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Introduction

25

1 Undeveloped Ideas
Desny v. Wilder . . . . . . . . . . . . . . . . . . .
Michael J. Burstein, Exchanging Information
Without Intellectual Property . . . . . . . . . .
Apfel v. Prudential-Bache Securities, Inc. . . . . .
Bizarro World Problem . . . . . . . . . . . . . .
Debt Collection Problem . . . . . . . . . . . . .

37
37
39
40
43
43

2 Trade Secret
45
A Subject Ma er . . . . . . . . . . . . . . . . . . . . . . . . 45
Restatement (Third) of Unfair Competition § 39 45
UTSA § 1(4) . . . . . . . . . . . . . . . . . . . . 46
Religious Technology Center v. Netcom On-Line
Communications Services, Inc. . . . . . . . . . 47
B Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . 51
1 Actual Secrecy . . . . . . . . . . . . . . . . . . . . . 51
United States v. Lange . . . . . . . . . . . . . . . 51
Religious Technology Center v. Netcom On-Line
Communications Services, Inc. . . . . . . . . . 54
Learning Curve Toys, Inc. v. PlayWood Toys, Inc. 56
Exploits Problem . . . . . . . . . . . . . . . . . 68
2 Priority . . . . . . . . . . . . . . . . . . . . . . . . . 68
3 Collaborations . . . . . . . . . . . . . . . . . . . . . 68
Restatement (Third) of Unfair Competition §
42 cmt. e . . . . . . . . . . . . . . . . . . . . 68
C Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . 70
United States v. Lange . . . . . . . . . . . . . . . 70
Religious Technology Center v. Netcom On-Line
Communications Services, Inc. . . . . . . . . . 70
Rockwell Graphic Systems, Inc. v. DEV Industries, Inc. . . . . . . . . . . . . . . . . . . . . 71
D Infringement: Similarity . . . . . . . . . . . . . . . . . . 74
Big Vision Private, Ltd. v. E.I. Dupont De
Nemours & Co. . . . . . . . . . . . . . . . . . 74

E Infringement: Prohibited Conduct . . . . . . . . . . . . 75
1 Proving Infringement . . . . . . . . . . . . . . . . . 75
Grynberg v. BP, PLC . . . . . . . . . . . . . . . . 75
2 Direct Infringement . . . . . . . . . . . . . . . . . . 76
Restatement (Third) of Unfair Competitition §
43 . . . . . . . . . . . . . . . . . . . . . . . . 76
UTSA § 1(1) . . . . . . . . . . . . . . . . . . . . 76
E.I. du Pont de Nemours & Co. v. Christopher . . 77
Kamin v. Kuhnau . . . . . . . . . . . . . . . . . . 80
3 Secondary Infringement . . . . . . . . . . . . . . . 84
UTSA § 1(2) . . . . . . . . . . . . . . . . . . . . 84
F Defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
G Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Flaming Moe’s Problem . . . . . . . . . . . . . 85
Sports Secrets Problem . . . . . . . . . . . . . . 86
Questions . . . . . . . . . . . . . . . . . . . . . . 86
Locksmiths Problem . . . . . . . . . . . . . . . 86
H Other Secrecy Laws . . . . . . . . . . . . . . . . . . . . . 87
1 Trespass . . . . . . . . . . . . . . . . . . . . . . . . . 87
Food Lion, Inc. v. Capital Cities/ABC, Inc. . . . . 87
2 Insider Trading . . . . . . . . . . . . . . . . . . . . . 90
United States v. O’Hagan . . . . . . . . . . . . . 90
Salman v. United States . . . . . . . . . . . . . . 95
3 Privacy . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Neil M. Richards, Reconciling Data Privacy and
the First Amendment . . . . . . . . . . . . . . 97
Restatement (Second) of Torts § 652B . . . . . . 98
Neil M. Richards & Daniel J. Solove, Privacy’s
Other Path: Recovering the Law of Conﬁdentiality . . . . . . . . . . . . . . . . . . . . . . 100
Florida v. Riley . . . . . . . . . . . . . . . . . . . 101
Kyllo v. United States . . . . . . . . . . . . . . . 102
4 Government Secrets . . . . . . . . . . . . . . . . . . 104
Freedom of Information Act . . . . . . . . . . . 104
U.S. Dept. of Justice v. Tax Analysts . . . . . . . . 105
Chrysler Corp. v. Brown . . . . . . . . . . . . . . 106
Coastal States Gas Corp. v. Department of Energy 109
Congressional Research Service, The Protection of Classiﬁed Information: The Legal
Framework . . . . . . . . . . . . . . . . . . . 113
Phillippi v. Central Intelligence Agency . . . . . . 117
3 Patent

119
United States Constitution, art. I, § 8, cl. 8 . . . 119
A Subject Ma er . . . . . . . . . . . . . . . . . . . . . . . . 120

Patent Act § 101 . . . . . . . . . . . . . . . . . . 120
1 Utility . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Juicy Whip, Inc. v. Orange Bang, Inc. . . . . . . . 120
MPEP §§ 2701, 2701.01 . . . . . . . . . . . . . . 124
2 Statutory Subject Ma er . . . . . . . . . . . . . . . 128
MPEP § 2106 . . . . . . . . . . . . . . . . . . . . 128
Tun-Jen Chiang, The Rules and Standards of
Patentable Subject Ma er . . . . . . . . . . . . 128
Mayo Collaborative v. Prometheus Labs . . . . . . 129
Tax Planning Patent Problem . . . . . . . . . . 133
B Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . 133
1 Claims . . . . . . . . . . . . . . . . . . . . . . . . . . 137
Patent Act § 112(b)-(d) . . . . . . . . . . . . . . 137
T.J. Chiang, The Levels of Abstraction Problem in
Patent Law . . . . . . . . . . . . . . . . . . . 137
Mark A. Lemley, Point of Novelty . . . . . . . . 138
a Indeﬁniteness . . . . . . . . . . . . . . . . . . . 138
Nautlius, Inc. v. Biosig Instruments Inc. . . . . . 138
Freeny v. Apple Inc. . . . . . . . . . . . . . . . . 139
Datamize, LLC v. Plumtree Software, Inc. . . . . . 141
b Claim Drafting . . . . . . . . . . . . . . . . . . 143
Catalina Marketing Intern. v. Coolsavings.com . . 143
MPEP §§ 2111, 2173 . . . . . . . . . . . . . . . . 143
2 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . 144
Patent Act § 112(a) . . . . . . . . . . . . . . . . . 144
a Enablement . . . . . . . . . . . . . . . . . . . . 145
O’Reilly v. Morse . . . . . . . . . . . . . . . . . . 145
Wyeth & Cordis Corp. v. Abbo Labs. . . . . . . . 146
Plastic Dye Problem . . . . . . . . . . . . . . . . 149
b Wri en Description . . . . . . . . . . . . . . . 150
Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co . . 150
c Best Mode . . . . . . . . . . . . . . . . . . . . . 150
MPEP § 2165 . . . . . . . . . . . . . . . . . . . . 150
d Problem . . . . . . . . . . . . . . . . . . . . . . 151
Salt Shaker Problem . . . . . . . . . . . . . . . . 151
3 Patent Prosecution . . . . . . . . . . . . . . . . . . . 152
Cuozzo Speed Technologies, LLC v. Lee . . . . . . 152
Patent Act § 122 . . . . . . . . . . . . . . . . . . 152
37 C.F.R. pt 1 . . . . . . . . . . . . . . . . . . . . 153
Therasense, Inc. v. Becton, Dickinson and Co. . . . 153
a Priority Dates . . . . . . . . . . . . . . . . . . . 154
USPTO, General Information Concerning
Patents . . . . . . . . . . . . . . . . . . . . . 154
b Multiple Applications . . . . . . . . . . . . . . 155
Patent Act § 121 . . . . . . . . . . . . . . . . . . 155

MPEP §§ 201.07 . . . . . . . . . . . . . . . . . . 155
c Judicial Review . . . . . . . . . . . . . . . . . . 156
d Post-Grant Proceedings . . . . . . . . . . . . . 156
Patent Act § 251 . . . . . . . . . . . . . . . . . . 156
Cuozzo Speed Technologies, LLC v. Lee . . . . . . 156
4 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
Patent Act § 135(a)(2) . . . . . . . . . . . . . . . 158
C Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . 158
1 Collaborations . . . . . . . . . . . . . . . . . . . . . 158
MPEP § 2137.01 . . . . . . . . . . . . . . . . . . 158
Patent Act § 135 . . . . . . . . . . . . . . . . . . 160
2 Priority: Novelty and Statutory Bars . . . . . . . . 160
a Anticipation . . . . . . . . . . . . . . . . . . . . 162
MPEP § 2131 . . . . . . . . . . . . . . . . . . . . 162
Titanium Metals Corp. of America v. Banner . . . 163
b Categories of Prior Art . . . . . . . . . . . . . . 168
1 ”patented” . . . . . . . . . . . . . . . . . . . . . 168
2 ”described in a printed publication” . . . . . . 168
In re Klopfenstein . . . . . . . . . . . . . . . . . . 168
3 ”in public use” . . . . . . . . . . . . . . . . . . . 173
Egbert v. Lippmann . . . . . . . . . . . . . . . . . 173
Mark A. Lemley, Does “Public Use” Mean the
Same Thing It Did Last Year? . . . . . . . . . 176
Lough v. Brunswick Corp . . . . . . . . . . . . . . 178
4 ”on sale” . . . . . . . . . . . . . . . . . . . . . . 180
MPEP §§ 2152.02(d), 2133.03(b) & (c) . . . . . . 180
Helsinn Healthcare S.A. v. Teva Pharmaceuticals
USA, Inc. . . . . . . . . . . . . . . . . . . . . 181
5 ”otherwise available to the public” . . . . . . . 182
c Priority . . . . . . . . . . . . . . . . . . . . . . . 182
1 Old § 102 . . . . . . . . . . . . . . . . . . . . . . 182
Patent Act § 102 (pre-AIA . . . . . . . . . . . . 182
MPEP § 2138 . . . . . . . . . . . . . . . . . . . . 183
Morway v. Bondi . . . . . . . . . . . . . . . . . . 184
2 New § 102 . . . . . . . . . . . . . . . . . . . . . 186
Patent Act § 102 . . . . . . . . . . . . . . . . . . 186
Questions . . . . . . . . . . . . . . . . . . . . . . 187
Pleistocene Park Problem . . . . . . . . . . . . . 187
3 Nonobviousness . . . . . . . . . . . . . . . . . . . . 188
Patent Act § 103 . . . . . . . . . . . . . . . . . . 188
KSR Intern. Co. v. Teleﬂex Inc. . . . . . . . . . . 188
In re Clay . . . . . . . . . . . . . . . . . . . . . . 199
KSR Problem . . . . . . . . . . . . . . . . . . . . 201
D Infringement: Similarity . . . . . . . . . . . . . . . . . . 202
Jeanne C. Fromer, Claiming Intellectual Property 202

N.D. Cal. Model Patent Jury Instructions . . . 203
1 Claim Construction . . . . . . . . . . . . . . . . . . 204
Phillips v. AWH Corp. . . . . . . . . . . . . . . . 204
Thorner v. Sony Computer Entertainment America LLC . . . . . . . . . . . . . . . . . . . . . 209
2 Literal Infringement . . . . . . . . . . . . . . . . . . 215
Angelo Mongiello’s Children, LLC v. Pizza Hut,
Inc. . . . . . . . . . . . . . . . . . . . . . . . 215
Abbo Laboratories v. Sandoz, Inc. . . . . . . . . . 217
3 Doctrine of Equivalents . . . . . . . . . . . . . . . . 218
Freedman Seating Co. v. American Seating Co. . . 218
Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki
Co. . . . . . . . . . . . . . . . . . . . . . . . . 225
Johnson & Johnston Associates v. R.E. Service Co. 227
4 A Hybrid: Means-Plus-Function Claims . . . . . . 228
Kemco Sales, Inc. v. Control Papers Co., Inc. . . . 228
Super Soaker Problem . . . . . . . . . . . . . . 230
E Infringement: Prohibited Conduct . . . . . . . . . . . . 230
Herman v. Youngstown Car Mfg. Co. . . . . . . . 230
1 Direct Infringement . . . . . . . . . . . . . . . . . . 231
Patent Act § 271(a) . . . . . . . . . . . . . . . . . 231
Blazer v. eBay, Inc. . . . . . . . . . . . . . . . . . 231
Telectronics Pacing Systems v. Ventritex, Inc. . . . 232
Akamai Technologies, Inc. v. Limelight Networks,
Inc. . . . . . . . . . . . . . . . . . . . . . . . 232
2 Indirect Infringement . . . . . . . . . . . . . . . . . 233
Patent Act § 271(b)-(c) . . . . . . . . . . . . . . . 233
Limelight Networks, Inc. v. Akamai Technologies,
Inc. . . . . . . . . . . . . . . . . . . . . . . . 233
Global-Tech Appliances, Inc. v. SEB S.A. . . . . . 234
Commil USA, LLC v. Cisco Systems Inc. . . . . . 235
Lucent Technologies, Inc. v. Gateway, Inc. . . . . . 235
Questions . . . . . . . . . . . . . . . . . . . . . . 237
F Defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
1 Invalidity . . . . . . . . . . . . . . . . . . . . . . . . 237
Microsoft Corp. v. i4i Ltd. Partnership . . . . . . 237
2 Exhaustion . . . . . . . . . . . . . . . . . . . . . . . 237
Impression Products, Inc. v. Lexmark International, Inc. . . . . . . . . . . . . . . . . . . . . 237
Quanta Computer, Inc. v. LG Electronics, Inc. . . 242
Aktiebolag v. E.J. Co. . . . . . . . . . . . . . . . . 246
3 Miscellaneous . . . . . . . . . . . . . . . . . . . . . 250
Patent Act §§ 273, 287 . . . . . . . . . . . . . . . 250
Madey v. Duke University . . . . . . . . . . . . . 250

4 Copyright
253
A Subject Ma er . . . . . . . . . . . . . . . . . . . . . . . . 253
Copyright Act § 102(a) . . . . . . . . . . . . . . 253
Feist Publications, Inc. v. Rural Telephone Service
Co. . . . . . . . . . . . . . . . . . . . . . . . . 254
1 Creativity: How Much Is a Modicum? . . . . . . . 254
37 C.F.R. § 202.1(a) . . . . . . . . . . . . . . . . 254
Feist Publications, Inc. v. Rural Telephone Service
Co. . . . . . . . . . . . . . . . . . . . . . . . . 255
Arrows Problem . . . . . . . . . . . . . . . . . . 259
Baseball Card Price Report Problem . . . . . . 259
2 Aesthetic Nondiscrimination . . . . . . . . . . . . . 259
Bleistein v. Donaldson Lithographing Co. . . . . . 259
Copyright Compendium § 310 . . . . . . . . . 261
Mitchell Bros. Film Group v. Cinema Adult Theater262
Belcher v. Tarbox . . . . . . . . . . . . . . . . . . 263
3 Idea and Expression . . . . . . . . . . . . . . . . . . 263
Copyright Act § 102(b) . . . . . . . . . . . . . . 263
Blehm v. Jacobs . . . . . . . . . . . . . . . . . . . 263
Walker v. Time Life Films, Inc. . . . . . . . . . . . 270
Hula Problem . . . . . . . . . . . . . . . . . . . 270
Baker v. Selden . . . . . . . . . . . . . . . . . . . 271
Bikram’s Yoga College of India v. Evolation Yoga . 273
Concrete Machinery Co. v. Classic Lawn Ornaments . . . . . . . . . . . . . . . . . . . . . . 277
Cooking for Kids Problem . . . . . . . . . . . . 277
B Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . 278
Sheldon v. Metro-Goldwyn Pictures Corp. . . . . . 278
1 Authorship . . . . . . . . . . . . . . . . . . . . . . . 278
Burrow-Giles Lithographic Co. v. Sarony . . . . . 278
Monkey Selﬁe Problem . . . . . . . . . . . . . . 280
Copyright Act § 105 . . . . . . . . . . . . . . . . 280
2 Collaborations . . . . . . . . . . . . . . . . . . . . . 280
Copyright Act §§ 201, 202 . . . . . . . . . . . . 280
Thomson v. Larson . . . . . . . . . . . . . . . . . 281
Greene v. Ablon . . . . . . . . . . . . . . . . . . . 286
Community for Creative Non-Violence v. Reid . . 287
Warren v. Fox Family Worldwide, Inc. . . . . . . . 291
Garcia v. Google, Inc. . . . . . . . . . . . . . . . . 292
Blizzard Entertainment, Inc. v. Lilith Games
(Shanghai) Co. . . . . . . . . . . . . . . . . . . 294
3 Derivative Works . . . . . . . . . . . . . . . . . . . 295
Copyright Act § 103 . . . . . . . . . . . . . . . . 295
DC Comics v. Towle . . . . . . . . . . . . . . . . 295
Picke v. Prince . . . . . . . . . . . . . . . . . . . 296

Keeling v. Hars . . . . . . . . . . . . . . . . . . . 298
C Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . 299
1 Formalities Then . . . . . . . . . . . . . . . . . . . . 299
Christopher Sprigman, Reform(aliz)ing Copyright299
Estate of Martin Luther King v. CBS, Inc. . . . . . 300
Estate of Martin Luther King v. CBS, Inc. . . . . . 302
Wildman v. New York Times Co. . . . . . . . . . . 302
2 Formalities Now . . . . . . . . . . . . . . . . . . . . 303
a Fixation . . . . . . . . . . . . . . . . . . . . . . . 303
Copyright Compendium § 305 . . . . . . . . . 303
Stern Electronics, Inc. v. Kaufman . . . . . . . . . 305
Questions . . . . . . . . . . . . . . . . . . . . . . 307
Photoshoot Problem . . . . . . . . . . . . . . . 307
b Registration . . . . . . . . . . . . . . . . . . . . 308
Copyright Compendium § 202 . . . . . . . . . 308
c Deposit . . . . . . . . . . . . . . . . . . . . . . . 309
Copyright Compendium §§ 1502, 1511 . . . . . 309
d Notice . . . . . . . . . . . . . . . . . . . . . . . . 310
Copyright Compendium §§ 2202, 2204 . . . . . 310
3 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . 311
Copyright Act §§ 302, 305 . . . . . . . . . . . . 311
Eldred v. Ashcroft . . . . . . . . . . . . . . . . . . 312
Klinger v. Conan Doyle Estate . . . . . . . . . . . 314
D Infringement: Similarity . . . . . . . . . . . . . . . . . . 316
Sheldon v. Metro-Goldwyn Pictures Corp. . . . . . 316
Nichols v. Universal Pictures Corporation . . . . . 316
Arnstein v. Porter . . . . . . . . . . . . . . . . . 319
Children’s Book Problem . . . . . . . . . . . . . 320
Go lieb Development LLC v. Paramount Pictures . 320
Boisson v. Banian, Ltd. . . . . . . . . . . . . . . . 323
New Yorker Problem . . . . . . . . . . . . . . . 327
E Infringement: Prohibited Conduct . . . . . . . . . . . . 327
1 Proof of Copying . . . . . . . . . . . . . . . . . . . . 327
Three Boys Music Corp. v. Bolton . . . . . . . . . 328
Bee Gees Problem . . . . . . . . . . . . . . . . . 333
2 Direct Infringement . . . . . . . . . . . . . . . . . . 335
Copyright Act § 106 . . . . . . . . . . . . . . . . 335
Capitol Records, LLC v. ReDigi Inc. . . . . . . . . 335
CoStar Group, Inc. v. LoopNet, Inc. . . . . . . . . 338
American Broadcasting v. Aereo, Inc. . . . . . . . 339
Copyright Act § 110 . . . . . . . . . . . . . . . . 343
3 Secondary Liability . . . . . . . . . . . . . . . . . . 344
Fonovisa, Inc. v. Cherry Auction, Inc. . . . . . . . 344
Sony Corp. of America v. Universal City Studios,
Inc. . . . . . . . . . . . . . . . . . . . . . . . 348

Metro-Goldwyn-Mayer Studios Inc. v. Grokster,
Ltd. . . . . . . . . . . . . . . . . . . . . . . . 349
Exclusive Rights Problem . . . . . . . . . . . . 349
4 Paracopyright . . . . . . . . . . . . . . . . . . . . . . 350
Copyright Act § 1201 . . . . . . . . . . . . . . . 350
MDY Industries, LLC. v. Blizzard Entertainment,
Inc. . . . . . . . . . . . . . . . . . . . . . . . 350
Copyright Act § 1202 . . . . . . . . . . . . . . . 355
Murphy v. Millennium Radio Group LLC . . . . . 356
F Defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 357
1 First Sale . . . . . . . . . . . . . . . . . . . . . . . . 357
Copyright Act § 109 . . . . . . . . . . . . . . . . 357
UMG Recordings, Inc. v. Augusto . . . . . . . . . 358
Lee v. A.R.T. Co. . . . . . . . . . . . . . . . . . . 361
Muñoz v. Albuquerque A.R.T. Co. . . . . . . . . . 361
Mirage Editions, Inc. v. Albuquerque A.R.T. Co. . 361
Doan v. American Book Co. . . . . . . . . . . . . 363
Capitol Records, LLC v. ReDigi Inc. . . . . . . . . 363
2 Fair Use . . . . . . . . . . . . . . . . . . . . . . . . . 364
Copyright Act § 107 . . . . . . . . . . . . . . . . 364
Fair Use Checklist . . . . . . . . . . . . . . . . . 365
Harper & Row, Publishers, Inc. v. Nation Enterprises . . . . . . . . . . . . . . . . . . . . . . 366
Campbell v. Acuﬀ-Rose Music, Inc. . . . . . . . . 372
City of Inglewood v. Teixeira . . . . . . . . . . . . 375
Fox Broadcasting Co., Inc. v. Dish Network LLC . 380
Capitol Records, LLC v. ReDigi Inc. . . . . . . . . 383
Chicago HOPE Problem . . . . . . . . . . . . . 384
3 Section 512 . . . . . . . . . . . . . . . . . . . . . . . 385
Copyright Act § 512 . . . . . . . . . . . . . . . . 385
UMG Recordings, Inc. v. Shelter Capital Partners 386
4 Statutory Licenses . . . . . . . . . . . . . . . . . . . 392
WPIX, Inc. v. ivi, Inc. . . . . . . . . . . . . . . . 392
Fox Television Stations, Inc. v. AereoKiller . . . . 394
5 Miscellaneous . . . . . . . . . . . . . . . . . . . . . 395
Copyright Act §§ 108, 121 . . . . . . . . . . . . 395
5 Music

397
Steve Albini, The Problem with Music . . . . . . 397
A Musical Works and Sound Recordings . . . . . . . . . 398
Robert Brauneis, Musical Work Copyright for
the Era of Digital Sound Technology . . . . . . 398
White-Smith Music Publishing Co. v. Apollo Co. . 399
Copyright Oﬃce, F
C
P
₁₉₇₂
P S
R
. . . . 400

Copyright Act §§ 101, 102 . . . . . . . . . . . . 401
Lydia Pallas Loren, Untangling the Web of Music Copyrights . . . . . . . . . . . . . . . . . . 401
Newton v. Diamond . . . . . . . . . . . . . . . . 402
B Reproductions . . . . . . . . . . . . . . . . . . . . . . . . 404
1 Musical Works . . . . . . . . . . . . . . . . . . . . . 404
Copyright Act § 115(a) . . . . . . . . . . . . . . 404
37 C.F.R. pt. 385 . . . . . . . . . . . . . . . . . . 405
Lydia Pallas Loren, Untangling the Web of Music Copyrights . . . . . . . . . . . . . . . . . . 405
Leadsinger, Inc. v. BMG Music Pub. . . . . . . . 406
2 Sound Recordings . . . . . . . . . . . . . . . . . . . 407
Copyright Act § 114(b) . . . . . . . . . . . . . . 407
Bridgeport Music, Inc. v. Dimension Films . . . . 407
VMG Salsoul, LLC v. Ciccone . . . . . . . . . . . 409
C Performances . . . . . . . . . . . . . . . . . . . . . . . . . 411
United States v. American Society of Composers,
Authors, and Publishers . . . . . . . . . . . . . 411
1 Musical Works . . . . . . . . . . . . . . . . . . . . . 412
a Broadcasting and Receiving . . . . . . . . . . . 412
Buck v. Jewell-LaSalle Realty Co. . . . . . . . . . . 412
Copyright Act § 110(5) . . . . . . . . . . . . . . 414
b The Performing Rights Organizations . . . . . 414
Broadcast Music, Inc. v. Columbia Broadcasting
System, Inc. . . . . . . . . . . . . . . . . . . . 414
ASCAP 2010 Radio Station License Agreement . . 416
Range Road Music, Inc. v. East Coast Foods, Inc. . 417
Robert Stigwood Grp., Ltd. v. Sperber . . . . . . . 418
c Miscellaneous . . . . . . . . . . . . . . . . . . . 420
Copyright Act § 116 . . . . . . . . . . . . . . . . 420
History of the Jukebox License Oﬃce . . . . . . . . 420
Copyright Act § 110 . . . . . . . . . . . . . . . . 421
2 Sound Recordings . . . . . . . . . . . . . . . . . . . 421
Copyright Act § 114 . . . . . . . . . . . . . . . . 421
Copyright Oﬃce, C
M
M
. . . . . . . . . . . . . . . . . 421
D State-Law Protection for Pre-1972 Sound Recordings . 424
Copyright Act §§ 301(c) . . . . . . . . . . . . . . 425
Copyright Oﬃce, F
C
P
P -₁₉₇₂ S
R
. . . . 425
Flo & Eddie, Inc. v. Sirius XM Radio, Inc. . . . . 427
Flo & Eddie, Inc. v. Sirius XM Radio, Inc. . . . . 429
UMG Recordings, Inc. v. Escape Media Group, Inc.429
Capitol Records, LLC v. Vimeo, LLC . . . . . . . . 430
E Bootlegging . . . . . . . . . . . . . . . . . . . . . . . . . 432

Metropolitan Opera Assoc. v. Wagner-Nichols
Recorder Corp. . . . . . . . . . . . . . . . . . 432
Copyright Act § 1101(a) . . . . . . . . . . . . . 433
United States v. Martignon . . . . . . . . . . . . 434
Questions . . . . . . . . . . . . . . . . . . . . . . 436
6 Trademark

439
The Trade-Mark Cases . . . . . . . . . . . . . . . 439
A Subject Ma er . . . . . . . . . . . . . . . . . . . . . . . . 440
Lanham Act § 45 (“trademark”) . . . . . . . . . 440
Drug Stamps Problem . . . . . . . . . . . . . . 440
1 Word Marks . . . . . . . . . . . . . . . . . . . . . . 441
Zatarains, Inc. v. Oak Grove Smokehouse, Inc. . . 441
Innovation Ventures, LLC v. N.V.E., Inc. . . . . . 447
TMEP § 1202 . . . . . . . . . . . . . . . . . . . . 448
Elliot v. Google Inc. . . . . . . . . . . . . . . . . . 448
TMEP § 1209.03 . . . . . . . . . . . . . . . . . . 454
2 Designs . . . . . . . . . . . . . . . . . . . . . . . . . 456
Star Industries, Inc. v. Bacardi & Co. Ltd. . . . . . 456
Melting Bad Problem . . . . . . . . . . . . . . . 457
B Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . 458
1 Priority at Common Law . . . . . . . . . . . . . . . 458
Galt House Inc. v. Home Supply Company . . . . 458
United Drug Co. v. Theodore Rectanus Co. . . . . 461
Planetary Motion, Inc. v. Techsplosion, Inc. . . . . 463
Dudley v. HealthSource Chiropractic, Inc. . . . . . 466
CreAgri, Inc. v. USANA Health Sciences, Inc. . . 467
In re Morgan Brown . . . . . . . . . . . . . . . . 469
Bilgewater Bill’s Problem . . . . . . . . . . . . . 470
2 Federal Registration . . . . . . . . . . . . . . . . . . 470
a Registration . . . . . . . . . . . . . . . . . . . . 470
Lanham Act §§ 1(a), 7 . . . . . . . . . . . . . . . 470
Burger King of Florida, Inc. v. Hoots . . . . . . . 471
Bilgewater Bill’s Problem, Redux . . . . . . . . 472
b Intent-to-Use Applications . . . . . . . . . . . 472
Lanham Act § 1(b) . . . . . . . . . . . . . . . . . 472
Kelly Services, Inc. v. Creative Harbor, LLC [I] . . 473
Kelly Services, Inc. v. Creative Harbor, LLC [II] . 477
Bilgewater Bill’s Problem, Re-Redux . . . . . . 478
3 Collaborations . . . . . . . . . . . . . . . . . . . . . 478
Boogie Kings v. Guillory . . . . . . . . . . . . . . 478
New Jersey Truth in Music Act . . . . . . . . . 480
TMEP § 1201.03 . . . . . . . . . . . . . . . . . . 481
Duﬀ Problem . . . . . . . . . . . . . . . . . . . 481
C Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . 482

1 Registration . . . . . . . . . . . . . . . . . . . . . . . 482
Lanham Act § 2(a) . . . . . . . . . . . . . . . . . 482
Lanham Act § 2 . . . . . . . . . . . . . . . . . . 482
Matal v. Tam . . . . . . . . . . . . . . . . . . . . 482
In re Boulevard Entertainment, Inc. . . . . . . . . 483
TMEP §§ 1302–1304 . . . . . . . . . . . . . . . . 483
TMEP §§ 904, 1401, 1402 . . . . . . . . . . . . . 484
TMEP § 906 . . . . . . . . . . . . . . . . . . . . 485
2 Opposition . . . . . . . . . . . . . . . . . . . . . . . 485
Lanham Act §§ 2(d), 12, 13 . . . . . . . . . . . . 485
B&B Hardware, Inc. v. Hargis Industries, Inc. . . 486
B&B Hardware, Inc. v. Hargis Industries, Inc. . . 488
3 Maintenance . . . . . . . . . . . . . . . . . . . . . . 488
Lanham Act §§ 8,9 . . . . . . . . . . . . . . . . . 488
4 Cancellation and Incontestability . . . . . . . . . . 489
Lanham Act §§ 14, 15 . . . . . . . . . . . . . . . 489
Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc. . . . . 490
5 Abandonment . . . . . . . . . . . . . . . . . . . . . 491
Lanham Act § 45 (“abandoned”) . . . . . . . . 491
Procter & Gamble Co. v. Johnson & Johnson Inc. . 491
Trademark Throwback Problem . . . . . . . . . 495
D Infringement: Confusion . . . . . . . . . . . . . . . . . 495
Lanham Act § 32 . . . . . . . . . . . . . . . . . . 496
Virgin Enterprises Ltd. v. Nawab . . . . . . . . . 496
Sally Beauty Co., Inc. v. Beautyco, Inc. . . . . . . 506
Cheat Sheet Problem . . . . . . . . . . . . . . . 507
Boats Problem . . . . . . . . . . . . . . . . . . . 507
E Infringement: Prohibited Conduct . . . . . . . . . . . . 508
1 Threshold Conditions . . . . . . . . . . . . . . . . . 508
Rescuecom Corp. v. Google Inc. . . . . . . . . . . 508
Radiance Foundation, Inc. v. NAACP . . . . . . . 514
2 Theories of Confusion . . . . . . . . . . . . . . . . 518
a Reverse Confusion . . . . . . . . . . . . . . . . 518
Restatement (Third) of Unfair Competition §
20 cmt. f . . . . . . . . . . . . . . . . . . . . 518
b Initial Interest Confusion . . . . . . . . . . . . 519
Grotrian, Helﬀerich, Schul , Th. Steinweg Nachf
v. Steinway & Sons . . . . . . . . . . . . . . . 519
Brookﬁeld Communications v. West Coast Entertainment . . . . . . . . . . . . . . . . . . . . . 519
Hearts on Fire Company, LLC v. Blue Nile, Inc. . . 520
c Post-Sale Confusion . . . . . . . . . . . . . . . 522
General Motors Corp. v. Keystone Automotive Industries, Inc. . . . . . . . . . . . . . . . . . . 522
3 Section 43(a) . . . . . . . . . . . . . . . . . . . . . . 525

Lanham Act § 43(a)(1)(A) . . . . . . . . . . . . . 525
a Unfair Competition . . . . . . . . . . . . . . . 526
Margreth Barre , Finding Trademark Use . . . . 526
William R. Warner & Co. v. Eli Lilly & Co. . . . . 527
Blinded Veterans Association v. Blinded American
Veterans Foundation . . . . . . . . . . . . . . 528
b False Endorsement . . . . . . . . . . . . . . . . 531
Yale Electric Corp. v. Robertson . . . . . . . . . . 531
Conan Properties, Inc. v. Conans Pizza, Inc. . . . 532
International Order of Job’s Daughters v. Lindeburg & Co. . . . . . . . . . . . . . . . . . . . 534
c Failure to A ribute . . . . . . . . . . . . . . . . 537
Dastar Corp. v. Twentieth Century Fox Film Corp 537
4 Dilution . . . . . . . . . . . . . . . . . . . . . . . . . 541
Frank I. Schechter, The Rational Basis of Trademark Protection . . . . . . . . . . . . . . . . . 542
Jeremy N. Sheﬀ, The (Boundedly) Rational Basis
of Trademark Liability . . . . . . . . . . . . . 543
Ty Inc. v. Perryman . . . . . . . . . . . . . . . . 543
Lanham Act § 43(c) . . . . . . . . . . . . . . . . 544
Nike, Inc. v. Nikepal Intern., Inc. . . . . . . . . . 545
Dilution Lightning Round . . . . . . . . . . . . 552
5 Problems . . . . . . . . . . . . . . . . . . . . . . . . 555
Ambush Marketing Problem . . . . . . . . . . . 555
Jack Daniel’s Problem . . . . . . . . . . . . . . . 555
Paper Handbag Problem . . . . . . . . . . . . . 556
6 Secondary Liability . . . . . . . . . . . . . . . . . . 556
Inwood Laboratories, Inc. v. Ives Laboratories, Inc. 556
Philip Morris USA Inc. v. Lee . . . . . . . . . . . 557
F Defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 560
Lanham Act § 43(c)(3) . . . . . . . . . . . . . . . 560
1 Descriptive Fair Use . . . . . . . . . . . . . . . . . . 560
Zatarains, Inc. v. Oak Grove Smokehouse, Inc. . . 560
2 Nominative Fair Use . . . . . . . . . . . . . . . . . . 562
New Kids on the Block v. New America Pub., Inc. . 562
Smith v. Chanel, Inc. . . . . . . . . . . . . . . . . 567
3 Exhaustion . . . . . . . . . . . . . . . . . . . . . . . 571
Champion Spark Plug Co. v. Sanders . . . . . . . 571
Hart v. Amazon.com, Inc. . . . . . . . . . . . . . 573
4 Expressive Use . . . . . . . . . . . . . . . . . . . . . 573
Louis Vui on Malletier v. Haute Diggity Dog . . 573
Louis Vui on Mallatier v. Warner Bros. . . . . . . 583
5 Miscellaneous . . . . . . . . . . . . . . . . . . . . . 589
Lanham Act § 32(2) . . . . . . . . . . . . . . . . 589
Trademark Defenses Lightning Round . . . . . 590

G Other Identiﬁer Registries . . . . . . . . . . . . . . . . . 596
1 Phone Numbers . . . . . . . . . . . . . . . . . . . . 596
Holiday Inns, Inc. v. 800 Reservation, Inc. . . . . 596
Diana Lock, Toll-Free Vanity Telephone Numbers: Structuring a Trademark Registration
and Dispute Se lement Regime . . . . . . . . . 598
Jahn v. 1-800-Flowers.com, Inc. . . . . . . . . . . 599
2 Radio Callsigns . . . . . . . . . . . . . . . . . . . . . 601
In re WSM, Inc. . . . . . . . . . . . . . . . . . . . 601
3 Business Names . . . . . . . . . . . . . . . . . . . . 603
Model Business Corporation Act . . . . . . . . 604
Harvard Business Services v. Coyle . . . . . . . . 605
Cooper v. Goodman . . . . . . . . . . . . . . . . . 606
Friedman v. Rogers . . . . . . . . . . . . . . . . . 606
4 Ticker Symbols . . . . . . . . . . . . . . . . . . . . . 608
Eric Levenson, Investors Buy Up Worthless
Stock After Confusing It for an Actual Successful Company . . . . . . . . . . . . . . . . . . 608
FINRA Uniform Practice Advisory # 39 -13 . . . . 609
Central Parking Corp. v. Park One Inc. . . . . . . 609
Exxon Corp. v. Xoil Energy Resources, Inc. . . . . 610
MDT Corp. v. New York Stock Exchange, Inc. . . 612
Comments of James Angel on General Portability
Filing . . . . . . . . . . . . . . . . . . . . . . 614
5 ISBNs . . . . . . . . . . . . . . . . . . . . . . . . . . 620
ISBN.org, FAQs: General Questions . . . . . . . 620
6 License Plates . . . . . . . . . . . . . . . . . . . . . . 622
Wooley v. Maynard . . . . . . . . . . . . . . . . . 622
Mitchell v. Maryland Motor Vehicle Administration623
Nevada Administrative Code § 482.320 . . . . 628
7 Domain Names . . . . . . . . . . . . . . . . . . . . . 629
TMEP § 1209.03(m) . . . . . . . . . . . . . . . . 629
Anticybersqua ing Consumer Protection Act . 630
Uniform Domain-Name Dispute Resolution
Policy . . . . . . . . . . . . . . . . . . . . . . 632
Philip Morris USA Inc. v. Computer Services, Inc. 635
Bosley Medical Institute v. Kremer . . . . . . . . . 636
8 Online Accounts . . . . . . . . . . . . . . . . . . . . 639
Twi er Rules . . . . . . . . . . . . . . . . . . . . 639
9 Stage Names . . . . . . . . . . . . . . . . . . . . . . 640
Professional Name Policy . . . . . . . . . . . . . . 640
David Fagundes, Talk Derby to Me: Intellectual Property Norms Governing Roller Derby
Pseudonyms . . . . . . . . . . . . . . . . . . . 641

7 Advertising
649
A False Advertising . . . . . . . . . . . . . . . . . . . . . . 650
Lanham Act § 43(a)(1)(B) . . . . . . . . . . . . . 650
1 ”Ownership”: Competitor Standing . . . . . . . . 650
American Washboard Co. v. Saginaw Mfg. Co. . . 651
Ely-Norris Safe Co. v. Mosler Safe Co. . . . . . . . 651
Mosler Safe Co. v. Ely-Norris Safe Co. . . . . . . . 652
Lexmark International, Inc. v. Static Control
Components, Inc. . . . . . . . . . . . . . . . . 652
2 ”Infringement”: Prohibited Conduct . . . . . . . . 656
Greater Houston Transportation Company v.
Uber Technologies, Inc. . . . . . . . . . . . . . 656
Procter & Gamble Co. v. Haugen . . . . . . . . . 658
3 ”Infringement”: Falsity and Materiality . . . . . . 659
Pizza Hut, Inc. v. Papa John’s Intern., Inc. . . . . 659
McNeil-PPC, Inc. v. Pﬁzer Inc. . . . . . . . . . . 673
Satellite TV Problem . . . . . . . . . . . . . . . 675
4 Secondary Liability . . . . . . . . . . . . . . . . . . 676
Duty Free Americas, Inc. v. Estee Lauder Companies, Inc. . . . . . . . . . . . . . . . . . . . . . 676
B Alternatives to Competitor Suits . . . . . . . . . . . . . 680
1 Commercial Disparagement and Related Torts . . 680
HipSaver, Inc. v. Kiel . . . . . . . . . . . . . . . . 680
Aviation Charter, Inc. v. Aviation Research . . . . 681
2 Consumer Suits . . . . . . . . . . . . . . . . . . . . 684
Perrine v. Sega of America, Inc. . . . . . . . . . . 684
3 FTC Enforcement . . . . . . . . . . . . . . . . . . . 687
Federal Trade Commission v. Winsted Hosiery
Company . . . . . . . . . . . . . . . . . . . . 687
Kraft, Inc. v. FTC . . . . . . . . . . . . . . . . . . 689
Le er from Federal Trade Commission to Microsoft Corp. and Starcom MediaVest Group . . 690
C Other Sources of Advertising Law . . . . . . . . . . . . 692
1 Trademark . . . . . . . . . . . . . . . . . . . . . . . 692
Lanham Act §§ 2(e)(1), (f) . . . . . . . . . . . . 693
In re Budge Mfg. Co. . . . . . . . . . . . . . . . . 693
2 Certiﬁcations . . . . . . . . . . . . . . . . . . . . . . 695
Lanham Act § 45 (“certiﬁcation mark”) . . . . . 695
TMEP § 1306 . . . . . . . . . . . . . . . . . . . . 696
Fair Trade USA Farm Workers Standard . . . . . 697
Jeanne C. Fromer, The Unregulated Certiﬁcation
Mark(et) . . . . . . . . . . . . . . . . . . . . . 698
Understanding the FCC Regulations for LowPower, Non-Licensed Transmi er . . . . . . . 699

3

4

5

6
7

Inspection & Grading of Meat and Poultry: What
Are the Diﬀerences? . . . . . . . . . . . . . . . 700
Geographic Indications . . . . . . . . . . . . . . . . 701
Justin Hughes, Champagne, Feta, and Bourbon –
The Spirited Debate About Geographical Indications . . . . . . . . . . . . . . . . . . . . . . 701
TRIPS arts. 22–24 . . . . . . . . . . . . . . . . . 703
Lanham Act § 2 . . . . . . . . . . . . . . . . . . 704
Guantanamera Cigar Co. v. Corporacion Habanos 705
Labeling and Advertising of Distilled Spirits,
27 C.F.R Part 5 . . . . . . . . . . . . . . . . . 709
Textile Products Identiﬁcation Act . . . . . . . 710
Melting Bad Problem, Redux . . . . . . . . . . 711
Regulation . . . . . . . . . . . . . . . . . . . . . . . 711
POM Wonderful LLC v. The Coca-Cola Company 712
Rebecca Tushnet, It Depends on What the Meaning of ”False” is: Falsity and Misleadingness
in Commercial Speech Doctrine . . . . . . . . . 714
Commack Self-Service Kosher Meats, Inc. v. Weiss 716
Levy v. Kosher Overseers Ass’n of America, Inc. . 719
Mandatory Disclosures . . . . . . . . . . . . . . . . 720
American Meat Institute v. Dept. of Agriculture . 720
National Ass’n of Mfrs. v. Securities and Exchange Commission [I] . . . . . . . . . . . . . 722
National Ass’n of Mfrs. v. Securities and Exchange Commission [II] . . . . . . . . . . . . . 723
Self-Regulation . . . . . . . . . . . . . . . . . . . . . 724
Mead Johnson Nutritionals (Enfamil LIPIL) . . . . 724
CARU Press Release . . . . . . . . . . . . . . . . 727
Problems . . . . . . . . . . . . . . . . . . . . . . . . 728
Scavenger Hunt Problem . . . . . . . . . . . . . 728
problems/fortunetelling . . . . . . . . . . . . . 728

8 Personality Rights
729
A Right of Publicity . . . . . . . . . . . . . . . . . . . . . . 729
Eric E. Johnson, Disentangling the Right of Publicity . . . . . . . . . . . . . . . . . . . . . . . 729
1 Ownership . . . . . . . . . . . . . . . . . . . . . . . 730
a Privacy Theories . . . . . . . . . . . . . . . . . 730
Roberson v. Rochester Folding Box Co. . . . . . . 731
New York Civil Rights Law § 51 . . . . . . . . . 733
Pavesich v. New England Life Ins. Co. . . . . . . . 734
O’Brien v. Pabst Sales Co. . . . . . . . . . . . . . 737
b Property Theories . . . . . . . . . . . . . . . . . 738
Haelan Laboratories v. Topps Chewing Gum . . . 738

Joseph R. Grodin, Note: The Right of Publicity:
A Doctrinal Innovation . . . . . . . . . . . . . 740
Fraley v. Facebook, Inc. . . . . . . . . . . . . . . . 741
2 Subject Ma er . . . . . . . . . . . . . . . . . . . . . 743
Midler v. Ford Motor Co. . . . . . . . . . . . . . . 743
White v. Samsung Electronics America, Inc. . . . . 746
White v. Samsung Electronics America, Inc. . . . . 749
3 Procedures . . . . . . . . . . . . . . . . . . . . . . . 751
Hebrew University of Jerusalem v. General Motors 751
4 Infringement: Similarity . . . . . . . . . . . . . . . 756
Hooker v. Columbia Pictures Industries, Inc. . . . 756
5 Infringement: Prohibited Conduct . . . . . . . . . 758
a Direct Infringement . . . . . . . . . . . . . . . 758
Stephano v. News Group Publications, Inc. . . . . 758
Washington v. Brown & Williamson Tobacco Corp. 762
b Secondary Liability . . . . . . . . . . . . . . . . 764
Perfect 10, Inc. v. Cybernet Ventures, Inc. . . . . . 764
6 Defenses . . . . . . . . . . . . . . . . . . . . . . . . . 766
Allison v. Vintage Sports Plaques . . . . . . . . . 766
Rosa and Raymond Parks Institute for Self Development v. Target Corp. . . . . . . . . . . . . . 768
No Doubt v. Activision Publishing, Inc. . . . . . . 772
7 Problems . . . . . . . . . . . . . . . . . . . . . . . . 781
Governator Problem . . . . . . . . . . . . . . . 781
Tony Twist Problem . . . . . . . . . . . . . . . . 782
B Moral Rights . . . . . . . . . . . . . . . . . . . . . . . . . 783
Peter Baldwin, T C
W
: T
C
T
-A
B
. . . 784
Roberta Rosenthal Kwall, Copyright and the
Moral Right: Is an American Marriage Possible?784
Berne Convention art. 6bis . . . . . . . . . . . . 787
Copyright Act § 106A . . . . . . . . . . . . . . . 787
1 Integrity . . . . . . . . . . . . . . . . . . . . . . . . . 789
Massachuse s Museum of Contemporary Art
Foundation v. Büchel . . . . . . . . . . . . . . 789
Philips v. Pembroke Real Estate, Inc. . . . . . . . . 797
Clean Flicks of Colorado, LLC v. Soderbergh . . . . 801
Prepared Statement of Taylor Hackford on Behalf
of the Directors Guild of America . . . . . . . . 802
2 A ribution . . . . . . . . . . . . . . . . . . . . . . . 804
Williams v. UMG Recordings, Inc. . . . . . . . . . 804
Catherine L. Fisk, Credit Where It’s Due: The
Law and Norms of A ribution . . . . . . . . . 805
C People as Trademarks . . . . . . . . . . . . . . . . . . . 807
Lanham Act §§ 2(c), (d)(4) . . . . . . . . . . . . 807

Peaceable Planet, Inc. v. Ty, Inc. . . . . . . . . . . 807
David B. Findlay, Inc. v. Findlay . . . . . . . . . 808
Hebrew University of Jerusalem v. General Motors LLC . . . . . . . . . . . . . . . . . . . . . 812
Brown v. Electronic Arts, Inc. . . . . . . . . . . . 813
Melting Bad Problem, Re-Redux . . . . . . . . 815
D Personal Names . . . . . . . . . . . . . . . . . . . . . . . 815
Laura A. Heymann, Naming, Identity, and
Trademark Law . . . . . . . . . . . . . . . . . 815
Carlton F.W. Larson, Naming Baby: The Constitutional Dimensions of Parental Naming Rights 816
In re Mokiligon . . . . . . . . . . . . . . . . . . . 819
Petition of Variable . . . . . . . . . . . . . . . . . 819
In re Ravitch . . . . . . . . . . . . . . . . . . . . 820
In re Serpentfoot . . . . . . . . . . . . . . . . . . 821
Weingand v. Lorre . . . . . . . . . . . . . . . . . 822
Application of Clark . . . . . . . . . . . . . . . . . 824
In re Name Change of Handley . . . . . . . . . . . 824
In re Porter . . . . . . . . . . . . . . . . . . . . . 825
E Defamation and False Light . . . . . . . . . . . . . . . . 826
Milkovich v. Lorain Journal Co. . . . . . . . . . . 826
Restatement (Second) of Torts § 652E . . . . . . 830
Tyne ex rel. Tyne v. Time Warner Entertainment
Co., L.P. . . . . . . . . . . . . . . . . . . . . . 832
Restatement (Second) of Torts § 564 cmt. d . . 835
Jessica Litman, Information Privacy/Information
Property . . . . . . . . . . . . . . . . . . . . . 836
F Identity Theft . . . . . . . . . . . . . . . . . . . . . . . . 836
Flores-Figueroa v. United States . . . . . . . . . . 836
White v. Ortiz . . . . . . . . . . . . . . . . . . . . 838
G Plagiarism . . . . . . . . . . . . . . . . . . . . . . . . . . 839
Stuart P. Green, Plagiarism, Norms, and the Limits of Theft Law: Some Observations on the
Use of Criminal Sanctions in Enforcing Intellectual Property Rights . . . . . . . . . . . . . 839
Jonathan Band & Ma Schruers, Dastar, A ribution, and Plagiarism . . . . . . . . . . . . . 843
Gregory N. Mandel, Anne A. Fast & Kristina
R. Olson, Intellectual Property Law’s Plagiarism Fallacy . . . . . . . . . . . . . . . . . . . 845
9 Design
847
A Patent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 847
B Copyright . . . . . . . . . . . . . . . . . . . . . . . . . . . 847
1 Useful Articles . . . . . . . . . . . . . . . . . . . . . 848

Mazer v. Stein . . . . . . . . . . . . . . . . . . . 848
Copyright Act § 101 (”useful article”) . . . . . . 849
H.R. Rep No. 94-1476 . . . . . . . . . . . . . . . 850
Star Athletica, LLC v. Varsity Brands, Inc. . . . . 851
Eames Chair Problem . . . . . . . . . . . . . . . 858
Copyright Act § 113 . . . . . . . . . . . . . . . . 858
Report of the Register of Copyrights on the
General Revision of the Copyright Law
(1961) . . . . . . . . . . . . . . . . . . . . . . 859
Model Car Problem . . . . . . . . . . . . . . . . 860
2 Architecture . . . . . . . . . . . . . . . . . . . . . . . 860
Kevin Emerson Collins, Economically Defeasible Rights to Facilitate Information Disclosure:
The Hidden Wisdom of Pre-AWCPA Copyright 860
Copyright Act § 120 . . . . . . . . . . . . . . . . 861
37 C.F.R. § 202.11 . . . . . . . . . . . . . . . . . 862
Intervest Construction., Inc. v. Canterbury Estate
Homes . . . . . . . . . . . . . . . . . . . . . . 862
Zalewski v. Cicero Builder Dev., Inc. . . . . . . . . 863
Embassy Problem . . . . . . . . . . . . . . . . . 866
3 Moral Rights . . . . . . . . . . . . . . . . . . . . . . 866
Cheﬃns v. Stewart . . . . . . . . . . . . . . . . . 866
C Trademark . . . . . . . . . . . . . . . . . . . . . . . . . . 871
Wal-Mart Stores, Inc. v. Samara Brothers, Inc. . . 872
Lanham Act §§ 2(e)(5), 43(a)(3) . . . . . . . . . 875
TrafFix Devices, Inc. v. Marketing Displays, Inc. . 875
In re Florists’ Transworld Delivery, Inc. . . . . . . 880
Maker’s Mark Distillery, Inc. v. Diageo North
America, Inc. . . . . . . . . . . . . . . . . . . 882
Eames Chair Problem, Revisited . . . . . . . . 883
Pez Dispenser Problem . . . . . . . . . . . . . . 883
D Design Patent . . . . . . . . . . . . . . . . . . . . . . . . 883
Patent Act §§ 171, 173 . . . . . . . . . . . . . . . 884
1 Subject Ma er . . . . . . . . . . . . . . . . . . . . . 889
a Articles of Manufacture . . . . . . . . . . . . . 889
In re Hruby . . . . . . . . . . . . . . . . . . . . . 889
In re AlSabah . . . . . . . . . . . . . . . . . . . . 892
b Ornamentality . . . . . . . . . . . . . . . . . . . 894
In re Webb . . . . . . . . . . . . . . . . . . . . . . 894
Rosco, Inc. v. Mirror Lite Co. . . . . . . . . . . . 896
In re Koehring . . . . . . . . . . . . . . . . . . . . 898
2 Procedures . . . . . . . . . . . . . . . . . . . . . . . 899
MPEP § 1503 . . . . . . . . . . . . . . . . . . . . 899
Patent Act § 173 . . . . . . . . . . . . . . . . . . 901
3 Ownership . . . . . . . . . . . . . . . . . . . . . . . 902

a

Novelty . . . . . . . . . . . . . . . . . . . . . . . 902
International Seaway Trading Corp. v. Walgreens
Corp. . . . . . . . . . . . . . . . . . . . . . . . 902
b Obviousness . . . . . . . . . . . . . . . . . . . . 904
MRC Innovations, Inc. v. Hunter Mfg., LLP, . . . 904
4 Infringement: Similarity . . . . . . . . . . . . . . . 908
Egyptian Goddess, Inc. v. Swisa, Inc. . . . . . . . 909
Wing Shing Products (BVI) Co. v. Sunbeam Products, Inc. . . . . . . . . . . . . . . . . . . . . . 913
OddzOn Products, Inc. v. Just Toys, Inc. . . . . . 918
L.A. Gear, Inc. v. Thom McAn Shoe Co. . . . . . . 919
5 Infringement: Prohibited Conduct . . . . . . . . . 919
Patent Act § 289 . . . . . . . . . . . . . . . . . . 919
6 Defenses . . . . . . . . . . . . . . . . . . . . . . . . . 920
Jazz Photo Corp. v. International Trade Com’n . . 920
Ralph D. Cliﬀord & Richard J. Pel -Steele, The
Constitutionality of Design Patents . . . . . . 921
Eames Chair Problem, Re-revisited . . . . . . . 923
E Sui Generis Regimes . . . . . . . . . . . . . . . . . . . . 923
1 Semiconductor Masks . . . . . . . . . . . . . . . . . 923
Pamela Samuelson, Creating a New Kind of Intellectual Property: Applying the Lessons of
the Chip Law to Computer Programs . . . . . . 923
Kal Raustiala & Christopher Sprigman, The
Piracy Paradox, Innovation and Intellectual
Property in Fashion Design . . . . . . . . . . . 925
Altera Corp. v. Clear Logic, Inc. . . . . . . . . . . 926
2 Vessel Hulls . . . . . . . . . . . . . . . . . . . . . . . 928
Bonito Boats, Inc. v. Thunder Craft Boats, Inc. . . 928
Copyright Act ch. 13 . . . . . . . . . . . . . . . 930
Maverick Boat Co., Inc. v. American Marine
Holdings, Inc. . . . . . . . . . . . . . . . . . . 933
F Fashion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 936
1 Copyright . . . . . . . . . . . . . . . . . . . . . . . . 936
Jack Adelman, Inc. v. Sonners & Gordon, Inc. . . . 936
Cheney Bros. v. Doris Silk Corporation . . . . . . 937
Fashion Originators’ Guild of America v. Federal
Trade Commission . . . . . . . . . . . . . . . 938
Peter Pan Fabrics, Inc. v. Brenda Fabrics, Inc. . . . 941
2 Trademark . . . . . . . . . . . . . . . . . . . . . . . 942
Christian Louboutin v. Yves Saint Laurent America942
Christian Louboutin v. Yves Saint Laurent America949
3 Design Patent . . . . . . . . . . . . . . . . . . . . . . 952

Kal Raustiala & Christopher Sprigman, The
Piracy Paradox, Innovation and Intellectual
Property in Fashion Design . . . . . . . . . . . 952
4 Sui Generis Protection? . . . . . . . . . . . . . . . . 953
James Surowiecki, The Piracy Paradox . . . . . . 953
C. Sco Hemphill & Jeannie Suk, The Law, Culture, and Economics of Fashion . . . . . . . . . 954
Innovative Design Protection Act of 2012 . . . 956
10 Software
963
A Trade Secret . . . . . . . . . . . . . . . . . . . . . . . . . 963
Barr-Mullin, Inc. v. Browning . . . . . . . . . . . 964
Silvaco Data Systems v. Intel Corp. . . . . . . . . 964
B Patent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 968
1 Subject Ma er . . . . . . . . . . . . . . . . . . . . . 968
a Then . . . . . . . . . . . . . . . . . . . . . . . . 968
In re Bernhart . . . . . . . . . . . . . . . . . . . . 968
In re Alappat . . . . . . . . . . . . . . . . . . . . 969
State Street Bank & Trust Co. v. Signature Financial Group . . . . . . . . . . . . . . . . . . . . 972
b Now . . . . . . . . . . . . . . . . . . . . . . . . . 973
Alice Corp. v. CLS Bank Int’l . . . . . . . . . . . 973
McRO, Inc. v. Bandai Namco Games America Inc. 979
Synopsys, Inc. v. Mentor Graphics Corp. . . . . . 984
2 Procedures . . . . . . . . . . . . . . . . . . . . . . . 989
Williamson v. Citrix Online, LLC . . . . . . . . . 989
Mark A. Lemley, Software Patents and the Return of Functional Claiming . . . . . . . . . . 991
3 Obviousness . . . . . . . . . . . . . . . . . . . . . . 992
Apple Inc. v. Samsung Electronics Co., Ltd. . . . . 992
C Copyright . . . . . . . . . . . . . . . . . . . . . . . . . . . 997
1 Subject Ma er . . . . . . . . . . . . . . . . . . . . . 997
Apple Computer, Inc. v. Franklin Computer Corp. 998
Adobe Systems Inc. v. Southern Software Inc. . . . 1000
Whelan Associates, Inc. v. Jaslow Dental Laboratory, Inc. . . . . . . . . . . . . . . . . . . . . . 1001
Computer Associates Intern., Inc. v. Altai, Inc. . . 1003
Oracle America, Inc. v. Google Inc. . . . . . . . . 1007
Oracle America, Inc. v. Google Inc. . . . . . . . . 1014
Tetris Problem . . . . . . . . . . . . . . . . . . . 1020
2 Defenses . . . . . . . . . . . . . . . . . . . . . . . . .1020
Copyright Act § 117 . . . . . . . . . . . . . . . . 1020
Sega Enterprises Ltd. v. Accolade, Inc. . . . . . . . 1021
Universal City Studios, Inc. v. Corley . . . . . . . 1023
D Trademark . . . . . . . . . . . . . . . . . . . . . . . . . .1026

Apple Inc. v. Samsung Electronics Co., Ltd. . . . . 1026
E Design Patent . . . . . . . . . . . . . . . . . . . . . . . .1027
Michael Risch, Functionality and Graphical User
Interface Design Patents . . . . . . . . . . . . 1027
Smartphone Problem . . . . . . . . . . . . . . . 1029
11 Biotechnology
1031
A Patent . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1031
1 Subject Ma er . . . . . . . . . . . . . . . . . . . . .1031
Association for Molecular Pathology v. Myriad
Genetics, Inc. . . . . . . . . . . . . . . . . . . 1031
In re Roslin Institute (Edinburgh) . . . . . . . . . 1033
Ariosa Diagnostics, Inc. v. Sequenom, Inc. . . . . 1036
DNA Copyright Problem . . . . . . . . . . . . . 1039
2 Ownership . . . . . . . . . . . . . . . . . . . . . . .1039
Schering Corp. v. Geneva Pharmaceuticals . . . . 1039
Eli Lilly and Co. v. Zenith Goldline Pharm. Inc. . 1041
3 Infringement: Similarity . . . . . . . . . . . . . . .1042
Boehringer Ingelheim Vetmedica, Inc. v. ScheringPlough Corp. . . . . . . . . . . . . . . . . . . 1042
4 Defenses . . . . . . . . . . . . . . . . . . . . . . . . .1045
Bowman v. Monsanto Co. . . . . . . . . . . . . . 1045
B Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1050
1 Plant Patents . . . . . . . . . . . . . . . . . . . . . .1050
Imazio Nursery, Inc. v. Dania Greenhouses . . . . 1050
Mark D. Janis & Jay P. Kesan, U.S. Plant Variety
Protection: Sound and Fury ... ? . . . . . . . . 1051
Patent Act §§ 161–163 . . . . . . . . . . . . . . . 1052
37 CFR § 1.164 . . . . . . . . . . . . . . . . . . . 1052
a Subject Ma er . . . . . . . . . . . . . . . . . . .1058
In re Arzberger . . . . . . . . . . . . . . . . . . . 1058
b Procedures . . . . . . . . . . . . . . . . . . . . .1059
In re Greer . . . . . . . . . . . . . . . . . . . . . . 1059
c Ownership . . . . . . . . . . . . . . . . . . . . .1062
Ex parte Moore . . . . . . . . . . . . . . . . . . . 1062
Dunn v. Ragin v. Carlile . . . . . . . . . . . . . . 1063
In re LeGrice . . . . . . . . . . . . . . . . . . . . 1066
Yoder Bros., Inc. v. California-Florida Plant Corp. 1068
d Infringement . . . . . . . . . . . . . . . . . . .1070
Imazio Nursery, Inc. v. Dania Greenhouses . . . . 1070
Armstrong Nurseries, Inc. v. Smith . . . . . . . . 1074
2 Plant Variety Protection Act . . . . . . . . . . . . .1075
S. Rep. 91-1246 (1970) . . . . . . . . . . . . . . . 1075
a Subject Ma er . . . . . . . . . . . . . . . . . . .1088
PVPA § 42 . . . . . . . . . . . . . . . . . . . . . 1088

b Procedures . . . . . . . . . . . . . . . . . . . . .1088
PVPA § 52 . . . . . . . . . . . . . . . . . . . . . 1088
Genecorp, Inc. v. Progeny Advanced Genetics, Inc. 1089
PVPA § 83 . . . . . . . . . . . . . . . . . . . . . 1091
c Ownership . . . . . . . . . . . . . . . . . . . . .1092
PVPA § 42 . . . . . . . . . . . . . . . . . . . . . 1092
d Defenses . . . . . . . . . . . . . . . . . . . . . .1094
PVPA §§ 44, 112–115 . . . . . . . . . . . . . . . 1094
Jim Chen, The Parable of the Seeds . . . . . . . . 1095
e Infringement . . . . . . . . . . . . . . . . . . .1100
PVPA § 111 . . . . . . . . . . . . . . . . . . . . . 1100
Delta and Pine Land Co. v. Sinkers Corp. . . . . . 1102
3 The Punchline . . . . . . . . . . . . . . . . . . . . .1112
JEM Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc. . . . . . . . . . . . . . . . . . . . . 1112
C Drug Approval . . . . . . . . . . . . . . . . . . . . . . . .1114
1 Patent Issues . . . . . . . . . . . . . . . . . . . . . .1115
Kara B. Swanson, Food and Drug Law as Intellectual Property Law . . . . . . . . . . . . . . 1115
Merck KGaA v. Integra Lifesciences I, Ltd. . . . . 1118
Eli Lilly & Co. v. Medtronic, Inc. . . . . . . . . . 1118
2 Hatch-Waxman . . . . . . . . . . . . . . . . . . . . .1120
United States v. Generix Drug Corp. . . . . . . . 1121
FTC v. Actavis, Inc. . . . . . . . . . . . . . . . . 1122
Actavis Elizabeth LLC v. U.S. Food and Drug Admin. . . . . . . . . . . . . . . . . . . . . . . . 1122
Erika Lie an, The Myths of Data Exclusivity . . 1125
Caraco Pharmaceutical Labs v. Novo Nordisk . . . 1126
FTC v. Actavis, Inc. . . . . . . . . . . . . . . . . 1130
3 Orphan Drugs . . . . . . . . . . . . . . . . . . . . .1133
Genentech, Inc. v. Bowen . . . . . . . . . . . . . . 1133
Sigma-Tau Pharmaceuticals, Inc. v. Schwe
. . . 1136
4 Biologics . . . . . . . . . . . . . . . . . . . . . . . . .1137
Janet Freilich, Patent Infringement in the Context of Follow-On Biologics . . . . . . . . . . . 1137
D Drug Marketing . . . . . . . . . . . . . . . . . . . . . . .1139
1 Names . . . . . . . . . . . . . . . . . . . . . . . . . .1139
Note on Drug Naming . . . . . . . . . . . . . . 1139
S. Rep. 87-448 (1961) . . . . . . . . . . . . . . . 1144
21 C.F.R. § 201.10 . . . . . . . . . . . . . . . . . 1145
Kos Pharmaceuticals, Inc. v. Andrx Corp. . . . . . 1145
666 Problem . . . . . . . . . . . . . . . . . . . . 1148
2 Design . . . . . . . . . . . . . . . . . . . . . . . . . .1149
Shire US Inc. v. Barr Laboratories, Inc. . . . . . . 1149

5"#-& 0' $0/5&/54
Jeremy A. Greene & Aaron S. Kesselheim,
Why Do the Same Drugs Look Diﬀerent? Pills,
Trade Dress, and Public Health . . . . . . . . . 1152
3 Labeling and Advertising . . . . . . . . . . . . . . .1154
Consumer-Directed Broadcast Advertisements:
Guidance for Industry . . . . . . . . . . . . . . 1154
Le er from Robert Dean, Division Director,
OPDP, FDA, to Eric Gervais . . . . . . . . . . 1156
United States v. Caronia . . . . . . . . . . . . . . 1158
Wyeth v. Levine . . . . . . . . . . . . . . . . . . . 1161
PLIVA, Inc. v. Mensing . . . . . . . . . . . . . . 1162
SmithKline Beecham v. Watson Pharmaceuticals . 1163
Bizarro World Redux Problem . . . . . . . . . . 1167

Appendices

1169

Table of Cases

1170

Table of Problems

1194

*OUSPEVDUJPO
8IZ 5IJT #PPL
This book takes its subtitle from Sheldon Axler’s Linear Algebra Done
Right and its inspiration from a line by the great mathematician Emil
Artin: ”It is my experience that proofs involving matrices can be
shortened by 50% if one throws the matrices out.” Matrices are numerical representations of mathematical operations; proofs involving
them tend to look something like:
⎡

a1,1 · · ·
⎢ ..
⎢ .
⎢
c ⎢ aj,1 · · ·
⎢ .
⎣ ..
am,1 · · ·

a1,i
..
.

···

aj,i
..
.

···

am,i · · ·

⎤ ⎡
a1,n
ca1,1 · · ·
.. ⎥ ⎢ ..
. ⎥ ⎢ .
⎥ ⎢
aj,n ⎥ = ⎢ caj,1 · · ·
⎢ .
.. ⎥
. ⎦ ⎣ ..
am,n
cam,1 · · ·

ca1,i
..
.

···

caj,i
..
.

···

cam,i · · ·

⎤
ca1,n
.. ⎥
. ⎥
⎥
caj,n ⎥
.. ⎥
. ⎦
cam,n

Axler’s book throws most of the matrices out, and as a result, is one
of the clearest college mathematics textbooks ever wri en. There are
matrices and proofs using them, but they are secondary to the algebraic explanations and proofs, which tend to look more like:
cT (v) = T (cv)
This book is my a empt to take intellectual property law and throw
the matrices out. The matrices aren’t literal matrices, of course, or
IP would be much less fun and interesting to study, to teach, and to
practice. Instead, the matrices consist of built-up expectations about
how the subject is structured, and how it should be taught. But many
of these traditions have nothing but tradtion to support them. Cast
them aside, and what emerges is simpler, richer, and more elegant.

$PWFSBHF
The ﬁrst tradition to is the assumption that ”intellectual property” primarily means patent, copyright, and trademark. These three ﬁelds

*U QSPCBCMZ EPFT OPU IFMQ UIBU UIF #JH
5ISFF BSF BMM GFEFSBM SFHJNFT MFBEJOH
TUVEFOUT UP OFHMFDU UIF JNQPSUBODF PG
TUBUF MBX

5"#-& 0' $0/5&/54

dominate most IP courses and most casebooks. Trade secret law usually makes a walk-on appearance, as does the right of publicity, but
that is typically it. Design patents, false advertising, and idea protection may be mentioned as afterthoughts. I don’t mean to denigrate
patent, copyright, and trademark. They are important, and an IP
course that omi ed one of them would be seriously deﬁcient. But
they are not so much more important than other ﬁelds of IP that they
should push those other ﬁelds out of the picture.
For one thing, these other ﬁelds are important in regular ”IP” practice: just ask any observer of the smartphone design-patent wars, any
employment lawyer negotiating an NDA, or any business lawyer reviewing ad copy for substantiation. A professor who lets students
leave the IP survey unaware these bodies of law even exist commits
academic malpractice.
If that weren’t enough, these other ﬁelds help illuminate the traditional ones. Trademark law’s treatment of descriptive and misdescriptive marks looks very diﬀerent after a trip through falseadvertising law: the diﬀerence between an arbitrary mark and a misdescriptive one is whether consumers are in on the joke. Recognizing
that the reverse engineering privilege in trade secret law is a form of
exhaustion helps clarify exhaustion in patent law.
Thus, this book casts an extremely broad net when including IP
regimes. In my view, intellectual property consists of any private
right to prevent other people from using information. This encompasses contracts for the use of information, trade secrets, copyrights,
trademarks, unfair competition, parts of false advertising law, geographic indications, rights of publicity, moral rights, design patents,
and a miscellany of federal and state regimes like boat-hull protections and common-law misappropriation. They are all given serious
a ention.
Having cast a wide net to gather in IP regimes, the book then casts
its net widely again within each system. My working mo o when
debating what to include was no unpleasant surprises. It is ﬁne to gesture at something big and messy whose details are not ﬁlled in in the
slightest – like the compulsory copyright license for satellite broadcasting, whose rules ﬁll dozens of pages in sections 119 and 122 of title
17. But it is not ﬁne to pass by something that comes up regularly, is
important when it does, and whose existence is not easily predictable
–like the exemption in section 110 for many in-person noncommercial
public performances. Thus, the book is unusually detailed in covering theories of liability and major defenses: examples include the
DMCA’s prohibition on removing copyright management information, the unfair-competition cause of action for deliberate passing oﬀ
even in the absence of trademark rights, and the limitation of patent
remedies against medical practitioners.

5"#-& 0' $0/5&/54

And ﬁnally, the book casts its net widely a third time to sweep
in bodies of law that are not traditionally regarded as ”intellectual
property” at all, but have something to teach about how intellectual
property law works. Sometimes, this is because they provide useful points of comparison: FOIA and classiﬁcation eﬀectively create a
body of secrecy law for the government, and seeing how they work
clariﬁes what is distinctive about trade secret law. Sometimes, it is
because they provide the backdrop against which ”intellectual property” law plays out: pharmaceutical patent law is unintelligible without a grounding in the drug-approval process. And sometimes, it
is because they really are intellectual property law: Actors Equity
gives out stage names on a ﬁrst-come ﬁrst-served basis, and while
the resulting rights are narrow and privately created, they are absolute within the relevant domain. Thus, the book includes such unusual topics as FOIA, privacy torts, drug approval and labeling, state
business name registries, country-of-origin labeling statutes, the law
of personal name changes, and the BBB’s advertising self-regulatory
programs.
Given this wide range of subjects, the book does not cover each of
them in equal depth. Instead, I have tried to do two things. On the
one hand, I try to give a good conceptual sense for how each body
of IP law thinks about the world. Students should know that copyright is built around originality and similarity; that trademark is built
around distinctiveness, priority, and confusion; that advertising is
built around truth; and so on. The cases and materials are selected
and arranged to build this intuition, even at the expense of detail. The
point is to leave readers in a position where they can make plausible
interpolations in the parts of the subjects they have not seen. A good
ﬁrst guess and good research skills will take you surprisingly far.
On the other hand, the book is relentlessly comparative. I don’t
mean that it’s internationally comparative, although some sections
do sketch the major distinctions between the U.S. approach and other
countries’ (e.g. on geographic indications and moral rights). Instead, it draws every possible comparison within American IP law.
It does this at a macro level, emphasizing the similarities and the
diﬀerences between the basic principles undergirding each body of
IP law. For example, patent and copyright think similarly about incentives, while trademark and false advertising think similarly about
consumers. And it does this at a micro level, se ing up similar doctrines across IP ﬁelds to compare and contrast. For example, trade
secret law shares with copyright law the requirement that the defendant must have copied from the plaintiﬀ to infringe, which plays out in
their similarly permissive a itude in allowing multiple independent
parties to lay claim to the same information simultaneously. They
stand in sharp contrast to patent and trademark, where subsequent

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independent creation can only mitigate the consequences of infringement, rather than negating it entirely.

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To make the internal logic of each IP ﬁeld clearer, and to facilitate
comparisons between them, I have imposed a rigorous structure on
them. The two basic issues for any form of IP are protection and
infringement; as far as possible, I try to keep them distinct. I insist
on the division even for areas, like rights of publicity, where it is not
conventionally made. But whether the defendants are trading on the
plaintiﬀ’s identity is a diﬀerent question than which aspects of that
identity are protectable at all, and separating them clariﬁes what is at
stake in each.
I further divide protection into subject ma er, ownership, and
procedures, or, roughly ”what?”, ”who?” and ”how?” In copyright,
for example, subject ma er includes Feist’s famous ”modicum of creativity” and the idea/expression dichotomy; ownership includes joint
works, works made for hire, and derivative works; and procedures
include term, registration, deposit, notice, and ﬁxation. Yes, ﬁxation.
It isn’t a question of what information is copyrightable so much as
what one must do to obtain a copyright in that information (answer:
not much). This arrangement is a bit unconventional, but I think it’s
clearer. I tend to break up subject ma er doctrines into thresholds,
which ask whether something is [creative, secret, distinctive, etc.]
enough for an IP ﬁeld to care about, and boundary conditions like
functionality, which declare something the wrong kind of thing for
an IP ﬁeld. Ownership rules subdivide into rules to allocate ownership with collaborations, rules to assign priority among competitors,
and rules for derivative creation that builds on others’ information.
Procedures are too diverse to taxonomize systematically, although
registration and notice are common that I have tried to ﬂag them
wherever they appear, and their absence wherever they don’t.
I subdivide infringement into similarity, prohibited conduct, and
defenses. The distinction between the ﬁrst two is all-important. Similarity is a test of the relationship between the plaintiﬀ’s information
and the defendant’s; prohibited conduct deals with what the defendant did with that information. Similarity is the domain of claim construction and the every-element rule, of substantial similarity, and
of the likelihood of confusion. Prohibited conduct is the domain
of ”makes, uses, oﬀers to sell, or sells” and of the exclusive rights.
It further breaks down into threshold conditions like Lanham Act
§ 43(a)(1)(B)’s ”in commercial advertising or promotion,” into intent
requirements (or their absence), (sometimes) into proof of copying
from the plaintiﬀ, into the speciﬁc enumerated or unenumerated the-

5"#-& 0' $0/5&/54

ories of direct infringement, and into various secondary liability doctrines. Here is where I have found the comparative method most useful; it has forced me to ﬁnd and present cases on topics like secondary
liability for right of publicity violations and on proving copying in
trade secret misappropriation. They exist, and they display interesting and revealing variations from their more familiar cousins.
Some IP defenses are idiosyncratic, like the compulsory mechanical license in copyright or the vestigial experimental use defense in
patent. But others display systematic consistency across almost all of
IP. The exhaustion defenses, which deﬁne the interface between intellectual property rights in information and personal property rights in
tangible things, are essentially universal – and especially revealing,
because while every IP ﬁeld embraces the exhaustion principle, each
IP ﬁeld puts characteristically diﬀerent limits on it. Another cluster
of common defenses protect expressive uses. Sometimes these limits are internal to the doctrinal logic of an IP ﬁeld; sometimes they
appear as separate defenses; sometimes they are explicitly stated as
First Amendment requirements. Again, both the similarities and the
diﬀerences are instructive.

0SHBOJ[BUJPO
There are three natural ways to organize material on intellectual property. One could – like most casebooks – present it by ﬁeld: trade secret, patent, copyright, trademark, etc., in each case starting with protectability and moving through infringement. One could present it
by subject ma er: literature, music, characters, industrial design, software, etc., in each case discussing all of the relevant IP ﬁelds. Or one
could present it by doctrine: subject ma er, ownership, procedure,
similarity, etc., in each case moving through relevant IP ﬁelds. I have
used all three.
Large parts of the book are organized by IP ﬁeld: there are chapters (or major sections) devoted to trade secret, patent, copyright,
trademark, false advertising, right of publicity, and design patents.
Each of them takes a single IP ﬁeld and marches through the sexpartite taxonomy of topics. The order varies a bit (the complexity
and centrality of patent prosecution means it makes sense to address
patent procedures before patent ownership), sometimes the divisions
aren’t worth insisting on (in trademark, similarity tests are just one
factor in multiple likelihood of confusion tests), and some areas omit
one or more entirely (there are no meaningful procedural prerequisites to protection against false advertising). But these sections all
more or less stick to this structure. These six topics – subject ma er,
ownership, procedures, similarity, prohibited conduct, and defenses
– suﬃce to give a reasonably clear account of how an IP ﬁeld looks at

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the world.
Mixed in with these in-depth treatments are quicker hits on related ﬁelds of IP and IP-adjacent law. The general rule is that they
are presented in connection with the major IP ﬁelds they shed light
on. Thus intrusion on seclusion, FOIA, and classiﬁcation show up
in the trade secret chapter; phone numbers, radio callsigns, and business name registries in the trademark chapter; FTC and consumer
false advertising suits in the advertising chapter; and so on.
Conversely, I have also distributed out subject-ma er-speciﬁc
parts of traditional IP ﬁelds to chapters dedicated to IP ﬁelds that
more squarely address those subject ma ers. This ﬁrst happens in
the advertising chapter; I deliberately hold over the material on certiﬁcation marks and deceptive marks from the trademark chapter so
that I can juxtapose it with the false advertising materials. Materiality
in the context of Lanham Act § 2(a) makes more sense once readers
have seen it at work in § 43(a)(1)(B) cases. I pull similar stunts by
pu ing moral rights in the ”personality rights” chapter rather than
the copyright chapter; geographically descriptive and misdescriptive
marks in the geographic indications chapter; useful articles, architectural works, and functional marks in the design chapter alongside
design patents.
The extreme examples of this approach are the chapters devoted
to software and to biotechnology, both of which are immensely important and can only properly be understood by considering how
diﬀerent IP ﬁelds interact. Software requires consideration of trade
secret, copyright, and patent; biotechnology law involves patent and
trademark, but also discussion of the FDA drug approval process and
regulation of drug marketing and labeling. (Again, my broad understanding of what is relevant to IP means that I have no compunction
against treating these regulatory regimes as establishing de facto IP
regimes.)
The rest of the book consists of chapters devoted to cross-cu ing
topics where there is more insight to be gained from se ing out general principles and then seeing how diﬀerent IP ﬁelds play out variations on the theme: litigation, remedies, transactions, and international IP. One could include these issues within each substantive
chapter, but for the most part, I ﬁnd it clearer just to save these issues for dedicated chapters.

8IBU 5IJT #PPL *T /PU
This is, as I said, a book about the structure of IP law. Traditional
casebooks try to do many other things, and I want to be clear on the
sacriﬁes I have made.
This is not a book on learning to think like a lawyer. I have made

5"#-& 0' $0/5&/54

no concessions to making cases ”teachable” in a standard Socratic
sense. I have cut out procedural postures. I have cut out reasoning from precedent. I have cut out dissents, even brilliant and wellargued ones. I have cut judges’ names, and sometimes cut parties’
names. In extreme cases, I have cut out all the facts, or all of the reasoning supporting a holding.
Part of this is a sense that traditional case reading and analysis –
valuable skills that they are – are overvalued in most law schools. Part
of it also is the freedom that comes from teaching IP to LLM students,
for whom ”thinking like a lawyer” is not something to be learned but
one of the prerequisites for admission. And part of it is the critical
distance that I have gained on the enterprise of legal education since
moving to an institution where most of my colleagues are not law
professors. Things that once seemed natural to me are strange now.
This is also not a book on IP policy. My discussions of the policy
rationales for IP ﬁelds are exceedingly brief. I have cut substantial
chunks of the policy discussions from the cases I excerpt. In some
cases, the policy arguments are essential to understanding the holdings and the concepts they rely on. But if this book is at all useful for
teeing up discussions of IP policy, it is entirely by accident.

$BTFT BOE .BUFSJBMT
The overriding principle for my selection of cases and other materials was clarity. Accordingly, I have tried hard to ﬁnd cases that are
either broadly representative of the doctrinal point they stand for or
that state it succinctly. In my years of teaching the IP survey I came
to loathe the memorable but unusual cases, because students invariably remembered them for the wrong points. I have tried to avoid
including cases that go oﬀ on tangents that haven’t been picked up
on; they give an incorrect impression of where the action is.
Where there is a genuine doctrinal split in contemporary caselaw,
I have tried to make this clear in the materials I have chosen: either by
pairing cases on either side of an issue, by picking a case with a strong
and well-taken dissent, or by picking a case that respectfully presents
the other side of the debate before disagreeing with it. Where there is
not a major split in the caselaw, I have tried hard to present the false
impression of one.
I have also tried to strike a balance between teachability and authority. My sense is that most casebooks tend too much towards respectful but excessive quotation from Supreme Court opinions. But
for various institutional reasons – including the Supreme Court’s rariﬁed docket, its emphasis on following its own precedents to the exclusion of ”inferior” courts’ wisdom, its frequent unwillingness to resolve the actual case before it, and some Justices’ regre able writerly

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habits – Supreme Court opinions are often terrible teaching cases. I
have responded by excerpting these cases with extreme brevity, or
by presenting them in reﬂection – as other courts apply the Supreme
Court’s holdings to crisper fact pa erns.

&EJUJOH
My editorial technique is borrowed from Sweeney Todd: extensive
and shocking cuts. These are pedagogical materials, not a legal brief.
I have not put words in anyone else’s mouth, but I have been unconcerned with the usual editorial apparatus of ellipses and brackets. I
drop words from sentences, sentences from paragraphs, paragraphs
from opinions – all with no indication that anything is gone. I also
reorder paragraphs and sometimes sentences as needed to improve
the readability of a passage. My goal is to make it easy for the reader.
If it ma ers to you what the original said, consult the original.
Similarly, I have been ruthless in pruning citations. Editorial conventions that make sense in briefs and opinions are not appropriate
for teaching materials. Generally, I have kept citations only when
the case being cited is important in its own right or when the citation
is impossible to remove without great awkwardness. I have had no
qualms about a ributing to courts things they quoted other courts as
saying.
I also discarded the tradition that a case should be presented as
a case. There are cases with wonderful discursive passages – like
Judge Posner’s musings on the protectability of names as trademarks
in Peaceable Planet – embedded in larger messes. My edit of peaceableplanet keeps this discussion of name marks and discards everything
else, including the facts and holding. There are also cases that are
important for their holdings, like Grokster and AWH, but which take
their damn time ge ing there. I kept the holdings and cut everything
else.
Sometimes, the best way to make a point isn’t with a case at all.
The federal government has published outstanding guides to patent,
copyright, and trademark law: the MPEP, Compendium, and TMEP,
respectively. I have freely drawn from them, along with Restatement
sections, regulations, and law-review articles whenever I thought
that they covered the ground be er than the cases I had to work with.
For rarely-litigated ma ers like the deposit requirement, these secondary materials are far and away the best option. I have wri en
notes and introductory materials where necessary, but I tried to keep
them focused on bringing out structural issues, rather than saying
again what others have already said be er.

5"#-& 0' $0/5&/54

'PSNBUUJOH
Another crucial early decision was to format the text with a twoand-three-quarter-inch outer margin, placing notes and illustrations
in the margin alongside the text they pertain to. The design is not
original; I had seen it used very eﬀectively in Donald Knuth et al’s
Concrete Mathematics, Robert Bringhurst’s The Elements of Typographic
Style, and Edward Tufte’s books on information design. From my
point of view, it solved three problems simultaneously:
First, the narrower text column is typographically a ractive. With
such a larger outer margin, the resulting column is ﬁve inches wide,
which makes for lines that have a comfortable font size and a comfortable length. Extended reading is easier and the page looks nice.
Second, margins are for marginalia. A note in the margin is less
intrusive than a box cut out of the text and easier to glance back and
forth to than a footnote. The result is that I have been free to annotate
the text liberally and a li le Talmudically. I have extensively decorated the margin with illustrations from the cases being excerpted. I
have also included quotations and case summaries that might have
gone in the notes after a case in a traditional casebook, or been presented as squib cases. Having the margin available lets me include
them precisely where they are relevant. Sometimes I include see also
citations to interesting articles. And occasionally I pop in with a leading question or just a straight-up joke.
And third, the margin enables me to remove citations and other
unnecessary apparatus from the body of cases themselves. For the
most part, cases are presented with only the name of the case in the
main text: the citation is evacuated to the margin. This is another
way of clarifying of the cases themselves; citations are a remarkable
hindrance to readability. By pu ing citations alongside the text (as
in some law reviews’ online supplements), I believe I have resolved
the Garner-Posner debate over whether citations belong in text or in
footnotes. The best answer is neither: they belong in the margin.

%PDVNFOU 1SPEVDUJPO
I used the XeLaTeX document preparation system to prepare the
manuscript of this book. XeLaTeX is a computer typse ing system
derived from Leslie Lamport’s LATEXand built on Donald Knuth’s TEX.
I type out the text of the book in a set of individual text ﬁles, marked
up with tags like
ȇ/ 3/$/ȃ/#$. $. $) $/'$.Ȅ

. XeLaTeX then assembles the hundreds of individual ﬁles into a single PDF output.

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This approach has several advantages compared with a more traditional word processor. First, where Word or Pages.app might have
choked or slowed down on a document this size, XeLaTeX has no
trouble at all. True, I needed to take a minute to recompile the PDF
each time I make changes. But the editing itself is fast and responsive.
Second, this method gave me ﬁne-grained control over every aspect of how the book appears. My choice of a wide margin, for example, with sidenotes that ﬂoat with the main text, would have been
extremely diﬃcult to implement in a word processor. With XeLaTeX,
it was a ma er of specifying the width of the margins and then writing a few commands to place materials in them in particular ways. I
have been able to customize the fonts, the colors, the forma ing of
trademarks and the captioning of images. I have also been able to hyperlink the short forms of cases back to the full citation introducing
them – all while automatically pulling them into the indices at the
back of the book.
Some of my more speciﬁc forma ing choices are also worth commenting on. At the moment, the book is set primarily in Palatino,
which I chose because it is an a ractive typeface that is widely available and happens to be Cornell’s principal typeface. (Similarly, the
accent color is Cornell red.) The header typeface, used for the running
heads, the marginal notes and captions, and case names, is Myriad,
which is also widely available.
I think the choice to use splashes of color is a no-brainer. It doesn’t
print out on black-and-white printers, but given that so many people
read so much on screens already, it livens up the experience for the
majority. I also think the use of a contrasting sans-serif font is easily defensible; it makes entirely clear what is part of the excerpted
material and what is editoral apparatus.

1FSNJTTJPOT
Excerpts from cases and statutes are in the public domain as edicts of
government. Congressional reports, excerpts from the MPEP, Copyright Compendium and TMEP, and other federal materials are in the
public domain as government works. All other excerpted materials
are used under the fair use provisions of 17 U.S.C. § 107. If you disagree with my interpretation of fair use as applied to any particular
materials, please get in touch with me to discuss.
All of my own contributions to these materials – including any
original writing, edits to existing materials, and the selection and arrangement of those materials – are hereby made available for free
reuse under the terms of the $SFBUJWF $PNNPOT "UUSJCVUJPO  *OUFSOB
UJPOBM license. Credit is not important to me, but I do care that you
preserve the license notice if you redistribute these materials.

5"#-& 0' $0/5&/54

*O $MPTJOH
Although I respectfully disagree with the organizational choices and
emphases of all existing casebooks, I have learned a great deal from
them. Many cases in these materials came to my a ention as good
teaching prospects because I found them in other books and admired
how the authors used them. I am grateful to everyone else who has
blazed a trail through the overgrowth that is IP law; I hope they will
not begrudge me blazing one more.
These materials were assembled for my Fall 2016 Intellectual Property survey course at Cornell Tech. I may revise and update them the
next time I teach the course. I am sure that many errors remain (indeed, I have marked many on my printouts of the chapters) – but
I have not had the to go back and ﬁx even the ones I know of, let
alone to look for the rest. I welcome any comments, suggestions, and
corrections and will try to incorporate them if I am able to make revisions. If you would like to customize these materials for your own
use or others’, please get in touch so we can discuss the mechanics.
I hope that you enjoy working with these materials as much as I
have enjoyed assembling them.

August 4, 2017
James Grimmelmann
Cornell Tech and Cornell Law School
%( .ǡ"-$(( '())ȓ*-) ''ǡ 0

5"#-& 0' $0/5&/54

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To understand intellectual property law, it is necessary to understand
the problems it tries to solve. And thus we start with one of the negative spaces of intellectual property: the submission of undeveloped
ideas. These ideas – for reasons we will study in detail later – fail to
qualify for protection under the various bodies of intellectual property law. And yet they still have value, which means there are rewards to be reaped by anyone who can create them and get them
into the right hands.
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In November, 1949, plaintiﬀ telephoned Wilder’s oﬃce. Wilder’s secretary, who was also employed by Paramount, answered, and plaintiﬀ stated that he wished to see Wilder. At the secretary’s insistence
that plaintiﬀ explain his purpose, plaintiﬀ “told her about this fantastic unusual story. ... I described to her the story in a few words. ... I
told her that it was the life story of Floyd Collins who was trapped
and made sensational news for two weeks ... and I told her the plot....
I described to her the entrapment and the death, in ten minutes, probably. She seemed very much interested and she liked it.” Plaintiﬀ
sought to send Wilder a copy of the story but when the secretary
learned of its length of some 65 pages she stated that Wilder would
not read it, that he wanted stories in synopsis form, that the story
would ﬁrst be sent to the script department, and “in case they think
it is fantastic and wonderful, they will abbreviate it and condense it
in about three or four pages, and the producers and directors get to
see it.” Plaintiﬀ protested that he preferred to do the abbreviating
of the story himself, and the secretary suggested that he do so. Two
days later plaintiﬀ, after preparing a three or four page outline of the
story, telephoned Wilder’s oﬃce a second time and told the secretary
the synopsis was ready. The secretary requested plaintiﬀ to read the
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shorthand, and plaintiﬀ did so. During the conversation the secretary
told plaintiﬀ that the story seemed interesting and that she liked it.
“She said that she would talk it over with Billy Wilder and she would
let me know.” Plaintiﬀ on his part told the secretary that defendants
could use the story only if they paid him “the reasonable value of it
... I made it clear to her that I wrote the story and that I wanted to
sell it. ... I naturally mentioned again that this story was my story
which has taken me so much eﬀort and research and time, and therefore if anybody used it they will have to pay for it ... She said that if
Billy Wilder of Paramount uses the story, ‘naturally we will pay you
for it.’” Plaintiﬀ’s only subsequent contact with the secretary was a
telephone call to her in July, 1950, to protest the alleged use of his
composition and idea in a photoplay. The photoplay, as hereinafter
shown in some detail, closely parallels both plaintiﬀ’s synopsis and
the historical material concerning the life and death of Floyd Collins.
We conclude that conveyance of an idea can constitute valuable
consideration and can be bargained for before it is disclosed to the
proposed purchaser, but once it is conveyed, i.e., disclosed to him
and he has grasped it, it is henceforth his own and he may work with
it and use it as he sees ﬁt. In the ﬁeld of entertainment the producer
may properly and validly agree that he will pay for the service of
conveying to him ideas which are valuable and which he can put to
proﬁtable use. But, assuming legality of consideration, the idea purveyor cannot prevail in an action to recover compensation for an abstract idea unless (a) before or after disclosure he has obtained an express promise to pay, or (b) the circumstances preceding and a ending disclosure, together with the conduct of the oﬀeree acting with
knowledge of the circumstances, show a promise of the type usually
referred to as “implied” or “implied-in-fact.”
Such inferred or implied promise, if it is to be found at all, must
be based on circumstances which were known to the producer at and
preceding the time of disclosure of the idea to him and he must voluntarily accept the disclosure, knowing the conditions on which it
is tendered. The idea man who blurts out his idea without having
ﬁrst made his bargain has no one but himself to blame for the loss
of his bargaining power. The law will not imply a promise to pay
for an idea from the mere facts that the idea has been conveyed, is
valuable, and has been used for proﬁt; this is true even though the
conveyance has been made with the hope or expectation that some
obligation will ensue. So, if the plaintiﬀ here is claiming only for the
conveyance of the idea of making a dramatic production out of the
life of Floyd Collins he must fail unless in conformity with the above
stated rules he can establish a contract to pay.
From plaintiﬀ’s testimony, as epitomized above, it does not appear that a contract to pay for conveyance of the abstract photoplay

idea had been made, or that the basis for inferring such a contract
from subsequent related acts of the defendants had been established,
at the time plaintiﬀ disclosed his basic idea to the secretary. Defendants, consequently, were at that time and from then on free to use
the abstract idea if they saw ﬁt to engage in the necessary research
and develop it to the point of a usable script.
[The court held that Desny was entitled to a trial on a diﬀerent
theory.]
Carter, Justice:
I concur only in the result reached in the majority opinion.
When we consider the diﬀerence in economic and social backgrounds of those oﬀering such merchandise for sale and those purchasing the same, we are met with the inescapable conclusion that it
is the seller who stands in the inferior bargaining position. It should
be borne in mind that producers are not easy to contact; that those
with authority to purchase for radio and television are surrounded
by a coterie of secretaries and assistants; that magazine editors and
publishers are not readily available to the average person. It should
also be borne in mind that writers have no way of advertising their
wares – that, as is most graphically illustrated by the present opinion,
no producer, publisher, or purchaser for radio or television, is going
to buy a pig in a poke. And, when the writer, in an earnest endeavor
to sell what he has wri en, conveys his idea or his diﬀerent interpretation of an old idea, to such prospective purchaser, he has lost the
result of his labor, deﬁnitely and irrevocably. And, in addition, there
is no way in which he can protect himself. If he says to whomever
he is permi ed to see, or, as in this case, talk with over the telephone,
“I won’t tell you what my idea is until you promise to pay me for it,”
it takes no Sherlock Holmes to ﬁgure out what the answer will be!
This case is a beautiful example of the practical diﬃculties bese ing
a writer with something to sell.
It seems to me that in the ordinary situation, when the so-called
“idea man” has an opportunity to see, or talk with, the prospective
purchaser, or someone in his employ, it is at that time, without anything being said, known to both parties that the one is there to sell,
and the other to buy. This is surely true of a department store when
merchandise is displayed on the counter – it is understood by anyone
entering the store that the merchandise so displayed is for sale – it is
completely unnecessary for the storekeeper, or anyone in his employ,
to state to anyone entering the store that all articles there are for sale.
I am at a loss to see why any diﬀerent rules should apply when it is
ideas for sale rather than normal run of merchandise.
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An inventor seeking funds or development expertise may be reluctant to disclose information about her invention for fear that the recipients of the information can take it for themselves. On the other
side of the transaction, the funders or developers will be unwilling
to commit money or resources to the project unless or until they can
assess its value. Arrow observed this dynamic and deemed it a “fundamental paradox”: the value of information “for the purchaser is
not known until he has the information, but then he has in eﬀect acquired it without cost.” More recently, Cooter and his collaborators
have described this phenomenon as a “double trust dilemma”: “To
develop an innovation, the innovator must trust the investor not to
steal his idea, and the investor must trust the innovator not to steal
his capital.”
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Defendant, an investment bank, seeks to avoid an agreement to purchase plaintiﬀs’ idea for issuing and selling municipal bonds. Its principal contention is that plaintiﬀs had no property right in the idea because it was not novel and, therefore, consideration for the contract
was lacking. For reasons which follow, we conclude that a showing of
novelty is not required to validate the contract. The decisive question
is whether the idea had value, not whether it was novel.
I
In 1982, plaintiﬀs, an investment banker and a lawyer, approached
defendant’s predecessor with a proposal for issuing municipal securities through a system that eliminated paper certiﬁcates and allowed
bonds to be sold, traded, and held exclusively by means of computerized “book entries”. Initially, the parties signed a conﬁdentiality
agreement that allowed defendant to review the techniques as detailed in a 99-page summary. Nearly a month of negotiations followed before the parties entered into a sale agreement under which
plaintiﬀs conveyed their rights to the techniques and certain trade
names and defendant agreed to pay a stipulated rate based on its use
of the techniques for a term from October 1982 to January 1988. Under the provisions of the contract, defendant’s obligation to pay was
to remain even if the techniques became public knowledge or standard practice in the industry and applications for patents and trademarks were denied. Plaintiﬀs asserted that they had not previously
disclosed the techniques to anyone and they agreed to maintain them
in conﬁdence until they became public.
From 1982 until 1985, defendant implemented the contract, al-

though the parties dispute whether amounts due were fully paid.
Defendant actively encouraged bond issuers to use the computerized
“book entry” system and, for at least the ﬁrst year, was the sole underwriter in the industry employing such a system. However, in 1985,
following a change in personnel, defendant refused to make any further payments. It maintained that the ideas conveyed by plaintiﬀs
had been in the public domain at the time of the sale agreement and
that what plaintiﬀs sold had never been theirs to sell. Defendant’s
a empts to patent the techniques proved unsuccessful. By 1985, investment banks were increasingly using computerized systems, and
by 1990 such systems were handling 60% of the dollar volume of all
new issues of municipal securities.
Plaintiﬀs commenced this litigation seeking $45 million in compensatory and punitive damages.
II
Under the traditional principles of contract law, the parties to a contract are free to make their bargain, even if the consideration exchanged is grossly unequal or of dubious value. Absent fraud or unconscionability, the adequacy of consideration is not a proper subject
for judicial scrutiny. It is enough that something of “real value in the
eye of the law” was exchanged. The fact that the sellers may not have
had a property right in what they sold does not, by itself, render the
contract void for lack of consideration.
Manifestly, defendant received something of value here; its own
conduct establishes that. After signing the conﬁdentiality agreement,
defendant thoroughly reviewed plaintiﬀs’ system before buying it.
Having done so, it was in the best position to know whether the idea
had value. It decided to enter into the sale agreement and aggressively market the system to potential bond issuers. For at least a year,
it was the only underwriter to use plaintiﬀs’ “book entry” system for
municipal bonds, and it handled millions of such bond transactions
during that time. Having obtained full disclosure of the system, used
it in advance of competitors, and received the associated beneﬁts of
precluding its disclosure to others, defendant can hardly claim now
the idea had no value to its municipal securities business. Indeed, defendant acknowledges it made payments to plaintiﬀs under the sale
agreement for more than two years, conduct that would belie any
claim it might make that the idea was lacking in value or that it had
actually been obtained from some other source before plaintiﬀs’ disclosure.
III
Defendant’s position rests on Downey v. General Foods Corp., Soule v.
Bon Ami Co. and similar decisions. It contends those cases establish

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an exception to traditional principles of contract law and require that
the idea must be novel before it can constitute valid consideration for
a contract.
In Downey, plaintiﬀ submi ed an idea for an advertising campaign. A short time later, defendant General Foods mounted a campaign that was similar to the one plaintiﬀ had suggested and plaintiﬀ
sought damages in a complaint alleging several theories for recovery.
We ordered the dismissal of the complaint on two separate grounds:
ﬁrst, the lack of novelty and, second, defendant’s prior possession of
the idea – i.e., its lack of novelty as to defendant. To the extent plaintiﬀ’s causes of action were grounded on assertions of a property right,
we found that they were untenable “if the elements of novelty and
originality [were] absent, since the property right in an idea is based
upon these two elements.” Second, we concluded that the defendant
possessed plaintiﬀ’s ideas prior to plaintiﬀ’s disclosure. Thus, the
ideas could have no value to defendant and could not supply consideration for any agreement between the parties.
In Soule, plaintiﬀ made an express contract with Bon Ami to
disclose a way to increase proﬁts. The idea consisted largely of a
proposal to raise prices. The Appellate Division, in a frequently
cited opinion, denied plaintiﬀ any recovery, ﬁnding that the bargain
lacked consideration because the idea was not novel. This Court afﬁrmed but it did so on a diﬀerent basis: it held that plaintiﬀ had failed
to show that proﬁts resulted from the disclosure.
These decisions do not support defendant’s contention that novelty is required in all cases involving disclosure of ideas. Indeed, we
have explicitly held that it is not. Downey, Soule and cases in that line
of decisions involve a distinct factual pa ern: the buyer and seller
contract for disclosure of the idea with payment based on use, but no
separate postdisclosure contract for use of the idea has been made.
Thus, they present the issue of whether the idea the buyer was using
was, in fact, the seller’s.
Such transactions pose two problems for the courts. On the one
hand, how can sellers prove that the buyer obtained the idea from
them, and nowhere else, and that the buyer’s use of it thus constitutes misappropriation of property? Unlike tangible property, an
idea lacks title and boundaries and cannot be rendered exclusive by
the acts of the one who ﬁrst thinks it. On the other hand, there is no
equity in enforcing a seemingly valid contract when, in fact, it turns
out upon disclosure that the buyer already possessed the idea. In
such instances, the disclosure, though freely bargained for, is manifestly without value. A showing of novelty, at least novelty as to the
buyer, addresses these two concerns. Novelty can then serve to establish both the a ributes of ownership necessary for a property-based
claim and the value of the consideration – the disclosure – necessary

for contract-based claims.
There are no such concerns in a transaction such as the one before
us. Defendant does not claim that it was aware of the idea before
plaintiﬀs disclosed it but, rather, concedes that the idea came from
them. When a seller’s claim arises from a contract to use an idea entered into after the disclosure of the idea, the question is not whether
the buyer misappropriated property from the seller, but whether the
idea had value to the buyer and thus constitutes valid consideration.
In such a case, the buyer knows what he or she is buying and has
agreed that the idea has value, and the Court will not ordinarily go behind that determination. The lack of novelty, in and of itself, does not
demonstrate a lack of value. To the contrary, the buyer may reap beneﬁts from such a contract in a number of ways — for instance, by not
having to expend resources pursuing the idea through other channels
or by having a proﬁtmaking idea implemented sooner rather than
later. The law of contracts would have to be substantially rewri en
were we to allow buyers of fully disclosed ideas to disregard their
obligation to pay simply because an idea could have been obtained
from some other source or in some other way.
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Apfel and Desny give us a glimpse of a world without intellectual
property laws. Suppose that you lived in such a world. A client
comes to you with one of the following. How would you advise her
to proceed?
• A 75,000-word novel about a boy who discovers that he is a wizard
• A new drug for treating heart disease, which will cost $100 million to test in humans
• An easier-to-hold design for a pipe wrench
• A process for producing pure aluminum from aluminum ore
that reduces the cost by 85%
• A catchy song about taking revenge on a cheating boyfriend,
recorded in the client’s kitchen with lots of background noise
• A recut version of a popular action movie, which takes ﬁve minutes oﬀ the running time and makes it more suspenseful
• A sketch for an elegant oﬀ-the-shoulder dress
• A joke about traﬃc in Los Angeles
• The perfect name for a laundromat
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Debt collection is a shady, high-pressure business. Collection agencies buy unpaid debts in bulk from lenders and from each other, usu-

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ally for a fraction of the face value of the debts. The buyer typically receives a spreadsheet listing the debtors, their addresses, the amounts
they owe, and perhaps some information about previous failed attempts at collection, along with an assignment of the seller’s right to
collect the debt. Then the buyer goes to work, calling the debtor, sending le ers, negotiating payment schedules or write-downs of the debt
in exchange for partial payment, and threatening legal action and perhaps following through, Unsurprisingly, debt collectors are known to
use sharp tactics, including issuing unfounded legal threats, making
repeated calls, trying to collect on debts that have been discharged
in bankruptcy or where the statute of limitations has expired, and
sometimes even intimating the possibility of violence. The federal
Fair Debt Collection Practices Act and numerous state laws try to prevent these abusive tactics. Here is another:
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Around the same time that Theresa was ge ing phone
calls from a mysterious law ﬁrm, Siegel received an email
from the owner of an agency that he had hired to do his
collecting. The collectors at this agency were ge ing the
same message from many debtors: We just paid oﬀ these
accounts – to someone else. Siegel was both ﬂummoxed
and concerned. Was this the work of a renegade collector
at one of his agencies who was collecting on his own and
pocketing the cash? Or had the paper simply been stolen
from his oﬃces?
The notion that a portfolio of debt could be stolen may
seem improbable, but plenty of debt brokers are all too
willing to sell “bad paper.” Such brokers sometimes “double sell” or “triple sell” the same ﬁle to multiple unsuspecting buyers. Other times, a broker may sell paper that he
does not own and obtained by nefarious means. I spoke
at length with one debt broker from Buﬀalo, who told me
that he had hired a hacker from China to break into a former client’s email account and obtain his password. Once
he had the client’s password, the broker had access to his
paper. He then simply took a portfolio and, subsequently,
sold it to another buyer — who didn’t know and didn’t ask
where it came from.
Is this an ”intellectual property” problem? Does it have anything in
common with the problems discussed in Desny and Apfel?

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Trade secret law protects against the theft of valuable business secrets.
Doctrinally, trade secret law has deep common-law roots as a branch
of “unfair competition” law. Over time it has become more statutory
and more federal. The Uniform Trade Secrets Act has been adopted
in some form by 47 states. The federal Economic Espionage Act criminalized an important subset of trade secret misappropriation, and the
2016 Defend Trade Secrets Act added a federal civil cause of action
and an important seizure remedy.
Why protect trade secrets? At least four stories rub elbows in the
cases and commentary.
• Contracting: protecting trade secrets helps resolve Arrow’s Information Paradox by making it possible to contract securely
for disclosing them.
• Innovation: keeping secrets safe gives companies incentives to
invest in creating valuable information in the ﬁrst place.
• Arms Race: unless trade secrets received legal protection, companies would ineﬃciently overinvest in self-help to protect
them, and other companies would ineﬃciently overinvest in
stealing them.
• Competition: trade secret law deters unethical business practices and encourages companies to compete with each other
fairly.

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A trade secret is any information that can be used in the operation of
a business or other enterprise and that is suﬃciently valuable and secret to aﬀord an actual or potential economic advantage over others.

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Subject ma er. – A trade secret can consist of a formula, pa ern,
compilation of data, computer program, device, method, technique, process, or other form or embodiment of economically
valuable information. A trade secret can relate to technical matters such as the composition or design of a product, a method of
manufacture, or the know-how necessary to perform a particular operation or service. A trade secret can also relate to other
aspects of business operations such as pricing and marketing
techniques or the identity and requirements of customers.
The prior Restatement of this topic limited the subject ma er
of trade secret law to information capable of ”continuous use in
the operation of a business,” thus excluding information relating to single events such as secret bids and impending business
announcements or information whose secrecy is quickly destroyed by commercial exploitation. Both the case law and the
prior Restatement, however, oﬀered protection against the ”improper” acquisition of such short-term information under rules
virtually identical to those applicable to trade secrets. The definition of ”trade secret” adopted in the Uniform Trade Secrets
Act does not include any requirement relating to the duration
of the information’s economic value. The deﬁnition adopted in
this Section similarly contains no requirement that the information aﬀord a continuous or long-term advantage.
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“Trade secret” means information, including a formula, pa ern,
compilation, program, device, method, technique, or process,
that:
(i) derives independent economic value, actual or potential,
from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use, and
(ii) is the subject of eﬀorts that are reasonable under the circumstances to maintain its secrecy.

Not every secret is a trade secret. When one ﬁfth-grader asks another
to cross her heart and hope to die before revealing a bit of gossip
about a mutual friend, this is not the kind of secret the courts will
take an interest in. The economic value requirement performs this
screening function.
In theory, economic value could be a threshold test: the courts
could ask whether particular information is valuable enough for

" 46#+&$5 ."55&3

trade secret law to protect. But in practice, the threshold of value
is so low it rarely ma ers. “It is suﬃcient if the secret provides an advantage that is more than trivial.” Instead, economic value expresses
a categorical exclusion from trade secret subject ma er. Personal –
rather than professional – secrets are the wrong sort of thing for trade
secret law.
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Plaintiﬀs, two Scientology-aﬃliated organizations claiming copyright and trade secret protection for the writings of the Church’s
founder, L. Ron Hubbard, brought this suit against defendant Dennis Erlich, a former Scientology minister turned vocal critic of the
Church, who allegedly put plaintiﬀs’ protected works onto the Internet.
I. B
Defendant Dennis Erlich was a member of the Church of Scientology from approximately 1968 until 1982. During his years with the
Church, Erlich received training to enable him to provide ministerial
counseling services, known as “auditing.” While with the Church, Erlich had access to various Scientology writings, including those of the
Church’s founder, L. Ron Hubbard, which the Church alleges include
published literary works as well as unpublished conﬁdential materials (the “Advanced Technology works”). According to plaintiﬀs, Erlich had agreed to maintain the conﬁdentiality of the Advanced Technology works.
Since leaving the Church, Erlich has been a vocal critic of Scientology and he now considers it part of his calling to foster critical debate about Scientology through humorous and critical writings. Erlich has expressed his views about the Church by contributing to the
Internet “Usenet news-group” called “alt.religion.scientology” (“the
newsgroup’’), which is an on-line forum for the discussion of issues
related to Scientology.
Plaintiﬀ Religious Technology Center (“RTC’’), a nonproﬁt religious corporation, “was formed by Scientologists, with the approval
of Hubbard, to act as the protector of the religion of Scientology and
to own, protect, and control the utilization of the Advanced Technology in the United States.”
RTC allege[s] that Erlich misappropriated its trade secrets in the
works, the conﬁdentiality of which it alleges has been the subject of
elaborate security measures. RTC further claims that those works are
extremely valuable to the Church. Erlich admits to having posted excerpts from some of the works, but argues that the quotations were

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used to provide context for debate and as a basis for his criticism. Erlich further argues that he has neither claimed authorship of any of
the works nor personally proﬁted from his critique, satire, and commentary. Erlich contends that all of the documents he posted had
been previously posted anonymously over the Internet, except for
one, which he claims he received anonymously through the mail.
C. Likelihood of Success on Trade Secret Claim
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In the third cause of action, plaintiﬀ RTC alleges that Erlich misappropriated its trade secrets. California has adopted a version of the
Uniform Trade Secret Act.
To establish its trade secret claim, RTC must show, inter alia,
that the Advanced Technology works (1) have independent economic
value to competitors and (2) have been kept conﬁdential.
1. Nature of Works

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As a preliminary ma er, Erlich argues that the Advanced Technology works cannot be trade secrets because of their nature as religious
scriptures. In Religious Technology Center v. Wollersheim, the Ninth Circuit rejected the Church’s application for a preliminary injunction on
the basis of a trade secret claim against a splinter Scientology group
that had acquired stolen copies of the Advanced Technology. The
Church argued not that the works gave them a competitive market
advantage but that disclosure of the works would cause its adherents “religious harm from premature unsupervised exposure to the
materials.” Although the Ninth Circuit rejected plaintiﬀs’ trade secret argument based on the spiritual value of the harm, it later noted
that it had left open the question of whether the Advanced Technology works could qualify as trade secrets, assuming plaintiﬀs could
prove that the secrets confer on them an actual economic advantage
over competitors. Nonetheless, the court noted that such an allegation would “raise grave doubts about the Church’s claim as a religion
and a not-for-proﬁt corporation.”
The Church contends that the Advanced Technology works consist of “processes and the theory behind those processes that are to
be used precisely as set forth by L. Ron Hubbard to assist the parishioner in achieving a greater spiritual awareness and freedom.” Erlich
responds that the works are essentially religious texts. Erlich argues
that the Church cannot have trade secrets because trade secret law
is necessarily related to commerce. The Church contends that, like
other organizations, it must pay bills, and that licensing fees from
these documents allow it to continue operating.
The Church’s status as a religion does not itself preclude it from
holding a trade secret. R
§ 39 cmt. d (“[N]onproﬁt entities
such as ... religious organizations can also claim trade secret protec-

" 46#+&$5 ."55&3

tion for economically valuable information such as lists of prospective members or donors.’’); UTSA § 3426.1(c) (deﬁning “person” to
include a “corporation ... or any other legal or commercial entity”).
With the exception of Bridge Publications, Inc. v. Vien [(another Scientology case)], there is li le authority to support a ﬁnding that religious materials can constitute trade secrets. However, there is “no
category of information [that] is excluded from protection as a trade
secret because of its inherent qualities.” Clark v. Bunker (upholding as
a trade secret a “detailed plan for the creation, promotion, ﬁnancing,
and sale of contracts for ‘prepaid’ or ‘pre-need’ funeral services”).
Nor is there any authority to support Erlich’s argument that the
Church’s religious texts cannot be trade secrets because, unlike most
trade secrets, these secrets are not used in the production or sales
of a commodity but are the commodities themselves. The Church’s Advanced Technology “course” materials, which are an integral part of
the Church’s spiritual counseling techniques, do not appear fundamentally diﬀerent from the course manuals upheld as trade secrets
in SmokEnders, Inc. v. Smoke No More, Inc.:
The SmokEnders (“SE’’) program requires a endees to
follow a rigid structured regimen comprised of speciﬁc
assignments and detailed concepts as recited in the manual.
The SE program is a step-by-step regimented program
which requires that each person a ending a SE program
perform each act of the program at a particular time. Each
act required by a SE seminar a endee must be performed
by a endees at the same time in the program, with each a
minimum departure from the program.
The SE trade secret resides in the composite program
as it is arranged for step-by-step delivery to the a endees.
SmokEnders is arguably distinguishable because only the “moderators” and not the a endees were given access to the course materials in that case. However, the adherents of the Church, unlike the
a endees and like the moderators in SmokEnders, are under a duty
of conﬁdentiality as to the materials. This case is analogous to SmokEnders because in both cases the “commodity” that is produced from
the trade secrets is the result achieved by the person using the course
materials and their techniques (whether it be stopping smoking or
reaching a “higher spiritual existence”).
Thus, there is at least some precedent for granting trade secret status to works that are techniques for improving oneself (though not
speciﬁcally spiritually). Conversely, there is no authority for excluding religious materials from trade secret protection because of their
nature. Indeed, there is no authority for excluding any type of in-

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formation because of its nature. While the trade secret laws did not
necessarily develop to allow a religion to protect a monopoly in its religious practices, the laws have nonetheless expanded such that the
Church’s techniques, which clearly are “used in the operation of the
enterprise,” are deserving of protection if secret and valuable.
Although trade secret status may apply to works that are techniques for spiritually improving oneself, the secret aspect of those
techniques must be deﬁned with particularity. See R
(requiring plaintiﬀ to deﬁne the information claimed as a trade secret
with suﬃcient deﬁniteness). It appears that plaintiﬀs are claiming
that the entire works themselves, which they describe as “processes
and the theory behind those processes,” constitute the trade secrets.
This deﬁnition is problematic because it is impossible to determine
when the “secret” has been lost after portions of the works have been
disclosed. Although plaintiﬀs’ deﬁnition has at least some support
in SmokEnders, where the court upheld as a trade secret a “composite
stop-smoking program” found in an instructional manual, this court
is not satisﬁed that plaintiﬀs have identiﬁed their trade secrets with
suﬃcient deﬁniteness to support injunctive relief.
2. Independent Economic Value
A trade secret requires proof of independent economic value, actual
or potential, from not being generally known to the public or to other
persons who can obtain economic value from its disclosure or use. A
trade secret must have suﬃcient value in the owner’s operation of its
enterprise such that it provides an actual or potential advantage over
others who do not possess the information.
RTC’s president, Warren McShane, a ests that
The Advanced Technology is a source of substantial revenue for RTC in the form of licensing fees paid by
Churches that are licensed to use the Advanced Technology. These Churches themselves receive a signiﬁcant
amount of their income from donations by parishioners
for services based upon the Advanced Technology. These
Churches pay RTC a percentage of the donations paid by
parishioners for the services based upon the Advanced
Technology. These donations and fees provide the majority of operating expenses of these various Church organizations.
The Church’s need for revenues to support its services is no less because of its status as a religion. RTC points out that it receives six percent of what the individual churches receive in licensing fees. This
evidence is suﬃcient to establish the value of the Advanced Technology works to the Church.

# 08/&34)*1

Erlich also argues that, to constitute a trade secret, information
must give its owner a competitive advantage, which implies that the
Church must have competitors. Although Erlich is clearly not a “competitor” of the Church, there is no requirement that a trade secret have
any value to the defendant; the value can be to others who do not possess it. This evidence can be shown by direct evidence of the impact
of the information on the business or by circumstantial evidence of
the resources invested in producing the information, the precautions
taken to protect its secrecy, and the willingness of others to pay for
its access. The several past instances of breakaway Scientology-like
groups exploiting RTC’s Advanced Technology works for their proﬁt
constitute reasonable circumstantial evidence that these works give
the Church a competitive advantage. In fact, McShane’s declaration
constitutes direct evidence that the works have a signiﬁcant impact
on the donations received by the Church, providing a majority of its
operating expenses. The status of the Advanced Technology works
as trade secrets should not depend on Erlich’s use of them. Accordingly, this court ﬁnds support for the court’s conclusion in Vien that
the Church has shown independent economic value.

#

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It is clear, uncontroversial, and unsurprising that the essential requirement for owning a trade secret is actual secrecy: the information
must not be widely known. The concept is not complicated, but it is
subtle. “Secrecy” is something of a term of art; whether something is
considered secret as a factual ma er depends heavily on what kinds
of observation and disclosure trade secret law will protect against.
But because this book is, well, this book, we will also direct our attention to two other important facts about the way the actual-secrecy
element operates. It resolves priority questions by allowing multiple
independent parties each to have a trade secret in the same information. And it resolves questions of allocating ownership within collaborations by looking to contract, agency, and employment law.

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Ma hew Lange has been convicted of violating 18 U.S.C. § 1832, part
of the Economic Espionage Act of 1996. This statute makes it a felony
to sell, disseminate, or otherwise deal in trade secrets, or a empt to
do so, without the owner’s consent. Lange stole computer data from
Replacement Aircraft Parts Co. (RAPCO), his former employer, and

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a empted to sell the data to one of RAPCO’s competitors. He allows
that his acts violated § 1832, if the data contained “trade secrets,” but
denies that the data met the statutory deﬁnition [that the] ”information derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable
through proper means by, the public.”
RAPCO is in the business of making aircraft parts for the aftermarket. It buys original equipment parts, then disassembles them to
identify (and measure) each component. This initial step of reverse
engineering, usually performed by a drafter such as Lange, produces
a set of measurements and drawings. Because this case involves an
eﬀort to sell the intellectual property used to make a brake assembly,
we use brakes as an illustration.
Knowing exactly what a brake assembly looks like does not enable
RAPCO to make a copy. It must ﬁgure out how to make a substitute
with the same (or be er) technical speciﬁcations. Aftermarket manufacturers must experiment with diﬀerent alloys and compositions until they achieve a process and product that fulﬁls requirements set by
the Federal Aviation Administration for each brake assembly. Completed assemblies must be exhaustively tested to demonstrate, to the
FAA’s satisfaction, that all requirements have been met; only then
does the FAA certify the part for sale. For brakes this entails 100 destructive tests on prototypes, bringing a spinning 60-ton wheel to a
halt at a speciﬁed deceleration measured by a dynamometer. Further testing of ﬁnished assemblies is required. It takes RAPCO a
year or two to design, and obtain approval for, a complex part; the
dynamometer testing alone can cost $75,000. But the process of experimenting and testing can be avoided if the manufacturer demonstrates that its parts are identical (in composition and manufacturing
processes) to parts that have already been certiﬁed. What Lange, a
disgruntled former employee, oﬀered for sale was all the information required to obtain certiﬁcation of several components as identical to parts for which RAPCO held certiﬁcation. Lange included with
the package – which he oﬀered via the Internet to anyone willing to
pay his price of $100,000 – a pirated copy of AutoCAD, the computerassisted drawing software that RAPCO uses to maintain its drawings
and speciﬁcations data. One person to whom Lange tried to peddle
the data informed RAPCO, which turned to the FBI. Lange was arrested following taped negotiations that supply all the evidence necessary for conviction – if the data satisfy the statutory deﬁnition of
trade secrets.
According to Lange, all data obtained by reverse engineering
some other product are “readily ascertainable ... by the public” because everyone can do what RAPCO did: buy an original part, disassemble and measure it, and make a copy. The prosecutor responds

# 08/&34)*1

to this contention by observing that “the public” is unable to reverse
engineer an aircraft brake assembly.
The prosecutor’s assumption is that the statutory reference in
§ 1839(3) to “the public” means the general public – the man in the
street. Ordinary people don’t have AutoCAD and 60-ton ﬂywheels
ready to hand. But is the general public the right benchmark?
A problem with using the general public as the reference group
for identifying a trade secret is that many things unknown to the public at large are well known to engineers, scientists, and others whose
intellectual property the Economic Espionage Act was enacted to protect. This makes the general public a poor benchmark for separating
commercially valuable secrets from obscure (but generally known)
information. Suppose that Lange had oﬀered to sell Avogadro’s number for $1. Avogadro’s number, 6.02×1023 , is the number of molecules
per mole of gas. It is an important constant, known to chemists since
1909 but not to the general public (or even to all recent graduates of a
chemistry class). We can’t believe that Avogadro’s number could be
called a trade secret. Other principles are known without being comprehended. Most people know that E = mc2 , but a pop quiz of the
general public would reveal that they do not understand what this
means or how it can be used productively.
One might respond that the context of the word “public” addresses this concern. The full text of § 1839(3)(B) is: “the information derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable
through proper means by, the public”. Avogadro’s number and other
obscure knowledge is not “generally known to” the man in the street
but might be deemed “readily ascertainable to” this hypothetical person. It appears in any number of scientiﬁc handbooks. Similarly one
can visit a library and read Einstein’s own discussion of his famous
equation. Members of the general public can ascertain even abstruse
information, such as Schrodinger’s quantum ﬁeld equation, by consulting people in the know – as high school dropouts can take advantage of obscure legal rules by hiring lawyers.
Section 1839(3)(B) as a whole refers to the source of economic
value – that the information is not known to or easily discoverable
by persons who could use it productively. And for purposes of this
case those people would be engineers and manufacturers of aircraft
parts, who have ample means to reverse engineer their competitors’
products. It is by keeping secrets from its rivals that RAPCO captures
the returns of its design and testing work. Thus it is unnecessary here
to decide whether “general” belongs in front of “public” – for even if
it does, the economically valuable information is not “readily ascertainable” to the general public, the educated public, the economically
relevant public, or any sensible proxy for these groups.

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Lange wants us to proceed as if all he tried to sell were measurements that anyone could have taken with calipers after disassembling
an original-equipment part. Such measurements could not be called
trade secrets if, as Lange asserts, the assemblies in question were easy
to take apart and measure. But no one would have paid $100,000
for metes and bounds, while Lange told his customers that the data
on oﬀer were worth more than that asking price. Which they were.
What Lange had, and tried to sell, were the completed speciﬁcations
and engineering diagrams that reﬂected all the work completed after the measurements had been taken: the metallurgical data, details
of the sintering, the results of the tests, the plans needed to produce
the ﬁnished goods, everything required to get FAA certiﬁcation of a
part supposedly identical to one that had been approved. Those details “derived independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable
through proper means by, the public.” Every ﬁrm other than the
original equipment manufacturer and RAPCO had to pay dearly to
devise, test, and win approval of similar parts; the details unknown to
the rivals, and not discoverable with tape measures, had considerable
“independent economic value … from not being generally known”. A
sensible trier of fact could determine that Lange tried to sell trade secrets. It was his customer’s cooperation with the FBI, and not public
access to the data, that prevented closing of the sale.

