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Intellectual Property
Causes of Action
Trademark Infringement Dilution Cybersquatting. Contributory infringement. CB 135. False endorsement. Reverse passing off. False advertising. CB 135.
Copyright Infringement Contributory or vicarious infringement DMCA
Patent Valid patent
Organizing Framework
Policies of Intellectual Property
Welfare maximization (a problem only when transaction costs and weak exclusivity) Achieve dynamic efficiency (i.e., incentive to improve a resource; effected by right to exclude) Achieve allocative efficiency (i.e., resource in hands of efficient user; effected by alienability) Internalize externalities (solved if resource is owned and owner has effective/strong exclusivity) (externalities are relevant to both allocative and dynamic efficiency) Minimize regime costs (the resources spent to identify, communicate, protect property rights) Minimize error costs (allocation of entitlements is difficult, sometimes sub-optimal)
Freedom of expression Privacy Natural Law (rejected, but still influential) (tends toward absolute property rights) Cult of the Author (i.e., Author qua Muse-inspired Genius) Lockean Labor Theory of Value (i.e., sweat of the brow)
Democracy (requires cheap and plentiful information) Fairness Distributional fairness (typically this is the quintessence of property theory; not in IP?) Reliance-based fairness (i.e., protecting reasonable/justified expectations)
Protecting marginalized groups (e.g., minorities, poor, etc.) Liberty (decentralized property disables Leviathan) Individual autonomy (property enables Man qua Attempter) (my favorite policy)
Tensions / Trade-offs in Intellectual Property (private property v. public domain)
Dynamic efficiency v. internalize externalities: IP qua incentive v. IP qua input (fuels future creativity, i.e., public-domain IP has positive externalities). I.e., public good / tragedy of commons v. rights thicket / tragedy of the anticommons / OTSOG. Dynamic efficiency v. allocative efficiency: IP qua incentive v. IP qua monopoly (creates deadweight loss; enables monopoly leveraging through lock-ins/network effects and tie-ins). Compare INS (granting Π a quasi-copyright over fresh news so as to incentivize reporting); Grokster (holding that protecting Π’s copyright qua incentive outweighed the risk that an expansive contributory liability regime would risk monopoly leveraging) with Skylink (thwarting Π’s attempt to use its copyright/monopoly to leverage monopoly power into the generic GDO market); Lotus (holding Π had no copyright/monopoly on the user interface, else Π would be able to take advantage of the network/lock-in effects to increase monopoly power in software markets); TrafFix (denying Π a trademark over functional springs, else Π would have super-patent on the signs); Sony (granting third-party users the fair-use privilege of “time shifting” Π’s programming, releasing Δ from contributory liability, less Π leverage its monopoly power into the VCR market); Heileman (denying Π a trademark over a generic term, less Π use its monopoly over a term to gain market power in the beer market); Playboy (entitling Δ to use Π’s trademark for a nominative use to market herself). Dynamic efficiency v. freedom of expression: IP qua monopoly v. IP qua medium of expression. (Solved through fair use doctrine qua public access doctrine). Compare Michigan Document (en banc) (protecting Π’s copyright by denying a fair use for coursepack copying at the expense of the education interests advanced by cheap coursepacks) with Natural Law v. all other policies: IP qua absolute right v. IP qua relative right. Compare USOC (denying a fair-use privilege in Π’s trademark to the Gay Olympics); MAI (defining formally “copying” so as to find infringement by repairmen who copied program onto RAM, and then denying repairmen a fair-use privilege in Π’s program for momentary copying) with any case entitling a fair-use privilege to further expression, efficiency, etc. Freedom of expression v. freedom of expression. IP qua fuel for expression v. IP qua barrier to expression. Compare Harper & Row (denying Δ a fair-use privilege to quote from Π’s book for news reporting purposes b/c that would undermine the incentives to write books) with Suntrust (entitling Δ with a fair-use privilege to parody Π’s work, even for a for-profit parody); Acuff-Rose (same); L.L.Bean (entitling Δ with a fair-use privilege to use Π’s trademark for parody, even for a for-profit parody); Wal-Mart (same).
Archetypes of Argumentation (a lawyer fills conceptual boxes with the motive of persuasion)
Metaphors. Boyle loves these. I doubt their persuasive value. Goal: Say “This is like …” 5 times. Judge 1 Literalism. Use the plain meaning of the rule to decide cases. I.e., the conceptual boxes that are the components of the rule are assumed to be self-defining, apple-like concepts. Ignore the policies motivating the rule. That’s judicial activism. Judge 3 Policy. Those conceptual boxes aren’t self-defining. Language is fundamentally ambiguous. To define the concepts, we must resort to the policies motivating the rule. Law is above all consequentialist. Any given holding will have a huge set of consequences, but only a subset of those consequences matter. That subset of consequences is defined by the policies that motivate the law. The job of a judge is to decide which holding will most effect the policies (i.e., the judge acts as an economist, doing cost-benefit analysis). Of course this begs the question: how does the Judge-Economist discover the policies? From the plain meaning of the rule? Maybe J1 wasn’t so dumb. Precedent. A mix between J1 and J2. Decided cases stand in to assist the identification of the likely consequences of any holding, to help define the motivating policies, and to facilitate a weighing of the costs and benefits. An added advantage is that law-abiders now can act in the Shadow of the Law. Baselines and presumptions. The starting point of analysis affects the outcome of analysis. E.g., “this is my right, why should I subsidize you?” v. “you never had a right, so what’s the problem?” Time-framing. Subset the consequences of a holding by focusing on different time spans.
