Intellectual Property Cases Outline
Intellectual property consists of four areas: patents, copyrights, trademarks, and (less significantly) trade secrets. Federal statutes have largely defined the rights and obligations of inventors, artists, entrepreneurs, and others seeking to protect their work. However, a student of this topic also must understand how courts have interpreted these statutes and developed complementary doctrines. Below is an outline of key cases in intellectual property with links to the full text of virtually every case, provided free by Justia.
Scope of Patent Protection
A patent may be available for anyone who invents or discovers a new and useful process, machine, manufacture, or composition of matter, or any improvement of these things that is new and useful. However, a patent is not available for an abstract idea, a natural phenomenon, or a law of nature.
Diamond v. Chakrabarty 一 A live, human-made micro-organism is patentable subject matter.
Association for Molecular Pathology v. Myriad Genetics, Inc. 一 A naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but cDNA is patent eligible because it is not naturally occurring.
Funk Bros. Seed Co. v. Kalo Inoculant Co. 一 Patents cannot issue for the discovery of the phenomena of nature. If there is to be an invention from such a discovery, it must come from the application of the law of nature to a new and useful end.
Brenner v. Manson 一 The requirement that a chemical process be useful is not satisfied by a showing that the compound yielded belongs to a class of compounds that scientists are screening for possible uses.
State Street Bank & Trust Co. v. Signature Financial Group, Inc. 一 The transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price constitutes a practical application of a mathematical algorithm, formula, or calculation because it produces a useful, concrete, and tangible result.
Juicy Whip, Inc. v. Orange Bang, Inc. 一 The fact that a product can be altered to make it look like another product is a specific benefit sufficient to satisfy the utility requirement.
Coffin v. Ogden 一 The defense of a prior invention was established when the defendant proved that the instrument that he alleged was invented by him was complete and capable of working, it was known to at least five people and probably others, and it was put in use, tested, and successful.
Gayler v. Wilder 一 Prior invention and use did not preclude a subsequent inventor from taking out a patent when a person had made and used an article similar to the patented invention but did not make their discovery public and did not test it to discover its usefulness, after which it was forgotten or abandoned.
In re Cruciferous Sprout Litigation 一 To prove that a claim is anticipated, defendants must present clear and convincing evidence that a single prior art reference discloses, either expressly or inherently, each limitation of the claim.
Graham v. John Deere Co. 一 The determination of nonobviousness is made after establishing the scope and content of prior art, the differences between the prior art and the claims at issue, and the level of ordinary skill in the pertinent art.
Sakraida v. Ag Pro, Inc. 一 Producing a desired result in a cheaper and faster way does not qualify for a combination patent without producing a new or different function.
KSR Int’l Co. v. Teleflex, Inc. 一 In determining whether a combination patent is appropriate, or whether it fails for obviousness, a court must ask whether the improvement is more than the predictable use of prior art elements according to their established functions.
In re Dillon 一 Determining that a reference is from a non-analogous art involves deciding whether the reference is within the field of the inventor’s endeavor and then, if not, whether the reference is reasonably pertinent to the particular problem with which the inventor was involved.
Oddzon Products, Inc. v. Just Toys, Inc. 一 Subject matter derived from another not only is itself unpatentable to the party who derived it but also, when combined with other prior art, may make a resulting obvious invention unpatentable to that party.
Bilski v. Kappos 一 Although the machine-or-transformation test may be a useful and important clue or investigative tool, it is not the sole test for deciding whether an invention is a patent-eligible process.
Mayo Collaborative Services v. Prometheus Laboratories, Inc. 一 When the laws of nature recited by patent claims are not themselves patentable, the claimed processes are not patentable unless they have additional features that provide practical assurance that the processes are genuine applications of those laws.
Alice Corp. v. CLS Bank Int’l 一 When claims are drawn to the abstract idea of intermediated settlement, merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention.
Priority of Inventions
Patent protection is not available to an invention that was already known or used in the U.S., or that was patented or described in a printed publication anywhere in the world before the date of its invention by the applicant.
Griffith v. Kanamaru 一 Public policy favors the early disclosure of inventions, which underlies the requirement for reasonable diligence in reducing an invention to practice. The reasonable diligence standard balances the interest in rewarding and encouraging invention with the public’s interest in the earliest possible disclosure of innovation.
Mason v. Hepburn 一 Suppressing a completely private invention and then revealing it after another inventor created it prevents the suppressed invention from serving as prior art to prevent a new patent.
