There Is No i In Apple

For some reason, Apple is in love with the letter i -- using it on its products (iPad, etc.) and services (iTunes, etc.). For some other reason, Apple does not pay enough attention to the need for trademark clearance searches. Last week, Apple was sued by iCloud Communications of Phoenix for trademark infringement of the mark iCloud. Now comes word that a small New York publisher, J.T. Colby, is suing Apple (S.D.N.Y., 11-cv-4060-DAB) for use of the trademark ibooks for Apple's electronic library service. Colby claims to own the common law trademarks "ibooks" and "ipicturebooks," asserting that it acquired priority rights to ibooks going back to 1999 from a predecessor user. Note to Apple, it costs a lot less to obtain and analyze a good trademark clearance report than to litigate trademark claims after a product launch.

It's Not Just .com Anymore!

It's official. This morning in Singapore the Internet Corporation for Assigned Names and Numbers (ICANN) voted to open up the filing of generic top level domains (gTLDs). The new world of .xxx, .disney, .coke, .(your tradename here) is now upon us.

The Hangover: Part II -- Case Settled?

Reuters is carrying a report this morning that the copyright infringement claim relating to a face tattoo has been settled. There is no present report as to how much money, if any, was paid in settlement and there is no filing in the case records relating to the settlement as of this morning. My prior blogs on the topic of the copyrightability of facial tattoos were published on May 26 and May 30.

Investment Firms Lose Their News To News Aggregators

News aggregators won a big victory today in the Second Circuit Court of Appeals in the case of Barclays Capital v. theflyonthewall.com. The Second Circuit held that it is not a violation of the Copyright Act for a news distributor to report the fact that a stock analyst makes an investment recommendation. Nor is it a violation of the "hot news" misappropration tort when the news distributor accurately reports that the investment recommendation originates from its true source.

In the early hours prior to the opening of the stock exchange, Barclays and other investment firms provide investment analysis and recommendations to their subscribers and clients. The sales staff of the investment firms then contact their customers in an effort to procure investment transactions based on the recommendations. theflyonthewall is a news gatherer, or aggregator, that claims to be the "fastest news feed on the web." theflyonthewall somehow obtains the recommendations from the investment firms early in the day, often before the markets open, and distributes the recommendations to its subscribers. In doing so, the investment firms claim that theflyonthewall undercuts their research service and ability to trade on the hot news of their recommendations.

The Second Circuit held that there is no hot news claim if all that is done by theflyonthewall is to truthfully report that an investment firm makes a certain investment recommendation. The fact that an investment firm makes a recommendation is, itself, news. theflyonthewall is merely distributing this news without improperly "free riding." The Second Circuit observed that if theflyonthewall copies the recommendation report of the investment firms so as to induce a customer into believing that the recommendation originates with theflyonthewall, then this would be impermissible free riding and violation of the hot news tort. But theflyonthewall accurately reports a recommendation and the origin of the recommendation from the particular investment firm. In this circumstance, the hot news tort is preempted by the Copyright Act since the recommendations come within the subject matter of copyright and the scope of copyright protection. And because the Copyright Act does not extend protection to facts, the fact that an investment firm makes an in investment recommendation is not protected in copyright, either.

So, in the end, the investment firms who invest significantly in investment research are not able to control their own investment recommendations to their customers. Their recommendations are not protectable by copyright as non-protectable news or fact. Their recommendations are not protectable under the hot news misappropriation theory. This is the case even in relation to a fast acting news distributor who can distribute the recommendation quicker, at potentially less expense, and then seek to direct the customer to make a transaction from a discount trader. It appears that the news distribution problems impacting the newspaper industry now squarely have reached the stock analysts desks on Wall Street.

Stanford Lost A Fortune: Faulty Drafting Of An Inventorship Agreement

The wrong word choices can lead to devastating results -- just ask Stanford University!

Last week’s Supreme Court decision underscores the necessity of careful drafting in employment and inventorship agreements. Stanford University lost out on the ownership of valuable patent rights because of poor word choices. The problem? Stanford's assignment form used the future tense (I agree to assign) rather than the present tense (I hereby assign).

The factual circumstance was not all that unusual. Stanford hired a research fellow, Dr. Mark Holodniy, to work on HIV research. At the time of the hire, Dr. Holodniy signed Stanford’s Copyright and Patent Agreement, by which he “agree[d] to assign” to Stanford his “right, title and interest in” inventions resulting from his employment at the University. Thereafter, Stanford loaned Holodniy to a small California research firm, Cetus, to collaborate on HIV research. Cetus required Holodniy to sign its Visitor’s Confidentiality Agreement that provided Holodniy “will assign and do[es] hereby assign” to Cetus his “right, title and interest in each of the ideas, inventions and improvements” made “as a consequence of [his] access” to Cetus.

Holodniy worked at Cetus for a period of time on HIV testing processes before returning to Stanford. As a result of further research conducted at Stanford by Holodniy and others, Stanford was awarded several patents relating to HIV measurement techniques. Cetus was eventually acquired by Roche Molecular Systems, by which Roche specifically acquired all rights that Cetus owned in its Visitor’s Confidentiality Agreement. Thereafter, Roche commercialized the HIV quantification methods developed by Holodniy at Cetus, and now sells its HIV test kits to hospitals and HIV clinics world-wide.

Stanford sued Roche for patent infringement, claiming that Roche’s HIV test kits infringed Stanford’s HIV measurement patents. Roche argued that it had an ownership interest in the HIV inventions by virtue of its acquisition of Holodniy’s Visitor’s Confidentiality Agreement. Stanford disputed Roche's ownership interest, pointing out that Holodniy had no rights to assign to Cetus since he had earlier signed Stanford’s Copyright and Patent Agreement.

The district found that Cetus’ Visitor’s Confidentiality Agreement transferred Holodniy’s inventorship rights to Cetus. However, the district court also held that, because the development of the HIV measurement technique was funded by federal money, the Bayh-Dole Act superseded the assignment to Cetus and placed ownership of Holodniy’s invention with the recipient of the federal funds, Stanford.

The Federal Circuit disagreed with the district court. It held that the choice of words in Stanford’s Copyright and Patent Agreement did not transfer to Stanford a present interest in Holodniy’s inventorship in HIV measurement research. The Federal Circuit determined that Stanford’s Copyright and Patent Agreement constituted only an agreement to assign in the future. On the other hand, there was an actual, present transfer of Holodniy’s inventorship rights by virtue of the present assignment provided for in Cetus’ Visitor’s Confidentiality Agreement. The Federal Circuit also held that the Bayh-Dole Act does not change normal invention ownership rules, even when the invention is developed with federal funds.

The Supreme Court granted certiorari on the issue whether the Bayh-Dole Act supersedes normal contract language pertaining to assignment of an inventorship interest when funding is provided by the federal government. The Supreme Court made clear that, since the initial patent act of 1790, an invention is owned in the first instance by the inventor, and there must be an actual present assignment of the rights in the invention in order to cause a transfer from the inventor. The Supreme Court further confirmed that the Bayh-Dole Act does not usurp this established law.

The problem with Stanford’s choice of words was that “agree to assign * * * right, title and interest in” only created a promise to assign in the future, not a present assignment. A further problem was that Stanford’s language related only to inventions, and did not seek to transfer broader rights for ideas, improvements and issued patents.

On the other hand, Cetus' agreement specifically provided that Holodniy “will assign and do[es] hereby assign.” The language assigned the inventor’s “right, title and interest in each of the ideas, inventions and improvements” made “as a consequence of [his] access” to Cetus. Not only does the Cetus language constitute a present-day assignment of Holodniy’s present and future inventions, but it provides an expansive assignment of ideas, inventions and improvements.