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Erlich raises a number of objections to the Church’s claims of conﬁdentiality. Erlich argues that the Church’s trade secrets have been
made available to the public through various means. The unprotected disclosure of a trade secret will cause the information to forfeit its trade secret status, since “information that is generally known
or readily ascertainable through proper means by others is not protectable as a trade secret.” Once trade secrets have been exposed to
the public, they cannot later be recalled.
Erlich argues that many of the Advanced Technology documents
have been available in open court records in another case, Church
of Scientology Int’l v. Fishman, destroying the necessary element of
secrecy. However, the Fishman court recently issued an order sealing the ﬁle pending a decision on whether the documents are trade
secrets. Even if those records were temporarily open to the public,
the court will not assume that their contents have been generally disclosed, especially when this question is still pending before the district court in Fishman. Such a disclosure, without evidence that the secrets have become generally known, does not necessarily cause RTC

# 08/&34)*1

to forfeit its trade secrets. The contrary result would mean that if documents were ever ﬁled without a sealing order, even for a short time,
the court would not be able to decide that they should be sealed because the documents would have lost their potential trade secret status by virtue of the temporary unsealing. The only fair result would
be to allow trade secret status for works that are otherwise protectable
as trade secrets unless they were somehow made generally available
to the public during the period they were unsealed, such as by publication.
Erlich further asserts that the Advanced Technology has been
largely disclosed in the popular press. These articles may reveal information referring to or hinting at the trade secrets, but may not disclose the secrets themselves. However, as previously noted, the court
is not certain how to properly deﬁne the “secrets.” To the extent that
someone uses or discloses any information taken from any of these
articles, there is clearly no trade secret claim. However, much of Erlich’s postings copied all or almost all of sections of the Advanced
Technology works, which is far more than has ever been disclosed
in the popular press. In fact, several of the works posted by Erlich
are not mentioned in any of the clippings in the Berger declaration.
Arguably, the Church’s alleged secrets are such that their value depends on the availability of the complete courses and not mere fragments, thus disclosures that describe parts of the works or disclose
isolated portions do not necessarily suﬃce to ruin the value of the entire works as secrets. However, without a clearer deﬁnition of what
constitute the “secrets,” the court is unable to determine whether
some have been made generally known to the public.
Finally, Erlich newly emphasizes in his Reply that the works he
posted were not secrets because he received them through proper
means: eight of the documents were allegedly previously posted
anonymously to a public portion of the Internet and one of the documents allegedly came to Erlich anonymously through the U.S. mail.
Erlich claims that because the alleged trade secrets were received
from “public sources,” they should lose their trade secret protection.
Although the Internet is a new technology, it requires no great leap
to conclude that because more than 25 million people could have accessed the newsgroup postings from which Erlich alleges he received
the works, these works would lose their status as secrets. While the
Internet has not reached the status where a temporary posting on a
newsgroup is akin to publication in a major newspaper or on a television network, those with an interest in using the Church’s trade secrets to compete with the Church are likely to look to the newsgroup.
Thus, posting works to the Internet makes them “generally known”
to the relevant people – the potential “competitors” of the Church.
The court is troubled by the notion that any Internet user, includ-

$)"15&3  53"%& 4&$3&5

ing those using “anonymous remailers” to protect their identity, can
destroy valuable intellectual property rights by posting them over the
Internet, especially given the fact that there is li le opportunity to
screen postings before they are made. Nonetheless, one of the Internet’s virtues, that it gives even the poorest individuals the power to
publish to millions of readers, can also be a detriment to the value of
intellectual property rights. The anonymous (or judgment proof) defendant can permanently destroy valuable trade secrets, leaving no
one to hold liable for the misappropriation. Although a work posted
to an Internet newsgroup remains accessible to the public for only a
limited amount of time, once that trade secret has been released into
the public domain there is no retrieving it. While the court is persuaded by the Church’s evidence that those who made the original
postings likely gained the information through improper means, as
no one outside the Church or without a duty of conﬁdence would
have had access to those works, this does not negate the ﬁnding that,
once posted, the works lost their secrecy. Although Erlich cannot
rely on his own improper postings to support the argument that the
Church’s documents are no longer secrets, evidence that another individual has put the alleged trade secrets into the public domain prevents RTC from further enforcing its trade secret rights in those materials. Because there is no evidence that Erlich is a privy of any of the
alleged original misappropriators, he is not equitably estopped from
raising their previous public disclosures as a defense to his disclosure. The court is thus convinced that those postings made by Erlich
were of materials that were possibly already generally available to
the public. Therefore, RTC has not shown a likelihood of success on
an essential element of its trade secret claim.

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PlayWood Toys, Inc. (“PlayWood”) obtained a jury verdict against
Learning Curve Toys, Inc. and its representatives, Roy Wilson, Harry
Abraham and John Lee (collectively, “Learning Curve”), for misappropriation of a trade secret in a realistic looking and sounding toy
railroad track under the Illinois Trade Secrets Act
I. B
In 1992, Robert Clausi and his brother-in-law, Sco Moore, began creating prototypes of wooden toys under the name PlayWood Toys,
Inc., a Canadian corporation. Clausi was the sole toy designer and
Moore was the sole oﬃcer and director of PlayWood. Neither Clausi
nor Moore had prior experience in the toy industry, but Clausi had
“always been a bit of a doodler and designer,” and the two men desired to “create high-quality hardwood maple toys for the indepen-

# 08/&34)*1

dent toy market.” As a newly formed corporation, PlayWood did not
own a facility in which it could produce toys. Instead, it worked in
conjunction with Mario Borsato, who owned a wood-working facility. Subject to a wri en conﬁdentiality agreement with PlayWood,
Borsato manufactured prototypes for PlayWood based on Clausi’s
design speciﬁcations.
PlayWood’s ﬁrst a empt to market publicly its toys was at the
Toronto Toy Fair on January 31, 1992. PlayWood received favorable
reviews from many of the toy retailers in a endance; PlayWood also
learned that the best way to get recognition for its toys was to a end
the New York Toy Fair (“Toy Fair”) the following month. Based on
this information, Clausi and Moore secured a position at the Toy Fair
in order to display PlayWood’s prototypes. It was during this Toy
Fair that Clausi and Moore ﬁrst encountered Learning Curve representatives Roy Wilson, Harry Abraham and John Lee.
On the morning of February 12, 1993, the ﬁrst day of the Toy
Fair, Roy Wilson stopped at PlayWood’s booth and engaged Clausi
and Moore in conversation. Wilson identiﬁed himself as Learning
Curve’s toy designer and explained that his company had a license
from the Bri Allcroft Company to develop Thomas the Tank Engine
& Friends™ (hereinafter “Thomas”) trains and accessories. Wilson
commented that he was impressed with the look and quality of PlayWood’s prototypes and raised the possibility of working together under a custom manufacturing contract to produce Learning Curve’s
line of Thomas products. Clausi and Moore responded that such
an arrangement would be of great interest to PlayWood. Later that
same day, Harry Abraham, Learning Curve’s vice president, and
John Lee, Learning Curve’s president, also stopped by PlayWood’s
booth. They too commented on the quality of PlayWood’s prototypes
and indicated that PlayWood might be a good candidate for a manufacturing contract with Learning Curve.
Clausi and Moore continued to have discussions with Learning
Curve’s representatives over the remaining days of the Toy Fair,
which ended on February 14. During these discussions, Lee indicated
that he would like two of his people, Abraham and Wilson, to visit
PlayWood in Toronto the day after the Toy Fair ended in order to
determine whether the two parties could work out a manufacturing
arrangement for some or all of Learning Curve’s wooden toys.
On February 18, 1993, Abraham and Wilson visited PlayWood
in Toronto as planned. The meeting began with a tour of Borsato’s
woodworking facility, where the prototypes on display at the Toy
Fair had been made. After the tour, the parties went to the conference room at Borsato’s facility. At this point, according to Clausi and
Moore, the parties agreed to make their ensuing discussion conﬁdential. Clausi testiﬁed:

$)"15&3  53"%& 4&$3&5
After we sat down in the board room, Harry [Abraham of
Learning Curve] immediately said: “Look, we’re going to
disclose conﬁdential information to you guys, and we’re
going to disclose some designs that Roy [Wilson of Learning Curve] has that are pre y conﬁdential. If Brio were to
get their hands on them, then we wouldn’t like that. And
we’re going to do it under the basis of a conﬁdential understanding.”
And I said: “I also have some things, some ideas on
how to produce the track and produce the trains now that
I’ve had a chance to look at them for the last couple of
days, and I think they’re conﬁdential as well. So if we’re
both okay with that, we should continue.” So we did.

Moore testiﬁed to the existence of a similar conversation:
It was at this point that Harry Abraham told us that
they were going to disclose some conﬁdential documents,
drawings, pricing, margins, and asked us if we would
keep that information conﬁdential. ...
I believe it was Robert [Clausi] who said that, you
know, absolutely, we would keep it conﬁdential. In fact,
we had some ideas that we felt would be conﬁdential we
would be disclosing to them, and would they keep it, you
know, conﬁdential? Would they reciprocate? And Harry
[Abraham] said: “Absolutely.” And then we proceeded
to go along with the meeting.
Immediately after the parties agreed to keep their discussion conﬁdential, Wilson, at Abraham’s direction, showed Clausi and Moore
drawings of various Thomas characters and provided information on
the projected volume of each of the products. Clausi testiﬁed that he
considered the documents disclosed by Learning Curve during the
meeting conﬁdential because they included information on products
not yet released to the public, as well as Learning Curve’s projected
volumes, costs and proﬁt margins for various products.
The parties’ discussion eventually moved away from train production and focused on track design. Wilson showed Clausi and
Moore drawings of Learning Curve’s track and provided samples
of their current product. At this point, Abraham conﬁded to Clausi
and Moore that track had posed “a bit of a problem for Learning
Curve.” Abraham explained that sales were terriﬁc for Learning
Curve’s Thomas trains, but that sales were abysmal for its track.
Abraham a ributed the lack of sales to the fact that Learning Curve’s
track was virtually identical to that of its competitor, Brio, which had
the lion’s share of the track market. Because there was “no diﬀerenti-

# 08/&34)*1

ation” between the two brands of track, Learning Curve’s track was
not even displayed in many of the toy stores that carried Learning
Curve’s products. Learning Curve had worked unsuccessfully for
several months a empting to diﬀerentiate its track from that of Brio.
After detailing the problems with Learning Curve’s existing track,
Abraham inquired of Clausi whether “there was a way to diﬀerentiate” its track from Brio’s track. Clausi immediately responded that he
“had had a chance to look at the track and get a feel for it [over] the last
few days” and that his “thoughts were that if the track were more realistic and more functional, that kids would enjoy playing with it more
and it would give the retailer a reason to carry the product, especially
if it looked diﬀerent than the Brio track.” Clausi further explained
that, if the track “made noise and [] looked like real train tracks, that
the stores wouldn’t have any problem, and the Thomas the Tank line,
product line would have [] its own diﬀerent track” and could “eﬀectively compete with Brio.” Abraham and Wilson indicated that they
were “intrigued” by Clausi’s idea and asked him what he meant by
“making noise.”
Clausi decided to show Abraham and Wilson exactly what he
meant. Clausi took a piece of Learning Curve’s existing track
from the table, drew some lines across the track (about every threequarters of an inch), and stated: “We can go ahead and machine
grooves right across the upper section, which would look like railway
tracks, and down below machine li le indentations as well so that it
would look more like or sound more like real track. You would roll
along and bumpity-bumpity as you go along.” Clausi then called Borsato into the conference room and asked him to cut grooves into the
wood “about a quarter of an inch deep from the top surface.” Borsato
left the room, complied with Clausi’s request, and returned with the
cut track three or four minutes later. Clausi ran a train back and forth
over the cut piece of track. The track looked more realistic than before,
but it did not make noise because the grooves were not deep enough.
Accordingly, Clausi instructed Borsato to cut the grooves “just a li le
bit deeper so that they go through the rails.” Borsato complied with
Clausi’s request once again and returned a few minutes later with
the cut piece of track. Clausi proceeded to run a train back and forth
over the track. This time the track made a “clickety-clack” sound,
but the train did not run smoothly over the track because the grooves
were cut “a li le bit too deep.” Based on the sound produced by the
track, Clausi told Abraham and Moore that if PlayWood procured a
contract with Learning Curve to produce the track, they could call it
“Clickety-Clack Track.”
Both Abraham and Wilson indicated that Clausi’s concept of cutting grooves into the track to produce a clacking sound was a novel
concept. Thereafter, Wilson and Clausi began to discuss how they

$)"15&3  53"%& 4&$3&5

could improve the idea to make the train run more smoothly on the
track, but Abraham interrupted them and stated: “No, focus. You
guys have to get the contract for the basic product ﬁrst, and then we
can talk about new products, because it takes [our licensor] a long
time to approve new products and new designs.”
The meeting ended shortly thereafter without further discussion
about Clausi’s concept for the noise-producing track. Before he left,
Wilson asked Clausi if he could take the piece of track that Borsato had cut with him while the parties continued their discussions.
Clausi gave Wilson the piece of track without hesitation. The piece
of track was the only item that Abraham and Wilson took from the
meeting. Clausi and Moore did not ask Wilson for a receipt for the
cut track, nor did they seek a wri en conﬁdentiality agreement to
protect PlayWood’s alleged trade secret. After the meeting, Clausi
amended PlayWood’s conﬁdentiality agreement with Borsato to ensure that materials discussed during the meeting would remain conﬁdential. Clausi also stamped many of the documents that he received
from Learning Curve during the meeting as conﬁdential because they
included information on products not yet released to the public. PlayWood never disclosed the contents of Learning Curve’s documents to
anyone.
During March of 1993, PlayWood and Learning Curve met on
three separate occasions to discuss further the possibility of PlayWood manufacturing Learning Curve’s Thomas products. At one of
the meetings, and at Learning Curve’s request, PlayWood submi ed
a manufacturing proposal for the Thomas products. Learning Curve
rejected PlayWood’s proposal. Learning Curve told Clausi that its licensor wanted the Thomas products to be made in the United States.
Thereafter, PlayWood had no contact with Learning Curve until late October of 1993, when Abraham contacted Clausi to discuss
another possible manufacturing contract because Learning Curve’s
secondary supplier was not providing enough product. Again, PlayWood submi ed a manufacturing proposal at Learning Curve’s request, but it too was rejected. Learning Curve later stated that its new
business partner had decided to manufacture the product in China.
Clausi and Moore continued to work on PlayWood’s toy concepts.
After the 1994 New York Toy Fair, which was not particularly successful for PlayWood, Clausi and Moore began to focus their eﬀorts
on reﬁning PlayWood’s concept for the noise-producing track. During this time, Clausi and Moore made no a empt to license or sell the
concept to other toy companies because they believed that PlayWood
still had “an opportunity to get in the door” with Learning Curve if
they could perfect the concept and also because they believed that
they were bound by a conﬁdentiality agreement.
In December of 1994, while shopping for additional track with

# 08/&34)*1

which to experiment, Moore discovered that Learning Curve was selling noise-producing track under the name “Clickety-Clack Track.”
Like the piece of track that Clausi had Borsato cut during PlayWood’s
February 18, 1993, meeting with Learning Curve, Clickety-Clack
Track™ has parallel grooves cut into the wood, which cause a “clacking” sound as train wheels roll over the grooves. Learning Curve was
promoting the new track as
the ﬁrst signiﬁcant innovation in track design since the inception of wooden train systems.... It is quite simply the
newest and most exciting development to come along recently in the wooden train industry, and it’s sure to cause
a sensation in the marketplace.... [I]t brings that sound
and feel of the real thing to a child’s world of make-believe
without bells, whistles, electronic sound chips or moving
parts.
PlayWood promptly wrote a cease and desist le er to Learning Curve.
The le er accused Learning Curve of stealing PlayWood’s concept
for the noise-producing track that it disclosed to Learning Curve “in
conﬁdence in the context of a manufacturing proposal.” Learning
Curve responded by seeking a declaratory judgment that it owned
the concept.
Previously, on March 16, 1994, Learning Curve had applied for
a patent on the noise-producing track. The patent, which was obtained on October 3, 1995, claims the addition of parallel impressions
or grooves in the rails, which cause a “clacking” sound to be emi ed
as train wheels roll over them. The patent identiﬁes Roy Wilson of
Learning Curve as the inventor.
Clickety-Clack Track™provided an enormous boost to Learning
Curve’s sales. Learning Curve had $20 million in track sales by the
ﬁrst quarter of 2000, and $40 million for combined track and accessory
sales.
II. D
The parties agree that their dispute is governed by the Illinois Trade
Secrets Act (“Act”). To prevail on a claim for misappropriation of a
trade secret under the Act, the plaintiﬀ must demonstrate that the
information at issue was a trade secret, that it was misappropriated
and that it was used in the defendant’s business. The issue currently
before us is whether there was legally suﬃcient evidence for the jury
to ﬁnd that PlayWood had a trade secret in its concept for the noiseproducing toy railroad track that it revealed to Learning Curve on
February 18, 1993.
Although the Act explicitly deﬁnes a trade secret in terms of [actual secrecy and reasonable eﬀorts], Illinois courts frequently refer

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to six common law factors (which are derived from § 757 of the Restatement (First) of Torts) in determining whether a trade secret exists: (1) the extent to which the information is known outside of the
plaintiﬀ’s business; (2) the extent to which the information is known
by employees and others involved in the plaintiﬀ’s business; (3) the
extent of measures taken by the plaintiﬀ to guard the secrecy of the
information; (4) the value of the information to the plaintiﬀ’s business and to its competitors; (5) the amount of time, eﬀort and money
expended by the plaintiﬀ in developing the information; and (6) the
ease or diﬃculty with which the information could be properly acquired or duplicated by others.
Contrary to Learning Curve’s contention, we do not construe the
foregoing factors as a six-part test, in which the absence of evidence
on any single factor necessarily precludes a ﬁnding of trade secret
protection. Instead, we interpret the common law factors as instructive guidelines for ascertaining whether a trade secret exists under
the Act.
1. Extent to which PlayWood’s concept for noise-producing toy railroad
track was known outside of PlayWood’s business
PlayWood presented substantial evidence from which the jury could
have determined that PlayWood’s concept for noise-producing toy
railroad track was not generally known outside of Playwood’s business. It was undisputed at trial that no similar track was on the
market until Learning Curve launched Clickety-Clack Track™ in late
1994, more than a year after PlayWood ﬁrst conceived of the concept.
Of course, as Learning Curve correctly points out, merely being the
ﬁrst or only one to use particular information does not in and of itself
transform otherwise general knowledge into a trade secret. If it did,
the ﬁrst person to use the information, no ma er how ordinary or
well known, would be able to appropriate it to his own use under the
guise of a trade secret. However, in this case, there was additional evidence from which the jury could have determined that PlayWood’s
concept was not generally known within the industry.
First, there was substantial testimony that Learning Curve had attempted to diﬀerentiate its track from that of its competitors for several months, but that it had been unable to do so successfully.
Furthermore, PlayWood’s expert witness, Michael Kennedy, testiﬁed that PlayWood’s concept, as embodied in Clickety-Clack
Track™, was unique and permi ed “its seller to diﬀerentiate itself
from a host of competitors who [were] making a generic product.”
Kennedy explained that the look, sound and feel of the track made
it distinct from other toy railroad track: “[W]hen a child runs a train
across this track, he can feel it hi ing those li le impressions. And
when you’re talking about young children[,] having the idea that they

# 08/&34)*1

can see something that they couldn’t see before, feel something that
they couldn’t feel before, hear something that they couldn’t hear before, that is what diﬀerentiates this toy from its other competitors.”
Finally, PlayWood presented evidence that Learning Curve
sought and obtained a patent on the noise-producing track. It goes
without saying that the requirements for patent and trade secret protection are not synonymous. Unlike a patentable invention, a trade
secret need not be novel or unobvious. The idea need not be complicated; it may be intrinsically simple and nevertheless qualify as a
secret, unless it is common knowledge and, therefore, within the public domain. However, it is commonly understood that if an invention
has suﬃcient novelty to be entitled to patent protection, it may be
said a fortiori to be entitled to protection as a trade secret.
2. Extent to which PlayWood’s concept was known to employees and others
involved in PlayWood’s business
We agree with PlayWood that the evidence was suﬃcient to establish
that its concept for noise-producing track was known only by key
individuals in its business.
At the outset, we note brieﬂy that PlayWood was a small business,
consisting only of Clausi and Moore. Illinois courts have recognized
on several occasions that the expectations for ensuring secrecy are
diﬀerent for small companies than for large companies. Apart from
Clausi (PlayWood’s sole toy designer and the person who conceived
of the concept for noise-producing track) and Moore (PlayWood’s
sole oﬃcer and director), the only person who knew about the concept was Borsato, the person who physically produced PlayWood’s
prototype at Clausi’s direction. The concept was disclosed to Borsato
in order for PlayWood to develop fully its trade secret. Moreover,
Borsato’s actions were governed by a wri en conﬁdentiality agreement with PlayWood. Indeed, as an extra precaution, Clausi even
amended PlayWood’s conﬁdentiality agreement with Borsato immediately after the February 18, 1993, meeting to ensure that materials
discussed during the meeting would remain conﬁdential.
3. Measures taken by PlayWood to guard the secrecy of its concept
There also was suﬃcient evidence for the jury to determine that PlayWood took reasonable precautions to guard the secrecy of its concept.
The Act requires the trade secret owner to take actions that are “reasonable under the circumstances to maintain [the] secrecy or conﬁdentiality” of its trade secret; it does not require perfection. Whether
the measures taken by a trade secret owner are suﬃcient to satisfy the
Act’s reasonableness standard ordinarily is a question of fact for the
jury. Indeed, we previously have recognized that only in an extreme
case can what is a “reasonable” precaution be determined, because

$)"15&3  53"%& 4&$3&5

the answer depends on a balancing of costs and beneﬁts that will vary
from case to case.
Here, the jury was instructed that it must ﬁnd “by a preponderance of the evidence that PlayWood’s trade secrets were given to
Learning Curve as a result of a conﬁdential relationship between
the parties.” By returning a verdict in favor of PlayWood, the jury
necessarily found that Learning Curve was bound to PlayWood by
a pledge of conﬁdentiality. The jury’s determination is amply supported by the evidence. Both Clausi and Moore testiﬁed that they
entered into an oral conﬁdentiality agreement with Abraham and
Wilson before beginning their discussion on February 18, 1993. In
particular, Clausi testiﬁed that he told Abraham and Wilson: “I also
have some things, some ideas on how to produce the track and produce the trains now that I’ve had a chance to look at them for the last
couple of days, and I think they’re conﬁdential as well. So if we’re
both okay with that, we should continue.” In addition to this testimony, the jury heard that Learning Curve had disclosed substantial
information to PlayWood during the February 18th meeting, including projected volumes, costs and proﬁt margins for various products,
as well as drawings for toys not yet released to the public. The jury
could have inferred that Learning Curve would not have disclosed
such information in the absence of a conﬁdentiality agreement. Finally, the jury also heard (from several of Learning Curve’s former
business associates) that Learning Curve routinely entered into oral
conﬁdentiality agreements like the one with PlayWood.
PlayWood might have done more to protect its secret. As Learning Curve points out, PlayWood gave its only prototype of the noiseproducing track to Wilson without ﬁrst obtaining a receipt or written conﬁdentiality agreement from Learning Curve—a decision that
proved unwise in hindsight. Nevertheless, we believe that the jury
was entitled to conclude that PlayWood’s reliance on the oral conﬁdentiality agreement was reasonable under the circumstances of this
case. First, it is well established that the formation of a conﬁdential relationship imposes upon the disclosee the duty to maintain the information received in the utmost secrecy and that the unprivileged use
or disclosure of another’s trade secret becomes the basis for an action
in tort. Second, both Clausi and Moore testiﬁed that they believed
PlayWood had a realistic chance to “get in the door” with Learning
Curve and to produce the concept as part of Learning Curve’s line of
Thomas products. Clausi and Moore did not anticipate that Learning Curve would violate the oral conﬁdentiality agreement and utilize PlayWood’s concept without permission; rather, they believed in
good faith that they “were going to do business one day again with
Learning Curve with respect to the design concept.” Finally, we believe that, as part of the reasonableness inquiry, the jury could have

# 08/&34)*1

considered the size and sophistication of the parties, as well as the
relevant industry. Both PlayWood and Learning Curve were small
toy companies, and PlayWood was the smaller and less experienced
of the two.
4. Value of the concept to PlayWood and to its competitors
There was substantial evidence from which the jury could have determined that PlayWood’s concept had value both to PlayWood and
to its competitors. It was undisputed at trial that Learning Curve’s
sales skyrocketed after it began to sell Clickety-Clack Track™. In
addition, PlayWood’s expert witness, Michael Kennedy, testiﬁed
that PlayWood’s concept for noise-producing track had tremendous
value. Kennedy testiﬁed that the “cross-cuts and changes in the
[track’s] surface” imparted value to its seller by causing the track to
“look diﬀerent, feel diﬀerent and sound diﬀerent than generic track.”
Kennedy further testiﬁed that, in his opinion, the track would have
commanded a premium royalty under a negotiated license agreement because the “invention allows its seller to diﬀerentiate itself
from a host of competitors who are making a generic product with
whom it is competing in a way that is proprietary and exclusive, and
it gives [the seller] a signiﬁcant edge over [its] competition.”
Despite this evidence, the district court concluded that PlayWood’s concept had no economic value. The court’s conclusion was
based, in part, on the fact that PlayWood’s prototype did not work
perfectly; as noted by the court, the ﬁrst set of cuts were too shallow
to produce sound and the second set of cuts were too deep to permit the train to roll smoothly across the track. In the district court’s
view, even if the concept of cu ing grooves into the wooden track
in order to produce noise originated with Clausi, the concept lacked
value until it was reﬁned, developed and manufactured by Learning
Curve.
We cannot accept the district court’s conclusion because it is belied by the evidence. At trial, Kennedy was asked whether, in his
opinion, the fact that PlayWood’s prototype did not work perfectly affected the value of PlayWood’s concept, and he testiﬁed that it did not.
Kennedy testiﬁed that he would assign the same value to PlayWood’s
concept as it was conceived on February 18, 1993, as he would the
ﬁnished product that became known as Clickety-Clack Track™ because, at that time, he would have known “that most of the design
[had] already been done and that [he] just need[ed] to go a li le bit
further to make it really lovely.” Kennedy further testiﬁed that it was
standard practice in the industry for a license to be negotiated based
on a prototype (much like the one PlayWood disclosed to Learning
Curve) rather than a ﬁnished product and that the license generally
would cover the prototypical design, as well as any enhancements

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or improvements of that design. Based on this testimony, we cannot
accept the district court’s conclusion that PlayWood’s concept possessed no economic value.
It is irrelevant under Illinois law that PlayWood did not actually
use the concept in its business. The proper criterion is not ‘actual use’
but whether the trade secret is “of value” to the company. Kennedy’s
testimony was more than suﬃcient to permit the jury to conclude that
the concept was “of value” to PlayWood. It is equally irrelevant that
PlayWood did not seek to patent its concept. So long as the concept
remains a secret, i.e., outside of the public domain, there is no need for
patent protection. Professor Milgrim makes this point well: “Since
every inventor has the right to keep his invention secret, one who has
made a patentable invention has the option to maintain it in secrecy,
relying upon protection accorded to a trade secret rather than upon
the rights which accrue by a patent grant.” It was up to PlayWood,
not the district court, to determine when and how the concept should
have been disclosed to the public.
5. Amount of time, eﬀort and money expended by PlayWood in developing
its concept
PlayWood expended very li le time and money developing its concept; by Clausi’s own account, the cost to PlayWood was less than
one dollar and the time spent was less than one-half hour. The district court determined that “such an insigniﬁcant investment is insufﬁcient as a ma er of Illinois law to establish the status of a ‘trade
secret.’” We believe that the district court gave too much weight to
the time, eﬀort and expense of developing the track.
A signiﬁcant expenditure of time and/or money in the production
of information may provide evidence of value. However, we do not
understand Illinois law to require such an expenditure in all cases.
As pointed out by the district court, several Illinois cases have
emphasized the importance of developmental costs. However, notably, none of those cases concerned the sort of innovative and creative concept that we have in this case. Indeed, several of the cases in
Illinois that emphasize developmental costs concern compilations of
data, such as customer lists. In that context, it makes sense to require
the expenditure of signiﬁcant time and money because there is nothing original or creative about the alleged trade secret. Given enough
time and money, we presume that the plaintiﬀ’s competitors could
compile a similar list.
Here, by contrast, we are dealing with a new toy design that has
been promoted as “the ﬁrst signiﬁcant innovation in track design
since the inception of wooden train systems.” Toy designers, like
many artistic individuals, have intuitive ﬂashes of creativity. Often,
that intuitive ﬂash is, in reality, the product of earlier thought and

# 08/&34)*1

practice in an artistic craft. We fail to see how the value of PlayWood’s
concept would diﬀer in any respect had Clausi spent several months
and several thousand dollars creating the noise-producing track.
6. Ease or diﬃculty with which PlayWood’s concept could have been properly acquired or duplicated by others
Finally, we also believe that there was suﬃcient evidence for the jury
to determine that PlayWood’s concept could not have been easily acquired or duplicated through proper means. PlayWood’s expert witness, Michael Kennedy, testiﬁed: “This is a fairly simple product if
you look at it. But the truth is that because it delivers feeling and
sound as well as appearance, it isn’t so simple as it ﬁrst appears. It’s
a li le more elegant, actually, than you might think.” In addition to
Kennedy’s testimony, the jury heard that Learning Curve had spent
months a empting to diﬀerentiate its track from Brio’s before Clausi
disclosed PlayWood’s concept of noise-producing track. From this
evidence, the jury could have inferred that, if PlayWood’s concept
really was obvious, Learning Curve would have thought of it earlier.
Despite this evidence, the district court concluded that PlayWood’s concept was not a trade secret because it could have been
easily duplicated, stating that “[h]ad PlayWood succeeded in producing and marketing [the] notched track, the appearance of the track
product itself would have fully revealed the concept PlayWood now
claims as a secret.” Of course, the district court was correct in one
sense; PlayWood’s own expert recognized that, in the absence of
patent or copyright protection, the track could have been reverse engineered just by looking at it. However, the district court failed to
appreciate the fact that PlayWood’s concept was not publicly available. As Professor Milgrim states: “A potent distinction exists between a trade secret which will be disclosed if and when the product
in which it is embodied is placed on sale, and a ’trade secret’ embodied in a product which has been placed on sale, which product admits
of discovery of the ’secret’ upon inspection, analysis, or reverse engineering. Until disclosed by sale the trade secret should be entitled to
protection.” see also Callmann (“The fact that a secret is easy to duplicate after it becomes known does not militate against its being a trade
secret prior to that time.”). Reverse engineering can defeat a trade secret claim, but only if the product could have been properly acquired
by others, as is the case when the product is publicly sold. Here, PlayWood disclosed its concept to Learning Curve (and Learning Curve
alone) in the context of a conﬁdential relationship; Learning Curve
had no legal authority to reverse engineer the prototype that it received in conﬁdence. Accordingly, we must conclude that the jury
was entitled to determine that PlayWood’s concept could not easily

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have been acquired or duplicated through proper means.
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Exploit brokers are in the business of helping people defeat computer
security. Governments want to thumb through the hard drives of terrorists, criminals, and dissidents. Identity thieves want passwords
and bank account numbers. Extortionists want to delete data and
hold it for ransom. Corporate spies want access to competitors’ computers. All of them are willing to pay handsomely for the technical
tools that enable them to do so. These tools are typically built around
”exploits”: short pieces of software that take advantage of bugs in
commonly-used software like Windows, Adobe Flash, and iOS. As
soon as as software companies learn about these bugs, they race to
issue updates to ﬁx them; once that happens, any exploits based on
those bugs stop working. Thus, secrecy is essential to the exploit business in two ways: many of the uses are illegal, and exploits become
worthless soon after they become public knowledge.
Can exploit brokers – who buy exploits from the computer security experts who discover them and then resell those exploits to various clients – rely on trade secret law? Should they be able to? Do the
materials in this chapter and the previous one shed any light on how
you would expect the exploit business to work, and how it ought to
be regulated?

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Because there is no requirement that a trade secret be unique – more
than one person can have the same information and each has a valid
and independent trade secret provided the other requirements are
met – trade secret does not generally raise diﬃcult issues about which
of several competing claimants developed the information ﬁrst.

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Allocation of ownership between employers and employees. – The
law of agency has established rules governing the ownership of
valuable information created by employees during the course of
an employment relationship. See Restatement, Second, Agency
§ 397. In the absence of a contrary agreement, the law ordinarily assigns ownership of an invention or idea to the person who
conceives it. However, valuable information that is the product of an employee’s assigned duties is owned by the employer,

# 08/&34)*1

even when the information results from the application of the
employee’s personal knowledge or skill.
An employee is ordinarily entitled to claim ownership of
patents and trade secrets developed outside the scope of the
employee’s assigned duties, even if the invention or idea relates to the employer’s business and was developed using the
employer’s time, personnel, facilities, or equipment. In the latter circumstances, however, the employer is entitled to a “shop
right”—an irrevocable, nonexclusive, royalty-free license to use
the innovation. Similarly, employees retain ownership of information comprising their general skill, knowledge, training, and
experience.
Although the rules governing ownership of valuable information created during an employment relationship are most
frequently applied to inventions, the rules are also applicable to
information such as customer lists, marketing ideas, and other
valuable business information. If an employee collects or develops such information as part of the assigned duties of the employment, the information is owned by the employer. Thus, if
the information qualiﬁes for protection as a trade secret, unauthorized use or disclosure will subject the employee to liability.
cmt. g. Contractual protection. – Absent an applicable statutory prohibition, agreements relating to the ownership of inventions and
discoveries made by employees during the term of the employment are generally enforceable according to their terms. Employment agreements sometimes include provisions granting
the employer ownership of all inventions and discoveries conceived by the employee during the term of the employment. In
some situations, however, it may be diﬃcult to prove when a
particular invention was conceived. The employee may have an
incentive to delay disclosure of the invention until after the employment is terminated in order to avoid the contractual or common law claims of the employer. It may also be diﬃcult to establish whether a post-employment invention was improperly
derived from the trade secrets of the former employer. Some
employment agreements respond to this uncertainty through
provisions granting the former employer ownership of inventions and discoveries relating to the subject ma er of the former employment that are developed by the employee even after the termination of the employment. Such agreements can
restrict the former employee’s ability to exploit the skills and
training desired by other employers and may thus restrain competition and limit employee mobility. The courts have therefore
subjected such “holdover” agreements to scrutiny analogous to

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that applied to covenants not to compete. Thus, the agreement
may be unenforceable if it extends beyond a reasonable period
of time or to inventions or discoveries resulting solely from the
general skill and experience of the former employee.

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The most important – and arguably the only – procedural prerequisite to having a valid trade secret is making reasonable eﬀorts to preserve its secrecy. There is no requirement that the owner of a trade
secret register it as one with a government agency, or take other formal steps to identify the secret in advance. Remember that everyone
agrees a trade secret must actually be secret to be protected; what
does a reasonable eﬀorts requirement add? Why?
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One ingredient of a trade secret is that “the owner thereof has taken
reasonable measures to keep such information secret”. Lange contends that the proof fell short, but a sensible trier of fact could have
concluded that RAPCO took “reasonable measures to keep the information secret”. RAPCO stores all of its drawings and manufacturing data in its CAD room, which is protected by a special lock, an
alarm system, and a motion detector. The number of copies of sensitive information is kept to a minimum; surplus copies are shredded.
Some information in the plans is coded, and few people know the
keys to these codes. Drawings and other manufacturing information
contain warnings of RAPCO’s intellectual property rights; every employee receives a notice that the information with which he works is
conﬁdential. None of RAPCO’s subcontractors receives full copies
of the schematics; by dividing the work among vendors, RAPCO ensures that none can replicate the product. This makes it irrelevant
that RAPCO does not require vendors to sign conﬁdentiality agreements; it relies on deeds (the spli ing of tasks) rather than promises
to maintain conﬁdentiality. Although, as Lange says, engineers and
drafters knew where to get the key to the CAD room door, keeping
these employees out can’t be an ingredient of “reasonable measures
to keep the information secret”; then no one could do any work. So
too with plans sent to subcontractors, which is why dissemination to
suppliers does not undermine a claim of trade secret.
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$ 130$&%63&4

Information is protectable as a trade secret where the owner has taken
eﬀorts that are reasonable under the circumstances to maintain its secrecy. “Reasonable eﬀorts” can include advising employees of the existence of a trade secret, limiting access to the information on a “need
to know basis,” and keeping secret documents under lock. The court
ﬁnds that RTC has put forward suﬃcient evidence that it took steps
that were reasonable under the circumstances to protect its purported
trade secrets. RTC’s president describes elaborate means taken to ensure the conﬁdentiality of the Advanced Technology works, including use of locked cabinets, safes, logging and identiﬁcation of the materials, availability of the materials at only a handful of sites worldwide, electronic sensors a ached to documents, locked briefcases for
transporting works, alarms, photo identiﬁcations, security personnel,
and conﬁdentiality agreements for all of those given access to the materials. McShane testiﬁes that all copies of the Advanced Technology
works that are outside of the Church were gained through improper
means, such as by theft. Thirty-ﬁve other declarants conﬁrm that the
measures mentioned by McShane have been used, though not in exactly the same manner, in other Churches and at other times. There
is further evidence that Erlich himself signed conﬁdentiality agreements with respect to the Advanced Technology materials and, specifically, the upper-level “NOTS” course materials. The court is unpersuaded by Erlich’s claims that the Church’s measures have not covered all locations where the Advanced Technology works are found
and do not cover crucial time periods. Eﬀorts at maintaining secrecy
need not be extreme, just reasonable under the circumstances. The
Church has made more than an adequate showing on this issue.25
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The requirement of reasonable eﬀorts has both evidentiary and remedial signiﬁcance, and this regardless of which of the two diﬀerent conceptions of trade secret protection prevails. (Both conceptions have
footholds in Illinois law, as we shall see.) The ﬁrst and more common
merely gives a remedy to a ﬁrm deprived of a competitively valuable secret as the result of an independent legal wrong, which might
25

The notion that the Church’s trade secrets are disclosed to thousands of parishioners makes this a rather unusual trade secrets case. However, because parishioners are required to maintain the secrecy of the materials, the court sees no reason why the mere fact that many people have seen the information should negate
the information’s trade secret status. While it is logically more likely that a secret
will leak out when more people are entrusted with it, absent evidence of leakage
the court ﬁnds that giving out the secrets to a large number of people, though no
more than necessary, is not itself an unreasonable security step.

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be conversion or other trespass or the breach of an employment contract or of a conﬁdentiality agreement. Under this approach, because
the secret must be taken by improper means for the taking to give
rise to liability, the only signiﬁcance of trade secrecy is that it allows
the victim of wrongful appropriation to obtain damages based on the
competitive value of the information taken. The second conception
of trade secrecy is that “trade secret” picks out a class of socially valuable information that the law should protect even against nontrespassory or other lawful conduct.
It should be apparent that the two diﬀerent conceptions of trade
secret protection are be er described as diﬀerent emphases. The ﬁrst
emphasizes the desirability of deterring eﬀorts that have as their sole
purpose and eﬀect the redistribution of wealth from one ﬁrm to another. The second emphasizes the desirability of encouraging inventive activity by protecting its fruits from eﬀorts at appropriation that
are, indeed, sterile wealth-redistributive – not productive – activities.
The approaches diﬀer, if at all, only in that the second does not limit
the class of improper means to those that ﬁt a preexisting pigeonhole
in the law of tort or contract or ﬁduciary duty – and it is by no means
clear that the ﬁrst approach assumes a closed class of wrongful acts,
either.
Under the ﬁrst approach, at least if narrowly interpreted so that
it does not merge with the second, the plaintiﬀ must prove that the
defendant obtained the plaintiﬀ’s trade secret by a wrongful act, illustrated here by the alleged acts of Fleck and Peloso in removing
piece part drawings from Rockwell’s premises without authorization,
in violation of their employment contracts and conﬁdentiality agreements, and using them in competition with Rockwell. Rockwell is
unable to prove directly that the 100 piece part drawings it got from
DEV in discovery were stolen by Fleck and Peloso or obtained by
other improper means. But if it can show that the probability that
DEV could have obtained them otherwise – that is, without engaging
in wrongdoing – is slight, then it will have taken a giant step toward
proving what it must prove in order to recover under the ﬁrst theory
of trade secret protection. The greater the precautions that Rockwell
took to maintain the secrecy of the piece part drawings, the lower
the probability that DEV obtained them properly and the higher the
probability that it obtained them through a wrongful act; the owner
had taken pains to prevent them from being obtained otherwise.
Under the second theory of trade secret protection, the owner’s
precautions still have evidentiary signiﬁcance, but now primarily as
evidence that the secret has real value. For the precise means by
which the defendant acquired it is less important under the second
theory, though not completely unimportant; remember that even the
second theory allows the unmasking of a trade secret by some means,

$ 130$&%63&4

such as reverse engineering. If Rockwell expended only paltry resources on preventing its piece part drawings from falling into the
hands of competitors such as DEV, why should the law, whose machinery is far from costless, bother to provide Rockwell with a remedy? The information contained in the drawings cannot have been
worth much if Rockwell did not think it worthwhile to make serious
eﬀorts to keep the information secret.
The remedial signiﬁcance of such eﬀorts lies in the fact that if the
plaintiﬀ has allowed his trade secret to fall into the public domain,
he would enjoy a windfall if permi ed to recover damages merely
because the defendant took the secret from him, rather than from the
public domain as it could have done with impunity. It would be like
punishing a person for stealing property that he believes is owned
by another but that actually is abandoned property. If it were true,
as apparently it is not, that Rockwell had given the piece part drawings at issue to customers, and it had done so without requiring the
customers to hold them in conﬁdence, DEV could have obtained the
drawings from the customers without commi ing any wrong. The
harm to Rockwell would have been the same as if DEV had stolen the
drawings from it, but it would have had no remedy, having parted
with its rights to the trade secret. This is true whether the trade secret is regarded as property protected only against wrongdoers or as
property protected against the world. In the ﬁrst case, a defendant is
perfectly entitled to obtain the property by lawful conduct if he can,
and he can if the property is in the hands of persons who themselves
commi ed no wrong to get it. In the second case the defendant is perfectly entitled to obtain the property if the plaintiﬀ has abandoned it
by giving it away without restrictions.
It is easy to understand therefore why the law of trade secrets requires a plaintiﬀ to show that he took reasonable precautions to keep
the secret a secret. If analogies are needed, one that springs to mind
is the duty of the holder of a trademark to take reasonable eﬀorts to
police infringements of his mark, failing which the mark is likely to
be deemed abandoned, or to become generic or descriptive (and in
either event be unprotectable). The trademark owner who fails to police his mark both shows that he doesn’t really value it very much
and creates a situation in which an infringer may have been unaware
that he was using a proprietary mark because the mark had drifted
into the public domain, much as DEV contends Rockwell’s piece part
drawings have done.
But only in an extreme case can what is a “reasonable” precaution
be determined on a motion for summary judgment, because the answer depends on a balancing of costs and beneﬁts that will vary from
case to case and so require estimation and measurement by persons
knowledgeable in the particular ﬁeld of endeavor involved. On the

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one hand, the more the owner of the trade secret spends on preventing the secret from leaking out, the more he demonstrates that the
secret has real value deserving of legal protection, that he really was
hurt as a result of the misappropriation of it, and that there really was
misappropriation. On the other hand, the more he spends, the higher
his costs. The costs can be indirect as well as direct. The more Rockwell restricts access to its drawings, either by its engineers or by the
vendors, the harder it will be for either group to do the work expected
of it. Suppose Rockwell forbids any copying of its drawings. Then
a team of engineers would have to share a single drawing, perhaps
by passing it around or by working in the same room, huddled over
the drawing. And how would a vendor be able to make a piece part
– would Rockwell have to bring all that work in house? Such reconﬁgurations of pa erns of work and production are far from costless;
and therefore perfect security is not optimum security.

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The essence of trade secret misappropriation is to obtain or use secret information acquired through “improper means.” Note that this
essence includes an implicit requirement that the information the defendant obtained or used is the same information the plaintiﬀ claims
as a trade secret.
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Big Vision’s second argument is that DuPont’s recyclable banner
product lines misappropriate Big Vision’s trade secret. Quite simply, Big Vision cannot demonstrate that its recyclable banners are
substantially similar to DuPont’s. The parties do not dispute that
DuPont’s recyclable banner products are not made by either lamination or coextrusion. None of DuPont’s recyclable banner products
use the three-layer structures tested at the Trials, the range of CaCO3
tested at the Trials, or “minimal” amounts of Entira (to the extent it
has been deﬁned), since DuPont’s products either use 100% or 0%
Entira. Furthermore, DuPont’s recyclable banner products are not
printable with solvent ink. Thus, to the extent Big Vision’s trade secret is discernible, DuPont’s products implicate almost none of its
elements.60
60

Plaintiﬀ argues that because DuPont’s banners do not exhibit the four-item
“wish list” that Big Vision’s trade secret is supposed to cause, DuPont must have
ineptly misappropriated its trade secret. While clever, this argument is not a fair
reading of the record, which makes clear that DuPont’s recyclable banners are simply not substantially similar to Big Vision’s alleged trade secret.

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

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Before you dive into the new cases, look back at Netcom, Lange, Rockwell, and Learning Curve. You read them as cases on the existence of
trade secrets. They are also cases on misappropriation. What did the
defendants in each case do? Was it misappropriation? This duality
is typical of intellectual property cases. Both protectability and misappropriation are required to ﬁnd a defendant liable, which means
that both protectability and misappropriation are potentially in play
in every case. A trade secret defendant can win by showing that the
plaintiﬀ lacked a valid protectable trade secret in the ﬁrst place, or by
showing that the defendant did not misappropriate that trade secret.

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In the enormous record before the court, there is no direct evidence
that ARCO used Grynberg’s information in evaluating Tengiz or the
Caspian pipeline. How ARCO came to make those investments is no
mystery however: engineers and executives alike have testiﬁed in detail as to the evaluation and decision-making process. With respect to
both investments, publically available resources were used initially,
and then supplemented at length in data rooms set up by the organizations managing the investment – for Tengiz the Chevron data
room and for the Caspian Pipeline the Oman data room. Further, although plaintiﬀ’s experts state generally that the publically available
sources were inferior to Grynberg’s information, plaintiﬀ concedes
that his information – obtained in 1989-90 – was ”outdated” by 1996.
Moreover, plaintiﬀ admits that when Chevron invested in Tengiz it
had been given access by the Kazakhs to all the information to which
Grynberg was privy, information that would have been available in
the comprehensive and up to date data rooms prepared for ARCO
when it reviewed the Tengiz investment years later.
Plaintiﬀ argues that ARCO’s alleged use can be proven circumstantially, in much the same way that “use of a trade secret can be
proven by showing access to the trade secret plus the subsequent similarity of the trade secret and a Defendant’s product.” Indeed, the law
of trade secrets acknowledges the basic logic that when two products look alike, there is probably more than a coincidental connection between them. See Electro-Miniatures Corp. v. Wendon Co. (misappropriation provable by circumstantial evidence where company
that had struggled to produce printed circuit slip rings suddenly “issued a catalog depicting an entire line of printed circuit slip ring assemblies, resembling those built by the plaintiﬀ”). Nor is there any

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inherent reason to limit this approach to cases involving products
(electrical or otherwise). Logically, in any case where what is done
or produced by the alleged thief bears some unique markers of the
allegedly stolen secrets, it may be inferred that the thief used the secrets. Thus in Rochester Midland Corp. v. Enerco Corp., use of pricing,
product, and customer information could be inferred where eighteen
accounts associated with a poached employee switched to the defendant company shortly after the conﬁdential information was brought
over. However, the inference is only as strong as logic demands –
where an alleged thief’s products lack a suspicious similarity to the
secrets, the inference would not lie.
Grynberg could make a circumstantial case for use under this theory, then, only to the extent that ARCO’s actions bore the unique
marks of his information, or showed a suspicious similarity to it.
ARCO did eventually make investments in Tengiz and the Caspian
pipeline, which were among the investments that Grynberg had endorsed and relayed information about. However ARCO also declined to pursue other investments Grynberg had advocated, such as
the Karachaganak oil ﬁeld also in the area of mutual interest. Moreover nothing about ARCO’s investments bears the markers of the
Grynberg information in such a way as to justify inferring the use
of that information. It is not as if ARCO built wells at particular locations previously suggested by Grynberg, worked primarily through
contacts developed by Grynberg, or tied its investments to Grynberg’s numbers in a suspiciously similar way. Rather, an oil company
chose to invest in one of the largest oil ﬁelds in the world, in a manner
diﬀerent from that envisioned by Grynberg at the time he developed
his proposed consortium. That it did so is unsurprising and does not
evince the kind of suspicious similarity present in Electro-Miniatures
and Rochester Midland. Accordingly an inference of use based on similarity is not appropriate here.

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“Improper” means of acquiring another’s trade secret ... include theft,
fraud, unauthorized interception of communications, inducement of
or knowing participation in breach of conﬁdence, and other means
either wrongful in themselves or wrongful under the circumstances
of the case. Independent discovery and analysis of publicly available
products or information are not improper means of acquisition.
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“Improper means” includes theft, bribery, misrepresentation, breach
or inducement of a breach of a duty to maintain secrecy, or espionage
through electronic or other means;

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These lists of ”improper means” can be roughly divided into two
types of wrongful conduct. On the one hand there is espionage, which
often involves theft, trespass, or computer hacking. On the other
hand there is breach of conﬁdence, which often involves violating a
promise to keep someone else’s secrets. It is tempting to to conclude
that “improper means” consist of torts (espionage) and breach of contract (breach of conﬁdence), but this equation is a li le too pat.
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This is a case of industrial espionage in which an airplane is the cloak
and a camera the dagger. The defendants-appellants, Rolfe and Gary
Christopher, are photographers in Beaumont, Texas. The Christophers were hired by an unknown third party to take aerial photographs of new construction at the Beaumont plant of E. I. DuPont de
Nemours & Company, Inc. Sixteen photographs of the DuPont facility were taken from the air on March 19, 1969, and these photographs
were later developed and delivered to the third party.
DuPont subsequently ﬁled suit against the Christophers, alleging
that the Christophers had wrongfully obtained photographs revealing DuPont’s trade secrets which they then sold to the undisclosed
third party. DuPont contended that it had developed a highly secret but unpatented process for producing methanol, a process which
gave DuPont a competitive advantage over other producers. This
process, DuPont alleged, was a trade secret developed after much
expensive and time-consuming research, and a secret which the company had taken special precautions to safeguard. The area photographed by the Christophers was the plant designed to produce
methanol by this secret process, and because the plant was still under construction parts of the process were exposed to view from directly above the construction area. Photographs of that area, DuPont
alleged, would enable a skilled person to deduce the secret process
for making methanol. DuPont thus contended that the Christophers
had wrongfully appropriated DuPont trade secrets by taking the photographs and delivering them to the undisclosed third party.
The Christophers argued both at trial and before this court that
they commi ed no “actionable wrong” in photographing the DuPont
facility and passing these photographs on to their client because they

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conducted all of their activities in public airspace, violated no government aviation standard, did not breach any conﬁdential relation,
and did not engage in any fraudulent or illegal conduct. In short, the
Christophers argue that for an appropriation of trade secrets to be
wrongful there must be a trespass, other illegal conduct, or breach of
a conﬁdential relationship. We disagree.
It is true, as the Christophers assert, that the previous trade secret
cases have contained one or more of these elements. However, we do
not think that the Texas courts would limit the trade secret protection
exclusively to these elements.
Although the previous cases have dealt with a breach of a conﬁdential relationship, a trespass, or other illegal conduct, the rule is
much broader than the cases heretofore encountered. Not limiting
itself to speciﬁc wrongs, Texas adopted subsection (a) of the Restatement which recognizes a cause of action for the discovery of a trade
secret by any “improper” means.
The question remaining, therefore, is whether aerial photography
of plant construction is an improper means of obtaining another’s
trade secret. We conclude that it is and that the Texas courts would
so hold. The Supreme Court of that state has declared that “the undoubted tendency of the law has been to recognize and enforce higher
standards of commercial morality in the business world.” Hyde Corporation v. Huﬃnes. That court has quoted with approval articles indicating that the proper means of gaining possession of a competitor’s
secret process is through inspection and analysis of the product in
order to create a duplicate. Later another Texas court explained:
The means by which the discovery is made may be obvious, and the experimentation leading from known factors
to presently unknown results may be simple and lying
in the public domain. But these facts do not destroy the
value of the discovery and will not advantage a competitor who by unfair means obtains the knowledge without
paying the price expended by the discoverer.”

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Brown v. Fowler. We think, therefore, that the Texas rule is clear. One
may use his competitor’s secret process if he discovers the process
by reverse engineering applied to the ﬁnished product; one may use
a competitor’s process if he discovers it by his own independent research; but one may not avoid these labors by taking the process from
the discoverer without his permission at a time when he is taking reasonable precautions to maintain its secrecy. To obtain knowledge of
a process without spending the time and money to discover it independently is improper unless the holder voluntarily discloses it or
fails to take reasonable precautions to ensure its secrecy.
In the instant case the Christophers deliberately ﬂew over the

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

DuPont plant to get pictures of a process which DuPont had attempted to keep secret. The Christophers delivered their pictures to
a third party who was certainly aware of the means by which they
had been acquired and who may be planning to use the information
contained therein to manufacture methanol by the DuPont process.
The third party has a right to use this process only if he obtains this
knowledge through his own research eﬀorts, but thus far all information indicates that the third party has gained this knowledge solely by
taking it from DuPont at a time when DuPont was making reasonable
eﬀorts to preserve its secrecy. In such a situation DuPont has a valid
cause of action to prohibit the Christophers from improperly discovering its trade secret and to prohibit the undisclosed third party from
using the improperly obtained information.
In taking this position we realize that industrial espionage of the
sort here perpetrated has become a popular sport in some segments
of our industrial community. However, our devotion to free wheeling industrial competition must not force us into accepting the law
of the jungle as the standard of morality expected in our commercial
relations. Our tolerance of the espionage game must cease when the
protections required to prevent another’s spying cost so much that
the spirit of inventiveness is dampened. Commercial privacy must
be protected from espionage which could not have been reasonably
anticipated or prevented. We do not mean to imply, however, that
everything not in plain view is within the protected vale, nor that all
information obtained through every extra optical extension is forbidden. Indeed, for our industrial competition to remain healthy there
must be breathing room for observing a competing industrialist. A
competitor can and must shop his competition for pricing and examine his products for quality, components, and methods of manufacture. Perhaps ordinary fences and roofs must be built to shut out incursive eyes, but we need not require the discoverer of a trade secret
to guard against the unanticipated, the undetectable, or the unpreventable methods of espionage now available.
In the instant case DuPont was in the midst of constructing a plant.
Although after construction the ﬁnished plant would have protected
much of the process from view, during the period of construction the
trade secret was exposed to view from the air. To require DuPont to
put a roof over the unﬁnished plant to guard its secret would impose
an enormous expense to prevent nothing more than a school boy’s
trick. We introduce here no new or radical ethic since our ethos has
never given moral sanction to piracy. The marketplace must not deviate far from our mores. We should not require a person or corporation to take unreasonable precautions to prevent another from doing
that which he ought not do in the ﬁrst place. Reasonable precautions
against predatory eyes we may require, but an impenetrable fortress

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is an unreasonable requirement, and we are not disposed to burden
industrial inventors with such a duty in order to protect the fruits
of their eﬀorts. “Improper” will always be a word of many nuances,
determined by time, place, and circumstances. We therefore need
not proclaim a catalogue of commercial improprieties. Clearly, however, one of its commandments does say “thou shall not appropriate a trade secret through deviousness under circumstances in which
countervailing defenses are not reasonably available.”
Having concluded that aerial photography, from whatever altitude, is an improper method of discovering the trade secrets exposed
during construction of the DuPont plant, we need not worry about
whether the ﬂight pa ern chosen by the Christophers violated any
federal aviation regulations. Regardless of whether the ﬂight was legal or illegal in that sense, the espionage was an improper means of
discovering DuPont’s trade secret.
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For approximately 25 years plaintiﬀ had been employed by a kni ing
mill as a mechanic. In 1953 he entered into the garbage collection
business. From the time plaintiﬀ entered into the garbage collection
business he began thinking of methods of facilitating the loading of
garbage trucks and of compressing or packing the materials after they
were loaded. By 1955 he had done some experimental work on his
own truck, devising a hoist mechanism operated by hydraulic cylinders to lift a bucket from the ground to the top of the truck box. By
this time he had also arrived at the conclusion that the packing of the
loaded materials could best be eﬀected through the use of a hydraulically operated plow which would move against the loaded materials
and compress them against the interior of the truck. At the time plaintiﬀ conceived this solution there were on the market garbage truck
bodies containing various “packer” mechanisms, including hydraulically operated plows. However, plaintiﬀ and defendant apparently
were not aware of the use of hydraulic cylinders for this purpose and
thought that plaintiﬀ’s idea was novel in this respect.
In January, 1955, plaintiﬀ made arrangements with defendant
Kuhnau, president and manager of Oregon Rental Equipment Company, to use the company’s machine shop and one or more of its employees to assist plaintiﬀ in carrying on further experimental work in
developing plaintiﬀ’s ideas. This experimental work was carried on
for approximately one year. According to plaintiﬀ’s evidence, all of
the experimental work was done under his supervision and Kuhnau
had no voice or control as to the manner in which the developmental work was to be carried on. It is Kuhnau’s contention that he and
the employees of Oregon Rental Equipment Company contributed

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

suggestions and ideas which were used in the development and improvement of the truck body and compressor mechanism.
In the course of working on the project several persons who were
engaged in the garbage collection business came to the defendant’s
machine shop, observed the progress being made by plaintiﬀ and
made suggestions as to the practical application of plaintiﬀ’s idea.
Sometime in the summer of 1956 the truck and compressor mechanism which plaintiﬀ was seeking to develop was crystallized substantially in the form in which it now exists.
When plaintiﬀ had completed his experimental work he began to
receive orders for truck bodies embodying his improvements. The
ﬁrst two units sold were manufactured by Oregon Rental Equipment
Company. After the sale of these two units (in the spring of 1956)
Kuhnau terminated his connections with Oregon Rental Equipment
Company. He rented a machine shop at another location and began
business under the name of R.K. Truck Sales. Between May and October, 1956, he manufactured ten units for plaintiﬀ. For each unit Kuhnau received an amount agreed upon by the parties. Plaintiﬀ ﬁxed
the selling price of the unit and his proﬁt consisted of the diﬀerence
between the selling price and the amount he paid Kuhnau.
On or about October 1, 1956, Kuhnau informed plaintiﬀ that he
was going to manufacture truck bodies in competition with plaintiﬀ.
Kuhnau testiﬁed that the relationship was terminated as a result of a
disagreement over the amount he was to receive for manufacturing
the unit for plaintiﬀ. Plaintiﬀ contends that Kuhnau terminated the
relationship for the purpose of entering into competition with plaintiﬀ. The units manufactured by Kuhnau were similar to those which
he had previously manufactured for plaintiﬀ. However, there were
some diﬀerences in the design of the two units. The principal diﬀerence was that Kuhnau mounted the hydraulic cylinder operating the
plow or blade under the truck bed whereas the cylinder in plaintiﬀ’s
truck was above the bed. There was testimony supporting plaintiﬀ’s
assertion that it was his idea to place the cylinder under the bed of
the truck but that suggestion was not adopted because Kuhnau did
not think it was feasible.
Whether the information disclosed was intended to be appropriable by the disclosee will depend upon the relationship of the parties
and the circumstances under which the disclosure was made. It is
not necessary to show that the defendant expressly agreed not to use
the plaintiﬀ’s information; the agreement may be implied. And the
implication may be made not simply as a product of the quest for
the intention of the parties but as a legal conclusion recognizing the
need for ethical practices in the commercial world. In the case at bar
the relationship between plaintiﬀ and Kuhnau was such that an obligation not to appropriate the plaintiﬀ’s improvements could be im-

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plied. Kuhnau was paid to assist plaintiﬀ in the development of the
la er’s idea. It must have been apparent to Kuhnau that plaintiﬀ was
a empting to produce a unit which could be marketed. Certainly it
would not have been contemplated that as soon as the packer unit
was perfected Kuhnau would have the beneﬁt of plaintiﬀ’s ideas and
the perfection of the unit through painstaking and expensive experimentation. It is to be remembered that the plaintiﬀ’s experimentation
was being carried on, not on the assumption that he was duplicating
an existing machine, but upon the assumption that he was creating a
new product. It has been recognized in the cases that a manufacturer
who has been employed to develop an inventor’s ideas is not entitled
to appropriate those ideas to his own use.
Hyde is closely in point. In that case the defendant manufacturer,
having gained knowledge of a garbage compressor through a licensing agreement with the plaintiﬀ inventor, repudiated the agreement
and proceeded to manufacture and sell on its own account a compressor of similar design. Defendant was enjoined. The court held that
the parties were in a conﬁdential relationship and that the information relating to the compressor acquired by the defendant incident to
that relationship could not be appropriated by him. In that case, as in
the present case, plaintiﬀ obtained a patent during the course of the
trial. The defendant argued that since plaintiﬀ’s process was revealed
by the patent the process could not be regarded as a trade secret. The
court held that the public disclosure of plaintiﬀ’s process did not remove defendant’s duty not to exploit the economic advantage gained
through the information initially disclosed to him by plaintiﬀ. We see
no essential diﬀerence between the facts in the Hyde case and the case
at bar.
The principles applied in the foregoing cases have been recognized by this court. In McKinzie v. Cline, the plaintiﬀ employed the defendants to manufacture a gun swivel which one of the plaintiﬀs had
invented. The defendants discontinued manufacturing the swivel for
the plaintiﬀs and proceeded to manufacture and sell it for their own
account. It was held that defendants violated a conﬁdential relationship which existed between the parties and that therefore plaintiﬀs
were entitled to an injunction and damages. In that case, as in the
present one, plaintiﬀs had placed their product on the market and
had discussed its manufacture with various machinists. The court
noted that there was no “evidence in the record that anyone other
than defendant Cline and the plaintiﬀs had any knowledge of the inside workings of the gadget.” The court went further and held that
even though others might have become acquainted with the manufacturing process this would not entitle the defendants to violate the conﬁdence reposed in them by the plaintiﬀs. With respect to this point,
defendants in the present case argue that the McKinzie case is distin-

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

guishable from the case at bar in that the mechanism of the gun swivel
was complex, whereas the mechanism of the garbage truck was not.
The evidence does not support this contention. The description of the
packer mechanism, particularly the manner in which the blade was
a ached (the proper adjustment of which was one of the principal improvements claimed by plaintiﬀ), would indicate that it was of such
complexity that more than a general inspection of the unit would be
required to reveal the secret of plaintiﬀ’s improvements. The McKinzie case followed the line of authority previously discussed which
de-emphasizes the elements of secrecy and novelty and stresses the
breach of the conﬁdential relation between the parties. The court
adopted the higher standard of commercial ethics to which we have
already alluded:
If our system of private enterprise on which our nation has
thrived, prospered and grown great is to survive, fair dealing, honesty and good faith between contracting parties
must be zealously maintained; therefore, if one who has
learned of another’s invention through contractual relationship, such as in the present case, takes unconscionable
and inequitable advantage of the other to his own enrichment and at the expense of the la er, a court of equity will
extend its broad equitable powers to protect the party injured.
We reaﬃrm this declaration of business ethics and hold that defendant Kuhnau violated his duty to plaintiﬀ by appropriating the information derived through their business relationship.
Defendants contend that there was no proof that their product
contained the improvements alleged to have been developed by
plaintiﬀ. There is evidence that the plaintiﬀ’s and defendants’ trucks
were similar in structure and design. The trial judge, who inspected
the trucks, concluded that defendants’ trucks used the improvements
developed by plaintiﬀ. Where a person develops a product similar to
that developed by his discloser, the proof of similarity may be suﬃcient to impose upon the disclosee the burden of proving that there
was no misappropriation. Hoeltke v. C.M. Kemp Mfg. Co. stated: “The
similarity of defendant’s device to that of complainant is strong proof
that one was copied from the other; for it is hardly probable that different persons should independently of each other invent devices so
nearly similar at so nearly the same time.” In the same case the court
said that “one who admi edly receives a disclosure from an inventor, proceeds thereafter to manufacture articles of similar character,
and, when called to account, makes answer that he was using his own
ideas and not the ideas imparted to him” must sustain his position
by proof that is “clear, satisfactory, and beyond a reasonable doubt.”

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We are of the opinion that there was suﬃcient evidence to support the
conclusion that defendants appropriated plaintiﬀ’s improvements.

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If a vice-president at MatrixCorp receives an email from someone calling himself Cypher oﬀering to provide details of a computer graphics technology similar to one used by its competitor NeoCorp, can he
take the deal? A moment’s thought should suggest that the answer
depends on how Cypher obtained the information and on what MatrixCorp knows about it. What about MatrixCorp’s customers? Do
they need to worry that their widgets were produced using a misappropriated trade secret?
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(2)

“Misappropriation” means:
(i) acquisition of a trade secret of another by a person who
knows or has reason to know that the trade secret was acquired by improper means; or
(ii) disclosure or use of a trade secret of another without express or implied consent by a person who
(A) used improper means to acquire knowledge of the
trade secret; or
(B) at the time of disclosure or use, knew or had reason to
know that his knowledge of the trade secret was
(I) derived from or through a person who had utilized
improper means to acquire it;
(II) acquired under circumstances giving rise to a duty
to maintain its secrecy or limit its use; or
(III) derived from or through a person who owed a
duty to the person seeking relief to maintain its secrecy or limit its use; or
(C) before a material change of his [or her] position, knew
or had reason to know that it was a trade secret and
that knowledge of it had been acquired by accident or
mistake.

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The two most signiﬁcant “defenses” to trade secret infringement are
independent discovery and reverse engineering. I put “defenses” in
quotation marks to emphasize that neither adds anything to the doctrines you have already seen. The defendant who establishes that

( 130#-&.4

she independently came up with the same information has actually
defeated a crucial element of the plaintiﬀ’s case-in-chief: that the defendant stole the information from the plaintiﬀ.
Similarly, the usual deﬁnitions of “improper means” simply exclude reverse engineering: the plaintiﬀ who proves only that the defendant reverse engineered her product has again failed to show an
act of misappropriation. Reverse engineering is conventionally deﬁned as “starting with the known product and working backward
to divine the process which aided in its development or manufacture.” Kewanee Oil Co. v. Bicron Corp. Courts sometimes add that the
“known product” must have been obtained lawfully: it is no defense
to argue that you reverse engineered the widget-making-machine
you stole from your competitor’s factory.
Why allow reverse engineering? For one thing, it reﬂects a policy
of recognizing personal property owners’ rights over their things. If
you buy it, you can break it down. Reverse engineering also promotes
the same values as trade secret law itself. In the words of the Supreme
Court, it is “an essential part of innovation” that “often leads to signiﬁcant advances in technology.” Bonito Boats, Inc. v. Thunder Craft
Boats, Inc.

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Moe Szyslak is the owner of Moe’s Tavern, where the specialty drink
is a “Flaming Moe.” Moe mixes the drinks in a back room, then sets
them on ﬁre in front of customers.
1. Representatives from Tipsy McStagger’s Good-Time Drinking
and Eating Emporium meet with Moe to discuss licensing the
recipe. As part of the negotiations, Moe tells them how it’s
made. Tipsy McStagger’s breaks oﬀ talks and start selling its
own version. What result?
2. A Tipsy’s employee orders a Flaming Moe, pours it into a thermos, and uses a gas chromatograph to analyze its chemical composition. By so doing, he learns that the secret ingredient is
cough syrup. What result?
3. A Tipsy’s employee goes to Moe’s Tavern and bribes a bartender to tell her the formula. What result?
4. Same facts as before, except that anyone who tastes the drink
can recognize that it’s cough syrup. The Tipsy’s employee still
bribes the bartender to tell them. What result?
5. Woud Moe be be er oﬀ trying to patent the formula for the
Flaming Moe? Would society be be er oﬀ if he did?

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1. In 2007, the New England Patriots football team videotaped the
hand signals used by coaches for the New York Jets to send instructions to players on the ﬁeld. Anyone in the stadium with
a clear line of sight is able to see the signals. The National Football League’s rules allow for such videotaping, but only from
speciﬁc areas not including the areas the Patriots taped from
(which had be er views). Did the Patriots misappropriate a
trade secret?
2. In 2011, the Houston Astros baseball team hired Jeﬀ Luhnow
as their new general manager. Previously, Luhnow had been
an executive with the St. Louis Cardinals. While with the Cardinals, Luhnow and others build an extensive database with
detailed statistical information about players and reports on
prospective hires. When Luhnow moved to the Astros, several
Cardinals employees went with him. Other Cardinals employees suspected that Luhnow might have helped design a similar
database for the Astros. They guessed that he and the other exCardinal employees might have used the same passwords for
the new Astros system, a guess that turned out to be correct.
The Cardinals employees logged into the Astros system using
these passwords and examined some of the information in it.
Identify all of the trade secret issues these facts raise.
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You represent the Chicago Lock Company, whose “Ace” series of
locks is used in vending machines, burglar alarms, and other highsecurity se ings. Ace locks use an unusual cylindrical key that requires specialized equipment to cut. Each lock has a serial number
printed on it; the company uses a secret formula to translate the conﬁguration of tumblers inside the lock into a serial number. The company’s policy is that it will sell replacement keys only to the registered
owner of a lock with a given serial number. All Ace locks and keys
are stamped “Do Not Duplicate.”
For years, locksmiths have known how to analyze Ace locks. After
a few minutes poking at the lock with their tools, they can write down
the conﬁguration of pins and tumblers inside the lock. They can then
go back to their toolkits and grind a replacement key, which will open
the lock. If the locksmiths keep the conﬁguration information on ﬁle,
they can grind replacement keys in the future without needing to go

) 05)&3 4&$3&$: -"84

back to the lock and analyze it again. Individual locksmiths have, for
years, kept such ﬁles for their local customers.
Recently, Morris and Victor Fanberg, two locksmiths, published
a book entitled “AA Advanced Locksmith’s Tubular Lock Codes.”
They asked locksmiths around the country to send them lists of Ace
lock serial numbers and the corresponding tumbler conﬁgurations.
Based on that information, they were able to program a computer to
reconstruct Chicago’s secret formula. The book contains a table that
shows how to turn an Ace serial number into a key conﬁguration,
which any locksmith with the proper equipment could then use to
cut a key opening the lock with that serial number.
Because the serial numbers on Ace locks are frequently printed
on the outside, Chicago is concerned that the publication of this book
will undermine the security of Ace locks. It has asked you whether it
can and should sue the Fanbergs for damages and to halt publication
of the book. What is your advice? Is there anything further it would
be helpful for you to know? Are there changes that Chicago Lock can
and should make to its procedures in the future?

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This section isn’t about trade secret law. Instead, it covers near misses
to trade secret law: other laws protecting secrets (or in some cases, requiring them to be disclosed). As you read these materials, consider
whether it is appropriate to describe each of these bodies of law as a
kind of ”intellectual property.” Why or why not?

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Two ABC television reporters, Lynne Dale and Susan Barne , after
using false resumes to get jobs at Food Lion supermarkets, secretly
videotaped what appeared to be unwholesome food handling practices. Speciﬁcally, they sought to document Food Lion employees
engaging in unsanitary practices, treating products to hide spoilage,
and repackaging and redating out-of-date products. Some of the
video footage was used by ABC in a PrimeTime Live broadcast that
was sharply critical of Food Lion. [Food Lion sued and received $1
in compensatory damages for breach of loyalty, $1 in compensatory
damages for trespass, and $5,547,150 in compensatory and punitive
damages for fraud. The fraud claim was set aside because Dale and
Barne made no express representations about how long they would

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work and because ”Dale and Barne were not paid their wages because of misrepresentations on their job applications.”]

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II.
In North and South Carolina, as elsewhere, it is a trespass to enter
upon another’s land without consent. Accordingly, consent is a defense to a claim of trespass. Even consent gained by misrepresentation is sometimes suﬃcient. See Desnick v. American Broad. Cos.. The
consent to enter is canceled out, however, if a wrongful act is done in
excess of and in abuse of authorized entry.
We turn ﬁrst to whether Dale and Barne ’s consent to be in nonpublic areas of Food Lion property was void from the outset because
of the resume misrepresentations. Consent to an entry is often given
legal eﬀect even though it was obtained by misrepresentation or concealed intentions. Without this result,
a restaurant critic could not conceal his identity when he
ordered a meal, or a browser pretend to be interested
in merchandise that he could not aﬀord to buy. Dinner
guests would be trespassers if they were false friends who
never would have been invited had the host known their
true character, and a consumer who in an eﬀort to bargain
down an automobile dealer falsely claimed to be able to
buy the same car elsewhere at a lower price would be a
trespasser in a dealer’s showroom. Desnick.

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We like Desnick’s thoughtful analysis about when a consent to enter
that is based on misrepresentation may be given eﬀect. In Desnick
ABC sent persons posing as patients needing eye care to the plaintiﬀs’ eye clinics, and the test patients secretly recorded their examinations. Some of the recordings were used in a PrimeTime Live segment that alleged intentional misdiagnosis and unnecessary cataract
surgery. Desnick held that although the test patients misrepresented
their purpose, their consent to enter was still valid because they did
not invade ”any of the speciﬁc interests [relating to peaceable possession of land] the tort of trespass seeks to protect:” the test patients entered oﬃces ”open to anyone expressing a desire for ophthalmic services” and videotaped doctors engaged in professional discussions
with strangers, the testers; the testers did not disrupt the oﬃces or
invade anyone’s private space; and the testers did not reveal the ”intimate details of anybody’s life.” Desnick supported its conclusion with
the following comparison:
”Testers” who pose as prospective home buyers in order
to gather evidence of housing discrimination are not trespassers even if they are private persons not acting under
color of law. The situation of ABC’s ”testers” is analo-

) 05)&3 4&$3&$: -"84

gous. Like testers seeking evidence of violation of antidiscrimination laws, ABC’s test patients gained entry into
the plaintiﬀs’ premises by misrepresenting their purposes
(more precisely by a misleading omission to disclose those
purposes). But the entry was not invasive in the sense of
infringing the kind of interest of the plaintiﬀs that the law
of trespass protects; it was not an interference with the
ownership or possession of land.
We have not found any case suggesting that consent based on a resume misrepresentation turns a successful job applicant into a trespasser the moment she enters the employer’s premises to begin
work. Moreover, if we turned successful resume fraud into trespass, we would not be protecting the interest underlying the tort of
trespass – the ownership and peaceable possession of land. Accordingly, we cannot say that North and South Carolina’s highest courts
would hold that misrepresentation on a job application alone nulliﬁes
the consent given to an employee to enter the employer’s property,
thereby turning the employee into a trespasser.
There is a problem, however, with what Dale and Barne did after they entered Food Lion’s property. The jury also found that the
reporters commi ed trespass by breaching their duty of loyalty to
Food Lion ”as a result of pursuing [their] investigation for ABC.” We
aﬃrm the ﬁnding of trespass on this ground because the breach of
duty of loyalty – triggered by the ﬁlming in non-public areas, which
was adverse to Food Lion – was a wrongful act in excess of Dale and
Barne ’s authority to enter Food Lion’s premises as employees.
The Court of Appeals of North Carolina has indicated that secretly
installing a video camera in someone’s private home can be a wrongful act in excess of consent given to enter. In the trespass case of Miller
v. Brooks the (defendant) wife, who claimed she had consent to enter
her estranged husband’s (the plaintiﬀ’s) house, had a private detective place a video camera in the ceiling of her husband’s bedroom.
The court noted that ”even an authorized entry can be trespass if a
wrongful act is done in excess of and in abuse of authorized entry.”
The court went on to hold that ”even if the wife had permission to enter the house and to authorize others to do so,” it was a jury question
”whether defendants’ entries exceeded the scope of any permission
given.” We recognize that Miller involved a private home, not a grocery store, and that it involved some physical alteration to the plaintiﬀ’s property (installation of a camera). Still, we believe the general
principle is applicable here, at least in the case of Dale, who worked
in a Food Lion store in North Carolina. Although Food Lion consented to Dale’s entry to do her job, she exceeded that consent when
she videotaped in nonpublic areas of the store and worked against

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the interests of her second employer, Food Lion, in doing so.
We do not have a case comparable to Miller from South Carolina.
Nevertheless, the South Carolina courts make clear that the law of
trespass protects the peaceable enjoyment of property. It is consistent with that principle to hold that consent to enter is vitiated by a
wrongful act that exceeds and abuses the privilege of entry.
Accordingly, as far as North and South Carolina law is concerned,
the jury’s trespass verdict should be sustained.
III.
In its cross-appeal Food Lion argues that the district court erred in
refusing to allow it to use its non-reputational tort claims (breach
of duty of loyalty, trespass, etc.) to recover compensatory damages
for ABC’s broadcast of the PrimeTime Live program that targeted
Food Lion. The publication damages Food Lion sought (or alleged)
were for items relating to its reputation, such as loss of good will and
lost sales. The district court determined that the publication damages claimed by Food Lion ”were the direct result of diminished consumer conﬁdence in the store” and that ”it was Food Lion’s food
handling practices themselves – not the method by which they were
recorded or published – which caused the loss of consumer conﬁdence.” The court therefore concluded that the publication damages
were not proximately caused by the non-reputational torts committed by ABC’s employees. We do not reach the ma er of proximate
cause because an overriding (and se led) First Amendment principle precludes the award of publication damages in this case.
Food Lion acknowledges that it did not sue for defamation because its ”ability to bring an action for defamation ... required proof
that ABC acted with actual malice.” Food Lion thus understood that
if it sued ABC for defamation it would have to prove that the PrimeTime Live broadcast contained a false statement of fact that was made
with ”actual malice,” that is, with knowledge that it was false or with
reckless disregard as to whether it was true or false. What Food
Lion sought to do, then, was to recover defamation-type damages under non-reputational tort claims, without satisfying the stricter (First
Amendment) standards of a defamation claim.

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I
James Herman O’Hagan was a partner in the law ﬁrm of Dorsey
& Whitney. In July 1988, Grand Metropolitan PLC (Grand Met) re-

) 05)&3 4&$3&$: -"84

tained Dorsey & Whitney as local counsel to represent Grand Met
regarding a potential tender oﬀer for the common stock of the Pillsbury Company. Both Grand Met and Dorsey & Whitney took precautions to protect the conﬁdentiality of Grand Met’s tender oﬀer plans.
O’Hagan did no work on the Grand Met representation. Dorsey &
Whitney withdrew from representing Grand Met on September 9,
1988. Less than a month later, on October 4, 1988, Grand Met publicly announced its tender oﬀer for Pillsbury stock.
On August 18, 1988, while Dorsey & Whitney was still representing Grand Met, O’Hagan began purchasing call options for Pillsbury
stock. When Grand Met announced its tender oﬀer in October, the
price of Pillsbury stock rose to nearly $60 per share. O’Hagan then
sold his Pillsbury call options and common stock, making a proﬁt of
more than $4.3 million.
The Securities and Exchange Commission (SEC or Commission)
initiated an investigation into O’Hagan’s transactions, culminating
in a 57-count indictment. The indictment alleged that O’Hagan defrauded his law ﬁrm and its client, Grand Met, by using for his own
trading purposes material, nonpublic information regarding Grand
Met’s planned tender oﬀer.
II
A
In pertinent part, § 10(b) of the Securities Exchange Act of 1934 provides:
It shall be unlawful for any person, directly or indirectly, by
the use of any means or instrumentality of interstate commerce
or of the mails, or of any facility of any national securities exchange –
(b) To use or employ, in connection with the purchase or
sale of any security registered on a national securities exchange or any security not so registered, any manipulative or deceptive device or contrivance in contravention of
such rules and regulations as the [Securities and Exchange]
Commission may prescribe as necessary or appropriate in
the public interest or for the protection of investors.
The statute thus proscribes (1) using any deceptive device (2) in connection with the purchase or sale of securities, in contravention of
rules prescribed by the Commission. The provision, as wri en, does
not conﬁne its coverage to deception of a purchaser or seller of securities, rather, the statute reaches any deceptive device used ”in connection with the purchase or sale of any security.”
Pursuant to its § 10(b) rulemaking authority, the Commission has

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adopted Rule 10b-5 , which, as relevant here, provides:
It shall be unlawful for any person, directly or indirectly, by the
use of any means or instrumentality of interstate commerce, or
of the mails or of any facility of any national securities exchange,
(a) To employ any device, scheme, or artiﬁce to defraud, [or]
(c) To engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon any
person,
in connection with the purchase or sale of any security.”
Under the ”traditional” or ”classical theory” of insider trading liability, § 10(b) and Rule 10b-5 are violated when a corporate insider
trades in the securities of his corporation on the basis of material, nonpublic information. Trading on such information qualiﬁes as a ”deceptive device” under § 10(b) because a relationship of trust and conﬁdence exists between the shareholders of a corporation and those
insiders who have obtained conﬁdential information by reason of
their position with that corporation. That relationship gives rise to a
duty to disclose or to abstain from trading because of the necessity of
preventing a corporate insider from taking unfair advantage of uninformed stockholders. The classical theory applies not only to oﬃcers,
directors, and other permanent insiders of a corporation, but also to
a orneys, accountants, consultants, and others who temporarily become ﬁduciaries of a corporation.
The ”misappropriation theory” holds that a person commits fraud
”in connection with” a securities transaction, and thereby violates §
10(b) and Rule 10b-5, when he misappropriates conﬁdential information for securities trading purposes, in breach of a duty owed to the
source of the information. Under this theory, a ﬁduciary’s undisclosed, self-serving use of a principal’s information to purchase or
sell securities, in breach of a duty of loyalty and conﬁdentiality, defrauds the principal of the exclusive use of that information. In lieu
of premising liability on a ﬁduciary relationship between company
insider and purchaser or seller of the company’s stock, the misappropriation theory premises liability on a ﬁduciary-turned-trader’s
deception of those who entrusted him with access to conﬁdential information.
The two theories are complementary, each addressing eﬀorts to
capitalize on nonpublic information through the purchase or sale of
securities. The classical theory targets a corporate insider’s breach of
duty to shareholders with whom the insider transacts; the misappropriation theory outlaws trading on the basis of nonpublic information
by a corporate ”outsider” in breach of a duty owed not to a trading
party, but to the source of the information. The misappropriation

) 05)&3 4&$3&$: -"84

theory is thus designed to protect the integrity of the securities markets against abuses by ‘outsiders’ to a corporation who have access
to conﬁdential information that will aﬀect the corporation’s security
price when revealed, but who owe no ﬁduciary or other duty to that
corporation’s shareholders.5
B
We agree with the Government that misappropriation, as just deﬁned,
satisﬁes § 10(b)’s requirement that chargeable conduct involve a ”deceptive device or contrivance” used ”in connection with” the purchase or sale of securities. We observe, ﬁrst, that misappropriators,
as the Government describes them, deal in deception. A ﬁduciary
who pretends loyalty to the principal while secretly converting the
principal’s information for personal gain, ”dupes” or defrauds the
principal.
We addressed fraud of the same species in Carpenter v. United
States, which involved the mail fraud statute’s proscription of ”any
scheme or artiﬁce to defraud.” Aﬃrming convictions under that
statute, we said in Carpenter that an employee’s undertaking not to reveal his employer’s conﬁdential information ”became a sham” when
the employee provided the information to his co-conspirators in a
scheme to obtain trading proﬁts. A company’s conﬁdential information qualiﬁes as property to which the company has a right of exclusive use. The undisclosed misappropriation of such information, in
violation of a ﬁduciary duty, constitutes fraud akin to embezzlement –
the fraudulent appropriation to one’s own use of the money or goods
entrusted to one’s care by another.
Deception through nondisclosure is central to the theory of liability for which the Government seeks recognition. As counsel for the
Government stated in explanation of the theory at oral argument: ”To
satisfy the common law rule that a trustee may not use the property
that has been entrusted to him, there would have to be consent. To
satisfy the requirement of the Securities Act that there be no deception, there would only have to be disclosure.”6
5

The Government could not have prosecuted O’Hagan under the classical theory, for O’Hagan was not an ”insider” of Pillsbury, the corporation in whose stock
he traded. Although an ”outsider” with respect to Pillsbury, O’Hagan had an intimate association with, and was found to have traded on conﬁdential information
from, Dorsey & Whitney, counsel to tender oﬀer or Grand Met. Under the misappropriation theory, O’Hagan’s securities trading does not escape Exchange Act
sanction, as it would under Justice Thomas’ dissenting view, simply because he
was associated with, and gained nonpublic information from, the bidder, rather
than the target.
6
Under the misappropriation theory urged in this case, the disclosure obligation
runs to the source of the information, here, Dorsey & Whitney and Grand Met.
Chief Justice Burger, dissenting in Chiarella, advanced a broader reading of § 10(b)

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We turn next to the § 10(b) requirement that the misappropriator’s
deceptive use of information be ”in connection with the purchase or
sale of [a] security.” This element is satisﬁed because the ﬁduciary’s
fraud is consummated, not when the ﬁduciary gains the conﬁdential
information, but when, without disclosure to his principal, he uses
the information to purchase or sell securities. The securities transaction and the breach of duty thus coincide. This is so even though the
person or entity defrauded is not the other party to the trade, but is,
instead, the source of the nonpublic information. A misappropriator
who trades on the basis of material, nonpublic information, in short,
gains his advantageous market position through deception; he deceives the source of the information and simultaneously harms members of the investing public.
The misappropriation theory comports with § 10(b)’s language,
which requires deception ”in connection with the purchase or sale
of any security,” not deception of an identiﬁable purchaser or seller.
The theory is also well tuned to an animating purpose of the Exchange Act: to insure honest securities markets and thereby promote
investor conﬁdence. Although informational disparity is inevitable
in the securities markets, investors likely would hesitate to venture
their capital in a market where trading based on misappropriated
nonpublic information is unchecked by law. An investor’s informational disadvantage vis-à-vis a misappropriator with material, nonpublic information stems from contrivance, not luck; it is a disadvantage that cannot be overcome with research or skill.
In sum, considering the inhibiting impact on market participation
of trading on misappropriated information, and the congressional
purposes underlying § 10(b), it makes scant sense to hold a lawyer
like O’Hagan a § 10(b) violator if he works for a law ﬁrm representing the target of a tender oﬀer, but not if he works for a law ﬁrm representing the bidder. The text of the statute requires no such result.
The misappropriation at issue here was properly made the subject of
a § 10(b) charge because it meets the statutory requirement that there
be ”deceptive” conduct ”in connection with” securities transactions.
C
$IJBSFMMB  64

According to the Eighth Circuit, three of our decisions [including
Chiarella v. United States] reveal that § 10(b) liability cannot be predicated on a duty owed to the source of nonpublic information.
Chiarella involved securities trades by a printer employed at a
and Rule 10b-5; the disclosure obligation, as he envisioned it, ran to those with
whom the misappropriator trades. (”a person who has misappropriated nonpublic
information has an absolute duty to disclose that information or to refrain from
trading”). The Government does not propose that we adopt a misappropriation
theory of that breadth.

) 05)&3 4&$3&$: -"84

shop that printed documents announcing corporate takeover bids.
Deducing the names of target companies from documents he handled, the printer bought shares of the targets before takeover bids
were announced, expecting (correctly) that the share prices would
rise upon announcement. In these transactions, the printer did not
disclose to the sellers of the securities (the target companies’ shareholders) the nonpublic information on which he traded. For that trading, the printer was convicted of violating § 10(b) and Rule 10b-5. We
reversed the Court of Appeals judgment that had aﬃrmed the conviction.
The jury in Chiarella had been instructed that it could convict the
defendant if he willfully failed to inform sellers of target company
securities that he knew of a takeover bid that would increase the
value of their shares. Emphasizing that the printer had no agency
or other ﬁduciary relationship with the sellers, we held that liability
could not be imposed on so broad a theory. There is under § 10(b),
we explained, no ”general duty between all participants in market
transactions to forgo actions based on material, nonpublic information.” Under established doctrine, we said, a duty to disclose or abstain from trading ”arises from a speciﬁc relationship between two
parties.”
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Section 10(b) of the Securities Exchange Act of 1934 and the Securities
and Exchange Commission’s Rule 10b-5 prohibit undisclosed trading on inside corporate information by individuals who are under
a duty of trust and conﬁdence that prohibits them from secretly using such information for their personal advantage. Individuals under
this duty may face criminal and civil liability for trading on inside information (unless they make appropriate disclosures ahead of time).
These persons also may not tip inside information to others for
trading. The tippee acquires the tipper’s duty to disclose or abstain
from trading if the tippee knows the information was disclosed in
breach of the tipper’s duty, and the tippee may commit securities
fraud by trading in disregard of that knowledge. In Dirks v. SEC,
this Court explained that a tippee’s liability for trading on inside information hinges on whether the tipper breached a ﬁduciary duty by
disclosing the information. A tipper breaches such a ﬁduciary duty,
we held, when the tipper discloses the inside information for a personal beneﬁt. And, we went on to say, a jury can infer a personal
beneﬁt – and thus a breach of the tipper’s duty – where the tipper
receives something of value in exchange for the tip or ”makes a gift
of conﬁdential information to a trading relative or friend.”
Petitioner Bassam Salman challenges his convictions for conspir-

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acy and insider trading. Salman received lucrative trading tips from
an extended family member, who had received the information from
Salman’s brother-in-law. Salman then traded on the information. He
argues that he cannot be held liable as a tippee because the tipper
(his brother-in-law) did not personally receive money or property in
exchange for the tips and thus did not personally beneﬁt from them.
Maher Kara was an investment banker in Citigroup’s healthcare
investment banking group. He dealt with highly conﬁdential information about mergers and acquisitions involving Citigroup’s clients.
Maher enjoyed a close relationship with his older brother, Mounir
Kara (known as Michael). After Maher started at Citigroup, he began discussing aspects of his job with Michael. At ﬁrst he relied on
Michael’s chemistry background to help him grasp scientiﬁc concepts
relevant to his new job. Then, while their father was ba ling cancer,
the brothers discussed companies that dealt with innovative cancer
treatment and pain management techniques. Michael began to trade
on the information Maher shared with him. At ﬁrst, Maher was unaware of his brother’s trading activity, but eventually he began to
suspect that it was taking place.
Ultimately, Maher began to assist Michael’s trading by sharing inside information with his brother about pending mergers and acquisitions. Maher sometimes used code words to communicate corporate
information to his brother. Other times, he shared inside information
about deals he was not working on in order to avoid detection. Without his younger brother’s knowledge, Michael fed the information
to others – including Salman, Michael’s friend and Maher’s brotherin-law. By the time the authorities caught on, Salman had made over
$1.5 million in proﬁts that he split with another relative who executed
trades via a brokerage account on Salman’s behalf.
In this case, Salman contends that an insider’s gift of conﬁdential
information to a trading relative or friend is not enough to establish
securities fraud. Instead, Salman argues, a tipper does not personally
beneﬁt unless the tipper’s goal in disclosing inside information is to
obtain money, property, or something of tangible value.
We adhere to Dirks, which easily resolves the narrow issue presented here.
In Dirks, we explained that a tippee is exposed to liability for trading on inside information only if the tippee participates in a breach
of the tipper’s ﬁduciary duty. Whether the tipper breached that duty
depends ”in large part on the purpose of the disclosure” to the tippee.
”The test,” we explained, ”is whether the insider personally will beneﬁt, directly or indirectly, from his disclosure.” Thus, the disclosure
of conﬁdential information without personal beneﬁt is not enough.
In determining whether a tipper derived a personal beneﬁt, we instructed courts to ”focus on objective criteria, i.e., whether the insider

) 05)&3 4&$3&$: -"84

receives a direct or indirect personal beneﬁt from the disclosure, such
as a pecuniary gain or a reputational beneﬁt that will translate into
future earnings.” This personal beneﬁt can ”often” be inferred ”from
objective facts and circumstances,” we explained, such as ”a relationship between the insider and the recipient that suggests a quid pro
quo from the la er, or an intention to beneﬁt the particular recipient.”
In particular, we held that ”the elements of ﬁduciary duty and exploitation of nonpublic information also exist when an insider makes
a gift of conﬁdential information to a trading relative or friend.” In
such cases, ”the tip and trade resemble trading by the insider followed by a gift of the proﬁts to the recipient.” We then applied this
gift-giving principle to resolve Dirks itself, ﬁnding it dispositive that
the tippers ”received no monetary or personal beneﬁt” from their tips
to Dirks, ”nor was their purpose to make a gift of valuable information to Dirks.”
Our discussion of gift giving resolves this case. Maher, the tipper,
provided inside information to a close relative, his brother Michael.
Dirks makes clear that a tipper breaches a ﬁduciary duty by making a
gift of conﬁdential information to ”a trading relative,” and that rule is
suﬃcient to resolve the case at hand. As Salman’s counsel acknowledged at oral argument, Maher would have breached his duty had
he personally traded on the information here himself then given the
proceeds as a gift to his brother. It is obvious that Maher would personally beneﬁt in that situation. But Maher eﬀectively achieved the
same result by disclosing the information to Michael, and allowing
him to trade on it. Dirks appropriately prohibits that approach, as
well. Dirks speciﬁes that when a tipper gives inside information to
”a trading relative or friend,” the jury can infer that the tipper meant
to provide the equivalent of a cash gift. In such situations, the tipper
beneﬁts personally because giving a gift of trading information is the
same thing as trading by the tipper followed by a gift of the proceeds.
Here, by disclosing conﬁdential information as a gift to his brother
with the expectation that he would trade on it, Maher breached his
duty of trust and conﬁdence to Citigroup and its clients – a duty
Salman acquired, and breached himself, by trading on the information with full knowledge that it had been improperly disclosed.

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American law is replete with legal obligations placed on one person not to disclose information about another. While parties are of
course generally free to create contracts that regulate their ability to

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disclose information, public and private law regimes impose numerous mandatory duties of conﬁdentiality that go beyond the contract
of the transacting parties to prevent the disclosure of information
through speech or other means. For example, doctors, lawyers, and
other professionals owe their clients duties of conﬁdentiality, and can
be punished through administrative and tort law remedies if they
breach these duties by telling conﬁdences to third parties. These duties of nondisclosure are bu ressed by analogous evidentiary privileges, which give clients the ability to prevent their lawyers and doctors from speaking against their interests, presumably even when the
content of the testimony would be quite newsworthy. Evidence law
goes further and grants testimonial privileges to present and former
spouses, psychotherapists, and others.
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One who intentionally intrudes, physically or otherwise, upon the
solitude or seclusion of another or his private aﬀairs or concerns, is
subject to liability to the other for invasion of his privacy, if the intrusion would be highly oﬀensive to a reasonable person.
cmt. b The invasion may be by physical intrusion into a place in which
the plaintiﬀ has secluded himself, as when the defendant forces
his way into the plaintiﬀ’s room in a hotel or insists over the
plaintiﬀ’s objection in entering his home. It may also be by the
use of the defendant’s senses, with or without mechanical aids,
to oversee or overhear the plaintiﬀ’s private aﬀairs, as by looking into his upstairs windows with binoculars or tapping his
telephone wires. It may be by some other form of investigation
or examination into his private concerns, as by opening his private and personal mail, searching his safe or his wallet, examining his private bank account, or compelling him by a forged
court order to permit an inspection of his personal documents.
cmt. c The defendant is subject to liability under the rule stated in
this Section only when he has intruded into a private place, or
has otherwise invaded a private seclusion that the plaintiﬀ has
thrown about his person or aﬀairs. Thus there is no liability
for the examination of a public record concerning the plaintiﬀ,
or of documents that the plaintiﬀ is required to keep and make
available for public inspection. Nor is there liability for observing him or even taking his photograph while he is walking on
the public highway, since he is not then in seclusion, and his appearance is public and open to the public eye. Even in a public
place, however, there may be some ma ers about the plaintiﬀ,
such as his underwear or lack of it, that are not exhibited to the

) 05)&3 4&$3&$: -"84

public gaze; and there may still be invasion of privacy when
there is intrusion upon these ma ers.
One who gives publicity to a ma er concerning the private life of another is subject to liability to the other for invasion of his privacy, if
the ma er publicized is of a kind that (a) would be highly oﬀensive to
a reasonable person, and (b) is not of legitimate concern to the public.
cmt. b Private life. – The rule stated in this Section applies only to publicity given to ma ers concerning the private, as distinguished
from the public, life of the individual. There is no liability
when the defendant merely gives further publicity to information about the plaintiﬀ that is already public. Thus there is no
liability for giving publicity to facts about the plaintiﬀ’s life that
are ma ers of public record, such as the date of his birth, the fact
of his marriage, his military record, the fact that he is admi ed
to the practice of medicine or is licensed to drive a taxicab, or
the pleadings that he has ﬁled in a lawsuit. On the other hand,
if the record is one not open to public inspection, as in the case
of income tax returns, it is not public, and there is an invasion
of privacy when it is made so.
Similarly, there is no liability for giving further publicity to
what the plaintiﬀ himself leaves open to the public eye. Thus he
normally cannot complain when his photograph is taken while
he is walking down the public street and is published in the
defendant’s newspaper. Nor is his privacy invaded when the
defendant gives publicity to a business or activity in which the
plaintiﬀ is engaged in dealing with the public. On the other
hand, when a photograph is taken without the plaintiﬀ’s consent in a private place, or one already made is stolen from his
home, the plaintiﬀ’s appearance that is made public when the
picture appears in a newspaper is still a private ma er, and his
privacy is invaded.
Every individual has some phases of his life and his activities and some facts about himself that he does not expose to
the public eye, but keeps entirely to himself or at most reveals
only to his family or to close friends. Sexual relations, for example, are normally entirely private ma ers, as are family quarrels, many unpleasant or disgraceful or humiliating illnesses,
most intimate personal le ers, most details of a man’s life in
his home, and some of his past history that he would rather forget. When these intimate details of his life are spread before the
public gaze in a manner highly oﬀensive to the ordinary reasonable man, there is an actionable invasion of his privacy, unless
the ma er is one of legitimate public interest.

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According to the oft-told legend, the right to privacy was born when
Samuel Warren and Louis Brandeis penned The Right to Privacy in
1890. Spanning just twenty-eight pages in the Harvard Law Review,
the article identiﬁed privacy as an implicit concept running throughout Anglo-American common law. Warren and Brandeis also based
much of their argument for a right to privacy upon Prince Albert v.
Strange, an English case from 1848.
The dispute arose when Queen Victoria and her husband Albert, the Prince Consort, sued in equity to prevent the exhibition by
William Strange of etchings that the royal couple had made of their
family. They intended the etchings to be shared only with their family and close friends. On appeal, the Lord Chancellor agreed that
Strange had no right to print and sell the etchings or the catalog. The
Chancellor concluded that Prince Albert had a common law literary
property right in the unpublished work – essentially, a common law
copyright in unpublished works. Prince Albert suggested that intellectual property law could aﬀord a remedy of restricting publication
in unpublished works. Warren and Brandeis took this facet of the
opinion and used it to turn Prince Albert from an opinion protecting
intellectual property rights to a case protecting individual feelings
and emotions from the pain of unwanted publicity.
The story of privacy in Britain serves as an interesting contrast to
the American experience. English law, like American law, also developed a law of “private” information. As in America, this English
strand of the common law also traces its origins back to Prince Albert.
Warren and Brandeis minimized the second basis for the judgment
– breach of conﬁdence. Because Victoria and Albert had circulated
copies of the etchings only to a few friends, and had only sent copies
outside such a circle to the printer for purpose of making these copies,
the Lord Chancellor concluded that Strange’s possession “must have
originated in a breach of trust, conﬁdence, or contract,” most likely
by a clerk to the royal printer. Disclosure represented a breach of conﬁdence because a clerk to trusted professionals like printers and merchants owed the same implied contractual duty as his master “that
he will not make public that which he learns in the execution of his
duty as clerk.” Thus, the printer’s assistant had a duty to the Queen
and the Prince to maintain the conﬁdentiality of their etchings. The
breach of this duty could be enforced against subsequent holders of
the etchings and the plates used to make copies of them.
The English law of conﬁdence is quite diﬀerent from the Amer-

) 05)&3 4&$3&$: -"84

ican law of privacy. Consider the case of Barrymore v. News Group
Newspapers, Ltd.. Actor Michael Barrymore had a homosexual aﬀair
with Paul Winco , who worked for a company Barrymore jointly
owned with his wife. Winco provided details of the aﬀair to a newspaper, including le ers wri en by Barrymore. The court held that
there was a breach of conﬁdence: “When people enter into a personal
relationship of this nature, they do not do so for the purpose of it subsequently being published in The Sun, or any other newspaper. The
information about the relationship is for the relationship and not for
a wider purpose.”
The results in these cases would very likely be diﬀerent under
American privacy law. Courts might dismiss the cases, either concluding that the information was not private since others knew about
it or ﬁnding that the information was “of legitimate concern to the
public.” Beyond the privacy torts, the American breach of conﬁdentiality tort would have diﬃculty because only a few courts have held
that it can make third parties liable for knowingly using information
obtained via a breach. Moreover, the American tort currently has
been applied only to a limited set of relationships; courts have not
yet extended the tort to friends or lovers. In contrast, English law is
much more open-ended in the relationships it protects.
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This case originated with an anonymous tip to the Pasco County Sheriﬀ’s oﬃce that marijuana was being grown on respondent’s property. When an investigating oﬃcer discovered that he could not see
the contents of [respondent’s] greenhouse from the road, he circled
twice over respondent’s property in a helicopter at the height of 400
feet. With his naked eye, he was able to see through the openings in
the roof and one or more of the open sides of the greenhouse and to
identify what he thought was marijuana growing in the structure. A
warrant was obtained based on these observations, and the ensuing
search revealed marijuana growing in the greenhouse. Respondent
was charged with possession of marijuana under Florida law. The
trial court granted his motion to suppress [for violating the Fourth
Amendment’s prohibition on ”unreasonable searches and seizures.”]
California v. Ciraolo controls this case. There, acting on a tip, the
police inspected the backyard of a particular house while ﬂying in a
ﬁxed-wing aircraft at 1,000 feet. With the naked eye the oﬃcers saw
what they concluded was marijuana growing in the yard. A search
warrant was obtained on the strength of this airborne inspection, and
marijuana plants were found.
We recognized that the yard was within the curtilage of the house,
that a fence shielded the yard from observation from the street, and

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that the occupant had a subjective expectation of privacy. We held,
however, that such an expectation was not reasonable and not one
that society is prepared to honor. Our reasoning was that the home
and its curtilage are not necessarily protected from inspection that
involves no physical invasion. What a person knowingly exposes to
the public, even in his own home or oﬃce, is not a subject of Fourth
Amendment protection. As a general proposition, the police may see
what may be seen from a public vantage point where they have a
right to be, Thus the police, like the public, would have been free to
inspect the backyard garden from the street if their view had been
unobstructed. They were likewise free to inspect the yard from the
vantage point of an aircraft ﬂying in the navigable airspace as this
plane was.
We arrive at the same conclusion in the present case.
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 64
This case presents the question whether the use of a thermal-imaging
device aimed at a private home from a public street to detect relative
amounts of heat within the home constitutes a ”search” within the
meaning of the Fourth Amendment.
In 1991 Agent William Ellio of the United States Department
of the Interior came to suspect that marijuana was being grown in
the home belonging to petitioner Danny Kyllo. Indoor marijuana
growth typically requires high-intensity lamps. In order to determine
whether an amount of heat was emanating from petitioner’s home
consistent with the use of such lamps, at 3:20 a.m. on January 16,
1992, Agent Ellio and Dan Haas used an Agema Thermovision 210
thermal imager to scan the triplex. Thermal imagers detect infrared
radiation, which virtually all objects emit but which is not visible to
the naked eye. The imager converts radiation into images based on
relative warmth—black is cool, white is hot, shades of gray connote
relative diﬀerences; in that respect, it operates somewhat like a video
camera showing heat images. The scan of Kyllo’s home took only a
few minutes and was performed from the passenger seat of Agent
Ellio ’s vehicle across the street from the front of the house and also
from the street in back of the house. The scan showed that the roof
over the garage and a side wall of petitioner’s home were relatively
hot compared to the rest of the home and substantially warmer than
neighboring homes in the triplex. Agent Ellio concluded that petitioner was using halide lights to grow marijuana in his house, which
indeed he was. Based on tips from informants, utility bills, and the
thermal imaging, a Federal Magistrate Judge issued a warrant authorizing a search of petitioner’s home, and the agents found an indoor
growing operation involving more than 100 plants.

) 05)&3 4&$3&$: -"84

One might think that examining the portion of a house that is in
plain public view, while it is a ”search” despite the absence of trespass, is not an ”unreasonable” one under the Fourth Amendment.
But in fact we have held that visual observation is no ”search” at all.
In assessing when a search is not a search, we have applied somewhat
in reverse the principle ﬁrst enunciated in Ka v. United States. Ka
involved eavesdropping by means of an electronic listening device
placed on the outside of a telephone booth – a location not within
the catalog (”persons, houses, papers, and eﬀects”) that the Fourth
Amendment protects against unreasonable searches. We held that
the Fourth Amendment nonetheless protected Ka from the warrantless eavesdropping because he ”justiﬁably relied” upon the privacy of
the telephone booth. As Justice Harlan’s oft-quoted concurrence described it, a Fourth Amendment search occurs when the government
violates a subjective expectation of privacy that society recognizes as
reasonable. We have applied the test on two diﬀerent occasions in
holding that aerial surveillance of private homes and surrounding
areas does not constitute a search. Ciraolo; Florida v. Riley.
We think that obtaining by sense-enhancing technology any information regarding the interior of the home that could not otherwise
have been obtained without physical intrusion into a constitutionally
protected area, constitutes a search – at least where (as here) the technology in question is not in general public use. This assures preservation of that degree of privacy against government that existed when
the Fourth Amendment was adopted. On the basis of this criterion,
the information obtained by the thermal imager in this case was the
product of a search.
The Government also contends that the thermal imaging was constitutional because it did not ”detect private activities occurring in
private areas,” It points out that in Dow Chemical Co. v. United States
we observed that the enhanced aerial photography did not reveal
any ”intimate details.” Dow Chemical, however, involved enhanced
aerial photography of an industrial complex, which does not share
the Fourth Amendment sanctity of the home. The Fourth Amendment’s protection of the home has never been tied to measurement
of the quality or quantity of information obtained. In Silverman v.
United States, for example, we made clear that any physical invasion
of the structure of the home, ”by even a fraction of an inch,” was too
much, and there is certainly no exception to the warrant requirement
for the oﬃcer who barely cracks open the front door and sees nothing
but the nonintimate rug on the vestibule ﬂoor. In the home, our cases
show, all details are intimate details, because the entire area is held

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safe from prying government eyes.
Justice Stevens, dissenting:
There is, in my judgment, a distinction of constitutional magnitude between ”through-the-wall surveillance” that gives the observer
or listener direct access to information in a private area, on the one
hand, and the thought processes used to draw inferences from information in the public domain, on the other hand. The Court has
crafted a rule that purports to deal with direct observations of the
inside of the home, but the case before us merely involves indirect
deductions from ”oﬀ-the-wall” surveillance, that is, observations of
the exterior of the home.

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(a)

Each agency shall make available to the public information as
follows:
(3) (A) … each agency, upon any request for records which
(i) reasonably describes such records and (ii) is made
in accordance with published rules stating the time,
place, fees (if any), and procedures to be followed,
shall make the records promptly available to any person.
(b) This section does not apply to ma ers that are –
(1) (A) speciﬁcally authorized under criteria established by an
Executive order to be kept secret in the interest of national
defense or foreign policy and (B) are in fact properly classiﬁed pursuant to such Executive order;
(2) related solely to the internal personnel rules and practices
of an agency;
(3) speciﬁcally exempted from disclosure by statute …
(4) trade secrets and commercial or ﬁnancial information obtained from a person and privileged or conﬁdential;
(5) inter-agency or intra-agency memorandums or le ers
which would not be available by law to a party other than
an agency in litigation with the agency;
(6) personnel and medical ﬁles and similar ﬁles the disclosure
of which would constitute a clearly unwarranted invasion
of personal privacy;
(7) records or information compiled for law enforcement purposes, but only to the extent that the production of such

) 05)&3 4&$3&$: -"84

law enforcement records or information (A) could reasonably be expected to interfere with enforcement proceedings, (B) would deprive a person of a right to a fair trial
or an impartial adjudication, (C) could reasonably be expected to constitute an unwarranted invasion of personal
privacy, (D) could reasonably be expected to disclose the
identity of a conﬁdential source … (E) would disclose techniques and procedures for law enforcement investigations
or prosecutions … if such disclosure could reasonably be
expected to risk circumvention of the law, or (F) could reasonably be expected to endanger the life or physical safety
of any individual;
(8) contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of
an agency responsible for the regulation or supervision of
ﬁnancial institutions; or
(9) geological and geophysical information and data, including maps, concerning wells.
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 64
The question presented is whether the Freedom of Information Act requires the United States Department of Justice (Department) to make
available copies of district court decisions that it receives in the course
of litigating tax cases on behalf of the Federal Government. We hold
that it does.
We consider ﬁrst whether the district court decisions at issue are
”agency records,” a term elaborated upon both in Kissinger v. Reporters Comm. for Freedom of Press and in Forsham v. Harris. Kissinger
involved three separate FOIA requests for wri en summaries of
telephone conversations in which Henry Kissinger had participated
when he served as Assistant to the President for National Security Affairs from 1969 to 1975, and as Secretary of State from 1973 to 1977. At
the time of this request, these summaries were stored in Kissinger’s
oﬃce at the State Department in his personal ﬁles. We ﬁrst concluded
that the summaries were not ”agency records” at the time they were
made because the FOIA does not include the Oﬃce of the President
in its deﬁnition of ”agency.” We further held that these documents
did not acquire the status of ”agency records” when they were removed from the White House and transported to Kissinger’s oﬃce at
the State Department, a FOIA-covered agency.
Forsham, in turn, involved a request for raw data that formed the
basis of a study conducted by a private medical research organization.
Although the study had been funded through federal agency grants,

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the data never passed into the hands of the agencies that provided
the funding, but instead was produced and possessed at all times by
the private organization. We recognized that records of a nonagency
certainly could become records of an agency as well, but the fact that
the study was ﬁnancially supported by a FOIA-covered agency did
not transform the source material into ”agency records.” Nor did the
agencies’ right of access to the materials under federal regulations
change this result. As we explained, ”the FOIA applies to records
which have been in fact obtained, and not to records which merely
could have been obtained.”
Two requirements emerge from Kissinger and Forsham, each of
which must be satisﬁed for requested materials to qualify as ”agency
records.” First, an agency must either create or obtain the requested
materials. In performing their oﬃcial duties, agencies routinely avail
themselves of studies, trade journal reports, and other materials produced outside the agencies both by private and governmental organizations. To restrict the term ”agency records” to materials generated internally would frustrate Congress’ desire to put within public
reach the information available to an agency in its decision-making
processes.
Second, the agency must be in control of the requested materials
at the time the FOIA request is made. By control we mean that the materials have come into the agency’s possession in the legitimate conduct of its oﬃcial duties. This requirement accords with Kissinger’s
teaching that the term ”agency records” is not so broad as to include
personal materials in an employee’s possession, even though the materials may be physically located at the agency.
Applying these requirements here, we conclude that the requested district court decisions constitute ”agency records.” First, it is
undisputed that the Department has obtained these documents from
the district courts. Second, the Department clearly controls the district court decisions that Tax Analysts seeks.
$ISZTMFS $PSQ W #SPXO
 64
The expanding range of federal regulatory activity and growth in the
Government sector of the economy have increased federal agencies’
demands for information about the activities of private individuals
and corporations. These developments have paralleled a related concern about secrecy in Government and abuse of power. The Freedom
of Information Act (hereinafter FOIA) was a response to this concern,
but it has also had a largely unforeseen tendency to exacerbate the
uneasiness of those who comply with governmental demands for information. For under the FOIA third parties have been able to obtain
Government ﬁles containing information submi ed by corporations

) 05)&3 4&$3&$: -"84

and individuals who thought that the information would be held in
conﬁdence.
This case belongs to a class that has been popularly denominated
”reverse-FOIA” suits. Chrysle seeks to enjoin agency disclosure on
the grounds that it is inconsistent with the FOIA and 18 U.S.C. § 1905,
a criminal statute with origins in the 19th century that proscribes disclosure of certain classes of business and personal information. We
agree with the Court of Appeals for the Third Circuit that the FOIA
is purely a disclosure statute and aﬀords Chrysler no private right
of action to enjoin agency disclosure. But we cannot agree with that
court’s conclusion that this disclosure is ”authorized by law” within
the meaning of § 1905.
As a party to numerous Government contracts, Chrysler is required to comply with Executive Orders 11246 and 11375, which
charge the Secretary of Labor with ensuring that corporations that
beneﬁt from Government contracts provide equal employment opportunity regardless of race or sex. The United States Department of
Labor’s Oﬃce of Federal Contract Compliance Programs (OFCCP)
has promulgated regulations which require Government contractors to furnish reports and other information about their aﬃrmativeaction programs and the general composition of their work forces.
OFCCP regulations require that Chrysler make available to this
agency wri en aﬃrmative-action programs (AAP’s) and annually
submit Employer Information Reports, known as EEO-1 Reports.
Regulations promulgated by the Secretary of Labor provide for
public disclosure of information from records of the OFCCP and its
compliance agencies. It is the voluntary disclosure contemplated by
this regulation, over and above that mandated by the FOIA, which is
the gravamen of Chrysler’s complaint in this case.
This controversy began on May 14, 1975, when the [government]
informed Chrysler that third parties had made an FOIA request for
disclosure of the 1974 AAP for Chrysler’s Newark, Del., assembly
plant.
Although we have not had to face squarely the question whether
the FOIA textitex proprio vigore forbids governmental agencies from
disclosing certain classes of information to the public, we have consistently recognized that the basic objective of the Act is disclosure.
Chrysler contends that the nine exemptions in general, and Exemption 4 in particular, reﬂect a sensitivity to the privacy interests of
private individuals and nongovernmental entities. That contention
may be conceded without inexorably requiring the conclusion that
the exemptions impose aﬃrmative duties on an agency to withhold
information sought. In fact, that conclusion is not supported by the
language, logic, or history of the Act.
Enlarged access to governmental information undoubtedly cuts

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against the privacy concerns of nongovernmental entities, and as a
ma er of policy some balancing and accommodation may well be desirable. We simply hold here that Congress did not design the FOIA
exemptions to be mandatory bars to disclosure.
Chrysler contends, however, that even if its suit for injunctive relief cannot be based on the FOIA, such an action can be premised on
the Trade Secrets Act. The Act provides:
Whoever, being an oﬃcer or employee of the United
States or of any department or agency thereof, publishes,
divulges, discloses, or makes known in any manner or to
any extent not authorized by law any information coming
to him in the course of his employment or oﬃcial duties
or by reason of any examination or investigation made by,
or return, report or record made to or ﬁled with, such department or agency or oﬃcer or employee thereof which
information concerns or relates to the trade secrets, processes, operations, style of work, or apparatus, or to the
identity, conﬁdential statistical data, amount or source of
any income, proﬁts, losses, or expenditures of any person,
ﬁrm, partnership, corporation, or association; or permits
any income return or copy thereof or any book containing
any abstract or particulars thereof to be seen or examined
by any person except as provided by law; shall be ﬁned
not more than $1,000, or imprisoned not more than one
year, or both; and shall be removed from oﬃce or employment.