Is Δ liable for trademark infringement?
Did Π own a valid mark? Physical use? Cognitive use? Generic? Merely descriptive, without secondary meaning?
§ 1052 prohibitions? Resembles another mark (consumer confusion)? Functionality?
Did Δ “infringe” P’s trademark? (I.e., is there a likelihood of consumer confusion.) Affirmative defenses? Fair use? Nominal use?
Π is entitled to various remedies if (I) Π owns a valid mark, (II) Δ’s use of its mark infringed Π’s mark, and (III) Δ can not escape liability through an affirmative defense.
I. Does Π own a valid trademark? § 1052.
Rule. Lanham Act intends to protect marks that are used “to indicate the source of the goods.” § 1127; Qualitex (S.Ct.1995) at 45. A mark is used in this “trademark function” only if the mark is (A) physically used in commerce and (B) cognitively used. Even if used in a trademark function, a mark is outside the scope of trademark if (C) the mark falls with any of the § 1052 prohibitions. E.g. Qualitex at 46; Two Pesos at 42 (“It is also clear that eligibility for protection under § 43(a) depends on nonfunctionality.”).
Policy. Trademarks should be granted only when they enable/facilitate competition. Sometimes, granting a trademark will not facilitate competition, e.g. a functional mark precludes rivals from competing on that trademarked feature. Doctrine disqualifies these marks for trademark protection.
Subject matter. Trademark protection extends to any word, name, symbol, or device that serves to identify the source of the product by distinguishing the product from competing products. This includes product packing and product configuration, i.e., trade dress (“the total look and feel”).
Unregistered marks. The Lanham Act protects both registered and unregistered trademarks. § 1125; Two Pesos. The “general principles qualifying a mark for registration under [§ 1052] … are … applicable in determining whether an unregistered mark is entitled to protection under [§ 1125].” Two Pesos.
Incontestable marks. If the mark has been registered for five years, the validity of the mark is incontestable. § 1115(b).
Trade dress. Trade dress claimants must prove dress is not functional. See infra.
A. Is there physical use of the mark?
Rule. A mark is in “physical use” if the mark is (1) in “actual use” (2) in interstate commerce, and (3) appropriately displayed. Microstrategy at 29. A mark is in “actual use” if the mark is (a) used in commerce, § 1051(a), or (b) intended for use in interstate commerce, § 1051(b), or (c) registered in a foreign country, § 1126. The mark is “appropriately displayed” if the mark owner uses it in a sufficiently public way so that an appropriate segment of the public understands the mark to be a source identifier.
Policy. Marks should be granted only sparingly to prevent squatting on marks. A mark not in “physical use” cannot accomplish a trademark function and thus should not be protected.
Placement on text. In the case of a phrase, there is no physical use if the public will have to browse through text or scan a page in order to find a phrase that might identify the source. I.e., the mark must stand somewhat alone, making its trademark function obvious. Microstrategy.
Constant pattern. A “constant pattern” used to highlight the use of a phrase is evidence of physical use. Microstrategy.
Mission statement. A mission statement by itself is not a physical use. It must be used to identify the source of the goods, not merely to advertise the nature of the goods or services. Microstrategy at 31 (“even though a word, name, symbol, device, or combination of words [a slogan] may be used in the sale or advertising of services …” it is not protectable as a trademark “unless it is used as a mark.”) (citing In re Morganroth).
Microstrategy (finding that claimant had failed to prove that it had used the “Intelligence Everywhere” phrase to identify the claimant as the source of the goods or services when (1) although 24 company documents were offered containing the phrase, each refers only once to the phrase and “that reference follows no particular design or sequence, i.e. sometimes its on the cover, sometimes not, most often ‘Intelligence Everywhere’ appears in the midst of the text”; (2) claimant had not used any “constant pattern” designed to highlight the phrase; (3) though used as a mission statement, that statement was used to advertise the quality of its services, not as a source identifier).
B. Is there cognitive use of the mark? § 1052.
Rule. There is “cognitive use” if the mark is “distinctive.” “An identifying mark is distinctive … if it either (1) is inherently distinctive or (2) has acquired distinctiveness through secondary meaning.” Two Pesos at 42. In other words, a mark is “distinctive” unless the mark is (1) “generic” or (2) “merely descriptive and without “secondary meaning.” Two Pesos at 42 (“A ‘merely descriptive’ term cannot be protected as a trademark unless it has acquired “secondary meaning.”); § 1052(e). Heileman at 35 (“It can, by acquiring a secondary meaning, i.e., becoming ‘distinctive of the applicant’s goods’… become a valid trademark.”).