Statutory Bars for Patents
Patent protection is not available when an invention was patented or described in a printed publication anywhere in the world, or when it was in public use or on sale in the U.S. for more than one year before the date of the application. Moreover, protection is not available if the invention was placed on sale in the U.S. by anyone more than one year before the application. Bars related to abandonment and delayed filing after a foreign application also apply.
Egbert v. Lippmann 一 To constitute the public use of an invention, it is not necessary that more than one of the patented articles should be publicly used. Also, whether the use is public or private does not necessarily depend on the number of persons to whom its use is known. Finally, if an inventor sells a machine of which their invention forms a part, and they allow it to be used without restriction of any kind, the use is public.
City of Elizabeth v. American Nicholson Pavement Co. 一 The use of an invention by the inventor or people under their direction, if made in good faith solely to test its qualities, remedy its defects, and bring it to perfection, is not a public use that precludes a patent even if others thereby derive a knowledge of it.
Pfaff v. Wells Electronics, Inc. 一 The on-sale bar applies when two conditions are satisfied before the critical date: the product is the subject of a commercial offer for sale, and the invention is ready for patenting.
Macbeth-Evans Glass Co. v. General Electric Co. 一 Someone who has discovered and perfected an invention cannot employ it secretly for more than nine years for purposes of profit and then secure a patent upon encountering difficulty in preserving the secret so that they extend their previous monopoly for the further period fixed by the patent laws.
Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc. 一 A commercial sale to a third party who is required to keep the invention confidential may place the invention “on sale.”
Patent Infringement
Infringement sometimes is literal, which means that the infringing device infringes every limitation of the claim for a patented invention. In other cases, infringement occurs under the doctrine of equivalents, which means that the device infringes on the patented invention because it has only insubstantial differences from the invention.
Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical Co. 一 The doctrine of equivalents must be applied to individual elements of the claim, rather than the invention as a whole. The essential inquiry is whether the accused product or process contains elements that are identical or equivalent to each claimed element of the patented invention.
Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. 一 The patentee can overcome the presumption that prosecution history estoppel bars a finding of equivalence when the equivalent was unforeseeable at the time of the application, the rationale underlying the amendment bears no more than a tangential relation to the equivalent in question, or there is another reason suggesting that the patentee could not reasonably be expected to have described the insubstantial substitute in question.
Global-Tech Appliances, Inc. v. SEB S.A. 一 Induced infringement of a patent requires knowledge that the induced acts constitute patent infringement. Deliberate indifference to a known risk that a patent exists does not satisfy the knowledge required.
Defenses to Patent Infringement
In addition to arguing that the patented invention did not meet a statutory requirement for patentability, a defendant might raise the defense of an experimental use. This means that the allegedly infringing use was not public or commercial but simply designed to test whether the product works properly. Other defenses include patent exhaustion and the “reverse doctrine of equivalents."
Madey v. Duke University 一 An act does not qualify for the experimental use defense if the act is in furtherance of the alleged infringer’s legitimate business and is not solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry. The profit or non-profit status of the user is not determinative.
Adams v. Burke 一 When the patentee, or the person having their rights, sells a machine or instrument whose sole value is in its use, they receive the consideration for its use and part with the right to restrict that use.
Mallinckrodt, Inc. v. Medipart, Inc. 一 In general, a restriction may be placed on the sale of a patented article if it is reasonably within the patent grant, but not when the patentee has ventured beyond the patent grant and into behavior having an anti-competitive effect not justifiable under the rule of reason.
Quanta Computer, Inc. v. LG Electronics, Inc. 一 The patent exhaustion doctrine provides that a patented item’s initial authorized sale terminates all patent rights to that item. This doctrine applies to method patents.
Bowman v. Monsanto Co. 一 Patent exhaustion does not permit a farmer to reproduce patented seeds through planting and harvesting without the patent holder’s permission.
Impression Products, Inc. v. Lexmark International, Inc. 一 A patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions that the patentee purports to impose.
Westinghouse v. Boyden Power Brake Co. 一 Even if the patentee brings the defendant within the letter of their claims, infringement should not be found if the defendant has so far changed the principle of the device that the claims of the patent, literally construed, have ceased to represent their actual invention.
Special Equipment Co. v. Coe 一 A subcombination patent may be used to prevent appropriation by others of a combination invention that the claimant is using when there is no purpose to enlarge the patent monopoly of either invention.
Nautilus, Inc. v. Biosig Instruments, Inc. 一 A patent is invalid for indefiniteness if its claims, read in light of the patent’s specification and prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.
