FU Intellectual Property Discussion

Prior to beginning work on this discussion,

Discuss how you would rule if you were the judge in this case.

Chapter 8
Intellectual Property and Unfair Competition
The term intellectual property has received frequent mention in business circles in recent years,
usually as part of a comment emphasizing the importance of protecting intellectual proerty
rights. The names of key forms of intellectual property and the areas of law that apply to them—
patent, copyright, trademark, and trade secret—are also often heard.
However, many people who find these names familiar lack a clear understanding of the
differences among the forms of intellectual property and the respective legal treatments they
receive. This chapter seeks to provide such an understanding, as well as an awareness of how to
protect intellectual property and how to avoid violating others’ rights in that regard. Study the
chapter and you will understand that patent, copyright, and trademark are not interchangeable
terms, even though they sometimes are used in such an erroneous fashion in media reports and
ordinary conversation.
Let’s begin with a pretest, of sorts. Each of the bullet-pointed items listed below could be the
subject of intellectual property protection, though in some instances, more facts would be
necessary in order to know for certain. Before reading beyond this introductory exercise, jot
down, for each listed item, the name of the potentially relevant area of intellectual property law
(patent, copyright, trademark, or trade secret). For most items, only one area of law would
potentially apply, though in some instances there could be more than one.
Here is the list:
A brand name for a product
A new electronic device
A TV commercial
Computer software
A three-word advertising slogan
The formula for a beverage
A logo regularly used by a business firm
A pharmaceutical product
A highly detailed customer list
A song
The recognizable shape of a beverage bottle
Keep in mind the above list of items as you read the chapter and learn about intellectual property
concepts and principles. Then look back at the list when you complete the chapter and check the
accuracy or inaccuracy of your initial impressions.
page 8-2
LOLearning Objectives
After studying this chapter, you should be able to:
8-1List the categories of potentially patentable subject matter and explain what is contemplated
by each of the requirements of patentability (novelty, nonobviousness, and utility).
8-2Explain the rights a patent owner holds and the length of time those rights exist.
8-3Explain what a patent owner must prove in order to establish that patent infringement
occurred and identify defenses to a patent infringement claim.
8-4List types of works that may carry copyright protection.
8-5Explain how long copyrights last.
8-6Explain the rights copyright owners hold and the relationship of those rights to claims for
copyright infringement.
8-7List the fair use factors and apply them to fact patterns in which the fair use defense to
copyright infringement liability is invoked.
8-8State what a trademark does and provide examples of potentially protectable trademarks.
8-9Identify the key requirement for registration of a mark on the Principal Register
(distinctiveness) and explain the role of secondary meaning when registration of a nondistinctive
mark is sought.
8-10Identify and apply the elements of trademark infringement.
8-11Identify and apply the elements of trademark dilution.
8-12Explain what a trade secret is and what the trade secret owner must prove in order to win a
misappropriation case.
8-13List the elements that a plaintiff must prove in order to win an injurious falsehood case.
8-14Explain the elements of interference with contractual relations.
8-15Identify key issues on which courts focus in false advertising cases brought under Lanham
Act § 43(a).
THIS CHAPTER DISCUSSES LEGAL rules that allow civil recoveries for abuses of free
competition. These abuses are (1) infringement of intellectual property rights protected by patent,
copyright, and trademark law; (2) misappropriation of trade secrets; (3) the intentional torts of
injurious falsehood, interference with contractual relations, and interference with prospective
advantage; and (4) the various forms of unfair competition addressed by § 43(a) of the Lanham
Act. Indeed, the term unfair competition describes the entire chapter. In general, competition is
deemed unfair when (1) it discourages creative endeavor by robbing creative people of the fruits
of their innovations or (2) it renders commercial life too uncivilized for the law to tolerate.
Protection of Intellectual Property
Patents Patent law is exclusively federal in nature. In fact, Congress’s authority to regulate
patents is embedded in the U.S. Constitution under Article 1, Section 8. But while the source of
Congress’s power comes from the Constitution, the U.S.’s actual patent laws come from the
patent statutes, particularly the Patent Act, which has been revised numerous times. As such, a
patent may be viewed as an agreement between an inventor and the federal government. Under
that agreement, the inventor obtains the exclusive right (for a limited time) to exclude others
from making, using, or selling his invention in return for making the invention public by giving
the government certain information about it. The patent holder’s (or patentee’s) monopoly
encourages the creation and disclosure of inventions by stopping third parties from appropriating
them once they become public.
Who is the “inventor,” for purposes of the above discussion? Until a recent change, U.S. law has
historically opted for a literal interpretation with a “first-to-invent” rule— meaning that only the
true inventor would be eligible for a patent on his or her invention. Under that rule, a person who
created an invention after the true inventor had already done so was not entitled to a patent even
if she came up with her invention independently (without knowledge of what the true inventor
had done) and filed a patent application before the true inventor did. The first-to-invent rule put
U.S. law at odds with the patent laws in many nations, which page 8-3contemplate a “first-tofile” approach that would allow the independent developer of an invention to obtain a patent if
she filed a patent application before the earlier inventor did.
In a major change, the American Invents Act of 2011 (AIA) switched the United States from a
first-to-invent system to a first-to-file system. Although the AIA was enacted in 2011, its
provisions took effect in March 2013. Now, one who independently developed an invention after
someone else did is considered an inventor entitled to a U.S. patent if he, she, or it files a patent
application before the prior inventor does. Independent development is critical to this rule. One
who had access to the prior inventor’s work before supposedly inventing largely the same thing
did not independently create and therefore would not be a qualifying inventor for purposes of the
first-to-file rule.
The change from first-to-invent to first-to-file helps eliminate one set of potentially difficult
issues when an inventor seeks patent protection in various nations under the country-by-country
approach discussed in a Global Business Environment box that appears later in the chapter.
What Is Patentable?
LO8-1List the categories of potentially patentable subject matter and explain what is
contemplated by each of the requirements of patentability (novelty, nonobviousness, and utility).
Assuming that the novelty, nonobviousness, and utility requirements discussed later in the
chapter are also satisfied, an inventor may obtain a patent on (1) a process (a mode of treatment
of certain materials to produce a given result), (2) a machine, (3) a manufacture (here, a noun
effectively meaning “product”), (4) a composition of matter (a combination of elements with
qualities not present in the elements taken individually, such as a new chemical compound), or
(5) an improvement of any of the above. Patents issued for any of these inventions are classified
as utility patents. The Patent Act also permits different types of patents to be issued for
ornamental designs for a product (often called design patents) and for plants produced by asexual
reproduction. Our main focus in this chapter will be on utility patents.
The Patent Act section listing the above categories of inventions eligible for utility patents has
long been interpreted by the courts as being subject to a rule that laws of nature and natural
phenomena are ineligible for a patent. Therefore, one who discovers a wild plant whose
existence was previously unknown has made a nice discovery but cannot obtain a patent on it.
Recent years’ advancements and discoveries in medicine and other scientific fields have caused
the U.S. Patent and Trademark Office (PTO) and the courts to struggle with difficult questions of
patentability. For instance, think about a test that correlates the level of metabolites in the blood
of a patient who has a certain disease with a drug dosage likely to be effective for that particular
patient. Is this test a patentable process, or is it nonpatentable because of the law-of-nature
prohibition? (Note, of course, that the drug itself may well have been a patentable composition of
matter at some point, as many pharmaceutical products are.) In Mayo Collaborative Services v.
Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012), the Supreme Court held that the PTO
erred in granting a patent on the drug-dosage correlation test and that the law-of-nature bar
should have controlled. The Court noted that applications of laws of nature may sometimes be
patentable, but that the test at issue was not such an application because it merely contemplated
adding data-gathering and other conventional scientific activity to the metabolite-level
information that was a law of nature.
The Supreme Court again addressed law-of-nature concerns in a 2013 decision. At issue in
Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013), were
patents pertaining to the discovery of the precise location and sequence of certain human genes
that, in the event of mutations in a particular patient, would substantially increase the patient’s
risk of breast or ovarian cancer. The Court held that the patents should not have been granted
because the genetic information and structure were naturally occurring phenomena and hence not
patent-eligible.
Additionally, courts refuse to allow patents for abstract ideas, which can include anything from
how to electronically track utility customers’ energy use to electronic paywalls. However,
distinguishing patentable inventions from abstract ideas has been a frequent challenge for courts.
This is especially true in attempts to patent certain methods of doing business. For example in
Bilski v. Kappos, 561 U.S. 593 (2010), the Supreme Court declined an opportunity to rule that
business methods in general cannot be patented. The Court held that the business method at
issue—a method for hedging risk in certain financial transactions—was merely an abstract idea
and therefore nonpatentable. For discussion of Bilski, see Alice Corporation Ltd. v. CLS Bank
International, which follows shortly. Alice also deals with computer software, another type of
creative activity over which there has been uncertainty concerning patentability. The Court
indicates in Alice that in order to be patentable, software and any business method to which it
relates must go beyond expressing an abstract idea and using mathematical principles. Clearly,
however, a computer program that forms part of an otherwise patentable process may be held
protected and therefore not fair game for others to copy during the patent period.1
Even though an invention fits within one of the categories enumerated earlier, it is not patentable
if it lacks novelty, is obvious, or has no utility.2 The novelty requirement requires the invention
to be new and truly different from what has gone before in the relevant field of inventive activity.
This means an inventor cannot obtain a patent if any of the following occurred before the patent
application for an invention was filed: the invention was already patented; the invention was
already in public use, on sale, or otherwise available to the public; or the invention had already
been described in a printed publication. However, in what may be described as the one-year
window exception to the before-application test, an inventor who makes a public disclosure of
the invention has one year from the making of the disclosure to file a patent application. Public
disclosure is the nonconfidential sharing of information about the invention and can come in
many forms such as “pitching” the invention to investors without a nondisclosure agreement or
selling the invention to the public. The inventor’s filing of a patent application within one year
after his, her, or its public disclosure leaves the inventor still able to pass the novelty requirement
and obtain a patent, but the filing of an application outside the one-year window will be too late.