Policy. Trademark is intended to facilitate and enable competition, not to stifle it. Typically, a trademark facilitates competition by enabling product differentiation, thereby creating incentives for producers to invest in quality while also decreasing consumers’ search costs. However, if a term is generic or descriptive, a trademark will stifle competition by making more difficult the competitors’ efforts to communicate with consumers by using the generic or descriptive marks. E.g. Heileman (a LA trademark would have given Budweiser an effective monopoly on the means of communicating a desire for a LA beer).
1. Is the mark “generic”?
Rule. “A generic or common descriptive term is one which is commonly used as the name or description of a kind of goods.” Heileman at 35 (citing “light beer” and “decaffeinated coffee” as examples of generic terms); Dial-A-Mattress at 56 (“Generic terms are common names that the relevant purchasing public understands primarily as describing the genus of goods and services being sold.”). The test is whether the consuming public recognizes the term as generic. Heileman at 37 (“the true test is one of consumer perception”). A more specific formulation is the “who-are-you/what-are-you” test. A mark answers the buyer’s questions “Who are you?” “Where do you come from?” “Who vouches for you?” But the generic name of the product answers the question “What are you?” Dial-A-Mattress at 57; Heileman (finding on the basis of consumer surveys that the abbreviation “LA” was regarded by consumers as standing for “low alcohol” and therefore was “generic”).
Evidence of “generic”. Consumer surveys are probative. Heileman. The relevant consumer perception is that of the average consumer who has been exposed to the information currently available, i.e. uninformed consumers are irrelevant. Heileman at 38 (rejecting one consumer survey b/c it relied on uninformed consumers who had never been exposed to LA beer). However, it is irrelevant whether the consumers themselves regard the term as a “brand”; it is only relevant whether they regard the term as descriptive of an ingredient. Other evidence is the existence of other similar previously-registered trademarks. Dial-A-Mattress at 55. Also, “Any competent source suffices to show the relevant purchasing public’s understanding of a contested term, including purchaser testimony, consumer surveys, dictionary definitions, trade journals, newspapers, and other publications.” Dial-A-Mattress at 57.
Compound-word term. If the components of the mark are common descriptive terms, i.e. generic, a combination of such terms is also generic. Multistate Legal Studies at 36 (finding that “Multistate Bar Examination” was generic); Dial-A-Mattress at 57.
Compound-word phrase. However, compound-word phrases are treated differently from compound-word terms. With phrases, even if the constituent parts are generic, the phrase as a whole might be distinctive. Dial-A-Mattress at 57 (finding that “1-888-Matress” was a phrase and thus the phrase test should have been applied to determine whether it was “generic”).
Initials and abbreviations. There is a presumption that initials and abbreviations are “generic.” Multistate Legal Studies at 36 (finding that “MBE” was generic); Heileman at 37 (finding that “LA” was generic).
Prior use. If a term has in the past been used in a descriptive manner, that is strong evidence that the term is “generic.” Heileman at 40 (finding evidence that the term “LA” was earlier used in Australia to be relevant to its finding that the term was “generic”).
2. If not, is the mark “merely descriptive” and without “secondary meaning”?
Rule. “A merely descriptive term specifically describes a characteristic or ingredient of an article. Heileman at 35 (citing “bubbly champagne” and “Auto Page” as examples). Again, consumer perception defines the mark’s status. A term acquires “secondary meaning” when it becomes “distinctive of the applicant’s goods in commerce.” Two Pesos at 42.
C. Does Π’s mark fall with any of the § 1052 prohibitions? CB 74 n.14.
1. Is the mark “immoral”? § 1052(a).
2. Is the mark “deceptive”? § 1052(a).
3. A “coat of arms”? § 1052(b).
4. Identifying a living individual? § 1052(c).
5. So resembles another mark as to risk consumer confusion? § 1052(d).
6. Geographic designations? § 1052(e).
7. Primarily merely surnames? § 1052(e).
8. Was the mark “functional”? § 1052(e).
Rule. A product feature is “functional” “if exclusive use of the feature would put competitors at a significant non-reputation-related disadvantage. Qualitex at 47; § 1052(e); Qualitex at 46 (S.Ct.1995); Qualitex at 49.
Policy. A trademark over a functional product feature would preclude competition on that feature. E.g. TrafFix.
Trade dress. “The total look and feel.” Because “product design almost invariably serves purposes other than source identification,” TrafFix at 53 (S.Ct.2001) (quoting Wal-Mart), the functionality doctrine is especially significant in trade dress claims. In fact, a person claiming trademark protection for trade dress has the burden of proving that the mark sought to be protected is not functional. § 1125(a)(3); TrafFix at 53 (S.Ct.2001). To be clear, that burden is on the claimant only if the trade dress is product design. Product packaging qua trade dress is not subject to heightened scrutiny since the same concerns about functionality are not implicated. Wal-Mart v. Samara.
Prior patents. Along these lines, a prior utility patent on the patent is highly relevant in a trade dress claim. TrafFix (“A prior patent … has vital significance in resolving the trade dress claim. A utility patent is strong evidence that the features therein claimed are functional.”).
Crescent Tool (holding that claimant could not have trademark in the crescent-shaped head of the wrench qua product feature/trade dress b/c the product feature was “functional” when it was necessary to the use of the wrench).
