Miller_Intellectual

INTELLECTUAL PROPERTY LAW: CASES & MATERIALS Lydia Pallas Loren Henry J. Casey Professor of Law Lewis & Clark Law School

Joseph Scott Miller Professor of Law University of Georgia Law School

Ver. 4.1 © 2016 Lydia Pallas Loren and Joseph Scott Miller

www. semaphorepress.com

For Mom and Dad, who taught me to think outside the box.

-LPL

For Harlan and Ginger, who take me on their own survey.

-JSM

Intellectual Property Law: Cases & Materials Lydia Pallas Loren and Joseph Scott Miller Copyright and Your Rights The authors retain the copyright in this book. By downloading a copy of this book from the Semaphore Press website, you have made an authorized copy of the book from the website for your personal use. If you lose it, or your computer crashes or is stolen, don’t worry. Come back to the Semaphore Press website and download a replacement copy, and don’t worry about having to pay again. Just to be clear, Semaphore Press and the Authors of this casebook are not granting you permission to reproduce the material and books available on our website except to the extent needed for your personal use. We are not granting you permission to distribute copies either.

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LOREN & MILLER, INTELLECTUAL PROPERTY LAW

Table of Contents Chapter 1: Introduction .......................................................................................... 1 A. Intellectual Property Law’s Basic Policies ........................................................ 1 B. Overview of Intellectual Property Rights......................................................... 4 C. An Example of Intellectual Property Protection: Misappropriation ............... 6 International News Service v. Associated Press.......................................... 6 Barclays Capital Inc. v. Theflyonthewall.Com, Inc. ................................... 15 Chapter 2: Trade Secret Law .............................................................................. 29 I. Defining a Trade Secret ...................................................................................... 29 A. When is a Secret a Secret? .............................................................................. 31 Amoco Production Co. v. Laird ................................................................... 31 CDI Energy Services, Inc. v. West River Pumps, Inc. ............................... 38 Pamela Samuelson & Suzanne Scotchmer, The Law and Economics of Reverse Engineering, 111 YALE L.J. 1575, 1582-84 (2002) ............................................................. 41 Cemen Tech Inc. v. Three D Industries, L.L.C............................................ 42 DVD Copy Control Ass’n v. Bunner............................................................ 46 B. Reasonable Efforts to Maintain Secrecy ........................................................ 52 Rockwell Graphic Systems, Inc. v. DEV Industries, Inc. ........................... 52 II. Misappropriation & Remedies .......................................................................... 59 A. Defining “Misappropriation” ......................................................................... 59 E.I. duPont deNemours & Co. v. Christopher ............................................ 60 Silvaco Data Sys. v. Intel Corp. .................................................................. 64 B. Basic Remedies for Trade Secret Misappropriation ...................................... 70 1. Injunctive Relief .......................................................................................... 70 2. Damages....................................................................................................... 71 3. Criminal Trade Secret Theft ....................................................................... 72 III. Trade Secrets and the Departing Employee .................................................... 73 A. Basic Cases ..................................................................................................... 74 Omega Optical, Inc. v. Chroma Technology Corp. .................................... 74 Stampede Tool Warehouse, Inc. v. May ..................................................... 77 B. The Inevitable Disclosure Doctrine ................................................................81 Michael J. Garrison & John T. Wendt, The Evolving Law of Employee Noncompete Agreements, 45 AM. BUS. L.J. 107, 149-52 (2008) ............................................................81 PepsiCo, Inc. v. Redmond ........................................................................... 82 Bayer Corp. v. Roche Molecular Systems .................................................. 89

