INTELLECTUAL PROPERTY:
LAW & THE INFORMATION
SOCIETY
Cases & Materials
Fifth Edition, 2021

James Boyle
William Neal Reynolds Professor of Law
Duke Law School
Jennifer Jenkins
Clinical Professor of Law (Teaching) & Director,
Center for the Study of the Public Domain
Duke Law School

Copyright ©2021 James Boyle and Jennifer Jenkins
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Table of Contents

A Preface: Lessons from the Pandemic .............................................................................
INTRODUCTION ..............................................................................................................
Chart: Comparison of the Three Main Forms of Federal Intellectual Property ....................
Basic Themes: Three Public Goods, Six Perspectives ..........................................................
An Open Course Book? ........................................................................................................
Structure and Organization ...................................................................................................
Chapter One
THE THEORIES BEHIND INTELLECTUAL PROPERTY ........................................
Problem 1-1: Framing ...........................................................................................................
James Boyle, The Apple of Forbidden Knowledge ...............................................................
Problem 1-2: Justifying and Limiting ...................................................................................
John Locke, Of Property, from Two Treatises on Government ............................................
James Boyle, “Why Intellectual Property,” from The Public Domain .................................
John Perry Barlow, Selling Wine Without Bottles: The Economy of Mind on
the Global Net ................................................................................................................
International News Service v. The Associated Press, 248 U.S. 215 (1918) ..........................
The New York Times, “News Pirating Case in Supreme Court” ...........................................
James Boyle, “Thomas Jefferson Writes a Letter,” from The Public Domain .....................

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Chapter Two
INTELLECTUAL PROPERTY & THE CONSTITUTION ..........................................
U.S. Constitution, Art. I, § 8, cl. 8 ........................................................................................
Introduction ...........................................................................................................................
Problem 2-1: Constitutional Interpretation ...........................................................................
1.) Limitations on Congressional Power: Originality ..........................................................
The Trade-Mark Cases, 100 U.S. 82 (1879) .........................................................................
Feist v. Rural Telephone Service, 499 U.S. 340 (1991) ........................................................
(The full version of the case is on page 287)
2.) Limitations on Congressional Power: Purpose and Novelty/Non-Obviousness ............
Graham v. John Deere Co., 383 U.S. 1 (1966) .....................................................................
(The full version of the case is on page 744)
3.) Limitations on Congressional Power: Fixation & the Interaction between Clauses .......
Problem 2-2: Constitutional Interpretation ...........................................................................
U.S. v. Moghadam, 175 F.3d 1269 (11th Cir. 1999) .............................................................
U.S. v. Martignon, 492 F.3d 140 (2d Cir. 2007) ...................................................................
4.) Limitations on Congressional Power: Limited Times, Term Extension and
the First Amendment .....................................................................................................
Eldred v. Ashcroft, 537 U.S. 186 (2003) ...............................................................................
Note: The Classics Protection and Access Act .....................................................................
Golan v. Holder, 565 U.S. 302 (2012) ..................................................................................
Problem 2-3: Term Limits .....................................................................................................

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Chapter Three
INTELLECTUAL PROPERTY & THE FIRST AMENDMENT ..................................
San Francisco Arts & Athletics v. U.S. Olympic Committee, 483 U.S. 522 (1987) ..............
Texas v. Johnson, 491 U.S. 397 (1989) .................................................................................
H.R. 2723: A Copyright in the Flag of the United States .....................................................
Problem 3-1: Intellectual Property and the First Amendment ..............................................

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Dallas Cowboys Cheerleaders v. Pussycat Cinema, 604 F.2d 200 (2d Cir. 1979) ...............
L.L. Bean, Inc. v. Drake Publishers, Inc., 811 F.2d 26 (1st Cir. 1987) .................................
Problem 3-2: Constitutional Interpretation: Review. ............................................................

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Chapter Four
TRADEMARK: INTRODUCTION .................................................................................
Felix Cohen, Transcendental Nonsense and the Functional Approach, excerpt ..................
Trademark Basics .................................................................................................................
What are the sources of trademark law? ...............................................................................
Registered Marks ..................................................................................................................
Notes: Use-based and Intent-To-Use Applications ...............................................................
Notes: International Trademark Protection ..........................................................................
Problem 4-1 ..........................................................................................................................
Note: A Trademark Law Flow Chart ....................................................................................
Trademark Flow Chart ..........................................................................................................

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Chapter Five
SUBJECT MATTER: REQUIREMENTS FOR TRADEMARK PROTECTION ......
1.) Use as a Mark in Commerce ...........................................................................................
Use in Commerce .................................................................................................................
Use in Commerce: Free and Open Source Software ............................................................
Planetary Motion, Inc. v. Techsplosion, Inc., 261 F.3d 1188 (11th Cir. 2001) .....................
2.) Use as a Mark: Source Identification Function ...............................................................
a.) Actions of the Source ..............................................................................................
MicroStrategy, Inc. v. Motorola, Inc., 345 F.3d 335 (4th Cir. 2001) .............................
b.) Nature of the Mark: Distinctiveness and Functionality ..........................................
Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4 (2d Cir. 1976) ...............
Zatarain’s, Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786 (5th Cir. 1983) ............
Note: The Spectrum of Distinctiveness .........................................................................
Problem 5-1 ...................................................................................................................
Note: Survey Evidence in Trademark Cases .................................................................
Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159 (1995) ..............................
Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205 (2000) ..........................
Jessica Litman, “The Exclusive Right to Read,” 13 CARDOZO ARTS &
ENT. L.J. 29 (1994) .................................................................................................
TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23 (2001) ........................
Chapter Six
GROUNDS FOR REFUSING REGISTRATION ...........................................................
1.) 1052(a) ...........................................................................................................................
i.) Disparaging marks ...................................................................................................
Matal v. Tam, 137 S. Ct. 1744 (2017) ............................................................................
ii.) Immoral or scandalous marks .................................................................................
Iancu v. Brunetti, 588 U.S. ___ (2019) .........................................................................
iii.) Marks that falsely suggest a connection to persons ...............................................
iv.) Deceptive marks .....................................................................................................
2.) 1052(b) ...........................................................................................................................
3.) 1052(c) ...........................................................................................................................
4.) 1052(d) ...........................................................................................................................
5.) 1052(e) ...........................................................................................................................
i.) § 1052(e) “desceptively misdescriptive” v. § 1052(a) “deceptive” .........................
ii.) Primarily geographically descriptive, or geographically
deceptively misdescriptive .....................................................................................
iii.) Primarily merely a surname ...................................................................................

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6.) 1052(f) ............................................................................................................................
Problem 6-1 ...........................................................................................................................

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Chapter Seven
TRADEMARK INFRINGEMENT ...................................................................................
1.) Use in Commerce ...........................................................................................................
Rescuecom Corp. v. Google, Inc., 562 F.3d 123 (2d Cir. 2009) ...........................................
People for the Ethical Treatment of Animals v. Doughney, 263 F.3d 359 (4th Cir. 2001) ...
2.) Likelihood of Confusion .................................................................................................
Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d 867 (2d Cir. 1986) ...............
3.) Contributory Infringement ..............................................................................................
Tiffany Inc. v. eBay Inc., 600 F.3d 93 (2d Cir. 2010) ............................................................
Problem 7-1 ...........................................................................................................................

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Chapter Eight
DEFENSE TO TRADEMARK INFRINGEMENT: FAIR & NOMINATIVE USE .....
KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., et al.,
543 U.S. 111 (2004) .......................................................................................................
New Kids on the Block v. New America Pub., Inc., 971 F.2d 302 (9th Cir. 1992) ................
Mattel Inc. v. Walking Mountain Productions, 353 F.3d 792 (9th Cir. 2003) .......................
Playboy Enterprises, Inc. v. Welles, 279 F.3d 796 (9th Cir. 2002) .......................................
Notes: Background on Search Technology ...........................................................................
Problem 8-1 ...........................................................................................................................

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Chapter Nine
FALSE ADVERTISING, DILUTION & ‘CYBERPIRACY’ .........................................
1.) False Advertising: False or Misleading Statements of Fact ...........................................
Pizza Hut, Inc. v. Papa John’s Intern., Inc., 227 F.3d 489 (5th Cir. 2000) ...........................
2.) Dilution ...........................................................................................................................
a.) The Requirement that the Mark be Famous ............................................................
Coach Services, Inc. v. Triumph Learning LLC, 668 F.3d 1356 (Fed. Cir. 2012) .........
b.) The Requirement of “Commercial Speech”; Dilution by Tarnishment ..................
Smith v. Wal-Mart Stores, Inc., 537 F. Supp. 2d 1302 (N.D. Ga. 2008) ........................
c.) Dilution by Blurring ................................................................................................
Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 736 F.3d 198 (2d Cir. 2013) .............
Problem 9-1: Dilution of (by) Alcohol ..........................................................................
3.) “Cybersquatting” and “Cyberpiracy” ............................................................................
Problem 9-2 ...................................................................................................................
Lamparello v. Falwell, 420 F.3d 309 (4th Cir. 2005) ....................................................
Problem 9-3 ...................................................................................................................
Note: A Trademark Check List .............................................................................................

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TRADEMARK CHECKLIST ...........................................................................................

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Chapter Ten
INTRODUCTION TO COPYRIGHT: THEORY & HISTORY ....................................
Copyright and the Invention of Authorship ..........................................................................
James Boyle, Shamans, Software and Spleens: Law and the Construction of
the Information Society (Harvard Univ. Press 1997), excerpt .......................................
Three Views of Copyright (and the droits d’auteur) ............................................................
Thomas Babington Macaulay, First Speech to the House of Commons on Copyright .........
Victor Hugo, Speech to the Congress of Literary, Industrial and Artistic Property .............
Samuel L. Clemens [Mark Twain], Statement before the Committee of Patents of the
Senate and House to discuss amending the Copyright Act ............................................

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Jennifer Jenkins, In Ambiguous Battle: The Promise (and Pathos) of Public
Domain Day, 2014, 12 DUKE L. & TECH. REV. 1 (Dec. 31, 2013), excerpt ..................
Copyright’s History ..............................................................................................................
The 1976 Copyright Act ................................................................................................
Copyright Expansions and Policy .................................................................................
Copyright Office ............................................................................................................
Note: A Copyright Flow Chart .............................................................................................
Copyright Flow Chart ...........................................................................................................

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Chapter Eleven
COPYRIGHTABLE SUBJECT MATTER ......................................................................
What does copyright cover? .................................................................................................
Copyrightable Subject Matter ...............................................................................................
1.) Originality: Independent Creation and a Modicum of Creativity ..................................
Feist v. Rural Telephone Service, 499 U.S. 340 (1991) ........................................................
Matthew Bender & Co., Inc. v. West Publishing Co., 158 F.3d 674 (2d Cir. 1998) .............
Matthew Bender & Co., Inc. v. West Publishing Co., 158 F.3d 693 (2d Cir. 1998) .............
James Boyle, A Natural Experiment .....................................................................................
Problem 11-1 ........................................................................................................................
2.) The Idea-Expression Distinction ....................................................................................
Baker v. Selden, 101 U.S. 99 (1880) .....................................................................................
3.) Merger of Idea and Expression ......................................................................................
Herbert Rosenthal Jewelry Corp. v. Kalpakian, 446 F.2d 738 (9th Cir. 1971) ....................
Morrissey v. Proctor & Gamble Co., 379 F.2d 675 (1st Cir. 1967) ......................................
Kregos v. Associated Press, 937 F.2d 700 (2d Cir. 1991) .....................................................
Problem 11-2 ........................................................................................................................
4.) Useful Articles ................................................................................................................
Star Athletica v. Varsity Brands, Inc., 137 S. Ct. 1002 (2017) .............................................
5.) Methods of Operation: Introduction to Computer Software ..........................................
Lotus Development Corp. v. Borland Intern’l, Inc., 49 F.3d 807 (1st Cir. 1995) .................
Lotus Development Corp. v. Borland Intern’l, Inc., 516 U.S. 233 (1996) ...........................
Note: The Oracle v. Google Case .........................................................................................
Problem 11-3 ........................................................................................................................
6.) Fixation (Copyright Meets Software, continued) ...........................................................
MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993) ...........................
Religious Technology Center v. Netcom, 907 F. Supp. 1361 (N.D. Cal. 1995) ....................
James Boyle, “The Internet Threat,” from The Public Domain ...........................................

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Chapter Twelve
COPYRIGHT’S “REACH”: INFRINGEMENT ............................................................
Introduction ..........................................................................................................................
Problem 12-1 ........................................................................................................................
Exclusive Rights ...................................................................................................................
1.) The Idea/Expression Distinction in Infringement Analysis ...........................................
Nichols v. Universal Pictures Corp. et al., 45 F.2d 119 (2d Cir. 1930) ................................
2.) Copyright Meets Computer Software: The Infringement Edition .................................
James Boyle, “A Machine that Contains All Other Machines,” from
The Public Domain ........................................................................................................
Computer Associates v. Altai, Inc., 923 F.2d 693 (2d Cir. 1992) ..........................................
Note: Scènes à Faire .............................................................................................................
3.) Copyright in Characters .................................................................................................
Anderson v. Stallone, 11 U.S.P.Q.2d. 1161 (C.D. Cal. 1989) ...............................................

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4.) A Two-Part Test for Copyright Infringement .................................................................
Arnstein v. Porter, 154 F.2d 464 (2d Cir. 1946) ...................................................................
Dawson v. Hinshaw Music, 905 F.2d 731 (4th Cir. 1990) ....................................................
Note: Substantial Similarity ..................................................................................................
Subconscious Copying ..........................................................................................................
5.) “De minimis” Copying ...................................................................................................
Newton v. Diamond, 388 F.3d 1189 (9th Cir. 2004) .............................................................
Chapter Thirteen
LIMITATIONS ON EXCLUSIVE RIGHTS: FAIR USE ...............................................
Section 107. Limitations on exclusive rights: Fair use .........................................................
Problem 13-1 .........................................................................................................................
1.) Fair Use, Technology and Contributory Infringement ...................................................
Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984) ......................
James Boyle, The Public Domain (excerpt) .........................................................................
2.) Unpublished works, “Scoops” and Political Speech ......................................................
Harper & Row v. Nation Enterprises, 471 U.S. 539 (1985) .................................................
3.) Transformative Use, Parody, Commentary and Burdens of Proof Revisited .................
Campbell v. Acuff-Rose, 510 U.S. 569 (1994) ......................................................................
Note: Burdens of Proof (and Persuasion) .............................................................................
SunTrust Bank v. Houghton Mifflin Co., 268 F.3d 1257 (11th Cir. 2001) ............................
Problem 13-2 .........................................................................................................................
4.) Fair Use Meets Technology ............................................................................................
Sega Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1992) ...............................
Problem 13-3 .........................................................................................................................
Perfect 10 v. Google, 508 F.3d 1146 (9th Cir. 2007) ............................................................
Authors Guild, Inc. v. Google Inc., 954 F. Supp. 2d 282 (S.D.N.Y. 2013) ...........................
Google v. Oracle, 593 U.S. ___ (2021) ................................................................................
Note: Transformative Use, Appropriation Art and Mashups ................................................
5.) A Fair Use Case-Study: Multiple Copies for Classroom Use ........................................
Princeton Univ. Press v. Mich. Document Serv., Inc., 99 F.3d 1381
(6th Cir. 1996 en banc) ..................................................................................................
Problem 13-4 .........................................................................................................................
Conclusion ............................................................................................................................
Chapter Fourteen
SECONDARY LIABILITY FOR COPYRIGHT INFRINGEMENT &
SAFE HARBORS IN THE DIGITAL AGE ..............................................................
Introduction ...........................................................................................................................
Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984) ......................
(The full version of the case is on page 415)
Problem 14-1: The Napster Case. .........................................................................................
1.) The Stakes of Contributory Infringement .......................................................................
2.) Contributory and Vicarious Infringement .......................................................................
A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) ...................................
3.) Inducement Liability ......................................................................................................
MGM Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) ....................................................
Problem 14-2 .........................................................................................................................
4.) Safe Harbors: Section 512, Direct Infringement and Secondary Liability .....................
Title II: Online Copyright Infringement Liability Limitation, U.S. Copyright
Office Summary .............................................................................................................
Problem 14-3 .........................................................................................................................
Viacom International, Inc. v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012) ..............................

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Chapter Fifteen
ANTI-CIRCUMVENTION: A NEW STATUTORY SCHEME .....................................
Section 1201. Circumvention of copyright protection systems ............................................
Introduction ..........................................................................................................................
James Boyle, The Public Domain (excerpt) .........................................................................
1.) Anti-Circumvention, Fair Use, and the First Amendment .............................................
Universal City Studios, Inc. v. Corley, 273 F.3d 429 (2d Cir. 2001) ....................................
2.) Anti-Circumvention, Competition, and Consumer Choice ............................................
Chamberlain v. Skylink, 381 F.3d 1178 (Fed. Cir. 2004) ......................................................
Problem 15-1 ........................................................................................................................
3.) The Interaction between Copyright, Contracts, and the DMCA ....................................
MDY Industries, LLC v. Blizzard Entertainment, Inc., 629 F.3d 928 (9th Cir. 2010) ..........
Problem 15-2 ........................................................................................................................
Note: A Copyright Checklist ................................................................................................

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COPYRIGHT CHECKLIST .............................................................................................

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Chapter Sixteen
COPYRIGHT & STATE MISAPPROPRIATION LAW: PREEMPTION ..................
U.S. Constitution, Article 6, Clause 2 ..................................................................................
Introduction ..........................................................................................................................
Section 301.—Preemption with respect to other laws ..........................................................
Problem 16-1: Framing and Preemption. .............................................................................
International News Service v. The Associated Press, 28 U.S. 215 (1918) ...........................
(The full version of the case is on page 26)
1.) Subject Matter and General Scope: Extra Elements ......................................................
National Basketball Assoc. v. Motorola, Inc., 105 F.3d 841 (2d Cir. 1997) .........................
2.) Preemption, Misappropriation & the Fact/Expression Dichotomy ................................
Barclays Capital Inc. v. Theflyonthewall.com, Inc., 650 F.3d 876 (2d Cir. 2011) ................

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Chapter Seventeen
PATENTS: HOPES, FEARS, HISTORY & DOCTRINE ..............................................
1.) Hopes and Fears .............................................................................................................
2.) History ............................................................................................................................
3.) Patent Basics ..................................................................................................................
a.) The America Invents Act .........................................................................................
b.) The PTO Application Process .................................................................................
c.) Reading a Sample Patent .........................................................................................
d.) International Patent Law .........................................................................................
e.) Miscellanea ..............................................................................................................
Note: A Patent Eligibility Flow Chart ..................................................................................
Requirements for Patent Protection ......................................................................................

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Chapter Eighteen
PATENTABLE SUBJECT MATTER ...............................................................................
Section 101 ...........................................................................................................................
1.) Laws of Nature and Natural Phenomena ........................................................................
Diamond v. Chakrabarty, 447 U.S. 303 (1980) ....................................................................
Mayo Collaborative v. Prometheus Labs, 566 U.S. 66 (2012) .............................................
Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013) ..................
2.) Abstract Ideas, Business Methods and Computer Programs .........................................
James Boyle, The Public Domain (excerpt) .........................................................................
Bilski v. Kappos, 561 U.S. 593 (2010) ..................................................................................
Problem 18-1 ........................................................................................................................

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Alice Corp. v. CLS Bank Intern’l, 573 U.S. 208 (2014) .......................................................
Note: “Can you still get everything you want at Alice’s restaurant?” ..................................
Problem 18-2 .........................................................................................................................

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Chapter Nineteen
REQUIREMENTS FOR PATENT PROTECTION: UTILITY .....................................
1.) ‘Research Intermediaries’ and Hunting Licenses ...........................................................
Brenner v. Manson, 383 U.S. 519 (1966) .............................................................................
2.) Genetic Engineering & Utility ........................................................................................
USPTO Utility Examination Guidelines ...............................................................................
3.) Utility in the Court of Appeals for the Federal Circuit ...................................................
In re Fisher, 421 F.3d 1365 (Fed. Cir. 2005) ........................................................................
Problem 19-1 .........................................................................................................................

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Chapter Twenty
REQUIREMENTS FOR PATENT PROTECTION: NOVELTY ..................................
35 U.S.C. 102 Conditions for patentability; novelty. ...........................................................
Introduction ...........................................................................................................................
1.) Novelty: Basics ...............................................................................................................
Gayler v. Wilder, 51 U.S. 477 (1850) ...................................................................................
2.) Novelty: Novel to whom? ..............................................................................................
3.) Novelty: Anticipation of Every Element ........................................................................
Coffin v. Ogden, 85 U.S. 120 (1873) ....................................................................................
Verdegaal Brothers, Inc. v. Union Oil Co. of Calif., 814 F.2d 628 (Fed. Cir. 1987) .............
4.) Novelty: Inherency .........................................................................................................
In re Cruciferous Sprout Litigation, 301 F.3d 1343 (Fed. Cir. 2002) ...................................
5.) Statutory Bar: Public Use ...............................................................................................
Pennock v. Dialogue, 27 U.S. 1 (1829) ................................................................................
6.) Statutory Bar: The Experimental Use Exception ...........................................................
City of Elizabeth v. Pavement Co., 97 U.S. 126 (1877) ........................................................
Problem 20-1 .........................................................................................................................

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Chapter Twenty-One
NON-OBVIOUSNESS ........................................................................................................
Introduction ...........................................................................................................................
Graham v. John Deere Co., 383 U.S. 1 (1966) .....................................................................
1.) A Four Step Test for Obviousness ..................................................................................
Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530 (Fed. Cir. 1983) ......................................
2.) The Scope of Prior Art ....................................................................................................
In re Carl D. Clay, 966 F.2d 656 (Fed. Cir. 1992) ................................................................
3.) Burden of Proof and “Obvious to Try” ...........................................................................
In re Bell, 991 F.2d 781 (Fed. Cir. 1993) ..............................................................................
4.) ‘These Are Not the PHOSITA’s you’ve been looking for. . . .’ ......................................
Kimberly-Clark v. Johnson & Johnson, 745 F.2d 1437 (Fed. Cir. 1984) .............................
Dan L. Burk and Mark A. Lemley, Is Patent Law Technology-Specific?
17 BERKELEY TECH. L.J. 1155 (2002) ...........................................................................
Problem 21-1 .........................................................................................................................
Note: A Patentability Checklist .............................................................................................

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PATENTABILITY CHECKLIST ......................................................................................

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Chapter Twenty-Two
TRADE SECRECY & PREEMPTION ............................................................................
Introduction ...........................................................................................................................

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T ABLE OF C ONTENTS

The Restatement, Uniform Trade Secrets Act, and Defend Trade Secrets Act ....................
Restatement (First) of Torts, Section 757 (1939) .................................................................
Uniform Trade Secrets Act (with 1985 Amendments) ..........................................................
Defend Trade Secrets Act of 2016 ........................................................................................
Preemption ............................................................................................................................
Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964) ...................................................
Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974) ......................................................
Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989) .................................
Improper Means ....................................................................................................................
E.I. du Pont de Nemours & Co. v. Christopher, 431 F.2d 1012 (5th Cir. 1970) ..................
Reasonable Efforts to Preserve Secrecy ...............................................................................
Rockwell Graphic Systems, Inc. v. DEV Industries, Inc., 925 F.2d 174 (7th Cir. 1991) .......
“Are Trade Secrets ‘Property’?” Why Do You Ask, Pray Tell? ...........................................
E.I. du Pont de Nemours Powder Co. et al. v. Masland et al., 244 U.S. 100 (1917) ...........
Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) ............................................................
Problem 22-1: Trade Secrets, Misappropriation & Preemption ...........................................

773
774
775
777
778
779
779
784
786
786
789
790
794
794
795
797

Chapter Twenty-Three
A CREATIVE COMMONS? SUMMARY AND CONCLUSION .................................
James Boyle, “A Creative Commons,” from The Public Domain .......................................

799
802

A Preface: Lessons from the Pandemic

This edition was written during a pandemic. COVID-19 spread around the world, causing
death and illness and changing bits of our lives forever. We saw friends and relatives lose
their loved ones or fall sick themselves. We saw global tragedy, exacerbated by global
inequality. We saw heroes and fools, brilliant innovation and blundering idiocy. Most of
all, we sat in our houses, staring at our little screens, whether they were bringing us law
school classes over Zoom, Queen’s Gambit, or the latest scientific research.
Something else remarkable happened during that interminable and tragic year. Beyond the pathos of loss and the bathos of the trivia with which we distracted ourselves,
there was an intellectual sea-change. For much of 2020, a large percentage of the world’s
population focused on the kinds of issues that intellectual property scholars obsess about
every day. How do we incentivize research into, and production of, vaccines against this
disease? Remember that the incentives may range from the pursuit of scientific fame or
the urgings of the conscience, to the politician’s desire to give voters what they want, or
the drug company’s pursuit of future profits.
What is the role of the public or private sector? Will research, manufacture and
delivery—shots into arms—go fastest if it is fueled by “push” or “pull”? Ex ante grants
from governments and philanthropists or post hoc property rights over discoveries? More
specifically, what aspects of knowledge and discovery should be available to all, “free as
the air to common use,” so that an entire global community can build upon them? What
aspects must be fenced off, covered by exclusive rights such as patents, protected as trade
secrets, or merely sequestered in copyrighted scientific journal articles, sitting behind
paywalls? Will exclusive rights lure biotech startups and drug companies to focus on this
problem, enticed by the promise of a lucrative monopoly were they to succeed? The central issue of intellectual property is the balance between open and closed, public domain
and private right. The pandemic added the pressing humanitarian issues of global public
health to the technocratic questions of optimum innovation policy. What is the right balance between encouraging innovation through exclusion and spreading its results
cheaply to the world? This question was particularly acute in a context where leaving a
significant proportion of the world unvaccinated is a threat to everyone, even the vaccinated, because of the possibility of mutation.
Should we have a global moratorium over the enforcement of patents over COVID
vaccines and therapies? Or will that actually slow down the very process it is supposed
to help, either because it scrambles the incentive system or because the know-how and
tacit knowledge required to make the new vaccines goes far beyond the patents and is
almost impossible to pass on, even if its possessors were willing to do so? If that were
true, then the ability effectively to make the vaccine will remain in Europe and the US
whatever the legal status of the patent rights. But is it true? And how can we know when
much of that technology is secret? The more one knows, the more numerous the questions become.
Today’s struggles do not take place in a vacuum; they are shaped by earlier decisions,
inflection points and design choices about institutions and architecture. Intellectual property law and policy played a major role in those choices. The incredibly rapid sharing of
the COVID-19 genome, which jump-started the vaccine development process, took place

x

A P REFACE : L ESSONS FROM THE P ANDEMIC

against the background of the earlier sequencing of the human genome. At the time, efforts
were made to “privatize” aspects of that genomic map. Those efforts were rebuffed, for
reasons that you will study in this class, and the eventual public-private partnership that
released the first draft of the human genome did so openly. Both the map and the tools used
to draw it were widely shared. That would turn out to be vital in the vaccine development
process, but so would the long-pursued private efforts to create mRNA vaccines, which
overcame daunting technical obstacles to produce an incredibly promising new technology,
the uses for which go far beyond COVID. To pick another example, we take for granted
the existence of a network—the internet—and the law and custom of open access to scientific literature, particularly when it lays out the results of government funded research. Both
were vital in the accelerated process of scientific development but, as you will learn, neither
was inevitable and both faced (and still face) considerable opposition.
These questions are exactly the types of issues intellectual property scholars study.
They are not the only issues you will focus on in this course—far from it, and this should
be reassuring to those of you who have been (falsely) told that intellectual property law
requires a technical or scientific background.
You will be addressing whether a satirical mashup infringes the copyright over a
song and whether a parodic website attacking a corporation or public figure commits
trademark infringement. Does the United States Olympic Committee get to prohibit the
holding of a “Gay Olympic games”? Is it legal to “jailbreak” your iPhone, so that you can
use apps that Apple did not approve? You will learn about attempts to claim property rights
over the text of the law, human genes, and the shape and color of a banana costume. On
the other end of the spectrum, you will learn about the creation of privately constructed
commons where the creators have chosen to grant their users rights to copy and even
modify the work; using private intellectual property rights to create a space of public freedom. These include free and open source software such as Android, Chrome, and Linux.
The authors of that software may range from scientists employed by major corporations
to private individuals contributing to the project for the love of creation or the hope of
professional recognition. But this intellectual shared space also includes Creative Commons licensed content, from Wikipedia and open access scientific literature to the textbook you are reading at this moment. You will see fights over intellectual property rules
significantly shape the architecture of the Internet that is such a central and unquestioned
feature of your lives. You will see the Mattel corporation attempt to stop a conceptual
artist from taking pictures of Barbie “being attacked by various vintage household appliances,” and work out whether it is legal to use bots to play the early levels of World of
Warcraft. You will read Mark Twain arguing for perpetual copyright, Macaulay describing
copyright as a tax on readers for the benefit of writers and Victor Hugo explaining how
the rights of authors are central to free speech and to an intelligentsia that is not dependent
on the state. Free speech, transgressive art, innovation and economic growth, the ecologies
of creativity from cooking and stand-up to software, literature and music. All of this will
be grist to our mill.
Our point here is simple. The pandemic shows us how vital these questions are and
how important it is to get them right. But we also hope you can get a hint of how fascinating they can be. We feel privileged to study them. We hope this book gives you some
sense of why, and how, that might be.

Introduction

This is an introduction to intellectual property law, the set of private legal rights that allows individuals and corporations to control intangible creations and marks—from logos
to novels to drug formulæ—and the exceptions and limitations that define those rights. It
focuses on the three main forms of US federal intellectual property—trademark, copyright
and patent, with a chapter on trade secret protection—both Federal and state. Despite that
central focus, many of the ideas discussed here apply far beyond those legal areas and far
beyond the law of the United States. The cases and materials will discuss the lines that the
law of the United States draws; when an intellectual property right is needed, how far it
should extend and what exceptions there should be to its reach. But those questions are
closely linked to others. How should a society set up its systems for encouraging innovation? How should citizens and policy makers think about disputes over the control of culture and innovation? How do businesses re-imagine their business plans in a world of
instantaneous, nearly free, access to many forms of information? How should they do so?
And those questions, of course, are not limited to this country or this set of rules. They
should not be limited to the law or lawyers, though sadly they often are.
A word on coverage: An introductory class on intellectual property simply does
not have time or space to cover everything. This course is designed to teach you basic
principles, the broad architectural framework of the system, the conflicting policies and
analytical tools that will be useful no matter what technological change or cultural shift
tomorrow brings. Imagine the lawyer who started practicing in the late 1970s and had to
deal with the rise of cable TV, a global internet, digital media, peer to peer systems,
genetic engineering, synthetic biology . . . but also with viral marketing, the culture of
“superbrand” identity, cybersquatting and social media. You will be that lawyer, or that
citizen. Your world will change that much and you will need the tools to adapt.
To achieve this goal—a “future-proofed” grasp of the basic principles and tensions
of the system—the book has to omit large swaths of detail. For example, standard form,
“click to accept,” contracts and licenses are extremely important in the world of digital
commerce, but will be covered only to the (important) extent they intersect with intellectual property law. Even within the topics that are covered, the approach of the class is
highly selective. We will cover the basic requirements for getting a trademark, and the
actions that might—or might not—infringe that right. But we will not cover the complexities of trademark damages and injunctions, international trademark practice or the
fine detail of the ways that Federal and state trademark law interact. Copyright law is full
of highly specialized provisions—applying special rules to cable television stations or
music licenses, for example. We will be mentioning these only in passing. Similarly, patent law is an enormously complex field; there are entire courses just on the details of
patent drafting, for example, and there is a separate “patent bar” exam for registered
patent attorneys and agents. This class will touch only on the basics of patentable subject
matter, and the requirements of utility, novelty, and non-obviousness.
As we will explain in a minute, one feature of this book makes this selectivity less
of a problem. Because this is an “open” casebook, an instructor can take only those chapters that he or she finds of interest and can supplement, delete or edit as she wishes.

xii

I NTRODUCTION

Comparison of the Three Main Forms of Federal Intellectual Property
Constitutional
and Statutory
Basis
Subject Matter

Requirements
for Eligibility

Rights

Duration
How Rights
are Procured

Examples of
Limitations
and Exceptions

TRADEMARK
Commerce clause,
Lanham Act. (There are
also state trademarks.)
Word, phrase, symbol,
logo, design etc. used in
commerce to identify
the source of goods
and services

COPYRIGHT
IP Clause, Copyright
Act

PATENT
IP clause, Patent Act

Creative works—for
example, books, songs,
music, photos, movies,
computer programs

Not generic (or merely
descriptive without secondary meaning), identifies source of product
or service,
used in commerce
Basic trademark right
only vis a vis a particular good or service.
Bass for beer, not ownership of word “Bass.”
Prevent others from using confusingly similar
trademarks; for famous
marks, prevent others
from “diluting” the
mark. Also prohibitions
against false or misleading advertising.
If renewed and continually used in commerce,
can be perpetual.
USPTO trademark registration process
for ® status, though
common law rights
are recognized absent
registration
Genericity, nominative
fair use, parodic use

Original expression,
fixed in material form

Inventions—new
and useful processes,
machines, manufactured articles, compositions of matter. Not
abstract ideas or products/laws of nature
Useful, novel and nonobvious to a person
having ordinary skill in
the art (PHOSITA)

Exclusive rights to
copy, distribute, make
“derivative works”,
publicly perform and
publicly display. Possibly new right to stop
circumvention of digital
‘fence’ protected ©
works.

Exclude others from
making, using, selling
or importing invention

Life plus 70 years; 95
years after publication
for corporate works
Creation and fixation
in a tangible medium;
registration is not required to get copyright
(but is required for suit
to enforce)
Idea and fact/expression
distinction, scènes à
faire, fair use, first sale

20 years for utility patents
USPTO patent application process

Abstract knowledge
in patent application
disclosed freely. Subsequent inventors can
“build on” patented invention and patent result without permission.
Both inventors must
consent to market
resulting compound
invention.

Basic Themes: Three Public Goods, Six Perspectives

xiii

Basic Themes: Three Public Goods, Six Perspectives
This book is organized around a debatable premise; that it is useful to group together
the three very different types of property relations that comprise Federal intellectual property law—trademark, copyright and patent. A chart that summarizes their main features is
on the previous page. Obviously, trademarks over logos are very different from copyrights
over songs or patents over “purified” gene sequences. The rules are different, the constitutional basis changes, the exceptions are different and there is variation in everything
from the length of time the right lasts to the behavior required to violate or trigger it. Why
group them together then? The answer we will develop depends on a core similarity—the
existence of a “good”—an invention, a creative work, a logo—that multiple people can
use at once and that it is hard to exclude others from. (Economists refer to these as “public
goods” though they have more technical definitions of what those are.) Lots of people can
copy the song, the formula of the drug, or the name Dove for soap. But the approach in
this book also depends on the differences between the goals of these three regimes and the
rules they use to cabin and limit the right so as to achieve those goals. The idea is that one
gains insight by comparing the strategies these very different legal regimes adopt. The
proof of that pudding will be in the eating. Our readings will also deal with the claim that
the term “intellectual property” actually causes more harm than good.
This book is built around six perspectives. Some are introduced as separate chapters, while others are woven into the materials and the problems throughout the entire
class. The first deals with the main rationales for (and against) intellectual property. The
second focuses on the constitutional basis for, and limitations on, that property in the
United States. The third is the substance of the course; the basic doctrinal details of trademark, copyright and patent, and the broad outlines of trade secrecy, which is protected
both by state rules and a new Federal cause of action. The fourth concentrates on the way
that intellectual property law reacts dynamically to changes in technology. We will focus
on what happens when trademark law has to accommodate domain names, when copyright—a legal regime developed for books—is expanded to cover software and when
patent law’s subject matter requirements meet the networked computer on the one hand
and genetic engineering on the other. In particular, the copyright portion of the course,
which makes up the largest portion of the book, will detail extensively how judges and
legislators used the limitations and exceptions inside copyright law to grant legal protection to those who create software, while trying to minimize anti-competitive or monopolistic tendencies in the market. The fifth deals with the metaphors, analogies, similes
and cognitive “typing” we apply to information issues. This is an obviously artificial
property right created over an intangible creation; the way that the issue is framed—the
baselines from which we proceed, the tangible analogies we use—will have a huge influence on the result. Finally, the conclusion of the course tries to synthesize all of these
perspectives to point out prospects, and guiding principles, for the future.

An Open Course Book?
This book is made available under a Creative Commons Attribution, Non-Commercial, Share-Alike 3.0 Unported License. Later in the semester, you will be able to
engage in learned discussion of this arrangement. You will be able to work out what the
copyright on the book does and does not cover (hint, Federal legal materials are in the
public domain), why and how the license is enforceable, and what rights you would have
even in the absence of a license (such as the right to quote or criticize). At the moment,
all you need to know is this. You are free to copy, reprint or reproduce this book in whole

xiv

I NTRODUCTION

or part, so long as you attribute it correctly (directions are given on the copyright page)
and so long as you do not do so commercially, which we interpret to mean “for a profit.”
In other words, you can print copies and distribute them to your students or your friends,
who apparently have very geeky interests, at the cost of reproduction, but you may not
make a competing commercial edition and sell it for a profit or use it as a draw to promote
your own commercial textbook business. You can also modify this book, adding other
material, or customizing it for your own class, for example. But if you do modify the
book, you must license the new work you have created under the same license so that a
future user will receive your version with the same freedoms that you were granted when
you received this version.
Why do we do this? Partly, we do it because we think the price of legal casebooks
and materials is obscene. Law students, who are already facing large debt burdens, are
required to buy casebooks that cost $150–$200, and “statutory supplements” that consist
mainly of unedited, public domain, Federal statutes for $40 or $50. This is not a criticism
of casebook authors, but rather of the casebook publishing system. We know that putting
together a casebook is a lot of work and can represent considerable scholarship and pedagogic innovation. We just put together this one and we are proud of it. But we think that
the cost is disproportionate and that the benefit flows disproportionately to conventional
legal publishers. Some of those costs might have been justifiable when we did not have
mechanisms for free worldwide and almost costless distribution. Some might have been
justifiable when we did not have fast, cheap and accurate print on demand services. Now
we have both. Legal education is already expensive; we want to play a small part in diminishing the costs of the materials involved.
We make this casebook available in two forms. First, it can be digitally downloaded
for free. No digital rights management. Second, it is available in a low cost but high quality
paperback version for about $35—which given the possibility of resale, might make it an
environmentally attractive alternative to printing out chapters and then throwing them
away. The companion statutory supplement is available under a similar arrangement—
though under a license that is even more open. We also hope both of these options are
useful for those who might want to use the books outside the law school setting. The casebook and the statutory supplement will be available for a combined price around $50.
Those who do not want, or cannot afford, to pay that price can use the free digital versions.
The price of this book is intended to be a demonstration of how unreasonable casebook costs are. We are making the digital version freely available and trying to price the
paper version inexpensively, but we entirely support those authors who wish a financial
reward. We calculate that they could actually set the price of an 825 page book $100
cheaper than the average casebook today (albeit in paperback) and still earn a
comparable royalty per book to what they currently earn. For example, in 2016, Professors Mark Lemley, Peter Menell, and Robert Merges began self-publishing their excellent casebook on intellectual property, Intellectual Property in the New Technological
Age, which allowed them to make it far less expensive.
Authors could even make the digital version freely available and do nicely on print
sales, while benefiting in terms of greater access and influence. Our point is simply that the
current textbook market equilibrium is both unjust and inefficient. Students are not the only
ones being treated unfairly, nor is the market producing the variety or pedagogical inventiveness one would want. One practical example: using current print on demand
technology, images are as cheap as words on the page. This book has many of them—from
comic book pages illustrating the doctrine, to flow charts, to pictures that give context to the
cases. It is useful to see the Lotus v. Borland menus, the “food-chain Barbie” pictures, the

Structure and Organization

xv

actual article from Harper & Row v. Nation Enterprises, to see the logos at stake in the
trademark cases, the allegedly copyrighted sculptures on which people park their bikes, or
a graphic novel version of the de minimis controversy in musical sampling. Our point is that
standard casebooks are not just vastly overpriced, they are awkward, inflexible, lacking
visual stimulus, incapable of customization and hard to preview and search on the open web.
Personally, we do not merely wish to lower the costs of educational materials but,
where possible, to make those materials open—a different thing. Open licenses and freely
downloadable digital versions make the digital version of educational materials freely
available to the world, not just in terms of zero price, but in terms of legal freedoms to
customize, translate, edit and combine. We are not the first to try and make open source
educational material or even casebooks. We would like to thank the good folk at Creative
Commons and MIT Open Courseware, Barton Beebe, Bryan Frye, Lydia Loren, CALI’s
eLangdell, Jordi Weinstock, Jonathan Zittrain, and the H20 project at Harvard for giving
us ideas and inspiration.
We also hope that the inexorable multiplication of projects such as these will be an
aid to those still publishing with conventional textbook publishers. To the casebook author
trapped in contracts with an existing publishing house: remember when you said you
needed an argument to convince them to price your casebook and your supplement more
reasonably? Or an argument to convince them to give you more options in making digital
versions available to your students in addition to their print copies, but without taking away
their first sale rights? Here is that argument. Traditional textbook publishers can compete
with free. But they have to try harder. We will all benefit when they do.
We have another goal, one that resonates nicely with the themes of the course.
Most authors who write a casebook feel duty-bound to put in a series of chapters that
make its coverage far more comprehensive than any one teacher or class could use. Jane
Scholar might not actually teach the fine details of statutory damages in copyright, and
whether they have any constitutional limit, but feels she has to include that chapter because some other professor might think it vital. As a result, the casebook you buy contains
chapters that will never be assigned or read by any individual instructor. It is like the
world of the pre-digital vinyl record. (Trust us on this.) You wanted the three great songs,
but you had to buy the 15 song album with the 9 minute self-indulgent drum solo. This
book contains the material we think vital. For example, it has introductory sections on
theoretical and rhetorical assumptions that we think are actually of great practical use. It
spends more time on constitutional law’s intersection with intellectual property or the
importance of limitations and exceptions to technological innovation than some other
books, and less on many other worthy topics. Because of the license, however, other
teachers are free to treat the casebook in a modular fashion, only using—or printing—
the chapters, cases and problems they want, adding in their own, and making their own
“remix” available online as well, so long as they comply with the terms of the license.

Structure and Organization
A word about the organization of the book: First, each chapter has a series of problems. The problems bring up issues that we want you to think about as you read the materials. Some are intended to “frame” the discussion, others to allow you to measure your
mastery of the concepts and information developed, or to deepen your understanding of the
analytical and argumentative techniques the book sets forth. The problems are covered under the same license—you should feel free to extract them, even if you do not use the book.
Second, in the copyright section, we draw on material from our educational graphic novel
Theft!: A History of Music to present some of the doctrinal material in a memorable and

xvi

I NTRODUCTION

visually interesting manner. Third, each major section of the book—trademark, copyright,
patent—is preceded by a flow chart to show students how the whole jigsaw puzzle fits together. The flow charts can also be used to work through the materials in the problems.
Then, at the end of the section, we provide a checklist of issues that the casebook has dealt
with; students can use these for outlining or simply refreshing their memories.
The open licensing arrangement of the book means that we include little material
that is not either public domain, written by the authors themselves, or available under a
Creative Commons license. But since that same licensing arrangement allows for near infinite customization by users, we hope that is not too much of a problem. We include short
excerpts from The Public Domain—also Creative Commons licensed and freely downloadable—with hyperlinks to the full versions of those readings. We use it as a companion
text in the course. The excerpts provide historical and theoretical background keyed to the
discussion and the problems. Instructors and readers who wish to omit those readings, or
to insert other secondary materials, should just ignore them.
Some acknowledgements: We would like to thank Mr. Balfour Smith, the coordinator of the Center for the Study of the Public Domain at Duke Law School for his tireless
editorial efforts, for navigating the publishing process and for his nifty cover designs.
We would like to thank generations of students—not only at Duke—for patiently
teaching their teachers what works and what does not. We would like to thank our
predecessors for teaching us how hard it is to make a good casebook and how important
one can be. Particular thanks in that regard go out to Julie Cohen, Rochelle Dreyfuss,
Paul Goldstein, Edmund Kitch, Roberta Kwall, David Lange, Mark Lemley, Jessica
Litman, Robert Merges, and Peter Menell. Special thanks to Dana Remus, Joseph
Blocher, James Grimmelman, Kathy Strandburg, Amy Kapczynski, Josh Walton, and
David Dame-Boyle for being test readers or intrepid early adopters. Finally, James thanks
Jennifer and Jennifer thanks James. Aww.
If you adopt the book, or any part of it, please let us know! Comments to boyle
[AT] law.duke.edu are always welcome, particularly if you can tell us why certain
chapters or exercises were helpful or not helpful to you as an instructor or student, or
describe a particular customization. Free digital versions of the latest edition will be
available at https://law.duke .edu/cspd/openip/.
Note on the Fifth Edition: This edition introduces a new set of tools for teachers and
students; flowcharts before and checklists after each doctrinal subject. Teaching remotely
during the pandemic, we found that this helped the students structure their analysis and
get beyond the elements of a cause of action to more sophisticated topics. Substantively,
we have added the landmark Google v. Oracle decision and notes on recent appellate fair
use decisions. There are new notes on Georgia v. PRO, dealing with the copyrightability
of state law, and PTO v. Booking.com on genericity in trademarks. We explained the recently-passed CASE Act, which introduces a small claims procedure for copyright infringement, and updated the empirical analysis of the patent system. We added many
images and comic book pages to illustrate the material. Finally, and perhaps most importantly, we added a preface explaining how the pandemic showed the importance—but
also the intellectual fascination—of the questions this course covers.
James Boyle and Jennifer Jenkins
Durham, NC, July 2021

CHAPTER ONE

The Theories Behind Intellectual Property

Every student is familiar with the theoretical throat-clearing that often appears at the beginning of a course—“what do we really mean by inorganic chemistry?”—never to reappear
in either the student’s understanding of the materials or on the exam. It needs to be stressed
that this chapter is not like that at all. The theories that explain the justifications for and
limitations on intellectual property get applied every day in intellectual property disputes.
The parties themselves have to decide whether or not to object to a particular use or benefit
that flows from their creations. They have to decide how to structure their activities so as to
make a profit or achieve some social goal. In both cases, the analysis of the costs and benefits
of exclusion and the economics of information covered in the first section of the course are
central to the activity. And finally, if a legal dispute arises, the theoretical ideas behind intellectual property are very much part of the picture. As a result, this chapter is devoted to the
theories behind intellectual property and the ways those theories play out in practice.
Framing: The first theme is the way that intellectual property issues are “framed,” the
analogies, metaphors and moral baselines that define the discussion. Social, regulatory
or legal disputes about information issues do not arrive in popular consciousness or courtroom automatically “preformatted.” We have many strong, and sometimes contradictory,
sets of normative assumptions about information. It plays a vital role in:
• our conception of privacy, a term we assume to begin with informational control, the ability to control the flow of information about ourselves, for reasons
both dignitary and instrumental.
• our conception of the public sphere of speech, free expression and debate; from
“sunlight is the best disinfectant” to “the marketplace of ideas,” our baseline
when thinking about issues we frame as “speech issues” is that the free flow
of information is both right and good.
• our conception of the efficient, competitive market. Precisely because individual informed choice is what leads to aggregate overall efficiency, in the perfect
market, information is free, instantaneous and perfect.
• our conception of information property—the intangible information or innovation goods that I should be able to own and control, either because that property right will encourage others to socially useful innovative activities, or
because we think that in some deontological—duty-based—sense, the information is simply mine—for example, because I worked hard to generate it.
Notice how these implicit normative frames are (often) at odds with each other. Privacy is a value that will not always further the goal of free expression, and vice versa.
Think of the European “right to be forgotten” on search engines. (Though privacy may also
reinforce free speech—the anonymous whistleblower, the secret ballot.) The search for
costless instantaneous information-flow will conflict fundamentally with the postulate that
someone has to be paid for generating that information in the first place, perhaps by being
granted a property right to control that information—a contradiction that you will find to
be central in this course. And the conflicts are not just binary, or between those pairs alone.
It would be one thing if we conducted our debates by saying “should we think of this

2

T HE T HEORIES B EHIND I NTELLECTUAL P ROPERTY

with our ‘information property,’ or our ‘costless information’ glasses on?” “Speech or privacy?” But the rhetorical frames are often implicit rather than explicit. We characterize some
new issue or technology using similes and metaphors that hark back to the past, each of
which is freighted with normative associations that conjure up one or other of these frames.
Is an online social network a private mall, a local newspaper, a public park or a common
carrier like the phone company? Is a search engine just like the travel guide book that maps
the city—good neighborhoods and bad—or like the guy who takes a cut for steering you
towards the man with the illegal drugs? Speech? Property? Privacy? Competition? By being
aware of the implicit messages and associations that come with our metaphors and our framings, we can challenge our unreflective way of classifying the issue, alerting ourselves to
nuances we might otherwise have missed. But these framings can also be used as a matter
of advocacy, whether in court or in the media, thoroughly transforming the way a question
is perceived, regulated or decided.
Justifying Intellectual Property: The second theme goes to the ‘why,’ ‘when,’ and ‘how
much’ of intellectual property.
Can a scriptwriter get a copyright on the stock plot themes used in spy movies—
spies with silenced pistols, car chases, glamorous assassins in tight clothing? What if he
were the first person to come up with those particular plot lines? Does the answer to that
question have to do with how detailed the plot line is, or does it have to do with the effect
that copyrighting stock plot lines would have on film? Or both?
Does ownership of a copyright in software give you the right to forbid another
person from “decompiling” that software—reverse engineering it so that he can build a
compatible or “interoperable” program? Should it give you the right to forbid that activity? Does the answer to those questions depend on whether an unauthorized copy is created while the program is being reverse engineered? Or does it depend on the effect that
prohibiting reverse engineering would have on the software market? Or both?
Trademark gives you the exclusive right to use a name or symbol in connection with
a particular kind of commercial activity—Delta for airlines (or Delta for faucets, or coffee—at least in Europe.) Bass for ale (or Bass for electronics.) Prius for hybrid cars. Should
you be able to prohibit a competitor from using your trademarked name in comparative
advertising? “Toyota Prius owners will find that the Nissan Leaf is superior to their existing
hybrid. It is 100% electric! Say ‘no’ to the gas guzzling Prius and ‘yes’ to Leaf!”
Can you patent an algorithm that can be used to “hedge” or guard against risk in
the energy market? Does that depend, should that depend, on whether the algorithm is
implemented in a computer or does it depend on some theory about leaving free certain
raw material for the next generation of inventors? On whether or not we need patents to
encourage the development of new business methods?
We cannot answer all those questions here—that will take the entire course. But
discussing them would be hard without some grasp of the ideas we will discuss in the
first section.
Three linked questions will come up as we consider these issues.
• If I put my labor into gathering some information or developing some innovation, do I presumptively gain a right over that information or innovation? (And
if so, how extensive a right?)
• Should we view intellectual property rights in terms of their utilitarian effects
rather than on some notion of labor and value? In other words, should we grant
rights when that is necessary to produce more innovation and information, or
to facilitate signaling between producers and consumers, but only then and

The Theories Behind Intellectual Property

3

only to that extent?
Every day our activities produce effects on others. When we are not forced to
internalize those effects, we call them externalities. Some of those externalities
are negative (pollution, for which the factory does not have to pay) and others
positive (the great TV chef who starts a cooking craze that ends up making
most food served in a culture better, including food served by and to people
who never watched the show). Many intellectual property claims have to do
with positive externalities. Someone says “you have benefited from what I did!
Therefore I should be able to control your activity, or at least get paid!” When
do we find these arguments convincing and when not? Why?
Those are our three basic questions about intellectual property.
Let us now turn back to the preliminary step, the framing of information issues in
the first place.
•

P ROBLEM 1-1
F RAMING .
Every time someone uses a phone, the phone company necessarily ends up with a lot
of information: what number was called, when it was called, how long the call lasted.
In the eloquent regulatory parlance of telecommunications law this data is called Customer Proprietary Network Information or CPNI.
This data accretes over time, so that the phone company can see how often a particular customer calls a particular number, and when he or she typically does so and so
on. What’s more, this information can be cross-indexed with other sources of information
or other databases. On the macro level, calls can be grouped by area code, which gives a
rough guide to the geographical location of the person called, though less so in the era of
cell phones. On the micro level, numbers can be identified by reverse lookup, so that the
company—or the entity it provides this information to—can identify exactly who or what
is being called: your mother, your local market, your hairdresser.
CPNI is important for another reason. By having unrestricted ability to use their
own existing customer data, incumbent telephone companies have an advantage over
startups that want to break into the market. The advantage comes in two related areas.
First, marketing. Because they have the CPNI of their own customers, telephone companies know precisely the people to whom they might market a “friends and family
plan”, or a long distance plan, a big data plan, or an international calling plan with unlimited talk time. Caller data identifies the chatty out-of-stater, the lonely expatriate, or
the small town queen bee. It is a treasure trove for the marketing of the plans that would
appeal to each—rather than a confusing welter of options broadcast to the world at large.
Studies have shown that consumers respond much more positively to this kind of targeted advertising rather than the “shotgun” approach that those seeking to enter the market must use. Second, CPNI is also (though telephone companies do not typically stress
this fact) extremely valuable in pricing such offerings. Willingness to pay is best gleaned
from past behavior and CPNI reveals past behavior. For these two reasons, new telephone companies have claimed incumbents’ ability to mine their own customers’ data
is a significant barrier to market-entry.
We have mentioned four “frames” into which information issues can be placed.
i.) Information as that which must be controlled to protect privacy.

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T HE T HEORIES B EHIND I NTELLECTUAL P ROPERTY

ii.) Perfect information—free, instant and available to all—as a necessary
condition of a competitive market.
iii.) Information as something that can be owned, as property.
iv.) Information as that which must circulate freely in the service of freedom of expression and free speech—both political and commercial.
Assume that Congress gave the FCC authority to regulate telephone companies’
use of CPNI. What framings would you suggest in order to make the strongest
case for regulating use of CPNI tightly? (For example, requiring that consumers
“opt in” to having their information used for any purpose other than billing and
solving technical problems.) What kinds of anecdotes or analogies might you use
to strengthen the salience and appeal of those ways of framing the problem? If
you were a lawyer or strategist for the telephone companies, how would you respond? What alternative framings, or moral “baselines” could you provide?
What analogies or anecdotes would you use to strengthen these frames or baselines? Without getting into the details of administrative law, how might you
frame the broad outlines of a court challenge to any such regulations?

James Boyle, The Apple of Forbidden Knowledge

Financial Times, August 12, 2004

You could tell it was a bizarre feud by the statement Apple issued, one strangely at odds
with the Palo Alto Zen-chic the company normally projects. “We are stunned that RealNetworks has adopted the tactics and ethics of a hacker to break into the iPod, and we
are investigating the implications of their actions under the DMCA [Digital Millennium
Copyright Act] and other laws.” What vile thing had RealNetworks done? They had developed a program called Harmony that would allow iPod owners to buy songs from
Real’s Music Store and play them on their own iPods. That’s it. So why all the outrage?
It turns out that this little controversy has a lot to teach us about the New Economy.
Apple iPods can be used to store all kinds of material, from word processing
documents to MP3 files. If you want to use these popular digital music players to
download copy-protected music, though, you have only one source: Apple’s iTunes
service, which offers songs at 99 cents a pop in the US, 79p in the UK. If you try to
download copy-protected material from any other service, the iPod will refuse to play it.
That has been the case until now. Real’s actions would mean that consumers had two
sources of copy-protected music for their iPods. Presumably all the virtues of competition, including improved variety and lowered prices, would follow. iPod owners would
be happy. But Apple was not.
The first lesson of the story is how strangely people use the metaphors of tangible
property in new economy disputes. How exactly had Real “broken into” the iPod? It
hadn’t broken into my iPod, which is after all my iPod. If I want to use Real’s service to
download music to my own device, where’s the breaking and entering? What Real had
done was make the iPod “interoperable” with another format. If Boyle’s word processing
program can convert Microsoft Word files into Boyle’s format, allowing Word users to
switch programs, am I “breaking into Word”? Well, Microsoft might think so, but most of
us do not. So leaving aside the legal claim for a moment, where is the ethical foul? Apple
was saying (and apparently believed) that Real had broken into something different from

The Theories Behind Intellectual Property

5

my iPod or your iPod. They had broken into the idea of an iPod. (I imagine a small, Platonic white rectangle, presumably imbued with the spirit of Steve Jobs.)
Their true sin was trying to understand the iPod so that they could make it do things
that Apple did not want it to do. As an ethical matter, is figuring out how things work, in
order to compete with the original manufacturers, breaking and entering? In the strange
nether land between hardware and software, device and product, the answer is often a
morally heartfelt “yes!” I would stress “morally heartfelt”. It is true manufacturers want
to make lots of money, and would rather not have competitors. Bob Young of Red Hat
claims “every business person wakes up in the morning and says ‘how can I become a
monopolist?’” Beyond that, though, innovators actually come to believe that they have
the moral right to control the uses of their goods after they are sold. This isn’t your iPod,
it’s Apple’s iPod. Yet even if they believe this, we don’t have to agree.
In the material world, when a razor manufacturer claims that a generic razor blade
maker is “stealing my customers” by making compatible blades, we simply laugh. The
“hacking” there consists of looking at the razor and manufacturing a blade that will fit.
But when information about compatibility is inscribed in binary code and silicon circuits,
rather than the molded plastic of a razor cartridge, our moral intuitions are a little less
confident. And all kinds of bad policy can flourish in that area of moral uncertainty.
This leads us to the law. Surely Apple’s legal claim is as baseless as their moral
one? Probably, but it is a closer call than you would think. And that is where the iPod war
provides its second new economy lesson. In a competitive market, Apple would choose
whether to make the iPod an open platform, able to work with everyone’s music service,
or to try to keep it closed, hoping to extract more money by using consumers’ loyalty to
the hardware to drive them to the tied music service. If they attempted to keep it closed,
competitors would try to make compatible products, acting like the manufacturers of generic razor blades, or printer cartridges. The war would be fought out on the hardware
(and software) level, with the manufacturer of the platform constantly seeking to make
the competing products incompatible, to badmouth their quality, and to use “fear, uncertainty and doubt” to stop consumers switching. (Apple’s actual words were: “When we
update our iPod software from time to time, it is highly likely that Real’s Harmony technology will cease to work with current and future iPods.”) Meanwhile the competitors
would race to untangle the knots as fast as the platform manufacturer could tie them. If
the consumers got irritated enough they could give up their sunk costs, and switch to another product altogether. All of this seems fine, even if it represents the kind of socially
wasteful arms race that led critics of capitalism to prophesy its inevitable doom. Competition is good, and competition will often require interoperability.
But thanks to some rules passed to protect digital “content” (such as copyrighted
songs and software) the constant arms race over interoperability now has a new legal
dimension. The Digital Millennium Copyright Act and equivalent laws worldwide were
supposed to allow copyright owners to protect their content with state-backed digital
fences that it would be illegal to cut. They were not supposed to make interoperability
illegal, still less to give device manufacturers a monopoly over tied products, but that is
exactly how they are being used. Manufacturers of printers are claiming that generic ink
cartridges violate the DMCA. Makers of garage door openers portray generic replacements as “pirates” of their copyrighted codes. And now we have Apple claiming that
RealNetworks is engaged in a little digital breaking and entering. In each case the argument equates the actions required to make one machine or program work with another to
the actions required to break into an encrypted music file. For a lot of reasons this is a
very bad legal argument. Will it be recognised as such?

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T HE T HEORIES B EHIND I NTELLECTUAL P ROPERTY

There the answer is less certain. In the United States, there are exceptions for reverse engineering, but the European copyright directive bobbled the issue badly, and
some of the efforts at national implementation have the same problem. In the legitimate
attempt to protect an existing legal monopoly over copyrighted content, these “technological measure” provisions run the risk of giving device and software manufacturers an
entirely new legal monopoly over tied products, undercutting the EU’s software directive
and its competition policy in the process. Pity the poor razor manufacturers. Stuck in the
analogue world, they will still have to compete to make a living, unable to make claims
that the generic sellers are “breaking into our razors.”
Though this is an entirely unnecessary, legally created mess there is one nicely
ironic note. About 20 years ago, a stylish technology company with a clearly superior
hardware and software system had to choose whether to make its hardware platform
open, and sell more of its superior software, or whether to make it closed, and tie the two
tightly together. It chose closed. Its name: Apple. Its market share, now? About 5 per
cent. [In 2020 it was 9.6%.] Of course, back then competition was legal. One wishes that
the new generation of copyright laws made it clearer that it still is.
Questions:
1.) What are the differences in the way that Boyle and Apple frame the Apple/Real Networks controversy? Do any of the arguments they use apply to Problem 1-1?
2.) Boyle uses as an example the manufacturer of a razor or a printer trying to prevent
competing companies from offering generic versions of the blade or the toner cartridge.
The razor company and printer company produced this market—in that sense they provide a “benefit” to the generic companies which did nothing to develop either product.
Why do we commonly assume nevertheless that the original companies do not have the
right to control complementary products? Does that assumption apply with information
age goods? Why? Why not?
3.) Might there be socially negative effects if Apple and other providers of “platform
technologies” like phones and game consoles are not allowed to exclude a competitor
from its ecosystem? What would they be?
4.) Three different ways of seeing intellectual property issues are posed on pages 2–3;
as rightful rewards to labor, as incentives to innovation and facilitators of market signals
between producers and consumers, and finally as claims that arise whenever an activity
yields a positive externality to a third party. Can Apple make any or all of these claims?
What is Boyle’s response?

P ROBLEM 1-2
J USTIFYING AND L IMITING .
It is early in the days of the Internet and you and your friends have just had a great
idea. You are avid football fans, fond of late night conversations about which team is
really the best, which player the most productive at a particular position. Statistics are
thrown about. Bragging is compulsory. Unlike other casual fans, you do not spend all
your time rooting for a particular team. Your enjoyment comes from displaying your
knowledge of all the players and all the teams, using statistics to back up your claims

The Theories Behind Intellectual Property

of superiority and inferiority. You find these conversations pleasant, but frustrating.
How can one determine definitively who wins or loses these debates? Then you have
a collective epiphany. With a computer, the raft of statistics available on football players could be harvested to create imaginary teams of players, “drafted” from every team
in the league, that would be matched against each other each week according to a
formula that combined all the statistics into a single measure of whether your team
“won” or “lost” as against all your friends’ choices. By adding in prices that reflected
how “expensive” it was to choose a particular player, one could impose limits on the
tendency to pick a team composed only of superstars. Instead, the game would reward
those who can find the diamond in the rough, available on the cheap, who know to
avoid the fabled player who is actually past his best and prone to injury.
At first, you gather at the home of the computer-nerd in your group, who has
managed to write the software to make all this happen. Then you have a second epiphany. Put this online and everyone could have their own team—you decide to call them
FANtasy Football Teams, to stress both their imaginary nature and the intensity of the
football-love that motivates those who play. Multiple news and sports sites already
provide all the basic facts required: the statistics of yardage gained, sacks, completed
passes and so on. The NFL offers an “official” statistics site, but many news outlets
collect their own statistics. It is trivial to write a computer program to look up those
statistics automatically and drop them into the FANtasy game. Even better, the nature
of a global network makes the markets for players more efficient while allowing national and even global competition among those playing the game. The global network
means that the players never need to meet in reality. FANtasy Football Leagues can be
organized for each workplace or group of former college friends. Because the football
players you draft come from so many teams, there is always a game to keep track of
and bragging to be done on email or around the water cooler.
FANtasy Football is an enormous success. You and your friends are in the middle of negotiations with Yahoo! to make it the exclusive FANtasy Football League
network, when you receive a threatening letter from the NFL. They claim that you are
“stealing” results and statistics from NFL games, unfairly enriching yourself from an
activity that the league stages at the cost of millions of dollars. They say they are
investigating their legal options and, if current law provides them no recourse, that
they will ask Congress to pass a law prohibiting unlicensed fantasy sports leagues.
(Later we will discuss the specific legal claims that might actually be made against
you under current law.) As this drama is playing out, you discover that other groups
of fans have adapted the FANtasy Football idea to baseball and basketball and that
those leagues are also hugely popular.
i.) Your mission now is to lay out the ethical, utilitarian or economic arguments
that you might make in support of your position that what you are doing should
not be something the NFL can control or limit—whether they seek to prohibit you,
or merely demand that you pay for a license. What might the NFL say in support
of its position or its proposed law?
ii.) Should you be able to stop the “copycat” fantasy leagues in baseball and
basketball? To demand royalties from them? Why? Are these arguments consistent with those you made in answer to question i.)?

7

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T HE T HEORIES B EHIND I NTELLECTUAL P ROPERTY

John Locke, Of Property
Two Treatises on Government
§ 26. Though the earth and all inferior creatures be common to all men, yet every man has
a “property” in his own “person.” This nobody has any right to but himself. The “labour”
of his body and the “work” of his hands, we may say, are properly his. Whatsoever, then,
he removes out of the state that Nature hath provided and left it in, he hath mixed his labour
with it, and joined to it something that is his own, and thereby makes it his property. It
being by him removed from the common state Nature placed it in, it hath by this labour
something annexed to it that excludes the common right of other men. For this “labour”
being the unquestionable property of the labourer, no man but he can have a right to what
that is once joined to, at least where there is enough, and as good left in common for others.
§ 27. He that is nourished by the acorns he picked up under an oak, or the apples he gathered from the trees in the wood, has certainly appropriated them to himself. Nobody can
deny but the nourishment is his. I ask, then, when did they begin to be his? when he digested? or when he ate? or when he boiled? or when he brought them home? or when he
picked them up? And it is plain, if the first gathering made them not his, nothing else could.
That labour put a distinction between them and common. That added something to them
more than Nature, the common mother of all, had done, and so they became his private
right. And will any one say he had no right to those acorns or apples he thus appropriated
because he had not the consent of all mankind to make them his? Was it a robbery thus to
assume to himself what belonged to all in common? If such a consent as that was necessary,
man had starved, notwithstanding the plenty God had given him. We see in commons,
which remain so by compact, that it is the taking any part of what is common, and removing
it out of the state Nature leaves it in, which begins the property, without which the common
is of no use. And the taking of this or that part does not depend on the express consent of
all the commoners. Thus, the grass my horse has bit, the turfs my servant has cut, and the
ore I have digged in any place, where I have a right to them in common with others, become
my property without the assignation or consent of anybody. The labour that was mine,
removing them out of that common state they were in, hath fixed my property in them. . . .
§ 29. Thus this law of reason makes the deer that Indian’s who hath killed it; it is allowed
to be his goods who hath bestowed his labour upon it, though, before, it was the common
right of every one. And amongst those who are counted the civilised part of mankind, who
have made and multiplied positive laws to determine property, this original law of Nature
for the beginning of property, in what was before common, still takes place, and by virtue
thereof, what fish any one catches in the ocean, that great and still remaining common of
mankind; or what amber-gris any one takes up here is by the labour that removes it out of
that common state Nature left it in, made his property who takes that pains about it. And
even amongst us, the hare that any one is hunting is thought his who pursues her during
the chase. For being a beast that is still looked upon as common, and no man’s private
possession, whoever has employed so much labour about any of that kind as to find and
pursue her has thereby removed her from the state of Nature wherein she was common,
and hath begun a property.
§ 30. It will, perhaps, be objected to this, that if gathering the acorns or other fruits of the
earth, etc., makes a right to them, then any one may engross as much as he will. To which I
answer, Not so. The same law of Nature that does by this means give us property, does also

The Theories Behind Intellectual Property

9

bound that property too. “God has given us all things richly.” Is the voice of reason confirmed by inspiration? But how far has He given it us “to enjoy”? As much as any one can
make use of to any advantage of life before it spoils, so much he may by his labour fix a
property in. Whatever is beyond this is more than his share, and belongs to others. Nothing
was made by God for man to spoil or destroy. And thus considering the plenty of natural
provisions there was a long time in the world, and the few spenders, and to how small a part
of that provision the industry of one man could extend itself and engross it to the prejudice
of others, especially keeping within the bounds set by reason of what might serve for his
use, there could be then little room for quarrels or contentions about property so established.
§ 31. But the chief matter of property being now not the fruits of the earth and the beasts
that subsist on it, but the earth itself, as that which takes in and carries with it all the rest,
I think it is plain that property in that too is acquired as the former. As much land as a
man tills, plants, improves, cultivates, and can use the product of, so much is his property.
He by his labour does, as it were, enclose it from the common. Nor will it invalidate his
right to say everybody else has an equal title to it, and therefore he cannot appropriate,
he cannot enclose, without the consent of all his fellow-commoners, all mankind. God,
when He gave the world in common to all mankind, commanded man also to labour, and
the penury of his condition required it of him. God and his reason commanded him to
subdue the earth—i.e., improve it for the benefit of life and therein lay out something
upon it that was his own, his labour. He that, in obedience to this command of God,
subdued, tilled, and sowed any part of it, thereby annexed to it something that was his
property, which another had no title to, nor could without injury take from him.
§ 32. Nor was this appropriation of any parcel of land, by improving it, any prejudice to any
other man, since there was still enough and as good left, and more than the yet unprovided
could use. So that, in effect, there was never the less left for others because of his enclosure
for himself. For he that leaves as much as another can make use of does as good as take
nothing at all. Nobody could think himself injured by the drinking of another man, though
he took a good draught, who had a whole river of the same water left him to quench his
thirst. And the case of land and water, where there is enough of both, is perfectly the same.
§ 33. God gave the world to men in common, but since He gave it them for their benefit
and the greatest conveniencies of life they were capable to draw from it, it cannot be supposed He meant it should always remain common and uncultivated. He gave it to the use
of the industrious and rational (and labour was to be his title to it); not to the fancy or
covetousness of the quarrelsome and contentious. He that had as good left for his improvement as was already taken up needed not complain, ought not to meddle with what
was already improved by another’s labour; if he did it is plain he desired the benefit of
another’s pains, which he had no right to, and not the ground which God had given him,
in common with others, to labour on, and whereof there was as good left as that already
possessed, and more than he knew what to do with, or his industry could reach to.
§ 34. It is true, in land that is common in England or any other country, where there are
plenty of people under government who have money and commerce, no one can enclose or
appropriate any part without the consent of all his fellow commoners; because this is left
common by compact—i.e., by the law of the land, which is not to be violated. And, though
it be common in respect of some men, it is not so to all mankind, but is the joint propriety
of this country, or this parish. Besides, the remainder, after such enclosure, would not be as
good to the rest of the commoners as the whole was, when they could all make use of the
whole; whereas in the beginning and first peopling of the great common of the world it was
quite otherwise. The law man was under was rather for appropriating. God commanded, and

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T HE T HEORIES B EHIND I NTELLECTUAL P ROPERTY

his wants forced him to labour. That was his property, which could not be taken from him
wherever he had fixed it. And hence subduing or cultivating the earth and having dominion,
we see, are joined together. The one gave title to the other. So that God, by commanding to
subdue, gave authority so far to appropriate. And the condition of human life, which requires
labour and materials to work on, necessarily introduce private possessions.
Questions:
1.) Which side in Problem 1-2 can appeal to Locke’s arguments? The NFL? The FANtasy Football Players? Both? Find the passage that supports your answers.
2.) Should Locke’s argument apply to information goods? Why? Why not?
3.) Locke talks about a realm that is “left common by compact.” What does this consist of
in the realm of information? Would Locke imagine that private property needs to be introduced to the “great common” of the information world, just as it was to the wilderness?

James Boyle, Why Intellectual Property?

Please read The Public Domain pp 1–16

Imagine yourself starting a society from scratch. Perhaps you fought a revolution, or
perhaps you led a party of adventurers into some empty land, conveniently free of indigenous peoples. Now your task is to make the society work. You have a preference for
democracy and liberty and you want a vibrant culture: a culture with a little chunk of
everything, one that offers hundreds of ways to live and thousands of ideals of beauty.
You don’t want everything to be high culture; you want beer and skittles and trashy delights as well as brilliant news reporting, avant-garde theater, and shocking sculpture.
You can see a role for highbrow, state-supported media or publicly financed artworks,
but your initial working assumption is that the final arbiter of culture should be the people
who watch, read, and listen to it, and who remake it every day. And even if you are
dubious about the way popular choice gets formed, you prefer it to some government
funding body or coterie of art mavens.
At the same time as you are developing your culture, you want a flourishing economy—and not just in literature or film. You want innovation and invention. You want
drugs that cure terrible diseases, and designs for more fuel-efficient stoves, and useful
little doodads, like mousetraps, or Post-it notes, or solar-powered backscratchers. To be
exact, you want lots of innovation but you do not know exactly what innovation or even
what types of innovation you want. . . .
Read the rest1
Note:
1.) The Locke and Boyle excerpts present perhaps the central question of intellectual property policy: the balance between the incentives provided by exclusive property rights and
the preservation of the commons, the raw material for future creativity and competition.
1

These are optional additional readings, keyed to the discussions in the book. The Public Domain is also available under a Creative Commons license. Ask your teacher if this is required.

*

* All comic book pages are taken from Aoki, Boyle & Jenkins, Theft!: A History of Music which is available
under a Creative Commons license at https://web.law.duke.edu/musiccomic/.

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T HE T HEORIES B EHIND I NTELLECTUAL P ROPERTY

Selling Wine Without Bottles
The Economy of Mind on the Global Net

John Perry Barlow, 1992

“If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea,
which an individual may exclusively possess as long as he keeps it to
himself; but the moment it is divulged, it forces itself into the possession
of everyone, and the receiver cannot dispossess himself of it. Its peculiar
character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at
mine, receives light without darkening me. That ideas should freely
spread from one to another over the globe, for the moral and mutual
instruction of man, and improvement of his condition, seems to have
been peculiarly and benevolently designed by nature, when she made
them, like fire, expansible over all space, without lessening their density
at any point, and like the air in which we breathe, move, and have our
physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property. . . .”
—Thomas Jefferson
Throughout the time I’ve been groping around Cyberspace, there has remained unsolved
an immense conundrum which seems to be at the root of nearly every legal, ethical, governmental, and social vexation to be found in the Virtual World. I refer to the problem of
digitized property. The riddle is this: if our property can be infinitely reproduced and
instantaneously distributed all over the planet without cost, without our knowledge, without its even leaving our possession, how can we protect it? How are we going to get paid
for the work we do with our minds? And, if we can’t get paid, what will assure the continued creation and distribution of such work?
Since we don’t have a solution to what is a profoundly new kind of challenge, and
are apparently unable to delay the galloping digitization of everything not obstinately
physical, we are sailing into the future on a sinking ship. This vessel, the accumulated
canon of copyright and patent law, was developed to convey forms and methods of expression entirely different from the vaporous cargo it is now being asked to carry. It is
leaking as much from within as without.
Legal efforts to keep the old boat floating are taking three forms: a frenzy of deck
chair rearrangement, stern warnings to the passengers that if she goes down, they will
face harsh criminal penalties, and serene, glassy-eyed denial.
Intellectual property law cannot be patched, retrofitted, or expanded to contain the
gasses of digitized expression any more than real estate law might be revised to cover
the allocation of broadcasting spectrum. (Which, in fact, rather resembles what is being
attempted here.) We will need to develop an entirely new set of methods as befits this
entirely new set of circumstances.
Most of the people who actually create soft property—the programmers, hackers,
and Net surfers—already know this. Unfortunately, neither the companies they work for
nor the lawyers these companies hire have enough direct experience with immaterial goods
to understand why they are so problematic. They are proceeding as though the old laws can

The Theories Behind Intellectual Property

13

somehow be made to work, either by grotesque expansion or by force. They are wrong.
The source of this conundrum is as simple as its solution is complex. Digital technology is detaching information from the physical plane, where property law of all sorts
has always found definition.
Throughout the history of copyrights and patents, the proprietary assertions of
thinkers have been focused not on their ideas but on the expression of those ideas. The
ideas themselves, as well as facts about the phenomena of the world, were considered to
be the collective property of humanity. One could claim franchise, in the case of copyright, on the precise turn of phrase used to convey a particular idea or the order in which
facts were presented.
The point at which this franchise was imposed was that moment when the “word
became flesh” by departing the mind of its originator and entering some physical object,
whether book or widget. The subsequent arrival of other commercial media besides
books didn’t alter the legal importance of this moment. Law protected expression and,
with few (and recent) exceptions, to express was to make physical.
Protecting physical expression had the force of convenience on its side. Copyright
worked well because, Gutenberg notwithstanding, it was hard to make a book. Furthermore, books froze their contents into a condition which was as challenging to alter as it
was to reproduce. Counterfeiting or distributing counterfeit volumes were obvious and
visible activities, easy enough to catch somebody in the act of doing. Finally, unlike unbounded words or images, books had material surfaces to which one could attach copyright notices, publisher’s marques, and price tags.
Mental to physical conversion was even more central to patent. A patent, until recently,
was either a description of the form into which materials were to be rendered in the service
of some purpose or a description of the process by which rendition occurred. In either case,
the conceptual heart of patent was the material result. If no purposeful object could be
rendered due to some material limitation, the patent was rejected. Neither a Klein bottle
nor a shovel made of silk could be patented. It had to be a thing and the thing had to work.
Thus the rights of invention and authorship adhered to activities in the physical
world. One didn’t get paid for ideas but for the ability to deliver them into reality. For all
practical purposes, the value was in the conveyance and not the thought conveyed.
In other words, the bottle was protected, not the wine.
Now, as information enters Cyberspace, the native home of Mind, these bottles are
vanishing. With the advent of digitization, it is now possible to replace all previous information storage forms with one meta-bottle: complex—and highly liquid—patterns of
ones and zeros.
Even the physical/digital bottles to which we’ve become accustomed, floppy disks,
CD-ROM’s, and other discrete, shrink-wrappable bit-packages, will disappear as all
computers jack in to the global Net. While the Internet may never include every single
CPU on the planet, it is more than doubling every year and can be expected to become
the principal medium of information conveyance if [not], eventually, the only one.
Once that has happened, all the goods of the Information Age—all of the expressions once contained in books or film strips or records or newsletters—will exist either as
pure thought or something very much like thought: voltage conditions darting around the
Net at the speed of light, in conditions which one might behold in effect, as glowing pixels
or transmitted sounds, but never touch or claim to “own” in the old sense of the word.
Some might argue that information will still require some physical manifestation,
such as its magnetic existence on the titanic hard disks of distant servers, but these are
bottles which have no macroscopically discrete or personally meaningful form.

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T HE T HEORIES B EHIND I NTELLECTUAL P ROPERTY

Some will also argue that we have been dealing with unbottled expression since the
advent of radio, and they would be right. But for most of the history of broadcast, there
was no convenient way to capture soft goods from the electromagnetic ether and reproduce them in anything like the quality available in commercial packages. Only recently
has this changed and little has been done legally or technically to address the change.
Generally, the issue of consumer payment for broadcast products was irrelevant.
The consumers themselves were the product. Broadcast media were supported either by
selling the attention of their audience to advertisers, using government to assess payment
through taxes, or the whining mendicancy of annual donor drives.
All of the broadcast support models are flawed. Support either by advertisers or
government has almost invariably tainted the purity of the goods delivered. Besides, direct marketing is gradually killing the advertiser support model anyway.
Broadcast media gave us another payment method for a virtual product in the royalties which broadcasters pay songwriters through such organizations as ASCAP and
BMI. But, as a member of ASCAP, I can assure you this is not a model which we should
emulate. The monitoring methods are wildly approximate. There is no parallel system of
accounting in the revenue stream. It doesn’t really work. Honest.
In any case, without our old methods of physically defining the expression of ideas,
and in the absence of successful new models for non-physical transaction, we simply
don’t know how to assure reliable payment for mental works. To make matters worse,
this comes at a time when the human mind is replacing sunlight and mineral deposits as
the principal source of new wealth.
Furthermore, the increasing difficulty of enforcing existing copyright and patent
laws is already placing in peril the ultimate source of intellectual property, the free exchange of ideas.
That is, when the primary articles of commerce in a society look so much like
speech as to be indistinguishable from it, and when the traditional methods of protecting
their ownership have become ineffectual, attempting to fix the problem with broader and
more vigorous enforcement will inevitably threaten freedom of speech.
The greatest constraint on your future liberties may come not from government but
from corporate legal departments laboring to protect by force what can no longer be protected by practical efficiency or general social consent.
Furthermore, when Jefferson and his fellow creatures of The Enlightenment designed the system which became American copyright law, their primary objective was
assuring the widespread distribution of thought, not profit. Profit was the fuel which
would carry ideas into the libraries and minds of their new republic. Libraries would
purchase books, thus rewarding the authors for their work in assembling ideas, which
otherwise “incapable of confinement” would then become freely available to the public.
But what is the role of libraries in the absence of books? How does society now pay for
the distribution of ideas if not by charging for the ideas themselves?
Additionally complicating the matter is the fact that along with the physical bottles
in which intellectual property protection has resided, digital technology is also erasing
the legal jurisdictions of the physical world, and replacing them with the unbounded and
perhaps permanently lawless seas of Cyberspace.
In Cyberspace, there are not only no national or local boundaries to contain the scene
of a crime and determine the method of its prosecution, there are no clear cultural agreements on what a crime might be. Unresolved and basic differences between European and
Asian cultural assumptions about intellectual property can only be exacerbated in a region
where many transactions are taking place in both hemispheres and yet, somehow, in neither.

The Theories Behind Intellectual Property

15

Notions of property, value, ownership, and the nature of wealth itself are changing
more fundamentally than at any time since the Sumerians first poked cuneiform into wet
clay and called it stored grain. Only a very few people are aware of the enormity of this
shift and fewer of them are lawyers or public officials.
Those who do see these changes must prepare responses for the legal and social
confusion which will erupt as efforts to protect new forms of property with old methods
become more obviously futile, and, as a consequence, more adamant.

From Swords to Writs to Bits
Humanity now seems bent on creating a world economy primarily based on goods
which take no material form. In doing so, we may be eliminating any predictable connection
between creators and a fair reward for the utility or pleasure others may find in their works.
Without that connection, and without a fundamental change in consciousness to
accommodate its loss, we are building our future on furor, litigation, and institutionalized
evasion of payment except in response to raw force. We may return to the Bad Old Days
of property.
Throughout the darker parts of human history, the possession and distribution of
property was a largely military matter. “Ownership” was assured those with the nastiest
tools, whether fists or armies, and the most resolute will to use them. Property was the
divine right of thugs. By the turn of the First Millennium A.D., the emergence of merchant
classes and landed gentry forced the development of ethical understandings for the resolution of property disputes. In the late Middle Ages, enlightened rulers like England’s Henry
II began to codify this unwritten “common law” into recorded canons. These laws were
local, but this didn’t matter much as they were primarily directed at real estate, a form of
property which is local by definition. And which, as the name implied, was very real.
This continued to be the case as long as the origin of wealth was agricultural, but
with dawning of the Industrial Revolution, humanity began to focus as much on means
as ends. Tools acquired a new social value and, thanks to their own development, it became possible to duplicate and distribute them in quantity.
To encourage their invention, copyright and patent law were developed in most western countries. These laws were devoted to the delicate task of getting mental creations into
the world where they could be used—and enter the minds of others—while assuring their
inventors compensation for the value of their use. And, as previously stated, the systems of
both law and practice which grew up around that task were based on physical expression.
Since it is now possible to convey ideas from one mind to another without ever
making them physical, we are now claiming to own ideas themselves and not merely
their expression. And since it is likewise now possible to create useful tools which never
take physical form, we have taken to patenting abstractions, sequences of virtual events,
and mathematical formulae—the most un-real estate imaginable.
In certain areas, this leaves rights of ownership in such an ambiguous condition
that once again property adheres to those who can muster the largest armies. The only
difference is that this time the armies consist of lawyers.
Threatening their opponents with the endless Purgatory of litigation, over which
some might prefer death itself, they assert claim to any thought which might have entered
another cranium within the collective body of the corporations they serve. They act as
though these ideas appeared in splendid detachment from all previous human thought.
And they pretend that thinking about a product is somehow as good as manufacturing,
distributing, and selling it.
What was previously considered a common human resource, distributed among

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T HE T HEORIES B EHIND I NTELLECTUAL P ROPERTY

the minds and libraries of the world, as well as the phenomena of nature herself, is now
being fenced and deeded. It is as though a new class of enterprise had arisen which
claimed to own air and water.
What is to be done? While there is a certain grim fun to be had in it, dancing on
the grave of copyright and patent will solve little, especially when so few are willing to
admit that the occupant of this grave is even deceased and are trying to up by force what
can no longer be upheld by popular consent.
In a more perfect world, we’d be wise to declare a moratorium on litigation, legislation, and international treaties in this area until we had a clearer sense of the terms and
conditions of enterprise in Cyberspace. Ideally, laws ratify already developed social consensus. They are less the Social Contract itself than a series of memoranda expressing a
collective intent which has emerged out of many millions of human interactions.
Humans have not inhabited Cyberspace long enough or in sufficient diversity to
have developed a Social Contract which conforms to the strange new conditions of that
world. Laws developed prior to consensus usually serve the already established few who
can get them passed and not society as a whole.
To the extent that either law or established social practice exists in this area, they
are already in dangerous disagreement. The laws regarding unlicensed reproduction of
commercial software are clear and stern . . . and rarely observed. Software piracy laws
are so practically unenforceable and breaking them has become so socially acceptable
that only a thin minority appears compelled, either by fear or conscience, to obey them.
I sometimes give speeches on this subject, and I always ask how many people in
the audience can honestly claim to have no unauthorized software on their hard disks.
I’ve never seen more than ten percent of the hands go up.
Whenever there is such profound divergence between the law and social practice,
it is not society that adapts. And, against the swift tide of custom, the Software Publishers’ current practice of hanging a few visible scapegoats is so obviously capricious as to
only further diminish respect for the law.
Part of the widespread popular disregard for commercial software copyrights
stems from a legislative failure to understand the conditions into which it was inserted.
To assume that systems of law based in the physical world will serve in an environment
which is as fundamentally different as Cyberspace is a folly for which everyone doing
business in the future will pay.
As I will discuss in the next segment, unbounded intellectual property is very different from physical property and can no longer be protected as though these differences
did not exist. For example, if we continue to assume that value is based on scarcity, as it
is with regard to physical objects, we will create laws which are precisely contrary to the
nature of information, which may, in many cases, increase in value with distribution.
The large, legally risk-averse institutions most likely to play by the old rules will suffer for their compliance. The more lawyers, guns, and money they invest in either protecting
their rights or subverting those of their opponents, the more commercial competition will
resemble the Kwakiutl Potlatch Ceremony, in which adversaries competed by destroying
their own possessions. Their ability to produce new technology will simply grind to a halt
as every move they make drives them deeper into a tar pit of courtroom warfare.
Faith in law will not be an effective strategy for high tech companies. Law adapts
by continuous increments and at a pace second only to geology in its stateliness. Technology advances in the lunging jerks, like the punctuation of biological evolution grotesquely
accelerated. Real world conditions will continue to change at a blinding pace, and the law
will get further behind, more profoundly confused. This mismatch is permanent.

The Theories Behind Intellectual Property

17

Promising economies based on purely digital products will either be born in a state
of paralysis, as appears to be the case with multimedia, or continue in a brave and willful
refusal by their owners to play the ownership game at all.
In the United States one can already see a parallel economy developing, mostly
among small fast moving enterprises who protect their ideas by getting into the marketplace quicker than their larger competitors who base their protection on fear and litigation.
Perhaps those who are part of the problem will simply quarantine themselves in court
while those who are part of the solution will create a new society based, at first, on piracy
and freebooting. It may well be that when the current system of intellectual property law
has collapsed, as seems inevitable, that no new legal structure will arise in its place.
But something will happen. After all, people do business. When a currency becomes meaningless, business is done in barter. When societies develop outside the law,
they develop their own unwritten codes, practices, and ethical systems. While technology
may undo law, technology offers methods for restoring creative rights.

A Taxonomy of Information
It seems to me that the most productive thing to do now is to look hard into the
true nature of what we’re trying to protect. How much do we really know about information and its natural behaviors?
What are the essential characteristics of unbounded creation? How does it differ
from previous forms of property? How many of our assumptions about it have actually
been about its containers rather than their mysterious contents? What are its different
species and how does each of them lend itself to control? What technologies will be
useful in creating new virtual bottles to replace the old physical ones?
Of course, information is, by its nature, intangible and hard to define. Like other
such deep phenomena as light or matter, it is a natural host to paradox. And as it is most
helpful to understand light as being both a particle and a wave, an understanding of information may emerge in the abstract congruence of its several different properties which
might be described by the following three statements:
• Information is an activity.
• Information is a life form.
• Information is a relationship.
In the following section, I will examine each of these.

I. INFORMATION IS AN ACTIVITY
Information Is a Verb, Not a Noun.
Freed of its containers, information is obviously not a thing. In fact, it is something
which happens in the field of interaction between minds or objects or other pieces of
information. . . .
The central economic distinction between information and physical property is the
ability of information to be transferred without leaving the possession of the original owner.
If I sell you my horse, I can’t ride him after that. If I sell you what I know, we both know it.

II. INFORMATION IS A LIFE FORM
Information Wants To Be Free.
Stewart Brand is generally credited with this elegant statement of the obvious, recognizing both the natural desire of secrets to be told and the fact that they might be capable of possessing something like a “desire” in the first place.

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English Biologist and Philosopher Richard Dawkins proposed the idea of
“memes,” self-replicating, patterns of information which propagate themselves across
the ecologies of mind, saying they were like life forms.
I believe they are life forms in every respect but a basis in the carbon atom. They
self-reproduce, they interact with their surroundings and adapt to them, they mutate, they
persist. Like any other life form they evolve to fill the possibility spaces of their local
environments, which are, in this case the surrounding belief systems and cultures of their
hosts, namely, us. . . .
Like DNA helices, ideas are relentless expansionists, always seeking new opportunities for lebensraum. And, as in carbon-based nature, the more robust organisms are
extremely adept at finding new places to live. Thus, just as the common housefly has
insinuated itself into practically every ecosystem on the planet, so has the meme of “life
after death” found a niche in most minds, or psycho-ecologies.
The more universally resonant an idea or image or song, the more minds it will
enter and remain within. Trying to stop the spread of a really robust piece of information
is about as easy as keeping killer bees South of the Border. The stuff just leaks.

Information Wants To Change
If ideas and other interactive patterns of information are indeed life forms, they
can be expected to evolve constantly into forms which will be more perfectly adapted to
their surroundings. And, as we see, they are doing this all the time.
But for a long time, our static media, whether carvings in stone, ink on paper, or
dye on celluloid, have strongly resisted the evolutionary impulse, exalting as a consequence the author’s ability to determine the finished product. But, as in an oral tradition,
digitized information has no “final cut.”
Digital information, unconstrained by packaging, is a continuing process more like
the metamorphosing tales of prehistory than anything which will fit in shrink wrap. From
the Neolithic to Gutenberg, information was passed on, mouth to ear, changing with
every re-telling (or re-singing). The stories which once shaped our sense of the world
didn’t have authoritative versions. They adapted to each culture in which they found
themselves being told.
Because there was never a moment when the story was frozen in print, the socalled “moral” right of storytellers to keep the tale their own was neither protected nor
recognized. The story simply passed through each of them on its way to the next, where
it would assume a different form. As we return to continuous information, we can expect
the importance of authorship to diminish. Creative people may have to renew their acquaintance with humility.
But our system of copyright makes no accommodation whatever for expressions
which don’t at some point become “fixed” nor for cultural expressions which lack a specific author or inventor.
Jazz improvisations, standup comedy routines, mime performances, developing
monologues, and unrecorded broadcast transmissions all lack the Constitutional requirement of fixation as a “writing.” Without being fixed by a point of publication the liquid
works of the future will all look more like these continuously adapting and changing
forms and will therefore exist beyond the reach of copyright.
Copyright expert Pamela Samuelson tells of having attended a conference last year
convened around the fact that Western countries may legally appropriate the music, designs, and biomedical lore of aboriginal people without compensation to their tribe of
origin since that tribe is not an “author” or “inventor.”

The Theories Behind Intellectual Property

19

But soon most information will be generated collaboratively by the cyber-tribal
hunter-gatherers of Cyberspace. Our arrogant legal dismissal of the rights of “primitives”
will be back to haunt us soon.

Information Is Perishable
With the exception of the rare classic, most information is like farm produce. Its
quality degrades rapidly both over time and in distance from the source of production.
But even here, value is highly subjective and conditional. Yesterday’s papers are quite
valuable to the historian. In fact, the older they are, the more valuable they become. On
the other hand, a commodities broker might consider news of an event which is more
than an hour old to have lost any relevance.

III. INFORMATION IS A RELATIONSHIP
Meaning Has Value and Is Unique to Each Case
In most cases, we assign value to information based on its meaningfulness. The
place where information dwells, the holy moment where transmission becomes reception, is a region which has many shifting characteristics and flavors depending on the
relationship of sender and receiver, the depth of their interactivity.
Each such relationship is unique. Even in cases where the sender is a broadcast
medium, and no response is returned, the receiver is hardly passive. Receiving information is often as creative an act as generating it. . . .

Familiarity Has More Value than Scarcity
With physical goods, there is a direct correlation between scarcity and value. Gold
is more valuable than wheat, even though you can’t eat it. While this is not always the
case, the situation with information is usually precisely the reverse. Most soft goods increase in value as they become more common. Familiarity is an important asset in the
world of information. It may often be the case that the best thing you can do to raise the
demand for your product is to give it away.
While this has not always worked with shareware, it could be argued that there is
a connection between the extent to which commercial software is pirated and the amount
which gets sold. Broadly pirated software, such as Lotus 1-2-3 or WordPerfect, becomes
a standard and benefits from Law of Increasing Returns based on familiarity.
In regard to my own soft product, rock and roll songs, there is no question that the
band I write them for, the Grateful Dead, has increased its popularity enormously by
giving them away. We have been letting people tape our concerts since the early seventies, but instead of reducing the demand for our product, we are now the largest concert
draw in America, a fact which is at least in part attributable to the popularity generated
by those tapes.
True, I don’t get any royalties on the millions of copies of my songs which have
been extracted from concerts, but I see no reason to complain. The fact is, no one but the
Grateful Dead can perform a Grateful Dead song, so if you want the experience and not
its thin projection, you have to buy a ticket from us. In other words, our intellectual property protection derives from our being the only real-time source of it.

Exclusivity Has Value
The problem with a model which turns the physical scarcity/value ratio on its head
is that sometimes the value of information is very much based on its scarcity. Exclusive
possession of certain facts makes them more useful. If everyone knows about conditions

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which might drive a stock price up, the information is valueless.
But again, the critical factor is usually time. It doesn’t matter if this kind of information eventually becomes ubiquitous. What matters is being among the first who possess it and act on it. While potent secrets usually don’t stay secret, they may remain so
long enough to advance the cause of their original holders.

Point of View and Authority Have Value
In a world of floating realities and contradictory maps, rewards will accrue to those
commentators whose maps seem to fit their territory snugly, based on their ability to yield
predictable results for those who use them.
In aesthetic information, whether poetry or rock ’n’ roll, people are willing to buy
the new product of an artist, sight-unseen, based on their having been delivered a pleasurable experience by previous work.
Reality is an edit. People are willing to pay for the authority of those editors whose
filtering point of view seems to fit best. And again, point of view is an asset which cannot
be stolen or duplicated. No one but Esther Dyson sees the world as she does and the
handsome fee she charges for her newsletter is actually for the privilege of looking at the
world through her unique eyes.

Time Replaces Space
In the physical world, value depends heavily on possession, or proximity in space.
One owns that material which falls inside certain dimensional boundaries and the ability
to act directly, exclusively, and as one wishes upon what falls inside those boundaries is
the principal right of ownership. And of course there is the relationship between value
and scarcity, a limitation in space.
In the virtual world, proximity in time is a value determinant. An informational
product is generally more valuable the closer the purchaser can place himself to the moment of its expression, a limitation in time. Many kinds of information degrade rapidly
with either time or reproduction. Relevance fades as the territory they map changes.
Noise is introduced and bandwidth lost with passage away from the point where the information is first produced.
Thus, listening to a Grateful Dead tape is hardly the same experience as attending
a Grateful Dead concert. The closer one can get to the headwaters of an informational
stream, the better his chances of finding an accurate picture of reality in it. In an era of
easy reproduction, the informational abstractions of popular experiences will propagate
out from their source moments to reach anyone who’s interested. But it’s easy enough to
restrict the real experience of the desirable event, whether knock-out punch or guitar lick,
to those willing to pay for being there.

The Protection of Execution
In the hick town I come from, they don’t give you much credit for just having ideas.
You are judged by what you can make of them. As things continue to speed up, I think we
see that execution is the best protection for those designs which become physical products.
Or, as Steve Jobs once put it, “Real artists ship.” The big winner is usually the one who
gets to the market first (and with enough organizational force to keep the lead).

Information as Its Own Reward
It is now a commonplace to say that money is information. With the exception of
Krugerands, crumpled cab-fare, and the contents of those suitcases which drug lords are

The Theories Behind Intellectual Property

21

reputed to carry, most of the money in the informatized world is in ones and zeros. The
global money supply sloshes around the Net, as fluid as weather. It is also obvious, as I
have discussed, that information has become as fundamental to the creation of modern
wealth as land and sunlight once were.
What is less obvious is the extent to which information is acquiring intrinsic value,
not as a means to acquisition but as the object to be acquired. I suppose this has always
been less explicitly the case. In politics and academia, potency and information have
always been closely related.
However, as we increasingly buy information with money, we begin to see that
buying information with other information is simple economic exchange without the necessity of converting the product into and out of currency. This is somewhat challenging
for those who like clean accounting, since, information theory aside, informational exchange rates are too squishy to quantify to the decimal point.
Nevertheless, most of what a middle class American purchases has little to do with
survival. We buy beauty, prestige, experience, education, and all the obscure pleasures
of owning. Many of these things can not only be expressed in non-material terms, they
can be acquired by non-material means.
And then there are the inexplicable pleasures of information itself, the joys of
learning, knowing, and teaching. The strange good feeling of information coming into
and out of oneself. Playing with ideas is a recreation which people must be willing to pay
a lot for, given the market for books and elective seminars. We’d likely spend even more
money for such pleasures if there weren’t so many opportunities to pay for ideas with
other ideas.
This explains much of the collective “volunteer” work which fills the archives,
newsgroups, and databases of the Internet. Its denizens are not working for “nothing,” as
is widely believed. Rather they are getting paid in something besides money. It is an
economy which consists almost entirely of information.
This may become the dominant form of human trade, and if we persist in modeling
economics on a strictly monetary basis, we may be gravely misled.

Getting Paid in Cyberspace
How all the foregoing relates to solutions to the crisis in intellectual property is
something I’ve barely started to wrap my mind around. It’s fairly paradigm-warping to
look at information through fresh eyes—to see how very little it is like pig iron or pork
bellies, to imagine the tottering travesties of case law we will stack up if we go on treating
it legally as though it were.
As I’ve said, I believe these towers of outmoded boilerplate will be a smoking heap
sometime in the next decade and we mind miners will have no choice but to cast our lot
with new systems that work.
I’m not really so gloomy about our prospects as readers of this jeremiad so far
might conclude. Solutions will emerge. Nature abhors a vacuum and so does commerce.
Indeed, one of the aspects of the electronic frontier which I have always found
most appealing—and the reason Mitch Kapor and I used that phrase in naming our foundation—is the degree to which it resembles the 19th Century American West in its natural
preference for social devices which emerge from it conditions rather than those which
are imposed from the outside.
Until the west was fully settled and “civilized” in this century, order was established according to an unwritten Code of the West which had the fluidity of etiquette
rather than the rigidity of law. Ethics were more important than rules. Understandings

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were preferred over laws, which were, in any event, largely unenforceable.
I believe that law, as we understand it, was developed to protect the interests which
arose in the two economic “waves” which Alvin Toffler accurately identified in The Third
Wave. The First Wave was agriculturally based and required law to order ownership of
the principal source of production, land. In the Second Wave, manufacturing became the
economic mainspring, and the structure of modern law grew around the centralized institutions which needed protection for their reserves of capital, manpower, and hardware.
Both of these economic systems required stability. Their laws were designed to
resist change and to assure some equability of distribution within a fairly static social
framework. The possibility spaces had to be constrained to preserve the predictability
necessary to either land stewardship or capital formation.
In the Third Wave we have now entered, information to a large extent replaces
land, capital, and hardware, and as I have detailed in the preceding section, information
is most at home in a much more fluid and adaptable environment. The Third Wave is
likely to bring a fundamental shift in the purposes and methods of law which will affect
far more than simply those statutes which govern intellectual property.
The “terrain” itself—the architecture of the Net—may come to serve many of the
purposes which could only be maintained in the past by legal imposition. For example,
it may be unnecessary to constitutionally assure freedom of expression in an environment
which, in the words of my fellow EFF co-founder John Gilmore, “treats censorship as a
malfunction” and re-routes proscribed ideas around it.
And, despite their fierce grip on the old legal structure, companies which trade in
information are likely to find that in their increasing inability to deal sensibly with technological issues, the courts will not produce results which are predictable enough to be
supportive of long-term enterprise. Every litigation becomes like a game of Russian roulette, depending on the depth the presiding judge’s clue-impairment.
Uncodified or adaptive “law,” while as “fast, loose, and out of control” as other emergent forms, is probably more likely to yield something like justice at this point. In fact, one
can already see in development new practices to suit the conditions of virtual commerce.
The life forms of information are evolving methods to protect their continued reproduction.
While I believe that the failure of law will almost certainly result in a compensating
re-emergence of ethics as the ordering template of society, this is a belief I don’t have
room to support here.
Instead, I think that, as in the case cited above, compensation for soft products will
be driven primarily by practical considerations, all of them consistent with the true properties of digital information, where the value lies in it, and how it can be both manipulated
and protected by technology.

Relationship and Its Tools
I believe one idea is central to understanding liquid commerce: Information economics, in the absence of objects, will be based more on relationship than possession.
One existing model for the future conveyance of intellectual property is real time
performance, a medium currently used only in theater, music, lectures, stand-up comedy
and pedagogy. I believe the concept of performance will expand to include most of the
information economy from multi-casted soap operas to stock analysis. In these instances,
commercial exchange will be more like ticket sales to a continuous show than the purchase of discrete bundles of that which is being shown.
The other model, of course, is service. The entire professional class—doctors, lawyers, consultants, architects, etc.—are already being paid directly for their intellectual

The Theories Behind Intellectual Property

23

property. Who needs copyright when you’re on a retainer?
In fact, this model was applied to much of what is now copyrighted until the late
18th Century. Before the industrialization of creation, writers, composers, artists, and the
like produced their products in the private service of patrons. Without objects to distribute in a mass market, creative people will return to a condition somewhat like this, except
that they will serve many patrons, rather than one.
We can already see the emergence of companies which base their existence on
supporting and enhancing the soft property they create rather than selling it by the shrinkwrapped piece or embedding it in widgets. . . .

Interaction and Protection
Direct interaction will provide a lot of intellectual property protection in the future,
and, indeed, it already has. No one knows how many software pirates have bought legitimate copies of a program after calling its publisher for technical support and being asked
for some proof of purchase, but I would guess the number is very high.
The same kind of controls will be applicable to “question and answer” relationships between authorities (or artists) and those who seek their expertise. Newsletters,
magazines, and books will be supplemented by the ability of their subscribers to ask
direct questions of authors.
Interactivity will be a billable commodity even in the absence of authorship. As
people move into the Net and increasingly get their information directly from its point of
production, unfiltered by centralized media, they will attempt to develop the same interactive ability to probe reality which only experience has provided them in the past. Live
access to these distant “eyes and ears” will be much easier to cordon than access to static
bundles of stored but easily reproducible information.
In most cases, control will be based on restricting access to the freshest, highest
bandwidth information. It will be a matter of defining the ticket, the venue, the performer,
and the identity of the ticket holder, definitions which I believe will take their forms from
technology, not law.
In most cases, the defining technology will be cryptography.

Crypto Bottling
Cryptography, as I’ve said perhaps too many times, is the “material” from which
the walls, boundaries—and bottles—of Cyberspace will be fashioned.
Of course there are problems with cryptography or any other purely technical
method of property protection. It has always appeared to me that the more security you
hide your goods behind, the more likely you are to turn your sanctuary into a target.
Having come from a place where people leave their keys in their cars and don’t even
have keys to their houses, I remain convinced that the best obstacle to crime is a society
with its ethics intact.
While I admit that this is not the kind of society most of us live in, I also believe that
a social over-reliance on protection by barricades rather than conscience will eventually
wither the latter by turning intrusion and theft into a sport, rather than a crime. This is
already occurring in the digital domain as is evident in the activities of computer crackers.
Furthermore, I would argue that initial efforts to protect digital copyright by copy
protection contributed to the current condition in which most otherwise ethical computer
users seem morally untroubled by their possession of pirated software.
Instead of cultivating among the newly computerized a sense of respect for the work

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of their fellows, early reliance on copy protection led to the subliminal notion that cracking into a software package somehow “earned” one the right to use it. Limited not by
conscience but by technical skill, many soon felt free to do whatever they could get away
with. This will continue to be a potential liability of the encryption of digitized commerce.
Furthermore, it’s cautionary to remember that copy protection was rejected by the
market in most areas. Many of the upcoming efforts to use cryptography-based protection
schemes will probably suffer the same fate. People are not going to tolerate much which
makes computers harder to use than they already are without any benefit to the user.
Nevertheless, encryption has already demonstrated a certain blunt utility. New subscriptions to various commercial satellite TV services sky-rocketed recently after their
deployment of more robust encryption of their feeds. This, despite a booming backwoods
trade in black decoder chips conducted by folks who’d look more at home running moonshine than cracking code.
Even in cases such as images, where the information is expected to remain fixed,
the unencrypted file could still be interwoven with code which could continue to protect
it by a wide variety of means.
In most of the schemes I can project, the file would be “alive” with permanently embedded software which could “sense” the surrounding conditions and interact with them. For
example, it might contain code which could detect the process of duplication and cause it to
self-destruct. Other methods might give the file the ability to “phone home” through the Net
to its original owner. The continued integrity of some files might require periodic “feeding”
with digital cash from their host, which they would then relay back to their authors.
Of course files which possess the independent ability to communicate upstream
sound uncomfortably like the Morris Internet Worm. “Live” files do have a certain viral
quality. And serious privacy issues would arise if everyone’s computer were packed with
digital spies.
The point is that cryptography will enable a lot of protection technologies which
will develop rapidly in the obsessive competition which has always existed between lockmakers and lock-breakers. But cryptography will not be used simply for making locks. It
is also at the heart of both digital signatures and the afore-mentioned digital cash, both of
which I believe will be central to the future protection of intellectual property.

An Economy of Verbs
The future forms and protections of intellectual property are densely obscured
from the entrance to the Virtual Age. Nevertheless, I can make (or reiterate) a few flat
statements which I earnestly believe won’t look too silly in fifty years.
In the absence of the old containers, almost everything we think we know about
intellectual property is wrong. We are going to have to unlearn it. We are going to have
to look at information as though we’d never seen the stuff before.
The protections which we will develop will rely far more on ethics and technology
than on law. Encryption will be the technical basis for most intellectual property protection.
(And should, for this and other reasons, be made more widely available.) The economy of
the future will be based on relationship rather than possession. It will be continuous rather
than sequential. And finally, in the years to come, most human exchange will be virtual
rather than physical, consisting not of stuff but the stuff of which dreams are made. Our
future business will be conducted in a world made more of verbs than nouns.

The Theories Behind Intellectual Property

25

John Perry Barlow: 1947–2018
John Perry Barlow was a friend of ours. He was also a lyricist for the Grateful Dead,
wordsmith, cowboy, co-founder of the Electronic Frontier Foundation, Burning Man regular and bon vivant extraordinaire. We could go on. John Perry was known not just for
the essay you have just read but for his extraordinary 1996 Declaration of the Independence of Cyberspace. This is how it begins.
Governments of the Industrial World, you weary giants of flesh
and steel, I come from Cyberspace, the new home of Mind. On behalf
of the future, I ask you of the past to leave us alone. You are not welcome
among us. You have no sovereignty where we gather. We have no elected
government, nor are we likely to have one, so I address you with no
greater authority than that with which liberty itself always speaks.
I declare the global social space we are building to be naturally
independent of the tyrannies you seek to impose on us. You have no moral
right to rule us nor do you possess any methods of enforcement we have
true reason to fear. Governments derive their just powers from the consent of the governed. You have neither solicited nor received ours. We
did not invite you. You do not know us, nor do you know our world. Cyberspace does not lie within your borders. Do not think that you can build
it, as though it were a public construction project. You cannot. It is an act
of nature and it grows itself through our collective actions.
You have not engaged in our great and gathering conversation, nor
did you create the wealth of our marketplaces. You do not know our culture, our ethics, or the unwritten codes that already provide our society
more order than could be obtained by any of your impositions. You claim
there are problems among us that you need to solve. You use this claim
as an excuse to invade our precincts. Many of these problems don’t exist.
Where there are real conflicts, where there are wrongs, we will identify
them and address them by our means. We are forming our own Social
Contract. This governance will arise according to the conditions of our
world, not yours.
Our world is different. Cyberspace consists of transactions, relationships, and thought itself, arrayed like a standing wave in the web of
our communications. Ours is a world that is both everywhere and nowhere, but it is not where bodies live. We are creating a world that all
may enter without privilege or prejudice accorded by race, economic
power, military force, or station of birth. We are creating a world where
anyone, anywhere may express his or her beliefs, no matter how singular, without fear of being coerced into silence or conformity. Your legal
concepts of property, expression, identity, movement, and context do not
apply to us. They are all based on matter, and there is no matter here.
Recent events—the manipulation of social media and elections, the attack on net neutrality, the invasions of privacy by spam, phishing, and big data commercialism—might
lead many to see these words as hopelessly naïve. Since the future of intellectual property
depends in so many ways on the future of the internet, that is a question we will discuss.
But here is a contrary view from Cindy Cohn, the Executive Director of EFF.
Barlow was sometimes held up as a straw man for a kind of naïve technoutopianism that believed that the Internet could solve all of humanity’s

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problems without causing any more. As someone who spent the past 27
years working with him at EFF, I can say that nothing could be further
from the truth. Barlow knew that new technology could create and empower evil as much as it could create and empower good. He made a conscious decision to focus the former: “I knew it’s also true that a good way
to invent the future is to predict it. So I predicted Utopia, hoping to give
Liberty a running start before the laws of Moore and Metcalfe delivered
up what Ed Snowden now correctly calls ‘turn-key totalitarianism.’” Barlow’s lasting legacy is that he devoted his life to making the Internet into
“a world that all may enter without privilege or prejudice accorded by
race, economic power, military force, or station of birth . . . a world where
anyone, anywhere may express his or her beliefs, no matter how singular,
without fear of being coerced into silence or conformity.”
Requiescat in pace, dude. The words will never be quite as elegant, the civil rights activism so good-humored, the vision of the future so all-encompassing. And the parties? The
parties will definitely suffer. We are all the poorer for your loss.
Questions:
Selling Wine Without Bottles was written from 1992 to 1993, right at the birth of the
World Wide Web. You live in the world John Perry Barlow was trying to predict.
1.) What are his essential points?
2.) What did he get right? Wrong? What struck you with the force of the new?
3.) Which of his predictions are still up for grabs? Does the Declaration of the Independence of Cyberspace still sound a chord, or is it both obsolete and hopelessly naïve?
4.) Focus on music. Judging by your own behavior and that of your peers, is he right
about the efficacy or lack of efficacy of the law? About ethics? About the new business
models of the music industry?

International News Service v. The Associated Press

248 U.S. 215 (1918)

Mr. Justice PITNEY delivered the opinion of the court.
The parties are competitors in the gathering and distribution of news and its publication for profit in newspapers throughout the United States. The Associated Press, which
was complainant in the District Court, is a cooperative organization, incorporated under
the Membership Corporations Law of the State of New York, its members being individuals who are either proprietors or representatives of about 950 daily newspapers published
in all parts of the United States. Complainant gathers in all parts of the world, by means
of various instrumentalities of its own, by exchange with its members, and by other appropriate means, news and intelligence of current and recent events of interest to newspaper readers and distributes it daily to its members for publication in their newspapers. The
cost of the service, amounting approximately to $ 3,500,000 per annum, is assessed upon
the members and becomes a part of their costs of operation, to be recouped, presumably
with profit, through the publication of their several newspapers. Under complainant’s by-

The Theories Behind Intellectual Property

27

laws each member agrees upon assuming membership that news received through complainant’s service is received exclusively for publication in a particular newspaper, language, and place specified in the certificate of membership, that no other use of it shall be
permitted, and that no member shall furnish or permit anyone in his employ or connected
with his newspaper to furnish any of complainant’s news in advance of publication to any
person not a member. And each member is required to gather the local news of his district
and supply it to the Associated Press and to no one else.
Defendant is a corporation organized under the laws of the State of New Jersey,
whose business is the gathering and selling of news to its customers and clients, consisting
of newspapers published throughout the United States, under contracts by which they pay
certain amounts at stated times for defendant’s service. It has wide-spread news-gathering
agencies; the cost of its operations amounts, it is said, to more than $ 2,000,000 per annum;
and it serves about 400 newspapers located in the various cities of the United States and
abroad, a few of which are represented, also, in the membership of the Associated Press.
The parties are in the keenest competition between themselves in the distribution
of news throughout the United States; and so, as a rule, are the newspapers that they
serve, in their several districts.
Complainant in its bill, defendant in its answer, have set forth in almost identical
terms the rather obvious circumstances and conditions under which their business is conducted. The value of the service, and of the news furnished, depends upon the promptness
of transmission, as well as upon the accuracy and impartiality of the news; it being essential that the news be transmitted to members or subscribers as early or earlier than similar
information can be furnished to competing newspapers by other news services, and that
the news furnished by each agency shall not be furnished to newspapers which do not
contribute to the expense of gathering it. And further, to quote from the answer: “Prompt
knowledge and publication of world-wide news is essential to the conduct of a modern
newspaper, and by reason of the enormous expense incident to the gathering and distribution of such news, the only practical way in which a proprietor of a newspaper can obtain
the same is, either through cooperation with a considerable number of other newspaper
proprietors in the work of collecting and distributing such news, and the equitable division
with them of the expenses thereof, or by the purchase of such news from some existing
agency engaged in that business.”
The bill was filed to restrain the pirating of complainant’s news by defendant in
three ways: First, by bribing employees of newspapers published by complainant’s members to furnish Associated Press news to defendant before publication, for transmission
by telegraph and telephone to defendant’s clients for publication by them; Second, by
inducing Associated Press members to violate its by-laws and permit defendant to obtain
news before publication; and Third, by copying news from bulletin boards and from early
editions of complainant’s newspapers and selling this, either bodily or after rewriting it,
to defendant’s customers. . . .
The only matter that has been argued before us is whether defendant may lawfully
be restrained from appropriating news taken from bulletins issued by complainant or any
of its members, or from newspapers published by them, for the purpose of selling it to
defendant’s clients. Complainant asserts that defendant’s admitted course of conduct in
this regard both violates complainant’s property right in the news and constitutes unfair
competition in business. And notwithstanding the case has proceeded only to the stage
of a preliminary injunction, we have deemed it proper to consider the underlying questions, since they go to the very merits of the action and are presented upon facts that are
not in dispute. As presented in argument, these questions are: 1. Whether there is any

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property in news; 2. Whether, if there be property in news collected for the purpose of
being published, it survives the instant of its publication in the first newspaper to which
it is communicated by the news-gatherer; and 3. Whether defendant’s admitted course of
conduct in appropriating for commercial use matter taken from bulletins or early editions
of Associated Press publications constitutes unfair competition in trade.
Complainant’s news matter is not copyrighted. It is said that it could not, in practice,
be copyrighted, because of the large number of dispatches that are sent daily; and, according to complainant’s contention, news is not within the operation of the copyright act. Defendant, while apparently conceding this, nevertheless invokes the analogies of the law of
literary property and copyright, insisting as its principal contention that, assuming complainant has a right of property in its news, it can be maintained (unless the copyright act
be complied with) only by being kept secret and confidential, and that upon the publication
with complainant’s consent of uncopyrighted news by any of complainant’s members in a
newspaper or upon a bulletin board, the right of property is lost, and the subsequent use of
the news by the public or by defendant for any purpose whatever becomes lawful. . . .
In considering the general question of property in news matter, it is necessary to
recognize its dual character, distinguishing between the substance of the information and
the particular form or collocation of words in which the writer has communicated it.
No doubt news articles often possess a literary quality, and are the subject of literary
property at the common law; nor do we question that such an article, as a literary production,
is the subject of copyright by the terms of the act as it now stands.
But the news element—the information respecting current events contained in the
literary production—is not the creation of the writer, but is a report of matters that ordinarily are publici juris; it is the history of the day. It is not to be supposed that the framers
of the Constitution, when they empowered Congress “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” (Const., Art I, § 8, par. 8), intended to confer
upon one who might happen to be the first to report a historic event the exclusive right
for any period to spread the knowledge of it.
We need spend no time, however, upon the general question of property in news
matter at common law, or the application of the copyright act, since it seems to us the case
must turn upon the question of unfair competition in business. And, in our opinion, this
does not depend upon any general right of property analogous to the common-law right
of the proprietor of an unpublished work to prevent its publication without his consent;
nor is it foreclosed by showing that the benefits of the copyright act have been waived.
We are dealing here not with restrictions upon publication but with the very facilities and
processes of publication. The peculiar value of news is in the spreading of it while it is
fresh; and it is evident that a valuable property interest in the news, as news, cannot be
maintained by keeping it secret. Besides, except for matters improperly disclosed, or published in breach of trust or confidence, or in violation of law, none of which is involved in
this branch of the case, the news of current events may be regarded as common property.
What we are concerned with is the business of making it known to the world, in which
both parties to the present suit are engaged. That business consists in maintaining a
prompt, sure, steady, and reliable service designed to place the daily events of the world
at the breakfast table of the millions at a price that, while of trifling moment to each reader,
is sufficient in the aggregate to afford compensation for the cost of gathering and distributing it, with the added profit so necessary as an incentive to effective action in the commercial world. The service thus performed for newspaper readers is not only innocent but
extremely useful in itself, and indubitably constitutes a legitimate business. The parties

The Theories Behind Intellectual Property

29

are competitors in this field; and, on fundamental principles, applicable here as elsewhere,
when the rights or privileges of the one are liable to conflict with those of the other, each
party is under a duty so to conduct its own business as not unnecessarily or unfairly to
injure that of the other. Hitchman Coal & Coke Co. v. Mitchell.
Obviously, the question of what is unfair competition in business must be determined with particular reference to the character and circumstances of the business. The
question here is not so much the rights of either party as against the public but their rights
as between themselves. See Morison v. Moat. And although we may and do assume that
neither party has any remaining property interest as against the public in uncopyrighted
news matter after the moment of its first publication, it by no means follows that there is
no remaining property interest in it as between themselves. For, to both of them alike,
news matter, however little susceptible of ownership or dominion in the absolute sense,
is stock in trade, to be gathered at the cost of enterprise, organization, skill, labor, and
money, and to be distributed and sold to those who will pay money for it, as for any other
merchandise. Regarding the news, therefore, as but the material out of which both parties
are seeking to make profits at the same time and in the same field, we hardly can fail to
recognize that for this purpose, and as between them, it must be regarded as quasi property, irrespective of the rights of either as against the public. . . .
Not only do the acquisition and transmission of news require elaborate organization and a large expenditure of money, skill, and effort; not only has it an exchange value
to the gatherer, dependent chiefly upon its novelty and freshness, the regularity of the
service, its reputed reliability and thoroughness, and its adaptability to the public needs;
but also, as is evident, the news has an exchange value to one who can misappropriate it.
The peculiar features of the case arise from the fact that, while novelty and freshness form so important an element in the success of the business, the very processes of
distribution and publication necessarily occupy a good deal of time. Complainant’s service, as well as defendant’s, is a daily service to daily newspapers; most of the foreign
news reaches this country at the Atlantic seaboard, principally at the City of New York,
and because of this, and of time differentials due to the earth’s rotation, the distribution
of news matter throughout the country is principally from east to west; and, since in speed
the telegraph and telephone easily outstrip the rotation of the earth, it is a simple matter
for defendant to take complainant’s news from bulletins or early editions of complainant’s members in the eastern cities and at the mere cost of telegraphic transmission cause
it to be published in western papers issued at least as early as those served by complainant. Besides this, and irrespective of time differentials, irregularities in telegraphic transmission on different lines, and the normal consumption of time in printing and
distributing the newspaper, result in permitting pirated news to be placed in the hands of
defendant’s readers sometimes simultaneously with the service of competing Associated
Press papers, occasionally even earlier.
Defendant insists that when, with the sanction and approval of complainant, and as
the result of the use of its news for the very purpose for which it is distributed, a portion of
complainant’s members communicate it to the general public by posting it upon bulletin
boards so that all may read, or by issuing it to newspapers and distributing it indiscriminately, complainant no longer has the right to control the use to be made of it; that when it
thus reaches the light of day it becomes the common possession of all to whom it is accessible; and that any purchaser of a news-paper has the right to communicate the intelligence
which it contains to anybody and for any purpose, even for the purpose of selling it for
profit to newspapers published for profit in competition with complainant’s members.
The fault in the reasoning lies in applying as a test the right of the complainant as

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T HE T HEORIES B EHIND I NTELLECTUAL P ROPERTY

against the public, instead of considering the rights of complainant and defendant, competitors in business, as between themselves. The right of the purchaser of a single newspaper to spread knowledge of its contents gratuitously, for any legitimate purpose not
unreasonably interfering with complainant’s right to make merchandise of it, may be admitted; but to transmit that news for commercial use, in competition with complainant—
which is what defendant has done and seeks to justify—is a very different matter. In doing
this defendant, by its very act, admits that it is taking material that has been acquired by
complainant as the result of organization and the expenditure of labor, skill, and money,
and which is salable by complainant for money, and that defendant in appropriating it and
selling it as its own is endeavoring to reap where it has not sown, and by disposing of it
to newspapers that are competitors of complainant’s members is appropriating to itself the
harvest of those who have sown. Stripped of all disguises, the process amounts to an unauthorized interference with the normal operation of complainant’s legitimate business
precisely at the point where the profit is to be reaped, in order to divert a material portion
of the profit from those who have earned it to those who have not; with special advantage
to defendant in the competition because of the fact that it is not burdened with any part of
the expense of gathering the news. The transaction speaks for itself, and a court of equity
ought not to hesitate long in characterizing it as unfair competition in business. . . .
It is to be observed that the view we adopt does not result in giving to complainant
the right to monopolize either the gathering or the distribution of the news, or, without
complying with the copyright act, to prevent the reproduction of its news articles; but
only postpones participation by complainant’s competitor in the processes of distribution
and reproduction of news that it has not gathered, and only to the extent necessary to
prevent that competitor from reaping the fruits of complainant’s efforts and expenditure,
to the partial exclusion of complainant, and in violation of the principle that underlies the
maxim sic utere tuo, etc. . . .
The decree of the Circuit Court of Appeals will be
Affirmed.
Mr. Justice CLARKE took no part in the consideration or decision of this case.
Mr. Justice HOLMES, dissenting.
When an uncopyrighted combination of words is published there is no general right
to forbid other people repeating them—in other words there is no property in the combination or in the thoughts or facts that the words express. Property, a creation of law, does
not arise from value, although exchangeable—a matter of fact. Many exchangeable values
may be destroyed intentionally without compensation. Property depends upon exclusion
by law from interference, and a person is not excluded from using any combination of
words merely because someone has used it before, even if it took labor and genius to make
it. If a given person is to be prohibited from making the use of words that his neighbors
are free to make some other ground must be found. One such ground is vaguely expressed
in the phrase unfair trade. This means that the words are repeated by a competitor in business in such a way as to convey a misrepresentation that materially injures the person who
first used them, by appropriating credit of some kind which the first user has earned. The
ordinary case is a representation by device, appearance, or other indirection that the defendant’s goods come from the plaintiff. But the only reason why it is actionable to make
such a representation is that it tends to give the defendant an advantage in his competition
with the plaintiff and that it is thought undesirable that an advantage should be gained in

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31

that way. Apart from that the defendant may use such unpatented devices and uncopyrighted combinations of words as he likes. The ordinary case, I say, is palming off the
defendant’s product as the plaintiff’s, but the same evil may follow from the opposite
falsehood—from saying, whether in words or by implication, that the plaintiff’s product
is the defendant’s, and that, it seems to me, is what has happened here.
Fresh news is got only by enterprise and expense. To produce such news as it is
produced by the defendant represents by implication that it has been acquired by the
defendant’s enterprise and at its expense. When it comes from one of the great newscollecting agencies like the Associated Press, the source generally is indicated, plainly
importing that credit; and that such a representation is implied may be inferred with some
confidence from the unwillingness of the defendant to give the credit and tell the truth.
If the plaintiff produces the news at the same time that the defendant does, the defendant’s
presentation impliedly denies to the plaintiff the credit of collecting the facts and assumes
that credit to the defendant. If the plaintiff is later in western cities it naturally will be
supposed to have obtained its information from the defendant. The falsehood is a little
more subtle, the injury a little more indirect, than in ordinary cases of unfair trade, but I
think that the principle that condemns the one condemns the other. It is a question of how
strong an infusion of fraud is necessary to turn a flavor into a poison. The dose seems to
me strong enough here to need a remedy from the law. But as, in my view, the only
ground of complaint that can be recognized without legislation is the implied misstatement, it can be corrected by stating the truth; and a suitable acknowledgment of the
source is all that the plaintiff can require. I think that within the limits recognized by the
decision of the Court the defendant should be enjoined from publishing news obtained
from the Associated Press for hours after publication by the plaintiff unless it gives express credit to the Associated Press; the number of hours and the form of acknowledgment to be settled by the District Court.
Mr. Justice McKENNA concurs in this opinion.
Mr. Justice BRANDEIS dissenting.
There are published in the United States about 2,500 daily papers. More than 800
of them are supplied with domestic and foreign news of general interest by the Associated
Press—a corporation without capital stock which does not sell news or earn or seek to
earn profits, but serves merely as an instrumentality by means of which these papers
supply themselves at joint expense with such news. Papers not members of the Associated Press depend for their news of general interest largely upon agencies organized for
profit. Among these agencies is the International News Service which supplies news to
about 400 subscribing papers. It has, like the Associated Press, bureaus and correspondents in this and foreign countries; and its annual expenditure in gathering and distributing
news is about $ 2,000,000. Ever since its organization in 1909, it has included among the
sources from which it gathers news, copies (purchased in the open market) of early editions of some papers published by members of the Associated Press and the bulletins
publicly posted by them. These items, which constitute but a small part of the news transmitted to its subscribers, are generally verified by the International News Service before
transmission; but frequently items are transmitted without verification; and occasionally
even without being re-written. In no case is the fact disclosed that such item was suggested by or taken from a paper or bulletin published by an Associated Press member.
No question of statutory copyright is involved. The sole question for our consideration is this: Was the International News Service properly enjoined from using, or causing to

32

T HE T HEORIES B EHIND I NTELLECTUAL P ROPERTY

be used gainfully, news of which it acquired knowledge by lawful means (namely, by reading publicly posted bulletins or papers purchased by it in the open market) merely because
the news had been originally gathered by the Associated Press and continued to be of value
to some of its members, or because it did not reveal the source from which it was acquired?
The “ticker” cases, the cases concerning literary and artistic compositions, and
cases of unfair competition were relied upon in support of the injunction. But it is admitted that none of those cases affords a complete analogy with that before us. The question
presented for decision is new; and it is important.
News is a report of recent occurrences. The business of the news agency is to gather
systematically knowledge of such occurrences of interest and to distribute reports thereof.
The Associated Press contended that knowledge so acquired is property, because it costs
money and labor to produce and because it has value for which those who have it not are
ready to pay; that it remains property and is entitled to protection as long as it has commercial value as news; and that to protect it effectively the defendant must be enjoined
from making, or causing to be made, any gainful use of it while it retains such value. An
essential element of individual property is the legal right to exclude others from enjoying
it. If the property is private, the right of exclusion may be absolute; if the property is
affected with a public interest, the right of exclusion is qualified. But the fact that a product
of the mind has cost its producer money and labor, and has a value for which others are
willing to pay, is not sufficient to ensure to it this legal attribute of property. The general
rule of law is, that the noblest of human productions—knowledge, truths ascertained, conceptions, and ideas—become, after voluntary communication to others, free as the air to
common use. Upon these incorporeal productions the attribute of property is continued
after such communication only in certain classes of cases where public policy has seemed
to demand it. These exceptions are confined to productions which, in some degree, involve
creation, invention, or discovery. But by no means all such are endowed with this attribute
of property. The creations which are recognized as property by the common law are literary, dramatic, musical, and other artistic creations; and these have also protection under
the copyright statutes. The inventions and discoveries upon which this attribute of property is conferred only by statute, are the few comprised within the patent law. There are
also many other cases in which courts interfere to prevent curtailment of plaintiff’s enjoyment of incorporeal productions; and in which the right to relief is often called a property
right, but is such only in a special sense. In those cases, the plaintiff has no absolute right
to the protection of his production; he has merely the qualified right to be protected as
against the defendant’s acts, because of the special relation in which the latter stands or
the wrongful method or means employed in acquiring the knowledge or the manner in
which it is used. Protection of this character is afforded where the suit is based upon breach
of contract or of trust or upon unfair competition.
The knowledge for which protection is sought in the case at bar is not of a kind
upon which the law has heretofore conferred the attributes of property; nor is the manner
of its acquisition or use nor the purpose to which it is applied, such as has heretofore
been recognized as entitling a plaintiff to relief. . . .
Plaintiff further contended that defendant’s practice constitutes unfair competition,
because there is “appropriation without cost to itself of values created by” the plaintiff;
and it is upon this ground that the decision of this court appears to be based. To appropriate
and use for profit, knowledge and ideas produced by other men, without making compensation or even acknowledgment, may be inconsistent with a finer sense of propriety; but,
with the exceptions indicated above, the law has heretofore sanctioned the practice. Thus
it was held that one may ordinarily make and sell anything in any form, may copy with

The Theories Behind Intellectual Property

33

exactness that which another has produced, or may otherwise use his ideas without his
consent and without the payment of compensation, and yet not inflict a legal injury; and
that ordinarily one is at perfect liberty to find out, if he can by lawful means, trade secrets
of another, however valuable, and then use the knowledge so acquired gainfully, although
it cost the original owner much in effort and in money to collect or produce.
Such taking and gainful use of a product of another which, for reasons of public policy, the law has refused to endow with the attributes of property, does not become unlawful
because the product happens to have been taken from a rival and is used in competition with
him. The unfairness in competition which hitherto has been recognized by the law as a basis
for relief, lay in the manner or means of conducting the business; and the manner or means
held legally unfair, involves either fraud or force or the doing of acts otherwise prohibited
by law. In the “passing off” cases (the typical and most common case of unfair competition),
the wrong consists in fraudulently representing by word or act that defendant’s goods are
those of plaintiff. See Hanover Milling Co. v. Metcalf. In the other cases, the diversion of
trade was effected through physical or moral coercion, or by inducing breaches of contract
or of trust or by enticing away employees. In some others, called cases of simulated competition, relief was granted because defendant’s purpose was unlawful; namely, not competition but deliberate and wanton destruction of plaintiff’s business. . . .
That competition is not unfair in a legal sense, merely because the profits gained are
unearned, even if made at the expense of a rival, is shown by many cases besides those
referred to above. He who follows the pioneer into a new market, or who engages in the
manufacture of an article newly introduced by another, seeks profits due largely to the labor
and expense of the first adventurer; but the law sanctions, indeed encourages, the pursuit.
He who makes a city known through his product, must submit to sharing the resultant trade
with others who, perhaps for that reason, locate there later. Canal Co. v. Clark; Elgin National Watch Co. v. Illinois Watch Co. He who has made his name a guaranty of quality,
protests in vain when another with the same name engages, perhaps for that reason, in the
same lines of business; provided, precaution is taken to prevent the public from being deceived into the belief that what he is selling was made by his competitor. One bearing a
name made famous by another is permitted to enjoy the unearned benefit which necessarily
flows from such use, even though the use proves harmful to him who gave the name value.
The means by which the International News Service obtains news gathered by the
Associated Press is also clearly unobjectionable. It is taken from papers bought in the
open market or from bulletins publicly posted. No breach of contract such as the court
considered to exist in Hitchman Coal & Coke Co. v. Mitchell; or of trust such as was
present in Morison v. Moat; and neither fraud nor force, is involved. The manner of use
is likewise unobjectionable. No reference is made by word or by act to the Associated
Press, either in transmitting the news to subscribers or by them in publishing it in their
papers. Neither the International News Service nor its subscribers is gaining or seeking
to gain in its business a benefit from the reputation of the Associated Press. They are
merely using its product without making compensation. See Bamforth v. Douglass Post
Card & Machine Co.; Tribune Co. of Chicago v. Associated Press. That, they have a legal
right to do; because the product is not property, and they do not stand in any relation to
the Associated Press, either of contract or of trust, which otherwise precludes such use.
The argument is not advanced by characterizing such taking and use a misappropriation.
It is also suggested, that the fact that defendant does not refer to the Associated Press
as the source of the news may furnish a basis for the relief. But the defendant and its subscribers, unlike members of the Associated Press, were under no contractual obligation to
disclose the source of the news; and there is no rule of law requiring acknowledgment to

34

T HE T HEORIES B EHIND I NTELLECTUAL P ROPERTY

be made where uncopyrighted matter is reproduced. The International News Service is said
to mislead its subscribers into believing that the news transmitted was originally gathered
by it and that they in turn mislead their readers. There is, in fact, no representation by either
of any kind. Sources of information are sometimes given because required by contract;
sometimes because naming the source gives authority to an otherwise incredible statement;
and sometimes the source is named because the agency does not wish to take the responsibility itself of giving currency to the news. But no representation can properly be implied
from omission to mention the source of information except that the International News
Service is transmitting news which it believes to be credible. . . .
The rule for which the plaintiff contends would effect an important extension of
property rights and a corresponding curtailment of the free use of knowledge and of ideas;
and the facts of this case admonish us of the danger involved in recognizing such a property right in news, without imposing upon news-gatherers corresponding obligations. A
large majority of the newspapers and perhaps half the newspaper readers of the United
States are dependent for their news of general interest upon agencies other than the Associated Press. The channel through which about 400 of these papers received, as the plaintiff alleges, “a large amount of news relating to the European war of the greatest
importance and of intense interest to the newspaper reading public” was suddenly closed.
The closing to the International News Service of these channels for foreign news (if they
were closed) was due not to unwillingness on its part to pay the cost of collecting the
news, but to the prohibitions imposed by foreign governments upon its securing news
from their respective countries and from using cable or telegraph lines running therefrom.
For aught that appears, this prohibition may have been wholly undeserved; and at all
events the 400 papers and their readers may be assumed to have been innocent. For aught
that appears, the International News Service may have sought then to secure temporarily
by arrangement with the Associated Press the latter’s foreign news service. For aught that
appears, all of the 400 subscribers of the International News Service would gladly have
then become members of the Associated Press, if they could have secured election thereto.
It is possible, also, that a large part of the readers of these papers were so situated that they
could not secure prompt access to papers served by the Associated Press. The prohibition
of the foreign governments might as well have been extended to the channels through
which news was supplied to the more than a thousand other daily papers in the United
States not served by the Associated Press; and a large part of their readers may also be so
located that they can not procure prompt access to papers served by the Associated Press.
A legislature, urged to enact a law by which one news agency or newspaper may
prevent appropriation of the fruits of its labors by another, would consider such facts and
possibilities and others which appropriate enquiry might disclose. Legislators might conclude that it was impossible to put an end to the obvious injustice involved in such appropriation of news, without opening the door to other evils, greater than that sought to be
remedied. Such appears to have been the opinion of our Senate which reported unfavorably
a bill to give news a few hours’ protection; and which ratified, on February 15, 1911, the
convention adopted at the Fourth International American Conference; and such was evidently the view also of the signatories to the International Copyright Union Of November
13, 1908; as both these conventions expressly exclude news from copyright protection.
Or legislators dealing with the subject might conclude, that the right to news values
should be protected to the extent of permitting recovery of damages for any unauthorized
use, but that protection by injunction should be denied, just as courts of equity ordinarily
refuse (perhaps in the interest of free speech) to restrain actionable libels, and for other

The Theories Behind Intellectual Property

35

reasons decline to protect by injunction mere political rights; and as Congress has prohibited courts from enjoining the illegal assessment or collection of federal taxes. If a
legislature concluded to recognize property in published news to the extent of permitting
recovery at law, it might, with a view to making the remedy more certain and adequate,
provide a fixed measure of damages, as in the case of copyright infringement. . . .
Courts are ill-equipped to make the investigations which should precede a determination of the limitations which should be set upon any property right in news or of the
circumstances under which news gathered by a private agency should be deemed affected
with a public interest. Courts would be powerless to prescribe the detailed regulations
essential to full enjoyment of the rights conferred or to introduce the machinery required
for enforcement of such regulations. Considerations such as these should lead us to decline to establish a new rule of law in the effort to redress a newly-disclosed wrong,
although the propriety of some remedy appears to be clear.
Questions:
Examine the arguments made by Pitney, Holmes and Brandeis in INS v. AP.
1.) Look back at the three basic questions asked on pages 2–3 of this book. How would
each judge answer them?
2.) Compare the legal tools proposed by Pitney and Holmes to solve the problems they
see. What type of “property” right is being proposed by each? What are its limits? Why?
3.) What position would each judge take on the FANtasy football hypothetical laid out
in Problem 1-2? Do they add anything to the arguments you already made?
4.) Is Pitney using the same arguments for property given in chapter 1 of The Public
Domain? In the excerpt from Locke?
5.) Does INS v. AP support or undermine Barlow’s thesis about law’s inability to regulate
information using the jurisprudential tools of property rights?
6.) Can we solve public goods problems without intellectual property rights? What
would Brandeis say?
7.) Does it change your attitude towards the case if you are told that the British government
had denied the use of the only transatlantic telegraph network to INS—owned by William
Randolph Hearst (the man on whom Citizen Kane was based)—because the government
objected to the INS’s coverage of the war? Hearst and his newspapers were thought to take
a pro-German line and to exaggerate the amount of war-related damage in the UK. As a
result of the ban, only the Associated Press had the ability to do real time reporting; taking
data from bulletin boards and published newspapers was the only way for INS papers to
report the war. How, if at all, does this change the way you structure or analyze the questions posed in the case? How would you use these facts if you were the lawyer for INS?
8.) The next excerpt is The New York Times article on the argument that INS put forward
in the Supreme Court. How does Mr. Untermyer present the issue? What is his answer to
the questions on pages 2–3? What alternative framings of the dispute does he offer?

36

T HE T HEORIES B EHIND I NTELLECTUAL P ROPERTY

The New York Times

NEWS PIRATING CASE
IN SUPREME COURT
Untermyer Argues for Dissolution of Associated Press Injuntion Against Hearst.

MAKES MONOPOLY CHARGE
Admits, However, That International
Has Sold News Sent Out by
the Other Service.
WASHINGTON, May 2.—Arguments
in proceedings brought in an effort to have
set aside injunctions restraining the International News Service, or Hearst Service,
from pirating news dispatches of The Associated Press began today in the Supreme
Court. The opening argument was made by
Samuel Untermyer, representing the Hearst
Service, who will conclude tomorrow, after
which Frederick W. Lehmann will present
The Associated Press’s side of the suit. Senator Johnson of California will close for the
Hearst Service.
Mr. Untermyer attacked especially the
contention of The Associated Press that
news had property value, and charged that if
the lower court injunctions were sustained
The Associated Press would be allowed to
become a “despotic monopoly.”
Admitting that the International News
Service had been guilty of selling news sent
out by the other organization, the attorney insisted The Associated Press had been guilty
of the same practice despite affidavits of employees of The Associated Press denying it.
The Associated Press also was attacked
by Mr. Untermyer for bringing the present
proceedings at a time when Great Britain
and the allied Governments had denied the
use of their cables to the International News
Service for the transmission of news. He declared The Associated Press took advantage
of this situation to institute the suit “because
they thought the International News Service
could be destroyed.”
In explanation of the action of the Allied
Governments, Mr. Untermyer declared it was
due to news matter sent by the International

News Service to its office in this country regarding the torpedoing of the British battleship Audacious and the naval battle of
Jutland, and because headlines printed in one
newspaper receiving the Hearst Service described London as being in flames.
Frequent questions were asked during the
argument by members of the court regarding
the property value of news. They wanted to
know also why, although the lower courts restrained the International News Service from
pirating Associated Press news through employees of newspapers taking the latter service, an appeal was taken to the Supreme
Court only from the part of the injunctions
enjoining the taking of news from bulletin
boards and early editions of Associated Press
newspapers.
Property Value of News
Mr. Untermyer summarized the questions
involved as follows:
“Is there a right of property in news or
knowledge of the news or in the quality of
‘firstness’ in the news that will survive its
publication by the gatherer in any of the
newspapers to which it has been delivered
for the express purpose of publication and
sale until the gatherer of the news and all of
its customers have secured their reward; or
does this news become public property as
soon as it has been published by any of the
papers to which it has been surrendered
without restriction for that specific purpose?
In other words, is there a sanctity of property
right reserved to the news gatherer against
the effects of publication as to matter that is
admittedly uncopyrightable greater than that
given by the statute to copyright matter?
“Assuming that the court would create a
precedent in a case where it would be necessary to preserve a business against piracy in
this case both parties and their respective
members and customers have apparently
from the time of their organization acted
upon exactly opposite construction and understanding of the law. News displayed on
bulletin boards and printed and sold in early
editions of newspapers has been regarded as
public property, which it is in law and in fact.
Each of these parties has freely taken the
other’s news and they are bound by that practical construction of their rights and obligations. The fact that one of them claims that it
verifies and rewrites the story it takes from
the other, while the other does not, is purely a

The Theories Behind Intellectual Property

question of business policy that in no wise affects their legal rights as determined by their
long continued acts.
“There can be no remedy in law or equity
unless actual damage is shown. Courts are
not established to try out moot or academic
questions. The complainant says it is not organized for profit, and that it makes no
money difference to it what is the financial
outcome of its activities. That being so, if
there are any remedies, they inhere in the
members and not in the corporation, which is
organized on the grotesque theory that it is
not engaged in business.
“The attempt by this order to protect complainant’s members in their local news in a
suit to which they are not parties and in
which the judgment could not, therefore, be
binding or reciprocal is without precedent or
reason. Conversely, if the defendant sued
the complainant, could it secure an injunction that would run in favor of all the defendant’s stockholders and customers?
Element of Competition
“There is no element of unfair competition
involved. The defendant is not seeking to
palm off complainant’s news as its (defendant’s) news, nor as complainant’s news, but
simply as news that has been made available
to everyone. It has not secured it surreptitiously or as the result of a breach of contract,
but publicly by paying for the paper containing it and in which it was authorized to be
published. If defendant is right in its contention that it is public property, as the parties
have always regarded it, there is nothing unfair in taking it. If, contrary to precedent and
to the acts of the parties as evidencing their
constructions of their rights—both parties—
it is now held to be private property, its use
would be enjoined on that ground, but in no
event on the theory of what is known as unfair competition. There is no such element in
this case.
“Both the parties are in the position with
respect to news that has been published of
the man with an unpatentable idea or trade
secret that has cost him years of labor and
vast sums of money to develop. Or of the ar-

37

chitect who has created a beautiful structure,
or the landscape gardener who has laid out a
novel garden, or of any one of the many inventions in beauty, usefulness, and science,
that are not patentable. So long as he keeps
these things to himself he will be protected
against their surreptitious taking. When he
releases them they belong to the public.
“What the complainant is here trying to
do is to release the news and at the same
time hold on to it. That is impossible and in
this case it is inequitable, for in the past it
has been taken from the defendant, and now
that events have temporarily changed, it
seeks to escape from the consequences of its
own action.
Calls Decision Dangerous.
“There is a manifest inconsistency in the
attitude of the District Court, when it very
properly declined to differentiate between
‘tips’ and ‘re-writes,’ decided that the practice was universal in the newspaper trade and
yet enjoined the defendant from continuing
it on condition that the complainant would
submit to a like injunction which the later
was, of course, delighted to do at that particular juncture.
“This decision sets up a new and dangerous
rule. The measure of a plaintiff’s right is now
made dependent, not on the extent to which
the defendant has infringed a definite known
rule of law, but upon an intangible unknown
element that depends upon the extent of the
activities of the plaintiff and those whom it
happens at the moment to represent. If the
news is taken from a paper of local circulation
it may be immediately taken and used all over
the United States except in that locality, for its
commercial value will have passed away after
the paper has been circulated in its own town.
If, however, it happens to be a member of The
Associated Press that same item of local news
becomes ipso facto inviolate until every one
of the 1,630 Associated Press newspapers in
the United States and possibly until after The
Associated Press agencies in foreign countries
have utilized it. Is not this a reductio ad absurdum?”

38

T HE T HEORIES B EHIND I NTELLECTUAL P ROPERTY

James Boyle, Thomas Jefferson Writes a Letter

Please read The Public Domain pp 17–41

On August 13, 1813, Thomas Jefferson took up his pen to write to Isaac McPherson. It
was a quiet week in Jefferson’s correspondence. He wrote a letter to Madison about the
appointment of a tax assessor, attempted to procure a government position for an acquaintance, produced a fascinating and lengthy series of comments on a new “Rudiments
of English Grammar,” discussed the orthography of nouns ending in “y,” accepted the
necessary delay in the publication of a study on the anatomy of mammoth bones, completed a brief biography of Governor Lewis, and, in general, confined himself narrowly
in subject matter. But on the 13th of August, Jefferson’s mind was on intellectual property, and most specifically, patents.
Jefferson’s writing is, as usual, apparently effortless. Some find his penmanship a
little hard to decipher. To me, used to plowing through the frenzied chicken tracks that
law students produce during exams, it seems perfectly clear. If handwriting truly showed
the architecture of the soul, then Jefferson’s would conjure up Monticello or the University of Virginia. There are a few revisions and interlineations, a couple of words squeezed
in with a caret at the bottom of the line, but for the most part the lines of handwriting
simply roll on and on—“the fugitive fermentation of an individual brain,” to quote a
phrase from the letter, caught in vellum and ink, though that brain has been dust for more
than a century and a half. . . .
Read the rest
Questions:
Jefferson is a deeply problematic figure. Polymath. Principal drafter of the Declaration of
Independence, with its majestic words about equality and inalienable rights. (He included
a draft clause disavowing slavery, which was rejected by others.) Yet he himself was a
slaveholder! He had over 600 slaves, freeing only 2 during his life and 7 after his death.
Knowing that, why pay any attention to his words? First, just as the Declaration of Independence continues to be important to American law, so too does Jefferson’s vision of intellectual property, a vision that appears to have been central to the Constitutional
framework for copyright and patent and one that continues to be referenced, explicitly and
implicitly, by courts. Jefferson even played a major role in the drafting of the first patent
act and served on the country’s first patent examination board. Second, Jefferson’s ideas
about intellectual property deserve attention in their own right, the evil of his actions notwithstanding. They force us to articulate the differences between intellectual property and
tangible property in ways that are central to the subject.
1.) What problems is Jefferson concerned with? Beyond the question of incentives what
additional dangers did he and Macaulay see? Does Macaulay see intellectual property as
a matter of necessary incentive, restraint on competition, or restriction of speech?
2.) What are the basic differences between the baseline assumptions of Diderot and Condorcet? What are the strongest arguments for and against the notion of a natural right to
intellectual property?
3.) Boyle lays out a multi-part “Jefferson Warning” that he says is vital to making good
intellectual property decisions. How would you respond to that formulation of good policy if you were General Counsel of the Recording Industry Association of America? Of
Google? Of the National Academy of Sciences? Diderot?

CHAPTER TWO

Intellectual Property & the Constitution

[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;”
U.S. Constitution Art. I, § 8, cl. 8.

Introduction
In this chapter, we explore the constitutional sources of (and possible limitations) on
Congress’s powers to make intellectual property law. There are two reasons to want to do
this. First, it will help us understand the reach of, and the limits on, Federal intellectual
property law, and in particular the way those limits are shaped by interaction between three
constitutional provisions, Art. I, § 8, cl. 8 quoted above,‡ the Commerce Clause and the First
Amendment. Second, and perhaps more important, understanding the animating
constitutional provisions, their goals, and their inner tensions, will shine a light on the way
that the courts interpret existing intellectual property law. There are three basic conceptual
boxes in the Federal intellectual property system (together with a newly created Federal
trade secrecy regime) and Congress, and the happenstance of technological development,
keep depositing new material, new social practices and new technology into those
conceptual boxes. The ideas expressed in the constitutional sources and limitations explored
in this sector may shape the way that judges interpret the law in the process that follows.
Congress’s power to legislate in any given field must be founded on one of the
powers enumerated in Article I, section 8 of the Constitution. Its power to offer exclusive
rights to authors and inventors (i.e. copyright and patent) derives from the Intellectual
Property Clause which is reproduced at the top of this page.
At the outset, there are a few notable things about this grant of power. First, it is
the only clause that comes with its own, built-in justification: “to promote the progress
of science and useful arts.” None of the other clauses list a rationale. For example,
Congress also has the power:
• To borrow money on the credit of the United States;
• To regulate commerce with foreign nations, and among the several states, and
with the Indian tribes;
• To establish a uniform rule of naturalization, and uniform laws on the subject
of bankruptcies throughout the United States;
• To coin money, regulate the value thereof, and of foreign coin, and fix the
standard of weights and measures;
• To provide for the punishment of counterfeiting the securities and current coin
of the United States;
• To establish post offices and post roads.
Like some other clauses, the Intellectual Property Clause contains obvious modifiers: “by securing for limited Times.” But as we will see, the courts have also found
‡ This clause is variously referred to as the Copyright Clause, Copyright and Patent Clause, and Intellectual
Property Clause.

40

I NTELLECTUAL P ROPERTY & THE C ONSTITUTION

other, less immediately obvious, limitations in the clause. The Trade-Mark Cases, which
follow this introduction, represent one example of such a limitation, the requirement of
originality, though the constricted vision of Congress’s Commerce Clause power is no
longer good law. (Today, the Federal Trademark statute, the Lanham Act, is seen as well
within Congress’s power under the Commerce Clause. The same is true of Federal trade
secrecy protection.) Feist reiterates that originality is constitutionally required for grants
of copyright. The excerpted fragment of the John Deere case provides a robust assertion
of the limits of Congressional power in the context of patent law. But important questions
remain. If there are any strong limitations imposed by the Intellectual Property Clause,
do they also limit the power of the Congress under the other clauses of the Constitution?
For example, if under the Intellectual Property Clause, Congress is forbidden from
creating permanent copyrights or rights over unoriginal collections of facts, may it do so
under the Commerce Clause instead?
These questions are given particular saliency by two developments; first, the
increased importance of intellectual property rights in an information age that runs from
the Internet to the Human Genome project and second, a relatively uniform expansion of
intellectual property rights over the last fifty years.
We will turn first to the question of the sources of Congressional power to make
intellectual property law, the limits those sources impose and the interaction between
different grants of power. After that, we will turn to the limitations imposed by the First
Amendment. Before heading into the cases, though, we are going to think through the
Intellectual Property Clause. The goal is to come up with a range of its possible meanings.
P ROBLEM 2-1
C ONSTITUTIONAL I NTERPRETATION .
[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;” U.S.
Constitution Art. I, § 8, cl. 8.
Find each word or phrase in this clause that could constitute a limitation on
Congress’s power. Explain what the limitation would be, why one might believe that
such a limitation should be read into the clause and what kind of assumptions your
possible reasoning makes about the goal or function or meaning of the clause. In
addition, explain what implication each interpretation would have for a judge or
other decision maker trying to interpret a piece of legislation made under the clause.

1.) Limitations on Congressional Power: Originality

The Trade-Mark Cases

U.S. v. Steffens; U.S. v. Wittemann; U.S. v. Johnson
100 U.S. 82 (1879)
Mr. Justice MILLER delivered the opinion of the court.
The three cases whose titles stand at the head of this opinion are criminal

Limitations on Congressional Power: Originality

41

prosecutions for violations of what is known as the trade-mark legislation of Congress.
The first two are indictments in the southern district of New York, and the last is an
information in the southern district of Ohio. In all of them the judges of the circuit courts
in which they are pending have certified to a difference of opinion on what is
substantially the same question; namely, are the acts of Congress on the subject of trademarks founded on any rightful authority in the Constitution of the United States?
. . . The right to adopt and use a symbol or a device to distinguish the goods or property made or sold by the person whose mark it is, to the exclusion of use by all other persons,
has been long recognized by the common law and the chancery courts of England and of
this country, and by the statutes of some of the States. It is a property right for the violation
of which damages may be recovered in an action at law, and the continued violation of it
will be enjoined by a court of equity, with compensation for past infringement. This
exclusive right was not created by the act of Congress, and does not now depend upon it for
its enforcement. The whole system of trade-mark property and the civil remedies for its
protection existed long anterior to that act, and have remained in full force since its passage.
These propositions are so well understood as to require neither the citation of
authorities nor an elaborate argument to prove them.
As the property in trade-marks and the right to their exclusive use rest on the laws
of the States, and, like the great body of the rights of person and of property, depend on
them for security and protection, the power of Congress to legislate on the subject, to
establish the conditions on which these rights shall be enjoyed and exercised, the period
of their duration, and the legal remedies for their enforcement, if such power exist at all,
must be found in the Constitution of the United States, which is the source of all powers
that Congress can lawfully exercise.
In the argument of these cases this seems to be conceded, and the advocates for the
validity of the acts of Congress on this subject point to two clauses of the Constitution, in
one or in both of which, as they assert, sufficient warrant may be found for this legislation.
The first of these is the eighth clause of sect. 8 of the first article. That section,
manifestly intended to be an enumeration of the powers expressly granted to Congress,
and closing with the declaration of a rule for the ascertainment of such powers as are
necessary by way of implication to carry into efficient operation those expressly given,
authorizes Congress, by the clause referred to, ‘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.’
As the first and only attempt by Congress to regulate the right of trade-marks is to
be found in the act of July 8, 1870, to which we have referred, entitled ‘An Act to revise,
consolidate, and amend the statutes relating to patents and copyrights,’ terms which have
long since become technical, as referring, the one to inventions and the other to the
writings of authors, it is a reasonable inference that this part of the statute also was, in
the opinion of Congress, an exercise of the power found in that clause of the Constitution.
It may also be safely assumed that until a critical examination of the subject in the courts
became necessary, it was mainly if not wholly to this clause that the advocates of the law
looked for its support.
Any attempt, however, to identify the essential characteristics of a trade-mark with
inventions and discoveries in the arts and sciences, or with the writings of authors, will
show that the effort is surrounded with insurmountable difficulties.
The ordinary trade-mark has no necessary relation to invention or discovery. The
trade-mark recognized by the common law is generally the growth of a considerable
period of use, rather than a sudden invention. It is often the result of accident rather than

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I NTELLECTUAL P ROPERTY & THE C ONSTITUTION

design, and when under the act of Congress it is sought to establish it by registration,
neither originality, invention, discovery, science, nor art is in any way essential to the right
conferred by that act. If we should endeavor to classify it under the head of writings of
authors, the objections are equally strong. In this, as in regard to inventions, originality is
required. And while the word writings may be liberally construed, as it has been, to include
original designs for engravings, prints, &c., it is only such as are original, and are founded
in the creative powers of the mind. The writings which are to be protected are the fruits of
intellectual labor, embodied in the form of books, prints, engravings, and the like. The
trade-mark may be, and generally is, the adoption of something already in existence as the
distinctive symbol of the party using it. At common law the exclusive right to it grows out
of its use, and not its mere adoption. By the act of Congress this exclusive right attaches
upon registration. But in neither case does it depend upon novelty, invention, discovery,
or any work of the brain. It requires no fancy or imagination, no genius, no laborious
thought. It is simply founded on priority of appropriation. We look in vain in the statute
for any other qualification or condition. If the symbol, however plain, simple, old, or wellknown, has been first appropriated by the claimant as his distinctive trade-mark, he may
by registration secure the right to its exclusive use. While such legislation may be a
judicious aid to the common law on the subject of trade-marks, and may be within the
competency of legislatures whose general powers embrace that class of subjects, we are
unable to see any such power in the constitutional provision concerning authors and
inventors, and their writings and discoveries.
The other clause of the Constitution supposed to confer the requisite authority on
Congress is . . . as follows: ‘The Congress shall have power to regulate commerce with
foreign nations, and among the several States, and with the Indian tribes.’
The argument is that the use of a trade-mark—that which alone gives it any
value—is to identify a particular class or quality of goods as the manufacture, produce,
or property of the person who puts them in the general market for sale; that the sale of
the article so distinguished is commerce; that the trade-mark is, therefore, a useful and
valuable aid or instrument of commerce, and its regulation by virtue of the clause belongs
to Congress, and that the act in question is a lawful exercise of this power. . . .
The question, therefore, whether the trade-mark bears such a relation to commerce in
general terms as to bring it within congressional control, when used or applied to the classes
of commerce which fall within that control, is one which, in the present case, we propose to
leave undecided. We adopt this course because when this court is called on in the course of
the administration of the law to consider whether an act of Congress, or of any other
department of the government, is within the constitutional authority of that department, a
due respect for a co-ordinate branch of the government requires that we shall decide that it
has transcended its powers only when that is so plain that we cannot avoid the duty.
In such cases it is manifestly the dictate of wisdom and judicial propriety to decide
no more than is necessary to the case in hand. That such has been the uniform course of
this court in regard to statutes passed by Congress will readily appear to any one who
will consider the vast amount of argument presented to us assailing them as
unconstitutional, and he will count, as he may do on his fingers, the instances in which
this court has declared an act of Congress void for want of constitutional power.
Governed by this view of our duty, we proceed to remark that a glance at the
commerce clause of the Constitution discloses at once what has been often the subject of
comment in this court and out of it, that the power of regulation there conferred on
Congress is limited to commerce with foreign nations, commerce among the States, and
commerce with the Indian tribes. . . .

Limitations on Congressional Power: Originality

43

When, therefore, Congress undertakes to enact a law, which can only be valid as a
regulation of commerce, it is reasonable to expect to find on the face of the law, or from
its essential nature, that it is a regulation of commerce with foreign nations, or among the
several States, or with the Indian tribes. If not so limited, it is in excess of the power of
Congress. If its main purpose be to establish a regulation applicable to all trade, to
commerce at all points, especially if it be apparent that it is designed to govern the
commerce wholly between citizens of the same State, it is obviously the exercise of a
power not confided to Congress.
We find no recognition of this principle in the chapter on trade-marks in the Revised
Statutes. We would naturally look for this in the description of the class of persons who
are entitled to register a trade-mark, or in reference to the goods to which it should be
applied. If, for instance, the statute described persons engaged in a commerce between the
different States, and related to the use of trade-marks in such commerce, it would be
evident that Congress believed it was acting under the clause of the Constitution which
authorizes it to regulate commerce among the States. So if, when the trade-mark has been
registered, Congress had protected its use on goods sold by a citizen of one State to
another, or by a citizen of a foreign State to a citizen of the United States, it would be seen
that Congress was at least intending to exercise the power of regulation conferred by that
clause of the Constitution. But no such idea is found or suggested in this statute. . . .
The questions in each of these cases being an inquiry whether these statutes can be
upheld in whole or in part as valid and constitutional, must be answered in the negative.
Questions:
1.) The Court says “[i]f we should endeavor to classify it under the head of writings of
authors, the objections are equally strong. In this, as in regard to inventions, originality
is required.” Where does this limitation appear in the Intellectual Property Clause? Is
there a textual basis? A philosophical basis? Both?
2.) “In such cases it is manifestly the dictate of wisdom and judicial propriety to decide no
more than is necessary to the case in hand. That such has been the uniform course of this
court in regard to statutes passed by Congress will readily appear to any one who will
consider the vast amount of argument presented to us assailing them as unconstitutional,
and he will count, as he may do on his fingers, the instances in which this court has declared
an act of Congress void for want of constitutional power.” Yet this time the Court does
declare the Act unconstitutional, despite the fact that the word “original” does not appear in
the Intellectual Property Clause. Why? Does the discussion of the Commerce Clause, and
its assumptions about Federal power, suggest an answer? Or is the originality requirement,
in your view, well grounded in the purpose and language of the Intellectual Property Clause?

Feist v. Rural Telephone Service
499 U.S. 340 (1991)

The Feist opinion can be found in Chapter 11, starting at page 287. Please read it and
then answer the following questions.

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I NTELLECTUAL P ROPERTY & THE C ONSTITUTION

Questions:
1.) What would Justice Pitney, who wrote the majority in INS v. AP, say about this case?
2.) Is this merely a case about statutory interpretation? Or does it reinforce the TradeMark Cases’ originality requirement?
3.) From an information economics point of view, telephone directories look like “public
goods.” They are non-excludable and non-rival. Yet this decision refuses to extend
copyright to them. Is there an economic justification for such a result as well as a
constitutional one?
4.) Think of innovation and culture as an input-output system. There are inputs (the raw
material from which the innovation or the cultural product is produced) and outputs (the
book, the invention, the movie, the software program.) Intellectual property schemes give
control and limited monopolies over outputs, but this also risks raising the cost of the
inputs for the next generation of innovation or culture. What “balance” does the Feist
case set in terms of the inputs and outputs of copyright? Why leave unoriginal
compilations of fact free?
5.) It is the day after the Feist decision and you are the lawyer for the winners. Might
you still try and negotiate a license with the telephone company for their directory
information, even if at a lower price? Why, when you could take it for free? Does this
tell you anything about how excludable and non-rival the telephone directory truly is?

2.) Limitations on Congressional Power: Purpose and
Novelty/Non-Obviousness

Graham v. John Deere Co.

383 U.S. 1 (1966)

Please read sections I–IV of the opinion, which can be found on page 744.
Questions:
1.) Give the most expansive possible reading of the holding of Graham in terms of the
limitations set by the Copyright and Patent Clause on Congress’s power. Now the most
limited. Which is correct, in your view? Is there some middle position?
2.) Does this ruling apply only to Congress’s patent legislation or does it apply equally
to patent and copyright? Why?
3.) Does Graham also offer interpretive guidance to courts seeking to interpret intellectual property legislation? If so, how would you describe that guidance?

Limitations on Congressional Power: Fixation & the Interaction Between Clauses

45

3.) Limitations on Congressional Power: Fixation & the Interaction
Between Clauses
P ROBLEM 2-2
C ONSTITUTIONAL I NTERPRETATION .
Read Moghadam and Martignon and answer the following questions:
1.) Why do we have a fixation requirement in copyright? Offer reasons that
resonate with a.) the Copyright Clause’s goal of encouraging creative activity that
leads to actual access to the works for citizens and consumers, followed by an entry
of the work into the public domain b.) the need to make copyright consistent with
the First Amendment c.) the issue of “formal realizability”—defining the metes and
bounds of the right so that one can tell what activities do and do not infringe.
2.) You are a plaintiff challenging the constitutionality of the anti-bootlegging
statute discussed in Moghadam and Martignon—both the civil and criminal
provisions. What specific challenges should you bring? How should the Court rule?
3.) More generally, does the Intellectual Property Clause ever constrain Congress’s power under the Commerce clause? When and under what circumstances?

U.S. v. Moghadam

175 F.3d 1269 (11th Cir. 1999)
ANDERSON, Chief Judge.
In 1994, Congress passed a statute criminalizing the unauthorized recording, the
transmission to the public, and the sale or distribution of or traffic in unauthorized
recordings of live musical performances. See 18 U.S.C. § 2319A. Appellant Ali
Moghadam was convicted of violating that law (herein sometimes referred to as the “antibootlegging statute”) after he pleaded guilty to knowingly distributing, selling, and
trafficking in bootleg (unauthorized) compact discs featuring live musical performances
by recording artists including Tori Amos and the Beastie Boys. . . . In the district court,
Moghadam moved to dismiss the indictment, arguing that the statute was
unconstitutional because it did not fall within any of the federal legislative powers
enumerated in Article I, § 8 of the Constitution. The government responded that it was
constitutional under either the Copyright Clause or the Commerce Clause. . . . For the
reasons that follow, and in the limited circumstances of this case, we reject Moghadam’s
constitutional challenge, and therefore affirm Moghadam’s conviction.
I. Background on the Anti-Bootlegging Statute
A brief overview of the history of statutory protection for music and musical performances is in order. Musicians or performers may enjoy copyright or copyright-like
protection in three things, which are important to keep distinct. . . . First, [there is the]
musical composition. . . . [Second, i]n 1971, Congress extended copyright protection to
sound recordings. This meant that persons who made unauthorized reproductions of records
or tapes . . . could be prosecuted or face civil liability for copyright infringement. . . .
However . . . [n]o protection at the federal level extended directly to unrecorded

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I NTELLECTUAL P ROPERTY & THE C ONSTITUTION

live musical performances. Therefore, a bootlegger could surreptitiously record a live
musical performance and engage in unauthorized distribution of the recording or copies
thereof, without having violated copyright law. . . . [The anti-bootlegging statute was
enacted as part of the URAA, a statute implementing the agreements reached as part of
the TRIPS Uruguay Round. It forbade making, distributing or trafficking in such
(unauthorized) recordings for commercial gain or private financial advantage.] The
URAA also enacted a similar provision establishing civil liability for the same conduct
(but omitting the commercial advantage or private financial gain requirement). . . .
[W]hat little legislative history exists tends to suggest that Congress viewed the antibootlegging provisions as enacted pursuant to its Copyright Clause authority.
The rights created by the anti-bootlegging provisions in URAA are actually hybrid
rights that in some ways resemble the protections of copyright law but in other ways are
distinct from them. . . . Congress could have amended 17 U.S.C. § 102 to include live
musical performances in the list of protectable subject matter, but it did not do so. Likewise,
it is unclear whether longstanding concepts generally applicable to copyright law such as
fair use, the work-for-hire doctrine, limited duration, and the statute of limitations, carry
over to the anti-bootlegging provisions. Finally, in contrast to the six exclusive rights of a
copyright owner spelled out in 17 U.S.C. § 106, it appears that the only exclusive right
created by the anti-bootlegging statute is to record and/or re-communicate one’s
performance. For all of these reasons, the protections that the anti-bootlegging statutes
confer on musicians are best described as “quasi-copyright” or sui generis protections.
II. Whether the Anti-Bootlegging Statute Can Be Sustained Under the Copyright
Clause of the Constitution
Our analysis of the constitutionality of § 2319A begins with the Copyright Clause of
the United States Constitution. By that Clause, Congress is empowered “to promote the
Progress of Science and the useful Arts, by securing for limited Times to Authors and
Inventors the exclusive Right to their respective Writings and Discoveries.” U.S. Const.
art. I, § 8, cl. 8. This positive grant of legislative authority includes several limitations. See,
e.g., Feist (holding that the word “Writings” in the Copyright Clause allows Congress to
extend protection only to works of authorship that are original). Of these limitations,
Moghadam has relied in the instant case only on the concept of “fixation” which is said to
be embedded in the term “Writings.”
The concept of fixation suggests that works are not copyrightable unless reduced to
some tangible form. . . . Of course, the term “Writings” has been interpreted so broadly as
to include much more than writings in the literal sense, or the lay definition of the word. In
fact, since a sound recording qualifies as a “Writing” in the constitutional sense “it is now
clear that a writing may be perceptible either visually or aurally.” But the fixation
requirement seems to have persisted through this expansion. Thus, although in the modern
era the term “Writings” allows Congress to extend copyright protection to a great many
things, those things have always involved some fixed, tangible and durable form.
Moghadam argues that a live performance, by definition, has not been reduced to a
tangible form or fixed as of the time of the performance. See Nimmer, The End of Copyright
(“No respectable interpretation of the word ‘writings’ embraces an untaped performance of
someone singing at Carnegie Hall.”) Moghadam argues that, but for the bootlegger’s
decision to record, a live performance is fleeting and evanescent.
Because we affirm the conviction in the instant case on the basis of an alternative
source of Congressional power, we decline to decide in this case whether the fixation
concept of Copyright Clause can be expanded so as to encompass live performances that

Limitations on Congressional Power: Fixation & the Interaction Between Clauses

47

are merely capable of being reduced to tangible form, but have not been.9 For purposes
of this case, we assume arguendo, without deciding, that the above described problems
with the fixation requirement would preclude the use of the Copyright Clause as a source
of Congressional power for the anti-bootlegging statute.
III. Whether the Anti-Bootlegging Statute Can Be Sustained Under the Commerce
Clause of the Constitution
The government contends, however, that the anti-bootlegging statute is permissible
legislation under Congress’s Commerce Clause power.10 Congress has the legislative
authority “to regulate Commerce with foreign Nations, and among the several States.”
U.S. Const. art. I, § 8, cl. 3. . . . Because Congress thought it was acting under the
Copyright Clause, predictably there are no legislative findings in the record regarding the
effect of bootlegging of live musical performances on interstate or foreign commerce. . . .
However, the lack of such findings does not rule out the Commerce Clause as a possible
source of legislative authority applicable to the statute under challenge. . . .
Section 2319A clearly prohibits conduct that has a substantial effect on both
commerce between the several states and commerce with foreign nations. The link
between bootleg compact discs and interstate commerce and commerce with foreign
nations is self-evident. . . . Moreover, the type of conduct that Congress intended to
regulate by passing the anti-bootlegging statute is by its very nature economic activity,
which distinguishes the statute from the Gun-Free School Zones Act struck down in
Lopez, which in criminalizing the possession of handguns within 1000 feet of a school,
“had nothing to do with ‘commerce’ or any sort of economic enterprise, however broadly
one might define those terms.” We hold that the anti-bootlegging statute has a sufficient
connection to interstate and foreign commerce to meet the Lopez test.
The more difficult question in this case is whether Congress can use its Commerce
Clause power to avoid the limitations that might prevent it from passing the same
legislation under the Copyright Clause. As noted above, we assume arguendo that the
Copyright Clause could not sustain this legislation because live performances, being
unfixed, are not encompassed by the term “Writings” which includes a fixation
requirement. The government argues that the anti-bootlegging conviction in this case can
be sustained under the Commerce Clause. We turn now to this issue.
In general, the various grants of legislative authority contained in the Constitution
stand alone and must be independently analyzed. In other words, each of the powers of
Congress is alternative to all of the other powers, and what cannot be done under one of
them may very well be doable under another. Perhaps the most prominent example of this
principle is Heart of Atlanta Motel, Inc. v. United States (1964). There, the Supreme Court
considered the constitutionality of the public accommodation provisions of the Civil
Rights Act of 1964. The earlier Civil Rights Cases (1883) had declared unconstitutional
We note that the anti-bootlegging statute may be faced with another constitutional problem under the
Copyright Clause. The Clause allows Congress to extend protection to authors only for “Limited Times.”
The protection afforded to live performances by § 2319A, however, contains no express time limitation and
would arguably persist indefinitely. However, Moghadam has not preserved this argument, see infra, and we
decline to address the argument in light of our disposition of this case.
10
Congress’s failure to cite the Commerce Clause as grounds for § 2319A does not eliminate the possibility
that the Commerce Clause can sustain this legislation. “The constitutionality of action taken by Congress
does not depend on recitals of the power which it undertakes to exercise,” Woods v. Cloyd W. Miller Co.
(1948), and “in exercising the power of judicial review,” we look only at “the actual powers of the national
government,” Timmer v. Michigan Dept. of Commerce (1997).
9

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similar provisions of the Civil Rights Act of 1875 because they regulated private conduct
beyond the scope of the legislative authority granted by § 5 of the Fourteenth Amendment.
Yet, the Heart of Atlanta Motel Court held, the Civil Rights Act of 1964 was predicated
on the Commerce Clause and possessed sufficient connection to interstate commerce. The
Court’s reasoning illustrates that, as a general matter, the fact that legislation reaches
beyond the limits of one grant of legislative power has no bearing on whether it can be
sustained under another.
This general approach has been applied in a context involving the Copyright
Clause and the Commerce Clause as alternative sources of Congressional power. The
Trade-Mark Cases (1879) involved an 1876 Congressional enactment of a primitive sort
of trademark protection, long before the modern-day Lanham Act. Act of Aug. 14, 1876,
19 Stat. 141 (“1876 Act”). . . . Apparently, just as was the case with the anti-bootlegging
statute, Congress labored under the impression that it was acting pursuant to its Copyright
Clause power. The Trade-Mark Cases (“Until a critical examination of the subject in the
courts became necessary, it was mainly if not wholly to [the Copyright C]lause that the
advocates of the law looked for its support.”). Nevertheless, the Supreme Court held that
the Copyright Clause could not sustain the 1876 Act because “the ordinary trade-mark has
no necessary relation to invention or discovery,” which were the hallmarks of protectable
subject matter under the Copyright Clause. . . .
The Court next considered whether Congress could enact the 1876 Act under the
Commerce Clause. . . . The Court appeared receptive to this argument. However, it must
be remembered that the Trade-Mark Cases predated the New Deal-era expansion of the
Commerce Clause. . . . Although the 1876 Act did not survive due to the restrictive view
of the Commerce Clause prevailing at that time, the Supreme Court’s analysis in the
Trade-Mark Cases stands for the proposition that legislation which would not be
permitted under the Copyright Clause could nonetheless be permitted under the
Commerce Clause, provided that the independent requirements of the latter are met. . . .
On the other hand, it might be argued that some of the grants of legislative authority
in Article I, § 8 contain significant limitations that can be said to represent the Framers’
judgment that Congress should be affirmatively prohibited from passing certain types of
legislation, no matter under which provision. The Supreme Court touched on such a situation in Railway Labor Executives’ Ass’n v. Gibbons (1982). Congress had enacted a
statute that purported to alter a pending bankruptcy case by requiring the debtor railroad
company’s bankruptcy estate to pay $75 million to the company’s former employees. This
statute directly clashed with the Bankruptcy Clause, U.S. Const. art. I, § 8, cl. 4, which
provides that Congress is empowered to pass “uniform” bankruptcy laws, because the law
targeted a particular situation and was anything but uniform. The Court quickly brushed
off the possibility that the legislation could nevertheless be sustained under the Commerce
Clause (which contains no uniformity requirement), stating that “if we were to hold that
Congress had the power to enact nonuniform bankruptcy laws pursuant to the Commerce
Clause, we would eradicate from the Constitution a limitation on the power of Congress
to enact bankruptcy laws.” . . . Cf. Paul J. Heald, The Vices of Originality (arguing that
Congress would not be able to circumvent the originality requirement inherent in the term
“Writings” in the Copyright Clause by passing a statute under the Commerce Clause
which extended copyright-like protection to unoriginal works).
We note that there is some tension between the former line of cases (Heart of
Atlanta Motel, the Trade-Mark Cases and Authors League) and the Railway Labor
Executives case. The former cases suggest that in some circumstances the Commerce
Clause can be used by Congress to accomplish something that the Copyright Clause might

Limitations on Congressional Power: Fixation & the Interaction Between Clauses

49

not allow. But the Railway Labor Executives case suggests that in some circumstances the
Commerce Clause cannot be used to eradicate a limitation placed upon Congressional
power in another grant of power. For purposes of the instant case, we resolve this tension
in the following manner . . . [w]e undertake a circumscribed analysis, deciding only what
is necessary to decide this case, and we reach a narrow conclusion. First . . . we hold the
anti-bootlegging statute satisfies the “substantial effects” test of the post-Lopez Commerce
Clause jurisprudence. Second, following the former line of cases (Heart of Atlanta Hotel,
the Trade-Mark Cases and Authors League), we hold that in some circumstances the
Commerce Clause indeed may be used to accomplish that which may not have been
permissible under the Copyright Clause. We hold that the instant case is one such
circumstance in which the Commerce Clause may be thus used. It is at this point that we
must resolve the tension with Railway Labor Executives.
Resolving this tension, we take as a given that there are some circumstances, as illustrated by Railway Labor Executives, in which the Commerce Clause cannot be used by
Congress to eradicate a limitation placed upon Congress in another grant of power.12 For
the reasons that follow, we hold that the instant case is not one such circumstance. We hold
that the Copyright Clause does not envision that Congress is positively forbidden from
extending copyright-like protection under other constitutional clauses, such as the Commerce Clause, to works of authorship that may not meet the fixation requirement inherent
in the term “Writings.” The grant itself is stated in positive terms, and does not imply any
negative pregnant that suggests that the term “Writings” operates as a ceiling on Congress’
ability to legislate pursuant to other grants. Extending quasi-copyright protection to unfixed
live musical performances is in no way inconsistent with the Copyright Clause. . . . A live
musical performance clearly satisfies the originality requirement. Extending quasicopyright protection also furthers the purpose of the Copyright Clause to promote the
progress of the useful arts by securing some exclusive rights to the creative author. Finally,
with respect to the fixation requirement, upon which this opinion focuses, although a live
musical performance may not have been fixed, or reduced to tangible form, as of the time
the bootleg copy was made, it certainly was subject to having been thus fixed. . . . Common
sense does not indicate that extending copyright-like protection to a live performance is
fundamentally inconsistent with the Copyright Clause.
For the foregoing reasons, we conclude that extending copyright-like protection in
the instant case is not fundamentally inconsistent with the fixation requirement of the
Copyright Clause. By contrast, the nonuniform bankruptcy statute at issue in Railway
Labor Executives was irreconcilably inconsistent with the uniformity requirement of the
Bankruptcy Clause of the Constitution.14
We note that there is another limitation in the Copyright Clause that may be
implicated by the anti-bootlegging statute: the “Limited Times” requirement that forbids
Congress from conferring intellectual property rights of perpetual duration. On its face,
the protection created by the anti-bootlegging statute is apparently perpetual and contains
12
We assume arguendo, without deciding, that the Commerce Clause could not be used to avoid a limitation in
the Copyright Clause if the particular use of the Commerce Clause (e.g., the anti-bootlegging statute) were
fundamentally inconsistent with the particular limitation in the Copyright Clause (e.g., the fixation requirement).
14
Our holding is limited to the fixation requirement, and should not be taken as authority that the other
various limitations in the Copyright Clause can be avoided by reference to the Commerce Clause. Compare
Nimmer, The End of Copyright, supra, at 1413 (decrying that Congress may “jettison Feist” by analogy to
the URAA because “why is a telephone book any further afield than a performance at Carnegie Hall?”), with
Gerdes, supra, at 1461 (proposing that Congress legislatively overrule Feist and extend copyright protection
to unoriginal works by relying on the Commerce Clause).

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no express time limit; therefore phonorecords of live musical performances would
presumably never fall into the public domain. However, because Moghadam has not
challenged the constitutionality of § 2319A on this basis,15 we decline to raise the issue
sua sponte. Thus, we do not decide in this case whether extending copyright-like protection under the anti-bootlegging statute might be fundamentally inconsistent with the
“Limited Times” requirement of the Copyright Clause, and we do not decide in this case
whether the Commerce Clause can provide the source of Congressional power to sustain
the application of the anti-bootlegging statute in some other case in which such an
argument is preserved. We reserve those issues for another day.
Summarizing our narrow holding in this case, we assume arguendo, without
deciding, that the anti-bootlegging statute cannot satisfy the fixation requirement of the
Copyright Clause; we hold that the statute satisfies the “substantial effects” test of the
post-Lopez Commerce Clause jurisprudence; we hold that the Commerce Clause can
provide the source of Congressional power in this case because the extension of
copyright-like protection here is not fundamentally inconsistent with the fixation
requirement of the Copyright Clause;16 and thus under the circumstances of this case,17
we reject Moghadam’s constitutional challenge to his conviction.
IV. CONCLUSION
For the foregoing reasons, the judgment of the district court is AFFIRMED.
Questions:
1.) Bootlegging Tori Amos? Sorry, that wasn’t a question.
2.) If Mr. Moghadam were reading this decision in his prison cell, what might he wish
intensely that his lawyers had done differently?
3.) The court sees a danger in assuming that a limitation on Congress’s power in one
clause implies that Congress cannot “get around” that limitation under another clause.
Yet it also sees a danger in assuming the reverse. Explain each danger, as the court
describes it. What technique does the court use to avoid both dangers and to explain when
such limitations should, and should not, be implied?

15
Moghadam did not make this argument in the district court or in his brief on appeal. He fleetingly mentions
the “Limited Times” requirement for the first time in his reply brief on appeal, and even then does not argue
that extending copyright-like protection in this case pursuant to the Commerce Clause would be prohibited
by an inconsistency with the “Limited Times” requirement of the Copyright Clause. The government has not
had any opportunity to present a defense to such an argument, and it would be unfair to entertain the argument
at this late date.
16
Because we find no such inconsistency, we need not decide the consequences if there were inconsistency.
See note 12, supra.
17
As noted above, Moghadam has waived any constitutional challenge based on the “Limited Times”
requirement of the Copyright Clause, and thus our holding in this case is further narrowed by the fact that
we do not address potential arguments based on the “Limited Times” requirement.

Limitations on Congressional Power: Fixation & the Interaction Between Clauses

51

U.S. v. Martignon

492 F.3d 140 (2d Cir. 2007)
[In Martignon, the plaintiff explicitly claimed that the URAA violated both the
fixation and the limited times restrictions of the Copyright Clause. Thus, the court could
not rely on the Moghadam court’s carefully limited reasoning.]
The Supreme Court has indicated that Congress can sometimes enact legislation
under one constitutional provision that it could not have enacted under another. See, e.g.,
Heart of Atlanta. However, this power is not unlimited. See Gibbons. Because the parties
attach different import to these cases and to the Trade-Mark Cases, we examine them to
determine where to draw the line between (1) a law which, while related to one constitutional provision and unauthorized by it, can be validly enacted under a different provision;
and (2) legislative action that is prohibited under one provision and cannot be enacted
under another even though it is seemingly within the purview of the second provision. . . .
We believe that the Supreme Court’s cases allow the regulation of matters that could
not be regulated under the Copyright Clause in a manner arguably inconsistent with that
clause unless the statute at issue is a copyright law. We draw this lesson from Heart of
Atlanta and from Gibbons. In Heart of Atlanta, the Court found authority for Congress to
enact a statute that prohibited race discrimination in public accommodations affecting
interstate commerce, even though the prohibition ran to discrimination not involving “state
action,” under the Commerce Clause although the Fourteenth Amendment did not allow
Congress to enact a similar statute. The Gibbons Court found that RITA was actually a
bankruptcy law, not that it was very close to a bankruptcy law or that it was bankruptcylike. . . . We will judge the constitutionality of Section 2319A under the same standard that
the Gibbons Court used; that is, in order to demonstrate unconstitutionality, Martignon must
establish that Section 2319A is a copyright law and not just that it is copyright-like. . . .
Section 2319A does not create and bestow property rights upon authors or inventors,
or allocate those rights among claimants to them. It is a criminal statute, falling in its
codification (along with Section 2319B about bootlegged films) between the law
criminalizing certain copyright infringement and the law criminalizing “trafficking in
counterfeit goods or services.” It is, perhaps, analogous to the law of criminal trespass.
Rather than creating a right in the performer him- or herself, it creates a power in the
government to protect the interest of performers from commercial predations. Section
2319A does not grant the performer the right to exclude others from the performance—
only the government can do that. Neither may the performer transfer his or her interests
under Section 2319A to another. . . . Section 2319A is not a law “secur[ing] . . . rights,” nor
is it a copyright law. Thus . . . Section 2319A is not subject to the limitations of Article I,
Section 8, cl. 8. . . .
In sum, Section 2319A does not create, bestow, or allocate property rights in
expression, it does not share the defining characteristics of other laws that are concededly
“copyright laws,” and it differs significantly from the Copyright Act that was passed
pursuant to the Copyright Clause (and that is valid under it). We therefore conclude that
it was not enacted under the Copyright Clause. We have no need to examine whether it
violates limits of the Copyright Clause and proceed instead to an examination of its
sustainability under the Commerce Clause.7
7
We acknowledge that our analysis necessarily triggers concerns about the ability of Congress to criminalize
other conduct that would be permitted under the Copyright Clause and the copyright laws of this country,

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I NTELLECTUAL P ROPERTY & THE C ONSTITUTION

Commerce Clause Authority
. . . Section 2319A has substantial commercial and economic aspects. . . . Because
Section 2319A is not a copyright law and its enactment was well within the scope of
Congress’s Commerce Clause authority, it is constitutionally permissible unless some other
constitutional provision prevents its enforcement. . . .
Questions:
1.) How does the Martignon court solve the problem that the Moghadam court had?
How do the two solutions differ? Which solution is best in your view? Which gives
Congress the greatest freedom to make laws that do not fit within the Intellectual Property Clause, narrowly construed?
2.) According to this court, what are the key features of a ‘copyright law’? Do you agree
with the description? With the way it is applied in this case?

4.) Limitations on Congressional Power: Limited Times, Term Extension
and the First Amendment

Eldred v. Ashcroft
537 U.S. 186 (2003)

Justice GINSBURG delivered the opinion of the Court. Justices STEVENS and
BREYER dissented and filed opinions.
This case concerns the authority the Constitution assigns to Congress to prescribe
the duration of copyrights. The Copyright and Patent Clause of the Constitution, Art. I,
§ 8, cl. 8, provides as to copyrights: “Congress shall have Power . . . [t]o promote the
Progress of Science . . . by securing [to Authors] for limited Times . . . the exclusive Right
to their . . . Writings.” In 1998, in the measure here under inspection, Congress enlarged
the duration of copyrights by 20 years. As in the case of prior extensions, principally in
1831, 1909, and 1976, Congress provided for application of the enlarged terms to existing
and future copyrights alike.
Petitioners are individuals and businesses whose products or services build on
copyrighted works that have gone into the public domain. They seek a determination that
the CTEA fails constitutional review under both the Copyright Clause’s “limited Times”
prescription and the First Amendment’s free speech guarantee. Under the 1976 Copyright
Act, copyright protection generally lasted from the work’s creation until 50 years after
the author’s death. Under the CTEA, most copyrights now run from creation until 70
years after the author’s death. 17 U.S.C. § 302(a). Petitioners do not challenge the “lifeplus-70-years” timespan itself. “Whether 50 years is enough, or 70 years too much,” they
acknowledge, “is not a judgment meet for this Court.”1 Congress went awry, petitioners
for instance the reproduction and sale of a literary work that has long lost its copyright protection. Because
such statutes are not before us, we cannot address them. We do note, however, that there could be other
constitutional problems associated with such statutes, including possible violations of the Due Process
Clause and the First Amendment.
1
Justice Breyer’s dissent is not similarly restrained. He makes no effort meaningfully to distinguish existing

Limitations on Congressional Power: Limited Times, Term Extension and the First Amendment

53

maintain, not with respect to newly created works, but in enlarging the term for published
works with existing copyrights. The “limited Tim[e]” in effect when a copyright is
secured, petitioners urge, becomes the constitutional boundary, a clear line beyond the
power of Congress to extend. As to the First Amendment, petitioners contend that the
CTEA is a content-neutral regulation of speech that fails inspection under the heightened
judicial scrutiny appropriate for such regulations.
In accord with the District Court and the Court of Appeals, we reject petitioners’ challenges to the CTEA. In that 1998 legislation, as in all previous copyright term extensions,
Congress placed existing and future copyrights in parity. In prescribing that alignment, we
hold, Congress acted within its authority and did not transgress constitutional limitations.
I
A
We evaluate petitioners’ challenge to the constitutionality of the CTEA against the
backdrop of Congress’ previous exercises of its authority under the Copyright Clause. The
Nation’s first copyright statute, enacted in 1790, provided a federal copyright term of 14
years from the date of publication, renewable for an additional 14 years if the author survived the first term. . . . The 1790 Act’s renewable 14-year term applied to existing works
(i.e., works already published and works created but not yet published) and future works
alike. Congress expanded the federal copyright term to 42 years in 1831 (28 years from
publication, renewable for an additional 14 years), and to 56 years in 1909 (28 years from
publication, renewable for an additional 28 years). Both times, Congress applied the new
copyright term to existing and future works.
In 1976, Congress altered the method for computing federal copyright terms. For
works created by identified natural persons, the 1976 Act provided that federal copyright
protection would run from the work’s creation, not—as in the 1790, 1831, and 1909
Acts—its publication; protection would last until 50 years after the author’s death.
§ 302(a). In these respects, the 1976 Act aligned United States copyright terms with the
then-dominant international standard adopted under the Berne Convention for the
Protection of Literary and Artistic Works. For anonymous works, pseudonymous works,
and works made for hire, the 1976 Act provided a term of 75 years from publication or
100 years from creation, whichever expired first. § 302(c). . . .
The measure at issue here, the CTEA, installed the fourth major duration extension
of federal copyrights. Retaining the general structure of the 1976 Act, the CTEA enlarges
the terms of all existing and future copyrights by 20 years. For works created by identified
natural persons, the term now lasts from creation until 70 years after the author’s death. 17
U.S.C. § 302(a). This standard harmonizes the baseline United States copyright term with
the term adopted by the European Union in 1993. For anonymous works, pseudonymous
works, and works made for hire, the term is 95 years from publication or 120 years from
creation, whichever expires first. 17 U.S.C. § 302(c). . . .
II
A
We address first the determination of the courts below that Congress has authority
under the Copyright Clause to extend the terms of existing copyrights. Text, history, and
precedent, we conclude, confirm that the Copyright Clause empowers Congress to
prescribe “limited Times” for copyright protection and to secure the same level and
copyrights from future grants. Under his reasoning, the CTEA’s 20-year extension is globally unconstitutional.

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I NTELLECTUAL P ROPERTY & THE C ONSTITUTION

duration of protection for all copyright holders, present and future.
The CTEA’s baseline term of life plus 70 years, petitioners concede, qualifies as a
“limited Tim[e]” as applied to future copyrights. Petitioners contend, however, that
existing copyrights extended to endure for that same term are not “limited.” Petitioners’
argument essentially reads into the text of the Copyright Clause the command that a time
prescription, once set, becomes forever “fixed” or “inalterable.” The word “limited,” however, does not convey a meaning so constricted. At the time of the Framing, that word
meant what it means today: “confine[d] within certain bounds,” “restrain[ed],” or “circumscribe[d].” Thus understood, a timespan appropriately “limited” as applied to future
copyrights does not automatically cease to be “limited” when applied to existing copyrights. And as we observe, infra, there is no cause to suspect that a purpose to evade the
“limited Times” prescription prompted Congress to adopt the CTEA.
To comprehend the scope of Congress’ power under the Copyright Clause, “a page
of history is worth a volume of logic.” New York Trust Co. v. Eisner (1921) (Holmes, J.).
History reveals an unbroken congressional practice of granting to authors of works with
existing copyrights the benefit of term extensions so that all under copyright protection will
be governed evenhandedly under the same regime. As earlier recounted, the First Congress
accorded the protections of the Nation’s first federal copyright statute to existing and future
works alike. 1790 Act § 1. Since then, Congress has regularly applied duration extensions
to both existing and future copyrights.
Because the Clause empowering Congress to confer copyrights also authorizes
patents, congressional practice with respect to patents informs our inquiry. We count it
significant that early Congresses extended the duration of numerous individual patents
as well as copyrights. The courts saw no “limited Times” impediment to such extensions;
renewed or extended terms were upheld in the early days, for example, by Chief Justice
Marshall and Justice Story sitting as circuit justices. . . . (Congresses “. . . are not
restrained from renewing a patent or prolonging” it.).7 . . .
Satisfied that the CTEA complies with the “limited Times” prescription, we turn
now to whether it is a rational exercise of the legislative authority conferred by the Copyright Clause. On that point, we defer substantially to Congress. Sony, 464 U.S. at 429 (“[I]t
is Congress that has been assigned the task of defining the scope of the limited monopoly
that should be granted to authors . . . in order to give the public appropriate access to their
work product.”).10
The CTEA reflects judgments of a kind Congress typically makes, judgments we
cannot dismiss as outside the Legislature’s domain. As respondent describes, a key factor in
the CTEA’s passage was a 1993 European Union directive instructing EU members to
7
Justice Stevens would sweep away these decisions, asserting that Graham v. John Deere Co. of Kansas
City (1966), “flatly contradicts” them. Post, at 798. Nothing but wishful thinking underpins that assertion.
The controversy in Graham involved no patent extension. Graham addressed an invention’s very eligibility
for patent protection, and spent no words on Congress’ power to enlarge a patent’s duration.
10
Justice Breyer would adopt a heightened, three-part test for the constitutionality of copyright enactments. Post,
at 802. He would invalidate the CTEA as irrational in part because, in his view, harmonizing the United States
and European Union baseline copyright terms “apparent[ly]” fails to achieve “significant” uniformity. Post, at
812. But see infra, at 782. The novelty of the “rational basis” approach he presents is plain. (Breyer, J., dissenting)
(“Rational-basis review—with its presumptions favoring constitutionality—is ‘a paradigm of judicial restraint.’”
(quoting FCC v. Beach Communications, Inc. (1993))). Rather than subjecting Congress’ legislative choices in
the copyright area to heightened judicial scrutiny, we have stressed that “it is not our role to alter the delicate
balance Congress has labored to achieve.” Congress’ exercise of its Copyright Clause authority must be rational,
but Justice Breyer’s stringent version of rationality is unknown to our literary property jurisprudence.