AOL (holding that claimant could not have trademark in the “You Got Mail!” phrase b/c functional when it merely indicates receipt of mail even despite the secondary meaning the phrase had cultured). See p. 67 n.4 for more details.
Qualitex (holding as a matter of law that a color conceivably could serve a trademark function and that functionality doctrine is not necessarily a bar to trademark of the color when the color is not necessarily essential to the product’s use or purpose and does not affect cost or quality of the product).
TrafFix (finding that the dual-spring product feature was “functional”, citing claimant’s prior utility patent as evidence of functionality).
II. Did Δ “infringe” Π’s mark? § 1114(1); § 1125(a)
Rule. Δ infringed Π’s mark if Δ’s use of his mark creates a likelihood that an appreciable number of ordinarily prudent consumers would be misled as to the source of the goods in question. § 1114(1)(a) (“use … of a registered mark … [that] is likely to cause confusion); § 1125(a) (“use in connection with any goods … [of] a false designation of origin”); Levi at 88.
The Polaroid standard. The issue of likelihood of confusion is decided by the multifactor balancing test set forth by Judge Friendly in Polaroid Corp. Levi. The factors are: (A) the strength of P’s mark, (B) degree of similarity between the marks, (C) the proximity of the products, (D) the possibility of bridging the gap, (E) evidence of actual confusion, (F) junior user’s good faith in adopting the mark, (G) the quality of the respective goods, (H) the sophistication of the relevant buyers. The ultimate conclusion should not be “determined in accordance with some rigid formula” but instead “each factor must be evaluated in the context of how it bears on the ultimate question of likelihood of confusion as to the source of the product.” Levi at 88. The general idea is that the likelihood of consumer confusion is a function of (1) how identical the marks are, and (2) how identical the products are. Imagine a Cartesian plane. The two are inversely related.
Policy. Trademark intends to protect producers’ ability to signal their product’s source to the consumers. Thus, only consumer confusion matters. I.e., there is no property right to the mark. But see McDonald’s.
Registered marks and § 1125(a). The owner of a registered mark should claim infringement in violation of § 1114(1). It should also claim unfair competition by alleging misrepresentation in violation of § 1125(a). The tests are the same, but this second claim protects the claimant against the risk that a court might find that it failed to meet the formalities of trademark registration. CB 102. Of course, the owner of an unregistered mark is left with claims only under § 1125(a).
Family of marks. An owner can claim ownership of a family of marks, thereby extending his right to exclude to marks merely resembling his marks. Whether the owner has a family of marks depends on (1) the distinctiveness of the common formative component, (2) the extent of the family’s use, (3) advertising and promotion, and (4) the inclusion of the common component in a number or registered or unregistered marks. McDonald’s at 93. Alternatively, a family of marks is “a group of marks having a recognizable common characteristic, wherein the marks are composed and used in such a way that the public associates not only the individual marks, but the common characteristic of the family, with the trademark owner.” McDonald’s at 94 (finding McDonald’s had a family of marks in the prefix “Mc”).
Trade dress. § 1125(a) creates a cause of action for trade dress infringement claims, protecting the “total look and feel,” and that protection is “essentially the same” as that of claims for infringement of registered trademarks. Two Pesos (S.Ct.1992) at 97 (Stevens J., concurring) (noting that language of § 1125(a) restricted the cause of action to false designations and false advertising of geographic origin but that the statute was later interpreted, appropriatetly, to create “in essence, a federal law of unfair competition.”). Like in trademark infringement, “the test for liability [in trade dress infringement] is likelihood of confusion.” Two Pesos at 98.
Post-sale confusion. Some authority holds that even confusion among the non-purchasing public is actionable. Levi; Ferrari (holding seller of kits to convert cars into Ferrari look-a-likes liable for trademark infringement, despite the obvious lack of purchaser confusion, b/c of the risk of non-purchaser confusion in the post-sale context).
Internet. Use of a trademark in a webpage, either in text, metatags, watermarks, etc., might constitute infringement. I.e., do not get blinded by the UDRP, which has a very narrow scope. E.g. Playboy.
A. The strength of Π’s mark
Rule. “The strength of a mark” is “its tendency to identify the goods sold under the mark as emanating from a particular source,” i.e., has strong secondary meaning. Levi at 88. Use the generic-merely descriptive-descriptive-arbitrary spectrum to characterize a mark’s strength. The more arbitrary, the stronger the mark. Also, the incontestability of a mark is evidence of the strength of the mark.
Policy. The stronger Π’s mark, i.e. the greater the secondary meaning, the more likely consumers will wrongly assume that Δ’s similar mark is actually Π’s mark. Levi at 89.
Levi at 88 (finding that Π’s mark, the back pocket stitching pattern, had “a very strong secondary meaning” b/c jeans consumers associated the mark with Π’s products).
McDonald’s at 95 (citing evidence of “widespread” consumer familiarity with the mark as evidence that the mark is a strong one).
B. The degree of similarity between the marks
Rule. This is an apple-like concept: a question of fact left to the trier, that is incapable of being made more granular by articulation through syllogistic logic.
Policy. The more similar the marks, the greater the risk of consumer confusion.
