Property Law Outline - Intellectual Property

1. Intellectual Property Policy and Rationale
1. Goals of an IP system
1. Encourage innovation/invention
2. Allow for dissemination/use of information that can be built upon
3. Discourage free riders
2. Central question is how to make a property claim to an idea that several people can have.
   

2. 4 Main Types of IP
1. Copyright
1. Granted for unique manner of expression.
2. Life of author + 70 years.
3. Less protection than patents because of the fair use exception.
2. Patent
1. Granted for machines, processes, and substances.
2. 20 years.
3. Trademark
1. Protection for words that become associated with a product.
2. Last indefinitely or until the words become common usage (Band-aid, Kleenex).
4. Trade Secrets
1. Production processes, useful but not patentable.
2. Ex. Coke's recipe.
3. Owner must exercise reasonable care to keep it secret.

3. Protection of Ideas
1. News (Copyright)
1. Court has avoided issue of property in the news by looking at news reporting in a quasi-property way; focuses more on unfair competition.
1. Nature of the right recognized depends upon the type of competition and what the court is trying to achieve.
2. No copyright allowed for news, but unfair competition is not allowed.
3. Ex. INS v. Associated Press (Supp)
1. AP would post hot news on bulletin boards for the public to see. INS would take this hot news and send it to its affiliates in the Western U.S., eliminating AP's advantage of finding the news first.
2. Held that there is a community property aspect to news. Acting as INS does is unfair competition. Not a property right between AP and the public but between AP and INS. While AP might "abandon" the property (news) to the public, it does not do so to INS.

 

2. Ideas Submitted to Companies (Trademark)
1. To find an implied promise of compensation after the submission of an idea, the submitted idea must be both original and novel.
2. Ex. Downey v. General Foods (p.113)
1. P submitted ideas to Jell-O about marketing its product to children under the name Wiggle-E or Mr. Wiggles. Jell-O declined. 3 months later, Jell-O marketed its product as Mr. Wiggles. P sued.
2. Held that a submitted idea must be original and novel for compensation to be inferred. Here, Jell-O established that it had used this idea before and that it was natural for them to use the most obvious characteristic of its product for marketing purposes.
1. Downey could have made a drawing of Mr. Wiggles or could have independently sought trademark to Mr. Wiggles and sold to Jell-O.

4. Copyright
1. Fair Use Exception
1. Four Factor Test from Campbell v. Acuff Rose (Supp) ("Pretty Woman" v. 2 Live Crew)
    
1. "Purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes."
1. Guided by the examples in Sec. 107.
2. Central purpose is to see whether the new work merely "supersedes the objects" of the original creation, or adds something new.
3. Does this new creation have a further purpose or different character than the original with a new meaning or message? Is it transformative?
1. Parody has an obvious claim to transformative value.
1. For purposes of copyright law, the heart of the parody's value is that it comments on the old work.
2. Shouldn't be using the original work just to gain attention or to avoid having to come up with something new.
3. Needs to mimic an original to make its point (unlike satire which can stand on its own two feet).
    
2. "Nature of the copyrighted work"
1. "Value of the material used."
2. Calls for recognition that some works are closer to the core of intended copyright protection than others, and thus fair use is more difficult to establish.
1. Factual v. creative works.

 

3. Are "the amount and substantiality of the portion used in relation to the copyrighted work as a whole" reasonable in relation to the purpose of the copying?
1. Quality of what was taken from the original, rather than just quantity, is considered, as well as whether a substantial portion was copied verbatim.
2. For parodies, consider the persuasiveness of a parodist's justification for the particular copying done.
3. Degree to which it might serve as a market substitute for the original.

 

4. "The effect of the use upon the potential market for or value of the copyrighted work."
1. Extent of market harm
2. "Whether unrestricted and widespread conduct of the sort engaged in by the D would result in a substantially adverse impact on the potential market" for the original (aggregate).
3. Must take into account harm to original but also harm to the market for derivative works.
4. Take into account transformative use vs. duplication.
1. Ex: A parody and the original use usually serve different market functions.
2. Also, if a parody's legitimate purpose is to criticize the original, market harm might result, but this is fair market harm (cf. Keeble).
    

2. See Campbell v. Acuff-Rose (focus on parody) and Perfect 10 v. Google (focus on transformative use)

2. Photocopying
1. Must find balance - if too strong copyright protection, might stifle creation of new art/technology; if too weak, no incentive to create.
2. Ex. Williams & Wilkins v. U.S. (p.509)
1. U.S. photocopying consortium sends out copies to scientists who request them from P's journals. U.S. has 2 subscriptions to each journal. U.S. claims fair use.
2. Held that fair use covers the U.S.'s photocopying.
1. Purpose - not for profit, for public good
2. Nature - not for profit, factual information (further from heart of copyright)
3. Substantiality - just articles, not the entire journal
4. Market effect - journals' profits have increased quicker than nations GNP
3. Science would be harmed if fair use not allowed.
4. Legislature should come up with a solution.
3. Ex. American Geophysical v. Texaco (p.521)
1. Texaco had very few subscriptions and photocopied articles for its scientists. Texaco claimed fair use.
2. Held that fair use did not cover Texaco's photocopying.
1. Purpose - for profit, not transformative (might have been if copied on metal)
2. Nature - factual work, but copyright protection necessary for dissemination of this type of work.
3. Substantiality - entire articles
4. Market effect - huge effect on market
3. Reasons for disparity from Williams &Wilkins…
1. Congress responded and said that photocopying falls within copyright statute.
2. CCC was created (AAS - blanket license and TRS - micro payments) as a low-cost, private-ordering solution to the problems of Williams & Wilkins.