Limitations on Congressional Power: Limited Times, Term Extension and the First Amendment

55

establish a copyright term of life plus 70 years. Consistent with the Berne Convention, the
EU directed its members to deny this longer term to the works of any non-EU country whose
laws did not secure the same extended term. By extending the baseline United States
copyright term to life plus 70 years, Congress sought to ensure that American authors would
receive the same copyright protection in Europe as their European counterparts.
In addition to international concerns, Congress passed the CTEA in light of
demographic, economic, and technological changes,14 and rationally credited projections
that longer terms would encourage copyright holders to invest in the restoration and
public distribution of their works.
In sum, we find that the CTEA is a rational enactment; we are not at liberty to
second-guess congressional determinations and policy judgments of this order, however
debatable or arguably unwise they may be. Accordingly, we cannot conclude that the
CTEA—which continues the unbroken congressional practice of treating future and
existing copyrights in parity for term extension purposes—is an impermissible exercise
of Congress’ power under the Copyright Clause.
B
1
Petitioners contend that even if the CTEA’s 20-year term extension is literally a
“limited Tim[e],” permitting Congress to extend existing copyrights allows it to evade
the “limited Times” constraint by creating effectively perpetual copyrights through
repeated extensions. We disagree.
As the Court of Appeals observed, a regime of perpetual copyrights “clearly is not
the situation before us.” Nothing before this Court warrants construction of the CTEA’s 20year term extension as a congressional attempt to evade or override the “limited Times”
constraint. Critically, we again emphasize, petitioners fail to show how the CTEA crosses
a constitutionally significant threshold with respect to “limited Times” that the 1831, 1909,
and 1976 Acts did not. . . .
2
Petitioners dominantly advance a series of arguments all premised on the
proposition that Congress may not extend an existing copyright absent new consideration
from the author. They pursue this main theme under three headings. Petitioners contend
that the CTEA’s extension of existing copyrights (1) overlooks the requirement of
“originality,” (2) fails to “promote the Progress of Science,” and (3) ignores copyright’s
quid pro quo.
Petitioners’ “originality” argument draws on Feist (1991). In Feist, we observed
that “[t]he sine qua non of copyright is originality,” and held that copyright protection is
unavailable to “a narrow category of works in which the creative spark is utterly lacking
or so trivial as to be virtually nonexistent.” Relying on Feist, petitioners urge that even
if a work is sufficiently “original” to qualify for copyright protection in the first instance,
any extension of the copyright’s duration is impermissible because, once published, a
work is no longer original. Feist, however, did not touch on the duration of copyright
protection. . . . The decision did not construe the “limited Times” for which a work may
be protected, and the originality requirement has no bearing on that prescription.
More forcibly, petitioners contend that the CTEA’s extension of existing copyrights
14
Members of Congress expressed the view that, as a result of increases in human longevity and in parents’
average age when their children are born, the pre-CTEA term did not adequately secure “the right to profit
from licensing one’s work during one’s lifetime and to take pride and comfort in knowing that one’s
children—and perhaps their children—might also benefit from one’s posthumous popularity.” . . .

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I NTELLECTUAL P ROPERTY & THE C ONSTITUTION

does not “promote the Progress of Science” as contemplated by the preambular language
of the Copyright Clause. Art. I, § 8, cl. 8. To sustain this objection, petitioners do not argue
that the Clause’s preamble is an independently enforceable limit on Congress’ power.
Rather, they maintain that the preambular language identifies the sole end to which
Congress may legislate; accordingly, they conclude, the meaning of “limited Times” must
be “determined in light of that specified end.” The CTEA’s extension of existing copyrights
categorically fails to “promote the Progress of Science,” petitioners argue, because it does
not stimulate the creation of new works but merely adds value to works already created.
As petitioners point out, we have described the Copyright Clause as “both a grant
of power and a limitation,” Graham v. John Deere Co. of Kansas City (1966), and have
said that “[t]he primary objective of copyright” is “[t]o promote the Progress of Science.”
Feist. The “constitutional command,” we have recognized, is that Congress, to the extent
it enacts copyright laws at all, create a “system” that “promote[s] the Progress of Science.”
We have also stressed, however, that it is generally for Congress, not the courts, to
decide how best to pursue the Copyright Clause’s objectives. See Stewart v. Abend (1990)
(“Th[e] evolution of the duration of copyright protection tellingly illustrates the
difficulties Congress faces. . . . [I]t is not our role to alter the delicate balance Congress
has labored to achieve.”) The justifications we earlier set out for Congress’ enactment of
the CTEA provide a rational basis for the conclusion that the CTEA “promote[s] the
Progress of Science.” . . .
Closely related to petitioners’ preambular argument, or a variant of it, is their
assertion that the Copyright Clause “imbeds a quid pro quo.” They contend, in this regard,
that Congress may grant to an “Autho[r]” an “exclusive Right” for a “limited Tim[e],” but
only in exchange for a “Writin[g].” Extending an existing copyright without demanding
additional consideration, petitioners maintain, bestows an unpaid-for benefit on copyright
holders and their heirs, in violation of the quid pro quo requirement. . . .
We note, furthermore, that patents and copyrights do not entail the same exchange,
and that our references to a quid pro quo typically appear in the patent context. . . .
Further distinguishing the two kinds of intellectual property, copyright gives the
holder no monopoly on any knowledge. A reader of an author’s writing may make full use
of any fact or idea she acquires from her reading. See § 102(b). The grant of a patent, on
the other hand, does prevent full use by others of the inventor’s knowledge. In light of these
distinctions, one cannot extract from language in our patent decisions—language not
trained on a grant’s duration—genuine support for petitioners’ bold view. Accordingly, we
reject the proposition that a quid pro quo requirement stops Congress from expanding
copyright’s term in a manner that puts existing and future copyrights in parity. . . .
III
Petitioners separately argue that the CTEA is a content-neutral regulation of speech
that fails heightened judicial review under the First Amendment. We reject petitioners’ plea
for imposition of uncommonly strict scrutiny on a copyright scheme that incorporates its
own speech-protective purposes and safeguards. The Copyright Clause and First
Amendment were adopted close in time. This proximity indicates that, in the Framers’
view, copyright’s limited monopolies are compatible with free speech principles. Indeed,
copyright’s purpose is to promote the creation and publication of free expression. As
Harper & Row observed: “[T]he Framers intended copyright itself to be the engine of free
expression. By establishing a marketable right to the use of one’s expression, copyright
supplies the economic incentive to create and disseminate ideas.”
In addition to spurring the creation and publication of new expression, copyright law

Limitations on Congressional Power: Limited Times, Term Extension and the First Amendment

57

contains built-in First Amendment accommodations. First, it distinguishes between ideas
and expression and makes only the latter eligible for copyright protection. As we said in
Harper & Row, this “idea/expression dichotomy strike[s] a definitional balance between
the First Amendment and the Copyright Act by permitting free communication of facts
while still protecting an author’s expression.” Due to this distinction, every idea, theory,
and fact in a copyrighted work becomes instantly available for public exploitation at the
moment of publication. See Feist.
Second, the “fair use” defense allows the public to use not only facts and ideas
contained in a copyrighted work, but also expression itself in certain circumstances.
Codified at 17 U.S.C. § 107, the defense provides: “[T]he fair use of a copyrighted work,
including such use by reproduction in copies . . ., for purposes such as criticism,
comment, news reporting, teaching (including multiple copies for classroom use),
scholarship, or research, is not an infringement of copyright.” The fair use defense
affords considerable “latitude for scholarship and comment,” Harper & Row, and even
for parody, see Campbell v. Acuff-Rose Music, Inc. (1994) (rap group’s musical parody
of Roy Orbison’s “Oh, Pretty Woman” may be fair use).
Finally, the case petitioners principally rely upon for their First Amendment
argument, Turner Broadcasting System, Inc. v. FCC (1994), bears little on copyright. The
statute at issue in Turner required cable operators to carry and transmit broadcast stations
through their proprietary cable systems. . . . The CTEA, in contrast, does not oblige
anyone to reproduce another’s speech against the carrier’s will. Instead, it protects
authors’ original expression from unrestricted exploitation. Protection of that order does
not raise the free speech concerns present when the government compels or burdens the
communication of particular facts or ideas. The First Amendment securely protects the
freedom to make—or decline to make—one’s own speech; it bears less heavily when
speakers assert the right to make other people’s speeches. To the extent such assertions
raise First Amendment concerns, copyright’s built-in free speech safeguards are
generally adequate to address them. We recognize that the D.C. Circuit spoke too broadly
when it declared copyrights “categorically immune from challenges under the First
Amendment.” But when, as in this case, Congress has not altered the traditional contours
of copyright protection, further First Amendment scrutiny is unnecessary.
IV
. . . Beneath the facade of their inventive constitutional interpretation, petitioners
forcefully urge that Congress pursued very bad policy in prescribing the CTEA’s long
terms. The wisdom of Congress’ action, however, is not within our province to second
guess. Satisfied that the legislation before us remains inside the domain the Constitution
assigns to the First Branch, we affirm the judgment of the Court of Appeals.
It is so ordered.
Justice STEVENS, dissenting.
Writing for a unanimous Court in 1964, Justice Black stated that it is obvious that
a State could not “extend the life of a patent beyond its expiration date.” Sears, Roebuck
& Co. v. Stiffel Co. (1964). As I shall explain, the reasons why a State may not extend the
life of a patent apply to Congress as well. If Congress may not expand the scope of a
patent monopoly, it also may not extend the life of a copyright beyond its expiration date.
Accordingly, insofar as the 1998 Sonny Bono Copyright Term Extension Act, 112 Stat.
2827, purported to extend the life of unexpired copyrights, it is invalid. Because the
majority’s contrary conclusion rests on the mistaken premise that this Court has virtually

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no role in reviewing congressional grants of monopoly privileges to authors, inventors,
and their successors, I respectfully dissent.
I
The authority to issue copyrights stems from the same Clause in the Constitution
that created the patent power. . . . It is well settled that the Clause is “both a grant of power
and a limitation” and that Congress “may not overreach the restraints imposed by the stated
constitutional purpose.” Graham (1966). As we have made clear in the patent context, that
purpose has two dimensions. Most obviously the grant of exclusive rights to their respective
writings and discoveries is intended to encourage the creativity of “Authors and Inventors.”
But the requirement that those exclusive grants be for “limited Times” serves the ultimate
purpose of promoting the “Progress of Science and useful Arts” by guaranteeing that those
innovations will enter the public domain as soon as the period of exclusivity expires. . . .
Neither the purpose of encouraging new inventions nor the overriding interest in advancing progress by adding knowledge to the public domain is served by retroactively increasing the inventor’s compensation for a completed invention and frustrating the legitimate
expectations of members of the public who want to make use of it in a free market. Because
those twin purposes provide the only avenue for congressional action under the Copyright/
Patent Clause of the Constitution, any other action is manifestly unconstitutional.
II
We have recognized that these twin purposes of encouraging new works and adding
to the public domain apply to copyrights as well as patents. Thus, with regard to copyrights
on motion pictures, we have clearly identified the overriding interest in the “release to the
public of the products of [the author’s] creative genius.” And, as with patents, we have
emphasized that the overriding purpose of providing a reward for authors’ creative activity
is to motivate that activity and “to allow the public access to the products of their genius
after the limited period of exclusive control has expired.” Ex post facto extensions of
copyrights result in a gratuitous transfer of wealth from the public to authors, publishers,
and their successors in interest. Such retroactive extensions do not even arguably serve
either of the purposes of the Copyright/Patent Clause. The reasons why such extensions of
the patent monopoly are unconstitutional apply to copyrights as well. . . .
IV
. . . A more complete and comprehensive look at the history of congressional action
under the Copyright/Patent Clause demonstrates that history, in this case, does not provide
the “‘volume of logic’” necessary to sustain the Sonny Bono Act’s constitutionality. . . .
The first example relied upon by respondent, the extension of Oliver Evans’ patent in
1808, ch. 13, 6 Stat. 70, demonstrates the pitfalls of relying on an incomplete historical
analysis. . . . This legislation, passed January 21, 1808, restored a patent monopoly for an
invention that had been in the public domain for over four years. As such, this Act
unquestionably exceeded Congress’ authority under the Copyright/Patent Clause: “The
Congress in the exercise of the patent power may not overreach the restraints imposed by
the stated constitutional purpose. . . . Congress may not authorize the issuance of patents
whose effects are to remove existent knowledge from the public domain, or to restrict free
access to materials already available.” Graham (emphasis added).
. . . Congress passed private bills either directly extending patents or allowing otherwise untimely applicants to apply for patent extensions for approximately 75 patents
between 1790 and 1875. Of these 75 patents, at least 56 had already fallen into the public

Limitations on Congressional Power: Limited Times, Term Extension and the First Amendment

59

domain. The fact that this repeated practice was patently unconstitutional completely
undermines the majority’s reliance on this history as “significant.”
Copyright legislation has a similar history. Respondent argues that that historical
practice effectively establishes the constitutionality of retroactive extensions of unexpired
copyrights. Of course, the practice buttresses the presumption of validity that attaches to
every Act of Congress. But, as our decision in INS v. Chadha (1983) demonstrates, the fact
that Congress has repeatedly acted on a mistaken interpretation of the Constitution does not
qualify our duty to invalidate an unconstitutional practice when it is finally challenged in an
appropriate case. . . . For, as this Court has long recognized, “[i]t is obviously correct that
no one acquires a vested or protected right in violation of the Constitution by long use, even
when that span of time covers our entire national existence.” Walz v. Tax Comm’n of City of
New York (1970). . . . The fact that the Court has not previously passed upon the
constitutionality of retroactive copyright extensions does not insulate the present
extension from constitutional challenge. . . .
VI
Finally, respondent relies on concerns of equity to justify the retroactive extension.
If Congress concludes that a longer period of exclusivity is necessary in order to provide
an adequate incentive to authors to produce new works, respondent seems to believe that
simple fairness requires that the same lengthened period be provided to authors whose
works have already been completed and copyrighted. This is a classic non sequitur. The
reason for increasing the inducement to create something new simply does not apply to an
already-created work. To the contrary, the equity argument actually provides strong support
for petitioners. Members of the public were entitled to rely on a promised access to
copyrighted or patented works at the expiration of the terms specified when the exclusive
privileges were granted. . . .
One must indulge in two untenable assumptions to find support in the equitable
argument offered by respondent—that the public interest in free access to copyrighted works
is entirely worthless and that authors, as a class, should receive a windfall solely based on
completed creative activity. [A]s our cases repeatedly and consistently emphasize, ultimate
public access is the overriding purpose of the constitutional provision. Ex post facto
extensions of existing copyrights, unsupported by any consideration of the public interest,
frustrate the central purpose of the Clause.
VII
The express grant of a perpetual copyright would unquestionably violate the
textual requirement that the authors’ exclusive rights be only “for limited Times.”
Whether the extraordinary length of the grants authorized by the 1998 Act are invalid
because they are the functional equivalent of perpetual copyrights is a question that need
not be answered in this case because the question presented by the certiorari petition
merely challenges Congress’ power to extend retroactively the terms of existing
copyrights. . . . It is important to note, however, that a categorical rule prohibiting
retroactive extensions would effectively preclude perpetual copyrights. More importantly, as the House of Lords recognized when it refused to amend the Statute of Anne in
1735, unless the Clause is construed to embody such a categorical rule, Congress may
extend existing monopoly privileges ad infinitum under the majority’s analysis.
By failing to protect the public interest in free access to the products of inventive and
artistic genius—indeed, by virtually ignoring the central purpose of the Copyright/ Patent
Clause—the Court has quitclaimed to Congress its principal responsibility in this area of

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the law. Fairly read, the Court has stated that Congress’ actions under the Copyright/Patent
Clause are, for all intents and purposes, judicially unreviewable. That result cannot be
squared with the basic tenets of our constitutional structure. It is not hyperbole to recall the
trenchant words of Chief Justice John Marshall: “It is emphatically the province and duty
of the judicial department to say what the law is.” Marbury v. Madison (1803). We should
discharge that responsibility as we did in Chadha.
I respectfully dissent.
Justice BREYER, dissenting.
. . . The economic effect of this 20-year extension—the longest blanket extension
since the Nation’s founding—is to make the copyright term not limited, but virtually
perpetual. Its primary legal effect is to grant the extended term not to authors, but to their
heirs, estates, or corporate successors. And most importantly, its practical effect is not to
promote, but to inhibit, the progress of “Science”—by which word the Framers meant
learning or knowledge.
. . . Although the Copyright Clause grants broad legislative power to Congress, that
grant has limits. And in my view this statute falls outside them.
I
The “monopoly privileges” that the Copyright Clause confers “are neither unlimited
nor primarily designed to provide a special private benefit.” This Court has made clear that
the Clause’s limitations are judicially enforceable.
The Copyright Clause and the First Amendment seek related objectives—the
creation and dissemination of information. When working in tandem, these provisions
mutually reinforce each other, the first serving as an “engine of free expression,” the
second assuring that government throws up no obstacle to its dissemination. At the same
time, a particular statute that exceeds proper Copyright Clause bounds may set Clause
and Amendment at cross-purposes, thereby depriving the public of the speech-related
benefits that the Founders, through both, have promised.
Consequently, I would review plausible claims that a copyright statute seriously,
and unjustifiably, restricts the dissemination of speech somewhat more carefully than
reference to this Court’s traditional Copyright Clause jurisprudence might suggest. . . . I
would find that the statute lacks the constitutionally necessary rational support (1) if the
significant benefits that it bestows are private, not public; (2) if it threatens seriously to
undermine the expressive values that the Copyright Clause embodies; and (3) if it cannot
find justification in any significant Clause-related objective. Where, after examination of
the statute, it becomes difficult, if not impossible, even to dispute these characterizations,
Congress’ “choice is clearly wrong.” Helvering v. Davis (1937).
II
A
Because we must examine the relevant statutory effects in light of the Copyright
Clause’s own purposes, we should begin by reviewing the basic objectives of that Clause.
The Clause authorizes a “tax on readers for the purpose of giving a bounty to writers.”
(Lord Macaulay). Why? What constitutional purposes does the “bounty” serve?
The Constitution itself describes the basic Clause objective as one of “promot[ing] the
Progress of Science,” i.e., knowledge and learning. The Clause exists not to “provide a
special private benefit,” but “to stimulate artistic creativity for the general public good.” It
does so by “motivat[ing] the creative activity of authors” through “the provision of a special

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reward.” Sony, supra, at 429. The “reward” is a means, not an end. And that is why the
copyright term is limited. It is limited so that its beneficiaries—the public—“will not be
permanently deprived of the fruits of an artist’s labors.”
That is how the Court previously has described the Clause’s objectives. And, in doing
so, the Court simply has reiterated the views of the Founders.
Madison, like Jefferson and others in the founding generation, warned against the
dangers of monopolies . . . (arguing against even copyright monopolies); (statement of
Rep. Jackson in the First Congress, Feb. 1791) (“What was it drove our forefathers to
this country? Was it not the ecclesiastical corporations and perpetual monopolies of
England and Scotland?”). Madison noted that the Constitution had “limited them to two
cases, the authors of Books, and of useful inventions.” He thought that in those two cases
monopoly is justified because it amounts to “compensation for” an actual community
“benefit” and because the monopoly is “temporary”—the term originally being 14 years
(once renewable). Madison concluded that “under that limitation a sufficient recompence
and encouragement may be given.” But he warned in general that monopolies must be
“guarded with strictness against abuse.” . . .
For present purposes, then, we should take the following as well established: that
copyright statutes must serve public, not private, ends; that they must seek “to promote
the Progress” of knowledge and learning; and that they must do so both by creating
incentives for authors to produce and by removing the related restrictions on
dissemination after expiration of a copyright’s “limited Tim[e]”—a time that (like “a
limited monarch”) is “restrain[ed]” and “circumscribe[d],” “not [left] at large.” . . .
B
This statute, like virtually every copyright statute, imposes upon the public certain
expression-related costs in the form of (1) royalties that may be higher than necessary to
evoke creation of the relevant work, and (2) a requirement that one seeking to reproduce a
copyrighted work must obtain the copyright holder’s permission. The first of these costs
translates into higher prices that will potentially restrict a work’s dissemination. The second
means search costs that themselves may prevent reproduction even where the author has
no objection. Although these costs are, in a sense, inevitable concomitants of copyright
protection, there are special reasons for thinking them especially serious here.
First, the present statute primarily benefits the holders of existing copyrights, i.e.,
copyrights on works already created. And a Congressional Research Service (CRS) study
prepared for Congress indicates that the added royalty-related sum that the law will transfer
to existing copyright holders is large. In conjunction with official figures on copyright
renewals, the CRS Report indicates that only about 2% of copyrights between 55 and 75
years old retain commercial value—i.e., still generate royalties after that time. But books,
songs, and movies of that vintage still earn about $400 million per year in royalties. [O]ne
might conservatively estimate that 20 extra years of copyright protection will mean the
transfer of several billion extra royalty dollars to holders of existing copyrights—copyrights
that, together, already will have earned many billions of dollars in royalty “reward.”
The extra royalty payments will not come from thin air. Rather, they ultimately come
from those who wish to read or see or hear those classic books or films or recordings that
have survived. Further, the likely amounts of extra royalty payments are large enough to
suggest that unnecessarily high prices will unnecessarily restrict distribution of classic
works (or lead to disobedience of the law)—not just in theory but in practice. Cf. CRS
Report 3 (“[N]ew, cheaper editions can be expected when works come out of copyright”);
Brief for College Art Association et al. as Amici Curiae 24.

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A second, equally important, cause for concern arises out of the fact that copyright
extension imposes a “permissions” requirement—not only upon potential users of “classic”
works that still retain commercial value, but also upon potential users of any other work
still in copyright. Again using CRS estimates, one can estimate that, by 2018, the number
of such works 75 years of age or older will be about 350,000. Because the Copyright Act
of 1976 abolished the requirement that an owner must renew a copyright, such still-incopyright works (of little or no commercial value) will eventually number in the millions.
The potential users of such works include not only movie buffs and aging jazz fans,
but also historians, scholars, teachers, writers, artists, database operators, and researchers
of all kinds—those who want to make the past accessible for their own use or for that of
others. The permissions requirement can inhibit their ability to accomplish that task.
Indeed, in an age where computer-accessible databases promise to facilitate research and
learning, the permissions requirement can stand as a significant obstacle to realization of
that technological hope.
The reason is that the permissions requirement can inhibit or prevent the use of old
works (particularly those without commercial value): (1) because it may prove expensive
to track down or to contract with the copyright holder, (2) because the holder may prove
impossible to find, or (3) because the holder when found may deny permission either
outright or through misinformed efforts to bargain. The CRS, for example, has found that
the cost of seeking permission “can be prohibitive.”
Thus, the American Association of Law Libraries points out that the clearance
process associated with creating an electronic archive, Documenting the American South,
“consumed approximately a dozen man-hours” per work. The College Art Association says
that the costs of obtaining permission for use of single images, short excerpts, and other
short works can become prohibitively high; it describes the abandonment of efforts to
include, e.g., campaign songs, film excerpts, and documents exposing “horrors of the chain
gang” in historical works or archives; and it points to examples in which copyright holders
in effect have used their control of copyright to try to control the content of historical or
cultural works. . . . Amici for petitioners describe how electronic databases tend to avoid
adding to their collections works whose copyright holders may prove difficult to contact.
. . . Similarly, the costs of obtaining permission, now perhaps ranging in the millions
of dollars, will multiply as the number of holders of affected copyrights increases from
several hundred thousand to several million. The costs to the users of nonprofit databases,
now numbering in the low millions, will multiply as the use of those computer-assisted
databases becomes more prevalent. And the qualitative costs to education, learning, and
research will multiply as our children become ever more dependent for the content of their
knowledge upon computer-accessible databases—thereby condemning that which is not so
accessible, say, the cultural content of early 20th-century history, to a kind of intellectual
purgatory from which it will not easily emerge. . . .
The majority also invokes the “fair use” exception, and it notes that copyright law
itself is restricted to protection of a work’s expression, not its substantive content. Neither
the exception nor the restriction, however, would necessarily help those who wish to obtain
from electronic databases material that is not there—say, teachers wishing their students to
see albums of Depression Era photographs, to read the recorded words of those who
actually lived under slavery, or to contrast, say, Gary Cooper’s heroic portrayal of Sergeant
York with filmed reality from the battlefield of Verdun. Such harm, and more will occur
despite the 1998 Act’s exemptions and despite the other “First Amendment safeguards” in
which the majority places its trust.
I should add that the Motion Picture Association of America also finds my concerns

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overstated, at least with respect to films, because the extension will sometimes make it
profitable to reissue old films, saving them from extinction. Other film preservationists
note, however, that only a small minority of the many films, particularly silent films, from
the 1920’s and 1930’s have been preserved. (Half of all pre-1950 feature films and more
than 80% of all such pre-1929 films have already been lost); cf. Brief for Hal Roach Studios
et al. as Amici Curiae 18 (Out of 1,200 Twenties Era silent films still under copyright, 63
are now available on digital video disc). They seek to preserve the remainder. And they tell
us that copyright extension will impede preservation by forbidding the reproduction of
films within their own or within other public collections. . . .
C
What copyright-related benefits might justify the statute’s extension of copyright
protection? First, no one could reasonably conclude that copyright’s traditional economic
rationale applies here. The extension will not act as an economic spur encouraging authors
to create new works. . . . And any remaining monetary incentive is diminished dramatically
by the fact that the relevant royalties will not arrive until 75 years or more into the future,
when, not the author, but distant heirs, or shareholders in a successor corporation, will
receive them. Using assumptions about the time value of money provided us by a group of
economists (including five Nobel prize winners), it seems fair to say that, for example, a
1% likelihood of earning $100 annually for 20 years, starting 75 years into the future, is
worth less than seven cents today.
What potential Shakespeare, Wharton, or Hemingway would be moved by such a
sum? What monetarily motivated Melville would not realize that he could do better for his
grandchildren by putting a few dollars into an interest-bearing bank account? The Court
itself finds no evidence to the contrary. It refers to testimony before Congress (1) that the
copyright system’s incentives encourage creation, and (2) (referring to Noah Webster) that
income earned from one work can help support an artist who “‘continue[s] to create.’”
[E]ven if this cited testimony were meant more specifically to tell Congress that
somehow, somewhere, some potential author might be moved by the thought of greatgrandchildren receiving copyright royalties a century hence, so might some potential
author also be moved by the thought of royalties being paid for two centuries, five
centuries, 1,000 years, “’til the End of Time.” And from a rational economic perspective
the time difference among these periods makes no real difference. The present extension
will produce a copyright period of protection that, even under conservative assumptions,
is worth more than 99.8% of protection in perpetuity (more than 99.99% for a songwriter
like Irving Berlin and a song like Alexander’s Ragtime Band). The lack of a practically
meaningful distinction from an author’s ex ante perspective between (a) the statute’s
extended terms and (b) an infinite term makes this latest extension difficult to square with
the Constitution’s insistence on “limited Times.”
I am not certain why the Court considers it relevant in this respect that “[n]othing
. . . warrants construction of the [1998 Act’s] 20-year term extension as a congressional
attempt to evade or override the ‘limited Times’ constraint.” Of course Congress did not
intend to act unconstitutionally. But it may have sought to test the Constitution’s limits.
After all, the statute was named after a Member of Congress, who, the legislative history
records, “wanted the term of copyright protection to last forever.” 144 Cong. Rec. H9952
(daily ed. Oct. 7, 1998) (stmt. of Rep. Mary Bono). See also (stmt. of Rep. Sonny Bono)
(questioning why copyrights should ever expire); (stmt. of Rep. Berman) (“I guess we
could . . . just make a permanent moratorium on the expiration of copyrights”); (stmt. of
Rep. Hoke) (“Why 70 years? Why not forever? Why not 150 years?”); (stmt. of the

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Register of Copyrights) (In Copyright Office proceedings, “[t]he Songwriters Guild
suggested a perpetual term”); (statement of Quincy Jones) (“I’m particularly fascinated
with Representative Hoke’s statement. . . . [W]hy not forever?”); (stmt. of Quincy Jones)
(“If we can start with 70, add 20, it would be a good start”). And the statute ended up
creating a term so long that (were the vesting of 19th-century real property at issue) it
would typically violate the traditional rule against perpetuities.
In any event, the incentive-related numbers are far too small for Congress to have
concluded rationally, even with respect to new works, that the extension’s economicincentive effect could justify the serious expression-related harms earlier described. And,
of course, in respect to works already created—the source of many of the harms
previously described—the statute creates no economic incentive at all.
Second, the Court relies heavily for justification upon international uniformity of
terms. . . . Despite appearances, the statute does not create a uniform American-European
term with respect to the lion’s share of the economically significant works that it
affects—all works made “for hire” and all existing works created prior to 1978. With
respect to those works the American statute produces an extended term of 95 years while
comparable European rights in “for hire” works last for periods that vary from 50 years
to 70 years to life plus 70 years. Neither does the statute create uniformity with respect
to anonymous or pseudonymous works.
The statute does produce uniformity with respect to copyrights in new, post-1977
works attributed to natural persons. But these works constitute only a subset (likely a
minority) of works that retain commercial value after 75 years. And the fact that
uniformity comes so late, if at all, means that bringing American law into conformity
with this particular aspect of European law will neither encourage creation nor benefit
the long-dead author in any other important way.
In sum, the partial, future uniformity that the 1998 Act promises cannot reasonably
be said to justify extension of the copyright term for new works. And concerns with
uniformity cannot possibly justify the extension of the new term to older works, for the
statute there creates no uniformity at all.
Third, several publishers and filmmakers argue that the statute provides incentives to
those who act as publishers to republish and to redistribute older copyrighted works. This
claim cannot justify this statute, however, because the rationale is inconsistent with the basic
purpose of the Copyright Clause—as understood by the Framers and by this Court. The
Clause assumes an initial grant of monopoly, designed primarily to encourage creation,
followed by termination of the monopoly grant in order to promote dissemination of
already-created works. It assumes that it is the disappearance of the monopoly grant, not its
perpetuation, that will, on balance, promote the dissemination of works already in existence.
This view of the Clause finds strong support in the writings of Madison, in the antimonopoly
environment in which the Framers wrote the Clause, and in the history of the Clause’s
English antecedent, the Statute of Anne—a statute which sought to break up a publishers’
monopoly by offering, as an alternative, an author’s monopoly of limited duration.
This view finds virtually conclusive support in the Court’s own precedents. See Sony
(The Copyright Clause is “intended . . . to allow the public access . . . after the limited
period of exclusive control”).
This view also finds textual support in the Copyright Clause’s word “limited.” It
finds added textual support in the word “Authors,” which is difficult to reconcile with a
rationale that rests entirely upon incentives given to publishers perhaps long after the
death of the work’s creator.

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It finds empirical support in sources that underscore the wisdom of the Framers’ judgment. And it draws logical support from the endlessly self-perpetuating nature of the
publishers’ claim and the difficulty of finding any kind of logical stopping place were this
Court to accept such a uniquely publisher-related rationale. . . .
Given this support, it is difficult to accept the conflicting rationale that the publishers
advance, namely, that extension, rather than limitation, of the grant will, by rewarding
publishers with a form of monopoly, promote, rather than retard, the dissemination of works
already in existence. Indeed, given these considerations, this rationale seems constitutionally perverse—unable, constitutionally speaking, to justify the blanket extension here at issue.
Fourth, the statute’s legislative history suggests another possible justification. That
history refers frequently to the financial assistance the statute will bring the entertainment
industry, particularly through the promotion of exports. I recognize that Congress has
sometimes found that suppression of competition will help Americans sell abroad—though
it has simultaneously taken care to protect American buyers from higher domestic prices.
In doing so, however, Congress has exercised its commerce, not its copyright, power. I can
find nothing in the Copyright Clause that would authorize Congress to enhance the
copyright grant’s monopoly power, likely leading to higher prices both at home and abroad,
solely in order to produce higher foreign earnings. That objective is not a copyright
objective. Nor, standing alone, is it related to any other objective more closely tied to the
Clause itself. Neither can higher corporate profits alone justify the grant’s enhancement.
The Clause seeks public, not private, benefits.
Finally, the Court mentions as possible justifications “demographic, economic, and
technological changes”—by which the Court apparently means the facts that today people
communicate with the help of modern technology, live longer, and have children at a later
age. The first fact seems to argue not for, but instead against, extension. The second fact
seems already corrected for by the 1976 Act’s life-plus-50 term, which automatically grows
with lifespans. And the third fact—that adults are having children later in life—is a makeweight at best, providing no explanation of why the 1976 Act’s term of 50 years after an
author’s death—a longer term than was available to authors themselves for most of our
Nation’s history—is an insufficient potential bequest. The weakness of these final rationales
simply underscores the conclusion that emerges from consideration of earlier attempts at
justification: There is no legitimate, serious copyright-related justification for this statute.
III
The Court is concerned that our holding in this case not inhibit the broad
decisionmaking leeway that the Copyright Clause grants Congress. It is concerned about
the implications of today’s decision for the Copyright Act of 1976—an Act that changed
copyright’s basic term from 56 years (assuming renewal) to life of the author plus 50
years. It is concerned about having to determine just how many years of copyright is too
many—a determination that it fears would require it to find the “right” constitutional
number, a task for which the Court is not well suited.
I share the Court’s initial concern, about intrusion upon the decisionmaking authority
of Congress. But I do not believe it intrudes upon that authority to find the statute
unconstitutional on the basis of (1) a legal analysis of the Copyright Clause’s objectives;
(2) the total implausibility of any incentive effect; and (3) the statute’s apparent failure to
provide significant international uniformity. Nor does it intrude upon congressional
authority to consider rationality in light of the expressive values underlying the Copyright
Clause, related as it is to the First Amendment, and given the constitutional importance of
correctly drawing the relevant Clause/Amendment boundary. We cannot avoid the need to

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examine the statute carefully by saying that “Congress has not altered the traditional
contours of copyright protection,” for the sentence points to the question, rather than the
answer. Nor should we avoid that examination here. That degree of judicial vigilance—at
the far outer boundaries of the Clause—is warranted if we are to avoid the monopolies and
consequent restrictions of expression that the Clause, read consistently with the First
Amendment, seeks to preclude. And that vigilance is all the more necessary in a new
Century that will see intellectual property rights and the forms of expression that underlie
them play an ever more important role in the Nation’s economy and the lives of its citizens.
I do not share the Court’s concern that my view of the 1998 Act could
automatically doom the 1976 Act. . . . Regardless, the law provides means to protect
those who have reasonably relied upon prior copyright statutes. See Heckler v. Mathews
(1984). And, in any event, we are not here considering, and we need not consider, the
constitutionality of other copyright statutes.
Neither do I share the Court’s aversion to line-drawing in this case. Even if it is
difficult to draw a single clear bright line, the Court could easily decide (as I would decide)
that this particular statute simply goes too far. And such examples—of what goes too far—
sometimes offer better constitutional guidance than more absolute-sounding rules. In any
event, “this Court sits” in part to decide when a statute exceeds a constitutional boundary.
Finally, the Court complains that I have not “restrained” my argument or “train[ed
my] fire, as petitioners do, on Congress’ choice to place existing and future copyrights in
parity.” . . . A desire for “parity” between A (old copyrights) and B (new copyrights)
cannot justify extending A when there is no rational justification for extending B. At the
very least, (if I put aside my rationality characterization) to ask B to support A here is like
asking Tom Thumb to support Paul Bunyan’s ox. Where the case for extending new
copyrights is itself so weak, what “justice,” what “policy,” what “equity” can warrant the
tolls and barriers that extension of existing copyrights imposes?
IV
This statute will cause serious expression-related harm. It will likely restrict
traditional dissemination of copyrighted works. It will likely inhibit new forms of
dissemination through the use of new technology. It threatens to interfere with efforts to
preserve our Nation’s historical and cultural heritage and efforts to use that heritage, say,
to educate our Nation’s children. It is easy to understand how the statute might benefit the
private financial interests of corporations or heirs who own existing copyrights. But I
cannot find any constitutionally legitimate, copyright-related way in which the statute will
benefit the public. Indeed, in respect to existing works, the serious public harm and the
virtually nonexistent public benefit could not be more clear.
I have set forth the analysis upon which I rest these judgments. This analysis leads
inexorably to the conclusion that the statute cannot be understood rationally to advance
a constitutionally legitimate interest. The statute falls outside the scope of legislative
power that the Copyright Clause, read in light of the First Amendment, grants to
Congress. I would hold the statute unconstitutional.
I respectfully dissent.
APPENDIX TO OPINION OF BREYER, J.
A
The text’s estimates of the economic value of 1998 Act copyrights relative to the
economic value of a perpetual copyright, as well as the incremental value of a 20-year
extension of a 75-year term, rest upon the conservative future value and discount rate

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assumptions set forth in the brief of economist amici. Under these assumptions, if an
author expects to live 30 years after writing a book, the copyright extension (by
increasing the copyright term from “life of the author plus 50 years” to “life of the author
plus 70 years”) increases the author’s expected income from that book—i.e., the
economic incentive to write—by no more than about 0.33%.
The text assumes that the extension creates a term of 95 years (the term
corresponding to works made for hire and for all existing pre-1978 copyrights). Under
the economists’ conservative assumptions, the value of a 95-year copyright is slightly
more than 99.8% of the value of a perpetual copyright. If a “life plus 70” term applies,
and if an author lives 78 years after creation of a work (as with Irving Berlin and
Alexander’s Ragtime Band), the same assumptions yield a figure of 99.996%. . . .
Questions:
1.) Under Eldred, would a copyright term of 10,000 years, imposed both prospectively
and retrospectively, be constitutional—if accompanied by Congressional findings that
this was necessary to promote the progress of science?
2.) Reread pp 9–16 of The Public Domain. Justice Ginsburg believes that the internal limitations of the copyright system (such as fair use and the idea expression distinction) coupled
with the expression-promoting effect of copyright, are together enough to make copyright
law presumptively (though not categorically) immune from First Amendment scrutiny.
[The CTEA] protects authors’ original expression from unrestricted
exploitation. Protection of that order does not raise the free speech
concerns present when the government compels or burdens the communication of particular facts or ideas. The First Amendment securely protects
the freedom to make—or decline to make—one’s own speech; it bears less
heavily when speakers assert the right to make other people’s speeches. To
the extent such assertions raise First Amendment concerns, copyright’s
built-in free speech safeguards are generally adequate to address them.
Are archivists and librarians trying to digitize orphan works asserting “the right to
make other people’s speeches”? Does retrospective term extension—as to those works—
have an expression-promoting effect? Are the internal limitations of copyright enough to
protect their activity?
3.) What is the strongest criticism that could be made of Justice Breyer’s opinion? If his
proposed standard of review should be used here, why not in Commerce Clause cases?
4.) Justice Ginsburg and Justice Breyer both seem to think that “copyright is different,”
that its rules present special constitutional issues, though they disagree strongly on what
those differences are. If you had to sum up why Justice Ginsburg believes Congress
deserves judicial deference and that copyright legislation should be presumptively free
from First Amendment scrutiny, how would you do so? If you had to sum up why Justice
Breyer thinks that this issue deserves heightened scrutiny, how would you do so? How
do they frame the issue differently?
5.) Justice Breyer focuses on the lopsided ratio of harm to benefits imposed by term
extension. His argument is summarized in the comic book page that follows these notes.
What are the best arguments that the expressive costs and benefits of term extension are
i.) irrelevant constitutionally? ii.) vitally important in both the First Amendment and
Copyright Clause analysis?

Note: The Classics Protection and Access Act
The works whose copyright extension was upheld in Eldred began to enter the public
domain in 2019; there has been no push to further expand their copyright terms.
However, there has been a legislative development regarding the copyright term for a

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specific subset of works: pre-1972 sound recordings. In 2018, Congress passed the
“Classics Protection and Access Act” (“Classics Act”) as part of the Orrin G. Hatch–Bob
Goodlatte Music Modernization Act (“MMA”). This law grants certain federal rights to
pre-1972 sound recordings (previously, federal copyright law did not cover sound
recordings fixed before February 15, 1972; instead they were covered, if at all, by a
patchwork of state laws). These older recordings will enter the public domain gradually,
beginning in 2022: recordings published before 1923 will enter the public domain in
2022, and recordings published between 1923–1946 will enter the public domain after
the end of a 100-year term, from 2024–2029. Intriguingly, the Classics Act also contains
a limited exception allowing the use of orphan works: it exempts noncommercial uses of
pre-1972 sound recordings that are not being commercially exploited, so long as the user
has conducted a good faith, reasonable search for the rights owner, and the rights owner
has not objected within 90 days. (Note that the MMA contains other revisions that are
beyond the scope of this chapter. For example, the “Music Licensing Modernization Act”
provides a blanket licensing scheme for digital music services under 17 U.S.C. § 115.)

Golan v. Holder

565 U.S. 302 (2012)

GINSBURG, J., delivered the opinion of the Court. BREYER, J., filed a dissenting
opinion, in which ALITO, J., joined.
Justice GINSBURG delivered the opinion of the Court.
The Berne Convention for the Protection of Literary and Artistic Works (Berne Convention or Berne), which took effect in 1886, is the principal accord governing international
copyright relations. Latecomer to the international copyright regime launched by Berne,
the United States joined the Convention in 1989. To perfect U.S. implementation of Berne,
and as part of our response to the Uruguay Round of multilateral trade negotiations,
Congress, in 1994, gave works enjoying copyright protection abroad the same full term of
protection available to U.S. works. Congress did so in § 514 of the Uruguay Round Agreements Act (URAA), which grants copyright protection to preexisting works of Berne
member countries, protected in their country of origin, but lacking protection in the United
States for any of three reasons: The United States did not protect works from the country
of origin at the time of publication; the United States did not protect sound recordings fixed
before 1972; or the author had failed to comply with U.S. statutory formalities (formalities
Congress no longer requires as prerequisites to copyright protection).
The URAA accords no protection to a foreign work after its full copyright term has
expired, causing it to fall into the public domain, whether under the laws of the country of
origin or of this country. Works encompassed by § 514 are granted the protection they
would have enjoyed had the United States maintained copyright relations with the author’s
country or removed formalities incompatible with Berne. . . . To cushion the impact of their
placement in protected status, Congress included in § 514 ameliorating accommodations
for parties who had exploited affected works before the URAA was enacted.
Petitioners include orchestra conductors, musicians, publishers, and others who
formerly enjoyed free access to works § 514 removed from the public domain. They
maintain that the Constitution’s Copyright and Patent Clause, Art. I, § 8, cl. 8, and First

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Amendment both decree the invalidity of § 514. Under those prescriptions of our highest
law, petitioners assert, a work that has entered the public domain, for whatever reason,
must forever remain there.
In accord with the judgment of the Tenth Circuit, we conclude that § 514 does not
transgress constitutional limitations on Congress’ authority. Neither the Copyright and
Patent Clause nor the First Amendment, we hold, makes the public domain, in any and
all cases, a territory that works may never exit. . . .
II
We first address petitioners’ argument that Congress lacked authority, under the
Copyright Clause, to enact § 514. . . . Petitioners find in this grant of authority an
impenetrable barrier to the extension of copyright protection to authors whose writings,
for whatever reason, are in the public domain. We see no such barrier in the text of the
Copyright Clause, historical practice, or our precedents. . . .
Carried to its logical conclusion, petitioners persist, the Government’s position would
allow Congress to institute a second “limited” term after the first expires, a third after that,
and so on. Thus, as long as Congress legislated in installments, perpetual copyright terms
would be achievable. As in Eldred, the hypothetical legislative misbehavior petitioners posit
is far afield from the case before us. . . . Congress rationally could have concluded that
adherence to Berne “promotes the diffusion of knowledge.” A well-functioning international
copyright system would likely encourage the dissemination of existing and future works. . . .
The provision of incentives for the creation of new works is surely an essential means to
advance the spread of knowledge and learning. We hold, however, that it is not the sole
means Congress may use “[t]o promote the Progress of Science.” . . .
III
A
We next explain why the First Amendment does not inhibit the restoration
authorized by § 514. To do so, we first recapitulate the relevant part of our pathmarking
decision in Eldred. . . .
Concerning the First Amendment, we recognized that some restriction on expression
is the inherent and intended effect of every grant of copyright. Noting that the “Copyright
Clause and the First Amendment were adopted close in time,” we observed that the Framers
regarded copyright protection not simply as a limit on the manner in which expressive works
may be used. They also saw copyright as an “engine of free expression.” . . .
We then described the “traditional contours” of copyright protection, i.e., the
“idea/expression dichotomy” and the “fair use” defense. Both are recognized in our
jurisprudence as “built-in First Amendment accommodations.” . . .
Given the “speech-protective purposes and safeguards” embraced by copyright law,
we concluded in Eldred that there was no call for the heightened review petitioners sought
in that case. We reach the same conclusion here. . . .
B
Petitioners attempt to distinguish their challenge from the one turned away in Eldred.
First Amendment interests of a higher order are at stake here, petitioners say, because they—
unlike their counterparts in Eldred—enjoyed “vested rights” in works that had already
entered the public domain. The limited rights they retain under copyright law’s “built-in
safeguards” are, in their view, no substitute for the unlimited use they enjoyed before § 514’s
enactment. Nor, petitioners urge, does § 514’s “unprecedented” foray into the public domain

Limitations on Congressional Power: Limited Times, Term Extension and the First Amendment

71

possess the historical pedigree that supported the term extension at issue in Eldred.
. . . To copyright lawyers, the “vested rights” formulation might sound exactly
backwards: Rights typically vest at the outset of copyright protection, in an author or
rightholder. Once the term of protection ends, the works do not revest in any rightholder.
Instead, the works simply lapse into the public domain. Anyone has free access to the
public domain, but no one, after the copyright term has expired, acquires ownership
rights in the once-protected works. . . .
Section 514, we add, does not impose a blanket prohibition on public access.
Petitioners protest that fair use and the idea/expression dichotomy “are plainly inadequate
to protect the speech and expression rights that § 514 took from petitioners, or . . . the
public”—that is, “the unrestricted right to perform, copy, teach and distribute the entire
work, for any reason.” “Playing a few bars of a Shostakovich symphony,” petitioners
observe, “is no substitute for performing the entire work.” But Congress has not put
petitioners in this bind. The question here, as in Eldred, is whether would-be users must
pay for their desired use of the author’s expression, or else limit their exploitation to
“fair use” of that work. Prokofiev’s Peter and the Wolf could once be performed free
of charge; after § 514 the right to perform it must be obtained in the marketplace. . . .
IV
Congress determined that U.S. interests were best served by our full participation
in the dominant system of international copyright protection. . . . The judgment § 514
expresses lies well within the ken of the political branches. It is our obligation, of course,
to determine whether the action Congress took, wise or not, encounters any constitutional
shoal. For the reasons stated, we are satisfied it does not. The judgment of the Court of
Appeals for the Tenth Circuit is therefore
Affirmed.
Justice BREYER, with whom Justice ALITO joins, dissenting.
In order “[t]o promote the Progress of Science” (by which term the Founders meant
“learning” or “knowledge”), the Constitution’s Copyright Clause grants Congress the
power to “secur[e] for limited Times to Authors . . . the exclusive Right to their . . .
Writings.” Art. I, § 8, cl. 8. This “exclusive Right” allows its holder to charge a fee to
those who wish to use a copyrighted work, and the ability to charge that fee encourages
the production of new material. In this sense, a copyright is, in Macaulay’s words, a “tax
on readers for the purpose of giving a bounty to writers”—a bounty designed to
encourage new production. As the Court said in Eldred, “‘[t]he economic philosophy
behind the [Copyright] [C]lause . . . is the conviction that encouragement of individual
effort by personal gain is the best way to advance public welfare through the talents of
authors and inventors.’”
The statute before us, however, does not encourage anyone to produce a single new
work. By definition, it bestows monetary rewards only on owners of old works—works
that have already been created and already are in the American public domain. At the same
time, the statute inhibits the dissemination of those works, foreign works published abroad
after 1923, of which there are many millions, including films, works of art, innumerable
photographs, and, of course, books—books that (in the absence of the statute) would
assume their rightful places in computer-accessible databases, spreading knowledge
throughout the world. In my view, the Copyright Clause does not authorize Congress to
enact this statute. And I consequently dissent.

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I NTELLECTUAL P ROPERTY & THE C ONSTITUTION

I
The possibility of eliciting new production is, and always has been, an essential
precondition for American copyright protection. . . .
Yet, as the Founders recognized, monopoly is a two-edged sword. On the one hand,
it can encourage production of new works. In the absence of copyright protection, anyone
might freely copy the products of an author’s creative labor, appropriating the benefits
without incurring the nonrepeatable costs of creation, thereby deterring authors from
exerting themselves in the first place. On the other hand, copyright tends to restrict the
dissemination (and use) of works once produced either because the absence of competition
translates directly into higher consumer prices or because the need to secure copying
permission sometimes imposes administrative costs that make it difficult for potential users
of a copyrighted work to find its owner and strike a bargain. . . .
. . . [T]ext, history, and precedent demonstrate that the Copyright Clause places
great value on the power of copyright to elicit new production. Congress in particular
cases may determine that copyright’s ability to do so outweighs any concomitant high
prices, administrative costs, and restrictions on dissemination. And when it does so, we
must respect its judgment. But does the Clause empower Congress to enact a statute that
withdraws works from the public domain, brings about higher prices and costs, and in
doing so seriously restricts dissemination, particularly to those who need it for scholarly,
educational, or cultural purposes—all without providing any additional incentive for the
production of new material? That is the question before us. And, as I have said, I believe
the answer is no. Congress in this statute has exceeded what are, under any plausible
reading of the Copyright Clause, its permissible limits.
II
A
The provision before us takes works from the public domain, at least as of January
1, 1996. It then restricts the dissemination of those works in two ways.
First, “restored copyright” holders can now charge fees for works that consumers
previously used for free. The price of a score of Shostakovich’s Preludes and Fugues Op.
87, for example, has risen by a multiple of seven. . . . If a school orchestra or other nonprofit
organization cannot afford the new charges, so be it. They will have to do without. . . .
Second, and at least as important, the statute creates administrative costs, such as
the costs of determining whether a work is the subject of a “restored copyright,” searching
for a “restored copyright” holder, and negotiating a fee. Congress has tried to ease the
administrative burden of contacting copyright holders and negotiating prices for those
whom the statute calls “reliance part[ies],” namely those who previously had used such
works when they were freely available in the public domain. But Congress has done
nothing to ease the administrative burden of securing permission from copyright owners
that is placed upon those who want to use a work that they did not previously use, and this
is a particular problem when it comes to “orphan works”—older and more obscure works
with minimal commercial value that have copyright owners who are difficult or
impossible to track down. . . .
There are millions of such works. For example, according to European Union figures,
there are 13 million orphan books in the European Union (13% of the total number of books
in-copyright there), 225,000 orphan films in European film archives, and 17 million orphan
photographs in United Kingdom museums. How is a university, a film collector, a musician,
a database compiler, or a scholar now to obtain permission to use any such lesser known
foreign work previously in the American public domain? Consider the questions that any

Limitations on Congressional Power: Limited Times, Term Extension and the First Amendment

73

such individual, group, or institution usually must answer: Is the work eligible for restoration
under the statute? If so, who now holds the copyright—the author? an heir? a publisher? an
association? a long-lost cousin? Whom must we contact? What is the address? Suppose no
one answers? How do we conduct a negotiation?
It is consequently not surprising to learn that the Los Angeles Public Library has
been unable to make its collection of Mexican folk music publicly available because of
problems locating copyright owners, that a Jewish cultural organization has abandoned
similar efforts to make available Jewish cultural music and other materials, or that film
preservers, museums, universities, scholars, database compilers, and others report that the
administrative costs associated with trying to locate foreign copyright owners have forced
them to curtail their cultural, scholarly, or other work-preserving efforts. . . .
B
. . . Worst of all, “restored copyright” protection removes material from the public
domain. In doing so, it reverses the payment expectations of those who used, or intended
to use, works that they thought belonged to them. Were Congress to act similarly with
respect to well-established property rights, the problem would be obvious. This statute
analogously restricts, and thereby diminishes, Americans’ preexisting freedom to use
formerly public domain material in their expressive activities.
Thus, while the majority correctly observes that the dissemination-restricting harms
of copyright normally present problems appropriate for legislation to resolve, the question
is whether the Copyright Clause permits Congress seriously to exacerbate such a problem
by taking works out of the public domain without a countervailing benefit. This question
is appropriate for judicial resolution. Indeed, unlike Eldred where the Court had to decide
a complicated line-drawing question—when is a copyright term too long?—here an easily
administrable standard is available—a standard that would require works that have
already fallen into the public domain to stay there.
The several, just mentioned features of the present statute are important, for they
distinguish it from other copyright laws. By removing material from the public domain,
the statute, in literal terms, “abridges” a preexisting freedom to speak. In practical terms,
members of the public might well have decided what to say, as well as when and how to
say it, in part by reviewing with a view to repeating, expression that they reasonably
believed was, or would be, freely available. Given these speech implications, it is not
surprising that Congress has long sought to protect public domain material when revising
the copyright laws. And this Court has assumed the particular importance of public
domain material in roughly analogous circumstances. See Graham, 383 U.S. at 6
(“Congress may not authorize the issuance of patents whose effects are to remove existent
knowledge from the public domain”); Kewanee Oil Co. v. Bicron Corp. (1974) (trade
secret protection is not incompatible with “policy that matter once in the public domain
must remain in the public domain”); Cox Broadcasting Corp. v. Cohn (1975) (First
Amendment prohibits sanctioning press for publishing material disclosed in public court
documents); see also Dastar Corp. v. Twentieth Century Fox Film Corp. (2003) (“The
right to copy . . . once a copyright has expired . . . passes to the public”). . . .
Taken together, these speech-related harms (e.g., restricting use of previously available material; reversing payment expectations; rewarding rent-seekers at the public’s expense) at least show the presence of a First Amendment interest. And that is enough. For
present purposes, I need not decide whether the harms to that interest show a violation of
the First Amendment. I need only point to the importance of interpreting the Constitution
as a single document—a document that we should not read as setting the Copyright Clause

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I NTELLECTUAL P ROPERTY & THE C ONSTITUTION

and the First Amendment at cross-purposes. Nor need I advocate the application here of
strict or specially heightened review. I need only find that the First Amendment interest is
important enough to require courts to scrutinize with some care the reasons claimed to
justify the Act in order to determine whether they constitute reasonable copyright-related
justifications for the serious harms, including speech-related harms, which the Act seems
likely to impose.
C
The majority makes several other arguments. First, it argues that the Clause does not
require the “creation of at least one new work,” but may instead “promote the Progress of
Science” in other ways. And it specifically mentions the “dissemination of existing and
future works” as determinative here. The industry experts to whom the majority refers
argue that copyright protection of already existing works can help, say, music publishers
or film distributers raise prices, produce extra profits and consequently lead them to publish
or distribute works they might otherwise have ignored. . . . But this kind of argument,
which can be made by distributers of all sorts of goods, ranging from kiwi fruit to Swedish
furniture, has little if anything to do with the nonrepeatable costs of initial creation, which
is the special concern of copyright protection.
Moreover, the argument proves too much. . . . It is the kind of argument that could
justify a legislature’s withdrawing from the public domain the works, say, of Hawthorne
or of Swift or for that matter the King James Bible in order to encourage further
publication of those works; and, it could even more easily justify similar action in the
case of lesser known early works, perhaps those of the Venerable Bede. . . .
III
The fact that, by withdrawing material from the public domain, the statute inhibits an
important preexisting flow of information is sufficient, when combined with the other features of the statute that I have discussed, to convince me that the Copyright Clause, interpreted in the light of the First Amendment, does not authorize Congress to enact this statute.
I respectfully dissent from the Court’s contrary conclusion.
P ROBLEM 2-3
T ERM L IMITS .
Citing the importance to commerce of investments in innovation, whether artistic or
commercial, and the uncertainty “in this modern technological age” about when
investments in innovation will finally pay off, the Congress passes the “Defense of
Innovation & Science, New Extension Years” Act (or DISNEY). DISNEY grants a
supplementary right to holders of copyrights and patents. The supplementary right
lasts for an additional 20 years. It applies both to existing copyrights and patents and
those that expired during the last 20 years. The accompanying Legislative Report
explicitly states that Congress is taking its authority, not from the Copyright Clause,
but from the Commerce Clause.
Is DISNEY constitutional in whole or part? What type of constitutional analysis
should the court perform in cases like this?

CHAPTER THREE

Intellectual Property &
the First Amendment

San Francisco Arts & Athletics v. U.S. Olympic Committee

483 U.S. 522 (1987)

Justice POWELL delivered the opinion of the Court.
In this case, we consider the scope and constitutionality of a provision of the Amateur
Sports Act of 1978, 36 U.S.C. §§ 371–396, that authorizes the United States Olympic
Committee to prohibit certain commercial and promotional uses of the word “Olympic.”
Petitioner San Francisco Arts & Athletics, Inc. (SFAA), is a nonprofit California
corporation. The SFAA originally sought to incorporate under the name “Golden Gate
Olympic Association,” but was told by the California Department of Corporations that the
word “Olympic” could not appear in a corporate title. After its incorporation in 1981, the
SFAA nevertheless began to promote the “Gay Olympic Games,” using those words on its
letterheads and mailings and in local newspapers. The games were to be a 9-day event to
begin in August 1982, in San Francisco, California. The SFAA expected athletes from
hundreds of cities in this country and from cities all over the world. . . . To cover the cost of
the planned Games, the SFAA sold T-shirts, buttons, bumper stickers, and other merchandise
bearing the title “Gay Olympic Games.”2

Poster and flyer from the Gay Olympic Games

Section 110 of the Amateur Sports Act (Act), grants respondent United States
Olympic Committee (USOC) the right to prohibit certain commercial and promotional
uses of the word “Olympic” and various Olympic symbols.4 In late December 1981, the
2
The 1982 athletic event ultimately was held under the name “Gay Games I.” A total of 1,300 men and
women from 12 countries, 27 States, and 179 cities participated. . . .
4
Section 110 of the Act, as set forth in 36 U.S.C. § 380, provides:
“Without the consent of the [USOC], any person who uses for the purpose of trade, to induce the sale of any
goods or services, or to promote any theatrical exhibition, athletic performance, or competition—
“(1) the symbol of the International Olympic Committee, consisting of 5 interlocking rings;
“(2) the emblem of the [USOC], consisting of an escutcheon having a blue chief and vertically
extending red and white bars on the base with 5 interlocking rings displayed on the chief;
“(3) any trademark, trade name, sign, symbol, or insignia falsely representing association with, or
authorization by, the International Olympic Committee or the [USOC]; or
“(4) the words ‘Olympic’, ‘Olympiad’, ‘Citius Altius Fortius’, or any combination or simulation
thereof tending to cause confusion, to cause mistake, to deceive, or to falsely suggest a connection

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INTELLECTUAL PROPERTY & THE FIRST AMENDMENT

executive director of the USOC wrote to the SFAA, informing it of the existence of the
Amateur Sports Act, and requesting that the SFAA immediately terminate use of the word
“Olympic” in its description of the planned Games. The SFAA at first agreed to substitute
the word “Athletic” for the word “Olympic,” but, one month later, resumed use of the
term. . . . In August, the USOC brought suit in the Federal District Court for the Northern
District of California to enjoin the SFAA’s use of the word “Olympic.” The District Court
granted a temporary restraining order and then a preliminary injunction. The Court of
Appeals for the Ninth Circuit affirmed. After further proceedings, the District Court
granted the USOC summary judgment and a permanent injunction. . . .
III
This Court has recognized that “[n]ational protection of trademarks is desirable . . .
because trademarks foster competition and the maintenance of quality by securing to the
producer the benefits of good reputation.” . . .
The protection granted to the USOC’s use of the Olympic words and symbols
differs from the normal trademark protection in two respects: the USOC need not prove
that a contested use is likely to cause confusion, and an unauthorized user of the word
does not have available the normal statutory defenses. The SFAA argues, in effect, that
the differences between the Lanham Act and § 110 are of constitutional dimension. First,
the SFAA contends that the word “Olympic” is a generic7 word that could not gain
trademark protection under the Lanham Act. The SFAA argues that this prohibition is
constitutionally required and thus that the First Amendment prohibits Congress from
granting a trademark in the word “Olympic.” Second, the SFAA argues that the First
Amendment prohibits Congress from granting exclusive use of a word absent a
requirement that the authorized user prove that an unauthorized use is likely to cause
confusion. We address these contentions in turn.
A
This Court has recognized that words are not always fungible, and that the suppression of particular words “run[s] a substantial risk of suppressing ideas in the process.”
Cohen v. California (1971). The SFAA argues that this principle prohibits Congress from
granting the USOC exclusive control of uses of the word “Olympic,” a word that the SFAA
views as generic.8 Yet this recognition always has been balanced against the principle that
when a word acquires value “as the result of organization and the expenditure of labor,
skill, and money” by an entity, that entity constitutionally may obtain a limited property
right in the word. International News Service v. Associated Press (1918).
with the [USOC] or any Olympic activity;
“shall be subject to suit in a civil action by the [USOC] for the remedies provided in the Act of July 5,
1946 (60 Stat. 427; popularly known as the Trademark Act of 1946 [Lanham Act]) [15 U.S.C. § 1051
et seq.].[”] . . .
7
A common descriptive name of a product or service is generic. Because a generic name by definition does
not distinguish the identity of a particular product, it cannot be registered as a trademark under the Lanham
Act. See §§ 2, 14(c), 15 U.S.C. §§ 1052, 1064(c). See also 1 J. McCarthy, Trademarks and Unfair
Competition § 12:1, p. 520 (1984).
8
This grant by statute of exclusive use of distinctive words and symbols by Congress is not unique. Violation
of some of these statutes may result in criminal penalties. See, e.g., 18 U.S.C. § 705 (veterans’ organizations);
§ 706 (American National Red Cross); § 707 (4-H Club); § 711 (“Smokey Bear”); § 711a (“Woodsy Owl”).
See also FTC v. A.P.W. Paper Co. (1946) (reviewing application of Red Cross statute). Others, like the USOC
statute, provide for civil enforcement. See, e.g., 36 U.S.C. § 18c (Daughters of the American Revolution);
§ 27 (Boy Scouts); § 36 (Girl Scouts); § 1086 (Little League Baseball); § 3305 (1982 ed., Supp. III)
(American National Theater and Academy).

Intellectual Property & the First Amendment

77

There is no need in this case to decide whether Congress ever could grant a private
entity exclusive use of a generic word. Congress reasonably could conclude that the commercial and promotional value of the word “Olympic” was the product of the USOC’s
“own talents and energy, the end result of much time, effort, and expense.” Zacchini v.
Scripps-Howard Broadcasting Co. (1977). The USOC, together with respondent
International Olympic Committee (IOC), have used the word “Olympic” at least since
1896, when the modern Olympic Games began. Baron Pierre de Coubertin of France,
acting pursuant to a government commission, then proposed the revival of the ancient
Olympic Games to promote international understanding. De Coubertin sought to identify
the “spirit” of the ancient Olympic Games that had been corrupted by the influence of
money and politics. De Coubertin thus formed the IOC, that has established elaborate
rules and procedures for the conduct of the modern Olympics. In addition, these rules
direct every national committee to protect the use of the Olympic flag, symbol, flame, and
motto from unauthorized use. Under the IOC Charter, the USOC is the national Olympic
committee for the United States with the sole authority to represent the United States at
the Olympic Games. Pursuant to this authority, the USOC has used the Olympic words
and symbols extensively in this country to fulfill its object under the Olympic Charter of
“ensur[ing] the development and safeguarding of the Olympic Movement and sport.”
The history of the origins and associations of the word “Olympic” demonstrates the
meritlessness of the SFAA’s contention that Congress simply plucked a generic word out of
the English vocabulary and granted its exclusive use to the USOC. Congress reasonably
could find that since 1896, the word “Olympic” has acquired what in trademark law is known
as a secondary meaning—it “has become distinctive of [the USOC’s] goods in commerce.”
The right to adopt and use such a word “to distinguish the goods or property [of] the person
whose mark it is, to the exclusion of use by all other persons, has been long recognized.”
Trade-Mark Cases. Because Congress reasonably could conclude that the USOC has
distinguished the word “Olympic” through its own efforts, Congress’ decision to grant the
USOC a limited property right in the word “Olympic” falls within the scope of trademark
law protections, and thus certainly within constitutional bounds.
B
Congress also acted reasonably when it concluded that the USOC should not be required to prove that an unauthorized use of the word “Olympic” is likely to confuse the
public. To the extent that § 110 applies to uses “for the purpose of trade [or] to induce the
sale of any goods or services,” 36 U.S.C. § 380(a), its application is to commercial speech.
Commercial speech “receives a limited form of First Amendment protection.” Section 110
also allows the USOC to prohibit the use of “Olympic” for promotion of theatrical and
athletic events. Although many of these promotional uses will be commercial speech, some
uses may go beyond the “strictly business” context. See Friedman v. Rogers (1979). In this
case, the SFAA claims that its use of the word “Olympic” was intended to convey a political
statement about the status of homosexuals in society.13 Thus, the SFAA claims that in this
case § 110 suppresses political speech.
13
According to the SFAA’s president, the Gay Olympic Games would have offered three “very important
opportunities”:
“1) To provide a healthy recreational alternative to a suppressed minority.
“2) To educate the public at large towards a more reasonable characterization of gay men and women.
“3) To attempt, through athletics, to bring about a positive and gradual assimilation of gay men and
women, as well as gays and non-gays, and to diminish the ageist, sexist and racist divisiveness
existing in all communities regardless of sexual orientation.”
App. 93. His expectations

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INTELLECTUAL PROPERTY & THE FIRST AMENDMENT

By prohibiting the use of one word for particular purposes, neither Congress nor
the USOC has prohibited the SFAA from conveying its message. The SFAA held its
athletic event in its planned format under the names “Gay Games I” and “Gay Games II”
in 1982 and 1986, respectively. Nor is it clear that § 110 restricts purely expressive uses
of the word “Olympic.” Section 110 restricts only the manner in which the SFAA may
convey its message. The restrictions on expressive speech properly are characterized as
incidental to the primary congressional purpose of encouraging and rewarding the
USOC’s activities. The appropriate inquiry is thus whether the incidental restrictions on
First Amendment freedoms are greater than necessary to further a substantial
governmental interest. United States v. O’Brien (1968).
One reason for Congress to grant the USOC exclusive control of the word
“Olympic,” as with other trademarks, is to ensure that the USOC receives the benefit of
its own efforts so that the USOC will have an incentive to continue to produce a “quality
product,” that, in turn, benefits the public. But in the special circumstance of the USOC,
Congress has a broader public interest in promoting, through the activities of the USOC,
the participation of amateur athletes from the United States in “the great four-yearly sport
festival, the Olympic Games.” . . .
The restrictions of § 110 are not broader than Congress reasonably could have
determined to be necessary to further these interests. Section 110 primarily applies to all
uses of the word “Olympic” to induce the sale of goods or services. Although the Lanham
Act protects only against confusing uses, Congress’ judgment respecting a certain word is
not so limited. Congress reasonably could conclude that most commercial uses of the
Olympic words and symbols are likely to be confusing. It also could determine that
unauthorized uses, even if not confusing, nevertheless may harm the USOC by lessening
the distinctiveness and thus the commercial value of the marks.
In this case, the SFAA sought to sell T-shirts, buttons, bumper stickers, and other
items, all emblazoned with the title “Gay Olympic Games.” The possibility for confusion
as to sponsorship is obvious. Moreover, it is clear that the SFAA sought to exploit the
“commercial magnetism” of the word given value by the USOC. There is no question
that this unauthorized use could undercut the USOC’s efforts to use, and sell the right to
use, the word in the future, since much of the word’s value comes from its limited use.
Such an adverse effect on the USOC’s activities is directly contrary to Congress’ interest.
Even though this protection may exceed the traditional rights of a trademark owner in
certain circumstances, the application of the Act to this commercial speech is not broader
than necessary to protect the legitimate congressional interest and therefore does not
violate the First Amendment.
Section 110 also extends to promotional uses of the word “Olympic,” even if the
promotion is not to induce the sale of goods. Under § 110, the USOC may prohibit purely
promotional uses of the word only when the promotion relates to an athletic or theatrical
event. The USOC created the value of the word by using it in connection with an athletic
event. Congress reasonably could find that use of the word by other entities to promote an
athletic event would directly impinge on the USOC’s legitimate right of exclusive use. The
“were that people of all persuasions would be drawn to the event because of its Olympic format and
that its nature of ‘serious fun’ would create a climate of friendship and co-operation[;] false images
and misconceptions about gay people would decline as a result of a participatory [sic ] educational
process, and benefit ALL communities.”
Id., at 93–94. He thought “[t]he term ‘Olympic’ best describe[d] [the SFAA’s] undertaking” because it
embodied the concepts of “peace, friendship and positive social interaction.” Id., at 99.

Intellectual Property & the First Amendment

79

SFAA’s proposed use of the word is an excellent example. The “Gay Olympic Games” were
to take place over a 9-day period and were to be held in different locations around the world.
They were to include a torch relay, a parade with uniformed athletes of both sexes divided
by city, an “Olympic anthem” and “Olympic Committee,” and the award of gold, silver, and
bronze medals, and were advertised under a logo of three overlapping rings. All of these
features directly parallel the modern-day Olympics, not the Olympic Games that occurred
in ancient Greece. The image the SFAA sought to invoke was exactly the image carefully
cultivated by the USOC. The SFAA’s expressive use of the word cannot be divorced from
the value the USOC’s efforts have given to it. The mere fact that the SFAA claims an
expressive, as opposed to a purely commercial, purpose does not give it a First Amendment
right to “appropriat[e] to itself the harvest of those who have sown.” International News
Service v. Associated Press (1918).19 The USOC’s right to prohibit use of the word
“Olympic” in the promotion of athletic events is at the core of its legitimate property right.
IV
The SFAA argues that even if the exclusive use granted by § 110 does not violate
the First Amendment, the USOC’s enforcement of that right is discriminatory in violation
of the Fifth Amendment.21 The fundamental inquiry is whether the USOC is a
governmental actor to whom the prohibitions of the Constitution apply.22 The USOC is
a “private corporatio[n] established under Federal law.” 36 U.S.C. § 1101(46). In the Act,
Congress granted the USOC a corporate charter, § 371, imposed certain requirements on
the USOC, and provided for some USOC funding through exclusive use of the Olympic
words and symbols, § 380, and through direct grants.
19
The SFAA claims a superior right to the use of the word “Olympic” because it is a nonprofit corporation
and its athletic event was not organized for the primary purpose of commercial gain. But when the question
is the scope of a legitimate property right in a word, the SFAA’s distinction is inapposite. As this Court has
noted in the analogous context of “fair use” under the Copyright Act:
“The crux of the profit/nonprofit distinction is not whether the sole motive of the use is monetary
gain but whether the user stands to profit from exploitation of the [protected] material without paying
the customary price.”
Harper & Row (1985). Here, the SFAA’s proposed use of the word “Olympic” was a clear attempt to exploit
the imagery and goodwill created by the USOC.
21
The SFAA invokes the Fourteenth Amendment for its discriminatory enforcement claim. The Fourteenth
Amendment applies to actions by a State. The claimed association in this case is between the USOC and the
Federal Government. Therefore, the Fourteenth Amendment does not apply. The Fifth Amendment, however,
does apply to the Federal Government and contains an equal protection component. Bolling v. Sharpe (1954).
“This Court’s approach to Fifth Amendment equal protection claims has . . . been precisely the same as to
equal protection claims under the Fourteenth Amendment.” Weinberger v. Wiesenfeld (1975). See Buckley v.
Valeo (1976) (per curiam). The Petitioners raised the issue of discriminatory enforcement in their petition
for certiorari, and both petitioners and respondents have briefed the issue fully. Accordingly, we address the
claim as one under the Fifth Amendment.
22
Because we find no governmental action, we need not address the merits of the SFAA’s discriminatory
enforcement claim. We note, however, that the SFAA’s claim of discriminatory enforcement is far from
compelling. As of 1982 when this suit began, the USOC had brought 22 oppositions to trademark applications
and one petition to cancel. For example, the USOC successfully prohibited registration of the mark “Golden
Age Olympics.” The USOC also litigated numerous suits prior to bringing this action, prohibiting use of the
Olympic words and symbols by such entities as the National Amateur Sports Foundation, a shoe company,
the International Federation of Body Builders, and a bus company. Since 1982, the USOC has brought a
number of additional suits against various companies and the March of Dimes Birth Defects Foundation. The
USOC has authorized the use of the word “Olympic” to organizations that sponsor athletic competitions and
events for handicapped persons (“Special Olympics”) and for youth (“Junior Olympics” and “Explorer
Olympics”). Both of these uses directly relate to a purpose of the USOC established by its charter. See 36
U.S.C. §§ 374(7), (13), reprinted supra, at 2981, n.17. The USOC has not consented to any other uses of the

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Most fundamentally, this Court has held that a government “normally can be held
responsible for a private decision only when it has exercised coercive power or has provided
such significant encouragement, either overt or covert, that the choice must in law be
deemed to be that of the [government].” The USOC’s choice of how to enforce its exclusive
right to use the word “Olympic” simply is not a governmental decision. There is no evidence
that the Federal Government coerced or encouraged the USOC in the exercise of its right.
At most, the Federal Government, by failing to supervise the USOC’s use of its rights, can
be said to exercise “[m]ere approval of or acquiescence in the initiatives” of the USOC.
Blum v. Yaretsky (1982). This is not enough to make the USOC’s actions those of the
Government. Because the USOC is not a governmental actor, the SFAA’s claim that the
USOC has enforced its rights in a discriminatory manner must fail.
V
Accordingly, we affirm the judgment of the Court of Appeals for the Ninth Circuit.
It is so ordered.
Justice O’CONNOR, with whom Justice BLACKMUN joins, concurring in part and
dissenting in part.
I agree with the Court’s construction of § 110 of the Amateur Sports Act, 92 Stat.
3048, 36 U.S.C. § 380, and with its holding that the statute is “within constitutional
bounds.” Therefore, I join Parts I through III of the Court’s opinion. But largely for the
reasons explained by Justice Brennan in Part I-B of his dissenting opinion, I believe the
United States Olympic Committee and the United States are joint participants in the
challenged activity and as such are subject to the equal protection provisions of the Fifth
Amendment. Accordingly, I would reverse the Court of Appeals’ finding of no
Government action and remand the case for determination of petitioners’ claim of
discriminatory enforcement.
Justice BRENNAN, with whom Justice MARSHALL joins, dissenting.
The Court wholly fails to appreciate both the congressionally created
interdependence between the United States Olympic Committee (USOC) and the United
States, and the significant extent to which § 110 of the Amateur Sports Act of 1978, 36
U.S.C. § 380, infringes on noncommercial speech. I would find that the action of the
USOC challenged here is Government action, and that § 110 is both substantially
overbroad and discriminates on the basis of content. I therefore dissent.
I
For two independent reasons, the action challenged here constitutes Government
action. First, the USOC performs important governmental functions and should therefore
be considered a governmental actor. Second, there exists “a sufficiently close nexus
between the [Government] and the challenged action” of the USOC that “the action of
the latter may be fairly treated as that of the [Government] itself.” Jackson v.
Metropolitan Edison Co. (1974).
A
Examination of the powers and functions bestowed by the Government upon the
word in connection with athletic competitions or events.
The USOC necessarily has discretion as to when and against whom it files opposition to trademark
applications, and when and against whom it institutes suits. The record before us strongly indicates that the
USOC has acted strictly in accord with its charter and that there has been no actionable discrimination.

Intellectual Property & the First Amendment

81

USOC makes clear that the USOC must be considered a Government actor. . . .
The Court has repeatedly held, however, that “when private individuals or groups
are endowed by the State with powers or functions governmental in nature, they become
agencies or instrumentalities of the State and subject to its constitutional limitations.”
Evans v. Newton (1966). See Terry v. Adams (1953) (private political association and its
elections constitute state action); Marsh v. Alabama (1946) (privately owned “company
town” is a state actor). Moreover, a finding of government action is particularly appropriate
when the function performed is “traditionally the exclusive prerogative” of government.
Jackson v. Metropolitan Edison Co. Patently, Congress has endowed the USOC with
traditional governmental powers that enable it to perform a governmental function. . . .
C
A close examination of the USOC and the Government thus reveals a unique
interdependence between the two. Although at one time amateur sports was a concern
merely of private entities, and the Olympic Games an event of significance only to
individuals with a particular interest in athletic competition, that era is passed. In the
Amateur Sports Act of 1978, Congress placed the power and prestige of the United States
Government behind a single, central sports organization. Congress delegated to the USOC
functions that Government actors traditionally perform—the representation of the Nation
abroad and the administration of all private organizations in a particular economic sector.
The representation function is of particular significance here, in my view, because an
organization that need not adhere to the Constitution cannot meaningfully represent this
Nation. The Government is free, of course, to “privatize” some functions it would
otherwise perform. But such privatization ought not automatically release those who
perform Government functions from constitutional obligations. . . .
II
Section 110(a)(4) prohibits “any person” from using the word “Olympic” “[w]ithout the consent of the [USOC] for the purpose of trade, to induce the sale of any goods
or services, or to promote any theatrical exhibition, athletic performance, or
competition.” The Court construes this section to give the USOC authority over use of
the word “Olympic” which far surpasses that provided by a standard trademark. The
Court ignores the serious First Amendment problems created by its interpretation. It
holds that § 110(a)(4) regulates primarily commercial speech, and that this section
imposes only those incidental restrictions on expressive speech necessary to further a
substantial governmental interest.
I disagree. The statute is overbroad on its face because it is susceptible of
application to a substantial amount of noncommercial speech, and vests the USOC with
unguided discretion to approve and disapprove others’ noncommercial use of “Olympic.”
Moreover, by eliminating even noncommercial uses of a particular word, it
unconstitutionally infringes on the SFAA’s right to freedom of expression. The Act also
restricts speech in a way that is not content neutral. The Court’s justifications of these
infringements on First Amendment rights are flimsy. The statute cannot be characterized
as a mere regulation of the “manner” of speech, and does not serve any Government
purpose that would not effectively be protected by giving the USOC a standard
commercial trademark. Therefore, as construed by the Court, § 110(a)(4) cannot
withstand the First Amendment challenge presented by petitioners.
A
The USOC has held a trademark in the word “Olympic” since 1896, and § 110(a)(3)

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of the Amateur Sports Act perpetuates the USOC’s protection against infringement of its
trademarks. To be more than statutory surplusage, then, § 110(a)(4) must provide
something more than a normal trademark. Thus, the Court finds that § 110(a)(4) grants to
the USOC a novel and expansive word-use authority. In my view, the Act, as interpreted
by the Court, is substantially overbroad, violating the First Amendment because it
prohibits “a substantial amount of constitutionally protected conduct.” The Amateur
Sports Act is substantially overbroad in two respects. First, it grants the USOC the
remedies of a commercial trademark to regulate the use of the word “Olympic,” but
refuses to interpret the Act to incorporate the defenses to trademark infringement provided
in the Lanham Act. These defenses are essential safeguards which prevent trademark
power from infringing upon constitutionally protected speech. Second, the Court
construes § 110(a)(4) to grant the USOC unconstitutional authority to prohibit use of
“Olympic” in the “promotion of theatrical and athletic events,” even if the promotional
activities are noncommercial or expressive.
1
The first part of § 110 prohibits use of the word “Olympic” “for the purpose of trade”
or “to induce the sale of any goods or services.” There is an important difference between the
word-use authority granted by this portion of § 110 and a Lanham Act trademark: the former
primarily affects noncommercial speech, while the latter does not.
Charitable solicitation and political advocacy by organizations such as SFAA may
in part consist of commercial speech regulated by trademark law, but the expressive
element of such speech has been sheltered from unconstitutional harm by Lanham Act
defenses. Without them, the Amateur Sports Act prohibits a substantial amount of
noncommercial speech.
Trademark protection has been carefully confined to the realm of commercial
speech by two important limitations in the Lanham Act. First, the danger of substantial
regulation of noncommercial speech is diminished by denying enforcement of a
trademark against uses of words that are not likely “to cause confusion, to cause mistake,
or to deceive.” See 15 U.S.C. § 1066. Confusion occurs when consumers make an incorrect mental association between the involved commercial products or their producers. In
contrast, § 110(a)(4) regulates even nonconfusing uses of “Olympic.” . . . Because § 110
does not incorporate the requirement that a defendant’s use of the word be confusing to
consumers, it regulates an extraordinary range of noncommercial speech.
The fair-use defense also prevents the award of a trademark from regulating a substantial amount of noncommercial speech. See 15 U.S.C. § 1115(b)(4). The Lanham Act
allows “the use of the name, term, or device . . . which is descriptive of and used fairly
and in good faith only to describe to users the goods or services of such party.” . . .
Congress’ failure to incorporate this important defense in § 110(a)(4) confers an
unprecedented right on the USOC. See Park ’N Fly, Inc. v. Dollar Park and Fly, Inc.
(1985) (noting that fair-use doctrine assists in preventing the “unprecedented” creation
of “an exclusive right to use language that is descriptive of a product”).
In sum, while the USOC’s trademark of “Olympic” allows the USOC to regulate use
of the word in the “strictly business” context, the USOC’s authority under § 110(a)(4) to
regulate nonconfusing and good-faith descriptive uses of the word “Olympic” grants the
USOC discretion to prohibit a substantial amount of noncommercial speech. Section
110(a)(4) is therefore substantially overbroad.
2
A key Lanham Act requirement that limits the impact of trademarks on noncom-

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83

mercial speech is the rule that a trademark violation occurs only when an offending trademark is applied to commercial goods and services. See 15 U.S.C. §§ 1066 and 1127. The
Amateur Sports Act is not similarly qualified. Section 110(a)(4) “allows the USOC to
prohibit the use of ‘Olympic’ for promotion of theatrical and athletic events,” even if
such uses “go beyond the ‘strictly business’ context.” While the USOC has unquestioned
authority to enforce its “Olympic” trademark against the SFAA, § 110(a)(4) gives it additional authority to regulate a substantial amount of noncommercial speech that serves
to promote social and political ideas. The SFAA sponsors a number of nonprofit-making
theatrical and athletic events, including concerts, film screenings, and plays. These public
events are aimed at educating the public about society’s alleged discrimination based on
sexual orientation, age, sex, and nationality. In conjunction with these events, the SFAA
distributes literature describing the meaning of the Gay Olympic Games. References to
“Olympic” in this literature were deleted in response to the injunction, because of § 110’s
application to the promotion of athletic and theatrical events.
3
Thus, contrary to the belief of the Court, § 110 may prohibit a substantial amount
of noncommercial speech, and is therefore unconstitutionally overbroad. Schaumburg v.
Citizens for a Better Environment (1980).This overbreadth is particularly significant in
light of the unfettered discretion the Act affords to the USOC to prohibit other entities
from using the word “Olympic.” Given the large number of such users,32 this broad
discretion creates the potential for significant suppression of protected speech. “[A] law
subjecting the exercise of First Amendment freedoms to the prior restraint of a license,
without narrow, objective, and definite standards to guide the licensing authority, is
unconstitutional.” This broad discretion, with its potential for abuse, also renders § 110
unconstitutionally overbroad on its face.
B
The Court concedes that “some” uses of “Olympic” prohibited under § 110 may
involve expressive speech. But it contends that “[b]y prohibiting the use of one word for
particular purposes, neither Congress nor the USOC has prohibited the SFAA from
conveying its message. . . . Section 110 restricts only the manner in which the SFAA may
convey its message.” Section 110(a)(4) cannot be regarded as a mere time, place, and
manner statute, however. By preventing the use of the word “Olympic,” the statute violates
the First Amendment by prohibiting dissemination of a message for which there is no
adequate translation.
In Cohen v. California (1971), we rejected the very notion advanced today by the
Court when considering the censorship of a single four-letter expletive:
“[W]e cannot indulge the facile assumption that one can forbid
particular words without also running a substantial risk of suppressing
ideas in the process. Indeed, governments might soon seize upon the
censorship of particular words as a convenient guise for banning the
expression of unpopular views. We have been able . . . to discern little
social benefit that might result from running the risk of opening the door
to such grave results.”
The Amateur Sports Act gives a single entity exclusive control over a wide range of uses of
a word with a deep history in the English language and Western culture. Here, the SFAA
In Los Angeles and Manhattan alone, there are over 200 enterprises and organizations listed in the telephone
directories whose names start with the word “Olympic.” 789 F.2d 1319, 1323 (CA9 1986) (Kozinski, J.,
dissenting).
32

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INTELLECTUAL PROPERTY & THE FIRST AMENDMENT

intended, by use of the word “Olympic,” to promote a realistic image of homosexual men
and women that would help them move into the mainstream of their communities. As Judge
Kozinski observed in dissent in the Court of Appeals, just as a jacket reading “I Strongly
Resent the Draft” would not have conveyed Cohen’s message, so a title such as “The Best
and Most Accomplished Amateur Gay Athletes Competition” would not serve as an adequate
translation of petitioners’ message. Indeed, because individual words carry “a life and force
of their own,” translations never fully capture the sense of the original. The First Amendment
protects more than the right to a mere translation. By prohibiting use of the word “Olympic,”
the USOC substantially infringes upon the SFAA’s right to communicate ideas.
C
The Amateur Sports Act also violates the First Amendment because it restricts
speech in a way that is not content neutral. A wide variety of groups apparently wish to
express particular sociopolitical messages through the use of the word “Olympic,” but the
Amateur Sports Act singles out certain of the groups for favorable treatment. As the Court
observes, Congress encouraged the USOC to allow the use of “Olympic” in athletic
competitions held for youth (“Junior Olympics” and “Explorer Olympics”) and
handicapped persons (“Special Olympics”), 36 U.S.C. § 374(13), while leaving to the
USOC’s unfettered discretion the question whether other groups may use it. . . . Such a
scheme is unacceptable under the First Amendment. . . .
D
Even if § 110(a)(4) may fairly be characterized as a statute that directly regulates
only commercial speech, its incidental restrictions on First Amendment freedoms are
greater than necessary to further a substantial Government interest. . . . At minimum, it
is necessary to consider whether the USOC’s interest in use of the word “Olympic” could
not adequately be protected by rights coextensive with those in the Lanham Act, or by
some other restriction on use of the word.
In the absence of § 110(a)(4), the USOC would have authority under the Lanham
Act to enforce its “Olympic” trademark against commercial uses of the word that might
cause consumer confusion and a loss of the mark’s distinctiveness. There is no evidence in
the record that this authority is insufficient to protect the USOC from economic harm. . . .
The Court contends that § 110 may prohibit uses of “Olympic” because it protects an
“image carefully cultivated by the USOC.” Again, there is no proof in the record that the
Lanham Act inadequately protects the USOC’s commercial interest in its image or that the
SFAA has harmed the USOC’s image by its speech.36
Language, even in a commercial context, properly belongs to the public, unless the
Nor is there any evidence that SFAA’s expressive speech caused economic or reputational harm to the USOC’s
image. In Spence v. Washington (1974), a State asserted a similar interest in the integrity of America’s flag as “‘an
unalloyed symbol of our country,’” and contended that there is a substantial Government interest in “preserving
the flag as ‘an important symbol of nationhood and unity.’” The Court considered whether a State could withdraw
“a unique national symbol from the roster of materials that may be used as a background for communications.”
It reviewed a state law that limited the use of the American flag and forbade the public exhibition of a flag that
was distorted or marked. The appellant was convicted for violating the statute by displaying the flag upside down
in the window of his apartment with a peace symbol attached to it. Eight Members of the Court held that the
statute was unconstitutional as applied to appellant’s activity. “There was no risk that appellant’s acts would
mislead viewers into assuming that the Government endorsed his viewpoint,” and “his message was direct, likely
to be understood, and within the contours of the First Amendment.” The Court concluded that since the state
interest was not “significantly impaired,” the conviction violated the First Amendment. Similarly, in this case, the
SFAA’s primary purpose was to convey a political message that is nonmisleading and direct. This message, like
the symbolic speech in Spence, is protected by the First Amendment.

36

Intellectual Property & the First Amendment

85

Government’s asserted interest is substantial, and unless the limitation imposed is no more
extensive than necessary to serve that interest. The Lanham Act is carefully crafted to
prevent commercial monopolization of language that otherwise belongs in the public
domain. The USOC demonstrates no need for additional protection. In my view, the SFAA
therefore is entitled to use the word “Olympic” in a nonconfusing and nonmisleading
manner in the noncommercial promotion of a theatrical or athletic event, absent proof of
resultant harm to the USOC.
I dissent.

Texas v. Johnson

491 U.S. 397 (1989)

Justice BRENNAN delivered the opinion of the Court.
After publicly burning an American flag as a means of political protest, Gregory
Lee Johnson was convicted of desecrating a flag in violation of Texas law. This case
presents the question whether his conviction is consistent with the First Amendment. We
hold that it is not.
I
While the Republican National Convention was taking place in Dallas in 1984,
respondent Johnson participated in a political demonstration dubbed the “Republican
War Chest Tour.” As explained in literature distributed by the demonstrators and in
speeches made by them, the purpose of this event was to protest the policies of the
Reagan administration and of certain Dallas-based corporations. The demonstrators
marched through the Dallas streets, chanting political slogans and stopping at several
corporate locations to stage “die-ins” intended to dramatize the consequences of nuclear
war. On several occasions they spray-painted the walls of buildings and overturned
potted plants, but Johnson himself took no part in such activities. He did, however, accept
an American flag handed to him by a fellow protestor who had taken it from a flagpole
outside one of the targeted buildings.
The demonstration ended in front of Dallas City Hall, where Johnson unfurled the
American flag, doused it with kerosene, and set it on fire. While the flag burned, the protestors chanted, “America, the red, white, and blue, we spit on you.” After the demonstrators dispersed, a witness to the flag burning collected the flag’s remains and buried them
in his backyard. No one was physically injured or threatened with injury, though several
witnesses testified that they had been seriously offended by the flag burning.
Of the approximately 100 demonstrators, Johnson alone was charged with a crime.
The only criminal offense with which he was charged was the desecration of a venerated
object in violation of Tex. Penal Code Ann. § 42.09(a)(3) (1989). After a trial, he was
convicted, sentenced to one year in prison, and fined $2,000. The Court of Appeals for
the Fifth District of Texas at Dallas affirmed Johnson’s conviction, but the Texas Court
of Criminal Appeals reversed, holding that the State could not, consistent with the First
Amendment, punish Johnson for burning the flag in these circumstances.
The Court of Criminal Appeals began by recognizing that Johnson’s conduct was
symbolic speech protected by the First Amendment:
Given the context of an organized demonstration, speeches, slogans, and
the distribution of literature, anyone who observed appellant’s act would

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have understood the message that appellant intended to convey. The act
for which appellant was convicted was clearly “speech” contemplated
by the First Amendment.
To justify Johnson’s conviction for engaging in symbolic speech, the State asserted two
interests: preserving the flag as a symbol of national unity and preventing breaches of the
peace. The Court of Criminal Appeals held that neither interest supported his conviction.
Acknowledging that this Court had not yet decided whether the Government may
criminally sanction flag desecration in order to preserve the flag’s symbolic value, the
Texas court nevertheless concluded that our decision in West Virginia Board of Education
v. Barnette (1943), suggested that furthering this interest by curtailing speech was
impermissible. “Recognizing that the right to differ is the centerpiece of our First
Amendment freedoms,” the court explained,
a government cannot mandate by fiat a feeling of unity in its citizens.
Therefore, that very same government cannot carve out a symbol of
unity and prescribe a set of approved messages to be associated with that
symbol when it cannot mandate the status or feeling the symbol purports
to represent.
We never before have held that the Government may ensure that a symbol be used
to express only one view of that symbol or its referents. Indeed, in Schacht v. United
States, we invalidated a federal statute permitting an actor portraying a member of one of
our armed forces to “‘wear the uniform of that armed force if the portrayal does not tend
to discredit that armed force.’” ([Q]uoting 10 U.S.C. § 772(f).) This proviso, we held,
which leaves Americans free to praise the war in Vietnam but can send
persons like Schacht to prison for opposing it, cannot survive in a
country which has the First Amendment.
We perceive no basis on which to hold that the principle underlying our decision in
Schacht does not apply to this case. To conclude that the government may permit designated
symbols to be used to communicate only a limited set of messages would be to enter territory
having no discernible or defensible boundaries. Could the government, on this theory,
prohibit the burning of state flags? Of copies of the Presidential seal? Of the Constitution? In
evaluating these choices under the First Amendment, how would we decide which symbols
were sufficiently special to warrant this unique status? To do so, we would be forced to
consult our own political preferences, and impose them on the citizenry, in the very way that
the First Amendment forbids us to do. See Carey v. Brown (1980).
Chief Justice REHNQUIST, C.J., with whom Justice WHITE and Justice O’CONNOR
join, dissenting.
. . . Only two Terms ago, in San Francisco Arts & Athletics, Inc. v. United States
Olympic Committee (1987), the Court held that Congress could grant exclusive use of the
word “Olympic” to the United States Olympic Committee. The Court thought that this “restrictio[n] on expressive speech properly [was] characterized as incidental to the primary
congressional purpose of encouraging and rewarding the USOC’s activities.” As the
Court stated, “when a word [or symbol] acquires value “as the result of organization and
the expenditure of labor, skill, and money” by an entity, that entity constitutionally may
obtain a limited property right in the word [or symbol].” Id. at 532, quoting International
News Service v. Associated Press (1918). Surely Congress or the States may recognize a
similar interest in the flag.

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87

H.R. 2723

102d Congress (1st Session)
To grant the United States a copyright to the Flag of the United States
and to impose criminal penalties for the destruction of a copyrighted Flag.
IN THE HOUSE OF REPRESENTATIVES
June 20, 1991
Mr. TORRICELLI introduced the following bill; which was referred to the
Committee on the Judiciary
A BILL
To grant the United States a copyright to the Flag of the United States and to
impose criminal penalties for the destruction of a copyrighted Flag.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled,
SECTION 1. United States Granted Copyright to the Flag of the United States.
The United States is hereby granted a copyright to the Flag of the United States.
SEC. 2. License To Manufacture, Sell, or Distribute the Flag of the United States.
The United States hereby grants a license to any person to manufacture in the
United States the Flag of the United States, and to sell and distribute such Flag.
SEC. 3. Requirements of the Display of the Flag of the United States.
Any Flag of the United States may only be displayed in accordance with chapter 1
of title 4, United States Code, (relating to the Flag of the United States) and the joint
resolution entitled ‘Joint Resolution to codify and emphasize existing rules and customs
pertaining to the display and use of the flag of the United States of America’, approved
June 22, 1942 (36 U.S.C. 174–178).
SEC. 4. Criminal Penalties for Burning or Mutilating the Flag of the United States.
(a) IN GENERAL—Whoever burns or otherwise mutilates a Flag of the United
States shall be punished as follows:
(1) If the damage to such Flag exceeds $100, by a fine of not more than $10,000 or
imprisonment for not more than 10 years, or both.
(2) If the damage to such Flag does not exceed $100, by a fine of not more than
$1,000 or imprisonment for not more than one year, or both.
(b) EXCEPTION—Subsection (a) shall not apply with respect to whoever destroys
a Flag of the United States in accordance with section 4 of the joint resolution referred
to in section 3.
SEC. 5. Definitions.
As used in this Act—
(1) the term ‘Flag of the United States’ means a rectangular design which consists
of 13 horizontal stripes, alternate red and white, with a union of 50 white stars in a blue
field, and which the average person, upon seeing such design, may believe without
deliberation to represent the Flag of the United States of America; and
(2) the term ‘United States’, when used in the geographical sense, means the 50

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INTELLECTUAL PROPERTY & THE FIRST AMENDMENT

States, the District of Columbia, the Commonwealth of Puerto Rico, any possession of
the United States, the Commonwealth of the Northern Mariana Islands, and the Trust
Territory of the Pacific Islands.
Questions:
1.) Would Mr. Torricelli’s bill to copyright the flag have been constitutional, if enacted?
If not, why and on how many distinct constitutional grounds?
2.) One important question in any case involving intellectual property and the First
Amendment is whether the defendant needed the material protected by property rights in
order to exercise “the freedom of speech.” Why does the Court believe that the SFAA
does not need the word “Olympic”? Do you agree?
3.) Why does the majority focus on the effort and labor that the USOC has spent in
giving Olympic a positive connotation? What is the relevance of that argument to an
analysis of whether this statute violates the First Amendment?
4.) One part of the challenged law gives the USOC the right to decide who is allowed to
use the logo or symbol and who not. Congress strongly urged, in a resolution, that the
USOC allow the Special Olympics to keep using the name. Why did Congress itself not
simply pick and choose which groups could use the term?
5.) Texas v. Johnson is often described as standing for the position that the Constitution
does not tolerate the creation of “venerated objects,” symbols about which only one attitude
or method of expression is permitted. Is SFAA v. USOC consistent with this position?

P ROBLEM 3-1

I NTELLECTUAL P ROPERTY AND THE F IRST A MENDMENT .
Citing the need to avoid “political confusion among voters,” and to “reward the
Democratic Party for their ingenuity and labor in giving the word ‘Democrat’ a uniquely
positive connotation,” the Congress grants to the Democratic National Committee
(“DNC”) a permanent right to the word “democrat” (upper or lower case). The
“Democrat Protection Act”—or DPA—forbids any person, without the consent of the
Democratic National Committee, to use the word ‘democrat’ or ‘democratic’ in any
commercial (or non-profit fund-raising) activity. The right is protected by the remedies
provided in the Act of July 5, 1946 (60 Stat. 427; popularly known as the Trademark
Act of 1946 [Lanham Act]) [15 U.S.C. § 1051 et seq.] but expands their reach to include
non-profit activities and eliminates the requirement that the DNC show the likelihood
of confusion produced by the challenged use. The DNC has announced its intention of
emphasizing the “New Democrat” shift to the center by denying usage of the word
‘democrat’ to both “left and right-wing extremists.” Having been denied usage for their
fund raising activities, the Democratic Socialists, Committee for a Well-Armed
Democratic Citizenry, Gay Democrats PAC, and the “luncheon meat” SPAN, (whose
proposed new slogan is “the Democrat of Luncheon Meats”) all challenge the law.
Is the DPA constitutional? Are the actions of the DNC constitutional?

Intellectual Property & the First Amendment

89

Dallas Cowboys Cheerleaders v. Pussycat Cinema

604 F.2d 200 (2d Cir. 1979)

Plaintiff in this trademark infringement action is Dallas Cowboys Cheerleaders,
Inc., a wholly owned subsidiary of the Dallas Cowboys Football Club, Inc. Plaintiff
employs thirty-six women who perform dance and cheerleading routines at Dallas
Cowboys football games. The cheerleaders have appeared frequently on television
programs and make commercial appearances at such public events as sporting goods
shows and shopping center openings. In addition, plaintiff licenses others to manufacture
and distribute posters, calendars, T-shirts, and the like depicting Dallas Cowboys
Cheerleaders in their uniforms. These products have enjoyed nationwide commercial
success, due largely to the national exposure the Dallas Cowboys Cheerleaders have
received through the news and entertainment media. Moreover, plaintiff has expended
large amounts of money to acquaint the public with its uniformed cheerleaders and earns
substantial revenue from their commercial appearances.
At all the football games and public events where plaintiff’s cheerleaders appear
and on all commercial items depicting the cheerleaders, the women are clad in plaintiff’s
distinctive uniform. The familiar outfit consists of white vinyl boots, white shorts, a white
belt decorated with blue stars, a blue bolero blouse, and a white vest decorated with three
blue stars on each side of the front and a white fringe around the bottom. In this action
plaintiff asserts that it has a trademark in its uniform and that defendants have infringed
and diluted that trademark in advertising and exhibiting “Debbie Does Dallas.”
Pussycat Cinema, Ltd., is a New York corporation which owns a movie theatre in
New York City; Zaffarano is the corporation’s sole stockholder. In November 1978 the
Pussycat Cinema began to show “Debbie Does Dallas,” a gross and revolting sex film whose
plot, to the extent that there is one, involves a cheerleader at a fictional high school, Debbie,
who has been selected to become a “Texas Cowgirl.”1 In order to raise enough money to
send Debbie, and eventually the entire squad, to Dallas, the cheerleaders perform sexual
services for a fee. The movie consists largely of a series of scenes graphically depicting the
sexual escapades of the “actors.” In the movie’s final scene Debbie dons a uniform strikingly
similar to that worn by the Dallas Cowboys Cheerleaders and for approximately twelve
minutes of film footage engages in various sex acts while clad or partially clad in the
uniform. Defendants advertised the movie with marquee posters depicting Debbie in the
allegedly infringing uniform and containing such captions as “Starring Ex Dallas Cowgirl
Cheerleader Bambi Woods” and “You’ll do more than cheer for this X Dallas Cheerleader.”2
Similar advertisements appeared in the newspapers.
Plaintiff brought this action alleging trademark infringement under section 43(a)
of the Lanham Act (15 U.S.C. s 1125(a)), unfair competition, and dilution of trademark
in violation of section 368-d of the New York General Business Law. The district court,
in its oral opinion of February 13, 1979, found that “plaintiff ha(d) succeeded in proving
by overwhelming evidence the merits of each one of its contentions.” Defendants
challenge the validity of all three claims.
A preliminary issue raised by defendants is whether plaintiff has a valid trademark
The official appellation of plaintiff’s cheerleaders is “Dallas Cowboys Cheerleaders,” but the district court
found that plaintiff also has a trademark in the names “Dallas Cowgirls” and “Texas Cowgirls” which have
been made popular by the media.
2
Bambi Woods, the woman who played the role of Debbie, is not now and never has been a Dallas Cowboys
Cheerleader.
1

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in its cheerleader uniform.3 Defendants argue that the uniform is a purely functional item
necessary for the performance of cheerleading routines and that it therefore is not capable
of becoming a trademark. We do not quarrel with defendants’ assertion that a purely
functional item may not become a trademark. However, we do not agree that all of
characteristics of plaintiff’s uniform serve only a functional purpose or that, because an
item is in part incidentally functional, it is necessarily precluded from being designated as
a trademark. Plaintiff does not claim a trademark in all clothing designed and fitted to allow
free movement while performing cheerleading routines, but claims a trademark in the
particular combination of colors and collocation of decorations that distinguish plaintiff’s
uniform from those of other squads.4 It is well established that, if the design of an item is
nonfunctional and has acquired secondary meaning,5 the design may become a trademark
even if the item itself is functional. Moreover, when a feature of the construction of the
item is arbitrary, the feature may become a trademark even though it serves a useful
purpose. Thus, the fact that an item serves or performs a function does not mean that it may
not at the same time be capable of indicating sponsorship or origin, particularly where the
decorative aspects of the item are nonfunctional. In the instant case the combination of the
white boots, white shorts, blue blouse, and white star-studded vest and belt is an arbitrary
design which makes the otherwise functional uniform trademarkable.
Having found that plaintiff has a trademark in its uniform, we must determine
whether the depiction of the uniform in “Debbie Does Dallas” violates that trademark.
The district court found that the uniform worn in the movie and shown on the marquee
closely resembled plaintiff’s uniform and that the public was likely to identify it as
plaintiff’s uniform. Our own comparison of the two uniforms convinces us that the
district court was correct, and defendants do not seriously contend that the uniform
shown in the movie is not almost identical with plaintiff’s.
Defendants assert that the copyright doctrine of “fair use” should be held
applicable to trademark infringement actions and that we should apply the doctrine to
sanction their use of a replica of plaintiff’s uniform. Fair use is “a ‘privilege in others
than the owner of a copyright to use the copyrighted material in a reasonable manner
without his consent. . . .’” The fair use doctrine allows adjustments of conflicts between
the first amendment and the copyright laws, and is designed primarily to balance “the
exclusive rights of a copyright holder with the public’s interest in dissemination of
information affecting areas of universal concern, such as art, science and industry.” It is
unlikely that the fair use doctrine is applicable to trademark infringements; however, we
need not reach that question. Although, as defendants assert, the doctrine of fair use
permits limited copyright infringement for purposes of parody, defendants’ use of
plaintiff’s uniform hardly qualifies as parody or any other form of fair use.
Nor does any other first amendment doctrine protect defendants’ infringement of
plaintiff’s trademark. That defendants’ movie may convey a barely discernible message
At present plaintiff does not have a registered trademark or service mark in its uniform. However, plaintiff
still may prevail if it establishes that it has a common law trademark or service mark. Whether plaintiff’s
uniform is considered as a trademark or a service mark, the standards for determining infringement are the
same. West &Co. v. Arica Institute, Inc. (1977).
4
Plaintiff’s design imparts a western flavor appropriate for a Texas cheerleading squad. The design is in no way
essential to the performance of cheerleading routines and to that extent is not a functional aspect of the uniform.
5
Secondary meaning is “(t)he power of a name or other configuration to symbolize a particular business,
product or company. . . .” Ideal Toy Corp. v. Kenner Products Division of General Mills Fun Group, Inc. (1977).
There is no dispute in this case that plaintiff’s uniform is universally recognized as the symbol of the Dallas
Cowboys Cheerleaders.
3

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91

does not entitle them to appropriate plaintiff’s trademark in the process of conveying that
message. Plaintiff’s trademark is in the nature of a property right, and as such it need not
“yield to the exercise of First Amendment rights under circumstances where adequate
alternative avenues of communication exist.” Because there are numerous ways in which
defendants may comment on “sexuality in athletics” without infringing plaintiff’s trademark, the district court did not encroach upon their first amendment rights in granting a
preliminary injunction.
For similar reasons, the preliminary injunction did not constitute an unconstitutional
“prior restraint”. This is not a case of government censorship, but a private plaintiff’s
attempt to protect its property rights. The propriety of a preliminary injunction where such
relief is sought is so clear that courts have often issued an injunction without even
mentioning the first amendment. The prohibition of the Lanham Act is content neutral, Cf.
Schacht v. United States (1970), and therefore does not arouse the fears that trigger the
application of constitutional “prior restraint” principles.
Questions:
1.) What do you think of Pussycat Cinema’s parody and First Amendment defense? Can
you offer a better one?
2.) Debbie Does Dallas was enjoined because it violated a property right held by the Dallas
Cowboys Football Club, namely an unregistered common trademark/trade dress right in the
uniforms worn by its cheerleaders. You have read the reasoning of the court. Did that right
exist before the case was brought? Does that fact raise any First Amendment issues?

L.L. Bean, Inc. v. Drake Publishers, Inc.

811 F.2d 26 (1st Cir. 1987)

BOWNES, Circuit Judge.
Imitation may be the highest form of flattery, but plaintiff-appellee L.L. Bean, Inc.,
was neither flattered nor amused when High Society magazine published a prurient parody
of Bean’s famous catalog. Defendant-appellant Drake Publishers, Inc., owns High Society,
a monthly periodical featuring adult erotic entertainment. Its October 1984 issue contained
a two-page article entitled “L.L. Beam’s Back-To-School-Sex-Catalog.” The article was
labelled on the magazine’s contents page as “humor” and “parody.” The article displayed
a facsimile of Bean’s trademark and featured pictures of nude models in sexually explicit
positions using “products” that were described in a crudely humorous fashion.
L.L. Bean sought a temporary restraining order to remove the October 1984 issue
from circulation. The complaint alleged trademark infringement, unfair competition,
trademark dilution, deceptive trade practices, interference with prospective business
advantage and trade libel. . . . [Among other things, the district court granted] Bean
summary judgment with respect to the trademark dilution claim raised under Maine law.
Me. Rev. Stat. Ann. tit. 10, § 1530 (1981). It ruled that the article had tarnished Bean’s
trademark by undermining the goodwill and reputation associated with the mark. . . . The
court also held that enjoining the publication of a parody to prevent trademark dilution
did not offend the first amendment. An injunction issued prohibiting further publication
or distribution of the “L.L. Beam Sex Catalog.” [Drake appealed.]

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I
. . . One need only open a magazine or turn on television to witness the pervasive
influence of trademarks in advertising and commerce. Designer labels appear on goods
ranging from handbags to chocolates to every possible form of clothing. Commercial
advertising slogans, which can be registered as trademarks, have become part of national
political campaigns. “Thus, trademarks have become a natural target of satirists who seek
to comment on this integral part of the national culture.” The ridicule conveyed by parody
inevitably conflicts with one of the underlying purposes of the Maine anti-dilution statute,
which is to protect against the tarnishment of the goodwill and reputation associated with
a particular trademark. The court below invoked this purpose as the basis for its decision
to issue an injunction. The issue before us is whether enjoining the publication of
appellant’s parody violates the first amendment guarantees of freedom of expression.
II
The district court disposed of the first amendment concerns raised in this matter
by relying on the approach taken in Dallas Cowboys Cheerleaders, Inc. v. Pussycat
Cinema, Ltd. (1979). In rejecting Drake’s claim that the first amendment protects the
unauthorized use of another’s trademark in the process of conveying a message, the
district court cited the following language from Dallas Cowboys Cheerleaders:
“Plaintiffs trademark is in the nature of a property right . . . and as such it need not ‘yield
to the exercise of First Amendment rights under circumstances where adequate
alternative avenues of communication exist.’ Lloyd Corp. v. Tanner (1972).” We do not
believe that the first amendment concerns raised here can be resolved as easily as was
done in Dallas Cowboys Cheerleaders. Aside from our doubts about whether there are
alternative means of parodying plaintiffs catalog, we do not think the court fully assessed
the nature of a trademark owner’s property rights.
The limits on the scope of a trademark owner’s property rights was considered
recently in Lucasfilm Ltd. v. High Frontier (1985). In that case, the owners of the trademark “Star Wars” alleged injury from public interest groups that used the term in commercial advertisements presenting their views on President Reagan’s Strategic Defense
Initiative. Judge Gesell stressed that the sweep of a trademark owner’s rights extends
only to injurious, unauthorized commercial uses of the mark by another. Trademark
rights do not entitle the owner to quash an unauthorized use of the mark by another who
is communicating ideas or expressing points of view.
III
The district court’s opinion suggests that tarnishment may be found when a trademark is used without authorization in a context which diminishes the positive associations
with the mark. Neither the strictures of the first amendment nor the history and theory of
anti-dilution law permit a finding of tarnishment based solely on the presence of an
unwholesome or negative context in which a trademark is used without authorization. Such
a reading of the anti-dilution statute unhinges it from its origins in the marketplace. A
trademark is tarnished when consumer capacity to associate it with the appropriate products
or services has been diminished. The threat of tarnishment arises when the goodwill and
reputation of a plaintiffs trademark is linked to products which are of shoddy quality or
which conjure associations that clash with the associations generated by the owner’s lawful
use of the mark. . . .
[T]he dilution injury stems from an unauthorized effort to market incompatible
products or services by trading on another’s trademark. The Constitution is not offended

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93

when the anti-dilution statute is applied to prevent a defendant from using a trademark
without permission in order to merchandise dissimilar products or services. Any residual
effect on first amendment freedoms should be balanced against the need to fulfill the
legitimate purpose of the anti-dilution statute. The law of trademark dilution has developed
to combat an unauthorized and harmful appropriation of a trademark by another for the
purpose of identifying, manufacturing, merchandising or promoting dissimilar products or
services. The harm occurs when a trademark’s identity and integrity—its capacity to
command respect in the market—is undermined due to its inappropriate and unauthorized
use by other market actors. When presented with such circumstances, courts have found
that trademark owners have suffered harm despite the fact that redressing such harm
entailed some residual impact on the rights of expression of commercial actors. See, e.g.,
Chemical Corp. of America v. Anheuser-Busch, Inc. (1962) (floor wax and insecticide
maker’s slogan, “Where there’s life, there’s bugs,” harmed strength of defendant’s slogan,
“Where there’s life, there’s Bud.”); Original Appalachian Artworks, Inc. v. Topps Chewing
Gum (1986) (merchandiser of “Garbage Pail Kids” stickers and products injured owner of
Cabbage Patch Kids mark); General Electric Co. v. Alumpa Coal Co. (1979) (“Genital
Electric” monogram on underpants and T-shirts harmful to plaintiffs trademark).
While the cases cited above might appear at first glance to be factually analogous
to the instant one, they are distinguishable for two reasons. First, they all involved unauthorized commercial uses of another’s trademark. Second, none of those cases involved a
defendant using a plaintiff’s trademark as a vehicle for an editorial or artistic parody. In
contrast to the cases cited, the instant defendant used plaintiffs mark solely for noncommercial purposes. Appellant’s parody constitutes an editorial or artistic, rather than a
commercial, use of plaintiffs mark. The article was labeled as “humor” and “parody” in
the magazine’s table of contents section; it took up two pages in a one-hundred-page issue;
neither the article nor appellant’s trademark was featured on the front or back cover of the
magazine. Drake did not use Bean’s mark to identify or promote goods or services to
consumers; it never intended to market the “products” displayed in the parody.
We think the Constitution tolerates an incidental impact on rights of expression of
commercial actors in order to prevent a defendant from unauthorizedly merchandising his
products with another’s trademark.4 In such circumstances, application of the anti-dilution
statute constitutes a legitimate regulation of commercial speech, which the Supreme Court
has defined as “expression related solely to the economic interests of the speaker and its
audience.” Central Hudson Gas & Elec. v. Public Serv. Comm’n (1980). It offends the
Constitution, however, to invoke the anti-dilution statute as a basis for enjoining the noncommercial use of a trademark by a defendant engaged in a protected form of expression.
Our reluctance to apply the anti-dilution statute to the instant case also stems from
a recognition of the vital importance of parody. Although, as we have noted, parody is
often offensive, it is nevertheless “deserving of substantial freedom—both as entertainment and as a form of social and literary criticism.” Berlin v. E.C. Publications, Inc.
(1964). It would be anomalous to diminish the protection afforded parody solely because
4
We have no occasion to consider the constitutional limits which might be imposed on the application of
anti-dilution statutes to unauthorized uses of trademarks on products whose principal purpose is to convey a
message. Mutual of Omaha Ins. Co. v. Novak (1985) (plaintiff entitled to preliminary injunction against peace
activist protesting nuclear weapons proliferation by marketing “Mutant of Omaha” T-shirts). Such a situation
undoubtedly would require a balancing of the harm suffered by the trademark owner against the benefit
derived by the parodist and the public from the unauthorized use of a trademark on a product designed to
convey a message.

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a parodist chooses a famous trade name, rather than a famous personality, author or
creative work, as its object.5
The district court’s injunction falls not only because it trammels upon a protected
form of expression, but also because it depends upon an untoward judicial evaluation of
the offensiveness or unwholesomeness of the appellant’s materials. The Supreme Court
has recognized the threat to free speech inherent in sanctioning such evaluations. Cohen
v. California (1971).
Reversed and remanded.
LEVIN H. CAMPBELL, Chief Judge (dissenting). [Omitted.]
Question:
1.) Why does the court rule in favor of Drake but against Pussycat Cinema?

P ROBLEM 3-2
C ONSTITUTIONAL I NTERPRETATION : R EVIEW .
Review the materials in the previous two chapters. What are the most difficult lines to
draw and rules to formulate in a constitutional theory that explains:
1.) The general contours of the Congressional power to create, extend and define
intellectual property rights?
2.) The limits (if any) that the First Amendment puts on intellectual property
rights and remedies? Before answering, consider this sentence from the BreyerAlito dissent in Golan. “The fact that, by withdrawing material from the public
domain, the statute inhibits an important preexisting flow of information is
sufficient, when combined with the other features of the statute that I have
discussed, to convince me that the Copyright Clause, interpreted in the light of the
First Amendment, does not authorize Congress to enact this statute.” How does
Justice Breyer’s understanding of the way the First Amendment should inflect the
interpretation of the Copyright Clause differ from that of Justice Ginsburg?

We recognize that the plaintiffs in Pillsbury Co. v. Milky Way Productions, Inc. (1981), obtained injunctive
relief against Screw magazine, which had published pictures of facsimiles of Pillsbury’s trade characters,
“Poppin Fresh” and “Poppie Fresh,” engaged in sexual intercourse and fellatio. The pictorial also featured
plaintiff’s trademark and the refrain of its jingle, “The Pillsbury Baking Song.” While the district court granted
relief under Georgia’s anti-dilution statute, it did so only after specifically declining to consider whether
defendants’ presentation constituted a parody. The defendants in Pillsbury had tried to proffer parody as a
defense to plaintiffs copyright infringement claim; they did not assert it as a defense to the dilution claim.
Pillsbury, therefore, does not stand for the proposition that the publication of a parody properly may be
enjoined under an anti-dilution statute, since the court never considered whether defendants had presented a
parody, and defendants never asserted parody as a defense to the dilution claim.

5

CHAPTER FOUR

Trademark: Introduction

Modern developments in the law of unfair competition offer many
examples of . . . circular reasoning. There was once a theory that the law
of trade marks and trade names was an attempt to protect the consumer
against the “passing off” of inferior goods under misleading labels.
Increasingly the courts have departed from any such theory and have come
to view this branch of law as a protection of property rights in divers
economically valuable sale devices. In practice, injunctive relief is being
extended today to realms where no actual danger of confusion to the
consumer is present, and this extension has been vigorously supported and
encouraged by leading writers in the field. . . . The current legal argument
runs: One who by the ingenuity of his advertising or the quality of his
product has induced consumer responsiveness to a particular name,
symbol, form of packaging, etc., has thereby created a thing of value; a
thing of value is property; the creator of property is entitled to protection
against third parties who seek to deprive him of his property. This argument
may be embellished, in particular cases, with animadversions upon the
selfish motives of the infringing defendant, a summary of the plaintiff’s
evidence (naturally uncontradicted) as to the amount of money he has spent
in advertising, and insinuations (seldom factually supported) as to the
inferiority of the infringing defendant’s product. The vicious circle inherent
in this reasoning is plain. It purports to base legal protection upon
economic value, when, as a matter of actual fact, the economic value of a
sales device depends upon the extent to which it will be legally protected.
If commercial exploitation of the word “Palmolive” is not restricted to a
single firm, the word will be of no more economic value to any particular
firm than a convenient size, shape, mode of packing, or manner of
advertising, common in the trade. Not being of economic value to any
particular firm, the word would be regarded by courts as “not property,”
and no injunction would be issued. In other words, the fact that courts did
not protect the word would make the word valueless, and the fact that it
was valueless would then be regarded as a reason for not protecting it.
Felix Cohen, Transcendental Nonsense
and the Functional Approach (1935)
Felix Cohen’s article comes from the time before the Lanham Act, which provided a
Federal legislative source of authority in place of the common law reasoning he disdains
here. It also antedates many developments and extensions in trademark law, including
some with which he would probably have disagreed, to say nothing of the social and
technological transformations that make the world of brand, logo and advertising very
different from the one in which he lived. But his article still asks a valid question.
Why do we have trademark rights? Why do we have this “homestead law for the
language,” to use Cohens words? To return to Chapter 1, is this a Lockean story in which
one mixes one’s labor with a word or a logo, and therefore is entitled to a property right? Is

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it a Justice Pitney-style assumption that others should not benefit freely from positive
externalities created by my actions, including my actions in creating a trademark? Both of
those ideas clearly influenced the common law of trademarks and unfair competition, a body
of law which partly shaped the contours of Federal protection. Both continue to operate in
cases today. Think back to the Supreme Court’s discussion in SFAA v. USOC of the labor
and ingenuity that the USOC had expended creating the valuable brand “Olympic.” The
right at issue there was not technically a trademark. In fact, it was stronger. Yet, the Court
tried to analogize the USOC’s rights to those provided by trademark law, to show how
Congress routinely handed out property rights in valuable words without offending the First
Amendment. To make that analogy, it turned immediately to a discussion of labor invested
and uncompensated benefit conferred. So those themes continue to resonate and have
considerable force. We will encounter them in the cases in this book.
Yet today both scholars and courts largely offer a different set of justifications for
trademark law, one that escapes—or at least tries to escape—from the circular reasoning
Cohen mocked. That set of justifications is a utilitarian one and it focuses on informational
efficiency—efficient communication between consumers and producers. In fact, there are
two utilitarian justifications, one focused on preventing consumer confusion and one on
encouraging producer investment in stable brands.
Let us start with the consumer. As you rush through the aisles of the grocery store,
throwing things in your cart, how much time do you spend assessing the qualities of each
good purchased? Certainly, you look at the date on the milk and the meat, perhaps double
check whether there is MSG in an unfamiliar brand of Hoisin sauce, but most of the time
your purchases are probably almost automatic. Detergent? The orange one in the square
box with concentric red and yellow circles on the logo. Soap? Ivory. Toilet paper? The one
with the puppies on it (because nothing says anal cleanliness like a dog. Or a bear.). If you
are like most consumers, most of these purchases are reflexive, sometimes even pre-verbal.
You have tried a number of soaps and whether or not you were convinced by Ivory’s slogan
“so pure it floats”—a non sequitur if there ever was one—you now just buy Ivory. But how
do you know that the “Ivory soap” you buy will be the same as the “Ivory soap” you settled
on? Absent the legal creation of this right over a name or logo, the product name is a “public
good”—non-excludable and non rival. If anyone could call their soap “Ivory” or their
detergent “Palmolive” would you have to scrutinize the label each time to make sure the
ingredients were the same? From an economic point of view, that is very inefficient. In
other words, the economic rationale for the Ivory trademark is not that Ivory has labored
hard to build it up and advertise it. Nor is it that, without trademark protection, other soap
companies could use the same name and “reap where they had not sown.” Instead, we focus
on the benefits to the consumer of stable nomenclature and thus the social gains produced
by efficient information flow in the market.
Of course, trademarks do not in fact guarantee stable brand identity. They just
guarantee that product-meddling will be solely in the hands of the trademark owner. If
Coke wants to change its formula, or the Pears soap trademark has been bought by a
company that wants to lower the quality of ingredients, my consumer expectations will
be upset, nonetheless. But at least the trademark owner might be presumed to make
rational calculations about when to do so.
So the first rationale for trademark is preventing consumer confusion and
encouraging efficient consumer information flow. The second one is producer-focused.
Trademarks provide an incentive to producers to invest in building up a stable brand
meaning, which in turn will be useful to consumers. Notice: stable brand meaning, not
high quality brand meaning. The trademark protects White Castle burgers no less than it

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protects Ruth’s Chris Steak House, Econo Lodge no less than the Four Seasons, Pabst no
less than Dogfish. Whatever slice of the market a producer chooses to go for, from haute
cuisine or high fashion to cheap and nasty but dependable, trademark is there to help
incentivize the investment in semantic stability. Again, without the mark, the name is a
public good. Why should Apple or the Four Seasons seek to build a reputation for that
kind of style or quality? Why should McDonald’s try to convince me that the burgers
will be exactly the same level of grey mediocrity from Maine to Monterey, never
reaching Escoffier heights or E. coli lows? Anyone could slap Apple, Four Seasons or
McDonald’s on their product. By telling the producer that it will be able to exclude others
from the name, goes the theory, we encourage investment in a stable brand that then
becomes a useful and efficient communication to the consumer. The two arguments meet,
a semantic handshake enabled by a legal right. Or so says the theory.
Of course, if we really wanted to promote semantic stability, we might force
producers to internalize the costs of sub-par performance as well as the benefits of
consistency. We do not. Do you have a positive image of Blackwater Security, the firm
whose employees killed 17 Iraqi civilians in a single 2007 incident? Whatever your
impressions, you are unlikely to find the company. It was renamed Xe Services in 2009.
It is now called Academi. Remember ValuJet and their rather questionable safety record?
Want to avoid them and fly AirTran instead? They were the same company (and later
AirTran became part of Southwest Airlines). Because producers can always change their
brand names or even their corporate names, they always have the option to declare
semantic bankruptcy and start afresh. But we digress.
In each area of intellectual property law, we first try to understand the problem the
right is supposed to solve, as a way of understanding the contours, the extent, the duration
and the limitations and exceptions of the right. So the trademark is a legal right to exclude
others from a name or logo or other distinguishing characteristic that would otherwise be
a non-excludable and non-rival public good. The rationale we have discussed is that this
minimizes consumer confusion, thus maximizing informational efficiency in the market,
and provides an incentive for the creation of information-packed stable brands. If you
were trying to further that purpose, what shape would you give the right? Please look
again at the chart on page xii of the Introduction, comparing the three main forms of
Federal intellectual property.
This chart omits a lot. It must in order to fit on one page. But it does give a sense
of the varied designs of the three intellectual property rights we are discussing, each over
a differed type of subject matter, each covering or applying to a different “thing”—a
legally protected res—each procured through a different process, lasting for a different
period of time, shaped by different limitations and exceptions and regulating or
prohibiting different types of behavior in others.
Returning to the shape or design of the right suggested by trademark’s rationale,
one can see that the right is designed (or should be designed) to fulfill the functions of
efficient consumer communication. First, note that trademarks do not convey ownership
of a word—a mistake that non-lawyers (and some trademark owners) sometimes make.
They convey the right to forbid a particular kind of use. Teachers of intellectual property
love to use Bass Ale as an example, because the label itself says that it was the first
registered trademark in the United Kingdom. In the US, Bass got a registered mark in
1912 for pale ale, with a first date of use of 1856. In 1990 it broadened that to cover beer,
ale, stout, lager and porter.

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There are a few things worth noticing about this. First, look at the field that says
“For:” This mark is for use selling beer, ale, stout, lager and porter. It does not interfere
with Bass “for medical apparatus, namely, a system consisting of collectors and suctioning
equipment to collect fluids from medical procedures.” That is a registered mark. It does
not interfere with Bass for electric lights and LED circuit boards. It does not interfere with
all those businesses whose name contains a reference to bass the fish, or bass the
instrument, or bass the sound range. G.H. Bass, the maker of Weejuns shoes, is not
infringing Bass Ale’s trademark. The mark does not stop you saying that you drank a lot
of Bass last night, or posting a picture on your Facebook page with you holding a Bass,
or praising or criticizing Bass Ale. What it does stop you from doing, is selling beer under
the name Bass, or using any mark on your beer that is likely to cause confusion with the
Bass ale trademark. It also stops you registering a trademark that would be likely to cause
confusion. So when a Mr. Michael Massa applied for a trademark over “Bass Hole Ale:
The Brew That Makes Your Stories True”1 the holders of the Bass Ale trademark opposed
1
The applicant stressed the fact that the “bass” referred to was the fish. “The mark consists of a representation
of a fisherman in green waders with brown suspenders and a golden colored hat holding a bent fishing rod.

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the registration of that mark. Mr. Massa eventually abandoned the application.
Of course, companies can leverage their popular trademarks into other fields. Bass
holds a trademark for the use of its logos on mirrors, glassware and shopping bags,
among other things. But the claim is always mark X for use Y, not for the ownership of
a word outright.
The second thing to notice is the limitations and exceptions that further cabin the
reach of the right. To pick one example: Generic terms can never have or keep trademark
status, even if they were novel terms invented, and successfully registered as marks, by the
owner. If people start to use “Shredded Wheat” to describe all cereals of that type, not just
the ones from the National Biscuit Company (now Nabisco), or “Murphy beds” to describe
all beds that fold down from the wall, not just the ones from the original manufacturer, then
the trademark is canceled. We cannot take away from the public the ability to use the
standard term for the goods. The owners of Kleenex, Xerox and Rollerblades spend a great
deal of time policing usages of their mark to try and stop this from happening. Instead they
promote an alternative term for the general category (“facial tissue,” “photocopying” and
“in-line skates”) and admonish those who use the trademark to describe the type of good.
No matter how hard they try, however, if the public starts to use that as the generic term,
the trademark is canceled. The term has moved into the public domain.
To pick another example: nominative use—using the name of a competing product
in order to identify it, in comparative advertising, say—is not a violation of the trademark.
Notice how both of these exceptions allow us to test various theories of why we have the
right. If trademarks were an incentive to come up with novel goods with novel names—in
the same way that a patent does—then we would want to incentivize, not penalize, the
person who came up with the good and the term used to describe it. Yet if the term suffers
genericide—comes to describe the product category rather than the original product
source—then the mark is subject to cancellation. Similarly, it may seem unfair that makers
of competing hybrid cars can favorably compare theirs to the Prius. Surely they are “reaping
where they have not sown,” capturing a positive externality by using the familiar brand to
help the consumer understand the new one? Yet if that facilitates communication to the
consumer about what kind of a product this is, then trademark would be undermining its
own rationale to forbid it. The rationales will help you understand the rules and predict how
they might apply to new facts or new technologies. In the next section we will lead you
through the basics of trademark law. In each case, think about the feature of the law being
described and try and relate it back to trademark’s central goal. Does it fit well or badly?

Trademark Basics
A trademark is a word, phrase, logo, or any other indicator that identifies the source
of a particular product. (Technically, a “trademark” distinguishes goods while a “service
mark” distinguishes services; in this section, “trademark” will be used to refer to both
trademarks and service marks.) The key here is “source indicative.” Think of a triangle
composed of the producer, the good and the consumer. The mark is the sign that tells the
consumer where the good came from, that identifies its source. “Nike”, “Just Do It”, and
In the background a largemouth bass with a lure in his mouth is beginning to jump. The bass is surrounded
by a field of bluish-green water. In the foreground the fisherman is standing against a stand of cattails with
a lone dragonfly perched on a blade of cattail. The words BASS HOLE BEER appear in an arc across the
top of the label in green with black edging. The words “The Brew That Makes Your Stories True” are in the
foreground in black on a stretched blue oval banner.” Application 77165782.

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the checkmark Swoosh are trademarks owned by Nike, Inc. When you spend $180 on
shoes that say Nike®, that trademark indicates that the shoes were made by Nike rather
than another manufacturer, and has the quality or appeal associated with Nike products.
“Apple”, “iTunes”, and the bitten apple logo are trademarks that indicate that your stylish
hardware and proprietary software came from Apple, Inc.
Trademark protection can extend to product features beyond conventional words or
logos, such as color, shape, or sound. (Some of these are referred to as “trade dress,” a category we will discuss later.) Examples include the lacquered red soles on Louboutin shoes,
the undulating tapered shape of the Coca-Cola bottle, or the roar of the MGM lion. Under
no circumstances, however, can a functional feature of the product be trademarked. I might
be the first person to make bright yellow life vests or stainless steel vacuum flasks, but I can
never trademark those features—high visibility and stainless durability are obviously
functional in those products. To give a trademark over them would convey a patent-like
monopoly (and potentially, a perpetual one) rather than truly protecting a source indicator.

What are the sources of trademark law?
Trademark law has its roots in state unfair competition laws that prohibited competitors from “passing off” other producers’ goods as their own. (In the quotation that began
this chapter, Cohen argues that such reasoning could balloon too far.) The first federal
trademark statutes date from 1870 and 1876 but, as you read in Chapter 2, they were struck
down as being beyond Congress’s power under both the Intellectual Property Clause and
the Commerce Clause. In 1881 Congress passed another, much narrower statute, justified
under its Commerce Clause power and limited only to marks used in interstate and
international commerce, or in trade with the Indian tribes. These limitations were included
specifically to make that Act comply with the ruling in The Trade-Mark Cases.
The current federal statute is the Lanham Act, originally enacted in 1946 and
amended many times since. As we will see, the Lanham Act’s reach is much broader than
the narrow 1881 statute. This expansion reflects the Supreme Court’s broadening vision
of the meaning of “commerce” after the New Deal. Though the Lanham Act reaches
broadly, it does not supplant state systems. Unlike the Federal copyright and patent
systems, which “preempt” state regulation of their subject matter, the Federal trademark
system coexists with a thriving set of state trademark regimes, which share many of its
features, and which provide protection to businesses with no desire to spread nationally.
However, for obvious reasons—geographic reach and economic significance among
them—the Federal system is the central focus of large-scale legal attention.
We will examine 5 types of protection in the Federal trademark system. The
statutory sections cited below are from the Lanham Act.
1.) Registered Marks. At the center is the system of registered Federal marks (and
registered Federal trade dress, such as the Coke bottle design). These are the rights
centered in § 1114 (or § 32) of the Lanham Act. Only the trademark holder can sue to
enforce the mark.
2.) Unregistered marks, unregistered trade dress and false designation of origin.
Beyond registered marks, the Federal system also provides a similar but weaker set of
prohibitions against false or misleading designation of origin. Those rights, developing
out of § 1125(a) (§ 43(a)) give protection—among other things—to unregistered marks
and unregistered trade dress. While only the trademark owner can sue to enforce a
registered mark, § 1125(a) says that suit can be brought “by any person who believes that

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he or she is or is likely to be damaged by such act.” The Supreme Court held that the
“damage” referred to here must be to a valid commercial interest of a competitor, partly
because there are obvious constitutional problems in premising standing on a “belief”
one has been harmed.
3.) Dilution. Marks that are “famous” to the national consuming public are also protected
from “dilution” that blurs or tarnishes their strength. These rights find their home in
§ 1125(c) (§ 43(c)).
4.) Cybersquatting. The Lanham Act has been amended to deal with the intersection of
domain names and trademark law. § 1125(d) explicitly covers “cybersquatting”—the “bad
faith” registration of domain names in the hope of extracting rent from a trademark owner.
It should be noted, however, that the other protections of the Act are also of relevance. For
example, a domain name can also be a registered mark in its own right.
5.) False or Misleading Statements of Fact. The Lanham Act also prohibits false or
misleading statements of fact (“My new diet will lose you 30 pounds in 3 weeks”) even
when there appears to be no “mark” of any kind involved. These provisions, too, are
rooted in section § 1125(a). Judicial interpretation of the Lanham Act has effectively
broadened it to become a Federal law of false advertising and unfair competition, a
considerable expansion. Again, the more relaxed definition of standing applies, though
the interest vindicated must be that of a competitor, not a consumer.

Registered Marks
The Lanham Act creates a national system for registering trademarks, and
determining which marks enjoy priority over others. It also spells out causes of action
for trademark infringement and dilution, as well as available remedies. The key here is
registering. Many people believe that the little symbol ™ indicates a valid Federal
trademark. It does not. At best, ™ and its equivalent for service marks, SM, mean that the
company wants to use the term as a common law mark, or that it hopes one day to register
the mark but has not attempted to do so, and is attempting to build brand identity in the
meantime. The sign of a Federal Mark is the “R” inside a circle: ®. The “R” stands for
“registered.” It shows that the mark has been examined by the PTO and registered on the
Principal or Supplemental Register. (The Supplemental Register lists a variety of marks
that have not yet received full Federal protection, such as descriptive terms that have not
yet developed sufficient distinctiveness.)
To be sure, Federal registration is not a prerequisite for acquiring trademark rights.
Absent registration, a trademark owner may gain common law rights by being the first to
use the mark in commerce. However, these rights are limited to the geographical area where
the mark is used. For example, a “Wiener King” restaurant would enjoy rights in Durham
but could not prevent Wiener Kings in other cities from using the same mark. With federal
registration, the default is flipped: trademark rights extend nationwide, with the exception
of areas where an earlier (or as trademark lawyers say, “senior”) user has already been
using the mark. So Federal registration would give Wiener King rights from Durham to
San Francisco, minus areas where a preexisting Wiener King has been using the mark.
In addition to nationwide rights, federal registration confers a number of other benefits. These include: a legal presumption of exclusive rights in the mark, constructive notice
to the public of trademark ownership, the ability to prevent the Federal registration of confusingly similar marks, an array of remedies, and a basis for registering in foreign countries.
Why build the center of the Federal system around registration? After all, we do

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not require that writers, musicians or filmmakers register in order to acquire copyright.
(Though they must register in order to sue for infringement.) It is important to remember
that the Federal system of registered marks is supposed to complement and act as an
adjunct to the state system. It is the functions those other systems cannot perform that
the Federal registration system seeks to fulfill. On the Federal level, registration fulfills
multiple functions centering around information costs.
• It lowers search costs, both for those with existing marks and those seeking to
create new marks. If I am looking for a name for my new nationwide ‘rapid oil
change’ franchise, I can learn quickly that “Jiffy Lube” is taken. I will not waste
time or money developing a campaign around that name, or laboriously
searching, state by state, to find available semantic real estate. In addition, the
Supplemental Register will show me that someone else is working to develop a
brand identity over a term like “Quik Oil,” even if that mark has not yet developed
sufficient distinctiveness to merit registration on the Principal Register.
• It allows businesses to plan to expand nationally, secure in the knowledge their
mark will not have to change when they reach new territory. In the example given
above, Wiener King does not invest in developing a local following, only to find
that it cannot use that name elsewhere in the country and must invent a new one.
• We hope that the process of review and approval that is required to get onto
the Federal Register sets a high enough bar so that businesses are deterred from
claiming to have legal rights over generic, functional or misleading marks,
which in turn would suppress competition or confuse consumers. (This hope
is not always well-founded.)
• The Register lists both “Live” and “Dead” marks, the latter including those that
have been abandoned, fallen out of use, or been successfully challenged. By
listing “Dead” marks no less than “Live” ones the Register gives a map of both
those semantic areas that are already taken and those that have once again
become free. It is a map both of current property and of areas that have fallen
back into the public domain. The requirement that registrations be continuously
maintained and renewed provides a natural “pruning” function.
We will start with the center of the system—registered marks—and will go through
the requirements for registration. It will turn out that many of the requirements for
registering marks—such as use in commerce—are also requirements for unregistered
marks, just as many of the tests for the infringement of registered marks are also tests for
the infringement of unregistered marks. Thus, it is important to remember that while many
cases in the next chapter focus on registered marks, their implications are much broader.
Notes: Use-based and Intent-To-Use Applications
The requirement that a trademark be used in commerce (discussed in detail in the
next chapter) applies to both common law marks and federally registered marks. Usebased applications for federally registered marks must indicate the date of first use in
commerce and include a specimen showing that the mark is actively being used on all of
the goods and services listed in the application. For those seeking federal registration, the
requirement of use in commerce before the mark could be registered led in practice to
applicants trying through “token” or “pretextual” uses to establish that the mark had been
used in commerce. Courts rejected some of these and allowed others.
Since 1988, however, the story has changed. Congress amended § 1051 of the
Lanham Act to allow “intent to use” applications. (Foreign applicants have a third

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option—international agreements allow them to file based on an active registration or
application in another country.) Parties who are not yet using a mark can file based on
intent-to-use, meaning that (in the words of the PTO) “you have more than just an idea
but are less than market ready (for example, having a business plan, creating samples
products, or performing other initial business activities).” A successful use-based
application results in registration. A successful intent-to-use application results in a
“Notice of Allowance” that gives the applicant six months to verify in a “Statement of
Use” that she has begun using the mark in commerce. If six months is not enough time,
the applicant can file for a series of six-month extensions; the maximum extension period
is three years from the Notice of Allowance. After the first six month period, “good
cause” statements must be filed showing the reasons for requiring the extension.
Until the 1988 amendments to section 1051, domestic applicants were at a disadvantage vis à vis foreign applicants who could effectively jump in line ahead of domestic applicants because international agreements allowed them to file U.S. applications claiming
earlier filing dates from countries with less stringent requirements. This gave the foreign
applications “priority” as against the domestic applicants. Recognizing applications based
on a bona fide intent-to-use helped to level the playing field.
“Priority” is an important concept in trademark law. A mark cannot be registered
if it is confusingly similar to a mark that has priority because it is already registered or
the subject of a prior application. (If a mark is confusingly similar to an unregistered
mark, then it can still obtain a federal registration, but exclusive rights will not extend to
the geographical area where the senior common law mark is being used.) As between
two applications for confusingly similar marks, the filing date—the date that the PTO
receives either the electronic or paper application—establishes priority. The second
application is suspended until the first is either registered or abandoned. However, if the
second applicant actually has stronger rights—for example, by using the mark for a much
longer time—she can bring an opposition proceeding during the registration process and,
if successful, prevent the mark from being registered.
After a trademark application is submitted, a PTO examiner determines whether it
satisfies the eligibility requirements summarized above and publishes it in the “Official
Gazette.” There is then a 30-day period for anyone who feels they would be damaged by
registration of the mark to oppose it. Opposition proceedings are held before the
Trademark Trial and Appeal Board (TTAB). The TTAB also handles appeals from the
PTO’s denials of registration. Appeals from the TTAB can go to the Federal Circuit (for a
direct appeal) or to a federal district court (for a de novo review).
After registration, trademark rights last for as long as a mark is in use, as long as
the trademark owner submits the required recurring paperwork and fees. (Trademark
maintenance documentation is first due between 5 and 6 years after registration, and then
every 10 years after registration.) However, registered marks may be subject to cancellation proceedings. See 15 U.S.C. 1064. Among other reasons, a registration can be
cancelled if the mark has become generic or functional, or if the registration was obtained
contrary to certain provisions in section 1052 (discussed in Chapter 6).
Notes: International Trademark Protection
Though trademark law is territorial, both in terms of registration and enforcement,
there are a number of international agreements that harmonize international trademark
laws in order to facilitate more global protection. One of the main instruments is the Paris
Convention for the Protection of Industrial Property or “Paris Convention” (1883). It

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currently has 175 signatories, including the United States. It provides for “national
treatment,” meaning that signatories must offer the same application process and postregistration rights to trademark owners from other contracting parties as they give to their
nationals. In addition, signatories must refuse to grant national registrations to marks that
are confusingly similar to well-known international marks. This keeps the door open for
the global expansion of famous brands. Finally, an applicant can claim the filing date in
one Paris Convention country as the priority date in all participating countries as long as
the other filings occur within six months. (This is the provision that inspired the U.S. to
allow intent-to-use applications.)
The Trade Related Aspects of Intellectual Property Agreement or “TRIPS Agreement” (1994) is another important international agreement that—like the Paris Convention—provides for national treatment and priority filing dates. In addition, it establishes
minimum standards of protection, such as protection for geographic indications.
The Protocol Relating to the Madrid Agreement Concerning the International
Registration of Marks or “Madrid Protocol” (1989) supplements the Madrid Agreement for
the International Registration of Trademarks or “Madrid Agreement” (1891), and provides
a mechanism for filing a single international application after securing a registration in a
participating country. This saves trademark owners from filing different applications in
every additional country where they seek protection. The Madrid Protocol only streamlines
filing, not protection; each contracting party designated in the application can determine
whether to grant protection. The U.S. did not join the Madrid Agreement until 2003 because,
before the Madrid Protocol, our laws set a higher bar for trademark registration than many
other countries, and the single international application disfavored U.S. trademark owners
by giving foreign applicants a shortcut into the U.S. registration process.
P ROBLEM 4-1
Look back at Chapter 1 and then review the contours of trademark protection as
described in this chapter and in the chart on page xii. The goal is to see which features
of trademark law mesh with the rationales and world-views described in Chapter 1.
1.) Would Cohen, quoted on the first page of this chapter, have agreed with the
baseline for intellectual property set out by Brandeis, by Holmes or by Pitney?
Why? Is there a tension between the “unfair competition” roots of trademark
law and the theory that trademarks are intended to facilitate efficient producerconsumer information flow?
2.) This chapter argues that one particular rationale for trademark law best
explains the loss of rights to a novel, invented term—Escalator, Thermos, Aspirin—
through genericide. Do you agree? What other rules of trademark law are explained
by the same rationale?
3.) Of the three intellectual property rights we will look at, only trademarks can
(so long as continually used and renewed) last for an unlimited period of time.
Why? If your answer is that the Constitution requires that copyright and patent
be for limited times, why do we also find that rule in other countries not bound
by the U.S. Constitution?

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105

4.) Critics of “brand fetishism,” such as Naomi Klein, author of No Logo, argue
that we define ourselves in terms of brands (both those we accept and those we
reject), that we obsess about the messages that come with these symbols and that,
as a consequence, the public space for debate, self-definition and meaning is
increasingly privatized. The social harms attributed to this process range from
thefts or crimes of violence to acquire favored status-symbols such as branded
jackets or shoes, to the claim that in turning over our visions of self to private
logoed creations, we impoverish our culture and ourselves. One central thesis of
this argument is that trademarks have long since left the rationale of efficient
consumer information flow behind. The logo does not tell us something about the
producer of the good. The logo is the good. The person who purchases a plain
white cotton T-shirt with a large Nike swoosh is not buying the shirt. The shirt is
merely the transport mechanism for the logo. Do you agree with any or all of
this? What criticisms could be made of this idea? What implications does the
brand fetishism critique have for trademark law and specifically for the
protection of famous marks under anti-dilution law?
Note: A Trademark Law Flow Chart
On the next page you will find one of the tools we use in the book to make
intellectual property law easier to understand. It is a humble one—a flow-chart. You can
use it in two different ways.
First, please use it as a map of what you will be learning. The chart explains what
we will be covering in each chapter and how the legal questions discussed will play a
role in trademark analysis. Take the time to read it carefully and think through each stage.
You will find that pays remarkable dividends. It is too easy to get buried in minutia, to
forget why you are covering a particular question, or what role it plays in the larger
analysis. Of course, one can hope for the 3am epiphany the morning of the test in which
the structure of the whole edifice becomes clear, but we want you to have that big picture
view from the beginning.
Second, you can use the chart to help you with the Problems. The casebook uses a
series of practical doctrinal exercises to ensure you actually understand the material, and
to give you the analytical skills you will need for real mastery. Problems will be focused
on a particular issue you have just studied: “Can your client register this mark? What are
the requirements for registration? What if the mark is scandalous? Or merely descriptive?
Or another company has registered an identical mark to sell a completely different type
of product?” The Problems are based on former exams, so they provide a useful method
of review. When you are doing the Problems, the flow chart functions not just as a map
but as a check-list: a structured set of questions designed to lead you through the analysis
step-by-step.
The map is not the terrain. This is a single page covering hundreds of pages of
material. There is much more to the analysis than it can cover. Also, this is the intro–
ductory Intellectual Property course; there are many more specialized issues in trademark
law that our coverage here necessarily skips over. Still, even with those limitations, we
hope you will find it useful.

TRADEMARK FLOW CHART
(This is a (highly) simplified preview of what you will learn and
a tool to use in the problems. Refer to it often.)
Does the plaintiff own a valid trademark? (Chapters 5 and 6)
Was the mark 1) USED IN COMMERCE 2) AS A MARK, and is it 3) DISTINCTIVE—
does it identify the source of the product?
Trademarks can consist of words, logos, colors, packaging, design, and more.
FUNCTIONAL product features and GENERIC terms are never protectable.
The “use in commerce” must be bona fide and sufficiently public to create an association between the mark and the product. The “use as a mark” must be as a source
identifier, not merely a motto or mission statement. Some marks are considered
“inherently distinctive,” because they immediately signal a product’s source. Others—
including merely descriptive marks, colors, and product design—require “secondary
meaning” before they qualify as distinctive.

NO

Federal registration is not necessary for protection, but it does confer additional
benefits.

YES

Did the defendant make a USE IN COMMERCE of a similar mark in connection with
goods or services, and did that use cause a LIKELIHOOD OF CONFUSION about
source or sponsorship, such that consumers are likely to mistakenly associate the
defendant’s products with the plaintiff?
Courts use multifactor tests to determine whether there is a likelihood of consumer
confusion. Key factors include the similarity of the plaintiff’s and defendant’s marks
and the proximity of their products. Some courts expand the inquiry beyond confusion
at the point of sale to encompass “initial interest” and “post-sale” confusion.

NO

NO TRADEMARK INFRINGEMENT

Did the defendant infringe that
trademark? (Chapter 7)

YES

Do any defenses apply? (Chapter 8)
Was the defendant’s use a CLASSIC FAIR USE or a NOMINATIVE USE? Was it
sufficiently PARODIC to preclude the likelihood of confusion?
Classic fair use applies when a defendant uses a term over which the plaintiff has a
mark, fairly and in good faith, only to describe his own product, and not at all to refer to
the plaintiff’s product. (“Microcolor” permanent makeup.) Nominative use exists where
the defendant uses the plaintiff’s mark to describe the plaintiff’s product, (“Want Prius
values, but race car style? Buy a Tesla.”), even if the defendant’s ultimate goal is to
describe his own product. Nominative uses are often for the purposes of comparison,
criticism, or point of reference. They are subject to limitations based on the need and
scope of use, and cannot suggest sponsorship or endorsement by the mark owner.

YES

NO

TRADEMARK INFRINGEMENT

Note about other causes of action: Chapter 7 also covers liability for contributory infringement—
facilitating someone else’s infringement. Chapter 9 covers false advertising—liability for false or misleading
statements of fact in advertising (§ 1125(a)), anti-dilution—special protection for “famous” marks against dilution by “blurring” and “tarnishment” (§ 1125(c)), and “cyberpiracy”—remedies against the registration with “bad
faith intent to profit” of domain names that are identical or confusingly similar to trademarks (§ 1125(d)).

CHAPTER FIVE

Subject Matter: Requirements for
Trademark Protection

1.) Use as a Mark in Commerce
For each intellectual property right that we look at in this course, the first, crucial,
question is: what subject matter does it cover? Look back at the “subject matter” row in the
chart in the Introduction. Notice how differently the subject matter of each right is defined,
how each subject matter design tells you something about the goals that property regime
was supposed to serve. Trademark subject matter is defined, in part, by the way the producer
uses it and the consumer perceives it as a symbol. Copyrightable subject matter is defined,
in part, in terms of qualities of the content produced – original expression, fixed in a tangible
medium. Patentable subject matter is defined, in part, in terms of the relationship of the
innovation to the field of technology as understood by its practitioners at the time.
How does trademark law define its subject matter? The easiest way to state the
foundational requirements for both registered and unregistered trademarks is to say that we
require “use as a mark in commerce.” But this simple phrase conceals some complexities.
What do we mean by use in commerce? What do we mean by use as a mark? It turns out
that the latter phrase contains two requirements. The first focuses on the actions of the
producer. The source company must actually be using the putative mark as a mark,
something connected (physically where possible, but also cognitively) to a particular good
or service. The key here is that the source company must be using the mark as a mark, as
a source identifier, rather than just as a slogan, mission statement or favorite turn of phrase.
The second focuses on the interaction between the consumer and the mark. It is the
requirement of distinctiveness. Even if the producer is clearly trying to use the mark as a
mark, is it capable of functioning as a mark? Can it distinguish this source for goods or
services from others in the minds of consumers? Is it a source identifier or really a
functional characteristic of the product? We will deal with these requirements in turn.

Use in Commerce
As always, it is good to start with some of the statutory definitions. Develop the habit
of going to the definitions section of an intellectual property statute first when you seek to
understand the field, not just after you think you see an ambiguity. You will not regret it.
§ 1127—Construction and definitions
In the construction of this chapter, unless the contrary is plainly apparent
from the context: . . .
. . . The word “commerce” means all commerce which may lawfully be
regulated by Congress. . . .
. . . The term “use in commerce” means the bona fide use of a mark in
the ordinary course of trade, and not made merely to reserve a right in a
mark. For purposes of this chapter, a mark shall be deemed to be in use
in commerce—
(1) on goods when—

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(A) it is placed in any manner on the goods or their containers
or the displays associated therewith or on the tags or labels
affixed thereto, or if the nature of the goods makes such
placement impracticable, then on documents associated with the
goods or their sale, and
(B) the goods are sold or transported in commerce, and
(2) on services when it is used or displayed in the sale or advertising
of services and the services are rendered in commerce, or the
services are rendered in more than one State or in the United States
and a foreign country and the person rendering the services is
engaged in commerce in connection with the services.
Notice how the first definition of “commerce” above is very broad. If commerce is
anything that Congress can regulate under the Commerce Clause then almost anything
could be commerce. Even after Lopez and Morrison, the Federal government’s ability to
regulate actual economic activity is a sweeping one. Then notice how the second clause
quoted, defining use in commerce, is narrower.
The following cases and materials will explore how broadly or narrowly the Federal
system defines “use in commerce.” One note before we begin. We are considering “use in
commerce” as a requirement for trademark protection. But “use in commerce” also plays
another role—as one of the requirements for infringement. We will come back to that
requirement in the section of the casebook on infringement—to infringe, I must be using
your mark in commerce. Should the definition of “use in commerce” required to get a
mark be the same as that required to infringe it? We will return to that question later.

Use in Commerce: Free and Open Source Software
The following case deals with whether or not free distribution of an open source
email program on the internet constituted use in commerce. The software was offered
under the GNU “General Public License” or “GPL” which we will consider later in the
course. The GPL gives users the rights freely to copy and to modify the program, but if
they redistribute modified versions of the program, they must do so under the same
license—preserving the open qualities of the program for future users. Could the
developer of the open source software called Coolmail, distributed freely online, claim a
trademark over it? Was this a use in commerce?

Planetary Motion, Inc. v. Techsplosion, Inc.

261 F.3d 1188 (11th Cir. 2001)

RESTANI, Judge.
...
Under the Lanham Act, the term “use in commerce” is defined in relevant part as
follows:
the bona fide use of a mark in the ordinary course of trade, and not made
merely to reserve a right in a mark. . . . [A] mark shall be deemed to be
in use in commerce . . . on goods when (A) it is placed in any manner on
the goods or their containers or the displays associated therewith or on
the tags or labels affixed thereto, or if the nature of the goods makes such

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109

placement impracticable, then on documents associated with the goods
or their sale, and (B) the goods are sold or transported in commerce. . . .
15 U.S.C. § 1127.
The district court found that because the statute is written in the disjunctive (i.e.,
“sale or transport”), Darrah’s wide distribution of the Coolmail software over the
Internet, even absent any sales thereof, was sufficient to establish ownership rights in the
“CoolMail” mark. Appellants contend that “transport in commerce” alone—here,
Darrah’s free distribution of software over the Internet “with no existing business, no
intent to form a business, and no sale under the mark”—is insufficient to create trademark
rights. Appellants’ argument lacks merit.
The parties do not make clear the two different contexts in which the phrase “use in
commerce” is used. The term “use in commerce” as used in the Lanham Act “denotes Congress’s authority under the Commerce Clause rather than an intent to limit the [Lanham]
Act’s application to profit making activity.” Because Congress’s authority under the Commerce Clause extends to activity that “substantially affects” interstate commerce, the
Lanham Act’s definition of “commerce” is concomitantly broad in scope: “all commerce
which may lawfully be regulated by Congress.” Nevertheless, the use of a mark in commerce also must be sufficient to establish ownership rights for a plaintiff to recover against
subsequent users under section 43(a). The court in Mendes set forth a two part test to determine whether a party has established “prior use” of a mark sufficient to establish ownership:
[E]vidence showing, first, adoption, and, second, use in a way sufficiently
public to identify or distinguish the marked goods in an appropriate
segment of the public mind as those of the adopter of the mark, is
competent to establish ownership, even without evidence of actual sales.
Under the “totality of circumstances” analysis, a party may establish “use in
commerce” even in the absence of sales. Similarly, not every transport of a good is
sufficient to establish ownership rights in a mark. To warrant protection, use of a mark
“need not have gained wide public recognition,” but “[s]ecret, undisclosed internal
shipments are generally inadequate.” In general, uses that are de minimis may not
establish trademark ownership rights.
We find that, under these principles, Darrah’s activities under the “Coolmail” mark
constitute a “use in commerce” sufficiently public to create ownership rights in the mark.
First, the distribution was widespread, and there is evidence that members of the targeted
public actually associated the mark Coolmail with the Software to which it was affixed.
Darrah made the software available not merely to a discrete or select group (such as
friends and acquaintances, or at a trade show with limited attendance), but to numerous
end-users via the Internet. Third, the mark served to identify the source of the Software.
The “Coolmail” mark appeared in the subject field and in the text of the announcement
accompanying each release of the Software, thereby distinguishing the Software from
other programs that might perform similar functions available on the Internet or sold in
software compilations. The announcements also apparently indicated that Darrah was the
“Author/Maintainer of Coolmail” and included his e-mail address. The user manual also
indicated that the Software was named “Coolmail.”
[S]oftware is commonly distributed without charge under a GNU General Public
License. The sufficiency of use should be determined according to the customary
practices of a particular industry. That the Software had been distributed pursuant to a
GNU General Public License does not defeat trademark ownership, nor does this in any
way compel a finding that Darrah abandoned his rights in trademark. Appellants
misconstrue the function of a GNU General Public License. Software distributed

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pursuant to such a license is not necessarily ceded to the public domain and the licensor
purports to retain ownership rights, which may or may not include rights to a mark.
Appellants also rely on DeCosta v. Columbia Broad. Sys. (1st Cir. 1975), to argue
that Darrah is an eleemosynary individual and therefore unworthy of protection under
unfair competition laws. The DeCosta court did not hold that the absence of a profitoriented enterprise renders one an eleemosynary individual, nor did it hold that such
individuals categorically are denied protection. Rather, the DeCosta court expressed
“misgivings” of extending common law unfair competition protection, clearly available to
eleemosynary organizations, to eleemosynary individuals. The court’s reluctance to extend
protection to eleemosynary individuals was based on an apparent difficulty in establishing
a line of demarcation between those eleemosynary individuals engaged in commerce and
those that are not. But as the sufficiency of use to establish trademark ownership is
inherently fact-driven, the court need not have based its decision on such a consideration.
Common law unfair competition protection extends to non-profit organizations because
they nonetheless engage in competition with other organizations. See Girls Clubs of Am.,
Inc. v. Boys Clubs of Am., Inc. (2d Cir. 1988). Thus, an eleemosynary individual that uses
a mark in connection with a good or service may nonetheless acquire ownership rights in
the mark if there is sufficient evidence of competitive activity.
Here, Darrah’s activities bear elements of competition, notwithstanding his lack of
an immediate profit-motive. By developing and distributing software under a particular
mark, and taking steps to avoid ceding the Software to the public domain, Darrah made
efforts to retain ownership rights in his Software and to ensure that his Software would be
distinguishable from other developers who may have distributed similar or related Software. Competitive activity need not be fueled solely by a desire for direct monetary gain.
Darrah derived value from the distribution because he was able to improve his Software
based on suggestions sent by end-users. Just as any other consumers, these end-users discriminate among and share information on available software. It is logical that as the Software improved, more end-users used his Software, thereby increasing Darrah’s recognition in his profession and the likelihood that the Software would be improved even further.
In light of the foregoing, the use of the mark in connection with the Software
constitutes significant and substantial public exposure of a mark sufficient to have
created an association in the mind of public.
Questions:
1.) Many of the virtual “goods” you receive online—apps, email programs, downloaded
browsers—are distributed without charge. Of that group, a subset is not even “advertising
supported,” they are simply distributed for the use of others. Some of them are also “free”
in the larger GPL sense that users are permitted to modify and redistribute them. How
does Planetary Motion apply the requirement of use in commerce to such activities? Do
you agree?
2.) Much of the court’s analysis focuses on whether a widespread association in the mind
of the public is created. Why? Does this collapse the “use in commerce” requirement into
the “use as a mark” requirement, the requirement of cognitive association between the
good and the mark?
3.) What are the benefits of describing “use in commerce” so broadly? What are the
potential harms? Does your listing of the potential harms depend on whether the same
definition of “use in commerce” is used in both establishing and infringing a trademark?

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4.) One of the arguments used against Darrah was that he was an individual engaged in
eleemosynary (or charitable) activity, and therefore that his use was not a use in commerce. The court noted that charitable or non-profit organizations were routinely granted
trademarks—presumably on the ground that this constituted “commerce” that Congress
could regulate. But it also felt that non-profit individuals could still acquire marks if there
were suitable evidence of competitive activity. Why should we care about “competitive
activity” when it comes to granting charitable or non-profit organizations or individuals
trademark rights? Because of Justice Pitney’s vision of unfair competition—the danger
that others will benefit from your labor in doing good, perhaps being able to raise funds
for their charity because of goodwill you have generated? Because it means that trademarks are still fulfilling a function of efficiently communicating with the consumer—or
in this case the donor? If I want to give to the Red Cross or Amnesty International or
Occupy Wall St, does it help me that those organizations can get trademarks?

Use in commerce was only the first requirement for trademark protection (both for
registration and for common law protection). The second is use as a mark, a concept that
requires us to analyze both whether the mark is actually being used by the producer to
identify itself as the source of a product, and whether it is distinctive enough to do so.

2.) Use as a Mark: Source Identification Function
a.) Actions of the Source

MicroStrategy Inc. v. Motorola, Inc.

245 F.3d 335 (4th Cir. 2001)

DIANA GRIBBON MOTZ, Circuit Judge.
. . . In June 2000, Motorola held a business summit of its marketing officers to
determine how to market more effectively its services and products on a worldwide basis.
The company decided to develop a new brand, which would cut across its various
business interests, to establish a more cohesive corporate identity. In early July, Motorola
contacted three advertising agencies, inviting each to compete in creating this new brand.
The company met with all three agencies during the week of August 7, 2000. One agency,
Ogilvy & Mather, suggested the use of “Intelligence Everywhere” as a trademark and
global brand for Motorola products. Ogilvy & Mather also represented that its attorneys
had conducted a trademark search for “Intelligence Everywhere,” which revealed no
conflicting use of the phrase as a trademark.
Motorola selected Ogilvy & Mather as its agency and began its normal procedures
for clearing “Intelligence Everywhere” as a trademark. In-house trademark counsel for
Motorola performed and commissioned various trademark searches for “Intelligence
Everywhere” and turned up no conflicting trademark uses of the phrase. On October 5,
2000, in-house counsel informed Motorola management that no conflicting marks had been
found and that the phrase was available for use as a mark in the United States and throughout
the world. However, in-house counsel also informed Motorola management that a Canadian
company, Cel Corporation, had registered the domain name “intelligenceeverywhere.com”
and further investigation revealed that Cel might be using the name as a trademark on some

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products. A month later, Motorola obtained Cel’s rights to “Intelligence Everywhere.”
On October 19, 2000, Motorola filed an intent-to-use application with the United
States Patent and Trademark Office for the registration of the trademark “Intelligence
Everywhere,” indicating its intent to use this mark on a vast array of its products and
services. On December 10, 2000, Motorola registered the domain name “intelligenceeverywhere.com” with Network Solutions, Inc. in Herndon, Virginia.
On January 8, 2001, MicroStrategy, a producer of communication software, notified
Motorola that MicroStrategy had been using “Intelligence Everywhere” as a trademark
since “at least as early as 1998.” MicroStrategy further stated that the mark had obtained
common law protection, and that Motorola’s intended use of the mark would constitute
unlawful infringement. Motorola responded by expressing its belief that its use of the mark
would not violate state or federal law and its intent to continue using the mark.
MicroStrategy then submitted its own application to the United States Patent and Trademark Office seeking to register the trademark, “Intelligence Everywhere.”
On February 13, 2001, MicroStrategy filed this action in the United States District
Court for the Eastern District of Virginia, raising claims of trademark infringement,
trademark dilution, and cybersquatting. On February 23, 2001, the district court heard oral
argument and denied the motion for a preliminary injunction. MicroStrategy then moved
this court for expedited consideration of that appeal. We granted the request and, after
receiving briefs from the parties, heard oral argument on the matter on March 15, 2001.
Immediately following argument, we issued a written order, which affirmed the district
court’s judgment denying the injunction. We explain here our reasons for that order. . . .3
. . . [W]e turn to the question of whether MicroStrategy has demonstrated substantial likelihood of success on the merits in its trademark infringement claim. For a plaintiff
to prevail on a claim of trademark infringement, the plaintiff must first and most
fundamentally prove that it has a valid and protectable mark. The district court held that
MicroStrategy had failed to show a likelihood of success on this critical, initial burden.
The court reasoned that although the record demonstrated that MicroStrategy had
registered approximately 50 marks, it failed to register “Intelligence Everywhere” as a
mark and, therefore, did not qualify for protection under 15 U.S.C. § 1114(1). With
3

Although MicroStrategy makes only the general argument noted in text with respect to irreparable harm,
Motorola has offered evidence detailing the particulars of the harm it would suffer if a preliminary injunction
was granted. For example, Motorola has submitted affidavits explaining that it has previewed the “Intelligence
Everywhere” mark to its “key customers,” and has told those customers that the mark would be the basis of a
“joint co-marketing and advertising campaign with Motorola,” to be launched the week of March 19, 2001 to
coincide with three international technology trade shows. An injunction would assertedly cause Motorola
incalculable harm to its “reputation and good will within the industry” and “negatively impact key business
ventures.” Motorola has submitted evidence as to print and television advertisements, new packaging, and
website redesign—all featuring the “Intelligence Everywhere” mark—that it has developed for the same midMarch campaign to accompany the three trade shows. The company has also outlined its financial investment
in developing the “Intelligence Everywhere” mark, which as of February 20, 2001 totaled more than $24
million. Undoubtedly, Motorola incurred some of these expenses after it received notification of
MicroStrategy’s claim in January 2001, but not even MicroStrategy contends that Motorola had not spent
substantial sums on its global campaign prior to any notice from MicroStrategy. Moreover, the record clearly
demonstrates that, after conducting an extensive trademark search and carefully evaluating MicroStrategy’s
claims, Motorola believed that MicroStrategy had no valid claim to the “Intelligence Everywhere” mark. It
seems entirely reasonable for Motorola, considering its significant sunk costs, to continue preparations for its
campaign in face of what it viewed as a meritless claim. The dissent’s contrary contention, that Motorola acted
in bad faith, assumes that MicroStrategy’s claim to the mark was not only valid, but clearly valid; to adopt
this view is to have already adjudicated MicroStrategy’s ownership of the mark in its favor. Not only is this
an inappropriate starting place, but, as we explain above, an insupportable conclusion. . . .

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respect to MicroStrategy’s claim under the common law of Virginia, the court concluded
that “a careful review” of the record did “not reveal” that MicroStrategy used the term
“Intelligence Everywhere” to “identif[y] MicroStrategy as a source of goods or services.”
Of course, as MicroStrategy points out, a mark need not be registered to garner
federal trademark protection. Rather, “it is common ground that § 43(a) of the Lanham
Act, 15 U.S.C. § 1125 protects qualifying unregistered trademarks.” Two Pesos, Inc. v.
Taco Cabana, Inc. (1992). But § 43(a) of the Lanham Act, like Virginia common law, does
require that in order to obtain trademark protection “a designation must be proven to
perform the job of identification: to identify one source and distinguish it from other
sources. . . . Not every single word [or] phrase . . . that appears on a label or in an advertisement qualifies as a protectable mark.” If a purported mark fails to identify its source,
it is not protectable—under state or federal law. See also 15 U.S.C. § 1127 (1994)
(“‘trademark’ includes any word, name, symbol, or device, or any combination thereof
. . . used by a person . . . to identify and distinguish his or her goods”). As the Sixth Circuit
recently put it, “a plaintiff must show that it has actually used the designation at issue as
a trademark; thus the designation or phrase must be used to ‘perform[]’ the trademark
function of identifying the source of the merchandise to the customers.” Rock and Roll
Hall of Fame v. Gentile Prods. (6th Cir. 1998).
After careful examination of the 252 pages of MicroStrategy documents that the
company has submitted in support of its motion for preliminary injunction, we agree with
the district court: MicroStrategy has failed to demonstrate that it has likely used
“Intelligence Everywhere” to identify MicroStrategy as the source of its goods or services.
MicroStrategy has offered 24 documents dating from March 1999 through early
2001, in which it has used the term “Intelligence Everywhere.” These include two annual
reports, several press releases, brochures, sales presentations, a product manual, a business
card, and newspaper articles. Although most of these documents contain several pages of
densely printed material and some are quite lengthy, typically each refers only once to
“Intelligence Everywhere,” and that reference follows no particular design or sequence, i.e.,
sometimes it’s on the cover, sometimes not, most often “Intelligence Everywhere” appears
in the midst of text. Use of a trademark to identify goods and services and distinguish them
from those of others “does not contemplate that the public will be required or expected to
browse through a group of words, or scan an entire page in order to decide that a particular
word, separated from its context, may or may not be intended, or may or may not serve to
identify the product.” Yet that is precisely the sort of examination one is forced to employ
even to find the term “Intelligence Everywhere” in many of MicroStrategy’s materials.
Moreover, MicroStrategy has not used any “constant pattern” or design to highlight
“Intelligence Everywhere.” A trademark need not be “particularly large in size or appear
in any particular position on the goods, but it must be used in such a manner that its nature
and function are readily apparent and recognizable without extended analysis or research
and certainly without legal opinion.” Unlike certain MicroStrategy trademarks, e.g.,
“Intelligent E-Business,” MicroStrategy has not consistently placed “Intelligence
Everywhere” on a particular part of the page, or in a particular type, or labeled it with
“TM,” or consistently used a distinctive font, color, typeset or any other method that makes
“its nature and function readily apparent and recognizable without extended analysis.” . . .
On its business card and elsewhere, MicroStrategy characterizes “Intelligence
Everywhere” as the company “mission,” “vision,” “effort,” “motto,” or “dream.” Although in the proper context, a mission statement, like a slogan, can serve as a trademark,
a company mission statement or slogan is certainly not by definition a trademark. Rather,
mission statements, like “[s]logans often appear in such a context that they do not identify

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and distinguish the source of goods or services. In such cases, they are neither protectable
nor registrable as trademarks.” So it is here. MicroStrategy has not demonstrated that it
has used the mission statement to identify and distinguish the source of its products or
services. If anything, the phrase has been used to advertise MicroStrategy’s goods,
without identifying the source of those goods. Unless used in a context whereby they
take on a dual function, advertisements are not trademarks. . . .
For these reasons, MicroStrategy has at this juncture utterly failed to provide a basis
for a court to find the probability of its trademark usage, let alone trademark infringement
by Motorola. Rather, MicroStrategy has presented a record of limited, sporadic, and inconsistent use of the phrase “Intelligence Everywhere.” Obviously, this does not constitute
“a clear and strong case” of likelihood of success on the merits. Of course, MicroStrategy
may yet prevail on its infringement claim at trial. But the company has not demonstrated
that this is likely, let alone that the district court abused its discretion in refusing to grant
the requested preliminary injunction. The judgment of the district court is therefore
AFFIRMED.
NIEMEYER Circuit Judge, dissenting. . . .3
. . . [W]hile MicroStrategy has not consistently used the mark in all of its corporate
documents, the record certainly does reflect that MicroStrategy has used the mark
consistently as a trademark with respect to its “Broadcaster” software. On the cover of
the software user’s manual, which is distributed with the software, the mark is set out in
prominent, highlighted text. Moreover, every MicroStrategy business card features the
mark, set off with quotation marks, in initial capital letters, with the TM signal next to it.
Either of these consistent uses alone could be enough to establish the adoption of
“Intelligence Everywhere” as a mark, and together, they provide MicroStrategy with considerable evidence to present at trial on the first element of its infringement claim.
If it is able to establish this element, MicroStrategy is almost certain to prevail on
the other elements of its infringement claim. Despite the district court’s contrary
conclusion, it cannot seriously be contended that MicroStrategy’s use of “Intelligence
Everywhere” is descriptive rather than suggestive. The phrase does not impart information
about MicroStrategy or its products directly—the hallmark of a descriptive mark—but
instead “requires some operation of the imagination to connect” the meaning of the phrase
to MicroStrategy and its products, the very definition of a suggestive mark. A potential
customer faced solely with the slogan would be unable to describe precisely what product
or services were offered by MicroStrategy, unlike in the cases of marks held to be
descriptive, e.g., “After Tan post-tanning lotion, 5 Minute glue, King Size men’s clothing,
and the Yellow Pages telephone directory.”
Because the district court applied the controlling legal standards improperly and,
in addition, considered irrelevant factors in determining the relative harms to the parties,
I would reverse its ruling and remand for entry of a preliminary injunction pending trial.
I would also direct the district court to conduct that trial expeditiously so as to minimize
any harm that might be caused by further delay. For these reasons, I respectfully dissent.
3

That the district judge and two members of this court have been impressed by the amount spent on a
trademark by a potential infringer, a theoretically irrelevant factor, would seem to indicate that companies
wishing to escape infringement liability will best be served by heeding the advice of Martin Luther, that if
you sin, “sin boldly” (pecca fortiter). Letter from Luther to Melanchthon (1521), in Epistolæ (1556). The
majority’s suggestion, albeit ambiguous, that “bad faith” infringement can only be proved in a case where a
claim to a mark is “not only valid, but clearly valid,” is simply an inaccurate statement of what is required
to recover profits, actual damages, and attorney fees under 15 U.S.C. § 1117(a).

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115

Questions:
1.) Why does the majority mention that Motorola hired Ogilvy & Mather, which
conducted a trademark search, and that it purchased the rights to “Intelligence Everywhere” and “intelligenceeverywhere.com” from the Cel Corporation? Is the court merely
seeking to show that Motorola acted in good faith or is it implicitly referring back to one
of the functions of the trademark system?
2.) Of what relevance are the amounts of money Motorola had spent on its upcoming ad
campaign? Are you persuaded by the dissent’s nicely snarky invocation of Martin
Luther—claiming that the majority is effectively telling those who might use the marks
of others, “if you sin, sin boldly”?

b.) Nature of the Mark: Distinctiveness and Functionality

Abercrombie & Fitch Co. v. Hunting World, Inc.

537 F.2d 4 (2d Cir. 1976)

FRIENDLY, Circuit Judge.
This action in the District Court for the Southern District of New York by
Abercrombie & Fitch Company (A&F), owner of well-known stores at Madison Avenue
and 45th Street in New York City and seven places in other states, against Hunting World,
Incorporated (HW), operator of a competing store on East 53rd Street, is for infringement
of some of A&F’s registered trademarks using the word ‘Safari’. It has had a long and, for
A&F, an unhappy history. On this appeal from a judgment which not only dismissed the
complaint but canceled all of A&F’s ‘Safari’ registrations, including several that were not
in suit, we relieve A&F of some of its unhappiness but not of all.
I.
The complaint, filed in January, 1970, after describing the general nature of A&F’s
business, reflecting its motto “The Greatest Sporting Goods Store in the World,” alleged
as follows: For many years A&F has used the mark ‘Safari’ on articles “exclusively
offered and sold by it.” Since 1936 it has used the mark on a variety of men’s and women’s
outer garments. Its United States trademark registrations include:
Trademark Number Issued
Goods
Safari
358,781 7/26/38 Men’s and Women’s outer garments,
including hats.
Safari Mills 125,531 5/20/19 Cotton Piece goods.
Safari
652,098 9/24/57 Men’s and Women’s outer garments,
including shoes.
Safari
703,279 8/23/60 Woven cloth, sporting goods, apparel, etc.
A&F has spent large sums of money in advertising and promoting products
identified with its mark ‘Safari’ and in policing its right in the mark, including the
successful conduct of trademark infringement suits. HW, the complaint continued, has
engaged in the retail marketing of sporting apparel including hats and shoes, some

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identified by use of ‘Safari’ alone or by expressions such as ‘Minisafari’ and ‘Safariland’.
Continuation of HW’s acts would confuse and deceive the public and impair “the distinct
and unique quality of the plaintiff’s trademark.” A&F sought an injunction against
infringement and an accounting for damages and profits.
HW filed an answer and counterclaim. This alleged, inter alia, that “the word
‘safari’ is an ordinary, common, descriptive, geographic, and generic word” which “is
commonly used and understood by the public to mean and refer to a journey or
expedition, especially for hunting or exploring in East Africa, and to the hunters, guides,
men, animals, and equipment forming such an expedition” and is not subject to exclusive
appropriation as a trademark. HW sought cancellation of all of A&F’s registrations using
the word ‘Safari’ on the ground that A&F had fraudulently failed to disclose the true
nature of the term to the Patent Office. . . .
II.
It will be useful at the outset to restate some basic principles of trademark law,
which, although they should be familiar, tend to become lost in a welter of adjectives.
The cases, and in some instances the Lanham Act, identify four different categories
of terms with respect to trademark protection. Arrayed in an ascending order which
roughly reflects their eligibility to trademark status and the degree of protection
accorded, these classes are (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary
or fanciful. The lines of demarcation, however, are not always bright. Moreover, the
difficulties are compounded because a term that is in one category for a particular product
may be in quite a different one for another, because a term may shift from one category
to another in light of differences in usage through time, because a term may have one
meaning to one group of users and a different one to others, and because the same term
may be put to different uses with respect to a single product. In various ways, all of these
complications are involved in the instant case.
A generic term is one that refers, or has come to be understood as referring, to the
genus of which the particular product is a species. At common law neither those terms
which were generic nor those which were merely descriptive could become valid
trademarks[.] . . . While, as we shall see, the Lanham Act makes an important exception
with respect to those merely descriptive terms which have acquired secondary meaning, it
offers no such exception for generic marks. The Act provides for the cancellation of a
registered mark if at any time it “becomes the common descriptive name of an article or
substance,” § 14(c). This means that even proof of secondary meaning, by virtue of which
some “merely descriptive” marks may be registered, cannot transform a generic term into
a subject for trademark. [N]o matter how much money and effort the user of a generic term
has poured into promoting the sale of its merchandise and what success it has achieved in
securing public identification, it cannot deprive competing manufacturers of the product of
the right to call an article by its name. We have recently had occasion to apply this doctrine
of the impossibility of achieving trademark protection for a generic term. The
pervasiveness of the principle is illustrated by a series of well known cases holding that
when a suggestive or fanciful term has become generic as a result of a manufacturer’s own
advertising efforts, trademark protection will be denied save for those markets where the
term still has not become generic and a secondary meaning has been shown to continue. A
term may thus be generic in one market and descriptive or suggestive or fanciful in another.
The term which is descriptive but not generic stands on a better basis. Although
§ 1052 forbids the registration of a mark which, when applied to the goods of the applicant,
is “merely descriptive,” § 2(f) removes a considerable part of the sting by providing that

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“except as expressly excluded in paragraphs (a)–(d) of this section, nothing in this chapter
shall prevent the registration of a mark used by the applicant which has become distinctive
of the applicant’s goods in commerce” and that the Commissioner may accept, as prima
facie evidence that the mark has become distinctive, proof of substantially exclusive and
continuous use of the mark applied to the applicant’s goods for five years preceding the
application. As indicated in the cases cited in the discussion of the unregistrability of
generic terms, “common descriptive name” refers to generic terms applied to products and
not to terms that are “merely descriptive.” In the former case any claim to an exclusive
right must be denied since this in effect would confer a monopoly not only of the mark but
of the product by rendering a competitor unable effectively to name what it was
endeavoring to sell. In the latter case the law strikes the balance, with respect to registration,
between the hardships to a competitor in hampering the use of an appropriate word and
those to the owner who, having invested money and energy to endow a word with the good
will adhering to his enterprise, would be deprived of the fruits of his efforts.
The category of “suggestive” marks was spawned by the felt need to accord
protection to marks that were neither exactly descriptive on the one hand nor truly
fanciful on the other. Having created the category the courts have had great difficulty in
defining it. Judge Learned Hand made the not very helpful statement:
“It is quite impossible to get any rule out of the cases beyond this: That the
validity of the mark ends where suggestion ends and description begins.”
Another court has observed, somewhat more usefully, that:
“A term is suggestive if it requires imagination, thought and perception
to reach a conclusion as to the nature of goods. A term is descriptive if
it forthwith conveys an immediate idea of the ingredients, qualities or
characteristics of the goods.”
Also useful is the approach taken by this court in Aluminum Fabricating Co. of Pittsburgh v. Season-All Window Corp., that the reason for restricting the protection accorded
descriptive terms, namely the undesirability of preventing an entrant from using a
descriptive term for his product, is much less forceful when the trademark is a suggestive
word since, as Judge Lumbard wrote:
“The English language has a wealth of synonyms and related words with
which to describe the qualities which manufacturers may wish to claim
for their products and the ingenuity of the public relations profession
supplies new words and slogans as they are needed.”
If a term is suggestive, it is entitled to registration without proof of secondary meaning. Moreover, as held in the Season-All case, the decision of the Patent Office to register a
mark without requiring proof of secondary meaning affords a rebuttable presumption that
the mark is suggestive or arbitrary or fanciful rather than merely descriptive.
It need hardly be added that fanciful or arbitrary terms enjoy all the rights accorded
to suggestive terms as marks—without the need of debating whether the term is “merely
descriptive” and with ease of establishing infringement.
In the light of these principles we must proceed to a decision of this case.
III.
We turn first to an analysis of A&F’s trademarks to determine the scope of
protection to which they are entitled. We have reached the following conclusions: (1)
applied to specific types of clothing ‘safari’ has become a generic term and ‘minisafari’
may be used for a smaller brim hat; (2) ‘safari’ has not, however, become a generic term
for boots or shoes; it is either “suggestive” or “merely descriptive” and is a valid

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trademark even if “merely descriptive” since it has become incontestable under the
Lanham Act; but (3) in light of the justified finding below that ‘Camel Safari,’ ‘Hippo
Safari’ and ‘Safari Chukka’ were devoted by HW to a purely descriptive use on its boots,
HW has a defense against a charge of infringement with respect to these on the basis of
“fair use.” We now discuss how we have reached these conclusions.
It is common ground that A&F could not apply ‘Safari’ as a trademark for an
expedition into the African wilderness. This would be a clear example of the use of ‘Safari’
as a generic term. What is perhaps less obvious is that a word may have more than one
generic use. The word ‘Safari’ has become part of a family of generic terms which, although
deriving no doubt from the original use of the word and reminiscent of its milieu, have come
to be understood not as having to do with hunting in Africa, but as terms within the language
referring to contemporary American fashion apparel. These terms name the components of
the safari outfit well-known to the clothing industry and its customers: the ‘Safari hat,’ a
broad flat-brimmed hat with a single, large band; the ‘Safari jacket,’ a belted bush jacket
with patch pockets and a buttoned shoulder loop; when the jacket is accompanied by pants,
the combination is called the ‘Safari suit.’ Typically these items are khaki-colored.
This outfit, and its components, were doubtless what Judge Ryan had in mind when
he found that “the word ‘safari’ in connection with wearing apparel is widely used by the
general public and people in the trade.” The record abundantly supports the conclusion
that many stores have advertised these items despite A&F’s attempts to police its mark.
In contrast, a search of the voluminous exhibits fails to disclose a single example of the
use of ‘Safari,’ by anyone other than A&F and HW, on merchandise for which A&F has
registered ‘Safari’ except for the safari outfit and its components as described above.
What has been thus far established suffices to support the dismissal of the complaint
with respect to many of the uses of ‘Safari’ by HW. Describing a publication as a “Safariland
Newsletter” containing bulletins as to safari activity in Africa, was clearly a generic use
which is nonenjoinable, see CES Publishing Co. v. St. Regis Publications, Inc. A&F also was
not entitled to an injunction against HW’s use of the word in advertising goods of the kind
included in the safari outfit as described above. And if HW may advertise a hat of the kind
worn on safaris as a safari hat, it may also advertise a similar hat with a smaller brim as a
minisafari. Although the issue may be somewhat closer, the principle against giving
trademark protection to a generic term also sustains the denial of an injunction against HW’s
use of ‘Safariland’ as a name of a portion of its store devoted at least in part to the sale of
clothing as to which the term ‘Safari’ has become generic.
A&F stands on stronger ground with respect to HW’s use of ‘Camel Safari,’ ‘Hippo
Safari’ and Chukka ‘Safari’ as names for boots imported from Africa. As already
indicated, there is no evidence that ‘Safari’ has become a generic term for boots. Since, as
will appear, A&F’s registration of ‘Safari’ for use on its shoes has become incontestable,
it is immaterial (save for HW’s contention of fraud which is later rejected) whether A&F’s
use of ‘Safari’ for boots was suggestive or “merely descriptive.”
HW contends, however, that even if ‘Safari’ is a valid trademark for boots, it is
entitled to the defense of “fair use” within § 33(b)(4) of the Lanham Act, 15 U.S.C.
§ 1115(b)(4). That section offers such a defense even as against marks that have become
incontestable when the term charged to be an infringement is not used as a trademark
“and is used fairly and in good faith only to describe to users the goods and services of
such party, or their geographic origin.”
Here, Lee Expeditions, Ltd., the parent company of HW, has been primarily engaged
in arranging safaris to Africa since 1959; Robert Lee, the president of both companies, is
the author of a book published in 1959 entitled “Safari Today—The Modern Safari

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Handbook” and has, since 1961, booked persons on safaris as well as purchased safari
clothing in Africa for resale in America. These facts suffice to establish, absent a contrary
showing, that defendant’s use of ‘Safari’ with respect to boots was made in the context of
hunting and traveling expeditions and not as an attempt to garner A&F’s good will. . . .
When a plaintiff has chosen a mark with some descriptive qualities, he cannot altogether
exclude some kinds of competing uses even when the mark is properly on the register. We
do not have here a situation similar to those in Venetianaire and Feathercombs, Inc., in
both of which we rejected “fair use” defenses, wherein an assertedly descriptive use was
found to have been in a trademark sense. It is significant that HW did not use ‘Safari’ alone
on its shoes, as it would doubtless have done if confusion had been intended.
We thus hold that the district court was correct in dismissing the complaint.
IV.
We find much greater difficulty in the court’s broad invalidation of A&F’s
trademark registrations. Section 37 of the Lanham Act, 15 U.S.C. § 1119, provides
authority for the court to cancel those registrations of any party to an action involving a
registered mark. The cases cited above establish that when a term becomes the generic
name of the product to which it is applied, grounds for cancellation exist. . . . [C]ancellation may be decreed at any time if the registered mark has become “the common descripttive name of an article or substance.” The whole of Registration No. 358,781 thus was
properly canceled. With respect to Registration No. 703,279 only a part has become
generic and cancellation on that ground should be correspondingly limited. . . .
. . . The generic term for A&F’s ‘safari cloth Bermuda shorts,’ for example, is ‘Bermuda shorts,’ not ‘safari’; indeed one would suppose this garment to be almost ideally unsuited for the forest or the jungle and there is no evidence that it has entered into the family
for which ‘Safari’ has become a generic adjective. The same analysis holds for luggage,
portable grills, and the rest of the suburban paraphernalia, from swimtrunks and raincoats
to belts and scarves, included in these registrations.
So much of the judgment as dismissed the complaint is affirmed; so much of the
judgment as directed cancellation of the registrations is affirmed in part and reversed in
part, and the cause is remanded for the entry of a new judgment consistent with this
opinion. No costs.

Zatarain’s, Inc. v. Oak Grove Smokehouse, Inc.
698 F.2d 786 (5th Cir. 1983)

GOLDBERG, Circuit Judge.
This appeal of a trademark dispute presents us with a menu of edible delights
sure to tempt connoisseurs of fish and fowl alike. At issue is the alleged infringement
of two trademarks, “Fish-Fri” and “Chick-Fri,” held by appellant Zatarain’s, Inc.
(“Zatarain’s”). . . .
Throughout this litigation, Zatarain’s has maintained that the term “Fish-Fri” is a
suggestive mark automatically protected from infringing uses by virtue of its registration
in 1962. Oak Grove and Visko’s assert that “fish fry” is a generic term identifying a class
of foodstuffs used to fry fish; alternatively, Oak Grove and Visko’s argue that “fish fry” is
merely descriptive of the characteristics of the product. The district court found that “FishFri” was a descriptive term identifying a function of the product being sold. Having

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reviewed this finding under the appropriate “clearly erroneous” standard, we affirm.
We are mindful that “[t]he concept of descriptiveness must be construed rather
broadly.” Whenever a word or phrase conveys an immediate idea of the qualities,
characteristics, effect, purpose, or ingredients of a product or service, it is classified as
descriptive and cannot be claimed as an exclusive trademark. Courts and commentators
have formulated a number of tests to be used in classifying a mark as descriptive.
A suitable starting place is the dictionary, for “[t]he dictionary definition of the
word is an appropriate and relevant indication ‘of the ordinary significance and meaning
of words’ to the public.” Webster’s Third New International Dictionary 858 (1966) lists
the following definitions for the term “fish fry”: “1. a picnic at which fish are caught,
fried, and eaten; . . . 2. fried fish.” Thus, the basic dictionary definitions of the term refer
to the preparation and consumption of fried fish. This is at least preliminary evidence
that the term “Fish-Fri” is descriptive of Zatarain’s product in the sense that the words
naturally direct attention to the purpose or function of the product.
The “imagination test” is a second standard used by the courts to identify descriptive terms. This test seeks to measure the relationship between the actual words of the
mark and the product to which they are applied. If a term “requires imagination, thought
and perception to reach a conclusion as to the nature of goods,” it is considered a suggestive term. Alternatively, a term is descriptive if standing alone it conveys information as
to the characteristics of the product. In this case, mere observation compels the conclusion
that a product branded “Fish-Fri” is a prepackaged coating or batter mix applied to fish
prior to cooking. The connection between this merchandise and its identifying terminology is so close and direct that even a consumer unfamiliar with the product would doubtless have an idea of its purpose or function. It simply does not require an exercise of the
imagination to deduce that “Fish-Fri” is used to fry fish. Accordingly, the term “Fish-Fri”
must be considered descriptive when examined under the “imagination test.”
A third test used by courts and commentators to classify descriptive marks is
“whether competitors would be likely to need the terms used in the trademark in describing
their products.” A descriptive term generally relates so closely and directly to a product or
service that other merchants marketing similar goods would find the term useful in
identifying their own goods. Common sense indicates that in this case merchants other than
Zatarain’s might find the term “fish fry” useful in describing their own particular batter
mixes. While Zatarain’s has argued strenuously that Visko’s and Oak Grove could have
chosen from dozens of other possible terms in naming their coating mix, we find this
position to be without merit. As this court has held, the fact that a term is not the only or
even the most common name for a product is not determinative, for there is no legal
foundation that a product can be described in only one fashion. There are many edible fish
in the sea, and as many ways to prepare them as there are varieties to be prepared. Even
piscatorial gastronomes would agree, however, that frying is a form of preparation accepted
virtually around the world, at restaurants starred and unstarred. The paucity of synonyms
for the words “fish” and “fry” suggests that a merchant whose batter mix is specially spiced
for frying fish is likely to find “fish fry” a useful term for describing his product.
A final barometer of the descriptiveness of a particular term examines the extent
to which a term actually has been used by others marketing a similar service or product.
This final test is closely related to the question whether competitors are likely to find a
mark useful in describing their products. As noted above, a number of companies other
than Zatarain’s have chosen the word combination “fish fry” to identify their batter
mixes. Arnaud’s product, “Oyster Shrimp and Fish Fry,” has been in competition with
Zatarain’s “Fish-Fri” for some ten to twenty years. When companies from A to Z, from

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Arnaud to Zatarain’s, select the same term to describe their similar products, the term in
question is most likely a descriptive one.
The correct categorization of a given term is a factual issue; consequently, we
review the district court’s findings under the “clearly erroneous” standard of Fed.R.Civ.P.
52. The district court in this case found that Zatarain’s trademark “Fish-Fri” was
descriptive of the function of the product being sold. Having applied the four prevailing
tests of descriptiveness to the term “Fish-Fri,” we are convinced that the district court’s
judgment in this matter is not only not clearly erroneous, but clearly correct.
2. Secondary Meaning
Descriptive terms are not protectable by trademark absent a showing of secondary
meaning in the minds of the consuming public. To prevail in its trademark infringement
action, therefore, Zatarain’s must prove that its mark “Fish-Fri” has acquired a secondary
meaning and thus warrants trademark protection. The district court found that Zatarain’s
evidence established a secondary meaning for the term “Fish-Fri” in the New Orleans
area. We affirm.
The existence of secondary meaning presents a question for the trier of fact, and a
district court’s finding on the issue will not be disturbed unless clearly erroneous. The
burden of proof rests with the party seeking to establish legal protection for the mark—
the plaintiff in an infringement suit. The evidentiary burden necessary to establish
secondary meaning for a descriptive term is substantial.
In assessing a claim of secondary meaning, the major inquiry is the consumer’s
attitude toward the mark. The mark must denote to the consumer “a single thing coming
from a single source,” to support a finding of secondary meaning. Both direct and
circumstantial evidence may be relevant and persuasive on the issue.
Factors such as amount and manner of advertising, volume of sales, and length and
manner of use may serve as circumstantial evidence relevant to the issue of secondary meaning. While none of these factors alone will prove secondary meaning, in combination they
may establish the necessary link in the minds of consumers between a product and its source.
It must be remembered, however, that “the question is not the extent of the promotional
efforts, but their effectiveness in altering the meaning of [the term] to the consuming public.”
Since 1950, Zatarain’s and its predecessor have continuously used the term “FishFri” to identify this particular batter mix. Through the expenditure of over $400,000 for
advertising during the period from 1976 through 1981, Zatarain’s has promoted its name
and its product to the buying public. Sales of twelve-ounce boxes of “Fish-Fri” increased
from 37,265 cases in 1969 to 59,439 cases in 1979. From 1964 through 1979, Zatarain’s
sold a total of 916,385 cases of “Fish-Fri.” The district court considered this circumstantial
evidence of secondary meaning to weigh heavily in Zatarain’s favor.
In addition to these circumstantial factors, Zatarain’s introduced at trial two
surveys conducted by its expert witness, Allen Rosenzweig. In one survey, telephone
interviewers questioned 100 women in the New Orleans area who fry fish or other
seafood three or more times per month. Of the women surveyed, twenty-three percent
specified Zatarain’s “Fish-Fri” as a product they “would buy at the grocery to use as a
coating” or a “product on the market that is especially made for frying fish.” In a similar
survey conducted in person at a New Orleans area mall, twenty-eight of the 100
respondents answered “Zatarain’s ‘Fish-Fri’” to the same questions.
The authorities are in agreement that survey evidence is the most direct and persuasive way of establishing secondary meaning. The district court believed that the survey
evidence produced by Zatarain’s, when coupled with the circumstantial evidence of

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advertising and usage, tipped the scales in favor of a finding of secondary meaning. Were
we considering the question of secondary meaning de novo, we might reach a different
conclusion than did the district court, for the issue is close. Mindful, however, that there is
evidence in the record to support the finding below, we cannot say that the district court’s
conclusion was clearly erroneous. Accordingly, the finding of secondary meaning in the
New Orleans area for Zatarain’s descriptive term “Fish-Fri” must be affirmed. . . .
••••••••••
Note: The Spectrum of Distinctiveness
As Abercrombie explains, in order for a mark to be registrable, it must be
distinctive. It lays out four categories of marks, from strongest to weakest. Only the first
two are inherently distinctive.
1.) Fanciful or arbitrary marks are protectable. Fanciful marks are invented words such
as Kodak or Pantene. (This category can also include obsolete or scientific terms that are
unfamiliar to the ordinary consumer.) Arbitrary marks are existing words or names that
have no relationship to the product, such as “Apple” for computers, or “Starbucks” for
coffee. (Starbuck was the mate on the Pequod, the whaler in the novel Moby Dick.)
2.) Suggestive marks are also protectable. They suggest—but do not directly describe—
a quality or characteristic of the underlying product. Connecting the mark with the
product requires some cognitive or imaginative effort. Examples of suggestive marks
provided by the PTO are “Quick N’ Neat” for piecrust (do you agree?) and “Glance-ADay” for calendars.
3.) Descriptive marks are not protectable unless they acquire distinctiveness, because
granting exclusive rights over mere descriptions would impede the ability of others to
describe similar items. Building upon the PTO’s examples above, “Flaky Round Piecrust”
for piecrust or “365-Day Calendar” for calendars would be merely descriptive. As you
may gather from these examples, however, the line between suggestive and descriptive
can be difficult to draw. Zatarain’s usefully lays out some guidelines for doing so.
A descriptive mark can be eligible for protection if it acquires distinctiveness
through “secondary meaning.” This occurs when the consuming public connects the
mark with the source of the product, rather than simply with the product itself. An
example of a descriptive mark that has acquired secondary meaning is “Holiday Inn.”
While merely descriptive marks are not eligible for registration on the main
trademark register, which is called the “Principal Register,” they can be registered on the
“Supplemental Register” if they are used in commerce and capable of acquiring
distinctiveness. Unlike the Principal Register, the Supplemental Register does not
convey the presumption of validity, constructive notice of ownership, or right to enjoin
others from using the mark. However, it does offer actual notice and the right to use the
® symbol, and prevent later registration of confusingly similar marks. The PTO’s normal
practice is to assume that marks gain secondary meaning after five years on the
Supplemental Register, at which point they become eligible for the Principal Register.
4.) Generic terms for products are never registrable under the Lanham Act. The public
retains the right to use these basic terms for goods and services. “Apple” for apples or
“Hammer” for hammers would be generic. Over time, some arbitrary marks become so
widely used to describe particular products that they become generic words (this is
referred to as genericity or genericide)—examples include “Escalator” and “THERMOS.”
5.) In June 2020, the Supreme Court decided USPTO v. Booking.com. Before this case,

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the PTO and courts had followed the general rule that the combination of a generic word
and “.com” is still generic: “mattress.com” and “lawyers.com” were just as generic as
“mattress” and “lawyers” when used in connection with mattresses and legal services.
The Supreme Court rejected this per se rule, which had led the PTO to refuse registration
for “booking.com” because it was generic for online hotel-reservation services. As a
result, “booking.com” – a composite of two generic terms, “booking” and “.com” – could
be descriptive, and protectable with acquired distinctiveness. The Court reasoned that an
unyielding rule that disregards consumer perception is incompatible with the principles
of trademark law. The protectability of “generic.com” turns on its meaning to consumers:
“While we reject the rule proffered by the PTO that ‘generic.com’ terms are generic
names, we do not embrace a rule automatically classifying such terms as nongeneric.
Whether any given ‘generic.com’ term is generic, we hold, depends on whether
consumers in fact perceive that term as the name of a class or, instead, as a term capable
of distinguishing among members of the class.” The Court distinguished “generic.com”
from “generic company,” and the rule that adding “company” to a generic term does not
confer trademark eligibility. Adding “.com” to a generic term was different, the Court
explained, because only one entity can occupy a particular Internet domain name at a
time. Therefore, “generic.com” could “convey to consumers a source-identifying
characteristic: an association with a particular website.”