While the Supreme Court holds that the Bayh-Dole Act does not change, but supports, traditional law of patent ownership and transfer notwithstanding the use of federal funds in the development of the invention, Stanford lost exclusive patent rights from poor choice of language in its employment agreement with Holodniy. Critically:

1. The inventor is the initial owner of an invention, even if the invention is developed during the course of the inventor’s employment.
2. The inventor’s employer must obtain a present-day assignment in writing from the employee-inventor in order to obtain an interest in the invention. A promise to assign rights in the future is not good enough to create a present assignment.
3. An assignment of rights in an invention is too narrow. The employer should make certain that the assignment covers the ideas, improvements and issued patents, as well.
4. Funding of invention development by the federal government does not, without more, change these rules.

Liberty

On this date 126 years ago in 1885, a nice round number to be sure, the Statue of Liberty arrived at its permanent place of repose in New York Harbor. The 151 foot high statute was a gift from the people of France to commemorate the 100th anniversary of American independence.

Jack Boucher, photographer, 1984

The Supreme Court Tells Microsoft To Reboot

It must be tough being Microsoft. This huge multi-zillion dollar company just can't seem to catch a break. It gets no respect. Apple is floating in the clouds with its ultra-innovative efforts. Wasn't Microsoft claiming to be the great innovator at one point in time? Paul Allen is brow-beating his former Microsoft friends, telling the world who the real Idea Man truly is. In your face, Bill! And now, the Supreme Court is kicking sand at Microsoft.

In one corner, you have Microsoft, the Redmond behometh that outsources legal tasks overseas and tries to talk the Supreme Court into seeing things its way. In the other corner, you have nine Supreme Court justices who could care less about Word.

In Microsoft v. i4i, the Supreme Court today tells Microsoft that, while it is very sorry that Microsoft lost a huge jury award for willfuly infringing i4i's patent in some of Microsoft Word's products, too bad. Microsoft argued that its defense of patent invalidity should not be based on a clear and convincing standard but the less arduous preponderance of the evidence standard. Microsoft particularly argued that this should be the case when the Patent Office issues a patent without examining relevant prior art. Microsoft claimed that i4i's patented software contained elements of i4i's earlier software and therefore, because the earlier software failed to satisfy the on-sale bar, the Patent Office's issuance of i4i's current patent was faulty. Of note, the code for i4i's earlier software had been destroyed years prior to commencement of the litigation. i4i relied on the testimony of the inventors of the earlier software to explain verbally why the earlier destroyed software was not present in the patented software. [ I can only hope that the inventors did not use shadow puppets during their software testimony! ] In any event, Microsoft lost big time at trial even though i4i did not introduce into evidence its former code that was the subject of the on-sale bar! Brutal!

The Supreme Court explained that §282 of the Patent Act very clearly provides that an issued patent is presumed valid. The meaning of the term "presumed valid" is well settled in common law. Indeed, the Supreme Court cites to Justice Cardozo, and his analysis of over a century of case authority, confirming the clear and convincing burden of proof needed to overcome a presumption of validity.

Let's be clear. Whenever any court, including the Supreme Court, cites to Benjamin Cardozo, the appellant is going to lose. I am not aware of any court overturning Cardozo. Indeed, it should not have been necessary for Microsoft's counsel to read to the end of the Supreme Court opinion, where the court writes Affirmed, to know that Microsoft lost. This should be clear once Cardozo's name is mentioned early in the opinion. Hopefully, Microsoft will not be billed for any time reading past the name Cardozo.

Benjamin N. Cardozo (1870 - 1938):

So, bottom line, the proof of invalidity requires a clear and convincing showing, just as has been the case for decades. Further, a jury is willing to believe a software inventor's testimony concerning software code that is destroyed and not introduced into evidence. Microsoft just can't catch a break.

The Forfeiture of Le Marché

On November 16, 1981, the monotype Le Marché, created by Camille Pissarro, was stolen from the Musée Faure in the Alpine town of Aix-Les Bains in southeastern France. The print was transported into the U.S. by the alleged thief and consigned in 1985 to an art gallery in Texas, where it was ultimately sold to a corporate buyer. Sharyl Davis eventually acquired possession of the print in 1992 from its prior corporate owner and displayed the work in her home for more than ten years. Ms. Davis consigned the print in 2003 to Sotheby’s for auction. The French National Policy became aware of the impending sale of Le Marché and notified U.S. law enforcement who, in turn, requested that Sotheby’s withdraw the work from auction; and Sotheby’s complied. In 2006, the U.S. government brought a civil forfeiture action seeking to recover possession of Le Marché for return to France.

Faure Museum:

Contentious litigation thereafter ensued between the U.S. and Ms. Davis culminating in the recent decision by the Second Circuit Court of Appeals. The court held that notwithstanding Ms. Davis' status as an innocent purchaser, the stolen print was subject to civil forfeiture under U.S. customs law.

The print, Le Marché:

Specifically, in a two-step analysis, the government brought a claim under the customs law, 19 U.S.C. §1595(a), a part of the Tariff Act of 1930, that authorizes the forfeiture of merchandise brought into the U.S. contrary to law that is stolen, smuggled or clandestinely imported or introduced. The government argued that the print was stolen and brought into the U.S. contrary to law in that the possession or sale of stolen goods with a value of at least $5,000 that has moved in interstate or national commerce with knowledge that the goods are stolen violates the National Stolen Property Act. Because the thief stole the print, valued at more than $5,000, from the French museum and imported the work into the U.S., the government maintained that the National Stolen Property Act was violated and the print was subject to civil forfeiture under the Tariff Act.

Ms. Davis argued that she was an innocent owner, but the Second Circuit confirmed that the innocent-owner defense does not apply to a civil forfeiture claim under the customs law. "Indeed, the Supreme Court held, in a case addressing another provision of the Tariff Act of 1930, that 'forfeiture may be enforced even against innocent owners . . . . The penalty is at times a hard one, but it is imposed by the statute in terms too clear to be misread.' General Motors Acceptance Corp. v. United States, 286 U.S. 49, 57 (1932)."

The Second Circuit was mindful that the civil forfeiture law rendered a harsh result for Ms. Davis. Nonetheless, the return of stolen artwork that was introduced into the U.S. in violation of the customs laws represents the law and the enforceable position of the U.S., even when the art is presently owned by an innocent party. In this context, the rule of "buyer beware" aptly applies to art, particularly international art.

And The New Register Of Copyrights Is ...

The new Register of Copyrights is Maria Pallante, appointed to this permanent position by the Librarian of Congress on June 1st.

Ms. Pallante becomes the 12th Register in the history of the U.S. Copyright Office. She follows in the foot steps of the recently retired Marybeth Peters. Ms. Pallante has spent much of her career as IP counsel and director of licensing for the Guggenheim Museums in New York. More on this appointment is available from the Copyright Office press release.

Knowledge That Induces Patent Infringement -- Outsourcers Cannot Hide Under The Rug Of Foreign Law

The Supreme Court announced today its decision in the case of Global-Tech Appliances, Inc. v. SEB S.A., an opinion that speaks to the scienter standard for inducement of patent infringement.

In this case, SEB obtained a U.S. patent on its deep fryer. Sunbean had an interest in marketing a competing fryer and contacted Global-Tech's Hong Kong subsidiary to manufacture a fryer containing Sunbeam's specifications. The Hong Kong firm purchased an SEB fryer made for the foreign market that did not contain any patent marking. It copied the substantive elements of the SEB fryer except for certain cosmetic features. It further retained an attorney to conduct a patent right-to-use analysis, but did not disclose to the attorney that it had copied the SEB product. The attorney did not discover the SEB patent and concluded that the Hong Kong product did not infringe the patents that were discovered. The Hong Kong firm then manufactured and supplied its fryers to Sunbean and other firms (under their own brands) for sale in the U.S.

SEB sued Sunbeam for patent infringement, and Sunbeam notified the Hong Kong firm of the lawsuit. The Hong Kong firm continued to distribute its fryers to other brand owners for sale to the U.S. market. SEB settled with Sunbeam and sued Global-Tech for infringement by inducement under 35 USC §271(b). The issue before the Supreme Court centered on the knowledge standard on the part of Global-Tech for purposes of liability under an inducement theory.