Just because someone has never filed a patent application for an invention does not make it
patentable. While it may satisfy the novelty requirement, the Patent Act also requires inventions
to be nonobvious. This nonobviousness requirement means that if an invention could have been
easily made by someone skilled in the relevant field and familiar with the subject matter of the
invention, then it is not worthy of a patent. An example of nonobviousness can be seen in the
ZUP, LLC v. Nash Manufacturing, Inc. case. There, the federal circuit court found that a
wakeboard design that allowed a user to pull him or herself up using foot bindings and handles
was obvious in light of prior wakeboard designs.
A final requirement for patentability is utility. The utility requirement requires that the invention
have some qualitative benefit. Therefore, if an invention is illegal or immoral, it cannot be
patented. Similarly, if an invention such as a drug has no demonstrated usefulness, it cannot be
patented.
Alice Corporation Ltd. v. CLS Bank International
134 S. Ct. 2347 (2014)
Alice Corporation is the assignee of several patents that disclose a method for mitigating
settlement risk (the risk that only one party to an agreed-upon financial exchange will satisfy its
obligation). The patent claims are designed to facilitate the exchange of financial obligations
between two parties by using a computer system as a third-party intermediary.
Under the method contemplated by the patents, the intermediary creates “shadow” credit and
debit records (i.e., account ledgers) that mirror the balances in the parties’ real-world accounts at
“exchange institutions” (e.g., banks). The intermediary updates the shadow records in real time
as transactions are entered, allowing only those transactions for which the parties’ updated
shadow records indicate sufficient resources to satisfy their mutual obligations. At the end of the
day, the intermediary instructs the relevant financial institutions to carry out the “permitted”
transactions in accordance with the updated shadow records, thus mitigating the risk that only
one party will perform the agreed-upon exchange. The claimed method requires the use of a
computer and involves a computer-readable medium containing program code for performing the
method of exchanging obligations.
CLS Bank International and an affiliated entity (referred to collectively as CLS Bank) operate a
global network that facilitates currency transactions. CLS Bank sued Alice, seeking a declaration
that Alice’s patents were invalid. A federal district court and the U.S. Court of Appeals for the
Federal Circuit held that the patents were invalid because they applied to merely an abstract idea.
The U.S. Supreme Court granted Alice’s petition for a writ of certiorari. (In the following edited
version of the Supreme Court’s decision, Alice is sometimes referred to as the petitioner.)
Thomas, Justice
The patents at issue in this case disclose a computer-implemented scheme for mitigating
settlement risk by using a third-party intermediary. The question presented is whether these
claims are patent-eligible under 35 U.S.C. § 101, or are instead drawn to a patent-ineligible
abstract idea.
Section 101 of the Patent Act defines the subject matter eligible for patent protection. It provides:
“Whoever invents or discovers any new and useful process, machine, manufacture, or
composition of matter, or any new and useful improvement thereof, may obtain a patent therefor,
subject to the conditions and requirements of this title.” “We have long held that this page 85provision contains an important implicit exception: Laws of nature, natural phenomena, and
abstract ideas are not patentable.” Association for Molecular Pathology v. Myriad Genetics, Inc.,
133 S. Ct. 2107 (2013). We have interpreted § 101 and its predecessors in light of this exception
for more than 150 years.
We have described the concern that drives this exclusionary principle as one of pre-emption. See,
e.g., Bilski v. Kappos, 561 U.S. 593 (2010) (upholding the patent [at issue there] “would preempt use of this approach in all fields, and would effectively grant a monopoly over an abstract
idea”). Laws of nature, natural phenomena, and abstract ideas are “the basic tools of scientific
and technological work.” Myriad, supra. “[M]onopolization of those tools through the grant of a
patent might tend to impede innovation more than it would tend to promote it,” thereby thwarting
the primary object of the patent laws. Mayo Collaborative Services v. Prometheus Laboratories,
Inc., 132 S. Ct. 1289 (2012). See U.S. Const., Art. I, § 8, cl. 8 (Congress “shall have Power . . .
To promote the Progress of Science and useful Arts”). We have “repeatedly emphasized this . . .
concern that patent law not inhibit further discovery by improperly tying up the future use” of
these building blocks of human ingenuity. Mayo, supra.
At the same time, we tread carefully in construing this exclusionary principle lest it swallow all
of patent law. At some level, “all inventions . . . embody, use, reflect, rest upon, or apply laws of
nature, natural phenomena, or abstract ideas.” Id. Thus, an invention is not rendered ineligible
for patent simply because it involves an abstract concept. See Diamond v. Diehr, 450 U.S. 175
(1981). “[A]pplication[s]” of such concepts “”to a new and useful end,’” we have said, remain
eligible for patent protection. Gottschalk v. Benson, 409 U.S. 63 (1972).
In Mayo, we set forth a framework for distinguishing patents that claim laws of nature, natural
phenomena, and abstract ideas from those that claim patent-eligible applications of those
concepts. First, we determine whether the claims at issue are directed to one of those patentineligible concepts. If so, we then ask, “[w]hat else is there in the claims before us?” [S]tep two
of this analysis [is] a search for an “inventive concept”—i.e., an element or combination of
elements that is “sufficient to ensure that the patent in practice amounts to significantly more
than a patent upon the [ineligible concept] itself.” Mayo, supra.
We must first determine whether the claims at issue are directed to a patent-ineligible concept.
We conclude that they are: These claims are drawn to the abstract idea of intermediated
settlement.
The “abstract ideas” category embodies “the longstanding rule that an idea of itself is not
patentable.” Gottschalk v. Benson, supra. In Benson, for example, this Court rejected as
ineligible patent claims involving an algorithm for converting binary-coded decimal numerals
into pure binary form, holding that the claimed patent was “in practical effect . . . a patent on the
algorithm itself.” And in Parker v. Flook, 437 U.S. 584 (1978), we held that a mathematical
formula for computing “alarm limits” in a catalytic conversion process was also a patentineligible abstract idea.
We most recently addressed the category of abstract ideas in Bilski v. Kappos, 561 U.S. 593
(2010). The claims at issue in Bilski described a method for hedging against the financial risk of
price fluctuations. Claim 1 recited a series of steps for hedging risk, including: (1) initiating a
series of financial transactions between providers and consumers of a commodity; (2) identifying
market participants that have a counterrisk for the same commodity; and (3) initiating a series of
transactions between those market participants and the commodity provider to balance the risk
position of the first series of consumer transactions. Claim 4 “pu[t] the concept articulated in
claim 1 into a simple mathematical formula.” The remaining claims were drawn to examples of
hedging in commodities and energy markets.
All members of the Court agreed that the patent at issue in Bilski claimed an “abstract idea.”
Specifically, the claims described “the basic concept of hedging, or protecting against risk.” The
Court explained that “[h]edging is a fundamental economic practice long prevalent in our system
of commerce and taught in any introductory finance class.” The concept of hedging as recited by
the claims in suit was therefore a patent-ineligible “abstract idea, just like the algorithms at issue
in Benson and Flook.”
It follows from our prior cases, and Bilski in particular, that the claims at issue here are directed
to an abstract idea. On their face, the claims before us are drawn to the concept of intermediated
settlement, i.e., the use of a third party to mitigate settlement risk. Like the risk hedging in Bilski,
the concept of intermediated settlement is “a fundamental economic practice long prevalent in
our system of commerce.” Bilski, supra. The use of a third-party intermediary (or “clearing
house”) is also a building block of the modern economy. [Citations omitted.] Thus, intermediated
settlement, like hedging, is an “abstract idea” beyond the scope of § 101.
Because the claims at issue are directed to the abstract idea of intermediated settlement, we turn
to the second step in Mayo’s framework. [W]e must examine the elements of the claim to
determine whether it contains an “”inventive concept’” sufficient to “transform” the claimed
abstract idea into a patent-eligible application. A claim that recites an abstract idea must include
“additional features” to ensure “that the [claim] is more than a drafting effort designed to
monopolize the [abstract idea].” Mayo, supra. Mayo made clear that transformation into a patenteligible application requires “more than simply stat[ing] the [abstract idea] while adding the
words ”apply it.’” Id.
Mayo itself is instructive. The patents at issue in Mayo claimed a method for measuring
metabolites in the bloodstream in order to calibrate the appropriate dosage of thiopurine drugs in
the treatment of autoimmune diseases. The respondent in that case contended that the claimed
method was a patent-eligible application of natural laws that describe the relationship between
the page 8-6concentration of certain metabolites and the likelihood that the drug dosage will be
harmful or ineffective. But methods for determining metabolite levels were already “well known
in the art,” and the process at issue amounted to “nothing significantly more than an instruction
to doctors to apply the applicable laws when treating their patients.” Mayo, supra. “Simply
appending conventional steps, specified at a high level of generality,” was not “enough” to
supply an “”inventive concept.’” Id.
The introduction of a computer into the claims does not alter the analysis at Mayo step two. In
Benson, for example, we considered a patent that claimed an algorithm implemented on a
general-purpose digital computer. Because the algorithm was an abstract idea, the claim had to
supply a new and useful application of the idea in order to be patent-eligible. But the computer
implementation did not supply the necessary inventive concept; the process could be “carried out
in existing computers long in use.” Benson, supra. We accordingly “held that simply
implementing a mathematical principle on a physical machine, namely a computer, [i]s not a
patentable application of that principle.” Mayo, supra (discussing Benson).