 64$ f

The Court of Appeals held that the Trade Secrets Act was not applicable to the agency disclosure at issue here because such disclosure
was ”authorized by law” within the meaning of the Act. The court
found the source of that authorization to be the OFCCP regulations
that DLA relied on in deciding to disclose information on the Hamtramck and Newark plants. [The Court disagreed.]
We reject, however, Chrysler’s contention that the Trade Secrets
Act aﬀords a private right of action to enjoin disclosure in violation
of the statute. Most importantly, a private right of action is not necessary to make eﬀective the congressional purpose, for we ﬁnd that
review of DLA’s decision to disclose Chrysler’s employment data is
available under the Administrative Procedures Act.
Section 10(a) of the APA provides that ”a person suﬀering legal
wrong because of agency action, or adversely aﬀected or aggrieved
by agency action, is entitled to judicial review thereof.” We conclude
that DLA’s decision to disclose the Chrysler reports is reviewable
agency action and Chrysler is a person ”adversely aﬀected or ag-

) 05)&3 4&$3&$: -"84

grieved” within the meaning of § 10(a).
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This case raises issues concerning the scope of Exemptions 5 and 7
to the general disclosure requirements of the Freedom of Information Act. In 1975 and 1976, plaintiﬀ Coastal States Gas Corporation
(Coastal States) ﬁled Freedom of Information requests with the defendant, seeking copies of agency interpretations of its regulations
which had not been made public. The issue in this appeal is focused
on memoranda from regional counsel to auditors working in DOE’s
ﬁeld oﬃces, issued in response to requests for interpretations of regulations within the context of particular facts encountered while conducting an audit of a ﬁrm. The plaintiﬀ contends that these memoranda constituted a body of ”secret law” which the agency was using
in its dealings with the public and which must be disclosed, while
DOE responds that the documents were properly withheld under Exemption 5, as documents which would not be subject to disclosure
during discovery, and in a few cases, under Exemption 7 as documents within an investigatory ﬁle.
After the 1973 oil embargo, a compliance program was established
to assure the observance of petroleum pricing and allocation regulations. Ten regional oﬃces were established within which regional
counsel were located. Each regional oﬃce also employed auditors
and other investigative personnel, whose job was auditing individual
ﬁrms to assure compliance with the regulations. These audits were
not ”investigations;” at that point, no charge had been made nor was
a violation necessarily suspected.
While the regional counsel has many responsibilities, the particular task relevant to this case is that of providing interpretations of
the pertinent regulations to the auditors at this early stage of compliance review. If the auditors should encounter a problem of regulatory interpretation, a request for advice would be sent to the regional
counsel, couched in a speciﬁc factual context, either real or hypothetical. The response would be a legal memorandum, interpreting any
applicable regulations in light of those facts, and often pointing out
additional factors which might make a diﬀerence in the application
of the regulation.
The agency points out that these were not ”formal” interpretations of the regulations, emphasizing that there is a published procedure for issuing such interpretations. Also, the agency insists that
the interpretations were not ”binding” on the audit staﬀ; it contends
that the agency staﬀ ”is free to reject the memorandum.” The district
court found, however, that in fact the advice was regularly and consistently followed by the non-legal staﬀ, a conclusion which we ﬁnd to

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be fully supported by the evidence. There is evidence in the record
that agency staﬀ failed to follow a regional counsel opinion only if
it could be distinguished on the facts, or if the ma er were referred
to a higher authority within the agency. Furthermore, in some of
the oﬃces the documents were indexed by subject ma er and used
as precedent in later cases; they were circulated among the area ofﬁces and supplied to new personnel; they were at times ”amended”
or ”rescinded,” which would hardly be necessary if the documents
contained merely informal suggestions to staﬀ which could be disregarded; and on at least one occasion a regional counsel memorandum
involving the audit of a diﬀerent ﬁrm was cited to a member of the
public as binding precedent.
The language of Exemption 5 is cast in terms of discovery law; the
agencies need turn over no documents ”which would not be available
by law to a private party in litigation with the agency.” This discovery
standard can only serve as a rough guide to the courts, since decisions
as to discovery are usually based on a balancing of the relative need
of the parties, and standards vary according to the kind of litigation
involved. It is clear, however, that Congress intended that agencies
should not lose the protection traditionally aﬀorded through the evidentiary privileges simply because of the passage of the FOIA. The
courts have recognized that Exemption 5 protects, as a general rule,
materials which would be protected under the a orney-client privilege, the a orney work-product privilege, or the executive ”deliberative process” privilege.
We have diﬃculty in perceiving any purpose which would be
served by applying the a orney-client privilege in this case. While it
is clear that an agency can be a ”client” and agency lawyers can function as ”a orneys” within the relationship contemplated by the privilege, this does not seem to be such a case. It is hard to imagine the
”conﬁdential information” which an auditor might have communicated to the regional counsel. The factual situations the auditor communicates to the a orneys are encountered in the course of auditing
third parties, the companies. They do not contain private information
concerning the agency. Rather than ”counseling,” intended to assist
the agency in protecting its interests, the memoranda here seem to
be neutral, objective analyses of agency regulations. They resemble,
in fact, question and answer guidelines which might be found in an
agency manual. In sharp contrast are the documents and memoranda
in issue in Mead Data Cent., Inc. v. US Dept. of Air Force, in which disclosure was sought of material generated in the course of negotiating
a contract between the Air Force and a private company. In such a
case, the Government is dealing with its a orneys as would any private party seeking advice to protect personal interests, and needs the
same assurance of conﬁdentiality so it will not be deterred from full

) 05)&3 4&$3&$: -"84

and frank communications with its counselors. This case bears li le
resemblance to that situation.
Assuming, however, that the purposes of the a orney-client privilege might be served by extending its protection to the situation here,
we agree with the district court that DOE has failed to demonstrate
a fundamental prerequisite to assertion of the privilege: conﬁdentiality both at the time of the communication and maintained since. The
agency has admi ed that it does not know who has had access to the
documents, and there is undisputed testimony that at least in some
regions, copies of the memoranda were circulated to all area oﬃces,
ﬁled and indexed for future use, relied on as precedent and used as
training materials for new personnel.
Another traditional area of privilege which has been recognized
under Exemption 5 is a orney work-product. This doctrine stands in
contrast to the a orney-client privilege; rather than protecting conﬁdential communications from the client, it provides a working a orney with a ”zone of privacy” within which to think, plan, weigh facts
and evidence, candidly evaluate a client’s case, and prepare legal theories. There is one signiﬁcant limitation of the doctrine, however,
which defeats the agency’s claim of privilege here; it has uniformly
been held to be limited to documents prepared in contemplation of litigation. o the extent the Government provided some indication in its
index that a speciﬁc claim had taken shape in the course of an audit,
so that the a orney’s work could fairly, if generously, be characterized as ”in contemplation of litigation,” the district court permi ed
these documents to be withheld. Beyond that, the DOE has failed to
carry its burden of establishing that litigation was fairly foreseeable
at the time the memoranda were prepared, and thus is not entitled to
invoke the exception.
A privilege unique to the government is one which is variously
described as predecisional or deliberative process privilege. The privilege has a number of purposes: it serves to assure that subordinates within an agency will feel free to provide the decisionmaker
with their uninhibited opinions and recommendations without fear
of later being subject to public ridicule or criticism; to protect against
premature disclosure of proposed policies before they have been ﬁnally formulated or adopted; and to protect against confusing the issues and misleading the public by dissemination of documents suggesting reasons and rationales for a course of action which were not
in fact the ultimate reasons for the agency’s action.
In deciding whether a document should be protected by the privilege we look to whether the document is ”predecisional” –whether it
was generated before the adoption of an agency policy – and whether
the document is ”deliberative” – whether it reﬂects the give-and-take
of the consultative process. The exemption thus covers recommenda-

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tions, draft documents, proposals, suggestions, and other subjective
documents which reﬂect the personal opinions of the writer rather
than the policy of the agency. Documents which are protected by the
privilege are those which would inaccurately reﬂect or prematurely
disclose the views of the agency, suggesting as agency position that
which is as yet only a personal position. To test whether disclosure
of a document is likely to adversely aﬀect the purposes of the privilege, courts ask themselves whether the document is so candid or
personal in nature that public disclosure is likely in the future to stiﬂe honest and frank communication within the agency. Human experience teaches that those who expect public dissemination of their
remarks may well temper candor with a concern for appearances and
for their own interests to the detriment of the decisionmaking process.
We also ask whether the document is recommendatory in nature or is
a draft of what will become a ﬁnal document, and whether the document is deliberative in nature, weighing the pros and cons of agency
adoption of one viewpoint or another. Finally, even if the document
is predecisional at the time it is prepared, it can lose that status if it is
adopted, formally or informally, as the agency position on an issue
or is used by the agency in its dealings with the public.
It is readily apparent that the memoranda in issue bear li le resemblance to the types of documents intended to be protected under
the deliberative process privilege. The documents were not suggestions or recommendations as to what agency policy should be. Unlike
the documents in EPA v. Mink and Murphy v. Dep’t of the ArmyMurphymurphy613 F.2d 1151 (1979), the memoranda are not advice to a
superior, nor are they suggested dispositions of a case, as in Renegotiation Bd. v. Grumman Aircraft Engineering Corp.. They are not one
step of an established adjudicatory process, which would result in a
formal opinion, as were the documents held exempt in NLRB v. Sears,
Roebuck & Co. There is nothing subjective or personal about the memoranda; they are simply straightforward explanations of agency regulations in speciﬁc factual situations. They are more akin to a ”resource” opinion about the applicability of existing policy to a certain
state of facts, like examples in a manual, to be contrasted to a factual
or strategic advice giving opinion. Nor do they reﬂect agency giveand-take – of the deliberative process – by which the decision itself
is made. Characterizing these documents as ”predecisional” simply
because they play into an ongoing audit process would be a serious
warping of the meaning of the word. No ”decision” is being made or
”policy” being considered; rather the documents discuss established
policies and decisions – the agency regulations – in the light of a speciﬁc, and often hypothetical, fact pa ern.
Exemption 7 aﬀords protection to investigatory ﬁles to prevent
harm to the government’s case in court. In 1974, the scope of the

) 05)&3 4&$3&$: -"84

privilege was sharply narrowed when Congress, dissatisﬁed with the
broad scope given to Exemption 7 by the courts, amended the exemption to make it clear that the Government must establish not only that
the document was prepared in the course of an ”investigation,” but
that disclosure of the document would ”interfere with enforcement
proceedings.” The Government asserts this privilege as to ﬁfty-three
documents.
We need not decide whether any of these memoranda are of a sort
which would be protected if the Government had demonstrated – or
even conclusorily asserted – that there are presently active investigations underway or contemplated in each of these ﬁfty-three cases. .
There is no reason to protect yellowing documents contained in longclosed ﬁles. DOE made no eﬀort whatsoever in the district court to
demonstrate that any of these cases are still under investigation or
being actively pursued. The district court was correct in concluding
that DOE had failed generally to meet its burden of establishing the
prerequisites to invocation of Exemption 7.
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Congress has directed the President to establish procedures governing the access to classiﬁed material so that no person can gain such
access without having undergone a background check. With the authority to determine classiﬁcation standards vested in the President,
these standards tend to change whenever a new administration takes
control of the White House.
The present standards for classifying and declassifying information were last amended on December 29, 2009. Under these standards, the President, Vice President, agency heads, and any other ofﬁcials designated by the President may classify information upon a
determination that the unauthorized disclosure of such information
could reasonably be expected to damage national security. Such information must be owned by, produced by, or under the control of
the federal government, and must concern one of the following:
• military plans, weapons systems, or operations;
• foreign government information;
• intelligence activities, intelligence sources/methods, cryptology;
• foreign relations or foreign activities of the United States, including conﬁdential sources;
• scientiﬁc, technological, or economic ma ers relating to national security;

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• federal programs for safeguarding nuclear materials or facilities;
• vulnerabilities or capabilities of national security systems; or
• weapons of mass destruction.
Information may be classiﬁed at one of three levels based on the
amount of danger that its unauthorized disclosure could reasonably
be expected to cause to national security. Information is classiﬁed
as ”Top Secret” if its unauthorized disclosure could reasonably be
expected to cause ”exceptionally grave damage” to national security. The standard for ”Secret” information is ”serious damage” to
national security, while for ”conﬁdential” information the standard is
”damage” to national security. Signiﬁcantly, for each level, the original classifying oﬃcer must identify or describe the speciﬁc danger
potentially presented by the information’s disclosure. In case of signiﬁcant doubt as to the need to classify information or the level of
classiﬁcation appropriate, the information is to remain unclassiﬁed
or be classiﬁed at the lowest level of protection considered appropriate.
The oﬃcer who originally classiﬁes the information establishes
a date for declassiﬁcation based upon the expected duration of the
information’s sensitivity. If the oﬃce cannot set an earlier declassiﬁcation date, then the information must be marked for declassiﬁcation
in 10 years’ time or 25 years, depending on the sensitivity of the information. The deadline for declassiﬁcation can be extended if the
threat to national security still exists.
Classiﬁed information is required to be declassiﬁed ”as soon as
it no longer meets the standards for classiﬁcation.” The original classifying agency has the authority to declassify information when the
public interest in disclosure outweighs the need to protect that information. On December 31, 2006, and every year thereafter, all information that has been classiﬁed for 25 years or longer and has been determined to have ”permanent historical value” under Title 44 of the U.S.
Code will be automatically declassiﬁed, although agency heads can
exempt from this requirement classiﬁed information that continues
to be sensitive in a variety of speciﬁc areas.
Access to classiﬁed information is generally limited to those who
demonstrate their eligibility to the relevant agency head, sign a
nondisclosure agreement, and have a need to know the information.
The need-to-know requirement can be waived, however, for former
Presidents and Vice Presidents, historical researchers, and former
policy-making oﬃcials who were appointed by the President or Vice
President. The information being accessed may not be removed from
the controlling agency’s premises without permission. Each agency
is required to establish systems for controlling the distribution of clas-

) 05)&3 4&$3&$: -"84

siﬁed information.
Under E.O. 13526, each respective agency is responsible for maintaining control over classiﬁed information it originates and is responsible for establishing uniform procedures to protect classiﬁed information and automated information systems in which classiﬁed information is stored or transmi ed. Agencies that receive information classiﬁed elsewhere are not permi ed to transfer the information further without approval from the classifying agency. Persons
authorized to disseminate classiﬁed information outside the executive branch are required to ensure it receives protection equivalent to
those required internally.
Generally, federal law prescribes a prison sentence of no more
than a year and/or a $1,000 ﬁne for oﬃcers and employees of the federal government who knowingly remove classiﬁed material without
the authority to do so and with the intention of keeping that material
at an unauthorized location. Stiﬀer penalties – ﬁnes of up to $10,000
and imprisonment for up to 10 years – a ach when a federal employee transmits classiﬁed information to anyone that the employee
has reason to believe is an agent of a foreign government. A ﬁne
and a 10-year prison term also await anyone, government employee
or not, who publishes, makes available to an unauthorized person,
or otherwise uses to the United States’ detriment classiﬁed information regarding the codes, cryptography, and communications intelligence utilized by the United States or a foreign government. Finally,
the disclosure of classiﬁed information that discloses any information identifying a covert agent, when done intentionally by a person
with authorized access to such identifying information, is punishable
by imprisonment for up to 15 years. A similar disclosure by one who
learns the identity of a covert agent as a result of having authorized access to classiﬁed information is punishable by not more than 10 years’
imprisonment. Under the same provision, a person who undertakes
a ”pa ern of activities intended to identify and expose covert agents”
with reason to believe such activities would impair U.S. foreign intelligence activities, and who then discloses the identities uncovered as
a result is subject to three years’ imprisonment, whether or not violator has access to classiﬁed information.
In addition to the criminal penalties outlined above, the executive
branch employs numerous means of deterring unauthorized disclosures by government personnel using administrative measures based
on terms of employment contracts. The agency may impose disciplinary action or revoke a person’s security clearance. The revocation
of a security clearance is usually not reviewable by the Merit System
Protection Board and may mean the loss of government employment.
Government employees may be subject to monetary penalties for disclosing classiﬁed information. Violators of the Espionage Act and the

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Atomic Energy Act provisions may be subject to loss of their retirement pay.
Agencies also rely on contractual agreements with employees,
who typically must sign non-disclosure agreements prior to obtaining access to classiﬁed information, sometimes agreeing to submit
all materials that the employee desires to publish to a review by the
agency. The Supreme Court enforced such a contract against a former employee of the Central Intelligence Agency (CIA), upholding
the government’s imposition of a constructive trust on the proﬁts of
a book the employee sought to publish without ﬁrst submi ing it to
CIA for review.
Under some circumstances, the government can also use injunctions to prevent disclosures of information. The courts have generally upheld injunctions against former employees’ publishing information they learned through access to classiﬁed information. The
Supreme Court also upheld the State Department’s revocation of
passports for overseas travel by persons planning to expose U.S.
covert intelligence agents, despite the fact that the purpose was to
disrupt U.S. intelligence activities rather than to assist a foreign government.
As noted above, E.O. 13526 sets the oﬃcial procedures for the declassiﬁcation of information. Once information is declassiﬁed, it may
be released to persons without a security clearance. Leaks, by contrast, might be deﬁned as the release of classiﬁed information to persons without a security clearance, typically journalists. Recent highproﬁle leaks of information regarding sensitive covert operations in
news stories that seemed to some to portray the Obama Administration in a favorable light raised questions regarding the practice of
“instant declassiﬁcation,” or whether disclosure of classiﬁed information to journalists may ever be said to be an “authorized disclosure”
by a senior oﬃcial.
The processes for declassiﬁcation set forth in E.O. 13526 seem to
presuppose that agencies and classifying oﬃcials will not have any
need or desire to disclose classiﬁed information in their possession
other than to comply with the regulations. Yet it has long been noted
that there seems to be an informal process for “instant declassiﬁcation” of information whose release to the public serves an immediate
need.
As a practical ma er, there is li le to stop agency heads and other
high-ranking oﬃcials from releasing classiﬁed information to persons without a security clearance when it is seen as suiting government needs. The A orney General has prosecutorial discretion to
choose which leaks to prosecute. If in fact a case can be made that
a senior oﬃcial has made or authorized the disclosure of classiﬁed
information, successful prosecution under current laws may be im-

) 05)&3 4&$3&$: -"84

possible because the scienter requirement (i.e., guilty state of mind)
is not likely to be met.
Executive branch policy appears to treat an oﬃcial disclosure as
a declassifying event, while non- a ributed disclosures have no effect on the classiﬁcation status of the information. For example, the
Department of Defense instructs agency oﬃcials, in the event that
classiﬁed information appears in the media, to neither conﬁrm nor
deny the accuracy of the information.
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This is an action under the Freedom of Information Act, in which
plaintiﬀ-appellant seeks to compel the Central Intelligence Agency
to disclose certain records alleged to be in its possession concerning
its relationship with the Hughes Glomar Explorer.
In March 1975 several news organizations published stories purporting to describe a secret operation conducted by the United States.
The central ﬁgure in these stories was the Hughes Glomar Explorer., a
large vessel publicly listed as a research ship owned and operated by
the Summa Corporation. According to the stories, the ship’s actual
owner and operator was the Government of the United States.
Following publication of these stories, other stories described the
alleged eﬀorts of the CIA to convince the news media not to make
public what they had learned about the Glomar Explorer. The la er
stories interested appellant, a journalist, and she ﬁled a FOIA request
for all Agency records relating to the reported contacts with the media. That request was denied on two grounds. First, the Agency
claimed that ”any records that might exist which reveal any CIA connection with or interest in the activities of the Glomar Explorer; and,
indeed, any data that might reveal the existence of any such records”
would be classiﬁed and therefore exempt from disclosure. Second,
the Agency stated that
the fact of the existence or non-existence of the records you
request would relate to information pertaining to intelligence sources and methods which the Director of Central
Intelligence has the responsibility to protect from unauthorized disclosure in accordance with the National Security Act of 1947.
We are dealing with a case in which the Agency has refused to conﬁrm or deny the existence of materials requested under the FOIA.
In eﬀect, the situation is as if appellant had requested and been refused permission to see a document which says either ”Yes, we have
records related to contacts with the media concerning the Glomar Explorer” or ”No, we do not have any such records.” On appeal appel-

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lant does not assert that the Government may never claim that national security considerations require it to refuse to disclose whether
or not requested documents exist. Rather, her principal argument,
and the only question we decide, is that the Agency should have been
required to support its position on the basis of the public record.
It is clear that the FOIA contemplates that the courts will resolve
fundamental issues in contested cases on the basis of in camera examinations of the relevant documents. Appellant maintains that this
authority does not extend to in camera examination of aﬃdavits, the
procedure used below. In the peculiar context of this case we must reject this contention. When the Agency’s position is that it can neither
conﬁrm nor deny the existence of the requested records, there are no
relevant documents for the court to examine other than the aﬃdavits
which explain the Agency’s refusal. Therefore, to fulﬁll its congressionally imposed obligation to make a de novo determination of the
propriety of a refusal to provide information in response to a FOIA
request the District Court may have to examine classiﬁed aﬃdavits
in camera and without participation by plaintiﬀ’s counsel.
Before adopting such a procedure, however, the District Court
should a empt to create as complete a public record as is possible.
Adapting these procedures to the present case would require the
Agency to provide a public aﬃdavit explaining in as much detail as
is possible the basis for its claim that it can be required neither to
conﬁrm nor to deny the existence of the requested records.[7] The
Agency’s arguments should then be subject to testing by appellant,
who should be allowed to seek appropriate discovery when necessary to clarify the Agency’s position or to identify the procedures by
which that position was established. Only after the issues have been
identiﬁed by this process should the District Court, if necessary, consider arguments or information which the Agency is unable to make
public.

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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.

Patent law provides exclusive rights over new and useful inventions.
Although it structure has shifted over time, the modern synthesis of
patent law (appropriately enough) is an intricately interlocking doctrinal machine. The mainspring of this system is the claim: a precise
statement of the technologies over which the inventor asserts rights.
The point of of patent prosecution is to generate appropriately clear
claim language that covers (or ”reads on”) what the inventor actually
invented; patent infringement is directed to comparing claims with
the defendant’s product or process. As we will see, patent law uses a
handful of basic concepts – e.g., ”prior art reference,” ”the person of
ordinary skill in the art,” and ”equivalent” – but it uses them again
and again. The key to understanding patent law is to pay a ention
to these recurring concepts.
Why patent law? Three stories are usually advanced, two of
which should already be familiar. It is said that patent law serves
an innovation function by giving incentives that enable investors to
recoup their investment and a contracting function by enabling them
to commercialize their inventions without fear of being ripped oﬀ by
business partners or imitated by competitors. But patent law also is
designed to serve a disclosure function: it requires inventors to make
public signiﬁcant information about how their inventions work, and
multiple doctrines subtly push actors toward greater disclosure.

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Whoever invents or discovers any new and useful process, machine,
manufacture, or composition of ma er, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

As interpreted by the courts, this section imposes two conditions on
patentability: utility and statutory subject ma er. It is conventional
to begin with statutory subject ma er. We begin with utility.

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Utility was at one time a categorical exclusion from patentability. No
longer. But it still does some important work as a threshold condition,
which can signiﬁcantly aﬀect the timing of patentability.
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Juicy Whip, Inc., is the assignee of United States Patent No. 5,575,405,
which is entitled “Post-Mix Beverage Dispenser With an Associated
Simulated Display of Beverage.” A “post-mix” beverage dispenser
stores beverage syrup concentrate and water in separate locations until the beverage is ready to be dispensed. The syrup and water are
mixed together immediately before the beverage is dispensed, which
is usually after the consumer requests the beverage. In contrast, in a
“pre-mix” beverage dispenser, the syrup concentrate and water are
pre-mixed and the beverage is stored in a display reservoir bowl until it is ready to be dispensed. The display bowl is said to stimulate
impulse buying by providing the consumer with a visual beverage
display. A pre-mix display bowl, however, has a limited capacity and
is subject to contamination by bacteria. It therefore must be reﬁlled
and cleaned frequently.
The invention claimed in the ‘405 patent is a post-mix beverage
dispenser that is designed to look like a pre-mix beverage dispenser.
The claims require the post-mix dispenser to have a transparent bowl
that is ﬁlled with a ﬂuid that simulates the appearance of the dispensed beverage and is resistant to bacterial growth. The claims also
require that the dispenser create the visual impression that the bowl

" 46#+&$5 ."55&3

is the principal source of the dispensed beverage, although in fact the
beverage is mixed immediately before it is dispensed, as in conventional post-mix dispensers.
The District Court concluded that the invention lacked utility because its purpose was to increase sales by deception, i.e., through
imitation of another product. The court explained that the purpose
of the invention “is to create an illusion, whereby customers believe
that the ﬂuid contained in the bowl is the actual beverage that they
are receiving, when of course it is not.” Although the court acknowledged Juicy Whip’s argument that the invention provides an accurate
representation of the dispensed beverage for the consumer’s beneﬁt
while eliminating the need for retailers to clean their display bowls,
the court concluded that those claimed reasons for the patent’s utility
“are not independent of its deceptive purpose, and are thus insuﬃcient to raise a disputed factual issue to present to a jury.”
II
The threshold of utility is not high: An invention is “useful” under
section 101 if it is capable of providing some identiﬁable beneﬁt.
To be sure, since Justice Story’s opinion in Lowell v. Lewis, it has
been stated that inventions that are “injurious to the well-being, good
policy, or sound morals of society” are unpatentable. As examples of
such inventions, Justice Story listed “a new invention to poison people, or to promote debauchery, or to facilitate private assassination.”
Courts have continued to recite Justice Story’s formulation, but the
principle that inventions are invalid if they are principally designed
to serve immoral or illegal purposes has not been applied broadly in
recent years. For example, years ago courts invalidated patents on
gambling devices on the ground that they were immoral, but that is
no longer the law.
In holding the patent in this case invalid for lack of utility, the district court relied on two Second Circuit cases dating from the early
years of this century, Rickard v. Du Bon, and Sco & Williams v. Aristo
Hosiery Co.. In the Rickard case, the court held invalid a patent on a
process for treating tobacco plants to make their leaves appear spotted. At the time of the invention, according to the court, cigar smokers considered cigars with spo ed wrappers to be of superior quality,
and the invention was designed to make unspo ed tobacco leaves appear to be of the spo ed – and thus more desirable – type. The court
noted that the invention did not promote the burning quality of the
leaf or improve its quality in any way; “the only eﬀect, if not the only
object, of such treatment, is to spot the tobacco, and counterfeit the
leaf spo ed by natural causes.”
The Aristo Hosiery case concerned a patent claiming a seamless
stocking with a structure on the back of the stocking that imitated a

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U.S. Patent No. 5,575,405, Post-Mix Beverage Dispenser With an Associated Simulated Display of Beverage.

" 46#+&$5 ."55&3

seamed stocking. The imitation was commercially useful because at
the time of the invention many consumers regarded seams in stockings as an indication of higher quality. The court noted that the imitation seam did not “change or improve the structure or the utility
of the article,” and that the record in the case justiﬁed the conclusion
that true seamed stockings were superior to the seamless stockings
that were the subject of the patent. “At best,” the court stated, “the
seamless stocking has imitation marks for the purposes of deception,
and the idea prevails that with such imitation the article is more salable.” That was not enough, the court concluded, to render the invention patentable.
We decline to follow Rickard and Aristo Hosiery, as we do not regard them as representing the correct view of the doctrine of utility
under the Patent Act of 1952. The fact that one product can be altered
to make it look like another is in itself a speciﬁc beneﬁt suﬃcient to
satisfy the statutory requirement of utility.
It is not at all unusual for a product to be designed to appear to
viewers to be something it is not. For example, cubic zirconium is
designed to simulate a diamond, imitation gold leaf is designed to
imitate real gold leaf, synthetic fabrics are designed to simulate expensive natural fabrics, and imitation leather is designed to look like
real leather. In each case, the invention of the product or process
that makes such imitation possible has “utility” within the meaning
of the patent statute, and indeed there are numerous patents directed
toward making one product imitate another. See, e.g., U.S. Pat. No.
   (method for producing imitation grill marks on food without using heat); U.S. Pat. No.    (laminated ﬂooring imitating
wood); U.S. Pat. No.    (imitation hamburger). Much of the
value of such products resides in the fact that they appear to be something they are not. Thus, in this case the claimed post-mix dispenser
meets the statutory requirement of utility by embodying the features
of a post-mix dispenser while imitating the visual appearance of a
pre-mix dispenser.
The fact that customers may believe they are receiving ﬂuid directly from the display tank does not deprive the invention of utility.
Orange Bang has not argued that it is unlawful to display a representation of the beverage in the manner that ﬂuid is displayed in the
reservoir of the invention, even though the ﬂuid is not what the customer will actually receive. Moreover, even if the use of a reservoir
containing ﬂuid that is not dispensed is considered deceptive, that is
not by itself suﬃcient to render the invention unpatentable. The requirement of “utility” in patent law is not a directive to the Patent and
Trademark Oﬃce or the courts to serve as arbiters of deceptive trade
practices. Other agencies, such as the Federal Trade Commission and
the Food and Drug Administration, are assigned the task of protect-

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ing consumers from fraud and deception in the sale of food products. Cf. In re Watson (stating that it is not the province of the Patent
Oﬃce to determine, under section 101, whether drugs are safe). As
the Supreme Court put the point more generally, “Congress never intended that the patent laws should displace the police powers of the
States, meaning by that term those powers by which the health, good
order, peace and general welfare of the community are promoted.”
Webber v. Virginia.
Of course, Congress is free to declare particular types of inventions unpatentable for a variety of reasons, including deceptiveness.
Cf. 42 U.S.C. § 2181(a) (exempting from patent protection inventions
useful solely in connection with special nuclear material or atomic
weapons). Until such time as Congress does so, however, we ﬁnd no
basis in section 101 to hold that inventions can be ruled unpatentable
for lack of utility simply because they have the capacity to fool some
members of the public. The district court therefore erred in holding
that the invention of the ‘405 patent lacks utility because it deceives
the public through imitation in a manner that is designed to increase
product sales.
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A claimed invention must have a speciﬁc and substantial utility. This
requirement excludes “throw-away,” “insubstantial,” or “nonspeciﬁc” utilities, such as the use of a complex invention as landﬁll.
Credibility is assessed from the perspective of one of ordinary
skill in the art in view of the disclosure and any other evidence of
record (e.g., test data, aﬃdavits or declarations from experts in the art,
patents or printed publications) that is probative of the applicant’s
assertions. An applicant need only provide one credible assertion of
speciﬁc and substantial utility for each claimed invention to satisfy
the utility requirement.
I. S
S
R
Courts have recognized that the term “useful” used with reference
to the utility requirement can be a diﬃcult term to deﬁne. Where an
applicant has set forth a speciﬁc and substantial utility, courts have
been reluctant to uphold a rejection under 35 U.S.C. § 101 solely on
the basis that the applicant’s opinion as to the nature of the speciﬁc
and substantial utility was inaccurate.
Practical considerations require the Oﬃce to rely on the inventor’s
understanding of his or her invention in determining whether and in
what regard an invention is believed to be “useful.” Because of this,
Oﬃce personnel should focus on and be receptive to assertions made

" 46#+&$5 ."55&3

by the applicant that an invention is “useful” for a particular reason.
A. Speciﬁc Utility
A “speciﬁc utility” is speciﬁc to the subject ma er claimed and can
“provide a well-deﬁned and particular beneﬁt to the public.” In re
Fisher. This contrasts with a general utility that would be applicable
to the broad class of the invention. Oﬃce personnel should distinguish between situations where an applicant has disclosed a speciﬁc
use for or application of the invention and situations where the applicant merely indicates that the invention may prove useful without
identifying with speciﬁcity why it is considered useful. For example,
indicating that a compound may be useful in treating unspeciﬁed
disorders, or that the compound has “useful biological” properties,
would not be suﬃcient to deﬁne a speciﬁc utility for the compound.
Similarly, a claim to a polynucleotide whose use is disclosed simply
as a “gene probe” or “chromosome marker” would not be considered
to be speciﬁc in the absence of a disclosure of a speciﬁc DNA target.
See Fisher (“Any EST [expressed sequence tag] transcribed from any
gene in the maize genome has the potential to perform any one of the
alleged uses. Nothing about applicant’s seven alleged uses set the
ﬁve claimed ESTs apart from the more than 32,000 ESTs disclosed in
the application or indeed from any EST derived from any organism.
Accordingly, we conclude that applicant has only disclosed general
uses for its claimed ESTs, not speciﬁc ones that satisfy § 101.”). A general statement of diagnostic utility, such as diagnosing an unspeciﬁed
disease, would ordinarily be insuﬃcient absent a disclosure of what
condition can be diagnosed. Contrast the situation where an applicant discloses a speciﬁc biological activity and reasonably correlates
that activity to a disease condition. Assertions falling within the la er
category are suﬃcient to identify a speciﬁc utility for the invention.
Assertions that fall in the former category are insuﬃcient to deﬁne a
speciﬁc utility for the invention, especially if the assertion takes the
form of a general statement that makes it clear that a “useful” invention may arise from what has been disclosed by the applicant.
B. Substantial Utility
“[A]n application must show that an invention is useful to the public as disclosed in its current form, not that it may prove useful at
some future date after further research. Simply put, to satisfy the
‘substantial’ utility requirement, an asserted use must show that the
claimed invention has a signiﬁcant and presently available beneﬁt to
the public.” Fisher. The claims at issue in ﬁsher were directed to expressed sequence tags (ESTs), which are short nucleotide sequences
that can be used to discover what genes and downstream proteins are

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expressed in a cell. The court held that “the claimed ESTs can be used
only to gain further information about the underlying genes and the
proteins encoded for by those genes. The claimed ESTs themselves
are not an end of [applicant’s] research eﬀort, but only tools to be used
along the way in the search for a practical utility. Applicant does not
identify the function for the underlying protein-encoding genes. Absent such identiﬁcation, we hold that the claimed ESTs have not been
researched and understood to the point of providing an immediate,
well-deﬁned, real world beneﬁt to the public meriting the grant of a
patent.” Thus a “substantial utility” deﬁnes a “real world” use. Utilities that require or constitute carrying out further research to identify
or reasonably conﬁrm a “real world” context of use are not substantial utilities. For example, both a therapeutic method of treating a
known or newly discovered disease and an assay method for identifying compounds that themselves have a “substantial utility” deﬁne
a “real world” context of use. An assay that measures the presence of
a material which has a stated correlation to a predisposition to the onset of a particular disease condition would also deﬁne a “real world”
context of use in identifying potential candidates for preventive measures or further monitoring. On the other hand, the following are
examples of situations that require or constitute carrying out further
research to identify or reasonably conﬁrm a “real world” context of
use and, therefore, do not deﬁne “substantial utilities”:
(A) Basic research such as studying the properties of the claimed
product itself or the mechanisms in which the material is involved;
(B) A method of treating an unspeciﬁed disease or condition;
(C) A method of assaying for or identifying a material that itself has
no speciﬁc and/or substantial utility;
(D) A method of making a material that itself has no speciﬁc, substantial, and credible utility; and
(E) A claim to an intermediate product for use in making a ﬁnal
product that has no speciﬁc, substantial and credible utility.
Oﬃce personnel must be careful not to interpret the phrase “immediate beneﬁt to the public” or similar formulations in other cases to
mean that products or services based on the claimed invention must
be “currently available” to the public in order to satisfy the utility
requirement. Rather, any reasonable use that an applicant has identiﬁed for the invention that can be viewed as providing a public beneﬁt should be accepted as suﬃcient, at least with regard to deﬁning
a “substantial” utility.
C. Research Tools

" 46#+&$5 ."55&3

Some confusion can result when one a empts to label certain types
of inventions as not being capable of having a speciﬁc and substantial
utility based on the se ing in which the invention is to be used. One
example is inventions to be used in a research or laboratory se ing.
Many research tools such as gas chromatographs, screening assays,
and nucleotide sequencing techniques have a clear, speciﬁc and unquestionable utility (e.g., they are useful in analyzing compounds).
An assessment that focuses on whether an invention is useful only
in a research se ing thus does not address whether the invention is
in fact “useful” in a patent sense. Instead, Oﬃce personnel must distinguish between inventions that have a speciﬁcally identiﬁed substantial utility and inventions whose asserted utility requires further
research to identify or reasonably conﬁrm. Labels such as “research
tool,” “intermediate” or “for research purposes” are not helpful in
determining if an applicant has identiﬁed a speciﬁc and substantial
utility for the invention.
II. W
I
I
; ”I
”U
An invention that is “inoperative” (i.e., it does not operate to produce
the results claimed by the patent applicant) is not a “useful” invention
in the meaning of the patent law. However, as the Federal Circuit has
stated, “[t]o violate 35 U.S.C. § 101 the claimed device must be totally
incapable of achieving a useful result.” Brooktree Corp.v.Advanced Micro Devices, Inc.. See also E.I. du Pont De Nemours and Co. v. Berkley
and Co. (“A small degree of utility is suﬃcient. The claimed invention must only be capable of performing some beneﬁcial function. An
invention does not lack utility merely because the particular embodiment disclosed in the patent lacks perfection or performs crudely. A
commercially successful product is not required. Nor is it essential
that the invention accomplish all its intended functions or operate
under all conditions, partial success being suﬃcient to demonstrate
patentable utility. In short, the defense of non-utility cannot be sustained without proof of total incapacity.”) If an invention is only partially successful in achieving a useful result, a rejection of the claimed
invention as a whole based on a lack of utility is not appropriate.
Situations where an invention is found to be “inoperative” and
therefore lacking in utility are rare, and rejections maintained solely
on this ground by a Federal court even rarer. In many of these cases,
the utility asserted by the applicant was thought to be incredible in
the light of the knowledge of the art, or factually misleading when
initially considered by the Oﬃce. Other cases suggest that on initial evaluation, the Oﬃce considered the asserted utility to be inconsistent with known scientiﬁc principles or speculative at best as to
whether a ributes of the invention necessary to impart the asserted
utility were actually present in the invention. However cast, the un-

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derlying ﬁnding by the court in these cases was that, based on the factual record of the case, it was clear that the invention could not and
did not work as the inventor claimed it did. Indeed, the use of many
labels to describe a single problem (e.g., a false assertion regarding
utility) has led to some of the confusion that exists today with regard
to a rejection based on the “utility” requirement. Examples of such
cases include: an invention asserted to change the taste of food using a magnetic ﬁeld, a perpetual motion machine, a ﬂying machine
operating on “ﬂapping or ﬂu er function,” a “cold fusion” process
for producing energy, a method for increasing the energy output of
fossil fuels upon combustion through exposure to a magnetic ﬁeld,
uncharacterized compositions for curing a wide array of cancers, and
a method of controlling the aging process. These examples are fact
speciﬁc and should not be applied as a per se rule. Thus, in view of
the rare nature of such cases, Oﬃce personnel should not label an
asserted utility “incredible,” “speculative” or otherwise unless it is
clear that a rejection based on “lack of utility” is proper.

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A summary of the four categories of invention, as they have been
deﬁned by the courts, are:
i. Process. – an act, or a series of acts or steps. A process is a mode
of treatment of certain materials to produce a given result. It is
an act, or a series of acts, performed upon the subject-ma er to
be transformed and reduced to a diﬀerent state or thing.
ii. Machine. – a concrete thing, consisting of parts, or of certain devices and combination of devices. This includes every mechanical device or combination of mechanical powers and devices to
perform some function and produce a certain eﬀect or result.
iii. Manufacture. – an article produced from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by hand labor or by machinery.
iv. Composition of ma er. – all compositions of two or more substances and all composite articles, whether they be the results
of chemical union, or of mechanical mixture, or whether they
be gases, ﬂuids, powders or solids, for example.
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" 46#+&$5 ."55&3

A close examination of all of the patentable subject-ma er categories
reveals a clear distinction. Virtually all of the restrictions, save two,
have been in the nature of categorical rules. The two exceptions are
the closely-related (indeed, for all practical purposes, identical) prohibitions on patenting “laws of nature” and “abstract ideas.” The laws
of nature and abstract ideas prohibitions account for almost the entirety of patentable subject-ma er case law, and the consequent uncertainty in the area. Section 101 thus contains a dichotomy: clear
exclusionary rules that have almost never caused administrative difﬁculty or litigation; and a vague scope limiting standard that has
caused tremendous diﬃculty and much litigation.

At present, there are two clear subject-ma er exclusions from
patentability: nuclear weapons and human organisms. Federal
statutes state that and that ”Notwithstanding any other provision of
law, no patent may issue on a claim directed to or encompassing a
human organism.” What policies do these exclusions express?
As for laws of nature and abstract ideas, the Supreme Court profoundly shifted course in a series of four major decisions between
2010 and 2014. Three of them are excerpted in this book: Mayo here,
Myriad in the biotechnology chapter, and CLS Bank in the software
chapter. (The fourth, Bilski, is discussed in CLS Bank.)
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Section 101 of the Patent Act deﬁnes patentable subject ma er. The
Court has long held that this provision contains an important implicit
exception. Laws of nature, natural phenomena, and abstract ideas are
not patentable.
I
A
The patents before us concern the use of thiopurine drugs in the treatment of autoimmune diseases, such as Crohn’s disease and ulcerative
colitis. When a patient ingests a thiopurine compound, his body metabolizes the drug, causing metabolites to form in his bloodstream.
Because the way in which people metabolize thiopurine compounds
varies, the same dose of a thiopurine drug aﬀects diﬀerent people
diﬀerently, and it has been diﬃcult for doctors to determine whether
for a particular patient a given dose is too high, risking harmful side
eﬀects, or too low, and so likely ineﬀective.
At the time the discoveries embodied in the patents were made,
scientists already understood that the levels in a patient’s blood of

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certain metabolites, including, in particular, 6-thioguanine and its nucleotides (6-TG) and 6-methyl-mercaptopurine (6-MMP), were correlated with the likelihood that a particular dosage of a thiopurine drug
could cause harm or prove ineﬀective. But those in the ﬁeld did not
know the precise correlations between metabolite levels and likely
harm or ineﬀectiveness. The patent claims at issue here set forth processes embodying researchers’ ﬁndings that identiﬁed these correlations with some precision.
More speciﬁcally, the patents – U.S. Patent No.    (623
patent) and U.S. Patent No.    (302 patent) – embody ﬁndings
that concentrations in a patient’s blood of 6-TG or of 6-MMP metabolite beyond a certain level (400 and 7000 picomoles per 8 × 108 red
blood cells, respectively) indicate that the dosage is likely too high
for the patient, while concentrations in the blood of 6-TG metabolite
lower than a certain level (about 230 picomoles per 8 × 108 red blood
cells) indicate that the dosage is likely too low to be eﬀective.
The patent claims seek to embody this research in a set of processes. Like the Federal Circuit we take as typical claim 1 of the 623
Patent, which describes one of the claimed processes as follows:
A method of optimizing therapeutic eﬃcacy for treatment
of an immune-mediated gastrointestinal disorder, comprising:
(a) administering a drug providing 6-thioguanine to a
subject having said immune-mediated gastrointestinal disorder; and
(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal
disorder,
wherein the level of 6-thioguanine less than about 230
pmol per 8×108 red blood cells indicates a need to increase
the amount of said drug subsequently administered to
said subject and
wherein the level of 6-thioguanine greater than about 400
pmol per 8 × 108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.”
B
Respondent, Prometheus Laboratories, Inc. (Prometheus), is the sole
and exclusive licensee of the 623 and 302 patents. It sells diagnostic
tests that embody the processes the patents describe. For some time
petitioners, Mayo Clinic Rochester and Mayo Collaborative Services

" 46#+&$5 ."55&3

(collectively Mayo), bought and used those tests. But in 2004 Mayo
announced that it intended to begin using and selling its own test–
a test using somewhat higher metabolite levels to determine toxicity
(450 pmol per 8 × 108 for 6-TG and 5700 pmol per 8 × 108 for 6-MMP).
Prometheus then brought this action claiming patent infringement.
The District Court found that Mayo’s test infringed claim 7 of the
623 patent. In interpreting the claim, the court accepted Prometheus’
view that the toxicity-risk level numbers in Mayo’s test and the claim
were too similar to render the tests signiﬁcantly diﬀerent. The number Mayo used (450) was too close to the number the claim used (400)
to ma er given appropriate margins of error. The District Court also
accepted Prometheus’ view that a doctor using Mayo’s test could violate the patent even if he did not actually alter his treatment decision
in the light of the test. In doing so, the court construed the claim’s language, ”indicates a need to decrease” (or ”to increase”), as not limited
to instances in which the doctor actually decreases (or increases) the
dosage level where the test results suggest that such an adjustment is
advisable.
II
Prometheus’ patents set forth laws of nature – namely, relationships
between concentrations of certain metabolites in the blood and the
likelihood that a dosage of a thiopurine drug will prove ineﬀective
or cause harm. Claim 1, for example, states that if the levels of 6-TG
in the blood (of a patient who has taken a dose of a thiopurine drug)
exceed about 400 pmol per 8 × 108 red blood cells, then the administered dose is likely to produce toxic side eﬀects. While it takes a
human action (the administration of a thiopurine drug) to trigger a
manifestation of this relation in a particular person, the relation itself exists in principle apart from any human action. The relation is a
consequence of the ways in which thiopurine compounds are metabolized by the body – entirely natural processes. And so a patent that
simply describes that relation sets forth a natural law.
The question before us is whether the claims do signiﬁcantly more
than simply describe these natural relations. To put the ma er more
precisely, do the patent claims add enough to their statements of the
correlations to allow the processes they describe to qualify as patenteligible processes that apply natural laws? We believe that the answer
to this question is no.
A
If a law of nature is not patentable, then neither is a process reciting
a law of nature, unless that process has additional features that provide practical assurance that the process is more than a drafting eﬀort
designed to monopolize the law of nature itself. A patent, for exam-

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ple, could not simply recite a law of nature and then add the instruction ”apply the law.” Einstein, we assume, could not have patented
his famous law by claiming a process consisting of simply telling linear accelerator operators to refer to the law to determine how much
energy an amount of mass has produced (or vice versa). Nor could
Archimedes have secured a patent for his famous principle of ﬂotation by claiming a process consisting of simply telling boat builders
to refer to that principle in order to determine whether an object will
ﬂoat.
What else is there in the claims before us? The process that each
claim recites tells doctors interested in the subject about the correlations that the researchers discovered. In doing so, it recites an ”administering” step, a ”determining” step, and a ”wherein” step. These
additional steps are not themselves natural laws but neither are they
suﬃcient to transform the nature of the claim.
First, the ”administering” step simply refers to the relevant audience, namely doctors who treat patients with certain diseases with
thiopurine drugs. That audience is a pre-existing audience; doctors
used thiopurine drugs to treat patients suﬀering from autoimmune
disorders long before anyone asserted these claims. In any event, the
prohibition against patenting abstract ideas cannot be circumvented
by a empting to limit the use of the formula to a particular technological environment.
Second, the ”wherein” clauses simply tell a doctor about the relevant natural laws, at most adding a suggestion that he should take
those laws into account when treating his patient. That is to say, these
clauses tell the relevant audience about the laws while trusting them
to use those laws appropriately where they are relevant to their decisionmaking (rather like Einstein telling linear accelerator operators
about his basic law and then trusting them to use it where relevant).
Third, the ”determining” step tells the doctor to determine the
level of the relevant metabolites in the blood, through whatever process the doctor or the laboratory wishes to use. As the patents state,
methods for determining metabolite levels were well known in the
art. Indeed, scientists routinely measured metabolites as part of their
investigations into the relationships between metabolite levels and
eﬃcacy and toxicity of thiopurine compounds. Thus, this step tells
doctors to engage in well-understood, routine, conventional activity
previously engaged in by scientists who work in the ﬁeld. Purely conventional or obvious pre-solution activity is normally not suﬃcient to
transform an unpatentable law of nature into a patent-eligible application of such a law. The prohibition against patenting abstract ideas
cannot be circumvented by adding insigniﬁcant post-solution activity.
Fourth, to consider the three steps as an ordered combination

# 130$&%63&4

adds nothing to the laws of nature that is not already present when
the steps are considered separately. Anyone who wants to make use
of these laws must ﬁrst administer a thiopurine drug and measure the
resulting metabolite concentrations, and so the combination amounts
to nothing signiﬁcantly more than an instruction to doctors to apply
the applicable laws when treating their patients.
The upshot is that the three steps simply tell doctors to gather
data from which they may draw an inference in light of the correlations. To put the ma er more succinctly, the claims inform a relevant
audience about certain laws of nature; any additional steps consist
of well-understood, routine, conventional activity already engaged
in by the scientiﬁc community; and those steps, when viewed as a
whole, add nothing signiﬁcant beyond the sum of their parts taken
separately. For these reasons we believe that the steps are not suﬃcient to transform unpatentable natural correlations into patentable
applications of those regularities.
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You are staﬀ counsel to Representative Helvering (R-IA), who has
read a number of newspaper articles on the growing phenomenon
of “tax planning patents.” These patents describe transactions designed to help a company reduce the taxes it owes. For example, one
such patent describes dividing a real estate portfolio into a number
of shares held as tenancies in common subject to a master lease, in
which each holder receives guaranteed annual income and is subject
to repurchase at fair market value at a speciﬁed date, such that the
investments qualify for tax-deferred treatment under … you get the
picture.
The Representative has asked you to help her think through
the policy and legal issues these patents raise. She wants to know
whether they are valid under current law and whether they’re contributing to tax evasion. If they’re problematic, she would like your
suggestions on possible legislative ﬁxes (either to the Patent Act or to
the Internal Revenue Code).

#

1SPDFEVSFT

A patent (an example follows) has two jobs. It must describe the
scope of the owner’s rights in the invention. This is the job of the
claims. It must also disclose the invention in enough detail that others
could (if not for the patent) make use of it. This is the job of the speciﬁcation. The process of patent prosecution is designed not just to check
that the invention is substantively eligible to be patented (discussed
in the next section), but also to ensure that the claims and speciﬁcation adequately carry out their jobs.

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(b)

Conclusion. – The speciﬁcation shall conclude with one or more
claims particularly pointing out and distinctly claiming the subject ma er which the inventor or a joint inventor regards as the
invention.
(c) Form. – A claim may be wri en in independent or, if the nature
of the case admits, in dependent or multiple dependent form.
(d) Reference in Dependent Forms. – A claim in dependent form shall
contain a reference to a claim previously set forth and then specify a further limitation of the subject ma er claimed. A claim in
dependent form shall be construed to incorporate by reference
all the limitations of the claim to which it refers.
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The speciﬁcation and the claims do not describe the same thing in
diﬀerent ways. Rather, they describe entirely diﬀerent concepts. The
speciﬁcation describes a single embodiment (or a very limited number of embodiments). The claim describes an idea. To be sure,
the speciﬁcation embodiment embodies the claimed idea, but the
claimed idea may be reﬂected in countless other embodiments; conversely, the speciﬁcation embodiment also embodies countless other
ideas in addition to what is claimed.
The two diﬀering concepts of “invention” create a problem for
deﬁning patent scope. For any speciﬁcation embodiment, an inﬁnite
array of ideas are equally apt for a claim. Consider the invention of a
radiation machine that cures AIDS. The invention can be claimed as
any of the following:
1. “A cure for AIDS,” covering all cures that might ever be devised.
2. “A cure for AIDS using radiation,” covering all cures using any
type of radiation but not other methods.
3. “A cure for AIDS using X-radiation,” thereby excluding methods using other types of radiation.
4. “A cure for AIDS using X-radiation speciﬁcally by using the exact make and model of the radiation machine in the speciﬁcation.”
Every level of abstraction describes something that is new, useful,
and non- obvious. Thus, the standard criteria of patentability provide no guidance regarding which level of abstraction is proper for

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patent protection. But a patent covering all cures for AIDS is obviously diﬀerent from a patent covering only one particular radiation
machine.
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The fundamental requirement for obtaining a patent is that the applicant must have invented something new.
It is curious, then, that patent law itself purports to pay no a ention to which aspects of a patentee’s invention are in fact new. A
patented invention is legally deﬁned by its claims – wri en deﬁnitions of the invention. And those wri en deﬁnitions virtually never
call out what it is that is new about the patentee’s invention. For
example, suppose that makers of widgets have long used a threestep process to manufacture the widget. The inventor of a four-step
process that results in higher-quality widgets will not claim to own
merely the fourth step she has discovered. Rather, she is much more
likely to deﬁne her invention as including all four steps. Our hypothetical patentee did not invent the ﬁrst three steps: all three have
been known in the art for decades. But you wouldn’t know that fact
from reading the patent claims.
Even if the parties do identify the novel element of an invention,
the law purports not to care. Longstanding patent law doctrine has
decried any focus on the ”point of novelty” of an invention. The
United States Court of Appeals for the Federal Circuit, which handles
patent appeals, evaluates the claim as a whole, not just the piece of
the claim that the patentee actually added to the storehouse of knowledge. As that court has put it, ”there is no legally recognizable .. ’gist,’
or ’heart’ of the invention.”
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The Patent Act requires that a patent speciﬁcation ”conclude with one
or more claims particularly pointing out and distinctly claiming the subject ma er which the applicant regards as [the] invention.” According
to the Federal Circuit, a patent claim passes the threshold so long as
the claim is ”amenable to construction,” and the claim, as construed,
is not ”insolubly ambiguous.” We conclude that the Federal Circuit’s
formulation, which tolerates some ambiguous claims but not others,
does not satisfy the statute’s deﬁniteness requirement. In place of
the ”insolubly ambiguous” standard, we hold that a patent is invalid
for indeﬁniteness if its claims, read in light of the speciﬁcation delineating the patent, and the prosecution history, fail to inform, with

# 130$&%63&4

reasonable certainty, those skilled in the art about the scope of the
invention.
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[Patent No.    (“the ’744 patent”), described a single device
that can communicate wirelessly with a variety of providers, such as
hotel systems, vehicle parking systems, and toll systems, using multiple frequencies. It claimed:
A communication unit connected to a public communication system, the communication unit capable of detecting a plurality of wireless devices and servicing each of
the plurality of wireless devices by providing access to
the public communication system when the wireless devices are within a predetermined proximity distance from
the communication unit, the communication unit comprising [various elements, including a] transceiver simultaneously communicating with at least two wireless devices with diﬀerent types of low power communication
signals.]
The ﬁnal term in dispute for purposes of claim construction is the
term “low power communication signals.” The plaintiﬀs argue that
the term “low power communication signals” should be construed to
mean “signals having a power for transmission up to a maximum of
several hundred feet.” The defendant argues that the term is indeﬁnite because the words “low power” are wholly lacking in speciﬁcity.
While it is true that the patent does not deﬁne the term “low
power” with precision, precision is not required as long as the claim
language is as speciﬁc as is reasonably possible under the circumstances, and as long as a person of skill in the art would understand
the scope of the claims with reasonable certainty. The Federal Circuit
has frequently addressed claim language that was imprecise and has
frequently upheld claims containing similar language, based on the
commonsense observation that sometimes precision is impossible to
achieve, consistent with an accurate description of the full scope of
the invention. As the court has explained: “Deﬁniteness problems
often arise when words of degree are used in a claim. That some
claim language may not be precise, however, does not automatically
render a claim invalid.” Sea le Box Co. v. Indus. Crating & Packing,
Inc. (upholding claim using term “substantially equal to”). When a
word of degree is used, “the district court must determine whether
the patent’s speciﬁcation provides some standard for measuring that
degree. The trial court must decide, that is, whether one of ordinary
skill in the art would understand what is claimed when the claim is

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read in light of the speciﬁcation.”
Indeﬁniteness is a legal determination; if the court concludes that
a person of ordinary skill in the art, with the aid of the speciﬁcation,
would understand what is claimed, the claim is not indeﬁnite. For
example, the term “substantially” has frequently been held not indeﬁnite if a person of ordinary skill can discern from the claims and
speciﬁcation what the bounds of the claim are with reasonable certainty. [Cases cited found the terms ”about 0.06,” ”substantially planar,” ”to increase substantially,” ”not interfering substantially,” ”relatively small,” ”substantially equal to,” ”closely approximate,” and
”about 5:1 to about 7:1” not indeﬁnite.] On numerous occasions, district courts, including this court, have held similarly imprecise claim
language not indeﬁnite. [Cases cited found the phrases “substantially collimated,” ”roughly the same,” ”low frequency forces,” ”low
hydroxyl ion content,” and ”low DC electrical voltage” not indeﬁnite.]
In pressing its indeﬁniteness argument, the defendant relies heavily on the Supreme Court’s recent decision in Nautilus, which addressed the issue of indeﬁniteness and modiﬁed the test applied in
some prior Federal Circuit cases. The Nautilus Court held “a patent’s
claims, viewed in light of the speciﬁcation and prosecution history,
[must] inform those skilled in the art about the scope of the invention with reasonable certainty.” Contrary to the defendant’s suggestion, that standard does not render all of the prior Federal Circuit and
district court cases inapplicable, nor does it require that the claim language in this case be held indeﬁnite. The Supreme Court recognized
that “some modicum of uncertainty” is “the price of ensuring the appropriate incentives for innovation,” and that because patents are directed to persons of skill in the art, all that is required is that the patent
apprise such persons of the scope of the invention. Indeed, the Court
cited with approval Eibel Process Co. v. Minn. & Ontario Paper Co.,
where the Court upheld claim language requiring a wire to be placed
at a “high” or “substantial” elevation. That language, the Eibel Court
held, would be suﬃciently clear in context for persons of skill in the
art to understand and therefore was not invalid for indeﬁniteness.
In light of the applicable caselaw, including the Nautilus case, the
Court concludes that the term “low power communication signals”
is not indeﬁnite. The speciﬁcation on several occasions refers to low
power signals as those that do not communicate farther than a few
hundred feet. See, e.g., ’744 patent, col. 32, ll. 29–31 (“low power
wireless link ... does not typically communicate farther than about
300 feet”); col. 35, ll. 50–51 (detection range of “say several hundred
feet”); col. 36, ll. 31–38 (wireless connection ranges “will vary from
several hundred feet to only several feet”); col. 39, ll. 13–15 (transmissions possible “within several hundred feet” of a communication

# 130$&%63&4

unit); col. 7, ll. 4–8 (transceiver capable of communicating “up to at
least a predetermined proximity distance such as a hundred feet”);
col. 13, ll. 49–52 (diﬀerent signal strengths designed for detection at
500 feet and 20 feet); col. 16, ll. 49–51 (authorization distance set at
500 feet and 20 feet). Moreover, the plaintiﬀs’ expert ﬁled a declaration pointing to the references in the patent to infrared signals, 900
MHz signals, 1.8 GHz signals, and 2.4 GHz signals as examples of
diﬀerent types of low power communication signals. He explained
that a common characteristic of such signals is the limited distance
over which they can be transmi ed, as discussed in the speciﬁcation.
One of ordinary skill in the art, he explained, would understand from
reading the ’744 speciﬁcation that the claim term “diﬀerent types of
low power communication signals” means “diﬀerent types of communication signals having a power for transmission up to a maximum of several hundred feet.” The defendant has not submi ed a
contrary expert declaration on the issue of indeﬁniteness.
Accordingly, the Court concludes that the term “low power communication signals,” viewed in light of the speciﬁcation, would be understood by persons of skill in the art with reasonable certainty. The
asserted claims in the ’744 patent are therefore not indeﬁnite. Furthermore, in light of the discussion of low power communications in the
speciﬁcation, the Court agrees with the plaintiﬀs that the term should
be interpreted to mean “communication signals having a power for
transmission of up to a maximum of several hundred feet.”
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[U.S. Patent No.   ], entitled “Electronic Kiosk Authoring System,” discloses a software program that allows a person to author
user interfaces for electronic kiosks. “The authoring system enables
the user interface for each individual kiosk to be customized quickly
and easily within wide limits of variation, yet subject to constraints
adhering the resulting interface to good standards of aesthetics and
user friendliness.” ‘137 patent, Abstract. [It claimed, in relevant part
(emphasis added):
In an electronic kiosk system ... a method for deﬁning
custom interface screens ... said method comprising the
steps of: ... providing a plurality of pre-deﬁned interface
screen element types, each element type deﬁning a form
of element available for presentation on said custom interface screens, wherein each said element type permits limited variation in its on-screen characteristics in conformity
with a desired uniform and aesthetically pleasing look and
feel for said interface screens on all kiosks of said kiosk

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Datamize, the patentee, argued that the term “aesthetically pleasing”
should be contrued to refer to the intent of a person practicing the
invention. That person must intend to create an aesthetically pleasing
interface screen; whether she succeeds is irrelevant.]
Datamize’s proposed construction of “aesthetically pleasing” in
the context of claim 1 is not reasonable for several reasons. First and
foremost, the plain meaning of the claim language requires that the
look and feel of interface screens actually be “aesthetically pleasing.”
That the uniform and “aesthetically pleasing” look and feel must also
be “desired” does not alter that fact.
Here Datamize has oﬀered no objective deﬁnition identifying a
standard for determining when an interface screen is “aesthetically
pleasing.” In the absence of a workable objective standard, “aesthetically pleasing” does not just include a subjective element, it is
completely dependent on a person’s subjective opinion. To the extent Datamize argues that such a construction of “aesthetically pleasing” does not render the phrase indeﬁnite, we disagree. The scope of
claim language cannot depend solely on the unrestrained, subjective
opinion of a particular individual purportedly practicing the invention. Some objective standard must be provided in order to allow
the public to determine the scope of the claimed invention. Even if
the relevant perspective is that of the system creator, the identity of
who makes aesthetic choices fails to provide any direction regarding
the relevant question of how to determine whether that person succeeded in creating an “aesthetically pleasing” look and feel for interface screens. A purely subjective construction of “aesthetically pleasing” would not notify the public of the patentee’s right to exclude
since the meaning of the claim language would depend on the unpredictable vagaries of any one person’s opinion of the aesthetics of
interface screens. While beauty is in the eye of the beholder, a claim
term, to be deﬁnite, requires an objective anchor. Thus, even if we
adopted a completely subjective construction of “aesthetically pleasing,” this would still render the ‘137 patent invalid.
And while the description of an embodiment provides examples
of aesthetic features of screen displays that can be controlled by the
authoring system, it does not explain what selection of these features
would be “aesthetically pleasing.” Major aesthetic choices apparently may include some aspect of bu on styles and sizes, window
borders, color combinations, and type fonts. The wri en description, however, provides no guidance to a person making aesthetic
choices such that their choices will result in an “aesthetically pleasing” look and feel of an interface screen. For example, the speciﬁcation does not explain what factors a person should consider when se-

# 130$&%63&4

lecting a feature to include in the authoring system. Left unanswered
are questions like: which color combinations would be “aesthetically
pleasing” and which would not? And more generally, how does one
determine whether a color combination is “aesthetically pleasing”?
Again, one skilled in the art reading the speciﬁcation is left with the
unhelpful direction to consult the subjective opinions of aesthetic design specialists, database specialists, and academic studies.
Simply put, the deﬁnition of “aesthetically pleasing” cannot depend on an undeﬁned standard. We therefore aﬃrm the district
court’s grant of summary judgment of invalidity of all claims of the
‘137 patent.
C

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In general, a preamble limits the invention if it recites essential structure or steps, or if it is necessary to give life, meaning, and vitality to
the claim. Conversely, a preamble is not limiting where a patentee deﬁnes a structurally complete invention in the claim body and uses the
preamble only to state a purpose or intended use for the invention.
Perhaps a hypothetical best illustrates these principles: Inventor
A invents a shoe polish for shining shoes (which, for the sake of example, is novel, useful, and nonobvious). Inventor A receives a patent
having composition claims for shoe polish. Indeed, the preamble of
these hypothetical claims recites ”a composition for polishing shoes.”
Clearly, Inventor B could not later secure a patent with composition
claims on the same composition because it would not be novel. Upon
discovering, however, that the polish composition grows hair when
rubbed on bare human skin, Inventor B can likely obtain method
claims directed to the new use of the composition to grow hair.
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The transitional phrases “comprising”, “consisting essentially of”
and “consisting of” deﬁne the scope of a claim with respect to what
unrecited additional components or steps, if any, are excluded from
the scope of the claim. The determination of what is or is not excluded
by a transitional phrase must be made on a case-by-case basis in light
of the facts of each case.
The transitional term “comprising”, which is synonymous with
“including,” “containing,” or “characterized by,” is inclusive or
open-ended and does not exclude additional, unrecited elements or
method steps. In Gille e Co. v. Energizer Holdings Inc., the court held

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that a claim to “a safety razor blade unit comprising a guard, a cap,
and a group of ﬁrst, second, and third blades” encompasses razors
with more than three blades because the transitional phrase “comprising” in the preamble and the phrase “group of” are presumptively
open-ended. The transitional phrase “consisting of” excludes any element, step, or ingredient not speciﬁed in the claim. The transitional
phrase “consisting essentially of” limits the scope of a claim to the
speciﬁed materials or steps and those that do not materially aﬀect
the basic and novel characteristic(s) of the claimed invention.
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A claim is indeﬁnite when it contains words or phrases whose meaning is unclear. The lack of clarity could arise where a claim refers to
“said lever” or “the lever,” where the claim contains no earlier recitation or limitation of a lever and where it would be unclear as to what
element the limitation was making reference. Similarly, if two diﬀerent levers are recited earlier in the claim, the recitation of “said lever”
in the same or subsequent claim would be unclear where it is uncertain which of the two levers was intended.
Alternative expressions are permi ed if they present no uncertainty
or ambiguity with respect to the question of scope or clarity of the
claims. A “Markush” claim recites a list of alternatively useable
species. A Markush claim is commonly forma ed as: “selected from
the group consisting of A, B, and C;” however, the phrase “Markush
claim” means any claim that recites a list of alternatively useable
species regardless of format. Inventions in metallurgy, refractories,
ceramics, pharmacy, pharmacology and biology are most frequently
claimed under the Markush formula but purely mechanical features
or process steps may also be claimed by using the Markush style of
claiming. It is improper to use the term “comprising” instead of “consisting of.”

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The speciﬁcation shall contain a wri en description of the invention,
and of the manner and process of making and using it, in such full,
clear, concise, and exact terms as to enable any person skilled in the
art to which it pertains, or with which it is most nearly connected,
to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention.

# 130$&%63&4

This language has been interpreted by the courts to create three distinct disclosure requirements: enablement, wri en description, and best
mode. Of the three, enablement is the most practically signiﬁcant.
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[Morse sued O’Reilly for infringing his patent on the telegraph. The
Supreme Court found that Morse was the inventor of the technology
and found that O’Reilly’s ”Columbian Telegraph” infringed. But it
narrowed Morse’s patent by striking its now-famous eighth claim:]
Eighth. I do not propose to limit myself to the speciﬁc machinery or parts of machinery described in the foregoing
speciﬁcation and claims; the essence of my invention being the use of the motive power of the electric or galvanic
current, which I call electro-magnetism, however developed for marking or printing intelligible characters, signs,
or le ers, at any distances, being a new application of that
power of which I claim to be the ﬁrst inventor or discoverer.
It is impossible to misunderstand the extent of this claim. He claims
the exclusive right to every improvement where the motive power
is the electric or galvanic current, and the result is the marking or
printing intelligible characters, signs, or le ers at a distance.
If this claim can be maintained, it ma ers not by what process or
machinery the result is accomplished. For aught that we now know
some future inventor, in the onward march of science, may discover
a mode of writing or printing at a distance by means of the electric
or galvanic current, without using any part of the process or combination set forth in the plaintiﬀ’s speciﬁcation. His invention may be
less complicated –less liable to get out of orderl– ess expensive in construction, and in its operation. But yet if it is covered by this patent
the inventor could not use it, nor the public have the beneﬁt of it without the permission of this patentee.
Nor is this all, while he shuts the door against inventions of other
persons, the patentee would be able to avail himself of new discoveries in the properties and powers of electro-magnetism which scientiﬁc men might bring to light. For he says he does not conﬁne his
claim to the machinery or parts of machinery, which he speciﬁes; but
claims for himself a monopoly in its use, however developed, for the
purpose of printing at a distance. New discoveries in physical science may enable him to combine it with new agents and new elements, and by that means a ain the object in a manner superior to

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the present process and altogether diﬀerent from it. And if he can
secure the exclusive use by his present patent he may vary it with every new discovery and development of the science, and need place
no description of the new manner, process, or machinery, upon the
records of the patent oﬃce. And when his patent expires, the public
must apply to him to learn what it is. In ﬁne he claims an exclusive
right to use a manner and process which he has not described and
indeed had not invented, and therefore could not describe when he
obtained his patent. The court is of opinion that the claim is too broad,
and not warranted by law.
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Wyeth and Cordis Corporation (Wyeth) appeal from the U.S. District
Court for the District of New Jersey’s grant of summary judgment
that claims 1 and 2 of U.S. Patent No.    (’781 patent) and claim
1 of U.S. Patent No.    (’146 patent) are invalid for nonenablement. Because we hold that there is no genuine issue of material fact
that the speciﬁcation does not enable one of ordinary skill to practice
the asserted claims without undue experimentation, we aﬃrm.
B
The patents-in-suit relate to the use of rapamycin for the treatment
and prevention of restenosis, which is the renarrowing of an artery.
To open a blocked artery, a physician guides a balloon catheter to the
site of accumulated plaque, and then inﬂates the balloon to crush the
plaque. As the balloon inﬂates, however, it may cause injury to the
arterial wall. That vascular injury causes smooth muscle cells to proliferate, which thickens the arterial wall, and, in turn, leads to restenosis.
The claims recite a method of treating or preventing “restenosis in
a mammal ... which comprises administering an antirestenosis eﬀective amount of rapamycin to said mammal.” In general, “rapamycin”
may refer to a class of compounds. While the patents-in-suit use
the term “rapamycin,” the parties agree that the shared speciﬁcation
discloses only one rapamycin species called sirolimus. Sirolimus is
naturally produced by a bacterium called Streptomyces hygroscopicus.
[Sirolimus’s chemical structure has two relevant features: a “macrocyclic triene ring” and a speciﬁc “substituent group.”]
The parties do not dispute that the eﬀective ﬁling date of both
patents is January 9, 1992. At that time, it was known that sirolimus
acts in part by binding two proteins at sites within the macrocyclic
ring. It was also known that there were four additional compounds
with the same macrocyclic ring as sirolimus, but diﬀerent substituent
groups.

# 130$&%63&4

The parties also do not dispute that the speciﬁcation discloses the
immunosuppressive and antirestenotic properties of sirolimus. The
speciﬁcation discloses in vitro test data indicating that sirolimus inhibits rat smooth muscle cell proliferation. It also discloses in vivo
test data indicating that intraperitoneal injection of sirolimus in rats
reduced the thickening of the arterial wall following vascular injury.
In two separate actions, Wyeth sued the defendants for infringement of the patents-in-suit. The defendants market stent products
that elute everolimus and zotarolimus, two drugs that have the same
macrocyclic ring as sirolimus but diﬀerent [substituent groups]. After brieﬁng and a hearing, the district court adopted Wyeth’s proposed construction of “rapamycin” as “a compound containing a
macrocyclic triene ring structure produced by Streptomyces hygroscopicus, having immuno-suppressive and anti-restenotic eﬀects.” Based
in part on that construction, the court granted defendants’ joint motions for summary judgment of invalidity for nonenablement and
lack of wri en description.
D
I.
A patent’s speciﬁcation must describe the invention and “the manner and process of making and using it, in such full, clear, concise,
and exact terms as to enable any person skilled in the art to which it
pertains ... to make and use the same.” 35 U.S.C. § 112(a). Claims
are not enabled when, at the eﬀective ﬁling date of the patent, one
of ordinary skill in the art could not practice their full scope without
undue experimentation.
II.
The central issue on appeal is whether practicing the full scope of
the claims requires excessive – and thus undue – experimentation.
The district court held that it does. It found that the claims cover
any structural analog of sirolimus that exhibits immunosuppressive
and antirestenotic eﬀects. The court also found that, while the speciﬁcation describes assays to ascertain whether a potential rapamycin
compound exhibits the recited functional eﬀects, the only species disclosed is sirolimus. In further support of its holding of nonenablement, the court relied on the unpredictability of the chemical arts, the
complexity of the invention, and the limited knowledge of treatment
of restenosis using sirolimus at the time of the invention.
Wyeth argues that the district court ignored evidence that practicing the full scope of the claims would have required only routine experimentation. First, a skilled artisan could ascertain whether
a candidate rapamycin compound has the same macrocyclic ring
as sirolimus. Second, a skilled artisan could routinely determine

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whether a candidate has immunosuppressive and antirestenotic effects using the assays disclosed in the speciﬁcation.
Regarding the amount of experimentation, Wyeth acknowledges
that one of its experts testiﬁed that there could be millions of
compounds made by varying the substituent groups outside of
sirolimus’s macrocyclic ring. Wyeth counters that the same expert
testiﬁed that the number of compounds that would exhibit the recited
functional eﬀects would be signiﬁcantly smaller. [Wyeth’s expert argued that a PHOSITA would have known that only compounds permeable across cell membranes, typically having molecular weights
below 1,200 Daltons would need to be considered. For purposes of
summary judgment, the court accepted this claim as true, and also the
claim that the assays would eﬀectively conﬁrm whether a candidate
compound had the desired immunosuppressive and antirestinotic effects.]
We agree with Appellees and the district court that there is no genuine dispute that practicing the full scope of the claims, measured
at the time of ﬁling, would require excessive experimentation. The
scope of the claims at issue is broad. Under the district court’s unchallenged construction of “rapamycin,” the invention is a new method
of use of a known compound (sirolimus) and any other compounds
that meet the construction’s structural and functional requirements.
We also agree that there is no genuine dispute that the speciﬁcation’s
guidance is limited to disclosures of the immunosuppressive and
antirestenotic properties of sirolimus and assays to screen for those
properties.
Yet, even accepting Wyeth’s assertions, we ﬁnd no genuine dispute that practicing the full scope of the claims would require more
than routine experimentation for two reasons.
First, there is no dispute that, even if potential rapamycin compounds must have a molecular weight below 1,200 Daltons, there
are still at least tens of thousands of candidates. The speciﬁcation
is silent about how to structurally modify sirolimus, let alone in a
way that would preserve the recited utility. Second, there is no genuine dispute that it would be necessary to ﬁrst synthesize and then
screen each candidate compound using the assays disclosed in the
speciﬁcation to determine whether it has immunosuppressive and
antirestenotic eﬀects. There is no evidence in the record that any particular substitutions outside of the macrocyclic ring are preferable. Indeed, a Wyeth scientist conﬁrmed the unpredictability of the art and
the ensuing need to assay each candidate by testifying that, “until
you test [compounds], you really can’t tell whether they work or not
[i.e., have antirestenotic eﬀects].” In sum, there is no genuine dispute
that practicing the full scope of the claims would require synthesizing
and screening each of at least tens of thousands of compounds.

# 130$&%63&4

The remaining question is whether having to synthesize and
screen each of at least tens of thousands of candidate compounds
constitutes undue experimentation. We hold that it does. Undue
experimentation is a ma er of degree. Even a considerable amount
of experimentation is permissible, as long as it is merely routine or
the speciﬁcation provides a reasonable amount of guidance regarding the direction of experimentation. Yet, routine experimentation is
not without bounds.
Our cases have described limits on permissible experimentation
in the context of enablement. For example, in ALZA Corp. v. Andrx Pharmaceuticals, LLC, we aﬃrmed a judgment of nonenablement
where the speciﬁcation provided “only a starting point, a direction
for further research.” We concluded that one of ordinary skill “would
have been required to engage in an iterative, trial-and-error process
to practice the claimed invention even with the help of the speciﬁcation.” Finally, in In re Vaeck, we aﬃrmed the PTO’s nonenablement
rejection of claims reciting heterologous gene expression in as many
as 150 genera of cyanobacteria. The speciﬁcation disclosed only nine
genera, despite cyanobacteria being a “diverse and relatively poorly
understood group of microorganisms,” with unpredictable heterologous gene expression. Here, the speciﬁcation similarly discloses
only a starting point for further iterative research in an unpredictable
and poorly understood ﬁeld. Synthesizing candidate compounds derived from sirolimus could, itself, require a complicated and lengthy
series of experiments in synthetic organic chemistry. Even pu ing
the challenges of synthesis aside, one of ordinary skill would need
to assay each of at least tens of thousands of candidates. Wyeth’s expert conceded that it would take technicians weeks to complete each
of these assays. The speciﬁcation oﬀers no guidance or predictions
about particular substitutions that might preserve the immunosuppressive and antirestenotic eﬀects observed in sirolimus. The resulting need to engage in a systematic screening process for each of the
many rapamycin candidate compounds is excessive experimentation.
We thus hold that there is no genuine dispute that practicing the full
scope of the claims, measured at the ﬁling date, required undue experimentation.
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You are drafting claims for a patent application for an industrial dye
that turns certain plastics an a ractive shade of blue. Your client has
tested it, with success, on PETE, HDPE, PEEK, and PVDC (all semicrystalline plastics). You could draft a broad claim that refers to “plastic” or you could draft a narrow claim that refers to “a plastic selected
from the group of PETE, HDPE, PEEK, and PVDC.” What are the advantages and disadvantages of each approach?

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Since its inception, this court has consistently held that § 112, ﬁrst
paragraph, contains a wri en description requirement separate from
enablement, and we have articulated a fairly uniform standard,
which we now aﬃrm. Speciﬁcally, the description must clearly allow persons of ordinary skill in the art to recognize that the inventor
invented what is claimed. In other words, the test for suﬃciency is
whether the disclosure of the application relied upon reasonably conveys to those skilled in the art that the inventor had possession of the
claimed subject ma er as of the ﬁling date.
The term “possession,” however, has never been very enlightening. It implies that as long as one can produce records documenting a
wri en description of a claimed invention, one can show possession.
But the hallmark of wri en description is disclosure. Thus, “possession as shown in the disclosure” is a more complete formulation. Yet
whatever the speciﬁc articulation, the test requires an objective inquiry into the four corners of the speciﬁcation from the perspective of
a person of ordinary skill in the art. Based on that inquiry, the speciﬁcation must describe an invention understandable to that skilled
artisan and show that the inventor actually invented the invention
claimed.
We have made clear that the wri en description requirement does
not demand either examples or an actual reduction to practice; a constructive reduction to practice that in a deﬁnite way identiﬁes the
claimed invention can satisfy the wri en description requirement.
Conversely, we have repeatedly stated that actual “possession” or reduction to practice outside of the speciﬁcation is not enough. Rather,
as stated above, it is the speciﬁcation itself that must demonstrate
possession. And while the description requirement does not demand
any particular form of disclosure, or that the speciﬁcation recite the
claimed invention in haec verba, a description that merely renders the
invention obvious does not satisfy the requirement.
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The best mode requirement is a safeguard against the desire on the
part of some people to obtain patent protection without making a
full disclosure as required by the statute. The requirement does not

# 130$&%63&4

permit inventors to disclose only what they know to be their secondbest embodiment, while retaining the best for themselves.
Determining compliance with the best mode requirement requires a two-prong inquiry. First, it must be determined whether,
at the time the application was ﬁled, the inventor possessed a best
mode for practicing the invention. This is a subjective inquiry which
focuses on the inventor’s state of mind at the time of ﬁling. Second, if
the inventor did possess a best mode, it must be determined whether
the wri en description disclosed the best mode such that a person
skilled in the art could practice it. This is an objective inquiry, focusing on the scope of the claimed invention and the level of skill in the
art. All applicants are required to disclose for the claimed subject matter the best mode contemplated by the inventor even if the inventor
was not the discoverer of that mode.
Failure to disclose the best mode need not rise to the level of active concealment or inequitable conduct in order to support a rejection. Where an inventor knows of a speciﬁc material or method that
will make possible the successful reproduction of the claimed invention, but does not disclose it, the best mode requirement has not been
satisﬁed.
Section 15 of the Leahy-Smith America Invents Act (AIA) did not
eliminate the requirement for a disclosure of the best mode, but effective September 16, 2011, it amended 35 U.S.C. 282 (the provision
that sets forth defenses in a patent validity or infringement proceeding) to provide that the failure to disclose the best mode shall not be
a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable. As this change is applicable only
in patent validity or infringement proceedings, it does not alter current patent examining practices as set forth above for evaluation of
an application for compliance with the best mode requirement of 35
U.S.C. 112.
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Assume that you represent the inventor of the ﬁrst screw-top salt
shaker. (In this alternate universe, prior art salt shakers were ﬁlled
through a hole in the bo om.) Draft a claim for this new invention.
Suggestions:
• What are the constituent parts of the screw-top shaker? Your
claim will need to describe them and explain how they are related.
• Which features of the screw-top shaker are essential to its use?
Which can safely be omi ed?

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• Once the new screw-top shaker is publicly available, competing
shaker-makers will try to invent around the patent. How can
you make their job harder?
• Inventors in other industries may be inspired by the screw-top
design. Can you make sure that your claim is not restricted to
the one use your client has in mind?

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An inventor obtains a patent by applying to the Patent Oﬃce. A
patent examiner with expertise in the relevant ﬁeld reviews an applicant’s patent claims, considers the prior art, and determines whether
each claim meets the applicable patent law requirements.
If the examiner rejects a claim, the applicant can resubmit a narrowed (or otherwise modiﬁed) claim, which the examiner will consider anew, measuring the new claim against the same patent law
requirements. If the examiner rejects the new claim, the inventor typically has yet another chance to respond with yet another amended
claim. Ultimately, the Patent Oﬃce makes a ﬁnal decision allowing
or rejecting the application. The applicant may seek judicial review
of any ﬁnal rejection.
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(a)

Conﬁdentiality. – Except as provided in subsection (b), applications for patents shall be kept in conﬁdence by the Patent and
Trademark Oﬃce.
(b) Publication. –

# 130$&%63&4

(1)(A) Subject to paragraph (2), each application for a patent shall
be published, in accordance with procedures determined
by the Director, promptly after the expiration of a period of
18 months from the earliest ﬁling date for which a beneﬁt is
sought under this title. At the request of the applicant, an
application may be published earlier than the end of such
18-month period.
(2)(B)(i) If an applicant makes a request upon ﬁling, certifying that
the invention disclosed in the application has not and will
not be the subject of an application ﬁled in another country, or under a multilateral international agreement, that
requires publication of applications 18 months after ﬁling,
the application shall not be published as provided in paragraph (1)
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A patent by its very nature is aﬀected with a public interest. The public interest is best served, and the most eﬀective patent examination
occurs when, at the time an application is being examined, the Oﬃce
is aware of and evaluates the teachings of all information material to
patentability. Each individual associated with the ﬁling and prosecution of a patent application has a duty of candor and good faith in
dealing with the Oﬃce, which includes a duty to disclose to the Oﬃce
all information known to that individual to be material to patentability as deﬁned in this section. The duty to disclose information exists
with respect to each pending claim until the claim is cancelled or withdrawn from consideration, or the application becomes abandoned.
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Inequitable conduct is an equitable defense to patent infringement
that, if proved, bars enforcement of a patent. This judge-made doctrine evolved from a trio of Supreme Court cases that applied the doctrine of unclean hands to dismiss patent cases involving egregious
misconduct before the PTO.
As the inequitable conduct doctrine evolved from these unclean
hands cases, it came to embrace a broader scope of misconduct, including not only egregious aﬃrmative acts of misconduct intended to
deceive both the PTO and the courts but also the mere nondisclosure
of information to the PTO. Inequitable conduct also diverged from
the doctrine of unclean hands by adopting a diﬀerent and more potent remedy – unenforceability of the entire patent rather than mere

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dismissal of the instant suit.
To prevail on a claim of inequitable conduct, the accused infringer
must prove that the patentee acted with the speciﬁc intent to deceive
the PTO. A ﬁnding that the misrepresentation or omission amounts
to gross negligence or negligence under a “should have known” standard does not satisfy this intent requirement. In a case involving
nondisclosure of information, clear and convincing evidence must
show that the applicant made a deliberate decision to withhold a
known material reference. In other words, the accused infringer must
prove by clear and convincing evidence that the applicant knew of the
reference, knew that it was material, and made a deliberate decision
to withhold it.
Because direct evidence of deceptive intent is rare, a district court
may infer intent from indirect and circumstantial evidence. However,
to meet the clear and convincing evidence standard, the speciﬁc intent to deceive must be the single most reasonable inference able to
be drawn from the evidence. Indeed, the evidence must be suﬃcient
to require a ﬁnding of deceitful intent in the light of all the circumstances.
This court holds that, as a general ma er, the materiality required
to establish inequitable conduct is but-for materiality. When an applicant fails to disclose prior art to the PTO, that prior art is but-for
material if the PTO would not have allowed a claim had it been aware
of the undisclosed prior art.
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A provisional application for patent (provisional application) is a U.S.
national application ﬁled in the USPTO under 35 U.S.C. § 111(b). A
provisional application is not required to have a formal patent claim
or an oath or declaration. Provisional applications also should not
include any information disclosure (prior art) statement since provisional applications are not examined. A provisional application provides the means to establish an early eﬀective ﬁling date in a later
ﬁled nonprovisional patent application ﬁled under 35 U.S.C. § 111(a).
It also allows the term ”Patent Pending” to be applied in connection
with the description of the invention.
A provisional application for patent has a pendency lasting 12
months from the date the provisional application is ﬁled. The 12month pendency period cannot be extended. Therefore, an applicant who ﬁles a provisional application must ﬁle a corresponding
nonprovisional application for patent (nonprovisional application)
during the 12-month pendency period of the provisional application

# 130$&%63&4

in order to beneﬁt from the earlier ﬁling of the provisional application.
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If two or more independent and distinct inventions are claimed in one
application, the Director may require the application to be restricted
to one of the inventions. If the other invention is made the subject of
a divisional application it shall be entitled to the beneﬁt of the ﬁling
date of the original application. The validity of a patent shall not be
questioned for failure of the Director to require the application to be
restricted to one invention.

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A continuation application is an application for the invention(s) disclosed in a prior-ﬁled copending nonprovisional application. The disclosure presented in the continuation must not include any subject
ma er which would constitute new ma er if submi ed as an amendment to the parent application. The inventorship in the continuation
application must include at least one inventor named in the priorﬁled application. At any time before the patenting, abandonment,
or termination of proceedings on an earlier application, an applicant
may have recourse to ﬁling a continuation application in order to introduce into the application a new set of claims and to establish a
right to further examination by the Oﬃce.
A continuation-in-part is an application ﬁled during the lifetime of an
earlier nonprovisional application, repeating some substantial portion or all of the earlier nonprovisional application and adding ma er
not disclosed in the said earlier nonprovisional application.

What’s the diﬀerence? Divisionals and continuations repeat the speciﬁcation of their parent applications; they are entitled to share its priority date. Divisionals are required when the examiner concludes
that an inventor is trying to claim two distinct inventions in the same
patent; they split the claims across two distinct applications. Continuations allow an applicant to appeal the rejection of claims, or to add
new claims, without holding up the examination and issuance of the
claims the examiner allows. A continuation-in-part (CIP) adds new
subject ma er to the speciﬁcation, so it is not automatically entitled

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to the same priority date. Instead, priority dates are assessed on a
claim-by-claim basis.
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Applicants can appeal rejections to the Patent Trial and Appeal Board
(PTAB). 35 U.S.C. § 134(a). If the PTAB also rejects the application, the
applicant can seek judicial review either before the Federal Circuit, id.
§ 141, or the Eastern District of Virginia, id. § 145.
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(a)

In general. – Whenever any patent is, through error, deemed
wholly or partly inoperative or invalid, by reason of a defective
speciﬁcation or drawing, or by reason of the patentee claiming
more or less than he had a right to claim in the patent, the Director shall, on the surrender of such patent and the payment
of the fee required by law, reissue the patent for the invention
disclosed in the original patent, and in accordance with a new
and amended application, for the unexpired part of the term of
the original patent. No new ma er shall be introduced into the
application for reissue.
(d) Reissue patent enlarging scope of claims. – No reissued patent
shall be granted enlarging the scope of the claims of the original patent unless applied for within two years from the grant
of the original patent.
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For several decades, the Patent Oﬃce has also possessed the authority to reexamine – and perhaps cancel – a patent claim that it had
previously allowed. In 1980, for example, Congress enacted a statute
providing for ”ex parte reexamination.”. That statute (which remains
in eﬀect) gives ”any person at any time” the right to ”ﬁle a request
for reexamination” on the basis of certain prior art ”bearing on the
patentability” of an already-issued patent. If the Patent Oﬃce concludes that the cited prior art raises ”a substantial new question of
patentability,” the agency can reexamine the patent. And that reexamination can lead the Patent Oﬃce to cancel the patent (or some of
its claims). Alternatively, the Director of the Patent Oﬃce can, on her
”own initiative,” trigger such a proceeding. And, as with examination, the patent holder can seek judicial review of an adverse ﬁnal
decision.

# 130$&%63&4

In 1999 and 2002, Congress enacted statutes that established
another, similar procedure, known as ”inter partes reexamination.”
Those statutes granted third parties greater opportunities to participate in the Patent Oﬃce’s reexamination proceedings as well as in
any appeal of a Patent Oﬃce decision.
In 2011, Congress enacted the statute before us. That statute modiﬁes ”inter partes reexamination,” which it now calls ”inter partes review” (IPR). Like inter partes reexamination, any third party can ask
the agency to initiate inter partes review of a patent claim. But the
new statute has changed the standard that governs the Patent Oﬃce’s
institution of the agency’s process. Instead of requiring that a request
for reexamination raise a ”substantial new question of patentability,”
it now requires that a petition show ”a reasonable likelihood that” the
challenger ”would prevail.”
The new statute provides a challenger with broader participation
rights. It creates within the Patent Oﬃce a Patent Trial and Appeal
Board (Board) composed of administrative patent judges, who are
patent lawyers and former patent examiners, among others. That
Board conducts the proceedings, reaches a conclusion, and sets forth
its reasons.
The statute sets forth time limits for completing this review. It
grants the Patent Oﬃce the authority to issue rules. Like its predecessors, the statute authorizes judicial review of a ”ﬁnal wri en decision”
canceling a patent claim. And, the statute says that the agency’s initial decision ”whether to institute an inter partes review” is ”ﬁnal and
nonappealable.” Like the Court of Appeals, we believe that Cuozzo’s
contention that the Patent Oﬃce unlawfully initiated its agency review is not appealable.
Cuozzo further argues that the Patent Oﬃce lacked the legal authority to issue its regulation requiring the agency, when conducting
an inter partes review, to give a patent claim ”its broadest reasonable
construction in light of the speciﬁcation of the patent in which it appears.” Instead, Cuozzo contends that the Patent Oﬃce should, like
the courts, give claims their ordinary meaning as understood by a
person of skill in the art.
The statute, however, contains a provision that grants the Patent
Oﬃce authority to issue ”regulations ... establishing and governing
inter partes review under this chapter.” The Court of Appeals held
that this statute gives the Patent Oﬃce the legal authority to issue its
broadest reasonable construction regulation. We agree.

Even more confusingly, the AIA also introduced ”post-grant review”
(PGR). PGR is only available within nine months after a patent issues

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– except for a ”transitional” program that allows for PGR of any ”covered business method patent” at any time, but sunsets in 2020. IPR becomes available after the nine-month PGR window closes. The major
diﬀerences are that IPR only allows for challenges under § 102 (novelty) and § 103 (nonobviousness) and that the threshold for the PTO
to hear an IPR is higher. Paradoxically, because of the wider range
of challenges available in PGR, the potential estoppel against parties
who bring one is much broader.

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Subject to the payment of fees under this title, such grant shall be for a
term beginning on the date on which the patent issues and ending 20
years from the date on which the application for the patent was ﬁled
in the United States or, if the application contains a speciﬁc reference
to an earlier ﬁled application or applications under section 120, 121,
365(c), or 386(c), from the date on which the earliest such application
was ﬁled.

Section 135 also contains an extensive and intricate set of provisions
for adjusting the patent term ”if the issue of an original patent is delayed due to the failure of the Patent and Trademark Oﬃce” to act
expeditiously, as speciﬁed by the statute, in its examination of the
application.

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The inventor, or each individual who is a joint inventor of a claimed
invention, in an application for patent (other than a provisional application) must execute an oath or declaration directed to the application, except as provided for in 37 CFR 1.64.
The deﬁnition for inventorship can be simply stated: The threshold question in determining inventorship is who conceived the invention. Unless a person contributes to the conception of the invention,
he is not an inventor. Insofar as deﬁning an inventor is concerned,
reduction to practice, per se, is irrelevant. One must contribute to

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the conception to be an inventor. With regard to the inventorship of
chemical compounds, an inventor must have a conception of the speciﬁc compounds being claimed. General knowledge regarding the
anticipated biological properties of groups of complex chemical compounds is insuﬃcient to confer inventorship status with respect to
speciﬁcally claimed compounds. One who suggests an idea of a result to be accomplished, rather than the means of accomplishing it,
is not an coinventor. See MPEP § 2138.04 - § 2138.05 for a discussion
of what evidence is required to establish conception or reduction to
practice.
In arriving at conception the inventor may consider and adopt
ideas and materials derived from many sources such as a suggestion
from an employee, or hired consultant so long as he maintains intellectual domination of the work of making the invention down to
the successful testing, selecting or rejecting as he goes even if such
suggestion or material proves to be the key that unlocks his problem. (Adoption of the ideas and materials from another can become
a derivation.)
Diﬃculties arise in separating members of a team eﬀort, where
each member of the team has contributed something, into those members that actually contributed to the conception of the invention, such
as the physical structure or operative steps, from those members that
merely acted under the direction and supervision of the conceivers.
It is not essential for the inventor to be personally involved in carrying out process steps where implementation of those steps does not
require the exercise of inventive skill. There is no requirement that
the inventor be the one to reduce the invention to practice so long as
the reduction to practice was done on his behalf. See also Ma or v.
Coolegem (one following oral instructions is viewed as merely a technician); Tucker v. Naito 188 USPQ 260 (Bd. Pat. Inter. 1975) (inventors need not “personally construct and test their invention”); Davis
v. Carrier (noninventor’s work was merely that of a skilled mechanic
carrying out the details of a plan devised by another).
The inventive entity for a particular application is based on some
contribution to at least one of the claims made by each of the named
inventors. “Inventors may apply for a patent jointly even though (1)
they did not physically work together or at the same time, (2) each
did not make the same type or amount of contribution, or (3) each
did not make a contribution to the subject ma er of every claim of
the patent.” The statute neither states nor implies that two inventors
can be ”joint inventors” if they have had no contact whatsoever and
are completely unaware of each other’s work. What is required is
some quantum of collaboration or connection. In other words, for
persons to be joint inventors, there must be some element of joint behavior, such as collaboration or working under common direction,

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one inventor seeing a relevant report and building upon it or hearing
another’s suggestion at a meeting. It is not necessary that the inventive concept come to both joint inventors at the same time.
Each joint inventor must generally contribute to the conception
of the invention. A coinventor need not make a contribution to every claim of a patent. A contribution to one claim is enough. “The
contributor of any disclosed means of a means-plus-function claim
element is a joint inventor as to that claim, unless one asserting sole
inventorship can show that the contribution of that means was simply a reduction to practice of the sole inventor’s broader concept.”
Ethicon Inc. v. United States Surgical Corp. (The electronics technician
who contributed to one of the two alternative structures in the speciﬁcation to deﬁne “the means for detaining” in a claim limitation was
held to be a joint inventor.).
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(a)

Institution of Proceeding. –
(1) In general. – An applicant for patent may ﬁle a petition
with respect to an invention to institute a derivation proceeding in the Oﬃce. The petition shall set forth with particularity the basis for ﬁnding that an individual named
in an earlier application as the inventor or a joint inventor
derived such invention from an individual named in the
petitioner’s application as the inventor or a joint inventor
and, without authorization, the earlier application claiming such invention was ﬁled.
(b) Determination by Patent Trial and Appeal Board. – In a derivation
proceeding instituted under subsection (a), the Patent Trial and
Appeal Board shall determine whether an inventor named in
the earlier application derived the claimed invention from an
inventor named in the petitioner’s application and, without authorization, the earlier application claiming such invention was
ﬁled. In appropriate circumstances, the Patent Trial and Appeal
Board may correct the naming of the inventor in any application
or patent at issue.

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Priority rules determine which of competing claimants is entitled to
an IP right based on an earlier claim. It is rarely as simple as ”ﬁrst
in time” because what counts as ”ﬁrst” could be assessed in diﬀerent
ways. Priority rules select one of these ways of determining who is
”ﬁrst” and determine the consequences of this fact. As we shall see,
U.S. patent law mostly creates priority by preventing all but one – or

$ 08/&34)*1

sometimes all – of the potential claimants from obtaining a patent. As
we shall also see, the AIA dramatically changed the priority rules of
U.S. patent law; this was the single biggest change made by the AIA.
Under Section 102, an applicant “shall be entitled to a patent unless” someone somewhere has done something that makes the invention not patentable. That something is called a prior art reference and it
is said to anticipate the applicant’s invention. Conceptually, any such
rule raises three questions:
• What makes a prior art reference suﬃciently similar to the applicant’s “claimed invention” to make it unpatentable? If Alﬁe
applies to patent an oven, Beth’s previous work on metalworking is irrelevant to the novelty of Alﬁe’s oven. Patent law has
se led on a remarkably elegant test to capture this idea: the test
for anticipation is simply the test for infringement plus the test
for enablement. A claim is anticipated by an enabling prior art
reference (and hence not novel) if that reference would infringe
the claim. Peters v. Active Mfg. Co. “That which infringes, if
later, would anticipate, if earlier.”
• Which kinds of activities count as prior art? The present section 102 uses the words “patented, described in a printed publication, or in public use, on sale, or otherwise available to the
public.” They are broad, but they do not exhaust the universe
of human activity. If Alﬁe ﬁles for a patent on an oven of a
type that Beth once built and then demolished without using or
telling anyone else, Beth’s secret use does not quality as prior
art and will not stand in the way of Alﬁe’s application. Extensive caselaw glosses the meanings of these phrases, which are
far subtler than they may appear at ﬁrst glance, and which have
changed substantially over time.
• When must an activity have taken place to qualify as prior art?
The present section 102 uses the words “before the eﬀective ﬁling date of the claimed invention,” so the patent applicant must
not only think of the invention and make it work but must also
make it to the Patent Oﬃce before anyone else goes public with
the same idea. If Alﬁe invents in January and ﬁles in March but
Beth publishes (or worse, ﬁles her own application) in February, Alﬁe is out of luck. This is one of the major changes in the
America Invents Act: under pre-AIA law, Alﬁe’s March application based oﬀ a January invention date would have been good
enough. As we dig into the text of the AIA, we will see why it
is said to create a rule of “ﬁrst inventor to ﬁle.”
Not coincidentally, these are the same kinds of questions one must
also ask about infringement: what kinds of conduct are prohibited,
what makes a defendant’s use too similar, and when does it fall

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within the term of the plaintiﬀ’s rights? This symmetry is baked into
patent law, as it is to many other ﬁelds of intellectual property law.
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A claimed invention may be rejected under 35 U.S.C. 102 when the
invention is anticipated (or is “not novel”) over a disclosure that is
available as prior art. To anticipate a claim, the disclosure must teach
every element of the claim.
A claim is anticipated only if each and every element as set forth in
the claim is found, either expressly or inherently described, in a single
prior art reference. “When a claim covers several structures or compositions, either generically or as alternatives, the claim is deemed
anticipated if any of the structures or compositions within the scope
of the claim is known in the prior art.” Brown v. 3M (claim to a system for se ing a computer clock to an oﬀset time to address the Year
2000 (Y2K) problem, applicable to records with year date data in “at
least one of two-digit, three-digit, or four-digit” representations, was
held anticipated by a system that oﬀsets year dates in only two-digit
formats). The elements must be arranged as required by the claim,
but this is not an ipsissimis verbis test, i.e., identity of terminology is
not required.
A generic claim cannot be allowed to an applicant if the prior art discloses a species falling within the claimed genus. The species in that
case will anticipate the genus.
A genus does not always anticipate a claim to a species within
the genus. However, when the species is clearly named, the species
claim is anticipated no ma er how many other species are additionally named. See Ex parte AEx parte Aexpartea17 USPQ 2d 1716 (BPAI
1990) (”The tenth edition of the Merck Index lists ten thousand compounds. In our view, each and every one of those compounds is ‘described’ as that term is used in [pre-AIA] 35 U.S.C. § 102(a), in that
publication.”).
Whether a generic disclosure necessarily anticipates everything
within the genusdepends on the factual aspects of the speciﬁc disclosure and the particular products at issue. How one of ordinary skill
in the art would understand the relative size of a genus or species in
a particular technology is of critical importance.
In In re Petering, the prior art disclosed a generic chemical formula “wherein X, Y, Z, P, and R’- represent either hydrogen or alkyl
radicals, R a side chain containing an OH group.” The court held

$ 08/&34)*1

that this formula, without more, could not anticipate a claim to 7methyl-9-[d, l’-ribityl]-isoalloxazine because the generic formula encompassed a vast number and perhaps even an inﬁnite number of
compounds. However, the reference also disclosed preferred substituents for X, Y, Z, P, R, and R. The court determined that this more
limited generic class consisted of about 20 compounds. The limited
number of compounds covered by the preferred formula in combination with the fact that the number of substituents was low at each
site, the ring positions were limited, and there was a large unchanging
structural nucleus, resulted in a ﬁnding that the reference suﬃciently
described “each of the various permutations here involved as fully as
if he had drawn each structural formula or had wri en each name.”
The claimed compound was 1 of these 20 compounds. Therefore, the
reference “described” the claimed compound and the reference anticipated the claims.
When the reference relied on expressly anticipates or makes obvious
all of the elements of the claimed invention, the reference is presumed
to be operable. Once such a reference is found, the burden is on applicant to provide facts rebu ing the presumption of operability.
A prior art reference provides an enabling disclosure and thus anticipates a claimed invention if the reference describes the claimed invention in suﬃcient detail to enable a person of ordinary skill in the
art to carry out the claimed invention; proof of eﬃcacy is not required
for a prior art reference to be enabling for purposes of anticipation.
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This appeal is from an Order of the United States District Court for the
District of Columbia in a civil action brought pursuant to 35 U.S.C. §
145 against Donald W. Banner as Commissioner of Patents and Trademarks authorizing the Commissioner to issue to appellee a patent
containing claims 1, 2, and 3 of patent application serial No. 598,935
for “TITANIUM ALLOY.”
The inventors, Loren C. Covington and Howard R. Palmer, employees of appellee to whom they have assigned their invention and
the application thereon, ﬁled an application on March 29, 1974, serial No. 455,964, to patent an alloy they developed. The application
involved in this appeal contains the three claims on appeal. The alloy is made primarily of titanium (Ti) and contains small amounts of
nickel (Ni) and molybdenum (Mo) as alloying ingredients to give the
alloy certain desirable properties, particularly corrosion resistance in
hot brine solutions, while retaining workability so that articles such
as tubing can be fabricated from it by rolling, welding and other tech-

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niques. The inventors apparently also found that iron content should
be limited, iron being an undesired impurity rather than an alloying
ingredient. They determined the permissible ranges of the components, above and below which the desired properties were not obtained. A precise deﬁnition of the invention sought to be patented
is found in the claims, set forth below, claim 3 representing the preferred composition, it being understood, however, that no iron at all
would be even more preferred.
1. A titanium base alloy consisting essentially by weight of about
0.6% to 0.9% nickel, 0.2% to 0.4% molybdenum, up to 0.2% maximum iron, balance titanium, said alloy being characterized by
good corrosion resistance in hot brine environments.
2. A titanium base alloy as set forth in Claim 1 having up to 0.1%
iron, balance titanium.
3. A titanium base alloy as set forth in Claim 1 having 0.8% nickel,
0.3% molybdenum, up to 0.1% maximum iron, balance titanium.
The examiner’s ﬁnal rejection, repeated in his Answer on appeal to
the Patent and Trademark Oﬃce (PTO) Board of Appeals (board),
was on the grounds that claims 1 and 2 are anticipated (fully met)
by, and claim 3 would have been obvious from, an article by Kalabukhova and Mikheyew, Investigation of the Mechanical Properties of
Ti-Mo-Ni Alloys, R
M
₍M
₎ No. 3, pages 130-133
(1970) (in the court below and hereinafter called “the Russian article”)
under 35 U.S.C. §§ 102 and 103, respectively. The board aﬃrmed the
examiner’s rejection.
The Russian article is short (3 pages), highly technical, and contains 10 graphs as part of the discussion. As its title indicates, it relates to ternary Ti-Mo-Ni alloys, the subject of the application at bar.
The examiner and the board both found that it would disclose to one
skilled in the art an alloy on which at least claims 1 and 2 read, so that
those claims would not be allowable under the statute because of lack
of novelty of their subject ma er. Since the article does not specifically disclose such an alloy in words, a li le thinking is required
about what it would disclose to one knowledgeable about Ti-Ni-Mo
alloys. The PTO did that thinking as follows:
Figure 1c [a graph] shows data for the ternary titanium alloy which contains Mo and Ni in the ratio of 1:3. Amongst
the actual points on the graph is one at 1% Mo + Ni. At
this point, the amounts of Mo and Ni would be 0.25% and
0.75% respectively. A similar point appears on the graph
shown in Figure 2 of the article.
Appellants do not deny that the data points are dis-

$ 08/&34)*1

closed in the reference. In fact, the Hall aﬃdavit indicates at least two speciﬁc points (at 1% and 1.25% Mo +
Ni) which would represent a description of alloys falling
within the scope of the instant claims.
On that basis, the board found that the claimed alloys were not new,
because they were disclosed in the prior art. It having been argued
that the Russian article contains no disclosure of corrosion-resistant
properties of any of the alloys, the board held: “The fact that a particular property or the end use for this alloy as contemplated by appellants was not recognized in the article is of no consequence.” It
therefore held the Russian article to be an anticipation, noting that
although the article does not discuss corrosion resistance, it does disclose other properties such as strength and ductility. The PTO further
points out that the authors of the reference must have made the alloys
to obtain the data points.
Being dissatisﬁed with the decision of the board, Titanium Metals
Corporation of America, as assignee of the Covington and Palmer application, then brought an action in the District Court for the District
of Columbia against the Commissioner pursuant to 35 U.S.C. § 145.
The case came on for trial on January 24, 1980, before the Honorable John G. Penn and was concluded in two and a half hours. The testimony of one witness was heard by the court, Dr. James C. Williams,
professor at Carnegie-Mellon University in Pi sburgh and an expert
in titanium metallurgy.
The court then concluded that claims 1-3 were not anticipated and
that claim 3 was wrongly rejected as directed to obvious subject matter. In the court’s view, Dr. Williams’ testimony tipped the scales in
favor of issuing a patent.
We are left in no doubt that the court was impressed by the totality of the evidence that the applicants for patent had discovered or invented and disclosed knowledge which is not to be found in the reference, nor do we have any doubt about that ourselves. But those facts
are beside the point. The patent law imposes certain fundamental
conditions for patentability, paramount among them being the condition that what is sought to be patented, as determined by the claims,
be new. The title of the application here involved is “Titanium Alloy,”
a composition of ma er. Surprisingly, in all of the evidence, nobody
discussed the key issue of whether the alloy was new, which is the
essence of the anticipation issue, including the expert Dr. Williams.
Plaintiﬀ’s counsel, bringing Dr. Williams’ testimony to its climax, after he had explained the nature of the ingredients, the alloys made
therefrom, and their superior corrosion resistance in hot brine, etc.,
repetitively asked him such questions as “Does the [Russian] article
direct you as one skilled in the art to a titanium alloy having nickel

$)"15&3  1"5&/5

present in an amount between .6 and .9 percent molybdenum in an
amount between .2 and .4 percent?” (emphasis ours) followed by “Is
there anything mentioned in the article about corrosion resistance?”
Of course, the answers were emphatically negative. But this and like
testimony does not deal with the critical question: do claims 1 and
2, to which the questions obviously relate, read on or encompass an
alloy which was already known by reason of the disclosure of the
Russian article?
Section 102, the usual basis for rejection for lack of novelty or anticipation, lays down certain principles for determining the novelty
[of an invention], among which are the provisions in § 102(a) and (b)
that the claimed invention has not been “described in a printed publication in this or a foreign country,” either (a) before the invention by
the applicant or (b) more than one year before the application date to
which he is entitled (strictly a “loss of right” provision similar to novelty). Either provision applies in this case, the Russian article having
a date some 5 years prior to the ﬁling date and its status as “prior art”
not being questioned. The question, therefore, is whether claims 1
and 2 encompass and, if allowed, would enable plaintiﬀ-appellee to
exclude others from making, using, or selling an alloy described in
the Russian article.
To answer the question we need only turn to the aﬃdavit of James
A. Hall, a metallurgist employed by appellee’s TIMET Division, who
undertook to analyze the Russian article disclosure by calculating the
ingredient percentages shown in the graph data points, which he presented in tabular form. There are 15 items in his table. The second
item shows a titanium base alloy containing 0.25% by weight Mo and
0.75% Ni and this is squarely within the ranges of 0.2-0.4% Mo and
0.6-0.9% Ni of claims 1 and 2. As to that disclosed alloy of the prior
art, there can be no question that claims 1 and 2 read on it and would
be infringed by anyone making, using, or selling it. Therefore, the
statute prohibits a patent containing them. This seems to be a case
either of not adequately considering the novelty requirement of the
statute, the true meaning of the correlative term “anticipation,” or the
meaning of the claims.
By reason of the court’s quotations from cases holding that a reference is not an anticipation which does not enable one skilled in the
art to practice the claimed invention, it appears that the trial court
thought there was some deﬁciency in the Russian article on that score.
Enablement in this case involves only being able to make the alloy,
given the ingredients and their proportions without more. The evidence here, however, clearly answers that question in two ways. Appellee’s own patent application does not undertake to tell anyone
how to make the alloy it describes and seeks to patent. It assumes
that those skilled in the art would know how. Secondly, appellee’s

$ 08/&34)*1

expert, Dr. Williams, testiﬁed on cross examination that given the
alloy information in the Russian article, he would know how to prepare the alloys “by at least three techniques.” Enablement is not a
problem in this case.
As we read the situation, the court was misled by the arguments
and evidence to the eﬀect that the inventors here found out and disclosed in their application many things that one cannot learn from
reading the Russian article and that this was suﬃcient in law to justify
granting them a patent for their contributions—such things as what
good corrosion resistance the claimed alloys have against hot brine,
which possibly was not known, and the range limits of the Ni and Mo
content, outside of which that resistance diminishes, which are teachings of very useful information. These things the applicants teach the
art and the Russian article does not. But throughout the trial counsel
never came to grips with the real issues: (1) what do the claims cover
and (2) is what they cover new? Under the laws Congress wrote, they
must be considered. Congress has not seen ﬁt to permit the patenting
of an old alloy, known to others through a printed publication, by one
who has discovered its corrosion resistance or other useful properties,
or has found out to what extent one can modify the composition of
the alloy without losing such properties.
For all of the foregoing reasons, the court below commi ed clear
error and legal error in authorizing the issuance of a patent on claims
1 and 2 since, properly construed, they are anticipated under § 102
by the Russian article which admi edly discloses an alloy on which
these claims read.
C

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Under the new § 102(a)(1), ”A person shall be entitled to a patent
unless the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before
the eﬀective ﬁling date of the claimed invention.” Most of the caselaw
bearing on these phrases was developed under the old § 102; signiﬁcant relevant diﬀerences will be noted.
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U.S. patents pose few conceptual or practical diﬃculties; they are
prior art as of the day they issue. It is not always so easy to tell
whether a foreign right is a ”patent” within the meaning of § 102. In
re Carlson held that a German Geschmacksmuster counted as a patent
for prior art purposes. A person may obtain one by ”depositing with
a local oﬃce an application with a drawing, photograph or sample
of the article.” That was enough, even though ”Geschmacksmuster
on display for public view in remote cities in a far-away land may

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create a burden of discovery for one without the time, desire, or resources to journey there in person or by agent to observe that which
was registered and protected under German law.” Such is life.
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Carol Klopfenstein and John Brent appeal a decision from the Patent
and Trademark Oﬃce’s Board of Patent Appeals and Interferences
(“Board”) upholding the denial of their patent application. The Board
upheld the Patent and Trademark Oﬃce’s (“PTO’s”) initial denial of
their application on the ground that the invention described in the
patent application was not novel under 35 U.S.C. § 102(b) because it
had already been described in a printed publication more than one
year before the date of the patent application. We aﬃrm.
B
The appellants applied for a patent on October 30, 2000. Their patent
application, Patent Application Serial No. 09/699,950 (“the ‘950 application”), discloses methods of preparing foods comprising extruded
soy cotyledon ﬁber (“SCF”). The ‘950 application asserts that feeding
mammals foods containing extruded SCF may help lower their serum
cholesterol levels while raising HDL cholesterol levels. The fact that
extrusion reduces cholesterol levels was already known by those of
ordinary skill in the art that worked with SCF. What was not known
at the time was that double extrusion increases this eﬀect and yielded
even stronger results.
In October 1998, the appellants, along with colleague M. Liu, presented a printed slide presentation (“Liu” or “the Liu reference”)
entitled “Enhancement of Cholesterol-Lowering Activity of Dietary
Fibers By Extrusion Processing” at a meeting of the American Association of Cereal Chemists (“AACC”). The fourteen-slide presentation
was printed and pasted onto poster boards. The printed slide presentation was displayed continuously for two and a half days at the
AACC meeting.
In November of that same year, the same slide presentation was
put on display for less than a day at an Agriculture Experiment Station (“AES”) at Kansas State University.
Both parties agree that the Liu reference presented to the AACC
and at the AES in 1998 disclosed every limitation of the invention disclosed in the ‘950 patent application. Furthermore, at neither presentation was there a disclaimer or notice to the intended audience prohibiting note-taking or copying of the presentation. Finally, no copies
of the presentation were disseminated either at the AACC meeting or

$ 08/&34)*1

at the AES, and the presentation was never catalogued or indexed in
any library or database.
DISCUSSION
B.
The appellants argue on appeal that the key to establishing whether
or not a reference constitutes a “printed publication” lies in determining whether or not it had been disseminated by the distribution of reproductions or copies and/or indexed in a library or database. They
assert that because the Liu reference was not distributed and indexed,
it cannot count as a “printed publication” for the purposes of 35 U.S.C.
§ 102(b). To support their argument, they rely on several precedents
from this court and our predecessor court on “printed publications.”
They argue that In re Cronyn, In re Hall, Massachuse s Institute of Technology v. AB Fortia, and In re Wyer, among other cases, all support the
view that distribution and/or indexing is required for something to
be considered a “printed publication.”
We ﬁnd the appellants’ argument unconvincing and disagree
with their characterization of our controlling precedent. Even if the
cases cited by the appellants relied on inquiries into distribution and
indexing to reach their holdings, they do not limit this court to ﬁnding something to be a “printed publication” only when there is distribution and/or indexing. Indeed, the key inquiry is whether or not a
reference has been made “publicly accessible.”
The statutory phrase “printed publication” has been interpreted
to mean that before the critical date the reference must have been
suﬃciently accessible to the public interested in the art; dissemination and public accessibility are the keys to the legal determination
whether a prior art reference was “published.”
For example, a public billboard targeted to those of ordinary skill
in the art that describes all of the limitations of an invention and that is
on display for the public for months may be neither “distributed” nor
“indexed” – but it most surely is “suﬃciently accessible to the public
interested in the art” and therefore, under controlling precedent, a
“printed publication.”
Furthermore, the cases that the appellants rely on can be clearly
distinguished from this case. Cronyn involved college students’ presentations of their undergraduate theses to a defense commi ee
made up of four faculty members. Their theses were later catalogued
in an index in the college’s main library. The index was made up of
thousands of individual cards that contained only a student’s name
and the title of his or her thesis. The index was searchable by student name and the actual theses themselves were neither included
in the index nor made publicly accessible. We held that because the

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theses were only presented to a handful of faculty members and had
not been catalogued or indexed in a meaningful way, they were not
suﬃciently publicly accessible for the purposes of 35 U.S.C. § 102(b).
In Hall, this court determined that a thesis ﬁled and indexed in
a university library did count as a “printed publication.” The Hall
court arrived at its holding after taking into account that copies of the
indexed thesis itself were made freely available to the general public
by the university more than one year before the ﬁling of the relevant
patent application in that case. But the court in Hall did not rest its
holding merely on the indexing of the thesis in question. Instead, it
used indexing as a factor in determining “public accessibility.” As
the court asserted:
The “printed publication” bar is grounded on the principle that once an invention is in the public domain, it is
no longer patentable by anyone. Because there are many
ways in which a reference may be disseminated to the
interested public, “public accessibility” has been called
the touchstone in determining whether a reference constitutes a “printed publication” bar under 35 U.S.C. § 102(b).
In MIT, a paper delivered orally to the First International Cell Culture Congress was considered a “printed publication.” In that case,
as many as 500 persons having ordinary skill in the art heard the presentation, and at least six copies of the paper were distributed. The
key to the court’s ﬁnding was that actual copies of the presentation
were distributed. The court did not consider the issue of indexing.
The MIT court determined the paper in question to be a “printed publication” but did not limit future determinations of the applicability
of the “printed publication” bar to instances in which copies of a reference were actually oﬀered for distribution. 4
Finally, the Wyer court determined that an Australian patent application kept on microﬁlm at the Australian Patent Oﬃce was sufﬁciently accessible to the public and to persons skilled in the pertinent art to qualify as a ”printed publication.” The court so found even
though it did not determine whether or not there was “actual viewing or dissemination” of the patent application. Id. It was suﬃcient
for the court’s purposes that the records of the application were kept
4

With regard to scientiﬁc presentations, it is important to note than an entirely
oral presentation at a scientiﬁc conference that includes neither slides nor copies of
the presentation is without question not a “printed publication” for the purposes
of 35 U.S.C. § 102(b). Furthermore, a presentation that includes a transient display
of slides is likewise not necessarily a “printed publication.” See, e.g., Regents of the
Univ. of Cal. v. Howmedica, Inc., 530 F.Supp. 846 (D.N.J. 1981) (holding that “the
projection of slides at the lecture that was limited in duration and could not disclose
the invention to the extent necessary to enable a person of ordinary skill in the art
to make or use the invention” was not a “printed publication”).

$ 08/&34)*1

so that they could be accessible to the public. Id.5 According to the
Wyer court, the entire purpose of the “printed publication” bar was
to “prevent withdrawal” of disclosures already in the possession of
the public by the issuance of a patent.
Thus, throughout our case law, public accessibility has been the
criterion by which a prior art reference will be judged for the purposes of § 102(b). Oftentimes courts have found it helpful to rely
on distribution and indexing as proxies for public accessibility. But
when they have done so, it has not been to the exclusion of all other
measures of public accessibility. In other words, distribution and indexing are not the only factors to be considered in a § 102(b) “printed
publication” inquiry.
C.
In this case, the Liu reference was displayed to the public approximately two years before the ‘950 application ﬁling date. The reference
was shown to a wide variety of viewers, a large subsection of whom
possessed ordinary skill in the art of cereal chemistry and agriculture.
Furthermore, the reference was prominently displayed for approximately three cumulative days at AACC and the AES at Kansas State
University. The reference was shown with no stated expectation that
the information would not be copied or reproduced by those viewing
it. Finally, no copies of the Liu display were distributed to the public and the display was not later indexed in any database, catalog or
library.
The duration of the display is important in determining the opportunity of the public in capturing, processing and retaining the information conveyed by the reference. The more transient the display,
the less likely it is to be considered a “printed publication.” Conversely, the longer a reference is displayed, the more likely it is to
be considered a “printed publication.” In this case, the Liu reference
was displayed for a total of approximately three days. It was shown
at the AACC meeting for approximately two and a half days and at
the AES at Kansas State University for less than one day.
The expertise of the intended audience can help determine how
easily those who viewed it could retain the displayed material. As
Judge Learned Hand explained in Jockmus v. Leviton, a reference,
“however ephemeral its existence,” may be a “printed publication”
if it “goes direct to those whose interests make them likely to observe
and remember whatever it may contain that is new and useful.” In
this case, the intended target audience at the AACC meeting was comprised of cereal chemists and others having ordinary skill in the art
5

Unlike in Cronyn, it was the actual patent application — and not just an index
card searchable by author name only — that was made publicly accessible.

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of the ‘950 patent application. The intended viewers at the AES most
likely also possessed ordinary skill in the art.
Whether a party has a reasonable expectation that the information
it displays to the public will not be copied aids our § 102(b) inquiry.
Where professional and behavioral norms entitle a party to a reasonable expectation that the information displayed will not be copied, we
are more reluctant to ﬁnd something a “printed publication.” This
reluctance helps preserve the incentive for inventors to participate
in academic presentations or discussions. Where parties have taken
steps to prevent the public from copying temporarily posted information, the opportunity for others to appropriate that information
and assure its widespread public accessibility is reduced. These protective measures could include license agreements, non-disclosure
agreements, anti-copying software or even a simple disclaimer informing members of the viewing public that no copying of the information will be allowed or countenanced. Protective measures are to
be considered insofar as they create a reasonable expectation on the
part of the inventor that the displayed information will not be copied.
In this case, the appellants took no measures to protect the information they displayed — nor did the professional norms under which
they were displaying their information entitle them to a reasonable
expectation that their display would not be copied. There was no disclaimer discouraging copying, and any viewer was free to take notes
from the Liu reference or even to photograph it outright.
Finally, the ease or simplicity with which a display could be
copied gives further guidance to our § 102(b) inquiry. The more complex a display, the more diﬃcult it will be for members of the public to
eﬀectively capture its information. The simpler a display is, the more
likely members of the public could learn it by rote or take notes adequate enough for later reproduction. The Liu reference was made up
of 14 separate slides. One slide was a title slide; one was an acknowledgement slide; and four others represented graphs and charts of experiment results. The other eight slides contained information presented in bullet point format, with no more than three bullet points
to a slide. Further, no bullet point was longer than two concise sentences. Finally, as noted earlier, the fact that extrusion lowers cholesterol levels was already known by those who worked with SCF. The
discovery disclosed in the Liu reference was that double extrusion
increases this eﬀect. As a result, most of the eight substantive slides
only recited what had already been known in the ﬁeld, and only a
few slides presented would have needed to have been copied by an
observer to capture the novel information presented by the slides.
Upon reviewing the above factors, it becomes clear that the Liu reference was suﬃciently publicly accessible to count as a “printed publication” for the purposes of 35 U.S.C. § 102(b). The reference itself

$ 08/&34)*1

was shown for an extended period of time to members of the public
having ordinary skill in the art of the invention behind the ‘950 patent
application. Those members of the public were not precluded from
taking notes or even photographs of the reference. And the reference
itself was presented in such a way that copying of the information it
contained would have been a relatively simple undertaking for those
to whom it was exposed — particularly given the amount of time they
had to copy the information and the lack of any restrictions on their
copying of the information. For these reasons, we conclude that the
Liu reference was made suﬃciently publicly accessible to count as a
“printed publication” under § 102(b).
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The old § 102 got at this concept in two diﬀerent ways. It denied a
patent where the invention was ”known or used by others” before
the date of invention (a ”novelty” rule) or where it was ”in public use”
more than a year before the ﬁling date (a ”statutory bar”). While the
two provisions diﬀered in their timing (more on this in the Priority
section below), the most fundamental distinction was that ”known or
used by others” only applied to uses made by third parties, whereas
”in public use” also could be triggered by anyone, including the inventor.
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 64
This suit was brought for an alleged infringement of the complainant’s reissued le ers-patent, No. 5216, dated Jan. 7, 1873, for
an improvement in corset-springs.
The original le ers bear date July 17, 1866, and were issued to
Samuel H. Barnes. The reissue was made to the complainant, under
her then name, Frances Lee Barnes, executrix of the original patentee.
The speciﬁcation for the reissue declares:
This invention consists in forming the springs of corsets
of two or more metallic plates, placed one upon another,
and so connected as to prevent them from sliding oﬀ each
other laterally or edgewise, and at the same time admit of
their playing or sliding upon each other, in the direction
of their length or longitudinally, whereby their ﬂexibility
and elasticity are greatly increased, while at the same time
much strength is obtained.
The second claim is as follows:
A pair of corset-springs, each member of the pair being
composed of two or more metallic plates, placed one on

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another, and fastened together at their centres, and so connected at or near each end that they can move or play on
each other in the direction of their length.

[The patent statute in force at the time had a two-year statutory bar,
whose] eﬀect is to render le ers-patent invalid if the invention which
they cover was in public use, with the consent and allowance of the
inventor, for more than two years prior to his application.
The evidence on which the defendants rely to establish a prior
public use of the invention consists mainly of the testimony of the
complainant.
She testiﬁes that Barnes invented the improvement covered by
his patent between January and May, 1855; that between the dates
named the witness and her friend Miss Cugier were complaining of
the breaking of their corset-steels. Barnes, who was present, and was
an intimate friend of the witness, said he thought he could make her
a pair that would not break. At their next interview he presented her
with a pair of corset-steels which he himself had made. The witness
wore these steels a long time. In 1858 Barnes made and presented to
her another pair, which she also wore a long time. When the corsets
in which these steels were used wore out, the witness ripped them
open and took out the steels and put them in new corsets. This was
done several times.
It is admi ed, and, in fact, is asserted, by complainant, that these
steels embodied the invention afterwards patented by Barnes and
covered by the reissued le ers-patent on which this suit is brought.
Joseph H. Sturgis, another witness for complainant, testiﬁes that
in 1863 Barnes spoke to him about two inventions made by himself,
one of which was a corset-steel, and that he went to the house of
Barnes to see them. Before this time, and after the transactions testiﬁed to by the complainant, Barnes and she had intermarried. Barnes
said his wife had a pair of steels made according to his invention in
the corsets which she was then wearing, and if she would take them
oﬀ he would show them to witness. Mrs. Barnes went out, and returned with a pair of corsets and a pair of scissors, and ripped the
corsets open and took out the steels. Barnes then explained to witness how they were made and used.
The question for our decision is, whether this testimony shows a
public use within the meaning of the statute.
We observe, in the ﬁrst place, that to constitute the public use of
an invention it is not necessary that more than one of the patented
articles should be publicly used. The use of a great number may tend
to strengthen the proof, but one well-deﬁned case of such use is just
as eﬀectual to annul the patent as many. For instance, if the inventor
of a mower, a printingpress, or a railway-car makes and sells only one

$ 08/&34)*1

of the articles invented by him, and allows the vendee to use it for two
years, without restriction or limitation, the use is just as public as if
he had sold and allowed the use of a great number.
We remark, secondly, that, whether the use of an invention is public or private does not necessarily depend upon the number of persons to whom its use is known. If an inventor, having made his device, gives or sells it to another, to be used by the donee or vendee,
without limitation or restriction, or injunction of secrecy, and it is so
used, such use is public, even though the use and knowledge of the
use may be conﬁned to one person.
We say, thirdly, that some inventions are by their very character
only capable of being used where they cannot be seen or observed by
the public eye. An invention may consist of a lever or spring, hidden
in the running gear of a watch, or of a rachet, shaft, or cog-wheel covered from view in the recesses of a machine for spinning or weaving.
Nevertheless, if its inventor sells a machine of which his invention
forms a part, and allows it to be used without restriction of any kind,
the use is a public one. So, on the other hand, a use necessarily open
to public view, if made in good faith solely to test the qualities of
the invention, and for the purpose of experiment, is not a public use
within the meaning of the statute. City of Elizabeth v. American Nicholson Pavement Co..
Tested by these principles, we think the evidence of the complainant herself shows that for more than two years before the application for the original le ers there was, by the consent and allowance
of Barnes, a public use of the invention, covered by them. He made
and gave to her two pairs of corset-steels, constructed according to
his device, one in 1855 and one in 1858. They were presented to her
for use. He imposed no obligation of secrecy, nor any condition or
restriction whatever. They were not presented for the purpose of experiment, nor to test their qualities. No such claim is set up in her
testimony. The invention was at the time complete, and there is no
evidence that it was afterwards changed or improved. The donee of
the steels used them for years for the purpose and in the manner designed by the inventor. They were not capable of any other use. She
might have exhibited them to any person, or made other steels of the
same kind, and used or sold them without violating any condition or
restriction imposed on her by the inventor.
According to the testimony of the complainant, the invention was
completed and put to use in 1855. The inventor slept on his rights
for eleven years. Le ers-patent were not applied for till March, 1866.
In the mean time, the invention had found its way into general, and
almost universal, use. A great part of the record is taken up with the
testimony of the manufacturers and venders of corset-steels, showing that before he applied for le ers the principle of his device was

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almost universally used in the manufacture of corset-steels. It is fair
to presume that having learned from this general use that there was
some value in his invention, he a empted to resume, by his application, what by his acts he had clearly dedicated to the public.
An abandonment of an invention to the public may be
evinced by the conduct of the inventor at any time, even
within the two years named in the law. The eﬀect of the
law is that no such consequence will necessarily follow
from the invention being in public use or on sale, with the
inventor’s consent and allowance, at any time within two
years before his application; but that, if the invention is
in public use or on sale prior to that time, it will be conclusive evidence of abandonment, and the patent will be
void.
City of Elizabeth We are of opinion that the defence of two years’ public use, by the consent and allowance of the inventor, before he made
application for le ers-patent, is satisfactorily established by the evidence.
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An inventor can obtain a patent only if the invention is “novel” – that
is, that no one has done the same thing before. Rather than adopting
an absolute novelty rule, however, patent law has traditionally required that most categories of prior art be “accessible to the public.”
Thus, while [old] 35 U.S.C. § 102(a) bars a patent if the invention was
“known or used by others” before the applicant invented it, courts
have interpreted that term to mean “publicly known or used.” At
the same time, the public accessibility requirement does not require
that the public have a realistic chance of accessing the information;
“public” seems to mean merely “not secret.” An invention performed
underground on private property in a rural area, an invention found
only inside the walls of a safe, and a single copy of a graduate thesis in
the basement of a library in Germany have all been held suﬃciently
“public” to constitute prior art.
In addition to novelty, the Patent Act of 1952, like its predecessors, created a series of “statutory bars” designed to prevent inventors from making commercial use of their invention while keeping it
secret. [Old] section 102(b) provides that even a true ﬁrst inventor
is not entitled to a patent if the invention has been “on sale” or “in
public use” more than a year before the inventor ﬁles her patent application. As with [old] section 102(a), the courts have interpreted the
word “public” quite loosely, so that even uses that are extremely unlikely to be viewed by the public are nonetheless classed as “public

$ 08/&34)*1

uses” so long as they are not aﬃrmatively secret. In the most extreme
example, the Supreme Court held that a woman engaged in a public
use of a corset invented by her ﬁancé when she wore it under her
clothing.
But even a very broad deﬁnition of “public” left a signiﬁcant loophole – an inventor could avoid the one-year statutory bar by commercializing his invention but treating it as a trade secret. Because a secret
use is by deﬁnition not a public use, a company could make commercial use of an invention indeﬁnitely without triggering the one-year
period for ﬁling. To solve this problem, courts for more than seventy years have created a special rule for secret commercial uses: a
secret commercial use is not prior art that bars a third party from
later obtaining a patent, but it does start the one-year clock running
for the user. This rule originated in a 1940 opinion by Judge Learned
Hand in Metallizing Engineering v. Kenyon Bearing & Auto Parts. The
court acknowledged that interpreting the same term (“public use”) to
have diﬀerent meanings was hard to reconcile with the statute. But
Judge Hand reasoned that it was not the intent of the statute to encourage secrecy, but instead to encourage disclosure. Metallizing’s
split interpretation of public use served that goal in two ways. First,
it encouraged inventors to ﬁle a patent quickly rather than relying
in trade secrecy, because they would lose the right to patent if they
waited longer than a year. Second, the fact that a secret commercial
use wouldn’t prevent a later patent from issuing to a third party adds
to the disclosure incentive, because an inventor who opts for trade secrecy may ﬁnd that a later inventor has patented their own idea and
there is nothing they can do to stop it.
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[Lough designed an improved seal for outboard motors.] After some
trial and error with his grand-father’s metal lathe, he made six usable
prototypes in the spring of 1986. He installed one prototype in his
own boat at home. Three months later, he gave a second prototype
to a friend who installed it in his boat. He also installed prototypes in
the boat of the owner of the marina where he worked and in the boat
of a marina customer. He gave the remaining prototypes to longtime
friends who were employees at another marina in Sarasota. Lough
did not charge anyone for the prototypes. For over a year following
the installation of these prototypes, Lough neither asked for nor received any comments about the operability of the prototypes. During
this time, Lough did not a empt to sell any seal assemblies.
On June 6, 1988, Lough ﬁled a patent application entitled ”Liquid
Seal for Marine Stern Drive Gear Shift Shafts,” which issued as [U.S.
Patent No.   "] on July 18, 1989.