The Federal Circuit held that liability for patent inducement under §271(b) occurs when the purported infringer knew or should have known that its actions would induce actual infringements. The Federal Circuit held that Global-Tech was liable on this basis since it deliberately disregarded a known risk that SEB's fryer was protected by a U.S. patent. As such, the Federal Circuit concluded that "deliberate disregard" is the same as "actual knowledge."

The Supreme Court rejected the Federal Circuit's deliberate disregard standard for knowledge and confirmed that actual knowledge that the induced acts constitute patent infringement remains the standard for infringement by inducement under §271(b). The Supreme Court makes clear that "deliberate indifference" to a known risk does not satisfy the knowledge standard. However, the Supreme Court agreed that the knowledge requirement can be satisfied by proof of "willful blindness." To satisfy the test for willful blindness, two elements must exist: (1) the purported infringer must subjectively believe that there is a high probability that a patent is infringed by its act, and (2) the purported infringer must take deliberate steps to avoid learning of this fact.

The Supreme Court held that, in this case, the following facts satisfy the test for willful blindness: (1) the defendant copied all of the features of SEB's fryer except for certain cosmetic traits, believing that these copied features were valuable, (2) the defendant copied an oversea's model of SEB's fryer aware that it did not contain a patent marking, and (3) the defendant failed to disclose to its attorney that the product under consideration was a knock-off of SEB's product.

Taken together, the Supreme Court affirms that this evidence satisfies the willful blindness test to establish knowing inducement, and the judgment against Global-Tech was affirmed.

This decision should be considered carefully by any U.S. manufacturer who outsources its manufacturing to overseas suppliers. It must also be considered by overseas manufacturers who look solely to their local law and fail to consider the merits of liability under U.S. law. Blindly failing to consider the requirements of U.S. patent law may constitute an element of "willful blindness."

As an aside, it will be interesting to learn whether the "willful blindness" synonym for "knowledge" will be of use to establish liability in the various patent marking claims that are pending around the U.S.

More of The Hangover

By all accounts, The Hangover: Part II flick appears to be a big financial hit, at least this weekend. Focusing on the facial tattoo that is prominently featured in the film, and further to my blog post of this past Thursday, I continue to be troubled by the prospect of copyright protection for a tattoo.

It is clear enough that Mike Tyson's facial tattoo is a work of graphic design and is included within the subject matter of copyright. It is also certain that the permanent tattoo is, well, permanent and fixed in a tangible medium. So, why should there be a question of copyrightability?

There are many items that adorn a human body that are not copyrightable for one reason or another. A hair stylist may be quite creative in designing a new coiffure, but the constant growth of hair -- and the resulting change in shape of the cut -- means that the hair design may not be sufficiently permanent and is, in any case, functional (hair must be cut periodically). The same can be said of a cosmetic artist who creates a highly stylized facial rainbow, and a cuticle stylist who adorns finger tips with creative designs. While this work of body adornment is high fashion, it is also functional (makeup and finger nail polish protect the skin and, secondarily, provide a bodily presentation that creates sexual attraction that leads eventually to procreation, etc.). Plus the need to wash the face and cut the cuticle means that the work is not sufficiently permanent. Add the aroma of pungent perfume to this mix of non-permanent, functional bodily accouterments.

The above examples pertain to work that is so intimately applied to the body that it becomes one with the body. They are not protectable in copyright either from lack of permanency or inherent functionality. Apparel is another item of bodily adornment. It is not copyrightable because of historical views of function that clothing provides to the body. Though apparel is of another class than the very intimate works of tattoo, cosmetics, nail paint and perfume that are applied directly to the body, the lack of copyrightability in the very things that humans wear to warm themselves, protect themselves and to become noticed supports the view that there are some things that simply are too closely associated with the body to merit copyright protection.

A tattoo seems to me to be so personal that, notwithstanding its permanency, it serves a very functional purpose of becoming the human body. Pulling skin into a tuck to hide its lack of elasticity, coloring hair to hide its natural lack of attractive color, reconfiguring a nose or acid washing the skin to correct perceived flaws, all may be creative but they are too personal to a human. The result of the work becomes the human. A tattoo is of this sort. Mike Tyson is now a tattoo-bearing human. His face has been altered by the ink just as his face would be altered by plastic surgery. Notwithstanding how creative the plastic surgery, the resulting transformation involves a surgical alteration of the body that, itself, becomes the body. And while the holder of the tattoo needle may be as skilled in his or her field as the plastic surgeon, the result is the same: an alteration of the human body that becomes the body. As the body, the result of the work is purely functional.

My thinking.

More BitTorrent Lawsuits

My May 4th post discussed a pending lawsuit brought by Liberty Media Holding against cable firms and ISPs in order to identify the owners of the internet protocol addresses that participated in claimed infringing downloads of copyright-protected film. This Liberty Media case is not the only case, of course, involving BitTorrent downloads. Of note, PC World recently reported on a new case brought by U.S. Copyright Group seeking the names of owners of IP addresses that downloaded "The Expendables" movie. The court has authorized USCG to obtain these names from the cable firms and ISPs. PC World has published the IP addresses and dates of download. The owners of these IP addresses may soon be receiving infringement claims from USCG.

Hangover: Part II -- The Case of the Mimic Tattoo

The movie Hangover II has opened and may enjoy a good box office this Memorial Day weekend. In the first Hangover, three friends give their buddy a wild bachelor party in Las Vegas, thereby encountering a multitude of problems. One critical issue concerns the misplacement of their buddy. The friends spend most of the film trying to locate him prior to the impending nuptials. During the friends' misdirected quest, they encounter Mike Tyson's tiger sleeping in their hotel bathroom. This is actually a good thing since the tiger is the cause of the friends' meeting with Mike Tyson, who was prominently brandishing a large facial tattoo.

Part II continues with the friends' pursuit of further intoxicating high jinx. The new film also prominently features a tattoo on actor Ed Helms' face. The tattoo appears very similar in design, location and size as the Tyson tattoo, although there are some apparent differences. Wherein lies the problem, according to the tattoo artist S. Victor Whitmill, who claims that the Helms' tattoo is an infringement of the tattoo he designed and affixed to Big Mike's face.

So, this being America, where a federal lawsuit can be filed for a court fee of $350, Mr. Whitmill filed a copyright infringement action against Warner Bros. in federal court in St. Louis. He sought to enjoin the release of Part II to preserve his copyright interest in the Tyson tattoo from claimed irreparable harm.

The court declined to enjoin the release of the new film, but news reports suggest that the court did not think much of the Warner Bros. defense. This will all be sorted out in time. This case raises several interesting issues in copyright, just as Part II raises interesting issues in filmatic humor, I'm sure.

One question present in the case tests whether copyright protection can -- or should -- extend to an image indelibly and permanently affixed to the human body. After all, Big Mike walks around town, perhaps with his tiger, meeting people while emblazoned with the permanent and public face art. If someone takes his photo, can this be infringement? If Big Mike appears in a motion picture, can this appearance (and the resulting display and distribution of the tattoo) be infringement? Indeed, Mike appeared in the first Hangover film and no lawsuit was filed by Mr. Whitmill. Is affixing to the human body sufficient for purposes of satisfying the fixation requirement of copyright? And if it is, should it be so? Should there be a human body fixation exception? Does copyright in a permanent aspect of a human body travel too close to the law of right of publicity? Are the exclusive rights of copyright too strict, notwithstanding fair use principles, to allow for first amendment protection when the human body becomes the walking canvas? These are but a few, I'm sure, of many more interesting copyright questions relating to human fixation.

A second question concerns the role of David Nimmer. He is both the present author of Nimmer on Copyright (written initially by his father Mel), a law teacher at UCLA and a practicing attorney with the firm of Irell and Manella. Mr. -- Professor -- Author Nimmer gave a declaration in behalf of Warner Bros. and in opposition to the preliminary injunction. In the declaration, he explains that he once believed that work can be affixed to the human body to satisfy the fixation requirement, but that he changed his mind years ago. Fair enough, he has the right to change his mind. But it appears that the current version of Nimmer on Copyright continues to posit that a work can be protected by copyright if affixed to the human body. See, §1.01[B][1], fn 392 (“For a tattoo may presumably qualify as a work of graphic art, regardless of the medium in which it is designed to be affixed (in this instance, human flesh)”).