Microsoft Corp. v. i4i Limited Partnership 一 An alleged infringer must prove a patent invalidity defense by clear and convincing evidence.
Commil USA, LLC v. Cisco Systems, Inc. 一 A defendant’s belief regarding patent validity is not a defense to an induced infringement claim.
Remedies for Patent Infringement
A patent holder may receive a temporary or permanent injunction, but damages are often preferred by courts. Damages may be calculated as a reasonable royalty, but sometimes lost profits may be available. Treble damages may be available when the infringement was willful.
Georgia-Pacific Corp. v. U.S. Plywood Corp. 一 (The case lists 15 factors pertinent to determining the amount of a reasonable royalty for a patent license.)
Rite-Hite Corp. v. Kelly Co., Inc. 一 If a particular injury was or should have been reasonably foreseeable by an infringing competitor in the relevant market, broadly defined, that injury is generally compensable unless there is a persuasive reason to the contrary.
Halo Elecs., Inc. v. Pulse Elecs., Inc. 一 Enhanced damages under the Patent Act are not to be meted out in a typical infringement case but are instead designed as a “punitive” or “vindictive” sanction for egregious infringement behavior.
Samsung Electronics Co. v. Apple, Inc. 一 In the case of a multicomponent product, the relevant “article of manufacture” for arriving at a damages award need not be the end product sold to the consumer but may be only a component of that product.
eBay, Inc. v. MercExchange, LLC 一 The traditional four-factor test for deciding whether to award permanent injunctive relief applies to patent disputes.
Preemption by Patent Laws
Federal laws, such as patent laws, can preempt state laws when they conflict. This often means that enforcing the state law would prevent the federal law from achieving its intended objectives.
Bonito Boats, Inc. v. Thunder Craft Boats, Inc. 一 By offering patent-like protection for ideas deemed unprotected under the federal patent scheme, a state law conflicted with the strong federal policy favoring free competition in ideas that do not merit patent protection.
Sears, Roebuck & Co. v. Stiffel Co. 一 When design and mechanical patents are invalid for want of invention, a state unfair competition law cannot be used to get an injunction against copying the product or an award of damages for such copying.
Scope of Copyright Protection
To qualify for copyright protection, a work must have originality and must be fixed in a tangible medium of expression. Facts and ideas generally do not qualify for copyright protection, which covers only the expression of the idea.
Feist Publications, Inc. v. Rural Telephone Service Co., Inc. 一 The originality requirement necessitates independent creation plus a modicum of creativity. Although a compilation of facts may possess the requisite originality because the author typically chooses which facts to include, in which order to place them, and how to arrange the data so that readers may use them effectively, copyright protection extends only to those components of the work that are original to the author.
Bleistein v. Donaldson Lithographing Co. 一 The least pretentious picture has more originality in it than directories, which may be copyrighted.
Hearn v. Meyer 一 To obtain a copyright upon a reproduction of a work of art, the work must contain some substantial rather than trivial originality.
Baker v. Selden 一 A claim to the exclusive property in a peculiar system of bookkeeping cannot be maintained by the author of a treatise in which that system is exhibited and explained.
Hoehling v. Universal City Studios, Inc. 一 Copyright protection does not extend to “scenes a faire,” which are incidents, characters, or settings that are essentially indispensable or at least standard in the treatment of a certain topic.
Pictorial, Graphical, Sculptural, and Architectural Works
Copyright protection is available for the design of a useful object if its pictorial, graphical, or sculptural elements can be identified separately from the utilitarian elements of the object and can exist independently. Meanwhile, the design of an architectural work may receive copyright protection when it has been embodied in the form of a plan, drawing, or building.
Mazer v. Stein 一 Artistic articles are protected in form, but not their mechanical or utilitarian aspects.
Brandir International, Inc. v. Cascade Pacific Lumber Co. 一 If design elements reflect a merger of aesthetic and functional considerations, the artistic aspects of a work are not conceptually separable from the utilitarian elements. Conceptual separability exists when design elements can be identified as reflecting the designer’s artistic judgment exercised independently of functional influences.
Kieselstein-Cord v. Accessories by Pearl, Inc. 一 Belt buckles bearing sculptured designs cast in precious metals and principally used for decoration were copyrightable because the primary ornamental aspect of the buckles was conceptually separable from their subsidiary utilitarian function.
