Mechanical

CHAPTER8

CHAPTER8Intellectual Property andCyberpiracyCopyrightThe owners of copyright material such as books, movies, CDs, DVDs, and video games; the owners of trademarks such as McDonald’s Corporation and Starbucks Corporation; the creators of patents such as Microsoft Corporation and Intel Corporation; the owners of trade secrets such as the Coca-Cola Corporation; and the owners of other intellectual property lose substantial revenues caused by the sale of knockoffs of their intellectual property. Computers and software programs have helped increase cyberpiracy of intellectual property. Intellectual property is protected by a variety of civil and criminal laws.Learning ObjectivesAfter studying this chapter, you should be able to: Describe the business tort of misappropriating a trade secret. Describe how an invention can be patented under federal patent laws and the penalties for patent infringement. List the items that can be copyrighted and describe the penalties of copyright infringement. Definetrademarkandservice markand describe the penalties for trademark infringement. Definecyberpiracyand describe the penalties for engaging in cyber-infringement of intellectual property rights.Chapter Outline1. Introduction to Intellectual Property and Cyberpiracy2. Intellectual Property3. Trade Secret1. ETHICS• Coca-Cola Employee Tries to Sell Trade Secrets to Pepsi-Cola4. Patent1. Case 8.1 • U.S. SUPREME COURT CASE• Association for Molecular Pathology v. Myriad Genetics, Inc.2. Case 8.2 • U.S. SUPREME COURT CASE• Alice Corporation v. CLS Bank International5. Copyright1. CASE 8.3 • Broadcast Music, Inc. v. McDade & Sons, Inc.2. Case 8.4 • U.S. SUPREME COURT CASE• American Broadcasting Companies, Inc. v. Aereo, Inc.3. CASE 8.5 • Faulkner Literary Rights, LLC v. Sony Pictures Classics, Inc.4. DIGITAL LAW• Digital Millennium Copyright Act6. Trademark1. ETHICS• Knockoff of Trademark Goods7. Dilution1. Case 8.6• V Secret Catalogue, Inc. and Victoria’s Secret Stores, Inc. v. Moseley2. GLOBAL LAW• International Protection of Intellectual Property“The Congress shall have the power . . . to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”Where a new invention promises to be useful, it ought to be tried.Thomas Jefferson—Article 1, Section 8, Clause 8 of the U.S. ConstitutionIntroduction to Intellectual Property and CyberpiracyThe U.S. economy is based on the freedom of ownership of property. In addition to real estate and personal property,intellectual property rightshave value to both businesses and individuals. This is particularly the case in the modern era of the information age, computers, and the Internet.Federal law provides protections for intellectual property rights, such as patents, copyrights, and trademarks. Certain federal statutes provide for either civil damages or criminal penalties, or both, to be assessed against infringers of patents, copyrights, and trademarks. Trade secrets form the basis of many successful businesses, and such trade secrets are protected from misappropriation. State law imposes civil damages and criminal penalties against persons who misappropriate trade secrets.This chapter discusses trade secrets, patents, copyrights, and trademarks and how to protect them from infringement, misappropriation, and cyberpiracy.And he that invents a machine augments the power of a man and the well-being of mankind.Henry Ward BeecherProverbs from Plymouth Pulpit (1887)Intellectual PropertyIntellectual propertyis a term that describes property that is developed through an intellectual and creative process. Intellectual property falls into a category of property known asintangible rights, which are not tangible physical objects.intellectual propertyPatents, copyrights, trademarks, and trade secrets. Federal and state laws protect intellectual property rights from misappropriation and infringement.Most persons are familiar with the fact that intellectual property includes patents, copyrights, and trademarks. It also includes trade secrets. For patents, think of Microsoft’s patents on its operating system. Microsoft has obtained more than 10,000 patents. For copyrights, think of music, movies, books, and video games. Nike’s slogan “Just Do It” and Swoosh logo, and McDonald’sBig Macand “I’m lovin’ it”are recognizable trademarks.For trade secrets, think of Coca-Cola Company’s secret recipe for making Coca-Cola. Patents, trademarks, and copyrights give their owners or holders monopoly rights for specified periods of time. Trade secrets remain valuable as long as they are not easily discovered.Intellectual property is of significant value to companies in the United States and globally as well. Over one-half of the value of large companies in the United States is related to their intangible property rights. Some industries are intellectualproperty–intensive, such as the music and movie industries. Other industries that are not intellectual property–intensive, such as the automobile and food industries, are still highly dependent on their intellectual property rights.Because of their intangible nature, intellectual property rights are more subject to misappropriation than is tangible property. It is almost impossible to steal real estate, and it is often difficult to steal tangible property such as equipment, furniture, and other personal property. However, intellectual property rights are much easier to misappropriate. Think of illegally downloaded copyrighted music, movies, and video games, and fake designer purses. In addition, computers and cyberpiracy make it easier to steal many forms of intellectual property. The misappropriation of intellectual property rights is one of the major threats to companies today.Trade SecretMany businesses are successful because theirtrade secretsset them apart from their competitors. Trade secrets may be product formulas, patterns, designs, compilations of data, customer lists, or other business secrets. Many trade secrets do not qualify to be—or simply are not—patented, copyrighted, or trademarked. Many states have adopted theUniform Trade Secrets Actto give statutory protection to trade secrets. trade secretA product formula, pattern, design, compilation of data, customer list, or other business secret.State unfair competition laws allow the owner of a trade secret to bring a lawsuit formisappropriationagainst anyone who steals a trade secret. For the lawsuit to be actionable, the defendant (often an employee of the owner or a competitor) must have obtained the trade secret through unlawful means, such as theft, bribery, or industrial espionage. No tort has occurred if there is no misappropriation.The owner of a trade secret is obliged to take all reasonable precautions to prevent that secret from being discovered by others. If the owner fails to take such actions, the secret is no longer subject to protection under state unfair competition laws. Precautions to protect a trade secret may include fencing in buildings, placing locks on doors, hiring security guards, and the like.ExamplesThe most famous trade secret is the formula for Coca-Cola. This secret recipe, which is referred to by the code name Merchandise 7X, is kept in a bank vault in Atlanta, Georgia. The formula is supposedly known by only two executives who have signed nondisclosure agreements. Another secret recipe that is protected as a trade secret is KFC’s secret recipe of 11 herbs and spices for the batter used on the Colonel’s Original Recipe Kentucky Fried Chicken.Reverse EngineeringA competitor can lawfully discover a trade secret byreverse engineering(i.e., taking apart and examining a rival’s product or re-creating a secret recipe). A competitor who has reverse-engineered a trade secret can use the trade secret but not the trademarked name used by the original creator of the trade secret.WEB EXERCISEGo towww.usatoday.com/money/industries/food/2005-07-22-kfc-secret-recipe_x.htmand read about how KFC protects its secret recipe.ExampleAn inventor invents a new formula for a perfume. The inventor decides not to get a patent for her new formula (because patent protection is good for only twenty years). Instead, the inventor chooses to try to protect it as a trade secret, which gives her protection for as long a period of time as she can successfully keep it a secret. Another party purchases the perfume, chemically analyzes it, and discovers the formula. The trade secret has been reverse-engineered, and the second party may begin producing a perfume using the inventor’s formula.Misappropriation of a Trade SecretThe owner of a trade secret can bring acivil lawsuitunder state law against anyone who has misappropriated a trade secret through unlawful means, such astheft, bribery, or industrial espionage. Generally, a successful plaintiff in amisappropriation of a trade secretaction can (1) recover theprofitsmade by the offender from the use of the trade secret, (2) recover fordamages, and (3) obtain aninjunctionprohibiting the offender from divulging or using the trade secret.Critical Legal Thinking Why did the founders of the United States place protections for inventors and writers in Article I of the U.S. Constitution? Have these protections become even more important in the current digital age?Economic Espionage ActCongress enacted the federalEconomic Espionage Act (EEA),1which makes it a federalcrimeto steal another’s trade secrets. Under the EEA, it is a federal crime for any person to convert a trade secret to his or her benefit or for the benefit of others, knowing or intending that the act would cause injury to the owner of the trade secret. The definition oftrade secretunder the EEA is very broad and parallels the definition used under the civil laws of misappropriating a trade secret.Economic Espionage ActA federal statute that makes it a crime for any person to convert a trade secret for his or her own or another’s benefit, knowing or intending to cause injury to the owners of the trade secret.One of the major reasons for the passage of the EEA was to address the ease of stealing trade secrets through computer espionage and use of the Internet. Confidential information can be downloaded onto a flash drive, placed in a pocket, and taken from the legal owner. Computer hackers can crack into a company’s computers and steal customer lists, databases, formulas, and other trade secrets. The EEA is a very important weapon in addressing computer and Internet espionage and penalizing those who commit it.The EEA provides severe criminal penalties. The act imposes prison terms on individuals of up to 15 years per criminal violation. An organization can be fined up to $10 million per criminal act. The criminal prison term for individuals and the criminal fine for organizations can be increased if the theft of a trade secret was made to benefit a foreign government.The following ethics feature discusses the misappropriation of a trade secret.EthicsCoca-Cola Employee Tries to Sell Trade Secrets to Pepsi-Cola“What if you knew the markets Coca-Cola was going to move into and out of and beat them to the punch.”