• I Introduction
  
• II The Price of Ignorance
  A. Independent Inventors and the Mousetrap Myth
  B. Entrepreneurs Who Cannot Afford Intellectual Property Protection
  
• III Protecting Work Products
  A. Patents
  B. Copyrights
  C. Trade Secrets
  
• IV Preserving Competition on the Merits
  A. Preventing Misrepresentations Generally
  B. Trademarks
  
• V. Conclusion
  

About this document

Footnotes are linked, but you may find it useful to open another browser window to have related notes and text adjacent to one another.

Since its initial publication, this discussion has often been revised. While U.S. IP law changes ever-more frequently, many changes are of little significance in the grand scheme of things. For example, the term of copyright has been increased by 20 years, and the copyright registration fee has increased by $10. Also, patent fees tend to change often.

I much appreciate frequent updating suggestions by Harold L. Burstyn, an Adjunct Professor, L. C. Smith College of Engineering and Computer Science, at Syracuse University, who is also Of Counsel to Milde & Hoffberg LLP in White Plains, NY.

Contents

I. Introduction

Each part of IP law is quite complex in itself. At FPLC, a wide array of courses now cover practice before the U.S. Patent and Trademark Office (PTO) in patent cases, substantive patent and trade secret law, copyrights, trademarks and unfair competition, and IP licensing -- as well as international, comparative and business-related topics. Still, articles such as this[3] and survey courses can play an important role. Because IP issues arise in many common transactions, most lawyers should have a grasp of the basics. Those who wish to specialize should also appreciate that basics lay a foundation for grasping cumulative and alternative strategic value of IP options. These cannot be evaluated in isolation, as in more detailed written treatments or advanced courses.

In approaching IP most broadly, it is critical to appreciate the extent to which competition is preeminent in U.S. law. Ironically, some of the strongest evidence of its importance appears in IP cases.[4] Thus, notwithstanding renewed or possibly expanded recognition of the value of IP in encouraging innovation, IP owners must understand that anything that prevents others from selling products or services will be limited and strictly scrutinized.

From this perspective, patent, copyright and trade secret protection comprise but one of two major branches of IP law.[5] In stark contrast, the other major branch of IP law is designed to ensure that competition is on the merits. Such law, designed to prevent source confusion and damage to commercial reputations generally cannot be used to prevent competition in goods and services.

As explained in more detail below, forms of protection falling within the first branch (work products) may be used to prevent others from, e.g., making or selling protected products or services. Based on a Constitutional provision,[6] patents and copyrights are of limited duration and governed almost exclusively by federal law. Trade secrets are theoretically unlimited in duration and governed mostly by state law.

Of the three, patents offer the strongest possible protection. They can be used to prevent others from, e.g, using or selling covered technology -- even if it was independently created. Yet, they cost thousands of dollars, are difficult to obtain, last (subject to possible extensions to compensate for various kinds of delays) only twenty years from when an application is first filed, are only useful after issue, and only in the country where issued. Among other things, subject matter must usually be both objectively novel and unobvious to those familiar with relevant technology.

Copyrights, however, may last to 70 years beyond an author's lifetime. are much more easily and cheaply obtained, and registration need be pursued only if one wants to sue. Subjectively novel works are protected (even beyond U.S. borders) as soon as they are "fixed" or somehow recorded. Copyrights are somewhat weaker than patents because independently created, identical works do not infringe, but this difference may be more theoretical than real. Defendants may have difficulty convincing courts that they did not copy publicly available works. Possibly because of this, Congress and the courts have tried to ensure that copyrights cover different subject matter.[7] Still, copyrights and patents are often complementary.[8]

Trade secret protection, as reflected in its name, protects works that can be and are kept secret. Maintaining secrecy is often expensive; for some works, it is impossible. Protection is weaker than that afforded by either patents or copyrights because rights are not infringed if competitors copy publicly available works (reverse engineer). Yet, secrecy is often an important option. In the case of, e.g., manufacturing processes, patent infringement may be impossible to detect and secrecy is not only possible but also may be preferred.[9]

The second major branch of IP law (designed to ensure that competition is on the merits) allows firms to take action to prevent others from providing various kinds of false and misleading information to consumers. Indeed, accurate information makes competition possible. If consumers lack good information, including that enabling them to associate prior happy (or unhappy) experiences with particular firms, they receive little if any advantage from alternative commercial sources.

Trademarks, or brand names, are central to this major branch of IP law. Rights in a good trademark generally arise automatically upon its first commercial use and have potentially unlimited duration. Although federal registration confers advantages, marks need not be registered. Commonlaw rights are adequate to prevent others from using similar marks when consumers may be deceived as to source or sponsorship of goods or services. While trademarks have no value in directly protecting work products, firms that treat consumers well find their goodwill to command justifiably higher prices. Thus, when R&D costs are not large, trademark rights may be adequate to recoup them.

Until recently, most lawyers and law schools paid little attention to IP.[10] When courses have been offered,[11] few students have elected them.[12] Thus, what many older lawyers think they know about IP is wrong.[13] Hence, judges tend also to be uninformed. Lawyers trained in science or engineering have traditionally dominated IP practice. Yet, no particular background is needed for trademark or most copyright practice. Also, while technical training and passing a special examination are needed to obtain patents for others,[14] after patents issue, any attorney can assign, license or otherwise dispose of them -- or sue infringers. More importantly, attorneys with little interest in IP, or those who narrowly focus, can help assess clients' options before they expire and otherwise avoid major pitfalls.[15]

Contents

II. The Price of Ignorance

A. Independent Inventors and the Mousetrap Myth

If a man can... make a better mousetrap than his neighbor, though he builds his house in the woods the world will make a beaten path to his door.

Most people have heard variations on the remark quoted above.[17] It is somewhat ambiguous, but many construe it to mean that anyone who invents a new mousetrap will be wealthy -- particularly if they can patent it. Well-informed patent attorneys know this as the "mousetrap myth."

That it is a myth is illustrated by the experience of Chester M. Woolworth, president of the Animal Trap Company.[18] In the 1920's, the company sold a mousetrap for five cents. In 1928, Woolworth succeeded in improving the trap, but the improved version cost twelve cents.

Unfortunately, Woolworth failed to consider that, once a mouse had been caught, people usually disposed of both mouse and trap. Apparently because consumers were obligated to clean or discard a trap costing almost two and one-half times as much as Woolworth's other trap, sales were low.

A patent would not have improved the appeal of Woolworth's invention. Yet, each year, independent inventors spend millions of dollars on patents. If established manufacturers can make as big a mistake as Woolworth's, imagine the odds of commercial failure faced by those with less experience. As well summarized several years ago:[19]

The inventor generally might undertake to promote his own invention in whatever manner he can and to whatever degree of effectiveness. After an unbusinesslike solicitation effort to various companies, resulting in total rejection, he understandably looks for outside help only to find there is little or none available.... Thus, somewhat disillusioned and perhaps embittered, it is no wonder that the typical amateur inventor is eventually driven into the waiting arms of the invention promoter.... In an indifferent world, the [promoter] tells the inventor exactly what he has been searching in vain to hear -- the promise of success in terms... he can directly relate to. The [promoter] preys on the inventor's intense ambition by offering him the one thing he must have to sustain himself -- hope. And hope, in the final analysis, is what the [promoter] is selling.

Notwithstanding occasional action by private[20] and public parties,[21] the mousetrap myth encourages inventors to hear what they want to hear. Thus, promoters who promise no more than the very little most usually deliver will continue to thrive[22]

Contents

B. Entrepreneurs Who "Cannot Afford" IP Protection

Realizing that it is often easier to patent than to sell inventions, some entrepreneurs conclude that patent and related protection can be afforded only by large companies. Such people are as misinformed as independent inventors dazzled by the mousetrap myth.

Let's assume that a Woolworth descendant who recently invented another mousetrap, consults an attorney about setting up a new business. During her visit, Ms. Woolworth also asks about patents and trademarks. The attorney says that he doesn't handle such things but understands that they cost thousands of dollars. Having a limited budget, she quickly dismisses such "expensive" notions.

Later, as her mousetrap moves toward production, Woolworth begins to consider possible product names and asks for suggestions. An employee, inspired by the cat in Disney's "Pinocchio," suggests "Figaro." Woolworth adopts that as her trademark.

Having heard of her ancestor's experience, Woolworth pays careful attention to what consumers want. Her mousetraps sell well -- so well that, as her firm begins to break even, a larger firm closely copies them, as well as their instructions and labels. With better established marketing channels and other advantages, it undersells her by 20%. Unable to lower her price and stay in business, Woolworth consults an IP attorney. First, she learns that her printed material is already protected by copyright. When challenged, the competitor easily evades copyright liability by rewriting. Second, she learns that no patent is possible if sought more than one year after a product is offered for sale.[23] Third, she learns of the need to determine whether her mousetrap infringes another's patents. A search shows that a minor component does. A license is available but costs too much. So, she disposes of inventory and redesigns her product.

Shortly thereafter, the employee who suggested "Figaro" leaves and registers the name locally. About the same time, Woolworth receives a letter objecting to her use of "Figaro." Because it is cheaper than litigation, she must write off her goodwill. Selecting, clearing and federally registering some other mark would probably would cost considerably less than the cost of informing consumers of the new mark.[24]

No entrepreneur wants to use precious startup capital for legal fees. Yet, Woolworth's failure to explore others' rights was at least as unwise as purchasing a building without a clear title.

Had her first lawyer been better informed, our hypothetical Woolworth would have been much better off. It costs little to register copyrights,[25] but this substantially alters the affordability of litigation. Also, patent costs could easily have been justified.[26]

Contents

[1] A comprehensive review of the situation appears in Martin Shapiro, The Supreme Court and the Patent Office , Ch. 3 in The Supreme Court and Administrative Agencies 143 (1968).