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C. Noncompetition Agreements ......................................................................... 94 Ronald J. Gilson, The Legal Infrastructure of High Technology Industrial Districts, 74 N.Y.U. L. REV. 575, 602-03 (1999) ........................ 94 William M. Landes & Richard A. Posner, The Economic Structure of Intellectual Property Law 365-366 (2003) ........................... 94 Office of Economic Policy, U.S. Dept. of the Treasury, Non-compete Contracts: Economic Effects and Policy Implications 25-26 (March 2016) ................................................... 95 Amazon.com Inc. v. Powers ....................................................................... 95 Statutory Restrictions on Non-Competition Agreements: The Oregon Example ................................................................................. 107 D. Patent Law: A Complement to Trade Secret Law? ...................................... 108 William M. Landes & Richard A. Posner, The Economic Structure of Intellectual Property Law 328-329 (2003) ........................ 108 Chapter 3: Patent Law.......................................................................................... 111 I. The Patent System ............................................................................................. 111 A. Theoretical Underpinnings ............................................................................ 111 B. Obtaining a U.S. Patent ................................................................................ 113 C. Rights and Remedies .................................................................................... 115 1. Damages ..................................................................................................... 115 a. Marking and the Statute of Limitations ............................................... 115 b. Adequate Compensation........................................................................ 116 c. Treble Damages and Attorney Fees ...................................................... 117 2. Injunctions ................................................................................................. 118 D. Reading a U.S. Patent Document ................................................................. 118 OXO Angled Measuring Cup ............................................................................. 125 II. Claim Construction and Definiteness .............................................................. 125 A. An Introduction to Claim Construction ....................................................... 125 1. Assigning the Construction Task ............................................................... 125 Teva Pharma. USA, Inc. v. Sandoz, Inc. ................................................... 126 2. Claim Construction Methods ..................................................................... 132 B. Contemporary Cases ..................................................................................... 135 Teashot.LLC v. Green Mountain Coffee Roasters, Inc. ............................ 135 Nautilus, Inc. v. Biosig Instruments, Inc. ................................................. 137 Pacing Techs., LLC v. Garmin Int’l, Inc. ................................................... 143 III. An Adequate Written Disclosure ...................................................................148 A. The Enablement Requirement......................................................................148 B. The Written Description Requirement ......................................................... 149 LOREN & MILLER, INTELLECTUAL PROPERTY LAW

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C. The Best Mode Requirement ........................................................................150 IV. Patentable Subject Matter and Utility ............................................................150 A. Patentable Subject Matter ............................................................................150 Mayo Collaborative Servs. v. Prometheus Labs., Inc. .............................. 154 Alice Corp. v. CLS Bank Int’l ..................................................................... 165 B. Utility ............................................................................................................ 172 Juicy Whip, Inc. v. Orange Bang, Inc. ...................................................... 175 V. Novelty & Statutory Bars .................................................................................. 178 A. An Introduction to the Old § 102 (1952 Act) ................................................ 179 B. Anticipation’s Identity & Enablement Requirements ..................................182 Titanium Metals Corp. of America v. Banner ..........................................183 C. Categories of “Prior Art” .............................................................................. 188 1. What Is a “Printed Publication”? .............................................................. 188 In re Klopfenstein ..................................................................................... 188 2. What Is “In Public Use”? ........................................................................... 193 Beachcombers v. Wildewood Creative Prods. .......................................... 194 W.L. Gore & Assocs., Inc. v. Garlock, Inc. ................................................. 196 3. When Is an Invention “On Sale”? ............................................................. 200 Pfaff v. Wells Electronics, Inc. .................................................................. 200 4. The Exception for “Experimental Use”..................................................... 204 Clock Spring, L.P. v. Wrapmaster, Inc. ................................................... 205 D. Novelty Under the New § 102 (AIA) ............................................................ 210 VI. The Nonobviousness Requirement ................................................................. 212 A. An Introduction to § 103 ............................................................................... 213 B. Contemporary Nonobviousness Analysis ..................................................... 219 KSR International Co. v. Teleflex Inc. ....................................................... 219 St. Jude Medical, Inc. v. Access Closure, Inc............................................ 230 C. What Prior Art is Pertinent Under § 103? ................................................... 233 In re Clay .................................................................................................. 233 VII. Infringement ................................................................................................ 237 A. Ownership & Standing ................................................................................. 237 B. Direct and Indirect Infringement ................................................................ 238 C. Literal Infringement .................................................................................... 240 Nassau Precision Casting Co. v. Acushnet Co.......................................... 240 D. The Doctrine of Equivalents ........................................................................ 246 1. The Basics .................................................................................................. 246 LOREN & MILLER, INTELLECTUAL PROPERTY LAW