Carol Barnhart, Inc. v. Economy Cover Corp. 一 Mannequins of partial human torsos used to display articles of clothing are utilitarian articles not containing separable works of art and thus are not copyrightable.
Hunt v. Pasternack 一 Since the copyright is in the design as embodied not only in a building, but alternatively in the architectural plans, construction of the actual building is not required.
Leicester v. Warner Brothers 一 Streetwall towers were not a sculptural work that was conceptually separate from the building, since they were designed to extend the building visually along two streets in similar ways and were part of the functional and architectural vocabulary of the building.
Star Athletica, LLC v. Varsity Brands, Inc. 一 A feature incorporated into the design of a useful article is eligible for copyright protection only if the feature can be perceived as a two- or three-dimensional work of art separate from the useful article, and it would qualify as a protectable pictorial, graphic, or sculptural work (on its own or fixed in another tangible medium of expression) if it were imagined separately from the useful article into which it is incorporated.
Derivative Works
A derivative work is based on a pre-existing original work and can potentially receive protection if the pre-existing work was used with the permission of the copyright holder or has entered the public domain. However, the copyright will apply only to any original elements of the work.
Gracen v. Bradford Exchange 一 A derivative work must be substantially different from the underlying work to be copyrightable.
Anderson v. Stallone 一 Characters were delineated so extensively that they were protected from bodily appropriation when taken as a group and transposed into a sequel by another author.
Silverman v. CBS, Inc. 一 Copyrights in derivative works secure protection only for the incremental additions of originality contributed by the authors of the derivative works. This principle is fully applicable to works that provide further delineation of characters already sufficiently delineated to warrant copyright protection.
Joint Works and Works for Hire
A joint work is a work prepared by multiple authors who intended that their contributions would be merged into inseparable or interdependent parts of a unitary whole. A work for hire may be prepared by an employee in the course of their employment, but it must meet certain statutory requirements if it is prepared by an independent contractor.
Childress v. Taylor 一 A work qualifies as a joint work only when both authors intended at the time when the work was created that their contributions would be merged into inseparable or interdependent parts of a unitary whole.
Community for Creative Non-Violence v. Reid 一 A creator was an independent contractor when he engaged in a skilled occupation, supplied his own tools, worked in a separate workplace, was retained for a short period of time, had absolute freedom to decide when and how long to work, and had total discretion in hiring and paying assistants, among other factors.
Rights of Copyright Ownership
A copyright owner holds the exclusive right to prevent others from engaging in certain activities related to the work without authorization. In general, these activities include reproduction, distribution, performance, display, and the preparation of derivative works.
Quality King Distributors, Inc. v. L’Anza Research Int’l, Inc. 一 The first sale doctrine endorsed in Section 109(a) is applicable to imported copies.
Kirtsaeng v. John Wiley & Sons, Inc. 一 The first sale doctrine applies to copies of a copyrighted work lawfully made abroad.
Columbia Pictures Industries, Inc. v. Redd Horne, Inc. 一 The transmission of a performance to members of the public, even in private settings such as hotel rooms or viewing rooms in a store, constitutes a public performance. The fact that members of the public view the performance at different times does not alter this legal consequence.
Stewart v. Abend 一 Assignees of the right to produce a derivative work or some other portion of the renewal rights hold nothing but an unfulfilled and unenforceable expectancy if the author dies before the renewal period, unless the assignees secure a transfer of the renewal rights from the author’s statutory successor.
Mills Music, Inc. v. Snyder 一 Congress did not intend to draw a distinction between authorizations to prepare derivative works that are based on a single direct grant and those that are based on successive grants.
Copyright Infringement
In addition to proving that they hold a valid copyright, a plaintiff in an infringement action must prove that the defendant copied their work. This means that the defendant had access to the copyrighted work and that the works are substantially similar.
Stillman v. Leo Burnett Co., Inc. 一 A plaintiff can establish copying by showing that the defendant had access to the plaintiff’s work and that the two works are substantially similar. Establishing substantial similarity involves showing that the defendant copied from the plaintiff’s work and that the copying went so far as to constitute an improper appropriation.
Bright Tunes Music Corp. v. Harrisongs Music, Ltd. 一 Copyright infringement can occur even when it is subconsciously accomplished.
Arnstein v. Porter 一 On the issue of illicit copying (unlawful appropriation), the test is the response of the ordinary lay hearer. Dissection and expert testimony are irrelevant.
Nichols v. Universal Pictures Corp. 一 The less developed the characters, the less that they can be copyrighted.
