patent titles presently subject to security interests may be invalidated. Any secured creditor who maintained an interest in patent collateral would be in danger of losing its rights in such collateral. Second, by restricting transfer of patent ownership only to assignments, the value of patents could significantly diminish because patent owners would be limited in their ability to use patents as collateral or pledged security. Lastly, it would be impractical to require secured parties to seek out written assignments following foreclosure from businesses that may have ceased to exist.Sky Technologies, at 12.
The goal of the UCC Article 9 is to work in tandem with federal law so as not to create a conflict. UCC 9-104(a) provides that Article 9 does not apply “to a security interest subject to any statute of the United States, to the extent that such statute governs the rights of parties to and third parties affected by transactions in particular types of property.”
The result of the Federal Circuit’s Sky Technologies decision permits a consistent and functional treatment of a patent as possessing all “attributes of personal property,” including the right of collateralization and involuntarily transfer by foreclosure.
Friday, August 28, 2009
"I Have A Dream"
In Estate of Martin Luther King, Jr., Inc. v. CBS, Inc., the estate sued CBS for broadcasting a copy of the speech without consent. CBS countered by asserting that any copyright existing in the speech was lost to the public domain by virtue of a general publication of the speech without compliance with the statutory notice requirement of the 1909 Copyright Law.
In light of today's "I Have A Dream" anniversary, it is appropriate to comment briefly on the issue of copyright divestment and general versus limited publication.
The Eleventh Circuit in the CBS case analyzed the issue of divestment of title under the 1909 law. Generally, if a work was published without compliance with statutory formalities, including employment of the statutory copyright notice, then the copyright can be lost to the public domain. The divestment of title therefore turns on whether there is a publication, and whether the publication is general or limited. If a general publication of the speech occurred without compliance with notice requirements, then the copyright would be lost to the public domain. But a mere limited publication would not create the same result.
The court explained that a general publication occurs when a work is provided to the public without control and without regard to the identity of the recipient or the intended use of the work by the recipient. Publishing a work in this manner without employing the statutory copyright notice causes a loss of the copyright to the public domain. A limited publication, on the other hand, involves a publication to a select group of the public for a limited or controlled purpose whereby the recipient is not given the right to copy or distribute the work. This type of limited publication without the copyright notice does not divest an author from the copyright.
Was there a publication of the speech? CBS could not claim that Dr. King's public presentation of his speech on the National Mall constituted a publication because, as a general principle of copyright law, a public performance does not constitute publication. But CBS claimed that when advance printed copies of Dr. King's speech was given to the media, a general publication occurred. These printed copies lacked a copyright notice and, argued CBS, the general publication divested copyright ownership from Dr. King. The Court pointed out, however, that allowing news media access to a newsworthy event, by providing advance printed copies of a newsworthy speech that they would subsequently be witness to and report on, does not constitute a general publication of the speech but only a limited publication. The Court observed, with respect to the media's access to newsworthy material, that "the authority was granted to a limited group for a limited purpose [to report the news] * * * the restrictions on copying and reproduction were implied." Id., at 16. Accordingly, providing printed copies of the speech to the news media was at most a limited publication. The failure to apply a statutory copyright notice did not divest title from Dr. King.
It is reported that the "I Have A Dream" speech represents one of the finest examples of public oratory in U.S. history. Not only does Dr. King's dream live on, but so does the copyright in the speech. Dr. King died in 1968, and the copyright in his speech will last for 70 years from his death, through 2038.
Wednesday, August 26, 2009
So You Think You Have An Intent To Use, Do You?
In the Honda case, Friedrich Wilkelmann filed an application for the mark V.I.C. for “vehicles for transportation” in Class 12, including “motor propelled and self-propelled vehicles for use on land and on water and motor propelled and glider aircraft; parts used in vehicles for transportation on land, air or water, namely, motor propelled and self-propelled vehicles for use on land and on water and motor propelled and glider aircraft.” Filing was made under Section 44(e) based on the applicant’s German registration. In the application, the applicant made a declaration claiming a bona fide intent to use the mark in commerce in the U.S. on all of the listed goods.
Honda filed an opposition, claiming likelihood of confusion with Honda’s CIVIC mark for automobiles and further claiming that the applicant lacked a bona fide intent to use the mark in commerce on all the listed goods.
The TTAB pointed out that an applicant who applies for a mark based on Sect. 44(e), claiming priority based on foreign registration, must verify that it has a bona fide intent to use the mark in U.S. commerce on all listed goods. The TTAB considers the same sort of objective, good faith intent as applied to a Sect. 1(b) application based on intent to use. But here, the applicant acknowledged during discovery that it had not developed any “business plan, strategy, arrangements or methods” to use the mark on the indicated goods in the U.S., and had not identified channels of trade to be used in the U.S. Indeed, the applicant provided no evidence to establish its objective bona fide intent to use the mark on the indicated goods in the U.S.
