More facts
When the owners of the Pretty Woman copyright sued 2 Live Crew, the group’s first inclination was to
withdraw the parody. The Capitol Steps, however, wanted the courts to establish once and for all that
parody is a protected form of speech. To persuade the Supreme Court to grant certiorari, the Capitol
Steps prepared an audiotape history of political parody in the United States. There is some evidence that
this tape was indeed influential in persuading the Supreme Court to grant certiorari.
If a recording of the Capitol Steps singing God Bless My SUV is no longer available from their
website (http://www.capsteps.com/), I can e-mail the MP3 file to any faculty using this text. My e-mail
address is ssamuels@bu.edu. Both the Roy Orbison and the 2 Live Crew versions of Pretty Woman are
available on http://www.benedict.com/ and can be purchased as singles from the iTunes Music Store.
Also, Justice Souter attached the lyrics of both songs as appendixes to his majority opinion for the
Court. As a result, both songs were reproduced in the United States Reports along with the rest of the
opinion, and may now be found in every major law library in the United States.
General Questions:
Did 2 Live Crew and the Capitol Steps make excessive use of the original recordings?
Did they harm the market for the original?
Should Roy Orbison be allowed (if he were alive) to prevent 2 Live Crew from using his material
to mock women? What if he finds this material offensive?
Digital Music and Movies
One of the major challenges for legal institutions in regulating copyrights is simply that modern
intellectual property is so easy to copy. Many consumers are in the habit of violating the law by
downloading copyrighted material—music, movies and books—for free. They seem to believe that if it is
accessible, then taking it is somehow acceptable. In one survey of adolescents, 75 percent agreed with the
statement, “file-sharing is so easy to do, it’s unrealistic to expect people not to do it.”1
The Digital Millennium Copyright Act
The good news is that Mary Schmich wrote an influential article in the Chicago Tribune. The bad news is
that people deleted her name, attributed the article to Kurt Vonnegut, and sent it around the world via
email. Tom Tomorrow’s cartoon was syndicated to 100 newspapers, but by the time the last papers
received it, the cartoon had already gone zapping around cyberspace. Because his name had been deleted
from the original, some editors thought he had plagiarized it. In response to such incidents, Congress
passed the Digital Millennium Copyright Act (DMCA), which provides that it is illegal to:
Delete copyright information, such as the name of the author or the title of the article
Circumvent encryption or scrambling devices that protect copyrighted works.
Distribute tools and technologies used to circumvent encryption devices.
Internet service providers (ISPs) are not liable for posting copyrighted material as long as
they are unaware that the material is illegal and they remove it promptly after receiving a
“takedown” notice that it violates copyright law.
1<FTN>http://pewinternet.org/Reports/2009/9-The-State-of-Music-Online-Ten-Years-After-Napster/The-
State-of-Music-Online-Ten-Years-After-Napster.aspx?view=all#footnote25 or search the internet for
“pew 10 years after napster.”</FTN>
Trademarks
A trademark is any combination of words and symbols that a business uses to identify its
products or services and distinguish them from others.
Types of Marks
There are four types of marks:
Trademarks are affixed to goods in interstate commerce
Service marks are used to identify services, e.g. Burger King, Weight Watchers.
Certification marks are words or symbols used by a person or organization to attest that products
and services produced by others meet certain standardse.g. The Good Housekeeping Seal of
Approval, UL (Underwriter’s Laboratory) Approved.
Collective marks are used to identify members of an organization, e.g. the Girls Scouts of
America.
Infringement
To win an infringement suit, the trademark owner must show that the defendant’s trademark is likely to
deceive customers about who has made the goods or provided the services. In the event of infringement,
the rightful owner is entitled to: (1) an injunction prohibiting further violations, (2) destruction of the
infringing material, (3) up to three times actual damages, (4) any profits the infringer earned on the
product, and (5) attorney’s fees.
You Be the Judge: Network Automation Inc. v. Advanced Systems
Concepts, Inc.6
Facts: Network Automation and Advanced Systems Concepts both sold job scheduling and management
software, and both advertised on the Internet. Network sold its software under the trademarked name
Auto-Mate, while Systems used the trademark ActiveBatch. Customers paid between $995 and $10,995
to use these software programs.
Google AdWords is a program that sells “keywords,” which are search terms that trigger the display of a
sponsor’s advertisement. When a user enters a keyword, Google displays the links generated by its own
algorithm in the main part of the page, along with advertisements in a separate “Sponsored Links” section
next to or above the objective results. Multiple advertisers can purchase the same keyword.