Flook is to the same effect. There, we examined a computerized method for using a
mathematical formula to adjust alarm limits for certain operating conditions (e.g., temperature
and pressure) that could signal inefficiency or danger in a catalytic conversion process. Once
again, the formula itself was an abstract idea, and the computer implementation was purely
conventional. Thus, “Flook stands for the proposition that the prohibition against patenting
abstract ideas cannot be circumvented by attempting to limit the use of [the idea] to a particular
technological environment.” Bilski, supra.
In Diehr, 450 U.S. 175, by contrast, we held that a computer-implemented process for curing
rubber was patent-eligible, but not because it involved a computer. The claim employed a wellknown mathematical equation, but it used that equation in a process designed to solve a
technological problem in “conventional industry practice.” The invention in Diehr used a
“thermocouple” to record constant temperature measurements inside the rubber mold—
something “the industry ha[d] not been able to obtain.” The temperature measurements were then
fed into a computer, which repeatedly recalculated the remaining cure time by using the
mathematical equation. These additional steps, we recently explained, “transformed the process
into an inventive application of the formula.” Mayo, supra (discussing Diehr). In other words, the
claims in Diehr were patent-eligible because they improved an existing technological process,
not because they were implemented on a computer.
These cases demonstrate that the mere recitation of a generic computer cannot transform a
patent-ineligible abstract idea into a patent-eligible invention. Stating an abstract idea “while
adding the words ”apply it’” is not enough for patent eligibility. Mayo, supra. Nor is limiting the
use of an abstract idea “to a particular technological environment.” Bilski, supra. Stating an
abstract idea while adding the words “apply it with a computer” simply combines those two
steps, with the same deficient result. Thus, if a patent’s recitation of a computer amounts to a
mere instruction to “implemen[t]” an abstract idea “on . . . a computer,” Mayo, supra, that
addition cannot impart patent eligibility. This conclusion accords with the pre-emption concern
that undergirds our § 101 jurisprudence. Given the ubiquity of computers, wholly generic
computer implementation is not generally the sort of additional feature that provides any
“practical assurance that the process is more than a drafting effort designed to monopolize the
[abstract idea] itself.” Mayo, supra.
In light of the foregoing, the relevant question is whether the claims [in the patents held by
Alice] do more than simply instruct the practitioner to implement the abstract idea of
intermediated settlement on a generic computer. They do not.
Taking the claim elements separately, the function performed by the computer at each step of the
process is “[p]urely conventional.” Mayo, supra. Using a computer to create and maintain
“shadow” accounts amounts to electronic recordkeeping—one of the most basic functions of a
computer. The same is true with respect to the use of a computer to obtain data, adjust account
balances, and issue automated instructions; all of these computer functions are well-understood,
routine, conventional activities previously known to the industry. In short, each step does no
more than require a generic computer to perform generic computer functions.
Considered “as an ordered combination,” the computer components of petitioner’s method
“ad[d] nothing . . . that is not already present when the steps are considered separately.” Id.
Viewed as a whole, petitioner’s method claims simply recite the concept of intermediated
settlement as performed by a generic computer. The method claims do not, for example, purport
to improve the functioning of the computer itself. Nor do they effect an improvement in any
other technology or technical field. Instead, the claims at issue amount to nothing significantly
more than an instruction to apply the abstract idea of intermediated settlement using some
unspecified, generic computer. Under our precedents, that is not enough to transform an abstract
idea into a patent-eligible invention.
Federal Circuit decision affirmed; patents held invalid.
ZUP, LLC v. Nash Manufacturing, Inc.
896 F.3d 1365 (Fed. Cir. 2018)
ZUP, LLC (ZUP) is the inventor of the “ZUP Board,” which it brought to market in 2012. ZUP’s U.S. Patent 8,292,681 (the ’681
Patent) covered the board and method for riding the board, where a rider can use handles and foot bindings to achieve a standing
position while riding.
ZUP’s competitor, Nash Manufacturing, Inc (Nash) brought a similar board to market in 2014, the “Versa Board.” Like the
ZUP Board, the Versa Board has a tow hook on the front section of the board. Unlike the ZUP Board, however, the Versa Board
has several holes on the top surface of the board that allow users to attach handles or foot bindings in various configurations.
Although Nash warns against having the handles attached to the board while standing, a user could theoretically ignore Nash’s
warnings and attach the handles and foot bindings in a configuration that mirrors the configuration of the ZUP Board.
ZUP filed a lawsuit in the U.S. District Court for the Eastern District of Virginia and alleged (1) contributory infringement
of the ’681 patent, (2) induced infringement of the ’681 patent, (3) trade secret misappropriation under the Virginia Uniform Trade
Secrets Act, and (4) breach of contract. Nash counterclaimed, seeking declaratory relief as to noninfringement and invalidity. The
district court granted Nash’s summary judgment motion with respect to invalidity, thus rendering the infringement claims moot.
Specifically, the district court held that certain claims in ZUP’s ’681 patent were obvious in light of a combination of prior patents
involving water boards, and therefore the patent was invalid.
Prost, Chief Judge
The primary issue in this case is whether claims 1 and 9 of the ’681 patent are invalid as obvious under 35 U.S.C. § 103(a). Although
the “ultimate judgment of obviousness is a legal determination,” it is based on underlying factual inquiries, including (1) the scope
and content of the prior art; (2) the differences between the claims and the prior art; (3) the level of ordinary skill in the pertinent
art; and (4) any secondary considerations of non-obviousness. Graham v. John Deere Co., 383 U.S. 1, 17—18 (1966). Likewise,
whether one of skill in the art would have had a motivation to combine pieces of prior art in the way claimed by the patent is also
a factual determination.
Here, there appears to be no dispute with respect to the content of the prior art or the differences between the prior art and
the ’681 patent. And, the parties agree that the relevant level of skill in the art is “a person with at least 3—5 years’ experience in
the design and manufacture of water recreational devices or [who has] a bachelor’s degree in mechanical engineering.” The only
issues raised on appeal pertain to (1) whether a person of ordinary skill in the art would have been motivated to combine the prior
art references in the way claimed in the ’681 patent, and (2) whether the district court properly evaluated ZUP’s evidence of
secondary considerations.
page 8-8
A “motivation to combine may be found explicitly or implicitly in market forces; design incentives; the ”interrelated
teachings of multiple patents’; ”any need or problem known in the field of endeavor at the time of invention and addressed by the
patent’; and the background knowledge, creativity, and common sense of the person of ordinary skill.” Plantronics, Inc. v. Aliph,
Inc., 724 F.3d 1343, 1354 (Fed. Cir. 2013).
The district court first found that all the elements of the claimed invention existed in the prior art. Specifically, the district
court pointed to earlier patents on water recreational boards that included the same elements used in the ’681 patent: a riding board,
a tow hook, handles, foot bindings, and a plurality of rails on the bottom surface of the riding board.
From this, the district court explained that the ’681 patent “identifie[s] known elements in the prior art that aided in rider
stability while engaging a water recreational device and simply combined them in one apparatus and method.” The district court
then concluded that one of ordinary skill in the art would have been motivated to combine the various elements from the prior art
references, noting that such motivation would have stemmed from a desire “to aid in rider stability, to allow a wide variety of users
to enjoy the device, and to aid users in maneuvering between positions on a water board”—all motivations that were “a driving
force throughout the prior art and have been shared by many inventors in the water recreational device industry.”
The record evidence supports the district court’s analysis. Although ZUP contends that a person of skill in the art would have
been focused on achieving rider stability in a predetermined riding position, the evidence contradicts this assertion. Helping riders
switch between riding positions had long been a goal of the prior art. . . .
The prior art accomplished this goal of helping riders maneuver between positions by focusing on rider stability. Indeed,
ZUP even admits that achieving rider stability is an “age-old motivation in this field.” Such stability was enhanced in the prior art
through the same components employed in the ’681 patent: tow hooks, handles, foot bindings, and other similar features.
In the face of the significant evidence presented by Nash regarding the consistent desire for riders to change positions while
riding water recreational boards (and the need to maintain stability while doing so), and given that the elements of the ’681 patent
were used in the prior art for this very purpose, there is no genuine dispute as to the existence of a motivation to combine.
District court decision affirmed; patent held invalid.
Obtaining a Patent The U.S. Patent and Trademark Office handles patent applications.
The application must include both a specification and claims. A specification must
describe the invention with sufficient detail and clarity to enable a person skilled in the
relevant field to make and use the invention.
The claims in a patent application must show how the invention satisfies the various
requirements of patentability—novelty, nonobviousness, and utility. The application
must also contain a drawing when necessary for understanding the subject matter to be
patented. The PTO then determines whether the invention meets the various tests for
patentability. If the application is rejected, the applicant may resubmit it. Once any of
the applicant’s claims have been rejected twice, the applicant may appeal to the Patent
and Trademark Appeals Board (PTAB). Subsequent appeals are also possible, but they
can only be made to the U.S. District Court for the District of Columbia or the U.S.
Court of Appeals for the Federal Circuit.
Ownership and Transfer of Patent Rights
LO8-2
Explain the rights a patent owner holds and the length of time those rights exist.
Until a change in federal law during the mid-1990s, a patent normally gave the patentee
exclusive rights regarding the patented invention for 17 years from the date the patent
was granted. In order to bring the United States into compliance with the General
Agreement on Tariffs and Trade (an international agreement commonly known as
GATT), Congress amended the patent law to provide that the patentee’s exclusive rights
to exclude others from making, using, or selling the patented invention generally exist
until the expiration of 20 years from the date the patent application was filed. This
duration rule applies to utility patents. (A design patent, however, exists for 14 years
from the date it was granted.) A 1999 enactment of Congress allowed for the possible
extension of a patent’s duration if the Patent page 8-9 Office delayed an unreasonably long
time in acting on and approving the patentee’s application.