Computer Associates International, Inc. v. Altai, Inc. 一 A court should use an abstraction-filtration-comparison test to assess substantial similarity for computer program structure. This involves breaking down the allegedly infringed program into its constituent structural parts, sifting out the non-protectable material from each part, and comparing the remaining kernel of creative expression with the structure of an allegedly infringing program.
Apple Computer, Inc. v. Microsoft Corp. 一 Determining whether copying sufficient to constitute infringement has occurred involves a two-part test with extrinsic and intrinsic components. The extrinsic test objectively considers whether there are substantial similarities in both ideas and expression, while the intrinsic test measures expression subjectively.
Kohus v. Mariol 一 When the target audience has specialized expertise, similarity should be considered from the specialist’s perspective.
Sega Enterprises, Ltd. v. Accolade, Inc. 一 A person who is neither a copyright holder nor a licensee may disassemble a copyrighted computer program to gain an understanding of the unprotected functional elements of the program when they have a legitimate reason for doing so, and when no other means of access to the unprotected elements exists.
ABC v. Aereo, Inc. 一 A streaming service infringed the public performance right by selling its subscribers a technologically complex service that allowed them to watch television programs over the Internet at about the same time as the programs were broadcast over the air.
Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC 一 A copyright claimant may commence an infringement lawsuit only when the Copyright Office registers a copyright. Upon registration of the copyright, the copyright owner can recover damages for infringement both before and after registration.
Fair Use
A defendant sometimes may be able to argue a fair use defense to infringement. The four fair use factors are the purpose and character of the use, the nature of the copyrighted work, the amount and significance of the copied portion, and the market effect on the copyrighted work, which is sometimes considered the most important factor.
Folsom v. Marsh 一 Deciding whether a use is justifiable requires considering the nature and objects of the selections made, the quantity and value of the materials used, and the degree to which the use may prejudice the sale, diminish the profits, or supersede the objects of the original work.
Harper & Row v. Nation Enterprises 一 Generally, the author’s right to control the first public appearance of their un-disseminated expression will outweigh a claim of fair use.
Princeton University Press v. Michigan Document Services, Inc. 一 Although the ultimate use of the infringing material was non-commercial, the fair use doctrine did not shield the duplication of copyrighted materials for sale by a for-profit corporation that chose to maximize its profits and give itself a competitive edge by declining to pay royalties to the copyright holders.
Campbell v. Acuff-Rose Music, Inc. 一 The cognizable harm under the fourth factor of the fair use test is market substitution, rather than harm from criticism. A parody is unlikely to act as a substitute for the original work, since the two works usually serve different market functions.
Suntrust Bank v. Houghton Mifflin Co. 一 The for-profit status of a parody was strongly overshadowed and outweighed in view of its highly transformative use of the original work’s copyrighted elements.
Universal City Studios, Inc. v. Corley 一 Fair use has never been held to be a guarantee of access to copyrighted material in order to copy it by the fair user’s preferred technique or in the format of the original.
U.S. v. Elcom, Ltd. 一 There is no generally recognized right to make a copy of a protected work, regardless of its format, for personal non-commercial use.
Secondary Infringement
Sometimes an entity does not directly violate a copyright but instead facilitates infringement by others. The main theories of secondary infringement are contributory infringement and vicarious liability, although the Supreme Court also has developed an “active inducement” theory.
Sony Corp. of America v. Universal City Studios, Inc. 一 The sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes, or is merely capable of substantial non-infringing uses.
A&M Records, Inc. v. Napster, Inc. 一 Contributory liability requires that the secondary infringer knew or had reason to know of direct infringement and induced, caused, or materially contributed to the infringing conduct. Vicarious liability arises when a defendant has the right and ability to supervise the infringing activity and has a direct financial interest in the activity.
MGM Studios, Inc. v. Grokster, Ltd. 一 An entity that distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, going beyond mere distribution with knowledge of third-party action, is liable for the resulting acts of infringement by third parties using the device, regardless of the device’s lawful uses.
Remedies for Copyright Infringement
A copyright owner may get an injunction, but damages are more common. A plaintiff can receive actual damages plus profits or statutory damages, although they generally must have registered their work before the infringement occurred to be eligible for statutory damages.
On Davis v. The Gap, Inc. 一 Damages for infringement should not be based on undue speculation. Any entitlement to the infringer’s profits is limited to profits attributable to the infringement. Punitive damages are generally not awarded in a statutory infringement action.