[2] See, e.g., Thomas G. Field, Jr., Maximizing the Return from Genome Research, 5 Risk 95 (1994) (introducing a symposium on the topic); see also, papers following.

[3] Prior versions of this paper are Intellectual and Industrial Property in a Nutshell, 77 W. V. L.Rev. 525 (1975); Brief Survey... Patent, Trademark, Copyright, 26 Idea 57 (1985) and Brief Survey of Intellectual Property, 31 Idea 85 (1990). Text has often been carried forward, but each has a distinct emphasis.

[4] See, e.g., Morton Salt Co. v. G. S. Suppiger Co., 314 U.S. 488 (1942), Scott Paper Co. v. Marcalus Mfg. Co., Inc., 326 U.S. 249 (1945), Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, and its companion, Compco Corp. v. Day-Brite Lighting, 376 U.S. 234 (1964). See also, e.g., Lear, Inc. v. Adkins, 506 U.S. 653 (1966).

[5] This organization closely tracks the syllabus for my course, Fundamentals of Intellectual Property.

[6] U.S. Const., Art. I, § 8, cl. 8, provides:

The Congress shall have power... to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. [Emphasis added.]

It is interesting that "science" corresponds to authors (copyrights) and "useful arts" to inventors (patents). When the clause was written, the former obviously meant "knowledge" and the latter "technology." The patent statute foreshortens "useful arts" to "art," but the word connotes technology.

[7] See, e.g., Mazer v. Stein, 347 U.S. 201 (1954) (that a lamp base was patentable did not preclude its being copyrightable); see also, Appln. of Yardley, 493 F.2d 1389, 1393 (CCPA 1974) (an applicant could have both a design patent and copyrights on a Spiro Agnew watch).

[8] Id. See also generally, Brief Survey... Patent, Trademark, Copyright, supra note 3, at 89 (a proposal for reconciling IP options).

[9] Compare Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 489 (1974) ("In the case of trade secret law no reasonable risk of deterrence from patent application by those who can reasonably expect to be granted patents exists.").

[10] Even in The AALS Directory of Law Teachers 1993-94, the list of intellectual property professors occupied only 2 pages, and those with more than 10 years of experience, less than half of a page. The list of contracts professors, however, ran 6.5 page, and those with more than 10 years experience occupied over 2 pages.

By the time The AALS Directory of Law Teachers 2005-2006 was published, the list of IP professors had increased by 250%, whereas contracts professors had increased only 38%.

[11] Id.

[12] While less than half of FPLC's J.D. graduates took any intellectual property courses prior to 1990, enrollments have dramatically increased. About half of the first year class elects my introductory course, and very few obtain J.D.s without taking at least one IP course.

[13] See Paul Goldstein, Patent, Copyright and Related State Doctrines, preface (1973).

[14] The 1965 Agency Practice Act, codified at 5 U.S.C. § 500, provides that no other federal agency can require an attorney to do more than file a written declaration of representation. See also 35 U.S.C. § 2(b)(2)(D) and Sperry v. Florida, 373 U.S. 379 (1963) (finding that states cannot regard U.S. Patent and Trademark Office (PTO) recognized patent practitioners as engaged in the unauthorized practice of law).

[15] Several are illustrated below. See also, e.g., my online discussion, Avoiding Patent, Trademark & Copyright Problems -- one in a series addressed to the needs of, e.g., artists, inventors and entrepreneurs.

[17] Attributed to Ralph Waldo Emerson; SeeBartlett's Familiar Quotations 605a (14th ed. 1968).

[18] See Management Institute, Boston College School of Management, Venture Capital: A Guidebook for New Enterprises, 8 (U.S. Govt. Printing Office 1972). .

[19] Richard Onanian, Invention Promoters, Invention Management, May 1979, at 3.

[20] See, e.g., Arnesen v. Raymond Lee Organization, 333 F.Supp. 116 (C.D. Cal. 1971).

[21] For example, in Jan. 1994, the Federal Trade Commission published Invention Promotion Firms, a pamphlet in its "Facts for Consumers" series. It has also filed several suits.

Also, in 1999, a new section was added to the patent statute: 35 U.S.C § 297. Information is available at the PTO website.

[22] See the ways to avoid such firms, published by a non-profit assistance program in 1996. Advice provided there is still worth heeding.

[23] U.S. patents are barred for failure to apply within one year of a product's being publicly disclosed anywhere or offered for sale in the U.S.; 35 U.S.C. § 102(b). Throughout most of the world, the right is forfeited immediately.

[24] Based on American Intellectual Property Law Association, Committee on Economics of Legal Practice, Report of the Economic Survey 2003, 59. in 2002, the combined average charges for a search, application and prosecution were about $2500 -- plus PTO fees).

[25] Based on the Economic Survey, supra , at 65, the median charge for copyright registration in 1997 was about $200, but the process is usually so simple that most people do it themselves.

[26] See, e.g., my discussion Seeking Cost-Effective Patents. As recounted there, inventors can control costs in several ways. For example, if a novelty search is unfavorable, most further expense can be avoided. If an invention cannot be marketed successfully, maintenance fees need not be paid (current information about those and other fees is available at the PTO website).

Contents

III. Protecting Work Products

A. Patents
1. Their origin and rationale

"Patent" is an abbreviation of "letters patent" and signifies an exclusive government grant.[27] Early U.S. patents gave title to tracts of land.[28] While patents discussed here have limited duration,[29] the rationale is similar: They encourage investment in research and development.[30] In return, those with qualifying innovations may exclude others[31] -- regardless of copying[32] -- until their patents expire. Moreover, anyone can use inventions after expiration.

Those who regard patents as anticompetitive should consider, e.g., that:[33]

[T]he patent system encourages competitive effort... that would not otherwise take place. The television industry, for example, was for all practical purposes nonexistent a decade ago -- now it dwarfs the radio industry.... Yet, the industry is characterized by huge research [costs]... -- over $65 million in color television already and the return is yet to come. These expenditures have been made in anticipation of monetary return through patent license royalties. The antibiotics industry, limited to penicillin a decade ago, is now the scene of the most intense competition....

In 1952, at the urging of the bar, Congress revised and codified the law. The situation was still regarded as unsatisfactory,[35] and the Senate began a thorough review shortly thereafter.[36] All things considered, if only reasonably contested patents are litigated, patentees should have about a 50-50 chance. Yet, in many jurisdictions patent owners rarely prevailed.[37] This led to doubts about the value of patents and, in turn, may have led to reduced levels of U.S. innovation.

For about 25 years, attempts to strengthen the patent system were not viewed sympathetically. However, in the late 1970's, President Carter and Congress, if not also judges,[38] began to see that stronger protection might help address trade imbalances.[39] One of the first, and perhaps most significant, results was creation, in 1982, of a Court of Appeals for the Federal Circuit [CAFC]. Subject only to infrequent review by the Supreme Court, it exercises exclusive appellate jurisdiction in patent cases.[40]

Earlier, two federal courts of appeal had shared jurisdiction to review PTO decisions,[41] and all circuits had jurisdiction over patent litigation.[42] This arrangement, coupled with infrequent Supreme Court review, facilitated the application of different validity standards in obtaining and enforcing patents, as well as the development of diverse infringement standards.[43]

Now, judges who review PTO decisions also consider patents in the context of infringement litigation. This makes it more likely that only valid patents will be granted.[44] Some may be surprised, but corporate patent attorneys in particular would not want it otherwise. While a firm's patents keep competitors at bay, its competitors' patents likewise keep it at bay!

Moreover, CAFC decisions have led to a perception that valid patents will be enforced.[45] Thus, that Court may encourage settlement by eliminating wasteful forum shopping and reducing uncertainty.

Plant patents reward discovery of previously uncultivated plants or the breeding of novel plants. However, asexual propagation is needed.[52] Because naturally occurring plants may be protected, the subject matter of plant patents need not be objectively novel.[53] This is a major distinguishing feature of plant patents; another is that infringement should occur only if protected plants are reproduced by grafting from patented stock. In both regards, plant patents seem to resemble "copyright" more than they do "patent" protection.[54]

Before an application is filed,[57] the subject matter should be considered. Although some aspects of an invention may encompass debatable subject matter,[58] a specialist may be able to obtain adequate coverage. For example, while one cannot obtain a utility patent on a naturally occurring substance,[59] a claim drawn on an essentially pure form of that substance (or a method of obtaining it) may be patentable if it satisfies other requirements.