The patentee may transfer ownership of the patent by making a
written assignment of it to another party. Alternatively, the patentee may retain
ownership and license others to make, use, or sell the patented invention. The terms of
the licensing agreement are normally whatever the parties agree upon, subject to the
rule that even if the agreement does not specify an ending date for the licensee’s duty
to pay royalties to the patent owner, the licensee has no obligation to continue paying
royalties once the 20-year patent period expires.
As the Supreme Court made clear in Quanta Computer v. LG Electronics, 553 U.S.
617 (2008), once the patent owner or licensee sells an item embodying the patented
invention, the sale of the item exhausts the patent owner’s rights regarding that item.
For instance, if A licenses B to produce and sell an item that requires use of A’s patent,
B’s production and sale of the item entitles A, of course, to payment of the licensing
fee called for by the agreement between A and B. However, A is not entitled to enforce
its patent against C in the event that B sells the licensed item to C. B’s sale of the item
to C—a sale contemplated by the license A granted B—exhausted A’s patent rights in
regard to the item purchased by C.
LOG ON
The applications of successful patents are by their nature publicly available. You can easily search complete
applications, including those for international patents, through Google’s Patent search, found at patents.google.com..
Employers and Employees As we have seen, the Patent Act contemplates that the
creator of an invention is entitled to obtain a patent if the necessary requirements are
met. What happens, however, when the creator of the invention is an employee and her
employer seeks rights in the invention? If the invention was developed by an
employee hired to do inventive or creative work, she must use the invention solely for
the employer’s benefit and must assign any patents she obtains to the employer. (Prior
to the America Invents Act (AIA), the patent in such a situation had to be issued in the
name of the employee, who would then be obligated to assign the patent to the
employer. The AIA now would permit the patent to be issued in the name of the
employer in such an instance, if proper procedures are followed.)
If the employee was hired for purposes other than invention or creation, however,
she owns any patent she acquires. Finally, regardless of the purpose for which the
employee was hired, the shop right doctrine gives the employer a nonexclusive,
royalty-free license to use the employee’s invention if it was created on company time
and through the use of company facilities. Any patent the employee might retain is still
effective against parties other than the employer.
Patent Infringement
LO8-3
Explain what a patent owner must prove in order to establish that patent infringement occurred and
identify defenses to a patent infringement claim.
Patent infringement occurs when a defendant, without authorization from the patentee,
usurps the patentee’s rights by making, using, or selling the patented invention. Because
the Patent Act does not have an extraterritorial reach, the allegedly infringing activities
must have occurred within the United States in order for a valid infringement claim to
be triggered. The making of an item that would infringe a U.S. patent if the item were
made within the United States will not constitute infringement if the item is made, for
instance, in China. However, a provision of the Patent Act potentially allows
infringement liability to be imposed on a party who ships “all or a substantial portion”
of the components of the patented invention from the United States with the intended
result that the components are assembled, in another country, to produce an item
covered by the terms of the patent. In Life Technologies Corp. v. Promega Corp., 137
S. Ct. 734 (2017), the Supreme Court held that the provision just noted did not give rise
to liability when the defendant supplied, to an overseas assembler, only a single
component of the plaintiff’s patented, multicomponent invention. The Court reasoned
that if an invention has multiple components, a single component is not a “substantial
portion” for purposes of the statute.
Direct infringement may be established under principles of literal infringement or
under a judicially developed approach known as the doctrine of equivalents.
Infringement is literal in nature when the subject matter made, used, or sold by the
defendant clearly falls within the stated terms of the claims of invention set forth in the
patentee’s application. Under the doctrine of equivalents, a defendant may be held liable
for infringement even though the subject matter he made, used, or sold contained
elements that were not identical to those described in the patentee’s claims of invention,
if the elements of the defendant’s subject matter nonetheless may be seen as equivalent
to those of the patented invention. A traditional formulation of the test posed by the
doctrine of equivalents is whether the alleged infringer’s subject matter performs
substantially the same function as the protected invention in substantially the same way,
in order to obtain the same result. During the 1990s, an alleged infringer sought to convince
the Supreme Court to abolish the doctrine of equivalents on the ground that it effectively allows
patentees to extend the scope of patent protection beyond the stated terms approved by the PTO
when it issued the patent. In Warner- Jenkinson Co. v. Hilton Davis Chemical Co., 520 U.S. 17
(1997), however, the Court rejected this attack on the doctrine. The Court observed that in view of
courts’ longstanding use of the doctrine (use in which Congress seemingly acquiesced by not
legislatively prohibiting it), arguments for abolishing the doctrine would be better addressed to
Congress.
The forms of direct infringement discussed above are regarded as strict liability violations of
the patent owner’s rights because they do not require proof that the defendant intended to infringe
and because a defendant’s good-faith beliefs do not constitute a defense. In addition to the forms
of direct infringement, the Patent Act sets forth further bases on which a defendant may be held
liable for infringement. The statute provides that one who “actively induces” another party’s
infringement of a patent “shall be liable as an infringer.” The Supreme Court has held in recent
decisions that inducement liability cannot exist in the absence of proven direct infringement and
in the absence of proof that the alleged inducer knew of the infringing nature of the induced acts.
In an inducement case, is it a defense to liability if the defendant had a good-faith—though
erroneous—belief that the plaintiff’s patent was invalid? The Supreme Court answered “no”
in Commil USA, LLC v. Cisco Systems, Inc., 135 S. Ct. 1920 (2015).
Another section of the Patent Act provides that one may be held liable for contributory
infringement if he sells a direct patent infringer a component of the patented invention, or
something useful in employing a patented process, and does so with knowledge not only of the
patent’s existence, but also of the component’s or other item’s role in an infringing use. The thing
sold must be a material part of the invention and must not be a staple article of commerce with
some other significant use. For example, suppose that Irving directly infringes Potter’s patent on
a certain electronic device by selling essentially identical electronic devices. If Davis sells Irving
sophisticated circuitry with knowledge of Potter’s patent and of the circuitry’s role in Irving’s
infringing use, Davis may be liable for contributory infringement (assuming that the circuitry is an
important component of the electronic devices at issue and does not have other significant uses).
Presumably the previously noted Commil rule—that a good-faith, but erroneous, belief in the
supposed invalidity of the patent is not a defense to inducement liability—also applies in the
contributory infringement setting.
The basic recovery for patent infringement is damages adequate to compensate for the
infringement plus court costs and interest. The damages cannot be less than a reasonable royalty
for the use made of the invention by the infringer. The court may in its discretion award damages
of up to three times those actually suffered. Injunctive relief is also available, and attorney fees
may be awarded in exceptional cases.
Because injunctions have so frequently been issued against defendants held liable for patent
infringement, some courts had concluded that injunctions were effectively a mandatory remedy.
However, in eBay, Inc. v. MercExchange, LLC, 547 U.S. 388 (2006), the Supreme Court ruled that
courts are not required to issue an injunction against a defendant who committed patent
infringement, if damages would be an adequate remedy and the public interest would not be served
by the granting of an injunction.
Defenses to Patent Infringement
LO8-3
Explain what a patent owner must prove in order to establish that patent infringement occurred and
identify defenses to a patent infringement claim.
Defendants in patent infringement cases cannot expect to avoid liability by pointing to their goodfaith, but erroneous, belief that the plaintiff’s patent was invalid. However, if the defendant
establishes the invalidity of the patent, the defendant has a good defense against liability.
Sometimes the patent’s invalidity stems from the supposed invention’s failure to fall within a
patentable category or from its effectively amounting to a law of nature or an abstract idea. See
the previous discussion of such issues, as well as the Alice decision that appears earlier in the
chapter.
Often, the patent invalidity defense rests on the argument that the invention was not
sufficiently novel or was obvious, and thus did not merit a patent. Despite the fact that the patent
was issued by the PTO, courts have the ability to second-guess the PTO and order the cancellation
of a patent on the ground of invalidity. Challenges to the validity of patents prove to be successful
with reasonable frequency. In Microsoft Corp. v. i4i Ltd. Partnership, 131 S. Ct. 2238 (2011), the
Supreme Court held that a party challenging a patent on the ground of invalidity must prove the
facts underlying the invalidity contention by clear and convincing evidence rather than a mere
preponderance of the evidence.
Furthermore, one may also challenge a patent’s validity without first being sued for
infringement by filing a declaratory judgment action that seeks a court ruling of invalidity.
In appropriate cases, the defendant can assert that the patentee has committed patent misuse.
This is behavior that unjustifiably exploits the patent monopoly. For example, the patentee may
require the purchaser of a license on his patent page 8-11 to buy his unpatented goods, or may tie
the obtaining of a license on one of his patented inventions to the purchase of a license on another.
One who refuses the patentee’s terms and later infringes the patent may attempt to escape liability
by arguing that the patentee misused his monopoly position.
Other Changes Resulting from the America Invents Act Probably the most significant change
brought about by the AIA was the previously discussed switch to the first-to-file approach. Other
AIA provisions that made important changes to the Patent Act included the following:
•
An expansion of the ability of other parties to pursue, within the PTO, post-patent-issuance
review of a patent’s validity.
•
•
Creation of an opportunity for third parties, during the patent application review process, to
provide the PTO with relevant information bearing upon whether the applied-for patent should
be granted.
Expansion of the independent discovery defense to patent infringement so that the defense may
be invoked not only as to business method patents, but also as to patents on processes or
machines that have been used by a business for more than one year prior to another party’s
filing of a patent application.
Although controversy continues over whether business methods should be patentable, the AIA
did not address that set of issues. Also left out of the AIA were measures directly restricting
damage awards in patent infringement cases, despite calls in some quarters for such measures.
Neither did the AIA deal with another subject of controversy in recent years: the emergence of the
so-called patent trolls—parties that acquire patents from others, not for the purpose of producing
the patented items themselves, but solely to exercise licensing leverage against users of the
invention. However, recent Supreme Court decisions appear to contemplate greater ability on the
part of courts to assess attorney fees against an apparent troll that loses an arguably frivolous patent
infringement case.