Abend v. MCA, Inc. 一 When great public injury would result from an injunction, courts may award damages or a continuing royalty instead of an injunction.
Fogerty v. Fantasy, Inc. 一 Prevailing plaintiffs and prevailing defendants in copyright infringement cases must be treated similarly regarding attorney fees, which may be awarded to prevailing parties only as a matter of the court’s discretion.
Preemption by Copyright Laws
Federal copyright law may preempt state laws regarding a work that falls within the subject matter covered by federal law and that has been fixed in a tangible medium of expression. A state law is not preempted if it protects rights that are not equivalent to any exclusive right under federal law.
NBA v. Motorola, Inc. 一 A hot news misappropriation claim under state law is limited to cases involving the following five components: a plaintiff generates or gathers information at a cost, the information is time-sensitive, a defendant’s use of the information constitutes free riding on the plaintiff’s efforts, the defendant is in direct competition with a product or service offered by the plaintiff, and the ability of other parties to free ride on the efforts of the plaintiff or others would reduce the incentive to produce the product or service to the point that its existence or quality would be substantially threatened.
Association of American Medical Colleges v. Carey 一 A state law that safeguards or injures property rights protected by the federal Copyright Act is preempted.
ProCD, Inc. v. Zeidenberg 一 Whether a particular license is generous or restrictive, a simple two-party contract is not equivalent to any of the exclusive rights within the general scope of copyright and therefore may be enforced.
Scope of Trademark Protection
A trademark generally must be distinctive to receive protection. Arbitrary and fanciful or suggestive terms are inherently distinctive, while generic terms are unprotectable, and descriptive terms may be protectable if they have secondary meaning. Certain subject matter is categorically unprotectable.
Microstrategy, Inc. v. Motorola, Inc. 一 A trademark must be used in such a manner that its nature and function are readily apparent and recognizable without extended analysis.
G. Heileman Brewing Co., Inc. v. Anheuser-Busch, Inc. 一 Consumer perception should be assessed by examining the average potential consumer in the context of the existing marketplace and exposed to the information currently available in the marketplace.
In re Dial-a-Mattress Operating Corp. 一 The commercial impression of a trademark is derived from the mark as a whole, rather than from its elements separated and considered in detail. Thus, it should be considered in its entirety.
In re Mavety Media Group, Ltd. 一 Whether a mark comprises scandalous matter is to be ascertained from the standpoint of a substantial composite of the general public in the context of contemporary attitudes.
Gold Seal Co. v. Weeks 一 Deception is found when an essential and material element is misrepresented, is distinctly false, and is the element on which the customer reasonably relies in purchasing one product over another. When the product contains an element that can only be known exactly by rigid scientific analysis, and the element does not appear determinative in leading customers to buy the product, the mark is not deceptive.
TrafFix Devices, Inc. v. Marketing Displays. Inc. 一 A product feature is functional if it is essential to the use or purpose of the article or affects the cost or quality of the article. Also, a functional feature is one the exclusive use of which would put competitors at a significant non-reputation-related disadvantage.
America Online, Inc. v. AT&T Corp. 一 Even if a functional feature has achieved consumer recognition of that feature as an indication of origin, the feature cannot serve as a legally protectable symbol.
Weiss Noodle Co. v. Golden Cracknel and Specialty Co. 一 Nobody can be granted the exclusive use of the name of an article, either in English or its equivalent in any foreign language.
Ritchie v. Simpson 一 An opposer to registration must have a real interest in the proceedings and a reasonable basis for their belief of damage.
Matal v. Tam 一 The disparagement provision of the Lanham Act, prohibiting the registration of trademarks that may disparage or bring into contempt or disrepute any persons living or dead, violates the Free Speech Clause of the First Amendment.
Iancu v. Brunetti 一 The Lanham Act’s prohibition on registration of immoral or scandalous trademarks violates the First Amendment.
Dastar Corp. v. Twentieth Century Fox Film Corp. 一 Section 43(a) of the Lanham Act does not prevent the unaccredited copying of an uncopyrighted work.
Trade Dress
The image (look and feel) of certain goods or services is known as trade dress and may qualify for protection. Consumers must be likely to confuse the goods or services offered by the trade dress user with those offered by their competitors.
Two Pesos, Inc. v. Taco Cabana, Inc. 一 Trade dress that is inherently distinctive is protectable without a showing that it has acquired secondary meaning.
Qualitex Co. v. Jacobson Products Co. 一 The Lanham Act permits the registration of a trademark that consists, purely and simply, of a color.