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One is entitled to a patent unless, inter alia, ”the invention was ...
in public use ... in this country, more than one year prior to the date
of the application for patent in the United States.” We have deﬁned
”public use” as including any use of the claimed invention by a person other than the inventor who is under no limitation, restriction or
obligation of secrecy to the inventor. An evaluation of a question of
public use depends on how the totality of the circumstances of the
case comports with the policies underlying the public use bar. These
policies include: (1) discouraging the removal, from the public domain, of inventions that the public reasonably has come to believe are
freely available; (2) favoring the prompt and widespread disclosure
of inventions; (3) allowing the inventor a reasonable amount of time
following sales activity to determine the potential economic value of
a patent; and (4) prohibiting the inventor from commercially exploiting the invention for a period greater than the statutorily prescribed
time.
Neither party disputes that Lough’s prototypes were in use before
the critical date. Thus, both parties agree that the issue presented on
appeal is whether the jury properly decided that the use of Lough’s
six prototypes in 1986, prior to the critical date, constituted experimental use so as to negate the conclusion of public use.
”The use of an invention by the inventor himself, or of any other
person under his direction, by way of experiment, and in order to
bring the invention to perfection, has never been regarded as [a public] use.” City of Elizabeth. This doctrine is based on the underlying
policy of providing an inventor time to determine if the invention is
suitable for its intended purpose, in eﬀect, to reduce the invention
to practice. See id. (”It is sometimes said that an inventor acquires
an undue advantage over the public by delaying to take out a patent,
but this cannot be said with justice when the delay is occasioned by
a bona ﬁde eﬀort to bring his invention to perfection, or to ascertain
whether it will answer the purpose intended.”). If a use is experimental, it is not, as a ma er of law, a public use within the meaning
of section 102.
To determine whether a use is ”experimental,” a question of law,
the totality of the circumstances must be considered, including various objective indicia of experimentation surrounding the use, such as
the number of prototypes and duration of testing, whether records or
progress reports were made concerning the testing, the existence of
a secrecy agreement between the patentee and the party performing
the testing, whether the patentee received compensation for the use
of the invention, and the extent of control the inventor maintained
over the testing.
In order to justify a determination that legally suﬃcient experimentation has occurred, there must be present certain minimal indi-

$ 08/&34)*1

cia. The framework might be quite formal, as may be expected when
large corporations conduct experiments, governed by contracts and
explicit wri en obligations. When individual inventors or small business units are involved, however, less formal and seemingly casual
experiments can be expected. Such less formal experiments may be
deemed legally suﬃcient to avoid the public use bar, but only if they
demonstrate the presence of the same basic elements that are required
to validate any experimental program.
It cannot be reasonably disputed that Lough’s use of the invention
was not ”experimental” so as to negate a conclusion of public use. It
is true that Lough did not receive any compensation for the use of the
prototypes. He did not place the seal assembly on sale before applying for a patent. Lough’s lack of commercialization, however, is not
dispositive of the public use question in view of his failure to present
objective evidence of experimentation. Lough kept no records of the
alleged testing. Nor did he inspect the seal assemblies after they had
been installed by other mechanics. He provided the seal assemblies
to friends and acquaintances, but without any provision for followup involvement by him in assessment of the events occurring during
the alleged experiments, and at least one seal was installed in a boat
that was later sold to strangers. Thus, Lough did not maintain any
supervision and control over the seals during the alleged testing.
Lough argues that other evidence supports a ﬁnding that his uses
were experimental, including his own testimony that the prototypes
were installed for experimental purposes and the fact that the prototypes were used in such a manner that they were unlikely to be seen
by the public. However, the expression by an inventor of his subjective intent to experiment, particularly after institution of litigation, is
generally of minimal value. n addition, the fact that the prototypes
were unlikely to be seen by the public does not support Lough’s position. As the Supreme Court stated in Egbert:
Some inventions are by their very character only capable
of being used where they cannot be seen or observed by
the public eye. An invention may consist of a lever or
spring, hidden in the running gear of a watch, or of a rachet, shaft, or cogwheel covered from view in the recesses
of a machine for spinning or weaving. Nevertheless, if its
inventor sells a machine of which his invention forms a
part, and allows it to be used without restriction of any
kind, the use is a public one.
Moreover, those to whom he gave the prototypes constituted ”the
public,” in the absence of meaningful evidence of experimentation.
We therefore hold that the jury had no legal basis to conclude that
the uses of Lough’s prototypes were experimental and that the pro-

$)"15&3  1"5&/5

totypes were not in public use prior to the critical date. Our holding
is consistent with the policy underlying the experimental use negation, that of providing an inventor time to determine if the invention
is suitable for its intended purpose, i.e., to reduce the invention to
practice. Lough’s activities clearly were not consistent with that policy. We do not dispute that it may have been desirable in this case
for Lough to have had his prototypes installed by mechanics of various levels of skill in boats that were exposed to diﬀerent conditions.
Moreover, Lough was free to test his invention in boats of friends
and acquaintances to further verify that his invention worked for its
intended purpose; however, Lough was required to maintain some
degree of control and feedback over those uses of the prototypes if
those tests were to negate public use.
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The pre-AIA case law indicates that on sale activity will bar
patentability if the claimed invention was: (1) the subject of a commercial sale or oﬀer for sale, not primarily for experimental purposes;
and (2) ready for patenting. See Pfaﬀ v. Wells Elecs., Inc. Contract law
principles apply in order to determine whether a commercial sale or
oﬀer for sale occurred.
A sale is a contract between parties wherein the seller agrees to give
and to pass rights of property in return for the buyer’s payment or
promise “to pay the seller for the things bought or sold.. A contract
for the sale of goods requires a concrete oﬀer and acceptance of that
oﬀer. See, e.g., Linear Tech. Corp. v. Micrel, Inc. (Court held there was
no sale where prospective purchaser submi ed an order for goods at
issue, but received an order acknowledgement reading “will advisenot booked.” Prospective purchaser would understand that order
was not accepted.).
An assignment or sale of the rights in the invention and potential
patent rights is not a sale of ”the invention.” In re Kollar, distinguishes
licenses which trigger the on-sale bar (e.g., a standard computer software license wherein the product is just as immediately transferred to
the licensee as if it were sold), from licenses that merely grant rights
to an invention which do not per se trigger the on-sale bar (e.g., exclusive rights to market the invention or potential patent rights).
The Supreme Court’s “ready for patenting” prong applies in the context of both the on sale and public use bars. “Ready for patenting,”

$ 08/&34)*1

the second prong of the Pfaﬀ test, may be satisﬁed in at least two ways:
by proof of reduction to practice before the critical date; or by proof
that prior to the critical date the inventor had prepared drawings or
other descriptions of the invention that were suﬃciently speciﬁc to
enable a person skilled in the art to practice the invention. In Invitrogen Corp. v. Biocrest Manufacturing L.P., The patent was held invalid because the invention for a computer chip socket was “ready
for patenting” when it was oﬀered for sale more than one year prior
to the application ﬁling date. Even though the invention had not yet
been reduced to practice, the manufacturer was able to produce the
claimed computer chip sockets using the inventor’s detailed drawings and speciﬁcations, and those sockets contained all elements of
invention claimed in the patent.
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Helsinn, the government, and other amici argue that the AIA
changed the law by adding the ”otherwise available to the public”
phrase. They argue that the on-sale bar now does not encompass secret sales and requires that a sale make the invention available to the
public in order to trigger application of the on-sale bar. Apart from
the additional statutory language, this argument primarily relies on
ﬂoor statements made by individual members of Congress.
We decline the invitation by the parties to decide this case more
broadly than necessary. At most the ﬂoor statements show an intent ”to do away with precedent under current law.” (remarks of Sen.
Leahy). Such precedent had held certain secret uses to be invalidating under the ”public use” prong of § 102(b). Each of those cases
involved a public use where the invention was not, as a result of the
use, disclosed to the public. This public use issue is not before us, and
we decline to address it.
The ﬂoor statements do not identify any sale cases that would be
overturned by the amendments. Even if the ﬂoor statements were intended to overrule those secret or conﬁdential sale cases, that would
have no eﬀect here since those cases were concerned entirely with
whether the existence of a sale or oﬀer was public. Here, the existence of the sale– i.e., the Supply and Purchase Agreement between
Helsinn and MGI – was publicly announced in MGI’s 8-K ﬁling with
the SEC.
Our prior cases have applied the on-sale bar even when there is
no delivery, when delivery is set after the critical date, or, even when,
upon delivery, members of the public could not ascertain the claimed
invention. There is no indication in the ﬂoor statements that these
members intended to overrule these cases.

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The old § 102 had a closed list of prior art categories. The open-ended
language ”otherwise available to the public” is new with the AIA. In
the PTO’s view, ”This ’catch-all’ provision permits decision makers
to focus on whether the disclosure was ’available to the public,’ rather
than on the means by which the claimed invention became available
to the public or whether a disclosure constitutes a ’printed publication’ or falls within another category of prior art.”
D 1SJPSJUZ
The AIA’s novelty provisions took eﬀect on March 16, 2013. They
apply to any applications ﬁled on or after that date. Applications
ﬁled before that date are examined under the old pre-AIA rules.
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A person shall be entitled to a patent unless –
(a) the invention was [prior art by someone else] before the
invention thereof by the applicant for patent, or
(b) the invention was [prior art by anyone] more than one year
prior to the date of the application for patent, or
(g) before such person’s invention thereof, the invention was
made by another inventor who had not abandoned, suppressed, or concealed it. In determining priority of invention under this subsection, there shall be considered not
only the respective dates of conception and reduction to
practice of the invention, but also the reasonable diligence
of one who was ﬁrst to conceive and last to reduce to practice, from a time prior to conception by the other.

Pay a ention to the structural diﬀerences between old subsections
(a), (b), and (g). Old § 102(a) was a novelty provision: it denied a
patent where someone else engaged in activity showing that the applicant’s invention was not novel when it was supposedly ”invented.”
Old § 102(b) was a statutory bar: it denied a patent to an applicant
who waited too long to apply. And old § 102(g) was a true priority
provision that dealt with the non-uncommon situation in which two
parties independently came up with the same invention and neither
of them generated prior art that would block the other’s application.

$ 08/&34)*1

To apply old § 102(a), it was necessary to break down the inventive process. The basic concepts were ”invention” (i.e. ”conception”),
”reduction to practice,” and ”reasonable diligence.”
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Pre-AIA 35 U.S.C. 102(g) issues such as conception, reduction to practice and diligence, while more commonly applied to interference matters, also arise in other contexts.
Subsection (g) of pre-AIA 35 U.S.C. 1§ 02 is the basis of interference practice for determining priority of invention between two parties. An interference is an inter partes proceeding directed at determining the ﬁrst to invent as among the parties to the proceeding, involving two or more pending applications naming diﬀerent inventors or one or more pending applications and one or more unexpired
patents naming diﬀerent inventors. The United States [was] unusual
in having a ﬁrst to invent rather than a ﬁrst to ﬁle system. Upon conclusion of an interference, subject ma er claimed by the losing party
that was the basis of the interference is rejected under pre-AIA 35
U.S.C. 102(g).
Conception has been deﬁned as “the complete performance of the
mental part of the inventive act” and it is “the formation in the mind
of the inventor of a deﬁnite and permanent idea of the complete and
operative invention as it is thereafter to be applied in practice.” Conception is established when the invention is made suﬃciently clear
to enable one skilled in the art to reduce it to practice without the exercise of extensive experimentation or the exercise of inventive skill.
Conception has also been deﬁned as a disclosure of an invention
which enables one skilled in the art to reduce the invention to a practical form without “exercise of the inventive faculty.” It is se led that
in establishing conception a party must show possession of every feature recited in the count, and that every limitation of the count must
have been known to the inventor at the time of the alleged conception.
Conception must be proved by corroborating evidence. In Hi eman
v. Ru er, the inventor’s “hope” that a genetically altered yeast would
produce antigen particles having the particle size and sedimentation
rates recited in the claims did not establish conception, since the inventor did not show that he had a “deﬁnite and permanent understanding” as to whether or how, or a reasonable expectation that, the
yeast would produce the recited antigen particles. There must be a
contemporaneous recognition and appreciation of the invention for
there to be conception. On rare occasions conception and reduction
to practice occur simultaneously.
Reduction to practice may be an actual reduction or a constructive
reduction to practice which occurs when a patent application on the

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claimed invention is ﬁled. The ﬁling of a patent application serves as
conception and constructive reduction to practice of the subject matter described in the application. Thus the inventor need not provide
evidence of either conception or actual reduction to practice when
relying on the content of the patent application.
In an interference proceeding, a party seeking to establish an actual reduction to practice must satisfy a two-prong test: (1) the party
constructed an embodiment or performed a process that met every
element of the interference count, and (2) the embodiment or process
operated for its intended purpose. Actual reduction to practice requires a showing of the invention in a physical or tangible form that
shows every element of the count. For an actual reduction to practice,
the invention must have been suﬃciently tested to demonstrate that
it will work for its intended purpose, but it need not be in a commercially satisfactory stage of development. If a device is so simple, and
its purpose and eﬃcacy so obvious, construction alone is suﬃcient
to demonstrate workability. The invention must be recognized and
appreciated for a reduction to practice to occur. An inventor need not
understand precisely why his invention works in order to achieve an
actual reduction to practice.
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[Morway (appellants) conceived on or before April 12, 1945 and ﬁled
on December 27, 1946. Bondi (appellees) conceived on June 14, 1945
and ﬁled on October 31, 1945. Both parties were entitled to constructive reduction to practice as of their ﬁling dates.]
Appellants contend that there was a reduction to practice between
January 31, 1945 and March 13, 1945. It is claimed that on January 30,
1945 Beerbower, one of the joint appellants herein, compounded a
grease containing Carbowax 1500, which grease is said to meet the issue counts. That grease was subjected to a standard Norma-Hoﬀman
oxidation test. It is claimed that the results of this test were good, and
counsel for Morway et al. contends that there was an actual reduction
to practice when this grease was successfully tested.
Mr. Alan Beerbower, one of the appellants herein, testiﬁed on
cross-examination that the Norma-Hoﬀman bomb test merely measures resistance of the grease to oxidation under static or storage conditions, but not under service conditions; and that he would not be
able to predict service life from Norma-Hoﬀman bomb results. In
view of the foregoing testimony by appellants’ expert witnesses, we
think it clear that a successful Norma-Hoﬀman laboratory test falls
far short of simulating actual service tests with suﬃcient closeness to
constitute a reduction to practice.
Thus, appellants, although ﬁrst to conceive, were last to reduce

$ 08/&34)*1

to practice. If they are to prevail, they must aﬃrmatively establish
continuing and reasonable diligence in reducing to practice or reasonable excuse for failure to act. Such diligence must be shown from
a date immediately prior to the time that Bondi conceived, on June
14, 1945, until reduction to practice by themselves as ﬁrst conceivers.
The record shows the following activities by appellants:
• On June 7, August 1, August 15, and September 28, 1945, greases
meeting the counts were prepared, and laboratory tests, such as
the A.S.T.M. penetration test, were conducted on them.
• On October 2, 1945, Miss O’Halloran conducted a Ford Wheel
Bearing Test on the grease prepared September 28.
• On December 26, 1945, a grease meeting the counts was prepared, and laboratory tests conducted on it.
• The record then shows further activities (mainly aimed at possible commercial exploitation of the grease in issue) in February,
May, August, and November of 1946.
There was no activity at all between June 7 and August 1, 1945,
thereby creating a hiatus of one and one-half months right at the outset of the critical period when Bondi entered the ﬁeld. There is a further hiatus of one and one-half months, during the early part of the
critical period, from August 15 to September 28, 1945, when there was
no activity at all by Morway et al. It seems manifest from the above
chronology that the activities by Morway et al. from early June 1945
to December 1946 were quite sporadic throughout that period.
In our opinion, the foregoing activities by appellants do not constitute reasonable diligence in reducing the invention to practice during
the critical period.
Appellants have introduced testimony to the eﬀect that the joint
inventors herein and other assisting members of the research team
which developed the grease of the issue counts had many other
projects and duties. For example, there is testimony indicating that
Mr. Morway’s primary assignment at the time in question was the
development of a carbon black lubricant; and that Mr. Beerbower’s
primary assignment was the development of a continuous process for
manufacturing greases. When the party ﬁrst to conceive voluntarily
lays aside his inventive concept because he is engrossed in pursuit
of other projects, this is generally not an acceptable excuse for failure to act diligently in reducing to practice. Clearly there may be
circumstances creating exceptions to this rule, but we ﬁnd no such
circumstances in this record.
Morway et al. also seek to explain their lack of diligence by reference to wartime assignments which allegedly took ﬁrst call on their
time. In proper cases, war activities may reasonably excuse the ﬁrst

$)"15&3  1"5&/5

conceiver’s failure to act diligently, but lack of diligence is not excused by a mere assertion that the applicant was engaged in war work.
We fail to ﬁnd in the record before us adequate evidence of such war
activities as would excuse appellants’ lack of reasonable diligence.
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(a)

A person shall be entitled to a patent unless—
(1) the claimed invention was [prior art] before the eﬀective
ﬁling date of the claimed invention; or
(2) the claimed invention was described in a [published patent
or application that] names another inventor and was eﬀectively ﬁled before the eﬀective ﬁling date of the claimed
invention.
(b) Exceptions. –
(1) A disclosure made 1 year or less before the eﬀective ﬁling
date of a claimed invention shall not be prior art to the
claimed invention under subsection (a)(1) if—
(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject ma er disclosed directly or indirectly from the inventor or a joint
inventor; or
(B) the subject ma er disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint
inventor or another who obtained the subject ma er
disclosed directly or indirectly from the inventor or a
joint inventor.

Do you see why the passage of the AIA is described as taking the
United States from a ”ﬁrst to invent” system to a ”ﬁrst inventor to
ﬁle” system? And also, in view of Morway, why the AIA’s proponents described it as simplifying interference practice and giving inventors greater certainty about their rights? (Who would have won
in Morway under the AIA?)
The AIA’s proponents also described it as harmonizing the United
States with the rest of the world, where priority is assessed strictly on
a ﬁrst-to-ﬁle basis. The one-year grace period of new § 102(b)(1)(B),
however, is not typical of true ﬁrst-to-ﬁle systems.
2VFTUJPOT

$ 08/&34)*1

1. Suppose that from 1960 to 1972, the Acme Corporation sold
the Bait-o-Matic, a grey egg-shaped plastic container containing sharp-grained sand with a grain size of 1/25 of an inch designed to be used to immobilize earthworms. Which claims, if
any, of the Lukehart worm-immobilizing patent are invalid because they were anticipated by the Bait-o-Matic?
2. Ivan Inventor is working on a new ba ery design. Ivan has identiﬁed promising materials, but has not yet found a way to combine them safely in a sealed container. Ivan is afraid that others
are working on a similar invention. What factors do Ivan and
his patent a orney need to consider in deciding when to ﬁle?
1MFJTUPDFOF 1BSL 1SPCMFN
Two biotechnology ﬁrms, Crichton Industries and Spielberg Genetics,
have been a empting to clone a wooly mammoth (an elephant-like
mammal that became extinct about 3,500 years ago) from sca ered
preserved DNA fragments. The teams made only slow progress at
ﬁrst; the available mammoth DNA fragments were too short and too
numerous to combine into a complete DNA sequence using standard
laboratory techniques.
Then, on January 1, 2004, mathematician Rube Goldblum published an academic paper describing eﬃcient ways to arrange books
in libraries. Crichton’s lead researcher read the paper on February 2,
2005 and realized that the method Goldblum was describing could
be used to arrange DNA fragments and compile complete DNA sequences.
Goldblum published (on March 3, 2006), a follow-up academic paper explaining how to apply his book-sorting method to the problem
of DNA compilation. An executive at Spielberg read the paper on
April 4, 2007, and decided to try the technique on the wooly mammoth problem.
On May 5, 2013, in a Crichton laboratory, a modern elephant implanted with a wooly mammoth embryo using standard artiﬁcial insemination techniques gave birth to a live wooly mammoth. On June
6, 2013, a Spielberg elephant successfully gave birth to a wooly mammoth. Because both teams started from the same, publicly available
sets of wooly mammoth DNA fragments, their DNA sequences were
identical. The next day, June 7, 2013, Spielberg held a press conference to announce the birth; it showed video of the baby mammoth
and its scientists passed out CDs with the DNA sequence.
On July 12, 2013, Spielberg ﬁled a patent application claiming “a
wooly mammoth, having the DNA sequence …” Crichton ﬁled its
own patent application on August 20, 2013 with an identical claim.
Which application, if either, should the PTO allow, and why?

$)"15&3  1"5&/5

Would the answer be diﬀerent under the old § 102?

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A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth
in section 102, if the diﬀerences between the claimed invention and
the prior art are such that the claimed invention as a whole would
have been obvious before the eﬀective ﬁling date of the claimed invention to a person having ordinary skill in the art to which the claimed
invention pertains. Patentability shall not be negated by the manner
in which the invention was made.
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 64
The patent at issue, United States Patent No.    #, is entitled “Adjustable Pedal Assembly With Electronic Thro le Control.”
Supplemental App. 1. The patentee is Steven J. Engelgau, and the
patent is referred to as “the Engelgau patent.” Claim 4 of the Engelgau patent describes a mechanism for combining an electronic sensor
with an adjustable automobile pedal so the pedal’s position can be
transmi ed to a computer that controls the thro le in the vehicle’s
engine.
In Graham v. John Deere Co., the Court set out a framework for
applying the statutory language of § 103:
Under § 103, the scope and content of the prior art are to
be determined; diﬀerences between the prior art and the
claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background the obviousness or nonobviousness of the subject
ma er is determined. Such secondary considerations as
commercial success, long felt but unsolved needs, failure
of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject ma er
sought to be patented.
If a court, or patent examiner, conducts this analysis and concludes
the claimed subject ma er was obvious, the claim is invalid under §
103.
Seeking to resolve the question of obviousness with more uniformity and consistency, the Court of Appeals for the Federal Circuit
has employed an approach referred to by the parties as the “teaching, suggestion, or motivation” test (TSM test), under which a patent

$ 08/&34)*1

claim is only proved obvious if “some motivation or suggestion to
combine the prior art teachings” can be found in the prior art, the nature of the problem, or the knowledge of a person having ordinary
skill in the art. KSR challenges that test, or at least its application in
this case.
I
A
In car engines without computer-controlled thro les, the accelerator
pedal interacts with the thro le via cable or other mechanical link.
The pedal arm acts as a lever rotating around a pivot point. In a cableactuated thro le control the rotation caused by pushing down the
pedal pulls a cable, which in turn pulls open valves in the carburetor
or fuel injection unit. The wider the valves open, the more fuel and air
are released, causing combustion to increase and the car to accelerate.
When the driver takes his foot oﬀ the pedal, the opposite occurs as the
cable is released and the valves slide closed.
In the 1990’s it became more common to install computers in cars
to control engine operation. Computer-controlled thro les open and
close valves in response to electronic signals, not through force transferred from the pedal by a mechanical link. Constant, delicate adjustments of air and fuel mixture are possible. The computer’s rapid
processing of factors beyond the pedal’s position improves fuel eﬃciency and engine performance.
For a computer-controlled thro le to respond to a driver’s operation of the car, the computer must know what is happening with
the pedal. A cable or mechanical link does not suﬃce for this purpose; at some point, an electronic sensor is necessary to translate the
mechanical operation into digital data the computer can understand.
Before discussing sensors further we turn to the mechanical design of the pedal itself. In the traditional design a pedal can be pushed
down or released but cannot have its position in the footwell adjusted
by sliding the pedal forward or back. As a result, a driver who wishes
to be closer or farther from the pedal must either reposition himself
in the driver’s seat or move the seat in some way. In cars with deep
footwells these are imperfect solutions for drivers of smaller stature.
To solve the problem, inventors, beginning in the 1970’s, designed
pedals that could be adjusted to change their location in the footwell.
Important for this case are two adjustable pedals disclosed in U.S.
Patent Nos.    (ﬁled July 28, 1989) (Asano) and    (ﬁled
Sept. 17, 1993) (Redding). The Asano patent reveals a support structure that houses the pedal so that even when the pedal location is adjusted relative to the driver, one of the pedal’s pivot points stays ﬁxed.
The pedal is also designed so that the force necessary to push the

$)"15&3  1"5&/5

pedal down is the same regardless of adjustments to its location. The
Redding patent reveals a diﬀerent, sliding mechanism where both
the pedal and the pivot point are adjusted.
We return to sensors. Well before Engelgau applied for his challenged patent, some inventors had obtained patents involving electronic pedal sensors for computer-controlled thro les. These inventions, such as the device disclosed in U.S. Patent No.    (ﬁled
Sept. 9, 1991) (‘936), taught that it was preferable to detect the pedal’s
position in the pedal assembly, not in the engine. The ‘936 patent disclosed a pedal with an electronic sensor on a pivot point in the pedal
assembly. U.S. Patent No.    (ﬁled July 9, 1990) (Smith) taught
that to prevent the wires connecting the sensor to the computer from
chaﬁng and wearing out, and to avoid grime and damage from the
driver’s foot, the sensor should be put on a ﬁxed part of the pedal
assembly rather than in or on the pedal’s footpad.
In addition to patents for pedals with integrated sensors inventors
obtained patents for self-contained modular sensors. A modular sensor is designed independently of a given pedal so that it can be taken
oﬀ the shelf and a ached to mechanical pedals of various sorts, enabling the pedals to be used in automobiles with computer-controlled
thro les. One such sensor was disclosed in U.S. Patent No. ﬁled Dec.
18, 1992) (‘068). In 1994, Chevrolet manufactured a line of trucks using modular sensors a ached to the pedal support bracket, adjacent
to the pedal and engaged with the pivot shaft about which the pedal
rotates in operation.
The prior art contained patents involving the placement of sensors
on adjustable pedals as well. For example, U.S. Patent No.
(ﬁled Aug. 17, 1995) (Rixon) discloses an adjustable pedal assembly
with an electronic sensor for detecting the pedal’s position. In the
Rixon pedal the sensor is located in the pedal footpad. The Rixon
pedal was known to suﬀer from wire chaﬁng when the pedal was
depressed and released.
This short account of pedal and sensor technology leads to the
instant case.
B
Engelgau ﬁled the patent application on August 22, 2000 as a continuation of a previous application for U.S. Patent No.   ,
which was ﬁled on January 26, 1999. He has sworn he invented the
patent’s subject ma er on February 14, 1998. The Engelgau patent
discloses an adjustable electronic pedal described in the speciﬁcation
as a “simpliﬁed vehicle control pedal assembly that is less expensive,
and which uses fewer parts and is easier to package within the vehicle.” Claim 4 of the patent, at issue here, describes:

$ 08/&34)*1

A vehicle control pedal apparatus comprising:
a support adapted to be mounted to a vehicle structure;
an adjustable pedal assembly having a pedal arm moveable in for[e] and aft directions with respect to said support;
a pivot for pivotally supporting said adjustable pedal assembly with respect to said support and deﬁning a pivot
axis; and
an electronic control a ached to said support for controlling a vehicle system;
said apparatus characterized by said electronic control being responsive to said pivot for providing a signal that corresponds to pedal arm position as said pedal arm pivots
about said pivot axis between rest and applied positions
wherein the position of said pivot remains constant while
said pedal arm moves in fore and aft directions with respect to said pivot.
We agree with the District Court that the claim discloses “a positionadjustable pedal assembly with an electronic pedal position sensor
a ached to the support member of the pedal assembly. A aching
the sensor to the support member allows the sensor to remain in a
ﬁxed position while the driver adjusts the pedal.”
Before issuing the Engelgau patent the U.S. Patent and Trademark
Oﬃce (PTO) rejected one of the patent claims that was similar to, but
broader than, the present claim 4. The claim did not include the requirement that the sensor be placed on a ﬁxed pivot point. The PTO
concluded the claim was an obvious combination of the prior art disclosed in Redding and Smith, explaining:
Since the prior art references are from the ﬁeld of endeavor, the purpose disclosed would have been recognized in the pertinent art of Redding. Therefore it would
have been obvious to provide the device of Redding with
the means a ached to a support member as taught by
Smith.
In other words Redding provided an example of an adjustable pedal
and Smith explained how to mount a sensor on a pedal’s support
structure, and the rejected patent claim merely put these two teachings together.
Although the broader claim was rejected, claim 4 was later allowed because it included the limitation of a ﬁxed pivot point, which
distinguished the design from Redding’s. Engelgau had not included
Asano among the prior art references, and Asano was not mentioned

$)"15&3  1"5&/5

in the patent’s prosecution. Thus, the PTO did not have before it an
adjustable pedal with a ﬁxed pivot point. The patent issued on May
29, 2001 and was assigned to Teleﬂex.
C
The District Court determined, in light of the expert testimony and
the parties’ stipulations, that the level of ordinary skill in pedal design was “an undergraduate degree in mechanical engineering (or an
equivalent amount of industry experience) and familiarity with pedal
control systems for vehicles.” Following Graham’s direction, the court
compared the teachings of the prior art to the claims of Engelgau. It
found “li le diﬀerence.” Asano taught everything contained in claim
4 except the use of a sensor to detect the pedal’s position and transmit
it to the computer controlling the thro le. That additional aspect was
revealed in sources such as the ‘068 patent and the sensors used by
Chevrolet.
Under the controlling cases from the Court of Appeals for the Federal Circuit, however, the District Court was not permi ed to stop
there. The court was required also to apply the TSM test. The District Court held KSR had satisﬁed the test. It reasoned (1) the state
of the industry would lead inevitably to combinations of electronic
sensors and adjustable pedals, (2) Rixon provided the basis for these
developments, and (3) Smith taught a solution to the wire chaﬁng
problems in Rixon, namely locating the sensor on the ﬁxed structure
of the pedal. This could lead to the combination of Asano, or a pedal
like it, with a pedal position sensor.
The conclusion that the Engelgau design was obvious was supported, in the District Court’s view, by the PTO’s rejection of the
broader version of claim 4. Had Engelgau included Asano in his
patent application, it reasoned, the PTO would have found claim 4
to be an obvious combination of Asano and Smith, as it had found
the broader version an obvious combination of Redding and Smith.
As a ﬁnal ma er, the District Court held that the secondary factor
of Teleﬂex’s commercial success with pedals based on Engelgau’s design did not alter its conclusion.
With principal reliance on the TSM test, the Court of Appeals reversed. It ruled the District Court had not been strict enough in applying the test, having failed to make “ﬁndings as to the speciﬁc understanding or principle within the knowledge of a skilled artisan that
would have motivated one with no knowledge of the invention to attach an electronic control to the support bracket of the Asano assembly.” The Court of Appeals held that the District Court was incorrect
that the nature of the problem to be solved satisﬁed this requirement
because unless the “prior art references address[ed] the precise problem that the patentee was trying to solve,” the problem would not

$ 08/&34)*1

motivate an inventor to look at those references.
Here, the Court of Appeals found, the Asano pedal was designed
to solve the “constant ratio problem” – that is, to ensure that the
force required to depress the pedal is the same no ma er how the
pedal is adjusted—whereas Engelgau sought to provide a simpler,
smaller, cheaper adjustable electronic pedal. As for Rixon, the court
explained, that pedal suﬀered from the problem of wire chaﬁng but
was not designed to solve it. In the court’s view Rixon did not teach
anything helpful to Engelgau’s purpose. Smith, in turn, did not relate
to adjustable pedals and did not “necessarily go to the issue of motivation to a ach the electronic control on the support bracket of the
pedal assembly.” When the patents were interpreted in this way, the
Court of Appeals held, they would not have led a person of ordinary
skill to put a sensor on the sort of pedal described in Asano.
That it might have been obvious to try the combination of Asano
and a sensor was likewise irrelevant, in the court’s view, because ”’obvious to try’ has long been held not to constitute obviousness.”
II
A
We begin by rejecting the rigid approach of the Court of Appeals.
Throughout this Court’s engagement with the question of obviousness, our cases have set forth an expansive and ﬂexible approach inconsistent with the way the Court of Appeals applied its TSM test
here. To be sure, Graham recognized the need for “uniformity and
deﬁniteness.” Yet the principles laid down in Graham reaﬃrmed the
“functional approach” of Hotchkiss v. Greenwood.
Neither the enactment of § 103 nor the analysis in Graham disturbed this Court’s earlier instructions concerning the need for caution in granting a patent based on the combination of elements found
in the prior art. For over a half century, the Court has held that
a patent for a combination which only unites old elements with no
change in their respective functions obviously withdraws what is already known into the ﬁeld of its monopoly and diminishes the resources available to skillful men. This is a principal reason for declining to allow patents for what is obvious. The combination of familiar
elements according to known methods is likely to be obvious when
it does no more than yield predictable results. Three cases decided
after Graham illustrate the application of this doctrine.
In United States v. Adams, a companion case to Graham, the Court
considered the obviousness of a “wet ba ery” that varied from prior
designs in two ways: It contained water, rather than the acids conventionally employed in storage ba eries; and its electrodes were
magnesium and cuprous chloride, rather than zinc and silver chlo-

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ride. The Court recognized that when a patent claims a structure already known in the prior art that is altered by the mere substitution
of one element for another known in the ﬁeld, the combination must
do more than yield a predictable result. It nevertheless rejected the
Government’s claim that Adams’s ba ery was obvious. The Court relied upon the corollary principle that when the prior art teaches away
from combining certain known elements, discovery of a successful
means of combining them is more likely to be nonobvious. When
Adams designed his ba ery, the prior art warned that risks were involved in using the types of electrodes he employed. The fact that the
elements worked together in an unexpected and fruitful manner supported the conclusion that Adams’s design was not obvious to those
skilled in the art.
In Anderson’s-Black Rock, Inc. v. Pavement Salvage Co., the Court
elaborated on this approach. The subject ma er of the patent before the Court was a device combining two pre-existing elements: a
radiant-heat burner and a paving machine. The device, the Court concluded, did not create some new synergy: The radiant-heat burner
functioned just as a burner was expected to function; and the paving
machine did the same. The two in combination did no more than
they would in separate, sequential operation. In those circumstances,
“while the combination of old elements performed a useful function,
it added nothing to the nature and quality of the radiant-heat burner
already patented,” and the patent failed under § 103.
Finally, in Sakraida v. Ag Pro, Inc., the Court derived from the
precedents the conclusion that when a patent “simply arranges old
elements with each performing the same function it had been known
to perform” and yields no more than one would expect from such an
arrangement, the combination is obvious..
The principles underlying these cases are instructive when the
question is whether a patent claiming the combination of elements
of prior art is obvious. When a work is available in one ﬁeld of endeavor, design incentives and other market forces can prompt variations of it, either in the same ﬁeld or a diﬀerent one. If a person
of ordinary skill can implement a predictable variation, § 103 likely
bars its patentability. For the same reason, if a technique has been
used to improve one device, and a person of ordinary skill in the art
would recognize that it would improve similar devices in the same
way, using the technique is obvious unless its actual application is
beyond his or her skill. Sakraida and Anderson’s Black-Rock are illustrative – a court must ask whether the improvement is more than the
predictable use of prior art elements according to their established
functions.
Following these principles may be more diﬃcult in other cases
than it is here because the claimed subject ma er may involve more

$ 08/&34)*1

than the simple substitution of one known element for another or the
mere application of a known technique to a piece of prior art ready
for the improvement. Often, it will be necessary for a court to look
to interrelated teachings of multiple patents; the eﬀects of demands
known to the design community or present in the marketplace; and
the background knowledge possessed by a person having ordinary
skill in the art, all in order to determine whether there was an apparent reason to combine the known elements in the fashion claimed by
the patent at issue. To facilitate review, this analysis should be made
explicit. As our precedents make clear, however, the analysis need
not seek out precise teachings directed to the speciﬁc subject ma er
of the challenged claim, for a court can take account of the inferences
and creative steps that a person of ordinary skill in the art would employ.
B
When it ﬁrst established the requirement of demonstrating a teaching, suggestion, or motivation to combine known elements in order
to show that the combination is obvious, the Court of Customs and
Patent Appeals captured a helpful insight. As is clear from cases such
as Adams, a patent composed of several elements is not proved obvious merely by demonstrating that each of its elements was, independently, known in the prior art. Although common sense directs one
to look with care at a patent application that claims as innovation
the combination of two known devices according to their established
functions, it can be important to identify a reason that would have
prompted a person of ordinary skill in the relevant ﬁeld to combine
the elements in the way the claimed new invention does. This is so
because inventions in most, if not all, instances rely upon building
blocks long since uncovered, and claimed discoveries almost of necessity will be combinations of what, in some sense, is already known.
Helpful insights, however, need not become rigid and mandatory
formulas; and when it is so applied, the TSM test is incompatible with
our precedents. The obviousness analysis cannot be conﬁned by a
formalistic conception of the words teaching, suggestion, and motivation, or by overemphasis on the importance of published articles
and the explicit content of issued patents. The diversity of inventive
pursuits and of modern technology counsels against limiting the analysis in this way. In many ﬁelds it may be that there is li le discussion
of obvious techniques or combinations, and it often may be the case
that market demand, rather than scientiﬁc literature, will drive design trends. Granting patent protection to advances that would occur
in the ordinary course without real innovation retards progress and
may, in the case of patents combining previously known elements,
deprive prior inventions of their value or utility.

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One of the ways in which a patent’s subject ma er can be proved obvious is by noting that there existed at the time of invention a known
problem for which there was an obvious solution encompassed by
the patent’s claims.
The ﬁrst error of the Court of Appeals in this case was to foreclose
this reasoning by holding that courts and patent examiners should
look only to the problem the patentee was trying to solve. The Court
of Appeals failed to recognize that the problem motivating the patentee may be only one of many addressed by the patent’s subject matter. The question is not whether the combination was obvious to
the patentee but whether the combination was obvious to a person
with ordinary skill in the art. Under the correct analysis, any need
or problem known in the ﬁeld of endeavor at the time of invention
and addressed by the patent can provide a reason for combining the
elements in the manner claimed.
The second error of the Court of Appeals lay in its assumption
that a person of ordinary skill a empting to solve a problem will be
led only to those elements of prior art designed to solve the same
problem. The primary purpose of Asano was solving the constant
ratio problem; so, the court concluded, an inventor considering how
to put a sensor on an adjustable pedal would have no reason to consider pu ing it on the Asano pedal. Common sense teaches, however,
that familiar items may have obvious uses beyond their primary purposes, and in many cases a person of ordinary skill will be able to
ﬁt the teachings of multiple patents together like pieces of a puzzle.
Regardless of Asano’s primary purpose, the design provided an obvious example of an adjustable pedal with a ﬁxed pivot point; and the
prior art was replete with patents indicating that a ﬁxed pivot point
was an ideal mount for a sensor. The idea that a designer hoping
to make an adjustable electronic pedal would ignore Asano because
Asano was designed to solve the constant ratio problem makes li le
sense. A person of ordinary skill is also a person of ordinary creativity, not an automaton.
The same constricted analysis led the Court of Appeals to conclude, in error, that a patent claim cannot be proved obvious merely
by showing that the combination of elements was obvious to try.
When there is a design need or market pressure to solve a problem
and there are a ﬁnite number of identiﬁed, predictable solutions, a
person of ordinary skill has good reason to pursue the known options within his or her technical grasp. If this leads to the anticipated
success, it is likely the product not of innovation but of ordinary skill
and common sense. In that instance the fact that a combination was
obvious to try might show that it was obvious under § 103.

$ 08/&34)*1

III
When we apply the standards we have explained to the instant facts,
claim 4 must be found obvious.
B
The District Court was correct to conclude that, as of the time Engelgau designed the subject ma er in claim 4, it was obvious to a person
of ordinary skill to combine Asano with a pivot-mounted pedal position sensor. There then existed a marketplace that created a strong
incentive to convert mechanical pedals to electronic pedals, and the
prior art taught a number of methods for achieving this advance. The
Court of Appeals considered the issue too narrowly by, in eﬀect, asking whether a pedal designer writing on a blank slate would have
chosen both Asano and a modular sensor similar to the ones used in
the Chevrolet truckline and disclosed in the ‘068 patent. The proper
question to have asked was whether a pedal designer of ordinary skill,
facing the wide range of needs created by developments in the ﬁeld
of endeavor, would have seen a beneﬁt to upgrading Asano with a
sensor.
In automotive design, as in many other ﬁelds, the interaction of
multiple components means that changing one component often requires the others to be modiﬁed as well. Technological developments
made it clear that engines using computer-controlled thro les would
become standard. As a result, designers might have decided to design new pedals from scratch; but they also would have had reason
to make pre-existing pedals work with the new engines. Indeed, upgrading its own pre-existing model led KSR to design the pedal now
accused of infringing the Engelgau patent.
For a designer starting with Asano, the question was where to
a ach the sensor. The consequent legal question, then, is whether
a pedal designer of ordinary skill starting with Asano would have
found it obvious to put the sensor on a ﬁxed pivot point. The prior art
discussed above leads us to the conclusion that a aching the sensor
where both KSR and Engelgau put it would have been obvious to a
person of ordinary skill.
The ‘936 patent taught the utility of pu ing the sensor on the pedal
device, not in the engine. Smith, in turn, explained to put the sensor
not on the pedal’s footpad but instead on its support structure. And
from the known wire-chaﬁng problems of Rixon, and Smith’s teaching that “the pedal assemblies must not precipitate any motion in the
connecting wires,” the designer would know to place the sensor on
a nonmoving part of the pedal structure. The most obvious nonmoving point on the structure from which a sensor can easily detect the
pedal’s position is a pivot point. The designer, accordingly, would

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follow Smith in mounting the sensor on a pivot, thereby designing
an adjustable electronic pedal covered by claim 4.
Just as it was possible to begin with the objective to upgrade
Asano to work with a computer-controlled thro le, so too was it possible to take an adjustable electronic pedal like Rixon and seek an
improvement that would avoid the wire-chaﬁng problem. Following similar steps to those just explained, a designer would learn from
Smith to avoid sensor movement and would come, thereby, to Asano
because Asano disclosed an adjustable pedal with a ﬁxed pivot.
Like the District Court, ﬁnally, we conclude Teleﬂex has shown no
secondary factors to dislodge the determination that claim 4 is obvious. Proper application of Graham and our other precedents to these
facts therefore leads to the conclusion that claim 4 encompassed obvious subject ma er. As a result, the claim fails to meet the requirement
of § 103.
IV
We build and create by bringing to the tangible and palpable reality around us new works based on instinct, simple logic, ordinary
inferences, extraordinary ideas, and sometimes even genius. These
advances, once part of our shared knowledge, deﬁne a new threshold from which innovation starts once more. And as progress beginning from higher levels of achievement is expected in the normal
course, the results of ordinary innovation are not the subject of exclusive rights under the patent laws. Were it otherwise patents might
stiﬂe, rather than promote, the progress of useful arts.
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Li le more need be said in support of the examiner’s rejection of claim
3, aﬃrmed by the board, on the ground that its more speciﬁc subject
ma er would have been obvious at the time the invention was made
from the knowledge disclosed in the reference.
As admi ed by appellee’s aﬃdavit evidence from James A. Hall,
the Russian article discloses two alloys having compositions very
close to that of claim 3, which is 0.3% Mo and 0.8% Ni, balance titanium. The two alloys in the prior art have 0.25% Mo-0.75% Ni and
0.31% Mo-0.94% Ni, respectively. The proportions are so close that
prima facie one skilled in the art would have expected them to have
the same properties. Appellee produced no evidence to rebut that
prima facie case. The speciﬁc alloy of claim 3 must therefore be considered to have been obvious from known alloys.
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$ 08/&34)*1

Clay’s invention, assigned to Marathon Oil Company, is a process
for storing reﬁned liquid hydrocarbon product in a storage tank having a dead volume between the tank bo om and its outlet port. The
process involves preparing a gelation solution which gels after it is
placed in the tank’s dead volume; the gel can easily be removed by
adding to the tank a gel-degrading agent such as hydrogen peroxide.
Two prior art references were applied against the claims on appeal. They were U.S. Patent    (Hetherington), which discloses an apparatus for displacing dead space liquid using impervious bladders, or large bags, formed with ﬂexible membranes; and
U.S. Patent    (Sydansk), also assigned to Clay’s assignee,
Marathon Oil Company, which discloses a process for reducing the
permeability of hydrocarbon-bearing formations and thus improving
oil production, using a gel similar to that in Clay’s invention.
The Board agreed with the examiner that, although neither reference alone describes Clay’s invention, Hetherington and Sydansk
combined support a conclusion of obviousness. It held that one
skilled in the art would glean from Hetherington that Clay’s invention “was appreciated in the prior art and solutions to that problem
generally involved ﬁlling the dead space with something.”
The Board also held that Sydansk would have provided one
skilled in the art with information that a gelation system would have
been impervious to hydrocarbons once the system gelled. The Board
combined the references, ﬁnding that the “cavities” ﬁlled by Sydansk
are suﬃciently similar to the “volume or void space” being ﬁlled by
Hetherington for one of ordinary skill to have recognized the applicability of the gel to Hetherington.
DISCUSSION
The issue presented in this appeal is whether the Board’s conclusion
was correct that Clay’s invention would have been obvious from the
combined teachings of Hetherington and Sydansk.
A prerequisite to making this ﬁnding is determining what is
“prior art.” Although § 103 does not, by its terms, deﬁne the “art to
which [the] subject ma er [sought to be patented] pertains,” this determination is frequently couched in terms of whether the art is analogous or not, i.e., whether the art is too remote to be treated as prior
art. Clay argues that the claims at issue were improperly rejected over
Hetherington and Sydansk, because Sydansk is nonanalogous art.
Two criteria have evolved for determining whether prior art is
analogous: (1) whether the art is from the same ﬁeld of endeavor,
regardless of the problem addressed, and (2) if the reference is not
within the ﬁeld of the inventor’s endeavor, whether the reference still
is reasonably pertinent to the particular problem with which the inventor is involved.

$)"15&3  1"5&/5

The Board found Sydansk to be within the ﬁeld of Clay’s endeavor because, as the Examiner stated, “one of ordinary skill in the
art would certainly glean from Sydansk that the rigid gel as taught
therein would have a number of applications within the manipulation of the storage and processing of hydrocarbon liquids and that the
gel as taught in Sydansk would be expected to function in a similar
manner as the bladders in the Hetherington patent.” These ﬁndings
are clearly erroneous.
The PTO argues that Sydansk and Clay’s inventions are part of
a common endeavor – “maximizing withdrawal of petroleum stored
in petroleum reservoirs.” However, Sydansk cannot be considered
to be within Clay’s ﬁeld of endeavor merely because both relate to
the petroleum industry. Sydansk teaches the use of a gel in unconﬁned and irregular volumes within generally underground natural
oil-bearing formations to channel ﬂow in a desired direction; Clay
teaches the introduction of gel to the conﬁned dead volume of a manmade storage tank. The Sydansk process operates in extreme conditions, with petroleum formation temperatures as high as 115°C and
at signiﬁcant well bore pressures; Clay’s process apparently operates
at ambient temperature and atmospheric pressure. Clay’s ﬁeld of endeavor is the storage of reﬁned liquid hydrocarbons. The ﬁeld of endeavor of Sydansk’s invention, on the other hand, is the extraction of
crude petroleum. The Board clearly erred in considering Sydansk to
be within the same ﬁeld of endeavor as Clay’s.
Even though the art disclosed in Sydansk is not within Clay’s ﬁeld
of endeavor, the reference may still properly be combined with Hetherington if it is reasonably pertinent to the problem Clay a empts to
solve. A reference is reasonably pertinent if, even though it may be in
a diﬀerent ﬁeld from that of the inventor’s endeavor, it is one which,
because of the ma er with which it deals, logically would have commended itself to an inventor’s a ention in considering his problem.
Thus, the purposes of both the invention and the prior art are important in determining whether the reference is reasonably pertinent to
the problem the invention a empts to solve. If a reference disclosure
has the same purpose as the claimed invention, the reference relates
to the same problem, and that fact supports use of that reference in
an obviousness rejection. An inventor may well have been motivated
to consider the reference when making his invention. If it is directed
to a diﬀerent purpose, the inventor would accordingly have had less
motivation or occasion to consider it.
Sydansk’s gel treatment of underground formations functions to
ﬁll anomalies1 so as to improve ﬂow proﬁles and sweep eﬃciencies
1

Sydansk refers to an anomaly, one of two general region types in an oil-bearing
geological formation, as “a volume or void space [e.g., ‘streaks, fractures, fracture

$ 08/&34)*1

of injection and production ﬂuids through a formation, while Clay’s
gel functions to displace liquid product from the dead volume of a
storage tank. Sydansk is concerned with plugging formation anomalies so that ﬂuid is subsequently diverted by the gel into the formation
matrix, thereby forcing bypassed oil contained in the matrix toward a
production well. Sydansk is faced with the problem of recovering oil
from rock, i.e., from a matrix which is porous, permeable sedimentary
rock of a subterranean formation where water has channeled through
formation anomalies and bypassed oil present in the matrix. Such a
problem is not reasonably pertinent to the particular problem with
which Clay was involved – preventing loss of stored product to tank
dead volume while preventing contamination of such product.
A person having ordinary skill in the art would not reasonably
have expected to solve the problem of dead volume in tanks for storing reﬁned petroleum by considering a reference dealing with plugging underground formation anomalies. The Board’s ﬁnding to the
contrary is clearly erroneous. Since Sydansk is non-analogous art, the
rejection over Hetherington in view of Sydansk cannot be sustained.
,43 1SPCMFN
In relevant part, claim 4 of the patent in suit in KSR comprises:
• A pedal
• that is adjustable
• and has a ﬁxed pivot,
• and a sensor
• that is in the pedal
• and is and mounted on a ﬁxed position
The Court had before it a number of pieces of prior art, and had
to decide whether claim 4 was obvious in light of them. Please look
closely at the Court’s descriptions of the following prior art:
• Asano
• Redding
• ‘936
• Smith
• ‘068
• Certain 1994 Chevrolet trucks
• Rixon
Which of the characteristics of claim 4, as listed above, do each of
networks, vugs, solution channels, caverns, washouts, cavities, etc.’] in the formation having very high permeability relative to the matrix [the other region type,
consisting of homogeneous porous rock].”

$)"15&3  1"5&/5

these prior art references disclose? Make a chart. What improvements,
if any, does each prior art reference suggest to a person having ordinary skill in the art. Using your chart as a guide, explain whether the
Supreme Court’s analysis is persuasive.

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To claim the set of things protected by an intellectual property right,
one might be required to delineate to the public the set’s bounds so
that a third party could determine whether any particular embodiment is a set member thus protected by the right. This sort of claiming
is known as peripheral claiming.” Alternatively, one might publicly
describe only some members of the set, which are clearly protected
under the right, and use them to determine whether other items are
similar enough to the enumerated members to fall also within the
same right. This sort of claiming is known as central claiming, in that
the rightsholder describes the central, or prototypical, set members,
but the right tends to cover a broader, similar set of items.
There is another important dimension on which claiming can
vary, which until now has not been readily appreciated. Either peripheral or central claiming can be done by exemplar or by characteristic. Claiming by exemplar entails enumerating particular members of the set of protected embodiments. In the case of peripheral
claiming by exemplar, one would enumerate each set member, while
for central claiming by exemplar, one would catalog only some set
members. Claiming by characteristic, on the other hand, requires a
description of the essential properties of the set’s members. For peripheral claiming by characteristic, one would describe the necessary
and suﬃcient features common to all members of the set of protected
embodiments. And for central claiming by characteristic, one would
express the features common to at least some central members of the
set of protected embodiments. Claiming by exemplar and by characteristic can be seen as opposing points on a spectrum of how much
distillation of the actual works’ characteristics is necessary.

% */'3*/(&.&/5 4*.*-"3*5:

A statutory change in 1870 – requiring a patent applicant to ”particularly point out and distinctly claim the part, improvement, or
combination which he claims as his invention or discovery” – oﬃcially (though gradually) brought peripheral claiming, almost always
by characteristic, to American patent law. The Supreme Court held
that, pursuant to this statutory language, the articulated bounds of
the patent claim would govern the scope of the set of things protected by the patent right. Validity and infringement would thus be
measured by construing the claim’s bounds and then determining
whether particular embodiments fell within those bounds. Characteristic peripheral claiming- – in contrast to central claiming (by characteristic or exemplar) – thus did not require courts to decide which
of an invention’s properties were essential, as the patentee would delineate these qualities in the patent claims.
At least two vestiges of central claiming have remained in the
patent system, namely the doctrine of equivalents and means-plusfunction claims.
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A patent’s claims deﬁne what is covered by the patent. A [product]
[method] directly infringes a patent if it is covered by at least one
claim of the patent.

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Deciding whether a claim has been directly infringed is a two-step
process. The ﬁrst step is to decide the meaning of the patent claim.
I have already made this decision, [and I will instruct you later as
to the meaning of the asserted patent claims] [and I have already instructed you as to the meaning of the asserted patent claims]. The
second step is to decide whether [alleged direct infringer] has [made,]
[used,] [sold,] [oﬀered for sale] or [imported] within the United States
a [product] [method] covered by a claim of the [ ] patent. If it has, it
infringes. You, the jury, make this decision.
[With one exception,] you must consider each of the asserted
claims of the patent individually, and decide whether [alleged direct
infringer]’s [product] [method] infringes that claim. [The one exception to considering claims individually concerns dependent claims.
A dependent claim includes all of the requirements of a particular
independent claim, plus additional requirements of its own. As a result, if you ﬁnd that an independent claim is not infringed, you must
also ﬁnd that its dependent claims are not infringed. On the other
hand, if you ﬁnd that an independent claim has been infringed, you
must still separately decide whether the additional requirements of
its dependent claims have also been infringed.]
There are two ways in which a patent claim may be directly infringed. A claim may be “literally” infringed, or it may be infringed
under the “doctrine of equivalents.”
To decide whether [alleged infringer]’s [product] [method] literally infringes a claim of the [ ] patent, you must compare that [product] [method] with the patent claim and determine whether every
requirement of the claim is included in that [product] [method]. If so,
[alleged infringer]’s [product] [method] literally infringes that claim.
If, however, [alleged infringer]’s [product] [method] does not have
every requirement in the patent claim, [alleged infringer]’s [product]
[method] does not literally infringe that claim. You must decide literal infringement for each asserted claim separately.

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It is a ”bedrock principle” of patent law that the claims of a patent
deﬁne the invention to which the patentee is entitled the right to exclude. We have frequently stated that the words of a claim are generally given their ordinary and customary meaning. We have made
clear, moreover, that the ordinary and customary meaning of a claim
term is the meaning that the term would have to a person of ordinary
skill in the art in question at the time of the invention, i.e., as of the

% */'3*/(&.&/5 4*.*-"3*5:

eﬀective ﬁling date of the patent application.
The inquiry into how a person of ordinary skill in the art understands a claim term provides an objective baseline from which to
begin claim interpretation. That starting point is based on the wellse led understanding that inventors are typically persons skilled in
the ﬁeld of the invention and that patents are addressed to and intended to be read by others of skill in the pertinent art. S
Importantly, the person of ordinary skill in the art is deemed to
read the claim term not only in the context of the particular claim
in which the disputed term appears, but in the context of the entire
patent, including the speciﬁcation. This court explained that point
well in Multiform Desiccants, Inc. v. Medzam, Ltd.:
It is the person of ordinary skill in the ﬁeld of the invention through whose eyes the claims are construed. Such
person is deemed to read the words used in the patent
documents with an understanding of their meaning in the
ﬁeld, and to have knowledge of any special meaning and
usage in the ﬁeld. The inventor’s words that are used
to describe the invention – the inventor’s lexicography –
must be understood and interpreted by the court as they
would be understood and interpreted by a person in that
ﬁeld of technology. Thus the court starts the decisionmaking process by reviewing the same resources as would that
person, viz., the patent speciﬁcation and the prosecution
history.
B
In some cases, the ordinary meaning of claim language as understood
by a person of skill in the art may be readily apparent even to lay
judges, and claim construction in such cases involves li le more than
the application of the widely accepted meaning of commonly understood words. In such circumstances, general purpose dictionaries
may be helpful. In many cases that give rise to litigation, however, determining the ordinary and customary meaning of the claim requires
examination of terms that have a particular meaning in a ﬁeld of art.
Because the meaning of a claim term as understood by persons of
skill in the art is often not immediately apparent, and because patentees frequently use terms idiosyncratically, the court looks to those
sources available to the public that show what a person of skill in the
art would have understood disputed claim language to mean. Those
sources include the words of the claims themselves, the remainder of
the speciﬁcation, the prosecution history, and extrinsic evidence concerning relevant scientiﬁc principles, the meaning of technical terms,
and the state of the art.

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Quite apart from the wri en description and the prosecution history,
the claims themselves provide substantial guidance as to the meaning
of particular claim terms.
To begin with, the context in which a term is used in the asserted
claim can be highly instructive. To take a simple example, the claim
in this case refers to ”steel baﬄes,” which strongly implies that the
term ”baﬄes” does not inherently mean objects made of steel. This
court’s cases provide numerous similar examples in which the use
of a term within the claim provides a ﬁrm basis for construing the
term. [Cited cases construed the claim term ”ingredients” in light of
the use of the term ”mixture” in the same claim phrase and the claim
term ”discharge rate” in light of the use of the same term in another
limitation of the same claim.]
Other claims of the patent in question, both asserted and
unasserted, can also be valuable sources of enlightenment as to the
meaning of a claim term. Because claim terms are normally used consistently throughout the patent, the usage of a term in one claim can
often illuminate the meaning of the same term in other claims. Differences among claims can also be a useful guide in understanding
the meaning of particular claim terms. For example, 1315*1315 the
presence of a dependent claim that adds a particular limitation gives
rise to a presumption that the limitation in question is not present in
the independent claim.
2
The claims, of course, do not stand alone. Rather, they are part of a
fully integrated wri en instrument, consisting principally of a speciﬁcation that concludes with the claims. For that reason, claims must
be read in view of the speciﬁcation, of which they are a part. The speciﬁcation is always highly relevant to the claim construction analysis.
Usually, it is dispositive; it is the single best guide to the meaning of
a disputed term.
The importance of the speciﬁcation in claim construction derives
from its statutory role. The close kinship between the wri en description and the claims is enforced by the statutory requirement that the
speciﬁcation describe the claimed invention in ”full, clear, concise,
and exact terms.” In light of the statutory directive that the inventor provide a ”full” and ”exact” description of the claimed invention,
the speciﬁcation necessarily informs the proper construction of the
claims.
Consistent with that general principle, our cases recognize that
the speciﬁcation may reveal a special deﬁnition given to a claim term
by the patentee that diﬀers from the meaning it would otherwise pos-

% */'3*/(&.&/5 4*.*-"3*5:

sess. In such cases, the inventor’s lexicography governs. In other
cases, the speciﬁcation may reveal an intentional disclaimer, or disavowal, of claim scope by the inventor. In that instance as well, the
inventor has dictated the correct claim scope, and the inventor’s intention, as expressed in the speciﬁcation, is regarded as dispositive.
3
In addition to consulting the speciﬁcation, we have held that a court
should also consider the patent’s prosecution history, if it is in evidence. The prosecution history, which we have designated as part of
the ”intrinsic evidence,” consists of the complete record of the proceedings before the PTO and includes the prior art cited during the
examination of the patent. Like the speciﬁcation, the prosecution history provides evidence of how the PTO and the inventor understood
the patent. Furthermore, like the speciﬁcation, the prosecution history was created by the patentee in a empting to explain and obtain the patent. Yet because the prosecution history represents an
ongoing negotiation between the PTO and the applicant, rather than
the ﬁnal product of that negotiation, it often lacks the clarity of the
speciﬁcation and thus is less useful for claim construction purposes.
Nonetheless, the prosecution history can often inform the meaning
of the claim language by demonstrating how the inventor understood the invention and whether the inventor limited the invention
in the course of prosecution, making the claim scope narrower than
it would otherwise be.
C
Although we have emphasized the importance of intrinsic evidence
in claim construction, we have also authorized district courts to rely
on extrinsic evidence, which consists of all evidence external to the
patent and prosecution history, including expert and inventor testimony, dictionaries, and learned treatises. However, while extrinsic
evidence can shed useful light on the relevant art, it is less signiﬁcant
than the intrinsic record in determining the legally operative meaning
of claim language.
Within the class of extrinsic evidence, dictionaries and treatises
can be useful in claim construction. We have especially noted the
help that technical dictionaries may provide to a court to be er understand the underlying technology and the way in which one of skill
in the art might use the claim terms. Because dictionaries, and especially technical dictionaries, endeavor to collect the accepted meanings of terms used in various ﬁelds of science and technology, those
resources have been properly recognized as among the many tools
that can assist the court in determining the meaning of particular terminology to those of skill in the art of the invention. Such evidence,

$)"15&3  1"5&/5

may be considered if the court deems it helpful in determining the
true meaning of language used in the patent claims.
Extrinsic evidence in the form of expert testimony can be useful to
a court for a variety of purposes, such as to provide background on
the technology at issue, to explain how an invention works, to ensure
that the court’s understanding of the technical aspects of the patent is
consistent with that of a person of skill in the art, or to establish that
a particular term in the patent or the prior art has a particular meaning in the pertinent ﬁeld. However, conclusory, unsupported assertions by experts as to the deﬁnition of a claim term are not useful to a
court. Similarly, a court should discount any expert testimony that is
clearly at odds with the claim construction mandated by the claims
themselves, the wri en description, and the prosecution history, in
other words, with the wri en record of the patent.
We have viewed extrinsic evidence in general as less reliable than
the patent and its prosecution history in determining how to read
claim terms, for several reasons. First, extrinsic evidence by deﬁnition is not part of the patent and does not have the speciﬁcation’s
virtue of being created at the time of patent prosecution for the purpose of explaining the patent’s scope and meaning. Second, while
claims are construed as they would be understood by a hypothetical
person of skill in the art, extrinsic publications may not be wri en by
or for skilled artisans and therefore may not reﬂect the understanding
of a skilled artisan in the ﬁeld of the patent. Third, extrinsic evidence
consisting of expert reports and testimony is generated at the time of
and for the purpose of litigation and thus can suﬀer from bias that is
not present in intrinsic evidence. The eﬀect of that bias can be exacerbated if the expert is not one of skill in the relevant art or if the expert’s
opinion is oﬀered in a form that is not subject to cross-examination.
Fourth, there is a virtually unbounded universe of potential extrinsic
evidence of some marginal relevance that could be brought to bear on
any claim construction question. In the course of litigation, each party
will naturally choose the pieces of extrinsic evidence most favorable
to its cause, leaving the court with the considerable task of ﬁltering
the useful extrinsic evidence from the ﬂuﬀ. Finally, undue reliance
on extrinsic evidence poses the risk that it will be used to change the
meaning of claims in derogation of the indisputable public records
consisting of the claims, the speciﬁcation and the prosecution history,
thereby undermining the public notice function of patents.
In sum, extrinsic evidence may be useful to the court, but it is
unlikely to result in a reliable interpretation of patent claim scope unless considered in the context of the intrinsic evidence. Nonetheless,
because extrinsic evidence can help educate the court regarding the
ﬁeld of the invention and can help the court determine what a person
of ordinary skill in the art would understand claim terms to mean, it

% */'3*/(&.&/5 4*.*-"3*5:

is permissible for the district court in its sound discretion to admit
and use such evidence. In exercising that discretion, and in weighing
all the evidence bearing on claim construction, the court should keep
in mind the ﬂaws inherent in each type of evidence and assess that
evidence accordingly.
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Craig Thorner and Virtual Reality Feedback Corporation (Appellants,
collectively) accused Sony Computer Entertainment America LLC
and a number of other Sony entities (Sony, collectively) of infringing
claims of U.S. patent no.    (‘941 patent) relating to a tactile
feedback system for computer video games. The district court construed disputed claim terms and the parties stipulated to a judgment
of noninfringement. Because the district court improperly limited the
term “a ached to said pad” to mean a achment only to an external
surface and erred in its construction of the term “ﬂexible”, we vacate
and remand.
BACKGROUND
The ‘941 patent describes a tactile feedback system for use with video
games. Figure 2 shows the many diﬀerent embodiments of the invention:
Tactile feedback controller 110 is part of a larger gaming system
that operates one or more of the devices shown above. Each device
includes some type of actuator that provides tactile feedback to a user
in response to certain game activities. For instance, the actuators in
hand-held game controller 598 may vibrate during a crash in a car racing game. Independent claim 1 requires “a ﬂexible pad,” “a plurality
of actuators a ached to said pad” and a control circuit that activates
the actuators in response to game activity. The accused products are
hand-held game controllers.
Two claim limitations are relevant to this appeal, “ﬂexible pad”
and “a ached to said pad.” The district court held that ﬂexible does
not mean simply “capable of being ﬂexed.” It reasoned that this definition was inappropriate because “many objects that are capable of
being ﬂexed are not ﬂexible. A steel I-beam is capable of being ﬂexed,
but no one would call it ‘ﬂexible.’” The court thus construed the term
to mean “capable of being noticeably ﬂexed with ease.”
The district court then turned to the construction of “a ached to
said pad.” Appellants argued that a ached should be given its plain
and ordinary meaning and that an actuator can be a ached to the inside of an object. Sony argued that “a ached to said pad” should be
construed as aﬃxed to the exterior surface of the pad and does not
include embedded within said pad. The court held that “the speciﬁ-

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U.S. Patent

Jul. 23, 2002

@

Sheet 2 0f 37

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US 6,422,941 B1

LO

U.S. Patent No. 6,422,941, Universal tactile feedback system for computer video games and simulations

% */'3*/(&.&/5 4*.*-"3*5:

cation redeﬁnes ‘a ached’ by implication.” The court held that the
word a ached was limited to a ached to the outside of an object because the embodiments in the speciﬁcation consistently use the term
“a ached” to indicate aﬃxing an actuator to the outer surface of an
object and use the word “embedded” when referring to an actuator
inside an object. For additional support for the notion that a ached
and embedded have diﬀerent meanings, the court pointed to claim 1
which uses the word “a ached” and dependent claim 10 which uses
the word “embedded.”
Following claim construction, the parties stipulated to noninfringement by the accused products. They stated that “under the
Court’s construction of the phrase ‘a ached to said pad,’ Defendants
have not infringed....” The stipulation further stated that the “parties
reserve their rights to challenge this or any other construction of the
disputed claim phrases of the ‘941 patent on appeal.”
DISCUSSION
The words of a claim are generally given their ordinary and customary meaning as understood by a person of ordinary skill in the art
when read in the context of the speciﬁcation and prosecution history.
See AWH. There are only two exceptions to this general rule: 1) when
a patentee sets out a deﬁnition and acts as his own lexicographer, or
2) when the patentee disavows the full scope of a claim term either
in the speciﬁcation or during prosecution. The use of the term “attached” in this speciﬁcation does not meet either of these exceptions.
To act as its own lexicographer, a patentee must clearly set forth a
deﬁnition of the disputed claim term other than its plain and ordinary
meaning. . It is not enough for a patentee to simply disclose a single
embodiment or use a word in the same manner in all embodiments,
the patentee must clearly express an intent to redeﬁne the term. For
example, in 3M Innovative Properties Co. v. Avery Dennison Corp., we
held that the patentee acted as its own lexicographer when the speciﬁcation stated: “‘Multiple embossed’ means two or more embossing
pa erns are superimposed on the web to create a complex pa ern of
diﬀering depths of embossing.”). Similarly, we limited a patentee to
particular examples of solubilizers when it stated in the speciﬁcation
that “[t]he solubilizers suitable according to the invention are deﬁned
below.” Astrazeneca AB v. Mutual Pharm. Co..
The standard for disavowal of claim scope is similarly exacting.
Where the speciﬁcation makes clear that the invention does not include a particular feature, that feature is deemed to be outside the
reach of the claims of the patent, even though the language of the
claims, read without reference to the speciﬁcation, might be considered broad enough to encompass the feature in question. The patentee may demonstrate intent to deviate from the ordinary and accus-

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tomed meaning of a claim term by including in the speciﬁcation expressions of manifest exclusion or restriction, representing a clear disavowal of claim scope. For example, in SciMed Life Sys., Inc. v. Advanced Cardiovascular Sys., Inc., the patentee described two diﬀerent
types of catheters in the prior art, those with dual lumens (side-byside) and those with coaxial lumens. In discussing the prior art, the
patentee disparaged the dual lumen conﬁguration as larger than necessary and less pliable than the coaxial type. Further, the speciﬁcation
repeatedly described the “present invention” as a coaxial design. Finally, the speciﬁcation stated: “The intermediate sleeve structure deﬁned above [coaxial design] is the basic sleeve structure for all embodiments of the present invention contemplated and disclosed herein.”
This court held that collectively this amounted to disavowal of the
dual lumen design.
Mere criticism of a particular embodiment encompassed in the
plain meaning of a claim term is not suﬃcient to rise to the level of
clear disavowal. Even where a particular structure makes it particularly diﬃcult to obtain certain beneﬁts of the claimed invention, this
does not rise to the level of disavowal of the structure. It is likewise
not enough that the only embodiments, or all of the embodiments,
contain a particular limitation. We do not read limitations from the
speciﬁcation into claims; we do not redeﬁne words. Only the patentee can do that. To constitute disclaimer, there must be a clear and
unmistakable disclaimer.
It is the claims that deﬁne the metes and bounds of the patentee’s
invention. The patentee is free to choose a broad term and expect
to obtain the full scope of its plain and ordinary meaning unless the
patentee explicitly redeﬁnes the term or disavows its full scope.
Claim 1 of the patent at issue includes the disputed claim terms:
In a computer or video game system, apparatus for providing, in response to signals generated by said computer or video
game system, a tactile sensation to a user of said computer or
video game system, said apparatus comprising:
a ﬂexible pad;
a plurality of actuators, a ached to said pad, for selectively
generating tactile sensation; and a control circuit ... for generating a control signal to control activation of said plurality of actuators....
I. “a ached to said pad”
Appellants argue that the district court erred by holding that the speciﬁcation implicitly deﬁned “a ached” to mean “aﬃxed to an exterior
surface.” They argue that the term does not require any construction
and that the plain and ordinary meaning includes aﬃxing an item to

% */'3*/(&.&/5 4*.*-"3*5:

either an exterior or an interior surface. They contend that the speciﬁcation explicitly states whether an a achment is to an interior or
exterior surface: “a vibratory actuator can be a ached to [the] outer
side of the thro le handle.” They argue this shows that when the applicant wished to distinguish an internal from an external a achment,
he did so with deliberate, express language. Thus, appellants argue
that the speciﬁcation contemplates “a ached” to have its plain and
ordinary meaning—a ached to either an interior or exterior surface.
Finally, appellants argue that the fact that claim 10 includes the word
“embedded” does not mean that “a ached” can only mean connected
to an exterior surface. Rather, appellants argue that “embedded” is
merely a narrower term that includes only a achment to an interior
surface.
Sony responds that the patent clearly identiﬁed two diﬀerent connections, “a ached to” and “embedded within.” It argues that in every instance where the speciﬁcation uses the term “a ached,” it refers
to an a achment to an outer surface. Conversely, in every embodiment where the actuator is placed inside a housing, the speciﬁcation
uses the term “embedded.” See, e.g., ‘941 patent col.32 l.66 (“embedded within or a ached to”).
Our case law is clear, claim terms must be given their plain and
ordinary meaning to one of skill in the art. The plain meaning of
the term “a ached” encompasses either an external or internal a achment. We must decide whether the patentee has redeﬁned this term
to mean only a achment to an external surface. As Sony argues, the
speciﬁcation repeatedly uses the term “a ached” in reference to embodiments where the actuators are “a ached to [an] outer side.” In
fact, the speciﬁcation never uses the word “a ached” when referring
to an actuator located on the interior of a controller. We hold that this
does not rise to the level of either lexicography or disavowal. Both exceptions require a clear and explicit statement by the patentee. It is
not enough that the patentee used the term when referencing an attachment to an outer surface in each embodiment. In fact, the speciﬁcation explains that an actuator was “a ached to [an] outer surface.”
If the applicant had redeﬁned the term “a ached” to mean only “attached to an outer surface,” then it would have been unnecessary to
specify that the a achment was “to [an] outer surface” in the speciﬁcation. We conclude that the term a ached should be given its plain
and ordinary meaning. The speciﬁcation does not redeﬁne a ached
nor is there any disavowal.
The fact that the speciﬁcation uses the two terms “a ached” and
“embedded” as alternatives does not require a diﬀerent result. There
is nothing inconsistent about the applicant’s use of the narrower term,
“embedded,” to describe embodiments aﬃxed to an internal surface.
The plain and ordinary meaning of embedded, “a ached within,” is

$)"15&3  1"5&/5

narrower than “a ached.” Hence it makes sense that the applicant
would want to use embedded when it meant to explicitly claim attached to the inside only. That does not mean the word a ached automatically means a ached to the external surface, as opposed to the
broader plain meaning—a ached to either the interior or exterior.
Other parts of the claim and speciﬁcation also support this construction. The claim at issue requires a “ﬂexible pad.” The only embodiment in the speciﬁcation that includes ﬂexible material is the seat
cushion 510 shown in Figure 2. The speciﬁcation states that “the tactile feedback seating unit 510 is a semi-rigid ﬂexible foam structure
... with a plurality of actuators embedded within the foam structure.”
Thus, the only ﬂexible embodiment in the speciﬁcation has embedded actuators. If we agreed with Sony that “a ached” must mean
a ached to an outer surface, then the claim would exclude the only
ﬂexible embodiment disclosed in the speciﬁcation. This is further evidence that the term “a ached” should have its plain and ordinary
meaning which includes either internal or external a achments.
We hold that the term “a ached to said pad” should be given its
plain and ordinary meaning which encompasses either internal or external a achment. Because the parties based the stipulation of noninfringement on the district court’s erroneous construction of this claim
term, we vacate and remand.
II. “ﬂexible pad” …
Appellants argue that the term “ﬂexible” simply means “capable of
being ﬂexed” and that the district court erred by requiring “capable of
being noticeably ﬂexed with ease.” They note that the speciﬁcation
only uses the term “ﬂexible pad” when referring to a “semi-rigid”
structure and that a “semi-rigid” structure would certainly not be
“noticeably ﬂexed with ease.”
Sony responds that although the speciﬁcation uses the term to refer to a “semi-rigid” structure, that structure is made out of foam in
every embodiment. It argues that foam is capable of being noticeably
ﬂexed with ease and thus a rigid, barely bendable material should not
be considered “ﬂexible.” Sony also points to portions of the Markman hearing where the district court judge inspected one of the accused hard plastic controllers. The judge noted that the controller
was rigid and “[i]f I try to ﬂex this thing, I think that you’re going to
see it snap.”
We agree with the appellants that the district court improperly
limited the term. Neither the claims nor the speciﬁcation requires
the “ﬂexible pad” to be noticeably ﬂexed with ease. The speciﬁcation says only that the ﬂexible pad must be a semi-rigid structure.
The task of determining the degree of ﬂexibility, the degree of rigidity that amounts to “semi-rigid,” is part of the infringement analysis,

% */'3*/(&.&/5 4*.*-"3*5:

not part of the claim construction. The district court is of course free
on summary judgment to decide that there is no genuine issue of material fact that the accused products in this case do not meet the plain
and ordinary meaning of the term “ﬂexible.” We do not mean to suggest that summary judgment is improper in this case, only that claim
construction is the wrong venue for this determination.

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The complaint alleges that defendant’s method for making stuﬀedcrust pizzas, in use between March of 1994 and at least July of 1996, infringed plaintiﬀ’s method for making pizza claimed in United States
Patent No.    dated April 28, 1987 (the ‘361 patent).
In essence, plaintiﬀ’s method is to create multiple, individually
sealed pockets made of dough that are ﬁlled with cheese (or other
ingredients) and enclosed within the outer rim of a pizza crust or
placed on a portion of the pizza crust. Tomato sauce and cheese covers the rest of the pie. The claims describe two basic methods: one
uses dough pulled over from the edge of the crust to cover the ﬁllings and form the pockets; the other places a separate piece of dough,
not from the edge, over the ﬁllings to form a pocket.
[Claim 1 reads] as follows:
1. A method of making a pizza comprising the steps of:
(a) forming a generally ﬂat dough base;
(b) placing a plurality of separated individual food portions
on the dough base such that, when the dough base is cut
into substantially equally sized portions, each individual
food portion is located upon a portion of each pie;
(c) covering each food portion with an unbaked dough section
of suﬃcient dimensions to cover said food portion thereby
forming a separate closed pocket about each food portion;
(d) covering the portions of the dough base which are not covered by said closed pockets with a layer of tomato sauce
and cheese to form an unbaked pizza product; and
(e) baking the unbaked product to obtain a pizza.
In early 1988 Anthony Mongiello sent defendant a copy of the ‘361
patent, oﬀering a license under it. Defendant responded by le er
dated May 17, 1988 that it was “not a new concept for Pizza Hut”
and rejected the oﬀer.
In March of 1995 defendant launched a cheese “Stuﬀed Crust
Pizza.” The manager’s guide dated February 1995 describes defen-

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dant’s method as follows:
• Place thumbs on edge of dough.
• Press dough ridge up the sides of pan.
– Dough must extend just above rim of pan (¼”)
• Evenly space ﬁve pieces of thawed mozzarella string cheese approximately a thumb’s width apart along the outside edge of
the dough
– Place close to bo om of pan where edge meets.
• Use thumb and index ﬁngers to stretch and fold edge of the
dough over string cheese and press ﬁrmly to seal.
– Dough overlap should be visible on both sides of thumb.
– Keep stuﬀed edge at score line etched in pan to keep dough
in round shape.
• Use thumbs to press and seal overlapped dough to bo om edge.
• Use thumbs to push stuﬀed edge out to edge of pan....
• All Stuﬀed Crust Pizzas are cut into 8 slices. If cheese is leaking
through small hole in crust, begin cu ing pizza at that spot.
An objective of the method was to create “cheese pull,” which means
that the cheese within the crust joins together during baking so that
the consumer receives “cheese in every bite.”
Defendant launched a pepperoni and cheese Stuﬀed Crust Pizza
in September of 1995, which contained a continuous layer of pepperoni slices beneath the ﬁve pieces of cheese within the outer edge of
the pizza. Plaintiﬀ concedes that the pepperoni and cheese version
does not infringe the ‘361 patent.
Shortly after learning of the 1995 launch of defendant’s Stuﬀed
Crust Pizza, Anthony Mongiello and his brother Lawrence cut open
Stuﬀed Crust Pizzas purchased from defendant’s restaurants. They
say that when they cut into the crusts, they observed “pockets” of
mozzarella cheese and spots where “a dough wall separated adjacent
mozzarella strings.”
Based on their observations of randomly occurring dough walls
dividing cheese within the crust of defendant’s baked product, the
Mongiellos believed that the method defendant used to make Stuﬀed
Crust Pizzas infringed on their claimed method.
Defendant argues that its method of making Stuﬀed Crust Pizza
does not infringe the ‘361 patent, either literally or through substantial equivalence, because it does not perform what it says are three
required elements of the claimed method [including]:
(1) The “cu ing step” of claim 1: “when the dough base is cut into
substantially equally sized pieces, each individual food portion
is located upon a portion of each piece.”

% */'3*/(&.&/5 4*.*-"3*5:

(2)

The “forming step” of claim 1: “forming a separate closed
pocket about each food portion.”
Defendant says that the phrase “such that, when the dough base is cut
into substantially equally sized portions, each individual food portion is located upon a portion of each piece” is an essential limitation
of the claim requiring that the pizza be cut in a speciﬁc manner. Plaintiﬀ contends that the phrase should be construed as an optional step
that merely explains where the food portions should be placed, and
says that the phrase really means: “if the dough base were cut into
equal slices, a food portion would be on each slice.” Plaintiﬀ argues
that cu ing the pizza such that there is an individual ﬁlled pocket on
each piece is not required, but that “it is enough that it is possible to
do so.”
But the plain language of the claim says “when,” not “if.” If the
patent applicants had wanted the language to be hypothetical, they
would have drafted it in that manner.
In order to ﬁnd literal infringement, the defendant must practice
each and every element of the claimed method. Defendant’s method,
as described in the February 1995 manager’s guide and the aﬃdavit
of Patricia Scheibmeir, a manager in defendant’s research and development department, does not practice the “cu ing” limitation as construed by the court. Although the Stuﬀed Crust Pizzas in question
used ﬁve separate pieces of cheese, separated by a thumb’s width,
the instructions direct that the pizza be cut into eight slices using a
“rocker blade,” which cuts pizzas into an even number of slices. It
is thus impossible for individual portions of cheese to be located on
each portion of defendant’s pizza.
Since defendant does not practice one of the essential limitations
of the ‘361 patent, the court need not consider the other limitations
before making a ﬁnding of no literal infringement.
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[Abbo ’s patent No.   , as construed, claimed cefdinir anhydrate (or ”Crystal A”). Sandoz and Teva’s products contained primarily cefdinir monohydrate (or ”Crystal B”). The District Court had
held:
The evidence does not convince us that there in fact are
trace amounts of cefdinir anhydrate contained within the
cefdinir monohydrate in defendants’ products. Moreover,
there is no evidence that, even if there were traces, that
those trace amounts could be a contributing factor in the
eﬃcacy of the defendants’ products. If there is a small
amount of cefdinir anhydrate in defendants’ products, we

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do not conclude that this could cause literal infringement
of the ’507 patent.]

As to the alleged presence of small amounts of Crystal A in Sandoz and Teva’s products, Abbo ’s evidence did not persuade the
Northern District of Illinois. This court perceives that decision as
well within the trial court’s discretion. As additional support, the
Northern District observed that there was no evidence that any trace
amounts of cefdinir anhydrate, i.e. Crystal A, in Sandoz and Teva’s
products ”could be a contributing factor in the eﬃcacy” and that even
”if there is a small amount of cefdinir anhydrate in defendants’ products, we do not conclude that this could cause literal infringement.”
While these may be misstatements of the law, because de minimis infringement can still be infringement, this court need not reach that
issue in a preliminary injunction context which aﬀords the trial court
broad leeway to discern a ”likelihood of success.” As noted, this court
sustains the trial court’s discretion based primarily on its administration of the proper claim construction and its ﬁnding that Abbo was
not likely to show Sandoz and Teva’s products contained any Crystal
A at all.

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Freedman Seating Company (“Freedman”) sued American Seating
Company and Hi-Tech Seating Products (doing business as Kustom
Fit) (collectively, “American Seating”) for infringement of U.S. Patent
No.    (issued Feb. 20, 1996) (“the ‘389 patent”). Because
we conclude that the judgment of infringement under the doctrine
of equivalents has the eﬀect of vitiating a limitation of the claims of
the ‘389 patent, we reverse the judgment and remand the case to the
district court with instructions to enter judgment of non-infringement
in favor of American Seating.
BACKGROUND
Freedman manufactures seats used in public transportation vehicles.
Its product line includes stowable seats, which are seats that have
the ability to fold away in order to create more interior space in a
vehicle. They are particularly useful for accommodating passengers
with wheelchairs, but may be used whenever more interior space is
needed.
Freedman also owns the ‘389 patent, titled “Stowable Seat.” The
ﬁgures shown below are representative of the stowable seat claimed
in the ‘389 patent.

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US. Patent

Feb. 20, 1996

Sheet 1 0f 3

5,492,389

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U.S. Patent No. 5,492,389, Stowable seat

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Figure 1 shows the stowable seat (10) in the horizontal (or deployed) position, while ﬁgure 2 shows the stowable seat in the vertical (or stowed) position. Moving the seat from its horizontal to vertical position involves “folding the seatback (16) ﬂat against the seatbase (14), unlocking the seatbase from its horizontally deployed position and raising the seatbase to its vertically stowed position where
it is locked in place.”
As shown by ﬁgure 1, the invention of the ‘389 patent does not
use an aisle leg to support the seat when in the horizontal position.
Rather, the invention is based on a cantilever design, which uses a diagonal truss (18), also referred to as a support member, to support the
aisle-end of the seat when in the horizontal position. This design, according to the ‘389 patent, avoids diﬃculties a endant with stowing
and deploying seats that have a separate aisle leg.
In addition to providing aisle support, the diagonal truss allows
for translational movement of the seatbase between the horizontal
and vertical positions. This is due to the truss having a ﬁxed end that
is a ached to the seat’s frame (12) at a pivot point (54), and a movable end (56) that is “slidably mounted” in a runner track (58). When
stowing the seat, the movable end of the diagonal truss slides on the
runner track toward the middle of the seatbase, while the ﬁxed end of
the diagonal truss rotates upward until the seat is in the vertical position. Similarly, when the seat is deployed again, the movable end of
the diagonal truss slides toward the aisle end of the seatbase, while
the ﬁxed end rotates downward until the seat is in the horizontal position. This folding mechanism created by the slidably mounted moveable end is known in the ﬁeld of mechanical engineering as a “slider
crank,” which is a particular type of “four bar mechanism.”
Claim 1 is representative of the claims asserted against American
Seating; it reads:
A stowable seat for mounting to support member of a vehicle
wherein a space may be selectively provided for positioning an
article adjacent to the stowable seat, when stowed the seat comprising:
a frame a ached to a support member;
a cantilevered seatbase having a free end, a pivotable end
including a pivot mounted thereto for rotatably associating said pivotable end with said frame and for providing
said seatbase with a range of motion extending from a
horizontally deployed position to a vertically stowed position, a support member for supporting said seatbase in
said deployed position including a moveable end slidably
mounted to said seatbase and a ﬁxed end journalled with
said frame, and a ﬁrst lock near said free end for releasably

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locking said movable end to maintain said seatbase in said
deployed position; and
a seatback having a pivot for rotatably associating said
seatback with said seatbase and for providing said seatback with a range of motion extending from an unfolded
position to a folded position, said range of motion of
said seatback being perpendicular to said range of motion
of said seatbase, said seatback in said unfolded position
adapted to be a predetermined angle with respect to said
seatbase in said deployed position to provide seating and
said seatback in said folded position adapted to be adjacent said seatbase for stowing to provide the space for the
article.
American Seating Company and Kustom Fit also manufacture and
market seating products for the transportation industry. One particular seat is the Horizon EZ Fold (“EZ Fold”), which is a stowable seat.
The EZ Fold is in many respects similar, if not identical, to the invention claimed in the ‘389 patent. Most notably, neither device has an
aisle leg. However, and important to this case, the two products use
diﬀerent types of support structures in lieu of the aisle leg. The invention claimed in the ‘389 patent, of course, uses the slider crank,
which is described in part by the “slidably mounted” limitation. The
EZ Fold, on the other hand, uses what is known as a “fourth link.”
Like the slider crank, the fourth link is also a speciﬁc type of four
bar mechanism. However, the two mechanisms diﬀer in that, where
the moveable end of the ‘389 patent’s support member is slidably
mounted to the seatbase, the moveable end of the EZ Fold’s support
member is rotatably mounted to the seatbase. Therefore, the moveable end of the EZ Fold’s support member does not slide or otherwise
move along the seatbase. Rather, its only range of motion consists of
rotation throughout its revolute joints. That said, the EZ Fold’s fourth
link mechanism still provides the seatbase with ﬂuid translational
motion, and thereby allows the seat to fold between the deployed
and stowed positions. It does this through an extra set of revolute
joints located in the midsection of its support member (“mid-joints”).
These mid-joints are shown below in two representative illustrations
of the EZ Fold product.
The illustration on the left shows the seat in the fully deployed position, and the illustration on the right shows the device in transition
between the deployed and stowed positions.

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In due course, both parties ﬁled motions for summary judgment
on the issue of infringement. The parties generally agreed that the
EZ Fold literally meets all of the limitations of claim 1 except for the
limitation requiring that the movable end of the support member be
“slidably mounted” to the seatbase. The accused product does not
literally meet this limitation because the EZ Fold’s support member
is rotatably mounted, not slidably mounted, to the seatbase.
American Seating argued that its support member and moveable
end were not equivalent to the corresponding structure claimed by
the ‘389 patent because its system used a fourth link, which created a substantially diﬀerent support structure than the slider crank
of the ‘389 patent. In particular, American Seating argued that the
support structures of the two devices created substantially diﬀerent
distribution forces. The district court disagreed. As an initial matter, the court stated that force distributions were not claimed in the
‘389 patent and were therefore of minimal relevance. In addition,
the court found that any diﬀerence in force distributions was insubstantial, and that Freedman’s “slider-crank and [American Seating’s]
fourth link perform substantially the same function in substantially
the same manner to achieve substantially the same result.” The court
therefore granted Freedman summary judgment of infringement by
equivalence.

8BSOFS+FOLJOTPO  64

DISCUSSION
Patent infringement is a two step inquiry. First, the court must construe the asserted claim. Second, the court must determine whether
the accused product or process contains each limitation of the properly construed claims, either literally or by a substantial equivalent.
Under the doctrine of equivalents, a product or process that does
not literally infringe upon the express terms of a patent claim may
nonetheless be found to infringe if there is ‘equivalence’ between the
elements of the accused product or process and the claimed elements
of the patented invention.” Warner-Jenkinson Co. v. Hilton Davis Chem.
Co.. The doctrine evolved in recognition of the fact that
The language in the patent claims may not capture every

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nuance of the invention or describe with complete precision the range of its novelty. If patents were always interpreted by their literal terms, their value would be greatly
diminished. Unimportant and insubstantial substitutes
for certain elements could defeat the patent, and its value
to inventors could be destroyed by simple acts of copying.
Festo. At the same time, the doctrine of equivalents necessarily adds
uncertainty to the scope of patent claims, and thereby detracts from
the public-notice function of patent claims and risks deterring noninfringing and potentially innovative endeavors. See Festo (“If the
range of equivalents is unclear, competitors may be unable to determine what is a permi ed alternative to a patented invention and
what is an infringing equivalent.”); Warner-Jenkinson (“There can be
no denying that the doctrine of equivalents, when applied broadly,
conﬂicts with the deﬁnitional and public-notice functions of the statutory claiming requirements.”). In recognition of this risk, and in an
eﬀort to strike the proper balance between protecting patentees while
also providing suﬃcient notice to the public, various rules of law
have emerged to constrain when and how the doctrine of equivalents
is to be applied.
Of relevance to this case is the “all limitations” rule. The rule
holds that an accused product or process is not infringing unless it
contains each limitation of the claim, either literally or by an equivalent. This principle has two primary implications for the doctrine of
equivalents. First, the all limitations rule requires that equivalence
be assessed on a limitation-by-limitation basis, as opposed to from
the perspective of the invention as a whole. Second, an element of an
accused product or process is not, as a ma er of law, equivalent to
a limitation of the claimed invention if such a ﬁnding would entirely
vitiate the limitation.
There is no set formula for determining whether a ﬁnding of
equivalence would vitiate a claim limitation, and thereby violate the
all limitations rule. Rather, courts must consider the totality of the
circumstances of each case and determine whether the alleged equivalent can be fairly characterized as an insubstantial change from the
claimed subject ma er without rendering the pertinent limitation
meaningless.
In Sage Products, Inc. v. Devon Industries, Inc. we aﬃrmed the
district court’s grant of summary judgment of non-infringement under the doctrine of equivalents. One of the asserted patents described a container for discarding syringes and other like materials
and claimed, among other things, “an elongated slot at the top of the
container body” and a barrier means comprised of “a ﬁrst constriction extending over said slot.” We agreed that the district court prop-

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erly interpreted “top of the container body” to mean “highest point,
level, or part of.” The accused product diﬀered from the claimed invention in that the slot was located in the interior of the container
rather than at the top of the container.
We concluded that ﬁnding infringement under these circumstances would vitiate the “slot at the top of the container body” and
“extending over said slot” limitations. We reached our conclusion
based on several considerations, including the simplicity of the structure, the speciﬁcity and narrowness of the claim, and the foreseeability of variations at the time of ﬁling the claim with the PTO:
The claim at issue deﬁnes a relatively simple structural
device. A skilled patent drafter would foresee the limiting potential of the “over said slot” limitation. No subtlety of language or complexity of the technology, nor any
subsequent change in the state of the art, such as laterdeveloped technology, obfuscated the signiﬁcance of this
limitation at the time of its incorporation into the claim. If
[the patentee] desired broad patent protection for any container that performed a function similar to its claimed container, it could have sought claims with fewer structural
encumbrances. . . . Instead, [the patentee] left the PTO
with manifestly limited claims that it now seeks to expand
through the doctrine of 1361*1361 equivalents. However,
as between the patentee who had a clear opportunity to
negotiate broader claims but did not do so, and the public at large, it is the patentee who must bear the cost of its
failure to seek protection for this foreseeable alteration of
its claimed structure.

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Compare Hughes Aircraft Co. v. United States, 140 F.3d 1470, 1475
(Fed. Cir. 1998) (“This is a case in which a ‘subsequent change in the
state of the art, such as later-developed technology, obfuscated the
signiﬁcance of [the] limitation at the time of its incorporation into the
claim.’”).
In Tronzo v. Biomet, Inc., we similarly concluded that a ﬁnding of
equivalence would vitiate the claimed limitation. The asserted claims
related to an artiﬁcial hip socket and included a limitation requiring
that the prosthesis’s body have “a generally conical outer surface.”
In ﬁnding infringement, the jury concluded that the hemispherical
shape of the accused product’s hemispherical cup was equivalent to
the “generally conical outer surface” limitation. We reversed, ﬁnding no infringement as a ma er of law. We were particularly troubled by expert testimony submi ed by the plaintiﬀ, Tronzo, stating
that “when either a hemispherical cup or trapezoidal cup or any other
shape cup is successfully implanted into the body, it functions almost

% */'3*/(&.&/5 4*.*-"3*5:

exactly the same way.” We stated that, according to this theory of
infringement, “any shape would be equivalent to the conical limitation.” “Such a result,” we concluded, “is impermissible under the allelements rule of Warner-Jenkinson because it would write the ‘generally conical outer surface’ limitation out of the claims.” See also Asyst
Techs., Inc. v. Emtrak, Inc. (holding that, under the “speciﬁc exclusion” principle, “the term ‘mounted’ can fairly be said to speciﬁcally
exclude objects that are ‘unmounted’”); Moore U.S.A. v Standard Register Co. (“[T]o allow what is undisputedly a minority (i.e., 47.8%) to be
equivalent to a majority would vitiate the requirement that the ‘ﬁrst
and second longitudinal strips of adhesive … extend the majority of
the lengths of said longitudinal marginal portions.’”).
In the instant case, we think the district court’s ﬁnding of infringement under the doctrine of equivalents had the eﬀect of entirely vitiating the “slidably mounted” limitation. The parties agree that all
of the claims require a support member having “a moveable end slidably mounted to” the seatbase. It is also not disputed that the moveable end of the EZ Fold’s support member is rotatably mounted, not
slidably mounted, to the seatbase. Therefore, while the moveable end
of the EZ Fold’s support member has the ability to rotate, it cannot
slide or otherwise move along the seatbase. It is conﬁned to a ﬁxed
location. We think that this structural diﬀerence in the mounting of
the moveable end to the seatbase is not a subtle diﬀerence in degree,
but rather, a clear, substantial diﬀerence or diﬀerence in kind.
Freedman argues that the slider crank claimed in the ‘389 patent
and the fourth link mechanism used in the EZ Fold function in the
same way to produce identical results. Freedman asserts that this
is because “both the infringing seat and the claimed structure of the
‘389 patent provide the moveable end of the support member with
both translational and rotational motion relative to the seatbase.” The
problem, however, is that taken to its logical conclusion, Freedman’s
argument would mean that any support member capable of allowing
translational and rotational motion would be equivalent to a support
member “slidably mounted to said seatbase,” which reads “slidably
mounted” completely out of the claims. This is the precise type of
overextension of the doctrine of equivalents that the claim vitiation
doctrine is intended to prevent.
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 64
Petitioner Festo Corporation owns two patents [   (Stoll) and
   (Carroll)] for an improved magnetic rodless cylinder, a
piston-driven device that relies on magnets to move objects in a conveying system. The device has many industrial uses and has been employed in machinery as diverse as sewing equipment and the Thun-

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der Mountain ride at Disney World. Petitioner’s patent applications,
as often occurs, were amended during the prosecution proceedings.
Both amended patents added a new limitation—that the inventions
contain a pair of sealing rings, each having a lip on one side, which
would prevent impurities from ge ing on the piston assembly. The
amended Stoll Patent added the further limitation that the outer shell
of the device, the sleeve, be made of a magnetizable material.
Prosecution history estoppel requires that the claims of a patent
be interpreted in light of the proceedings in the PTO during the application process. Estoppel is a rule of patent construction that ensures that claims are interpreted by reference to those that have been
cancelled or rejected. The doctrine of equivalents allows the patentee to claim those insubstantial alterations that were not captured in
drafting the original patent claim but which could be created through
trivial changes. When, however, the patentee originally claimed the
subject ma er alleged to infringe but then narrowed the claim in response to a rejection, he may not argue that the surrendered territory
comprised unforeseen subject ma er that should be deemed equivalent to the literal claims of the issued patent. On the contrary, by the
amendment the patentee recognized and emphasized the diﬀerence
between the two phrases and the diﬀerence which the patentee thus
disclaimed must be regarded as material.
A rejection indicates that the patent examiner does not believe the
original claim could be patented. While the patentee has the right
to appeal, his decision to forgo an appeal and submit an amended
claim is taken as a concession that the invention as patented does
not reach as far as the original claim. Were it otherwise, the inventor
might avoid the PTO’s gatekeeping role and seek to recapture in an
infringement action the very subject ma er surrendered as a condition of receiving the patent.
Prosecution history estoppel ensures that the doctrine of equivalents remains tied to its underlying purpose. Where the original
application once embraced the purported equivalent but the patentee narrowed his claims to obtain the patent or to protect its validity,
the patentee cannot assert that he lacked the words to describe the
subject ma er in question. The doctrine of equivalents is premised
on language’s inability to capture the essence of innovation, but a
prior application describing the precise element at issue undercuts
that premise. In that instance the prosecution history has established
that the inventor turned his a ention to the subject ma er in question, knew the words for both the broader and narrower claim, and
aﬃrmatively chose the la er.
We agree with the Court of Appeals that a narrowing amendment
made to satisfy any requirement of the Patent Act may give rise to an
estoppel. Estoppel arises when an amendment is made to secure the

% */'3*/(&.&/5 4*.*-"3*5:

patent and the amendment narrows the patent’s scope. A patentee
who narrows a claim as a condition for obtaining a patent disavows
his claim to the broader subject ma er, whether the amendment was
made to avoid the prior art or to comply with § 112. We must regard
the patentee as having conceded an inability to claim the broader subject ma er or at least as having abandoned his right to appeal a rejection. In either case estoppel may apply.
On the record before us, we cannot say petitioner has rebu ed the
presumptions that estoppel applies and that the equivalents at issue
have been surrendered. Petitioner concedes that the limitations at issue – the sealing rings and the composition of the sleeve – were made
in response to a rejection for reasons under § 112, if not also because of
the prior art references. As the amendments were made for a reason
relating to patentability, the question is not whether estoppel applies
but what territory the amendments surrendered.
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Johnson and Johnston Associates (Johnston) asserted United States
Patent No.    (the ’050 patent) against R.E. Service Co. and
Mark Frater (collectively RES). [The patent concerned a method for
making printed circuit boards by adhering them to a stiﬀ substrate
sheet during processing.]
When a patent drafter discloses but declines to claim subject matter, as in this case, this action dedicates that unclaimed subject ma er
to the public. Application of the doctrine of equivalents to recapture
subject ma er deliberately left unclaimed would conﬂict with the primacy of the claims in deﬁning the scope of the patentee’s exclusive
right.
Moreover, a patentee cannot narrowly claim an invention to avoid
prosecution scrutiny by the PTO, and then, after patent issuance, use
the doctrine of equivalents to establish infringement because the speciﬁcation discloses equivalents. Such a result would merely encourage
a patent applicant to present a broad disclosure in the speciﬁcation
of the application and ﬁle narrow claims, avoiding examination of
broader claims that the applicant could have ﬁled consistent with the
speciﬁcation. By enforcing this rule, the courts avoid the problem of
extending the coverage of an exclusive right to encompass more than
that properly examined by the PTO.
In this case, Johnston’s ’050 patent speciﬁcally limited the claims
to ”a sheet of aluminum” and ”the aluminum sheet.” The speciﬁcation of the ’050 patent, however, reads: ”While aluminum is currently
the preferred material for the substrate, other metals, such as stainless
steel or nickel alloys may be used.” Having disclosed without claiming the steel substrates, Johnston cannot now invoke the doctrine

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of equivalents to extend its aluminum limitation to encompass steel.
Thus, Johnston cannot assert the doctrine of equivalents to cover the
disclosed but unclaimed steel substrate.
A patentee who inadvertently fails to claim disclosed subject matter, however, is not left without remedy. Within two years from the
grant of the original patent, a patentee may ﬁle a reissue application
and a empt to enlarge the scope of the original claims to include the
disclosed but previously unclaimed subject ma er.. In addition, a
patentee can ﬁle a separate application claiming the disclosed subject
ma er.. Notably, Johnston took advantage of the la er of the two options by ﬁling two continuation applications that literally claim the
relevant subject ma er

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In order for an accused structure to literally meet a section 112, paragraph 6 means-plus-function limitation, the accused structure must
either be the same as the disclosed structure or be a section 112, paragraph 6 ”equivalent,” i.e., (1) perform the identical function and (2) be
otherwise insubstantially diﬀerent with respect to structure. Under a
modiﬁed version of the function-way-result methodology, two structures may be ”equivalent” for purposes of section 112, paragraph 6
if they perform the identical function, in substantially the same way,
with substantially the same result.
If an accused structure is not a section 112, paragraph 6 equivalent of the disclosed structure because it does not perform the identical function of that disclosed structure and hence does not literally
infringe, it may nevertheless still be an ”equivalent” under the doctrine of equivalents. Thus, if one applies the traditional functionway-result test, the accused structure must perform substantially the
same function, in substantially the same way, to achieve substantially
the same result, as the disclosed structure. A key feature that distinguishes ”equivalents” under section 112, paragraph 6 and ”equivalents” under the doctrine of equivalents is that section 112, paragraph
6 equivalents must perform the identical function of the disclosed
structure, while equivalents under the doctrine of equivalents need
only perform a substantially similar function.
Because the ”way” and ”result” prongs are the same under both
the section 112, paragraph 6 and doctrine of equivalents tests, a structure failing the section 112, paragraph 6 test under either or both
prongs must fail the doctrine of equivalents test for the same reason(s).

% */'3*/(&.&/5 4*.*-"3*5:

In the present case, we agree with the district court that no reasonable jury could have found that the TripLok infringes, either literally
or under the doctrine of equivalents. Turning ﬁrst to literal infringement, it is clear that the foldover ﬂap structure disclosed in the ’197
patent speciﬁcation is not identical to the dual-lip structure in the accused device, so we must then ask whether the dual-lip structure is
an ”equivalent” structure under section 112, paragraph 6. In determining this under a modiﬁed function-way-result test, we note that
both the accused and disclosed structures perform the identical function, which is to close the envelope. However, unlike the disclosed
ﬂap, which closes by folding over the envelope, the dual-lip structure
closes the accused envelope in a diﬀerent way by meeting together
and binding via the internal adhesive. The accused structure’s diﬀerent way of closing also yields a substantially diﬀerent result. The ﬁrst
and second sealing means in the disclosed structure are ultimately
a ached to the outside of the envelope. In contrast, the ﬁrst sealing
means in the TripLok envelope is internally a ached to the two lips
of the dual-lip structure, thereby sealing the envelope.
Based on this analysis, it is also clear that Control Papers does not
infringe under the doctrine of equivalents. When a court determines

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that the ”way” and/or ”result” is/are substantially diﬀerent under a
section 112, paragraph 6 equivalents analysis, a patentee cannot prevail under the doctrine of equivalents for the same reason(s). In this
case, the dual-lip structure is not a section 112, paragraph 6 equivalent of a fold-over ﬂap because the ”way” and ”result” are substantially diﬀerent; accordingly, the dual-lip structure also cannot be an
equivalent under the doctrine of equivalents.
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This is claim 1 from U.S. Patent No.   :
A toy comprising an elongated housing [case] having a
chamber therein for a liquid [tank], a pump including a
piston having an exposed rod [piston rod] and extending
rearwardly of said toy facilitating manual operation for
building up an appreciable amount of pressure in said
chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toy, and
means for controlling the ejection.
Does the Super Soaker 50 infringe this claim? Note that to use a Super Soaker, one ﬁlls it with water through the orange cap at the back
top. Sliding the yellow handle back and forth along the white barrel
pumps air into the green part, along with water. Pulling the trigger
opens a valve that causes the air to press water forward, resulting in
the Super Soaker’s famed superior soaking ability. (Conventional water pistols didn’t store up compressed air; they drove water out the
barrel using the force of the trigger pull itself.)

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A patent is not the grant of a right to make or use or sell. It does not,
directly or indirectly, imply any such right. It grants only the right to
exclude others. The supposition that a right to make is created by the
patent grant is obviously inconsistent with the well-known fact that a
very considerable portion of the patents granted are in a ﬁeld covered
by a former relatively generic or basic patent, are tributary to such
earlier patent, and cannot be practiced unless by license thereunder.

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It is typically said that patent infringement is ”strict liability.” That
is, ”It is, of course, elementary, that an infringement may be entirely

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inadvertent and unintentional and without knowledge of the patent.”
Saurabh Vishnubhakat argues that this is misleading in at least one
respect; based on a reading of the (limited) case law, he claims that
one who does not even intend to take the actions described by the
claims is not an infringer, just as someone who is blown into another
by a gust of wind does not commit the tort of ba ery.
As a corollary, there is no requirement that the defendant copy
from the plaintiﬀ, as there is in trade secret and copyright. ”Similarly,
evidence of copying is of no import on the question of whether the
claims of an issued patent are infringed, either literally or by equivalents.”

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(a)

Except as otherwise provided in this title, whoever without authority makes, uses, oﬀers to sell, or sells any patented invention, within the United States or imports into the United States
any patented invention during the term of the patent therefor,
infringes the patent.

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Carpenter Bee Solutions, of which Mr. Blazer is the sole proprietor,
is the owner of United States Patent No.    entitled “Carpenter Bee Traps.” Mr. Blazer originally contacted eBay about products
listed on the site he believed infringed his patent.
eBay is an online marketplace. On an average day, just south of
a billion items are listed for sale on the website. eBay does not take
physical possession of the items listed for sale; the third-party sellers
conduct sales and shipping the item to buyers. A seller listing an
item on eBay provides the item’s price and description. eBay does
not supply this information. When a user creates a listing on eBay’s
site, the listing identiﬁes the user as the seller of the item. eBay buyers
commonly interact with sellers rather than eBay itself. eBay informs
users that other users, and not the company, are the seller of listed
items. eBay’s User Agreement emphasizes that when a sale occurs
via the site, “the actual contract for sale is directly between the seller
and buyer. eBay is not a traditional auctioneer.”
For a “sale” within the meaning of § 271(a) to occur, a transfer
of property or title must occur. In his response, Mr. Blazer concedes
that eBay does not “sell” the allegedly infringing bee traps. Therefore,
eBay cannot be liable under § 271(a) for selling a patented invention.
An “oﬀer to sell” under § 271(a) is given the same meaning as in
contract law. An entity “oﬀers to sell” a patented invention when it

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communicates a manifestation of willingness to enter into a bargain,
so made as to justify another person in understanding that his assent
to the bargain is invited and will conclude the transaction.
Here, eBay’s website contained descriptions of the allegedly infringing products and a price at which the items could be obtained.
As Mr. Blazer observes, eBay tells users that bidding on a product
creates a contract that obligates the bidder to purchase the product.
Undoubtedly, an oﬀer existed. The question is who made the oﬀer.
eBay? The user who created the listing? Both? In this case, the context of an exchange on eBay demonstrates that no reasonable consumer could conclude that by bidding on an eBay listing, he was accepting an oﬀer from eBay itself.

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The language of § 271(a) clearly speciﬁes only the making, using or
selling of a patented invention as infringing activities. All of the other
Ventritex activities that Telectronics complains of – presenting clinical
trial data at a cardiology conference, reporting clinical trial progress
to investors, analysts and journalists, and describing clinical trial results in a private fund-raising memorandum – fall under the category
of dissemination of the data developed for FDA approval. This disclosure of clinical trial data cannot, in and of itself, constitute an infringing activity.
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In 2006, Akamai Technologies, Inc. (”Akamai”) ﬁled a patent infringement action against Limelight alleging infringement of U.S.
Patent No.    which claims methods for delivering content
over the Internet. The case proceeded to trial, at which the parties
agreed that Limelight’s customers – not Limelight – perform the ”tagging” and ”serving” steps in the claimed methods. For example, as
for claim 34 of the ’703 patent, Limelight performs every step save
the ”tagging” step, in which Limelight’s customers tag the content to
be hosted and delivered by Limelight’s content delivery network.
Direct infringement under § 271(a) occurs where all steps of a
claimed method are performed by or a ributable to a single entity.
Where more than one actor is involved in practicing the steps, a court
must determine whether the acts of one are a ributable to the other
such that a single entity is responsible for the infringement. We will
hold an entity responsible for others’ performance of method steps
in two sets of circumstances: (1) where that entity directs or controls
others’ performance, and (2) where the actors form a joint enterprise.
The jury heard substantial evidence from which it could ﬁnd

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that Limelight directs or controls its customers’ performance of each
remaining method step, such that all steps of the method are attributable to Limelight. Speciﬁcally, Akamai presented substantial
evidence demonstrating that Limelight conditions its customers’ use
of its content delivery network upon its customers’ performance of
the tagging and serving steps, and that Limelight establishes the manner or timing of its customers’ performance. Therefore, Limelight is
liable for direct infringement.

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(b)

Whoever actively induces infringement of a patent shall be liable as an infringer.
(c) Whoever oﬀers to sell or sells within the United States or imports into the United States a component of a patented machine,
manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a
material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of
such patent, and not a staple article or commodity of commerce
suitable for substantial noninfringing use, shall be liable as a
contributory infringer.

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Neither the Federal Circuit nor respondents dispute the proposition
that liability for inducement must be predicated on direct infringement. This is for good reason, as our case law leaves no doubt that
inducement liability may arise if, but only if, there is direct infringement.
One might think that this simple truth is enough to dispose of
this appeal. But the Federal Circuit reasoned that a defendant can
be liable for inducing infringement under § 271(b) even if no one has
commi ed direct infringement within the terms of § 271(a) (or any
other provision of the patent laws), because direct infringement can
exist independently of a violation of these statutory provisions.
The Federal Circuit’s analysis fundamentally misunderstands
what it means to infringe a method patent. A method patent claims
a number of steps; under this Court’s case law, the patent is not infringed unless all the steps are carried out. This principle follows
ineluctably from what a patent is: the conferral of rights in a particular claimed set of elements. Each element contained in a patent claim

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is deemed material to deﬁning the scope of the patented invention,
and a patentee’s rights extend only to the claimed combination of elements, and no further.
The Federal Circuit seems to have adopted the view that Limelight
induced infringement on the theory that the steps that Limelight and
its customers perform would infringe the ‘703 patent if all the steps
were performed by the same person. But we have already rejected
the notion that conduct which would be infringing in altered circumstances can form the basis for contributory infringement, and we see
no reason to apply a diﬀerent rule for inducement. In Deepsouth Packing Co. v. Laitram Corp., a manufacturer produced components of a
patented machine and then exported those components overseas to
be assembled by its foreign customers. (The assembly by the foreign
customers did not violate U.S. patent laws.) In both Deepsouth and
this case, the conduct that the defendant induced or contributed to
would have been infringing if commi ed in altered circumstances: in
Deepsouth if the machines had been assembled in the United States,
and in this case if performance of all of the claimed steps had been
a ributable to the same person. In Deepsouth, we rejected the possibility of contributory infringement because the machines had not
been assembled in the United States, and direct infringement had consequently never occurred. Similarly, in this case, performance of all
the claimed steps cannot be a ributed to a single person, so direct
infringement never occurred. Limelight cannot be liable for inducing
infringement that never came to pass.
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[SEB held a U.S. patent on a deep fryer whose exterior surface remained cool to the touch. Pentalpha cloned an SEB fryer it purchased
in Hong Kong (which did not bear U.S. patent markings). It sold
infringing fryers to Sunbeam, Fingerhut, and Montgomery Ward,
which resold them in the United States. Pentalpha argued that it did
not “induce” these sales under § 271(b) because it did not know about
the patent.]
[W]e now hold that induced infringement under § 271(b) requires
knowledge that the induced acts constitute patent infringement. We
nevertheless aﬃrm the judgment of the Court of Appeals because the
evidence was plainly suﬃcient to support a ﬁnding of Pentalpha’s
knowledge under the doctrine of willful blindeness, [under which]
(1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate
actions to avoid learning of that fact. Pentalpha’s belief that SEB’s
fryer embodied advanced technology that would be valuable in the
U.S. market is evidenced by its decision to copy all but the cosmetic

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features of SEB’s fryer. Even more telling is [a Pentalpha executive’s]
decision not to inform the a orney from whom Pentalpha sought a
right-to-use opinion that the product to be evaluated was simply a
knock-oﬀ of SEB’s deep fryer.
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The question the Court confronts today concerns whether a defendant’s belief regarding patent validity is a defense to a claim of induced infringement. It is not.
Invalidity is an aﬃrmative defense that can preclude enforcement
of a patent against otherwise infringing conduct. An accused infringer can, of course, a empt to prove that the patent in suit is invalid; if the patent is indeed invalid, and shown to be so under proper
procedures, there is no liability. That is because invalidity is not a defense to infringement, it is a defense to liability. And because of that
fact, a belief as to invalidity cannot negate the scienter required for
induced infringement.
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In December 1986, three computer engineers at [Lucent’s predecessor] AT&T ﬁled a patent application, which eventually issued as the
Day patent. The patent is generally directed to a method of entering information into ﬁelds on a computer screen without using a keyboard. A user ﬁlls in the displayed ﬁelds by choosing concurrently
displayed, predeﬁned tools adapted to facilitate the inpu ing of the
information in a particular ﬁeld, wherein the predeﬁned tools include
an on-screen graphical keyboard, a menu, and a calculator.
Lucent asserts that certain features of Outlook, Money, and Windows Mobile, when used, practice the methods of claims 19 and 21.
For instance, Outlook includes a calendar tool that allows the user
to enter dates in a form when preparing a record of an appointment.
The tool displays a monthly calendar as a grid of numbered dates,
along with graphical controls that allow the user to scroll to adjacent months or skip directly to a diﬀerent month and year. Once the
user deﬁnes a date with the tool, the software enters the numerical
day, month, and year into the corresponding ﬁeld in the appointment
form. Similar to the number pad tool illustrated in the Day patent,
Outlook’s calendar date-picker tool enables the user to select a series
of numbers, corresponding to the day, month, and year, using graphical controls. This date-picker calendar tool is incorporated in a few
of Outlook’s features. Microsoft Money and Windows Mobile have
similar functionalities.

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According to Microsoft, Lucent did not prove contributory infringement [under § 271(c)] because the products have substantial
noninfringing uses. Lucent counters that the date-picker tool does
not have any noninfringing uses. Thus, as framed by the parties, the
main issue reduces to whether the “material or apparatus” is the entire software package or just the particular tool (e.g., the calendar
date-picker) that performs the claimed method. If the former, then
Microsoft prevails because the entire software package has substantial noninfringing uses. If the material or apparatus is the speciﬁc
date-picker tool, then Lucent wins because that tool was “especially
made or especially adapted for” practicing the claimed method.
One example illustrates the problem with Microsoft’s approach.
Consider a software program comprising ﬁve – and only ﬁve – features. Each of the ﬁve features is separately and distinctly patented
using a method claim. That is, the ﬁrst feature infringes a method
claim in a ﬁrst patent, the second feature infringes a method claim
in a second patent, and so forth. Assume also that the company selling the software doesn’t provide speciﬁc instructions on how to use
the ﬁve features, thus taking potential liability outside the realm of
§ 271(b). In this scenario, under Microsoft’s position, the software
seller can never be liable for contributory infringement of any one of
the method patents because the entire software program is capable of
substantial noninfringing use. This seems both untenable as a practical outcome and inconsistent with both the statute and governing
precedent.
Similarly, if, instead of selling Outlook with the date-picker, Microsoft had oﬀered the date-picker for sale as a separate download
to be used with Outlook, there would be li le dispute that Microsoft
was contributing to infringement of the Day patent.
In Hodosh v. Block Drug Co., the patent at issue claimed “a method
for desensitizing teeth with a composition containing an alkali metal
nitrate.” The accused infringer sold toothpaste, e.g., “Sensodyne-F,”
containing potassium nitrate, an alkali metal nitrate. The accused
infringer argued that the sale of the toothpaste, which itself was not
patented, could not constitute contributory infringement because the
toothpaste contained a staple article, i.e., potassium nitrate. The court
rejected this argument. While potassium nitrate, when sold in bulk
form, was “a staple article or commodity of commerce suitable for
substantial noninfringing use,” it was suitable only for the infringing
use when sold as an ingredient in the toothpaste specially made to
perform the patented method of desensitizing teeth.
Here, the infringing feature for completing the forms, i.e., the
date-picker tool, is suitable only for an infringing use. Inclusion of
the date-picker feature within a larger program does not change the
date-picker’s ability to infringe. Because Microsoft included the date-

' %&'&/4&4

picker tool in Outlook, the jury could reasonably conclude, based on
the evidence presented, that Microsoft intended computer users to
use the tool—perhaps not frequently—and the only intended use of
the tool infringed the Day patent.
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1. Suppose that the Plano Bait Shop is selling empty open-topped
rectangular aluminum boxes, with a length slightly less than the
width of a bait box, lips at each end that are the right shape to attach to the top edges of a bait box, and a detachable plastic cover.
Some buyers take the boxes, ﬁll them with sharp-grained sand,
and use it to immobilize earthworms. Others take the boxes
and ﬁll them with ﬁsh hooks, washcloths, or other items. Who,
if anyone, is infringing on the Lukehart patent? Does it ma er
if Plano includes instructions with the boxes explaining how to
ﬁll them with sand to immobilize earthworms?

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Under § 282 of the Patent Act of 1952, ”[a] patent shall be presumed
valid” and ”[t]he burden of establishing invalidity of a patent or any
claim thereof shall rest on the party asserting such invalidity.” We
consider whether § 282 requires an invalidity defense to be proved
by clear and convincing evidence. We hold that it does.

