An Outline of Intellectual Property Law

Yin Huang
May 13, 2010

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Contents
1 Patents 3
1.1 Diamond v. Chakrabarty . . . . . . . . . . . . . . . . . . . . . 3
1.2 Parke-Davis & Co. v. H. K. Mulford & Co. . . . . . . . . . . . 4
1.3 State Street Bank & Trust Co. v. Signature Financial Group,
Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.4 In re Bilski . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2 Copyright 7
2.1 Feist Publications v. Rural Telephone Service . . . . . . . . . 7
2.2 Baker v. Selden . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Morrissey v. Proctor & Gamble . . . . . . . . . . . . . . . . . 9
2.4 CCC Information Services v. Maclean Hunter Market Reports,
Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.5 Assessment Technologies of Wisconsin, LLC v. WIREdata, Inc. 11
2.6 Sparaco v. Lawler, Matusky & Skelly Engineers LLP . . . . . 12

3 Trademark and Trade Dress 13

3.1 Qualitex Co. v. Jacobson Products Co., Inc. . . . . . . . . . . 13
3.2 Zatarain’s, Inc. v. Oak Grove Smokehouse, Inc. . . . . . . . . 14
3.3 Two Pesos, Inc. v. Taco Cabana, Inc. . . . . . . . . . . . . . . 16
3.4 Kohler Co. v. Moen Inc. . . . . . . . . . . . . . . . . . . . . . 17
3.5 In re General Electric Broadcasting Company, Inc. . . . . . . . 18
3.6 In re Clarke . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

4 The Right of Publicity 19

4.1 Midler v. Ford Motor Co. . . . . . . . . . . . . . . . . . . . . 19
4.2 White v. Samsung Electronics America, Inc. . . . . . . . . . . 20
4.3 Wendt I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.4 Wendt II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

5 Term Limits 23
5.1 Eldred v. Ashcroft . . . . . . . . . . . . . . . . . . . . . . . . 23

6 Fair Use 25
6.1 Harper & Row, Publishers, Inc., v. Nation Enterprises . . . . . 25
6.2 Sony Corp. of America v. Universal City Studios, Inc. . . . . . 27
6.3 Campbell v. Acuff-Rose Music, Inc. . . . . . . . . . . . . . . . 28

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 6.4 UMG Recordings, Inc. v. MP3.com, Inc. . . . . . . . . . . . . 29
6.5 Anderson v. Stallone . . . . . . . . . . . . . . . . . . . . . . . 30

7 Remedies 31
7.1 eBay, Inc. v. MercExchange, LLC . . . . . . . . . . . . . . . . 31
7.2 Sony Corp. of America v. Universal City Studios, Inc. (cont’d) 33
7.3 MGM Studios Inc. v. Grokster, Ltd. . . . . . . . . . . . . . . . 34
7.4 Dickinson v. Zurko . . . . . . . . . . . . . . . . . . . . . . . . 35
7.5 Harrods Ltd. v. Sixty Internet Domain Names . . . . . . . . . 37
7.6 RealNetworks, Inc. v. Streambox, Inc. . . . . . . . . . . . . . . 37
7.7 Universal City Studios, Inc. v. Reimerdes . . . . . . . . . . . . 39

1 Patents
1.1 Diamond v. Chakrabarty
1.1.1 Overview
Chakrabarty appeals the denial of a patent for a man-made microorganism.

1.1.2 Facts
Chakrabarty had developed a new kind of bacterium, which could metabolize
hydrocarbons. This metabolism was accomplished through two biochemical
pathways hitherto unknown in nature. Because such a feature might well
prove useful in the treatment of oil spills, Chakrabarty applied for a patent.
In addition to patents on the process for producing the bacteria and the
inoculum on which it could be grown, he also applied for a patent on the
bacteria themselves. The first two patents were granted, but the third was
denied.

1.1.3 Issue
Are bacteria with entirely man-made biochemical pathways patent-eligible?

1.1.4 Holding
Such bacteria are patent-eligible.

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1.1.5 Reasoning
The standards for granting patents have historically been interpreted broadly,
so that a wide range of inventions may qualify as “manufactures” or “compo-
sitions of matter” within the definition of the Patent Act. Here, Chakrabarty
has created bacteria with features not existing in nature. This is different
from the case in which a scientist discovers an existing phenomenon, such as
the discovery that two types of bacteria can coexist without interference. Di-
amond has argued that the Plant Patent Act and related statutes bar patents
on living things. This argument is without merit because even those statutes
recognized the distinction between naturally occurring things and artificial
things. Diamond’s fears of the consequences of unrestrained research are also
unjustified. Even if research might produce dangerous knowledge, the courts
are powerless to regulate the progress of science.

Justice Brennan, dissenting. The majority has misread the relevant

statutes. The Plant Act and related statutes should be read to prohibit the
patenting of living things.

1.2 Parke-Davis & Co. v. H. K. Mulford & Co.

1.2.1 Overview
Parke-Davis & Co. (P) sued on the theory that H. K. Mulford & Co. (D)
had infringed on its patent for adrenaline extracted from animal glands.

1.2.2 Facts
Parke-Davis & Co. (“Parke-Davis”) had developed a new way to isolate
adrenaline from the glands of animals. This new isolate was considerably
purer than those that had been available and therefore medically superior.
Parke-Davis was granted a patent for any substance which possess the phys-
iological characteristics of the isolate. Parke-Davis now sues on the theory
that a similar product made by H. K. Mulford & Co. (“Mulford”) infringes
on that patent.

1.2.3 Issue
May Parke-Davis patent its form of isolated adrenaline?

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1.2.4 Holding
Parke-Davis may patent its form of isolated adrenaline.

1.2.5 Reasoning
The isolate produced by Parke-Davis is qualitatively different from older
isolates. Although one might regard Parke-Davis’s product as merely a better
purification, its isolate differs from previous ones in that Parke-Davis has
managed to remove salts and other unwanted components from the crude
animal glands. The line between new substances and different purities of
existing substances should be drawn on the basis of common usage rather
than technical distinctions.

1.3 State Street Bank & Trust Co. v. Signature Finan-

cial Group, Inc.
1.3.1 Overview
A dispute arose as to whether Signature could patent a business method tied
to a particular machine.

1.3.2 Facts
Signature had developed a system for managing the portfolios of institutional
investors. The system, known as “Hub and Spoke,” allowed institutions to
pool their resources to facilitate management of funds. When Signature tried
to patent the system, the Patent and Trademark Office (PTO) denied the
patent.

1.3.3 Issue
Was the PTO correct in denying the patent?

1.3.4 Holding
The PTO was not correct in denying the patent.

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1.3.5 Reasoning
Insofar as the process described in the patent application is tied to a partic-
ular machine, the process should not be automatically invalidated for falling
under the “mathematical algorithm exception” or the “business method ex-
ception” of patent law.

1.4 In re Bilski
1.4.1 Overview
Bilski appealed the denial of a patent for a business method.

1.4.2 Facts
Bilski had developed a method for hedging risk in the market for commodi-
ties. The method essentially created a middleman between buyers and sellers.
The middleman’s role was to offer commodities to buyers and sellers at fixed
prices, there by insulating those parties from price fluctuations. The Patent
and Trademark Office denied a patent for the method.