P ROBLEM 5-1
1.) Go into your kitchen or bathroom and do a “trademark audit.” List at least
10 products and classify them according to the four categories above. [Those who
do not have at least 10 products in their home may be reported to the authorities
for insufficient consumerism.]
2.) Find a product—in or out of your house—that a.) has the ® symbol indicating
a registered mark and b.) seems descriptive. Go to the USPTO Trademark Search
Page http://tmsearch.uspto.gov/ (The site is not that user-friendly, but repays
with interest the time spent mastering it. Hint: click the TSDR button and the
“Documents” tab to see the details.) Did the PTO agree with you? How was the
mark registered?
3.) Are the following terms generic? Google? Rollerblades? (As in “I need to buy
some new Rollerblades before I start practicing law in L.A.”) “Scotch tape” (As
in “Do you have any Scotch Tape? I need to wrap my Mother’s Day present.”)
Kleenex? Purell? Is Uber generic for all ride share services?
••••••••••
Note: Survey Evidence in Trademark Cases
Consumer perception is at the heart of trademark law. The cases you’re currently
reading focus on whether consumers will see a term or product feature as a distinctive
“source-identifier.” Subsequent chapters will ask the questions: Is there a likelihood of
confusion? Will the defendant’s mark blur the distinctiveness of a famous mark or tarnish
its reputation? Did misleading advertisements materially affect purchasing decisions?

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The answers to all of these lies in the mind of the relevant purchaser.
So how do we peer into the consumer’s mind? One way is through surveys. You
just saw an example in Zatarain’s, where survey evidence was used to suggest that “FishFri” had obtained secondary meaning in the New Orleans area. And you’ll see a discussion
of surveys in upcoming cases involving Levi’s jeans, Starbucks, and Papa John’s. Trademark litigants hire experts to design their surveys, and the methodology is contentious—
parties employ different approaches that yield divergent results, and courts may disregard
survey evidence on grounds of bias or other flaws, both because of the initial survey
design and because of problems in the way the survey was conducted.
Compare the following methods for assessing whether “Teflon” is a generic term
for non-stick coating. (These examples are based on the opposing surveys in E. I. DuPont
de Nemours & Co. v. Yoshida International, Inc. (E.D.N.Y. 1975), the case holding that
“Teflon” was not generic, and was infringed by “Eflon” for a nylon zipper. They have
been simplified for purposes of comparison.) The first example uses the “Thermos”
method from American Thermos Products Co. v. Aladdin Industries, Inc. (2d Cir. 1963)
(holding that “thermos” in lower-case was generic for vacuum-insulated containers, but
preserving trademark rights in capitalized “Thermos”). The second uses what became
called the “Teflon” method after the DuPont court endorsed its approach.
#1

The “Thermos” survey method
Respondents (in the actual case, the group conducting the survey believed the
relevant group was “adult women”) are asked: “Are you familiar with substances
that manufacturers sometimes apply to the surfaces of certain products in order
to prevent things from sticking to them?” 90% say yes.
• Those who answered “yes” are then asked: “What name or names are those
substances called?” Over 80% say “Teflon.” They are also asked: “What name
or names would you use to describe those substances to a store clerk or friend?”
Over 70% say “Teflon.”
The defendant argues that this shows “Teflon” is generic.
#2

•

The “Teflon” survey method
Respondents are first given this brief introduction to the difference between
trademarks and generic terms: “By brand name, I mean a word like Chevrolet
which is made by one company; by common name, I mean a word like automobile which is made by a number of different companies.”
• Respondents are then asked whether a range of eight terms, including “Teflon,”
is a brand name or a common name, with the option of answering “don’t know.”
Here are the results (the remainder in each category answered “don’t know”).
The plaintiff argues that the numbers below show “Teflon” is not generic.

•

NAME

BRAND/%

COMMON/%

STP
THERMOS
MARGARINE
TEFLON
JELLO
REFRIGERATOR
ASPIRIN
COKE

90
51
9
68
75
6
13
76

5
46
91
31
25
94
86
24

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Both of these methods are accepted by courts, though the “Teflon” format is more
widely accepted. See McCarthy on Trademarks and Unfair Competition § 12:16. (Of
course, litigants will customize the general methodology to the facts at hand.) Which
approach do you think is more persuasive in answering the key question in genericity
cases: whether, in the mind of the consumer, the primary significance of the mark is the
producer, or the underlying product itself? Look at the “Thermos” questions—if I walk
into Bed, Bath and Beyond and ask for “Teflon” pans, does that tell you anything about
whether I’m referring to DuPont’s brand, or to non-stick coating generally? If you’re
representing the owner of an especially famous mark, what concerns might you have
about a “Thermos” survey? As for the “Teflon” survey, the DuPont court opined that “the
responses of the survey reveal that the public is quite good at sorting out brand names
from common names.” Do you agree?
Returning to one of the questions in Problem 5-1, the Ninth Circuit recently confirmed that “Google” is not generic for internet search engines. Elliott v. Google (9th Cir.
2017). In that case, Elliott (the challenger to the “Google” mark) used a “Thermos” survey,
while Google conducted a “Teflon” survey. (Why? Do you agree with that tactical judgment
by the lawyers?) The “Thermos” survey asked: “If you were going to ask a friend to search
for something on the Internet, what word or phrase would you use to tell him/her what you
want him/her to do?” Over half of the respondents answered by using “google” as a verb,
and Elliott argued that this showed “Google” was generic, on the theory that verb use constitutes generic use. (Do you agree? The court did not, and further found that this approach
failed to link the mark to the relevant good or service—“Google” for “internet search
engines.”) In Google’s “Teflon” survey, the majority of respondents classified “Refrigerator,” “Margarine,” “Browser,” and “Website” as common names, while the following
percentages suggested strong brand recognition for “Google” and other familiar marks:
NAME

BRAND/%

COMMON/%

AMAZON
GOOGLE
YAHOO!
COKE

96.51
93.77
93.52
89.53

2.99
5.25
5.99
6.73

Do you find these results persuasive? In order to answer, would you need to know what
percentage of consumers use only Google as a search engine, or would that be irrelevant?
How would you design a survey to determine whether “Google” is generic? The goal of
survey evidence is to replace the judge or jury’s subjective hunches about trademarks
with empirical evidence that goes to the source-identification function of the mark. Do
you think that goal can ever be fully achieved?

••••••••••
Abercrombie and Zatarain’s focused on verbal marks. The cases that follow focus
on the protectability of non-verbal marks such as color and trade dress (generally, product
packaging or design), where functionality becomes an important consideration.

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Qualitex Co. v. Jacobson Products Co., Inc.

514 U.S. 159 (1995)

Justice BREYER delivered the opinion of the Court.
The question in this case is whether the Lanham Trademark Act of 1946 permits
the registration of a trademark that consists, purely and simply, of a color. We conclude
that, sometimes, a color will meet ordinary legal trademark requirements. And, when it
does so, no special legal rule prevents color alone from serving as a trademark.
I.
The case before us grows out of petitioner Qualitex Company’s use (since the 1950’s)
of a special shade of green-gold color on the pads that it makes and sells to dry cleaning
firms for use on dry cleaning presses. In 1989 respondent Jacobson Products (a Qualitex
rival) began to sell its own press pads to dry cleaning firms; and it colored those pads a
similar green-gold. In 1991 Qualitex registered the special green-gold color on press pads
with the Patent and Trademark Office as a trademark. Qualitex subsequently added a trademark infringement count, 15 U.S.C. § 1114(1), to an unfair competition claim, § 1125(a), in
a lawsuit it had already filed challenging Jacobson’s use of the green-gold color.
Qualitex won the lawsuit in the District Court. But, the Court of Appeals for the
Ninth Circuit set aside the judgment in Qualitex’s favor on the trademark infringement
claim because, in that Circuit’s view, the Lanham Act does not permit Qualitex, or anyone
else, to register “color alone” as a trademark.
The courts of appeals have differed as to whether or not the law recognizes the use
of color alone as a trademark. Therefore, this Court granted certiorari. We now hold that
there is no rule absolutely barring the use of color alone, and we reverse the judgment of
the Ninth Circuit.
II.
The Lanham Act gives a seller or producer the exclusive right to “register” a
trademark, 15 U.S.C. § 1052, and to prevent his or her competitors from using that trademark, § 1114(1). Both the language of the Act and the basic underlying principles of trademark law would seem to include color within the universe of things that can qualify as a
trademark. The language of the Lanham Act describes that universe in the broadest of terms.
It says that trademarks “includ[e] any word, name, symbol, or device, or any combination
thereof.” § 1127. Since human beings might use as a “symbol” or “device” almost anything
at all that is capable of carrying meaning, this language, read literally, is not restrictive. The
courts and the Patent and Trademark Office have authorized for use as a mark a particular
shape (of a Coca-Cola bottle), a particular sound (of NBC’s three chimes), and even a particular scent (of plumeria blossoms on sewing thread). If a shape, a sound, and a fragrance
can act as symbols why, one might ask, can a color not do the same?
A color is also capable of satisfying the more important part of the statutory definition of a trademark, which requires that a person “us[e]” or “inten[d] to use” the mark
“to identify and distinguish his or her goods, including a unique product,
from those manufactured or sold by others and to indicate the source of
the goods, even if that source is unknown.” 15 U.S.C. § 1127.
True, a product’s color is unlike “fanciful,” “arbitrary,” or “suggestive” words or
designs, which almost automatically tell a customer that they refer to a brand. Abercrombie & Fitch v. Hunting World (Friendly, J.). The imaginary word “Suntost,” or the

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words “Suntost Marmalade,” on a jar of orange jam immediately would signal a brand or
a product “source”; the jam’s orange color does not do so. But, over time, customers may
come to treat a particular color on a product or its packaging (say, a color that in context
seems unusual, such as pink on a firm’s insulating material or red on the head of a large
industrial bolt) as signifying a brand. And, if so, that color would have come to identify
and distinguish the goods—i.e. “to indicate” their “source”—much in the way that
descriptive words on a product (say, “Trim” on nail clippers or “Car-Freshner” on
deodorizer) can come to indicate a product’s origin. In this circumstance, trademark law
says that the word (e.g., “Trim”), although not inherently distinctive, has developed
“secondary meaning.” Again, one might ask, if trademark law permits a descriptive word
with secondary meaning to act as a mark, why would it not permit a color, under similar
circumstances, to do the same?
We cannot find in the basic objectives of trademark law any obvious theoretical
objection to the use of color alone as a trademark, where that color has attained “secondary
meaning” and therefore identifies and distinguishes a particular brand (and thus indicates
its “source”). In principle, trademark law, by preventing others from copying a sourceidentifying mark, “reduce[s] the customer’s costs of shopping and making purchasing
decisions” for it quickly and easily assures a potential customer that this item—the item
with this mark—is made by the same producer as other similarly marked items that he or
she liked (or disliked) in the past. At the same time, the law helps assure a producer that
it (and not an imitating competitor) will reap the financial, reputation-related rewards
associated with a desirable product. The law thereby “encourage[s] the production of
quality products,” and simultaneously discourages those who hope to sell inferior
products by capitalizing on a consumer’s inability quickly to evaluate the quality of an
item offered for sale. It is the source-distinguishing ability of a mark—not its ontological
status as color, shape, fragrance, word, or sign—that permits it to serve these basic
purposes. See Landes & Posner, Trademark Law: An Economic Perspective, 30 J. Law &
Econ. 265, 290 (1987). And, for that reason, it is difficult to find, in basic trademark
objectives, a reason to disqualify absolutely the use of a color as a mark.
Neither can we find a principled objection to the use of color as a mark in the
important “functionality” doctrine of trademark law. The functionality doctrine prevents
trademark law, which seeks to promote competition by protecting a firm’s reputation, from
instead inhibiting legitimate competition by allowing a producer to control a useful product
feature. It is the province of patent law, not trademark law, to encourage invention by
granting inventors a monopoly over new product designs or functions for a limited time,
35 U.S.C. §§ 154, 173, after which competitors are free to use the innovation. If a product’s
functional features could be used as trademarks, however, a monopoly over such features
could be obtained without regard to whether they qualify as patents and could be extended
forever (because trademarks may be renewed in perpetuity). See Inwood Laboratories, Inc.
(White, J., concurring in result) (“A functional characteristic is ‘an important ingredient in
the commercial success of the product,’ and, after expiration of a patent, it is no more the
property of the originator than the product itself”). Functionality doctrine therefore would
require, to take an imaginary example, that even if customers have come to identify the
special illumination-enhancing shape of a new patented light bulb with a particular
manufacturer, the manufacturer may not use that shape as a trademark, for doing so, after
the patent had expired, would impede competition—not by protecting the reputation of the
original bulb maker, but by frustrating competitors’ legitimate efforts to produce an
equivalent illumination-enhancing bulb (trademark law cannot be used to extend
monopoly over “pillow” shape of shredded wheat biscuit after the patent for that shape had

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expired). This Court consequently has explained that, “[i]n general terms, a product feature
is functional,” and cannot serve as a trademark, “if it is essential to the use or purpose of
the article or if it affects the cost or quality of the article,” that is, if exclusive use of the
feature would put competitors at a significant non-reputation-related disadvantage.
Although sometimes color plays an important role (unrelated to source identification) in
making a product more desirable, sometimes it does not. And, this latter fact—the fact that
sometimes color is not essential to a product’s use or purpose and does not affect cost or
quality—indicates that the doctrine of “functionality” does not create an absolute bar to the
use of color alone as a mark.
It would seem, then, that color alone, at least sometimes, can meet the basic legal
requirements for use as a trademark. It can act as a symbol that distinguishes a firm’s
goods and identifies their source, without serving any other significant function. See U.S.
Dept. of Commerce, Patent and Trademark Office, Trademark Manual of Examining
Procedure (approving trademark registration of color alone where it “has become
distinctive of the applicant’s goods in commerce,” provided that “there is [no]
competitive need for colors to remain available in the industry” and the color is not
“functional”). Indeed, the District Court, in this case, entered findings (accepted by the
Ninth Circuit) that show Qualitex’s green-gold press pad color has met these
requirements. The green-gold color acts as a symbol. Having developed secondary
meaning (for customers identified the green-gold color as Qualitex’s), it identifies the
press pads’ source. And, the green-gold color serves no other function. (Although it is
important to use some color on press pads to avoid noticeable stains, the court found “no
competitive need in the press pad industry for the green-gold color, since other colors are
equally usable.”) Accordingly, unless there is some special reason that convincingly militates against the use of color alone as a trademark, trademark law would protect
Qualitex’s use of the green-gold color on its press pads.
III.
Respondent Jacobson Products says that there are four special reasons why the law
should forbid the use of color alone as a trademark. We shall explain, in turn, why we,
ultimately, find them unpersuasive.
First, Jacobson says that, if the law permits the use of color as a trademark, it will
produce uncertainty and unresolvable court disputes about what shades of a color a
competitor may lawfully use. Because lighting (morning sun, twilight mist) will affect
perceptions of protected color, competitors and courts will suffer from “shade confusion”
as they try to decide whether use of a similar color on a similar product does, or does
not, confuse customers and thereby infringe a trademark. Jacobson adds that the “shade
confusion” problem is “more difficult” and “far different from” the “determination of the
similarity of words or symbols.”
We do not believe, however, that color, in this respect, is special. Courts
traditionally decide quite difficult questions about whether two words or phrases or symbols are sufficiently similar, in context, to confuse buyers. They have had to compare,
for example, such words as “Bonamine” and “Dramamine” (motion-sickness remedies);
“Huggies” and “Dougies” (diapers); “Cheracol” and “Syrocol” (cough syrup);
“Cyclone” and “Tornado” (wire fences); and “Mattres” and “1–800–Mattres” (mattress
franchisor telephone numbers). Legal standards exist to guide courts in making such
comparisons. We do not see why courts could not apply those standards to a color, replicating, if necessary, lighting conditions under which a colored product is normally sold.
Indeed, courts already have done so in cases where a trademark consists of a color plus

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a design, i.e., a colored symbol such as a gold stripe (around a sewer pipe), a yellow
strand of wire rope, or a “brilliant yellow” band (on ampules).
Second, Jacobson argues, as have others, that colors are in limited supply. Jacobson
claims that, if one of many competitors can appropriate a particular color for use as a
trademark, and each competitor then tries to do the same, the supply of colors will soon be
depleted. Put in its strongest form, this argument would concede that “[h]undreds of color
pigments are manufactured and thousands of colors can be obtained by mixing.” But, it
would add that, in the context of a particular product, only some colors are usable. By the
time one discards colors that, say, for reasons of customer appeal, are not usable, and adds
the shades that competitors cannot use lest they risk infringing a similar, registered shade,
then one is left with only a handful of possible colors. And, under these circumstances, to
permit one, or a few, producers to use colors as trademarks will “deplete” the supply of
usable colors to the point where a competitor’s inability to find a suitable color will put
that competitor at a significant disadvantage.
This argument is unpersuasive, however, largely because it relies on an occasional
problem to justify a blanket prohibition. When a color serves as a mark, normally alternative colors will likely be available for similar use by others. See, e.g., Owens-Corning
(pink insulation). Moreover, if that is not so—if a “color depletion” or “color scarcity”
problem does arise—the trademark doctrine of “functionality” normally would seem available to prevent the anticompetitive consequences that Jacobson’s argument posits, thereby
minimizing that argument’s practical force.
The functionality doctrine, as we have said, forbids the use of a product’s feature
as a trademark where doing so will put a competitor at a significant disadvantage because
the feature is “essential to the use or purpose of the article” or “affects [its] cost or
quality.” Inwood. The functionality doctrine thus protects competitors against a disadvantage (unrelated to recognition or reputation) that trademark protection might
otherwise impose, namely their inability reasonably to replicate important nonreputation-related product features.
For example, this Court has written that competitors might be free to copy the color
of a medical pill where that color serves to identify the kind of medication (e.g., a type
of blood medicine) in addition to its source. (“[S]ome patients commingle medications
in a container and rely on color to differentiate one from another”); see also J. Ginsburg,
D. Goldberg, & A. Greenbaum, Trademark and Unfair Competition Law (noting that
drug color cases “have more to do with public health policy” regarding generic drug
substitution “than with trademark law”). And, the federal courts have demonstrated that
they can apply this doctrine in a careful and reasoned manner, with sensitivity to the
effect on competition. Although we need not comment on the merits of specific cases,
we note that lower courts have permitted competitors to copy the green color of farm
machinery (because customers wanted their farm equipment to match) and have barred
the use of black as a trademark on outboard boat motors (because black has the special
functional attributes of decreasing the apparent size of the motor and ensuring
compatibility with many different boat colors). See Deere & Co. v. Farmhand, Inc.;
Brunswick Corp. v. British Seagull Ltd.; see also Nor-Am Chemical v. O.M. Scott & Sons
Co. (blue color of fertilizer held functional because it indicated the presence of nitrogen).
The Restatement (Third) of Unfair Competition adds that, if a design’s “aesthetic value”
lies in its ability to “confe[r] a significant benefit that cannot practically be duplicated by
the use of alternative designs,” then the design is “functional.” The “ultimate test of
aesthetic functionality,” it explains, “is whether the recognition of trademark rights
would significantly hinder competition.”

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The upshot is that, where a color serves a significant nontrademark function—whether
to distinguish a heart pill from a digestive medicine or to satisfy the “noble instinct for giving
the right touch of beauty to common and necessary things,” G. K. Chesterton, Simplicity and
Tolstoy 61 (1912)—courts will examine whether its use as a mark would permit one
competitor (or a group) to interfere with legitimate (nontrademark-related) competition
through actual or potential exclusive use of an important product ingredient. That examination should not discourage firms from creating aesthetically pleasing mark designs, for it is
open to their competitors to do the same. But, ordinarily, it should prevent the anticompetitive
consequences of Jacobson’s hypothetical “color depletion” argument, when, and if, the
circumstances of a particular case threaten “color depletion.”
Third, Jacobson points to many older cases—including Supreme Court cases—in
support of its position. In 1878, this Court described the common-law definition of
trademark rather broadly to “consist of a name, symbol, figure, letter, form, or device, if
adopted and used by a manufacturer or merchant in order to designate the goods he
manufactures or sells to distinguish the same from those manufactured or sold by
another.” Yet, in interpreting the Trademark Acts of 1881 and 1905, which retained that
common-law definition, the Court questioned “[w]hether mere color can constitute a
valid trade-mark,” and suggested that the “product including the coloring matter is free
to all who make it.” Even though these statements amounted to dicta, lower courts interpreted them as forbidding protection for color alone.
These Supreme Court cases, however, interpreted trademark law as it existed
before 1946, when Congress enacted the Lanham Act. The Lanham Act significantly
changed and liberalized the common law to “dispense with mere technical prohibitions,”
S.Rep. No. 1333, 79th Cong., 2d Sess., 3 (1946), most notably, by permitting trademark
registration of descriptive words (say, “U-Build-It” model airplanes) where they had
acquired “secondary meaning.” See Abercrombie & Fitch Co. (Friendly, J.). The Lanham
Act extended protection to descriptive marks by making clear that (with certain explicit
exceptions not relevant here)
“nothing . . . shall prevent the registration of a mark used by the
applicant which has become distinctive of the applicant’s goods in
commerce.” 15 U.S.C. § 1052(f).
This language permits an ordinary word, normally used for a nontrademark
purpose (e.g., description), to act as a trademark where it has gained “secondary
meaning.” Its logic would appear to apply to color as well. . . .
Fourth, Jacobson argues that there is no need to permit color alone to function as a
trademark because a firm already may use color as part of a trademark, say, as a colored
circle or colored letter or colored word, and may rely upon “trade dress” protection, under
§ 43(a) of the Lanham Act, if a competitor copies its color and thereby causes consumer
confusion regarding the overall appearance of the competing products or their packaging,
see 15 U.S.C. § 1125(a). The first part of this argument begs the question. One can understand why a firm might find it difficult to place a usable symbol or word on a product (say,
a large industrial bolt that customers normally see from a distance); and, in such instances,
a firm might want to use color, pure and simple, instead of color as part of a design. Neither
is the second portion of the argument convincing. Trademark law helps the holder of a
mark in many ways that “trade dress” protection does not. See 15 U.S.C. § 1124 (ability to
prevent importation of confusingly similar goods); § 1072 (constructive notice of ownership); § 1065 (incontestable status); § 1057(b) (prima facie evidence of validity and ownership). Thus, one can easily find reasons why the law might provide trademark protection
in addition to trade dress protection.

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IV.
Having determined that a color may sometimes meet the basic legal requirements
for use as a trademark and that respondent Jacobson’s arguments do not justify a special
legal rule preventing color alone from serving as a trademark (and, in light of the District
Court’s here undisputed findings that Qualitex’s use of the green-gold color on its press
pads meets the basic trademark requirements), we conclude that the Ninth Circuit erred
in barring Qualitex’s use of color as a trademark. For these reasons, the judgment of the
Ninth Circuit is
Reversed.

Wal-Mart Stores, Inc. v. Samara Brothers, Inc.
529 U.S. 205 (2000)

Justice SCALIA delivered the opinion of the Court.
In this case, we decide under what circumstances a product’s design is distinctive, and
therefore protectible, in an action for infringement of unregistered trade dress under § 43(a)
of the Trademark Act of 1946 (Lanham Act), 60 Stat. 441, as amended, 15 U.S.C. § 1125(a).
I
Respondent Samara Brothers, Inc., designs and manufactures children’s clothing.
Its primary product is a line of spring/summer one-piece seersucker outfits decorated
with appliqués of hearts, flowers, fruits, and the like.
A number of chain stores, including JCPenney, sell
this line of clothing under contract with Samara.
Petitioner Wal-Mart Stores, Inc., is one of the
nation’s best known retailers, selling among other
things children’s clothing. In 1995, Wal-Mart contracted with one of its suppliers, Judy-Philippine, Inc.,
to manufacture a line of children’s outfits for sale in the
1996 spring/summer season. Wal-Mart sent JudyPhilippine photographs of a number of garments from
Samara’s line, on which Judy-Philippine’s garments
were to be based; Judy-Philippine duly copied, with
only minor modifications, 16 of Samara’s garments,
many of which contained copyrighted elements. In
1996, Wal-Mart briskly sold the so-called knockoffs,
generating more than $1.15 million in gross profits. . . .
After sending cease-and-desist letters, Samara A Samara Brothers outfit purchased
brought this action in the United States District Court from JC Penney
for the Southern District of New York against Wal-Mart, Judy-Philippine, Kmart, Caldor,
Hills, and Goody’s for copyright infringement under federal law, consumer fraud and
unfair competition under New York law, and—most relevant for our purposes—infringement of unregistered trade dress under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a).
All of the defendants except Wal-Mart settled before trial.
After a weeklong trial, the jury found in favor of Samara on all of its claims. WalMart then renewed a motion for judgment as a matter of law, claiming, inter alia, that there
was insufficient evidence to support a conclusion that Samara’s clothing designs could be

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legally protected as distinctive trade dress for purposes of § 43(a). The District Court
denied the motion, and awarded Samara damages, interest, costs, and fees totaling almost
$1.6 million, together with injunctive relief. The Second Circuit affirmed the denial of the
motion for judgment as a matter of law, and we granted certiorari.
II
. . . In addition to protecting registered marks, the Lanham Act, in § 43(a), gives a
producer a cause of action for the use by any person of “any word, term, name, symbol,
or device, or any combination thereof . . . which . . . is likely to cause confusion . . . as to
the origin, sponsorship, or approval of his or her goods. . . .” 15 U.S.C. § 1125(a). It is
the latter provision that is at issue in this case.
The breadth of the definition of marks registrable under § 2, and of the confusionproducing elements recited as actionable by § 43(a), has been held to embrace not just
word marks, such as “Nike,” and symbol marks, such as Nike’s “swoosh” symbol, but
also “trade dress”—a category that originally included only the packaging, or “dressing,”
of a product, but in recent years has been expanded by many courts of appeals to
encompass the design of a product. See, e.g., Ashley Furniture Industries, Inc. v.
Sangiacomo (bedroom furniture); Knitwaves, Inc. v. Lollytogs (sweaters); Stuart Hall Co.,
Inc. v. Ampad Corp. (notebooks). These courts have assumed, often without discussion,
that trade dress constitutes a “symbol” or “device” for purposes of the relevant sections,
and we conclude likewise. “Since human beings might use as a ‘symbol’ or ‘device’
almost anything at all that is capable of carrying meaning, this language, read literally, is
not restrictive.” Qualitex Co. v. Jacobson Products Co. This reading of § 2 and § 43(a) is
buttressed by a recently added subsection of § 43(a), § 43(a)(3), which refers specifically
to “civil action[s] for trade dress infringement under this chapter for trade dress not
registered on the principal register.” 15 U.S.C. A. § 1125(a)(3).
The text of § 43(a) provides little guidance as to the circumstances under which
unregistered trade dress may be protected. It does require that a producer show that the
allegedly infringing feature is not “functional,” see § 43(a)(3), and is likely to cause
confusion with the product for which protection is sought, see § 43(a)(1)(A), 15 U.S.C.
§ 1125(a)(1)(A). Nothing in § 43(a) explicitly requires a producer to show that its trade
dress is distinctive, but courts have universally imposed that requirement, since without
distinctiveness the trade dress would not “cause confusion . . . as to the origin,
sponsorship, or approval of [the] goods,” as the section requires. Distinctiveness is,
moreover, an explicit prerequisite for registration of trade dress under § 2, and “the
general principles qualifying a mark for registration under § 2 of the Lanham Act are for
the most part applicable in determining whether an unregistered mark is entitled to
protection under § 43(a).” Two Pesos, Inc. v. Taco Cabana, Inc.
In evaluating the distinctiveness of a mark under § 2 (and therefore, by analogy,
under § 43(a)), courts have held that a mark can be distinctive in one of two ways. First, a
mark is inherently distinctive if “[its] intrinsic nature serves to identify a particular source.”
In the context of word marks, courts have applied the now-classic test originally formulated
by Judge Friendly, in which word marks that are “arbitrary” (“Camel” cigarettes),
“fanciful” (“Kodak” film), or “suggestive” (“Tide” laundry detergent) are held to be
inherently distinctive. See Abercrombie & Fitch Co. v. Hunting World, Inc. Second, a mark
has acquired distinctiveness, even if it is not inherently distinctive, if it has developed
secondary meaning, which occurs when, “in the minds of the public, the primary
significance of a [mark] is to identify the source of the product rather than the product

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itself.” Inwood Laboratories, Inc. v. Ives Laboratories, Inc. (1982).*
The judicial differentiation between marks that are inherently distinctive and those
that have developed secondary meaning has solid foundation in the statute itself. Section
2 requires that registration be granted to any trademark “by which the goods of the
applicant may be distinguished from the goods of others”—subject to various limited
exceptions. 15 U.S.C. § 1052. It also provides, again with limited exceptions, that
“nothing in this chapter shall prevent the registration of a mark used by the applicant
which has become distinctive of the applicant’s goods in commerce”—that is, which is
not inherently distinctive but has become so only through secondary meaning. § 2(f), 15
U.S.C. § 1052(f). Nothing in § 2, however, demands the conclusion that every category
of mark necessarily includes some marks “by which the goods of the applicant may be
distinguished from the goods of others” without secondary meaning—that in every
category some marks are inherently distinctive.
Indeed, with respect to at least one category of mark—colors—we have held that
no mark can ever be inherently distinctive. See Qualitex. In Qualitex, petitioner manufactured and sold green-gold dry-cleaning press pads. After respondent began selling
pads of a similar color, petitioner brought suit under § 43(a), then added a claim under
§ 32 after obtaining registration for the color of its pads. We held that a color could be
protected as a trademark, but only upon a showing of secondary meaning. Reasoning by
analogy to the Abercrombie & Fitch test developed for word marks, we noted that a
product’s color is unlike a “fanciful,” “arbitrary,” or “suggestive” mark, since it does not
“almost automatically tell a customer that [it] refer[s] to a brand,” and does not “immediately . . . signal a brand or a product ‘source.’” However, we noted that, “over time,
customers may come to treat a particular color on a product or its packaging . . . as signifying a brand.” Because a color, like a “descriptive” word mark, could eventually
“come to indicate a product’s origin,” we concluded that it could be protected upon a
showing of secondary meaning.
It seems to us that design, like color, is not inherently distinctive. The attribution of
inherent distinctiveness to certain categories of word marks and product packaging
derives from the fact that the very purpose of attaching a particular word to a product, or
encasing it in a distinctive packaging, is most often to identify the source of the product.
Although the words and packaging can serve subsidiary functions—a suggestive word
mark (such as “Tide” for laundry detergent), for instance, may invoke positive
connotations in the consumer’s mind, and a garish form of packaging (such as Tide’s
squat, brightly decorated plastic bottles for its liquid laundry detergent) may attract an
otherwise indifferent consumer’s attention on a crowded store shelf—their predominant
function remains source identification. Consumers are therefore predisposed to regard
those symbols as indication of the producer, which is why such symbols “almost
automatically tell a customer that they refer to a brand,” and “immediately . . . signal a
brand or a product ‘source.’” And where it is not reasonable to assume consumer
predisposition to take an affixed word or packaging as indication of source—where, for
example, the affixed word is descriptive of the product (“Tasty” bread) or of a geographic
The phrase “secondary meaning” originally arose in the context of word marks, where it served to distinguish
the source-identifying meaning from the ordinary, or “primary,” meaning of the word. “Secondary meaning”
has since come to refer to the acquired, source-identifying meaning of a non-word mark as well. It is often a
misnomer in that context, since non-word marks ordinarily have no “primary” meaning. Clarity might well be
served by using the term “acquired meaning” in both the word-mark and the non-word-mark contexts—but
in this opinion we follow what has become the conventional terminology.
*

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origin (“Georgia” peaches)—inherent distinctiveness will not be found. That is why the
statute generally excludes, from those word marks that can be registered as inherently
distinctive, words that are “merely descriptive” of the goods. § 1052(e)(1), or “primarily
geographically descriptive of them,” § 1052(e). In the case of product design, as in the
case of color, we think consumer predisposition to equate the feature with the source does
not exist. Consumers are aware of the reality that, almost invariably, even the most
unusual of product designs—such as a cocktail shaker shaped like a penguin—is intended
not to identify the source, but to render the product itself more useful or more appealing.
The fact that product design almost invariably serves purposes other than source
identification not only renders inherent distinctiveness problematic; it also renders
application of an inherent-distinctiveness principle more harmful to other consumer
interests. Consumers should not be deprived of the benefits of competition with regard to
the utilitarian and esthetic purposes that product design ordinarily serves by a rule of law
that facilitates plausible threats of suit against new entrants based upon alleged inherent
distinctiveness. How easy it is to mount a plausible suit depends, of course, upon the clarity
of the test for inherent distinctiveness, and where product design is concerned we have
little confidence that a reasonably clear test can be devised. Respondent and the United
States as amicus curiae urge us to adopt for product design relevant portions of the test
formulated by the Court of Customs and Patent Appeals for product packaging in Seabrook
Foods v. Bar-Well Foods (1977). That opinion, in determining the inherent distinctiveness
of a product’s packaging, considered, among other things, “whether it was a ‘common’
basic shape or design, whether it was unique or unusual in a particular field, [and] whether
it was a mere refinement of a commonly-adopted and well-known form of ornamentation
for a particular class of goods viewed by the public as a dress or ornamentation for the
goods.” Such a test would rarely provide the basis for summary disposition of an
anticompetitive strike suit. Indeed, at oral argument, counsel for the United States quite
understandably would not give a definitive answer as to whether the test was met in this
very case, saying only that “[t]his is a very difficult case for that purpose.”
It is true, of course, that the person seeking to exclude new entrants would have to
establish the nonfunctionality of the design feature, see § 43(a)(3), 15 U.S.C. A.
§ 1125(a)(3)—a showing that may involve consideration of its esthetic appeal, see
Qualitex. Competition is deterred, however, not merely by successful suit but by the
plausible threat of successful suit, and given the unlikelihood of inherently sourceidentifying design, the game of allowing suit based upon alleged inherent distinctiveness
seems to us not worth the candle. That is especially so since the producer can ordinarily
obtain protection for a design that is inherently source identifying (if any such exists), but
that does not yet have secondary meaning, by securing a design patent or a copyright for
the design—as, indeed, respondent did for certain elements of the designs in this case. The
availability of these other protections greatly reduces any harm to the producer that might
ensue from our conclusion that a product design cannot be protected under § 43(a) without
a showing of secondary meaning.
Respondent contends that our decision in Two Pesos forecloses a conclusion that
product-design trade dress can never be inherently distinctive. In that case, we held that
the trade dress of a chain of Mexican restaurants, which the plaintiff described as “a
festive eating atmosphere having interior dining and patio areas decorated with artifacts,
bright colors, paintings and murals,” could be protected under § 43(a) without a showing
of secondary meaning. Two Pesos unquestionably establishes the legal principle that
trade dress can be inherently distinctive, but it does not establish that product-design
trade dress can be. Two Pesos is inapposite to our holding here because the trade dress at

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issue, the décor of a restaurant, seems to us not to constitute product design. It was either
product packaging—which, as we have discussed, normally is taken by the consumer to
indicate origin—or else some tertium quid that is akin to product packaging and has no
bearing on the present case.
Respondent replies that this manner of distinguishing Two Pesos will force courts to
draw difficult lines between product-design and product-packaging trade dress. There will
indeed be some hard cases at the margin: a classic glass Coca-Cola bottle, for instance, may
constitute packaging for those consumers who drink the Coke and then discard the bottle,
but may constitute the product itself for those consumers who are bottle collectors, or part
of the product itself for those consumers who buy Coke in the classic glass bottle, rather
than a can, because they think it more stylish to drink from the former. We believe, however,
that the frequency and the difficulty of having to distinguish between product design and
product packaging will be much less than the frequency and the difficulty of having to
decide when a product design is inherently distinctive. To the extent there are close cases,
we believe that courts should err on the side of caution and classify ambiguous trade dress
as product design, thereby requiring secondary meaning. The very closeness will suggest
the existence of relatively small utility in adopting an inherent-distinctiveness principle, and
relatively great consumer benefit in requiring a demonstration of secondary meaning. . . .
We hold that, in an action for infringement of unregistered trade dress under
§ 43(a) of the Lanham Act, a product’s design is distinctive, and therefore protectible,
only upon a showing of secondary meaning. The judgment of the Second Circuit is
reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Questions:
1.) Wal-Mart told its supplier to rip off this poor designer’s offerings. They did. They
profited. And the Supreme Court is fine with that? Why?
2.) The Supreme Court here sets up a different test for product design trade dress than
for product packaging trade dress. The former is registrable only on proof of secondary
meaning. Why?
3.) Why does the Supreme Court rule as it does in Wal-Mart? Is this not a classic example
of free-riding on the part of the defendants, once Samara has come up with an appealing
design? The Court says,
In the case of product design, as in the case of color, we think consumer
predisposition to equate the feature with the source does not exist.
Consumers are aware of the reality that, almost invariably, even the most
unusual of product designs—such as a cocktail shaker shaped like a
penguin—is intended not to identify the source, but to render the product
itself more useful or more appealing.
Do you agree? Is the court offering an empirical prediction? (“If surveyed, most
consumers would agree that most designs are not source identifying but rather serve to
make the product more appealing or useful.”) Or is it offering a per se rule designed to
facilitate imitation and competition—at least in the realms of color and design—in order
to drive prices down, even if consumers do regard the designs as source identifying?

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Jessica Litman, The Exclusive Right to Read

13 CARDOZO ARTS & ENT. L.J. 29 (1994)

Imagine for a moment that some upstart revolutionary proposed that we eliminate all
intellectual property protection for fashion design. No longer could a designer secure
federal copyright protection for the cut of a dress or the sleeve of a blouse. Unscrupulous
mass-marketers could run off thousands of knock-off copies of any designer’s evening
ensemble, and flood the marketplace with cheap imitations of haute couture. In the short
run, perhaps, clothing prices would come down as legitimate designers tried to meet the
prices of their free-riding competitors. In the long run, though, as we know all too well,
the diminution in the incentives for designing new fashions would take its toll. Designers
would still wish to design, at least initially, but clothing manufacturers with no exclusive
rights to rely on would be reluctant to make the investment involved in manufacturing
those designs and distributing them to the public. The dynamic American fashion
industry would wither, and its most talented designers would forsake clothing design for
some more remunerative calling like litigation. And all of us would be forced either to
wear last year’s garments year in and year out, or to import our clothing from abroad.
Or, perhaps, imagine that Congress suddenly repealed federal intellectual property
protection for food creations. Recipes would become common property. Downscale
restaurants could freely recreate the signature chocolate desserts of their upscale sisters.
Uncle Ben’s would market Minute Risotto (microwavable!); the Ladies’ Home Journal
would reprint recipes it had stolen from Gourmet Magazine. Great chefs would be unable
to find book publishers willing to buy their cookbooks. Then, expensive gourmet
restaurants would reduce their prices to meet the prices of the competition; soon they
would either close or fire their chefs to cut costs; promising young cooks would either
move to Europe or get a day job (perhaps the law) and cook only on weekends.
Ultimately, we would all be stuck eating Uncle Ben’s Minute Risotto (eleven yummy
flavors!!) for every meal.
But, I’m boring you, you tell me; you’ve heard all of this before. It’s the same
argument motion picture producers make about why we need to extend the duration of
copyright protection another 20 years; the same argument software publishers make
about what will happen if we permit other software publishers to decompile and reverseengineer their software products; the same argument database proprietors make about the
huge social cost of a failure to protect their rights in their data. Perhaps the most
important reason why we have intellectual property protection is our conclusion that
incentives are required to spur the creation and dissemination of a sufficient number and
variety of intellectual creations like films, software, databases, fashions and food.
Of course, we don’t give copyright protection to fashions or food. We never have.
Questions:
1.) If this is true, what are we debating in this course? What does Litman’s argument add
to the discussions of intellectual property theory in the first chapter? To the Supreme
Court’s analysis in Wal-Mart?
2.) Litman is talking about copyright protection – there is very little for fashion. One can
copyright the design on the fabric, but not the cut of the dress. In Wal-Mart, Justice Scalia
emphasizes that trademark also offers little in the way of design protection. Certainly, a
manufacturer can cover the object with its trademarked logo. That is one reason why bags,

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clothes and the like have become billboards for the Vuitton or Gucci symbol. The
trademark is protected even if the design of the bag or scarf on which it rests is not. But so
long as one does not copy the mark, one can imitate designs freely without interference
from either copyright or trademark law. Why, then, have the horrors Litman describes not
come about? What forms of “exclusion” continue to function in the worlds of fashion and
food? Forms of emulation? Types of exclusivity for which intellectual property is not
necessary (or is wielded in a different way)? Demand for “authenticity” in which the
availability of knockoffs is actually a positive, not a negative thing? Credit economies with
different methods for disciplining those who take and do not give back? Are there limiting
principles to these types of mechanisms? When are they likely to work well or work badly?
For further reading on these subjects, see Christine Cox and Jennifer Jenkins,
“Between the Seams, A Fertile Commons,” in Ready To Share: Fashion and the
Ownership of Creativity (Norman Lear Center 2005); Kal Raustiala & Christopher
Sprigman, “The Piracy Paradox: Innovation and Intellectual Property in Fashion Design,” 92 Virginia Law Review 8 (2006); Kal Raustiala & Christopher Sprigman, The
Knockoff Economy: How Imitation Sparks Innovation (2012).

TrafFix Devices, Inc. v. Marketing Displays, Inc.
532 U.S. 23 (2001)

Justice KENNEDY delivered the opinion of the Court.
Temporary road signs with warnings like “Road Work Ahead” or “Left Shoulder
Closed” must withstand strong gusts of wind. An inventor named Robert Sarkisian obtained
two utility patents for a mechanism built upon two
springs (the dual-spring design) to keep these and
other outdoor signs upright despite adverse wind
conditions. The holder of the now-expired Sarkisian
patents, respondent Marketing Displays, Inc. (MDI),
established a successful business in the manufacture
and sale of sign stands incorporating the patented feature. MDI’s stands for road signs were recognizable to
buyers and users (it says) because the dual-spring
design was visible near the base of the sign.
This litigation followed after the patents
expired and a competitor, TrafFix Devices, Inc., sold
sign stands with a visible spring mechanism that
looked like MDI’s. MDI and TrafFix products looked
alike because they were. When TrafFix started in bus- Patent drawing from USPTO record
iness, it sent an MDI product abroad to have it reverse
engineered, that is to say copied. Complicating matters, TrafFix marketed its sign stands
under a name similar to MDI’s. MDI used the name “WindMaster,” while TrafFix, its new
competitor, used “WindBuster.”
MDI brought suit under the Trademark Act of 1946, as amended, 15 U.S.C. § 1051
et seq., against TrafFix for trademark infringement (based on the similar names), trade
dress infringement (based on the copied dual-spring design) and unfair competition.
TrafFix counterclaimed on antitrust theories. After the United States District Court for the

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Eastern District of Michigan considered cross-motions for summary judgment, MDI
prevailed on its trademark claim for the confusing similarity of names and was held not
liable on the antitrust counterclaim; and those two rulings, affirmed by the Court of
Appeals, are not before us.
I
We are concerned with the trade dress question. The District Court ruled against
MDI on its trade dress claim. After determining that the one element of MDI’s trade dress
at issue was the dual-spring design, it held that “no reasonable trier of fact could determine
that MDI has established secondary meaning” in its alleged trade dress. In other words,
consumers did not associate the look of the dual-spring design with MDI. As a second,
independent reason to grant summary judgment in favor of TrafFix, the District Court
determined the dual-spring design was functional. On this rationale secondary meaning is
irrelevant because there can be no trade dress protection in any event. In ruling on the
functional aspect of the design, the District Court noted that Sixth Circuit precedent
indicated that the burden was on MDI to prove that its trade dress was nonfunctional, and
not on TrafFix to show that it was functional (a rule since adopted by Congress, see 15
U.S.C. § 1125(a)(3)), and then went on to consider MDI’s arguments that the dual-spring
design was subject to trade dress protection. Finding none of MDI’s contentions
persuasive, the District Court concluded MDI had not “proffered sufficient evidence which
would enable a reasonable trier of fact to find that MDI’s vertical dual-spring design is
non-functional.” Summary judgment was entered against MDI on its trade dress claims.
The Court of Appeals for the Sixth Circuit reversed the trade dress ruling. The Court
of Appeals held the District Court had erred in ruling MDI failed to show a genuine issue
of material fact regarding whether it had secondary meaning in its alleged trade dress, and
had erred further in determining that MDI could not prevail in any event because the
alleged trade dress was in fact a functional product configuration. The Court of Appeals
suggested the District Court committed legal error by looking only to the dual-spring
design when evaluating MDI’s trade dress. Basic to its reasoning was the Court of Appeals’
observation that it took “little imagination to conceive of a hidden dual-spring mechanism
or a tri or quad-spring mechanism that might avoid infringing [MDI’s] trade dress.” The
Court of Appeals explained that “[i]f TrafFix or another competitor chooses to use [MDI’s]
dual-spring design, then it will have to find some other way to set its sign apart to avoid
infringing [MDI’s] trade dress.” It was not sufficient, according to the Court of Appeals,
that allowing exclusive use of a particular feature such as the dual-spring design in the
guise of trade dress would “hinde[r] competition somewhat.” Rather, “[e]xclusive use of a
feature must ‘put competitors at a significant non-reputation-related disadvantage’ before
trade dress protection is denied on functionality grounds.” ([Q]uoting Qualitex Co. v.
Jacobson Products Co. (1995)). In its criticism of the District Court’s ruling on the trade
dress question, the Court of Appeals took note of a split among Courts of Appeals in various
other Circuits on the issue whether the existence of an expired utility patent forecloses the
possibility of the patentee’s claiming trade dress protection in the product’s design. To
resolve the conflict, we granted certiorari.
II
It is well established that trade dress can be protected under federal law. The design
or packaging of a product may acquire a distinctiveness which serves to identify the
product with its manufacturer or source; and a design or package which acquires this
secondary meaning, assuming other requisites are met, is a trade dress which may not be

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used in a manner likely to cause confusion as to the origin, sponsorship, or approval of the
goods. In these respects protection for trade dress exists to promote competition. As we
explained just last Term, see Wal-Mart Stores v. Samara Brothers (2000), various Courts
of Appeals have allowed claims of trade dress infringement relying on the general
provision of the Lanham Act which provides a cause of action to one who is injured when
a person uses “any word, term name, symbol, or device, or any combination thereof . . .
which is likely to cause confusion . . . as to the origin, sponsorship, or approval of his or
her goods.” 15 U.S.C. § 1125(a)(1)(A). Congress confirmed this statutory protection for
trade dress by amending the Lanham Act to recognize the concept. Title 15 U.S.C.
§ 1125(a)(3) provides: “In a civil action for trade dress infringement under this chapter for
trade dress not registered on the principal register, the person who asserts trade dress
protection has the burden of proving that the matter sought to be protected is not
functional.” This burden of proof gives force to the well-established rule that trade dress
protection may not be claimed for product features that are functional. And in WalMart, we
were careful to caution against misuse or over-extension of trade dress. We noted that
“product design almost invariably serves purposes other than source identification.”
Trade dress protection must subsist with the recognition that in many instances there
is no prohibition against copying goods and products. In general, unless an intellectual
property right such as a patent or copyright protects an item, it will be subject to copying.
As the Court has explained, copying is not always discouraged or disfavored by the laws
which preserve our competitive economy. Allowing competitors to copy will have salutary
effects in many instances. “Reverse engineering of chemical and mechanical articles in the
public domain often leads to significant advances in technology.”
The principal question in this case is the effect of an expired patent on a claim of
trade dress infringement. A prior patent, we conclude, has vital significance in resolving
the trade dress claim. A utility patent is strong evidence that the features therein claimed
are functional. If trade dress protection is sought for those features the strong evidence
of functionality based on the previous patent adds great weight to the statutory presumption that features are deemed functional until proved otherwise by the party seeking trade
dress protection. Where the expired patent claimed the features in question, one who
seeks to establish trade dress protection must carry the heavy burden of showing that the
feature is not functional, for instance by showing that it is merely an ornamental, incidental, or arbitrary aspect of the device.
In the case before us, the central advance claimed in the expired utility patents (the
Sarkisian patents) is the dual-spring design; and the dual-spring design is the essential
feature of the trade dress MDI now seeks to establish and to protect. The rule we have
explained bars the trade dress claim, for MDI did not, and cannot, carry the burden of
overcoming the strong evidentiary inference of functionality based on the disclosure of
the dual-spring design in the claims of the expired patents.
The dual springs shown in the Sarkisian patents were well apart (at either end of a
frame for holding a rectangular sign when one full side is the base) while the dual springs
at issue here are close together (in a frame designed to hold a sign by one of its corners).
As the District Court recognized, this makes little difference. The point is that the springs
are necessary to the operation of the device. The fact that the springs in this very differentlooking device fall within the claims of the patents is illustrated by MDI’s own position
in earlier litigation. In the late 1970’s, MDI engaged in a long-running intellectual
property battle with a company known as Winn-Proof. Although the precise claims of the
Sarkisian patents cover sign stands with springs “spaced apart,” the Winn-Proof sign
stands (with springs much like the sign stands at issue here) were found to infringe the

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patents by the United States District Court for the District of Oregon, and the Court of
Appeals for the Ninth Circuit affirmed the judgment. . . . In light of this past ruling—a
ruling procured at MDI’s own insistence—it must be concluded the products here at issue
would have been covered by the claims of the expired patents.
The rationale for the rule that the disclosure of a feature in the claims of a utility patent
constitutes strong evidence of functionality is well illustrated in this case. The dual-spring
design serves the important purpose of keeping the sign upright even in heavy wind
conditions; and, as confirmed by the statements in the expired patents, it does so in a unique
and useful manner. As the specification of one of the patents recites, prior art “devices, in
practice, will topple under the force of a strong wind.” The dual-spring design allows sign
stands to resist toppling in strong winds. Using a dual-spring design rather than a single
spring achieves important operational advantages. For example, the specifications of the
patents note that the “use of a pair of springs . . . as opposed to the use of a single spring to
support the frame structure prevents canting or twisting of the sign around a vertical axis,”
and that, if not prevented, twisting “may cause damage to the spring structure and may result
in tipping of the device.” In the course of patent prosecution, it was said that “[t]he use of a
pair of spring connections as opposed to a single spring connection . . . forms an important
part of this combination” because it “forc[es] the sign frame to tip along the longitudinal
axis of the elongated ground-engaging members.” The dual-spring design affects the cost
of the device as well; it was acknowledged that the device “could use three springs but this
would unnecessarily increase the cost of the device.” These statements made in the patent
applications and in the course of procuring the patents demonstrate the functionality of the
design. MDI does not assert that any of these representations are mistaken or inaccurate,
and this is further strong evidence of the functionality of the dual-spring design.
III
In finding for MDI on the trade dress issue the Court of Appeals gave insufficient
recognition to the importance of the expired utility patents, and their evidentiary
significance, in establishing the functionality of the device. The error likely was caused by
its misinterpretation of trade dress principles in other respects. As we have noted, even if
there has been no previous utility patent the party asserting trade dress has the burden to
establish the nonfunctionality of alleged trade dress features. MDI could not meet this
burden. Discussing trademarks, we have said “‘[i]n general terms, a product feature is
functional,’ and cannot serve as a trademark, ‘if it is essential to the use or purpose of the
article or if it affects the cost or quality of the article.’” Expanding upon the meaning of this
phrase, we have observed that a functional feature is one the “exclusive use of [which]
would put competitors at a significant non-reputation-related disadvantage.” The Court of
Appeals in the instant case seemed to interpret this language to mean that a necessary test
for functionality is “whether the particular product configuration is a competitive necessity.”
This was incorrect as a comprehensive definition. As explained in Qualitex and Inwood, a
feature is also functional when it is essential to the use or purpose of the device or when it
affects the cost or quality of the device. The Qualitex decision did not purport to displace
this traditional rule. Instead, it quoted the rule as Inwood had set it forth. It is proper to
inquire into a “significant non-reputation-related disadvantage” in cases of aesthetic
functionality, the question involved in Qualitex. Where the design is functional under the
Inwood formulation there is no need to proceed further to consider if there is a competitive
necessity for the feature. In Qualitex, by contrast, aesthetic functionality was the central
question, there having been no indication that the green-gold color of the laundry press pad
had any bearing on the use or purpose of the product or its cost or quality.

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The Court has allowed trade dress protection to certain product features that are
inherently distinctive. Two Pesos. In Two Pesos, however, the Court at the outset made the
explicit analytic assumption that the trade dress features in question (decorations and other
features to evoke a Mexican theme in a restaurant) were not functional. The trade dress in
those cases did not bar competitors from copying functional product design features. In the
instant case, beyond serving the purpose of informing consumers that the sign stands are
made by MDI (assuming it does so), the dual-spring design provides a unique and useful
mechanism to resist the force of the wind. Functionality having been established, whether
MDI’s dual-spring design has acquired secondary meaning need not be considered.
There is no need, furthermore, to engage, as did the Court of Appeals, in speculation about other design possibilities, such as using three or four springs which might
serve the same purpose. Here, the functionality of the spring design means that
competitors need not explore whether other spring juxtapositions might be used. The
dual-spring design is not an arbitrary flourish in the configuration of MDI’s product; it
is the reason the device works. Other designs need not be attempted.
Because the dual-spring design is functional, it is unnecessary for competitors to
explore designs to hide the springs, say by using a box or framework to cover them, as
suggested by the Court of Appeals. The dual-spring design assures the user the device
will work. If buyers are assured the product serves its purpose by seeing the operative
mechanism that in itself serves an important market need. It would be at cross-purposes
to those objectives, and something of a paradox, were we to require the manufacturer to
conceal the very item the user seeks.
In a case where a manufacturer seeks to protect arbitrary, incidental, or ornamental
aspects of features of a product found in the patent claims, such as arbitrary curves in the
legs or an ornamental pattern painted on the springs, a different result might obtain. There
the manufacturer could perhaps prove that those aspects do not serve a purpose within the
terms of the utility patent. The inquiry into whether such features, asserted to be trade dress,
are functional by reason of their inclusion in the claims of an expired utility patent could
be aided by going beyond the claims and examining the patent and its prosecution history
to see if the feature in question is shown as a useful part of the invention. No such claim is
made here, however. MDI in essence seeks protection for the dual-spring design alone. The
asserted trade dress consists simply of the dual-spring design, four legs, a base, an upright,
and a sign. MDI has pointed to nothing arbitrary about the components of its device or the
way they are assembled. The Lanham Act does not exist to reward manufacturers for their
innovation in creating a particular device; that is the purpose of the patent law and its period
of exclusivity. The Lanham Act, furthermore, does not protect trade dress in a functional
design simply because an investment has been made to encourage the public to associate a
particular functional feature with a single manufacturer or seller. The Court of Appeals
erred in viewing MDI as possessing the right to exclude competitors from using a design
identical to MDI’s and to require those competitors to adopt a different design simply to
avoid copying it. MDI cannot gain the exclusive right to produce sign stands using the
dual-spring design by asserting that consumers associate it with the look of the invention
itself. Whether a utility patent has expired or there has been no utility patent at all, a product
design which has a particular appearance may be functional because it is “essential to the
use or purpose of the article” or “affects the cost or quality of the article.”
TrafFix and some of its amici argue that the Patent Clause of the Constitution, Art.
I, § 8, cl. 8, of its own force, prohibits the holder of an expired utility patent from
claiming trade dress protection. We need not resolve this question. If, despite the rule
that functional features may not be the subject of trade dress protection, a case arises in

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which trade dress becomes the practical equivalent of an expired utility patent, that will
be time enough to consider the matter. The judgment of the Court of Appeals is reversed,
and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Questions:
1.) As both TrafFix and Qualitex explain, functional aspects of a product can never be
trademarked. How does TrafFix describe the test for functionality? How is that different
than the Court of Appeals’ definition of the concept? What philosophical differences do
these positions reflect?
2.) What position does TrafFix take about the desirability of deliberate copying? What
position does Wal-Mart v. Samara take on the same issue? Look back at the INS opinion.
Who would be most likely to agree? Pitney, Holmes or Brandeis?

CHAPTER SIX

Grounds for Refusing Registration

Section 1052 of the Lanham Act contains a series of grounds for refusing federal
registration of trademarks. We will take its subsections in turn.

1.) 1052(a)
No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the
principal register on account of its nature unless it—
(a) Consists of or comprises immoral, deceptive, or scandalous
matter; or matter which may disparage or falsely suggest a
connection with persons, living or dead, institutions, beliefs, or
national symbols, or bring them into contempt, or disrepute; or a
geographical indication which, when used on or in connection
with wines or spirits, identifies a place other than the origin of the
goods and is first used on or in connection with wines or spirits by
the applicant on or after one year after the date on which the
WTO Agreement (as defined in section 3501 (9) of title 19) enters
into force with respect to the United States.1
Why the crossed-out text? In 2017, two landmark cases struck down longstanding provisions of section 1052(a) as violations of the First Amendment. You may recall the First
Amendment cases from Chapters 2 and 3—there, the freedom of speech (whether it was
the right to use 20 years of material set to enter the public domain, the word “Olympic,”
a cheerleader uniform, or a brand name) was in conflict with intellectual property rights.
In the cases that follow, the framework is a little different. It is the parties seeking
federally registered intellectual property rights who are bringing First Amendment
claims, namely that the statutory prohibitions against registering their trademarks are
unconstitutional restrictions of speech.
i.) Disparaging marks. In June 2017, the Supreme Court invalidated § 1052(a)’s prohibition on registering marks that “may disparage [persons, beliefs, etc.] or bring them into
contempt, or disrepute,” holding that it violates the First Amendment. The opinion in this
case—Matal v. Tam—follows.
You may have read about the REDSKINS trademark litigation, on which this case
bears. Before the Tam decision, the federal registrations of six trademarks containing the
term REDSKINS had been cancelled because they were found disparaging to Native
Americans in violation of § 1052(a). When those cancellations were appealed, the lower
The last clause of § 1052(a) was inserted to comply with the TRIPS Agreement. It prohibits geographical
indications on wines and spirits that identify a place other than their origin, even if the term is not misleading;
“Champagne” cannot be used on sparkling wine unless it comes from Champagne, France. (Or unless the
wine was grandfathered in by being used before the relevant date. Hence the excellent Chandon Brut
sparkling wine from California may not use the term “champagne” but Cooks Champagne may.)

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courts echoed the reasoning of earlier cases – holding that the refusal to register disparaging
marks does not impermissibly restrict free speech, because the trademark holder is free to
go on using the disparaging mark, just without the benefits of federal registration. See ProFootball, Inc. v. Blackhorse (E.D. Va. 2015). Those cases are no longer good law. After the
Tam decision, such marks can be registered, since the provision under which they were
refused has been found unconstitutional. As you read the case below, remember that the
question here is constitutionality. One might find some marks offensive but believe that
the government does not get to deny them registration for that reason alone.

Matal v. Tam

137 S. Ct. 1744 (2017)
ALITO, J., announced the judgment of the Court. . . . GORSUCH, J., took no part in the
consideration or decision of the case. [The Justices who joined on each portion are noted
below.]
This case concerns a dance-rock band’s application for federal trademark registration of the band’s name, “The Slants.” “Slants” is a derogatory term for persons of Asian
descent, and members of the band are Asian-Americans. But the band members believe
that by taking that slur as the name of their group, they will help to “reclaim” the term
and drain its denigrating force.

The dance-rock band “The Slants”

The Patent and Trademark Office (PTO) denied the application based on a provision
of federal law prohibiting the registration of trademarks that may “disparage . . . or bring
. . . into contemp[t] or disrepute” any “persons, living or dead.” 15 U.S.C. § 1052(a). We
now hold that this provision violates the Free Speech Clause of the First Amendment. It
offends a bedrock First Amendment principle: Speech may not be banned on the ground
that it expresses ideas that offend.

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I
[unanimous]
A
“The principle underlying trademark protection is that distinctive marks—words,
names, symbols, and the like—can help distinguish a particular artisan’s goods from
those of others.” . . . “[F]ederal law does not create trademarks.” Trademarks and their
precursors have ancient origins, and trademarks were protected at common law and in
equity at the time of the founding of our country. For most of the 19th century, trademark
protection was the province of the States. Eventually, Congress stepped in to provide a
degree of national uniformity, passing the first federal legislation protecting trademarks in
1870. The foundation of current federal trademark law is the Lanham Act, enacted in
1946. . . . Under the Lanham Act, trademarks that are “used in commerce” may be placed
on the “principal register,” that is, they may be federally registered. . . . There are now
more than two million marks that have active federal certificates of registration. . . .
B
Without federal registration, a valid trademark may still be used in commerce. And
an unregistered trademark can be enforced against would-be infringers in several ways.
Most important, even if a trademark is not federally registered, it may still be enforceable
under § 43(a) of the Lanham Act, which creates a federal cause of action for trademark
infringement.1 Unregistered trademarks may also be entitled to protection under other
federal statutes, such as the Anticybersquatting Consumer Protection Act, 15 U.S.C.
§ 1125(d). And an unregistered trademark can be enforced under state common law, or if
it has been registered in a State, under that State’s registration system.
Federal registration, however, “confers important legal rights and benefits on
trademark owners who register their marks.” Registration on the principal register (1)
“serves as ‘constructive notice of the registrant’s claim of ownership’ of the mark” (15
U.S.C. § 1072); (2) “is ‘prima facie evidence of the validity of the registered mark
and of the registration of the mark, of the owner’s ownership of the mark, and of the
owner’s exclusive right to use the registered mark in commerce on or in connection
with the goods or services specified in the certificate’” (§ 1057(b)); and (3) can make
a mark “‘incontestable’” once a mark has been registered for five years (§§ 1065,
1115(b)). Registration also enables the trademark holder “to stop the importation into
the United States of articles bearing an infringing mark.” See 15 U.S.C. § 1124.
C
The Lanham Act contains provisions that bar certain trademarks from the principal
register. For example, a trademark cannot be registered if it is “merely descriptive or deceptively misdescriptive” of goods, § 1052(e)(1), or if it is so similar to an already registered
trademark or trade name that it is “likely . . . to cause confusion, or to cause mistake, or to
deceive,” § 1052(d). At issue in this case is one such provision, which we will call “the
In the opinion below, the Federal Circuit opined that although “Section 43(a) allows for a federal suit to
protect an unregistered trademark,” “it is not at all clear” that respondent could bring suit under § 43(a)
because “there is no authority extending § 43(a) to marks denied under § 2(a)’s disparagement provision.”
When drawing this conclusion, the Federal Circuit relied in part on our statement in Two Pesos that “the
general principles qualifying a mark for registration under § 2 of the Lanham Act are for the most part
applicable in determining whether an unregistered mark is entitled to protection under § 43(a).” We need not
decide today whether respondent could bring suit under § 43(a) if his application for federal registration had
been lawfully denied under the disparagement clause.
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disparagement clause.” This provision prohibits the registration of a trademark “which may
disparage . . . persons, living or dead, institutions, beliefs, or national symbols, or bring them
into contempt, or disrepute.” § 1052(a). . . . When deciding whether a trademark is disparaging, an examiner at the PTO generally applies a “two-part test.” The examiner first
considers “the likely meaning of the matter in question, taking into account not only dictionary definitions, but also the relationship of the matter to the other elements in the mark,
the nature of the goods or services, and the manner in which the mark is used in the marketplace in connection with the goods or services.” “If that meaning is found to refer to identifiable persons, institutions, beliefs or national symbols,” the examiner moves to the second
step, asking “whether that meaning may be disparaging to a substantial composite of the
referenced group.” If the examiner finds that a “substantial composite, although not necessarily a majority, of the referenced group would find the proposed mark . . . to be disparaging
in the context of contemporary attitudes,” a prima facie case of disparagement is made out,
and the burden shifts to the applicant to prove that the trademark is not disparaging. What
is more, the PTO has specified that “[t]he fact that an applicant may be a member of that
group or has good intentions underlying its use of a term does not obviate the fact that a
substantial composite of the referenced group would find the term objectionable.”
D
Simon Tam is the lead singer of “The Slants.” He chose this moniker in order to
“reclaim” and “take ownership” of stereotypes about people of Asian ethnicity. The group
“draws inspiration for its lyrics from childhood slurs and mocking nursery rhymes” and has
given its albums names such as “The Yellow Album” and “Slanted Eyes, Slanted Hearts.”
Tam sought federal registration of “THE SLANTS,” on the principal register, but
an examining attorney at the PTO rejected the request, applying the PTO’s two-part
framework and finding that “there is . . . a substantial composite of persons who find the
term in the applied for mark offensive.” The examining attorney relied in part on the fact
that “numerous dictionaries define ‘slants’ or ‘slant-eyes’ as a derogatory or offensive
term.” The examining attorney also relied on a finding that “the band’s name has been
found offensive numerous times”—citing a performance that was canceled because of
the band’s moniker and the fact that “several bloggers and commenters to articles on the
band have indicated that they find the term and the applied-for mark offensive.”
Tam contested the denial of registration before the examining attorney and before
the PTO’s Trademark Trial and Appeal Board (TTAB) but to no avail. Eventually, he took
the case to federal court, where the en banc Federal Circuit ultimately found the
disparagement clause facially unconstitutional under the First Amendment’s Free Speech
Clause. The majority found that the clause engages in viewpoint-based discrimination,
that the clause regulates the expressive component of trademarks and consequently cannot
be treated as commercial speech, and that the clause is subject to and cannot satisfy strict
scrutiny. The majority also rejected the Government’s argument that registered trademarks
constitute government speech, as well as the Government’s contention that federal
registration is a form of government subsidy. And the majority opined that even if the
disparagement clause were analyzed under this Court’s commercial speech cases, the
clause would fail the “intermediate scrutiny” that those cases prescribe. . . .
The Government filed a petition for certiorari, which we granted in order to decide
whether the disparagement clause “is facially invalid under the Free Speech Clause of
the First Amendment.” . . .

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III
Because the disparagement clause applies to marks that disparage the members of
a racial or ethnic group, we must decide whether the clause violates the Free Speech
Clause of the First Amendment. And at the outset, we must consider three arguments that
would either eliminate any First Amendment protection or result in highly permissive
rational-basis review. Specifically, the Government contends (1) that trademarks are
government speech, not private speech, (2) that trademarks are a form of government
subsidy, and (3) that the constitutionality of the disparagement clause should be tested
under a new “government-program” doctrine. We address each of these arguments below.
A
[unanimous]
The First Amendment prohibits Congress and other government entities and actors
from “abridging the freedom of speech”; the First Amendment does not say that Congress
and other government entities must abridge their own ability to speak freely. And our cases
recognize that “[t]he Free Speech Clause . . . does not regulate government speech.”
As we have said, “it is not easy to imagine how government could function” if it
were subject to the restrictions that the First Amendment imposes on private speech.
“‘[T]he First Amendment forbids the government to regulate speech in ways that favor
some viewpoints or ideas at the expense of others,’” but imposing a requirement of
viewpoint-neutrality on government speech would be paralyzing. When a government
entity embarks on a course of action, it necessarily takes a particular viewpoint and
rejects others. . . .
But while the government-speech doctrine is important—indeed, essential—it is a
doctrine that is susceptible to dangerous misuse. If private speech could be passed off as
government speech by simply affixing a government seal of approval, government could
silence or muffle the expression of disfavored viewpoints. For this reason, we must
exercise great caution before extending our government-speech precedents.
At issue here is the content of trademarks that are registered by the PTO, an arm of
the Federal Government. The Federal Government does not dream up these marks, and it
does not edit marks submitted for registration. Except as required by the statute involved
here, 15 U.S.C. § 1052(a), an examiner may not reject a mark based on the viewpoint that
it appears to express. . . . In light of all this, it is far-fetched to suggest that the content of
a registered mark is government speech. If the federal registration of a trademark makes
the mark government speech, the Federal Government is babbling prodigiously and
incoherently. It is saying many unseemly things. It is expressing contradictory views.9 It
is unashamedly endorsing a vast array of commercial products and services. And it is
providing Delphic advice to the consuming public.
For example, if trademarks represent government speech, what does the Government
have in mind when it advises Americans to “make.believe” (Sony), “Think different”
(Apple), “Just do it” (Nike), or “Have it your way” (Burger King)? Was the Government
warning about a coming disaster when it registered the mark “EndTime Ministries”?
The PTO has made it clear that registration does not constitute approval of a mark.
9
Compare “Abolish Abortion,” Registration No. 4,935,774 (Apr. 12, 2016), with “I Stand With Planned
Parenthood,” Registration No. 5,073,573 (Nov. 1, 2016); compare “Capitalism Is Not Moral, Not Fair, Not
Freedom,” Registration No. 4,696,419 (Mar. 3, 2015), with “Capitalism Ensuring Innovation,” Registration
No. 3,966,092 (May 24, 2011); compare “Global Warming Is Good,” Registration No. 4,776,235 (July 21,
2015), with “A Solution to Global Warming,” Registration No. 3,875,271 (Nov. 10, 2010).

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And it is unlikely that more than a tiny fraction of the public has any idea what federal
registration of a trademark means. . . .
This brings us to the case on which the Government relies most heavily, Walker v.
Texas Div., Sons of Confederate Veterans, Inc. (2015), which likely marks the outer
bounds of the government-speech doctrine. Holding that the messages on Texas specialty
license plates are government speech, the Walker Court cited three factors distilled from
Pleasant Grove City v. Summum (2009). First, license plates have long been used by the
States to convey state messages. Second, license plates “are often closely identified in
the public mind” with the State, since they are manufactured and owned by the State,
generally designed by the State, and serve as a form of “government ID.” Third, Texas
“maintain[ed] direct control over the messages conveyed on its specialty plates.” As
explained above, none of these factors are present in this case.
In sum, the federal registration of trademarks is vastly different from . . . even the
specialty license plates in Walker. Holding that the registration of a trademark converts
the mark into government speech would constitute a huge and dangerous extension of
the government-speech doctrine. For if the registration of trademarks constituted government speech, other systems of government registration could easily be characterized
in the same way.
Perhaps the most worrisome implication of the Government’s argument concerns
the system of copyright registration. If federal registration makes a trademark government
speech and thus eliminates all First Amendment protection, would the registration of the
copyright for a book produce a similar transformation?
The Government attempts to distinguish copyright on the ground that it is “‘the
engine of free expression,’” but as this case illustrates, trademarks often have an expressive content. Companies spend huge amounts to create and publicize trademarks that
convey a message. It is true that the necessary brevity of trademarks limits what they can
say. But powerful messages can sometimes be conveyed in just a few words.
Trademarks are private, not government, speech.
B
[Alito, Roberts, Thomas, Breyer]
We next address the Government’s argument that this case is governed by cases in
which this Court has upheld the constitutionality of government programs that subsidized
speech expressing a particular viewpoint. These cases implicate a notoriously tricky
question of constitutional law. “[W]e have held that the Government ‘may not deny a
benefit to a person on a basis that infringes his constitutionally protected . . . freedom of
speech even if he has no entitlement to that benefit.’” But at the same time, government
is not required to subsidize activities that it does not wish to promote. Determining which
of these principles applies in a particular case “is not always self-evident,” but no difficult
question is presented here.
Unlike the present case, the decisions on which the Government relies all involved
cash subsidies or their equivalent. In Rust v. Sullivan (1991), a federal law provided funds
to private parties for family planning services. . . . In other cases, we have regarded tax
benefits as comparable to cash subsidies.
The federal registration of a trademark is nothing like the programs at issue in these
cases. The PTO does not pay money to parties seeking registration of a mark. Quite the
contrary is true: An applicant for registration must pay the PTO a filing fee of $225-$600.
(Tam submitted a fee of $275 as part of his application to register THE SLANTS.) And
to maintain federal registration, the holder of a mark must pay a fee of $300-$500 every

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10 years. The Federal Circuit concluded that these fees have fully supported the
registration system for the past 27 years.
The Government responds that registration provides valuable non-monetary
benefits that “are directly traceable to the resources devoted by the federal government
to examining, publishing, and issuing certificates of registration for those marks.” But
just about every government service requires the expenditure of government funds. . . .
Trademark registration is not the only government registration scheme. For example,
the Federal Government registers copyrights and patents. State governments and their subdivisions register the title to real property and security interests; they issue driver’s licenses,
motor vehicle registrations, and hunting, fishing, and boating licenses or permits. . . .
C
[Alito, Roberts, Thomas, Breyer]
Finally, the Government urges us to sustain the disparagement clause under a new
doctrine that would apply to “government-program” cases. For the most part, this
argument simply merges our government-speech cases and the previously discussed
subsidy cases in an attempt to construct a broader doctrine that can be applied to the
registration of trademarks. . . . Potentially more analogous are cases in which a unit of
government creates a limited public forum for private speech. . . . However, even in such
cases, what we have termed “viewpoint discrimination” is forbidden.
Our cases use the term “viewpoint” discrimination in a broad sense, and in that
sense, the disparagement clause discriminates on the bases of “viewpoint.” To be sure,
the clause evenhandedly prohibits disparagement of all groups. It applies equally to
marks that damn Democrats and Republicans, capitalists and socialists, and those arrayed
on both sides of every possible issue. It denies registration to any mark that is offensive
to a substantial percentage of the members of any group. But in the sense relevant here,
that is viewpoint discrimination: Giving offense is a viewpoint.
We have said time and again that “the public expression of ideas may not be
prohibited merely because the ideas are themselves offensive to some of their hearers.”
For this reason, the disparagement clause cannot be saved by analyzing it as a type of
government program in which some content- and speaker-based restrictions are permitted.
IV
[Alito, Roberts, Thomas, Breyer]
Having concluded that the disparagement clause cannot be sustained under our
government-speech or subsidy cases or under the Government’s proposed “government
program” doctrine, we must confront a dispute between the parties on the question
whether trademarks are commercial speech and are thus subject to the relaxed scrutiny
outlined in Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N.Y. (1980). The
Government and amici supporting its position argue that all trademarks are commercial
speech. They note that the central purposes of trademarks are commercial and that federal
law regulates trademarks to promote fair and orderly interstate commerce. Tam and his
amici, on the other hand, contend that many, if not all, trademarks have an expressive
component. In other words, these trademarks do not simply identify the source of a
product or service but go on to say something more, either about the product or service or
some broader issue. The trademark in this case illustrates this point. The name “The
Slants” not only identifies the band but expresses a view about social issues.
We need not resolve this debate between the parties because the disparagement
clause cannot withstand even Central Hudson review. Under Central Hudson, a

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restriction of speech must serve “a substantial interest,” and it must be “narrowly drawn.”
This means, among other things, that “[t]he regulatory technique may extend only as far
as the interest it serves.” The disparagement clause fails this requirement.
It is claimed that the disparagement clause serves two interests. The first is phrased
in a variety of ways in the briefs. Echoing language in one of the opinions below, the
Government asserts an interest in preventing “‘underrepresented groups’” from being
“‘bombarded with demeaning messages in commercial advertising.’” An amicus
supporting the Government refers to “encouraging racial tolerance and protecting the
privacy and welfare of individuals.” But no matter how the point is phrased, its
unmistakable thrust is this: The Government has an interest in preventing speech
expressing ideas that offend. And, as we have explained, that idea strikes at the heart of
the First Amendment. Speech that demeans on the basis of race, ethnicity, gender, religion,
age, disability, or any other similar ground is hateful; but the proudest boast of our free
speech jurisprudence is that we protect the freedom to express “the thought that we hate.”
The second interest asserted is protecting the orderly flow of commerce.
Commerce, we are told, is disrupted by trademarks that “involv[e] disparagement of race,
gender, ethnicity, national origin, religion, sexual orientation, and similar demographic
classification.” Such trademarks are analogized to discriminatory conduct, which has
been recognized to have an adverse effect on commerce. A simple answer to this
argument is that the disparagement clause is not “narrowly drawn” to drive out
trademarks that support invidious discrimination. The clause reaches any trademark that
disparages any person, group, or institution. It applies to trademarks like the following:
“Down with racists,” “Down with sexists,” “Down with homophobes.” It is not an antidiscrimination clause; it is a happy-talk clause. In this way, it goes much further than is
necessary to serve the interest asserted.
The clause is far too broad in other ways as well. The clause protects every person
living or dead as well as every institution. Is it conceivable that commerce would be
disrupted by a trademark saying: “James Buchanan was a disastrous president” or
“Slavery is an evil institution”?
There is also a deeper problem with the argument that commercial speech may be
cleansed of any expression likely to cause offense. The commercial market is well
stocked with merchandise that disparages prominent figures and groups, and the line
between commercial and non-commercial speech is not always clear, as this case
illustrates. If affixing the commercial label permits the suppression of any speech that
may lead to political or social “volatility,” free speech would be endangered.
***
For these reasons, we hold that the disparagement clause violates the Free Speech
Clause of the First Amendment. The judgment of the Federal Circuit is affirmed.
It is so ordered.
[Justice KENNEDY, with whom JUSTICE GINSBURG, JUSTICE SOTOMAYOR, and
JUSTICE KAGAN joined, concurred in the judgment and argued further that “the First
Amendment’s protections against viewpoint discrimination apply to the trademark here.”
They concluded, “the viewpoint discrimination rationale renders unnecessary any
extended treatment of other questions raised by the parties.”]
Justice THOMAS, concurring in part and concurring in the judgment.
. . . I also write separately because “I continue to believe that when the government

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seeks to restrict truthful speech in order to suppress the ideas it conveys, strict scrutiny
is appropriate, whether or not the speech in question may be characterized as ‘commercial.’” I nonetheless join Part IV of JUSTICE ALITO’s opinion because it correctly
concludes that the disparagement clause, 15 U.S.C. § 1052(a), is unconstitutional even
under the less stringent test announced in Central Hudson.
Questions:
1.) What reasons does the court give for the claim that registered trademarks are private
speech rather than government speech?
2.) Do you think that the disparagement clause constitutes viewpoint discrimination?
Why? Why not?
3.) Do you foresee a flood of trademark applications seeking federal registration for
“offensive” marks?
4.) Is this case consistent with SFAA v. USOC? Why? Why not?

ii.) Immoral or scandalous marks. Does the reasoning in Matal v. Tam also invalidate
§ 1052(a)’s bar on registering immoral or scandalous marks? The Supreme Court
answered that question in the affirmative in 2019.

Iancu v. Brunetti

588 U.S. ____ (2019)

KAGAN, J., delivered the opinion of the Court, in which THOMAS, GINSBURG,
ALITO, GORSUCH and KAVANAUGH, JJ., joined. ALITO, J., filed a concurring
opinion. ROBERTS, C.J., and BREYER, J., filed opinions concurring in part and
dissenting in part. SOTOMAYOR, J., filed an opinion concurring in part and dissenting
in part, in which BREYER, J., joined.
Two Terms ago, in Matal v. Tam, this Court invalidated the Lanham Act’s bar on the
registration of “disparag[ing]” trademarks. 15 U.S.C. § 1052(a). Although split between
two non-majority opinions, all Members of the Court agreed that the provision violated the
First Amendment because it discriminated on the basis of viewpoint. Today we consider a
First Amendment challenge to a neighboring provision of the Act, prohibiting the registration of “immoral[ ] or scandalous” trademarks. We hold that this provision infringes the
First Amendment for the same reason: It too disfavors certain ideas.
I
Respondent Erik Brunetti is an artist and entrepreneur who founded a clothing line
that uses the trademark FUCT. According to Brunetti, the mark (which functions as the
clothing’s brand name) is pronounced as four letters, one after the other: F-U-C-T. But
you might read it differently and, if so, you would hardly be alone. That common
perception caused difficulties for Brunetti when he tried to register his mark with the
U.S. Patent and Trademark Office (PTO). . . .

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II
. . . [In Matal,] [t]he Justices thus found common ground in a core postulate of free
speech law: The government may not discriminate against speech based on the ideas or
opinions it conveys. . . . So the key question becomes: Is the “immoral or scandalous”
criterion in the Lanham Act viewpoint-neutral or viewpoint-based?
It is viewpoint-based. The meanings of “immoral” and “scandalous” are not
mysterious, but resort to some dictionaries still helps to lay bare the problem. When is
expressive material “immoral”? According to a standard definition, when it is “inconsistent
with rectitude, purity, or good morals”; “wicked”; or “vicious.” Webster’s New
International Dictionary 1246 (2d ed. 1949). Or again, when it is “opposed to or violating
morality”; or “morally evil.” Shorter Oxford English Dictionary 961 (3d ed. 1947). So the
Lanham Act permits registration of marks that champion society’s sense of rectitude and
morality, but not marks that denigrate those concepts. And when is such material
“scandalous”? Says a typical definition, when it “giv[es] offense to the conscience or moral
feelings”; “excite[s] reprobation”; or “call[s] out condemnation.” Webster’s New
International Dictionary, at 2229. Or again, when it is “shocking to the sense of truth,
decency, or propriety”; “disgraceful”; “offensive”; or “disreputable.” Funk & Wagnalls
New Standard Dictionary 2186 (1944). So the Lanham Act allows registration of marks
when their messages accord with, but not when their messages defy, society’s sense of
decency or propriety. Put the pair of overlapping terms together and the statute, on its face,
distinguishes between two opposed sets of ideas: those aligned with conventional moral
standards and those hostile to them; those inducing societal nods of approval and those
provoking offense and condemnation. The statute favors the former, and disfavors the
latter. “Love rules”? “Always be good”? Registration follows. “Hate rules”? “Always be
cruel”? Not according to the Lanham Act’s “immoral or scandalous” bar.
The facial viewpoint bias in the law results in viewpoint-discriminatory application.
Recall that the PTO itself describes the “immoral or scandalous” criterion using much the
same language as in the dictionary definitions recited above. The PTO, for example, asks
whether the public would view the mark as “shocking to the sense of truth, decency, or
propriety”; “calling out for condemnation”; “offensive”; or “disreputable.” Using those
guideposts, the PTO has refused to register marks communicating “immoral” or
“scandalous” views about (among other things) drug use, religion, and terrorism. But all
the while, it has approved registration of marks expressing more accepted views on the
same topics. . . . [A]s the Court made clear in Tam, a law disfavoring “ideas that offend”
discriminates based on viewpoint, in violation of the First Amendment. . . .
We accordingly affirm the judgment of the Court of Appeals.
It is so ordered.
••••••••••
iii.) Marks that falsely suggest a connection to persons. § 1052(a) still prohibits the
registration of marks that “falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols.” Note that this is different from disparagement –
falsely suggesting a connection need not be disparaging. It is also distinct from § 1052(c)’s
prohibition on using names of particular living individuals, and § 1052(e)’s prohibition on
marks that are “primarily merely a surname” (both discussed below). The provision
barring false associations with “persons” emerged from the concepts of rights of publicity
and privacy. It only precludes registration when, among other things, “the plaintiff’s name
or identity is of sufficient fame or reputation that when the defendant’s mark is used on

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its goods or services, a connection with the plaintiff would be presumed.” So, for example,
BO BALL with a baseball/football design could not be registered because it falsely suggested a connection with the famous athlete Bo Jackson, but DA VINCI could be registered for jewelry and leather giftware because reasonable buyers would not assume a connection between Leonardo Da Vinci and the trademark owner’s products.2
iv.) Deceptive marks. A deceptive mark can never be registered, unlike “deceptively
misdescriptive” marks (see the discussion of § 1052(e) below), which can be registered
upon acquiring secondary meaning. A mark is deceptive if its misrepresentation
materially affects purchasing decisions. LOVEE LAMB for car seat covers made entirely
of synthetic fibers and WHITE JASMINE for tea that contained no white tea were found
to be deceptive because they were likely to affect the purchasing decisions of customers
who wanted sheepskin seats, or the purported health benefits of white tea.3

2.) 1052(b)
Consists of or comprises the flag or coat of arms or other insignia of
the United States, or of any State or municipality, or of any foreign
nation, or any simulation thereof.
Flags and other government insignia. Section 1052(b) denies registration to a mark that
“consists of or comprises the flag or coat of arms or other insignia of the United States, or
of any State or municipality, or of any foreign nation, or any simulation thereof.”
Government “insignia” is a narrow category, and only includes “specific designs formally
adopted to serve as emblems of governmental authority,” such as flags and official seals.4
Other national symbols, such as the Statue of Liberty or the Capitol building, may be part
of a registered mark, as long as the mark does not falsely suggest a connection with the
government in violation of § 1052(a).5 What is the policy behind keeping core “emblems of
governmental authority” from serving as registered trademarks, but allowing the registration
of other national symbols?
Government entities are also precluded from registering official insignia as
trademarks.6 Outside of this narrow prohibition, however, the government owns many
marks. In the wake of recent wars, there has been an uptick in trademark registrations by
the Marines and other armed forces, along with efforts to protect their brands. The Navy
successfully objected to Disney’s efforts to trademark the name SEAL TEAM 6. The
Marines have objected to uses ranging from Marine-themed toilet paper called
“Leatherneck Wipes” to a Star Trek fan site called “Starfleet Marine Corps Academy” that
used the Marine Eagle (the website could keep the name but had to remove the eagle).
They have also objected to uses by veterans—for example, a veteran who started a
company called Semper Fidelis Garage Doors was required to remove the Marine emblem
See In re Sauer (T.T.A.B. 1993), aff’d (Fed. Cir. 1994); Lucien Piccard Watch Corp. v. Crescent Corp.
(S.D.N.Y. 1970).
3
See In re Budge Mfg. Co. (Fed. Cir. 1988); In re White Jasmine LLC (T.T.A.B. 2013).
4
Trademark Manual of Examining Procedure § 1204.
5
Liberty Mut. Ins. Co. v. Liberty Ins. Co. of Tex. (E.D. Ark. 1960) (Liberty Mutual Insurance Company had
a valid registration of a mark using the Statue of Liberty); Heroes, Inc. v. Boomer Esiason Hero’s Foundation,
Inc. (D.D.C. 1997) (charity had a valid registration for a mark that included an image of the Capitol building).
6
In re City of Houston (T.T.A.B. 2012) (Houston could not register its city seal).
2

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from his trademark. Who should have the exclusive right to use something like the Marine
emblem as a source indicator? The government? Veterans? Disney? Entrepreneurs who
successfully associate it with a product?

3.) 1052(c)
Consists of or comprises a name, portrait, or signature identifying a
particular living individual except by his written consent, or the
name, signature, or portrait of a deceased President of the United
States during the life of his widow, if any, except by the written
consent of the widow.
Names and portraits of living individuals. Section 1052(c) bars the registration of a
mark that “consists of or comprises a name, portrait, or signature identifying a particular
living individual” or “deceased President of the United States during the life of his
widow,” unless there is written consent. (Does this language need to be amended if a
woman becomes president?) This section only applies when “the person is so well known
that the public would assume a connection or there will be an association of the name and
the mark as used on the goods because the individual is publicly connected with the field
in which the mark is being used.”7 For example, registration of the marks OBAMA
PAJAMA, OBAMA BAHAMA PAJAMAS and BARACK’S JOCKS DRESS TO THE
LEFT was rejected because they clearly identified President Obama.8 By contrast, the
authors of this casebook do not have § 1052(c) claims against BOYLES or JENNIFER
HOME FURNITURE, both registered marks for furniture stores, because the public
would not associate them with those trademarks.

4.) 1052(d)
Consists of or comprises a mark which so resembles a mark registered
in the Patent and Trademark Office, or a mark or trade name
previously used in the United States by another and not abandoned,
as to be likely, when used on or in connection with the goods of the
applicant, to cause confusion, or to cause mistake, or to deceive. . . .
Confusingly similar to existing marks. Section 1052(d) provides that a mark cannot be
registered if it is likely to cause confusion with another active mark, though concurrent
registration may be allowed in limited circumstances based on good faith prior use. The
test for likelihood of confusion at the registration stage is the same as that used for
infringement, and is explored in detail in Chapter 7. If you practice trademark law after
graduation, this question may account for a lot of your billable hours: whether marks
proposed for registration are likely to cause confusion with existing marks. You will only
be able to answer that question properly once we have covered likelihood of confusion in
Chapter 7, but we think it is worth it to set the issue up now.
Applicants trying to federally register a mark may face refusal under § 1052(d) when
i.) the examining attorney at the PTO has determined that their mark is likely to cause
Ross v. Analytical Technology Inc. (TTAB 1999) (James W. Ross, Jr. was sufficiently well-known in the
field to bar registration of ROSS for electrochemical analysis equipment).
8
In re Richard M. Hoefflin (T.T.A.B. 2010).
7

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confusion with a preexisting mark, or ii.) when the owner of such a mark has initiated an
“opposition” proceeding claiming potential confusion. (Trademark owners vigilantly track
trademark applications for this purpose. Duke University is particularly vigilant, if not
overzealous, as it turns out; in fact, it has been named a leading trademark bully.)
Numerous factors are considered in determining whether registration is barred by
§ 1052(d) on confusion grounds, but as with infringement, two key factors are the
similarity of the marks “in their entireties as to appearance, sound, connotation and
commercial impression” and the “relatedness of the goods or services” connected to
those marks. Trademark Manual of Examining Procedure § 1207.01. The PTO does not
look at the products in isolation, or the marks in isolation. Rather, it asks the question,
given the similarity or dissimilarity of the marks and the related or unrelated nature of
the goods or services, is there a likelihood of confusion as to the source or the sponsorship
of the applicant’s product? With this in mind, do you think there was a likelihood of
confusion in the following cases?
• The trademark owner of MR. CLEAN for “sudsing cleaner, cleanser and detergent” opposed the registration of MISTER STAIN for a stain removing
compound
• The owner of the same MR. CLEAN mark opposed the registration of
MASTER KLEEN for dry cleaning services
What about design marks, where the similarity of the marks is assessed primarily on the
basis of appearance? Are the following confusingly similar?
Registered mark for
“moisturizing skin cream”

Ocean Spray’s registered
mark for various foods
and drinks made
with cranberries

Applicant’s mark for
“distributorship services in the
field of health and beauty aids”

Applicant’s mark
for “seafood”

5.) 1052(e)

Consists of a mark which
(1) when used on or in connection with the goods of the applicant
is merely descriptive or deceptively misdescriptive of them,
(2) when used on or in connection with the goods of the applicant
is primarily geographically descriptive of them, except as indications of regional origin may be registrable under section 1054 of
this title,
(3) when used on or in connection with the goods of the applicant
is primarily geographically deceptively misdescriptive of them,
(4) is primarily merely a surname, or
(5) comprises any matter that, as a whole, is functional.

Section 1052(e) precludes registration of a mark that is: functional; merely

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descriptive or “deceptively misdescriptive”; “primarily geographically descriptive” or
“primarily geographically deceptively misdescriptive”; or “primarily merely a surname.”
However, marks within some of these categories can become registrable after they
acquire distinctiveness (see § 1052(f) below).
i.) § 1052(e) “deceptively misdescriptive” v. § 1052(a) “deceptive.” Marks that are functional or merely descriptive, and the reasons they are ineligible for protection, have already
been discussed elsewhere in this chapter. But what about deceptively misdescriptive marks?
Like merely descriptive marks, these marks describe their products in a way that falls short
of being suggestive; however, the description is misleading. The mark TITANIUM for RVs
might be “merely descriptive” if the vehicles are made of titanium, but is “deceptively misdescriptive” if the RVs do not contain titanium.9 The test is “(i) whether the mark misdescribes the goods to which it applies; and (ii) whether consumers are likely to believe the
misdescription.”10 If the misdescription is one that materially affects purchasing decisions—
for example, if consumers purchased TITANIUM RVs because they thought they were
made of titanium—then the mark goes beyond being deceptive misdescriptive and is flat
out “deceptive” under § 1052(a). The distinction between “deceptive” under § 1052(a) and
“deceptively misdescriptive” under § 1052(e) is important because deceptive marks are
never registrable, while deceptively misdescriptive marks can be registered if they acquire
distinctiveness (see § 1052(f) below).
ii.) Primarily geographically descriptive, or geographically deceptively misdescriptive. For a mark to be geographically descriptive, consumers must assume that the goods or
services originated from the place designated in the mark. So, for example, CALIFORNIA
PIZZA KITCHEN was found geographically descriptive. “[E]ven if applicant may have
opened a branch of its restaurant outside of California, we believe customers encountering
this out-of-state restaurant would believe that the services originated in California. It should
be noted that restaurant services would include the restaurant concept, menu, recipes, etc.,
and even though a customer in Atlanta, Georgia would obviously recognize that the
particular branch of the restaurant was physically located outside of California, he would be
likely to assume that the restaurant services such as the concept, recipes and even possibly
the food originated in the state of California. Thus, we believe that the primary significance
of “CALIFORNIA” in applicant’s mark would be its geographical significance.”11 Registration was thus refused. Similarly, CAROLINA APPAREL for a clothing store was found
geographically descriptive. “Accordingly, although applicant acknowledges that its services
are rendered in the state of North Carolina, the actual items of clothing may come from a
variety of locations, applicant contends. It is applicant’s position, therefore, that the asserted
mark is not primarily geographically descriptive of its services.” The Board was not convinced by this reasoning. “It is clear that the primary significance of the designation
CAROLINA APPAREL, APPAREL being generic and disclaimed by applicant, is geographic. The addition of a generic term to a geographic term does not avoid the refusal of
primary geographic descriptiveness. Inasmuch as the services admittedly do or will come
from the place named in the mark, a public association of the services with the place named
in the mark is presumed. . . . Accordingly, there is clearly an association of applicant’s retail
See Glendale Intern. Corp. v. U.S. Patent & Trademark Office (E.D. Va. 2005) (registration of TITANIUM
for RVs that were not made of titanium was properly rejected).
10
Id.
11
In re California Pizza Kitchen Inc (T.T.A.B. 1988).
9

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clothing store services with the place named in the mark.”12 Registration was refused. Do
you agree with these conclusions? On the other hand, AMAZON for the online marketplace,
SATURN for cars, and ATLANTIC for the magazine are not geographically descriptive because there is no goods/place association. While geographically descriptive marks are initially unregistrable, they can be registered if they acquire distinctiveness (see 1052(f) below).
Examples of “geographically deceptively misdescriptive” marks include HAVANA
CLUB for cigars that were not from Cuba and NEAPOLITAN for sausages made in
Florida instead of Naples.13 However, a misleading mark might not be deemed geographically deceptively misdescriptive if it does not mislead a “substantial portion of the
intended audience.” MOSKOVSKAYA—Russian for “of or from Moscow”—on vodka
that was not from Moscow was initially rejected for registration, but this decision was
vacated and remanded because it was not clear that the mark would deceive a substantial
portion of relevant consumers, as only 0.25% of the U.S. population speaks Russian.14
Consider the following: the mark SWISS ARMY KNIFE is used on penknives that are
made in China rather than Switzerland. Is the mark registrable? Why or why not?
Some geographical terms, such as SWISS cheese and PEKING duck, have become
generic and cannot serve as trademarks at all. But if geographical terms cease being
generic, and gain secondary meaning, they may become registrable. At one time,
BUDWEISER was the generic term for beer brewed according to a method pioneered in
the town of Budweis. However, it is now associated in the minds of consumers with
Anheuser-Busch and registrable in the US (though not in the EU because of preexisting
use of the mark by the Czech company Budvar).
iii.) Primarily merely a surname. On its face, this prohibition focuses on surnames rather
than full names. So JOHN SMITH might be registrable, but SMITH would not, absent
secondary meaning (see 1052(f) below). What is the general policy behind this provision?
Why not allow a business owner to register SMITH for her products, without a showing of
secondary meaning? Of course, many surnames have secondary meaning and are famous
registered marks, such as FORD, DUPONT, or MCDONALD’S. What about J. SMITH—
is this still “primarily merely a surname”? How about J.D. SMITH? SMITH ELECTRONICS? The touchstone for answering such questions is “the primary significance of
the mark to the purchasing public.”15 So, for example, when surnames are combined with
other terms (DELL COMPUTERS, DUKE UNIVERSITY), registrability would turn on
whether or not the public perceives the mark as a whole as “primarily merely a surname.”
Similarly, when a mark consists of a surname that is a double entendre (BIRD, COOK,
KING), courts will look at the predominant meaning in the minds of consumers
encountering the mark (does BIRD refer to the surname or the feathered vertebrate?). When
the name of a famous person is used as a mark, it is unlikely to be “primarily merely a
surname” because the public will instead associate it with the well-known personality.16
In re Carolina Apparel (T.T.A.B. 1998).
Corporacion Habanos, S.A. v. Anncas, Inc (T.T.A.B. 2008); In re Jack’s Hi-Grade Foods, Inc (T.T.A.B.
1985).
14
In re Spirits Intern., N.V (Fed. Cir. 2009) (noting that if a larger percentage of vodka consumers speak
Russian, or non-Russian speakers would understand MOSKOVSKAYA to suggest “from Moscow,” then this
might amount to a substantial portion).
15
Ex Parte Rivera Watch Corporation (Comm’r Pat. & Trademarks 1955).
16
Michael S. Sachs, Inc. (T.T.A.B. 2000) (“The mark M.C. ESCHER would no more be perceived as
primarily merely a surname than the personal names P.T. Barnum, T.S. Eliot, O.J. Simpson, I.M. Pei and
Y.A. Tittle.”).
12
13

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6.) 1052(f)
Except as expressly excluded in subsections (a), (b), (c), (d), (e)(3), and
(e)(5) of this section, nothing in this chapter shall prevent the
registration of a mark used by the applicant which has become
distinctive of the applicant’s goods in commerce. The Director may
accept as prima facie evidence that the mark has become distinctive,
as used on or in connection with the applicant’s goods in commerce,
proof of substantially exclusive and continuous use thereof as a mark
by the applicant in commerce for the five years before the date on
which the claim of distinctiveness is made. Nothing in this section shall
prevent the registration of a mark which, when used on or in
connection with the goods of the applicant, is primarily geographically
deceptively misdescriptive of them, and which became distinctive of
the applicant’s goods in commerce before December 8, 1993.
Registration of otherwise problematic marks with secondary meaning. Section 2(f)
provides that marks that are merely descriptive, deceptively misdescriptive, primarily
geographically descriptive, or primarily merely a surname can be registered if they acquire
secondary meaning. Proof of exclusive and continuous use in commerce for five years can
constitute prima facie evidence of distinctiveness. As a result of international agreements,
marks that are primarily geographically deceptively misdescriptive can be registered only
if they acquired secondary meaning before December 8, 1993. The remaining categories
of marks addressed in § 1052—those that are deceptive, functional, falsely suggest
connections with people or institutions, use flags or government seals, identify living
individuals, or are likely to cause confusion with another mark—are not registrable even if
they acquire distinctiveness. Why do we allow the registration of some categories of marks
if they acquire secondary meaning and not allow others? What distinctions do you see
between the various categories?
Section 2(f) also specifies proceedings for opposing or canceling marks on the
basis of dilution, which we will deal with later in this book. Only “famous” marks are
protected against dilution. There are two types of dilution, blurring and tarnishment.
“[D]ilution by blurring” is “association arising from the similarity between a mark or
trade name and a famous mark that impairs the distinctiveness of the famous mark.”
“[D]ilution by tarnishment” is “association arising from the similarity between a mark or
trade name and a famous mark that harms the reputation of the famous mark.”17 Note
that this provision requires the owner of the mark to bring the action to refuse registration, not the PTO to refuse it on application.
A mark which would be likely to cause dilution by blurring or dilution by
tarnishment under section 1125(c) of this title, may be refused registration
only pursuant to a proceeding brought under section 1063 of this title. A
registration for a mark which would be likely to cause dilution by blurring
or dilution by tarnishment under section 1125(c) of this title, may be canceled
pursuant to a proceeding brought under either section 1064 of this title or
section 1092 of this title.

17

§ 1125(c).

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PROBLEM 6-1
(We will be returning to this problem in future chapters, but you are asked here only
about one aspect of it.)
Alan Turning is the brilliant computer scientist behind a new program known as
Faceplant. Mr. Turning is a long-time vocal critic of Facebook, the social network site.
He believes that its privacy practices are poor and less than transparent, that it imposes
on its users a tightening spiral of narcissism and withdrawal from the “real” world, and
that its network structure and architecture is overly controlling and anti-competitive.
Mr. Turning is fond of pointing out that Facebook was able to supplant Myspace as the
dominant social network because there was “open competition on the open web.”
Facebook, by contrast, has boasted that its goal is to be the portal through which users
get all their content, e-commerce services and forms of communication. Mr. Turning
believes that Facebook is trying to replace the “open” structure of the World Wide Web
with its own carefully controlled gated community, from which competitors or rivals
can be excluded. His saying, “Their goal is to be the last social network!” has become
something of a rallying cry for Facebook’s critics.
Mr. Turning’s solution was to create a program called Faceplant that he claimed
would restore “control of privacy to the user and control of competition to the free
market.” Mr. Turning’s program simplifies the process of selecting and fine-tuning one’s
privacy preferences by automating the process of jumping through Facebook’s
cumbersome sets of menus. It also “nags” users if they stayed on Facebook for too long,
sending messages such as “Enough with the profile tweaks!” “Only losers stalk their high
school boyfriends!” and “It’s Spring! Go for a walk outside!” Finally, the program
“unlocks” Facebook’s integration with other apps, so that users can use any app or play
any game “inside” Facebook, not merely those approved by the Facebook app store. Mr.
Turning made clear by both the name of his program and the logo he selected that his
product was critical of Facebook. He claimed that the name “Faceplant” was designed to
highlight two of his criticisms – that users become effectively unconscious because of
Facebook’s influence (“doing a faceplant” is a slang expression for falling rapidly asleep)
and that they turn away from more imaginative engagement with forms of culture such
as books, into vegetative recipients of manipulative advertising, mere “plants.”
Both Facebook’s name and its original logo have been registered on the
Principal Register since 2005. The logo is shown below.

Mr. Turning’s logo for Faceplant is based on a modification of that image to send
a very different message.

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Mr. Turning has applied for a Federal trademark on both the name “Faceplant”
and the logo above which changes Facebook’s “like” symbol by rotating it 90 degrees
and adding a raised middle finger. He is giving the app away for free, but he does make
a considerable amount of money from advertisements seen by the millions of users
flocking to his website, Faceplant.com.
Would Mr. Turning be able to register his proposed marks? Why? Would
Facebook be able to oppose registration? On what grounds and how? Bonus
question: If refused registration on the Principal Register, would Mr. Turning be
able to seek any other kind of protection for the name “Faceplant” and the logo?

CHAPTER SEVEN

Trademark Infringement

We have stressed that one has to know the “reach” of an intellectual property right—how
far it extends and what is needed to trigger it—in order to understand what that right
means. Even more than with physical property rights, intellectual property rights are not
absolute. In the cases that follow, we explore the conduct that is found to constitute
infringement under both § 1114, protecting registered marks, and § 1125 protecting
unregistered marks. As we go through these cases, measure the outlines of the property
right revealed by the conduct required to infringe. How do they relate to the basic
rationales of trademark law? We begin with the requirement of use in commerce, turn to
the basic test for infringement, which is ‘likelihood of confusion,’ and conclude with the
reach of contributory trademark infringement.

1.) Use in Commerce
Earlier, we discussed the requirement of use in commerce in order to get a trademark—registered or not. But use in commerce is also a requirement for infringement.

Rescuecom Corp. v. Google, Inc.

562 F.3d 123 (2d Cir. 2009)

LEVAL, Circuit Judge.
Appeal by Plaintiff Rescuecom Corp. from a judgment of the United States District
Court for the Northern District of New York dismissing its action against Google, Inc.,
under Rule 12(b)(6) for failure to state a claim upon which relief may be granted.
Rescuecom’s Complaint alleges that Google is liable under §§ 32 and 43 of the Lanham
Act, 15 U.S.C. §§ 1114 & 1125, for infringement, false designation of origin, and dilution
of Rescuecom’s eponymous trademark. The district court believed the dismissal of the
action was compelled by our holding in 1-800 Contacts, Inc. v. WhenU.Com, Inc., because,
according to the district court’s understanding of that opinion, Rescuecom failed to allege
that Google’s use of its mark was a “use in commerce” within the meaning of § 45 of the
Lanham Act, 15 U.S.C. § 1127. We believe this misunderstood the holding of 1-800. While
we express no view as to whether Rescuecom can prove a Lanham Act violation, an actionable claim is adequately alleged in its pleadings. Accordingly, we vacate the judgment
dismissing the action and remand for further proceedings.
BACKGROUND
Rescuecom is a national computer service franchising company that offers on-site
computer services and sales. Rescuecom conducts a substantial amount of business over
the Internet and receives between 17,000 to 30,000 visitors to its website each month. It
also advertises over the Internet, using many web-based services, including those offered
by Google. Since 1998, “Rescuecom” has been a registered federal trademark, and there
is no dispute as to its validity.

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Google operates a popular Internet search engine, which users access by visiting
www.google.com. Using Google’s website, a person searching for the website of a
particular entity in trade (or simply for information about it) can enter that entity’s name or
trademark into Google’s search engine and launch a search. Google’s proprietary system
responds to such a search request in two ways. First, Google provides a list of links to
websites, ordered in what Google deems to be of descending relevance to the user’s search
terms based on its proprietary algorithms. Google’s search engine assists the public not
only in obtaining information about a provider, but also in purchasing products and
services. If a prospective purchaser, looking for goods or services of a particular provider,
enters the provider’s trademark as a search term on Google’s website and clicks to activate
a search, within seconds, the Google search engine will provide on the searcher’s computer
screen a link to the webpage maintained by that provider (as well as a host of other links
to sites that Google’s program determines to be relevant to the search term entered). By
clicking on the link of the provider, the searcher will be directed to the provider’s website,
where the searcher can obtain information supplied by the provider about its products and
services and can perhaps also make purchases from the provider by placing orders.
The second way Google responds to a search request is by showing context-based
advertising. When a searcher uses Google’s search engine by submitting a search term,
Google may place advertisements on the user’s screen. Google will do so if an advertiser,
having determined that its ad is likely to be of interest to a searcher who enters the particular
term, has purchased from Google the placement of its ad on the screen of the searcher who
entered that search term. What Google places on the searcher’s screen is more than simply
an advertisement. It is also a link to the advertiser’s website, so that in response to such an
ad, if the searcher clicks on the link, he will open the advertiser’s website, which offers not
only additional information about the advertiser, but also perhaps the option to purchase the
goods and services of the advertiser over the Internet. Google uses at least two programs to
offer such context-based links: AdWords and Keyword Suggestion Tool.
AdWords is Google’s program through which advertisers purchase terms (or keywords). When entered as a search term, the keyword triggers the appearance of the advertiser’s ad and link. An advertiser’s purchase of a particular term causes the advertiser’s ad
and link to be displayed on the user’s screen whenever a searcher launches a Google search
based on the purchased search term. Advertisers pay Google based on the number of times
Internet users “click” on the advertisement, so as to link to the advertiser’s website. For
example, using Google’s AdWords, Company Y, a company engaged in the business of
furnace repair, can cause Google to display its advertisement and link whenever a user of
Google launches a search based on the search term, “furnace repair.” Company Y can also
cause its ad and link to appear whenever a user searches for the term “Company X,” a
competitor of Company Y in the furnace repair business. Thus, whenever a searcher interested in purchasing furnace repair services from Company X launches a search of the term
X (Company X’s trademark), an ad and link would appear on the searcher’s screen, inviting
the searcher to the furnace repair services of X’s competitor, Company Y. And if the searcher
clicked on Company Y’s link, Company Y’s website would open on the searcher’s screen,
and the searcher might be able to order or purchase Company Y’s furnace repair services.
In addition to AdWords, Google also employs Keyword Suggestion Tool, a program
that recommends keywords to advertisers to be purchased. The program is designed to
improve the effectiveness of advertising by helping advertisers identify keywords related
to their area of commerce, resulting in the placement of their ads before users who are
likely to be responsive to it. Thus, continuing the example given above, if Company Y
employed Google’s Keyword Suggestion Tool, the Tool might suggest to Company Y that

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it purchase not only the term “furnace repair” but also the term “X,” its competitor’s brand
name and trademark, so that Y’s ad would appear on the screen of a searcher who searched
Company X’s trademark, seeking Company X’s website.
Once an advertiser buys a particular keyword, Google links the keyword to that
advertiser’s advertisement. The advertisements consist of a combination of content and a
link to the advertiser’s webpage. Google displays these advertisements on the search result
page either in the right margin or in a horizontal band immediately above the column of
relevance-based search results. These advertisements are generally associated with a label,
which says “sponsored link.” Rescuecom alleges, however, that a user might easily be
misled to believe that the advertisements which appear on the screen are in fact part of the
relevance-based search result and that the appearance of a competitor’s ad and link in
response to a searcher’s search for Rescuecom is likely to cause trademark confusion as to
affiliation, origin, sponsorship, or approval of service. This can occur, according to the
Complaint, because Google fails to label the ads in a manner which would clearly identify
them as purchased ads rather than search results. The Complaint alleges that when the
sponsored links appear in a horizontal bar at the top of the search results, they may appear
to the searcher to be the first, and therefore the most relevant, entries responding to the
search, as opposed to paid advertisements.
Google’s objective in its AdWords and Keyword Suggestion Tool programs is to
sell keywords to advertisers. Rescuecom alleges that Google makes 97% of its revenue
from selling advertisements through its AdWords program. Google therefore has an
economic incentive to increase the number of advertisements and links that appear for
every term entered into its search engine.
Many of Rescuecom’s competitors advertise on the Internet. Through its Keyword
Suggestion Tool, Google has recommended the Rescuecom trademark to Rescuecom’s
competitors as a search term to be purchased. Rescuecom’s competitors, some responding
to Google’s recommendation, have purchased Rescuecom’s trademark as a keyword in
Google’s AdWords program, so that whenever a user launches a search for the term
“Rescuecom,” seeking to be connected to Rescuecom’s website, the competitors’ advertisement and link will appear on the searcher’s screen. This practice allegedly allows
Rescuecom’s competitors to deceive and divert users searching for Rescuecom’s website.
According to Rescuecom’s allegations, when a Google user launches a search for the term
“Rescuecom” because the searcher wishes to purchase Rescuecom’s services, links to
websites of its competitors will appear on the searcher’s screen in a manner likely to cause
the searcher to believe mistakenly that a competitor’s advertisement (and website link) is
sponsored by, endorsed by, approved by, or affiliated with Rescuecom.
The district court granted Google’s 12(b)(6) motion and dismissed Rescuecom’s
claims. The court believed that our 1-800 decision compels the conclusion that Google’s
allegedly infringing activity does not involve use of Rescuecom’s mark in commerce,
which is an essential element of an action under the Lanham Act.
DISCUSSION
I. Google’s Use of Rescuecom’s Mark Was a “Use in Commerce”
The district court believed that this case was on all fours with 1-800, and that its
dismissal was required for the same reasons as given in 1-800. We believe the cases are
materially different. The allegations of Rescuecom’s complaint adequately plead a use
in commerce.
In 1-800, the plaintiff alleged that the defendant infringed the plaintiff’s trademark
through its proprietary software, which the defendant freely distributed to computer users

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who would download and install the program on their computer. The program provided
contextually relevant advertising to the user by generating pop-up advertisements to the
user depending on the website or search term the user entered in his browser. For example,
if a user typed “eye care” into his browser, the defendant’s program would randomly
display a pop-up advertisement of a company engaged in the field of eye care. Similarly,
if the searcher launched a search for a particular company engaged in eye care, the
defendant’s program would display the pop-up ad of a company associated with eye care.
The pop-up ad appeared in a separate browser window from the website the user accessed,
and the defendant’s brand was displayed in the window frame surrounding the ad, so that
there was no confusion as to the nature of the pop-up as an advertisement, nor as to the
fact that the defendant, not the trademark owner, was responsible for displaying the ad, in
response to the particular term searched.
Sections 32 and 43 of the Act, which we also refer to by their codified designations,
15 U.S.C. §§ 1114 & 1125, inter alia, impose liability for unpermitted “use in commerce”
of another’s mark which is “likely to cause confusion, or to cause mistake, or to deceive,”
§ 1114, “as to the affiliation . . . or as to the origin, sponsorship or approval of his or her
goods [or] services . . . by another person.” § 1125(a)(1)(A). The 1-800 opinion looked
to the definition of the term “use in commerce” provided in § 45 of the Act, 15 U.S.C.
§ 1127. That definition provides in part that “a mark shall be deemed to be in use in
commerce . . . (2) on services when it is used or displayed in the sale or advertising of
services and the services are rendered in commerce.” 15 U.S.C. § 1127. Our court found
that the plaintiff failed to show that the defendant made a “use in commerce” of the
plaintiff’s mark, within that definition.
At the outset, we note two significant aspects of our holding in 1-800, which distinguish it from the present case. A key element of our court’s decision in 1-800 was that
under the plaintiff’s allegations, the defendant did not use, reproduce, or display the plaintiff’s mark at all. The search term that was alleged to trigger the pop-up ad was the plaintiff’s website address. 1-800 noted, notwithstanding the similarities between the website
address and the mark, that the website address was not used or claimed by the plaintiff as
a trademark. Thus, the transactions alleged to be infringing were not transactions involving
use of the plaintiff’s trademark. 1-800 suggested in dictum that is highly relevant to our
case that had the defendant used the plaintiff’s trademark as the trigger to pop-up an
advertisement, such conduct might, depending on other elements, have been actionable.
Second, as an alternate basis for its decision, 1-800 explained why the defendant’s
program, which might randomly trigger pop-up advertisements upon a searcher’s input
of the plaintiff’s website address, did not constitute a “use in commerce,” as defined in
§ 1127. In explaining why the plaintiff’s mark was not “used or displayed in the sale or
advertising of services,” 1-800 pointed out that, under the defendant’s program,
advertisers could not request or purchase keywords to trigger their ads. Even if an advertiser wanted to display its advertisement to a searcher using the plaintiff’s trademark as
a search term, the defendant’s program did not offer this possibility. In fact, the defendant
“did not disclose the proprietary contents of [its] directory to its advertising clients. . . .”
In addition to not selling trademarks of others to its customers to trigger these ads, the
defendant did not “otherwise manipulate which category-related advertisement will pop
up in response to any particular terms on the internal directory.” The display of a
particular advertisement was controlled by the category associated with the website or
keyword, rather than the website or keyword itself.
The present case contrasts starkly with those important aspects of the 1-800 decision.
First, in contrast to 1-800, where we emphasized that the defendant made no use

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whatsoever of the plaintiff’s trademark, here what Google is recommending and selling to
its advertisers is Rescuecom’s trademark. Second, in contrast with the facts of 1-800 where
the defendant did not “use or display,” much less sell, trademarks as search terms to its
advertisers, here Google displays, offers, and sells Rescuecom’s mark to Google’s
advertising customers when selling its advertising services. In addition, Google encourages
the purchase of Rescuecom’s mark through its Keyword Suggestion Tool. Google’s
utilization of Rescuecom’s mark fits literally within the terms specified by 15 U.S.C.
§ 1127. According to the Complaint, Google uses and sells Rescuecom’s mark “in the sale
. . . of [Google’s advertising] services . . . rendered in commerce.” § 1127.
Google, supported by amici, argues that 1-800 suggests that the inclusion of a trademark in an internal computer directory cannot constitute trademark use. Several district
court decisions in this Circuit appear to have reached this conclusion. This over-reads the
1-800 decision. First, regardless of whether Google’s use of Rescuecom’s mark in its
internal search algorithm could constitute an actionable trademark use, Google’s recommendation and sale of Rescuecom’s mark to its advertising customers are not internal uses.
Furthermore, 1-800 did not imply that use of a trademark in a software program’s internal
directory precludes a finding of trademark use. Rather, influenced by the fact that the
defendant was not using the plaintiff’s trademark at all, much less using it as the basis of a
commercial transaction, the court asserted that the particular use before it did not constitute
a use in commerce. We did not imply in 1-800 that an alleged infringer’s use of a trademark
in an internal software program insulates the alleged infringer from a charge of infringement, no matter how likely the use is to cause confusion in the marketplace. If we were to
adopt Google and its amici’s argument, the operators of search engines would be free to
use trademarks in ways designed to deceive and cause consumer confusion. This is surely
neither within the intention nor the letter of the Lanham Act.
Google and its amici contend further that its use of the Rescuecom trademark is no
different from that of a retail vendor who uses “product placement” to allow one vender to
benefit from a competitors’ name recognition. An example of product placement occurs when
a store-brand generic product is placed next to a trademarked product to induce a customer
who specifically sought out the trademarked product to consider the typically less expensive,
generic brand as an alternative. Google’s argument misses the point. From the fact that
proper, non-deceptive product placement does not result in liability under the Lanham Act, it
does not follow that the label “product placement” is a magic shield against liability, so that
even a deceptive plan of product placement designed to confuse consumers would similarly
escape liability. It is not by reason of absence of a use of a mark in commerce that benign
product placement escapes liability; it escapes liability because it is a benign practice which
does not cause a likelihood of consumer confusion. In contrast, if a retail seller were to be
paid by an off-brand purveyor to arrange product display and delivery in such a way that
customers seeking to purchase a famous brand would receive the off-brand, believing they
had gotten the brand they were seeking, we see no reason to believe the practice would escape
liability merely because it could claim the mantle of “product placement.” The practices
attributed to Google by the Complaint, which at this stage we must accept as true, are
significantly different from benign product placement that does not violate the Act.
Unlike the practices discussed in 1-800, the practices here attributed to Google by
Rescuecom’s complaint are that Google has made use in commerce of Rescuecom’s mark.
Needless to say, a defendant must do more than use another’s mark in commerce to violate
the Lanham Act. The gist of a Lanham Act violation is an unauthorized use, which “is
likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, . . . or as

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to the origin, sponsorship, or approval of . . . goods [or] services.” We have no idea whether
Rescuecom can prove that Google’s use of Rescuecom’s trademark in its AdWords
program causes likelihood of confusion or mistake. Rescuecom has alleged that it does, in
that would-be purchasers (or explorers) of its services who search for its website on Google
are misleadingly directed to the ads and websites of its competitors in a manner which
leads them to believe mistakenly that these ads or websites are sponsored by, or affiliated
with Rescuecom. This is particularly so, Rescuecom alleges, when the advertiser’s link
appears in a horizontal band at the top of the list of search results in a manner which makes
it appear to be the most relevant search result and not an advertisement. What Rescuecom
alleges is that by the manner of Google’s display of sponsored links of competing brands
in response to a search for Rescuecom’s brand name (which fails adequately to identify the
sponsored link as an advertisement, rather than a relevant search result), Google creates a
likelihood of consumer confusion as to trademarks. If the searcher sees a different brand
name as the top entry in response to the search for “Rescuecom,” the searcher is likely to
believe mistakenly that the different name which appears is affiliated with the brand name
sought in the search and will not suspect, because the fact is not adequately signaled by
Google’s presentation, that this is not the most relevant response to the search. Whether
Google’s actual practice is in fact benign or confusing is not for us to judge at this time.
We conclude that the district court was mistaken in believing that our precedent in
1-800 requires dismissal.
CONCLUSION
The judgment of the district court is vacated and the case is remanded for further
proceedings.
Questions:
1.) Rescuecom is a case about “use in commerce” as a requirement of infringement. The
earlier case we looked at, Planetary Motion v. Techsplosion, was about the “use in
commerce” required to gain a mark in the first place, either through the federal registration
process or as a common law mark. Are the two definitions of “use in commerce” the
same? Are there good policy reasons to want them to be different? Would we want a higher
bar to get a trademark, or to infringe it? Or should the line be exactly the same? The
definition of use in commerce is in § 1127. Courts have disagreed as to whether this
definition is relevant only to the question of ownership or also to infringement.
2.) Are you convinced by the court’s distinction between using the company’s domain
name as opposed to its trademark as the basis for search? If I search for Ford.com am I
not doing both?
3.) The court here is careful to distinguish what Google was doing here from the “internal” use of trademarks in the 1-800 Contacts, Inc. v. WhenU.Com case, a case that was
about cost-free, but advertising-supported, software. The argument is that this “internal”
use is different than Google’s commercial use of the trademarks—namely selling them
as contextual prompts for searches. Do you agree?

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People for the Ethical Treatment of
Animals v. Michael T. Doughney

263 F.3d 359 (4th Cir. 2001)

People for the Ethical Treatment of Animals (“PETA”) sued Michael Doughney (“Doughney”) after he registered the domain name peta.org and created a website called “People
Eating Tasty Animals.” PETA alleged claims of service mark infringement under 15 U.S.C.
§ 1114 and Virginia common law, unfair competition under 15 U.S.C. § 1125(a) and Virginia common law, and service mark dilution and cybersquatting under 15 U.S.C. § 1123(c).
[Sic. The court presumably meant § 1125(d).] Doughney appeals the district court’s decision
granting PETA’s motion for summary judgment and PETA cross-appeals the district court’s
denial of its motion for attorney’s fees and costs. Finding no error, we affirm.
I.
PETA is an animal rights organization with more than 600,000 members
worldwide. PETA “is dedicated to promoting and heightening public awareness of
animal protection issues and it opposes the exploitation of animals for food, clothing,
entertainment and vivisection.”
Doughney is a former internet executive who has registered many domain names
since 1995. For example, Doughney registered domain names such as dubyadot.com,
dubyadot.net, deathbush.com, RandallTerry.org (Not Randall Terry for Congress),
bwtel.com (Baltimore-Washington Telephone Company), pmrc.org (“People’s Manic
Repressive Church”), and ex-cult.org (Ex-Cult Archive). At the time the district court
issued its summary judgment ruling, Doughney owned 50–60 domain names.
Doughney registered the domain name peta.org in 1995 with Network Solutions,
Inc. (“NSI”). When registering the domain name, Doughney represented to NSI that the
registration did “not interfere with or infringe upon the rights of any third party,” and that
a “non-profit educational organization” called “People Eating Tasty Animals” was
registering the domain name. Doughney made these representations to NSI despite
knowing that no corporation, partnership, organization or entity of any kind existed or
traded under that name. Moreover, Doughney was familiar with PETA and its beliefs and
had been for at least 15 years before registering the domain name.
After registering the peta.org domain name, Doughney used it to create a website
purportedly on behalf of “People Eating Tasty
Animals.” Doughney claims he created the
website as a parody of PETA. A viewer accessing
the website would see the title “People Eating
Tasty Animals” in large, bold type. Under the
title, the viewer would see a statement that the
website was a “resource for those who enjoy
eating meat, wearing fur and leather, hunting,
and the fruits of scientific research.” The website
contained links to various meat, fur, leather,
hunting, animal research, and other organizations, all of which held views generally antithetical to PETA’s views. Another statement on the
website asked the viewer whether he/she was Doughney’s website

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“Feeling lost? Offended? Perhaps you should, like, exit immediately.” The phrase “exit
immediately” contained a hyperlink to PETA’s official website.
Doughney’s website appeared at “www.peta.org” for only six months in 1995–96.
In 1996, PETA asked Doughney to voluntarily transfer the peta.org domain name to PETA
because PETA owned the “PETA” mark (“the Mark”), which it registered in 1992. See
U.S. Trademark Registration No. 1705,510. When Doughney refused to transfer the
domain name to PETA, PETA complained to NSI, whose rules then required it to place the
domain name on “hold” pending resolution of Doughney’s dispute with PETA. Consequently, Doughney moved the website to www.mtd.com/tasty and added a disclaimer
stating that “People Eating Tasty Animals is in no way connected with, or endorsed by,
People for the Ethical Treatment of Animals.”
In response to Doughney’s domain name dispute with PETA, The Chronicle of
Philanthropy quoted Doughney as stating that, “[i]f they [PETA] want one of my domains,
they should make me an offer.” Doughney does not dispute making this statement.
Additionally, Doughney posted the following message on his website on May 12, 1996:
“PeTa” has no legal grounds whatsoever to make even the slightest
demands of me regarding this domain name registration. If they disagree,
they can sue me. And if they don’t, well, perhaps they can behave like
the polite ladies and gentlemen that they evidently aren’t and negotiate a
settlement with me. Otherwise, “PeTa” can wait until the significance and
value of a domain name drops to nearly nothing, which is inevitable as
each new web search engine comes on-line, because that’s how long it’s
going to take for this dispute to play out.
PETA sued Doughney in 1999, asserting claims for service mark infringement,
unfair competition, dilution and cybersquatting. PETA did not seek damages, but sought
only to enjoin Doughney’s use of the “PETA” Mark and an order requiring Doughney to
transfer the peta.org domain name to PETA.
Doughney responded to the suit by arguing that the website was a constitutionallyprotected parody of PETA. Nonetheless, the district court granted PETA’s motion for
summary judgment on June 12, 2000. The district court rejected Doughney’s parody
defense, explaining that
[o]nly after arriving at the “PETA.ORG” web site could the web site
browser determine that this was not a web site owned, controlled or
sponsored by PETA. Therefore, the two images: (1) the famous PETA
name and (2) the “People Eating Tasty Animals” website was not a
parody because [they were not] simultaneous. . . .
A. Trademark Infringement/Unfair Competition
A plaintiff alleging causes of action for trademark infringement and unfair
competition must prove (1) that it possesses a mark; (2) that the defendant used the mark;
(3) that the defendant’s use of the mark occurred “in commerce”; (4) that the defendant
used the mark “in connection with the sale, offering for sale, distribution, or advertising”
of goods or services; and (5) that the defendant used the mark in a manner likely to
confuse consumers. 15 U.S.C. §§ 1114, 1125(a).
There is no dispute here that PETA owns the “PETA” Mark, that Doughney used
it, and that Doughney used the Mark “in commerce.” Doughney disputes the district
court’s findings that he used the Mark in connection with goods or services and that he
used it in a manner engendering a likelihood of confusion.

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1.
To use PETA’s Mark “in connection with” goods or services, Doughney need not
have actually sold or advertised goods or services on the www.peta.org website. Rather,
Doughney need only have prevented users from obtaining or using PETA’s goods or
services, or need only have connected the website to others’ goods or services.
While sparse, existing caselaw on infringement and unfair competition in the
Internet context clearly weighs in favor of this conclusion. For example, in OBH, Inc. v.
Spotlight Magazine, Inc., the plaintiffs owned the “The Buffalo News” registered
trademark used by the newspaper of the same name. The defendants registered the domain
name thebuffalonews.com and created a website parodying The Buffalo News and
providing a public forum for criticism of the newspaper. The site contained hyperlinks to
other local news sources and a site owned by the defendants that advertised Buffalo-area
apartments for rent. The court held that the defendants used the mark “in connection with”
goods or services because the defendants’ website was “likely to prevent or hinder Internet
users from accessing plaintiffs’ services on plaintiffs’ own web site”:
Prospective users of plaintiffs’ services who mistakenly access
defendants’ web site may fail to continue to search for plaintiffs’ web site
due to confusion or frustration. Such users, who are presumably looking
for the news services provided by the plaintiffs on their web site, may
instead opt to select one of the several other news-related hyperlinks
contained in defendants’ web site. These news-related hyperlinks will
directly link the user to other news-related web sites that are in direct
competition with plaintiffs in providing news-related services over the
Internet. Thus, defendants’ action in appropriating plaintiff’s mark has a
connection to plaintiffs’ distribution of its services.
Moreover, the court explained that defendants’ use of the plaintiffs’ mark was in connection with goods or services because it contained a link to the defendants’ apartmentguide website.
Similarly, in Planned Parenthood Federation of America, Inc. v. Bucci, the
plaintiff owned the “Planned Parenthood” mark, but the defendant registered the domain
name plannedparenthood.com. Using the domain name, the defendant created a website
containing information antithetical to the plaintiff’s views. The court ruled that the
defendant used the plaintiff’s mark “in connection with” the distribution of services
because it is likely to prevent some Internet users from reaching
plaintiff’s own Internet web site. Prospective users of plaintiff’s services
who mistakenly access defendant’s web site may fail to continue to
search for plaintiff’s own home page, due to anger, frustration, or the
belief that plaintiff’s home page does not exist.
The same reasoning applies here. As the district court explained, Doughney’s use
of PETA’s Mark in the domain name of his website
is likely to prevent Internet users from reaching [PETA’s] own Internet
web site. The prospective users of [PETA’s] services who mistakenly
access Defendant’s web site may fail to continue to search for [PETA’s]
own home page, due to anger, frustration, or the belief that [PETA’s]
home page does not exist.
Moreover, Doughney’s web site provides links to more than 30 commercial operations
offering goods and services. By providing links to these commercial operations,
Doughney’s use of PETA’s Mark is “in connection with” the sale of goods or services.

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Questions:
1.) Why does the court say “There is no dispute here that PETA owns the “PETA” Mark,
that Doughney used it, and that Doughney used the Mark ‘in commerce.’ Doughney
disputes the district court’s findings that he used the Mark in connection with goods or
services. . . .” If § 1127 is the benchmark, is “using the mark in connection with goods
and services” not part of the definition of “use in commerce” in § 1127?
2.) The court says,
To use PETA’s Mark “in connection with” goods or services, Doughney
need not have actually sold or advertised goods or services on the
www.peta.org website. Rather, Doughney need only have prevented
users from obtaining or using PETA’s goods or services. . . .
It goes on to list several possible ways that this might have happened, including one
known technically as initial interest confusion. Although Doughney’s disclaimer reveals
to the web searcher once they arrive at his domain that this is not the PETA they have
been looking for (bonus for identifying the classical reference), PETA is harmed
nevertheless. The searcher may give up, frustrated, or they may become genuinely
interested in the material offered on the People Eating Tasty Animals site. Either one, the
court suggests, is enough to provide the link to goods or services.
a.) If we read the PETA opinion broadly it could be seen as defining “use in
commerce” to include having a negative, displacing or substitute effect on the
commercial activities of others. If so, what activities are swept into trademark’s domain?
A noisy protest outside a Walmart that includes signs with Walmart’s logo on them? A
website criticizing Apple’s labor practices in China, and urging a consumer boycott, that
superimposes the Apple logo over pictures of sweatshops? How might the court seek to
cabin or curtail such overreach?
b.) The court here uses a concept called “initial interest confusion”—the person
who initially searches for one brand but, finding another because of a momentary
confusion, once informed of her error decides to purchase the new brand instead, or gives
up the search. Initial interest confusion is a controversial topic in trademark law and some
courts have rejected it. “[T]he kind of confusion that is more likely to result [here]
namely, that consumers will realize they are at the wrong site and go to an Internet search
engine to find the right one—is not substantial enough to be legally significant. ‘[A]n
initial confusion on the part of web browsers . . . is not cognizable under trademark law.’”
Hasbro, Inc. v. Clue Computing, Inc. (D. Mass. 1999) (aff’d. 1st Cir. 2000). The Ninth
Circuit has been more equivocal.
Here the important point to note is that the PETA court is using initial interest
confusion (normally, as the name suggests, part of the analysis of whether there is
confusion) as part of the analysis of whether the mark was used in commerce in connection
with goods and services. Under the PETA approach negative initial interest confusion
caused by the use of the mark, such as in a protest website, would appear to be enough to
satisfy the use in commerce test. This aspect of the opinion (itself a contestable
interpretation of the PETA decision) has been widely criticized by scholars and rejected by
some courts. For example, the Ninth Circuit, which has sometimes accepted the idea of
initial interest confusion as one form of actionable infringement, has declined to consider
such effects also to constitute “commercial” activity. Ironically, it did so by quoting the 4th
Circuit, the court that produced the PETA decision.
Nissan Motor argues that disparaging remarks or links to websites with
disparaging remarks at nissan.com is commercial because the comments

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have an effect on its own commerce. . . . However, we have never adopted
an “effect on commerce” test to determine whether speech is commercial
and decline to do so here. We are persuaded by the Fourth Circuit’s
reasoning in a similar case involving negative material about Skippy
Peanut Butter posted on skippy.com, a website hosted by the owner of the
trademark SKIPPY for a cartoon comic strip. CPC, which makes Skippy
Peanut Butter, successfully sought an injunction that ordered removal of
the material. The court of appeals reversed. CPC Int’l, Inc. v. Skippy Inc.
(4th Cir. 2000). Recognizing that criticism was vexing to CPC, the court
emphasized how important it is that “trademarks not be ‘transformed from
rights against unfair competition to rights to control language.’” Id. at 462
(quoting Mark A. Lemley, “The Modern Lanham Act and the Death of
Common Sense,” 108 Yale L.J. 1687, 1710–11 (1999)). It held that speech
critical of CPC was informational, not commercial speech. Likewise here,
links to negative commentary about Nissan Motor, and about this
litigation, reflect a point of view that we believe is protected. Nissan
Motor Co. v. Nissan Computer Corp. (9th Cir. 2004).

2.) Likelihood of Confusion
“Likelihood of confusion” is a, perhaps the, fundamental test in trademark law. It
is the standard for determining trademark infringement of both registered marks under
§ 1114 and unregistered marks under § 1125(a), and for determining whether
§ 1052(d) bars federal registration of a mark (as you read in Chapter 6). (It is also
used for assessing infringement of state marks.) The basic question is whether,
because of the similarity of the defendant’s and plaintiff’s marks, the consumer is likely
to mistakenly associate the defendant’s goods or services with the plaintiff.
Each federal circuit has developed a multifactor test to “help grapple with the
‘vexing’ problem of resolving the likelihood of confusion issue” (quoting Lois
Sportswear v. Levi Strauss, below). These tests are named after seminal cases, so the
Ninth Circuit uses the Sleekcraft test, the Fourth Circuit the Pizzeria Uno test, the Eighth
Circuit the SquirtCo test, etc.; in Lois Sportswear, you’ll see an application of the Second
Circuit’s Polaroid test. While the formulation and terminology of these tests vary from
circuit to circuit, the key factors are similar. All of the circuits look at some variant of the
following: the similarity of the plaintiff’s and defendant’s marks, the proximity of
their goods or services, the strength of the plaintiff’s mark, and evidence of actual
confusion. Twelve circuits explicitly consider the defendant’s intent, and ten circuits
consider consumer sophistication. Before turning to Lois Sportswear’s treatment of
these factors, here is a summary of some case law and considerations.
Similarity of the marks. Remember from Chapter 4 that trademark rights cover
mark X for product Y, not the word or symbol itself. Therefore, this factor is linked to
the next one (proximity of the products), and the degree of similarity necessary to prove
infringement varies inversely with the proximity of the goods or services. “Delta” for
faucets does not infringe “Delta” for airlines, but “Deltoid Airlines” might. For closely
related products, a lesser degree of resemblance between the marks may suffice; for
linked but dissimilar products, something closer to exact identity may be required, while
for completely distinct categories of goods or services even identity is irrelevant.

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Similarity is not confined to the appearance of a mark. Marks are compared in
terms of sight, sound, meaning, and overall “commercial impression.” Of course,
establishing the commercial impression that a trademark ultimately conjures in the mind
of the consumer is not an exact science. Do you think the following marks are confusingly similar? Why or why not?
• “Bonamine” and “Dramamine,” both for motion sickness drugs
• “Blue Lightning” and “Blue Thunder,” both for automotive audio components
• “Beauty Sleep” and “BeautyRest,” both for mattresses
• “RestMaster” and “Sleepmaster,” both for mattresses
These are all based on actual cases; likelihood of confusion was found in the first
three examples, but not in the fourth. And remember the § 1052(d) hypotheticals from
Chapter 6? “Mister Stain” was found confusingly similar to “Mr. Clean,” but “Master
Kleen” for dry cleaning services was not. And registration of the silhouette mark for
health and beauty aids was refused on confusion grounds, while registration of the wave
mark for seafood was not.
Proximity of the goods or services. The focus here is on whether the plaintiff’s
and defendant’s products are sufficiently related in the mind of the consumer to support
a finding of likelihood of confusion; the products in question need not be in direct
competition. As mentioned above, this factor is connected to the similarity of the marks:
the more similar the marks, the less related the goods or services need to be to suggest
potential confusion. The multifactor tests in some circuits include related inquiries into
how the products are marketed, channels of trade, their comparative quality, and whether
the plaintiff will “bridge the gap” into the defendant’s market.
Not surprisingly, analysis of this factor is highly dependent on context and evidence.
For example, while food or beverage products are frequently found to be related to
restaurant services, there is no per se rule connecting these categories; the evidence must
show “something more” to support a finding of likelihood of confusion. This requirement
was met with the following marks: COLOMBIANO COFFEE HOUSE for “providing food
and drink” and COLOMBIAN for “coffee” (coffee houses emphasize coffee beverages);
OPUS ONE for “restaurant services” and OPUS ONE for “wine” (the “Opus One”
restaurant actually served “Opus One” wine); and AMAZON (with a parrot design) for
“chili sauce and pepper sauce” and AMAZON for “restaurant services” (restaurants
commonly market their own sauces). See Trademark Manual of Examining Procedure §
1207.01(a)(ii)(A). But the evidence pointed the other way with BLUE MOON (with an
associated moon design) for “beer” and BLUE MOON (with a different moon design) for
“restaurant services.” In In re Coors Brewing Co. (Fed. Cir. 2003), the Federal Circuit
acknowledged that the BLUE MOON marks were similar, but found that even though some
restaurants make their own beer and some breweries are also restaurants, the “degree of
overlap between the sources of restaurant services and the sources of beer is de minimis.”
Despite the existing BLUE MOON restaurant, Coors successfully registered BLUE MOON
as a mark for beer, by presenting evidence that there were around 815,000 restaurants in the
US and only 1,450 breweries (this number has doubtless increased since then), and the court
reasoned that even if all of these breweries were also restaurants, this would only account
for a minuscule percentage of overall restaurants (fewer than one in 500).
Strength of the plaintiff’s mark. Stronger marks enjoy broader protection against
trademark infringement, with strength being defined both in terms of inherent
distinctiveness (recall the spectrum of distinctiveness in Chapter 5—fanciful, arbitrary,
and suggestive marks are inherently distinctive) and acquired distinctiveness (the amount

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173

of fame or consumer recognition a mark has achieved). The theory is that the more distinctive or widely recognized the mark, the more likely it is to come to mind when purchasers encounter a similar mark. Do you agree? Are stronger marks more susceptible to
confusion? Or does their strength mean consumers will more easily distinguish them
from similar marks?
Actual confusion. Because the question is likelihood of confusion, evidence of
actual confusion is not necessary to establish trademark infringement. However, such
evidence—if convincing, and not beset by methodological defects or bias—can be
persuasive proof of likelihood of confusion.
Survey evidence (discussed briefly in Chapter 5) can be used to show actual confusion (or lack thereof). Two prominent approaches are the “Eveready” format and the
“Squirt” format (from Union Carbide Corp. v. Ever-Ready, Inc. (7th Cir. 1976) and Squirt
Co. v. Seven-Up Co. (8th Cir. 1980)). An “Eveready” survey shows respondents the defendant’s product and asks: “Who do you think puts out [the defendant’s product] shown here?”
“What makes you think so?” “Please name any other products put out by the same concern
which puts out the [defendant’s product] shown here.” Responses referring to the plaintiff
or its products suggest consumer confusion. A “Squirt” survey shows respondents both defendant’s and plaintiff’s products and asks: “Do you think [defendant’s and plaintiff’s products] are put out by the same company or by different companies?” “What makes you think
that?” This format has been criticized for “priming” the participants to find confusion where
none exists, and for fabricating marketplace conditions. (In practice, courts may limit the
admissibility of “Squirt” surveys to cases in which the products in question also appear sideby-side in the real world.) Which approach do you think is preferable for plaintiffs whose
mark is not well-known? For plaintiffs whose mark is famous and readily called to mind?
Note that while surveys can be important in likelihood of confusion cases, they are
also too expensive for many litigants. As a result, survey evidence features prominently in
high-profile litigation, but studies suggest a more limited role in trademark cases as a
whole. See Barton Beebe, An Empirical Study of the Multifactor Tests for Trademark Infringement, 94 Calif. L. Rev. 1581 (2006).
Defendant’s intent. If the focus is on the confusion of the consumer, why is the
defendant’s intent relevant? If I’m not confused about the source of a product, no amount
of bad faith on the part of its producer will change that. Accordingly, courts have
acknowledged that this factor is “more pertinent to issues other than likelihood of confusion, such as harm to plaintiff's reputation and choice of remedy.” Virgin Enterprises
Ltd. v. Nawab (2d Cir. 2003).
Are some of these factors more important than others in practice? An empirical
study by Professor Barton Beebe suggests that the similarity of the marks tends to be the
most important factor, and that in order to show a likelihood of confusion, a plaintiff
must prevail on it (out of 192 opinions studied by Professor Beebe, the 65 opinions
finding that the marks were not similar all ultimately found no likelihood of confusion).
See Barton Beebe, An Empirical Study of the Multifactor Tests for Trademark Infringement, 94 CALIF. L. REV. 1581 (2006). Interestingly, the study suggests that the second
most important factor is the defendant’s intent, notwithstanding the observation above
that it’s more pertinent to peripheral issues (of 67 opinions finding bad faith, 65 also
decided confusion was likely, and the 2 opinions deciding otherwise also found that the
marks weren’t similar). After these two factors, the more important factors appeared to
be (in order of decreasing importance) the proximity of the products, evidence of actual
confusion, and the strength of the plaintiff’s mark.

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Modern trademark law has expanded the scope of likelihood of confusion beyond
“source” confusion (I mistakenly buy “Duke” ketchup because I think it’s made by the
producers of delicious “Duke’s” mayonnaise, only to discover it’s a lower quality condiment). Trademark infringement also encompasses “sponsorship or affiliation” confusion (I buy “Duke” ketchup because I’m a Duke fan and assume there must have been
some licensing deal with Duke University, not because I think Duke University made the
ketchup or have any corresponding expectations about its quality). Should Duke
University be able to claim trademark infringement? Section 1125(a) explicitly refers not
only to confusion as to “origin,” but also as to “affiliation, connection, or association”
and “sponsorship or approval.” But some courts have stretched this kind of penumbral
confusion to extremes. In one example, the owner of the familiar “Dairy Queen”
trademark for frozen dairy treats was able to enjoin New Line Productions from using
the title “Dairy Queens” for a mockumentary about beauty contests in the rural
Minnesota (part of “dairy country”). American Dairy Queen v. New Line Productions
(D. Minn. 1998) (noting that consumers might think New Line had received Dairy
Queen’s “endorsement or permission.”) For a criticism of this trend, see Mark A. Lemley
& Mark McKenna, Irrelevant Confusion, 62 STAN. L. REV. 413 (2010).
Other expansive readings of “likelihood of confusion” extend it beyond the point
of sale. You’ve just encountered “initial interest confusion” in Rescuecom and PETA. The
Lois Sportswear case below deals with “post-sale confusion” on the other side of the
purchasing decision.

Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co.

799 F.2d 867 (2d Cir. 1986)

TIMBERS, Circuit Judge.
Appellee is a world famous clothing manufacturer. One of its most popular products
is a line of casual pants known as Levi Jeans. Appellee began manufacturing its denim
jeans in the 1850s. Each pair of jeans contains numerous identifying features. One such
feature is a distinct back pocket stitching pattern. This pattern consists of two intersecting
arcs which roughly bisect both pockets of appellee’s jeans. Appellee has an incontestable
federal trademark in this stitching pattern. See 15 U.S.C. § 1065 (1982). Appellee has used
this pattern on all its jeans continuously since 1873. In many ways the back pocket stitching
pattern has become the embodiment of Levi Jeans in the minds of jeans buyers. The record
is replete with undisputed examples of the intimate association between the stitching
pattern and appellee’s products in the buying public’s mind. Not only has appellee spent
considerable sums on promoting the stitching pattern, but various competitors have run
nationwide advertisement campaigns touting the advantages of their jeans’ back pockets
over appellee’s. In addition, one of the largest chains of jeans retailers, the Gap Stores, has
run numerous advertisements featuring pictures of appellee’s back pocket stitching pattern
as the entire visual portion of the ad. The record also contains numerous examples of the
public’s phenomenal reaction to the stitching pattern and the jeans it epitomizes. These
examples range from national magazine cover stories to high school yearbook dedications.
Appellant Lois Sportswear, U.S.A., Inc. (“Lois”) imports into the United States
jeans manufactured in Spain by Textiles Y Confecciones Europeas, S.A. (“Textiles”).
The instant litigation was commenced because appellants’ jeans bear a back pocket
stitching pattern substantially similar to appellee’s trademark stitching pattern. On appeal

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appellants do not challenge the district court’s conclusion
that the two stitching patterns are substantially similar. Nor
could they; the two patterns are virtually identical when
viewed from any appreciable distance. In fact, the results
from a survey based on showing consumers videotapes of
the back pockets of various jeans, including appellants’, indicate that 44% of those interviewed mistook appellants’
jeans for appellee’s jeans. Appellants instead rely on their
use of various labels, some permanent and some temporary,
to distinguish their jeans and defeat appellee’s trademark
Levi Strauss stitching pattern.
infringement and unfair competition claims.
On July 12, 1985 the court held a hearing on the mo- Image from the USPTO
tions at which depositions, exhibits and memoranda were trademark record.
received. Most of the evidence sought to show that appellee’s back pocket stitching
pattern had achieved a strong secondary meaning, i.e., that jeans consumers associated
the pattern with appellee’s products. This evidence is undisputed for the most part. The
remainder of the evidence is focused on the respective quality of the two products at
issue and the likelihood that consumers somehow would confuse the source of
appellants’ jeans.
The evidence is undisputed that appellants and appellee manufacture and sell a
similar product. While stratifying the jeans market with various styles and grades seems
to be the current rage, there can be no dispute that the parties before us compete to sell
their jeans to the public. The record does indicate that appellants have attempted to target
their “designer” jeans at a decidedly upscale market segment. There also was evidence,
however, that appellants’ jeans were selling at deep discount in cut-rate clothing outlets.
Moreover, there was substantial evidence which indicated that appellee’s jeans, although
originally marketed as work pants, had achieved a certain elan among the fashion conscious. The evidence suggests that appellee’s jeans have achieved fad popularity in all
sectors of the jeans market. Finally, appellee produced affidavits stating that it was
planning to enter the designer jeans market.
In short, the uncontested facts show that appellants’ jeans exhibit a back pocket
stitching pattern substantially similar to appellee’s incontestable registered trademark
back pocket stitching pattern. The record also makes plain that the stitching pattern is
closely associated with appellee’s jeans, and that appellants’ use of the stitching pattern
on arguably competing jeans at least presents the possibility that consumers will be
confused as to the source of appellants’ jeans or the relationship between appellants and
appellee. With these facts in mind, we turn to the relevant law of trademark infringement
and unfair competition in our Court.
II.
Appellants’ arguments, for the most part, focus only on the likelihood that
consumers will buy appellants’ jeans thinking they are appellee’s jeans due to the similar
stitching patterns. Appellants point to their labeling as conclusive proof that no such
confusion is likely. We agree with the district court, however, that the two principal areas
of confusion raised by appellants’ use of appellee’s stitching pattern are: (1) the
likelihood that jeans consumers will be confused as to the relationship between
appellants and appellee; and (2) the likelihood that consumers will be confused as to the
source of appellants’ jeans when the jeans are observed in the post-sale context. We hold

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that the Lanham Act, 15 U.S.C. §§ 1051–1127 (1982), as interpreted by our Court, was
meant to prevent such likely confusion.
As a threshold matter, in the past we have found it useful to decide how much
protection a particular trademark is to be given by first determining what type of trademark is at issue. In Abercrombie & Fitch Co. v. Hunting World, Inc., Judge Friendly set
forth what has become the governing law of trademark classification: “Arrayed in an
ascending order which roughly reflects their eligibility to trademark status and the degree
of protection accorded, these classes are (1) generic, (2) descriptive, (3) suggestive, and
(4) arbitrary or fanciful.”
Superimposed on this framework is the rule that registered trademarks are
presumed to be distinctive and should be afforded the utmost protection.
It is clear under this framework that appellee’s back pocket stitching pattern
deserves the highest degree of protection. First, the mark is registered and incontestable.
This, of course, entitles the mark to significant protection. Second, the mark, being a
fanciful pattern of interconnected arcs, is within Judge Friendly’s fourth category and is
entitled to the most protection the Lanham Act can provide. In deciding the likelihood of
confusion issues, therefore, appellee’s mark is entitled to a liberal application of the law.
Turning to the principal issues under the Lanham Act, in either a claim of
trademark infringement under § 32 or a claim of unfair competition under § 43, a prima
facie case is made out by showing the use of one’s trademark by another in a way that is
likely to confuse consumers as to the source of the product. See Mushroom Makers, Inc.
v. R.G. Barry Corp. (2d Cir. 1978) (“The ultimate inquiry in most actions for false
designation of origin, as with actions for trademark infringement, is whether there exists
a ‘likelihood that an appreciable number of ordinarily prudent purchasers [will] be
misled, or indeed simply confused, as to the source of the goods in question.’”).
In deciding the issue of likelihood of confusion in the instant case, the district court
relied on the multifactor balancing test set forth by Judge Friendly in Polaroid Corp. v.
Polarad Electronics Corp. (2d Cir. 1961). At the outset, it must be remembered just what
the Polaroid factors are designed to test. The factors are designed to help grapple with the
“vexing” problem of resolving the likelihood of confusion issue. Therefore, each factor
must be evaluated in the context of how it bears on the ultimate question of likelihood of
confusion as to the source of the product. It also must be emphasized that the ultimate
conclusion as to whether a likelihood of confusion exists is not to be determined in
accordance with some rigid formula. The Polaroid factors serve as a useful guide through
a difficult quagmire. Appellants place great reliance on their labeling as a means of
preventing any confusion. While such labeling may prevent appellants’ use of appellee’s
stitching pattern from confusing consumers at the point of sale into believing that appellee
manufactured and marketed appellants’ jeans, the labeling does nothing to alleviate other
forms of likely confusion that are equally actionable.
First, a distinct possibility raised by appellants’ use of appellee’s immediately
identifiable stitching pattern is that consumers will be confused into believing that
appellee either somehow is associated with appellants or has consented to appellants’ use
of its trademark. In Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd. (2d Cir.
1979), we held that “[t]he public’s belief that the mark’s owner sponsored or otherwise
approved of the use of the trademark satisfies the confusion requirement.” Likewise, in
Grotrian, Helfferich, Schulz, Th. Steinweg Nachf. v. Steinway & Sons (2d Cir. 1975), we
held that “[t]he harm to [the trademark owner], rather, is the likelihood that a consumer,
hearing the [similar sounding] name and thinking it had some connection with [the
trademark owner] would consider [the product] on that basis. The [similar sounding]

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name therefore would attract potential customers based on the reputation built up by [the
trademark owner] in this country for many years.” In Steinway, we held that the Lanham
Act was designed to prevent a competitor from such a bootstrapping of a trademark
owner’s goodwill by the use of a substantially similar mark. Therefore, the Polaroid
factors must be applied in the instant case with an eye to how they bear on the likelihood
that appellants’ use of appellee’s trademark stitching pattern will confuse consumers into
thinking that appellee is somehow associated with appellants or has consented to their
use of the stitching pattern regardless of labeling.
Second, it is equally clear that post-sale confusion as to source is actionable under the
Lanham Act. In the instant case, this post-sale confusion would involve consumers seeing
appellant’s jeans outside of the retail store, perhaps being worn by a passer-by. The
confusion the Act seeks to prevent in this context is that a consumer seeing the familiar
stitching pattern will associate the jeans with appellee and that association will influence his
buying decisions. Clearly, in this post-sale context appellants’ labels, most of which having
been long since discarded, will be of no help. The Ninth Circuit case of Levi Strauss & Co.
v. Blue Bell, Inc. (9th Cir. 1980), is very persuasive on this point. In Blue Bell, the court
upheld an injunction preventing the manufacturer of Wrangler jeans from using a back
pocket name tag similar to the one used on Levi’s jeans. The court held that Wrangler’s
extensive labeling, including its own name on the very tag at issue, was not sufficient to
avoid confusion as to source in the post-sale context. The court held that “Wrangler’s use of
its projecting label is likely to cause confusion among prospective purchasers who carry
even an imperfect recollection of Strauss’s mark and who observe Wrangler’s projecting
label after the point of sale.” Precisely the same considerations apply in the instant case. The
Polaroid factors therefore must be applied with an eye toward post-sale confusion also.
The first factor—the strength of the mark—weighs heavily in appellee’s favor. We
have defined the strength of a mark as “its tendency to identify the goods sold under the
mark as emanating from a particular source.” As discussed above, appellee’s back pocket
stitching pattern is a fanciful registered trademark with a very strong secondary meaning.
Virtually all jeans consumers associate the stitching pattern with appellee’s products. We
agree with the district court that the evidence indicates as a matter of law that appellee’s
stitching pattern is a very strong mark. This factor is crucial to the likelihood of confusion
analysis since appellee’s intimate association with the trademark makes it much more
likely that consumers will assume wrongly that appellee is somehow associated with
appellants’ jeans or has authorized the use of its mark, or, in the post-sale context, that
appellee has manufactured the jeans.
The second factor—the degree of similarity of the marks—also weighs in favor of
appellee. As the district court correctly observed, the two stitching patterns are “essentially
identical.” Both patterns consist of two intersecting arcs placed in the exact same position
on the back pockets of the jeans. The only difference—the fact that appellants’ arcs extend
3/4 inch further down the pocket at their intersection—is imperceptible at any significant
distance. In light of the fact that the stitching pattern is in no way dictated by function and
an infinite number of patterns are possible, the similarity of the two patterns is striking.
When this striking similarity is factored into the likelihood of confusion analysis, its great
importance becomes clear. In view of the trademark’s strength, this nearly identical
reproduction of the stitching pattern no doubt is likely to cause consumers to believe that
appellee somehow is associated with appellants or at least has consented to the use of its
trademark. In the post-sale context, this striking similarity no doubt will cause consumers
to transfer the goodwill they feel for appellee to appellants, at least initially. This misuse of

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goodwill is at the heart of unfair competition. Appellants’ reliance on the effect of their
labeling with respect to this factor underscores their misguided focus on only the most
obvious form of consumer confusion. Appellants’ labeling in no way dispels the likelihood
that consumers will conclude that appellants’ jeans are somehow connected to appellee by
virtue of the nearly identical stitching patterns.
The third factor—the proximity of the products—also weighs in favor of appellee.
Both products are jeans. Although appellants argue that their jeans are designer jeans and
are sold to a different market segment than appellee’s jeans, there is significant evidence in
the record of an overlap of market segments. Moreover, even if the two jeans are in different
segments of the jeans market, such a finding would not switch this factor to appellants’ side
of the scale. We are trying to determine if it is likely that consumers mistakenly will assume
either that appellants’ jeans somehow are associated with appellee or are made by appellee.
The fact that appellants’ jeans arguably are in a different market segment makes this type of
confusion more likely. Certainly a consumer observing appellee’s striking stitching pattern
on appellants’ designer jeans might assume that appellee had chosen to enter that market
segment using a subsidiary corporation, or that appellee had allowed appellants’ designers
to use appellee’s trademark as a means of reaping some profits from the designer jeans fad
without a full commitment to that market segment. Likewise, in the post-sale context a
consumer seeing appellants’ jeans on a passer-by might think that the jeans were appellee’s
long-awaited entry into the designer jeans market segment. Motivated by this mistaken
notion—appellee’s goodwill—the consumer might then buy appellants’ jeans even after
discovering his error. After all, the way the jeans look is a primary consideration to most
designer jeans buyers.
The fourth factor—bridging the gap—is closely related to the proximity of the
products and does not aid appellants’ case. Under this factor, if the owner of a trademark
can show that it intends to enter the market of the alleged infringer, that showing helps to
establish a future likelihood of confusion as to source. We have held that the trademark
laws are designed in part to protect “the senior user’s interest in being able to enter a related
field at some future time.” In the instant case, the district court rejected as irrelevant
appellee’s affidavits which stated that appellee was planning to enter the designer jeans
market, since the affidavits did not assert that appellee’s designer jeans entry would utilize
the stitching pattern. We do not believe, however, that the form appellee’s entry into the
market segment might take is especially relevant to the likelihood of confusion issue.
Appellee’s entry into the market, regardless of the form it might take, would increase the
chances of consumer confusion as to the source of appellants’ jeans because of likely
consumer expectations that appellee’s designer jeans would bear its famous stitching
pattern. If one knew only that appellee had entered the designer jeans market and then saw
appellants’ jeans in a post-sale context, it is very likely that one could confuse them for
appellee’s entry. See McGregor-Doniger (“Because consumer confusion is the key, the
assumptions of the typical consumer, whether or not they match reality, must be taken into
account.”). Also, appellee has an interest in preserving its trademark should it ever wish to
produce designer jeans with the stitching pattern. The Lanham Act is meant to protect this
interest. Scarves by Vera, Inc. (scarf designer has right to prevent use of her tradename on
cosmetics even without proof that she presently intends to enter cosmetic market).
The fifth factor—actual confusion—while not helping appellee, does not really hurt
its case. Appellee’s only evidence of actual confusion was a consumer survey which the
district court discounted due to methodological defects in simulating the post-sale
environment. Of course, it is black letter law that actual confusion need not be shown to
prevail under the Lanham Act, since actual confusion is very difficult to prove and the Act

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requires only a likelihood of confusion as to source. While the complete absence of actual
confusion evidence after a significant period of competition may weigh in a defendant’s
favor, such an inference is unjustified in the instant case in view of the survey evidence,
even with its methodological defects. While these defects go to the weight of the survey, it
is still somewhat probative of actual confusion in the post-sale context. In any event, the
record indicates that sales of appellants’ jeans have been minimal in the United States thus
far and there has been little chance for actual confusion as yet. It would be unfair to penalize
appellee for acting to protect its trademark rights before serious damage has occurred.
The sixth factor—the junior user’s good faith in adopting the mark—weighs in
favor of appellants. The evidence before the district court, when viewed in a light
favorable to appellants, indicates that appellants happened on the stitching pattern
serendipitously. It must be remembered, however, that intentional copying is not a
requirement under the Lanham Act. Also, intent is largely irrelevant in determining if
consumers likely will be confused as to source. The history of advertising suggests that
consumer reactions usually are unrelated to manufacturer intentions.
The seventh factor—the quality of the respective goods—does add some weight
to appellants’ position. Appellee has conceded that appellants’ jeans are not of an inferior
quality, arguably reducing appellee’s interest in protecting its reputation from
debasement. It must be noted, however, that under the circumstances of this case the
good quality of appellants’ product actually may increase the likelihood of confusion as
to source. Particularly in the post-sale context, consumers easily could assume that
quality jeans bearing what is perceived as appellee’s trademark stitching pattern to be a
Levi’s product. The fact that appellants have produced a quality copy suggests that the
possibility of their profiting from appellee’s goodwill is still likely.
The eighth and final factor—the sophistication of relevant buyers—does not,
under the circumstances of this case, favor appellants. The district court found, and the
parties do not dispute, that the typical buyer of “designer” jeans is sophisticated with
respect to jeans buying. Appellants argue that this sophistication prevents these
consumers from becoming confused by nearly identical back pocket stitching patterns.
On the contrary, we believe that it is a sophisticated jeans consumer who is most likely
to assume that the presence of appellee’s trademark stitching pattern on appellants’ jeans
indicates some sort of association between the two manufacturers. Presumably it is these
sophisticated jeans buyers who pay the most attention to back pocket stitching patterns
and their “meanings”. Likewise, in the post-sale context, the sophisticated buyer is more
likely to be affected by the sight of appellee’s stitching pattern on appellants’ jeans and,
consequently, to transfer goodwill. Finally, to the extent the sophisticated buyer is
attracted to appellee’s jeans because of the exclusiveness of its stitching pattern,
appellee’s sales will be affected adversely by these buyers’ ultimate realization that the
pattern is no longer exclusive.
Our review of the district court’s application of the Polaroid factors convinces us
that the court correctly concluded that consumers are likely to mistakenly associate
appellants’ jeans with appellee or will confuse the source of appellants’ jeans when the
jeans are observed in the post-sale context. This result is eminently reasonable in view
of the undisputed evidence of the use by one jeans manufacturer of the trademark back
pocket stitching pattern of another jeans manufacturer, coupled with the fact that the
trademark stitching pattern is instantly associated with its owner and is important to
consumers. There is simply too great a risk that appellants will profit from appellee’s
hard-earned goodwill to permit the use.

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We affirm the eminently sound decision of Judge Sweet based on the well
established law of this Circuit.
MINER, Circuit Judge, dissenting. [Omitted.]
Questions:
1.) The court emphasizes that the mark not only protects the goods in question, but the
owner’s right to expand the mark to other areas and product lines. The market in question
here—designer jeans—is a close one to the original product, but the court also favorably
quotes another case in which a scarf designer had the “right to prevent use of her tradename
on cosmetics even without proof that she presently intends to enter cosmetic market.” Do
you agree with the court’s conclusion that “The Lanham Act is meant to protect this
interest”? How does this idea of “room to expand the brand,” of an entitlement to grow
beyond the current product category, fit with the rationales of trademark law? If this is true,
why can Bass beer not enjoin Bass shoes and Bass electronics, and Delta Airlines enjoin
Delta faucets? Is there a distinguishing factor that separates these cases?
2.) After deciding most of the factors against Lois, the court finds, strangely, both that
Levi’s is a hugely famous brand and its stitching pattern iconic, and that “appellants
[Lois] happened on the stitching pattern serendipitously.” (?) It goes on to say “It must
be remembered, however, that intentional copying is not a requirement under the Lanham
Act” and concludes “[t]here is simply too great a risk that appellants will profit from
appellee’s hard-earned goodwill to permit the use.” How is this different from the kind
of “reaping where one has not sown” that Justice Pitney condemned in INS v. AP? Does
it matter, should it matter, if I am serendipitously, not deliberately, benefiting from a
positive externality created by another? Why does the Lanham Act nevertheless not
require intentional copying?
3.) Look back at the Cohen quote at the beginning of Chapter 4. He said,
In practice, injunctive relief is being extended today to realms where no
actual danger of confusion to the consumer is present, and this extension
has been vigorously supported and encouraged by leading writers in the
field. . . . The current legal argument runs: One who by the ingenuity of
his advertising or the quality of his product has induced consumer
responsiveness to a particular name, symbol, form of packaging, etc.,
has thereby created a thing of value; a thing of value is property; the
creator of property is entitled to protection against third parties who seek
to deprive him of his property.
Does Cohen accurately describe the reasoning of this case or is the court, in fact,
concerned about consumer confusion, efficient producer-consumer communication, and the
protection of investment in stable brand names?
4.) As mentioned earlier, the court finds that the Lanham Act does not merely protect
against confusion at the point of sale—I think I am buying Dove soap but actually it is
Dave’s soap in similar packaging. It also protects against post point of sale confusion,
where labels and disclaimers are of no use. Thus it prevents Lois jeans, bought knowingly
by a savvy consumer, from being mistaken on the street for Levi’s by a non-purchaser.
Do you agree? Does this stretch the rationale of trademark law?

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5.) When considering the seventh factor, the quality of the goods, the court acknowledges that Lois jeans are of high quality, but goes on to say that “the good quality of
appellants’ product actually may increase the likelihood of confusion as to source.” If
Lois jeans had been markedly inferior to Levi’s would this have helped them? What if
they were of identical quality? Under the court’s reasoning, is there any level of quality
under which Lois would not lose this factor?
6.) To summarize the points made in the preceding questions, no matter the formal
factors a court must look at in order to determine likelihood of confusion, the results will
still differ depending on the underlying vision of the scope of the trademark right.
One vision of the scope of a trademark confines it tightly to the semantic interaction
between this good or service, this mark, this consumer and this manufacturer. Dove for soap
does not infringe Dove for chocolate. The rationale for the right is to maintain stable
meaning of the symbols that producers use and consumers rely on. The key market is the
one the trademark owner is already in, with perhaps a small room for expansion to closely
related markets (Levi designer jeans not Levi Jeep interiors). The key person whose
confusion is relevant is the purchaser (and thus labels that explicitly disclaim connection to
another producer are very strong evidence that consumers will not be likely to be confused).
The key moment is the moment of sale. Confusion before the moment of sale (as with the
person who clicks on a Google advertisement served up by her search for “Coach bags,”
only to be shown Kate Spade bags that she ends up preferring to Coach) is irrelevant.
Confusion after the moment of sale (as when the Chrysler 300 is seen on the street and
mistaken for a Bentley, when the driver knows very well it is not) is irrelevant. Wherever
the narrow reach of the right does not extend, competition—including competition built on
deliberately copying non-trademarked features of another product—is to be welcomed.
The second, broader, vision of the scope of a trademark right views it partly as a
device to avoid (current) consumer confusion and diminution of the utility of trademark
symbols. In that, it agrees with the narrower view. But it goes beyond that to see the
trademark right as rooted in broader themes of unfair competition law, protecting acquired
goodwill which can be leveraged into new markets whenever the producer wants, and
preventing other producers from “reaping where they have not sown” even if the consumer is not at all confused. The right is no longer confined tightly to the semantic interaction
between this consumer, this mark, this good and this producer. It is extended to cover
possible future markets. It is as if, by having the mark, I have planted a semantic claim
stake on the empty range next door. The relevant moment is expanded both before and
after the point of sale, to cover initial interest confusion and post point of sale confusion.
If the consumer was interested initially in my mark, I deserve to get that consumer, even
if they come to prefer the goods of my rival. The person whose likelihood of confusion is
relevant is not merely the actual consumer, but the bystander and possible future
purchaser. This vision of the right protects a larger swath of time, reaches a larger swath
of markets and protects against (as a legal realist, Cohen would say ‘judicially creates’)
“harms” that the first vision simply does not reach.
Federal courts offer decisions that resonate with both of these two visions. For
example, the courts that find initial interest confusion actionable are obviously closer to the
broader idea of trademark rights, while those rejecting it are closer to the narrower view. In
Walmart the court seemed happy to sacrifice acquired goodwill in a product design, because
of the greater interest in encouraging competition. The general rule that trademarks are
specific to the actual good or service with which the mark is connected expresses the narrow
view. An expansive vision of “room to expand beyond the brand,” or the interest of famous

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marks being protected against non-confusing dilution, reflects the broader.
The Lois court makes many points that seem to resonate with the second, broader
vision of trademark. Does it need to in order to find likelihood of confusion? After all,
these are two types of jeans that look almost identical. Would the first, narrower, vision
of trademark not easily find that eventuality likely to produce confusion?

3.) Contributory Infringement
The Lois jeans case gives us the standard for straightforward, primary, trademark
infringement as well as the infringement of the rights § 1125(a) gives to unregistered
marks and trade dress. But what about secondary infringement? What about an entity
that facilitates or encourages or controls and profits from the trademark infringement of
others but does not itself infringe?
In the online world, secondary liability for violation of intellectual property rights—
particularly copyright and trademark rights—is vital. Increasingly, rights holders want to
curtail the activities of intermediaries—internet service providers, online marketplaces,
search engines, social networks and file lockers. These services can be used legally but
can also be used by customers to violate intellectual property rights. Why not go directly
after the individuals who are violating the rights? First, the primary infringers are hard
(and expensive) to find and to control once found. They do not have deep pockets. Second,
from the point of the right-holder, the intermediaries are profiting from the portion of their
activities that facilitates infringement. Why should they not internalize the costs, the
“negative externalities” as economists would put it, that their activities are helping to
create? Would this not appropriately incentivize them to cut down on infringement, like
the polluting factory forced to internalize the costs of its own pollution? Finally, are the
intermediaries not morally culpable? Are they not aware of high levels of illegal activity?
Do they not turn a deliberate blind eye to it?
The opposing position sees the attempt to impose secondary liability—liability for
contributing to infringement—as fraught with extraordinary difficulty. Google copies the
entire web every day. That is what a search engine does. Must it therefore be liable when it
copies infringing pages along with non-infringing ones? These intermediaries—viewed by
rights owners as facilitators of piracy—are also a central part of the architecture of the
internet, the entities whose activities facilitate all the expressive, commercial and communicative possibilities the internet involves, the revolution in “disintermediation” it has brought
about. Finally, some critics view attempts to expand secondary liability as an attempt by
incumbent industries to immunize themselves against the disruption to their business models
wrought by the internet. We will be dealing with secondary liability both in trademark and,
later in the course, in copyright. As you look at the legal regime the judges and legislators
carve out, ask yourself how they are balancing these two competing views.

Tiffany Inc. v. eBay Inc.

600 F.3d 93 (2d Cir. 2010)

SACK, Circuit Judge.
eBay, Inc. (“eBay”), through its eponymous online marketplace, has revolutionized the online sale of goods, especially used goods. It has facilitated the buying and

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selling by hundreds of millions of people and entities, to their benefit and eBay’s profit.
But that marketplace is sometimes employed by users as a means to perpetrate fraud by
selling counterfeit goods.
Plaintiffs Tiffany (NJ) Inc. and Tiffany and Company (together, “Tiffany”) have
created and cultivated a brand of jewelry bespeaking high-end quality and style. Based on
Tiffany’s concern that some use eBay’s website to sell counterfeit Tiffany merchandise,
Tiffany has instituted this action against eBay, asserting various causes of action—sounding
in trademark infringement, trademark dilution and false advertising—arising from eBay’s
advertising and listing practices.
Background
[The court summarized the findings of fact in the district court. Internal citations
omitted. Eds.]
eBay is the proprietor of www.ebay.com, an Internet-based marketplace that allows
those who register with it to purchase goods from and sell goods to one another. It
“connect[s] buyers and sellers and [] enable[s] transactions, which are carried out directly
between eBay members.” In its auction and listing services, it “provides the venue for the
sale [of goods] and support for the transaction[s], [but] it does not itself sell the items” listed
for sale on the site, nor does it ever take physical possession of them. Thus, “eBay generally
does not know whether or when an item is delivered to the buyer.”
eBay has been enormously successful. More than six million new listings are posted
on its site daily. At any given time it contains some 100 million listings.
eBay generates revenue by charging sellers to use its listing services. For any listing,
it charges an “insertion fee” based on the auction’s starting price for the goods being sold
and ranges from $0.20 to $4.80. For any completed sale, it charges a “final value fee” that
ranges from 5.25% to 10% of the final sale price of the item. Sellers have the option of
purchasing, at additional cost, features “to differentiate their listings, such as a border or
bold-faced type.”
eBay also generates revenue through a company named PayPal, which it owns and
which allows users to process their purchases. PayPal deducts, as a fee for each transaction
that it processes, 1.9% to 2.9% of the transaction amount, plus $0.30. This gives eBay an
added incentive to increase both the volume and the price of the goods sold on its website.
Tiffany is a world-famous purveyor of, among other things, branded jewelry. Since
2000, all new Tiffany jewelry sold in the United States has been available exclusively
through Tiffany’s retail stores, catalogs, and website, and through its Corporate Sales
Department. It does not use liquidators, sell overstock merchandise, or put its goods on
sale at discounted prices. It does not—nor can it, for that matter—control the “legitimate
secondary market in authentic Tiffany silvery jewelry,” i.e., the market for second-hand
Tiffany wares. The record developed at trial “offere[d] little basis from which to discern
the actual availability of authentic Tiffany silver jewelry in the secondary market.”
Sometime before 2004, Tiffany became aware that counterfeit Tiffany merchandise
was being sold on eBay’s site. . . . Tiffany conducted two surveys known as “Buying
Programs,” one in 2004 and another in 2005, in an attempt to assess the extent of this
practice. Under those programs, Tiffany bought various items on eBay and then inspected
and evaluated them to determine how many were counterfeit. Tiffany found that 73.1% of
the purported Tiffany goods purchased in the 2004 Buying Program and 75.5% of those
purchased in the 2005 Buying Program were counterfeit. The district court concluded,
however, that the Buying Programs were “methodologically flawed and of questionable

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value,” and “provide[d] limited evidence as to the total percentage of counterfeit goods
available on eBay at any given time.” The court nonetheless decided that during the period
in which the Buying Programs were in effect, a “significant portion of the ‘Tiffany’ sterling
silver jewelry listed on the eBay website . . . was counterfeit,” and that eBay knew “that
some portion of the Tiffany goods sold on its website might be counterfeit.” The court found,
however, that “a substantial number of authentic Tiffany goods are [also] sold on eBay.”
Reducing or eliminating the sale of all second-hand Tiffany goods, including
genuine Tiffany pieces, through eBay’s website would benefit Tiffany in at least one sense:
It would diminish the competition in the market for genuine Tiffany merchandise. ([The
District Court noted] that “there is at least some basis in the record for eBay’s assertion that
one of Tiffany’s goals in pursuing this litigation is to shut down the legitimate secondary
market in authentic Tiffany goods.”) The immediate effect would be loss of revenue to
eBay, even though there might be a countervailing gain by eBay resulting from increased
consumer confidence about the bona fides of other goods sold through its website.
Anti-Counterfeiting Measures
Because eBay facilitates many sales of Tiffany goods, genuine and otherwise, and
obtains revenue on every transaction, it generates substantial revenues from the sale of
purported Tiffany goods, some of which are counterfeit. “eBay’s Jewelry & Watches
category manager estimated that, between April 2000 and June 2004, eBay earned $4.1
million in revenue from completed listings with ‘Tiffany’ in the listing title in the Jewelry
& Watches category.” Although eBay was generating revenue from all sales of goods on its
site, including counterfeit goods, the district court found eBay to have “an interest in
eliminating counterfeit Tiffany merchandise from eBay . . . to preserve the reputation of its
website as a safe place to do business.” The buyer of fake Tiffany goods might, if and when
the forgery was detected, fault eBay. Indeed, the district court found that “buyers . . .
complain[ed] to eBay” about the sale of counterfeit Tiffany goods. “[D]uring the last six
weeks of 2004, 125 consumers complained to eBay about purchasing ‘Tiffany’ items
through the eBay website that they believed to be counterfeit.”
Because eBay “never saw or inspected the merchandise in the listings,” its ability to
determine whether a particular listing was for counterfeit goods was limited. Even had it
been able to inspect the goods, moreover, in many instances it likely would not have had the
expertise to determine whether they were counterfeit. (“[I]n many instances, determining
whether an item is counterfeit will require a physical inspection of the item, and some degree
of expertise on the part of the examiner.”).
Notwithstanding these limitations, eBay spent “as much as $20 million each year on
tools to promote trust and safety on its website.” For example, eBay and PayPal set up
“buyer protection programs,” under which, in certain circumstances, the buyer would be
reimbursed for the cost of items purchased on eBay that were discovered not to be genuine.
eBay also established a “Trust and Safety” department, with some 4,000 employees
“devoted to trust and safety” issues, including over 200 who “focus exclusively on
combating infringement” and 70 who “work exclusively with law enforcement.”
By May 2002, eBay had implemented a “fraud engine,” “which is principally
dedicated to ferreting out illegal listings, including counterfeit listings.” eBay had
theretofore employed manual searches for keywords in listings in an effort to “identify
blatant instances of potentially infringing . . . activity.” “The fraud engine uses rules and
complex models that automatically search for activity that violates eBay policies.” In
addition to identifying items actually advertised as counterfeit, the engine also incorporates
various filters designed to screen out less-obvious instances of counterfeiting using “data

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elements designed to evaluate listings based on, for example, the seller’s Internet protocol
address, any issues associated with the seller’s account on eBay, and the feedback the seller
has received from other eBay users.” In addition to general filters, the fraud engine
incorporates “Tiffany-specific filters,” including “approximately 90 different keywords”
designed to help distinguish between genuine and counterfeit Tiffany goods. During the
period in dispute, eBay also “periodically conducted [manual] reviews of listings in an
effort to remove those that might be selling counterfeit goods, including Tiffany goods.”
For nearly a decade, including the period at issue, eBay has also maintained and
administered the “Verified Rights Owner (‘VeRO’) Program”—a “‘notice-and-takedown’
system” allowing owners of intellectual property rights, including Tiffany, to “report to eBay
any listing offering potentially infringing items, so that eBay could remove such reported
listings.” Any such rights-holder with a “good-faith belief that [a particular listed] item
infringed on a copyright or a trademark” could report the item to eBay, using a “Notice of
Claimed Infringement form or NOCI form.” During the period under consideration, eBay’s
practice was to remove reported listings within twenty-four hours of receiving a NOCI, but
eBay in fact deleted seventy to eighty percent of them within twelve hours of notification.
On receipt of a NOCI, if the auction or sale had not ended, eBay would, in addition
to removing the listing, cancel the bids and inform the seller of the reason for the
cancellation. If bidding had ended, eBay would retroactively cancel the transaction. In the
event of a cancelled auction, eBay would refund the fees it had been paid in connection
with the auction.
In some circumstances, eBay would reimburse the buyer for the cost of a purchased
item, provided the buyer presented evidence that the purchased item was counterfeit.
During the relevant time period, the district court found, eBay “never refused to remove
a reported Tiffany listing, acted in good faith in responding to Tiffany’s NOCIs, and
always provided Tiffany with the seller’s contact information.”
In addition, eBay has allowed rights owners such as Tiffany to create an “About
Me” webpage on eBay’s website “to inform eBay users about their products, intellectual
property rights, and legal positions.” eBay does not exercise control over the content of
those pages in a manner material to the issues before us.
Tiffany, not eBay, maintains the Tiffany “About Me” page. With the headline
“BUYER BEWARE,” the page begins: “Most of the purported TIFFANY & CO. silver
jewelry and packaging available on eBay is counterfeit.” It also says, inter alia:
The only way you can be certain that you are purchasing a genuine
TIFFANY & CO. product is to purchase it from a Tiffany & Co. retail
store, via our website (www.tiffany.com) or through a Tiffany & Co.
catalogue. Tiffany & Co. stores do not authenticate merchandise. A good
jeweler or appraiser may be able to do this for you.
In 2003 or early 2004, eBay began to use “special warning messages when a seller
attempted to list a Tiffany item.” These messages “instructed the seller to make sure that
the item was authentic Tiffany merchandise and informed the seller that eBay ‘does not
tolerate the listing of replica, counterfeit, or otherwise unauthorized items’ and that
violation of this policy ‘could result in suspension of [the seller’s] account.’” The messages
also provided a link to Tiffany’s “About Me” page with its “buyer beware” disclaimer. If
the seller “continued to list an item despite the warning, the listing was flagged for review.”
In addition to cancelling particular suspicious transactions, eBay has also
suspended from its website “‘hundreds of thousands of sellers every year,’ tens of
thousands of whom were suspected [of] having engaged in infringing conduct.” eBay

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primarily employed a “‘three strikes rule’” for suspensions, but would suspend sellers
after the first violation if it was clear that “the seller ‘listed a number of infringing items,’
and ‘[selling counterfeit merchandise] appears to be the only thing they’ve come to eBay
to do.’” But if “a seller listed a potentially infringing item but appeared overall to be a
legitimate seller, the ‘infringing items [were] taken down, and the seller [would] be sent
a warning on the first offense and given the educational information, [and] told that . . . if
they do this again, they will be suspended from eBay.’”
By late 2006, eBay had implemented additional anti-fraud measures: delaying the
ability of buyers to view listings of certain brand names, including Tiffany’s, for 6 to 12
hours so as to give rights-holders such as Tiffany more time to review those listings;
developing the ability to assess the number of items listed in a given listing; and restricting
one-day and three-day auctions and cross-border trading for some brand-name items.
The district court concluded that “eBay consistently took steps to improve its
technology and develop anti-fraud measures as such measures became technologically
feasible and reasonably available.”
eBay’s Advertising
At the same time that eBay was attempting to reduce the sale of counterfeit items on
its website, it actively sought to promote sales of premium and branded jewelry, including
Tiffany merchandise, on its site. Among other things, eBay “advised its sellers to take
advantage of the demand for Tiffany merchandise as part of a broader effort to grow the
Jewelry & Watches category.” And prior to 2003, eBay advertised the availability of Tiffany
merchandise on its site. eBay’s advertisements trumpeted “Mother’s Day Gifts!,” a “Fall
FASHION BRAND BLOWOUT,” “GREAT BRANDS, GREAT PRICES,” or “Top
Valentine’s Deals,” among other promotions. It encouraged the viewer to “GET THE
FINER THINGS.” These advertisements provided the reader with hyperlinks, at least one
of each of which was related to Tiffany merchandise—“Tiffany,” “Tiffany & Co. under
$150,” “Tiffany & Co,” “Tiffany Rings,” or “Tiffany & Co. under $50.”
eBay also purchased sponsored-link advertisements on various search engines to
promote the availability of Tiffany items on its website. In one such case, in the form of a
printout of the results list from a search on Yahoo! for “tiffany,” the second sponsored link
read “Tiffany on eBay. Find tiffany items at low prices. With over 5 million items for sale
every day, you’ll find all kinds of unique [unreadable] Marketplace. www.ebay.com.”
Tiffany complained to eBay of the practice in 2003, and eBay told Tiffany that it had ceased
buying sponsored links. The district court found, however, that eBay continued to do so
indirectly through a third party.
Procedural History
By amended complaint dated July 15, 2004, Tiffany initiated this action. It alleged,
inter alia, that eBay’s conduct—i.e., facilitating and advertising the sale of “Tiffany”
goods that turned out to be counterfeit—constituted direct and contributory trademark
infringement, trademark dilution, and false advertising. On July 14, 2008, following a
bench trial, the district court, in a thorough and thoughtful opinion, set forth its findings
of fact and conclusions of law, deciding in favor of eBay on all claims. Tiffany appeals
from the district court’s judgment for eBay.
DISCUSSION
I. Direct Trademark Infringement
Tiffany alleges that eBay infringed its trademark in violation of section 32 of the
Lanham Act. The district court described this as a claim of “direct trademark

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infringement,” and we adopt that terminology. Under section 32, “the owner of a mark
registered with the Patent and Trademark Office can bring a civil action against a person
alleged to have used the mark without the owner’s consent.” We analyze such a claim
“under a familiar two-prong test. The test looks first to whether the plaintiff’s mark is
entitled to protection, and second to whether the defendant’s use of the mark is likely to
cause consumers confusion as to the origin or sponsorship of the defendant’s goods.”
Savin Corp. v. Savin Group (2d Cir. 2004).
In the district court, Tiffany argued that eBay had directly infringed its mark by using
it on eBay’s website and by purchasing sponsored links containing the mark on Google and
Yahoo! Tiffany also argued that eBay and the sellers of the counterfeit goods using its site
were jointly and severally liable. The district court rejected these arguments on the ground
that eBay’s use of Tiffany’s mark was protected by the doctrine of nominative fair use.
The doctrine of nominative fair use allows “[a] defendant [to] use a plaintiff’s
trademark to identify the plaintiff’s goods so long as there is no likelihood of confusion
about the source of [the] defendant’s product or the mark-holder’s sponsorship or affiliation.” The doctrine apparently originated in the Court of Appeals for the Ninth Circuit.
See New Kids on the Block v. News Am. Publ’g, Inc. (9th Cir. 1992). To fall within the
protection, according to that court: “First, the product or service in question must be one
not readily identifiable without use of the trademark; second, only so much of the mark
or marks may be used as is reasonably necessary to identify the product or service; and
third, the user must do nothing that would, in conjunction with the mark, suggest
sponsorship or endorsement by the trademark holder.”
The Court of Appeals for the Third Circuit has endorsed these principles. We have
referred to the doctrine, albeit without adopting or rejecting it. Other circuits have done
similarly.
We need not address the viability of the doctrine to resolve Tiffany’s claim, however.
We have recognized that a defendant may lawfully use a plaintiff’s trademark where doing
so is necessary to describe the plaintiff’s product and does not imply a false affiliation or
endorsement by the plaintiff of the defendant. “While a trademark conveys an exclusive
right to the use of a mark in commerce in the area reserved, that right generally does not
prevent one who trades a branded product from accurately describing it by its brand name,
so long as the trader does not create confusion by implying an affiliation with the owner of
the product.” (“As a general rule, trademark law does not reach the sale of genuine goods
bearing a true mark even though the sale is not authorized by the mark owner.”)
We agree with the district court that eBay’s use of Tiffany’s mark on its website
and in sponsored links was lawful. eBay used the mark to describe accurately the genuine
Tiffany goods offered for sale on its website. And none of eBay’s uses of the mark
suggested that Tiffany affiliated itself with eBay or endorsed the sale of its products
through eBay’s website.
In addition, the “About Me” page that Tiffany has maintained on eBay’s website
since 2004 states that “[m]ost of the purported ‘TIFFANY & CO.’ silver jewelry and
packaging available on eBay is counterfeit.” The page further explained that Tiffany
itself sells its products only through its own stores, catalogues, and website.
Tiffany argues, however, that even if eBay had the right to use its mark with respect
to the resale of genuine Tiffany merchandise, eBay infringed the mark because it knew
or had reason to know that there was “a substantial problem with the sale of counterfeit
[Tiffany] silver jewelry” on the eBay website. As we discuss below, eBay’s knowledge
vel non that counterfeit Tiffany wares were offered through its website is relevant to the

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issue of whether eBay contributed to the direct infringement of Tiffany’s mark by the
counterfeiting vendors themselves, or whether eBay bears liability for false advertising.
But it is not a basis for a claim of direct trademark infringement against eBay, especially
inasmuch as it is undisputed that eBay promptly removed all listings that Tiffany
challenged as counterfeit and took affirmative steps to identify and remove illegitimate
Tiffany goods. To impose liability because eBay cannot guarantee the genuineness of all
of the purported Tiffany products offered on its website would unduly inhibit the lawful
resale of genuine Tiffany goods.
We conclude that eBay’s use of Tiffany’s mark in the described manner did not
constitute direct trademark infringement.
II. Contributory Trademark Infringement
The more difficult issue is whether eBay is liable for contributory trademark
infringement—i.e., for culpably facilitating the infringing conduct of the counterfeiting
vendors. Acknowledging the paucity of case law to guide us, we conclude that the district
court correctly granted judgment on this issue in favor of eBay.
A. Principles
Contributory trademark infringement is a judicially created doctrine that derives
from the common law of torts. The Supreme Court most recently dealt with the subject
in Inwood Laboratories, Inc. v. Ives Laboratories, Inc. (1982). There, the plaintiff, Ives,
asserted that several drug manufacturers had induced pharmacists to mislabel a drug the
defendants produced to pass it off as Ives’. According to the Court, “if a manufacturer or
distributor intentionally induces another to infringe a trademark, or if it continues to
supply its product to one whom it knows or has reason to know is engaging in trademark
infringement, the manufacturer or distributor is contributorially responsible for any harm
done as a result of the deceit.” The Court ultimately decided to remand the case to the
Court of Appeals after concluding it had improperly rejected factual findings of the
district court favoring the defendant manufacturers.
Inwood’s test for contributory trademark infringement applies on its face to manufacturers and distributors of goods. Courts have, however, extended the test to providers
of services. The Seventh Circuit applied Inwood to a lawsuit against the owner of a swap
meet, or “flea market,” whose vendors were alleged to have sold infringing Hard Rock
Café T-shirts. The court “treated trademark infringement as a species of tort” and
analogized the swap meet owner to a landlord or licensor, on whom the common law
“imposes the same duty . . . [as Inwood] impose[s] on manufacturers and distributors.”
Speaking more generally, the Ninth Circuit concluded that Inwood’s test for
contributory trademark infringement applies to a service provider if he or she exercises
sufficient control over the infringing conduct. Lockheed Martin Corp. v. Network
Solutions, Inc. (9th Cir. 1999) (“Direct control and monitoring of the instrumentality used
by a third party to infringe the plaintiff’s mark permits the expansion of Inwood Lab.’s
‘supplies a product’ requirement for contributory infringement.”). . . .
The limited case law leaves the law of contributory trademark infringement illdefined. Although we are not the first court to consider the application of Inwood to the
Internet, we are apparently the first to consider its application to an online marketplace.
B. Discussion
1. Does Inwood Apply?
. . . On appeal, eBay no longer maintains that it is not subject to Inwood. We

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therefore assume without deciding that Inwood’s test for contributory trademark infringement governs.
2. Is eBay Liable Under Inwood?
The question that remains, then, is whether eBay is liable under the Inwood test on
the basis of the services it provided to those who used its website to sell counterfeit
Tiffany products. As noted, when applying Inwood to service providers, there are two
ways in which a defendant may become contributorially liable for the infringing conduct
of another: first, if the service provider “intentionally induces another to infringe a
trademark,” and second, if the service provider “continues to supply its [service] to one
whom it knows or has reason to know is engaging in trademark infringement.” Inwood.
Tiffany does not argue that eBay induced the sale of counterfeit Tiffany goods on its
website—the circumstances addressed by the first part of the Inwood test. It argues
instead, under the second part of the Inwood test, that eBay continued to supply its
services to the sellers of counterfeit Tiffany goods while knowing or having reason to
know that such sellers were infringing Tiffany’s mark.
The district court rejected this argument. First, it concluded that to the extent the
NOCIs that Tiffany submitted gave eBay reason to know that particular listings were for
counterfeit goods, eBay did not continue to carry those listings once it learned that they were
specious. The court found that eBay’s practice was promptly to remove the challenged
listing from its website, warn sellers and buyers, cancel fees it earned from that listing, and
direct buyers not to consummate the sale of the disputed item. The court therefore declined
to hold eBay contributorially liable for the infringing conduct of those sellers. On appeal,
Tiffany does not appear to challenge this conclusion. In any event, we agree with the district
court that no liability arises with respect to those terminated listings.
Tiffany disagrees vigorously, however, with the district court’s further determination that eBay lacked sufficient knowledge of trademark infringement by sellers behind
other, non-terminated listings to provide a basis for Inwood liability. Tiffany argued in
the district court that eBay knew, or at least had reason to know, that counterfeit Tiffany
goods were being sold ubiquitously on its website. As evidence, it pointed to, inter alia,
the demand letters it sent to eBay in 2003 and 2004, the results of its Buying Programs
that it shared with eBay, the thousands of NOCIs it filed with eBay alleging its good faith
belief that certain listings were counterfeit, and the various complaints eBay received
from buyers claiming that they had purchased one or more counterfeit Tiffany items
through eBay’s website. Tiffany argued that taken together, this evidence established
eBay’s knowledge of the widespread sale of counterfeit Tiffany products on its website.
Tiffany urged that eBay be held contributorially liable on the basis that despite that
knowledge, it continued to make its services available to infringing sellers.
The district court rejected this argument. It acknowledged that “[t]he evidence
produced at trial demonstrated that eBay had generalized notice that some portion of the
Tiffany goods sold on its website might be counterfeit.” The court characterized the issue
before it as “whether eBay’s generalized knowledge of trademark infringement on its
website was sufficient to meet the ‘knowledge or reason to know’ prong of the Inwood
test.” eBay had argued that “such generalized knowledge is insufficient, and that the law
demands more specific knowledge of individual instances of infringement and infringing
sellers before imposing a burden upon eBay to remedy the problem.”
The district court concluded that “while eBay clearly possessed general knowledge
as to counterfeiting on its website, such generalized knowledge is insufficient under the
Inwood test to impose upon eBay an affirmative duty to remedy the problem.” The court

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reasoned that Inwood’s language explicitly imposes contributory liability on a defendant
who “continues to supply its product [—in eBay’s case, its service—] to one whom it knows
or has reason to know is engaging in trademark infringement.” The court also noted that
plaintiffs “bear a high burden in establishing ‘knowledge’ of contributory infringement,”
and that courts have been reluctant to extend contributory trademark liability to defendants
where there is some uncertainty as to the extent or the nature of the infringement. In Inwood,
Justice White emphasized in his concurring opinion that a defendant is not “require[d] . . .
to refuse to sell to dealers who merely might pass off its goods.”
Accordingly, the district court concluded that for Tiffany to establish eBay’s
contributory liability, Tiffany would have to show that eBay “knew or had reason to know
of specific instances of actual infringement” beyond those that it addressed upon learning
of them. Tiffany failed to make such a showing.
On appeal, Tiffany argues that the distinction drawn by the district court between
eBay’s general knowledge of the sale of counterfeit Tiffany goods through its website,
and its specific knowledge as to which particular sellers were making such sales, is a
“false” one not required by the law. Tiffany posits that the only relevant question is
“whether all of the knowledge, when taken together, puts [eBay] on notice that there is a
substantial problem of trademark infringement. If so and if it fails to act, [eBay] is liable
for contributory trademark infringement.”
We agree with the district court. For contributory trademark infringement liability
to lie, a service provider must have more than a general knowledge or reason to know that
its service is being used to sell counterfeit goods. Some contemporary knowledge of
which particular listings are infringing or will infringe in the future is necessary.
We are not persuaded by Tiffany’s proposed interpretation of Inwood. Tiffany
understands the “lesson of Inwood” to be that an action for contributory trademark
infringement lies where “the evidence [of infringing activity]—direct or circumstantial,
taken as a whole—. . . provide[s] a basis for finding that the defendant knew or should
have known that its product or service was being used to further illegal counterfeiting
activity.” We think that Tiffany reads Inwood too broadly. Although the Inwood Court
articulated a “knows or has reason to know” prong in setting out its contributory liability
test, the Court explicitly declined to apply that prong to the facts then before it. The Court
applied only the inducement prong of the test. See Inwood.
We therefore do not think that Inwood establishes the contours of the “knows or
has reason to know” prong. Insofar as it speaks to the issue, though, the particular
phrasing that the Court used—that a defendant will be liable if it “continues to supply its
product to one whom it knows or has reason to know is engaging in trademark
infringement,” supports the district court’s interpretation of Inwood, not Tiffany’s.
We find helpful the Supreme Court’s discussion of Inwood in a subsequent copyright
case, Sony Corp. of America v. Universal City Studios, Inc. (1984). There, defendant Sony
manufactured and sold home video tape recorders. Plaintiffs Universal Studios and Walt
Disney Productions held copyrights on various television programs that individual
television-viewers had taped using the defendant’s recorders. The plaintiffs contended that
this use of the recorders constituted copyright infringement for which the defendants should
be held contributorially liable. In ruling for the defendants, the Court discussed Inwood and
the differences between contributory liability in trademark versus copyright law.
If Inwood’s narrow standard for contributory trademark infringement
governed here, [the plaintiffs’] claim of contributory infringement would
merit little discussion. Sony certainly does not ‘intentionally induce[]’ its
customers to make infringing uses of [the plaintiffs’] copyrights, nor does

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it supply its products to identified individuals known by it to be engaging
in continuing infringement of [the plaintiffs’] copyrights.
Thus, the Court suggested, had the Inwood standard applied in Sony, the fact that
Sony might have known that some portion of the purchasers of its product used it to
violate the copyrights of others would not have provided a sufficient basis for
contributory liability. Inwood’s “narrow standard” would have required knowledge by
Sony of “identified individuals” engaging in infringing conduct. Tiffany’s reading of
Inwood is therefore contrary to the interpretation of that case set forth in Sony.
Although the Supreme Court’s observations in Sony, a copyright case, about the
“knows or has reason to know” prong of the contributory trademark infringement test set
forth in Inwood were dicta, they constitute the only discussion of that prong by the
Supreme Court of which we are aware. We think them to be persuasive authority here.
Applying Sony’s interpretation of Inwood, we agree with the district court that
“Tiffany’s general allegations of counterfeiting failed to provide eBay with the
knowledge required under Inwood.” Tiffany’s demand letters and Buying Programs did
not identify particular sellers who Tiffany thought were then offering or would offer
counterfeit goods. And although the NOCIs and buyer complaints gave eBay reason to
know that certain sellers had been selling counterfeits, those sellers’ listings were
removed and repeat offenders were suspended from the eBay site. Thus Tiffany failed to
demonstrate that eBay was supplying its service to individuals who it knew or had reason
to know were selling counterfeit Tiffany goods.
Accordingly, we affirm the judgment of the district court insofar as it holds that
eBay is not contributorially liable for trademark infringement.
3. Willful Blindness.
Tiffany and its amici express their concern that if eBay is not held liable except
when specific counterfeit listings are brought to its attention, eBay will have no incentive
to root out such listings from its website. They argue that this will effectively require
Tiffany and similarly situated retailers to police eBay’s website—and many others like
it—“24 hours a day, and 365 days a year.” They urge that this is a burden that most mark
holders cannot afford to bear.
First, and most obviously, we are interpreting the law and applying it to the facts
of this case. We could not, even if we thought it wise, revise the existing law in order to
better serve one party’s interests at the expense of the other’s.
But we are also disposed to think, and the record suggests, that private market
forces give eBay and those operating similar businesses a strong incentive to minimize
the counterfeit goods sold on their websites. eBay received many complaints from users
claiming to have been duped into buying counterfeit Tiffany products sold on eBay. The
risk of alienating these users gives eBay a reason to identify and remove counterfeit
listings. Indeed, it has spent millions of dollars in that effort.
Moreover, we agree with the district court that if eBay had reason to suspect that
counterfeit Tiffany goods were being sold through its website, and intentionally shielded
itself from discovering the offending listings or the identity of the sellers behind them,
eBay might very well have been charged with knowledge of those sales sufficient to
satisfy Inwood’s “knows or has reason to know” prong. A service provider is not, we
think, permitted willful blindness. When it has reason to suspect that users of its service
are infringing a protected mark, it may not shield itself from learning of the particular
infringing transactions by looking the other way. See, e.g., Hard Rock Café (“To be
willfully blind, a person must suspect wrongdoing and deliberately fail to investigate.”);

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Fonovisa (applying Hard Rock Café’s reasoning to conclude that “a swap meet can not
disregard its vendors’ blatant trademark infringements with impunity”). In the words of
the Seventh Circuit, “willful blindness is equivalent to actual knowledge for purposes of
the Lanham Act.” Hard Rock Café.
eBay appears to concede that it knew as a general matter that counterfeit Tiffany
products were listed and sold through its website. Without more, however, this
knowledge is insufficient to trigger liability under Inwood. The district court found, after
careful consideration, that eBay was not willfully blind to the counterfeit sales. That
finding is not clearly erroneous. eBay did not ignore the information it was given about
counterfeit sales on its website.
III. Trademark Dilution
A. Principles
Federal law allows the owner of a “famous mark” to enjoin a person from using
“a mark or trade name in commerce that is likely to cause dilution by blurring or dilution
by tarnishment of the famous mark.” 15 U.S.C. § 1125(c)(1).
“Dilution by blurring” is an “association arising from the similarity between a mark
or trade name and a famous mark that impairs the distinctiveness of the famous mark.”
§ 1125(c)(2)(B). It can occur “regardless of the presence or absence of actual or likely
confusion, of competition, or of actual economic injury.” § 1125(c)(1). “Some classic
examples of blurring include ‘hypothetical anomalies as Dupont shoes, Buick aspirin
tablets, Schlitz varnish, Kodak pianos, Bulova gowns, and so forth.’” Starbucks Corp. v.
Wolfe’s Borough Coffee, Inc. (2d Cir. 2009) (quoting Mead Data Cent., Inc. v. Toyota Motor
Sales, U.S.A., Inc. (2d Cir. 1989)). It is not a question of confusion; few consumers would
likely confuse the source of a Kodak camera with the source of a “Kodak” piano. Dilution
by blurring refers instead to “‘the whittling away of [the] established trademark’s selling
power and value through its unauthorized use by others.’” (Quoting Mead Data Cent.)
Federal law identifies a non-exhaustive list of six factors that courts “may
consider” when determining whether a mark is likely to cause dilution by blurring. These
are: (1) “[t]he degree of similarity between the mark or trade name and the famous mark”;
(2) “[t]he degree of inherent or acquired distinctiveness of the famous mark”; (3) “[t]he
extent to which the owner of the famous mark is engaging in substantially exclusive use
of the mark”; (4) “[t]he degree of recognition of the famous mark”; (5) “[w]hether the
user of the mark or trade name intended to create an association with the famous mark”;
and (6) “[a]ny actual association between the mark or trade name and the famous mark.”
15 U.S.C. § 1125(c)(2)(B)(i–vi).
In contrast to dilution by blurring, “dilution by tarnishment” is an “association
arising from the similarity between a mark or trade name and a famous mark that harms
the reputation of the famous mark.” 15 U.S.C. § 1125(c)(2)(C). This “generally arises
when the plaintiff’s trademark is linked to products of shoddy quality, or is portrayed in
an unwholesome or unsavory context likely to evoke unflattering thoughts about the
owner’s product.” Deere & Co. v. MTD Prods., Inc. (2d Cir. 1994).
B. Discussion
The district court rejected Tiffany’s dilution by blurring claim on the ground that
“eBay never used the TIFFANY Marks in an effort to create an association with its own
product, but instead, used the marks directly to advertise and identify the availability of
authentic Tiffany merchandise on the eBay website.” The court concluded that “just as
the dilution by blurring claim fails because eBay has never used the [Tiffany] Marks to

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refer to eBay’s own product, the dilution by tarnishment claim also fails.” We agree.
There is no second mark or product at issue here to blur with or to tarnish “Tiffany.”
Tiffany argues that counterfeiting dilutes the value of its product. Perhaps. But insofar as
eBay did not itself sell the goods at issue, it did not itself engage in dilution.
IV. False Advertising
[The court remanded to the District Court on the issue of whether eBay’s advertising
implied to a reasonable consumer that the Tiffany products on eBay were genuine. Eds.]
CONCLUSION
For the foregoing reasons, we affirm the judgment of the district court with respect
to the claims of trademark infringement and dilution. . . . [W]e return the cause to the
district court for further proceedings with respect to Tiffany’s false advertising claim.
P ROBLEM 7-1
You have recently been appointed as General Counsel for Google, which is facing a
number of legal problems. Early this year, Google began a new service called Google
Store. Google Store is designed to compete with eBay, Craigslist, uBid and other
consumer-to-consumer and small business-to-consumer online shopping sites. These
sites allow sellers who have goods or services to sell to “list” them online. The sites
provide convenient advertising and payment options, in return for a percentage of the
sale. “Google Store will allow us to leverage our core-competency in search and the
synergies of our global reach to provide the world’s greatest integrated search and
shopping Web 2.0 experience!” announced Sergey Brin, one of Google’s founders.
The exciting thing about Google Store is the way it is integrated into the Google
search process. The standard Google search page has a number of hyperlinks along the
top—Web, Images, Maps, Shopping and Video being the most prominent. If a user clicks
on “Images,” for example, her existing search is confined only to pictorial search results.
“Shopping” will yield only products for sale and so on. In order to understand the way
listings are generated on the Shopping page, it is necessary to explain two of Google’s
programs—Google AdWords Featured Listings (AdWords) and Google Store (Store).
AdWords allows advertisers to “purchase” certain words or phrases. When those
words or phrases are used by someone searching Google, the advertiser’s chosen
advertisement is featured on top of the search result, inside a yellow highlighted box.
(An example of a Google Shopping search is reproduced on the next page.) Google
chooses to include as AdWords available for purchase both simple descriptive terms
(“designer bags,” “discount travel”) and trademarked phrases or words. The trademark
owner is free to “purchase” its own name as an AdWord, as Louis Vuitton and Prada
have apparently done in the featured page. In addition, some of the advertisements are
from vendors who wish to resell the item in question. For example, vendors who claim
to be selling second-hand Louis Vuitton or Prada bags could “purchase” the words
‘Louis Vuitton’ or ‘Dior bags’ and would then have their advertisements appear in the
highlighted box when someone searched for that word or phrase. Some may buy the
trademarked word for reasons entirely unrelated to its trademark status, as the person
who purchased “Hermes” in order to sell a “weird old Greek God Belly Fat Diet” has
apparently done. Finally, competitors to the trademark owner can purchase the trademarked AdWord on the theory that someone searching for, say, Louis Vuitton, might

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Figure One: (This was created for Problem 7-1. It is not a real screenshot.)