Levi at 89 (finding that the two stitching patterns were “essentially identical” when any differences were imperceptible at any significant distance).
C. The proximity of the products
Rule. Products are in close proximity if they are in similar market segments. Levi at 90. Factors relevant include the appearance, style, function, fashion appeal, advertising, and price of the products.
Policy. Likelihood of confused is less if the two marks are used before separate groups of consumers or where the distinct nature of the products clearly suggest that the two users are unrelated.
“Lifestyle marketing”. Now that firms are selling unrelated goods as part of a lifestyle, e.g. Jack Daniel’s clothes, the role and significance of this element is unclear.
Market entry relevant. However, even if the products are in different market segments, this fact arguably does not weigh against a finding of likely confusion if consumers would reasonably assume that Π had decided to enter into Δ’s market segment. Levi at 90 (finding that this element did not weigh against a finding of confusion when consumers were likely to assume that Π had decided to enter into Δ’s designer/luxury jean market segment).
Levi at 90 (finding that this element did not weigh against a finding of confusion when consumers were likely to assume that Π had decided to enter into Δ’s designer/luxury jean market segment).
McDonald’s (finding that this dental services and fast food were not in close proximity).
D. Bridging the gap
Rule. “If the owner of a trademark can show that it intends to enter the market of the alleged infringer, that showing helps to establish a future likelihood of confusion as to source.” Levi at 90.
Policy. This is actionable b/c “trademark laws are designed in part to protect ‘the senior user’s interest in being able to enter a related field at some future time.’” Levi at 90.
Lifestyle marketing. Relevant here especially.
Levi at 90 (finding that Π might indeed enter into the designer jean market and thus this factor “does not aid” Δ’s case).
McDonald’s (finding that McDonald’s was unlikely to bridge the gap into the dentistry market, even though it had included toothbrushes in its happy meals).
E. Evidence of actual confusion
Rule. Actual confusion need not be shown to prevail b/c actual confusion is difficult to prove and thus the Act requires only a likelihood of confusion as to source. However, evidence of actual confusion, e.g. consumer surveys, is relevant to the finding of likelihood of confusion. An absence of such evidence of actual confusion may weigh in Δ’s favor, but only if there has been a significant period of competition between the products. Levi at 91.
Levi at 91. (finding Δ’s designer jeans had only recently entered into Π’s U.S. market and thus the lack of evidence of actual confusion did not weigh in Δ’s favor, especially since Π should not be penalized for acting to protect its trademark before damage has occurred).
McDonald’s (finding “substantial evidence” of confusion when a mere 30% of a survey associated the mark with McDonald’s).
F. Junior user’s good faith in adopting the mark
Rule. If the junior user purposely copied the original, this is more evidence of a likelihood of confusion. Levi at 91.
Policy. Exactly why this factor is relevant to a finding of a likelihood of confusion is unclear. It seems the real concern is with nailing free riders qua bad actors. Perhaps this factor is evidence of the original’s secondary meaning/distinctiveness: the junior user copied the original only because it’s valuable.
Levi at 91 (finding evidence, when viewed in light most favorable to Δ, did indicate that Δ had stumbled onto the stitching pattern).
McDonald’s (citing the McDental dentist’s obvious bad faith in adopting the name, i.e., free riding, as probably the determinant factor weighing against the dentist, despite the improbability that McDonald’s would enter the dental industry and the lack of proximity of fast food and dental services).
G. The quality of the respective goods
Rule. If the infringer’s good is markedly inferior, the trademark owner has a heightened interest in stopping the infringing use of his mark. On the other hand, one court has found that the superiority of the infringing user’s goods actually weighed against him b/c it indicated that consumers were all that much more likely to not see that Δ’s goods were from a different source. Levi at 91.
H. Sophistication of the relevant buyers
Rule. The more sophisticated the buyers, the less likely is consumer confusion about the source of the goods. Relevant factors include the price of the product and the potential for impulse purchases. On the other hand, one court somehow found that b/c the buyers were sophisticated they were actually more likely to pay attention to the stitching pattern, thus heightening the risk of confusion. Levi at 92.
III. Can Δ escape liability through an affirmative defense?
Rule. Δ’s use of Π’s trademark may be (A) a fair use in comparative advertising, or (B) a nominal use.
Policy. The usual competitiveness/antitrust policies. Trademarks qua competition, not natural rights.
A. Is Δ’s use a fair use in comparative advertising?
B. Is Δ’s use a nominal use?
Rule. “First, [(1)] the product or service in question must be one not readily identifiable without use of the trademark; second, [(2)]only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, [(3)] the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.” New Kids at 116.
Relationship to Polaroid test. Playboy asserted that the nominative use test actually supplanted the Polaroid test for consumer confusion. This is very strange. Why would there be a different test for consumer confusion if nominal use is an affirmative defense, by definition granting there is a likelihood of consumer confusion?
New Kids on the Block (finding that newspapers’ use of the band name in survey about which singer was the best was a permissible nominal use).
Playboy (finding that website’s use of Playboy marks in its metatags, watermarks, etc. was a nominal use).