Also, before filing, a prior art search should be made.[61] An invention could be fully disclosed in a patent or elsewhere; if so, it is not novel and is unpatentable.[62] Alternatively, one or more elements of the invention may lack novelty; in that case, one must convince an examiner that the invention would have been "unobvious" to those skilled in the art at the time it was made.[63] While a novelty search is not required, omitting it to save money could easily mean that the cost of preparing and filing an application is wasted. It could also result in less protection than deserved.[64]

Before an application is filed, inventors must be identified. Regardless of ultimate ownership, a U.S. application must be filed in the inventors' names, and they usually must participate in "prosecution".[65]

An application consists of a description of the invention (the "specification") with or without drawings, a fee, and an oath or declaration that the applicant is the first and true inventor.[66] The specification must describe the invention in terms that enable those skilled in the art to practice it and conclude with one or more "claims." The first (what patent attorneys usually mean by "specification") frames the inventors' contributions, but claims identify what is believed to be protectable.[67]

Upon receipt, the PTO usually gives applications a filing date and serial number.[68] Based upon the classification of the claimed subject matter,[69] they are assigned to a patent examiner. When applications come up for action, examiners may object on formal grounds or reject one or more claims as substantively unpatentable.[70]

This ex parte process rarely takes less than eighteen months, and may take several years, while the PTO attempts to ensure that the application is complete and enables others to practice the invention.[72] Are the claims reasonably related to the inventor's contribution?[73] Do they define proper subject matter that is useful, novel, and not obvious at the time of the invention?[74]

As mentioned,[75] the novelty requirement is a serious trap for the uninitiated but is easily avoided. No one should disclose or try to commercialize inventions without having discussed the situation with a specialist! U.S. law contains a one-year grace period, but patentability of an invention offered for sale, used or described publicly is immediately lost in most of the world.[76]

If attorneys cannot convince examiners that submitted claims are allowable, they may be abandoned or narrowed, an application may be abandoned or refiled,[77] or appeals may be taken. Appeals within the PTO,[78] and ultimately (short of the U.S. Supreme Court)[79] review in the CAFC[80] can be expensive. However, anyone who considers dropping or narrowing claims to control costs must consider that claims can cover the equivalent of a square inch of Arctic tundra or a square m ile of Manhattan.[81] One must consider whether protected territory is adequate.[82] Also, applicants should know that patentees are estopped from arguing that activity falling outside narrowed claims, upon equitable principles, infringes.[83]

After an application satisfies the PTO, it is prepared for issue upon the payment of a further fee.[84] Here, applicants run a small risk of being drawn into an interference. Only one patent may issue for an invention. In the U.S., interferences determine who is first.[85] Although uncommon, interference require a believable record of what was done -- and when. As soon as innovation begins, inventors should start a notebook. Trusted third parties should be asked to witness it periodically and to indicate, in writing, that they have read and understood it.

No rights exist before issue,[90] but patent applications may be assigned.[91] Employed inventors usually pre-assign inventions.[92] Partial rights may be assigned, and unrecorded assignments are void against later transferees without actual notice.[93]

Patents can also be licensed. This is often little more than a promise not to sue, e.g., if royalties are paid. If the licensee and licensor (or assignee and assignor) are in the same market, careful attention must be given to antitrust restrictions on horizontal agreements. Restrictions on vertical agreements are not so acute, but they should also be avoided.[94]

The statute also provides that joint owners, in the absence of contrary agreement, may each practice an invention without accounting.[95] This can create serious problems for independent inventors. Would-be transferees are rarely interested in non-exclusive rights -- particularly where substantial risk capital is needed to develop and market the invention.[96] Unless co-owners agree on terms of a transfer, neither may have anything valuable to convey. This can be avoided if the inventors assign their respective interests to a single entity before disagreements arise.

Two basic defenses, noninfringement and invalidity,[101] may be asserted in any IP infringement suit. Patent claims are presumed valid[102] but can be invalidated with clear and convincing evidence -- in what amounts to collateral review of the grant. Invalidated claims cannot later be asserted.[103]

Applications may cover narrow inventions.[104] These often issue if claims are sufficiently limited. Examiners have difficulty showing that several obvious features, taken together, are obvious. Although others must copy quite closely to infringe narrow claims, the Supreme Court has traditionally shown little sympathy for such patentees and tended to find their patents invalid.[105] Inventors with limited resources may not appreciate the effect of undiscovered prior art.[106] Infringers encounter more difficulty convincing a court that a claim is invalid if the PTO considered all the art. It is thus unwise to stint on searches or fail to bring everything remotely relevant to an examiner's attention. All claims are unenforceable if an infringer can show, e.g., that known relevant art was not disclosed to the PTO, even if it applies to only one claim.[107]

Even well-heeled applicants must attend to prosecution costs. They cannot afford to do other than prosecute domestic and foreign applications with vigor commensurate to the projected market value of their inventions. If that value is underestimated, searches may miss prior art. Once an invention has been commercialized, infringers have an inherent advantage: They know exactly what it is worth, and this may justify a considerably expanded novelty search.[109]

Because patentees have the burden of proving infringement, it may be easier for infringers to show that their acts fall outside the scope of the claims. Once more, poorly financed patentees are particularly vulnerable. If claims are narrower than proven market value warrants, imitators may be able to design around the claims.[110]

Besides invalidity and non-infringement, infringers have several general defenses. Perhaps the most prominent of these is unclean hands -- likely if the patentee's licenses contain restrictions going beyond the reach of the patent law[111] or violating antitrust laws.[112]A similar defense is fraud or inequitable conduct in prosecution. The consequences of the last are far more serious.[113] Unclean hands does not bar relief after offensive conduct has ceased, but all claims in an improperly procured patent are likely to be invalid.

Finally, defenses can be affected by the relationship between the parties or the special status of the infringer. For example, an injunction will not lie against the federal government,[114] and state governments may not be sued in federal court.[115] Where licenses or assignments are involved, transferees have the usual contract defenses and may not be estopped from showing patent invalidity.[116]

Thus, even technology broadly described in the literature, licensed, or covered by expired patents poses some risk.[119] Infringement can always be avoided by ceasing to use the technology when a patent issues. Yet, this may be painful if start-up costs have not been recouped or substantial inventory has been accumulated. Hence, firms must exercise every precaution against the possibility of subsequently issued patents.

Contents

B. Copyrights[120]
1. Origins and rationale

As with patents, the Constitution is the legal foundation for copyright.[121] The first copyright law was passed in 1790, but not until 1891 were foreign authors protected.[122] After a major revision in 1909, the law served remarkably well and was not replaced until 1976 -- partly because of technological advances. Amendments, mostly procedural, followed.[123]

Copyright is intended to promote the progress of "science."[124] Persons who invest time and private capital can recover investments if consumers favor their work. However, as with inventors, few authors support themselves by direct public sales. Copyright would probably accomplish little if authors could not convey rights to publishers. Obviously, publishers who copy works without paying, e.g., for authors' time can beat the prices of those who do, and copyright goes a long way toward preventing free riding.

Yet, while commercial infringement is comparatively easy to detect and address, non-commercial activity often is not. For example, individuals can make copies of computer software fully equivalent to those on sale -- and for a tiny fraction of the cost. Such copying is almost impossible to detect. Hence, honest users surely pay more than would be necessary if all contributed. In extreme situations, contributing users have been unable to support product development.

Copyright protection subsists... in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Works of authorship include... (l) literary works (2) musical works including any accompanying words (3) dramatic works, including any accompanying music; (4) pantomimes and choreographic works (5) pictorial, graphic, and sculptural works; (6) motion pictures and other audiovisual works; (7) sound recordings; and (8) architectural works. [Emphasis added.]

In no case does copyright protection of an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.

To give the author of the book an exclusive property in the art described therein, when no examination of its novelty has ever been officially made would be a surprise and a fraud upon the public. That is the province of letters-patent, not of copyright. [Emphasis added.]

Further insight is provided in an opinion by Justice Holmes reversing two lower court holdings that circus posters do not qualify for copyright. Dismissing an apparent objection that copyright for pictures depicting real scenes would interfere with others' legitimate interests, he noted, "Others are free to copy the original. They are not free to copy the copy."[127] Also, dismissing the apparent objection that commercial "art" (in the modern sense) falls within "the useful arts," he held that "A picture is none the less a picture and none the less a subject of copyright that it is used for for an advertisement."[128] Finally, disposing of the idea that posters are artistically unworthy, he said "That these pictures had their worth... is sufficiently shown by the desire to reproduce them without regard for the plaintiff's rights."[129]

Finally, consider an important 1954 case.[130] There, plaintiffs had registered copyright in statuettes of dancing figures, the vast bulk being sold as fully equipped lamps. Defendants, having copied and sold the lamps, argued that plaintiffs' statuettes were protectable only by design patent because, as suggested in Baker, they "required the critical examination given patents to protect the public against monopoly."[131] Pointing out that "Neither the Copyright Statute nor any other says that because a thing is patentable, it may not be copyrighted,"[132] the court upheld the copyright. In doing so, Justice Reed observed:[133]

Unlike a patent, a copyright gives no exclusive right to the art disclosed; protection is given only to the expression of the idea -- not the idea itself. ... Absent copying there can be no infringement of copyright. Thus, [plaintiffs] may not exclude others from using statuettes of human figures in table lamps; they may only prevent use of copies of their statuettes as such or as incorporated into some other article. [Emphasis added.]

"Pictorial, graphic, and sculptural works"include two-dimensional and three-dimensional works of fine, graphic, and applied art.... [T]he design of a useful article... shall be considered a pictorial, graphic, or sculptural work only... to the extent [it] incorporates... features... capable of existing independently of [its] utilitarian aspects....

A "useful article"... [does] not merely... portray the appearance... or... convey information. An article that is normally a part of a useful article is considered a "useful article." [Emphasis added.]

If a work is created by an employee, it is "for hire"; the employer owns everything. If a work is finished before it is sold, it is not "for hire"; the author retains the copyright unless separately conveyed. Commissioned works warrant special care. They may be regarded as joint works,[142] but few can be "for hire" -- and only if so agreed in writing.[143]

If a work is for hire, the term is the shorter of 95 years from publication or 120 years from creation. For other works, unless published anonymously or under a pseudonym, copyright lasts until 70 years after the death of the last surviviving author, if more than one.[144] Moreover, authors (or successors) have a right to terminate transfers within a five year period beginning 35 years after the transfer.[145] If a work is for hire, no termination right exists.[146]

Aside from these matters, copyright and patent licenses and assignments are similar; e.g., it is necessary to record transfers to give constructive notice to later transferees.[147]

Notice warrants closer attention. Under the 1909 Act, failure to give proper notice when a work was published was fatal: State protection was lost, and federal protection was forfeited. While copyright notice is unnecessary,[150] it is still a good idea. Some countries where an author might have rights under international treaties require traditional notice, as well as, e.g., "All rights reserved."[151] Also, after being free to copy published works lacking notice, some people will need to learn that lack of notice no longer means lack of copyright.[152]

Registration follows an "examination".[156] The Copyright Office sometimes rejects an application for improper subject matter,[157] but registration is largely ministerial. Assuming appropriate subject matter, only subjective novelty is usually required.[158] Thus, many valid copyrights apparently could cover very similar works (e.g. , photographs of the same tree, taken from the same angle), each in a different owner.[159] Even works derived from prior works (e.g., a film based on a novel) seem generally to qualify,[160] but these are of course subject to any rights in the originals.