—Letter to PepsiCoPepsiCo received a letter sent to the company by an employee of Coca-Cola Company that offered to sell PepsiCo trade secrets of Coca-Cola. The letter stated, “What if you knew the markets Coca-Cola was going to move into and out of and beat them to the punch.” The letter proposed selling trade secrets regarding a proposed Coke product code-named Project Lancelot for $1.5 million.PepsiCo notified Coca-Cola officials and federal authorities. The Federal Bureau of Investigation (FBI) initiated an investigation into the matter. The federal government brought criminal charges against Coca-Cola secretary Joya Williams. During trial, prosecutors produced the letter as well as a video-recording of Williams putting confidential documents and samples of Coke products that were still in development into her bag.Williams was convicted by a federal jury of conspiring to steal Coca-Cola trade secrets and attempting to sell them to archrival PepsiCo. The trial court judge sentenced Williams to 8 years in jail. The U.S. court of appeals upheld the decision. Two other co-conspirators were arrested and pled guilty.United States v. Williams, 526 F.3d 1312, 2008 U.S. App. Lexis 6073 (United States Court of Appeals for the Eleventh Circuit, 2008)Ethics Question  Did Williams act loyally in this case? Did PepsiCo do what it was supposed to do in this case? How likely is it that PepsiCo would have paid Williams and her co-conspirators the money they demanded?PatentWhen drafting the Constitution of the United States of America, the founders of the United States provided for protection of the work of inventors and writers. Article I, Section 8 of the Constitution provides, “The Congress shall have Power . . . To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Pursuant to the express authority granted in the U.S. Constitution,Congress enacted theFederal Patent Statuteof 1952 to provide for obtaining and protecting patents.2Federal Patent StatuteA federal statute that establishes the requirements for obtaining a patent and protects patented inventions from infringement.Apatentis a grant by the federal government to the inventor of an invention for the exclusive right to use, sell, or license the invention for a limited amount of time.patentA grant by the federal government to the inventor of an invention for the exclusive right to use, sell, or license the invention for a limited amount of time.Patent law is intended to provide an incentive for inventors to invent and make their inventions public and to protect patented inventions from infringement. Federal patent law is exclusive; there are no state patent laws. Applications for patents must be filed with theU.S. Patent and Trademark Office (PTO)in Washington DC. The PTO grants approximately 250,000 patents each year.U.S. Court of Appeals for the Federal CircuitTheU.S. Court of Appeals for the Federal Circuitin Washington DC, was created in 1982. This is a special federal appeals court that hears appeals from the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office and U.S. district courts concerning patent issues. This court of appeals was created to promote uniformity in patent law.U.S. Court of Appeals for the Federal CircuitA special federal appeals court that hears appeals from the Board of Patent Appeals and Interferences and federal court concerning patent issues.Patent ApplicationTo obtain a patent, apatent applicationmust be filed with the PTO in Washington DC. The PTO provides for the online submission of patent applications and supporting documents through its EFS-Web system. A patent application must contain a written description of the invention. Patent applications are complicated. Therefore, an inventor should hire a patent attorney to assist in obtaining a patent for an invention.The PTO must make a decision whether to grant a patent within three years from the date of filing a patent application. For the payment of approximately $5,000, inventors can move their patent application to the top of the list of other patent applications for review by the PTO and receive an answer within one year. The PTO can grant priority to patent applications for products, processes, or technologies that are important to the national economy or national competiveness.The patent system added the fuel of interest to the fire of genius.Abraham LincolnAn inventor may file aprovisional applicationwith the PTO. This provisional right gives an inventor 3 months to prepare and file a final and complete patent application.provisional applicationAn application that an inventor may file with the PTO to obtain 3months to prepare a final patent application.Third parties may file apre-issuance challengeto a pending patent application by submitting prior art references that assert that the sought-after patent is not patentable. There is also a nine-month period after the issuance of a patent for a third party to seekpost-grant reviewof a patent by submitting prior art references and other information that assert that the patent holder’s claim is not patentable.ThePatent Trial and Appeal Board (PTAB), a section within the PTO, reviews adverse decisions by patent examiners, reviews reexaminations, conducts post-grant reviews, and conducts other patent challenge proceedings. By permitting pre-issuance and post-grant challenges within the PTO, the law attempts to have disputes resolved within the PTO before reaching the litigation stage.Patent NumberIf a patent is granted, the invention is assigned apatent number. Patent holders usually affix the wordpatentorpat.and the patent number on the patented article. A patent holder may mark an item “Patent” or “Pat” and direct a party to a freely accessible Web address that identifies the product covered by the patent number. If a patent application is filed but a patent has not yet been issued, the applicant usually places the wordspatent pendingon the article.Exhibit8.1shows the abstract from the patent application for the Facebook social networking system (U.S. Patent 20070192299).Systems and Methods for Social Mapping AbstractA system, method, and computer program for social mapping is provided. Data about a plurality of social network members is received. A first member of the plurality of social network members is allowed to identify a second member of the plurality of social network members with whom the first member wishes to establish a relationship. The data is then sent to the second member about the first member based on the identification. Input from the second member is received in response to the data. The relationship between the first member and the second member is confirmed based on the input in order to map the first member to the second member.Exhibit8.1Patent Application for the Facebook Social Networking SystemSubject Matter That Can Be PatentedMost patents areutility patents; that is, they protect the functionality of the item. The termpatentis commonly used in place of the wordsutility patent. Only certain subject matter can be patented. Federal patent law recognizes categories of innovation that can be patented, including:utility patentA patent that protects the functionality of the invention.MachinesProcessesCompositions of matterImprovements to existing machines, processes, or compositions of matterDesigns for an article of manufactureAsexually reproduced plantsLiving material invented by a personPatent law prohibits the issuance of a patent encompassing a human organism. The law also bans the ability to patent tax strategies. Abstractions and scientific principles cannot be patented unless they are part of the tangible environment.ExampleEinstein’s theory of relativity (E=mc2) cannot be patented.For centuries, most patents involved tangible inventions and machines, such as the telephone and the lightbulb. Next, chemical and polymer inventions were patented. Then biotechnology patents were granted. More recently, subject matter involving the computer, Internet, and e-commerce has been added to what can be patented.Requirements for Obtaining a PatentTo be patented, an invention must be (1)novel, (2)useful, and (3)nonobvious. An invention must meet all three of these requirements. If an invention is found not to meet any one of theserequirements, it cannot be patented:requirements for obtaining a patentTo be patented, an invention must be (1) novel, (2) useful, and (3) nonobvious. Novel.An invention isnovelif it is new and has not been invented and used in the past. If an invention has been used in “prior art,” it is not novel and cannot be patented.ExampleCollege and professional football games are often shown on television. It is often difficult, however, for a viewer to tell how far the offensive team must go to get a first down and keep possession of the football. Inventors invented a system whereby a yellow line is digitally drawn across the footballfield at the distance that a team has to go to obtain a first down. This yellow line qualified for a patent because it was novel. Useful.An invention isusefulif it has some practical purpose. If an invention has only theoretical benefit and no useful purpose, it cannot be patented.ExampleA cardboard or heavy paper sleeve that can be placed over the outside of a paper coffee cup so that the cup will not be too hot to hold serves a useful purpose. Many coffee shops use these sleeves. The sleeve serves a useful purpose and therefore qualifies to be patented. Nonobvious.If an invention isnonobvious, it qualifies for a patent; if it is obvious, then it does not qualify for a patent.ExampleAn invention called “Forkchops” was found to be nonobvious and was granted a patent. Forkchops consist of chopsticks with a spoon on one end of one of the chopsticks and a fork on one end of the other chopstick. Thus, when eating, a user can use either the chopstick ends or the spoon and fork ends.ExampleAn inventor filed for a patent for a waffle fry, which is a fried slice of potato with a waffle shape that is not as thick as a typical french fry but is thicker than a potato chip. Thus, the thickness of a waffle fry is somewhere between the thickness of a french fry and a potato chip. The court rejected a patent for the waffle fry because it was obvious that a potato could be sliced into different sizes.CONCEPT SUMMARYRequirements for Obtaining a Patent Novel.An invention is novel if it is new and has not been invented and used in the past. If an invention has been used in “prior art,” it is not novel and cannot be patented. Useful.An invention is useful if it has some practical purpose. If an invention has only theoretical benefit and no useful purpose, it cannot be patented. Nonobvious.If an invention is nonobvious, it qualifies for a patent; if it is obvious, then it does not qualify for a patent.The following U.S. Supreme Court case involves the question of what is patentable subject matter.CASE 8.1U.S. SUPREME COURT CASE PatentAssociation for Molecular Pathology v. Myriad Genetics, Inc.133 S.Ct. 2107, 2013 U.S. Lexis 4540 (2013) Supreme Court of the United States“Laws of nature, natural phenomena, and abstract ideas are not patentable.”