Although ActiveBatch was Systems’ trademark, Network purchased it as a keyword. This purchase meant
that anyone who googled “ActiveBatch” would see a web page where the top results were links to
Systems’ own website and various articles about the product. But in the “Sponsored Sites” section of the
page, users would see the following ad:
Job Scheduler
Windows Job Scheduling + Much More. Easy to Deploy, Scalable. D/L Trial
www.NetworkAutomation.com
Sometimes, they would also see an equivalent ad for Systems’ software – the real ActiveBatch.
Systems alleged that this use of ActiveBatch was a violation of its trademark on the word. The trial court
issued an injunction prohibiting Network’s purchase of the Google keyword. Network appealed.
You Be the Judge: Has Network violated Systems’ trademark by purchasing it as a Google keyword?
Argument for Systems: Network and Systems are direct competitors. Their two products — AutoMate
and ActiveBatch — perform the same functions and are both advertised on the Internet. Network is
deliberately confusing customers about whose product ActiveBatch really is.
When consumers use the Internet they tend not to read carefully, they just click away. Few customers
analyze the web address of an ad to make sure they are going to the right website. Indeed, customers may
not even be aware of who owns ActiveBatch. The Network ad certainly does not reveal that Systems
owns this software. Customers could easily assume that whatever web address comes up belongs to the
rightful owner.
When customers search for a generic term, they know that they will encounter links from a variety of
sources but when they look for a trade name their expectation is that they will only be linked to that
specific product. For this reason, the use of another company’s trade name can create tremendous
confusion.
Network has bought the right to use Systems’ trademark as a ruse to fool potential customers. This
subterfuge is exactly the sort of behavior that trademark laws are designed to prevent.
Argument for Network: Today, most consumers are sophisticated about the Internet. They skip from site
to site, ready to hit the back button whenever they are not satisfied with a site’s contents. They fully
expect to find some sites that are not what they imagine based on a glance at the domain name or search
engine summary. Consumers do not form any firm expectations about the sponsorship of a website until
they have seen the landing page — if then.
Even if Systems’ arguments were true for consumer purchases, the typical customer for this software is a
sophisticated businessperson buying an expensive product. These purchasers are likely to be very careful
and will not be confused by Google ads. Also, they will probably understand the mechanics of Internet
search engines and the nature of sponsored links.
In the end, Network’s intent was not to confuse consumers, but rather to allow them to compare its
product to ActiveBatch. That goal is a completely appropriate use of a trademark.
NOTE: The court ruled for Network, holding that the sophisticated business people making this purchase
would not be confused. If you google ActiveBatch in class, you can demonstrate that Network’s ad still
appears.
Current Focus
Companies complain that finding names for new products has become increasingly difficult, especially if
the name must work in other languages, and also requires a corresponding Internet address. The classic
example is the Chevrolet Nova, which might have been fine in the United States but did not work in Latin
America, because “No va” means “Doesn’t go” in Spanish. Panasonic cancelled the campaign slogan for
its Japanese Web browser that featured Woody Woodpecker: “Touch Woody–The Internet Pecker.”
General Magic could not use “Regatta” or “Springboard” as a name for its digital assistant after
discovering that the Web names were not available. The company ultimately went with “Portico.” Big
Sky Brewing Company named its ale “Whistle Pig Red,” but then found out that two Whistling Pig
microbrews were already on the market. (What an obvious name for a beer!) Big Sky then went with
Moose Drool, only to be informed that another company owned the Moose family of names. No wonder
that advertising agencies often turn over the job of developing names to specialized consulting firms.
If students performed the trademark name research assignment, ask them now to share the results of
their search. Could they find names that were not already taken?
Example
Suppose that you are a Warner Bros. executive. The company is about to make a movie called Eraser that
stars Arnold Schwarzenegger as an elite federal agent who “erases” the past lives of informers and
relocates them to anonymous safety.
Question: Would you be worried about trademark issues?
Answer: In the script, a villainous computer company named Cyrex Corp. tries to kill Eraser.
Question: The trademark search revealed no similar names, so Warner was safe, right?
Answer: Wrong. Cyrix Corp., a Richardson, Texas maker of microprocessors, filed suit, alleging
Question: What can Warner Bros. do now?
Answer: It changed the name to Cyrec Corp. and ordered that 1,793 frames of the film–about two
Federal Trademark Dilution Act of 1995
This statute prevents others from using a trademark in a way that (1) dilutes its value, even though
consumers are not confused about the origin of the product; or (2) tarnishes it by association with
unwholesome goods or services.