1.4.3 Issue
Did the PTO correctly deny the patent?

1.4.4 Holding
The PTO correctly denied the patent.

1.4.5 Reasoning
A claimed process is eligible for a patent only if it (1) is tied to a particular
machine or apparatus or (2) transforms an article into a different state or
thing. Bilski has failed to structure his claim as to fall under either category.
Bilski claims nothing more than a method of hedging risk. The method does
not form some part of a larger concrete process.

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2 Copyright
2.1 Feist Publications v. Rural Telephone Service
2.1.1 Overview
Rural Telephone Service (P) sued for copyright infringement after Feist Pub-
lications (D) copied some of the listings from its telephone directory.

2.1.2 Facts
Rural Telephone Service (“Rural”) had published an annual telephone di-
rectory in compliance with state law. Feist Publications (“Feist”) was a
publisher of a regional telephone directory, which covered a much larger
geographic area than directories like those published by Rural. Feist had
already obtained licenses to use listings from the directories in much of the
area it intended to cover. Rural remained the sole holdout. Unable to nego-
tiate a license, Feist copied the listings it needed without Rural’s permission.
After Rural’s investigation revealed that Feist’s directory contained several
fictitious listings that Rural had inserted to detect copying, Rural sued for
copyright infringement.

2.1.3 Issue
Does Rural hold a copyright over the listings in its telephone directory?

2.1.4 Holding
Rural does not hold a copyright over such listings.

2.1.5 Reasoning
A basic principle of copyright law is that facts are not copyrightable while
compilations of facts are. The distinction rests on the presence of originality.
Originality exists when independent creation is coupled with a modicum
of creativity. This hurdle is low, but it does exist. Facts themselves are
not copyrightable because they were not created by any particular person.
Compilations of facts are copyrightable only to the extent that the producer
of the compilation exercised some creativity in assembling the facts. Here,
Rural’s listings are so uncreative as to fall below even the low standard of

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originality. Rural’s argument that it exercised creativity in selecting the
information to be listed fails because such information is required by state
law. Rural also cannot argue that alphabetization of the listings constitutes
creativity, as alphabetization is so common and standard as to leave no room
for discretion.

2.2 Baker v. Selden

2.2.1 Overview
Selden (P) sued after Baker (D) used a system of bookkeeping that had been
set out in a book whose copyright was held by Selden.

2.2.2 Facts
Selden had acquired the copyright to a book that described a system of
bookkeeping. The system amounted to a common method of bookkeeping
modified so as to take up less space. Selden subsequently discovered that
Baker was using a system substantially similar to the one set out in his book
and sued on the theory that Baker’s system infringed on his copyright.

2.2.3 Issue
May a system of bookkeeping be protected solely through the copyright to a
book describing that system?

2.2.4 Holding
A system of bookkeeping may not be so protected.

2.2.5 Reasoning
Selden has confused the domain of copyright with that of patent. Copyright
can protect only particular expressions of ideas, not the ideas themselves. It
would have been proper for Selden to sue if someone had copied his book,
but he has no recourse against someone who has merely used the idea the
book describes. If Selden wants to protect his system of bookkeeping from
use by others, the only way to do so is by obtaining a patent.

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2.3 Morrissey v. Proctor & Gamble
2.3.1 Overview
Morrissey (P) sued after Proctor & Gamble (D) copied the instructions for
a sweepstakes organized by Morrissey.

2.3.2 Facts
Morrissey had organized a sweepstakes, providing instructions on how en-
trants should enter. The instructions stated that entrants should provide
their social security numbers, phone numbers, and other basic information.
Proctor & Gamble (“P & G”) held a sweepstakes and used similar instruc-
tions. Morrisssey then sued P & G for copyright infringement.

2.3.3 Issue
May the instructions for a sweepstakes, which permit of little variation in
their expression, be copyrighted?

2.3.4 Holding
Such instructions cannot be copyrighted.

2.3.5 Reasoning
Although copyright generally attaches to any expression that passes muster
under the standard of originality, an exception has been carved out in cases
where the idea to be expressed allows so few forms of expression that allowing
copyright over such expressions would exclude all but a few copyright holders
from expressing the idea at all. Instructions for sweepstakes fall into this
category.

2.4 CCC Information Services v. Maclean Hunter Mar-

ket Reports, Inc.
2.4.1 Overview
Maclean Hunter Market Reports (P) sued CCC Information Services (D) for
copyright infringement.

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2.4.2 Facts
Maclean Hunter Market Reports (“Maclean”) publishes the Red Book, a
guidebook setting forth the values of used cars throughout the nation. The
Red Book gives estimates of the values of many types of vehicles according
to make and model as well as geographic region. Values are also adjusted
according to the condition of the car, including mileage and certain optional
features. The values are not calculated using mathematical formulas. Rather,
they reflect the editors’ judgment as to how much each kind of car is worth.
CCC Information Services (“CCC”) has effectively incorporated the entirety
of the Red Book into its own computerized listing of used-car values.

2.4.3 Issue
(1) Does the Red Book have enough originality to qualify for copyright? (2)
Is CCC’s use of the information protected by the merger doctrine? (3) Is the
information contained in the Red Book part of the public domain?

2.4.4 Holding
(1) The Red Book has enough originality. (2) CCC is not protected by the
merger doctrine. (3) The Red Book’s information is not in the public domain.

2.4.5 Reasoning
The court below erred in holding that the Red Book consists of copyright-
ineligible facts. The evidence plainly points toward the opposite conclusion.
The listings in the Red Book are not produced in a formulaic or mechanical
way. Rather, each listing involves the discretion of the editors in estimating
how much that particular car is worth. Such discretion manifests sufficient
originality to give rise to copyright protection. Originality also exists in the
Red Book’s breakdown of car values by geographic region.
The merger doctrine should not be applied to the Red Book listings as
these listings are not “ideas” within the meaning of the doctrine. The merger
doctrine is intended to protect only “building block” ideas that are essential
to the advancement of science and similar pursuits. It is not intended to
protect broader ideas, like the listings, which may reflect individual tastes
and opinions. Expanding the merger doctrine to cover the Red Book listings
would leave very little under copyright protection.

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 The mere fact that the government has adopted the Red Book as a stan-
dard for insurance payouts does not mean that the Red Book has thereby
entered the public domain. Such a holding would be constitutionally prob-
lematic under the Takings Clause.

2.5 Assessment Technologies of Wisconsin, LLC v. WIRE-

data, Inc.
2.5.1 Overview
Assessment Technologies of Wisconsin (P) sued WIREdata (D) for copyright
infringement.

2.5.2 Facts
WIREdata (“Wire”) wanted to obtain data regarding real property for use
in real-estate listings. These data included facts such as the owner, address,
and valuation of each house. This information was routinely collected by tax
assessors and made available by the government. Under Wisconsin’s “open
records” law, Wire had already obtained access to the vast majority of data
it needed. The exceptions consisted of a few areas where tax assessors used
software produced by Assessment Technologies (“AT”) to gather and store
the data. Wire sued to compel disclosure of these records. Alarmed by the
efforts of Wire, AT brought suit against it for copyright infringement.