LOG ON
U.S. government websites contain a wealth of information on patent, copyright, and trademark law and
procedures. For information on patents and trademarks, visit the site of the U.S. Patent and Trademark Office,
at www.uspto.gov. Information on copyrights may be found at www.copyright.gov, the site of the U.S. Copyright
Office.
Copyrights Copyright law gives certain exclusive rights to creators of original works of
authorship. It prevents others from using their work, gives them an incentive to innovate, and
thereby benefits society. Yet copyright law also tries to balance these purposes against the equally
compelling public interest in the free movement of ideas, information, and commerce. It does so
mainly by limiting what a copyright on a work protects and by allowing the fair use defense
described later.
Coverage
LO8-4
List types of works that may carry copyright protection.
The federal Copyright Act protects a wide range of works of authorship, including books,
periodical articles, dramatic and musical compositions, works of art ( “pictorial, graphic, and
sculptural works”), motion pictures and other audiovisual works, sound recordings, lectures,
computer programs, and architectural plans. To merit copyright protection, such works must
be fixed—set out in a tangible medium of expression from which they can be perceived,
reproduced, or communicated. They also must be original (the author’s own work)
and creative (reflecting exercise of the creator’s judgment). Unlike the inventions protected by
patent law, however, copyrightable works need not satisfy a novelty requirement.
Copyright protection does not extend to ideas, facts, procedures, processes, systems, methods
of operation, concepts, principles, or discoveries. Instead, it protects the ways in which such things
are expressed. For instance, an author’s phrasing of a descriptive passage in a novel or the story
line of a play would be expression protected by the copyright on the novel or play, but the ideas,
themes, or messages underlying the work would not be protected. Similarly, the expression in
nonfiction works and compilations of facts would be protected by the copyright on such works,
even though the facts present in them would be fair game for all to use.
Computer programs involve their own special problems. It is fairly well settled that copyright
law protects a program’s object code (program instructions that are machine-readable but not
intelligible to humans) and source code (instructions intelligible to humans). There is less
agreement, however, about the copyrightability of a program’s nonliteral elements such as its
organization, its structure, and its presentation of information on the screen. Most courts that have
considered the issue hold that nonliteral elements may sometimes be protected by copyright law,
but courts differ about the extent of this protection.
Copyright protection does not extend to utilitarian objects, which the Copyright Act refers to
as “useful articles.” However, works of art that are incorporated into useful articles may sometimes
be protected by copyright. In the Star Athletica case, which follows, the Supreme Court addresses
such issues with regard to the design of cheerleading uniforms.
page 8-12
Star Athletica, LLC v. Varsity Brands, Inc.
137 S. Ct. 1002 (2017)
The Copyright Act of 1976, in 17 U.S.C. § 102(a), lists categories of copyrightable “works of authorship.” One category, noted in
§ 102(a)(5), is “pictorial, graphic, and sculptural works.” The following definition of “pictorial, graphic, and sculptural works”
appears in § 101 of the statute:
“Pictorial, graphic, and sculptural works” include two-dimensional and three-dimensional works of fine, graphic, and applied art,
photographs, prints and art reproductions, maps, globes, charts, diagrams, models, and technical drawings, including architectural
plans. Such works shall include works of artistic craftsmanship insofar as their form but not their mechanical or utilitarian aspects
are concerned; the design of a useful article, as defined in this section, shall be considered a pictorial, graphic, or sculptural work
only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately
from, and are capable of existing independently of, the utilitarian aspects of the article.
Section 101 goes on to define “useful article” as “an article having an intrinsic utilitarian function that is not merely to portray
the appearance of the article or to convey information. An article that is normally a part of a useful article is considered a ”useful
article.’”
Varsity Brands, Inc.; Varsity Spirit Corporation; and Varsity Spirit Fashions & Supplies Inc. design, make, and sell
cheerleading uniforms. The Varsity entities have obtained or acquired more than 200 U.S. copyright registrations for twodimensional designs appearing on the surface of their uniforms and other garments. These designs, as described in their
applications for copyright registrations, are primarily “combinations, positionings, and arrangements of elements” that include
“chevrons . . . , lines, curves, stripes, angles, diagonals, inverted [chevrons], coloring, and shapes.”
Star Athletica, LLC (referred to here as Star or as petitioner) also markets and sells cheerleading uniforms. The Varsity
entities sued Star for infringing their copyrights in five designs. The federal district court entered summary judgment for Star,
reasoning that the designs did not qualify as copyrightable pictorial, graphic, or sculptural works under the Copyright Act
provisions quoted above. The district court concluded that the designs served the useful, or “utilitarian,” function of identifying
the garments as cheerleading uniforms and therefore could not satisfy the § 101 requirement of being separable from the uniform’s
utilitarian aspects.
The Varsity entities appealed to the U.S. Court of Appeals for the Sixth Circuit, which reversed the district court’s decision.
In the Sixth Circuit’s view, the designs were separately identifiable from, and capable of existing independently of, the uniform for
purposes of § 101. The U.S. Supreme Court granted Star’s petition for certiorari.
Thomas, Justice
Congress has provided copyright protection for original works of art, but not for industrial designs. The line between art and
industrial design, however, is often difficult to draw. This is particularly true when an industrial design incorporates artistic
elements. Congress has afforded limited protection for these artistic elements by providing that “pictorial, graphic, or sculptural
features” of the “design of a useful article” are eligible for copyright protection as artistic works if those features “can be identified
separately from, and are capable of existing independently of, the utilitarian aspects of the article.” 17 U.S.C. § 101. We granted
certiorari to [identify] the proper test for implementing § 101’s separate identification and independent-existence requirements.
The Copyright Act of 1976 defines copyrightable subject matter as “original works of authorship fixed in any tangible
medium of expression.” 17 U.S.C. § 102(a). “Works of authorship” include “pictorial, graphic, and sculptural works,” § 102(a)(5),
which the statute defines [in § 101] to include “two-dimensional and three-dimensional works of fine, graphic, and applied art,
photographs, prints and art reproductions, maps, globes, charts, diagrams, models, and technical drawings, including architectural
plans.”
The Copyright Act also establishes a special rule for copyrighting a pictorial, graphic, or sculptural work incorporated into a
“useful article,” which is defined as “an article having an intrinsic utilitarian function that is not merely to portray the appearance
of the article or to convey information.” § 101. The statute does not protect useful articles as such. Rather, “the design of a useful
article” is “considered a pictorial, graphical, or sculptural work only if, and only to the extent that, such design incorporates pictorial,
graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian
aspects of the article.” Id.
Courts, the Copyright Office, and commentators have described the analysis undertaken to determine whether a feature can
be separately identified from, and exist independently of, a useful article as “separability.” In this case, our task is to determine
whether the arrangements of lines, chevrons, and colorful shapes appearing on the surface of respondents’ cheerleading page 813 uniforms are eligible for copyright protection as separable features of the design of those cheerleading uniforms.
This is not a free-ranging search for the best copyright policy, but rather “depends solely on statutory
interpretation.” Mazer v. Stein, 347 U.S. 201, 214 (1954). The statute provides that a “pictorial, graphic, or sculptural featur[e]”
incorporated into the “design of a useful article” is eligible for copyright protection if it (1) “can be identified separately from,”
and (2) is “capable of existing independently of, the utilitarian aspects of the article.” § 101. The first requirement—separate
identification—is not onerous. The decisionmaker need only be able to look at the useful article and spot some two- or threedimensional element that appears to have pictorial, graphic, or sculptural qualities.
The independent-existence requirement is ordinarily more difficult to satisfy. The decisionmaker must determine that the
separately identified feature has the capacity to exist apart from the utilitarian aspects of the article. In other words, the feature must
be able to exist as its own pictorial, graphic, or sculptural work as defined in § 101 once it is imagined apart from the useful article.
If the feature is not capable of existing as a pictorial, graphic, or sculptural work once separated from the useful article, then it was
not a pictorial, graphic, or sculptural feature of that article, but rather one of its utilitarian aspects.
Of course, to qualify as a pictorial, graphic, or sculptural work on its own, the feature cannot itself be a useful article or “[a]n
article that is normally a part of a useful article” (which is itself considered a useful article). § 101. Nor could someone claim a
copyright in a useful article merely by creating a replica of that article in some other medium—for example, a cardboard model of
a car. Although the replica could itself be copyrightable, it would not give rise to any rights in the useful article that inspired it.
The statute as a whole confirms our interpretation. The Copyright Act provides “the owner of [a] copyright” with the
“exclusive righ[t] . . . to reproduce the copyrighted work in copies.” § 106(1). The statute clarifies that this right “includes the right
to reproduce the [copyrighted] work in or on any kind of article, whether useful or otherwise.” § 113(a). Section 101 is, in essence,
the mirror image of § 113(a). Whereas § 113(a) protects a work of authorship first fixed in some tangible medium other than a
useful article and subsequently applied to a useful article, § 101 protects art first fixed in the medium of a useful article. The two
provisions make clear that copyright protection extends to pictorial, graphic, and sculptural works regardless of whether they were
created as freestanding art or as features of useful articles. The ultimate separability question, then, is whether the feature for which
copyright protection is claimed would have been eligible for copyright protection as a pictorial, graphic, or sculptural work had it
originally been fixed in some tangible medium other than a useful article before being applied to a useful article.
This interpretation is also consistent with the history of the Copyright Act. In Mazer, a case decided under the 1909 Copyright
Act, the respondents copyrighted a statuette depicting a dancer. The statuette was intended for use as a lamp base, with electric
wiring, sockets and lamp shades attached. Copies of the statuette were sold both as lamp bases and separately as statuettes. The
petitioners copied the statuette and sold lamps with the statuette as the base. They defended against the respondents’ infringement
suit by arguing that the respondents did not have a copyright in a statuette intended for use as a lamp base.