Trade Secrets
A trade secret is a formula, device, process, method, or compilation of information that, when used in
business, gives the owner an advantage over competitors who do not know it.
Case: Pollack v. Skinsmart Dermatology and Aesthetic Center P.C.7
Facts: Dr. Andrew Pollack owned the Philadelphia Institute of Dermatology (PID), a dermatology
practice. Drs. Toby Shawe and Samy Badawy worked for PID as independent contractors, receiving a
certain percentage of the revenues from each patient they treated. Natalie Wilson was Dr. Pollack’s
medical assistant.
Dr. Pollack tentatively agreed to sell the practice to Drs. Shawe and Badawy. But instead of buying
his practice, the two doctors decided to start their own, which they called Skinsmart. They executed a
lease for the Skinsmart office space, offered Wilson a job, and instructed PID staff members to make
copies of their appointment books and printouts of the patient list. Then they abruptly resigned from PID.
Ms. Wilson called patients to reschedule procedures at Skinsmart The two doctors also called patients
and sent out a mailing to patients and referring physicians to tell them about Skinsmart.
Dr. Pollack filed suit, alleging that the two doctors had misappropriated trade secrets.
Issue: Did Drs. Shawe and Badawy misappropriate trade secrets from PID?
Excerpts from Judge Cohen’s Decision: The right of a business person to be protected against unfair
competition stemming from the usurpation of his or her trade secrets must be balanced against the right of
an individual to the unhampered pursuit of the occupations and livelihoods for which he or she is best
suited. For this reason, to qualify for protection, the information must be the particular secrets of the
complaining employer, not general secrets of the trade in which he is engaged.
Against this backdrop, it is clear the patient list is a trade secret, worthy of protection. As conceded by
defendants, the confidentiality of patient information ensures that it remains unknown to those outside the
practice and makes the patient list valuable. Through the substantial efforts of plaintiff, the patient list was
compiled over numerous years, and contained 20,000 names with related information. PID spent money
for computers, software, and employees to keep and maintain the patient list. Within the offices of PID,
the information was not universally known or accessible. Not every staff member, including the practicing
physicians, could pull the records. Wilson did not have access to them and the doctors relied on other PID
employees to access the patient list. These same factors demonstrate that plaintiff sought to protect the
secrecy of the information.
The plaintiff must demonstrate that trade secret has value and importance to him and his business. As
noted above, defendants acknowledge the value of the patient list to PID’s practice. In addition, plaintiff
relied upon the patient list as the core component of his practice.
To have the rights to the use of the trade secret, the plaintiff needs to show he either discovered or
owned the trade secret. Plaintiff compiled the patient list over numerous years. The patient list was
maintained on PID’s computers by PID’s employees. Plaintiff’s tax returns show that PID was owned
solely by the plaintiff. These facts establish plaintiff’s ownership of the patient list.
Summary judgment is granted on the issue of liability against defendants Shawe, Badawy, and
Wilson.
Question: What did the defendants take from PID?
Question: Can a list of patients be a trade secret?
Question: What did Pollack have to do to qualify his patient list as a trade secret?
Question: Had Pollack done this?
Additional Example
Lest students think that stealing trade secrets is not a serious matter, consider this example. Petr
Taborsky, a former student research assistant at the University of South Florida, served seven months in
prison, including two months on a chain gang, for stealing trade secrets. Taborsky was an undergraduate
in chemistry and biology, working as a laboratory assistant at the College of Engineering when he took
part in a research project to make sewage treatment cheaper and more efficient. The research was
sponsored by Florida Progress Corporation, a utility holding company, which claimed that it had all rights
to the research.
Taborsky discovered a way to turn a clay-like compound similar to cat litter into a reusable cleanser
of sewage, a process that has potentially valuable applications. The project leader maintains that
Taborsky was part of a research team that made the discovery but the student claims he made the
discovery on his own after the project had ended. A jury convicted Taborsky of grand theft of trade
secrets. He was sentenced to a year’s house arrest, a suspended prison term of 3½ years, and probation
for 11½ years, as well as 500 hours of community service. However, he was sent to prison when he
violated the terms of his probation by obtaining three patents related to the research.8
Additional Question Update
Students sometimes ask about the plot of the story, My Mother Is the Most Beautiful Woman in the World,
in Essay Question 3. This is the story:
A little girl is separated from her parents. Meeting a group of villagers unfamiliar to her, she
describes her mother as the most beautiful woman in the world. The village leader sends boys to
bring back all the likely candidates; none, of course, is the mother. Finally, a homely woman, in fact
the girl’s mother, approaches the crowd and is joyfully reunited with her child. The village leader
presents the moral of the story: “We do not love people because they are beautiful, but they seem
beautiful to us because we love them.”