2.5.3 Issue
May data that is otherwise publicly available be subject to copyright protec-
tion simply by virtue of being stored within proprietary software?

2.5.4 Holding
Such data may not be subject to copyright protection.

2.5.5 Reasoning
Sequestering copyright-ineligible facts within a copyrightable program does
not bar others from copying those facts. Wire is not seeking to duplicate AT’s
software. Rather, it seeks only to duplicate the facts stored and organized

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by that software. The facts themselves are not copyrightable, so AT has no
basis for a claim. AT also cannot argue that the requisite data are available
from handwritten sources. The tax assessors in areas where AT’s software is
being used no longer take notes by hand.

2.6 Sparaco v. Lawler, Matusky & Skelly Engineers

LLP
2.6.1 Overview
Sparaco (P) sued Lawler, Matusky & Skelly Engineers (D) after the latter
copied the plans he had developed for the construction of a building.

2.6.2 Facts
Sparaco had been hired by a developer to create a city-mandated “site plan”
for the construction of an assisted-living facility. Essentially a map detail-
ing the plot of land to be developed, the site plan consisted of information
such as the topography of the land, the intended location and footprint of
the building, and other landscaping details. Following the completion of
the plan, Sparaco registered it as a copyrighted map and technical drawing.
Sparaco also executed an agreement with the developer to the effect that
the plans would not be used by architects than those originally hired un-
less Sparaco was additionally compensated. Sometime thereafter, logistical
problems evidently forced the developer to hire Lawler Matusky & Skelly
Engineers (“Lawler”) to replace the original architects. Sparaco offered to
draft a new site plan for Lawler, but the developer refused. Lawler then used
a modified version of Sparaco’s site plan in its own work. The modified plan
was eventually filed with the city.

2.6.3 Issue
May Sparaco claim copyright over the site plan?

2.6.4 Holding
Sparaco may claim copyright over the site plan to the extent that it contains
information beyond basic facts.

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2.6.5 Reasoning
Although the factual elements of a map, such as the layout of the land, are
not copyrightable, elements requiring the discretion of the mapmaker are.
These elements include the level of detail, color-coding, and the placement of
legends. Although the court below analogized the site plan to an idea that
was too general to be copyrighted, this analysis is flawed. Sparaco’s site plan
provides sufficiently concrete detail to facilitate the development of the land.
It contains enough specific expression to fall under copyright protection.

3 Trademark and Trade Dress

3.1 Qualitex Co. v. Jacobson Products Co., Inc.
3.1.1 Overview
Qualitex (P) sued Jacobson Products (D) for using a color over which it had
claimed trademark.

3.1.2 Facts
Qualitex (“Qualitex”) manufactures pads for use on dry-cleaning machines.
The pads have a distinct green-gold color. Jacobson Products (“Jacobson”),
a competing maker of dry-cleaning pads, started using the shade on its own
products. Qualitex sued Jacobson for trademark infringement.

3.1.3 Issue
May a trademark consist solely of a color?

3.1.4 Holding
A trademark may consist solely of a color.

3.1.5 Reasoning
The essential function of trademark is to identify the source of a product.
In doing so, it helps consumers to make purchasing decisions and allows a
manufacturer to benefit from its reputation. The courts have allowed trade-
marks for features such as the shape of a Coca-Cola bottle and the smell

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of fragrant sewing thread. There is no reason to exclude color. Although
color itself does not immediately signify a product’s source, over time it may
acquire secondary meaning. When such secondary meaning has attached to
a color, it qualifies for trademark protection. Furthermore, color in the cur-
rent context does not fall under the functionality doctrine, which states that
trademark cannot be extended to features that properly fall under the rubric
of patents. There is no suggestion that the green-gold color used by Qualitex
is peculiarly suitable for the uses to which dry-cleaning pads are put.
Jacobson’s arguments against trademarking Qualitex’s color lack merit.
Jacobson has argued that the trademarking of colors might lead to color
confusion, which might cause consumers to be confused by different shades
of the same color. This contention fails because courts have regularly allowed
trademarks on similar-sounding product names. Courts are competent to
evaluate whether one trademark is so similar to another as to cause confusion.
Jacobson also argues that colors are in limited supply. This argument fails
because color would be protected by the functionality doctrine if such were
the case. Finally, Jacobson argues that alternatives other than color exist.
This contention begs the question; in some cases, it may not be feasible to
use anything other than color as an identifier.

3.2 Zatarain’s, Inc. v. Oak Grove Smokehouse, Inc.

3.2.1 Overview
Zatarain’s (P) sued Oak Grove Smokehouse (D) for trademark infringement.

3.2.2 Facts
Zatarain’s manufactures prepackaged batter for use in the preparation of fried
foods. Among its products are those known as “Fish-Fri” and “Chick-Fri.”
Oak Grove Smokehouse (“Oak Grove”) manufactures similar products and
designates them by the names “fish fry” and “chicken fry.” Zatarain’s sued
Oak Grove on the theory that the naming of Oak Grove’s products infringed
upon Zatarain’s trademarks.

3.2.3 Issue
(1) Does Zatarain’s hold a trademark for the terms “Fish-Fri” and “Chick-
Fri”? (2) If so, does Oak Grove have a fair-use defense against Zatarain’s

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claims of trademark infringement?

3.2.4 Holding
(1) Zatarain’s holds a trademark for “Fish-Fri” but not “Chick-Fri.” (2) Oak
Grove has a fair-use defense.

3.2.5 Reasoning
Whether a term may be trademarked depends on its classification. A term
may be (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, or (5) fan-
ciful. Generic terms are categorically barred from trademark protection,
as they are essential to the identification of a particular type of product.
Descriptive terms are usually not eligible for trademark unless they have ac-
quired secondary meaning. The trademark-seeker bears the burden of prov-
ing that such secondary meaning exists. Suggestive, arbitrary, and fanciful
terms are generally granted trademark protection.
The lower court was correct in holding that “Fish-Fri” is a descriptive
term with secondary meaning while “Chick-Fri” is not. Both “Fish-Fri” and
“Chick-Fri” are descriptive terms, as they are closely connected to the prod-
ucts they describe. There are a limited number of ways to described fried
fish and fried chicken. The existence of other possible terms for describing
such food does not elevate either of Zatarain’s terms above the status of
descriptive terms. The evidence shows that Zatarain’s has spent consider-
able amounts of money in promoting Fish-Fri. Surveys show that the term
“Fish-Fri” has consequently come to be associated with Zatarain’s product
in particular. These facts establish secondary meaning for the term “Fish-
Fri.” The evidence, however, does not allow a similar conclusion as to any
secondary meaning surrounding “Chick-Fri.”
Oak Grove has a fair-use defense in the case of Fish-Fri. Zatarin’s has
no claim to the use of “fish fry” in the purely descriptive sense. Oak Grove
used the term in good faith and packaged its products in such a way as to
avoid confusion with those of Zatarain’s. Confusion at the point of purchase
would be nearly impossible.