The TTAB set forth the clear rule relating to the level of “intent” for an application under 1(b) or 44(e): “To raise a genuine issue of material fact, applicant must rely on specific facts that establish the existence of an ability and willingness to use the mark in the United States to identify its claimed ‘vehicles for transportation’ at the time of the filing of the application.” [Emphasis added.] To satisfy this requirement, the applicant must have more than an interest in wanting to use the mark on goods at some undefined time in the future and in some undefined manner. There must be an objectively verifiable intent to use the mark on all listed goods at the time of the filing of the application.
This requirement for an intent to use under 1(b) or 44(e) requires a cautious and thoughtful approach by both U.S. and foreign applicants. Indeed, the level of care must be heightened for foreign applicants who may be more accustomed to applying for trademark registration in foreign countries under very broadly worded class descriptions, covering everything possible within the class. The U.S. system does not permit a broad class description but the applicant is required to specifically define the types of goods “namely” within the class. As such, the broad foreign application may become a hindrance to the 44(e) foreign applicant, who must proceed with care to comply with the objective intent to use requirements of U.S. law.
Failure to do so may cause a result similar as that in the Honda case -- the opposition was allowed and the registration was refused.
Philo Taylor Farnsworth’s Electric TV
In 1921, while still a high school teen mowing rows of hay on his family farm in Idaho, Farnworth conceived of an electron beam scanning rows of an image line after line, in a manner similar to mowing a field of hay.
Farnsworth applied for his patents in 1927, and two were issued on this date in 1930. Significant patent litigation ensued between Farnsworth and RCA, headed by Gen. Sarnoff, over the method of television. By 1939, Farnsworth’s patents were substantially upheld and RCA was required to pay royalties to Farnsworth Radio & Television Co. for operation of RCA’s new commercial television business.
In 1957, Farnsworth explained his invention on nationwide TV, stating: "There had been attempts to devise a television system using mechanical disks and rotating mirrors and vibrating mirrors--all mechanical. My contribution was to take out the moving parts and make the thing entirely electronic, and that was the concept that I had when I was just a freshman in high school [in 1922, at age 14]. * * * There are literally thousands of inventions important to television. I hold something in excess of 165 American patents."
Farnsworth's electronic TV inventions have, for the most part, been replaced with new digital technology, including the recent development of the computer chip and its use in generating digital images. But Farnsworth's invention allowed several generations to watch I Love Lucy, the moon landing, the funeral of JFK, the Watergate Hearings, and more.
Further, today marks the anniversary of the first live broadcast of a professional baseball game in 1939, some twelve years after Farnsworth’s first TV patents. The game between the Cincinnati Reds at the Brooklyn Dodgers was broadcast from Ebbets Field on experimental TV station W2XBS, New York (subsequently WNBC), with Red Barber announcing. The Reds won 5-2. This was not the first baseball game ever broadcast on TV. That distinction goes to Princeton at Columbia, played a few months earlier at Columbia’s Baker Field on May 17, 1939. Princeton won 2-1.
Tuesday, August 25, 2009
Who Defines a Trademark Design?
In the applicant's specimen, the bottles were depicted differently, according to the examiner and the TTAB, depicted below, left. The specimen sought to display the actual use of the trademark on the goods in commerce. In doing so, the TTAB held that the mark changed from the two-dimensional design in the drawing to a three-dimensional depiction on the goods packaging, with the in-use design modified by the accompanying labels and words.
The design in the drawing consisted of two stylized pill bottles, with one bottle slightly overlapping the other, and with no labels or words. The stylized design appearing on the specimen, however, added additional features to the pill bottle design, including labels and, on one bottle, the words NATURE MADE and RX ESSENTIALS and, on the other bottle, the wording RX.
The examiner refused registration because the mark in the drawing was not a substantially exact representation of the mark depicted in use on the specimen. The Applicant asserted that the mark of two bottles shown on the specimen "contains the essential and integral subject matter of the mark as shown in the drawing." Id., at 4. However, the examiner maintained, and the TTAB agreed, that the mark used on the specimen is a different mark due to the presence of the label and word elements.
The TTAB explained that the commercial impression made by the design on the specimen is that the entire stylized design consisting of both the stylized bottles plus the labels and wording constitutes the mark. The TTAB rejected the contention that the background design of the two bottles, partially hidden by the accompanying labels, are separately recognized as the trademark apart from the label and words.
The issue of adding additional elements to a stylized mark is important for purposes of communicating the correct source identifier to the consuming public. If a simply designed mark is enhanced with additional components for display to the public, there is a serious question as to which portion of the mark and added components will be recognized by the public as the true mark -- is it the simple design initially envisioned by the applicant or the simple design buttressed by added elements? If the simple mark becomes confused by the public, and if the commercial impression on the public includes the additional elements beyond the simple design, then an important issue for the PTO and TTAB relates to the identification of the true trademark.
There are many examples of stylized designs in conflict with in-use design enhancements that have been refused registration. In re Boyd Coffee Co. is cited in the opinion, and there are many others, as well. In the Boyd Coffee case, the applicant's drawing of a stylized coffee cup and saucer was enhanced with similarly colored star bursts emanating from the coffee cup. The TTAB held that the drawing and specimen were in conflict, and that the mark presented in the drawing was thereby incomplete and unregistrable.