Two of Mazer’s holdings are relevant here. First, the Court held that the respondents owned a copyright in the statuette even
though it was intended for use as a lamp base. 347 U.S. at 214. In doing so, the Court approved the Copyright Office’s regulation
extending copyright protection to works of art that might also serve a useful purpose. Second, the Court held that it was irrelevant
to the copyright inquiry whether the statuette was initially created as a freestanding sculpture or as a lamp base. Id. at 218—
19. Mazer thus interpreted the 1909 Act consistently with the rule discussed above: If a design would have been copyrightable as
a standalone pictorial, graphic, or sculptural work, it is copyrightable if created first as part of a useful article.
Shortly thereafter, the Copyright Office enacted a regulation implementing the holdings of Mazer. The regulation introduced
the modern separability test to copyright law. Congress [later] essentially lifted the language governing protection for the design
of a useful article directly from the post-Mazer regulation and placed it into § 101 of the 1976 Act. Consistent with Mazer, the
approach we outline today interprets § § 101 and 113 in a way that would afford copyright protection to the statuette
in Mazer regardless of whether it was first created as a standalone sculptural work or as the base of the lamp. In sum, a feature of
the design of a useful article is eligible for copyright if, when identified and imagined apart from the useful article, it would qualify
as a pictorial, graphic, or sculptural work either on its own or when fixed in some other tangible medium.
Applying this test to the surface decorations on the cheerleading uniforms is straightforward. First, one can identify the
decorations as features having pictorial, graphic, or sculptural qualities. Second, if the arrangement of colors, shapes, stripes, and
chevrons on the surface of the cheerleading uniforms were separated from the uniform and applied in another medium—for
example, on a painter’s canvas—they would qualify as “two-dimensional . . . works of . . . art” [for purposes of] § 101. And
imaginatively removing the surface decorations from the uniforms and applying them in another medium would not replicate the
uniform itself. Indeed, respondents have applied the designs in this case to other media of expression—different types of clothing—
without replicating the uniform. The decorations are therefore separable from the uniforms and eligible for copyright protection.
(We do not today hold, page 8-14 however, that the surface decorations are copyrightable. [We hold only that they are eligible for
copyright protection.] We express no opinion on whether these works are sufficiently original to qualify for copyright protection,
or on whether any other prerequisite of a valid copyright has been satisfied.)
The dissent argues that the designs are not separable because imaginatively removing them from the uniforms and placing
them in some other medium of expression—a canvas, for example—would create “pictures of cheerleader uniforms.” Petitioner
similarly argues that the decorations cannot be copyrighted because, even when extracted from the useful article, they retain the
outline of a cheerleading uniform.
This is not a bar to copyright. Just as two-dimensional fine art corresponds to the shape of the canvas on which it is painted,
two-dimensional applied art correlates to the contours of the article on which it is applied. A fresco painted on a wall, ceiling panel,
or dome would not lose copyright protection, for example, simply because it was designed to track the dimensions of the surface
on which it was painted. Or consider, for example, a design etched or painted on the surface of a guitar. If that entire design is
imaginatively removed from the guitar’s surface and placed on an album cover, it would still resemble the shape of a guitar. But
the image on the cover does not “replicate” the guitar as a useful article. Rather, the design is a two-dimensional work of art that
corresponds to the shape of the useful article to which it was applied. The statute protects that work of art whether it is first drawn
on the album cover and then applied to the guitar’s surface, or vice versa. Failing to protect that art would create an anomaly: It
would extend protection to two-dimensional designs that cover a part of a useful article but would not protect the same design if it
covered the entire article. The statute does not support that distinction.
To be clear, the only feature of the cheerleading uniform eligible for a copyright in this case is the two-dimensional work of
art fixed in the tangible medium of the uniform fabric. Even if respondents ultimately succeed in establishing a valid copyright in
the surface decorations at issue here, respondents have no right to prohibit any person from manufacturing a cheerleading uniform
of identical shape, cut, and dimensions to the ones on which the decorations in this case appear. They may prohibit only the
reproduction of the surface designs in any tangible medium of expression—a uniform or otherwise.
Petitioner argues that allowing the surface decorations to qualify as a “work of authorship” is inconsistent with congressional
intent to entirely exclude industrial design from copyright. Petitioner notes that Congress refused to pass a provision that would
have provided limited copyright protection for industrial designs, including clothing, when it enacted the 1976 Act, and that it has
enacted laws protecting designs for specific useful articles—semiconductor chips and boat hulls—while declining to enact other
industrial design statutes. From this history of failed legislation, petitioner reasons that Congress intends to channel intellectual
property claims for industrial design into design patents. It therefore urges us to approach this question with a presumption against
copyrightability.
We do not share petitioner’s concern. As an initial matter, “[c]ongressional inaction lacks persuasive significance” in most
circumstances. [Citation omitted.] Moreover, we have long held that design patent and copyright are not mutually
exclusive. See Mazer, 347 U.S. at 217. Congress has provided for limited copyright protection for certain features of industrial
design, and approaching the statute with presumptive hostility toward protection for industrial design would undermine Congress’s
choice. In any event, as explained above, our test does not render the shape, cut, and physical dimensions of the cheerleading
uniforms eligible for copyright protection.
We hold that an artistic feature of the design of a useful article is eligible for copyright protection if the feature (1) can be
perceived as a two- or three-dimensional work of art separate from the useful article and (2) would qualify as a protectable pictorial,
graphic, or sculptural work either on its own or in some other medium if imagined separately from the useful article. Because the
designs on the surface of respondents’ cheerleading uniforms in this case satisfy these requirements, the [designs are eligible for
copyright protection.]
Sixth Circuit’s decision affirmed.
Creation and Notice A copyright comes into existence upon the creation and fixing of a
protected work. Although a copyright owner may register the copyright with the U.S.
Copyright Office, registration is not necessary for the copyright to exist. However,
registration normally is a procedural prerequisite to filing a suit for copyright
infringement. Even though it is not required, copyright owners often provide notice of
the copyright. Federal law authorizes a basic form of notice for use with most
copyrighted works. A book, for example, might include the term Copyright (or the
abbreviation Copr. or the symbol ©), the year of its first publication, and the name of
the copyright owner in a location likely to give reasonable notice to readers.
Duration
LO8-5
Explain how long copyrights last.
The U.S. Constitution’s Copyright and Patents Clause (Article I, § 8) empowers Congress to
“promote the Progress of Science and useful Arts” by enacting copyright and patent laws that
“secur[e] for limited Times to Authors and Inventors the exclusive Right to their respective
Writings and Discoveries.” Thus, copyrights and patents cannot last forever. Even so, the history
of copyright protection in the United States has featured various significant lengthenings of the
“limited time” a copyright endures. When a copyright’s duration ends, the underlying work enters
the public domain and becomes available for any uses other parties wish to make of it. The former
copyright owner, therefore, loses control over the work and forfeits what had been valuable legal
rights.
With the enactment of the Sonny Bono Copyright Term Extension Act (hereinafter CTEA) in
1998, Congress conferred a substantial benefit on copyright owners. The CTEA added 20 years to
the duration of copyrights, not only for works created after the CTEA’s enactment, but also for
any preexisting work that was still under valid copyright protection as of the CTEA’s 1998
effective date. Copyright owners—especially some high-profile corporations whose copyrights on
older works would soon have expired if not for the enactment of the CTEA—mounted a significant
lobbying effort in favor of the term extension provided by the CTEA.
The CTEA’s effect cannot be understood without discussion of the copyright duration rules
that existed immediately before the CTEA’s enactment. One set of rules applied to works created
in 1978 or thereafter; another set applied to pre-1978 works. The copyright on pre-1978 works was
good for a term of 28 years from first publication of the work, plus a renewal term of 47 years.
(The renewal term had been only 28 years until Congress changed the law in 1976 and added 19
more years to the renewal term for any work then under valid copyright protection.) As a result,
75 years of protection was available for pre-1978 works.
For works created in 1978 or thereafter, Congress scrapped the initial-term-plus-renewal-term
approach, opting instead for a normally applicable rule that the copyright lasts for the life of the
author/creator plus 50 years. This basic duration rule did not apply, however, if the copyrighted
work, though created in 1978 or thereafter, was a work-for-hire. (The two types of work-for-hire
will be explained below.) In a work-for-hire situation, the copyright would exist for 75 years from
first publication of the work or 100 years from creation of it, whichever came first.
The CTEA tacked on 20 years to the durations contemplated by the rules discussed in the
preceding two paragraphs. A pre-1978 work that was still under valid copyright protection as of
1998 (when the CTEA took effect) now has a total protection period of 95 years from first
publication—a 28-year initial term plus a renewal term that has been lengthened from 47 to 67
years. The copyright on Disney’s “Steamboat Willie” cartoon—best known for its introduction of
the famous Mickey Mouse character—serves as an example. The protection period for the
Steamboat Willie copyright began to run in the late 1920s, when the cartoon was released and
distributed (i.e., published, for purposes of copyright law). Given the rule that existed immediately
before the CTEA’s enactment (an initial term of 28 years plus a renewal term of 47 years), the
Steamboat Willie copyright would have expired within the first few years of the current century.
The CTEA, however, gave Disney an additional 20 years of rights over the Steamboat Willie
cartoon before it would pass into the public domain.
With the enactment of the CTEA, the basic duration rule for works created in 1978 or
thereafter is now life of the author/creator plus 70 years (up from 50). The duration rule for a workfor-hire is now 95 years from first publication (up from 75) or 120 years from creation (up from
100), whichever comes first.