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3.3 Two Pesos, Inc. v. Taco Cabana, Inc.
3.3.1 Overview
Taco Cabana (P) sued Two Pesos (D) for infringing its trade dress.

3.3.2 Facts
Taco Cabana operated a chain of Mexican restaurants in the San Antonio
area. The restaurants had Mexican-themed decor, which consisted of bright
colors, paintings, awnings, and Mexican artifacts. Two Pesos, a newer restau-
rant chain, operated restaurants with similar decors in Houston and other
cities, though its market has never included San Antonio. Sometime there-
after, Taco Cabana expanded into Two Pesos’s market and sued Two Pesos
for infringement of trade dress. The jury found that Taco Cabana had a
trade dress that was inherently distinctive but without secondary meaning.

3.3.3 Issue
May a trade dress that is inherently distinctive receive protection under the
Lanham Act even though it lacks secondary meaning?

3.3.4 Holding
Such a trade dress may receive protection.

3.3.5 Reasoning
The Lanham Act says nothing about secondary meaning in relation to trade
dress. It would be improper to read such a requirement into the Act, for
doing so might place a burden on upstart businesses. Such businesses would
be unable to protect their trade dress until they had operated for long enough
for that trade dress to acquire secondary meaning. Denying protection for
inherently distinctive trade dress would also allow competitors to copy such
trade dress without consequence.

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3.4 Kohler Co. v. Moen Inc.
3.4.1 Overview
Kohler objected to Moen’s attempt to obtain trademark protection for the
shape of its faucet handles.

3.4.2 Facts
Moen sought trademark protection for the distinctive design of its faucet han-
dles. In support of its request, Moan produced voluminous evidence showing
that the design of the faucet handles were distinctive and non-functional.
The evidence included a survey showing that a vast majority of respondents
identified the design of the handles with Moen. Kohler thereafter sued, argu-
ing that the granting of a trademark would give Moen advantages normally
available only through patent.

3.4.3 Issue
May the design of a faucet handle receive protection as a trademark?

3.4.4 Holding
The design of a faucet handle may receive such protection.

3.4.5 Reasoning
Kohler contests the trademark on the theories (1) that the trademark would
effectively grant a perpetual patent and (2) that it would be anticompetitive.
Both contentions lack merit. Trademark law is distinct from patent in that
it does not address functional elements. Trademark is not anticompetitive
because the supply of distinctive names and symbols for use as identifying
marks is practically infinite. Granting a “monopoly” in the use of one par-
ticular trademark has no effect on competing businesses.

Cudahy, Circuit Judge, dissenting. The particular configuration of a

product, such as a faucet, should be considered generic. In granting a trade-
mark over such a feature, the Patent and Trademark Office has effectively
offered protection that should only be available through a patent.

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3.5 In re General Electric Broadcasting Company, Inc.
3.5.1 Overview
General Electric Broadcasting Company (“General Electric”) sought to reg-
ister as a service mark the sound of a ship’s bell.

3.5.2 Facts
General Electric operates a radio station. At each half hour, the station tells
listeners the time by playing a recording of a ship’s bell with the appropriate
number of rings. The sound is then followed by a verbal announcement of
the time. General Electric applied for protection of the sound as a service
mark, but protection was denied.

3.5.3 Issue
May the ringing of a ship’s bell act as a service mark?

3.5.4 Holding
The ringing of a ship’s bell may not act as a service mark absent evidence
that it indicates to listeners the producer of the sound.

3.5.5 Reasoning
The Lanham Act expressly states that no trademark should be refused regis-
tration on account of its nature. Under this standard, a variety of sounds have
been registered as service marks. These include the sound of a creaking door,
the ringing of the Liberty Bell, and a series of musical notes. There is, how-
ever, a distinction between “distinctive” and “commonplace” sounds. While
distinctive sounds are registered without additional evidence, a commonplace
sound must be shown to have acquired secondary meaning. Because General
Electric has produced no evidence of such secondary meaning, the service
mark must be denied.

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3.6 In re Clarke
3.6.1 Overview
Clarke sought trademark protection for scented sewing thread and embroi-
dery yarn.

3.6.2 Facts
Clarke sells scented sewing thread and embroidery yarn. Clarke has submit-
ted declarations and evidence showing that no other businesses sell scented
yarn and that the scent has come to identify her products.

3.6.3 Issue
May a scent be protected as a trademark?

3.6.4 Holding
A scent may be protected as a trademark.

3.6.5 Reasoning
The Examining Attorney below has argued that a smell cannot qualify as
a trademark because it is merely a pleasant feature of the product rather
than an identifier of its source. This contention lacks merit in light of the
evidence. Fragrance is not a natural characteristic of thread or yarn. Clarke
has spent considerable resources and effort promoting this peculiar aspect
of her products. That she has not adverted to a particular smell as the
trademark should not prevent the scent from serving as such.

4 The Right of Publicity

4.1 Midler v. Ford Motor Co.
4.1.1 Overview
Midler (P) sued Ford Motor Company (D) for using a likeness of her voice
without permission.

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4.1.2 Facts
Ford Motor Company (“Ford”) had proposed to hire Midler to sing for a
commercial, but Midler refused. Ford, which held a license to use the in-
tended song itself, then hired a different singer to imitate Midler’s voice.
The result was so convincing as to be virtually indistinguishable from Mi-
dler’s own singing. The commercial made no explicit references to Midler;
only the likeness of her voice was used.

4.1.3 Issue
May a famous singer recover from a party that uses a likeness of her voice
without permission?

4.1.4 Holding
Such a singer may recover.

4.1.5 Reasoning
It is important to realize that this case does not fall under the scope of copy-
right or conventional definitions of the unauthorized use of one’s identity.
Copyright law offers no protection against imitations of a particular singer’s
rendition of a song. Likewise, Midler cannot claim that Ford used her iden-
tity improperly since the commercial does not make use of her name, voice,
signature, or other identifying features. Nonetheless, Midler should recover
for Ford’s unauthorized use of a likeness of her voice. A voice, just like a
face, is an identifying feature protected by the law. Ford itself admitted that
payment would be appropriate when it first sought to hire Midler and, when
efforts failed, to replace her with a sound-alike.

4.2 White v. Samsung Electronics America, Inc.

4.2.1 Overview
Vanna White (P) sued Samsung Electronics America (D) for evoking her
identity in an television commercial.

20
4.2.2 Facts
Samsung Electronics America (“Samsung”) produced a television commercial
that showed a robot standing in front of the Wheel of Fortune game board.
White sued Samsung for “appropriating her identity.”

4.2.3 Issue
Does Samsung’s commercial infringe White’s right of publicity?

4.2.4 Holding
The commercial infringes White’s right of publicity.

4.2.5 Reasoning
Kozinski, Circuit Judge, dissenting. The majority has erred by granted
celebrities a sweeping right that drastically expands the protections normally
afforded by intellectual-property laws. Samsung has not used an actual like-
ness of White in its commercial. In fact, the effectiveness of the commercial
depends not on the robot itself but the fact that it is standing in front of the
Wheel of Fortune game board. Without the game board, no one would rec-
ognize the robot as a parody of White. The majority has effectively granted
White an exclusive right to what she does for a living.
The majority’s decision also runs afoul of the Copyright Act by hindering
the production of parodies protected by the Act. Under the decision, even
a copyright holder might be prevented from licensing his work for use in a
parody because he may have to obtain the consent of every actor or celebrity
appearing in the work. In the worst case, the producer of a parody in one
might find himself sued by some minor celebrity from another state even
though the producer in all likelihood knew nothing of the celebrity before.
Finally, the majority’s decision is a breathtaking infringement of the First
Amendment. It tries to limit the very process of reminding the public of a
celebrity. The limitations imposed by the majority will tend to impoverish
the public domain and hinder the future development of artistic works.