Sect. 807.12(d) of TMEP refers to this problem as a mutilated or incomplete mark. That is, if the mark depicted in the specimen is the full mark, then the mark in the drawing is mutilated or incomplete if it contains fewer connected elements. The mark in the drawing is somehow incomplete, lacking all of the elements depicted in the specimen, and cannot be registered. As explained in Sect. 807.12(d), the central inquiry relates to whether the drawing mark makes a separate and distinct commercial impression apart from the added elements depicted in the specimen. If there does not exist a separate and distinct commercial impression with consumers, then the drawing (absent the specimen's enhancements) does not accurately depict the full mark, and registration is not permitted.
The solution here is to be careful in adding enhancements to a stylized mark. If you are going to do so, be careful that the enhancements are depicted in such a way that it is clear to consumers that the enhancements are separate and distinct from the mark and not a part of the mark. Change the size, color, drawing or other attributes of the enhancements so as to set them off from the stylized design, thereby creating -- hopefully -- sufficient separation and distinction so as to maintain the integrity and recognition of the initial mark as the one, true mark.
The TMEP: Not Fully Linked, And Not Lovin' It
The problem -- for me -- relates to the TMEP's limited linkage to cited authority. The TMEP cites to itself (that is, to sections within the TMEP), and these internal cites come with a hot link for ease of travel through the document. There are also hot links to general references within the PTO and WIPO websites. But there are no links to citations to the Lanham Act, to sections within the Code of Federal Regulations, nor to cited TTAB opinions. Why? Why is it not possible for the TMEP to include hot links to the Lanham Act? To the CFR? To cited cases, including TTAB opinions that appear on the PTO's website? These links are readily available and easily accomplished.
If I access the TMEP via the PTO's website while on my laptop, I am forced to leave the TMEP page and hunt for referenced sections of the Lanham Act and the CFR in separate databases, web pages or discs. The TMEP's citation to TTAB opinions is particularly troubling. Not only are there no hot links to these TTAB opinions, that are stored in the PTO's computer system, but the citations provided are usually to USPQ (and a few times also to a federal circuit and U.S. Supreme Court citation).
The lack of links to TTAB opinions referenced solely by USPQ citations forces me to either pay a fee to Lexis or Westlaw, or undertake a cumbersome search for the opinion through the TTAB search screen. The search on the TTAB search screen is difficult due to the lack of any other search information, such as serial number, registration number, TTAB number or trademark, except for party name. If I'm lucky, only one TTAB case is produced under the searched name using the TTAB search screen. If I'm not lucky, multiple cases are produced and I have to work my way through the search results to find the cited TTAB opinion. Sometimes, this is not easy.
Isn't it about time that the TMEP becomes fully functional by providing hot links to the Lanham Act, CFR and TTAB opinions, all of which are readily available for free to the PTO? This would not be that difficult to do, and the benefit to users of the TMEP would be significant.
Sunday, August 23, 2009
Out on the Twentieth
Rose's ouster, of course, is not the first such incident of gambling on baseball by a player, followed by a lifetime ban. Due to the Black Sox scandal of 1919, in which members of the Chicago White Sox tanked a World Series game for a payoff from gambler Arnold Rothstein, MLB Commissioner Keneshaw Mountain Landis announced lifetime bans from baseball for eight members of the White Sox team, including "Say it ain't so, Joe" Shoeless Joe Jackson.
Jackson and many of the other banned White Sox players were extremely popular with the public, and many maintained their innocence of the gambling offense. But Landis refused to modify the lifetime ban and all eight players passed away without reinstatement.
Rose should be no different.
Admire Rose's amazing accomplishments as a player in uniform, and give him his due as an athlete. But do not condone his gambling on his own team. Baseball does not need any more Arnold Rothsteins and Chicago Black Sox.
Friday, August 21, 2009
Happy Birthday, Christopher Robin
The copyright transfer aspects relating to the Winnie-the-Pooh work are interesting. In 1930, Milne gave an exclusive license to Stephen Slesinger to license merchandise in the U.S. to the Winnie-the-Pooh property. The term of this license extended to the term of the copyright and the renewal term. The copyrights in the Pooh stories were timely renewed, and in 1961 Slesinger exclusively transferred to Walt Disney Productions the rights that Slesinger had under the original 1930 grant. Disney further obtained motion picture rights from Alan's widow.
On January 1, 1978, the 1976 Copyright Act took effect and the renewal term of the Pooh work was extended from 56 years to 75 years. Following Dorothy's death, and in 1983, Christopher Robin, Slesinger and Disney entered into a new agreement revoking the 1930 and 1961 grants, granting new rights to Slesinger and providing enhanced royalties to Christopher Robin. Slesinger was granted new Pooh rights relating to radio, TV, film and merchandise. Slesinger, in turn, transferred these rights to Disney. Christopher Robin further agreed not to exercise the new law's statutory right of termination as to the 1930 and 1961 grants.