—Thomas, JusticeFactsAfter substantial research and expenditure of money and resources, Myriad Genetics, Inc. (Myriad) discovered the precise location and sequence of two naturally occurring segments of deoxyribonucleic acid (DNA) known as BRCA1 and BRCA2. Mutations in these genes can dramatically increase a female’s risk of developing breast and ovarian cancer. The average American woman has a 12 to 13 percent risk of developing breast cancer, but in a woman with thegenetic mutations discovered by Myriad, the risk can range between 50 and 80 percent for breast cancer and between 20 and 50 percent for ovarian cancer. Before Myriad’s discovery of the BRCA1 and BRCA2 genes, scientists knew that heredity played a role in establishing a woman’s risk of developing breast and ovarian cancer, but they did not know which genes were associated with those cancers. For women who are tested and found to have the dangerous mutations of BRCA1 and BRCA2, medical measures can be taken to reduce the risks of breast and ovarian cancer developing.Myriad obtained a patent from the U.S. Patent and Trademark Office based on its discovery. The Association for Molecular Pathology sued Myriad, seeking a declaration that Myriad’s patent was invalid. The U.S. district court held that Myriad’s claim was invalid because it covered a product of nature and was therefore unpatentable. The Federal Circuit Court of Appeals held that the isolated DNA was patent eligible. The U.S. Supreme Court granted review.IssueIs a naturally occurring segment of DNA patent eligible?Language of the U.S. Supreme CourtLaws of nature, natural phenomena, and abstract ideas are not patentable. It is undisputed that Myriad did not create or alter any of the genetic information encoded in the BRCA1 and BRCA2 genes. The location and order of the nucleotides existed in nature before Myriad found them. Nor did Myriad create or alter the genetic structure of DNA. Instead, Myriad’s principal contribution was uncovering the precise location and genetic sequence of the BRCA1 and BRCA2 genes. Myriad did not create anything. To be sure, it found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention.DecisionThe U.S. Supreme Court held that a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated. The U.S. Supreme Court reversed the decision of the Federal Circuit Court of Appeals on this issue.Ethics Questions Will the Supreme Court’s decision affect the amount of research that is conducted to find naturally occurring disease-causing DNA sequences? Should Myriad be compensated by the government for its research costs?Patent PeriodIn 2011, Congress passed theLeahy-Smith America Invents Act (AIA).3The act stipulates afirst-to-file rulefor determining the priority of a patent. This means that the first party to file a patent on an invention receives the patent even though some other party was the first to invent the invention. Previously, the United States followed thefirst-to-invent rulewhereby the party that first invented the invention was awarded the patent even if another party had previously filed for and received the patent. The adoption of the first-to-file rule is a major change in U.S. patent law.Leahy-Smith America Invents Act (AIA)A federal statute that significantly amended federal patent law.Utility patents for inventions are valid for20 years. The patent term begins to run from the date the patent application isfiled.After the patent period runs out, the invention or design enters thepublic domain, which means that anyone can produce and sell the invention without paying the prior patent holder.WEB EXERCISEGo towww.uspto.gov. Go to the left column titled “Patents.” Click on number 2 “Search.” Toward the middle of the page that appears, find the term “Patent Number Search.” Click on this term. In the open line under the term “Query,” type in the patent number 3741662. Click on the term “Search.” Read the information about this patent.ExampleOn January 12, 2016, an inventor invents a formula for a new prescription drug. On March 1, 2016, the inventor files for and is eventually granted a 20-year patent for this invention. Twenty years after the filing of the patent application, on March 1, 2036, the patent expires. The next day the patent enters the public domain, and anyone can use the formula to produce exactly the same prescription drug.In the following case, the U.S. Supreme Court had to decide whether a financial model was patentable.CASE 8.2U.S. SUPREME COURT CASE PatentAlice Corporation v. CLS Bank International134 S.Ct. 2347, 2014 U.S. Lexis 4303 (2014) Supreme Court of the United States“The abstract ideas category embodies the longstanding rule than an idea itself is not patentable.”—Thomas, JusticeFactsAlice Corporation owns several patents that use computers to calculate the intermediated settlement risk that a party to an agreed-upon financial exchange will satisfy its obligation. CLS Bank International, which operates a network that facilitates financial transactions, filed a lawsuit against Alice Corporation seeking a declaratory judgment that Alice Corporation’s patents are invalid. The U.S. district court held that claims were patent ineligible because they merely use computers directed to the abstract idea of minimizing risk. The en banc U.S. court of appeals affirmed the judgment. Alice Corporation appealed to the U.S. Supreme Court.IssueAre the claims patent eligible, or are they patent ineligible abstract ideas?Language of the U.S. Supreme CourtThe abstract ideas category embodies the longstanding rule than an idea itself is not patentable. The concept of intermediated settlement is a fundamental economic practice long prevalent in our system of commerce. Viewed as a whole, petitioner’s method claims simply recite the concept of intermediated settlement as performed by a generic computer. Under our precedents, that is not enough to transform an abstract idea into a patent eligible invention.DecisionThe U.S. Supreme Court held that Alice Corporation’s claims of using generic computer implementation adds nothing of substance to the underlying abstract idea of intermediate settlement and are therefore patent ineligible.Ethics Questions Do companies sometimes overreach in their patent claims? Why do they do this?Patent InfringementPatent holders own exclusive rights to use and exploit their patents.Patent infringementoccurs when someone makes unauthorized use of another’s patent. Patent infringement claims must be brought in the U.S. district court that has jurisdiction to hear the case. Patent decisions of the U.S. district courts can be appealed to the U.S. Court of Appeals for the Federal Circuit.patent infringementUnauthorized use of another’s patent. A patent holder may recover damages and other remedies against a patent infringer.In a suit for patent infringement, a successful plaintiff can recover (1) money damages equal to a reasonable royalty rate on the sale of the infringed articles, (2) other damages caused by the infringement (e.g., loss of customers), (3) an order requiring the destruction of the infringing article, and (4) an injunction preventing the infringer from such action in the future. The court has the discretion to award up to treble damages if the infringement was intentional. It costs between several hundred thousand dollars to several million dollars to bring an infringement case to trial.Design PatentIn addition to utility patents, a party can obtain a design patent. Adesign patentis a patent that may be obtained for the ornamental nonfunctional design of an item. A design patent is valid for 14 years.design patentA patent that may be obtained for the ornamental nonfunctional design of an item.ExamplesThe design of a chair, a door knob, a perfume bottle, and the outside of a computer are examples of design patents.Statue of LibertyThe Statue of Liberty is one of the most famous design patents. It was patented in the United States by Auguste Bartholdi on February 18, 1879. Patent No. 11,023.CopyrightArticle I, Section 8, of the Constitution of the United States of America authorizes Congress to enact statutes to protect the works of writers for limited times.Pursuant to this authority, Congress has enacted copyright statutes that establish the requirement for obtaining a copyright.Copyrightis a legal right that gives the author of qualifying subject matter and who meets other requirements established by copyright law the exclusive right to publish, produce, sell, license, and distribute the work.copyrightA legal right that gives the author of qualifying subject matter, who meets other requirements established by copyright law, the exclusive right to publish, produce, sell, license, and distribute the work.TheCopyright Revision Actof 1976 currently governs copyright law.4The act establishes the requirements for obtaining a copyright and protects copyrighted works from infringement. Federal copyright law is exclusive; there are no state copyright laws. Federal copyright law protects the work of authors and other creative persons from the unauthorized use of their copyrighted materials and provides a financial incentive for authors to write, thereby increasing the number of creative works available in society. Copyrights can be sold or licensed to others, whose rights are then protected by copyright law.Copyright Revision ActA federal statute that (1) establishes the requirements for obtaining a copyright and (2) protects copyrighted works from infringement.Tangible WritingOnlytangible writings—writings that can be physically seen—are subject to copyright registration and protection. The termwritinghas been broadly defined.ExamplesBooks, periodicals, and newspapers; lectures, sermons, addresses, and poems; musical compositions; plays, motion pictures, and radio and television productions; maps; works of art, including paintings, drawings, jewelry, glassware, tapestry, and lithographs; architectural drawings and models; photographs, including prints, slides, and filmstrips; greeting cards and picture postcards; photoplays, including feature films, cartoons, newsreels, travelogues, and trainingfilms; and sound recordings published in the form of CDs and MP3 files qualify for copyright protection.Registration of CopyrightsTo be protected under federal copyright law, a work must be the original work of the author. A copyright is automatically granted the moment a work is created and fixed in tangible form.ExampleWhen a student writes a term paper for his class, he owns a copyright to his work.In 1989, the United States signed theBerne Convention, an international copyright treaty. This law eliminated the need to place the symbol © or the wordcopyrightorcopr.on a copyrighted work. However, it is still advisable to place the copyright notice©, the year of publication, and the author’s name on many copyrighted works because it notifies the world that the work is protected by a copyright, identifies the owner of the copyright, and shows the year of its publication. This helps eliminate a defendant’s claim of innocent copyright.Berne ConventionAn international copyright treaty.ExampleCopyright © 2017 Henry Richard Cheeseman.Published and unpublished works may be registered with theU.S. Copyright Officein Washington DC. Registration of a copyright is permissive and voluntary and can be effectuated at any time during the term of the copyright. Copyright registration creates a public record of the copyrighted work. Acopyright registration certificateis issued to the copyright holder. Registration permits a holder to obtain statutory damages for copyright infringement, which may be greater than actual damages, and attorney’s fees.Copyright PeriodTheCopyright Term Extension Actof 1998 extended copyright protection to the following:5The law in respect to literature ought to remain upon the same footing as that which regards the profits of mechanical inventions and chemical discoveries.William WordsworthLetter (1838) Individuals are granted copyright protection for their lifetime plus 70 years. Copyrights owned by businesses are protected for the shorter of either: 120 years from the year of creation, or 95 years from the year of first publication After the copyright period runs out, the work enters thepublic domain, which means that anyone can publish the work without paying the prior copyright holder.ExampleIf an author publishes a novel on April 1, 2015, and lives until August 1, 2040, his heirs will own the copyright until August 1, 3010.CONCEPT SUMMARYCopyright Period Type of Holder Copyright Period Individual Life of the author plus 70 years beyond the author’s life. Business The shorter of either 95 years from the year of first publication or 120 years from the year of creation. Civil Copyright Law: Copyright InfringementCopyright infringementoccurs when a party copies a substantial and material part of the plaintiff’s copyrighted work without permission. The copying does not have to be either word for word or the entire work. A plaintiff can bring a civil action against the alleged infringer and, if successful, recover (1) the profit made by the defendant from the copyright infringement, (2) damages suffered by the plaintiff, (3) an order requiring the impoundment and destruction of the infringing works, and (4) an injunction preventing the defendant from infringing in the future. The court, at its discretion, can award statutory damages for willful infringement in lieu of actual damages.FBI WarningThe Federal Bureau of Investigation (FBI), a federal government agency, is authorized to investigate violations of copyright law. An FBI warning concerning copyright infringement usually appears at the beginning of a DVD and before a feature movie or television program is shown. The FBI warning was developed to deter illegal piracy and increase awareness of the criminal penalties associated with piracy.copyright infringementAn infringement that occurs when a party copies a substantial and material part of a plaintiff’s copyrighted work without permission. A copyright holder may recover damages and other remedies against the infringer.The federal government can bring criminal charges against a person who commits copyright infringement. Criminal copyright infringement, including infringement committed without monetary gain, is punishable by up to five years in federal prison.In the following case, the court had to decide whether copyright infringement had occurred.CASE 8.3FEDERAL COURT CASE Copyright InfringementBroadcast Music, Inc. v. McDade & Sons, Inc.928 F.Supp.2d 1120, 2013 U.S. Dist. Lexis 30211 (2013) United States District Court for Arizona“The record reflects that defendants’ infringements were knowing and willful.”—Bade, United States Magistrate JudgeFactsNorton’s Country Corner (Norton’s) is a cowboy bar located in Queen Creek, Arizona. The bar is owned by McDade & Sons, Inc. which is owned 100 percent by Nancy McDade. McDade is its sole officer and director. Live bands play country and western music at Norton’s on various nights of the week. Certain copyright owners of music have authorized Broadcast Music, Inc. (BMI) to license the use of their copyright songs to broadcasters and to owners of concert halls, restaurants, and nightclubs for live performances of the copyrighted music. BMI attends public performances of music to determine whether any copyrights it is authorized to license are being performed without such license.One night, a BMI representative attended a live band performance at Norton’s bar and recorded the songs played by the band that night. The audiorecording showed that 13 copyrighted songs that BMI was authorized to license were played by the band at Norton’s without the required license. The songs included classics originally sung by famous artists, such as “All My Ex’s Live in Texas” (George Strait), “Baby Don’t Get Hooked on Me” (Mac Brown), “Brown Eyed Girl” (Van Morrison), and “Ring of Fire” (Johnny Cash). BMI sued McDade & Sons, Inc. and Nancy McDade in U.S. district court for trademark infringement. The defendants argued they had not committed trademark infringement and that trademark law did not apply to owners of small establishments.IssueAre the defendants liable for trademark infringement?Language of the CourtThe Copyright Act gives the owner of a copyright the exclusive right to publicly perform, or authorize others to perform, the copyrighted work. Any person who violates this exclusive right is an infringer. Lack of authorization is established by the undisputed fact that defendants were not licensed by BMI to perform plaintiffs’ copyrighted musical compositions. Defendants contend that the copyright laws are unfair to small bar owners “struggling to get by week by week.” Defendants seek an exemption from complying with the Copyright Act, but have not cited any authority for such an exemption. The record reflects that defendants’ infringements were knowing and willful.DecisionThe U.S. district court held that the defendants had engaged in copyright infringement and awarded $39,000 in damages, attorney’s fees, and costs to the plaintiffs, and issued a permanent injunction against the defendants’ infringement of copyrighted musical compositions licensed by Broadcast Music, Inc.Ethics Questions Should small-business owners of bars and other establishments be free from copyright laws? How many restaurants, bars, and other establishments play copyrighted music without the copyright owner’s permission?The following case involves the issue of digital copyright infringement.CASE 8.4U.S. SUPREME COURT CASE Digital Copyright InfringementAmerican Broadcasting Companies, Inc. v. Aereo, Inc.134 S.Ct. 2498, 2014 U.S. Lexis 4496 (2014) Supreme Court of the United States“The Copyright Act gives a copyright owner the exclusive right to perform the copyrighted work publicly.”—Breyer, JusticeFactsFor a monthly fee Aereo, Inc. offers subscribers broadcast television programming over the Internet virtually as the programs are being broadcast on television. Most of the programming is made up of copyrighted works. Aereo’s system is made up of thousands of tiny dime-sized antennas housed in a central warehouse. A subscriber visits Aereo’s website and selects a television show that he or she wishes to watch which is currently being broadcast. One of Aereo’s thousands of small antennas is assigned to the subscriber, a server tunes the small antenna to the over-the-air broadcast carrying the show, and an Aero transcoder translates the signals into data that is then transmitted over the Internet to the subscriber’s digital device.American Broadcasting Companies, Inc. and other television broadcasters, producers, marketers, distributers (petitioners) who own the copyrights to the programs Aereo streams sued Aereo for copyright infringement and sought an injunction against Aereo. Aereo argued that it does not perform the copyrighted programs publicly because it streams programs to each subscriber individually from tiny individual antennas. The U.S. district court deniedthe injunction and the U.S. court of appeals affirmed. The petitioners appealed to the U.S. Supreme Court.IssueHas Aereo engaged in copyright infringement?Language of the U.S. Supreme CourtThe Copyright Act gives a copyright owner the exclusive right to perform the copyrighted work publicly. We must decide whether Aereo infringes this exclusive right by selling its subscribers a technologically complex service that allows them to watch television programs over the Internet at about the same time as the programs are broadcast over the air. We conclude that it does.DecisionThe U.S. Supreme Court held that Aereo engaged in copyright infringement.Ethics Questions Why did Aereo use thousands of tiny dime-size antennas rather than using one big antenna to recover petitioners’ over-the-air broadcasts? Did Aereo act ethically in adopting this business model?Fair Use DoctrineA copyright holder’s right in a work is not absolute. The law permits certain limited unauthorized use of copyrighted materials under thefair use doctrine. The following uses are protected under this doctrine: (1) quotation of the copyrighted work for review or criticism or in a scholarly or technical work, (2) use in a parody or satire, (3) brief quotation in a news report, (4) reproduction by a teacher or student of a small part of the work to illustrate a lesson, (5) incidental reproduction of a work in a newsreel or broadcast of an event being reported, and (6) reproduction of a work in a legislative or judicial proceeding. The copyright holder cannot recover for copyright infringement where fair use is found.fair use doctrineA doctrine that permits certain limited use of a copyright by someone other than the copyright holder without the permission of the copyright holder.ExamplesCritical Legal Thinking Has copyright infringement become endemic? Is illegal downloading of copyrighted music, movies, and video games “stealing”? Can copyright law and enforcement keep up with digital piracy?A student is assigned to write a paper in class about a certain subject matter. The student conducts research and writes her paper. In her paper, the student uses two paragraphs from a copyrighted book and places these paragraphs in quotation marks and properly cites the source and author in a footnote. This is fair use for academic purposes. However, if the student copies and uses three pages from the book, this would not be fair use and would constitute copyright infringement whether she cites the author and his or her work in a footnote or not.ExampleA comedy television show that performs parodies and satires on famous celebrities is an example ofparody fair use.In the following case, the court addresses the doctrine of fair use.CASE 8.5FEDERAL COURT CASE Fair UseFaulkner Literary Rights, LLC v. Sony Pictures Classics, Inc.953 F.Supp.2d 701, 2013 U.S. Dist. Lexis 100625 (2013) United States District Court for the Northern District of Mississippi“The court considers it relevant that the copyrighted work is a serious piece of literature lifted for use in a speaking part in a movie comedy.”