Persons who directly infringe copyrights or induce or otherwise contribute to infringement[162] must be sued in federal court.[163] Subject to possible limitation based on time of registration,[164] remedies include injunction, impounding (and destroying or otherwise disposing of) infringing copies, costs and attorneys' fees, damages and profits, and statutory minimum damages.[165] Those who infringe willfully and for gain suffer larger statutory damages and may incur criminal sanctions.[166]

As with patents, invalidity and noninfringement are possible defenses -- along with generic defenses such as unclean hands[167] or fraud on the Copyright Office.[168] A certificate of registration issued before or within five years of publication constitutes only "prima facie evidence of the validity of the copyright and of the facts stated in the certificate,"[169] but invalidity is an uncommon defense.[170]

Suits are more apt to turn on infringement. Noninfringement can be framed several ways, e.g., a work was independently created,[171] or use was proper. The latter can be further subdivided, e.g., use was (1) not forbidden by § 106,[172] (2) permitted by § 102(b)[173] or (3) permitted by "fair use" as defined in §§ 107-121. The last two are most likely to cause trouble for newcomers.

Copyright registrations do not delimit coverage.[174] More than in the case of patents, judges often must decide whether what was copied was protected. They may conclude, e.g., that a directory identical to another does not infringe,[175] whereas a motion picture that is only substantially similar to an earlier play does.[176]

Originally created by the courts, fair use defenses now occupy perhaps about half of the statute.[179] Section 107 and sequels permit use of another's work where the purpose and amount of use pose little likelihood of injury or are justified on policy grounds.[180] Were it not for fair use, critics and scholars could not quote, or a fortiori copy, another's work without permission or the risk of paying costs, attorneys' fees and statutory damages.[181] Teachers and librarians were particularly eager to have fair uses spelled out precisely, but this was not done.[182] Indeed it seems impossible to define "fair" with the kind of precision nonlawyers (or law students) may want.

As with patents, copyright litigation can also be affected by the status of the infringer. Injunctions do not lie against the federal government, [183] and state governments may not be sued in federal court.[184] Prior dealings are troublesome -- partly because of the work for hire doctrine,[185] but problems go beyond that.[186]

When using another's work, caution is warranted -- particularly where there have been prior dealings.[188] Also, one can no longer regard a work without notice as being in the public domain.[189] Further, while "fair use" of another's work is permitted, a comparatively small amount of copying may infringe if it interferes with an owner's potential income or is more than incidentally connected with the user 's income.[190]

Contents

C. Trade Secrets
1. Source, subject matter and federal preemption

Trade secret protection originated in common law, and the 1939 Restatement of Torts attempted to codify it.[191] More recently there has been a trend toward statutory treatment. A uniform act has been drafted and adopted in whole or part in several states, and theft of trade secrets is now addressed in the federal criminal code.[192] While the basics are the same, important details vary from state to state.[193]

Also, federal law can have a major impact on trade secret law. For example, in the decade following the famous Sears and Compco preemption decisions,[194] IP attorneys wondered about the extent to which trade secret law still existed. However, a 1974 decision[195] held that, although subject matter often overlaps and legal objectives are similar, federal patent law does not preempt state trade secret protection.

Copyright preemption may pose a problem, too -- particularly with unpublished works[196]since 17 U.S.C. § 301 became effective.[197] Now, § 301(a), leaves no room for the states once a copyrightable work is "fixed in a tangible medium."[198] Moreover, § 301(b) provides:[199]

Nothing in this title annuls or limits any rights or remedies under the common law or statutes of any State with respect to -- (1) subject matter that does not come within the subject matter of copyright..., including works of authorship not fixed in any tangible medium of expression, or... (3) activities violating legal or equitable rights that are not equivalent to any of the exclusive rights within the general scope of copyright....

Still, both leave a large amount of ambiguity, e.g., where an employee changes jobs. How does one differentiate between information that is, on the one hand, part of an employee's stock in trade and, on the other, property of the employer?[203] Employers often try to avoid the issue by using covenants not to compete, but, if covenant conditions are unreasonable[204] or in excess of statutory maxima,[205] they will be unenforceable. Analogous problems can also arise when a business is sold or when two companies are dealing in other ways[206] -- particularly if the obligation to preserve or not to use secrets is implied. However, the Restatement and the uniform act do not appear to differ on such issues.

Also, both the Restatement and uniform act forbid use of secrets obtained by criminal or tortious conduct.[207] However, neither seems to preclude using information obtained from incautious speakers in PTO elevators. Still, the latter includes "espionage" as wrongful. If this covers photographing plants from navigable airspace,[208] does it also include photographing from the roof of an adjacent building or a knothole in a fence? Whatever the answers might be, Supreme Court decisions forbid state laws that preclude use of information obtained by independent effort or reverse engineering.[209]

Attorneys who have the opportunity to represent an outside submitter should try to get a written agreement. Minimally, it should provide that the recipient, in consideration of the opportunity to evaluate the information, agrees neither to use it without compensation (later to be negotiated) nor to disclose it. However, attempts often fail:[212] Companies do not want to risk having to pay for what they already know or to be liable if information gets into the wrong hands. Also, companies may already have many of unused, internally-generated ideas and not be interested in considering more![213]

Unlike patents and copyrights that have a constitutionally mandated terminus,[215] trade secrets have a potentially perpetual duration.[216] Yet, as noted in Kewanee, their theoretical duration is undercut by limitations on what constitutes misappropriation.[217]

Contents

[28] See, e.g., Northern Pac. Ry. v. U.S. , 356 U.S. 1 (1958). See also, Edmund W. Kitch, The Nature and Function of the Patent System, 20 J. L. & Econ. 265 (1977) wherein he likens patent claims to mining claims.

[29] See supra note 6.

[30] A thorough, if skeptical, review of their early history and rationale appears in Fritz Machlup, An Economic Review of the Patent System, Study No. 15 of the Senate Subcomm. on Patents, Trademarks and Copyrights of the Comm. on the Judiciary, 85th Cong., 2d Sess. (1958). In all, 28 such studies were commissioned. Besides Machlup, others of possible current interest include Study 1, Vannevar Bush, Proposals for Improving the Patent System (1956); Study 2, George Frost, The Patent System and the Modern Economy (1957) and Study 26, Victor Abramson, The Patent System: Its Economic and Social Basis (1960).

[31] In general, intellectual property rights do not permit owners to sell protected works. With regard to copyright for example, it should be clear that no one has a right to sell obscene works or works that infringe privacy rights, even if copyrighted.

[32] Section 271(a).

[33] Frost, supra note 30, at 76.

Compare Shapiro, supra note 1. At 148, he notes:

In a sense all property is monopoly. ... [M]y monopoly in chair A does not prevent others from making... chairs B, C, or D. If, however, I owned the idea of a chair, and others could not make... anything embodying that idea, the whole society would be left standing until I chose to sell... on my terms.

Consider a new cure for AIDS as an extreme example. What would induce its private development and testing without patents? If the concern is that a firm might offer it under only "unconscionable" terms, consider, e.g., that patentees cannot get injunctions against the federal government; see 28 U.S.C. § 1498. In this vein, see generally, Thomas G. Field, Jr., Pharmaceuticals and Intellectual Property: Meeting Needs Throughout the World, 31 Idea 3 (1990).

Moreover, patent enforcement may sometimes be counterproductive; see, e.g., James Lardner, Fast Forward... 68 (Mentor 1987).

[34] Jungersen v. Ostby & Barton Co., 335 U.S. 560, 572 (1949) (dissenting).

[35] See e.g., Abe Fortas, The Patent System in Distress, 53 J. Pat. Off. Soc'y 810 (1971). For a comprehensive review of the situation through about 1966, see Shapiro, supra note 1.

[36] Supra note 30.

[37] See, e.g., Carole Kitti, Patent Validity Studies: A Survey, 20 Idea 55 (1979). See also, David Lowin, The Presumption Of Validity... (FPLC 1979); Thomas G. Field, Jr. and Juanita V. Field, Post Hoc Evaluations..., 20 Idea 29 (1979).

[38] See, e.g., Dawson Chemical Co. v. Rohm and Haas Co., 448 U.S. 176 (1980).

[39] See generally, Industrial Innovation: Joint Hearings Before the Senate Comm. on Commerce, Science and Transportation, and Select Comm. on Small Business, and House Comms. on Science and Technology, and Small Business, 96th Cong., 1st Sess., Parts 1 and 2 (1979). The opening statements in Part 1 are of particular interest.

As part of a lively exchange, Frank Press stated: "For twenty-five years the question of innovation and Americans' ability to innovate has been... around; it's been studied to death;" id., at 40. Unfortunately, this suggests more than is true. Much data has been collected, but its meaning is difficult if not impossible to discern. See, e.g., Thomas G. Field, Jr., Comment, Perceptions of Chief Patent Counsel at Large Corporations of the Effects of Patent Term... on Firm R&D, 32 Idea 277 (1992).