So, Nimmer takes one position as an authority in his treatise, but takes a contrary position in his declaration as an advocate for Warner Bros. in this case. At least, that is the appearance. Is Nimmer's true role that of a scholar or advocate, and how can anyone tell? Should his legal position on this issue be consistent notwithstanding the several hats he wears? Indeed, is there now a hint of suggestion that the perceived independence and authority of the Nimmer treatise is called into question?

Was President Lincoln the First IP President?

Among President Lincoln's notable "firsts", and there were several (the first president to preside over a civil war, the first president to proclaim the release of slaves in Washington, DC, the first president to seize the family homestead of a rival military leader -- the Robert E. Lee family home in Arlington -- and others), he was the first president to obtain an issued patent. On this date, May 22, in 1849, the U.S. Patent Office issued a patent to Abraham Lincoln for his invention of affixing bellows to the undersides of a ship so that, upon inflating the bellows with air, the ship achieves greater buoyancy, thereby enhancing safe passage over sand bars and shoals.

Lincoln whittled the wooden specimen of his invention, and this carving now resides at the Smithsonian's National Museum of American History.

That Lincoln recognized the value of invention, and the importance of protecting invention, cannot be denied.

"The patent system . . . secured to the inventor, for a limited time, the exclusive use of his invention; and thereby added the fuel of interest to the fire of genius, in the discovery and production of new and useful things." A. Lincoln, Feb. 11, 1859.

Presently, the U.S. patent system is bowed under serious strain. Congress has appropriated PTO user fees for other government purposes. The PTO's expedited patent review program has been suspended due to these budget cuts. The PTO's program to open satellite offices around the country (beginning with Detroit) has been likewise suspended. The PTO's need to upgrade its computer system and examination processes are stifled under this budget stress.

For a country that many believe continues to lead the world in creative invention and innovation, the government's budgetary burden on the patent system fails to head the admonition of Lincoln to preserve the patent system, thereby causing the diminution of "the fuel of interest to the fires of genius."

Financial Assistance Available for New Inventions

Some of you public TV fans may be familiar with the show Everyday Edisons, an Emmy winning TV show on PBS now in its third season. The show, produced by Edison Nation, seeks to match investors to inventors of newly conceived inventions. The CEO of Edison Nation, Louis Foreman, an innovator who attempts to inspire others toward innovation, has spearheaded the formation of a $25 million new-invention fund managed by the Edison Nation Innovation Fund. For a fee of $25, an inventor can submit an idea to the Fund to potentially qualify for an investment up to $250,000 to assist in the commercialization of the invention. Foreman expects that the Fund will select about 100 ideas for investment. More information about the Fund and the investment program are available from Edison Nation and from this Reuters news report.

This blog does not recommend or encourage any inventor's participation in the Edison Nation Innovation Fund, or in any other invention development/funding programs, but offers the foregoing for informational purposes only.

Have You Seen Me? -- India's 44,000 Missing Trademark Files

For those of us wondering why it takes so long to obtain a trademark registration in India, we now have a bit of an answer. A public notice dated April 25, 2011 has been posted on the India Trade Mark Office website, explaining that 44,404 trademark files have gone missing.

The public notice, written by the India Comptroller of Patent, Designs and Trademarks, reads:

PUBLIC NOTICE

This Public Notice is issued in pursuance of the directions issued by the Hon'ble Delhi High Courtin Civil Writ Petition No.12505 of 2009 dated 6.4.2011. All the public and in particular the registered proprietors are hereby informed that a total of 44,404 files relating to registered trade marks are missing from different branches of the Trade Marks Registry. Branchwise missing list is attached to this notice. The Trade Marks Registry is having critical information in digital format in respect of all these missing files such as the trade mark applied for, the name of the applicant, the address for correspondence, agent on record as available in the Trade Marks Journal and details of renewal and subsequent changes available in the electronic history records of the concerned mark. However, in order to update the trade mark office records it has now become necessary to reconstitute these files with inputs from the registered proprietors. It would also be in the interest of the registered proprietors to have the files reconstituted for better protection and maintenance of their marks. All the registered proprietors/agents of registered trade marks attached to this notice are requested to furnish self attested copies of the available documents such as trade mark application in form TM-1, additional representation , Examination report, Acceptance order, registration certificate, all documents relating to assignment/ transmission, change in name and address of applicant, any court order on the matter and all other relevant documents if any before 31st July, 2011 at the appropriate Registry. The documents so furnished will be digitised and uploaded in the electronic server of the Registry so as to maintain electronic records as well. The Trade Marks Registry will follow the procedure for reconstitution issued by separate Office Circular. 

(P.H.Kurian)

Controller General of Patents, Designs and Trade Marks

What is interesting is that these missing files came to light not as a result of normal file maintenance practice but rather from the India Trade Mark Office's efforts to modernize its files. It is not clear what the risk may be, going forward, for further loses of files once the moderization process is completed. Further, no word yet as to how many patent files are unaccounted for. That patent modernization process may not have commenced yet, although this is also unclear.
 
And finally, no word on how any of this has impacted the commercial competitiveness of India businesses. Years ago, during the process of moving from one house to another, my family and I came to live out of boxes for an extended period of time. In fact, most of our non-essential possessions remained in boxes and in storage while we traversed from on house to another over an extended period. Once we finally arrived at our new home, it became clear to all of us that the items in the boxes, the access to which was denied to us for quite a while, were not as critical to our needs or happiness as we had once thought.
 
Wondering if the same can be said for the owners of the 44,404 lost Indian trademark files. If these trademark owners can go about their business without a trademark registration, and if no one was apparently aware -- until recently -- that the files were lost, then perhaps the need for an India trademark registration may not be all that important, after all. Something to ponder, I suppose.

BitTorrent Users: Liberty Media Holding is Looking for You!

The decision last week by the federal court in Los Angeles highlights the potential liability for BitTorrent users who download copyrighted material. BitTorrent is a peer-to-peer file sharing protocol that allows the private transfer of files between private parties. Using BitTorrent, users can join a network “swarm” to simultaneously upload or download content with one another.

If the shared material is protected by copyright, trademark or other laws, then the copyright owner has a challenging problem in learning the identity of the BitTorrent swarm participants. Rights owners, taking a cue from the music industry infringement litigation, are seeking court orders requiring the production of names and contact information of customers of cable operators and Internet service providers who participate in these BitTorrent file sharing swarms.

In the Los Angeles case, Liberty Media Holdings (U.S. District Court for the Southern Dist. of Cal., Case No. 11cv619, order entered April 4, 2011) filed a lawsuit against unknown “Does” claiming that Liberty’s copyrighted motion picture, “Corbin Fisher Amateur College Men Down on the Farm,” (!), was the subject of infringing file sharing via a BitTorrent swarm. Liberty had the IP addresses of users actually participating in the claimed infringing conduct, but did not have the names and addresses of the owners of the IP addresses. After filing its lawsuit, Liberty requested that the court order various cable companies and ISPs, including Charter Communications, Comcast Cable, Cox Communications, Qwest Communications, Time Warner, Verizon, and numerous others, to provide to Liberty the identifying information of the owners of the IP addresses. Liberty was interested in obtaining this information for one important, and obvious, reason: it wanted to add these names to the lawsuit.

The court allowed Liberty to obtain this identifying information from the cable companies and ISPs. In doing so, the court observed that the Cable Privacy Act generally prohibits cable operators from disclosing personal identifying information about its customers absent a court order. The court concluded that it has authority to enter the order compelling the disclosure of customer identifying information when: (a) the plaintiff presents the unique IP addresses, the dates and times of the connection, and the names of the ISPs and cable operators that provide Internet access for these IP addresses, (b) the plaintiff had no other ability to identify the owners of the IP addresses, and (c) the plaintiff establishes its prima facie claim.