21
4.3 Wendt I
4.3.1 Citation
Wendt v. Host Int’l, Inc., 125 F.3d 806 (9th Cir. 1997)

4.3.2 Overview
Wendt (P) sued Host International for improper use of his likeness.

4.3.3 Facts
George Wendt (P) and John Ratzenberger, actors on the television show
Cheers, sued Host International (“Host”) for improper use of their images.
Host had created animatronic robots resembling the two actors and placed
them outside airport bars. The robots were displayed in a setting similar to
the bar shown in Cheers. The trial court granted summary judgment in favor
of Host on grounds that Wendt had failed to establish any genuine dispute
as to whether the robots actually looked like their real-life counterparts.

4.3.4 Issue
Has Wendt raised a genuine dispute as to a material fact in claiming that
the robots resemble Ratzenberger and him?

4.3.5 Holding
Wendt has raised such an issue.

4.3.6 Reasoning
The trial court should have submitted the question of whether the robots
resembled Wendt and Ratzenberger to a jury instead of ruling as a matter
of law. The robots, however, should be viewed independently of the context
in which they are displayed. The common-law right of publicity protects
an individual from all forms of improper exploitation of his or her image,
including infringement through animatronic robots. Host cannot claim that
is actually producing a likeness of the actors’ respective characters in the
show as opposed to the actors themselves; an actor does not give up his right
to publicity by portraying a fictional character.

22
4.4 Wendt II
4.4.1 Citation
Wendt v. Host Int’l, Inc., 197 F.3d 1284 (9th Cir. 1999)

4.4.2 Holding
The Ninth Circuit declined to rehear Wendt I.

4.4.3 Reasoning
Kozinski, Circuit Judge, dissenting. A scenario feared in White v.
Samsung has come to pass. Here, a copyright holder is struggling with ac-
tors over who may ultimately permit the creation of derivative works. Under
the Copyright Act, there would be no question that Host, having permission
from Paramount Studios to use the characters from Cheers, is entitled to
set up the animatronic robots. The drastic extension of publicity rights in
White v. Samsung, however, has allowed Wendt and Ratzenberger to chal-
lenge what would otherwise be a completely legitimate use of their characters.
The majority’s decision here makes it very difficult for a copyright holder to
dictate any way in which its copyrighted work might be used, as there is often
no meaningful distinction between exploiting the likeness of a character and
exploiting the likeness of the actor portraying that character.

5 Term Limits
5.1 Eldred v. Ashcroft
5.1.1 Overview
Eldred seeks to invalidate the Copyright Term Extension Act (“CTEA”).

5.1.2 Facts
Eldred and other petitioners make use of copyrighted works that entered the
public domain. They challenge the CTEA on several constitutional grounds.

23
5.1.3 Issue
(1) Does the extension of the term of copyright protection violate the con-
stitutional provision of a “limited” term of copyright? (2) Does the CTEA
“promote the Progress of Science”? (3) Does the CTEA amount to an un-
constitutional regulation of free speech?

5.1.4 Holding
(1) The extension of copyright does not violate any constitutional provisions.
(2) The CTEA does “promote the Progress of Science.” (3) The CTEA is
not an unconstitutional regulation of free speech.

5.1.5 Reasoning
Congress has historically enacted copyright extensions without question as
to the constitutionality of its measures. Eldred does not argue that the new
copyright term granted by the CTEA violates the constitutional requirement
of a “limited” term. Rather, he argues only that retroactive application of the
term to existing works would be unconstitutional. Congress has explicitly
stated that the uniform application of copyright extensions is intended to
preserve fairness, so that authors are not afforded greater or lesser protection
depending on when they happen to publish their works. In any case, the
length of copyright term lies generally within the discretion of Congress.
It is also within the discretion of Congress to decide what is the best way
of advancing the objectives of the Copyright Clause. Eldred argues that the
Copyright Clause is intended to secure a quid pro quo: the author receives
copyright protection now in exchange releasing the work to the public domain
later. The history of copyright legislation, however, shows that this quid pro
quo should be understood to include extensions of copyright. Congress is at
liberty to write a guarantee of future extension into legislation. It also has
the power to achieve the same effect through historical precedent.
Eldred also contends without merit that the CTEA amounts to an un-
constitutional restriction on free speech. To the contrary, the purpose of the
Copyright Clause is to promote the creation and publication of free expres-
sion. To that end, copyright law already contains provisions to guarantee
free speech. Ideas are not copyrightable, and the free-use defense allows the
copying of works for purposes like academic research and parody.

24
Justice Stevens, dissenting. Although early congressional decisions should
be afforded deference on the grounds that they reflect the intentions of the
framers, later decisions are not entitled to such judicial leeway. The Copy-
right Act of 1831 in no way reflects the intentions of the framers, who were
long dead by then. It does not establish the constitutionality of copyright
extensions. Under the majority’s analysis, Congress would have the power
to extend copyright indefinitely.

Justice Breyer, dissenting. The majority has given Congress the leeway
to grant an effectively perpetual copyright that benefits private parties. From
the standpoint of the author, there is nor real difference between a copyright
of the current length and a perpetual copyright. Because royalties tend to
decay as a work gets older, the regime established by the CTEA already
grants more than 99% of the value that can be expected to be derived from
a perpetual copyright in any case. It is absurd to suggest that extension of
copyright beyond the death of an author would somehow encourage an author
to produce more works during his or her lifetime. Rather, the primary effect
would be to make it difficult for the public to make use of the work, even
after its commercial value has long since disappeared. In fact the “limited
time” provision was intended specifically to avoid the sort of situation that
the CTEA has created.

6 Fair Use
6.1 Harper & Row, Publishers, Inc., v. Nation Enter-
prises
6.1.1 Overview
Harper & Row (P) sued Nation Enterprises (D) for making unauthorized use
of excerpts from the memoir of Gerald Ford.

6.1.2 Facts
Harper & Row (“Harper”) was about to publish a memoir written by former
president Gerald Ford. It had reached an agreement with Time magazine,
under which Time would pay for permission to publish excerpts from the
memoir before the release of the book. Nation Enterprises (“Nation”), the

25
publisher of Nation magazine, apparently obtained a leaked copy of the mem-
oir. Nation then proceeded to lift excerpts from the copy and to incorporate
those excerpts into a story of its own. The Nation story was designed to
“scoop” (i.e., preempt) the story that Time had been planning. When the
Nation story was published, Time refused to pay Harper the full fee for access
to the memoir. Harper then sued Nation.