—Mills, Chief District JudgeFactsWilliam Faulkner was a great American author who wrote novels, short stories, poetry, and screenplays, including the novelsA Fable,The Reivers,As I LayDying, andThe Sound and the Fury. Faulkner won the Noble Prize in Literature. One of Faulkner’s novels wasRequiem for a Nun(Requiem), published in 1950, which is a murder mystery set in the South in which one of the main characters uses the famous line “The past is never dead. It’s not even past.” Faulkner died in 1962. Faulkner Literary Rights, LLC (Faulkner) owns the copyrights to Faulkner’s works. Woody Allen is an iconic American screenwriter, actor, playwright, and director who stars in many of his films, which have includedAnnie Hall,Manhattan, andHannah and Her Sisters. Allen has been nominated 24 times for Academy Awards and has won three for best original screenplay and one for best director. One of his films,Midnight in Paris(Midnight), was released in 2011, for which Allen won the Academy Award for Best Original Screenplay.Midnightis a romantic comedy set in Paris, France, in which a major character says the line “The past is not dead! Actually, it’s not even past. You know who said that? Faulkner. And he was right.” The line lasts 8 seconds. Sony Pictures Classics, Inc. (Sony) produced and distributedMidnightand owns the copyright to the movie. Faulkner sued Sony for copyright infringement for using the paraphrased version of the famous line from Faulkner’s bookRequiemin Allen’s movieMidnight. Sony defends, arguing that the use qualifies as fair use and is not copyright infringement.IssueIs the paraphrased use of Faulkner’s quote from his bookRequiemin Allen’s movieMidnightfair use?Language of the CourtAt issue in this case is whether a single line from a full-length novel singly paraphrased and attributed to the original author in a full-length Hollywood film can be considered a copyright infringement. In this case, it cannot. The court considers it relevant that the copyrighted work is a serious piece of literature lifted for use in a speaking part in a movie comedy. Moreover, it should go without saying that the quote at issue is of miniscule quantitative importance to the work as a whole. The court is highly doubtful that any relevant markets have been harmed by the use inMidnight.DecisionThe U.S. district court held that Sony’s use of Faulkner’s paraphrased quotation from his bookRequeimin the movieMidnightisde minimus(minimal) and fair use and not copyright infringement. The court dismissed the lawsuit.Ethics Questions What is the public policy behind the doctrine of fair use? Should Sony have voluntarily paid some money to Faulkner for the use of its copyrighted material?Criminal Copyright Law: No Electronic Theft ActIn 1997, Congress enacted theNo Electronic Theft Act (NET Act), a federal statute thatcriminalizescertain copyright infringement.6The NET Act prohibits any person from willfully infringing a copyright for the purpose of either commercial advantage or financial gain, or by reproduction or distribution even without commercial advantage or financial gain, including by electronic means. Thus, the NET Act makes it a federal crime to reproduce, share, or distribute copyrighted electronic works including movies, songs, software programs, and video games.No Electronic Theft (NET) ActA federal statute that makes it a crime for a person to infringe willfully on a copyright.ExamplesViolations of the NET Act include distributing copyrighted works without permission of the copyright holder over the Internet, uploading such works to a website, and posting information about the availability of such uploaded electronic works.Criminal penalties for violating the act include imprisonment for up to five years and fines of up to $250,000. Subsequent violators may be fined and imprisoned for up to 10 years. The creation of the NET Act adds a new law that the federal government can use to attack criminal copyright infringement and curb digital piracy.The NET Act also permits copyright holders to sue violators in a civil lawsuit and recover monetary damages of up to $150,000 per work infringed.The following feature discusses a federal law designed to protect digital copyright material.Digital LawDigital Millennium Copyright ActThe Internet makes it easier than ever before for people to copy and distribute copyrighted works illegally. To combat this, software and entertainment companies have developed digital wrappers” andencryption technologyto protect their copyrighted works from unauthorized access. Not to be outdone, software pirates have devised ways to crack these wrappers and protection devices.Software and entertainment companies lobbied Congress to enact federal legislation to make the cracking of their wrappers and selling of technology to do so illegal. In response, Congress enacted theDigital Millennium Copyright Act (DMCA),7a federal statute that does the following:Digital Millennium Copyright Act (DMCA)A federal statute that prohibits unauthorized access to copyrighted digital works by circumventing encryption technology or the manufacture and distribution of technologies designed for the purpose of circumventing encryption protection of digital works.Prohibits unauthorized access to copyrighteddigital worksby circumventing the wrapper or encryption technology that protects the intellectual property.Prohibits the manufacture and distribution of technologies, products, or services primarily designed for the purpose of circumventing wrappers or encryption technology protecting digital works.Congress granted exceptions to DMCA liability to (1) software developers to achieve compatibility of their software with the protected work; (2) federal, state, and local law enforcement agencies conducting criminal investigations; (3) parents who are protecting children from pornography or other harmful materials available on the Internet; (4) Internet users who are identifying and disabling cookies and other identification devices that invade their personal privacy rights; and (5) nonprofit libraries, educational institutions, and archives that access a protected work to determine whether to acquire the work.The DMCA imposes civil and criminal penalties.TrademarkBusinesses often develop company names, as well as advertising slogans, symbols, and commercial logos, to promote the sale of their goods and services. Companies such as Nike, Microsoft, Louis Vuitton, and McDonald’s spend millions of dollars annually promoting their names, slogans, symbols, and logos to gain market recognition from consumers. The U.S. Congress has enacted trademark laws to provide legal protection for these names, slogans, and logos.Amarkis any trade name, symbol, word, logo, design, or device used to identify and distinguish goods of a manufacturer or seller or services of a provider from those of other manufacturers, sellers, or providers.markAny trade name, symbol, word, logo, design, or device used to identify and distinguish goods of a manufacturer or seller or services of a provider from those of other manufacturers, sellers, or providers.WEB EXERCISEGo towww.coca-cola.comto see trademarks of the Coca-Cola Corporation.In 1946, Congress enacted theLanham (Trademark) Act,8commonly referred to as theLanham Act, to provide federal protection to trademarks, service marks, and other marks. This act, as amended, is intended to (1) protect the owner’s investment and goodwill in a mark and (2) prevent consumers from being confused about the origin of goods and services.Lanham (Trademark) Act (Lanham Act)A federal statute that (1) establishes the requirements for obtaining a federal mark and (2) protects marks from infringement.Registration of a MarkMarks can be registered with the U.S. Patent and Trademark Office (PTO) in Washington DC. A registrant must file an application with the PTO wherein the registrant designates the name, symbol, slogan, or logo that he is requesting to be registered. A registrant must either prove that he has used the intended mark in commerce (e.g., actually used the mark in the sale of goods or services) or states that he intends to use the mark in commerce within six months from the filing of the application. In the latter case, if the proposed mark is not used in commerce within this six-month period, the applicant loses the right to register the mark. However, the applicant may file for a six-month extension to use the mark in commerce, which is often granted by the PTO.The PTO provides for either the paper filing or the electronic filing of the application through itsTrademark Electronic Application System (TEAS). A partyother than the registrant can submit anoppositionto a proposed registration of a mark.The PTO registers a mark if it determines that the mark does not infringe any existing marks, the applicant has paid the registration fee (approximately $375), and other requirements for registering the mark have been met.Once the PTO has issued a registration of the mark, the owner is entitled to use the registered mark symbol®in connection with a registered trademark or service mark. The symbol®is used to designate marks that have been registered with the PTO. The use of the symbol®is not mandatory, although it is wise to use the®symbol to put others on notice that the trademark or service mark is registered with the PTO. Once a mark is registered, the mark is given nationwide effect, serves as constructive notice that the mark is the registrant’s personal property, and provides that federal lawsuits may be brought to protect the mark. The original registration of a mark is valid for 10 years, and it can be renewed for an unlimited number of 10-year periods.®A symbol that is used to designate marks that have been registered with the U.S. Patent and Trademark Office.While the application is pending with the PTO, the registrant cannot use the symbol®. However, during the application period, a registrant can use the symbolTMfor goods orSMfor services to alert the public to his or her legal claim. TM and SM may also be used by parties who claim a mark for goods or services but have not filed an application with the PTO to register the mark. In summary, TM and SM are used to designate unregistered trademarks and service marks, respectively.TMA symbol that designates an owner’s legal claim to an unregistered mark that is associated with a product.SMA symbol that designates an owner’s legal claim to an unregistered mark that is associated with a service.A party who sells goods and services using brand names and product or service names is not required to register these names with the PTO. The party who does not register a name with the PTO still has legal rights in the name and can sue to prevent others from using the name. The lawsuit will be in state court, however. A party can use the symbols TM and SM with his or her goods or services, respectively, even if there is no application pending at the PTO.A party may file for thecancelationof a previously registered mark if the party believes that the registrant did not meet the requirements for being issued the mark or if a mark has been abandoned.CONCEPT SUMMARYMeaning of Symbols Used in Association with Marks Symbol Meaning TM Unregistered mark used with goods SM Unregistered mark used with services ® Registered mark Types of MarksThe wordmarkcollectively refers totrademarks,service marks,certification marks, andcollective membership marks:trademarkA distinctive mark, symbol, name, word, motto, or device that identifies the goods of a particular business.service markA mark that distinguishes the services of the holder from those of its competitors.certification markA mark that certifies that a seller of a product or service has met certain geographical location requirements, quality standards, material standards, or mode of manufacturing standards established by the owner of the mark.collective membership markA mark that indicates that a person has met the standards set by an organization and is a member of that organization.Trademark.Atrademarkis a distinctive mark, symbol, name, word, motto, or device that identifies thegoodsof a particular business.ExamplesCoca-Cola(The Coca-Cola Company),Big Mac(McDonald’s Corporation),Mac(Apple Computer),Intel Inside(Intel Corporation),Better Ingredients. Better Pizza.