1. Is Δ’s product “readily identifiable” without the trademark?
Rule. The product is not “readily identifiable” when there is no “descriptive substitute for the trademark.” Playboy (citing “Chicago Bulls” as an example).
Policy. Allowing the trademark holder exclusive rights over the trademark would deplete the language in the same way as if generic words were protectable.
Playboy (finding no descriptive substitutes existed for “Playmate,” etc.).
2. Is Δ’s use of the mark “no more than is reasonably necessary”?
Rule. Undefined. E.g., soft-drink distributor must be allowed to use “Coca-Cola” but is not entitled to use the distinctive lettering of the mark; a car repairman must be allowed to use “Volkswagen” but is not entitled to the distinctive lettering or the “VW” emblem.
Fonts. Just use the word, don’t use the font, and all is well. Playboy (finding reasonable use when the playmate did not use Playboy’s distinctive lettering/font and symbol).
3. Does Δ’s use suggest Π’s sponsorship or endorsement?
Rule. Undefined.
Disavowal. It matters if Δ attempts to distance itself from Π. Playboy (finding no sponsorship when Δ disavowed affiliation with Π, even criticize Π).
Is Δ liable for trademark dilution?
Is Π’s mark a “famous mark”? “Actual dilution”? Affirmative defenses? Fair use in comparative advertising? Nominal use? News reporting and news commentary?
The owner of (I) a “famous mark,” § 1125(c)(1), Moseley (S.Ct.2003) at 101, is entitled to an injunction against Δ’s further use of his mark if (II) that use causes “actual dilution,” Moseley, unless (III) Δ’s use is protected as an affirmative defense. § 1125(c). Π is entitled to other damages if (IV) Π proves Δ “willfully intended to trade on the owner’s reputation or to cause dilution of the famous mark.” § 1125(c)(2).
I. Is Π’s mark a “famous mark”? § 1125(c)(1).
Rule. § 1125(c)(1) specifies criteria for determining “famous mark.” It is apparently easy to prove “famous mark.”
Times Mirror at 129 (holding “The Sporting News” mark for a weekly publication was famous enough b/c “a mark not famous to the general public is nevertheless entitled to protection from dilution where both the plaintiff and 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”).
II. Did Δ’s use of his mark cause “actual dilution” of Π’s famous mark? § 1125(c).
Rule. “Dilution” is “the lessening of the capacity of a famous mark to identify and distinguish goods or services.” § 1127. Π must prove “actual dilution.” Moseley at 106. Because “actual dilution” is required, it is not enough for Π to merely prove that consumers mentally associate Δ’s mark with Π’s famous mark: mere mental association alone does not constitute actual dilution. Moseley at 106. However, Π does not need to prove that it actually suffered adverse consequences because of the dilution, e.g. actual loss of sales or profits. Moseley at 106. Finally, the absence of a likelihood of consumer confusion or competition between two users is irrelevant in a dilution claim. § 1127.
Policy. Dilution law is motivated by a desire to preserve the uniqueness of the owner’s mark; it is not concerned with consumer confusion. Moseley at 104. Dilution law aims to prevent both the blurring of the distinctiveness of the mark and also the tarnishing of the mark.
“Blurring” defined. Undefined. This might be the only actionable harm. Moseley at 104.
“Tarnishment” defined. An association that brings the famous mark into disrepute. E.g. Dallas Cowboys Cheerleaders v. Pussycat Cinema (finding tarnishment when Δ used Π’s famous uniforms in a porn film). Moseley might have disqualified “tarnishment” as the basis for a dilution claim. Id. at 104.
Evidence of “actual dilution”. “Actual dilution” usually must be proven by direct evidence, e.g. through consumer surveys. However, occasionally, direct evidence of actual dilution might not be necessary. Moseley at 106. For example, when Δ’s mark is identical to Π’s famous mark, circumstantial evidence of dilution might be sufficient. Id.
III. Is Δ exempted by an affirmative defense? § 1125(c)(4).
Rule. Three defenses to a dilution claim: (1) fair use in comparative advertising, and (2) noncommercial use of a mark (i.e., nominal use), and (3) use in news reporting or news commentary. § 1125(c)(4).
“Nominative use” defined. “First, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.” New Kid; see also Playboy (“nominative uses, by definition, do not dilute the trademarks”).
Moseley (holding Π did not prove “actual dilution” b/c it did not submit any evidence on the f.o.c., instead relying on the irrelevant evidence that consumers mentally associated Δ’s mark with Π’s famous mark).
IV. Is Δ entitled to remedies other than an injunction? § 1125(c)(2).
Rule. “The owner of the famous mark shall be entitled to injunctive relief as set forth in section 1116 unless the person against whom the injunction is sought willfully intended to trade on the owner’s reputation or to cause dilution of the famous mark.” § 1125(c)(2).
Is Δ liable under the UDRP?
Π is entitled to ownership of Δ’s domain name if (I) Δ’s domain name is identical or confusingly similar to Π’s trademark, (II) Δ has no rights or legitimate interests in its domain name, and (III) Δ’s domain name has been registered and is being used in bad faith. ICANN Rules, 15(a); § 1125(d); Wal-Mart (noting that a § 1125(d) claim is very similar to a ICANN claim).