YOU SEARCHED “LOUIS VUITTON.” FOR COMPARISON PURPOSES, GOOGLE’S “CLUSTERSEARCH”
AUTOMATICALLY LISTS OTHER DESIGNERS AND MERCHANTS WITH RELATED OFFERINGS
(All listings sole responsibility of posters.)

Ads related to “Louis Vuitton”

Louis Vuitton. Sole Authorized Seller. Louisvuitton.com
Genine Louise Vuittion Bags at Insanly Low Prices. Подделка.ru
Try “Lou Vutton!” It’s like Louis Vuitton, but for men! Falsificación.es
5 x Better than Louis Vuitton! Coach bags. Coach.com
Pre-owned Louis Vuitton! $15-$35! Visit Google Store

More listings tagged “Louis Vuitton” at Google Store . . .

Ads related to “Chanel”

Channel Desiner Bags On Sale! Super Cheep. Sketchy.ru
KoKo Chanel Bags at KnocKdown prices. Contrefaçon.com
Get Genuine Coach Bags Direct from Manufacturer! Coach.com
Make a Chanel Bag to order! Logo extra. Visit Google Store
Ads related to “Hermes”

More listings tagged “Chanel” at Google Store . . .

Greek Gods’ weird old belly fat diet! MessengerOfGreekGods.com
Buy 2nd hand HERMÈS from sellers upgrading to Coach? Coach.com
HERMÈS ON SALE! Direct from Paris, TX.
CheeseEatingSurrenderMonkey.com
Hermes, Schmermes! Look at these prices! Visit Google Store

More listings tagged “Hermes” at Google Store . . .
Ads related to “Christian Dior”

Christian Single Dating but with Dior Elegance. ChicChristiandate.com
Get Genuine Coach Bags Direct from Manufacturer! Coach.com
Christian Dior Bags #1 Reseller. Insane prices! Visit Google Store
Make a genuine Dior Bag to order! Logo extra. Visit Google Store
Ads related to “Prada”

More listings tagged “Christian Dior” at Google Store . . .

Prada. Original. Incomparable. Prada.com
The Devil Wore Prada. You can too! Heavenly prices. Sketchy.ru
Get Genuine Coach Bags Direct from Manufacturer! Coach.com
Make a genuine Prada Bag to order! Logo extra. Visit Google Store
Strut your 2nd hand Prada style for under $20! Visit Google Store
Ads related to “Gucci”

More listings tagged “Prada” at Google Store . . .

Too Poochy for Gucci? Biggirlsknockoffs.com
Get Genuine Coach Bags Direct from Manufacturer! Coach.com
Make your genuine Gucci Bag to order! Logo extra. Visit Google Store
Pre-owned Gucci designer chic under $25! Visit Google Store

More listings tagged “Gucci” at Google Store . . .

All logos owned by their respective trademark holders, used here for search-convenience only and not as a signal of
endorsement. Google does not inspect listings in search results or Google Store for authenticity. Buyer beware!

Contributory Infringement

195

be interested in the wider category of designer bags. As you can see, Coach has done
this with several of the designer bags featured on the page.
Above the yellow highlighted advertisements is a header that says “Ads related
to X.” Next to it appears an information icon: If that icon is clicked, the following
message appears: “Google is not responsible for these listings and does not warrant
their accuracy. If you believe this advertisement makes inappropriate use of your
intellectual property, please go to our “Abuse” page.” As you can see, there are
additional warnings at the top and bottom of the page that express in different language
the point that Google does not screen or endorse the listings.
Please examine the layout of the search page included as an illustration on the
previous page. The user initially searched for Louis Vuitton handbags and so that is
the first result shown. In addition, Google’s famous search technology has revealed
“clusters” of trademarked names. Those who search for “Prius” are statistically likely
also be interested in and to click upon ads related to other hybrid or electric vehicles,
but not those for Jaguar or Lamborghini. Those who search for Prada are statistically
likely to be interested in other high-end designers, but not in Payless Shoe Source or
Walmart. Having uncovered this pattern of interest, Google’s “Clustersearch” algorithm facilitates it by automatically constructing a page that features “related” brands
to those for which the consumer is actually searching. The program has been
extremely successful with a high rate of “click through,” demonstrating, as far as
Google engineers are concerned, that they are giving their users the goods and services
for which they really wanted to search.
At the top of the page, Google inserts the following description. “YOU
SEARCHED FOR ‘[Trademark Name].’ FOR COMPARISON PURPOSES
GOOGLE’S “CLUSTERSEARCH” AUTOMATICALLY LISTS OTHER
DESIGNERS AND MERCHANTS WITH RELATED OFFERINGS. (All listings
sole responsibility of posters.)” The latter limitation is included because Google
cannot know exactly what the vendor is selling—only that it was willing to signal its
interest by purchasing the AdWord or, in the case of Google Store, “tagging” its
advertisement with the word in question. (When sellers list goods for sale in Google
Store, the procedure is slightly different than for AdWords. For no additional fee they
can “tag” their post with any keyword they choose—Google does not suggest the tags.
Goods tagged with famous brand names will automatically be featured in Google
searches for those brand names.)
As you can see, Google offers a useful visual cue to each cluster of
advertisements by featuring the logo for the brand in question on the left hand side of
the page. Google’s research has shown that as many as 20% of consumers visually
recognize the logo even when they do not know the actual name of the brand. For
example, the Louis Vuitton interlocking LV pattern shown in Figure One is recognized
as a trademark for “a fancy designer” by many clueless males buying bags as gifts,
though they could not name or spell the actual designer involved. A disclaimer at the
bottom of the page states, “All logos owned by their respective trademark holders,
used here for search-convenience only and not as a signal of endorsement.”
Google Store adds to the existing features on Google Shopping search pages, a
service equivalent to Craigslist or eBay. For a percentage of any sale, Store lists
advertisements of individual sellers, provides a reputational “ranking” system that offers
feedback on reliability, and facilitates payment. The Store listings are displayed

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immediately below the highlighted listings. Your predecessor as General Counsel
pondered the design of the system at length and decided that Google could not and
should not attempt to screen or vet listings in order to judge the truth of the advertising
or the authenticity of the product. Indeed, its entire policy is purposefully “hands off.”
“It is just like search!” he said, “We can’t examine every webpage on the Internet for
copyright infringement and we can’t comb through 100 million listings to figure out
who is selling shoddy or counterfeit goods!” Indeed, he says that attempting to screen
listings would appear to offer a guarantee of authenticity that Google could not back up.
Instead of vetting individual listings, Google offers a “takedown” system
through its “Abuse” page for those who believe their intellectual property has been
misused. For example, if a copyright or trademark owner complains about an individual
listing—either in the “featured listings” or in the Google Store—on grounds that it
infringes their rights, Google will remove it. Thousands of such takedown requests are
received and processed every day, though trademark owners complain that it is “like
trying to empty the ocean with a teacup.” Though it does process all these requests,
Google refuses to block the use of the trademarked term preemptively by anyone but
the owner of the mark. Your predecessor was very clear on this point. “The ability to
buy competitors’ trademarks as AdWords is a feature, not a bug!”
In addition, Google will not comply with takedown requests on advertisements
that are not claiming to sell the complainant’s actual trademarked goods. For example,
when Coach bags are listed in the Louis Vuitton advertisements, because Coach has
purchased “Louis Vuitton” as an AdWord, Google refused to remove the advertisement
even when Vuitton complained. “They aren’t selling Vuitton, they are selling Coach!
It says that right in the ad,” said your pugnacious predecessor. Only if a reseller claims
to be selling exactly the trademarked goods in question, referred to by a letter for letter
identical trademark name, will Google take the word of the trademark owner that the
goods are counterfeit and thus remove the listing. You have noticed that new “resale”
postings immediately crop up after every takedown and you assume some of them must
be genuine; indeed, Google receives some complaints from sellers who claim that their
legitimate second-hand sale has been blocked by an overly zealous rights-holder.
As part of your welcome to the job, your bosses have asked you to take a look at the
problem above because they think “there might be a couple of Lanham Act issues.”
1.) Is AdWords using the marks of others in commerce? Is Clustersearch? Why?
2.) Does Google violate registered trademarks by creating a likelihood of
consumer confusion through the AdWords program? Through Clustersearch?
Why or why not? What are Google’s best defenses?
3.) Is Google Store guilty of contributory trademark infringement?

CHAPTER EIGHT

Defenses to Trademark Infringement:
Fair & Nominative Use
We have already seen many of the internal limitations of trademark law. Its rights are
constrained from their creation—ownership not of the word, or the image, but rather the
word or image used in relationship to a particular good or service. They are constrained
by the requirements of use in commerce, not only before the rights are obtained, but as a
continuing requirement for the right to exist. They are constrained by the requirement of
use as a mark—both that the signals must be deliberately sent by the producer as trademarks—not mottos or mission statements—and in the distinctiveness, acquired or inherent, perceived by the consumer. They are constrained by the limitations that trademarks
can never be over functional features of the product; TrafFix provides one obvious
example, but so does the discussion in Qualitex of all the occasions on which color cannot
be owned, such as green for farm equipment, given that fashion-conscious farmers may
want their tractors to match. They are constrained by the limitation of genericide, or
“genericity.” Even if the producer created an entirely new name—fanciful and arbitrary—
that mark will be lost if it becomes the generic term for the goods or services involved.
Finally, they are constrained by the reach—however indeterminate—of the requirements
of the First Amendment, to allow speech and commentary about the mark, and of the
requirements of efficient competitive consumer communication in the marketplace.
In this chapter, we focus on two particular defenses, fair use and nominative use,
which reflect these limitations but also illustrate their operation in action, particularly in
the context of new business models and new technologies such as the internet.
The first defense, “descriptive” or “classic” fair use, is laid out in the Lanham Act
in § 1115(b), which describes limitations on the § 1065 “incontestability” of a mark that
has been registered on the Principal Register for five years. (“Incontestable” could more
accurately be described as “contestable for fewer reasons.”) But fair use has been
judicially developed to be a more general limitation on trademarks, even if they are not
registered or incontestable. From the language below, courts have extracted the following
three-part test for descriptive fair use: the mark must be used (1) other than as a mark
(i.e. not to identify the product’s source), (2) in a descriptive sense (though the mark does
not have to literally describe the defendant’s product, it can instead describe an
aspirational effect—both “Come on Strong” for menswear or “Seal it with a Kiss” for
lipstick were found to be descriptive), and (3) in good faith.
1115(b) To the extent that the right to use the registered mark has
become incontestable the registration shall be conclusive evidence of
the registrant’s exclusive right to use the registered mark in commerce
. . . subject to the following defenses. . . .
4.) That the use of the name, term, or device charged to be an
infringement is a use, otherwise than as a mark, of the party’s
individual name in his own business, or of the individual name of
anyone in privity with such party, or of a term or device which is
descriptive of and used fairly and in good faith only to describe
the goods or services of such party, or their geographic origin. . . .

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KP Permanent Make-Up, Inc. v.
Lasting Impression I, Inc., et al.

543 U.S. 111 (2004)

Justice SOUTER delivered the opinion of the Court.
The question here is whether a party raising the statutory affirmative defense of
fair use to a claim of trademark infringement, 15 U.S.C. § 1115(b)(4), has a burden to
negate any likelihood that the practice complained of will confuse consumers about the
origin of the goods or services affected. We hold it does not.
I
Each party to this case sells permanent makeup, a mixture of pigment and liquid
for injection under the skin to camouflage injuries and modify nature’s dispensations,
and each has used some version of the term “micro color” (as one word or two, singular
or plural) in marketing and selling its product. Petitioner KP Permanent Make-Up, Inc.,
claims to have used the single-word version since 1990 or 1991 on advertising flyers and
since 1991 on pigment bottles. Respondents Lasting Impression I, Inc., and its licensee,
MCN International, Inc. (Lasting, for simplicity), deny that KP began using the term that
early, but we accept KP’s allegation as true for present purposes; the District and Appeals
Courts took it to be so, and the disputed facts do not matter to our resolution of the issue.
In 1992, Lasting applied to the United States Patent and Trademark Office (PTO) under
15 U.S.C. § 1051 for registration of a trademark consisting of the words “Micro Colors”
in white letters separated by a green bar within a black square. The PTO registered the
mark to Lasting in 1993, and in 1999 the registration became incontestable. § 1065.
It was also in 1999 that KP produced a 10-page advertising brochure using “microcolor” in a large, stylized typeface, provoking Lasting to demand that KP stop using the
term. Instead, KP sued Lasting in the Central District of California, seeking, on more
than one ground, a declaratory judgment that its language infringed no such exclusive
right as Lasting claimed. Lasting counterclaimed, alleging, among other things, that KP
had infringed Lasting’s “Micro Colors” trademark.
KP sought summary judgment on the infringement counterclaim, based on the
statutory affirmative defense of fair use, 15 U.S.C. § 1115(b)(4). After finding that
Lasting had conceded that KP used the term only to describe its goods and not as a mark,
the District Court held that KP was acting fairly and in good faith because undisputed
facts showed that KP had employed the term “microcolor” continuously from a time
before Lasting adopted the two-word, plural variant as a mark. Without enquiring
whether the practice was likely to cause confusion, the court concluded that KP had made
out its affirmative defense under § 1115(b)(4).
On appeal, the Court of Appeals for the Ninth Circuit thought it was error for the
District Court to have addressed the fair use defense without delving into the matter of
possible confusion on the part of consumers about the origin of KP’s goods. The reviewing
court took the view that no use could be recognized as fair where any consumer confusion
was probable, and although the court did not pointedly address the burden of proof, it
appears to have placed it on KP to show absence of consumer confusion. We now vacate
the judgment of the Court of Appeals.
II
A
The Trademark Act of 1946, known for its principal proponent as the Lanham Act,

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60 Stat. 427, as amended, 15 U.S.C. § 1051 et seq., provides the user of a trade or service
mark with the opportunity to register it with the PTO, §§ 1051, 1053. If the registrant then
satisfies further conditions including continuous use for five consecutive years, “the right
. . . to use such registered mark in commerce” to designate the origin of the goods specified in the registration “shall be incontestable” outside certain listed exceptions. § 1065.
The holder of a registered mark (incontestable or not) has a civil action against
anyone employing an imitation of it in commerce when “such use is likely to cause
confusion, or to cause mistake, or to deceive.” § 1114(1)(a). Although an incontestable
registration is “conclusive evidence . . . of the registrant’s exclusive right to use the . . .
mark in commerce,” § 1115(b), the plaintiff’s success is still subject to “proof of
infringement as defined in section 1114.” And that, as just noted, requires a showing that
the defendant’s actual practice is likely to produce confusion in the minds of consumers
about the origin of the goods or services in question. This plaintiff’s burden has to be
kept in mind when reading the relevant portion of the further provision for an affirmative
defense of fair use, available to a party whose
“use of the name, term, or device charged to be an infringement is a use,
otherwise than as a mark, . . . of a term or device which is descriptive of
and used fairly and in good faith only to describe the goods or services of
such party, or their geographic origin. . . .” § 1115(b)(4).
Two points are evident. Section 1115(b) places a burden of proving likelihood of
confusion (that is, infringement) on the party charging infringement even when relying
on an incontestable registration. And Congress said nothing about likelihood of
confusion in setting out the elements of the fair use defense in § 1115(b)(4).
Starting from these textual fixed points, it takes a long stretch to claim that a defense
of fair use entails any burden to negate confusion. It is just not plausible that Congress
would have used the descriptive phrase “likely to cause confusion, or to cause mistake, or
to deceive” in § 1114 to describe the requirement that a markholder show likelihood of
consumer confusion, but would have relied on the phrase “used fairly” in § 1115(b)(4) in
a fit of terse drafting meant to place a defendant under a burden to negate confusion. . . .
Finally, a look at the typical course of litigation in an infringement action points up
the incoherence of placing a burden to show nonconfusion on a defendant. If a plaintiff
succeeds in making out a prima facie case of trademark infringement, including the element
of likelihood of consumer confusion, the defendant may offer rebutting evidence to
undercut the force of the plaintiff’s evidence on this (or any) element, or raise an affirmative
defense to bar relief even if the prima facie case is sound, or do both. But it would make
no sense to give the defendant a defense of showing affirmatively that the plaintiff cannot
succeed in proving some element (like confusion); all the defendant needs to do is to leave
the factfinder unpersuaded that the plaintiff has carried its own burden on that point. A
defendant has no need of a court’s true belief when agnosticism will do. Put another way,
it is only when a plaintiff has shown likely confusion by a preponderance of the evidence
that a defendant could have any need of an affirmative defense, but under Lasting’s theory
the defense would be foreclosed in such a case. “[I]t defies logic to argue that a defense
may not be asserted in the only situation where it even becomes relevant.” Shakespeare
Co. v. Silstar Corp. Nor would it make sense to provide an affirmative defense of no
confusion plus good faith, when merely rebutting the plaintiff’s case on confusion would
entitle the defendant to judgment, good faith or not. . . .
Since the burden of proving likelihood of confusion rests with the plaintiff, and the
fair use defendant has no free-standing need to show confusion unlikely, it follows (contrary
to the Court of Appeals’s view) that some possibility of consumer confusion must be

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compatible with fair use, and so it is. The common law’s tolerance of a certain degree of
confusion on the part of consumers followed from the very fact that in cases like this one an
originally descriptive term was selected to be used as a mark, not to mention the
undesirability of allowing anyone to obtain a complete monopoly on use of a descriptive
term simply by grabbing it first. The Lanham Act adopts a similar leniency, there being no
indication that the statute was meant to deprive commercial speakers of the ordinary utility
of descriptive words. “If any confusion results, that is a risk the plaintiff accepted when it
decided to identify its product with a mark that uses a well known descriptive phrase.”
Cosmetically Sealed Industries, Inc. v. Chesebrough-Pond’s USA Co. See also Park ’N Fly,
Inc. v. Dollar Park & Fly, Inc. (1985) (noting safeguards in Lanham Act to prevent commercial monopolization of language); Car-Freshner Corp. v. S.C. Johnson & Son, Inc. (2d
Cir. 1995) (noting importance of “protect[ing] the right of society at large to use words or
images in their primary descriptive sense”). This right to describe is the reason that
descriptive terms qualify for registration as trademarks only after taking on secondary
meaning as “distinctive of the applicant’s goods,” 15 U.S.C. § 1052(f), with the registrant
getting an exclusive right not in the original, descriptive sense, but only in the secondary
one associated with the markholder’s goods. . . .
III
In sum, a plaintiff claiming infringement of an incontestable mark must show
likelihood of consumer confusion as part of the prima facie case, 15 U.S.C. § 1115(b),
while the defendant has no independent burden to negate the likelihood of any confusion
in raising the affirmative defense that a term is used descriptively, not as a mark, fairly,
and in good faith, § 1115(b)(4).
Because we read the Court of Appeals as requiring KP to shoulder a burden on the
issue of confusion, we vacate the judgment and remand the case for further proceedings
consistent with this opinion. It is so ordered.
Questions:
1.) The Ninth Circuit thought that the fair use defense was subject to the limitation that the
defendant must show that the use is not likely to confuse the consuming public. It would
seem they have a strong argument on their side. Is the purpose of trademark law not to avoid
the likelihood of consumer confusion? Why does the Supreme Court disagree?
2.) In intellectual property, as elsewhere in the law, burdens of proof are all important,
and the way they are set up can tell us much about the goals of the statutory scheme.
Explain what the Court means when it says:
Put another way, it is only when a plaintiff has shown likely confusion
by a preponderance of the evidence that a defendant could have any need
of an affirmative defense, but under Lasting’s theory the defense would
be foreclosed in such a case.
3.) You may recall that the Abercrombie case from Chapter 5 ultimately concluded that,
even though Abercrombie had a valid trademark in “safari” for boots, Hunting World’s
use of “Camel Safari” “Hippo Safari” and “Safari Chukka” for boots from Africa was a
descriptive fair use “to apprise the public of the type of product by referring to its origin
and use.” Another oft-cited example is Ocean Spray’s use of “sweet-tart” to describe the
taste of its cranberry juice—because this was a fair use, it did not infringe the “Sweetarts”
mark for candy. Sunmark v. Ocean Spray Cranberries (7th Cir. 1995).

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201

New Kids on the Block v. New America Pub., Inc.

971 F.2d 302 (9th Cir. 1992)

KOZINSKI, Circuit Judge.
The individual plaintiffs perform professionally as The New Kids on the Block,
reputedly one of today’s hottest musical acts. This case requires us to weigh their rights
in that name against the rights of others to use it in identifying the New Kids as the
subjects of public opinion polls.
Background
No longer are entertainers limited to their craft in marketing themselves to the
public. This is the age of the multi-media publicity blitzkrieg: Trading on their popularity,
many entertainers hawk posters, T-shirts, badges, coffee mugs and the like—handsomely
supplementing their incomes while boosting their public images. The New Kids are no
exception; the record in this case indicates there are more than 500 products or services
bearing the New Kids trademark. Among these are services taking advantage of a recent
development in telecommunications: 900 area code numbers, where the caller is charged
a fee, a portion of which is paid to the call recipient. Fans can call various New Kids 900
numbers to listen to the New Kids talk about themselves, to listen to other fans talk about
the New Kids, or to leave messages for the New Kids and other fans.
The defendants, two newspapers of national circulation, conducted separate polls
of their readers seeking an answer to a pressing question: Which one of the New Kids is
the most popular? USA Today’s announcement contained a picture of the New Kids and
asked, “Who’s the best on the block?” The announcement listed a 900 number for voting,
noted that “any USA Today profits from this phone line will go to charity,” and closed
with the following:
New Kids on the Block are pop’s hottest group. Which of the five is your
fave? Or are they a turn off? . . . Each call costs 50 cents. Results in
Friday’s Life section.

The USA Today poll and winner

The Star’s announcement, under a picture of the New Kids, went to the heart of the
matter: “Now which kid is the sexiest?” The announcement, which appeared in the
middle of a page containing a story on a New Kids concert, also stated:
Which of the New Kids on the Block would you most like to move next
door? STAR wants to know which cool New Kid is the hottest with our
readers.

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Readers were directed to a 900 number to register their votes; each call cost 95 cents per
minute.
Fearing that the two newspapers were undermining their hegemony over their fans,
the New Kids filed a shotgun complaint in federal court raising no fewer than ten claims:
(1) common law trademark infringement; (2) Lanham Act false advertising; (3) Lanham
Act false designation of origin; (4) Lanham Act unfair competition; (5) state trade name
infringement; (6) state false advertising; (7) state unfair competition; (8) commercial
misappropriation; (9) common-law misappropriation; and (10) intentional interference
with prospective economic advantage. The two papers raised the First Amendment as a
defense, on the theory that the polls were part and parcel of their “news-gathering
activities.” The district court granted summary judgment for defendants.
Discussion
. . . [W]e consider first whether the New Kids have stated viable claims on their
various causes of action.
I
A. Since at least the middle ages, trademarks have served primarily to identify the
source of goods and services, “to facilitate the tracing of ‘false’ or defective wares and the
punishment of the offending craftsman.” F. Schechter, The Historical Foundations of the
Law Relating to Trademarks 47 (1925). . . . Throughout the development of trademark law,
the purpose of trademarks remained constant and limited: Identification of the manufacturer
or sponsor of a good or the provider of a service. And the wrong protected against was
traditionally equally limited: Preventing producers from free-riding on their rivals’
marks. . . . The core protection of the Lanham Act remains faithful to this conception. . . .
A trademark is a limited property right in a particular word, phrase or symbol. And
although English is a language rich in imagery, we need not belabor the point that some
words, phrases or symbols better convey their intended meanings than others. See San
Francisco Arts & Athletics, Inc. v. U.S.O.C. (1987) (Brennan, J., dissenting) (“[A] jacket
reading ‘I Strongly Resent the Draft’ would not have conveyed Cohen’s message.”).
Indeed, the primary cost of recognizing property rights in trademarks is the removal of
words from (or perhaps non-entrance into) our language. Thus, the holder of a trademark
will be denied protection if it is (or becomes) generic, i.e., if it does not relate exclusively
to the trademark owner’s product. See, e.g., Kellogg Co. v. National Biscuit Co. (1938)
(“shredded wheat”); Eastern Air Lines, Inc. v. New York Air Lines, Inc. (S.D.N.Y. 1983)
(“air-shuttle” to describe hourly plane service). This requirement allays fears that producers
will deplete the stock of useful words by asserting exclusive rights in them. When a
trademark comes to describe a class of goods rather than an individual product, the courts
will hold as a matter of law that use of that mark does not imply sponsorship or
endorsement of the product by the original holder.
A related problem arises when a trademark also describes a person, a place or an
attribute of a product. If the trademark holder were allowed exclusive rights in such use, the
language would be depleted in much the same way as if generic words were protectable.
Thus trademark law recognizes a defense where the mark is used only “to describe the goods
or services of [a] party, or their geographic origin.” 15 U.S.C. § 1115(b)(4). “The ‘fair-use’
defense, in essence, forbids a trademark registrant to appropriate a descriptive term for his
exclusive use and so prevent others from accurately describing a characteristic of their
goods.” Soweco, Inc. v. Shell Oil Co. (5th Cir. 1980). Once again, the courts will hold as a
matter of law that the original producer does not sponsor or endorse another product that

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uses his mark in a descriptive manner. See, e.g., Schmid Laboratories v. Youngs Drug Products Corp. (D.N.J. 1979) (“ribbed” condoms).
With many well-known trademarks, such as Jell-O, Scotch tape and Kleenex, there
are equally informative non-trademark words describing the products (gelatin, cellophane
tape and facial tissue). But sometimes there is no descriptive substitute, and a problem
closely related to genericity and descriptiveness is presented when many goods and
services are effectively identifiable only by their trademarks. For example, one might refer
to “the two-time world champions” or “the professional basketball team from Chicago,”
but it’s far simpler (and more likely to be understood) to refer to the Chicago Bulls. In
such cases, use of the trademark does not imply sponsorship or endorsement of the product
because the mark is used only to describe the thing, rather than to identify its source.
Indeed, it is often virtually impossible to refer to a particular product for purposes
of comparison, criticism, point of reference or any other such purpose without using the
mark. For example, reference to a large automobile manufacturer based in Michigan
would not differentiate among the Big Three; reference to a large Japanese manufacturer
of home electronics would narrow the field to a dozen or more companies. Much useful
social and commercial discourse would be all but impossible if speakers were under
threat of an infringement lawsuit every time they made reference to a person, company
or product by using its trademark.
A good example of this is Volkswagenwerk Aktiengesellschaft v. Church (9th Cir.
1969), where we held that Volkswagen could not prevent an automobile repair shop from
using its mark. We recognized that in “advertising [the repair of Volkswagens, it] would be
difficult, if not impossible, for [Church] to avoid altogether the use of the word
‘Volkswagen’ or its abbreviation ‘VW,’ which are the normal terms which, to the public at
large, signify appellant’s cars.” Church did not suggest to customers that he was part of the
Volkswagen organization or that his repair shop was sponsored or authorized by VW; he
merely used the words “Volkswagen” and “VW” to convey information about the types of
cars he repaired. Therefore, his use of the Volkswagen trademark was not an infringing use.
The First Circuit confronted a similar problem when the holder of the trademark
“Boston Marathon” tried to stop a television station from using the name:
T]he words “Boston Marathon” . . . do more than call attention to
Channel 5’s program; they also describe the event that Channel 5 will
broadcast. Common sense suggests (consistent with the record here) that
a viewer who sees those words flash upon the screen will believe simply
that Channel 5 will show, or is showing, or has shown, the marathon, not
that Channel 5 has some special approval from the [trademark holder] to
do so. In technical trademark jargon, the use of words for descriptive
purposes is called a “fair use,” and the law usually permits it even if the
words themselves also constitute a trademark.
WCVB-TV v. Boston Athletic Ass’n (1st Cir. 1991). Similarly, competitors may use a rival’s
trademark in advertising and other channels of communication if the use is not false or
misleading. See, e.g., Smith v. Chanel, Inc. (9th Cir. 1968) (maker of imitation perfume may
use original’s trademark in promoting product).
Cases like these are best understood as involving a non-trademark use of a mark—
a use to which the infringement laws simply do not apply, just as videotaping television
shows for private home use does not implicate the copyright holder’s exclusive right to
reproduction. See Sony Corp. v. Universal City Studios, Inc. (1984). Indeed, we may
generalize a class of cases where the use of the trademark does not attempt to capitalize
on consumer confusion or to appropriate the cachet of one product for a different one.

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Such nominative use of a mark—where the only word reasonably available to describe a
particular thing is pressed into service—lies outside the strictures of trademark law:
Because it does not implicate the source-identification function that is the purpose of
trademark, it does not constitute unfair competition; such use is fair because it does not
imply sponsorship or endorsement by the trademark holder.
To be sure, this is not the classic fair use case where the defendant has used the plaintiff’s mark to describe the defendant’s own product. Here, the New Kids trademark is used
to refer to the New Kids themselves. We therefore do not purport to alter the test applicable
in the paradigmatic fair use case. If the defendant’s use of the plaintiff’s trademark refers to
something other than the plaintiff’s product, the traditional fair use inquiry will continue to
govern. But, where the defendant uses a trademark to describe the plaintiff’s product, rather
than its own, we hold that a commercial user is entitled to a nominative fair use defense
provided he meets the following three requirements: First, the product or service in question
must be one not readily identifiable without use of the trademark; second, only so much of
the mark or marks may be used as is reasonably necessary to identify the product or service;
and third, the user must do nothing that would, in conjunction with the mark, suggest
sponsorship or endorsement by the trademark holder. . . .
The New Kids argue that, even if the newspapers are entitled to a nominative fair
use defense for the announcements, they are not entitled to it for the polls themselves,
which were money-making enterprises separate and apart from the newspapers’ reporting
businesses. According to plaintiffs, defendants could have minimized the intrusion into
their rights by using an 800 number or asking readers to call in on normal telephone lines
which would not have resulted in a profit to the newspapers based on the conduct of the
polls themselves.
The New Kids see this as a crucial difference, distinguishing this case from
Volkswagenwerk, WCBV-TV and other nominative use cases. The New Kids’ argument
in support of this distinction is not entirely implausible: They point out that their fans,
like everyone else, have limited resources. Thus a dollar spent calling the newspapers’
900 lines to express loyalty to the New Kids may well be a dollar not spent on New Kids
products and services, including the New Kids’ own 900 numbers. In short, plaintiffs
argue that a nominative fair use defense is inapplicable where the use in question
competes directly with that of the trademark holder.
We reject this argument. While the New Kids have a limited property right in their
name, that right does not entitle them to control their fans’ use of their own money. Where,
as here, the use does not imply sponsorship or endorsement, the fact that it is carried on for
profit and in competition with the trademark holder’s business is beside the point. Voting
for their favorite New Kid may be, as plaintiffs point out, a way for fans to articulate their
loyalty to the group, and this may diminish the resources available for products and services
they sponsor. But the trademark laws do not give the New Kids the right to channel their
fans’ enthusiasm (and dollars) only into items licensed or authorized by them. See International Order of Job’s Daughters v. Lindeburg & Co. (9th Cir. 1990) (no infringement
where unauthorized jewelry maker produced rings and pins bearing fraternal organization’s
trademark). The New Kids could not use the trademark laws to prevent the publication of
an unauthorized group biography or to censor all parodies or satires which use their name.
We fail to see a material difference between these examples and the use here.
Summary judgment was proper as to the first seven causes of action because they
all hinge on a theory of implied endorsement; there was none here as the uses in question
were purely nominative.

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Questions:
1.) Is anything more reflective of life’s ephemeral nature, its transitory enthusiasms, its
fleeting follies than . . . yesterday’s embarrassing boy band? (Not for credit.)
2.) What is the key difference between the situations in K.P. Makeup and New Kids? Is
this the same defense? Reflective of the same policies?
3.) The band argues, probably correctly, that in the 1-900 number polls they set up, the
newspapers are deliberately exploiting the consumer goodwill and strength of name
recognition of the band. They are reaping where they have not sown, intentionally profiting
from a positive externality (consumer goodwill and brand recognition) created by another.
Under the broader vision of trademark discussed in the last chapter, this is exactly what
trademark is designed to prevent. Yet Judge Kozinski resolutely says such uses are allowed.
Why? What analogies does he use—actions we clearly wish to allow—to show the
undesirability of a more expansive conception of the reach of trademark law?
4.) How does the following passage from the case fit with the views put forward by
Pitney in INS? With the Lois jeans court’s vision of “room to expand the brand”?
While the New Kids have a limited property right in their name, that right
does not entitle them to control their fans’ use of their own money. Where,
as here, the use does not imply sponsorship or endorsement, the fact that
it is carried on for profit and in competition with the trademark holder’s
business is beside the point. Voting for their favorite New Kid may be, as
plaintiffs point out, a way for fans to articulate their loyalty to the group,
and this may diminish the resources available for products and services
they sponsor. But the trademark laws do not give the New Kids the right
to channel their fans’ enthusiasm (and dollars) only into items licensed or
authorized by them.
What distinctions might Kozinski offer to explain the difference between those situations
and this one?

Mattel Inc. v. Walking Mountain Productions

353 F.3d 792 (9th Cir. 2003)

PREGERSON, Circuit Judge.
In the action before us, Plaintiff Mattel Corporation asks us to prohibit Defendant
artist Thomas Forsythe from producing and selling photographs containing Mattel’s
“Barbie” doll. Most of Forsythe’s photos portray a nude Barbie in danger of being
attacked by vintage household appliances. Mattel argues that his photos infringe on their
copyrights, trademarks, and trade dress. We have jurisdiction pursuant to 28 U.S.C.
§ 1291 and affirm the district court’s grant of summary judgment to Forsythe.
BACKGROUND
Thomas Forsythe, aka “Walking Mountain Productions,” is a self-taught
photographer who resides in Kanab, Utah. He produces photographs with social and
political overtones. In 1997, Forsythe developed a series of 78 photographs entitled

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“Food Chain Barbie,” in which he depicted Barbie in various absurd and often sexualized
positions. Forsythe uses the word “Barbie” in some of the titles of his works. While his
works vary, Forsythe generally depicts one or more nude Barbie dolls juxtaposed with
vintage kitchen appliances. For example, “Malted Barbie” features a nude Barbie placed
on a vintage Hamilton Beach malt machine. “Fondue a la Barbie” depicts Barbie heads
in a fondue pot. “Barbie Enchiladas” depicts four Barbie dolls wrapped in tortillas and
covered with salsa in a casserole dish in a lit oven.
In his declaration in support of his motion for summary judgment, Forsythe describes the message behind his photographic series as an attempt to “critique[] the objectification of women associated with [Barbie], and [][to] lambast[] the conventional beauty
myth and the societal acceptance of women as objects because this is what Barbie
embodies.” He explains that he chose to parody Barbie in his photographs because he
believes that “Barbie is the most enduring of those products that feed on the insecurities
of our beauty and perfection-obsessed consumer culture.” Forsythe claims that, throughout his series of photographs, he attempts to communicate, through artistic expression, his
serious message with an element of humor. . . .

Tom Forsythe, Food Chain Barbie (1999). Image from the Univ. of Iowa Interventionist Collage exhibit.

On August 22, 2001, the Los Angeles federal district court granted Forsythe’s
motion for summary judgment. . . . The court found that Forsythe’s use of Mattel’s
trademark and trade dress caused no likelihood of confusion as to Mattel’s sponsorship
of Forsythe’s works. The court dismissed Mattel’s trademark dilution claim because it
found that Forsythe’s use had been “noncommercial.” . . .

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Mattel appeals the Los Angeles federal district court’s grant of summary judgment
in favor of Forsythe on the trademark, copyright, and state law claims. Mattel also appeals
the Los Angeles federal district court’s dismissal of its false advertising claim. . . .
We now address whether the district court erred in granting summary judgment in
favor of Forsythe on Mattel’s claims of trademark and trade dress infringement and
dilution. . . .
A. Trademark
As we recently recognized in MCA, . . . when marks “transcend their identifying
purpose” and “enter public discourse and become an integral part of our vocabulary,”
they “assume[] a role outside the bounds of trademark law.” Where a mark assumes such
cultural significance, First Amendment protections come into play. In these situations,
“the trademark owner does not have the right to control public discourse whenever the
public imbues his mark with a meaning beyond its source-identifying function.” See also
New Kids on the Block v. News Am. Publ’g Inc. (9th Cir. 1992).
As we determined in MCA, Mattel’s “Barbie” mark has taken on such a role in our
culture. In MCA, Mattel brought an identical claim against MCA Records, producers of
a song entitled “Barbie Girl” that contained lyrics that parodied and mocked Barbie.
Recognizing that First Amendment concerns in free expression are particularly present
in the realm of artistic works, we rejected Mattel’s claim. In doing so, we adopted the
Second Circuit’s First Amendment balancing test for applying the Lanham Act to titles
of artistic works as set forth in Rogers v. Grimaldi (2d Cir. 1989). The Rogers balancing
test requires courts to construe the Lanham Act “to apply to artistic works only where the
public interest in avoiding consumer confusion outweighs the public interest in free
expression.” Rogers. Accordingly, the Rogers test prohibits application of the Lanham
Act to titles of artistic works unless the title “has no artistic relevance to the underlying
work whatsoever or, if it has some artistic relevance, unless the title explicitly misleads
as to the source or the content of the work.”
Application of the Rogers test here leads to the same result as it did in MCA.
Forsythe’s use of the Barbie mark is clearly relevant to his work. . . . Accordingly, the
public interest in free and artistic expression greatly outweighs its interest in potential
consumer confusion about Mattel’s sponsorship of Forsythe’s works.
B. Trade dress
Mattel also claims that Forsythe misappropriated its trade dress in Barbie’s appearance, in violation of the Lanham Act, 15 U.S.C. § 1125. Mattel claims that it possesses a
trade dress in the Superstar Barbie head and the doll’s overall appearance. The district court
concluded that there was no likelihood that the public would be misled into believing that
Mattel endorsed Forsythe’s photographs despite Forsythe’s use of the Barbie figure.
Arguably, the Barbie trade dress also plays a role in our culture similar to the role
played by the Barbie trademark—namely, symbolization of an unattainable ideal of
femininity for some women. Forsythe’s use of the Barbie trade dress, therefore,
presumably would present First Amendment concerns similar to those that made us
reluctant to apply the Lanham Act as a bar to the artistic uses of Mattel’s Barbie
trademark in both MCA and this case. But we need not decide how the MCA/Rogers First
Amendment balancing might apply to Forsythe’s use of the Barbie trade dress because
we find, on a narrower ground, that it qualifies as nominative fair use. In the trademark
context, we recently held that a defendant’s use is classic fair use where “a defendant has
used the plaintiff’s mark only to describe his own product, and not at all to describe the
plaintiff’s product.” Cairns (emphasis in original). In contrast, a defendant’s use of a

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plaintiff’s mark is nominative where he or she “used the plaintiff’s mark to describe the
plaintiff’s product, even if the defendant’s ultimate goal is to describe his own product.”
Cairns (emphasis in original). The goal of a nominative use is generally for the “purposes
of comparison, criticism [or] point of reference.” New Kids on the Block. These two
mutually exclusive forms of fair use are equally applicable here in the trade dress context.
Applying these fair use standards to the trade dress context, we hold that a
defendant’s use is classic fair use where the defendant has used the plaintiff’s dress to
describe or identify the defendant’s own product and not at all to describe or identify the
plaintiff’s product. Likewise, a defendant’s use is nominative where he or she used the
plaintiff’s dress to describe or identify the plaintiff’s product, even if the defendant’s
ultimate goal is to describe or identify his or her own product.
Forsythe’s use of the Barbie trade dress is nominative. Forsythe used Mattel’s
Barbie figure and head in his works to conjure up associations of Mattel, while at the same
time to identify his own work, which is a criticism and parody of Barbie. See Cairns.
Where use of the trade dress or mark is grounded in the defendant’s desire to refer to the
plaintiff’s product as a point of reference for defendant’s own work, a use is nominative.
Fair use may be either nominative or classic. We recognize a fair use defense in
claims brought under § 1125 where the use of the trademark “does not imply sponsorship
or endorsement of the product because the mark is used only to describe the thing, rather
than to identify its source.” New Kids on the Block. Thus, we recently reiterated that, in
the trademark context, nominative use becomes nominative fair use when a defendant
proves three elements:
First, the plaintiff’s product or service in question must be one not
readily identifiable without use of the trademark; second, only so much
of the mark or marks may be used as is reasonably necessary to identify
the plaintiff’s product or service; and third, the user must do nothing that
would, in conjunction with the mark, suggest sponsorship or
endorsement by the trademark holder. . . .
We hold that Forsythe’s use of Mattel’s Barbie qualifies as nominative fair use. All
three elements weigh in favor of Forsythe. Barbie would not be readily identifiable in a
photographic work without use of the Barbie likeness and figure. Forsythe used only so
much as was necessary to make his parodic use of Barbie readily identifiable, and it is
highly unlikely that any reasonable consumer would have believed that Mattel sponsored
or was affiliated with his work. The district court’s grant of summary judgment to
Forsythe on Mattel’s trade dress infringement claim was, therefore, proper.
C. Dilution
Mattel also appeals the district court’s grant of summary judgment on its trademark
and dress dilution claims. The district court found that Forsythe was entitled to summary
judgment because his use of the Barbie mark and trade dress was parody and thus “his
expression is a non-commercial use.”
Dilution may occur where use of a trademark “whittle[s] away . . . the value of a
trademark” by “blurring their uniqueness and singularity” or by “tarnishing them with
negative associations.” MCA. However, “[t]arnishment caused merely by an editorial or
artistic parody which satirizes plaintiff’s product or its image is not actionable under an
anti-dilution statute because of the free speech protections of the First Amendment. . . .”
4 McCarthy, § 24:105. A dilution action only applies to purely commercial speech.
Parody is a form of noncommercial expression if it does more than propose a commercial

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transaction. Under MCA, Forsythe’s artistic and parodic work is considered noncommercial speech and, therefore, not subject to a trademark dilution claim.
We reject Mattel’s Lanham Act claims and affirm the district court’s grant of summary judgment in favor of Forsythe. Mattel cannot use “trademark laws to . . . censor all
parodies or satires which use [its] name” or dress. New Kids on the Block.
Question:
1.) The Mattel court says, helpfully for the purposes of this chapter,
In the trademark context, we recently held that a defendant’s use is
classic fair use where “a defendant has used the plaintiff’s mark only to
describe his own product, and not at all to describe the plaintiff’s
product.” Cairns (emphasis in original). In contrast, a defendant’s use of
a plaintiff’s mark is nominative where he or she “used the plaintiff’s
mark to describe the plaintiff’s product, even if the defendant’s ultimate
goal is to describe his own product.” Cairns (emphasis in original). The
goal of a nominative use is generally for the “purposes of comparison,
criticism [or] point of reference.” New Kids on the Block. These two
mutually exclusive forms of fair use are equally applicable here in the
trade dress context.
Give examples, not from our reading, of both fair and nominative use. Are they really
mutually exclusive? How would you classify this imaginary advertisement for Tesla
electric cars? “Tesla: the style of a Ferrari for someone with Prius values.” Does it qualify
for either defense? Does it violate 1125(a)?

Playboy Enterprises, Inc. v. Welles

279 F.3d 796 (9th Cir. 2002)

T.G. NELSON, Circuit Judge.
Playboy Enterprises, Inc. (PEI), appeals the district court’s grant of summary
judgment as to its claims of trademark infringement, unfair competition, and breach of
contract against Terri Welles. . . .
I.
Background
Terri Welles was on the cover of
Playboy in 1981 and was chosen to be the
Playboy Playmate of the Year for 1981.
Her use of the title “Playboy Playmate of
the Year 1981,” and her use of other trademarked terms on her website are at issue in this
suit. During the relevant time period, Welles’ website offered information about and free
photos of Welles, advertised photos for sale, advertised memberships in her photo club,
and promoted her services as a spokesperson. A biographical section described Welles’
selection as Playmate of the Year in 1981 and her years modeling for PEI. After the
lawsuit began, Welles included discussions of the suit and criticism of PEI on her website
and included a note disclaiming any association with PEI.

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PEI complains of four different uses of its trademarked terms on Welles’ website:
(1) the terms “Playboy” and “Playmate” in the metatags of the website; (2) the phrase
“Playmate of the Year 1981” on the masthead of the website; (3) the phrases “Playboy
Playmate of the Year 1981” and “Playmate of the Year 1981” on various banner ads,
which may be transferred to other websites; and (4) the repeated use of the abbreviation
“PMOY ’81” as the watermark on the pages of the website. PEI claimed that these uses
of its marks constituted trademark infringement, dilution, false designation of origin, and
unfair competition. The district court granted defendants’ motion for summary judgment.
PEI appeals the grant of summary judgment on its infringement and dilution claims. We
affirm in part and reverse in part.
Discussion
A. Trademark Infringement
Except for the use of PEI’s protected terms in the wallpaper of Welles’ website, we
conclude that Welles’ uses of PEI’s trademarks are permissible, nominative uses. They
imply no current sponsorship or endorsement by PEI. Instead, they serve to identify
Welles as a past PEI “Playmate of the Year.”
We articulated the test for a permissible, nominative use in New Kids On The Block
v. New America Publishing, Inc. . . . Unlike a traditional fair use scenario, the defendant
newspaper was using the trademarked term to describe not its own product, but the
plaintiff’s. Thus, the factors used to evaluate fair use were inapplicable. The use was
nonetheless permissible, we concluded, based on its nominative nature.
We adopted the following test for nominative use:
First, the product or service in question must be one not readily
identifiable without use of the trademark; second, only so much of the
mark or marks may be used as is reasonably necessary to identify the
product or service; and third, the user must do nothing that would, in
conjunction with the mark, suggest sponsorship or endorsement by the
trademark holder.
We noted in New Kids that a nominative use may also be a commercial one.
In cases in which the defendant raises a nominative use defense, the above threefactor test should be applied instead of the test for likelihood of confusion set forth in
Sleekcraft. The three-factor test better evaluates the likelihood of confusion in nominative
use cases. When a defendant uses a trademark nominally, the trademark will be identical
to the plaintiff’s mark, at least in terms of the words in question. Thus, application of the
Sleekcraft test, which focuses on the similarity of the mark used by the plaintiff and the
defendant, would lead to the incorrect conclusion that virtually all nominative uses are
confusing. The three-factor test—with its requirements that the defendant use marks only
when no descriptive substitute exists, use no more of the mark than necessary, and do
nothing to suggest sponsorship or endorsement by the mark holder—better addresses
concerns regarding the likelihood of confusion in nominative use cases.
1. Headlines and banner advertisements.
To satisfy the first part of the test for nominative use, “the product or service in
question must be one not readily identifiable without use of the trademark[.]” This situation
arises “when a trademark also describes a person, a place or an attribute of a product” and
there is no descriptive substitute for the trademark. In such a circumstance, allowing the
trademark holder exclusive rights would allow the language to “be depleted in much the
same way as if generic words were protectable.” In New Kids, we gave the example of the

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trademarked term, “Chicago Bulls.” We explained that “one might refer to the ‘two-time
world champions’ or ‘the professional basketball team from Chicago,’ but it’s far simpler
(and more likely to be understood) to refer to the Chicago Bulls.” Moreover, such a use of
the trademark would “not imply sponsorship or endorsement of the product because the
mark is used only to describe the thing, rather than to identify its source.” Thus, we
concluded, such uses must be excepted from trademark infringement law.
The district court properly identified Welles’ situation as one which must also be
excepted. No descriptive substitute exists for PEI’s trademarks in this context. The court
explained:
[T]here is no other way that Ms. Welles can identify or describe herself
and her services without venturing into absurd descriptive phrases. To
describe herself as the “nude model selected by Mr. Hefner’s magazine
as its number-one prototypical woman for the year 1981” would be
impractical as well as ineffectual in identifying Terri Welles to the public.
We agree. . . .
The second part of the nominative use test requires that “only so much of the mark
or marks may be used as is reasonably necessary to identify the product or service.”
Welles’ banner advertisements and headlines satisfy this element because they use only
the trademarked words, not the font or symbols associated with the trademarks.
The third element requires that the user do “nothing that would, in conjunction
with the mark, suggest sponsorship or endorsement by the trademark holder.” Welles
does nothing in conjunction with her use of the marks to suggest sponsorship or
endorsement by PEI. The marks are clearly used to describe the title she received from
PEI in 1981, a title that helps describe who she is. In addition to doing nothing in
conjunction with her use of the marks to suggest sponsorship or endorsement by PEI,
Welles affirmatively disavows any sponsorship or endorsement. Her site contains a clear
statement disclaiming any connection to PEI. Moreover, the text of the site describes her
ongoing legal battles with the company.
For the foregoing reasons, we conclude that Welles’ use of PEI’s marks in her
headlines and banner advertisements is a nominative use excepted from the law of
trademark infringement.
2. Metatags.
Welles includes the terms “playboy” and “playmate” in her metatags. Metatags
describe the contents of a website using keywords. Some search engines search metatags to
identify websites relevant to a search. Thus, when an internet searcher enters “playboy” or
“playmate” into a search engine that uses metatags, the results will include Welles’ site.
Because Welles’ metatags do not repeat the terms extensively, her site will not be at the top
of the list of search results. Applying the three-factor test for nominative use, we conclude
that the use of the trademarked terms in Welles’ metatags is nominative. As we discussed
above with regard to the headlines and banner advertisements, Welles has no practical way
of describing herself without using trademarked terms. In the context of metatags, we
conclude that she has no practical way of identifying the content of her website without
referring to PEI’s trademarks. A large portion of Welles’ website discusses her association
with Playboy over the years. Thus, the trademarked terms accurately describe the contents
of Welles’ website, in addition to describing Welles. Forcing Welles and others to use absurd
turns of phrase in their metatags, such as those necessary to identify Welles, would be
particularly damaging in the internet search context. Searchers would have a much more
difficult time locating relevant websites if they could do so only by correctly guessing the
long phrases necessary to substitute for trademarks. We can hardly expect someone

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searching for Welles’ site to imagine the same phrase proposed by the district court to
describe Welles without referring to Playboy—“the nude model selected by Mr. Hefner’s
organization. . . .” Yet if someone could not remember her name, that is what they would
have to do. Similarly, someone searching for critiques of Playboy on the internet would have
a difficult time if internet sites could not list the object of their critique in their metatags.
There is simply no descriptive substitute for the trademarks used in Welles’
metatags. Precluding their use would have the unwanted effect of hindering the free flow
of information on the internet, something which is certainly not a goal of trademark law.
Accordingly, the use of trademarked terms in the metatags meets the first part of the test
for nominative use. We conclude that the metatags satisfy the second and third elements
of the test as well. The metatags use only so much of the marks as reasonably necessary
and nothing is done in conjunction with them to suggest sponsorship or endorsement by
the trademark holder. We note that our decision might differ if the metatags listed the
trademarked term so repeatedly that Welles’ site would regularly appear above PEI’s in
searches for one of the trademarked terms.
3. Wallpaper/watermark.
The background, or wallpaper, of Welles’ site consists of the repeated abbreviation
“PMOY ’81,” which stands for “Playmate of the Year 1981.” Welles’ name or likeness
does not appear before or after “PMOY ’81.” The pattern created by the repeated
abbreviation appears as the background of the various pages of the website. Accepting,
for the purposes of this appeal, that the abbreviation “PMOY” is indeed entitled to
protection, we conclude that the repeated, stylized use of this abbreviation fails the
nominative use test. The repeated depiction of “PMOY ’81” is not necessary to describe
Welles. “Playboy Playmate of the Year 1981” is quite adequate. Moreover, the term does
not even appear to describe Welles—her name or likeness do not appear before or after
each “PMOY ’81.” Because the use of the abbreviation fails the first prong of the
nominative use test, we need not apply the next two prongs of the test.
Because the defense of nominative use fails here, and we have already determined
that the doctrine of fair use does not apply, we remand to the district court. The court
must determine whether trademark law protects the abbreviation “PMOY,” as used in the
wallpaper.
••••••••••
Notes: Background on Search Technology
We start with trademark’s assumption that a mark is a word that points from a
particular type of good to the source of that good. But we think of the mark doing that to the
consumer’s eyeball, the consumer’s brain, in the context of a storefront, a supermarket shelf
or a billboard. Along comes the internet, or more accurately in this case, the world wide
web. (If you do not know the difference, you should probably Google “history of the
internet,” and “history of the world wide web.” It will be fun. Honest.) And on the search
engine, the experienced reality is very different.
If you are walking through the aisles of the grocery store and I have a large picture
on my cereal box that looks like a single Cheerio, but no use of that brand’s name or logos,
then you—as a loyal Cheerio eater—may be interested by the similarly shaped product,
but you are not likely to be confused. If I have a sign by my mouthwash that says “compare
to Listerine” then I am using Listerine’s trademark to show consumers that this is a product
I claim to be comparable—a nominative use of the kind discussed in this chapter. But what
if the metatags on my website say “Listerine” many times, attracting Listerine-seeking

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213

visitors, who later stay on the site, intrigued, even after realizing their initial mistake. What
if the search engine displays other mouthwash ads whenever someone searches for
Listerine? We have to make a choice. Is this just (benign) product comparison? In that
situation, the brand name is used to convey useful information to a consumer making a
choice—like “compare to Listerine,” or “considering a Prius? Try our even more advanced
electric car.” Or is this like posting a Pizza Hut billboard at the exit to the freeway, which
leads hungry drivers to a restaurant that turns out to be Domino’s, which they would not
have chosen but where they may eat anyway, just because it was convenient?
Law is context-dependent and technology is a context.
That goes not just for the way trademark needs to adapt to search engines, but
within the world of search engines, because we need to understand what the search engine
is actually doing.
When Welles was decided search engines prioritized their search results (among
other things) according to word-frequency and metatag description. If a site had the words
“online shoe store” 1000 times in one point white font on a white background in its
“wallpaper” and if it put in the html metatags for the site <meta name=“keywords” “shoe
sale,” “designer shoes” “cute shoes” “designer shoe sale” “really cute shoes”> that site
would be more highly ranked in a search for shoe stores online.
To see what metatags are, pick an old, unfashionable website and click “view
source,” or something comparable, in your browser’s command menu. Here is an
imaginary one for a Duke basketball fan site.
<!DOCTYPE HTML PUBLIC “-//W3C//DTD HTML 4.0 Transitional//EN”>
<html>
<head>
<title>Duke basketball fan site.</title>
<meta name=“keywords” content=“Duke basketball, ACC
basketball, Duke fan, etc”>
<meta name=“description” content=“The Number One Site for
Duke Basketball Fans!!”>
</head>
<body>
Welcome to the Duke Basketball Fanatics page. (Not affiliated
with Duke University)
</body>
</html>

The metatags are, as their name suggests, meta. They are not the page. They are
talking about the page. The <title> tag tells your browser what the title of the page is.
(Look at the name that appears in the tab at the top of your browser screen.) The
<keywords> metatag tells search engines what the creator of the site thinks are the search
keywords that someone looking for a page like this might choose to search. The
<description> metatag provides the page creator’s own description of the page.
Insiders will know that this description is about as current a representation of the
way web pages are set up and search engines operate, as a diagram of a 1968 VW Beetle
would be for contemporary car design. There are still metatags, they are important and
search engines do look at them. But, precisely because search results were so easily
“gamed” with strategies like Ms. Welles’, search engineers had to find a better way. They
settled instead on what some have called the water-hole strategy. If you want to know where
the water is, do not look at a map, look at the tracks the animals leave on the ground. The
animals know where the water is. On the web, the users know where the best pages are and
they link to them. Rather than searching words and metatags, search engines—led by
Google’s Page Rank algorithm (hint Sergey Brin and Larry Page)—looked for patterns of

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D EFENSES TO T RADEMARK I NFRINGEMENT : F AIR & N OMINATIVE U SE

linkage. If James Boyle’s site http://thepublicdomain.org has lots of links from people who
seem knowledgeable about copyright, he gets a higher page rank. If he then links to another
page about copyright, then that page in turn is seen as more relevant to a copyright search.
It is a lay version of peer review. In the world of search engines that use such techniques,
while word frequency and metatags will still influence a result, they will have less impact
relative to other factors, perhaps changing the balance of interests. On the other hand, “link
bombing” which attempts to game search engine algorithms by creating hundreds of
spurious links to the owner’s site, might assume a greater importance.

Question:
1.) Look at the discussion above about how to apply trademark law to search engines.
Does one’s answer to that question depend on an analysis of the technology, or a choice
between the broad and narrow vision of trademark law discussed in the last chapter?
Both? What normative questions about the ultimate justification for trademark and its
temporal reach both before and after the moment of purchase would be relevant?

P ROBLEM 8-1
1) Look back at Problem 7-1, and in particular at Figure One on page 194 and the
paragraph at the bottom of page 206 that describes Google’s use of the company logos.
May Google use these logos to facilitate search in the way shown in Figure One?
Why or why not?
2) Now, doing your own research, find two examples in the real world of uses in
commerce that you think qualify as descriptive fair uses of others’ trademarks,
and two examples of uses in commerce that you think are nominative uses of
others’ trademarks. In each instance, explain why you think those uses meet the
criteria for the relevant defense.

CHAPTER NINE

False Advertising, Dilution & ‘Cyberpiracy’

We have seen how the Lanham Act reaches beyond registered marks to also protect
unregistered marks and trade dress. But it also provides other legal rights. We will deal
with three in this chapter—the § 1125(a) prohibition of false advertising and false or
misleading statements of fact, the § 1125(c) “anti dilution” provisions that offer special
protection to famous marks, and the § 1125(d) prohibition of “cyberpiracy” or “cybersquatting” that gives trademark owners, under certain circumstances, the right to prevent
“bad faith” registering of domain names.

1.) False Advertising: False or Misleading Statements of Fact
Section 1125(a) not only prohibits false or misleading designations of origin—the
provision that allows Federal enforcement of unregistered marks and trade dress—it also
prohibits false or misleading statements of fact. The cause of action for false advertising
is in 1125(a)(1)(B).
1125(a) Civil action
(1) Any person who, on or in connection with any goods or services,
or any container for goods, uses in commerce any word, term, name,
symbol, or device, or any combination thereof, or any false
designation of origin, false or misleading description of fact, or false
or misleading representation of fact, which—
(A) is likely to cause confusion, or to cause mistake, or to deceive as
to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or
her goods, services, or commercial activities by another person, or
(B) in commercial advertising or promotion, misrepresents the
nature, characteristics, qualities, or geographic origin of his or her
or another person’s goods, services, or commercial activities,
shall be liable in a civil action by any person who believes that he or
she is or is likely to be damaged by such act. . . .
Read the language of the statute closely. Do we need such a broad regulation of
commercial speech in the Federal trademark statute? What goals does it serve?
Unlike the § 1114 trademark infringement provisions, which can only be invoked
by the owner of the mark, § 1125(a)’s standing criteria are very broad: “shall be liable in
a civil action by any person who believes that he or she is or is likely to be damaged by
such act.” In practice, courts have narrowed this standing considerably, requiring the
presence of an actual economic or commercial interest. In Lexmark Int’l, Inc. v. Static
Control Components, Inc. (2014), the Supreme Court confirmed that, consistent with the
Lanham Act’s stated goal of “protect[ing] persons engaged in [commerce within the
control of Congress] against unfair competition,” in order to bring a § 1125(a) false
advertising claim, “a plaintiff must allege an injury to a commercial interest in reputation
or sales. A consumer who is hoodwinked into purchasing a disappointing product may
well have an injury-in-fact cognizable under Article III, but he cannot invoke the

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protection of the Lanham Act.” (This chapter focuses only on the cause of action for false
advertising in § 1125. Note that consumers can bring complaints for false advertising
under other schemes, including through the Federal Trade Commission or state laws.)

Pizza Hut, Inc. v. Papa John’s Intern., Inc.

227 F.3d 489 (5th Cir. 2000)

E. GRADY JOLLY, Circuit Judge:
This appeal presents a false advertising claim under section 43(a) of the Lanham
Act, resulting in a jury verdict for the plaintiff, Pizza Hut. At the center of this appeal is
Papa John’s four word slogan “Better Ingredients. Better Pizza.” . . .
I
A
Pizza Hut is a wholly owned subsidiary of Tricon Global Restaurants. With over
7000 restaurants (both company and franchisee-owned), Pizza Hut is the largest pizza
chain in the United States. In 1984, John Schnatter founded Papa John’s Pizza in the back
of his father’s tavern. Papa John’s has grown to over 2050 locations, making it the third
largest pizza chain in the United States.
In May 1995, Papa John’s adopted a new slogan: “Better Ingredients. Better Pizza.” In 1996, Papa
John’s filed for a federal trademark registration for
this slogan with the United States Patent & Trademark
Office (“PTO”). Its application for registration was
ultimately granted by the PTO. Since 1995, Papa
John’s has invested over $300 million building customer goodwill in its trademark “Better
Ingredients. Better Pizza.” The slogan has appeared on millions of signs, shirts, menus, pizza
boxes, napkins and other items, and has regularly appeared as the “tag line” at the end of
Papa John’s radio and television ads, or with the company logo in printed advertising.
On May 1, 1997, Pizza Hut launched its “Totally New Pizza” campaign. This
campaign was the culmination of “Operation Lightning Bolt,” a nine-month, $50 million
project in which Pizza Hut declared “war” on poor quality pizza. From the deck of a
World War II aircraft carrier, Pizza Hut’s president, David Novak, declared “war” on
“skimpy, low quality pizza.” National ads aired during this campaign touted the “better
taste” of Pizza Hut’s pizza, and “dared” anyone to find a “better pizza.”
In early May 1997, Papa John’s launched its first national ad campaign. The
campaign was directed towards Pizza Hut, and its “Totally New Pizza” campaign. In a
pair of TV ads featuring Pizza Hut’s co-founder Frank Carney, Carney touted the
superiority of Papa John’s pizza over Pizza Hut’s pizza. Although Carney had left the
pizza business in the 1980’s, he returned as a franchisee of Papa John’s because he liked
the taste of Papa John’s pizza better than any other pizza on the market. The ad campaign
was remarkably successful. During May 1997, Papa John’s sales increased 11.7 percent
over May 1996 sales, while Pizza Hut’s sales were down 8 percent.
On the heels of the success of the Carney ads, in February 1998, Papa John’s launched
a second series of ads touting the results of a taste test in which consumers were asked to
compare Papa John’s and Pizza Hut’s pizzas. In the ads, Papa John’s boasted that it “won
big time” in taste tests. The ads were a response to Pizza Hut’s “dare” to find a “better pizza.”

False Advertising: False or Misleading Statements of Fact

217

The taste test showed that consumers preferred Papa John’s traditional crust pizzas over
Pizza Hut’s comparable pizzas by a 16-point margin (58% to 42%). Additionally, consumers
preferred Papa John’s thin crust pizzas by a fourteen-point margin (57% to 43%).
Following the taste test ads, Papa John’s ran a series of ads comparing specific ingredients used in its pizzas with those used by its “competitors.” During the course of these ads,
Papa John’s touted the superiority of its sauce and its dough. During the sauce campaign,
Papa John’s asserted that its sauce was made from “fresh, vine-ripened tomatoes,” which
were canned through a process called “fresh pack,” while its competitors—including Pizza
Hut—make their sauce from remanufactured tomato paste. During the dough campaign,
Papa John’s stated that it used “clear filtered water” to make its pizza dough, while the
“biggest chain” uses “whatever comes out of the tap.” Additionally, Papa John’s asserted that
it gives its yeast “several days to work its magic,” while “some folks” use “frozen dough or
dough made the same day.” At or near the close of each of these ads, Papa John’s punctuated
its ingredient comparisons with the slogan “Better Ingredients. Better Pizza.”
Pizza Hut does not appear to contest the truthfulness of the underlying factual
assertions made by Papa John’s in the course of these ads. Pizza Hut argues, however,
that its own independent taste tests and other “scientific evidence” establishes that
filtered water makes no difference in pizza dough, that there is no “taste” difference
between Papa John’s “fresh-pack” sauce and Pizza Hut’s “remanufactured” sauce, and
that fresh dough is not superior to frozen dough. In response to Pizza Hut’s “scientific
evidence,” Papa John’s asserts that “each of these ‘claims’ involves a matter of common
sense choice (fresh versus frozen, canned vegetables and fruit versus remanufactured
paste, and filtered versus unfiltered water) about which individual consumers can and do
form preferences every day without ‘scientific’ or ‘expert’ assistance.”
In November 1997, Pizza Hut filed a complaint regarding Papa John’s “Better
Ingredients. Better Pizza.” advertising campaign with the National Advertising Division
of the Better Business Bureau, an industry self-regulatory body. This complaint,
however, did not produce satisfactory results for Pizza Hut.
B
. . . The district court, without objection, submitted the liability issue to the jury
through special interrogatories. The special issues submitted to the jury related to (1) the
slogan and (2) over Papa John’s objection, certain classes of groups of advertisements
referred to as “sauce claims,” “dough claims,” “taste test claims,” and “ingredients claims.”
On November 17, 1999, the jury returned its responses to the special issues finding
that Papa John’s slogan, and its “sauce claims” and “dough claims” were false or
misleading and deceptive or likely to deceive consumers.2 . . .
On January 3, 2000, the trial court, based upon the jury’s verdict and the evidence
presented by the parties in support of injunctive relief and on the issue of damages, entered
a Final Judgment and issued a Memorandum Opinion and Order. The court concluded that
the “Better Ingredients. Better Pizza.” slogan was “consistent with the legal definition of
non-actionable puffery” from its introduction in 1995 until May 1997. However, the
slogan “became tainted . . . in light of the entirety of Papa John’s post-May 1997
advertising.” Based on this conclusion, the magistrate judge permanently enjoined Papa
2

. . . Although the jury was specifically asked whether the advertisements were likely to deceive consumers,
the interrogatories failed to ask whether the deception created by these advertisements was material to the
consumers to which the ads were directed—that is, whether consumers actually relied on the misrepresentations in making purchasing decisions.

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John’s from “using any slogan in the future that constitutes a recognizable variation of the
phrase ‘Better Ingredients. Better Pizza.’ or which uses the adjective ‘Better’ to modify
the terms ‘ingredients’ and/or ‘pizza’.” Additionally, the court enjoined Papa John’s from
identifying Frank Carney as a co-founder of Pizza Hut, “unless such advertising includes
a voice-over, printed statement or a superimposed message which states that Frank Carney
has not been affiliated with Pizza Hut since 1980,” and enjoined the dissemination of any
advertising that was produced or disseminated prior to the date of this judgment and that
explicitly or implicitly states or suggested that “Papa John’s component is superior to the
same component of Pizza Hut’s pizzas.” Finally, the court enjoined Papa John’s from
“explicitly or implicitly claim[ing] that a component of Papa John’s pizza is superior to
the same component of Pizza Hut’s unless the superiority claim is supported by either (1)
scientifically demonstrated attributes of superiority or (2) taste test surveys.” Additionally,
the injunction required that if the claim is supported by taste test surveys, the advertising
shall include a printed statement, voice-over or “super,” whichever is appropriate, stating
the localities where the tests were conducted, the inclusive dates on which the surveys
were performed, and the specific pizza products that were tested. . . .
II
We review the district court’s denial of a motion for judgment as a matter of law
de novo applying the same standards as the district court. . . . Thus, for purposes of this
appeal, we will review the evidence, in the most favorable light to Pizza Hut, to determine
if, as a matter of law, it is sufficient to support a claim of false advertising under section
43(a) of the Lanham Act.

part:

III
A
Section 43(a) of the Lanham Act, codified at 15 U.S.C. § 1125, provides in relevant

Any person who . . . in commercial advertising or promotion, misrepresents the nature, characteristics, quality, or geographic origin of his or
another person’s goods, services, or commercial activities, shall be liable
in a civil action by any person who believes that he or she is likely to be
damaged by such act.
15 U.S.C. § 1125(a)(1)(B). We have interpreted this section of the Lanham Act as providing “protection against a ‘myriad of deceptive commercial practices,’ including false
advertising or promotion.”
A prima facie case of false advertising under section 43(a) requires the plaintiff to
establish:
(1) A false or misleading statement of fact about a product;
(2) Such statement either deceived, or had the capacity to deceive a
substantial segment of potential consumers;
(3) The deception is material, in that it is likely to influence the consumer’s purchasing decision;
(4) The product is in interstate commerce; and
(5) The plaintiff has been or is likely to be injured as a result of the
statement at issue.
The failure to prove the existence of any element of the prima facie case is fatal to the
plaintiff’s claim.

False Advertising: False or Misleading Statements of Fact

219

B
The law governing false advertising claims under section 43(a) of the Lanham Act is
well settled. In order to obtain monetary damages or equitable relief in the form of an injunction, “a plaintiff must demonstrate that the commercial advertisement or promotion is
either literally false, or that [if the advertisement is not literally false,] it is likely to mislead
and confuse consumers.” If the statement is shown to be misleading, the plaintiff must also
introduce evidence of the statement’s impact on consumers, referred to as materiality.
(1)
(a)
Essential to any claim under section 43(a) of the Lanham Act is a determination of
whether the challenged statement is one of fact—actionable under section 43(a)—or one
of general opinion—not actionable under section 43(a). Bald assertions of superiority or
general statements of opinion cannot form the basis of Lanham Act liability. Rather the
statements at issue must be a “specific and measurable claim, capable of being proved
false or of being reasonably interpreted as a statement of objective fact.” As noted by our
court in Presidio: “[A] statement of fact is one that (1) admits of being adjudged true or
false in a way that (2) admits of empirical verification.”
(b)
One form of non-actionable statements of general opinion under section 43(a) of
the Lanham Act has been referred to as “puffery.” Puffery has been discussed at some
length by other circuits. The Third Circuit has described “puffing” as “advertising that is
not deceptive for no one would rely on its exaggerated claims.” Similarly, the Ninth
Circuit has defined “puffing” as “exaggerated advertising, blustering and boasting upon
which no reasonable buyer would rely and is not actionable under 43(a).”
These definitions of puffery are consistent with the definitions provided by the
leading commentaries in trademark law. A leading authority on unfair competition has
defined “puffery” as an “exaggerated advertising, blustering, and boasting upon which
no reasonable buyer would rely,” or “a general claim of superiority over a comparative
product that is so vague, it would be understood as a mere expression of opinion.”
McCarthy on Trademark and Unfair Competition. Similarly, Prosser and Keeton on Torts
defines “puffing” as “a seller’s privilege to lie his head off, so long as he says nothing
specific, on the theory that no reasonable man would believe him, or that no reasonable
man would be influenced by such talk.”
Drawing guidance from the writings of our sister circuits and the leading
commentators, we think that non-actionable “puffery” comes in at least two possible forms:
(1) an exaggerated, blustering, and boasting statement upon which no reasonable buyer
would be justified in relying; or (2) a general claim of superiority over comparable products
that is so vague that it can be understood as nothing more than a mere expression of opinion.
(2)
(a)
With respect to materiality, when the statements of fact at issue are shown to be
literally false, the plaintiff need not introduce evidence on the issue of the impact the
statements had on consumers. In such a circumstance, the court will assume that the
statements actually misled consumers. On the other hand, if the statements at issue are
either ambiguous or true but misleading, the plaintiff must present evidence of actual
deception. The plaintiff may not rely on the judge or the jury to determine, “based solely
upon his or her own intuitive reaction, whether the advertisement is deceptive.” Instead,
proof of actual deception requires proof that “consumers were actually deceived by the

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defendant’s ambiguous or true-but-misleading statements.” [Such proof often includes
testimony from consumers, surveys, and consumer reaction tests.]. . . .
IV
We turn now to consider the case before us. Reduced to its essence, the question is
whether the evidence, viewed in the most favorable light to Pizza Hut, established that
Papa John’s slogan “Better Ingredients. Better Pizza.” is misleading and violative of
section 43(a) of the Lanham Act. In making this determination, we will first consider the
slogan “Better Ingredients. Better Pizza.” standing alone to determine if it is a statement
of fact capable of deceiving a substantial segment of the consuming public to which it
was directed. Second, we will determine whether the evidence supports the district
court’s conclusion that after May 1997, the slogan was tainted, and therefore actionable,
as a result of its use in a series of ads comparing specific ingredients used by Papa John’s
with the ingredients used by its “competitors.”
A
The jury concluded that the slogan itself was a “false or misleading” statement of
fact, and the district court enjoined its further use. Papa John’s argues, however, that this
statement “quite simply is not a statement of fact, [but] rather, a statement of belief or
opinion, and an argumentative one at that.” Papa John’s asserts that because “a statement
of fact is either true or false, it is susceptible to being proved or disproved. A statement
of opinion or belief, on the other hand, conveys the speaker’s state of mind, and even
though it may be used to attempt to persuade the listener, it is a subjective communication
that may be accepted or rejected, but not proven true or false.” Papa John’s contends that
its slogan “Better Ingredients. Better Pizza.” falls into the latter category, and because
the phrases “better ingredients” and “better pizza” are not subject to quantifiable
measures, the slogan is non-actionable puffery.
We will therefore consider whether the slogan standing alone constitutes a statement
of fact under the Lanham Act. Bisecting the slogan “Better Ingredients. Better Pizza.,” it is
clear that the assertion by Papa John’s that it makes a “Better Pizza.” is a general statement
of opinion regarding the superiority of its product over all others. This simple statement,
“Better Pizza.,” epitomizes the exaggerated advertising, blustering, and boasting by a
manufacturer upon which no consumer would reasonably rely. See, e.g., In re Boston Beer
Co. (Fed.Cir. 1999) (stating that the phrase “The Best Beer in America” was “trade puffery”
and that such a general claim of superiority “should be freely available to all competitors
in any given field to refer to their products or services”). Consequently, it appears
indisputable that Papa John’s assertion “Better Pizza.” is non-actionable puffery.8
Moving next to consider separately the phrase “Better Ingredients.,” the same
conclusion holds true. Like “Better Pizza.,” it is typical puffery. The word “better,” when
used in this context is unquantifiable. What makes one food ingredient “better” than
another comparable ingredient, without further description, is wholly a matter of
individual taste or preference not subject to scientific quantification. Indeed, it is difficult
to think of any product, or any component of any product, to which the term “better,”
without more, is quantifiable. As our court stated in Presidio:
The law recognizes that a vendor is allowed some latitude in claiming
8
It should be noted that Pizza Hut uses the slogan “The Best Pizza Under One Roof.” Similarly, other nationwide
pizza chains employ slogans touting their pizza as the “best”: (1) Domino’s Pizza uses the slogan “Nobody
Delivers Better.”; (2) Danato’s uses the slogan “Best Pizza on the Block.”; (3) Mr. Gatti’s uses the slogan “Best
Pizza in Town: Honest!”; and (4) Pizza Inn uses the slogans “Best Pizza Ever.” and “The Best Tasting Pizza.”

False Advertising: False or Misleading Statements of Fact

221

merits of his wares by way of an opinion rather than an absolute
guarantee, so long as he hews to the line of rectitude in matters of fact.
Opinions are not only the lifestyle of democracy, they are the brag in
advertising that has made for the wide dissemination of products that
otherwise would never have reached the households of our citizens. If we
were to accept the thesis set forth by the appellees, [that all statements by
advertisers were statements of fact actionable under the Lanham Act,] the
advertising industry would have to be liquidated in short order.
Thus, it is equally clear that Papa John’s assertion that it uses “Better Ingredients.” is one
of opinion not actionable under the Lanham Act.
Finally, turning to the combination of the two non-actionable phrases as the slogan
“Better Ingredients. Better Pizza.,” we fail to see how the mere joining of these two
statements of opinion could create an actionable statement of fact. Each half of the slogan
amounts to little more than an exaggerated opinion of superiority that no consumer would
be justified in relying upon. It has not been explained convincingly to us how the
combination of the two phrases, without more, changes the essential nature of each phrase
so as to make it actionable. We assume that “Better Ingredients.” modifies “Better Pizza.”
and consequently gives some expanded meaning to the phrase “Better Pizza,” i.e., our
pizza is better because our ingredients are better. Nevertheless, the phrase fails to give
“Better Pizza.” any more quantifiable meaning. Stated differently, the adjective that
continues to describe “pizza” is “better,” a term that remains unquantifiable, especially
when applied to the sense of taste. Consequently, the slogan as a whole is a statement of
non-actionable opinion. Thus, there is no legally sufficient basis to support the jury’s
finding that the slogan standing alone is a “false or misleading” statement of fact.
B
We next will consider whether the use of the slogan “Better Ingredients. Better
Pizza.” in connection with a series of comparative ads found by the jury to be misleading—
specifically, ads comparing Papa John’s sauce and dough with the sauce and dough of its
competitors—“tainted” the statement of opinion and made it misleading under section
43(a) of the Lanham Act. Before reaching the ultimate question of whether the slogan is
actionable under the Lanham Act, we will first examine the sufficiency of the evidence
supporting the jury’s conclusion that the comparison ads were misleading. . . .
(2)
We are obligated to accept the findings of the jury unless the facts point so
overwhelmingly in favor of one party that no reasonable person could arrive at a different
conclusion. In examining the record evidence, we must view it the way that is most
favorable to upholding the verdict. Viewed in this light, it is clear that there is sufficient
evidence to support the jury’s conclusion that the sauce and dough ads were misleading
statements of fact actionable under the Lanham Act.
Turning first to the sauce ads, the evidence establishes that despite the differences in
the methods used to produce their competing sauces: (1) the primary ingredient in both
Pizza Hut and Papa John’s sauce is vine-ripened tomatoes; (2) at the point that the
competing sauces are placed on the pizza, just prior to putting the pies into the oven for
cooking, the consistency and water content of the sauces are essentially identical; and (3)
as noted by the district court, at no time “prior to the close of the liability phase of trial was
any credible evidence presented [by Papa John’s] to demonstrate the existence of
demonstrable differences” in the competing sauces. Consequently, the district court was
correct in concluding that: “Without any scientific support or properly conducted taste

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preference test, by the written and/or oral negative connotations conveyed that pizza made
from tomato paste concentrate is inferior to the ‘fresh pack’ method used by Papa John’s,
its sauce advertisements conveyed an impression which is misleading. . . .” Turning our
focus to the dough ads, while the evidence clearly established that Papa John’s and Pizza
Hut employ different methods in making their pizza dough, again, the evidence established
that there is no quantifiable difference between pizza dough produced through the “cold or
slow-fermentation method” (used by Papa John’s), or the “frozen dough method” (used by
Pizza Hut). Further, although there is some evidence indicating that the texture of the dough
used by Papa John’s and Pizza Hut is slightly different, this difference is not related to the
manufacturing process used to produce the dough. Instead, it is due to a difference in the
wheat used to make the dough. Finally, with respect to the differences in the pizza dough
resulting from the use of filtered water as opposed to tap water, the evidence was sufficient
for the jury to conclude that there is no quantifiable difference between dough produced
with tap water, as opposed to dough produced with filtered water.
We should note again that Pizza Hut does not contest the truthfulness of the
underlying factual assertions made by Papa John’s in the course of the sauce and dough
ads. Pizza Hut concedes that it uses “remanufactured” tomato sauce to make its pizza
sauce, while Papa John’s uses “fresh-pack.” Further, in regard to the dough, Pizza Hut
concedes the truth of the assertion that it uses tap water in making its pizza dough, which
is often frozen, while Papa John’s uses filtered water to make its dough, which is fresh—
never frozen. Consequently, because Pizza Hut does not contest the factual basis of Papa
John’s factual assertions, such assertions cannot be found to be factually false, but only
impliedly false or misleading.
Thus, we conclude by saying that although the ads were true about the ingredients
Papa John’s used, it is clear that there was sufficient evidence in the record to support the
jury’s conclusion that Papa John’s sauce and dough ads were misleading—but not false—
in their suggestion that Papa John’s ingredients were superior.
(3)
Thus, having concluded that the record supports a finding that the sauce and dough
ads are misleading statements of fact, we must now determine whether the district court
was correct in concluding that the use of the slogan “Better Ingredients. Better Pizza.” in
conjunction with these misleading ads gave quantifiable meaning to the slogan making
a general statement of opinion misleading within the meaning of the Lanham Act.
In support of the district court’s conclusion that the slogan was transformed, Pizza
Hut argues that “in construing any advertising statement, the statement must be
considered in the overall context in which it appears.” Building on the foundation of this
basic legal principle, Pizza Hut argues that “[t]he context in which Papa John’s slogan
must be viewed is the 2½ year campaign during which its advertising served as ‘chapters’
to demonstrate the truth of the ‘Better Ingredients. Better Pizza.’ book.” Pizza Hut argues,
that because Papa John’s gave consumers specific facts supporting its assertion that its
sauce and dough are “better”—specific facts that the evidence, when viewed in the light
most favorable to the verdict, are irrelevant in making a better pizza—Papa John’s
statement of opinion that it made a “Better Pizza” became misleading. In essence, Pizza
Hut argues, that by using the slogan “Better Ingredients. Better Pizza.” in combination
with the ads comparing Papa John’s sauce and dough with the sauce and dough of its
competitions, Papa John’s gave quantifiable meaning to the word “Better” rendering it
actionable under section 43(a) of the Lanham Act.
We agree that the message communicated by the slogan “Better Ingredients. Better
Pizza.” is expanded and given additional meaning when it is used as the tag line in the

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223

misleading sauce and dough ads. The slogan, when used in combination with the
comparison ads, gives consumers two fact-specific reasons why Papa John’s ingredients
are “better.” Consequently, a reasonable consumer would understand the slogan, when
considered in the context of the comparison ads, as conveying the following message:
Papa John’s uses “better ingredients,” which produces a “better pizza” because Papa
John’s uses “fresh-pack” tomatoes, fresh dough, and filtered water. In short, Papa John’s
has given definition to the word “better.” Thus, when the slogan is used in this context,
it is no longer mere opinion, but rather takes on the characteristics of a statement of fact.
When used in the context of the sauce and dough ads, the slogan is misleading for the
same reasons we have earlier discussed in connection with the sauce and dough ads.
(4)
Concluding that when the slogan was used as the tag line in the sauce and dough
ads it became misleading, we must now determine whether reasonable consumers would
have a tendency to rely on this misleading statement of fact in making their purchasing
decisions. We conclude that Pizza Hut has failed to adduce evidence establishing that the
misleading statement of fact conveyed by the ads and the slogan was material to the
consumers to which the slogan was directed. Consequently, because such evidence of
materiality is necessary to establish liability under the Lanham Act, the district court
erred in denying Papa John’s motion for judgment as a matter of law.
As previously discussed, none of the underlying facts supporting Papa John’s
claims of ingredient superiority made in connection with the slogan were literally false.
Consequently, in order to satisfy its prima facie case, Pizza Hut was required to submit
evidence establishing that the impliedly false or misleading statements were material to,
that is, they had a tendency to influence the purchasing decisions of, the consumers to
which they were directed.12 We conclude that the evidence proffered by Pizza Hut fails
to make an adequate showing.
In its appellate brief and during the course of oral argument, Pizza Hut directs our
attention to three items of evidence in the record that it asserts establishes materiality to
consumers. First, Pizza Hut points to the results of a survey conducted by an
“independent expert” (Dr. Dupont) regarding the use of the slogan “Better Ingredients.
Better Pizza.” as written on Papa John’s pizza box (the box survey). The results of the
box survey, however, were excluded by the district court.14 Consequently, these survey
results provide no basis for the jury’s finding.
Second, Pizza Hut points to two additional surveys conducted by Dr. Dupont that
attempted to measure consumer perception of Papa John’s “taste test” ads. This survey
evidence, however, fails to address Pizza Hut’s claim of materiality with respect to the
slogan. Moreover, the jury rejected Pizza Hut’s claims of deception with regard to Papa
John’s “taste test” ads—the very ads at issue in these surveys.
Finally, Pizza Hut attempts to rely on Papa John’s own tracking studies and on the
alleged subjective intent of Papa John’s executives “to create a perception that Papa John’s
in fact uses better ingredients” to demonstrate materiality. Although Papa John’s 1998
Awareness, Usage & Attitude Tracking Study showed that 48% of the respondents believe
that “Papa John’s has better ingredients than other national pizza chains,” the study failed
12
Since Pizza Hut sought only equitable relief and no monetary damages, it was required to offer evidence
sufficient to establish that the claims made by Papa John’s had the “tendency to deceive consumers,” rather
than evidence indicating that the claims made by Papa John’s actually deceived consumers.
14

Pizza Hut has not sought review on appeal of the district court’s ruling that the results of the box survey
were inadmissible.

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to indicate whether the conclusions resulted from the advertisements at issue, or from
personal eating experiences, or from a combination of both. Consequently, the results of
this study are not reliable or probative to test whether the slogan was material. Further,
Pizza Hut provides no precedent, and we are aware of none, that stands for the proposition
that the subjective intent of the defendant’s corporate executives to convey a particular
message is evidence of the fact that consumers in fact relied on the message to make their
purchases. Thus, this evidence does not address the ultimate issue of materiality.
In short, Pizza Hut has failed to offer probative evidence on whether the misleading
facts conveyed by Papa John’s through its slogan were material to consumers: that is to
say, there is no evidence demonstrating that the slogan had the tendency to deceive
consumers so as to affect their purchasing decisions. Thus, the district court erred in
denying Papa John’s motion for judgment as a matter of law.
V
In sum, we hold that the slogan “Better Ingredients. Better Pizza.” standing alone
is not an objectifiable statement of fact upon which consumers would be justified in
relying. Thus, it does not constitute a false or misleading statement of fact actionable
under section 43(a) of the Lanham Act.
Additionally, while the slogan, when appearing in the context of some of the postMay 1997 comparative advertising—specifically, the sauce and dough campaigns—was
given objectifiable meaning and thus became misleading and actionable, Pizza Hut has
failed to adduce sufficient evidence establishing that the misleading facts conveyed by
the slogan were material to the consumers to which it was directed. Thus, Pizza Hut failed
to produce evidence of a Lanham Act violation, and the district court erred in denying
Papa John’s motion for judgment as a matter of law.
Therefore, the judgment of the district court denying Papa John’s motion for
judgment as a matter of law is REVERSED; the final judgment of the district court is
VACATED; and the case is REMANDED for entry of judgment for Papa John’s.
Questions:
1.) A timely question: What is a fact? Also, what is puffery and why is it non-actionable?
2.) On what elements of the false advertising claim does Pizza Hut prevail? On what does
Papa John’s prevail? Were you surprised by the outcome of the case? If you were Pizza
Hut’s lawyer, with the benefit of hindsight, what would you do differently?
3.) Why is the evidentiary standard different for statements that are literally false and
those that are ambiguous or true, but misleading?

2.) Dilution
Section 1125(c) of the Lanham Act gives a special right to “famous” marks, one
that reaches considerably further than conventional trademark infringement.
1125(c) Dilution by blurring; dilution by tarnishment
(1) Injunctive relief
Subject to the principles of equity, the owner of a famous mark that
is distinctive, inherently or through acquired distinctiveness, shall

Dilution

be entitled to an injunction against another person who, at any time
after the owner’s mark has become famous, commences use of a
mark or trade name in commerce that is likely to cause dilution by
blurring or dilution by tarnishment of the famous mark, regardless
of the presence or absence of actual or likely confusion, of
competition, or of actual economic injury.
(2) Definitions
(A) For purposes of paragraph (1), a mark is famous if it is widely
recognized by the general consuming public of the United States
as a designation of source of the goods or services of the mark’s
owner. In determining whether a mark possesses the requisite
degree of recognition, the court may consider all relevant factors,
including the following:
(i) The duration, extent, and geographic reach of advertising
and publicity of the mark, whether advertised or publicized by
the owner or third parties.
(ii) The amount, volume, and geographic extent of sales of
goods or services offered under the mark.
(iii) The extent of actual recognition of the mark.
(iv) Whether the mark was registered under the Act of March 3,
1881, or the Act of February 20, 1905, or on the principal register.
(B) For purposes of paragraph (1), “dilution by blurring” is
association arising from the similarity between a mark or trade
name and a famous mark that impairs the distinctiveness of the
famous mark. In determining whether a mark or trade name is
likely to cause dilution by blurring, the court may consider all
relevant factors, including the following:
(i) The degree of similarity between the mark or trade name
and the famous mark.
(ii) The degree of inherent or acquired distinctiveness of the
famous mark.
(iii) The extent to which the owner of the famous mark is
engaging in substantially exclusive use of the mark.
(iv) The degree of recognition of the famous mark.
(v) Whether the user of the mark or trade name intended to
create an association with the famous mark.
(vi) Any actual association between the mark or trade name
and the famous mark.
(C) For purposes of paragraph (1), “dilution by tarnishment” is association arising from the similarity between a mark or trade name
and a famous mark that harms the reputation of the famous mark.
(3) Exclusions
The following shall not be actionable as dilution by blurring or
dilution by tarnishment under this subsection:
(A) Any fair use, including a nominative or descriptive fair use,
or facilitation of such fair use, of a famous mark by another person
other than as a designation of source for the person’s own goods
or services, including use in connection with—
(i) advertising or promotion that permits consumers to

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compare goods or services; or
(ii) identifying and parodying, criticizing, or commenting upon
the famous mark owner or the goods or services of the famous
mark owner.
(B) All forms of news reporting and news commentary.
(C) Any noncommercial use of a mark. . . .
Note that, once a mark has shown itself to be famous, it does not have to clear many
of the hurdles that the owner of a conventional mark does in a classic § 1114 infringement
suit. Dilution by blurring or tarnishment can be found “regardless of the presence or
absence of actual or likely confusion, of competition, or of actual economic injury.” This
language was inserted by the Trademark Dilution Revision Act (TDRA) of 2006 to undo
the Supreme Court’s decision in Moseley, DBA Victor’s Little Secret v. V Secret Catalogue,
Inc. (2003), which had required more proof on harm for a dilution claim. Why would
Congress want to do this?
But while the TDRA lowered the standards required to prove blurring or tarnishment,
it raised the standards required to prove that the mark was “famous.” The result was to leave
an extremely strong right, with a low standard to prove injury, but to confine the possession
of that right to a few megabrands. Is there a good normative or economic reason to choose
that legal design? A political science explanation based on lobbying power? Both?

a.) The Requirement that the Mark be Famous

Coach Services, Inc. v. Triumph Learning LLC

668 F.3d 1356 (Fed. Cir. 2012)

O’MALLEY, Circuit Judge.
Coach Services, Inc. (“CSI”) appeals from the final decision of the Trademark Trial
and Appeal Board (“the Board”) dismissing its opposition to Triumph Learning, LLC’s
(“Triumph”) use-based applications to register the mark
COACH for educational materials used to prepare students
for standardized tests. The Board found that: (1) there was
no likelihood of confusion between the parties’ COACH
marks; (2) CSI failed to prove likelihood of dilution. . . .
The Board found that CSI could not succeed on its
dilution claims because it failed to show that its COACH
mark was famous for dilution purposes. For the reasons
explained below, we agree. Because we find that CSI failed to prove fame for dilution,
we need not address the other statutory factors courts can consider to determine whether
a mark is likely to cause dilution by blurring.
1. Fame for Dilution
A threshold question in a federal dilution claim is whether the mark at issue is
“famous.” Under the TDRA, a mark is famous if it “is widely recognized by the general
consuming public of the United States as a designation of source of the goods or services
of the mark’s owner.” 15 U.S.C. § 1125(c)(2)(A). By using the “general consuming
public” as the benchmark, the TDRA eliminated the possibility of “niche fame,” which

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some courts had recognized under the previous version of the statute. The TDRA lists four
non-exclusive factors for courts to consider when determining whether a mark is famous:
(i) The duration, extent, and geographic reach of advertising and
publicity of the mark, whether advertised or publicized by the owner or
third parties.
(ii) The amount, volume, and geographic extent of sales of goods or
services offered under the mark.
(iii) The extent of actual recognition of the mark.
(iv) Whether the mark was registered under the Act of March 3, 1881,
or the Act of February 20, 1905, or on the principal register.
15 U.S.C. § 1125(c)(2)(A). Whether a mark is famous under the TDRA is a factual
question reviewed for substantial evidence.
Fame for likelihood of confusion and fame for dilution are distinct concepts, and
dilution fame requires a more stringent showing. While fame for dilution “is an either/or
proposition”—it either exists or does not—fame for likelihood of confusion is a matter
of degree along a continuum. Palm Bay. Accordingly, a mark can acquire “sufficient
public recognition and renown to be famous for purposes of likelihood of confusion
without meeting the more stringent requirement for dilution fame.” 7-Eleven.
It is well-established that dilution fame is difficult to prove. Everest Capital, Ltd. v.
Everest Funds Mgmt. LLC (8th Cir. 2005) (“The judicial consensus is that ‘famous’ is a
rigorous standard.”); see also 4 McCarthy, § 24:104 at 24–286, 24–293 (noting that fame
for dilution is “a difficult and demanding requirement” and that, although “all
‘trademarks’ are ‘distinctive’—very few are ‘famous’”). This is particularly true where,
as here, the mark is a common English word that has different meanings in different
contexts. Importantly, the owner of the allegedly famous mark must show that its mark
became famous “prior to the filing date of the trademark application or registration against
which it intends to file an opposition or cancellation proceeding.” Toro.
As noted, fame for dilution requires widespread recognition by the general public.
15 U.S.C. § 1125(c)(2)(A). To establish the requisite level of fame, the “mark’s owner
must demonstrate that the common or proper noun uses of the term and third-party uses
of the mark are now eclipsed by the owner’s use of the mark.” Toro. An opposer must
show that, when the general public encounters the mark “in almost any context, it
associates the term, at least initially, with the mark’s owner.” In other words, a famous
mark is one that has become a “household name.” With this framework in mind, we turn
to CSI’s evidence of fame.
2. CSI Failed to Introduce Sufficient Evidence of Fame for Dilution
The Board found that CSI’s evidence of fame was insufficient to support a dilution
claim. On appeal, CSI argues that the same evidence establishing fame for likelihood of
confusion also establishes fame for dilution purposes. Specifically, CSI argues that the
Board disregarded: (1) sales and advertising figures for years 2000–2008; (2) its sixteen
federal trademark registrations; (3) unsolicited media attention; (4) joint marketing efforts;
(5) two Second Circuit decisions finding the Coach hangtag, which features the COACH
mark, to be famous; and (6) CSI’s internal brand awareness survey showing awareness
among 18–24 year old consumers. We address each category of evidence in turn. For the
reasons set forth below, we find substantial evidence supporting the Board’s decision that
CSI failed to show the requisite level of fame for dilution.
Turning first to CSI’s evidence of sales and advertising expenditures, CSI argues that
the Board erred when it ignored the annual reports that were attached to a Notice of Reliance.

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As previously discussed, however, the Board correctly held that these reports were
unauthenticated and thus inadmissible. The only sales and advertising figures in the record
via Ms. Sadler’s testimony were for one year—2008—which, notably, is after Triumph filed
its use-based applications in December 2004. We agree with the Board that this limited
evidence of sales and advertising is insufficient to show fame. Even if the Board had considered the annual reports, moreover, such evidence, standing alone, would be insufficient.
See Toro (“Merely providing evidence that a mark is a top-selling brand is insufficient to
show this general fame without evidence of how many persons are purchasers.”).
With respect to CSI’s registrations, the Board found that the mere existence of
federally registered trademarks is insufficient to show that the mark is famous for
purposes of dilution because ownership of a registration is not proof of fame. On appeal,
CSI argues that the Board erred in this determination because one of the statutory factors
a court can consider in the fame analysis is whether the mark is registered on the principal
register. See 15 U.S.C. § 1125(c)(2)(A)(iv). As Triumph points out, however, “[o]ne
cannot logically infer fame from the fact that a mark is one of the millions on the Federal
Register.” 4 McCarthy, § 24:106 at 24–310. While ownership of a trademark registration
is relevant to the fame inquiry, and—to the extent the Board decision implies otherwise—
the Board erred on this point, proof of registration is not conclusive evidence of fame.
With respect to media attention, the Board found that CSI’s evidence fell short of
showing “widespread recognition of opposer’s mark [by] the general population.”
Specifically, the Board found that: “the vast majority of unsolicited media recognition for
opposer’s COACH mark comprises a reference to one of opposer’s products as one of many
different fashion buys or trends, and the news articles noting opposer’s renown are too few
to support a finding that opposer’s mark has been transformed into a household name.” On
appeal, CSI argues that the Board ignored hundreds of unsolicited articles mentioning the
COACH mark over the years. CSI points to several examples, including the following:
• “In fact, Coach’s growth . . . has been phenomenal. When Sara Lee acquired
the firm in 1985, its volume was about $18 million. In Sara Lee’s latest fiscal
year, which ended last June 30, Coach’s sales exceeded $500 million. The
name also resonates with consumers. The brand ranked eighth among the top
10 in accessories firms in the latest Fairchild 100 consumer survey of fashion
labels, in 1995.” (Women’s Wear Daily, May 5, 1997).
• “Coach, one of the top makers of status handbags in the United States. . . .”
(The New York Times, Jan. 27, 1999).
• “Coach’s creative director has helped transform the 60-year old company into
a must-have American icon.” (Women’s Wear Daily, June 2001).
• “Will Coach Become Too Popular? . . . Coach, the maker and retailer of stylish
handbags, just had a blowout season. . . . Clearly Coach has recorded some of
the best growth numbers of any retailer or accessories maker in recent years.”
(Business Week, Jan. 24, 2007).
Looking at the media attention in the record, there is certainly evidence that CSI’s
COACH mark has achieved a substantial degree of recognition. That said, many of the
articles submitted are dated after Triumph filed its registration applications and thus do not
show that CSI’s mark was famous prior to the filing date. See Toro (“an owner of an
allegedly famous mark must establish that its mark had become famous prior to the filing
date of the trademark application” which it opposes). And, there is substantial evidence
supporting the Board’s determination that many of the references are limited to mentioning
one of CSI’s COACH products among other brands. Accordingly, even though there is

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some evidence of media attention, substantial evidence supports the Board’s conclusion
that the media evidence submitted fails to show widespread recognition.
With respect to joint marketing efforts, CSI argued that other popular brands,
including LEXUS and CANON, have used the COACH mark in connection with their
products. The Board found that CSI “failed to provide any testimony regarding the success
of the joint marketing efforts and the effect of those efforts in promoting opposer’s mark.”
Board Decision, 96 U.S.P.Q.2d at 1611, n.37. We agree. Without evidence as to the
success of these efforts or the terms of any contracts involved, they have little value here.
Next, the Board found that CSI’s 2008 brand awareness study was “of dubious
probative value” because it did not offer a witness with first-hand knowledge of the study
to explain how it was conducted. The Board further noted that, although the study showed
a high level of brand awareness among women ages 13–24, it provided no evidence of
brand awareness among women generally, or among men. See Top Tobacco (noting that
the TDRA eliminated the possibility of “niche fame” as a basis for finding a mark
famous). And, the survey was conducted in 2007, several years after Triumph filed its
applications. Given these circumstances, we find no error in the Board’s decision to give
this survey limited weight.
CSI also argues that the Board failed to adequately consider two Second Circuit
decisions finding that the hangtag attached to its various handbags, which features the
COACH mark, is distinctive. See Coach Leatherware Co., Inc. v. AnnTaylor, Inc. (2d Cir.
1991) (finding that Coach’s lozenge-shaped leather tags embossed with the name “Coach
Leatherware,” which are attached to Coach’s handbags by beaded brass chains, “have
become distinctive and valuable through Coach’s promotional efforts and by virtue of its
upscale reputation”); see also Coach, Inc. v. We Care Trading Co., Inc. (2d Cir. 2002)
(affirming the jury’s dilution verdict on grounds that “the jury’s determination that the
hang tag was famous and distinctive was not unreasonable” and “the substantial similarity
of the two marks here coupled with the use of Coach’s very distinctive hang tag shape
amply justified the jury’s verdict”). Although the Board did not specifically address these
cases, we agree with Triumph that they are unrelated and irrelevant, particularly because:
(1) the 1991 case did not involve a dilution claim; and (2) both cases focus on the hangtag
feature on CSI’s handbags, not on the alleged fame of the COACH mark generally.
Based on the foregoing, we agree with the Board that CSI failed to provide sufficient
evidence of fame for dilution purposes. Absent a showing of fame, CSI’s dilution claim
fails, and we need not address the remaining statutory factors for dilution by blurring.
Before moving on, we pause to emphasize the fact-specific nature of our holding
today. While the burden to show fame in the dilution context is high—and higher than
that for likelihood of confusion purposes—it is not insurmountable. We do not hold that
CSI could never establish the requisite level of fame for dilution purposes. We hold only
that, on the record presented to it, the Board had substantial support for its conclusion
that CSI’s evidentiary showing was just too weak to do so here.
Questions:
1.) Why protect famous marks from dilution or tarnishment in the first place? Why
should we not have Rolex beer or Prada hemorrhoid cream, so long as no consumer
thinks that this is the “long awaited entry” (to quote Lois) of those companies into this
new market? (A potential confusion against which § 1114 and § 1125(a) already guard.)
Does this represent an expansion of trademark’s ambit? On what theory?
2.) Why does the court set such a seemingly high bar in this case for proof that a mark

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is famous? Does the particular controversy in this case—a luggage maker trying to stop
a company using “Coach” for educational products—explain the heightened proof the
court requires? Look at the passage where the court says “This is particularly true where,
as here, the mark is a common English word that has different meanings in different
contexts.” Does this mean there is no general standard for “fame” but rather one that is
relative? Or is the court simply delineating the amount of fame needed in such a situation,
so that the average person hearing “Coach” would think “handbag” rather than “K” or
“basketball” or any other relevant connotation?
3.) What other marks should count as famous? How about Viagra, Visa, “Just Do It,”
Newport cigarettes or the University of Texas’s longhorn logo? [Of this group, the
longhorn was the only one found not to be famous. Do you agree?]

b.) The Requirement of “Commercial Speech”; Dilution by Tarnishment

Smith v. Wal-Mart Stores, Inc.

537 F. Supp. 2d 1302 (N.D. Ga. 2008)

TIMOTHY C. BATTEN, Sr., District Judge.
This action arises from the contention of Defendant Wal-Mart Stores, Inc. that its
registered trademarks “WALMART”; “WAL-MART”; and “WAL★MART”; its registered
word mark “ALWAYS LOW PRICES. ALWAYS”; and its “well-known smiley face mark”
were infringed by Plaintiff Charles Smith’s anti-Wal-Mart merchandise. Smith petitions
the Court to declare his activities legal so that he may resume them without fear of incurring
liability for damages; Wal-Mart counterclaims for an award of ownership of Smith’s WalMart-related domain names, an injunction precluding Smith from making commercial use
of any designation beginning with the prefix “WAL,” and an award of nominal
damages. . . .
I. Background
Wal-Mart Stores, Inc., which had approximately $283 billion in gross domestic
revenue in fiscal year 2008, sells retail goods and services through a large chain of nearly
6500 physical stores and its Internet site, www.wal-mart.com. The company also owns
and operates additional domain names, including www.walmartstores.com and
www.walmartfacts.com, that link to the www.wal-mart.com website.
The company owns and has continuously used the well-known WAL-MART
trademark and service mark in the United States for retail department store services since
1962 and has longstanding registered trademark rights in the marks. WAL-MART and
WALMART are used alone or in conjunction with Wal-Mart’s blue five-pointed star.
Wal-Mart also owns a trademark registration in the word mark “ALWAYS LOW
PRICES. ALWAYS.” . . .
Smith is an avid and vocal critic of Wal-Mart. He believes that Wal-Mart has a
destructive effect on communities, treats workers badly, and has a damaging influence on
the United States as a whole—an influence so detrimental to the United States and its
communities that Smith likens it to that of the Nazi regime. With the goals of stimulating

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discussions about Wal-Mart and getting others of like mind to join him in expressing
strongly negative views about Wal-Mart, Smith created various designs and slogans that
incorporated the word “Walocaust,” a word Smith invented by combining the first three
letters of Wal-Mart’s name with the last six letters of the word “holocaust.”
Smith created four basic Walocaust designs. One
design depicted a blue stylized bird modeled to resemble a
Nazi eagle grasping a yellow smiley face in the same
manner that a Nazi eagle is typically depicted grasping a
swastika. Above the bird image, the word “WAL★
OCAUST” was printed in a blue font comparable to that
commonly used by Wal-Mart. Two designs were text only: one design read, “I © WAL
★OCAUST They have FAMILY VALUES and their ALCOHOL, TOBACCO and
FIREARMS are 20% OFF”; and another design read, “WAL★OCAUST Come for the
LOW prices[,] stay for the KNIFE fights.” The fourth was a graphical design that
depicted the word WAL★OCAUST on a Wal-Mart-like storefront that also included the
Nazi eagle image, a poster advertising family values and discounted alcohol, tobacco and
firearms, and other images commenting negatively on Wal-Mart.
Smith does not claim any exclusive right to his Wal-Mart-related creations; in fact,
he says that he would like to see the general public use the terms freely. He hoped that
the word “Walocaust” would become such a commonly used term to describe Wal-Mart
that it might eventually appear in the dictionary.
In late July 2005, to help draw attention to his Walocaust concept and his views about
Wal-Mart in general, Smith arranged for some of his designs to be printed on t-shirts and
other items like mugs, underwear, camisoles, teddy bears, bumper stickers and bibs that
could be purchased through www.CafePress.com. He also placed text on his CafePress
account home page that included harsh statements about Wal-Mart, such as “Walocaust:
The World is Our Labor Camp. Walmart Sucks” and “Say hello to the Walocaust, say hello
to low prices, say hello to child labor, say hello to unpaid overtime, say hello to 60 hour
work weeks, say hello to low pay, say hello to poverty[.] Say hello to the Walocaust, say
goodbye to health insurance, say goodbye to weekends, say goodbye to vacation, say
goodbye to retirement, say goodbye to living indoors[.] The Walocaust: coming soon to
your occupation. A real web site is coming soon. Contact: Walocaust@yahoo.com[.]”
Although CafePress offered the option to open a “basic shop” at no charge, which
would have allowed Smith to sell his items at cost, Smith instead chose to pay $6.95 per
month for a “premium account,” which offered several automated functions that allowed
him to set up a website without knowing HTML code. This enabled Smith to display on
his CafePress website his products, his other designs, and content more fully expressing
his views about Wal-Mart. It also enabled him to have his www.walocaust.com domain
name bring viewers to the home page of his CafePress account. In hopes that profit from
his CafePress site would cover the costs of his premium fees and domain name, Smith
retained CafePress’s default “medium” mark-up setting, which set his items’ sale price
at approximately thirty percent above cost.
On December 28, 2005, and again on February 1, 2006, Wal-Mart wrote to Smith
and to CafePress, asserting that Smith’s Walocaust CafePress webpage was violating
Wal-Mart’s trademark rights, and demanding that they cease selling all products
imprinted with his various anti-Wal-Mart designs. Wal-Mart also objected to Smith’s
registration and use of the domain name www.walocaust.com, demanding that Smith
cease using the domain name and transfer ownership of it to Wal-Mart.

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In response, CafePress removed all of Smith’s Wal-Mart-related merchandise from
his online store so that only non-Wal-Mart-related merchandise remained available at
www.cafepress.com/walocaust.
On March 6, 2006, Smith filed this action, seeking a declaratory judgment of his
right to sell his Walocaust merchandise and demanding costs and attorneys’ fees.
After learning that some courts of appeals had approved disclaimers as a technique
for minimizing possible trademark confusion, Smith added one to the top of his Walocaust
webpage, stating that the site is unaffiliated with Wal-Mart and containing, the URL for
Wal-Mart’s official website to help redirect any visitors who may have intended to visit
www.wal-mart.com but instead accessed the Walocaust site by mistake. He also updated
the site to denounce Wal-Mart’s role in forcing this litigation and filing counterclaims, and
he posted a link to an entity called “Public Citizen” through which visitors have donated
$1040.01 in support of his legal activities.
On or about March 8, 2006, after filing his declaratory judgment complaint, Smith also
registered the domain names www.wal-qaeda.com and www.walqaeda.com. “Wal-Qaeda”
was another portmanteau word Smith coined, this time combining the name “Wal-Mart” with
“Al-Qaeda.” Smith intended the word “Wal-Qaeda” as a comment on what he considered to
be Wal-Mart’s terrorist-like attack on his free speech through threats of litigation.
On a new site that was accessible via both www.wal-qaeda.com and www.
walqaeda.com, Smith displayed various graphics incorporating his new word. He also
posted other anti-Wal-Mart slogans such as “FREEDOM-HATER-MART STOP Stomping
on our free speech!” and “Freedom-Haters ALWAYS,” intended to call to mind Wal-Mart’s
trademark “ALWAYS LOW PRICES. ALWAYS.”
Once he became certain that CafePress was open to carrying his new Wal-Qaeda
concepts, he created a new Wal-Qaeda CafePress webpage where he again offered various
items commenting on Wal-Mart. . . . The site offered two text-only designs that depicted the
word “WAL-QAEDA” in a blue block letter font similar to Wal-Mart’s: one with the legend
“SUPPORT OUR TROOPS[.] BOYCOTT WAL-QADA” and another reading, “WALQADA[.] Freedom Haters ALWAYS.” The site also offered products imprinted with five
other graphical concepts. One of those concepts was a revision of the Walocaust storefront
design, altered to replace “WAL★OCAUST” with “WAL-QAEDA[.] THE DIME STORE
FROM HELL”; to replace the Nazi eagle with “FREEDOM HATERS ALWAYS” and “2
days without a k[n]ife fight”; and to make other small changes. Another concept depicted
an American flag in the shape of a United States map with the word “DECEASED” stamped
over it. Above the flag was printed “WAL-QAEDA[.] THE DIME STORE FROM HELL,”
and under the flag appeared the phrase “CAUSE OF DEATH: A Dime Store.” In the third
concept, the slogan “ATTENTION WAL★QAEDA[.] THESE COLORS DON’T RUN”
was imprinted over a modified American flag, and in the last two concepts, Hillary Clinton
was named the “WAL-QAEDA Employee of the Year 1986–1992,” and Chairman Mao
Zedong was awarded the “WAL-QAEDA Human Resource Achievement Award.”
Although he hoped to help finance this lawsuit with the proceeds, Smith did not
actively market his designs. He did, however, post his new Wal-Qaeda home page, his WalQaeda CafePress account and a link to the Wal-Qaeda home page from his Walocaust
website at a time when he knew that reporters were working on stories about this litigation.
As a result, news about his new Wal-Qaeda designs was reported in the press and on blogs,
and almost all of the sales of Smith’s Wal-Qaeda items occurred within a month of the first
publicity that followed upon the press and bloggers discovering those designs. The revenues
from Smith’s CafePress Walocaust and Wal-Qaeda account sales have been less than his

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costs for the domain names and CafePress account fees.
On April 28, 2006, Wal-Mart filed its answer and counterclaim, asserting various
federal trademark claims and related state law claims against Smith for both the Walocaust
and the Wal-Qaeda products. Wal-Mart contends that Smith has engaged in (1) trademark
infringement in violation of 15 U.S.C. § 1114(1) and common law; (2) unfair competition
in violation of 15 U.S.C. § 1125(a); (3) trademark dilution by tarnishment in violation of
15 U.S.C. § 1125(c); and (4) cybersquatting in violation of 15 U.S.C. § 1125(d).
II. Analysis
Wal-Mart contends that Smith is a merchant who misappropriated its trademarks
and business reputation in pursuit of illegal profit and who disingenuously seeks to cloak
those activities under the First Amendment. Smith alleges that Wal-Mart is attempting to
misuse trademark laws to censor his criticism of the company. According to Smith, at
stake in this case is a person’s right to publicly criticize the world’s largest retailer—or
any other business. . . .
C. Trademark Infringement, Unfair Competition, Cybersquatting and Deceptive
Trade Practices Claims
To prove that Smith committed trademark infringement or cybersquatting, or
subjected Wal-Mart to unfair competition or deceptive trade practices, Wal-Mart must
also show that Smith’s use of its trademarks is likely to cause an appreciable number of
potential buyers to be confused about the source, affiliation or sponsorship of Smith’s
products. See 15 U.S.C. § 1125(d)(1)(A) (subjecting to a cybersquatting claim only
domain names that are “identical or confusingly similar” to a senior mark).
In making this inquiry, courts consider a variety of factors, including the strength
of the allegedly infringed mark, whether the designs that incorporate the registered mark
are similar, whether the products sold by the parties are similar, whether the retail outlets
and purchasers are similar, whether the parties use the same advertising media, whether
the defendant intended to usurp the registered trademark, and whether any consumers
were actually confused. The Court must balance the factors according to its own
judgment based on the facts in the case before it. . . .
Because Smith’s arguments with regard to the Safeway factors depend heavily on
whether his designs are successful parodies, the Court must first consider whether the
contested designs are in fact parodies of Wal-Mart’s registered marks. See Dr. Seuss
Enters. v. Penguin Books USA, Inc. (9th Cir. 1997) (noting that the claim that a secondary
use is a parody is not a separate defense to a charge of trademark infringement but is
instead is considered within the likelihood of confusion analysis). For the purposes of
trademark analysis, “a parody is defined as a simple form of entertainment conveyed by
juxtaposing the irreverent representation of the trademark with the idealized image
created by the mark’s owner.” Louis Vuitton Malletier v. Haute Diggity Dog, LLC (4th
Cir. 2007). To be considered successful, the alleged parody must both call to mind and
differentiate itself from the original, and it must “communicate some articulable element
of satire, ridicule, joking or amusement.”
When applying these criteria to the facts of the case, it is clear that Smith’s
concepts are parodies of the registered Wal-Mart marks. Smith successfully calls WalMart to mind by using either “WAL” or “MART” as part of the concept; by mimicking
its fonts and storefront design; by mentioning Bentonville, the location of Wal-Mart’s
headquarters; or by including various other icons typically associated with Wal-Mart. As
Wal-Mart fervently contends, it is obvious that Smith’s concepts use Wal-Mart imagery

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to evoke the company in the mind of his viewers.
It is equally obvious that Smith’s concepts are not the “idealized image” of the
registered Wal-Mart marks. “Walocaust,” “Wal-Qaeda” and “Freedom-Hater-Mart” are
not “Wal-Mart.” The imagery on Smith’s t-shirts includes portraits of Mao Zedong, a
United States map with the word “DECEASED” stamped over it, and the slogan
“FREEDOM HATERS ALWAYS.”
Finally, the juxtaposition of the similar and dissimilar—the satirical representation
and the idealized image of Wal-Mart—conveys a scathing parody. In the “smiley eagle”
Walocaust concept, the reference to the Holocaust and the image of the Nazi eagle
clutching a smiley face at once portrays and contradicts the benign image that Wal-Mart
portrays to the community. In the “SUPPORT OUR TROOPS” Wal-Qaeda concept, Smith
transforms all-American “Wal-Mart” into the terrorist group “Wal-Qaeda” and satirically
urges the viewer to support Wal-Qaeda’s troops, apparently commenting both on what
Smith considers to be Wal-Mart’s ruthless business tactics and its detrimental impact on
the United States. Other concepts juxtapose Wal-Mart’s reputation for low prices with a
reference to poor store security and the company’s family values imagery with the fact
that it offers for sale inexpensive alcohol, tobacco and firearms—products known better
for destroying families.
The Court thus concludes that Smith’s concepts adequately evoke Wal-Mart while
maintaining their differentiation, and they convey Smith’s satirical commentary; thus,
they are successful parodies. See Louis Vuitton.
The finding that Smith’s concepts are parodies does not preclude the likelihood of
confusion analysis, however; it merely influences the way the likelihood of confusion
factors are applied. “[A]n effective parody will actually diminish the likelihood of
confusion, while an ineffective parody does not.” Because even a parody may constitute
trademark infringement if that parody is confusing, the Court will next consider the
likelihood of confusion factors. . . .
Evaluating the overall balance of the seven likelihood of confusion factors, the
Court finds that Wal-Mart has failed to demonstrate a likelihood that its trademarks
“WALMART,” “WAL-MART,” and “WAL★MART” and its word mark “ALWAYS
LOW PRICES. ALWAYS.” would be confused with Smith’s “WALOCAUST,” “WALQAEDA,” “FREEDOM HATER MART,” or “BENTON★VILLEBULLIES ALWAYS”
concepts. In so finding, the Court concludes that factors three (similarity of the marks),
five (similarity of sales methods) and six (similarity of advertising methods), weigh in
Smith’s favor, with particular emphasis on how different the appearance and usage of the
marks were and how vastly the parties’ advertising methods differed. The Court concludes
that factors one (actual confusion), two (strength of the mark), four (similarity of product)
and seven (Smith’s intent) favor neither party.
In sum, the Court is convinced that no fair-minded jury could find that a reasonable
consumer is likely to be confused by the challenged marks. As a result, the Court
GRANTS summary judgment to Smith on Wal-Mart’s claims of trademark infringement,
unfair business competition, cybersquatting and deceptive trade practices.
D. Trademark Dilution by Tarnishment
Wal-Mart contends that Smith’s Walocaust and Wal-Qaeda concepts, by associating
Wal-Mart with “the perpetrators of such atrocities as the Holocaust and the attacks of
September 11, 2001, unquestionably tarnish the Wal-Mart marks.” Dilution by tarnishment
recognizes an injury when a “trademark is . . . portrayed in an unwholesome or unsavory
context likely to evoke unflattering thoughts about the owner’s product.” Deere & Co. v.

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MTD Prods., Inc. (2d Cir. 1994).
“However, tarnishment caused merely by an editorial or artistic parody which
satirizes [the complainant’s] product or its image is not actionable under an anti-dilution
statute because of the free speech protections of the First Amendment.” Mattel, Inc. v.
Walking Mountain Prods. (9th Cir. 2003). “Parody is a form of noncommercial expression if it does more than propose a commercial transaction.” Bolger v. Youngs Drug
Prods. Corp. (1983).
A claim of dilution applies only to purely commercial speech. Mattel. See also
Bolger (finding that materials do not become “commercial speech” simply because the
author had economic motivation to create them). “The question whether an economic
motive existed is more than a question whether there was an economic incentive for the
speaker to make the speech; the Bolger test also requires that the speaker acted
substantially out of economic motivation.” Procter & Gamble Co. v. Amway Corp. (5th
Cir. 2001) “Thus, for example, speech that is principally based on religious or political
convictions, but which may also benefit the speaker economically, would fall short of the
requirement that the speech was economically motivated” and therefore would be
considered noncommercial.
At least one court of appeals has specifically addressed whether a social advocate
selling t-shirts that carried the group’s social message was engaging in noncommercial
speech, despite the fact that the group sold the t-shirts to the public for profit. See Ayres v.
City of Chicago (7th Cir. 1997). In Ayres, the court distinguished limitations on “the sale
of goods that are not themselves forms of protected speech,” noting that precedent allows
more restriction on sales of nonexpressive goods than it does on goods that are forms of
protected speech. The court likened t-shirts carrying messages of social advocacy to “the
sandwich boards that union pickets sometimes wear.” As such, the t-shirts were “a
medium of expression prima facie protected by the free-speech clause of the First
Amendment, and they do not lose their protection by being sold rather than given away.”
The Court is convinced that a reasonable juror could only find that Smith primarily
intended to express himself with his Walocaust and Wal-Qaeda concepts and that
commercial success was a secondary motive at most. Smith has strongly adverse
opinions about Wal-Mart; he believes that it has a destructive effect on communities,
treats workers badly and has a damaging influence on the United States as a whole. He
invented the term “Walocaust” to encapsulate his feelings about Wal-Mart, and he created
his Walocaust designs with the intent of calling attention to his beliefs and his cause. He
never expected to have any exclusive rights to the word. He created the term “WalQaeda” and designs incorporating it with similar expressive intent. The Court has found
those designs to be successful parodies.
Thus, Smith’s parodic work is considered noncommercial speech and therefore not
subject to Wal-Mart’s trademark dilution claims, despite the fact that Smith sold the designs
to the public on t-shirts and other novelty merchandise. Consequently, Smith’s motion for
summary judgment on Wal-Mart’s trademark dilution claims is hereby GRANTED.
III. Conclusion
Smith’s motion for summary judgment is hereby GRANTED, and Wal-Mart’s motion
for summary judgment is DENIED. The Court hereby issues a declaratory judgment that
Smith’s activities have not violated any of Wal-Mart’s trademark rights. Smith may maintain
his domain names and websites. He may also resume offering for sale via his Walocaust and
Wal-Qaeda CafePress webstores his parodic WALOCAUST, WAL-QAEDA, FREEDOM

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HATER MART, and BENTON★VILLEBULLIES ALWAYS concepts printed on novelty
merchandise; on any webpage or other channel offering such merchandise for sale, Smith
must continue to include prominent disclaimers of affiliation with Wal-Mart.
Questions:
1.) Commercial/Noncommercial Use v. Use in Commerce: We have said repeatedly that
the “commercial/non commercial” line is one way that courts and legislatures seek to
trim the ambit of intellectual property rights, to fine tune them so that they are neither
under nor over inclusive. So far, we have looked at two definitions of “use in
commerce”—one in the context of the use required to obtain a mark and one in the
context of the use required to infringe a mark. How is the definition of commercial speech
here in the context of dilution different? Why is it different? [Hint: what would be the
ambit of the ‘non commercial’ defense to dilution if we took a broad definition of
commercial, such as “anything Congress can regulate under the commerce clause?”]
2.) Smith was selling, for profit, T shirts that used portions of Walmart’s logos. Why is
this not commercial? List the reasons the court gives, starting with those you think most
important.
3.) The court draws a distinction between “speech goods”, those that carry a message
though they are distributed for profit, and those that offer no such message. Is this
distinction of relevance in the PETA case? Should it have been?

c.) Dilution by Blurring

Starbucks Corp. v. Wolfe’s Borough Coffee, Inc.

736 F.3d 198 (2d Cir. 2013)

[This is the culmination of a long-running attempt by Starbucks to enjoin Wolfe’s
Borough Coffee, doing business as Black Bear Micro Roastery, from using “Mister
Charbucks,” “Mr. Charbucks,” and “Charbucks Blend.” The litigation was extended in
part by the intervening passage of the TDRA.]
LOHIER, Circuit Judge:
. . . [T]he District Court concluded that Starbucks failed to
prove that the Charbucks Marks are likely to dilute Starbucks’
famous “Starbucks” marks (the “Starbucks Marks”) and denied
Starbucks’ request for an injunction. . . . For the following reasons,
we conclude that the District Court did not err in its factual
findings, and, balancing the statutory factors de novo, we agree
with the District Court that Starbucks failed to prove a likelihood
of dilution. We therefore affirm. . . .
[At the bench trial] Starbucks introduced the testimony of Warren J. Mitofsky, a
scientist in the field of consumer research and polling. Mitofsky explained the results of
a telephone survey he had conducted of six hundred participants, designed to be
representative of the United States population. The survey found that when asked, “What
is the first thing that comes to your mind when you hear the name ‘Charbucks,’ spelled

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C-H-A-R-B-U-C-K-S?,” 30.5 percent of participants answered “Starbucks,” while 9
percent answered “coffee.”5 When the participants were asked, “Can you name any
company or store that you think might offer a product called ‘Charbucks’?,” 3.1 percent
responded “Starbucks,” and another 1.3 percent responded “coffee house.”6 Mitofsky
concluded that “[t]he number one association of the name ‘Charbucks’ in the minds of
consumers is with the brand ‘Starbucks.’” . . .
In Starbucks IV [the Second Circuit’s previous decision in this case] [w]e held that
“the District Court did not clearly err in finding that the Charbucks Marks were
minimally similar to the Starbucks Marks,” because the context of the Charbucks Marks
(on Black Bear’s packaging, on its website, and in the phrases “Charbucks Blend” and
“Mister Charbucks”) differentiated them from the famous marks. We concluded,
however, that “the District Court erred to the extent it required ‘substantial’ similarity
between the marks,” and we suggested that the District Court had overemphasized the
similarity factor. In particular, we stated that the inclusion of “the degree of similarity”
as only one of six factors in the revised statute indicates that even a low degree of
similarity would not categorically bar a dilution-by-blurring claim.
Turning to the fifth and sixth factors—intent to associate and actual association—
we held that the District Court had erred by requiring “bad faith” to find that the intent
to associate factor favored Starbucks. Noting the survey results, which demonstrated
some degree of association between “Charbucks” and “Starbucks,” we also held that the
District Court erred by relying on evidence supporting the absence of “actual confusion”
to conclude that the actual association factor did not weigh in Starbucks’ favor “to any
significant degree.” The absence of actual or likely confusion, we reasoned, does not bear
directly on whether dilution is likely. . . .
DISCUSSION
C. Factual Findings: The Statutory Factors
On appeal, Starbucks challenges two of the District Court’s findings: (1) that there
is only a minimal degree of similarity between the Starbucks Marks and the Charbucks
Marks; and (2) that Starbucks demonstrated only a weak association between the marks.
The District Court did not clearly err with regard to either finding.
1. Degree of Similarity
In Starbucks IV we held that “[w]ith respect to the first factor—the degree of
similarity between the marks—the District Court did not clearly err in finding that the
Charbucks Marks were minimally similar to the Starbucks Marks.” We highlighted the
difference between the Starbucks Marks and Charbucks Marks when the latter are placed
in the context of Black Bear’s packaging and the word “Charbucks” is incorporated into
the phrases “Charbucks Blend” and “Mister Charbucks.” . . .
2. Actual Association
Starbucks next contends that the District Court’s finding that actual association
“weighs no more than minimally” in Starbucks’ favor was error for two reasons. First,
Starbucks argues, Black Bear’s admitted intent to create an association—the fifth
statutory factor—raises a “presumption of association,” or at least is strong evidence of
5

Other common responses included “barbeque” or “charcoal” (7.9 percent); “restaurant” or “grill” (7.5
percent); “meat,” “steak,” or “hamburger” (4.6 percent); and “money” (3.9 percent).

6

More popular responses to this second question included: “grocery store” (18.3 percent); “discount store”
(16.9 percent); “restaurant” (7.0 percent); “department store” (4.8 percent); and “hardware store” or “home
improvement store” (3.7 percent).

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actual association—the sixth statutory factor. Second, it argues that the District Court
improperly discounted the Mitofsky survey evidence, which, in Starbucks’ view, proves
a high degree of actual association. We reject both arguments.
a. Intent to Create an Association
As an initial matter, an intent to create an association is a separate factor under the
TDRA and does not constitute per se evidence that the actual association factor weighs in
favor of the owner of the famous mark. In support of its argument to the contrary, Starbucks
quotes McCarthy’s treatise, which states, “If the junior [user] intended to create an
association, the law may assume that it succeeded.” Starbucks similarly relies on Federal
Express Corp. v. Federal Espresso, Inc. (2d Cir. 2000), a dilution case in which we stated
that the trier of fact “may well find that the marks are of sufficient similarity so that, in the
mind of the consumer, the junior mark will conjure an association with the senior,
especially in light of the testimony of [Federal Espresso’s founder] that she chose the name
Federal Espresso, in part, precisely because it would call to mind Federal Express.”
Both Federal Espresso and McCarthy’s treatise acknowledge the importance of
the intent factor in determining likelihood of dilution. This makes sense, as district courts
must evaluate whether a junior mark is “likely to cause” “association arising from the
similarity” between the marks “that impairs the distinctiveness of the famous mark,” 15
U.S.C. §§ 1125(c)(1), (c)(2)(B), and the intent to associate may bear directly on the
likelihood that the junior mark will cause such an association.
That said, “we interpret statutes to give effect, if possible, to every clause and word
and to avoid statutory interpretations that render provisions superfluous.” Adopting
Starbucks’ presumption argument would effectively merge the intent to associate and the
actual association factors, by making the former determinative of the latter, rather than
treating them as distinct but related considerations. We therefore conclude that the District
Court did not clearly err in finding that Clark’s [Black Bear’s founder] testimony
concerning the origin of the Charbucks Marks was not an “admission” of actual association
and that his intentions were not definitive proof of an actual association between the marks.
b. Mitofsky Survey
Nor did the District Court err when it discounted the Mitofsky survey evidence
because the survey measured only how respondents reacted to the isolated word
“Charbucks,” rather than to the Charbucks Marks in context, and because the share of
respondents who indicated an association between the marks was “relatively small.” We
arrive at this conclusion for two reasons.
First, it coheres with our decision in Starbucks IV, in which we discerned no clear
error in the District Court’s consideration of context—including the addition of “Mister”
or “Blend” to “Charbucks” and Black Bear’s packaging—in assessing the marks’
similarity, as consumers are likely to experience the product only in the context of those
full phrases and Black Bear’s packaging or website. In our analysis of Starbucks’
infringement claim, we similarly determined that the District Court did not clearly err
when it found (1) that the survey failed to demonstrate significant actual confusion,
“[p]articularly in light of the fact that the survey was administered by telephone and did
not present the term ‘Charbucks’ in the context in which Black Bear used it,” and (2) that
the survey should have examined the effects of “a hypothetical coffee named either
‘Mister Charbucks’ or ‘Charbucks Blend’” on the respondents’ impressions of Starbucks
coffee as a measure of dilution by tarnishment.
Second, our conclusion also comports with our prior precedents and other cases
unrelated to Starbucks. In Playtex Products, Inc. v. Georgia-Pacific Corp. (2d Cir.2004),
a case interpreting the pre-revision FTDA, we held that the results of a consumer survey

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showing an association between the marks “Moist-Ones” and “Wet Ones” were
inadmissible as evidence of actual dilution because the defendant’s product was
“presented and packaged” as “Quilted Northern Moist-Ones.” District courts within our
Circuit have applied the same reasoning in evaluating surveys in the infringement context.
See, e.g., WE Media, Inc. v. Gen. Elec. Co. (S.D.N.Y. 2002) (“Germane survey evidence
should make some effort to compare the impressions the marks have on potential
customers under marketplace conditions.”). . . . As in Playtex, the District Court was
within its rights to conclude that the Mitofsky survey had limited probative value because
the defendant’s marks were not presented to survey respondents as they are actually
“presented and packaged” in commerce.
Citing our decision in Nabisco, Starbucks nevertheless argues that consumers are
likely to hear and view the term “Charbucks” outside the context of Black Bear’s packaging
and without the full phrases “Mister Charbucks” and “Charbucks Blend.” But Starbucks
presented no record evidence that “Charbucks” is ever read or heard in isolation, and in the
absence of such evidence, we are not persuaded by the argument. To the contrary, as we
noted in Starbucks IV, “it is unlikely that ‘Charbucks’ will appear to consumers outside the
context of its normal use,” and “it was not clearly erroneous for the District Court to find
that the ‘Mister’ prefix or ‘Blend’ suffix lessened the similarity between the [marks].”
Starbucks also challenges the District Court’s finding that the association between
“Charbucks” and Starbucks was “relatively small.” It contends that the Mitofsky survey
in fact provided evidence of substantial actual association. We disagree.
It is true that in response to Mitofsky’s question most probative of actual
association—“What is the FIRST THING that comes to your mind when you hear the name
‘Charbucks,’ spelled C-H-A-R-B-U-C-K-S?”—30.5 percent of respondents said
“Starbucks,” and 9 percent said “coffee.” Both of these responses suggest an association
between “Charbucks” and the Starbucks Marks. In Jada Toys, for example, the Ninth
Circuit held that a survey demonstrated actual association because it showed that 28 percent
of respondents thought Jada’s product was made by Mattel when asked who they thought
produced the item. Here, however, the equivalent question in Mitofsky’s survey was: “Can
you name any company or store that you think might offer a product called ‘Charbucks’?”
In response to that question concerning source on the Mitofsky survey, however, only 3.1
percent of respondents answered “Starbucks” and 1.3 percent answered “coffee house.”
These percentages are far below that for the equivalent question in Jada Toys and fail to
demonstrate anything more than minimal actual association.15
Ultimately, on this factor, we consider only whether the District Court clearly erred
when it found that the Mitofsky survey tilts the “actual association” factor “no more than
minimally in [Starbucks’] favor.” Had the Mitofsky survey presented the Charbucks
Marks as they appear in commerce, we might well conclude that the District Court erred.
But the word “Charbucks” was presented outside of its marketplace context, and
Starbucks, which bears the burden of proof, failed to show that this flaw did not
materially impact the survey results. We therefore conclude that the record supports the
District Court’s decision to discount the survey and consider the actual association factor
as weighing only minimally in Starbucks’ favor.

15
Although some other respondents gave answers consistent with an association with Starbucks—18.3 percent
answered “grocery store,” 16.9 percent answered “discount store,” 7 percent answered “restaurant,” and 4.8
percent answered “department store”—these responses are also consistent with other views of what
“Charbucks” could be, including meat or a charcoal grilling product, as 38.5 percent of respondents suggested.

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D. Balancing
We next balance the factors enumerated in § 1125(c)(2)(B), along with any other
factors that bear on a likelihood of dilution, de novo. In balancing these factors, we are
again mindful that the test is not an inflexible one, and that the ultimate question is
whether the Charbucks Marks are likely to cause an association arising from their
similarity to the Starbucks Marks, which impairs the Starbucks Marks’ tendency to
identify the source of Starbucks products in a unique way.
We have already affirmed the District Court’s finding of minimal similarity between
the Charbucks Marks and the Starbucks Marks. That finding weighs heavily in Black
Bear’s favor. Certainly, a plaintiff may show a likelihood of dilution notwithstanding only
minimal similarity. But here, minimal similarity strongly suggests a relatively low
likelihood of an association diluting the senior mark. The statute itself emphasizes the
similarity of marks. See § 1125(c)(2)(B) (defining “dilution by blurring” as “association
arising from the similarity between a mark or a trade name and a famous mark that impairs
the distinctiveness of the famous mark” (emphasis added)). Indeed, in Starbucks IV, we
stated that “‘similarity’ is an integral element in the definition of ‘blurring’” under the
TDRA and suggested that, without any similarity, there could be no dilution by blurring.
The next three factors—the degrees of distinctiveness, exclusive use, and
recognition—are features of the senior mark itself that do not depend on the use of the junior
mark. “[T]he degree of distinctiveness of the senior mark has a considerable bearing on the
question whether a junior use will have a diluting effect. . . . [T]he more distinctiveness the
mark possesses, the greater the interest to be protected.” There is no question that
“Starbucks”—an arbitrary mark as applied to coffee—is highly distinctive. Moreover,
because, as the District Court found, the Starbucks Marks are in substantially exclusive use,
“the mark’s distinctiveness is more likely to be impaired by the junior use.” Lastly, as 79
percent of Mitofsky survey respondents were familiar with Starbucks, it is undisputed that
Starbucks constitutes a widely recognized mark, and that this factor favors Starbucks.
Although the three factors of distinctiveness, recognition, and exclusivity favor
Starbucks and bear to some degree on our assessment of the likelihood of dilution by
blurring, the more important factors in the context of this case are the similarity of the
marks and actual association. We agree with the District Court that the distinctiveness,
recognition, and exclusive use of the Starbucks Marks do not overcome the weak
evidence of actual association between the Charbucks and Starbucks marks. To the
contrary, viewed in light of Starbucks’ fame, both globally and among the Mitofsky
survey participants more particularly, the fact that more survey participants did not think
of “Starbucks” upon hearing “Charbucks” reinforces the District Court’s finding that the
marks are only minimally similar, and therefore unlikely to prompt an association that
impairs the Starbucks Marks. Likewise, although the distinctiveness and exclusive use
of the Starbucks Marks help Starbucks prove susceptibility to dilution by association
arising from similarity between the Charbucks and Starbucks marks, they do not
demonstrate that such an association is likely to arise, as Starbucks needed to show to
obtain an injunction. Accordingly, these factors weigh only weakly in Starbucks’ favor.
In this case, we attribute a moderate amount of significance to the fifth factor, intent
to create an association. Clark’s testimony indicated that Black Bear was capitalizing on
an historic connection between the word “Charbucks” and “Starbucks,” which arose out
of the so-called “coffee-wars” in Boston, Massachusetts, and that he “meant to evoke an
image of dark-roasted coffee of the type offered by Starbucks.” “[W]here, as here, the
allegedly diluting mark was created with an intent to associate with the famous mark,” we

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agree with the District Court that this factor favors a finding of a likelihood of dilution.
The final, disputed factor, actual association, is highly relevant to likelihood of
association. In the analogous context of determining the “likelihood of confusion” for
trademark infringement claims, we have noted that “[t]here can be no more positive or
substantial proof of the likelihood of confusion than proof of actual confusion,” even
though a showing of actual confusion is not necessary to prevail on such a claim. The
same principle obtains with respect to proof of actual association in dilution claims. And
as noted, the Mitofsky survey demonstrated weak actual association, at best.
Weighing the factors above de novo, we agree with the District Court that
Starbucks did not demonstrate a likelihood of dilution by blurring. Ultimately what tips
the balance in this case is that Starbucks bore the burden of showing that it was entitled
to injunctive relief on this record. Because Starbucks’ principal evidence of association,
the Mitofsky survey, was fundamentally flawed, and because there was minimal
similarity between the marks at issue, we agree with the District Court that Starbucks
failed to show that Black Bear’s use of its Charbucks Marks in commerce is likely to
dilute the Starbucks Marks.
CONCLUSION
We have considered all of Starbucks’ contentions on this appeal and have
concluded that they are without merit. For the foregoing reasons, we AFFIRM the
judgment of the District Court.
Questions:
1.) Really? “Charbucks” on coffee doesn’t dilute the “Starbucks” mark? What would
Starbucks need to show to bring a successful dilution claim against “Charbucks”?
2.) Do you agree with the court’s interpretation of the six statutory factors for “dilution
by blurring”? What factors are the most relevant for determining whether a challenged
mark “impairs the distinctiveness” of a famous mark?
P ROBLEM 9-1
D ILUTION OF ( BY ) A LCOHOL ?
John Wayne, the legendary actor, was also known
by the nickname “The Duke.’ John Wayne
Enterprises—owned by his heirs—has sought to
register “Duke” for a variety of goods and services
over the years: including restaurants, celebrity
licensing services and gaming machines. Now they
want to register it for alcoholic beverages, and in
particular, bourbon. Duke University—the venerable educational institution—strongly objects to
the registration of “Duke” for alcohol, alleging that
it will cause confusion but also that it will dilute
Duke’s “famous” mark.
What sections of the Lanham Act can Duke rely Image from the producers of Duke
on in attempting to block registration? [Be bourbon at http://www.dukespirits.com/

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specific.] Will any of those challenges succeed? If the mark is registered and John
Wayne Enterprises attempts to market the bourbon, will Duke succeed in an antidilution action? Is the mark famous? Is there a likelihood of dilution? By
blurring or by tarnishment?
[Those who are interested in a real-life empirical study of whether a university can be
a trademark bully may read Boyle & Jenkins, Mark of the Devil: The University as
Brand Bully. Unfortunately, the university is Duke, and the answer is “yes, a university
can be a brand bully.”]

3.) “Cybersquatting” and “Cyberpiracy”
1125(d) Cyberpiracy prevention
(1)(A) A person shall be liable in a civil action by the owner of a
mark, including a personal name which is protected as a mark
under this section, if, without regard to the goods or services of the
parties, that person—
(i) has a bad faith intent to profit from that mark, including a
personal name which is protected as a mark under this section;
and
(ii) registers, traffics in, or uses a domain name that—
(I) in the case of a mark that is distinctive at the time of
registration of the domain name, is identical or confusingly
similar to that mark;
(II) in the case of a famous mark that is famous at the time of
registration of the domain name, is identical or confusingly
similar to or dilutive of that mark; or
(III) is a trademark, word, or name protected by reason of
section 706 of title 18 or section 220506 of title 36.
(B)(i) In determining whether a person has a bad faith intent
described under subparagraph (A), a court may consider factors
such as, but not limited to—
(I) the trademark or other intellectual property rights of the
person, if any, in the domain name;
(II) the extent to which the domain name consists of the legal
name of the person or a name that is otherwise commonly used
to identify that person;
(III) the person’s prior use, if any, of the domain name in
connection with the bona fide offering of any goods or services;
(IV) the person’s bona fide noncommercial or fair use of the
mark in a site accessible under the domain name;
(V) the person’s intent to divert consumers from the mark
owner’s online location to a site accessible under the domain
name that could harm the goodwill represented by the mark,
either for commercial gain or with the intent to tarnish or
disparage the mark, by creating a likelihood of confusion as to
the source, sponsorship, affiliation, or endorsement of the site;
(VI) the person’s offer to transfer, sell, or otherwise assign the

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domain name to the mark owner or any third party for financial
gain without having used, or having an intent to use, the domain
name in the bona fide offering of any goods or services, or the
person’s prior conduct indicating a pattern of such conduct;
(VII) the person’s provision of material and misleading false
contact information when applying for the registration of the
domain name, the person’s intentional failure to maintain
accurate contact information, or the person’s prior conduct
indicating a pattern of such conduct;
(VIII) the person’s registration or acquisition of multiple
domain names which the person knows are identical or
confusingly similar to marks of others that are distinctive at
the time of registration of such domain names, or dilutive of
famous marks of others that are famous at the time of
registration of such domain names, without regard to the
goods or services of the parties; and
(IX) the extent to which the mark incorporated in the
person’s domain name registration is or is not distinctive and
famous within the meaning of subsection (c).
(ii) Bad faith intent described under subparagraph (A) shall not
be found in any case in which the court determines that the
person believed and had reasonable grounds to believe that the
use of the domain name was a fair use or otherwise lawful.
(C) In any civil action involving the registration, trafficking, or
use of a domain name under this paragraph, a court may order
the forfeiture or cancellation of the domain name or the transfer
of the domain name to the owner of the mark.
(D) A person shall be liable for using a domain name under
subparagraph (A) only if that person is the domain name
registrant or that registrant’s authorized licensee.
(E) As used in this paragraph, the term “traffics in” refers to
transactions that include, but are not limited to, sales, purchases,
loans, pledges, licenses, exchanges of currency, and any other
transfer for consideration or receipt in exchange for consideration.
Notes
Section 1125(d), the so-called cyberpiracy or cybersquatting provision, is part of a
continuing attempt by the courts and Congress to delineate the relationship between
trademark law on the one hand and internet domain names on the other. What is the
internet’s Domain Name System?
The Domain Name System (DNS) is a hierarchical distributed naming
system for computers, services, or any resource connected to the Internet
or a private network. It associates various [types of] information with
domain names assigned to each of the participating entities. Most
prominently, it translates easily memorized domain names to the
numerical IP addresses needed for the purpose of locating computer
services and devices worldwide. The Domain Name System is an essential
component of the functionality of the Internet. An often-used analogy to

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explain the Domain Name System is that it serves as the phone book for
the Internet by translating human-friendly computer hostnames into IP
addresses. For example, the domain name www.example.com translates
to the addresses 93.184.216.119 (IPv4) and 2606:2800:220:6d:26bf:1447:
1097:aa7 (IPv6). Unlike a phone book, the DNS can be quickly updated,
allowing a service’s location on the network to change without affecting
the end users, who continue to use the same host name. Users take
advantage of this when they use meaningful Uniform Resource Locators
(URLs), and e-mail addresses without having to know how the computer
actually locates the services.1
Domain names are organized in subdomains of this DNS system. You are probably
familiar with the suffixes indicating the top level domain names (TLD) such as .com,
.org, .edu and so on. You may also know the country code top level domain names such
as .uk and .fr. What happens when this domain name system meets trademark law? This
is another of the central themes in this book—technological happenstance produces
conflicts with a set of legal premises, conflicts that the law has to work out.
At the beginning of the trademark section we discussed the fact that trademark law
does not convey ownership of a word. Bass for ale does not infringe Bass for electronics
or circuit boards, nor is it infringed by bass fishing companies or those who want to teach
you to play a bass guitar like Jaco Pastorius. (Not that anyone could.) The word bass is
not “rivalrous” and trademark law does not seek to make it rivalrous, unless 1.) its use
would cause a likelihood of confusion or 2.) in the case of famous marks, there would be
blurring or tarnishment. But there is only one bass.com—the most desirable top level
domain name. Who is to own it and what does trademark law say about that? (It is owned
by Anheuser-Busch, as it turns out.) True, there are other top level domains and their
suffixes offer some ability to segregate different types of activities just as non digital
reality allows many uses of the word to coexist. For example, .org was originally reserved
for non-profits, though it is now unrestricted. (Bass.org is devoted to a now defunct
mailing list discussing playing the electronic bass.) .edu signifies educational activities,
so you expect duke.edu to be different from duke.com (which at present carries an “under
construction” message and points to sites selling Duke merchandise, among other things).
.xxx is reserved for porn sites. .gov is reserved for government sites, so Whitehouse.gov
will get you the White House web site, while Whitehouse.com will get you advertisements
for Ukrainian dating sites (to use the most salubrious example there). And finally, the
country level domain names such as .uk and .fr mean that a little of the geographic
boundedness that trademark relied on (no one in Portugal knows Delta faucets, but they
all know Delta coffee) can be restored. It should be noted, though, that there is no
requirement that companies only use country level domain names pointing to their nation,
and that many entities use the country domain names for reasons other than nationality.
.tv is popular for television related sites, though it really signifies Tuvalu.
Despite the multiple uses made possible by the varied TLDs and CCTLDs
(country-code top level domains) there is clearly a shortage of desirable domains for
those businesses or activities that both use the same word. A body of law that presumes
that a word is “rivalrous” only within the bounds of a type of commercial activity
(because that is all the trademark covers) meets a technology where the use of the word
is rival in a different way. One immediate problem (though hardly the only one) is that
of “cybersquatting” or “cyberpiracy.” While the term is actually a broad one, as you can
1

“Domain Name System” http://en.wikipedia.org/wiki/Domain_Name_System (as posted in July 2014).

“Cybersquatting” and “Cyberpiracy”

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see from 1125(d), the core prohibition against cyberpiracy is aimed at a practice that was
most prominent in the early days of the web. The cybersquatter is the person who buys
up a domain name that a trademark owner might want and has not yet purchased. Often,
he or she does not use the domain in commerce. (Doing that might have triggered
conventional trademark liability, depending on what goods and services were being
offered and whether they were similar to the trademark owner’s products.) Instead, he or
she leaves the site with an “under construction” sign and offers it to the trademark owner
at a price, generally a hefty price. 1125(d) was designed to deal with this problem.2 But
what is the nature of the “problem”?

P ROBLEM 9-2
John Wayne, Daddy Warbucks and Joe Dotcom all have interesting business opportunities—at different moments in history. Wayne reads the speeches of the politicians and
believes that a transcontinental railroad must be coming soon. He pores over maps and
realizes that there are certain geographical choke points, valleys through which the tracks
must pass. Quietly, he starts buying up the land. He can do so for pennies, because it is
unattractive and not very fertile. He has no intention of farming himself, he just waits for
the railroad to come to town at which point he will confidently name a very high price.
The cost of bypassing the valley would be even greater.
Years later, Warbucks is also keeping a close eye on the news. He believes that
a new World War is about to break out. Knowing that aviation gasoline and various
metals will be in high demand, he manages to corner a nice chunk of the market on
them, buying “options” to purchase at a set price. He believes the prices will skyrocket
and he will be able to flip his options to eager, even desperate, buyers. He has no
intention of flying planes or smelting metal himself. He just wants to “bring the
information to market” and make a lot of money doing so. He is proud of his “allAmerican” ingenuity in figuring out where the market is going.
Joe Dotcom is an early user of the internet. He believes this will be the future of
commerce and speech and he thinks that incumbent industries will be slow to realize this.
§ 1125(d) is largely mirrored by an agreement called the UDRP (or Uniform Domain Name Dispute
Resolution Policy) imposed by the Internet Corporation on Assigned Names and Numbers (ICANN).
ICANN effectively runs the decentralized registrar system by which new websites are registered. Anyone
registering a domain name with an ICANN sanctioned registrar must follow that agreement, which sets up
an arbitration system to resolve domain name disputes. (The UDRP is included in the statutory supplement.)
All registrars must follow the Uniform Domain-Name Dispute-Resolution Policy (often referred to
as the “UDRP”). Under the policy, most types of trademark-based domain-name disputes must be
resolved by agreement, court action, or arbitration before a registrar will cancel, suspend, or transfer
a domain name. Disputes alleged to arise from abusive registrations of domain names (for example,
cybersquatting) may be addressed by expedited administrative proceedings that the holder of
trademark rights initiates by filing a complaint with an approved dispute-resolution service provider.
To invoke the policy, a trademark owner should either (a) file a complaint in a court of proper
jurisdiction against the domain-name holder (or where appropriate an in-rem action concerning the
domain name) or (b) in cases of abusive registration submit a complaint to an approved disputeresolution service provider.
https://www.icann.org/resources/pages/help/dndr/udrp-en (last visited July 20, 2018). While trademark law
provides the broad outlines of the rules, on a day-to-day basis, disputes are more likely to be settled in the
cheaper and quicker arbitration system outlined in the UDRP. Yet the UDRP arbitrators will often consult
the same principles that you are reading about in these trademark cases.
2

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He goes on a spending spree, buying up Ford.com, Pfizer.com, Cocacola.com and many
others. He has no intention of using the domains, he is simply “safeguarding them” he
says. When the companies awake to the power of the internet, he will be ready with an
offer to sell the domain. In the case of companies competing for the same domain, such
as bass.com, he will propose a simple auction. For the others, he will propose that they
ask themselves how much it is worth to have the correct domain name. He is sure they
can agree on a price. And if they cannot, he is asked? Then the domain will not be
transferred, the way it normally goes in a market if a willing buyer and a willing seller
cannot agree to a price. “It is not as though anyone will be confused by the big ‘under
construction’ notices that are currently the only thing on those pages,” he tells you.
Are Warbucks and Wayne breaking the law? If not, why is Dotcom? What is he
doing that is different from what they are doing? (This is not a rhetorical question;
please list the differences.) How do the words cyberpiracy and cybersquatting
morally frame the issue? What are the arguments that it is socially better (more
efficient, more just) for him to be forbidden from this kind of activity and for the
trademark owners to be given the legal right to compel transfer of the domains at
no cost to them? Are you convinced?

Lamparello v. Falwell

420 F.3d 309 (4th Cir. 2005)
MOTZ, Circuit Judge.
Christopher Lamparello appeals the district court’s order enjoining him from
maintaining a gripe website critical of Reverend Jerry Falwell. For the reasons stated
below, we reverse.
I.
Reverend Falwell is “a nationally known minister who has been active as a commentator on politics and public affairs.” Hustler Magazine v. Falwell (1988). He holds
the common law trademarks “Jerry Falwell” and “Falwell,” and the registered trademark
“Listen America with Jerry Falwell.” Jerry Falwell Ministries can be found online at
“www.falwell.com,” a website which receives 9,000 hits (or visits) per day.
Lamparello registered the domain name “www.fallwell.com” on February 11, 1999,
after hearing Reverend Falwell give an interview “in which he expressed opinions about
gay people and homosexuality that [Lamparello] considered . . . offensive.” Lamparello
created a website at that domain name to respond to what he believed were “untruths about
gay people.” Lamparello’s website included headlines such as “Bible verses that Dr.
Falwell chooses to ignore” and “Jerry Falwell has been bearing false witness (Exodus
20:16) against his gay and lesbian neighbors for a long time.” The site also contained
indepth criticism of Reverend Falwell’s views. For example, the website stated:
Dr. Falwell says that he is on the side of truth. He says that he will preach
that homosexuality is a sin until the day he dies. But we believe that if
the reverend were to take another thoughtful look at the scriptures, he
would discover that they have been twisted around to support an antigay political agenda . . . at the expense of the gospel.

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Although the interior pages of Lamparello’s website did not contain a disclaimer, the
homepage prominently stated, “This website is NOT affiliated with Jerry Falwell or his
ministry”; advised, “If you would like to visit Rev. Falwell’s website, you may click
here”; and provided a hyperlink to
Reverend Falwell’s website.
At one point, Lamparello’s
website included a link to the
Amazon.com webpage for a book
that offered interpretations of the
Bible that Lamparello favored, but
the parties agree that Lamparello has
never sold goods or services on his
website. The parties also agree that
“Lamparello’s domain name and
web site at www.fallwell.com,”
which received only 200 hits per day,
“had no measurable impact on the Lamparello’s website for www.fallwell.com
quantity of visits to [Reverend Falwell’s] web site at www.falwell.com.”
Nonetheless, Reverend Falwell sent Lamparello letters in October 2001 and June
2003 demanding that he cease and desist from using www.fallwell.com or any variation
of Reverend Falwell’s name as a domain name. Ultimately, Lamparello filed this action
against Reverend Falwell and his ministries (collectively referred to hereinafter as
“Reverend Falwell”), seeking a declaratory judgment of noninfringement. Reverend
Falwell counter-claimed, alleging trademark infringement under 15 U.S.C. § 1114
(2000), false designation of origin under 15 U.S.C. § 1125(a), unfair competition under
15 U.S.C. § 1126 and the common law of Virginia, and cybersquatting under 15 U.S.C.
§ 1125(d).
The district court granted summary judgment to Reverend Falwell, enjoined
Lamparello from using Reverend Falwell’s mark at www.fallwell.com, and required
Lamparello to transfer the domain name to Reverend Falwell. However, the court denied
Reverend Falwell’s request for statutory damages or attorney fees, reasoning that the
“primary motive” of Lamparello’s website was “to put forth opinions on issues that were
contrary to those of [Reverend Falwell]” and “not to take away monies or to profit.”
Lamparello appeals the district court’s order; Reverend Falwell cross-appeals the
denial of statutory damages and attorney fees.
II.
We first consider Reverend Falwell’s claims of trademark infringement and false
designation of origin. . . .
Trademark law serves the important functions of protecting product identification,
providing consumer information, and encouraging the production of quality goods and
services. See Qualitex Co. v. Jacobson Prods. Co. (1995). But protections “‘against unfair
competition’” cannot be transformed into “‘rights to control language.’” CPC Int’l, Inc. v.
Skippy Inc. (4th Cir. 2000) (quoting Mark A. Lemley, The Modern Lanham Act and the
Death of Common Sense, 108 Yale L.J. 1687, 1710–11 (1999)). “Such a transformation”
would raise serious First Amendment concerns because it would limit the ability to discuss
the products or criticize the conduct of companies that may be of widespread public concern
and importance. Much useful social and commercial discourse would be all but impossible
if speakers were under threat of an infringement lawsuit every time they made reference to

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a person, company or product by using its trademark.
Lamparello and his amici argue at length that application of the Lanham Act must
be restricted to “commercial speech” to assure that trademark law does not become a tool
for unconstitutional censorship. The Sixth Circuit has endorsed this view, see Taubman
Co. v. Webfeats (6th Cir. 2003), and the Ninth Circuit recently has done so as well, see
Bosley Med. Inst., Inc. v. Kremer (9th Cir. 2005).
In its two most significant recent amendments to the Lanham Act, the Federal
Trademark Dilution Act of 1995 (“FTDA”) and the Anticybersquatting Consumer
Protection Act of 1999 (“ACPA”), Congress left little doubt that it did not intend for
trademark laws to impinge [on] the First Amendment rights of critics and commentators.
The dilution statute applies to only a “commercial use in commerce of a mark,” 15 U.S.C.
§ 1125(c)(1), and explicitly states that the “[n]oncommercial use of a mark” is not
actionable. § 1125(c)(4). Congress explained that this language was added to “adequately
address[] legitimate First Amendment concerns,” and “incorporate[d] the concept of
‘commercial’ speech from the ‘commercial speech’ doctrine.” Similarly, Congress directed
that in determining whether an individual has engaged in cybersquatting, the courts may
consider whether the person’s use of the mark is a “bona fide noncommercial or fair use.”
15 U.S.C. § 1125(d)(1)(B)(i)(IV). The legislature believed this provision necessary to
“protect[ ] the rights of Internet users and the interests of all Americans in free speech and
protected uses of trademarked names for such things as parody, comment, criticism,
comparative advertising, news reporting, etc.”
In contrast, the trademark infringement and false designation of origin provisions
of the Lanham Act (Sections 32 and 43(a), respectively) do not employ the term
“noncommercial.” They do state, however, that they pertain only to the use of a mark “in
connection with the sale, offering for sale, distribution, or advertising of any goods or
services,” 15 U.S.C. § 1114(1)(a), or “in connection with any goods or services,”
§ 1125(a)(1). But courts have been reluctant to define those terms narrowly. Rather, as the
Second Circuit has explained, “[t]he term ‘services’ has been interpreted broadly” and so
“[t]he Lanham Act has . . . been applied to defendants furnishing a wide variety of noncommercial public and civic benefits.” United We Stand Am., Inc. v. United We Stand, Am.
N.Y., Inc. (2d Cir. 1997). Similarly, in PETA we noted that a website need not actually sell
goods or services for the use of a mark in that site’s domain name to constitute a use “‘in
connection with’ goods or services.” PETA; see also Taubman Co. (concluding that
website with two links to websites of for-profit entities violated the Lanham Act).
Thus, even if we accepted Lamparello’s contention that Sections 32 and 43(a) of
the Lanham Act apply only to commercial speech, we would still face the difficult
question of what constitutes such speech under those provisions. In the case at hand, we
need not resolve that question or determine whether Sections 32 and 43(a) apply
exclusively to commercial speech because Reverend Falwell’s claims of trademark
infringement and false designation fail for a more obvious reason. The hallmark of such
claims is a likelihood of confusion—and there is no likelihood of confusion here.
B. 1.
“[T]he use of a competitor’s mark that does not cause confusion as to source is permissible.” Dorr-Oliver, Inc. v. Fluid-Quip, Inc. (7th Cir. 1996). Accordingly, Lamparello
can only be liable for infringement and false designation if his use of Reverend Falwell’s
mark would be likely to cause confusion as to the source of the website found at
www.fallwell.com. This likelihood-of-confusion test “generally strikes a comfortable
balance” between the First Amendment and the rights of markholders.

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We have identified seven factors helpful in determining whether a likelihood of
confusion exists as to the source of a work, but “not all these factors are always relevant
or equally emphasized in each case.” Pizzeria Uno Corp. v. Temple (4th Cir. 1984) The
factors are: “(a) the strength or distinctiveness of the mark; (b) the similarity of the two
marks; (c) the similarity of the goods/services the marks identify; (d) the similarity of the
facilities the two parties use in their businesses; (e) the similarity of the advertising used
by the two parties; (f) the defendant’s intent; (g) actual confusion.”
Reverend Falwell’s mark is distinctive, and the domain name of Lamparello’s
website, www.fallwell.com, closely resembles it. But, although Lamparello and Reverend
Falwell employ similar marks online, Lamparello’s website looks nothing like Reverend
Falwell’s; indeed, Lamparello has made no attempt to imitate Reverend Falwell’s website.
Moreover, Reverend Falwell does not even argue that Lamparello’s website constitutes
advertising or a facility for business, let alone a facility or advertising similar to that of
Reverend Falwell. Furthermore, Lamparello clearly created his website intending only to
provide a forum to criticize ideas, not to steal customers.
Most importantly, Reverend Falwell and Lamparello do not offer similar goods or
services. Rather they offer opposing ideas and commentary. Reverend Falwell’s mark
identifies his spiritual and political views; the website at www.fallwell.com criticizes
those very views. After even a quick glance at the content of the website at
www.fallwell.com, no one seeking Reverend Falwell’s guidance would be misled by the
domain name—www.fallwell.com—into believing Reverend Falwell authorized the
content of that website. No one would believe that Reverend Falwell sponsored a site
criticizing himself, his positions, and his interpretations of the Bible.3
Finally, the fact that people contacted Reverend Falwell’s ministry to report that
they found the content at www.fallwell.com antithetical to Reverend Falwell’s views
does not illustrate, as Reverend Falwell claims, that the website engendered actual
confusion. To the contrary, the anecdotal evidence Reverend Falwell submitted shows
that those searching for Reverend Falwell’s site and arriving instead at Lamparello’s site
quickly realized that Reverend Falwell was not the source of the content therein.
For all of these reasons, it is clear that the undisputed record evidences no
likelihood of confusion. In fact, Reverend Falwell even conceded at oral argument that
those viewing the content of Lamparello’s website probably were unlikely to confuse
Reverend Falwell with the source of that material.
2.
Nevertheless, Reverend Falwell argues that he is entitled to prevail under the
“initial interest confusion” doctrine. This relatively new and sporadically applied
doctrine holds that “the Lanham Act forbids a competitor from luring potential customers
away from a producer by initially passing off its goods as those of the producer’s, even
if confusion as to the source of the goods is dispelled by the time any sales are
consummated.” Dorr-Oliver. According to Reverend Falwell, this doctrine requires us to
compare his mark with Lamparello’s website domain name, www.fallwell.com, without
considering the content of Lamparello’s website. Reverend Falwell argues that some
If Lamparello had neither criticized Reverend Falwell by name nor expressly rejected Reverend Falwell’s
teachings, but instead simply had quoted Bible passages and offered interpretations of them subtly different
from those of Reverend Falwell, this would be a different case. For, while a gripe site, or a website dedicated
to criticism of the markholder, will seldom create a likelihood of confusion, a website purporting to be the
official site of the markholder and, for example, articulating positions that could plausibly have come from
the markholder may well create a likelihood of confusion.

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people who misspell his name may go to www.fallwell.com assuming it is his site, thus
giving Lamparello an unearned audience—albeit one that quickly disappears when it
realizes it has not reached Reverend Falwell’s site. This argument fails for two reasons.
First, we have never adopted the initial interest confusion theory; rather, we have followed a very different mode of analysis, requiring courts to determine whether a likelihood
of confusion exists by “examin[ing] the allegedly infringing use in the context in which it is
seen by the ordinary consumer.” Anheuser-Busch, Inc. v. L & L Wings, Inc. (4th Cir. 1992).
Contrary to Reverend Falwell’s arguments, we did not abandon this approach in
PETA. Our inquiry in PETA was limited to whether Doughney’s use of the domain name
“www.peta.org” constituted a successful enough parody of People for the Ethical
Treatment of Animals that no one was likely to believe www.peta.org was sponsored or
endorsed by that organization. For a parody to be successful, it “must convey two
simultaneous—and contradictory—messages: that it is the original, but also that it is not
the original and is instead a parody.” PETA. Doughney argued that his domain name
conveyed the first message (that it was PETA’s website) and that the content of his website
conveyed the requisite second message (that it was not PETA’s site). Although “[t]he
website’s content ma[de] it clear that it [wa]s not related to PETA,” we concluded that the
website’s content could not convey the requisite second message because the site’s content
“[wa]s not conveyed simultaneously with the first message, [i.e., the domain name itself,]
as required to be considered a parody.” Accordingly, we found the “district court properly
rejected Doughney’s parody defense.”
PETA simply outlines the parameters of the parody defense; it does not adopt the
initial interest confusion theory or otherwise diminish the necessity of examining context
when determining whether a likelihood of confusion exists. Indeed, in PETA itself, rather
than embracing a new approach, we reiterated that “[t]o determine whether a likelihood
of confusion exists, a court should not consider how closely a fragment of a given use
duplicates the trademark, but must instead consider whether the use in its entirety creates
a likelihood of confusion.” When dealing with domain names, this means a court must
evaluate an allegedly infringing domain name in conjunction with the content of the
website identified by the domain name.4
Moreover, even if we did endorse the initial interest confusion theory, that theory
would not assist Reverend Falwell here because it provides no basis for liability in
circumstances such as these. The few appellate courts that have followed the Ninth
Circuit and imposed liability under this theory for using marks on the Internet have done
so only in cases involving a factor utterly absent here—one business’s use of another’s
mark for its own financial gain.
Profiting financially from initial interest confusion is thus a key element for
imposition of liability under this theory.5 When an alleged infringer does not compete
with the markholder for sales, “some initial confusion will not likely facilitate free riding
Contrary to Reverend Falwell’s suggestions, this rule does not change depending on how similar the domain
name or title is to the mark. Hence, Reverend Falwell’s assertion that he objects only to Lamparello using the
domain name www.fallwell.com and has no objection to Lamparello posting his criticisms at “www
.falwelliswrong.com,” or a similar domain name, does not entitle him to a different evaluation rule. Rather it
has long been established that even when alleged infringers use the very marks at issue in titles, courts look
to the underlying content to determine whether the titles create a likelihood of confusion as to source.
5
Offline uses of marks found to cause actionable initial interest confusion also have involved financial gain.
See Elvis Presley Enters., Inc. v. Capece (5th Cir. 1998); Mobil Oil Corp. v. Pegasus Petroleum Corp. (2d
Cir. 1987). And even those courts recognizing the initial interest confusion theory of liability but finding no
actionable initial confusion involved one business’s use of another’s mark for profit.
4

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on the goodwill of another mark, or otherwise harm the user claiming infringement.
Where confusion has little or no meaningful effect in the marketplace, it is of little or no
consequence in our analysis.” Checkpoint Sys. For this reason, even the Ninth Circuit has
stated that a firm is not liable for using another’s mark in its domain name if it “could
not financially capitalize on [a] misdirected consumer [looking for the markholder’s site]
even if it so desired.” Interstellar Starship Servs., Ltd. v. Epix, Inc. (9th Cir. 2002).
This critical element—use of another firm’s mark to capture the markholder’s
customers and profits—simply does not exist when the alleged infringer establishes a
gripe site that criticizes the markholder. See Hannibal Travis, The Battle For Mindshare:
The Emerging Consensus that the First Amendment Protects Corporate Criticism and
Parody on the Internet, 10 Va. J.L. & Tech. 3, 85 (Winter 2005) (“The premise of the
‘initial interest’ confusion cases is that by using the plaintiff’s trademark to divert its
customers, the defendant is engaging in the old ‘bait and switch.’ But because . . . Internet
users who find [gripe sites] are not sold anything, the mark may be the ‘bait,’ but there is
simply no ‘switch.’”).6 Applying the initial interest confusion theory to gripe sites like
Lamparello’s would enable the markholder to insulate himself from criticism—or at least
to minimize access to it. We have already condemned such uses of the Lanham Act,
stating that a markholder cannot “‘shield itself from criticism by forbidding the use of its
name in commentaries critical of its conduct.’” CPC Int’l (quoting L.L. Bean, Inc. v.
Drake Publishers, Inc. (1st Cir. 1987)). “[J]ust because speech is critical of a corporation
and its business practices is not a sufficient reason to enjoin the speech.”
In sum, even if we were to accept the initial interest confusion theory, that theory
would not apply in the case at hand. Rather, to determine whether a likelihood of
confusion exists as to the source of a gripe site like that at issue in this case, a court must
look not only to the allegedly infringing domain name, but also to the underlying content
of the website. When we do so here, it is clear, as explained above, that no likelihood of
confusion exists. Therefore, the district court erred in granting Reverend Falwell summary
judgment on his infringement, false designation, and unfair competition claims.
III.
We evaluate Reverend Falwell’s cybersquatting claim separately because the
elements of a cybersquatting violation differ from those of traditional Lanham Act
violations. To prevail on a cybersquatting claim, Reverend Falwell must show that
Lamparello: (1) “had a bad faith intent to profit from using the [www.fallwell.com]
domain name,” and (2) the domain name www.fallwell.com “is identical or confusingly
similar to, or dilutive of, the distinctive and famous [Falwell] mark.” PETA (citing 15
U.S.C. § 1125(d)(1)(A)).
“The paradigmatic harm that the ACPA was enacted to eradicate” is “the practice of
Although the appellate courts that have adopted the initial interest confusion theory have only applied it to
profit-seeking uses of another’s mark, the district courts have not so limited the application of the theory.
Without expressly referring to this theory, two frequently-discussed district court cases have held that using
another’s domain name to post content antithetical to the markholder constitutes infringement. See Planned
Parenthood Fed’n of Am., Inc. v. Bucci, No. 97 Civ. 0629, 1997 WL 133313 (S.D.N.Y. 1997), aff’d, 152 F.3d
920 (2d Cir. 1998) (table) (finding use of domain name “www.plannedparenthood.com” to provide links to
passages of anti-abortion book constituted infringement); Jews for Jesus v. Brodsky (D.N.J. 1998), aff’d (3d
Cir. 1998) (table) (finding use of “www.jewsforjesus.org” to criticize religious group constituted infringement). We think both cases were wrongly decided to the extent that in determining whether the domain names
were confusing, the courts did not consider whether the websites’ content would dispel any confusion. In
expanding the initial interest confusion theory of liability, these cases cut it off from its moorings to the
detriment of the First Amendment.

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cybersquatters registering several hundred domain names in an effort to sell them to the
legitimate owners of the mark.” Lucas Nursery & Landscaping, Inc. v. Grosse (6th Cir.
2004). The Act was also intended to stop the registration of multiple marks with the hope
of selling them to the highest bidder, “distinctive marks to defraud consumers” or “to
engage in counterfeiting activities,” and “well-known marks to prey on consumer confusion by misusing the domain name to divert customers from the mark owner’s site to the
cybersquatter’s own site, many of which are pornography sites that derive advertising
revenue based on the number of visits, or ‘hits,’ the site receives.” The Act was not intended
to prevent “noncommercial uses of a mark, such as for comment, criticism, parody, news
reporting, etc.,” and thus they “are beyond the scope” of the ACPA.
To distinguish abusive domain name registrations from legitimate ones, the ACPA
directs courts to consider nine nonexhaustive factors. . . . [These statutory factors are
listed at the beginning of this section on page 242.]
These factors attempt “to balance the property interests of trademark owners with
the legitimate interests of Internet users and others who seek to make lawful uses of others’
marks, including for purposes such as comparative advertising, comment, criticism,
parody, news reporting, fair use, etc.” H.R.Rep. No. 106-412. “The first four [factors]
suggest circumstances that may tend to indicate an absence of bad-faith intent to profit
from the goodwill of a mark, and the others suggest circumstances that may tend to
indicate that such bad-faith intent exists.” However, “[t]here is no simple formula for
evaluating and weighing these factors. For example, courts do not simply count up which
party has more factors in its favor after the evidence is in.” Harrods Ltd. v. Sixty Internet
Domain Names (4th Cir. 2002). In fact, because use of these listed factors is permissive,
“[w]e need not . . . march through” them all in every case. Virtual Works, Inc. v.
Volkswagen of Am., Inc. (4th Cir. 2001). “The factors are given to courts as a guide, not
as a substitute for careful thinking about whether the conduct at issue is motivated by a
bad faith intent to profit.” Lucas Nursery & Landscaping.
After close examination of the undisputed facts involved in this case, we can only
conclude that Reverend Falwell cannot demonstrate that Lamparello “had a bad faith
intent to profit from using the [www.fallwell.com] domain name.” Lamparello clearly
employed www.fallwell.com simply to criticize Reverend Falwell’s views. Factor IV of
the ACPA, 15 U.S.C. § 1125(d)(1)(B)(i)(IV), counsels against finding a bad faith intent to
profit in such circumstances because “use of a domain name for purposes of . . . comment,
[and] criticism,” constitutes a “bona fide noncommercial or fair use” under the statute, 15
U.S.C. § 1125(d)(1)(B)(i)(IV).7 That Lamparello provided a link to an Amazon.com
webpage selling a book he favored does not diminish the communicative function of his
website. The use of a domain name to engage in criticism or commentary “even where
done for profit” does not alone evidence a bad faith intent to profit, and Lamparello did
not even stand to gain financially from sales of the book at Amazon.com. Thus factor IV
weighs heavily in favor of finding Lamparello lacked a bad faith intent to profit from the
7
We note that factor IV does not protect a faux noncommercial site, that is, a noncommercial site created by
the registrant for the sole purpose of avoiding liability under the FTDA, which exempts noncommercial uses
of marks, see 15 U.S.C. § 1125(c)(4)(B), or under the ACPA. As explained by the Senate Report discussing
the ACPA, an individual cannot avoid liability for registering and attempting to sell a hundred domain names
incorporating famous marks by posting noncommercial content at those domain names. See S.Rep. No. 106140, 1999 WL 594571, at *14 (citing Panavision Int’l v. Toeppen (9th Cir. 1998)). But Lamparello’s sole
purpose for registering www.fallwell.com was to criticize Reverend Falwell, and this noncommercial use
was not a ruse to avoid liability. Therefore, factor IV indicates that Lamparello did not have a bad faith intent
to profit.

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use of the domain name.
Equally important, Lamparello has not engaged in the type of conduct described
in the statutory factors as typifying the bad faith intent to profit essential to a successful
cybersquatting claim. First, we have already held, supra Part II.B, that Lamparello’s
domain name does not create a likelihood of confusion as to source or affiliation.
Accordingly, Lamparello has not engaged in the type of conduct—“creating a likelihood
of confusion as to the source, sponsorship, affiliation, or endorsement of the site,” 15
U.S.C. § 1125(d)(1)(B)(i)(V)—described as an indicator of a bad faith intent to profit in
factor V of the statute.
Factors VI and VIII also counsel against finding a bad faith intent to profit here.
Lamparello has made no attempt—or even indicated a willingness—“to transfer, sell, or
otherwise assign the domain name to [Reverend Falwell] or any third party for financial
gain.” 15 U.S.C. § 1125(d)(1)(B)(i)(VI). Similarly, Lamparello has not registered “multiple domain names,” 15 U.S.C. § 1125(d)(1)(B)(i)(VIII); rather, the record indicates he
has registered only one. Thus, Lamparello’s conduct is not of the suspect variety
described in factors VI and VIII of the Act.
Notably, the case at hand differs markedly from those in which the courts have found
a bad faith intent to profit from domain names used for websites engaged in political
commentary or parody. For example, in PETA we found the registrant of www.peta.org
engaged in cybersquatting because www.peta.org was one of fifty to sixty domain names
Doughney had registered, PETA, and because Doughney had evidenced a clear intent to
sell www.peta.org to PETA, stating that PETA should try to “‘settle’ with him and ‘make
him an offer.’” Similarly, in Coca-Cola Co. v. Purdy (8th Cir. 2004), the Eighth Circuit
found an anti-abortion activist who had registered domain names incorporating famous
marks such as “Washington Post” liable for cybersquatting because he had registered
almost seventy domain names, had offered to stop using the Washington Post mark if the
newspaper published an opinion piece by him on its editorial page, and posted content that
created a likelihood of confusion as to whether the famous markholders sponsored the antiabortion sites and “ha[d] taken positions on hotly contested issues.” In contrast, Lamparello
did not register multiple domain names, he did not offer to transfer them for valuable
consideration, and he did not create a likelihood of confusion.
Instead, Lamparello, like the plaintiffs in two cases recently decided by the Fifth
and Sixth Circuits, created a gripe site. Both courts expressly refused to find that gripe
sites located at domain names nearly identical to the marks at issue violated the ACPA.
In TMI, Inc. v. Maxwell (5th Cir. 2004), Joseph Maxwell, a customer of homebuilder
TMI, registered the domain name “www.trendmakerhome.com,” which differed by only
one letter from TMI’s mark, TrendMaker Homes, and its domain name, “www
.trendmakerhomes.com.” Maxwell used the site to complain about his experience with
TMI and to list the name of a contractor whose work pleased him. After his registration
expired, Maxwell registered “www.trendmakerhome.info.” TMI then sued, alleging
cybersquatting. The Fifth Circuit reversed the district court’s finding that Maxwell
violated the ACPA, reasoning that his site was noncommercial and designed only “to
inform potential customers about a negative experience with the company.”
Similarly, in Lucas Nursery & Landscaping, a customer of Lucas Nursery
registered the domain name “www.lucasnursery.com” and posted her dissatisfaction with
the company’s landscaping services. Because the registrant, Grosse, like Lamparello,
registered a single domain name, the Sixth Circuit concluded that her conduct did not
constitute that which Congress intended to proscribe—i.e., the registration of multiple
domain names. Lucas Nursery & Landscaping. Noting that Grosse’s gripe site did not

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create any confusion as to sponsorship and that she had never attempted to sell the
domain name to the markholder, the court found that Grosse’s conduct was not actionable
under the ACPA. The court explained: “One of the ACPA’s main objectives is the
protection of consumers from slick internet peddlers who trade on the names and
reputations of established brands. The practice of informing fellow consumers of one’s
experience with a particular service provider is surely not inconsistent with this ideal.”
Like Maxwell and Grosse before him, Lamparello has not evidenced a bad faith
intent to profit under the ACPA. To the contrary, he has used www.fallwell.com to engage
in the type of “comment[] [and] criticism” that Congress specifically stated militates
against a finding of bad faith intent to profit. And he has neither registered multiple domain
names nor attempted to transfer www.fallwell.com for valuable consideration. We agree
with the Fifth and Sixth Circuits that, given these circumstances, the use of a mark in a
domain name for a gripe site criticizing the markholder does not constitute cybersquatting.
IV.
For the foregoing reasons, Lamparello, rather than Reverend Falwell, is entitled to
summary judgment on all counts. Accordingly, the judgment of the district court is
reversed and the case is remanded for entry of judgment for Lamparello.
REVERSED AND REMANDED.
P ROBLEM 9-3
Lamparello is from the 4th Circuit, the same Circuit that decided PETA (excerpted in
Chapter 7). Are the two cases consistent? In your answer you should first offer the
strongest reasons that they are not—listing arguments, decisions on points of law, legal
definitions, or jurisprudential approaches towards trademark that you think make the
two decisions inconsistent, not just as a matter of law, but as a matter of trademark
philosophy. Then you should make the strongest counter arguments. In particular, you
should list the distinguishing features between the two cases that actually show that
the decisions—though one favors plaintiff and one defendant—are consistent. Which
side of the debate do you think is stronger, and why? To the extent you do think
the cases represent diverging views, with which do you agree, and why?
Note: A Trademark Check List
The next page provides you with a check list to review the material we have covered in
trademark. Use it and the flow chart as bookends in your review.

TRADEMARK CHECKLIST
(Highly simplified. Use this to review our coverage of trademark
law and to test your understanding of the doctrine.)
Does the plaintiff own a valid trademark/trade dress?