The court’s decision will now allow Liberty to obtain the identity of the claimed BitTorrent swarm infringers from the cable operators and ISPs. And once the identities are obtained, these BitTorrent users will likely receive notices of infringement and other claims from Liberty, perhaps in conjunction with an opportunity to pay a substantial sum of money in settlement!

This case should be a warning to all BitTorrent file sharers. Do not download or upload video and audio files that are protected by copyright, trademark or other laws. If you are uncertain whether the files are protected, look for a copyright notice, a trademark notice or other relevant information that may appear on the material. Importantly, be cautious in uploading or downloading material created by others. This material may very well be protected by IP laws and other laws.

The Ninth Circuit Gets Tough With Violations of Computer Use Restrictions

The Ninth Circuit has expanded criminal liability under the Computer Fraud and Abuse Act for violation of specific use restrictions.

The Computer Fraud and Abuse Act (CFAA) creates civil and criminal liability in certain instances for conduct relating to the unauthorized access to a computer, or exceeding the authorized access to a computer. A person is criminaly liable under the CFAA if he or she:

Knowingly and with intent to defraud, accesses a protected computer without authorization, or exceeds authorized access, and by means of such conduct furthers the intended fraud and obtains anything of value, unless the object of the fraud and the thing obtained consists only of the use of the computer and the value of such use is not more than $5,000 in any 1-year period[.]

18 U.S.C. §1030(a)(4).

On April 28, 2011, in the case of USA v. Nosal, the Ninth Circuit expanded the use of CFAA into the criminal arena. The court made clear the following basic tenets under CFAA §1030(a)(4):

1. If the business owner of the computer does not restrict a user’s access to and use of computer data, then a user’s access to computer data and the use of the data for purposes contrary to the interest of the computer owner does not constitute a crime under CFAA.

2. If the business owner of the computer restricts access to computer data, then there is criminal liability under CFAA §1030(a)(4) when:

a. The person who accesses the computer does so in violation of the computer owner’s specific restrictions on computer access;

b. The person accesses the computer data with the intent to defraud the owner of the computer data; and

c. By accessing the computer data in violation of the restrictions, the person “furthers the intended fraud and obtains anything of value.”

3. If a person without access to the computer induces another person who has access to obtain and pass along restricted data, then under criminal conspiracy theories both the person without access who receives the restricted data and the person with access who passes along the restricted data may be criminally liable.

The Nosal case deals with a former employee of a business who engaged with several existing employees of the business to obtain proprietary information from the business’ computer system. The former employee intended to use this information to establish a competing business. The existing employees had access to the computer data, but their access and use were restricted by the employer’s specific written business rules. The employer’s use restrictions were “clear and conspicuous.” The employer required its employees to sign employment agreements that specifically prohibited “use and disclosure of all such information, except for legitimate * * * business * * *.” Further, the employer’s computer system displayed a cautionary message whenever a user logged on, stating:

This computer system and information it stores and processes are the property of * * *. You need specific authority to access any * * * system or information and to do so without the relevant authority can lead to disciplinary action or criminal prosecution * * *.

The criminal case was brought when the existing employees used their restricted access to obtain proprietary data and pass the data to the former employee for purposes of developing a competing business. This conduct occurred in direct violation of the employer’s specifically defined use restrictions. Nosal represents the first criminal use of the CFAA in this manner by the Ninth Circuit.

The Ninth Circuit’s Nosal opinion goes to some length to explain that the foregoing criminalization of computer access is not designed to impose liability on an employee who uses an employer’s computer system for unauthorized use that is merely personal and non-fraudulent, “for example, to access their personal email accounts or to check the latest college basketball scores.”

While the Nosal opinion involves an employment context, the teaching of Nosal is not so limited. Other examples in which a person can intentionally access and use computer data in violation of specific restrictions and for a fraudulent purpose include:

 downloading data with a “borrowed” access code when the owner of the database specifically requires that each user obtain his or her own access code, or

 accessing and using a computer database to redistribute downloaded data in violation of a personal use agreement, or

 downloading data for commercial purposes when the use agreement restricts usage to personal or household purposes.

While the CFAA is not limited to the traditional concept of hacking, the Ninth Circuit will allow criminal application only when the owner of the computer clearly and conspicuously establishes access and use restrictions.

Federal Juris-Prudent

It is interesting how really smart, astute, worldly and, at times, humorous, a federal judge can be about so many issues that require attention and decision. See this interesting Order from Judge Melgren of the District of Kansas.

 

Keith Aoki

An amazing copyright scholar, Keith Aoki, passed away yesterday at the age of 55. Most recently, Keith taught law at UC Davis, but much of his earlier career was spent at the University of Oregon School of Law where he taught several IP courses including, yes, copyright law. After Keith left UO for UC Davis, I had the amazing fortune to spend several years teaching the copyright law class at UO as an adjunct. I was unimaginatively humbled to slide into Keith's spot.

A wonderful write-up about Keith's scholarship and life work is presented on The Public Domain. I'm sure that more information will be provided in the days to come at the UC Davis law school site and the UO law school site.

Keith successfully merged his comic drawing talents with his IP scholarship. A copy of his entertaining and creative Pictures within Pictures should not be missed.



What We Learned From our Mothers

Do not steal. And if you do steal, give it back and apologize.

Many of us learned this basic truth in our youth, but the message is often forgotten in adulthood. Or, so it seems when it comes to IP infringement. Indeed, the more public and obvious the infringement, the greater the apparent need for an embarrassing public apology.

We all may recall that John McCain's presidential campaign, along with the Republican National Committee and the Ohio Republican Party, were sued by Jackson Brown for infringement of his classic "Running on Empty" during the McCain-Obama presidential contest. McCain provided an embarrassing and public apology for the infringement as part of the settlement of the ensuing litigation.

Most recently, two days ago former Florida governor Charlie Crist posted a video apology on You Tube relating to the unauthorized use by his 2010 Senate campaign of the Talking Heads' 1985 classic "Road to Nowhere." The full text of the Crist apology is transcribed and follows:

Hi, I’m Charlie Crist. During 2010, I ran for a seat in the United States Senate. During that campaign, a video advertisement utilized a song made famous by David Byrne and the Talking Heads called Road to Nowhere. The advertisement was posted on my campaign website, on You Tube and sent out via e-mail. Regrettably, the campaign did not ask permission to obtain a license from Mr. Byrne to use Road to Nowhere in the advertisement. In fact, Mr. Byrne has never permitted his songs to be used for advertising of any kind, a position I respect deeply. The use of David Byrne’s song and his voice in my campaign advertisement without his permission was wrong and should not have occurred. I do not support, nor do I condone, any actions taken by anyone involved in the Senate campaign that were inconsistent with David Byrne’s rights, or with any other artist’s rights, or the various legal protections afforded to intellectual property. I sincerely apologize to David Byrne for using his famous song and his unique voice in my campaign advertisement without his permission. I pledge that should there be any future election campaigns for me, I will respect and uphold the rights of artists and obtain permission or a license for the use of any copyrighted work. Thank you.

It is an ironic observation that politicians as a class are not immune to infringement claims when many politicians are working in Congress to stem abuse of U.S. IP. In any event, politicians, and all of us, need to be vigilant concerning the wrongful use of IP owned by others. This is particularly true when oversight may be lacking in large organizations, or when the IP misuse occurs during the heat of the moment. Indeed, this is exactly why organizational and managerial tools must be in place in all organizations to insure that infringement does not occur by lower ranking employees.

And if infringement does occur, someone will have to eat crow. Or, post an embarrassing apology.

Ninth Circuit: The Winklevosses Cannot Undo Their Facebook Settlement

The Ninth Circuit holds today that the Winklevoss twins and Divya Narendra (the “Winklevii”) cannot void their settlement with Facebook. The Winklevii accused Mark Zuckerberg of stealing the idea for what has become Facebook while they were students at Harvard. For its part, Facebook accused the Winklevii of hacking into the Facebook computers and attempting to steal Facebook users.