[40] See 28 U.S.C. § 1295.

[41] The Court of Customs and Patent Appeals (CCPA) and the U.S. Court of Appeals for the District of Columbia. Their views of the law sometimes differed, and patentees no doubt took advantage of that.

[42] However, CCPA judges never saw infringement suits and the D.C. Circuit rarely, if ever, saw them. This could well have biased both courts in favor of patentees. See Shapiro, supra note 1, at 178 and 181-2.

[43] Id. Not until 1966 did the Supreme Court grant certiorari from the CCPA at the behest of the PTO; see Brenner v. Manson, 383 U.S. 519, 523. However, it did so much earlier from the D.C. Circuit; see Kingsland v. Dorsey, 338 U.S. 318; rehear. den. 338 U.S. 939 (1930).

[44] See supra notes 41 & 42.

[45] At least in the short term, whether this is true seems irrelevant. People have little choice except to act on what they believe is true. Indeed, it is possible that perceptions could, at any point in time, be totally out of phase with more objective assessments of the "value" of patents or other intellectual property -- or be skewed by incomplete data; see, e.g., Erica Bodwell, Published and Unpublished Federal Circuit Decisions..., 30 Idea 233 (1990). See also, Fred E. McKelvey, Appeals to The Federal Circuit from PTO, 1120 O.G. 22 (PTO1990) (offering full data for Oct. 1985 through Sept. 1990).

[46] Section 101.

[47] See, e.g., Diamond v. Chakrabarty, 447 U.S. 303 (1980) or Diamond v. Diehr, 450 U.S. 175 (1981).

[48] Section 171.

[49] See, e.g., In re Morton-Norwich Products, Inc., 671 F.2d 1332 (CCPA 1982).

[50] See, e.g., Sears, 376 U.S. 225, and Compco, 376 U.S. 234 (1964).

[51] Section 173.

[52] See generally, §§ 161-64. Plants may also be protected by the Plant Variety Protection Act, 7 U.S.C.A. §§ 2321-2583 (1988); this protection governs sexual propagation and falls within the jurisdiction of the Department of Agriculture.

[53] See, e.g., Chakrabarty, 447 U.S. at 306.

[54] See David Bernstein, Is a Plant Patent a Form of Copyright? 27 Idea 31(1986).

[55] Section 111.

[56] Section 154(a)(2).

[57] As discussed supra at note 14, only attorneys who have passed a special examination (or equivalent) are permitted to prosecute patent applications before the PTO. See also, e.g., Arnesen, 333 F.Supp. 116.

[58] See, e.g., cases cited supra note 47.

[59] See, e.g., Chakrabarty, 447 U.S. at 306. Actually, early "subject matter" cases seem to be far more concerned with, e.g., correspondence between the scope of disclosure and claims than with subject matter. See O'Reilly v. Morse, 56 U.S. 62 (1854); see also, the discussion of O'Reilly in Appln. of Zoltan Tarczy-Hornoch, 397 F.2d 856 (CCPA 1968).

[61] Patent attorneys distinguish several kinds of searches. A "prior art" or patentability search is used to determine whether an invention is sufficiently novel to warrant filing an application. At a minimum, such a search should include domestic patents and leading indices, e.g., Chem Abstracts. A "validity" search is similar, but it is conducted after a patent issues and is likely to be more intensive and to cover a wider scope of prior art, e.g., foreign patents and technical publications. An "infringement" search is conducted to determine whether a new product falls within the claims of current patents. The last need only go back for length of the patent term (see infra note 88) but may require considerable effort if a new product is particularly complex. Many firms in the Washington, D.C. area provide search services.

[62] Section 102, particularly subsection (a).

[63] Section 103.

[64] For example, failure to discuss advantages over the prior art may preclude later efforts to distinguish that art both within and without the PTO. See, e.g., Graham v. John Deere Co., 383 U.S. 1, 23 (1966).

[65] Sections 116-18. Even if an invention has been previously assigned as a condition of employment, the application must be filed in the inventor's name, not the assignee's; see § 118. With regard to joint inventors, see discussion infra note 92.

[66] Sections 111-15, 41.

[67] Section 112 ¶ 1; subsequent paragraphs indicate that multiple claims are permissible.

[68] See, e.g., § 111.

[69] Organized by a complex, constantly changing scheme published in the Manual of Classification.

[70] Sections 131-33.

[72] Section 112.

[73] Id.; see also, supra note 59.

[74] Sections 101-3. Of these, for qualifying subject matter, § 103 is usually most difficult; see, e.g., Carole Kitti, Patent Validity Studies: A Survey, 20 Idea 55 (1979). See also, Thomas G. Field, Jr., Law and Fact in Patent Litigation: Form vs. Function, 27 Idea 153 (1987).

[75] Part II.B.

[76] Section 102(b). Foreig n law is generally beyond the scope of this discussion; see generally, World Intellectual Property Organization, Background Reading Material on Intellectual Property 83 (1988).

[77] See § 120.

[78] Section 134.

[79] See, e.g., supra note 43.

[80] Sections 141-46. In situations not so governed, review may be had under the Administrative Procedure Act; 5 U.S.C. § 703 (1977), and CAFC jurisdiction is only arguably conferred under 28 U.S.C. § 1295. Although review was not under 5 U.S.C., see, e.g., Wyden v. Comm'r Patents & Trademarks, 807 F.2d 934, 937 (Fed. Cir. 1986) (Chief Judge Markey dissenting).

[81] Either in terms of the amount of technology covered or their market value. The last seems to be all that counts; see Seeking Cost-Effective Patents, supra note 26.

[82] Id.

[83] See Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 122 S. Ct. 1831 (2002).

[84] See generally, §§ 151-53; § 41(2) sets the issue fee. Also note that subsequent fees are necessary to maintain the patent in force; see § 41(b).

[85] Section 135.

[87] For design and utility patents, § 154; for plant patents, § 163.

[88] Since 1994, the term of plant and utility patents has been twenty years from the date of first filing, Uruguay Round Agreements Act, Pub.L. 103-465, § 532(a)(1). See §§ 154(a)(2) and 161 (§ 163 does not provide otherwise). Design patents have a fourteen year term, § 173. See also, § 154(b) (extensions of up to five years to compensate for delays caused by interferences and appeals) and, e.g., § 156 (limited extension for delay in pre-market approval of drugs and related products.

[89] Section 261.

[90] See, e.g., supra note 56. See also, Morehouse Mfg. v. Strickland, 407 F.2d 881 (CCPA 1969), quoted infra at note 301.

[91] See also, §§ 116-118

[92] For further discussion of employed inventors, see, e.g., Peter D. Rosenberg, 2 Patent Law Fundamentals § 11.04 (1989).

[93] Section 261.

[94] See generally, e.g., Jerrold G. Van Cise, William T. Lifland & Laurence T. Sorkin, Understanding The Antitrust Laws 162 (9th ed. 1986).

[95] Section 262. See also § 116.

[96] Such concerns eventually led to specific provisions permitting the government to grant exclusive rights in government inventions; see §§ 200-212 and, e.g., Lawrence Rudolph, Overview of Federal Technology Transfer, 5 Risk 133 (1994). See also, Ronald E. Barks, Accessing and Licensing Federal Technology, Licensing Law and Business Report, May-June 1992, at 76: "[F]or every $1 of research, a company spends $10 to develop the product and another $100 to take it to market."

[97] Section 294. See also, e.g., Thomas G. Field, Jr., Patent Arbitration..., 24 Idea 235 (1984); Thomas G. Field, Jr. & Michael Rose, Prospects for ADR in Patent Disputes: An Empirical Assessment of Attorneys Attitudes, 32 Idea 309 (1992); and Norman L. Balmer, Alternative Dispute Resolution in Patent Controversies, 6 Risk 145 (1995). Further, see § 135(d) (arbitration may be used to resolve interferences).

[98] See 28 U.S.C. §§ 1338(a), 1400, and 1498.

[99] Section 271(b) and (c). Regarding the latter, see Dawson, 448 U.S. 176. See also, §§ 271(f) and (g).

[100] See generally, §§ 281-88. Also, § 289 provides minimum statutory damages for design patent infringement.

[101] These are the first two enumerated patent defenses; see generally, § 282.

[102] Id., first sentence.

[103] See §§ 288 and 290. See also, Blonder-Tongue Laboratories v. Univ. Ill. Fndn., 402 U.S. 313 (1971).

[104] See, e.g., U.S. Congress, Office of Technology Assessment, Patents and the Commercialization of New Technology 170-4 (Draft June 21, 1982) and Brief Survey... Patent, Trademark, Copyright, supra note 3, at 89.

[105] See, e.g., Graham, 383 U.S. 1, or Sakraida v. Ag Pro, 425 U.S. 273 (1976). See also, Shapiro, supra note 1. While the CAFC may have more sympathy for such inventors than some circuits have heretofore shown (see, e.g., supra notes 41-43), it remains to be seen whether the Supreme Court will go along.

[106] There is even a possibility of invalidity based on another's earlier secret use of the invention. See, e.g., Dunlop Holding Ltd. v. Ram Golf Corp., 524 F.2d 33 (7th cir. 1975), cert. denied, 424 U.S. 958 (1976).

[107] See, e.g., Handgards v. Ethicon, 743 F.2d 1282 (9th Cir. 1984).

[109] Therefore, they may be motivated to investigate, e.g., foreign publications and other prior art that would invalidate the patent under § 102(a).

[110] See , e.g., Field (1985) supra note 3, at 90-92

[111] See, e.g., Brulotte v. Thys Co., 379 U.S. 29 (1964).

[112] See David Lowin, Whether Patented or Unpatented..., 23 Idea 77 (1982).