6.1.3 Issue
Does Nation’s use of the excerpts qualify as “fair use”?

6.1.4 Holding
Nation’s use does not qualify as fair use.

6.1.5 Reasoning
Although the doctrine of fair use was intended to protect First Amendment
free speech, its applicability is especially narrow when unpublished works
are at issue. The right to control publication is an essential right afforded
by copyright law. Without the ability to control the release of a work and
to market the work beforehand, authors would have little incentive to cre-
ate works in the first place. Nation should not be permitted to carry out
infringement of a soon-to-be-published work under the guise of news report-
ing. If every memoir by a public figure could be appropriated by non-paying
publishers, then no such memoir would ever be able to earn its author a
profit.
Congress has provided four factors for evaluating whether a particular
use is fair use: (1) the purpose and character of the use; (2) the nature of
the copyrighted work; (3) the substantiality of the portion used in relation
to the copyrighted work as a whole; (4) the effect on the potential market
for or value of the copyrighted work. Here, Nation has made (1) a blatant
attempt to profit from the leaked manuscripts. It does not even pretend to
have any innocent motive. Nation has also (2) copied a manuscript of signif-
icant expressive value. Employees of Harper and Time were required to sign
confidentiality agreements prior to accessing the material. Although Nation
copied only a small portion of the manuscript, it lifted (3) the most powerful
passages. Finally, there is a (4) real possibility that Nation’s unauthorized
publication will prove detrimental to sales of the actual book.

26
6.2 Sony Corp. of America v. Universal City Studios,
Inc.
6.2.1 Overview
Universal City Studios (“Universal”) (P) sued Sony Corporation of America
(“Sony”) (D) for facilitating copyright infringement.

6.2.2 Facts
Sony had just introduced its Betamax VCR. Users of these new VCRs began
to record shows for the purpose of “time-shifting,” or viewing the said shows
at times other than their broadcast times. The trial evidence showed that
the majority of users owned ten or fewer tapes and that more than half of
users did not plan to re-watch recorded shows. Universal sued on the theory
that Sony was liable for indirect infringement of its copyright on TV shows.

6.2.3 Issue
(1) Are there substantial non-infringing uses of Sony’s VCRs? (2) Does
unauthorized time-shifting qualify as fair use?

6.2.4 Holding
(1) There are substantial non-infringing uses of Sony’s VCRs. (2) Unautho-
rized time-shifting qualifies as fair use.

6.2.5 Reasoning
(1) Indirect liability exists only if there are no substantial non-infringing
uses of the VCRs. Here, the facts show that non-infringing uses do exists.
Universal’s programs account for less than 10% of all programming on the
air. The relief requested by Universal would be too broad because it would
categorically bar the use of VCRs for recording TV shows, even if the copy-
right holders to those programs consented to such recording. The record
shows that a substantial fraction of content owners would not object to the
recording of their shows.
(2) Time-shifting, even if unauthorized, nonetheless qualifies as fair use.
The Copyright Act requires courts to weigh factors such as the commercial
or non-commercial nature of the use and the potential impact of the use on

27
the market for the copyrighted work. Here, time-shifting is plainly a non-
commercial use. The non-commercial nature of time-shifting the burden of
proving probable harm onto Universal. Universal, in turn, has failed to carry
this burden. Although Universal contends that time-shifting runs afoul of “a
point of philosophy,” it has not adverted to any factual basis for fears that
time-shifting would erode its market.

6.3 Campbell v. Acuff-Rose Music, Inc.

6.3.1 Overview
Acuff-Rose Music (“Acuff-Rose”) (P) sued Campbell (D) for writing a parody
of a song.

6.3.2 Facts
Campbell and his band, 2 Live Crew, had written a parody of the song
“Pretty Woman,” whose copyright had been assigned to Acuff-Rose. Prior to
releasing the parody, Campbell requested permission from Acuff-Rose to mar-
ket the parody. The request made it clear that Campbell would credit Acuff-
Rose for the original song. After Acuff-Rose refused, Campbell nonetheless
released the parody, which became a success. Acuff-Rose then sued Campbell
for copyright infringement.

6.3.3 Issue
Does the parody qualify as fair use?

6.3.4 Holding
The parody qualifies as fair use.

6.3.5 Reasoning
The Copyright Act requires the courts to evaluate four factors when deciding
whether a particular use qualifies as fair use: (1) the purpose and charac-
ter of the use, (2) the nature of the copyrighted work, (3) the amount and
substantiality of the portion used in relation to the copyrighted work as a

28
whole, and (4) the effect of the use upon the potential market of the copy-
righted work. For a parody, it is important under criterion (1) whether the
work makes a sufficient attempt to ridicule the original. It does not matter
whether the parody is artful or in good taste. Here, the alteration of the
lyrics of the original amounts to a sufficient “transformation” of the original
that Campbell’s work may be said to ridicule, rather than copy, the origi-
nal. Criterion (2) is of little help in the current case because it contemplates
derivative works other than parodies. Criterion (3) entails some of the fac-
tors considered under criterion (1) since the context of the derivative work is
important. Parody, by definition, must copy enough of the original to be rec-
ognizable. As long as the copying is not excessive, fair use should be found.
Here, Campbell copied only the opening lines, changing the lyrics drastically
as the song progressed. In all, he copied no more than was necessary. It is
unlikely for the purposes of criterion (4) that the parody would significantly
reduce the market for the original work.

6.4 UMG Recordings, Inc. v. MP3.com, Inc.

6.4.1 Overview
UMG Recordings (“UMG”) (P) sued MP3.com (D) for copyright infringe-
ment.

6.4.2 Facts
MP3.com had introduced a new service that allowed users to stream copy-
righted music from the Internet to their computers. MP3.com had evidently
obtained copies of the songs in question by converting thousands of record-
ings into MP3 format. Although UMG held the copyright to the music in
question, MP3.com required users to verify that they owned a copy of the
album by inserting the CD containing the album into the computer for a
few seconds. Immediately upon verification, the user was allowed to stream
the music from the Internet. When UMG sued for copyright infringement,
MP3.com argued that its service was fair use.

6.4.3 Issue
Does the service offered by MP3.com qualify as fair use?

29
6.4.4 Holding
The service does not qualify as fair use.

6.4.5 Reasoning
MP3.com’s service fails every factor the four-factor test for fair use stated
in the Copyright Act. With regard to (1) the purpose and character of
the use, MP3.com has simply copied the recordings owned by UMG. There
is no attempt to “transform” the music. Although MP3.com contends that
offering the music online should be considered transformative, simply shifting
the content from one medium to another has never held to be an adequate
defense against an infringement claim. With regard to (2) the nature of
the copyrighted work, there is no question that MP3.com has infringed the
copyrighted “core” of the works in question. With regard to (3) the amount
and substantiality of the portion copied in relation to the original work, there
is again no question that MP3.com has carried out a wholesale copying of
UMG’s music. With regard to (4) the effect of the use upon the potential
market for the copyrighted work, MP3.com has taken actions detrimental to
any such market. MP3.com cannot argue that it is operating in a market
as yet unexplored by the copyright holder. The copyright holder has the
sole prerogative of entering new markets. In any case, the record shows that
UMG has already made efforts to distribute its music online by entering into
various licensing agreements.