In 1998, the Sonny Bono Copyright Term Extension Act took effect, adding new Sect. 304(d) to the Copyright Act, and granting new termination rights to authors and authors' heirs as to the last 20 years of the extended renewal term. In 2002, Christopher Robin's only child, Clare Milne, sought to terminate (with some aid and comfort from Disney) the 1930 Slesinger grant pursuant to the new termination rights of Sect. 304(d). In seeking to do so, she sought to unravel the foundation for the 1983 agreement granting enhanced rights to Slesinger. Following considerable litigation, the Ninth Circuit held that Clare could not terminate the 1930 grant because it no longer existed by virtue of the agreed-upon revocation in 1983. Further, Clare could not seek to terminate the 1983 grant to Slesinger since Sect. 304 only permits termination of post-1978 grants made by an author -- in this case, A.A. Milne. Since the 1983 grant was not made by the author, but by the author's son, it was not subject to termination.
The Ninth Circuit case is Milne ex rel. Coyne v. Stephen Slesinger, Inc., 430 F.3d 1036 (9th Cir. 2005). A very similar set of facts, and outcome, but dealing with an attempt by John Steinbeck's heirs to terminate the transfer of rights to his literary heritage, is Penguin Group (USA) Inc. v. Steinbeck (2d Cir. 2008).
Finally of note, the mathematical exercise to calculate the termination of copyright in the Pooh stories suggests that the copyright in Winnie-the-Pooh, published in 1926, will terminate in 2021, or in about 12 years hence, under current law. Oh, bother.
Wednesday, August 19, 2009
"All Natural" Labeling Laws
Snapple argued that state law is preempted by federal law, including the federal Nutrition Labeling and Education Act (NLEA) and Federal Food, Drug, and Cosmetic Act (FDCA). But the Third Circuit held that there is no preemption by federal law. State law relating to false labeling of food and beverages can concurrently exist alongside the federal regimen.
First, the Third Circuit points out the presumption against preemption. This is particularly true for laws dealing with health and safety, in that states have traditionally been the source of regulation of health and safety issues. Specifically, the court recites that food labeling is an area historically governed by state law.
Second, the court holds that Snapple waived any claim for express preemption at the trial court level. Nonetheless, the Third Circuit suggests that express preemption does not exist under the NLEA since the NLEA regulates what a label must disclose rather than what is voluntarily, and inaccurately, disclosed.
Third, the court points out that Congress did not intend to preempt the field regarding food labeling, as there is no expression of clear Congressional intent to do so. The NLEA provides that it does not preempt state food labeling laws. Further, there was no express preemption language included by Congress in food labeling laws prior to the NLEA. Importantly, the FDA has stated that it does not seek to be the sole labeling regulator for food and beverages.
To be sure, the FDA issued a policy statement defining "natural" as excluding anything synthetic or artificial. But this policy statement does not constitute an FDA rule. Because of limited resources, the FDA did not engage in rulemaking to establish a rule-based definition of "natural." In light of the FDA's position, the Third Circuit declined to view the FDA as intending to be the sole regulator of food and beverage labels.
The court held that state regulation of food and beverage labeling does not conflict with federal labeling laws. State food and beverage labeling law is not preempted by federal labeling law.
Not only must a food and beverage manufacturer comply with numerous federal labeling laws, including the NLEA, FDCA, and the Alcohol and Tobacco Tax and Trade Bureau beer and wine labeling regulations, but also the separate labeling laws of each state, as determined by the Third Circuit. Food and beverage manufacturers must be vigilant in understanding the particular labeling requirements of each state where product is distributed.
Tuesday, August 18, 2009
No Legal Fees For You (in a Patent Case)
The Federal Circuit’s decision last week in a patent appeal points out the difficulty that a prevailing defendant has in obtaining reimbursement for its attorneys’ fees. The tale is often told. Plaintiff sues defendant for patent infringement. The defendant must defend itself, often at considerable expense. At the claim construction hearing, the court rules that the plaintiff’s patent claims are too narrow or limited and do not apply to the conduct engaged in by the defendant. Of course, the defendant was certain all along that the plaintiff's case lacked merit. And the defendant is delighted to win, but wants reimbursement for its significant legal expenses. The plaintiff, seeking to avoid liability for defendant’s legal fees, moves to dismiss all of its claims with prejudice. The court grants the motion to dismiss and the defendant receives no fees.
In last week’s decision, the Federal Circuit discussed the limited availability of attorney fee reimbursement to a prevailing defendant in a patent infringement case. The court explained that the circumstances permitting an award of fees is extremely narrow. Reimbursement for legal fees in a patent case is available only when:
- There has been inequitable conduct practiced by a party before the PTO
- There has been litigation misconduct practiced by a party or counsel in the infringement case
- There has been a finding in the infringement case that one party or its counsel has engaged in vexatious, unjustified or bad faith litigation
- The plaintiff’s lawsuit is found to have been frivolous
- The defendant’s infringement is found to have been willful
Merely winning a patent case is not enough to justify a fee award. There must be something more in the litigation besides the bringing of a lawsuit by a plaintiff and the victory by the defendant. The something more must involve one of the limited bad acts described above. Note that these bad acts go to the heart of the integrity of the judicial proceeding. As such, an award of legal fees in a patent case can be viewed not as a reward for victory but as a punishment for inequitable conduct.