(Papa John’s Pizza), andHarley(Harley-Davidson Motor Company) are trademarks.Service mark.Aservice markis used to distinguish theservicesof the holder from those of its competitors.ExamplesFedEx(FedEx Corporation),The Friendly Skies(United Airlines, Inc.),Big Brown(UPS Corporation),Weight Watchers(Weight Watchers International, Inc.), andCiti(Citigroup, Inc.) are service marks.Certification mark.Acertification markis a mark usually owned by a nonprofit cooperative or association. The owner of the mark establishes certain geographical location requirements, quality standards, material standards, or mode of manufacturing standards that must be met by a seller of products or services in order to use the certification mark. If a seller meets these requirements, the seller applies to the cooperative or association to use the mark on its products or in connection with the sale of services. The owner of the certification mark usually licenses sellers who meet the requirements to use the mark. A party does not have to be a member of the organization to use the mark.ExamplesAULmark certifies that products meet safety standards set by Underwriters Laboratories, Inc. TheGood Housekeeping Seal of Approvalcertifies that products meet certain quality specifications set byGood Housekeepingmagazine (Good Housekeeping Research Institute). Other certification marks areCertified Maine Lobster, which indicates lobster or lobster products originating in the coastal waters of the state of Maine (Maine Lobster Promotion Council);100% Napa Valley, which is associated with grape wine from the Napa Valley, California (Napa Valley Vintners Association); andGrown in Idaho, which indicates potatoes grown in the state of Idaho (State of Idaho Potato Commission).Collective membership mark.Acollective membership markis owned by an organization (such as an association) whose members use it to identify themselves with a level of quality or accuracy or other characteristics set by the organization. Only members of the association or organization can use the mark. A collective membership mark identifies membership in an organization but does not identify goods or services.ExamplesCPAis used to indicate that someone is a member of the Society of Certified Public Accountants,Teamsteris used to indicate that a person is a member of The International Brotherhood of Teamsters (IBT) labor union, andRealtoris used to indicate that a person is a member of the National Association of Realtors. Other collective marks areBoy Scouts of America,League of Women Voters, andNational Honor Society.Certain marks cannot be registered. They include (1) the flag or coat of arms of the United States, any state, municipality, or foreign nation; (2) marks that are immoral or scandalous; (3) geographical names standing alone (e.g., “South”); (4) surnames standing alone (note that a surname can be registered if it is accompanied by a picture or fanciful name, such asSmith Brothers cough drops); and (5) any mark that resembles a mark already registered with the federal PTO.CONCEPT SUMMARYTypes of Marks Trademark.A distinctive mark, symbol, name, word, motto, or device that identifies thegoodsof a particular business. Service mark.A mark used to distinguish theservicesof the holder from those of its competitors. Certification mark.A mark that establishes certain geographical location requirements, quality standards, material standards, or mode of manufacturing standards that must be met by a seller of products or services in order to use the certification mark. Collective membership mark.A mark owned by an organization whose members use it to identify themselves with a level of quality or accuracy or other characteristics set by the organization.Distinctiveness or Secondary MeaningTo qualify for federal protection, a mark must be either (1)distinctiveor (2) have acquired asecondary meaning:distinctiveBeing unique and fabricated.secondary meaningA brand name that has evolved from an ordinary term.Distinctive.A distinctive mark would be a word or design that is unique. It therefore qualifies as a mark. The words of the mark must not be ordinary words or symbols.ExamplesWords such aXerox(Xerox Corporation),Acura(Honda Motor Corporation),Google(Google Inc.),Exxon(Exxon Mobil Corporation), andPinkberry(Pinkberry, Inc.) are distinctive words and therefore qualify as marks.Secondary meaning.Ordinary words or symbols that have taken on a secondary meaning can qualify as marks. These are words or symbols that have an established meaning but have acquired a secondary meaning that is attached to a product or service.ExamplesJust Do It(Nike Corporation),I’m lovin’ it(McDonald’s Corporation),Windows(Microsoft Corporation), andBen & Jerry’s Ice Cream(Unilever) are ordinary words that have taken on a secondary meaning when used to designate the products or services of the owners of the marks.Words that are descriptive but have no secondary meaning cannot be trademarked.Trademark InfringementThe owner of a mark can sue a third party for the unauthorized use of the mark. To succeed in atrademark infringementcase, the owner must prove that (1) the defendant infringed the plaintiff’s mark by using it in an unauthorized manner and (2) such use is likely to cause confusion, mistake, or deception of the public as to the origin of the goods or services.trademark infringementUnauthorized use of another’s mark. The holder may recover damages and other remedies from the infringer.A successful plaintiff can recover (1) the profits made by the infringer through the unauthorized use of the mark, (2) damages caused to the plaintiff’s business and reputation, (3) an order requiring the defendant to destroy all goods containing the unauthorized mark, and (4) an injunction preventing the defendant from such infringement in the future. The court has discretion to award up totrebledamages where intentional infringement is found.WEB EXERCISEGo towww.videojug.com/film/how-to-spot-a-fake-louis-vuitton-bagand watch the video “How to Spot a Fake Louis Vuitton Bag.”The following case involves trademark infringement.EthicsKnockoff of Trademark Goods“When the manufacturer of knockoff goods offers a consumer a cheap knockoff copy . . . there is infringement.”—Sack, Circuit JudgeLouis Vuitton is a French fashion house that manufactures and distributes luxury consumer goods, including leather goods, purses, handbags, jewelry, shoes, and other high-end fashion apparel. Louis Vuitton owns many registered trademarks, including its well-known stylized, overlapping “LV” monogram. Louis Vuitton spends millions of dollars each year to advertise and market its trademarked goods.Chong Lam and Joyce Chan engaged in a large-scale operation involving the importation and sale of counterfeit luxury goods in the United States bearing trademarks owned by Louis Vuitton and others. Most of the goods were made in and imported from China. Lam and Chan used a variety of companies to facilitate the distribution of the counterfeit goods to retailers and vendors in the United States. Customs officials seized tens of thousands of counterfeit items in Houston, Los Angeles, Newark, New York, Norfolk, and elsewhere that were imported by the defendants. It is alleged that the defendants imported more than 300,000 handbags, wallets, and other knockoff products Louis Vuitton and other luxury brand trademarks.Louis Vuitton brought suit against Lam and Chan and their related companies in U.S. district court, alleging trademark infringement by the defendants. The district court granted summary judgment to plaintiff Louis Vuittonon its claims of trademark counterfeiting and infringement, awarded Louis Vuitton damages of $3 million and more than $500,000 in attorney’s fees and costs, and issued a permanent injunction barring the defendants from infringing Louis Vuitton’s trademarks. The U.S. court of appeals upheld the judgment. The court stated, “When the manufacturer of knockoff goods offers a consumer a cheap knockoff copy of the original manufacturer’s more expensive product, allowing the buyer to acquire the prestige of owning what appears to be the more expensive product, there is infringement.”Louis Vuitton Malletier S.A. v. LY USA, Inc., 676 F.3d 83, 2012 U.S. App. Lexis 6391 (United States Court of Appeals for the Second Circuit, 2012)Ethics Questions  Did the defendants act unethically? How prevalent do you think selling counterfeit goods is? Have you ever knowingly purchased a knockoff good?Generic NamesIf a word, name, or slogan is too generic, it cannot be registered as a trademark. If a word is not generic, it can be trademarked.ExamplesCritical Legal Thinking More than 5 percent of global trade is comprised of illegal knockoffs of clothing, handbags, toys, pharmaceuticals, and other products. Can such counterfeiting be curtailed successfully?The wordapplecannot be trademarked because it is a generic name or word. However, the brand nameApple Computeris permitted to be trademarked because it is not a generic name. The wordsecretcannot be trademarked because it is a generic name or word. However, the brand nameVictoria’s Secretis permitted to be trademarked because it is not a generic name.Once a company has been granted a trademark or service mark, the company usually uses the mark as a brand name to promote its goods or services. Obviously, the owner of the mark wants to promote its brand so that consumers and users will easily recognize the brand name.However, sometimes a company may betoosuccessful in promoting a mark, and at some point in time, the public begins to use the brand name as a common name to denote the type of product or service being sold rather than as the trademark or service mark of the individual seller. A trademark that becomes a common term for a product line or type of service is called ageneric name. Once a trademark becomes a generic name, the term loses its protection under federal trademark law.generic nameA term for a mark that has become a common term for a product line or type of service and therefore has lost its trademark protection.ExampleSailboards are boards that have sails mounted on them that people use to ride on water such as oceans and lakes. There were many manufacturers and sellers of sailboards. However, the most successful manufacturer of these sailboards used the trademarked brand name Windsurfer. However, the wordwindsurferwas used so often by the public for all brands of sailboards that the trademarked name Windsurfer was found to be a generic name, and its trademark was canceled.Exhibit8.2lists names that at one time were trademarked but lost trademark protection because the trademarked names became overused and generic.Exhibit8.3lists trademarked names that are at some risk of becoming generic names.The following once-trademarked names have been so overused to designate an entire class of products that they have been found to be generic and have lost their trademark status. Windsurfer Frisbee Laser Trampoline Escalator Cornflakes Kerosene Yo-yo Aspirin Raisin bran Thermos Tollhouse cookies Linoleum Nylon Cellophane Zipper Exhibit8.2Generic NamesCONCEPT SUMMARYTypes of Intellectual Property Protected by Federal Law Mark Proper Use Misuse Xerox “Copy this document on a Xerox brand copier.” “Go xerox this.” Google “Use the Google search engine to find information about him. “Just google him.” FedEx “Use FedEx overnight delivery service to send this package.” “Please fedex this.” Rollerblade “Let’s go inline skating on our Rollerblade inline skates.” “Let’s go rollerblading.” Certain trademark and service marks are often used improperly and have some risk in the future of becoming generic