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When a patentee sells one of its products, the patentee can no longer
control that item through the patent laws – its patent rights are said
to “exhaust.” The purchaser and all subsequent owners are free to
use or resell the product just like any other item of personal property,
without fear of an infringement lawsuit.
We conclude that a patentee’s decision to sell a product exhausts
all of its patent rights in that item, regardless of any restrictions the
patentee purports to impose.
I

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The underlying dispute in this case is about laser printers – or,
more speciﬁcally, the cartridges that contain the powdery substance,
known as toner, that laser printers use to make an image appear on
paper. Respondent Lexmark designs, manufactures, and sells toner
cartridges to consumers in the United States and around the globe. It
owns a number of patents that cover components of those cartridges
and the manner in which they are used.
When toner cartridges run out of toner they can be reﬁlled and
used again. This creates an opportunity for other companies – known
as remanufacturers – to acquire empty Lexmark cartridges from purchasers in the United States and abroad, reﬁll them with toner, and
then resell them at a lower price than the new ones Lexmark puts on
the shelves.
Not blind to this business problem, Lexmark structures its sales in
a way that encourages customers to return spent cartridges. It gives
purchasers two options: One is to buy a toner cartridge at full price,
with no strings a ached. The other is to buy a cartridge at roughly
20–percent oﬀ through Lexmark’s “Return Program.” A customer
who buys through the Return Program still owns the cartridge but,
in exchange for the lower price, signs a contract agreeing to use it
only once and to refrain from transferring the empty cartridge to
anyone but Lexmark. To enforce this single-use/no-resale restriction,
Lexmark installs a microchip on each Return Program cartridge that
prevents reuse once the toner in the cartridge runs out.
Lexmark’s strategy just spurred remanufacturers to get more creative. Many kept acquiring empty Return Program cartridges and developed methods to counteract the eﬀect of the microchips. With that
technological obstacle out of the way, there was li le to prevent the
remanufacturers from using the Return Program cartridges in their
resale business. After all, Lexmark’s contractual single-use/no-resale
agreements were with the initial customers, not with downstream
purchasers like the remanufacturers.
Lexmark, however, was not so ready to concede that its plan had
been foiled. In 2010, it sued a number of remanufacturers, including
petitioner Impression for patent infringement with respect to Return
Program cartridges. Lexmark argued that, because it expressly prohibited reuse and resale of these cartridges, the remanufacturers infringed the Lexmark patents when they refurbished and resold them.
Eventually, the lawsuit was whi led down to one defendant, Impression Products, and one defense: that Lexmark’s sales exhausted
its patent rights in the cartridges, so Impression Products was free to
refurbish and resell them.
II
A

' %&'&/4&4

We conclude that Lexmark exhausted its patent rights in Return Program cartridges the moment it sold them. The single-use/no-resale restrictions in Lexmark’s contracts with customers may have been clear
and enforceable under contract law, but they do not entitle Lexmark
to retain patent rights in an item that it has elected to sell.
The Patent Act grants patentees the “right to exclude others from
making, using, oﬀering for sale, or selling [their] invention[s].” 35
U.S.C. § 154(a). For over 160 years, the doctrine of patent exhaustion
has imposed a limit on that right to exclude. The limit functions automatically: When a patentee chooses to sell an item, that product
is no longer within the limits of the monopoly and instead becomes
the private, individual property of the purchaser, with the rights and
beneﬁts that come along with ownership. A patentee is free to set the
price and negotiate contracts with purchasers, but may not, by virtue
of his patent, control the use or disposition”of the product after ownership passes to the purchaser.
This well-established exhaustion rule marks the point where
patent rights yield to the common law principle against restraints on
alienation. The Patent Act promotes the progress of science and the
useful arts by granting to inventors a limited monopoly that allows
them to secure the ﬁnancial rewards for their inventions. But once
a patentee sells an item, it has enjoyed all the rights secured by that
limited monopoly. Because the purpose of the patent law is fulﬁlled
when the patentee has received his reward for the use of his invention,
that law furnishes no basis for restraining the use and enjoyment of
the thing sold.
We have explained in the context of copyright law that exhaustion
has “an impeccable historic pedigree,” tracing its lineage back to the
“common law’s refusal to permit restraints on the alienation of chattels.” Kirtsaeng v. John Wiley & Sons, Inc.. As Lord Coke put it in the
17th century, if an owner restricts the resale or use of an item after
selling it, that restriction “is voide, because ... it is against Trade and
Traﬃque, and bargaining and contracting betweene man and man.”
1 E. Coke, Institutes of the Laws of England (1628); see J. Gray, Restraints on the Alienation of Property (2d ed. 1895) (“A condition or
conditional limitation on alienation a ached to a transfer of the entire interest in personalty is as void as if a ached to a fee simple in
land”).
This venerable principle is not, as the Federal Circuit dismissively
viewed it, merely “one common-law jurisdiction’s general judicial
policy at one time toward anti-alienation restrictions.” Congress enacted and has repeatedly revised the Patent Act against the backdrop
of the hostility toward restraints on alienation. That enmity is reﬂected in the exhaustion doctrine.
An illustration never hurts. Take a shop that restores and sells

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used cars. The business works because the shop can rest assured
that, so long as those bringing in the cars own them, the shop is free
to repair and resell those vehicles. That smooth ﬂow of commerce
would spu er if companies that make the thousands of parts that go
into a vehicle could keep their patent rights after the ﬁrst sale. Those
companies might, for instance, restrict resale rights and sue the shop
owner for patent infringement. And even if they refrained from imposing such restrictions, the very threat of patent liability would force
the shop to invest in eﬀorts to protect itself from hidden lawsuits. Either way, extending the patent rights beyond the ﬁrst sale would clog
the channels of commerce, with li le beneﬁt from the extra control
that the patentees retain. And advances in technology, along with
increasingly complex supply chains, magnify the problem. See Brief
for Intel Corp. et al. as Amici Curiae (“A generic smartphone assembled from various high-tech components could practice an estimated
250,000 patents”).
This Court accordingly has long held that, even when a patentee
sells an item under an express restriction, the patentee does not retain patent rights in that product. In Boston Store of Chicago v. American Graphophone Co., for example, a manufacturer sold graphophones
– one of the earliest devices for recording and reproducing sounds –
to retailers under contracts requiring those stores to resell at a speciﬁc price. When the manufacturer brought a patent infringement
suit against a retailer who sold for less, we concluded that there was
“no room for controversy” about the result: By selling the item, the
manufacturer placed it “beyond the conﬁnes of the patent law, and
could not, by qualifying restrictions as to use, keep it under the patent
monopoly.” [Similarly in United States v. Univis Lens Co..]
It is true that Boston Store and Univis involved resale price restrictions that, at the time of those decisions, violated the antitrust laws.
But in both cases it was the sale of the items, rather than the illegality
of the restrictions, that prevented the patentees from enforcing those
resale price agreements through patent infringement suits.
Turning to the case at hand, we conclude that this well-se led line
of precedent allows for only one answer: Lexmark cannot bring a
patent infringement suit against Impression Products to enforce the
single-use/no-resale provision accompanying its Return Program cartridges. Once sold, the Return Program cartridges passed outside of
the patent monopoly, and whatever rights Lexmark retained are a
ma er of the contracts with its purchasers, not the patent law.
B
The Federal Circuit reached a diﬀerent result largely because it got
oﬀ on the wrong foot. The “exhaustion doctrine,” the court believed,
“must be understood as an interpretation of” the infringement statute,

' %&'&/4&4

which prohibits anyone from using or selling a patented article “without authority” from the patentee. Exhaustion reﬂects a default rule
that a patentee’s decision to sell an item “presumptively grants ‘authority’ to the purchaser to use it and resell it.” But, the Federal Circuit explained, the patentee does not have to hand over the full “bundle of rights” every time. If the patentee expressly withholds a stick
from the bundle – perhaps by restricting the purchaser’s resale rights
– the buyer never acquires that withheld authority, and the patentee
may continue to enforce its right to exclude that practice under the
patent laws.
The misstep in this logic is that the exhaustion doctrine is not a
presumption about the authority that comes along with a sale; it is
instead a limit on the scope of the patentee’s rights. The right to use,
sell, or import an item exists independently of the Patent Act. What
a patent adds – and grants exclusively to the patentee – is a limited
right to prevent others from engaging in those practices. As a result,
the sale transfers the right to use, sell, or import because those are the
rights that come along with ownership, and the buyer is free and clear
of an infringement lawsuit because there is no exclusionary right left
to enforce.
The Federal Circuit also expressed concern that preventing patentees from reserving patent rights when they sell goods would create an artiﬁcial distinction between such sales and sales by licensees.
Patentees, the court explained, often license others to make and sell
their products, and may place restrictions on those licenses. A computer developer could, for instance, license a manufacturer to make
its patented devices and sell them only for non-commercial use by individuals. If a licensee breaches the license by selling a computer for
commercial use, the patentee can sue the licensee for infringement.
If patentees can employ licenses to impose post-sale restrictions on
purchasers that are enforceable through infringement suits, the court
concluded, it would make li le sense to prevent patentees from doing
so when they sell directly to consumers.
The Federal Circuit’s concern is misplaced. A patentee can impose restrictions on licensees because a license does not implicate the
same concerns about restraints on alienation as a sale. Patent exhaustion reﬂects the principle that, when an item passes into commerce,
it should not be shaded by a legal cloud on title as it moves through
the marketplace. But a license is not about passing title to a product,
it is about changing the contours of the patentee’s monopoly: The
patentee agrees not to exclude a licensee from making or selling the
patented invention, expanding the club of authorized producers and
sellers. Because the patentee is exchanging rights, not goods, it is free
to relinquish only a portion of its bundle of patent protections.
A patentee’s authority to limit licensees does not, as the Federal

$)"15&3  1"5&/5

Circuit thought, mean that patentees can use licenses to impose postsale restrictions on purchasers that are enforceable through the patent
laws. So long as a licensee complies with the license when selling an
item, the patentee has, in eﬀect, authorized the sale. That licensee’s
sale is treated, for purposes of patent exhaustion, as if the patentee
made the sale itself. The result: The sale exhausts the patentee’s
rights in that item. A license may require the licensee to impose a
restriction on purchasers, like the license limiting the computer manufacturer to selling for non-commercial use by individuals. But if the
licensee does so – by, perhaps, having each customer sign a contract
promising not to use the computers in business – the sale nonetheless
exhausts all patent rights in the item sold. The purchasers might not
comply with the restriction, but the only recourse for the licensee is
through contract law, just as if the patentee itself sold the item with
a restriction.
In sum, patent exhaustion is uniform and automatic. Once a
patentee decides to sell – whether on its own or through a licensee
– that sale exhausts its patent rights, regardless of any post-sale restrictions the patentee purports to impose, either directly or through
a license.
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I
Respondent LG Electronics, Inc. (LGE), purchased a portfolio of computer technology patents in 1999 [relating to the storage of data in
computer memory.]
LGE licensed a patent portfolio, including the LGE Patents, to
Intel Corporation (Intel). The cross-licensing agreement (License
Agreement) permits Intel to manufacture and sell microprocessors
and chipsets that use the LGE Patents (the Intel Products). The License Agreement authorizes Intel to ”‘make, use, sell (directly or indirectly), oﬀer to sell, import or otherwise dispose of’” its own products
practicing the LGE Patents. Notwithstanding this broad language,
the License Agreement contains some limitations. Relevant here, it
stipulates that no license
is granted by either party hereto . . . to any third party for
the combination by a third party of Licensed Products of
either party with items, components, or the like acquired
. . . from sources other than a party hereto, or for the use,
import, oﬀer for sale or sale of such combination.
The License Agreement purports not to alter the usual rules of patent
exhaustion, however, providing that, ”[n]otwithstanding anything to

' %&'&/4&4

the contrary contained in this Agreement, the parties agree that nothing herein shall in any way limit or alter the eﬀect of patent exhaustion that would otherwise apply when a party hereto sells any of its
Licensed Products.”
In a separate agreement (Master Agreement), Intel agreed to give
wri en notice to its own customers informing them that, while it had
obtained a broad license ”ensuring that any Intel product that you
purchase is licensed by LGE and thus does not infringe any patent
held by LGE,” the license ”does not extend, expressly or by implication, to any product that you make by combining an Intel product
with any non-Intel product.” The Master Agreement also provides
that ”a breach of this Agreement shall have no eﬀect on and shall not
be grounds for termination of the Patent License.”
Petitioners, including Quanta Computer (collectively Quanta),
are a group of computer manufacturers. Quanta purchased microprocessors and chipsets from Intel and received the notice required
by the Master Agreement. Nonetheless, Quanta manufactured computers using Intel parts in combination with non-Intel memory and
buses in ways that practice the LGE Patents. Quanta does not modify
the Intel components and follows Intel’s speciﬁcations to incorporate
the parts into its own systems.
III
A
LGE argues that the exhaustion doctrine is inapplicable here because
it does not apply to method claims, which are contained in each of the
LGE Patents. LGE reasons that, because method patents are linked
not to a tangible article but to a process, they can never be exhausted
through a sale. Rather, practicing the patent – which occurs upon
each use of an article embodying a method patent – is permissible
only to the extent rights are transferred in an assignment contract.
Quanta, in turn, argues that there is no reason to preclude exhaustion
of method claims, and points out that both this Court and the Federal
Circuit have applied exhaustion to method claims. It argues that any
other rule would allow patent holders to avoid exhaustion entirely
by inserting method claims in their patent speciﬁcations.
Quanta has the be er of this argument. Nothing in this Court’s approach to patent exhaustion supports LGE’s argument that method
patents cannot be exhausted. It is true that a patented method may
not be sold in the same way as an article or device, but methods
nonetheless may be ”embodied” in a product, the sale of which exhausts patent rights. Our precedents do not diﬀerentiate transactions involving embodiments of patented methods or processes from
those involving patented apparatuses or materials. To the contrary,

&UIZM (BTPMJOF  64

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this Court has repeatedly held that method patents were exhausted
by the sale of an item that embodied the method. In Ethyl Gasoline
Corp. v. United States, for example, the Court held that the sale of
a motor fuel produced under one patent also exhausted the patent
for a method of using the fuel in combustion motors.4 Similarly, Univis held that the sale of optical lens blanks that partially practiced a
patent exhausted the method patents that were not completely practiced until the blanks were ground into lenses.
These cases rest on solid footing. Eliminating exhaustion for
method patents would seriously undermine the exhaustion doctrine.
Patentees seeking to avoid patent exhaustion could simply draft their
patent claims to describe a method rather than an apparatus. Apparatus and method claims may approach each other so nearly that it
will be diﬃcult to distinguish the process from the function of the
apparatus. By characterizing their claims as method instead of apparatus claims, or including a method claim for the machine’s patented
method of performing its task, a patent drafter could shield practically any patented item from exhaustion.
This case illustrates the danger of allowing such an end-run
around exhaustion. On LGE’s theory, although Intel is authorized
to sell a completed computer system that practices the LGE Patents,
any downstream purchasers of the system could nonetheless be liable
for patent infringement. Such a result would violate the longstanding principle that, when a patented item is once lawfully made and
sold, there is no restriction on its use to be implied for the beneﬁt of
the patentee.
B
We next consider the extent to which a product must embody a patent
in order to trigger exhaustion. Quanta argues that, although sales of
an incomplete article do not necessarily exhaust the patent in that article, the sale of the microprocessors and chipsets exhausted LGE’s
patents in the same way the sale of the lens blanks exhausted the
patents in Univis. Just as the lens blanks in Univis did not fully practice the patents at issue because they had not been ground into ﬁnished lenses, Quanta observes, the Intel Products cannot practice the
LGE Patents – or indeed, function at all – until they are combined
with memory and buses in a computer system. If, as in Univis, patent
rights are exhausted by the sale of the incomplete item, then LGE has
4

The patentee held patents for (1) a ﬂuid additive increasing gasoline eﬃciency,
(2) motor fuel produced by mixing gasoline with the patented ﬂuid, and (3) a
method of using fuel containing the patented ﬂuid in combustion motors. The
patentee sold only the ﬂuid, but a empted to control sales of the treated fuel. The
Court held that the sale of the ﬂuid to reﬁners relinquished the patentee’s exclusive
rights to sell the treated fuel.

' %&'&/4&4

no postsale right to require that the patents be practiced using only Intel parts. Quanta also argues that exhaustion doctrine will be a dead
le er unless it is triggered by the sale of components that essentially,
even if not completely, embody an invention. Otherwise, patent holders could authorize the sale of computers that are complete with the
exception of one minor step – say, inserting the microprocessor into a
socket – and extend their rights through each downstream purchaser
all the way to the end user.
We agree with Quanta that Univis governs this case. As the Court
there explained, exhaustion was triggered by the sale of the lens
blanks because their only reasonable and intended use was to practice the patent and because they ”embodie[d] essential features of
[the] patented invention.” Each of those a ributes is shared by the
microprocessors and chipsets Intel sold to Quanta under the License
Agreement.
C
Having concluded that the Intel Products embodied the patents, we
next consider whether their sale to Quanta exhausted LGE’s patent
rights. Exhaustion is triggered only by a sale authorized by the patent
holder.
LGE argues that there was no authorized sale here because the
License Agreement does not permit Intel to sell its products for use
in combination with non-Intel products to practice the LGE Patents.
LGE overlooks important aspects of the structure of the Intel-LGE
transaction. Nothing in the License Agreement restricts Intel’s right
to sell its microprocessors and chipsets to purchasers who intend to
combine them with non-Intel parts. It broadly permits Intel to ”make,
use, [or] sell” products free of LGE’s patent claims. To be sure, LGE
did require Intel to give notice to its customers, including Quanta,
that LGE had not licensed those customers to practice its patents.
But neither party contends that Intel breached the agreement in that
respect. In any event, the provision requiring notice to Quanta appeared only in the Master Agreement, and LGE does not suggest that
a breach of that agreement would constitute a breach of the License
Agreement. Hence, Intel’s authority to sell its products embodying
the LGE Patents was not conditioned on the notice or on Quanta’s
decision to abide by LGE’s directions in that notice.
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The facts in this case are not in dispute. The patents in suit [
and   ] are directed to a drill with a shank portion and a
unique carbide tip geometry that has specially conﬁgured cu ing
edges resulting in a drill suitable for high-feed machining with im-

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proved cu ing ability especially at its center portion. The drill tip is
not separately patented.

As illustrated in the above drawings from the ’690 patent, the drill
has a tip (1), shank portion (2), twisted grooves (3), projections (4)
(these projections bend and break the chips to render them smoothly
removable) and a conical end having a center point (11) at the apex of
the cone and a pair of cu ing edges (10). The drill shank (2) is made
of medium carbon steel. The drill tip (1) is made of a more durable
carbide and is brazed to the steel shank (2). Brazing is like soldering
but with a much higher melting point. It requires a temperature of
1300 degrees Fahrenheit to join the carbide tip to the steel shank.
Sandvik manufactures a commercial embodiment of the patented
drill. Although made of durable carbide, over time and use, the drill
tip dulls and may require resharpening. Resharpening, also known
as regrinding, involves pu ing a new edge on the drill tip. Normally,
the drill can cut through about one thousand inches of material before
needing resharpening, depending, of course, upon the hardness of
the material being cut. Sandvik expects the drill tip to be resharpened
and, in fact, issues guidelines explaining how to resharpen the tip so
as to maintain the specially conﬁgured cu ing edges. Sandvik does
not contend that resharpening constitutes infringement.
E.J. oﬀers a drill repair service which includes resharpening and
retipping Sandvik drills. E.J. retips, at the request of its customers,
when the tip cannot be sharpened because it chips, cracks or simply
wears down after being resharpened several times. According to E.J’s
vice-president, Mr. Robert Hayes, some of E.J.’s customers elect not
to have the drill retipped when it cannot be resharpened any longer.
E.J. returns the drill to the customer or disposes of it at the customer’s
request. The parties agree that when the tip is damaged (i.e. chipped,
cracked or suﬃciently worn down so that it cannot be resharpened),

' %&'&/4&4

the drill has reached the end of its useful life unless it is retipped.
E.J.’s retipping process includes removing the worn or damaged
tip by heating the tip to 1300 degrees Fahrenheit using an acetylene
torch. E.J. then brazes in a rectangular piece of new carbide onto
the drill shank. After the piece of carbide has cooled, E.J. recreates
the patented geometry of the cu ing edges by machining the carbide.
This process includes: (1) grinding the carbide to the proper outside
diameter; (2) grinding the carbide to a point; (3) grinding the rake
surfaces of the new point; (4) grinding the center of the new point;
and (5) honing the edges. In the ﬁnal steps of the machining process,
E.J. creates the cu ing edges by following Sandvik’s instructions for
tip resharpening.
Sandvik claims that E.J.’s retipping service constitutes an infringing reconstruction of its patented drills. Sandvik does not manufacture or sell replacement drill tips. It contends that it never intended
for the drills to be retipped. E.J. contends that its retipping service is
a lawful repair of the patented drills.
Direct infringement includes the making of a patented article
without authority. 35 U.S.C. § 271(a) (1994). Sandvik contends that
E.J. is reconstructing its patented drill and therefore infringing its ’690
and ’162 patents under § 271(a). However, when Sandvik sold its
patented drills to its customers, it granted them an implied license
to use the drill for its useful life, see Aro Mfg. Co. v. Convertible Top
Replacement Co. (”Aro II”), and the implied license to use includes the
right to repair the patented drill.
The Supreme Court has taken an expansive view of what constitutes a permissible repair. In Aro Mfg. Co. v. Convertible Top Replacement Co. (”Aro I”), the Court held that the replacement of the
fabric portion of a convertible car top was a permissible repair, not
an infringing reconstruction. The Court held: ”No element, not itself
separately patented, that constitutes one of the elements of a combination patent is entitled to patent monopoly, however essential it may
be to the patented combination and no ma er how costly or diﬃcult
replacement may be.” Therefore, even if E.J.’s retipping service cost
almost as much as the drill or if the replacement of the tip is diﬃcult
and time consuming, as in this case, these factors are not dispositive
of reconstruction.
The Court also rejected the ”heart of the invention test.” See id.
(holding that replacement of the distinguishing part of the patented
combination does not amount to a reconstruction because a patent
covers the totality of the elements in a combination). Therefore, the
fact that E.J. may be replacing the novel features of the ’690 patented
invention is also not dispositive of reconstruction.
In Aro I, the Supreme Court further explained the test for what
constitutes a reconstruction: ”The decisions of this Court require the

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conclusion that reconstruction of a patented entity, comprised of unpatented elements, is limited to such a true reconstruction of the entity as to ‘in fact make a new article,’ after the entity, viewed as a
whole, has become spent.” Although we question the district court’s
ﬁnding that the tip is, in fact, a separate part of the device, we need
not reach this issue because the court nevertheless failed to analyze
whether the replacement of this ”part” constituted reconstruction
consistent with Aro I.
There are a number of factors to consider in determining whether
a defendant has made a new article, after the device has become spent,
including the nature of the actions by the defendant, the nature of the
device and how it is designed (namely, whether one of the components of the patented combination has a shorter useful life than the
whole), whether a market has developed to manufacture or service
the part at issue and objective evidence of the intent of the patentee.
Under the totality of the circumstances, we hold in this case that E.J.’s
actions are a reconstruction.
By E.J.’s own admission, the drill is ”spent” when the tip can no
longer be resharpened unless it is retipped. In fact, the record reveals
that E.J.’s customers may elect not to retip and inform E.J. to discard
the drill instead.
Moreover, the nature of the work done by E.J. shows that retipping is more like reconstruction than repair. E.J. does not just a ach
a new part for a worn part, but rather must go though several steps
to replace, conﬁgure and integrate the tip onto the shank. It has to
break the worn or damaged tip from the shank by heating it to 1300
degrees Fahrenheit. It brazes to the shank a new rectangular block of
carbide and grinds and machines it to the proper diameter and creates the point. Thereafter, the tip is honed and sharpened, grinding
the rake surfaces and the center of the point and honing the edges.
These actions are eﬀectively a re-creation of the patented invention
after it is spent.
This is not a case where it is clear that the patented device has
a useful life much longer than that of certain parts which wear out
quickly. For example, in Wilson v. Simpson, in determining that a repair had occurred, the Supreme Court focused speciﬁcally on the fact
that the machine was designed so that the knives had to be replaced
long before the other components:
The proof in the case, is, that one of [the patentee’s] machines, properly made, will last in use for several years,
but that its cu ing-knives will wear out and must be replaced at least every sixty or ninety days. [If such a] part
of the combination is meant to be only temporary in the
use of the whole, and to be frequently replaced, because it

' %&'&/4&4

will not last as long as the other parts of the combination,
its inventor cannot complain.
See also Aro I (noting that the fabric had a much shorter expected life
(about three years) than the convertible car top); Porter v. Farmer Supply Serv., Inc. (”The useful life of a disk is measured in weeks, that of a
harvester is ﬁve or six years. The district court found, and it is undisputed, that a purchaser can expect to wear out many disks during the
useful life of the header.”).
The drill tip in this case is not a part like the detachable knives in
the Wilson that have to be replaced periodically over the useful life
of the planing machine. The drill tip was not manufactured to be a
replaceable part, although it could be resharpened a number of times
to extend its life. It was not intended or expected to have a life of
temporary duration in comparison to the drill shank. And ﬁnally, the
tip was not a ached to the shank in a manner to be easily detachable.
In Aro I, the Supreme Court also noted that ”the consequent demand for replacement fabrics has given rise to a substantial industry.” Evidence of development in the industry could also be a factor
tending to prove that there is a reasonable expectation that the part
of the patented combination wears out quickly and requires frequent
replacement. In this case, there is no evidence of a substantial market for drill retipping of the sort required for the Sandvik drill. There
is no evidence of large numbers of customers retipping these drills
or of companies (other than E.J.) oﬀering to retip these drills. No
one manufactures replacement tips for Sandvik’s drill and although
some customers opt to retip the drill only a small percentage of all
drills manufactured are retipped.
Finally, there was no intent evidenced by the patentee that would
support E.J.’s argument that replacement of the tips is a repair. See
Sage Products (evidence that patentee intended the inner containers
to be replaced, that it manufactures replacement parts and instructs
customers to replace supports holding such replacement a permissible repair); Porter (considering that the patentee sold replacement
cu ing disks for its tomato harvester). The evidence shows that Sandvik never intended for its drills to be retipped. It did not manufacture
or sell replacement drill tips. It did not publish instructions on how
to retip its patented drills or suggest that the drills could or should be
retipped. Sandvik was aware that the drill tip would need occasional
resharpening and instructed its customer on how to resharpen the
tip. There is, therefore, no objective evidence that Sandvik’s drill tip
was intended to be a replaceable part. Although the repair or reconstruction issue does not turn on the intention of the patentee alone,
the fact that no replacement drill tips have ever been made or sold by
the patentee is consistent with the conclusion that replacement of the

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carbide tip is not a permissible repair.
Although there is no bright-line test for determining whether reconstruction or repair has occurred, we conclude based on all of the
facts in this case that E.J. is reconstructing an otherwise spent device
when it retips Sandvik’s drills. Accordingly, we hold that E.J.’s drill
tip replacements infringe the ’690 and ’162 patents.

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A person shall be entitled to a defense under section 282(b) with
respect to subject ma er consisting of a process, or consisting of a
machine, manufacture, or composition of ma er used in a manufacturing or other commercial process, that would otherwise infringe a
claimed invention being asserted against the person if –
(1) such person, acting in good faith, commercially used the subject ma er in the United States, either in connection with an
internal commercial use or an actual arm’s length sale or other
arm’s length commercial transfer of a useful end result of such
commercial use; and
(2) such commercial use occurred at least 1 year before the earlier
of either—
(A) the eﬀective ﬁling date of the claimed invention; or
(B) the date on which the claimed invention was disclosed to
the public in a manner that qualiﬁed for the exception from
prior art under section 102(b).
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[Madey owned a patent on certain laser technology. Duke practiced
the patent as part of a research project under a federally funded
grant.]
Madey argues, and we agree, that the district court had an overly
broad conception of the very narrow and strictly limited experimental use defense. The district court stated that the experimental use
defense inoculated uses that ”were solely for research, academic, or
experimental purposes,” and that the defense covered use that ”is
made for experimental, non-proﬁt purposes only.” Both formulations
are too broad and stand in sharp contrast to our admonitions in Embrex and Roche that the experimental use defense is very narrow and
strictly limited. In Embrex, Inc. v. Service Engineering Corp, we held
that the defense was very narrow and limited to actions performed

' %&'&/4&4

”for amusement, to satisfy idle curiosity, or for strictly philosophical
inquiry.” Further, use does not qualify for the experimental use defense when it is undertaken in the ”guise of scientiﬁc inquiry” but has
”deﬁnite, cognizable, and not insubstantial commercial purposes.”
Our precedent clearly does not immunize use that is in any way
commercial in nature. Similarly, our precedent does not immunize
any conduct that is in keeping with the alleged infringer’s legitimate
business, regardless of commercial implications. For example, major
research universities, such as Duke, often sanction and fund research
projects with arguably no commercial application whatsoever. However, these projects unmistakably further the institution’s legitimate
business objectives, including educating and enlightening students
and faculty participating in these projects. These projects also serve,
for example, to increase the status of the institution and lure lucrative
research grants, students and faculty.
In the present case, the district court a ached too great a weight to
the nonproﬁt, educational status of Duke, eﬀectively suppressing the
fact that Duke’s acts appear to be in accordance with any reasonable
interpretation of Duke’s legitimate business objectives. The correct
focus should not be on the non-proﬁt status of Duke but on the legitimate business Duke is involved in and whether or not the use was
solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry.

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Copyright protects creative expression. In some respects it is structurally analogous to patent law: both reward someone who creates
valuable information with exclusive rights over it. But in many other
respects – including subject ma er, novelty, registration, term, and
similarity – copyright is almost completely the opposite of patent.
The standard justiﬁcation for copyright law is a familiar and utilitarian: to maximize public access to the fruits of human creativity.
Thus, copyright law provides an economic incentive to create new
expressive works, and provides protections to encourage the distribution of those works. Another rationale, with more of a natural-law
ﬂavor, is to protect authors’ non-economic rights by giving them creative control. One sometimes also sees arguments that link copyright
and freedom of speech in a shared goal of creating a diverse society
with a healthy culture and healthy democracy.

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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;

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motion pictures and other audiovisual works;
sound recordings; and
architectural works.

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 64
The sine qua non of copyright is originality. To qualify for copyright
protection, a work must be original to the author. 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 ma er 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.

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Elsewhere, Feist helpfully expresses the elements of originality as ”independent creation plus a modicum of creativity.” The second prong
is the subject (pun intended) of this section. First, we look at it as
a threshold test: when are works uncopyrightable because they are
uncreative? Then, we ask whether it expresses any exclusions from
copyrightability. In one sense, no: courts are not to inquire into a
work’s quality or morality. In another sense, yes: ”ideas” are regarded as uncopyrightable, even if they are original.

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The following are examples of works not subject to copyright and
applications for registration of such works cannot be entertained:
(a) Words and short phrases such as names, titles, and slogans; familiar symbols or designs; mere variations of typographic ornamentation, le ering or coloring; mere listing of ingredients or
contents;

" 46#+&$5 ."55&3

(d) Works consisting entirely of information that is common property containing no original authorship, such as, for example:
Standard calendars, height and weight charts, tape measures
and rulers, schedules of sporting events, and lists or tables taken
from public documents or other common sources.
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 64
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 published a telephone directory, containing both white and
yellow pages, covering a much larger geographic area. It contained
46,878 white-pages listings. Feist requested a license to Rural’s listings; Rural refused.]
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 19821983 white pages. Four of these were ﬁctitious listings that Rural had
inserted into its directory to detect copying.
Rural sued for copyright infringement in the District Court for the
District of Kansas taking the position that Feist, in compiling its own
directory, could not use the information contained in Rural’s white
pages. Rural asserted that Feist’s employees were obliged to travel

$)"15&3  $01:3*()5

door-to-door or conduct a telephone survey to discover the same information for themselves. Feist responded that such eﬀorts were economically impractical and, in any event, unnecessary because the information copied was beyond the scope of copyright protection. The
District Court granted summary judgment to Rural.
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.
The key to resolving the tension lies in understanding why facts
are not copyrightable. No one may claim originality as to facts. 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.
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.
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.
B

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As we have explained, originality is a constitutionally mandated prerequisite for copyright protection. The Court’s decisions announcing
this rule predate the Copyright Act of 1909, but ambiguous language
in the 1909 Act caused some lower courts temporarily to lose sight of
this requirement.
Making ma ers worse, these courts developed a new theory to
justify the protection of factual compilations. Known alternatively
as “sweat of the brow” or “industrious collection,” the underlying
notion was that copyright was a reward for the hard work that went
into compiling facts. The classic formulation of the doctrine appeared
in Jeweler’s Circular Publishing Co.:

" 46#+&$5 ."55&3

The right to copyright a book upon which one has expended labor in its preparation does not depend upon
whether the materials which he has collected consist or
not of ma ers which are publici juris, or whether such materials show literary skill or originality, either in thought
or in language, or anything more than industrious collection. The man who goes through the streets of a town and
puts down the names of each of the inhabitants, with their
occupations and their street number, acquires material of
which he is the author.
Without a doubt, the “sweat of the brow” doctrine ﬂouted basic copyright principles. Throughout history, copyright law has recognized
a greater need to disseminate factual works than works of ﬁction or
fantasy. But “sweat of the brow” courts took a contrary view; they
handed out proprietary interests in facts and declared that authors
are absolutely precluded from saving time and eﬀort by relying upon
the facts contained in prior works.
C
The deﬁnition of “compilation” is found in § 101 of the 1976 Act. It
deﬁnes a “compilation” in the copyright sense 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.”
As discussed earlier, however, the originality requirement is not
particularly stringent. A compiler may se le upon a selection or arrangement that others have used; novelty is not required. Originality
requires only that the author make the selection or arrangement independently (i. e., without copying that selection or arrangement from
another work), and that it display some minimal level of creativity.
Presumably, the vast majority of compilations will pass this test, but
not all will. There remains a narrow category of works in which the
creative spark is u erly lacking or so trivial as to be virtually nonexistent. Such works are incapable of sustaining a valid copyright.
In summary, the 1976 revisions to the Copyright Act leave no
doubt that originality, not “sweat of the brow,” is the touchstone of
copyright protection in directories and other fact-based works. Nor is
there any doubt that the same was true under the 1909 Act. The 1976
revisions were a direct response to the Copyright Oﬃce’s concern
that many lower courts had misconstrued this basic principle, and
Congress emphasized repeatedly that the purpose of the revisions
was to clarify, not change, existing law. The revisions explain with
painstaking clarity that copyright requires originality, § 102(a); that
facts are never original, § 102(b); that the copyright in a compilation

$)"15&3  $01:3*()5

does not extend to the facts it contains, § 103(b); and that a compilation is copyrightable only to the extent that it features an original
selection, coordination, or arrangement, § 101.
III
The selection, coordination, and arrangement of Rural’s white pages
do not satisfy 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 ma er
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.
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

" 46#+&$5 ."55&3

in publishing this paper, yet the law does not contemplate their being
rewarded in this way.” Baker
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Is this logo (for a professional sports team) suﬃciently creative to be
copyrightable?
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The Baseball Card Price Report is a comprehensive printed list of collectible baseball cards sold between 1909 and 2011. It lists 32,000 baseball cards and a market price for each of them. The market price is
determined by obtaining transaction lists from several dozen large
dealers and averaging the sales prices for the card over the past year.
The Report is organized by year: it has a section for 1909, a section
for 1910, and so on. Each section is subdivided into a list of manufacturers (Topps, Upper Deck, and so on). Each manufacturer’s list is
then divided by teams, and players are listed alphabetically by last
name within a team section. For each card, the Report gives prices
for mint, excellent, very good, good, and fair condition cards. In addition, about 9,000 of the cards are noted with a star to indicate that they
are “premium” cards. These cards are considered especially valuable
beacuse the player is in the Hall of Fame, played for a famous team, or
some other reason that makes the card especially scarce or especially
prized by collectors.
An entrepreneur calling himself Tyrone Tyrannosaurus has
started a website called the “Collector’s Cheat Sheet.” The front of
the site consists of three drop-down menus: year, team, and player
name. Once a user selects all three, he is taken to a page that lists all
of the companies that made cards of that player in that year. If a card
is considered “premium” by the Report, the Cheat Sheet lists the card
in bold.
You represent Mr. Tyrannosaurus, who has received a cease-anddesist le er from the publisher of the Report claiming that the Cheat
Sheet is infringing on a copyright in the Report. What is your advice
to your client?

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 64
[The plaintiﬀs produced three large color posters (”chromolithographs”) to be used as advertisements for Wallace’s
circus. Later, the defendant reproduced the posters in smaller
black-and-white versions, as advertisements for the same circus.

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When sued, the defendants argued that the chromolithographs were
not copyrightable.]
We shall do no more than mention the suggestion that painting
and engraving unless for a mechanical end are not among the useful arts, the progress of which Congress is empowered by the Constitution to promote. The Constitution does not limit the useful to
that which satisﬁes immediate bodily needs. It is obvious also that
the plaintiﬀs’ case is not aﬀected by the fact, if it be one, that the
pictures represent actual groups – visible things. They seem from
the testimony to have been composed from hints or description, not
from sight of a performance. But even if they had been drawn from
the life, that fact would not deprive them of protection. The opposite
proposition would mean that a portrait by Velasquez or Whistler was
common property because others might try their hand on the same
face. Others are free to copy the original. They are not free to copy
the copy. 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 unless there is a restriction in the words of
the act.
If there is a restriction it is not to be found in the limited pretensions of these particular works. The least pretentious picture has
more originality in it than directories and the like, which may be copyrighted.
[The copyright act in force at the time protected only deﬁned categories of works, one of which was ”pictorial illustrations or works
connected with the ﬁne arts.”] These chromolithographs are ”pictorial illustrations.” The word ”illustrations” does not mean that they
must illustrate the text of a book, and that the etchings of Rembrandt
or Steinla’s engraving of the Madonna di San Sisto could not be protected to-day if any man were able to produce them. Again, the act
however construed, does not mean that ordinary posters are not good
enough to be considered within its scope. The antithesis to ”illustrations or works connected with the ﬁne arts” is not works of ti le merit
or of humble degree, or illustrations addressed to the less educated
classes; it is ”prints or labels designed to be used for any other articles
of manufacture.” Certainly works are not the less connected with the
ﬁne arts because their pictorial quality a racts the crowd and therefore gives them a real use – if use means to increase trade and to help
to make money. A picture is none the less a picture and none the
less a subject of copyright that it is used for an advertisement. And
if pictures may be used to advertise soap, or the theatre, or monthly
magazines, as they are, they may be used to advertise a circus. Of
course, the ballet is as legitimate a subject for illustration as any other.

" 46#+&$5 ."55&3

A rule cannot be laid down that would excommunicate the paintings
of Degas.
It would be a dangerous undertaking for persons trained only to
the law to constitute themselves ﬁnal judges of the worth of pictorial
illustrations, 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. It may be
more than doubted, for instance, whether the etchings of Goya or the
paintings of Manet would have been sure of protection when seen
for the ﬁrst time. At the other end, copyright would be denied to pictures which appealed to a public less educated than the judge. Yet
if they command the interest of any public, they have a commercial
value – it would be bold to say that they have not an aesthetic and
educational value – and the taste of any public is not to be treated
with contempt. It is an ultimate fact for the moment, whatever may
be our hopes for a change. That these pictures had their worth and
their success is suﬃciently shown by the desire to reproduce them
without regard to the plaintiﬀs’ rights. We are of opinion that there
was evidence that the plaintiﬀs have rights entitled to the protection
of the law.

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As a general rule, the Copyright Oﬃce will not consider factors that
have no bearing on whether the originality requirement has been met.
The fact that a work may be novel, distinctive, innovative, or even
unique is irrelevant to this analysis. The Copyright Oﬃce does not
consider the aesthetic value, artistic merit, or intrinsic quality of a
work. For example, the Oﬃce will not look for any particular style of
creative expression. Likewise, the Oﬃce will not consider whether a
work is visually appealling or wri en in elegant prose. For the same
reasons, the Oﬃce will not consider the truth or falsity of the facts
set forth in a work of authorship. Nor will the Oﬃce consider the
soundness of the views expressed in the work.
The Oﬃce will focus only on the actual appearance or sound of
the work that has been submi ed for registration, but will not consider any meaning or signiﬁcance that the work may evoke. The Ofﬁce will not consider the author’s inspiration for the work, creative
intent, or intended meaning. The U.S. Copyright Oﬃce will not consider the author’s creative skill and experience, because the author’s
personal or professional history is irrelevant to the determination of
copyrightability.
The Oﬃce will not consider the amount of time, eﬀort, or expense
required to create the work. As a general rule, the Oﬃce will not con-

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sider possible design alternatives that the author may have considered when he or she created the work. Likewise, the Oﬃce will not
consider potential variations in the use of the work, such as the fact
that the work could be presented in a diﬀerent color, in a diﬀerent
size, or with a diﬀerent orientation. As a general rule, the materials
used to create a work have no bearing on the originality analysis. For
example, the U.S. Copyright Oﬃce will not consider the fact that a
jewelry design was constructed with precious metals or gemstones,
or the fact that a silk screen was printed on a particular paper stock.
The U.S. Copyright Oﬃce will not consider the marketability or commercial success of the work, because these issues are irrelevant to the
originality analysis.

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Plaintiﬀs-appellants owned a properly registered copyright on a motion picture titled ”Behind the Green Door.” Two groups of defendants, each group consisting of a theater and several individuals,
obtained copies of the movie without plaintiﬀs’ permission and infringed the copyright by exhibiting the ﬁlm at the theaters. We hold
that the district court erred in permi ing the assertion of obscenity as
an aﬃrmative defense to the claim of infringement, and, accordingly,
reverse without reaching the question whether the ﬁlm is obscene.
The district court did not base its decision on standards found
within the [1909 Copyright] Act, which it described as ”silent as to
works which are subject to registration and copyright.” The Act is
not ”silent.” Rather, the statutory language ”all the writings of an author” is facially all-inclusive, within itself admi ing of no exceptions.
There is not even a hint in the language of § 4 that the obscene nature
of a work renders it any less a copyrightable ”writing.”
Society’s view of what is moral and immoral continually changes.
To give one example, in Martine i v. Maguire, the play ”The Black
Crook,” because it featured women clad in ﬂesh-colored tights, was
held to be ”grossly indecent, and calculated to corrupt the morals
of the people” and hence uncopyrightable. By the early part of this
century, it had become clear that this judgment reﬂected the moral
standards of a bygone era.
Denying copyright protection to works adjudged obscene by the
standards of one era would frequently result in lack of copyright protection (and thus lack of ﬁnancial incentive to create) for works that
later generations might consider to be not only non-obscene but even
of great literary merit. Many works that are today held in high regard have been adjudged obscene in previous eras. English courts of
the nineteenth century found the works of Byron, Southey and Shelley to be immoral. American courts have found these books, among

" 46#+&$5 ."55&3

others, obscene: Edmund Wilson, M
H
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;
Henry Miller, T
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and T
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; Erskine
Caldwell, G ’ L
A
; Lillian Smith, S
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; D. H.
Lawrence, L
C
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; Theodore Dreiser, A A
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.
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Defendant’s primary contention is that the works were not entitled
to copyright protection since they, and the advertising material associated with them, fraudulently represented to the public that users of
the system described could beat the horses.
There is nothing in the Copyright Act to suggest that the courts are
to pass upon the truth or falsity, the soundness or unsoundness, of the
views embodied in a copyrighted work. The gravity and immensity
of the problems, theological, philosophical, economic and scientiﬁc,
that would confront a court if this view were adopted are staggering
to contemplate. It is surely not a task lightly to be assumed, and we
decline the invitation to assume it.

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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.

It is hornbook law that ideas are not copyrightable, only an author’s
individual expression of those ideas. But what qualiﬁes as an ”idea”
can only be learned by seeing what courts treat as one. Sometimes
”idea” refers to the general creative concept for a work, as distinguished
from its more speciﬁc details. Sometimes ”idea” is used as a synecdoche for other § 102(b) exclusions – ”procedure, process, system,
method of operation” – that describe functional ma er in a work. In
addition, two closely related doctrines – merger and scènes à faire –
help implement these exclusions.
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Appellant Gary Blehm brought this copyright infringement action
against brothers Albert and John Jacobs and the Life is Good Company (collectively ”Life is Good”). Mr. Blehm is the creator of copyrighted posters featuring cartoon characters called ”Penmen.” He
contends that numerous Life is Good depictions of a cartoon character called ”Jake” infringe on his copyrighted works. The district
court granted Life is Good’s motion for summary judgment, holding
that no infringement occurred because the copyrighted and accused
works are not substantially similar.
I. B
Mr. Blehm is a commercial artist who lives in Colorado Springs, Colorado. In the late 1980s, he developed characters called ”Penmen.”
According to Mr. Blehm, each Penman is ”a deceptively-simple looking ﬁgure” that ”engages in a variety of activities pulled directly from
his colorful life experiences.” The Penmen have ”round heads, disproportionately large half-moon smiles, four ﬁngers, large feet, disproportionately long legs, and a message of unbridled optimism.”
The Penmen are a product of Mr. Blehm’s commercial art training.
Through his training, Mr. Blehm learned how to ”add a slight bend
to a ﬁgure’s limb to show weight bearing into it” and how, as he puts
it, to apply negative space. Eventually, Mr. Blehm developed rules
and guidelines for drawing each Penman. These rules and guidelines
include a speciﬁc shape for each Penman’s head, speciﬁc length and
height requirements for each character, rules on ﬂuidity and perspective, and the ”Penmen parallel curve,” which Mr. Blehm employs to
”create eye-pleasing shapes within the negative space.”
In 1990, Mr. Blehm began selling his posters to distributors. From
1990 to 2004, Prints Plus sold his posters nationally.
Starting in 1989, the Jacobs brothers designed and sold t-shirts
”infused with a positive undertone as a reﬂection of their beliefs.”
The brothers sold t-shirts in areas around Boston, including Harvard
Square, not far from the Harvard Coop. During the 1993 holiday season, the Jacobses sold t-shirts from carts in the Cambridgeside Galleria and the Emerald Square Mall, both of which had Prints Plus stores
that sold Mr. Blehm’s posters.
According to the Jacobses, around April 1994 John Jacobs drew a
sketch of a ﬁgure with a red face, wide smile, sunglasses, and a beret.
The ﬁgure was enclosed in two circles. John hung the sketch on the
wall of the brothers’ apartment.
The Jacobses recall hosting a party in August 1994 at their apartment and soliciting feedback on the sketch from their friends. After a
friend stated that the ﬁgure in the sketch ”really has life ﬁgured out,”
John Jacobs wrote ”Life is good” under the image. They named the
image ”Jake,” a spinoﬀ of their last name.

" 46#+&$5 ."55&3

The Jacobses soon made and sold t-shirts featuring Jake at street
fairs and to retailers. As demand for the shirts increased, John Jacobs
added a torso, arms, and feet to the Jake head. Jake was portrayed engaging in simple activities, such as biking, hiking, golﬁng, and playing soccer.
The Jacobses incorporated Life is Good in 1997 with the ”overarching themes of optimism, simplicity, humor, and humility.”
II. D
A. Substantial Similarity
1. Legal Framework
In order to prove copying of legally protectable material, a plaintiﬀ must typically show substantial similarity between legally [protectable] elements of the original work and the allegedly infringing
work. This commonly stated rule raises two questions: First, what
elements of a copyrighted work are legally protectable? Second,
how do courts determine whether a copyrighted work’s legally protectable elements are ”substantially similar” to an accused work?
Section 102(a) of the Copyright Act states that a copyright protects
the ”original works of authorship ﬁxed in any tangible medium of expression,” including pictorial and graphic works. 17 U.S.C. S 102(a).
To gain protection, the work must demonstrate at least some minimal
degree of creativity, but even a slight amount will suﬃce. The vast
majority of works make the grade quite easily, as they possess some
creative spark, no ma er how crude, humble or obvious it might be.
But legal protection does not extend to all aspects of a copyrighted
work. Section 102(b) provides, ”In no case does copyright protection
... extend to any idea ... [or] concept ... regardless of the form in which
it is described, explained, illustrated, or embodied in such work.” 17
U.S.C. S 102(b). This provision enshrines the fundamental tenet that
copyright protection extends only to the author’s original expression
and not to the ideas embodied in that expression.
Thus, courts comparing works must ﬁrst distill the protectable elements of the copyrighted work – i.e., determine what aspects constitute protectable expression. But this process, although sound in theory, is diﬃcult to apply in practice. More than 50 years ago, Judge
Learned Hand recognized that ”[t]he test for infringement of a copyright is of necessity vague.” Peter Pan Fabrics, Inc. v. Martin Weiner
Corp.. Because ”no principle can be stated as to when an imitator has
gone beyond copying the ’idea,’ and has borrowed its ’expression[,]’
[d]ecisions must therefore inevitably be ad hoc.” Id.We follow this
case-by-case approach, and are mindful that copyright law seeks to
achieve a proper balance between competition based on public ideas

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and incentive to produce original work.
Because the idea/expression distinction is the most complex part
of the substantial similarity inquiry, we discuss a few examples
where courts have separated the two. In Country Kids ’N City Slicks,
Inc. v. Sheen, this court held that copyright protection did not ”extend to the size, shape and medium” of wooden dolls. We explained
that the Copyright Act is concerned with artistic innovation and excludes protection for a work’s ”utilitarian qualities.” The idea of a
wooden doll is not copyrightable, nor are ”any basic and utilitarian
aspects of the dolls, such as the shape of a human body and standard
doll poses which are both friendly and inviting and also utilitarian in
their ease of manufacture and adaptability to the a achment of various wardrobes.”
Similarly, a copyright owner has no monopoly over the idea of
fashion dolls with a bra y look or a itude, or dolls sporting trendy
clothing. Nor does copyright protection extend to the idea of creating
a doll with an upturned nose, bow lips, and widely spaced eyes, even
if the allegedly infringing work has explicitly taken this idea from the
copyrighted work.
Copyright instead protects the particularized expression of the
idea of a doll with such features. For example, although a copyright
owner has no monopoly over the idea of a muscular doll in a standard pose, the owner may have a valid infringement claim for copying of the particularized expression of that idea, such as the decision
to accentuate certain muscle groups relative to others. A copyright
owner’s original stylistic choices qualify as protectable expression if
the choices are not dictated by the underlying idea. See Alio i v. R.
Dakin & Co. (stuﬀed dinosaur toys cannot be substantially similar because of shared physiognomy, but a distinctive ”eye style and stitching” could qualify as protectable expression if they are ”not dictated
by the idea of stuﬀed dinosaur dolls”).
In architecture, there is no copyright protection for the idea of
using domes, wind-towers, parapets and arches.” Sturdza v. United
Arab Emirates. ”To hold otherwise would render basic architectural
elements unavailable to architects generally, thus running afoul of
the very purpose of the idea/expression distinction: promoting incentives for authors to produce original work while protecting society’s
interest in the free ﬂow of ideas.” On the other hand, the combination of common architectural elements and use of speciﬁc designs
may constitute original expression that is protected. An architectural
design may infringe if its use of public-domain elements gives oﬀ
a similar unique eﬀect in decoration and design as the copyrighted
work.
Thus, a sweater designer can have copyright protection over an
original way of using squirrels as a design element in conjunction

" 46#+&$5 ."55&3

with fall colors, stripes, and panels, even though those elements individually constitute ideas in the public domain. See Knitwaves, Inc. v.
Lollytogs Ltd.. A plaintiﬀ’s ”selective and particularized” alterations
of a public-domain carpet pa ern also can constitute protectable expression. Tufenkian Imp./Exp. Ventures, Inc. v. Einstein Moomjy, Inc..

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2. Comparing the Penmen and Jake Images
The district court was correct that Mr. Blehm has no copyright over
the idea of a cartoon ﬁgure holding a birthday cake, catching a Frisbee, skateboarding, or engaging in various other everyday activities.
Nor can the Jake images infringe on the Penmen because the ﬁgures
share the idea of using common anatomical features such as arms,
legs, faces, and ﬁngers, which are not protectable elements. See Baby
Buddies, Inc. v. Toys ”R” Us, Inc.. (no copyright protection over common anatomical features of teddy bear). Mr. Blehm’s copyright also
does not protect Penmen poses that are a ributable to an associated
activity, such as reclining while taking a bath or lounging in an inner
tube. These everyday activities, common anatomical features, and
natural poses are ideas that belong to the public domain; Mr. Blehm
does not own these elements.
Although we do not consider these unprotected elements in our
substantial similarity analysis, we acknowledge that Mr. Blehm’s
works do contain some protectable expression. The Penmen at ﬁrst
glance might be considered simple stick ﬁgures, but they are more
nuanced than a child’s rudimentary doodling. For example, the prototypical Penman has a rounded, half-moon smile that takes up a substantial portion of the face. Mr. Blehm has chosen to omit any other
facial features on the Penmen. Each ﬁgure is ﬁlled in black, except for
the white half-moon smile, and each Penman’s head is detached, hovering above the body. Many of the Penmen stand facing the viewer,
ﬂashing the half-moon smile.
Mr. Blehm also drew the Penmen according to his own rules and
guidelines. The ﬁgure’s head might be perceived as slightly disproportional to the body. Its arms and legs are thin, long, and disproportionate to the torso, which is relatively short. Mr. Blehm also chose to
give the Penmen four ﬁngers – each about as thick as their arms and
legs – on each hand, as well as feet that are disproportionately long
and thick compared with the rest of the body.
Having identiﬁed protectable expression in Mr. Blehm’s drawings, we must determine whether that expression is substantially similar to the allegedly infringing Life is Good images. Life is Good is not
entitled to summary judgment unless its Jake ﬁgures are so dissimilar
from the protectable elements of the Penmen that no reasonable jury
could ﬁnd for Mr. Blehm on the question of substantial similarity.
To show substantial similarity, Mr. Blehm provided the district

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court with an exhibit juxtaposing 67 individual Penmen with a corresponding, allegedly infringing Jake image. We have reviewed these
images and agree with the district court’s grant of summary judgment in favor of Life is Good. We now address two of Mr. Blehm’s
proposed comparisons, which he highlights in his appellate brief,
and explain why the Life is Good images are so dissimilar from the
protectable elements of Mr. Blehm’s images that no reasonable jury
could ﬁnd in his favor.
a. The Peace Sign Images

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The ﬁrst example in Mr. Blehm’s exhibit juxtaposes a Penman and
Jake image standing and displaying the peace sign. Because we must
separate unprotected ideas from expression, our analysis does not
consider that both drawings share the idea of a cartoon ﬁgure making
a common hand gesture. But we do consider whether the Jake image
is substantially similar to Mr. Blehm’s expression of this idea.
Mr. Blehm urges us to ﬁnd certain similarities between the images. He notes that both have round heads. But Mr. Blehm has no
copyright protection in general human features. Further, the ﬁgures’
heads are not similarly round. Jake’s head is more oval and somewhat misshapen, whereas the Penman’s head is circular and uniform.
Mr. Blehm suggests that the ﬁgures have similar proportions,
such as the size of the ﬁgures’ heads, arms, legs, and feet compared
with their bodies. A close review of the ﬁgures, however, yields the
opposite conclusion. Jake’s head is very large compared with the
body, while the Penman’s head is relatively proportional. The Penman’s arms and legs are long and disproportionate to its truncated
torso. Jake, on the other hand, has more proportional limbs compared with his torso. The ﬁgures’ feet are distinctly diﬀerent: the
Penman’s are thick, long, and roll-shaped, but Jake’s are shorter and
triangular.
Nevertheless, there are some similarities between the Penman and
Jake. Both have black-line bodies, four ﬁngers, and large half-moon
smiles, and their feet are pointed outward. But even these similarities
have important diﬀerences, or are not protectable expression. For
example, Jake’s ﬁngers appear stubbier. The choice to display the
ﬁgures’ feet outward also naturally ﬂows from the common idea of
drawing a two-dimensional stick ﬁgure and is thus unprotected.
The ﬁgures’ smiles thus seem to be the crux of this litigation. The
Penman and Jake both face the viewer with disproportionately large
half-moon smiles. A smile can be drawn in various ways. Here, they
share a crescent shape, but the idea of a crescent-shaped smile is unprotected. Rather, the expression of the smiles must be substantially
similar and important to the overall work.
The Penman’s smile is all white, as is Jake’s. The smiles on both

" 46#+&$5 ."55&3

ﬁgures take up a large portion of the head. But the Penman’s smile
is rounded on the tips, whereas the tips of Jake’s smile are sharper
angled. Jake’s smile, by virtue of the size of his head, is much larger
compared with his body than is the Penman’s. And although both
smiles are white, the Penman’s is set on an all-black head, making it
appear diﬀerent from Jake’s, which is the outline of a smile on a white
head with black sunglasses.
Indeed, Mr. Blehm’s decision to omit eyes and other facial features on the Penman makes the ﬁgure susceptible to an interpretation
that the Penman is not smiling at all. One interpretation is that the
white space on the head is not a smile, but is the Penman’s face with
no features. The black above the half-moon shape can be perceived
as hair swooping down over the Penman’s forehead. Thus, the Penman’s lack of facial features make it susceptible to diﬀerent interpretations. The Jake ﬁgure is not susceptible to similar confusion.
Any similarity between smiles also is insubstantial in light of other
diﬀerences between the ﬁgures. Jake’s head is a ached to the body,
and his head is white and has black sunglasses. The Penman’s head is
detached and is black with no eyes. Jake sports a beret, and his whole
ﬁgure is displayed on a color background, whereas the Penman has
no headwear and is portrayed against a plain white background.
The Jake image’s arms are positioned diﬀerently from the Penman, with Jake’s left arm curved, rather than sharp and angular. Mr.
Blehm also chose a unique feature for the Penman’s peace-sign expression – white space in the ﬁgure’s hand – that the Jake image does
not share.
We conclude that no reasonable juror could determine that the
Jake ﬁgure is substantially similar to the protected, expressive choices
Mr. Blehm used for the Penman ﬁgure.

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b. The Frisbee Images
In another example, a Penman and Jake a empt to catch Frisbees between their legs. The two ﬁgures’ poses are similar – suspended in
the air with legs outstretched and a hand descending to catch the disc
– but we do not consider the pose in our analysis. Such a pose is common to this activity and is not protected expression. Again, the ﬁgures have large, half-moon smiles. And unlike the ”peace sign” Jake,
this Jake image has legs that are disproportionate to a truncated torso.
The Penman’s legs also are long with respect to the torso, but not as
disproportionate as Jake’s.
Jake’s legs are curved, but the Penman’s are straightened. The
Jake image’s head diﬀers in the same important ways as in the ”peace
sign” images. Jake’s arms appear to extend from his head, but the
Penman’s arms a ach to the top of the torso. Jake’s torso is much
thinner (and disproportionately shorter) than the Penman’s; Jake has

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three ﬁngers on each hand (not four); and the Jake image, unlike the
Penman image, incorporates color on the canvas and disc. Jake’s feet
are deﬁned – toes and arches are visible – but the Penman’s are not.
Although the images share a similar idea of catching a Frisbee between the legs, the protectable expression in the Penman is not substantially similar to the Jake image.
c. Other Images
Mr. Blehm highlights 65 other Penmen as having been copied. Attached to this opinion is the ”Penmen-Jake Chart” Mr. Blehm submitted to the district court in an eﬀort to demonstrate substantial similarity.
We have reviewed these images, and an analysis similar to the
discussion above applies.
Copying alone is not infringement. The infringement determination depends on what is copied. Assuming Life is Good copied Penmen images when it produced Jake images, our substantial similarity
analysis shows it copied ideas rather than expression, which would
make Life is Good a copier but not an infringer under copyright law.
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In the district court, appellant proﬀered lists of speciﬁc alleged similarities in an a empt to prove fragmented literal similarity between
the book and the ﬁlm. None of these claims alters our conclusion that
the district court properly held that as a ma er of law no substantial
similarity exists between the protectible elements of the works. For
example, appellant notes that both the book and the ﬁlm depict cockﬁghts, drunks, stripped cars, prostitutes and rats; both feature as central characters third- or fourth-generation Irish policemen who live in
Queens and frequently drink; both show disgruntled, demoralized
police oﬃcers and unsuccessful foot chases of ﬂeeing criminals.
These similarities, however, relate to uncopyrightable material.
Elements such as drunks, prostitutes, vermin and derelict cars would
appear in any realistic work about the work of policemen in the South
Bronx. These similarities therefore are unprotectible as “scènes à
faire,” that is, scenes that necessarily result from the choice of a se ing
or situation. Neither does copyright protection extend to copyright or
“stock” themes commonly linked to a particular genre. Foot chases
and the morale problems of policemen, not to mention the familiar
ﬁgure of the Irish cop, are venerable and often-recurring themes of
police ﬁction. As such, they are not copyrightable except to the extent they are given unique – and therefore protectible – expression in
an original creation.

" 46#+&$5 ."55&3

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Consider this photograph and stained glass image of hula dancers.
The dancers’ pose (kneeling, with right arm extended, etc.) is traditional. So is their dress (including the lei, etc.). Does the stained glass
infringe on the photograph? Are there further facts it would be helpful to know?
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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 bookkeeping. 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 book or series of books of which the complainant claims the
copyright consists of an introductory essay explaining the system
of book-keeping 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 account-book. 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 la er merely
as an explanatory work; or that he has infringed Selden’s right in any
way, unless the la er became entitled to an exclusive right in the system.

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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.
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-ma er. 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 le ers-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 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

" 46#+&$5 ."55&3

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 bookkeeping, 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 conclusion to which we have come is, that blank accountbooks 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.
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We must decide whether a sequence of twenty-six yoga poses and
two breathing exercises developed by Bikram Choudhury and described in his 1979 book, B
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, is entitled
to copyright protection.
In 1971, Bikram Choudhury, the self-proclaimed ”Yogi to the
stars,” arrived in Beverly Hills, California. He soon became a central
ﬁgure in the growing popularity of yoga in the United States. Choudhury developed a sequence of twenty-six asanas and two breathing exercises, arranged in a particular order, which he calls the ”Sequence.” Choudhury opened his own studio, where he began oﬀering ”Bikram Yoga” classes. In a Bikram Yoga class, the Sequence is
practiced over the course of ninety minutes, to a series of instructions
(the ”Dialogue”), in a room heated to 105 degrees Fahrenheit to simulate Choudhury’s native Indian climate.
Evolation Yoga oﬀers several types and styles of yoga, including ”hot yoga,” which is similar to ”Bikram’s Basic Yoga System.”
Evolation acknowledges that hot yoga ”includes 26 postures and two
breathing exercises and is done for 90 minutes, accompanied by a series of oral instructions, in a room heated to approximately 105 degrees Fahrenheit.” [Choudhury sued.]
Though Choudhury emphasizes the aesthetic a ributes of the Sequence’s ”graceful ﬂow,” at bo om, the Sequence is an idea, process,
or system designed to improve health. Copyright protects only the
expression of this idea – the words and pictures used to describe the
Sequence – and not the idea of the Sequence itself.
A. The Sequence Is an Unprotectable Idea.

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Following Baker, and recognizing this vital distinction between ideas
and expression, courts have routinely held that the copyright for a
work describing how to perform a process does not extend to the process itself. In Palmer v. Braun, for example, the Eleventh Circuit held
that meditation exercises described in a copyrighted manual on exploring the consciousness were ”a process” unentitled to copyright
protection. The court explained that the ”exercises, while undoubtedly the product of much time and eﬀort, are, at bo om, simply a
process for achieving increased consciousness. Such processes, even
if original, cannot be protected by copyright.”
As Choudhury describes it, the Sequence is a ”system” or a
”method” designed to ”systematically work every part of the body,
to give all internal organs, all the veins, all the ligaments, and all the
muscles everything they need to maintain optimum health and maximum function. An essential element of this ”system” is the order in
which the yoga poses and breathing exercises are arranged. B
’

" 46#+&$5 ."55&3

B
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instructs readers, ”Do the poses in the strict
order given in this book. Nothing about Bikram’s Beginning Yoga
Class is haphazard. It is designed to scientiﬁcally warm and stretch
muscles, ligaments, and tendons in the order in which they should
be stretched.” For instance, Choudhury explains, ”Camel Pose (Ustrasana) stretches the abdomen and compresses the spine; so for the
next posture, I chose the Rabbit Pose (Sasangasana), which does the
converse: stretches the back and compresses the abdomen.”
Choudhury contends that the Sequence’s arrangement of postures is ”particularly beautiful and graceful.” But beauty is not a basis
for copyright protection. The performance of many ideas, systems,
or processes may be beautiful: a surgeon’s intricate movements, a
book-keeper’s careful notations, or a baker’s kneading might each
possess a certain grace for at least some viewers. Indeed, from Vermeer’s milkmaid to Lewis Hine’s power house mechanic, the individual engrossed in a process has long a racted artistic a ention. But
the beauty of the process does not permit one who describes it to
gain, through copyright, the monopolistic power to exclude all others
from practicing it. This is true even where, as here, the process was
conceived with at least some aesthetic considerations in mind. Just
as some steps in a recipe may reﬂect no more than the author’s belief
that a particular ingredient is beautiful or that a particular cooking
technique is impressive to watch and empowering to practice, some
elements in Choudhury’s Sequence may reﬂect his aesthetic preferences. Yet just like the recipe, the Sequence remains unprotectable as
a process the design of which primarily reﬂects function, not expression.

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B. The Sequence Is Not a Copyrightable Compilation.
By claiming copyright protection for the Sequence as a compilation,
Choudhury misconstrues the scope of copyright protection for compilations. As we have explained, the Sequence is an idea, process, or
system; therefore, it is not eligible for copyright protection. That the
Sequence may possess many constituent parts does not transform it
into a proper subject of copyright protection. Virtually any process
or system could be dissected in a similar fashion. Baker’s examples
of ”how-to” treatises are instructive: ”A treatise on the construction
and use of ploughs, or watches, or churns, or on the mode of drawing
lines to produce the eﬀect of perspective” would likely list the steps
necessary to perform the process it describes. The watchmaking treatise’s author could not claim a copyright in the process of making a
watch, however, by breaking down the process into multiple steps
and labeling it a ”compilation.” Likewise, Choudhury cannot obtain
copyright protection for the Sequence as a compilation by separately
identifying the poses and breathing exercises it contains.

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Moreover, according to Choudhury himself, the medical and functional considerations at the heart of the Sequence compel the very selection and arrangement of poses and breathing exercises for which
he claims copyright protection. According to Bikram’s Beginning
Yoga Class, the ”strict order” of the poses ”is designed to scientiﬁcally warm and stretch muscles, ligaments, and tendons in the order
in which they should be stretched.” Read in the light most favorable
to Choudhury, the record demonstrates that the overarching reason
for the organization of the poses and breathing exercises in the Sequence is to further the basic goals of the method: to a ain ”[p]roper
weight, muscle tone, glowing complexion, boundless energy, vibrant
good health, and a sense of well-being.” The Sequence’s composition
renders it more eﬀective as a process or system, but not any more
suitable for copyright protection as an original work of authorship.
It makes no diﬀerence that similar results could be achieved
through a diﬀerent organization of yoga poses and breathing exercises. Choudhury argues that he could have chosen from ”hundreds
of postures” and ”countless arrangements of these postures” in developing the Sequence. But the possibility of a aining a particular
end through multiple diﬀerent methods does not render the uncopyrightable a proper subject of copyright. See ATC Distribution Group,
Inc. v. Whatever It Takes Transmissions & Parts, Inc. (”To be sure, the
publisher of a catalog describing a transmission parts numbering system could have arranged the parts information in other ways that
were potentially less clear or useful, but this fact alone is insuﬃcient
to demonstrate the creativity necessary for copyright protection.”).
Though it may be one of many possible yoga sequences capable of
a aining similar results, the Sequence is nevertheless a process and
is therefore ineligible for copyright protection.
C. The Sequence Is Not a Copyrightable Choreographic Work.

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The Sequence is not copyrightable as a choreographic work for the
same reason that it is not copyrightable as a compilation: it is an idea,
process, or system to which copyright protection may ”in no case”
extend. We recognize that the Sequence may involve ”static and kinetic successions of bodily movement in certain rhythmic and spatial relationships.”. So too would a method to churn bu er or drill
for oil. That is no accident: ”successions of bodily movement” often serve basic functional purposes. Such movements do not become
copyrightable as ”choreographic works” when they are part and parcel of a process. Even if the Sequence could ﬁt within some colloquial
deﬁnitions of dance or choreography, it remains a process ineligible
for copyright protection.
Our day-to-day lives consist of many routinized physical movements, from brushing one’s teeth to pushing a lawnmower to shaking

" 46#+&$5 ."55&3

a Polaroid picture, that could be (and, in two of the preceding examples, have been) characterized as forms of dance. Without a proper
understanding of the idea/expression dichotomy, one might obtain
monopoly rights over these functional physical sequences by describing them in a tangible medium of expression and labeling them choreographic works.

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IV. C
Although there is no cause to dispute the many health, ﬁtness, spiritual, and aesthetic beneﬁts of yoga, and Bikram Yoga in particular,
they do not bring the Sequence into the realm of copyright protection.
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Some ideas admit of only a limited number of expressions. When
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. See, e.g., Herbert Rosenthal Jewelry Corp. v. Kalpakian
(idea and expression of copyrighted “jeweled bee pin” inseparable
and thus copying not prohibited); Morrissey v. Proctor & Gamble
Co. (since few ways to express rules for “sweepstakes,” no infringement although defendant’s rules only slightly diﬀerent from plaintiﬀ’s rules).7 When the idea and its expression are not completely
inseparable, there may still be only a limited number of ways of expressing the idea. In such a case, the burden of proof is heavy on the
plaintiﬀ who may have to show “near identity” between the works
at issue. This showing is necessary because, as idea and expression
merge, fewer and fewer aspects of a work embody a unique and creative expression of the idea; a copyright holder must then prove substantial similarity to those few aspects of the work that are expression
not required by the idea. …

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Missy Lapine is the author of T
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(published
2007), which “presents over 75 recipes that ingeniously disguise the
most important superfoods inside kids’ favorite meals.” Jessica Seinfeld is the author of D
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(published 2008), which “is ﬁlled with
7

The rationale for this rule, as Judge Aldrich stated, is that “to permit copyrighting [in that case] would mean that a party or parties, by copyrighting a mere
handful of forms [of expression], could exhaust all possibilities of future use of the
substance ... [and thus] the subject ma er would be appropriated by permi ing the
copyrighting of its expression. We cannot recognize copyright as a game of chess
in which the public can be checkmated.”

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traditional recipes that kids love, except they’re stealthily packed
with veggies hidden in them so kids don’t even know!” Infringement? Are there further facts it would be helpful to know?

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Borrowed the work must indeed not be, for a plagiarist is not himself
pro tanto an “author”; but if by some magic a man who had never
known it were to compose anew Keats’s Ode on a Grecian Urn, he
would be an “author,” and, if he copyrighted it, others might not copy
that poem, though they might of course copy Keats’s.

Because of this rule permi ing multiple independent creation, copyright (like trade secret) does not need complicated priority doctrines,
as patent and trademark do. The price paid for simplicity here,
though, is that copyright (like trade secret) must include proof of
copying from the plaintiﬀ as part of its infringement analysis.
Two kinds of issues about initial copyright ownership do arise
with some regularity. First, there is the problem of whether certain
kinds of allegedly ”creative” processes should be regarded as resulting in copyrightable authorship at all. Second, there is the problem of dividing up ownership among multiple parties who do contribute authorship. Copyright slices this problem up along two dimensions: contemporaneous collaborations are addressed as joint
works or works made for hire, whereas sequential creation is analyzed in terms of derivative works.

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 64
The suit was commenced by an action at law in which Sarony was
plaintiﬀ and the lithographic company was defendant, the plaintiﬀ
charging the defendant with violating his copyright in regard to a
photograph, the title of which is “Oscar Wilde No. 18.” A jury being
waived, the court made a ﬁnding of facts on which a judgment in
favor of the plaintiﬀ was rendered for the sum of $600 for the plates
and 85,000 copies sold and exposed to sale, and $10 for copies found
in his possession.
The constitutional question is not free from diﬃculty.

# 08/&34)*1

The eighth section of the ﬁrst article of the Constitution is the great
repository of the powers of Congress, and by the eighth clause of that
section Congress is authorized:
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.
It is insisted in argument, that a photograph being a reproduction on
paper of the exact features of some natural object or of some person,
is not a writing of which the producer is the author.
[The Court reviewed early copyright statutes conferring copyright protection on maps, charts, designs, engravings, etchings, cuts,
and other prints.]
These statutes certainly answer the objection that books only, or
writing in the limited sense of a book and its author, are within the
constitutional provision. Both these words are susceptible of a more
enlarged deﬁnition than this. An author in that sense is “he to whom
anything owes its origin; originator; maker; one who completes a
work of science or literature.” W
. So, also, no one would
now claim that the word writing in this clause of the Constitution,
though the only word used as to subjects in regard to which authors
are to be secured, is limited to the actual script of the author, and excludes books and all other printed ma er. By writings in that clause
is meant the literary productions of those authors, and Congress very
properly has declared these to include all forms of writing, printing,
engraving, etching, &c., by which the ideas in the mind of the author
are given visible expression. The only reason why photographs were
not included in the extended list in the act of 1802 is probably that
they did not exist, as photography as an art was then unknown, and
the scientiﬁc principle on which it rests, and the chemicals and machinery by which it is operated, have all been discovered long since
that statute was enacted.
But it is said that an engraving, a painting, a print, does embody
the intellectual conception of its author, in which there is novelty, invention, originality, and therefore comes within the purpose of the
Constitution in securing its exclusive use or sale to its author, while
the photograph is the mere mechanical reproduction of the physical
features or outlines of some object animate or inanimate, and involves
no originality of thought or any novelty in the intellectual operation
connected with its visible reproduction in shape of a picture.
The third ﬁnding of facts says, in regard to the photograph in
question, that it is a “useful, new, harmonious, characteristic, and
graceful picture, and that plaintiﬀ made the same ... entirely from
his own original mental conception, to which he gave visible form by
posing the said Oscar Wilde in front of the camera, selecting and ar-

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ranging the costume, draperies, and other various accessories in said
photograph, arranging the subject so as to present graceful outlines,
arranging and disposing the light and shade, suggesting and evoking
the desired expression, and from such disposition, arrangement, or
representation, made entirely by plaintiﬀ, he produced the picture in
suit.”
These ﬁndings, we think, show this photograph to be an original
work of art, the product of plaintiﬀ’s intellectual invention, of which
plaintiﬀ is the author, and of a class of inventions for which the Constitution intended that Congress should secure to him the exclusive
right to use, publish and sell, as it has done by section 4952 of the
Revised Statutes.
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Nature photographer David Slater was traveling in Indonesia when
a monkey picked up his camera and pushed the shu er bu on, resulting in this photograph. Is it copyrightable? If so, who owns the
copyright?
Does it ma er whether Slater had chosen his camera’s se ings
(e.g., shu er speed, aperture, autofocus) for taking close-up daytime
outdoor wildlife photographs? If he was speciﬁcally trying to get
monkeys to pick up the camera and take selﬁes? If he took the photograph himself and then falsely passed it oﬀ as a monkey selﬁe?
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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.

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(a)

(b)

Initial Ownership. – Copyright in a work protected under this
title vests initially in the author or authors of the work. The
authors of a joint work are coowners of copyright in the work.
Works made for hire. – In the case of a work made for hire, the
employer or other person for whom the work was prepared is
considered the author for purposes of this title, and, unless the
parties have expressly agreed otherwise in a wri en instrument
signed by them, owns all of the rights comprised in the copy-

# 08/&34)*1

right.
A “joint work” is a work prepared by two or more authors with the
intention that their contributions be merged into inseparable or interdependent parts of a unitary whole.
A “work made for hire” is
(1) a work prepared by an employee within the scope of his or her
employment; or
(2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other
audiovisual work, as a translation, as a supplementary work,
as a compilation, as an instructional text, as a test, as answer
material for a test, or as an atlas, if the parties expressly agree
in a wri en instrument signed by them that the work shall be
considered a work made for hire.
Ownership of a copyright, or of any of the exclusive rights under a
copyright, is distinct from ownership of any material object in which
the work is embodied. Transfer of ownership of any material object,
including the copy or phonorecord in which the work is ﬁrst ﬁxed,
does not of itself convey any rights in the copyrighted work embodied in the object; nor, in the absence of an agreement, does transfer of
ownership of a copyright or of any exclusive rights under a copyright
convey property rights in any material object.
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Plaintiﬀ-appellant Lynn Thomson claims that, along with principal
playwright Jonathan Larson, she co-authored a “new version” of the
critically acclaimed Broadway musical Rent.
B
Rent, the Puli er Prize and Tony Award-winning Broadway modern
musical based on Puccini’s opera La Bohème, began in 1989 as the joint
project of Billy Aronson and composer Jonathan Larson. Aronson
and Larson collaborated on the work until their amicable separation
in 1991. At that time, Larson obtained Aronson’s permission to develop the play on his own.
In the summer of 1992, Larson’s Rent script was favorably received by James Nicola, Artistic Director of the New York Theatre
Workshop (“NYTW”), a non-proﬁt theater company in the East Village. Larson continued to develop and revise the “workshop version”
of his Rent script. In the spring of 1993, Nicola urged Larson to allow
the NYTW to hire a playwright or a bookwriter to help revamp the

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storyline and narrative structure of the play.
In May 1995, in preparation for Rent’s oﬀ-Broadway opening
scheduled for early 1996, Larson agreed to the NYTW’s hiring of
Lynn Thomson, a professor of advanced playwrighting at New York
University, as a dramaturg5 to assist him in clarifying the storyline of
the musical. Thomson signed a contract with the NYTW, in which she
agreed to provide her services with the workshop production from
May 1, 1995, through the press opening, scheduled for early February of 1996. The agreement stated that Thomson’s “responsibilities
shall include, but not be limited to: Providing dramaturgical assistance and research to the playwright and director.” In exchange, the
NYTW agreed to pay “a fee” of $2000, “[i]n full consideration of the
services to be rendered” and to provide for billing credit for Thomson as “Dramaturg.” The Thomson/NYTW agreement was silent as
to any copyright interests or any issue of ownership with respect to
the ﬁnal work.
In the summer and fall of 1995, Thomson and Larson worked extremely intensively together on the show. For the most part, the two
worked on the script alone in Larson’s apartment. Thomson testiﬁed
that revisions to the text of Rent didn’t begin until early August 1995.
Larson himself entered all changes directly onto his computer, where
he kept the script, and Thomson made no contemporaneous notes of
her speciﬁc contributions of language or other structural or thematic
suggestions. Thomson alludes to the “October Version” of Rent as
the culmination of her collaborative eﬀorts with Larson. That new
version was characterized by experts as “a radical transformation of
the show.”
A “sing-through” of the “October Version” of Rent took place in
early November 1995. And on November 3, 1995, Larson signed a
contract with the NYTW for ongoing revisions to Rent. This agreement identiﬁed Larson as the “Author” of Rent and made no reference to Thomson. The contract incorporated by reference an earlier
draft author’s agreement that set forth the terms that would apply if
the NYTW opted to produce Rent. The earlier draft author’s agreement gave Larson approval rights over all changes in text, provided
that any changes in text would become his property, and assured him
billing as “sole author.”
The ﬁnal dress rehearsal was held on January 24, 1996. Just hours
after it ended, Larson died suddenly of an aortic aneurysm. Over
the next few weeks, Nicola, Greif, Thomson, and musical director
5

Dramaturgs provide a range of services to playwrights and directors in connection with the production and development of theater pieces. According to Thomson’s testimony, the role of the dramaturg “can include any number of the elements
that go into the crafting of a play,” such as “actual plot elements, dramatic structure,
character details, themes, and even speciﬁc language.”

# 08/&34)*1

Tim Weil worked together to ﬁne-tune the script. The play opened
oﬀ-Broadway on February 13, 1996, to rave reviews. On February
23, Rent’s move to Broadway was announced. Since its opening on
Broadway on April 29, 1996, the show has been “an astounding critical, artistic, and commercial success.”
Before the Broadway opening, Thomson, in view of her contributions to Rent, sought compensation and title page dramaturgical
credit from the Broadway producers. And on April 2, 1996, she
signed a contract in which the producers agreed to pay her $10,000
plus a nominal $50/ week for her dramaturgical services. Around
the same time, upon the producers’ advice, Thomson approached Allan S. Larson, Nane e Larson, and Julie Larson McCollum (“Larson
Heirs”), the surviving members of Jonathan Larson’s family, to request a percentage of the royalties derived from the play. In a le er
to the Larson family, dated April 8, 1996, Thomson stated that she
believed Larson, had he lived, would have oﬀered her a “small percentage of his royalties to acknowledge the contribution I made.” In
reply, the Larson Heirs oﬀered Thomson a gift of 1% of the author’s
royalties. Negotiations between Thomson and the Larson Heirs, however, broke down.
After the parties failed to reach a se lement, Thomson brought
suit against the Larson Heirs, claiming that she was a co-author of
Rent and that she had never assigned, licensed, or otherwise transferred her rights. Thomson sought declaratory relief and a retroactive and on-going accounting under the Copyright Act. Speciﬁcally,
she asked that the court declare her a “co-author” of Rent and grant
her 16% of the author’s share of the royalties.11
T
’ C -A
C
The Copyright Act deﬁnes a “joint work” as “a work prepared by
two or more authors with the intention that their contributions be
merged into inseparable or interdependent parts of a unitary whole.”
17 U.S.C. § 101 (1994). The touchstone of the statutory deﬁnition is the
intention at the time the writing is done that the parts be absorbed or
combined into an integrated unit.
Joint authorship entitles the co-authors to equal undivided interests in the whole work – in other words, each joint author has the
11

Thomson claims that she seeks 16% of the proceeds “because of her respect for
Larson’s role as the principal creator of the work.” Thomson derives the 16% ﬁgure
in the following way: she alleges that 48% of the Rent script is new in relation to the
1994 Workshop version (prior to her involvement); as co-author, she is, therefore,
entitled to 50% of this part (or 24% of the total revenues); but since there are three
components to Rent (book, lyrics, and music) and she did not contribute to one
(music), she is entitled to 2/3, or 16% of the total revenues. Thomson also sought
the right to quote freely from various versions of Rent in a book that she planned
to write.

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right to use or to license the work as he or she wishes, subject only to
the obligation to account to the other joint owner for any proﬁts that
are made.
In Childress v. Taylor, our court interpreted this section of the Act
and set forth “standards for determining when a contributor to a
copyrighted work is entitled to be regarded as a joint author” where
the parties have failed to sign any wri en agreement dealing with
coauthorship. While the Copyright Act states only that co-authors
must intend that their contributions “be merged into ... a unitary
whole,” Judge Newman explained why a more stringent inquiry than
the statutory language would seem to suggest is required:
An inquiry so limited would extend joint author status
to many persons who are not likely to have been within
the contemplation of Congress. For example, a writer frequently works with an editor who makes numerous useful revisions to the ﬁrst draft, some of which will consist of
additions of copyrightable expression. Both intend their
contributions to be merged into inseparable parts of a unitary whole, yet very few editors and even fewer writers
would expect the editor to be accorded the status of joint
author, enjoying an undivided half interest in the copyright in the published work.
The potential danger of allowing anyone who makes even a minimal contribution to the writing of a work to be deemed a statutory
co-author – as long as the two parties intended the contributions to
merge — motivated the court to set forth a two-pronged test. A coauthorship claimant bears the burden of establishing that each of the
putative co-authors (1) made independently copyrightable contributions to the work; and (2) fully intended to be co-authors.
1. Independently Copyrightable Contributions
Childress held that collaboration alone is not suﬃcient to establish
joint authorship. Rather, the contribution of each joint author must
be independently copyrightable.
Without making speciﬁc ﬁndings as to any of Thomson’s claims
regarding lyrics or other contributions, the district court concluded
that Thomson “made at least some non-de minimis copyrightable
contribution,” and that Thomson’s contributions to the Rent libre o
were “certainly not zero.” Once having said that, the court decided the case on the second Childress prong – mutual intent of coauthorship. It hence did not reach the issue of the individual copyrightability of Thomson’s varied alleged contributions (plot developments, thematic elements, character details, and structural components).

# 08/&34)*1

2. Intent of the Parties

Childress mandates that the parties “entertain in their minds the concept of joint authorship.” This requirement of mutual intent recognizes that, since coauthors are aﬀorded equal rights in the coauthored
work, the “equal sharing of rights should be reserved for relationships in which all participants fully intend to be joint authors.”
Childress and its progeny, however, do not explicitly deﬁne the
nature of the necessary intent to be co-authors. The court stated that
“[i]n many instances, a useful test will be whether, in the absence of
contractual arrangements concerning listed authorship, each participant intended that all would be identiﬁed as co-authors.” But it is
also clear that the intention standard is not strictly subjective.
i. Decisionmaking Authority
An important indicator of authorship is a contributor’s decisionmaking authority over what changes are made and what is included in a
work. See, e.g., Erickson v. Trinity Theatre, Inc. (an actor’s suggestion of
text does not support a claim of co-authorship where the sole author
determined whether and where such contributions were included in
the work); Maruel v. Smith (claimant had a contractual right to control
the contents of the opera).
The district court determined that Larson “retained and intended
to retain at all times sole decision-making authority as to what went
into Rent.” In support of its conclusion, the court relied upon Thomson’s statement that she was “ﬂa ered that [Larson] was asking [her]
to contribute actual language to the text” and found that this statement demonstrated that even Thomson understood “that the question whether any contribution she might make would go into the
script was within Mr. Larson’s sole and complete discretion.” Moreover, as the court recognized, the November agreement between Larson and the NYTW expressly stated that Larson had ﬁnal approval
over all changes to Rent and that all such changes would become Larson’s property.

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ii. Billing
In discerning how parties viewed themselves in relation to a work,
Childress also deemed the way in which the parties bill or credit themselves to be signiﬁcant. As the district court noted, “billing or credit
is ... a window on the mind of the party who is responsible for
giving the billing or the credit.” And a writer’s a ribution of the
work to herself alone is “persuasive proof ... that she intended this
particular piece to represent her own individual authorship” and is
“prima facie proof that [the] work was not intended to be joint.” Weissmann v. Freeman Thomson claims that Larson’s decision to credit her

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as “dramaturg” on the ﬁnal page of Rent scripts reﬂected some coauthorship intent. Thomson concedes that she never sought equal
billing with Larson, but argues that she did not need to do so in order to be deemed a statutory co-author.
The district court found, instead, that the billing was unequivocal:
Every script brought to [the court’s] a ention says “Rent, by Jonathan
Larson.” In addition, Larson “described himself in the biography he
submi ed for the playbill in January 1996, nine days before he died,
as the author/composer, and listed Ms. Thomson on the same document as dramaturg.” And while, as Ms. Thomson argues, it may
indeed have been highly unusual for an author/composer to credit
his dramaturg with a byline, we fail to see how Larson’s decision to
style her as “dramaturg” on the ﬁnal page in Rent scripts reﬂects a
co-authorship intent on the part of Larson. The district court properly concluded that “the manner in which [Larson] listed credits on
the scripts strongly supports the view that he regarded himself as the
sole author.”
iii. Wri en Agreements with Third Parties
Just as the parties’ wri en agreements with each other can constitute evidence of whether the parties considered themselves to be coauthors, so the parties’ agreements with outsiders also can provide
insight into co-authorship intent, albeit to a somewhat more a enuated degree.
The district court found that Larson “listed himself or treated himself as the author in the November 1995 revisions contract that he
entered into with the NYTW, which in turn incorporated the earlier
draft author’s agreement that had not been signed.” That agreement
identiﬁes Larson as Rent’s “Author” and does not mention Thomson.
It also incorporates the terms of a September 1995 draft agreement
(termed “Author’s Agreement”) that states that Larson “shall receive
billing as sole author.” The district court commented, moreover, that
“[t]he fact that [Larson] felt free to enter into the November 1995 contract on his own, without the consent of and without any reference to
Ms. Thomson quite apart from whatever the terms of the agreements
are, indicates that his intention was to be the sole author.”
C
Based on all of the evidence, the district court concluded that “Mr.
Larson never regarded himself as a joint author with Ms. Thomson.”
We believe that the district court correctly applied the Childress standards to the evidence before it and hold that its ﬁnding that Larson
never intended co-authorship was not clearly erroneous.
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# 08/&34)*1

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Authors who create a joint work co-own the copyright in that work.
Joint authors share equal undivided interests in the whole work – in
other words, each joint author has the right to use or to license the
work as he or she wishes, subject only to the obligation to account to
the other joint author for any proﬁts that are made. Even if it is clear
that one co-author has contributed more to the work than another
co-author, they are nevertheless equal owners of the copyright in the
absence of an agreement to the contrary.
A co-owner must account to other co-owners for any proﬁts he
earns from licensing or use of the copyright. The duty to account
comes from equitable doctrines relating to unjust enrichment and
general principles of law governing the rights of co-owners. We acknowledge the theoretical appeal of the notion that if one owner permits free use of the copyright, that owner incurs a debt to his coowner because the use, paid-for or not, partially depletes the value of
the copyright. However, the duty to account is for proﬁts, not value.
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 64
I
In the fall of 1985, CCNV decided to participate in the annual Christmastime Pageant of Peace in Washington, D. C., by sponsoring a display to dramatize the plight of the homeless. As the District Court
recounted:
”Snyder and fellow CCNV members conceived the idea
for the nature of the display: a sculpture of a modern Nativity scene in which, in lieu of the traditional Holy Family,
the two adult ﬁgures and the infant would appear as contemporary homeless people huddled on a streetside steam
grate. The family was to be black (most of the homeless in
Washington being black); the ﬁgures were to be life-sized,
and the steam grate would be positioned atop a platform
‘pedestal,’ or base, within which special-eﬀects equipment
would be enclosed to emit simulated ‘steam’ through the
grid to swirl about the ﬁgures. They also se led upon a
title for the work – ‘Third World America’ – and a legend
for the pedestal: ‘and still there is no room at the inn.’ “
Snyder made inquiries to locate an artist to produce the sculpture.
He was referred to respondent James Earl Reid, a Baltimore, Maryland, sculptor. In the course of two telephone calls, Reid agreed to
sculpt the three human ﬁgures. CCNV agreed to make the steam
grate and pedestal for the statue. Reid proposed that the work be

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cast in bronze, at a total cost of approximately $100,000 and taking
six to eight months to complete. Snyder rejected that proposal because CCNV did not have suﬃcient funds, and because the statue
had to be completed by December 12 to be included in the pageant.
Reid then suggested, and Snyder agreed, that the sculpture would
be made of a material known as “Design Cast 62,” a synthetic substance that could meet CCNV’s monetary and time constraints, could
be tinted to resemble bronze, and could withstand the elements. The
parties agreed that the project would cost no more than $15,000, not
including Reid’s services, which he oﬀered to donate. The parties did
not sign a wri en agreement. Neither party mentioned copyright.
After Reid received an advance of $3,000, he made several
sketches of ﬁgures in various poses. At Snyder’s request, Reid sent
CCNV a sketch of a proposed sculpture showing the family in a
crechelike se ing: the mother seated, cradling a baby in her lap; the
father standing behind her, bending over her shoulder to touch the
baby’s foot. Reid testiﬁed that Snyder asked for the sketch to use
in raising funds for the sculpture. Snyder testiﬁed that it was also
for his approval. Reid sought a black family to serve as a model for
the sculpture. Upon Snyder’s suggestion, Reid visited a family living at CCNV’s Washington shelter but decided that only their newly
born child was a suitable model. While Reid was in Washington, Snyder took him to see homeless people living on the streets. Snyder
pointed out that they tended to recline on steam grates, rather than
sit or stand, in order to warm their bodies. From that time on, Reid’s
sketches contained only reclining ﬁgures.
Throughout November and the ﬁrst two weeks of December 1985,
Reid worked exclusively on the statue, assisted at various times by a
dozen diﬀerent people who were paid with funds provided in installments by CCNV. On a number of occasions, CCNV members visited
Reid to check on his progress and to coordinate CCNV’s construction of the base. CCNV rejected Reid’s proposal to use suitcases or
shopping bags to hold the family’s personal belongings, insisting instead on a shopping cart. Reid and CCNV members did not discuss
copyright ownership on any of these visits.
On December 24, 1985, 12 days after the agreed-upon date, Reid
delivered the completed statue to Washington. There it was joined
to the steam grate and pedestal prepared by CCNV and placed on
display near the site of the pageant. Snyder paid Reid the ﬁnal installment of the $15,000. The statue remained on display for a month.
In late January 1986, CCNV members returned it to Reid’s studio in
Baltimore for minor repairs. Several weeks later, Snyder began making plans to take the statue on a tour of several cities to raise money
for the homeless. Reid objected, contending that the Design Cast 62
material was not strong enough to withstand the ambitious itinerary.

# 08/&34)*1

He urged CCNV to cast the statue in bronze at a cost of $35,000, or
to create a master mold at a cost of $5,000. Snyder declined to spend
more of CCNV’s money on the project.
In March 1986, Snyder asked Reid to return the sculpture. Reid refused. He then ﬁled a certiﬁcate of copyright registration for “Third
World America” in his name and announced plans to take the sculpture on a more modest tour than the one CCNV had proposed. Snyder, acting in his capacity as CCNV’s trustee, immediately ﬁled a competing certiﬁcate of copyright registration.
Snyder and CCNV then commenced this action against Reid.
II
A
The Copyright Act of 1976 provides that copyright ownership “vests
initially in the author or authors of the work.” 17 U. S. C. § 201(a). As
a general rule, the author is the party who actually creates the work,
that is, the person who translates an idea into a ﬁxed, tangible expression entitled to copyright protection. § 102. The Act carves out an important exception, however, for “works made for hire.” If the work
is for hire, “the employer or other person for whom the work was
prepared is considered the author” and owns the copyright, unless
there is a wri en agreement to the contrary. § 201(b). Classifying a
work as “made for hire” determines not only the initial ownership of
its copyright, but also the copyright’s duration, § 302(c), and the owners’ renewal rights, § 304(a), termination rights, § 203(a), and right to
import certain goods bearing the copyright, § 601(b)(1). The contours
of the work for hire doctrine therefore carry profound signiﬁcance for
freelance creators – including artists, writers, photographers, designers, composers, and computer programmers – and for the publishing, advertising, music, and other industries which commission their
works.
The dispositive inquiry in this case therefore is whether “Third
World America” is “a work prepared by an employee within the
scope of his or her employment” under § 101(1). The Act does not
deﬁne these terms. In the absence of such guidance, four interpretations have emerged. The ﬁrst holds that a work is prepared by
an employee whenever the hiring party retains the right to control
the product. A second, and closely related, view is that a work is
prepared by an employee under § 101(1) when the hiring party has
actually wielded control with respect to the creation of a particular
work. A third view is that the term “employee” within § 101(1) carries its common-law agency law meaning. Finally, respondent and
numerous amici curiae contend that the term “employee” only refers
to “formal, salaried” employees.

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Nothing in the text of the work for hire provisions indicates that
Congress used the words “employee” and “employment” to describe
anything other than the conventional relation of employer and employe. On the contrary, Congress’ intent to incorporate the agency
law deﬁnition is suggested by § 101(1)’s use of the term, “scope of
employment,” a widely used term of art in agency law.
We therefore conclude that the language and structure of § 101
of the Act do not support either the right to control the product or
the actual control approaches.8 The structure of § 101 indicates that a
work for hire can arise through one of two mutually exclusive means,
one for employees and one for independent contractors, and ordinary
canons of statutory interpretation indicate that the classiﬁcation of a
particular hired party should be made with reference to agency law.
In sum, we must reject petitioners’ argument. Transforming a
commissioned work into a work by an employee on the basis of the
hiring party’s right to control, or actual control of, the work is inconsistent with the language, structure, and legislative history of the
work for hire provisions. To determine whether a work is for hire
under the Act, a court ﬁrst should ascertain, using principles of general common law of agency, whether the work was prepared by an
employee or an independent contractor. After making this determination, the court can apply the appropriate subsection of § 101.
B
We turn, ﬁnally, to an application of § 101 to Reid’s production of
“Third World America.” In determining whether a hired party is an
employee under the general common law of agency, we consider the
hiring party’s right to control the manner and means by which the
product is accomplished. Among the other factors relevant to this
inquiry are the skill required; the source of the instrumentalities and
tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign
additional projects to the hired party; the extent of the hired party’s
discretion over when and how long to work; the method of payment;
the hired party’s role in hiring and paying assistants; whether the
work is part of the regular business of the hiring party; whether the
8

We also reject the suggestion of respondent and amici that the term “employee” refers only to formal, salaried employees. The Act does not say “formal”
or “salaried” employee, but simply “employee.” Moreover, respondent and those
amici who endorse a formal, salaried employee test do not agree upon the content
of this test. Compare, e. g., Brief for Respondent 37 (hired party who is on payroll
is an employee) with Tr. of Oral Arg. 31 (hired party who receives a salary or commissions regularly is an employee); and Brief for Volunteer Lawyers for the Arts,
Inc., et al. as Amici Curiae 4 (hired party who receives a salary and is treated as an
employee for Social Security and tax purposes is an employee).

# 08/&34)*1

hiring party is in business; the provision of employee beneﬁts; and
the tax treatment of the hired party. No one of these factors is determinative.
Examining the circumstances of this case in light of these factors,
we agree with the Court of Appeals that Reid was not an employee
of CCNV but an independent contractor. True, CCNV members directed enough of Reid’s work to ensure that he produced a sculpture that met their speciﬁcations. But the extent of control the hiring
party exercises over the details of the product is not dispositive. Indeed, all the other circumstances weigh heavily against ﬁnding an
employment relationship. Reid is a sculptor, a skilled occupation.
Reid supplied his own tools. He worked in his own studio in Baltimore, making daily supervision of his activities from Washington
practicably impossible. Reid was retained for less than two months,
a relatively short period of time. During and after this time, CCNV
had no right to assign additional projects to Reid. Apart from the
deadline for completing the sculpture, Reid had absolute freedom to
decide when and how long to work. CCNV paid Reid $15,000, a sum
dependent on completion of a speciﬁc job, a method by which independent contractors are often compensated. Reid had total discretion
in hiring and paying assistants. Creating sculptures was hardly regular business for CCNV. Indeed, CCNV is not a business at all. Finally,
CCNV did not pay payroll or Social Security taxes, provide any employee beneﬁts, or contribute to unemployment insurance or workers’
compensation funds.
Because Reid was an independent contractor, whether “Third
World America” is a work for hire depends on whether it satisﬁes
the terms of § 101(2). This petitioners concede it cannot do. Thus,
CCNV is not the author of “Third World America” by virtue of the
work for hire provisions of the Act.
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Richard Warren claims that defendants infringed the copyrights in
musical compositions he created for use in the television series ”Remington Steele.”
The parties agree that Warren was not an employee of MTM, but
MTM contends that the agreements signed by the parties illustrate
an express agreement that the works in question were specially commissioned as works for hire.4 We agree.
4

Because the parties are not in an employer-employee relationship, the Copyright Act requires not only that the work be specially commissioned pursuant to
a wri en agreement, but that the work come within one of the enumerated categories listed in 17 U.S.C. § 101(2). There is no doubt that the works fall into one of
these categories because it is undisputed that they are part of an audiovisual work.

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The Act confers work-for-hire status on a work where ”the parties
expressly agree in a wri en instrument signed by them that the work
shall be considered a work made for hire.” The Music Employment
Agreement provided:
As [Warren’s] employer for hire, [MTM] shall own in perpetuity, throughout the universe, solely and exclusively,
all rights of every kind and character, in the musical material and all other results and proceeds of the services rendered by [Warren] hereunder and [MTM] shall be deemed
the author thereof for all purposes.
The parties later executed contracts almost identical to these ﬁrst
agreements in June 1984, July 1985, and November 1986. As the district court noted, these subsequent contracts are even more explicit
in deﬁning the compositions as ”works for hire.” Le ers that Warren
signed accompanying the later Music Employment Agreements provided: ”It is understood and agreed that you are supplying [your]
services to us as our employee for hire ... [and] [w]e shall own all
right, title and interest in and to [your] services and the results and
proceeds thereof, as works made for hire.”
That the agreements did not use the talismanic words ”specially
ordered or commissioned” ma ers not, for there is no requirement,
either in the Act or the caselaw, that work-for-hire contracts include
any speciﬁc wording.
That the works were created at the behest of MTM is conclusively
demonstrated by the plain language of the contracts. The contracts
speciﬁed that Warren was, among other things, to ”compose an original musical score ... mak[ing] such revisions in the musical material
as [MTM] may require,” and clearly indicate that such composing
was to be done for the sole purpose of the ”Remington Steele” program.
The agreements between Warren and MTM conclusively show
that the musical compositions created by Warren were created as
works for hire, and Warren is therefore not the legal owner of the
copyrights therein.
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In July 2011, Cindy Lee Garcia responded to a casting call for a ﬁlm
titled Desert Warrior, an action-adventure thriller set in ancient Arabia. Garcia was cast in a cameo role, for which she earned $500. She
received and reviewed a few pages of script. Acting under a professional director hired to oversee production, Garcia spoke two sentences: ”Is George crazy? Our daughter is but a child?” Her role was
to deliver those lines and to ”seem[] concerned.”

# 08/&34)*1

Garcia later discovered that writer-director Mark Basseley
Youssef (a.k.a. Nakoula Basseley Nakoula or Sam Bacile) had a different ﬁlm in mind: an anti-Islam polemic renamed Innocence of Muslims. The ﬁlm, featuring a crude production, depicts the Prophet Mohammed as, among other things, a murderer, pedophile, and homosexual. Film producers dubbed over Garcia’s lines and replaced them
with a voice asking, ”Is your Mohammed a child molester?” Garcia
appears on screen for only ﬁve seconds.
Almost a year after the casting call, in June 2012, Youssef uploaded a 13-minute-and-51-second trailer of Innocence of Muslims
to YouTube, the video-sharing website owned by Google, Inc., which
boasts a global audience of more than one billion visitors per month.
After it was translated into Arabic, the ﬁlm fomented outrage across
the Middle East, and media reports linked it to numerous violent
protests. An Egyptian cleric issued a fatwa against anyone associated with Innocence of Muslims, calling upon the ”Muslim Youth in
America[] and Europe” to ”kill the director, the producer[,] and the
actors and everyone who helped and promoted this ﬁlm.” Garcia received multiple death threats.
Legal wrangling ensued. Garcia asked Google to remove the ﬁlm,
asserting it was hate speech and violated her state law rights to privacy and to control her likeness. Garcia also sent Google ﬁve takedown notices under the Digital Millenium Copyright Act, 17 U.S.C.
§ 512, claiming that YouTube’s broadcast of Innocence of Muslims
infringed her copyright in her ”audio-visual dramatic performance.”
Google declined to remove the ﬁlm.
[Garcia sued Google and Youssef for copyright infringement.]
The central question is whether the law and facts clearly favor
Garcia’s claim to a copyright in her ﬁve-second acting performance as
it appears in Innocence of Muslims. The answer is no. This conclusion
does not mean that a plaintiﬀ like Garcia is without options or that
she couldn’t have sought an injunction against diﬀerent parties or on
other legal theories, like the right of publicity and defamation.5
Innocence of Muslims is an audiovisual work that is categorized as
a motion picture and is derivative of the script. Garcia is the author of
none of this and makes no copyright claim to the ﬁlm or to the script.
Instead, Garcia claims that her ﬁve-second performance itself merits
copyright protection.
Garcia’s theory of copyright law would result a legal morass –
splintering a movie into many diﬀerent ”works,” even in the absence of an independent ﬁxation. Simply put, as Google claimed, it
5

Down the road, Garcia also may have a contract claim. She recalls signing
some kind of document, though she cannot ﬁnd a copy. We take no position on
this claim.

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”make[s] Swiss cheese of copyrights.”
Take, for example, ﬁlms with a large cast—the proverbial ”cast of
thousands.” The silent epic Ben-Hur advertised a cast of 125,000 people. In the Lord of the Rings trilogy, 20,000 extras tramped around
Middle-Earth alongside Frodo Baggins (played by Elijah Wood).
Treating every acting performance as an independent work would
not only be a logistical and ﬁnancial nightmare, it would turn cast of
thousands into a new mantra: copyright of thousands.
The reality is that contracts and the work-made-for-hire doctrine
govern much of the big-budget Hollywood performance and production world. Absent these formalities, courts have looked to implied
licenses. Indeed, the district court found that Garcia granted Youssef
just such an implied license to incorporate her performance into the
ﬁlm. But these legal niceties do not necessarily dictate whether something is protected by copyright, and licensing has its limitations. As
ﬁlmmakers warn, low-budget ﬁlms rarely use licenses. Even if ﬁlmmakers diligently obtain licenses for everyone on set, the contracts
are not a panacea. Third-party content distributors, like YouTube
and Netﬂix, won’t have easy access to the licenses; litigants may dispute their terms and scope; and actors and other content contributors
can terminate licenses after thirty ﬁve years. Untangling the complex,
diﬃcult-to-access, and often phantom chain of title to tens, hundreds,
or even thousands of standalone copyrights is a task that could tie the
distribution chain in knots. And ﬁlming group scenes like a public
parade, or the 1963 March on Washington, would pose a huge burden if each of the thousands of marchers could claim an independent
copyright.

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Consider a twist on Aalmuhammed v. Lee:
Spike Lee assigns his copyright in Malcolm X to, let’s say, Warner
Brothers. Disney comes along and makes a cartoon version of the
movie called Malcolm ABC. Warner Brothers sues, claiming Malcolm
ABC infringes its copyright in Malcolm X. Disney responds that Aalmuhammed, not Spike Lee, wrote the scene chronicling the protagonist’s Hajj pilgrimage, which appears in both Malcolm X and Malcolm ABC. Warner Brothers, the argument goes, does not own the Hajj
scene, and so cannot recover for Disney’s copying of that piece of Malcolm X (nor for its copying of any scene, character, or other cinematic
element dreamed up by anyone not named Spike Lee).
Winning argument?
No, and it was a loser even before Garcia suggested that Aalmuhammed’s script of the Hajj scene was not independently copyrightable after all. The whole point of Aalmuhammed’s contributions

# 08/&34)*1

was to integrate them into Malcolm X, and so they must be understood
as parts of the movie to protect copyright in the movie. Copyright
in movies, comic books, and video games would be worthless otherwise.

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(a)

The subject ma er 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 such material has been used unlawfully.
(b) The copyright in a compilation or derivative work extends only
to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work,
and does not imply any exclusive right in the preexisting material. The copyright in such work is independent of, and does not
aﬀect or enlarge the scope, duration, ownership, or subsistence
of, any copyright protection in the preexisting material.
A “compilation” is 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. The term “compilation” includes collective works.
A “collective work” is a work, such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled
into a collective whole.
A “derivative work” is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, ﬁctionalization, motion picture version, sound recording, art
reproduction, abridgment, condensation, or any other form in which
a work may be recast, transformed, or adapted. A work consisting
of editorial revisions, annotations, elaborations, or other modiﬁcations, which, as a whole, represent an original work of authorship,
is a “derivative work”.
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that derivative work with respect to all of the elements that the derivative creator drew from the underlying work and employed in the
derivative work. By contrast, the creator of the derivative work has
a copyright only as to those original aspects of the work that the
derivative creator contributed, and only to the extent the derivative
creator’s contributions are more than trivial. Logically, therefore, if
[another] third party copies a derivative work without authorization,
it infringes the original copyright owner’s copyright in the underlying work to the extent the unauthorized copy of the derivative work
also copies the underlying work.

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The defendant, identiﬁed only as ”Prince” in the caption of the various pleadings, is a well-known popular singer whose name at birth
was Prince Rogers Nelson, but who for many years performed under the name Prince (which is what we’ll call him) and since 1992
has referred to himself by an unpronounceable symbol. The symbol (which rather strikingly resembles the Egyptian hieroglyph ankh,
but the parties make nothing of this, so neither shall we) is his trademark but it is also a copyrighted work of visual art that licensees of
Prince have embodied in various forms, including jewelry, clothing,
and musical instruments.
In 1993 the plaintiﬀ made a guitar in the shape of the Prince symbol; he concedes that it is a derivative work within the meaning of 17
U.S.C. § 101. The plaintiﬀ claims (truthfully, we assume for purposes
of the appeal) to have shown the guitar to Prince. Shortly afterwards
Prince appeared in public playing a guitar quite similar to the plaintiﬀ’s.
The plaintiﬀ brought this suit for copyright infringement in 1994,
but it languished for years in the district court. In January 1997 Prince
counterclaimed for infringement of the copyright on his symbol.
Picke claims the right to copyright a work derivative from another person’s copyright without that person’s permission and then
to sue that person for infringement by the person’s own derivative
work. Picke ’s guitar was a derivative work of the copyrighted
Prince symbol, and so was Prince’s guitar. Since Prince had (or so
we must assume) access to Picke ’s guitar, and since the two guitars, being derivatives of the same underlying work, are, naturally,
very similar in appearance, Picke has – if he is correct that one can
copyright a derivative work when the original work is copyrighted
by someone else who hasn’t authorized the maker of the derivative
work to copyright it – a prima facie case of infringement. Picke must,
he concedes, show that his derivative work has enough originality to
entitle him to a copyright, and also that the copyright is limited to the

# 08/&34)*1

features that the derivative work adds to the original. But he insists
that with these limitations his copyright is valid.
We need not pursue the issue of originality of derivative works.
The Copyright Act grants the owner of a copyright the exclusive right
to prepare derivative works based upon the copyrighted work. So
Picke could not make a derivative work based on the Prince symbol
without Prince’s authorization even if Picke ’s guitar had a smidgeon
of originality. This is a sensible result. A derivative work is, by definition, bound to be very similar to the original. Concentrating the
right to make derivative works in the owner of the original work prevents what might otherwise be an endless series of infringement suits
posing insoluble diﬃculties of proof. Consider two translations into
English of a book originally published in French. The two translations are bound to be very similar and it will be diﬃcult to establish
whether they are very similar because one is a copy of the other or because both are copies of the same foreign-language original. Whether
Prince’s guitar is a copy of his copyrighted symbol or a copy of Picke ’s guitar is likewise not a question that the methods of litigation
can readily answer with conﬁdence. If anyone can make derivative
works based on the Prince symbol, we could have hundreds of Picke s, each charging infringement by the others.
Picke relies for his implausible theory primarily on section 103(a)
of the Copyright Act, which provides that while copyright can be obtained in derivative works, ”protection for a work employing preexisting material in which copyright subsists does not extend to any
part of the work in which such material has been used unlawfully.”
Picke reads this as authorizing a person other than the owner of the
original work to make a derivative work, merely forbidding him to
infringe the original. It is very diﬃcult to see how a derivative work
not made by the owner of the original work could fail to infringe it,
given the deﬁnition of derivative works.
Picke relied in the district court on a dictum in Eden Toys, Inc.
v. Florelee Undergarment Co., that a stranger can make a derivative
work without the permission of the owner of the copyright of the
original work if the original work does not ”pervade” the derivative work. The suggestion, if taken seriously (which it has not been),
would inject enormous uncertainty into the law of copyright and undermine the exclusive right that section 106(2) gives the owner of
the copyright on the original work. It also rests on a confusion between the determination of whether a work is derivative and the determination of who has the right to make the derivative work. Deﬁned too broadly, ”derivative work” would confer enormous power
on the owners of copyrights on preexisting works. The BernsteinSondheim musical West Side Story, for example, is based loosely on
Shakespeare’s Romeo and Juliet, which in turn is based loosely on

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Ovid’s Pyramus and Thisbe, so that if ”derivative work” were deﬁned broadly enough (and copyright were perpetual) West Side Story
would infringe Pyramus and Thisbe unless authorized by Ovid’s
heirs. We can thus imagine the notion of pervasiveness being used
to distinguish a work fairly described as derivative from works only
loosely connected with some ancestral work claimed to be their original. In that sense Prince’s symbol clearly ”pervades” both guitars. If
it did not, the guitars might not be derivative works, but they would
not be derivative works that anyone was free to make without obtaining Prince’s permission.
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Plaintiﬀ–Appellee Jaime Keeling is the author of Point Break Live!
(“PBL”), a parody stage adaptation of the 1991 Hollywood action
movie Point Break, starring Keanu Reeves and Patrick Swayze. In
the ﬁlm, Reeves plays a rookie FBI agent who goes undercover to
inﬁltrate a gang of bank-robbing surfers led by Swayze’s character.
The Keeling-authored PBL parody parallels the characters and plot
elements from Point Break and relies almost exclusively on selected
dialogue from the screenplay. To this raw material, Keeling added
jokes, props, exaggerated staging, and humorous theatrical devices
to transform the dramatic plot and dialogue of the ﬁlm into an irreverent, interactive theatrical experience. For example, in Keeling’s PBL
parody, Point Break ’s death-defying scene in which Reeves’s character must pick up bricks, blindfolded, in a swimming pool takes place,
instead, in a kiddie pool. Massive waves in the ﬁlm are replaced by
squirt guns in the PBL parody. A central conceit of the PBL parody is
that the Keanu Reeves character is selected at random from the audience and reads his lines from cue cards, thereby lampooning Reeves’s
reputedly stilted performance in the movie. Keeling added to the effect that the audience was watching the making of the ﬁlm by creating a set of ﬁlm-production characters in the PBL parody, including
a director, cinematographer, and production assistants. Keeling possesses no copyright or license with regard to the Point Break motion
picture.
Defendant–Appellant Eve Hars owns production company New
Rock Theater Productions, LLC (“New Rock”). In 2007, Keeling executed a production agreement with Hars, pursuant to which New
Rock would stage a two-month production run of PBL from October
through December 2007. During that time period, Hars conferred
with an entertainment a orney and the holder of the copyright to the
Hollywood screenplay for Point Break, and eventually Hars came to
believe that Keeling did not lawfully own any rights to the PBL parody play. Accordingly, after its initial two-month run, Hars sought

$ 130$&%63&4

to renegotiate the terms of the contract upon its expiration and, in
eﬀect, continue to produce PBL without further payment to Keeling.
Keeling refused renegotiation, threatened suit, and registered a copyright in PBL, without ﬁrst obtaining permission from the copyright
holders of the original Point Break. Keeling’s asserted copyright in
PBL became eﬀective on January 4, 2008. Hars and New Rock continued to stage performances of PBL for four years thereafter without
payment to or authorization from Keeling.
If a work employs preexisting copyrighted material lawfully – as
in the case of a ”fair use” – nothing in the statute prohibits the extension of the ”independent” copyright protection promised by Section 103.7 A close reading of the statute therefore makes plain that an
unauthorized but lawful fair use employing preexisting copyrighted
material may itself merit copyright protection. It is not the invocation
of fair use that provides the work copyright protection, and perhaps
thinking so has created some confusion on the part of the defendant.
It is the originality of the derivative work that makes it protectable,
and fair use serves only to render lawful the derivative work, such
that it may acquire – as would other lawful derivative works – such
protection.

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Copyright, the statute tells us, subsists as soon as a work is created.
The author doesn’t need to do anything more to become a copyright
owner. But it was not always thus. And this is not to say that copyright has no procedural wrinkles – only that these procedures are not
preconditions on copyright protection.

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For most of our history, U.S. copyright law has included a system
of procedural mechanisms, referred to collectively as “copyright formalities,” that helped to maintain copyright’s traditional balance between providing private incentives to authors and preserving a robust stock of public domain works from which future creators could
draw. From the ﬁrst copyright statute in 1790, Congress required that
authors register their copyrights, give notice (by marking published
copies with an indication of copyright status such as the “©” symbol, as well as other information about copyright ownership), and
7

To be sure, the independent copyright protection in the new work is limited to
that work’s original content.

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(perhaps most importantly) renew their rights after a relatively short
initial term by reregistering their copyright. Failure to comply with
these requirements either terminated the copyright (in the case of
nonrenewal) or prevented it from arising in the ﬁrst place.
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The Estate of Martin Luther King, Jr., Inc. brought this copyright infringement action against CBS, Inc. after CBS produced a video documentary that used, without authorization, portions of civil rights
leader Dr. Martin Luther King’s famous ”I Have a Dream” speech at
the March on Washington on August 28, 1963.
On September 30, 1963, approximately one month after the delivery of the Speech, Dr. King took steps to secure federal copyright
protection for the Speech under the Copyright Act of 1909, and a
certiﬁcate of registration of his claim to copyright was issued by the
Copyright Oﬃce on October 2, 1963. Almost immediately thereafter,
Dr. King ﬁled suit in the Southern District of New York to enjoin the
unauthorized sale of recordings of the Speech and won a preliminary
injunction on December 13, 1963.
Because of the dates of the critical events, the determinative issues
in this case are properly analyzed under the Copyright Act of 1909
(”1909 Act”), rather than the Copyright Act of 1976 (”1976 Act”) that
is currently in eﬀect. The question is whether Dr. King’s a empt
to obtain statutory copyright protection on September 30, 1963 was
eﬀective, or whether it was a nullity because the Speech had already
been forfeited to the public domain via a general publication.
Under the regime created by the 1909 Act, an author received
state common law protection automatically at the time of creation
of a work. This state common law protection persisted until the moment of a general publication. When a general publication occurred,
the author either forfeited his work to the public domain, or, if he had
therebefore complied with federal statutory requirements, converted
his common law copyright into a federal statutory copyright.
In order to soften the hardship of the rule that publication destroys common law rights, courts developed a distinction between
a ”general publication” and a ”limited publication.” Only a general
publication divested a common law copyright. A general publication
occurred when a work was made available to members of the public
at large without regard to their identity or what they intended to do
with the work. Conversely, a non-divesting limited publication was
one that communicated the contents of a work to a select group and
for a limited purpose, and without the right of diﬀusion, reproduction, distribution or sale. The issue before us is whether Dr. King’s
delivery of the Speech was a general publication.

$ 130$&%63&4

It appears from the case law that a general publication occurs
only in two situations. First, a general publication occurs if tangible copies of the work are distributed to the general public in such
a manner as allows the public to exercise dominion and control over
the work. Second, a general publication may occur if the work is exhibited or displayed in such a manner as to permit unrestricted copying by the general public. See Le er Edged in Black Press, Inc. v. Public
Bldg. Comm’n of Chicago (invoking this exception where ”there were
no restrictions on copying [of a publicly displayed sculpture] and no
guards preventing copying” and ”every citizen was free to copy the
maque e for his own pleasure and camera permits were available to
members of the public”). However, the case law indicates that restrictions on copying may be implied, and that express limitations
in that regard are deemed unnecessary. See American Tobacco Co. v.
Werckmeister (holding that there is no general publication where artwork is exhibited and ”there are bylaws against copies, or where it
is tacitly understood that no copying shall take place, and the public
are admi ed . . . on the implied understanding that no improper
advantage will be taken of the privilege” (emphasis added)); Burke v.
National Broadcasting Co. (holding that releasing a ﬁlm to a professor
and host of an educational television program, and authorizing him
to copy and broadcast same on public television was a limited publication because the grant of permission to use the ﬁlm contained an
implied condition against distributing copies of the ﬁlm to others or
using it for other purposes); Nu v. National Inst. Incorporated for the
Improvement of Memory (lectures were not generally published when
delivered because oral delivery is not publication, and ”[e]ven where
the hearers are allowed to make copies of what was said for their personal use, they cannot later publish for proﬁt that which they had not
retained the right to sell”).
The case law indicates that distribution to the news media, as opposed to the general public, for the purpose of enabling the reporting
of a contemporary newsworthy event, is only a limited publication.
This rule comports with common sense; it does not force an author
whose message happens to be newsworthy to choose between obtaining news coverage for his work and preserving his common-law
copyright.
With the above principles in mind, in the summary judgment posture of this case and on the current state of this record, we are unable
to conclude that CBS has demonstrated beyond any genuine issue of
material fact that Dr. King, simply through his oral delivery of the
Speech, engaged in a general publication making the Speech available to members of the public at large without regard to their identity or what they intended to do with the work. A performance, no
ma er how broad the audience, is not a publication; to hold other-

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wise would be to upset a long line of precedent. This conclusion is
not altered by the fact that the Speech was broadcast live to a broad
radio and television audience and was the subject of extensive contemporaneous news coverage. We follow the above cited case law
indicating that release to the news media for contemporary coverage
of a newsworthy event is only a limited publication.

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An advance text of Dr. King’s speech was available in the press tent;
no copyright notice appeared on the text or was asserted concurrent
with the giving of the speech. CBS contends that there were no restrictions regarding entry into the press tent and that individuals outside of the press entered the area and obtained copies of the day’s
speeches. The Estate argues that Dr. King furnished this advance
text for the sole purpose of assisting press coverage of the March and
that he had been assured that it would be available only to the press.
Following the March, the SCLC reprinted the speech in its entirety
in its September 1963 newsle er with no copyright notice or other restrictions. The newsle er bore Dr. King’s name and title as President
at the top of its masthead. Generally, the SCLC news-le er had a
large national circulation and was also sent to those who asked for
copies.
However, material facts are in dispute as to whether the use of
Dr. King’s speech in the newsle er was authorized and also as to the
actual availability of the advance text. Accordingly, for the purposes
of summary judgment, this court does not rest its holding upon the
newsle er or the advance text but upon the context of Dr. King’s
speech itself.
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This suit arose by reason of a wri en request sent to defendant’s
newspaper for the words of the verse ”Remember This” by F. Collis Wildman. Several Sundays later in its Queries and Answers page
defendant printed the answer to the said request, giving the title, the
name of the author and the full text of the verse; followed by ”This
request was answered by a number of readers, some of whom sent
the poem”.
Plaintiﬀ claims that this publication in the newspaper without his
consent was in derogation of his rights in the copyrighted verse. He
wrote it on or about October 4, 1911. Plaintiﬀ applied for a copyright
and received the certiﬁcate of registration on or about July 3, 1926.
On June 23, 1926, he did cause his verse to be printed on a card by a
printer in Philadelphia; 3,000 copies of it. At the end of the verse, at

$ 130$&%63&4

the right is the name ”F. Collis Wildman”. In the lower left corner of
card is printed the word ”Copyright”. Three thousand of these cards,
described as above, were sold to the public by the plaintiﬀ.
The law is well se led that the provisions of the statute as to notice must be complied with and by selling a copyrighted article otherwise there is deication to the public and the copyright protection is
lost. Publication with notice of copyright is the essence of compliance
with the statute, and publication without proper notice amounts to a
dedication to the public suﬃcient to defeat all subsequent eﬀorts at
copyright protection.
With the above principles in mind, I can only come to the conclusion that the plaintiﬀ, when he had printed and sold the cards in
June, 1926, dedicated his verse to the public. I can only conclude that
there was no suﬃcient or legal copyright notice a ached. There was
no date a ached. There apparently was no claim of copyright on the
printed card by him personally, although this is somewhat questionable in view of the fact that his own name was at the end of the verse.
However, he did not comply with the statute; and the alleged notice,
if it was intended as a notice of copyright, is insuﬃcient to secure to
the plaintiﬀ any right under the copyright registration.

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Formalities are dramatically less important under contemporary
copyright law. The 1976 Copyright Act moderated their impact in
some signiﬁcant ways, and in 1988, the United States joined the international Berne Convention for the Protection of Literary and Artistic Works, which requires that copyright ”shall not be subject to any
formality.” Thus, formalities are important mostly for older works –
those published before March 1, 1989, when the Berne Convention
Implementation Act came into force.
For modern works, the main ”formality” is ﬁxation, which is such
a thin prerequisite that it is more like the minimal condition required
for the legal system to be sure it knows what the copyrighted work
even is. But traces of the other formalities remain, and competent
copyright practice requires complying with them.