[113] See, e.g., Handgards, 743 F.2d 1282; see also 37 C.F.R. § 1.56 -- a provision with a long, checkered career.

[114] See 28 U.S.C. § 1498.

[115] See College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board, 527 U.S. 666 (1999), and Regents of University of California v. Genentech, Inc., 527 U.S. 1031 (1999) (patent suit vacated and remanded in light thereof).

[116] See, e.g., Lear, 506 U.S. 653.

[117] Supra note 61.

[118] See § 122.

[119] See, e.g., § 101 providing for improvement patents. These are likely to be narrower than so-called "pioneer" patents. If the earlier patents are still in effect, improvement patents cannot be practiced without infringing -- further illustrating the proposition that intellectual property only excludes others.

Many countries avoid such problems, e.g., by granting patents to the first to file and publishing pending applications; see generally World Intellectual Property Organization, supra note 76. The U.S. now publishes pending applications; see § 122..

[120] Citations in this subsection, unless otherwise indicated, are to 17 U.S.C.

[121] Supra note 6.

[122] See, e.g., William F. Patry, Latman's The Copyright Law 2-15 (6th ed. 1979) for a brief discussion of the early history of copyright law.

For an account of the early situation with foreign authors, see Lardner, supra note 33, at 120. This entertaining book describes the divergent economic interests of the motion picture and video recorder industries, and to a lesser extent Japan and the U.S., that led to Sony Corp. Am. v. Universal City Studios, Inc., 464 U.S. 417 (1984).

[123] A major thrust of the 1976 act was to move the U.S. toward joining the Berne international copyright convention. It does not permit formal requisites to protection. After joining, Congress passed "An act to... implement the Berne Convention...," P.L. 100-568, 102 Stat. 2853 (1988). One of the more significant substantive changes added architectural works to § 102(a). See also § 104(c) regarding possible implied changes.

[124] Supra note 6.

[125] Id.

[126] Baker v. Selden, 101 U.S. 99, 102.

Unfortunately such things were long regarded as inappropriate for a patents; see, e.g., Gordon R. Blakney, Jr., Systems of Business Patents, 30 Idea 355 (1990). But see State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998).

Notwithstanding Baker, tests of scholastic aptitude and other psychological characteristics seem to enjoy copyright protection; see, e.g., Educational Testing Services v. Katz, 793 F.2d 533 (3d Cir. 1986) and Applied Innovations, Inc. v. Regents of the U. of Minn., 876 F.2d 626 (8th Cir. 1989). Given that such tests lose their utility if the expression is changed, such protection would seem to run afoul of § 102(b).

[127] Bleistein v. Donaldson Lithographing, 188 U.S. 239, 249 (1903), but see, e.g., Gross v. Seligman, 212 F. 930 (2d Cir. 1914) or Dallas Cowboys Cheerleaders v. Scoreboard Posters, 600 F.2d 1184 (5th Cir. 1979) -- in neither of the latter cases was plaintiff's work copied.

[128] Bleistein, 188 U.S. at 251.

[129] Id., at 252.

[130] Mazer, 347 U.S. 201(1954); see also supra at note 8.

[131] Mazer, 347 U.S. at 215.

[132] Id., at 217.

[133] Id., at 217-18.

[134] See, e.g., Masquerade Novelty v. Unique Industries, Inc., 912 F.2d 663 (3d Cir. 1990) (masks shaped to resemble animal noses have no function other than that associated with their appearance). Contrast costumes that also serve, e.g., to preserve the modesty of the wearer as in Whimsicality, infra.

[135] See, e.g., Whimsicality, Inc. v. Rubie's Costume Co., Inc., 891 F.2d 452 (2d Cir. 1989) (where arguably uncopyrightable costumes were represented to be copyrightable soft sculpture, the court refused to reach the issue of copyrightability because the registration was obtained fraudulently).

[136] Also, one might consider that copyrights may last for a lifetime and beyond, whereas design patents last only fourteen years. However, this is likely to be insignificant where the problem is that design patents issue too slowly. Thus, makers of clothing, and at one time fabric designs, have been in a difficult situation and unable to resort to self help; see Fashion Originators' Guild v. Federal Trade Commission, 312 U.S. 457 (1941); see also, Cheney Bros. v Doris Silk Corp., 35 F.2d 279 (1929).

[137] Subject to the right, e.g., to photograph a building "ordinarily visible from a public place;" see § 120(a).

[138] At least until 1986, in the United Kingdom, such works were protected through the doctrine of "indirect copying," see British Leyland Motor Corp. Ltd. v. Armstrong Patents Co. Ltd., H.L.E. [1986] 2 W.L.R. 400 (Appeal taken from Court of Appeal).

[139] However, § 201(a) provides that authors of a joint work are co-owners of copyright without, as in the case of the patent statute, specifying their obligation to one another. Compare supra at note 95.

[140] Section 202. See also, e.g., Community for Creative Non-violence v. Reid, 490 U.S. 730 (1989).

[141] Section 101 "work made for hire."

[142] See, e.g., Community for Creative Non-violence, 490 U.S. 730. See also, Olan Mills, Inc. v. Eckerd, 1989 WL 90605 (N.D.Tex.) (pharmacy infringed by reproducing portraits at the behest of the subjects, notwithstanding suggestion that the latter could authorize reproduction, e.g., as joint authors).

[143] Section 101 "work made for hire" (2).

[144] Section 302. A helpful online page maps out most of the options.

[145] Section 203(a)(3).

[146] Section 203(a) ("In the case of any work other than a work made for hire...").

[147] Sections 204 and 205.

[148] Section 301(a).

[149] Section 407(d).

[150] Sections 401 and 405.

[151] See, e.g., Patry, supra note 122, at 307 -- discussing inter-American protection under the 1911 Buenos Aires Convention.

[152] See also, § 405(b).

[153] Section 411. See also,  7; 101 "country of origin." But see, Pacific and Southern Co. v. Duncan, 744 F.2d 1490, 1499, fn. 17 (11th Cir. 1984) (enjoining infringing works not yet created, much less registered).

[154] The fee is $30 per registration; see § 708(a)(1). For what constitutes a single work, see 37 C.F.R. § 202.3(b); see also, § 202.20 (1989).

[155] Section 412. Regarding promptness of registration, see also, § 410(c).

[156] Section 410(a), but, under § 410(d), the certificate dates back to that of the completed application.

[157] See, e.g., Esquire v. Ringer, 591 F.2d 796 (D.C. Cir. 1978).

[158] See, e.g., Alfred Bell & Co. v. Catalda Fine Arts, Inc., 191 F.2d 99 (2d Cir. 1951).

[159] Id.; see also, supra note 127.

[160] See, e.g., Alfred Bell, 191 F.2d 99. But see, e.g., § 115(b), providing a limitation (difficult to fathom) on the rights of those who prepare derivatives of nondramatic musical works.

[161] See § 101 "perform or display..."; see also, e.g., § 109(c).

[162] See, e.g., Sony, 464 U.S. 417 (1984). One of the most remarkable things about the case is that the Court cited and discussed 35 U.S.C. § 271(c) (the patent statute) in deciding whether contributory infringement had occurred. This was found warranted insofar as the doctrine was originally created by the courts, and no provisions appear in the copyright statute.

[163] See 28 U.S.C § 1338.

[164] Supra note 155.

[165] See generally, §§ 501-10.

[166] Section 506.

[167] However, at least two Circuits have refused that defense as an attack on copyright validity. See, e.g., Belcher v. Tarbox, 486 F.2d 1087, 1088 (9th Cir. 1973) and Mitchell Bros. Film Group v. Cinema Adult Theater 604 F.2d 852 (5th Cir. 1979).

Regarding possible antitrust problems, see, e.g., Broadcast Music, Inc. v. Columbia Broadcasting System, Inc. 441 U.S. 1 (1979). See also, § 109(b)(2).

[168] But see, Whimsicality, 891 F.2d 452, discussed supra note 134.

[169] Section 410(c).

[170] But see, Morrissey v. Procter & Gamble Co., 379 F.2d 675 (lst Cir. 1967).

[171] If a work is very similar to an earlier distributed work, access as well as copying may be presumed. See, e.g., ABKCO Music v. Harrisongs Music, 722 F.2d 988 (2d Cir. 1983). But see, Benson v. Coca-Cola Co., 795 F.2d 973 (11th Cir. 1986).

[172] See, e.g., Muller v. Triborough Bridge Authority, 43 F.Supp. 298 (S.D.N.Y. 1942) (finding a bridge not to infringe a drawing of a bridge). In the U.S., three dimensional works infringe only if they are also copyrightable (not "useful"). Compare, e.g., Fleischer Studios v. Freundlich, 73 F.2d 276, 278 (2d Cir. 1934) and see supra note 138.

[173] See, e.g., Baker, 101 U.S. 99, discussed supra note 126.

[174] See, e.g., Ideal Toy Corp. v. Sayco Doll Corp., 302 F.2d 623 (2d Cir. 1962); at 627, Judge Clark (dissenting) called attention to a third doll, apparently in the public domain, that more resembled an allegedly infringing doll than did the doll said to be infringed. Patent examination attempts to preclude such a result, e.g., by forbidding claims that cover subject matter that can be freely used by anyone.

[175] Feist Publications, Inc. v. Rural Telephone Service Co., Inc., 499 U.S. 340 (1991).

[176] Sheldon v. Metro-Goldwyn Pictures Corp., 81 F.2d 49 (2d Cir. 1936), cert. denied, 298 U.S. 669 (1936).

[179] Sections 107-121. Some focus on works, e.g., § 120 (architecture), some on users, e.g., § 108 (libraries and archives) and some on activities, e.g., § 106 (transfers of particular copies) or § 121 (translations for the blind).