names. Several of these marks are listed below, with their proper use and typical misuse also noted:Exhibit8.3Names at Risk of Becoming Generic Names Type Subject Matter Term Patent Inventions (e.g., machines, processes, compositions of matter, designs for articles of manufacture, and improvements to existing machines and processes). Patents on articles of manufacture and processes: 20 years; design patents: 14 years. Invention must be novel, useful, and nonobvious. Public use doctrine:Patent is not granted if the invention was used in public for more than one year prior to the filing of the patent application. Copyright Tangible writing (e.g., books, magazines, newspapers, lectures, operas, plays, screenplays, musical compositions, maps, works of art, lithographs, photographs, postcards, greeting cards, motion pictures, newsreels, sound recordings, computer programs, and mask works fixed to semiconductor chips). Individual holder: life of author plus 70 years. Corporate holder: the shorter of either 120 years from the year of creation or 95 years from the year of first publication. Writing must be the original work of the author. TheFair use doctrine:Permits the use of copyrighted material without consent for limited uses (e.g., scholarly work, parody or satire, and brief quotation in news reports). Trademark Marks (e.g., name, symbol, word, logo, or device). Marks include trademarks, service marks, certification marks, and collective marks. Mark must be distinctive or have acquired a secondary meaning. Original registration: 10 years. Renewal registration: unlimited number of renewals for 10-year terms. Generic name: A mark that becomes a common term for a product line or type of service loses its protection under federal trademark law. DilutionMany companies that own trademarks spend millions of dollars each year advertising and promoting the quality of the goods and services sold under their names. Many of these become household names that are recognized by millions of consumers, such as Coca-Cola, McDonald’s, Microsoft, and Nike.Traditional trademark law protected these marks where an infringer used the mark and confused consumers as to the source of the goods or services. For example, if a knockoff company sold athletic shoes and apparel under the name Nike, there would be trademark infringement because there would be confusion as to the source of the goods.Often, however, a party uses a name similar to, or close to but not exactly identical to, a holder’s trademark name and sells other goods or services or misuses the name. Because there was no direct competition, the trademark owner often could not win a trademark infringement case.To address this problem, Congress enacted theFederal Trademark Dilution Act (FTDA)of 1995 to protect famous marks fromdilution.9The FTDA provides that owners of marks have a valuable property right in their marks that should not bediluted,blurred,tarnished, orerodedin any way by another.Federal Trademark Dilution Act (FTDA)A federal statute that protects famous marks from dilution, erosion, blurring, or tarnishing.Dilutionis broadly defined as the lessening of the capacity of a famous mark to identify and distinguish its holder’s goods and services, regardless of the presence or absence of competition between the owner of the mark and the other party. The two most common forms of dilution are blurring and tarnishment:Blurringoccurs where a party uses another party’s famous mark to designate a product or service in another market so that the unique significance of the famous mark is weakened.ExamplesExamples of blurring include Rolex skateboards or eBay toiletries.Tarnishmentoccurs where a famous mark is linked to products of inferior quality or is portrayed in an unflattering, immoral, or reprehensible context likely to evoke negative beliefs about the mark’s owner.ExampleAn example of tarnishment is using the mark Gucci on a deck of playing cards depicting sexually explicit graphics.Congress revised the FTDA when it enacted theTrademark Dilution Revision Actof 2006.10This act provides that a dilution plaintiff does not need to show that it has suffered actual harm to prevail in its dilution lawsuit but instead only needs to show that there would be thelikelihood of dilution. The FTDA, as amended, has three fundamental requirements that the holder of the senior mark must prove:Trademark Dilution Revision ActA federal statute that states that a plaintiff must only show that there is alikelihood of dilutionto prevail in a dilution lawsuit against a defendant. Its mark is famous. The use by the other party is commercial. The use by the other party causesa likelihood of dilutionof the distinctive quality of the mark.The following case involves the dilution of a famous mark.CASE 8.6FEDERAL COURT CASE Dilution of a TrademarkV Secret Catalogue, Inc. and Victoria’s Secret Stores, Inc. v. Moseley605 F.3d 382, Web 2010 U.S. App. Lexis 10150 (2010) United States Court of Appeals for the Sixth Circuit“The phrase ‘likely to cause dilution’ used in the new statute significantly changes the meaning of the law from ‘causes actual harm’ under the preexisting law.”—Merritt, Circuit JudgeFactsVictoria’s Secret is a successful worldwide retailer of women’s lingerie, clothing, and beauty products that owns the famous trademark “Victoria’s Secret.” A small store in Elizabethtown, Kentucky, owned and operated by Victor and Cathy Moseley, used the business names “Victor’s Secret” and “Victor’s Little Secret.” The store sold adult videos, novelties, sex toys, and racy lingerie. Victoria’s Secret sued the Moseleys, alleging a violation of the Federal Trademark Dilution Act of 1995. The case eventually was decided by the U.S. Supreme Court in favor of the Moseleys when the Court found that there was no showing ofactual dilutionby the junior marks, as required by the statute. Congress overturned the Supreme Court’s decision by enacting the Trademark Dilution Revision Act of 2006, which requires the easier showing of alikelihood of dilutionby the senior mark. On remand, the U.S. district court applied the new likelihood of confusion test, found a presumption of tarnishment of the Victoria’s Secret mark that the Moseleys failed to rebut, and held against the Moseleys. The Moseleys appealed to the U.S. court of appeals.IssueIs there tarnishment of the Victoria’s Secret senior mark by the Moseleys’ use of the junior marks Victor’s Secret and Victor’s Little Secret?Language of the CourtThe phrase “likely to cause dilution” used in the new statute significantly changes the meaning of the law from “causes actual harm” under the preexisting law. In the present case, the Moseleys have had two opportunities in the District Court to offer evidence that there is no real probability of tarnishment and have not done so. The defendants have given us no basis to reverse the judgment of the District Court.DecisionThe U.S. court of appeals affirmed the U.S. district court’s judgment in favor of Victoria’s Secret.Ethics Questions Do you think the Moseleys were trading off the famous Victoria’s Secret name? Do you think that the Moseleys had a legitimate claim to their business names because the husband’s name was Victor?The following feature discusses international treaties that protect intellectual property rights.Global LawInternational Protection of Intellectual PropertyRed Square, MoscowThere are many treaties that protect intellectual property rights internationally. Signatory countries to an intellectual property treaty must abide by the provisions of the treaty. In the copyright area, two major treaties are theBerne Conventionand theWIPO Copyright Treaty.In the patent area, two major treaties are theParis Conventionand thePatent Cooperation Treaty (PCT).In the trademark area, major treaties include theParis Convention,theMadrid Agreement and Protocol,and theNice Agreement.TheAgreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)protects patents, copyrights, trademarks, and other intellectual property rights internationally. Members of the World Trade Organization (WTO), of which there are more than 150 member nations, are subject to the provisions of TRIPS.Key Terms and Concepts ©(179) ®(185) Berne Convention(179) Blurring(190) Certification mark(186) Collective membership mark(186) Copyright(178) Copyright infringement(180) Copyright registration certificate(179) Copyright Revision Act(178) Copyright Term Extension Act(179) Design patent(177) Digital Millennium Copyright Act (DMCA)(184) Dilution(190) Distinctive(187) Economic Espionage Act (EEA)(172) Encryption technology(184) Fair use doctrine(182) Federal Patent Statute(173) Federal Trademark Dilution Act (FTDA)(190) First-to-file rule(176) First-to-invent rule(176) Generic name(188) Intellectual property(170) Lanham (Trademark) Act (Lanham Act)(184) Leahy-Smith America Invents Act (AIA)(176) Mark(184) Misappropriation of a trade secret(172) No Electronic Theft Act (NET Act)(183) Nonobvious(175) Novel(174) Patent(173) Patent application(173) Patent infringement(177) Patent number(173) Patent pending(173) Patent Trial and Appeal Board (PTAB)(173) Post-grant review(173) Pre-issuance challenge(173) Provisional application(173) Public domain (for copyright)(176) Public domain (for patent)(179) Requirements for obtaining a patent(174) Reverse engineering(171) Secondary meaning(187) Service mark(185) SM(185) Tangible writings(178) Tarnishment(190) TM(185) Trademark(185) Trade secret(171) Trademark Dilution Revision Act(190) Trademark Electronic Application System (TEAS)(184) Trademark infringement(187) Uniform Trade Secrets Act(171) U.S. Copyright Office(179) U.S. Court of Appeals for the Federal Circuit(173) U.S. Patent and Trademark Office (PTO)(173) Useful(175) Utility patent(174)Law Case with Answer FactsEugene F. Zannon and Gail Zannon filed an application on behalf of Freebies Publishing with the U.S. Patent and Trademark Office (PTO) to register the wordFreebiesas a trademark. The PTO granted applicant Freebies Publishing the registration of the wordFreebies. Thereafter, Freebies Publishing registered the Internet domain namefreebies.com. Freebies Publishing operated its business from the websitefreebies.com.Two years after Freebies Publishing was granted the trademark to the wordFreebies,Retail Services Inc. (RSI) registered the Internet domain namefreebie.comand began operating a website that promoted free offerings of goods and services for clients. RSI filed an action in federal court seeking an order that RSI’s use of the domain and website namefreebie.comdid not infringe Freebies Publishing’s trademark “Freebies” and that this trademark was generic and should be canceled. Is the wordfreebiesa generic word that does not qualify as a trademark and whose trademark status should be canceled?AnswerYes, the wordfreebiesis generic and does not qualify to be registered as a federal trademark. As a slang term,freebiemeans “something given or received without charge or an article or service given for free.” For a long time,freebiehas been understood to mean “something that is provided free.” Freebies Publishing’s site is but one of hundreds of websites that incorporate the wordfreebieorfreebiesinto their domain names. These websites are so common that the termfreebie siteis often used to refer to other sites that, like the one belonging to Freebies Publishing, offer information