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2. Contemporary Equivalents Analysis ........................................................ 247 a. Prosecution History Estoppel............................................................... 248 Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. ........................... 248 b. The All Limitations Rule ....................................................................... 256 Cadence Pharm. Inc. v. Exela PharmSci Inc.............................................257 c. The Disclosure-Dedication Rule ............................................................ 261 E. Additional Defenses ..................................................................................... 262 VIII. Design Patents ............................................................................................. 263 A. Overview of Design Patents ......................................................................... 264 B. Ornamentality—Out of Sight, Out of Protection? ........................................ 265 In re Stevens ............................................................................................. 265 In re Webb ................................................................................................ 266 C. Functionality—Separating Ornamentality From Utility .............................. 269 Rosco, Inc. v. Mirror Lite Co. ................................................................... 269 PHG Techs. v. St. John Cos. ....................................................................... 271 D. Infringement—Reviving the Ordinary Observer Test ..................................275 Egyptian Goddess, Inc. v. Swisa, Inc. .......................................................275 E. Anticipation & Obviousness ......................................................................... 282 International Seaway Trading Corp. v. Walgreens Corp. ...................... 282 MRC Innovations, Inc. v. Hunter Mfg. .................................................... 288 Chapter 4: Copyright Law ................................................................................. 297 I. Theory and Copyrightable Subject Matter ....................................................... 297 A. Theoretical Underpinnings .......................................................................... 297 B. Copyrightable Subject Matter ...................................................................... 299 1. Fixation ..................................................................................................... 299 2. Originality ................................................................................................. 300 Bleistein v. Donaldson Lithographing Co., .............................................. 300 Feist Publications, Inc. v. Rural Telephone Service Co. .......................... 303 II. The Boundaries of Copyrightable Subject Matter ............................................ 314 A. The Idea-Expression Distinction .................................................................. 314 Baker v. Selden .......................................................................................... 314 B. Useful Articles ............................................................................................... 319 Brandir International, Inc. v. Cascade Pacific Lumber Co. ..................... 321 C. Computer Software ...................................................................................... 329 Computer Programs and the Merger Doctrine ........................................ 331 LOREN & MILLER, INTELLECTUAL PROPERTY LAW

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III. Owning and Maintaining a Copyright ........................................................... 337 A. Authors as Initial Owners of Copyright ....................................................... 337 1. Authors and Joint Authors ........................................................................ 337 2. Works Made for Hire ................................................................................ 340 Community for Creative Nonviolence v. Reid ......................................... 340 B. Formalities ................................................................................................... 348 1. Registration & Deposit .............................................................................. 348 2. Notice ........................................................................................................ 349 3. Transfers of Copyright Ownership and the Potential for Recording Transfers .......................................................... 350 C. Duration ....................................................................................................... 350 D. Renewals and Terminations of Transfers.................................................... 353 IV. The Rights of a Copyright Owner ................................................................... 355 A. Establishing a Prima Facie Case of Infringement ....................................... 355 1. Copying-in-fact.......................................................................................... 356 2. Improper Appropriation and the “Substantially Similar” Copy ............... 358 Export Ventures, Inc. v. Einstein Moomjy, Inc., ...................................... 359 B. The § 106 Rights........................................................................................... 367 1. The Reproduction Right ............................................................................ 367 2. The Right to Prepare Derivative Works .................................................... 369 3. The Right to Distribute Copies .................................................................. 371 4. Public Performance and Public Display ................................................... 373 C. Contemporary Cases .....................................................................................375 Perfect 10, Inc. v. Amazon.com Inc. ..........................................................375 American Broadcasting Cos. v. Aereo, Inc. ..............................................381 D. The § 106A Rights ......................................................................................... 391 V. Fair Use—The “Breathing Space Within the Confines of Copyright” .............. 392 A. Parody as a Potential Fair Use ..................................................................... 393 Campbell v. Acuff-Rose Music, Inc........................................................... 393 B. Transformative Uses .................................................................................... 407 Perfect 10, Inc. v. Amazon, Inc. ................................................................ 407 Authors Guild, Inc. v. HathiTrust ............................................................. 411 C. Fair Use of Computer Software: Reverse Engineering ................................. 417 D. Personal Use .................................................................................................418 Sony Corp. v. Universal City Studios, Inc. ................................................418 Fair Use and Market Failure ................................................................... 426 LOREN & MILLER, INTELLECTUAL PROPERTY LAW