Multiple Choice Questions
1. Donald Trump wanted to copyright the phrase “You’re Fired!,” which he used on his
reality show, The Apprentice. He_______.
(a) can copyright it only if he registers it
(b) can copyright it only if it is in a tangible form
(c) cannot copyright it because it is not novel
(d) None of the above
Answer: B. Trump cannot copyright it because it is not fixed in a tangible form. Chances
2. Thomas’s English Muffins wanted to protect the method by which it makes muffins with air
pockets – what it calls “nooks and crannies”. What would be the best way to achieve this goal?
(a) Patent
(b) Copyright
(c) Trademark
(d) Trade secret
(e) This method cannot be protected.
3. VitaminWater has become such a success that other companies are also now selling similar (but not
identical) flavored colored water. Some competitors bottle their drinks in a similar bell-shaped bottle
with a two-toned label that has a horizontal color band. What is the best infringement claim for
VitaminWater to make against these competitors?
(a) Patent
(b) Copyright
(c) Trademark
(d) Trade secret
(e) There is no good claim
4. Faber-Castell began manufacturing pencils in 1761. Although pencils and erasers had both existed
for some time, not until the 1870s, did the company began putting erasers on the end of its pencils.
The company was sued by an inventor who had previously patented this idea. The case went to the
Supreme Court. Who won the case?
(a) The patent holder because no one had ever put an eraser on a pencil before.
(b) The patent holder because the PTO had approved his patent.
(c) Faber-Castell because the pencil with an eraser was not novel.
(d) Faber-Castell because the pencil with an eraser was not useful.
5. If you buy a DVD, you have the legal right to:
(a) Watch it as many times as you want and then give it away.
(b) Copy it to your computer and then give it to a friend.
(c) Copy it to your computer and sell it on eBay.
(d) All of the above.
(e) a and b only.
6. A couple thought up a clever name for an automobile. They wanted to protect this name so that
they could ultimately sell it to a car manufacturer. What would be the best method to attain this
goal?
(a) Patent
(b) Copyright
(c) Trademark
(d) Trade secret
(e) This name cannot be protected.
Case Questions
1. While in college, David invented a new and useful machine to make macaroni and cheese (he called it
the “Mac ‘n’ Cheeser”). It was like nothing on the market, but David did not apply for a patent. At
that time, he offered to sell his invention to several kitchen products companies. His offers were all
rejected and he never sold the invention. Years later, he decided to apply for a utility patent. Is David
entitled to a utility patent?
Answer: No, while the Mac n’Cheeser was new, useful, and nonobvious at the time it was invented,
2. Ethics After Edward Miller left his job as a salesperson at the New England Insurance Agency, Inc.,
he took some of his New England customers to his new employer. At New England, the customer lists
had been kept in file cabinets. Although the company did not restrict access to these files, it claimed
there was a “You do not peruse my files and I do not peruse yours” understanding. The lists were not
marked “confidential” or “not to be disclosed.” Did Miller steal New England’s trade secrets?
Whether or not he violated the law, was it ethical for him to use this information at his new job? What
is your Life Principle?
3. Rebecca Reyher wrote (and copyrighted) a children’s book entitled My Mother Is the Most Beautiful
Woman in the World. The story was based on a Russian folktale told to her by her own mother. Years
later, the children’s TV show Sesame Street televised a skit entitled “The Most Beautiful Woman in
the World.” The Sesame Street version took place in a different locale and had fewer frills, but the
sequence of events in both stories was identical. Has Sesame Street infringed Reyher’s copyright?
4. Roger Schlafly applied for a patent for two prime numbers. (A prime number cannot be evenly
divided by any number other than itself and 1. Examples of primes are 2, 3, 5, 7, 11, and 13.)
Schlafly’s numbers are a bit longer—one is 150 digits, the other is 300. His numbers, when used
together, can help perform the type of mathematical operation necessary for exchanging coded
messages by computer. Should the PTO issue this patent?
Answer: The PTO patented these numbers because they were useful, they had never been used before
2 New England Ins. v. Miller, 1991 Conn. Super. LEXIS 817 (1991).
3 Reyher v. Children’s Television Workshop, 533 F.2d 87, 190 U.S.P.Q. (BNA) 387 (2d Cir. 1976).
4 Boston Globe, April 6, 1995, p. 69.
5. Hair Corp. sells shampoo in the United States and internationally. Its international prices are 30
percent less than its domestic prices. Big Seller, Inc. is in the business of buying products
internationally in bulk and reselling them in the U.S. Big Seller buys Hair Corp’s shampoos in Peru
and imports them to the United States to be sold at international rates. Can Hair Corp successfully sue
Big Seller for copyright infringement?