Unfortunately, in patent litigation, the prevailing defendant may end up with the thrill of victory, but with the agony of a large legal bill.
Happy 19th Birthday
Monday, August 17, 2009
More Opposition to the Google Book Settlement
- The proposed payout to writers, potentially up to $300 per book and potentially up to $15 per article, is too low compared to the infringing value of the works copied by Google without permission.
- Writers will have to continue monitoring Google's copying and instruct Google to remove the writer from Google's copying program. In NWU's view, this approach puts the cart before the horse and forces writers to opt-out rather than requiring Google to opt-in by obtaining permission from writers in the first instance.
- The proposed settlement may interfere with writers' relationships with their publishers. The settlement establishes a potentially costly and cumbersome binding arbitration procedure between writers and publishers.
For a more complete review of the NWU's position regarding the Google Book Settlement, contact the National Writers Union or go to http://www.nwu.org/nwu/.
More information about the Google Book Settlement is available on this blog by searching the index of blog entries. Note that September 4, 2009 is the final date for writers and publishers to opt out of the class action, to object to the settlement, to intervene or to file an amicus brief.
Friday, August 14, 2009
Oregon, My Oregon
Thursday, August 13, 2009
Lester William Polsfuss
An Infringing Building Offers No Indemnity
In attempting to defend itself, the builder brought indemnification claims against the seller of the counterfeit plans. He argued that the seller committed fraud and misrepresentation in selling plans that the seller knew were wrongfully copied. The court dismissed the indemnification claims because there is no right of indemnity for copyright infringement.
The court pointed out that there is no indemnity right included in the Copyright Act, and that the Copyright Act preempts conflicting state law. As such, state indemnity law does not apply. In any event, it is federal common law, not state common law, that applies in a copyright proceeding. Federal common law is very limited and does not include the right of indemnity for violation of federal law.
Outside of the building context, this case raises anew the obvious problem faced by the buyer of goods that turn out to be counterfeit. How can the innocent buyer of counterfeit goods protect itself from liability when the seller fails to disclose that the sold goods were wrongfully copied?
Without the right to bring an indemnity claim, the buyer's options are limited. If the transaction is regulated under Article II of the Uniform Commercial Code, then the buyer may be able to bring a breach of title warranty claim against the seller. Or, the buyer may have a claim under a state's unfair trade practices law or similar consumer protection laws. One potential problem with the consumer protection laws is that they do not necessarily apply in the context of a commercial transaction involving business parties. Another approach is to include covenants of good title and non-infringement on the part of the seller in the contract of sale.
Be careful out there. The copyright law is not just for poets anymore. It applies in many commercial contexts involving useful articles.
Tuesday, August 11, 2009
California, Here I Come
The important jurisdictional issue developed in this case relates to whether the tiny Recordon & Recordon firm should be required to litigate in the Bay Area. The firm argued that it does not practice in the Bay Area, but only in San Diego, and its website is completely passive. These two elements are important under established case authority relating to jurisdiction based on tortious conduct committed via the Internet. The general rule has existed for some time that passive websites do not target customers where ever the web pages are viewable on the Internet. This is so because passive sites do not represent purposefully directed activity authorizing the exercise of jurisdiction in foreign districts over non-residents.
The Ninth Circuit considered the circumstances of the defendant's web copying and determined that the act of copying was intentional. It further held that the copying of the Brayton Purcell web pages by a law firm competing in the California market for the same clients constitutes the targeting of harm at a resident of the forum -- Brayton Purcell -- where the action is pending. Whether or not Recordon & Recordon actually received any clients in the Bay Area as a result of the web copying is beside the point. Importantly, the firm aimed its conduct at a known resident of the Bay Area. The Ninth Circuit held that this circumstance is sufficient to justify jurisdiction over the non-resident defendant notwithstanding the otherwise passive nature of the defendant's website.
The Ninth Circuit distinguished its earlier holding in Schwarzenegger v. Fred Martin Motor Co., in which California jurisdiction was denied as to an Ohio business that used Arnold Schwarzenegger's image in local advertising appearing in Ohio. The Court reasoned that the Ohio print ads never appeared in California and, hence, there was no reason to believe that the ads were viewable by California residents. By contrast, Recordon & Recordon's wrongfully copied web pages were viewable by Brayton Purcell's potential clients in northern California.
What we assumed was settled law relating to jurisdiction over a passive website has changed, at least in the Ninth Circuit. Copying content from a website maintained by a Ninth Circuit business, and using the copied content on a website viewable in the plaintiff's market area so as to compete for customers, may very well permit a Ninth Circuit trial court to recognize jurisdiction over the non-resident firm in the Ninth Circuit-based forum.