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A work of authorship may be deemed copyrightable, provided that
it has been “ﬁxed in any tangible medium of expression, now known
or later developed, from which [it] can be perceived, reproduced, or
otherwise communicated, either directly or indirectly with the aid

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of a machine or device.” Speciﬁcally, the work must be ﬁxed in a
copy or phonorecord “by or under the authority of the author” and
the work must be “suﬃciently permanent or stable to permit it to be
perceived, reproduced, or otherwise communicated for a period of
more than transitory duration.”
The terms “copy” and “phonorecord” are very broad. They cover
all of the material objects in which copyrightable works are capable
of being ﬁxed.
• Copies are “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,” including the material object “in which the
work is ﬁrst ﬁxed.”
• Phonorecords are “material objects in which sounds, other than
those accompanying a motion picture or other audiovisual
work, are ﬁxed by any method now known or later developed,
and from which the sounds can be perceived, reproduced, or
otherwise communicated, either directly or with the aid of a
machine or device,” including “the material object in which the
sounds are ﬁrst ﬁxed.”
There are countless ways that a work may be ﬁxed in a copy or
phonorecord and it makes no diﬀerence what the form, manner, or
medium of ﬁxation may be. For example, a work may be expressed in
words, numbers, notes, sounds, pictures, or any other graphic or symbolic indicia and the author’s expression may be ﬁxed in a physical
object in wri en, printed, photographic, sculptural, punched, magnetic, or any other stable form.
Most works are ﬁxed by their very nature, such as an article
printed on paper, a song recorded in a digital audio ﬁle, a sculpture
rendered in bronze, a screenplay saved in a data ﬁle, or an audiovisual work captured on ﬁlm. Nevertheless, some works of authorship
may not satisfy the ﬁxation requirement, such as an improvisational
speech, sketch, dance, or other performance that is not recorded in
a tangible medium of expression. Other works may be temporarily
embodied in a tangible form, but may not be suﬃciently permanent
or stable to warrant copyright protection, such as purely evanescent
or transient reproductions such as those projected brieﬂy on a screen,
shown electronically on a television, or captured momentarily in the
memory of a computer.
The Oﬃce rarely encounters works that do not satisfy the ﬁxation
requirement because the Oﬃce requires applicants to submit copies
or phonorecords that contain a visually or aurally perceptible copy of
the work. However, the Oﬃce may communicate with the applicant

$ 130$&%63&4

or may refuse registration if the work or the medium of expression
only exists for a transitory period of time, if the work or the medium
is constantly changing, or if the medium does not allow the speciﬁc
elements of the work to be perceived, reproduced, or otherwise communicated in a consistent and uniform manner.
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Video games like “Scramble” can roughly be described as computers programmed to create on a television screen cartoons in which
some of the action is controlled by the player. In Stern’s “Scramble,”
for example, the video screen displays a spaceship moving horizontally through six diﬀerent scenes in which obstacles are encountered.
With each scene the player faces increasing diﬃculty in traversing the
course and scoring points. The ﬁrst scene depicts mountainous terrain, missile bases, and fuel depots. The player controls the altitude
and speed of the spaceship, decides when to release the ship’s supply of bombs, and ﬁres lasers that can destroy a acking missiles and
aircraft. He a empts to bomb the missile bases (scoring points for
success), bomb the fuel depots (increasing his own diminishing fuel
supply with each hit), avoid the missiles being ﬁred from the ground,
and avoid crashing his ship into the mountains. And that is only
scene one. In subsequent scenes the hazards include missile-ﬁring
enemy aircraft and tunnel-like airspaces. The scenes are in color, and
the action is accompanied by ba leﬁeld sounds.
The game is built into a cabinet containing a cathode ray tube, a
number of electronic circuit boards, a loudspeaker, and hand controls
for the player. The electronic circuitry includes memory storage devices called PROMs, an acronym for “programmable read only memory.” The PROM stores the instructions and data from a computer
program in such a way that when electric current passes through the
circuitry, the interaction of the program stored in the PROM with
the other components of the game produces the sights and sounds of
the audiovisual display that the player sees and hears. The memory
devices determine not only the appearance and movement of the images but also the variations in movement in response to the player’s
operation of the hand controls.
Stern manufactures amusement equipment, including video
games, for distribution worldwide. Even in the fast-paced world
of video games, “Scramble” quickly became a big success. Approximately 10,000 units were sold at about $2,000 each in the ﬁrst two
months for an initial sales volume of about $20 million. …
[Omni was enjoined from distributing its own “Scramble” arcade
games. One of its arguments was that Stern’s Scramble was not ﬁxed.]
Omni contends that Konami is not entitled to secure a copyright

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in the sights and sounds of its “Scramble” game because the audiovisual work is neither “ﬁxed in any tangible medium of expression”
nor “original” within the meaning of § 102(a). Both contentions arise
from the fact that the sequence of some of the images appearing on
the screen during each play of the game will vary depending upon
the actions taken by the player. For example, if he fails to avoid enemy ﬁre, his spaceship will be destroyed; if he fails to destroy enough
fuel depots, his own fuel supply will run out, and his spaceship will
crash; if he succeeds in destroying missile sites and enemy planes,
those images will disappear from the screen; and the precise course
travelled by his spaceship will depend upon his adjustment of the
craft’s altitude and velocity.
If the content of the audiovisual display were not aﬀected by the
participation of the player, there would be no doubt that the display
itself, and not merely the wri en computer program, would be eligible for copyright. The display satisﬁes the statutory deﬁnition of an
original “audiovisual work,” and the memory devices of the game
satisfy the statutory requirement of a “copy” in which the work is
“ﬁxed.” The audiovisual work is permanently embodied in a material object, the memory devices, from which it can be perceived with
the aid of the other components of the game.
We agree with the District Court that the player’s participation
does not withdraw the audiovisual work from copyright eligibility.
No doubt the entire sequence of all the sights and sounds of the game
are diﬀerent each time the game is played, depending upon the route
and speed the player selects for his spaceship and the timing and accuracy of his release of his craft’s bombs and lasers. Nevertheless,
many aspects of the sights and the sequence of their appearance remain constant during each play of the game. These include the appearance (shape, color, and size) of the player’s spaceship, the enemy
craft, the ground missile bases and fuel depots, and the terrain over
which (and beneath which) the player’s ship ﬂies, as well as the sequence in which the missile bases, fuel depots, and terrain appears.
Also constant are the sounds heard whenever the player successfully
destroys an enemy craft or installation or fails to avoid an enemy missile or laser. It is true, as appellants contend, that some of these sights
and sounds will not be seen and heard during each play of the game
in the event that the player’s spaceship is destroyed before the entire
course is traversed. But the images remain ﬁxed, capable of being
seen and heard each time a player succeeds in keeping his spaceship
aloft long enough to permit the appearances of all the images and
sounds of a complete play of the game. The repetitive sequence of a
substantial portion of the sights and sounds of the game qualiﬁes for

$ 130$&%63&4

copyright protection as an audiovisual work.
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Which of the following are suﬃciently ﬁxed to be copyrightable? In each case where your answer is “yes,” identify
the material object.
• A song sung on the sidewalk?
• A song wri en out as sheet music?
• A song on a CD?
• A diagram on a blackboard?
• A PowerPoint slide?
• A sonnet in your mind?
• A photograph?
• The Fast and the Furious: Tokyo Drift?
• Our class on copyrightable subject ma er?
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You represent Shelbyville Stages, a concert promoter. You have
booked the eccentric pop musician Plastica for a twelve-city tour in
the Northeast. The marketing staﬀ at Shelbyville have recently discovered an image online that they think would be perfect for using
on the concert posters. It features Plastica stepping down the landing
ramp of a ﬂying saucer, backlit, carrying a pair of cheerleader’s pompoms, with a guitar slung over her back, and wearing her trademark
disinterested scowl.
A similar photograph was the cover of this month’s Them, a
celebrity fashion magazine. An unknown party or party unknown,
however, extensively Photoshopped it to make it look like a faded,
weather-beaten Old West “WANTED” poster. The marketing staﬀ
tell you that this was a stroke of genius; the combination of the antique look with the kitschy futuristic technology gives the whole
thing what they call a “neo-horsepunk ﬂying-car feel” and the outlaw theme plays oﬀ Plastica’s expression. Their research has determined that the following people were in some way connected with
the image:
• Plastica herself, who has spent years crafting her stage persona,
which might be described as “heroin-ravaged all-American girl
from outer space.”
• Plastica’s hair-stylist, Alicia Abt, who produced the complicated multi-layer updo in which she appears in the photograph,
with a single side ponytail and a Statute-of-Liberty-style ring of
spikes.

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• Plastica’s personal trainer, Ben Boardwell, who has spent years
working with her to develop her musculature to combine
strength with a suggestion of wasted potential.
• A celebrity photographer, Charles Carmack, who decided on
the ﬂying-saucer theme, chose the placement of props, and instructed Plastica on how to pose.
• Carmack’s salaried assistant, Denyse Dozier, who operated the
camera and pushed the bu on that took the photographs.
• A Photoshop expert, Ernest Eames, who digitally smoothed out
the wrinkles in Plastica’s face, extended her neck by two inches,
and made a hundred other similar tweaks.
• Them magazine, where the modiﬁed photograph ran.
• Some unknown person with the username SeePeteyPhotoshop,
who added the Old West theme and uploaded the modiﬁed
photo to the photosharing site AwfulThings.com.
Based on these facts, advise Shelbyville Stages on whether it will be
possible to obtain suﬃcient permissions to use the Old West version
of the photo for the concert posters, and, if so how to go about it.
C

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Under the current copyright law, a work of authorship is protected
by copyright from the moment it is created, provided that the work
is original and has been ﬁxed in a tangible medium of expression.
Although registration is not required for a work to be protected by
copyright, it does provide several important beneﬁts:
• A registration creates a public record that includes key facts relating to the authorship and ownership of the claimed work, as
well as information about the work, such as title, year of creation, date of publication (if any), and the type of authorship
that the work contains (e.g., photographs, text, sound recordings).
• Registration (or a refusal to register) is a prerequisite to ﬁling a
lawsuit for copyright infringement involving a U.S. work. Although registration is permissive, both the certiﬁcate and the
original work must be on ﬁle with the Copyright Oﬃce before
a copyright owner can sue for infringement.
• To claim statutory damages or a orney’s fees in a copyright
infringement lawsuit, a work must be registered before the infringement began or within three months after the ﬁrst publication of the work.

$ 130$&%63&4

• A registration constitutes prima facie evidence of the validity
of the copyright and the facts stated in the certiﬁcate of registration, but only if the work is registered before or within ﬁve
years after the work is ﬁrst published.
• A registration provides information to prospective licensees,
such as the name and address for obtaining permission to use
the work.
• A document that has been recorded with the U.S. Copyright Ofﬁce may provide constructive notice of the facts stated therein,
but only if the document speciﬁcally identiﬁes a work of authorship and only if that work has been registered.
• The deposit copy(ies) submi ed with an application for registration of a published work may satisfy the mandatory deposit
requirement, provided that the applicant submi ed the best edition of the work.
• A registration is necessary to secure the full beneﬁts of a preregistration that has been issued by the U.S. Copyright Oﬃce.
• The U.S. Customs and Border Protection Service may seize foreign pirated copies of a copyright owner’s work, provided that
the work has been registered with the U.S. Copyright Oﬃce and
the certiﬁcate of registration has been recorded with the U.S.
Customs and Border Protection Service.
• A registration is required to claim royalties under the compulsory license for making and distributing phonorecords.

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The U.S. Copyright Act provides for two separate sets of deposit requirements: deposits submi ed in connection with registration applications and those submi ed in accordance with the mandatory deposit provisions (or “legal deposit” provisions) of the law. The U.S.
Copyright Oﬃce administers both sets of provisions.
The Register of Copyrights speciﬁes by regulation the form of deposit that must accompany a copyright claim and registration application. Said regulations reﬂect and inform the ability of the Oﬃce
to examine the work for copyrightable authorship, to verify the authorship claimed in the application, and to verify the facts stated in
the application. Deposits may also be used for evidentiary purposes
in litigation involving a copyrighted work. Since registration is not

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required as a condition for copyright protection, the Register has the
authority to adjust or exempt the deposit requirements as appropriate for certain works or application procedures, weighing the needs
or concerns of applicants and the public. Deposits may also be selected by the Library of Congress.
Mandatory deposit is a statutory requirement for the beneﬁt of
the national collection of the Library of Congress. The owner of copyright or the owner of the exclusive right of publication in a work published in the United States must deposit two copies or phonorecords
of the work within three months after publication.
In most cases, a deposit submi ed for registration may be used to
satisfy the mandatory deposit requirement, provided that the applicant submits two complete copies or two complete phonorecords of
the best edition of the work. In such cases, there is no need to submit additional copies or phonorecords for the purpose of mandatory
deposit.
For some classes of works, the deposit requirements for registration and mandatory deposit are not the same. In such cases, a separate submission of copies, phonorecords, or identifying material may
be needed to register the work and to satisfy the mandatory deposit
requirements. For example, mandatory deposit for a computer program requires two complete copies of the best edition, while registration may be accomplished with identifying material containing a
selection of the source code for that work. In the digital context, such
nuance and distinction is even more important, and applicable regulations are therefore subject to change.
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Submi ing a published work for the use or disposition of the Library is not a condition of copyright protection. However, if compliance with the mandatory deposit requirement is not accomplished
within three months of publication, the Register of Copyrights may
facilitate, demand, negotiate, or exempt the provision of copies or
phonorecords for the Library of Congress at any time after a work
has been published in the United States. If the Oﬃce issues a written demand and if required copies or phonorecords are not received
within three months of receipt of the demand, the copyright owner
or owner of the exclusive right of publication in that work may be
subject to ﬁnes or other monetary liability.
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Although notice is optional for unpublished works, foreign works, or
works published on or after March 1, 1989, the U.S. Copyright Oﬃce

$ 130$&%63&4

strongly encourages copyright owners to use a notice for the following reasons:
• It puts potential users on notice that copyright is claimed in the
work.
• In the case of a published work, a notice may prevent a defendant in a copyright infringement action from a empting to limit
his or her liability for damages or injunctive relief based on an
innocent infringement defense.
• It identiﬁes the copyright owner at the time the work was ﬁrst
published for parties seeking permission to use the work.
• It identiﬁes the year of ﬁrst publication, which may be used
to determine the term of copyright protection in the case of an
anonymous work, a pseudonymous work, or a work made for
hire.
• It may prevent the work from becoming an orphan work by
identifying the copyright owner and/or specifying the term of
the copyright.
A notice for a work published before March 1, 1989 that has been
ﬁxed in copies should include the following elements:
• The symbol © or the word “Copyright” or the abbreviation
“Copr.”;
• The year of ﬁrst publication for the work; and
• The name of the copyright owner, or an abbreviation by which
the name can be recognized, or a generally known alternative
designation of the owner.
The elements of the notice should appear as a single continuous statement containing the copyright symbol or the word “Copyright” or
the abbreviation “Copr.,” followed by the year of ﬁrst publication,
followed by the name of the copyright owner.
Examples:
• © 1978 John Doe
• Copyright 1980 John Doe
• Copr. 1982 John Doe

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There is no way around it: copyright terms for older works are a mess
and require careful investigation. The details are beyond the scope
of this course, but you have been warned.
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(a)

In General.— Copyright in a work created on or after January 1,
1978, subsists from its creation and, except as provided by the
following subsections, endures for a term consisting of the life
of the author and 70 years after the author’s death.
(b) Joint Works.— In the case of a joint work prepared by two or
more authors who did not work for hire, the copyright endures
for a term consisting of the life of the last surviving author and
70 years after such last surviving author’s death.
(c) Anonymous Works, Pseudonymous Works, and Works Made
for Hire.— In the case of an anonymous work, a pseudonymous
work, or a work made for hire, the copyright endures for a term
of 95 years from the year of its ﬁrst publication, or a term of 120
years from the year of its creation, whichever expires ﬁrst. …
All terms of copyright provided by sections 302 through 304 run to
the end of the calendar year in which they would otherwise expire.
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This case concerns the authority the Constitution assigns to Congress
to prescribe the duration of copyrights. In 1998, in the measure here
under inspection [the Sonny Bono Copyright Term Extension Act
(CTEA)], Congress enlarged the duration of copyrights by 20 years.
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.
Petitioners do not challenge the ”life-plus-70-years” timespan itself. ”Whether 50 years is enough, or 70 years too much,” they acknowledge, ”is not a judgment meet for this Court.” Congress went
awry, petitioners 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.
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

$ 130$&%63&4

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; to qualify for the 1831 extension, an existing work had to be in its initial
copyright term at the time the Act became eﬀective.
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. 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.
These new copyright terms, the 1976 Act instructed, governed all
works not published by its eﬀective date of January 1, 1978, regardless of when the works were created. For published works with existing copyrights as of that date, the 1976 Act granted a copyright term
of 75 years from the date of publication, a 19-year increase over the
56-year term applicable under the 1909 Act.
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. This standard harmonizes the baseline United States
copyright term with the term adopted by the European Union in 1993.
We address ﬁrst the determination of the courts below that
Congress has authority under the Copyright Clause to extend the
terms of existing copyrights. 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.
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. 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. The CTEA may also provide greater incentive for American and other authors to create and

$)"15&3  $01:3*()5

disseminate their work in the United States. In addition to international concerns, Congress passed the CTEA in light of demographic,
economic, and technological changes and rationally credited projections that longer terms would encourage copyright holders to invest
in the restoration and public distribution of their works.
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. In addition to
spurring the creation and publication of new expression, copyright
law contains built-in First Amendment accommodations. First, it distinguishes between ideas and expression and makes only the la er eligible for copyright protection. 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. When, as in
this case, Congress has not altered the traditional contours of copyright protection, further First Amendment scrutiny is unnecessary.
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Arthur Conan Doyle published his ﬁrst Sherlock Holmes story in
1887 and his last in 1927. There were 56 stories in all, plus 4 novels. The ﬁnal 10 stories were published between 1923 and 1927. As a
result of statutory extensions of copyright protection culminating in
the 1998 Copyright Term Extension Act, the American copyrights on
those ﬁnal stories (copyrights owned by Doyle’s estate, the appellant)
will not expire until 95 years after the date of original publication –
between 2018 to 2022, depending on the original publication date of
each story. The copyrights on the other 46 stories and the 4 novels,
all being works published before 1923, have expired.
Leslie Klinger, the appellee in this case, co-edited an anthology called A S
S
: S
I
S
H
C
(2011). Klinger’s anthology consisted of stories written by modern authors but inspired by, and in most instances depicting, the genius detective Sherlock Holmes and his awed sidekick Dr.
Watson. Klinger didn’t think he needed a license from the Doyle estate to publish these stories, since the copyrights on most of the works
in the ”canon” had expired. But the estate told Random House, which
had agreed to publish Klinger’s book, that it would have to pay the
estate $5000 for a copyright license. Random House bowed to the
demand, obtained the license, and published the book.
[Klinger made arrangements to publish a sequel.] Instead of obtaining a license, Klinger sued the estate, seeking a declaratory judg-

$ 130$&%63&4

ment that he is free to use material in the 50 Sherlock Holmes stories
and novels that are no longer under copyright, though he may use
nothing in the 10 stories still under copyright that has suﬃcient originality to be copyrightable.
The issue is whether copyright protection of a ﬁctional character
can be extended beyond the expiration of the copyright on it because
the author altered the character in a subsequent work. In such a case,
the Doyle estate contends, the original character cannot lawfully be
copied without a license from the writer until the copyright on the
later work, in which that character appears in a diﬀerent form, expires.
We cannot ﬁnd any basis in statute or case law for extending a
copyright beyond its expiration. When a story falls into the public domain, story elements – including characters covered by the expired
copyright – become fair game for follow-on authors, as held in Silverman v. CBS Inc., a case much like this one. At issue was the right
to copy ﬁctional characters (Amos and Andy) who had appeared in
copyrighted radio scripts. The copyrights covered the characters because they were original. As in this case the characters also appeared
in subsequent radio scripts that remained under copyright, though
the copyrights on the original scripts in which the characters had appeared had expired. The court ruled that ”a copyright aﬀords protection only for original works of authorship and, consequently, copyrights in derivative works secure protection only for the incremental
additions of originality contributed by the authors of the derivative
works.”
And so it is in our case. The ten Holmes-Watson stories in which
copyright persists are derivative from the earlier stories, so only original elements added in the later stories remain protected. The freedom
to make new works based on public domain materials ends where the
resulting derivative work comes into conﬂict with a valid copyright,
as Klinger acknowledges. But there is no such conﬂict in this case.
Lacking any ground known to American law for asserting postexpiration copyright protection of Holmes and Watson in pre-1923
stories and novels going back to 1887, the estate argues that creativity will be discouraged if we don’t allow such an extension. It may
take a long time for an author to perfect a character or other expressive element that ﬁrst appeared in his early work. If he loses copyright on the original character, his incentive to improve the character
in future work may be diminished because he’ll be competing with
copiers, such as the authors whom Klinger wishes to anthologize. Of
course this point has no application to the present case, Arthur Conan
Doyle having died 84 years ago. More important, extending copyright protection is a two-edged sword from the standpoint of inducing creativity, as it would reduce the incentive of subsequent authors

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to create derivative works (such as new versions of popular ﬁctional
characters like Holmes and Watson) by shrinking the public domain.
For the longer the copyright term is, the less public-domain material
there will be and so the greater will be the cost of authorship, because
authors will have to obtain licenses from copyright holders for more
material – as illustrated by the estate’s demand in this case for a license fee from Pegasus.
Most copyrighted works include some, and often a great deal
of, public domain material – words, phrases, data, entire sentences,
quoted material, and so forth. The smaller the public domain, the
more work is involved in the creation of a new work. The defendant’s
proposed rule would also encourage authors to continue to write stories involving old characters in an eﬀort to prolong copyright protection, rather than encouraging them to create stories with entirely new
characters. The eﬀect would be to discourage creativity.

%

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This section starts with passages from three classic copyright cases
that set out the essential issues in assessing similarity. They are followed by two more recent cases that work through the details in a
more concrete se ing.
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The plaintiﬀs’ originality is necessarily limited to the variants they
introduced. Nevertheless, it is still true that their whole contribution
may not be protected; for the defendants were entitled to use, not only
all that had gone before, but even the plaintiﬀs’ contribution itself, if
they drew from it only the more general pa erns; that is, if they kept
clear of its “expression.”
True, much of the picture owes nothing to the play; some of it
is plainly drawn from the novel; but that is entirely immaterial; it is
enough that substantial parts were lifted; no plagiarist can excuse the
wrong by showing how much of his work he did not pirate.
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[The plaintiﬀ’s play, Abie’s Irish Rose, and the defendant’s movie,
The Cohens and the Kellys, both concerned the tension between an
Irish family and a Jewish family when their children fall in love and
marry.]
It is of course essential to any protection of literary property,
whether at common-law or under the statute, that the right cannot be

% */'3*/(&.&/5 4*.*-"3*5:

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 ma er 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.” 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 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.
But we do not doubt that two plays may correspond in plot closely
enough for infringement. How far that correspondence must go is
another ma er. 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 li le 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

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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 ma er 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 be er 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 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 ma er
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.
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,
whereever 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,

% */'3*/(&.&/5 4*.*-"3*5:

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
a ribute of ”love” ascribed to both Jews. The plaintiﬀ has depicted
her father as deeply a ached 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.
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[The plaintiﬀ, Ira B. Arnstein, alleged that Cole Porter copied numerous songs from him.] 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.32 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.
Surely, then, we have an issue of fact which a jury is peculiarly
ﬁ ed to determine.35
We should not be taken as saying that a plagiarism case can never
arise in which absence of similarities is so patent that a summary
judgment for defendant would be correct. Thus suppose that Ravel’s
“Bolero” or Shostakovitch’s “Fifth Symphony” were alleged to infringe “When Irish Eyes Are Smiling.” But this is not such a case.
32

Where plaintiﬀ relies on similarities to prove copying (as distinguished from
improper appropriation) paper comparisons and the opinions of experts may aid
the court.
35
It would, accordingly, be proper to exclude tone-deaf persons from the jury.

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For, after listening to the playing of the respective compositions, we
are, at this time, unable to conclude that the likenesses are so triﬂing
that, on the issue of misappropriation, a trial judge could legitimately
direct a verdict for defendant.
At the trial, plaintiﬀ may play, or cause to be played, the pieces
in such manner that they may seem to a jury to be inexcusably alike,
in terms of the way in which lay listeners of such music would be
likely to react. The plaintiﬀ may call witnesses whose testimony may
aid the jury in reaching its conclusion as to the responses of such audiences. Expert testimony of musicians may also be received, but it
will in no way be controlling on the issue of illicit copying, and should
be utilized only to assist in determining the reactions of lay auditors.
The impression made on the reﬁned ears of musical experts or their
views as to the musical excellence of plaintiﬀ’s or defendant’s works
are u erly immaterial on the issue of misappropriation; for the views
of such persons are caviar to the general – and plaintiﬀ’s and defendant’s compositions are not caviar.
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You are law clerk to a judge hearing a copyright infringement case.
The plaintiﬀ’s work is a children’s book; the allegedly infringing
work is a G-rated animated movie. The plaintiﬀ has oﬀered an expert
witness who has made a chart of 83 alleged similarities; the defendant
has oﬀered an expert witness who will testify that the book primarily
appeals to “verbally oriented” children aged 9-11, while the movie
primarily apeals to “visually orented” children aged 6-8.
Will you restrict the jury pool to children? To parents? What special instructions, if any, will you give the jury regarding its task of
assessing similarity? Will you allow the plaintiﬀ’s expert to testify?
The defendant’s? If you allow either of them to testify, what will you
instruct the jury regarding the relevance of the opinions they oﬀer?
How will you allow the parties to present the works to the jury during the trial? Will you allow the jury to have copies of the book and
a DVD of the movie with them during deliberations?
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In the motion picture ”What Women Want,” released by defendant
Paramount Pictures Corporation in 2000, Mel Gibson plays an advertising executive who acquires the ability to ”hear” what women
are thinking. In one scene, Gibson and his co-star Helen Hunt brainstorm with other employees to develop ideas for marketing certain
consumer products to women. At various points during the scene, a
pinball machine – the ”Silver Slugger” – appears in the background.
The Silver Slugger is distributed by plaintiﬀ Go lieb Development

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LLC, and Paramount used the pinball machine in the scene without
Go lieb’s permission.
The Silver Slugger features three original designs (the ”Designs”):
(1) a depiction of a baseball diamond on the backglass, which is the
upright back portion of the pinball machine; (2) another baseball diamond on the playﬁeld, which is the playing surface of the machine;
and (3) the layout of the parts of the playﬁeld. The Designs are copyrighted, and Go lieb has owned the copyrights since 1998.
The legal maxim ”de minimis non curat lex” – ”the law does not
concern itself with triﬂes” – applies in the copyright context. For example, if the copying is de minimis and so ”trivial” as to fall below the
quantitative threshold of substantial similarity, the copying is not actionable.
There is no plausible claim of copyright infringement here. Although Go lieb has suﬃciently pled unauthorized copying of its Designs, the use of the Silver Slugger was de minimis as a ma er of law.
Hence, no reasonable juror could ﬁnd substantial similarity in the legal sense, and thus the copying is not actionable.
The scene in question lasts only three-and-a-half minutes, and the
Silver Slugger appears in the scene sporadically, for no more than
a few seconds at a time. More importantly, the pinball machine is
always in the background; it is never seen in the foreground. It never
appears by itself or in a close-up. It is never mentioned and plays no
role in the plot. It is almost always partially obscured (by Gibson and
pieces of furniture), and is fully visible for only a few seconds during
the entire scene. The Designs (on the backglass and playﬁeld of the
pinball machine) are never fully visible and are either out of focus
or obscured. Indeed, an average observer would not recognize the
Designs as anything other than generic designs in a pinball machine.
Go lieb cites to Ringgold v. Black Entertainment Television, Inc. in
support of its claim, but the facts of that case are inapposite. Ringgold
involved the unauthorized use of a copyrighted poster in an episode
of a HBO television series. The poster was shown, in whole or in part,
nine times during a ﬁve-minute scene at the end of the episode. The
poster (or a portion thereof) was seen for 1.86 to 4.16 seconds at a time,
for a total of 26.75 seconds. In some instances, the poster appeared at
the center of the screen. As the Second Circuit held, the poster was
”plainly observable.”
More importantly, there was a qualitative connection between the
poster and the show. The poster included a painting depicting a Sunday School picnic held by the Freedom Baptist Church in Atlanta,
Georgia, in 1909, and was intended to convey ”aspects of the AfricanAmerican experience in the early 1900s.” The show was ”ROC,” a television ”sitcom” series about a middle-class African-American family
living in Baltimore, and the scene in question was of a gathering in

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a church hall with a minister. The Second Circuit noted that HBO’s
production staﬀ ”evidently thought that the poster was well suited
as a set decoration for the African-American church scene of a ROC
episode.” The Second Circuit concluded:

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From the standpoint of a quantitative assessment of the
segments, the principal four-to-ﬁve second segment in
which almost all of the poster is clearly visible, albeit in
less than perfect focus, reenforced by the briefer segments
in which smaller portions are visible, all totaling 26 to 27
seconds, are not de minimis copying. The painting component of the poster is recognizable as a painting, and with
suﬃcient observable detail for the ”average lay observer”
to discern African-Americans in Ringold’s colorful, virtually two-dimensional style. The de minimis threshold
of actionable copying of protected expression has been
crossed.
In the present case, the ”average lay observer” would not be able to
discern any distinctive elements of Go lieb’s Designs – the baseball
players clad in stylized, futuristic gear. The best that the average lay
observer could make out in the background is a typical home-plate
layout with baseball players arrayed around it. The unique expressive element of the Designs is not discernable in those brief moments
when the backglass is visible. The only other protected element of
the backglass is the ”Silver Slugger” logo in the upper left hand corner, which is glimpsed ﬂeetingly, and in poor focus, during the scene.
The camera sweeps past the logo without dwelling or focusing on it.
The average lay observer would not discern the stylized aspects of
the logo a ributable to Go lieb based on the way the logo appears in
the background of the scene.
Moreover, while use of a copyrighted work in the background
may still be a basis for an infringement claim, where the use is de minimis, the copying will not be actionable, even where the work was chosen to be in the background for some thematic relevance. As the Second Circuit explained in Ringgold, ”in some circumstances, a visual
work, though selected by production staﬀ for thematic relevance, or
at least for its decorative value, might ultimately be ﬁlmed at such distance and so out of focus that a typical program viewer would not discern any decorative eﬀect that the work of art contributes to the set.”
Here, undoubtedly the Silver Slugger was chosen by the production
staﬀ because it ﬁt in with the ”sporty” theme of the background in the
scene; but the Silver Slugger was one of numerous background items,
and it was ﬁlmed in such a manner and appears so ﬂeetingly that I
conclude there is no plausible claim for copyright infringement here.
Accordingly, Go lieb’s copyright infringement claim is dismissed.

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Plaintiﬀs Judi Boisson and her wholly-owned company, American
Country Quilts and Linens, Inc., d/b/a Judi Boisson American Country, brought suit alleging that defendants Vijay Rao and his whollyowned company Banian Ltd., illegally copied two quilt designs.
B
Judi Boisson has been in the quilt trade for over 20 years, beginning
her career by selling antique American quilts – in particular, Amish
quilts – she purchased in various states throughout the country. By
the late 1980s, having diﬃculty ﬁnding antique quilts, she decided
to design and manufacture her own and began selling them in 1991
through her company. Boisson published catalogs in 1993 and 1996 to
advertise and sell her quilts. Her works are also sold to linen, gift, antique, and children’s stores and high-end catalog companies. Various
home furnishing magazines have published articles featuring Boisson and her quilts.
In 1991 plaintiﬀ designed and produced two alphabet quilts entitled ”School Days I” and ”School Days II.” Although we later describe
the quilts in greater detail, we note each consists of square blocks
containing the capital le ers of the alphabet, displayed in order. The
blocks are set in horizontal rows and vertical columns, with the last
row ﬁlled by blocks containing various pictures or icons. The le ers
and blocks are made up of diﬀerent colors, set oﬀ by a white border
and colored edging.
Defendant Vijay Rao is the president and sole shareholder of defendant Banian Ltd., incorporated in November 1991. Rao is an electrical engineer in the telecommunications industry who became interested in selling quilts in February 1992. To that end, he imported from
India each of the three alphabet quilts at issue in this case. He sold
them through boutique stores and catalog companies. The ﬁrst quilt
he ordered was ”ABC Green Version I,” which he had been shown by
a third party. Defendants have not sold this pa ern since 1993. ”ABC
Green Version II” was ordered in September 1994, based upon modiﬁcations to ”ABC Green Version I” requested by Rao. Defendants
reordered this quilt once in April 1995, and then stopped selling it in
March 1997. Regarding ”ABC Navy,” Rao testiﬁed that he designed
the quilt himself based upon ”ABC Green Version II” and imported
ﬁnished copies in November 1995. Defendants voluntarily withdrew
their ”ABC Navy” quilts from the market in November 1998 following the initiation of this litigation.

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Generally, an allegedly infringing work is considered substantially
similar to a copyrighted work if ”the ordinary observer, unless he
set out to detect the disparities, would be disposed to overlook them,
and regard their aesthetic appeal as the same.” Folio Impressions Inc.
v. Byer California. Yet in Folio Impressions, the evidence at trial showed
the plaintiﬀ designer had copied the background for its fabric from a
public domain document and ”contributed nothing, not even a trivial variation.” Thus, part of the plaintiﬀ’s fabric was not original and
therefore not protectible. We articulated the need for an ordinary observer to be ”more discerning” in such circumstances.
The ordinary observer would compare the ﬁnished product that the fabric designs were intended to grace
(women’s dresses), and would be inclined to view the
entire dress – consisting of protectible and unprotectible
elements – as one whole. Here, since only some of the
design enjoys copyright protection, the observer’s inspection must be more discerning.

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We reiterated that a ”more reﬁned analysis” is required where a plaintiﬀ’s work is not ”wholly original,” but rather incorporates elements
from the public domain. Key Publications, Inc. v. Chinatown Today
Publishing Enterprises, Inc.. In these instances, ”what must be shown
is substantial similarity between those elements, and only those elements, that provide copyrightability to the allegedly infringed compilation.” In contrast, where the plaintiﬀ’s work contains no material
imported from the public domain, the ”more discerning” test is unnecessary. In the case at hand, because the alphabet was taken from
the public domain, we must apply the ”more discerning” ordinary
observer test.
In applying this test, a court is not to dissect the works at issue into
separate components and compare only the copyrightable elements.
To do so would be to take the ”more discerning” test to an extreme,
which would result in almost nothing being copyrightable because
original works broken down into their composite parts would usually be li le more than basic unprotectible elements like le ers, colors
and symbols. This outcome – aﬀording no copyright protection to an
original compilation of unprotectible elements – would be contrary
to the Supreme Court’s holding in Feist.
Although the ”more discerning” test has not always been identiﬁed by name in our case law, we have nevertheless always recognized
that the test is guided by comparing the ”total concept and feel” of
the contested works. For example, in Streetwise Maps, Inc. v. VanDam, Inc. we found no infringement – not because the plaintiﬀ’s map

% */'3*/(&.&/5 4*.*-"3*5:

consisted of public domain facts such as street locations, landmasses,
bodies of water and landmarks, as well as color – but rather ”because
the total concept and overall feel created by the two works may not
be said to be substantially similar.”
In the present case, while use of the alphabet may not provide
a basis for infringement, we must compare defendants’ quilts and
plaintiﬀs’ quilts on the basis of the arrangement and shapes of the
le ers, the colors chosen to represent the le ers and other parts of
the quilts, the quilting pa erns, the particular icons chosen and their
placement. Our analysis of the ”total concept and feel” of these works
should be instructed by common sense. Cf. Hamil America, Inc. v.
GFI (noting that the ordinary observer test involves an examination
of ”total concept and feel,” which in turn can be guided by ”good
eyes and common sense”).

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V. C
A. ”School Days I” v. ”ABC Green” Versions
”School Days I” consists of six horizontal rows, each row containing
ﬁve blocks, with a capital le er or an icon in each block. The groupings of blocks in each row are as follows: A-E; F-J; K-O; P-T; U-Y; and
Z with four icons following in the last row. The four icons are a cat,
a house, a single-starred American ﬂag and a basket. ”ABC Green
Version I” displays the capital le ers of the alphabet in the same formation. The four icons in the last row are a cow jumping over the
moon, a sailboat, a bear and a star. ”ABC Green Version II” is identical to ”ABC Green Version I,” except that the picture of the cow
jumping over the moon is somewhat altered, the bear is replaced by
a teddy bear si ing up and wearing a vest that looks like a singlestarred American ﬂag, and the star in the last block is represented in
a diﬀerent color.
All three quilts use a combination of contrasting solid color fabrics
or a combination of solid and polka-do ed fabrics to represent the
blocks and le ers. The following similarities are observed in plaintiﬀs’ and defendants’ designs: ”A” is dark blue on a light blue background; ”B” is red on a white background; ”D” is made of polka-dot
fabric on a light blue background; ”F” on plaintiﬀs’ ”School Days I”
is white on a pink background, while the ”F” on defendants’ ”ABC
Green” versions is pink on a white background; ”G” has a green background; ”H” and ”L” are each a shade of blue on a white background;
”M” in each quilt is a shade of yellow on a white background. ”N” is
green on a white background; ”O” is blue on a polka-dot background;
”P” is polka-dot fabric on a yellow background; ”Q” is brown on a
light background; ”R” is pink on a gray/purple background. ”S” is
white on a red background; ”T” is blue on a white background; ”U”

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is gray on a white background; ”V” is white on a gray background;
”W” is pink on a white background; ”X” is purple in all quilts, albeit
in diﬀerent shades, on a light background; ”Y” is a shade of yellow
on the same light background; and ”Z” is navy blue or black, in all
the quilts.
Boisson also testiﬁed that defendants utilized the same unique
shapes as she had given to the le ers ”J,” ”M,” ”N,” ”P,” ”R” and
”W.” With respect to the quilting pa erns, ”School Days I” and the
”ABC Green” versions feature diamond-shaped quilting within the
blocks and a ”wavy” pa ern in the plain white border that surrounds
the blocks. The quilts are also edged with a 3/8” green binding.
From this enormous amount of sameness, we think defendants’
quilts suﬃciently similar to plaintiﬀs’ design as to demonstrate illegal copying. In particular, the overwhelming similarities in color
choices lean toward a ﬁnding of infringement. Although the icons
chosen for each quilt are diﬀerent and defendants added a green rectangular border around their rows of blocks, these diﬀerences are not
suﬃcient to cause even the ”more discerning” observer to think the
quilts are other than substantially similar insofar as the protectible elements of plaintiﬀs’ quilt are concerned. Moreover, the substitution
in ”ABC Green Version II” of the teddy bear wearing a ﬂag vest as
the third icon causes this version of defendants’ quilt to look even
more like plaintiﬀs’ quilt that uses a single-starred American ﬂag as
its third icon. Consequently, both of defendants’ ”ABC Green” quilts
infringed plaintiﬀs’ copyright on its ”School Days I” quilt.
B. ”School Days I” v. ”ABC Navy”

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We agree with the district court, however, that Rao did not infringe
on plaintiﬀs’ design in ”School Days I” when he created ”ABC Navy.”
While both quilts utilize an arrangement of six horizontal rows of ﬁve
blocks each, ”ABC Navy” does not have its four icons in the last row.
Rather, the teddy bear with the ﬂag vest is placed after the ”A” in
the ﬁrst row, the cow jumping over the moon is placed after the ”L”
in the third row, the star is placed after the ”S” in the ﬁfth row, and
the sailboat is placed after the ”Z” in the last row. Further, the colors
chosen to represent the le ers and the blocks in ”ABC Navy” are, for
the most part, entirely diﬀerent from ”School Days I.” Defendants
dropped the use of polka-dot fabric, and plaintiﬀs did not even offer a color comparison in their proposed ﬁndings of fact to the district court, as they had with each of the ”ABC Green” versions. The
quilting pa ern in the plain white border is changed to a ”zig-zag”
in ”ABC Navy,” as opposed to plaintiﬀs’ ”wavy” design. Finally, although defendants use a binding around the edge of their quilt, in
this instance it is blue instead of green.
Looking at these quilts side-by-side, we conclude they are not sub-

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

stantially similar to one another. Just as we rejected defendants’ earlier argument and held that what few diﬀerences existed between
”School Days I” and the ”ABC Green” quilts could not preclude a ﬁnding of infringement, plaintiﬀs’ emphasis on the similarity in style between some of the le ers between ”School Days I” and ”ABC Navy”
cannot support a ﬁnding of infringement. Because no observer, let
alone a ”more discerning” observer, would likely ﬁnd the two works
to be substantially similar, no copyright violation could properly be
found.
/FX :PSLFS 1SPCMFN
Below you will ﬁnd a cover from the New Yorker and a poster for
the movie Moscow on the Hudson. The copyright owners of the former have sued the producers of the la er for copyright infringement.
You are the judge assigned to the case, which you have conducted
as a bench trial by the consent of the parties. Write the portion of
your opinion ﬁnding substantial similarity or the lack thereof. Be as
speciﬁc as you can.

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In the margin are two photographs. Does the one on the bo om infringe on the one on top?
If you said ”yes,” think again. The expression in the photographs
is obviously similar. But that by itself is insuﬃcient. To infringe, the
similarities in protected expression must arise because the defendant
copied from the plaintiﬀ. In this case, the photographs are not similar

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because one of them was photoshopped from the other; instead, they
were taken nearly simultaneously from nearly the same place. See
)PX BO *ODSFEJCMF $PJODJEFODF 4QBSLFE B 'BDFCPPL 1MBHJBSJTN 3PX, The
Telegraph (Feb. 2, 2015). (IP professor Roger Ford has made an BOJ
NBUFE (*' showing that the photographs really were taken from different angles.) Before you start reading the next case, can you think
of any other possible explanations for why two works might be substantially similar even though the defendant did not copy from the
plaintiﬀ?
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In 1994, a jury found that Michael Bolton’s 1991 pop hit, ”Love Is a
Wonderful Thing,” infringed on the copyright of a 1964 Isley Brothers’
song of the same name. The district court denied Bolton’s motion
for a new trial and aﬃrmed the jury’s award of $5.4 million. Bolton,
his co-author, Andrew Goldmark, and their record companies (”Sony
Music”) appeal.

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I. B
The Isley Brothers, one of this country’s most well-known rhythm
and blues groups, have been inducted into the Rock and Roll Hall
of Fame. They helped deﬁne the soul sound of the 1960s with songs
such as ”Shout,” ”Twist and Shout,” and ”This Old Heart of Mine,”
and they mastered the funky beats of the 1970s with songs such as
”Who’s That Lady,” ”Fight the Power,” and ”It’s Your Thing.” In 1964,
the Isley Brothers wrote and recorded ”Love is a Wonderful Thing”
for United Artists. The Isley Brothers received a copyright for ”Love
is a Wonderful Thing” from the Register of Copyrights on February
6, 1964.
Hoping to beneﬁt from the Isley Brothers’ Motown success,
United Artists released ”Love is a Wonderful Thing” in 1966. The
song was not released on an album, only on a 45-record as a single.
Several industry publications predicted that ”Love is a Wonderful
Thing” would be a hit—”Cash Box” on August 27, 1966, ”Gavin Report” on August 26, 1966, and ”Billboard” on September 10, 1966. On
September 17, 1966, Billboard listed ”Love is a Wonderful Thing” at
number 110 in a chart titled ”Bubbling Under the Hot 100.” The song
was never listed on any other Top 100 charts. In 1991, the Isley Brothers’ ”Love is a Wonderful Thing” was released on compact disc.
Michael Bolton is a singer/songwriter who gained popularity in
the late 1980s and early 1990s by reviving the soul sound of the 1960s.
Bolton has orchestrated this soul-music revival in part by covering
old songs such as Percy Sledge’s ”When a Man Love a Woman” and
Otis Redding’s ”(Si in’ on the) Dock of the Bay.” Bolton also has writ-

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

ten his own hit songs. In early 1990, Bolton and Goldmark wrote a
song called ”Love Is a Wonderful Thing.” Bolton released it as a single in April 1991, and as part of Bolton’s album, ”Time, Love and
Tenderness.” Bolton’s ”Love Is a Wonderful Thing” ﬁnished 1991 at
number 49 on Billboard’s year-end pop chart.
On February 24, 1992, Three Boys Music Corporation ﬁled a copyright infringement action.
II. D
Proof of copyright infringement is often highly circumstantial, particularly in cases involving music. A copyright plaintiﬀ must prove
(1) ownership of the copyright; and (2) infringement—that the defendant copied protected elements of the plaintiﬀ’s work. Absent direct
evidence of copying, proof of infringement involves fact-based showings that the defendant had access to the plaintiﬀ’s work and that the
two works are substantially similar. Given the diﬃculty of proving
access and substantial similarity, appellate courts have been reluctant
to reverse jury verdicts in music cases.
A. Access
Proof of access requires an opportunity to view or to copy plaintiﬀ’s work. This is often described as providing a ”reasonable opportunity” or ”reasonable possibility” of viewing the plaintiﬀ’s work.
We have deﬁned reasonable access as ”more than a bare possibility.”
Nimmer has elaborated on our deﬁnition: ”Of course, reasonable
opportunity as here used, does not encompass any bare possibility
in the sense that anything is possible. Access may not be inferred
through mere speculation or conjecture. There must be a reasonable
possibility of viewing the plaintiﬀ’s work—not a bare possibility.”
”At times, distinguishing a ‘bare’ possibility from a ‘reasonable’ possibility will present a close question.”
Circumstantial evidence of reasonable access is proven in one of
two ways: (1) a particular chain of events is established between
the plaintiﬀ’s work and the defendant’s access to that work (such
as through dealings with a publisher or record company), or (2) the
plaintiﬀ’s work has been widely disseminated. Goldstein remarks
that in music cases the ”typically more successful route to proving
access requires the plaintiﬀ to show that its work was widely disseminated through sales of sheet music, records, and radio performances.”
. Nimmer, however, cautioned that ”[c]oncrete cases will pose difﬁcult judgments as to where along the access spectrum a given exploitation falls.”
Proof of widespread dissemination is sometimes accompanied by
a theory that copyright infringement of a popular song was subconscious. Subconscious copying has been accepted since Learned Hand

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embraced it in a 1924 music infringement case: ”Everything registers
somewhere in our memories, and no one can tell what may evoke
it. Once it appears that another has in fact used the copyright as the
source of this 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. In Fred Fisher, Judge Hand found that the
similarities between the songs ”amount[ed] to identity” and that the
infringement had occurred ”probably unconsciously, what he had
certainly often heard only a short time before.”
In modern cases, however, the theory of subconscious copying
has been applied to songs that are more remote in time. ABKCO Music, Inc. v. Harrisongs Music, Ltd. is the most prominent example.
In ABKCO, the Second Circuit aﬃrmed a jury’s verdict that former
Beatle George Harrison, in writing the song ”My Sweet Lord,” subconsciously copied The Chiﬀons’ ”He’s So Fine,” which was released
six years earlier. Harrison admi ed hearing ”He’s So Fine” in 1963,
when it was number one on the Billboard charts in the United States
for ﬁve weeks and one of the top 30 hits in England for seven weeks.
The court found: ”the evidence, standing alone, by no means compels
the conclusion that there was access ... it does not compel the conclusion that there was not.” In ABKCO, however, the court found that
”the similarity was so striking and where access was found, the remoteness of that access provides no basis for reversal.” Furthermore,
the mere lapse of a considerable period of time between the moment
of access and the creation of defendant’s work does not preclude a
ﬁnding of copying.
The Isley Brothers’ access argument was based on a theory of
widespread dissemination and subconscious copying. They presented evidence supporting four principal ways that Bolton and
Goldmark could have had access to the Isley Brothers’ ”Love is a
Wonderful Thing”:
(1) Bolton grew up listening to groups such as the Isley Brothers
and singing their songs. In 1966, Bolton and Goldmark were 13 and
15, respectively, growing up in Connecticut. Bolton testiﬁed that he
had been listening to rhythm and blues music by black singers since
he was 10 or 11, ”appreciated a lot of Black singers,” and as a youth
was the lead singer in a band that performed ”covers” of popular
songs by black singers. Bolton also testiﬁed that his brother had a
”pre y good record collection.”
(2) Three disk jockeys testiﬁed that the Isley Brothers’ song was
widely disseminated on radio and television stations where Bolton
and Goldmark grew up. First, Jerry Blavi testiﬁed that the Isley
Brothers’ ”Love is a Wonderful Thing” was played ﬁve or six times
during a 13-week period on the television show, ”The Discophonic
Scene,” which he said aired in Philadelphia, New York, and Hartford-

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

New Haven. Blavi also testiﬁed that he played the song two to three
times a week as a disk jockey in Philadelphia and that the station is
still playing the song today. Second, Earl Rodney Jones testiﬁed that
he played the song a minimum of four times a day during an eight to
14 to 24 week period on WVON radio in Chicago, and that the station
is still playing the song today. Finally, Jerry Bledsoe testiﬁed that he
played the song on WUFO radio in Buﬀalo, and WWRL radio in New
York was playing the song in New York in 1967 when he went there.
Bledsoe also testiﬁed that he played the song twice on a television
show, ”Soul,” which aired in New York and probably in New Haven,
Connecticut, where Bolton lived.
(3) Bolton confessed to being a huge fan of the Isley Brothers and
a collector of their music. Ronald Isley testiﬁed that when Bolton saw
Isley at the Lou Rawls United Negro College Fund Beneﬁt concert in
1988, Bolton said, ”I know this guy. I go back with him. I have all
his stuﬀ.” Angela Winbush, Isley’s wife, testiﬁed about that meeting
that Bolton said, ”This man needs no introduction. I know everything
he’s done.”
(4) Bolton wondered if he and Goldmark were copying a song by
another famous soul singer. Bolton produced a work tape a empting
to show that he and Goldmark independently created their version of
”Love Is a Wonderful Thing.” On that tape of their recording session,
Bolton asked Goldmark if the song they were composing was Marvin
Gaye’s ”Some Kind of Wonderful.” The district court, in aﬃrming the
jury’s verdict, wrote about Bolton’s Marvin Gaye remark:
This statement suggests that Bolton was contemplating
the possibility that the work he and Goldmark were creating, or at least a portion of it, belonged to someone else,
but that Bolton wasn’t sure who it belonged to. A reasonable jury can infer that Bolton mistakenly a ributed the
work to Marvin Gaye, when in reality Bolton was subconsciously drawing on Plaintiﬀ’s song.
The appellants contend that the Isley Brothers’ theory of access
amounts to a ”twenty-ﬁve-years-after-the-fact-subconscious copying
claim.” Indeed, this is a more a enuated case of reasonable access and
subconscious copying than ABKCO. In this case, the appellants never
admi ed hearing the Isley Brothers’ ”Love is a Wonderful Thing.”
That song never topped the Billboard charts or even made the top
100 for a single week. The song was not released on an album or compact disc until 1991, a year after Bolton and Goldmark wrote their
song. Nor did the Isley Brothers ever claim that Bolton’s and Goldmark’s song is so ”strikingly similar” to the Isley Brothers’ that proof
of access is presumed and need not be proven.
Despite the weaknesses of the Isley Brothers’ theory of reasonable

$)"15&3  $01:3*()5

access, the appellants had a full opportunity to present their case to
the jury. Three rhythm and blues experts (including legendary Motown songwriter Lamont Dozier of Holland-Dozier-Holland fame)
testiﬁed that they never heard of the Isley Brothers’ ”Love is a Wonderful Thing.” Furthermore, Bolton produced copies of ”TV Guide”
from 1966 suggesting that the television shows playing the song
never aired in Connecticut. Bolton also pointed out that 129 songs
called ”Love is a Wonderful Thing” are registered with the Copyright
Oﬃce, 85 of them before 1964.
The Isley Brothers’ reasonable access arguments are not without
merit. Teenagers are generally avid music listeners. It is entirely plausible that two Connecticut teenagers obsessed with rhythm and blues
music could remember an Isley Brothers’ song that was played on
the radio and television for a few weeks, and subconsciously copy
it twenty years later. Furthermore, Ronald Isley testiﬁed that when
they met, Bolton said, ”I have all his stuﬀ.” Finally, as the district
court pointed out, Bolton’s remark about Marvin Gaye and ”Some
Kind of Wonderful” indicates that Bolton believed he may have been
copying someone else’s song.
B. Substantial Similarity
Under our case law, substantial similarity is inextricably linked to the
issue of access. In what is known as the ”inverse ratio rule,” we require a lower standard of proof of substantial similarity when a high
degree of access is shown. Furthermore, in the absence of any proof
of access, a copyright plaintiﬀ can still make out a case of infringement by showing that the songs were ”strikingly similar.”
1. Evidence of Substantial Similarity
Bolton and Goldmark argue that there was insuﬃcient evidence of
substantial similarity because the Isley Brothers’ expert musicologist,
Dr. Gerald Eskelin, failed to show that there was copying of a combination of unprotectible elements. On the contrary, Eskelin testiﬁed that the two songs shared a combination of ﬁve unprotectible
elements: (1) the title hook phrase (including the lyric, rhythm, and
pitch); (2) the shifted cadence; (3) the instrumental ﬁgures; (4) the
verse/chorus relationship; and (5) the fade ending. Although the appellants presented testimony from their own expert musicologist, Anthony Ricigliano, he conceded that there were similarities between
the two songs and that he had not found the combination of unprotectible elements in the Isley Brothers’ song ”anywhere in the prior
art.” The jury heard testimony from both of these experts and ”found
infringement based on a unique compilation of those elements.” We
refuse to interfere with the jury’s credibility determination, nor do
we ﬁnd that the jury’s ﬁnding of substantial similarity was clearly

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

erroneous.
2. Independent Creation
Bolton and Goldmark also contend that their witnesses rebu ed the
Isley Brothers’ prima facie case of copyright infringement with evidence of independent creation. By establishing reasonable access and
substantial similarity, a copyright plaintiﬀ creates a presumption of
copying. The burden shifts to the defendant to rebut that presumption through proof of independent creation.
The appellants’ case of independent creation hinges on three factors: the work tape demonstrating how Bolton and Goldmark created
their song, Bolton and Goldmark’s history of songwriting, and testimony that their arranger, Walter Afanasieﬀ, contributed two of ﬁve
unprotectible elements that they allegedly copied. The jury, however,
heard the testimony of Bolton, Goldmark, Afanasieﬀ, and Ricigliano
about independent creation. The work tape revealed evidence that
Bolton may have subconsciously copied a song that he believed to
be wri en by Marvin Gaye. Bolton and Goldmark’s history of songwriting presents no direct evidence about this case. And Afanasieﬀ’s
contributions to Bolton and Goldmark’s song were described by the
appellants’ own expert as ”very common.” Once again, we refuse
to disturb the jury’s determination about independent creation. The
substantial evidence of copying based on access and substantial similarity was such that a reasonable juror could reject this defense.
3. Inverse-Ratio Rule
Although this may be a weak case of access and a circumstantial case
of substantial similarity, neither issue warrants reversal of the jury’s
verdict. An amicus brief on behalf of the recording and motion picture industries warns against watering down the requirements for
musical copyright infringement. This case presents no such danger.
The Ninth Circuit’s inverse-ratio rule requires a lesser showing of substantial similarity if there is a strong showing of access. In this case,
there was a weak showing of access. We have never held, however,
that the inverse ratio rule says a weak showing of access requires a
stronger showing of substantial similarity. Nor are we redeﬁning the
test of substantial similarity here; we merely ﬁnd that there was substantial evidence from which the jury could ﬁnd access and substantial similarity in this case.
#FF (FFT 1SPCMFN
The plaintiﬀ, Ronald Selle, an amateur musician, recorded a demo
tape of his song “Let It End.” He performed the song several times
with his band in the Chicago area at small local clubs. He sent casse e
tapes of the recording to eleven music companies. Eight returned it

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to him; three never responded. Sometime later, he heard what he
thought was his song playing on the radio; it turned out to be “How
Deep Is Your Love” by the Bee Gees, which was used on the soundtrack to Saturday Night Fever. Selle sued the Bee Gees and their record
company, Polygram.
The Bee Gees were three brothers: Maurice, Robin, and Barry
Gibb. They did not read or write music; instead, they composed their
songs by playing together in a studio, reﬁning their ideas. In discovery and at trial, they testiﬁed that they created “How Deep Is Your
Love” during recording sessions at the Chateau d’Herouville near
Pontoise, a remote village in France about 25 miles northwest of Paris.
Barry Gibb and Blue Weaver, a keyboard player at the sessions, testiﬁed that Weaver played a “beautiful chord” at Barry’s request, and
the two of them reﬁned the idea into a rough “work tape,” which was
produced in evidence.
Selle provided an musicological analysis of the two songs from Arrand Parsons, a professor of music at Northwestern University. Parsons testiﬁed that the ﬁrst eight bars of each song (Theme A) have
twenty-four notes out of thirty-four and forty notes in plaintiﬀ’s and
defendants’ compositions, respectively, that are identical in pitch and
symmetrical positions. Out of thirty-ﬁve rhythmic impulses in plaintiﬀ’s composition and forty in defendants’, thirty are identical. In
the last four bars of both songs (Theme B), fourteen notes in each are
identical in pitch. Of the fourteen rhythmic impulses in Theme B of
both songs, eleven are identical. Finally, both Theme A (the ﬁrst eight
bars) and Theme B (the last four bars) occur in the same position in
each composition. Based on his structural analysis of the two songs,
coupled with his detailed analysis of the melodies of Themes A and
B in both of them, Mr. Parsons gave his opinion that the two songs
could not have been independently created.
Maurice Gibb was then called by the plaintiﬀ as an adverse party
witness. The opening melody from one of the songs was played for
him. He identiﬁed it as “How Deep Is Your Love.” Counsel for the
plaintiﬀ then read a stipulation of the parties that the music which
had been played to Maurice Gibb was “the melody of Theme B, the
ﬁrst two phrases of Ronald Selle’s ‘Let It End.’” Plaintiﬀ rested his
case in chief. Defendants did not call an expert witness to testify.
The jury returned a general verdict of infringement in favor of the
plaintiﬀ, Selle, but the District Court judge entered judgment notwithstanding the verdict for the defendants, and the Court of Appeals afﬁrmed. Who was right: the jury or the judges? You may, if you want,
listen to the plaintiﬀ’s and defendants’ songs. (Should you?)

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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;
“Copies” are 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. The term “copies” includes the material object, other than a
phonorecord, in which the work is ﬁrst ﬁxed.
To “display” a work means to show a copy of it, either directly
or by means of a ﬁlm, slide, television image, or any other device or
process or, in the case of a motion picture or other audiovisual work,
to show individual images nonsequentially.
To “perform” a work means to recite, render, play, dance, or act
it, either directly or by means of any device or process or, in the case
of a motion picture or other audiovisual work, to show its images in
any sequence or to make the sounds accompanying it audible.
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ReDigi markets itself as ”the world’s ﬁrst and only online marketplace for digital used music.” To sell music on ReDigi’s website, a
user must ﬁrst download ReDigi’s ”Media Manager” to his computer.
Once installed, Media Manager analyzes the user’s computer to build
a list of digital music ﬁles eligible for sale.

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After the list is built, a user may upload any of his eligible ﬁles
to ReDigi’s ”Cloud Locker,” an ethereal moniker for what is, in fact,
merely a remote server in Arizona. ReDigi asserts that the process
involves ”migrating” a user’s ﬁle, packet by packet— ”analogous to
a train”—from the user’s computer to the Cloud Locker so that data
does not exist in two places at any one time. Capitol asserts that, semantics aside, ReDigi’s upload process ”necessarily involves copying” a ﬁle from the user’s computer to the Cloud Locker. Regardless,
at the end of the process, the digital music ﬁle is located in the Cloud
Locker and not on the user’s computer. Moreover, Media Manager
deletes any additional copies of the ﬁle on the user’s computer and
connected devices.
If ReDigi determines that the ﬁle has not been tampered with or
oﬀered for sale by another user, the ﬁle is stored in the Cloud Locker,
and the user is given the option of simply storing and streaming the
ﬁle for personal use or oﬀering it for sale in Re-Digi’s marketplace. If
a user chooses to sell his digital music ﬁle, his access to the ﬁle is terminated and transferred to the new owner at the time of purchase.
Thereafter, the new owner can store the ﬁle in the Cloud Locker,
stream it, sell it, or download it to her computer and other devices.
1. Reproduction Rights

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Courts have consistently held that the unauthorized duplication of
digital music ﬁles over the Internet infringes a copyright owner’s exclusive right to reproduce. However, courts have not previously addressed whether the unauthorized transfer of a digital music ﬁle over
the Internet – where only one ﬁle exists before and after the transfer
– constitutes reproduction within the meaning of the Copyright Act.
The Court holds that it does.
ReDigi stresses that it ”migrates” a ﬁle from a user’s computer to
its Cloud Locker, so that the same ﬁle is transferred to the ReDigi
server and no copying occurs. However, even if that were the case,
the fact that a ﬁle has moved from one material object – the user’s
computer – to another—the ReDigi server—means that a reproduction has occurred. Similarly, when a ReDigi user downloads a new
purchase from the ReDigi website to her computer, yet another reproduction is created. It is beside the point that the original phonorecord
no longer exists. It ma ers only that a new phonorecord has been created.
ReDigi struggles to avoid this conclusion by pointing to C.M.
Paula Co. v. Logan, where the defendant used chemicals to lift images oﬀ of greeting cards and place them on plaques for resale. The
court determined that infringement did not occur because ”should
defendant desire to make one hundred ceramic plaques, defendant
would be required to purchase one hundred separate prints.” ReDigi

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argues that, like the defendant in C.M. Paula, its users must purchase
a song on iTunes in order to sell a song on ReDigi. Therefore, no
”duplication” occurs. ReDigi’s argument is unavailing. Ignoring the
questionable merits of the court’s holding in C.M. Paula, ReDigi’s service is distinguishable from the process in that case. There, the copyrighted print, or material object, was lifted from the greeting card and
transferred in toto to the ceramic tile; no new material object was created. By contrast, ReDigi’s service by necessity creates a new material
object when a digital music ﬁle is either uploaded to or downloaded
from the Cloud Locker.
2. Distribution Rights
Like the court in London-Sire Records, Inc. v. John Doe 1, the Court
agrees that ”an electronic ﬁle transfer is plainly within the sort of
transaction that § 106(3) was intended to reach and ﬁts within the
deﬁnition of ‘distribution’ of a phonorecord.” For that reason, ”courts
have not hesitated to ﬁnd copyright infringement by distribution in
cases of ﬁle-sharing or electronic transmission of copyrighted works.”
Arista Records LLC v. Greubel (collecting cases).
There is no dispute that sales occurred on ReDigi’s website. Capitol has established that it was able to buy more than one-hundred of
its own recordings on ReDigi’s webite, and ReDigi itself compiled a
list of its completed sales of Capitol’s recordings. ReDigi, in fact, does
not contest that distribution occurs on its website—it only asserts that
the distribution is protected by the fair use and ﬁrst sale defenses.

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3. Performance and Display Rights
Audio streams are performances because a stream is an electronic
transmission that renders the musical work audible as it is received
by the client-computer’s temporary memory. This transmission, like
a television or radio broadcast, is a performance because there is a
playing of the song that is perceived simultaneously with the transmission.
Public display includes ”show[ing] a copy of [a work], either directly or by means of a ﬁlm, slide, television image, or any other
device or process.” The Ninth Circuit has held that the display of a
photographic image on a computer may implicate the display right,
though infringement hinges, in part, on where the image was hosted.
Capitol alleges that ReDigi infringed its copyrights by streaming
thirty-second song clips and exhibiting album cover art to potential
buyers. ReDigi counters that it only posted such content pursuant to
a licensing agreement and within the terms of that agreement. ReDigi
also asserts that it promptly removed the content when its licenses
were terminated, and instead sent users to YouTube or iTunes for

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previews. Capitol, in response, claims that ReDigi’s use violated the
terms of those licenses and did not cease at the time the licenses were
terminated. As such, there are material disputes as to the source
of the content, whether ReDigi was authorized to transmit the content, when authorization was or was not revoked, and when ReDigi
ceased providing the content. Because the Court cannot determine
whether ReDigi infringed Capitol’s display and performance rights
on the present record, ReDigi’s motion for summary judgment on its
alleged infringement of these exclusive rights is denied.

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CoStar is a national provider of commercial real estate information,
and it claims to have collected the most comprehensive database of
information on commercial real estate markets and commercial properties in the United States and the United Kingdom. LoopNet is an
Internet service provider (”ISP”) whose website allows subscribers,
generally real estate brokers, to post listings of commercial real estate on the Internet. Beginning in early 1998, CoStar became aware
that photographs for which it held copyrights were being posted on
LoopNet’s website by LoopNet’s subscribers.
While the Copyright Act does not require that the infringer know
that he is infringing or that his conduct amount to a willful violation of the copyright owner’s rights, it nonetheless requires conduct
by a person who causes in some meaningful way an infringement.
Were this not so, the Supreme Court could not have held, as it did in
Sony, that a manufacturer of copy machines, possessing constructive
knowledge that purchasers of its machine may be using them to engage in copyright infringement, is not strictly liable for infringement.
This, of course, does not mean that a manufacturer or owner of machines used for copyright violations could not have some indirect liability, such as contributory or vicarious liability. But such extensions
of liability would require a showing of additional elements such as
knowledge coupled with inducement or supervision coupled with a
ﬁnancial interest in the illegal copying.
But to establish direct liability, something more must be shown
than mere ownership of a machine used by others to make illegal
copies. There must be actual infringing conduct with a nexus suﬃciently close and causal to the illegal copying that one could conclude
that the machine owner himself trespassed on the exclusive domain
of the copyright owner. Religious Technology Center v. Netcom Online Communication Services, Inc. described this nexus as requiring
some aspect of volition or causation. Indeed, counsel for both parties agreed at oral argument that a copy machine owner who makes
the machine available to the public to use for copying is not, without

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more, strictly liable under § 106 for illegal copying by a customer. The
ISP in this case is an analogue to the owner of a traditional copying
machine whose customers pay a ﬁxed amount per copy and operate
the machine themselves to make copies. When a customer duplicates
an infringing work, the owner of the copy machine is not considered
a direct infringer. Similarly, an ISP who owns an electronic facility
that responds automatically to users’ input is not a direct infringer.
If the Copyright Act does not hold the owner of the copying machine
liable as a direct infringer when its customer copies infringing material without knowledge of the owner, the ISP should not be found
liable as a direct infringer when its facility is used by a subscriber to
violate a copyright without intervening conduct of the ISP.
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The Copyright Act of 1976 gives a copyright owner the ”exclusive
right” to ”perform the copyrighted work publicly.” The Act’s Transmit Clause deﬁnes that exclusive right as including the right to
”transmit or otherwise communicate a performance ... of
the [copyrighted] work ... to the public, by means of any
device or process, whether the members of the public capable of receiving the performance ... receive it in the
same place or in separate places and at the same time or
at diﬀerent times.”
We must decide whether respondent Aereo, Inc., infringes this exclusive right by selling its subscribers a technologically complex service
that allows them to watch television programs over the Internet at
about the same time as the programs are broadcast over the air. We
conclude that it does.
I
For a monthly fee, Aereo oﬀers subscribers broadcast television programming over the Internet, virtually as the programming is being
broadcast.
Aereo’s system is made up of servers, transcoders, and thousands
of dime-sized antennas housed in a central warehouse. It works
roughly as follows: First, when a subscriber wants to watch a show
that is currently being broadcast, he visits Aereo’s website and selects,
from a list of the local programming, the show he wishes to see.
Second, one of Aereo’s servers selects an antenna, which it dedicates to the use of that subscriber (and that subscriber alone) for the
duration of the selected show. A server then tunes the antenna to
the over-the-air broadcast carrying the show. The antenna begins to
receive the broadcast, and an Aereo transcoder translates the signals

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received into data that can be transmi ed over the Internet.
Third, rather than directly send the data to the subscriber, a server
saves the data in a subscriber-speciﬁc folder on Aereo’s hard drive. In
other words, Aereo’s system creates a subscriber-speciﬁc copy – that
is, a ”personal” copy – of the subscriber’s program of choice.
Fourth, once several seconds of programming have been saved,
Aereo’s server begins to stream the saved copy of the show to the subscriber over the Internet. (The subscriber may instead direct Aereo to
stream the program at a later time, but that aspect of Aereo’s service
is not before us.) The subscriber can watch the streamed program
on the screen of his personal computer, tablet, smart phone, Internetconnected television, or other Internet-connected device. The streaming continues, a mere few seconds behind the over-the-air broadcast,
until the subscriber has received the entire show.
Aereo emphasizes that the data that its system streams to each
subscriber are the data from his own personal copy, made from the
broadcast signals received by the particular antenna allo ed to him.
Its system does not transmit data saved in one subscriber’s folder to
any other subscriber. When two subscribers wish to watch the same
program, Aereo’s system activates two separate antennas and saves
two separate copies of the program in two separate folders. It then
streams the show to the subscribers through two separate transmissions – each from the subscriber’s personal copy.

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II
History makes plain that one of Congress’ primary purposes in
amending the Copyright Act in 1976 was to overturn this Court’s determination that community antenna television (CATV) systems (the
precursors of modern cable systems) fell outside the Act’s scope. In
Fortnightly Corp. v. United Artists Television, Inc., the Court considered a CATV system that carried local television broadcasting, much
of which was copyrighted, to its subscribers in two cities. The CATV
provider placed antennas on hills above the cities and used coaxial
cables to carry the signals received by the antennas to the home television sets of its subscribers. Asked to decide whether the CATV
provider infringed copyright holders’ exclusive right to perform their
works publicly, the Court held that the provider did not ”perform” at
all. The Court drew a line: ”Broadcasters perform. Viewers do not
perform.” And a CATV provider ”falls on the viewer’s side of the
line.”
In 1976 Congress amended the Copyright Act in large part to
reject the Court’s holdings in Fortnightly and Teleprompter Corp. v.
Columbia Broadcasting System, Inc.. The amended statute clariﬁes that
to ”perform” an audiovisual work means ”to show its images in any
sequence or to make the sounds accompanying it audible.” Under

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this new language, both the broadcaster and the viewer of a television program ”perform,” because they both show the program’s images and make audible the program’s sounds. Congress also enacted
the Transmit Clause, which speciﬁes that an entity performs publicly when it ”transmit[s] ... a performance ... to the public.” Cable
system activities, like those of the CATV systems in Fortnightly and
Teleprompter, lie at the heart of the activities that Congress intended
this language to cover. The Clause thus makes clear that an entity that
acts like a CATV system itself performs, even if when doing so, it simply enhances viewers’ ability to receive broadcast television signals.
Congress further created a new section of the Act to regulate cable
companies’ public performances of copyrighted works. Section 111
creates a complex, highly detailed compulsory licensing scheme that
sets out the conditions, including the payment of compulsory fees,
under which cable systems may retransmit broadcasts.
This history makes clear that Aereo is not simply an equipment
provider. Rather, Aereo, and not just its subscribers, ”perform[s]”
(or ”transmit[s]”). Aereo’s activities are substantially similar to those
of the CATV companies that Congress amended the Act to reach.
III
Next, we must consider whether Aereo performs petitioners’ works
”publicly,” within the meaning of the Transmit Clause. As we have
said, an Aereo subscriber receives broadcast television signals with
an antenna dedicated to him alone. Aereo’s system makes from those
signals a personal copy of the selected program. It streams the content of the copy to the same subscriber and to no one else. One and
only one subscriber has the ability to see and hear each Aereo transmission. The fact that each transmission is to only one subscriber, in
Aereo’s view, means that it does not transmit a performance ”to the
public.”
In terms of the Act’s purposes, these diﬀerences do not distinguish Aereo’s system from cable systems, which do perform ”publicly.” Viewed in terms of Congress’ regulatory objectives, why
should any of these technological diﬀerences ma er? They concern
the behind-the-scenes way in which Aereo delivers television programming to its viewers’ screens. They do not render Aereo’s commercial objective any diﬀerent from that of cable companies. Nor
do they signiﬁcantly alter the viewing experience of Aereo’s subscribers. Why would a subscriber who wishes to watch a television
show care much whether images and sounds are delivered to his
screen via a large multisubscriber antenna or one small dedicated antenna, whether they arrive instantaneously or after a few seconds’ delay, or whether they are transmi ed directly or after a personal copy
is made? And why, if Aereo is right, could not modern CATV sys-

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tems simply continue the same commercial and consumer-oriented
activities, free of copyright restrictions, provided they substitute such
new technologies for old? Congress would as much have intended
to protect a copyright holder from the unlicensed activities of Aereo
as from those of cable companies.
The subscribers to whom Aereo transmits television programs
constitute ”the public.” Aereo communicates the same contemporaneously perceptible images and sounds to a large number of people
who are unrelated and unknown to each other. This ma ers because,
although the Act does not deﬁne ”the public,” it speciﬁes that an entity performs publicly when it performs at ”any place where a substantial number of persons outside of a normal circle of a family and
its social acquaintances is gathered.”. The Act thereby suggests that
”the public” consists of a large group of people outside of a family
and friends.
Neither the record nor Aereo suggests that Aereo’s subscribers receive performances in their capacities as owners or possessors of the
underlying works. This is relevant because when an entity performs
to a set of people, whether they constitute ”the public” often depends
upon their relationship to the underlying work. When, for example,
a valet parking a endant returns cars to their drivers, we would not
say that the parking service provides cars ”to the public.” We would
say that it provides the cars to their owners. We would say that a car
dealership, on the other hand, does provide cars to the public, for it
sells cars to individuals who lack a pre-existing relationship to the
cars. Similarly, an entity that transmits a performance to individuals
in their capacities as owners or possessors does not perform to ”the
public,” whereas an entity like Aereo that transmits to large numbers
of paying subscribers who lack any prior relationship to the works
does so perform.
IV
Aereo and many of its supporting amici argue that to apply the Transmit Clause to Aereo’s conduct will impose copyright liability on other
technologies, including new technologies, that Congress could not
possibly have wanted to reach. We agree that Congress, while intending the Transmit Clause to apply broadly to cable companies and
their equivalents, did not intend to discourage or to control the emergence or use of diﬀerent kinds of technologies. But we do not believe
that our limited holding today will have that eﬀect.
Justice SCALIA, with whom Justice THOMAS and Justice ALITO
join, dissenting.
Unlike video-on-demand services, Aereo does not provide a prearranged assortment of movies and television shows. Rather, it as-

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signs each subscriber an antenna that – like a library card – can be
used to obtain whatever broadcasts are freely available. Some of
those broadcasts are copyrighted; others are in the public domain.
The key point is that subscribers call all the shots: Aereo’s automated
system does not relay any program, copyrighted or not, until a subscriber selects the program and tells Aereo to relay it. Aereo’s operation of that system is a volitional act and a but-for cause of the resulting performances, but, as in the case of the copy shop, that degree of
involvement is not enough for direct liability.
That conclusion does not necessarily mean that Aereo’s service
complies with the Copyright Act. Quite the contrary. The Networks’
complaint alleges that Aereo is directly and secondarily liable for infringing their public-performance rights and also their reproduction
rights. Their request for a preliminary injunction – the only issue before this Court – is based exclusively on the direct-liability portion of
the public-performance claim (and further limited to Aereo’s ”watch”
function, as opposed to its ”record” function). Aﬃrming the judgment below would merely return this case to the lower courts for
consideration of the Networks’ remaining claims.
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Notwithstanding the provisions of section 106, the following are not
infringements of copyright:
(1) performance or display of a work by instructors or pupils in
the course of face-to-face teaching activities of a nonproﬁt educational institution, in a classroom or similar place devoted to
instruction, unless, in the case of a motion picture or other audiovisual work, the performance, or the display of individual
images, is given by means of a copy that was not lawfully made
under this title, and that the person responsible for the performance knew or had reason to believe was not lawfully made;
(2) [similar uses in distance education, subject to numerous conditions]
(3) performance of a nondramatic literary or musical work or of a
dramatico-musical work of a religious nature, or display of a
work, in the course of services at a place of worship or other
religious assembly;
(4) performance of a nondramatic literary or musical work otherwise than in a transmission to the public, without any purpose
of direct or indirect commercial advantage and without payment of any fee or other compensation for the performance to
any of its performers, promoters, or organizers … ;
(6) performance … in the course of an annual agricultural or hor-

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ticultural fair … ;
[certain private charitable fundraising performances by nonproﬁt veterans and fraternal organizations]

There are also statutory exclusions from infringement in § 112 for
several types of ”ephemeral recordings” that are made to facilitate
otherwise-lawful transmissions of copyrighted works to the public.
The common thread is that these broadcasts would be harder or impossible without making a copy for the broadcaster’s internal use –
and since the broadcast itself is already either properly licensed or
authorized by the Copyright Act, no harm is done in providing a license for the intermediate copy. The details are complicated.

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This is a copyright and trademark enforcement action against the operators of a swap meet, sometimes called a ﬂea market, where thirdparty vendors routinely sell counterfeit recordings that infringe on
the plaintiﬀ’s copyrights and trademarks.
B
The plaintiﬀ and appellant is Fonovisa, Inc., a California corporation
that owns copyrights and trademarks to Latin/Hispanic music recordings. Fonovisa ﬁled this action in district court against defendantappellee, Cherry Auction, Inc., and its individual operators (collectively “Cherry Auction”). For purposes of this appeal, it is undisputed that Cherry Auction operates a swap meet in Fresno, California,
similar to many other swap meets in this country where customers
come to purchase various merchandise from individual vendors. The
vendors pay a daily rental fee to the swap meet operators in exchange
for booth space. Cherry Auction supplies parking, conducts advertising and retains the right to exclude any vendor for any reason, at
any time, and thus can exclude vendors for patent and trademark
infringement. In addition, Cherry Auction receives an entrance fee
from each customer who a ends the swap meet.
There is also no dispute for purposes of this appeal that Cherry
Auction and its operators were aware that vendors in their swap meet
were selling counterfeit recordings in violation of Fonovisa’s trademarks and copyrights. Indeed, it is alleged that in 1991, the Fresno
County Sheriﬀ’s Department raided the Cherry Auction swap meet
and seized more than 38,000 counterfeit recordings. The following

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year, after ﬁnding that vendors at the Cherry Auction swap meet were
still selling counterfeit recordings, the Sheriﬀ sent a le er notifying
Cherry Auction of the on-going sales of infringing materials, and reminding Cherry Auction that they had agreed to provide the Sheriﬀ
with identifying information from each vendor. In addition, in 1993,
Fonovisa itself sent an investigator to the Cherry Auction site and observed sales of counterfeit recordings.
Although the Copyright Act does not expressly impose liability
on anyone other than direct infringers, courts have long recognized
that in certain circumstances, vicarious or contributory liability will
be imposed.
V
C
I
The concept of vicarious copyright liability was developed in the
Second Circuit as an outgrowth of the agency principles of respondeat superior. The landmark case on vicarious liability for sales of
counterfeit recordings is Shapiro, Bernstein and Co. v. H.L. Green
Co.. In Shapiro, the court was faced with a copyright infringement
suit against the owner of a chain of department stores where a concessionaire was selling counterfeit recordings. Noting that the normal agency rule of respondeat superior imposes liability on an employer for copyright infringements by an employee, the court endeavored to fashion a principle for enforcing copyrights against a defendant whose economic interests were intertwined with the direct infringer’s, but who did not actually employ the direct infringer.
The Shapiro, court looked at the two lines of cases it perceived as
most clearly relevant. In one line of cases, the landlord-tenant cases,
the courts had held that a landlord who lacked knowledge of the
infringing acts of its tenant and who exercised no control over the
leased premises was not liable for infringing sales by its tenant. In
the other line of cases, the so-called “dance hall cases,” the operator of
an entertainment venue was held liable for infringing performances
when the operator (1) could control the premises and (2) obtained a
direct ﬁnancial beneﬁt from the audience, who paid to enjoy the infringing performance.
From those two lines of cases, the Shapiro, court determined that
the relationship between the store owner and the concessionaire in
the case before it was closer to the dance-hall model than to the
landlord-tenant model. It imposed liability even though the defendant was unaware of the infringement. Shapiro deemed the imposition of vicarious liability neither unduly harsh nor unfair because
the store proprietor had the power to cease the conduct of the concessionaire, and because the proprietor derived an obvious and direct
ﬁnancial beneﬁt from the infringement. The test was more clearly
articulated in a later Second Circuit case as follows: “even in the ab-

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sence of an employer-employee relationship one may be vicariously
liable if he has the right and ability to supervise the infringing activity and also has a direct ﬁnancial interest in such activities.” Gershwin
Publishing Corp. v. Columbia Artists Management, Inc..
The district court in this case agreed with defendant Cherry Auction that Fonovisa did not, as a ma er of law, meet either the control or the ﬁnancial beneﬁt prong of the vicarious copyright infringement test articulated in Gershwin, supra. Rather, the district court
concluded that based on the pleadings, Cherry Auction neither supervised nor proﬁted from the vendors’ sales. In the district court’s
view, with respect to both control and ﬁnancial beneﬁt, Cherry Auction was in the same position as an absentee landlord who has surrendered its exclusive right of occupancy in its leased property to its
tenants.
This analogy to absentee landlord is not in accord with the facts
as alleged in the district court and which we, for purposes of appeal,
must accept. The allegations below were that vendors occupied small
booths within premises that Cherry Auction controlled and patrolled.
According to the complaint, Cherry Auction had the right to terminate vendors for any reason whatsoever and through that right had
the ability to control the activities of vendors on the premises. In addition, Cherry Auction promoted the swap meet and controlled the
access of customers to the swap meet area. In terms of control, the
allegations before us are strikingly similar to those in Shapiro, and
Gershwin.
In Shapiro, for example, the court focused on the formal licensing agreement between defendant department store and the direct
infringer-concessionaire. There, the concessionaire selling the bootleg recordings had a licensing agreement with the department store
(H.L. Green Company) that required the concessionaire and its employees to “abide by, observe and obey all regulations promulgated
from time to time by the H.L. Green Company,” and H.L. Green
Company had the “unreviewable discretion” to discharge the concessionaires’ employees. In practice, H.L. Green Company was not
actively involved in the sale of records and the concessionaire controlled and supervised the individual employees. Nevertheless, H.L.
Green’s ability to police its concessionaire — which parallels Cherry
Auction’s ability to police its vendors under Cherry Auction’s similarly broad contract with its vendors – was suﬃcient to satisfy the
control requirement.
We next consider the issue of ﬁnancial beneﬁt. The plaintiﬀ’s allegations encompass many substantive beneﬁts to Cherry Auction from
the infringing sales. These include the payment of a daily rental fee
by each of the infringing vendors; a direct payment to Cherry Auction by each customer in the form of an admission fee, and incidental

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

payments for parking, food and other services by customers seeking
to purchase infringing recordings.
Cherry Auction nevertheless contends that these beneﬁts cannot
satisfy the ﬁnancial beneﬁt prong of vicarious liability because a commission, directly tied to the sale of particular infringing items, is required. They ask that we restrict the ﬁnancial beneﬁt prong to the
precise facts presented in Shapiro, where defendant H.L. Green Company received a 10 or 12 per cent commission from the direct infringers’ gross receipts. Cherry Auction points to the low daily rental
fee paid by each vendor, discounting all other ﬁnancial beneﬁts ﬂowing to the swap meet, and asks that we hold that the swap meet is
materially similar to a mere landlord. The facts alleged by Fonovisa,
however, reﬂect that the defendants reap substantial ﬁnancial beneﬁts from admission fees, concession stand sales and parking fees, all
of which ﬂow directly from customers who want to buy the counterfeit recordings at bargain basement prices. The plaintiﬀ has suﬃciently alleged direct ﬁnancial beneﬁt.
Our conclusion is fortiﬁed by the continuing line of cases, starting
with the dance hall cases, imposing vicarious liability on the operator
of a business where infringing performances enhance the a ractiveness of the venue to potential customers. In Polygram International
Publishing, Inc. v. Nevada/TIG, Inc., for example, direct infringers were
participants in a trade show who used infringing music to communicate with a endees and to cultivate interest in their wares. The court
held that the trade show participants “derived a signiﬁcant ﬁnancial
beneﬁt from the a ention” that a endees paid to the infringing music. In this case, the sale of pirated recordings at the Cherry Auction
swap meet is a “draw” for customers, as was the performance of pirated music in the dance hall cases and their progeny.
Plaintiﬀs have stated a claim for vicarious copyright infringement.
C
C
I
Contributory infringement originates in tort law and stems from the
notion that one who directly contributes to another’s infringement
should be held accountable. Contributory infringement has been described as an outgrowth of enterprise liability, and imposes liability
where one person knowingly contributes to the infringing conduct
of another. The classic statement of the doctrine is in Gershwin: “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.”
There is no question that plaintiﬀ adequately alleged the element
of knowledge in this case. The disputed issue is whether plaintiﬀ adequately alleged that Cherry Auction materially contributed to the
infringing activity. We have li le diﬃculty in holding that the alle-

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gations in this case are suﬃcient to show material contribution to
the infringing activity. Indeed, it would be diﬃcult for the infringing activity to take place in the massive quantities alleged without
the support services provided by the swap meet. These services include, inter alia, the provision of space, utilities, parking, advertising,
plumbing, and customers.
Here again Cherry Auction asks us to ignore all aspects of the enterprise described by the plaintiﬀs, to concentrate solely on the rental
of space, and to hold that the swap meet provides nothing more. Yet
Cherry Auction actively strives to provide the environment and the
market for counterfeit recording sales to thrive. Its participation in
the sales cannot be termed “passive,” as Cherry Auction would prefer.
The district court apparently took the view that contribution to
infringement should be limited to circumstances in which the defendant “expressly promoted or encouraged the sale of counterfeit
products, or in some manner protected the identity of the infringers.”
Given the allegations that the local sheriﬀ lawfully requested that
Cherry Auction gather and share basic, identifying information about
its vendors, and that Cherry Auction failed to comply, the defendant appears to qualify within the last portion of the district court’s
own standard that posits liability for protecting infringers’ identities.
Moreover, we agree with the Third Circuit’s analysis in Columbia Pictures Industries, Inc. v. Aveco, Inc. that providing the site and facilities
for known infringing activity is suﬃcient to establish contributory
liability.
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 64
Petitioners manufacture and sell home video tape recorders [the ”Betamax”]. 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.
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 fact that its 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 appropriate to refer because of the historic kinship between patent law and copyright law.

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

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, 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.
[The Court held that the Betamax was capable of two substantial
nonnfringing uses. The ﬁrst was recording programs for later viewing (”time-shifting”) with the permission of the copyright owner. Religious and educational broadcasters (including Fred Rogers of Mister
Rogers’ Neighborhood) testiﬁed that they did not object to time-shifting.
The second noninfringing use was time-shifting even without broadcaster permission, which was protected as fair use.]
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 64
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.
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You work for a copyright owner who is determined to bring suit
against the following. In each case, identify every theory of copyright liability available. Be sure to consider both the diﬀerent § 106
rights and the various ﬂavors of secondary liability. Be creative.
• A woman calling herself Makeover Morticia gives tutorials on
how to put on makeup eﬀectively, which she livesstreams on
a Google Hangout. She is paid by makeup companies to use
their products and promote them on her streams. She regularly streams music from Spotify over her computer speakers
as she works; this background music is audible to her viewers.
Sometimes she turns up the music and tells the audience, ”You
should totally download this.”

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• Terminations is a best-selling dystopian young-adult novel. Fannie Frederickson, a young adult, writes a sequel in the form of a
play, which she titles Reversions. Her high school’s drama club
performs Reversions as its annual fall drama. It gives three performances, for which it charges $5 admission; the proceeds are
used to pay for a cast party at a local diner.
• The Renton Theater obtains a digital copy of the movie Rager
under a license permi ing it exhibition at a single theater. But
in addition to showing the movie in its own theater, Renton repeatedly duplicates Rager and rents out the copies to ten other
movie theaters.
• Diversion Devices sells high-capacity digital video recorders
with DVD-R drives. Some buyers of Diversion’s DVRs use them
to record television programs onto DVRs, which they give as
presents to friends, family, and co-workers.

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(a)

Violations Regarding Circumvention of Technological Measures. –
(1) (A) No person shall circumvent a technological measure
that eﬀectively controls access to a work protected under this title.
(2) No person shall manufacture, import, oﬀer to the public,
provide, or otherwise traﬃc in any technology, product,
service, device, component, or part thereof, that –
(A) is primarily designed or produced for the purpose of
circumventing a technological measure that eﬀectively
controls access to a work protected under this title;
(B) has only limited commercially signiﬁcant purpose or
use other than to circumvent a technological measure
that eﬀectively controls access to a work protected under this title; or
(C) is marketed by that person or another acting in concert with that person with that person’s knowledge for
use in circumventing a technological measure that effectively controls access to a work protected under this
title.
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Blizzard Entertainment, Inc. (”Blizzard”) is the creator of World of
Warcraft (”WoW”), a popular multiplayer online role-playing game
in which players interact in a virtual world while advancing through
the game’s 70 levels. MDY Industries, LLC and its sole member
Michael Donnelly (”Donnelly”) (sometimes referred to collectively
as ”MDY”) developed and sold Glider, a software program that automatically plays the early levels of WoW for players.As explained
in the Frequently Asked Questions (”FAQ”) on MDY’s website for
Glider:
Glider ... moves the mouse around and pushes keys on
the keyboard. You tell it about your character, where you
want to kill things, and when you want to kill. Then it kills
for you, automatically. You can do something else, like eat
dinner or go to a movie, and when you return, you’ll have
a lot more experience and loot.
Glider does not alter or copy WoW’s game client software, does not
allow a player to avoid paying monthly subscription dues to Blizzard,
and has no commercial use independent of WoW.
The parties dispute Glider’s impact on the WoW experience. Blizzard contends that Glider disrupts WoW’s environment for nonGlider players by enabling Glider users to advance quickly and unfairly through the game and to amass additional game assets. MDY
contends that Glider has a minimal eﬀect on non-Glider players, enhances the WoW experience for Glider users, and facilitates disabled
players’ access to WoW by auto-playing the game for them.
After MDY began selling Glider, Blizzard launched Warden, its
technology designed to prevent players who used bots from connecting to the WoW servers. Blizzard used Warden to ban most Glider
users in September 2005. Blizzard claims that MDY is liable under DMCA S 1201(a)(2) and (b)(1) because it thereafter programmed
Glider to avoid detection by Warden.
Warden has two components. The ﬁrst is a software module
called ”scan.dll,” which scans a computer’s RAM prior to allowing
the player to connect to WoW’s servers. If scan.dll detects that a bot
is running, such as Glider, it will not allow the player to connect and
play. After Blizzard launched Warden, MDY reconﬁgured Glider
to circumvent scan.dll by not loading itself until after scan.dll completed its check. Warden’s second component is a ”resident” component that runs periodically in the background on a player’s computer
when it is connected to WoW’s servers. It asks the computer to report
portions of the WoW code running in RAM, and it looks for pa erns
of code associated with known bots or cheats. If it detects a bot or
cheat, it boots the player from the game, which halts the computer’s
copying of copyrighted code into RAM.

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The district court assessed whether MDY violated DMCA
§ 1201(a)(2) and (b)(1) with respect to three WoW components. First,
the district court considered the game client software’s literal elements: the source code stored on players’ hard drives. Second, the
district court considered the game client software’s individual nonliteral elements: the 400,000+ discrete visual and audible components
of the game, such as a visual image of a monster or its audible roar.
Finally, it considered the game’s dynamic non-literal elements: that
is, the ”real-time experience of traveling through diﬀerent worlds,
hearing their sounds, viewing their structures, encountering their inhabitants and monsters, and encountering other players.”
Although the text suﬃces to resolve the issues before us, we also
consider the legislative history in order to address the parties’ arguments concerning it. Our review of that history supports the view
that Congress created a new anticircumvention right in S 1201(a)(2)
independent of traditional copyright infringement.
The Federal Circuit has adopted a diﬀerent approach to the
DMCA. In essence, it requires S 1201(a) plaintiﬀs to demonstrate that
the circumventing technology infringes or facilitates infringement of
the plaintiﬀ’s copyright (an ”infringement nexus requirement”). See
Chamberlain Group, Inc. v. Skylink Techs., Inc.; Storage Tech. Corp. v.
Custom Hardware Eng’g & Consulting, Inc..
In Chamberlain, the plaintiﬀ sold garage door openers (”GDOs”)
with a ”rolling code” security system that purportedly reduced the
risk of crime by constantly changing the transmi er signal necessary
to open the door.Customers used the GDOs’ transmi ers to send the
changing signal, which in turn opened or closed their garage doors.
Plaintiﬀ sued the defendant, who sold ”universal” GDO transmitters for use with plaintiﬀ’s GDOs, under S 1201(a)(2). The plaintiﬀ
alleged that its GDOs and transmi ers both contained copyrighted
computer programs and that its rolling code security system was a
technological measure that controlled access to those programs. Accordingly, plaintiﬀ alleged that the defendant – by selling GDO transmi ers that were compatible with plaintiﬀ’s GDOs – had traﬃcked in
a technology that was primarily used for the circumvention of a technological measure (the rolling code security system) that eﬀectively
controlled access to plaintiﬀ’s copyrighted works.
The Federal Circuit rejected the plaintiﬀ’s claim, holding that the
defendant did not violate § 1201(a)(2) because, inter alia, the defendant’s universal GDO transmi ers did not infringe or facilitate infringement of the plaintiﬀ’s copyrighted computer programs. The
linchpin of the Chamberlain court’s analysis is its conclusion that
DMCA coverage is limited to a copyright owner’s rights under the
Copyright Act as set forth in § 106 of the Copyright Act. Thus,
it held that § 1201(a) did not grant copyright owners a new anti-

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

circumvention right, but instead, established new causes of action
for a defendant’s unauthorized access of copyrighted material when
it infringes upon a copyright owner’s rights under § 106. Id. at 1192,
1194. Accordingly, a § 1201(a)(2) plaintiﬀ was required to demonstrate a nexus to infringement — i.e., that the defendant’s traﬃcking
in circumventing technology had a ”reasonable relationship” to the
protections that the Copyright Act aﬀords copyright owners.
While we appreciate the policy considerations expressed by the
Federal Circuit in Chamberlain, we are unable to follow its approach
because it is contrary to the plain language of the statute.
We agree with the district court that MDY’s Glider does not violate DMCA § 1201(a)(2) with respect to WoW’s literal elements and
individual non-literal elements, because Warden does not eﬀectively
control access to these WoW elements. First, Warden does not control access to WoW’s literal elements because these elements — the
game client’s software code — are available on a player’s hard drive
once the game client software is installed. Second, as the district court
found:
WoW’s individual nonliteral components may be accessed by a user without signing on to the server. As was
demonstrated during trial, an owner of the game client
software may use independently purchased computer
programs to call up the visual images or the recorded
sounds within the game client software. For instance, a
user may call up and listen to the roar a particular monster makes within the game. Or the user may call up a
virtual image of that monster. Since a player need not encounter Warden to access WoW’s individual non-literal
elements, Warden does not eﬀectively control access to
those elements.
Our conclusion is in accord with the Sixth Circuit’s decision in Lexmark International v. Static Control Components. In Lexmark, the plaintiﬀ sold laser printers equipped with an authentication sequence, veriﬁed by the printer’s copyrighted software, that ensured that only
plaintiﬀ’s own toner cartridges could be inserted into the printers.
The defendant sold microchips capable of generating an authentication sequence that rendered other manufacturers’ cartridges compatible with plaintiﬀ’s printers.
The Sixth Circuit held that plaintiﬀ’s § 1201(a)(2) claim failed because its authentication sequence did not eﬀectively control access
to its copyrighted computer program. Rather, the mere purchase of
one of plaintiﬀ’s printers allowed ”access” to the copyrighted program. Any purchaser could read the program code directly from the
printer memory without encountering the authentication sequence.

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The authentication sequence thus blocked only one form of access:
the ability to make use of the printer. However, it left intact another
form of access: the review and use of the computer program’s literal
code.
The Sixth Circuit explained:
Just as one would not say that a lock on the back door of a
house ”controls access” to a house whose front door does
not contain a lock and just as one would not say that a lock
on any door of a house ”controls access” to the house after
its purchaser receives the key to the lock, it does not make
sense to say that this provision of the DMCA applies to
otherwise-readily-accessible copyrighted works. Add to
this the fact that the DMCA not only requires the technological measure to ”control access” but requires the measure to control that access ”eﬀectively,” and it seems clear
that this provision does not naturally extend to a technological measure that restricts one form of access but leaves
another route wide open.

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Here, a player’s purchase of the WoW game client allows access to
the game’s literal elements and individual non-literal elements. Warden blocks one form of access to these elements: the ability to access
them while connected to a WoW server. However, analogously to the
situation in Lexmark, Warden leaves open the ability to access these
elements directly via the user’s computer. We conclude that Warden
is not an eﬀective access control measure with respect to WoW’s literal elements and individual non-literal elements, and therefore, that
MDY does not violate § 1201(a)(2) with respect to these elements.
We conclude that MDY meets each of the six textual elements for
violating § 1201(a)(2) with respect to WoW’s dynamic non-literal elements. That is, MDY (1) traﬃcs in (2) a technology or part thereof (3)
that is primarily designed, produced, or marketed for, or has limited
commercially signiﬁcant use other than (4) circumventing a technological measure (5) that eﬀectively controls access (6) to a copyrighted
work.
The ﬁrst two elements are met because MDY ”traﬃcs in a technology or part thereof” — that is, it sells Glider. The third and fourth
elements are met because Blizzard has established that MDY markets
Glider for use in circumventing Warden, thus satisfying the requirement of § 1201(a)(2)(C). Indeed, Glider has no function other than to
facilitate the playing of WoW. The sixth element is met because, as
the district court held, WoW’s dynamic non-literal elements constitute a copyrighted work. See, e.g., Atari Games Corp. v. Oman (the
audiovisual display of a computer game is copyrightable independently from the software program code, even though the audiovisual

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

display generated is partially dependent on user input).
The ﬁfth element is met because Warden is an eﬀective access control measure. Both of Warden’s two components ”require[] the application of information, or a process or a treatment ... to gain access to
the work.” For a player to connect to Blizzard’s servers which provide access to WoW’s dynamic non-literal elements, scan.dll must
scan the player’s computer RAM and conﬁrm the absence of any bots
or cheats. The resident component also requires a ”process” in order
for the user to continue accessing the work: the user’s computer must
report portions of WoW code running in RAM to the server. Moreover, Warden’s provisions were put into place by Blizzard, and thus,
function ”with the authority of the copyright owner.” Accordingly,
Warden eﬀectively controls access to WoW’s dynamic non-literal elements. We hold that MDY is liable under § 1201(a)(2) with respect to
WoW’s dynamic non-literal elements.
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(a)

False Copyright Management Information. – No person shall
knowingly and with the intent to induce, enable, facilitate, or
conceal infringement –
(1) provide copyright management information that is false,
or
(2) distribute … copyright management information that is
false.
(b) Removal or Alteration of Copyright Management Information. – No
person shall, without the authority of the copyright owner or
the law –
(1) intentionally remove or alter any copyright management
information, …
knowing, or, with respect to civil remedies under section 1203,
having reasonable grounds to know, that it will induce, enable,
facilitate, or conceal an infringement of any right under this title.
(c) Deﬁnition. – As used in this section, the term “copyright management information” means any of the following information
conveyed in connection with copies or phonorecords of a work
or performances or displays of a work, including in digital
form, except that such term does not include any personally
identifying information about a user of a work or of a copy,
phonorecord, performance, or display of a work:
(1) The title and other information identifying the work, including the information set forth on a notice of copyright.

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(2)
(3)

(5)

(6)
(7)
(8)

The name of, and other identifying information about, the
author of a work.
The name of, and other identifying information about, the
copyright owner of the work, including the information set
forth in a notice of copyright.
With the exception of public performances of works by radio and television broadcast stations, in the case of an audiovisual work, the name of, and other identifying information about, a writer, performer, or director who is credited in the audiovisual work.
Terms and conditions for use of the work.
Identifying numbers or symbols referring to such information or links to such information.
Such other information as the Register of Copyrights may
prescribe by regulation.

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In 2006, Murphy was hired by the magazine New Jersey Monthly
(“NJM ”) to take a photo of Craig Carton and Ray Rossi, who at the
time were the hosts of a show on the New Jersey radio station WKXW,
which is owned by Millennium Radio Group. NJM used the photo to
illustrate an article in its “Best of New Jersey” issue naming Carton
and Rossi “best shock jocks” in the state. The photo (“the Image”) depicted Carton and Rossi standing, apparently nude, behind a WKXW
sign. Murphy retained the copyright to the Image.
An unknown employee of WKXW then scanned in the Image from
NJM and posted the resulting electronic copy to the WKXW website and to another website, myspacetv.com. The resulting image, as
scanned and posted to the Internet, cut oﬀ part of the original NJM
caption referring to the “Best of New Jersey” award. It also eliminated NJM’s gu er credit (that is, a credit placed in the inner margin,
or “gu er,” of a magazine page, ordinarily printed in a smaller type
and running perpendicular to the relevant image on the page) identifying Murphy as the author of the Image. The WKXW website invited visitors to alter the Image using photo-manipulation software
and submit the resulting versions to WKXW. A number of visitors
eventually submi ed their versions of the photo to WKXW, and it
posted 26 of those submissions to its site. The Station Defendants
never received Murphy’s permission to make use of the Image.
In April 2008, Murphy sued the Station Defendants for violations
of § 1202 of the Digital Millennium Copyright Act of 1998 (“DMCA”).
Murphy’s argument is straightforward. He contends that the

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NJM gu er credit identifying him as the author of the Image is CMI
because it is “the name of ... the author of [the Image]” and was “conveyed in connection with copies of [the Image].” By posting the Image on the two websites without the credit, therefore, the Station Defendants “remove[d] or alter[ed]” CMI and “distribute [d]” a work
knowing that its CMI had been “removed or altered” in violation of
§ 1202.
The Station Defendants, on the other hand, insist that one cannot
read § 1202 in isolation, but must interpret it in conjunction with §
1201 and in light of the legislative history of the DMCA to impose
an additional limitation on the deﬁnition of CMI. They argue that
the chapter as a whole protects various kinds of automated systems
which protect and manage copyrights. Speciﬁcally, § 1201 covers the
systems (the “technological measures” discussed above) that protect
copyrighted materials and § 1202 covers the systems that manage
copyrighted materials (such as the name of the author of a work).
Therefore, they conclude, despite the apparently plain language of
§ 1202, information like the name of the author of a work is not CMI
unless it also functions as part of an “automated copyright protection or management system.” In other words, to remove, as the Station Defendants did, a printed credit from a magazine photograph
which was then posted to a website does not violate § 1202, because
the credit, although apparently meeting the deﬁnition of § 1202(c)(2),
was not part of an “automated copyright protection or management
system.”
Read in isolation, § 1202 simply establishes a cause of action for
the removal of (among other things) the name of the author of a work
when it has been “conveyed in connection with copies of” the work.
The statute imposes no explicit requirement that such information be
part of an “automated copyright protection or management system,”
as the Station Defendants claim. In fact, it appears to be extremely
broad, with no restrictions on the context in which such information
must be used in order to qualify as CMI. If there is a diﬃculty here,
it is a problem of policy, not of logic.

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(a)

Notwithstanding the provisions of section 106(3), the owner of
a particular copy or phonorecord lawfully made under this title,
or any person authorized by such owner, is entitled, without the

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authority of the copyright owner, to sell or otherwise dispose of
the possession of that copy or phonorecord.
(b) Notwithstanding the provisions of subsection (a), unless authorized by the owners of copyright in the sound recording or the
owner of copyright in a computer program and in the case of
a sound recording in the musical works embodied therein, neither the owner of a particular phonorecord nor any person in
possession of a particular copy of a computer program may,
for the purposes of direct or indirect commercial advantage,
dispose of, or authorize the disposal of, the possession of that
phonorecord or computer program by rental, lease, or lending.
(c) Notwithstanding the provisions of section 106(5), the owner of
a particular copy lawfully made under this title, or any person
authorized by such owner, is entitled, without the authority of
the copyright owner, to display that copy publicly, either directly or by the projection of no more than one image at a time,
to viewers present at the place where the copy is located.
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Like many music companies, UMG ships specially-produced promotional CDs to a large group of individuals (“recipients”), such as
music critics and radio programmers, that it has selected. There is
no prior agreement or request by the recipients to receive the CDs.
UMG does not seek or receive payment for the CDs, the content and
design of which often diﬀers from that of their commercial counterparts. UMG ships the promotional CDs by means of the United States
Postal Service and United Parcel Service. Relatively few of the recipients refuse delivery of the CDs or return them to UMG, and UMG
destroys those that are returned.
Most of the promotional CDs in issue in this case bore a statement
(the “promotional statement”) similar to the following:
This CD is the property of the record company and is licensed to the intended recipient for personal use only. Acceptance of this CD shall constitute an agreement to comply with the terms of the license. Resale or transfer of possession is not allowed and may be punishable under federal and state laws. Some of the CDs bore a more succinct
statement, such as “Promotional Use Only—Not for Sale.”
Augusto was not among the select group of individuals slated to receive the promotional CDs. He nevertheless managed to acquire numerous such CDs, many of which he sold through online auctions at

' %&'&/4&4

eBay.com. Augusto regularly advertised the CDs as “rare industry
editions” and referred to them as “Promo CDs.”
After several unsuccessful a empts at halting the auctions
through eBay’s dispute resolution program, UMG ﬁled a complaint
against Augusto in the United States District Court for the Central
District of California, alleging that Augusto had infringed UMG’s
copyrights in eight promotional CDs for which it retained the “exclusive right to distribute.”
Although UMG, as the owner of the copyright, has exclusive
rights in the promotional CDs, exemptions, compulsory licenses, and
defenses found in the Copyright Act narrow those rights. Augusto
invokes the “ﬁrst sale” doctrine embodied in § 109(a) of the Act. 17
U.S.C. § 109(a). He argues that the circumstances a ending UMG’s
distribution of the discs eﬀected a “sale” (transfer of ownership) of
the discs to the original recipients and that, under the “ﬁrst sale” doctrine, the recipients and subsequent owners of those particular copies
were permi ed to sell or otherwise dispose of those copies without
authorization by the copyright holder.
UMG, on the other hand, contends that the promotional statement
eﬀected a license with the recipients and, because the recipients were
not owners but licensees of the CDs, neither they nor Augusto were
entitled to sell or otherwise transfer the CDs.
Notwithstanding its distinctive name, the ﬁrst sale doctrine applies not only when a copy is ﬁrst sold, but when a copy is given
away or title is otherwise transferred without the accouterments of a
sale. The seminal illustration of the principle is found in Bobbs-Merrill
Co. v. Straus, where a copyright owner unsuccessfully a empted to
restrain the resale of a copyrighted book by including in it the following notice: “The price of this book at retail is $1 net. No dealer is
licensed to sell it at a less price, and a sale at less price will be treated
as an infringement of the copyright.” The Court noted that the statutory grant to a copyright owner of the “sole right of vending” the
work did not continue after the ﬁrst sale of a given copy. “The purchaser of a book, once sold by authority of the owner of the copyright,
may sell it again, although he could not publish a new edition of it.”
The a empt to limit resale below a certain price was therefore held
invalid.
The rule of Bobbs-Merrill remains in full force, enshrined as it is in
§ 109(a) of the Act: a copyright owner who transfers title in a particular copy to a purchaser or donee cannot prevent resale of that
particular copy. We have recognized, however, that not every transfer of possession of a copy transfers title. Particularly with regard to
computer software, we have recognized that copyright owners may
create licensing arrangements so that users acquire only a license to
use the particular copy of software and do not acquire title that per-

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mits further transfer or sale of that copy without the permission of
the copyright owner.
The same question is presented here. Did UMG succeed in creating a license in recipients of its promotional CDs, or did it convey
title despite the restrictive labeling on the CDs? We conclude that,
under all the circumstances of the CDs’ distribution, the recipients
were entitled to use or dispose of them in any manner they saw ﬁt,
and UMG did not enter a license agreement for the CDs with the recipients. Accordingly, UMG transferred title to the particular copies
of its promotional CDs and cannot maintain an infringement action
against Augusto for his subsequent sale of those copies.
Our conclusion that the recipients acquired ownership of the CDs
is based largely on the nature of UMG’s distribution. First, the promotional CDs are dispatched to the recipients without any prior arrangement as to those particular copies. The CDs are not numbered,
and no a empt is made to keep track of where particular copies are
or what use is made of them. As explained in greater detail below,
although UMG places wri en restrictions in the labels of the CDs, it
has not established that the restrictions on the CDs create a license
agreement.
We also hold that, because the CDs were unordered merchandise,
the recipients were free to dispose of them as they saw ﬁt under the
Unordered Merchandise Statute, 39 U.S.C. § 3009, which provides in
pertinent part that,
(a) [e]xcept for free samples clearly and conspicuously marked as
such, the mailing of unordered merchandise constitutes an unfair method of competition and an unfair trade practice.
(b) Any merchandise mailed in violation of subsection (a) of this
section may be treated as a gift by the recipient, who shall have
the right to retain, use, discard, or dispose of it in any manner
he sees ﬁt without any obligation whatsoever to the sender.
There are additional reasons for concluding that UMG’s distribution
of the CDs did not involve a consensual licensing operation. Some of
the statements on the CDs and UMG’s purported method of securing
agreement to licenses militate against a conclusion that any licenses
were created. The sparest promotional statement, “Promotional Use
Only—Not for Sale,” does not even purport to create a license. But
even the more detailed statement is ﬂawed in the manner in which it
purports to secure agreement from the recipient. The more detailed
statement provides:
This CD is the property of the record company and is licensed to the intended recipient for personal use only. Acceptance of this CD shall constitute an agreement to comply with the terms of the license. Resale or transfer of pos-

' %&'&/4&4

session is not allowed and may be punishable under federal and state laws.
It is one thing to say, as the statement does, that “acceptance” of the
CD constitutes an agreement to a license and its restrictions, but it is
quite another to maintain that “acceptance” may be assumed when
the recipient makes no response at all. This record reﬂects no responses. Even when the evidence is viewed in the light most favorable to UMG, it does not show that any recipients agreed to enter into
a license agreement with UMG when they received the CDs.
Because the record here is devoid of any indication that the recipients agreed to a license, there is no evidence to support a conclusion
that licenses were established under the terms of the promotional
statement. Accordingly, we conclude that UMG’s transfer of possession to the recipients, without meaningful control or even knowledge
of the status of the CDs after shipment, accomplished a transfer of title.
Because we conclude that UMG’s method of distribution transferred the ownership of the copies to the recipients, we have no
need to parse the remaining provisions in UMG’s purported licensing statement; UMG dispatched the CDs in a manner that permi ed
their receipt and retention by the recipients without the recipients accepting the terms of the promotional statements. UMG’s transfer of
unlimited possession in the circumstances present here eﬀected a gift
or sale within the meaning of the ﬁrst sale doctrine.
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Annie Lee creates works of art, which she sells through her ﬁrm Annie Lee & Friends. Deck the Walls, a chain of outlets for modestly
priced art, is among the buyers of her works, which have been registered with the Register of Copyrights. One Deck the Walls store
sold some of Lee’s notecards and small lithographs to A.R.T. Company, which mounted the works on ceramic tiles (covering the art
with transparent epoxy resin in the process) and resold the tiles. Lee
contends that these tiles are derivative works, which under 17 U.S.C.
§ 106(2) may not be prepared without the permission of the copyright proprietor. She seeks both monetary and injunctive relief. Her
position has the support of two cases holding that A.R.T.’s business
violates the copyright laws.

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. Mirage Editions the only full appellate discussion, dealt with pages
cut from books and mounted on tiles; the court of appeals’ brief order
in Muñoz concludes that the reasoning of Mirage Editions is equally
applicable to works of art that were sold loose.
Now one might suppose that this is an open and shut case under
the doctrine of ﬁrst sale, codiﬁed at 17 U.S.C. § 109(a). A.R.T. bought
the work legitimately, mounted it on a tile, and resold what it had
purchased. Because the artist could capture the value of her art’s contribution to the ﬁnished product as part of the price for the original
transaction, the economic rationale for protecting an adaptation as
“derivative” is absent. An alteration that includes (or consumes) a
complete copy of the original lacks economic signiﬁcance. One work
changes hands multiple times, exactly what § 109(a) permits, so it
may lack legal signiﬁcance too. But § 106(2) creates a separate exclusive right, to “prepare derivative works”, and Lee believes that
aﬃxing the art to the tile is “preparation,” so that A.R.T. would have
violated § 106(2) even if it had dumped the ﬁnished tiles into the Marianas Trench. For the sake of argument we assume that this is so and
ask whether card-on-a-tile is a “derivative work” in the ﬁrst place.
“Derivative work” is a deﬁned term:
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A “derivative work” is a work based upon one or more
preexisting works, such as a translation, musical arrangement, dramatization, ﬁctionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modiﬁcations which, as a whole, represent an original work of
authorship, is a “derivative work”.
The district court concluded that A.R.T.’s mounting of Lee’s works on
tile is not an “original work of authorship” because it is no diﬀerent
in form or function from displaying a painting in a frame or placing a
medallion in a velvet case. No one believes that a museum violates §
106(2) every time it changes the frame of a painting that is still under
copyright, although the choice of frame or glazing aﬀects the impression the art conveys, and many artists specify frames (or pedestals
for sculptures) in detail. Muñoz and Mirage Editions acknowledge
that framing and other traditional means of mounting and displaying art do not infringe authors’ exclusive right to make derivative
works. Nonetheless, the ninth circuit held, what A.R.T. does creates a
derivative work because the epoxy resin bonds the art to the tile. Our
district judge thought this a distinction without a diﬀerence, and we
agree.

' %&'&/4&4

Assume for the moment that the ﬁrst sentence [of the deﬁnition of
”derivative work”] recognizes a set of non-original derivative works.
To prevail, then, Lee must show that A.R.T. altered her works in one
of the ways mentioned in the ﬁrst sentence. The tile is not an “art
reproduction”; A.R.T. purchased and mounted Lee’s original works.
That leaves the residual clause: “any other form in which a work
may be recast, transformed, or adapted.” None of these words ﬁts
what A.R.T. did. Lee’s works were not “recast” or “adapted”. “Transformed” comes closer and gives the ninth circuit some purchase for
its view that the permanence of the bond between art and base matters. Yet the copyrighted note cards and lithographs were not “transformed” in the slightest. The art was bonded to a slab of ceramic,
but it was not changed in the process. It still depicts exactly what it
depicted when it left Lee’s studio. If mounting works a “transformation,” then changing a painting’s frame or a photograph’s mat equally
produces a derivative work. Indeed, if Lee is right about the meaning of the deﬁnition’s ﬁrst sentence, then any alteration of a work,
however slight, requires the author’s permission. We asked at oral
argument what would happen if a purchaser jo ed a note on one of
the note cards, or used it as a coaster for a drink, or cut it in half,
or if a collector applied his seal (as is common in Japan); Lee’s counsel replied that such changes prepare derivative works, but that as a
practical ma er artists would not ﬁle suit. A deﬁnition of derivative
work that makes criminals out of art collectors and tourists is jarring
despite Lee’s gracious oﬀer not to commence civil litigation.
We therefore decline to follow Muñoz and Mirage Editions.
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We think the right of repair with respect to a copyrighted book sold,
to the extent to which that right is here claimed, may not properly
be denied. These books had been in use by school children. Some
were wri en upon and defaced; some were soiled and torn; the covers of some were wholly or partially destroyed, and the binding had
become imperfect. To render these books serviceable for use or sale,
it became necessary to clean them, to trim the edges of the leaves, and
to rebind them. We think that, so far as respects the copyright laws
of the United States, no legal right of the appellee was invaded by so
doing.
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As an initial ma er, it should be noted that the ﬁrst sale defense is,
by its own terms, limited to assertions of the distribution right. Because the Court has concluded that ReDigi’s service violates Capitol’s

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reproduction right, the ﬁrst sale defense does not apply to ReDigi’s
infringement of those rights.
In addition, the ﬁrst sale doctrine does not protect ReDigi’s distribution of Capitol’s copyrighted works. This is because, as an
unlawful reproduction, a digital music ﬁle sold on ReDigi is not
”lawfully made under this title.” 17 U.S.C. § 109(a). Moreover, the
statute protects only distribution by ”the owner of a particular copy
or phonorecord ... of that copy or phonorecord.” Here, a ReDigi
user owns the phonorecord that was created when she purchased
and downloaded a song from iTunes to her hard disk. But to sell
that song on ReDigi, she must produce a new phonorecord on the
ReDigi server. Because it is therefore impossible for the user to sell
her ”particular” phonorecord on ReDigi, the ﬁrst sale statute cannot
provide a defense. Put another way, the ﬁrst sale defense is limited
to material items, like records, that the copyright owner put into the
stream of commerce. Here, ReDigi is not distributing such material
items; rather, it is distributing reproductions of the copyrighted code
embedded in new material objects, namely, the ReDigi server in Arizona and its users’ hard drives. The ﬁrst sale defense does not cover
this any more than it covered the sale of casse e recordings of vinyl
records in a bygone era.
Finally, ReDigi feebly argues that the Court’s reading of Section
109(a) would in eﬀect exclude digital works from the meaning of the
statute. That is not the case. Section 109(a) still protects a lawful
owner’s sale of her ”particular” phonorecord, be it a computer hard
disk, iPod, or other memory device onto which the ﬁle was originally
downloaded. While this limitation clearly presents obstacles to resale
that are diﬀerent from, and perhaps even more onerous than, those
involved in the resale of CDs and casse es, the limitation is hardly
absurd – the ﬁrst sale doctrine was enacted in a world where the ease
and speed of data transfer could not have been imagined. There are
many reasons for why such physical limitations may be desirable. It
is left to Congress, and not this Court, to deem them outmoded.

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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

' %&'&/4&4

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.
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The four fair use factors are a checklist of questions to ask about the
facts in a given case, not a majority vote. As you see from the readings, they interrelate, and they are not all of equal importance. I ﬁnd it
helpful to break the factors down into a slightly more detailed checklist:
• Factor one (”purpose and character of the [defendant’s] use”):
– Is the use for criticism, comment, or another use speciﬁcally mentioned in the ﬂush text at the start of section 107?
– Is the use commercial or noncommercial?
– Is the use transformative?
• Factor two (”nature of the [plaintiﬀ’s] copyrighted work”):
– Is the work primarily informational or primarily expressive?
– Is the work published or unpublished?
• Factor three (”amount and substantiality of the portion used”):
– How much did the defendant copy quantitatively from the
plaintiﬀ’s work?
– How qualitatively important were the copied portions to
the plaintiﬀ’s work?
– How extensive was the defendant’s copying in light of any
proﬀered justiﬁcations?
• Factor four (”eﬀect of the use upon the potential market”):
– What is the relevant market, and is it one the plaintiﬀ can
legitimately claim a right to?
– Did the plaintiﬀ suﬀer losses because the defendant’s work
substituted for her own, or for some other reason?

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• Miscellaneous:
– Did the defendant give appropriate a ribution to the plaintiﬀ’s work as a source?
– Did either party engage in any dishonest or illegal conduct
that bears directly on the copying?
– Is there anything else signiﬁcant in the facts not already
accounted for?
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 64
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 unwri en memoirs. 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.
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.
[Harper & Row sued for copyright infringement.]
The Nation has admi ed to lifting verbatim quotes of the author’s
original language totaling between 300 and 400 words and constitut-

' %&'&/4&4

ing 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
Fair use was traditionally deﬁned as “a privilege in others than the
owner of the copyright to use the copyrighted material in a reasonable manner without his consent.” The statutory formulation of the
defense of fair use in the Copyright Act reﬂects the intent of Congress
to codify the common-law doctrine. Section 107 requires a case-bycase determination whether a particular use is fair, and the statute
notes four nonexclusive factors to be considered. This approach was
intended to restate the pre-existing judicial doctrine of fair use, not
to change, narrow, or enlarge it in any way.”
As early as 1841, Justice Story gave judicial recognition to the doctrine in a case that concerned the le ers of another former President,
George Washington.

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“[A] reviewer may fairly cite largely from the original
work, if his design be really and truly to use the passages
for the purposes of fair and reasonable criticism. On the
other hand, it is as clear, that if he thus cites the most important parts of the work, with a view, not to criticise,
but to supersede the use of the original work, and substitute the review for it, such a use will be deemed in law
a piracy.”
Folsom v. MarshAs Justice Story’s hypothetical illustrates, the fair use
doctrine has always precluded a use that “supersede[s] the use of the
original.”
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. 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

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disputed that “the fact that the plaintiﬀ’s work is unpublished is a
factor tending to negate the defense of fair use.” Id.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.
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 the scope of fair use is undoubtedly wider
when the information conveyed relates to ma ers of high public concern. Respondents advance the substantial public import of the subject ma er 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.
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 li le incentive to create or proﬁt in ﬁnancing such memoirs, and the public
would be denied an important source of signiﬁcant historical information. The promise of copyright would be an empty one if it could
be avoided merely by dubbing the infringement a fair use “news report” of the book.
Nor do respondents assert any actual necessity for circumventing
the copyright scheme with respect to the types of works and users at
issue here.[6] 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.
IV
Whether The Nation article constitutes fair use under § 107 must be
reviewed in light of the principles discussed above. The factors enumerated in the section are not meant to be exclusive: Since the doctrine is an equitable rule of reason, no generally applicable deﬁnition

' %&'&/4&4

is possible, and each case raising the question must be decided on its
own facts. The four factors identiﬁed by Congress as especially relevant in determining whether the use was fair are: (1) the purpose and
character of the use; (2) the nature of the copyrighted work; (3) the
substantiality of the portion used in relation to the copyrighted work
as a whole; (4) the eﬀect on the potential market for or value of the
copyrighted work. We address each one separately.
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. 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 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. Courts 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. Every commercial use of copyrighted material is presumptively
an unfair exploitation of the monopoly privilege that belongs to the
owner of the copyright. 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.
“Fair use presupposes good faith and fair dealing. The trial court
found that The Nation knowingly exploited a purloined manuscript.

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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.” Fair use “distinguishes between a true scholar and
a chiseler who infringes a work for personal proﬁt.“ Wainwright Securities Inc. v. Wall Street Transcript Corp.
Nature of the Copyrighted work. Second, the Act directs a ention 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. See Gorman, Fact or Fancy? The Implications for Copyright:
Even within the ﬁeld of fact works, there are gradations
as to the relative proportion of fact and fancy. One may
move from sparsely embellished maps and directories to
elegantly wri en biography. The extent to which one
must permit expressive language to be copied, in order
to assure dissemination of the underlying facts, will thus
vary from case to case.”
Even within the ﬁeld of fact works, there are gradations as to the relative proportion of fact and fancy. One may move from sparsely embellished maps and directories to elegantly wri en biography. The
extent to which one must permit expressive language to be copied, in
order to assure dissemination of the underlying facts, will thus vary
from case to case.
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, see House Report, at 65, 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.

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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’ 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.” App. 300b-300c (testimony of Victor Navasky). 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. 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

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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. “Fair use, when properly applied, is limited to copying by
others which does not materially impair the marketability of the work
which is copied.” The trial court found not merely a potential but an
actual eﬀect on the market. Time’s cancellation of its projected serialization and its refusal to pay the $12,500 were the direct eﬀect of
the infringement. The Court of Appeals rejected this factﬁnding as
clearly erroneous, noting that the record did not establish a causal
relation between Time’s nonperformance and respondents’ unauthorized publication of Mr. Ford’s expression as opposed to the facts
taken from the memoirs. We disagree. 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.
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. 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.”
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.
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 64
In 1964, Roy Orbison and William Dees wrote a rock ballad called
”Oh, Pre y Woman” and assigned their rights in it to respondent
Acuﬀ-Rose Music, Inc.
Petitioners Luther R. Campbell, Christopher Wongwon, Mark
Ross, and David Hobbs are collectively known as 2 Live Crew, a
popular rap music group. In 1989, Campbell wrote a song entitled
”Pre y Woman,” which he later described in an aﬃdavit 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

' %&'&/4&4

wri en a parody of ”Oh, Pre y Woman,” that they would aﬀord all
credit for ownership and authorship of the original song to AcuﬀRose, Dees, and Orbison, and that they were willing to pay a fee for
the use they wished to make of it. Enclosed with the le er 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, Pre y Woman.’” Nonetheless, in
June or July 1989, 2 Live Crew released records, casse e tapes, and
compact discs of ”Pre y Woman” in a collection of songs entitled ”As
Clean As They Wanna Be.” The albums and compact discs identify
the authors of ”Pre y Woman” as Orbison and Dees and its publisher
as Acuﬀ-Rose.
Almost a year later, after nearly a quarter of a million copies of the
recording had been sold, Acuﬀ-Rose sued 2 Live Crew and its record
company, Luke Skyywalker Records, for copyright infringement.
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). 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,
Folsom, 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.”Pierre Leval, Toward a Fair Use Standard.
Although such transformative use is not absolutely necessary for a
ﬁnding of fair use,11 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.
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. See, e.g., Fisher
v. Dees (”When Sonny Sniﬀs Glue,” a parody of ”When Sunny Gets
Blue,” is fair use); Elsmere Music, Inc. v. National Broadcasting Co. (”I
Love Sodom,” a ”Saturday Night Live” television parody of ”I Love
11

The obvious statutory exception to this focus on transformative uses is the
straight reproduction of multiple copies for classroom distribution.