5. Patents
1. A patent gives only the right to exclude, no positive rights.
1. 5 Requirements
1. Patentable subject matter
2. Utility
3. Novelty
4. Non-obviousness
5. Adequacy of disclosure
2. General quid pro quo requirement - inventor gets the benefit of exclusivity, public gets the benefit of the invention.
    
2. Patent Statute Sections
1. Section 101 covers patentable subject matter; must have practical utility and must actually work as described.
2. Section 102 says that patents cannot be given unless the subject matter is novel; no patents can be given for things that are already in the public domain
1. 102(b) - inventor must file for patent before 1 year passes after certain triggering events or inventor is statutorily barred. (court views 1 year as grace period, unwilling to extend)
2. 102(e) - if a patent application is being reviewed by USPTO, then a new patent that is filed on the same subject matter is barred (from Alexander Milburn case)
3. 102(f) - verbal communications count as prior art (if pharma company sends to NIH for testing before patent application, NIH scientist cannot file for patent)
4. 102(g) - U.S. is a first to invent jurisdiction, not a first to file jurisdiction
3. Section 103 creates the non-obviousness standard; more than a minor change in previous technology is required for a patent.
1. Tension between USPTO and courts on non-obviousness. Courts want PTO to do a better job of screening and requiring more detail.

3. Method Patent Broadness Concerns
1. Courts are wary to grant patents that might block off entire areas of scientific inquiry.
2. Thus, it is required that the product of the patent have some known, useful purpose.
1. Ex. Brenner v. Manson (Supp)
1. Inventor filed patent for process that created a steroid that was a homologue to one being studied for effectiveness in cancer treatment.
2. Held that utility prong was not satisfied. A process patent in the chemical field, without a certain degree of specific utility, creates a monopoly where the boundaries of such monopoly are unknown at the time. Could block off useful scientific inquiry.
3. Laws of nature, natural phenomena, and abstract ideas are excluded from patent protection. These are the buildings blocks to invention, not patentable material.
1. Ex. LabCorp v. Metabolite (Supp)
1. Scientists sought a process patent for the process by which a doctor used an already patented test, looked at the result, and correlated the result to some disease state.
2. Court denied cert. Dissent from dismissal said that patent should have been denied. It only patents the process by which a doctor obtains tests results and thinks about them. Just natural phenomena, correlating a number from a test to something known about the human body because of known chemistry.
3. However, if court had denied the patent, would have had huge implications for biotech industry. May have lead to invalidation of all drug patents since the "inventors merely discovered that certain chemicals interact with the human body in ways directed by chemistry."

6. Personhood Theory and Intellectual Property
1. The Personhood Theory
1. Certain things are so closely related to a person or to their emotional/psychological well-being that they virtually become part of that person.
2. Thus, a person should have broad property rights over such things.
3. Since personhood deals with psyche and indivisible objects, money damages might not apply, injunctive relief usually sought.
    
2. Property Rights Over One's Body
1. Courts/legislatures worry about allowing property rights for the body and body parts since this could lead to markets for organs. (market-inalienable: can be given away but not sold)
2. Ex. Moore v. Regents of the University of California (Supp)
1. Moore brought conversion claim after doctor used his spleen cells to patent a cell line based on his body chemistry.
2. Court held that no conversion claim existed. First, the patented cell lines were distinctive from Moore's original cells (accession). Second, the cells were abandoned property (assumption from CA statute). Third, would discourage medical research.
1. Paying Moore might look like buying organs (market-inalienable goods).
    
3. Right to Publicity
1. Issue is usually whether the right of publicity descends to heirs.
1. Labor theory cuts both ways; heirs put in no labor, but original person labored to makes lives of heirs better off.
2. Descends via statute in some states (TN, CA, NY).
1. However, exceptions for parody, artistic interpretation (fair use-ish stuff)
2. Ex. Elvis Presley Int'l Mem. Foundation v. Elvis Presley Enterprises (Supp)
1. Held that the right to publicity does descend to heirs. Policy reasons behind right to publicity descending…
1. If a celebrity's right of publicity is treated as an intangible property right in life, it is no less a property right at death.
2. Recognizes that there should not be unjust enrichment from another's work.
3. Consistent with a celebrity's expectation that he is creating a valuable capital asset that will benefit his heirs (Labor theory).
4. Recognizes the value of the contract rights of persons who have acquired the right to use a celebrity's name and likeness during the celebrity's life. Those contracts would be valueless once the celebrity died if others were allowed to freely use the name and likeness of the celebrity.
5. Furthers the public's interest in being free from deception and false claims regarding celebrity sponsorship.
6. Consistent with the policy against unfair competition through the use of deceptively similar corporate names.