If you copy a website without permission owned by a business in the Ninth Circuit, you may end up learning the words to "California, Here I Come."
Monday, August 10, 2009
Rose is the all-time baseball hits leader with 4,256. Ty Cobb is second at 4,189. Hank Aaron is third at 3,771. The closest active player is Ken Griffey, Jr. in 58th place at 2,679 hits (through 2008 season).
In the past 28 years, no one has come close to reaching Rose’s mark. Indeed, Griffey is some 1,500 hits distant. Rose’s accomplishment is even more amazing when you consider that so many batted balls are not recorded as true hits, such as hitting into a fielder’s choice, or fielding errors on the hit.
The problem here is not lack of admiration for accomplishment but rather the presence of personal vile. Rose has been banished from baseball for years due to his gambling on baseball, including gambling on his own team’s games. Such conduct is reprehensible. But Rose’s on-field hits record remains amazing.
I saw Rose a couple years ago in the crowded Caesar’s Palace mall in Las Vegas. He was sitting in front of a sports memorabilia store at a folding table trying to sell his autographs to the shoppers and gamblers. While I was watching – for about ten minutes – no one stopped for his autograph or even to speak to him. I did not. He was a curiosity – like the shrunken head in the circus sideshow. He was out of place. He looked old and tired. He looked sad. Or, perhaps, I was sad for him.
None of the present-day players who take banned substances or chew snuff or scratch their backsides or spit seeds or play in specialized situations have been able to come close to Rose’s achievement. Many of these current players, though, have something that Rose does not have – multiple zillion dollar contracts, the ability to continue wearing the uniform, and the enduring adulation of the fans. None of these current players were present in Caesar’s mall that day a few years ago trying to sell their autographs. Only Rose.
Hitting a moving baseball coming at you at 100 miles per hour is said to be the hardest endeavor in sport. Hand-eye-bat coordination is essential. So is out-guessing the sinking path of the ball, and hitting it where they ain’t.
Despise Rose if you must for his rule-breaking gambling, but admire him for what he alone accomplished in baseball. Then give him his due.
New PTO Director Has A Heck Of A Job
Kappos will need all of his experience to overcome the current mess at the PTO. There are presently about 770,000 pending patent applications on backlog. This backlog is growing significantly. In 2008, 485,312 new patent applications were filed but only 185,224 patents were issued. Anyone who has attempted to bail water out of a sinking boat knows that bailing only one-third of the incoming water is not sufficient to solve the water intrusion problem.
When the PTO is not able to fulfill its mission by timely examining patent applications and timely issuing deserving patents, then the development of U.S. technology is directly harmed. This is so because until a patent issues, there is no patent and no patent protection. Since an inventor has no assurance when or if a patent will issue on a new invention, and since there is no assurance as to how the patent claims will ultimately read, or which claims will be included, it is awful risky for an inventor to seek to commercialize an invention during the overly long patent examination process.
A deserving patent is entitled to be issued timely so that its invention can be commercialized. Only when an inventor is rewarded by an issued patent can the goal of the U.S. Constitution -- to advance art and science -- be fulfilled. Here's hoping that Kappos' water bailing skills are up to the task.
Sunday, August 9, 2009
A Sunday in August
"Tinker to Evers to Chance."
Trio of bear cubs, and fleeter than birds,
Tinker and Evers and Chance.
Ruthlessly pricking our gonfalon bubble,
Making a Giant hit into a double--
Words that are heavy with nothing but trouble:
"Tinker to Evers to Chance."
Franklin Pierce Adams (1910).
Saturday, August 8, 2009
Justice Sotomayor and IP
Justice Sotomayor's modest connection to IP will not pay benefits this term as the Supreme Court grapples with significant IP cases. At bat on October 7th, the Court hears argument regarding the interesting copyright issue in Reed Elsevier, Inc. v. Muchnick relating to limits on subject matter jurisdiction in a copyright case under Sect. 411(a). On deck is everyone's favorite power slugger In re Bilski, a case that promises to define the scope of patent protection for process inventions.
Here's hoping that the 111th justice is a quick learner. More importantly, here's hoping that Justice Sotomayor develops some IP nuance. Remember that the purpose of IP is to advance art and science (Art. I, sect. 8, cl. 8 of the U.S. Constitution). IP monopoly power should not focus on protecting big time publishers such as the N.Y. Times over creative authors.
Friday, August 7, 2009
And if you believe that one, I've got a radio station for sale!
Today is different. The pre-set buttons remain. But added to this mix are portable CD players, iPods, iPhones, PDAs, satellite receivers, cable music and Internet radio stations. While each of these new media comes with a cost to the listener, they are usually (but not always) devoid of advertising.
There are so many different ways to listen to music today that it's a wonder how radio stations can compete and make any money by playing music. Some stations have given up on music and converted to talk: about sports, about politics, about news, or just talk. There is a lot less music on the radio waves today.