The parties sought to end their contentious litigation by entering into a settlement arrangement. They signed a short, one and one-third page, handwritten settlement document, including a full release and an agreement that all information presented during the settlement discussions were confidential and could not be introduced in any judicial proceeding. The Winklevii received considerable cash and Facebook shares in the settlement. Unfortunately, their disputes continued unabated, and the parties continued to disagree as to whether the settlement was valid. The Winklevii argued in part that the settlement was not valid due to the omission of material terms. They also argued that the settlement was induced by fraud; specifically, that the value of Facebook was less than it was represented to be during the course of the settlement discussions.

Both the trial court and, now, the Ninth Circuit have held that the settlement is valid and enforceable. As to the question of whether material terms were omitted, the Ninth Circuit found that all material terms that needed to be included were included. Concerning the issue of fraudulent representation of Facebook value that the Winklevii argued induced their agreement to settle, the Ninth Circuit held that this claim was fully released and, in any event, could not be proven due to the confidential nature of the information disclosed during settlement discussions. Of note, the Ninth Circuit points out that the present value of Facebook is some 3.33 times the value that the Winklevii claimed they were lead to believe the shares were worth during the settlement discussions.

Finally, the Ninth Circuit’s pointed observation about this dispute bears some scrutiny:

The Winklevosses are not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace. And the courts might have obliged, had the Winklevosses not settled their dispute and signed a release of all claims against Facebook. With the help of a team of lawyers and a financial advisor, they made a deal that appears quite favorable in light of recent market activity. See Geoffrey A. Fowler & Liz Rappaport, Facebook Deal Raises $1 Billion, Wall St. J., Jan. 22, 2011, at B4 (reporting that investors valued Facebook at $50 billion —3.33 times the value the Winklevosses claim they thought Facebook’s shares were worth at the mediation). For whatever reason, they now want to back out. Like the district court, we see no basis for allowing them to do so. At some point, litigation must come to an end. That point has now been reached.

Response To The Slants Trademark Post

My March 25, 2011 post addressed whether the PTO is too touchy when it comes to perceived scandalous trademarks. Below is a response that I received to that post from the attorney for the trademark applicant, the Slants music group:

"Hi Michael:

Not sure if you remember this, but I believe that you and I spoke for a few minutes a few years back at a CLE. Hope you are doing well. I was reading up on some of the recent commentary regarding the trademark case involving my client, The Slants, and I noticed you recently talked about the case on your blog. I appreciate the coverage, but I also wanted to point out that this matter is one that involves an allegedly “disparaging” mark and not a “scandalous” one. The difference is significant because, unlike the case of scandalous marks, the legal test for deciding whether a mark is disparaging ultimately looks only to the views of the referenced group (as opposed to the views of the general public). See In re Squaw Valley Dev. Co., 80 USPQ2d 1264, 1267 (TTAB 2006) (citing Harjo v. Pro-Football, Inc., 50 USPQ2d 1705, 1740-41 (TTAB 1999), rev’d on other grounds. The point was also addressed in the Harjo case at 1339, where the opinion states that “the perceptions of the general public are irrelevant…[O]nly the perceptions of those referred to, identified or implicated in some recognizable manner by the involved mark are relevant to this determination.”


Best regards,
Spencer

Spencer I. Trowbridge, Esq.
McNamer and Company
920 SW Third Ave, Suite 200
Portland, Oregon 97204
ph: 503.727.2502 fax: 503.727.2501
http://www.mcnamerlaw.com/attorneysTrowbridge.html"

USPTO Will Not Close Today

The USPTO has issued its press release informing the public that, in the event of a government shut down after today, it will remain open and operational through April 18, 2011.

Trademark Audit

A trademark audit, comprehensive to unfold,
Doth require patience, detail and examination in bold.
The audit provides true knowledge of worth,
And, Eureka, its owner sees royalties with mirth.

See yesterday's blog, down below, for a summary list of issues to address in a trademark audit.

Have You Audited Your Trademarks?

Do you know what intellectual property your business owns? Do you know what type of legal and business condition your business IP is in? Maintaining clean intellectual property is just as important as maintaining a clean set of financial records. Your financial records are audited, right? So, too, should your business IP be thoroughly examined. Doing so provides assurance of ownership, confirms value, clarifies rights of use, and places your business is a better posture for the license of its IP or the sale of its assets.

This article provides a list of potential issues to address concerning your firm’s trademarks. Future articles will address domain names, copyrights, patents and trade secrets.

Here is a list of potential issues to consider in conducting a trademark audit.

Trademark Due Diligence:

 Have you identified your firm’s trademarks? Is the trademark limited solely to a word mark or to a design mark (logo)? Or, does your firm’s trademark include product trade dress, the design of a product or its packaging?

 Have you documented your firm’s trademark use? Do you have written documents showing specifically how your trademark is used? If not, why not?

 Have you registered your trademark for each type of good or service that your firm offers to the public? If not, why not?

 If your firm is using its trademark on different goods or services than as indicated in a trademark registration, is it appropriate to apply for an additional registration for the non-covered goods or services?

 If your firm uses its trademark on its website, is the on-line usage of the trademark covered by the trademark registration? Should there be an additional registration covering on-line usage?

 Have you conducted a search to determine whether there are other users of your trademark (or a similar version) and trade dress for similar goods or services? If not, why not?

 Have you documented your firm’s trademark and trade dress ownership? Was your firm’s trademark or trade dress initially developed or used by former owners of your business? Or by other parties? If so, does a transfer document exist from the prior users to your firm? If not, why not?

 If your firm acquired its trademark or trade dress from another person or party in the past, has a transfer document been recorded with the U.S. Patent and Trademark Office?

 Have you documented the first use date of your firm’s trademark or trade dress for each type of good or service provided by your firm? If so, does your documentation of first use adequately establish usage in interstate commerce, foreign commerce or commerce with the Indian tribes (these are the forms of "commerce" that Congress has the right to regulate)?

 Have you obtained documentation of the first use date of any trademark or trade dress obtained from a prior user?

 Is your firm’s trademark or trade dress “free and clear” of liens or encumbrances? Has your firm given a security interest to a lender covering your firm’s trademarks or trade dress? Or, covering “general intangibles”? Has a prior owner of your firm’s trademark or trade dress given a security interest to a lender covering the trademark, or covering general intangibles? If you license the use of a trademark or trade dress, has your licensor given a security interest in the trademark or trade dress, or in its general intangibles?

 Does your firm use its trademark or trade dress in a consistent manner, or does it modify its trademark or trade dress from time to time? Does the present use of your firm’s trademark or trade dress match exactly the representation or design that is registered (as to font, color, styling and other design attributes)? Has the appearance of your firm’s trademark or trade dress been altered over time, even slightly? If so, is it appropriate to apply for a new registration for the modified styling?

 Does your firm use its trademark or trade dress in foreign countries? If so, has it obtained protection in foreign countries?

 Does your firm intend to use a new trademark in the future? If so, has it filed an Intent to Use application with the Patent and Trademark Office?

 Does your firm license the use of its trademark or trade dress to others? Here, the term “license” applies to all forms of permission, from implied consent, to a consensual handshake, to a formal license document. If a license exists, is it in writing? If it is not in writing, why not?

 Does your trademark license contemplate new uses that presently do not exist but which may subsequently develop in your industry?

 Have you obtained the right to use a trademark or trade dress pursuant to a license obtained from another person or firm? If so, is it in writing? Is the trademark free and clear?

 Does the license to use a trademark or trade dress include specific obligations concerning quality control of the usage, the type or manner of usage, or other limitations or requirements of use? If not, why not? Does the licensor actually monitor quality control of the licensee’s usage? Does the licensee actually comply with its quality control obligations?

 Does the license to use a trademark or trade dress give the licensee any rights to the trademark or trade dress? Does it limit the usage of the trademark or trade dress to certain goods or services, or to certain geographic areas? Does it include a provision to reconcile any dispute concerning trademark use, quality control, termination of use and royalty?