Is there a “use in commerce”? Planetary Motion
Is it used “as a mark”? Microstrategy
Is it distinctive? Abercrombie (spectrum of distinctiveness); Zatarains (descriptive or
suggestive)
Does it fall into a category that requires acquired distinctiveness (e.g. merely descriptive,
Zatarains, color, Qualitex, design as opposed to packaging, Wal-Mart)? If so, does it have
acquired distinctiveness? § 1052(f)
Is it functional; utilitarian or aesthetic? Functional product features are never protectable.
TrafFix
Does it fall into another category that is never protectable (generic, deceptive, etc.)?
For federal registration of marks, is registration barred by any of the provisions in § 1052
(deceptive marks, names, geographic terms, etc.)? See Chapter 6; note the provisions of
§ 1052 invalidated by Matal and Brunetti. For unregistered marks, § 1125(a), many if not all
of § 1052’s limitations also apply.

Was there confusion-based infringement?




Did the defendant use a similar mark in commerce in connection with goods or services?
Rescuecom, PETA (note: the reasoning in PETA has been disavowed or limited by subsequent
courts)
Was there a likelihood of confusion as to source or sponsorship? Lois, § 1114, § 1125. (note:
some courts consider initial interest confusion and post-sale confusion) Lois; Chapter 7
summary
Did the defendant engage in direct infringement (infringed through their own actions) or
contributory infringement (facilitated someone else’s infringement)? Tiffany

Do any defenses apply?





Was the defendant’s use a classic fair use (aka “descriptive fair use”)? KP Permanent MakeUp, § 1115(b)(4)
Was the defendant’s use a nominative use? New Kids on the Block, Mattel, Playboy
Did the defendant use the trademark in the title of an artistic work? Mattel (applying Rogers)
Was it a successful parody? (Effective parodies diminish likelihood of confusion) Smith

Was there false advertising under § 1125(a)?



Was there a false or misleading statement of fact? Pizza Hut
If it was true but misleading, was there materiality? Pizza Hut

Was there dilution under § 1125(c)?





Was the plaintiff’s mark “famous”? Coach
Was there dilution by blurring? Starbucks
Was there dilution by tarnishment? Smith
Do any exceptions apply? Smith, § 1125(c)(3)(c)

Was there cyberpiracy under § 1125(d)?


Was there a domain name registration with a “bad faith intent to profit”? Lamparello

CHAPTER TEN

Introduction to Copyright:
Theory & History

Imagine that you have to craft a scheme of intellectual property from scratch. Your
subject matter is books. And later music and film. But initially books. What do you do?
What material should the right cover? What material should the right leave free? What
exceptions and limitations should there be? Again we have a resource that—once we get
to a certain technological level—is non-rivalrous and non-excludable. True, the degree
of rivalrousness and excludability will change over time. It is harder to typeset an illicit
edition of Bleak House on a Victorian printing press than to download an epub of Fifty
Shades of Grey from a “warez” site. But you wish to encourage authors (and publishers)
to produce these wonderful objects, and yet make sure they can be read by your fellow
citizens and even built upon by future authors. How do you do so?
Copyright starts with a remarkable and dramatic choice. It does not cover ideas or
unoriginal compilations of fact. When I publish my book, the ideas and facts within it go
immediately into the public domain—no need to wait for my lifetime plus another
seventy years to get them. Copyright covers only the original expression.
When I report on a momentous assassination of a politician, reveal the assassin’s
name and offer the prediction that this may lead to the death of a peace process, copyright
gives me no rights over the facts of the death, or the assassin’s name or the idea that this
may set off national and regional conflict with tragic consequences for those who had
hoped peace was within their grasp. My copyright covers only the way in which those
ideas and facts are expressed.
In the readings that follow, you will find first that neither this idea/expression
dichotomy, nor the drawing of a limited legal right around its contours, seemed obvious
or normal when first introduced. Yet you will also find that it was subsequently woven
into an edifice of remarkable rhetorical force and power.

Copyright and the Invention of Authorship
Excerpt from

James Boyle, Shamans, Software and Spleens: Law
and the Construction of the Information Society
(Harvard University Press, 1997)1

In personal or real property, . . . one can point to a pair of sneakers or a house, say “I
own that,” and have some sense of confidence that the statement means something. As the
LeRoy Fibre case [you probably read the Leroy Fibre case as a 1L—the Supreme Court held
that “the rights of one man in the use of his property cannot be limited by the wrongs of
another”] shows, of course, it is not at all clear that such confidence is justified, but at least
1

Footnotes omitted.

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property presents itself as an apparently coherent feature of social reality, and this is a fact
of considerable ideological and political significance. In intellectual property, the response
to the claim “I own that” might be “what do you mean?”
As Martha Woodmansee discovered, this point was made with startling clarity in
the debates over copyright in Germany in the eighteenth century. Encouraged by an
enormous reading public, several apocryphal tales of writers who were household names,
yet still living in poverty, and a new, more romantic vision of authorship, writers began
to demand greater economic returns from their labors. One obvious strategy was to lobby
for some kind of legal right in the text—the right that we would call copyright. To many
participants in the debate, the idea was ludicrous. Christian Sigmund Krause, writing in
1783, expressed the point pungently.
“But the ideas, the content! that which actually constitutes a book! which
only the author can sell or communicate!”—Once expressed, it is impossible for it to remain the author’s property . . . It is precisely for the purpose of using the ideas that most people buy books—pepper dealers, fishwives, and the like and literary pirates excepted . . . Over and over again
it comes back to the same question: I can read the contents of a book,
learn, abridge, expand, teach, and translate it, write about it, laugh over it,
find fault with it, deride it, use it poorly or well—in short, do with it
whatever I will. But the one thing I should be prohibited from doing is
copying or reprinting it? . . . A published book is a secret divulged. With
what justification would a preacher forbid the printing of his homilies,
since he cannot prevent any of his listeners from transcribing his sermons?
Would it not be just as ludicrous for a professor to demand that his students
refrain from using some new proposition he had taught them as for him to
demand the same of book dealers with regard to a new book? No, no it is
too obvious that the concept of intellectual property is useless. My property must be exclusively mine; I must be able to dispose of it and retrieve
it unconditionally. Let someone explain to me how that is possible in the
present case. Just let someone try taking back the ideas he has originated
once they have been communicated so that they are, as before, nowhere
to be found. All the money in the world could not make that possible.
Along with this problem go two other, more fundamental ones. The first is the
recurrent question of how we can give property rights in intellectual products and yet still
have the inventiveness and free flow of information which liberal social theory demands. I
shall return to this question in a moment. The second problem is the more fundamental one.
On what grounds should we give the author this kind of unprecedented property right at all,
even if the conceptual problems could be overcome? We do not think it is necessary to give
car workers residual property rights in the cars that they produce—wage labor is thought to
work perfectly well. Surely, an author is merely taking public goods—language, ideas,
culture, humor, genre—and converting them to his or her own use? Where is the moral or
utilitarian justification for the existence of this property right in the first place? The most
obvious answer is that authors are special, but why? And since when?
Even the most cursory historical study reveals that our notion of “authorship” is a
concept of relatively recent provenance. Medieval church writers actively disapproved
of the elements of originality and creativeness which we think of as an essential
component of authorship: “They valued extant old books more highly than any recent
elucubrations and they put the work of the scribe and copyist above that of the authors.
The real task of the scholar was not the vain excogitation of novelties but a discovery of

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great old books, their multiplication and the placing of copies where they would be
accessible to future generations of readers.”
Martha Woodmansee quotes a wonderful definition of “Book” from a mid-eighteenth-century dictionary that merely lists the writer as one mouth among many—“the
scholar, . . . the paper-maker, the type-founder and setter, the proof-reader, the publisher
and book-binder, sometimes even the gilder and brass worker”—all of whom are “fed by
this branch of manufacture.” Other studies show that authors seen as craftsmen—an
appellation which Shakespeare might not have rejected—or at their most exalted, as the
crossroads where learned tradition met external divine inspiration. But since the tradition
was mere craft and the glory of the divine inspiration should be offered to God rather than
to the vessel he had chosen, where was the justification for preferential treatment in the
creation of property rights? As authors ceased to think of themselves as either craftsmen,
gentlemen, or amanuenses for the Divine spirit, a recognizably different, more romantic
vision of authorship began to emerge. At first, it was found mainly in self-serving tracts,
but little by little it spread through the culture so that by the middle of the eighteenth century
it had come to be seen as a “universal truth about art.”
Woodmansee explains how the decline of the craft-inspiration model of writing and
the elevation of the romantic author both presented and seemed to solve the question of
property rights in intellectual products: “Eighteenth-century theorists departed from this
compound model of writing in two significant ways. They minimized the element of craftsmanship (in some instances they simply discarded it) in favor of the element of inspiration,
and they internalized the source of that inspiration. That is, inspiration came to be regarded
as emanating not from outside or above, but from within the writer himself. ‘Inspiration’
came to be explicated in terms of original genius with the consequence that the inspired
work was made peculiarly and distinctively the product—and the property—of the writer.”
In this vision, the author was not the journeyman who learned a craft and then
hoped to be well paid for it. The romantic author was defined not by the mastery of a
prior set of rules, but instead by the transformation of genre, the revision of form.
Originality became the watchword of artistry and the warrant for property rights. To see
how complete a revision this is, one need only examine Shakespeare’s wholesale lifting
of plot, scene, and language from other writers, both ancient and contemporary. To an
Elizabethan playwright, the phrase “imitation is the sincerest form of flattery” might have
seemed entirely without irony. “Not only were Englishmen from 1500 to 1625 without
any feeling analogous to the modern attitude toward plagiarism; they even lacked the
word until the very end of that period.” To the theorists and polemicists of romantic
authorship, however, the reproduction of orthodoxy would have been proof they were
not the unique and transcendent spirits they imagined themselves to be.
It is the originality of the author, the novelty which he or she adds to the raw materials
provided by culture and the common pool, which “justifies” the property right and at the
same time offers a strategy for resolving the basic conceptual problem pointed out by
Krause—what concept of property would allow the author to retain some property rights in
the work but not others? In the German debates, the best answer was provided by the great
idealist Fichte. In a manner that is now familiar to lawyers trained in legal realism and
Hohfeldian analysis, but that must have seemed remarkable at the time, Fichte disaggregated
the concept of property in books. The buyer gets the physical thing and the ideas contained
in it. Precisely because the originality of his spirit was converted into an originality of form,
the author retains the right to the form in which those ideas were expressed: “Each writer
must give his own thoughts a certain form, and he can give them no other form than his own
because he has no other. But neither can he be willing to hand over this form in making his

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thoughts public, for no one can appropriate his thoughts without thereby altering their form.
This latter thus remains forever his exclusive property.”
A similar theme is struck in American copyright law. In the famous case of Bleistein
v. Donaldson Lithographing Company, concerning the copyrightability of a circus poster,
Oliver Wendell Holmes was still determined to claim that the work could become the subject
of an intellectual property right because it was the original creation of a unique individual
spirit. Holmes’s opinion shows us both the advantages and the disadvantages of a rhetoric
which bases property rights on “originality.” As a hook on which to hang a property right,
“originality” seems to have at least a promise of formal realizability. It connects nicely to
the romantic vision of authorship which I described earlier and to which I will return. It also
seems to limit a potentially expansive principle, the principle that those who create may be
entitled to retain some legally protected interest in the objects they make—even after those
objects have been conveyed through the marketplace. But while the idea that an original
spirit conveys its uniqueness to worked matter seems intuitively plausible when applied to
Shakespeare or Dante, it has less obvious relevance to a more humdrum act of creation by
a less credibly romantic creator—a commercial artist in a shopping mall, say. The tension
between the rhetoric of Wordsworth and the reality of suburban corporate capitalism is one
that continues to bedevil intellectual property discourse today. In Bleistein, this particular
original spirit had only managed to rough out a picture of energetic-looking individuals
performing unlikely acts on bicycles, but to Holmes the principle was the same. “The copy
is the personal reaction of an individual upon nature. Personality always contains something
unique. It expresses its singularity even in handwriting, and a very modest grade of art has
in it something irreducible, which is one man’s alone. That something he may copyright.”
This quality of “uniqueness,” recognized first in great spirits, then in creative
spirits, and finally in advertising executives, expresses itself in originality of form, of
expression. Earlier I quoted a passage from Jessica Litman which bears repeating here:
“Why is it that copyright does not protect ideas? Some writers have echoed the justification for failing to protect facts by suggesting that ideas have their origin in the public
domain. Others have implied that ‘mere ideas’ may not be worthy of the status of private
property. Some authors have suggested that ideas are not protected because of the
strictures imposed on copyright by the first amendment. The task of distinguishing ideas
from expression in order to explain why private ownership is inappropriate for one but
desirable for the other, however, remains elusive.”
I would say that we find the answer to this question in the romantic vision of
authorship, of the genius whose style forever expresses a single unique persona. The rise
of this powerful (and historically contingent) stereotype provided the necessary raw
material to fashion some convincing mediation of the tension between the imagery of
“public” and “private” in information production.
To sum up, then, if our starting place is the romantic idea of authorship, then the
idea/expression division which has so fascinated and puzzled copyright scholars
apparently manages, at a stroke, to do four things:
• First, it provides a conceptual basis for partial, limited property rights, without
completely collapsing the notion of property into the idea of a temporary,
limited, utilitarian state grant, revocable at will. The property right still seems to
be based on something real—on a distinction which sounds formally realizable,
even if, on closer analysis, it turns out to be impossible to maintain.
• Second, this division provides a moral and philosophical justification for fencing
in the commons, giving the author property in something built from the resources

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of the public domain—language, culture, genre, scientific community, or what
have you. If one makes originality of spirit the assumed feature of authorship and
the touchstone for property rights, one can see the author as creating something
entirely new—not recombining the resources of the commons. Thus we reassure
ourselves both that the grant to the author is justifiable and that it will not have
the effect of diminishing the commons for future creators. After all, if a work of
authorship is original—by definition—we believe that it only adds to our cultural
supply. With originality first defended and then routinely assumed, intellectual
property no longer looks like a zero sum game. There is always “enough and as
good” left over—by definition. The distinguished intellectual property scholar
Paul Goldstein captures both the power and the inevitable limitations of this view
very well. “Copyright, in a word, is about authorship. Copyright is about
sustaining the conditions of creativity that enable an individual to craft out of thin
air an Appalachian Spring, a The Sun Also Rises, a Citizen Kane.” But of course,
even these—remarkable and “original”—works are not crafted out of thin air. As
Northrop Frye put it in 1957, when Michel Foucault’s work on authorship was
only a gleam in the eye of the episteme, “Poetry can only be made out of other
poems; novels out of other novels. All of this was much clearer before the
assimilation of literature to private enterprise.”
• Third, the idea/expression division circumscribes the ambit of a labor theory
of property. At times, it seems that the argument is almost like Locke’s labor
theory; one gains property by mixing one’s labor with an object. But where
Locke’s theory, if applied to a modern economy, might have a disturbingly
socialist ring to it, Fichte’s theory bases the property right on the originality of
every spirit as expressed through words. Every author gets the right—the
writer of the roman à clef as well as Goethe—but because of the concentration
on originality of expression, the residual property right is only for the workers
of the word and the image, not the workers of the world. Even after that right
is extended by analogy to sculpture and painting, software and music, it will
still have an attractively circumscribed domain.
• Fourth, the idea/expression division resolves (or at least conceals) the tension
between public and private. In the double life which Marx described, information
is both the life blood of the noble disinterested citizens of the public world and a
commodity in the private sphere to which we must attach property rights if we
wish our self-interested producers to continue to produce. By disaggregating the
book into “idea” and “expression,” we can give the idea (and the facts on which
it is based) to the public world and the expression to the writer, thus apparently
mediating the contradiction between public good and private need (or greed).
Thus the combination of the romantic vision of authorship and the distinction
between idea and expression appeared to provide a conceptual basis and a moral
justification for intellectual property, to do so in a way which did not threaten to spread
dangerous notions of entitlement to other kinds of workers, and to mediate the tension
between the halves of the liberal world view. Small wonder that it was a success.
Questions:
1.) Reread the indented quote from Krause. What does he assume that the property right
in a book would have to cover? And what does he assume about the “reach” of the right?
How absolute or total does he assume that property right would have to be in order to be

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coherent? Why does he say such a right would be impossible?
2.) What does he mean when he says “It is precisely for the purpose of using the ideas
that most people buy books—pepper dealers, fishwives, and the like and literary pirates
excepted”?
3.) Boyle sets up a checklist of functions that any theory of copyright has to fulfill: The
two most important are to explain how the author gets to own something she drew in part
from the public domain, and to explain how this particular property right balances
property with freedom of expression (think of the framings we discussed in Chapter 1).
How does the idea of a limited property right drawn around the idea-expression
dichotomy fulfill those tasks?
4.) Do current artists and critics believe that the mark of an artist, the measurement of her
worth, is above all her originality? Does the public? Compare our view of soap operas,
formula action movies and high culture novels or movies. Would Shakespeare have agreed
with our implicit aesthetic criteria?

Three Views of Copyright (and the droits d’auteur)
One approach to the background theory of copyright is to give you excerpts from
the writings of philosophers or property theorists. We would be the last people to deprecate
such an approach: one of us has just engaged in it. But we have taken a different tack here.
In the excerpts that follow we have tried to give you a snapshot of the actual political
debates over copyright. This was a battle of ideas, make no mistake about that. But it was
a battle of ideas that had to be changed into the coin of the day, that had to be cashed out
in language that legislators and citizens could understand and appreciate. We have taken
a series of snippets drawn from writers with very different views—Macaulay (whom you
have already encountered), Victor Hugo, and Samuel Clemens (Mark Twain.) The topics
they are discussing will be familiar to you—free expression, term extension, access to
culture—but we want you to focus more on their premises. What is copyright for? How
should it be judged? What balance—if any—should it strike between authors, readers and
future creators? How does its split between idea and expression play in that discussion?
When is access to the idea not sufficient, so that one needs access to the actual expression?

Thomas Babington Macaulay,
First Speech to the House of Commons on Copyright

February 5, 1841

It is painful to me to take a course which may possibly be misunderstood or
misrepresented as unfriendly to the interests of literature and literary men. It is painful to
me, I will add, to oppose my honorable and learned friend on a question which he has
taken up from the purest motives, and which he regards with a parental interest. These
feelings have hitherto kept me silent when the law of copyright has been under
discussion. But as I am, on full consideration, satisfied that the measure before us will,
if adopted, inflict grievous injury on the public, without conferring any compensating
advantage on men of letters, I think it my duty to avow that opinion and to defend it.

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The first thing to be done, Sir, is to settle on what principles the question is to be
argued. Are we free to legislate for the public good, or are we not? Is this a question of
expediency, or is it a question of right? Many of those who have written and petitioned
against the existing state of things treat the question as one of right. The law of nature,
according to them, gives to every man a sacred and indefeasible property in his own
ideas, in the fruits of his own reason and imagination. The legislature has indeed the
power to take away this property, just as it has the power to pass an act of attainder for
cutting off an innocent man’s head without a trial. But, as such an act of attainder would
be legal murder, so would an act invading the right of an author to his copy be, according
to these gentlemen, legal robbery.
Now, Sir, if this be so, let justice be done, cost what it may. I am not prepared, like
my honorable and learned friend, to agree to a compromise between right and expediency,
and to commit an injustice for the public convenience. But I must say, that his theory soars
far beyond the reach of my faculties. It is not necessary to go, on the present occasion, into
a metaphysical inquiry about the origin of the right of property; and certainly nothing but
the strongest necessity would lead me to discuss a subject so likely to be distasteful to the
House. I agree, I own, with Paley in thinking that property is the creature of the law, and
that the law which creates property can be defended only on this ground, that it is a law
beneficial to mankind. But it is unnecessary to debate that point. For, even if I believed in a
natural right of property, independent of utility and anterior to legislation, I should still deny
that this right could survive the original proprietor. . . . Surely, Sir, even those who hold that
there is a natural right of property must admit that rules prescribing the manner in which the
effects of deceased persons shall be distributed are purely arbitrary, and originate altogether
in the will of the legislature. If so, Sir, there is no controversy between my honorable and
learned friend and myself as to the principles on which this question is to be argued. For the
existing law gives an author copyright during his natural life; nor do I propose to invade that
privilege, which I should, on the contrary, be prepared to defend strenuously against any
assailant. The only point in issue between us is, how long after an author’s death the state
shall recognize a copyright in his representatives and assigns; and it can, I think, hardly be
disputed by any rational man that this is a point which the legislature is free to determine in
the way which may appear to be most conducive to the general good.
We may now, therefore, I think, descend from these high regions, where we are in
danger of being lost in the clouds, to firm ground and clear light. Let us look at this question
like legislators, and after fairly balancing conveniences and inconveniences, pronounce
between the existing law of copyright, and the law now proposed to us. The question of
copyright, Sir, like most questions of civil prudence, is neither black nor white, but gray.
The system of copyright has great advantages and great disadvantages; and it is our business
to ascertain what these are, and then to make an arrangement under which the advantages
may be as far as possible secured, and the disadvantages as far as possible excluded. The
charge which I bring against my honorable and learned friend’s bill is this, that it leaves the
advantages nearly what they are at present, and increases the disadvantages at least fourfold.
The advantages arising from a system of copyright are obvious. It is desirable that
we should have a supply of good books; we cannot have such a supply unless men of
letters are liberally remunerated: and the least objectionable way of remunerating them is
by means of copyright. You cannot depend for literary instruction and amusement on the
leisure of men occupied in the pursuits of active life. Such men may occasionally produce
compositions of great merit. But you must not look to such men for works which require
deep meditation and long research. Works of that kind you can expect only from persons
who make literature the business of their lives. Of these persons few will be found among

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the rich and the noble. The rich and the noble are not impelled to intellectual exertion by
necessity. They may be impelled to intellectual exertion by the desire of distinguishing
themselves, or by the desire of benefiting the community. But it is generally within these
walls that they seek to signalize themselves and to serve their fellow-creatures. Both their
ambition and their public spirit, in a country like this, naturally take a political turn. It is
then on men whose profession is literature, and whose private means are not ample, that
you must rely for a supply of valuable books. Such men must be remunerated for their
literary labor. And there are only two ways in which they can be remunerated. One of
those ways is patronage; the other is copyright.
There have been times in which men of letters looked, not to the public, but to the
government, or to a few great men, for the reward of their exertions. It was thus in the
time of Mæcenas and Pollio at Rome, of the Medici at Florence, of Louis the Fourteenth
in France, of Lord Halifax and Lord Oxford in this country. Now, Sir, I well know that
there are cases in which it is fit and graceful, nay, in which it is a sacred duty to reward
the merits or to relieve the distresses of men of genius by the exercise of this species of
liberality. But these cases are exceptions. I can conceive no system more fatal to the
integrity and independence of literary men than one under which they should be taught
to look for their daily bread to the favor of ministers and nobles. I can conceive no system
more certain to turn those minds which are formed by nature to be the blessings and
ornaments of our species into public scandals and pests.
We have, then, only one resource left. We must betake ourselves to copyright, be
the inconveniences of copyright what they may. Those inconveniences, in truth, are
neither few nor small. Copyright is monopoly, and produces all the effects which the
general voice of mankind attributes to monopoly. My honorable and learned friend talks
very contemptuously of those who are led away by the theory that monopoly makes things
dear. That monopoly makes things dear is certainly a theory, as all the great truths which
have been established by the experience of all ages and nations, and which are taken for
granted in all reasonings, may be said to be theories. It is a theory in the same sense in
which it is a theory that day and night follow each other, that lead is heavier than water,
that bread nourishes, that arsenic poisons, that alcohol intoxicates.
If, as my honorable and learned friend seems to think, the whole world is in the
wrong on this point, if the real effect of monopoly is to make articles good and cheap,
why does he stop short in his career of change? Why does he limit the operation of so
salutary a principle to sixty years? Why does he consent to anything short of a perpetuity?
He told us that in consenting to anything short of a perpetuity he was making a
compromise between extreme right and expediency. But if his opinion about monopoly
be correct, extreme right and expediency would coincide. Or rather, why should we not
restore the monopoly of the East India trade to the East India Company? Why should we
not revive all those old monopolies which, in Elizabeth’s reign, galled our fathers so
severely that, maddened by intolerable wrong, they opposed to their sovereign a resistance
before which her haughty spirit quailed for the first and for the last time? Was it the
cheapness and excellence of commodities that then so violently stirred the indignation of
the English people? I believe, Sir, that I may safely take it for granted that the effect of
monopoly generally is to make articles scarce, to make them dear, and to make them bad.
And I may with equal safety challenge my honorable friend to find out any distinction
between copyright and other privileges of the same kind; any reason why a monopoly of
books should produce an effect directly the reverse of that which was produced by the
East India Company’s monopoly of tea, or by Lord Essex’s monopoly of sweet wines.
Thus, then, stands the case. It is good that authors should be remunerated; and the least

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exceptionable way of remunerating them is by a monopoly. Yet monopoly is an evil. For
the sake of the good we must submit to the evil; but the evil ought not to last a day longer
than is necessary for the purpose of securing the good.
Now, I will not affirm that the existing law is perfect, that it exactly hits the point at
which the monopoly ought to cease; but this I confidently say, that the existing law is very
much nearer that point than the law proposed by my honorable and learned friend. For
consider this; the evil effects of the monopoly are proportioned to the length of its duration.
But the good effects for the sake of which we bear with the evil effects are by no means
proportioned to the length of its duration. A monopoly of sixty years produces twice as much
evil as a monopoly of thirty years, and thrice as much evil as a monopoly of twenty years.
But it is by no means the fact that a posthumous monopoly of sixty years gives to an author
thrice as much pleasure and thrice as strong a motive as a posthumous monopoly of twenty
years. On the contrary, the difference is so small as to be hardly perceptible. We all know
how faintly we are affected by the prospect of very distant advantages, even when they are
advantages which we may reasonably hope that we shall ourselves enjoy. But an advantage
that is to be enjoyed more than half a century after we are dead, by somebody, we know not
by whom, perhaps by somebody unborn, by somebody utterly unconnected with us, is really
no motive at all to action. It is very probable that in the course of some generations land in
the unexplored and unmapped heart of the Australasian continent will be very valuable. But
there is none of us who would lay down five pounds for a whole province in the heart of the
Australasian continent. We know, that neither we, nor anybody for whom we care, will ever
receive a farthing of rent from such a province. And a man is very little moved by the thought
that in the year 2000 or 2100, somebody who claims through him will employ more
shepherds than Prince Esterhazy, and will have the finest house and gallery of pictures at
Victoria or Sydney. Now, this is the sort of boon which my honorable and learned friend
holds out to authors. Considered as a boon to them, it is a mere nullity; but considered as an
impost on the public, it is no nullity, but a very serious and pernicious reality.
The principle of copyright is this. It is a tax on readers for the purpose of giving a
bounty to writers. The tax is an exceedingly bad one; it is a tax on one of the most innocent
and most salutary of human pleasures; and never let us forget, that a tax on innocent pleasures is a premium on vicious pleasures. I admit, however, the necessity of giving a bounty
to genius and learning. In order to give such a bounty, I willingly submit even to this
severe and burdensome tax. Nay, I am ready to increase the tax, if it can be shown that by
so doing I should proportionally increase the bounty. My complaint is, that my honorable
and learned friend doubles, triples, quadruples, the tax, and makes scarcely any
perceptible addition to the bounty. Why, Sir, what is the additional amount of taxation
which would have been levied on the public for Dr. Johnson’s works alone, if my
honorable and learned friend’s bill had been the law of the land? I have not data sufficient
to form an opinion. But I am confident that the taxation on his dictionary alone would
have amounted to many thousands of pounds. In reckoning the whole additional sum
which the holders of his copyrights would have taken out of the pockets of the public
during the last half century at twenty thousand pounds, I feel satisfied that I very greatly
underrate it. Now, I again say that I think it but fair that we should pay twenty thousand
pounds in consideration of twenty thousand pounds’ worth of pleasure and encouragement
received by Dr. Johnson. But I think it very hard that we should pay twenty thousand
pounds for what he would not have valued at five shillings. . . .
But this is not all. I think it right, Sir, to call the attention of the House to an evil,
which is perhaps more to be apprehended when an author’s copyright remains in the hands
of his family, than when it is transferred to booksellers. I seriously fear that, if such a

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measure as this should be adopted, many valuable works will be either totally suppressed
or grievously mutilated. I can prove that this danger is not chimerical; and I am quite certain
that, if the danger be real, the safeguards which my honorable and learned friend has
devised are altogether nugatory. That the danger is not chimerical may easily be shown.
Most of us, I am sure, have known persons who, very erroneously as I think, but from the
best motives, would not choose to reprint Fielding’s novels or Gibbon’s “History of the
Decline and Fall of the Roman Empire.” Some gentlemen may perhaps be of opinion that
it would be as well if “Tom Jones” and Gibbon’s “History” were never reprinted. I will not,
then, dwell on these or similar cases. I will take cases respecting which it is not likely that
there will be any difference of opinion here; cases, too, in which the danger of which I now
speak is not matter of supposition, but matter of fact.
Take Richardson’s novels. Whatever I may, on the present occasion, think of my
honorable and learned friend’s judgment as a legislator, I must always respect his
judgment as a critic. He will, I am sure, say that Richardson’s novels are among the most
valuable, among the most original, works in our language. No writings have done more
to raise the fame of English genius in foreign countries. No writings are more deeply
pathetic. No writings, those of Shakespeare excepted, show more profound knowledge of
the human heart. . . . Sir, it is my firm belief, that if the law had been what my honorable
and learned friend proposes to make it, they would have been suppressed.
I remember Richardson’s grandson well; he was a clergyman in the city of London;
he was a most upright and excellent man; but he had conceived a strong prejudice against
works of fiction. He thought all novel-reading not only frivolous but sinful. He said,—
this I state on the authority of one of his clerical brethren who is now a bishop,—he said
that he had never thought it right to read one of his grandfather’s books. Suppose, Sir,
that the law had been what my honorable and learned friend would make it. Suppose that
the copyright of Richardson’s novels had descended, as might well have been the case,
to this gentleman. I firmly believe that he would have thought it sinful to give them a
wide circulation. I firmly believe that he would not for a hundred thousand pounds have
deliberately done what he thought sinful. He would not have reprinted them.
And what protection does my honorable and learned friend give to the public in
such a case? Why, Sir, what he proposes is this: if a book is not reprinted during five years,
any person who wishes to reprint it may give notice in the London Gazette: the advertisement must be repeated three times: a year must elapse; and then, if the proprietor of the
copyright does not put forth a new edition, he loses his exclusive privilege. Now, what
protection is this to the public? What is a new edition? Does the law define the number of
copies that make an edition? Does it limit the price of a copy? Are twelve copies on large
paper, charged at thirty guineas each, an edition? It has been usual, when monopolies have
been granted, to prescribe numbers and to limit prices. But I do not find that my honorable
and learned friend proposes to do so in the present case. And, without some such
provision, the security which he offers is manifestly illusory. It is my conviction that,
under such a system as that which he recommends to us, a copy of “Clarissa” would have
been as rare as an Aldus or a Caxton.
I will give another instance. One of the most instructive, interesting, and delightful
books in our language is Boswell’s “Life of Johnson.’’ Now it is well known that
Boswell’s eldest son considered this book, considered the whole relation of Boswell to
Johnson, as a blot in the escutcheon of the family. He thought, not perhaps altogether
without reason, that his father had exhibited himself in a ludicrous and degrading light.
And thus he became so sore and irritable that at last he could not bear to hear the “Life
of Johnson’’ mentioned. Suppose that the law had been what my honorable and learned

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friend wishes to make it. Suppose that the copyright of Boswells “Life of Johnson” had
belonged, as it well might, during sixty years, to Boswell’s eldest son. What would have
been the consequence? An unadulterated copy of the finest biographical work in the
world would have been as scarce as the first edition of Camden’s “Britannia.”
. . . Sir, of the kindness with which the House has listened to me, that I will not
detain you longer. I will only say this, that if the measure before us should pass, and
should produce one tenth part of the evil which it is calculated to produce, and which I
fully expect it to produce, there will soon be a remedy, though of a very objectionable
kind. Just as the absurd Acts which prohibited the sale of game were virtually repealed
by the poacher, just as many absurd revenue Acts have been virtually repealed by the
smuggler, so will this law be virtually repealed by piratical booksellers.
At present the holder of copyright has the public feeling on his side. Those who
invade copyright are regarded as knaves who take the bread out of the mouths of deserving
men. Everybody is well pleased to see them restrained by the law, and compelled to refund
their ill-gotten gains. No tradesman of good repute will have anything to do with such
disgraceful transactions. Pass this law: and that feeling is at an end. Men very different
from the present race of piratical booksellers will soon infringe this intolerable monopoly.
Great masses of capital will be constantly employed in the violation of the law. Every art
will be employed to evade legal pursuit; and the whole nation will be in the plot. On which
side indeed should the public sympathy be when the question is whether some book as
popular as “Robinson Crusoe” or the “Pilgrim’s Progress” shall be in every cottage, or
whether it shall be confined to the libraries of the rich for the advantage of the greatgrandson of a bookseller who, a hundred years before, drove a hard bargain for the
copyright with the author when in great distress? Remember too that, when once it ceases
to be considered as wrong and discreditable to invade literary property, no person can say
where the invasion will stop. The public seldom makes nice distinctions. The wholesome
copyright which now exists will share in the disgrace and danger of the new copyright
which you are about to create. And you will find that, in attempting to impose unreasonable
restraints on the reprinting of the works of the dead, you have, to a great extent, annulled
those restraints which now prevent men from pillaging and defrauding the living.
Questions:
1.) How does Macaulay link possible private censorship and inherited interests in
copyright? Why do these same concerns not arise with the author’s original private right
to control reproduction?
2.) Is copyright a matter of right or a matter of utility for Macaulay?
3.) Why does he think copyright superior to patronage as a method of encouraging
literary production? What would he think of crowdsourcing sites such as Kickstarter?
4.) What would he think of our current copyright system?
5.) The Bill he was discussing dealt with the possibility that publishers might “sit on
their rights” and that works would become commercially unavailable, subverting
copyright’s goal of access. What mechanism did the Bill have to avoid that danger?
Would it be a good idea for us to have such a mechanism today?
6.) Ever read Richardson’s novels? Hmm.

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Victor Hugo, Speech to the Congress of
Literary, Industrial and Artistic Property
Paris, 18782

Literary property is of general utility.
All the old monarchical laws denied and still deny literary property. For what
purpose? For the purpose of control. The writer-owner is a free writer. To take his
property, is to take away his independence. One wishes that it were not so. [That is the
danger in] the remarkable fallacy, which would be childish if it were not so perfidious,
“thought belongs to everyone, so it cannot be property, so literary property does not
exist.” What a strange confusion! First, to confuse the ability to think, which is general,
with the thought, which is individual; my thought is me. Then, to confuse thought, an
abstract thing, with the book, a material thing. The thought of the writer, as thought,
evades the grasping hand. It flies from soul to soul; it has this gift and this force—virum
volitare per ora—that it is everywhere on the lips of men. But the book is distinct from
thought; as a book, it is “seizable,” so much so that it is sometimes “seized.” [illicitly
copied, but also impounded, censored.] (Laughter.)
The book, a product of printing, belongs to industry and is the foundation, in all its
forms, of a large commercial enterprise. It is bought and sold; it is a form of property, a
value created, uncompensated, riches added by the writer to the national wealth. Indeed
all must agree, this is the most compelling form of property.
Despotic governments violate this property right; they confiscate the book, hoping
thus to confiscate the writer. Hence the system of royal pensions. [Pensions for writers, in
the place of author’s rights.] Take away everything and give back a pittance! This is the
attempt to dispossess and to subjugate the writer. One steals, and then one buys back a
fragment of what one has stolen. It is a wasted effort, however. The writer always escapes.
We became poor, he remains free. (Applause.) Who could buy these great minds, Rabelais,
Molière, Pascal? But the attempt is nonetheless made, and the result is dismal. Monarchic
patronage drains the vital forces of the nation. Historians give Kings the title the “father of
the nation” and “fathers of letters”; . . . the result? These two sinister facts: the people
without bread, Corneille [the great French author] without shoes. (Long applause).
Gentlemen, let us return to the basic principle: respect for property. Create a system
of literary property, but at the same time, create the public domain! Let us go further. Let
us expand the idea. The law could give to all publishers the right to publish any book
after the death of the author, the only requirement would be to pay the direct heirs a very
low fee, which in no case would exceed five or ten percent of the net profit. This simple
system, which combines the unquestionable property of the writer with the equally
incontestable right of the public domain was suggested by the 1836 commission [on the
rights of authors]; and you can find this solution, with all its details, in the minutes of the
board, then published by the Ministry of the Interior.
The principle is twofold, do not forget. The book, as a book, is owned by the author,
but as a thought, it is owned, it belongs—the word is not too extreme—to the human
2

This is our own translation and it is a free one—one that tries to convey the impact that Hugo’s powerful,
soaring rhetoric would have had to a contemporary French audience, rather than translating literally, word
for word. French has its own rhythms and stylistic flourishes; a mixture of passion and formality that can
seem odd to the English ear—we have tried to give a sense of those, and probably failed. All the emphases
in the text are ours. His are not recorded.

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race. All intelligences, all minds, are eligible, all own it. If one of these two rights, the
right of the writer and the right of the human mind, were to be sacrificed, it would
certainly be the right of the writer, because the public interest is our only concern, and
that must take precedence in anything that comes before us. [Numerous sounds of
approval.] But, as I just said, this sacrifice is not necessary.
••••••••••
Notes
Hugo was a fabulous—inspiring, passionate—proponent of the rights of authors, and
the connection of those rights to free expression and free ideas. He went beyond giving
speeches to play a serious role in setting up the current international copyright system. He
is held out today as the ultimate proponent of the droits d’auteur—the person who said (and
he did) that the author’s right was the most sacred form of property: unlike other property
rights it impoverished no one, because it was over something that was entirely new. (Think
of Locke and his point that all property took from the common store. Not so with copyright,
said Hugo.) But Hugo was a more subtle thinker than that, as this passage shows.

Questions:
1.) Could Hugo and Macaulay come to agreement?
2.) Hugo calls on the delegates to the Conference (who were to offer suggestions on a
new Copyright Bill) to create, or found, a system of literary property but at the same time
to create the public domain. How?
3.) Does Hugo think that the public’s interest in access is satisfied by the free availability
of ideas alone, or does he also want the public to have access to the expression?
4.) In Golan Justice Ginsburg said:
As petitioners put it in this Court, Congress impermissibly revoked their
right to exploit foreign works that “belonged to them” once the works
were in the public domain. To copyright lawyers, the “vested rights” formulation might sound exactly backwards: Rights typically vest at the
outset of copyright protection, in an author or rightholder. See, e.g., 17
U.S.C. § 201(a) (“Copyright in a work protected . . . vests initially in the
author. . . .”). Once the term of protection ends, the works do not revest in
any rightholder. Instead, the works simply lapse into the public domain.
See, e.g., Berne, Art. 18(1), 828 U.N.T.S., at 251 (“This Convention shall
apply to all works which . . . have not yet fallen into the public domain. . . .”). Anyone has free access to the public domain, but no one, after
the copyright term has expired, acquires ownership rights in the onceprotected works.
Would Hugo agree?

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Samuel L. Clemens [Mark Twain], Statement before
the Committee of Patents of the Senate and House
to discuss amending the Copyright Act

June 1906

Mr. Clemens. I have read the bill. At least I have read such portions of it as I could
understand; and indeed I think no one but a practiced legislator can read the bill and
thoroughly understand it, and I am not a practiced legislator. I have had no practice at all
in unraveling confused propositions or bills. Not that this is more confused than any other
bill. I suppose they are all confused. It is natural that they should be, in a legal paper of
that kind, as I understand it. Nobody can understand a legal paper, merely on account of
the language that is in it. It is on account of the language that is in it that no one can
understand it except an expert.
Necessarily I am interested particularly and especially in the part of the bill which
concerns my trade. I like that bill, and I like that extension from the present limit of
copyright life of forty-two years to the author’s life and fifty years after. I think that will
satisfy any reasonable author, because it will take care of his children. Let the grandchildren
take care of themselves. “Sufficient unto the day.” That would satisfy me very well. That
would take care of my daughters, and after that I am not particular. I shall then long have
been out of this struggle and independent of it. Indeed, I like the whole bill. It is not
objectionable to me. Like all the trades and occupations of the United States, ours is
represented and protected in that bill. I like it. I want them to be represented and protected
and encouraged. They are all worthy, all important, and if we can take them under our wing
by copyright, I would like to see it done. I should like to have you encourage oyster culture
and anything else. I have no illiberal feeling toward the bill. I like it. I think it is just. I think
it is righteous, and I hope it will pass without reduction or amendment of any kind.
I understand, I am aware, that copyright must have a term, must have a limit, because
that is required by the Constitution of the United States, which sets aside the earlier
constitution, which we call the Decalogue. The Decalogue says that you shall not take away
from any man his property. I do not like to use the harsher term, “Thou shalt not steal.”
But the laws of England and America do take away property from the owner. They
select out the people who create the literature of the land. Always talk handsomely about
the literature of the land. Always say what a fine, a great monumental thing a great
literature is. In the midst of their enthusiasm they turn around and do what they can to
crush it, discourage it, and put it out of existence. I know that we must have that limit.
But forty-two years is too much of a limit. I do not know why there should be a limit at
all. I am quite unable to guess why there should be a limit to the possession of the product
of a man’s labor. There is no limit to real estate. As Doctor Hale has just suggested, you
might just as well, after you had discovered a coal mine and worked it twenty-eight years,
have the Government step in and take it away—under what pretext?
The excuse for a limited copyright in the United States is that an author who has
produced a book and has had the benefit of it for that term has had the profit of it long
enough, and therefore the Government takes the property, which does not belong to it,
and generously gives it to the eighty-eight millions. That is the idea. If it did that, that
would be one thing. But it does not do anything of the kind. It merely takes the author’s
property, merely takes from his children the bread and profit of that book, and gives the
publisher double profit. The publisher, and some of his confederates who are in the
conspiracy, rear families in affluence, and they continue the enjoyment of these ill-gotten

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gains generation after generation. They live forever, the publishers do.
As I say, this limit is quite satisfactory to me—for the author’s life, and fifty years
after. In a few weeks, or months, or years I shall be out of it. I hope to get a monument.
I hope I shall not be entirely forgotten. I shall subscribe to the monument myself. But I
shall not be caring what happens if there is fifty years’ life of my copyright. My
copyrights produce to me annually a good deal more money than I have any use for. But
those children of mine have use for that. I can take care of myself as long as I live. I
know half a dozen trades, and I can invent a half a dozen more. I can get along. But I like
the fifty years’ extension, because that benefits my two daughters, who are not as
competent to earn a living as I am, because I have carefully raised them as young ladies,
who don’t know anything and can’t do anything. So I hope Congress will extend to them
that charity which they have failed to get from me.
Why, if a man who is mad—not mad, but merely strenuous—about race suicide
should come to me and try to get me to use my large political or ecclesiastical influence for
the passage of a bill by this Congress limiting families to 22 children by one mother, I should
try to calm him down. I should reason with him. I should say to him, “That is the very
parallel to the copyright limitation by statute. Leave it alone. Leave it alone and it will take
care of itself.” There is only one couple in the United States that can reach that limit. Now,
if they reach that limit let them go on. Make the limit a thousand years. Let them have all
the liberty they want. You are not going to hurt anybody in that way. Don’t cripple that
family and restrict it to 22 children. In doing so you are merely offering this opportunity for
activity to one family per year in a nation of eighty millions. It is not worth the while at all.
The very same with copyright. One author per year produces a book which can
outlive the forty-two year limit, and that is all. This nation can not produce two authors
per year who can create a book that will outlast forty-two years. The thing is demonstrably
impossible. It can not be done. To limit copyright is to take the bread out of the mouths of
the children of that one author per year, decade, century in and century out. That is all you
get out of limiting copyright.
I made an estimate once when I was to be called before the copyright committee
of the House of Lords, as to the output of books, and by my estimate we had issued and
published in this country since the Declaration of Independence 220,000 books. What
was the use of protecting those books by copyright? They are all gone. They had all
perished before they were 10 years old. There is only about one book in a thousand that
can outlive forty-two years of copyright. Therefore why put a limit at all? You might just
as well limit a family to 22. It will take care of itself. If you try to recall to your minds
the number of men in the nineteenth century who wrote books in America which books
lived forty-two years you will begin with Fennimore Cooper, follow that with
Washington Irving, Harriet Beecher Stowe, and Edgar A. Poe, and you will not go far
until you begin to find that the list is limited.
You come to Whittier and Holmes and Emerson, and you find Howells and Thomas
Bailey Aldrich, and then the list gets pretty thin and you question if you can find 20
persons in the United States in a whole century who have produced books that could
outlive or did outlive the forty-two year limit. You can take all the authors in the United
States whose books have outlived the forty-two year limit and you can seat them on one
bench there. Allow three children to each of them, and you certainly can put the result
down at 100 persons. Add two or three more benches. You have plenty of room left. That
is the limit of the insignificant number whose bread and butter are to be taken away. For
what purpose? For what profit to anybody? Nobody can tell what that profit is. It is only
those books that will outlast the forty-two-year limit that have any value after ten or fifteen

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years. The rest are all dead. Then you turn those few books into the hands of the pirate—
into the hands of the legitimate publisher—and they go on, and they get the profit that
properly should have gone to wife and children. I do not think that is quite right. I told
you what the idea was in this country for a limited copyright.
The English idea of copyright, as I found, was different, when I was before the
committee of the House of Lords, composed of seven members I should say. The
spokesman was a very able man, Lord Thring, a man of great reputation, but he didn’t
know anything about copyright and publishing. Naturally he didn’t, because he hadn’t
been brought up to this trade. It is only people who have had intimate personal experience
with the triumphs and griefs of an occupation who know how to treat it and get what is
justly due.
Now that gentleman had no purpose or desire in the world to rob anybody or
anything, but this was the proposition—fifty years’ extension—and he asked me what I
thought the limit of copyright ought to be.
“Well,” I said, “perpetuity.” I thought it ought to last forever.
Well, he didn’t like that idea very much. I could see some resentment in his manner,
and he went on to say that the idea of a perpetual copyright was illogical, and so forth,
and so on. And here was his reason—for the reason that it has long ago been decided that
ideas are not property, that there can be no such thing as property in ideas. . . . That there
could be no such thing as property in an intangible idea. He said, “What is a book? A book
is just built from base to roof with ideas, and there can be no property in them.” I said I
wished he could mention any kind of property existing on this planet, property that had a
pecuniary value, which was not derived from an idea or ideas.
“Well,” he said, “landed estate—real estate.”
“Why,” I said, “Take an assumed case, of a dozen Englishmen traveling through
the South—Africa—they camp out; eleven of them see nothing at all; they are mentally
blind. But there is one in the party who knows what that harbor means, what this lay of
the land means; to “him it means that some day—you can not tell when—a railway will
come through here, and there on that harbor a great city will spring up. That is his idea.
And he has another idea, which is to get a trade, and so, perhaps, he sacrifices his last
bottle of Scotch whisky and gives a horse blanket to the principal chief of that region and
buys a piece of land the size of Pennsylvania. There is the value of an idea applied to real
estate. That day will come, as it was to come when the Cape-to-Cairo Railway should
pierce Africa and cities should be built, though there was some smart person who bought
the land from the chief and received his everlasting gratitude, just as was the case with
William Penn, who bought for $40 worth of stuff the area of Pennsylvania. He did a
righteous thing. We have to be enthusiastic over it, because that was a thing that never
happened before probably. There was the application of an idea to real estate. Every
improvement that is put upon real estate is the result of an idea in somebody’s head. A
skyscraper is another idea. The railway was another idea. The telephone and all those
things are merely symbols which represent ideas. The washtub was the result of an idea.
The thing hadn’t existed before. There is no property on this earth that does not derive
pecuniary value from ideas and association of ideas applied and applied and applied
again and again and again, as in the case of the steam engine. You have several hundred
people contributing their ideas to the improvement and the final perfection of that great
thing, whatever it is—telephone, telegraph, and all.”
So if I could have convinced that gentleman that a book which does consist solely
of ideas, from the base to the summit, then that would have been the best argument in the
world that it is property, like any other property, and should not be put under the ban of

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any restriction, but that it should be the property of that man and his heirs forever and
ever, just as a butcher shop would be, or—I don’t care—anything, I don’t care what it is.
It all has the same basis. The law should recognize the right of perpetuity in this and
every other kind of property. But for this property I do not ask that at all. Fifty years from
now I shall not be here. I am sorry, but I shall not be here. Still, I should like to see it.
Of course we have to move by slow stages. When a great event happens in this
world, like that of 1714, [sic] under Queen Anne, it stops everything, but still, all the
world imagines there was an element of justice in that act. They do not know why they
imagine it, but it is because somebody else has said so. And that process must continue
until our day, and keep constantly progressing on and on. First twenty-eight years was
added, and then a renewal for fourteen years; and then you encountered Lord Macaulay,
who made a speech on copyright when it was going to achieve a life of sixty years which
reduced it to forty years—a speech that was read all over the world by everybody who
does not know that Lord Macaulay did not know what he was talking about. So he
inflicted this disaster upon his successors in the authorship of books. It has to undergo
regular and slow development—evolution.
Here is this bill, one instance of it. Make the limit the author’s life and fifty years
after, and, as I say, fifty years from now they will see that that has not convulsed the
world at all. It has not destroyed any San Francisco. No earthquakes concealed in it
anywhere. It has changed nobody. It has merely fed some starving author’s children. Mrs.
Stowe’s [Harriet Beacher Stowe, author of Uncle Tom’s Cabin] two daughters were close
neighbors of mine, and—well, they had their living very much limited. . . .
I say again, as I said in the beginning, I have no enmities, no animosities toward
this bill. This bill is plenty righteous enough for me. I like to see all these industries and
arts propagated and encouraged by this bill. This bill will do that, and I do hope that it will
pass and have no deleterious effect. I do seem to have an extraordinary interest in a whole
lot of arts and things. The bill is full of those that I have nothing to do with. But that is in
line with my generous, liberal nature. I can’t help it. I feel toward those same people the
same sort of charity of the man who arrived at home at 2 o’clock in the morning from the
club. He was feeling perfect satisfaction with life—was happy, was comfortable. There
was his house weaving and weaving and weaving around. So he watched his chance, and
by and by when the steps got in his neighborhood he made a jump and he climbed up on
the portico. The house went on weaving. He watched his door, and when it came around
his way he climbed through it. He got to the stairs, went up on all fours. The house was
so unsteady he could hardly make his way, but at last he got up and put his foot down on
the top step, but his toe hitched on that step, and of course he crumpled all down and rolled
all the way down the stairs and fetched up at the bottom with his arm around the newel
post, and he said, “God pity a poor sailor out at sea on a night like this.”
The committee adjourned until 10 o’clock a.m. tomorrow.
••••••••••
Notes
Samuel Clemens gives a robust argument for perpetual copyright—for the idea that
the book is the author’s, not by utilitarian privilege but by right—and he neatly flips
today’s assumptions about term extension on their heads. But he is also hilariously
cynical, perhaps mindful of the fact that the legislators to whom his words are addressed
might be familiar with his prior pronouncements about both them and the law they were
considering. “It could probably be shown by facts and figures that there is no distinctly

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native American criminal class except Congress.” “Whenever a copyright law is to be
made or altered, then the idiots assemble.” “Only one thing is impossible for God: to find
any sense in any copyright law on the planet.” He is particularly pointed in attacking the
compromises with which any copyright bill is loaded—the special provisions that gave
American printers special rights to print the books (and thus the unions a strong barrier
against foreign competition), that gave libraries certain privileges, indeed that allowed the
expiration of copyright at all. All these compromises, from his point of view, are simply
takings from authors for the benefit of activities that have little or nothing to do with their
art. He even waxes a little absurdist about it. “Like all the trades and occupations of the
United States, ours [that of the actual author] is represented and protected in that bill. I
like it. I want them to be represented and protected and encouraged. They are all worthy,
all important, and if we can take them under our wing by copyright, I would like to see it
done. I should like to have you encourage oyster culture and anything else. . . . I do seem
to have an extraordinary interest in a whole lot of arts and things. The bill is full of those
that I have nothing to do with. But that is in line with my generous, liberal nature.” The
committee members, eager to shower other celebrities such as John Philip Sousa with
questions, offered none after his remarks. Clemens was an old lion—he speaks of his own
awareness of mortality in his remarks, and he in fact had only four more years to live—
but he still had teeth and a savaging by him might have ended up on the front page of The
New York Times. And so after his remarks . . . the committee quietly adjourned.

Questions:
1.) Clemens has obviously read Macaulay. On what do they disagree?
2.) He argues that taking away his copyright is as unjust as the government taking away
his mine after a certain period of time, saying he had already reaped enough benefit from
it. Do you agree? What differences do you see? How would Jefferson and Macaulay
respond? Would Hugo agree?
3.) Clemens argues that there would be no real negative effects of term extension because
he notes (correctly) that very, very few works retain any commercial value after 42 years.
Thus the public loses little, because there are very few works still available for it to buy
for which it will now pay higher prices. He was arguing in this testimony for a “life plus
fifty” system, which did not in fact get enacted until 1976. We now have a “life plus
seventy” system. Is he right that there have been no negative consequences?

Excerpt from

Jennifer Jenkins, In Ambiguous Battle: The
Promise (and Pathos) of Public Domain Day, 2014

12 DUKE L. & TECH. REV. 1 (December 31, 2013)

INTRODUCTION: WHAT STREAMS FEED THE PUBLIC DOMAIN?
In Europe, January 1st, 2014 will be the day when the works of Fats Waller, Nikola
Tesla, Sergei Rachmaninoff, Elinor Glyn, and hundreds of other authors emerge into the

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public domain. In Canada, where the copyright term is shorter, a wealth of material—
including works from W.E.B. Du Bois, Robert Frost, Aldous Huxley, C.S. Lewis, and
Sylvia Plath—will join the realm of free culture.
What is entering the public domain in the United States on January 1? Not a single
published work. Why? In 1998, Congress added twenty years to the copyright term. But this
term extension was not only granted to future works; it was retroactively applied to existing
works. For works created after 1977, the term was extended to life plus 70 years for natural
authors, and to 95 years after publication for works of corporate authorship. For works
published between 1923 and 1977 that were still in copyright, the terms were extended to
95 years from publication, keeping them out of the public domain for an additional 20 years.
The public domain was frozen in time, and artifacts from 1923 won’t enter it until 2019.
The Supreme Court rejected a challenge to this retroactive term extension in 2003.
Deferring substantially to Congress, the Court held that the law did not violate the
constitutional requirement that copyrights last for “limited Times.” In addition, the Court
declined to apply heightened First Amendment scrutiny, rejecting the petitioners’ argument
that term extension unconstitutionally restricted the public’s ability to make speech- related
uses of older works. Then, in 2012, the Court went a step further, and ruled that Congress
may constitutionally remove works from the public domain, even though citizens—including orchestra conductors, educators, librarians, and film archivists—were already legally
using them. According to the majority opinion, while copyright owners had legally protected rights during the copyright term, the public had no First Amendment rights to use
material in the public domain: “Anyone has free access to the public domain, but no one,
after the copyright term has expired, acquires ownership rights in the once-protected
works.” The dissenting Justices’ disagreement was forceful: “By removing material from
the public domain, the statute, in literal terms, ‘abridges’ a preexisting freedom to speak.”
This impoverishment of the public domain stands in stark contrast to the original
purpose and history of our copyright laws. As Justice Story explained, the Constitutional
purpose of copyright is to “promote the progress of science and the useful arts, and admit
the people at large, after a short interval, to the full possession and enjoyment of all writings
and inventions without restraint.” Accordingly, the original copyright term lasted for 14
years, with the option to renew for another 14 years. Until 1978, the maximum copyright
term was 56 years: 28 years from the date of publication, renewable for another 28 years.
Under that relatively recent term, works published in 1957 would enter the public
domain on January 1, 2014. These include books ranging from Jack Kerouac’s On The
Road to Ayn Rand’s Atlas Shrugged to Dr. Seuss’s The Cat in the Hat. (A variety of
constituencies would have cause for celebration.) Joining those books would be the
classic films The Bridge on the River Kwai, Funny Face, and A Farewell to Arms, as well
as the first episodes of Leave It to Beaver. Under current law, they will remain under
copyright until 2053. And famous creations like these are only the beginning. Most works
from 1957 are out of circulation—a Congressional Research Service study suggested that
only 2 percent of works between 55 and 75 years old continue to retain commercial value.
Those who wish to use such works legally face a series of potential roadblocks.
Finding the rights holders of commercially unavailable works can be especially difficult, as
the relevant documentation is often lost or buried. These challenges are compounded by the
abandonment of “formalities,” which coincided with the term extension. Until 1978, the law
required copyright owners either to affix a simple notice to their works showing their name
and the year of publication, or to register unpublished works with the Copyright Office, in
order to receive copyright protection. To maintain copyright, they needed to renew claims
with the Copyright Office after an initial term. These requirements produced an evidentiary

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trail that, in practice, provided the public with basic information about copyright ownership
and status—a predicate to efficiently obtaining permission or a license. Without this
information, the initial “search costs” can themselves be insurmountable—those who wish
to negotiate terms of use cannot find the rights holders in the first place—giving rise to
“orphan works.” Productive uses are foregone, and forgotten works remain off limits. This
legal gridlock entrenches the dividing line between copyright and the public domain, but its
costs fall on both sides of that line; in the absence of information neither works under
copyright, nor those in the public domain, will be efficiently used.
The removal of the renewal requirement further diminished the public domain, by
creating copyrights that persisted over works that had exhausted their commercial
potential. With renewal, if works were still valuable at the end of their first term, that
would provide the incentive to renew; but if not, then the work could pass into the public
domain, where it might prove valuable to others. A 1961 study showed that 85 percent of
all copyrights were not renewed, and some 93 percent of copyrights in books were not
renewed. All of those works went immediately into the public domain. Under current
law, however, for the majority of older works, no one is reaping the benefits from
continued protection, yet they remain presumptively copyrighted.
The general elimination of formalities had an additional effect. It meant that for the
first time the realm of “informal culture”—diaries, home movies, personal photographs—
entered the realm of copyright, whether the creators wished it or not. These amateur works,
invaluable in detailing our cultural history, are even more likely to be “orphan works” and
thus, barring assertions of fair use, effectively off limits to those who would digitize them
or use them to chronicle our past. Because these works, too, were subject to the twentyyear term extension, a large swath of informal history became practically unavailable.
These costs in terms of speech and accessibility are high, but what about the
countervailing benefits? Copyright’s central economic rationale is that exclusive rights
spur creativity. However, the incentive effect from prospective term extension is negligible,
and from retrospective term extension, nonexistent. The 1998 law lengthened the term from
life plus 50 to life plus 70 years for natural authors, and from 75 years to 95 years after
publication for corporate “works made for hire.” Could this extra 20 years of protection,
decades in the future, provide additional incentives to authors? The economic evidence
suggests that the answer is no. Only a minuscule percentage of works retain commercial
value by this time. For the term extension to stimulate new creation, authors would have to
be incentivized by the remote possibility that their heirs or successors-in-interest would
continue to receive revenue beyond the previous terms of life plus 50 years or 75 years
after publication. A team of eminent economists estimated that “a 1% likelihood of earning
$100 annually for 20 years, starting 75 years into the future, is worth less than seven cents
today”—hardly a compelling economic incentive. And, of course, lengthening the term for
works that have already been produced provides no new incentives at all.
Incentives aside, another purported benefit of term extension was that the
additional twenty years would encourage rights holders to restore and redistribute their
older works. Empirical studies show otherwise: it is not rights holders who wish to digitize and redistribute their older catalogues. It is non-owners who are waiting to do so.
When books fall out of copyright, they are more likely to be in print, and available in
more editions and formats. Preservationists, not copyright holders, are digitizing deteriorating films and sound recordings, and term extension is inhibiting their efforts. Therefore, keeping older works under copyright frequently frustrates, rather than promotes,
their maintenance and dissemination. In the end, while reasonable minds can disagree
about the constitutionality of retrospective term extension, it is difficult to argue that the

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benefits outweigh the costs. The available evidence strongly suggests otherwise.
So, one answer to “What will enter the public domain in 2014?” is simple, and
distressing: “Nothing.”

Copyright’s History
If a page of history is worth a chapter of theory, you are in luck. We now turn to the
actual history of copyright and in particular, to the way that copyright has expanded over
the years. US copyright law has its roots in England’s first copyright law: the Statute of
Anne, enacted in 1710. The Statute of Anne
marked a significant departure from previous
laws in England that had granted an effective
monopoly to the Stationers’ Company—a
printers’ guild—by giving its members
exclusive privileges to print and distribute
books. These privileges were perpetual, as long
as a book remained in print. Not only did this
system enable a monopoly, it also gave the
government a powerful censorship tool, as rights
were conferred in exchange for the guild’s
refusal to print materials that were considered
seditious or heretical. The Statute of Anne
changed the law by vesting printing rights in
authors, rather than printers (although authors
often had to transfer their rights to printers in
order to make a living). The term of protection
was no longer perpetual—it lasted 14 years for
new books, plus another 14 years if the author
was still living at the end of the first term; books
already in print received a single 21 year term.
And the new law expressly stated a utilitarian
purpose: it was an “Act for the Encouragement
of Learning.”
The first US Copyright law was passed in 1790, pursuant to the power granted to
Congress under the Intellectual Property Clause to “promote the progress . . . by securing
for limited times to authors . . . the exclusive rights to their . . . writings.” Like the English
law, the US law was “an act for the encouragement of learning”; and the initial term of
protection was 14 years, with the option to renew for another 14 years if the author was
still alive. The scope of copyright was limited: it only covered the “printing, reprinting,
publishing and vending” of “maps, charts, and books.”
Over the next decades, copyright grew to cover additional subject matter such as
music (1831), photographs (1865), and paintings, drawings, and other works of fine art
(1870). While musical compositions became eligible for copyright protection in 1831, it
wasn’t until 1897 that music copyright holders gained the exclusive right to publicly
perform their compositions for profit. Until then, they could prevent others from printing
and vending their compositions, but not from performing them.
The next major copyright act was enacted in 1909. Under this new law, the
copyright term was extended to 28 years from publication, with the option to renew for
another 28 years. Copyright holders also gained additional exclusive rights, most notably

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the right to make an array of derivative works including translations, dramatizations, and
adaptations. (An 1870 law had given authors more limited rights to control translations
and dramatizations, but those rights were part of an opt-in system.) Before derivative
work rights were reserved to authors, you needed permission to print or “vend”—we
would now say “distribute”—a copyrighted work, but it was perfectly legal to translate,
adapt, or otherwise build upon those works, because the policy behind copyright favored
such follow-on creativity.
Perhaps the most striking difference between the 1909 Act and current copyright
law (see below) was that copyright protection was conditioned upon “formalities”:
namely, 1) publication of a work with 2) a copyright notice—e.g. Copyright 2014, John
Smith. To maintain copyright after the first 28-year term, authors had to renew their
rights. Works published without proper notice went into the public domain, as did works
whose subsisting copyrights were not renewed. At the time, unpublished works were
generally subject to state common law copyright rather than the federal scheme. (Note
that “publication” under the 1909 Act had a specific legal meaning that can make the
determination of whether or not a work was published less than obvious.)
While 1909 may seem somewhat distant, the 1909 Act is still relevant in many
circumstances because some of its key provisions govern works that were created up
until 1978. For example, its formalities requirements may affect the copyright status of
certain pre-1978 works. Successive extensions of the copyright term (see below) mean
that only works published almost a century ago are conclusively in the public domain.
Works published before 1978 go into the public domain on January 1st the year after a
95-year copyright term—so works published in 1930 go into the public domain on
1/1/2026 (1930+95+1). However, because of the 1909 Act’s notice and renewal
requirements, works from before 1978 published without notice, as well as works from
before 1964 that were published with notice but whose copyrights were not renewed, are
also in the public domain. Before you make plans to use these works, however, note that
tracking down publication, notice, and renewal information for older works can be
prohibitively difficult.

The 1976 Copyright Act
The basic framework of today’s copyright law is provided by the 1976 Copyright
Act, which has been amended many times. It took effect on January 1, 1978, and has been
amended numerous times. Unlike the 1909 Act, the 1976 Act covers both published and
unpublished works, and preempts state common law. 17 U.S.C. § 301. Its provisions will
be the subject of the bulk of the readings in this book. Here is a brief summary of its key
features; you will be learning more about them in the coming weeks.
In terms of subject matter, current copyright law has expanded over time to include
motion pictures, choreographic works, architectural works, computer programs, and
more. Within those categories, copyright protection only subsists in “original” works that
are “fixed in any tangible medium of expression.” 17 U.S.C. § 102(a). “Original” does
not mean novel, it merely means that the work was independently created, and not copied
from other works. (If we both write exactly the same love song without copying one
another, we are both entitled to a copyright.) In addition, copyright only covers creative
“expression,” and never extends to “any idea, procedure, process, system, method of
operation, concept, principle, or discovery.” 17 U.S.C. § 102(b). Some subject matter,
such as sound recordings, semiconductor chips, and boat hulls, are subject to their own
special rules under the Copyright Act.
In terms of rights, copyright holders now enjoy the exclusive rights of 1)

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reproduction, 2) making derivative works, 3) distribution, 4) public performance, 5) and
public display. 17 U.S.C. § 106. Outside of the scope of these rights, the copyright owner
is not entitled to control other uses of her work, such as private performance. In addition,
the exclusive rights themselves are subject to limitations and exceptions, such as fair use
and first sale. 17 U.S.C. §§ 107, 109. When an exclusive right is infringed, however,
innocent intent is not a defense, because copyright is a strict liability system. (Innocent
infringement can limit remedies, for example by reducing the damage award.)
While copyrights initially vest in the “author,” this does not necessarily mean that
they are owned by the individual who created the work. In the case of “works made for
hire,” the corporation or employer is considered the author. When multiple parties
contribute to a work, the copyright can be owned by “joint authors.” Copyrights are
transferrable, and are often transferred numerous times during the course of their (now
very long) lifespan. The complex rules about copyright ownership and transfer are in 17
U.S.C. §§ 201–05 of the Copyright Act.
Regarding duration, the 1976 Copyright Act initially expanded the copyright term
from a possible total of 56 years under the 1909 Act (28 years plus the optional 28-year
renewal term) to a single term of life plus 50 years for natural authors, and 75 years after
publication for corporate works. In 1998, the term was further expanded to life of the
author plus 70 years, and 95 years from publication for works of corporate authorship.
This 20-year term extension did not just apply to new works, but also retrospectively to
works already in existence, meaning that no published works entered the public domain
until 2019. The rules governing copyright duration can be found at 17 U.S.C. §§ 302–04.
Current copyright law has also eliminated the “formalities” required by the 1909 Act.
Copyright now automatically attaches to an eligible work the moment it is fixed in a tangible
medium of expression. There is no need to include a copyright notice or renew the copyright
after a specified period of time. There is also no need to register the work with the Copyright
Office. That said, registration does become necessary if a copyright holder wants to bring
an action for infringement. 17 U.S.C. § 411(a). (If the Copyright Office refuses registration,
a plaintiff can still sue as long as she notifies the Register of Copyrights, who then has the
option of intervening on the issue of registrability.) Registration also confers a number of
benefits in the event of a lawsuit: registration within 3 months of publication (or within 1
month of learning about the infringement, if that is earlier) is a prerequisite for statutory
damages and attorneys’ fees, and registration within five years of publication provides prima
facie evidence of copyright validity. 17 U.S.C. §§ 412, 410(c).
One reason that the US removed formalities was to comply with the Berne
Convention for the Protection of Literary and Artistic Works, a major international
copyright treaty. The US began relaxing formalities with passage of the 1976 Act, and
then eliminated them on March 1, 1989 when it officially joined the Berne Convention,
which requires that rights “shall not be subject to any formality.” (Like many
international IP treaties, the Berne Convention provides for both minimum standards and
“national treatment,” meaning that signatories must grant nationals from other participating countries the same rights as they give to their own nationals. Whether the US is
currently in compliance with all aspects of the Berne Convention is the subject of continuing debate, and something you may explore in courses on international intellectual
property.) Aside from adhering with Berne, another reason that the US removed formalities involved practical and policy concerns. Authors who were unfamiliar or unable to
comply with formalities might unwittingly forfeit protection; automatic copyright
ensured that this would not happen.
In 1998, Congress amended the Copyright Act by passing the Digital Millennium

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Copyright Act (“DMCA”). Among its key features are new legal protections for
“technological measures” that control access to copyrighted works, and safe harbors for
providers of a variety of online services, including internet access, hosting, and linking.
The DMCA will be explored in more detail in subsequent chapters.
In 2020, Congress passed the “Copyright Alternative in Small-Claims Enforcement
Act of 2019” (“CASE Act”), as part of a COVID-19 relief bill. (No, copyright
enforcement has nothing to do with COVID relief; this was an irrelevant provision
inserted into the omnibus bill.) The CASE Act establishes an administrative tribunal called
the Copyright Claims Board (“CCB”) within the US Copyright Office that will decide
copyright claims of $30,000 or less. Determinations are rendered by three attorneys
serving as Copyright Claims Officers, two having “substantial experience” with copyright
claims, and one with alternative dispute resolution expertise. A defendant wishing to
proceed in court rather than the CCB can opt out within 60 days after notification of the
claim. If the defendant fails to opt out and receives an adverse determination, there are
limited grounds for appeal: the decision can be challenged on the basis of fraud,
corruption, misrepresentation, or misconduct, but not substantive error. Proponents of the
CASE Act argue that it will help rightsholders keep up with the frequency of infringement
online by giving them a cheaper, more efficient enforcement mechanism for small claims.
Opponents argue that, in practice, the process will be used by large copyright holders and
“copyright trolls” to extract payments from less savvy defendants who may not know how
to opt out or successfully defend against a claim. (Copyright trolls were defined by a judge
as those who bring copyright claims “as a profit-making scheme rather than as a
deterrent.”) Copyright is complex, and these streamlined proceedings may be ill-suited to
handle nuanced issues like “fair use” (covered in Chapter 13), making it difficult for
respondents to avail themselves of such defenses.

Copyright Expansions and Policy
Take a moment to review the copyright history briefly sketched above, and
consider the way that copyright has expanded over time in response to technological and
market developments. The original copyright act from 1790 only governed the printing,
publishing, and vending of books, maps, and charts. In 1850, even though musical
compositions had recently been added to this list, your school orchestra could freely
perform any composition because public performances were not reserved to the
copyright holder. Nor were any derivative works rights—as a follow-on creator, you
could translate books into other languages, or adapt them for theater, or build upon them
in your own work.
The term of protection has lengthened markedly in recent years. Until 1978, it
lasted for a possible total of 56 years—28 years from the date of publication, plus the
option to renew for another 28 years—with the majority of works entering the public
domain after the first 28-year term (studies put the rate of non-renewal for all works at
85%, and for books alone at 93%). Now the term is 70 years after the death of the author,
and 95 years after publication for corporate works. Because this span outlasts the
economic viability of most works, only a small percentage of copyrighted works benefits
from this longer term; a Congressional study suggested that only 2 percent of works
between 55 and 75 years old continue to retain commercial value. As time goes on, an
increasing amount of material is out of print, but still in copyright. Many libraries,
creators, and others are prevented from using this material because the expanded term,
along with the elimination of formalities, has made it especially difficult to find the rights
holders. The result is a growing corpus of “orphan works”—those whose authors cannot

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be identified or located, keeping them off limits to users who are seeking permission. As
the Copyright Office has explained: “For good faith users, orphan works are a frustration,
a liability risk, and a major cause of gridlock in the digital marketplace. . . . This outcome
is difficult if not impossible to reconcile with the objectives of the copyright system and
may unduly restrict access to millions of works that might otherwise be available to the
public.” This is the flip-side of the argument Samuel Clemens made in 1906. He assumed
that there would be no loss to the public, because—while the term was extended—the
demand for the book would not be. Thus no one would lose. Do you agree after reading
the excerpt from Jenkins’ article? Of course in 1906, the idea of scanning and digitizing
the world’s cultural heritage would have seemed like a fever-dream.
To address the orphan works problem, there is currently a push toward reform. In
addition, the Register of Copyrights has suggested that, toward the end of the term,
continued copyright should be conditioned upon registration with the Copyright Office,
so that older works are not unnecessarily kept from the public, while successful works
can still register and maintain protection.
As you have read elsewhere in these materials, the primary purpose of US
copyright law is to benefit the public. (Hugo, interestingly, accepts this formulation.
Clemens does so only with great irony.) It does so by granting limited exclusive rights to
authors, in order to provide an economic incentive to create and distribute creative
material. But the ultimate goal is to ensure that the public will benefit from the diffusion
of knowledge and culture. In the words of the Supreme Court, “The immediate effect of
our copyright law is to secure a fair return for an ‘author’s’ creative labor. But the ultimate
aim is, by this incentive, to stimulate artistic creativity for the general public good.”
Twentieth Century Music Corp. v. Aiken (1975). Copyright law is, at its core, “[a]n act
for the encouragement of learning.” Its ability to achieve this objective depends upon a
continually recalibrated balance between that which is subject to private control, and that
which is free for the public to use and build upon.
As you read through the upcoming materials, consider the following questions. Is
copyright in its current form fulfilling its purpose? How have its scope, duration, and
impact changed? How about countervailing limitations and exceptions? How do the
challenges posed by new technologies inflect your analysis?

Copyright Office
As part of your introduction to copyright, please spend some time exploring the
Copyright Office website at http://www.copyright.gov. You can find out how to register
copyright, search the Copyright Office’s records, and read their explanatory Circulars
and Brochures. In general, registering a copyright is more straightforward (and much
cheaper) than registering a trademark. If you are a creator, consider registering your work
via the Copyright Office website as an introductory exercise.
Note: A Copyright Flow Chart
On the next page you will find a copyright flow chart which parallels the trademark law
flow chart you may already have encountered. The chart explains what we will be covering in each chapter and how the legal questions discussed will play a role in a copyright
analysis. Second, you can refer to the chart to help you with the Problems in this section.
Use it to remind yourself of the structure of the analysis and to make sure you are not
missing an issue.

COPYRIGHT FLOW CHART
(This is a (highly) simplified preview of what you will learn and
a tool to use in the problems. Refer to it often.)
Does the plaintiff own a valid copyright? (Chapter 11)
Is the copied material ORIGINAL, CREATIVE EXPRESSION?
For copyright purposes, “original” doesn’t mean novel, it means that the plaintiff
“independently created” the material—in other words, that she didn’t copy it
from other works—AND that it possessed a “modicum of creativity.”

NO

“Expression” is protected, but facts and “ideas” are not; nor is expression that
“merges” with the idea.

YES

Did the defendant infringe that copyright? (Chapter 12)
Is there sufficient evidence of ACCESS?

NO

“Access” means that the defendant had a reasonable
opportunity to copy the plaintiff’s work. It is typically
shown through 1) widespread dissemination of the
plaintiff’s work or 2) a chain of events linking the
plaintiff and defendant. In some cases, STRIKING
SIMILARITY can allow for a presumption of access.

YES

NO

YES

Is there SUBSTANTIAL SIMILARITY between the plaintiff’s and defendant’s
works? Only similarities to copyright-protected elements of plaintiff’s work are
relevant. Copying material such as ideas, facts, and scènes à faire (elements that
have become standard or indispensable for a topic or genre) is not infringement.
There is no bright line rule about the necessary degree of similarity.
Substantiality can be either quantitative (a large amount of plaintiff’s work was
copied) or qualitative (an important part of plaintiff’s work was copied). In either
case, the similarity must be to portions protected by copyright. Trivial or de
minimis copying falls beneath the threshold of substantial similarity.

NO

(In practice, if the defendant has engaged in wholesale, direct copying, a full
analysis of access and similarity will obviously be unnecessary.)

YES

Was the copying FAIR USE? (Chapter 13)
NO

COPYRIGHT INFRINGEMENT

YES

NO COPYRIGHT INFRINGEMENT

Is there direct
evidence of
copying?

CHAPTER ELEVEN

Copyrightable Subject Matter

What does copyright cover?

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What does copyright cover?

Images from Aoki, Boyle, and Jenkins, Theft! A History of Music (available for free online at
https://law.duke.edu/musiccomic/).

285

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Copyrightable Subject Matter
As with trademark, the first question to ask with copyright is “what subject matter does it
cover?” By that we do not merely mean “what media forms does copyright cover?” Before
we even get to the question of when copyright came to cover music, recordings, or
photographs, there is a deeper premise we have to understand. As the last chapter made
clear, copyright starts with a remarkable and dramatic choice, the choice that Krause was
unable to understand, but that Hugo and Fichte stressed. It does not cover ideas or
unoriginal compilations of fact. When I publish my book, the ideas and facts within it go
immediately into the public domain—no need to wait for my lifetime plus another seventy
years to get them. Copyright covers only the original expression. This point comes with
a corollary. There is no original expression in the design of a water filter or a mousetrap.
There may be genius, in the sense of making a technological leap that is way beyond the
current state of the art, but we do not look at the lightbulb and say “Ah, the filament—
that’s just so Edison! That’s just the way that he, and only he, would express the idea
‘glow, sucker, glow!’” Focusing only on expression, copyright never covers purely
functional or useful articles, never covers discoveries or inventions. If they are to be
covered by rights at all, those are in the domain of patent.
This chapter will go through the criteria for copyrightable subject matter, many of
which, as we saw in Chapter 3, have a constitutional dimension. As you consider them,
compare them to the limitations on trademark subject matter. Notice how the subject matter
limitations trace both the functional goals that the right is to fulfill and the need to limit the
ambit of the right in order to allow for the requirements of speech, debate and competition.
But notice also how those reasons do not explain all of the subject matter delineations—
and in some cases may be flatly contradictory to them.
We will look at:
• the requirement of originality, meeting the Feist case again,
• the idea/expression (and idea/fact) distinction,
• the linked idea of “merger” where the expression merges with the idea and
therefore cannot be owned,
• the “useful articles” doctrine—which limits the reach of copyright on designs
that are both functional and expressive,
• the exclusion of “methods of operation” from copyright, and
• the requirement of fixation in material form.
But it is easy to get lost in the picky details of each subsection. As you will see,
many of these cases could be classified as dealing with multiple subject matter limitations. When I refuse to extend copyright to the way an accounting method is implemented, is that the idea/expression distinction, a method of operation or something else
altogether? The important question is the basic one, “Why do we have this limitation on
copyright’s subject matter? How does including or excluding this material further the
constitutional and statutory scheme?”
In addition, this section leads into another of the central and recurrent themes of the
book: the interaction between intellectual property and technology. This entire chapter, but
in particular the last two sections—on methods of operation and on fixation—begin a unit
dealing with copyright and software. The software unit is layered on top of the doctrinal
material of the course. We will be learning the rules about copyrightable subject matter,
infringement and substantial similarity, fair use, the interaction between copyright and
licenses—all subjects that transcend the technology. But at the same time many of those
subjects have a particular twist or valence when they are inside the world of computing.

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287

Thus we will simultaneously be studying the way the courts took the ancient niches of
copyright and trimmed and stretched them to fit the new threats and opportunities of
software. (As you read the later sections of this chapter, compare what you see to the way
courts adapted trademark law to fit the world of domain names and search engines.)
§ 102 Subject matter of copyright: In general
(a) Copyright protection subsists, in accordance with this title, 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 the following categories:
(1) 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.
(b) In no case does copyright protection for 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.

1.) Originality: Independent Creation and a Modicum of Creativity

Feist v. Rural Telephone Service
499 U.S. 340 (1991)

Justice O’CONNOR delivered the opinion of the Court.
This case requires us to clarify the extent of copyright protection available to
telephone directory white pages.
I
Rural Telephone Service Company, Inc., is a certified public utility that provides
telephone service to several communities in northwest Kansas. It is subject to a state
regulation that requires all telephone companies operating in Kansas to issue annually an
updated telephone directory. Accordingly, as a condition of its monopoly franchise, Rural
publishes a typical telephone directory, consisting of white pages and yellow pages. The
white pages list in alphabetical order the names of Rural’s subscribers, together with their
towns and telephone numbers. The yellow pages list Rural’s business subscribers alphabetically by category and feature classified advertisements of various sizes. Rural distributes its directory free of charge to its subscribers, but earns revenue by selling yellow
pages advertisements.
Feist Publications, Inc., is a publishing company that specializes in area-wide telephone directories. Unlike a typical directory, which covers only a particular calling area,
Feist’s area-wide directories cover a much larger geographical range, reducing the need to
call directory assistance or consult multiple directories. The Feist directory that is the

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subject of this litigation covers 11 different telephone service areas in 15 counties
and contains 46,878 white pages listings—compared to Rural’s approximately 7,700 listings. Like Rural’s directory, Feist’s is distributed free of charge
and includes both white pages and yellow
pages. Feist and Rural compete vigorously for yellow pages advertising.
As the sole provider of telephone
service in its service area, Rural obtains Feist area-wide telephone directory
subscriber information quite easily. Persons desiring telephone service must apply to Rural
and provide their names and addresses; Rural then assigns them a telephone number. Feist
is not a telephone company, let alone one with monopoly status, and therefore lacks
independent access to any subscriber information. To obtain white pages listings for its areawide directory, Feist approached each of the 11 telephone companies operating in northwest
Kansas and offered to pay for the right to use its white pages listings.
Of the 11 telephone companies, only Rural refused to license its listings to Feist.
Rural’s refusal created a problem for Feist, as omitting these listings would have left a
gaping hole in its area-wide directory, rendering it less attractive to potential yellow
pages advertisers. In a decision subsequent to that which we review here, the District
Court determined that this was precisely the reason Rural refused to license its listings.
The refusal was motivated by an unlawful purpose “to extend its monopoly in telephone
service to a monopoly in yellow pages advertising.”
Unable to license Rural’s white pages listings, Feist used them without Rural’s
consent. Feist began by removing several thousand listings that fell outside the
geographic range of its area-wide directory, then hired personnel to investigate the 4,935
that remained. These employees verified the data reported by Rural and sought to obtain
additional information. As a result, a typical Feist listing includes the individual’s street
address; most of Rural’s listings do not. Notwithstanding these additions, however, 1,309
of the 46,878 listings in Feist’s 1983 directory were identical to listings in Rural’s 1982–
1983 white pages. Four of these were fictitious listings that Rural had inserted into its
directory to detect copying.
II
A
This case concerns the interaction of two well-established propositions. The first is
that facts are not copyrightable; the other, that compilations of facts generally are. Each of
these propositions possesses an impeccable pedigree. That there can be no valid copyright
in facts is universally understood. The most fundamental axiom of copyright law is that
“[n]o author may copyright his ideas or the facts he narrates.” Harper & Row (1985). Rural
wisely concedes this point, noting in its brief that “[f]acts and discoveries, of course, are
not themselves subject to copyright protection.” At the same time, however, it is beyond
dispute that compilations of facts are within the subject matter of copyright. . . .
There is an undeniable tension between these two propositions. Many compilations
consist of nothing but raw data—i.e., wholly factual information not accompanied by any
original written expression. On what basis may one claim a copyright in such a work?
Common sense tells us that 100 uncopyrightable facts do not magically change their status
when gathered together in one place. Yet copyright law seems to contemplate that

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289

compilations that consist exclusively of facts are potentially within its scope.
The key to resolving the tension lies in understanding why facts are not copyrightable. The sine qua non of copyright is originality. To qualify for copyright protection,
a work must be original to the author. See Harper & Row. Original, as the term is used in
copyright, means only that the work was independently created by the author (as opposed
to copied from other works), and that it possesses at least some minimal degree of
creativity. To be sure, the requisite level of creativity is extremely low; even a slight
amount will suffice. The vast majority of works make the grade quite easily, as they
possess some creative spark, “no matter how crude, humble or obvious” it might be.
Originality does not signify novelty; a work may be original even though it closely
resembles other works so long as the similarity is fortuitous, not the result of copying. To
illustrate, assume that two poets, each ignorant of the other, compose identical poems.
Neither work is novel, yet both are original and, hence, copyrightable.
Originality is a constitutional requirement. The source of Congress’ power to enact
copyright laws is Article I, § 8, cl. 8, of the Constitution, which authorizes Congress to
“secur[e] for limited Times to Authors . . . the exclusive Right to their respective
Writings.” In two decisions from the late 19th century—The Trade-Mark Cases (1879);
and Burrow-Giles Lithographic Co. v. Sarony (1884)—this Court defined the crucial
terms “authors” and “writings.” In so doing, the Court made it unmistakably clear that
these terms presuppose a degree of originality.
In The Trade-Mark Cases, the Court addressed the constitutional scope of
“writings.” For a particular work to be classified “under the head of writings of authors,”
the Court determined, “originality is required.” The Court explained that originality
requires independent creation plus a modicum of creativity: “[W]hile the word writings
may be liberally construed, as it has been, to include original designs for engraving, prints,
&c., it is only such as are original, and are founded in the creative powers of the mind.
The writings which are to be protected are the fruits of intellectual labor, embodied in the
form of books, prints, engravings, and the like.”
In Burrow-Giles, the Court distilled the same requirement from the Constitution’s use
of the word “authors.” The Court defined “author,” in a constitutional sense, to mean “he to
whom anything owes its origin; originator; maker.” As in The Trade-Mark Cases, the Court
emphasized the creative component of originality. It described copyright as being limited to
“original intellectual conceptions of the author,” and stressed the importance of requiring an
author who accuses another of infringement to prove “the existence of those facts of
originality, of intellectual production, of thought, and conception.”
The originality requirement articulated in The Trade-Mark Cases and Burrow-Giles
remains the touchstone of copyright protection today. See Goldstein v. California (1973). It
is the very “premise of copyright law.” Miller v. Universal City Studios, Inc. (1981). Leading
scholars agree on this point. As one pair of commentators succinctly puts it: “The originality
requirement is constitutionally mandated for all works.” Patterson & Joyce 763 (1989).
It is this bedrock principle of copyright that mandates the law’s seemingly disparate
treatment of facts and factual compilations. “No one may claim originality as to facts.”
Nimmer § 2.11[A]. This is because facts do not owe their origin to an act of authorship.
The distinction is one between creation and discovery: The first person to find and report
a particular fact has not created the fact; he or she has merely discovered its existence. To
borrow from Burrow-Giles, one who discovers a fact is not its “maker” or “originator.”
“The discoverer merely finds and records.” Nimmer § 2.03[E]. Census-takers, for example,
do not “create” the population figures that emerge from their efforts; in a sense, they copy

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these figures from the world around them. Census data therefore do not trigger copyright
because these data are not “original” in the constitutional sense. The same is true of all
facts—scientific, historical, biographical, and news of the day. “They may not be copyrighted and are part of the public domain available to every person.” Miller.
Factual compilations, on the other hand, may possess the requisite originality. The
compilation author typically chooses which facts to include, in what order to place them,
and how to arrange the collected data so that they may be used effectively by readers.
These choices as to selection and arrangement, so long as they are made independently
by the compiler and entail a minimal degree of creativity, are sufficiently original that
Congress may protect such compilations through the copyright laws. Thus, even a
directory that contains absolutely no protectible written expression, only facts, meets the
constitutional minimum for copyright protection if it features an original selection or
arrangement. See Harper & Row.
This protection is subject to an important limitation. The mere fact that a work is
copyrighted does not mean that every element of the work may be protected. Originality
remains the sine qua non of copyright; accordingly, copyright protection may extend only
to those components of a work that are original to the author. Thus, if the compilation
author clothes facts with an original collocation of words, he or she may be able to claim a
copyright in this written expression. Others may copy the underlying facts from the
publication, but not the precise words used to present them. In Harper & Row, for example,
we explained that President Ford could not prevent others from copying bare historical
facts from his autobiography, but that he could prevent others from copying his “subjective
descriptions and portraits of public figures.” Where the compilation author adds no written
expression but rather lets the facts speak for themselves, the expressive element is more
elusive. The only conceivable expression is the manner in which the compiler has selected
and arranged the facts. Thus, if the selection and arrangement are original, these elements
of the work are eligible for copyright protection. No matter how original the format,
however, the facts themselves do not become original through association.
This inevitably means that the copyright in a factual compilation is thin. Notwithstanding a valid copyright, a subsequent compiler remains free to use the facts contained
in another’s publication to aid in preparing a competing work, so long as the competing
work does not feature the same selection and arrangement. As one commentator explains
it: “[N]o matter how much original authorship the work displays, the facts and ideas it
exposes are free for the taking. . . . [T]he very same facts and ideas may be divorced from
the context imposed by the author, and restated or reshuffled by second comers, even if the
author was the first to discover the facts or to propose the ideas.” Ginsburg, Creation and
Commercial Value: Copyright Protection of Works of Information (1990).
It may seem unfair that much of the fruit of the compiler’s labor may be used by
others without compensation. As Justice Brennan has correctly observed, however, this is
not “some unforeseen byproduct of a statutory scheme.” Harper & Row. It is, rather, “the
essence of copyright” and a constitutional requirement. The primary objective of copyright
is not to reward the labor of authors, but “[t]o promote the Progress of Science and useful
Arts.” Art. I, § 8, cl. 8. To this end, copyright assures authors the right to their original
expression, but encourages others to build freely upon the ideas and information conveyed
by a work. This principle, known as the idea-expression or fact-expression dichotomy,
applies to all works of authorship. As applied to a factual compilation, assuming the
absence of original written expression, only the compiler’s selection and arrangement may
be protected; the raw facts may be copied at will. This result is neither unfair nor

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unfortunate. It is the means by which copyright advances the progress of science and art.
This Court has long recognized that the fact-expression dichotomy limits severely
the scope of protection in fact-based works. More than a century ago, the Court observed:
“The very object of publishing a book on science or the useful arts is to communicate to
the world the useful knowledge which it contains. But this object would be frustrated
if the knowledge could not be used without incurring the guilt of piracy of the book.”
Baker v. Selden (1880). We reiterated this point in Harper & Row:
“[N]o author may copyright facts or ideas. The copyright is limited to those
aspects of the work—termed ‘expression’—that display the stamp of the
author’s originality.
“[C]opyright does not prevent subsequent users from copying from a prior
author’s work those constituent elements that are not original—for example . . .
facts, or materials in the public domain—as long as such use does not unfairly
appropriate the author’s original contributions.”
This, then, resolves the doctrinal tension: Copyright treats facts and factual compilations in a wholly consistent manner. Facts, whether alone or as part of a compilation,
are not original and therefore may not be copyrighted. A factual compilation is eligible
for copyright if it features an original selection or arrangement of facts, but the copyright
is limited to the particular selection or arrangement. In no event may copyright extend to
the facts themselves.
III
There is no doubt that Feist took from the white pages of Rural’s directory a substantial amount of factual information. At a minimum, Feist copied the names, towns, and
telephone numbers of 1,309 of Rural’s subscribers. Not all copying, however, is copyright
infringement. To establish infringement, two elements must be proven: (1) ownership of
a valid copyright, and (2) copying of constituent elements of the work that are original.
See Harper & Row. The first element is not at issue here; Feist appears to concede that
Rural’s directory, considered as a whole, is subject to a valid copyright because it contains
some foreword text, as well as original material in its yellow pages advertisements.
The question is whether Rural has proved the second element. In other words, did
Feist, by taking 1,309 names, towns, and telephone numbers from Rural’s white pages,
copy anything that was “original” to Rural? Certainly, the raw data does not satisfy the
originality requirement. Rural may have been the first to discover and report the names,
towns, and telephone numbers of its subscribers, but this data does not “‘ow[e] its origin’”
to Rural. Burrow-Giles. Rather, these bits of information are uncopyrightable facts; they
existed before Rural reported them and would have continued to exist if Rural had never
published a telephone directory. The originality requirement “rule[s] out protecting . . .
names, addresses, and telephone numbers of which the plaintiff by no stretch of the
imagination could be called the author.” Patterson & Joyce 776.
The question that remains is whether Rural selected, coordinated, or arranged these
uncopyrightable facts in an original way. As mentioned, originality is not a stringent
standard; it does not require that facts be presented in an innovative or surprising way. It is
equally true, however, that the selection and arrangement of facts cannot be so mechanical
or routine as to require no creativity whatsoever. The standard of originality is low, but it
does exist. As this Court has explained, the Constitution mandates some minimal degree of
creativity, see The Trade-Mark Cases, and an author who claims infringement must prove
“the existence of . . . intellectual production, of thought, and conception.” Burrow-Giles.
The selection, coordination, and arrangement of Rural’s white pages do not satisfy

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the minimum constitutional standards for copyright protection. As mentioned at the
outset, Rural’s white pages are entirely typical. Persons desiring telephone service in
Rural’s service area fill out an application and Rural issues them a telephone number. In
preparing its white pages, Rural simply takes the data provided by its subscribers and
lists it alphabetically by surname. The end product is a garden-variety white pages
directory, devoid of even the slightest trace of creativity.
Rural’s selection of listings could not be more obvious: It publishes the most basic
information—name, town, and telephone number—about each person who applies to it for
telephone service. This is “selection” of a sort, but it lacks the modicum of creativity necessary to transform mere selection into copyrightable expression. Rural expended sufficient
effort to make the white pages directory useful, but insufficient creativity to make it original.
We note in passing that the selection featured in Rural’s white pages may also fail the
originality requirement for another reason. Feist points out that Rural did not truly “select”
to publish the names and telephone numbers of its subscribers; rather, it was required to do
so by the Kansas Corporation Commission as part of its monopoly franchise. Accordingly,
one could plausibly conclude that this selection was dictated by state law, not by Rural.
Nor can Rural claim originality in its coordination and arrangement of facts. The white
pages do nothing more than list Rural’s subscribers in alphabetical order. This arrangement
may, technically speaking, owe its origin to Rural; no one disputes that Rural undertook the
task of alphabetizing the names itself. But there is nothing remotely creative about arranging
names alphabetically in a white pages directory. It is an age-old practice, firmly rooted in
tradition and so commonplace that it has come to be expected as a matter of course. It is not
only unoriginal, it is practically inevitable. This time-honored tradition does not possess the
minimal creative spark required by the Copyright Act and the Constitution.
We conclude that the names, towns, and telephone numbers copied by Feist were
not original to Rural and therefore were not protected by the copyright in Rural’s
combined white and yellow pages directory. As a constitutional matter, copyright protects
only those constituent elements of a work that possess more than a de minimis quantum
of creativity. Rural’s white pages, limited to basic subscriber information and arranged
alphabetically, fall short of the mark. As a statutory matter, 17 U.S.C. § 101 does not afford
protection from copying to a collection of facts that are selected, coordinated, and
arranged in a way that utterly lacks originality. Given that some works must fail, we cannot
imagine a more likely candidate. Indeed, were we to hold that Rural’s white pages pass
muster, it is hard to believe that any collection of facts could fail.
Because Rural’s white pages lack the requisite originality, Feist’s use of the listings
cannot constitute infringement. This decision should not be construed as demeaning
Rural’s efforts in compiling its directory, but rather as making clear that copyright
rewards originality, not effort. As this Court noted more than a century ago, “‘great praise
may be due to the plaintiffs for their industry and enterprise in publishing this paper, yet
the law does not contemplate their being rewarded in this way.’” Baker v. Selden. The
judgment of the Court of Appeals is
Reversed.
Questions:
1.) What balance does Feist strike between efficient information flow and property
rights? Between property in innovation and property in information?
2.) Let us return to a question we asked in Chapter 2 about the constitutional limitations
on intellectual property. In The Trade-Mark Cases the Court said: “If we should endeavor

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to classify [a trademark] under the head of writings of authors, the objections are equally
strong. In this, as in regard to inventions, originality is required.” Where does this limitation
appear in the Intellectual Property Clause? Is there a textual basis? A philosophical basis?
Both? Revisiting this question in the light of the Feist case, what is your answer?
The next two cases, which provide additional fodder for Problem 11-1, take the
statutory and constitutional originality limitation and add to it an additional statutory subject
matter wrinkle. Under § 105 of the Copyright Act, “Copyright protection under this title is
not available for any work of the United States Government, but the United States Government is not precluded from receiving and holding copyrights transferred to it by assignment,
bequest, or otherwise.” This is a hugely important and consequential component of U.S.
information policy. Unoriginal compilations of fact are not covered by copyright and even
expressive works are not covered by copyright if they are works of the Federal government.
From the free availability of weather and navigational data, to the public domain status of
government reports, NASA photographs and the CIA World Factbook, the combination of
the originality requirement and § 105 operates to shape our information environment in
profound ways. (For example, whatever other laws Edward Snowden or Bradley/Chelsea
Manning may or may not have broken, they did not violate copyright, and neither did those
who reproduced the documents they leaked.) But this combination also shapes the
availability of Federal legal materials, as the next two cases will show.

Matthew Bender & Co., Inc. v. West Publishing Co.

158 F.3d 674 (2d Cir. 1998)

JACOBS, Circuit Judge.
West Publishing Co. and West Publishing Corp. (collectively “West”) publish
compilations of reports of judicial opinions (“case reports”). Each case report consists of the
text of the judicial opinion with enhancements that for the purposes of this case can be put
in two categories: (i) independently composed features, such as a syllabus (which digests
and heralds the opinion’s general holdings), headnotes (which summarize the specific points
of law recited in each opinion), and key numbers (which categorize points of law into
different legal topics and subtopics), and (ii) additions of certain factual information to the
text of the opinions, including parallel or alternative citations to cases, attorney information,
and data on subsequent procedural history. HyperLaw, Inc. publishes compact disc-read
only memory (“CD-ROM”) compilations of Supreme Court and United States Court of
Appeals decisions, and intervened as a plaintiff to seek a judgment declaring that the
individual West case reports that are left after redaction of the first category of alterations
(i.e., the independently composed features), do not contain copyrightable material. . . .
It is true that neither novelty nor invention is a requisite for copyright protection, but
minimal creativity is required. Aside from its syllabi, headnotes and key numbers—none
of which HyperLaw proposes to copy—West makes four different types of changes to
judicial opinions that it claimed at trial are copyrightable: (i) rearrangement of information
specifying the parties, court, and date of decision; (ii) addition of certain information
concerning counsel; (iii) annotation to reflect subsequent procedural developments such as
amendments and denials of rehearing; and (iv) editing of parallel and alternate citations to
cases cited in the opinions in order to redact ephemeral and obscure citations and to add

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standard permanent citations (including West reporters). All of West’s alterations to judicial
opinions involve the addition and arrangement of facts, or the rearrangement of data
already included in the opinions, and therefore any creativity in these elements of West’s
case reports lies in West’s selection and arrangement of this information. In light of
accepted legal conventions and other external constraining factors, West’s choices on
selection and arrangement can reasonably be viewed as obvious, typical, and lacking even
minimal creativity. Therefore, we cannot conclude that the district court clearly erred in
finding that those elements that HyperLaw seeks to copy from West’s case reports are not
copyrightable, and affirm. . . .
The principal trial witness was Donna Bergsgaard, the manager of West’s manuscript
department. She specified four kinds of alterations made by West to the opinions that it
publishes in the Supreme Court Reporter and Federal Reporter and that HyperLaw intends
to copy: (i) the arrangement of prefatory information, such as parties, court, and date of
decision; (ii) the selection and arrangement of the attorney information; (iii) the arrangement
of information relating to subsequent procedural developments; and (iv) the selection of
parallel and alternative citations. [T]he district court ruled that West’s revisions to judicial
opinions were merely trivial variations from the public domain works, and that West’s case
reports were therefore not copyrightable as derivative works. In reaching this conclusion,
the district court reviewed each type of alteration and found that “West does not have a
protectible interest in any of the portions of the opinions that HyperLaw copies or intends
to copy” because West’s alterations lack even minimal creativity.
DISCUSSION
II
Works of the federal government are not subject to copyright protection; the text of
judicial decisions may therefore be copied at will. 17 U.S.C. § 105. Federal judicial opinions
may, however, form part of a compilation. The Copyright Act defines “compilation” as “a
work formed by the collection and assembling of preexisting materials or of data that are
selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship.” 17 U.S.C. § 101. West has filed a certificate of
copyright registration for every paperbacked advance sheet and bound permanent volume
of the Supreme Court Reporter and Federal Reporter, and each certificate characterizes the
copyrighted work as a “compilation.” Under Feist Publications, Inc. v. Rural Telephone
Serv. Co. (1991), an infringement claim for a compilation has two elements: “(1) ownership
of a valid copyright, and (2) copying of constituent elements of the work that are original.”
But HyperLaw has not signaled its intent to copy the text of every case included in
particular volumes of West case reporters or the case reporters’ selection and arrangement
of cases; HyperLaw’s intent is to copy particular, though numerous, individual case
reports. HyperLaw seeks a declaratory judgment that these case reports—after removal of
the syllabus, headnotes, and key numbers—contain no copyrightable material.
A.
HyperLaw contends that each case report should be analyzed as a derivative work,
which is defined under the Copyright Act as, inter alia, “[a] work consisting of editorial
revisions, annotations, elaborations, or other modifications which, as a whole, represent
an original work of authorship.” 17 U.S.C. § 101. The district court adopted this view and
analyzed the individual case report as a derivative work, but found it wanting in the
requisite originality. West contends that each case report is a compilation, i.e., a collection
of facts that have been distinctively selected and arranged. No one claims that a case report

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is anything other than a derivative work or a compilation.
The House Report on the 1976 Copyright Act distinguishes between a derivative
work and a compilation:
Between them the terms . . . comprehend every copyrightable work that
employs preexisting material or data of any kind. There is necessarily
some overlapping between the two, but they basically represent different
concepts. A “compilation” results from a process of selecting, bringing
together, organizing, and arranging previously existing material of all
kinds, regardless of whether the individual items in the material have
been or ever could have been subject to copyright. A “derivative work,”
on the other hand, requires a process of recasting, transforming, or
adapting “one or more preexisting works”; the “preexisting work” must
come within the general subject matter of copyright set forth in section
102, regardless of whether it is or was ever copyrighted. . . .
We need not categorize West’s case reports as either derivative works or compilations
in order to decide this case. Copyright protection is unavailable for both derivative works
and compilations alike unless, when analyzed as a whole, they display sufficient originality
so as to amount to an “original work of authorship.” . . . As West and HyperLaw seemingly
agree, the question presented is whether West’s alterations to the case reports, when considered collectively, demonstrate sufficient originality and creativity to be copyrightable. . . .
Our decision in this case does not mean that an editor seeking to create the most
accurate edition of another work never exercises creativity.13 As West argues, our
decisions establish a low threshold of creativity, even in works involving selection from
among facts. But those cases involved the exercise of judgments more evaluative and
creative than West exercises in the four elements of the case reports that HyperLaw intends
to copy. For instance, in Kregos thousands of different permutations of pitching statistics
were available for inclusion in the publisher’s pitching chart. See Kregos; see also Eckes
v. Card Prices Update (2d Cir. 1984) (baseball card guide which selected 5,000
“premium” baseball cards from among 18,000 eligible baseball cards was copyrightable).
In Key Publications, we found sufficient creativity because the author of the yellow pages
“excluded from the directory those businesses she did not think would remain open for
very long.” In CCC Information Services, we found sufficient creativity in the selection
of optional car features and number of years’ models to be included in a used-car price
compilation. . . . In each of these cases, the compiler selected from among numerous
choices, exercising subjective judgments relating to taste and value that were not obvious
and that were not dictated by industry convention. . . .
It is true that some types of editing require little creativity. See, e.g., Grove Press, Inc. v. Collectors
Publication, Inc. (C.D. Cal. 1967) (“Plaintiff made approximately forty thousand changes from the Verlag
copy in producing its edition. These changes consisted almost entirely of elimination and addition of
punctuation, changes of spelling of certain words, elimination and addition of quotation marks, and correction
of typographical errors. These changes required no skill beyond that of a [1967] high school English student
and displayed no originality. These changes are found to be trivial.”). In addition, convention and external
forces may, as here, limit the practical choices available so as to eliminate any creativity. On the other hand,
preparing an edition from multiple prior editions, or creating an accurate version of the missing parts of an
ancient document by using conjecture to determine the probable content of the document may take a high
amount of creativity. See, e.g., Abraham Rabinovich, Scholar: Reconstruction of Dead Sea Scroll Pirated,
Wash. Times: Nat’l Wkly. Edition, Apr. 12, 1998, at 26 (discussing scholar’s copyright infringement claim in
Israeli Supreme Court relating to his reconstruction of the missing parts of a “Dead Sea Scroll” through the
use of “educated guesswork” based on knowledge of the sect that authored work).
13

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CONCLUSION
The district court did not clearly err in concluding that the elements of West’s case
reports that HyperLaw seeks to copy are not copyrightable. The judgment of the district
court is affirmed.
SWEET, District Judge.
The key issue in this appeal is whether West’s Supreme Court Reporter and Federal
Reporter case reports in the context of its overall reporter citation system meet the
constitutional and statutory requirement of creative originality. Because the majority
imposes a standard that demands significantly more than the “modicum” of originality
required by Feist Publications, Inc. v. Rural Telephone Service Company, Inc., and far
more than the “non-trivial” variation required by this Court for derivative-work and
compilation copyright protection, I respectfully dissent. . . .
Contrary to the majority’s holding, however, I find that West’s selection and
arrangement of factual annotations to public domain judicial opinions, considered as a
whole, is copyrightable.
Originality alone—whether the “author make[s] the selection or arrangement
independently (i.e. without copying that selection or arrangement from another work)”—
is not sufficient. Feist. The work must also “display some minimal level of creativity.”
Creativity for copyright purposes is not a philosophical question: the “creative spark” need
only pass “the narrowest and most obvious limits.” The “modicum of creativity” requires
simply that the author prove “the existence of . . . intellectual production, of thought, and
conception.” Feist. Thus, while the majority is correct that it is “not a goal of copyright
law” to encourage the creation of compilations which lack “sufficient creativity,” it is wellestablished that the required level of creativity is “extremely low.” Feist. . . .
The fact that federal judges publish written opinions differently than West is
sufficient reason to conclude that West’s version requires some “thought” and is
sufficiently “creative” to satisfy the modicum necessary for copyrightability. . . .
For the reasons stated, I conclude the summary judgment granted in favor of
HyperLaw should be reversed.

Matthew Bender & Co., Inc. v. West Publishing Co.

158 F.3d 693 (2d Cir. 1998)

JACOBS, Circuit Judge.
Defendants-appellants West Publishing Co. and West Publishing Corp. (collectively “West”) create and publish printed compilations of federal and state judicial opinions.
Plaintiff-appellee Matthew Bender & Company, Inc. and intervenor-plaintiff-appellee
HyperLaw, Inc. (collectively “plaintiffs”) manufacture and market compilations of
judicial opinions stored on compact disc-read only memory (“CD-ROM”) discs, in which
opinions they embed (or intend to embed) citations that show the page location of the
particular text in West’s printed version of the opinions (so-called “star pagination”).1
Bender and HyperLaw seek judgment declaring that star pagination will not infringe
West’s copyrights in its compilations of judicial opinions.
This cross-reference method is called “star pagination” because an asterisk and citation or page number are
inserted in the text of the judicial opinion to indicate when a page break occurs in a different version of the case.

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West’s primary contention on appeal is that star pagination to West’s case reporters
allows a user of plaintiffs’ CD-ROM discs (by inputting a series of commands) to
“perceive” West’s copyright-protected arrangement of cases, and that plaintiffs’ products
(when star pagination is added) are unlawful copies of West’s arrangement. We reject
West’s argument for two reasons:
A. Even if plaintiffs’ CD-ROM discs (when equipped with star pagination)
amounted to unlawful copies of West’s arrangement of cases under the Copyright Act, (i)
West has conceded that specification of the initial page of a West case reporter in plaintiffs’
products (“parallel citation”) is permissible under the fair use doctrine, (ii) West’s
arrangement may be perceived through parallel citation and thus the plaintiffs may lawfully
create a copy of West’s arrangement of cases, (iii) the incremental benefit of star pagination
is that it allows the reader to perceive West’s page breaks within each opinion, which are
not protected by its copyright, and (iv) therefore star pagination does not create a “copy”
of any protected elements of West’s compilations or infringe West’s copyrights.
B. In any event, under a proper reading of the Copyright Act, the insertion of star
pagination does not amount to infringement of West’s arrangement of cases. . . .
[The court rejected an earlier decision from the 8th Circuit, called West Publishing
Co. which had found for West.] At bottom, West Publishing Co. rests upon the now
defunct “sweat of the brow” doctrine. That court found that LEXIS had infringed West’s
copyright simply because it supplanted much of the need for West’s case reporters
through wholesale appropriation of West’s page numbers. In reaching this conclusion,
the court (i) noted that LEXIS’s appropriation would deprive West of a large part of what
it “[had] spent so much labor and industry in compiling,” [and cited] classic “sweat of
the brow” cases that were overruled in Feist. Thus, the Eighth Circuit in West Publishing
Co. erroneously protected West’s industrious collection rather than its original creation.
Because Feist undermines the reasoning of West Publishing Co., see United States v.
Thomson Corp. (D.D.C. 1996), we decline to follow it.
CONCLUSION
We hold that Bender and HyperLaw will not infringe West’s copyright by inserting
star pagination to West’s case reporters in their CD-ROM disc version of judicial
opinions. The judgement of the district court is affirmed.
SWEET, District Judge.
I respectfully dissent.
This appeal from the grant of summary judgment in favor of the appellee Bender
presents challenging issues, the extent of copyright protection for compilations under the
§ 501(a) and § 106(1) and (3) of Title 17, U.S.C., what constitutes copying in the electronic
age, and the propriety of summary judgment in determining issues of fair use. Because the
majority reaches conclusions on the first two issues, with which I disagree, and consequently
failed to address the third issue, I feel required to dissent, emboldened by the holdings of
the three other courts which have considered the issue, West Pub. Co. v. Mead Data Central,
Inc. (D. Minn. 1985), [aff’d, 799 F.2d 1219 (8th Cir. 1986), cert. denied, 479 U.S. 1070
(1987)]; Oasis Pub. Co. v. West Pub. Co. (D. Minn. 1996), and reached conclusions contrary
to those stated by the majority. By concluding that page numbers in the context of the West
citation system are facts rather than an expression of originality the majority permits the
appellee Bender and the intervenor HyperLaw to appropriate the practical and commercial
value of the West compilation.
The West page numbers which are inserted by appellee Bender in the text of each of

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its CD-ROM disks by star pagination result from the totality of the West compilation
process which includes its concededly original and copyrightable work, i.e. attorney
description, headnotes, method of citation and emending of parallel or alternate citations.
These result in a compilation work with page numbers assigned mechanically. The West
page numbers and the corresponding Bender and HyperLaw star pagination are the keys
which open the door to the entire West citation system which as the majority noted is an
accepted, and in some instances, a required element for the citation of authorities.
In my view West’s case arrangements, an essential part of which is page citations,
are original works of authorship entitled to copyright protection. Comprehensive
documentation of West’s selection and arrangement of judicial opinions infringes the
copyright in that work.
This reasoning is consistent with Feist. As discussed above, the majority notes that
the compiler’s copyright is “thin.” Feist. Therefore, “a subsequent compiler remains free
to use the facts contained in another’s publication to aid in preparing a competing work, so
long as the competing work does not feature the same selection and arrangement.” In this
case, allowing plaintiffs to use the page numbers contained in West’s publication enables
them to feature West’s same selection and arrangement.2 Indeed, were it not for the ability
to reproduce West’s arrangement, its pagination would be of limited (if any) use. . . .
Some of the most seminal developments in copyright law have been driven by
technological change. There was a time when people questioned whether photographs or
advertisements were copyrightable. Here again it is necessary to reconcile technology
with pre-electronic principles of law. Clearly, plaintiffs’ CD-ROM disks are not “copies”
in the traditional sense. Yet, plaintiffs provide the ability for a user to push a button or
two and obtain West’s exact selection and arrangement. This technological capacity
presents a new question. The majority’s answer threatens to eviscerate copyright
protection for compilations. . . .
For these reasons I believe the grant of summary judgment granting the declaratory
judgment requested by Bender was error, and I therefore dissent from the majority’s
affirmance of that judgment.
Questions:
1.) Does any user actually want West’s selection and arrangement, or just the page
numbers that that selection and arrangement results in, because those are the authoritative
way to cite the case? Does that matter?
2.) Judge Sweet claims a user could “push a button or two and obtain West’s exact
selection and arrangement.” But a user could also push “a button or two” and arrange the
cases by alphabetical ordering of case name, of defendant’s name(s), of judge’s name, of
day of the week, of the type of law being decided, or any of a hundred more possible
methods. If many forms of ordering, selection or arrangement can be cybernetically
imposed, by software, on a mass of material dumped, unordered, on a hard drive or DVD,
does Judge Sweet’s answer not bring up an opposite problem? All compilations could
2
It is immaterial that plaintiffs’ products may display other arrangements as well as West’s. The capability
of a CD-ROM to display more than one arrangement does not make the encoding of an original selection
and arrangement such as West’s any less of an infringement.
It is also irrelevant that plaintiffs’ products may contain material beyond West’s selection and
arrangement. Infringement is determined by how much of the copyright owner’s work was taken, not by
what else the copier’s work contains. See e.g., Warner Bros., Inc. v. American Broadcasting Cos., Inc. (2d
Cir. 1983).

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potentially be “immanent within,” implicitly present within, the database. Does that
therefore mean that any system for flexibly arranging data inherently violates compilation
copyrights on all of the arrangements it could be used to emulate?
Note
The West cases involved Federal legal materials, which are clearly in the public
domain under § 105’s exclusion for “any work of the United States Government.” But what
about the laws of states and municipalities—can they be copyrighted? In Veeck v. Southern
Building Code Congress International (5th Cir. 2002), an en banc panel held that once a
privately authored building code was enacted into local laws, it could no longer be
copyrighted. Citing to two early Supreme Court cases “holding that ‘the law’ is not
copyrightable,” the court stated: “as law, the model codes enter the public domain and are
not subject to the copyright holder’s exclusive prerogatives” (emphasis in original). See
Wheaton v. Peters (1834); Banks v. Manchester (1888). Alternatively, the court held that the
building codes were either uncopyrightable “facts,” or uncopyrightable under the merger
doctrine as “the unique, unalterable expression of the ‘idea’ that constitutes local law.”
More recently, in Georgia v. Public.Resource.Org (PRO) (2020), the Supreme
Court held that the Official Code of Georgia Annotated (“OCGA”) was not copyrightable.
In doing so, it revisited Wheaton and Banks, which had developed what the Court dubbed
the “government edicts doctrine.” “Officials empowered to speak with the force of law
cannot be the authors of—and therefore cannot copyright—the works they create in the
course of their official duties.” The Court explained: “The animating principle behind this
rule is that no one can own the law. ‘Every citizen is presumed to know the law,’ and ‘it
needs no argument to show . . . that all should have free access’ to its contents.” Those
earlier cases had dealt with works by judges, including opinions and non-binding
materials such as syllabi and headnotes. In this case, the work was the annotations to the
state code, actually written by an outside contractor, but deemed to be “authored” by the
legislature by the Court in this case. Thus the annotations were not copyrightable, even
though the annotations did not carry the force of law.
After PRO, it is clear that state and local laws produced by the government are in
the public domain. But what about privately authored codes and standards, such as the
model building code in Veeck, that are subsequently adopted into law? If you want to
“bring your house up to code” in Durham and a private trade association has written a
code, which the state enacts as the law of North Carolina, does this code enter the public
domain when it gains the force of law as Veeck would imply? If the focus is merger (there
is only one correct way of stating the ideas and facts of the law), or even due process
(citizens are presumed to know the law) and the question of who initially wrote the code
would be irrelevant. PRO on the other hand focused on the question of government
“authorship,” though it then proceeded to define that authorship very broadly, perhaps for
the reasons Veeck put forward.
True, the PRO Court also stated more categorically that “no one can own the law,”
indicating that government authorship does not mark the outer bounds of its holding. At
the time of writing this book, organizations such as the International Code Council
continue to bring lawsuits asserting copyright over model codes that are both “the law,”
and were privately drafted. Are these codes in the public domain, so that anyone can make
them available to those who need them? Under Veeck, of course, those codes are not
copyrightable. Both its reading of Supreme Court precedent and of copyright’s idea-

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fact/expression dichotomy and merger doctrine make this clear. We believe this answer is
correct, but PRO’s curious mixture of formalism on the surface and constitutional and
policy concerns beneath, makes it hard to know.

James Boyle, A Natural Experiment

Financial Times, Nov. 22, 2004

Imagine a process of reviewing prescription drugs which goes like this: representatives
from the drug company come to the regulators and argue that their drug works well and
should be approved. They have no evidence of this beyond a few anecdotes about people
who want to take it and perhaps some very simple models of how the drug might affect
the human body. The drug is approved. No trials, no empirical evidence of any kind, no
follow-up. Or imagine a process of making environmental regulations in which there
were no data, and no attempts to gather data, about the effects of the particular pollutants
being studied. Even the harshest critics of drug regulation or environmental regulation
would admit we generally do better than this. But this is often the way we make intellectual property policy.
So how do we decide the ground-rules of the information age? Representatives of
interested industries come to regulators and ask for another heaping slice of monopoly
rent in the form of an intellectual property right. They have doom-laden predictions, they
have anecdotes, carefully selected to pluck the heartstrings of legislators, they have
celebrities who testify—often incoherently, but with palpable charisma—and they have
very, very simple economic models. The basic economic model here is “If you give me
a larger right, I will have a larger incentive to innovate. Thus the bigger the rights, the
more innovation we will get. Right?” Well, not exactly. Even without data, the models
are obviously flawed—copyrighting the alphabet will not produce more books, patenting
E=mc2 will not yield more scientific innovation. Intellectual property creates barriers to,
as well as incentives towards, innovation. Clearly the “more is better” argument has
limits. Extensions of rights can help or hurt, but without economic evidence beforehand
and review afterwards, we will never know. In the absence of evidence on either side,
the presumption should obviously be against creating a new legalised monopoly, but still
the empirical emptiness of the debates is frustrating.
This makes the occasion where there actually is some evidence a time for
celebration. What we really need is a test case where one country adopts the proposed
new intellectual property right and another does not, and we can assess how they are both
doing after a number of years.
There is such a case. It is the “database right.” Europe adopted a Database Directive
in 1996 which both gave a high level of copyright protection to databases, and conferred a
new “sui generis” database right even on unoriginal compilations of facts. In the United
States, by contrast, in a 1991 case called Feist, the Supreme Court made it clear that unoriginal compilations of facts are not copyrightable. (The case is not as revolutionary as it is
claimed to be. Most of the appeals courts in the United States had long held this to be the
case. In fact, a tenet of the US intellectual property system is that neither facts nor ideas can
be owned.) Since 1991 the U.S. Congress has managed to resist frenzied attempts by a few
database companies to create a special database right over facts. Interestingly, apart from

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academics, scientists and civil libertarians, many database companies, and even those wellknown communist property-haters, the U.S. Chamber of Commerce, oppose the creation of
such a right. They believe that database providers can adequately protect themselves with
contracts, technical means such as passwords, can rely on providing tied services and so on.
Moreover, they argue that strong database protection may make it harder to generate
databases in the first place; the facts you need may be locked up. The pressure to create a
new right continues, however, aided by the cries that US must “harmonise” with Europe. So
here we have our natural experiment. Presumably the government economists are hard at
work both in the US and the EU, seeing if the right actually worked? Umm. . . . No.
Despite the fact that the European Commission has a legal obligation to review the
Database Directive for its effects on competition (they are three years late in issuing their
report) no attention appears to be being paid to the actual evidence of whether the
Directive helps or hurts in the EU, or whether the database industry in the US has collapsed
or flourished. That is a shame, because the evidence is there, and it is fairly shocking.
Intellectual property rights are a form of state-created monopoly and “the general
tendency of monopolies,” as Macaulay pointed out, is to “make things dear, to make them
scarce, and to make them bad.” Monopolies are an evil, but they must sometimes be
accepted when they are necessary to the production of some good, some particular social
goal. In this case, the “evil” is obviously going to be an increase in price of databases, and
the legal ability to exclude competitors from their use—that, after all is the point of granting
the new right. The “good” is that we are supposed to get lots of new databases, databases
that we would not have had but for the existence of the database right.
If the database right were working, we would expect positive answers to three crucial
questions. First, has the European database industry’s rate of growth increased since 1996,
while the US database industry has languished? (The drop off in the US database industry
ought to be particularly severe after 1991 if the proponents of database protection are correct;
they argued the Feist case was a change in current law and a great surprise to the industry.)
Second, are the principal beneficiaries of the database right in Europe producing
databases they would not have produced otherwise? Obviously if a society is handing
over a database right for a database that would have been created anyway, it is
overpaying—needlessly increasing prices for consumers and burdens for competitors.
This goes to the design of the right—has it been crafted too broadly, so that it is not being
targeted to those areas where it is needed to encourage innovation?
Third, and this one is harder to judge, is the right promoting innovation and
competition rather than stifling it? For example, if the existence of the right allowed a
one-time surge of newcomers to the market who then used their rights to discourage new
entrants, or if we promoted some increase in databases but made scientific aggregation
of large amounts of data harder overall, then the database right might actually be stifling
the innovation it is designed to foment.
Those are the three questions that any review of the Database Directive must
answer. But we have preliminary answers to those three questions and they are either
strongly negative or extremely doubtful.
Are database rights necessary for a thriving database industry? The answer is a clear
“no.” In the United States, the database industry has grown more than 25-fold since 1979
and—contrary to those who paint the Feist case as a revolution—for that entire period, in
most of the United States, it was clear that unoriginal databases were not covered by
copyright. The figures are even more interesting in the legal database market. The two
major proponents of database protection in the United States are Reed Elsevier, the owner

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of Lexis, and Thomson Publishing, the owner of Westlaw. Fascinatingly, both companies
made their key acquisitions in the US legal database market after the Feist decision, at
which point no one could have thought unoriginal databases were copyrightable. This
seems to be some evidence that they believe they could make money even without a
database right. How? In the old-fashioned way: competing on features, accuracy, tied
services, making users pay for entry to the database and so on.
If those companies believed there were profits to be made, they were right. Jason
Gelman, one of our students, points out in a recent paper that Thomson’s Legal Regulatory
division had a profit margin of over 26% for the first quarter of 2004. Reed Elsevier’s 2003
profit margin for LexisNexis was 22.8%. Both profit margins were significantly higher than
the company average and both are earned primarily in the $6 billion US legal database
market, a market which is thriving without strong intellectual property protection over
databases. (First rule of thumb for regulators: when someone with a profit margin over 20%
asks you for additional monopoly protection, pause before agreeing.)
What about Europe? There is some good news for the proponents of database
protection. As Hugenholtz, Maurer, and Onsrud point out in a nice article in Science
Magazine, there was a sharp, one-time spike in numbers of companies entering the
European database market immediately following the implementation of the Directive in
member states. Yet their work, and “Across Two Worlds,” a fascinating study by Maurer,
suggests that the rate of entry then falls back to levels similar to those before the Directive.
Maurer’s analysis shows that the attrition rate is also very high in some European markets
in the period following the passage of the Directive—even with the new right, many companies drop out.
At the end of the day, the British database industry—the strongest performer in
Europe—adds about 200 databases in the three years immediately after the implementation
of the Directive. In France there is little net change in the number of databases and the
number of providers falls sharply. In Germany, the industry added nearly 300 databases
immediately following the Directive—a remarkable surge—about 200 of which rapidly
disappeared. During the same period the US industry adds about 900 databases. Bottom
line? Europe’s industry did get a one-time boost, and some of those firms have stayed in
the market; that is a benefit, though a costly one. But database growth rates have gone back
to pre-Directive levels, while the anti-competitive costs of database protection are now a
permanent fixture of the European landscape. The US, by contrast, gets a nice steady
growth rate in databases without paying the monopoly cost. (Second rule of thumb for
regulators: Do no harm! Do not create rights without strong evidence that the incentive
effect is worth the anti-competitive cost.)
Now the second question. Is the Database Directive encouraging the production of
databases we would not have got otherwise? Here the evidence is clear and disturbing.
Again, Hugenholtz et al, point out that the majority of cases brought under the Directive
have been about databases that would have been created anyway—telephone numbers,
television schedules, concert times. A review of more recent cases reveals the same pattern.
These databases are inevitably generated by the operation of the business in question and
cannot be independently compiled by a competitor. The database right simply serves to
limit competition in the provision of the information. Last week, the European Court of
Justice implicitly underscored this point in a series of cases concerning football scores,
horse-racing results and so on. Rejecting a stunningly protectionist and one-sided opinion
from its Advocate General, the court ruled that the mere running of a business which
generates data does not count as “substantial investment” enough to trigger the database

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right. It would be nice to think that this is the beginning of some scepticism about the reach
of the Directive, scepticism that might even penetrate the Commission’s review of the
Directive’s anti-competitive effects. Yet the Court provides little discussion for the
economic reasons behind its interpretation; the analysis is merely semantic and definitional, a sharp contrast to its competition decisions.
So what kinds of databases are being generated by this bold new right? The answer
is somewhere between bathos and pathos. Here are some of the wonderful “databases”
that people found it worthwhile litigating over: A website, consisting of a collection of
259 hyper-links to “parenting resources,” a collection of poems, an assortment of
advertisements, headings referring to local news, charts of popular music. The sad list
goes on and on. The European Commission might ask itself whether these are really the
kind of “databases” which we need a legal monopoly to encourage, and that we want to
tie up judicial resources protecting. The point that many more such factual resources can
be found online in the United States without such protection, also seems worthy of note.
At very least, the evidence indicates that the right is drawn much too broadly and
triggered too easily in ways that are profoundly anti-competitive.
Finally, is the database right encouraging scientific innovation or hurting it? Here
the evidence is merely suggestive. Scientists have claimed that the European database
right, together with the perverse failure of European governments to take advantage of
the limited scientific research exceptions allowed by the Directive, have made it much
harder to aggregate data, to replicate studies, and to judge published articles. In fact,
academic scientific bodies have been among the strongest critics of database protection.
But negative evidence, by its nature, is hard to produce; “show me the science that did
not get done!” Certainly, both US science and commerce have benefited extraordinarily
from the openness of US data policy. This is an issue I will deal with in a later column.
I was not always opposed to intellectual property rights over data. Indeed, in a
book written before the enactment of the Database Directive, I said that there was a
respectable economic argument that such protection might be warranted and that we
needed research on the issue. Unfortunately, Europe got the right without the research.
The facts are now in. If the European Database Directive were a drug, the government
would be pulling it from the market until its efficacy and harmfulness could be
reassessed. At the very least, the Commission needs a detailed empirical review of the
Directive’s effects, and needs to adjust the Directive’s definitions and to fine-tune its
limitations. But there is a second lesson. There is more discussion of the empirical
economic effects of the Database Directive in this 2000 word column than there is in the
600 page review of the effects of the Directive that the European Commission paid a
private company to conduct. That is a scandal. And it is a scandal that is altogether typical
of the way we make intellectual property policy.
P ROBLEM 11-1
You represent the West Corporation which has asked for your advice after its two
losses in the HyperLaw cases. West has asked you to advise them on the relative merits
of three different solutions to the problem presented to the company by these cases.
1.) Amendment of the copyright act to specify that page numbers in a law report are
copyrightable.

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2.) a.) Amendment of the copyright act to specify that any purposeful arrangement in
sequence is sufficiently original to warrant copyright protection over the resulting
sequence and that b.) “any reproduction of uncopyrightable textual material, accompanied by textual, numerical or technological references that allow a user to identify
precisely the place of any given bit of text in an authoritative sequence produced by
another, shall constitute a violation of the exclusive rights held by the creator of that
authoritative sequence.”
3.) [And it is on this alternative that we will concentrate our time.] The passage of a
statute, justified under the Congress’ Commerce Clause power, which prohibits (inter
alia) the following: (cf. HR Bill 3261: Database and Collections of Information Misappropriation Act (Introduced in House)).
Sec. 3. Prohibition Against Misappropriation Of Databases.
(a) LIABILITY—Any person who makes available in commerce to
others a quantitatively substantial part of the information in a database
generated, gathered, or maintained by another person, knowing that
such making available in commerce is without the authorization of that
person (including a successor in interest) or that person’s licensee, when
acting within the scope of its license, shall be liable for the remedies set
forth in section 7 if—
(1) the database was generated, gathered, or maintained through
a substantial expenditure of financial resources or time;
(2) the unauthorized making available in commerce occurs in a
time sensitive manner and inflicts injury on the database or a
product or service offering access to multiple databases; and
(3) the ability of other parties to free ride on the efforts of the plaintiff would so reduce the incentive to produce the product or service
that its existence or quality would be substantially threatened.
(b) INJURY—For purposes of subsection (a), the term ‘inflicts an
injury’ means serving as a functional equivalent in the same market as
the database in a manner that causes the displacement, or the disruption
of the sources, of sales, licenses, advertising, or other revenue.
(c) TIME SENSITIVE—In determining whether an unauthorized
making available in commerce occurs in a time sensitive manner, the
court shall consider the temporal value of the information in the
database, within the context of the industry sector involved.
Which of these alternatives do you think is best for your client to pursue? Why?
What are the particular obstacles to the third alternative? Statutory drafting is a
kind of advocacy—aiming to reassure possible opponents, while still providing the
protection desired. Why was this section drafted the way it was? In particular, how
far would this new intellectual property right reach? Is this the same definition of
time-sensitivity as is implied in the INS v. AP case? Is Section 3 constitutional? Does
it outlaw the FANtasy football games discussed in Chapter 1?

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2.) The Idea-Expression Distinction

Baker v. Selden

101 U.S. 99 (1880)

Mr. Justice BRADLEY delivered the opinion of the court.
Charles Selden, the testator of the complainant in
this case, in the year 1859 took the requisite steps for
obtaining the copyright of a book, entitled “Selden’s
Condensed Ledger, or Book-keeping Simplified,” the
object of which was to exhibit and explain a peculiar
system of book-keeping. In 1860 and 1861, he took the
copyright of several other books, containing additions
to and improvements upon the said system. The bill of
complaint was filed against the defendant, Baker, for an
alleged infringement of these copyrights. The latter, in
his answer, denied that Selden was the author or
designer of the books, and denied the infringement
charged, and contends on the argument that the matter
alleged to be infringed is not a lawful subject of
copyright. . . .
The book or series of books of which the com- Image from Selden’s Condensed
plainant claims the copyright consists of an introduc- Ledger and Condensed Memorandum
tory essay explaining the system of book-keeping Book (1861).
referred to, to which are annexed certain forms or blanks, consisting of ruled lines, and
headings, illustrating the system and showing how it is to be used and carried out in
practice. This system effects the same results as book-keeping by double entry; but, by a
peculiar arrangement of columns and headings, presents the entire operation, of a day, a
week, or a month, on a single page, or on two pages facing each other, in an accountbook. The defendant uses a similar plan so far as results are concerned; but makes a
different arrangement of the columns, and uses different headings. If the complainant’s
testator had the exclusive right to the use of the system explained in his book, it would
be difficult to contend that the defendant does not infringe it, notwithstanding the
difference in his form of arrangement; but if it be assumed that the system is open to
public use, it seems to be equally difficult to contend that the books made and sold by
the defendant are a violation of the copyright of the complainant’s book considered
merely as a book explanatory of the system. Where the truths of a science or the methods
of an art are the common property of the whole world, any author has the right to express
the one, or explain and use the other, in his own way. As an author, Selden explained the
system in a particular way. It may be conceded that Baker makes and uses account-books
arranged on substantially the same system; but the proof fails to show that he has violated
the copyright of Selden’s book, regarding the latter merely as an explanatory work; or
that he has infringed Selden’s right in any way, unless the latter became entitled to an
exclusive right in the system.
The evidence of the complainant is principally directed to the object of showing that
Baker uses the same system as that which is explained and illustrated in Selden’s books. It
becomes important, therefore, to determine whether, in obtaining the copyright of his books,

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he secured the exclusive right to the use of the system or method of book-keeping which the
said books are intended to illustrate and explain. It is contended that he has secured such
exclusive right, because no one can use the system without using substantially the same
ruled lines and headings which he has appended to his books in illustration of it. In other
words, it is contended that the ruled lines and headings, given to illustrate the system, are a
part of the book, and, as such, are secured by the copyright; and that no one can make or use
similar ruled lines and headings, or ruled lines and headings made and arranged on
substantially the same system, without violating the copyright. And this is really the question
to be decided in this case. Stated in another form, the question is, whether the exclusive
property in a system of book-keeping can be claimed, under the law of copyright, by means
of a book in which that system is explained? The complainant’s bill, and the case made
under it, are based on the hypothesis that it can be. . . .
There is no doubt that a work on the subject of book-keeping, though only explanatory of well-known systems, may be the subject of a copyright; but, then, it is claimed
only as a book. Such a book may be explanatory either of old systems, or of an entirely
new system; and, considered as a book, as the work of an author, conveying information
on the subject of book-keeping, and containing detailed explanations of the art, it may be
a very valuable acquisition to the practical knowledge of the community. But there is a
clear distinction between the book, as such, and the art which it is intended to illustrate.
The mere statement of the proposition is so evident, that it requires hardly any argument
to support it. The same distinction may be predicated of every other art as well as that of
book-keeping. A treatise on the composition and use of medicines, be they old or new; on
the construction and use of ploughs, or watches, or churns; or on the mixture and
application of colors for painting or dyeing; or on the mode of drawing lines to produce
the effect of perspective,—would be the subject of copyright; but no one would contend
that the copyright of the treatise would give the exclusive right to the art or manufacture
described therein. The copyright of the book, if not pirated from other works, would be
valid without regard to the novelty, or want of novelty, of its subject-matter. The novelty
of the art or thing described or explained has nothing to do with the validity of the
copyright. To give to 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. The claim to an invention or discovery of an art or manufacture must be subjected
to the examination of the Patent Office before an exclusive right therein can be obtained;
and it can only be secured by a patent from the government.
The difference between the two things, letters-patent and copyright, may be illustrated by reference to the subjects just enumerated. Take the case of medicines. Certain
mixtures are found to be of great value in the healing art. If the discoverer writes and
publishes a book on the subject (as regular physicians generally do), he gains no exclusive right to the manufacture and sale of the medicine; he gives that to the public. If
he desires to acquire such exclusive right, he must obtain a patent for the mixture as a
new art, manufacture, or composition of matter. He may copyright his book, if he pleases;
but that only secures to him the exclusive right of printing and publishing his book. So
of all other inventions or discoveries.
The copyright of a book on perspective, no matter how many drawings and illustrations it may contain, gives no exclusive right to the modes of drawing described,
though they may never have been known or used before. By publishing the book, without
getting a patent for the art, the latter is given to the public. The fact that the art described

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307

in the book by illustrations of lines and figures which are reproduced in practice in the
application of the art, makes no difference. Those illustrations are the mere language
employed by the author to convey his ideas more clearly. Had he used words of
description instead of diagrams (which merely stand in the place of words), there could
not be the slightest doubt that others, applying the art to practical use, might lawfully
draw the lines and diagrams which were in the author’s mind, and which he thus
described by words in his book.
The copyright of a work on mathematical science cannot give to the author an
exclusive right to the methods of operation which he propounds, or to the diagrams which
he employs to explain them, so as to prevent an engineer from using them whenever
occasion requires. The very object of publishing a book on science or the useful arts is
to communicate to the world the useful knowledge which it contains. But this object
would be frustrated if the knowledge could not be used without incurring the guilt of
piracy of the book. And where the art it teaches cannot be used without employing the
methods and diagrams used to illustrate the book, or such as are similar to them, such
methods and diagrams are to be considered as necessary incidents to the art, and given
therewith to the public; not given for the purpose of publication in other works
explanatory of the art, but for the purpose of practical application.
Of course, these observations are not intended to apply to ornamental designs, or
pictorial illustrations addressed to the taste. Of these it may be said, that their form is their
essence, and their object, the production of pleasure in their contemplation. This is their
final end. They are as much the product of genius and the result of composition, as are the
lines of the poet or the historian’s periods. On the other hand, the teachings of science and
the rules and methods of useful art have their final end in application and use; and this
application and use are what the public derive from the publication of a book which
teaches them. But as embodied and taught in a literary composition or book, their essence
consists only in their statement. This alone is what is secured by the copyright. The use
by another of the same methods of statement, whether in words or illustrations, in a book
published for teaching the art, would undoubtedly be an infringement of the copyright.
Recurring to the case before us, we observe that Charles Selden, by his books,
explained and described a peculiar system of book-keeping, and illustrated his method
by means of ruled lines and blank columns, with proper headings on a page, or on
successive pages. Now, whilst no one has a right to print or publish his book, or any
material part thereof, as a book intended to convey instruction in the art, any person may
practise and use the art itself which he has described and illustrated therein. The use of
the art is a totally different thing from a publication of the book explaining it. The
copyright of a book on book-keeping cannot secure the exclusive right to make, sell, and
use account-books prepared upon the plan set forth in such book. Whether the art might
or might not have been patented, is a question which is not before us. It was not patented,
and is open and free to the use of the public. And, of course, in using the art, the ruled
lines and headings of accounts must necessarily be used as incident to it.
The plausibility of the claim put forward by the complainant in this case arises from
a confusion of ideas produced by the peculiar nature of the art described in the books which
have been made the subject of copyright. In describing the art, the illustrations and diagrams
employed happen to correspond more closely than usual with the actual work performed by
the operator who uses the art. Those illustrations and diagrams consist of ruled lines and
headings of accounts; and it is similar ruled lines and headings of accounts which, in the
application of the art, the book-keeper makes with his pen, or the stationer with his press;

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whilst in most other cases the diagrams and illustrations can only be represented in concrete
forms of wood, metal, stone, or some other physical embodiment. But the principle is the
same in all. The description of the art in a book, though entitled to the benefit of copyright,
lays no foundation for an exclusive claim to the art itself. The object of the one is
explanation; the object of the other is use. The former may be secured by copyright. The
latter can only be secured, if it can be secured at all, by letters-patent. . . .
The conclusion to which we have come is, that blank account-books are not the
subject of copyright; and that the mere copyright of Selden’s book did not confer upon
him the exclusive right to make and use account-books, ruled and arranged as designated
by him and described and illustrated in said book.
The decree of the Circuit Court must be reversed, and the cause remanded with
instructions to dismiss the complainant’s bill; and it is
So ordered.
Questions:
1.) Some courts derived from Baker v. Selden what they called “the blank form doctrine”: one could not get a copyright in a book that consisted merely of headings and
ruled lines and blank space under those headings. Does this understate or overstate the
importance of the actual rule enunciated in Baker?
2.) Is this a case about copyright not applying to ideas? To inventions? To functional
articles? To schemes in which expressive choice is impossible? To schemes where
expressive choice is possible (one could choose different schemes for classifying how to
“book” expenses and income) but once those are chosen, and become “industry
standard”—as in Generally Accepted Accounting Principles—it would hold up progress
to have the standard subject to a copyright? All of the above?

3.) Merger of Idea and Expression

Herbert Rosenthal Jewelry Corp. v. Kalpakian

446 F.2d 738 (9th Cir. 1971)

BROWNING, Circuit Judge.
Plaintiff and defendants are engaged in the design, manufacture, and sale of fine
jewelry.
Plaintiff charged defendants with infringing plaintiff’s copyright registration of a pin
in the shape of a bee formed of gold encrusted with jewels. A consent decree was entered,
reciting that the parties had agreed to a settlement of the action and entry of the decree. It
provided that plaintiff’s copyright of the jeweled bee was “good and valid in law,” that
defendants had manufactured a jeweled bee “alleged to be similar,” and that defendants were
enjoined from infringing plaintiff’s copyright and from manufacturing or selling copies of
plaintiff’s jeweled bee pin.
Later plaintiff filed a motion for an order holding defendants in contempt of the
consent decree. The district court, after an evidentiary hearing, found that while defendants
had manufactured and sold a line of jeweled bee pins, they designed their pins themselves

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after a study of bees in nature and in published works and did not copy plaintiff’s
copyrighted bee. The court further found that defendants’ jeweled bees were “not
substantially similar” to plaintiff’s bees, except that both “do look like bees.” The court
concluded that defendants had neither infringed plaintiff’s copyright nor violated the
consent decree. . . . We affirm. . . .
II
Plaintiff contends that its copyright
registration of a jeweled bee entitles it to
protection from the manufacture and sale
by others of any object that to the ordinary
observer is substantially similar in appearance. The breadth of this claim is evident.
For example, while a photograph of the
copyrighted bee pin attached to the com- Plaintiff’s jeweled bee design alongside four of
plaint depicts a bee with nineteen small defendants’ jeweled bees
white jewels on its back, plaintiff argues that its copyright is infringed by defendants’
entire line of a score or more jeweled bees in three sizes decorated with from nine to
thirty jewels of various sizes, kinds, and colors.
Although plaintiff’s counsel asserted that the originality of plaintiff’s bee pin lay
in a particular arrangement of jewels on the top of the pin, the elements of this
arrangement were never identified. Defendants’ witnesses testified that the “arrangement” was simply a function of the size and form of the bee pin and the size of the jewels
used. Plaintiff’s counsel, repeatedly pressed by the district judge, was unable to suggest
how jewels might be placed on the back of a pin in the shape of a bee without infringing
plaintiff’s copyright. He eventually conceded, “not being a jeweler, I can’t conceive of
how he might rearrange the design so it is dissimilar.”
If plaintiff’s understanding of its rights were correct, its copyright would effectively prevent others from engaging in the business of manufacturing and selling jeweled
bees. We think plaintiff confuses the balance Congress struck between protection and
competition under the Patent Act and the Copyright Act.
The owner of a patent is granted the exclusive right to exploit for a period of seventeen
years (a maximum of fourteen years for design patents) the conception that is the subject
matter of the patent. 35 U.S.C. §§ 154, 173. The grant of this monopoly, however, is
carefully circumscribed by substantive and procedural protections. To be patentable the
subject matter must be new and useful, and represent a nonobvious advance—one requiring
“more ingenuity and skill than that possessed by an ordinary mechanic acquainted with the
business”; an advance that would not be obvious to a hypothetical person skilled in the art
and charged with knowledge of all relevant developments publicly known to that point in
time. Graham v. John Deere Co. (1966). A patent is granted only after an independent
administrative inquiry and determination that these substantive standards have been met.
This determination is subject to both administrative and court review.
Copyright registration, on the other hand, confers no right at all to the conception
reflected in the registered subject matter. “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.” Mazer v. Stein (1954). Accordingly, the prerequisites for copyright registration
are minimal. The work offered for registration need only be the product of the registrant.
So long as it is not a plagiarized copy of another’s effort, there is no requirement that the
work differ substantially from prior works or that it contribute anything of value. “The

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copyright protects originality rather than novelty or invention.” . . . Because the
registrant’s protection is limited and the social cost therefore small, the life of the
copyright is long and, under current proposals, potentially even longer—now twenty-eight
years plus a renewal period of twenty-eight more, 17 U.S.C. § 24, and, under Copyright
Revision Bill § 543, 91st Congress, 1st Session, the life of the author plus fifty years.
Obviously a copyright must not be treated as equivalent to a patent lest long
continuing private monopolies be conferred over areas of gainful activity without first
satisfying the substantive and procedural prerequisites to the grant of such privileges.
Because copyright bars only copying, perhaps this case could be disposed of on the
district court’s finding that defendants did not copy plaintiff’s bee pin. . . . Any inference
of copying based upon similar appearance lost much of its strength because both pins were
lifelike representations of a natural creature. Moreover, there were differences between
defendants’ and plaintiff’s bees—notably in the veining of the wings.
Although this evidence would support a finding that defendants’ bees were their
own work rather than copied from plaintiff’s, this resolution of the problem is not entirely
satisfactory, particularly in view of the principle that copying need not be conscious, but
“may be the result of subconscious memory derived from hearing, seeing or reading the
copyrighted work at some time in the past.” Howell’s Copyright Law 129 (4th ed. 1962).
It seems unrealistic to suppose that defendants could have closed their minds to plaintiff’s
highly successful jeweled bee pin as they designed their own.
What is basically at stake is the extent of the copyright owner’s monopoly—from
how large an area of activity did Congress intend to allow the copyright owner to exclude
others? We think the production of jeweled bee pins is a larger private preserve than
Congress intended to be set aside in the public market without a patent. A jeweled bee pin
is therefore an “idea” that defendants were free to copy. Plaintiff seems to agree, for it
disavows any claim that defendants cannot manufacture and sell jeweled bee pins and
concedes that only plaintiff’s particular design or “expression” of the jeweled bee pin
“idea” is protected under its copyright. The difficulty, as we have noted, is that on this
record the “idea” and its “expression” appear to be indistinguishable. There is no greater
similarity between the pins of plaintiff and defendants than is inevitable from the use of
jewel-encrusted bee forms in both.
When the “idea” and its “expression” are thus inseparable, copying the
“expression” will not be barred, since protecting the “expression” in such circumstances
would confer a monopoly of the “idea” upon the copyright owner free of the conditions
and limitations imposed by the patent law.
Affirmed.
Questions:
1.) “The court further found that defendants’ jeweled bees were ‘not substantially
similar’ to plaintiff’s bees, except that both ‘do look like bees.’” Is the court being funny,
or is this the point of the merger doctrine? Both?
2.) To establish copyright infringement, a plaintiff must prove “(1) ownership of a valid
copyright, and (2) copying of constituent elements of the work that are original.” Feist
Publications, Inc. v. Rural Tel. Serv. Co. (1991). As a procedural matter, when should
merger be considered? As negating the cause of action in the first place since this is not
copyrightable subject matter? Or as excusing infringement by denying that it was really
“copying”? What difference does it make?

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Morrissey v. Procter & Gamble Co.

379 F.2d 675 (1st Cir. 1967)

ALDRICH, Chief Judge.
This is an appeal from a summary judgment for the defendant. The plaintiff,
Morrissey, is the copyright owner of a set of rules for a sales promotional contest of the
“sweepstakes” type involving the social security numbers of the participants. Plaintiff
alleges that the defendant, Procter & Gamble Company, infringed, by copying, almost
precisely, Rule 1. In its motion for summary judgment, based upon affidavits and
depositions, defendant denies that plaintiff’s Rule I is copyrightable material, and denies
access. The district court held for the defendant on both grounds.
Taking the second ground first, the defendant offered affidavits or depositions of all
of its allegedly pertinent employees, all of whom denied having seen plaintiff’s rules.
Although the plaintiff, by deposition, flatly testified that prior to the time the defendant
conducted its contest he had mailed to the defendant his copyrighted rules with an offer
to sell, the court ruled that the defendant had “proved” nonaccess, and stated that it was
“satisfied that no material issue as to access * * * lurks * * * [in the record.]”
The court did not explain whether it considered defendant’s showing to have
constituted proof overcoming the presumption of receipt arising from plaintiff’s
testimony of mailing, or whether it felt there was an unsatisfied burden on the plaintiff
to show that the particularly responsible employees of the defendant had received his
communication. Either view would have been error. A notice to the defendant at its
principal office, as this one assertedly was, is proper notice. There is at least an inference
that the letter reached its proper destination. . . . The presumption arising from mailing
remained in the case.1 . . .
The second aspect of the case raises a more difficult question. Before discussing it
we recite plaintiff’s Rule 1, and defendant’s Rule 1, the italicizing in the latter being ours
to note the defendant’s variations or changes.
“1. Entrants should print name, address and social security number on a
boxtop, or a plain paper. Entries must be accompanied by * * * boxtop
or by plain paper on which the name * * * is copied from any source.
Official rules are explained on * * * packages or leaflets obtained from
dealer. If you do not have a social security number you may use the name
and number of any member of your immediate family living with you.
Only the person named on the entry will be deemed an entrant and may
qualify for prize.
“Use the correct social security number belonging to the person named
on entry * * * wrong number will be disqualified.”
(Plaintiff’s Rule)
“1. Entrants should print name, address and Social Security number on
a Tide boxtop, or on [a] plain paper. Entries must be accompanied by
Tide boxtop (any size) or by plain paper on which the name ‘Tide’ is
copied from any source. Official rules are available on Tide
Sweepstakes packages, or on leaflets at Tide dealers, or you can send a
The court did not discuss, nor need we, the additional fact that the almost exact following of plaintiff’s
wording and format in an area in which there is at least some room for maneuverability, might be found of
itself to contradict defendant’s denial of access. Cf. Arnstein v. Porter.

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stamped, self-addressed envelope to: Tide ‘Shopping Fling’ Sweepstakes, P.O. Box 4459, Chicago 77, Illinois.
“If you do not have a Social Security number, you may use the name and
number of any member of your immediate family living with you. Only
the person named on the entry will be deemed an entrant and may qualify
for a prize.
“Use the correct Social Security number, belonging to the person named
on the entry wrong numbers will be disqualified.”
(Defendant’s Rule)
The district court, following an earlier decision, Gaye v. Gillis (D. Mass. 1958), took
the position that since the substance of the contest was not copyrightable, which is
unquestionably correct, Baker v. Selden (1879); and the substance was relatively simple, it
must follow that plaintiff’s rule sprung directly from the substance and “contains no original
creative authorship.” This does not follow. Copyright attaches to form of expression, and
defendant’s own proof, introduced to deluge the court on the issue of access, itself
established that there was more than one way of expressing even this simple substance. Nor,
in view of the almost precise similarity of the two rules, could defendant successfully invoke
the principle of a stringent standard for showing infringement which some courts apply
when the subject matter involved admits of little variation in form of expression.
Nonetheless, we must hold for the defendant. When the uncopyrightable subject
matter is very narrow, so that “the topic necessarily requires,” if not only one form of
expression, at best only a limited number, to permit copyrighting would mean that a party
or parties, by copyrighting a mere handful of forms, could exhaust all possibilities of
future use of the substance. In such circumstances it does not seem accurate to say that
any particular form of expression comes from the subject matter. However, it is necessary
to say that the subject matter would be appropriated by permitting the copyrighting of its
expression. We cannot recognize copyright as a game of chess in which the public can
be checkmated. Cf. Baker v. Selden.
Upon examination the matters embraced in Rule 1 are so straightforward and
simple that we find this limiting principle to be applicable. Furthermore, its operation
need not await an attempt to copyright all possible forms. It cannot be only the last form
of expression which is to be condemned, as completing defendant’s exclusion from the
substance. Rather, in these circumstances, we hold that copyright does not extend to the
subject matter at all, and plaintiff cannot complain even if his particular expression was
deliberately adopted.
Affirmed.
Questions:
1.) Is the court saying that the defendant did not copy the rule? That it might well have
copied the rule but that it does not matter? Is copying in the case of merger a.) a prima
facie wrong excusable because of a dearth of alternatives, b.) not a violation of a legally
protected interest in the first place and thus neutral as a matter of law and policy or c.) a
positive good?
2.) The court first says that there are other ways in which the rule could have been stated
and then says “We cannot recognize copyright as a game of chess in which the public
can be checkmated.” What does this mean?

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Kregos v. Associated Press

937 F.2d 700 (2d Cir. 1991); cert. denied,
510 U.S. 1112 (1994)

NEWMAN, Circuit Judge.
The primary issue on this appeal is whether the creator of a baseball pitching form is
entitled to a copyright. The appeal requires us to consider the extent to which the copyright
law protects a compiler of information. George L. Kregos appeals from the April 30, 1990,
judgment of the District Court for the Southern District of New York (Gerard L. Goettel,
Judge) dismissing on motion for summary judgment his copyright and trademark claims
against the Associated Press (“AP”) and Sports Features Syndicate, Inc. (“Sports Features”).
We affirm dismissal of the trademark claims, but conclude that Kregos is entitled to a trial
on his copyright claim, though the available relief may be extremely limited.
Facts
The facts are fully set forth in Judge Goettel’s thorough opinion. The reader’s
attention is particularly called to the appendices to that opinion, which set forth Kregos’
pitching form and the allegedly infringing forms. Kregos distributes to newspapers a
pitching form, discussed in detail below, that displays information concerning the past
performances of the opposing pitchers scheduled to start each day’s baseball games. The
form at issue in this case, first distributed in 1983, is a redesign of an earlier form
developed by Kregos in the 1970’s. Kregos registered his form with the Copyright Office
and obtained a copyright. Though the form, as distributed to subscribing newspapers,
includes statistics, the controversy in this case concerns only Kregos’ rights to the form
without each day’s data, in other words, his rights to the particular selection of categories
of statistics appearing on his form.
In 1984, AP began publishing a pitching form provided by Sports Features. The AP’s
1984 form was virtually identical to Kregos’ 1983 form. AP and Sports Features changed
their form in 1986 in certain respects, which are discussed in part I(D) below. Kregos’ 1983
form lists four items of information about each day’s games-the teams, the starting pitchers,
the game time, and the betting odds, and then lists nine items of information about each
pitcher’s past performance, grouped into three categories. Since there can be no claim of a
protectable interest in the categories of information concerning each day’s game, we
confine our attention to the categories of information concerning the pitchers’ past
performances. For convenience, we will identify each performance item by a number from
1 to 9 and use that number whenever referring to the same item in someone else’s form.
The first category in Kregos’ 1983 form, performance during the entire season, comprises two items—won/lost record (1) and earned run average (2). The second category, performance during the entire season against the opposing team at the site of the game, comprises three items—won/lost record (3), innings pitched (4), and earned run average (5). The
third category, performance in the last three starts, comprises four items—won/lost record
(6), innings pitched (7), earned run average (8), and men on base average (9). This last item
is the average total of hits and walks given up by a pitcher per nine innings of pitching.
It is undisputed that prior to Kregos’ 1983 form, no form had listed the same nine
items collected in his form. Kregos pulled his categories of data from a “universe of
available data.” It is also undisputed that some but not all of the nine items of information
had previously appeared in other forms. In the earlier forms, however, the few items
common to Kregos’ form were grouped with items different from those in Kregos’ form.

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The District Court granted summary judgment for the defendants on both Kregos’
copyright and trademark claims. On the copyright side of the case, the Court ruled that
Kregos lacked a copyrightable interest in his pitching form on three grounds. First, the
Court concluded that Kregos’ pitching form was insufficiently original in its selection of
statistics to warrant a copyright as a compilation. Second, the Court concluded that, in view
of the limited space available for displaying pitching forms in newspapers, the possible
variations in selections of pitching statistics were so limited that the idea of a pitching form
had merged into its expression. Third, the Court ruled that Kregos’ pitching form was not
entitled to a copyright because of the so-called “blank form” doctrine.
Discussion
I. Copyright Claim
A. Copyright for a Compilation of Facts
The basic principles concerning copyright protection for compilations of facts are
clear and have recently been authoritatively restated in the Supreme Court’s decision
rejecting copyright protection for telephone book white pages. Feist Publications, Inc. v.
Rural Telephone Service Co., Inc. (1991) (“Feist”). Thus, as to compilations of facts,
independent creation as to selection and arrangement will not assure copyright
protection; the requirement of minimal creativity becomes an important ingredient of the
test for copyright entitlement.
Prior to Feist, we had applied these principles to require some minimal level of
creativity in two fairly recent cases that illustrate compilations of facts one of which is
and one of which is not entitled to a copyright, Eckes v. Card Prices Update (2d Cir. 1984),
and Financial Information, Inc. v. Moody’s Investors Service (2d Cir. 1986) (“FFI”), cert.
denied, 484 U.S. 820 (1987). In Eckes we upheld a District Court’s finding, made after
trial, that a selection of 5,000 out of 18,000 baseball cards to be considered “premium”
was entitled to a copyright. Eckes. In FFI we upheld a District Court’s finding, also made
after trial, that the listing of five items of information concerning municipal bond calls
lacked sufficient selection to warrant a copyright; in almost all instances, the five items
for the various bond issues had all appeared in “tombstone” ads, and only “minor
additional research” was needed to complete the listings. FFI.
Kregos’ pitching form presents a compilation of facts that falls between the
extremes illustrated by Eckes and FFI. Kregos has selected nine items of information
concerning a pitcher’s performance. “The universe of available data” available only from
inspection of box scores of prior games is considerably greater than nine, though perhaps
not as great as the quantity of 18,000 cards in Eckes. For example, Kregos could have
selected past performances from any number of recent starts, instead of using the three
most recent starts. And he could have chosen to include strikeouts, walks, balks, or hit
batters. In short, there are at least scores of available statistics about pitching performance
available to be calculated from the underlying data and therefore thousands of
combinations of data that a selector can choose to include in a pitching form.2
It cannot be said as a matter of law that in selecting the nine items for his pitching
form out of the universe of available data, Kregos has failed to display enough selectivity
to satisfy the requirement of originality. Whether in selecting his combination of nine
items he has displayed the requisite degree of creativity is a somewhat closer question.
Plainly, he has done better than the compiler in FFI who “selected” only the five facts
If the universe of available data included even 20 items and a selector was limited to 9 items, there would
be 167,960 combinations of items available.

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about bond calls already grouped together in nearly all tombstone ads. Judge Goettel was
persuaded to rule against Kregos, at least in part, because “most of the statistics . . . had
been established in previously existing forms.” But that observation is largely irrelevant
to the issue of whether Kregos’ selection of statistics displays sufficient creativity to
warrant a copyright. Nearly all copyrighted compilations of facts convey facts that have
been published elsewhere. Each of the cards selected for the “premium” category in Eckes
had previously been published. To hold a valid copyright, a compiler of facts need not be
a discoverer of facts. Indeed, any discovered fact, or, in Kregos’ case, any newly devised
statistic, would not, in and of itself, be eligible for copyright protection. It’s the originality
shown what the finder does with the fact that allows for copyrightability.
[T]he record discloses no prior pitching form with more than three of the pitching
performance statistics that are included in Kregos’ selection of nine statistics. Neither a
prior identical form to his nor one which varies in only a trivial degree exists. The validity
of his copyright in a compilation of facts cannot be rejected as a matter of law for lack
of the requisite originality and creativity.
B. Idea/Expression Merger
The fundamental copyright principle that only the expression of an idea and not the
idea itself is protectable, see Mazer v. Stein (1954), has produced a corollary maxim that
even expression is not protected in those instances where there is only one or so few ways
of expressing an idea that protection of the expression would effectively accord protection
to the idea itself. Our Circuit has considered this so-called “merger” doctrine in
determining whether actionable infringement has occurred, rather than whether a copyright
is valid, see Durham Industries, Inc. v. Tomy Corp. (2d Cir. 1980), an approach the Nimmer
treatise regards as the “better view.” See 3 NIMMER ON COPYRIGHT § 13.03[B][3] (1990).
Assessing merger in the context of alleged infringement will normally provide a more
detailed and realistic basis for evaluating the claim that protection of expression would
inevitably accord protection to an idea.
In this case, Judge Goettel understood Kregos’ idea to be “to publish an outcome
predictive pitching form.” In dissent, Judge Sweet contends that Kregos’ idea is that the
nine statistics he has selected are the most significant ones to consider when attempting
to predict the outcome of a baseball game. Unquestionably, if that is the idea for purposes
of merger analysis, then merger of that idea and its expression has occurred-by definition.
Though there is room for fair debate as to the identification of the pertinent idea
whenever merger analysis is applied to a compilation of facts, we think the “idea” in this case
is the one as formulated by Judge Goettel. Kregos has not devised a system that he seeks to
withdraw from the public domain by virtue of copyright. He does not present his selection of
nine statistics as a method of predicting the outcome of baseball games. His idea is that of
“an outcome predictive pitching form” in the general sense that it selects the facts that he
thinks newspaper readers should consider in making their own predictions of outcomes. He
does not purport to weigh the nine statistics, much less provide a method for comparing the
aggregate value of one pitcher’s statistics against that of the opposing pitcher in order to
predict an outcome or even its probability of occurring. He has not devised a system, as had
the deviser of a bookkeeping system in Baker v. Selden (1879). He has compiled facts, or at
least categories of facts, and selected those facts from a vast pool of information.
Though formulating the idea as “an outcome predictive pitching form,” Judge
Goettel applied the merger doctrine, concluding that the idea of selecting outcome
predictive statistics to rate pitching performance was capable of expression in only a very
limited number of ways.

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As the various pitching forms in the record indicate, the past performances of
baseball pitchers can be measured by a variety of statistics. Kregos’ selection of categories includes three statistics for the pitcher’s current season performance against the day’s
opponent at the site of the day’s game; other charts select “at site” performance against
the opponent during the prior season, and some select performance against the opponent
over the pitcher’s career, both home and away. Some charts include average men on base
per nine innings; others do not. The data for most recent starts could include whatever
number of games the compiler thought pertinent. These variations alone (and there are
others) abundantly indicate that there are a sufficient number of ways of expressing the
idea of rating pitchers’ performances; this variety of expression precludes a ruling that
the idea has merged into its expression.
In reaching this conclusion, we confess to some unease because of the risk that
protection of selections of data, or, as in this case, categories of data, have the potential
for according protection to ideas. Our concern may be illustrated by an example of a
doctor who publishes a list of symptoms that he believes provides a helpful diagnosis of
a disease. There might be many combinations of symptoms that others could select for the
same purpose, but a substantial question would nonetheless arise as to whether that doctor
could obtain a copyright in his list, based on the originality of his selection. If the idea that
the doctor is deemed to be expressing is the general idea that the disease in question can
be identified by observable symptoms, then the idea might not merge into the doctor’s
particular expression of that idea by his selection of symptoms. That general idea might
remain capable of many other expressions. But it is arguable that the doctor has conceived
a more precise idea—namely, the idea that his selection of symptoms is a useful identifier
of the disease. That more limited idea can be expressed only by his selection of symptoms,
and therefore might be said to have merged into his expression.
As long as selections of facts involve matters of taste and personal opinion, there is no
serious risk that withholding the merger doctrine will extend protection to an idea. That was
surely the case with the selection of premium baseball cards in Eckes where the compiler
selected 5,000 premium baseball cards from over 18,000 cards. It is also true of a selection
of prominent families for inclusion in a social directory. See Social Register Ass’n v. Murphy
(C.C.R.I. 1904). However, where a selection of data is the first step in an analysis that yields
a precise result or even a better-than-average probability of some result, protecting the
“expression” of the selection would clearly risk protecting the idea of the analysis.
Kregos’ pitching form is part way along the continuum spanning matters of pure
taste to matters of predictive analysis. He is doing more than simply saying that he holds
the opinion that his nine performance characteristics are the most pertinent. He implies
that his selections have some utility in predicting outcomes. On the other hand, he has not
gone so far as to provide a system for weighing the combined value of the nine characteristics for each of two opposing pitchers and determining a probability as to which is more
likely to win. Like the compilers of horse racing statistics, Kregos has been content to
select categories of data that he obviously believes have some predictive power, but has
left its interpretation to all sports page readers as to the likely outcomes from the sets of
data he has selected. His “idea,” for purposes of the merger doctrine, remains the general
idea that statistics can be used to assess pitching performance rather than the precise idea
that his selection yields a determinable probability of outcome. Since there are various
ways of expressing that general idea, the merger doctrine need not be applied to assure
that the idea will remain in the public domain.

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C. “Blank Form” Doctrine
The District Court also ruled that Kregos could not obtain a valid copyright in his
pitching form because of the so-called “blank form” doctrine. The doctrine derives from
the Supreme Court’s decision in Baker v. Selden. The Court there denied copyright
protection to blank forms contained in a book explaining a system of double-entry
bookkeeping. The forms displayed an arrangement of columns and headings that permitted
entries for a day, a week, or a month to be recorded on one page or two facing pages. The
Court made clear that the author could not obtain copyright protection for an “art” that
“might or might not have been patented” and reasoned that since the “art” was available to
the public, “the ruled lines and headings of accounts must necessarily be used as incident
to it.” Then, in a concluding statement that is susceptible to overreading, the Court said that
“blank account-books are not the subject of copyright.” Similarly, a check book account
register, a baby book for growth information and measurements for cooking or otherwise
probably will not be copyrightable. Simply stated, it depends upon the pool of information
from which the selection is taken.
Though there are some statements suggesting broadly that no blank forms are
copyrightable, many courts have recognized that there can be protectable elements of
forms that include considerable blank space.3
The regulations of the Copyright Office are careful to preclude copyright
registration to:
Blank forms, such as . . . account books, diaries, bank checks, scorecards,
address books, report forms, order forms and the like, which are designed
for recording information and do not in themselves convey information.
37 C.F.R. § 202.l(c)(1990)(emphasis added).
Of course, a form that conveys no information and serves only to provide blank space
for recording information contains no expression or selection of information that could
possibly warrant copyright protection. At the same time, it should be equally obvious that a
writing that does contain a selection of categories of information worth recording,
sufficiently original and creative to deserve a copyright as a compilation of facts, cannot
lose that protection simply because the work also contains blank space for recording the
information. When the Copyright Office denies a copyright to scorecards or diaries that “do
not in themselves convey information,” it must be contemplating works with headings so
obvious that their selection cannot be said to satisfy even minimal creativity (a baseball
scorecard with columns headed “innings” and lines headed “players”; a travel diary with
headings for “cities” “hotels,” and “restaurants”). Such a work conveys no information, not
just because it contains blanks, but because its selection of headings is totally uninformative.
On the other hand, if a scorecard or diary contained a group of headings whose selection (or
possibly arrangement) displayed cognizable creativity, the author’s choice of those headings
would convey to users the information that this group of categories was something out of
the ordinary. See 1 NIMMER ON COPYRIGHT § 2.18[C][1] at 2-201 (1990) (“Thus books
intended to record the events of baby’s first year, or a record of a European trip, or anyone
of a number of other subjects, may evince considerable originality in suggestions of specific
items of information which are to be recorded, and in the arrangement of such items.”)
(emphasis added).
The Ninth Circuit has rejected this approach. With deference, we suggest that this
We are concerned with protectable elements in the selection (and perhaps arrangement) of the categories of
information to be recorded on the forms. There is widespread agreement that a work containing a blank form
may be copyrightable because of the protectable elements of the textual matter accompanying the form.

3

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critique of cases recognizing a copyright in the selection of categories of information for
forms is not well taken. All forms may convey that the information called for is important
(or at least worth recording), but the form-maker does not necessarily display even minimal
creativity by selecting categories of “important” information. [C]ourts are obliged to
determine as to forms, as with all compilations of information, whether the author’s
selection of categories of data to be recorded displays at least minimal creativity. However,
all forms need not be denied protection simply because many of them fail to display
sufficient creativity.
In the pending case, once it is determined that Kregos’ selection of categories of
statistics displays sufficient creativity to preclude a ruling as a matter of law that it is not
a copyrightable compilation of information, that same conclusion precludes rejecting his
copyright as a “blank form.”
D. Extent of Protection
Our ruling that Kregos’ copyright claim survives defendants’ motion for summary
judgment does not, of course, mean that he will necessarily obtain much of a victory. If
Kregos prevails at trial on the factual issues of originality and creativity, he will be entitled
to protection only against infringement of the protectable features of his form. Only the
selection of statistics might be entitled to protection. We agree entirely with Judge Goettel
that nothing in Kregos’ arrangement of the selected statistics displays the requisite
creativity. As to the arrangement, Kregos’ form is surely a “garden-variety” pitching form.
The statistics are organized into the “obvious” arrangement of columns, and the form follows the pattern of most other forms: the statistics are organized into three groups, first
the statistics about each pitcher’s performance for the season, then the statistics about the
pitcher’s performance against the day’s opponent, and finally the statistics concerning the
pitcher’s recent starts.
Even as to the selection of statistics, if Kregos establishes entitlement to protection,
he will prevail only against other forms that can be said to copy his selection. That would
appear to be true of the AP’s 1984 form, which, as Judge Goettel noted, is “identical in
virtually every sense to plaintiff’s form.” Whether it is also true of the AP’s current form,
revised in 1986, is far less certain. That form contains six of Kregos’ nine items (1, 2, 6, 7,
8, 9). It also includes four items that Kregos does not have. Three of these items concern
performance against the day’s opposing team-won-lost record, innings pitched, and earned
run average; though these three statistics appear on Kregos’ form, the AP’s 1986 form
shows data for the current season both home and away, whereas Kregos’ form shows data
for the pitcher’s current season at the site of that day’s game. The fourth item on the AP’s
1986 form and not on Kregos’ form shows the team’s record in games started by that day’s
pitcher during the season.
The reason for doubting that the AP’s 1986 form infringes Kregos’ form arises from
the same consideration that supports Kregos’ claim to a copyright. Kregos can obtain a
copyright by displaying the requisite creativity in his selection of statistics. But if someone
else displays the requisite creativity by making a selection that differs in more than a trivial
degree, Kregos cannot complain. Kregos contends that the AP’s 1986 form makes
insignificant changes from its 1984 form. But Kregos cannot have it both ways. If his
decision to select, in the category of performance against the opposing team, statistics for
the pitcher’s current season at the site of today’s game displays, in combination with his
other selections, enough creativity to merit copyright protection, then a competitor’s
decision to select in that same category performance statistics for the pitcher’s season performance both home and away may well insulate the competitor from a claim of

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infringement. Thus, though issues remain to be explored before any determination can be
made, it may well be that Kregos will have a valid claim only as to the AP’s 1984 form.
[In part II of the opinion, the court affirmed the district court’s grant of summary
judgment for the defendants on the trademark claims because the plaintiff did not
demonstrate secondary meaning in his form.]
APPENDIX 1

(Kregos’ 1983 Pitching Form)

APPENDIX 2

(AP’s 1984 Pitching Form)

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APPENDIX 3

(AP’s 1986 Pitching Form)

SWEET, District Judge, concurring in part and dissenting in part.
While I concur in the majority’s conclusion that Kregos has displayed sufficient
creativity to satisfy the Feist Publications standard for copyrightability, I would affirm
the district court’s grant of summary judgment because I conclude that Kregos’ idea here
has merged into his expression.
1. Kregos’ Idea
I respectfully disagree with the majority’s statement that Kregos’ idea was the
abstract “general idea that statistics can be used to assess pitching performance,” because
I do not believe that the majority has set forth convincing grounds for its determination
as to the idea at issue here.
In my opinion, Kregos’ form constitutes an explanation of his preferred system of
handicapping baseball games, and he seeks to use his copyright here to prevent others
from practicing that system.
The majority characterizes Kregos’ work as dealing with “matters of taste and
opinion,” and therefore compares it to the list of baseball card prices in Eckes v. Card
Prices Update (2d Cir. 1984) or to a listing of socially prominent families rather than to
the hypothetical doctor’s diagnostic chart. In my view, both the pitching form and the
diagnostic chart are expressions intended to assist in predicting particular outcomes, with
the data intended to be used as a basis for that prediction. In contrast, neither the card
price list nor the social register is associated with any defined event or result, and the
information reported-the card prices, the names of the families-is itself the primary
feature or attraction.
Finally, in light of the majority’s agreement with the district court that Kregos’
arrangement of the statistics was not itself creative or original, and therefore that his
particular ordering is not protected, it is difficult to grasp exactly what “expression” the
majority intends to protect, if not the fundamental expression that these nine items are
valuable in predicting games. This difficulty becomes apparent as the majority speculates
about the extent of protection to be given to Kregos’ form.
2. The Application of the Merger Doctrine
As a secondary matter, I disagree with the majority’s characterization of how the
merger doctrine is applied in this Circuit.
I believe the proper approach requires the court first to decide whether the
copyrighted work satisfies the primary requirement of creativity, then to determine
whether there is merger before extending copyright protection. This is based on the
wording of § l02(b) of the Copyright Act, which provides
In no case does copyright protection for an original work of authorship
extend to any idea, procedure, process, system, method of operation,

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321

concept, principle, or discovery, regardless of the form in which it is
described, explained, illustrated, or embodied in such work.
I interpret this language as indicating that protection cannot be given to a work which is
inseparable from its underlying idea.
The Nimmer treatise supports the majority’s approach, suggesting that merger
must be considered in the context of determining whether infringement has occurred
rather than in deciding the issue of copyrightability. Under this approach, a court which
finds that merger exists should hold that the two works in question are not “substantially
similar,” even where they are in fact identical, a result which I view as a not useful variety
of doublespeak.
Nimmer notwithstanding, the majority of cases have rejected this approach and
instead followed the method in which merger becomes an issue only when the two works
in question—the copyrighted one and the alleged infringement—appear on the surface
to be similar, and under which merger is used as a reason for denying all copyright
protection to the plaintiff and thereby excusing the defendant’s use of a similar or even
identical expression.
The difference in applying these two approaches is not insignificant. Nimmer’s
method lends itself much more readily to the erroneous conclusion that merger is only
available where the defendant has independently created an expression which happens
coincidentally to be similar to the plaintiffs work. Merger is then viewed as a means of
explaining the unintentional similarity between the two works-thus Nimmer’s characterization of it as a means of negating substantial similarity. In other words, if a defendant
has actually copied the plaintiffs work, it is unlikely to be allowed to rely on merger to
avoid liability. This approach owes little if anything to the strictures of § 102(b), and
instead depends on the fundamental principle of copyright law that independent creation
is never infringement.
The more common approach, in which merger is considered as part of the determination of copyrightability, absolves even a defendant who has directly copied the plaintiffs
work if the idea of that work is merged into the expression. I believe this approach accords
more fully with both the language and the purpose of § 102(b), and serves to focus
consideration on the proper definition of the idea at the outset of the inquiry.
Questions:
1.) What idea does the court say the form is expressing? What idea does Judge Sweet
say the form is expressing? Which convinces you?
2.) Is the holding of this case that the more accurate a prediction system, the less
copyrightable? Why or why not?
3.) Reconcile Judge Sweet’s dissent here and in the West cases.

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PROBLEM 11-2
[With thanks to David Nimmer, Rochelle Dreyfuss and Roberta Kwall.*]
Indiana Jones finds the Dead Sea Scrolls in a cave, sealed inside amphorae. The
scrolls have badly deteriorated so that what remains is a jumble of fragments, some
legible and some not. Dr. Jones painstakingly tries to reconstruct the scrolls. He uses
many types of evidence. For example, because he knows what size the scrolls were and
roughly what their margins were, if there is a gap in the reconstructed scroll, he can
deduce how big the word is, and come up with all the Hebrew words (or Aramaic or
Greek if the scroll is in that language) that might fit. Jones is an expert in early Jewish
sects, so he knows what type of wording is most likely. Then he can look at contemporary
religious texts, at word frequency distributions, and predict which word fits the gap. If
that makes sense linguistically and in the context of the religious text he is looking at, he
can have greater certainty that the two fragments on either side are indeed from that
particular scroll. Jones’ unparalleled linguistic, religious and archeological knowledge
give him many clues like this—his colleagues describe his ability to synthesize all of
these sources of information as nothing short of genius. At the end of 2 years of work, he
claims to have the definitive “historical reconstruction” of the scroll.
May Jones claim copyright in the reconstructed text? Argue both sides. In each
case, explain the analogies you would make, the doctrines you would invoke and
the particular precedents to which you would appeal.

4.) Useful Articles
As defined by the Copyright Act, a “useful article” is “an article having an intrinsic
utilitarian function that is not merely to portray the appearance of the article or to convey
information.” Such useful articles, along with “any article that is normally a part of a useful
article,” cannot be copyrighted; they are protectable, if at all, only by patent law. However,
the “design of a useful article” can be copyrighted as a “pictorial, graphic, or sculptural
work” if “such design incorporates pictorial, graphic, or sculptural features that can be
identified separately from, and are capable of existing independently of, the utilitarian
aspects of the article,” 17 U.S.C. § 101, a standard known as “separability.” But how does
one determine whether a useful article’s design features are sufficiently separable from its
utilitarian aspects, particularly when (unlike a hood ornament on a car, for example) they
cannot physically be detached from the underlying article? This is the “metaphysical
quandary”4 of conceptual separability.
Sometimes form and function merge—as with a sculptural work that also serves as a
bicycle rack, or a mannequin, or a belt buckle.5 Are these copyrightable “works of applied
art” or uncopyrightable “industrial designs”? Sometimes design elements serve functional
purposes—as with the sequins and beads on the bodice of a prom dress that “cover the body
*
David Nimmer, Copyright in the Dead Sea Scrolls, 38 HOUSTON L. REV. 1; Rochelle Dreyfuss and Roberta
Kwall, Intellectual Property 224 (2d edition 2004).
4
Quoting Universal Furniture Int’l, Inc. v. Collezione Europa USA, Inc. (4th Cir. 2010).
5
See Brandir Int’l, Inc. v. Cascade Pac. Lumber Co. (2d Cir. 1987) (bicycle rack not copyrightable); Carol
Barnhart, Inc. v. Economy Cover Corp. (2d Cir. 1985) (mannequin torso not copyrightable); KieselsteinCord v. Accessories by Pearl, Inc. (2d Cir. 1980) (belt buckle copyrightable).

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in a particularly attractive way for that special occasion” or the chevrons, stripes, and color
blocks on a cheerleader uniform that appear to identify the wearer as a cheerleader (and apparently make the wearer appear both “slimmer” and “curvier”).6 Can these aesthetic features
“exist independently” of their utilitarian function? How do we know—do we look at the
perception of an ordinary observer? The motivations of the designer? At whether they are
primarily ornamental or functional? Or whether, taking away any functionality, they’re still
marketable as art? At stake is a dividing line between copyright and patent law. Draw it too
far one way, and copyright confers 95 years (or life plus 70 years) of exclusivity over utilitarian subject matter without ensuring that patent eligibility thresholds are satisfied. Draw it
too far the other way, and copyright excludes legitimate works of art from its purview.
Not surprisingly, courts have “struggled mightily to formulate a test” for conceptual
separability.7 In 2017, in the case involving cheerleader uniforms, the Supreme Court
sought to “resolve widespread disagreement over the proper test for implementing § 101’s
separate identification and independent-existence requirements.” The appellate decision
in that case had listed nine different approaches to analyzing conceptual separability from
courts, scholars, and the Copyright Office, and arguably added a tenth one. The Supreme
Court’s majority opinion largely ignored those prior formulations, and provided its own
standard. In theory, therefore, we now have a definitive test.
This Supreme Court decision is below. But first, consider the analysis in an earlier
case, Brandir Int’l, Inc. v. Cascade Pacific Lumber Co. (2d Cir. 1987). There, the Second
Circuit addressed the question of whether a bicycle rack called the “RIBBON Rack” was
copyrightable. The sculptor had originally come up with a minimalist sine wave sculpture
made of metal. One of his friends, an avid cyclist, opined that it would make a great bike
rack. Rather than beating the friend with his own bike in a fit of artistic pique, the sculptor
saw a business opportunity and modified the ribbon rack to make it more suitable for
such a task. But was it copyrightable as a sculpture?

RIBBON rack

Previous sculptures that led to the RIBBON rack

The court in Brandir summarized several possible approaches to “conceptual
separability . . . including whether the primary use is as a utilitarian article as opposed to
an artistic work, whether the aesthetic aspects of the work can be said to be ‘primary,’
and whether the article is marketable as art, none of which is very satisfactory.” But the
court finally adopted an approach drawn from a law review article by Professor Robert
Jovani Fashion, Inc. v. Cinderella Divine, Inc. (S.D.N.Y. 2011) (prom dress design not copyrightable,
affirmed by the Second Circuit); Star Athletica v. Varsity Brands, Inc. (2017) (cheerleader uniform designs
copyrightable). Please note that the Supreme Court in Star Athletica did not find that identifying the wearer
as a cheerleader was the purpose of these design features. The claims about enhancing the wearer’s
appearance are from the oral argument in that case.
7
Varsity Brands, Inc. v. Star Athletica (6th Cir. 2015).
6

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Denicola (Applied Art and Industrial Design: A Suggested Approach to Copyright in
Useful Articles, 1983). Professor Denicola had proposed a test that focused on the
motivations of the artist, rather than the mind of the beholder, concluding that
“copyrightability ‘ultimately should depend on the extent to which the work reflects
artistic expression uninhibited by functional considerations.’” Writing for the majority,
Judge Oakes summarized Denicola’s test as follows: “if design elements reflect a merger
of aesthetic and functional considerations, the artistic aspects of a work cannot be said to
be conceptually separable from the utilitarian elements. Conversely, where design
elements can be identified as reflecting the designer’s artistic judgment exercised
independently of functional influences, conceptual separability exists.”
Applying this standard, the majority held that the RIBBON Rack was not copyrightable. While the rack originated as a series of wire sculptures (see above), the final form
at issue in the case had “adapted the original aesthetic elements to accommodate and further
a utilitarian purpose”—among other things, the regular undulations allowed multiple types
of bicycles and mopeds to park both under and over the curves. The majority concluded:
Using the test we have adopted, it is not enough that . . . the rack may
stimulate in the mind of the reasonable observer a concept separate from
the bicycle rack concept. While the RIBBON Rack may be worthy of
admiration for its aesthetic qualities alone, it remains nonetheless the product of industrial design. Form and function are inextricably intertwined in
the rack, its ultimate design being as much the result of utilitarian pressures
as aesthetic choices. . . . Thus there remains no artistic element of the
RIBBON Rack that can be identified as separate and “capable of existing
independently, of, the utilitarian aspects of the article.”
Judge Winter filed a dissenting opinion, explaining “The grounds of my
disagreement are that: (1) my colleagues’ adaptation of Professor Denicola’s test diminishes the statutory concept of ‘conceptual separability’ to the vanishing point; and (2)
their focus on the process or sequence followed by the particular designer makes
copyright protection depend upon largely fortuitous circumstances concerning the
creation of the design in issue.” Judge Winter proposed a standard focusing on how the
final work is perceived: “the relevant question is whether the design of a useful article,
however intertwined with the article’s utilitarian aspects, causes an ordinary reasonable
observer to perceive an aesthetic concept not related to the article’s use. The answer to
this question is clear in the instant case because any reasonable observer would easily
view the Ribbon Rack as an ornamental sculpture.”
Take a look at the RIBBON rack above. How would you vote? Copyrightable or not?

Star Athletica v. Varsity Brands, Inc.

137 S. Ct. 1002 (2017)

Justice THOMAS delivered the opinion of the Court.
Congress has provided copyright protection for original works of art, but not for
industrial designs. The line between art and industrial design, however, is often difficult
to draw. This is particularly true when an industrial design incorporates artistic elements.
Congress has afforded limited protection for these artistic elements by providing that
“pictorial, graphic, or sculptural features” of the “design of a useful article” are eligible
for copyright protection as artistic works if those features “can be identified separately

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from, and are capable of existing independently of, the utilitarian aspects of the article.”
17 U.S.C. § 101. We granted certiorari to resolve widespread disagreement over the
proper test for implementing § 101’s separate-identification and independent-existence
requirements. We hold that a feature incorporated into the design of a useful article is
eligible for copyright protection only if the feature (1) can be perceived as a two- or
three-dimensional work of art separate from the useful article and (2) would qualify as a
protectable pictorial, graphic, or sculptural work—either on its own or fixed in some
other tangible medium of expression—if it were imagined separately from the useful
article into which it is incorporated. Because that test is satisfied in this case, we affirm.
I
Respondents Varsity Brands, Inc., Varsity Spirit Corporation, and Varsity Spirit
Fashions & Supplies, Inc., design, make, and sell cheerleading uniforms. Respondents have
obtained or acquired more than 200 U.S. copyright registrations for two-dimensional designs
appearing on the surface of their uniforms and other garments. These designs are primarily
“combinations, positionings, and arrangements of elements” that include “chevrons . . . ,

lines, curves, stripes, angles, diagonals, inverted [chevrons], coloring, and shapes.” At issue
in this case are Designs 299A, 299B, 074, 078, and 0815. [Above are images of these designs
from Varsity’s submissions to the Copyright Office, alongside images of two of the designs
worn as uniforms.]
Petitioner Star Athletica, L.L.C., also markets and sells cheerleading uniforms.
Respondents sued petitioner for infringing their copyrights in the five designs. . . .
II
B
We must now decide when a feature incorporated into a useful article “can be
identified separately from” and is “capable of existing independently of” “the utilitarian
aspects” of the article. This is not a free-ranging search for the best copyright policy, but
rather “depends solely on statutory interpretation.” “The controlling principle in this case
is the basic and unexceptional rule that courts must give effect to the clear meaning of
statutes as written.” . . .
1
The statute provides that a “pictorial, graphic, or sculptural featur[e]” incorporated
into the “design of a useful article” is eligible for copyright protection if it (1) “can be
identified separately from,” and (2) is “capable of existing independently of, the utilitarian
aspects of the article.” § 101. The first requirement—separate identification—is not
onerous. The decisionmaker need only be able to look at the useful article and spot some
two- or three-dimensional element that appears to have pictorial, graphic, or sculptural
qualities.
The independent-existence requirement is ordinarily more difficult to satisfy. The
decisionmaker must determine that the separately identified feature has the capacity to exist

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apart from the utilitarian aspects of the article. . . . In other words, the feature must be able
to exist as its own pictorial, graphic, or sculptural work as defined in § 101 once it is
imagined apart from the useful article. If the feature is not capable of existing as a pictorial,
graphic, or sculptural work once separated from the useful article, then it was not a
pictorial, graphic, or sculptural feature of that article, but rather one of its utilitarian aspects.
Of course, to qualify as a pictorial, graphic, or sculptural work on its own, the
feature cannot itself be a useful article or “[a]n article that is normally a part of a useful
article” (which is itself considered a useful article). § 101. Nor could someone claim a
copyright in a useful article merely by creating a replica of that article in some other
medium—for example, a cardboard model of a car. Although the replica could itself be
copyrightable, it would not give rise to any rights in the useful article that inspired it. . . .
3
This interpretation is . . . consistent with the
history of the Copyright Act. In Mazer v. Stein
(1954), a case decided under the 1909 Copyright
Act, the respondents copyrighted a statuette depicting a dancer. The statuette was intended for use
as a lamp base, “with electric wiring, sockets and
lamp shades attached.” Copies of the statuette were
sold both as lamp bases and separately as
statuettes. . . . [T]he Court held that the respondents
owned a copyright in the statuette even though it was
intended for use as a lamp base. . . . Congress Statuette/lamp base from Mazer v. Stein.
essentially lifted the language governing protection for the design of a useful article
directly from the post-Mazer regulations and placed it into § 101 of the 1976 Act. Consistent with Mazer, the approach we outline today interprets §§ 101 and 113 in a way that
would afford copyright protection to the statuette in Mazer regardless of whether it was
first created as a standalone sculptural work or as the base of the lamp.
C
In sum, a feature of the design of a useful article is eligible for copyright if, when
identified and imagined apart from the useful article, it would qualify as a pictorial, graphic,
or sculptural work either on its own or when fixed in some other tangible medium.
Applying this test to the surface decorations on the cheerleading uniforms is
straightforward. First, one can identify the decorations as features having pictorial, graphic,
or sculptural qualities. Second, if the arrangement of colors, shapes, stripes, and chevrons
on the surface of the cheerleading uniforms were separated from the uniform and applied in
another medium—for example, on a painter’s canvas—they would qualify as “twodimensional . . . works of . . . art,” § 101. And imaginatively removing the surface decorations from the uniforms and applying them in another medium would not replicate the
uniform itself. Indeed, respondents have applied the designs in this case to other media of
expression—different types of clothing—without replicating the uniform. The decorations
are therefore separable from the uniforms and eligible for copyright protection.1 . . .
. . . To be clear, the only feature of the cheerleading uniform eligible for a copyright
in this case is the two-dimensional work of art fixed in the tangible medium of the uniform
We do not today hold that the surface decorations are copyrightable. We express no opinion on whether
these works are sufficiently original to qualify for copyright protection, or on whether any other prerequisite
of a valid copyright has been satisfied.
1

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fabric. Even if respondents ultimately succeed in establishing a valid copyright in the
surface decorations at issue here, respondents have no right to prohibit any person from
manufacturing a cheerleading uniform of identical shape, cut, and dimensions to the ones
on which the decorations in this case appear. They may prohibit only the reproduction of
the surface designs in any tangible medium of expression—a uniform or otherwise.2
D
Petitioner and the Government raise several objections to the approach we
announce today. None is meritorious.
1
Petitioner first argues that our reading of the statute is missing an important step.
It contends that a feature may exist independently only if it can stand alone as a
copyrightable work and if the useful article from which it was extracted would remain
equally useful. . . . The designs here are not protected, it argues, because they are
necessary to two of the uniforms’ “inherent, essential, or natural functions”—identifying
the wearer as a cheerleader and enhancing the wearer’s physical appearance. Because the
uniforms would not be equally useful without the designs, petitioner contends that the
designs are inseparable from the “utilitarian aspects” of the uniform. . . . The debate over
the relative utility of a plain white cheerleading uniform is unnecessary. The focus of the
separability inquiry is on the extracted feature and not on any aspects of the useful article
that remain after the imaginary extraction. The statute does not require the decisionmaker
to imagine a fully functioning useful article without the artistic feature. Instead, it
requires that the separated feature qualify as a nonuseful pictorial, graphic, or sculptural
work on its own. . . . Were we to accept petitioner’s argument that the only protectable
features are those that play absolutely no role in an article’s function, we would
effectively abrogate the rule of Mazer and read “applied art” out of the statute.
Because we reject the view that a useful article must remain after the artistic feature
has been imaginatively separated from the article, we necessarily abandon the distinction
between “physical” and “conceptual” separability, which some courts and commentators
have adopted based on the Copyright Act’s legislative history. According to this view, a
feature is physically separable from the underlying useful article if it can “be physically
separated from the article by ordinary means while leaving the utilitarian aspects of the
article completely intact.” Conceptual separability applies if the feature physically could
not be removed from the useful article by ordinary means.
The statutory text indicates that separability is a conceptual undertaking. Because
separability does not require the underlying useful article to remain, the physicalconceptual distinction is unnecessary.
2
Petitioner next argues that we should incorporate two “objective” components into
our test to provide guidance to the lower courts: (1) “whether the design elements can be
identified as reflecting the designer’s artistic judgment exercised independently of
functional influence” and (2) whether “there is [a] substantial likelihood that the pictorial,
2
The dissent suggests that our test would lead to the copyrighting of shovels. But a shovel, like a cheerleading uniform, even if displayed in an art gallery, is “an article having an intrinsic utilitarian function that is
not merely to portray the appearance of the article or to convey information.” 17 U.S.C. § 101. It therefore
cannot be copyrighted. A drawing of a shovel could, of course, be copyrighted. And, if the shovel included
any artistic features that could be perceived as art apart from the shovel, and which would qualify as protectable pictorial, graphic, or sculptural works on their own or in another medium, they too could be copyrighted.
But a shovel as a shovel cannot.