Now Congress is seeking to impose an additional burden on what is left of the radio music business. Congress wants to modify the Copyright Act to impose a performance royalty obligation on radio stations for playing music. Presently, radio stations must pay a royalty to the composer of music when a composer's song is given air time. But radio stations have never in the history of this country been required to pay a second royalty to the performers who sing and play the composition.
This may change in the coming few months as Congress appears determined to "level the playing field." Congress wants music radio to pay a second royalty to the performers of the song in addition to the underlying royalty to the composer of the song. This all seems fair on the surface. After all, why should music radio be able to play a song for free without paying a performance royalty?
Historically, radio stations provided an incredible service to music performers. When a new band cut a record, the local station would provide free air time and publicity for the record. This, hopefully, induced record sales. The system worked well. The band and the record label did not pay to play (at least that was the rule, although payola scandals have erupted from time to time), and the radio station received music free from a performance royalty.
This system no longer works very well. Now, the new band's recording can just as easily gain listenership via the Internet or Twitter or local concerts or self-pressed CDs sold at a concert venue or at college coffee shops. Further, the new media -- that easily accommodates mostly ad-free music listening -- has increased competition for music radio and diluted the available audience. Music radio now must worry about the listener who pushes a pre-set plus worry over a listener who switches to satelite radio or the iPod. It is no longer a zero sum game for music radio.
Ad rates for radio are down. Listenership is diluted. Radio station values are depressed. Added to all of this, Congress wants to add a new cost factor with a music performance royalty.
Morally, it is hard to argue against the concept of a performance royalty. It is only fair that radio pays for what it plays. But the economics of music radio today are much different than a few years ago. Today, music radio is fighting for its economic life. Perhaps this is one of those problems that Congress should acknowledge doesn't need fixing. By modifying the copyright law to allow music performance royalties, Congress may be adding the final straw to the music radio industry. Congress should Get Back, give music radio some R E S P E C T, and just Let It Be.
"And she'll have had fun, fun, fun, 'Till her daddy takes the [radio] away." (Regrets to Wilson/Love, 1964).
Anyone want to buy a radio station?
Thursday, August 6, 2009
The Great Denton Young
Beginning in 1956, baseball awarded the re-named Cy Young Award to the best pitcher in each league.
Wednesday, August 5, 2009
When Two Or More Gather ... [Be Careful When You Ask For Help]
These words by Paul Stookey from "The Wedding Song (There Is Love)" can provide some guidance, with a bit of modification, when more than one person assists in the development of music. In a case published earlier this week by the Seventh Circuit, a person who assisted a principal composer's development of a song, entitled "Wonders of Indiana," was awarded co-authorship (and co-ownership) rights. As such, it can be said that whenever two or more are gathered to develop a song, there is -- usually -- co-authorship (and co-ownership) rather than love. This is the case even if a "contributor" provides unequal or marginal contribution to the development.
A co-authorship exists when the parties intend to create a joint work (this element can be satisfied if the parties intend that the resulting work incorporate the jointly developed elements), and if the marginal contributor's contribution added more than mere general ideas but includes concrete, creative expression.
A primary author should be careful when seeking substantive developmental assistance from another person, for the resulting work may be jointly owned. To avoid this result, the primary author should require that the marginal contributor sign an agreement disclaiming authorship and ownership interest, and acknowledge that the primary author is the sole author and owner.
This case involves a dispute between two branches of the renown Gabbanelli accordian family. One branch makes accordians under the Gabbanelli mark in Castelfidardo, Italy. The other branch operates under the mark Gabbanelli Accordians in Houston. The Houston branch sued the Italians for various things, including infringement of its U.S. registered trademark. The trial court awarded damages to the Houston Gabbanelli's of both lost profits on the sale of accordians plus statutory damages.
On appeal, Judge Posner acknowledged that while it is possible to recover both compensatory damages and statutory damages in the same case under the Lanham Act when separate infringement claims are combined into one proceeding, here the plaintiff must make an election when the compensatory damages and the statutory damages both pertain to the same accordians.
Of note, the 19th annual Cotati Accordian Festival takes place on August 22-23, 2009 at La Plaza Park in Cotati, California (in the wine country north of San Francisco, and south of Santa Rosa). The festival includes many accordian events, including a polka tent and the annual "Lady of Spain" ring.
Tuesday, August 4, 2009
Lawyers, Lawyers Everywhere
The Canadian lawyer filed a computer software patent application with the PTO for a Canadian client. The client took the position that the Canadian lawyer failed to include relevant software code in the patent application and, as such, the resulting U.S. issued patent failed to include a relevant portion of the software code. The Canadian lawyer never entered into Virginia (the PTO is located in Alexandria, Virginia) in prosecuting the patent, but the client sued the lawyer in federal court in Virginia nonetheless. The Federal Circuit held that any state has personal jurisdiction over a non-resident defendant who does not come into the U.S., when the claim arises under federal law, the defendant is not subject to jurisdiction in any state, and the exercise of jurisdiction comports with due process. Canadian lawyers have had the benefit of practicing before the PTO without having to become qualified as a U.S. licensed attorney. Now, they also have the burden.