6.5 Anderson v. Stallone

6.5.1 Overview
Anderson (P) sued Stallone (D) for copying an idea for a movie.

6.5.2 Facts
Stallone had already starred in the movies Rocky I, II, and III. Stallone
was fleshing out the idea for Rocky IV when Anderson wrote out his own
idea for the movie. Anderson subsequently met with studio executives, who
apparently promised that Anderson would receive payment if his idea was
used in connection with the movie. Sometime thereafter, Stallone revealed
that Rocky IV would indeed revolve around Anderson’s ideas. Anderson,

30
however, learned that he would receive no payment after all. Anderson sued
Stallone for infringing the copyright on the treatment of Rocky IV.

6.5.3 Issue
Is Stallone liable for infringing any copyright protecting Anderson’s treat-
ment?

6.5.4 Holding
Stallone is not liable for any such infringement.

6.5.5 Reasoning
Anderson is not entitled to relief because his treatment essentially copies
characters created by Stallone. The copying of material created by Stal-
lone is so pervasive throughout Anderson’s treatment that it is entitled to
no copyright protection at all. As shown by the facts determined at trial,
the characters in Anderson’s treatment were not merely similar to those cre-
ated by Stallone; they were wholesale copies. Furthermore, Anderson has
advanced no basis in precedent for his extraordinary claim that the creator
of an unauthorized derivative work is entitled to recover against the original
copyright holder for making use of part of that derivative work.

7 Remedies
7.1 eBay, Inc. v. MercExchange, LLC
7.1.1 Overview
MercExchange (P) sued eBay (D) for infringing a patent on online auctions.

7.1.2 Facts
MercExchange had obtained a patent for an electronic marketplace in which
a centralized authority facilitated the sale of goods between individuals. Al-
though MercExchange attempted to license the technology to eBay, eBay
apparently declined to accept any licensing agreement and instead launched
its own auction site. MercExchange then sued for patent infringement. The

31
district court held that an injunction against eBay should automatically is-
sue. The Court of Appeals held that an injunction should be granted only
in extraordinary cases.

7.1.3 Issue
What should be the standard for granting injunctions in patent cases?

7.1.4 Holding
The courts should use the traditional four-factor test in determining whether
an injunction should issue in a case of patent infringement.

7.1.5 Reasoning
It is settled law that the a plaintiff must demonstrate (1) that it has suffered
an irreparable injury; (2) that remedies available at law are inadequate; (3)
that a remedy in equity is warranted after considering the balance of hard-
ships between plaintiff and defendant; and (4) that an injunction would be
consistent with the public interest. The district court and the Court of Ap-
peals both erred by applying broad rules instead of engaging in the traditional
four-factor analysis. The district court erred by holding that injunctions
should not issue absent special circumstances while the Court of Appeals
erred in the opposite direction by holding that injunctions should issue as a
matter of course. In particular, the district court incorrectly suggested that
non-practicing patent-holders were subject to a presumption against harm.
There exist many patent holders, such as university researchers, who because
of financial limitations or other reasons may prefer to license their inventions
rather than develop them directly. Such individuals should not be denied the
protection of patents. This Court has consistently has consistently rejected
attempts to replace equitable principles with inflexible rules.

Chief Justice Roberts, with whom Justice Scalia and Justice Gins-
burg join, concurring. Although the Court reaches the correct conclu-
sion, it should have given more consideration to issue arising uniquely in
the context of patents. If earlier cases have consistently granted injunctions
after applying the four-factor test, then such precedent may suggest that
an injunction is indeed the appropriate remedy for the majority of patent

32
disputes. The Court should take into account the peculiar nature by which
some patent holders might choose to profit from their patents. In particular,
a growing number of firms now acquire patents with the sole intention of
extracting licensing fees from the actual producers of the patented technolo-
gies. The Court should be careful to prevent injunctions from becoming a
means of extracting exorbitant payments from licensees.

7.2 Sony Corp. of America v. Universal City Studios,

Inc. (cont’d)
7.2.1 Overview
Please see the facts stated above.

7.2.2 Issue
Has Sony incurred indirect liability for copyright infringement through its
sale of VCRs?

7.2.3 Holding
Sony has not incurred indirect liability.

7.2.4 Reasoning
Universal has failed to carry its burden of proving that Sony should be held
responsible for any infringement committed by the users of Betamax VCRs.
It is insufficient merely to allege that a particular piece of equipment could
conceivably be used for infringement. Rather, it is necessary to show that
Sony had actual or constructive knowledge that the buyers of its VCRs would
be likely to engage in copyright infringement. The record shows that no such
knowledge exists. Sony had no direct contact with customers aside from the
actual sale of each VCR itself. No Sony employee participated in the in-
fringing activities of its consumers, and there is no evidence to suggest that
any infringing consumer acted on the suggestions of Sony’s advertisements.
Furthermore, the rule that should be applied in the current case should be
analogized to the “staple article of commerce doctrine” long used in patent
law. That doctrine states that a product should not be considered to facili-
tating infringement unless it is capable only of infringing uses.

33
7.3 MGM Studios Inc. v. Grokster, Ltd.
7.3.1 Overview
MGM Studios (“MGM”) (P) sued Grokster (D) and StreamCast Networks
(“StreamCast”) (D) for facilitating copyright infringement by distributing
Kazaa file-sharing software.

7.3.2 Facts
Grokster and StreamCast distributed similar peer-to-peer file-sharing soft-
ware. Although the software was capable of being used for non-infringing
purposes, the trial evidence showed that more than 90% of the files shared
using the software were unauthorized copies of songs and movies, including
those owned by MGM. The evidence also showed that both companies had
developed their software in the wake of the litigation surrounding Napster
and that their aim was to capture as many Napster users as possible. To this
end, StreamCast developed Napster-compatible software for the purpose of
inducing Napster users to switch to its service. Grokster promoted itself to
Napster users through similar means. In addition, both companies openly
acknowledged that substantial numbers of their users were committing copy-
right infringement. Both companies responded to e-mails from users asking
about copyright issues, and on one occasion legal counsel remarked that a
lawsuit would be good for publicity.

7.3.3 Issue
Should Grokster and StreamCast be secondarily liable for copyright infringe-
ment?

7.3.4 Holding
Grokster and StreamCast should be liable.

7.3.5 Reasoning
The Court of Appeals erred in holding that Grokster and StreamCast may
escape liability simply because their products are capable of non-infringing
uses. In reaching this conclusion, the court below has interpreted the rule
established in Sony far too broadly. There, the court addressed the extent to

34
which secondary liability could be based on an inference that the technology
in question allowed no substantial uses other than infringement. Where the
outcome turns on such inferences alone, a court is not allowed to find liability
when significant non-infringing uses exist.
By contrast, the case here turns on direct evidence rather than inferences.
The Sony rule does not limit liability when direct evidence of knowledge of
infringement exists. The record establishes beyond dispute that Grokster
and StreamCast knew of the infringing activities of its users and that both
companies in fact encouraged that infringement. Both companies attempted
to position themselves as Napster substitutes, directly offering users advice on
the potential legal ramifications of file-sharing. That both companies derive
most of their revenue from advertising, as opposed to the shared content
itself, and their failure to actively restrain the sharing of copyrighted content
strongly suggests that they are turning a blind eye to infringement.