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graphic, or sculptural feature would still be marketable to some significant segment of the
community without its utilitarian function.”
We reject this argument because neither consideration is grounded in the text of
the statute. The first would require the decisionmaker to consider evidence of the
creator’s design methods, purposes, and reasons. The statute’s text makes clear, however,
that our inquiry is limited to how the article and feature are perceived, not how or why
they were designed. The same is true of marketability. Nothing in the statute suggests
that copyrightability depends on market surveys. Moreover, asking whether some
segment of the market would be interested in a given work threatens to prize popular art
over other forms, or to substitute judicial aesthetic preferences for the policy choices
embodied in the Copyright Act.
3
Finally, petitioner argues that allowing the surface decorations to qualify as a “work
of authorship” is inconsistent with Congress’ intent to entirely exclude industrial design
from copyright. Petitioner notes that Congress refused to pass a provision that would have
provided limited copyright protection for industrial designs, including clothing, when it
enacted the 1976 Act, and that it has enacted laws protecting designs for specific useful
articles—semiconductor chips and boat hulls—while declining to enact other industrial
design statutes. . . . It therefore urges us to approach this question with a presumption
against copyrightability.
We do not share petitioner’s concern. As an initial matter, “[c]ongressional inaction
lacks persuasive significance” in most circumstances. Moreover, we have long held that
design patent and copyright are not mutually exclusive. Congress has provided for limited
copyright protection for certain features of industrial design, and approaching the statute
with presumptive hostility toward protection for industrial design would undermine
Congress’ choice. In any event, as explained above, our test does not render the shape, cut,
and physical dimensions of the cheerleading uniforms eligible for copyright protection. . . .
Justice BREYER, with whom Justice KENNEDY joins, dissenting.
I agree with much in the Court’s opinion. But I do not agree that the designs that
Varsity Brands, Inc., submitted to the Copyright Office are eligible for copyright
protection. Even applying the majority’s test, the designs cannot “be perceived as . . .
two- or three-dimensional work[s] of art separate from the useful article.”
Look at the designs that Varsity submitted to the Copyright Office. You will see only
pictures of cheerleader uniforms. And cheerleader uniforms are useful articles. A picture of
the relevant design features, whether separately “perceived” on paper or in the imagination,
is a picture of, and thereby “replicate[s],” the underlying useful article of which they are a
part. Hence the design features that Varsity seeks to protect are not “capable of existing
independently o[f] the utilitarian aspects of the article.” 17 U.S.C. § 101.
I
The relevant statutory provision says that the “design of a useful article” is
copyrightable “only if, and only to the extent that, such design incorporates pictorial,
graphic, or sculptural features that can be identified separately from, and are capable of
existing independently of, the utilitarian aspects of the article.” But what, we must ask,
do the words “identified separately” mean? Just when is a design separate from the
“utilitarian aspect of the [useful] article?” The most direct, helpful aspect of the Court’s
opinion answers this question by stating:
Nor could someone claim a copyright in a useful article merely by creating

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a replica of that article in some other medium—for example, a cardboard
model of a car. Although the replica could itself be copyrightable, it would
not give rise to any rights in the useful article that inspired it.
Exactly so. These words help explain the Court’s statement that a copyrightable
work of art must be “perceived as a two- or three-dimensional work of art separate from
the useful article.” . . .
Consider, for example, the explanation that the House Report for the Copyright
Act of 1976 provides. It says:
Unless the shape of an automobile, airplane, ladies’ dress, food processor,
television set, or any other industrial product contains some element that,
physically or conceptually, can be identified as separable from the
utilitarian aspects of that article, the design would not be copyrighted. . . .
These words suggest two exercises, one physical, one mental. Can the design
features (the picture, the graphic, the sculpture) be physically removed from the article
(and considered separately), all the while leaving the fully functioning utilitarian object
in place? If not, can one nonetheless conceive of the design features separately without
replicating a picture of the utilitarian object? If the answer to either of these questions is
“yes,” then the design is eligible for copyright protection. Otherwise, it is not. The
abstract nature of these questions makes them sound difficult to apply. But with the
Court’s words in mind, the difficulty tends to disappear.
An example will help. Imagine a lamp with a circular marble base, a vertical 10inch tall brass rod (containing wires) inserted off center on the base, a light bulb fixture
emerging from the top of the brass rod, and a lampshade sitting on top. In front of the
brass rod a porcelain Siamese cat sits on the base facing outward. Obviously, the Siamese
cat is physically separate from the lamp, as it could be easily removed while leaving both
cat and lamp intact. And, assuming it otherwise qualifies, the designed cat is eligible for
copyright protection.
Now suppose there is no long
brass rod; instead the cat sits in the
middle of the base and the wires run
up through the cat to the bulbs. The
cat is not physically separate from
the lamp, as the reality of the lamp’s
construction is such that an effort to
physically separate the cat and lamp
will destroy both cat and lamp. The
two are integrated into a single functional object, like the similar configuration of the ballet dancer statuettes
that formed the lamp bases at issue in Mazer v. Stein (1954). But we can easily imagine the
cat on its own. . . . In doing so, we do not create a mental picture of a lamp (or, in the
Court’s words, a “replica” of the lamp), which is a useful article. We simply perceive the
cat separately, as a small cat figurine that could be a copyrightable design work standing
alone that does not replicate the lamp. Hence the cat is conceptually separate from the
utilitarian article that is the lamp.
Case law, particularly case law that Congress and the Copyright Office have
considered, reflects the same approach. Congress cited examples of copyrightable design
works, including “a carving on the back of a chair” and “a floral relief design on silver

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flatware.” Copyright Office guidance on copyrightable designs in useful articles include
“an engraving on a vase,” “[a]rtwork printed on a t-shirt,” “[a] colorful pattern decorating
the surface of a shopping bag,” “[a] drawing on the surface of wallpaper,” and “[a] floral
relief decorating the handle of a spoon.” Courts have found copyrightable matter in a
plaster ballet dancer statuette encasing the lamp’s electric cords and forming its base, as
well as carvings engraved onto furniture, and designs on laminated floor tiles.
By way of contrast, Van Gogh’s painting of a pair of old shoes, though beautifully
executed and copyrightable as a painting, would not qualify for a shoe design copyright.
Courts have similarly denied copyright protection to objects that begin as threedimensional designs, such as measuring spoons shaped like heart-tipped arrows,
candleholders shaped like sailboats, and wire spokes on a wheel cover. None of these
designs could qualify for copyright protection that would prevent others from selling
spoons, candleholders, or wheel covers with the same design. Why not? Because in each
case the design is not separable from the utilitarian aspects of the object to which it relates.
The designs cannot be physically separated because they themselves make up the shape
of the spoon, candleholders, or wheel covers of which they are a part. And spoons,
candleholders, and wheel covers are useful objects, as are the old shoes depicted in Van
Gogh’s painting. More importantly, one cannot easily imagine or otherwise conceptualize
the design of the spoons or the candleholders or the shoes without that picture, or image,
or replica being a picture of spoons, or candleholders, or wheel covers, or shoes. The
designs necessarily bring along the underlying utilitarian object. Hence each design is not
conceptually separable from the physical useful object.
The upshot is that one could copyright the floral design on a soupspoon but one
could not copyright the shape of the spoon itself, no matter how beautiful, artistic, or
esthetically pleasing that shape might be: A picture of the shape of the spoon is also a
picture of a spoon; the picture of a floral design is not.
To repeat: A separable design feature must be “capable of existing independently”
of the useful article as a separate artistic work that is not itself the useful article. If the
claimed feature could be extracted without replicating the useful article of which it is a
part, and the result would be a copyrightable artistic work standing alone, then there is a
separable design. But if extracting the claimed features would necessarily bring along
the underlying useful article, the design is not separable from the useful article. . . . The
law has long recognized that drawings or photographs of real world objects are copyrightable as drawings or photographs, but the copyright does not give protection against
others making the underlying useful objects. That is why a copyright on Van Gogh’s
painting would prevent others from reproducing that painting, but it would not prevent
others from reproducing and selling the comfortable old shoes that the painting depicts.
Indeed, the purpose of § 113(b) was to ensure that “‘copyright in a pictorial, graphic, or
sculptural work, portraying a useful article as such, does not extend to the manufacture
of the useful article itself.’”
II
To ask this kind of simple question—does the design picture the useful article?—
will not provide an answer in every case, for there will be cases where it is difficult to
say whether a picture of the design is, or is not, also a picture of the useful article. But
the question will avoid courts focusing primarily upon what I believe is an unhelpful
feature of the inquiry, namely, whether the design can be imagined as a “two- or threedimensional work of art.” That is because virtually any industrial design can be thought
of separately as a “work of art” . . . Indeed, great industrial design may well include

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design that is inseparable from the useful article—where, as Frank Lloyd Wright put it,
“form and function are one.” Where they are one, the designer may be able to obtain 15
years of protection through a design patent. But, if they are one, Congress did not intend
a century or more of copyright protection.
III
The conceptual approach that I have described reflects Congress’ answer to a
problem that is primarily practical and economic. Years ago Lord Macaulay drew
attention to the problem when he described copyright in books as a “tax on readers for
the purpose of giving a bounty to writers.” He called attention to the main benefit of
copyright protection, which is to provide an incentive to produce copyrightable works
and thereby “promote the Progress of Science and useful Arts.” But Macaulay also made
clear that copyright protection imposes costs. Those costs include the higher prices that
can accompany the grant of a copyright monopoly. They also can include (for those
wishing to display, sell, or perform a design, film, work of art, or piece of music, for
example) the costs of discovering whether there are previous copyrights, of contacting
copyright holders, and of securing permission to copy. Sometimes, as Thomas Jefferson
wrote to James Madison, costs can outweigh “the benefit even of limited monopolies.”
And that is particularly true in light of the fact that Congress has extended the “limited
Times” of protection, U.S. Const. Art. I, § 8, cl. 8, from the “14 years” of Jefferson’s day
to potentially more than a century today.
The Constitution grants Congress primary responsibility for assessing comparative
costs and benefits and drawing copyright’s statutory lines. Courts must respect those lines
and not grant copyright protection where Congress has decided not to do so. And it is
clear that Congress has not extended broad copyright protection to the fashion design
industry. Congress has left “statutory . . . protection . . . largely unavailable for dress
designs.” 1 Nimmer § 2A.08[H][3][a].
Congress’ decision not to grant full copyright protection to the fashion industry has
not left the industry without protection. Patent design protection is available. A maker of
clothing can obtain trademark protection under the Lanham Act for signature features of
the clothing. And a designer who creates an original textile design can receive copyright
protection for that pattern as placed, for example, on a bolt of cloth, or anything made
with that cloth.
The fashion industry has thrived against this backdrop, and designers have
contributed immeasurably to artistic and personal self-expression through clothing. But
a decision by this Court to grant protection to the design of a garment would grant the
designer protection that Congress refused to provide. It would risk increased prices and
unforeseeable disruption in the clothing industry, which in the United States alone
encompasses nearly $370 billion in annual spending and 1.8 million jobs. That is why I
believe it important to emphasize those parts of the Court’s opinion that limit the scope
of its interpretation. That language, as I have said, makes clear that one may not “claim
a copyright in a useful article merely by creating a replica of that article in some other
medium,” which “would not give rise to any rights in the useful article that inspired it.”
IV
If we ask the “separateness” question correctly, the answer here is not difficult to
find. The majority’s opinion, in its appendix, depicts the cheerleader dress designs that
Varsity submitted to the Copyright Office. Can the design features in Varsity’s pictures
exist separately from the utilitarian aspects of a dress? Can we extract those features as

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copyrightable design works standing alone, without bringing along, via picture or design,
the dresses of which they constitute a part?
Consider designs 074, 078, and 0815. They certainly look like cheerleader
uniforms. That is to say, they look like pictures of cheerleader uniforms, just like Van
Gogh’s old shoes look like shoes. I do not see how one could see them otherwise. Designs
299A and 299B present slightly closer questions. They omit some of the dresslike context
that the other designs possess. But the necklines, the sleeves, and the cut of the skirt
suggest that they too are pictures of dresses. Looking at all five of Varsity’s pictures, I do
not see how one could conceptualize the design features in a way that does not picture,
not just artistic designs, but dresses as well.
Were I to accept the majority’s invitation to “imaginatively remov[e]” the chevrons
and stripes as they are arranged on the neckline, waistline, sleeves, and skirt of each uniform,
and apply them on a “painter’s canvas,” that painting would be of a cheerleader’s dress. The
esthetic elements on which Varsity seeks protection exist only as part of the uniform design—
there is nothing to separate out but for dress-shaped lines that replicate the cut and style of
the uniforms. Hence, each design is not physically separate, nor is it conceptually separate,
from the useful article it depicts, namely, a cheerleader’s dress. They cannot be copyrighted.
Varsity, of course, could have sought a design patent for its designs. Or, it could have
sought a copyright on a textile design, even one with a similar theme of chevrons and lines.
But that is not the nature of Varsity’s copyright claim. It has instead claimed ownership
of the particular “‘treatment and arrangement’” of the chevrons and lines of the design as
they appear at the neckline, waist, skirt, sleeves, and overall cut of each uniform. The majority
imagines that Varsity submitted something different—that is, only the surface decorations of
chevrons and stripes, as in a textile design. As the majority sees it, Varsity’s copyright claim
would be the same had it submitted a plain rectangular space depicting chevrons and stripes,
like swaths from a bolt of fabric. But considered on their own, the simple stripes are plainly
unoriginal. Varsity, then, seeks to do indirectly what it cannot do directly: bring along the
design and cut of the dresses by seeking to protect surface decorations whose “treatment and
arrangement” are coextensive with that design and cut. As Varsity would have it, it would
prevent its competitors from making useful three-dimensional cheerleader uniforms by
submitting plainly unoriginal chevrons and stripes as cut and arranged on a useful article. But
with that cut and arrangement, the resulting pictures on which Varsity seeks protection do not
simply depict designs. They depict clothing. They depict the useful articles of which the
designs are inextricable parts. And Varsity cannot obtain copyright protection that would give
them the power to prevent others from making those useful uniforms, any more than Van
Gogh can copyright comfortable old shoes by painting their likeness.
I fear that, in looking past the three-dimensional design inherent in Varsity’s claim
by treating it as if it were no more than a design for a bolt of cloth, the majority has lost
sight of its own important limiting principle. One may not “claim a copyright in a useful
article merely by creating a replica of that article in some other medium,” such as in a
picture. That is to say, one cannot obtain a copyright that would give its holder “any
rights in the useful article that inspired it.”
With respect, I dissent.
Questions:
1.) Star Athletica holds that
A feature incorporated into the design of a useful article is eligible for
copyright protection only if the feature (1) can be perceived as a two- or

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three-dimensional work of art separate from the useful article and (2)
would qualify as a protectable pictorial, graphic, or sculptural work—
either on its own or fixed in some other tangible medium of expression—
if it were imagined separately from the useful article into which it is
incorporated. . . . [T]he statute does not require the imagined remainder to
be a fully functioning useful article at all, much less an equally useful one.
If one can copyright a feature of a useful article that makes that article useful, has the
useful articles doctrine been silently abolished? Surely that is not what the majority
intended, but is that the result? For the majority, is any design feature now potentially
copyrightable8, as long as it is not a complete replica of the useful article? What about
other industrial designs—is Breyer correct that, if the majority opinion is broadly
construed, one might copyright a shovel, imagining the curve of the blade and the ledge
for one’s foot floating free? The luminous stripes on a safety vest or straps on a life vest?
A banana costume?
2.) The appellate decision in Star Athletica had listed nine different approaches to
analyzing conceptual separability from courts, scholars, and the Copyright Office, and
arguably added a tenth one to the list. The Supreme Court’s majority opinion sought to
resolve this long-standing and intractable problem. The answer, Justice Thomas
explained, was simple. The Court should read the statute. “This is not a free-ranging
search for the best copyright policy, but rather “depends solely on statutory interpretation. . . . We thus begin and end our inquiry with the text.” One can imagine the many,
many judges and scholars who had wrestled with this issue over the years striking their
collective foreheads. “The text of the statute! Why didn’t we think of that?!” Textualism
is very much in vogue now in the Supreme Court—or at least it is often invoked. Are you
convinced that Justice Thomas’s opinion simply offers the plain meaning of § 101’s
separability requirement? Even if the provision were self-explicating, is textualism—
without focus on the goals of the system—the best approach? Consistent with Art 1 § 8
cl. 8—the Copyright Clause?
3.) Star Athletica has been widely criticized as an incoherent decision laying down a test
with no obvious limiting principles. What effect has the decision had in the lower courts?
We are glad you asked. Do the
two banana costumes on the
right infringe a copyright in the
costume on the left? In 2019, the
Third Circuit had the occasion
to address the age-old question
of banana costume copyrightability in the case of Silvertop
Associates v. Kangaroo Manufacturing (3d Cir. 2019). The result was a predictable prat-fall. Does this “design incorporate[] pictorial, graphic, or
sculptural features that can be identified separately from, and are capable of existing
independently of, the utilitarian aspects of the article” as § 101 requires? The answer of
8
Note that the court explicitly says it is not ruling on “originality,” so this requirement would still need to
be satisfied. However, in her concurrence Justice Ginsburg notes “In view of the dissent’s assertion that
Varsity’s designs are ‘plainly unoriginal,’ however, I note this Court’s recognition that ‘the requisite level of
creativity [for copyrightability] is extremely low; even a slight amount will suffice.’”

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course, should be an easy “no.” One cannot separate the graphic and sculptural features
of a banana costume designed to look like a banana from its utilitarian function (looking
like a banana) since those graphic and sculptural features consist in . . . looking like a
banana. The utilitarian functions are the same as the pictorial and graphic ones. Not only
can they not be separated, there is in fact nothing to separate. Map, meet terrain.
Or that would have been the conclusion before Star Athletica. After extensively
quoting the case, the 3rd Circuit goes on to explain the application of its ruling thus:
To begin with, Rasta’s banana costume is a “useful article.” The artistic
features of the costume, in combination, prove both separable and
capable of independent existence as a copyrightable work: a sculpture.
Those sculptural features include the banana’s combination of colors,
lines, shape, and length. They do not include the cutout holes for the
wearer’s arms, legs, and face; the holes’ dimensions; or the holes’
locations on the costume, because those features are utilitarian. Although
more difficult to imagine separately from the costume’s “non-appearance
related utility” (i.e., wearability) than many works, one can still imagine
the banana apart from the costume as an original sculpture. That sculpted
banana, once split from the costume, is not intrinsically utilitarian and
does not merely replicate the costume, so it may be copyrighted.
Notice the tortured logic by which the court narrows the utility of the costume by
insisting that it be the “non-appearance related” attribute of “wearability,” as if the
purchaser were simply searching through the contents of his closet looking for the
appropriate thing to wear. “I am thinking something warm and loose, so maybe a
sweatshirt and jeans, or—I don’t know—a banana?” But of course, it is precisely the
utility of a costume that it looks like the thing it portrays. Otherwise, it is not a costume.
The court’s discussion of the merger doctrine merely continues the judicial theatre
of the absurd. Surely the idea of a banana merges with its expression, a costume portrayal
of a banana, and thus threatens to allow someone to monopolize the very idea of a banana
costume? In the following remarkable passage, the court explains that it would not.
Here too, copyrighting the banana costume’s non-utilitarian features in
combination would not threaten such monopolization. Kangaroo points
to no specific feature that necessarily results from the costume’s subject
matter (a banana). Although a banana costume is likely to be yellow, it
could be any shade of yellow—or green or brown for that matter.
Although a banana costume is likely to be curved, it need not be—let
alone in any particular manner. And although a banana costume is likely
to have ends that resemble a natural banana’s, those tips need not look
like Rasta’s black tips (in color, shape, or size). [Emphasis added]
So, while the court admits that a banana costume is likely to be yellow and curved, it says
it could also be brown and straight. On Halloween, when your child goes out in her brown,
straight, banana costume and her friends ask “why are you dressed up as a stick!?” she
will be able to respond with a simple, terse explanation. “Star Athletica,” she will say.
Mockery is irresistible yet perhaps unworthy. Is this not what inevitably happens
when a distinguished Appeals Court struggles to apply an incoherent test laid down by
the Supreme Court? The silliness comes from the top, but proliferates rapidly.
4.) Is Silvertop consistent with Kalpakian, the bee pin case?
5.) Would the Ribbon Rack now be copyrightable?

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6.) In the trademark context, in Wal-Mart, the Court held that product design (in that
case, the design of children’s seersucker outfits) can never be inherently distinctive,
drawing a “bright line” that favored competition:
Consumers should not be deprived of the benefits of competition with
regard to the utilitarian and esthetic purposes that product design ordinarily
serves by a rule of law that facilitates plausible threats of suit against new
entrants based upon alleged inherent distinctiveness. How easy it is to
mount a plausible suit depends, of course, upon the clarity of the test. . . .
Competition is deterred, however, not merely by successful suit but by the
plausible threat of successful suit, and given the unlikelihood of inherently
source-identifying design, the game of allowing suit based upon alleged
inherent distinctiveness seems to us not worth the candle.
Why is the same not true of copyright in product design? Where does Star Athletica draw
the “bright line”? In TrafFix, the Court explained that “copying is not always discouraged
or disfavored by the laws which preserve our competitive economy. Allowing competitors to copy will have salutary effects in many instances.” Is that the approach the
court adopts here?
7.) Congress has repeatedly declined to extend copyright to fashion designs, expressing
concern that this “would create a new monopoly which has not been justified by a showing
that its benefits will outweigh the disadvantage of removing such designs from free public
use.” Breyer echoes this with his concern that the majority’s opinion, if interpreted
broadly, could “risk increased prices and unforeseeable disruption in the clothing industry,
which in the United States alone encompasses nearly $370 billion in annual spending and
1.8 million jobs.” During oral argument in Star Athletica, Justice Sotomayor said: “You’re
killing knock-offs with copyright. You haven’t been able to do it with trademark law. You
haven’t been able to do it with patent designs. We are now going to use copyright law to
kill the knockoff industry. I don’t know that that’s bad. I’m just saying.” After the decision
came out, many news reports hailed it as a victory for the fashion industry. True?
8.) You encountered cheerleader uniforms in Dallas Cowboys and may have wondered,
“what is the function of a cheerleader uniform”? In the Sixth Circuit decision in Star
Athletica, much turned on this question. The majority held that the uniform’s function
was to “cover the body, permit free movement, and wick moisture,” and not to “identify
the wearer as a cheerleader.” The dissent disagreed: “That broad definition could be used
to describe all athletic gear. But the particular athletic uniforms before us serve to identify
the wearer as a cheerleader. Without stripes, braids, and chevrons, we are left with a blank
white pleated skirt and crop top. As the district court recognized, the reasonable observer
would not associate this blank outfit with cheerleading. This may be appropriate attire
for a match at the All England Lawn Tennis Club, but not for a member of a cheerleading
squad.” Do you agree?

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5.) Methods of Operation: Introduction to Computer Software

Lotus Development Corp. v. Borland Intern’l, Inc.

49 F.3d 807 (1st Cir. 1995)

STAHL, Circuit Judge.
This appeal requires us to decide whether a computer menu command hierarchy is
copyrightable subject matter. In particular, we must decide whether, as the district court
held, plaintiff-appellee Lotus Development Corporation’s copyright in Lotus 1-2-3, a
computer spreadsheet program, was infringed by defendant-appellant Borland International, Inc., when Borland copied the Lotus 1-2-3 menu command hierarchy into its
Quattro and Quattro Pro computer spreadsheet programs.
I.
Background
Lotus 1-2-3 is a spreadsheet program that enables users to perform accounting
functions electronically on a computer. Users manipulate and control the program via a
series of menu commands, such as “Copy,” “Print,” and “Quit.” Users choose commands
either by highlighting them on the screen or by typing their first letter. In all, Lotus 1-2-3
has 469 commands arranged into more than 50 menus and submenus.

Image information available at http://en
.wikipedia.org/wiki/File:Lotus-123-3.0-dos.png.

Screenshot of Quattro Pro reprinted from
Personal Computing, issue 4/1990, at
http://www.aresluna.org/attached/computer
history/articles/spreadsheets/quattroprounify
andconquer/.

Lotus 1-2-3, like many computer programs, allows users to write what are called
“macros.” By writing a macro, a user can designate a series of command choices with a
single macro keystroke. Then, to execute that series of commands in multiple parts of the
spreadsheet, rather than typing the whole series each time, the user only needs to type
the single pre-programmed macro keystroke, causing the program to recall and perform
the designated series of commands automatically. Thus, Lotus 1-2-3 macros shorten the
time needed to set up and operate the program.
The district court found, and Borland does not now contest, that Borland included in
its Quattro and Quattro Pro version 1.0 programs “a virtually identical copy of the entire
1-2-3 menu tree.” Borland III. In so doing, Borland did not copy any of Lotus’s underlying

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computer code; it copied only the words and structure of Lotus’s menu command hierarchy.
Borland included the Lotus menu command hierarchy in its programs to make them
compatible with Lotus 1-2-3 so that spreadsheet users who were already familiar with Lotus
1-2-3 would be able to switch to the Borland programs without having to learn new
commands or rewrite their Lotus macros.
In its Quattro and Quattro Pro version 1.0 programs, Borland achieved compatibility with Lotus 1-2-3 by offering its users an alternate user interface, the “Lotus Emulation
Interface.” By activating the Emulation Interface, Borland users would see the Lotus menu
commands on their screens and could interact with Quattro or Quattro Pro as if using
Lotus 1-2-3, albeit with a slightly different looking screen and with many Borland options
not available on Lotus 1-2-3. In effect, Borland allowed users to choose how they wanted
to communicate with Borland’s spreadsheet programs: either by using menu commands
designed by Borland, or by using the commands and command structure used in Lotus
1-2-3 augmented by Borland-added commands.
Lotus filed this action against Borland in the District of Massachusetts on July 2,
1990, four days after a district court held that the Lotus 1-2-3 “menu structure, taken as
a whole—including the choice of command terms [and] the structure and order of those
terms,” was protected expression covered by Lotus’s copyrights.
Lotus and Borland filed cross motions for summary judgment; the district court
denied both motions on March 20, 1992, concluding that “neither party’s motion is
supported by the record.” Borland I. The district court invited the parties to file renewed
summary judgment motions that would “focus their arguments more precisely” in light
of rulings it had made in conjunction with its denial of their summary judgment motions.
Both parties filed renewed motions for summary judgment on April 24, 1992. In its
motion, Borland contended that the Lotus 1-2-3 menus were not copyrightable as a matter
of law and that no reasonable trier of fact could find that the similarity between its
products and Lotus 1-2-3 was sufficient to sustain a determination of infringement. Lotus
contended in its motion that Borland had copied Lotus 1-2-3’s entire user interface and
had thereby infringed Lotus’s copyrights.
On July 31, 1992, the district court denied Borland’s motion and granted Lotus’s
motion in part. The district court ruled that the Lotus menu command hierarchy was
copyrightable expression because
[a] very satisfactory spreadsheet menu tree can be constructed using
different commands and a different command structure from those of
Lotus 1-2-3. In fact, Borland has constructed just such an alternate tree
for use in Quattro Pro’s native mode. Even if one holds the arrangement
of menu commands constant, it is possible to generate literally millions
of satisfactory menu trees by varying the menu commands employed.
Borland II. The district court demonstrated this by offering alternate command words for
the ten commands that appear in Lotus’s main menu. For example, the district court stated
that “[t]he ‘Quit’ command could be named ‘Exit’ without any other modifications,” and
that “[t]he ‘Copy’ command could be called ‘Clone,’ ‘Ditto,’ ‘Duplicate,’ ‘Imitate,’
‘Mimic,’ ‘Replicate,’ and ‘Reproduce,’ among others.” Because so many variations were
possible, the district court concluded that the Lotus developers’ choice and arrangement
of command terms, reflected in the Lotus menu command hierarchy, constituted
copyrightable expression.
In granting partial summary judgment to Lotus, the district court held that Borland
had infringed Lotus’s copyright in Lotus 1-2-3:

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[A]s a matter of law, Borland’s Quattro products infringe the Lotus 1-2-3
copyright because of (1) the extent of copying of the “menu commands”
and “menu structure” that is not genuinely disputed in this case, (2) the
extent to which the copied elements of the “menu commands” and “menu
structure” contain expressive aspects separable from the functions of the
“menu commands” and “menu structure,” and (3) the scope of those
copied expressive aspects as an integral part of Lotus 1-2-3.
Borland II. The court nevertheless concluded that while the Quattro and Quattro Pro
programs infringed Lotus’s copyright, Borland had not copied the entire Lotus 1-2-3 user
interface, as Lotus had contended. Accordingly, the court concluded that a jury trial was
necessary to determine the scope of Borland’s infringement, including whether Borland
copied the long prompts2 of Lotus 1-2-3, whether the long prompts contained expressive
elements, and to what extent, if any, functional constraints limited the number of possible
ways that the Lotus menu command hierarchy could have been arranged at the time of
its creation. See Borland III. Additionally, the district court granted Lotus summary
judgment on Borland’s affirmative defense of waiver, but not on its affirmative defenses
of laches and estoppel. Borland II.
Immediately following the district court’s summary judgment decision, Borland
removed the Lotus Emulation Interface from its products. Thereafter, Borland’s
spreadsheet programs no longer displayed the Lotus 1-2-3 menus to Borland users, and as
a result Borland users could no longer communicate with Borland’s programs as if they
were using a more sophisticated version of Lotus 1-2-3. Nonetheless, Borland’s programs
continued to be partially compatible with Lotus 1-2-3, for Borland retained what it called
the “Key Reader” in its Quattro Pro programs. Once turned on, the Key Reader allowed
Borland’s programs to understand and perform some Lotus 1-2-3 macros.3 With the Key
Reader on, the Borland programs used Quattro Pro menus for display, interaction, and
macro execution, except when they encountered a slash (“/”) key in a macro (the starting
key for any Lotus 1-2-3 macro), in which case they interpreted the macro as having been
written for Lotus 1-2-3. Accordingly, people who wrote or purchased macros to shorten the
time needed to perform an operation in Lotus 1-2-3 could still use those macros in
Borland’s programs. The district court permitted Lotus to file a supplemental complaint
alleging that the Key Reader infringed its copyright.
In its Phase I-trial decision, the district court found that “each of the Borland
emulation interfaces contains a virtually identical copy of the 1-2-3 menu tree and that
the 1-2-3 menu tree is capable of a wide variety of expression.”
In its Phase II-trial decision, the district court found that Borland’s Key Reader file
Lotus 1-2-3 utilizes a two-line menu; the top line lists the commands from which the user may choose, and
the bottom line displays what Lotus calls its “long prompts.” The long prompts explain, as a sort of “help
text,” what the highlighted menu command will do if entered. For example, the long prompt for the
“Worksheet” command displays the submenu that the “Worksheet” command calls up; it reads “Global,
Insert, Delete, Column, Erase, Titles, Window, Status, Page.” The long prompt for the “Copy” command
explains what function the “Copy” command will perform: “Copy a cell or range of cells.” The long prompt
for the “Quit” command reads, “End 1-2-3 session (Have you saved your work?).”
Prior to trial, the parties agreed to exclude the copying of the long prompts from the case; Lotus agreed
not to contend that Borland had copied the long prompts, Borland agreed not to argue that it had not copied
the long prompts, and both sides agreed not to argue that the issue of whether Borland had copied the long
prompts was material to any other issue in the case. See Borland III.
3
Because Borland’s programs could no longer display the Lotus menu command hierarchy to users, the Key
Reader did not allow debugging or modification of macros, nor did it permit the execution of most interactive
macros.
2

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included “a virtually identical copy of the Lotus menu tree structure, but represented in
a different form and with first letters of menu command names in place of the full menu
command names.” In other words, Borland’s programs no longer included the Lotus
command terms, but only their first letters. The district court held that “the Lotus menu
structure, organization, and first letters of the command names . . . constitute part of the
protectable expression found in [Lotus 1-2-3].” Accordingly, the district court held that
with its Key Reader, Borland had infringed Lotus’s copyright. The district court then
entered a permanent injunction against Borland, from which Borland appeals.
This appeal concerns only Borland’s copying of the Lotus menu command
hierarchy into its Quattro programs and Borland’s affirmative defenses to such copying.
Lotus has not cross-appealed; in other words, Lotus does not contend on appeal that the
district court erred in finding that Borland had not copied other elements of Lotus 1-2-3,
such as its screen displays.
II.
Discussion
On appeal, Borland does not dispute that it factually copied the words and arrangement of the Lotus menu command hierarchy. Rather, Borland argues that it “lawfully
copied the unprotectable menus of Lotus 1-2-3.” Borland contends that the Lotus menu
command hierarchy is not copyrightable because it is a system, method of operation,
process, or procedure foreclosed from protection by 17 U.S.C. § 102(b). Borland also
raises a number of affirmative defenses.
A. Copyright Infringement Generally
To establish copyright infringement, a plaintiff must prove “(1) ownership of a valid
copyright, and (2) copying of constituent elements of the work that are original.” Feist
Publications, Inc. v. Rural Tel. Serv. Co. (1991). To show ownership of a valid copyright
and therefore satisfy Feist’s first prong, a plaintiff must prove that the work as a whole is
original and that the plaintiff complied with applicable statutory formalities. See
Engineering Dynamics, Inc. v. Structural Software, Inc. (5th Cir. 1994). “In judicial
proceedings, a certificate of copyright registration constitutes prima facie evidence of
copyrightability and shifts the burden to the defendant to demonstrate why the copyright
is not valid.” Bibbero Sys., Inc. v. Colwell Sys., Inc. (9th Cir. 1990); see also 17 U.S.C.
§ 410(c); Folio Impressions, Inc. v. Byer California (2d Cir. 1991) (presumption of validity may be rebutted).
To show actionable copying and therefore satisfy Feist’s second prong, a plaintiff
must first prove that the alleged infringer copied plaintiff’s copyrighted work as a factual
matter; to do this, he or she may either present direct evidence of factual copying or, if that
is unavailable, evidence that the alleged infringer had access to the copyrighted work and
that the offending and copyrighted works are so similar that the court may infer that there
was factual copying (i.e., probative similarity). Engineering Dynamics; see also Concrete
Mach. The plaintiff must then prove that the copying of copyrighted material was so
extensive that it rendered the offending and copyrighted works substantially similar.
In this appeal, we are faced only with whether the Lotus menu command hierarchy
is copyrightable subject matter in the first instance, for Borland concedes that Lotus has
a valid copyright in Lotus 1-2-3 as a whole5 and admits to factually copying the Lotus
Computer programs receive copyright protection as “literary works.” See 17 U.S.C. § 102(a)(1) (granting
protection to “literary works”) and 17 U.S.C. § 101 (defining “literary works” as “works . . . expressed in
words, numbers, or other verbal or numerical symbols or indicia, regardless of the nature of the material

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menu command hierarchy. As a result, this appeal is in a very different posture from most
copyright-infringement cases, for copyright infringement generally turns on whether the
defendant has copied protected expression as a factual matter. Because of this different
posture, most copyright-infringement cases provide only limited help to us in deciding
this appeal. This is true even with respect to those copyright-infringement cases that deal
with computers and computer software.
B. Matter of First Impression
Whether a computer menu command hierarchy constitutes copyrightable subject
matter is a matter of first impression in this court. While some other courts appear to
have touched on it briefly in dicta, see, e.g., Autoskill, Inc. v. National Educ. Support
Sys., Inc., [cert. denied, 510 U.S. 916] (1993), we know of no cases that deal with the
copyrightability of a menu command hierarchy standing on its own (i.e., without other
elements of the user interface, such as screen displays, in issue). Thus we are navigating
in uncharted waters.
Borland vigorously argues, however, that the Supreme Court charted our course more
than 100 years ago when it decided Baker v. Selden (1879). In Baker v. Selden, the Court
held that Selden’s copyright over the textbook in which he explained his new way to do
accounting did not grant him a monopoly on the use of his accounting system.6
Borland argues:
“The facts of Baker v. Selden, and even the arguments advanced by the
parties in that case, are identical to those in this case. The only difference
is that the “user interface” of Selden’s system was implemented by pen
and paper rather than by computer.”
To demonstrate that Baker v. Selden and this appeal both involve accounting systems,
Borland even supplied this court with a video that, with special effects, shows Selden’s
paper forms “melting” into a computer screen and transforming into Lotus 1-2-3.
We do not think that Baker v. Selden is nearly as analogous to this appeal as Borland
claims. Of course, Lotus 1-2-3 is a computer spreadsheet, and as such its grid of horizontal
rows and vertical columns certainly resembles an accounting ledger or any other paper
spreadsheet. Those grids, however, are not at issue in this appeal for, unlike Selden, Lotus
does not claim to have a monopoly over its accounting system. Rather, this appeal involves
Lotus’s monopoly over the commands it uses to operate the computer. Accordingly, this
appeal is not, as Borland contends, “identical” to Baker v. Selden.
C. Altai
Before we analyze whether the Lotus menu command hierarchy is a system, method
of operation, process, or procedure, we first consider the applicability of the test the Second
Circuit set forth in Computer Assoc. Int’l, Inc. v. Altai, Inc. (2d Cir. 1992). The Second
Circuit designed its Altai test to deal with the fact that computer programs, copyrighted as
“literary works,” can be infringed by what is known as “nonliteral” copying, which is
copying that is paraphrased or loosely paraphrased rather than word for word. . . .
The Altai test involves three steps: abstraction, filtration, and comparison. The
abstraction step requires courts to “dissect the allegedly copied program’s structure and
objects, such as books, periodicals, phonorecords, film, tapes, disks, or cards, in which they are embodied”
(emphasis added)); see also H.R.Rep. No. 1476, 94th Cong., 2d Sess. 54 (1976), reprinted in 1976
U.S.C.C.A.N. 5659, 5667 (“The term ‘literary works’ . . . includes computer data bases, and computer
programs to the extent that they incorporate authorship in the programmer’s expression of original ideas, as
distinguished from the ideas themselves.”).
6
Selden’s system of double-entry bookkeeping is the now almost-universal T-accounts system.

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isolate each level of abstraction contained within it.” Altai. This step enables courts to
identify the appropriate framework within which to separate protectable expression from
unprotected ideas. Second, courts apply a “filtration” step in which they examine “the
structural components at each level of abstraction to determine whether their particular
inclusion at that level was ‘idea’ or was dictated by considerations of efficiency, so as to be
necessarily incidental to that idea; required by factors external to the program itself; or
taken from the public domain.” Finally, courts compare the protected elements of the
infringed work (i.e., those that survived the filtration screening) to the corresponding
elements of the allegedly infringing work to determine whether there was sufficient
copying of protected material to constitute infringement.
In the instant appeal, we are not confronted with alleged nonliteral copying of
computer code. Rather, we are faced with Borland’s deliberate, literal copying of the
Lotus menu command hierarchy. Thus, we must determine not whether nonliteral
copying occurred in some amorphous sense, but rather whether the literal copying of the
Lotus menu command hierarchy constitutes copyright infringement.
While the Altai test may provide a useful framework for assessing the alleged
nonliteral copying of computer code, we find it to be of little help in assessing whether the
literal copying of a menu command hierarchy constitutes copyright infringement. In fact,
we think that the Altai test in this context may actually be misleading because, in instructing
courts to abstract the various levels, it seems to encourage them to find a base level that
includes copyrightable subject matter that, if literally copied, would make the copier liable
for copyright infringement. While that base (or literal) level would not be at issue in a
nonliteral-copying case like Altai, it is precisely what is at issue in this appeal. We think that
abstracting menu command hierarchies down to their individual word and menu levels and
then filtering idea from expression at that stage, as both the Altai and the district court tests
require, obscures the more fundamental question of whether a menu command hierarchy
can be copyrighted at all. The initial inquiry should not be whether individual components
of a menu command hierarchy are expressive, but rather whether the menu command
hierarchy as a whole can be copyrighted.
D. The Lotus Menu Command Hierarchy: A “Method of Operation”
Borland argues that the Lotus menu command hierarchy is uncopyrightable
because it is a system, method of operation, process, or procedure foreclosed from
copyright protection by 17 U.S.C. § 102(b). Section 102(b) states: “In no case does
copyright protection for 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.” Because
we conclude that the Lotus menu command hierarchy is a method of operation, we do
not consider whether it could also be a system, process, or procedure.
We think that “method of operation,” as that term is used in § 102(b), refers to the
means by which a person operates something, whether it be a car, a food processor, or a
computer. Thus a text describing how to operate something would not extend copyright
protection to the method of operation itself; other people would be free to employ that method and to describe it in their own words. Similarly, if a new method of operation is used
rather than described, other people would still be free to employ or describe that method.
We hold that the Lotus menu command hierarchy is an uncopyrightable “method
of operation.” The Lotus menu command hierarchy provides the means by which users
control and operate Lotus 1-2-3. If users wish to copy material, for example, they use the
“Copy” command. If users wish to print material, they use the “Print” command. Users

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must use the command terms to tell the computer what to do. Without the menu command
hierarchy, users would not be able to access and control, or indeed make use of, Lotus
1-2-3’s functional capabilities.
The Lotus menu command hierarchy does not merely explain and present Lotus
1-2-3’s functional capabilities to the user; it also serves as the method by which the program
is operated and controlled. The Lotus menu command hierarchy is different from the Lotus
long prompts, for the long prompts are not necessary to the operation of the program; users
could operate Lotus 1-2-3 even if there were no long prompts.9 The Lotus menu command
hierarchy is also different from the Lotus screen displays, for users need not “use” any
expressive aspects of the screen displays in order to operate Lotus 1-2-3; because the way
the screens look has little bearing on how users control the program, the screen displays
are not part of Lotus 1-2-3’s “method of operation.”10 The Lotus menu command hierarchy
is also different from the underlying computer code, because while code is necessary for
the program to work, its precise formulation is not. In other words, to offer the same
capabilities as Lotus 1-2-3, Borland did not have to copy Lotus’s underlying code (and
indeed it did not); to allow users to operate its programs in substantially the same way,
however, Borland had to copy the Lotus menu command hierarchy. Thus the Lotus 1-2-3
code is not a uncopyrightable “method of operation.”
The district court held that the Lotus menu command hierarchy, with its specific
choice and arrangement of command terms, constituted an “expression” of the “idea” of
operating a computer program with commands arranged hierarchically into menus and
submenus. Borland II. Under the district court’s reasoning, Lotus’s decision to employ
hierarchically arranged command terms to operate its program could not foreclose its
competitors from also employing hierarchically arranged command terms to operate their
programs, but it did foreclose them from employing the specific command terms and
arrangement that Lotus had used. In effect, the district court limited Lotus 1-2-3’s
“method of operation” to an abstraction.
Accepting the district court’s finding that the Lotus developers made some
expressive choices in choosing and arranging the Lotus command terms, we nonetheless
hold that that expression is not copyrightable because it is part of Lotus 1-2-3’s “method
of operation.” We do not think that “methods of operation” are limited to abstractions;
rather, they are the means by which a user operates something. If specific words are
essential to operating something, then they are part of a “method of operation” and, as
such, are unprotectable. This is so whether they must be highlighted, typed in, or even
spoken, as computer programs no doubt will soon be controlled by spoken words.
The fact that Lotus developers could have designed the Lotus menu command
hierarchy differently is immaterial to the question of whether it is a “method of operation.”
In other words, our initial inquiry is not whether the Lotus menu command hierarchy
incorporates any expression. Rather, our initial inquiry is whether the Lotus menu command
hierarchy is a “method of operation.” Concluding, as we do, that users operate Lotus 1-2-3
by using the Lotus menu command hierarchy, and that the entire Lotus menu command
As the Lotus long prompts are not before us on appeal, we take no position on their copyrightability, although
we do note that a strong argument could be made that the brief explanations they provide “merge” with the
underlying idea of explaining such functions. See Morrissey v. Procter & Gamble Co., (1st Cir. 1967) (when
the possible ways to express an idea are limited, the expression “merges” with the idea and is therefore
uncopyrightable; when merger occurs, identical copying is permitted).
10
As they are not before us on appeal, we take no position on whether the Lotus 1-2-3 screen displays
constitute original expression capable of being copyrighted.
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hierarchy is essential to operating Lotus 1-2-3, we do not inquire further whether that
method of operation could have been designed differently. The “expressive” choices of what
to name the command terms and how to arrange them do not magically change the
uncopyrightable menu command hierarchy into copyrightable subject matter.
Our holding that “methods of operation” are not limited to mere abstractions is
bolstered by Baker v. Selden. In Baker, the Supreme Court explained that
the teachings of science and the rules and methods of useful art have
their final end in application and use; and this application and use are
what the public derive from the publication of a book which teaches
them. . . . The description of the art in a book, though entitled to the
benefit of copyright, lays no foundation for an exclusive claim to the art
itself. The object of the one is explanation; the object of the other is use.
The former may be secured by copyright. The latter can only be secured,
if it can be secured at all, by letters-patent.
Lotus wrote its menu command hierarchy so that people could learn it and use it.
Accordingly, it falls squarely within the prohibition on copyright protection established in
Baker v. Selden and codified by Congress in § 102(b).
In many ways, the Lotus menu command hierarchy is like the buttons used to
control, say, a video cassette recorder (“VCR”). A VCR is a machine that enables one to
watch and record video tapes. Users operate VCRs by pressing a series of buttons that are
typically labelled “Record, Play, Reverse, Fast Forward, Pause, Stop/Eject.” That the
buttons are arranged and labeled does not make them a “literary work,” nor does it make
them an “expression” of the abstract “method of operating” a VCR via a set of labeled
buttons. Instead, the buttons are themselves the “method of operating” the VCR.
When a Lotus 1-2-3 user chooses a command, either by highlighting it on the
screen or by typing its first letter, he or she effectively pushes a button. Highlighting the
“Print” command on the screen, or typing the letter “P,” is analogous to pressing a VCR
button labeled “Play.”
Just as one could not operate a buttonless VCR, it would be impossible to operate
Lotus 1-2-3 without employing its menu command hierarchy. Thus the Lotus command
terms are not equivalent to the labels on the VCR’s buttons, but are instead equivalent to
the buttons themselves. Unlike the labels on a VCR’s buttons, which merely make
operating a VCR easier by indicating the buttons’ functions, the Lotus menu commands
are essential to operating Lotus 1-2-3. Without the menu commands, there would be no
way to “push” the Lotus buttons, as one could push unlabeled VCR buttons. While Lotus
could probably have designed a user interface for which the command terms were mere
labels, it did not do so here. Lotus 1-2-3 depends for its operation on use of the precise
command terms that make up the Lotus menu command hierarchy.
One might argue that the buttons for operating a VCR are not analogous to the
commands for operating a computer program because VCRs are not copyrightable,
whereas computer programs are. . . . Computer programs, unlike VCRs, are copyrightable
as “literary works.” 17 U.S.C. § 102(a). Accordingly, one might argue, the “buttons” used
to operate a computer program are not like the buttons used to operate a VCR, for they are
not subject to a useful-article exception. The response, of course, is that the arrangement
of buttons on a VCR would not be copyrightable even without a useful-article exception,
because the buttons are an uncopyrightable “method of operation.” Similarly, the “buttons”
of a computer program are also an uncopyrightable “method of operation.”
That the Lotus menu command hierarchy is a “method of operation” becomes

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clearer when one considers program compatibility. Under Lotus’s theory, if a user uses
several different programs, he or she must learn how to perform the same operation in a
different way for each program used. For example, if the user wanted the computer to
print material, then the user would have to learn not just one method of operating the
computer such that it prints, but many different methods. We find this absurd. The fact
that there may be many different ways to operate a computer program, or even many
different ways to operate a computer program using a set of hierarchically arranged
command terms, does not make the actual method of operation chosen copyrightable; it
still functions as a method for operating the computer and as such is uncopyrightable.
Consider also that users employ the Lotus menu command hierarchy in writing
macros. Under the district court’s holding, if the user wrote a macro to shorten the time
needed to perform a certain operation in Lotus 1-2-3, the user would be unable to use that
macro to shorten the time needed to perform that same operation in another program.
Rather, the user would have to rewrite his or her macro using that other program’s menu
command hierarchy. This is despite the fact that the macro is clearly the user’s own work
product. We think that forcing the user to cause the computer to perform the same operation
in a different way ignores Congress’s direction in § 102(b) that “methods of operation” are
not copyrightable. That programs can offer users the ability to write macros in many different ways does not change the fact that, once written, the macro allows the user to perform an operation automatically. As the Lotus menu command hierarchy serves as the basis
for Lotus 1-2-3 macros, the Lotus menu command hierarchy is a “method of operation.”
In holding that expression that is part of a “method of operation” cannot be
copyrighted, we do not understand ourselves to go against the Supreme Court’s holding
in Feist. In Feist, the Court explained:
The primary objective of copyright is not to reward the labor of authors,
but to promote the Progress of Science and useful Arts. To this end,
copyright assures authors the right to their original expression, but
encourages others to build freely upon the ideas and information
conveyed by a work.
Feist. We do not think that the Court’s statement that “copyright assures authors the right to
their original expression” indicates that all expression is necessarily copyrightable; while
original expression is necessary for copyright protection, we do not think that it is alone sufficient. Courts must still inquire whether original expression falls within one of the categories
foreclosed from copyright protection by § 102(b), such as being a “method of operation.”
We also note that in most contexts, there is no need to “build” upon other people’s
expression, for the ideas conveyed by that expression can be conveyed by someone else
without copying the first author’s expression.13 In the context of methods of operation,
however, “building” requires the use of the precise method of operation already
employed; otherwise, “building” would require dismantling, too. Original developers are
not the only people entitled to build on the methods of operation they create; anyone can.
Thus, Borland may build on the method of operation that Lotus designed and may use
the Lotus menu command hierarchy in doing so. . . .
III.
Conclusion
Because we hold that the Lotus menu command hierarchy is uncopyrightable
13
When there are a limited number of ways to express an idea, however, the expression “merges” with the
idea and becomes uncopyrightable. Morrissey, 379 F.2d at 678–79.

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subject matter, we further hold that Borland did not infringe Lotus’s copyright by copying
it. Accordingly, we need not consider any of Borland’s affirmative defenses. The
judgment of the district court is
Reversed.
BOUDIN, Circuit Judge, concurring.
The importance of this case, and a slightly different emphasis in my view of the
underlying problem, prompt me to add a few words to the majority’s tightly focused
discussion.
I.
Most of the law of copyright and the “tools” of analysis have developed in the
context of literary works such as novels, plays, and films. In this milieu, the principal
problem—simply stated, if difficult to resolve—is to stimulate creative expression
without unduly limiting access by others to the broader themes and concepts deployed
by the author. The middle of the spectrum presents close cases; but a “mistake” in
providing too much protection involves a small cost: subsequent authors treating the
same themes must take a few more steps away from the original expression.
The problem presented by computer programs is fundamentally different in one
respect. The computer program is a means for causing something to happen; it has a
mechanical utility, an instrumental role, in accomplishing the world’s work. Granting
protection, in other words, can have some of the consequences of patent protection in
limiting other people’s ability to perform a task in the most efficient manner. Utility does
not bar copyright (dictionaries may be copyrighted), but it alters the calculus.
Of course, the argument for protection is undiminished, perhaps even enhanced,
by utility: if we want more of an intellectual product, a temporary monopoly for the
creator provides incentives for others to create other, different items in this class. But the
“cost” side of the equation may be different where one places a very high value on public
access to a useful innovation that may be the most efficient means of performing a given
task. Thus, the argument for extending protection may be the same; but the stakes on the
other side are much higher.
It is no accident that patent protection has preconditions that copyright protection
does not—notably, the requirements of novelty and non-obviousness—and that patents
are granted for a shorter period than copyrights. This problem of utility has sometimes
manifested itself in copyright cases, such as Baker v. Selden (1879), and been dealt with
through various formulations that limit copyright or create limited rights to copy. But the
case law and doctrine addressed to utility in copyright have been brief detours in the
general march of copyright law.
Requests for the protection of computer menus present the concern with fencing
off access to the commons in an acute form. A new menu may be a creative work, but
over time its importance may come to reside more in the investment that has been made
by users in learning the menu and in building their own mini-programs—macros—in
reliance upon the menu. Better typewriter keyboard layouts may exist, but the familiar
QWERTY keyboard dominates the market because that is what everyone has learned to
use. See P. David, CLIO and the Economics of QWERTY, 75 Am. Econ. Rev. 332 (1985).
The QWERTY keyboard is nothing other than a menu of letters.
Thus, to assume that computer programs are just one more new means of
expression, like a filmed play, may be quite wrong. The “form”—the written source code
or the menu structure depicted on the screen—look hauntingly like the familiar stuff of

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copyright; but the “substance” probably has more to do with problems presented in patent
law or, as already noted, in those rare cases where copyright law has confronted
industrially useful expressions. Applying copyright law to computer programs is like
assembling a jigsaw puzzle whose pieces do not quite fit.
All of this would make no difference if Congress had squarely confronted the issue,
and given explicit directions as to what should be done. The Copyright Act of 1976 took a
different course. While Congress said that computer programs might be subject to
copyright protection, it said this in very general terms; and, especially in § 102(b),
Congress adopted a string of exclusions that if taken literally might easily seem to exclude
most computer programs from protection. The only detailed prescriptions for computers
involve narrow issues (like back-up copies) of no relevance here.
Of course, one could still read the statute as a congressional command that the
familiar doctrines of copyright law be taken and applied to computer programs, in cookie
cutter fashion, as if the programs were novels or play scripts. Some of the cases involving
computer programs embody this approach. It seems to be mistaken on two different
grounds: the tradition of copyright law, and the likely intent of Congress.
The broad-brush conception of copyright protection, the time limits, and the
formalities have long been prescribed by statute. But the heart of copyright doctrine—
what may be protected and with what limitations and exceptions—has been developed
by the courts through experience with individual cases. B. Kaplan, An Unhurried View
of Copyright 40 (1967). Occasionally Congress addresses a problem in detail. For the
most part the interstitial development of copyright through the courts is our tradition.
Nothing in the language or legislative history of the 1976 Act, or at least nothing
brought to our attention, suggests that Congress meant the courts to abandon this case-bycase approach. Indeed, by setting up § 102(b) as a counterpoint theme, Congress has
arguably recognized the tension and left it for the courts to resolve through the development
of case law. And case law development is adaptive: it allows new problems to be solved
with help of earlier doctrine, but it does not preclude new doctrines to meet new situations.
II.
In this case, the raw facts are mostly, if not entirely, undisputed. Although the
inferences to be drawn may be more debatable, it is very hard to see that Borland has
shown any interest in the Lotus menu except as a fall-back option for those users already
committed to it by prior experience or in order to run their own macros using 1-2-3
commands. At least for the amateur, accessing the Lotus menu in the Borland Quattro or
Quattro Pro program takes some effort.
Put differently, it is unlikely that users who value the Lotus menu for its own
sake—independent of any investment they have made themselves in learning Lotus’
commands or creating macros dependent upon them—would choose the Borland
program in order to secure access to the Lotus menu. Borland’s success is due primarily
to other features. Its rationale for deploying the Lotus menu bears the ring of truth.
Now, any use of the Lotus menu by Borland is a commercial use and deprives
Lotus of a portion of its “reward,” in the sense that an infringement claim if allowed
would increase Lotus’ profits. But this is circular reasoning: broadly speaking, every
limitation on copyright or privileged use diminishes the reward of the original creator.
Yet not every writing is copyrightable or every use an infringement. The provision of
reward is one concern of copyright law, but it is not the only one. If it were, copyrights
would be perpetual and there would be no exceptions.
The present case is an unattractive one for copyright protection of the menu. The

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menu commands (e.g., “print,” “quit”) are largely for standard procedures that Lotus did
not invent and are common words that Lotus cannot monopolize. What is left is the
particular combination and sub-grouping of commands in a pattern devised by Lotus.
This arrangement may have a more appealing logic and ease of use than some other
configurations; but there is a certain arbitrariness to many of the choices.
If Lotus is granted a monopoly on this pattern, users who have learned the command
structure of Lotus 1-2-3 or devised their own macros are locked into Lotus, just as a typist
who has learned the QWERTY keyboard would be the captive of anyone who had a
monopoly on the production of such a keyboard. Apparently, for a period Lotus 1-2-3 has
had such sway in the market that it has represented the de facto standard for electronic
spreadsheet commands. So long as Lotus is the superior spreadsheet—either in quality or
in price—there may be nothing wrong with this advantage.
But if a better spreadsheet comes along, it is hard to see why customers who have
learned the Lotus menu and devised macros for it should remain captives of Lotus
because of an investment in learning made by the users and not by Lotus. Lotus has
already reaped a substantial reward for being first; assuming that the Borland program is
now better, good reasons exist for freeing it to attract old Lotus customers: to enable the
old customers to take advantage of a new advance, and to reward Borland in turn for
making a better product. If Borland has not made a better product, then customers will
remain with Lotus anyway.
Thus, for me the question is not whether Borland should prevail but on what basis.
Various avenues might be traveled, but the main choices are between holding that the menu
is not protectable by copyright and devising a new doctrine that Borland’s use is privileged.
No solution is perfect and no intermediate appellate court can make the final choice.
To call the menu a “method of operation” is, in the common use of those words, a
defensible position. After all, the purpose of the menu is not to be admired as a work of
literary or pictorial art. It is to transmit directions from the user to the computer, i.e., to
operate the computer. The menu is also a “method” in the dictionary sense because it is
a “planned way of doing something,” an “order or system,” and (aptly here) an “orderly
or systematic arrangement, sequence or the like.” Random House Webster’s College Dictionary 853 (1991).
A different approach would be to say that Borland’s use is privileged because, in
the context already described, it is not seeking to appropriate the advances made by Lotus’
menu; rather, having provided an arguably more attractive menu of its own, Borland is
merely trying to give former Lotus users an option to exploit their own prior investment
in learning or in macros. The difference is that such a privileged use approach would not
automatically protect Borland if it had simply copied the Lotus menu (using different
codes), contributed nothing of its own, and resold Lotus under the Borland label.
The closest analogue in conventional copyright is the fair use doctrine. E.g.,
Harper & Row, Publishers, Inc. v. Nation Enters. (1985). Although invoked by Borland,
it has largely been brushed aside in this case because the Supreme Court has said that it
is “presumptively” unavailable where the use is a “commercial” one. [Harper & Row].
But see Campbell v. Acuff-Rose Music, Inc. (1994). In my view, this is something less
than a definitive answer; “presumptively” does not mean “always” and, in any event, the
doctrine of fair use was created by the courts and can be adapted to new purposes.
But a privileged use doctrine would certainly involve problems of its own. It might
more closely tailor the limits on copyright protection to the reasons for limiting that
protection; but it would entail a host of administrative problems that would cause cost

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and delay, and would also reduce the ability of the industry to predict outcomes. Indeed,
to the extent that Lotus’ menu is an important standard in the industry, it might be argued
that any use ought to be deemed privileged.
In sum, the majority’s result persuades me and its formulation is as good, if not
better, than any other that occurs to me now as within the reach of courts. Some solutions
(e.g., a very short copyright period for menus) are not options at all for courts but might
be for Congress. In all events, the choices are important ones of policy, not linguistics,
and they should be made with the underlying considerations in view.

Lotus Development Corp. v. Borland Intern’l, Inc.

516 U.S. 233 (1996)

On writ of certiorari from the United States Court of Appeals for the First Circuit.
PER CURIAM.
The judgment of the United States Court of Appeals for the First Circuit is affirmed
by an equally divided Court.
(Justice STEVENS took no part in the consideration or decision of this case.)
Note
Lotus is included in the book not merely because it was a pathbreaking case on
copyrightable subject matter, affirmed by an equally divided Supreme Court, but because
of three additional factors.
• First, Lotus is a nice example of the courts taking a series of doctrines developed in other contexts and applying them to a new technology.
• Second, the majority and concurrence demonstrate two different judicial
methodologies for that process of technological and statutory “translation.” The
majority looks at the existing limitations within the statutory structure, rejects a
straightforward application of Baker v. Selden (do you agree?) and fits the menu
prompts and command hierarchy into the language of “methods of operation”—
explicitly declared to be non-copyrightable under § 102. Judge Boudin concurs
but says “[t]he importance of this case, and a slightly different emphasis in my
view of the underlying problem, prompt me to add a few words to the majority’s
tightly focused discussion.” (What does “tightly focused” mean here in judicial
language?) He rejects the idea that copyright doctrine should be applied literally
to the new technology. “Of course, one could still read the statute as a congressional command that the familiar doctrines of copyright law be taken and applied
to computer programs, in cookie cutter fashion, as if the programs were novels
or play scripts. Some of the cases involving computer programs embody this
approach. It seems to be mistaken on two different grounds: the tradition of copyright law, and the likely intent of Congress.” He concludes “the choices are important ones of policy, not linguistics, and they should be made with the
underlying considerations in view.” This question of judicial method—how
should judges apply intellectual property law?—is a central theme of the course.
• Finally, Lotus is an excellent introduction to the particular features of “network
goods” or network effects, and the implication these have for intellectual

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property. If you read Fifty Shades of Grey it does not affect my decision on
whether to read Thomas Pynchon or Neil Stephenson. But if you (and everyone
else) uses Microsoft Word, I may need to use that program even if I believe
Open Office to be better.

Questions:
1.) Compare Boudin’s approach with the majority’s. Which is more appropriate? More
faithful to the judicial role? In your answer which of the following factors are relevant:
• A belief that Congress’s copyright and patent powers contain an explicit
purposive and utilitarian goal—promoting the progress?
• A belief that utilitarian reasoning in judicial decisions is inherently suspect—
that belief being derived either from the separation of powers or the nature of
the judicial role or both?
• The Jeffersonian tradition described in the earlier excerpt from The Public
Domain?
• Absence of specific guidance from Congress about how courts should integrate
new technologies into copyright and patent?
• The idea that a judge’s role is merely that of an umpire who “calls strikes”?
• A belief that literal rather than purposive interpretation is somehow less political?
• A belief that both literal and purposive interpretation are laden with value
judgments?
2.) Would your answers be different if the field of law was antitrust? Why? Why not?
3.) At the very beginning of his concurrence, Boudin makes a vitally important point
about “error costs” in the context of protecting goods such as software, comparing that
to the error costs of protecting more traditional copyrightable subject matter. What is it?
4.) How does the following quotation resonate with the arguments used by Pitney,
Holmes or Brandeis in INS v. AP? With Jefferson? With Diderot or Condorcet? With the
quote from Felix Cohen that begins Chapter 4 on trademark? Why does Boudin say this
argument is circular?
Now, any use of the Lotus menu by Borland is a commercial use and
deprives Lotus of a portion of its “reward,” in the sense that an
infringement claim if allowed would increase Lotus’ profits. But this is
circular reasoning: broadly speaking, every limitation on copyright or
privileged use diminishes the reward of the original creator. Yet not every
writing is copyrightable or every use an infringement. The provision of
reward is one concern of copyright law, but it is not the only one. If it
were, copyrights would be perpetual and there would be no exceptions.

Note: The Oracle v. Google Case
For 25 years, the decision in Lotus v. Borland was assumed to lay out the law of
copyrightable subject matter as applied to computer software methods of operation—
menu hierarchies, interfaces and so on. That premise was challenged in Oracle v. Google,
a closely watched case that culminated in a Supreme Court decision in 2021.

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Oracle concerned the copyrightability of “APIs”—Application Programming
Interfaces. The last word there is the key. The API governs the way one program works
with another. Without knowledge of the API, or the ability to reverse engineer it, the
“interoperability” of programs will be limited. (Imagine trying to play a piano without
knowing which key corresponded to which note.)
When writing the Android operating system, Google copied the declaring code and
structure, sequence, and organization (“SSO”)9 of 37 API packages from Oracle’s Java
software, in order to enable Java developers to write applications for Android. (The
relevant technology is described in more detail in Chapter 13.) In 2012, the Northern
District of California held that the declaring code and SSO were not subject to copyright
protection: the declaring code was uncopyrightable because idea and expression had
merged, and the SSO, like the menu command hierarchy in Lotus, was a “method of
operation” under § 102(b). The district court’s decision was animated in part by concerns
about the consequences that Oracle’s copyright claim might have on interoperability:
“To accept Oracle’s claim would be to allow anyone to copyright one version of code to
carry out a system of commands and thereby bar all others from writing their own
different versions to carry out all or part of the same commands. No holding has ever
endorsed such a sweeping proposition.”
In 2014, the Federal Circuit reversed. (The case was in the Federal Circuit because
of earlier patent claims; for the copyright claims, the court declared itself to be bound by
Ninth Circuit law.) For the Federal Circuit, the presence of expressive choices in the APIs
precluded them from being uncopyrightable methods of operation. Otherwise, all computer programs (which are methods of operating computers) could become uncopyrightable as a result. Compare the court’s reasoning to the Lotus opinion you have just read.
The problem with the district court’s approach is that computer programs are by definition functional—they are all designed to accomplish
some task. . . . If we were to accept the district court’s suggestion that a
computer program is uncopyrightable simply because it “carr[ies] out
pre-assigned functions,” no computer program is protectable. That result
contradicts Congress’s express intent to provide copyright protection to
computer programs, as well as binding Ninth Circuit case law finding
computer programs copyrightable, despite their utilitarian or functional
purpose. Though the trial court did add the caveat that it “does not hold
that the structure, sequence and organization of all computer programs
may be stolen,” it is hard to see how its method of operation analysis
could lead to any other conclusion. [W]e conclude that a set of
commands to instruct a computer to carry out desired operations may
contain expression that is eligible for copyright protection. We agree
with Oracle that, under Ninth Circuit law, an original work—even one
that serves a function—is entitled to copyright protection as long as the
author had multiple ways to express the underlying idea.
“Structure, sequence and organization” is a term introduced in Whelan Associates v. Jaslow Dental
Laboratory (3d Cir. 1986) for the purpose of separating the copyrightable and uncopyrightable portions of
software. That decision was widely criticized by scholars for extending copyright to merely functional components of the program—in that case, the task of managing a dentist’s office. The term had largely fallen out
of use in the Ninth Circuit since the late 1980’s but it was used by both the District Court (which believed it
to be uncopyrightable) and the Federal Circuit (which believed it was copyrightable). Regardless of the
terminology, the central question here is whether interfaces are uncopyrightable methods of operation, or
copyrightable expressive choices—the term used should not obscure that fact.
9

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After this decision, the case proceeded to trial where, in 2016, the jury found that
Google’s use of Oracle’s APIs was “fair use.” Then in 2018, the Federal Circuit
reversed—taking the unusual step of overturning a jury verdict on fair use. Finally in
2021 the Supreme Court decided the case, but not on subject matter grounds.
Given the rapidly changing technological, economic, and businessrelated circumstances, we believe we should not answer more than is
necessary to resolve the parties’ dispute. We shall assume, but purely for
argument’s sake, that the entire Sun Java API falls within the definition
of that which can be copyrighted. We shall ask instead whether Google’s
use of part of that API was a “fair use.” Unlike the Federal Circuit, we
conclude that it was.
You will read that decision in Chapter 13. Strikingly, the majority opinion, written by
Justice Breyer, returns again and again to the arguments made in Lotus and in particular
to the concerns raised by Judge Boudin in his concurrence. Yet it enunciates those
concerns through the lens of fair use, not the “in or out” bright line question of
copyrightable subject matter.
Notice how all of these decisions have to navigate not one, but two slippery slopes in
dealing with software’s mixture of expressive and functional aspects. Make the decision too
broad one way and no software is protected by copyright. Make it too broad the other way
and copyright monopolies of enormous length are added to a technology rich in network
effects and lock-in. What is the best policy argument in favor of the Lotus approach? The
Federal Circuit’s approach? Which is more consistent with the language of § 102(b) of the
Copyright Act? “In no case does copyright protection for an original work of authorship
extend to any . . . method of operation, regardless of the form in which it is . . . embodied”?
This leaves us with an unresolved question. Is Lotus still good law? The authors
believe it is the correct decision, both textually and on policy grounds. As you will see
in Chapter 13, its logic was enthusiastically embraced in the Supreme Court’s decision,
even if the legal ground was different—fair use not subject matter. Or, in assuming for
the sake of argument that APIs can be copyrightable, is the Court implicitly endorsing
the Federal Circuit’s view? Will Oracle make it easier to raise copyright suits over
software, because the issue can rarely be resolved at the summary judgment level? Or is
the Supreme Court, in signaling emphatic approval of Judge Boudin’s logic, actually
directing the lower courts to focus intently on interoperability and network effects,
regardless of the legal pigeon-hole in which they are raised?

PROBLEM 11-3
Lotus v. Borland uses copyright’s subject matter limitations—in this case, over “methods
of operation”—to exclude menu commands and interfaces from copyrightable subject
matter. Judge Boudin’s concurrence muses on the desirability of a more dynamic and
flexible privilege-based approach—a kind of super fair use—focusing on a pragmatic
inquiry into whether the particular case featured the negative consequences of network
effects or lock in. In the end though, he joins the majority’s “tightly focused” decision
on methods of operation. When the Federal Circuit decided Oracle v. Google, it rejected
Lotus, finding that Application Programming Interfaces—which as their name suggests,
seem to be methods of operation—were copyrightable subject matter under § 102. To

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hold otherwise, the CAFC declared, would be to cast into doubt the copyrightability of
all computer programs which, at base, are obviously methods of operating a computer.
When SCOTUS decided the Oracle case it declined to reach the question of whether
APIs were copyrightable subject matter, instead deciding the case on fair use grounds.
It overturned the CAFC’s decision on that front and found fair use on Google’s part. You
will read that opinion in Chapter 13. You thus have three approaches: 1.) Interfaces and
APIs are methods of operation and thus not copyrightable subject matter under § 102.
(Lotus). 2.) Interfaces and APIs can be copyrightable subject matter. (The CAFC
approach in Oracle.) 3.) We will not decide on subject matter grounds but will rule in
particular cases on whether the use of the particular code or interface is fair use.
(SCOTUS Oracle.) Which is the best approach? Why?

6.) Fixation (Copyright Meets Software, continued)
We saw in the Moghadam and Martignon cases featured in Chapter 2 that fixation
was not merely a statutory requirement but a constitutional one where copyright was
concerned. At the same time, we were left uncertain about whether that constitutional requirement could easily be circumvented using Congress’ commerce clause power. In the
case that follows, we consider a very different fixation-related question, the attempt to
define the statutory meaning of fixation. More specifically, the Ninth Circuit has to define
“fixation” in the context of computer memory, and in particular the volatile “Random
Access Memory” that holds a temporary copy of the program being executed. Should the
constitutional and statutory inquiries into fixation have anything to do with each other? Do
they? (It should be noted that while this chapter discusses subject matter requirements for
copyright, MAI deals with fixation in terms of finding copyright infringement. We include
the case here because of its importance to our discussion of software and because, in each
instance, we are defining the limits and extent of the copyright monopoly.)

MAI Systems Corp. v. Peak Computer, Inc.

991 F.2d 511 (9th Cir. 1993)

BRUNETTI, Circuit Judge.
Peak Computer, Inc. and two of its employees appeal the district court’s order
issuing a preliminary injunction pending trial as well as the district court’s order issuing
a permanent injunction following the grant of partial summary judgment.
I. FACTS
MAI Systems Corp., until recently, manufactured computers and designed
software to run those computers. The company continues to service its computers and
the software necessary to operate the computers. MAI software includes operating
system software, which is necessary to run any other program on the computer.
Peak Computer, Inc. is a company organized in 1990 that maintains computer systems
for its clients. Peak maintains MAI computers for more than one hundred clients in Southern
California. This accounts for between fifty and seventy percent of Peak’s business.
Peak’s service of MAI computers includes routine maintenance and emergency

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353

repairs. Malfunctions often are related to the failure of circuit boards inside the
computers, and it may be necessary for a Peak technician to operate the computer and its
operating system software in order to service the machine.
In August, 1991, Eric Francis left his job as customer service manager at MAI and
joined Peak. Three other MAI employees joined Peak a short time later. Some businesses
that had been using MAI to service their computers switched to Peak after learning of
Francis’s move.
II. PROCEDURAL HISTORY
. . . The district court granted partial summary judgment for MAI and entered a
permanent injunction on the issues of copyright infringement and misappropriation of
trade secrets on February 2, 1993 which provides:
A. Defendants [and certain others] are hereby permanently enjoined as follows:
1. Peak [and certain others] are permanently enjoined from copying, disseminating, selling, publishing, distributing, loaning, or otherwise infringing MAI’s
copyrighted works, or any derivatives thereof, including those works for which
registrations have issued, and works for which registrations may issue in the
future. The “copying” enjoined herein specifically includes the acts of loading,
or causing to be loaded, directly or indirectly, any MAI software from any
magnetic storage or read only memory device into the electronic random access
memory of the central processing unit of a computer system. As used herein,
“computer system” means an MAI central processing unit in combination with
either a video display, printer, disk drives, and/or keyboard.
2. (a) Peak and Francis [and certain others] are permanently enjoined from
misappropriating, using in any manner in their business, including advertising
connected therewith, and/or disclosing to others MAI’s trade secrets. . . .
(b) In particular, the persons identified in subparagraph (a) herein are permanently enjoined from soliciting any MAI computer maintenance customer and
from maintaining any contract with any former MAI computer maintenance
customer where knowledge of any such customers was obtained by Francis
during his employment with MAI. . . .
IV. COPYRIGHT INFRINGEMENT
The district court granted summary judgment in favor of MAI on its claims of
copyright infringement and issued a permanent injunction against Peak on these claims.
The alleged copyright violations include: (1) Peak’s running of MAI software licenced
to Peak customers; (2) Peak’s use of unlicensed software at its headquarters; and, (3)
Peak’s loaning of MAI computers and software to its customers. Each of these alleged
violations must be considered separately.
A. Peak’s running of MAI software licensed to Peak customers
To prevail on a claim of copyright infringement, a plaintiff must prove ownership
of a copyright and a “‘copying’ of protectable expression” beyond the scope of a license.
S.O.S., Inc. v. Payday, Inc. (9th Cir. 1989).
MAI software licenses allow MAI customers to use the software for their own

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internal information processing.3 This allowed use necessarily includes the loading of the
software into the computer’s random access memory (“RAM”) by a MAI customer.
However, MAI software licenses do not allow for the use or copying of MAI software
by third parties such as Peak. Therefore, any “copying” done by Peak is “beyond the
scope” of the license.
It is not disputed that MAI owns the copyright to the software at issue here,
however, Peak vigorously disputes the district court’s conclusion that a “copying”
occurred under the Copyright Act.
The Copyright Act defines “copies” as:
material objects, other than phonorecords, in which a work is fixed by
any method now known or later developed, and from which the work can
be perceived, reproduced, or otherwise communicated, either directly or
with the aid of a machine or device.
17 U.S.C. § 101.
The Copyright Act then explains:
A work is “fixed” in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is
sufficiently permanent or stable to permit it to be perceived, reproduced,
or otherwise communicated for a period of more than transitory duration.
17 U.S.C. § 101.
The district court’s grant of summary judgment on MAI’s claims of copyright
infringement reflects its conclusion that a “copying” for purposes of copyright law occurs
when a computer program is transferred from a permanent storage device to a computer’s
RAM. This conclusion is consistent with its finding, in granting the preliminary
injunction, that: “the loading of copyrighted computer software from a storage medium
(hard disk, floppy disk, or read only memory) into the memory of a central processing
unit (“CPU”) causes a copy to be made. In the absence of ownership of the copyright or
express permission by license, such acts constitute copyright infringement.” We find that
this conclusion is supported by the record and by the law.
Peak concedes that in maintaining its customer’s computers, it uses MAI operating
software “to the extent that the repair and maintenance process necessarily involves
3

A representative MAI software license provides in part:
4. Software License.
(a) License. . . . Customer may use the Software (one version with maximum of two copies permitted—
a working and a backup copy) . . . solely to fulfill Customer’s own internal information processing needs
on the particular items of Equipment . . . for which the Software is configured and furnished by
[MAI]. . . . The term “Software” includes, without limitation, all basic operating system software. . . .
(b) Customer Prohibited Acts. . . . Any possession or use of the Software . . . not expressly authorized
under this License or any act which might jeopardize [MAI]’s rights or interests in the Software . . . is
prohibited, including without limitation, examination, disclosure, copying, modification, reconfiguration, augmentation, adaptation, emulation, visual display or reduction to visually perceptible form
or tampering. . . .
(c) Customer Obligations. Customer acknowledges that the Software is [MAI]’s valuable and
exclusive property, trade secret and copyrighted material. Accordingly, Customer shall . . . (i) use the
Software . . . strictly as prescribed under this License, (ii) keep the Software . . . confidential and not
make [it] available to others. . . .
A representative diagnostic license agreement provides in part:
6. Access/Non-Disclosure.
Licensee shall not give access nor shall it disclose the Diagnostics (in any form) . . . to any person . . .
without the written permission of [MAI]. Licensee may authorize not more than three (3) of its bona fide
employees to utilize the Diagnostics . . . if, and only if, they agree to be bound by the terms hereof.

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turning on the computer to make sure it is functional and thereby running the operating
system.” It is also uncontroverted that when the computer is turned on the operating
system is loaded into the computer’s RAM. As part of diagnosing a computer problem at
the customer site, the Peak technician runs the computer’s operating system software,
allowing the technician to view the systems error log, which is part of the operating
system, thereby enabling the technician to diagnose the problem.4
Peak argues that this loading of copyrighted software does not constitute a copyright
violation because the “copy” created in RAM is not “fixed.” However, by showing that Peak
loads the software into the RAM and is then able to view the system error log and diagnose
the problem with the computer, MAI has adequately shown that the representation created
in the RAM is “sufficiently permanent or stable to permit it to be perceived, reproduced, or
otherwise communicated for a period of more than transitory duration.”
After reviewing the record, we find no specific facts (and Peak points to none)
which indicate that the copy created in the RAM is not fixed. While Peak argues this
issue in its pleadings, mere argument does not establish a genuine issue of material fact
to defeat summary judgment. A party opposing a properly supported motion for summary
judgment may not rest upon the mere allegations or denials in pleadings, but “must set
forth specific facts showing that there is a genuine issue for trial.” Fed.R.Civ.Proc. 56(e);
Anderson v. Liberty Lobby, Inc. (1986); Harper v. Wallingford (9th Cir. 1989).
The law also supports the conclusion that Peak’s loading of copyrighted software into
RAM creates a “copy” of that software in violation of the Copyright Act. In Apple Computer,
Inc. v. Formula Int’l, Inc. (C.D. Cal. 1984), the district court held that the copying of copyrighted software onto silicon chips and subsequent sale of those chips is not protected by
§ 117 of the Copyright Act. Section 117 allows “the ‘owner’5 of a copy of a computer program to make or authorize the making of another copy” without infringing copyright law, if
it “is an essential step in the utilization of the computer program” or if the new copy is “for
archival purposes only.” 17 U.S.C. § 117 (Supp. 1988).6 One of the grounds for finding that
§ 117 did not apply was the court’s conclusion that the permanent copying of the software
onto the silicon chips was not an “essential step” in the utilization of the software because the
software could be used through RAM without making a permanent copy. The court stated:
RAM can be simply defined as a computer component in which data and
computer programs can be temporarily recorded. Thus, the purchaser of
[software] desiring to utilize all of the programs on the diskette could
arrange to copy [the software] into RAM. This would only be a temporary
fixation. It is a property of RAM that when the computer is turned off, the
MAI also alleges that Peak runs its diagnostic software in servicing MAI computers. Since Peak’s running
of the operating software constitutes copyright violation, it is not necessary for us to directly reach the issue
of whether Peak also runs MAI’s diagnostic software. However, we must note that Peak’s field service
manager, Charles Weiner, admits that MAI diagnostic software is built into the MAI MPx system and, further,
that if Peak loads the MAI diagnostic software from whatever source into the computer’s RAM, that such
loading will produce the same copyright violation as loading the operating software.
5
Since MAI licensed its software, the Peak customers do not qualify as “owners” of the software and are
not eligible for protection under § 117.
6
The current § 117 was enacted by Congress in 1980, as part of the Computer Software Copyright Act. This
Act adopted the recommendations contained in the Final Report of the National Commission on New
Technological Uses of Copyrighted Works (“CONTU”) (1978). The CONTU was established by Congress
in 1974 to perform research and make recommendations concerning copyright protection for computer
programs. The new § 117 reflects the CONTU’s conclusion that: “Because the placement of a work into a
computer is the preparation of a copy, the law should provide that persons in rightful possession of copies of
programs be able to use them freely without fear of exposure to copyright liability.” Final Report at 13.
4

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copy of the program recorded in RAM is lost.
Apple Computer at 622.
While we recognize that this language is not dispositive, it supports the view that
the copy made in RAM is “fixed” and qualifies as a copy under the Copyright Act.
We have found no case which specifically holds that the copying of software into
RAM creates a “copy” under the Copyright Act. However, it is generally accepted that the
loading of software into a computer constitutes the creation of a copy under the Copyright
Act. See e.g. Vault Corp. v. Quaid Software Ltd. (5th Cir. 1988) (“the act of loading a
program from a medium of storage into a computer’s memory creates a copy of the
program”); 2 NIMMER ON COPYRIGHT, § 8.08 at 8-105 (1983) (“Inputting a computer
program entails the preparation of a copy.”); Final Report of the National Commission on
the New Technological Uses of Copyrighted Works, at 13 (1978) (“the placement of a work
into a computer is the preparation of a copy”). We recognize that these authorities are
somewhat troubling since they do not specify that a copy is created regardless of whether
the software is loaded into the RAM, the hard disk or the read only memory (“ROM”).
However, since we find that the copy created in the RAM can be “perceived, reproduced,
or otherwise communicated,” we hold that the loading of software into the RAM creates a
copy under the Copyright Act. 17 U.S.C. § 101. We affirm the district court’s grant of
summary judgment as well as the permanent injunction as it relates to this issue. . . .
Questions:
1.) Should the question of whether a RAM copy of a computer program is sufficiently
“fixed” to constitute infringement depend on some linguistic analysis? A technical
analysis? One that considers the effect of the decision on the degree of control that the
owner of the software copyright could exercise in the aftermarket—for example, by
controlling maintenance and repair? What would Judge Boudin say about the approach
that the MAI court adopts?
2.) We have talked about implicit moral framing in intellectual property questions. What
facts does the court give early in its decision that suggested which way it was going to
rule? How would you describe the implicit narrative presented?
3.) You are the lawyer responsible for the appeal of this case. The judges are not
technically savvy. Your job is to come up with analogies to the world of copyright that
they are familiar with that either confirm or deny the court’s conclusion. In particular,
you should focus on their implicit definition of what it means to be fixed. (“To say that
this is fixed is like saying ___ is fixed. To say that this is not fixed is like saying ___ does
not count as fixation.”) You should also focus in your analogical quest on the
consequences of their ruling. (“This is like saying that ____ [traditional copyright holder]
can forbid ____. To say they cannot prohibit this activity would be like saying a ____
[traditional copyright holder] is unable to prevent someone from ____.”)
4.) How does this decision relate to the goals of the fixation requirement in the
Constitution?
5.) Read § 117 of the Copyright Act. This section was amended after the MAI decision
specifically to address the legality of computer repair. Does this solve the potential
problem created by MAI?

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6.) How much software do you own? Search the web for the licenses covering some
piece of software on your computer, such as iTunes, or Microsoft Word (assuming that
you did not carefully read those terms when you clicked “I accept”). What does the
license say? Why is MAI relevant to this question?

Religious Technology Center v. Netcom

907 F. Supp. 1361 (N.D. Cal. 1995)

WHYTE, District Judge.
This case concerns an issue of first impression regarding intellectual property
rights in cyberspace. Specifically, this order addresses whether the operator of a computer
bulletin board service (“BBS”), and the large Internet access provider that allows that
BBS to reach the Internet, should be liable for copyright infringement committed by a
subscriber of the BBS.
Plaintiffs Religious Technology Center (“RTC”) and Bridge Publications, Inc.
(“BPI”) hold copyrights in the unpublished and published works of L. Ron Hubbard, the
late founder of the Church of Scientology (“the Church”). Defendant Dennis Erlich
(“Erlich”)3 is a former minister of Scientology turned vocal critic of the Church, whose
pulpit is now the Usenet newsgroup4 alt.religion.scientology (“a.r.s.”), an on-line forum
for discussion and criticism of Scientology. Plaintiffs maintain that Erlich infringed their
copyrights when he posted portions of their works on a.r.s. Erlich gained his access to the
Internet through defendant Thomas Klemesrud’s (“Klemesrud’s”) BBS “support.com.”
Klemesrud is the operator of the BBS, which is run out of his home and has approximately
500 paying users. Klemesrud’s BBS is not directly linked to the Internet, but gains its
connection through the facilities of defendant Netcom On-Line Communications, Inc.
(“Netcom”), one of the largest providers of Internet access in the United States.
After failing to convince Erlich to stop his postings, plaintiffs contacted defendants
Klemesrud and Netcom. Klemesrud responded to plaintiffs’ demands that Erlich be kept
off his system by asking plaintiffs to prove that they owned the copyrights to the works
posted by Erlich. However, plaintiffs refused Klemesrud’s request as unreasonable.
Netcom similarly refused plaintiffs’ request that Erlich not be allowed to gain access to the
Internet through its system. Netcom contended that it would be impossible to prescreen
Erlich’s postings and that to kick Erlich off the Internet meant kicking off the hundreds of
3
Issues of Erlich’s liability were addressed in this court’s order of September 22, 1995. That order concludes
in part that a preliminary injunction against Erlich is warranted because plaintiffs have shown a likelihood
of success on their copyright infringement claims against him. Plaintiffs likely own valid copyrights in
Hubbard’s published and unpublished works and Erlich’s near-verbatim copying of substantial portions of
plaintiffs’ works was not likely a fair use.
4
The Usenet has been described as a worldwide community of electronic BBSs that is closely associated
with the Internet and with the Internet community. The messages in Usenet are organized into thousands of
topical groups, or “Newsgroups”. . . . As a Usenet user, you read and contribute (“post”) to your local Usenet
site. Each Usenet site distributes its users’ postings to other Usenet sites based on various implicit and explicit
configuration settings, and in turn receives postings from other sites. Usenet traffic typically consists of as
much as 30 to 50 Mbytes of messages per day. Usenet is read and contributed to on a daily basis by a total
population of millions of people. . . . There is no specific network that is the Usenet. Usenet traffic flows
over a wide range of networks, including the Internet and dial-up phone links.

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users of Klemesrud’s BBS. Consequently, plaintiffs named Klemesrud and Netcom in their
suit against Erlich, although only on the copyright infringement claims. . . . For the reasons
set forth below, the court grants in part and denies in part Netcom’s motion for summary
judgment and Klemesrud’s motion for judgment on the pleadings and denies plaintiffs’
motion for a preliminary injunction. . . .
B. Copyright Infringement
To establish a claim of copyright infringement, a plaintiff must demonstrate (1)
ownership of a valid copyright and (2) “copying”7 of protectable expression by the defendant. Infringement occurs when a defendant violates one of the exclusive rights of the
copyright holder. 17 U.S.C. § 501(a). These rights include the right to reproduce the copyrighted work, the right to prepare derivative works, the right to distribute copies to the
public, and the right to publicly display the work. 17 U.S.C. §§ 106(1)–(3) & (5). The court
has already determined that plaintiffs have established that they own the copyrights to all of
the Exhibit A and B works, except item 4 of Exhibit A. The court also found plaintiffs likely
to succeed on their claim that defendant Erlich copied the Exhibit A and B works and was
not entitled to a fair use defense. Plaintiffs argue that, although Netcom was not itself the
source of any of the infringing materials on its system, it nonetheless should be liable for
infringement, either directly, contributorily, or vicariously. Netcom disputes these theories
of infringement and further argues that it is entitled to its own fair use defense.
1. Direct Infringement
Infringement consists of the unauthorized exercise of one of the exclusive rights
of the copyright holder delineated in section 106. 17 U.S.C. § 501. Direct infringement
does not require intent or any particular state of mind,10 although willfulness is relevant
to the award of statutory damages. 17 U.S.C. § 504(c).
Many of the facts pertaining to this motion are undisputed. The court will address
the relevant facts to determine whether a theory of direct infringement can be supported
based on Netcom’s alleged reproduction of plaintiffs’ works. . . . The court will
additionally examine whether Netcom is liable for infringing plaintiffs’ exclusive rights
to publicly distribute and display their works.
a. Undisputed Facts
The parties do not dispute the basic processes that occur when Erlich posts his
allegedly infringing messages to a.r.s. Erlich connects to Klemesrud’s BBS using a telephone
and a modem. Erlich then transmits his messages to Klemesrud’s computer, where they are
automatically briefly stored. According to a prearranged pattern established by Netcom’s
software, Erlich’s initial act of posting a message to the Usenet results in the automatic
copying of Erlich’s message from Klemesrud’s computer onto Netcom’s computer and onto
In this context, “copying” is “shorthand for the infringing of any of the copyright owner’s five exclusive
rights.” S.O.S., Inc. v. Payday, Inc. (9th Cir. 1989).
10
The strict liability for copyright infringement is in contrast to another area of liability affecting online
service providers: defamation. Recent decisions have held that where a BBS exercised little control over the
content of the material on its service, it was more like a “distributor” than a “republisher” and was thus only
liable for defamation on its system where it knew or should have known of the defamatory statements. Cubby,
Inc. v. CompuServe, Inc. (S.D.N.Y. 1991). By contrast, a New York state court judge found that Prodigy was
a publisher because it held itself out to be controlling the content of its services and because it used software
to automatically prescreen messages that were offensive or in bad taste. Stratton Oakmont, Inc. v. Prodigy
Services Co. [The latter case was one prompt for § 230 of the CDA. Eds.]
7

Fixation (Copyright Meets Software, continued)

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other computers on the Usenet. In order to ease transmission and for the convenience of
Usenet users, Usenet servers maintain postings from newsgroups for a short period of time—
eleven days for Netcom’s system and three days for Klemesrud’s system. Once on Netcom’s
computers, messages are available to Netcom’s customers and Usenet neighbors, who may
then download the messages to their own computers. Netcom’s local server makes available
its postings to a group of Usenet servers, which do the same for other servers until all Usenet
sites worldwide have obtained access to the postings, which takes a matter of hours.
Unlike some other large on-line service providers, such as CompuServe, America
Online, and Prodigy, Netcom does not create or control the content of the information
available to its subscribers. It also does not monitor messages as they are posted. It has,
however, suspended the accounts of subscribers who violated its terms and conditions,
such as where they had commercial software in their posted files. Netcom admits that,
although not currently configured to do this, it may be possible to reprogram its system
to screen postings containing particular words or coming from particular individuals.
Netcom, however, took no action after it was told by plaintiffs that Erlich had posted
messages through Netcom’s system that violated plaintiffs’ copyrights, instead claiming
that it could not shut out Erlich without shutting out all of the users of Klemesrud’s BBS.
b. Creation of Fixed Copies
The Ninth Circuit addressed the question of what constitutes infringement in the
context of storage of digital information in a computer’s random access memory
(“RAM”). MAI Systems Corp. v. Peak Computer, Inc. (9th Cir. 1993). In MAI, the Ninth
Circuit upheld a finding of copyright infringement where a repair person, who was not
authorized to use the computer owner’s licensed operating system software, turned on the
computer, thus loading the operating system into RAM for long enough to check an “error
log.” 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.” 17 U.S.C. § 102 (emphasis added). A work is “fixed” when its “embodiment in
a copy . . . is sufficiently permanent or stable to permit it to be perceived, reproduced, or
otherwise communicated for a period of more than transitory duration.” [17 U.S.C.] § 101.
MAI established that the loading of data from a storage device into RAM constitutes
copying because that data stays in RAM long enough for it to be perceived.
In the present case, there is no question after MAI that “copies” were created, as
Erlich’s act of sending a message to a.r.s. caused reproductions of portions of plaintiffs’
works on both Klemesrud’s and Netcom’s storage devices. Even though the messages
remained on their systems for at most eleven days, they were sufficiently “fixed” to
constitute recognizable copies under the Copyright Act.
c. Is Netcom Directly Liable for Making the Copies?
Accepting that copies were made, Netcom argues that Erlich, and not Netcom, is
directly liable for the copying. MAI did not address the question raised in this case:
whether possessors of computers are liable for incidental copies automatically made on
their computers using their software as part of a process initiated by a third party. Netcom
correctly distinguishes MAI on the ground that Netcom did not take any affirmative
action that directly resulted in copying plaintiffs’ works other than by installing and
maintaining a system whereby software automatically forwards messages received from
subscribers onto the Usenet, and temporarily stores copies on its system. Netcom’s
actions, to the extent that they created a copy of plaintiffs’ works, were necessary to
having a working system for transmitting Usenet postings to and from the Internet.

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Unlike the defendants in MAI, neither Netcom nor Klemesrud initiated the copying. The
defendants in MAI turned on their customers’ computers thereby creating temporary
copies of the operating system, whereas Netcom’s and Klemesrud’s systems can operate
without any human intervention. Thus, unlike MAI, the mere fact that Netcom’s system
incidentally makes temporary copies of plaintiffs’ works does not mean Netcom has
caused the copying.11 The court believes that Netcom’s act of designing or implementing
a system that automatically and uniformly creates temporary copies of all data sent
through it is not unlike that of the owner of a copying machine who lets the public make
copies with it.12 Although some of the people using the machine may directly infringe
copyrights, courts analyze the machine owner’s liability under the rubric of contributory
infringement, not direct infringement. Elkin-Koren [argued that] “contributory infringement is more appropriate for dealing with BBS liability, first, because it focuses
attention on the BBS-users relationship and the way imposing liability on BBS operators
may shape this relationship, and second because it better addresses the complexity of the
relationship between BBS operators and subscribers”). Plaintiffs’ theory would create
many separate acts of infringement and, carried to its natural extreme, would lead to
unreasonable liability.
It is not difficult to conclude that Erlich infringes by copying a protected work onto
his computer and by posting a message to a newsgroup. However, plaintiffs’ theory further
implicates a Usenet server that carries Erlich’s message to other servers regardless of
whether that server acts without any human intervention beyond the initial setting up of
the system. It would also result in liability for every single Usenet server in the worldwide
11
One commentator addressed the difficulty in translating copyright concepts, including the public/private
dichotomy, to the digitized environment. See Niva Elkin-Koren, Copyright Law and Social Dialogue on the
Information Superhighway: The Case Against Copyright Liability of Bulletin Board Operators, 13 CARDOZO
ARTS & ENT. L.J. 345, 390 (1995). This commentator noted that one way to characterize a BBS operation is
that it “provides subscribers with access and services. As such, BBS operators do not create copies, and do not
transfer them in any way. Users post the copies on the BBS, which other users can then read or download.”
12
Netcom compares itself to a common carrier that merely acts as a passive conduit for information. In a sense,
a Usenet server that forwards all messages acts like a common carrier, passively retransmitting every message
that gets sent through it. Netcom would seem no more liable than the phone company for carrying an infringing
facsimile transmission or storing an infringing audio recording on its voice mail. As Netcom’s counsel argued,
holding such a server liable would be like holding the owner of the highway, or at least the operator of a toll
booth, liable for the criminal activities that occur on its roads. Since other similar carriers of information are not
liable for infringement, there is some basis for exempting Internet access providers from liability for infringement
by their users. The IITF Report concluded that “[i]f an entity provided only the wires and conduits—such as the
telephone company, it would have a good argument for an exemption if it was truly in the same position as a
common carrier and could not control who or what was on its system.” IITF Report at 122. Here, perhaps, the
analogy is not completely appropriate as Netcom does more than just “provide the wire and conduits.” Further,
Internet providers are not natural monopolies that are bound to carry all the traffic that one wishes to pass through
them, as with the usual common carrier. Section 111 of the Copyright Act codifies the exemption for passive
carriers who are otherwise liable for a secondary transmission. However, the carrier must not have any direct or
indirect control over the content or selection of the primary transmission In any event, common carriers are
granted statutory exemptions for liability that might otherwise exist. Here, Netcom does not fall under this
statutory exemption, and thus faces the usual strict liability scheme that exists for copyright. Whether a new
exemption should be carved out for online service providers is to be resolved by Congress, not the courts.
Compare Comment, “Online Service Providers and Copyright Law: The Need for Change,” 1 SYRACUSE J.LEGIS.
& POL’Y 197, 202 (1995) (citing recommendations of online service providers for amending the Copyright Act
to create liability only where a “provider has ‘actual knowledge that a work that is being or has been transmitted
onto, or stored on, its system is infringing,’ and has the ‘ability and authority’ to stop the transmission, and has,
after a reasonable amount of time, allowed the infringing activity to continue”) with IITF Report at 122
(recommending that Congress not exempt service providers from strict liability for direct infringements).

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link of computers transmitting Erlich’s message to every other computer. These parties,
who are liable under plaintiffs’ theory, do no more than operate or implement a system
that is essential if Usenet messages are to be widely distributed. There is no need to
construe the Act to make all of these parties infringers. Although copyright is a strict
liability statute, there should still be some element of volition or causation which is lacking
where a defendant’s system is merely used to create a copy by a third party.
Plaintiffs point out that the infringing copies resided for eleven days on Netcom’s
computer and were sent out from it onto the “Information Superhighway.” However, under
plaintiffs’ theory, any storage of a copy that occurs in the process of sending a message to
the Usenet is an infringement. While it is possible that less “damage” would have been done
if Netcom had heeded plaintiffs’ warnings and acted to prevent Erlich’s message from being
forwarded,13 this is not relevant to its direct liability for copying. The same argument is true
of Klemesrud and any Usenet server. Whether a defendant makes a direct copy that constitutes infringement cannot depend on whether it received a warning to delete the message.
This distinction may be relevant to contributory infringement, however, where knowledge
is an element. [Contributory infringement will be dealt with in later chapters, Eds.]
The court will now consider two district court opinions that have addressed the
liability of BBS operators for infringing files uploaded by subscribers. . . .
. . . g. Conclusion
The court is not persuaded by plaintiffs’ argument that Netcom is directly liable for
the copies that are made and stored on its computer. Where the infringing subscriber is
clearly directly liable for the same act, it does not make sense to adopt a rule that could lead
to the liability of countless parties whose role in the infringement is nothing more than
setting up and operating a system that is necessary for the functioning of the Internet. Such
a result is unnecessary as there is already a party directly liable for causing the copies to be
made. Plaintiffs occasionally claim that they only seek to hold liable a party that refuses to
delete infringing files after they have been warned. However, such liability cannot be based
on a theory of direct infringement, where knowledge is irrelevant. The court does not find
workable a theory of infringement that would hold the entire Internet liable for activities
that cannot reasonably be deterred. Billions of bits of data flow through the Internet and are
necessarily stored on servers throughout the network and it is thus practically impossible to
screen out infringing bits from noninfringing bits. Because the court cannot see any
meaningful distinction (without regard to knowledge) between what Netcom did and what
every other Usenet server does, the court finds that Netcom cannot be held liable for direct
infringement. Cf. IITF Report at 69 (noting uncertainty regarding whether BBS operator
should be directly liable for reproduction or distribution of files uploaded by a subscriber).19

13
The court notes, however, that stopping the distribution of information once it is on the Internet is not easy.
The decentralized network was designed so that if one link in the chain be closed off, the information will
be dynamically rerouted through another link. This was meant to allow the system to be used for
communication after a catastrophic event that shuts down part of it.
19
Despite that uncertainty, the IITF Report recommends a strict liability paradigm for BBS operators. See IITF
Report at 122–24. It recommends that Congress not exempt on-line service providers from strict liability
because this would prematurely deprive the system of an incentive to get providers to reduce the damage to
copyright holders by reducing the chances that users will infringe by educating them, requiring indemnification,
purchasing insurance, and, where efficient, developing technological solutions to screening out infringement.
Denying strict liability in many cases would leave copyright owners without an adequate remedy since direct
infringers may act anonymously or pseudonymously or may not have the resources to pay a judgment.

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2. Contributory Infringement
Netcom is not free from liability just because it did not directly infringe plaintiffs’
works; it may still be liable as a contributory infringer. . . . [Issues of contributory and
vicarious infringement will be taken up in later chapters, however this case will be an
important reference. Eds.]
4. First Amendment Argument
Netcom argues that plaintiffs’ theory of liability contravenes the First Amendment,
as it would chill the use of the Internet because every access provider or user would be
subject to liability when a user posts an infringing work to a Usenet newsgroup. While
the court agrees that an overbroad injunction might implicate the First Amendment,
imposing liability for infringement where it is otherwise appropriate does not necessarily
raise a First Amendment issue. The copyright concepts of the idea/expression dichotomy
and the fair use defense balance the important First Amendment rights with the constitutional authority for “promot[ing] the progress of science and useful arts,” U.S. Const.
art. I, § 8, cl. 8. Netcom argues that liability here would force Usenet servers to perform
the impossible—screening all the information that comes through their systems.
However, the court is not convinced that Usenet servers are directly liable for causing a
copy to be made, and absent evidence of knowledge and participation or control and
direct profit, they will not be contributorily or vicariously liable. If Usenet servers were
responsible for screening all messages coming through their systems, this could have a
serious chilling effect on what some say may turn out to be the best public forum for free
speech yet devised. Finally, Netcom admits that its First Amendment argument is merely
a consideration in the fair use argument, which the court will now address. . . .
C. Conclusion
The court finds that plaintiffs have raised a genuine issue of fact regarding whether
Netcom should have known that Erlich was infringing their copyrights after receiving a
letter from plaintiffs, whether Netcom substantially participated in the infringement, and
whether Netcom has a valid fair use defense. Accordingly, Netcom is not entitled to
summary judgment on plaintiffs’ claim of contributory copyright infringement. However,
plaintiffs’ claims of direct and vicarious infringement fail. . . .
IV. ORDER
The court denies Netcom’s motion for summary judgment and Klemesrud’s
motion for judgment on the pleadings, as a triable issue of fact exists on the claim of
contributory infringement. The court also gives plaintiffs 30 days leave in which to
amend to state a claim for vicarious liability against defendant Klemesrud, if they can do
so in good faith. Plaintiffs’ application for a preliminary injunction against defendants
Netcom and Klemesrud is denied.
Questions:
1.) “Netcom correctly distinguishes MAI on the ground that Netcom did not take any
affirmative action that directly resulted in copying plaintiffs’ works other than by installing
and maintaining a system whereby software automatically forwards messages received from
subscribers onto the Usenet, and temporarily stores copies on its system.” This is a
distinction. Did the technician who turned on a computer in order to service it take such an
affirmative action? What vision of strict liability does Netcom espouse?

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2.) Is Netcom a.) ingenious, b.) a mangling of precedent, c.) correct, or all three?
3.) What would Judge Boudin think? Should those thoughts be left to Congress? Or is
that what the common law does, and has always done?
4.) Why does the court mention the reach of defamation law in the context of the First
Amendment?
5.) Netcom—though a District Court case ingeniously distinguishing binding precedent
in its own Circuit—anticipates some of the broad outlines of the compact that now governs the Internet. We will see in later chapters that limitations of liability are fundamental
to that compact. Judge Whyte’s decision, with its focus on “actual knowledge” and
merely “installing and maintaining a system,” suggests the lines that were ultimately
drawn. Is there any suggestion in the opinion that he was focused on those ultimate issues
and aware of the stakes? Where precisely?

James Boyle, The Internet Threat

Please read The Public Domain pp 54–63

The conventional wisdom is that governments respond slowly to technological change. In
the case of the Internet, nothing could be further from the truth. In 1994 and 1995, “dotcom” was still a mystical term for many. Most stories about the Internet dealt with sexual
predation rather than possibilities of extreme wealth. Internet commerce itself was barely
an idea, and some of the most exciting sites on the Web had pictures of coffeepots in
university departments far away. (“See,” one would proudly say to a technological
neophyte friend when introducing him to the wonders of the Net, “the pot is empty and we
can see that live from here! This changes everything!”) It was an innocent time. Yet the
U.S. government was already turning the wheels of intellectual property policy to respond
to the threat (and promise) of the Internet. More precisely, they were trying to shape the
future of the cumbersomely named “National Information Infrastructure,” the official name
for the “information superhighway” that it was presumed would replace the “immature”
technology of the Net. The government was wrong about that, and about a lot else.
The blueprint for new intellectual property policy online came from the Patent and
Trademark Office. That office promulgated first a Green Paper and then, after further
hearings, a White Paper, on “Intellectual Property and the National Information Infrastructure.” As policy and legal documents these are in one sense long out of date. Some of their
legal arguments were successfully challenged. Some of their most important proposals
were rejected, while many others have become law. But as a starting point from which to
trace the frame of mind that has come to dominate intellectual property policy online, they
are hard to equal. These documents contained proposals that nowadays would be seen as
fairly controversial. Internet service providers were said to be “strictly liable” for
copyright violations committed by their subscribers; that is to say, they were legally
responsible whether or not they knew about the violation or were at fault in any way.
Loading a document into your browser’s transient cache memory while reading it was
said to be making a “copy.” There was more: the beginnings of what later became the
Digital Millennium Copyright Act, making it illegal to cut through the digital fences
which content providers put around their products. The attitude toward fair use was
particularly revealing. At one point in the White Paper it was hinted that fair use might be

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a relic of the inconveniences of the analog age, to be discarded now that we could have
automated fractional payments for even the most insignificant use. (It was noted, however,
that some disagreed with this conclusion.) At another point, fair use was described as a
“tax” on rights holders and a “subsidy” to those who benefited from it, such as educational
institutions. The White Paper also suggested that while any potential loss to rights holders
caused by the new technology needed to be countered with new rights and new
protections, any potential gain to them through the new technology was simply theirs.
Potential gain did not offset the need to compensate for potential loss.
So what views of intellectual property were we carrying forward into the Internet
age? Intellectual property is just like other property. Rights are presumptively absolute.
Any limitations on them, such as fair use, are taxes on property owners, subsidies to the
society at large. It sounds like a perfect time to administer the Jefferson Warning I
sketched out in Chapter 2. After all, Jefferson was specifically warning against each of
these errors two hundred years ago. To find them in a student paper would be
disappointing—irritating, even. But this document was the blueprint for the intellectual
property regime of cyberspace.
But do these mistakes matter? How important is it that we get the rules of intellectual
property right? To me, a number of my colleagues, some librarians, a few software gurus,
the White Paper was more than just a bit of bad policy in a technical field—like a poorly
drafted statute about the witnessing of wills, say. When you set up the property rules in
some new space, you determine much about the history that follows. Property rules have a
huge effect on power relationships and bargaining positions. Think of rules setting out
water rights or the right to drive cattle over homesteaders’ land in the American West. But
they also are part of a larger way of seeing the world; think of the early-twentieth-century
rules treating unions as “conspiracies in restraint of trade” or the Supreme Court decisions
that dispossessed the American Indians on the theory that they did not comprehend the
concept of property and thus did not “own” the land being taken from them. We were at a
comparable point in the history of cyberspace. What was being set up here was a vision of
economy and culture, a frame of mind about how the world of cultural exchange operates,
and eventually a blueprint for our systems of communication. At this stage, the range of
possibilities is extremely wide. A lot of different choices could be made, but subsequent
changes would be harder and harder as people and companies built their activities around
the rules that had been laid down. This was, in short, a tipping point where it was
particularly important that we make the right decisions. . . .
Read the rest
Question:
1.) Boyle argues that the proposals that would have imposed strict liability on all internet
intermediaries—in part based on the logic of MAI, that even transient copies count as copies,
and copyright is a strict liability system—would have destroyed the internet as we know it.
ISPs, search engines, social media sites, cyberlockers—all would be liable for any unauthorized copy on their systems, regardless of knowledge or volition. But would this not have
been the appropriate solution? After all, we impose strict liability on manufacturers and
sellers of products and hold them liable even where the defect that causes harm could not
have been detected or prevented. The theory is that they should internalize the loss and that
this will cause them to take appropriate safety precautions for those harms that can be
prevented and to pay for those harms that cannot. Why not here? Would this not have saved
the copyright industries from all the harm they have suffered from rampant downloading?

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Notes
In the 2008 case Cartoon Network v. CSC Holdings10 (often referred to as the “Cablevision” case—Cablevision was one of the defendants), the Second Circuit limited one aspect
of MAI’s holding regarding fixation. As a reminder, the Copyright Act defines fixation as
follows:
A work is “fixed” in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the
author, is sufficiently permanent or stable to permit it to be perceived,
reproduced, or otherwise communicated for a period of more than
transitory duration.
The Cartoon Network court read this definition as follows: “We believe that this language
plainly imposes two distinct but related requirements: the work must be embodied in a
medium, i.e., placed in a medium such that it can be perceived, reproduced, etc., from that
medium (the ‘embodiment requirement’) and it must remain thus embodied ‘for a period
of more than transitory duration’ (the ‘duration requirement’).” It distinguished MAI by
finding that it only applied the first requirement: “We do not read MAI Systems as holding
that, as a matter of law, loading a program into a form of RAM always results in copying.
Such a holding would read the ‘transitory duration’ language out of the definition, and we
do not believe our sister circuit would dismiss this statutory language without even
discussing it.” Accordingly, it held that “buffering” the data that comprised a movie or TV
show for no more than 1.2 seconds did not create a fixed “copy” and was therefore not a
“reproduction” and not infringing. (“Buffering” temporarily stores data while it is being
transferred—you have seen it in action when the progress bar at the bottom of your video
inches ahead of what you’re watching.) In addition to amending MAI, Cartoon Network
also adopted Netcom’s volitional copying requirement, finding that “volitional conduct is
an important element of direct liability.” This allowed it to hold that a DVR system was
not subject to direct liability even when it made “fixed” copies in the course of streaming
video, because it was the customer ordering the video, and not the system, that engaged in
volitional conduct.

10

536 F.3d 121 (2d Cir. 2008).

CHAPTER TWELVE

Copyright’s “Reach”: Infringement

Introduction
Once one knows what subject matter copyright covers, the next and linked question is
“what conduct infringes copyright?” Obviously, to answer this question fully we would
have to consider the limitations and exceptions to copyright and we have not yet covered
those. Our question is different. How far does the right reach? Answering that question will
bring in the material covered in the last chapter—since, by definition, the copyright will
only cover the copyrightable aspects of a work; expression but not idea, for example. But
it will also bring up separate questions: What are the exclusive rights that copyright
provides and what does it take to infringe them? Where does idea stop and expression
begin? Does a paraphrase infringe? What counts as “too little to count as copying”? Should
the same rules apply to infringing a novel and a computer program? How does one go
through the actual process of separating copyrightable wheat from un-copyrightable chaff?
P ROBLEM 12-1
These problems are designed to test your intuitions about copyright infringement
before reading the cases that lay out the doctrinal framework. After finishing the
chapter, reassess your answers.
a.) James visits a bookstore that sells both new and used books. One of its most
expensive offerings is a prime condition, unopened, edition of Madonna’s Sex, a 1992
book that, famously, has pictures of Madonna eating pizza naked, hitch hiking naked
and so on and, less famously, has an exploration of sexuality, power dynamics and S&M.
James is a shallow guy and just wants to look at the nudie photos. But he is also cheap
and does not want to pay the requisite price. The book is held closed by a sealed paper
band so that readers cannot see the images inside. The paper band clearly announces
that it can only be broken by a purchaser, that breaking the band without paying, since
the contents are copyrighted, constitutes copyright infringement. James waits until the
shopkeeper is not looking and breaks the band. He peeks inside, and—his curiosity
satisfied and his mind teeming with prurient imagery—replaces the broken band and
takes his leave without buying anything. Has James infringed copyright? Is the
answer different if James is one of the original “Google Glassholes”? (Early
adopters of the Google Glass device, which looks like a pair of spectacles and permits
real time recording.)
b.) Jennifer has long been fascinated by the kind of business strategy and self-improvement books sold in airport bookstores. She studies the people who buy The Seven Habits
of Highly Effective People, Lean In and What Color is Your Parachute? Then she
watches them as they flip through their purchases in the waiting area and on the plane.
She notes that while people buy these books in large numbers, they rarely read them.
She concludes that even these short offerings are too lengthy for the average traveler
and comes up with a brilliant business idea. She decides to write 10 page précis versions
of each book. While she does not use the same words as the originals, she meticulously

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lays out all of the concepts, arguments and conclusions they contain. Jennifer’s versions
contain no criticism or commentary on the original, merely a condensed summary of
their points. She thinks this will allow busy business travelers to pretend to have read
the books without going through the time and expense of doing so. Her service is wildly
popular and she sells it to the SkyMall catalog whose slightly greasy, E. coli encrusted
pages now contain “Jennifer’s ‘Fake It To Make It’ Bookshelf,” summarizing business
bestsellers. She is sued by the copyright owners. Has Jennifer violated copyright?
c.) Irritated by all the law suits, Jennifer searches for an alternative business idea. She
notes that the only books more popular than self-help and business improvement titles
are diet books. She decides to write her own. Called The Last Diet Book, it consists of
two sentences printed in 48 point type. “Eat less. Exercise more.” The remaining 200
pages of the book are blank. The book is a huge success. James sees it and decides to
publish his own book. It is called The Last Diet Book, Abridged Edition. It has the
same two sentences, but only 100 blank pages following them, to cut down on costs.
Meanwhile Anthony starts up a blog called “Eat Less. Exercise More.” The blog
makes fun of diet crazes. Anthony concludes each posting with the tag line “Eat Less.
Exercise More.” Has James or Anthony violated copyright? (Bonus question: Has
James violated trademark law? Has Anthony?)
d.) Sergey is a computer programmer who discovers an apparently universal truth. In
every serious relationship, friendship or work partnership, one person will be a timerealist and one a time-fantasist. One party will accurately predict when it is necessary to
leave in order to get to the airport on time, or when one needs to start the paper in order
to finish it in a timely manner. The other person in the relationship will have an
expansive, optimistic sense of duration in which it is always possible to clean the
kitchen, do the taxes and learn Russian before packing for the flight that departs in one
and a half hours. Sergey writes an app called “Leave now!” that, once you have put in
your schedule and answered a number of questions, will tell you when you need to leave,
start writing or what have you. The app is wildly popular. Intrigued, Larry—who was
once a programmer but now installs cable for Time Warner—decides to write his own
app that does exactly what “Leave Now” does. He carefully studies the functions Sergey
provided—such as integrating data on traffic and airport delays into its answers—and
offers each of those functions in his competing app, “It’s Later Than You Think.” Has
Larry infringed Sergey’s copyright?
e.) Imagine that Shakespeare’s works have been taken out of the public domain.
(Shakespeare’s works were never actually under copyright so it is not technically a
restoration.) Congress has conveyed the new copyright over Shakespeare’s works to
the Folger Shakespeare Library in Washington DC for its tireless work to promote the
Bard and because the Folger “will be a good conservator of his literary heritage.”
James has long been a fan of Hamlet. He writes a novel featuring a gloomy and
indecisive Scandinavian prince who has strangely intense feelings for his mother, a
correspondingly poor relationship with his uncle/stepfather, and a really flaky girlfriend who talks about flowers a lot. The prince is called Hamnet (the name of
Shakespeare’s son, who died young). Could the Folger Library sue James for
copyright infringement? [Bonus assignment: Find the lines in the Golan majority
opinion that indicate it would be unconstitutional to withdraw Shakespeare’s
works from the public domain and give copyright in them to the Folger Library.]

A Limited List of Exclusive Rights

A Limited List of Exclusive Rights

369

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Exclusive Rights

Exclusive Rights

371

17 U.S. Code § 106—Exclusive rights in copyrighted works
Subject to sections 107 through 122, the owner of copyright under
this title has the exclusive rights to do and to authorize any of the
following:
(1) to reproduce the copyrighted work in copies or phonorecords;
(2) to prepare derivative works based upon the copyrighted work;
(3) to distribute copies or phonorecords of the copyrighted work
to the public by sale or other transfer of ownership, or by rental,
lease, or lending;
(4) in the case of literary, musical, dramatic, and choreographic
works, pantomimes, and motion pictures and other audiovisual
works, to perform the copyrighted work publicly;
(5) in the case of literary, musical, dramatic, and choreographic
works, pantomimes, and pictorial, graphic, or sculptural works,
including the individual images of a motion picture or other
audiovisual work, to display the copyrighted work publicly; and
(6) in the case of sound recordings, to perform the copyrighted
work publicly by means of a digital audio transmission.
Remember the naïve young thing who arrived in law school, dewy-eyed and

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thinking that property was pretty simple? One either owned something or one did not.
Perhaps that was never you, but in any case exposure to the first year curriculum would
soon have changed that misimpression. In place of the binary, “property or not”
conception, one learns that property is a “bundle of rights” of varying shape and design.
Does one have the right to exclude, to demand compensation but not to exclude, to
alienate, to use for a defined period but not to alienate? What is true of real and personal
property is doubly so for copyright. Just as trademark was not “absolute ownership of
the word” so copyright is not “absolute ownership of the work.”
§ 106 defines the exclusive rights owned by a copyright holder. (§ 1201, which we
will cover later, adds a special set of rights over digital copyrighted works protected by
technical measures that control one’s ability to access or to reproduce the work.) Read
through the rights enumerated. Notice how much is not covered. Reading is not copyright
infringement. Selling one’s used copy of the book is not copyright infringement. Privately
performing a dramatic or musical work is not copyright infringement.
As we learned in the last chapter, by definition, copyright can only cover
copyrightable subject matter. This is the first, vital, restriction of copyright’s ambit. Even
within that subject matter copyright’s reach is restricted to certain actions—“§ 106
significant acts”—copying, distributing, publicly performing and so on. This is the second
limit on copyright’s reach. But even when one has engaged in one of the actions covered
by a § 106 exclusive right, the question is has one actually done enough to violate the right.
In this chapter we will focus largely on two of the rights of § 106—the reproduction and
derivative works rights. We will ask, when does copying constitute infringement? (The
questions of whether something is a public performance, public display, or distribution are
no less vexed. We just do not have space for them here, though in the next chapter you will
be reading a fascinating case about whether “in-line linking” and “framing” by an image
search engine implicate the public display right.)
It may be helpful to remember this: the discussion of copyrightable subject matter
also suffuses the discussion of copyright infringement. This is not a situation in which
some areas are completely public and not subject to property rights (a Hawaiian beach, a
white pages telephone directory) while others (your farm, a song) are completely private
and completely owned. This is more like a situation in which even the farm that is clearly
private property has public rights of way running through it, rights of overflight running
over it. Property and commons exist in a tight braid, not as two separate plots on a map.
Feist tells us that “To establish infringement, two elements must be proven: (1)
ownership of a valid copyright, and (2) copying of constituent elements of the work that
are original.” There must be copying. It must be enough copying. And it must be copying
of material subject to the copyright—the ideas and facts in a work are not. But how do
those abstractions work themselves out in concrete cases?

The Idea/Expression Distinction in Infringement Analysis

373

1.) The Idea/Expression Distinction in Infringement Analysis

Nichols v. Universal Pictures Corp. et al.

45 F.2d 119 (2d Cir. 1930)

L. HAND, Circuit Judge.
The plaintiff is the author of a play,
“Abie’s Irish Rose,” which it may be
assumed was properly copyrighted under
section five, subdivision (d), of the Copyright Act, 17 USCA § 5(d). The defendant produced publicly a motion picture
play, “The Cohens and The Kellys,”
which the plaintiff alleges was taken
from it. As we think the defendant’s play
too unlike the plaintiff’s to be an infringement, we may assume, arguendo, that in
some details the defendant used the
plaintiff’s play, as will subsequently appear, though we do not so decide. It therefore becomes necessary to give an outline Abie’s Irish Rose image information available at
of the two plays.
http://en.wikipedia.org/wiki/File:Abiesirish.jpg. The
“Abie’s Irish Rose” presents a Cohens and the Kellys image information available at
Jewish family living in prosperous cir- https://en.wikipedia.org/wiki/The_Cohens_and_Kellys
cumstances in New York. The father, a #/media/File:Cohens_and_Kellys_poster.jpg.
widower, is in business as a merchant, in which his son and only child helps him. The boy
has philandered with young women, who to his father’s great disgust have always been
Gentiles, for he is obsessed with a passion that his daughter-in-law shall be an orthodox
Jewess. When the play opens the son, who has been courting a young Irish Catholic girl,
has already married her secretly before a Protestant minister, and is concerned to soften the
blow for his father, by securing a favorable impression of his bride, while concealing her
faith and race. To accomplish this he introduces her to his father at his home as a Jewess,
and lets it appear that he is interested in her, though he conceals the marriage. The girl
somewhat reluctantly falls in with the plan; the father takes the bait, becomes infatuated
with the girl, concludes that they must marry, and assumes that of course they will, if he so
decides. He calls in a rabbi, and prepares for the wedding according to the Jewish rite.
Meanwhile the girl’s father, also a widower, who lives in California, and is as intense
in his own religious antagonism as the Jew, has been called to New York, supposing that
his daughter is to marry an Irishman and a Catholic. Accompanied by a priest, he arrives
at the house at the moment when the marriage is being celebrated, but too late to prevent
it, and the two fathers, each infuriated by the proposed union of his child to a heretic, fall
into unseemly and grotesque antics. The priest and the rabbi become friendly, exchange
trite sentiments about religion, and agree that the match is good. Apparently out of
abundant caution, the priest celebrates the marriage for a third time, while the girl’s father
is inveigled away. The second act closes with each father, still outraged, seeking to find
some way by which the union, thus trebly insured, may be dissolved.
The last act takes place about a year later, the young couple having meanwhile been

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abjured by each father, and left to their own resources. They have had twins, a boy and a
girl, but their fathers know no more than that a child has been born. At Christmas each, led
by his craving to see his grandchild, goes separately to the young folks’ home, where they
encounter each other, each laden with gifts, one for a boy, the other for a girl. After some
slapstick comedy, depending upon the insistence of each that he is right about the sex of
the grandchild, they become reconciled when they learn the truth, and that each child is to
bear the given name of a grandparent. The curtain falls as the fathers are exchanging
amenities, and the Jew giving evidence of an abatement in the strictness of his orthodoxy.
“The Cohens and The Kellys” presents two families, Jewish and Irish, living side
by side in the poorer quarters of New York in a state of perpetual enmity. The wives in
both cases are still living, and share in the mutual animosity, as do two small sons, and
even the respective dogs. The Jews have a daughter, the Irish a son; the Jewish father is
in the clothing business; the Irishman is a policeman. The children are in love with each
other, and secretly marry, apparently after the play opens. The Jew, being in great financial
straits, learns from a lawyer that he has fallen heir to a large fortune from a great-aunt,
and moves into a great house, fitted luxuriously. Here he and his family live in vulgar
ostentation, and here the Irish boy seeks out his Jewish bride, and is chased away by the
angry father. The Jew then abuses the Irishman over the telephone, and both become
hysterically excited. The extremity of his feelings makes the Jew sick, so that he must go
to Florida for a rest, just before which the daughter discloses her marriage to her mother.
On his return the Jew finds that his daughter has borne a child; at first he suspects
the lawyer, but eventually learns the truth and is overcome with anger at such a low
alliance. Meanwhile, the Irish family who have been forbidden to see the grandchild, go
to the Jew’s house, and after a violent scene between the two fathers in which the Jew
disowns his daughter, who decides to go back with her husband, the Irishman takes her
back with her baby to his own poor lodgings. The lawyer, who had hoped to marry the
Jew’s daughter, seeing his plan foiled, tells the Jew that his fortune really belongs to the
Irishman, who was also related to the dead woman, but offers to conceal his knowledge,
if the Jew will share the loot. This the Jew repudiates, and, leaving the astonished lawyer,
walks through the rain to his enemy’s house to surrender the property. He arrives in great
dejection, tells the truth, and abjectly turns to leave. A reconciliation ensues, the Irishman
agreeing to share with him equally. The Jew shows some interest in his grandchild, though
this is at most a minor motive in the reconciliation, and the curtain falls while the two are
in their cups, the Jew insisting that in the firm name for the business, which they are to
carry on jointly, his name shall stand first.
It is of course essential to any protection of literary property, whether at commonlaw or under the statute, that the right cannot be limited literally to the text, else a plagiarist
would escape by immaterial variations. That has never been the law, but, as soon as literal
appropriation ceases to be the test, the whole matter is necessarily at large, so that, as was
recently well said by a distinguished judge, the decisions cannot help much in a new case.
When plays are concerned, the plagiarist may excise a separate scene; or he may
appropriate part of the dialogue. Then the question is whether the part so taken is
“substantial,” and therefore not a “fair use” of the copyrighted work; it is the same
question as arises in the case of any other copyrighted work. But when the plagiarist does
not take out a block in situ, but an abstract of the whole, decision is more troublesome.
Upon any work, and especially upon a play, a great number of patterns of increasing
generality will fit equally well, as more and more of the incident is left out. The last may
perhaps be no more than the most general statement of what the play is about, and at times

The Idea/Expression Distinction in Infringement Analysis

375

might consist only of its title; but there is a point in this series of abstractions where they
are no longer protected, since otherwise the playwright could prevent the use of his
“ideas,” to which, apart from their expression, his property is never extended. Nobody has
ever been able to fix that boundary, and nobody ever can. In some cases the question has
been treated as though it were analogous to lifting a portion out of the copyrighted work;
but the analogy is not a good one, because, though the skeleton is a part of the body, it
pervades and supports the whole. In such cases we are rather concerned with the line
between expression and what is expressed. As respects plays, the controversy chiefly
centers upon the characters and sequence of incident, these being the substance.
We did not in Dymow v. Bolton hold that a plagiarist was never liable for stealing a
plot; that would have been flatly against our rulings in Dam v. Kirk La Shelle Co., and
Stodart v. Mutual Film Co., neither of which we meant to overrule. We found the plot of the
second play was too different to infringe, because the most detailed pattern, common to
both, eliminated so much from each that its content went into the public domain; and for
this reason we said, “this mere subsection of a plot was not susceptible of copyright.” But
we do not doubt that two plays may correspond in plot closely enough for infringement.
How far that correspondence must go is another matter. Nor need we hold that the same
may not be true as to the characters, quite independently of the “plot” proper, though, as far
as we know, such a case has never arisen. If Twelfth Night were copyrighted, it is quite
possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to
infringe, but it would not be enough that for one of his characters he cast a riotous knight
who kept wassail to the discomfort of the household, or a vain and foppish steward who
became amorous of his mistress. These would be no more than Shakespeare’s “ideas” in the
play, as little capable of monopoly as Einstein’s Doctrine of Relativity, or Darwin’s theory
of the Origin of Species. It follows that the less developed the characters, the less they can
be copyrighted; that is the penalty an author must bear for marking them too indistinctly.
In the two plays at bar we think both as to incident and character, the defendant took
no more—assuming that it took anything at all—than the law allowed. The stories are quite
different. One is of a religious zealot who insists upon his child’s marrying no one outside
his faith; opposed by another who is in this respect just like him, and is his foil. Their
difference in race is merely an obbligato to the main theme, religion. They sink their
differences through grandparental pride and affection. In the other, zealotry is wholly
absent; religion does not even appear. It is true that the parents are hostile to each other in
part because they differ in race; but the marriage of their son to a Jew does not apparently
offend the Irish family at all, and it exacerbates the existing animosity of the Jew,
principally because he has become rich, when he learns it. They are reconciled through the
honesty of the Jew and the generosity of the Irishman; the grandchild has nothing whatever
to do with it. The only matter common to the two is a quarrel between a Jewish and an Irish
father, the marriage of their children, the birth of grandchildren and a reconciliation.
If the defendant took so much from the plaintiff, it may well have been because her
amazing success seemed to prove that this was a subject of enduring popularity. Even so,
granting that the plaintiff’s play was wholly original, and assuming that novelty is not
essential to a copyright, there is no monopoly in such a background. Though the plaintiff
discovered the vein, she could not keep it to herself; so defined, the theme was too
generalized an abstraction from what she wrote. It was only a part of her “ideas.”
Nor does she fare better as to her characters. It is indeed scarcely credible that she
should not have been aware of those stock figures, the low comedy Jew and Irishman.
The defendant has not taken from her more than their prototypes have contained for many

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decades. If so, obviously so to generalize her copyright, would allow her to cover what
was not original with her. But we need not hold this as matter of fact, much as we might
be justified. Even though we take it that she devised her figures out of her brain de novo,
still the defendant was within its rights.
There are but four characters common to both plays, the lovers and the fathers. The
lovers are so faintly indicated as to be no more than stage properties. They are loving and
fertile; that is really all that can be said of them, and anyone else is quite within his rights if
he puts loving and fertile lovers in a play of his own, wherever he gets the cue. The plaintiff’s
Jew is quite unlike the defendant’s. His obsession is his religion, on which depends such
racial animosity as he has. He is affectionate, warm and patriarchal. None of these fit the
defendant’s Jew, who shows affection for his daughter only once, and who has none but the
most superficial interest in his grandchild. He is tricky, ostentatious and vulgar, only by
misfortune redeemed into honesty. Both are grotesque, extravagant and quarrelsome; both
are fond of display; but these common qualities make up only a small part of their simple
pictures, no more than any one might lift if he chose. The Irish fathers are even more unlike;
the plaintiff’s a mere symbol for religious fanaticism and patriarchal pride, scarcely a character at all. Neither quality appears in the defendant’s, for while he goes to get his grandchild, it is rather out of a truculent determination not to be forbidden, than from pride in his
progeny. For the rest he is only a grotesque hobbledehoy, used for low comedy of the most
conventional sort, which any one might borrow, if he chanced not to know the exemplar.
. . . We assume that the plaintiff’s play is altogether original, even to an extent that
in fact it is hard to believe. We assume further that, so far as it has been anticipated by
earlier plays of which she knew nothing, that fact is immaterial. Still, as we have already
said, her copyright did not cover everything that might be drawn from her play; its
content went to some extent into the public domain. We have to decide how much, and
while we are as aware as any one that the line, wherever it is drawn, will seem arbitrary,
that is no excuse for not drawing it; it is a question such as courts must answer in nearly
all cases. Whatever may be the difficulties a priori, we have no question on which side
of the line this case falls. A comedy based upon conflicts between Irish and Jews, into
which the marriage of their children enters, is no more susceptible of copyright than the
outline of Romeo and Juliet.
The plaintiff has prepared an elaborate analysis of the two plays, showing a
“quadrangle” of the common characters, in which each is represented by the emotions
which he discovers. She presents the resulting parallelism as proof of infringement, but
the adjectives employed are so general as to be quite useless. Take for example the
attribute of “love” ascribed to both Jews. The plaintiff has depicted her father as deeply
attached to his son, who is his hope and joy; not so, the defendant, whose father’s conduct
is throughout not actuated by any affection for his daughter, and who is merely once
overcome for the moment by her distress when he has violently dismissed her lover.
“Anger” covers emotions aroused by quite different occasions in each case; so do
“anxiety,” “despondency” and “disgust.” It is unnecessary to go through the catalogue
for emotions are too much colored by their causes to be a test when used so broadly. This
is not the proper approach to a solution; it must be more ingenuous, more like that of a
spectator, who would rely upon the complex of his impressions of each character.
We cannot approve the length of the record, which was due chiefly to the use of
expert witnesses. Argument is argument whether in the box or at the bar, and its proper
place is the last. The testimony of an expert upon such issues, especially his crossexamination, greatly extends the trial and contributes nothing which cannot be better heard

Copyright Meets Computer Software: The Infringement Edition

377

after the evidence is all submitted. It ought not to be allowed at all; and while its admission
is not a ground for reversal, it cumbers the case and tends to confusion, for the more the
court is led into the intricacies of dramatic craftsmanship, the less likely it is to stand upon
the firmer, if more naïve, ground of its considered impressions upon its own perusal. We
hope that in this class of cases such evidence may in the future be entirely excluded, and
the case confined to the actual issues; that is, whether the copyrighted work was original,
and whether the defendant copied it, so far as the supposed infringement is identical.
Decree affirmed.
Questions:
1.) Think back to the speech of Victor Hugo in Chapter 10. Copyright depends on the
ability of law to police the boundary between protectable expression and unprotectable
idea. Nichols is the leading case on that point. It contains the line “[n]obody has ever
been able to fix that boundary, and nobody ever can.” Can a property regime survive with
boundaries as vague as this? Could we have property in real estate if Blackacre’s
dimensions were outlined on a surrealist map that changed depending on who viewed it?
Property in money if a $10 bill might stand for a range of monetary values from $9.50 to
$11? What is Learned Hand’s response to this problem?
2.) “If the defendant took so much from the plaintiff, it may well have been because her
amazing success seemed to prove that this was a subject of enduring popularity. Even so,
granting that the plaintiff’s play was wholly original, and assuming that novelty is not
essential to a copyright, there is no monopoly in such a background.” How is it that it
can be legal to copy aspects of a copyrighted work, for profit, in the hope of reaping
some of the success the original enjoyed? How does your answer relate to the notion of
“promote the progress”? To Larry and Sergey’s punctuality apps?

2.) Copyright Meets Computer Software: The Infringement Edition

James Boyle, A Machine that Contains
All Other Machines

Please read The Public Domain pp 161–168

Imagine a person staring at an infinite roll of paper tape. On the paper are symbols in some
alphabet or number system. The reader carries out simple, operable instructions on the
basis of that data. “Add together the next two digits you are presented with and write down
the answer. If the answer is odd, go to step 2. If the answer is even, go to step 3.” Now
replace the person with a mechanical head that can “read” the instructions, carry out the
desired operations, and write the answer down. The British mathematician Alan Turing
imagined something like this—a little more complicated, perhaps, but fairly similar. What
is it? We have the reading head, the set of instructions, the data on which the instructions
are to be performed, the record of the result, and some kind of “state table” that tells the
machine where it is in the process. These are the component parts of Turing machines—
or as we know them better, computers. More accurately, Turing machines are a method of
simulating the operation of computers, a metaphor that enables us to imitate their logical

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processes. In the words of Wikipedia, “despite their simplicity—[they] can be adapted to
simulate the logic of any computer that could possibly be constructed.” And to give
lawyers fits. But that is getting ahead of ourselves.
In Greek mythology, Procrustes had a bed to which he fitted its prospective
occupants, whether they liked it or not. The tall were trimmed down. The short stretched
on the rack. Intellectual property lawyers have many similarities to Procrustes. The
technologies that are brought before them are made to fit the conceptual boxes the law
provides, boxes with names such as “copyright” and “patent.” Occasionally, new
conceptual boxes are made, but—for very good reasons—most of the time we stick with
the boxes we have. As with Procrustes, things do not always fit and the process can be
distressing for its subjects.
It is important to realize that the process of trimming and stretching can be done
well or badly. If it is done really badly, the technology is stunted, deformed, even
destroyed. If it is done well, the law aids the development of the technology in exactly
the happy way described in Chapter 1. What did our Procrustean legal system do with
computers and computer science?
Read the rest
••••••••••
Notes
The next case is long. (Apologies). Why? First, it has some nice, plain English
explanations of computer programming—seen through the lens of copyright. You need to
understand how computer programming works, at least at the highest, most abstract level.
(You began this journey by reading Lotus and Oracle in the previous chapter; it continues
here.) So that part of the decision has been left only mildly edited—it is not “Physics for
Poets” but it might be “Coding for Law Student, Humanities Majors.” We hope you find it
of interest. Resist the inexorable tendency to have your IQ plummet toward zero whenever
someone says “parameter,” “function call” or “API—(application programming interface).”
This is a description of a system of code, normally expressed in a highly technical language
most people do not fully understand (thus needing smart people to decipher it) that runs a
lot of important things. Guess what you hope to do for a living? Not so different, is it?
The second reason the decision is long is that it is a classic case—maybe the classic
case together with Lotus v. Borland and Sega v. Accolade—demonstrating a court
wrestling with the incorporation of a new technology into copyright. One could look at
the decision as frankly policy-oriented in its concerns about how copyright will affect
innovation and competition—and its close tailoring of the doctrine in order to achieve
that result. On the other hand, you could see this as a classic example of the common law
method. Note how the court uses existing traditional copyright doctrines—the ideaexpression distinction, merger, scènes à faire—as it deals with this new technology.
Finally, Computer Associates, together with other cases you have yet to read,
ended up shaping the law of software copyright on the most fundamental level. Ask
yourself the following, is it really true now that a copyright over a book or a piece of
music is the same as a software copyright? Do we really have a different law of copyright
for software? Or is it simply that the subject matter’s own peculiarities demand different
answers to the same questions?

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Computer Associates v. Altai, Inc.
982 F.2d 693 (2d Cir. 1992)

WALKER, Circuit Judge.
In recent years, the growth of computer science has spawned a number of challenging
legal questions, particularly in the field of copyright law. As scientific knowledge advances,
courts endeavor to keep pace, and sometimes—as in the area of computer technology—they
are required to venture into less than familiar waters. This is not a new development, though.
“From its beginning, the law of copyright has developed in response to significant changes
in technology.” Sony Corp. v. Universal City Studios, Inc. (1984).
Article I, section 8 of the Constitution authorizes Congress “[t]o 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.” The Supreme
Court has stated that “[t]he economic philosophy behind the clause . . . is the conviction
that encouragement of individual effort by personal gain is the best way to advance
public welfare. . . .” Mazer v. Stein (1954). The author’s benefit, however, is clearly a
“secondary” consideration. “[T]he ultimate aim is, by this incentive, to stimulate artistic
creativity for the general public good.” Twentieth Century Music Corp. v. Aiken (1975).
Thus, the copyright law seeks to establish a delicate equilibrium. On the one hand,
it affords protection to authors as an incentive to create, and, on the other, it must
appropriately limit the extent of that protection so as to avoid the effects of monopolistic
stagnation. In applying the federal act to new types of cases, courts must always keep
this symmetry in mind.
Among other things, this case deals with the challenging question of whether and to
what extent the “non-literal” aspects of a computer program, that is, those aspects that are
not reduced to written code, are protected by copyright. While a few other courts have
already grappled with this issue, this case is one of first impression in this circuit. As we
shall discuss, we find the results reached by other courts to be less than satisfactory. Drawing
upon long-standing doctrines of copyright law, we take an approach that we think better
addresses the practical difficulties embedded in these types of cases. In so doing, we have
kept in mind the necessary balance between creative incentive and industrial competition.
BACKGROUND
I. COMPUTER PROGRAM DESIGN
Certain elementary facts concerning the nature of computer programs are vital to
the following discussion. The Copyright Act defines a computer program as “a set of
statements or instructions to be used directly or indirectly in a computer in order to bring
about a certain result.” 17 U.S.C. § 101. In writing these directions, the programmer
works “from the general to the specific.” Whelan Assocs., Inc. v. Jaslow Dental Lab.,
Inc. (3d Cir. 1986).
The first step in this procedure is to identify a program’s ultimate function or
purpose. An example of such an ultimate purpose might be the creation and maintenance
of a business ledger. Once this goal has been achieved, a programmer breaks down or
“decomposes” the program’s ultimate function into “simpler constituent problems or
‘subtasks,’” which are also known as subroutines or modules. In the context of a business
ledger program, a module or subroutine might be responsible for the task of updating a list
of outstanding accounts receivable. Sometimes, depending upon the complexity of its task,

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a subroutine may be broken down further into sub-subroutines.
Having sufficiently decomposed the program’s ultimate function into its
component elements, a programmer will then arrange the subroutines or modules into
what are known as organizational or flow charts. Flow charts map the interactions
between modules that achieve the program’s end goal.
In order to accomplish these intra-program interactions, a programmer must carefully
design each module’s parameter list. A parameter list, according to the expert appointed and
fully credited by the district court, Dr. Randall Davis, is “the information sent to and
received from a subroutine.” The term “parameter list” refers to the form in which
information is passed between modules (e.g. for accounts receivable, the designated time
frame and particular customer identifying number) and the information’s actual content (e.g.
8/91–7/92; customer No. 3). With respect to form, interacting modules must share similar
parameter lists so that they are capable of exchanging information.
“The functions of the modules in a program together with each module’s relationships
to other modules constitute the ‘structure’ of the program.” Additionally, the term structure
may include the category of modules referred to as “macros.” A macro is a single instruction
that initiates a sequence of operations or module interactions within the program. Very often
the user will accompany a macro with an instruction from the parameter list to refine the
instruction (e.g. current total of accounts receivable (macro), but limited to those for 8/91 to
7/92 from customer No. 3 (parameters)).
In fashioning the structure, a programmer will normally attempt to maximize the
program’s speed, efficiency, as well as simplicity for user operation, while taking into
consideration certain externalities such as the memory constraints of the computer upon
which the program will be run. . . .
Once each necessary module has been identified, designed, and its relationship to
the other modules has been laid out conceptually, the resulting program structure must be
embodied in a written language that the computer can read. This process is called
“coding,” and requires two steps. First, the programmer must transpose the program’s
structural blue-print into a source code. This step has been described as “comparable to
the novelist fleshing out the broad outline of his plot by crafting from words and sentences
the paragraphs that convey the ideas.” The source code may be written in any one of
several computer languages, such as COBAL, FORTRAN, BASIC, EDL, etc., depending
upon the type of computer for which the program is intended. Once the source code has
been completed, the second step is to translate or “compile” it into object code. Object
code is the binary language comprised of zeros and ones through which the computer
directly receives its instructions. After the coding is finished, the programmer will run the
program on the computer in order to find and correct any logical and syntactical errors.
This is known as “debugging” and, once done, the program is complete.
II. FACTS
CA is a Delaware corporation, with its principal place of business in Garden City,
New York. Altai is a Texas corporation, doing business primarily in Arlington, Texas.
Both companies are in the computer software industry—designing, developing and
marketing various types of computer programs.
The subject of this litigation originates with one of CA’s marketed programs
entitled CA-SCHEDULER. CA-SCHEDULER is a job scheduling program designed for
IBM mainframe computers. Its primary functions are straightforward: to create a
schedule specifying when the computer should run various tasks, and then to control the

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computer as it executes the schedule. CA-SCHEDULER contains a sub-program entitled
ADAPTER, also developed by CA. ADAPTER is not an independently marketed
product of CA; it is a wholly integrated component of CA-SCHEDULER and has no
capacity for independent use.
Nevertheless, ADAPTER plays an extremely important role. It is an “operating
system compatibility component,” which means, roughly speaking, it serves as a translator.
An “operating system” is itself a program that manages the resources of the computer,
allocating those resources to other programs as needed. The IBM System 370 family of
computers, for which CA-SCHEDULER was created, is, depending upon the computer’s
size, designed to contain one of three operating systems: DOS/VSE, MVS, or CMS. As the
district court noted, the general rule is that “a program written for one operating system,
e.g., DOS/VSE, will not, without modification, run under another operating system such
as MVS.” ADAPTER’s function is to translate the language of a given program into the
particular language that the computer’s own operating system can understand. . . .
A program like ADAPTER, which allows a computer user to change or use multiple
operating systems while maintaining the same software, is highly desirable. It saves the user
the costs, both in time and money, that otherwise would be expended in purchasing new
programs, modifying existing systems to run them, and gaining familiarity with their
operation. The benefits run both ways. The increased compatibility afforded by an
ADAPTER-like component, and its resulting popularity among consumers, makes
whatever software in which it is incorporated significantly more marketable.
Starting in 1982, Altai began marketing its own job scheduling program entitled
ZEKE. The original version of ZEKE was designed for use in conjunction with a VSE
operating system. By late 1983, in response to customer demand, Altai decided to rewrite
ZEKE so that it could be run in conjunction with an MVS operating system.
At that time, James P. Williams (“Williams”), then an employee of Altai and now
its President, approached Claude F. Arney, III (“Arney”), a computer programmer who
worked for CA. Williams and Arney were longstanding friends, and had in fact been coworkers at CA for some time before Williams left CA to work for Altai’s predecessor.
Williams wanted to recruit Arney to assist Altai in designing an MVS version of ZEKE.
At the time he first spoke with Arney, Williams was aware of both the CASCHEDULER and ADAPTER programs. However, Williams was not involved in their
development and had never seen the codes of either program. When he asked Arney to
come work for Altai, Williams did not know that ADAPTER was a component of CASCHEDULER.
Arney, on the other hand, was intimately familiar with various aspects of ADAPTER.
While working for CA, he helped improve the VSE version of ADAPTER, and was
permitted to take home a copy of ADAPTER’S source code. This apparently developed into
an irresistible habit, for when Arney left CA to work for Altai in January, 1984, he took with
him copies of the source code for both the VSE and MVS versions of ADAPTER. He did
this in knowing violation of the CA employee agreements that he had signed.
Once at Altai, Arney and Williams discussed design possibilities for adapting ZEKE
to run on MVS operating systems. Williams, who had created the VSE version of ZEKE,
thought that approximately 30% of his original program would have to be modified in
order to accommodate MVS. Arney persuaded Williams that the best way to make the
needed modifications was to introduce a “common system interface” component into
ZEKE. He did not tell Williams that his idea stemmed from his familiarity with
ADAPTER. They decided to name this new component-program OSCAR.

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Arney went to work creating OSCAR at Altai’s offices using the ADAPTER
source code. The district court accepted Williams’ testimony that no one at Altai, with
the exception of Arney, affirmatively knew that Arney had the ADAPTER code, or that
he was using it to create OSCAR/VSE. However, during this time period, Williams’
office was adjacent to Arney’s. Williams testified that he and Arney “conversed quite
frequently” while Arney was “investigating the source code of ZEKE” and that Arney
was in his office “a number of times daily, asking questions.” In three months, Arney
successfully completed the OSCAR/VSE project. In an additional month he developed
an OSCAR/MVS version. When the dust finally settled, Arney had copied approximately
30% of OSCAR’s code from CA’s ADAPTER program.
The first generation of OSCAR programs was known as OSCAR 3.4. From 1985
to August 1988, Altai used OSCAR 3.4 in its ZEKE product, as well as in programs
entitled ZACK and ZEBB. In late July 1988, CA first learned that Altai may have
appropriated parts of ADAPTER. After confirming its suspicions, CA secured copyrights
on its 2.1 and 7.0 versions of CA-SCHEDULER. CA then brought this copyright and
trade secret misappropriation action against Altai.
Apparently, it was upon receipt of the summons and complaint that Altai first learned
that Arney had copied much of the OSCAR code from ADAPTER. After Arney confirmed
to Williams that CA’s accusations of copying were true, Williams immediately set out to
survey the damage. Without ever looking at the ADAPTER code himself, Williams learned
from Arney exactly which sections of code Arney had taken from ADAPTER.
Upon advice of counsel, Williams initiated OSCAR’s rewrite. The project’s goal
was to save as much of OSCAR 3.4 as legitimately could be used, and to excise those
portions which had been copied from ADAPTER. Arney was entirely excluded from the
process, and his copy of the ADAPTER code was locked away. Williams put eight other
programmers on the project, none of whom had been involved in any way in the
development of OSCAR 3.4. Williams provided the programmers with a description of
the ZEKE operating system services so that they could rewrite the appropriate code. The
rewrite project took about six months to complete and was finished in mid-November
1989. The resulting program was entitled OSCAR 3.5.
From that point on, Altai shipped only OSCAR 3.5 to its new customers. Altai also
shipped OSCAR 3.5 as a “free upgrade” to all customers that had previously purchased
OSCAR 3.4. While Altai and Williams acted responsibly to correct Arney’s literal
copying of the ADAPTER program, copyright infringement had occurred. . . .
I. COPYRIGHT INFRINGEMENT
In any suit for copyright infringement, the plaintiff must establish its ownership of
a valid copyright, and that the defendant copied the copyrighted work. The plaintiff may
prove defendant’s copying either by direct evidence or, as is most often the case, by
showing that (1) the defendant had access to the plaintiff’s copyrighted work and (2) that
defendant’s work is substantially similar to the plaintiff’s copyrightable material. For the
purpose of analysis, the district court assumed that Altai had access to the ADAPTER
code when creating OSCAR 3.5. Thus, in determining whether Altai had unlawfully
copied protected aspects of CA’s ADAPTER, the district court narrowed its focus of
inquiry to ascertaining whether Altai’s OSCAR 3.5 was substantially similar to
ADAPTER. Because we approve Judge Pratt’s conclusions regarding substantial
similarity, our analysis will proceed along the same assumption.
As a general matter, and to varying degrees, copyright protection extends beyond a

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literary work’s strictly textual form to its non-literal components. As we have said, “[i]t is
of course essential to any protection of literary property . . . that the right cannot be limited
literally to the text, else a plagiarist would escape by immaterial variations.” Nichols v.
Universal Pictures Co. (2d Cir. 1930) Thus, where “the fundamental essence or structure
of one work is duplicated in another,” 3 Nimmer, § 13.03[A][1], courts have found
copyright infringement. See, e.g., Horgan v. Macmillan (2d Cir. 1986) (recognizing that
a book of photographs might infringe ballet choreography); Twentieth Century-Fox Film
Corp. v. MCA, Inc. (9th Cir. 1983) (motion picture and television series); Sid & Marty
Krofft Television Prods., Inc. v. McDonald’s Corp. (9th Cir. 1977) (television commercial
and television series); Sheldon v. Metro-Goldwyn Pictures Corp. (2d Cir.), cert. denied,
298 U.S. 669 (1936) (play and motion picture); accord Stewart v. Abend (1990)
(recognizing that motion picture may infringe copyright in book by using its “unique
setting, characters, plot, and sequence of events”). This black letter proposition is the
springboard for our discussion.
A. Copyright Protection for the Non-literal Elements of Computer Programs
It is now well settled that the literal elements of computer programs, i.e., their source
and object codes, are the subject of copyright protection. Here, as noted earlier, Altai admits
having copied approximately 30% of the OSCAR 3.4 program from CA’s ADAPTER
source code, and does not challenge the district court’s related finding of infringement.
In this case, the hotly contested issues surround OSCAR 3.5. As recounted above,
OSCAR 3.5 is the product of Altai’s carefully orchestrated rewrite of OSCAR 3.4. After
the purge, none of the ADAPTER source code remained in the 3.5 version; thus, Altai
made sure that the literal elements of its revamped OSCAR program were no longer
substantially similar to the literal elements of CA’s ADAPTER.
According to CA, the district court erroneously concluded that Altai’s OSCAR 3.5
was not substantially similar to its own ADAPTER program. CA argues that this occurred
because the district court “committed legal error in analyzing [its] claims of copyright
infringement by failing to find that copyright protects expression contained in the nonliteral elements of computer software.” We disagree.
CA argues that, despite Altai’s rewrite of the OSCAR code, the resulting program
remained substantially similar to the structure of its ADAPTER program. As discussed
above, a program’s structure includes its non-literal components such as general flow
charts as well as the more specific organization of inter-modular relationships, parameter
lists, and macros. In addition to these aspects, CA contends that OSCAR 3.5 is also
substantially similar to ADAPTER with respect to the list of services that both
ADAPTER and OSCAR obtain from their respective operating systems. We must decide
whether and to what extent these elements of computer programs are protected by
copyright law. . . .
The Copyright Act affords protection to “original works of authorship fixed in any
tangible medium of expression. . . .” 17 U.S.C. § 102(a). This broad category of
protected “works” includes “literary works,” which are defined by the Act as
works, other than audiovisual works, expressed in words, numbers, or
other verbal or numerical symbols or indicia, regardless of the nature of
the material objects, such as books, periodicals, manuscripts,
phonorecords, film tapes, disks, or cards, in which they are embodied.
17 U.S.C. § 101. While computer programs are not specifically listed as part of the above
statutory definition, the legislative history leaves no doubt that Congress intended them
to be considered literary works.

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The syllogism that follows from the foregoing premises is a powerful one: if the
non-literal structures of literary works are protected by copyright; and if computer
programs are literary works, as we are told by the legislature; then the non-literal structures
of computer programs are protected by copyright. See Whelan (“By analogy to other
literary works, it would thus appear that the copyrights of computer programs can be
infringed even absent copying of the literal elements of the program.”). We have no
reservation in joining the company of those courts that have already ascribed [sic] to this
logic. However, that conclusion does not end our analysis. We must determine the scope
of copyright protection that extends to a computer program’s non-literal structure.
As a caveat, we note that our decision here does not control infringement actions
regarding categorically distinct works, such as certain types of screen displays. These
items represent products of computer programs, rather than the programs themselves,
and fall under the copyright rubric of audiovisual works. If a computer audiovisual
display is copyrighted separately as an audiovisual work, apart from the literary work
that generates it (i.e., the program), the display may be protectable regardless of the
underlying program’s copyright status. Of course, the copyright protection that these
displays enjoy extends only so far as their expression is protectable. See Data East USA,
Inc. v. Epyx, Inc. (9th Cir. 1988). In this case, however, we are concerned not with a
program’s display, but the program itself, and then with only its non-literal components.
In considering the copyrightability of these components, we must refer to venerable
doctrines of copyright law.
1) Idea vs. Expression Dichotomy
It is a fundamental principle of copyright law that a copyright does not protect an
idea, but only the expression of the idea. This axiom of common law has been
incorporated into the governing statute. Section 102(b) of the Act provides:
In no case does copyright protection for 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.
17 U.S.C. § 102(b). See also House Report (“Copyright does not preclude others from
using ideas or information revealed by the author’s work.”).
Congress made no special exception for computer programs. To the contrary, the
legislative history explicitly states that copyright protects computer programs only “to
the extent that they incorporate authorship in programmer’s expression of original ideas,
as distinguished from the ideas themselves.”
Similarly, the National Commission on New Technological Uses of Copyrighted
Works (“CONTU”) established by Congress to survey the issues generated by the
interrelationship of advancing technology and copyright law, see Pub. L. No. 93-573,
§ 201, 88 Stat. 1873 (1974), recommended, inter alia, that the 1976 Copyright Act “be
amended . . . to make it explicit that computer programs, to the extent that they embody
the author’s original creation, are proper subject matter for copyright.” To that end,
Congress adopted CONTU’s suggestions and amended the Copyright Act by adding,
among other things, a provision to 17 U.S.C. § 101 which defined the term “computer
program.” CONTU also “concluded that the idea-expression distinction should be used
to determine which aspects of computer programs are copyrightable.”
Drawing the line between idea and expression is a tricky business. Judge Learned
Hand noted that “[n]obody has ever been able to fix that boundary, and nobody ever can.”
Nichols. Thirty years later his convictions remained firm. “Obviously, no principle can be

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stated as to when an imitator has gone beyond copying the ‘idea,’ and has borrowed its
‘expression,’” Judge Hand concluded. “Decisions must therefore inevitably be ad hoc.”
Peter Pan Fabrics, Inc. v. Martin Weiner Corp. (2d Cir. 1960).
The essentially utilitarian nature of a computer program further complicates the task
of distilling its idea from its expression. In order to describe both computational processes
and abstract ideas, its content “combines creative and technical expression.” The
variations of expression found in purely creative compositions, as opposed to those
contained in utilitarian works, are not directed towards practical application. For example,
a narration of Humpty Dumpty’s demise, which would clearly be a creative composition,
does not serve the same ends as, say, a recipe for scrambled eggs—which is a more
process-oriented text. Thus, compared to aesthetic works, computer programs hover even
more closely to the elusive boundary line described in § 102(b).
The doctrinal starting point in analyses of utilitarian works, is the seminal case of
Baker v. Selden (1879). In Baker, the Supreme Court faced the question of “whether the
exclusive property in a system of bookkeeping can be claimed, under the law of
copyright, by means of a book in which that system is explained?” . . .
The Supreme Court found nothing copyrightable in Selden’s bookkeeping system,
and rejected his infringement claim regarding the ledger sheets. The Court held that:
The fact that the art described in the book by illustrations of lines and
figures which are reproduced in practice in the application of the art,
makes no difference. Those illustrations are the mere language
employed by the author to convey his ideas more clearly. Had he used
words of description instead of diagrams (which merely stand in the
place of words), there could not be the slightest doubt that others,
applying the art to practical use, might lawfully draw the lines and
diagrams which were in the author’s mind, and which he thus described
by words in his book.
The copyright of a work on mathematical science cannot give to
the author an exclusive right to the methods of operation which he
propounds, or to the diagrams which he employs to explain them, so as
to prevent an engineer from using them whenever occasion requires.
To the extent that an accounting text and a computer program are both “a set of
statements or instructions . . . to bring about a certain result,” 17 U.S.C. § 101, they are
roughly analogous. In the former case, the processes are ultimately conducted by human
agency; in the latter, by electronic means. In either case, as already stated, the processes
themselves are not protectable. But the holding in Baker goes farther. The Court
concluded that those aspects of a work, which “must necessarily be used as incident to”
the idea, system or process that the work describes, are also not copyrightable. Selden’s
ledger sheets, therefore, enjoyed no copyright protection because they were “necessary
incidents to” the system of accounting that he described. From this reasoning, we
conclude that those elements of a computer program that are necessarily incidental to its
function are similarly unprotectable.
While Baker v. Selden provides a sound analytical foundation, it offers scant
guidance on how to separate idea or process from expression, and moreover, on how to
further distinguish protectable expression from that expression which “must necessarily
be used as incident to” the work’s underlying concept. In the context of computer
programs, the Third Circuit’s noted decision in Whelan has, thus far, been the most
thoughtful attempt to accomplish these ends.

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The court in Whelan faced substantially the same problem as is presented by this case.
There, the defendant was accused of making off with the non-literal structure of the
plaintiff’s copyrighted dental lab management program, and employing it to create its own
competitive version. In assessing whether there had been an infringement, the court had to
determine which aspects of the programs involved were ideas, and which were expression.
In separating the two, the court settled upon the following conceptual approach:
The line between idea and expression may be drawn with reference to the
end sought to be achieved by the work in question. In other words, the
purpose or function of a utilitarian work would be the work’s idea, and
everything that is not necessary to that purpose or function would be part
of the expression of the idea. . . . Where there are various means of
achieving the desired purpose, then the particular means chosen is not
necessary to the purpose; hence, there is expression, not idea.
[Whelan]. The “idea” of the program at issue in Whelan was identified by the court as
simply “the efficient management of a dental laboratory.”
So far, in the courts, the Whelan rule has received a mixed reception. . . .
Whelan has fared even more poorly in the academic community, where its standard
for distinguishing idea from expression has been widely criticized for being conceptually
overbroad.
The leading commentator in the field has stated that “[t]he crucial flaw in
[Whelan’s] reasoning is that it assumes that only one ‘idea,’ in copyright law terms,
underlies any computer program, and that once a separable idea can be identified,
everything else must be expression.” 3 Nimmer § 13.03(F). This criticism focuses not
upon the program’s ultimate purpose but upon the reality of its structural design. As we
have already noted, a computer program’s ultimate function or purpose is the composite
result of interacting subroutines. Since each subroutine is itself a program, and thus, may
be said to have its own “idea,” Whelan’s general formulation that a program’s overall
purpose equates with the program’s idea is descriptively inadequate.
Accordingly, we think that Judge Pratt wisely declined to follow Whelan. . . .
Rightly, the district court found Whelan’s rationale suspect because it is so closely tied
to what can now be seen—with the passage of time—as the opinion’s somewhat outdated
appreciation of computer science.
2) Substantial Similarity Test for Computer Program Structure: AbstractionFiltration-Comparison
We think that Whelan’s approach to separating idea from expression in computer
programs relies too heavily on metaphysical distinctions and does not place enough
emphasis on practical considerations. As the cases that we shall discuss demonstrate, a
satisfactory answer to this problem cannot be reached by resorting, a priori, to
philosophical first principals [sic].
As discussed herein, we think that district courts would be well-advised to
undertake a three-step procedure, based on the abstractions test utilized by the district
court, in order to determine whether the non-literal elements of two or more computer
programs are substantially similar. This approach breaks no new ground; rather, it draws
on such familiar copyright doctrines as merger, scènes à faire, and public domain. In
taking this approach, however, we are cognizant that computer technology is a dynamic
field which can quickly outpace judicial decisionmaking. Thus, in cases where the
technology in question does not allow for a literal application of the procedure we outline
below, our opinion should not be read to foreclose the district courts of our circuit from

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utilizing a modified version.
In ascertaining substantial similarity under this approach, a court would first break
down the allegedly infringed program into its constituent structural parts. Then, by
examining each of these parts for such things as incorporated ideas, expression that is
necessarily incidental to those ideas, and elements that are taken from the public domain,
a court would then be able to sift out all non-protectable material. Left with a kernel, or
possible kernels, of creative expression after following this process of elimination, the
court’s last step would be to compare this material with the structure of an allegedly
infringing program. The result of this comparison will determine whether the protectable
elements of the programs at issue are substantially similar so as to warrant a finding of
infringement. It will be helpful to elaborate a bit further.
Step One: Abstraction
As the district court appreciated, the theoretic framework for analyzing substantial
similarity expounded by Learned Hand in the Nichols case is helpful in the present
context. In Nichols, we enunciated what has now become known as the “abstractions”
test for separating idea from expression:
Upon any work . . . a great number of patterns of increasing generality
will fit equally well, as more and more of the incident is left out. The last
may perhaps be no more than the most general statement of what the
[work] is about, and at times might consist only of its title; but there is a
point in this series of abstractions where they are no longer protected,
since otherwise the [author] could prevent the use of his “ideas,” to which,
apart from their expression, his property is never extended. Nichols.
While the abstractions test was originally applied in relation to literary works such as
novels and plays, it is adaptable to computer programs. In contrast to the Whelan
approach, the abstractions test “implicitly recognizes that any given work may consist of
a mixture of numerous ideas and expressions.” 3 Nimmer § 13.03[F].
As applied to computer programs, the abstractions test will comprise the first step
in the examination for substantial similarity. Initially, in a manner that resembles reverse
engineering on a theoretical plane, a court should dissect the allegedly copied program’s
structure and isolate each level of abstraction contained within it. This process begins with
the code and ends with an articulation of the program’s ultimate function. Along the way,
it is necessary essentially to retrace and map each of the designer’s steps—in the opposite
order in which they were taken during the program’s creation.
Step Two: Filtration
Once the program’s abstraction levels have been discovered, the substantial
similarity inquiry moves from the conceptual to the concrete. Professor Nimmer
suggests, and we endorse, a “successive filtering method” for separating protectable
expression from non-protectable material. See generally 3 Nimmer § 13.03[F]. This
process entails examining the structural components at each level of abstraction to
determine whether their particular inclusion at that level was “idea” or was dictated by
considerations of efficiency, so as to be necessarily incidental to that idea; required by
factors external to the program itself; or taken from the public domain and hence is
nonprotectable expression. See also Kretschmer (arguing that program features dictated
by market externalities or efficiency concerns are unprotectable). The structure of any
given program may reflect some, all, or none of these considerations. Each case requires
its own fact specific investigation.

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Strictly speaking, this filtration serves “the purpose of defining the scope of plaintiff’s copyright.” Brown Bag Software v. Symantec Corp. (9th Cir.) (endorsing “analytic
dissection” of computer programs in order to isolate protectable expression). By applying
well developed doctrines of copyright law, it may ultimately leave behind a “core of
protectable material.” 3 Nimmer § 13.03[F][5]. Further explication of this second step
may be helpful.
(a) Elements Dictated by Efficiency
The portion of Baker v. Selden, discussed earlier, which denies copyright protection
to expression necessarily incidental to the idea being expressed, appears to be the cornerstone for what has developed into the doctrine of merger. See Morrissey v. Proctor &
Gamble Co. (1st Cir. 1967) (relying on Baker for the proposition that expression embodying
the rules of a sweepstakes contest was inseparable from the idea of the contest itself, and
therefore were not protectable by copyright); see also Digital Communications. The
doctrine’s underlying principle is that “[w]hen there is essentially only one way to express
an idea, the idea and its expression are inseparable and copyright is no bar to copying that
expression.” Concrete Machinery Co. v. Classic Lawn Ornaments, Inc. (1st Cir. 1988).
Under these circumstances, the expression is said to have “merged” with the idea itself. In
order not to confer a monopoly of the idea upon the copyright owner, such expression should
not be protected. See Herbert Rosenthal Jewelry Corp. v. Kalpakian (9th Cir. 1971).
CONTU recognized the applicability of the merger doctrine to computer programs.
In its report to Congress it stated that:
[C]opyrighted language may be copied without infringing when there is
but a limited number of ways to express a given idea. . . . In the computer
context, this means that when specific instructions, even though previously copyrighted, are the only and essential means of accomplishing a
given task, their later use by another will not amount to infringement.
CONTU Report.
Furthermore, when one considers the fact that programmers generally strive to
create programs “that meet the user’s needs in the most efficient manner,” Menell, the
applicability of the merger doctrine to computer programs becomes compelling. In the
context of computer program design, the concept of efficiency is akin to deriving the most
concise logical proof or formulating the most succinct mathematical computation. Thus,
the more efficient a set of modules are, the more closely they approximate the idea or
process embodied in that particular aspect of the program’s structure.
While, hypothetically, there might be a myriad of ways in which a programmer
may effectuate certain functions within a program,—i.e., express the idea embodied in a
given subroutine—efficiency concerns may so narrow the practical range of choice as to
make only one or two forms of expression workable options. . . . It follows that in order
to determine whether the merger doctrine precludes copyright protection to an aspect of
a program’s structure that is so oriented, a court must inquire “whether the use of this
particular set of modules is necessary efficiently to implement that part of the program’s
process” being implemented. If the answer is yes, then the expression represented by the
programmer’s choice of a specific module or group of modules has merged with their
underlying idea and is unprotected.
Another justification for linking structural economy with the application of the
merger doctrine stems from a program’s essentially utilitarian nature and the competitive
forces that exist in the software marketplace. See Kretschmer. Working in tandem, these
factors give rise to a problem of proof which merger helps to eliminate.

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Efficiency is an industry-wide goal. Since, as we have already noted, there may be
only a limited number of efficient implementations for any given program task, it is quite
possible that multiple programmers, working independently, will design the identical
method employed in the allegedly infringed work. Of course, if this is the case, there is
no copyright infringement.
Under these circumstances, the fact that two programs contain the same efficient
structure may as likely lead to an inference of independent creation as it does to one of
copying. Thus, since evidence of similarly efficient structure is not particularly probative
of copying, it should be disregarded in the overall substantial similarity analysis. See 3
Nimmer § 13.03[F][2].
[The court summarized other cases that dealt with the issue.] We agree with the
approach taken in these decisions, and conclude that application of the merger doctrine
in this setting is an effective way to eliminate non-protectable expression contained in
computer programs.
(b) Elements Dictated By External Factors
We have stated that where “it is virtually impossible to write about a particular
historical era or fictional theme without employing certain ‘stock’ or standard literary
devices,” such expression is not copyrightable. Hoehling v. Universal City Studios, Inc.
(2d Cir. 1980). For example, the Hoehling case was an infringement suit stemming from
several works on the Hindenburg disaster. There we concluded that similarities in
representations of German beer halls, scenes depicting German greetings such as “Heil
Hitler,” or the singing of certain German songs would not lead to a finding of infringement because they were “‘indispensable, or at least standard, in the treatment of’” life in
Nazi Germany. This is known as the scènes à faire doctrine, and like “merger,” it has its
analogous application to computer programs.
Professor Nimmer points out that “in many instances it is virtually impossible to
write a program to perform particular functions in a specific computing environment
without employing standard techniques.” 3 Nimmer § 13.03[F][3]. This is a result of the
fact that a programmer’s freedom of design choice is often circumscribed by extrinsic
considerations such as
(1) the mechanical specifications of the computer on which a particular
program is intended to run;
(2) compatibility requirements of other programs with which a program
is designed to operate in conjunction;
(3) computer manufacturers’ design standards;
(4) demands of the industry being serviced; and
(5) widely accepted programming practices within the computer
industry.
Courts have already considered some of these factors in denying copyright
protection to various elements of computer programs. In the Plains Cotton case, the Fifth
Circuit refused to reverse the district court’s denial of a preliminary injunction against
an alleged program infringer because, in part, “many of the similarities between the . . .
programs [were] dictated by the externalities of the cotton market.”
In Manufacturers Technologies, the district court noted that the program’s method
of screen navigation “is influenced by the type of hardware that the software is designed
to be used on.” Because, in part, “the functioning of the hardware package impact[ed]
and constrain[ed] the type of navigational tools used in plaintiff’s screen displays,” the
court denied copyright protection to that aspect of the program. [C]f. Data East USA

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(reversing a district court’s finding of audiovisual work infringement because, inter alia,
“the use of the Commodore computer for a karate game intended for home consumption
is subject to various constraints inherent in the use of that computer”). Finally, the district
court in Q-Co Industries rested its holding on what, perhaps, most closely approximates
a traditional scènes à faire rationale. There, the court denied copyright protection to four
program modules employed in a teleprompter program. This decision was ultimately
based upon the court’s finding that “the same modules would be an inherent part of any
prompting program.”
Building upon this existing case law, we conclude that a court must also examine
the structural content of an allegedly infringed program for elements that might have
been dictated by external factors.
(c) Elements taken From the Public Domain
Closely related to the non-protectability of scènes à faire, is material found in the
public domain. Such material is free for the taking and cannot be appropriated by a single
author even though it is included in a copyrighted work. We see no reason to make an
exception to this rule for elements of a computer program that have entered the public
domain by virtue of freely accessible program exchanges and the like. See 3 Nimmer
§ 13.03[F][4]; see also Brown Bag Software (affirming the district court’s finding that
“‘[p]laintiffs may not claim copyright protection of an . . . expression that is, if not
standard, then commonplace in the computer software industry.’”). Thus, a court must
also filter out this material from the allegedly infringed program before it makes the final
inquiry in its substantial similarity analysis.
Step Three: Comparison
The third and final step of the test for substantial similarity that we believe
appropriate for non-literal program components entails a comparison. Once a court has
sifted out all elements of the allegedly infringed program which are “ideas” or are dictated
by efficiency or external factors, or taken from the public domain, there may remain a
core of protectable expression. In terms of a work’s copyright value, this is the golden
nugget. See Brown Bag Software. At this point, the court’s substantial similarity inquiry
focuses on whether the defendant copied any aspect of this protected expression, as well
as an assessment of the copied portion’s relative importance with respect to the plaintiff’s
overall program. See 3 Nimmer § 13.03[F][5]; Data East USA (“To determine whether
similarities result from unprotectable expression, analytic dissection of similarities may
be performed. If . . . all similarities in expression arise from use of common ideas, then
no substantial similarity can be found.”).
3) Policy Considerations
We are satisfied that the three step approach we have just outlined not only comports
with, but advances the constitutional policies underlying the Copyright Act. Since any
method that tries to distinguish idea from expression ultimately impacts on the scope of
copyright protection afforded to a particular type of work, “the line [it draws] must be a
pragmatic one, which also keeps in consideration ‘the preservation of the balance between
competition and protection. . . .’” Apple Computer.
CA and some amici argue against the type of approach that we have set forth on
the grounds that it will be a disincentive for future computer program research and development. At bottom, they claim that if programmers are not guaranteed broad copyright
protection for their work, they will not invest the extensive time, energy and funds
required to design and improve program structures. While they have a point, their argument cannot carry the day. The interest of the copyright law is not in simply conferring

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a monopoly on industrious persons, but in advancing the public welfare through rewarding artistic creativity, in a manner that permits the free use and development of nonprotectable ideas and processes.
In this respect, our conclusion is informed by Justice Stewart’s concise discussion
of the principles that correctly govern the adaptation of the copyright law to new
circumstances. In Twentieth Century Music Corp. v. Aiken, he wrote:
The limited scope of the copyright holder’s statutory monopoly, like the
limited copyright duration required by the Constitution, reflects a balance
of competing claims upon the public interest: Creative work is to be
encouraged and rewarded, but private motivation must ultimately serve
the cause of promoting broad public availability of literature, music, and
the other arts. The immediate effect of our copyright law is to secure a
fair return for an “author’s” creative labor. But the ultimate aim is, by this
incentive, to stimulate artistic creativity for the general public good. . . .
When technological change has rendered its literal terms ambiguous, the
Copyright Act must be construed in light of this basic purpose.
Recently, the Supreme Court has emphatically reiterated that “[t]he primary
objective of copyright is not to reward the labor of authors. . . .” Feist Publications, Inc.
v. Rural Tel. Serv. Co. (1991). . . .
Feist teaches that substantial effort alone cannot confer copyright status on an
otherwise uncopyrightable work. As we have discussed, despite the fact that significant
labor and expense often goes into computer program flow-charting and debugging, that
process does not always result in inherently protectable expression. Thus, Feist implicitly
undercuts the Whelan rationale, “which allow[ed] copyright protection beyond the literal
computer code . . . [in order to] provide the proper incentive for programmers by
protecting their most valuable efforts. . . .” Whelan. We note that Whelan was decided
prior to Feist when the “sweat of the brow” doctrine still had vitality.
Furthermore, we are unpersuaded that the test we approve today will lead to the
dire consequences for the computer program industry that plaintiff and some amici
predict. To the contrary, serious students of the industry have been highly critical of the
sweeping scope of copyright protection engendered by the Whelan rule, in that it
“enables first comers to ‘lock up’ basic programming techniques as implemented in
programs to perform particular tasks.” Menell; see also Spivack (Whelan “results in an
inhibition of creation by virtue of the copyright owner’s quasi-monopoly power”).
To be frank, the exact contours of copyright protection for non-literal program
structure are not completely clear. We trust that as future cases are decided, those limits
will become better defined. Indeed, it may well be that the Copyright Act serves as a
relatively weak barrier against public access to the theoretical interstices behind a
program’s source and object codes. This results from the hybrid nature of a computer
program, which, while it is literary expression, is also a highly functional, utilitarian
component in the larger process of computing.
Generally, we think that copyright registration—with its indiscriminating availability—is not ideally suited to deal with the highly dynamic technology of computer
science. Thus far, many of the decisions in this area reflect the courts’ attempt to fit the
proverbial square peg in a round hole. The district court and at least one commentator
have suggested that patent registration, with its exacting up-front novelty and nonobviousness requirements, might be the more appropriate rubric of protection for
intellectual property of this kind. . . .

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In the meantime, Congress has made clear that computer programs are literary
works entitled to copyright protection. Of course, we shall abide by these instructions,
but in so doing we must not impair the overall integrity of copyright law. While incentive
based arguments in favor of broad copyright protection are perhaps attractive from a pure
policy perspective, see Lotus Dev. Corp., ultimately, they have a corrosive effect on
certain fundamental tenets of copyright doctrine. If the test we have outlined results in
narrowing the scope of protection, as we expect it will, that result flows from applying,
in accordance with Congressional intent, long-standing principles of copyright law to
computer programs. Of course, our decision is also informed by our concern that these
fundamental principles remain undistorted.
B. The District Court Decision
At the outset, we must address CA’s claim that the district court erred by relying
too heavily on the court appointed expert’s “personal opinions on the factual and legal
issues before the court.”
1) Use of Expert Evidence in Determining Substantial Similarity Between
Computer Programs
Pursuant to Fed.R.Evid. 706, and with the consent of both Altai and CA, Judge
Pratt appointed and relied upon Dr. Randall Davis of the Massachusetts Institute of
Technology as the court’s own expert witness on the issue of substantial similarity. Dr.
Davis submitted a comprehensive written report that analyzed the various aspects of the
computer programs at issue and evaluated the parties’ expert evidence. At trial, Dr. Davis
was extensively cross-examined by both CA and Altai.
The well-established general rule in this circuit has been to limit the use of expert
opinion in determining whether works at issue are substantially similar. As a threshold
matter, expert testimony may be used to assist the fact finder in ascertaining whether the
defendant had copied any part of the plaintiff’s work. See Arnstein v. Porter (2d Cir. 1946).
To this end, “the two works are to be compared in their entirety . . . [and] in making such
comparison resort may properly be made to expert analysis. . . .” 3 Nimmer § 13.03[E][2].
However, once some amount of copying has been established, it remains solely for
the trier of fact to determine whether the copying was “illicit,” that is to say, whether the
“defendant took from plaintiff’s works so much of what is pleasing to [lay observers]
who comprise the audience for whom such [works are] composed, that defendant
wrongfully appropriated something which belongs to the plaintiff.” Arnstein. Since the
test for illicit copying is based upon the response of ordinary lay observers, expert
testimony is thus “irrelevant” and not permitted. We have subsequently described this
method of inquiry as “merely an alternative way of formulating the issue of substantial
similarity.” Ideal Toy Corp. v. Fab-Lu Ltd. (Inc.) (2d Cir. 1966).
Historically, Arnstein’s ordinary observer standard had its roots in “an attempt to
apply the ‘reasonable person’ doctrine as found in other areas of the law to copyright.” 3
Nimmer § 13.03[E][2]. That approach may well have served its purpose when the material
under scrutiny was limited to art forms readily comprehensible and generally familiar to
the average lay person. However, in considering the extension of the rule to the present
case, we are reminded of Holmes’ admonition that, “[t]he life of the law has not been logic:
it has been experience.” O.W. Holmes, Jr., THE COMMON LAW 1 (1881).
Thus, in deciding the limits to which expert opinion may be employed in ascertaining the substantial similarity of computer programs, we cannot disregard the highly
complicated and technical subject matter at the heart of these claims. Rather, we recognize
the reality that computer programs are likely to be somewhat impenetrable by lay

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observers—whether they be judges or juries—and, thus, seem to fall outside the category
of works contemplated by those who engineered the Arnstein test. Cf. Dawson v. Hinshaw
Music Inc. (4th Cir.) (“departure from the lay characterization is warranted only where the
intended audience possesses ‘specialized expertise’”).
In making its finding on substantial similarity with respect to computer programs,
we believe that the trier of fact need not be limited by the strictures of its own lay
perspective. Rather, we leave it to the discretion of the district court to decide to what
extent, if any, expert opinion, regarding the highly technical nature of computer programs,
is warranted in a given case. In so holding, we do not intend to disturb the traditional role
of lay observers in judging substantial similarity in copyright cases that involve the
aesthetic arts, such as music, visual works or literature. In this case, Dr. Davis’ opinion
was instrumental in dismantling the intricacies of computer science so that the court could
formulate and apply an appropriate rule of law. While Dr. Davis’ report and testimony
undoubtedly shed valuable light on the subject matter of the litigation, Judge Pratt
remained, in the final analysis, the trier of fact. The district court’s use of the expert’s
assistance, in the context of this case, was entirely appropriate.
2) Evidentiary Analysis
The district court had to determine whether Altai’s OSCAR 3.5 program was
substantially similar to CA’s ADAPTER. We note that Judge Pratt’s method of analysis
effectively served as a road map for our own, with one exception—Judge Pratt filtered
out the non-copyrightable aspects of OSCAR 3.5 rather than those found in ADAPTER,
the allegedly infringed program. We think that our approach—i.e., filtering out the
unprotected aspects of an allegedly infringed program and then comparing the end
product to the structure of the suspect program—is preferable, and therefore believe that
district courts should proceed in this manner in future cases.
We opt for this strategy because, in some cases, the defendant’s program structure
might contain protectable expression and/or other elements that are not found in the plaintiff’s program. Since it is extraneous to the allegedly copied work, this material would have
no bearing on any potential substantial similarity between the two programs. Thus, its
filtration would be wasteful and unnecessarily time consuming. Furthermore, by focusing
the analysis on the infringing rather than on the infringed material, a court may mistakenly
place too little emphasis on a quantitatively small misappropriation which is, in reality, a
qualitatively vital aspect of the plaintiff’s protectable expression.
The fact that the district court’s analysis proceeded in the reverse order, however,
had no material impact on the outcome of this case. Since Judge Pratt determined that
OSCAR effectively contained no protectable expression whatsoever, the most serious
charge that can be levelled against him is that he was overly thorough in his examination.
The district court took the first step in the analysis set forth in this opinion when it
separated the program by levels of abstraction. The district court stated:
As applied to computer software programs, this abstractions test would
progress in order of “increasing generality” from object code, to source
code, to parameter lists, to services required, to general outline. In discussing the particular similarities, therefore, we shall focus on these levels.
While the facts of a different case might require that a district court draw a more
particularized blueprint of a program’s overall structure, this description is a workable
one for the case at hand.
Moving to the district court’s evaluation of OSCAR 3.5’s structural components, we
agree with Judge Pratt’s systematic exclusion of non-protectable expression. With respect

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to code, the district court observed that after the rewrite of OSCAR 3.4 to OSCAR 3.5,
“there remained virtually no lines of code that were identical to ADAPTER.” Accordingly,
the court found that the code “present[ed] no similarity at all.”
Next, Judge Pratt addressed the issue of similarity between the two programs’
parameter lists and macros. He concluded that, viewing the conflicting evidence most
favorably to CA, it demonstrated that “only a few of the lists and macros were similar to
protected elements in ADAPTER; the others were either in the public domain or dictated
by the functional demands of the program.” As discussed above, functional elements and
elements taken from the public domain do not qualify for copyright protection. With
respect to the few remaining parameter lists and macros, the district court could
reasonably conclude that they did not warrant a finding of infringement given their
relative contribution to the overall program. In any event, the district court reasonably
found that, for lack of persuasive evidence, CA failed to meet its burden of proof on
whether the macros and parameter lists at issue were substantially similar.
The district court also found that the overlap exhibited between the list of services
required for both ADAPTER and OSCAR 3.5 was “determined by the demands of the
operating system and of the applications program to which it [was] to be linked through
ADAPTER or OSCAR. . . .” In other words, this aspect of the program’s structure was
dictated by the nature of other programs with which it was designed to interact and, thus,
is not protected by copyright.
Finally, in his infringement analysis, Judge Pratt accorded no weight to the
similarities between the two programs’ organizational charts, “because [the charts were]
so simple and obvious to anyone exposed to the operation of the program[s].” CA argues
that the district court’s action in this regard “is not consistent with copyright law”—that
“obvious” expression is protected, and that the district court erroneously failed to realize
this. However, to say that elements of a work are “obvious,” in the manner in which the
district court used the word, is to say that they “follow naturally from the work’s theme
rather than from the author’s creativity.” 3 Nimmer § 13.03[F][3]. This is but one
formulation of the scènes à faire doctrine, which we have already endorsed as a means of
weeding out unprotectable expression. . . .
CONCLUSION
In adopting the above three step analysis for substantial similarity between the
non-literal elements of computer programs, we seek to insure [sic] two things: (1) that
programmers may receive appropriate copyright protection for innovative utilitarian
works containing expression; and (2) that non-protectable technical expression remains
in the public domain for others to use freely as building blocks in their own work. At first
blush, it may seem counter-intuitive that someone who has benefitted to some degree
from illicitly obtained material can emerge from an infringement suit relatively
unscathed. However, so long as the appropriated material consists of non-protectable
expression, “[t]his result is neither unfair nor unfortunate. It is the means by which
copyright advances the progress of science and art.” Feist.
Furthermore, we underscore that so long as trade secret law is employed in a
manner that does not encroach upon the exclusive domain of the Copyright Act, it is an
appropriate means by which to secure compensation for software espionage.
Accordingly, we affirm the judgment of the district court in part; vacate in part;
and remand for further proceedings. The parties shall bear their own costs of appeal,
including the petition for rehearing.

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Note: Scènes à Faire
As you saw in the flow chart after chapter 10, copying “scènes à faire” is not
infringement. “Scènes à faire” is French for “scenes that must be done,” and refers to
elements that have become standard for treating a particular topic or creating within a
style or genre. Courts do not always use the term “scènes à faire” to describe this
material; they sometimes describe it as too “common,” “trite,” “stereotypical,” “clichéd,”
“stock,” or “hackneyed” to be protectable. Whatever the terminology, anyone can use
this material without infringing copyright, even if it would otherwise qualify as original,
creative expression.
In Computer Associates the court excluded “scènes à faire” in computer programming from copyright protection. What are some examples of scènes à faire in other art
forms? The image gives an example of scènes à
faire in a copyright case about country music
lyrics. In movies, courts have explained that
“parties, alcohol, co-eds, and wild behavior are
natural elements in a story about a college
fraternity,” “elements such as drunks, prostitutes,
vermin and derelict cars would appear in any
realistic work about the work of policemen in the
South Bronx,” and “[g]etting drunk, spending a
‘one-nighter’ with someone you just met, waking
up disoriented the next morning at the
individual’s house or apartment, and putting on
the clothes worn the night before are also plot
devices that are necessary to a walk of shame.” As
you can tell from these examples, as our culture
(and the Bronx real estate market, for that matter)
changes, scènes à faire may also evolve. Bonus
question: what are scènes à faire for your favorite
type of movie, or style of music? Seriously. Try to
list them.

Questions:
1.) Having read the case, what is your answer—do we have a separate law of copyright
for software?
2.) How would you describe the extent of copyright protection for software after this
decision? Copying Windows 7, bit for bit, is illegal. What about writing a competing
operating system that borrows all of Windows 7’s ideas about how to present and open
programs, retrieve information and so on, but does not copy the code. Is that infringing?
3.) Look back at problem 12-1 d.). Has Larry infringed Sergey’s copyright?

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3.) Copyright in Characters

Anderson v. Stallone

11 U.S.P.Q.2d 1161 (C.D. Cal. 1989)
WILLIAM D. KELLER, District Judge.
Factual Background
The movies Rocky I, II, and III were extremely successful motion pictures.
Sylvester Stallone wrote each script and played the role of Rocky Balboa, the dominant
character in each of the movies. In May of 1982, while on a promotional tour for the
movie Rocky III, Stallone informed members of the press of his ideas for Rocky IV.
Although Stallone’s description of his ideas would vary slightly in each of the press
conferences, he would generally describe his ideas as follows:
I’d do it [Rocky IV] if Rocky himself could step out a bit. Maybe tackle
world problems. So what would happen, say, if Russia allowed her
boxers to enter the professional ranks? Say Rocky is the United States’
representative and the White House wants him to fight with the Russians
before the Olympics. It’s in Russia with everything against him. It’s a
giant stadium in Moscow and everything is Russian Red. It’s a fight of
astounding proportions with 50 monitors sent to 50 countries. It’s the
World Cup—a war between 2 countries.
In June of 1982, after viewing the movie Rocky III, Timothy Anderson wrote a
thirty-one page treatment entitled “Rocky IV” that he hoped would be used by Stallone
and MGM as a sequel to Rocky III. The treatment incorporated the characters created by
Stallone in his prior movies and cited Stallone as a co-author. In October of 1982, Mr.
Anderson met with Art Linkletter, who was a member of MGM’s board of directors. Mr.
Linkletter set up a meeting on October 11, 1982, between Mr. Anderson and Mr. Fields,
who was president of MGM at the time. Mr. Linkletter was also present at this October 11,
1982 meeting. During the meeting, the parties discussed the possibility that plaintiff’s
treatment would be used by defendants as the script for Rocky IV. At the suggestion of Mr.
Fields, the plaintiff, who is a lawyer and was accompanied by a lawyer at the meeting,
signed a release that purported to relieve MGM from liability stemming from use of the
treatment. Plaintiff alleges that Mr. Fields told him and his attorney that “if they [MGM &
Stallone] use his stuff [Anderson’s treatment] it will be big money, big bucks for Tim.”
On April 22, 1984, Anderson’s attorney wrote MGM requesting compensation for
the alleged use of his treatment in the forthcoming Rocky IV movie. On July 12, 1984,
Stallone described his plans for the Rocky IV script on the Today Show before a national
television audience. Anderson, in his deposition, states that his parents and friends called
him to tell him that Stallone was telling “his story” on television. In a diary entry of July
12, 1984, Anderson noted that Stallone “explained my story” on national television.
Stallone completed his Rocky IV script in October of 1984. Rocky IV was released
in November of 1985. The complaint in this action was filed on January 29, 1987.
1. Visually Depicted Characters Can Be Granted Copyright Protection
The precise legal standard this Court should apply in determining when a character
may be afforded copyright protection is fraught with uncertainty. The Second Circuit has

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followed Judge Learned Hand’s opinion in Nichols v. Universal Pictures, Judge Hand set
forth a test, simple in theory but elusive in application, to determine when a character
should be granted copyright protection. Essentially, under this test, copyright protection
is granted to a character if it is developed with enough specificity so as to constitute
protectable expression.
This circuit originally created a more rigorous test for granting copyright protection
to characters. In Warner Bros. Pictures, Inc. v. Columbia Broadcasting System, Inc.,
(hereinafter the “Sam Spade” opinion) this circuit held that the literary character Sam
Spade was not copyrightable, opining that a character could not be granted copyright
protection unless it “constituted the story being told.” The Sam Spade case has not been
explicitly overruled by this circuit and its requirement that a character “constitute the story
being told” appears to greatly circumscribe the protection of characters in this circuit.
Subsequent decisions in the Ninth Circuit cast doubt on the reasoning and
implicitly limit the holding of the Sam Spade case. In Walt Disney Productions v. Air
Pirates, this circuit held that several Disney comic characters were protected by copyright. In doing so the Court of Appeals reasoned that because “comic book characters . . .
are distinguishable from literary characters, the Warner Bros language does not preclude
protection of Disney’s characters.” Air Pirates can be interpreted as either attempting to
harmonize granting copyright protection to graphic characters with the “story being told”
test enunciated in the Sam Spade case or narrowing the “story being told” test to
characters in literary works. If Air Pirates is construed as holding that the graphic
characters in question constituted the story being told, it does little to alter the Sam Spade
opinion. However, it is equally as plausible to interpret Air Pirates as applying a less
stringent test for protectability of graphic characters.
Professor Nimmer has adopted the latter reading as he interprets Air Pirates as
limiting the story being told requirement to word portraits. Further, Professor Nimmer
finds that the reasoning of the Sam Spade case is undermined by the Air Pirates opinion,
even as it relates to word portraits. This is true because the use of a less stringent test for
protection of characters in the graphic medium casts doubt on the vitality of the more
stringent story being told test for graphic characters. As a practical matter, a graphically
depicted character is much more likely than a literary character to be fleshed out in
sufficient detail so as to warrant copyright protection. But this fact does not warrant the
creation of separate analytical paradigms for protection of characters in the two mediums.
This circuit’s most recent decision on the issue of copyrightability of characters,
Olson v. National Broadcasting Corp. (9th Cir. 1988) does little to clarify the uncertainties
in this circuit as to how the Air Pirates decision effects the continued viability of the Sam
Spade test. In Olson, the Court of Appeals cited with approval the Sam Spade “story being
told test” and declined to characterize this language as dicta. The Court then cited Air
Pirates along with Second Circuit precedent and “recognize[d] that cases subsequent to
Warner Bros [Sam Spade] have allowed copyright protection for characters who are
especially distinctive.” Olson also stated definitively that “copyright protection may be
afforded to characters visually depicted in a television series or in a movie.” But later in
the opinion, the court in Olson distanced itself from the character delineation test that
these cases employed, referring to it as “the more lenient standards adopted elsewhere.”
In an implicit acknowledgment of the unsettled state of the law, in considering the
characters at issue in Olson, the circuit court evaluates the characters in the suit under
both tests.

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2. The Rocky Characters Are Entitled To Copyright Protection as a Matter of Law
Olson’s evaluation of literary characters is clearly distinguishable from the visually
depicted characters of the first three Rocky movies for which the defendant seeks protection here. Thus, the more restrictive “story being told test” is inapplicable to the facts
of this case. However, out of an abundance of caution this Court will determine the
protectability of the Rocky characters under both tests. As shown below, the Rocky
characters are protected from bodily appropriation under either standard.
The Rocky characters are one of the most highly delineated group of characters in
modern American cinema. The physical and emotional characteristics of Rocky Balboa
and the other characters were set forth in tremendous detail in the three Rocky movies
before Anderson appropriated the characters for his treatment. The interrelationships and
development of Rocky, Adrian, Apollo Creed, Clubber Lang, and Paulie are central to all
three movies. Rocky Balboa is such a highly delineated character that his name is the
title of all four of the Rocky movies and his character has become identified with specific
character traits ranging from his speaking mannerisms to his physical characteristics.
This Court has no difficulty ruling as a matter of law that the Rocky characters are
delineated so extensively that they are protected from bodily appropriation when taken
as a group and transposed into a sequel by another author. Plaintiff has not and cannot
put before this Court any evidence to rebut the defendants’ showing that Rocky
characters are so highly delineated that they warrant copyright protection.
Plaintiff’s unsupported assertions that Rocky is merely a stock character, made in
the face of voluminous evidence that the Rocky characters are copyrightable, do not bar
this Court from granting summary judgment on this issue. If any group of movie
characters is protected by copyright, surely the Rocky characters are protected from
bodily appropriation into a sequel which merely builds on the relationships and
characteristics which these characters developed in the first three Rocky movies. No
reasonable jury could find otherwise.
This Court need not and does not reach the issue of whether any single character
alone, apart from Rocky, is delineated with enough specificity so as to garner copyright
protection. Nor does the Court reach the issue of whether these characters are protected
from less than bodily appropriation. See 1 M. Nimmer, § 2.12 (copyrightability of
characters is “more properly framed as relating to the degree of substantial similarity
required to constitute infringement rather than in terms of copyrightability per se”).
This Court also finds that the Rocky characters were so highly developed and central
to the three movies made before Anderson’s treatment that they “constituted the story being
told.” All three Rocky movies focused on the development and relationships of the various
characters. The movies did not revolve around intricate plots or story lines. Instead, the
focus of these movies was the development of the Rocky characters. The same evidence
which supports the finding of delineation above is so extensive that it also warrants a
finding that the Rocky characters—Rocky, Adrian, Apollo Creed, Clubber Lang, and
Paulie—“constituted the story being told” in the first three Rocky movies.
3. Anderson’s Work is An Unauthorized Derivative Work
Under 17 U.S.C. section 106(2), the holder of a copyright has the exclusive right
to prepare derivative works based upon his copyrighted work. In this circuit a work is
derivative “only if it would be considered an infringing work if the material which it had
derived from a prior work had been taken without the consent of the copyright proprietor
of the prior work.” Litchfield v. Spielberg (9th Cir. 1984).This Court must now examine

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whether Anderson’s treatment is an unauthorized derivative work under this standard.
Usually a court would be required to undertake the extensive comparisons under the
Krofft substantial similarity test to determine whether Anderson’s work is a derivative work.
However, in this case, Anderson has bodily appropriated the Rocky characters in his treatment. This Court need not determine whether the characters in Anderson’s treatment are
substantially similar to Stallone’s characters, as it is uncontroverted that the characters were
lifted lock, stock, and barrel from the prior Rocky movies. Anderson retained the names,
relationships and built on the experiences of these characters from the three prior Rocky
movies. 1 M. Nimmer, § 2.12 (copying names of characters is highly probative evidence of
infringement). His characters are not merely substantially similar to Stallone’s, they are
Stallone’s characters. As Professor Nimmer stated, “Where there is literal similarity. . . . [i]t
is not necessary to determine the level of abstraction at which similarity ceases to consist of
an ‘expression of ideas’ since literal similarity by definition is always a similarity as to the
expression of ideas.” 3 M. Nimmer, § 13.03[3]. Anderson’s bodily appropriation of these
characters infringes upon the protected expression in the Rocky characters and renders his
work an unauthorized derivative work. By bodily appropriating the significant elements of
protected expression in the Rocky characters, Anderson has copied protected expression and
his treatment infringes on Stallone’s copyrighted work.
4. Since Anderson’s Work Is an Unauthorized Derivative Work,
No Part of the Treatment Can Be Granted Copyright Protection
Stallone owns the copyrights for the first three Rocky movies. Under 17 U.S.C.
section 106(2), he has the exclusive right to prepare derivative works based on these
copyrighted works. This Court has determined that Anderson’s treatment is an
unauthorized derivative work. Thus, Anderson has infringed upon Stallone’s copyright.
Nevertheless, plaintiff contends that his infringing work is entitled to copyright
protection and he can sue Stallone for infringing upon his treatment. Plaintiff relies upon
17 U.S.C. section 103(a) as support for his position that he is entitled to copyright
protection for the non-infringing portions of his treatment. 17 U.S.C section 103(a) reads:
The subject matter of copyright as specified by section 102 includes
compilations and derivative works, but protection for a work employing
preexisting material in which copyright subsists does not extend to any
part of the work in which the material has been used unlawfully.
Plaintiff has not argued that section 103(a), on its face, requires that an infringer
be granted copyright protection for the non-infringing portions of his work. He has not
and cannot provide this Court with a single case that has held that an infringer of a
copyright is entitled to sue a third party for infringing the original portions of his work.
Nor can he provide a single case that stands for the extraordinary proposition he proposes
here, namely, allowing a plaintiff to sue the party whose work he has infringed upon for
infringement of his infringing derivative work. . . .
The Court finds that Rocky IV is not substantially similar to Anderson’s work. Nor
is any portion of Anderson’s work entitled to copyright protection under 17 U.S.C.
sections 103(a) & 106(2). The Court GRANTS defendants summary judgment on
Anderson’s claim that they infringed Anderson’s copyright.
Questions:
1.) If the characters are under copyright, and Anderson’s “treatment” is thus an unauthorized derivative work, not eligible for copyright protection, what does it matter that

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Stallone had publicly offered ideas similar to the ones Anderson put in the screenplay
prior to seeing it? Why does the court mention it? To pose the counterfactual, suppose
Stallone had never thought about any of these plot twists, had access to a screenplay of
Anderson’s and taken all of it—down to the exact language of the script—does Anderson
still lose on the copyright claim?
2.) Should we have copyright over characters? Why? Why not? Think of the blockbuster
movies featuring comic book characters. Are these an argument for copyright protection
of characters or against it?
3.) Has James infringed copyright with his Hamnet character described in problem 12-1 e.)?
4.) In DC Comics v. Towle (9th Cir. 2015), the Ninth Circuit held that the Batmobile is a
copyrightable character. It set out the following three-part test for the copyright eligibility
of characters:
• the character must generally have physical as well as conceptual qualities
• the character must be sufficiently delineated to be recognizable as the same
character whenever it appears
• the character must be especially distinctive and contain some unique elements
of expression
The court explained: “Even when a character lacks sentient attributes and does not speak
(like a car), it can be a protectable character if it meets this standard.” So, under this
standard, is Hogwarts a copyrightable character? What might infringe it? In DC Comics,
the court’s holding meant that the defendant—Mark Towle, the owner of Gotham
Garage—infringed the Batmobile copyright when he built actual cars that were replicas
of Batmobiles. Here is one of Towle’s replicas.