about free products or services. In addition, advertisements in newspapers and elsewhere often use the phrasefreebieto designate something that will be given to a consumer for free.Thus, in the public’s mind,freebiesindicates free or almost-free products and is not solely identified with the Zannons or their website. The wordfreebiesis a generic name, and a generic word cannot function as a trademark. Therefore, the trademark granted to Freebies Publishing for the wordFreebiesmust be canceled. RSI is permitted to operate its websitewww.freebie.com.Retail Services Inc. v. Freebies Publishing, 364 F.3d 535, 2004 U.S. App. Lexis 7130 (United States Court of Appeals for the Fourth Circuit, 2004)Critical Legal Thinking Cases 8.1PatentBernard Bilski and Rand Warsaw filed a patent application with the U.S. Patent and Trademark Office (PTO). The application sought patent protection for a claimed invention that explains how buyers and sellers of commodities in the energy market can hedge against the risk of price changes. The key claims are claims 1 and 4. Claim 1 describes a series of steps instructing how to hedge risk. Claim 4 puts the concept articulated in claim 1 into a simple mathematical formula. The remaining claims describe how claims 1 and 4 can be applied to allow energy suppliers and consumers to minimize the risks resulting from fluctuations in market demand for energy. The PTO rejected the patent application, holding that it merely manipulates an abstract idea and solves a purely mathematical problem. Bilski and Warsaw brought their case to the U.S. Supreme Court, arguing that their claimed invention deserved a patent.Is the claimed invention patentable?Bilski v. Kappos, Director, Patent and Trademark Office, 561 U.S. 593, 130 S.Ct. 3218, 2010 U.S. Lexis 5521 (Supreme Court of the United States, 2010) 8.2TrademarkZura Kazhiloti sold jewelry bearing the luxury brand names “Cartier” and “Van Cleef & Arpels” to jewelry stores. The retailers then sold the jewelry through their brick-and-mortar stores, through websites, and through the Internet auction site eBay. The jewelry was high-quality counterfeits, however, that Kazhiloti sold at high prices and made hundreds of thousands of dollars in revenues. Each piece of fake Cartier jewelry bore the Cartier stylized “C” design trademark and other Cartier design trademarks. Each piece of fake Van Cleef & Arpels jewelry bore the Van Cleef & Arpels or “VCA” design trademark and other Van Cleef & Arpels design trademarks. The counterfeit jewelry used stones of inferior quality, and inferior cuts, chains, and clasps compared to the authentic pieces. The counterfeit jewelry contained serial numbers similar to those used by Cartier and Van Cleef & Arpels. Kazhiloti supplied fake certificates of authenticity with each piece of jewelry. Eventually, Kazhiloti’s scheme was uncovered. In total, 24 pieces of counterfeit Cartier and 83 pieces of Van Cleef & Arpels jewelry were purchased or seized from the jewelry stores. Cartier International AG and Van Cleef & Arpels S.A. brought suit against Kazhiloti for trademark infringement. The plaintiffs sought a permanent injunction against Kazhiloti engaging in such activity and to recover monetary damages. Kazhiloti asserted his Fifth Amendment constitutional right against self-incrimination and refused to speak to authorities or produce any documents.Is Kazhiloti liable for trademark infringement?Cartier International A.G. and Van Cleef & Arpels S.A. v. Kazhiloti, 2013 U.S. Dist. Lexis 145278 (United States District Court for the District of New Jersey, 2013) 8.3CopyrightJames W. Newton Jr. is an accomplished avant-garde jazz composer and flutist. Newton wrote a composition for the song “Choir,” a piece for flute and voice that incorporated elements of African American gospel music. Newton owns the copyright to the composition “Choir.” The Beastie Boys, a rap and hip-hop group, used six seconds of Newton’s “Choir” composition in their song “Pass the Mic” without obtaining a license from Newton to do so. Newton sued the Beastie Boys for copyright infringement. The Beastie Boys defended, arguing that their use of six seconds of Newton’s song wasde minimis(minimal) and therefore fair use.Does the incorporation of a short segment of a copyrighted musical composition into a new musical recording constitute fair use, or is it copyright infringement?Newton v. Beastie Boys, 349 F.3d 591, 2003 U.S. App. Lexis 22635 (United States Court of Appeals for the Ninth Circuit, 2003) 8.4TrademarkKraft Foods Group Brands LLC (Kraft) is a well-known manufacturer of food products sold in more than 15,000 grocery stores located throughout the United States. Many of its packaged cheeses that are sold in outlets are available under Kraft’s trademarked “Cracker Barrel” label. Kraft has been selling cheeses in grocery stores under the Cracker Barrel trademark for more than 50 years. Cracker Barrel Old Country Store, Inc. (CBOCS) operates a well-known chain of more than 600 low-price restaurants. On learning that CBOCS planned to sell a variety of food products in grocery stores under the logo “Cracker Barrel Old Country Store,” Kraft filed a lawsuit for trademark infringement. Kraft argues that consumers will be confused by the similarity of the names and alleges that it will be hurt financially. Kraft filed for an injunction to prevent CBOCS from selling product containing the “Cracker Barrel” name in grocery stores.Will CBOCS’s use of the Cracker Barrel name on the food products it proposes to sell in grocery stores infringe on the Kraft’s Cracker Barrel trademark?Kraft Foods Group Brands LLC v. Cracker Barrel Old Country Store, Inc., 735 F.3d 735 2013 U.S. App. Lexis 23124 (United States Court of Appeals for the Seventh Circuit, 2013) 8.5CopyrightDodger Productions, Inc. and Dodger Theatricals, Ltd. (Dodger) produced a stage musical calledJersey Boys. The musical is a historical dramatization about the American 1960s rock ‘n’ roll singing group called the Four Seasons and the lives of its members. The musical contains hit songs of the Four Seasons, including “Sherry,” “Big Girls Don’t Cry,” “Rag Doll,” “Stay,” “Working My Way Back to You,” “Dawn,” and other songs. Each band member narrates one of the play’s four acts and offers his take on the group’s history.The Ed Sullivan Showwas a weekly television show from 1948 to 1971 that highlighted many singing groups. The Four Seasons appeared and sang onThe Ed Sullivan Showon January 2, 1966. SOFA Entertainment, Inc. (SOFA) owns copyrights to the entire run ofThe Ed Sullivan Show, including the appearance of the Four Seasons.At the end of the first act ofJersey Boys, a seven-second clip is shown on a screen hanging over the center of the stage of the Four Seasons’ television appearance onThe Ed Sullivan Show. The clip shows Ed Sullivan assuming his signature pose and introducing the band to his studio and television audiences, saying, “Now ladies and gentlemen, here, for all of the youngsters in the country, the Four Seasons.” Ed Sullivan turns, and with an extended arm and open palm, directs the attention of the theater audience to the stage. At this point in theJersey Boysproduction, the screen goes dark and the singers perform a rendition of the Four Seasons song “Dawn.” SOFA sued Dodger for copyright infringement. Dodger asserted the defense of fair use.Was Dodger’s use of the seven-second clip fromThe Ed Sullivan Showin itsJersey Boysmusical production fair use of a copyrighted work?SOFA Entertainment, Inc. v. Dodger Productions, Inc., 709 F.3d 1273, 2013 U.S. App. Lexis 4830 (United States Court of Appeals for the Ninth Circuit, 2013) 8.6CopyrightCecilia Gonzalez downloaded more than 1,300 copyrighted songs on her computer using a file-sharing network during a few weeks, and she kept them on her computer until she was caught. BMG Music, which owns the copyrights on many of the songs she downloaded, sued Gonzalez for copyright infringement of 30 of these songs. Gonzalez defended, arguing that her downloading of these copyrighted songs was lawful. Gonzalez’s position was that she was just sampling music to determine what she liked enough to buy at retail. She also defended by arguing that other persons were greater offenders than she was.Is Gonzalez liable for copyright infringement?BMG Music v. Gonzalez, 430 F.3d 888, 2005 U.S. App. Lexis 26903 (United States Court of Appeals for the Seventh Circuit, 2005)Ethics Cases 8.7Ethics CaseIntel Corporation is a large company that distributes its entire line of products and services under the registered trademark and service mark INTEL. The company also owns numerous marks that incorporate its INTEL marks as a permanent component, such as the marks INTEL INSIDE, INTEL SPEEDSTEP, INTEL XEON, and INTEL NETMERGE. Intelsys Software, LLC, which is owned by another party, develops software applications for network utilities and wireless applications. Intelsys uses the mark Intelsys Software and maintains a website atwww.intelsys.com. Intel Corporation brought an action in U.S. district court against Intelsys Software, LLC, alleging that Intelsys infringed on Intel’s trademarks and service marks, in violation of the Lanham Act. Intel filed a motion for judgment and a permanent injunction against Intelsys’s use of the mark INTEL in any of its company, product, or service names.Intel Corporation v. Intelsys Software, LLC, 2009 U.S. Dist. Lexis 14761 (United States District Court for the Northern District of California, 2009) Is there trademark infringement? Should a permanent injunction be issued against the defendant’s use of the name Intelsys? Did Intelsys act ethically in this case? 8.8Ethics CaseElvis Presley, a rock ‘n’ roll singer, became a musical icon during a career that spanned more than twenty years, until he died at the age of 42. Many companies and individuals own copyrights to Presley’s songs, lyrics, photographs, movies, and appearances on television shows. Millions of dollars of Elvis Presley–related copyrighted materials are sold or licensed annually.Passport Video produced a video documentary titledThe Definitive Elvis, comprising sixteen one-hour episodes. The producers interviewed more than 200 peopleregarding virtually all aspects of Elvis’s life. Passport sold the videos commercially for a profit. Approximately 5 to 10 percent of the videos were composed of copyrighted music and appearances of Presley on television and in movies owned by copyright holders other than Passport. Passport did not obtain permission to use those copyrighted works. Elvis Presley Enterprises, Inc., and other companies and individuals that owned copyrights to the Presley works used by Passport sued Passport for copyright infringement. Passport defended, arguing that its use of the copyrighted materials was fair use. The U.S. district court held in favor of the plaintiff copyright holders and enjoined Passport from further distribution of its documentary videos. Passport appealed.Elvis Presley Enterprises, Inc. v. Passport Video, 349 F.3d 622, 2003 U.S. App. Lexis 22775 (United States Court of Appeals for the Ninth Circuit) Did Passport act ethically in including the Elvis Presley copyrighted material in its video? Why do you think Passport Video did so? Has there been fair use in this case, or has there been copyright infringement?

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