Critics of the CTEA mounted a constitutional challenge to the statute in Eldred v. Ashcroft, a
case that made its way to the Supreme Court. Those challenging the CTEA argued that the statute
violated the purpose of the “limited Times” provision in the Constitution’s Copyright Clause by
making copyright protection so lengthy in duration. They also contended that the Copyright
Clause’s language empowering Congress to enact copyright laws to “promote the Progress of
Science and useful Arts” served as an incentive-to-create limitation on the exercise of that power,
and that the CTEA—at least insofar as it applied to works already created as of 1998—
unconstitutionally violated the incentive-to-create limitation. In its 2003 decision in Eldred, 537
U.S. 186, the Supreme Court rejected the constitutional challenge to the CTEA. The Court
concluded that the CTEA may have been an unwise enactment as a matter of public policy, but
that it fell within the authority extended to Congress by the Copyright Clause.
Works-for-Hire A work-for-hire exists when (1) an employee, in the course of her regular
employment duties, prepares a copyrightable work or (2) an individual or corporation and an
independent contractor (i.e., nonemployee) enter into a written agreement under which the
independent contractor is to prepare, for the retaining individual page 8-16 or corporation, one of
several types of copyrightable works designated in the Copyright Act. In the first situation, the
employer is legally classified as the work’s author and copyright owner. In the second situation,
the party who (or which) retained the independent contractor is considered the resulting work’s
author and copyright owner.
Ownership Rights
LO8-6
Explain the rights copyright owners hold and the relationship of those rights to claims for copyright
infringement.
A copyright owner has exclusive rights to reproduce the copyrighted work, prepare derivative
works based on it (e.g., a movie version of a novel), and distribute copies of the work by sale or
otherwise. With certain copyrighted works, the copyright owner also obtains the exclusive right to
perform the work or display it publicly.
Copyright ownership initially resides in the creator of the copyrighted work, but the copyright
may be transferred to another party. Also, the owner may individually transfer any of her
ownership rights, or a portion of each, without losing ownership of the remaining rights. Most
transfers of copyright ownership require a writing signed by the owner or his agent. The owner
may also retain ownership while licensing the copyrighted work or a portion of it.
First Sale Doctrine An earlier discussion in this chapter dealt with patent law’s first sale doctrine.
Copyright law recognizes such a doctrine as well. As in patent law, copyright law’s first sale
doctrine extinguishes a copyright owner’s rights regarding a particular copy of the copyrighted
work once that copy has been lawfully sold.
For example, this book is a copyrighted work. Once the publishing company (the copyright
owner in this instance) sells a copy of the book to, say, a bookstore, the copyright owner cannot
control the further distribution of that copy of the book. The bookstore can sell it to you, you can
sell or give that copy to someone else, and so on.
Copies of the textbook in the above example were published in the United States. Does the
first sale doctrine apply when the relevant copies were produced outside the United States?
In Kirtsaeng v. John Wiley & Sons, which follows, the Supreme Court addresses that question.
The Court also considers the relationship between the first sale doctrine and a separate federal law
providing that a copyright owner’s right to distribute copies of the work is violated when copies
of the work are acquired overseas and imported into the United States without the copyright
owner’s authorization.
Kirtsaeng v. John Wiley & Sons, Inc.568 U.S. 519 (2013)
The Copyright Act grants certain “exclusive rights” to copyright owners. See 17 U.S.C. § 106. Among those rights is the right “to
distribute copies” of the copyrighted work. Id. § 106(3). However, the copyright owner’s rights are qualified by limitations set out
in § § 107 through 122, including the “first sale” doctrine. This doctrine, as set forth in § 109(a), provides that “the owner of a
particular copy or phonorecord lawfully made under this title . . . is entitled, without the authority of the copyright owner, to sell
or otherwise dispose of the possession of that copy or phonorecord.”
A separate provision in federal law, § 602(a)(1), states that “[i]mportation into the United States, without the authority of
the owner of copyright under this title, of copies . . . of a work that have been acquired outside the United States is an infringement
of the exclusive right to distribute copies . . . under section 106.” In Quality King Distributors v. L’anza Research Int’l 523 U.S.
135, 145 (1998), the Supreme Court held that § 602(a)(1)’s reference to § 106(3) incorporates the § § 107 through 122 limitations
on copyright owners’ rights, including § 109(a)’s first sale doctrine. The importer in Quality King therefore was held entitled to
invoke the first sale doctrine as a defense. The imported copy at issue in that case was initially manufactured in the United States
and then sent abroad and sold.
John Wiley & Sons Inc. (Wiley), an academic textbook publisher, often assigns to its wholly owned foreign subsidiary (Wiley
Asia) rights to publish, print, and sell foreign editions of Wiley’s English-language textbooks abroad. As a result, there are often
two essentially equivalent versions of a Wiley textbook (with each version being manufactured and sold with Wiley’s permission):
(1) an American version printed and sold in the United States and (2) a foreign version manufactured and sold abroad. The books
produced and sold by Wiley Asia contain notices stating that they are to be sold only in certain designated nations other than the
United States or in certain designated regions of the world outside the United States and that they are not to be taken into the
United States without Wiley’s permission.
Supap Kirtsaeng, a citizen of Thailand, was a student in the United States. He asked friends and family to buy foreign edition
English-language Wiley textbooks in Thai book shops, where they sold at low prices, and to mail them to him in the United States
They did so. Kirtsaeng then sold the books, reimbursed his family and friends, and kept the profits.
page 8-17
Wiley sued Kirtsaeng, claiming that his unauthorized importation and resale of the books infringed Wiley’s § 106(3) right to
distribute and § 602(a)(1)’s import prohibition. Kirtsaeng argued that because the books were “lawfully made” and acquired
legitimately, § 109(a)’s first sale doctrine permitted importation and resale without Wiley’s further permission. A federal district
court held that the first sale doctrine does not apply to copies produced outside the United States and that Kirtsaeng therefore
could not assert this defense. The jury found that Kirtsaeng had willfully infringed Wiley’s copyrights and that Wiley was entitled
to recover statutory damages totaling $600,000. The U.S. Court of Appeals for the Second Circuit affirmed, concluding that §
109(a)’s “lawfully made under this title” language does not sweep in copies of American copyrighted works manufactured abroad.
With other federal courts having ruled differently on whether the first sale doctrine applies only when the copies were produced in
the United States, the Supreme Court agreed to decide the case in order to resolve the split among the lower courts.
Breyer, Justice
[E]ven though § 106(3) forbids distribution of a copy of [a] copyrighted novel [work] without the copyright owner’s permission, §
109(a) adds that, once a copy of [the work] has been lawfully sold (or its ownership otherwise lawfully transferred), the buyer
of that copy and subsequent owners are free to dispose of it as they wish. In copyright jargon, the “first sale” has “exhausted” the
copyright owner’s § 106(3) exclusive distribution right [as to that copy].
What, however, if the copy of [the work] was printed abroad and then initially sold with the copyright owner’s permission?
Does the first sale doctrine still apply? Is the buyer, like the buyer of a domestically manufactured copy, free to bring the copy into
the United States and dispose of it as he or she wishes?
To put the matter technically, an “importation” provision, § 602(a)(1), says that “[i]mportation into the United States, without
the authority of the owner of copyright under this title, of copies . . . of a work that have been acquired outside the United States is
an infringement of the exclusive right to distribute copies . . . under section 106.” Thus § 602(a)(1) makes clear that importing a
copy without permission violates the owner’s exclusive distribution right. But in doing so, § 602(a)(1) refers explicitly to the §
106(3) exclusive distribution right. [Section] 106 is by its terms “[s]ubject to” the various doctrines and principles contained in § §
107 through 122, including § 109(a)’s first sale limitation. Do those same modifications apply—in particular, does the first sale
modification apply—when considering whether § 602(a)(1) prohibits importing a copy?
In Quality King Distributors v. L’anza Research Int’l, 523 U.S. 135, 145 (1998), we held that § 602(a)(1)’s reference to §
106(3)’s exclusive distribution right incorporates the later subsections’ limitations, including, in particular, the first sale doctrine
of § 109. Thus, it might seem that, § 602(a)(1) notwithstanding, one who buys a copy abroad can freely import that copy into the
United States and dispose of it, just as he could had he bought the copy in the United States.
But Quality King considered an instance in which the copy, though purchased abroad, was initially manufactured in the
United States (and then sent abroad and sold). This case is like Quality King but for one important fact. The copies at issue here
were manufactured abroad. That fact is important because § 109(a) says that the first sale doctrine applies to “a particular copy or
phonorecord lawfully made under this title.” And we must decide here whether the five words, “lawfully made under this title,”
make a critical legal difference.
Putting section numbers to the side, we ask whether the first sale doctrine applies to protect a buyer or other lawful owner of
a copy (of a copyrighted work) lawfully manufactured abroad. Can that buyer bring that copy into the United States (and sell it or
give it away) without obtaining permission to do so from the copyright owner? Can, for example, someone who purchases, say at
a used bookstore, a book printed abroad subsequently resell it without the copyright owner’s permission?
We must decide whether the words “lawfully made under this title” restrict the scope of § 109(a)’s first sale doctrine
geographically. The Second Circuit, the Ninth Circuit, Wiley, and the Solicitor General (as amicus) all read those words as
imposing a form of geographical limitation. The Second Circuit held that they limit the first sale doctrine to particular copies “made
in territories in which the Copyright Act is law,” which (the Circuit says) are copies “manufactured domestically,” not “outside of
the United States.” [Citation omitted.] [The Ninth Circuit has reached the same conclusion through similar reasoning. Wiley and
the Solicitor General make essentially the same argument.]
Under [such a] geographical interpretation, § 109(a)’s first sale doctrine would not apply to the Wiley Asia books at issue
here. And, despite an American copyright owner’s permission to make copies abroad, one who buys a copy of any such book or
other copyrighted work—whether at a retail store, over the Internet, or at a library sale—could not resell (or otherwise dispose of)
that particular copy without further permission.