[180] And perhaps when the defendant's conduct is otherwise reasonable; see, e.g., Marcus v. Rowley, 695 F.2d 1171 (9th Cir. 1983) (failure to attribute cited as a reason to deny the fair use defense).

[181] Supra notes 127-129 and discussion.

[182] It is not easy to find, much less interpret, applicable provisions. The Copyright Office has made the task somewhat easier. See Copyright Office Circular 21: Reproduction of Copyrighted Works by Educators and Librarians (1991); this document contains statutory provisions and legislative history as well as "guidelines" that were negotiated during pendency of the Act. The latter cover, e.g., teachers' use of books and periodicals.

[183] See 28 U.S.C. 1498.

[184] See supra note 115.

[185] See supra at notes 139-42.

[186] See supra at note 127. See also, Whelan Associates, Inc. v. Jaslow Dental Laboratory, Inc. 797 F.2d 1222 (3d Cir. 1986), but see Landsberg v. Scrabble Crossword Game Players, Inc., 736 F.2d 485 (9th Cir. 1984).

[187] ABKCO Music, 722 F.2d 983.

[188] See, e.g., Community for Creative Non-violence v. Reid, 490 U.S. 730 (1989).

[189] See, e.g., supra at notes 148-50.

[190] See, e.g., Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (1985).

[191] See §§ 757-59. See also, Restatement Third, Unfair Competition §§ 30-45 (1995).

[192] See William E. Hilton, What Sort of Improper Conduct Constitutes Misappropriation of a Trade Secret, 30 Idea 287, at 297 [Appendix A] (1990) (regarding state statutes). The federal statute is codified at 18 U.S.C. §§ 1831-39.

[193] See, e.g., Steve Borgman, The Adoption of the Uniform Trade Secrets Act: How Uniform is Uniform? 27 Idea 73 (1986).

[194] 376 U.S. 225 and 234, respectively.

[195] Kewanee, 416 U.S. 470.

[196] To conflict, subject matter must be susceptible of secret commercial use. This is unlikely for most copyright subject matter. With regard to software, where dual protection may be possible, the Copyright Office has muddied the water; see, e.g., Thomas F. Marsteller, Jr. & Robert L. Tucker, Copyrighting Trade Secrets..., 25 Idea 211, 218-22 (1984) -- especially the discussion of 37 C.F.R. § 202.20, at 219-20.

[197] Compare Field (1975), supra note 3, at 531 and 537 (prior to the 1976 Act).

[198] Section 301(a); this means that state law is likely to be important only for works that are publicly performed (probably excluding trade secrets) but not recorded. See, e.g., Zacchini v. Scripps-Howard Broadcasting Co., 433 U.S. 562 (1977). Insofar as that subject matter arguably falls within copyright, it seems that, had Zacchini been inclined to ratify the unauthorized fixing of his performance, the case could have been brought under federal law. See, e.g., Pacific and Southern Co., 744 F.2d 1490.

[199] This provision was heavily influenced by International News Service v. Associated Press, 248 U.S. 215 (1918). See, e.g., 122 Cong. Rec. § 2042-43 (Feb. 19 1976) [letter from the Department of Justice] and H. 10910 (Sept. 22, 1976) [statement. of Rep. Seiberling]. Citing Sears, 376 U.S. 225 and Compco, 376 U.S. 234, the Department urged that what is now 17 U.S.C. § 301(b)(3) be worded to avoid reinstating the "misappropriation" doctrine as defined by International News Service. The section reads as suggested.

[200] See supra at note 155.

[201] See Goldstein v. California, 412 U.S. 546, 560 (1973) (the Constitutional "limited times" language does not affect state power). See also, e.g., Estate of Elvis Presley v. Russen, 513 F.Supp. 1339 (D. N.J. 1981) (describing a type of work that is not secret and, as long as it is neither fixed nor regarded as within copyrightable subject matter, could have virtually perpetual protection.

[202] In this and other regards the uniform act apparently tries to codify the holdings in E.I. duPont de Nemours & Co. v. Christopher, 431 F.2d 1012 (5th Cir. 1970), cert. denied, 400 U.S. 1024 (1971).

[203] An especially interesting factual and procedural situation appears in American Can Co. v. Mansukhani, 742 F.2d 314 (7th Cir. 1984); see, e.g., at 329.

[204] See, e.g., Reed, Roberts Assoc. v. Strauman, 40 N.Y.2d 303, 307 (1976).

[205] See, e.g., NCH Corp. v. Broyles, 749 F.2d 247, 251, fn. 5 (5th Cir. 1985).

[206] E.g., Kewanee, 416 U.S. 470.

[207] Trade secret law often emphasizes how information is obtained rather than the information itself; see, e.g., Tabor v. Hoffman, 118 N.Y. 30 (1889). See also Kewanee, 416 U.S. 470. But see Smith v. Dravo Corp. 203 F.2d 369, 374 (7th Cir. 1953) (finding "Pennsylvania will not deny recovery merely because the design could have been obtained through inspection") with Van Products Co. v. General Welding & Fabricating Co., 419 Pa. 248 (1965) (holding to the contrary).

[208] See duPont, 431 F.2d 1012.

[209] Bonito Boats v. Thunder Craft Boats, 489 U.S. 141 (1989). But see 17 U.S.C. §§ 1301-32 (federal sui generis protection for boat hulls).

[210] See, e.g., Downey v. General Foods, 31 N.Y.2d 56 (1972). Compare Liggett & Myer Tobacco Co. v. Meyer, 194 N.E. 206 (1936), where the idea was arguably more novel.

[211] See, e.g., Minnear v. Tors, 266 Cal.App.2d 495, (1968) (regarding an idea for a television series -- something excluded from copyright by § 102(b)). But compare, Murray v. National Broadcasting Co., 844 F.2d 988 (2d Cir. 1988) (refusing to compensate, for lack of novelty, a professional who allegedly suggested the idea for The Cosby Show).

[212] Indeed, companies are more likely to advance their own agreement disavowing any liability; see, e.g., Burten v. Milton Bradley, 763 F.2d 461 (lst Cir. 1985) (company ultimately liable, partly based on evidence of subsequent modification).

[213] See generally, Del I. Hawkins & Gerald G. Udel l, Corporate Caution and Unsolicited New Product Ideas, 58 J.P.O. Soc'y 375 (1976). See also, supra note 3.

[214] See generally, Hilton, supra note 192.

[215] Supra note 6.

[216] Goldstein, 412 U.S. at 560.

[217] 416 U.S. at 489-91.

[218] See, e.g., Harvey S. Perlman, Interference with Contract and Other Economic Expectancies..., 49 U. Chi. L.Rev. 61(1982). See also, e.g., Universal City Studios, Inc. v. Nintendo Co. Ltd., 797 F.2d 70, 74 (9th Cir. 1986).

Contents

IV. Preserving Competition on the Merits

A. Preventing Misrepresentations Generally
1. Suits forbidden at common law

As mentioned, competition can be thwarted when firms misrepresent the source, quality or price of their goods or services. At common law, private parties could take legal action against such misrepresentation only if they were uniquely affected.[219] Unlike competitors, consumers can usually show specific injury, and aggregate injury can be very large, but damage suffered by individual consumers is often inadequate to justify suit.[220]

Moreover, if firms continue to misrepresent, aggregate injury may snowball as others compete, not by, e.g., dropping prices, but by making even more egregious misrepresentations. Such problems could first be addressed other than by consumers when the Federal Trade Commission (FTC) was created to enjoin "unfair methods of competition."[221] However, only after an amendment in 1938, could the FTC clearly enjoin "unfair and deceptive acts and practices" that did not injure competition.[222] Not until much later did states begin to deal with such problems.[223]

Honest firms may find the cost of suit against a competitor's misrepresentations to be justified, but not until the Lanham Act was passed in 1947, did they have a cause of action.[224] Since then, § 43(a)[225] has allowed them to seek injunctions[226] even though it may be impossible to show special damages,[227] i.e., that particular sales were lost because of a competitor's misrepresentations. Modern cases sometimes consider whether defendant's activities sufficiently affect the plaintiff in particular, e.g., to warrant standing, but it is difficult to see why a commercial enterprise would sue without strong conviction of potential harm -- particularly if competitors could derive as much or more benefit.[228] Indeed, in the latter situation, firms might ask the FTC or another public entity to take action.

Famous marks present a particularly interesting situation insofar as owners may prevent their use on very dissimilar goods or services -- where "unfair competition" does not literally exist.[234] Yet, consumers may be misled in the short term, and both consumers and owners of famous marks may suffer from erosion of a mark's uniqueness.[235] Recently, state and federal "dilution" statutes have sought to expand this law by protecting less well-known marks.[236] Still, it is unclear how unique a mark must be to qualify for protection. It is less clear if marks differ.[237]

Famous persons can also prevent firms from suggesting associations that do not exist. A variety of theories may be used,[238] and "right of publicity" is one of them.[239] This right is sometimes described as what public persons get in return for their loss of privacy, but its boundaries are far from clear. While privacy rights do not survive their owner's death, a right of publicity may -- particularly if the person had been engaged in commercial sponsorship while living.[240] However, some publicity cases go well beyond preventing misrepresentation and raise preemption issues where the work to be protected has been fixed, e.g., by videorecording, by or under the authority of its owner.[241]

Injurious statements about a firm (trade libel) or its products (disparagement), may cause demonstrable harm and might be presumed. Yet, injunctions may be unavailable and damages difficult to recover. The law is a mix of sometimes arcane common law and, increasingly, unsettled constitutional law and is not easy to understand.