In re Owens-Corning Fiberglas Corp. 一 Even if a color is considered to be ornamental, this does not prevent it from acting as a trademark.
Wal-Mart Stores, Inc. v. Samara Brothers, Inc. 一 In an action for infringement of unregistered trade dress under Section 43(a) of the Lanham Act, the design of a product is distinctive and therefore protectable only upon a showing of secondary meaning.
Sound Trademarks
Trademark protection may be available for sounds that are distinctive and non-functional. However, limits based on the overlap with copyright law may apply.
EMI Catalogue Partnership v. Hill 一 Allowing a song to serve as an identifying mark of the song would stretch the definition of trademark too far into an area protected by copyright law.
Oliveira v. Frito-Lay, Inc. 一 A performing artist cannot acquire a trademark or service mark signifying herself in a recording of her own famous performance.
Geographic Limits on Trademark Rights
Trademark rights usually do not extend beyond the market in which the trademark is used. Thus, a business in a distant location sometimes may use the mark unless the trademark owner convincingly shows their intent to use the mark in that location.
Thrifty Rent-a-Car System, Inc. v. Thrift Cars, Inc. 一 A junior user has a right to continued use of an otherwise infringing mark in a remote geographical area if that use was established prior to the other party’s federal registration. The junior user may maintain a proprietary interest in the mark even though it has no general federal protection through registration. To invoke this exception, the junior user must have used the mark continuously in that location and initially in good faith without notice of an infringing mark.
Dawn Donut Co., Inc. v. Hart’s Food Stores, Inc. 一 No relief under the Lanham Act was appropriate when no likelihood of public confusion arose from the concurrent use of a mark in connection with retail sales of doughnuts and other baked goods in separate trading areas, and there was no present likelihood that the plaintiff would expand its retail use of the mark into the defendant’s market area. However, the plaintiff could enjoin the defendant’s use of the mark if the plaintiff expanded its retail activities into that area.
Trademark Infringement
Trademark infringement involves the unauthorized use of a mark in commerce in a way that is likely to cause confusion, deception, or mistake about the source of the goods or services associated with the mark.
Polaroid Corp. v. Polarad Electronics Corp. 一 When the products are different, the prior owner’s chance of success is a function of many variables: the strength of its mark, the degree of similarity between the two marks, the proximity of the products, the likelihood that the prior owner will bridge the gap, actual confusion, the reciprocal of the defendant’s good faith in adopting its mark, the quality of the defendant’s product, and the sophistication of the buyers.
Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co. 一 The Lanham Act was meant to prevent likely confusion about the relationship between the plaintiff and the defendant, as well as the source of the defendant’s products when they are observed in the post-sale context.
Ferrari S.P.A. v. Roberts 一 Since Congress intended to protect the reputation of the manufacturer, as well as to protect purchasers, Lanham Act protection is not limited to confusion at the point of sale.
Brookfield Communications, Inc. v. West Coast Entertainment Corp. 一 The diversion of consumers’ initial interest is a form of confusion against which the Lanham Act protects.
Inwood Laboratories v. Ives Laboratories 一 If a manufacturer or distributor intentionally induces another party to infringe a trademark, or if it continues to supply its product to a party that it knows or has reason to know is engaging in trademark infringement, the manufacturer or distributor is contributorily responsible for any harm done as a result of the deceit.
Lockheed Martin Corp. v. Network Solutions, Inc. 一 Direct control and monitoring of the instrumentality used by a third party to infringe the plaintiff’s mark permits the expansion of the Inwood Labs “supplies a product” requirement for contributory infringement.
Defenses to Trademark Infringement
A defendant may argue that the plaintiff’s mark is generic, which means that the public largely thinks of the mark as the common name of the product or service. Other possible defenses include abandonment, loss of distinctiveness, laches, or fair use.
In re Dial-a-Mattress Operating Corp. 一 When a term is a compound word, it is generic if each of the constituent words is generic, and the separate words joined to form a compound have a meaning identical to the meaning that common usage would ascribe to those words as a compound. However, when the proposed mark is a phrase, there must be an inquiry into the meaning of the disputed phrase as a whole.
America Online, Inc. v. AT&T Corp. 一 The repeated use of ordinary words functioning within the heartland of their ordinary meaning cannot confer a proprietary right over those words, even if an association develops between the words and the business using them.
Silverman v. CBS, Inc. 一 The statutory phrase “intent not to resume” means an intent not to resume use within the reasonably foreseeable future.