The second case deals with how to establish a patent lawyer's liablity for malpractice in prosecuting a patent application. The federal court in Kentucky held last week that it is necessary for a plaintiff in a patent malpractice case to establish the patent lawyer's negligence through expert testimony of unreasonable conduct. However, any expert will not do. Here, the plaintiff argued that the patent lawyer was negligent in including certain descriptive language in the patent claims. The patent lawyer argued that the cited language was reasonable and necessary to the patent claims. The plaintiff offered expert testimony from another attorney to establish patent prosecution legal negligence. The expert attorney possessed 40 years experience as a patent attorney. The court refused to accept this expert testimony, however, stating that the expert's "extensive experience with the patent application process alone does not necessarily qualify him as an expert." Huh? Experience in the patent application process is not enough to qualify a witness as an expert to prove patent prosecution malpractice. The court requires specialized experience, training, skill or education in legal malpractice as it relates to the patent application process. Such a requirement may not be easily achieved in many instances.
And so it comes to be. While it is one thing to sue a patent attorney for malpractice, even a Canadian lawyer who does not set foot into the U.S. for purposes of the patent prosecution, it is harder than heck to win.
Monday, August 3, 2009
Joel Tenenbaum's $675,000 Problem
Now the worst part. The jury today awarded the record companies a verdict of $675,000 damages against Tenenbaum. This averages $22,500 per song. The record companies may still be able to opt for statutory damages up to $150,000 per song, plus they are entitled to recover their court costs and attorneys' fees. And don't forget accruing interest. By the time the court adds up all the numbers, the judgment could be closer to $1 million.
Tenenbaum says that he wants to appeal in order to test the constitutionality of the Copyright Act. Two things. First, Tenenbaum needs to post a bond in the amount of the judgment or the record companies can garnish, garnish, garnish notwithstanding any appeal. Tenenbaum says that he may file for bankruptcy protection. But the bankruptcy laws will not necessarily shelter a debtor from intentional conduct.
Second, Tenenbaum may argue on appeal that the damages component of the Copyright Act is somehow not up to constitutional standards. But Congress has exclusive authority under Art. I, Sect. 8, cl. 8 of the Constitution to enact copyright laws, and damages have been authorized under every form of copyright statute going back to day one, the Copyright Act of 1790. During the past 219 years, the Supreme Court has never hinted that a damage claim under the Copyright Act is somehow suspect or unfair.
All this trouble. Yet Tenenbaum could have downloaded these songs legally for 99 cents each. Go figure.
Sunday, August 2, 2009
Copyright protects the design of 3D articles if the design is aesthetic and not functional. It is becoming common to see highly stylized goods, including coffee makers, kitchen accessories, buildings, television sets, computers, fire extinguishers and many other high-design articles. The test for copyright protection relates to the separation of the design from the useful component of the article. If it is possible to conceive of a separation or distinction between the aesthetic design and the utilitarian useful component of the article, then the design is copyright protectable. Consider the functional belt buckle. The buckle is certainly utilitarian when it latches and holds up the trousers. The stylized design on the front of the buckle, however, expresses no useful purpose and serves as a design element only. The design on the front of the buckle is copyright protectable while the working part of the buckle is not.
Trademark protects the design of a useful article provided the design serves as a trademark source-identifier. In doing so, the design accomplishes the goal of the trademark -- to communicate source, origination, association and characteristics of the article to the consumer. All sorts of 3D designs fullfill this mission as a trademark communicator. One well known 3D symbol is the Coca Cola bottle. The bottle is certainly functional, but a functional bottle need not express the same shape as a Coke bottle. Other shapes can hold liquids just as well. But the shape of the Cole bottle does more - it communicates a brand message to consumers regarding the source and contents. Hence, the 3D design becomes the trademark.
Patent design protection is perhaps the most well known form of design protection in the U.S. A patent design of a 3D article protects the new, novel and nonobvious aspects of the design that are non-functional.
The differences between the protection of design afforded by each of the IP laws derives from the purpose of each law. Neither trademark law nor copyright law require the newness, novelty or nonobviousness of design as is required by patent law. A valid copyright requires only a minimal degree of nonfunctional creativity, whether or not the resulting design is novel or non-obvious. For a valid trademark, the aesthetic design must serve a trademark's traditional source-identifier function. Plus, the trademark design of the article must be recognized by consumers as a trademark as opposed to a product design. This requirement of "secondary meaning" in order to obtain a trademark for a product design usually means that the design must be in use for at least five years in order to obtain trademark design protection.
Another important distinction between the three IP laws concerns the term of protection. Copyright protection commences upon creation (whether or not a form is filed with the U.S. Copyright Office) and lasts for the life of the author plus 70 years. A trademark commences upon use (whether or not a form is filed with the PTO) and can potentially last forever, so long as the design is used as a source identifying trademark. A patent design commences only upon issuance of an issued patent (formal application to the PTO is required) and lasts for fourteen years following the grant issued by the PTO.