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New York,” is fair use).
The germ of parody lies in the deﬁnition of the Greek parodeia,
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 a ention 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. 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.
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.
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
ma er to fair use. As Justice Holmes explained, ”It 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.” Bleistein; cf. Yankee Publishing Inc. v.
News America Publishing, Inc. (”First Amendment protections do not
apply only to those who speak clearly, whose jokes are funny, and
whose parodies succeed”).
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

' %&'&/4&4

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 naivete 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.18
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In this action, the City makes two basic allegations. First, that it enjoys a copyright interest in the video recordings it makes of open public meetings of the Inglewood City Council. Second, that Teixeira has
violated the City’s copyright by using portions of these videos in making his own videos that criticize the City and its elected oﬃcials (the
“Teixeira Videos”).
The City alleges that it is the valid copyright owner of video
recordings, including six of Inglewood Council meetings from 2011
to 2013 (“the “City Council Videos”) for which it has submi ed applications for copyright registration by the Register of Copyrights.s
Teixeira is a resident of Inglewood, California. He operates a website, Inglewoodwatchdog.wix.com, and posts videos on YouTube as
Dehol Trouth. The City alleges that Teixeira has willfully and intentionally used infringing copies of the City Council Videos in question
and distributed them in online media, thereby violating the City’s exclusive reproduction and distribution rights.
III. D
In his Motion, Teixeira makes two arguments as to why the City’s action should be dismissed. First, under California law, the City may
not claim and assert a copyright interest in the City Council Videos.
Second, even if the City had an enforceable copyright interest in the
videos, the Teixeira Videos fall squarely within the fair use protections of § 107 of the Copyright Act.
18
Finally, regardless of the weight one might place on the alleged infringer’s state
of mind, compare Harper & Row (fair use presupposes good faith and fair dealing)
(quotation marks omi ed), with Folsom (good faith does not bar a ﬁnding of infringement); Leval, Toward a Fair Use Standard (good faith irrelevant to fair use analysis), we 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.

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For the reasons explained below, the Court agrees with both of
Teixeira’s arguments.
[Although federal law allows states and local government to claim
copyright protection in works they create, the court held that California state law did not authorize local governments to do so.]
B. Teixeira’s Activity is Protected Fair Use
Because the Court has determined that the City cannot state a claim
it need not address whether Teixeira’s copying constitutes fair use.
Because the Court is dismissing the action, however, the Court will
rule on fair use so that all issues may be appealed now, if the City
chooses to do so.
Teixeira argues that he uses small portions of the freely available
City Council Videos in order to create his own videos that comment
on and criticize activities of the City Council, and in particular Mayor
James Bu s. This, he contends, falls squarely within the protections
of the fair use doctrine as codiﬁed at § 107 of the Copyright Act.
The City argues that fair use has never protected “such systematic infringement of copyright works for years at a time” and that
“[c]opyrights would become meaningless if such wholesale theft
were tolerated.” The City contends that it is not trying to impinge
on Teixeira’s First Amendment but merely seeks to have him “stop
posting substantially all of the [City Council Videos] with [Teixeira’s]
comments posted on top of them.” The City continues to say that
“[w]hat is really going on here is that the Defendant wants to criticize the City without doing his own work.” The City also argues that
a decision on the basis of fair use is not proper at this stage in the
litigation.
A review of the videos is suﬃcient for the Court to rule that the
Teixeira Videos are protected by the fair use doctrine as a ma er of
law. The Teixeira Videos use brief portions of the larger works in
order to comment on, and criticize the political activities of the City
Council and its members. He uses carefully chosen portions speciﬁcally for the purposes of exercising his First Amendment rights, and
in doing so, substantially transforms the purpose and content of the
City Council Videos.
2. Each Statutory Factor Favors a Finding of Fair Use
The Court determines that each statutory factor in § 107 favors a ﬁnding of fair use.
a. Purpose and Character of Use …
There is presently no evidence before the Court as to whether Teixeira has produced the videos for a commercial purpose beyond the
City’s allegation that he uses them to generate income, which the

' %&'&/4&4

Court must accept as true on a motion under Rule 12(b)(6). Teixeira
notes in his Reply that should the case proceed he will show that he
does not produce the videos for commercial purposes. Teixeira, however, does not rely on the non-commercial nature of the videos and
the Court need not either. As the Supreme Court explained in Campbell, 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. See also Hustler Magazine Inc. v. Moral Majority
Inc. (“Even assuming that the use had a purely commercial purpose,
the presumption of unfairness can be rebu ed by the characteristics
of the use”).
The videos Teixeira produces address local politics in the City of
Inglewood. They consist of his narrating his criticism of Mayor Bu s
over slides or other text, documents—such as a report by the Inglewood city clerk—and video clips, some of which are taken from the
City Council Videos over which the City claims a copyright interest.
The videos range in time from 3 minutes and 43 second to 15 minutes long, and the clips from the City Council Videos are considerably
shorter. Some of the clips are used unadorned but they are most often frequently overlaid with Teixeira’s oral and wri en commentary
and criticism, as well as music. Even when unadorned, they form
only part of longer videos, with the clips contrasted with documents,
sound recordings, and other video clips, accompanied with Teixeira’s
wri en and oral commentary.
Teixeira’s use is highly transformative. His purpose falls directly
within two of the categories explicitly referenced in § 107: criticism
and commentary. The Teixeira Videos are also directed at political
and other ma ers of public concern and constitute core First Amendment protected speech. The fair use doctrine generally provides a
greater scope of protection when the works involve address ma ers
of public concern.
The City’s contention that Teixeira is “simply republishing untransformed, copies of the Copyrighted works, and free-riding on the
City’s expenses” is plainly incorrect on even the most cursory review
of the Teixeira videos. The City’s claim that “[t]he facts alleged a complete lack of transformativeness” is also irrelevant given the reference
by the Complaint to the videos themselves.
The City’s reliance on Los Angeles Times v. Free Republic is also unpersuasive. The defendant hosed an online bulletin board on which
“generally, exact copies of whole or substantial portions of articles
[we]re posted.” The court rejected the arguments by the defendants
that the works were transformative because the board did not substitute for the newspapers’ websites, and because users added comments. The court noted that “[c]opying portions of a copyrighted
work for the purpose of criticism or commentary is often consid-

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ered fair use.” However, the court concluded that limited commentary added to verbatim copies was not suﬃcient, and the amount
of copying—full, verbatim copies—was too great to justify the limited commentary provided on the board. The purpose, the court concluded, was primarily to provide the content of the articles and the ancillary commentary was not suﬃcient to render the copying transformative because the copied works substituted for the originals. (“For
those who visit the site regularly, therefore, the articles posted there
serve as substitutes for the originals found on plaintiﬀs’ websites or
in their newspapers.”)
Teixeira’s use of the clips from the City Council Videos is of a
wholly diﬀerent sort. The clips are carefully chosen and heavily
edited. Teixeira juxtaposes them with other materials, puts his own
commentary over and around them, and uses speciﬁc clips to underscore and support the points he makes in his videos. No person wishing to ﬁnd out what occurred during a lengthy City Council meeting
would be satisﬁed with viewing any of the Teixeira Videos.
Indeed, the videos identiﬁed in the Complaint as infringing are
quintessential transformative works for the purpose of criticism and
commentary on ma ers of public concern. Even as used for commercial purpose—a fact which the Court assumes to be true—this factor
alone would go a substantial way to support a ﬁnding of fair use.
b. Nature of the Copyrighted Work
The purportedly copyright material is not creative in nature. The City
Council Videos are straightforward recordings of public proceedings.
The City’s arguments address whether there is suﬃcient creativity
to warrant copyright protection at all. While the videos are very likely
suﬃciently “creative” to fall within the scope of copyright protection,
this does not mean that this factor favors the City.
Given the barely creative nature of the City Council Videos, and
their informational purpose, they enjoy very narrow copyright protection. This factor therefore weighs in favor of a ﬁnding of fair use.
c. Amount and Substantiality of the Portion Used
As described above with regards to the ﬁrst factor, Teixeira uses only
small portions of the total works and uses them for very speciﬁc and
particular purposes. In ﬁve of the six accused videos, he intersperses
short clips of the City Council Videos between wri en slides, pictures,
other video clips, and his own commentary.
The ﬁrst and second videos are approximately 15 minutes long
and contain clips from the City Council meeting held on July 20, 2010.
The video of the meeting is more than four hours long. The clips used
in Teixeira’s ﬁrst two videos, are all under a minute long, and most of
them 15 seconds or less. The videos address issues regarding Mayor

' %&'&/4&4

Bu s’ Inglewood residency issues that arose while he was running for
mayor, and his interactions with the City’s Clerk regarding a report
she compiled as to his voter registration and qualiﬁcation to run for
mayor.
The third video is the shortest of the Teixeira videos at three minutes and 43 seconds. It is almost wholly comprised of a single clip
from the City Council meeting on May 22, 2012, at which Mayor
Bu s reads a statement regarding a request for information about a
shooting. This is the longest clip used by Teixeira in any of the accused videos. Throughout the video there is music added by Teixeira,
but more importantly, his commentary runs along the bo om of the
screen as Bu s talks. Teixeira ridicules Bu s’ physical tics as he talks,
notes his apparent nervousness and stu ering, and speciﬁcally identiﬁes points at which Teixeira alleges Bu s is lying. The full video of
the meeting runs more than three hours.
The City argues that Teixeira fails to meet his supposed burden
of showing that it is “essential” to make the copies for his purpose of
commenting on it. The City contends that each topic area of the City
Council meetings is “an independent and entire work” and Teixeira
cannot show why it is necessary to copy these “entire” works. However, a review of the videos makes it clear that Teixeira has copied
only the parts of the City Council Videos that serve his purpose of
making comment on them, or criticizing very particular statements
by Bu s. This use of another’s material has been frequently recognized as protected fair use. See Northland Family Planning Clinic, Inc.
v. Center for Bio–Ethical Reform (holding that using verbatim portions
of plaintiﬀ’s pro-abortion video in making a video protesting abortion was fair use). The City’s exceptionally narrow view of an “entire”
work is without merit and contrary to the purpose of the fair use doctrine, which permits the use of reasonable quantities of a work for the
purpose of criticism and comment.
Teixeira’s use of the clips from the City Council Videos is limited
to his purpose of criticizing Bu s and the City Council, and commenting on the proceedings of the City Council. Teixeira chooses small
and very speciﬁc parts of lengthy proceedings to make his point in
his videos. The extent of his copying is reasonable in light of his purpose. Accordingly, this factor also strongly favors a ﬁnding of fair
use.
d. Eﬀect of Use on the Market
This factor strongly favors Teixeira because there is no market for the
City Council Videos and the accused works are not a substitute for
the original works.
The City argues that the factor favors its position because Teixeira’s copying denies the City of the opportunity to “recoup its ex-

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penses” and “deprives [the City] of potential revenue.” This argument is without merit and ﬂatly contradicted by the California law
that governs the City’s creation and use of the City Council Videos.
California law prevents public agencies from charging the public
anything more than the “direct costs of duplication” when providing
public records.
The City therefore may only collect fees to reimburse for the direct costs of providing copies of any record it creates, including the
City Council Videos. It is speciﬁcally barred by law from charging
any fee to recoup the costs of original production. And it is certainly
not permi ed to use the City Council Videos to generate any form of
revenue. There can therefore be no commercial market for the City
Council Videos and no activity by Teixeira can deprive the City of
any revenue.
Because copyright’s purpose is to protect the commercial interest
of authors so as to incentivize the creation of further works the lack
of a market for the City Council Videos suggests that the City has no
interest in copyright protection of the City Council Videos.
Further, even if the City could generate revenue from its works,
Teixeira’s videos are not a substitute. The original works are lengthy,
unadorned videos of City Council meetings. Teixeira’s videos are
considerably shorter, contain even shorter portions of the City Council meetings, and are exclusively for the purpose of presenting Teixeira’s views and commentary on Inglewood city politics).
Accordingly, this factor also strongly favors a ﬁnding of fair use.
3. Teixeira’s Videos are Fair Use as a Ma er of Law
Having reviewed the accused videos, the Court determines that—
even assuming the City has any copyright interest to assert—they
are clearly protected by the fair use doctrine. Indeed, the Court can
scarcely conceive of works that are more appropriately protected by
the fair use doctrine and § 107 than the Teixeira Videos. He is engaged in core First Amendment speech commenting on political affairs and ma ers of public concern. To do so, he has taken carefully
selected and short portions of signiﬁcantly longer works, and embellished them with commentary and political criticism through music,
his voice, and wri en subtitles. Even if California law allowed the
City to assert a copyright claim, Teixeira’s activities plainly fall within
the protections of fair use.
The City accuses Teixeira of wanting “to criticize the City without
doing his own work” by “posting substantially all of the full [City
Council Videos] with [his] comments posted on top of them.” Even
if the City’s characterization of the Teixeira Videos were accurate, fair
use would allow such use for the purpose of commentary.

' %&'&/4&4

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Plaintiﬀs Fox Broadcasting Company, Twentieth Century Fox Film
Corp., and Fox Television Holdings, Inc. (collectively, ”Fox”) own
the copyrights to television shows that air on the Fox television network. Its primetime lineup includes shows such as Glee, Bones, The
Simpsons, and Family Guy. One distributor that Fox contracts with
is Dish Network, the third-largest pay television service provider in
the United States.
In March 2012, Dish released to its customers the Hopper, a settop box with digital video recorder (DVR) and video on demand capabilities. At the same time it released the Hopper, Dish introduced
a feature called PrimeTime Anytime that works only on the Hopper.
PrimeTime Anytime allows a subscriber to set a single timer to record
any and all primetime programming on the four major broadcast networks (including Fox) every night of the week. To enable PrimeTime
Anytime, a Hopper user presses the ”*” bu on on the remote control
to reach the PrimeTime Anytime setup screen. The user selects ”Enable,” and a new menu appears where the viewer can disable recordings of certain networks on certain days of the week and change the
length of time that the shows are saved (between two and eight days).
By default, PrimeTime Anytime records primetime shows on all four
networks each night of the week and saves all recordings for eight
days.
In May 2012, Dish started oﬀering a new feature, AutoHop, that allows users to automatically skip commercials. AutoHop is only available on shows recorded using PrimeTime Anytime, typically on the
morning after the live broadcast. It is not available for all primetime
programs. When a user plays back a PrimeTime Anytime recording,
if AutoHop is available, a pop-up screen appears that allows the user
to select the option to ”automatically skip over” commercial breaks.
By default, AutoHop is not selected.
If a customer enables AutoHop, the viewer sees only the ﬁrst and
last few seconds of each commercial break. A red kangaroo icon
appears in the corner of the screen to demonstrate that AutoHop is
skipping commercials. Unlike the 30-second skip feature available
on many DVRs, once a user has enabled AutoHop, the user does
not press anything to skip through commercials. AutoHop does not
delete commercials from the recording. Customers can see the commercials if they manually rewind or fast-forward into a commercial
break.
Fox sued Dish for copyright infringement and breach of contract
and sought a preliminary injunction. The district court denied the
motion.
The district court did not abuse its discretion in concluding that

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Fox was unlikely to succeed on its claim of secondary copyright infringement for the PrimeTime Anytime and AutoHop programs. Secondary liability for copyright infringement does not exist in the absence of direct infringement by a third party. Therefore, to establish
secondary liability, Fox must establish that Dish’s users are infringing. There is no dispute that Fox has established a prima facie case
of direct infringement by Dish customers because Fox owns the copyrights to its shows and the users make copies. Thus, the burden shifts
to Dish to demonstrate that it is likely to succeed on its aﬃrmative
defense that its customers’ copying was a fair use. Dish has met this
burden.
As the district court recognized, the Supreme Court’s analysis in
Sony provides strong guidance in assessing whether Dish customers’
copying of Fox programs is a ”fair use.” In Sony, the Supreme Court
held that Sony was not liable for secondary infringement for manufacturing Betamax VCRs because customers used the machines primarily for time-shifting.
Fox and its amici argue that Dish customers use PrimeTime Anytime and AutoHop for purposes other than time-shifting – namely,
commercial-skipping and library-building. These uses were brieﬂy
discussed in Sony, in which the Court recognized that some Betamax customers used the device to avoid viewing advertisements and
accumulate libraries of tapes. In Sony, about 25 percent of Betamax
users fast-forwarded through commercials. Additionally, a ”substantial number of interviewees had accumulated libraries of tapes.” One
user owned about 100 tapes and bought his Betamax intending to
”build a library of casse es,” but this ”proved too expensive.” Because the Betamax was primarily used for timeshifting, the Court
in Sony never expressly decided whether commercial-skipping and
library-building were fair uses.
Yet, as the district court held, commercial-skipping does not implicate Fox’s copyright interest because Fox owns the copyrights to
the television programs, not to the ads aired in the commercial breaks.
If recording an entire copyrighted program is a fair use, the fact that
viewers do not watch the ads not copyrighted by Fox cannot transform the recording into a copyright violation. Indeed, a recording
made with PrimeTime Anytime still includes commercials; AutoHop
simply skips those recorded commercials unless a viewer manually
rewinds or fast-forwards into a commercial break. Thus, any analysis of the market harm should exclude consideration of AutoHop
because ad-skipping does not implicate Fox’s copyright interests.
Analyzing PrimeTime Anytime under the fair use factors, Dish
has demonstrated a likelihood of success on its customers’ fair use
defense. As for the ﬁrst factor, the ”purpose and character of the use,
including whether such use is of a commercial nature or is for non-

' %&'&/4&4

proﬁt educational purposes,” Dish customers’ home viewing is noncommercial under Sony, which held that ”time-shifting for private
home use” was a ”noncommercial, nonproﬁt activity,” Here, the district court found that PrimeTime Anytime is used for time-shifting,
and that the Hopper is available only to private consumers.
Sony also governs the analysis of the second and third factors, the
”nature of the copyrighted work” and ”the amount and substantiality
of the portion used in relation to the copyrighted work as a whole,”
Sony held that ”when one considers the nature of a televised copyrighted audiovisual work, and that time-shifting 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,
does not have its ordinary eﬀect of militating against a ﬁnding of fair
use.” The same analysis applies here, and thus the fact that Dish users
copy Fox’s entire copyrighted broadcasts does not have its ordinary
eﬀect of militating against a ﬁnding of fair use.
Finally, we consider the ”eﬀect of the use upon the potential market for or value of the copyrighted work.This is the ”most important
element of fair use.” Harper & Row Because Dish customers’ taping
is ”for a noncommercial purpose,” the likelihood of future market
harm is not presumed but ”must be demonstrated.”Sony Fox ”need
only show that if the challenged use should become widespread,
it would adversely aﬀect the potential market for the copyrighted
work.” Harper & Row
Because Fox licenses its programs to distributors such as Hulu and
Apple, the market harm analysis is somewhat diﬀerent than in Sony,
where no such secondary market existed for the copyright-holders’
programs. However, the record before the district court establishes
that the market harm that Fox and its amici allege results from the automatic commercial-skipping, not the recording of programs through
PrimeTime Anytime. Indeed, Fox often charges no additional license
fees for providers to oﬀer Fox’s licensed video on demand, so long
as providers disable fast-forwarding. This indicates that the ease of
skipping commercials, rather than the on-demand availability of Fox
programs, causes any market harm. And as we have discussed, the
commercial-skipping does not implicate any copyright interest.
Therefore, the district court did not abuse its discretion in concluding that Fox was unlikely to succeed on its secondary infringement
claim.
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On the record before it, the Court has li le diﬃculty concluding
that ReDigi’s reproduction and distribution of Capitol’s copyrighted
works falls well outside the fair use defense. ReDigi obliquely argues

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that uploading to and downloading from the Cloud Locker for storage and personal use are protected fair use. Signiﬁcantly, Capitol
does not contest that claim. Instead, Capitol asserts only that uploading to and downloading from the Cloud Locker incident to sale fall
outside the ambit of fair use. The Court agrees.
Each of the statutory factors counsels against a ﬁnding of fair use.
The ﬁrst factor requires the Court to determine whether ReDigi’s
use ”transforms” the copyrighted work and whether it is commercial.
Both inquiries disfavor ReDigi’s claim. Plainly, the upload, sale, and
download of digital music ﬁles on ReDigi’s website does nothing to
”add[] something new, with a further purpose or diﬀerent character”
to the copyrighted works. Campbell ReDigi’s use is also undoubtedly
commercial. ReDigi and the uploading user directly proﬁt from the
sale of a digital music ﬁle, and the downloading user saves significantly on the price of the song in the primary market. ReDigi asserts that downloads for personal, and not public or commercial, use
”must be characterized as noncommercial, nonproﬁt activity.” However, ReDigi twists the law to ﬁt its facts. When a user downloads
purchased ﬁles from the Cloud Locker, the resultant reproduction
is an essential component of ReDigi’s commercial enterprise. Thus,
ReDigi’s argument is unavailing.
The second factor – the nature of the copyrighted work – also
weighs against application of the fair use defense, as creative works
like sound recordings are close to the core of the intended copyright
protection and far removed from the ... factual or descriptive work
more amenable to fair use.
The third factor – the portion of the work copied – suggests a similar outcome because ReDigi transmits the works in their entirety.
Finally, ReDigi’s sales are likely to undercut the market for or
value of the copyrighted work and, accordingly, the fourth factor cuts
against a ﬁnding of fair use. The product sold in ReDigi’s secondary
market is indistinguishable from that sold in the legitimate primary
market save for its lower price. The clear inference is that ReDigi
will divert buyers away from that primary market. ReDigi incredibly
argues that Capitol is preempted from making a market-based argument because Capitol itself condones downloading of its works on
iTunes. Of course, Capitol, as copyright owner, does not forfeit its
right to claim copyright infringement merely because it permits certain uses of its works. This argument, too, is therefore unavailing.
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Compare Shepard Fairey’s famous Obama “HOPE” poster with the
photograph he used as a starting point. Assume that the photograph’s copyright is owned by the Associated Press, which used it

' %&'&/4&4

to illustrate a news story about a campaign event and then oﬀered it
for licensing through a stock photography bureau. Assume further
that Fairey created the poster to support Obama, that he then licensed
it for free to the Obama campaign, that the campaign has given out
tens of thousands of prints to supporters and it has been distributed
widely for free online. And ﬁnally, note that Fairey became signiﬁcantly more famous as a result of the poster and the publicity it received, and that he initially lied under oath in trying to conceal the
fact that he had used the photograph as a source. Fair use?

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(c) Information Residing on Systems or Networks At Direction of
Users.—
(1) In general.— A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of
material that resides on a system or network controlled
or operated by or for the service provider, if the service
provider— …
(C) upon notiﬁcation of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed
to be infringing or to be the subject of infringing activity.
(2) Designated agent.— The limitations on liability established in this subsection apply to a service provider only if
the service provider has designated an agent to receive notiﬁcations of claimed infringement described in paragraph
(3), by making available through its service, including on
its website in a location accessible to the public, and by providing to the Copyright Oﬃce, substantially the following
information:
(A) the name, address, phone number, and electronic mail
address of the agent.
(B) other contact information which the Register of Copyrights may deem appropriate. …
(3) Elements of notiﬁcation.—
(A) To be eﬀective under this subsection, a notiﬁcation
of claimed infringement must be a wri en communi-

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cation provided to the designated agent of a service
provider that includes substantially the following:
(i) A physical or electronic signature of a person authorized to act on behalf of the owner of an exclusive right that is allegedly infringed.
(ii) Identiﬁcation of the copyrighted work claimed to
have been infringed, or, if multiple copyrighted
works at a single online site are covered by a single
notiﬁcation, a representative list of such works at
that site.
(iii) Identiﬁcation of the material that is claimed to be
infringing or to be the subject of infringing activity
and that is to be removed or access to which is to be
disabled, and information reasonably suﬃcient to
permit the service provider to locate the material.
(iv) Information reasonably suﬃcient to permit the service provider to contact the complaining party,
such as an address, telephone number, and, if
available, an electronic mail address at which the
complaining party may be contacted.
(v) A statement that the complaining party has a good
faith belief that use of the material in the manner
complained of is not authorized by the copyright
owner, its agent, or the law.
(vi) A statement that the information in the notiﬁcation
is accurate, and under penalty of perjury, that the
complaining party is authorized to act on behalf
of the owner of an exclusive right that is allegedly
infringed. …

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Veoh Networks (Veoh) operates a publicly accessible website that enables users to share videos with other users. When a video is uploaded, various automated processes take place. Veoh’s software
automatically breaks down the video ﬁle into smaller 256-kilobyte
”chunks,” which facilitate making the video accessible to others.
Veoh’s software also automatically converts, or ”transcodes,” the
video ﬁle into Flash 7 format. This is done because ”the vast majority
of internet users have software that can play videos” in this format.
Veoh’s computers also automatically extract metadata from information users provide to help others locate the video for viewing.
Users can provide a title, as well as tags or keywords that describe the

' %&'&/4&4

video, and can also select pre-set categories describing the video, such
as ”music,” ”faith” or ”politics.” The Veoh system then automatically
assigns every uploaded video a ”permalink,” or web address, that
uniquely identiﬁes the video and makes it available to users. Veoh
employees do not review the user-submi ed video, title or tags before the video is made available.
Veoh employs various technologies to automatically prevent
copyright infringement on its system. In 2006, Veoh adopted ”hash
ﬁltering” software. Whenever Veoh disables access to an infringing
video, the hash ﬁlter also automatically disables access to any identical videos and blocks any subsequently submi ed duplicates. Veoh
also began developing an additional ﬁltering method of its own, but
in 2007 opted instead to adopt a third-party ﬁltering solution produced by a company called Audible Magic. Audible Magic’s technology takes audio ”ﬁngerprints” from video ﬁles and compares them
to a database of copyrighted content provided by copyright holders.
If a user a empts to upload a video that matches a ﬁngerprint from
Audible Magic’s database of forbidden material, the video never becomes available for viewing. Approximately nine months after beginning to apply the Audible Magic ﬁlter to all newly uploaded videos,
Veoh applied the ﬁlter to its backlog of previously uploaded videos.
This resulted in the removal of more than 60,000 videos, including
some incorporating UMG’s works. Veoh has also implemented a policy for terminating users who repeatedly upload infringing material,
and has terminated thousands of user accounts.
Despite Veoh’s eﬀorts to prevent copyright infringement on its
system, both Veoh and UMG agree that some of Veoh’s users were
able to download unauthorized videos containing songs for which
UMG owns the copyright. The parties also agree that before UMG
ﬁled its complaint, the only notices Veoh received regarding alleged
infringements of UMG’s works were sent by the Recording Industry Association of America (RIAA). The RIAA notices listed speciﬁc
videos that were allegedly infringing, and included links to those
videos. The notices did not assert rights to all works by the identiﬁed artists, and did not mention UMG. UMG does not dispute that
Veoh removed the material located at the links identiﬁed in the RIAA
notices.
In September 2007, UMG ﬁled suit against Veoh for direct, vicarious and contributory copyright infringement, and for inducement of
infringement.
A
We must ﬁrst decide whether the functions automatically performed
by Veoh’s software when a user uploads a video fall within the meaning of ”by reason of the storage at the direction of a user.” 17 U.S.C.

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§ 512(c)(1). Although UMG concedes that ”[s]torage on computers involves making a copy of the underlying data,” it argues that
”nothing in the ordinary deﬁnition of ‘storage’ encompasses” the
automatic processes undertaken to facilitate public access to useruploaded videos. Facilitation of access, UMG argues, goes beyond
”storage.” Therefore the creation of chunked and Flash ﬁles and the
streaming and downloading of videos fall outside § 512(c).
By its terms, § 512(c) presupposes that service providers will provide access to users’ stored material, and we would thus contravene
the statute if we held that such access disqualiﬁed Veoh from the safe
harbor. Section 512(c) codiﬁes a detailed notice and takedown procedure by which copyright holders inform service providers of infringing material accessible through their sites, and service providers
then ”disable access to” such materials. This carefully considered
protocol, and the statute’s a endant references to ”disabl[ing] access” to infringing materials would be superﬂuous if we accepted
UMG’s constrained reading of the statute. Indeed, it is not clear how
copyright holders could even discover infringing materials on service
providers’ sites to notify them as the protocol dictates if § 512(c) did
not contemplate that there would be access to the materials.
The technological processes involved in providing web hosting
services require those service providers to make, transmit and download multiple copies of users’ stored materials. To create a website,
the user uploads content to the web host’s computers, which make
an initial copy. Then, when another Internet user wants to access the
website by clicking a link or entering the URL, all the website’s relevant content is transmi ed to the user’s computer, where another
copy is automatically made by the user’s web browser software in
order to assemble the materials for viewing and listening. To carry
out their function of making websites available to Internet users, web
hosting services thus routinely copy content and transmit it to Internet users. We cannot see how these access-facilitating processes are
meaningfully distinguishable from Veoh’s for § 512(c)(1) purposes.
B
It is undisputed that, until the ﬁling of this lawsuit, UMG had not
identiﬁed to Veoh any speciﬁc infringing video available on Veoh’s
system. Nevertheless, UMG contends that Veoh hosted a category of
copyrightable content – music – for which it had no license from any
major music company. UMG argues Veoh thus must have known
this content was unauthorized, given its general knowledge that its
services could be used to post infringing material. UMG urges us to
hold that this suﬃciently demonstrates knowledge of infringement.
We cannot, for several reasons.
As an initial ma er, contrary to UMG’s contentions, there are

' %&'&/4&4

many music videos that could in fact legally appear on Veoh. Among
the types of videos subject to copyright protection but lawfully available on Veoh’s system were videos with music created by users and
videos that Veoh provided pursuant to arrangements it reached with
major copyright holders, such as SonyBMG. If merely hosting material that falls within a category of content capable of copyright protection, with the general knowledge that one’s services could be used
to share unauthorized copies of copyrighted material, was suﬃcient
to impute knowledge to service providers, the § 512(c) safe harbor
would be rendered a dead le er: § 512(c) applies only to claims of
copyright infringement, yet the fact that a service provider’s website
contained copyrightable material would remove the service provider
from § 512(c) eligibility.
These considerations are reﬂected in Congress’ decision to enact a
notice and takedown protocol encouraging copyright holders to identify speciﬁc infringing material to service providers. They are also
evidenced in the ”exclusionary rule” that prohibits consideration of
substantially deﬁcient § 512(c)(3)(A) notices for purposes of ”determining whether a service provider has actual knowledge or is aware
of facts and circumstances from which infringing activity is apparent..
We therefore hold that merely hosting a category of copyrightable
content, such as music videos, with the general knowledge that one’s
services could be used to share infringing material, is insuﬃcient to
meet the actual knowledge requirement under § 512(c)(1)(A)(i).
We reach the same conclusion with regard to the § 512(c)(1)(A)(ii)
inquiry into whether a service provider is ”aware of facts or circumstances from which infringing activity is apparent.” The district
court’s conception of this ”red ﬂag test” properly followed our analysis in Perfect 10, Inc. v. CCBill LLC, which reiterated that the burden remains with the copyright holder rather than the service provider. The
plaintiﬀs in CCBill argued that there were a number of red ﬂags that
made it apparent infringing activity was afoot, noting that the defendant hosted sites with names such as ”illegal.net” and ”stolencelebritypics.com,” as well as password hacking websites, which obviously
infringe. We disagreed that these were suﬃcient red ﬂags because
”we do not place the burden of determining whether materials are actually illegal on a service provider,” and ”we impose no such investigative duties on service providers.” For the same reasons, we hold
that Veoh’s general knowledge that it hosted copyrightable material
and that its services could be used for infringement is insuﬃcient to
constitute a red ﬂag.
We are not persuaded that UMG’s other purported evidence of
Veoh’s actual or apparent knowledge of infringement warrants trial.
First, UMG points to the tagging of videos on Veoh’s service as ”music videos.” Relying on the theory rejected above, UMG contends that

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this demonstrates Veoh’s knowledge that it hosted a category of infringing content. Relatedly, UMG argues that Veoh’s purchase of
certain search terms through the Google AdWords program demonstrates knowledge of infringing activity because some of the terms
purchased, such as ”50 Cent,” ”Avril Lavigne” and ”Britney Spears,”
are the names of UMG artists. However, artists are not always in exclusive relationships with recording companies, so just because UMG
owns the copyrights for some Britney Spears songs does not mean
it owns the copyright for all Britney Spears songs. Indeed, 50 Cent,
Avril Lavigne and Britney Spears are also aﬃliated with Sony-BMG,
which gave Veoh permission to stream its videos by these artists. Furthermore, even if Veoh had not had such permission, we recognize
that companies sometimes purchase search terms they believe will
lead potential customers to their websites even if the terms do not
describe goods or services the company actually provides. For example, a sunglass company might buy the search terms ”sunscreen” or
”vacation” because it believed that people interested in such searches
would often also be interested in sunglasses. Accordingly, Veoh’s
search term purchases do li le to demonstrate that it knew it hosted
infringing material.
UMG comes closer to meeting the § 512(c)(1)(A) requirements
with its evidence of emails sent to Veoh executives and investors
by copyright holders and users identifying infringing content. One
email, sent by the CEO of Disney, a major copyright holder, to
Michael Eisner, a Veoh investor, stated that the movie Cinderella III
and various episodes from the television show Lost were available
on Veoh without Disney’s authorization. If this notiﬁcation had come
from a third party, such as a Veoh user, rather than from a copyright
holder, it might meet the red ﬂag test because it speciﬁed particular infringing material. As a copyright holder, however, Disney is
subject to the notiﬁcation requirements in § 512(c)(3), which this informal email failed to meet. Accordingly, this deﬁcient notice ”shall
not be considered under paragraph (1)(A) in determining whether a
service provider has actual knowledge or is aware of facts or circumstances from which infringing activity is apparent.”. Further, even if
this email could have created actual knowledge or qualiﬁed as a red
ﬂag, Eisner’s email in response assured Disney that he would instruct
Veoh to ”take it down,” and Eisner copied Veoh’s founder to ensure
this happened ”right away.” UMG nowhere alleges that the oﬀending material was not immediately removed, and accordingly Veoh
would be saved by § 512(c)(1)(A)(iii), which preserves the safe harbor for service providers with such knowledge so long as they ”act[]
expeditiously to remove, or disable access to, the material.”
C

' %&'&/4&4

UMG appeals the district court’s determination that Veoh did not
have the necessary right and ability to control infringing activity and
thus remained eligible for safe harbor protection.
As discussed in the knowledge context, it is not enough for a service provider to know as a general ma er that users are capable of
posting unauthorized content; more speciﬁc knowledge is required.
Similarly, a service provider may, as a general ma er, have the legal right and necessary technology to remove infringing content, but
until it becomes aware of speciﬁc unauthorized material, it cannot
exercise its ”power or authority” over the speciﬁc infringing item. In
practical terms, it does not have the kind of ability to control infringing activity the statute contemplates.
Our reading of § 512(c)(1)(B) is informed and reinforced by our
concern that the statute would be internally inconsistent were we to
interpret the ”right and ability to control” language as UMG urges.
First, § 512(m) cuts against holding that Veoh’s general knowledge
that infringing material could be uploaded to its site triggered an obligation to ”police” its services to the ”fullest extent” possible. As we
have explained, § 512(m) provides that § 512(c)’s safe harbor protection may not be conditioned on ”a service provider monitoring its
service or aﬃrmatively seeking facts indicating infringing activity.”
UMG’s reading of the ”right and ability to control” language would
similarly run afoul of CCBill, , which likewise clariﬁed that § 512(c)
”impose[s] no such investigative duties on service providers,” and
”place[s] the burden of policing copyright infringement ... squarely
on the owners of the copyright.” We are not persuaded by UMG’s
suggestion that Congress meant this limitation on the duty to monitor to apply only to service providers who do not receive a direct
ﬁnancial beneﬁt under subsection (B). Rather, we conclude that a service provider must be aware of speciﬁc infringing material to have
the ability to control that infringing activity within the meaning of §
512(c)(1)(B). Only then would its failure to exercise its ability to control deny it a safe harbor.
Second, § 512(c) actually presumes that service providers have the
sort of control that UMG argues satisﬁes the § 512(c)(1)(B) ”right and
ability to control” requirement: they must ”remove[] or disable access to” infringing material when they become aware of it. 17 U.S.C.
§ 512(c)(1)(A)(iii) & (C). UMG argues that service providers have ”the
right and ability to control” infringing activity, § 512(c)(1)(B), as long
as they have ”the ability to locate infringing material” and ”terminate
users’ access.” Under that reading, service providers would have the
”right and ability to control” infringing activity regardless of their becoming ”aware of” the material. Under that interpretation, the prerequisite to § 512(c) protection under § 512(c)(1)(A)(iii) and (C), would
at the same time be a disqualiﬁer under § 512(c)(1)(B). Congress could

$)"15&3  $01:3*()5

not have intended for courts to hold that a service provider loses immunity under the safe harbor provision of the DMCA because it engages in acts that are speciﬁcally required by the DMCA.
Accordingly, we hold that the ”right and ability to control” under
§ 512(c) requires control over speciﬁc infringing activity the provider
knows about. A service provider’s general right and ability to remove
materials from its services is, alone, insuﬃcient. Of course, a service
provider cannot willfully bury its head in the sand to avoid obtaining such speciﬁc knowledge. Viewing the evidence in the light most
favorable to UMG, as we must here, we agree with the district court
there is no evidence that Veoh acted in such a manner. Rather, the evidence demonstrates that Veoh promptly removed infringing material
when it became aware of speciﬁc instances of infringement. Although
the parties agree, in retrospect, that at times there was infringing material available on Veoh’s services, the DMCA recognizes that service
providers who are not able to locate and remove infringing materials they do not speciﬁcally know of should not suﬀer the loss of safe
harbor protection.

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On September 13, 2010, ivi began streaming plaintiﬀs’ copyrighted
programming over the Internet, live, for proﬁt, and without plaintiﬀs’ consent. ivi began by retransmi ing signals from approximately thirty New York and Sea le broadcast television stations; by
February 2, 2011, ivi was also retransmi ing signals from stations in
Chicago and Los Angeles. Within ﬁve months of its launch, ivi had offered more than 4,000 of plaintiﬀs’ copyrighted television programs
to its subscribers.
Speciﬁcally, ivi captured and retransmi ed plaintiﬀs’ copyrighted television programming live and over the Internet to paying
ivi subscribers who had downloaded ivi’s ”TV player” on their computers for a monthly subscription fee of $4.99 (following a 30-day free
trial). For an additional fee of $0.99 per month, subscribers were able
to record, pause, fast-forward, and rewind ivi’s streams.
Almost immediately after ivi’s launch, several aﬀected program
owners and broadcast stations sent cease-and-desist le ers to ivi. ivi
responded to these le ers on or about September 17, 2010, purporting to justify its operations on the ground that it was a cable system
entitled to a compulsory license under § 111 of the Copyright Act.
Section 111(c)(1) of the Copyright Act provides:
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Secondary transmissions to the public by a cable system

' %&'&/4&4

of a performance or display of a work embodied in a primary transmission made by a broadcast station licensed
by the Federal Communications Commission ... shall be
subject to statutory licensing upon compliance with the
requirements of subsection (d) where the carriage of the
signals comprising the secondary transmission is permissible under the rules, regulations, or authorizations of the
Federal Communications Commission.
A ”cable system” is deﬁned as:
a facility, located in any State, territory, trust territory, or
possession of the United States, that in whole or in part receives signals transmi ed or programs broadcast by one
or more television broadcast stations licensed by the Federal Communications Commission, and makes secondary
transmissions of such signals or programs by wires, cables, microwave, or other communications channels to
subscribing members of the public who pay for such service. For purposes of determining the royalty fee under
subsection (d)(1), two or more cable systems in contiguous communities under common ownership or control or
operating from one headend shall be considered as one
system.
Based on the statutory text alone, it is simply not clear whether
a service that retransmits television programming live and over the
Internet constitutes a cable system under § 111. That is, it is unclear
whether such a service (1) is or utilizes a ”facility” (2) that receives
and retransmits signals (3) through wires, cables, microwave, or other
communication channels.
The legislative history indicates that Congress enacted § 111 with
the intent to address the issue of poor television reception, or, more
speciﬁcally, to mitigate the diﬃculties that certain communities and
households faced in receiving over-the-air broadcast signals by enabling the expansion of cable systems.
Through § 111’s compulsory license scheme, Congress intended
to support localized – rather than nationwide – systems that use cable
or optical ﬁbers to transmit signals through a physical, point-to-point
connection between a transmission facility and the television sets of
individual subscribers.
Congress did not, however, intend for § 111’s compulsory license
to extend to Internet transmissions. Indeed, the legislative history indicates that if Congress had intended to extend § 111’s compulsory
license to Internet retransmissions, it would have done so expressly –
either through the language of § 111 as it did for microwave retrans-

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missions or by codifying a separate statutory provision as it did for
satellite carriers.
To the extent that there is any doubt as to Congress’s intent, however, we conclude that the position of the Copyright Oﬃce eliminates
such doubt in its entirety. The Copyright Oﬃce is the administrative agency charged with overseeing § 111’s compulsory licensing
scheme. Although Congress has not expressly delegated authority
to the Copyright Oﬃce to make rules carrying the force of law, agencies charged with applying a statute certainly may inﬂuence courts
facing questions the agencies have already answered.
The Copyright Oﬃce has consistently concluded that Internet retransmission services are not cable systems and do not qualify for §
111 compulsory licenses. The Copyright Oﬃce has maintained that
§ 111’s compulsory license for cable systems is intended for localized
retransmission services; under this interpretation, Internet retransmission services are not entitled to a § 111 license. In light of the
Copyright Oﬃce’s expertise, the validity of its reasoning, the consistency of its earlier and later pronouncements, and the consistency of
its opinions with Congress’s purpose in enacting § 111, we conclude
that the Copyright Oﬃce’s position is reasonable and persuasive.
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The Copyright Oﬃce is not the only agency involved in this issue. As
the Copyright Oﬃce acknowledged, the FCC is considering new regulations in this area. Those potential regulations are relevant in two
ways to this case; one direct and one indirect. The direct way is that
§ 111 requires that the retransmission be permissible under FCC regulations. Currently, Plaintiﬀs point to no ways in which Defendants
are in violation of FCC regulations. There simply do not appear to
be any that address Defendants’ particular transmissions, and Plaintiﬀs have made no showing that Defendants are in violation of any
more general regulations, for example, of the type we all comply with
by operating devices bearing this familiar inscription; ”This device
complies with part 15 of the FCC Rules. Operation is subject to the
following two conditions: (1) This device may not cause harmful interference, and (2) this device must accept any interference received,
including interference that may cause undesired operation.”
The indirect way that the FCC proceedings are relevant is that the
FCC is considering whether internet-based services qualify as ”multichannel video programming distributors” under communications
law. Plaintiﬀs argue that the FCC’s potential future rules are irrelevant, as they will not extend a § 111 license to anybody. That might
be literally true, but nevertheless the Copyright Oﬃce thinks the FCC
proceedings are relevant to that question. In any event, the proposed

' %&'&/4&4

rules appear to provide a parallel path to program access for internet retransmi ers. The NPM proposes to modernize the FCC’s interpretation of the term ”multichannel video programming distributor
(”MVPD”) by including with its scope services that make available
for purchase, by subscribers or customers, multiple linear streams of
video programming, regardless of the technology used to distribute
the programming. This is intended to ”enable cable operators to
untether their video oﬀerings from their current infrastructure, and
could encourage them to migrate their traditional services to Internet
delivery.” The NPM also requests comment on whether the proposed
retransmission consent rules would ”force broadcasters to negotiate
with and license their signals to potentially large numbers of Internetbased distributors.”
Defendants emphasize this second, indirect involvement by the
FCC, and represent that they will comply with any applicable regulations that arise out of this rulemaking. What the FCC might or might
not do does not directly impact the analysis here, which is necessarily
grounded in current law. Nonetheless, the rulemaking again emphasizes that this is not the only forum in which these issues are being
debated, and that this is not the only forum for resolving them.

Other notable statutory licenses include a parallel licensing regime
for satellite broadcasts, §§ 119 and 121; several music-licensing
regimes, § 114 (webcasting), § 115 (cover versions), and § 116 (jukeboxes); and a system of negotiated royalties for works used in noncommercial broadcasting, § 118.

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(a)

Except as otherwise provided in this title, it is not an infringement of copyright for a library or archives, or any of its employees acting within the scope of their employment, to reproduce
no more than one copy or phonorecord of a work, except as
provided in subsections (b) and (c), or to distribute such copy
or phonorecord, under the conditions speciﬁed by this section,
if –
(1) the reproduction or distribution is made without any purpose of direct or indirect commercial advantage;
(2) the collections of the library or archives are (i) open to the
public, or (ii) available not only to researchers aﬃliated

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with the library or archives or with the institution of which
it is a part, but also to other persons doing research in a specialized ﬁeld; and
(3) the reproduction or distribution of the work includes a notice of copyright …

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It is not an infringement of copyright for an authorized entity to reproduce or to distribute copies or phonorecords of a previously published, nondramatic literary work if such copies or phonorecords are
reproduced or distributed in specialized formats exclusively for use
by blind or other persons with disabilities.

.VTJD
Music copyright could be a course unto itself. Its doctrines bear the
scars of a long and ambivalent history. As you read the chapter, keep
three distinctions in mind: between musical works (think sheet music) and sound recordings (think CDs and MP3s), between reproducing a work and performing it, and between state and federal law.
Copyright law has explored every possible variation and combination of the three. One does not simply walk into music copyright.
But ﬁrst, a word on the music industry.
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Whenever I talk to a band who are about to sign with a major label,
I always end up thinking of them in a particular context. I imagine
a trench, about four feet wide and ﬁve feet deep, maybe sixty yards
long, ﬁlled with runny, decaying shit. I imagine these people, some of
them good friends, some of them barely acquaintances, at one end of
this trench. I also imagine a faceless industry lackey at the other end
holding a fountain pen and a contract waiting to be signed. Nobody
can see what’s printed on the contract. It’s too far away, and besides,
the shit stench is making everybody’s eyes water. The lackey shouts
to everybody that the ﬁrst one to swim the trench gets to sign the
contract. Everybody dives in the trench and they struggle furiously
to get to the other end. Two people arrive simultaneously and begin wrestling furiously, clawing each other and dunking each other
under the shit. Eventually, one of them capitulates, and there’s only
one contestant left. He reaches for the pen, but the Lackey says “Actually, I think you need a li le more development. Swim again, please.
Backstroke.” And he does of course. …
The Balance Sheet: This is how much each player got paid at the end of the
game.
• Record company: $ 710,000

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• Producer: $ 90,000
• Manager: $ 51,000
• Studio: $ 52,500
• Previous label: $ 50,000
• Agent: $ 7,500
• Lawyer: $ 12,000
• Band member net income each: $ 4,031.25
The band is now ¹⁄₄ of the way through its contract, has made the
music industry more than 3 million dollars richer, but is in the hole
$ 14,000 on royalties. The band members have each earned about ¹⁄₃
as much as they would working at a 7-11, but they got to ride in a
tour bus for a month. The next album will be about the same, except
that the record company will insist they spend more time and money
on it. Since the previous one never “recouped,” the band will have
no leverage, and will oblige. The next tour will be about the same,
except the merchandising advance will have already been paid, and
the band, strangely enough, won’t have earned any royalties from
their T-shirts yet. Maybe the T-shirt guys have ﬁgured out how to
count money like record company guys. Some of your friends are
probably already this fucked.

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Throughout history, plenty of music has been made and transmitted from generation to generation without wri en scores. Musicians
working within what might be called folk traditions learn music by
listening to performances and imitating them, often repeatedly with
the guidance and corrections of a formal or informal teacher, until
they have them more-or-less ﬁxed in memory. At another extreme,
mechanical musical devices, such as music boxes, musical clocks,
and mechanical organs, have existed for centuries. Such musical automata make music without any human performance at all, and the
musical pa erns are ﬁxed, not in wri en notation or human memory, but in physical arrangements such as pins placed on a barrel or
perforations made on a disc.
During the nineteenth century and into the early decades of the
twentieth century, however, the dominant model of musical practice
cast music as a two-stage art, necessarily comprised of two fundamentally diﬀerent activities: composition and performance. Compo-

" .64*$"- 803,4 "/% 406/% 3&$03%*/(4

sition was a deliberative activity that allowed rethinking and editing.
Its end product was a wri en score, a stable, visually perceptible set
of prescriptions for musicians to follow. Scores virtually universally
used a system of notation – Western staﬀ or stave notation – which is
mainly discrete: composers choose between an F and an F sharp, or
between a quarter note and an eighth note, instead of se ing pitches
or durations along a continuum. However, staﬀ notation typically
indicates relative rather than absolute pitch and duration, and also
gives inexact cues about ma ers such as dynamics (loudness), articulation (legato and staccato rendering of note sequences), timbre, and
so on. Thus, it leaves room for – and requires – interpretive choices
in performance.
Performance contrasts with composition in many respects. While
a score is stable and visually perceptible, performance is unrepeatable, evanescent, and aural. While composition is a deliberative process that allows for trial-and-error editing, performance is a real-time,
low-deliberation, no-editing activity.
As printing costs dropped and pianos proliferated in uppermiddle class parlors around the country, printed musical scores began to play an important and proﬁtable role in the dissemination of
music into millions of homes. While some of those scores came from
the European classical tradition, the biggest sellers were sheet music
of popular songs, in simple arrangements that could be performed
by a single amateur pianist-vocalist. Most of the music copyright litigation through the middle of the twentieth century was about such
popular sheet music, and it is fair to say that the conception of music copyright held by several generations of judges was inﬂuenced by
sheet music of that type.
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 64
The actions were brought to restrain infringement of the copyrights of
two certain musical compositions, published in the form of sheet music, entitled, respectively, ”Li le Co on Dolly” and ”Kentucky Babe.”
The appellee, defendant below, is engaged in the sale of piano players and player pianos, known as the ”Apollo,” and of perforated rolls
of music used in connection therewith.
Without entering into a detailed discussion of the mechanical construction of such instruments and rolls, it is enough to say that the musical rolls consist of perforated sheets, which are passed over ducts in
such manner that the same are kept sealed until, by means of perforations in the rolls, air pressure is admi ed to sound the notes. This
is done with the aid of an operator, upon whose skill and experience
the success of the rendition largely depends. As the roll is drawn, the
eﬀect is to produce the melody or tune for which the roll has been

$)"15&3  .64*$

cut.
Musical compositions have been the subject of copyright protection since the statute of February 3, 1831, and laws have been passed
including them since that time. The action was brought under the
provisions of the copyright act, § 4952, giving to the author, inventor,
designer or proprietor of any book, map, chart, dramatic or musical
composition the sole liberty of printing, reprinting, publishing, completing, copying, executing, ﬁnishing and vending the same.
What is meant by a copy? Various deﬁnitions have been given
by the experts called in the case. The one which most commends
itself to our judgment is perhaps as clear as can be made, and deﬁnes
a copy of a musical composition to be ”a wri en or printed record
of it in intelligible notation.” It may be true that in a broad sense a
mechanical instrument which reproduces a tune copies it; but this is
a strained and artiﬁcial meaning. When the combination of musical
sounds is reproduced to the ear it is the original tune as conceived by
the author which is heard. These musical tones are not a copy which
appeals to the eye.
After all, what is the perforated roll? The fact is clearly established
in the testimony in this case that even those skilled in the making of
these rolls are unable to read them as musical compositions, as those
in staﬀ notation are read by the performer. It is true that there is some
testimony to the eﬀect that great skill and patience might enable the
operator to read his record as he could a piece of music wri en in
staﬀ notation. But the weight of the testimony is emphatically the
other way, and they are not intended to be read as an ordinary piece
of sheet music, which to those skilled in the art conveys, by reading,
in playing or singing, deﬁnite impressions of the melody.
These perforated rolls are parts of a machine which, when duly
applied and properly operated in connection with the mechanism to
which they are adapted, produce musical tones in harmonious combination. But we cannot think that they are copies within the meaning
of the copyright act.
It may be true that the use of these perforated rolls, in the absence
of statutory protection, enables the manufacturers thereof to enjoy
the use of musical compositions for which they pay no value. But
such considerations properly address themselves to the legislative
and not to the judicial branch of the Government.
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The 1909 Copyright Act, passed the following year, granted copyright owners of musical compositions rights with respect to mechanical reproductions of their compositions, for example, in records or
piano rolls.

" .64*$"- 803,4 "/% 406/% 3&$03%*/(4

While the 1909 Act provided protection for copyright holders
of musical compositions whose works were reproduced in sound
recordings, it included no explicit protection for sound recordings per
se. As a result, over the subsequent decades the courts and the Copyright Oﬃce consistently refused to recognize copyright in sound
recordings. In the absence of federal protection, states provided protection against duplication of sound recordings under common law
theories, usually unfair competition or common law copyright.
The general copyright revision process became stalled in the late
1960s and early 1970s. Congress, persuaded that the situation concerning sound recordings was becoming urgent, decided to bring
sound recordings under the federal copyright law without waiting
for the overall revision. On November 15, 1971 it passed the Sound
Recording Amendment, which for the ﬁrst time made sound recordings eligible for federal copyright. The eﬀective date of the Sound
Recording Amendment was February 15, 1972, four months after it
was passed. It applied to sound recordings ﬁrst ﬁxed on or after that
date.
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… Works of authorship include the following categories:
(2) musical works, including any accompanying words;
(7) sound recordings;
“Sound recordings” are works that result from the ﬁxation of a series
of musical, spoken, or other sounds, but not including the sounds
accompanying a motion picture or other audiovisual work, regardless of the nature of the material objects, such as disks, tapes, or other
phonorecords, in which they are embodied.
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Currently, a sound recording embodies both the work that is protected by the sound recording copyright and the work that is protected by the musical work copyright. In copyright terms, the sound
recording is a derivative work based on the musical work.
Courts have recognized that reproducing or publicly performing
a derivative work also constitutes a reproduction or performance of
the work, or works, on which the derivative work is based. In music, if a webcasting radio station wishes to utilize sound recordings
of musical works, the station must obtain permission from both the
sound recording copyright owners and the musical work copyright
owners.

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To the extent that music copyright is divided between musical works
and sound recordings, it becomes necessary to distinguish them and
to allocate authorship between them.
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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,” a piece for ﬂute and voice intended to incorporate elements of African-American gospel music, Japanese ceremonial court music, traditional African music, and classical music,
among others. According to Newton, the song was inspired by his
earliest memory of music, watching four women singing in a church
in rural Arkansas. In 1981, Newton performed and recorded ”Choir”
and licensed all rights in the sound recording to ECM Records for
$5,000. The license covered only the sound recording, and it is undisputed that Newton retained all rights to the composition of ”Choir.”
Sound recordings and their underlying compositions are separate
works with their own distinct copyrights.
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 $1,000. Beastie Boys
did not obtain a license from Newton to use the underlying composition. Pursuant to their license from ECM Records, Beastie Boys digitally sampled the opening six seconds of Newton’s sound recording
of ”Choir.” Beastie Boys repeated or ”looped” this six-second sample as a background element throughout ”Pass the Mic,” so that it
appears over forty times in various renditions of the song.
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.
The score to ”Choir” also indicates that the entire song should be
played in a ”largo/senza-misura” tempo, meaning ”slowly/withoutmeasure.”
Because the defendants were authorized to use the sound recording, our inquiry is conﬁned to whether the unauthorized use of the
composition itself was substantial enough to sustain an infringement
claim. Therefore, we may consider only Beastie Boys’ appropriation
of the song’s compositional elements and must remove from consideration all the elements unique to Newton’s performance. Stated another way, we must ”ﬁlter out” the licensed elements of the sound

" .64*$"- 803,4 "/% 406/% 3&$03%*/(4

recording to get down to the unlicensed elements of the composition,
as the composition is the sole basis for Newton’s infringement claim.
In ﬁltering out the unique performance elements from consideration, and separating them from those found in the composition, we
ﬁnd substantial assistance in the testimony of Newton’s own experts,
[who] reveal the extent to which the sound recording of ”Choir” is
the product of Newton’s highly developed performance techniques,
rather than the result of a generic rendition of the composition. As
a general ma er, according to Newton’s expert Dr. Christopher Dobrian, ”the contribution of the performer is often so great that s/he
in fact provides as much musical content as the composer.” This is
particularly true with works like ”Choir,” given the improvisational
nature of jazz performance and the minimal scoring of the composition. Indeed, as Newton’s expert Dr. Oliver Wilson explained:
The copyrighted score of ”Choir”, as is the custom in
scores wri en in the jazz tradition, does not contain indications for all of the musical subtleties that it is assumed
the performer-composer of the work will make in the
work’s performance. The function of the score is more
mnemonic in intention than prescriptive.
And it is clear that Newton goes beyond the score in his performance.
For example, Dr. Dobrian declared that ”Mr. Newton blows and
sings in such a way as to emphasize the upper partials of the ﬂute’s
complex harmonic tone, although such a modiﬁcation of tone color
is not explicitly requested in the score.” Dr. Dobrian also concludes
that Newton ”uses breath control to modify the timbre of the sustained ﬂute note rather extremely” and ”uses portamento to glide expressively from one pitch to another in the vocal part.” Dr. Dobrian
concedes that these elements do not appear in the score, and that they
are part of Newton’s performance of the piece.
A crucial problem with the testimony of Newton’s experts is that
they continually refer to the ”sound” produced by the ”Newton technique.” A sound is protected by copyright law only when it is ”ﬁxed
in a tangible medium.” 17 U.S.C. § 102(a). Here, the only time any
sound was ﬁxed in a tangible medium was when a particular performance was recorded. Newton’s copyright extends only to the elements that he ﬁxed in a tangible medium – those that he wrote on
the score. Thus, regardless of whether the average audience might
recognize the ”Newton technique” at work in the sampled sound
recording, those performance elements are beyond consideration in
Newton’s claim for infringement of his copyright in the underlying
composition.
On the undisputed facts of this record, no reasonable juror could
ﬁnd the sampled portion of the composition to be a quantitatively

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or qualitatively signiﬁcant portion of the composition as a whole.
Quantitatively, the three-note sequence appears only once in Newton’s composition. When played, 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.
On the undisputed facts of this case, we conclude that an average audience would not discern Newton’s hand as a composer, apart
from his talent as a performer, from Beastie Boys’ use of the sample.
The copying was not signiﬁcant enough to constitute infringement.

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The ordinary rules of copyright mostly apply to the reproduction
right in musical works. The notable exception is the statutory ”cover
version” license in § 115 that allows others to record and sell sound
recordings if they pay a ﬁxed royalty to the copyright owner of the
musical work.
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(1)

When phonorecords of a nondramatic musical work have been
distributed to the public in the United States under the authority
of the copyright owner, any other person … may, by complying
with the provisions of this section, obtain a compulsory license
to make and distribute phonorecords of the work. …
(2) A compulsory license includes the privilege of making a musical arrangement of the work to the extent necessary to conform
it to the style or manner of interpretation of the performance involved, but the arrangement shall not change the basic melody
or fundamental character of the work, and shall not be subject
to protection as a derivative work under this title, except with
the express consent of the copyright owner.
Subject to the provisions of this chapter, the functions of the Copyright Royalty Judges shall be as follows:

# 3&130%6$5*0/4
(1)

To make determinations and adjustments of reasonable terms
and rates of royalty payments as provided in sections 112(e),
114, 115, 116, 118, 119, and 1004. The rates applicable under
sections 114(f)(1)(B), 115, and 116 shall be calculated to achieve
the following objectives:
(A) To maximize the availability of creative works to the public.
(B) To aﬀord the copyright owner a fair return for his or her
creative work and the copyright user a fair income under
existing economic conditions.
(C) To reﬂect the relative roles of the copyright owner and the
copyright user in the product made available to the public
with respect to relative creative contribution, technological
contribution, capital investment, cost, risk, and contribution to the opening of new markets for creative expression
and media for their communication.
(D) To minimize any disruptive impact on the structure of the
industries involved and on generally prevailing industry
practices.
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(a)

Physical phonorecord deliveries and permanent digital downloads. –
For every physical phonorecord and permanent digital download made and distributed, the royalty rate payable for each
work embodied in such phonorecord shall be either 9.1 cents
or 1.75 cents per minute of playing time or fraction thereof,
whichever amount is larger.
(b) Ringtones. – For every ringtone made and distributed, the royalty rate payable for each work embodied therein shall be 24
cents.
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Most creators of phonorecords do not use the compulsory license
mechanism to obtain permission to use musical works. In 1927 the
National Music Publishers Company created the Harry Fox Agency,
a wholly owned subsidiary, to issue and administer mechanical licenses. Today, most mechanical licenses are obtainde through the
Harry Fox Agency. The Harry Fox Agency has authority to issue licenses only for those musical works for which Harry Fox has been
granted authority by the copyright owner to act on the copyright
owner’s behalf. However, the number of copyright owners that have

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entered into such agreements is staggering: Harry Fox represents
over 27,000 music publishers, who in turn represent the interests of
more than 160,000 songwriters, who own more than 2.5 million copyrighted musical works.
While the creators of most sound recordings do not utilize the
statutory provisions for the compulsory mechanical license, the availability of such a license does aﬀect the rate paid under a license
granted by Harry Fox and the terms of the license. The parties to the
licenses administered by Harry Fox are negotiating in the shadow of
the compulsory license that both parties know could be used instead.
Thus, for example, it is rare that the agreed license rate exceeds the
rate set by the Copyright Oﬃce.

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Karaoke devices necessarily involve copyrighted works because both
musical compositions and their accompanying song lyrics are essential to their operation. BMG owns or administers copyrights in musical compositions and through its licensing agent, the Harry Fox
Agency, has issued to Leadsinger compulsory mechanical licenses to
copyrighted musical compositions under § 115 of the Copyright Act.
In addition to the mechanical fee required to secure a compulsory license, BMG has demanded that Leadsinger and other karaoke companies pay a ”lyric reprint” fee and a ”synchronization fee.” Leadsinger
has refused to pay these additional fees and ﬁled for declaratory judgment to resolve whether it has the right to visually display song lyrics
in real time with song recordings without holding anything more
than the § 115 compulsory licenses it already possesses.
In its complaint, Leadsinger describes the karaoke device it manufactures as ”an all-in-one microphone player” that has recorded
songs imbedded in a microchip in the microphone. When the microphone is plugged into a television, the lyrics of the song appear on
the television screen in real time as the song is playing, enabling the
consumer to sing along with the lyrics. Though most karaoke companies put their recordings on casse es, compact discs, or use a compact disc + graphic (”CD + G”) or DVD format, these other karaoke
devices, much like Leadsinger’s, display lyrics visually when played
in a device that is connected to a television.
While it is true that the microchip in Leadsinger’s device stores visual images and visual representations of lyrics in addition to sounds,
the plain language of the Copyright Act does not expressly preclude a ﬁnding that devices on which sounds and visual images are
ﬁxed fall within the deﬁnition of phonorecords. The deﬁnition of
phonorecords is explicit, however, that audiovisual works are not
phonorecords and are excluded from § 115’s compulsory licensing

# 3&130%6$5*0/4

scheme. We need not se le upon a precise interpretation of § 101’s
deﬁnition of phonorecords in this case because Leadsinger’s karaoke
device meets each element of the statutory deﬁnition of audiovisual
works and, therefore, cannot be a phonorecord.
As stated above, § 101 of the Copyright Act deﬁnes audiovisual
works as works consisting of ”a series of related images” that are
”intrinsically intended to be shown by the use of machines.” First,
the visual representation of successive portions of song lyrics that
Leadsinger’s device projects onto a television screen constitutes ”a series of related images.” Though Leadsinger suggests that its images of
song lyrics are not related, the images bear a signiﬁcant relationship
when examined in context. In its complaint, Leadsinger explained
that the purpose of karaoke is for the consumer to sing the lyrics to a
song ”in real time” as the song is playing. To accomplish this purpose,
it is necessary that the images of song lyrics be presented sequentially
so as to match the accompanying music and make the lyrics readable.
We hold that Leadsinger’s device falls within the deﬁnition of an
audiovisual work. As a result, in addition to any § 115 compulsory
licenses necessary to make and distribute phonorecords, Leadsinger
is also required to secure synchronization licenses to display images
of song lyrics in timed relation with recorded music.

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The exclusive right of the owner of copyright in a sound recording
under clause (1) of section 106 is limited to the right to duplicate the
sound recording in the form of phonorecords or copies that directly
or indirectly recapture the actual sounds ﬁxed in the recording. The
exclusive right of the owner of copyright in a sound recording under
clause (2) of section 106 is limited to the right to prepare a derivative
work in which the actual sounds ﬁxed in the sound recording are rearranged, remixed, or otherwise altered in sequence or quality. The
exclusive rights of the owner of copyright in a sound recording under clauses (1) and (2) of section 106 do not extend to the making or
duplication of another sound recording that consists entirely of an independent ﬁxation of other sounds, even though such sounds imitate
or simulate those in the copyrighted sound recording.
Everyone agrees that under § 114(b), reproductions of sound recordings are to be judged by a diﬀerent standard of similarity than other
types of works. But they disagree on what that standard is.

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This action arises out of the use of a sample from the composition
and sound recording ”Get Oﬀ Your Ass and Jam” (”Get Oﬀ”) in the
rap song ”100 Miles and Runnin’” (”100 Miles”), which was included
in the sound track of the movie I Got the Hook Up (Hook Up). The
recording ”Get Oﬀ” opens with a three-note combination solo guitar
”riﬀ” that lasts four seconds. According to one of plaintiﬀs’ experts,
Randy Kling, the recording ”100 Miles” contains a sample from that
guitar solo. Speciﬁcally, a two-second sample from the guitar solo
was copied, the pitch was lowered, and the copied piece was ”looped”
and extended to 16 beats. Kling states that this sample appears in the
sound recording ”100 Miles” in ﬁve places; speciﬁcally, at 0:49, 1:52,
2:29, 3:20 and 3:46. By the district court’s estimation, each looped
segment lasted approximately 7 seconds.
Bridgeport and Westbound claim to own the musical composition
and sound recording copyrights in ”Get Oﬀ Your Ass and Jam” by
George Clinton, Jr. and the Funkadelics. We assume, as did the district court, that plaintiﬀs would be able to establish ownership in the
copyrights they claim. There seems to be no dispute either that ”Get
Oﬀ” was digitally sampled or that the recording ”100 Miles” was included on the sound track of I Got the Hook Up.
Although musical compositions have always enjoyed copyright
protection, it was not until 1971 that sound recordings were subject
to a separate copyright. If one were to analogize to a book, it is not
the book, i.e., the paper and binding, that is copyrightable, but its
contents. There are probably any number of reasons why the decision was made by Congress to treat a sound recording diﬀerently
from a book even though both are the medium in which an original
work is ﬁxed rather than the creation itself. None the least of them
certainly were advances in technology which made the ”pirating” of
sound recordings an easy task. The balance that was struck was to
give sound recording copyright holders the exclusive right ”to duplicate the sound recording in the form of phonorecords or copies that
directly or indirectly recapture the actual sounds ﬁxed in the recording.” This means that the world at large is free to imitate or simulate
the creative work ﬁxed in the recording so long as an actual copy of
the sound recording itself is not made. That leads us directly to the
issue in this case. If you cannot pirate the whole sound recording, can
you ”lift” or ”sample” something less than the whole. Our answer to
that question is in the negative.
To begin with, there is ease of enforcement. Get a license or do
not sample. We do not see this as stiﬂing creativity in any signiﬁcant
way. It must be remembered that if an artist wants to incorporate a

# 3&130%6$5*0/4

”riﬀ” from another work in his or her recording, he is free to duplicate the sound of that ”riﬀ” in the studio. Second, the market will control the license price and keep it within bounds. The sound recording
copyright holder cannot exact a license fee greater than what it would
cost the person seeking the license to just duplicate the sample in the
course of making the new recording. Third, sampling is never accidental. It is not like the case of a composer who has a melody in his
head, perhaps not even realizing that the reason he hears this melody
is that it is the work of another which he had heard before. When you
sample a sound recording you know you are taking another’s work
product.12
This analysis admi edly raises the question of why one should,
without infringing, be able to take three notes from a musical composition, for example, but not three notes by way of sampling from a
sound recording. Why is there no de minimis taking or why should
substantial similarity not enter the equation. Our ﬁrst answer to this
question is what we have earlier indicated. We think this result is
dictated by the applicable statute. Second, even when a small part of
a sound recording is sampled, the part taken is something of value.
No further proof of that is necessary than the fact that the producer of
the record or the artist on the record intentionally sampled because it
would (1) save costs, or (2) add something to the new recording, or (3)
both. For the sound recording copyright holder, it is not the ”song”
but the sounds that are ﬁxed in the medium of his choice. When those
sounds are sampled they are taken directly from that ﬁxed medium.
It is a physical taking rather than an intellectual one.
This case also illustrates the kind of mental, musicological, and
technological gymnastics that would have to be employed if one were
to adopt a de minimis or substantial similarity analysis. The district
judge did an excellent job of navigating these troubled waters, but not
without dint of great eﬀort. When one considers that he has hundreds
of other cases all involving diﬀerent samples from diﬀerent songs, the
value of a principled bright-line rule becomes apparent.
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In the early 1990s, pop star Madonna Louise Ciccone, commonly
known by her ﬁrst name only, released the song Vogue to great commercial success. In this copyright infringement action, Plaintiﬀ VMG
Salsoul, LLC, alleges that the producer of Vogue, Shep Pe ibone,
copied a 0.23-second segment of horns from an earlier song, known as
12

The opinion in Grand Upright Music Ltd. v. Warner Bros. Records, Inc., 780 F.
Supp. 182 (S.D.N.Y. 1991), one of the ﬁrst cases to deal with digital sampling, begins
with the phrase, ”Thou shalt not steal.”

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Love Break, and used a modiﬁed version of that snippet when recording Vogue. Plaintiﬀ asserts that Defendants Madonna, Pe ibone, and
others thereby violated Plaintiﬀ’s copyrights to Love Break.
Plaintiﬀ has submi ed evidence of actual copying. In particular,
Tony Shimkin has sworn that he, as Pe ibone’s personal assistant,
helped with the creation of Vogue and that, in Shimkin’s presence,
Pe ibone directed an engineer to introduce sounds from Love Break
into the recording of Vogue. Additionally, Plaintiﬀ submi ed reports
from music experts who concluded that the horn hits in Vogue were
sampled from Love Break.
Plaintiﬀ argues that even if the copying here is trivial, that fact is irrelevant because the de minimis exception does not apply to infringements of copyrighted sound recordings. Plaintiﬀ urges us to follow
the Sixth Circuit’s decision in Bridgeport, which adopted a brightline
rule: For copyrighted sound recordings, any unauthorized copying –
no ma er how trivial – constitutes infringement.
We squarely held in Newton that the de minimis exception applies
to claims of infringement of a copyrighted composition. But it is an
open question in this circuit whether the exception applies to claims
of infringement of a copyrighted sound recording.
A straightforward reading of the third sentence in S 114(b) reveals Congress’ intended limitation on the rights of a sound recording copyright holder: A new recording that mimics the copyrighted
recording is not an infringement, even if the mimicking is very well
done, so long as there was no actual copying. That is, if a band played
and recorded its own version of Love Break in a way that sounded
very similar to the copyrighted recording of Love Break, then there
would be no infringement so long as there was no actual copying of
the recorded Love Break. But the quoted passage does not speak to
the question that we face: whether Congress intended to eliminate
the longstanding de minimis exception for sound recordings in all circumstances even where, as here, the new sound recording as a whole
sounds nothing like the original.
We disagree [with Bridgeport’s ”physical taking” analysis] for
three reasons. First, the possibility of a ”physical taking” exists with
respect to other kinds of artistic works as well, such as photographs,
as to which the usual de minimis rule applies. See, e.g., Sandoval v.
New Line Cinema Corp. (aﬃrming summary judgment to the defendant because the defendant’s use of the plaintiﬀ’s photographs in
a movie was de minimis). A computer program can, for instance,
”sample” a piece of one photograph and insert it into another photograph or work of art. We are aware of no copyright case carving out
an exception to the de minimis requirement in that context, and we
can think of no principled reason to diﬀerentiate one kind of ”physical taking” from another. Second, even accepting the premise that

$ 1&3'03."/$&4

sound recordings diﬀer qualitatively from other copyrighted works
and therefore could warrant a diﬀerent infringement rule, that theoretical diﬀerence does not mean that Congress actually adopted a
diﬀerent rule. Third, the distinction between a ”physical taking” and
an ”intellectual one,” premised in part on ”saving costs” by not having to hire musicians, does not advance the Sixth Circuit’s view. The
Supreme Court has held unequivocally that the Copyright Act protects only the expressive aspects of a copyrighted work, and not the
”fruit of the [author’s] labor.” Feist. Indeed, the Supreme Court in
Feist explained at length why, though that result may seem unfair,
protecting only the expressive aspects of a copyrighted work is actually a key part of the design of the copyright laws. Accordingly,
all that remains of Bridgeport’s argument is that the second artist has
taken some expressive content from the original artist. But that is always true, regardless of the nature of the work, and the de minimis
test nevertheless applies.
We hold that the ”de minimis” exception applies to actions alleging infringement of a copyright to sound recordings.

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If the only quirk of music copyright were the division between composition and performance, there would be no need for this chapter.
Other arts also routinely distinguish between source text and performance: theater, dance, television, and ﬁlm all routinely split authorship between writer and performer. But music copyright is unique
in the degree to which reproduction and performance are governed
by startlingly diﬀerent rules. So we start with a quick hit on the technical diﬀerence between reproduction and performance according to
the Copyright Act.
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Yahoo! and RealNetworks oﬀer their customers the ability to download musical works over the Internet. It is undisputed that these
downloads create copies of the musical works, for which the parties
agree the copyright owners must be compensated. However, the parties dispute whether these downloads are also public performances
of the musical works, for which the copyright owners must separately
and additionally be compensated. The district court held that these
downloads are not public performances, and we agree.
The downloads at issue in this appeal are not musical performances that are contemporaneously perceived by the listener. They
are simply transfers of electronic ﬁles containing digital copies from

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an on-line server to a local hard drive. The downloaded songs are not
performed in any perceptible manner during the transfers; the user
must take some further action to play the songs after they are downloaded. Because the electronic download itself involves no recitation,
rendering, or playing of the musical work encoded in the digital transmission, we hold that such a download is not a performance of that
work, as deﬁned by § 101.
The Internet Companies’ stream[ing] transmissions, which all parties agree constitute public performances, illustrate why a download
is not a public performance. A stream is an electronic transmission
that renders the musical work audible as it is received by the clientcomputer’s temporary memory. This transmission, like a television
or radio broadcast, is a performance because there is a playing of
the song that is perceived simultaneously with the transmission. In
contrast, downloads do not immediately produce sound; only after a ﬁle has been downloaded on a user’s hard drive can he perceive a performance by playing the downloaded song. Unlike musical works played during radio broadcasts and stream transmissions,
downloaded musical works are transmi ed at one point in time and
performed at another. Transmi al without a performance does not
constitute a public performance.

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The general rule is that permission of the copyright owner is required
to perform a musical work. But in practice, most uses – including
broadcasting – are covered by a blanket license issued by one of the
”performing rights organizations” (PROs): ASCAP, BMI, SESAC, and
GMR. Musical-work copyright owners sign up with one of the four
PROs, if they wish, which then issues public- performance licenses
for all of the works in its ”repertory,” i.e., one license allows the licensee to perform any musical work available through that PRO. The
copyright owners still control the licensing of their other rights, and
they are free to negotiate public-performance licenses individually as
well. We ﬁrst discuss the scope of public-performance rights in musical works, then focus on the role of the PROs, and ﬁnish with a few
miscellaneous cases.
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 64
These suits were brought in the federal court for western Missouri by
the American Society of Composers, Authors and Publishers, and one

$ 1&3'03."/$&4

of its members, against the Jewell-LaSalle Realty Company, which operates the LaSalle Hotel at Kansas City. The hotel maintains a master
radio receiving set which is wired to each of the public and private
rooms. As part of the service oﬀered to its guests, loud-speakers or
head-phones are provided so that a program received on the master
set can, if desired, be simultaneously heard throughout the building.
Among the programs received are those transmi ed by Wilson Duncan who operates a duly licensed commercial broadcasting station
in the same city. Duncan selects his own programs and broadcasts
them for proﬁt. There is no arrangement of any kind between him
and the hotel. Both were notiﬁed by the plaintiﬀ society of the existence of its copyrights and were advised that unless a license were obtained, performance of any copyrighted musical composition owned
by its members was forbidden. Thereafter, a copyrighted popular
song, owned by the plaintiﬀs, was repeatedly broadcast by Duncan
and was received by the hotel company and made available to its
guests.
Although the art of radio broadcasting was unknown at the time
the Copyright Act of 1909 was passed, and the means of transmission
and reception now employed are wholly unlike any then in use, it is
not denied that such broadcasting may be within the scope of the Act.
The argument here urged, however, is that since the transmi ing of a
musical composition by a commercial broadcasting station is a public
performance for proﬁt, control of the initial radio rendition exhausts
the monopolies conferred – both that of making copies (including
records) and that of giving public performances for proﬁt (including
mechanical performances from a record); and that a monopoly of the
reception, for commercial purposes, of this same rendition is not warranted by the Act. The analogy is invoked of the rule under which
an author who permits copies of his writings to be made cannot, by
virtue of his copyright, prevent or restrict the transfer of such copies.
Compare Bobbs-Merrill. This analogy is inapplicable. It is true that control of the sale of copies is not permi ed by the Act, but a monopoly
is expressly granted of all public performances for proﬁt.
The defendant next urges that it did not perform, because there
can be but one actual performance each time a copyrighted selection
is rendered; and that if the broadcaster is held to be a performer, one
who, without connivance, receives and distributes the transmi ed selection cannot also be held to have performed it. But nothing in the
Act circumscribes the meaning to be a ributed to the term ”performance,” or prevents a single rendition of a copyrighted selection from
resulting in more than one public performance for proﬁt. While this
may not have been possible before the development of radio broadcasting, the novelty of the means used does not lessen the duty of the
courts to give full protection to the monopoly of public performance

$)"15&3  .64*$

for proﬁt which Congress has secured to the composer. No reason is
suggested why there may not be more than one liability. And since
the public reception for proﬁt in itself constitutes an infringement,
we have no occasion to determine under what circumstances a broadcaster will be held to be a performer, or the eﬀect upon others of his
paying a license fee.
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Notwithstanding the provisions of section 106, the following are not
infringements of copyright:
(5) (A) except as provided in subparagraph (B), communication
of a transmission embodying a performance or display of
a work by the public reception of the transmission on a
single receiving apparatus of a kind commonly used in private homes, unless
(i) a direct charge is made to see or hear the transmission;
or
(ii) the transmission thus received is further transmi ed
to the public;
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 64
Since 1897, the copyright laws have vested in the owner of a copyrighted musical composition the exclusive right to perform the work
publicly for proﬁt, but the legal right is not self-enforcing. In 1914,
Victor Herbert and a handful of other composers organized ASCAP
because those who performed copyrighted music for proﬁt were so
numerous and widespread, and most performances so ﬂeeting, that
as a practical ma er it was impossible for the many individual copyright owners to negotiate with and license the users and to detect
unauthorized uses. ASCAP was organized as a ”clearing-house” for
copyright owners and users to solve these problems associated with
the licensing of music. As ASCAP operates today, its 22,000 members
grant it nonexclusive rights to license nondramatic performances of
their works, and ASCAP issues licenses and distributes royalties to
copyright owners in accordance with a schedule reﬂecting the nature
and amount of the use of their music and other factors.
BMI, a nonproﬁt corporation owned by members of the broadcasting industry, was organized in 1939, is aﬃliated with or represents some 10,000 publishing companies and 20,000 authors and composers, and operates in much the same manner as ASCAP. Almost

$ 1&3'03."/$&4

every domestic copyrighted composition is in the repertory either of
ASCAP, with a total of three million compositions, or of BMI, with
one million.
Both organizations operate primarily through blanket licenses,
which give the licensees the right to perform any and all of the compositions owned by the members or aﬃliates as often as the licensees
desire for a stated term. Fees for blanket licenses are ordinarily a percentage of total revenues or a ﬂat dollar amount, and do not directly
depend on the amount or type of music used. Radio and television
broadcasters are the largest users of music, and almost all of them
hold blanket licenses from both ASCAP and BMI.
The complaint ﬁled by CBS charged various violations of the Sherman Act and the copyright laws. CBS argued that ASCAP and BMI
are unlawful monopolies and that the blanket license is illegal price
ﬁxing, an unlawful tying arrangement, a concerted refusal to deal,
and a misuse of copyrights.
The Department of Justice ﬁrst investigated allegations of anticompetitive conduct by ASCAP over 50 years ago. In separate complaints in 1941, the United States charged that the blanket license,
which was then the only license oﬀered by ASCAP and BMI, was an
illegal restraint of trade and that arbitrary prices were being charged
as the result of an illegal copyright pool. The Government sought to
enjoin ASCAP’s exclusive licensing powers and to require a diﬀerent
form of licensing by that organization. The case was se led by a consent decree that imposed tight restrictions on ASCAP’s operations.
Following complaints relating to the television industry, successful
private litigation against ASCAP by movie theaters, and a Government challenge to ASCAP’s arrangements with similar foreign organizations, the 1941 decree was reopened and extensively amended in
1950.
Under the amended decree, which still substantially controls the
activities of ASCAP, members may grant ASCAP only nonexclusive
rights to license their works for public performance. Members, therefore, retain the rights individually to license public performances,
along with the rights to license the use of their compositions for other
purposes. ASCAP itself is forbidden to grant any license to perform
one or more speciﬁed compositions in the ASCAP repertory unless
both the user and the owner have requested it in writing to do so.
ASCAP is required to grant to any user making wri en application a
nonexclusive license to perform all ASCAP compositions, either for
a period of time or on a per-program basis. ASCAP may not insist on
the blanket license, and the fee for the per-program license, which is
to be based on the revenues for the program on which ASCAP music is played, must oﬀer the applicant a genuine economic choice between the per-program license and the more common blanket license.

$)"15&3  .64*$

If ASCAP and a putative licensee are unable to agree on a fee within
60 days, the applicant may apply to the District Court for a determination of a reasonable fee, with ASCAP having the burden of proving
reasonableness.
CBS would prefer that ASCAP be authorized, indeed directed, to
make all its compositions available at standard per-use rates within
negotiated categories of use. But if this in itself or in conjunction with
blanket licensing constitutes illegal price ﬁxing by copyright owners,
CBS urges that an injunction issue forbidding ASCAP to issue any
blanket license or to negotiate any fee except on behalf of an individual member for the use of his own copyrighted work or works. Thus,
we are called upon to determine that blanket licensing is unlawful
across the board. We are quite sure, however, that the per se rule
does not require any such holding.
The blanket license, as we see it, is not a naked restraint of trade
with no purpose except stiﬂing of competition, but rather accompanies the integration of sales, monitoring, and enforcement against
unauthorized copyright use. As we have already indicated, ASCAP
and the blanket license developed together out of the practical situation in the marketplace: thousands of users, thousands of copyright
owners, and millions of compositions. Most users want unplanned,
rapid, and indemniﬁed access to any and all of the repertory of compositions, and the owners want a reliable method of collecting for the
use of their copyrights. Individual sales transactions in this industry
are quite expensive, as would be individual monitoring and enforcement, especially in light of the resources of single composers. Indeed,
as both the Court of Appeals and CBS recognize, the costs are prohibitive for licenses with individual radio stations, nightclubs, and
restaurants, and it was in that milieu that the blanket license arose.
ASCAP, in short, made a market in which individual composers are
inherently unable to compete fully eﬀectively.
With this background in mind, which plainly enough indicates
that over the years, and in the face of available alternatives, the blanket license has provided an acceptable mechanism for at least a large
part of the market for the performing rights to copyrighted musical
compositions, we cannot agree that it should automatically be declared illegal in all of its many manifestations.
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The term of this Agreement commences as of January 1, 2010, and
ends on December 31, 2016, unless earlier terminated as hereinafter
provided.

$ 1&3'03."/$&4

A. “ASCAP Repertory” means musical works for which ASCAP
has the right to license for public performance now or hereafter
during the term of this Agreement. All compositions wri en
and copyrighted by ASCAP members and in the repertory on
the date this Agreement is executed are included for the full
term of this Agreement. Compositions wri en or copyrighted
by ASCAP members during the license term are included for
the full balance of the term.
A. ASCAP grants LICENSEE a non-exclusive Through-to-theAudience License to perform publicly in the U.S. Territory,
by Radio Broadcasting or New Media Transmissions, nondramatic performances of all musical works in the ASCAP
Repertory during the Term.
B. If you elect to pay a license fee on the blanket basis for your
Radio Broadcasting, subject to the election provisions of Paragraphs 6.A and 6.B below, you agree to pay us a license fee of
1.7% of your Revenue Subject to Fee from Radio Broadcasting
for each year 2012 through 2016 of the Agreement.
G. Minimum Fee. In no event shall your total annual license fee be
less than $588.
H. Annual Reports. You will submit a report of the license fee due
for each year 2012 through 2016 of this Agreement, by April 1st
of the following year, by fully completing the Statement of Account that will be made available on ASCAP’s website. For the
avoidance of any doubt, all Annual Reports must be submi ed
using the electronic format and Internet-based delivery transmission methodology to be developed by ASCAP.
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East Coast owns and operates the Roscoe’s House of Chicken
and Waﬄes chain of restaurants in Southern California. The codefendant, Herbert Hudson, is the sole oﬃcer and director of East
Coast.
The Long Beach Roscoe’s opened in 2001. A ached to the restaurant is a bar and lounge area called the ”Sea Bird Jazz Lounge.”
Though the parties dispute whether East Coast owns the Long Beach
Roscoe’s, as it does the other locations, Hudson submi ed a signed
liquor license application for the Long Beach Roscoe’s to the California Department of Alcoholic Beverage Control in 2001, which named
the applicant as ”East Coast Foods Inc.”

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Shortly after the Long Beach Roscoe’s opened, ASCAP contacted
East Coast to oﬀer it a license to perform music by ASCAP members
at the restaurant and lounge. East Coast did not purchase a license,
and between 2001 and 2007 East Coast ignored repeated requests
from ASCAP to pay licensing fees. In 2008, ASCAP engaged an independent investigator, Sco Greene, to visit the Long Beach Roscoe’s,
make notes of his visit, and prepare a detailed investigative report indicating whether copyright infringement was occurring at the venue.
Greene, who considers himself knowledgeable about every genre of
music ”except heavy metal and explicit rap,” had conducted over 300
investigations for ASCAP when he was retained for the Roscoe’s job.
Greene visited Roscoe’s on May 30, 2008. During his visit, he
surreptitiously noted the musical compositions performed by that
night’s live musical act, Azar Lawrence & the L.A. Legends, as well as
songs played from a CD over the lounge’s sound system. During the
live performance, he was able to personally identify the jazz compositions ”All or Nothing at All,” ”It’s Easy To Remember,” ”My Favorite
Things,” and ”Be-Bop,” all popularly associated with John Coltrane.
In several cases, the band leader announced the titles of the songs
before playing them. Greene also identiﬁed four songs by the jazzfusion group Hiroshima that played on the venue’s CD player: ”BopHop,” ”Once Before I Sleep,” ”One Fine Day,” and ”Only Love.” He
did not personally recognize the Hiroshima songs, but he approached
the CD player and transcribed the titles directly from the CD jewel
case as the songs played.
After Greene submi ed his investigative report, ASCAP conﬁrmed that the Music Companies own validly registered copyrights
to all eight of the songs Greene identiﬁed. The Music Companies
sued East Coast and Hudson for eight counts of copyright infringement, corresponding to the eight songs Greene heard publicly performed at the Long Beach Roscoe’s.
We agree with the district court that East Coast and Hudson are
jointly and severally liable for the infringement. Overwhelming evidence showed that East Coast and Hudson exercised control over
both the Long Beach Roscoe’s and the Sea Bird Jazz Lounge, and derived a ﬁnancial beneﬁt from the musical performances in the lounge.
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Timothy Rice wrote the libre o for Jesus Christ Superstar and Andrew
Lloyd Webber composed the score of the opera’s overture and 22
songs which depict the last seven days in the life of Christ. The Robert
Stigwood Group Limited (”Stigwood”) acquired the rights for stage
productions and dramatic presentations of the opera, and its rights

$ 1&3'03."/$&4

are those allegedly infringed.
Each Original American Touring Company (”OATC”) so-called
concert consists of 20 of the 23 songs from Jesus Christ Superstar,
sung sequentially with one exception, and three additional religious
works.
OATC’s claim that its productions do not infringe Stigwood’s
rights is based upon the usual and customary agreement between
the American Society of Composers, Authors and Publishers (”ASCAP”) and Leeds Music Corporation, an ASCAP member. ASCAP
is authorized by its members to license only nondramatic performing
rights of compositions in its repertory. Consequently, pursuant to the
standard ASCAP agreement utilized here, ASCAP was authorized by
Leeds to give:
1. (b) The non-exclusive right of public performance of
the separate numbers, songs, fragments or arrangements,
melodies or selections forming part or parts of musical
plays and dramatico-musical compositions, the Owner reserving and excepting from this grant the right of performance of musical plays and dramatico-musical compositions in their entirety, or any part of such plays or
dramatico-musical compositions on the legitimate stage.

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Thus, while ASCAP licensees can perform the individual songs from
Jesus Christ Superstar, paragraph 3 of the standard license indicates
that it does not extend to presentations of:
(a) Oratorios, choral, operatic, or dramatico-musical
works . . . in their entirety or songs or other excerpts from
operas or musical plays accompanied either by word, pantomime, dance or visual representation of the work from
which the music is taken; but fragments or instrumental
selections from such works may be instrumentally rendered without words, dialogue, costume, accompanying
dramatic action or scenic accessory and unaccompanied
by any stage action or visual representation (by motion
picture or otherwise) of the work of which such music
forms a part.
The facts before us vividly paint the dramatic nature of OATC’s performance. 20 of 23 Superstar selections are performed in defendant’s
concert, all but one in identical sequence as in the copyrighted opera.
The conclusion is inescapable that the story of the last seven days in
the life of Christ is portrayed in the OATC performances substantially
as in Superstar. One might appropriately ask why, if OATC did not
intend that the same story be told, would it insist on preserving the
sequence of the songs presented in Jesus Christ Superstar, which when

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performed in that fashion, tell the story even in the absence of intervening dialogue? As Rice v. American Program Bureau instructed, the
lack of scenery or costumes in the OATC production does not ipso
facto prevent it from being dramatic. Indeed, radio performances of
operas are considered dramatic, because the story is told by the music
and lyrics. here can be no question that the OATC concerts, in which
singers enter and exit, maintain speciﬁc roles and occasionally make
gestures, and in which the story line of the original play is preserved
by the songs which are sung in almost perfect sequence using 78 of
the 87 minutes of the original copyrighted score, is dramatic.
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Any owners of copyright in [any nondramatic musical work embodied in a phonorecord] and any operators of coin-operated
phonorecord players may negotiate and agree upon the terms and
rates of royalty payments for the performance of such works and
the proportionate division of fees paid among copyright owners, and
may designate common agents to negotiate, agree to, pay, or receive
such royalty payments.
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Before 1978, ”coin-operated phonorecord players,” commonly referred to as jukeboxes, generally were not licensed by ASCAP, BMI,
SESAC or the U.S. Government. However, due to revisions of the
Copyright Law, a provision was included for a compulsory license
from the U.S. Copyright Oﬃce for any publicly performed nondramatic musical works by means of a ”coin-operated phonorecord
player” (jukebox). This act was placed into eﬀect in 1978. At that time
jukebox operators submi ed payments to the Licensing Division of
the U.S. Copyright Oﬃce in Washington D.C. Fees were structured
on a ﬂat per-box rate.
In 1989, the United States joined an international copyright treaty
named the Berne Convention. One aspect of the Berne Convention is
to oﬀer ”negotiated” licenses as opposed to ”compulsory” licenses.
Consequently, ASCAP, BMI and SESAC negotiated a license with
the Amusement & Music Operators Association (AMOA), the largest
trade association representing jukebox operators.
The result of these negotiations was the 1990 creation of the Jukebox License Oﬃce (JLO) and the Jukebox License Agreement, which
is administered by the JLO. This agreement provides jukebox opera-

$ 1&3'03."/$&4

tors total access to all songs in the ASCAP, BMI and SESAC repertories. The Jukebox License Agreement is a single, economical, music
license that provides the authorization required under the U.S. Copyright Law to publicly play virtually every copyrighted song on a coinoperated jukebox.
The original Jukebox License Agreement was re-negotiated by ASCAP, BMI, SESAC and the AMOA in 1999 and again in 2001. A new
Jukebox License Agreement is now in eﬀect as of January 1, 2007.
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Notwithstanding the provisions of section 106, the following are not
infringements of copyright:
(7) performance of a nondramatic musical work by a vending establishment open to the public at large without any direct or
indirect admission charge, where the sole purpose of the performance is to promote the retail sale of copies or phonorecords of
the work, or of the audiovisual or other devices utilized in such
performance, and the performance is not transmi ed beyond
the place where the establishment is located and is within the
immediate area where the sale is occurring;

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Most performances of sound recordings – including performances in
person and traditional ”terrestrial” radio broadcasts – are not covered by federal copyright law and do not require permission from the
copyright owner. But there is an exclusive right to control the performance of a sound recording via ”digital audio transmission,” which
is subject to an immensely complicated statutory licensing system.
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The exclusive rights of the owner of copyright in a sound recording
do not include any right of performance under section 106(4).
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:
(6) in the case of sound recordings, to perform the copyrighted
work publicly by means of a digital audio transmission.
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In the 1995 The Digital Performance Right in Sound Recordings Act
(DPRSRA), Congress gave sound recording owners an exclusive public performance right, but one limited to digital audio transmissions,
and created the section 114 statutory license for noninteractive subscription providers, including satellite radio, engaged in digital performances. In 1998, Congress extended the section 114 compulsory
license to expressly include webcasting as a covered activity. Traditional over-the-air broadcasts, however, were expressly exempted
from the sound recording performance right.
Congress drew this legal distinction based on perceived diﬀerences between digital and traditional services, believing at the time
that traditional broadcasters posed “no threat” to the recording industry, in contrast to digital transmission services. A longstanding
justiﬁcation for the lack of a sound recording performance right has
been the promotional eﬀect that traditional airplay is said to have
on the sale of sound recordings. In the traditional view of the market,
broadcasters and labels representing copyright owners enjoy a mutually beneﬁcial relationship whereby terrestrial radio stations exploit
sound recordings to a ract the listener pools that generate advertising dollars, and, in return, sound recording owners receive exposure
that promotes record and other sales.
The section 114 statutory license allows diﬀerent types of noninteractive digital music services – free and paid internet radio services, “preexisting” satellite radio services, and “preexisting” music subscription services – to perform sound recordings upon compliance with the statutory license requirements, including the payment of royalties as determined by the CRB. In addition, recognizing
that such digital services must make server reproductions of sound
recordings – sometimes called “ephemeral” copies – to facilitate their
digital transmissions, Congress established a related statutory license
under section 112 to authorize the creation of these copies. Rates and
terms for the section 112 license are also established by the CRB.
The section 112 and 114 licenses for sound recordings are subject
to a number of technical limitations. For instance, services relying
on the section statutory license are prohibited from publishing an advance program schedule or otherwise announcing or identifying in
advance when a speciﬁc song, album or artist will be played. Another
example is the “sound recording performance complement,” which
limits the number tracks from a single album or by a particular artist
that may be played during a 3-hour period.
Payment and reporting of royalties under the section 112 and
114 licenses are made to a single non-proﬁt agent: SoundExchange.
SoundExchange was established by the RIAA in 2000 and in 2003 was
spun oﬀ as an independent entity. The Copyright Act speciﬁes how
royalties collected under section 114 are to be distributed: 50% go to

$ 1&3'03."/$&4

the copyright owner of the sound recording, typically a record label;
45% go to the featured recording artist or artists; 21/2% go to an agent
representing nonfeatured musicians who perform on sound recordings; and 21/2% to an agent representing nonfeatured vocalists who
perform on sound recordings. Section 112 fees are paid by SoundExchange directly to the sound recording owner. Prior to distributing
royalty payments, SoundExchange deducts the reasonable costs incurred in carrying out its responsibilities.
The statutory licensing framework applies only to noninteractive
(i.e., radio-style) services; interactive or on-demand services are not
covered. The distinction between interactive and noninteractive services has been the ma er of some debate. The statute provides that
an interactive service is one that enables a member of the public to
receive either “a transmission of a program specially created for the
recipient,“ or “on request, a transmission of a particular sound recording, whether or not as part of a program, which is selected by or on
behalf of the recipient.”
The statutory deﬁnition leads to the question of whether so-called
“personalized” or “custom” music streaming services—services that
tailor the music they play to individual user preferences—transmit
programs that are “specially created for the recipient.” In Arista
Records LLC v. Launch Media, Inc., the Second Circuit held that one
such service that played songs for users based on users’ individual
ratings was not interactive because the service did not displace music sales. Following the Launch Media decision, personalized music
streaming services such as Pandora and Rdio have obtained statutory licenses as noninteractive services for their public performance
of sound recordings. The CRB-established rates do not currently distinguish between such customized services and other services that
simply transmit undiﬀerentiated, radio-style programming over the
internet.
Notably, under section 114, the rate standard applicable to “preexisting” satellite radio and music subscription services (i.e., those
services that existed as of July 31, 1998) diﬀers from that for other
services such as internet radio and newer subscription services. This
distinction is a legislative artifact.
Accordingly, because of the staggered enactment of the section
112 and 114 licenses, royalty rates for a limited set of older services –
Sirius XM, as the only preexisting satellite service, and Music Choice
and Muzak, as the only preexisting subscription services – are governed by the four-factor standard in section 801(b) of the Act. Meanwhile, for all internet radio and other newer digital music services,
and for all ephemeral recordings regardless of the service, the CRB is
to establish rates and terms “that most clearly represent the rates and
terms that would have been negotiated in the marketplace between

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a willing buyer and a willing seller.”
In general, the CRB (like the CARP before it) has adopted “perperformance” rates for internet radio, rather than the percentageof-revenue rates that are typical in PRO licenses. That per-stream
approach has proven controversial. After the CRB’s “Webcasting
II” decision in 2007, a number of internet radio services and broadcasters complained that the per-performance rates were unsustainable. These concerns led Congress to pass legislation giving SoundExchange the authority to negotiate and agree to alternative royalty
schemes that could be binding on all copyright owners and others
entitled to royalty payments in lieu of the CRB-set rates.
In the wake of Congress’ actions, SoundExchange reached agreement with a number of internet radio services, in general adopting
royalty rates that were more closely aligned with the services’ revenues. For example, in 2009, SoundExchange negotiated rates with
large commercial “pureplay” internet radio services (i.e., services like
Pandora that only transmit over the internet). Under that agreement,
those services agreed to pay the greater of 25% of gross revenues or
speciﬁed per-performance rates.
A streaming service that does not fall under the section 112 and
114 licenses – i.e., an interactive service – must negotiate a license
with a record company in order to use the label’s sound recordings.
Since direct licenses are agreed upon at the discretion of the copyright owner and the potential licensee, the license terms can be vastly
diﬀerent from those that apply under the statutory regime. It is common for a music service seeking a sound recording license from a
label to pay a substantial advance against future royalties, and sometimes an administrative fee. Other types of consideration may also
be involved. For example, the major labels acquired a reported combined 18% equity stake in the on-demand streaming service Spotify
allegedly based, at least in part, on their willingness to grant Spotify
rights to use their sound recordings on its service.

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As noted above, Congress did not federalize the copyrights in already
existing sound recordings when it added them to the Copyright Act.
States are free to apply their own law to such sound recordings until
2067. This bifurcation raises signiﬁcant questions about the scope of
those rights.
One live issue is whether there is a public performance right in
pre-1972 sound recordings, and if so, how far it extends. In response
to a series of lawsuits ﬁled by Mark Volman and Howard Kaylan

% 45"5&-"8 1305&$5*0/ '03 13& 406/% 3&$03%*/(4

(a/k/a ”Flo and Eddie”) of the Turtles and the Mothers of Invention,
the federal courts have certiﬁed the issue to the state courts of California, New York, and Florida. As of mid-2017, the New York Court
of Appeals had ruled that there is no such right under New York law,
while the California and Florida Supreme Courts had yet to weigh in.
Representative excerpts giving arguments for (Flo & Eddie v. Sirius
XM [S.D.N.Y.]) and against (Flo & Eddie v. Sirius XM [S.D. Fla.]) the
existence of such rights are presented below.
Another live issue is whether familiar features of federal copyright law – such as fair use and § 512 – apply to pre-1972 sound recordings. The answer for fair use seems to be ”yes,” as discussed in the
Copyright Oﬃce report below. But as for § 512, compare Escape Media
(no) with Vimeo (yes).

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With respect to sound recordings ﬁxed before February 15, 1972, any
rights or remedies under the common law or statutes of any State
shall not be annulled or limited by this title until February 15, 2067.
The preemptive provisions of subsection (a) shall apply to any such
rights and remedies pertaining to any cause of action arising from
undertakings commenced on and after February 15, 2067. No sound
recording ﬁxed before February 15, 1972, shall be subject to copyright
under this title before, on, or after February 15, 2067.
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The states provide protection for pre-1972 sound recordings through
a patchwork of criminal laws, civil statutes and common law. Early
cases relied on common law, principally the tort of unfair competition, to protect sound recordings from unauthorized duplication and
sale. By the 1950s, record piracy had become a serious problem, with
pirates openly competing with record companies. For that reason, attention shifted to legislation imposing criminal sanctions starting in
the 1960s.
In the 1960s, states began to pass laws making it a criminal oﬀense
to duplicate and distribute sound recordings, without authorization,
for commercial purposes. New York was the ﬁrst such state in 1967;
California was the second, in 1968. Several other states followed, and
after the Supreme Court ruled in Goldstein v. California in 1973 that
state law protection of sound recordings was constitutional, many
additional states passed such laws.
Most state criminal laws prohibit, at a minimum, duplication and
sale of recordings done knowingly and willfully with the intent to
sell or proﬁt commercially from the copies. Many have express ex-

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ceptions for activities such as broadcasting, archiving, and personal
use. It is unclear how many cases are brought under these statutes,
but they inform the protection for sound recordings under state law
and provide a backdrop for commercial transactions.
The formulation of prohibited activities varies from state to state.
Almost all states prohibit the act of duplicating without authorization (often referred to as “transferring the sounds”). Most states also
prohibit advertising or oﬀering for sale, and selling or otherwise distributing the unauthorized recordings. Some states also criminalize
activities such as transporting sound recordings within the state (or
possessing them) with knowledge that they are unauthorized, with
intent to sell them.
A number of states have civil laws that address protection for pre1972 sound recordings, directly or indirectly. Section 980(a)(2) of the
California statute provides civil protection of pre-1972 sound recordings and is a good example:
The author of an original work of authorship consisting
of a sound recording initially ﬁxed prior to February 15,
1972, has an exclusive ownership therein until February
15, 2047, as against all persons except one who independently makes or duplicates another sound recording that
does not directly or indirectly recapture the actual sounds
ﬁxed in such prior sound recording, but consists entirely
of an independent ﬁxation of other sounds, even though
such sounds imitate or simulate the sounds contained in
the prior sound recording.

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The few cases decided under § 980(a)(2) have viewed the section as
conferring an intangible property interest in the sound recordings
that can be protected in a misappropriation, conversion or unfair competition claim. They have distinguished the property interest protected by this statute from copyright protection which, under California law, terminates upon publication. Some states speciﬁcally provide that there is a private right of action for violation of the state
criminal piracy provision.
Most states also have some form of non-statutory civil protection, although the precise nature of that protection varies from state
to state. The two most prevalent theories for providing protection
are common law copyright and misappropriation/unfair competition,
but courts have also protected sound recordings under other legal
theories, such as conversion.
The most notable case in recent years involving pre-1972 sound
recordings was Capitol Records, Inc. v. Naxos of America, Inc.. At issue were recordings of classical music performances by Pablo Casals,
Edwin Fischer and Yehudi Menuhin, originally made in the 1930s.

% 45"5&-"8 1305&$5*0/ '03 13& 406/% 3&$03%*/(4

Capitol, with a license from EMI, the successor of the original recording company, remastered the recordings, and was distributing them
in the United States. Naxos obtained and restored the recordings in
the UK, where they were in the public domain, and began marketing them in the United States in competition with Capitol. The New
York Court of Appeals held that foreign sound recordings remain protected under “common law copyright” in New York until 2067, even
though they may be in the public domain in their home country.
In EMI Records Ltd. v. Premise Media Corp., a New York trial court,
ruling on a motion for a preliminary injunction, considered the applicability of the fair use defense to a claim for infringement of common
law copyright in a sound recording. Defendants had used an excerpt
of John Lennon’s “Imagine,” a pre-1972 sound recording, in a documentary ﬁlm entitled “Expelled.” The ﬁlm a empts to counter criticism of the theory of intelligent design. The 99-minute documentary
used a 15-second excerpt from Lennon’s 3-minute sound recording.
Plaintiﬀs argued that under common law copyright, any unauthorized use of a sound recording is actionable. Defendants argued
that only a reproduction of the complete recording was an infringement. The court rejected both claims, but ultimately concluded that
plaintiﬀs had established a prima facie claim of common law copyright infringement. The court observed that New York cases have
acknowledged the existence of a fair use defense to common law infringement claims but that no case had actually applied fair use in
that context. The court recognized that fair use was generally unavailable as a defense with respect to unpublished works, principally to
protect the copyright owner’s right of ﬁrst publication. In the case of
sound recordings, however, common law copyright protection exists
regardless of publication, reasoned the court. “Thus, the erosion of
the publication distinction in the context of sound recordings vitiates
the underlying rationale preventing application of pre-publication
fair use.” Accordingly, the court held that fair use was available as a
defense to plaintiﬀs’ copyright infringement claim.
The court turned for guidance to the federal law of fair use and
speciﬁcally to the fair use factors in 17 U.S.C. § 107 and the cases interpreting them. The court ruled that defendants were likely to prevail on their fair use defense, primarily because the use of the sound
recording excerpt in the ﬁlm could be seen as transformative, conveying a critical message about the song and the viewpoint it represents,
and because there was li le likely market eﬀect from defendants’ use.
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Sirius acknowledges that it “performs” sound recordings, including
pre–1972 sound recordings, by broadcasting them over its satellite
radio network and streaming them over the internet. The pre–1972
sound recordings Sirius has performed include Turtles recordings.
Sirius has moved for summary judgment. It argues that New York
common law copyrights in pre–1972 sound recordings do not aﬀord
an exclusive right of public performance.
I conclude that the New York Court of Appeals would recognize
the exclusive right to public performance of a sound recording as
one of the rights appurtenant to common law copyright in such a
recording. The common law typically protects against unauthorized
reproduction of copies or phonorecords, unauthorized distribution
by publishing or vending, and unauthorized performances. New
York courts have long aﬀorded public performance rights to holders
of common law copyrights in works such as plays and ﬁlms. The Second Circuit concluded over three decades ago that New York would
recognize a public performance right in compilations of ﬁlm clips.
Sirius principally argues that no such right exists because New
York case law contains no discussion of public performance rights
in sound recordings. But the exact same argument could have been
made (and undoubtedly was made, and rejected) in Naxos – a case
decided only in 2005, more than a century after sound recordings
were invented. The very fact that Naxos was decided in favor of the
common law copyright holder, after more than a century of judicial
silence, means that this court can infer nothing – certainly not that
the common law copyright in sound recordings does not encompass
all of the rights traditionally accorded to copyright holders in other
works, including the right of public performance – from the fact that
this is the ﬁrst case to raise the issue.
An arguably stronger argument can be made that years of judicial
silence implies exactly the opposite of what Sirius contends – not that
common law copyright in sound recordings carries no right of public
performance, but rather that common law copyright in sound recordings comes with the entire bundle of rights that holders of copyright
in other works enjoy. No New York case recognizing a common law
copyright in sound recordings has so much as suggested that right
was in some way circumscribed, or that the bundle of rights appurtenant to that copyright was less than the bundle of rights accorded
to plays and musical compositions.
I question whether the investors would be truly surprised if Sirius were to have to pay royalties in order to perform pre–1972 sound
recordings. Sirius, which broadcasts exclusively in non-analog form,
must pay royalties under federal law in order to broadcast post–1972
sound recordings. All Flo and Eddie seeks here is the right to receive
royalties under state law for the digital broadcasting of its pre–1972

% 45"5&-"8 1305&$5*0/ '03 13& 406/% 3&$03%*/(4

recordings – hardly a shocking development in the world of digital
broadcasting.
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There is no speciﬁc Florida legislation covering sound recording
property rights, nor is there a bevy of case law interpreting common
law copyright related to the arts.
If this Court adopts Flo & Eddie’s position, it would be creating
a new property right in Florida as opposed to interpreting the law.
The Court declines to do so. While the Court regularly interprets
Florida law to resolve claims in diversity jurisdiction, it is not the
Court’s place to expand Florida common law by creating new causes
of action. Federal courts are entrusted to apply state law, not make
it. The Court ﬁnds that the issue of whether copyright protection for
pre–1972 recordings should include the exclusive right to public performance is for the Florida legislature.
Indeed, if this Court was to recognize and create this broad right in
Florida, the music industry—including performers, copyright owners, and broadcasters—would be faced with many unanswered questions and diﬃcult regulatory issues including: (1) who sets and administers the licensing rates; (2) who owns a sound recording when
the owner or artist is dead or the record company is out of business;
and (3) what, if any, are the exceptions to the public performance
right. The Florida legislature is in the best position to address these
issues, not the Court. Accordingly, the Court ﬁnds that Florida common law does not provide Flo & Eddie with an exclusive right of
public performance in The Turtles’ sound recordings.
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Defendant Escape Media Group, Inc. developed, owns and operates
an Internet-based music streaming service called Grooveshark. Users
of Grooveshark can upload audio ﬁles (typically songs) to an archive
maintained on defendant’s computer servers, and other users can
search those servers and stream recordings to their own computers
or other electronic devices.
Plaintiﬀ UMG Recordings, Inc. is the owner of the rights in many
popular sound recordings that have been uploaded to Grooveshark.
Many of those recordings were made prior to February 15, 1972 (the
pre–1972 recordings). Defendant concedes that it cannot ensure that
each work uploaded to its servers is a non-infringing work. However,
it has operated Grooveshark with the assumption that it is shielded
from infringement claims by copyright owners by 17 USC § 512, popularly known as the Digital Millenium Copyright Act (DMCA).

$)"15&3  .64*$

Initially, it is clear to us that the DMCA, if interpreted in the manner favored by defendant, would directly violate section 301(c) of the
Copyright Act. Had the DMCA never been enacted, there would
be no question that UMG could sue defendant in New York state
courts to enforce its copyright in the pre–1972 recordings, as soon as
it learned that one of the recordings had been posted on Grooveshark.
However, were the DMCA to apply as defendant believes, that right
to immediately commence an action would be eliminated. Indeed,
the only remedy available to UMG would be service of a takedown
notice on defendant. This is, at best, a limitation on UMG’s rights,
and an implicit modiﬁcation of the plain language of section 301(c).
The word “limit” in 301(c) is unqualiﬁed, so defendant’s argument
that the DMCA does not contradict that section because UMG still
retains the right to exploit its copyrights, to license them and to create derivative works, is without merit. Any material limitation, especially the elimination of the right to assert a common-law infringement claim, is violative of section 301(c) of the Copyright Act.
For defendant to prevail, we would have to conclude that
Congress intended to modify section 301(c) when it enacted the
DMCA. However, there is no reason to conclude that Congress recognized a limitation on common-law copyrights posed by the DMCA
but intended to implicitly dilute section 301(c) nonetheless. Such
an interpretation is disfavored where, as here, the two sections can
reasonably co-exist, each in its own ﬁeld of operation. Congress explicitly, and very clearly, separated the universe of sound recordings
into two categories, one for works “ﬁxed” after February 15, 1972,
to which it granted federal copyright protection, and one for those
ﬁxed before that date, to which it did not. Defendant has pointed to
nothing in the Copyright Act or its legislative history which prevents
us from concluding that Congress meant to apply the DMCA to the
former category, but not the la er.
Finally, we reject defendant’s argument that the very purpose of
the DMCA will be thwarted if it is deemed not to apply to the pre–
1972 recordings. The statutory language at issue involves two equally
clear and compelling Congressional priorities: to promote the existence of intellectual property on the Internet, and to insulate pre–
1972 sound recordings from federal regulation. Defendant’s concerns
about interpreting the statutes in the manner advocated by UMG
are no more compelling than UMG’s concerns about interpreting the
statutes in the manner advanced by defendant. Under such circumstances, it would be far more appropriate for Congress, if necessary,
to amend the DMCA to clarify its intent, than for this Court to do so
by ﬁat.
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% 45"5&-"8 1305&$5*0/ '03 13& 406/% 3&$03%*/(4

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Defendant Vimeo, LLC1 is an Internet service provider, which operates a website on which members can post videos of their own creation, which are then accessible to the public at large. Plaintiﬀs are
record companies and music publishing companies, which own copyrights in sound recordings of musical performances. Their complaint
alleges that Vimeo is liable to Plaintiﬀs for copyright infringement by
reason of 199 videos posted on the Vimeo website, which contained
allegedly infringing musical recordings for which Plaintiﬀs owned
the rights.
The ﬁrst question we consider is whether the district court erred in
granting partial summary judgment to Plaintiﬀs, rejecting the availability of the DMCA’s safe harbor for infringement of sound recordings ﬁxed prior to February 15, 1972. On this question, the district
court accepted without discussion the position taken by the United
States Copyright Oﬃce in a report prepared in 2011 that the safe
harbor does not protect against liability for infringement of pre-1972
sound recordings.
The Pre-1972 Sound Recordings Report arrived at its conclusion
that § 512(c)’s safe harbor applies only to post-1972 sound recordings
by the following reasoning: The term “infringement of copyright,”
which is employed in § 512(c), “is deﬁned in section 501(a) as the violation of ‘any of the exclusive rights of the copyright owner as provided by sections 106 through 122.’” Therefore, that term, when used
in § 512(c), “only refers to infringement of rights protected under title 17, and does not include infringement of rights protected under
[state] law.”
While we unhesitatingly acknowledge the Copyright Oﬃce’s superior expertise on the Copyright Act, we cannot accept its reading
of § 512(c). It is based in major part on a misreading of the statute.
A literal and natural reading of the text of § 512(c) leads to the conclusion that its use of the phrase “infringement of copyright” does
include infringement of state laws of copyright. One who has been
found liable for infringement of copyright under state laws has indisputably been found “liable for infringement of copyright.” In this
instance, Congress did not qualify the phrase “infringement of copyright” by adding, as it did in other circumstances, the words, “under
this title.” See, e.g., § 106 (“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 ....); § 201(a) (“Copyright in a work
protected under this title vests initially in the author or authors of
the work.”). To interpret § 512(c)’s guarantee that service providers
“shall not be liable ... for infringement of copyright” to mean that they
may nonetheless be liable for infringement of copyright under state
laws would be, at the very least, a strained interpretation – one that

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could be justiﬁed only by concluding that Congress must have meant
something diﬀerent from what it said.
To construe § 512(c) as leaving service providers subject to liability under state copyright laws for postings by users of infringements
of which the service providers were unaware would defeat the very
purpose Congress sought to achieve in passing the statute. Service
providers would be compelled either to incur heavy costs of monitoring every posting to be sure it did not contain infringing pre-1972
recordings, or incurring potentially crushing liabilities under state
copyright laws. It is not as if pre-1972 sound recordings were sufﬁciently outdated as to render the potential liabilities insigniﬁcant.
Some of the most popular recorded music of all time was recorded
before 1972, including work of The Beatles, The Supremes, Elvis Presley, Aretha Franklin, Barbra Streisand, and Marvin Gaye.

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The Copyright Clause allows protection only for ”writings.” Under
the 1909 Copyright Act, a live performance was not subject to federal
copyright; there was nothing to publish with notice of copyright or
to register to secure protection. This left a substantial hole, one that
states sometimes ﬁlled.
The 1976 Copyright Act mostly carried forward the exclusion of
live performances, this time because they are not considered ”ﬁxed.”
There was one exception: a work is considered ”ﬁxed” if it is being simultaneously recorded and transmi ed, thus allowing copyright protection for live broadcasts of concerts, sporting events, etc.
Again, states partially ﬁlled the gap with so-called anti-bootlegging
statutes. Congress followed their example with the 1994 Uruguay
Round Agreements Act, which (among other things) added civil antibootlegging provisions to Title 17 and criminal anti-bootlegging provisions to Title 18.
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Metropolitan Opera is an educational membership corporation. Over
a period of sixty years it has, by care, skill and great expenditure,
maintained a position of pre-eminence in the ﬁeld of music and grand
opera. By reason of this skill and pre-eminence it has created a national and world-wide audience and thereby a large market for radio
broadcasts and phonograph recordings of its performances.
Metropolitan Opera has sold the exclusive right to broadcast its
opera performances during the 1949–50 season to American Broadcasting, for which Metropolitan Opera receives $100,000. Under

& #005-&((*/(

the contract for the 1949–50 season, American Broadcasting broadcast Metropolitan Opera performances of eighteen operas between
November 26, 1949, and March 25, 1950.
Since November 26, 1949, the defendants have recorded these
broadcast performances of Metropolitan Opera and have used their
master recordings to make phonograph records of Metropolitan
Opera performances. The defendants have advertised and sold these
records as records of broadcast Metropolitan Opera performances.
That defendants’ piratical conduct and practices constitute unfair
competition both with Metropolitan Opera and Columbia Records is
made abundantly clear by the record. Plaintiﬀ Metropolitan Opera
derives income from the performance of its operatic productions in
the presence of an audience, from the broadcasting of those productions over the radio, and from the licensing to Columbia Records
of the exclusive privilege of making and selling records of its own
performances. Without any payment to Metropolitan Opera for the
beneﬁt of its extremely expensive performances, and without any
cost comparable to that incurred by Columbia Records in making
its records, defendants oﬀer to the public recordings of Metropolitan Opera’s broadcast performances. This constitutes unfair competition.
The performance of the opera in the opera house and the broadcast of the opera performance over the network of American Broadcasting under an exclusive broadcasting contract with Metropolitan
Opera did not abandon the plaintiﬀs’ rights to this performance. At
common law the public performance of a play, exhibition of a picture
or sale of a copy of the ﬁlm for public presentation did not constitute
an abandonment of nor deprive the owner of his common-law rights.
The care with which the Metropolitan Opera made its limited grants,
granting exclusive right to a single network and restricting the la er’s
right to record and granting exclusive rights to record to Columbia
Records, again reserving the right to approve all records before their
release, shows clearly no intent to abandon but, on the contrary, an attempt to retain eﬀective control over the broadcasting and recording
of its performances. The fact that performances today can take place
over the radio as well as in the theatre and thereby reach a wider audience does not change the principle involved.

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Anyone who, without the consent of the performer or performers involved –
(1) ﬁxes the sounds or sounds and images of a live musical performance in a copy or phonorecord, or reproduces copies or

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phonorecords of such a performance from an unauthorized ﬁxation,
(2) transmits or otherwise communicates to the public the sounds
or sounds and images of a live musical performance, or
(3) distributes or oﬀers to distribute, sells or oﬀers to sell, rents or
oﬀers to rent, or traﬃcs in any copy or phonorecord ﬁxed as
described in paragraph (1), regardless of whether the ﬁxations
occurred in the United States,
shall be subject to the remedies provided in sections 502 through 505,
to the same extent as an infringer of copyright.
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This appeal presents a recurring issue in constitutional law: the extent to which Congress can use one of its powers to enact a statute
that it could not enact under another of its arguably relevant powers. Here the statute involved is Section 2319A of Title 18 which
prohibits the unauthorized recording of performances as well as the
copying, distribution, sale, rental, and traﬃcking of these bootlegged
phonorecords.1
On October 27, 2004, a grand jury charged Martignon, the proprietor of Midnight Records in Manha an, with one count of violating Section 2319A by reproducing an unauthorized phonorecord
and by distributing and selling and oﬀering to distribute and sell
phonorecords of performances which had been recorded or ﬁxed
without the consent of the performer or performers. Martignon
moved to dismiss the indictment, arguing that Section 2319A violated
the Copyright Clause because live performances are not ”Writings”
within the meaning of the clause and because live performances were
given protection for perpetuity rather than for a ”limited Time[]”.
Martignon also claimed that the statute violated the First Amendment.
Because the government concedes Congress could not have enacted Section 2319A pursuant to the Copyright Clause, we must
determine whether the Copyright Clause’s limitations also limit
Congress’s power to regulate creative works under the Commerce
Clause.
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 between the
1

17 U.S.C. § 1101(a) provides that copyright remedies shall be available against
persons who commit the same acts. Unlike Section 2319A, Section 1101 does not
require any particular mens rea or that the act be performed for commercial gain
or private ﬁnancial gain.

& #005-&((*/(

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 only prevents others from doing something
without the authorization of the protected person. It may therefore
protect the property interests an individual holds by virtue of other
laws, but it does not itself allocate those interests. Section 2319A is
not a law ”secur[ing] ... rights,” nor is it a copyright law. 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.
It is by now well established that legislative Acts adjusting the
burdens and beneﬁts of economic life come to the Court with a presumption of constitutionality. A court may invalidate legislation enacted under the Commerce Clause only if it is clear that there is no
rational basis for a congressional ﬁnding that the regulated activity
aﬀects interstate commerce, or that there is no reasonable connection between the regulatory means selected and the asserted ends.
Section 2319A has substantial commercial and economic aspects. Indeed, regulation of bootlegging is necessary at the federal level because of its interstate and international commercial aspects. Without
this scope, bootlegging could be adequately regulated, as it has been
in the past, by the states. Given the nexus between bootlegging and
commerce, it is clear that absent any limitations stemming from the
Copyright Clause, Congress would have had the power to enact Section 2319A(a)(1) & (3) under the Commerce Clause. Further, Section
2319A regulates only ﬁxing, selling, distributing, and copying with
a commercial motive, activities at the core of the Commerce Clause.8
It would have been eminently reasonable for Congress to conclude
that the sale and distribution of bootleg phonorecords will have a
substantial interstate eﬀect on the sale and distribution of legitimate
phonorecords. 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 consti8

This commercial purpose distinguishes Section 2319A from Section 1101. A
person who recorded a concert for her personal enjoyment would not violate Section 2319A. Further, because no commercial motive is required for a Section 1101
violation, we speciﬁcally limit today’s holding to Section 2319A and express no
opinion on Section 1101’s constitutionality.