Policy. UDRP was aimed at cybersquatters. 1st Amendment policies rival the preemption of cybersquatters, in particular barring Π from killing criticism of it with this cause of action.
I. Is Δ’s domain name “identical or confusingly similar” to Π’s mark?
Rule. Assuming Π has a valid mark (see supra Infringement), Δ’s domain name is “identical or confusingly similar” if (A) there is “a likelihood of consumer confusion” under the Lanham Act, and (B) Δ’s domain name is not used for “parodic or critical purposes.” Wal-Mart at 111.
A. Is there “a likelihood of consumer confusion”?
Rule. The usual Polaroid test determines whether there is “a likelihood of consumer confusion.”
“sucks” domains. Bally and Wal-Mart are strong authority for the proposition that “sucks” domains are unlikely to present a likelihood of confusion.
B. Was the domain used for “parodic or critical purposes”?
Rule. A domain is used for “parodic or critical purposes” if it conveys “two simultaneous and contradictory messages”: that it is the original, but also that it is not the original but actually a parody. Wal-Mart at 113 (citing Spotlight).
Policy. Domains used for parody are unlikely to be “identical or confusingly similar.” Where Δ’s purpose was parody, the information on the page is unlikely to confuse the consumer. Wal-Mart at 111. I.e., a parody depends on a lack of confusion to make its point.
PETA (finding no parodic purpose in Δ’s use b/c not “simultaneous” when Δ’s “People Eating Tasty Animals” presented only one message – eating meat is good).
Spotlight (finding no parodic purpose in Δ’s use b/c not simultaneous when Δ’s website simply flamed the competition).
Wal-Mart (finding parodic purpose).
II. Does Δ have rights or legitimate interests in the domain name?
Rule. Undefined. Criticism and parody are legitimate interests. Wal-Mart.
III. Did Δ register and use the domain name in “bad faith”?
Rule. “Bad faith” depends on the § 1125(d)(1)(B)(i) factors. Δ’s domain use is in “bad faith” if, inter alia, Δ sought payment for the domain.
Is Δ liable for copyright infringement?
Π owns a valid copyright Within the affirmative scope of copyright Outside the prohibited scope of copyright
Copying Actual copying Copyrightable elements Substantial similarity
Affirmative defenses Statutory defenses Fair use
Π is entitled to various remedies if (I) Π owned a valid copyright, and (II) Δ copied elements of Π’s work that are copyrightable, unless (III) Δ can plead an affirmative defense.
Watch for copying. I tend to miss incidents of possible “copying”, e.g., programs that do similar functions, programs and websites with similar layouts, operating systems for similar devices (iTunes v. iGot), device interfaces. Don’t forget that an actionable “copying” occurs when Δ uses a copyrighted work in a manner not authorized by the terms of the copyright owner’s license (e.g., playing a copyrighted song on the iGot, though it was licensed for the iTune; e.g., using software in a prohibited manner).
I. Did Π own a valid copyright?
Rule. Π has a valid copyright if (A) the work is within the affirmative scope of copyright, (B) and outside the prohibited scope of copyright. § 102. Π has prima facie evidence of a valid copyright, shifting burden of proof onto Δ, if Π has a certificate of registration. § 411.
A. Is Π’s work within the affirmative scope of copyright? § 102(a).
Rule. Π’s work is within the affirmative scope if it is (1) “original” and (2) “fixed.” § 102(a).
1. Is Π’s work “original”?
Rule. A work is original if it is (1) independently created by the author (excludes plagiarized works), and (2) possesses some minimal degree of creativity (excludes “discovered” (facts) and banal works). Feist. The requisite level of creativity is relatively low. Feist. Special rules have evolved for compilations (and databases), derivative works, software, and functional art.
Policy. To reward and subsidize those in the cult of authorship. Originality = work originating in act of authorship = creation. Non-originality = non-authorship = discovery, plagiarism, or banality. Feist.
Definitions. Feist did not formulate a positive definition or test for the degree or quantum of creativity required for originality. However, Feist did recite a litany of the missing characteristics of the directory that failed to qualify as original: It is a work “in which the creative spark is utterly lacking or so trivial as to be virtually nonexistent,” “so mechanical or routine as to require no creativity whatsoever,” “garden variety,” a work whose selection, coordination and arrangement “could not be more obvious,” “it is practically inevitable,” a “time-honored tradition.”
Flair. There is originality when the author injects part of his personality or flare in his work. Bleistein (“the work is personal to the author”). Under such a test, any aesthetic decisions made by the “author” during the “creation” would prompt a finding of originality.
What is non-original? Facts, individual words, short phrases, slogans, and familiar symbols (b/c “traditional,” “garden variety,” and “obvious”). Feist.
Derivative works. Derivative works can qualify as original. § 103(a). In derivative works, the determinative question for originality is whether the author “slavishly or mechanically copied” from the underlying work. Hearn. Transferring the principal work to another medium weighs in favor of a finding of “originality.” Hearn.