 The PTO requires the filing of periodic maintenance documents, and the payment of periodic fees, in order to prevent cancellation of a trademark registration. Is someone specifically charged with monitoring and maintaining the registration status of the trademark?

 Do you allow your dealers, distributors or customers to use your firm’s trademark in their business name, in their domain name, or in their marketing materials? If so, do you have written documentation controlling this usage? If not, why not?

 What is your trademark worth? What is your trade dress worth? What would happen to your business in the event your firm lost the exclusive use and control over its trademark or trade dress?

The foregoing list of trademark due diligence issues is not intended to be comprehensive. Every business is different and these issues should be considered in the context of a particular business. But these issues represent the basics for many business users.

Condom-Free Sex Film Tax Credits

Item No. 1: California requires sex actors working in pornographic film to use condoms.

Item No. 2: California has fined Hustler for non-protected sex by actors in its sex film shot in California.

Item No. 3: The Oregon House has agreed to extend the film production credits that were otherwise set to expire by the end of this year. These tax credits will encourage the production of all types of film and video in Oregon.

Item No. 4: Oregon shares a common, non-fenced border with California.

Query: Will the Oregon film tax credit encourage the production of condom-free sex films in Oregon?

Item No. 5: The present Oregon weather is 41 degrees, and cloudy with chance of rain.

Play Ball

The Tidal Basin is afresh with white cherry blossoms
and visitors from Vermont by the score.
Daffodils are pushing through the vestiges of snow
while the tulips are but slowing catching up.
Grass is growing, fertilizer is flying, law mowers are being primed for action.
It's spring.
Oh, the glory of a fresh start, a new beginning,
a season where everyone poses from the common starting line.
No one has yet lost, and everything is to be gained.
Look ahead, not behind.
It's spring. What to do? Where to begin?
Jackie Robinson would know. Play ball.
It's spring.
The opening game of the 2011 Major League season begins today in the Nation's Capitol with the Nationals hosting the Braves.

How Long Does A Copyright Last?

I am periodically asked about the term of copyright. Such an apparently simple question comes with a complex answer. There is, indeed, no one copyright term. The answer depends on when the work was created or published. Below is a wonderful chart prepared by Lolly Gasaway of the University of North Carolina that attempts to explain it all:

Work created 1-1-78 or after:
Term commences when a work is fixed in tangible medium of expression, the term is Life plus 70 years (or if work of corporate authorship, the shorter of 95 years from publication, or 120 years from creation).

Work published before 1923:
Work in public domain.

Work published between 1923 - 63:
Term commences when a work is published with notice, with a term of 28 years for first term and can be renewed for 47 additional years, now extended by 20 years for a total renewal of 67 years. If not so renewed, now in public domain.

Work published from 1964 - 77:
Term commences when a work is published with notice, with a term of 28 years for first term, now automatic extension of 67 years for second term.

Work created before 1-1-78 but not published:
Term commences 1-1-78 (the effective date of the 1976 Act which eliminated common law copyright), with a term of Life plus 70 years, or to 12-31-2002, whichever is greater.

Work created before 1-1-78 but published between then and 12-31-2002:
Term commences 1-1-78 (the effective date of the 1976 Act which eliminated common law copyright), with a term of Life plus 70 years, or 12-31-2047, whichever is greater.

Here's To You, Auggie Busch

August Anheuser Busch, Jr. was born on this date in 1899 in St. Louis. During his tenure as chairman from 1946-1975 of the Anheuser-Busch Cos., the great brewery founded by his father Adolphus Busch and Eberhard Anheuser became the largest brewery in the world. In 1953, Busch convinced the brewery board to acquire the St. Louis Cardinals baseball club, thereby forever establishing the connection between Budweiser and baseball.

Cariou v. Prince: Infringement by Appropriation Art

Photos were taken. Photos were appropriated into new art forms. Copyright infringement claims resulted.

Patrick Cariou's photographs of Jamaican Rastafarians were published by PowerHouse Press in 2000. The book contains photographic portraits of Rastafarian individuals plus images of Jamaican landscape. Following publication, the well-known “appropriation artist” Richard Prince commenced appropriating many of these photographs for inclusion in his new work. Between December 2007 and February 2008, Prince displayed at a hotel in St. Barts some 35 of the Cariou photographs that were torn out of the Cariou book and attached to a wooden backer board. Of these 35 photos, some were only partially displayed, some were fully displayed, and Prince painted over some. Prince titled this work "Canal Zone."

Spurred by further inspiration, Prince painted 28 paintings of images taken from the Cariou book. The photos contained in the paintings had been cropped, tinted, reshaped or painted over. Prince admitted using all or a portion of 41 Cariou photos in his paintings.

The Gagosian Gallery showed the Canal Zone and the paintings at its venue in Manhattan, and published a catalogue of many of the paintings, including images of Cariou's photographs displayed in Prince's studio.

Cariou sued Prince and Gagosian for copyright infringement in New York federal court (the case number is 08-cv-11327 and access to filings in this case is available through PACER). In a well-reasoned opinion (March 18, 2011) by Judge Deborah Batts, Prince and Gagosian were found to have infringed the Cariou photos.

A. Photos are Copyrightable.

Surprisingly, Prince argued that the Cariou photographs are not entitled to copyright protection because they lack creativity. He argued that the photos represent factual images of people and landscapes and, as such, cannot be considered creative. But Judge Batts aptly explained that photographs, even of real people and landscapes, are protectable under copyright. This has been the law since the Supreme Court case of Burrow-Giles v. Sarony in 1884.

B. Fair Use.

Prince further defended by arguing that Canal Zone and his paintings represent a fair use of the Cariou photographs. But Judge Batts found no fair use. Indeed, Judge Batts' opinion stands are a detailed primer of fair use analysis under copyright law. The court considered the statutory fair use factors, as described below.

1. Purpose and Character of Prince's Use of the Cariou Photographs: Transformation, Commerciality, and Bad Faith.

Judge Batts determined that the ripping of the photos from the book, and the painting of the photos, did not transform Canal Zone and the paintings into protectable creative work. Prince’s use of Cariou’s photos did not comment on, criticize or otherwise alter the expression or meaning of the photos. In essence, the court determined that what Prince was merely attempting to accomplish was to make, from his perspective, a better or higher artistic use of the photos. To accept this usage as fair use would eliminate any practical boundary to the fair use defense and would find that appropriation art is per se lawful. Judge Batts specifically refused to hold that appropriation art is per se fair use.

To underscore the lack of transformative intent, Prince testified that he did not have any interest in Cariou's original meaning in the photos, and did not have a message he intended to communicate with his art. Prince did not intend to comment on any aspect of the photos, but sought merely to pay homage to other greater painters (including Picasso, Cezanne and Warhol) and create his own beautiful artwork.

Prince explained that he used Cariou’s photos because they represent truth. He employed the Cariou photos in order to arrive at the core truth of the Rastafarians; to communicate core truths of these people and their culture – the very purpose that Cariou had in taking the photos in the first instance. From this admitted lack of transformative motive, the court found that Prince did not intend to comment on the Cariou photos or to transform the meaning or message of these photos. The court determined that any transformation that appears throughout Prince’s paintings is inconsistent and minimal at best.

While not transformative, Prince’s motive was certainly commercial. The court found that Prince's use of the Cariou photos created significant commercial value for Prince. Transactions involving Prince's work were valued in the millions.

Also of importance, the court determined that Prince acted in bad faith. Prince testified that it was not important whether he appropriated from a well-known artist or from the public domain. His staff contacted the publisher of the Cariou book but never inquired about obtaining a license to use the images. The court also determined that the Gagosian Gallery acted in bad faith in that Prince has a reputation as an “habitual user” of other people's copyrighted works, and Gagosian never inquired whether Prince obtained consent to use the Cariou photos.

2. Nature of the Work Copied.

Judge Batts found that the Cariou photographs were highly creative and the very type of work that the copyright law was designed to protect.