Prestonettes, Inc. v. Coty 一 The ownership of a registered trademark consisting of a name designating the owner’s goods generally does not carry with it a right to prohibit a purchaser who repacks and sells them (with or without added ingredients) from using the name on their own labels to show the true relation of the trademarked product to the article that they offer.
Playboy Enterprises, Inc. v. Welles 一 A nominative use defense to trademark infringement applies when the product or service is not readily identifiable without the use of the trademark, only so much of the mark is used as is reasonably necessary to identify the product or service, and the user does nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.
KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc. 一 A defendant raising the fair use defense does not have a burden to negate any likelihood that the practice at issue will confuse consumers about the origin of the goods or services affected.
Davidoff & Cie, S.A. v. PLD International Corp. 一 The resale of a trademarked product that is materially different can constitute trademark infringement. A material difference is something that consumers would consider relevant to a decision about whether to purchase a product.
Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc. 一 The holder of a registered mark may rely on incontestability to enjoin infringement, and an infringement action may not be defended on the grounds that the mark is merely descriptive.
Remedies for Trademark Infringement
The standard remedy to prevent consumer confusion is an injunction. Sometimes a plaintiff also may receive damages, and the Supreme Court recently has made an award of profits easier to obtain.
The George Basch Co., Inc. v. Blue Coral, Inc. 一 If injunctive relief is warranted, the relief granted should be no broader than necessary to cure the effects of the harm caused.
Sands, Taylor & Wood Co. v. Quaker Oats Co. 一 The Lanham Act provides for the awarding of profits in the discretion of the judge, subject only to principles of equity.
Romag Fasteners, Inc. v. Fossil, Inc. 一 A plaintiff in a trademark infringement lawsuit is not required to show that a defendant willfully infringed the plaintiff’s trademark as a precondition to a profits award.
Trademark Dilution
Dilution arises when a mark suffers harm to its ability to identify and distinguish goods or services, even if consumers are not confused. Dilution under state law may involve blurring, when a strong mark is used in connection with different goods or services, or tarnishment, when a mark is used in connection with unsavory goods or services. Dilution under federal law involves famous trademarks whose distinctiveness is diluted by the commercial use of others.
Times Mirror Magazines, Inc. v. Las Vegas Sports News, LLC 一 A mark not famous to the general public is nevertheless entitled to protection from dilution when the plaintiff and the defendant are operating in the same or related markets, so long as the plaintiff’s mark possesses a high degree of fame in its niche market.
Deere & Co. v. MTD Products, Inc. 一 Dilution involving an altered form of a trademark is more likely to be found when the alteration is made by a competitor with an incentive to diminish the favorable attributes of the mark and an ample opportunity to promote its products in ways that make no significant alteration.
L.L. Bean, Inc. v. Drake Publishers, Inc. 一 The anti-dilution statute does not encompass the unauthorized use of a trademark in a non-commercial setting, such as an editorial or artistic context.
Moseley v. V Secret Catalogue, Inc. 一 When the marks at issue are not identical, the mere fact that consumers mentally associate the junior user’s mark with a famous mark is not sufficient to establish actionable dilution.
Mattel, Inc. v. MCA Records, Inc. 一 The non-commercial use exemption in the Federal Trademark Dilution Act covers speech that is not purely commercial, which means that it does more than propose a commercial transaction.
Trade Secrets
A trade secret consists of information that provides an actual or potential economic advantage to a business that takes reasonable measures to keep it secret under the circumstances. The owner of a trade secret may bring a claim against anyone who acquires the trade secret by improper means.
E.I. duPont deNemours & Co. v. Christopher 一 To obtain knowledge of a process without spending the time and money to discover it independently is improper unless the holder voluntarily discloses it or fails to take reasonable precautions to ensure its secrecy. However, a person or corporation is not required to take unreasonable precautions to prevent someone else from doing what they ought not to do in the first place.
PepsiCo, Inc. v. Redmond 一 A plaintiff may prove a claim of trade secret misappropriation by demonstrating that the defendant’s new employment will inevitably lead them to rely on the plaintiff’s trade secrets.
Kewanee Oil Co. v. Bicron Corp. 一 The federal patent policy of encouraging invention is not disturbed by the existence of another form of incentive to invention, such as trade secret protection, and the two systems are not in conflict in this respect.
This outline has been compiled by the Justia team for solely educational purposes and should not be treated as an independent source of legal authority or a summary of the current state of the law. Students should use this outline as a supplement rather than a substitute for course-specific outlines.