Compilations. A compilation of non-original elements warrants copyright protection if there is the requisite degree of creativity in the selection and arrangement, but protection extends only to those aspects of the compilation that are original. § 103(b); Feist; Kregos. The standard for originality in a compilation is (1) independent creation as to the selection and arrangement of the facts and (2) selectivity. Kregos. I.e., a compilation is original only if it is selective (i.e., how many facts did author take from the universe of relevant data?) and creative (was the selection of those facts obvious?). Kregos. The central focus is on selectivity. Merger is apparently a predominant concern limiting protection. See Kregos.
Databases. Perhaps the most significant implication of the originality requirement is that databases qua compilations receive only thin protection: a competitor may copy the data in the compilation so long as it does not present the data with the same selection and arrangement. West Pub. I; West Pub. II. It remains possible that Congress could constitutionally extend quasi-copyright protection to databases if acting under the Commerce Clause. See Moghadam. The central question there is whether the originality requirement is fundamental so that it functions as an implicit prohibition on Congress.
Computer programs. Software is copyrightable. The literal elements are clearly protected. So are some of the non-literal elements, including the program’s organization. The copyrightable non-literal elements are sorted from the non-copyrightable through the abstraction-comparison-filtration test. See infra.
Kregos (reversing summary judgment on a finding that the pitching form qua compilation of facts lacked originality b/c it could not be said as a matter of law that the author did not exercise the requisite, but small degree of creativity in the selection and arrangement of the facts).
Hearn (holding that the illustrators copies of famous pictures were not copyrightable as derivative works b/c lacking in requisite degree of creativity when the illustrator simply slavishly copied the works).
NBA v. Motorola (finding that basketball games are not “original works of authorship” b/c there is no underlying script and can result in wholly unanticipated occurrences; however, the recorded broadcast of the game is copyrightable b/c of the creative choices made in how to record the game).
Prod. Contractors v. WGN (finding that a Christmas parade is not a work of authorship entitled to copyright protection).
West Pub. I (finding the rearrangement of information and the addition of citations in judicial opinions was trivial and obvious, precluding a finding of originality).
2. Is Π’s work “fixed”? § 101.
Rule. A work is “fixed” if its “embodiment in a copy … is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicate for a period of more than transitory duration.” § 101; Moghadam (Ct.App.1999); MIA Systems (holding that the loading of software onto RAM was “copying” when the image was “sufficiently permanent or stable to permit it to be perceived ... for a period of more than transitory duration”).
Policy. Unclear. Likely the requirement simply demarcates the parameters of Π’s entitlements, i.e., fixation is just a little white picket fence around the property right.
B. Is Π’s work outside the prohibited scope of copyright? § 102(b).
Rule. Π’s work is within the prohibited scope of copyright if the work is an “idea, procedure, process, system, method of operation, concept, principle, or discovery.” § 102(b). Effectively, the prohibited scope is facts, ideas, expressions that merge into ideas, and functional expressions. Only a few works is totally lacking in elements outside the prohibited scope of copyright. Since most works are technically copyrightable, the “thinness” of that protection is the critical determination. See infra.
Functional arts. Copyright of “works of applied art” is not prohibited. § 101. However, only the nonfunctional/aesthetic aspects of a functional work are copyrightable. Drawing the line between what is copyrightable and what is not is difficult. E.g. Brandir (articulating the conceptual severability test for “works of art”), Altai (articulating the abstraction-filtration-comparison test for software). See infra.
Merger. It is unclear whether merger doctrine should be applied here, to prohibit a copyright, or later, after infringement is proven, as an affirmative defense. Kregos (dissenting opinion) (advocating the application of merger doctrine when making a finding on the validity of the copyright b/c merger qua affirmative defense prompts the inference that merger is a means of explaining away unintentional similarities, which is false given that you can legitimately and intentionally copy merged expression). I apply merger here, and again, if the work as a whole has some copyrightable elements, to filter out those elements that are not copyrightable. Still, I should note the split in my analysis.
II. Did Δ infringe Π’s copyright?
Rule. Δ infringed Π’s copyright if (A) Δ “actually copied” elements of Π’s protected work, (B) those elements were actually copyrightable, §§ 107 – 120, and (C) the copying was so extensive as to render the two works “substantially similar.” Lotus. Engineering Dynamics. Sturdza.
Divisible rights. The § 106 bundle of exclusive rights is infinitely divisible. § 202. Thus, the owner may entitle a user with a privilege to “copy” his work through either a license or transfer. However, the moment that the user steps outside the privileges entitled by his contract with the owner, the user becomes liable for infringement (except of course if that breach of contract is a fair use).
Watch for copying. I tend to miss incidents of possibly actionable “copying”, e.g., programs that do similar functions, programs and websites with similar layouts, operating systems for similar devices (iTunes v. iGot), device interfaces. Don’t forget that an actionable “copying” occurs when Δ uses a copyrighted work in a manner not authorized by the terms of the owner’s license (e.g., playing a song on the iGot, though it was licensed for the iTune; e.g., using software in a prohibited manner).
Registration requirement. Registration of the copyrights must be attempted before an action for infringement can be commenced. § 411 However, a successful registration is not an essential prerequisite to suit. Where registration has been refused, the applicant is entitled to institute an action for infringement if notice of the action is served on the Register of Copyrights. The Register may, at his or her option, become | 
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