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E. An Alternative Means of Creating “Breathing Space”: Open Source and Creative Commons Licenses .......................................... 427 VI. Secondary Liability and Para-Copyright ........................................................ 428 A. Secondary Liability ...................................................................................... 429 1. Contributory and Vicarious Infringement ................................................ 429 Fonovisa, Inc. v. Cherry Auction, Inc. ..................................................... 429 2. Secondary Liability for Device Manufacturers ......................................... 434 Sony Corp. v. Universal City Studios, Inc. ............................................... 434 3. Inducing Infringement ............................................................................. 437 MGM Studios Inc. v. Grokster Ltd., ......................................................... 438 B. The Line Between Direct and Secondary Liability....................................... 448 American Broadcasting Cos. v. Aereo, Inc. ............................................. 449 C. On-line Service Provider Liability: Notice and Take-Down ......................... 451 D. Digital Rights Management (DRM) and Para-Copyright............................ 454 VII. Civil Remedies & Criminal Enforcement ...................................................... 456 A. Injunctions ................................................................................................... 456 B. Damages ........................................................................................................457 1. Actual Damages ..........................................................................................457 2. Statutory Damages.................................................................................... 458 3. Attorney’s Fees.......................................................................................... 459 C. Criminal Infringement ................................................................................. 460 Chapter 5: Trademark Law ............................................................................... 463 I. Trademark Protection....................................................................................... 463 A. Theoretical Underpinnings .......................................................................... 464 B. What Can Be a Trademark? ......................................................................... 465 E.T. Browne Drug Co. v. Cococare Products, Inc. ................................... 466 C. Introduction to “Likelihood of Confusion” ...................................................477 Top Tobacco, L.P v. North Atlantic Operating Company, Inc ................ 477 D. Federal Registration .................................................................................... 480 1. Registrable and Unregistrable Marks ........................................................481 2. The Registration Process .......................................................................... 484 3. Notice, Renewal, and Duration of a Registered Mark .............................. 485 4. Incontestability ......................................................................................... 485 5. Cancellation of a Registered Mark ............................................................ 486 6. Certification Marks and Collective Marks ................................................ 486 LOREN & MILLER, INTELLECTUAL PROPERTY LAW

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II. “Device” Marks and Trade Dress Protection ................................................... 487 A. Color as a Trademark ................................................................................... 487 Qualitex Co. v. Jacobson Prods. Co. ......................................................... 487 B. Trade Dress Protection ................................................................................ 493 Two Pesos, Inc. v. Taco Cabana, Inc. ....................................................... 493 Wal-Mart Stores, Inc. v. Samara Brothers, Inc. ..................................... 500 C. Functionality ................................................................................................ 505 TrafFix Devices, Inc. v. Marketing Displays, Inc. ................................... 506 III. Trademark Infringement ................................................................................ 512 A. Registered Mark Infringement ..................................................................... 513 Kellogg Co. v. Toucan Golf, Inc. ................................................................ 513 Experience Hendrix, LLC. v. Electric Hendrix, LLC. ................................ 519 B. Claims Under § 43(a) ................................................................................... 529 King of the Mountain Sports, Inc. v. Chrysler Corp. ............................... 530 C. Confusion as to “Origin” .............................................................................. 535 Dastar Corp. v. Twentieth Century Fox Film Corp. ................................ 535 D. Initial Interest Confusion ............................................................................ 540 E. Cybersquatting .............................................................................................. 541 Carnivale v. Staub Design LLC ................................................................ 542 Carnivale v. Staub Design LLC ................................................................ 543 Carnivale v. Staub Design LLC ................................................................ 545 IV. Trademark Dilution.........................................................................................547 A. Likelihood of Dilution .................................................................................. 548 Starbucks Corp. v. Wolfe’s Borough Coffee, Inc. ..................................... 548 Starbucks Corp. v. Wolfe’s Borough Coffee, Inc. ......................................555 B. The Fame Requirement ................................................................................ 561 Board of Regents, University of Texas v. KST Elec. ................................ 562 V. Comparative Advertising, Fair Use and Other Defenses ................................. 570 A. Advertising and Comparative Advertising................................................... 570 Smith v. Chanel, Inc. ................................................................................. 570 B. Descriptive Fair Use ...................................................................................... 575 KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc. .................... 575 C. Nominative / Noncommercial Fair Use........................................................579 Century 21 Real Estate Corp. v. Lendingtree, Inc. ...................................579 D. Fair Use and Parody .................................................................................... 589 Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC ........................ 589 LOREN & MILLER, INTELLECTUAL PROPERTY LAW