Justice Ginsburg, with whom the Chief Justice and Justice Kennedy
join, concurring. There was no evidence to permit any serious suggestion
that appreciable levels of fair use were taking place. The absence of fair use
strongly suggests that secondary liability should be found.

Justice Breyer, with whom Justice Stevens and Justice O’Connor

join, concurring. It is unnecessary to reinterpret the Sony standard as the
Court suggests. Rather, it is enough simply to hold that the mere 10% of
shared files that do not infringe copyright is insufficient to meet the criterion
of “substantial” non-infringing uses.

7.4 Dickinson v. Zurko

7.4.1 Overview
A dispute arose as to the standard of review to be applied when the Court
of Appeals for the Federal Circuit (“CAFC”) reviews the decisions of the
Patent and Trademark Office (“PTO”).

7.4.2 Facts
Zurko applied for a patent, but the PTO denied the patent on the ground
that the invention was obvious in light of prior art. Zurko then sought review

35
by the CAFC, which concluded that it should apply the court/court standard
of review.

7.4.3 Issue
What standard should the CAFC use in reviewing decisions of the PTO?

7.4.4 Holding
The CAFC should use the court/agency standard.

7.4.5 Reasoning
The Administrative Procedure Act (“APA”) set forth a standard for appel-
late review of the decisions of executive agencies. The APA specifies that
appellate courts are to use a court/agency standard of review as opposed to
the court/court standard used in reviewing the decisions of trial courts. The
court/agency standard is predicated on whether a “reasonable mind” would
accept the evidence supporting a certain conclusion whereas the court/court
standard requires the reviewing judge to have a “definite and firm convic-
tion” that the lower judge has created a factual error. The former is generally
considered to accord greater deference to the agency under review.
Although Dickinson argues that precedent has established the court/court
standard as an “additional requirement” as defined in the APA, he has failed
to produce sufficient evidence to support this view. In particular, the APA
expressly states that any such requirement should be recognized “by law” as
opposed to common usage alone. A survey of the case law reveals that no
consensus actually exists as to use of the court/court standard in reviewing
agency decisions. Ruling in favor of Dickinson would tend to create rather
than to resolve problems surrounding the standard of review.

Chief Justice Rehnquist, with whom Justice Kennedy and Justice

Ginsburg join, dissenting. The practice of the patent bar and the CAFC
does support the contention that the court/court standard should be viewed
as an ‘additional requirement” as defined in the APA.

36
7.5 Harrods Ltd. v. Sixty Internet Domain Names
7.5.1 Overview
Harrods (P) commenced an in rem action for domain names that allegedly
infringed its trademark.

7.5.2 Facts
Harrods had formed several subsidiaries in South America. Eventually, Har-
rods severed its ties with subsidiaries, leaving them to operate as independent
businesses. When the subsidiaries registered domain names similar to those
used by Harrods, Harrods sued under the Anticybersquatting Consumer Pro-
tection Act (ACPA).

7.5.3 Issue
Is bad faith in registering domain names a prerequisite to in rem liability
under the ACPA?

7.5.4 Holding
Bad faith is a prerequisite to in rem liability.

7.5.5 Reasoning
The text and legislative history of the ACPA makes it clear that a plaintiff
must allege bad faith, even in an in rem action. Indeed, the ACPA is intended
to protect consumers against purposeful attempts to profit from the goodwill
of established businesses, not to prevent persons from registering domain
names for legitimate uses. The plaintiff’s concerns that the bad-faith rule
would make it difficult to prevail in an in rem action are unfounded. The
very fact that an in rem action is necessary points to bad faith on the part
of the registrant.

7.6 RealNetworks, Inc. v. Streambox, Inc.

7.6.1 Overview
RealNetworks (P) sued Streambox (D) under the DMCA for distributing a
circumvention device.

37
7.6.2 Facts
RealNetworks had established a system for streaming multimedia files from
content providers’ servers to users’ computers. The system consisted of Re-
alServer software, which content providers used to serve content, and Re-
alPlayer software, which allowed end users to access content arriving from
RealServers. The system contained two measures designed to prevent users
from making unauthorized copies of streamed content. First, RealServer
and RealPlayer engage in an authentication process known as the “Secret
Handshake,” by which RealServer ascertains that it is indeed communicat-
ing with RealPlayer. Following the Secret Handshake, RealPlayer then de-
tects a “Copy Switch” in the streamed content, which specifies whether the
consumer may download a separate copy of the content. The facts showed
that many content providers had chosen to distribute their content through
RealPlayer because of the copy protection it afforded.
Streambox produced Streambox VCR software, which masquerades as
RealPlayer and ignores the Copy Switch. By this means, Streambox VCR
allows users to make unauthorized copies of streamed content.

7.6.3 Issue
Does the DMCA prohibit the distribution of Streambox VCR?

7.6.4 Holding
The DMCA prohibits the distribution of Streambox VCR.

7.6.5 Reasoning
The Secret Handshake and Copy Switch plainly constitute a “technologi-
cal measure” that “effectively controls access” to content under the DMCA.
Streambox VCR “circumvents” these measures by masquerading as RealPlayer
and ignoring the Copy Switch. It is important to note that “effective” protec-
tion need not provide ironclad or even significant protection against efforts to
bypass restrictions on copying. Rather, all that is required is for the measure
to prevent copying in the ordinary course of use. Streambox has violated the
DMCA because its software is (1) primarily designed to facilitate circum-
vention and (2) has limited significant purposes beyond circumvention. This
case differs from Sony. There, some copyright holders had at least implicitly

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consented to copying. Here, copyright holders have chosen RealNetworks
specifically because it disallows copying.

7.7 Universal City Studios, Inc. v. Reimerdes

7.7.1 Overview
A dispute arose as to whether the software DeCSS violated the DMCA.

7.7.2 Facts
DeCSS was a computer program that bypassed the encryption scheme that
normally rendered DVD video inaccessible to devices that failed to provide
the correct decryption key. Manufacturers of DVD players were required to
pay movie studios, such as Universal, for licenses to the decryption keys.
After being enjoined from distributing DeCSS, the defendants engaged in
“electronic civil disobedience” by urging other websites to distribute DeCSS
and providing links from its website to those sites.

7.7.3 Issue
Did the defendant’s actions violate the DMCA’s prohibition on trafficking in
circumvention devices?

7.7.4 Holding
The defendant’s actions so violate the DMCA.

7.7.5 Reasoning
The defendant first argues that that “effective” control of access under the
DMCA necessitates resistance against attempts at circumvention. This con-
struction of the statute is flawed because it would prevent the courts from
enforcing its anti-circumvention provisions precisely where those provisions
are needed. The defendant has not shown that DeCSS was undertaken with
any legitimate research goals, so it does not fall under the DMCA’s reverse-
engineering exception. Furthermore, the doctrine of fair use does not protect
the defendant here; the defendant is being sued for circumvention, not for
the copying of any content.

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