4.) A Two-Part Test for Copyright Infringement
We have discussed the line courts must draw between idea and expression, the
process by which unprotectable elements are filtered from computer software and the reach
of copyright over characters. We now turn to the way (actually, the ways) that courts assess
claims of illicit copying. Portions of this discussion should be familiar from Computer
Associates v. Altai, but there they were in the specialized context of software.
In the 1946 case Arnstein v. Porter, the Second Circuit laid out a seminal twopronged test for copyright infringement. This was one of many lawsuits brought by
songwriter Ira Arnstein, who was convinced that more successful songwriters were

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401

stealing his music and made sometimes outlandish allegations of copying. In this case,
he claimed that several songs by Cole Porter infringed his works, even though there were
few significant similarities. While Arnstein lost his other lawsuits at the summary
judgment stage, here the court denied Porter’s summary judgment motion and set an
unusually high bar for winning these motions. Later cases tempered Arnstein’s summary
judgment standard, and the current requirement is that there is “no genuine issue of
material fact.” But its bifurcated test endures, and it is excerpted below.

Arnstein v. Porter

154 F.2d 464 (2d Cir. 1946)
FRANK, Circuit Judge.
. . . [I]t is important to avoid confusing two separate elements essential to a
plaintiff’s case in such a suit: (a) that defendant copied from plaintiff’s copyrighted work
and (b) that the copying (assuming it to be proved) went so far as to constitute improper
appropriation.
As to the first—copying—the evidence may consist (a) of defendant’s admission
that he copied or (b) of circumstantial evidence—usually evidence of access—from which
the trier of the facts may reasonably infer copying. Of course, if there are no similarities,
no amount of evidence of access will suffice to prove copying. If there is evidence of access
and similarities exist, then the trier of the facts must determine whether the similarities are
sufficient to prove copying. On this issue, analysis (‘dissection’) is relevant, and the
testimony of experts may be received to aid the trier of the facts. If evidence of access is
absent, the similarities must be so striking as to preclude the possibility that plaintiff and
defendant independently arrived at the same result.
If copying is established, then only does there arise the second issue, that of illicit
copying (unlawful appropriation). On that issue (as noted more in detail below) the test
is the response of the ordinary lay hearer; accordingly, on that issue, ‘dissection’ and
expert testimony are irrelevant.
In some cases, the similarities between the plaintiff’s and defendant’s work are so
extensive and striking as, without more, both to justify an inference of copying and to
prove improper appropriation. But such double-purpose evidence is not required; that is,
if copying is otherwise shown, proof of improper appropriation need not consist of
similarities which, standing alone, would support an inference of copying. . . .
Assuming that adequate proof is made of copying, that is not enough; for there can
be ‘permissible copying,’ copying which is not illicit. Whether (if he copied) defendant
unlawfully appropriated presents, too, an issue of fact. The proper criterion on that issue
is not an analytic or other comparison of the respective musical compositions as they
appear on paper or in the judgment of trained musicians. The plaintiff’s legally protected
interest is not, as such, his reputation as a musician but his interest in the potential
financial returns from his compositions which derive from the lay public’s approbation
of his efforts. The question, therefore, is whether defendant took from plaintiff’s works
so much of what is pleasing to the ears of lay listeners, who comprise the audience for
whom such popular music is composed, that defendant wrongfully appropriated
something which belongs to the plaintiff. . . .
••••••••••

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Notes
“[There are] two separate elements essential to a plaintiff’s case in such
a suit:
“a) that defendant copied from plaintiff’s copyrighted work and
b) that the copying (assuming it to be proved) went too far as to
constitute improper appropriation.”
This two-part test from Arnstein has served as a basic template for copyright infringement tests in many other Circuits. The general contours of each prong are as follows.
First, there is the question of whether the defendant copied from the plaintiff’s
work at all, as opposed to independently creating her own work. This is a factual rather
than legal question. It is easily resolved if the defendant admits to copying; in cases of
digital music sampling, for example, there is no debate over whether the defendant
copied, just whether she took enough for that copying to be unlawful. Often there is no
such admission, however, and courts turn to analyzing whether circumstantial evidence
of similarities between the works, often called “probative similarity,” and evidence of
“access” are together enough to suggest copying.
Probative Similarity: At this stage, similarities are being assessed to answer the initial
question of whether there was copying, not the legal question of whether there was
infringement. Thus courts look at the question of similarity broadly, even including
similarities in unprotected material such as ideas. (Courts look at all the similarities
because they may show that I did copy from you as a factual matter, even if they do not
show that I infringed as a legal matter.) Do you agree with this technique? Obviously, it
poses the danger that juries will later conflate both protectable and unprotectable
similarities when judging infringement.
Access: A full exploration of access is beyond the scope of this chapter, but, generally,
there must be a “reasonable possibility” that the defendant had access to the plaintiff’s
work, either through a chain of events (my producer met you at a bar where you gave her
a demo of a song that you now claim I copied), or widespread dissemination of the
plaintiff’s work (your song was played so often that I must have heard it). As we saw in
Computer Associates, programmers try to devise “clean room” programming techniques,
in which coders are kept away from the code to be emulated functionally, precisely to
preclude access. However, few of us create in hermetically sealed environments, and
courts will sometimes presume access even in the absence of any evidence if similarities
between the works are so “striking” as to make independent creation implausible. These
evidentiary questions are complex. As Arnstein suggests, analytical dissection and expert
testimony about the nature of those similarities (and thus the likelihood that they are
accidental) are appropriate to resolve them.
In this chapter, we have focused on the second question: whether the copying
“went so far as to constitute improper appropriation”—that is, copyright infringement.
Arnstein provides two general guidelines with regard to this inquiry:
• unlawful appropriation should be determined by the “lay listener” or observer,
and
• analytical dissection and expert testimony are “irrelevant.”
What is the court’s reasoning here? Why leave this determination to the lay juror,
without the aid (or distraction) of dissection and expert testimony? Should expert
testimony be permitted to assist the jury with certain discrete determinations, such as

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403

distinguishing between protectable and unprotectable material? More broadly, do you
agree with Arnstein that “improper appropriation” should turn on whether the defendant
has unduly impinged on the plaintiff’s market interest “in the potential financial returns
from his compositions which derive from the lay public’s approbation of his efforts”?
The Ninth Circuit has adopted and reformulated Arnstein v. Porter’s two-part test.
After establishing factual copying, it separates the unlawful appropriation inquiry into two
prongs: an “extrinsic” inquiry—an objective comparison of the protectable elements of
the two works, with the assistance of expert testimony, and an “intrinsic” inquiry—a
subjective comparison of the works by the jury from the point of view of the ordinary
reasonable person. See Skidmore v. Zeppelin (9th Cir. 2020) (summarizing the current test
in light of conflicting precedent; finding that Led Zeppelin’s song “Stairway to Heaven”
did not infringe the copyright in the song “Taurus”).
The following case engages with the “ordinary observer” test as introduced in
Arnstein and developed in other Circuits, and suggests a limited modification.

Dawson v. Hinshaw Music

905 F.2d 731 (4th Cir. 1990)

[In this case, the plaintiff claimed that the defendant had infringed his musical
arrangement of the spiritual “Ezekiel Saw De Wheel.” The court held that applying the
ordinary lay observer test was inappropriate, and adopted an “intended audience” test. Here,
the intended audience for the spiritual arrangements could be “choral directors who possess
specialized expertise relevant to their selection of one arrangement instead of another.”]
MURNAGHAN, Circuit Judge.
Arnstein v. Porter provides the source of modern theory regarding the ordinary
observer test. Arnstein involved the alleged infringement of a popular musical
composition. Writing for the panel, Judge Jerome Frank first explained that “the
plaintiff’s legally protected interest is not, as such, his reputation as a musician but his
interest in the potential financial returns from his compositions which derive from the
lay public’s approbation.” This initial observation gave force to the recognized purpose
of the copyright laws of providing creators with a financial incentive to create for the
ultimate benefit of the public.
Consistent with its economic incentive view of copyright law, the Arnstein court
concluded that “the question, therefore, is whether defendant took from plaintiff’s works
so much of what is pleasing to the ears of lay listeners, who comprise the audience for
whom such popular music is composed, that defendant wrongfully appropriated
something which belongs to plaintiff.” (emphasis added). Thus, under Arnstein, a court
should look to the reaction of “lay listeners,” because they comprise the audience of the
plaintiff’s work. The lay listener’s reaction is relevant because it gauges the effect of the
defendant’s work on the plaintiff’s market.
Although Arnstein established a sound foundation for the appeal to audience
reaction, its reference to “lay listeners” may have fostered the development of a rule that
has come to be stated too broadly. Under the facts before it, with a popular composition at
issue, the Arnstein court appropriately perceived “lay listeners” and the works’ “audience”

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to be the same. However, under Arnstein’s sound logic, the lay listeners are relevant only
because they comprise the relevant audience. Although Arnstein does not address the
question directly, we read the case’s logic to require that where the intended audience is
significantly more specialized than the pool of lay listeners, the reaction of the intended
audience would be the relevant inquiry. In light of the copyright law’s purpose of protecting
a creator’s market, we think it sensible to embrace Arnstein’s command that the ultimate
comparison of the works at issue be oriented towards the works’ intended audience.
Our reading of Arnstein brings our analysis into line with Sid & Marty Krofft
Television v. McDonald’s Corp. (9th Cir. 1977), another landmark case involving
questions of substantial similarity. Krofft announced that the test for determining
substantial similarity in the expression of ideas of two works “shall be labeled an intrinsic
one-depending on the response of the ordinary reasonable person.” When applying its
intrinsic test, the Krofft court noted the particular audience to which the works in question
were directed. The court wrote:
The present case demands an even more intrinsic determination because
both plaintiff’s and defendants’ works are directed to an audience of
children. This raises the particular factual issue of the impact of the
respective works upon the minds and imaginations of young people.
Thus, the Krofft court believed that the perspective of the specific audience for which the
products were intended (children) was the relevant perspective for the ordinary observer test.
We suspect that courts have been slow to recognize explicitly the need for refining
the ordinary observer test in such a way that it would adopt the perspective of the intended
audience because, in most fact scenarios, the general lay public fairly represents the works’
intended audience. As a result, “a considerable degree of ambiguity exists in this area;
courts have not always made it apparent whether they were using a member of a specific
audience, or simply an average lay observer as their spectator.” Fortunately, the advent of
computer programming infringement actions has forced courts to recognize that sometimes
the non-interested or uninformed lay observer simply lacks the necessary expertise to
determine similarities or differences between products. In Whelan Associates v. Jaslow
Dental Laboratory (3d Cir. 1986), the Third Circuit concluded that the ordinary observer
arm of the substantial similarity test was not appropriate for the complex computer program
copyright case before it. Writing for a unanimous panel, Judge Becker reasoned that the
complexity of computer programs, combined with the general public’s unfamiliarity with
such programs, rendered the ordinary observer test senseless. He further reasoned that
where the finder of fact is the same for both the extrinsic and intrinsic tests, it seems silly
to ask the finder of fact to “forget” the expert testimony when considering similarity of
expression. Judge Becker relied also on Federal Rule of Evidence 702, which permits
expert testimony where it will be useful to a trier of fact.
We believe the Whelan analysis further supports our view. As Whelan reveals, only
a reckless indifference to common sense would lead a court to embrace a doctrine that
requires a copyright case to turn on the opinion of someone who is ignorant of the
relevant differences and similarities between two works. Instead, the judgment should be
informed by people who are familiar with the media at issue. . . .
Under the foregoing logic, we state the law to be as follows. When conducting the
second prong of the substantial similarity inquiry, a district court must consider the nature
of the intended audience of the plaintiff’s work. If, as will most often be the case, the lay
public fairly represents the intended audience, the court should apply the lay observer
formulation of the ordinary observer test. However, if the intended audience is more

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405

narrow in that it possesses specialized expertise, relevant to the purchasing decision, that
lay people would lack, the court’s inquiry should focus on whether a member of the
intended audience would find the two works to be substantially similar. Such an inquiry
may include, and no doubt in many cases will require, admission of testimony from
members of the intended audience or, possibly, from those who possess expertise with
reference to the tastes and perceptions of the intended audience. . . .
. . . [I]n any given case, a court should be hesitant to find that the lay public does
not fairly represent a work’s intended audience. In our opinion, departure from the lay
characterization is warranted only where the intended audience possesses “specialized
expertise.” We thereby pay heed to the need for hesitancy when departing from the
indiscriminately selected lay public in applying the test. To warrant departure from the
lay characterization of the ordinary observer test, “specialized expertise” must go beyond
mere differences in taste and instead must rise to the level of the possession of knowledge
that the lay public lacks.
Questions:
1.) Why does the court believe that the audience for the work is also the relevant
audience to determine substantial similarity? Because they would have the relevant
levels of expertise? Or because they are the relevant purchasers? Imagine a contemporary
jazz composer who writes a song riffing on the styles of prior jazz greats, from Bird to
Coltrane, in a way that knowledgeable jazz audiences would have realized was merely a
tip of the hat to his predecessors, common among sophisticated jazz musicians. Then
imagine a few themes of his work are included in a massively popular hip hop song,
which also—and independently—refers back to the same greats in jazz history. To the
ear of someone unfamiliar with jazz the two sound strikingly similar. To the ear of an
aficionado, the similarities are revealed to be independent references to the same cultural
store. The jazz composer sues the hip hop artist. Which is the relevant audience?
2.) Though many observers have agreed that Arnstein’s test may sweep in too much in
assessing infringement, the “intended audience” test has not commanded much support
from courts. Should that change?
3.) Apply the Arnstein test to Jennifer’s summaries of airport self-help and business
books. What result?
4.) Apply what you have read so far to the diet books in Problem 12-1 c.). Do you think
that James’ abridged diet book or Anthony’s blog infringe Jennifer’s copyright?

Note: Substantial Similarity
Whether determined by the lay juror or intended audience, the basic test for illicit
copying is whether there is substantial similarity between protectable elements in the
plaintiff’s and defendant’s works. Assessing substantial similarity requires numerous
exercises in line-drawing, and to quote Judge Hand in Nichols, “the line, wherever it is
drawn, will seem arbitrary.” What elements are protected by copyright, and what
elements are unprotectable facts, ideas, scènes à faire, unoriginal material, or instances
of merger? At what point does copying become “substantial” and therefore unlawful?
The legal standards vary from Circuit to Circuit, and have changed over time. They also
vary medium to medium: assessing similarities becomes very different depending on

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whether one is considering music (melody, harmony, rhythm, instrumentation, etc.), or
novels (plot, dialogue, setting, sequence, characters, etc.), or computer programs (as you
saw in Computer Associates).
Consider the difference between the following tests for substantial similarity:
• The jury is asked to decide whether the “total concept and feel” of the original
and allegedly infringing works is substantially similar.
• The jury is asked to focus exclusively on substantial similarities between
protected materials.
How might these tests be over- or under-inclusive? (In practice, tests have evolved
and overlapped over time, and courts have tried to fine-tune them so that they converge
on a reasonable, fact-specific analysis of whether there has been appropriation sufficient
to amount to infringement.)

Questions:
Apply the tests for substantial similarity to the following fact patterns. How do
these come out under a “total concept and feel” test? How about a targeted comparison
of only the protected material?
1.) Hallmark creates a romantic greeting card showing an original arrangement of a cute
puppy with a bouquet of flowers and balloons under a rainbow with the superimposed
text “i wuv you.” American Greetings creates a card with an almost identical arrangement
of its own cute puppy with flowers and balloons, and a generic rainbow that also reads
“i wuv you.”
2.) DJ JJ samples the catchy four-note hook from your song and includes it in the
introduction to her song, which is otherwise entirely different from your work.
3.) A fan develops a South Park trivia game that contains multiple-choice questions
about the key characters and events in all of the episodes to date, duplicating fragmentary
details from the series in an entirely different (text-only) format.
4.) Revisit James’s novel about Hamnet. Under which test is he most likely to win?
Subconscious Copying: One final wrinkle. Because copyright is a strict liability
system, infringement may result even when one subconsciously copies another’s work.
In the words of Learned Hand: “Everything registers somewhere in our memories, and
no one can tell what may evoke it. . . . The author’s copyright is an absolute right to
prevent others from copying his original collocation of words or notes, and does not
depend upon the infringer’s good faith. Once it appears that another has in fact used the
copyright as the source of his production, he has invaded the author’s rights. It is no
excuse that in so doing his memory has played him a trick.” Fred Fisher, Inc. v.
Dillingham (S.D.N.Y. 1924); see also Bright Tunes Music v. Harrisongs Music (S.D.N.Y.
1976), aff’d, ABKCO Music, Inc. v. Harrisongs Music, Ltd. (2d Cir. 1983). Do you agree?
What are the dangers of holding creators liable for subconscious copying? How about
the dangers of limiting infringement to instances of intentional copying? How does this
doctrine fit with the idea that independent creation—us both coming up with the same
sonnet independently—is not copyright infringement?

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5.) “De minimis” Copying
When is copying not copying? When it is de minimis. It is hornbook law that trivial
or “de minimis” copying does not constitute actionable copyright infringement. This is a
copyright specific embodiment of the general common law principle that “de minimis
non curat lex”—the law does not concern itself with trifles. (Any first year law student
could tell you that the law frequently concerns itself with trifles, but the principle is a
general one.)

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Before we begin: Please note that it’s de minimis, not de minimUS, a common
misspelling.
Many people assume that there is an accepted quantitative threshold for de minimis
copying, and that—depending on the medium—any use of fewer than 10 seconds, 2
sentences, 6 notes, or the like is non-infringing. As you will see below, there is no brightline rule, and the inquiry is much more complex and fact-specific.

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Newton v. Diamond

388 F.3d 1189 (9th Cir. 2004)
SCHROEDER, Chief Judge.
[This case involved an intricate performance by an avant-garde flutist, and
included much debate about what musical elements within that performance should be
considered part of the musical composition, as opposed to the sound recording of that
composition, because compositions and sound recordings are covered by two different
copyrights. The copyright claim in this case only involved the composition because the
defendants had properly licensed the sound recording. Therefore, the scope of the
composition copyright mattered—the less the composition included, the more likely its
copying would be de minimis. This extraneous discussion is not included in the excerpt
below, which focuses on the application of the de minimis doctrine. Eds.]
...
Background and Procedural History
The plaintiff and appellant in this case, James W. Newton, is an accomplished
avant-garde jazz flutist and composer. In 1978, he composed the song “Choir.” . . .
The defendants and appellees include the members of the rap and hip-hop group
Beastie Boys, and their business associates. In 1992, Beastie Boys obtained a license
from ECM Records to use portions of the sound recording of “Choir” in various
renditions of their song “Pass the Mic” in exchange for a one-time fee of $1000. Beastie
Boys did not obtain a license from Newton to use the underlying composition.
The portion of the composition at issue consists of three notes, C–D flat–C, sung
over a background C note played on the flute. . . . Beastie Boys digitally sampled the
opening six seconds of Newton’s sound recording of “Choir.” . . .
...

Whether Defendants’ Use was De Minimis

For an unauthorized use of a copyrighted work to be actionable, the use must be
significant enough to constitute infringement. This means that even where the fact of
copying is conceded, no legal consequences will follow from that fact unless the copying
is substantial. The principle that trivial copying does not constitute actionable
infringement has long been a part of copyright law. Indeed, as Judge Learned Hand
observed over 80 years ago: “Even where there is some copying, that fact is not conclusive
of infringement. Some copying is permitted. In addition to copying, it must be shown that
this has been done to an unfair extent.” This principle reflects the legal maxim, de minimis
non curat lex (often rendered as, “the law does not concern itself with trifles”).
A leading case on de minimis infringement in our circuit is Fisher v. Dees, where
we observed that a use is de minimis only if the average audience would not recognize
the appropriation. (“[A] taking is considered de minimis only if it is so meager and
fragmentary that the average audience would not recognize the appropriation.”). This
observation reflects the relationship between the de minimis maxim and the general test
for substantial similarity, which also looks to the response of the average audience, or
ordinary observer, to determine whether a use is infringing. To say that a use is de minimis
because no audience would recognize the appropriation is thus to say that the use is not
sufficiently significant. . . .
The high degree of similarity between the works here (i.e., “Pass the Mic” and

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“Choir”), but the limited scope of the copying, place Newton’s claim for infringement into
the class of cases that allege what Nimmer refers to as “fragmented literal similarity.”
Fragmented literal similarity exists where the defendant copies a portion of the plaintiff’s
work exactly or nearly exactly, without appropriating the work’s overall essence or
structure. Because the degree of similarity is high in such cases, the dispositive question
is whether the copying goes to trivial or substantial elements. Substantiality is measured
by considering the qualitative and quantitative significance of the copied portion in
relation to the plaintiff’s work as a whole. This focus on the sample’s relation to the
plaintiff’s work as a whole embodies the fundamental question in any infringement action,
as expressed more than 150 years ago by Justice Story: whether “so much is taken[] that
the value of the original is sensibly diminished, or the labors of the original author are
substantially to an injurious extent appropriated by another.” Courts also focus on the
relationship to the plaintiff’s work because a contrary rule that measured the significance
of the copied segment in the defendant’s work would allow an unscrupulous defendant to
copy large or qualitatively significant portions of another’s work and escape liability by
burying them beneath non-infringing material in the defendant’s own work, even where
the average audience might recognize the appropriation. Thus, as the district court
properly concluded, the fact that Beastie Boys “looped” the sample throughout “Pass the
Mic” is irrelevant in weighing the sample’s qualitative and quantitative significance.
On the undisputed facts of this record, no reasonable juror could find the sampled
portion of the composition to be a quantitatively or qualitatively significant portion of
the composition as a whole. Quantitatively, the three-note sequence appears only once in
Newton’s composition. It is difficult to measure the precise relationship between this
segment and the composition as a whole, because the score calls for between 180 and
270 seconds of improvisation. When played, however, the segment lasts six seconds and
is roughly two percent of the four-and-a-half-minute “Choir” sound recording licensed
by Beastie Boys. Qualitatively, this section of the composition is no more significant
than any other section. Indeed, with the exception of two notes, the entirety of the scored
portions of “Choir” consist of notes separated by whole and half-steps from their
neighbors and is played with the same technique of singing and playing the flute
simultaneously; the remainder of the composition calls for sections of improvisation that
range between 90 and 180 seconds in length. . . .
Conclusion
. . . We hold that Beastie Boys’ use of a brief segment of that composition,
consisting of three notes separated by a half-step over a background C note, is not
sufficient to sustain a claim for infringement of Newton’s copyright in the composition
“Choir”. We affirm the district court’s grant of summary judgment on the ground that
Beastie Boys’ use of the composition was de minimis and therefore not actionable.
GRABER, Circuit Judge, dissenting.
. . . [O]n the record before us, a finder of fact reasonably could find that Beastie
Boys’ use of the sampled material was not de minimis. Therefore, summary judgment is
inappropriate.
. . . Even passages with relatively few notes may be qualitatively significant. The
opening melody of Beethoven’s Fifth Symphony is relatively simple and features only
four notes, but it certainly is compositionally distinctive and recognizable. . . .
Because Newton has presented evidence establishing that reasonable ears differ over

“De minimis” Copying

411

the qualitative significance of the composition of the sampled material, summary judgment
is inappropriate in this case. Newton should be allowed to present his claims of infringement
to a factfinder. I therefore dissent from the majority’s conclusion to the contrary.
••••••••••
Notes:
We would like to be able to give you a succinct description of the de minimis
doctrine but we cannot. Consider three possibilities.
1.) There is a certain level of copying—in either amount taken or impact produced
on the market—that is just too little for the law to worry about. Yes, there is copying in
the factual sense, identifiable copying, but the law will not concern itself with such a
trifle—for reasons of judicial economy, or the preservation of a sphere of individual
liberty, or protection of a certain degree of cultural reference, or all three.
2.) A related but separate point: The test for infringement is “substantial
similarity.” If I have taken only a little, then the works are not substantially similar,
because most of yours went un-copied and most of mine is not taken from yours. But
this now requires us to enter into the similarity analysis. We move away from the prospect
of a bright line de minimis rule that stops the analysis before it even gets started. And the
substantial similarity inquiry implicitly focuses us on the amount question (both as a
quantitative and qualitative matter), not the market impact question—perhaps
appropriately so, because impact can be considered under fair use.
3.) De minimis is conflated into some of the 4 factors in the fair use analysis,
making it effectively a subdivision of fair use. This could be true either because very
little was copied or because that copying had no real impact on the plaintiff.
Which of these represents the de minimis doctrine as the law currently stands?
Elements of all three versions can be found.
The Newton case situates the de minimis analysis within the context of substantial
similarity: “To say that a use is de minimis . . . is thus to say that the works are not
substantially similar.” But what about instances where there is substantial similarity, but
the copying is nevertheless too insignificant or inconsequential to merit adjudication?
What if I copy your photograph for my law school collage, but never show it to anyone?
Should the principle that “the law does not concern itself with trifles” have a more
general application to copyright claims, as it does in other areas of law? Consider this
quote from Judge Pierre Leval in Davis v. Gap, Inc. (2d Cir. 2001):
“The de minimis doctrine is rarely discussed in copyright opinions
because suits are rarely brought over trivial instances of copying.
Nonetheless, it is an important aspect of the law of copyright. Trivial
copying is a significant part of modern life. Most honest citizens in the
modern world frequently engage, without hesitation, in trivial copying
that, but for the de minimis doctrine, would technically constitute a
violation of law. We do not hesitate to make a photocopy of a letter from
a friend to show to another friend, or of a favorite cartoon to post on the
refrigerator. Parents in Central Park photograph their children perched on
Jose de Creeft’s Alice in Wonderland sculpture. We record television
programs aired while we are out, so as to watch them at a more
convenient hour. Waiters at a restaurant sing “Happy Birthday” at a
patron’s table. When we do such things, it is not that we are breaking the

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law but unlikely to be sued given the high cost of litigation. Because of
the de minimis doctrine, in trivial instances of copying, we are in fact not
breaking the law. If a copyright owner were to sue the makers of trivial
copies, judgment would be for the defendants. The case would be
dismissed because trivial copying is not an infringement.”
Notice that Judge Leval (whose own articles on fair use have been very influential)
conflates multiple types of copying here, some of them clearly—as in the case of home
taping—covered not by de minimis but fair use. Do Judge Leval’s assertions about mundane copying—the cartoon on the fridge—still hold in the internet age, where trivial
copying is both a more “significant part of modern life,” and more detectable and
preventable by copyright holders? Do they hold even more strongly? Think back to MAI
v. Peak. Should that RAM copy have been deemed the type of “trivial” copying that
Judge Leval is discussing?
In Davis v. Gap, the court did not ultimately find the de minimis doctrine applicable.
There, The Gap had run an advertising campaign in which one of the models wore the
plaintiff’s “nonfunctional” eyeware jewelry. The court found that The Gap’s use of the
copyrighted eyeware was too noticeable to qualify for de minimis protection. Another
famous case rejecting a de minimis argument was Ringgold v. Black Entertainment TV (2d
Cir. 1997). There, a poster of a copyrighted artwork appeared in the background of a TV
show in nine scenes ranging from 1.86 to 4.16 seconds and totaling 26.75 seconds. The
court ruled that the use was not de minimis. Sound? What would you have to think, to
think this a good result? What is the vision of copyright’s role or reach?
As mentioned above, some courts have further confused the meaning of de minimis
in the copyright context by applying it to yet another inquiry: fair use. Judge Leval’s
quote above suggests the same tendency. They tend to use the term “de minimis” when
discussing either of two fair use factors that you will encounter in the upcoming readings:
the “amount and substantiality” of the defendant’s use and the degree of “market harm”
to the plaintiff.
Bottom line, there may be coherence to the doctrine, but if there is . . . it is de minimis.

CHAPTER THIRTEEN

Limitations on Exclusive Rights: Fair Use

§ 107. Limitations on exclusive rights: Fair use
Notwithstanding the provisions of sections 106 and 106A, the fair
use of a copyrighted work, including such use by reproduction in
copies or phonorecords or by any other means specified by that
section, for purposes such as criticism, comment, news reporting,
teaching (including multiple copies for classroom use), scholarship,
or research, is not an infringement of copyright. In determining
whether the use made of a work in any particular case is a fair use
the factors to be considered shall include—
(1) the purpose and character of the use, including whether
such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation
to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value
of the copyrighted work.
The fact that a work is unpublished shall not itself bar a finding of fair
use if such finding is made upon consideration of all the above factors.
Section 107 of the Copyright Act contains its most famous limitation—fair use—
though not its most important limitation, which is clearly the idea-expression distinction.
The idea/expression and fact/expression dichotomy says that while you cannot have the
expression, the facts and ideas in any work are yours. But what if you need the
expression? Or if you should have the expression in order to promote the progress, the
foundational goal of copyright? That is where fair use comes in. We have said many
times—in SFAA v. USOC, for example—that the most common defense of intellectual
property against First Amendment claims is “you don’t need the protected material!
Paraphrase!” Fair use is for when the paraphrase will not work. (To use Justice Brennan’s
non intellectual property example, a T shirt saying ‘I strongly resent the draft’ would not
be the same.) And fair use also covers those cases where the right to prevent copying
should have no role in the first place.
But fair use is something else as well—it has become the duct tape of copyright,
the thing courts turn to when something systemic needs to be fixed right now.
Congress (and the happenstance of technological development) continue to drop
new technologies and forms of media into the bed marked “copyright,” with scant
guidance to judges about how they are to deal with the resulting chaos. We are not
referring only to software. There is the reality of a global web that is spidered, copied,
every day by search engines, and must be if it is to be navigable. We now live constantly
with devices on which reading is also necessarily copying. We work and play with
systems in which making a compatible widget—the generic razor blade of the digital
era—requires decompiling copyrighted code. In each case, activities—reading, indexing,
making compatible generic goods—that in an analog world did not implicate copyright

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at all, are suddenly within its sway. One way to deal with that process is the kind of
Procrustean trimming and stretching we saw in Lotus or Computer Associates. Feel free
to add the descriptions “inappropriately interventionist and policy driven,” “responsibly
focused on substance not form, with an eye to the constitutional goals of the system” or
“working within the classic common law methods in a process of judicial evolution” to
your account of what the judges did in those cases. We would go with the second two
descriptions, but a reasonable case can be made for the first.
Yet sometimes redefining the subject matter criteria or the test for infringement is
not enough. That is when fair use is called upon.
We do not mean to say that fair use is only important to deal with the technological
transformations of copyright, though that will be one important theme of this chapter.
Fair use also deals with the speech side of copyright—the places where “paraphrasing
around” is not enough. It is the conjunction of these two themes from the class that causes
us to concentrate so heavily on fair use—this is the place where these arguments are
brought together, weighed and decided.
And so in this chapter we will read about whether you have a legal privilege (a
right?) to videotape or DVR copyrighted TV shows for time-shifting purposes, and to
decompile video games to make interoperable games. We will discuss the scanning of
millions of books under copyright, without permission, in order to create the ‘digital index
of Alexandria’ according to the defendants, or engage ‘in the greatest act of illicit copying
the world has ever known,’ according to the plaintiffs. But we will also read about parodic
rap versions of songs that the Supreme Court (wrongly) seems to think are about
prostitution, and why Margaret Mitchell’s estate thought they had the power to tell an
African-American novelist that it would be breaking the law to retell Gone With the Wind
from the slaves’ perspective. We will even talk about reproducing sections of copyrighted
books for educational purposes in coursepacks. We will meet again two of the “framings”
we discussed in Chapter 1. As you might guess, one will be ‘incentives for investment in
creativity’ versus ‘promotion of competition and avoidance of monopoly in technological
development.’ But the other will be the classic ‘speech versus property’ divide. The
readings and arguments from both Chapters 1 and 2 will be very relevant. It will turn out
that cases developed within one of those frames can inform the other. Cases about Google
image search draw on cases about rap parodies, and cases about appropriationist art draw
on cases about technological transformation.
P ROBLEM 13-1
Section 107 is short. We want you to bring out your best legislative parsing skills.
1.) Look at the clauses one by one. What is the textual structure of § 107? For
example, is it open-ended or closed? Does the first clause determine the analysis
of the subsequent clauses, or is it mere legislative throat clearing? What roles do
the examples play? The 4 factors? The examples and the factors in combination?
2.) “The factors to be considered shall include. . . .” Are they positive or negative?
How can you tell? How is the judge to consider them?
3.) Look at this clause—“whether such use is of a commercial nature or is for
nonprofit educational purposes. . . .” Parse it. Is there a difference between a use
being commercial and a use “of a commercial nature”? Is The New York Times’

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415

report featuring unauthorized reproduction of Abu Ghraib prisoner-abuse
pictures “commercial” because The Times is a for profit company? Is a professor
at (for profit) Phoenix University who wants to copy an article for his class
engaged in activities of a commercial nature? Or a (nonprofit) educational
purpose? Something in between? And what does the Venn diagram of
commercial and nonprofit educational purposes look like? Are the only nonprofit
activities those that are also educational?
4.) Section 107 focuses on the nature of “the fair use.” What does that mean? What
counts as a use for the purposes of the section? If I tell the copy shop to copy something for class, whose “use” should we look at? Mine or theirs? How can you tell?
The first case we will read is a famous one: Sony v. Universal, which established
the legality of home taping. Sony actually contains two very important contributions to
copyright’s interaction with technology, and the fair use portion is probably the less
important of the two. It is in the discussion of the requirements of “contributory
infringement” that Sony has had its biggest impact. Some casebooks separate the two
portions of the case; but we think they make more sense when read together.

1.) Fair Use, Technology and Contributory Infringement

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

464 U.S. 417 (1984)

Justice STEVENS delivered the opinion of the Court.
Petitioners manufacture and sell home video tape recorders. Respondents own the
copyrights on some of the television programs that are broadcast on the public airwaves.
Some members of the general public use video tape recorders sold by petitioners to
record some of these broadcasts, as well as a large
number of other broadcasts. The question presented
is whether the sale of petitioners’ copying equipment
to the general public violates any of the rights
conferred upon respondents by the Copyright Act.
Respondents commenced this copyright infringement action against petitioners in the United
States District Court for the Central District of
California in 1976. Respondents alleged that some
individuals had used Betamax video tape recorders
(VTR’s) to record some of respondents’ copyrighted
works which had been exhibited on commercially
sponsored television and contended that these
individuals had thereby infringed respondents’
copyrights. Respondents further maintained that Image from the Rush Forum discussion
of video cassettes, available at http://
petitioners were liable for the copyright infringement www.therushforum.com/index.php?/to
allegedly committed by Betamax consumers because pic/ 49589-the-early-days-of-videoof petitioners’ marketing of the Betamax VTR’s. cassettes/.

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LIMITATIONS ON EXCLUSIVE RIGHTS: FAIR USE

Respondents sought no relief against any Betamax consumer. Instead, they sought money
damages and an equitable accounting of profits from petitioners, as well as an injunction
against the manufacture and marketing of Betamax VTR’s.
After a lengthy trial, the District Court denied respondents all the relief they sought
and entered judgment for petitioners. The United States Court of Appeals for the Ninth
Circuit reversed the District Court’s judgment on respondent’s copyright claim, holding
petitioners liable for contributory infringement and ordering the District Court to fashion
appropriate relief. We granted certiorari; since we had not completed our study of the
case last Term, we ordered reargument. We now reverse.
An explanation of our rejection of respondents’ unprecedented attempt to impose
copyright liability upon the distributors of copying equipment requires a quite detailed recitation of the findings of the District Court. In summary, those findings reveal that the
average member of the public uses a VTR principally to record a program he cannot view
as it is being televised and then to watch it once at a later time. This practice, known as
“time-shifting,” enlarges the television viewing audience. For that reason, a significant
amount of television programming may be used in this manner without objection from the
owners of the copyrights on the programs. For the same reason, even the two respondents
in this case, who do assert objections to time-shifting in this litigation, were unable to prove
that the practice has impaired the commercial value of their copyrights or has created any
likelihood of future harm. Given these findings, there is no basis in the Copyright Act upon
which respondents can hold petitioners liable for distributing VTR’s to the general public.
The Court of Appeals’ holding that respondents are entitled to enjoin the distribution of
VTR’s, to collect royalties on the sale of such equipment, or to obtain other relief, if affirmed, would enlarge the scope of respondents’ statutory monopolies to encompass control
over an article of commerce that is not the subject of copyright protection. Such an expansion of the copyright privilege is beyond the limits of the grants authorized by Congress.
I
The two respondents in this action, Universal Studios, Inc. and Walt Disney
Productions, produce and hold the copyrights on a substantial number of motion pictures
and other audiovisual works. In the current marketplace, they can exploit their rights in
these works in a number of ways: by authorizing theatrical exhibitions, by licensing
limited showings on cable and network television, by selling syndication rights for
repeated airings on local television stations, and by marketing programs on prerecorded
videotapes or videodiscs. Some works are suitable for exploitation through all of these
avenues, while the market for other works is more limited. . . .
The respondents and Sony both conducted surveys of the way the Betamax machine
was used by several hundred owners during a sample period in 1978. Although there were
some differences in the surveys, they both showed that the primary use of the machine for
most owners was “time-shifting,”—the practice of recording a program to view it once at
a later time, and thereafter erasing it. Time-shifting enables viewers to see programs they
otherwise would miss because they are not at home, are occupied with other tasks, or are
viewing a program on another station at the time of a broadcast that they desire to watch.
Both surveys also showed, however, that a substantial number of interviewees had
accumulated libraries of tapes. Sony’s survey indicated that over 80% of the interviewees
watched at least as much regular television as they had before owning a Betamax.
Respondents offered no evidence of decreased television viewing by Betamax owners.
Sony introduced considerable evidence describing television programs that could

Fair Use, Technology and Contributory Infringement

417

be copied without objection from any copyright holder, with special emphasis on sports,
religious, and educational programming. For example, their survey indicated that 7.3%
of all Betamax use is to record sports events, and representatives of professional baseball,
football, basketball, and hockey testified that they had no objection to the recording of
their televised events for home use.
Respondents offered opinion evidence concerning the future impact of the
unrestricted sale of VTR’s on the commercial value of their copyrights. The District
Court found, however, that they had failed to prove any likelihood of future harm from
the use of VTR’s for time-shifting. . . .
The District Court concluded that noncommercial home use recording of material
broadcast over the public airwaves was a fair use of copyrighted works and did not
constitute copyright infringement. . . .
The Court of Appeals reversed the District Court’s judgment on respondents’
copyright claim. It did not set aside any of the District Court’s findings of fact. Rather, it
concluded as a matter of law that the home use of a VTR was not a fair use because it
was not a “productive use.” It therefore held that it was unnecessary for plaintiffs to prove
any harm to the potential market for the copyrighted works, but then observed that it
seemed clear that the cumulative effect of mass reproduction made possible by VTR’s
would tend to diminish the potential market for respondents’ works. . . .
II
Article I, Sec. 8 of the Constitution provides that: “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.”
The monopoly privileges that Congress may authorize are neither unlimited nor
primarily designed to provide a special private benefit. Rather, the limited grant is a
means by which an important public purpose may be achieved. It is intended to motivate
the creative activity of authors and inventors by the provision of a special reward, and to
allow the public access to the products of their genius after the limited period of exclusive
control has expired.
“The copyright law, like the patent statute, makes reward to the owner a
secondary consideration. In Fox Film Corp. v. Doyal, Chief Justice
Hughes spoke as follows respecting the copyright monopoly granted by
Congress, ‘The sole interest of the United States and the primary object
in conferring the monopoly lie in the general benefits derived by the
public from the labors of authors.’ It is said that reward to the author or
artist serves to induce release to the public of the products of his creative
genius.” United States v. Paramount Pictures (1948).
As the text of the Constitution makes plain, it is Congress that has been assigned
the task of defining the scope of the limited monopoly that should be granted to authors
or to inventors in order to give the public appropriate access to their work product.
Because this task involves a difficult balance between the interests of authors and
inventors in the control and exploitation of their writings and discoveries on the one hand,
and society’s competing interest in the free flow of ideas, information, and commerce on
the other hand, our patent and copyright statutes have been amended repeatedly.
From its beginning, the law of copyright has developed in response to significant

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changes in technology.11 Indeed, it was the invention of a new form of copying equipment—
the printing press—that gave rise to the original need for copyright protection.12 Repeatedly,
as new developments have occurred in this country, it has been the Congress that has
fashioned the new rules that new technology made necessary. Thus, long before the
enactment of the Copyright Act of 1909, it was settled that the protection given to copyrights
is wholly statutory. The remedies for infringement “are only those prescribed by Congress.”
The judiciary’s reluctance to expand the protections afforded by the copyright
without explicit legislative guidance is a recurring theme. Sound policy, as well as
history, supports our consistent deference to Congress when major technological
innovations alter the market for copyrighted materials. Congress has the constitutional
authority and the institutional ability to accommodate fully the varied permutations of
competing interests that are inevitably implicated by such new technology.
In a case like this, in which Congress has not plainly marked our course, we must
be circumspect in construing the scope of rights created by a legislative enactment which
never contemplated such a calculus of interests. In doing so, we are guided by Justice
Stewart’s exposition of the correct approach to ambiguities in the law of copyright:
“The limited scope of the copyright holder’s statutory monopoly, like the
limited copyright duration required by the Constitution, reflects a balance
of competing claims upon the public interest: Creative work is to be
encouraged and rewarded, but private motivation must ultimately serve
the cause of promoting broad public availability of literature, music, and
the other arts. The immediate effect of our copyright law is to secure a fair
return for an ‘author’s’ creative labor. But the ultimate aim is, by this
incentive, to stimulate artistic creativity for the general public good. ‘The
sole interest of the United States and the primary object in conferring the
monopoly,’ this Court has said, ‘lie in the general benefits derived by the
public from the labors of authors.’ Fox Film Corp. v. Doyal (1932). When
technological change has rendered its literal terms ambiguous, the
Copyright Act must be construed in light of this basic purpose.” Twentieth
Century Music Corp. v. Aiken (1975).
Copyright protection “subsists . . . in original works of authorship fixed in any
tangible medium of expression.” This protection has never accorded the copyright owner
complete control over all possible uses of his work.13 Rather, the Copyright Act grants
Thus, for example, the development and marketing of player pianos and perforated roles of music,
preceded the enactment of the Copyright Act of 1909; innovations in copying techniques gave rise to the
statutory exemption for library copying embodied in § 108 of the 1976 revision of the Copyright law; the
development of the technology that made it possible to retransmit television programs by cable or by
microwave systems, prompted the enactment of the complex provisions set forth in 17 U.S.C. § 111(d)(2)(B)
and § 111(d)(5) after years of detailed congressional study. . . .
12
“Copyright protection became necessary with the invention of the printing press and had its early
beginnings in the British censorship laws. The fortunes of the law of copyright have always been closely
connected with freedom of expression, on the one hand, and with technological improvements in means of
dissemination, on the other. Successive ages have drawn different balances among the interest of the writer
in the control and exploitation of his intellectual property, the related interest of the publisher, and the
competing interest of society in the untrammeled dissemination of ideas.” Foreword to B. Kaplan, An
Unhurried View of Copyright vii–viii (1967).
13
. . . While the law has never recognized an author’s right to absolute control of his work, the natural
tendency of legal rights to express themselves in absolute terms to the exclusion of all else is particularly
pronounced in the history of the constitutionally sanctioned monopolies of the copyright and the patent.
11

Fair Use, Technology and Contributory Infringement

419

the copyright holder “exclusive” rights to use and to authorize the use of his work in five
qualified ways, including reproduction of the copyrighted work in copies. All
reproductions of the work, however, are not within the exclusive domain of the copyright
owner; some are in the public domain. Any individual may reproduce a copyrighted work
for a “fair use;” the copyright owner does not possess the exclusive right to such a use.
The two respondents in this case do not seek relief against the Betamax users who
have allegedly infringed their copyrights. Moreover, this is not a class action on behalf
of all copyright owners who license their works for television broadcast, and respondents
have no right to invoke whatever rights other copyright holders may have to bring
infringement actions based on Betamax copying of their works. As was made clear by
their own evidence, the copying of the respondents’ programs represents a small portion
of the total use of VTR’s. It is, however, the taping of respondents’ own copyrighted
programs that provides them with standing to charge Sony with contributory
infringement. To prevail, they have the burden of proving that users of the Betamax have
infringed their copyrights and that Sony should be held responsible for that infringement.
III
The Copyright Act does not expressly render anyone liable for infringement committed by another. In contrast, the Patent Act expressly brands anyone who “actively
induces infringement of a patent” as an infringer, and further imposes liability on certain
individuals labeled “contributory” infringers. The absence of such express language in the
copyright statute does not preclude the imposition of liability for copyright infringements
on certain parties who have not themselves engaged in the infringing activity.17 For vicarious liability is imposed in virtually all areas of the law, and the concept of contributory
infringement is merely a species of the broader problem of identifying the circumstances
in which it is just to hold one individual accountable for the actions of another.
Such circumstances were plainly present in Kalem Co. v. Harper Brothers (1911),
the copyright decision of this Court on which respondents place their principal reliance.
In Kalem, the Court held that the producer of an unauthorized film dramatization of the
copyrighted book Ben Hur was liable for his sale of the motion picture to jobbers, who
in turn arranged for the commercial exhibition of the film. Justice Holmes, writing for
the Court, explained:
“The defendant not only expected but invoked by advertisement the use
of its films for dramatic reproduction of the story. That was the most
conspicuous purpose for which they could be used, and the one for
which especially they were made. If the defendant did not contribute to
the infringement it is impossible to do so except by taking part in the
final act. It is liable on principles recognized in every part of the law.”
As the District Court correctly observed, however, “the lines between direct infringement, contributory
infringement, and vicarious liability are not clearly drawn. . . .” The lack of clarity in this area may, in part,
be attributable to the fact that an infringer is not merely one who uses a work without authorization by the
copyright owner, but also one who authorizes the use of a copyrighted work without actual authority from
the copyright owner.
We note the parties’ statements that the questions of petitioners’ liability under the “doctrines” of
“direct infringement” and “vicarious liability” are not nominally before this Court. We also observe,
however, that reasoned analysis of respondents’ unprecedented contributory infringement claim necessarily
entails consideration of arguments and case law which may also be forwarded under the other labels, and
indeed the parties to a large extent rely upon such arguments and authority in support of their respective
positions on the issue of contributory infringement.

17

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The use for which the item sold in Kalem had been “especially” made was, of course,
to display the performance that had already been recorded upon it. The producer had
personally appropriated the copyright owner’s protected work and, as the owner of the
tangible medium of expression upon which the protected work was recorded, authorized
that use by his sale of the film to jobbers. But that use of the film was not his to authorize:
the copyright owner possessed the exclusive right to authorize public performances of his
work. Further, the producer personally advertised the unauthorized public performances,
dispelling any possible doubt as to the use of the film which he had authorized.
Respondents argue that Kalem stands for the proposition that supplying the
“means” to accomplish an infringing activity and encouraging that activity through
advertisement are sufficient to establish liability for copyright infringement. This
argument rests on a gross generalization that cannot withstand scrutiny. The producer in
Kalem did not merely provide the “means” to accomplish an infringing activity; the
producer supplied the work itself, albeit in a new medium of expression. Petitioners in
the instant case do not supply Betamax consumers with respondents’ works; respondents
do. Petitioners supply a piece of equipment that is generally capable of copying the entire
range of programs that may be televised: those that are uncopyrighted, those that are
copyrighted but may be copied without objection from the copyright holder, and those
that the copyright holder would prefer not to have copied. The Betamax can be used to
make authorized or unauthorized uses of copyrighted works, but the range of its potential
use is much broader than the particular infringing use of the film Ben Hur involved in
Kalem. Kalem does not support respondents’ novel theory of liability.
Justice Holmes stated that the producer had “contributed” to the infringement of the
copyright, and the label “contributory infringement” has been applied in a number of
lower court copyright cases involving an ongoing relationship between the direct infringer
and the contributory infringer at the time the infringing conduct occurred. In such cases,
as in other situations in which the imposition of vicarious liability is manifestly just, the
“contributory” infringer was in a position to control the use of copyrighted works by
others and had authorized the use without permission from the copyright owner.18 This
case, however, plainly does not fall in that category. The only contact between Sony and
the users of the Betamax that is disclosed by this record occurred at the moment of sale.
The District Court expressly found that “no employee of Sony, Sonam or DDBI had either
direct involvement with the allegedly infringing activity or direct contact with purchasers
of Betamax who recorded copyrighted works off-the-air.” And it further found that “there
was no evidence that any of the copies made by Griffiths or the other individual witnesses
in this suit were influenced or encouraged by [Sony’s] advertisements.”
If vicarious liability is to be imposed on petitioners in this case, it must rest on the
fact that they have sold equipment with constructive knowledge of the fact that their
customers may use that equipment to make unauthorized copies of copyrighted material.
There is no precedent in the law of copyright for the imposition of vicarious liability on
such a theory. The closest analogy is provided by the patent law cases to which it is
18
The so-called “dance hall cases,” Famous Music Corp. v. Bay State Harness Horse Racing and Breeding
Ass’n (1st Cir. 1977) (racetrack retained infringer to supply music to paying customers); KECA MUSIC, Inc.
v. Dingus McGee’s Co. (W.D. Mo. 1977) (cocktail lounge hired musicians to supply music to paying
customers); Dreamland Ball Room v. Shapiro, Bernstein & Co. (7th Cir. 1929) (dance hall hired orchestra to
supply music to paying customers) are often contrasted with the so-called landlord-tenant cases, in which
landlords who leased premises to a direct infringer for a fixed rental and did not participate directly in any
infringing activity were found not to be liable for contributory infringement. . . .

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appropriate to refer because of the historic kinship between patent law and copyright law.19
In the Patent Code both the concept of infringement and the concept of
contributory infringement are expressly defined by statute. The prohibition against
contributory infringement is confined to the knowing sale of a component especially
made for use in connection with a particular patent. There is no suggestion in the statute
that one patentee may object to the sale of a product that might be used in connection
with other patents. Moreover, the Act expressly provides that the sale of a “staple article
or commodity of commerce suitable for substantial noninfringing use” is not contributory
infringement. 35 U.S.C. § 271(c).
When a charge of contributory infringement is predicated entirely on the sale of an
article of commerce that is used by the purchaser to infringe a patent, the public interest
in access to that article of commerce is necessarily implicated. A finding of contributory
infringement does not, of course, remove the article from the market altogether; it does,
however, give the patentee effective control over the sale of that item. Indeed, a finding
of contributory infringement is normally the functional equivalent of holding that the
disputed article is within the monopoly granted to the patentee.21
For that reason, in contributory infringement cases arising under the patent laws the
Court has always recognized the critical importance of not allowing the patentee to extend
his monopoly beyond the limits of his specific grant. These cases deny the patentee any
right to control the distribution of unpatented articles unless they are “unsuited for any
commercial noninfringing use.” Dawson Chemical Co. v. Rohm & Hass Co. (1980). . . .
We recognize there are substantial differences between the patent and copyright
laws. But in both areas the contributory infringement doctrine is grounded on the
recognition that adequate protection of a monopoly may require the courts to look beyond
actual duplication of a device or publication to the products or activities that make such
duplication possible. The staple article of commerce doctrine must strike a balance
between a copyright holder’s legitimate demand for effective—not merely symbolic—
protection of the statutory monopoly, and the rights of others freely to engage in
substantially unrelated areas of commerce. Accordingly, the sale of copying equipment,
The two areas of the law, naturally, are not identical twins, and we exercise the caution which we have
expressed in the past in applying doctrine formulated in one area to the other.
We have consistently rejected the proposition that a similar kinship exists between copyright law and
trademark law, and in the process of doing so have recognized the basic similarities between copyrights and
patents. Given the fundamental differences between copyright law and trademark law, in this copyright case
we do not look to the standard for contributory infringement set forth in Inwood Laboratories, Inc. v. Ives
Laboratories, Inc. (1982), which was crafted for application in trademark cases. There we observed that a
manufacturer or distributor could be held liable to the owner of a trademark if it intentionally induced a
merchant down the chain of distribution to pass off its product as that of the trademark owner’s or if it
continued to supply a product which could readily be passed off to a particular merchant whom it knew was
mislabeling the product with the trademark owner’s mark. If Inwood’s narrow standard for contributory
trademark infringement governed here, respondents’ claim of contributory infringement would merit little
discussion. Sony certainly does not “intentionally induc[e]” its customers to make infringing uses of
respondents’ copyrights, nor does it supply its products to identified individuals known by it to be engaging
in continuing infringement of respondents’ copyrights.
21
It seems extraordinary to suggest that the Copyright Act confers upon all copyright owners collectively,
much less the two respondents in this case, the exclusive right to distribute VTR’s simply because they may
be used to infringe copyrights. That, however, is the logical implication of their claim. The request for an
injunction below indicates that respondents seek, in effect, to declare VTR’s contraband. Their suggestion in
this Court that a continuing royalty pursuant to a judicially created compulsory license would be an
acceptable remedy merely indicates that respondents, for their part, would be willing to license their claimed
monopoly interest in VTR’s to petitioners in return for a royalty.
19

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like the sale of other articles of commerce, does not constitute contributory infringement
if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need
merely be capable of substantial noninfringing uses.
IV
The question is thus whether the Betamax is capable of commercially significant
noninfringing uses. In order to resolve that question, we need not explore all the different
potential uses of the machine and determine whether or not they would constitute
infringement. Rather, we need only consider whether on the basis of the facts as found
by the district court a significant number of them would be non-infringing. Moreover, in
order to resolve this case we need not give precise content to the question of how much
use is commercially significant. For one potential use of the Betamax plainly satisfies
this standard, however it is understood: private, noncommercial time-shifting in the
home. It does so both (A) because respondents have no right to prevent other copyright
holders from authorizing it for their programs, and (B) because the District Court’s
factual findings reveal that even the unauthorized home time-shifting of respondents’
programs is legitimate fair use.
A. Authorized Time Shifting
Each of the respondents owns a large inventory of valuable copyrights, but in the
total spectrum of television programming their combined market share is small. The
exact percentage is not specified, but it is well below 10%. If they were to prevail, the
outcome of this litigation would have a significant impact on both the producers and the
viewers of the remaining 90% of the programming in the Nation. No doubt, many other
producers share respondents’ concern about the possible consequences of unrestricted
copying. Nevertheless the findings of the District Court make it clear that time-shifting
may enlarge the total viewing audience and that many producers are willing to allow
private time-shifting to continue, at least for an experimental time period.
The District Court found:
“Even if it were deemed that home-use recording of copyrighted
material constituted infringement, the Betamax could still legally be
used to record noncopyrighted material or material whose owners consented to the copying. An injunction would deprive the public of the
ability to use the Betamax for this noninfringing off-the-air recording.
“Defendants introduced considerable testimony at trial about the
potential for such copying of sports, religious, educational and other programming. This included testimony from representatives of the Offices
of the Commissioners of the National Football, Basketball, Baseball and
Hockey Leagues and Associations, the Executive Director of National
Religious Broadcasters and various educational communications
agencies. Plaintiffs attack the weight of the testimony offered and also
contend that an injunction is warranted because infringing uses outweigh
noninfringing uses.”
“Whatever the future percentage of legal versus illegal home-use
recording might be, an injunction which seeks to deprive the public of
the very tool or article of commerce capable of some noninfringing use
would be an extremely harsh remedy, as well as one unprecedented in
copyright law.”

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Although the District Court made these statements in the context of considering
the propriety of injunctive relief, the statements constitute a finding that the evidence
concerning “sports, religious, educational, and other programming” was sufficient to
establish a significant quantity of broadcasting whose copying is now authorized, and a
significant potential for future authorized copying. That finding is amply supported by
the record. In addition to the religious and sports officials identified explicitly by the
District Court, two items in the record deserve specific mention.
First is the testimony of John Kenaston, the station manager of Channel 58, an
educational station in Los Angeles affiliated with the Public Broadcasting Service. He
explained and authenticated the station’s published guide to its programs. For each
program, the guide tells whether unlimited home taping is authorized, home taping is
authorized subject to certain restrictions (such as erasure within seven days), or home
taping is not authorized at all. The Spring 1978 edition of the guide described 107
programs. Sixty-two of those programs or 58% authorize some home taping. Twenty-one
of them or almost 20% authorize unrestricted home taping.
Second is the testimony of Fred Rogers, president of the corporation that produces
and owns the copyright on Mr. Rogers’ Neighborhood. The program is carried by more
public television stations than any other program. Its audience numbers over 3,000,000
families a day. He testified that he had absolutely no objection to home taping for
noncommercial use and expressed the opinion that it is a real service to families to be
able to record children’s programs and to show them at appropriate times.27
If there are millions of owners of VTR’s who make copies of televised sports
events, religious broadcasts, and educational programs such as Mister Rogers’
Neighborhood, and if the proprietors of those programs welcome the practice, the
business of supplying the equipment that makes such copying feasible should not be
stifled simply because the equipment is used by some individuals to make unauthorized
reproductions of respondents’ works. The respondents do not represent a class composed
of all copyright holders. Yet a finding of contributory infringement would inevitably
frustrate the interests of broadcasters in reaching the portion of their audience that is
available only through time-shifting.
Of course, the fact that other copyright holders may welcome the practice of timeshifting does not mean that respondents should be deemed to have granted a license to
copy their programs. Third party conduct would be wholly irrelevant in an action for
direct infringement of respondents’ copyrights. But in an action for contributory
infringement against the seller of copying equipment, the copyright holder may not
prevail unless the relief that he seeks affects only his programs, or unless he speaks for
virtually all copyright holders with an interest in the outcome. In this case, the record
makes it perfectly clear that there are many important producers of national and local
television programs who find nothing objectionable about the enlargement in the size of
the television audience that results from the practice of time-shifting for private home
27
“Some public stations, as well as commercial stations, program the ‘Neighborhood’ at hours when some
children cannot use it. I think that it’s a real service to families to be able to record such programs and show
them at appropriate times. I have always felt that with the advent of all of this new technology that allows
people to tape the ‘Neighborhood’ off-the-air, and I’m speaking for the ‘Neighborhood’ because that’s what
I produce, that they then become much more active in the programming of their family’s television life. Very
frankly, I am opposed to people being programmed by others. My whole approach in broadcasting has always
been ‘You are an important person just the way you are. You can make healthy decisions.’ Maybe I’m going
on too long, but I just feel that anything that allows a person to be more active in the control of his or her
life, in a healthy way, is important.”

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use.28 The seller of the equipment that expands those producers’ audiences cannot be a
contributory infringer if, as is true in this case, it has had no direct involvement with any
infringing activity.
B. Unauthorized Time-Shifting
Even unauthorized uses of a copyrighted work are not necessarily infringing. An
unlicensed use of the copyright is not an infringement unless it conflicts with one of the
specific exclusive rights conferred by the copyright statute. Moreover, the definition of
exclusive rights in § 106 of the present Act is prefaced by the words “subject to sections
107 through 118.” Those sections describe a variety of uses of copyrighted material that
“are not infringements of copyright notwithstanding the provisions of § 106.” The most
pertinent in this case is § 107, the legislative endorsement of the doctrine of “fair use.”
That section identifies various factors that enable a Court to apply an “equitable
rule of reason” analysis to particular claims of infringement. Although not conclusive,
the first factor requires that “the commercial or nonprofit character of an activity” be
weighed in any fair use decision. If the Betamax were used to make copies for a
commercial or profit-making purpose, such use would presumptively be unfair. The
contrary presumption is appropriate here, however, because the District Court’s findings
plainly establish that time-shifting for private home use must be characterized as a
noncommercial, nonprofit activity. Moreover, when one considers the nature of a
televised copyrighted audiovisual work, see 17 U.S.C. § 107(2), and that timeshifting
merely enables a viewer to see such a work which he had been invited to witness in its
entirety free of charge, the fact that the entire work is reproduced, § 107(3), does not
have its ordinary effect of militating against a finding of fair use.33
28
. . . In the context of television programming, some producers evidently believe that permitting home
viewers to make copies of their works off the air actually enhances the value of their copyrights. Irrespective
of their reasons for authorizing the practice, they do so, and in significant enough numbers to create a
substantial market for a non-infringing use of the Sony VTR’s. No one could dispute the legitimacy of that
market if the producers had authorized home taping of their programs in exchange for a license fee paid
directly by the home user. The legitimacy of that market is not compromised simply because these producers
have authorized home taping of their programs without demanding a fee from the home user. The copyright
law does not require a copyright owner to charge a fee for the use of his works, and as this record clearly
demonstrates, the owner of a copyright may well have economic or noneconomic reasons for permitting
certain kinds of copying to occur without receiving direct compensation from the copier. It is not the role of
the courts to tell copyright holders the best way for them to exploit their copyrights: even if respondents’
competitors were ill-advised in authorizing home videotaping, that would not change the fact that they have
created a substantial market for a paradigmatic non-infringing use of petitioners’ product.
33
It has been suggested that “consumptive uses of copyrights by home VTR users are commercial even if
the consumer does not sell the homemade tape because the consumer will not buy tapes separately sold by
the copyrightholder.” Home Recording of Copyrighted Works: Hearing before Subcommittee on Courts,
Civil Liberties and the Administration of Justice of the House Committee on the Judiciary, 97th Congress,
2d Session, pt. 2, p. 1250 (1982) (memorandum of Prof. Laurence H. Tribe). Furthermore, “[t]he error in
excusing such theft as noncommercial,” we are told, “can be seen by simple analogy: jewel theft is not
converted into a noncommercial veniality if stolen jewels are simply worn rather than sold.” The premise
and the analogy are indeed simple, but they add nothing to the argument. The use to which stolen jewelry is
put is quite irrelevant in determining whether depriving its true owner of his present possessory interest in it
is venial; because of the nature of the item and the true owner’s interests in physical possession of it, the law
finds the taking objectionable even if the thief does not use the item at all. Theft of a particular item of
personal property of course may have commercial significance, for the thief deprives the owner of his right
to sell that particular item to any individual. Timeshifting does not even remotely entail comparable consequences to the copyright owner. Moreover, the timeshifter no more steals the program by watching it once
than does the live viewer, and the live viewer is no more likely to buy pre-recorded videotapes than is the

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This is not, however, the end of the inquiry because Congress has also directed us
to consider “the effect of the use upon the potential market for or value of the copyrighted
work.” § 107(4). The purpose of copyright is to create incentives for creative effort. Even
copying for noncommercial purposes may impair the copyright holder’s ability to obtain
the rewards that Congress intended him to have. But a use that has no demonstrable effect
upon the potential market for, or the value of, the copyrighted work need not be prohibited
in order to protect the author’s incentive to create. The prohibition of such noncommercial
uses would merely inhibit access to ideas without any countervailing benefit.
Thus, although every commercial use of copyrighted material is presumptively an
unfair exploitation of the monopoly privilege that belongs to the owner of the copyright,
noncommercial uses are a different matter. A challenge to a noncommercial use of a
copyrighted work requires proof either that the particular use is harmful, or that if it
should become widespread, it would adversely affect the potential market for the
copyrighted work. Actual present harm need not be shown; such a requirement would
leave the copyright holder with no defense against predictable damage. Nor is it
necessary to show with certainty that future harm will result. What is necessary is a
showing by a preponderance of the evidence that some meaningful likelihood of future
harm exists. If the intended use is for commercial gain, that likelihood may be presumed.
But if it is for a noncommercial purpose, the likelihood must be demonstrated.
In this case, respondents failed to carry their burden with regard to home timeshifting. . . .
The District Court’s conclusions are buttressed by the fact that to the extent timeshifting expands public access to freely broadcast television programs, it yields societal
benefits. Earlier this year, in Community Television of Southern California v. Gottfried,
we acknowledged the public interest in making television broadcasting more available.
Concededly, that interest is not unlimited. But it supports an interpretation of the concept
of “fair use” that requires the copyright holder to demonstrate some likelihood of harm
before he may condemn a private act of time-shifting as a violation of federal law.
When these factors are all weighed in the “equitable rule of reason” balance, we
must conclude that this record amply supports the District Court’s conclusion that home
time-shifting is fair use. In light of the findings of the District Court regarding the state
of the empirical data, it is clear that the Court of Appeals erred in holding that the statute
as presently written bars such conduct.40
timeshifter. Indeed, no live viewer would buy a pre-recorded videotape if he did not have access to a VTR.
40
The Court of Appeals chose not to engage in any “equitable rule of reason” analysis in this case. Instead,
it assumed that the category of “fair use” is rigidly circumscribed by a requirement that every such use must
be “productive.” It therefore concluded that copying a television program merely to enable the viewer to
receive information or entertainment that he would otherwise miss because of a personal scheduling conflict
could never be fair use. That understanding of “fair use” was erroneous.
Congress has plainly instructed us that fair use analysis calls for a sensitive balancing of interests.
The distinction between “productive” and “unproductive” uses may be helpful in calibrating the balance, but
it cannot be wholly determinative. Although copying to promote a scholarly endeavor certainly has a stronger
claim to fair use than copying to avoid interrupting a poker game, the question is not simply two-dimensional.
For one thing, it is not true that all copyrights are fungible. Some copyrights govern material with broad
potential secondary markets. Such material may well have a broader claim to protection because of the
greater potential for commercial harm. Copying a news broadcast may have a stronger claim to fair use than
copying a motion picture. And, of course, not all uses are fungible. Copying for commercial gain has a much
weaker claim to fair use than copying for personal enrichment. But the notion of social “productivity” cannot
be a complete answer to this analysis. A teacher who copies to prepare lecture notes is clearly productive.
But so is a teacher who copies for the sake of broadening his personal understanding of his specialty. Or a

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In summary, the record and findings of the District Court lead us to two conclusions.
First, Sony demonstrated a significant likelihood that substantial numbers of copyright
holders who license their works for broadcast on free television would not object to having
their broadcasts time-shifted by private viewers. And second, respondents failed to
demonstrate that time-shifting would cause any likelihood of nonminimal harm to the
potential market for, or the value of, their copyrighted works. The Betamax is, therefore,
capable of substantial noninfringing uses. Sony’s sale of such equipment to the general
public does not constitute contributory infringement of respondent’s copyrights.
V
“The direction of Art. I is that Congress shall have the power to promote
the progress of science and the useful arts. When, as here, the
Constitution is permissive, the sign of how far Congress has chosen to
go can come only from Congress.” Deepsouth Packing Co. v. Laitram
Corp. (1972).
One may search the Copyright Act in vain for any sign that the elected
representatives of the millions of people who watch television every day have made it
unlawful to copy a program for later viewing at home, or have enacted a flat prohibition
against the sale of machines that make such copying possible.
It may well be that Congress will take a fresh look at this new technology, just as
it so often has examined other innovations in the past. But it is not our job to apply laws
that have not yet been written. Applying the copyright statute, as it now reads, to the facts
as they have been developed in this case, the judgment of the Court of Appeals must be
reversed.
It is so ordered.
Justice BLACKMUN, with whom Justice MARSHALL, Justice POWELL, and Justice
REHNQUIST join, dissenting.
. . . IV
A
. . . The purpose of copyright protection, in the words of the Constitution, is to
“promote the Progress of Science and useful Arts.” Copyright is based on the belief that
by granting authors the exclusive rights to reproduce their works, they are given an
incentive to create, and that “encouragement of individual effort by personal gain is the
best way to advance public welfare through the talents of authors and inventors in
‘Science and the useful Arts.’” Mazer v. Stein (1954). The monopoly created by copyright
thus rewards the individual author in order to benefit the public.
legislator who copies for the sake of broadening her understanding of what her constituents are watching; or
a constituent who copies a news program to help make a decision on how to vote.
Making a copy of a copyrighted work for the convenience of a blind person is expressly identified
by the House Committee Report as an example of fair use, with no suggestion that anything more than a
purpose to entertain or to inform need motivate the copying. In a hospital setting, using a VTR to enable a
patient to see programs he would otherwise miss has no productive purpose other than contributing to the
psychological well-being of the patient. Virtually any time-shifting that increases viewer access to television
programming may result in a comparable benefit. The statutory language does not identify any dichotomy
between productive and nonproductive time-shifting, but does require consideration of the economic
consequences of copying.

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There are situations, nevertheless, in which strict enforcement of this monopoly
would inhibit the very “Progress of Science and useful Arts” that copyright is intended to
promote. An obvious example is the researcher or scholar whose own work depends on
the ability to refer to and to quote the work of prior scholars. Obviously, no author could
create a new work if he were first required to repeat the research of every author who had
gone before him. The scholar, like the ordinary user, of course could be left to bargain
with each copyright owner for permission to quote from or refer to prior works. But there
is a crucial difference between the scholar and the ordinary user. When the ordinary user
decides that the owner’s price is too high, and forgoes use of the work, only the individual
is the loser. When the scholar forgoes the use of a prior work, not only does his own work
suffer, but the public is deprived of his contribution to knowledge. The scholar’s work, in
other words, produces external benefits from which everyone profits. In such a case, the
fair use doctrine acts as a form of subsidy—albeit at the first author’s expense—to permit
the second author to make limited use of the first author’s work for the public good.
A similar subsidy may be appropriate in a range of areas other than pure
scholarship. The situations in which fair use is most commonly recognized are listed in
§ 107 itself; fair use may be found when a work is used “for purposes such as criticism,
comment, news reporting, teaching, . . . scholarship, or research.” The House and Senate
Reports expand on this list somewhat, and other examples may be found in the case law.
Each of these uses, however, reflects a common theme: each is a productive use, resulting
in some added benefit to the public beyond that produced by the first author’s work. The
fair use doctrine, in other words, permits works to be used for “socially laudable
purposes.” See Copyright Office, Briefing Papers on Current Issues, reprinted in 1975
House Hearings 2051, 2055. I am aware of no case in which the reproduction of a
copyrighted work for the sole benefit of the user has been held to be fair use.
I do not suggest, of course, that every productive use is a fair use. A finding of fair
use still must depend on the facts of the individual case, and on whether, under the circumstances, it is reasonable to expect the user to bargain with the copyright owner for use of
the work. The fair use doctrine must strike a balance between the dual risks created by the
copyright system: on the one hand, that depriving authors of their monopoly will reduce
their incentive to create, and, on the other, that granting authors a complete monopoly will
reduce the creative ability of others. The inquiry is necessarily a flexible one, and the endless variety of situations that may arise precludes the formulation of exact rules. But when
a user reproduces an entire work and uses it for its original purpose, with no added benefit
to the public, the doctrine of fair use usually does not apply. There is then no need
whatsoever to provide the ordinary user with a fair use subsidy at the author’s expense.
The making of a videotape recording for home viewing is an ordinary rather than a
productive use of the Studios’ copyrighted works. The District Court found that “Betamax
owners use the copy for the same purpose as the original. They add nothing of their own.”
Although applying the fair use doctrine to home VTR recording, as Sony argues, may
increase public access to material broadcast free over the public airwaves, I think Sony’s
argument misconceives the nature of copyright. Copyright gives the author a right to limit
or even to cut off access to his work. A VTR recording creates no public benefit sufficient
to justify limiting this right. Nor is this right extinguished by the copyright owner’s choice
to make the work available over the airwaves. Section 106 of the 1976 Act grants the
copyright owner the exclusive right to control the performance and the reproduction of
his work, and the fact that he has licensed a single television performance is really
irrelevant to the existence of his right to control its reproduction. Although a television

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broadcast may be free to the viewer, this fact is equally irrelevant; a book borrowed from
the public library may not be copied any more freely than a book that is purchased.
It may be tempting, as, in my view, the Court today is tempted, to stretch the
doctrine of fair use so as to permit unfettered use of this new technology in order to
increase access to television programming. But such an extension risks eroding the very
basis of copyright law, by depriving authors of control over their works and consequently
of their incentive to create. Even in the context of highly productive educational uses,
Congress has avoided this temptation; in passing the 1976 Act, Congress made it clear
that off-the-air videotaping was to be permitted only in very limited situations. And, the
Senate Report adds, “[t]he committee does not intend to suggest . . . that off-the-air
recording for convenience would under any circumstances, be considered ‘fair use.’” I
cannot disregard these admonitions. . . .
Questions:
1.) Sony is the first and perhaps the most important modern decision on secondary
copyright liability. What requirements does it lay down for the imposition of such
liability on a manufacturer of a device? Under that rule, was the fair use part of the
holding necessary? Even if the court had held that home taping was not fair use, would
Sony have been found liable?
2.) Why do you think that internet copyright debates have focused extensively on
contributory or secondary types of infringement, rather than on the illicit copying by the
direct infringer?
3.) Justice Blackmun thinks that the Court is stretching fair use to “increase access to
television programming.” Do you think that is the majority’s main goal? What are they
concerned about?
4.) The dissenting Justices stress a particular vision of fair use—one built around
“productive use.” In this vision, the second comer uses the original copyrighted
expression to create something new—a critical book review, for example, or a scholarly
discussion. Precisely because of the productive nature of the second use, we know that
the constitutional purpose of “promoting the progress” is being furthered. Authors are
standing on the shoulders of other authors—not merely passively receiving their works,
but actively building something out of them. Viewed through this lens, the activity of a
bunch of couch potatoes eating Doritos while watching reruns of The Dukes of Hazzard
does not seem particularly compelling as a fair use. Through the eyes of the majority,
though, the activity that is going on here looks very different. There is productivity and
innovation involved, activities that should not be stifled by the copyright holder. Who is
doing the innovating? Is the innovation involved in “the fair use” analyzed under § 107
or is it that copyright’s reach needs to be trimmed lest it pull in and exert control over
other activities? Do you agree with the majority or dissent?
5.) What rules does Sony lay down about the burden of proof on the market harm portion
of the fair use analysis?

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James Boyle, The Public Domain

Please read The Public Domain pp. 63–71

There is a fairly solid tradition in intellectual property policy of what I call “20/20
downside” vision. All of the threats posed by any new technology—the player piano, the
jukebox, the photocopier, the VCR, the Internet—are seen with extraordinary clarity. The
opportunities, however, particularly those which involve changing a business model or
restructuring a market, are dismissed as phantoms. The downside dominates the field,
the upside is invisible. The story of video recorders is the best-known example. When
video recorders—another technology promising cheaper copying—first appeared, the
reaction of movie studios was one of horror. Their business plans relied upon showing
movies in theaters and then licensing them to television stations. VCRs and Betamaxes
fit nowhere in this plan; they were seen merely as copyright violation devices. Hollywood
tried to have them taxed to pay for the losses that would be caused. Their assumption?
Cheaper copying demands stronger rights.
Having lost that battle, the movie studios tried to have the manufacturers of the
recording devices found liable for contributory copyright infringement; liable, in other
words, for assisting the copyright violations that could be carried out by the owners of
Sony Betamaxes. This, of course, was exactly the same legal claim that would be made
in the Napster case. In the Sony case, however, the movie companies lost. The Supreme
Court said that recording of TV programs to “time-shift” them to a more convenient hour
was a fair use. The movie studios’ claims were rejected.
Freed from the threat of liability, the price of video recorders continued to fall. They
flooded consumers’ houses at a speed unparalleled until the arrival of the World Wide
Web. All these boxes sitting by TVs now cried out for content, content that was provided
by an emerging video rental market. Until the triumph of DVDs, the videocassette rental
market made up more than 50 percent of the movie industry’s revenues. Were losses
caused by video recorders? To be sure. Some people who might have gone to see a movie
in a theater because the TV schedule was inconvenient could instead record the show and
watch it later. Videos could even be shared with friends and families—tattered copies of
Disney movies recorded from some cable show could be passed on to siblings whose kids
have reached the appropriate age. VCRs were also used for copying that was clearly
illicit—large-scale duplication and sale of movies by someone other than the rights holder.
A cheaper copying technology definitely caused losses. But it also provided substantial
gains, gains that far outweighed the losses. Ironically, had the movie companies “won” in
the Sony case, they might now be worse off.
The Sony story provides us with some useful lessons—first, this 20/20 downside
vision is a poor guide to copyright policy. Under its sway, some companies will invariably
equate greater control with profit and cheaper copying with loss. They will conclude, sometimes rightly, that their very existence is threatened, and, sometimes wrongly, that the threat
is to innovation and culture itself rather than to their particular way of delivering it. They
will turn to the legislature and the courts for guarantees that they can go on doing business
in the old familiar ways. Normally, the marketplace is supposed to provide correctives to
this kind of myopia. Upstart companies, not bound by the habits of the last generation, are
supposed to move nimbly to harvest the benefits from the new technology and to outcompete the lumbering dinosaurs. In certain situations, though, competition will not work:
• if the dinosaurs are a cartel strong enough to squelch competition;

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if they have enlisted the state to make the threatening technology illegal,
describing it as a predatory encroachment on the “rights” of the old guard
rather than aggressive competition;
• if ingrained prejudices are simply so strong that the potential business benefits
take years to become apparent; or
• if the market has “locked in” on a dominant standard—a technology or an
operating system, say—to which new market entrants do not have legal access.
In those situations, markets cannot be counted on to self-correct. Unfortunately,
and this is a key point, intellectual property policy frequently deals with controversies in
which all of these conditions hold true. . . .
Read the rest
•

2.) Unpublished works, “Scoops” and Political Speech

Harper & Row v. Nation Enterprises

471 U.S. 539 (1985)

Justice O’CONNOR delivered the opinion of the Court.
In March 1979, an undisclosed source provided The Nation Magazine with the
unpublished manuscript of “A Time to Heal: The Autobiography of Gerald R. Ford.”
Working directly from the purloined manuscript, an editor of The Nation produced a
short piece entitled “The Ford Memoirs—Behind the Nixon Pardon.” The piece was
timed to “scoop” an article scheduled shortly to appear in Time Magazine. Time had
agreed to purchase the exclusive right to print prepublication excerpts from the copyright
holders, Harper & Row Publishers, Inc. (hereinafter Harper & Row), and Reader’s Digest
Association, Inc. (hereinafter Reader’s Digest). As a result of The Nation article, Time
canceled its agreement. Petitioners brought a successful copyright action against The
Nation. On appeal, the Second Circuit reversed the lower court’s finding of infringement,
holding that The Nation’s act was sanctioned as a “fair use” of the copyrighted material.
We granted certiorari, 467 U. S. 1214 (1984), and we now reverse.
I
In February 1977, shortly after leaving the White House, former President Gerald R. Ford
contracted with petitioners Harper & Row and Reader’s Digest, to publish his as yet
unwritten memoirs. The memoirs were to contain “significant hitherto unpublished
material” concerning the Watergate crisis, Mr. Ford’s pardon of former President Nixon
and “Mr. Ford’s reflections on this period of history, and the morality and personalities
involved.” In addition to the right to publish the Ford memoirs in book form, the agreement
gave petitioners the exclusive right to license prepublication excerpts, known in the trade
as “first serial rights.” Two years later, as the memoirs were nearing completion, petitioners
negotiated a prepublication licensing agreement with Time, a weekly news magazine. Time
agreed to pay $25,000, $12,500 in advance and an additional $12,500 at publication, in
exchange for the right to excerpt 7,500 words from Mr. Ford’s account of the Nixon pardon.
The issue featuring the excerpts was timed to appear approximately one week before
shipment of the full length book version to bookstores. Exclusivity was an important consideration; Harper & Row instituted procedures designed to maintain the confidentiality of
the manuscript, and Time retained the right to renegotiate the second payment should the
material appear in print prior to its release of the excerpts.

Unpublished works, “Scoops” and Political Speech

Excerpt from “The Ford Memoirs: Behind the Nixon Pardon,” The Nation (April 7, 1979).

431

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Two to three weeks before the Time article’s scheduled release, an unidentified
person secretly brought a copy of the Ford manuscript to Victor Navasky, editor of The
Nation, a political commentary magazine. Mr. Navasky knew that his possession of the
manuscript was not authorized and that the manuscript must be returned quickly to his
“source” to avoid discovery. He hastily put together what he believed was “a real hot
news story” composed of quotes, paraphrases, and facts drawn exclusively from the
manuscript. Mr. Navasky attempted no independent commentary, research or criticism,
in part because of the need for speed if he was to “make news” by “publish[ing] in
advance of publication of the Ford book.” The 2,250-word article, reprinted in the
Appendix to this opinion, appeared on April 3, 1979. As a result of The Nation’s article,
Time canceled its piece and refused to pay the remaining $12,500.
. . . The District Court rejected respondents’ argument that The Nation’s piece was a
“fair use” sanctioned by § 107 of the Act. . . . The court awarded actual damages of $12,500.
A divided panel of the Court of Appeals for the Second Circuit reversed. . . . The
Court of Appeals was especially influenced by the “politically significant” nature of the
subject matter and its conviction that it is not “the purpose of the Copyright Act to impede
that harvest of knowledge so necessary to a democratic state” or “chill the activities of
the press by forbidding a circumscribed use of copyrighted words.”
II
. . . The Nation has admitted to lifting verbatim quotes of the author’s original
language totaling between 300 and 400 words and constituting some 13% of The Nation
article. In using generous verbatim excerpts of Mr. Ford’s unpublished manuscript to
lend authenticity to its account of the forthcoming memoirs, The Nation effectively
arrogated to itself the right of first publication, an important marketable subsidiary right.
For the reasons set forth below, we find that this use of the copyrighted manuscript, even
stripped to the verbatim quotes conceded by The Nation to be copyrightable expression,
was not a fair use within the meaning of the Copyright Act.
III
A
. . . Perhaps because the fair use doctrine was predicated on the author’s implied
consent to “reasonable and customary” use when he released his work for public
consumption, fair use traditionally was not recognized as a defense to charges of copying
from an author’s as yet unpublished works. Under common-law copyright, “the property
of the author . . . in his intellectual creation [was] absolute until he voluntarily part[ed] with
the same.” American Tobacco Co. v. Werckmeister (1907). This absolute rule, however,
was tempered in practice by the equitable nature of the fair use doctrine. In a given case,
factors such as implied consent through de facto publication on performance or
dissemination of a work may tip the balance of equities in favor of prepublication use. But
it has never been seriously disputed that “the fact that the plaintiff’s work is unpublished
. . . is a factor tending to negate the defense of fair use.” Publication of an author’s
expression before he has authorized its dissemination seriously infringes the author’s right
to decide when and whether it will be made public, a factor not present in fair use of
published works. Respondents contend, however, that Congress, in including first
publication among the rights enumerated in § 106, which are expressly subject to fair use
under § 107, intended that fair use would apply in pari materia to published and
unpublished works. The Copyright Act does not support this proposition. . . .

Unpublished works, “Scoops” and Political Speech

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Though the right of first publication, like the other rights enumerated in § 106, is
expressly made subject to the fair use provision of § 107, fair use analysis must always
be tailored to the individual case. The nature of the interest at stake is highly relevant to
whether a given use is fair. From the beginning, those entrusted with the task of revision
recognized the “overbalancing reasons to preserve the common law protection of
undisseminated works until the author or his successor chooses to disclose them.”
Copyright Law Revision, Report of the Register of Copyrights on the General Revision
of the U. S. Copyright Law, 87th Cong., 1st Sess., 41 (Comm. Print 1961). The right of
first publication implicates a threshold decision by the author whether and in what form
to release his work. First publication is inherently different from other § 106 rights in
that only one person can be the first publisher; as the contract with Time illustrates, the
commercial value of the right lies primarily in exclusivity. Because the potential damage
to the author from judicially enforced “sharing” of the first publication right with
unauthorized users of his manuscript is substantial, the balance of equities in evaluating
such a claim of fair use inevitably shifts. . . .
. . . We conclude that the unpublished nature of a work is “[a] key, though not
necessarily determinative, factor” tending to negate a defense of fair use.
We also find unpersuasive respondents’ argument that fair use may be made of a
soon-to-be-published manuscript on the ground that the author has demonstrated he has
no interest in nonpublication. This argument assumes that the unpublished nature of
copyrighted material is only relevant to letters or other confidential writings not intended
for dissemination. It is true that common-law copyright was often enlisted in the service
of personal privacy. In its commercial guise, however, an author’s right to choose when
he will publish is no less deserving of protection. The period encompassing the work’s
initiation, its preparation, and its grooming for public dissemination is a crucial one for
any literary endeavor. . . . The obvious benefit to author and public alike of assuring
authors the leisure to develop their ideas free from fear of expropriation outweighs any
short-term “news value” to be gained from premature publication of the author’s
expression. The author’s control of first public distribution implicates not only his
personal interest in creative control but his property interest in exploitation of
prepublication rights, which are valuable in themselves and serve as a valuable adjunct to
publicity and marketing. Under ordinary circumstances, the author’s right to control the
first public appearance of his undisseminated expression will outweigh a claim of fair use.
B
Respondents, however, contend that First Amendment values require a different
rule under the circumstances of this case. The thrust of the decision below is that “[t]he
scope of [fair use] is undoubtedly wider when the information conveyed relates to matters
of high public concern.” Respondents advance the substantial public import of the subject
matter of the Ford memoirs as grounds for excusing a use that would ordinarily not pass
muster as a fair use—the piracy of verbatim quotations for the purpose of “scooping” the
authorized first serialization. Respondents explain their copying of Mr. Ford’s expression
as essential to reporting the news story it claims the book itself represents. In respondents’
view, not only the facts contained in Mr. Ford’s memoirs, but “the precise manner in
which [he] expressed himself [were] as newsworthy as what he had to say.” Respondents
argue that the public’s interest in learning this news as fast as possible outweighs the
right of the author to control its first publication.
The Second Circuit noted, correctly, that copyright’s idea/expression dichotomy

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“strike[s] a definitional balance between the First Amendment and the Copyright Act by
permitting free communication of facts while still protecting an author’s expression.” No
author may copyright his ideas or the facts he narrates. 17 U. S. C. § 102(b). As this Court
long ago observed: “[T]he news element—the information respecting current events contained in the literary production—is not the creation of the writer, but is a report of matters
that ordinarily are publici juris; it is the history of the day.” International News Service v.
Associated Press (1918). But copyright assures those who write and publish factual
narratives such as “A Time to Heal” that they may at least enjoy the right to market the
original expression contained therein as just compensation for their investment.
Respondents’ theory, however, would expand fair use to effectively destroy any
expectation of copyright protection in the work of a public figure. Absent such protection,
there would be little incentive to create or profit in financing such memoirs, and the public
would be denied an important source of significant historical information. . . .
Nor do respondents assert any actual necessity for circumventing the copyright
scheme with respect to the types of works and users at issue here. Where an author and
publisher have invested extensive resources in creating an original work and are poised
to release it to the public, no legitimate aim is served by pre-empting the right of first
publication. The fact that the words the author has chosen to clothe his narrative may of
themselves be “newsworthy” is not an independent justification for unauthorized
copying of the author’s expression prior to publication. . . .
In our haste to disseminate news, it should not be forgotten that the Framers
intended copyright itself to be the engine of free expression. By establishing a marketable
right to the use of one’s expression, copyright supplies the economic incentive to create
and disseminate ideas. . . .
It is fundamentally at odds with the scheme of copyright to accord lesser rights in
those works that are of greatest importance to the public. Such a notion ignores the major
premise of copyright and injures author and public alike. “[T]o propose that fair use be
imposed whenever the ‘social value [of dissemination] . . . outweighs any detriment to
the artist,’ would be to propose depriving copyright owners of their right in the property
precisely when they encounter those users who could afford to pay for it.”
Moreover, freedom of thought and expression “includes both the right to speak
freely and the right to refrain from speaking at all.” Wooley v. Maynard (1977). Courts
and commentators have recognized that copyright, and the right of first publication in
particular, serve this countervailing First Amendment value.
In view of the First Amendment protections already embodied in the Copyright
Act’s distinction between copyrightable expression and uncopyrightable facts and ideas,
and the latitude for scholarship and comment traditionally afforded by fair use, we see
no warrant for expanding the doctrine of fair use to create what amounts to a public figure
exception to copyright. . . .
IV
. . . Purpose of the Use. The Second Circuit correctly identified news reporting as
the general purpose of The Nation’s use. News reporting is one of the examples
enumerated in § 107 to “give some idea of the sort of activities the courts might regard
as fair use under the circumstances.” Senate Report. This listing was not intended to be
exhaustive, or to single out any particular use as presumptively a “fair” use. The drafters
resisted pressures from special interest groups to create presumptive categories of fair
use, but structured the provision as an affirmative defense requiring a case-by-case

Unpublished works, “Scoops” and Political Speech

435

analysis. The fact that an article arguably is “news” and therefore a productive use is
simply one factor in a fair use analysis.
We agree with the Second Circuit that the trial court erred in fixing on whether the
information contained in the memoirs was actually new to the public. As Judge Meskill
wisely noted, “[c]ourts should be chary of deciding what is and what is not news.” The
Nation has every right to seek to be the first to publish information. But The Nation went
beyond simply reporting uncopyrightable information and actively sought to exploit the
headline value of its infringement, making a “news event” out of its unauthorized first
publication of a noted figure’s copyrighted expression.
The fact that a publication was commercial as opposed to nonprofit is a separate
factor that tends to weigh against a finding of fair use. “[E]very commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that
belongs to the owner of the copyright.” Sony Corp. of America v. Universal City Studios,
Inc. In arguing that the purpose of news reporting is not purely commercial, The Nation
misses the point entirely. The crux of the profit/nonprofit distinction is not whether the sole
motive of the use is monetary gain but whether the user stands to profit from exploitation
of the copyrighted material without paying the customary price.
In evaluating character and purpose we cannot ignore The Nation’s stated purpose
of scooping the forthcoming hard-cover and Time abstracts. The Nation’s use had not
merely the incidental effect but the intended purpose of supplanting the copyright holder’s
commercially valuable right of first publication. Also relevant to the “character” of the use
is “the propriety of the defendant’s conduct.” The trial court found that The Nation
knowingly exploited a purloined manuscript. Unlike the typical claim of fair use, The
Nation cannot offer up even the fiction of consent as justification. Like its competitor newsweekly, it was free to bid for the right of abstracting excerpts from “A Time to Heal.” . . .
Nature of the Copyrighted Work. Second, the Act directs attention to the nature of
the copyrighted work. “A Time to Heal” may be characterized as an unpublished
historical narrative or autobiography. The law generally recognizes a greater need to
disseminate factual works than works of fiction or fantasy. . . .
Some of the briefer quotes from the memoirs are arguably necessary adequately to
convey the facts; for example, Mr. Ford’s characterization of the White House tapes as
the “smoking gun” is perhaps so integral to the idea expressed as to be inseparable from
it. But The Nation did not stop at isolated phrases and instead excerpted subjective
descriptions and portraits of public figures whose power lies in the author’s
individualized expression. Such use, focusing on the most expressive elements of the
work, exceeds that necessary to disseminate the facts.
The fact that a work is unpublished is a critical element of its “nature.” Our prior
discussion establishes that the scope of fair use is narrower with respect to unpublished
works. While even substantial quotations might qualify as fair use in a review of a
published work or a news account of a speech that had been delivered to the public or
disseminated to the press, the author’s right to control the first public appearance of his
expression weighs against such use of the work before its release. The right of first
publication encompasses not only the choice whether to publish at all, but also the
choices of when, where, and in what form first to publish a work.
In the case of Mr. Ford’s manuscript, the copyright holders’ interest in confidentiality
is irrefutable; the copyright holders had entered into a contractual undertaking to “keep the
manuscript confidential” and required that all those to whom the manuscript was shown
also “sign an agreement to keep the manuscript confidential.” While the copyright holders’

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contract with Time required Time to submit its proposed article seven days before
publication, The Nation’s clandestine publication afforded no such opportunity for creative
or quality control. It was hastily patched together and contained “a number of
inaccuracies.” A use that so clearly infringes the copyright holder’s interests in confidentiality and creative control is difficult to characterize as “fair.”
Amount and Substantiality of the Portion Used. Next, the Act directs us to examine
the amount and substantiality of the portion used in relation to the copyrighted work as
a whole. In absolute terms, the words actually quoted were an insubstantial portion of “A
Time to Heal.” The District Court, however, found that “[T]he Nation took what was
essentially the heart of the book.” We believe the Court of Appeals erred in overruling
the District Judge’s evaluation of the qualitative nature of the taking. A Time editor
described the chapters on the pardon as “the most interesting and moving parts of the
entire manuscript.” The portions actually quoted were selected by Mr. Navasky as among
the most powerful passages in those chapters. He testified that he used verbatim excerpts
because simply reciting the information could not adequately convey the “absolute
certainty with which [Ford] expressed himself,” or show that “this comes from President
Ford,” or carry the “definitive quality” of the original. In short, he quoted these passages
precisely because they qualitatively embodied Ford’s distinctive expression.
As the statutory language indicates, a taking may not be excused merely because
it is insubstantial with respect to the infringing work. As Judge Learned Hand cogently
remarked, “no plagiarist can excuse the wrong by showing how much of his work he did
not pirate.” Sheldon v. Metro-Goldwyn Pictures Corp. (2d Cir.). Conversely, the fact that
a substantial portion of the infringing work was copied verbatim is evidence of the
qualitative value of the copied material, both to the originator and to the plagiarist who
seeks to profit from marketing someone else’s copyrighted expression.
Stripped to the verbatim quotes, the direct takings from the unpublished
manuscript constitute at least 13% of the infringing article. The Nation article is
structured around the quoted excerpts which serve as its dramatic focal points. In view
of the expressive value of the excerpts and their key role in the infringing work, we
cannot agree with the Second Circuit that the “magazine took a meager, indeed an
infinitesimal amount of Ford’s original language.”
Effect on the Market. Finally, the Act focuses on “the effect of the use upon the
potential market for or value of the copyrighted work.” This last factor is undoubtedly
the single most important element of fair use.9 “Fair use, when properly applied, is
limited to copying by others which does not materially impair the marketability of the
work which is copied.” . . . Rarely will a case of copyright infringement present such
clear-cut evidence of actual damage. Petitioners assured Time that there would be no
other authorized publication of any portion of the unpublished manuscript prior to April
23, 1979. Any publication of material from chapters 1 and 3 would permit Time to
renegotiate its final payment. Time cited The Nation’s article, which contained verbatim
quotes from the unpublished manuscript, as a reason for its nonperformance. . . . [O]nce
a copyright holder establishes with reasonable probability the existence of a causal
connection between the infringement and a loss of revenue, the burden properly shifts to
Economists who have addressed the issue believe the fair use exception should come into play only in those
situations in which the market fails or the price the copyright holder would ask is near zero. As the facts here
demonstrate, there is a fully functioning market that encourages the creation and dissemination of memoirs
of public figures. In the economists’ view, permitting “fair use” to displace normal copyright channels
disrupts the copyright market without a commensurate public benefit.
9

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437

the infringer to show that this damage would have occurred had there been no taking of
copyrighted expression. Petitioners established a prima facie case of actual damage that
respondents failed to rebut. . . .
More important, to negate fair use one need only show that if the challenged use
“should become widespread, it would adversely affect the potential market for the
copyrighted work.” Sony Corp. of America v. Universal City Studios, Inc. This inquiry
must take account not only of harm to the original but also of harm to the market for
derivative works. “If the defendant’s work adversely affects the value of any of the rights
in the copyrighted work (in this case the adaptation [and serialization] right) the use is
not fair.” 3 Nimmer § 13.05[B]. . . .
V
The Court of Appeals erred in concluding that The Nation’s use of the copyrighted
material was excused by the public’s interest in the subject matter. . . . In sum, the
traditional doctrine of fair use, as embodied in the Copyright Act, does not sanction the use
made by The Nation of these copyrighted materials. Any copyright infringer may claim to
benefit the public by increasing public access to the copyrighted work. But Congress has
not designed, and we see no warrant for judicially imposing, a “compulsory license”
permitting unfettered access to the unpublished copyrighted expression of public figures.
The Nation conceded that its verbatim copying of some 300 words of direct
quotation from the Ford manuscript would constitute an infringement unless excused as
a fair use. Because we find that The Nation’s use of these verbatim excerpts from the
unpublished manuscript was not a fair use, the judgment of the Court of Appeals is
reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Justice BRENNAN, with whom Justice WHITE and Justice MARSHALL join,
dissenting. [Omitted.]
Questions:
1.) What “rules” can you extract from Harper & Row? (By rules, we mean something
akin to Sony’s rulings on the effect of commercial and noncommercial use on the burden
of proof on market harm—nuggets of relatively firm doctrine that instruct lower courts
exactly how to apply the four factors.) Give both an expansive and a restricted version
of its holding.
2.) Under what circumstances would the Harper & Row Court allow use of the actual
expression of a copyrighted work in a way that was extremely likely to harm some of the
markets for that work? Can you think of circumstances where such uses should be found
as fair?
3.) What is the right of first publication? List all of the reasons that the Harper & Row
Court gives for treating this right of the copyright holder in a different way from the other
rights implicated by § 106.
4.) The majority describes The Nation’s goal as being merely to “scoop” Time in
breaking the story—to get to market first with the same story. If you were representing
The Nation, how would you describe its goals? Are there any details from the case you
can use to support your account?

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3.) Transformative Use, Parody, Commentary and Burdens of
Proof Revisited

Campbell v. Acuff-Rose

510 U.S. 569 (1994)

Justice SOUTER delivered the opinion of the Court.
We are called upon to decide whether 2 Live Crew’s commercial parody of Roy
Orbison’s song, “Oh, Pretty Woman,” may be a fair use within the meaning of the
Copyright Act of 1976, 17 U.S.C. § 107. Although the District Court granted summary
judgment for 2 Live Crew, the Court of Appeals reversed, holding the defense of fair use
barred by the song’s commercial character and excessive borrowing. Because we hold
that a parody’s commercial character is only one element to be weighed in a fair use
enquiry, and that insufficient consideration was given to the nature of parody in weighing
the degree of copying, we reverse and remand.
I
In 1964, Roy Orbison and William Dees wrote a rock ballad called “Oh, Pretty
Woman” and assigned their rights in it to respondent Acuff-Rose Music, Inc. Acuff-Rose
registered the song for copyright protection.
Petitioners Luther R. Campbell, Christopher Wongwon, Mark Ross, and David
Hobbs are collectively known as 2 Live Crew, a popular rap music group.1 In 1989,
Campbell wrote a song entitled “Pretty Woman,” which he later described in an affidavit
Rap has been defined as a “style of black American popular music consisting of improvised rhymes performed to a rhythmic accompaniment.” The Norton/Grove Concise Encyclopedia of Music 613 (1988). 2 Live
Crew plays “[b]ass music,” a regional, hip-hop style of rap from the Liberty City area of Miami, Florida.
1

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439

as intended, “through comical lyrics, to satirize the original work. . . .” On July 5, 1989,
2 Live Crew’s manager informed Acuff-Rose that 2 Live Crew had written a parody of
“Oh, Pretty Woman,” that they would afford all credit for ownership and authorship of
the original song to Acuff-Rose, Dees, and Orbison, and that they were willing to pay a
fee for the use they wished to make of it. Enclosed with the letter were a copy of the
lyrics and a recording of 2 Live Crew’s song. Acuff-Rose’s agent refused permission,
stating that “I am aware of the success enjoyed by ‘The 2 Live Crews’, but I must inform
you that we cannot permit the use of a parody of ‘Oh, Pretty Woman.’” Nonetheless, in
June or July 1989, 2 Live Crew released records, cassette tapes, and compact discs of
“Pretty Woman” in a collection of songs entitled “As Clean As They Wanna Be.” The
albums and compact discs identify the authors of “Pretty Woman” as Orbison and Dees
and its publisher as Acuff-Rose. . . .
II
It is uncontested here that 2 Live Crew’s song would be an infringement of AcuffRose’s rights in “Oh, Pretty Woman,” under the Copyright Act of 1976, 17 U.S.C. § 106,
but for a finding of fair use through parody. From the infancy of copyright protection,
some opportunity for fair use of copyrighted materials has been thought necessary to
fulfill copyright’s very purpose, “[t]o promote the Progress of Science and useful
Arts. . . .” U.S. Const., Art. I, § 8, cl. 8. For as Justice Story explained, “[i]n truth, in
literature, in science and in art, there are, and can be, few, if any, things, which in an
abstract sense, are strictly new and original throughout. Every book in literature, science
and art, borrows, and must necessarily borrow, and use much which was well known and
used before.” Similarly, Lord Ellenborough expressed the inherent tension in the need
simultaneously to protect copyrighted material and to allow others to build upon it when
he wrote, “while I shall think myself bound to secure every man in the enjoyment of his
copy-right, one must not put manacles upon science.” In copyright cases brought under
the Statute of Anne of 1710, English courts held that in some instances “fair
abridgements” would not infringe an author’s rights, and although the First Congress
enacted our initial copyright statute without any explicit reference to “fair use,” as it later
came to be known, the doctrine was recognized by the American courts nonetheless. . . .
. . . The fair use doctrine thus “permits [and requires] courts to avoid rigid
application of the copyright statute when, on occasion, it would stifle the very creativity
which that law is designed to foster.”
The task is not to be simplified with bright-line rules, for the statute, like the
doctrine it recognizes, calls for case-by-case analysis. The text employs the terms
“including” and “such as” in the preamble paragraph to indicate the “illustrative and not
limitative” function of the examples given, which thus provide only general guidance
about the sorts of copying that courts and Congress most commonly had found to be fair
uses. Nor may the four statutory factors be treated in isolation, one from another. All are
to be explored, and the results weighed together, in light of the purposes of copyright.
A
The first factor in a fair use enquiry is “the purpose and character of the use,
including whether such use is of a commercial nature or is for nonprofit educational
purposes.” § 107(1). This factor draws on Justice Story’s formulation, “the nature and
objects of the selections made.” The enquiry here may be guided by the examples given
in the preamble to § 107, looking to whether the use is for criticism, or comment, or news

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reporting, and the like, see § 107. The central purpose of this investigation is to see, in
Justice Story’s words, whether the new work merely “supersede[s] the objects” of the
original creation, or instead adds something new, with a further purpose or different
character, altering the first with new expression, meaning, or message; it asks, in other
words, whether and to what extent the new work is “transformative.” Although such
transformative use is not absolutely necessary for a finding of fair use, the goal of
copyright, to promote science and the arts, is generally furthered by the creation of
transformative works. Such works thus lie at the heart of the fair use doctrine’s guarantee
of breathing space within the confines of copyright, and the more transformative the new
work, the less will be the significance of other factors, like commercialism, that may
weigh against a finding of fair use.
This Court has only once before even considered whether parody may be fair use,
and that time issued no opinion because of the Court’s equal division. Suffice it to say
now that parody has an obvious claim to transformative value, as Acuff-Rose itself does
not deny. Like less ostensibly humorous forms of criticism, it can provide social benefit,
by shedding light on an earlier work, and, in the process, creating a new one. We thus
line up with the courts that have held that parody, like other comment or criticism, may
claim fair use under § 107.
The germ of parody lies in the definition of the Greek parodeia, quoted in Judge
Nelson’s Court of Appeals dissent, as “a song sung alongside another.” Modern dictionaries
accordingly describe a parody as a “literary or artistic work that imitates the characteristic
style of an author or a work for comic effect or ridicule,” or as a “composition in prose or
verse in which the characteristic turns of thought and phrase in an author or class of authors
are imitated in such a way as to make them appear ridiculous.” For the purposes of copyright
law, the nub of the definitions, and the heart of any parodist’s claim to quote from existing
material, is the use of some elements of a prior author’s composition to create a new one
that, at least in part, comments on that author’s works. If, on the contrary, the commentary
has no critical bearing on the substance or style of the original composition, which the
alleged infringer merely uses to get attention or to avoid the drudgery in working up
something fresh, the claim to fairness in borrowing from another’s work diminishes
accordingly (if it does not vanish), and other factors, like the extent of its commerciality,
loom larger.14 Parody needs to mimic an original to make its point, and so has some claim
to use the creation of its victim’s (or collective victims’) imagination, whereas satire can
stand on its own two feet and so requires justification for the very act of borrowing.15
The fact that parody can claim legitimacy for some appropriation does not, of
course, tell either parodist or judge much about where to draw the line. Like a book
review quoting the copyrighted material criticized, parody may or may not be fair use,
and petitioners’ suggestion that any parodic use is presumptively fair has no more
A parody that more loosely targets an original than the parody presented here may still be sufficiently
aimed at an original work to come within our analysis of parody. If a parody whose wide dissemination in
the market runs the risk of serving as a substitute for the original or licensed derivatives, it is more incumbent
on one claiming fair use to establish the extent of transformation and the parody’s critical relationship to the
original. By contrast, when there is little or no risk of market substitution, whether because of the large extent
of transformation of the earlier work, the new work’s minimal distribution in the market, the small extent to
which it borrows from an original, or other factors, taking parodic aim at an original is a less critical factor
in the analysis, and looser forms of parody may be found to be fair use, as may satire with lesser justification
for the borrowing than would otherwise be required.
15
Satire has been defined as a work “in which prevalent follies or vices are assailed with ridicule,” or are
“attacked through irony, derision, or wit”.
14

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441

justification in law or fact than the equally hopeful claim that any use for news reporting
should be presumed fair. The Act has no hint of an evidentiary preference for parodists
over their victims, and no workable presumption for parody could take account of the
fact that parody often shades into satire when society is lampooned through its creative
artifacts, or that a work may contain both parodic and nonparodic elements. Accordingly,
parody, like any other use, has to work its way through the relevant factors, and be judged
case by case, in light of the ends of the copyright law.
Here, the District Court held, and the Court of Appeals assumed, that 2 Live Crew’s
“Pretty Woman” contains parody, commenting on and criticizing the original work,
whatever it may have to say about society at large. As the District Court remarked, the
words of 2 Live Crew’s song copy the original’s first line, but then “quickly degenerat[e]
into a play on words, substituting predictable lyrics with shocking ones . . . [that]
derisively demonstrat[e] how bland and banal the Orbison song seems to them.” Judge
Nelson, dissenting below, came to the same conclusion, that the 2 Live Crew song “was
clearly intended to ridicule the white-bread original” and “reminds us that sexual congress
with nameless streetwalkers is not necessarily the stuff of romance and is not necessarily
without its consequences. The singers (there are several) have the same thing on their
minds as did the lonely man with the nasal voice, but here there is no hint of wine and
roses.” Although the majority below had difficulty discerning any criticism of the
original in 2 Live Crew’s song, it assumed for purposes of its opinion that there was some.
We have less difficulty in finding that critical element in 2 Live Crew’s song than
the Court of Appeals did, although having found it we will not take the further step of
evaluating its quality. The threshold question when fair use is raised in defense of parody
is whether a parodic character may reasonably be perceived. Whether, going beyond that,
parody is in good taste or bad does not and should not matter to fair use. As Justice
Holmes explained, “[i]t would be a dangerous undertaking for persons trained only to the
law to constitute themselves final judges of the worth of [a work], outside of the narrowest
and most obvious limits. At the one extreme some works of genius would be sure to miss
appreciation. Their very novelty would make them repulsive until the public had learned
the new language in which their author spoke.”
While we might not assign a high rank to the parodic element here, we think it fair
to say that 2 Live Crew’s song reasonably could be perceived as commenting on the
original or criticizing it, to some degree. 2 Live Crew juxtaposes the romantic musings of
a man whose fantasy comes true, with degrading taunts, a bawdy demand for sex, and a
sigh of relief from paternal responsibility. The later words can be taken as a comment on
the naiveté of the original of an earlier day, as a rejection of its sentiment that ignores the
ugliness of street life and the debasement that it signifies. It is this joinder of reference and
ridicule that marks off the author’s choice of parody from the other types of comment and
criticism that traditionally have had a claim to fair use protection as transformative works.
The Court of Appeals, however, immediately cut short the enquiry into 2 Live
Crew’s fair use claim by confining its treatment of the first factor essentially to one
relevant fact, the commercial nature of the use. The court then inflated the significance of
this fact by applying a presumption ostensibly culled from Sony, that “every commercial
use of copyrighted material is presumptively . . . unfair. . . .” In giving virtually dispositive
weight to the commercial nature of the parody, the Court of Appeals erred.
The language of the statute makes clear that the commercial or nonprofit
educational purpose of a work is only one element of the first factor enquiry into its
purpose and character. Section 107(1) uses the term “including” to begin the dependent

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clause referring to commercial use, and the main clause speaks of a broader investigation
into “purpose and character.” As we explained in Harper & Row, Congress resisted
attempts to narrow the ambit of this traditional enquiry by adopting categories of
presumptively fair use, and it urged courts to preserve the breadth of their traditionally
ample view of the universe of relevant evidence. Accordingly, the mere fact that a use is
educational and not for profit does not insulate it from a finding of infringement, any
more than the commercial character of a use bars a finding of fairness. If, indeed,
commerciality carried presumptive force against a finding of fairness, the presumption
would swallow nearly all of the illustrative uses listed in the preamble paragraph of § 107,
including news reporting, comment, criticism, teaching, scholarship, and research, since
these activities “are generally conducted for profit in this country.” Congress could not
have intended such a rule, which certainly is not inferable from the common-law cases,
arising as they did from the world of letters in which Samuel Johnson could pronounce
that “[n]o man but a blockhead ever wrote, except for money.”
Sony itself called for no hard evidentiary presumption. There, we emphasized the
need for a “sensitive balancing of interests,” noted that Congress had “eschewed a rigid,
bright-line approach to fair use,” and stated that the commercial or nonprofit educational
character of a work is “not conclusive,” but rather a fact to be “weighed along with
other[s] in fair use decisions.” The Court of Appeals’s elevation of one sentence from
Sony to a per se rule thus runs as much counter to Sony itself as to the long common-law
tradition of fair use adjudication. Rather, as we explained in Harper & Row, Sony stands
for the proposition that the “fact that a publication was commercial as opposed to
nonprofit is a separate factor that tends to weigh against a finding of fair use.” But that
is all, and the fact that even the force of that tendency will vary with the context is a
further reason against elevating commerciality to hard presumptive significance. The use,
for example, of a copyrighted work to advertise a product, even in a parody, will be
entitled to less indulgence under the first factor of the fair use enquiry than the sale of a
parody for its own sake, let alone one performed a single time by students in school.18
B
The second statutory factor, “the nature of the copyrighted work,” § 107(2), draws
on Justice Story’s expression, the “value of the materials used.” This factor calls for
recognition that some works are closer to the core of intended copyright protection than
others, with the consequence that fair use is more difficult to establish when the former
works are copied. We agree with both the District Court and the Court of Appeals that
the Orbison original’s creative expression for public dissemination falls within the core of
the copyright’s protective purposes. This fact, however, is not much help in this case, or
ever likely to help much in separating the fair use sheep from the infringing goats in a
parody case, since parodies almost invariably copy publicly known, expressive works.
C
The third factor asks whether “the amount and substantiality of the portion used in
relation to the copyrighted work as a whole,” § 107(3) are reasonable in relation to the
18
. . . [W]e reject Acuff-Rose’s argument that 2 Live Crew’s request for permission to use the original should
be weighed against a finding of fair use. Even if good faith were central to fair use, 2 Live Crew’s actions do
not necessarily suggest that they believed their version was not fair use; the offer may simply have been
made in a good-faith effort to avoid this litigation. If the use is otherwise fair, then no permission need be
sought or granted. Thus, being denied permission to use a work does not weigh against a finding of fair use.

Transformative Use, Parody, Commentary and Burdens of Proof Revisited

443

purpose of the copying. Here, attention turns to the persuasiveness of a parodist’s
justification for the particular copying done, and the enquiry will harken back to the first
of the statutory factors, for, as in prior cases, we recognize that the extent of permissible
copying varies with the purpose and character of the use. The facts bearing on this factor
will also tend to address the fourth, by revealing the degree to which the parody may serve
as a market substitute for the original or potentially licensed derivatives.
The District Court considered the song’s parodic purpose in finding that 2 Live
Crew had not helped themselves overmuch. The Court of Appeals disagreed, stating that
“[w]hile it may not be inappropriate to find that no more was taken than necessary, the
copying was qualitatively substantial. . . . We conclude that taking the heart of the original
and making it the heart of a new work was to purloin a substantial portion of the essence
of the original.”
The Court of Appeals is of course correct that this factor calls for thought not only
about the quantity of the materials used, but about their quality and importance, too. In
Harper & Row, for example, the Nation had taken only some 300 words out of President
Ford’s memoirs, but we signaled the significance of the quotations in finding them to
amount to “the heart of the book,” the part most likely to be newsworthy and important
in licensing serialization. We also agree with the Court of Appeals that whether “a
substantial portion of the infringing work was copied verbatim” from the copyrighted
work is a relevant question, for it may reveal a dearth of transformative character or
purpose under the first factor, or a greater likelihood of market harm under the fourth; a
work composed primarily of an original, particularly its heart, with little added or
changed, is more likely to be a merely superseding use, fulfilling demand for the original.
Where we part company with the court below is in applying these guides to parody,
and in particular to parody in the song before us. Parody presents a difficult case. Parody’s
humor, or in any event its comment, necessarily springs from recognizable allusion to its
object through distorted imitation. Its art lies in the tension between a known original and
its parodic twin. When parody takes aim at a particular original work, the parody must be
able to “conjure up” at least enough of that original to make the object of its critical wit
recognizable. What makes for this recognition is quotation of the original’s most
distinctive or memorable features, which the parodist can be sure the audience will know.
Once enough has been taken to assure identification, how much more is reasonable will
depend, say, on the extent to which the song’s overriding purpose and character is to
parody the original or, in contrast, the likelihood that the parody may serve as a market
substitute for the original. But using some characteristic features cannot be avoided.
We think the Court of Appeals was insufficiently appreciative of parody’s need for
the recognizable sight or sound when it ruled 2 Live Crew’s use unreasonable as a matter
of law. It is true, of course, that 2 Live Crew copied the characteristic opening bass riff
(or musical phrase) of the original, and true that the words of the first line copy the
Orbison lyrics. But if quotation of the opening riff and the first line may be said to go to
the “heart” of the original, the heart is also what most readily conjures up the song for
parody, and it is the heart at which parody takes aim. Copying does not become excessive
in relation to parodic purpose merely because the portion taken was the original’s heart.
If 2 Live Crew had copied a significantly less memorable part of the original, it is difficult
to see how its parodic character would have come through.
This is not, of course, to say that anyone who calls himself a parodist can skim the
cream and get away scot free. In parody, as in news reporting, context is everything, and
the question of fairness asks what else the parodist did besides go to the heart of the

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original. It is significant that 2 Live Crew not only copied the first line of the original, but
thereafter departed markedly from the Orbison lyrics for its own ends. 2 Live Crew not
only copied the bass riff and repeated it,19 but also produced otherwise distinctive sounds,
interposing “scraper” noise, overlaying the music with solos in different keys, and altering
the drum beat. This is not a case, then, where “a substantial portion” of the parody itself
is composed of a “verbatim” copying of the original. It is not, that is, a case where the
parody is so insubstantial, as compared to the copying, that the third factor must be
resolved as a matter of law against the parodists.
Suffice it to say here that, as to the lyrics, we think the Court of Appeals correctly
suggested that “no more was taken than necessary,” but just for that reason, we fail to see
how the copying can be excessive in relation to its parodic purpose, even if the portion
taken is the original’s “heart.” As to the music, we express no opinion whether repetition
of the bass riff is excessive copying, and we remand to permit evaluation of the amount
taken, in light of the song’s parodic purpose and character, its transformative elements,
and considerations of the potential for market substitution sketched more fully below.
D
The fourth fair use factor is “the effect of the use upon the potential market for or
value of the copyrighted work.” § 107(4). It requires courts to consider not only the
extent of market harm caused by the particular actions of the alleged infringer, but also
“whether unrestricted and widespread conduct of the sort engaged in by the defendant . . .
would result in a substantially adverse impact on the potential market” for the original.
The enquiry “must take account not only of harm to the original but also of harm to the
market for derivative works.”
Since fair use is an affirmative defense, its proponent would have difficulty carrying
the burden of demonstrating fair use without favorable evidence about relevant markets.21
In moving for summary judgment, 2 Live Crew left themselves at just such a
disadvantage when they failed to address the effect on the market for rap derivatives, and
confined themselves to uncontroverted submissions that there was no likely effect on the
market for the original. They did not, however, thereby subject themselves to the
evidentiary presumption applied by the Court of Appeals. In assessing the likelihood of
significant market harm, the Court of Appeals quoted from language in Sony that “‘[i]f
the intended use is for commercial gain, that likelihood may be presumed. But if it is for
a noncommercial purpose, the likelihood must be demonstrated.’” The court reasoned
that because “the use of the copyrighted work is wholly commercial, . . . we presume that
a likelihood of future harm to Acuff-Rose exists.” In so doing, the court resolved the
fourth factor against 2 Live Crew, just as it had the first, by applying a presumption about
the effect of commercial use, a presumption which as applied here we hold to be error.
No “presumption” or inference of market harm that might find support in Sony is
applicable to a case involving something beyond mere duplication for commercial
19
This may serve to heighten the comic effect of the parody, as one witness stated, or serve to dazzle with the
original’s music, as Acuff-Rose now contends.
21
Even favorable evidence, without more, is no guarantee of fairness. Judge Leval gives the example of the
film producer’s appropriation of a composer’s previously unknown song that turns the song into a commercial
success; the boon to the song does not make the film’s simple copying fair. This factor, no less than the
other three, may be addressed only through a “sensitive balancing of interests.” Market harm is a matter of
degree, and the importance of this factor will vary, not only with the amount of harm, but also with the relative
strength of the showing on the other factors.

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445

purposes. Sony’s discussion of a presumption contrasts a context of verbatim copying of
the original in its entirety for commercial purposes, with the noncommercial context of
Sony itself (home copying of television programming). In the former circumstances, what
Sony said simply makes common sense: when a commercial use amounts to mere
duplication of the entirety of an original, it clearly “supersede[s] the objects,” of the
original and serves as a market replacement for it, making it likely that cognizable market
harm to the original will occur. But when, on the contrary, the second use is
transformative, market substitution is at least less certain, and market harm may not be so
readily inferred. Indeed, as to parody pure and simple, it is more likely that the new work
will not affect the market for the original in a way cognizable under this factor, that is, by
acting as a substitute for it (“supersed[ing] [its] objects”). This is so because the parody
and the original usually serve different market functions.
We do not, of course, suggest that a parody may not harm the market at all, but when
a lethal parody, like a scathing theater review, kills demand for the original, it does not
produce a harm cognizable under the Copyright Act. Because “parody may quite
legitimately aim at garroting the original, destroying it commercially as well as artistically,”
the role of the courts is to distinguish between “[b]iting criticism [that merely] suppresses
demand [and] copyright infringement[, which] usurps it.” Fisher v. Dees.
This distinction between potentially remediable displacement and unremediable
disparagement is reflected in the rule that there is no protectible derivative market for
criticism. The market for potential derivative uses includes only those that creators of
original works would in general develop or license others to develop. Yet the unlikelihood
that creators of imaginative works will license critical reviews or lampoons of their own
productions removes such uses from the very notion of a potential licensing market.
“People ask . . . for criticism, but they only want praise.” S. Maugham, Of Human Bondage
241 (Penguin ed. 1992). Thus, to the extent that the opinion below may be read to have
considered harm to the market for parodies of “Oh, Pretty Woman,” the court erred.22
In explaining why the law recognizes no derivative market for critical works,
including parody, we have, of course, been speaking of the later work as if it had nothing
but a critical aspect (i.e., “parody pure and simple”). But the later work may have a more
complex character, with effects not only in the arena of criticism but also in protectible
markets for derivative works, too. In that sort of case, the law looks beyond the criticism
to the other elements of the work, as it does here. 2 Live Crew’s song comprises not only
parody but also rap music, and the derivative market for rap music is a proper focus of
enquiry. Evidence of substantial harm to it would weigh against a finding of fair use,
because the licensing of derivatives is an important economic incentive to the creation of
originals. Of course, the only harm to derivatives that need concern us, as discussed
above, is the harm of market substitution. The fact that a parody may impair the market
for derivative uses by the very effectiveness of its critical commentary is no more relevant
under copyright than the like threat to the original market.24
Although 2 Live Crew submitted uncontroverted affidavits on the question of
market harm to the original, neither they, nor Acuff-Rose, introduced evidence or
22
We express no opinion as to the derivative markets for works using elements of an original as vehicles for
satire or amusement, making no comment on the original or criticism of it.
24
In some cases it may be difficult to determine whence the harm flows. In such cases, the other fair use
factors may provide some indicia of the likely source of the harm. A work whose overriding purpose and
character is parodic and whose borrowing is slight in relation to its parody will be far less likely to cause
cognizable harm than a work with little parodic content and much copying.

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affidavits addressing the likely effect of 2 Live Crew’s parodic rap song on the market
for a nonparody, rap version of “Oh, Pretty Woman.” And while Acuff-Rose would have
us find evidence of a rap market in the very facts that 2 Live Crew recorded a rap parody
of “Oh, Pretty Woman” and another rap group sought a license to record a rap derivative,
there was no evidence that a potential rap market was harmed in any way by 2 Live
Crew’s parody, rap version. The fact that 2 Live Crew’s parody sold as part of a collection
of rap songs says very little about the parody’s effect on a market for a rap version of the
original, either of the music alone or of the music with its lyrics. The District Court
essentially passed on this issue, observing that Acuff-Rose is free to record “whatever
version of the original it desires,” the Court of Appeals went the other way by erroneous
presumption. Contrary to each treatment, it is impossible to deal with the fourth factor
except by recognizing that a silent record on an important factor bearing on fair use
disentitled the proponent of the defense, 2 Live Crew, to summary judgment. The
evidentiary hole will doubtless be plugged on remand.
III
It was error for the Court of Appeals to conclude that the commercial nature of 2
Live Crew’s parody of “Oh, Pretty Woman” rendered it presumptively unfair. No such
evidentiary presumption is available to address either the first factor, the character and
purpose of the use, or the fourth, market harm, in determining whether a transformative
use, such as parody, is a fair one. The court also erred in holding that 2 Live Crew had
necessarily copied excessively from the Orbison original, considering the parodic
purpose of the use. We therefore reverse the judgment of the Court of Appeals and remand
the case for further proceedings consistent with this opinion.
It is so ordered.
Justice KENNEDY, concurring.
. . . The fair use factors thus reinforce the importance of keeping the definition of
parody within proper limits. More than arguable parodic content should be required to
deem a would-be parody a fair use. Fair use is an affirmative defense, so doubts about
whether a given use is fair should not be resolved in favor of the self-proclaimed parodist.
We should not make it easy for musicians to exploit existing works and then later claim
that their rendition was a valuable commentary on the original. Almost any revamped
modern version of a familiar composition can be construed as a “comment on the naiveté
of the original,” because of the difference in style and because it will be amusing to hear
how the old tune sounds in the new genre. Just the thought of a rap version of Beethoven’s
Fifth Symphony or “Achy Breaky Heart” is bound to make people smile. If we allow any
weak transformation to qualify as parody, however, we weaken the protection of
copyright. And underprotection of copyright disserves the goals of copyright just as much
as overprotection, by reducing the financial incentive to create.
The Court decides it is “fair to say that 2 Live Crew’s song reasonably could be
perceived as commenting on the original or criticizing it, to some degree.” While I am
not so assured that 2 Live Crew’s song is a legitimate parody, the Court’s treatment of the
remaining factors leaves room for the District Court to determine on remand that the song
is not a fair use. As future courts apply our fair use analysis, they must take care to ensure
that not just any commercial takeoff is rationalized post hoc as a parody.
With these observations, I join the opinion of the Court.

Transformative Use, Parody, Commentary and Burdens of Proof Revisited

APPENDIX A TO OPINION OF THE COURT
“Oh, Pretty Woman” by Roy Orbison and William Dees
Pretty Woman, walking down the street,
Pretty Woman, the kind I like to meet,
Pretty Woman, I don’t believe you, you’re not the truth,
No one could look as good as you Mercy
Pretty Woman, won’t you pardon me,
Pretty Woman, I couldn’t help but see,
Pretty Woman, that you look lovely as can be Are you lonely just like me?
Pretty Woman, stop a while,
Pretty Woman, talk a while,
Pretty Woman give your smile to me
Pretty Woman, yeah, yeah, yeah
Pretty Woman, look my way,
Pretty Woman, say you’ll stay with me
’Cause I need you, I’ll treat you right
Come to me baby, Be mine tonight
Pretty Woman, don’t walk on by,
Pretty Woman, don’t make me cry,
Pretty Woman, don’t walk away,
Hey, O. K.
If that’s the way it must be, O. K.
I guess I’ll go on home, it’s late
There’ll be tomorrow night, but wait!
What do I see
Is she walking back to me?
Yeah, she’s walking back to me!
Oh, Pretty Woman.
APPENDIX B TO OPINION OF THE COURT
“Pretty Woman” as Recorded by 2 Live Crew
Pretty woman walkin’ down the street
Pretty woman girl you look so sweet
Pretty woman you bring me down to that knee
Pretty woman you make me wanna beg please
Oh, pretty woman
Big hairy woman you need to shave that stuff
Big hairy woman you know I bet it’s tough
Big hairy woman all that hair it ain’t legit
’Cause you look like ‘Cousin It’
Big hairy woman
Bald headed woman girl your hair won’t grow
Bald headed woman you got a teeny weeny afro
Bald headed woman you know your hair could look nice
Bald headed woman first you got to roll it with rice
Bald headed woman here, let me get this hunk of biz for ya

447

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Ya know what I’m saying you look better than rice a roni
Oh bald headed woman
Big hairy woman come on in
And don’t forget your bald headed friend
Hey pretty woman let the boys Jump in
Two timin’ woman girl you know you ain’t right
Two timin’ woman you’s out with my boy last night
Two timin’ woman that takes a load off my mind
Two timin’ woman now I know the baby ain’t mine
Oh, two timin’ woman
Oh pretty woman
Questions:
1.) Why did the Court think that, with commercial transformative works, market
substitution was less certain or easily inferred? They are different from the original and
thus not market-substitutes? The transformation indicates that it is more likely that the use
is “fair” and not motivated by mere lazy and inequitable free-riding? Because we do not
care as much about the economic loss to the original author if he or she is standing in the
way of a potentially transformative subsequent work that might promote the progress? All
three? Point to specific passages in the case to support your answer.
2.) Read (and listen) to both songs at issue in this case. Do you think the second is a
parody? Why or why not? Does this depend on what 2 Live Crew had in mind? On what
the audience perceives? On whether it is funny? On something else?
3.) Reconcile these two passages
Although 2 Live Crew submitted uncontroverted affidavits on the
question of market harm to the original, neither they, nor Acuff-Rose,
introduced evidence or affidavits addressing the likely effect of 2 Live
Crew’s parodic rap song on the market for a nonparody, rap version of
“Oh, Pretty Woman.” [Emphasis added.]
and
We do not, of course, suggest that a parody may not harm the market at
all, but when a lethal parody, like a scathing theater review, kills demand
for the original, it does not produce a harm cognizable under the
Copyright Act. Because “parody may quite legitimately aim at garroting
the original, destroying it commercially as well as artistically,” the role
of the courts is to distinguish between “[b]iting criticism [that merely]
suppresses demand [and] copyright infringement[, which] usurps it.”
4.) Does the ruling in Acuff-Rose apply to all transformative works or only to parody?
Parody and satire? Does a parodist have a claim to take a greater amount from the original
and if so, why?

Note: Burdens of Proof (and Persuasion)
Acuff-Rose changes (or “clarifies”) two things about the law of fair use. First,
beyond “mere duplication for commercial purposes” it is wrong to say that all
commercial uses are presumptively unfair. (Rolling back the expansive language in

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449

Sony.) Second, the fourth factor is important but not definitive or binary. As Acuff-Rose
puts it, “this factor, no less than the other three, may be addressed only through a
‘sensitive balancing of interests.’ Market harm is a matter of degree, and the importance
of this factor will vary, not only with the amount of harm, but also with the relative
strength of the showing on the other factors.” (Rolling back Harper & Row.) Yet where
does it leave the law regarding burdens of proof on market harm? We know Sony said
that with commercial works, market harm should be presumed, whereas with noncommercial works, market harm must be demonstrated by the plaintiff. We know that
Acuff-Rose first denied that Sony called for any hard and fast presumption (?) and then
said that if commercial uses are transformative “market substitution is at least less certain,
and market harm may not be so readily inferred.” Thus Sony’s presumption would not
apply. That much is clear, but where does it leave us?
One possibility is that we should read Acuff-Rose as simply lumping commercial
transformative uses into the same category as non-commercial uses in the Sony
framework. If that were true, then transformative uses and non-commercial uses would
effectively switch the burden of proof to the plaintiff on factor four. Because fair use is
an affirmative defense, the defendant would have the burden of proof of showing that the
work was in fact non-commercial or transformative, at which point the burden would
switch to the plaintiff on market harm under factor four. This reading seems plausible to
us, particularly in the injunctive context, but most subsequent Circuit Court cases have
not adopted it. (Though District Courts sometimes adopt this interpretation.)
The more common approach in Circuit Courts is to hold that the burden of proof
on all of the factors lies always with the defendant, because fair use is an affirmative
defense. Courts also cite to Acuff-Rose’s critique of rigid “presumptions.” However, three
broad trends emerge. First, with the exception of “mere duplication for commercial use,”
courts have rejected the presumption that commercial uses are ipso facto unfair. Second,
they have also rejected the proposition that if the use is transformative, the plaintiff bears
the burden of showing market harm. Nimmer, for example, suggests the burden is still
on the defendant on factor 4, even though, for transformative uses, “market substitution
is at least less certain, and market harm may not be so readily inferred” (quoting AcuffRose). Finally, regardless of where the burden of proof lies as a matter of law, the finding
that a use is transformative has a remarkable effect on outcomes. For example, Neil
Netanel’s excellent empirical study, Making Sense of Fair Use, found:
In the period of 2006 to 2010—and this is essentially consistent with
early cases in the post-Campbell period—84.21% of opinions that found
that the use was unequivocally transformative and that opined on the
issue of market harm found that there was no actual or potential harm to
the plaintiff’s market; only 1.3% found actual market harm.
Bottom line, although as a formal matter courts put the burden of proof on the absence
of market harm on the defendant even in cases involving transformative use, they also
tend overwhelmingly to rule for the defendant if a use is found to be transformative.

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SunTrust Bank v. Houghton Mifflin Co.

268 F.3d 1257 (11th Cir. 2001)

BIRCH, Circuit Judge.
In this opinion, we decide whether publication of The Wind Done Gone (“TWDG”), a fictional work admittedly based on Margaret Mitchell’s
Gone With the Wind (“GWTW”), should be
enjoined from publication based on alleged copyright violations. The district court granted a preliminary injunction against publication of TWDG
because it found that Plaintiff-Appellee SunTrust
Bank (“SunTrust”) met the four-part test governing preliminary injunctions. We VACATE the injunction and REMAND for consideration of the Book covers of Gone With the Wind and The
Wind Done Gone
remaining claims.
I. BACKGROUND
A. Procedural History
SunTrust is the trustee of the Mitchell Trust, which holds the copyright in GWTW.
Since its publication in 1936, GWTW has become one of the best-selling books in the
world, second in sales only to the Bible. The Mitchell Trust has actively managed the
copyright, authorizing derivative works and a variety of commercial items. It has entered
into a contract authorizing, under specified conditions, a second sequel to GWTW to be
published by St. Martin’s Press. The Mitchell Trust maintains the copyright in all of the
derivative works as well.
Alice Randall, the author of TWDG, persuasively claims that her novel is a critique
of GWTW’s depiction of slavery and the Civil-War-era American South. To this end, she
appropriated the characters, plot and major scenes from GWTW into the first half of TWDG.
According to SunTrust, TWDG “(1) explicitly refers to [GWTW] in its foreword; (2) copies
core characters, character traits, and relationships from [GWTW]; (3) copies and summarizes
famous scenes and other elements of the plot from [GWTW]; and (4) copies verbatim
dialogues and descriptions from [GWTW].” Defendant-Appellant Houghton Mifflin, the
publisher of TWDG, does not contest the first three allegations,2 but nonetheless argues that
there is no substantial similarity between the two works or, in the alternative, that the
doctrine of fair use protects TWDG because it is primarily a parody of GWTW. . . .
II. DISCUSSION
Our primary focus at this stage of the case is on the appropriateness of the
injunctive relief granted by the district court. In our analysis, we must evaluate the merits
of SunTrust’s copyright infringement claim, including Houghton Mifflin’s affirmative
defense of fair use. As we assess the fair-use defense, we examine to what extent a critic
may use a work to communicate her criticism of the work without infringing the
copyright in that work. . . .
. . . [T]he narrower question in this case is to what extent a critic may use the
protected elements of an original work of authorship to communicate her criticism
2

Houghton Mifflin denies that there are passages from GWTW copied verbatim in TWDG.

Transformative Use, Parody, Commentary and Burdens of Proof Revisited

451

without infringing the copyright in that work. As will be discussed below, this becomes
essentially an analysis of the fair use factors. . . .
Before considering a claimed fair-use defense based on parody, however, the
Supreme Court has required that we ensure that “a parodic character may reasonably be
perceived” in the allegedly infringing work. Campbell v. Acuff-Rose Music, Inc. (1994). The
Supreme Court’s definition of parody in Campbell, however, is somewhat vague. On the
one hand, the Court suggests that the aim of parody is “comic effect or ridicule,” but it then
proceeds to discuss parody more expansively in terms of its “commentary” on the original.
In light of the admonition in Campbell that courts should not judge the quality of the work
or the success of the attempted humor in discerning its parodic character, we choose to take
the broader view. For purposes of our fair-use analysis, we will treat a work as a parody if
its aim is to comment upon or criticize a prior work by appropriating elements of the original
in creating a new artistic, as opposed to scholarly or journalistic, work. Under this definition,
the parodic character of TWDG is clear. TWDG is not a general commentary upon the CivilWar-era American South, but a specific criticism of and rejoinder to the depiction of slavery
and the relationships between blacks and whites in GWTW. The fact that Randall chose to
convey her criticisms of GWTW through a work of fiction, which she contends is a more
powerful vehicle for her message than a scholarly article, does not, in and of itself, deprive
TWDG of fair-use protection. We therefore proceed to an analysis of the four fair-use factors.
i. Purpose and Character of the Work
The first factor in the fair-use analysis, the purpose and character of the allegedly
infringing work, has several facets. The first is whether TWDG serves a commercial
purpose or nonprofit educational purpose. Despite whatever educational function TWDG
may be able to lay claim to, it is undoubtedly a commercial product.24 As the Supreme
Court has stated, “[t]he crux of the profit/nonprofit distinction is not whether the sole
motive of the use is monetary gain but whether the user stands to profit from exploitation
of the copyrighted material without paying the customary price.” Harper & Row
Publishing, Inc. v. Nation Enters. (1985). The fact that TWDG was published for profit
is the first factor weighing against a finding of fair use. However, TWDG’s for-profit
status is strongly overshadowed and outweighed in view of its highly transformative use
of GWTW’s copyrighted elements. . . .
The second factor in the “purpose and character” analysis relevant to this case is to
what extent TWDG’s use of copyrighted elements of GWTW can be said to be “transformative.” The inquiry is “whether the new work merely supersedes the objects of the original creation, or instead adds something new, with a further purpose or different character,
altering the first with new expression, meaning, or message.” Campbell. The issue of
transformation is a double-edged sword in this case. On the one hand, the story of Cynara
and her perception of the events in TWDG certainly adds new “expression, meaning, [and]
message” to GWTW. From another perspective, however, TWDG’s success as a pure work
of fiction depends heavily on copyrighted elements appropriated from GWTW to carry its
own plot forward.
However, as noted above, TWDG is more than an abstract, pure fictional work. It is
principally and purposefully a critical statement that seeks to rebut and destroy the
perspective, judgments, and mythology of GWTW. Randall’s literary goal is to explode
the romantic, idealized portrait of the antebellum South during and after the Civil War. . . .
24
Randall did not choose to publish her work of fiction on the internet free to all the world to read; rather,
she chose a method of publication designed to generate economic profit.

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In light of this, we find it difficult to conclude that Randall simply tried to “avoid the
drudgery in working up something fresh.” Campbell. It is hard to imagine how Randall
could have specifically criticized GWTW without depending heavily upon copyrighted
elements of that book. A parody is a work that seeks to comment upon or criticize another
work by appropriating elements of the original. “Parody needs to mimic an original to make
its point, and so has some claim to use the creation of its victim’s (or collective victims’)
imagination.” Campbell. Thus, Randall has fully employed those conscripted elements
from GWTW to make war against it. . . .
While “transformative use is not absolutely necessary for a finding of fair use, . . . the
more transformative the new work, the less will be the significance of other factors.” In the
case of TWDG, consideration of this factor certainly militates in favor of a finding of fair use,
and, informs our analysis of the other factors, particularly the fourth, as discussed below.
ii. Nature of the Copyrighted Work
. . . GWTW is undoubtedly entitled to the greatest degree of protection as an
original work of fiction. This factor is given little weight in parody cases, however. . . .
iii. Amount and Substantiality of the Portion Used
. . . GWTW is one of the most famous, popular, and enduring American novels ever
written. Given the fame of the work and its primary characters, SunTrust argues that very
little reference is required to conjure up GWTW. As we have already indicated in our
discussion of substantial similarity, TWDG appropriates a substantial portion of the
protected elements of GWTW. Houghton Mifflin argues that TWDG takes nothing from
GWTW that does not serve a parodic purpose, the crux of the argument being that a large
number of characters had to be taken from GWTW because each represents a different ideal
or stereotype that requires commentary, and that the work as a whole could not be adequately
commented upon without revisiting substantial portions of the plot, including its most
famous scenes. Houghton Mifflin’s argument is similar to that made by the defendants in
Harper & Row, who argued for “expanding the doctrine of fair use to create what amounts
to a public figure exception to copyright.” To the extent Houghton Mifflin argues for extra
latitude in copying from GWTW because of its fame, the Supreme Court has squarely
foreclosed any such privilege. . . . Notably, however, the Court did not go so far as to grant
well-known works a special, higher copyright status either.
There are numerous instances in which TWDG appropriates elements of GWTW
and then transforms them for the purpose of commentary. . . .
On the other hand, however, we are told that not all of TWDG’s takings from
GWTW are clearly justified as commentary. We have already determined that TWDG is
a parody, but not every parody is a fair use. SunTrust contends that TWDG, at least at the
margins, takes more of the protected elements of GWTW than was necessary to serve a
parodic function. . . .
. . . [W]e are presented with conflicting and opposing arguments relative to the
amount taken and whether it was too much or a necessary amount. . . .
. . . Based upon this record at this juncture, we cannot determine in any conclusive
way whether “‘the quantity and value of the materials used’ are reasonable in relation to
the purpose of the copying.” Campbell.
iv. Effect on the Market Value of the Original
The final fair-use factor requires us to consider the effect that the publication of
TWDG will have on the market for or value of SunTrust’s copyright in GWTW, including
the potential harm it may cause to the market for derivative works based on GWTW.
Campbell. . . .

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453

As for the potential market, SunTrust proffered evidence in the district court of the
value of its copyright in GWTW. Several derivative works of GWTW have been
authorized. . . .
. . . SunTrust focuses on the value of GWTW and its derivatives, but fails to address
and offers little evidence or argument to demonstrate that TWDG would supplant demand
for SunTrust’s licensed derivatives. . . .
In contrast, the evidence proffered in support of the fair use defense specifically
and correctly focused on market substitution and demonstrates why Randall’s book is
unlikely to displace sales of GWTW. Thus, we conclude, based on the current record, that
SunTrust’s evidence falls far short of establishing that TWDG or others like it will act as
market substitutes for GWTW or will significantly harm its derivatives. Accordingly, the
fourth fair use factor weighs in favor of TWDG. . . .
We reject the district court’s conclusion that SunTrust has established its likelihood
of success on the merits. To the contrary, based upon our analysis of the fair use factors
we find, at this juncture, TWDG is entitled to a fair-use defense. . . .
. . . Accordingly, we vacate the district court’s injunction. . . .
MARCUS, Circuit Judge, specially concurring.
I concur in Judge Birch’s thoughtful and thorough opinion but write separately to
emphasize that, on this limited record, SunTrust has fallen well short of establishing a
likelihood of success on its copyright infringement claim. I stress three points. First, the
district court erred by finding that the critical or parodic element of The Wind Done Gone
is anything but clear-cut. Far from amounting to “unabated piracy,” The Wind Done Gone
is unequivocally parody, as both Judge Birch and the Supreme Court in Campbell v. AcuffRose Music, Inc., define that term. Indeed, the book is critical by constitution, its main aim
being to shatter Gone With the Wind’s window on life in the antebellum and Civil War
South. Second, in service of this parodic design, Randall radically reshapes what she
borrows from Mitchell. I would thus go even further than Judge Birch in underscoring the
transformative nature of Randall’s book; the “purpose and nature” prong of the fair use
analysis is not a close call, in my view. Third, the preliminary record, if anything, suggests
that The Wind Done Gone will not act as a substitute for Mitchell’s original. What little
evidence we have before us indicates that these two books aim at different readerships; to
the extent that there is any overlap between these respective markets, further factfinding
may well reveal that these two books will act as complements rather than substitutes. . . .
The Wind Done Gone’s critical nature is clearer than that of other works courts have
found to be protected parodies. This case does not involve a pop song that simply
“comment[s] on the naiveté of the original of an earlier day.” Campbell. . . .
. . . The two books’ shared subject matter simply helps demonstrate how The Wind
Done Gone’s critical character is more pronounced than many protected parodies. Our
analysis might have been different had we faced a conflict between two literary
worldviews of less perfect polarity, for example, or two works that differed over a matter
of less sharp controversy. As Judge Birch explains in detail, though, The Wind Done
Gone’s plain object is to make war on Gone with the Wind’s specific outlook—on a topic
that itself tends to elicit no small comment and criticism. . . .
. . . Had Randall chosen to write The Wind Done Gone from the point of view of
one of Mitchell’s original characters, for example, and done no more than put a new gloss
on the familiar tale without criticizing or commenting on its fundamental theme and

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spirit, Houghton Mifflin’s case would have been much tougher.3 . . .
The district court recognized that “the two works . . . present polar viewpoints,”
yet concluded that The Wind Done Gone recreates “the same fictional world, described
in the same way and inhabited by the same people, who are doing the same things.” Of
course, both works are set in the antebellum South, but The Wind Done Gone creates an
alter universe described in a wholly different style, and inhabited by shrewd slaves who
manipulate incompetent masters and free blacks who thrive independent of the white
plantation system. Like a political, thematic, and stylistic negative, The Wind Done Gone
inverts Gone With the Wind’s portrait of race relations of the place and era.
Given this stark contrast, I would go further than Judge Birch in stressing the
transformative nature of Randall’s book. . . .
Questions:
1.) What does this case add to the definition and explanation of the relative roles of
“parody,” “satire,” “commentary” and “transformation” in fair use?
2.) You are the lawyer for the Mitchell Estate, appealing to the Supreme Court. You need
to convince the Justices that this decision puts us on a disastrous path. You realize that
pitching your case with the soundbite “contemporary African American novelists should
be forbidden from parodying the iconic novel romanticizing the slaveholding South”
might not be a winning strategy. Thus you have to show convincingly how this case opens
the door to a set of activities that the Justices would view as obviously undesirable.
Rehearse your parade of horribles. Grease your slippery slope. Open your floodgates of
litigation. Be prepared to show your work (and your mixed metaphors) in class.
3.) Note the court’s acknowledgment of the commercial nature of Randall’s work.
“Randall did not choose to publish her work of fiction on the internet free to all the world
to read; rather, she chose a method of publication designed to generate economic profit.”
In the past, anyone who wished to reach a wide audience—which one might do for
distinctly “noncommercial reasons”—might have had to resort to a commercial
publishing platform. Does the availability of the internet as a method of free distribution
change this calculus, making the person who chooses a commercial publisher seem more
focused on profit?
4.) In a portion of the SunTrust opinion that was not included above, Judge Birch says in a
footnote: “I believe that fair use should be considered an affirmative right under the 1976
Act, rather than merely an affirmative defense, as it is defined in the Act as a use that is not
a violation of copyright. However, fair use is commonly referred to as an affirmative
defense, and, as we are bound by Supreme Court precedent, we will apply it as such.
Nevertheless, the fact that the fair use right must be procedurally asserted as an affirmative
It is hazardous to speculate too much about the legality of various hypothetical parodies, given the many
forms literary parody may take, and the levels of sophistication it may reach. The irony and self-awareness
common in contemporary literature, in particular, may one day pose difficulties for the fair use doctrine. It is
not hard to imagine a copyrighted story that parodies itself by design, or an author who makes a career out of
parodying his own work in each subsequent one. (Vladimir Nabokov, among others, hinted at the potential for
such practices. See, e.g., Vladimir Nabokov, Pale Fire (1962) (a novel consisting of a poem and substantial
prose commentary on that poem).) Suppose that this hypothetical author in turn becomes the target of parody
by another. Could the second author’s work be said to usurp demand for the original author’s self-parody?
Here, we face a much simpler problem: Gone With the Wind lacks any apparent self-directed irony, and
Randall’s attack on it is just as straight-forward.
3

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455

defense does not detract from its constitutional significance as a guarantor to access and
use for First Amendment purposes” (emphasis in original). What difference does it make
if fair use is considered an affirmative right rather than merely a defense to copyright
infringement? Judge Birch says that fair use is “defined in the [Copyright] Act as a use that
is not a violation of copyright.” Look at the language in sections 106 and 107. § 106 begins
“Subject to sections 107 through 122, the owner of copyright under this title has the
exclusive rights to do and to authorize any of the following. . . .” § 107 is titled “Limitations
on exclusive rights: Fair use” and begins “Notwithstanding the provisions of section[] 106
. . . the fair use of a copyrighted work . . . is not an infringement of copyright.” Does any
of this language support Judge Birch’s conclusion? Do you agree with him?

P ROBLEM 13-2
You represent The New York Times. One of its reporters has just found a diary apparently belonging to Special Prosecutor Jonathan Edwards. Edwards is well-known
because his recent investigations actually led to the impeachment, but not the conviction, of the President on charges of perjury and obstruction of justice. The prosecution
was highly controversial and—in an unusual step—Edwards also released the full text
of “the Edwards Report” online, complete with all of the embarrassing details of the
President’s relationship with a White House intern. Critics claimed he was trying to
win a battle in the courts of public opinion that he would not win in Congress. Defenders praised him as operating in the noble tradition of whistle blowers who exposed
presidential scandals such as Watergate.
In the diary, Edwards, in his famous and characteristically Biblical writing style,
describes in apocalyptic and profanity-laden terms his envy of the President’s hair, wife
and status, and his distaste for the President’s morals, and repeats many times his belief
that “extremity in the pursuit of scoundrels is no vice.” The tone is very different from
the bland and regretful official prose of the Edwards Report. The New York Times reporter
has planned an article, accompanied by a two page special pull-out, reproducing several
thousand words of the diary verbatim in small print (in the style of the Unabomber
manifesto) just to, as he says, “give the readers a true sense of his tone that they just
cannot get any other way. It is the only way to show the reader the truth while freeing us
from the claim that The Times is being selective or biased in what it excerpted!” He wants
your opinion on this course of action. Alternatively, the reporter has planned an article
which intersperses the wording of the Edwards Report sent to Congress with the profane
fulminations of Edwards’ diary—to ludicrous effect, it has to be said. Edwards’ lawyers
will move for an injunction to prevent publication. The reporter wants your advice on
both courses of action.
What are your answers regarding the construction of the article, and possible fair
use claims? How would your answers be different if the excerpts came from a
purloined copy of Edwards’ much-anticipated forthcoming autobiography, “Bill”
of Attainder? In either case, would an injunction against publication have to meet
certain First Amendment standards to avoid being a prior restraint of speech?

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4.) Fair Use Meets Technology

Sega Enterprises Ltd. v. Accolade, Inc.

977 F.2d 1510 (9th Cir. 1992)

REINHARDT, Circuit Judge.
This case presents several difficult questions of first impression involving our copyright and trademark laws. We are asked to determine, first, whether the Copyright Act permits persons who are neither copyright holders nor licensees to disassemble a copyrighted
computer program in order to gain an understanding of the unprotected functional elements
of the program. In light of the public policies underlying the Act, we conclude that, when
the person seeking the understanding has a legitimate reason for doing so and when no
other means of access to the unprotected elements exists, such disassembly is as a matter
of law a fair use of the copyrighted work. Second, we must decide the legal consequences
under the Lanham Trademark Act of a computer manufacturer’s use of a security system
that affords access to its computers to software cartridges that include an initialization code
which triggers a screen display of the computer manufacturer’s trademark. The computer
manufacturer also manufactures software cartridges; those cartridges all contain the
initialization code. The question is whether the computer manufacturer may enjoin
competing cartridge manufacturers from gaining access to its computers through the use
of the code on the ground that such use will result in the display of a “false” trademark.
Again, our holding is based on the public policies underlying the statute. We hold that when
there is no other method of access to the computer that is known or readily available to
rival cartridge manufacturers, the use of the initialization code by a rival does not violate
the Act even though that use triggers a misleading trademark display. Accordingly, we
reverse the district court’s grant of a preliminary injunction in favor of plaintiff-appellee
Sega Enterprises, Ltd. on its claims of copyright and trademark infringement. We decline,
however, to order that an injunction pendente lite issue precluding Sega from continuing
to use its security system, even though such use may result in a certain amount of false
labeling. We prefer to leave the decision on that question to the district court initially.
I. Background
Plaintiff-appellee Sega Enterprises, Ltd. (“Sega”), a Japanese corporation, and its
subsidiary, Sega of America, develop and market video entertainment systems, including
the “Genesis” console (distributed in Asia under the name “Mega-Drive”) and video game
cartridges. Defendant-appellant Accolade, Inc., is an independent developer, manufacturer, and marketer of computer entertainment software, including game cartridges that
are compatible with the Genesis console, as well as game cartridges that are compatible
with other computer systems.
Sega licenses its copyrighted computer code and its “SEGA” trademark to a
number of independent developers of computer game software. Those licensees develop
and sell Genesis-compatible video games in competition with Sega. Accolade is not and
never has been a licensee of Sega. Prior to rendering its own games compatible with the
Genesis console, Accolade explored the possibility of entering into a licensing agreement
with Sega, but abandoned the effort because the agreement would have required that
Sega be the exclusive manufacturer of all games produced by Accolade.

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457

Accolade used a two-step process to render its video games compatible with the
Genesis console. First, it “reverse engineered” Sega’s video game programs in order to
discover the requirements for compatibility with the Genesis console. As part of the
reverse engineering process, Accolade transformed the machine-readable object code
contained in commercially available copies of Sega’s game cartridges into humanreadable source code using a process called “disassembly” or “decompilation”.2 Accolade
purchased a Genesis console and three Sega game cartridges, wired a decompiler into the
console circuitry, and generated printouts of the resulting source code. Accolade engineers
studied and annotated the printouts in order to identify areas of commonality among the
three game programs. They then loaded the disassembled code back into a computer, and
experimented to discover the interface specifications for the Genesis console by
modifying the programs and studying the results. At the end of the reverse engineering
process, Accolade created a development manual that incorporated the information it had
discovered about the requirements for a Genesis-compatible game. According to the
Accolade employees who created the manual, the manual contained only functional
descriptions of the interface requirements and did not include any of Sega’s code.
III. Copyright Issues
Accolade raises four arguments in support of its position that disassembly of the
object code in a copyrighted computer program does not constitute copyright infringement. First, it maintains that intermediate copying does not infringe the exclusive rights
granted to copyright owners in section 106 of the Copyright Act unless the end product
of the copying is substantially similar to the copyrighted work. Second, it argues that
disassembly of object code in order to gain an understanding of the ideas and functional
concepts embodied in the code is lawful under section 102(b) of the Act, which exempts
ideas and functional concepts from copyright protection. Third, it suggests that
disassembly is authorized by section 117 of the Act, which entitles the lawful owner of a
copy of a computer program to load the program into a computer. Finally, Accolade
contends that disassembly of object code in order to gain an understanding of the ideas
and functional concepts embodied in the code is a fair use that is privileged by section
107 of the Act.
Neither the language of the Act nor the law of this circuit supports Accolade’s first
three arguments. Accolade’s fourth argument, however, has merit. Although the question
is fairly debatable, we conclude based on the policies underlying the Copyright Act that
disassembly of copyrighted object code is, as a matter of law, a fair use of the copyrighted
work if such disassembly provides the only means of access to those elements of the code
that are not protected by copyright and the copier has a legitimate reason for seeking such
access. Accordingly, we hold that Sega has failed to demonstrate a likelihood of success
on the merits of its copyright claim. Because on the record before us the hardships do not
2
Computer programs are written in specialized alphanumeric languages, or “source code”. In order to
operate a computer, source code must be translated into computer readable form, or “object code”. Object
code uses only two symbols, 0 and 1, in combinations which represent the alphanumeric characters of the
source code. A program written in source code is translated into object code using a computer program called
an “assembler” or “compiler”, and then imprinted onto a silicon chip for commercial distribution. Devices
called “disassemblers” or “decompilers” can reverse this process by “reading” the electronic signals for “0”
and “I” that are produced while the program is being run, storing the resulting object code in computer
memory, and translating the object code into source code. Both assembly and disassembly devices are
commercially available, and both types of devices are widely used within the software industry.

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tip sharply (or at all) in Sega’s favor, the preliminary injunction issued in its favor must
be dissolved, at least with respect to that claim.
A. Intermediate Copying
We have previously held that the Copyright Act does not distinguish between
unauthorized copies of a copyrighted work on the basis of what stage of the alleged
infringer’s work the unauthorized copies represent. Walker v. University Books (9th Cir.
1979) (“[T]he fact that an allegedly infringing copy of a protected work may itself be
only an inchoate representation of some final product to be marketed commercially does
not in itself negate the possibility of infringement.”). Our holding in Walker was based
on the plain language of the Act. Section 106 grants to the copyright owner the exclusive
rights “to reproduce the work in copies”, “to prepare derivative works based upon the
copyrighted work”, and to authorize the preparation of copies and derivative works. 17
U.S.C. § 106(1)–(2). Section 501 provides that “[a]nyone who violates any of the
exclusive rights of the copyright owner as provided by sections 106 through 118 . . . is
an infringer of the copyright.” § 501(a). On its face, that language unambiguously
encompasses and proscribes “intermediate copying”.
In order to constitute a “copy” for purposes of the Act, the allegedly infringing
work must be fixed in some tangible form, “from which the work can be perceived,
reproduced, or otherwise communicated, either directly or with the aid of a machine or
device.” 17 U.S.C. § 101. The computer file generated by the disassembly program, the
printouts of the disassembled code, and the computer files containing Accolade’s
modifications of the code that were generated during the reverse engineering process all
satisfy that requirement. The intermediate copying done by Accolade therefore falls
squarely within the category of acts that are prohibited by the statute. . . .
. . . [T]he question whether intermediate copying of computer object code infringes
the exclusive rights granted to the copyright owner in section 106 of the Copyright Act is
a question of first impression. In light of the unambiguous language of the Act, we decline
to depart from the rule set forth in Walker for copyrighted works generally. Accordingly,
we hold that intermediate copying of computer object code may infringe the exclusive
rights granted to the copyright owner in section 106 of the Copyright Act regardless of
whether the end product of the copying also infringes those rights. If intermediate copying
is permissible under the Act, authority for such copying must be found in one of the
statutory provisions to which the rights granted in section 106 are subject.
B. The Idea/Expression Distinction
Accolade next contends that disassembly of computer object code does not violate
the Copyright Act because it is necessary in order to gain access to the ideas and
functional concepts embodied in the code, which are not protected by copyright. 17
U.S.C. § 102(b). Because humans cannot comprehend object code, it reasons, disassembly of a commercially available computer program into human-readable form should not
be considered an infringement of the owner’s copyright. Insofar as Accolade suggests
that disassembly of object code is lawful per se, it seeks to overturn settled law.
Accolade’s argument regarding access to ideas is, in essence, an argument that
object code is not eligible for the full range of copyright protection. Although some
scholarly authority supports that view, we have previously rejected it based on the
language and legislative history of the Copyright Act. . . .
. . . Nor does the Act require that a work be directly accessible to humans in order to

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459

be eligible for copyright protection. Rather, it extends protection to all original works “which
. . . can be perceived, reproduced, or otherwise communicated, either directly or with the aid
of a machine or device.” 17 U.S.C. § 102(a). The statutory language, read together with the
CONTU report [the report from the National Commission on New Technological Uses of
Copyrighted Works (CONTU) that led to the Copyright Act’s extension of copyright
protection to computer programs], leads inexorably to the conclusion that the copyright in a
computer program extends to the object code version of the program.
Nor does a refusal to recognize a per se right to disassemble object code lead to an
absurd result. The ideas and functional concepts underlying many types of computer
programs, including word processing programs, spreadsheets, and video game displays,
are readily discernible without the need for disassembly, because the operation of such
programs is visible on the computer screen. The need to disassemble object code arises,
if at all, only in connection with operations systems, system interface procedures, and
other programs that are not visible to the user when operating—and then only when no
alternative means of gaining an understanding of those ideas and functional concepts
exists. In our view, consideration of the unique nature of computer object code thus is
more appropriate as part of the case-by-case, equitable “fair use” analysis authorized by
section 107 of the Act. Accordingly, we reject Accolade’s second argument. . . .
D. Fair Use
Accolade contends, finally, that its disassembly of copyrighted object code as a
necessary step in its examination of the unprotected ideas and functional concepts
embodied in the code is a fair use that is privileged by section 107 of the Act. Because,
in the case before us, disassembly is the only means of gaining access to those
unprotected aspects of the program, and because Accolade has a legitimate interest in
gaining such access (in order to determine how to make its cartridges compatible with
the Genesis console), we agree with Accolade. Where there is good reason for studying
or examining the unprotected aspects of a copyrighted computer program, disassembly
for purposes of such study or examination constitutes a fair use. . . .
Section 107 lists the factors to be considered in determining whether a particular
use is a fair one. . . . The statutory factors are not exclusive. Rather, the doctrine of fair
use is in essence “an equitable rule of reason.” Harper & Row, Publishers, Inc. v. Nation
Enterprises (1985). Fair use is a mixed question of law and fact. “Where the district court
has found facts sufficient to evaluate each of the statutory factors,” an appellate court
may resolve the fair use question as a matter of law.
In determining that Accolade’s disassembly of Sega’s object code did not constitute
a fair use, the district court treated the first and fourth statutory factors as dispositive, and
ignored the second factor entirely. Given the nature and characteristics of Accolade’s
direct use of the copied works, the ultimate use to which Accolade put the functional
information it obtained, and the nature of the market for home video entertainment
systems, we conclude that neither the first nor the fourth factor weighs in Sega’s favor. In
fact, we conclude that both factors support Accolade’s fair use defense, as does the second
factor, a factor which is important to the resolution of cases such as the one before us.
(a) With respect to the first statutory factor, we observe initially that the fact that
copying is for a commercial purpose weighs against a finding of fair use. Harper & Row.
However, the presumption of unfairness that arises in such cases can be rebutted by the
characteristics of a particular commercial use. Further “[t]he commercial nature of a use
is a matter of degree, not an absolute. . . .” Maxtone-Graham v. Burtchaell (2d Cir. 1986).

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Sega argues that because Accolade copied its object code in order to produce a
competing product, the Harper & Row presumption applies and precludes a finding of
fair use. That analysis is far too simple and ignores a number of important considerations.
We must consider other aspects of “the purpose and character of the use” as well. As we
have noted, the use at issue was an intermediate one only and thus any commercial
“exploitation” was indirect or derivative.
The declarations of Accolade’s employees indicate, and the district court found,
that Accolade copied Sega’s software solely in order to discover the functional
requirements for compatibility with the Genesis console—aspects of Sega’s programs
that are not protected by copyright. 17 U.S.C. § 102(b). With respect to the video game
programs contained in Accolade’s game cartridges, there is no evidence in the record that
Accolade sought to avoid performing its own creative work. Indeed, most of the games
that Accolade released for use with the Genesis console were originally developed for
other hardware systems. Moreover, with respect to the interface procedures for the
Genesis console, Accolade did not seek to avoid paying a customarily charged fee for
use of those procedures, nor did it simply copy Sega’s code; rather, it wrote its own
procedures based on what it had learned through disassembly. Taken together, these facts
indicate that although Accolade’s ultimate purpose was the release of Genesiscompatible games for sale, its direct purpose in copying Sega’s code, and thus its direct
use of the copyrighted material, was simply to study the functional requirements for
Genesis compatibility so that it could modify existing games and make them usable with
the Genesis console. Moreover, as we discuss below, no other method of studying those
requirements was available to Accolade. On these facts, we conclude that Accolade
copied Sega’s code for a legitimate, essentially non-exploitative purpose, and that the
commercial aspect of its use can best be described as of minimal significance.
We further note that we are free to consider the public benefit resulting from a
particular use notwithstanding the fact that the alleged infringer may gain commercially.
Public benefit need not be direct or tangible, but may arise because the challenged use
serves a public interest. In the case before us, Accolade’s identification of the functional
requirements for Genesis compatibility has led to an increase in the number of
independently designed video game programs offered for use with the Genesis console.
It is precisely this growth in creative expression, based on the dissemination of other
creative works and the unprotected ideas contained in those works, that the Copyright
Act was intended to promote. The fact that Genesis-compatible video games are not
scholarly works, but works offered for sale on the market, does not alter our judgment in
this regard. We conclude that given the purpose and character of Accolade’s use of Sega’s
video game programs, the presumption of unfairness has been overcome and the first
statutory factor weighs in favor of Accolade.
(b) As applied, the fourth statutory factor, effect on the potential market for the
copyrighted work, bears a close relationship to the “purpose and character” inquiry in that
it, too, accommodates the distinction between the copying of works in order to make
independent creative expression possible and the simple exploitation of another’s creative
efforts. We must, of course, inquire whether, “if [the challenged use] should become widespread, it would adversely affect the potential market for the copyrighted work,” Sony
Corp. v. Universal City Studios (1984), by diminishing potential sales, interfering with
marketability, or usurping the market. If the copying resulted in the latter effect, all other
considerations might be irrelevant. The Harper & Row Court found a use that effectively
usurped the market for the copyrighted work by supplanting that work to be dispositive.

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However, the same consequences do not and could not attach to a use which simply enables
the copier to enter the market for works of the same type as the copied work.
Unlike the defendant in Harper & Row, which
printed excerpts from President Ford’s memoirs
verbatim with the stated purpose of “scooping” a Time
magazine review of the book, Accolade did not attempt
to “scoop” Sega’s release of any particular game or
games, but sought only to become a legitimate competitor in the field of Genesis-compatible video games.
Within that market, it is the characteristics of the game
program as experienced by the user that determine the
program’s commercial success. As we have noted,
there is nothing in the record that suggests that
Accolade copied any of those elements.
By facilitating the entry of a new competitor, the
first lawful one that is not a Sega licensee, Accolade’s
disassembly of Sega’s software undoubtedly “affected”
Image of box for Accolade’s “Ishido” the market for Genesis-compatible games in an indirect
fashion. We note, however, that while no consumer
game from http://gamesdbase.com
/game/sega-genesis/ishido-the-wayexcept the most avid devotee of President Ford’s regime
of-stones.aspx.
might be expected to buy more than one version of the
President’s memoirs, video game users typically purchase more than one game. There is
no basis for assuming that Accolade’s “Ishido” has significantly affected the market for
Sega’s “Altered Beast,” since a consumer might easily purchase both; nor does it seem
unlikely that a consumer particularly interested in sports might purchase both Accolade’s
“Mike Ditka Power Football” and Sega’s “Joe Montana Football,” particularly if the
games are, as Accolade contends, not substantially similar. In any event, an attempt to
monopolize the market by making it impossible for others to compete runs counter to the
statutory purpose of promoting creative expression and cannot constitute a strong
equitable basis for resisting the invocation of the fair use doctrine. Thus, we conclude that
the fourth statutory factor weighs in Accolade’s, not Sega’s, favor, notwithstanding the
minor economic loss Sega may suffer.
(c) The second statutory factor, the nature of the copyrighted work, reflects the fact
that not all copyrighted works are entitled to the same level of protection. The protection
established by the Copyright Act for original works of authorship does not extend to the
ideas underlying a work or to the functional or factual aspects of the work. 17 U.S.C.
§ 102(b). To the extent that a work is functional or factual, it may be copied, Baker v.
Selden (1879), as may those expressive elements of the work that “must necessarily be
used as incident to” expression of the underlying ideas, functional concepts, or facts.
Works of fiction receive greater protection than works that have strong factual elements,
such as historical or biographical works, or works that have strong functional elements,
such as accounting textbooks, Baker. Works that are merely compilations of fact are
copyrightable, but the copyright in such a work is “thin.”
Computer programs pose unique problems for the application of the “idea/
expression distinction” that determines the extent of copyright protection. To the extent
that there are many possible ways of accomplishing a given task or fulfilling a particular
market demand, the programmer’s choice of program structure and design may be highly
creative and idiosyncratic. However, computer programs are, in essence, utilitarian

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articles—articles that accomplish tasks. As such, they contain many logical, structural,
and visual display elements that are dictated by the function to be performed, by
considerations of efficiency, or by external factors such as compatibility requirements and
industry demands. Computer Assoc. Int’l, Inc. v. Altai, Inc. (2d Cir. 1992) (“CAI”). In
some circumstances, even the exact set of commands used by the programmer is deemed
functional rather than creative for purposes of copyright. “[W]hen specific instructions,
even though previously copyrighted, are the only and essential means of accomplishing a
given task, their later use by another will not amount to infringement.” CONTU Report.7
Because of the hybrid nature of computer programs, there is no settled standard for
identifying what is protected expression and what is unprotected idea in a case involving
the alleged infringement of a copyright in computer software. We are in wholehearted
agreement with the Second Circuit’s recent observation that “[t]hus far, many of the
decisions in this area reflect the courts’ attempt to fit the proverbial square peg in a round
hole.” CAI. In 1986, the Third Circuit attempted to resolve the dilemma by suggesting that
the idea or function of a computer program is the idea of the program as a whole, and
“everything that is not necessary to that purpose or function [is] part of the expression of
that idea.” Whelan Assoc., Inc. v. Jaslow Dental Laboratory, Inc. (3d Cir. 1986) (emphasis
omitted). The Whelan rule, however, has been widely—and soundly—criticized as
simplistic and overbroad. See CAI (citing cases, treatises, and articles). In reality, “a
computer program’s ultimate function or purpose is the composite result of interacting
subroutines. Since each subroutine is itself a program, and thus, may be said to have its
own ‘idea,’ Whelan’s general formulation . . . is descriptively inadequate.” For example,
the computer program at issue in the case before us, a video game program, contains at
least two such subroutines—the subroutine that allows the user to interact with the video
game and the subroutine that allows the game cartridge to interact with the console. Under
a test that breaks down a computer program into its component subroutines and subsubroutines and then identifies the idea or core functional element of each, such as the test
recently adopted by the Second Circuit in CAI, many aspects of the program are not
protected by copyright. In our view, in light of the essentially utilitarian nature of
computer programs, the Second Circuit’s approach is an appropriate one.
Sega argues that even if many elements of its video game programs are properly
characterized as functional and therefore not protected by copyright, Accolade copied
protected expression. Sega is correct. The record makes clear that disassembly is
wholesale copying. Because computer programs are also unique among copyrighted
works in the form in which they are distributed for public use, however, Sega’s
observation does not bring us much closer to a resolution of the dispute.
The unprotected aspects of most functional works are readily accessible to the
human eye. The systems described in accounting textbooks or the basic structural
concepts embodied in architectural plans, to give two examples, can be easily copied
We therefore reject Sega’s belated suggestion that Accolade’s incorporation of the code which “unlocks” the
Genesis III console is not a fair use. Our decision on this point is entirely consistent with Atari v. Nintendo
(Fed. Cir. 1992). Although Nintendo extended copyright protection to Nintendo’s 10NES security system, that
system consisted of an original program which generates an arbitrary data stream “key” which unlocks the
NES console. Creativity and originality went into the design of that program. Moreover, the federal circuit
concluded that there is a “multitude of different ways to generate a data stream which unlocks the NES
console.” The circumstances are clearly different here. Sega’s key appears to be functional. It consists merely
of 20 bytes of initialization code plus the letters S-E-G-A. There is no showing that there is a multitude of
different ways to unlock the Genesis III console. Finally, we note that Sega’s security code is of such de
minimis length that it is probably unprotected under the words and short phrases doctrine.
7

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463

without also copying any of the protected, expressive aspects of the original works.
Computer programs, however, are typically distributed for public use in object code
form, embedded in a silicon chip or on a floppy disk. For that reason, humans often
cannot gain access to the unprotected ideas and functional concepts contained in object
code without disassembling that code—i.e., making copies.8
Sega argues that the record does not establish that disassembly of its object code
is the only available method for gaining access to the interface specifications for the
Genesis console, and the district court agreed. An independent examination of the record
reveals that Sega misstates its contents, and demonstrates that the district court
committed clear error in this respect.
First, the record clearly establishes that humans cannot read object code. Sega
makes much of Mike Lorenzen’s statement that a reverse engineer can work directly from
the zeroes and ones of object code but “[i]t’s not as fun.” In full, Lorenzen’s statements
establish only that the use of an electronic decompiler is not absolutely necessary. Trained
programmers can disassemble object code by hand. Because even a trained programmer
cannot possibly remember the millions of zeroes and ones that make up a program,
however, he must make a written or computerized copy of the disassembled code in order
to keep track of his work. The relevant fact for purposes of Sega’s copyright infringement
claim and Accolade’s fair use defense is that translation of a program from object code
into source code cannot be accomplished without making copies of the code.
Second, the record provides no support for a conclusion that a viable alternative to
disassembly exists. . . .
In summary, the record clearly establishes that disassembly of the object code in
Sega’s video game cartridges was necessary in order to understand the functional
requirements for Genesis compatibility. The interface procedures for the Genesis console
are distributed for public use only in object code form, and are not visible to the user during
operation of the video game program. Because object code cannot be read by humans, it
must be disassembled, either by hand or by machine. Disassembly of object code
necessarily entails copying. Those facts dictate our analysis of the second statutory fair use
factor. If disassembly of copyrighted object code is per se an unfair use, the owner of the
copyright gains a de facto monopoly over the functional aspects of his work—aspects that
were expressly denied copyright protection by Congress. In order to enjoy a lawful
monopoly over the idea or functional principle underlying a work, the creator of the work
must satisfy the more stringent standards imposed by the patent laws. Bonito Boats, Inc. v.
Thunder Craft Boats, Inc. (1989). Sega does not hold a patent on the Genesis console.
Because Sega’s video game programs contain unprotected aspects that cannot be
examined without copying, we afford them a lower degree of protection than more
traditional literary works. . . .
(d) As to the third statutory factor, Accolade disassembled entire programs written
by Sega. Accordingly, the third factor weighs against Accolade. The fact that an entire
work was copied does not, however, preclude a finding a fair use. Sony Corp. In fact,
where the ultimate (as opposed to direct) use is as limited as it was here, the factor is of
very little weight.
8
We do not intend to suggest that disassembly is always the only available means of access to those aspects
of a computer program that are unprotected by copyright. As we noted in Part III(B), supra, in many cases
the operation of a program is directly reflected on the screen display and therefore visible to the human eye.
In those cases, it is likely that a reverse engineer would not need to examine the code in order to understand
what the program does.

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(e) In summary, careful analysis of the purpose and characteristics of Accolade’s
use of Sega’s video game programs, the nature of the computer programs involved, and
the nature of the market for video game cartridges yields the conclusion that the first,
second, and fourth statutory fair use factors weigh in favor of Accolade, while only the
third weighs in favor of Sega, and even then only slightly. Accordingly, Accolade clearly
has by far the better case on the fair use issue.
We are not unaware of the fact that to those used to considering copyright issues in
more traditional contexts, our result may seem incongruous at first blush. To oversimplify,
the record establishes that Accolade, a commercial competitor of Sega, engaged in
wholesale copying of Sega’s copyrighted code as a preliminary step in the development
of a competing product. However, the key to this case is that we are dealing with computer
software, a relatively unexplored area in the world of copyright law. We must avoid the
temptation of trying to force “the proverbial square peg in[to] a round hole.”
In determining whether a challenged use of copyrighted material is fair, a court must
keep in mind the public policy underlying the Copyright Act. “‘The immediate effect of
our copyright law is to secure a fair return for an “author’s” creative labor. But the ultimate
aim is, by this incentive, to stimulate artistic creativity for the general public good.’” Sony
Corp. When technological change has rendered an aspect or application of the Copyright
Act ambiguous, “‘the Copyright Act must be construed in light of this basic purpose.’” As
discussed above, the fact that computer programs are distributed for public use in object
code form often precludes public access to the ideas and functional concepts contained in
those programs, and thus confers on the copyright owner a de facto monopoly over those
ideas and functional concepts. That result defeats the fundamental purpose of the
Copyright Act—to encourage the production of original works by protecting the
expressive elements of those works while leaving the ideas, facts, and functional concepts
in the public domain for others to build on.
Sega argues that the considerable time, effort, and money that went into
development of the Genesis and Genesis-compatible video games militate against a
finding of fair use. Borrowing from antitrust principles, Sega attempts to label Accolade
a “free rider” on its product development efforts. In Feist Publications, however, the
Court unequivocally rejected the “sweat of the brow” rationale for copyright protection.
Under the Copyright Act, if a work is largely functional, it receives only weak protection.
“This result is neither unfair nor unfortunate. It is the means by which copyright advances
the progress of science and art.” Feist (“In truth, ‘[i]t is just such wasted effort that the
proscription against the copyright of ideas and facts . . . [is] designed to prevent.’”). Here,
while the work may not be largely functional, it incorporates functional elements which
do not merit protection. The equitable considerations involved weigh on the side of
public access. Accordingly, we reject Sega’s argument.
(f) We conclude that where disassembly is the only way to gain access to the ideas
and functional elements embodied in a copyrighted computer program and where there
is a legitimate reason for seeking such access, disassembly is a fair use of the copyrighted
work, as a matter of law. Our conclusion does not, of course, insulate Accolade from a
claim of copyright infringement with respect to its finished products. Sega has reserved
the right to raise such a claim, and it may do so on remand. . . .
Questions:
1.) Sega part of our case-study in copyright over software. The plaintiff in Sega might
(and did) say something like this: “Fair use asks us to look at the nature of the activity,

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465

the nature of the work, the amount of copying and the effect on the market for the original
work. This is a blatantly commercial copying of the entirety of a copyrighted work that
may well have a severe negative impact on the market. Every factor clearly favors us or,
at best, is neutral.” Why did the defendant win?
2.) What is the relevant market in a fair use analysis? Should we focus on Sega’s market
or the market for the copyrighted work at issue? Are they the same?
3.) As in Lotus (but also in Oracle) the “stakes” here are interoperability and lock-in.
The court says “where disassembly is the only way to gain access to the ideas and functional elements embodied in a copyrighted computer program and where there is a legitimate reason for seeking such access, disassembly is a fair use of the copyrighted work,
as a matter of law.” The court says we should not focus on the form of what is happening
(copying!) but on the substance (reaching unprotectable elements!). Do you agree? In
terms of its goals, how would you compare this ruling to other doctrines such as
nominative use or genericide in trademark, or merger in copyright law, that override or
limit the intellectual property right at issue in order to protect competition or prevent
copyright holders from leveraging their rights over protectable material into control over
unprotectable material?
4.) This case involves a complementary market—a platform (the game console) and an
ecosystem of programs (the game cartridges). Similar markets can be found in phones
and the apps that run on them, or particular MP3 players and the proprietary music stores
that offer content for that player. Does this kind of market have any special significance
for the fair use analysis? What is the best argument for keeping this ecosystem closed?
Open? How should copyright law be involved in those arguments?

PROBLEM 13-3
You are the chief counsel for a prominent member of the Senate Judiciary Committee.
She is deeply interested in the effect that copyright law has on technology. She has
asked you to consider the cumulative effect of three cases: Lotus v. Borland, Computer
Associates v. Altai, and Sega v. Accolade. First, she wants you to describe exactly what
the courts did in each case—which doctrines of copyright law were involved. Second,
she wants to know what policies or goals the courts were pursuing. Third, as someone
who is expected to vote on the confirmation of Federal judges, she wants to know
whether you think the judges in these cases showed fidelity to the judicial role. Finally,
she wants to know whether the decision in Sega should be overturned, left as it is, or
statutorily codified in section 107. What are your answers to these questions?

Perfect 10 v. Google

508 F.3d 1146 (9th Cir. 2007)
IKUTA, Circuit Judge.
In this appeal, we consider a copyright owner’s efforts to stop an Internet search
engine from facilitating access to infringing images. Perfect 10, Inc. sued Google Inc., for

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infringing Perfect 10’s copyrighted photographs of nude models, among other claims. . . .
The district court preliminarily enjoined Google from creating and publicly displaying
thumbnail versions of Perfect 10’s images, but did not enjoin Google from linking to thirdparty websites that display infringing full-size versions of Perfect 10’s images. . . .
I
Background
. . . Google operates a search engine, a software program that automatically
accesses thousands of websites (collections of webpages) and indexes them within a
database stored on Google’s computers. When a Google user accesses the Google
website and types in a search query, Google’s software searches its database for websites
responsive to that search query. Google then sends relevant information from its index
of websites to the user’s computer. Google’s search engines can provide results in the
form of text, images, or videos.
The Google search engine that provides responses in the form of images is called
“Google Image Search.” In response to a search query, Google Image Search identifies text
in its database responsive to the query and then communicates to users the images
associated with the relevant text. Google’s software cannot recognize and index the images
themselves. Google Image Search provides search results as a webpage of small images
called “thumbnails,” which are stored in Google’s servers. The thumbnail images are
reduced, lower-resolution versions of full-sized images stored on third-party computers.
When a user clicks on a thumbnail image, the user’s browser program interprets
HTML instructions on Google’s webpage. These HTML instructions direct the user’s
browser to cause a rectangular area (a “window”) to appear on the user’s computer screen.
The window has two separate areas of information. The browser fills the top section of the
screen with information from the Google webpage, including the thumbnail image and text.
The HTML instructions also give the user’s browser the address of the website publisher’s
computer that stores the full-size version of the thumbnail. By following the HTML instructions to access the third-party webpage, the user’s browser connects to the website
publisher’s computer, downloads the full-size image, and makes the image appear at the
bottom of the window on the user’s screen. Google does not store the images that fill this
lower part of the window and does not communicate the images to the user; Google simply
provides HTML instructions directing a user’s browser to access a third-party website.
However, the top part of the window (containing the information from the Google webpage) appears to frame and comment on the bottom part of the window. Thus, the user’s
window appears to be filled with a single integrated presentation of the full-size image, but
it is actually an image from a third-party website framed by information from Google’s
website. The process by which the webpage directs a user’s browser to incorporate content
from different computers into a single window is referred to as “in-line linking.” The term
“framing” refers to the process by which information from one computer appears to frame
and annotate the in-line linked content from another computer. . . .
In addition to its search engine operations, Google generates revenue through a
business program called “AdSense.” Under this program, the owner of a website can
register with Google to become an AdSense “partner.” The website owner then places
HTML instructions on its webpages that signal Google’s server to place advertising on
the webpages that is relevant to the webpages’ content. Google’s computer program
selects the advertising automatically by means of an algorithm. AdSense participants
agree to share the revenues that flow from such advertising with Google. . . .

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Perfect 10 markets and sells copyrighted images of nude models. Among other
enterprises, it operates a subscription website on the Internet. Subscribers pay a monthly
fee to view Perfect 10 images in a “members’ area” of the site. Subscribers must use a
password to log into the members’ area. Google does not include these passwordprotected images from the members’ area in Google’s index or database. Perfect 10 has
also licensed Fonestarz Media Limited to sell and distribute Perfect 10’s reduced-size
copyrighted images for download and use on cell phones.
Some website publishers republish Perfect 10’s images on the Internet without
authorization. Once this occurs, Google’s search engine may automatically index the
webpages containing these images and provide thumbnail versions of images in response
to user inquiries. When a user clicks on the thumbnail image returned by Google’s search
engine, the user’s browser accesses the third-party webpage and in-line links to the fullsized infringing image stored on the website publisher’s computer. This image appears,
in its original context, on the lower portion of the window on the user’s computer screen
framed by information from Google’s webpage. . . .
Because Perfect 10 has the burden of showing a likelihood of success on the merits,
the district court held that Perfect 10 also had the burden of demonstrating a likelihood
of overcoming Google’s fair use defense under 17 U.S.C. § 107. Perfect 10. This ruling
was erroneous. At trial, the defendant in an infringement action bears the burden of
proving fair use. See Campbell v. Acuff-Rose Music, Inc. (1994). Because “the burdens
at the preliminary injunction stage track the burdens at trial,” once the moving party has
carried its burden of showing a likelihood of success on the merits, the burden shifts to
the nonmoving party to show a likelihood that its affirmative defense will succeed.
Accordingly, once Perfect 10 has shown a likelihood of success on the merits, the burden
shifts to Google to show a likelihood that its affirmative defenses will succeed.1
III
Direct Infringement

A. Display Right
. . . We have not previously addressed the question when a computer displays a
copyrighted work for purposes of section 106(5). Section 106(5) states that a copyright
owner has the exclusive right “to display the copyrighted work publicly.” The Copyright
Act explains that “display” means “to show a copy of it, either directly or by means of a
film, slide, television image, or any other device or process. . . .” 17 U.S.C. § 101. Section
101 defines “copies” as “material objects, other than phonorecords, in which a work is
fixed by any method now known or later developed, and from which the work can be
perceived, reproduced, or otherwise communicated, either directly or with the aid of a
machine or device.” Finally, the Copyright Act provides that “[a] work is ‘fixed’ in a
tangible medium of expression when its embodiment in a copy or phonorecord, by or under
the authority of the author, is sufficiently permanent or stable to permit it to be perceived,
reproduced, or otherwise communicated for a period of more than transitory duration.”
We must now apply these definitions to the facts of this case. A photographic image
is a work that is “‘fixed’ in a tangible medium of expression,” for purposes of the
Copyright Act, when embodied (i.e., stored) in a computer’s server (or hard disk, or other
1
[Editor’s note. When the 9th Circuit first issued this opinion in May of 2007, it upheld the district
court’s ruling that the plaintiff bears the burden at the preliminary injunction stage of demonstrating
the likelihood of overcoming the defendant’s defense of fair use. In December, without comment,
it withdrew that opinion and reissued it with the changed paragraph you find here.]

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storage device). The image stored in the computer is the “copy” of the work for purposes
of copyright law. The computer owner shows a copy “by means of a . . . device or
process” when the owner uses the computer to fill the computer screen with the
photographic image stored on that computer, or by communicating the stored image
electronically to another person’s computer. 17 U.S.C. § 101. In sum, based on the plain
language of the statute, a person displays a photographic image by using a computer to
fill a computer screen with a copy of the photographic image fixed in the computer’s
memory. There is no dispute that Google’s computers store thumbnail versions of Perfect
10’s copyrighted images and communicate copies of those thumbnails to Google’s users.
Therefore, Perfect 10 has made a prima facie case that Google’s communication of its
stored thumbnail images directly infringes Perfect 10’s display right.
Google does not, however, display a copy of full-size infringing photographic
images for purposes of the Copyright Act when Google frames in-line linked images that
appear on a user’s computer screen. Because Google’s computers do not store the
photographic images, Google does not have a copy of the images for purposes of the
Copyright Act. In other words, Google does not have any “material objects . . . in which
a work is fixed . . . and from which the work can be perceived, reproduced, or otherwise
communicated” and thus cannot communicate a copy. 17 U.S.C. § 101.
Instead of communicating a copy of the image, Google provides HTML
instructions that direct a user’s browser to a website publisher’s computer that stores the
full-size photographic image. Providing these HTML instructions is not equivalent to
showing a copy. First, the HTML instructions are lines of text, not a photographic image.
Second, HTML instructions do not themselves cause infringing images to appear on the
user’s computer screen. The HTML merely gives the address of the image to the user’s
browser. The browser then interacts with the computer that stores the infringing image.
It is this interaction that causes an infringing image to appear on the user’s computer
screen. Google may facilitate the user’s access to infringing images. However, such
assistance raises only contributory liability issues, and does not constitute direct
infringement of the copyright owner’s display rights. . . .
C. Fair Use Defense
. . . Google contends that its use of thumbnails is a fair use of the images and therefore
does not constitute an infringement of Perfect 10’s copyright. See 17 U.S.C. § 107.
The fair use defense permits the use of copyrighted works without the copyright
owner’s consent under certain situations. The defense encourages and allows the
development of new ideas that build on earlier ones, thus providing a necessary
counterbalance to the copyright law’s goal of protecting creators’ work product. “From
the infancy of copyright protection, some opportunity for fair use of copyrighted
materials has been thought necessary to fulfill copyright’s very purpose. . . .” Campbell
v. Acuff-Rose (1994). . . .
In applying the fair use analysis in this case, we are guided by Kelly v. Arriba Soft
Corp., which considered substantially the same use of copyrighted photographic images
as is at issue here. In Kelly, a photographer brought a direct infringement claim against
Arriba, the operator of an Internet search engine. The search engine provided thumbnail
versions of the photographer’s images in response to search queries. We held that
Arriba’s use of thumbnail images was a fair use primarily based on the transformative
nature of a search engine and its benefit to the public. We also concluded that Arriba’s
use of the thumbnail images did not harm the photographer’s market for his image.

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In this case, the district court determined that Google’s use of thumbnails was not
a fair use and distinguished Kelly. We consider these distinctions in the context of the
four-factor fair use analysis.
Purpose and character of the use. The first factor, 17 U.S.C. § 107(1), requires a
court to consider “the purpose and character of the use, including whether such use is of
a commercial nature or is for nonprofit educational purposes.” The central purpose of
this inquiry is to determine whether and to what extent the new work is “transformative.”
Campbell. A work is “transformative” when the new work does not “merely supersede
the objects of the original creation” but rather “adds something new, with a further
purpose or different character, altering the first with new expression, meaning, or
message.” Conversely, if the new work “supersede[s] the use of the original,” the use is
likely not a fair use. Harper & Row Publishers, Inc. v. Nation Enters. (1985).
As noted in Campbell, a “transformative work” is one that alters the original work
“with new expression, meaning, or message.” Campbell. “A use is considered transformative only where a defendant changes a plaintiff’s copyrighted work or uses the plaintiff’s copyrighted work in a different context such that the plaintiff’s work is transformed
into a new creation.” Wall Data Inc. v. L.A. County Sheriff’s Dep’t (9th Cir. 2006).
Google’s use of thumbnails is highly transformative. In Kelly, we concluded that
Arriba’s use of thumbnails was transformative because “Arriba’s use of the images serve[d]
a different function than Kelly’s use—improving access to information on the [I]nternet
versus artistic expression.” Kelly. Although an image may have been created originally to
serve an entertainment, aesthetic, or informative function, a search engine transforms the
image into a pointer directing a user to a source of information. Just as a “parody has an
obvious claim to transformative value” because “it can provide social benefit, by shedding
light on an earlier work, and, in the process, creating a new one,” Campbell, a search engine
provides social benefit by incorporating an original work into a new work, namely, an
electronic reference tool. Indeed, a search engine may be more transformative than a
parody because a search engine provides an entirely new use for the original work, while
a parody typically has the same entertainment purpose as the original work. In other words,
a search engine puts images “in a different context” so that they are “transformed into a
new creation.” Wall Data.
The fact that Google incorporates the entire Perfect 10 image into the search engine
results does not diminish the transformative nature of Google’s use. As the district court
correctly noted, we determined in Kelly that even making an exact copy of a work may
be transformative so long as the copy serves a different function than the original work.
For example, the First Circuit has held that the republication of photos taken for a modeling portfolio in a newspaper was transformative because the photos served to inform,
as well as entertain. See Nunez v. Caribbean Int’l News Corp. (1st Cir. 2000). In contrast,
duplicating a church’s religious book for use by a different church was not transformative. See Worldwide Church of God v. Phila. Church of God, Inc. (9th Cir. 2000). Nor
was a broadcaster’s simple retransmission of a radio broadcast over telephone lines
transformative, where the original radio shows were given no “new expression, meaning,
or message.” Infinity Broad. Corp. v. Kirkwood (2d Cir. 1998). Here, Google uses Perfect
10’s images in a new context to serve a different purpose.
The district court nevertheless determined that Google’s use of thumbnail images
was less transformative than Arriba’s use of thumbnails in Kelly because Google’s use
of thumbnails superseded Perfect 10’s right to sell its reduced-size images for use on
cell phones. The district court stated that “mobile users can download and save the

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thumbnails displayed by Google Image Search onto their phones,” and concluded “to the
extent that users may choose to download free images to their phone rather than purchase
[Perfect 10’s] reduced-size images, Google’s use supersedes [Perfect 10’s].”
Additionally, the district court determined that the commercial nature of Google’s use
weighed against its transformative nature. Although Kelly held that the commercial use of
the photographer’s images by Arriba’s search engine was less exploitative than typical
commercial use, and thus weighed only slightly against a finding of fair use, the district court
here distinguished Kelly on the ground that some website owners in the AdSense program
had infringing Perfect 10 images on their websites. The district court held that because
Google’s thumbnails “lead users to sites that directly benefit Google’s bottom line,” the
AdSense program increased the commercial nature of Google’s use of Perfect 10’s images.
In conducting our case-specific analysis of fair use in light of the purposes of
copyright, we must weigh Google’s superseding and commercial uses of thumbnail
images against Google’s significant transformative use, as well as the extent to which
Google’s search engine promotes the purposes of copyright and serves the interests of the
public. Although the district court acknowledged the “truism that search engines such as
Google Image Search provide great value to the public,” the district court did not
expressly consider whether this value outweighed the significance of Google’s superseding use or the commercial nature of Google’s use. The Supreme Court, however, has
directed us to be mindful of the extent to which a use promotes the purposes of copyright
and serves the interests of the public.
We note that the superseding use in this case is not significant at present: the district
court did not find that any downloads for mobile phone use had taken place. Moreover,
while Google’s use of thumbnails to direct users to AdSense partners containing infringing
content adds a commercial dimension that did not exist in Kelly, the district court did not
determine that this commercial element was significant. The district court stated that
Google’s AdSense programs as a whole contributed “$630 million, or 46% of total
revenues” to Google’s bottom line, but noted that this figure did not “break down the much
smaller amount attributable to websites that contain infringing content.”
We conclude that the significantly transformative nature of Google’s search engine,
particularly in light of its public benefit, outweighs Google’s superseding and commercial
uses of the thumbnails in this case. In reaching this conclusion, we note the importance of
analyzing fair use flexibly in light of new circumstances. Sony (“‘[Section 107] endorses
the purpose and general scope of the judicial doctrine of fair use, but there is no disposition
to freeze the doctrine in the statute, especially during a period of rapid technological
change.’” (quoting H.R.Rep. No. 94-1476, p. 65–66 (1976)). We are also mindful of the
Supreme Court’s direction that “the more transformative the new work, the less will be
the significance of other factors, like commercialism, that may weigh against a finding of
fair use.” Campbell.
Accordingly, we disagree with the district court’s conclusion that because Google’s
use of the thumbnails could supersede Perfect 10’s cell phone download use and because
the use was more commercial than Arriba’s, this fair use factor weighed “slightly” in favor
of Perfect 10. Instead, we conclude that the transformative nature of Google’s use is more
significant than any incidental superseding use or the minor commercial aspects of Google’s
search engine and website. Therefore, this factor weighs heavily in favor of Google.
The nature of the copyrighted work. With respect to the second factor, “the nature of
the copyrighted work,” 17 U.S.C. § 107(2), our decision in Kelly is directly on point. There
we held that the photographer’s images were “creative in nature” and thus “closer to the

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core of intended copyright protection than are more fact-based works.” Kelly. However,
because the photos appeared on the Internet before Arriba used thumbnail versions in its
search engine results, this factor weighed only slightly in favor of the photographer.
Here, the district court found that Perfect 10’s images were creative but also
previously published. The right of first publication is “the author’s right to control the
first public appearance of his expression.” Harper & Row. Because this right
encompasses “the choices of when, where, and in what form first to publish a work,” an
author exercises and exhausts this one-time right by publishing the work in any medium.
Once Perfect 10 has exploited this commercially valuable right of first publication by
putting its images on the Internet for paid subscribers, Perfect 10 is no longer entitled to
the enhanced protection available for an unpublished work. Accordingly the district court
did not err in holding that this factor weighed only slightly in favor of Perfect 10.
The amount and substantiality of the portion used. “The third factor asks whether
the amount and substantiality of the portion used in relation to the copyrighted work as a
whole . . . are reasonable in relation to the purpose of the copying.” Campbell. In Kelly, we
held Arriba’s use of the entire photographic image was reasonable in light of the purpose
of a search engine. Kelly. Specifically, we noted, “[i]t was necessary for Arriba to copy the
entire image to allow users to recognize the image and decide whether to pursue more
information about the image or the originating [website]. If Arriba only copied part of the
image, it would be more difficult to identify it, thereby reducing the usefulness of the visual
search engine.” Accordingly, we concluded that this factor did not weigh in favor of either
party. Because the same analysis applies to Google’s use of Perfect 10’s image, the district
court did not err in finding that this factor favored neither party.
Effect of use on the market. The fourth factor is “the effect of the use upon the
potential market for or value of the copyrighted work.” 17 U.S.C. § 107(4). In Kelly, we
concluded that Arriba’s use of the thumbnail images did not harm the market for the
photographer’s full-size images. We reasoned that because thumbnails were not a substitute
for the full-sized images, they did not harm the photographer’s ability to sell or license his
full-sized images. The district court here followed Kelly’s reasoning, holding that Google’s
use of thumbnails did not hurt Perfect 10’s market for full-size images. We agree.
Perfect 10 argues that the district court erred because the likelihood of market harm
may be presumed if the intended use of an image is for commercial gain. However, this
presumption does not arise when a work is transformative because “market substitution
is at least less certain, and market harm may not be so readily inferred.” Campbell. As
previously discussed, Google’s use of thumbnails for search engine purposes is highly
transformative, and so market harm cannot be presumed.
Perfect 10 also has a market for reduced-size images, an issue not considered in
Kelly. The district court held that “Google’s use of thumbnails likely does harm the
potential market for the downloading of [Perfect 10’s] reduced-size images onto cell
phones.” The district court reasoned that persons who can obtain Perfect 10 images free
of charge from Google are less likely to pay for a download, and the availability of
Google’s thumbnail images would harm Perfect 10’s market for cell phone downloads.
As we discussed above, the district court did not make a finding that Google users have
downloaded thumbnail images for cell phone use. This potential harm to Perfect 10’s
market remains hypothetical. We conclude that this factor favors neither party.
Having undertaken a case-specific analysis of all four factors, we now weigh these
factors together “in light of the purposes of copyright.” Campbell. In this case, Google
has put Perfect 10’s thumbnail images (along with millions of other thumbnail images)

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to a use fundamentally different than the use intended by Perfect 10. In doing so, Google
has provided a significant benefit to the public. Weighing this significant transformative
use against the unproven use of Google’s thumbnails for cell phone downloads, and
considering the other fair use factors, all in light of the purpose of copyright, we conclude
that Google’s use of Perfect 10’s thumbnails is a fair use. Because the district court here
“found facts sufficient to evaluate each of the statutory factors . . . [we] need not remand
for further factfinding.” Harper & Row. We conclude that Google is likely to succeed in
proving its fair use defense and, accordingly, we vacate the preliminary injunction
regarding Google’s use of thumbnail images.
••••••••••
As you have seen, Google is involved in many intellectual property cases and, in
particular, many cases involving fair use. It has sometimes been said that “Google pays
Silicon Valley’s legal bills.” What does this phrase mean, and is the phenomenon a good
or bad thing? Reflect on this question as you read the case below.