One should first distinguish commercial and non-commercial speech. The latter is not subject to prior restraint, i.e., injunction.[242] Also, because the threat of tort liability can deter speech, it is often difficult to recover damages -- particularly if the subject is of public concern.[243] Offers to sell were long regarded as unprotected, but public interference with truthful advertising has since been limited. Cases apt to be most durable focus on the need for readily available consumer information.[244] Also, the FTC has moved against private restraints on competitive advertising.[245]

Because of such developments, early cases enjoining, e.g., consumer libel and disparagement are of doubtful current vitality[246] -- as are cases enjoining other disparaging activity.[247] Even cases awarding damages merit careful scrutiny.[248]

Speech involving matters of public concern is protected two ways. First, plaintiff may have to show, by clear and convincing evidence, that defendant's offensive statements are false. Second, plaintiff may have to show, again by clear and convincing evidence, that demonstrably false injurious statements were known by defendant to be false or that defendant acted maliciously or in reckless disregard of the truth.

For a public person to get relief, a clear showing of malice or reckless disregard of the truth must be made, and, although there is remarkably little law on point, it seems difficult to imagine why a commercial firm or its goods would not also bear that burden.[249] Even when the speaker is a competitor, the burden ought not be lowered, e.g., by presuming malice.[250]

In 1988, § 43(a) of the Lanham Act was amended to permit such suits as a matter of federal law if the speaker is engaged in commercial advertising or promotion.[251] It will be interesting to see how federal courts develop the law, e.g., whether they do so based on the Constitutional or tort doctrine,[252] and the extent to which they find that firms and their products are subject to honest, if mistaken, criticism by competitors who have an especially strong incentive to inform consumers.

In all cases involving alleged misrepresentations, consumers' impressions are critical. Facially false statements (or facially deceptive marks) may not deceive[257] -- and facially truthful statements may create false impressions[258] Competent surveys are often the best way to resolve those and similar issues addressed below.

Contents

B. Trademarks[259]

Source indicators appear to have been used for thousands of years.[260] However, general legal protection against another's use of misleading source indicators is more recent.[261] The first federal trademark statute was passed in 1870, but it was struck down in 1879[262] for exercising power conferred by neither the patent and copyright nor commerce clauses.[263] Although another trademark statute was enacted in 1881, and still others in 1905 and 1920, these were quite limited,[264]. Still, many cases prior to the famous 1938 Erie decision were decided under federal common law.[265] For example, in Kellogg, decided shortly thereafter, the Court observed:[266] "But no claim has been made that the local law is any different from the general law on the subject, and both parties have relied almost entirely on federal precedents." Efforts to reform the federal law had begun earlier, but it is ironic that the first hearings on a new law were held the same year.[267] Because attention was diverted by the war, what ultimately became the Lanham Act was not passed until 1946.[268] With few amendments, that is the law today.

In Lanham Act § 45, "commerce" is defined as "all commerce which may lawfully be regulated by Congress."[269] Given the modern view of the commerce clause, federal law could well have exhausted the field. However, this has not happened, and state law can be significant.[270]

Notwithstanding these limitations, trademarks are sometimes seen as anticompetitive. Brand names for pharmaceuticals in particular have been controversial, but it would be difficult to eliminate them.[273] Critics tend to ignore the need of consumers to search out low cost, reliable products as well as the role of source identifiers in furthering that end. Antitrust law rests in part on the idea that competition encourages firms to produce the highest quality products or services at the lowest possible price. Before this can occur, assuming that other firms have a right to copy a particular product or service, consumers need accurate information about the source and other characteristics of products.[274]

Particularly for products without close consumer safety regulation, firms' investments in goodwill may also provide the most reliable assurance of safe product design and quality.[275] It is difficult to imagine how a competitive market could function without source indicators -- even so-called "generics" may have them!

The second requirement is most easily met if distinctive marks are chosen. If not, enforcement can be difficult to impossible.[279] For example,[280] marks that merely identify goods or services, e.g., "Two-hour Dry Cleaning," or are associated with other firms should be avoided. Again, one cannot get exclusive rights to common names for products or to functional aspects of trade dress.[281] Also, one cannot acquire rights in marks similar to those already in use.[282]

Words that describe a product or service can acquire source significance. Yet, they cannot be readily registered,[283] and relief will be limited.[284] If they merely identify a seller by surname, it will be difficult, at best, to limit others with the same name.[285] If they indicate geographical origin, it will be difficult to stop others in the same location. Finally, one cannot prevent firms from using words needed to describe products. Thus, even if users of such terms eventually convince consumers that they indicate a particular company, relief will be limited.

Marks that suggest, without describing, some favorable characteristic of a product are better. Thus, "Whopper" or "Ultra-bright" can be strong marks, given that competitor will be hard pressed to give an acceptable reason for using them in naming or describing their products.

Words that misdescribe a product can be either very good or very poor. A term that leads consumers to expect something other than what they get is unlikely to be protected and, worse, is useless for building goodwill. In contrast, "Rabbit" brand automobiles or "Apple" brand computers are unlikely to confuse anyone and may even suggest a favorable product characteristic. Nevertheless, others can, of course, use such words for their ordinary meaning.[286]

The strongest marks are coined words such as "Kodak" or wholly arbitrary product or package designs.[287] Yet, truly new products or services for which no common names exist are a special case. In such an instance, one cannot stop with a coined word such as "Xerox". A generic name must be chosen to identify the product, e.g., "photocopier".[288] Also, firms must take care to ensure that consumers are aware of and can distinguish them.[289] This can be difficult for market leaders, but failure means loss of trademark. When the patent on shredded wheat eventually expired, consumers had no other name by which to seek the product. Thus, a competitor was permitted to use it.[290]

Once a mark is chosen, protection is acquired in new geographical and product (or service) markets as in initial markets -- unless another with pre-existing rights is encountered.[291] Also, rights can extend beyond markets actually served.[292] For example, if a firm sells both granola and shredded wheat under a mark, consumers may assume that cornflakes with that mark have the same source. Further, when a firm is known by a name that it does not formally use, other firms may be prevented from using it.[293] In short, a firm's rights extend to any use of the same or a similar mark in circumstances where source (or sponsorship) confusion can occur.

Federal registration is the primary focus of of the Lanham Act. It provides for two PTO[295] registers. Principal registration is far more valuable and will be the focus here.[296]

Federal, in stark contrast with state, law affords the opportunity to protect marks nationally -- even though they are used in a smaller area.[297] Also, marks that qualify will be presumptively valid[298] and may become "incontestable" after five years,[299] i.e., subject to very limited challenge.[300]

Still it is worth keeping in mind that:[301]

Every right a patentee has is given to him by the Patent Office. On the other hand, the acquisition of the right to exclude others from the use of a trademark results from the fact of use and the common law, independently of registration in the Patent Office. The happenstance that trademarks are registered in the Patent Office should not result in confusing the principles involved in dissimilar proceedings with respect to wholly dissimilar rights. It is in the public interest to maintain registrations of technically good trademarks on the register so long as they are still in use. The register then reflects commercial reality... trademark rights, unlike patent rights, continue notwithstanding cancellation of those additional rights which the Patent Office is empowered by statute to grant.

For purposes of registration, marks are subdivided into several categories:[306] (1) trademarks, (2) service marks, (3) collective marks and (4) certification marks.[307] Although these categories are not legally important, respective examples are: (1) "Bandaid" or "Kool-Aid," (2) "H & R Block" or "The Educational Testing Service," (3) "The Dairymen's Association" and (4) "Underwriter's Laboratories" or "The Good Housekeeping Seal of Approval." There is also a classification scheme for goods and services, but it is insignificant within the U.S. except for purposes of registration.[308]

Echoing points made earlier, the mark itself must be capable of distinguishing a product or service and cannot, e.g.: (1) comprise, e.g., immoral, scandalous or deceptive matter; (2) be confusingly similar to marks of others; (3) be descriptive or deceptively misdescriptive; or (4) consist of a surname.[309] The last two prohibitions may be overcome if an applicant shows five years exclusive use or, better yet, demonstrates that the mark has acquired distinctiveness (or "secondary" meaning).[310]

If an applicant survives initial examination, the mark is published for opposition. If it does not get into a contest with another applicant, registrant or user,[311] and use has occurred,[312] a certificate of registration issues. It is "prima facie evidence of the validity of the registration... and registrant's exclusive right to use [it]."[313] Registrations, subject to filing a certificate of continuing use in the fifth year, [314] last 10 years.[315]

While IP licenses may often be no more than a promise not to sue, they cannot be so regarded in the trademark area. Failing to police licensees' use of marks is likely to work a fraud on the public and could be the basis for denying relief. However, trademark law is much stricter: Failure to police the use of one's marks may forfeit rights in them even without consumer harm.[320] The result may be less harsh if independent parties cross-license to settle an infringement dispute, but, even there, disputants should consider the broad implications of their agreement. For example, both marks will be weaker, and it will be easier for third parties to adopt more similar marks for more similar goods than would otherwise be possible.[321]

Remedies available for trademark infringement include (1) injunctive relief, (2) damages, (3) profits, (4) costs and attorneys' fees, and (5) seizure and destruction of infringing articles.[326]

As before, defenses include invalidity, noninfringement and general defenses such as unclean hands.[327] A defendant can assert general invalidity, i.e., that the mark has been abandoned[328] or has become the common name for goods or services in question.[329] Also, a defendant can assert invalidity in a particular market, e.g., by virtue of prior use.[330]

Noninfringement can be established, e.g., by rebutting the plaintiff's showing of likelihood of confusion. Probably the best way to show, e.g., whether the use of similar marks on camera equipment from different sources or the same mark on both cameras and radios is likely to confuse is to survey purchasers of such equip