6. Victoria’s Secret, a well-known lingerie company, found out that a man named Victor Moseley was
running a small store in Kentucky named “Victor’s Little Secret.” Moseley’s shop sold clocks,
patches, temporary tattoos, stuffed animals, coffee mugs, leather biker wallets, Zippo lighters, diet
formula, jigsaw puzzles, handcuffs, hosiery, greeting cards, incense burners, car air fresheners,
sunglasses, jewelry, candles, and adult novelties. Women’s lingerie represented about 5 percent of its
sales. Does Victoria’s Secret have a valid intellectual property claim?
7. Sequenom developed a noninvasive prenatal diagnostic test to assess the risk of Down syndrome or
other chromosomal abnormalities in fetuses. The test analyzes DNA from the fetus that is found in the
mother’s blood. Prior to this test, women had to undergo invasive tests that carried a slight risk of
miscarriage. The PTO awarded Sequenom a patent on the test, but other diagnostic testing companies
sued to invalidate the patent. Is Sequenom’s patent valid?
Answer: In 2013, a California federal court invalidated Sequenom’s patent on the basis that it covered a
8. Frank B. McMahon wrote one of the first psychology textbooks to feature a light, easily readable
style. He also included many colloquialisms and examples that appealed to a youthful student
market. Charles G. Morris wrote a psychology textbook that copied McMahon’s style. Has Morris
infringed McMahon’s copyright?
Answer: The court held that Morris had not infringed McMahon’s copyright because a writer
Discussion Questions
1. ETHICS Virtually any TV show, movie, or song can be downloaded for free on the Internet.
Most of this material is copyrighted and was very expensive to produce. Most of it is also
available for a fee through such legitimate sites as iTunes. What is your ethical obligation?
Should you pay $1.99 to download an episode of American Idol from iTunes or take it for free
from an illegal site? What is your Life Principle?
5 V SECRET CATALOGUE, INC., v. MOSELEY 605 F.3d 382; 2010 U.S. App. LEXIS 10150 (6th Cir. 2010).
2. For much of history, the copyright term was limited to 28 years. Now it is as long as 120 years.
What is a fair copyright term? Some commentators argue that, because so much intellectual
property is stolen, owners need longer protection. Do you agree with this argument?
3. The America Invents Act allows inventors to “buy” their way to the front of the line and
expedite review of their inventions through a Track One application. This clearly favors
those applicants who can pay. Do you agree with this practice? Why or why not?
4. Should Amazon be able to patent the One-Click method of ordering? What about Facebook’s
patent on a process that “dynamically provides a news feed about a user of a social network?”
Were these inventions really novel and non-obvious? What should the standard be for business
method patents?
5. Fredrik Colting wrote a book entitled, 60 Years Later: Coming Through the Rye, a riff on J. D.
Salinger’s famous Catcher in the Rye. Colting’s book imagined how Salinger’s protagonist,
Holden Caulfield would view life as a 76-year old. Alice Randall wrote a novel entitled The Wind
Done Gone, which retells the civil war story Gone with the Wind from the perspective of Scarlett
O’Hara’s (imagined) black half-sister. Both Colting and Randall were sued and both alleged fair
use. Should they win?
Answer: The court ruled that Colting’s book was not fair use because it was not parody or
6. In New Orleans, Mardi Gras “Indians” are carnival revelers who dress up for Mardi Gras in
costumes influenced by Native American ceremonial attire. “Indians” often spend the entire year
and thousands of dollars crafting their intricate designs with feathers, beads, and other
decorations. As cultural icons in New Orleans, their images are often captured by photographers,
who profit from the sale of these pictures. The Indians’ creations are not copyrightable because
the law views costumes as functional, not aesthetic works. What are the Indians’ best arguments
to change the law? Should cultural works be owned?
Answer: The Mardi Gras Indians will surely argue that the time, effort, expense, and creativity
?
7. Music stars Beyonce and Jay-Z named their newborn daughter Blue Ivy and then rushed to
trademark the name, because they planned to use it in commerce. Their application was denied
because a wedding planner in Massachusetts was already using “Blue Ivy” as the name of her
business. Is this the correct outcome? Should people have priority in protecting personal names?
Should a small business have priority over what would surely have been a much larger, more
profitable use of this name?