3. The Amount and Substantiality of the Portion Copied.

Judge Batts found that in many of his paintings, Prince copied most of the Cariou photos and, in a majority of his paintings, Prince copied the central portrait of the Cariou photos. The court determined that the amount of the Cariou work appropriated by Prince exceeded the amount needed for any slight transformative value.

4. The Effect of the Use on the Market for the Copyrighted Work.

Prince criticized Cariou for not fully exploiting his photos, and argued that Cariou should have been more aggressive in marketing his photographs. But the court observed that fair use looks at the potential for market harm both for the original work and its potential derivatives, regardless of how little the copyrighted work is presently being exploited. The court determined that it was clear that the market for both Cariou's original work and for any derivative work was being usurped by Prince.

C. Gagosian’s Direct and Secondary Liability.

The court next examined the role of the Gagosian Gallery. It determined that Gagosian was liable for direct infringement for copying, selling and displaying infringements of Cariou's work. Gagosian was also secondarily liable for vicarious and contributory infringement. The court noted that Gagosian handled all aspects of the marketing of Prince’s works and had the right and ability to ensure that Prince obtained a license for the Cariou photos. The financial benefit to Gagosian is self evident.

Judge Batts further determined that Gagosian was well-aware of Prince's reputation as an appropriation artist who rejects copyright law, but failed to inquire whether a license was obtained. The court states that Gagosian knew, or should have known, of the existence of the infringement.

D. No Right to Civil Conspiracy Under Copyright Law.

On one portion of Cariou's claim, however, the court found in favor of Prince and Gagosian. Cariou brought a claim against the defendants for conspiracy to violate Cariou's rights under copyright. But the court determined that a civil conspiracy claim is not available under copyright law. Since the copyright law already recognizes vicarious and contributory infringement, the added presence of civil conspiracy does not add anything substantive to copyright protection. The conspiracy claim was dismissed.

E. Remedies: Injunction, Destruction of Prince’s Work, Notice to Owners and Damages.

The court entered a permanent injunction against Prince and Gagosian, ordered that they deliver up for destruction all copies of Prince’s infringing works, and further notify all buyers that the Prince work is infringing and cannot lawfully be displayed. The court also set a date to consider the issue of damages, attorneys' fees and court costs.

In summary, if you operate a gallery, be cautious in dealing with an appropriation artist. And if you are an appropriation artist, strongly consider obtaining a license and do not assume that your work will be treated as fair use.

Is the PTO Too Sensitive Regarding Scandalous Trademarks?

The Lanham Act prohibits registration of scandalous marks. 15 USC §1052(a). But I'm wondering whether the PTO is a bit too touchy and sensitive. Take The Slants, for example. This is an Asian-band based in Portland, Oregon seeking to register its trademark with the PTO. But, to date, it has received two office actions rejecting the application on the grounds the mark is scandalous and disparaging to Asians. See the article in The Oregonian here. For the PTO's take on the matter, search under Ser. No. 77952263 on the PTO's website. The PTO maintains that The Slants disparages the facial features of Asians. The band argues that the mark celebrates the heritage of Asians. The trademark examiner cites to a dictionary definition of slant, plus some public complaints. The Slants counter with positive statements from Asian community members.

The TMEP explains that Congressional legislative history does not define what is "scandalous." Rather, the TMEP provides that a scandalous mark is determined by public standards.

The determination of whether a mark is scandalous must be made in the context of the relevant marketplace for the goods or services identified in the application, and must be ascertained from the standpoint of not necessarily a majority, but a “substantial composite of the general public.” TMEP 203.01.

The trademark examiner may not be on strong ground relying on a dictionary definition of slant, since a dictionary merely provides a word definition and not evidence of general public standards or mores. Similarly, the PTO's reliance on some negative comments is not dispositive and may not carry the PTO's burden of proof.

At the same time, positive statements from some community members may not carry the applicant's burden of proof, either. It appears that a community survey may be needed.

What do others think about this? Is The Slants a scandalous mark? Is it so socially objectionable to the general public to qualify as scandalous? Or, is the mark merely edgy, or boorish, or not offensive at all? Let me hear your comments.

Confidential Shipping Data May Not Be Treated Confidentially At U.S. Ports of Entry

Information that your business believes is confidential, including foreign product sources and distribution, is not necessarily treated confidentially at U.S. ports of entry.

If your business imports or exports products into or out of the United States, then you may be aware of the role that the U.S. Bureau of Customs and Border Protection (CBP) plays in tracking information about foreign shipments. Among its various tasks, CBP is charged with collecting information about shipments passing through U.S. ports of entry. Data viewed by many businesses as confidential, including identification of the shipper, the consignee, the type of shipped goods, the amount of goods in a shipment, plus trademarks and product numbers associated with goods, among other information, is contained on the vessel manifests that accompany each shipment into and out of the U.S.

Many businesses that rely on foreign shipping either to distribute their products overseas or to obtain foreign generated raw materials or finished goods might be surprised to learn how easy it is to obtain foreign shipping information from the CBP. While a business may take significant steps to protect its product sourcing and distribution information from disclosure, including to competitors, the CBP conveniently provides this sensitive shipping information to the media. It is surprising how easy this critical information, perhaps erroneously believed to be confidential, can be obtained by a direct competitor.

The Code of Federal Regulations (at 19 CFR 103.31) explains that the CBP permits accredited representatives of the press to inspect and copy shipping vessel manifests. Information concerning the name and address of the shipper, character of the cargo, number of packages and gross weight of the shipment, the name and address of the consignee, and trademarks and part numbers of the cargo is available for inspection. All of this information is potentially available for copying on inbound manifests. On outbound manifests, the CFR prohibits copying of the consignee’s name, cargo marks and numbers, although examination of this information is permitted.

Shipping information may be obtained from the CBP either from individual vessel manifests or on magnetic tape through CBP’s Automated Manifest System, containing compiled information from all U.S. ports. The tapes provide updated data within twenty four hours and are available from the CBP for a particular date or by ongoing subscription.

One common media acquirer – and publisher – of foreign shipping data is the PIERS unit of The Journal of Commerce (http://www.piers.com/). PIERS claims to collect more than 15 million bill of lading records annually. PIERS explains that it obtains import waterborne data from the CBP, outbound waterborne data from its reporters located at all 88 U.S. ports of entry, and additional shipping data from customs services of certain foreign countries.

There are other publishers of foreign shipping data, including Zepol Corporation (http://www.zepol.com/) and Panjiva, Inc. (http://panjiva.com/). While PIERS, Zepol and Panjiva are fee-based subscription services, they each provide tantalizing information about shipments free of charge. In preparing this article, I used the Panjiva service to look up a certain well-known commercial aircraft manufacturer and obtained a list of its overseas component parts suppliers. I searched under the name of a famous cola and obtained a list of overseas suppliers and distributors. I also conducted a search under my law firm’s name and learned of a recent shipment of European wooden furniture to my firm’s San Francisco office.

For shippers who cower at the prospect of sensitive shipping data published to their competitors, all hope is not lost. The CBP permits shippers to petition the CBP for confidential treatment of certain shipping information. An importer or consignee may request confidential treatment on inward manifests of its name, address, identifying marks and numbers, together with the name and address of its shipper. On outward manifests, confidential treatment can be requested of a shipper’s name and address (note that the consignee’s name, and product marks and numbers, cannot be copied off outbound manifests, but they can be examined by reporters). A request for confidential treatment can cover information contained in both the vessel manifests and the CBP’s magnetic tapes.

The particular form of the request for confidential treatment is not difficult to prepare and submit to the CBP. Specific information to be included in the request, and the procedure for submitting the request, are available in 19 CFR 103.31(d). While a request for confidential treatment, once granted, will not prevent the inspection of vessel manifests by reporters, the approved request will prevent the publication by the press of the confidential information for two years. The request may be renewed for additional two-year intervals.

Resolve now to confirm the foreign sourcing and foreign distribution of your business’ goods. If this information should be treated confidentially, then consider requesting confidential treatment of this information by the CBP.