Authors Guild, Inc. v. Google Inc.
954 F. Supp. 2d 282 (S.D.N.Y. 2013)

[Editors’ Note: This case involves legal challenges to the “Google Books” program,
which Google offers in order to facilitate search of printed books. Google Books, in turn,
includes material that Google has acquired from two sources. 1.) its “Partner Program”—
under which Google has permission from copyright holders to have access to a digital
version of their books—and 2.) the “Library Project.” The Library Project was the focus
of this case. Google had scanned physical books from libraries with which it had
agreements. Where the book was in the public domain, no copyright issue arose. Users
could search, see, and download, the full text of these books. In the case of books that
were still under copyright, Google made the decision not to seek the permission of the
copyright holders in advance of the scan. (They argued that seeking permission would,
by definition, exclude from Google Books the orphan works that make up a substantial
portion of library holdings.) Instead, Google allowed copyright holders to “opt out,” by
requesting that the work be removed. If the book was still under copyright—or seemed
likely to be under copyright in that it had been published since 1923—Google would
only show three “snippets” in response to a search query. As part of the deals made with
the libraries that provided their collections to scan, Google also allowed the libraries to
download a copy of each of the books scanned from their collections. Before the
resumption of the case you are about to read, Google had attempted to negotiate with
rightsholders a lengthy and elaborate Settlement—called “The Google Books Settlement.” The details are complex, but basically the Settlement would have split revenues
between all of the parties, and even made available “orphan works,” escrowing the
income earned. The settlement was eventually rejected by Judge Chin (who was then on
the District Court) in part because the settlement would have bound parties not before
the court. The lawsuit on fair use resumed. This is Judge Chin’s decision.]
CHIN, Circuit Judge.
Since 2004, when it announced agreements with several major research libraries

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to digitally copy books in their collections, defendant Google Inc. (“Google”) has
scanned more than twenty million books. It has delivered digital copies to participating
libraries, created an electronic database of books, and made text available for online
searching through the use of “snippets.” Many of the books scanned by Google, however,
were under copyright, and Google did not obtain permission from the copyright holders
for these usages of their copyrighted works. As a consequence, in 2005, plaintiffs brought
this class action charging Google with copyright infringement. . . .
. . . Both in-print and out-of-print books are included, although the great majority
are out-of-print. . . .
For books in “snippet view” . . . Google divides each page into eighths—each of
which is a “snippet,” a verbatim excerpt. Each search generates three snippets, but by
performing multiple searches using different search terms, a single user may view far
more than three snippets, as different searches can return different snippets. . . .
Google takes security measures to prevent users from viewing a complete copy of a
snippet-view book. For example, a user cannot cause the system to return different sets of
snippets for the same search query; the position of each snippet is fixed within the page
and does not “slide” around the search term; only the first responsive snippet available on
any given page will be returned in response to a query; one of the snippets on each page is
“black-listed,” meaning it will not be shown; and at least one out of ten entire pages in each
book is black-listed. An “attacker” who tries to obtain an entire book by using a physical
copy of the book to string together words appearing in successive passages would be able
to obtain at best a patchwork of snippets that would be missing at least one snippet from
every page and 10% of all pages. In addition, works with text organized in short “chunks,”
such as dictionaries, cookbooks, and books of haiku, are excluded from snippet view. . . .
DISCUSSION
. . . Google has digitally reproduced millions of copyrighted books, including the
individual plaintiffs’ books, maintaining copies for itself on its servers and backup tapes.
See 17 U.S.C. § 106(1) (prohibiting unauthorized reproduction). Google has made digital
copies available for its Library Project partners to download. See 17 U.S.C. § 106(3)
(prohibiting unauthorized distribution). Google has displayed snippets from the books to
the public. See 17 U.S.C. § 106(5) (prohibiting unauthorized display). Google has done
all of this, with respect to in-copyright books in the Library Project, without license or
permission from the copyright owners. The sole issue now before the Court is whether
Google’s use of the copyrighted works is “fair use” under the copyright laws. For the
reasons set forth below, I conclude that it is. . . .
A key consideration is whether, as part of the inquiry into the first factor, the use
of the copyrighted work is “transformative,” that is, whether the new work merely
“supersedes” or “supplants” the original creation, or whether it:
instead adds something new, with a further purpose or different
character, altering the first with new expression, meaning, or message;
it asks, in other words, whether and to what extent the new work is
“transformative.” . . .
1. Purpose and Character of Use
The first factor is “the purpose and character of the use, including whether such use
is of a commercial nature or is for nonprofit educational purposes.” 17 U.S.C. § 107(1).
Google’s use of the copyrighted works is highly transformative. Google Books
digitizes books and transforms expressive text into a comprehensive word index that

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helps readers, scholars, researchers, and others find books. Google Books has become an
important tool for libraries and librarians and cite-checkers as it helps to identify and find
books. The use of book text to facilitate search through the display of snippets is
transformative. . . . Google Books thus uses words for a different purpose—it uses
snippets of text to act as pointers directing users to a broad selection of books.
Similarly, Google Books is also transformative in the sense that it has transformed
book text into data for purposes of substantive research, including data mining and text
mining in new areas, thereby opening up new fields of research. Words in books are being
used in a way they have not been used before. Google Books has created something new
in the use of book text—the frequency of words and trends in their usage provide
substantive information.
Google Books does not supersede or supplant books because it is not a tool to be
used to read books. Instead, it “adds value to the original” and allows for “the creation
of new information, new aesthetics, new insights and understandings.” Hence, the use is
transformative.
It is true, of course, as plaintiffs argue, that Google is a for-profit entity and Google
Books is largely a commercial enterprise. The fact that a use is commercial “tends to
weigh against a finding of fair use.” On the other hand, fair use has been found even
where a defendant benefitted commercially from the unlicensed use of copyrighted
works. Here, Google does not sell the scans it has made of books for Google Books; it
does not sell the snippets that it displays; and it does not run ads on the About the Book
pages that contain snippets. It does not engage in the direct commercialization of
copyrighted works. Google does, of course, benefit commercially in the sense that users
are drawn to the Google websites by the ability to search Google Books. While this is a
consideration to be acknowledged in weighing all the factors, even assuming Google’s
principal motivation is profit, the fact is that Google Books serves several important
educational purposes.
Accordingly, I conclude that the first factor strongly favors a finding of fair use.

Google Books’ Ngram project enables text-mining to track usage over time; image from
https://books.google.com/ngrams/.

2. Nature of Copyrighted Works
The second factor is “the nature of the copyrighted work.” Here, the works are

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books—all types of published books, fiction and non-fiction, in-print and out-of-print.
While works of fiction are entitled to greater copyright protection, here the vast majority
of the books in Google Books are non-fiction. Further, the books at issue are published
and available to the public. These considerations favor a finding of fair use.
3. Amount and Substantiality of Portion Used
The third factor is “the amount and substantiality of the portion used in relation to
the copyrighted work as a whole.” Google scans the full text of books—the entire
books—and it copies verbatim expression. On the other hand, courts have held that
copying the entirety of a work may still be fair use. Here, as one of the keys to Google
Books is its offering of full-text search of books, full-work reproduction is critical to the
functioning of Google Books. Significantly, Google limits the amount of text it displays
in response to a search.
On balance, I conclude that the third factor weighs slightly against a finding of
fair use.
4. Effect of Use Upon Potential Market or Value
The fourth factor is “the effect of the use upon the potential market for or value of
the copyrighted work.” Here, plaintiffs argue that Google Books will negatively impact
the market for books and that Google’s scans will serve as a “market replacement” for
books. It also argues that users could put in multiple searches, varying slightly the search
terms, to access an entire book.
Neither suggestion makes sense. Google does not sell its scans, and the scans do
not replace the books. While partner libraries have the ability to download a scan of a
book from their collections, they owned the books already—they provided the original
book to Google to scan. Nor is it likely that someone would take the time and energy to
input countless searches to try and get enough snippets to comprise an entire book. Not
only is that not possible as certain pages and snippets are blacklisted, the individual
would have to have a copy of the book in his possession already to be able to piece the
different snippets together in coherent fashion.
To the contrary, a reasonable factfinder could only find that Google Books
enhances the sales of books to the benefit of copyright holders. An important factor in
the success of an individual title is whether it is discovered—whether potential readers
learn of its existence. Google Books provides a way for authors’ works to become
noticed, much like traditional in-store book displays. Indeed, both librarians and their
patrons use Google Books to identify books to purchase. Many authors have noted that
online browsing in general and Google Books in particular helps readers find their work,
thus increasing their audiences. Further, Google provides convenient links to booksellers
to make it easy for a reader to order a book. In this day and age of on-line shopping, there
can be no doubt but that Google Books improves books sales.
Hence, I conclude that the fourth factor weighs strongly in favor of a finding of
fair use.
5. Overall Assessment
Finally, the various non-exclusive statutory factors are to be weighed together, along
with any other relevant considerations, in light of the purposes of the copyright laws.
In my view, Google Books provides significant public benefits. It advances the
progress of the arts and sciences, while maintaining respectful consideration for the rights
of authors and other creative individuals, and without adversely impacting the rights of
copyright holders. It has become an invaluable research tool that permits students,
teachers, librarians, and others to more efficiently identify and locate books. It has given

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scholars the ability, for the first time, to conduct full-text searches of tens of millions of
books. It preserves books, in particular out-of-print and old books that have been forgotten
in the bowels of libraries, and it gives them new life. It facilitates access to books for printdisabled and remote or underserved populations. It generates new audiences and creates
new sources of income for authors and publishers. Indeed, all society benefits.
••••••••••
Note:
In October 2015, the Second Circuit affirmed Judge Chin’s decision. Authors Guild v.
Google (2d Cir. 2015). The opinion was written by Judge Leval, the author of “Toward a
Fair Use Standard,” 103 Harv. L. Rev. 1105 (1990), the article that influenced the Supreme
Court’s “transformative” use analysis in Campbell v. Acuff-Rose. Judge Leval made clear
that “while authors are undoubtedly important intended beneficiaries of copyright, the
ultimate, primary intended beneficiary is the public,” and that transformative uses further
“copyright’s overall objective of contributing to public knowledge.” On the first fair use
factor, the Second Circuit—like Judge Chin—found that Google Books served the “highly
transformative” purposes of helping people identify and find books, and perform text and
data mining through the Ngrams tool. Google’s profit motive was secondary and did not
defeat fair use, as “[m]any of the most universally accepted forms of fair use . . . are all
normally done commercially for profit.” On the question of how one distinguishes between
“transformations” that fall within the copyright holder’s derivative works right, and those
that are protected by fair use, the court explained: “The statutory definition suggests that
derivative works [such as translations and adaptations] generally involve transformations
in the nature of changes of form. By contrast, copying from an original for the purpose of
criticism or commentary on the original or provision of information about it, tends most
clearly to satisfy Campbell’s notion of the ‘transformative’ purpose.” [Is this a satisfying
explanation? Is a translation not “transformative”? A parodic rap video of a nursery rhyme
not a “change of form”?] As in many other cases, the court gave little weight to the second
factor, the nature of the copyrighted work. [Why?] With regard to the third factor, the court
found that Google legitimately copied entire books because “not only is the copying of the
totality of the original reasonably appropriate to Google’s transformative purpose, it is
literally necessary to achieve that purpose.” Moreover, “[w]hat matters in such cases is not
so much ‘the amount and substantiality of the portion used’ in making a copy, but rather
the amount and substantiality of what is thereby made accessible to a public for which it
may serve as a competing substitute. . . .” Turning to the fourth factor, the court found that
Google Books did not provide a market substitute for the original books, in part because
of snippet view’s built-in limitations: “Snippet view, at best and after a large commitment
of manpower, produces discontinuous, tiny fragments. . . . This does not threaten the rights
holders with any significant harm. . . .” In addition, the court explained that Google was
free to convey the unprotected facts contained within books, even if this resulted in lost
sales (as when a student does not purchase a book because she finds the factual information
she seeks in a snippet). In addressing potential markets, the court returned to the scope of
the derivative works right: “Nothing in the statutory definition of a derivative work, or of
the logic that underlies it, suggests that the author of an original work enjoys an exclusive
derivative right to supply information about that work of the sort communicated by
Google’s search functions.” Therefore, Google did not harm protectable derivative
markets. The licensing scheme contemplated by the proposed settlement agreement was

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irrelevant because it would have allowed “far more extensive” access to expressive content.
In April 2016, the Supreme Court denied certiorari in this case.

••••••••••
In Chapter 11, you were introduced to the dispute between Oracle and Google over
the copyrightability of APIs—Application Programming Interfaces. As we explained in
that chapter, the “interoperability” aspect of those APIs is key. An API governs the way
one program works with another. Without knowledge of the API, or the ability to reverse
engineer it, the interoperability of programs will be limited. Imagine trying to play a
piano without knowing which key corresponded to which note. Below is the Supreme
Court’s resolution of this case. This long-awaited decision on software copyright came
some 25 years after the Court split 4–4 on granting certiorari in Lotus v. Borland in 1996.

Google v. Oracle

593 U.S. ____ (2021)

Justice BREYER delivered the opinion of the Court, in which Chief Justice ROBERTS,
Justices SOTOMAYOR, KAGAN, GORSUCH, and KAVANAUGH, joined.
Oracle America, Inc., is the current owner of a copyright in Java SE, a computer
program that uses the popular Java computer programming language. Google, without
permission, has copied a portion of that program, a portion that enables a programmer to
call up prewritten software that, together with the computer’s hardware, will carry out a
large number of specific tasks. The lower courts have considered (1) whether Java SE’s
owner could copyright the portion that Google copied, and (2) if so, whether Google’s
copying nonetheless constituted a “fair use” of that material, thereby freeing Google from
copyright liability. The Federal Circuit held in Oracle’s favor (i.e., that the portion is
copyrightable and Google’s copying did not constitute a “fair use”). In reviewing that
decision, we assume, for argument’s sake, that the material was copyrightable. But we
hold that the copying here at issue nonetheless constituted a fair use. Hence, Google’s
copying did not violate the copyright law.
I
In 2005, Google acquired Android, Inc., a startup firm that hoped to become
involved in smartphone software. Google sought, through Android, to develop a software
platform for mobile devices like smartphones. A platform provides the necessary
infrastructure for computer programmers to develop new programs and applications. One
might think of a software platform as a kind of factory floor where computer
programmers (analogous to autoworkers, designers, or manufacturers) might come, use
sets of tools found there, and create new applications for use in, say, smartphones.
Google envisioned an Android platform that was free and open, such that software
developers could use the tools found there free of charge. Its idea was that more and more
developers using its Android platform would develop ever more Android-based
applications, all of which would make Google’s Android-based smartphones more
attractive to ultimate consumers. Consumers would then buy and use ever more of those
phones. That vision required attracting a sizeable number of skilled programmers.

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At that time, many software developers understood and wrote programs using the
Java programming language, a language invented by Sun Microsystems (Oracle’s
predecessor). About six million programmers had spent considerable time learning, and
then using, the Java language. . . .
The Android platform offered programmers the ability to program for that
environment. To build the platform, Google wrote millions of lines of new code. Because
Google wanted millions of programmers, familiar with Java, to be able easily to work
with its new Android platform, it also copied roughly 11,500 lines of code from the Java
SE program. The copied lines of code are part of a tool called an Application
Programming Interface, or API.
What is an API? The Federal Circuit described an API as a tool that “allow[s]
programmers to use . . . prewritten code to build certain functions into their own
programs, rather than write their own code to perform those functions from scratch.”
Consider in more detail just what an API does. A computer can perform thousands,
perhaps millions, of different tasks that a programmer may wish to use. An API divides and
organizes the world of computing tasks in a particular way. Programmers can then use the
API to select the particular task that they need for their programs. In Sun’s API (which we
refer to as the Sun Java API), each individual task is known as a “method.” The API groups
somewhat similar methods into larger “classes,” and groups somewhat similar classes into
larger “packages.” This method-class-package organizational structure is referred to as the
Sun Java API’s “structure, sequence, and organization,” or SSO.
For each task, there is computer code, known as “implementing code,” that in
effect tells the computer how to execute the particular task you have asked it to perform
(such as telling you, of two numbers, which is the higher). The implementing code
(which Google independently wrote) is not at issue here. For a single task, the
implementing code may be hundreds of lines long. It would be difficult, perhaps
impossible, for a programmer to create complex software programs without drawing on
prewritten task-implementing programs to execute discrete tasks.
But how do you as the programmer tell the computer which of the implementing
code programs it should choose, i.e., which task it should carry out? You do so by
entering into your own program a command that corresponds to the specific task and
calls it up. Those commands, known as “method calls,” help you carry out the task by
choosing those programs written in implementing code that will do the trick, i.e., that
will instruct the computer so that your program will find the higher of two numbers. If a
particular computer might perform, say, a million different tasks, different method calls
will tell the computer which of those tasks to choose. Those familiar with the Java
language already know countless method calls that allow them to invoke countless tasks.
And how does the method call (which a programmer types) actually locate and
invoke the particular implementing code that it needs to instruct the computer how to
carry out a particular task? It does so through another type of code, which the parties
have labeled “declaring code.” Declaring code is part of the API. For each task, the
specific command entered by the programmer matches up with specific declaring code
inside the API. That declaring code provides both the name for each task and the location
of each task within the API’s overall organizational system (i.e., the placement of a
method within a particular class and the placement of a class within a particular package).
In this sense, the declaring code and the method call form a link, allowing the
programmer to draw upon the thousands of prewritten tasks, written in implementing
code. Without that declaring code, the method calls entered by the programmer would

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not call up the implementing code.
The declaring code therefore performs at least two important functions in the Sun
Java API. The first, more obvious, function is that the declaring code enables a set of
shortcuts for programmers. By connecting complex implementing code with method
calls, it allows a programmer to pick out from the API’s task library a particular task
without having to learn anything more than a simple command. For example, a
programmer building a new application for personal banking may wish to use various
tasks to, say, calculate a user’s balance or authenticate a password. To do so, she need
only learn the method calls associated with those tasks. In this way, the declaring code’s
shortcut function is similar to a gas pedal in a car that tells the car to move faster or the
QWERTY keyboard on a typewriter that calls up a certain letter when you press a
particular key. As those analogies demonstrate, one can think of the declaring code as
part of an interface between human beings and a machine.
The second, less obvious, function is to reflect the way in which Java’s creators
have divided the potential world of different tasks into an actual world, i.e., precisely
which set of potentially millions of different tasks we want to have our Java-based
computer systems perform and how we want those tasks arranged and grouped. In this
sense, the declaring code performs an organizational function.
Consider a comprehensive, albeit farfetched, analogy that illustrates how the API
is actually used by a programmer. Imagine that you can, via certain keystrokes, instruct
a robot to move to a particular file cabinet, to open a certain drawer, and to pick out a
specific recipe. With the proper recipe in hand, the robot then moves to your kitchen and
gives it to a cook to prepare the dish. This example mirrors the API’s task-related
organizational system. Through your simple command, the robot locates the right recipe
and hands it off to the cook. In the same way, typing in a method call prompts the API to
locate the correct implementing code and hand it off to your computer. And importantly,
to select the dish that you want for your meal, you do not need to know the recipe’s
contents, just as a programmer using an API does not need to learn the implementing
code. In both situations, learning the simple command is enough.
Now let us consider the example that the District Court used to explain the precise
technology here. A programmer wishes, as part of her program, to determine which of
two integers is the larger. To do so in the Java language, she will first write java.lang.
Those words (which we have put in bold type) refer to the “package” (or by analogy to
the file cabinet). She will then write Math. That word refers to the “class” (or by analogy
to the drawer). She will then write max. That word refers to the “method” (or by analogy
to the recipe). She will then make two parentheses ( ). And, in between the parentheses
she will put two integers, say 4 and 6, that she wishes to compare. The whole
expression—the method call—will look like this: “java.lang.Math.max(4, 6).” The use
of this expression will, by means of the API, call up a task-implementing program that
will determine the higher number.
In writing this program, the programmer will use the very symbols we have placed
in bold in the precise order we have placed them. But the symbols by themselves do
nothing. She must also use software that connects the symbols to the equivalent of file
cabinets, drawers, and files. The API is that software. It includes both the declaring code
that links each part of the method call to the particular task-implementing program, and
the implementing code that actually carries it out.
Google did not copy the implementing code from the Sun Java API. It wrote its
own task-implementing programs, such as those that would determine which of two

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integers is the greater or carry out any other desired (normally far more complex) task.
This implementing code constitutes the vast majority of both the Sun Java API and the
API that Google created for Android. For most of the packages in its new API, Google
also wrote its own declaring code. For 37 packages, however, Google copied the
declaring code from the Sun Java API. As just explained, that means that, for those 37
packages, Google necessarily copied both the names given to particular tasks and the
grouping of those tasks into classes and packages.
In doing so, Google copied that portion of the Sun Java API that allowed
programmers expert in the Java programming language to use the “task calling” system
that they had already learned. As Google saw it, the 37 packages at issue included those
tasks that were likely to prove most useful to programmers working on applications for
mobile devices. In fact, “three of these packages were . . . fundamental to being able to
use the Java language at all.” By using the same declaring code for those packages,
programmers using the Android platform can rely on the method calls that they are
already familiar with to call up particular tasks (e.g., determining which of two integers
is the greater); but Google’s own implementing programs carry out those tasks. Without
that copying, programmers would need to learn an entirely new system to call up the
same tasks.
We add that the Android platform has been successful. Within five years of its
release in 2007, Android-based devices claimed a large share of the United States market.
As of 2015, Android sales produced more than $42 billion in revenue.
In 2010 Oracle Corporation bought Sun. Soon thereafter Oracle brought this
lawsuit in the United States District Court for the Northern District of California. . . .
III A
Copyright and patents, the Constitution says, are 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.” Art. I, § 8, cl. 8. Copyright
statutes and case law have made clear that copyright has practical objectives. It grants an
author an exclusive right to produce his work (sometimes for a hundred years or more),
not as a special reward, but in order to encourage the production of works that others
might reproduce more cheaply. At the same time, copyright has negative features.
Protection can raise prices to consumers. It can impose special costs, such as the cost of
contacting owners to obtain reproduction permission. And the exclusive rights it awards
can sometimes stand in the way of others exercising their own creative powers.
We have described the “fair use” doctrine, originating in the courts, as an
“equitable rule of reason” that “permits courts to avoid rigid application of the copyright
statute when, on occasion, it would stifle the very creativity which that law is designed
to foster.” The statutory provision that embodies the doctrine indicates, rather than
dictates, how courts should apply it. [W]e have understood the provision to set forth
general principles, the application of which requires judicial balancing, depending upon
relevant circumstances, including “significant changes in technology.” Sony v. Universal
(1984); see also Twentieth Century Music Corp. v. Aiken (1975) (“When technological
change has rendered its literal terms ambiguous, the Copyright Act must be construed in
light of its basic purpose”).
B
. . . Given the rapidly changing technological, economic, and business-related
circumstances, we believe we should not answer more than is necessary to resolve the

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parties’ dispute. We shall assume, but purely for argument’s sake, that the entire Sun Java
API falls within the definition of that which can be copyrighted. We shall ask instead
whether Google’s use of part of that API was a “fair use.” Unlike the Federal Circuit, we
conclude that it was.
...V
At the outset, Google argues that “fair use” is a question for a jury to decide; here
the jury decided the question in Google’s favor; and we should limit our review to
determining whether “substantial evidence” justified the jury’s decision. The Federal
Circuit disagreed. It thought that the “fair use” question was a mixed question of fact and
law; that reviewing courts should appropriately defer to the jury’s findings of underlying
facts; but that the ultimate question whether those facts showed a “fair use” is a legal
question for judges to decide de novo.
We agree with the Federal Circuit’s answer to this question. We have said, “[f]air
use is a mixed question of law and fact.” Harper & Row. We have explained that a
reviewing court should try to break such a question into its separate factual and legal
parts, reviewing each according to the appropriate legal standard. But when a question
can be reduced no further, we have added that “the standard of review for a mixed
question all depends—on whether answering it entails primarily legal or factual work.”
U. S. Bank v. Village at Lakeridge (2018).
In this case, the ultimate “fair use” question primarily involves legal work. “Fair
use” was originally a concept fashioned by judges. Our cases still provide legal
interpretations of the fair use provision. And those interpretations provide general
guidance for future cases. See, e.g., Campbell (describing kinds of market harms that are
not the concern of copyright); Harper & Row (“scope of fair use is narrower with respect
to unpublished works”); Sony (wholesale copying aimed at creating a market substitute
is presumptively unfair). This type of work is legal work.
Applying a legal “fair use” conclusion may, of course, involve determination of
subsidiary factual questions, such as “whether there was harm to the actual or potential
markets for the copyrighted work” or “how much of the copyrighted work was copied.”
In this case the Federal Circuit carefully applied the fact/law principles we set forth in
U. S. Bank, leaving factual determinations to the jury and reviewing the ultimate
question, a legal question, de novo. . . .
VI
We turn now to the basic legal question before us: Was Google’s copying of the
Sun Java API, specifically its use of the declaring code and organizational structure for
37 packages of that API, a “fair use.” In answering this question, we shall consider the
four factors set forth in the fair use statute as we find them applicable to the kind of
computer programs before us. . . . For expository purposes, we begin with the second.
A. “The Nature of the Copyrighted Work”
The Sun Java API is a “user interface.” It provides a way through which users (here
the programmers) can “manipulate and control” task-performing computer programs
“via a series of menu commands.” Lotus. The API reflects Sun’s division of possible
tasks that a computer might perform into a set of actual tasks that certain kinds of
computers actually will perform. Sun decided, for example, that its API would call up a
task that compares one integer with another to see which is the larger. . . . No one claims
that the decisions about what counts as a task are themselves copyrightable.

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As discussed above, we can think of the technology as having three essential parts.
First, the API includes “implementing code,” which actually instructs the computer on
the steps to follow to carry out each task. Google wrote its own programs (implementing
programs) that would perform each one of the tasks that its API calls up.
Second, the Sun Java API associates a particular command, called a “method call,”
with the calling up of each task. The symbols java.lang., for example, are part of the
command that will call up the program (whether written by Sun or, as here, by Google)
that instructs the computer to carry out the “larger number” operation. Oracle does not
here argue that the use of these commands by programmers itself violates its copyrights.
Third, the Sun Java API contains computer code that will associate the writing of
a method call with particular “places” in the computer that contain the needed
implementing code. This is the declaring code. The declaring code both labels the
particular tasks in the API and organizes those tasks, or “methods,” into “packages” and
“classes.” We have referred to this organization, by way of rough analogy, as file
cabinets, drawers, and files. Oracle does claim that Google’s use of the Sun Java API’s
declaring code violates its copyrights.
The declaring code at issue here resembles other copyrighted works in that it is
part of a computer program. Congress has specified that computer programs are subjects
of copyright. It differs, however, from many other kinds of copyrightable computer code.
It is inextricably bound together with a general system, the division of computing tasks,
that no one claims is a proper subject of copyright. It is inextricably bound up with the
idea of organizing tasks into what we have called cabinets, drawers, and files, an idea
that is also not copyrightable. It is inextricably bound up with the use of specific commands known to programmers, known here as method calls (such as
java.lang.Math.max, etc.), that Oracle does not here contest. And it is inextricably
bound up with implementing code, which is copyrightable but was not copied.
Moreover, the copied declaring code and the uncopied implementing programs call
for, and reflect, different kinds of capabilities. A single implementation may walk a
computer through dozens of different steps. To write implementing programs, witnesses
told the jury, requires balancing such considerations as how quickly a computer can
execute a task or the likely size of the computer’s memory. One witness described that
creativity as “magic” practiced by an API developer when he or she worries “about things
like power management” for devices that “run on a battery.” This is the very creativity
that was needed to develop the Android software for use not in laptops or desktops but
in the very different context of smartphones.
The declaring code (inseparable from the programmer’s method calls) embodies a
different kind of creativity. Sun Java’s creators, for example, tried to find declaring code
names that would prove intuitively easy to remember. They wanted to attract
programmers who would learn the system, help to develop it further, and prove reluctant
to use another. Sun’s business strategy originally emphasized the importance of using the
API to attract programmers. It sought to make the API “open” and “then . . . compete on
implementations.” The testimony at trial was replete with examples of witnesses drawing
this critical line between the user-centered declaratory code and the innovative
implementing code.
These features mean that, as part of a user interface, the declaring code differs to
some degree from the mine run of computer programs. Like other computer programs, it
is functional in nature. But unlike many other programs, its use is inherently bound
together with uncopyrightable ideas (general task division and organization) and new

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creative expression (Android’s implementing code). Unlike many other programs, its
value in significant part derives from the value that those who do not hold copyrights,
namely, computer programmers, invest of their own time and effort to learn the API’s
system. And unlike many other programs, its value lies in its efforts to encourage
programmers to learn and to use that system so that they will use (and continue to use)
Sun-related implementing programs that Google did not copy.
Although copyrights protect many different kinds of writing, we have emphasized
the need to “recogni[ze] that some works are closer to the core of [copyright] than
others.” In our view, for the reasons just described, the declaring code is, if copyrightable
at all, further than are most computer programs (such as the implementing code) from
the core of copyright. That fact diminishes the fear, expressed by both the dissent and the
Federal Circuit, that application of “fair use” here would seriously undermine the general
copyright protection that Congress provided for computer programs. And it means that
this factor, “the nature of the copyrighted work,” points in the direction of fair use.
B. “The Purpose and Character of the Use”
In the context of fair use, we have considered whether the copier’s use “adds
something new, with a further purpose or different character, altering” the copyrighted
work “with new expression, meaning or message.” Commentators have put the matter
more broadly, asking whether the copier’s use “fulfill[s] the objective of copyright law
to stimulate creativity for public illumination.” In answering this question, we have used
the word “transformative” to describe a copying use that adds something new and
important. An “‘artistic painting’” might, for example, fall within the scope of fair use
even though it precisely replicates a copyrighted “‘advertising logo to make a comment
about consumerism.’” Or, as we held in Campbell, a parody can be transformative
because it comments on the original or criticizes it, for “[p]arody needs to mimic an
original to make its point.”
Google copied portions of the Sun Java API precisely, and it did so in part for the
same reason that Sun created those portions, namely, to enable programmers to call up
implementing programs that would accomplish particular tasks. But since virtually any
unauthorized use of a copyrighted computer program (say, for teaching or research)
would do the same, to stop here would severely limit the scope of fair use in the
functional context of computer programs. Rather, in determining whether a use is
“transformative,” we must go further and examine the copying’s more specifically
described “purpose[s]” and “character.”
Here Google’s use of the Sun Java API seeks to create new products. It seeks to
expand the use and usefulness of Android-based smartphones. Its new product offers
programmers a highly creative and innovative tool for a smartphone environment. To the
extent that Google used parts of the Sun Java API to create a new platform that could be
readily used by programmers, its use was consistent with that creative “progress” that is
the basic constitutional objective of copyright itself.
The jury heard that Google limited its use of the Sun Java API to tasks and specific
programming demands related to Android. It copied the API (which Sun created for use
in desktop and laptop computers) only insofar as needed to include tasks that would be
useful in smartphone programs. And it did so only insofar as needed to allow programmers to call upon those tasks without discarding a portion of a familiar programming
language and learning a new one. To repeat, Google, through Android, provided a new
collection of tasks operating in a distinct and different computing environment. Those
tasks were carried out through the use of new implementing code (that Google wrote)

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designed to operate within that new environment. Some of the amici refer to what Google
did as “reimplementation,” defined as the “building of a system . . . that repurposes the
same words and syntaxes” of an existing system—in this case so that programmers who
had learned an existing system could put their basic skills to use in a new one.
The record here demonstrates the numerous ways in which reimplementing an
interface can further the development of computer programs. The jury heard that shared
interfaces are necessary for different programs to speak to each other. (“We have to agree
on the APIs so that the application I write to show a movie runs on your device.”) It heard
that the reimplementation of interfaces is necessary if programmers are to be able to use
their acquired skills. (“If the API labels change, then either the software wouldn’t continue
to work anymore or the developer . . . would have to learn a whole new language to be
able to use these API labels.”) It heard that the reuse of APIs is common in the industry.
It heard that Sun itself had used pre-existing interfaces in creating Java. And it heard that
Sun executives thought that widespread use of the Java programming language, including
use on a smartphone platform, would benefit the company. Amici supporting Google have
summarized these same points—points that witnesses explained to the jury. These and
related facts convince us that the “purpose and character” of Google’s copying was
transformative—to the point where this factor too weighs in favor of fair use.
There are two other considerations that are often taken up under the first factor:
commerciality and good faith. The text of § 107 includes various noncommercial uses,
such as teaching and scholarship, as paradigmatic examples of privileged copying. There
is no doubt that a finding that copying was not commercial in nature tips the scales in
favor of fair use. But the inverse is not necessarily true, as many common fair uses are
indisputably commercial. For instance, the text of § 107 includes examples like “news
reporting,” which is often done for commercial profit. So even though Google’s use was
a commercial endeavor—a fact no party disputed—that is not dispositive of the first
factor, particularly in light of the inherently transformative role that the reimplementation
played in the new Android system.
As for bad faith, our decision in Campbell expressed some skepticism about
whether bad faith has any role in a fair use analysis. We find this skepticism justifiable,
as “[c]opyright is not a privilege reserved for the well-behaved.” We have no occasion
here to say whether good faith is as a general matter a helpful inquiry. We simply note
that given the strength of the other factors pointing toward fair use and the jury finding
in Google’s favor on hotly contested evidence, that fact-bound consideration is not
determinative in this context.
C. “The Amount and Substantiality of the Portion Used”
If one considers the declaring code in isolation, the quantitative amount of what
Google copied was large. Google copied the declaring code for 37 packages of the Sun
Java API, totaling approximately 11,500 lines of code. Those lines of code amount to
virtually all the declaring code needed to call up hundreds of different tasks. On the other
hand, if one considers the entire set of software material in the Sun Java API, the
quantitative amount copied was small. The total set of Sun Java API computer code,
including implementing code, amounted to 2.86 million lines, of which the copied 11,500
lines were only 0.4 percent.
The question here is whether those 11,500 lines of code should be viewed in
isolation or as one part of the considerably greater whole. We have said that even a small
amount of copying may fall outside of the scope of fair use where the excerpt copied
consists of the “‘heart’” of the original work’s creative expression. Harper & Row. On

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the other hand, copying a larger amount of material can fall within the scope of fair use
where the material copied captures little of the material’s creative expression or is central
to a copier’s valid purpose. See, e.g., Campbell. If a defendant had copied one sentence
in a novel, that copying may well be insubstantial. But if that single sentence set forth
one of the world’s shortest short stories—“When he awoke, the dinosaur was still
there.”—the question looks much different, as the copied material constitutes a small part
of the novel but the entire short story.
Several features of Google’s copying suggest that the better way to look at the
numbers is to take into account the several million lines that Google did not copy. For
one thing, the Sun Java API is inseparably bound to those task-implementing lines. Its
purpose is to call them up. For another, Google copied those lines not because of their
creativity, their beauty, or even (in a sense) because of their purpose. It copied them
because programmers had already learned to work with the Sun Java API’s system, and
it would have been difficult, perhaps prohibitively so, to attract programmers to build its
Android smartphone system without them. Further, Google’s basic purpose was to create
a different task-related system for a different computing environment (smartphones) and
to create a platform—the Android platform—that would help achieve and popularize that
objective. The “substantiality” factor will generally weigh in favor of fair use where, as
here, the amount of copying was tethered to a valid, and transformative, purpose.
We do not agree with the Federal Circuit’s conclusion that Google could have
achieved its Java-compatibility objective by copying only the 170 lines of code that are
“necessary to write in the Java language.” In our view, that conclusion views Google’s
legitimate objectives too narrowly. Google’s basic objective was not simply to make the
Java programming language usable on its Android systems. It was to permit programmers
to make use of their knowledge and experience using the Sun Java API when they wrote
new programs for smartphones with the Android platform. In principle, Google might
have created its own, different system of declaring code. But the jury could have found
that its doing so would not have achieved that basic objective. In a sense, the declaring
code was the key that it needed to unlock the programmers’ creative energies. And it
needed those energies to create and to improve its own innovative Android systems.
We consequently believe that this “substantiality” factor weighs in favor of fair use.
D. Market Effects
The fourth statutory factor focuses upon the “effect” of the copying in the “market
for or value of the copyrighted work.” 17 U. S. C. § 107(4). Consideration of this factor,
at least where computer programs are at issue, can prove more complex than at first it
may seem. It can require a court to consider the amount of money that the copyright
owner might lose. Those losses normally conflict with copyright’s basic objective:
providing authors with exclusive rights that will spur creative expression.
But a potential loss of revenue is not the whole story. We here must consider not
just the amount but also the source of the loss. As we pointed out in Campbell, a “lethal
parody, like a scathing theatre review,” may “kil[l] demand for the original.” Yet this kind
of harm, even if directly translated into foregone dollars, is not “cognizable under the
Copyright Act.”
Further, we must take into account the public benefits the copying will likely
produce. Are those benefits, for example, related to copyright’s concern for the creative
production of new expression? Are they comparatively important, or unimportant, when
compared with dollar amounts likely lost (taking into account as well the nature of the
source of the loss)?

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We do not say that these questions are always relevant to the application of fair
use, not even in the world of computer programs. Nor do we say that these questions are
the only questions a court might ask. But we do find them relevant here in helping to
determine the likely market effects of Google’s reimplementation.
As to the likely amount of loss, the jury could have found that Android did not harm
the actual or potential markets for Java SE. And it could have found that Sun itself (now
Oracle) would not have been able to enter those markets successfully whether Google did,
or did not, copy a part of its API. First, evidence at trial demonstrated that, regardless of
Android’s smartphone technology, Sun was poorly positioned to succeed in the mobile
phone market. The jury heard ample evidence that Java SE’s primary market was laptops
and desktops. Given the evidence showing that Sun was beset by business challenges in
developing a mobile phone product, the jury was entitled to agree with that assessment.
Second, the jury was repeatedly told that devices using Google’s Android platform
were different in kind from those that licensed Sun’s technology. For instance, witnesses
explained that the broader industry distinguished between smartphones and simpler
“feature phones.” As to the specific devices that used Sun-created software, the jury
heard that one of these phones lacked a touchscreen, while another did not have a
QWERTY keyboard. For other mobile devices, the evidence showed that simpler
products, like the Kindle, used Java software, while more advanced technology, like the
Kindle Fire, were built on the Android operating system. This record evidence
demonstrates that, rather than just “repurposing [Sun’s] code from larger computers to
smaller computers,” Google’s Android platform was part of a distinct (and more
advanced) market than Java software.
Looking to these important differences, Google’s economic expert told the jury
that Android was not a market substitute for Java’s software. As he explained, “the two
products are on very different devices,” and the Android platform, which offers “an entire
mobile operating stack,” is a “very different typ[e] of produc[t]” than Java SE, which is
“just an applications programming framework.”
Finally, the jury also heard evidence that Sun foresaw a benefit from the broader
use of the Java programming language in a new platform like Android, as it would further
expand the network of Java-trained programmers. In other words, the jury could have
understood Android and Java SE as operating in two distinct markets. And because there
are two markets at issue, programmers learning the Java language to work in one market
(smartphones) are then able to bring those talents to the other market (laptops).
Sun presented evidence to the contrary. Indeed, the Federal Circuit held that the
“market effects” factor militated against fair use in part because Sun had tried to enter
the Android market. But those licensing negotiations concerned much more than 37
packages of declaring code, covering topics like “the implementation of [Java’s] code”
and “branding and cooperation” between the firms. See also Nimmer on Copyright
(cautioning against the “danger of circularity posed” by considering unrealized licensing
opportunities because “it is a given in every fair use case that plaintiff suffers a loss of a
potential market if that potential is defined as the theoretical market for licensing the
very use at bar”).
On the other hand, Google’s copying helped Google make a vast amount of money
from its Android platform. And enforcement of the Sun Java API copyright might give
Oracle a significant share of these funds. It is important, however, to consider why and
how Oracle might have become entitled to this money. When a new interface, like an
API or a spreadsheet program, first comes on the market, it may attract new users because

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of its expressive qualities, such as a better visual screen or because of its superior
functionality. As time passes, however, it may be valuable for a different reason, namely,
because users, including programmers, are just used to it. They have already learned how
to work with it. See Lotus (Boudin, J., concurring).
The record here is filled with evidence that this factor accounts for Google’s desire
to use the Sun Java API. This source of Android’s profitability has much to do with third
parties’ (say, programmers’) investment in Sun Java programs. It has correspondingly
less to do with Sun’s investment in creating the Sun Java API. We have no reason to
believe that the Copyright Act seeks to protect third parties’ investment in learning how
to operate a created work.
Finally, given programmers’ investment in learning the Sun Java API, to allow
enforcement of Oracle’s copyright here would risk harm to the public. Given the costs
and difficulties of producing alternative APIs with similar appeal to programmers,
allowing enforcement here would make of the Sun Java API’s declaring code a lock
limiting the future creativity of new programs. Oracle alone would hold the key. The
result could well prove highly profitable to Oracle (or other firms holding a copyright in
computer interfaces). But those profits could well flow from creative improvements, new
applications, and new uses developed by users who have learned to work with that
interface. To that extent, the lock would interfere with, not further, copyright’s basic
creativity objectives. See also Sega (“An attempt to monopolize the market by making it
impossible for others to compete runs counter to the statutory purpose of promoting
creative expression”).
The uncertain nature of Sun’s ability to compete in Android’s market place, the
sources of its lost revenue, and the risk of creativity-related harms to the public, when
taken together, convince that this fourth factor—market effects—also weighs in favor of
fair use.
***
The fact that computer programs are primarily functional makes it difficult to apply
traditional copyright concepts in that technological world. See Lotus (Boudin, J.,
concurring). In doing so here, we have not changed the nature of those concepts. We do
not overturn or modify our earlier cases involving fair use—cases, for example, that
involve “knockoff” products, journalistic writings, and parodies. Rather, we here
recognize that application of a copyright doctrine such as fair use has long proved a
cooperative effort of Legislatures and courts, and that Congress, in our view, intended
that it so continue. As such, we have looked to the principles set forth in the fair use
statute, § 107, and set forth in our earlier cases, and applied them to this different kind of
copyrighted work.
We reach the conclusion that in this case, where Google reimplemented a user
interface, taking only what was needed to allow users to put their accrued talents to work
in a new and transformative program, Google’s copying of the Sun Java API was a fair
use of that material as a matter of law. The Federal Circuit’s contrary judgment is reversed,
and the case is remanded for further proceedings in conformity with this opinion.
It is so ordered.
Justice THOMAS, with whom Justice ALITO joins, dissenting. [Omitted.]
••••••••••

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Questions:
1.) This case gives a “fair use legal shield” or safe harbor to some software companies
seeking to make their new programs interoperable with existing programs or existing
programming languages. Is it stronger or weaker than the safe harbor provided by Lotus
v. Borland on subject matter grounds? Both stronger and weaker?
2.) Which aspects of Judge Boudin’s concurrence does Justice Breyer echo in this
opinion? Why does Justice Breyer think that Oracle is not entitled to complete control
over the positive externality created by its program and programming language?
3.) This case completes our case-study on fair use and technology—from video games
to search engines, to the indexing of millions of books, to software. What themes do you
see? What conception of the judicial role? What grade would you give the courts in their
attempt to adapt the law to new technologies?

Note: Transformative Use, Appropriation Art and Mashups
As you have seen, “transformative use” became central in a surprising variety of cases. From
its original role in Acuff-Rose and SunTrust where it protected parodic transformation, it
came to be used by courts dealing with the interaction between copyright and technology—
in the search engine cases and in the Google Books case, where the “transformation” is of a
different kind, and most recently in Google v. Oracle, involving APIs in software.
Appropriation art. Returning to artistic reuses, the breadth of the transformative use
concept reached what the Second Circuit called a “high-water mark” in the 2013 case of
Cariou v. Prince (2d Cir. 2013). The plaintiff, Patrick Cariou, had published a book of
photographs taken while living among Rastafarians in Jamaica called “Yes Rasta.” Richard
Prince—a famous appropriation artist—incorporated Cariou’s photographs (sometimes in
their entirety, sometimes using headshots or other cutouts) into thirty artworks at issue in
the case. The district court had ruled for Cariou, finding that Prince’s work was not
transformative as a whole because “Prince did not intend to comment on Cariou, on
Cariou’s Photos, or on
aspects of popular culture
closely associated with
Cariou.” The Second Circuit disagreed on two
grounds, espousing an
especially broad interpretation of transformative
use. First, it held that “[t]he
law imposes no requirement that a work comment
on the original or its author
in order to be considered
transformative, and a secondary work may conPrince’s “Graduation” shown to the right of Cariou’s original photostitute a fair use even if it
graph. “Graduation” was one of the five works remanded to the district
serves some purpose other
court for a determination of whether it was sufficiently transformative;
Images from the Appendix of Cariou v. Prince.
than those (criticism,

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comment, news reporting, teaching, scholarship, and research) identified in the preamble
to the statute.” It was sufficient that a work “alter the original with ‘new expression,
meaning, or message.’” Second, the court applied an objective test for assessing whether a
work was transformative, focusing on how the work may “reasonably be perceived” rather
than on the defendant’s subjective intent. Accordingly, Prince’s deposition testimony that
he was not “trying to create anything with a new meaning or a new message” and did not
“have any . . . interest in [Mr. Cariou’s] original intent” was beside the point. Applying
these standards, the court concluded that twenty-five of Prince’s artworks were
transformative as a matter of law because they “manifest[ed] an entirely different aesthetic
from Cariou’s photographs,” but remanded to the district court regarding the five remaining
artworks because it was not sufficiently clear whether they offered a “new expression,
meaning, or message.”
In 2021, the Second Circuit retreated from this expansive view of transformative
use in The Andy Warhol Foundation for the Arts v. Lynn Goldsmith (2d Cir. 2021). This
case dealt with Andy Warhol’s “Prince Series,” based on Lynn Goldsmith’s photograph
of the musical artist Prince. (Yes, both of these Second Circuit cases involved people
named Prince.) Here are some of the works in question.

Goldsmith’s photograph

Three of the sixteen works in Warhol’s “Prince Series”

The district court had concluded that the Prince Series “can reasonably be perceived to have transformed Prince from a vulnerable, uncomfortable person to an iconic,
larger-than-life figure.” The Second Circuit disagreed, holding that the Prince Series did
not qualify as fair use as a matter of law. The court rejected the notion that “any
secondary work that adds a new aesthetic or new expression to its source material is
necessarily transformative,” but stopped short of overturning Cariou. Instead, it said this:
“that decision has not been immune from criticism. While we remain bound by Cariou,
and have no occasion or desire to question its correctness on its own facts, our review of
the decision below persuades us that some clarification is in order.”
Whereas Cariou drew criticism for widening the scope of transformative use
beyond its legal moorings, the Warhol “clarification” has been criticized for swinging the
pendulum too far in the opposite direction. Notably, the court attempted to draw a
distinction between “derivative” and “transformative” works, placing the Prince Series
closer to the “derivative” category. In doing so, it stated that “there exists an entire class
of secondary works that add ‘new expression, meaning, or message’ to their source
material but are nonetheless specifically excluded from the scope of fair use: derivative
works” (emphasis in original). However, as you have already learned, this is backwards.
The derivative works right does not circumscribe fair use; instead, the Copyright Act
explicitly says that fair use is a limitation on the derivative works right. Section 106—
which includes the derivative works right—begins with the qualification “Subject to

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section[] 107. . . .” Section 107 is then titled “Limitations on exclusive rights: Fair use”
and states: “Notwithstanding the provisions of sections 106 . . . the fair use of a copyrighted work . . . is not an infringement of copyright.” Plainly, the derivative works right
is subject to the fair use limitation. Some derivative works will be fair uses, and others
will not. On this point, the court appears simply to have misconstrued the law.
Turning to the works at hand, Warhol articulated a higher transformative use
threshold for works of visual art that “share the same overarching purpose.” It reviewed
“conflicting guidance” from precedents involving visual art, and stated that “the bare
assertion of a ‘higher or different artistic use’ is insufficient to render a work transformative. Rather, the secondary work itself must reasonably be perceived as embodying an
entirely distinct artistic purpose, one that conveys a “new meaning or message” entirely
separate from its source material.” The court warned that judges “should not assume the
role of art critic and seek to ascertain the intent behind or meaning of the works at issue”
because “judges are typically unsuited to make aesthetic judgments.” It then arguably
proceeded to do just that in characterizing “the overarching purpose and function” of the
two works and finding that “the cumulative effect” of Warhol’s alterations in providing
a “different impression of its subject” was insufficient to count as transformative.
Moving onto the other statutory factors, the court found that they also weighed
against fair use. Under factor 2, the Goldsmith photograph was both unpublished and
creative. For factor 3, rather than sifting out uncopyrightable material, the court decided
that the copyrightable expression in Goldsmith’s photograph included “the cumulative
manifestation” of her artistic choices, so that “while Goldsmith has no monopoly on
Prince’s face, the law grants her a broad monopoly on its image as it appears in her
photographs of him.” This allowed the court to “readily conclude that the Prince Series
borrows significantly from the Goldsmith Photograph, both quantitatively and qualitatively.” This seems like another clear error. Goldsmith’s copyright over the photograph
covers only its copyrightable subject matter—the expressive choices in lighting, composition, framing and so on. The question should be whether Warhol copied (or copied but
transformed) those protectable elements.
Finally, under factor 4, the court said that while Goldsmith might have an initial
burden of “identifying” relevant markets, the Warhol Foundation had the burden of
proving that its use did not cause market harm. (Remember, the court had held that
Warhol’s work was not transformative.) It held that “although the primary market for the
Goldsmith Photograph and the Prince Series may differ, the Prince Series works pose
cognizable harm to Goldsmith’s market to license the Goldsmith Photograph to
publications for editorial purposes and to other artists to create derivative works based
on the Goldsmith Photograph and similar works.”
We offer this summary of Cariou and Warhol because they are notable recent cases
in a Circuit that is very important to copyright, not because we think they are correct.
Both cases are significantly flawed. Cariou is a caricature of transformative use run wild,
with judges legislating aesthetics from the bench as a matter of law. We would predict
that Warhol, at least, will be overturned, possibly quite soon. Its apparent attempt to
exempt derivative works from fair use is simply wrong as a matter of basic statutory
interpretation, as well as being inconsistent with Supreme Court precedent. Since fair use
reflects First Amendment concerns, it also raises troubling constitutional issues.
Mash-ups. When do mash-ups qualify for fair use? In Dr. Seuss Enterprises v. ComicMix
(9th Cir. 2020), the Ninth Circuit held that the mash-up Oh, the Place You’ll Boldly Go!
(“Boldly”)—which combined elements from works by Dr. Seuss including Oh, the

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Places You’ll Go! (“Go!”) with elements from the Star Trek franchise—was not
protected by fair use, reversing the district court’s decision to the contrary. Here are some
images from the books in question.

The district court had found the mash-up “highly transformative,” explaining that
“Defendants did not copy verbatim text from Go! in writing Boldly, nor did they replicate
entire illustrations from Go! Although Defendants certainly borrowed from Go!—at times
liberally—the elements borrowed were always adapted or transformed.” The Ninth
Circuit disagreed, concluding that Boldly was not transformative because it “merely
repackaged” Go! rather than altering it: “While Boldly may have altered Star Trek by
sending Captain Kirk and his crew to a strange new world, that world, the world of Go!,
remains intact. Go! was merely repackaged into a new format, carrying the story of the
Enterprise crew’s journey through a strange star in a story shell already intricately
illustrated by Dr. Seuss.” Even though ComicMix claimed that Boldly had “extensive new
content,” the court said that “the addition of new expression to an existing work is not a
get-out-of-jail-free card that renders the use of the original transformative.” The court also
found that Boldly was not a parody of Go! because “the juxtapositions of Go! and Star
Trek elements do not ‘hold [Seussian] style’ up to ridicule. From the project’s inception,
ComicMix wanted Boldly to be a Star Trek primer that ‘evoke[s]’ rather than ‘ridicule[s]’
Go!. . . . We also reject as ‘completely unconvincing’ ComicMix’s ‘post-hoc characterization of the work’ as criticizing the theme of banal narcissism in Go!.”
The finding of non-transformative use under the first factor affected the analysis
of the fourth factor. The district court, after finding that Boldly was transformative, had
shifted the burden to Seuss on market harm, and concluded that “the harm to Plaintiff’s
market remains speculative.” By contrast, the Ninth Circuit placed the burden firmly on
the Defendants: “ComicMix’s non-transformative and commercial use of Dr. Seuss’s
works likely leads to ‘cognizable market harm to the original.’ Not much about the fair use
doctrine lends itself to absolute statements, but the Supreme Court and our circuit have
unequivocally placed the burden of proof on the proponent of the affirmative defense of
fair use.” ComicMix’s “scant evidence” was inadequate to carry this burden. Focusing on
“Seuss’s strong brand,” the court found that Boldly harmed Seuss’s extensive derivative
works market, which included authorized Go! derivatives such as the books Oh, The Things
You Can Do That Are Good For You!; Oh, the Places I’ll Go! By ME, Myself; Oh, Baby,
the Places You’ll Go!; and Oh, the Places I’ve Been! A Journal. The court posited that “the
unrestricted and widespread conduct of the sort ComicMix is engaged in could result in
anyone being able to produce, without Seuss’s permission, Oh the Places Yoda’ll Go!, Oh
the Places You’ll Pokemon Go!, Oh the Places You’ll Yada Yada Yada!, and countless
other mash-ups.” This “could ‘create incentives to pirate intellectual property’ and
disincentivize the creation of illustrated books.”

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5.) A Fair Use Case-Study: Multiple Copies for Classroom Use

Princeton University Press v.
Michigan Document Services, Inc.

99 F.3d 1381 (6th Cir. 1996 en banc)

DAVID A. NELSON, Circuit Judge.
This is a copyright infringement case. The corporate defendant, Michigan
Document Services, Inc., is a commercial copyshop that reproduced substantial segments
of copyrighted works of scholarship, bound the copies into “coursepacks,” and sold the
coursepacks to students for use in fulfilling reading assignments given by professors at
the University of Michigan. The copyshop acted without permission from the copyright
holders, and the main question presented is whether the “fair use” doctrine codified at 17
U.S.C. § 107 obviated the need to obtain such permission.
Answering this question “no,” and finding the infringement willful, the district
court entered a summary judgment order in which the copyright holders were granted
equitable relief and were awarded damages that may have been enhanced for willfulness.
Princeton Univ. Press v. Michigan Document Servs., Inc. (E.D. Mich. 1994). A threejudge panel of this court reversed the judgment on appeal, but a majority of the active
judges of the court subsequently voted to rehear the case en banc. The appeal has now
been argued before the full court.
We agree with the district court that the defendants’ commercial exploitation of the
copyrighted materials did not constitute fair use, and we shall affirm that branch of the
district court’s judgment. We believe that the district court erred in its finding of
willfulness, however, and we shall vacate the damages award because of its possible
linkage to that finding. . . .
Ann Arbor, the home of the University of Michigan, is also home to several
copyshops. Among them is defendant Michigan Document Services (MDS), a
corporation owned by defendant James Smith. We are told that MDS differs from most,
if not all, of its competitors in at least one important way: it does not request permission
from, nor does it pay agreed royalties to, copyright owners.
Mr. Smith has been something of a crusader against the system under which his
competitors have been paying agreed royalties, or “permission fees” as they are known in
the trade. The story begins in March of 1991, when Judge Constance Baker Motley, of the
United States District Court for the Southern District of New York, decided the first
reported case involving the copyright implications of educational coursepacks. See Basic
Books, Inc. v. Kinko’s Graphics Corp. (S.D.N.Y. 1991), holding that a Kinko’s copyshop
had violated the copyright statute by creating and selling coursepacks without permission
from the publishing houses that held the copyrights. After Kinko’s, we are told, many
copyshops that had not previously requested permission from copyright holders began to
obtain such permission. Mr. Smith chose not to do so. He consulted an attorney, and the
attorney apparently advised him that while it was “risky” not to obtain permission, there
were flaws in the Kinko’s decision. Mr. Smith also undertook his own study of the fair use
doctrine, reading what he could find on this subject in a law library. He ultimately
concluded that the Kinko’s case had been wrongly decided, and he publicized this
conclusion through speeches, writings, and advertisements. His advertisements stressed

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493

that professors whose students purchased his coursepacks would not have to worry about
delays attendant upon obtaining permission from publishers.
Not surprisingly, Mr. Smith attracted the attention of the publishing industry. Three
publishers—Princeton University Press, MacMillan, Inc., and St. Martin’s Press, Inc.—
eventually brought the present suit against Mr. Smith and his corporation.
Each of the plaintiff publishers maintains a department that processes requests for
permission to reproduce portions of copyrighted works. (In addition, copyshops may request
such permission through the Copyright Clearance Center, a national clearinghouse.)
Macmillan and St. Martin’s, both of which are for-profit companies, claim that they
generally respond within two weeks to requests for permission to make copies for classroom
use. Princeton, a non-profit organization, claims to respond within two to four weeks. Mr.
Smith has not put these claims to the test, and he has not paid permission fees. . . .
II
The fair use doctrine, which creates an exception to the copyright monopoly,
“permits [and requires] courts to avoid rigid application of the copyright statute when,
on occasion, it would stifle the very creativity which that law is designed to foster.”
Campbell v. Acuff-Rose Music, Inc. (1994). Initially developed by the courts, the doctrine
was codified at 17 U.S.C. § 107 in 1976. Congress used the following formulation in
Section 107:
“[T]he fair use of a copyrighted work, including such use by reproduction in copies . . . for purposes such as criticism, comment, news
reporting, teaching (including multiple copies for classroom use). . . .”
This language does not provide blanket immunity for “multiple copies for classroom
use.” Rather, “whether a use referred to in the first sentence of Section 107 is a fair use in a
particular case . . . depend[s] upon the application of the determinative factors.” Campbell.1
The four statutory factors may not have been created equal. In determining whether
a use is “fair,” the Supreme Court has said that the most important factor is the fourth,
the one contained in 17 U.S.C. § 107(4). See Harper & Row Publishers, Inc. v. Nation
Enters. (But see American Geophysical Union v. Texaco Inc. (2d Cir. 1994), suggesting
that the Supreme Court may now have abandoned the idea that the fourth factor is of
paramount importance.) We take it that this factor, “the effect of the use upon the
potential market for or value of the copyrighted work,” is at least primus inter pares,
figuratively speaking, and we shall turn to it first.

1
Judge Merritt’s dissent rejects this proposition and asserts, in effect, that under the plain language of the
copyright statute the making of multiple copies for classroom use constitutes fair use ipso facto. Judge
Merritt’s reading of the statute would be unassailable if Congress had said that “the use of a copyrighted
work for purposes such as teaching (including multiple copies for classroom use) is not an infringement of
copyright.” But that is not what Congress said. It said, rather, that “the fair use of a copyrighted work,
including such use [i.e. including “fair use”] . . . for purposes such as . . . teaching (including multiple copies
for classroom use) . . . is not an infringement of copyright.”
When read in its entirety, as Judge Ryan’s dissent correctly recognizes, the quoted sentence says that
fair use of a copyrighted work for purposes such as teaching (including multiple copies for classroom use)
is not an infringement. And the statutory factors set forth in the next sentence must be considered in
determining whether the making of multiple copies for classroom use is a fair use in “any particular case,”
just as the statutory factors must be considered in determining whether any other use referred to in the first
sentence is a fair use in a particular case. To hold otherwise would be to subvert the intent manifested in the
words of the statute and confirmed in the pertinent legislative history.

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The burden of proof as to market effect rests with the copyright holder if the challenged use is of a “noncommercial” nature. The alleged infringer has the burden, on the
other hand, if the challenged use is “commercial” in nature. Sony Corp. v. Universal City
Studios, Inc. (1984). In the case at bar the defendants argue that the burden of proof rests
with the publishers because the use being challenged is “noncommercial.” We disagree.
It is true that the use to which the materials are put by the students who purchase
the coursepacks is noncommercial in nature. But the use of the materials by the students
is not the use that the publishers are challenging. What the publishers are challenging is
the duplication of copyrighted materials for sale by a for-profit corporation that has
decided to maximize its profits—and give itself a competitive edge over other
copyshops—by declining to pay the royalties requested by the holders of the copyrights.2
The defendants’ use of excerpts from the books at issue here was no less
commercial in character than was The Nation magazine’s use of copyrighted material in
Harper & Row, where publication of a short article containing excerpts from the still
unpublished manuscript of a book by President Ford was held to be an unfair use. Like
the students who purchased unauthorized coursepacks, the purchasers of The Nation did
not put the contents of the magazine to commercial use—but that did not stop the
Supreme Court from characterizing the defendant’s use of the excerpts as “a publication
[that] was commercial as opposed to nonprofit. . . .” Harper & Row. And like the use that
is being challenged in the case now before us, the use challenged in Harper & Row was
“presumptively an unfair exploitation of the monopoly privilege that belongs to the
owner of the copyright.” [Q]uoting Sony.3
The strength of the Sony presumption may vary according to the context in which it
arises, and the presumption disappears entirely where the challenged use is one that transforms the original work into a new artistic creation. See Campbell. Perhaps the presumption
is weaker in the present case than it would be in other contexts. There is a presumption of
unfairness here, nonetheless, and we are not persuaded that the defendants have rebutted it.
If we are wrong about the existence of the presumption—if the challenged use is
not commercial, in other words, and if the plaintiff publishers have the burden of proving
an adverse effect upon either the potential market for the copyrighted work or the
potential value of the work—we believe that the publishers have carried the burden of
proving a diminution in potential market value.
Two of the dissents suggest that a copyshop merely stands in the shoes of its customers and makes no “use”
of copyrighted materials that differs materially from the use to which the copies are put by the ultimate
consumer. But subject to the fair use exception, 17 U.S.C. § 106 gives the copyright owner the “exclusive”
right “to reproduce the copyrighted work in copies. . . .” And if the fairness of making copies depends on
what the ultimate consumer does with the copies, it is hard to see how the manufacture of pirated editions of
any copyrighted work of scholarship could ever be an unfair use. As discussed infra, the dissenters’
suggestion—which proposes no limiting principle—runs counter to the legislative history of the Copyright
Act and has properly been rejected by the courts.
3
Judge Ryan’s dissent maintains that there cannot be an “exploitation” of a copyrighted work unless the
exploiter assesses the work’s market potential, makes a selection based on content, and realizes a profit from
the substance of the work. But the dictionary defines “exploit” in terms that include “to take advantage of,
utilize,” see Webster’s Third New International Dictionary (Unabridged), and nothing in Harper & Row
suggests that the Supreme Court intended a narrower or more idiosyncratic meaning.
The dissent also points out that it was magazine employees, not outsiders, who obtained the
unpublished manuscript of the Ford book and selected the portions that were included in the offending article.
But nothing turns on the “in house” character of such activities. If a college professor had obtained the
manuscript, selected the excerpts and peddled the article on a freelance basis, can anyone doubt that it would
have been a violation of the copyright for The Nation to publish the professor’s article?
2

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One test for determining market harm—a test endorsed by the Supreme Court in
Sony, Harper & Row, and Campbell—is evocative of Kant’s categorical imperative. “[T]o
negate fair use,” the Supreme Court has said, “one need only show that if the challenged
use ‘should become widespread, it would adversely affect the potential market for the
copyrighted work.’” Harper & Row, quoting Sony. Under this test, we believe, it is
reasonably clear that the plaintiff publishers have succeeded in negating fair use.
As noted above, most of the copyshops that compete with MDS in the sale of
coursepacks pay permission fees for the privilege of duplicating and selling excerpts
from copyrighted works. The three plaintiffs together have been collecting permission
fees at a rate approaching $500,000 a year. If copyshops across the nation were to start
doing what the defendants have been doing here, this revenue stream would shrivel and
the potential value of the copyrighted works of scholarship published by the plaintiffs
would be diminished accordingly.
The defendants contend that it is circular to assume that a copyright holder is
entitled to permission fees and then to measure market loss by reference to the lost fees.
They argue that market harm can only be measured by lost sales of books, not permission
fees. But the circularity argument proves too much. Imagine that the defendants set up a
printing press and made exact reproductions—asserting that such reproductions
constituted “fair use”—of a book to which they did not hold the copyright. Under the
defendants’ logic it would be circular for the copyright holder to argue market harm
because of lost copyright revenues, since this would assume that the copyright holder
had a right to such revenues.
A “circularity” argument indistinguishable from that made by the defendants here
was rejected by the Second Circuit in American Geophysical, where the photocopying of
scientific articles for use by Texaco researchers was held to be an unfair use. It is true, the
Second Circuit acknowledged, that “a copyright holder can always assert some degree of
adverse [e]ffect on its potential licensing revenues as a consequence of [the defendant’s
use] . . . simply because the copyright holder has not been paid a fee to permit that
particular use.” But such an assertion will not carry much weight if the defendant has
“filled a market niche that the [copyright owner] simply had no interest in occupying.”
Where, on the other hand, the copyright holder clearly does have an interest in exploiting
a licensing market—and especially where the copyright holder has actually succeeded in
doing so—“it is appropriate that potential licensing revenues for photocopying be
considered in a fair use analysis.” American Geophysical. Only “traditional, reasonable,
or likely to be developed markets” are to be considered in this connection, and even the
availability of an existing system for collecting licensing fees will not be conclusive.4 But
Congress has implicitly suggested that licensing fees should be recognized in appropriate
cases as part of the potential market for or value of the copyrighted work, and it was
primarily because of lost licensing revenue that the Second Circuit agreed with the finding
of the district court in American Geophysical that “the publishers have demonstrated a
substantial harm to the value of their copyrights through [Texaco’s] copying.”
The approach followed by Judges Newman and Leval in the American Geophysical
4

Although not conclusive, the existence of an established license fee system is highly relevant:
“[I]t is sensible that a particular unauthorized use should be considered ‘more fair’ when
there is no ready market or means to pay for the use, while such an unauthorized use
should be considered ‘less fair’ when there is a ready market or means to pay for the use.
The vice of circular reasoning arises only if the availability of payment is conclusive
against fair use.”

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litigation is fully consistent with the Supreme Court case law. In Harper & Row, where
there is no indication in the opinion that the challenged use caused any diminution in sales
of President Ford’s memoirs, the Court found harm to the market for the licensing of
excerpts. The Court’s reasoning—which was obviously premised on the assumption that
the copyright holder was entitled to licensing fees for use of its copyrighted materials—is
no more circular than that employed here. And in Campbell, where the Court was unwilling
to conclude that the plaintiff had lost licensing revenues under the fourth statutory factor,
the Court reasoned that a market for critical parody was not one “that creators of original
works would in general develop or license others to develop.” Campbell.
The potential uses of the copyrighted works at issue in the case before us clearly
include the selling of permission to reproduce portions of the works for inclusion in
coursepacks—and the likelihood that publishers actually will license such reproduction
is a demonstrated fact. A licensing market already exists here, as it did not in a case on
which the plaintiffs rely, Williams & Wilkins Co. v. United States (1973). Thus there is
no circularity in saying, as we do say, that the potential for destruction of this market by
widespread circumvention of the plaintiffs’ permission fee system is enough, under the
Harper & Row test, “to negate fair use.”
Our final point with regard to the fourth statutory factor concerns the affidavits of
the three professors who assigned one or more of the copyrighted works to be read by
their students. The defendants make much of the proposition that these professors only
assigned excerpts when they would not have required their students to purchase the entire
work. But what seems significant to us is that none of these affidavits shows that the
professor executing the affidavit would have refrained from assigning the copyrighted
work if the position taken by the copyright holder had been sustained beforehand.
It is true that Professor Victor Lieberman, who assigned the excerpt from the Olson
and Roberts book on America and Vietnam, raises questions about the workability of the
permission systems of “many publishers.” In 1991, Professor Lieberman avers, a Kinko’s
copyshop to which he had given materials for inclusion in a coursepack experienced
serious delays in obtaining permissions from unnamed publishers. Professor Lieberman
does not say that timely permission could not have been obtained from the publisher of
the Olson and Roberts book, however, and he does not say that he would have refrained
from assigning the work if the copyshop had been required to pay a permission fee for it.
It is also true that the publisher of one of the copyrighted works in question here
(Public Opinion, by Walter Lippmann) would have turned down a request for permission
to copy the 45-page excerpt included in a coursepack prepared to the specifications of
Professor Donald Kinder. The excerpt was so large that the publisher would have
preferred that students buy the book itself, and the work was available in an inexpensive
paperback edition. But Professor Kinder does not say that he would have refrained from
assigning the excerpt from the Lippmann book if it could not have been included in the
coursepack. Neither does he say that he would have refrained from assigning any of the
other works mentioned in his affidavit had he known that the defendants would be
required to pay permission fees for them.
The third professor, Michael Dawson, assigned a 95-page excerpt from the book
on black politics by Nancy Weiss. Professor Dawson does not say that a license was not
available from the publisher of the Weiss book, and he does not say that the license fee
would have deterred him from assigning the book.

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III
In the context of nontransformative uses, at least, and except insofar as they touch
on the fourth factor, the other statutory factors seem considerably less important. We
shall deal with them relatively briefly.
A
As to “the purpose and character of the use, including whether such use is of a
commercial nature or is for nonprofit educational purposes,” 17 U.S.C. § 107(1), we have
already explained our reasons for concluding that the challenged use is of a commercial
nature.
The defendants argue that the copying at issue here would be considered “nonprofit
educational” if done by the students or professors themselves. The defendants also note
that they can profitably produce multiple copies for less than it would cost the professors
or the students to make the same number of copies. Most of the copyshops with which
the defendants compete have been paying permission fees, however, and we assume that
these shops too can perform the copying on a more cost-effective basis than the
professors or students can. This strikes us as a more significant datum than the ability of
a black market copyshop to beat the do-it-yourself cost.
As to the proposition that it would be fair use for the students or professors to make
their own copies, the issue is by no means free from doubt. We need not decide this
question, however, for the fact is that the copying complained of here was performed on
a profit-making basis by a commercial enterprise. And “[t]he courts have . . . properly
rejected attempts by for-profit users to stand in the shoes of their customers making
nonprofit or noncommercial uses.” Patry, Fair Use in Copyright Law. As the House
Judiciary Committee stated in its report on the 1976 legislation,
“[I]t would not be possible for a non-profit institution, by means of
contractual arrangements with a commercial copying enterprise, to
authorize the enterprise to carry out copying and distribution functions
that would be exempt if conducted by the non-profit institution itself.”
It should be noted, finally, that the degree to which the challenged use has
transformed the original copyrighted works—another element in the first statutory
factor—is virtually indiscernible. If you make verbatim copies of 95 pages of a 316-page
book, you have not transformed the 95 pages very much—even if you juxtapose them to
excerpts from other works and package everything conveniently. This kind of mechanical
“transformation” bears little resemblance to the creative metamorphosis accomplished
by the parodists in the Campbell case. . . .
V
We take as our text for the concluding part of this discussion of fair use Justice
Stewart’s well-known exposition of the correct approach to “ambiguities” in the copyright law:
“The immediate effect of our copyright law is to secure a fair return for
an ‘author’s’ creative labor. But the ultimate aim is, by this incentive, to
stimulate artistic creativity for the general public good. ‘The sole interest
of the United States and the primary object in conferring the monopoly,’
this Court has said, ‘lie in the general benefits derived by the public from
the labors of authors.’ . . . When technological change has rendered its
literal terms ambiguous, the Copyright Act must be construed in light of

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this basic purpose.” Twentieth Century Music Corp. v. Aiken (1975).
The defendants attach considerable weight to the assertions of numerous academic
authors that they do not write primarily for money and that they want their published
writings to be freely copyable. The defendants suggest that unlicensed copying will
“stimulate artistic creativity for the general public good.”
This suggestion would be more persuasive if the record did not demonstrate that
licensing income is significant to the publishers. It is the publishers who hold the copyrights,
of course—and the publishers obviously need economic incentives to publish scholarly
works, even if the scholars do not need direct economic incentives to write such works.
The writings of most academic authors, it seems fair to say, lack the general appeal
of works by a Walter Lippmann, for example. (Lippmann is the only non-academic author
whose writings are involved in this case.) One suspects that the profitability of at least some
of the other books at issue here is marginal. If publishers cannot look forward to receiving
permission fees, why should they continue publishing marginally profitable books at all?
And how will artistic creativity be stimulated if the diminution of economic incentives for
publishers to publish academic works means that fewer academic works will be published?
The fact that a liberal photocopying policy may be favored by many academics
who are not themselves in the publishing business has little relevance in this connection.
As Judge Leval observed in American Geophysical,
“It is not surprising that authors favor liberal photocopying; generally
such authors have a far greater interest in the wide dissemination of their
work than in royalties—all the more so when they have assigned their
royalties to the publisher. But the authors have not risked their capital to
achieve dissemination. The publishers have. Once an author has
assigned her copyright, her approval or disapproval of photocopying is
of no further relevance.”
In the case at bar the district court was not persuaded that the creation of new works
of scholarship would be stimulated by depriving publishers of the revenue stream derived
from the sale of permissions. Neither are we. On the contrary, it seems to us, the
destruction of this revenue stream can only have a deleterious effect upon the incentive
to publish academic writings.
VI
The district court’s conclusion that the infringement was willful is somewhat more
problematic, in our view. The Copyright Act allows the collection of statutory damages
of between $500 and $20,000 for each work infringed. 17 U.S.C. § 504(c)(1). Where the
copyright holder establishes that the infringement is willful, the court may increase the
award to not more than $100,000. 17 U.S.C. § 504(c)(2). If the court finds that the
infringement was innocent, on the other hand, the court may reduce the damages to not
less than $200. Here the district court awarded $5,000 per work infringed, characterizing
the amount of the award as “a strong admonition from this court.”
Willfulness, under this statutory scheme, has a rather specialized meaning. As
Professor Nimmer explains,
“In other contexts [‘willfulness’] might simply mean an intent to copy,
without necessarily an intent to infringe. It seems clear that as here used,
‘willfully’ means with knowledge that the defendant’s conduct
constitutes copyright infringement. Otherwise, there would be no point
in providing specially for the reduction of minimum awards in the case

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of innocent infringement, because any infringement that was nonwillful
would necessarily be innocent. This seems to mean, then, that one who
has been notified that his conduct constitutes copyright infringement,
but who reasonably and in good faith believes the contrary, is not
‘willful’ for these purposes.”
The plaintiffs do not contest the good faith of Mr. Smith’s belief that his conduct
constituted fair use; only the reasonableness of that belief is challenged. “Reasonableness,” in the present context, is essentially a question of law. The facts of the instant case
are not in dispute, and the issue is whether the copyright law supported the plaintiffs’
position so clearly that the defendants must be deemed as a matter of law to have exhibited
a reckless disregard of the plaintiffs’ property rights. We review this issue de novo.
Fair use is one of the most unsettled areas of the law. The doctrine has been said
to be “so flexible as virtually to defy definition.” Time Inc. v. Bernard Geis Assoc.
(S.D.N.Y. 1968). The potential for reasonable disagreement here is illustrated by the
forcefully argued dissents and the now-vacated panel opinion. In the circumstances of
this case, we cannot say that the defendants’ belief that their copying constituted fair use
was so unreasonable as to bespeak willfulness. Accordingly, we shall remand the case
for reconsideration of the statutory damages to be awarded. . . .
VIII
The grant of summary judgment on the fair use issue is AFFIRMED. The award
of damages is VACATED, and the case is REMANDED for reconsideration of damages
and for entry of a separate judgment not inconsistent with this opinion.
BOYCE F. MARTIN, Jr., Chief Judge, dissenting.
This case presents for me one of the more obvious examples of how laudable
societal objectives, recognized by both the Constitution and statute, have been thwarted
by a decided lack of judicial prudence. Copyright protection as embodied in the
Copyright Act of 1976 is intended as a public service to both the creator and the consumer
of published works. Although the Act grants to individuals limited control over their
original works, it was drafted to stimulate the production of those original works for the
benefit of the whole nation. The fair use doctrine, which requires unlimited public access
to published works in educational settings, is one of the essential checks on the otherwise
exclusive property rights given to copyright holders under the Copyright Act.
Ironically, the majority’s rigid statutory construction of the Copyright Act grants
publishers the kind of power that Article I, Section 8 of the Constitution is designed to guard
against. The Copyright Clause grants Congress the power to create copyright interests that
are limited in scope. Consequently, the Copyright Act adopted the fair use doctrine to protect
society’s vested interest in the sharing of ideas and information against pursuits of illegitimate or excessive private proprietary claims. While it may seem unjust that publishers must
share, in certain situations, their work-product with others, free of charge, that is not some
“unforeseen byproduct of a statutory scheme;” rather, it is the “essence of copyright” and a
“constitutional requirement.” Feist Publications, Inc. v. Rural Tel. Serv. Co. (1991).
Michigan Document Services provided a service to the University of Michigan that
promoted scholarship and higher education. Michigan Document Services was paid for its
services; however, that fact does not obviate a fair use claim under these facts. Requiring
Michigan Document Services to pay permission fees in this instance is inconsistent with
the primary mission of the Copyright Act. The individual rights granted by the Act are

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subservient to the Act’s primary objective, which is the promotion of creativity generally.
We must therefore consider the fair use provision of Section 107 of the Act in light of the
sum total of public benefits intended by copyright law. In this instance, there is no adverse
economic impact on Princeton University Press that can outweigh the benefits provided by
Michigan Document Services. Indeed, to presume adverse economic impact, as has the
majority, is to presume that the $50,000 in fees currently earned by plaintiff is mandated
by the Act in every instance—something I hesitate to presume.
That the majority lends significance to the identity of the person operating the
photocopier is a profound indication that its approach is misguided. Given the focus of
the Copyright Act, the only practical difference between this case and that of a student
making his or her own copies is that commercial photocopying is faster and more costeffective. Censuring incidental private sector profit reflects little of the essence of
copyright law. Would the majority require permission fees of the Professor’s teaching
assistant who at times must copy, at the Professor’s behest, copyrighted materials for
dissemination to a class, merely because such assistant is paid an hourly wage by the
Professor for this work?
The majority’s strict reading of the fair use doctrine promises to hinder scholastic
progress nationwide. By charging permission fees on this kind of job, publishers will
pass on expenses to colleges and universities that will, of course, pass such fees on to
students. Students may also be harmed if added expenses and delays cause professors to
opt against creating such specialized anthologies for their courses. Even if professors
attempt to reproduce the benefits of such a customized education, the added textbook
cost to students is likely to be prohibitive.
The Copyright Act does not suggest such a result. Rather, the fair use doctrine
contemplates the creation and free flow of information; the unhindered flow of such
information through, among other things, education in turn spawns the creation and free
flow of new information.
In limiting the right to copy published works in the Copyright Act, Congress
created an exception for cases like the one before us. When I was in school, you bought
your books and you went to the library for supplemental information. To record this
supplemental information, in order to learn and benefit from it, you wrote it out longhand or typed out what you needed—not easy, but effective. Today, with the help of free
enterprise and technology, this fundamental means of obtaining information for study
has been made easier. Students may now routinely acquire inexpensive copies of the
information they need without all of the hassle. The trend of an instructor giving
information to a copying service to make a single set of copies for each student for a
small fee is just a modern approach to the classic process of education. To otherwise
enforce this statute is nonsensical. I therefore dissent.
MERRITT, Circuit Judge, dissenting.
The copying done in this case is permissible under the plain language of the
copyright statute that allows “multiple copies for classroom use:” “[T]he fair use of a
copyrighted work . . . for purposes such as . . . teaching (including multiple copies for
classroom use), . . . is not an infringement of copyright.” 17 U.S.C. § 107 (emphasis
added). Also, the injunction the Court has upheld exceeds the protections provided by
the Copyright Act of 1976 regardless of whether the use was a fair use and is so grossly
overbroad that it violates the First Amendment.

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I
This is a case of first impression with broad consequences. Neither the Supreme
Court nor any other court of appeals has interpreted the exception allowing “multiple
copies for classroom use” found in § 107 of the copyright statute. There is no legal
precedent and no legal history that supports our Court’s reading of this phrase in a way that
outlaws the widespread practice of copying for classroom use by teachers and students.
For academic institutions, the practical consequences of the Court’s decision in
this case are highly unsatisfactory, to say the least. Anyone who makes multiple copies
for classroom use for a fee is guilty of copyright infringement unless the portion copied
is just a few paragraphs long. Chapters from a book or articles from a journal are
verboten. No longer may Kinko’s and other corner copyshops, or school bookstores,
libraries and student-run booths and kiosks copy anything for a fee except a small
passage. I do not see why we should so construe plain statutory language that on its face
permits “multiple copies for classroom use.” The custom of making copies for classroom
use for a fee began during my college and law school days forty years ago and is now
well-established. I see no justification for overturning this long-established practice.
I disagree with the Court’s method of analyzing and explaining the statutory
language of § 107 providing a fair use exception.1 Except for “teaching,” the statute is
cast in general, abstract language that allows fair use for “criticism,” “comment,” “news
reporting” and “research.” The scope or extent of copying allowed for these uses is left
undefined. Not so for “teaching.” This purpose, and this purpose alone, is immediately
followed by a definition. The definition allows “multiple copies for classroom use” of
copyrighted material. The four factors to be considered, e.g., market effect and the
portion of the work used, are of limited assistance when the teaching use at issue fits
squarely within the specific language of the statute, i.e., “multiple copies for classroom
use.” In the present case that is all we have—“multiple copies for classroom use.”
There is nothing in the statute that distinguishes between copies made for students
by a third person who charges a fee for their labor and copies made by students
themselves who pay a fee only for use of the copy machine. Our political economy
generally encourages the division and specialization of labor. There is no reason why in
this instance the law should discourage high schools, colleges, students and professors
from hiring the labor of others to make their copies any more than there is a reason to
discourage lawyers from hiring paralegals to make copies for clients and courts. The
Court’s distinction in this case based on the division of labor—who does the copying—
is short sighted and unsound economically.
Our Court cites no authority for the proposition that the intervention of the
copyshop changes the outcome of the case. The Court errs by focusing on the “use” of
the materials made by the copyshop in making the copies rather than upon the real user
of the materials—the students. Neither the District Court nor our Court provides a
rationale as to why the copyshops cannot “stand in the shoes” of their customers in
Both the majority opinion and Judge Ryan’s dissent approach the determination of whether the use at issue
here is infringing solely by use of the four statutory factors set out in § 107. Neither the plain language of
the statute nor the case law requires that determination to be made solely on the narrow grounds of those
four factors. Because the plain language of the statute is clear concerning “multiple copies for classroom
use” and because determinations of infringement are to be made on a case-by-case basis taking into
consideration the reasonableness of the copying from an equitable perspective, I do not believe that the four
factors are controlling. The specific plain language should be given much more weight in this case than the
four abstract considerations of little relevance to copying for classroom use.
1

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making copies for noncommercial, educational purposes where the copying would be
fair use if undertaken by the professor or the student personally. . . .
Turning to the effect of the use upon the potential market for or value of the
copyrighted work, plaintiffs here have failed to demonstrate that the photocopying done
by defendant has caused even marginal economic harm to their publishing business. As
the Court concedes, the publishers would prefer that students purchase the publications
containing the excerpts instead of receiving photocopies of excerpts from the
publications. What the publishers would “prefer” is not part of the analysis to determine
the effect on the potential market. We are to examine what the facts tell us about the
market effect. The facts demonstrate that it is only wishful thinking on the part of the
publishers that the professors who assigned the works in question would have directed
their students to purchase the entire work if the excerpted portions were unavailable for
copying. The excerpts copied were a small percentage of the total work, and, as the
professors testified, it seems more likely that they would have omitted the work
altogether instead of requiring the students to purchase the entire work.
The use complained of by plaintiffs here has been widespread for many years and
the publishers have not been able to demonstrate any significant harm to the market for
the original works during that time. The publishing industry tried to persuade Congress
in 1976 to ban the type of copying done by defendant here. Congress declined to do so
and the publishing industry has been trying ever since to work around the language of
the statute to expand its rights.
It is also wrong to measure the amount of economic harm to the publishers by loss
of a presumed license fee—a criterion that assumes that the publishers have the right to
collect such fees in all cases where the user copies any portion of published works. The
majority opinion approves of this approach by affirming the issuance of an injunction
prohibiting defendant from copying any portion of plaintiffs’ works. It does so without
requiring a case-by-case determination of infringement as mandated by the Supreme Court.
The publishers have no right to such a license fee. Simply because the publishers
have managed to make licensing fees a significant source of income from copyshops and
other users of their works does not make the income from the licensing a factor on which
we must rely in our analysis. If the publishers have no right to the fee in many of the
instances in which they are collecting it, we should not validate that practice by now
using the income derived from it to justify further imposition of fees. Our job is simply
to determine whether the use here falls within the § 107 exception for “multiple copies
for classroom use.” If it does, the publisher cannot look to us to force the copyshop to
pay a fee for the copying.
The Court states that defendant has declined to pay “agreed royalties” to the
holders of the copyrights. Agreed to by whom? Defendant has not “agreed” to pay the
publishers anything. It is fair to label a royalty as “agreed to” only when the publisher
has appropriately negotiated a fee with the copyshop for use of the copy in question.
III
The injunction upheld by the Court, as it stands now, extends the rights of the
copyright owners far beyond the limits prescribed by Congress.2 It prohibits defendant
2
Although the majority has modified its original draft of the opinion to order a remand directing the district
court (1) to set out the injunction in a separate order as required by Federal Rule of Civil Procedure 65 and
(2) to set forth “more precisely” the scope of the injunction, the remand instruction gives virtually no

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from copying any excerpts from plaintiffs’ materials, both those now in existence and
any that may be published by plaintiffs in the future, regardless of whether the entire
work is appropriately protected by copyright or whether the copying is for classroom use
or is otherwise a fair use. The injunction prohibits defendant from copying from
copyrighted works of the plaintiffs, without regard to length, content or purpose of the
copying and without any recognition that the doctrine of fair use exists. The injunction
avoids the necessity of determining whether the copying is an infringement or a fair
use—any copying and dissemination is forbidden. The injunction also protects future
publications of plaintiffs—works that have not yet even been created—without any
knowledge as to the level of copyright protection the works would normally be afforded.
The gross overbreadth of the injunction appears to violate the First Amendment.
The purpose of the First Amendment is to facilitate the widest possible dissemination of
information. “From a first amendment viewpoint, the effect of an injunction is to restrain
the infringing expression altogether—an effect which goes beyond what is necessary to
secure the copyright property.” Goldstein, Copyright and the First Amendment, 70
Colum. L. Rev. 983, 1030 (1970); 3 Nimmer § 14.06[B] (where public harm would result
from the injunction, courts should award damages in lieu of injunction).
In sum, the injunction imposed here—an injunction that provides blanket
copyright protection for all the works of a given publisher without regard to the
limitations on copyright protection—is overbroad. The injunction is inappropriate
because it prohibits the public from using defendant’s copyshop for noninfringing
copying of plaintiffs’ works.
RYAN, Circuit Judge, dissenting.
It is clear from the application of the four fair use factors of 17 U.S.C. § 107 that
MDS’s copying of the publishers’ copyrighted works in this case is fair use and, thus, no
infringement of the publishers’ rights. Indeed, it is a use which is merely an aspect of the
professors’ and students’ classroom use, and, only in the narrowest and most technical
sense, a use of a separate genre under section 107. And, so, I must dissent from the
majority’s contrary view and, in expressing my understanding of the matter, I shall
identify three important subissues on which I think my colleagues’ analysis has led them
to mistakenly conclude that MDS’s activity is not a fair use of the publishers’ materials.
In my judgment, my colleagues have erred in
1. focusing on the loss of permission fees in evaluating “market effect” under
section 107(4);
2. finding that the evidence supports the conclusion that permission fees provide
an important incentive to authors to create new works or to publishers to publish new
works; and
3. using legislative history, specifically the “Classroom Guidelines,” to decide the
issue of classroom use.
I.
The professors select the materials to be copied and deliver them to MDS with an
estimate of the number of students expected in the course. The professors then assign the
material to students enrolled in a particular class and inform them that they may purchase
the required materials in coursepack form at MDS if they wish to do so. In the alternative,
guidance to the district court about curing the overbreadth of the injunction.

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students are free to make copies of the excerpted material at the library themselves, to
copy the material from other students, or to purchase the whole of the original work in
which the assigned text appears. These coursepacks are sold only to students for use in a
particular course; they are not sold to the general public. Any copies that are not purchased are simply discarded. The coursepacks are priced on a per-page basis, regardless
of the contents of the page. The fee for a page reproducing copyrighted materials is the
same as the fee for a blank page. The professors receive no commissions or other
economic benefit from delivering coursepack materials to MDS. Each of the requesting
professors signed a declaration stating that he does not request copies of excerpts where
he would otherwise have assigned the entire work to his students.
III.
A.
At the very outset, it is critical to understand, as I have earlier stated, that MDS’s
“use” of this copyrighted material is of the same essential character as “use” by a student
who chooses to personally make a photocopy of the designated excerpts. There are two
differences: 1) the student will further “use” the material in the classroom; and 2) MDS
does the copying for the student for a profit.
The question that must ultimately be answered is whether that which is a fair use
for a student—copying—is not a fair use if done for the student by another, and for a
profit. Plainly, the Copyright Act explicitly anticipates that use of a work by “reproduction in copies . . . for purposes such as . . . teaching (including multiple copies for
classroom use),” will sometimes be a fair use even though teaching is commonly
conducted for profit. 17 U.S.C. § 107. Thus, MDS’s copying of materials, which indisputably are for “teaching (including multiple copies for classroom use),” must be tested
for fair use under the four “factors to be considered” in section 107. Id.
The first factor that courts must evaluate in a fair use determination is “the purpose
and character of the use, including whether such use is of a commercial nature or is for
nonprofit educational purposes.” 17 U.S.C. § 107(1). There are two parts to section 107’s
first factor: (1) the degree to which the challenged use has transformed the original, and
(2) the profit or nonprofit character of the use. Both a non-transformative use determination and a “commercial” use determination weigh against a finding of fair use, though
by no means conclusively.
The “purpose and character of the use” is examined to determine whether the
questioned use would tend to advance or to thwart the goals of copyright law. The inquiry
into the transformative aspect of the use assesses the likely benefit to society from the
use—the more the original work has been transformed, the more likely it is that a distinct
and valuable new product has been created. The inquiry into the profit or nonprofit aspect
of the use assesses both the likely benefit to society and the likelihood that the use will
threaten the creators’ incentives.
The second prong of the first fair use factor asks whether the purpose of the use is
commercial or nonprofit and educational. The point here “is not whether the sole motive
of the use is monetary gain but whether the user stands to profit from exploitation of the
copyrighted material without paying the customary price.” In my judgment, a party profits from “exploiting copyrighted material” when it assesses the marketable potential of
copyrighted material, selects material based on its content in order to reproduce those
portions that will attract customers, and therefore profits from the substance of the
copyrighted work.

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As a preliminary matter, we must first decide whose use of the coursepacks must
be evaluated. The majority accepts the publishers’ position that the only relevant “use”
under the first factor is MDS’s sale of the coursepacks to students, not the use of the
purchased coursepacks by the professors and students. Having limited its inquiry to
MDS’s mechanical reproduction of the excerpts and for-profit charge for the technology
and labor required to reproduce the relevant pages, the majority easily finds that the
copyshop’s “use” of the copyrighted works is “commercial.” I do not find support for
this abbreviated analysis in either the statutory text or the case law.
Certainly nothing in the language of the statute supports the majority’s decision to
analyze the copyshop’s production of multiple copies of the excerpts as a “use”
completely independent from the classroom use of those copies. MDS, considered apart
from the professors and students, does not “use” the “copyrighted work” in the sense
primarily addressed in section 107; it uses a “master copy” of the excerpted material
delivered to it by the professor, copy paper, ink, photocopying machines, mechanical
binders, and related production materials to make the number of copies the professor has
ordered. MDS could not care less whether Professor X asks it to copy selections from
Walter Lippmann’s Public Opinion or the 1996 University of Michigan Varsity Football
roster. Either material is copied at a few cents a page, and MDS does not “use” the
information from either—at least, not in the sense plainly contemplated by Congress in
any of the language of section 107.
If the words used in section 107 are to be given their primary and generally
accepted meaning, particularly in the context of the balance of the Copyright Act, it is
obvious that the use that is to be evaluated for fairness in this case is the use to which the
protected substantive text is put, not the mechanical process of copying it. Congress
specifically identified “teaching (including multiple copies for classroom use),” § 107
(emphasis added), as an illustration of a possible fair use. Consequently, the act of
copying (implicit in “multiple copies”) is within the illustrative use of “teaching.” MDS
is not in the business of making copies of protected work in order to fill up warehouses
or please the logging industry; it makes the copies only for classroom use. Neither the
language of section 107 nor simple common sense warrant examining the production of
multiple copies in a vacuum and ignoring their educational use on the facts of this case.
I would approach the “commercial purpose” determination under section 107’s
first factor in a different way than the majority does. A use is “commercial” within the
meaning of section 107 if the user seeks to profit from “exploiting” the copyrighted
material. Profiting from exploiting copyrighted material requires more than profit
obtained from a mechanical service. Profiting from exploiting copyrighted material
involves an active role in assessing the value of, selecting, and marketing copied material
based on its substance. In Harper & Row, the defendant magazine assessed the value of
President Ford’s original work, selected the portions it believed to be the most
“powerful,” advertised, sold, and profited from the sale of the unauthorized copies, based
on their substance. Harper & Row would be of some relevance to the market value
component of this case only if MDS were selecting excerpts by assessing their commercial value to the public, assembling coursepacks for its own purposes, and marketing the
coursepacks to professors or to the public without paying for the copyrighted materials.
But that is not what MDS does or did. MDS’s profit is attributable entirely to its provision
of a mechanical service—running materials of value to others and selected by others
through its photocopying machines and binding them. Because MDS made no attempt to
assess the value of what it copied and did not select the materials for its copying services,

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it did not “exploit the copyrighted material without paying the customary price,” as that
was done in the Harper & Row case.
Certainly it is true that MDS “uses” the copyright work in the sense that it copies
the copyrighted material that is handed to it by the professors. But it does not “use” the
material independent of the university professors’ and students’ use; it is a participant in
their use and its profits are derived only from photoreproduction services the students
pay it to perform. The business of producing and selling coursepacks is more properly
viewed as the commercial exploitation of professional copying technologies and of the
inability of academic parties to reproduce printed materials efficiently, not the
exploitation of copyrighted, creative materials. The copyshop is a printer, engaging solely
in the business of reproducing images on paper at the direction of others. Because MDS
does not control the length or substance of the excerpts that it copies, its profit motive
does not provide information about the tendency of its activity to impinge upon the
rightful territory of authors and does not interfere with the incentives orchestrated by the
Copyright Act. The for-profit nature of MDS’s service does not weigh against a finding
of fair use because MDS, the for-profit actor, does not represent an institutional threat to
authors and publishers’ rightful profits.
The for-profit or nonprofit educational users whose purposes are linked to the
authors’ and publishers’ incentives and therefore must be analyzed under this factor are
the professors and students. The professors and students clearly do use Lippmann’s work.
The professors use Lippmann’s ideas in meeting their professional obligation to teach
their students, and the students use Lippmann’s ideas in their effort to master the concepts
of the course to which Lippmann’s ideas pertain. The professors and students’ classroom
use of the excerpts of copyrighted material appears to be nonprofit. Although the
professors and students are, in some sense, engaged in a for-profit endeavor—the
professors teach for money and the students attend classes to obtain a commercially
valuable degree—the purpose and character of the professors and students’ use is not, on
the facts of record in this case, “of a commercial nature.” If “commerciality” meant only
that the user employed the material while engaged in activity for profit, this one
characteristic “would swallow nearly all of the illustrative uses listed in the preamble
paragraph of § 107, including news reporting, comment, criticism, teaching, scholarship,
and research, since these activities ‘are generally conducted for profit in this country.’”
An assessment of the distinction between for-profit activity and exploitation is
critical because the Supreme Court has commanded that we examine “‘the nature and
objects of the selections made’” in view of “the examples given in the preamble to § 107”
and the purposes of copyright protection—that is, to promote science and the arts. Additionally, in determining whether MDS’s use is commercial, it is important to bear in mind
the practical effect of such a finding, not just in the analysis conducted under the first
factor but in the impact that a finding of “commercial” or “educational” has in the analysis
conducted under the fourth factor, which considers “the effect of the use upon the potential
market for or value of the copyrighted work. . . .” 17 U.S.C. § 107(4). A conclusion that a
use is “commercial” weighs against a finding of fair use and, in fact, creates a
“presumption” of market harm in the fourth fair use factor. I conclude that the use of
coursepacks in this case is not “commercial” within the meaning of section 107(1)’s
“purpose and character of the use” language alone, but I am even more convinced that it
is not “commercial” in view of section 107(4)’s “market harm” language: “the effect of
the use upon the potential market for or value of the copyrighted work. . . .” § 107(4).
The Supreme Court has explained the presumption of market harm as follows:

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The purpose of copyright is to create incentives for creative effort. Even
copying for noncommercial purposes may impair the copyright holder’s
ability to obtain the rewards that Congress intended him to have. But a
use that has no demonstrable effect upon the potential market for, or the
value of, the copyrighted work need not be prohibited in order to protect
the author’s incentive to create. The prohibition of such noncommercial
uses would merely inhibit access to ideas without any countervailing
benefit.[ ] Thus, although every commercial use of copyrighted material
is presumptively an unfair exploitation of the monopoly privilege that
belongs to the owner of the copyright, noncommercial uses are a different matter. A challenge to a noncommercial use of a copyrighted work
requires proof either that the particular use is harmful, or that if it should
become widespread, it would adversely affect the potential market for
the copyrighted work. (Sony)
To repeat, the content of the coursepacks was not controlled by MDS but by the
professors; and “the nature and objects of the selections made” by the professors were
plainly nonprofit and educational. The professors selected excerpts, not out of any motive
for financial gain, but solely in order to enrich the educational experiences of their
students. MDS made no selections; its motives for the activity that is challenged by the
plaintiffs are not relevant.
It is consistent with the copyright scheme to find the use of these coursepacks to
be noncommercial, to presume that they do not inflict market harm, and to require the
publishers to prove that MDS’s use is harmful to the value of the copyrighted works.
Presuming that MDS’s copying is not harmful to the value of the copyrighted works is
appropriate because the identity and content of the excerpts is controlled entirely by
persons whose motives are purely educational.
With regard to the professor-directed creation of coursepacks, it is not appropriate
to presume that the practice of excerpting some materials harms the authors’ rightful
market and secures a benefit only to the excerpters. The more reasonable presumption is
that society benefits from the additional circulation of ideas in the educational setting
when those who direct the practice have no personal financial interests that would drive
them to copy beyond the parameters of purely educational, and fair, use. The professors
have no financial reason to copy mere excerpts when the entire works should be assigned,
and their selections should not be presumed to harm the market for the original works and
lessen the incentives for authors to write or publishers to publish new works. Rather, such
harm must be demonstrated. Society benefits when professors provide diverse materials
that are not central to the course but that may enrich or broaden the base of knowledge of
the students. Society is not benefitted by establishing a presumption that discourages
professors from exposing their students to anything but complete original works even
when most of the work is irrelevant to the pedagogical purposes, and students are not
benefitted or authors/publishers justly compensated if students are required to purchase
entire works in order to read the 5% or 30% of the work that is relevant to the course.
And so, in my view, the majority’s market harm analysis is fatally flawed: If market
harm is presumed when excerpts are selected by professors and market harm is proven
when fees are not paid, we have ceded benefits entirely to copyright holders when we are
actually required to engage in “a sensitive balancing of interests,” Sony, between “the
interests of authors . . . in the control and exploitation of their writings . . . on the one hand,
and society’s competing interest in the free flow of ideas, information, and commerce on

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the other hand.” The majority apparently does not really accept the firmly established
principle that copyright monopoly privileges “are neither unlimited nor primarily designed
to provide a special private benefit[; rather, the privileges exist to achieve] an important
public purpose . . . to motivate the creative activity of authors [and] to give the public
appropriate access to their work product.” . . .
I have concluded that analysis under the first factor establishes the character of the
use of coursepacks as noncommercial, and that, therefore, a proper analysis under the
fourth factor begins with a rebuttable presumption that the plaintiffs have suffered no
market harm and thus have the burden of proof on market effect. But, even in the absence
of a presumption against market effect, the fourth factor, correctly construed, weighs in
favor of a finding of fair use on the record before us.
For plaintiffs to prevail, there must be at least a meaningful likelihood that future
harm to a potential market for the copyrighted works will occur. In Sony, the Court held:
A challenge to a noncommercial use of a copyrighted work requires proof
either that the particular use is harmful, or that if it should become widespread, it would adversely affect the potential market for the copyrighted
work. . . . What is necessary is a showing by a preponderance of the
evidence that some meaningful likelihood of future harm exists.
Sony. Works or uses that creators of original works would “in general develop or license
others to develop” make up the market for potential derivative uses. Campbell. The
plaintiffs certainly have not demonstrated that the coursepacks affected the market for
the original copyrighted works. Neither have they presented any evidence of likely harm
to their potential market for derivative works, such as published anthologies.
Remarkably, they have limited their showing of “market effect” to the loss of permission
fees that they would like to receive from copyshops like MDS. But that is not a “market
harm” within the meaning of section 107(4). To prove entitlement to permission fees, the
publishers must show market harm and the market harm they claim is the loss of
permission fees. MDS’s coursepacks would inflict “market harm” if they damaged the
value of the original work or the value of derivative products such as coursepacks the
publishers might wish to market.
The original panel opinion, now vacated, stated:
[E]vidence of lost permission fees does not bear on market effect. The
right to permission fees is precisely what is at issue here. It is circular to
argue that a use is unfair, and a fee therefore required, on the basis that
the publisher is otherwise deprived of a fee.
The majority now claims that this charge of circular reasoning “proves too much.” The
majority asks the reader to
[i]magine that the defendants set up a printing press and made exact
reproductions—asserting that such reproductions constituted “fair
use”—of a book to which they did not hold the copyright. Under the
defendants’ logic it would be circular for the copyright holder to argue
market harm because of lost copyright revenues, since this would
assume that the copyright holder had a right to such revenues.
The majority’s logic would always yield a conclusion that the market had been
harmed because any fees that a copyright holder could extract from a user if the use were
found to be unfair would be “lost” if the use were instead found to be “fair use.” The
majority acknowledges that “a copyright owner will normally be able to complain that an
asserted fair use may cause some loss of revenues in potential licensing fees” but resolves

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this problem by restricting its consideration of the loss of permission fees to the case of
derivative markets that are “‘traditional, reasonable, or likely to be developed markets.’”
Under this approach, the majority would find that the copyright holders’ monopoly over
potential uses of the copyrighted works at issue in Princeton includes “the selling of
permission to reproduce portions of the works for inclusion in coursepacks—and the
likelihood that publishers actually will license such reproduction is a demonstrated fact.”
The majority cites Harper & Row and Campbell as support for its reasoning that
the mere loss of licensing fees—to which the copyright holder may or may not be
entitled—is proof of market harm. The majority notes that in Harper & Row, the plaintiff
did not challenge a use (the unauthorized article’s direct quotes) based on its impact on
sales of the entire work (the not-yet-published memoirs) but based on its harm to the
market for the licensing of excerpts. There is a subtle but important distinction to be
made between the facts in Harper & Row and the facts in this case. In Harper & Row
there was proof that the copyright holder conceived of a potential derivative work (the
planned Time Magazine articles) and took meaningful steps to aid in the creation of that
derivative work and to capture profits from that creation. The value of the planned
derivative work was harmed by the defendants’ unauthorized use of the original work;
the copyright holder lost its contract with Time Magazine—and concomitant fees—for
the exclusive right to print prepublication excerpts of President Ford’s memoirs when
The Nation Magazine illicitly obtained a copy of the unpublished manuscript and
produced a short article quoting from the heart of the manuscript. Thus, in Harper &
Row, the value of the original work in a derivative market that was targeted by the
copyright holder was harmed by the unauthorized use of the work. There is no similar
evidence of injury to the value of a work in this case.
First, there is no evidence that the publishers, here, planned to create any products
for a derivative market; no evidence, for instance, that the copyright holders sought to
publish or license a competing compilation of excerpts to attract the interest, for instance,
of the students in Professor Dawson’s interdisciplinary course “Black Americans and the
Political System.” Second, even if there was evidence that the publishers had
contemplated such a product, there is no evidence that the publishers’ derivative
compilation would be devalued by defendant’s production of coursepacks; that is, there
is no evidence that such a compilation would earn less because of the existence of
coursepacks. In Campbell, for instance, the Court declined to find market harm based
solely on undisputed evidence that the unauthorized user created a profitable product—
rap-parody—from the original; the Court noted that the rap-parody version was not
shown to affect the market for an authorized, non-parodic rap version of the original. It
might at first appear that the publishers are, by definition, able to design and market a
collection of excerpts and that the existence of other, unauthorized, collections will
necessarily replace some of the authorized copies and thereby leach profits that the
publishers could otherwise capture. However, neither the facts on this record nor any
case law support such a leap in logic.
The fact is that the plaintiffs are not able to create a market for the product that
MDS produces. To the extent that MDS serves a market at all, it is one created by the
individual professors who have determined which excerpts from which writers they wish
to comprise the required reading for a particular course. If the publishers decided to create
an anthology of excerpts from its copyrighted works on, for example, “The Black
Experience,” it would not fill the market niche created by Professor X who is interested
in very different materials. Indeed, the publishers do not claim to have lost an account for

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customized materials with a specific professor because of a copyshop coursepack; nor do
they claim to be prepared to enter this highly-customized market. The argument that the
publishers seek to enter the derivative market of customized materials by licensing MDS
and other copyshops, who create such compilations, and that MDS’s publication of
unauthorized compilations interferes with their ability to obtain licensing fees from other
copyshops simply returns the publishers to their original circular argument that they are
entitled to permission fees, in part, because they are losing permission fees. . . .
The majority opinion stresses the fact that Congress “initiated and supervised
negotiations among interested groups—groups that included authors, publishers, and
educators—over specific legislative language [and that m]ost of the language that
emerged was enacted into law or was made a part of the committee reports.” However,
what were not “enacted into law,” but only made a part of the conference committee
reports, are the Classroom Guidelines upon which the majority so heavily relies to decide
how the language enacted into law applies. Indisputably, the Classroom Guidelines
assure educators that nonprofit copying for educational purposes of “not more than 1,000
words” is fair use when “[t]he inspiration and decision to use the work and the moment
of its use for maximum teaching effectiveness are so close in time that it would be
unreasonable to expect a timely reply to a request for permission.” The Classroom
Guidelines “prohibit[ ] . . . [c]opying . . . used to create . . . anthologies, compilations or
collective works.” But, as the majority opinion acknowledges, that language did not
survive congressional debate and was not enacted into law.
Despite the well-settled rule that legislative history is irrelevant and inappropriate
to consider except to clarify an ambiguity in the text of a statute, the majority relies upon
the legislative history without identifying any ambiguity in the statute, but only because
“[t]he statutory factors are not models of clarity, . . . the fair use issue has long been a
particularly troublesome one . . ., [and other] courts have often turned to the legislative
history when considering fair use questions.” I wish to emphasize in the strongest terms
that it is entirely inappropriate to rely on the Copyright Act’s legislative history at all.
As Justice Scalia has observed, “The greatest defect of legislative history is its
illegitimacy. We are governed by laws, not by the intentions of legislators.” The
Classroom Guidelines do not become more authoritative by their adoption into a
Committee Report. “[I]t is the statute, and not the Committee Report, which is the
authoritative expression of the law.” We may not permit the statutory text enacted by
both Houses of Congress and signed by the President “to be expanded or contracted by
the statements of individual legislators or committees during the course of the enactment
process.” That the Classroom Guidelines are not law should be reason enough for this
court to refrain from using them to find infringement, but this is not the only reason to
reject out of hand arguments based on legislative history. The members of Congress who
voted for the statutory language of section 107 could have had any variety of
understandings about the application of the fair use factors; all we know for certain is
that the full House, the full Senate, and the President, pursuant to the procedures
prescribed by the Constitution, enacted into law the text of section 107, and did not enact
the standards of the Classroom Guidelines. Committee Reports do not reliably further
consistent judicial construction. I subscribe wholeheartedly to Judge Harold Leventhal’s
observation that “the use of legislative history [is] the equivalent of entering a crowded
cocktail party and looking over the heads of the guests for one’s friends.” “We use
[Committee Reports] when it is convenient, and ignore them when it is not.” . . .
The case for copyright infringement is very weak indeed if the court must rely on the

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511

unenacted theater of Committee Reports to find infringement. The fact that Congress saw
fit, very likely in the interests of political expediency, to pay unusual deference to the
“agreement” of interested parties about what they would like the law to be, even to the point
of declaring (but not in the statute) that the parties’ agreement was part of the committee’s
“understanding” of fair use, does not affect the rule of construction that binds this court.
In sum, even if the four statutory factors of section 107 are not “models of clarity”
and their application to the facts of this case is “troublesome”—a challenge of the kind
federal appellate judges are paid to face every day—the four factors are not ambiguous.
Therefore, we may not properly resort to legislative history. I am satisfied to rely
exclusively upon the evidence and lack of evidence on the record before us and the plain
language of the Copyright Act and its construction in the case law; and they lead me to
conclude that MDS’s compilation into coursepacks of excerpts selected by professors is
a “fair use” of the copyrighted materials.
••••••••••
Notes
We include this case because the opinions offer a master-class in fair use. In
particular, they should teach you to avoid the sloppiness that lawyers often display in
referring vaguely to “the use” or “the market” without actually connecting those phrases
to either § 106 or § 107 and then explaining why their interpretation is correct. But we
also include so many of the opinions because they are a lovely case-study in all of the
dimensions of the fair use doctrine.
• What—or whose—is the relevant “use”? (And what are the criteria by which
I would know?)
• What is the relevant market? How should we think about the copyright
holder’s rights over potential licensing markets?
• How does one interpret the clause “including multiple copies for classroom
use”?
• How are the clauses of § 107 related to each other?
• Copyright is supposed “to promote the progress.” How does one imagine that
happening in the context of a case such as this?
Judges Nelson, Martin, Merritt and Ryan provide very different (and well-reasoned)
answers to each of these questions. They differ on jurisprudential method: plain
language, expanded context or purposive reading? They differ on the appropriateness of
turning beyond the statute to glean Congressional intent from CONFU. They differ on
the granularity of the rights copyright holders can claim over expanded licensing
markets—markets beyond the original work—and the circularity of attempting to do so.
They differ on the significance of coursepacks and monographs to education. Which of
their arguments convinced you?

P ROBLEM 13-4
You represent 15-501 Copies, a commercial copy shop, and the faculty of the Duke
Law School. (For this purpose, you may ignore any potential conflicts of interest
involved.) Both are being sued for copyright infringement by the Harvard Law

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Review. The law school faculty has a single institutional subscription to the Harvard
Law Review. When the most recent issue arrives, it is sent to 15-501, where the table
of contents for each issue is copied and circulated to the faculty. Faculty members
mark off on the table of contents any article they are interested in seeing. 15-501
receives these orders and then sends the individually labeled photocopies to the Duke
Law School mail room, from whence they are distributed directly to the professors’
offices. The Duke faculty has a large appetite for law review articles and this
convenient procedure merely whets it; while no-one asks for copies of the entire
review, individual articles will often be copied for twenty or thirty professors.
Typically, professors pile these photocopies up in large, unstable piles in their offices.
Eventually, they go through a batch, discarding most, annotating some and writing
indignant rebuttals to others, rebuttals that may be published themselves, thus
completing the cycle.
Like most law journals, the Harvard Law Review is believed by its critics to
have all of the central features of a vanity press—that is to say, a press that does not
pay its authors, takes their copyrights, makes editorial changes to the work submitted
(in this case, adding useful footnotes that substantiate disputed points, such as the
correlation of poverty with the absence of wealth), and finally charges the authors for
copies of their own work—known as “reprints”—which the authors then give away
for free, apparently believing that they will be read. The Law Review claims copyright
over both the individual articles and to each issue as a whole. Despite the fact that its
editorial labor and authorial content are effectively “free,” Harvard Law Review
currently runs at a loss, like most law reviews, and is partially subsidized by its host
institution, a university near Boston. It makes some money by charging very high fees
for institutional subscriptions and much lower, but still expensive, fees for individual
subscriptions. It also makes a fairly substantial amount of money from “permission
fees” paid by those who wish to include an article or a fragment of an article in a
casebook or reader. Finally, it receives a considerable amount of money annually from
Eastlaw, an online research service, for providing Eastlaw with a complete, fully
searchable database of its articles.
The Duke faculty have free subscriptions to Eastlaw and could, if they wished,
print any article directly from the database—though without the law review’s
attractive textual features, such as footnotes at the bottom of the page. Harvard Law
Review does not currently have any service to license individual copies of individual
articles though such a scheme might be technically possible—perhaps by direct
download of a facsimile version from the Web. The editor in chief claims that she may
“look into it,” depending on the outcome of this litigation.
The proprietor of 15-501 is very upset; he had assumed that “anything done by a
bunch of lawyers to their own books must be legal.” He asks you if he will be liable
for copyright infringement. The Duke faculty is also upset and have turned to you
for legal advice; they claim that this kind of copying happens all the time behind
the veil of ignorance, that it is protected by the First, Second and perhaps the
Ninth Amendments, that the Warren Court, the Pre-Socratic philosophers and
the Jacksonian Democrats would never have objected, that it is a Pareto superior
allocation of entitlements and, in the alternative, (and you may concentrate your
analysis here) that it is a fair use under section 107 of the Copyright Act. You may
presume that you are in a Circuit that is not bound by the decision in Princeton

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but is carefully attentive to all the arguments made there.
In your answer try hard to use the traditional common law skills of
marshalling and distinguishing cases. On what aspects of this question would you
focus to make this case seem less defensible than the copying in Princeton? More
defensible? Be very clear about the following questions.
a.) What is the relevant “use” for the analysis? Explain what both the
plaintiff and the defendant would say and the reasons why they would claim that
their definition of use is the correct one.
b.) What is the relevant work?
c.) The relevant market for the work? Is it static or dynamic? Can a
copyright holder claim all markets he might one day enter as relevant to the
calculation? If not, how is the ambit of possible future markets to be limited?
Finally, hypotheticals (such as exam questions) often tweak the facts of an
existing case to present a conflict more clearly or to come closer to some dividing
line. Which of the “tweaks” to the facts in Princeton in this hypothetical is most
favorable to the plaintiff? The defendant?

Conclusion
You are now experts in fair use—or at least considerably more expert than you were
when you began the chapter. Fair use is a heated topic around the world. The United States
is unusual in having such a flexible and open-ended limitation on copyright. A number of
jurisdictions, including the UK, Ireland and Australia, have considered whether they
should introduce some version of fair use into their copyright laws, as part of attempts to
‘revamp copyright for the digital age.’ The concerns addressed are often technological;
the founders of Google are reported to have told the British Prime Minister that they could
not have created the company without the protection of fair use. But they are also speechrelated, and sometimes this involves speech that is enabled by a particular technology,
such as an unauthorized YouTube remix. We would like you to answer some of those
questions for yourself.
• What do you think of the current state of the law of fair use?
• Is its open ended, flexible and adaptable framework a strength or a weakness?
• Does it provide adequate protection to copyright holders?
• Adequate guidance to potential fair users?
• Adequate space for technological innovation? Focus here on the line from
Sony through Sega to Perfect 10, Google Books and Oracle.
We will begin the next chapter with a case-study that raises many of these issues,
and that links back to the place we began this chapter: Sony and its connection of fair use
to contributory infringement. Finally, for those of you needing a light hearted review of
the fair use doctrine, you can try the free online comic book, Bound By Law.‡

Keith Aoki, James Boyle, Jennifer Jenkins, Tales from the Public Domain: Bound By Law?
https://law.duke.edu/cspd/comics/zoomcomic.html.

‡

CHAPTER FOURTEEN

Secondary Liability for Copyright
Infringement & Safe Harbors in
the Digital Age

Introduction
Generally, in the common law, “secondary liability” is imposed on someone who
does not commit the legal wrong directly, but is found responsible for encouraging,
facilitating or profiting from it. As you will see, the Copyright Act has no provisions
imposing secondary liability. (Compare to e.g. § 271 of the Patent Act.) As a result, the
secondary liability provisions of copyright law are entirely judge-developed, without
even an open-ended statutory basis like that given to fair use jurisprudence under § 107.
Until recently, there were two principal forms of secondary liability: contributory
infringement and vicarious liability. (It should be noted here that the Sony v. Universal
case does not clearly delineate whether and when it is talking about contributory infringement, vicarious liability or both.)
• Contributory infringement may be found if someone, with knowledge of the
infringing activity, induces, causes or materially contributes to the infringing
conduct of another.
• Vicarious liability—an outgrowth of respondeat superior—may be imposed
on someone who has the right and ability to supervise the infringing activity
and also has a direct financial interest in the activity.
In both cases, there needs to be underlying direct infringement. In other words, someone
needs directly to violate the exclusive rights provided by § 106, before contributory or
vicarious liability can be imposed on any third party.

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

464 U.S. 417 (1984)

Re-read sections I, II and III of the Sony opinion from Chapter 13, page 415.
P ROBLEM 14-1
T HE N APSTER C ASE .
This problem is designed to be used as either a free-standing hypothetical or as part
of a video argument exercise. In the latter incarnation, a video we have edited,
showing the Napster oral argument in the Ninth Circuit, is played in class. The video
is available at http://youtu.be/5ftJ1pFLGQk. Students are placed in role as the lawyers
in the case. The video is repeatedly paused throughout its length and the class as a
whole is required to brainstorm about how to open their arguments, respond to

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particular judges’ questions and so on. Then the video is allowed to run and the class
can compare its answers to those of the lawyers and the court—for good or ill.
Using the material we have read so far, particularly focusing on the Sony case,
and the explanation of contributory and vicarious infringement above, please read the
facts below and explain how you would argue that Napster is, or is not, infringing
copyright law. For the purposes of this exercise, students do not need to read the
Napster opinion. Indeed the exercise works much better (and is more enjoyable for all
concerned) when they do not do so.
[Excerpted statement of the facts] Napster facilitates the transmission of MP3
files between and among its users. Through a process commonly called “peerto-peer” file sharing, Napster allows its users to: (1) make MP3 music files
stored on individual computer hard drives available for copying by other
Napster users; (2) search for MP3 music files stored on other users’
computers; and (3) transfer exact copies of the contents of other users’ MP3
files from one computer to another via the Internet. These functions are made
possible by Napster’s MusicShare software, available free of charge from
Napster’s Internet site, and Napster’s network servers and server-side
software. Napster provides technical support for the indexing and searching
of MP3 files, as well as for its other functions, including a “chat room,” where
users can meet to discuss music, and a directory where participating artists
can provide information about their music.
A. Accessing the System: In order to copy MP3 files through the Napster
system, a user must first access Napster’s Internet site and download the
MusicShare software to his individual computer. Once the software is
installed, the user can access the Napster system. A first-time user is required
to register with the Napster system by creating a “user name” and password.
B. Listing Available Files: If a registered user wants to list available files
stored in his computer’s hard drive on Napster for others to access, he must
first create a “user library” directory on his computer’s hard drive. The user
then saves his MP3 files in the library directory, using self-designated file
names. He next must log into the Napster system using his user name and
password. His MusicShare software then searches his user library and verifies
that the available files are properly formatted. If in the correct MP3 format,
the names of the MP3 files will be uploaded from the user’s computer to the
Napster servers. The content of the MP3 files remains stored in the user’s
computer. . . . Once uploaded to the Napster servers, the user’s MP3 file
names are stored in a server-side “library” under the user’s name and become
part of a “collective directory” of files available for transfer during the time
the user is logged onto the Napster system. The collective directory is fluid;
it tracks users who are connected in real time, displaying only file names that
are immediately accessible.
C. Searching for Available Files: Napster allows a user to locate other users’
MP3 files in two ways: through Napster’s search function and through its
“hotlist” function.
Software located on the Napster servers maintains a “search index” of
Napster’s collective directory. To search the files available from Napster users

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currently connected to the network servers, the individual user accesses a form
in the MusicShare software stored in his computer and enters either the name
of a song or an artist as the object of the search. The form is then transmitted
to a Napster server and automatically compared to the MP3 file names listed
in the server’s search index. Napster’s server compiles a list of all MP3 file
names pulled from the search index which include the same search terms
entered on the search form and transmits the list to the searching user. The
Napster server does not search the contents of any MP3 file; rather, the search
is limited to “a text search of the file names indexed in a particular cluster. . . .
D. Transferring Copies of an MP3 file: To transfer a copy of the contents of
a requested MP3 file, the Napster server software obtains the Internet address
of the requesting user and the Internet address of the “host user” (the user with
the available files). See generally Brookfield Communications, Inc. v. West
Coast Entm’t Corp. (9th Cir. 1999) (describing, in detail, the structure of the
Internet). The Napster servers then communicate the host user’s Internet
address to the requesting user. The requesting user’s computer uses this
information to establish a connection with the host user and downloads a copy
of the contents of the MP3 file from one computer to the other over the
Internet, “peer-to-peer.”
[T]he district court concluded that Napster harms the market in “at
least” two ways: it reduces audio CD sales among college students and it
‘raises barriers to plaintiffs’ entry into the market for the digital downloading
of music. . . .”†
What would you need to prove in order to find liability? What would be the
defenses? How would you frame your argument? What would be your opening 60
seconds if you were the lawyer arguing either for the plaintiff or the defendant?
[These are the crucial moments when you have a chance to frame the issue before
the judges interrupt. If you are lucky.] Which, if any, of the frames discussed in
Chapter 1 could each side use? On what precedents would you rely? What policy
arguments would you stress? What “escape hatches” would you offer to a court
contemplating the possibility that Napster might not be liable? What vision of doom
would you conjure up were the court not to find Napster liable?

1.) The Stakes of Contributory Infringement
As Tiffany v. eBay showed in the trademark context, contributory infringement assumes particular importance in the world of the internet. Or perhaps, more broadly, in the
world of devices and networks which give powers to individuals that were formerly held—
to any significant extent—exclusively by large commercial intermediaries. The internet
allows any individual to set up a global storefront. Your laptop or tablet or phone can
implicate many of the rights in § 106 of the Copyright Act—a dramatic technologically
enabled change to the legal significance of your actions. You can copy, distribute, and
modify existing works—indeed on a daily basis, you would be hard put not to. At the same
time, these devices and networks also allow an unprecedented flowering of creativity,
innovation and disruptive business models. From Amazon and eBay to blogs, Wikipedia,
†

A & M Records v. Napster (9th Cir. 2001).

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open source software and the world of social media, the devices and networks of the digital
era demonstrate a broad decentralization of creative tools and a “disintermediation” of
previous business models and forms of social organization. (“Disintermediation” is an ugly,
but useful, word meaning that it is possible to cut out the middle man—to go directly from
musician or artist or technologist to the public or to the market.)
In this world, secondary liability will be crucial. For rights-holders, secondary
liability will hold out the promise of being able to restrain the actions of swarms of
anonymous infringers. If you can shut down the platform, the network or the technology—
or bring it under your control financially or technologically—then you can strike at the root
of infringement, rather than having to deal with a million individual instances. (Compare
the arguments made by the trademark owner in a case such as Tiffany to the arguments
made by copyright holders in the situation of a peer-to-peer network such as Napster.)
For technologists, many of whom will also be rights holders, the stakes are equally
high. It is easy convincingly to portray any digital product or service in such a way as a.)
to highlight its potential for massive infringement, b.) to point out that the developers of
the technology or service “must have known of” this potential for infringement and c.)
to show that the developers of the technology are profiting from demand that is in part
fuelled by the potential for infringing uses. What would the demand be for an iPod that
could only be filled with legally purchased music (for example by requiring DRM
authentication that the music had been licitly purchased)? Do you think that Dropbox (or
any cyberlocker) is popular among some users because it can be used to illicitly share
copyrighted material? YouTube?
As you read the cases that follow try to be attentive both to the concerns of
copyright holders and those of the technology developers. From the point of view of the
copyright holder, consider the sheer scale and magnitude of the infringement. Surely this
demands immediate and extensive intervention—particularly given the fact that the
technology developers know that their products will be used to infringe and actually
profit from it? From the perspective of the technology developer, do not assess the effect
of the rules on technologies ex post—whether you think you could persuade a Federal
District Court judge today that her existing iPod is illegal. Rather, consider the rule ex
ante. Imagine yourself the lawyer in charge of vetting product development at a
technology company before these products have been brought to market, widely used
and accepted. The engineer comes and lays out the product or the service. “This will put
20,000 songs in your pocket!” “This search engine will allow users to search for and go
directly to any content anywhere on the internet!” “This cyberlocker will allow anyone
to exchange files of any size with anyone else in the world!”
Can you come up with a rule that protects the copyright holders without causing
you—as a properly cautious lawyer vetting product development—to forbid ex ante the
development of the iPod, Google, Dropbox and YouTube in the forms that we currently
know? Or do you think that the correct answer would have been to impose secondary
liability and veto all the technologies that could not internalize the costs of infringement?
This chapter is about the attempt to answer these questions.

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2.) Contributory and Vicarious Infringement

A & M Records, Inc. v. Napster, Inc.
239 F.3d 1004 (9th Cir. 2001)

BEEZER, Circuit Judge.
[In order to hold Napster liable for contributory or vicarious infringement, it is necessary
for a court to find that there has been underlying direct infringement by Napster users.]
. . . Plaintiffs claim Napster users are engaged in the wholesale reproduction and
distribution of copyrighted works, all constituting direct infringement. The district court
agreed. . . .
A. Infringement
. . . [P]laintiffs have shown that Napster
users infringe at least two of the copyright
holders’ exclusive rights: the rights of reproduction, § 106(1); and distribution, § 106(3).
Napster users who upload file names to the
search index for others to copy violate
plaintiffs’ distribution rights. Napster users
who download files containing copyrighted
music violate plaintiffs’ reproduction rights.
Napster asserts an affirmative defense to
the charge that its users directly infringe
plaintiffs’ copyrighted musical compositions
Screenshot of the Napster system interface
and sound recordings.
B. Fair Use
Napster contends that its users do not directly infringe plaintiffs’ copyrights because
the users are engaged in fair use of the material. Napster identifies three specific alleged
fair uses: sampling, where users make temporary copies of a work before purchasing;
space-shifting, where users access a sound recording through the Napster system that they
already own in audio CD format; and permissive distribution of recordings by both new
and established artists. . . . The district court concluded that Napster users are not fair
users. We agree. We first address the court’s overall fair use analysis.
1. Purpose and Character of the Use
This factor focuses on whether the new work merely replaces the object of the
original creation or instead adds a further purpose or different character. In other words,
this factor asks “whether and to what extent the new work is ‘transformative.’” See
Campbell v. Acuff-Rose Music, Inc. (1994).
The district court first concluded that downloading MP3 files does not transform
the copyrighted work. This conclusion is supportable. Courts have been reluctant to find
fair use when an original work is merely retransmitted in a different medium.
This “purpose and character” element also requires the district court to determine
whether the allegedly infringing use is commercial or noncommercial. A commercial use
weighs against a finding of fair use but is not conclusive on the issue. The district court determined that Napster users engage in commercial use of the copyrighted materials largely

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because (1) “a host user sending a file cannot be said to engage in a personal use when distributing that file to an anonymous requester” and (2) “Napster users get for free something
they would ordinarily have to buy.” The district court’s findings are not clearly erroneous.
Direct economic benefit is not required to demonstrate a commercial use. Rather,
repeated and exploitative copying of copyrighted works, even if the copies are not offered
for sale, may constitute a commercial use. In the record before us, commercial use is
demonstrated by a showing that repeated and exploitative unauthorized copies of
copyrighted works were made to save the expense of purchasing authorized copies. . . .
2. The Nature of the Use
Works that are creative in nature are “closer to the core of intended copyright
protection” than are more fact-based works. The district court determined that plaintiffs’
“copyrighted musical compositions and sound recordings are creative in nature . . . which
cuts against a finding of fair use under the second factor.” We find no error in the district
court’s conclusion.
3. The Portion Used
“While ‘wholesale copying does not preclude fair use per se,’ copying an entire work
‘militates against a finding of fair use.’” The district court determined that Napster users
engage in “wholesale copying” of copyrighted work because file transfer necessarily
“involves copying the entirety of the copyrighted work.” We agree. We note, however, that
under certain circumstances, a court will conclude that a use is fair even when the protected
work is copied in its entirety. See, e.g., Sony Corp. v. Universal City Studios, Inc.
4. Effect of Use on Market
“Fair use, when properly applied, is limited to copying by others which does not
materially impair the marketability of the work which is copied.” Harper & Row Publishers, Inc. v. Nation Enters. (1985). “[T]he importance of this [fourth] factor will vary,
not only with the amount of harm, but also with the relative strength of the showing on
the other factors.” Campbell. The proof required to demonstrate present or future market
harm varies with the purpose and character of the use:
A challenge to a noncommercial use of a copyrighted work requires
proof either that the particular use is harmful, or that if it should become
widespread, it would adversely affect the potential market for the
copyrighted work. . . . If the intended use is for commercial gain, that
likelihood [of market harm] may be presumed. But if it is for a noncommercial purpose, the likelihood must be demonstrated. Sony.
Addressing this factor, the district court concluded that Napster harms the market
in “at least” two ways: it reduces audio CD sales among college students and it “raises
barriers to plaintiffs’ entry into the market for the digital downloading of music.” . . .
Defendant has failed to show any basis for disturbing the district court’s findings. . . .
Judge Patel did not abuse her discretion in reaching the above fair use conclusions,
nor were the findings of fact with respect to fair use considerations clearly erroneous. We
next address Napster’s identified uses of sampling and space-shifting.
5. Identified Uses
Napster maintains that its identified uses of sampling and space-shifting were
wrongly excluded as fair uses by the district court. . . . We find no error in the district
court’s factual findings or abuse of discretion in the court’s conclusion that plaintiffs will
likely prevail in establishing that sampling does not constitute a fair use.
b. Space-Shifting
Napster also maintains that space-shifting is a fair use. Space-shifting occurs when
a Napster user downloads MP3 music files in order to listen to music he already owns on

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audio CD. Napster asserts that we have already held that space-shifting of musical compositions and sound recordings is a fair use. See Recording Indus. Ass’n of Am. v. Diamond
Multimedia Sys., Inc. (9th Cir. 1999) (“Rio [a portable MP3 player] merely makes copies
in order to render portable, or ‘space-shift,’ those files that already reside on a user’s hard
drive. . . . Such copying is a paradigmatic noncommercial personal use.”). See also
generally Sony (holding that “time-shifting,” where a video tape recorder owner records
a television show for later viewing, is a fair use).
We conclude that the district court did not err when it refused to apply the
“shifting” analyses of Sony and Diamond. Both Diamond and Sony are inapposite
because the methods of shifting in these cases did not also simultaneously involve
distribution of the copyrighted material to the general public; the time or space-shifting
of copyrighted material exposed the material only to the original user. In Diamond, for
example, the copyrighted music was transferred from the user’s computer hard drive to
the user’s portable MP3 player. So too Sony, where “the majority of VCR purchasers . . .
did not distribute taped television broadcasts, but merely enjoyed them at home.”
Conversely, it is obvious that once a user lists a copy of music he already owns on the
Napster system in order to access the music from another location, the song becomes
“available to millions of other individuals,” not just the original CD owner.
c. Other Uses
Permissive reproduction by either independent or established artists is the final fair
use claim made by Napster. The district court noted that plaintiffs did not seek to enjoin
this and any other noninfringing use of the Napster system, including: chat rooms, message
boards and Napster’s New Artist Program. Plaintiffs do not challenge these uses on appeal.
We find no error in the district court’s determination that plaintiffs will likely
succeed in establishing that Napster users do not have a fair use defense. Accordingly,
we next address whether Napster is secondarily liable for the direct infringement under
two doctrines of copyright law: contributory copyright infringement and vicarious
copyright infringement.
IV
We first address plaintiffs’ claim that Napster is liable for contributory copyright
infringement. Traditionally, “one who, with knowledge of the infringing activity,
induces, causes or materially contributes to the infringing conduct of another, may be
held liable as a ‘contributory’ infringer.” Gershwin Publ’g Corp. v. Columbia Artists
Mgmt., Inc. (2d Cir. 1971).
The district court determined that plaintiffs in all likelihood would establish
Napster’s liability as a contributory infringer. The district court did not err; Napster, by
its conduct, knowingly encourages and assists the infringement of plaintiffs’ copyrights.
A. Knowledge
Contributory liability requires that the secondary infringer “know or have reason
to know” of direct infringement. The district court found that Napster had both actual
and constructive knowledge that its users exchanged copyrighted music. The district
court also concluded that the law does not require knowledge of “specific acts of infringement” and rejected Napster’s contention that because the company cannot distinguish infringing from noninfringing files, it does not “know” of the direct infringement.
It is apparent from the record that Napster has knowledge, both actual and
constructive, of direct infringement. Napster claims that it is nevertheless protected from
contributory liability by the teaching of Sony Corp. v. Universal City Studios, Inc. (1984).

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We disagree. We observe that Napster’s actual, specific knowledge of direct infringement
renders Sony’s holding of limited assistance to Napster. We are compelled to make a clear
distinction between the architecture of the Napster system and Napster’s conduct in
relation to the operational capacity of the system.
The Sony Court refused to hold the manufacturer and retailers of video tape
recorders liable for contributory infringement despite evidence that such machines could
be and were used to infringe plaintiffs’ copyrighted television shows. Sony stated that if
liability “is to be imposed on petitioners in this case, it must rest on the fact that they
have sold equipment with constructive knowledge of the fact that their customers may
use that equipment to make unauthorized copies of copyrighted material.” The Sony
Court declined to impute the requisite level of knowledge where the defendants made
and sold equipment capable of both infringing and “substantial noninfringing uses.”
We are bound to follow Sony, and will not impute the requisite level of knowledge
to Napster merely because peer-to-peer file sharing technology may be used to infringe
plaintiffs’ copyrights. See [Sony] (rejecting argument that merely supplying the “‘means’
to accomplish an infringing activity” leads to imposition of liability). We depart from the
reasoning of the district court that Napster failed to demonstrate that its system is capable
of commercially significant noninfringing uses. The district court improperly confined the
use analysis to current uses, ignoring the system’s capabilities. See generally Sony (framing
inquiry as whether the video tape recorder is “capable of commercially significant
noninfringing uses”). Consequently, the district court placed undue weight on the
proportion of current infringing use as compared to current and future noninfringing use.
Nonetheless, whether we might arrive at a different result is not the issue here. The instant
appeal occurs at an early point in the proceedings and “the fully developed factual record
may be materially different from that initially before the district court. . . .” Regardless of
the number of Napster’s infringing versus noninfringing uses, the evidentiary record here
supported the district court’s finding that plaintiffs would likely prevail in establishing that
Napster knew or had reason to know of its users’ infringement of plaintiffs’ copyrights. . . .
We agree that if a computer system operator learns of specific infringing material
available on his system and fails to purge such material from the system, the operator
knows of and contributes to direct infringement. Conversely, absent any specific
information which identifies infringing activity, a computer system operator cannot be
liable for contributory infringement merely because the structure of the system allows
for the exchange of copyrighted material. To enjoin simply because a computer network
allows for infringing use would, in our opinion, violate Sony and potentially restrict
activity unrelated to infringing use.
We nevertheless conclude that sufficient knowledge exists to impose contributory
liability when linked to demonstrated infringing use of the Napster system. The record
supports the district court’s finding that Napster has actual knowledge that specific
infringing material is available using its system, that it could block access to the system
by suppliers of the infringing material, and that it failed to remove the material.
B. Material Contribution
Under the facts as found by the district court, Napster materially contributes to the
infringing activity. Relying on Fonovisa, Inc. v. Cherry Auction, Inc. (9th Cir. 1996), the
district court concluded that “[w]ithout the support services defendant provides, Napster
users could not find and download the music they want with the ease of which defendant
boasts.” We agree that Napster provides “the site and facilities” for direct infringement.
The district court correctly applied the reasoning in Fonovisa, and properly found that

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Napster materially contributes to direct infringement.
We affirm the district court’s conclusion that plaintiffs have demonstrated a
likelihood of success on the merits of the contributory copyright infringement claim. We
will address the scope of the injunction in part VIII of this opinion.
V
We turn to the question whether Napster engages in vicarious copyright infringement. Vicarious copyright liability is an “outgrowth” of respondeat superior. Fonovisa. In
the context of copyright law, vicarious liability extends beyond an employer/employee
relationship to cases in which a defendant “has the right and ability to supervise the
infringing activity and also has a direct financial interest in such activities.”
Before moving into this discussion, we note that Sony’s “staple article of
commerce” analysis has no application to Napster’s potential liability for vicarious
copyright infringement. See generally 3 NIMMER ON COPYRIGHT §§ 12.04[A][2] &
[A][2][b] (2000) (confining Sony to contributory infringement analysis: “Contributory
infringement itself is of two types—personal conduct that forms part of or furthers the
infringement and contribution of machinery or goods that provide the means to
infringe.”) The issues of Sony’s liability under the “doctrines of ‘direct infringement’
and ‘vicarious liability’” were not before the Supreme Court, although the Court
recognized that the “lines between direct infringement, contributory infringement, and
vicarious liability are not clearly drawn.” Consequently, when the Sony Court used the
term “vicarious liability,” it did so broadly and outside of a technical analysis of the
doctrine of vicarious copyright infringement. (“[V]icarious liability is imposed in
virtually all areas of the law, and the concept of contributory infringement is merely a
species of the broader problem of identifying the circumstances in which it is just to
hold one individual accountable for the actions of another.”)
A. Financial Benefit
The district court determined that plaintiffs had demonstrated they would likely
succeed in establishing that Napster has a direct financial interest in the infringing activity.
We agree. Financial benefit exists where the availability of infringing material “acts as a
‘draw’ for customers.” Fonovisa. Ample evidence supports the district court’s finding that
Napster’s future revenue is directly dependent upon “increases in userbase.” More users
register with the Napster system as the “quality and quantity of available music increases.”
We conclude that the district court did not err in determining that Napster financially
benefits from the availability of protected works on its system.
B. Supervision
The district court determined that Napster has the right and ability to supervise its
users’ conduct. We agree in part.
The ability to block infringers’ access to a particular environment for any reason
whatsoever is evidence of the right and ability to supervise. Here, plaintiffs have
demonstrated that Napster retains the right to control access to its system. Napster has an
express reservation of rights policy, stating on its website that it expressly reserves the
“right to refuse service and terminate accounts in [its] discretion, including, but not
limited to, if Napster believes that user conduct violates applicable law . . . or for any
reason in Napster’s sole discretion, with or without cause.”
To escape imposition of vicarious liability, the reserved right to police must be
exercised to its fullest extent. Turning a blind eye to detectable acts of infringement for

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the sake of profit gives rise to liability.
The district court correctly determined that Napster had the right and ability to
police its system and failed to exercise that right to prevent the exchange of copyrighted
material. The district court, however, failed to recognize that the boundaries of the
premises that Napster “controls and patrols” are limited. Put differently, Napster’s
reserved “right and ability” to police is cabined by the system’s current architecture. As
shown by the record, the Napster system does not “read” the content of indexed files,
other than to check that they are in the proper MP3 format.
Napster, however, has the ability to locate infringing material listed on its search
indices, and the right to terminate users’ access to the system. The file name indices,
therefore, are within the “premises” that Napster has the ability to police. We recognize
that the files are user-named and may not match copyrighted material exactly (for
example, the artist or song could be spelled wrong). For Napster to function effectively,
however, file names must reasonably or roughly correspond to the material contained in
the files, otherwise no user could ever locate any desired music. As a practical matter,
Napster, its users and the record company plaintiffs have equal access to infringing
material by employing Napster’s “search function.”
Our review of the record requires us to accept the district court’s conclusion that
plaintiffs have demonstrated a likelihood of success on the merits of the vicarious
copyright infringement claim. Napster’s failure to police the system’s “premises,”
combined with a showing that Napster financially benefits from the continuing
availability of infringing files on its system, leads to the imposition of vicarious liability.
We address the scope of the injunction in part VIII of this opinion. . . .
VIII
The district court correctly recognized that a preliminary injunction against
Napster’s participation in copyright infringement is not only warranted but required. We
believe, however, that the scope of the injunction needs modification in light of our
opinion. Specifically, we reiterate that contributory liability may potentially be imposed
only to the extent that Napster: (1) receives reasonable knowledge of specific infringing
files with copyrighted musical compositions and sound recordings; (2) knows or should
know that such files are available on the Napster system; and (3) fails to act to prevent
viral distribution of the works. The mere existence of the Napster system, absent actual
notice and Napster’s demonstrated failure to remove the offending material, is insufficient
to impose contributory liability.
Conversely, Napster may be vicariously liable when it fails to affirmatively use its
ability to patrol its system and preclude access to potentially infringing files listed in its
search index. Napster has both the ability to use its search function to identify infringing
musical recordings and the right to bar participation of users who engage in the
transmission of infringing files.
The preliminary injunction which we stayed is overbroad because it places on
Napster the entire burden of ensuring that no “copying, downloading, uploading,
transmitting, or distributing” of plaintiffs’ works occur on the system. As stated, we place
the burden on plaintiffs to provide notice to Napster of copyrighted works and files
containing such works available on the Napster system before Napster has the duty to
disable access to the offending content. Napster, however, also bears the burden of
policing the system within the limits of the system. Here, we recognize that this is not an
exact science in that the files are user named. In crafting the injunction on remand, the

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district court should recognize that Napster’s system does not currently appear to allow
Napster access to users’ MP3 files.
Based on our decision to remand, Napster’s additional arguments on appeal going
to the scope of the injunction need not be addressed. We, however, briefly address
Napster’s First Amendment argument so that it is not reasserted on remand. Napster
contends that the present injunction violates the First Amendment because it is broader
than necessary. The company asserts two distinct free speech rights: (1) its right to publish a “directory” (here, the search index) and (2) its users’ right to exchange information.
We note that First Amendment concerns in copyright are allayed by the presence of the
fair use doctrine. There was a preliminary determination here that Napster users are not
fair users. Uses of copyrighted material that are not fair uses are rightfully enjoined. . . .
Questions:
1.) You had a chance to do Problem 14-1 and perhaps to see the video of the argument.
How closely did the court decision mirror either your proposed framing of the issues or
the way you thought the decision was going to come out? To what extent did the court
attempt to respond to some of those proposed framings?
2.) “Get[ting] for free something they would ordinarily have to buy. . . .” The court finds
that “commercial use is demonstrated by a showing that repeated and exploitative
unauthorized copies of copyrighted works were made to save the expense of purchasing
authorized copies.” Do you agree with this definition of “commercial use”? Harper &
Row offered a similar definition. Why does the court adopt it here? In Harper, after all,
one commercial publisher was portrayed as scooping another commercial publisher. Here
we have legions of private individuals “sharing” files for free. What is it about the
disaggregated mass of millions of individuals that causes the court to label their
collective, albeit uncompensated, efforts “commercial”?
3.) What would happen if the court held that this was not commercial? What would the
record companies have to prove?
4.) Is the court correct in its characterization of the Sony opinion? Was Sony only a case
about what knowledge could be attributed to the defendants, merely because of the
capabilities of their technology, in the absence of more concrete information?
5.) Napster suggests that “Sony’s ‘staple article of commerce’ analysis has no application to Napster’s potential liability for vicarious copyright infringement.” Do you agree?
Did the Sony court confine itself to contributory infringement, when it said that liability
could not be imposed if the product was capable of substantial non-infringing uses?
Which answer makes sense from the point of view of copyright policy?
6.) What burdens does the court impose on Napster to filter, block and monitor content
on its system?
7.) Section 2, above, discusses the “stakes” of secondary liability. Does the line the court
draws here manage to thread the needle between the concerns of the copyright holders
and the technologists? Why? Why not?

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3.) Inducement Liability
We said at the beginning of this chapter that contributory infringement and vicarious liability were, until recently, the only two forms of secondary liability for copyright
infringement. But then came MGM v. Grokster.

MGM Studios Inc. v. Grokster, Ltd.

545 U.S. 913 (2005)

Justice SOUTER delivered the opinion of the Court.
The question is under what circumstances the distributor of a product capable of
both lawful and unlawful use is liable for acts of copyright infringement by third parties
using the product. We hold that one who distributes a device with the object of promoting
its use to infringe copyright, as shown by clear expression or other affirmative steps taken
to foster infringement, is liable for the resulting acts of infringement by third parties.
Respondents, Grokster, Ltd., and StreamCast Networks, Inc., defendants in the trial
court, distribute free software products that allow computer users to share electronic files
through peer-to-peer networks, so called because users’ computers communicate directly
with each other, not through central servers. The advantage of peer-to-peer networks over
information networks of other types shows up in their substantial and growing popularity.
Because they need no central computer server to mediate the exchange of information or
files among users, the high-bandwidth communications capacity for a server may be
dispensed with, and the need for costly server storage space is eliminated. Since copies of
a file (particularly a popular one) are available on many users’ computers, file requests
and retrievals may be faster than on other types of networks, and since file exchanges do
not travel through a server, communications can take place between any computers that
remain connected to the network without risk that a glitch in the server will disable the
network in its entirety. Given these benefits in security, cost, and efficiency, peer-to-peer
networks are employed to store and distribute electronic files by universities, government
agencies, corporations, and libraries, among others.
Other users of peer-to-peer networks include individual recipients of Grokster’s
and StreamCast’s software, and although the networks that they enjoy through using the
software can be used to share any type of digital file, they have prominently employed
those networks in sharing copyrighted music and video files without authorization. A
group of copyright holders (MGM for short, but including motion picture studios,
recording companies, songwriters, and music publishers) sued Grokster and StreamCast
for their users’ copyright infringements, alleging that they knowingly and intentionally
distributed their software to enable users to reproduce and distribute the copyrighted
works in violation of the Copyright Act. MGM sought damages and an injunction.
Grokster’s eponymous software employs what is known as FastTrack technology,
a protocol developed by others and licensed to Grokster. StreamCast distributes a very
similar product except that its software, called Morpheus, relies on what is known as
Gnutella technology. A user who downloads and installs either software possesses the
protocol to send requests for files directly to the computers of others using software
compatible with FastTrack or Gnutella. On the FastTrack network opened by the
Grokster software, the user’s request goes to a computer given an indexing capacity by
the software and designated a supernode, or to some other computer with comparable
power and capacity to collect temporary indexes of the files available on the computers

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of users connected to it. The supernode (or indexing computer) searches its own index
and may communicate the search request to other supernodes. If the file is found, the
supernode discloses its location to the computer requesting it, and the requesting user
can download the file directly from the computer located. The copied file is placed in a
designated sharing folder on the requesting user’s computer, where it is available for
other users to download in turn, along with any other file in that folder.
In the Gnutella network made available by Morpheus, the process is mostly the
same, except that in some versions of the Gnutella protocol there are no supernodes. In
these versions, peer computers using the protocol communicate directly with each other.
When a user enters a search request into the Morpheus software, it sends the request to
computers connected with it, which in turn pass the request along to other connected
peers. The search results are communicated to the requesting computer, and the user can
download desired files directly from peers’ computers. As this description indicates,
Grokster and StreamCast use no servers to intercept the content of the search requests or
to mediate the file transfers conducted by users of the software, there being no central
point through which the substance of the communications passes in either direction.
Although Grokster and StreamCast do not therefore know when particular files are
copied, a few searches using their software would show what is available on the networks
the software reaches. MGM commissioned a statistician to conduct a systematic search,
and his study showed that nearly 90% of the files available for download on the FastTrack
system were copyrighted works. Grokster and StreamCast dispute this figure, raising
methodological problems and arguing that free copying even of copyrighted works may
be authorized by the rightholders. They also argue that potential noninfringing uses of
their software are significant in kind, even if infrequent in practice. Some musical
performers, for example, have gained new audiences by distributing their copyrighted
works for free across peer-to-peer networks, and some distributors of unprotected content
have used peer-to-peer networks to disseminate files, Shakespeare being an example.
Indeed, StreamCast has given Morpheus users the opportunity to download the briefs in
this very case, though their popularity has not been quantified.
As for quantification, the parties’ anecdotal and statistical evidence entered thus
far to show the content available on the FastTrack and Gnutella networks does not say
much about which files are actually downloaded by users, and no one can say how often
the software is used to obtain copies of unprotected material. But MGM’s evidence gives
reason to think that the vast majority of users’ downloads are acts of infringement, and
because well over 100 million copies of the software in question are known to have been
downloaded, and billions of files are shared across the FastTrack and Gnutella networks
each month, the probable scope of copyright infringement is staggering.
Grokster and StreamCast concede the infringement in most downloads, and it is
uncontested that they are aware that users employ their software primarily to download
copyrighted files, even if the decentralized FastTrack and Gnutella networks fail to reveal
which files are being copied, and when. From time to time, moreover, the companies
have learned about their users’ infringement directly, as from users who have sent e-mail
to each company with questions about playing copyrighted movies they had downloaded,
to whom the companies have responded with guidance. And MGM notified the
companies of 8 million copyrighted files that could be obtained using their software.
Grokster and StreamCast are not, however, merely passive recipients of
information about infringing use. The record is replete with evidence that from the
moment Grokster and StreamCast began to distribute their free software, each one clearly
voiced the objective that recipients use it to download copyrighted works, and each took

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active steps to encourage infringement.
After the notorious file-sharing service, Napster, was sued by copyright holders
for facilitation of copyright infringement, StreamCast gave away a software program of
a kind known as OpenNap, designed as compatible with the Napster program and open
to Napster users for downloading files from other Napster and OpenNap users’
computers. Evidence indicates that “[i]t was always [StreamCast’s] intent to use [its
OpenNap network] to be able to capture email addresses of [its] initial target market so
that [it] could promote [its] StreamCast Morpheus interface to them,” indeed, the
OpenNap program was engineered “‘to leverage Napster’s 50 million user base.’”
. . . Internal company documents indicate that StreamCast hoped to attract large
numbers of former Napster users if that company was shut down by court order or
otherwise, and that StreamCast planned to be the next Napster. A kit developed by
StreamCast to be delivered to advertisers, for example, contained press articles about
StreamCast’s potential to capture former Napster users, and it introduced itself to some
potential advertisers as a company “which is similar to what Napster was.” It broadcast
banner advertisements to users of other Napster-compatible software, urging them to
adopt its OpenNap. An internal e-mail from a company executive stated: “‘We have put
this network in place so that when Napster pulls the plug on their free service . . . or if
the Court orders them shut down prior to that . . . we will be positioned to capture the
flood of their 32 million users that will be actively looking for an alternative.’”
Thus, StreamCast developed promotional materials to market its service as the best
Napster alternative. One proposed advertisement read: “Napster Inc. has announced that
it will soon begin charging you a fee. That’s if the courts don’t order it shut down first.
What will you do to get around it?” Another proposed ad touted StreamCast’s software
as the “# 1 alternative to Napster” and asked “[w]hen the lights went off at Napster . . .
where did the users go?” StreamCast even planned to flaunt the illegal uses of its
software; when it launched the OpenNap network, the chief technology officer of the
company averred that “[t]he goal is to get in trouble with the law and get sued. It’s the
best way to get in the new[s].”
The evidence that Grokster sought to capture the market of former Napster users
is sparser but revealing, for Grokster launched its own OpenNap system called Swaptor
and inserted digital codes into its Web site so that computer users using Web search
engines to look for “Napster” or “[f]ree filesharing” would be directed to the Grokster
Web site, where they could download the Grokster software. And Grokster’s name is an
apparent derivative of Napster.
StreamCast’s executives monitored the number of songs by certain commercial
artists available on their networks, and an internal communication indicates they aimed to
have a larger number of copyrighted songs available on their networks than other filesharing networks. The point, of course, would be to attract users of a mind to infringe, just
as it would be with their promotional materials developed showing copyrighted songs as
examples of the kinds of files available through Morpheus. Morpheus in fact allowed users
to search specifically for “Top 40” songs, which were inevitably copyrighted.
In addition to this evidence of express promotion, marketing, and intent to promote
further, the business models employed by Grokster and StreamCast confirm that their
principal object was use of their software to download copyrighted works. Grokster and
StreamCast receive no revenue from users, who obtain the software itself for nothing.
Instead, both companies generate income by selling advertising space, and they stream
the advertising to Grokster and Morpheus users while they are employing the programs.
As the number of users of each program increases, advertising opportunities become

Inducement Liability

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worth more. While there is doubtless some demand for free Shakespeare, the evidence
shows that substantive volume is a function of free access to copyrighted work. Users
seeking Top 40 songs, for example, or the latest release by Modest Mouse, are certain to
be far more numerous than those seeking a free Decameron, and Grokster and StreamCast
translated that demand into dollars.
Finally, there is no evidence that either company made an effort to filter copyrighted
material from users’ downloads or otherwise impede the sharing of copyrighted files.
Although Grokster appears to have sent e-mails warning users about infringing content
when it received threatening notice from the copyright holders, it never blocked anyone
from continuing to use its software to share copyrighted files. StreamCast not only rejected
another company’s offer of help to monitor infringement, but blocked the Internet Protocol
addresses of entities it believed were trying to engage in such monitoring on its networks.
B
. . . The District Court limited its consideration to the asserted liability of Grokster
and StreamCast for distributing the current versions of their software, leaving aside
whether either was liable “for damages arising from past versions of their software, or
from other past activities.” The District Court held that those who used the Grokster and
Morpheus software to download copyrighted media files directly infringed MGM’s
copyrights, a conclusion not contested on appeal, but the court nonetheless granted
summary judgment in favor of Grokster and StreamCast as to any liability arising from
distribution of the then current versions of their software. Distributing that software gave
rise to no liability in the court’s view, because its use did not provide the distributors with
actual knowledge of specific acts of infringement.
The Court of Appeals affirmed. In the court’s analysis, a defendant was liable as a
contributory infringer when it had knowledge of direct infringement and materially
contributed to the infringement. But the court read Sony Corp. of America v. Universal
City Studios, Inc. (1984), as holding that distribution of a commercial product capable of
substantial noninfringing uses could not give rise to contributory liability for
infringement unless the distributor had actual knowledge of specific instances of
infringement and failed to act on that knowledge. The fact that the software was capable
of substantial noninfringing uses in the Ninth Circuit’s view meant that Grokster and
StreamCast were not liable, because they had no such actual knowledge, owing to the
decentralized architecture of their software. The court also held that Grokster and
StreamCast did not materially contribute to their users’ infringement because it was the
users themselves who searched for, retrieved, and stored the infringing files, with no
involvement by the defendants beyond providing the software in the first place.
The Ninth Circuit also considered whether Grokster and StreamCast could be
liable under a theory of vicarious infringement. The court held against liability because
the defendants did not monitor or control the use of the software, had no agreed-upon
right or current ability to supervise its use, and had no independent duty to police
infringement. We granted certiorari.
II
A
MGM and many of the amici fault the Court of Appeals’s holding for upsetting a
sound balance between the respective values of supporting creative pursuits through
copyright protection and promoting innovation in new communication technologies by
limiting the incidence of liability for copyright infringement. The more artistic protection

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is favored, the more technological innovation may be discouraged; the administration of
copyright law is an exercise in managing the trade-off.
The tension between the two values is the subject of this case, with its claim that
digital distribution of copyrighted material threatens copyright holders as never before,
because every copy is identical to the original, copying is easy, and many people
(especially the young) use file-sharing software to download copyrighted works. This
very breadth of the software’s use may well draw the public directly into the debate over
copyright policy, and the indications are that the ease of copying songs or movies using
software like Grokster’s and Napster’s is fostering disdain for copyright protection. As
the case has been presented to us, these fears are said to be offset by the different concern
that imposing liability, not only on infringers but on distributors of software based on its
potential for unlawful use, could limit further development of beneficial technologies.8
The argument for imposing indirect liability in this case is, however, a powerful one,
given the number of infringing downloads that occur every day using StreamCast’s and
Grokster’s software. When a widely shared service or product is used to commit
infringement, it may be impossible to enforce rights in the protected work effectively against
all direct infringers, the only practical alternative being to go against the distributor of the
copying device for secondary liability on a theory of contributory or vicarious infringement.
One infringes contributorily by intentionally inducing or encouraging direct
infringement, and infringes vicariously by profiting from direct infringement while
declining to exercise a right to stop or limit it.9 Although “[t]he Copyright Act does not
expressly render anyone liable for infringement committed by another,” Sony Corp. v.
Universal City Studios, these doctrines of secondary liability emerged from common law
principles and are well established in the law.
B
Despite the currency of these principles of secondary liability, this Court has dealt
with secondary copyright infringement in only one recent case, and because MGM has
tailored its principal claim to our opinion there, a look at our earlier holding is in order.
In Sony Corp. v. Universal City Studios, this Court addressed a claim that secondary
liability for infringement can arise from the very distribution of a commercial product.
There, the product, novel at the time, was what we know today as the videocassette
recorder or VCR. Copyright holders sued Sony as the manufacturer, claiming it was
contributorily liable for infringement that occurred when VCR owners taped copyrighted
programs because it supplied the means used to infringe, and it had constructive
knowledge that infringement would occur. At the trial on the merits, the evidence showed
that the principal use of the VCR was for “‘time-shifting,’” or taping a program for later
8
The mutual exclusivity of these values should not be overstated, however. On the one hand technological
innovators, including those writing file-sharing computer programs, may wish for effective copyright
protections for their work. On the other hand the widespread distribution of creative works through improved
technologies may enable the synthesis of new works or generate audiences for emerging artists.
9
We stated in Sony Corp. of America v. Universal City Studios, Inc. (1984), that “‘the lines between direct
infringement, contributory infringement and vicarious liability are not clearly drawn. . . .’ [R]easoned analysis
of [the Sony plaintiffs’ contributory infringement claim] necessarily entails consideration of arguments and
case law which may also be forwarded under the other labels, and indeed the parties . . . rely upon such
arguments and authority in support of their respective positions on the issue of contributory infringement.” In
the present case MGM has argued a vicarious liability theory, which allows imposition of liability when the
defendant profits directly from the infringement and has a right and ability to supervise the direct infringer,
even if the defendant initially lacks knowledge of the infringement. Because we resolve the case based on an
inducement theory, there is no need to analyze separately MGM’s vicarious liability theory.

Inducement Liability

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viewing at a more convenient time, which the Court found to be a fair, not an infringing,
use. There was no evidence that Sony had expressed an object of bringing about taping
in violation of copyright or had taken active steps to increase its profits from unlawful
taping. Although Sony’s advertisements urged consumers to buy the VCR to “‘record
favorite shows’” or “‘build a library’” of recorded programs, Sony (Blackmun, J.,
dissenting), neither of these uses was necessarily infringing.
On those facts, with no evidence of stated or indicated intent to promote infringing
uses, the only conceivable basis for imposing liability was on a theory of contributory
infringement arising from its sale of VCRs to consumers with knowledge that some
would use them to infringe. But because the VCR was “capable of commercially
significant noninfringing uses,” we held the manufacturer could not be faulted solely on
the basis of its distribution. . . .
In sum, where an article is “good for nothing else” but infringement there is no
legitimate public interest in its unlicensed availability, and there is no injustice in presuming
or imputing an intent to infringe. Conversely, the doctrine absolves the equivocal conduct
of selling an item with substantial lawful as well as unlawful uses, and limits liability to
instances of more acute fault than the mere understanding that some of one’s products will
be misused. It leaves breathing room for innovation and a vigorous commerce.
The parties and many of the amici in this case think the key to resolving it is the
Sony rule and, in particular, what it means for a product to be “capable of commercially
significant noninfringing uses.” MGM advances the argument that granting summary
judgment to Grokster and StreamCast as to their current activities gave too much weight
to the value of innovative technology, and too little to the copyrights infringed by users
of their software, given that 90% of works available on one of the networks was shown
to be copyrighted. Assuming the remaining 10% to be its noninfringing use, MGM says
this should not qualify as “substantial,” and the Court should quantify Sony to the extent
of holding that a product used “principally” for infringement does not qualify. As
mentioned before, Grokster and StreamCast reply by citing evidence that their software
can be used to reproduce public domain works, and they point to copyright holders who
actually encourage copying. Even if infringement is the principal practice with their
software today, they argue, the noninfringing uses are significant and will grow.
We agree with MGM that the Court of Appeals misapplied Sony, which it read as
limiting secondary liability quite beyond the circumstances to which the case applied.
Sony barred secondary liability based on presuming or imputing intent to cause
infringement solely from the design or distribution of a product capable of substantial
lawful use, which the distributor knows is in fact used for infringement. The Ninth Circuit
has read Sony’s limitation to mean that whenever a product is capable of substantial
lawful use, the producer can never be held contributorily liable for third parties’
infringing use of it; it read the rule as being this broad, even when an actual purpose to
cause infringing use is shown by evidence independent of design and distribution of the
product, unless the distributors had “specific knowledge of infringement at a time at
which they contributed to the infringement, and failed to act upon that information.”
Because the Circuit found the StreamCast and Grokster software capable of substantial
lawful use, it concluded on the basis of its reading of Sony that neither company could
be held liable, since there was no showing that their software, being without any central
server, afforded them knowledge of specific unlawful uses.
This view of Sony, however, was error, converting the case from one about liability
resting on imputed intent to one about liability on any theory. Because Sony did not
displace other theories of secondary liability, and because we find below that it was error

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to grant summary judgment to the companies on MGM’s inducement claim, we do not
revisit Sony further, as MGM requests, to add a more quantified description of the point
of balance between protection and commerce when liability rests solely on distribution
with knowledge that unlawful use will occur. It is enough to note that the Ninth Circuit’s
judgment rested on an erroneous understanding of Sony and to leave further consideration of the Sony rule for a day when that may be required.
C
Sony’s rule limits imputing culpable intent as a matter of law from the
characteristics or uses of a distributed product. But nothing in Sony requires courts to
ignore evidence of intent if there is such evidence, and the case was never meant to
foreclose rules of fault-based liability derived from the common law. (“If vicarious
liability is to be imposed on Sony in this case, it must rest on the fact that it has sold
equipment with constructive knowledge” of the potential for infringement). Thus, where
evidence goes beyond a product’s characteristics or the knowledge that it may be put to
infringing uses, and shows statements or actions directed to promoting infringement,
Sony’s staple-article rule will not preclude liability.
The classic case of direct evidence of unlawful purpose occurs when one induces
commission of infringement by another, or “entic[es] or persuad[es] another” to infringe,
Black’s Law Dictionary 790 (8th ed. 2004), as by advertising. Thus at common law a
copyright or patent defendant who “not only expected but invoked [infringing use] by
advertisement” was liable for infringement “on principles recognized in every part of the
law.” Kalem Co. v. Harper Brothers (copyright infringement).
The rule on inducement of infringement as developed in the early cases is no
different today.11 Evidence of “active steps . . . taken to encourage direct infringement,”
such as advertising an infringing use or instructing how to engage in an infringing use,
show an affirmative intent that the product be used to infringe, and a showing that
infringement was encouraged overcomes the law’s reluctance to find liability when a
defendant merely sells a commercial product suitable for some lawful use, see, e.g.,
Water Technologies Corp. v. Calco, Ltd. (Fed. Cir. 1988) (liability for inducement where
one “actively and knowingly aid[s] and abet[s] another’s direct infringement” (emphasis
omitted)); Fromberg, Inc. v. Thornhill (5th Cir. 1963) (demonstrations by sales staff of
infringing uses supported liability for inducement); Haworth Inc. v. Herman Miller Inc.
(W.D. Mich. 1994) (evidence that defendant “demonstrate[d] and recommend[ed] infringing configurations” of its product could support inducement liability); Sims v. Mack
Trucks, Inc. (E.D. Pa. 1978) (finding inducement where the use “depicted by the defendant in its promotional film and brochures infringes the . . . patent”), overruled on other
grounds, 608 F.2d 87 (3d Cir. 1979).
For the same reasons that Sony took the staple-article doctrine of patent law as a
model for its copyright safe-harbor rule, the inducement rule, too, is a sensible one for
copyright. We adopt it here, holding that one who distributes a device with the object of
promoting its use to infringe copyright, as shown by clear expression or other affirmative
steps taken to foster infringement, is liable for the resulting acts of infringement by third
parties. We are, of course, mindful of the need to keep from trenching on regular
commerce or discouraging the development of technologies with lawful and unlawful
potential. Accordingly, just as Sony did not find intentional inducement despite the
knowledge of the VCR manufacturer that its device could be used to infringe, mere
11

Inducement has been codified in patent law.

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533

knowledge of infringing potential or of actual infringing uses would not be enough here
to subject a distributor to liability. Nor would ordinary acts incident to product
distribution, such as offering customers technical support or product updates, support
liability in themselves. The inducement rule, instead, premises liability on purposeful,
culpable expression and conduct, and thus does nothing to compromise legitimate
commerce or discourage innovation having a lawful promise.
III
A
The only apparent question about treating MGM’s evidence as sufficient to
withstand summary judgment under the theory of inducement goes to the need on MGM’s
part to adduce evidence that StreamCast and Grokster communicated an inducing message
to their software users. The classic instance of inducement is by advertisement or
solicitation that broadcasts a message designed to stimulate others to commit violations.
MGM claims that such a message is shown here. It is undisputed that StreamCast beamed
onto the computer screens of users of Napster-compatible programs ads urging the
adoption of its OpenNap program, which was designed, as its name implied, to invite the
custom of patrons of Napster, then under attack in the courts for facilitating massive
infringement. Those who accepted StreamCast’s OpenNap program were offered software
to perform the same services, which a factfinder could conclude would readily have been
understood in the Napster market as the ability to download copyrighted music files.
Grokster distributed an electronic newsletter containing links to articles promoting its
software’s ability to access popular copyrighted music. And anyone whose Napster or free
file-sharing searches turned up a link to Grokster would have understood Grokster to be
offering the same file-sharing ability as Napster, and to the same people who probably
used Napster for infringing downloads; that would also have been the understanding of
anyone offered Grokster’s suggestively named Swaptor software, its version of OpenNap.
And both companies communicated a clear message by responding affirmatively to
requests for help in locating and playing copyrighted materials.
In StreamCast’s case, of course, the evidence just described was supplemented by
other unequivocal indications of unlawful purpose in the internal communications and
advertising designs aimed at Napster users (“When the lights went off at Napster . . .
where did the users go?”). Whether the messages were communicated is not to the point
on this record. The function of the message in the theory of inducement is to prove by a
defendant’s own statements that his unlawful purpose disqualifies him from claiming
protection (and incidentally to point to actual violators likely to be found among those
who hear or read the message). Proving that a message was sent out, then, is the
preeminent but not exclusive way of showing that active steps were taken with the purpose
of bringing about infringing acts, and of showing that infringing acts took place by using
the device distributed. Here, the summary judgment record is replete with other evidence
that Grokster and StreamCast, unlike the manufacturer and distributor in Sony, acted with
a purpose to cause copyright violations by use of software suitable for illegal use.
Three features of this evidence of intent are particularly notable. First, each
company showed itself to be aiming to satisfy a known source of demand for copyright
infringement, the market comprising former Napster users. StreamCast’s internal
documents made constant reference to Napster, it initially distributed its Morpheus
software through an OpenNap program compatible with Napster, it advertised its
OpenNap program to Napster users, and its Morpheus software functions as Napster did
except that it could be used to distribute more kinds of files, including copyrighted movies

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and software programs. Grokster’s name is apparently derived from Napster, it too
initially offered an OpenNap program, its software’s function is likewise comparable to
Napster’s, and it attempted to divert queries for Napster onto its own Web site. Grokster
and StreamCast’s efforts to supply services to former Napster users, deprived of a
mechanism to copy and distribute what were overwhelmingly infringing files, indicate a
principal, if not exclusive, intent on the part of each to bring about infringement.
Second, this evidence of unlawful objective is given added significance by MGM’s
showing that neither company attempted to develop filtering tools or other mechanisms
to diminish the infringing activity using their software. While the Ninth Circuit treated
the defendants’ failure to develop such tools as irrelevant because they lacked an
independent duty to monitor their users’ activity, we think this evidence underscores
Grokster’s and StreamCast’s intentional facilitation of their users’ infringement.12
Third, there is a further complement to the direct evidence of unlawful objective.
It is useful to recall that StreamCast and Grokster make money by selling advertising
space, by directing ads to the screens of computers employing their software. As the
record shows, the more the software is used, the more ads are sent out and the greater the
advertising revenue becomes. Since the extent of the software’s use determines the gain
to the distributors, the commercial sense of their enterprise turns on high-volume use,
which the record shows is infringing. This evidence alone would not justify an inference
of unlawful intent, but viewed in the context of the entire record its import is clear.
The unlawful objective is unmistakable.
B
In addition to intent to bring about infringement and distribution of a device
suitable for infringing use, the inducement theory of course requires evidence of actual
infringement by recipients of the device, the software in this case. As the account of the
facts indicates, there is evidence of infringement on a gigantic scale, and there is no
serious issue of the adequacy of MGM’s showing on this point in order to survive the
companies’ summary judgment requests. Although an exact calculation of infringing use,
as a basis for a claim of damages, is subject to dispute, there is no question that the
summary judgment evidence is at least adequate to entitle MGM to go forward with
claims for damages and equitable relief.
***
In sum, this case is significantly different from Sony and reliance on that case to
rule in favor of StreamCast and Grokster was error. Sony dealt with a claim of liability
based solely on distributing a product with alternative lawful and unlawful uses, with
knowledge that some users would follow the unlawful course. The case struck a balance
between the interests of protection and innovation by holding that the product’s
capability of substantial lawful employment should bar the imputation of fault and
consequent secondary liability for the unlawful acts of others.
MGM’s evidence in this case most obviously addresses a different basis of liability
for distributing a product open to alternative uses. Here, evidence of the distributors’ words
and deeds going beyond distribution as such shows a purpose to cause and profit from thirdparty acts of copyright infringement. If liability for inducing infringement is ultimately
found, it will not be on the basis of presuming or imputing fault, but from inferring a patently
12
Of course, in the absence of other evidence of intent, a court would be unable to find contributory
infringement liability merely based on a failure to take affirmative steps to prevent infringement, if the device
otherwise was capable of substantial noninfringing uses. Such a holding would tread too close to the Sony
safe harbor.

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illegal objective from statements and actions showing what that objective was.
There is substantial evidence in MGM’s favor on all elements of inducement, and
summary judgment in favor of Grokster and StreamCast was error. On remand,
reconsideration of MGM’s motion for summary judgment will be in order. The judgment
of the Court of Appeals is vacated, and the case is remanded for further proceedings
consistent with this opinion.
It is so ordered.
Justice GINSBURG, with whom THE CHIEF JUSTICE and Justice KENNEDY join,
concurring.
I concur in the Court’s decision . . . and write separately to clarify why I conclude
that the Court of Appeals misperceived, and hence misapplied, our holding in Sony Corp.
of America v. Universal City Studios, Inc. (1984). There is here at least a “genuine issue
as to [a] material fact,” Fed. Rule Civ. Proc. 56(c), on the liability of Grokster or
StreamCast, not only for actively inducing copyright infringement, but also or
alternatively, based on the distribution of their software products, for contributory
copyright infringement. On neither score was summary judgment for Grokster and
StreamCast warranted. . . .
This case differs markedly from Sony. Here, there has been no finding of any fair
use and little beyond anecdotal evidence of noninfringing uses. In finding the Grokster
and StreamCast software products capable of substantial noninfringing uses, the District
Court and the Court of Appeals appear to have relied largely on declarations submitted
by the defendants. These declarations include assertions (some of them hearsay) that a
number of copyright owners authorize distribution of their works on the Internet and that
some public domain material is available through peer-to-peer networks including those
accessed through Grokster’s and StreamCast’s software. . . .3
Even if the absolute number of noninfringing files copied using the Grokster and
StreamCast software is large, it does not follow that the products are therefore put to
substantial noninfringing uses and are thus immune from liability. The number of
noninfringing copies may be reflective of, and dwarfed by, the huge total volume of files
shared. In sum, when the record in this case was developed, there was evidence that
Grokster’s and StreamCast’s products were, and had been for some time,
overwhelmingly used to infringe, and that this infringement was the overwhelming
source of revenue from the products. Fairly appraised, the evidence was insufficient to
demonstrate, beyond genuine debate, a reasonable prospect that substantial or
commercially significant noninfringing uses were likely to develop over time. On this
record, the District Court should not have ruled dispositively on the contributory
Justice Breyer finds support for summary judgment in this motley collection of declarations and in a survey
conducted by an expert retained by MGM. That survey identified 75% of the files available through Grokster
as copyrighted works owned or controlled by the plaintiffs, and 15% of the files as works likely copyrighted.
As to the remaining 10% of the files, “there was not enough information to form reasonable conclusions either
as to what those files even consisted of, and/or whether they were infringing or non-infringing.” Even
assuming, as Justice Breyer does, that the Sony Court would have absolved Sony of contributory liability solely
on the basis of the use of the Betamax for authorized time-shifting, summary judgment is not inevitably
appropriate here. Sony stressed that the plaintiffs there owned “well below 10%” of copyrighted television
programming, [Sony], and found, based on trial testimony from representatives of the four major sports
leagues and other individuals authorized to consent to home recording of their copyrighted broadcasts, that a
similar percentage of program copying was authorized. Here, the plaintiffs allegedly control copyrights for
70% or 75% of the material exchanged through the Grokster and StreamCast software, and the District Court
does not appear to have relied on comparable testimony about authorized copying from copyright holders.
3

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infringement charge by granting summary judgment to Grokster and StreamCast.
If, on remand, the case is not resolved on summary judgment in favor of MGM
based on Grokster and StreamCast actively inducing infringement, the Court of Appeals,
I would emphasize, should reconsider, on a fuller record, its interpretation of Sony’s
product distribution holding.
Justice BREYER, with whom Justices STEVENS and O’CONNOR join, concurring.
I agree with the Court that the distributor of a dual-use technology may be liable
for the infringing activities of third parties where he or she actively seeks to advance the
infringement. I further agree that, in light of our holding today, we need not now “revisit”
Sony. Other Members of the Court, however, take up the Sony question: whether
Grokster’s product is “capable of ‘substantial’ or ‘commercially significant’
noninfringing uses.” And they answer that question by stating that the Court of Appeals
was wrong when it granted summary judgment on the issue in Grokster’s favor. I write
to explain why I disagree with them on this matter. . . .
The Court’s opinion in Sony and the record evidence (as described and analyzed
in the many briefs before us) together convince me that the Court of Appeals’ conclusion
has adequate legal support. . . .
When measured against Sony’s underlying evidence and analysis, the evidence
now before us shows that Grokster passes Sony’s test—that is, whether the company’s
product is capable of substantial or commercially significant noninfringing uses. For one
thing, petitioners’ (hereinafter MGM) own expert declared that 75% of current files
available on Grokster are infringing and 15% are “likely infringing.” That leaves some
number of files near 10% that apparently are noninfringing, a figure very similar to the
9% or so of authorized time-shifting uses of the VCR that the Court faced in Sony. . . .
Importantly, Sony also used the word “capable,” asking whether the product is
“capable of” substantial noninfringing uses. Its language and analysis suggest that a
figure like 10%, if fixed for all time, might well prove insufficient, but that such a figure
serves as an adequate foundation where there is a reasonable prospect of expanded
legitimate uses over time. [Sony] (noting a “significant potential for future authorized
copying”). And its language also indicates the appropriateness of looking to potential
future uses of the product to determine its “capability.”
Here the record reveals a significant future market for noninfringing uses of
Grokster-type peer-to-peer software. Such software permits the exchange of any sort of
digital file—whether that file does, or does not, contain copyrighted material. As more and
more uncopyrighted information is stored in swappable form, it seems a likely inference
that lawful peer-to-peer sharing will become increasingly prevalent.
And that is just what is happening. Such legitimate noninfringing uses are coming
to include the swapping of: research information (the initial purpose of many peer-topeer networks); public domain films (e.g., those owned by the Prelinger Archive); historical recordings and digital educational materials (e.g., those stored on the Internet
Archive); digital photos (OurPictures, for example, is starting a P2P photo-swapping
service); “shareware” and “freeware” (e.g., Linux and certain Windows software); secure
licensed music and movie files (Intent MediaWorks, for example, protects licensed content sent across P2P networks); news broadcasts past and present (the BBC Creative
Archive lets users “rip, mix and share the BBC”); user-created audio and video files (including “podcasts” that may be distributed through P2P software); and all manner of free
“open content” works collected by Creative Commons (one can search for Creative
Commons material on StreamCast). I can find nothing in the record that suggests that

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this course of events will not continue to flow naturally as a consequence of the character
of the software taken together with the foreseeable development of the Internet and of
information technology. . . .
As I have said, Sony itself sought to “strike a balance between a copyright holder’s
legitimate demand for effective—not merely symbolic—protection of the statutory
monopoly, and the rights of others freely to engage in substantially unrelated areas of
commerce.” Thus, to determine whether modification, or a strict interpretation, of Sony
is needed, I would ask whether MGM has shown that Sony incorrectly balanced copyright
and new-technology interests. In particular: (1) Has Sony (as I interpret it) worked to
protect new technology? (2) If so, would modification or strict interpretation
significantly weaken that protection? (3) If so, would new or necessary copyright-related
benefits outweigh any such weakening?
A
The first question is the easiest to answer. Sony’s rule, as I interpret it, has provided
entrepreneurs with needed assurance that they will be shielded from copyright liability
as they bring valuable new technologies to market.
Sony’s rule is clear. That clarity allows those who develop new products that are
capable of substantial noninfringing uses to know, ex ante, that distribution of their
product will not yield massive monetary liability. At the same time, it helps deter them
from distributing products that have no other real function than—or that are specifically
intended for—copyright infringement, deterrence that the Court’s holding today
reinforces (by adding a weapon to the copyright holder’s legal arsenal).
Sony’s rule is strongly technology protecting. The rule deliberately makes it difficult
for courts to find secondary liability where new technology is at issue. It establishes that
the law will not impose copyright liability upon the distributors of dual-use technologies
(who do not themselves engage in unauthorized copying) unless the product in question
will be used almost exclusively to infringe copyrights (or unless they actively induce
infringements as we today describe). Sony thereby recognizes that the copyright laws are
not intended to discourage or to control the emergence of new technologies, including
(perhaps especially) those that help disseminate information and ideas more broadly or
more efficiently. Thus Sony’s rule shelters VCRs, typewriters, tape recorders, photocopiers,
computers, cassette players, compact disc burners, digital video recorders, MP3 players,
Internet search engines, and peer-to-peer software. But Sony’s rule does not shelter
descramblers, even if one could theoretically use a descrambler in a noninfringing way.
Sony’s rule is forward looking. It does not confine its scope to a static snapshot of
a product’s current uses (thereby threatening technologies that have undeveloped future
markets). Rather, as the VCR example makes clear, a product’s market can evolve
dramatically over time. And Sony—by referring to a capacity for substantial noninfringing uses—recognizes that fact. Sony’s word “capable” refers to a plausible, not simply a
theoretical, likelihood that such uses will come to pass, and that fact anchors Sony in
practical reality.
Sony’s rule is mindful of the limitations facing judges where matters of technology
are concerned. Judges have no specialized technical ability to answer questions about
present or future technological feasibility or commercial viability where technology
professionals, engineers, and venture capitalists themselves may radically disagree and
where answers may differ depending upon whether one focuses upon the time of product
development or the time of distribution.
Given the nature of the Sony rule, it is not surprising that in the last 20 years, there

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have been relatively few contributory infringement suits—based on a product
distribution theory—brought against technology providers (a small handful of federal
appellate court cases and perhaps fewer than two dozen District Court cases in the last
20 years). I have found nothing in the briefs or the record that shows that Sony has failed
to achieve its innovation-protecting objective. . . .
The second, more difficult, question is whether a modified Sony rule (or a strict
interpretation) would significantly weaken the law’s ability to protect new technology.
Justice Ginsburg’s approach would require defendants to produce considerably more
concrete evidence—more than was presented here—to earn Sony’s shelter. That heavier
evidentiary demand, and especially the more dramatic (case-by-case balancing)
modifications that MGM and the Government seek, would, I believe, undercut the
protection that Sony now offers. . . .
The third question—whether a positive copyright impact would outweigh any
technology-related loss—I find the most difficult of the three. I do not doubt that a more
intrusive Sony test would generally provide greater revenue security for copyright
holders. But it is harder to conclude that the gains on the copyright swings would exceed
the losses on the technology roundabouts.
For one thing, the law disfavors equating the two different kinds of gain and loss;
rather, it leans in favor of protecting technology. As Sony itself makes clear, the producer
of a technology which permits unlawful copying does not himself engage in unlawful
copying—a fact that makes the attachment of copyright liability to the creation,
production, or distribution of the technology an exceptional thing. Moreover, Sony has
been the law for some time. And that fact imposes a serious burden upon copyright
holders like MGM to show a need for change in the current rules of the game, including
a more strict interpretation of the test.
In any event, the evidence now available does not, in my view, make out a
sufficiently strong case for change. . . . Will an unmodified Sony lead to a significant
diminution in the amount or quality of creative work produced? Since copyright’s basic
objective is creation and its revenue objectives but a means to that end, this is the
underlying copyright question. See Twentieth Century Music Corp. v. Aiken (1975)
(“Creative work is to be encouraged and rewarded, but private motivation must
ultimately serve the cause of promoting broad public availability of literature, music, and
the other arts”). And its answer is far from clear.
Unauthorized copying likely diminishes industry revenue, though it is not clear by
how much. . . . The extent to which related production has actually and resultingly
declined remains uncertain, though there is good reason to believe that the decline, if any,
is not substantial. See, e. g., M. Madden, Pew Internet & American Life Project, Artists,
Musicians, and the Internet (nearly 70% of musicians believe that file sharing is a minor
threat or no threat at all to creative industries); Benkler, Sharing Nicely: On Shareable
Goods and the Emergence of Sharing as a Modality of Economic Production, 114 Yale
L. J. 273, 351–352 (2004) (“Much of the actual flow of revenue to artists—from
performances and other sources—is stable even assuming a complete displacement of
the CD market by peer-to-peer distribution. . . . [I]t would be silly to think that music, a
cultural form without which no human society has existed, will cease to be in our world
[because of illegal file swapping]”). . . .
. . . As Sony recognized, the legislative option remains available. Courts are less
well suited than Congress to the task of “accommodat[ing] fully the varied permutations
of competing interests that are inevitably implicated by such new technology.”

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For these reasons, I disagree with Justice Ginsburg, but I agree with the Court and
join its opinion.
Questions:
1.) A host of issues present themselves. We think one of the most important questions in
intellectual property law (and perhaps law in general) is what role judges should play in
elaborating its doctrines in the context of new technologies and new social realities. We
discussed that extensively in the preceding two chapters, focusing in particular on
software and on fair use. How should judges interpret the law and apply it, when the
statutory text is either vague or absent, or the technological context clearly different from
the ones to which the law initially applied? Your question is this: is it appropriate for
Federal judges to fashion—with no statutory basis whatsoever—a law of secondary
infringement? Whether your answer was affirmative or negative, did you have the same
answer in the fair use and software cases? If not, why not?
2.) Having fashioned such a law—built around contributory infringement and vicarious
liability—why does it make sense to add a new form of liability built around inducement?
Describe Justice Souter’s motivation for doing so. Justice Ginsburg’s? Justice Breyer’s?
3.) State the test that Grokster lays down for inducement liability.

P ROBLEM 14-2
You are an associate product development lawyer for Apple. The Grokster decision has
been taken back in time and has just landed on your desk. Five minutes later, the first
iPod is laid in front of you. At the time, assume the principal competing digital music
player (from Sony) only plays DRM-protected music and will not play MP3 files.
Assume a deliberate engineering decision has been made that the iPod will play
unprotected MP3 files. Assume the iPod can also hold dramatically more songs than
any available competing player. The iPod will be marketed in conjunction with three
advertising campaigns. “Rip, Mix and Burn!” “10,000 songs in your pocket!” and a
dystopian, 1984-like image of shackled slaves, listening to a droning Big Brother,
suddenly revolting when exposed to Apple’s new technology. “The revolution is here,”
says the ad, “free your head. Free the music!” The advertisements have been made and
circulated internally at Apple, but not yet aired. One of the attractive features of iTunes
is that it will automatically retrieve album art for any digital music found on your
computer or iPod. To do this, iTunes relies on “digital signatures” of the tracks on your
iPod or computer. This service does not restrict itself to the DRM-protected AARC
files sold from the iTunes store, it also works for any album “ripped” from a CD into
MP3 form (which would be a fair use, were the original CD owned by the person doing
the ripping). By the same token, it works for any illicitly downloaded MP3.
You must tell your boss whether the iPod might violate the rules laid down in the
new Grokster decision, or the more traditional rules of contributory and vicarious
infringement. How do you advise? What factors inform your analysis? Would
you advise any changes to the product, accompanying service or advertising?

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4.) Safe Harbors: Section 512, Direct Infringement and Secondary Liability
Let us leave secondary infringement for a moment and turn back to direct
infringement. Having read MAI, which suggests that even transitory copies count as
copies for the purpose of § 106, and learned that copyright is a strict liability system,
which does not require bad intent, or even negligence, for liability, you may be wondering
why the entire internet is not illegal—or constantly subject to copyright suits for direct
infringement. After all, Google’s “spiders” copy the entire web every day in order to index
it. Much of the material Google copies was itself illicitly copied—though Google does
not “know” this when its spiders make copies. And those copies then sit on Google’s
titanic hard drives far longer than is needed to count as fixed; they are much more stable
than a RAM copy. Google does this “on purpose”—there is much more intentionality
about the copying than there was in the Netcom case. Hundreds of hours of video are
uploaded to YouTube every minute: even though its digital fingerprinting and detection
software is now very good, and even though some unauthorized uploads would be
sufficiently transformative to count as fair use, that still leaves an enormous quantity of
illicitly reproduced material. Facebook has millions of users posting content, some of
which is illicitly copied (even if the users and Facebook sometimes do not know that).
Dropbox and every other cyberlocker can be used to store both licit and infringing
material. Gmail has billions of emails with infringing attachments passing through its
systems, and sitting in its hard drives, every year. Time Warner Cable, Comcast and AT&T
provide internet service to millions, and infringing material flows over those connections,
and over the law school network you may be on right now. The networks temporarily
“cache” material to speed up transmission. Some of the cached material is illicitly copied.
Why does this activity not make all of these intermediaries directly liable? (We
will come to their potential indirect or secondary liability in a moment.) In each of these
cases, the intermediary is making copies, on its own system, of infringing material. Is the
whole internet somehow protected by Netcom, a single District Court decision that took
a “creative” interpretation towards the law of its own circuit? (Revisit the Netcom
decision from Chapter 11 to understand why we say that.)
The answer to this question is that, initially, it was the US government's official position that all these entities should be—indeed already were—strictly liable without any
change in existing law, simply because of the combination of a broad conception of fixation
and the fact that copyright was a strict liability system. As of 1995, the USPTO was saying
that strict liability for internet intermediaries was a feature, not a bug. This is the way
copyright infringement would be policed, just as products liability imposes strict liability
on product sellers and then lets them decide how to keep their level of liability down.
Why did this not come to pass? The Digital Millennium Copyright Act—or more
accurately, that part of it with the mellifluous name of the Online Copyright Infringement
Liability Limitation Act (OCILLA)—provided a set of safe harbors which immunized
many types of intermediaries, under certain conditions, from copyright liability. The key
safe harbors are in § 512. It is no exaggeration to say that, without them, the internet as
you know it would not exist. There would be a network, of course, but it would be wildly
different from the one you know.
Look in the WIPO Copyright Treaty from the statutory supplement. You will see no
requirement that there be § 512 limitations. In fact, while the EU E-Commerce Directive
contains similar limitations, what is remarkable is that none of these are required. Rights
are mandatory. Exceptions and limitations are optional. What would Jefferson say?
Section 512’s structure is relatively simple. A series of types of online services are

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