Kirtsaeng, however, reads the words “lawfully made under this title” as imposing a non-geographical limitation. He says that
they mean made “in accordance with” or “in compliance with” the Copyright Act. Brief for Petitioner. [Under that interpretation],
§ 109(a)’s first sale doctrine would apply to copyrighted works as long as their manufacture met the requirements of American
copyright law. In particular, the doctrine would apply where, as here, copies are manufactured abroad with the permission of the
copyright owner. See § 106 (referring to the owner’s right to authorize [the making of copies]).
In our view, § 109(a)’s language, its context, and the common-law history of the first sale doctrine, taken together, favor
a non-geographical interpretation. [Authors’ note: The Court engaged in extensive explanation of the linguistic difficulties and
potentially complex questions that a geographical interpretation would involve and stressed the relative simplicity and easier-toapply nature of the nongeographical interpretation. In addition, the Court explained at length why a legislative history approach
also favored a nongeographic interpretation, chiefly because a previous version of the statutory section outlining the first sale
doctrine did not include a geographic limitation and because the language inserted in the current statutory section did not seem to
add a geographic qualifier. The Court also explained that the common law version of the first sale doctrine (which existed before
the doctrine was placed in statutory form) did not contemplate a geographic limitation. Details of the Court’s statutory language,
legislative history, and common law discussions are omitted.]
We also doubt that Congress would have intended to create the practical copyright-related harms with which a geographical
interpretation would threaten ordinary scholarly, artistic, commercial, and consumer activities. Associations of libraries, used-book
dealers, technology companies, consumer-goods retailers, and museums point to various ways in which a geographical
interpretation would fail to further basic constitutional copyright objectives, in particular “promot[ing] the Progress of Science and
useful Arts.” U.S. Const., Art. I, § 8, cl. 8. The American Library Association tells us that library collections contain at least 200
million books published abroad (presumably, many were first published in one of the nearly 180 copyright-treaty nations and enjoy
American copyright protection under 17 U.S.C. § 104); that many others were first published in the United States but printed abroad
because of lower costs; and that a geographical interpretation will likely require the libraries to obtain permission (or at least create
significant uncertainty) before circulating or otherwise distributing these books. Brief for American Library Association et al.
as Amici Curiae.
How, the American Library Association asks, are the libraries to obtain permission to distribute these millions of books?
How can they find, say, the copyright owner of a foreign book, perhaps written decades ago? They may not know the copyright
holder’s present address. And, even where addresses can be found, the costs of finding them, contacting owners, and negotiating
may be high indeed. Are the libraries to stop circulating or distributing or displaying the millions of books in their collections that
were printed abroad?
Used-book dealers tell us that, from the time when Benjamin Franklin and Thomas Jefferson built commercial and personal
libraries of foreign books, American readers have bought used books published and printed abroad. Brief for Powell’s Books Inc.
et al. as Amici Curiae. The dealers say that they have “operat[ed] . . . for centuries” under the assumption that the “first sale”
doctrine applies. But under a geographical interpretation a contemporary tourist who buys, say, at Shakespeare and Co. (in Paris),
a dozen copies of a foreign book for American friends might find that she had violated the copyright law. The used-book dealers
cannot easily predict what the foreign copyright holder may think about a reader’s effort to sell a used copy of a novel. And they
believe that a geographical interpretation will injure a large portion of the used-book business.
Technology companies tell us that “automobiles, microwaves, calculators, mobile phones, tablets, and personal computers”
contain copyrightable software programs or packaging. Brief for Public Knowledge et al. as Amici Curiae. Many of these items are
made abroad with the American copyright holder’s permission and then sold and imported (with that permission) to the United
States. A geographical interpretation would prevent the resale of, say, a car, without the permission of the holder of each copyright
on each piece of copyrighted automobile software. Yet there is no reason to believe that foreign auto manufacturers regularly obtain
this kind of permission from their software component suppliers. Without that permission, a foreign car owner [presumably] could
not [lawfully] sell his or her used car [if the geographical interpretation were adopted].
Retailers tell us that over $2.3 trillion worth of foreign goods were imported in 2011. Brief for Retail Litigation Center.
American retailers buy many of these goods after a first sale abroad. And, many of these items bear, carry, or contain copyrighted
“packaging, logos, labels, and product inserts and instructions for [the use of] everyday packaged goods from floor cleaners and
health and beauty products to breakfast cereals.” The retailers add that American sales of more traditional copyrighted works, “such
as books, recorded music, motion pictures, and magazines,” likely amount to over $220 billion. A geographical interpretation would
subject many, if not all, of them to the disruptive impact of the threat of infringement suits.
Art museum directors ask us to consider their efforts to display foreign-produced works by, say, Cy Twombly, Rene Magritte,
Henri Matisse, Pablo Picasso, and others. A geographical interpretation, they say, would require the museums to obtain permission
from the copyright owners before they could display the work—even if the copyright owner has already sold or donated the work
to a foreign museum. Brief for Association of Art Museum Directors et al. as Amici Curiae. What are the museums to do, they ask,
if the artist retained the copyright, if the artist cannot be found, or if a group of heirs is arguing about who owns which copyright?
[R]eliance upon the first sale doctrine is deeply embedded in the practices of those, such as booksellers, libraries, museums,
and retailers, who have long relied upon its protection. [W]e believe that the practical problems that Kirtsaeng and his amici have
described are too serious, too extensive, and too likely page 8-19 to come about for us to dismiss them as insignificant—
particularly in light of the ever-growing importance of foreign trade to America. The upshot is that copyright-related consequences
along with language, context, and interpretive canons argue strongly against a geographical interpretation of § 109(a).
Wiley [also argues] that our Quality King decision strongly supports [the] geographical interpretation [that Wiley favors]. [In
that case,] an American copyright owner authorized the first sale and export of hair care products with copyrighted labels made in
the United States, and [an overseas] buyer sought to import them back into the United States without the copyright owner’s
permission. We held that the importation provision [ § 602(a)] did not prohibit sending the products back into the United States
without the copyright owner’s permission. We pointed out that [the importation section made] importation an infringement of the
“exclusive right to distribute . . . under § 106.” We noted that § 109(a)’s first sale doctrine limits the scope of the § 106 exclusive
distribution right. We took as given the fact that the products at issue had at least once been sold. And we held that consequently,
importation of the copyrighted labels did not violate [the importation section].
[Although the products at issue in Quality King had been produced in the United States before being sent overseas and then
reimported, as opposed to being produced overseas, the Quality King holding did not depend on that fact. Any statement seeming
to suggest that production in the United States was a key fact on which that decision depended—or that Quality King was adopting
a geographical limitation on the first-sale doctrine—was dictum and therefore not binding here.]
[The nongeographical interpretation adopted here does not] make § 602(a)(1) pointless. Section 602(a)(1) would still
[generally] forbid importing (without permission . . .) copies lawfully made abroad, for example, where (1) a foreign publisher
operating as the licensee of an American publisher prints copies of a book overseas but, prior to any authorized sale, seeks to send
them to the United States; (2) a foreign printer or other manufacturer (if not the “owner” for purposes of § 109(a), e.g., before an
authorized sale) sought to send copyrighted goods to the United States; (3) a book publisher transports copies to a wholesaler and
the wholesaler (not yet the owner) sends them to the United States; or (4) a foreign film distributor, having leased films for
distribution, or any other licensee, consignee, or bailee sought to send them to the United States. These examples show that §
602(a)(1) retains significance.
For [the foregoing] reasons we conclude that the considerations supporting Kirtsaeng’s nongeographical interpretation of the
words “lawfully made under this title” are the more persuasive.
Second Circuit decision reversed; Kirtsaeng held entitled to invoke first sale doctrine; case remanded for further
proceedings.
Infringement
LO8-6
Explain the rights copyright owners hold and the relationship of those rights to claims for copyright
infringement.
Those who violate any of the copyright owner’s exclusive rights may be liable for
copyright infringement. Infringement is fairly easily proven when direct evidence of
significant copying exists; verbatim copying of protected material is an example.
Usually, however, proof of infringement involves establishing that (1) the defendant
had access to the copyrighted work; (2) the defendant engaged in enough copying—
either deliberately or subconsciously—that the resemblance between the allegedly
infringing work and the copyrighted work does not seem coincidental; and (3) there
is substantial similarity between the two works.
Access may be proven circumstantially, such as by showing that the copyrighted
work was widely circulated. The copying and substantial similarity elements, which
closely relate to each other, necessarily involve discretionary case-by-case
determinations. Of course, the copying and substantial similarity must exist with regard
to the copyrighted work’s protected expression. Copying of general ideas, facts, themes,
and the like (i.e., copying of unprotected matter) is not infringement. The defendant’s
having paraphrased protected expression does not constitute a defense to what
otherwise appears to be infringement. Neither does the defendant’s having credited the
copyrighted work as the source from which the defendant borrowed.
Recent years’ explosion in Internet usage has led to difficult copyright questions.
For instance, unlicensed services such as Napster, Grokster, and StreamCast allowed
easy and free-of-charge access to musical recordings in digital files. Owners of
copyrights on songs and recordings resorted to litigation against such providers on the
theory that they materially contributed to or induced copyright infringement by their
users. In the Grokster decision, the Supreme Court focused on the inducement basis for
imposing liability. For discussion of that case, see the nearby Cyberlaw in Action box.
The basic recovery for copyright infringement is the owner’s actual damages plus
the attributable profits received by the infringer. In lieu of the basic remedy, however,
the plaintiff may usually elect to receive statutory damages. The statutory damages set
by the trial judge or jury must fall within the range of $750 to $30,000 unless the
infringement was willful, in which event the maximum rises to $150,000. These limits
do not apply if the plaintiff elects the basic remedy, however. Injunctive relief and
awards of costs and attorney fees are possible in appropriate cases. Although it seldom
does so, the federal government may pursue a criminal copyright infringement
prosecution if the infringement was willful and for purposes of commercial advant…