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VI. Remedies for Infringement & Counterfeiting ................................................ 601 A. Remedies ...................................................................................................... 601 1. Monetary Awards ...................................................................................... 601 2. Injunctions & Destruction Orders ............................................................ 603 3. Laches ....................................................................................................... 603 B. Trademark Counterfeiting ........................................................................... 604 Chapter 6: IP Limits ........................................................................................... 607 I. Structural Limits: Preemption.......................................................................... 607 A. An Early Benchmark .................................................................................... 610 Kellogg Co. v. National Biscuit Co. ........................................................... 611 B. Contemporary Cases ..................................................................................... 616 1. Implied Preemption ................................................................................... 616 Bonito Boats, Inc. v. Thunder Craft Boats, Inc. ........................................618 2. Express Preemption.................................................................................. 626 Forest Park Pictures v. Universal Television Network, Inc. ................... 627 II. Enforcement Limits: The First-Sale Principle ................................................ 632 A. Copyright Law and the First Sale Doctrine.................................................. 632 Kirtsaeng v. John Wiley & Sons, Inc. ....................................................... 633 B. Patent Law and the Exhaustion Doctrine .................................................... 642 Bowman v. Monsanto .............................................................................. 642 C. Exhaustion under Trademark Law .............................................................. 649 Hokto Kinoko Co. v. Concord Farms, Inc. ................................................ 651 Chapter 7: Remedies .......................................................................................... 659 I. Looking Back: Redressing Past Harm .............................................................. 660 A. Actual Damages ........................................................................................... 660 1. Lost Profits and Causation ......................................................................... 661 Pioneer Hi-Bred Int’l v. Holden Found. Seeds, Inc. .................................. 661 Grain Processing Corp. v. American Maize-Products Co. ...................... 665 2. Determining Defendant’s Profits .............................................................. 672 Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc. ................................ 672 3. The equitable nature of trademark damages .............................................677 Tamko Roofing Prods. v. Ideal Roofing Co. ............................................ 678 B. Proxy Measures of Damages ........................................................................ 683 1. A Reasonable Royalty ................................................................................ 684 Bohnsack v. Varco, L.P. ............................................................................ 685 LOREN & MILLER, INTELLECTUAL PROPERTY LAW

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2. Statutory Damages.................................................................................... 687 Bryant v. Media Right Productions, Inc. ................................................. 688 Davis v. The Gap, Inc. .............................................................................. 694 C. Notice, Registration, and Limitations Periods ............................................ 700 1. Marking & Notice ...................................................................................... 700 2. Registration ............................................................................................... 701 3. Limitations Periods.................................................................................... 701 D. Enhanced Damages and Attorney Fee Awards ........................................... 702 1. The Role of Willfulness in Enhanced Damages and Fee Awards.............. 703 Zomba Enterprises, Inc. v. Panorama Records, Inc., ............................. 703 2. Fee Shifting Under the Copyright Act ....................................................... 712 Kirtsaeng v. John Wiley & Sons, Inc. ........................................................ 712 3. Fee Shifting In Trademark and Patent Litigation: The “Exceptional Case” Requirement ....................................................... 717 Octane Fitness, LLC v. ICON Health & Fitness, Inc. ................................. 717 Highmark Inc. v. Allcare Health Management Sys. ............................... 720 II: Looking Forward: Preventing Future Harm ................................................... 723 A. Permanent Injunctive Relief ........................................................................ 723 eBay Inc. v. MercExchange, L.L.C. .......................................................... 724 Tamko Roofing Prods. v. Ideal Roofing Co. ............................................ 730 B. Preliminary Injunctions ............................................................................... 732 Salinger v. Colting .................................................................................... 732 C. Causal Nexus ................................................................................................ 736 Apple, Inc. v. Samsung Electronics Co. .................................................... 736 III. Criminal Infringement ................................................................................... 748 A. Copyright ..................................................................................................... 748 B. Trademark.................................................................................................... 749 C. Trade Secret ................................................................................................. 750

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