$)"15&3  .64*$

tutional provision prevents its enforcement.
2VFTUJPOT
1. The folk singer-songwriter Richard Shindell released the song
”The Next Best Western” on his 1997 album Reunion Hill. The
musical work copyright (registration no. PA0000967996) is
owned by Amalgamated Balladry and is part of the ASCAP
repertory. The sound recording copyright (registration no.
SR0000297971) is owned by Shanachie Records. For each of the
following uses, what licenses (if any) would you need, from
whom, and how could you obtain them?
• Playing ”The Next Best Western” from a Reunion Hill CD
on WTWP, a broadcast radio station.
• Streaming ”The Next Best Western” live on the Internet as
it plays on WTWP.
• Turning on the radio to WTWP in your home as ”The Next
Best Western comes on.
• Turning on the radio to WTWP in the coﬀeeshop you run
as ”The Next Best Western comes on.
• Using the Reunion Hill version of ”The Next Best Western”
in a TV commercial.
• Recording a hard-rock cover of ”The Next Best Western”
which you sell on CDs.
• Selling your hard-rock cover as downloadable MP3s.
• Using your hard-rock cover in a commercial.
• Playing ”The Next Best Western” live on guitar at a soldout concert at Carnegie Hall.
• Recording your sold-out Carnegie Hall concert and selling
CDs.
• Playing the entirety of Reunion Hill live on guitar at a soldout concert at Carnegie Hall.
• Playing ”The Next Best Western” on guitar in Central Park
on a warm spring day.
• Playing ”The Next Best Western” from a Reunion Hill CD
on a boombox in Central Park on a warm spring day.
• Singing ”The Next Best Western” as you walk down the
street.
• Playing ”The Next Best Western” from a CD of Reunion Hill
• Se ing ”The Next Best Western” as your cellphone ringtone.
• Selling ringtones of ”The Next Best Western” to other peo-

& #005-&((*/(

ple.
• Sampling ”The Next Best Western” from a CD of Reunion
Hill and using the sample in a hip-hop track.
• Selling karaoke DVDs that include ”The Next Best Western” and its lyrics, set to pictures of trucks and highways.
• Pu ing a Reunion Hill CD in a folk-music-only coinoperated jukebox.
• Running a streaming-music service that includes the Reunion Hill version of ”The Next Best Western” as one of
the 3,000,000 tracks users can stream.
• Running a streaming-music service that includes a hardrock cover of ”The Next Best Western” as one of the
3,000,000 tracks users can stream.
• Running a streaming-video service that includes a movie
in which the Reunion Hill version of ”The Next Best Western” appears on the soundtrack.
2. Which of your answers to the previous question might change if
”The Next Best Western” had been released in 1967 rather than
1997?
3. How many distinct types of licenses have you encountered in
this chapter? Which of these license types would be necessary
features of any well-functioning copyright system, and which
of them are accidents of history?
4. Is there anything good that can be said aout how United States
copyright law deals with music? Or should we burn the whole
thing to the ground and start again?

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Trademarks are diﬀerent.
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Any a empt to identify the essential characteristics of a trademark
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 trademark has no necessary relation to invention or
discovery. The trademark 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 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.
The trademark 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
a aches 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 well known, has been ﬁrst appropriated
by the claimant as his distinctive trademark, he may by registration
secure the right to its exclusive use.

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Suppose that the Knockoﬀ Soda Corporation starts selling a cola in
red cans bearing the familiar COCA-COLA name and logo. There are
various reasons we might describe this as wrongful:
• Most obviously, there is a consumer protection rationale: some
consumers will be deceived into buying a can of soda made by
Knockoﬀ rather than by the Coca-Cola Company.
• There is an unfair competition angle: Knockoﬀ unjustiﬁably free
rides on the Coca-Cola Company’s reputation for quality.
• More subtly, there is a search costs rationale. If consumers cannot quickly tell the diﬀerence between a can of COCA-COLA
made by Knockoﬀ and one made by Coca-Cola, they will spend
more time inspecting cans in minute detail, or give up entirely.
• And perhaps there is a cultural angle, given the importance of
brands like COCA-COLA in modern society.
Trademark law is a large and sprawling thing. It is a hybrid of state
and federal protection; the two regimes interrelate so thoroughly that
they must be studied together. It has a clear core of liability, surrounded by a messy penumbra of related causes of action. (The
boundary between this chapter and the chapter on false advertising,
for example, is entirely nebulous.) And its subject ma er has expanded so greatly over time that it too, spans multiple chapters.

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The basis of trademark protection is distinctiveness: the capacity of
a word, phrase, logo, or other symbol to identify to consumers the
source of goods or services. We begin with words and phrases and
then consider what graphic design elements add. (”Exotic” trademarks, such as scents and product designs, will be considered in the
Design chapter.)
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The term “trademark” includes any word, name, symbol, or device,
or any combination thereof used by a person … 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.
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Drug dealers in many cities sell heroin in single-dose bags for about
$10. Frequently, the bags are labeled with a “stamp”: a phrase, image,
or both. Stamps include EXORCIST, FLATLINE, and GET HIGH OR
DIE TRYING (this last one is laced with fentanyl). Fans of The Wire

" 46#+&$5 ."55&3

may remember PANDEMIC, WMD, and RED TOPS, among others.
Why would drug dealers mark their bags in this way? What functions do the stamps serve? Does it ma er whether these are legally
enforceable trademarks?

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Zatarain’s is the manufacturer and distributor of a line of over one
hundred food products. Two of these products, “Fish-Fri” and
“Chick-Fri,” are coatings or ba er mixes used to fry foods.
Zatarain’s “Fish-Fri” consists of 100% corn ﬂour and is used to fry
ﬁsh and other seafood. “Fish-Fri” is packaged in rectangular cardboard boxes containing twelve or twenty-four ounces of coating mix.
The legend “Wonderful FISH-FRI® .” is displayed prominently on
the front panel, along with the block Z used to identify all Zatarain’s
products. The term “Fish-Fri” has been used by Zatarain’s or its predecessor since 1950 and has been registered as a trademark since 1962.
Zatarain’s “Chick-Fri” is a seasoned corn ﬂour ba er mix used
for frying chicken and other foods. The “Chick-Fri” package, which
is very similar to that used for “Fish-Fri,” is a rectangular cardboard
container labelled “Wonderful CHICK-FRI.” Zatarain’s began to use
the term “Chick-Fri” in 1968 and registered the term as a trademark
in 1976.
Zatarain’s products are not alone in the marketplace. At least
four other companies market coatings for fried foods that are denominated “ﬁsh fry” or “chicken fry.” Appellee Oak Grove Smokehouse,
Inc. (“Oak Grove”) began marketing a “ﬁsh fry” and a “chicken fry”
in March 1979. Both products are packaged in clear glassine packets
that contain a quantity of coating mix suﬃcient to fry enough food for
one meal. The packets are labelled with Oak Grove’s name and emblem, along with the words “FISH FRY” OR “CHICKEN FRY.”spices.
Oak Grove’s “FISH FRY” has a corn ﬂour base seasoned with various
spices; Oak Grove’s “CHICKEN FRY” is a seasoned coating with a
wheat ﬂour base.
Appellee Visko’s Fish Fry, Inc. (“Visko’s”) entered the ba er mix
market in March 1980 with its “ﬁsh fry.” Visko’s product is packed
in a cylindrical eighteen-ounce container with a resealable plastic lid.
The words “Visko’s FISH FRY” appear on the label along with a photograph of a pla er of fried ﬁsh. Visko’s coating mix contains corn
ﬂour and added
Other food manufacturing concerns also market coating mixes.
Boochelle’s Spice Co. (“Boochelle’s”), originally a defendant in this

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lawsuit, at one time manufactured a seasoned “FISH FRY” packaged
in twelve-ounce vinyl plastic packets. Pursuant to a se lement between Boochelle’s and Zatarain’s, Boochelle’s product is now labelled
“FISH AND VEGETABLE FRY.” Another ba er mix, “YOGI Brand ®
OYSTER SHRIMP and FISH FRY,” is also available. A product called
“Golden Dipt Old South Fish Fry” has recently entered the market as
well.
The district court found that Zatarain’s trademark “Fish-Fri” was
a descriptive term with an established secondary meaning, but held
that Oak Grove and Visko’s had a “fair use” defense to their asserted
infringement of the mark. The court further found that Zatarain’s
trademark “Chick-Fri” was a descriptive term that lacked secondary
meaning, and accordingly ordered the trademark registration cancelled. Additionally, the court concluded that Zatarain’s had produced no evidence in support of its claims of unfair competition on
the part of Oak Grove and Visko’s. [Descriptiveness and secondary
meaning are addressed here; the fair use portion of the case is excerpted in the Defenses section.] …
A. Basic Principles
The threshold issue in any action for trademark infringement is
whether the word or phrase is initially registerable or protectable.
Courts and commentators have traditionally divided potential trademarks into four categories. A potential trademark may be classiﬁed
as (1) generic, (2) descriptive, (3) suggestive, or (4) arbitrary or fanciful. These categories, like the tones in a spectrum, tend to blur at the
edges and merge together. The labels are more advisory than deﬁnitional, more like guidelines than pigeonholes. Not surprisingly, they
are somewhat diﬃcult to articulate and to apply.
A generic term is the name of a particular genus or class of which
an individual article or service is but a member. A generic term connotes the “basic nature of articles or services” rather than the more
individualized characteristics of a particular product. Generic terms
can never a ain trademark protection. Furthermore, if at any time a
registered trademark becomes generic as to a particular product or
service, the mark’s registration is subject to cancellation. Such terms
as aspirin and cellophane have been held generic and therefore unprotectable as trademarks.
A descriptive term identiﬁes a characteristic or quality of an article or service, such as its color, odor, function, dimensions, or ingredients. Descriptive terms ordinarily are not protectable as trademarks;
they may become valid marks, however, by acquiring a secondary
meaning in the minds of the consuming public. Examples of descriptive marks would include “Alo” with reference to products containing gel of the aloe vera plant and “Vision Center” in reference to a

" 46#+&$5 ."55&3

business oﬀering optical goods and services. As this court has often
noted, the distinction between descriptive and generic terms is one of
degree. The distinction has important practical consequences, however; while a descriptive term may be elevated to trademark status
with proof of secondary meaning, a generic term may never achieve
trademark protection.
A suggestive term suggests, rather than describes, some particular
characteristic of the goods or services to which it applies and requires
the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services. A suggestive mark is
protected without the necessity for proof of secondary meaning. The
term “Coppertone” has been held suggestive in regard to sun tanning
products.
Arbitrary or fanciful terms bear no relationship to the products
or services to which they are applied. Like suggestive terms, arbitrary and fanciful marks are protectable without proof of secondary
meaning. The term “Kodak” is properly classiﬁed as a fanciful term
for photographic supplies; “Ivory” is an arbitrary term as applied to
soap.
As noted earlier, descriptive terms are ordinarily not protectable
as trademarks. They may be protected, however, if they have acquired a secondary meaning for the consuming public. The concept
of secondary meaning recognizes that words with an ordinary and
primary meaning of their own may by long use with a particular
product, come to be known by the public as speciﬁcally designating
that product. In order to establish a secondary meaning for a term, a
plaintiﬀ must show that the primary signiﬁcance of the term in the
minds of the consuming public is not the product but the producer.
The burden of proof to establish secondary meaning rests at all times
with the plaintiﬀ; this burden is not an easy one to satisfy, for a high
degree of proof is necessary to establish secondary meaning for a descriptive term. Proof of secondary meaning is an issue only with respect to descriptive marks; suggestive and arbitrary or fanciful marks
are automatically protected upon registration, and generic terms are
unprotectible even if they have acquired secondary meaning.
B. “FISH-FRI”3
1. Classiﬁcation
Throughout this litigation, Zatarain’s has maintained that the term
“Fish-Fri” is a suggestive mark. 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
3

We note at the outset that Zatarain’s use of the phonetic equivalent of the words
“ﬁsh fry” — that is, misspelling it — does not render the mark protectable.

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merely descriptive of the characteristics of the product.
We are mindful that the 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 the 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 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 a ention 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 ba er 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 ba er 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. The fact that a term

" 46#+&$5 ."55&3

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 ba er 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 ba er 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 Arnaud to
Zatarain’s, select the same term to describe their similar products, the
term in question is most likely a descriptive one.
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.
In assessing a claim of secondary meaning, the major inquiry is
the consumer’s a itude 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

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the term “Fish-Fri” to identify this particular ba er 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 “FishFri” 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 “FishFri.”
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.8
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 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. …
C. “CHICK-FRI”
1. Classiﬁcation
Most of what has been said about “Fish-Fri” applies with equal force
to Zatarain’s other culinary concoction, “Chick-Fri.” “Chick-Fri” is at
least as descriptive of the act of frying chicken as “Fish-Fri” is descriptive of frying ﬁsh. It takes no eﬀort of the imagination to associate
the term “Chick-Fri” with Southern fried chicken. Other merchants
8
The telephone survey also included this question: “When you mentioned ‘ﬁsh
fry,’ did you have a speciﬁc product in mind or did you use that term to mean
any kind of coating used to fry ﬁsh?” To this inartfully worded question, 77%
of the New Orleans respondents answered “speciﬁc product” and 23% answered
“any kind of coating.” Unfortunately, Rosenzweig did not ask the logical follow-up
question that seemingly would have ended the inquiry conclusively: “Who makes
the speciﬁc product you have in mind?” Had he but done so, our task would have
been much simpler.

" 46#+&$5 ."55&3

are likely to want to use the words “chicken fry” to describe similar
products, and others have in fact done so. Suﬃcient evidence exists
to support the district court’s ﬁnding that “Chick-Fri” is a descriptive
term; accordingly, we aﬃrm.
2. Secondary Meaning
The district court concluded that Zatarain’s had failed to establish
a secondary meaning for the term “Chick-Fri.” We aﬃrm this ﬁnding. The mark “Chick-Fri” has been in use only since 1968; it was
registered even more recently, in 1976. In sharp contrast to its promotions with regard to “Fish-Fri,” Zatarain’s advertising expenditures
for “Chick-Fri” were mere chickenfeed; in fact, Zatarain’s conducted
no direct advertising campaign to publicize the product. Thus the
circumstantial evidence presented in support of a secondary meaning for the term “Chick-Fri” was paltry.
Allen Rosenzweig’s survey evidence regarding a secondary meaning for “Chick-Fri” also “lays an egg.” The initial survey question was
a “qualiﬁer:” “Approximately how many times in an average month
do you, yourself, fry ﬁsh or other seafood?” Only if respondents
replied “three or more times a month” were they asked to continue
the survey. This qualiﬁer, which may have been perfectly adequate
for purposes of the “Fish-Fri” questions, seems highly unlikely to provide an adequate sample of potential consumers of “Chick-Fri.” This
survey provides us with nothing more than some data regarding ﬁsh
friers’ perceptions about products used for frying chicken. As such,
it is entitled to li le evidentiary weight.
It is well se led that Zatarain’s, the original plaintiﬀ in this trademark infringement action, has the burden of proof to establish secondary meaning for its term. This it has failed to do.
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[The plaintiﬀ sold a beverage using the mark 5-HOUR ENERGY. It
sued the makers of 6 HOUR POWER.] The 5-HOUR ENERGY mark
could be characterized as merely descriptive, in the sense that it simply describes a product that will give someone ﬁve hours of energy.
But that is not the end of such an inquiry. The ﬁrst question one
would ask is how would the energy be transferred? Through food?
Through drink? Through injections? Through pills? Through exercise? Also, one would ask what kind of energy is the mark referring
to? Food energy (measured in Calories)? Electrical energy? Nuclear
energy? With some thought, one could arrive at the conclusion that
the mark refers to an energy shot. But it is not as straightforward as
NVE suggests. Such cognitive inferences are indicative of “suggestive” rather than descriptive marks.

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The nature of the 5-HOUR ENERGY mark “shares a closer kinship
with those marks previously designated as suggestive than those labeled merely descriptive because of the degree of inferential reasoning necessary for a consumer to discern” that the 5-HOUR ENERGY
mark relates to an energy shot. The connection between “5-hour” and
“ENERGY” is “not so obvious that a consumer seeing 5-HOUR ENERGY in isolation would know that the term refers to” an energy
shot rather than, for example, a ba ery for electronics, an exercise
program, a backup generator, or a snack for endurance sports. Connecting the mark 5-HOUR ENERGY with the energy-shot product
requires imagination and perception to determine the nature of the
goods.
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The title, or a portion of a title, of a single creative work must be refused registration unless the title has been used on a series of creative works. The title of a single creative work is not registrable. In re
Cooper (“A book title identiﬁes a speciﬁc literary work and is not associated in the public mind with the publisher, printer or bookseller.”).
The addition of the term HASHTAG or the hash symbol (#) to an otherwise unregistrable mark typically cannot render it registrable. Cf.
TMEP § 1209.03(m) and §§ 1215-1215.10 regarding generic top-level
domain names.
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This case concerns two United States registrations of the GOOGLE
mark: Number 2884502 (the “‘502 Mark”) and Number 2806075 (the
“‘075 Mark”). The ‘502 Mark covers “computer hardware; computer
software for creating indexes of information, indexes of web sites and
indexes of other information resources.” The ‘075 Mark covers, inter
alia:
Computer services, namely, providing software interfaces
available over a network in order to create a personalized on-line information service; extraction and retrieval
of information and data mining by means of global computer networks; creating indexes of information, indexes
of web sites and indexes of other information sources in
connection with global computer networks; providing information from searchable indexes and databases of information, including text, electronic documents, databases,
graphics and audio visual information, by means of global

" 46#+&$5 ."55&3

computer information networks.
Plaintiﬀs contend the GOOGLE mark has become generic because a
majority of the public understands the word google, when used as a
verb, to mean the indiscriminate act of searching on the internet without regard to the search engine used. Underlying Plaintiﬀs’ argument
is the proposition that verbs, as a ma er of law, are incapable of distinguishing one service from another, and can only refer to a category
of services.
I. G
F
G
A mark is subject to cancellation if it “becomes the generic name for
the goods or services, or a portion thereof, for which it is registered.”.
“The primary signiﬁcance of the registered mark to the relevant public . . . shall be the test for determining whether the registered mark
has become the generic name of goods or services on or in connection
with which it has been used.” . Under the primary-signiﬁcance test, a
mark is not generic when “he primary signiﬁcance of the term in the
minds of the consuming public is not the product but the producer.
See Bayer Co. v. United Drug Co. (“What do the buyers understand by
the word for whose use the parties are contending?”) If the primary
signiﬁcance of the trademark is to describe the type of product rather
than the producer, the trademark is a generic term and cannot be a
valid trademark.
The crux of Plaintiﬀs’ argument is the premise “a trademark
ceases to function as such when it is used primarily as a verb.” This
premise is ﬂawed: a trademark performs its statutory function so
long as it distinguishes a product or service from those of others and
indicates the product’s or service’s source. Verb use of a trademark
is not fundamentally incapable of identifying a producer or denoting
source. A mark can be used as a verb in a discriminate sense so as to
refer to an activity with a particular product or service, e.g., “I will
PHOTOSHOP the image” could mean the act of manipulating an image by using the trademarked Photoshop graphics editing software
developed and sold by Adobe Systems. This discriminate mark-asverb usage clearly performs the statutory source-denoting function
of a trademark.
However, a mark can also be used as a verb in an indiscriminate sense so as to refer to a category of activity in general, e.g., “I
will PHOTOSHOP the image” could be understood to mean image
manipulation by using graphics editing software other than Adobe
Photoshop. This use commandeers PHOTOSHOP to refer to something besides Adobe’s trademarked product. Such indiscriminate
mark-as-verb usage does not perform the statutory trademark function; instead, it functions as a synecdoche describing both a particular
species of activity (e.g. using Adobe’s PHOTOSHOP brand software)

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and the genus of services to which the species belongs (e.g. using image manipulation software in general).
It cannot be understated that a mark is not rendered generic
merely because the mark serves a synecdochian “dual function” of
identifying a particular species of service while at the same time indicating the genus of services to which the species belongs. Nor is
a mark generic merely because it has some signiﬁcance to the public
as an indication of the nature or class of an article. Moreover, casual, non-purchasing uses of marks are not evidence of generic usage”because primary signiﬁcance is determined by the use and understanding of the mark in the context of purchasing decisions.
The salient question is the primary signiﬁcance of the term to the
consumer. If the term indicates a product of a single producer to the
consumer, it is a valid trademark. Thus, even if a mark qua verb is
used exclusively in the indiscriminate sense, the mark is not generic
if a majority of the consuming public nevertheless uses the mark qua
mark to diﬀerentiate one particular product or service from those offered by competitors.
It is thus contrary to both the le er and spirit of trademark law to
strip a mark of legal protection solely because the mark – cultivated
by diligent marketing, enforcement, and quality control – has become
so strong and widespread that the public adopts the mark to describe
that act of using the class of products or services to which the mark
belongs. As one scholar has stated, “top-of-mind use of a trademark
in its verb form, far from indicating the mark’s generic status, may
well indicate the enduring fame of the brand.” . This is especially
true where the mark in question is arbitrary or fanciful because such
terms had a diﬀerent or no independent meaning before they were
adopted as marks.
II. E
O
E
Defendant’s expert linguist, Dr. Geoﬀrey Nunberg, opined about a
linguistic phenomenon observed in some “highly distinctive and famous marks” where “the name of a particular product is used to convey the genus without actually denoting it.” Dr. Nunberg’s expert
report explains:
Trademarks are sometimes used in extended or ﬁgurative ways to denote something independent of their proprietary meaning (cf Astroturf for political movements,
Band-Aid for social remedies). In a special case of this
process, trademarks may be used as verbs to denote the
characteristic action associated with the product or service
they represent. Examples include TiVo, Fed-Ex, Skype,
and Google. Such verbs may be speciﬁc in their application but such verbs may also be used in a representative

" 46#+&$5 ."55&3

way to connote a more general action. Thus when somebody says, “I need the book tomorrow – can you Fed Ex
it to me?” we ordinarily assume that a shipment by UPS
will be acceptable as well, without assuming that the verb
to Fed-Ex simply means to ship by priority courier.
Accordingly, Dr. Nunberg asserts that the use of the word google as
a nonspeciﬁc verb does not compromise the status of the GOOGLE
mark because it literally denotes the use of Google’s search engine.
Consistent with his report, Dr. Nunberg opined that the GOOGLE
mark has not become generic and that the phrase “go google it” is
not necessarily shorthand for “look it up on the internet.”
Defendant’s survey expert, Dr. Gerald Ford, conducted a consumer survey modeled after the one used in E. I. DuPont de Nemours
& Co. v. Yoshida Int’l, Inc., to prove that the primary signiﬁcance
of the TEFLON mark in the minds of consumers was DuPont’s nonstick coating, rather than non-stick coatings in general. In Dr. Ford’s
“Teﬂon” survey, 420 randomly selected participants were contacted
via telephone and were asked whether “Hewle Packard” and “computer” were brands names or common names. All 420 respondents
successfully identiﬁed “Hewle Packard” as a brand name and “computer” as a common name.
The respondents were then asked to identify six names (STP;
Coke; Jello; refrigerator; margarine; aspirin) as either brand names
or common names and were told that “don’t know” or “no opinion” was an acceptable answer. They were not told that “both”
was an acceptable answer, but answers of “both” were nevertheless recorded. The respondents were subsequently asked to apply
the brand name/common name distinction to another ﬁve names
(browser; website; Amazon; Yahoo; Google) speciﬁcally with respect to searching on the internet. Last, the respondents were asked
whether they conducted searches on the internet – respondents who
did not were excluded from the results.
Excluding 19 respondents who answered they do not perform
searches on the internet, 93.77% identiﬁed GOOGLE as a brand name
and 5.25% identiﬁed GOOGLE as a common name. For purposes of
comparison, 93.52% of consumers identiﬁed the YAHOO! mark as
a brand name while 5.99% identiﬁed YAHOO! as a common name.
Both GOOGLE and YAHOO! beat out COKE: 89.53% of consumers
identiﬁed the COKE mark as a brand name while 6.73% identiﬁed
COKE as a common name. The only mark with higher brand name
recognition or lower common name misrecognition than GOOGLE
was the AMAZON mark at 96.51% and 2.99%, respectively.
III. P

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As to dictionary usage, Plaintiﬀs are unable to cite to a single dictionary whose deﬁnition of the word “google” neglects to mention
the trademark signiﬁcance of the term. Plaintiﬀs accuse Defendant
of “intimidat[ing] [dictionaries] into submission” because Defendant
enforces its mark. For example, Defendant asked the website wordspy.com to modify its deﬁnition of google as a discriminate verb
(“To search for information on the Web, particularly by using the
Google search engine”) to “take into account the trademark status
of Google.” Likewise, Plaintiﬀs contend that the Merriam-Webster
dictionary “tempered its deﬁnition of google as a result of its fear
of Defendant” because the publisher stated “we were trying to be as
respectful as we possibly could be about Google’s trademark.” Plaintiﬀs also cite the opinions of both of their expert linguists in support of
the proposition that the inclusion of a word in dictionaries means that
the word carries generic usage. It is undisputed that both of Plaintiﬀs’ linguistic experts testiﬁed the GOOGLE mark serves to identify
Google as the provider of its search engine services. Viewing the evidence in the light most favorable to Plaintiﬀs, it establishes the word
google carries meaning as an indiscriminate verb.
Shifting to mark-holder usage, Plaintiﬀs emphasize that Google
co-founder Larry Page stated on July 8, 1998, “Have fun and keep
googling.” Plaintiﬀs also cite to the fact that entering the search query
“deﬁne: google” into the Google search engine resulted in a verb definition of: “Use an internet search engine, particularly google.com.”
Plaintiﬀs argue that non-enforcement of a mark suggests it is generic
and point to the fact that the GOOGLE mark is used in other domain names that Plaintiﬀs did not purchase. However, it is undisputed that: Defendant uses the GOOGLE mark to identify the Google
search engine in national advertising campaigns; has policies in place
that set strict standards for third party use of the mark; publishes
rules and guidelines for use of the mark; and spends sizeable sums
policing and enforcing its rights in the mark. While it is true that
non-enforcement of a mark may be evidence the mark is generic, the
undisputed facts make it unreasonable to infer that Defendant does
not enforce its rights in the mark.
If competitors can accurately describe their products or services
without using the mark in question, it suggests the mark is not
generic. A corollary of this point is that the existence of a short
and simple descriptive term for the genus to which the trademarked
species belongs also evidences the mark in question as not generic.
E.g., Q-Tips, Inc. v. Johnson & Johnson (distinguishing the trademarked product “Q-Tips” from the descriptive term for the type of
goods “double tipped applicator”). In this case, “internet search engines” is the short and simple descriptive term for the genus to which
the Google search engine belongs. It is undisputed that competing

" 46#+&$5 ."55&3

search engine providers Yahoo! and Microsoft Bing routinely distinguish their search engine services from Google’s search engine service in press releases and advertising campaigns. Thus, there is no
evidence of competitors’ usage capable of supporting the inference
that the word google has become the common descriptive term for
the category of services to which the Google search engine belongs:
internet search engines.
As to media use, Plaintiﬀs contend that the media often uses the
word google as an indiscriminate verb. Some of Plaintiﬀs’ purported
evidence of indiscriminate verb use is inadmissible because it was not
timely disclosed. As Defendant points out, some of Plaintiﬀs’ media
evidence recognizes the trademark signiﬁcance of the GOOGLE mark
and that Plaintiﬀs have not designated a single instance in which a
major media outlet has referred to a competing search engine as a
“google.” Plaintiﬀs’ media evidence consists mostly of verb usage,
some of which is followed by recognition of trademark signiﬁcance.
Like Plaintiﬀs’ other evidence, the media’s use of the word google
establishes that it is sometimes used as verb to mean search on the
internet.
S
The word google has four possible meanings in this case: (1) a trademark designating the Google search engine; (2) a verb referring to
the act of searching on the internet using the Google search engine;
(3) a verb referring to the act of searching on the internet using any
search engine; and (4) a common descriptive term for search engines
in general. The ‘502 and ‘075 marks are subject to cancellation only if
the fourth meaning is the primary signiﬁcance of the word google to
a majority of the consuming public.
Accepting Plaintiﬀs’ evidence as true, 51% of those who utilize internet search engines use the word google as a verb to mean search
on the internet. This establishes that the second and third meanings
exist. Drawing all reasonable inferences in Plaintiﬀs’ favor, a majority of the consuming public uses google-as-verb in its indiscriminate
sense to mean search on the internet without regard to the search engine used. This means that the third meaning is more signiﬁcant than
the second meaning. Plaintiﬀs then make the leap, without any competent evidence, that the third meaning is the is the most frequently
used meaning and seek cancellation of the ‘502 and ‘075 Marks because of the frequency with which the word google is used as a verb.
This argument is factually and legally ﬂawed. Factually, Plaintiﬀs
oﬀer no competent evidence in support of their assertion that verb
use is more frequent than non-verb use. Legally, the test for whether
a mark has become generic is not whether its most frequent use is
as an indiscriminate verb, but whether its primary signiﬁcance to a

$)"15&3  53"%&."3,

majority of the consuming public is as a common descriptive term.
Even if the most frequent use of the word google is its third meaning,
Plaintiﬀs’ argument nevertheless fails because there is no evidence to
suggest that the primary signiﬁcance of the word google is the fourth
meaning because the third meaning is most frequently used.
Plaintiﬀs’ claim for trademark cancellation disappears when the
admissible evidence in the record is examined according to the laws
enacted by Congress. It is undisputed that well over 90% of the consuming public understands the word google with respect to searching on the internet as designating not a common name, but a particular brand. This fact establishes that the ﬁrst meaning (a trademark
designating the Google search engine) is more signiﬁcant than is the
fourth meaning (a common descriptive term for search engines in
general) to a vast majority of the consuming public. Therefore, the
‘502 and ‘075 marks are not subject to cancellation. This is true even
though the Court accepts as true that the 51% of the public also understands the third meaning (a verb referring to the act of searching on
the internet using any search engine) – it is undisputed that the ﬁrst
and third meanings are not mutually exclusive and, in fact, coexist.
CONCLUSION
Accepting Plaintiﬀs’ evidence as true and drawing all justiﬁable inferences therefrom in Plaintiﬀs’ favor, a majority of the public uses
the word google as a verb to refer to searching on the internet without regard to search engine used. Giving Plaintiﬀs every reasonable
beneﬁt, a majority of the public uses google-as-verb to refer to the
act of searching on the internet and uses GOOGLE-as-mark to refer
to Defendant’s search engine. However, there is no genuine dispute
about whether, with respect to searching on the internet, the primary
signiﬁcance of the word google to a majority of the public who utilize
internet search engines is a designation of the Google search engine.
Therefore, Defendant is entitled to judgment as a ma er of law that
the ‘075 and ‘502 Marks are not generic.
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When two descriptive terms are combined, the determination of
whether the composite mark also has a descriptive signiﬁcance turns
upon the question of whether the combination of terms evokes a
new and unique commercial impression. If each component retains
its descriptive signiﬁcance in relation to the goods or services, the
combination results in a composite that is itself descriptive. [Cases
cited found SNAP SIMPLY SAFER merely descriptive for “medical
devices, namely, cannulae; medical, hypodermic, aspiration and injection needles; medical, hypodermic, aspiration and injection sy-

" 46#+&$5 ."55&3

ringes”), PATENTS.COM merely descriptive of computer software
for managing a database of records that could include patents and for
tracking the status of the records by means of the Internet), SCREENWIPE generic as applied to premoistened antistatic cloths for cleaning
computer and television screens), and SUPERJAWS merely descriptive for a variety of machine and hand tools including jaws).]
However, a mark comprising a combination of merely descriptive components is registrable if the combination of terms creates a
unitary mark with a unique, nondescriptive meaning, or if the composite has a bizarre or incongruous meaning as applied to the goods.
[Cases cited found SUGAR & SPICE not merely descriptive of bakery
products and SNO-RAKE not merely descriptive of a snow removal
hand tool.]
The Trademark Trial and Appeal Board has held that the addition of the preﬁx “e” does not change the merely descriptive signiﬁcance of a term in relation to goods or services sold or rendered electronically, where the record showed that the “e” preﬁx has become
commonly recognized as a designation for goods or services sold or
delivered electronically. In re Int’l Bus. Machs. Corp. (“We see no difference in the meaning or connotation of ‘e-server’ and ‘eserver,’ and
consider them both to be an abbreviated form of ‘electronic server.’”).
Similarly, with appropriate evidence, the preﬁx “i” or “I” was held
to be understood by purchasers to signify Internet, when used in
relation to Internet-related products or services. In re Zanova, Inc.
(ITOOL merely descriptive of computer software for use in creating
web pages, and custom design of websites for others). In these situations, the examining a orney should provide evidence of use of the
preﬁx “e” or “i” in relation to the goods or services.
The foreign equivalent of a merely descriptive English word is no
more registrable than the English word itself. A word taken from a
well-known foreign modern language, which is, itself, descriptive of
a product, will be so considered when it is a empted to be registered
as a trade-mark in the United States for the same product. [Cases
cited held AYUMI and its Japanese-character equivalent held merely
descriptive for footwear where the evidence, including applicant’s
own admissions, indicated that the primary meaning of applicant’s
mark is “walking,” Chinese characters that mean ORIENTAL DAILY
NEWS merely descriptive of newspapers), and SAPORITO, an Italian word meaning “tasty,” merely descriptive because it describes a
desirable characteristic of applicant’s dry sausage.]
Although words from modern languages are generally translated
into English, the doctrine of foreign equivalents is not an absolute
rule, but merely a guideline. The doctrine should be applied only
when it is likely that the ordinary American purchaser would stop

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and translate the foreign word into its English equivalent. The ”ordinary American purchaser” in this context refers to the ordinary American purchaser who is knowledgeable in the foreign language. Deﬁning “ordinary American purchaser” as the “average American buyer”
would write the doctrine out of existence.” The “ordinary American
purchaser” includes all American purchasers, including those proﬁcient in a non-English language who would ordinarily be expected to
translate words into English.
As a general rule, an acronym or initialism cannot be considered descriptive unless the wording it stands for is merely descriptive of the
goods or services, and the acronym or initialism is readily understood
by relevant purchasers to be ”substantially synonymous” with the
merely descriptive wording it represents. [Cases cited held CMS not
substantially synonymous with the grape varietals cabernet, merlot,
and syrah and therefore not merely descriptive for wine, and NKJV
substantially synonymous with merely descriptive term “New King
James Version” and thus merely descriptive of bibles.]

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In June 1996, inspired by the success of ﬂavored vodkas introduced
by leading international companies such as Stolichnaya, Star’s president decided to develop an orange-ﬂavored Georgi vodka. A new
label was designed, consisting of the traditional Georgi label, which
contains a coat of arms and a logo consisting of stylized capital le ers
spelling ‘Georgi’ on a white background, together with three new elements: an orange slice, the words “orange ﬂavored,” and a large
elliptical le er “O” appearing below the “Georgi” logo and surrounding all of the other elements. The “O” was rendered as a vertical oval,
with the outline of the “O” slightly wider along the sides (about one
quarter inch thick) and narrowing at the top and bo om (about one
eighth inch thick); the outline of the “O” is colored orange and decorated with two thin gold lines, one bordering the inside and one
bordering the outside of the outline. Star was apparently the ﬁrst
company to distribute an orange-ﬂavored alcoholic beverage packaged in a bo le bearing a large elliptical orange le er “O.”
In 2000 Bacardi began to develop an orange-ﬂavored rum, which
it ultimately introduced nationally in 2001 under the name ”Bacardi
O.” Bacardi’s line of ﬂavored rums originated in 1995 with ”Bacardi
Limon.” Unlike Bacardi’s other ﬂavored rums, however, Bacardi O
was produced and marketed bearing a distinct label consisting of the

" 46#+&$5 ."55&3

Bacardi logo and bat symbol above a large elliptical le er ”O” against
a clear background.
After sending a cease and desist le er to Bacardi in September
2001, Star ﬁled the instant lawsuit in May 2002.
The district court erred when it described the Star “O” as a basic geometric shape or le er, and therefore rejected inherent distinctiveness and required a showing of secondary meaning. The Star
“O” is not a “common basic shape” or le er, and the district court’s
holding to the contrary was premised on a misunderstanding of this
trademark law concept. Unshaded linear representations of common
shapes or le ers are referred to as “basic.” They are not protectable as
inherently distinctive, because to protect them as trademarks would
be to deprive competitors of fundamental communicative devices essential to the dissemination of information to consumers. However,
stylized le ers or shapes are not “basic,” and are protectable when
original within the relevant market. See Courtenay Communications
Corp. v. Hall (distinguishing case of mark consisting of word displayed with distinctive “typeface, color, and other design elements,”
which was protectable, from cases holding generic words not protectable); compareIn re W.B. Roddenbery Co. (holding design consisting
of colored circle a ached to diﬀerently colored rectangle protectable
as inherently distinctive) withIn re Hillerich & Bradsby Co. (noting that
applicant conceded that unshaded line oval was not inherently distinctive). Star’s “O” is suﬃciently stylized to be inherently distinctive
and therefore protectable as a trademark. It is stylized with respect
to shading, border, and thickness, and each of these design elements
distinguishes it from the simple or basic shapes and le ers that have
been held unprotectable.
The Star “O” design had suﬃcient shape and color stylization to
render it slightly more than a simply linear representation of an ellipse or the le er “O.” It was, furthermore, a unique design in the
alcoholic beverage industry at the time it was introduced. This sufﬁces to establish its inherent distinctiveness and thus its protectability. Furthermore, the Star “O” design is protectable separately from
the other design elements on the Georgi orange-ﬂavored vodka label precisely because the “O” design is itself inherently distinctive.
However, the extent of stylization was marginal at best. The outline
of the “O,” though not uniform, is ordinary in its slightly varying
width, and the interior and exterior borders are also ordinary. The
result is a “thin” or weak mark, which will be entitled to only limited
protection.
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You are the general counsel of Blancorp, a medium-sized scientiﬁc
and industrial chemical supply ﬁrm named for its founder and CEO,

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Walter Blanco. He has been hoping for years to break in to the snowand-ice melter market with his own line of salts for homeowners,
businesses, and cities to spread on streets and sidewalks after snowstorms. Blancorp’s research chemists have been studying a type of
naturally occurring rock salt from Quebec, Canada. Known locally as
le loup bleu (French for “the blue wolf”), this particular variety is notable for its cobalt blue color and its remarkable resistance to clumping. (Some other melters are either naturally or dyed blue, but they
all have lighter shades, Blanco assures you.)
Blanco has informed you that his chemists have succeeded in replicating le loup bleu in the lab, with high purity, the same blue color,
and the same resistance to clumping. He has asked them to start fullscale production immediately, and has come to you to discuss potential trademarks. Give Blanco your advice on which of the following
would be good choices from a legal and business perspectives:
• ALL-NATURAL BLUE
• ICE MELT
• LOUP BLEU
• CLUMPLESS
• COBALT WOLF
• QUIZMARUNK
• Sell the salt in a bag with a line drawing of a wolf
Do you have any other ideas or advice?

#

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Ownership of trademarks is determined, in the ﬁrst instance, by state
common law. Federal registration is an overlay onto this system; it
mostly assumes, rather than displaces, state law.

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The plaintiﬀ, Galt House, Inc., instituted this action to enjoin the defendants, Home Supply Company, and its principal oﬃcer and stockholder, Al J. Schneider, from operating a new hotel in Louisville, Kentucky, under the assumed trade name “Galt House.”
During the Nineteenth Century the Galt House Hotel was a famous hostelry in Louisville with an excellent and widely recognized
reputation. In 1838 the bar-room at the Galt House was the scene of
a killing as a result of which an a orney and judge and his two com-

# 08/&34)*1

panions were indicted for murder. The trial itself is famous in the
annals of Kentucky history.
In 1842 Charles Dickens toured America. In his account in “American Notes,” he was characteristically uncomplimentary in his description of Louisville; he was impressed, however, with the Galt
House. He wrote: “We slept at the Galt House; a splendid hotel; and
were as handsomely lodged as though we had been in Paris, rather
than hundreds of miles beyond the Alleghanies.” In 1858 Charles
Mackay, an English writer, passed through Louisville. In his account
in “Life and Liberty in America” he remarked: ”We crossed in the
steamer to Louisville, and once more found ourselves in a land of
plenty and comfort, in a ﬂourishing city, in an excellent hotel – the
Galt House, one of the best conducted establishments in America.””
The Galt House, located on Main Street at Second Street, occupied separate buildings during its existence as a hotel. The second
Galt House was destroyed by ﬁre in January 1865 at a reported loss
of $1,000,000. The third Galt House, a magniﬁcent structure in its
day, was abandoned as a hotel and ceased operations in 1920. Belknap Hardware Company thereafter occupied the site of the last Galt
House.
Thus, it would appear that since 1920 there has been no use of the
name Galt House in connection with or to describe a hotel. The name
doubtless strikes interest when used in the presence of history buﬀs
and among those familiar with the folklore of Louisville. Among
such cognoscenti the name encourages remembrance of things past.
In February 1964, the plaintiﬀ, Galt House, Inc., incorporated under the laws of this state. In its articles of incorporation it adopted
as its corporate name the term “Galt House.” The plaintiﬀ has no assets and no liabilities; neither does it have corporate books or records.
Plaintiﬀ’s president and sole shareholder is Arch Stallard, Sr., a real
estate broker in Louisville, Kentucky, who specializes in hotel and
motel real estate. Mr. Stallard has on occasions since the date of the
ﬁling of plaintiﬀ’s articles of incorporation made a few sporadic inquiries concerning possible locations for a hotel and considered engaging in an enterprise by which a franchise operation would be effected. These few eﬀorts came to naught and Mr. Stallard testiﬁed
that because of illness and death in his family he had been “laying
dormant.”
The defendant, Home Supply Company, is a Kentucky corporation organized sometime prior to 1950. The defendant, Al J. Schneider, is its president and controlling shareholder. Home Supply Company is active in the business of constructing and operating hotels
in this state. It presently operates a hotel on the Kentucky State
Fair Board property under the assumed name “Executive Inn.” It is
presently engaged in the construction and completion of a high-rise

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hotel on riverfront-development property belonging to an agency of
the City of Louisville.
In April 1969, Home Supply Company, through its president
Schneider, submi ed to the city agency plans of a hotel bearing the
name Galt House. Construction commenced in May 1970. A new
hotel, 26 stories in height with 714 rooms, is now nearly completed
and has aﬃxed a sign bearing the name “The Galt House.” The hotel already has scheduled future conventions and room reservations,
although it will not open until after May 1972. In April 1971, Home
Supply Company applied for and received from the Secretary of State
of Kentucky a registration and service mark of the name “The Galt
House.”
Plaintiﬀ ﬁled suit in August 1971, seeking to enjoin the defendants
from any use of the name Galt House.
As found by the circuit judge, the corporation which operated the
last Galt House was formed in 1911 and its formal corporate existence
expired in 1961. From 1920 to 1961, however, it did not engage in the
hotel business. Therefore, the name Galt House had not been used
in connection with a going business for 49 years when defendants
undertook to use it as the name of their new hotel in 1969.
The primary argument asserted by the plaintiﬀ actually rests
upon a premise that by mere incorporation under a corporate name
it retains the right to exclude others from the use of that name so long
as the corporation legally exists.
In Duﬀ v. Kansas City Star Company, the court held that there is no
such thing as property in a trade-mark except as a right appurtenant
to an established business or trade with which the mark is employed.
This principle was applied to the trade name of a newspaper which
had not been published for eight years. The court decided that since
there was no established business (good will) to which the contested
name a ached, the plaintiﬀ had no right to prevent another from using the name in an active, going business. The court pointed out that
the contested name was no more than the common name of a oncepublished newspaper.
We are also unable to ﬁnd that plaintiﬀ has any standing to enjoin
under the theory that it was placed on the same footing with the former Galt House Corporation whose existence expired by operation
of law in 1961. There was no transfer of the name from the expiring
Galt House Corporation to plaintiﬀ. The former Galt House Corporation at the end of its corporate term of existence as ﬁxed by its articles
terminated its right to do business in 1961. It had not engaged in the
hotel business under its corporate name since 1920. The former Corporation was incapable of possessing a business with a good will or a
corporate trade name. The name did not survive, for there was nothing to which it could be a ached.

# 08/&34)*1

We must only determine whether the plaintiﬀ has the right to prohibit the defendants from using the name. We agree with the trial
judge that the plaintiﬀ has no standing to enjoin the use of the name
by the defendants under the facts of this case.
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 64
The essential facts are as follows: About the year 1877 Ellen M. Regis,
a resident of Haverhill, Massachuse s, began to compound and distribute in a small way a preparation for medicinal use in cases of
dyspepsia and some other ailments, to which she applied as a distinguishing name the word “Rex” – derived from her surname. The
word was put upon the boxes and packages in which the medicine
was placed upon the market, after the usual manner of a trade-mark.
Subsequently, in the year 1911, petitioner purchased the business
with the trade-mark right, and has carried it on in connection with its
other business, which consists in the manufacture of medicinal preparations, and their distribution and sale through retail drug stores,
known as “Rexall stores,” situate in the diﬀerent States of the Union,
four of them being in Louisville, Kentucky.
Meanwhile, about the year 1883, Theodore Rectanus, a druggist
in Louisville, familiarly known as “Rex,” employed this word as a
trade-mark for a medicinal preparation known as a “blood puriﬁer.”
He continued this use to a considerable extent in Louisville and vicinity, spending money in advertising and building up a trade, so that
– except for whatever eﬀect might ﬂow from Mrs. Regis’ prior adoption of the word in Massachuse s, of which he was entirely ignorant
– he was entitled to use the word as his trade-mark. In the year 1906
he sold his business, including the right to the use of the word, to
respondent; and the use of the mark by him and afterwards by respondent was continuous from about the year 1883 until the ﬁling of
the bill in the year 1912.
Petitioner’s ﬁrst use of the word “Rex” in connection with the sale
of drugs in Louisville or vicinity was in April, 1912, when two shipments of “Rex Dyspepsia Tablets,” aggregating 150 boxes and valued
at $22.50, were sent to one of the “Rexall” stores in that city. Shortly
after this the remedy was mentioned by name in local newspaper advertisements published by those stores. In the previous September,
petitioner shipped a triﬂing amount – ﬁve boxes – to a drug store in
Franklin, Kentucky, approximately 120 miles distant from Louisville.
There is nothing to show that before this any customer in or near
Kentucky had heard of the Regis remedy, with or without the description “Rex,” or that this word ever possessed any meaning to the
purchasing public in that State except as pointing to Rectanus and
the Rectanus Company and their “blood puriﬁer.” That it did and

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does convey the la er meaning in Louisville and vicinity is proved
without dispute.
The entire argument for the petitioner is summed up in the contention that whenever the ﬁrst user of a trade-mark has been reasonably diligent in extending the territory of his trade, and as a result of
such extension has in good faith come into competition with a later
user of the same mark who in equal good faith has extended his trade
locally before invasion of his ﬁeld by the ﬁrst user, so that ﬁnally it
comes to pass that the rival traders are oﬀering competitive merchandise in a common market under the same trade-mark, the later user
should be enjoined at the suit of the prior adopter, even though the
la er be the last to enter the competitive ﬁeld and the former have
already established a trade there.
The asserted doctrine is based upon the fundamental error of supposing that a trade-mark right is a right in gross or at large, like a
statutory copyright or a patent for an invention, to either of which, in
truth, it has li le or no analogy. There is no such thing as property
in a trade-mark except as a right appurtenant to an established business or trade in connection with which the mark is employed. The
law of trade-marks is but a part of the broader law of unfair competition; the right to a particular mark grows out of its use, not its mere
adoption; its function is simply to designate the goods as the product
of a particular trader and to protect his good will against the sale of
another’s product as his; and it is not the subject of property except
in connection with an existing business.
The owner of a trade-mark may not, like the proprietor of a
patented invention, make a negative and merely prohibitive use of it
as a monopoly. In truth, a trade-mark confers no monopoly whatever
in a proper sense, but is merely a convenient means for facilitating
the protection of one’s good-will in trade by placing a distinguishing
mark or symbol – a commercial signature – upon the merchandise or
the package in which it is sold.
It results that the adoption of a trade-mark does not, at least in the
absence of some valid legislation enacted for the purpose, project the
right of protection in advance of the extension of the trade, or operate as a claim of territorial rights over areas into which it thereafter
may be deemed desirable to extend the trade. And the expression,
sometimes met with, that a trade-mark right is not limited in its enjoyment by territorial bounds, is true only in the sense that wherever
the trade goes, a ended by the use of the mark, the right of the trader
to be protected against the sale by others of their wares in the place
of his wares will be sustained.
Conceding everything that is claimed in behalf of the petitioner,
the entire business conducted by Mrs. Regis and her ﬁrm prior to
April, 1911, when petitioner acquired it, was conﬁned to the New

# 08/&34)*1

England States with inconsiderable sales in New York, New Jersey,
Canada, and Nova Scotia. There was nothing in all of this to give
her any rights in Kentucky, where the principles of the common law
obtain.
Undoubtedly, the general rule is that, as between conﬂicting
claimants to the right to use the same mark, priority of appropriation determines the question. But the reason is that purchasers have
come to understand the mark as indicating the origin of the wares, so
that its use by a second producer amounts to an a empt to sell his
goods as those of his competitor. The reason for the rule does not
extend to a case where the same trade-mark happens to be employed
simultaneously by two manufacturers in diﬀerent markets separate
and remote from each other, so that the mark means one thing in
one market, an entirely diﬀerent thing in another. It would be a perversion of the rule of priority to give it such an application in our
broadly extended country that an innocent party who had in good
faith employed a trade-mark in one State, and by the use of it had
built up a trade there, being the ﬁrst appropriator in that jurisdiction,
might afterwards be prevented from using it, with consequent injury
to his trade and good-will, at the instance of one who theretofore had
employed the same mark but only in other and remote jurisdictions,
upon the ground that its ﬁrst employment happened to antedate that
of the ﬁrst-mentioned trader.
In this case, as already remarked, there is no suggestion of a sinister purpose on the part of Rectanus or the Rectanus Company. And
it results, as a necessary inference from what we have said, that petitioner, being the newcomer in that market, must enter it subject to
whatever rights had previously been acquired there in good faith by
the Rectanus Company and its predecessor. In that market, until petitioner entered it, “Rex” meant the Rectanus product, not that of Regis.
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[In 1994, Byron Darrah released an email program he named Coolmail. Darrah made Coolmail available by posting it to a service
named Sunsite, where users with an Internet connection could download it for free. Darrah made Coolmail available under the GNU General Public License, which allows users to copy, distribute, and modify the software as long as they adhere to various conditions, such as
releasing any modiﬁed versions under the GPL.]
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. The distribution was
widespread, and there is evidence that members of the targeted pub-

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lic 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 a endance), but to numerous end-users
via the Internet. The Software was posted under a ﬁlename bearing
the COOLMAIL mark on a site accessible to anyone who had access
to the Internet. End-users communicated with Darrah regarding the
Software by referencing the COOLMAIL mark in their e-mails. Appellants argue that only technically-skilled UNIX users made use of
the Software, but there is no evidence that they were so few in number to warrant a ﬁnding of de minimis use.
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.” The German company S.u.S.E. was able to locate Darrah
in order to request permission to use his Software in its product under the mark “Coolmail.” Appellants do not assert that S.u.S.E. was
unaware that the Software was called COOLMAIL when it contacted
Darrah.
Software 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 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.16
Appellants cite Heinemann v. General Motors Corp. for the proposition that Darrah was a “hobbyist” unworthy of common law trademark protection. Heinemann is factually distinguishable from the case
at hand. The plaintiﬀ in Heinemann used a mark in connection with
his automobile before an automobile manufacturer independently
had adopted the same name for a new model. The court held that the
plaintiﬀ had not established common law ownership rights based on
16

Because a GNU General Public License requires licensees who wish to copy,
distribute, or modify the software to include a copyright notice, the license itself is
evidence of Darrah’s eﬀorts to control the use of the COOLMAIL mark in connection with the Software.

# 08/&34)*1

two ﬁndings. First, the court found that because Heinemann’s purpose in using the mark was to “open [at a later date] an automobile
equipment shop which would have capitalized upon the slogan,” he
merely a empted to “reserve a trade or service mark pending the creation of a trade or business ....” The court reasoned as follows:
While the law does not require a nationwide business; an
old, established business; or even a proﬁtable business
for the acquisition of property interests in trade or service
marks, it does require a presently existing trade or business for such acquisition. The exhibits disclose that Plaintiﬀ had only a desire to open a business in futuro. To hold
otherwise would make a trade mark a property right in
gross, instead of a right appurtenant.
The Heinemann court also found that plaintiﬀ Heinemann’s activities
consisted merely of occasionally racing or displaying the automobile
at fairs as a hobby, as evidenced by his testimony that he was employed at an oil company. Here, Darrah did not a empt to “warehouse” the mark by promoting a product he merely intended to develop and distribute at a later date. Darrah’s use of the mark to designate the distributed Software and each subsequent version thereof
indicates that his use was not mere sporadic or token use. Furthermore, unlike Heinemann, Darrah activities pertained to his chosen
profession. Darrah is employed as a computer systems administrator, which entails the management and oversight of computer networks and systems as well as the development of software in support
thereof.
Appellants also rely on DeCosta v. Columbia Broad. Sys., Inc. 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 that the absence of a proﬁt-oriented enterprise renders one an eleemosynary individual, nor did it hold that
such individuals categorically are denied protection.18 Common law
unfair competition protection extends to non-proﬁt organizations because they nonetheless engage in competition with other organizations. 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
18

It is unlikely that the plaintiﬀ’s activities in De Costa—costumed performances
and distribution of his picture at local rodeos, parades, hospitals, etc. – would
generate a “public association” suﬃcient to confer him common law trademark
ownership rights.

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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.

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[Plaintiﬀ used the mark HEALTHSOURCE CHIROPRACTIC for his
chiropractic practice in Rochester, New York starting in 2003. Defendant started franchising chiropractic practices under the name
HEALTHSOURCE CHIROPRACTIC in 2006, initially in Ohio. It
quickly expanded to 325 franchisees nationwide. It awarded a franchise in Rochster to one Dr. Divito, which opened in April 2007.]
The Plaintiﬀ contends that he is the senior user of the HealthSource Chiropractic mark not only in the greater Rochester area but
also on the internet.
Geographical zones of exclusivity developed to protect the rights
of concurrent, innocent adopters who used the same mark in diﬀerent
geographic areas. There is li le likelihood of confusion, deception,
or mistake when a mark is used by diﬀerent businesses in distinct regions of the country. Common law trademark rights only extend to
the territories in which the mark’s adopter sells its products, renders
its services, establishes recognition of its mark, or draws its trade. A
user of a mark who does not seek federal registration risks the possibility that another user will independently adopt the same mark
and establish exclusive rights to use the mark in a remote area. The
trademark laws allow concurrent use of the same mark by multiple
adopters so long as each adopter’s use of the mark does not unreasonably intrude on another user’s geographic zone of exclusivity. By
allowing concurrent use of a mark, the trademark laws tolerate a certain amount of confusion.
By claiming exclusivity to the HealthSource Chiropractic mark on
the internet, the Plaintiﬀ assumes that the internet is a territory in

# 08/&34)*1

which he can establish exclusive rights. The internet is not, however,
a geographic territory to be subdivided; instead, it is a global communication medium that is accessible from anywhere on the planet.
The internet has become vital for local, regional, national, and international communication. It is used for selling, advertising, and marketing products and services as well as communicating with clients and
customers. An internet presence has become crucial for businesses of
all sizes, whether they operate locally or nationally.
The rights of concurrent users would be substantially harmed if
one user were able to monopolize the internet to the exclusion of other
lawful users of the same mark. Unlike national advertising which
would often be cost-prohibitive for a local or regional user, the internet is an almost-necessary tool for a user to develop its business and
remain competitive within its exclusive territory. Consequently, this
Court concludes that neither party can claim exclusive rights to the
internet.
Even though concurrent, lawful users of a mark should be allowed
to use their marks on the internet, use on the internet cannot be manipulated to intrude on another’s territory in bad faith. For instance,
it would be improper for a user to target internet advertisements to
consumers within another user’s exclusive territory or to advertise
on locally focused web sites that target that market.
In this case, the Defendants have taken reasonable measures to
ensure that they are not using the HealthSource Chiropractic mark
on the internet to intrude into the Plaintiﬀ’s territory. The Defendants have removed Dr. Divito’s practice completely from HealthSource Inc.’s web site. Dr. Divito maintains his own web site,
rochesterspinalcare.com, for his Rochester practice and only uses the
HealthQuest mark on his web site. The Plaintiﬀ has presented no
evidence that indicates the Defendants have used the HealthSource
mark on the internet to speciﬁcally target the Rochester market.
A trademark owner cannot reasonably expect to have exclusive
use of a term on the internet. Defendants presented evidence that as
of 2008 there were 754 registered domain names with that included
the term “healthsource.” Users of a mark must develop ways to distinguish themselves on the internet beyond resorting to the trademark laws.
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In a contest involving competing products claiming trademark priority, the district court determined, in order to acquire priority, a “use
in commerce” means a lawful use – here, a use compliant with federal
labeling requirements. We agree.
In the spring of 2001, Appellant CreAgri began selling Olivenol, a

$)"15&3  53"%&."3,

dietary supplement containing an apparently beneﬁcial antioxidant
found in olives called hydroxytyrosol. At the time, Olivenol’s label indicated that each tablet contained 25mg of hydroxytyrosol, the product’s primary active ingredient. CreAgri now admits that each tablet
contains at most 3mg of hydroxytyrosol and that Olivenol was, therefore, inaccurately labeled.
On June 18, 2002 – more than a year after CreAgri began selling
Olivenol – Appellee USANA ﬁled an intent to use application with
the Patent and Trademark Oﬃce asserting that it intended to begin
selling a series of vitamins, minerals, and nutritional supplements
containing an ingredient called Olivol, which – like Olivenol – is an
olive extract containing apparently beneﬁcial polyphenols. USANA
began selling these products in August 2002, the PTO granted USANA’s application, and OLIVOL is now listed on the principal register with a priority date of June 18, 2002. The present suit arises because, according to CreAgri, the name of USANA’s Olivol ingredient
is confusingly similar to the name of its own Olivenol product and,
therefore USANA is infringing upon the trademark rights CreAgri
acquired when it began selling Olivenol more than a year earlier.
If “use in commerce” were the only requirement for acquiring
trademark rights,9 then CreAgri would have an easier path to establishing priority of its mark because it began selling Olivenol more
than one year before USANA’s intent to use application was ﬁled.
But the inquiry does not stop with use in commerce. It has long been
the policy of the PTO’s Trademark Trial and Appeal Board that use
in commerce only creates trademark rights when the use is lawful.
The rationale for this rule is twofold. First, as a logical ma er, to
hold otherwise would be to put the government in the anomalous
position of extending the beneﬁts of trademark protection to a seller
based upon actions the seller took in violation of that government’s
own laws. Second, as a policy ma er, to give trademark priority to
a seller who rushes to market without taking care to carefully comply with the relevant regulations would be to reward the hasty at the
expense of the diligent.
By CreAgri’s own admission, each tablet sold under the Olivenol
name before June 18, 2002 contained, at most, 3mg of hydroxytyrosol,
while Olivenol’s label claimed that each tablet contained either 25mg
or 5mg of this nutrient. 21 C.F.R. § 101.9(g)(4)(i), however, requires
that the actual amount of a nutrient added to a product be “at least
equal to the value for that nutrient declared on the label.” Because
the actual amount of hydroxytyrosol (at most 3mg) was less than the
values for hydroxytyrosol declared on Olivenol’s labels (25mg and
5mg), CreAgri’s product was, at all relevant times, in violation.
Nexus

# 08/&34)*1

There must be some nexus between use of a mark and an alleged violation before it can be said that the unlawfulness of a sale or shipment
has resulted in a trademark’s invalidity. CreAgri argues that its labeling violation was collateral to its use of the Olivenol mark and, thushe former should not render the la er “unlawful.”
We neither adopt nor reject this rule because, even if the rule were
adopted, CreAgri could not beneﬁt from it. While it may be possible
to conceive of a situation in which violation of a law in connection
with a trademarked product would have no eﬀect on the rights inuring in that trademark, the nexus between a misbranded product and
that product’s name, particularly one designed for human consumption, is suﬃciently close to justify withholding trademark protection
for that name until and unless the misbranding is cured.
Materiality
CreAgri’s ﬁnal argument with respect to the apparent unlawfulness
of its use of “Olivenol” in commerce prior to USANA’s priority date
is that the labeling defect was so harmless or de minimis that it should
be excused as “immaterial” under General Mills, Inc. v. Health Valley
Foods(holding that a labeling defect is “material” only when it is “of
such gravity and signiﬁcance that the usage must be considered unlawful – so tainted that, as a ma er of law, it can create no trademark
rights”).
General Mills involved a dispute between Health Valley Foods
(seller of Fiber 7 Flakes cereal) and General Mills, Inc. (seller of Fiber
One cereal), in which the former accused the la er of not having
lawfully used “Fiber One” in commerce when the la er applied for
trademark registration. Although the ﬁrst eighteen boxes of Fiber
One – indeed, all boxes sold before General Mills applied for trademark registration of the Fiber One mark – were mislabeled under the
FDCA, General Mills noticed the error, promptly corrected it, and
then sold over 600,000 correctly labeled boxes to consumers before
Health Valley Foods even applied to register “Fiber 7 Flakes.” Under
these facts, the Trademark Trial and Appeal Board concluded that
cancelling Fiber One’s registration based on the original eighteen mislabeled boxes would be “Draconian.”
This case is categorically diﬀerent. Whereas General Mills corrected its labeling error before its competitor’s priority date – thus
eventually establishing the “lawful use in commerce” necessary for
trademark protection – CreAgri did not correct its labeling error before USANA’s priority date, and thus, there is not a single instance
of “lawful use in commerce” prior to June 18, 2002 upon which CreAgri can base its claim of priority. Accordingly, we need not decide
whether to adopt the generamills test for materiality; by any deﬁnition, Olivenol’s defect – which existed as to every bo le of Olivenol

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sold prior to the competing registrant’s priority date – was material.
C
Because CreAgri’s admi ed violation cannot be deemed collateral to
use of the Olivenol mark, excused, or overlooked as immaterial, it follows that the Olivenol mark was not lawfully used in commerce prior
to Olivol’s June 18, 2002 priority date. As such, USANA’s mark has
priority over CreAgri’s mark, and a trademark infringement action
by CreAgri against USANA cannot stand.
#JMHFXBUFS #JMMT 1SPCMFN
Consider the following sequence of events. Who has priority in Baltimore? In Sea le? In Chicago?
• A uses BILGEWATER BILL’S in Baltimore.
• B uses BILGEWATER BILL’S in Sea le.

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(b)

Application for use of trademark. –
(1) The owner of a trademark used in commerce may request registration of its trademark on the principal register
hereby established by paying the prescribed fee and ﬁling
in the Patent and Trademark Oﬃce an application and a
veriﬁed statement, in such form as may be prescribed by
the Director, and such number of specimens or facsimiles
of the mark as used as may be required by the Director.

Certiﬁcate as prima facie evidence. – A certiﬁcate of registration
of a mark upon the principal register provided by this chapter
shall be 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, subject to any conditions or limitations stated in the certiﬁcate.
(c) Application to register mark considered constructive use. – Contingent on the registration of a mark on the principal register provided by this chapter, the ﬁling of the application to register
such mark shall constitute constructive use of the mark, conferring a right of priority, nationwide in eﬀect, on or in connection

# 08/&34)*1

with the goods or services speciﬁed in the registration.
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Plaintiﬀ Burger King of Florida, Inc. opened the ﬁrst BURGER KING
restaurant in Jacksonville, Florida, in 1953. In July, 1961, plaintiﬀs
opened their ﬁrst Illinois BURGER KING restaurant in Skokie. Thereafter, on October 3, 1961, plaintiﬀs’ certiﬁcate of federal registration
of the mark was issued. Subsequently, plaintiﬀs opened a restaurant in Champaign, Illinois, and at the time of the trial in November,
1967, were operating more than ﬁfty BURGER KING restaurants in
the state of Illinois.
In 1957 the defendants, who had been operating an ice cream business in Ma oon, Illinois, opened a BURGER KING restaurant there.
In July, 1959, they registered that name under Illinois law as their
trade mark, without notice of plaintiﬀs’ prior use of the same mark.
On September 26, 1962, the defendants, with constructive knowledge
of plaintiﬀs’ federal trade mark, opened a second similar restaurant,
in Charleston, Illinois.
We hold that plaintiﬀs’ federal registration of the trade mark
BURGER KING gave them the exclusive right to use the mark in Illinois except in the Ma oon market area in Illinois where the defendants, without knowledge of plaintiﬀs’ prior use, actually used the
mark before plaintiﬀs’ federal registration. The defendants did not
acquire the exclusive right they would have acquired by their Illinois
registration had they actually used the mark throughout Illinois prior
to the plaintiﬀs’ federal registration.
Plaintiﬀs agree that the defendants as prior good faith users are to
be protected in the area that they had appropriated. Thus, the question narrows to what area in Illinois the defendants have appropriated by virtue of their Illinois registration.
At common law, defendants were entitled to protection in the
Ma oon market area because of the innocent use of the mark prior
to plaintiﬀs’ federal registration. They argue that the Illinois Trade
Mark Act was designed to give more protection than they already
had at common law, and that various provisions of the Illinois Act
indicate an intention to aﬀord Illinois registrants exclusive rights to
use trade marks throughout the state, regardless of whether they actually used the marks throughout the state or not. However, the Act
itself does not express any such intention. Moreover, we think that
whether or not Illinois intended to enlarge the common law with respect to a right of exclusivity in that state, the Illinois Act does not
enlarge its right in the area where the federal mark has priority.
The defendants argue also that unless they are given the right to

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exclusive use throughout Illinois, many persons from all parts of Illinois in our current mobile society will come in contact with the defendants’ business and will become confused as to whether they are
ge ing the defendants’ product, as they intended.
We are not persuaded by this argument. Defendants have not
shown that the Illinois public is likely to confuse the products furnished by plaintiﬀs and by defendants. We are asked to infer that
confusion will exist from the mere fact that both trade marks co-exist
in the state of Illinois. The mere fact that some people will travel from
one market area to the other does not, of itself, establish that confusion will result.
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1. Consider the following sequence of events. Who has priority in
Baltimore? In Sea le? In Chicago?
• A uses BILGEWATER BILL’S in Baltimore.
• B uses BILGEWATER BILL’S in Sea le.
• A ﬁles for federal trademark registration under § 1(a).
2. Consider the following sequence of events. Who has priority in
Baltimore? In Sea le? In Chicago?
• A uses BILGEWATER BILL’S in Baltimore.
• B uses BILGEWATER BILL’S in Sea le.
• B ﬁles for federal trademark registration under § 1(a).
3. Consider the following sequence of events. Who has priority in
Baltimore? In Sea le? In Chicago?
• A uses BILGEWATER BILL’S in Baltimore.
• B uses BILGEWATER BILL’S in Sea le.
• A ﬁles for federal trademark registration under § 1(a).
• B ﬁles for federal trademark registration under § 1(a).
C

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(b)

Application for bona ﬁde intention to use trademark. –
(1) A person who has a bona ﬁde intention, under circumstances showing the good faith of such person, to use a
trademark in commerce may request registration of its
trademark on the principal register hereby established by
paying the prescribed fee and ﬁling in the Patent and
Trademark Oﬃce an application and a veriﬁed statement,
in such form as may be prescribed by the Director.

# 08/&34)*1

(d) Veriﬁed statement that trademark is used in commerce. –
(1) Within six months after the date on which the notice of allowance with respect to a mark is issued to an applicant under subsection (b) of this section, the applicant shall ﬁle in
the Patent and Trademark Oﬃce, together with such number of specimens or facsimiles of the mark as used in commerce as may be required by the Director and payment
of the prescribed fee, a veriﬁed statement that the mark is
in use in commerce and specifying the date of the applicant’s ﬁrst use of the mark in commerce and those goods
or services speciﬁed in the notice of allowance on or in connection with which the mark is used in commerce. Subject
to examination and acceptance of the statement of use, the
mark shall be registered.
(2) The Director shall extend, for one additional 6-month period, the time for ﬁling the statement of use under paragraph (1), upon wri en request of the applicant before the
expiration of the 6-month period provided in paragraph
(1). In addition to an extension under the preceding sentence, the Director may, upon a showing of good cause by
the applicant, further extend the time for ﬁling the statement of use under paragraph (1) for periods aggregating
not more than 24 months, pursuant to wri en request of
the applicant made before the expiration of the last extension granted under this paragraph.
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This is a trademark dispute. Plaintiﬀs/Counter–Defendants Kelly
Services, Inc. and Kelly Properties, LLC (collectively, “Kelly”) and
Defendant/Counter–Plaintiﬀ Creative Harbor, LLC (“Creative Harbor”) each developed a mobile application that provides job searching and job placement tools. Now, Kelly and Creative Harbor dispute
which company has priority to the trademark “WorkWire.” Creative
Harbor has ﬁled two “intent to use” applications with the United
States Patent and Trademark Oﬃce (the “Creative ITUs”), and Creative Harbor claims priority based upon those ﬁlings. Kelly counters
that it has priority because it used the mark in commerce before Creative Harbor ﬁled the Creative ITUs.
FACTUAL BACKGROUND
A. The Kelly Workwire App

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Kelly provides career development information and job placement
tools to employers and prospective employees. In early 2013, Kelly
began developing an iPad application that would provide users
with access to personnel placement services, career information, job
searching tools, and a Kelly branch oﬃce locator. Kelly intended
to distribute the application through the Apple App Store. Kelly
decided to call its application “WorkWire” (the “Kelly WorkWire
App”).
Kelly completed the development of the Kelly WorkWire App on
February 4, 2014. That same day, Kelly submi ed the Kelly WorkWire App to Apple’s iTunes Connect, an Internet-based tool that allows a software developer to submit an application for sale in the
Apple App Store, pending Apple’s approval of the application.
Approximately one week later, on February 10, 2014, Apple informed Kelly that the Kelly WorkWire App was rejected because of
a problem with the application’s metadata. The next day, Kelly resubmi ed the Kelly WorkWire App for Apple’s review.
On February 17, 2014, Apple informed Kelly that the Kelly WorkWire App had been approved and was “ready for sale.” However,
Apple’s designation of the Kelly WorkWire App as “ready for sale”
did not immediately make the Kelly WorkWire App available for the
public to download from the Apple App Store. The Kelly WorkWire
App was ﬁrst released to the public via the Apple App Store on February 19, 2014, sometime after 8:11 p.m. Eastern Standard Time. A consumer ﬁrst downloaded the Kelly WorkWire App from the Apple
App Store on February 20, 2014.
B. The Creative WorkWire App

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In September 2013, Christian Jurgensen (“Jurgensen”), an entrepreneur based in Los Angeles, California, independently came
up with an idea for a mobile application for use by employers and
prospective employees. Jurgensen decided to call his application
“WorkWire” (the “Creative Workwire App”).
In early February 2014, Jurgensen formed Creative Harbor as
the limited liability company responsible for the Creative WorkWire
App. At approximately the same time, Creative Harbor hired an intellectual property a orney to provide advice on trademark protection.
On February 16, 2014, the a orney informed Creative Harbor that the
trademark for “WorkWire” was available.
Three days later, on February 19, 2014, Creative Harbor ﬁled the
Creative ITUs with the United States Patent and Trademark Oﬃce
(the “USPTO”).1 The Creative ITUs were for the mark “WorkWire”
1

As explained further below, an intent to use (“ITU”) application is an anticipatory application for registration of a trademark based on the applicant’s intent to

# 08/&34)*1

(hereinafter the “Mark”). The Creative ITUs were ﬁled at 6:28 p.m.
and 7:56 p.m. Eastern Standard Time.
Creative Harbor has tried to make the Creative WorkWire App
available for download by the public through the Apple App Store.
However, Apple will not accept the Creative WorkWire App for posting in the Apple App Store because the “WorkWire” name is already
being used by the Kelly WorkWire App. Creative Harbor acknowledges that it has not used the Mark in commerce and therefore has
not completed registration of the Mark.
PROCEDURAL HISTORY
On March 10, 2014, Creative Harbor’s counsel sent a “cease and desist” le er to Kelly. Creative Harbor stated that Kelly’s use of the
Mark in connection with the Kelly WorkWire App “constitutes trademark infringement and unfair competition under federal and state
law.” Creative Harbor therefore “demand[ed] that Kelly ... cease all
use of the term ‘WorkWire’....” In response, Kelly ﬁled this declaratory judgment action against Creative Harbor.
ANALYSIS
A. Kelly Did Not Use the Mark in Commerce Before Creative Filed the
Creative ITUs, and Thus Kelly Does Not Have Priority Based on Its
Alleged Prior Use
Ordinarily, priority to a mark is established “as of the ﬁrst actual use
of [the] mark” in commerce. . However, the Lanham Act allows a
person not yet using a mark to ﬁle an anticipatory application for
registration – i.e., an ITU application – on the basis of an intent to use
the mark in the future. If the ITU applicant later uses the mark in a
commercial transaction and ﬁles a statement of use with the USPTO
within the prescribed time frame, the mark is registered and the date
the ITU application was ﬁled becomes the applicant’s constructiveuse date. This gives the [ITU] applicant priority-of-use over anyone
who adopts the mark after the constructive-use date.
Kelly argues that it used the Mark in commerce before Creative
Harbor ﬁled the Creative ITUs and that Kelly therefore has priority
to the Mark over Creative Harbor. Creative Harbor contends that
Kelly did not use the Mark in commerce before the Creative ITUs
were ﬁled and, thus, that Kelly does not have priority over Creative
Harbor. Accordingly, the issue with respect to priority is whether
Kelly actually used the Mark in commerce before Creative Harbor
ﬁled the Creative ITUs. The Court holds that Kelly did not.
use the mark in the future. Under certain circumstances, an ITU application establishes the applicant’s priority to the trademark over another person who adopted
the trademark after the ITU was ﬁled.

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Under the Lanham Act, “[t]he 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.”. Use in commerce requires a
genuine commercial transaction or an a empt to complete a genuine
commercial transaction. The use need not be extensive nor result in
deep market penetration or widespread recognition. However, there
has to be an ”open” use, that is to say, a use has to be made to the relevant class of purchasers or prospective purchasers. An ”internal” use
cannot give rise to priority rights to a mark. S Indeed, the talismanic
test for use in commerce is whether or not the use was 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.
Applying this test in Allard Enters., Inc. v. Advanced Programming
Resources, Inc., the Sixth Circuit found suﬃcient public use when a
claimant oﬀered its services to potential customers through “numerous solicitations” bearing the mark.
Kelly contends that it used the Mark in commerce on February 4,
2014, when it submi ed the Kelly Workwire App to iTunes Connect
for Apple’s review. Kelly argues that its submission constitutes use
in commerce because it “engaged Apple, an unrelated company, at
arms-length, in the ordinary course of trade and subject to Apple’s
software developer’s requirements.” But Kelly has not shown that
its submission of the Kelly WorkWire App to Apple was suﬃciently
open or public to identify or distinguish its application in the minds
of consumers. To the contrary, the bilateral exchange between Kelly
and iTunes Connect provided no notice of the Kelly WorkWire App
to potential consumers – i.e., persons who might eventually download the Kelly WorkWire App from the Apple App Store. Indeed,
by merely submi ing the Kelly WorkWire App for Apple’s review,
Kelly did not make the Kelly WorkWire App available for download
by the public. At best, Kelly’s submission was a preparatory step to
making the Kelly WorkWire App available to consumers. an applicant’s preparations to use a mark in commerce are insuﬃcient to constitute use in commerce.
B. Creative Harbor is Not Entitled to a Declaration That it Has Priority At
this Time
In its Motion, Creative Harbor seeks summary judgment “on the issue of priority in its right to use the Mark.” But Creative Harbor has
not yet established its priority. All that Creative Harbor has done is
ﬁle the Creative ITUs. The Creative ITUs – in and of themselves – do
not establish Creative Harbor’s priority to the Mark. Rather, the Creative ITUs merely establish Creative Harbor’s constructive-use date,
contingent on Creative Harbor’s registration of the Mark. Thus, in order to establish its priority, Creative Harbor must actually complete

# 08/&34)*1

the registration of the Mark by using the Mark in commerce and ﬁling a statement of use with the USPTO within the prescribed time
frame. Creative Harbor acknowledges that it has not yet used the
Mark. Accordingly, while Creative Harbor may establish its priority
at some point in the future, it is not now entitled to the declaration
that it seeks here.
C. Creative Harbor’s Additional Counterclaims Fail as a Ma er of Law
As noted above, Creative Harbor asserts Additional Counterclaims
against Kelly for unfair competition, trademark dilution, and intentional interference with prospective business. Each of the Additional
Counterclaims is based on Creative Harbor’s assertion that Kelly infringed on Creative Harbor’s alleged priority rights to the Mark. Creative Harbor says that it established those rights by ﬁling the Creative
ITUs. But an intent-to-use application does not, by itself, confer any
rights enforceable against others.
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The evidence makes clear that Creative Harbor had a “ﬁrm” intent to
use the Mark in connection with an iPhone application that connected
job seekers with employers. But evidence that Creative Harbor intended to use the Mark with respect to some of the goods and services
listed in the Creative ITUs does not contradict Kelly’s evidence that
Creative Harbor lacked a ﬁrm intent to use the Mark on several of
the other services and goods listed in the ITUs. Kelly has identiﬁed
sworn deposition testimony by Creative Harbor’s CEO Christian Jurgensen indicating that (1) in many respects, Creative Harbor merely
intended to reserve a right in the Mark and (2) Creative Harbor lacked
a ﬁrm intent to use the Mark with respect to several of the goods and
services listed in the Creative ITUs. Kelly directs the Court to the
following representative portions of Mr. Jurgensen’s testimony:
• Mr. Jurgensen conceded that at the time his a orney drafted
the Creative ITUs he (Jurgensen) “had clear ideas for some of
them, and some of them were meant for future exploration.”
• In the Goods ITU, Creative Harbor stated that it intended to use
the Mark with “computer game software,” but Mr. Jurgensen
testiﬁed that Creative Harbor did “not” intend to use the Mark
“with a game.”
• In the Services ITU, Creative Harbor said that it intended to use
the Mark in connection with “business consulting” services, but
Mr. Jurgensen conceded that he “wanted to make sure [that]
was there included” because the company “could” perhaps perform those services “at some point” in the future.

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Critically, Creative Harbor has not identiﬁed any objective evidence
that it had a bona ﬁde intent to use the Mark in connection with many
of services and goods listed on the Creative ITUs, such as employee
relations information services, business consulting services, professional credentialing veriﬁcation services, computer game software,
and/or computer hardware for integrating text and audio.
Absent fraud, an ITU applicant may cure an overbroad listing
of goods and/or services by deleting from its application the goods
and/or services on which it lacks a bona ﬁde intent to use the mark.
In Spirits Int’l, B.V. v. S.S. Taris Zeytin Ve Zeytinyagi Tarim Satis Kooperatiﬂeri Birligi, the TTAB did not suggest that a tribunal may properly
delete items that an applicant has not, itself, undertaken to delete. Instead, the TTAB said that because the applicant had failed to make
the required deletions, the appropriate remedy was to void the entire classes containing the goods for which the required intent was
lacking. Application of the Spirits Int’l framework leads the Court to
invalidate the Creative ITUs in their entirety.
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Consider the following sequence of events. Who has priority in Baltimore? Who has priority in Sea le? Who has priority in Chicago?
• B ﬁles a § 1(b) intent-to-use application for BILGEWATER
BILL’S.
• A uses BILGEWATER BILL’S in Baltimore
• B uses BILGEWATER BILL’S in Sea le.
• B ﬁles a § 1(d) statement of use.

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In this action, plaintiﬀ seeks to enjoin the defendant, Clinton Guillory,
who is also known and sometimes referred to herein as “Clint West,”
from using the trade name “The Boogie Kings.” The suit was instituted by “The Boogie Kings,” an unincorporated association doing
business under that trade name, represented herein by three of the
oﬃcers or representatives of that association. The defendant ﬁled an
answer and a reconventional demand, in which he alleges that he has
the exclusive right to use that trade name, and he prays for judgment
enjoining plaintiﬀ from using it.
The evidence shows that in 1955 Douglas Ardoin and Harris
Miller formed a dance band or orchestra, and they mutually agreed
to call themselves “The Boogie Kings.” Other musicians joined the

# 08/&34)*1

band thereafter, and in 1964 it was composed of ten members. The
band was never incorporated and no formal partnership agreement,
oral or wri en, was ever entered into. The band functioned as an
organization with a deﬁnite membership, however, and as an organized band it acquired movable property and entered into contracts
for playing engagements and other ma ers. The evidence shows that
since the initial creation of the orchestra, the members from time to
time have elected one of their number to serve as “leader.” Although
there is some conﬂict in the testimony, we think the evidence establishes that all major decisions aﬀecting the organization, the assets
and the operations of the band have been made by a majority vote of
the members.
Ardoin was elected and served as the ﬁrst leader of the band, and
he was succeeded by Miller. Later, Ardoin was reelected to be the
leader, and he served as such until he withdrew completely from the
band in 1963. Thereafter, he discontinued his career as a musician.
Miller succeeded Ardoin as leader in 1963, and he served as such until May, 1964, when a dispute arose between Miller and most of the
other members relative to a playing engagement. As the result of that
dispute, Miller withdrew as a member of the band.
Defendant, Guillory, joined the band as a drummer and vocalist
in 1963. Immediately after Miller withdrew in May, 1964, Guillory
was elected by the other members as leader. As the featured vocalist
in the band, he was known professionally as “Clint West.” In order
to capitalize on his popularity as a singer, the name of the band was
changed to “Clint West and the Boogie Kings,” this change of name
being made after defendant became the leader and with the approval
of a majority of the members.
During the la er part of the year 1964, or the ﬁrst part of 1965,
this band was playing regularly at the Bamboo Club in Lake Charles
and occasionally at other places. Guillory acquired an interest in the
Moulin Rouge Club at that time, however, and he prevailed upon the
other members to discontinue playing at the Bamboo Club and to begin playing regularly at the Moulin Rouge instead. A relatively short
time after making this change, all of the members except Guillory became dissatisﬁed with the arrangement, and nine of the ten members
voted to go back to playing at the Bamboo Club. Guillory was the
only member who refused to join them in this decision, and he thereupon separated or disassociated himself from the other members.
Immediately after this split in the band occurred, the nine original
members elected a new leader, a new member came into the band to
take Guillory’s place, and the orchestra resumed playing regularly
at the Bamboo Club, and other places, under the name of “The Boogie Kings.” Also, immediately after the split, Guillory joined with
nine other musicians to form a new orchestra, and this new group re-

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sumed playing at the Moulin Rouge Club, and other places, and they
called themselves “Clint West and The Boogie Kings.”
Defendant contends that the band, as an organization or association, never acquired a proprietary interest in this trade name, that the
right to use that name was vested originally in Ardoin and Miller, that
Miller acquired the exclusive right to use it when Ardoin abandoned
any claim to it, and that shortly prior to the “split” Miller speciﬁcally
gave to defendant Guillory the exclusive right to use the name, “The
Boogie Kings.”
In the instant suit, the evidence shows that during the period from
1955 to 1964 the band known by the trade name of “The Boogie Kings”
acquired a considerable amount of popularity. Because of its reputation as a musical organization or dance band, its trade name has acquired some signiﬁcance and value. The person or organization ﬁrst
appropriating the name or having the legal right to use it, therefore,
has a proprietary interest in that name and is entitled to judgment
enjoining another from appropriating it.
In our opinion, this band, when ﬁrst organized in 1955, became an
unincorporated association, and it has continued to be such an organization since that time. The evidence convinces us, as it apparently
did the trial judge, that the original trade name, “The Boogie Kings,”
was adopted by mutual agreement of the members of the band, that
a proprietary interest in that name became vested in the band, as an
unincorporated association, and that it did not become vested in any
individual member of that band. Miller, therefore, had no right or
authority to “give” or to transfer to defendant Guillory the exclusive
right to use that name.
Dissatisﬁed members of an association cannot deprive it of the
right to use its own name by incorporating themselves thereunder,
and enjoining it from using the same. We conclude that Guillory acquired no right to use the trade name of the band, either from Miller
or from the circumstance that he had been elected as leader of the
band. The trial judge, therefore, correctly enjoined defendant from
continuing to use that name.
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2.

A person shall not advertise or conduct a live musical performance or production through the use of an aﬃliation, connection or association between the performing group and the
recording group unless:
a. The performing group is the authorized registrant and
owner of a federal service mark for the group registered
in the United States Patent and Trademark Oﬃce; or

# 08/&34)*1

b.

At least one member of the performing group was a member of the recording group and has a legal right by virtue
of use or operation under the group name without having
abandoned the name or aﬃliation of the group; or
c. The live musical performance or production is identiﬁed
in all advertising and promotion as a salute or tribute; or
...
e. The performance or production is expressly authorized by
the recording group.
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Section 5 of the Trademark Act, 15 U.S.C. § 1055, states, in part, as
follows:

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Where a registered mark or a mark sought to be registered
is or may be used legitimately by related companies, such
use shall inure to the beneﬁt of the registrant or applicant
for registration, and such use shall not aﬀect the validity
of such mark or of its registration, provided such mark is
not used in such manner as to deceive the public.
Section 45 of the Act, 15 U.S.C. § 1127, deﬁnes “related company” as
follows:
The term “related company” means any person whose use
of a mark is controlled by the owner of the mark with respect to the nature and quality of the goods or services on
or in connection with which the mark is used.
Thus, § 5 of the Act permits applicants to rely on use of the mark by
related companies. Either a natural person or a juristic person may
be a related company. 15 U.S.C. § 1127.
The essence of related-company use is the control exercised over
the nature and quality of the goods or services on or in connection
with which the mark is used. When a mark is used by a related company, use of the mark inures to the beneﬁt of the party who controls
the nature and quality of the goods or services. This party is the
owner of the mark and, therefore, the only party who may apply to
register the mark.
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Duﬀ beer is, or was, a ﬁctional beer on the animated cartoon sitcom
The Simpsons. Varieties mentioned on the show include Duﬀ, Duﬀ
Dry, Duﬀ Light, Duﬀ Adequate, Raspberry Duﬀ, Lady Duﬀ, and Tartar Control Duﬀ. Recently, the Fudd Corporation has started selling

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beer under the DUFF name. Fudd is unaﬃliated with Twentieth Century Fox (which produces The Simpsons) and has not obtained permission to sell DUFF beer. Trademark infringement? What if Fox
sold a line of Simpsons-themed beers including Duﬀ? What if Fox
gave away “Duﬀ beer” (actually ginger ale) to fans at conventions?

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No trademark … shall be refused registration on the principal register
on account of its nature unless it –
(e) Consists of a mark which (1) when used on or in connection
with the goods of the applicant is merely descriptive … of them,
(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.

Note that §§ 2(e)(1) and (f) of the Lanham Act restate the common-law
doctrine of descriptive and generic trademarks. “Merely” descriptive
marks are not protectable, but marks that have “become distinctive”
(i.e. acquired secondary meaning) are. A generic mark is considered
incapable of acquiring secondary meaning as a ma er of law.
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No trademark shall be refused registration on the principal register
on account of its nature unless it—
(a) Consists of or comprises immoral … or scandalous ma er; or
ma er 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; …

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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 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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The Boulevard Entertainment, Inc. seeks to register “1-800-JACKOFF” and “JACK-OFF” as marks on the Principal Register for “entertainment in the nature of adult-oriented conversations by telephone.”
The TTAB aﬃrmed the refusal to register on the ground that the
marks consist of or comprise scandalous ma er. Because substantial
evidence supports the TTAB’s ﬁnding that the term “jack-oﬀ” is an
oﬀensive and vulgar reference to masturbation and that Boulevard’s
use of the marks refers to that meaning, we aﬃrm.

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Section 45 of the Trademark Act, 15 U.S.C. §1127, deﬁnes “collective
mark” as follows:
The term “collective mark” means a trademark or service mark–
(1) used by the members of a cooperative, an association, or
other collective group or organization, or
(2) which such cooperative, association, or other collective
group or organization has a bona ﬁde intention to use in
commerce and applies to register on the principal register established by this [Act], and includes marks indicating
membership in a union, an association, or other organization.
Under the Trademark Act, a collective mark is owned by a collective
entity even though the mark is used by the members of the collective.
There are basically two types of collective marks: (1) collective
trademarks or collective service marks; and (2) collective membership marks. The distinction between these types of collective marks

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is explained in Aloe Creme Labs., Inc. v. Am. Soc’y for Aesthetic Plastic
Surgery, Inc. as follows:
A collective trademark or collective service mark is a mark
adopted by a “collective” (i.e., an association, union, cooperative, fraternal organization, or other organized collective group) for use only by its members, who in turn
use the mark to identify their goods or services and distinguish them from those of nonmembers. The “collective”
itself neither sells goods nor performs services under a collective trademark or collective service mark, but the collective may advertise or otherwise promote the goods or
services sold or rendered by its members under the mark.
A collective membership mark is a mark adopted for the
purpose of indicating membership in an organized collective group, such as a union, an association, or other organization. Neither the collective nor its members uses the
collective membership mark to identify and distinguish
goods or services; rather, the sole function of such a mark
is to indicate that the person displaying the mark is a member of the organized collective group.
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In an application for registration of a mark, the applicant should designate the international class number(s) that are appropriate for the
identiﬁed goods and/or services whenever the information is known.

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International trademark classiﬁcation, and the headings of the international trademark classes, are established by the Commi ee of Experts of the Nice Union and set forth in the International Classiﬁcation of Goods and Services for the Purposes of the Registration of
Marks (Nice Classiﬁcation) published annually by the World Intellectual Property Organization (“WIPO”) on its website.
A wri en application must specify the particular goods and/or services on or in connection with which the applicant uses, or has a bona
ﬁde intention to use, the mark in commerce. To “specify” means to
name in an explicit manner. The identiﬁcation should set forth common names, using terminology that is generally understood.
The applicant must identify the goods and services speciﬁcally to
provide public notice and to enable the USPTO to classify the goods
and services properly and to reach informed judgments concerning
likelihood of confusion. The USPTO has discretion to require the degree of particularity deemed necessary to clearly identify the goods

$ 130$&%63&4

and/or services covered by the mark.
Terminology that includes items in more than one class is considered indeﬁnite.
Example: “Blankets” is not acceptable without qualifying wording because it is not particular enough to identify the kind of blanket
on which the mark is used, e.g., ﬁre blankets (Class 9), electric blankets (Class 11), horse blankets (Class 18), and bed blankets (Class 24).
The accuracy of identiﬁcation language in the original application
is important because the identiﬁcation cannot later be expanded.
Specimens are required because they show the manner in which the
mark is seen by the public. Specimens also provide supporting evidence of facts recited in the application.
A trademark or service mark application for registration under
§ 1(a) of the Trademark Act must include one specimen for each class,
showing use of the mark in commerce on or in connection with the
goods, or in the sale or advertising of the services.
For a trademark application under § 1(a), allegation of use in an application under § 1(b), or aﬃdavit of use under § 8 or § 71 of the Trademark Act, the specimen must show the mark as used on or in connection with the goods in commerce. A trademark specimen should be
a label, tag, or container for the goods, or a display associated with
the goods. A photocopy or other reproduction of a specimen of the
mark as used on or in connection with the goods is acceptable.

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The owner of a mark registered in the United States Patent and Trademark Oﬃce may give notice that the mark is registered by displaying with the mark the words “Registered in United States Patent and
Trademark Oﬃce,” the abbreviation “Reg. U.S. Pat. & Tm. Oﬀ.,” or
the le er R enclosed within a circle, ®. A party may use terms such as
“trademark,” “trademark applied for,” “TM” and “SM” regardless of
whether a mark is registered. These are not oﬃcial or statutory symbols of federal registration.

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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 –

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(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:
Provided, That if the Director determines that confusion,
mistake, or deception is not likely to result from the continued
use by more than one person of the same or similar marks under conditions and limitations as to the mode or place of use
of the marks or the goods on or in connection with which such
marks are used, concurrent registrations may be issued to such
persons when they have become entitled to use such marks as
a result of their concurrent lawful use in commerce prior to (1)
the earliest of the ﬁling dates of the applications pending or of
any registration issued under this chapter. Use prior to the ﬁling date of any pending application or a registration shall not
be required when the owner of such application or registration
consents to the grant of a concurrent registration to the applicant.
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(a)

Examination and publication. – Upon the ﬁling of an application
for registration and payment of the prescribed fee, the Director
shall refer the application to the examiner in charge of the registration of marks, who shall cause an examination to be made
and, if on such examination it shall appear that the applicant is
entitled to registration the Director shall cause the mark to be
published in the Oﬃcial Gaze e of the Patent and Trademark
Oﬃce.

(a)

Any person who believes that he would be damaged by the registration of a mark upon the principal register may, upon payment of the prescribed fee, ﬁle an opposition in the Patent and
Trademark Oﬃce, stating the grounds therefor, within thirty
days after the publication of the mark sought to be registered.

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This case concerns the application of issue preclusion in the context of
trademark law. Petitioner, B&B Hardware, Inc. (B&B), and respondent Hargis Industries, Inc. (Hargis), both use similar trademarks;
B&B owns SEALTIGHT while Hargis owns SEALTITE. Under the
Lanham Act, an applicant can seek to register a trademark through
an administrative process within the United States Patent and Trade-

$ 130$&%63&4

mark Oﬃce (PTO). But if another party believes that the PTO should
not register a mark because it is too similar to its own, that party can
oppose registration before the Trademark Trial and Appeal Board
(TTAB).
The TTAB consists of administrative trademark judges and highranking PTO oﬃcials, including the Director of the PTO and the Commissioner of Trademarks. Opposition proceedings before the TTAB
are in many ways similar to a civil action in a federal district court.
These proceedings, for instance, are largely governed by the Federal
Rules of Civil Procedure and Evidence. The TTAB also allows discovery and depositions. The party opposing registration bears the
burden of proof, and if that burden cannot be met, the opposed mark
must be registered.
The primary way in which TTAB proceedings diﬀer from ordinary
civil litigation is that proceedings before the Board are conducted in
writing, and the Board’s actions in a particular case are based upon
the wri en record therein. In other words, there is no live testimony.
Even so, the TTAB allows parties to submit transcribed testimony,
taken under oath and subject to cross-examination, and to request
oral argument.
Here, Hargis tried to register the mark SEALTITE, but B&B opposed SEALTITE’s registration. After a lengthy proceeding, the
TTAB agreed with B&B that SEALTITE should not be registered.
In addition to permi ing a party to object to the registration of a
mark, the Lanham Act allows a mark owner to sue for trademark
infringement. Both a registration proceeding and a suit for trademark infringement, moreover, can occur at the same time. In this
case, while the TTAB was deciding whether SEALTITE should be registered, B&B and Hargis were also litigating the SEALTIGHT versus
SEALTITE dispute in federal court. In both registration proceedings
and infringement litigation, the tribunal asks whether a likelihood
of confusion exists between the mark sought to be protected (here,
SEALTIGHT) and the other mark (SEALTITE).
The question before this Court is whether the District Court in this
case should have applied issue preclusion to the TTAB’s decision that
SEALTITE is confusingly similar to SEALTIGHT. Here, the Eighth
Circuit rejected issue preclusion for reasons that would make it diﬃcult for the doctrine ever to apply in trademark disputes. We disagree
with that narrow understanding of issue preclusion. Instead, consistent with principles of law that apply in innumerable contexts, we
hold that a court should give preclusive eﬀect to TTAB decisions if
the ordinary elements of issue preclusion are met.
Justice GINSBURG, concurring.
The Court rightly recognizes that “for a great many registration

$)"15&3  53"%&."3,

decisions issue preclusion obviously will not apply.” That is so because contested registrations are often decided upon a comparison
of the marks in the abstract and apart from their marketplace usage.
When the registration proceeding is of that character, there will be no
preclusion of the likelihood of confusion issue in a later infringement
suit. On that understanding, I join the Court’s opinion.
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This ma er is on remand from the United States Supreme Court.
We directed the parties to submit supplemental brieﬁng. Having reviewed the brieﬁng, we now determine that the ordinary elements of
issue preclusion have been met and the usages of the marks adjudicated before the TTAB were materially the same as the usages before
the district court. As noted in our prior opinions, the TTAB compared
the marks in question in the marketplace context when it determined
the likelihood of confusion issue for purposes of trademark registration.

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(a)

Time periods for required aﬃdavits. – Each registration shall remain in force for 10 years, except that the registration of any
mark shall be canceled by the Director unless the owner of the
registration ﬁles in the United States Patent and Trademark
Oﬃce aﬃdavits that meet the requirements of subsection (b),
within the following time periods:
(1) Within the 1-year period immediately preceding the expiration of 6 years following the date of registration under
this chapter or the date of the publication under section
1062(c) of this title.
(2) Within the 1-year period immediately preceding the expiration of 10 years following the date of registration, and
each successive 10-year period following the date of registration.
(b) Requirements for aﬃdavit. – The aﬃdavit referred to in subsection (a) shall—
(1) (A) state that the mark is in use in commerce;
(B) set forth the goods and services recited in the registration on or in connection with which the mark is in use
in commerce;

$ 130$&%63&4

(C) be accompanied by such number of specimens or facsimiles showing current use of the mark in commerce
as may be required by the Director; and
(D) be accompanied by the fee prescribed by the Director;
(a)

Period of renewal; time for renewal. – Subject to the provisions
of section 1058 of this title, each registration may be renewed
for periods of 10 years at the end of each successive 10-year period following the date of registration upon payment of the prescribed fee and the ﬁling of a wri en application, in such form
as may be prescribed by the Director.

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A petition to cancel a registration of a mark, stating the grounds relied
upon, may, upon payment of the prescribed fee, be ﬁled as follows
by any person who believes that he is or will be damaged by the registration of a mark on the principal register established by this chapter
…
(1) Within ﬁve years from the date of the registration of the mark
under this chapter.
(3) At any time if the registered mark becomes the generic name
for the goods or services, or a portion thereof, for which it is
registered, or is functional, or has been abandoned, or its registration was obtained fraudulently or contrary to the provisions
of section 1054 of this title or of subsection (a), (b), or (c) of section 1052 of this title for a registration under this chapter … or
with the permission of, the registrant so as to misrepresent the
source of the goods or services on or in connection with which
the mark is used. … A registered mark shall not be deemed
to be the generic name of goods or services solely because such
mark is also used as a name of or to identify a unique product or
service. The primary signiﬁcance of the registered mark to the
relevant public rather than purchaser motivation shall be the
test for determining whether the registered mark has become
the generic name of goods or services on or in connection with
which it has been used.
Except on a ground for which application to cancel may be ﬁled at
any time under paragraphs (3) and (5) of section 1064 of this title
… the right of the owner to use such registered mark in commerce

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for the goods or services on or in connection with which such registered mark has been in continuous use for ﬁve consecutive years
subsequent to the date of such registration and is still in use in commerce, shall be incontestable: …

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 64
Petitioner operates long-term parking lots near airports. After starting business in St. Louis in 1967, petitioner subsequently opened facilities in Cleveland, Houston, Boston, Memphis, and San Francisco.
Petitioner applied in 1969 to the United States Patent and Trademark
Oﬃce (Patent Oﬃce) to register a service mark consisting of the logo
of an airplane and the words “Park’N Fly.” The registration issued in
August 1971. Nearly six years later, petitioner ﬁled an aﬃdavit with
the Patent Oﬃce to establish the incontestable status of the mark. As
required by § 15 of the Trademark Act of 1946 (Lanham Act), the aﬃdavit stated that the mark had been registered and in continuous use
for ﬁve consecutive years, that there had been no ﬁnal adverse decision to petitioner’s claim of ownership or right to registration, and
that no proceedings involving such rights were pending.
Respondent also provides long-term airport parking services, but
only has operations in Portland, Oregon. Respondent calls its business “Dollar Park and Fly.” Petitioner ﬁled this infringement action
in 1978 in the United States District Court for the District of Oregon
and requested the court permanently to enjoin respondent from using the words “Park and Fly” in connection with its business.
After a bench trial, the District Court found that petitioner’s mark
is not generic and observed that an incontestable mark cannot be challenged on the grounds that it is merely descriptive.
An incontestable mark that becomes generic may be canceled at
any time pursuant to § 14(c). That section also allows cancellation
of an incontestable mark at any time if it has been abandoned, if it
is being used to misrepresent the source of the goods or services in
connection with which it is used, or if it was obtained fraudulently
or contrary to the provisions of § 4, 15 U.S.C. § 1054, or §§ 2(a)-(c), 15
U.S.C. §§ 1052(a)-(c).
The language of the Lanham Act also refutes any conclusion that
an incontestable mark may be challenged as merely descriptive. The
Lanham Act expressly provides that before a mark becomes incontestable an opposing party may prove any legal or equitable defense which might have been asserted if the mark had not been registered. Thus, § 33(a) would have allowed respondent to challenge
petitioner’s mark as merely descriptive if the mark had not become
incontestable. With respect to incontestable marks, however, § 33(b)
provides that registration is conclusive evidence of the registrant’s

$ 130$&%63&4

exclusive right to use the mark, subject to the conditions of § 15 and
the seven defenses enumerated in § 33(b) itself. Mere descriptiveness
is not recognized as a basis for challenging an incontestable mark.
JUSTICE STEVENS, dissenting.
Congress enacted the Lanham Act “to secure trade-mark owners
in the goodwill which they have built up.” But without a showing of
secondary meaning, there is no basis upon which to conclude that petitioner has built up any goodwill that is secured by the mark “Park’N
Fly.” In fact, without a showing of secondary meaning, we should
presume that petitioner’s business appears to the consuming public
to be just another anonymous, indistinguishable parking lot.
It is perfectly clear that the failure to include mere descriptiveness
among the grounds for challenging incontestability was based on the
understanding that such a mark would not be registered without a
showing of secondary meaning.
Because it would be demonstrably at odds with the intent of
Congress to grant incontestable status to a mark that was not eligible for registration in the ﬁrst place, the Court is surely authorized to
require compliance with § 2(f) before granting relief on the basis of §
33(b).

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A mark shall be deemed to be “abandoned” if either of the following
occurs:
(1) When its use has been discontinued with intent not to resume
such use. Intent not to resume may be inferred from circumstances. Nonuse for 3 consecutive years shall be prima facie evidence of abandonment. “Use” of a mark means the bona ﬁde
use of such mark made in the ordinary course of trade, and not
made merely to reserve a right in a mark.
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This is an action for trademark infringement, false designation of origin, unfair competition and trademark dilution. The plaintiﬀ, Procter & Gamble Co. (“P&G”), an Ohio corporation, is one of the country’s largest manufacturers of household and personal use products.
The defendants are Johnson & Johnson Incorporated (“J&J”) and its
wholly-owned subsidiary Personal Products Company (“PPC”). PPC

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is the leading manufacturer of women’s external menstrual protection products.
The defendants’ trademarks which are alleged to infringe rights of
the plaintiﬀ are “Assure!” as used on a woman’s menstrual tampon,
and “Sure & Natural”, as used on an external menstrual protection
shield. The plaintiﬀ’s marks alleged to be infringed are SURE for an
underarm anti-perspirant deodorant and for a woman’s tampon, and
ASSURE for a mouthwash and a shampoo.
SURE for tampons, since 1964, and ASSURE for mouthwash and
shampoo, since 1970, have been carried by P&G in its “minor brands
program”. The minor brands program is designed by P&G to establish and maintain ownership rights over trademarks which have not
been assigned by P&G to any commercially marketed product.
In 1974 P&G’s oﬃce of legal counsel circulated a memorandum
institutionalizing the procedures to be followed for this brand maintenance program. The memorandum was revised in 1976 and was
received in evidence at the trial. The memorandum begins by stating that the failure to use a trademark for two consecutive years may
result in its loss. “The Minor Brands Sales Program is intended”, it
states, “to rebut any such inference of abandonment and thus maintain the company’s ability to subsequently use the marks on goods in
question as major brands.” The memorandum directs that the trademark section of the legal division will annually prepare a list of every mark owned by the company. The list will be divided into three
categories, to be designated as Major Brand, Minor Brand and No
Value. A major brand is one which is currently marketed on a day
to day basis. “A ‘No Value’ mark is one in which there is no current
commercial interest . . . All others automatically fall into the Minor
Brand category.” The memorandum goes on to state that each year
the list will be reviewed with each division. “A diligent assessment
will be made each year to place any marks which are in the Minor
Brand category but which are unlikely to be selected for Major Brand
usage within a reasonable period of time into the No Value category
so as to keep Minor Brands to a minimum.” The memorandum further instructs that when the list of minor brands has been reviewed
each year, the trademark coordinator will pack 50 units of each product in the Minor Brand category and ship the 50 units to at least 10
states with a recommendation of alternation of states in succeeding
years so as to achieve wide distribution. The shipments are made to
normal customers for each type of product.
The evidence showed that the system functioned as follows. The
distribution of goods in the Minor Brands Program is not handled by
persons normally involved in P&G’s merchandising operation. Indeed few employees at any level of P&G are even aware of the minor
brands’ existence. In each division of the company, one employee is

$ 130$&%63&4

charged with the distribution of minor brands. This “Minor Brands
Coordinator” causes labels to be made and simple packages to be prepared for each minor brand. He then ships in accordance with the
standing wri en instructions from trademark counsel. For all items
in the Minor Brands Program regardless of size, cost or any other feature, the price billed is $2 per case.
As there are no products of P&G covered by these minor brands,
the coordinator takes some other P&G product in the brand category
to be shipped under the minor brand’s label. P&G’s Prell Shampoo is
bo led under 13 diﬀerent minor brand labels for annual shipment at
$2 a case. P&G’s Scope Mouthwash is bo led under 7 diﬀerent minor
brand labels for annual shipment. The situation as to tampons is particularly curious. Prior to 1974 when Rely was introduced, P&G had
no such product. Accordingly, it was the practice to buy the tampons
of other manufacturers and to repackage them under P&G’s various
minor brand tampon labels. PPC learned through documents produced at the trial that in the 1960’s, its own Modess tampons had
been purchased by P&G and repackaged and shipped under a “Sure”
Tampon label. In recent years for its minor brand tampons, P&G has
been purchasing and shipping Tampax. Although since 1974 P&G
has had a tampon product of its own, the Minor Brands Coordinator for the paper goods division has continued to ship Tampax rather
than P&G’s own product, apparently through oversight.
None of P&G’s catalogues, price lists or other published materials
make any reference to the minor brands. Indeed it appears that virtually none of P& G’s personnel is aware of their existence. No steps are
taken to see whether these goods are actually sold by the recipients
of the shipments. The only evidence received in the trial concerning
any such resale was to the eﬀect that once in 1977 the president of
PPC had seen some P&G minor brands including Sure Tampons on
the shelves of a store in Milwaukee and had bought a box.
P&G defends the validity of the Minor Brands Program on the
grounds that it is commercially necessary. It argues that the development of new brands is an enormously lengthy process; numerous products are under development at any one time; and it is very
hard to tell how soon a product under development will be ready for
market. The process of name selection and registration is also timeconsuming. If a product should become ready for market without
prior provision having been made for a name, the product could be
held up for quite some time while the name was being secured.
P&G has claimed rights to the Sure Tampon brand since 1964. Taking the facts in the light most favorable to P&G, the Sure Tampon
brand has resided in the Minor Brands Program for nearly 12 years,
with approximately 50 cases being shipped once a year. While there
may well be persons at P&G who would like to use the Sure name on

$)"15&3  53"%&."3,

a tampon to be marketed in the future, I ﬁnd it most unlikely that the
Sure name will be assigned to a tampon while P&G’s uses that name
on an anti-perspirant.
P&G has owned the ASSURE mark for shampoo and mouthwash
since 1970. The shampoo mark has been maintained as a minor brand
since 1970 bringing in total revenues of $491.30. The mouthwash
brand has been in the program for only three years bringing in total revenues of $161.50; apparently for the ﬁrst six years the ASSURE
mouth wash brand was not utilized at all. P&G has introduced a
new mouthwash and a shampoo into test markets without selecting
the name ASSURE.
Usage which is sporadic, nominal and intended solely for trademark maintenance is insuﬃcient to establish and maintain trademark
rights. Upon detailed review of all the pertinent facts, I have concluded that P&G does not own a protectable interest in the marks in
question. I ﬁnd that P&G has never put (these brands) on the market
in any meaningful way; indeed, it has given no indication (which I
would regard as convincing) that it has any current plans to do so.
Trademark rights are not created by sporadic, casual, and nominal
shipments of goods bearing a mark. There must a trade in the goods
sold under the mark or at least an active and public a empt to establish such a trade.
While P&G’s annual shipment of 50 cases for periods of nine to
twelve years may not be sporadic or casual, it is certainly nominal
and does not represent a bona ﬁde a empt to establish a trade in any
meaningful way. A trademark maintenance program obviously cannot in itself justify a minimal sales eﬀort, or the requirement of good
faith commercial use would be read out of trademark law altogether.
I recognize that P&G’s minor brands program might well be
legally eﬀective in other circumstances, as where a brand is reserved
in connection with reasonably well-formulated plans to use it on
a particular product under development, especially if the artiﬁcial
maintenance does not continue for an unreasonably long time. But
there must be a present intent to market the trademarked product.
P&G’s vague, remote and almost abstract intentions for the SURE
and ASSURE marks are not satisfactory. P&G’s personnel testiﬁed,
for example, as to each of its 13 minor shampoo brands (including
ASSURE), that it held a present intention to utilize them on a commercially marketed product. At present, P&G oﬀers only 3 shampoos
on the commercial market. While there are several shampoos under
development, I ﬁnd no ﬁrm intention to use ASSURE on any of these.
Intentions which are so vague and remote and so unlikely to come to
fruition within a reasonable near future are not suﬃcient to meet the
test.
I conclude that P&G owns no enforceable rights in SURE tampon

% */'3*/(&.&/5 $0/'64*0/

brand or in the ASSURE mark and that its action on behalf of those
interests must fail. P&G has failed to show that it established trademark rights through bona ﬁde commercial use.
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In 1984, to great local anger, the Baltimore Colts of the National Football League moved to Indianapolis. In 1993, a team in the Canadian
Football League proposed to play in Baltimore and to call itself the
“Baltimore CFL Colts.” The NFL Colts sued, and won an injunction
against the CFL Colts’ use of the name. Properly decided? Does it
ma er whether the NFL Colts were selling merchandise with the old
team name and insignia? If the defendants proposed instead to open
up a bar in Baltimore under the name The Baltimore Colt?

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Unlike in other areas of IP, it is not so easy to divide trademark infringement into ”similarity” and ”prohibited conduct.” The reason
is that trademark liability turns on consumer perceptions, and similarity of marks is only one factor going into what consumers believe.
Their familiarity with the plaintiﬀ and its trademark, the care they
take when shopping, and the similarity or diﬀerence between plaintiﬀ’s and defendant’s goods, are all among the factors that can determine whether consumers are confused when confronted with the
defendant’s trademark in an actual marketplace context.
Instead, it is more helpful to divide (direct) trademark infringement into the factual question of whether the defendant’s activities
create a likelihood of confusion among consumers, and the legal question of what kinds of confusion are legally actionable. The former
typically turns on multifactor balancing tests and empirical questions
about consumer perception. The later typically are stated as categorial rules that certain kinds of conduct can and cannot give rise to
liability. This approach preserves the standards-vs.-rules distinction
in breaking down infringement in other areas.
The paradigm theory of trademark confusion is point-of-sale confusion about the source of goods: at the moment the consumer hands
over her money, she thinks she’s ge ing the plaintiﬀ’s goods or services, but is actually receiving the defendant’s. So we begin by studying the standard multi-factor test for point-of-sale confusion about
source. Every circuit has its own list of factors; they diﬀer in the details but mostly ask the same questions.
The next section will take up other theories of confusion. For the
most part, we will not separately consider the multi-factor balancing
tests they employ. First, the tests are generally variations on the basic
test described in this section; ge ing into the details of the diﬀerences

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(1)

Any person who shall, without the consent of the registrant—
(a) use in commerce any reproduction, counterfeit, copy, or
colorable imitation of a registered mark in connection with
the sale, oﬀering for sale, distribution, or advertising of
any goods or services on or in connection with which such
use is likely to cause confusion, or to cause mistake, or to
deceive; or
(b) reproduce, counterfeit, copy, or colorably imitate a registered mark and apply such reproduction, counterfeit,
copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to
be used in commerce upon or in connection with the sale,
oﬀering for sale, distribution, or advertising of goods or
services on or in connection with which such use is likely
to cause confusion, or to cause mistake, or to deceive,
shall be liable in a civil action by the registrant for the remedies
hereinafter provided.

Note that while § 32 of the Lanham Act speaks of infringement of
registered marks, § 43 (discussed in more detail below) also gives a
federal cause of action for infringement of unregistered marks – and
both of them coexist with state-law causes of action for trademark
infringement. In practice, the tests for consumer confusion about
source based on the defendant’s use of a mark under all of these
causes of action are eﬀectively identical. The substantive and jurisdictional distinctions between state and federal causes of action are
discussed in the Preemption and Litigation chapters, respectively.
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Leval, Circuit Judge:
Plaintiﬀ Virgin Enterprises Limited (“VEL” or “plaintiﬀ”) appeals
from the denial of its motion for a preliminary injunction. This suit,
brought under § 32 of the Lanham Act, alleges that defendants infringed plaintiﬀ’s rights in the registered mark VIRGIN by operating

% */'3*/(&.&/5 $0/'64*0/

retail stores selling wireless telephones and related accessories and
services under the trade name VIRGIN WIRELESS. We ﬁnd that the
plaintiﬀ is likely to succeed on the merits and was entitled to a preliminary injunction.
B
Plaintiﬀ VEL, a corporation with its principal place of business in London, owns U.S. Registration No. 1,851,817 (“the 817 Registration”),
ﬁled on May 5, 1991, and registered on August 30, 1994, for the VIRGIN mark as applied to “retail store services in the ﬁelds of ... computers and electronic apparatus” (emphasis added). Plaintiﬀ ﬁled an
aﬃdavit of continuing use, pursuant to 15 U.S.C. § 1058(a), on April
27, 2000, which averred that plaintiﬀ had used the mark in connection
with retail store services selling computers and electronic apparatus.
Plaintiﬀ also owns U.S. Registration No. 1,852,776 (“the 776 Registration”), ﬁled on May 9, 1991, and registered on September 6, 1994,
for a stylized version of the VIRGIN mark for use in connection with
“retail store services in the ﬁelds of ... computers and electronic apparatus,” and U.S. Registration No. 1,863,353 (“the 353 Registration”),
ﬁled on May 19, 1992, and registered on November 15, 1994, for the
VIRGIN MEGASTORE mark. It is undisputed that these three registrations have become incontestable pursuant to 15 U.S.C. § 1065.
VEL, either directly or through corporate aﬃliates, operates various businesses worldwide under the trade name VIRGIN, including
an airline, large-scale record stores called Virgin Megastores, and an
internet information service. Plaintiﬀ or its aﬃliates also market a
variety of goods branded with the VIRGIN name, including music
recordings, computer games, books, and luggage. Three of plaintiﬀ’s megastores are located in the New York area. According to an
aﬃdavit submi ed to the district court in support of plaintiﬀ’s application for preliminary injunction, Virgin Megastores sell a variety
of electronic apparatus, including video game systems, portable CD
players, disposable cameras, and DVD players. These stores advertise in a variety of media, including radio.
Defendants Simon Bli and Daniel Gazal are the sole shareholders of defendants Cel-Net Communications, Inc. (“Cel-Net”); The
Cellular Network Communications, Inc., doing business as CNCG
(“CNCG”); and SD Telecommunications, Inc. (“SD Telecom”). Bli
and Gazal formed Cel-Net in 1993 to sell retail wireless telephones
and services in the New York area. Later, they formed CNCG to sell
wireless phones and services on the wholesale level. CNCG now sells
wireless phones and services to more than 400 independent wireless
retailers. In 1998, Cel-Net received permission from New York State
regulators to resell telephone services within the state.
Around 1999, Andrew Kastein, a vice-president of CNCG, began

$)"15&3  53"%&."3,

to develop a Cel-Net brand of wireless telecommunications products.
In early 1999, Cel-Net entered into negotiations with the Sprint PCS
network to provide telecommunications services for resale by CelNet. In August 1999, Cel-Net retained the law ﬁrm Pennie & Edmonds to determine the availability of possible service marks for CelNet. Pennie & Edmonds associate Elizabeth Langston researched
for Kastein a list of possible service marks; among the marks CelNet asked to have researched was VIRGIN. Defendants claim that
Langston told Cel-Net oﬃcer Simon Corney that VIRGIN was available for use in the telecommunications ﬁeld. Plaintiﬀ disputed this,
oﬀering an aﬃdavit from Langston that she informed defendants that
she would not search the VIRGIN mark because her ﬁrm represented
plaintiﬀ.
According to defendants, in December 1999, Cel-Net retained Corporate Solutions, LLC and its principals Nathan Erlich and Tahir
Nawab as joint venture partners to help raise capital to launch CelNet’s wireless telephone service. On December 2, 1999, Erlich and
Nawab ﬁled four intent-to-use applications with the U.S. Patent and
Trademark Oﬃce (“PTO”) to register the marks VIRGIN WIRELESS,
VIRGIN MOBILE, VIRGIN COMMUNICATIONS, and VIRGIN NET
in the ﬁeld of telecommunications services, class 38. On December
24, 1999, Corporate Solutions incorporated defendant Virgin Wireless, Inc. (“VWI”) and licensed to VWI the right to use the marks
VIRGIN WIRELESS and VIRGIN MOBILE. Meanwhile, one of plaintiﬀ’s aﬃliates had begun to oﬀer wireless telecommunication services
bearing the VIRGIN mark in the United Kingdom. A press release
dated November 19, 1999, found on plaintiﬀ’s website, stated that its
Virgin Mobile wireless services were operable in the United States.
On June 23, 2000, defendant Bli signed a lease under the name
Virgin Wireless for a kiosk location in South Shore Mall in Long Island from which to re-sell AT&T wireless services, telephones, and
accessories under the retail name Virgin Wireless. Defendants CelNet and VWI later expanded their telecommunications re-sale operations to include two retail stores and four additional retail kiosks in
malls in the New York area and in Pennsylvania. All of these stores
have been run by VWI under the trade name VIRGIN WIRELESS.
VWI also has leases and bank accounts in its name, and has shown
evidence of actual retail transactions and newspaper advertisements.
In August 2000, plaintiﬀ licensed Virgin Mobile USA, LLC, to
use the VIRGIN mark for wireless telecommunications services in
the United States. On August 10, 2000, plaintiﬀ ﬁled an intent-touse application with the PTO for use of the VIRGIN mark in the
United States on telecommunications services and mobile telephones.
On October 11, 2001, the PTO suspended this mark’s registration
in international class 9, which covers wireless telephones, and class

% */'3*/(&.&/5 $0/'64*0/

38, which covers telecommunications services, because the VIRGIN
mark was already reserved by a prior ﬁling, presumably defendants’.
On August 16, 2001, plaintiﬀ ﬁled another intent-to-use application
for the mark VIRGIN MOBILE to brand telecommunications services.
The PTO issued a non-ﬁnal action le er for both of plaintiﬀ’s pending
new registrations on October 31, 2001, which stated that defendant
Corporation Solutions’ pending applications for similar marks in the
same class could give rise to “a likelihood of confusion.” The PTO
suspended action on plaintiﬀ’s application pending the processing
of Corporation Solutions’ applications.
In October 2001, plaintiﬀ issued a press release announcing that
it was oﬀering wireless telecommunications services and mobile telephones in the United States.
Plaintiﬀ became aware of Corporation Solutions’ application for
registration of the VIRGIN WIRELESS and VIRGIN MOBILE marks
by May 2000. In October 2001 and December 2001, defendant VWI
ﬁled suits against plaintiﬀ in the federal district courts in Arizona
and Delaware, alleging that plaintiﬀ was using VWI’s mark. Plaintiﬀ maintains (and the district court found) that it learned in January
2002 that VWI and Cel-Net were operating kiosks under the VIRGIN
WIRELESS name and two days later ﬁled the present suit seeking to
enjoin defendants from selling mobile phones in VIRGIN-branded
retail stores.
D
We believe the district court accorded plaintiﬀ too narrow a scope
of protection for its famous, arbitrary, and distinctive mark. There
could be no dispute that plaintiﬀ prevailed as to the ﬁrst prong of
the test – prior use and ownership. For years, plaintiﬀ had used the
VIRGIN mark on huge, famous stores selling, in addition to music
recordings, a variety of consumer electronic equipment. At the time
the defendants began using VIRGIN, plaintiﬀ owned rights in the
mark. The focus of inquiry thus turns to the second prong of the
test – whether defendants’ use of VIRGIN as a mark for stores selling
wireless telephone services and phones was likely to cause confusion.
There can be li le doubt that such confusion was likely.
The landmark case of Polaroid Corp. v. Polarad Electronics Corp.,
outlined a series of nonexclusive factors likely to be pertinent in addressing the issue of likelihood of confusion, which are routinely followed in such cases.
Six of the Polaroid factors relate directly to the likelihood of consumer confusion. These are the strength of the plaintiﬀ’s mark; the
similarity of defendants’ mark to plaintiﬀ’s; the proximity of the
products sold under defendants’ mark to those sold under plaintiﬀ’s;
where the products are diﬀerent, the likelihood that plaintiﬀ will

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bridge the gap by selling the products being sold by defendants; the
existence of actual confusion among consumers; and the sophistication of consumers. Of these six, all but the last (which was found by
the district court to be neutral) strongly favor the plaintiﬀ. The remaining two Polaroid factors, defendants’ good or bad faith and the
quality of defendants’ products, are more pertinent to issues other
than likelihood of confusion, such as harm to plaintiﬀ’s reputation
and choice of remedy. We conclude that the Polaroid factors powerfully support plaintiﬀ’s position.
Strength of the mark. The strength of a trademark encompasses
two diﬀerent concepts, both of which relate signiﬁcantly to likelihood of consumer confusion. The ﬁrst and most important is inherent strength, also called “inherent distinctiveness.” This inquiry distinguishes between, on the one hand, inherently distinctive marks –
marks that are arbitrary or fanciful in relation to the products (or services) on which they are used – and, on the other hand, marks that
are generic, descriptive or suggestive as to those goods. The former
are the strong marks. The second sense of the concept of strength of
a mark is “acquired distinctiveness,” i.e., fame, or the extent to which
prominent use of the mark in commerce has resulted in a high degree
of consumer recognition.
Considering ﬁrst inherent distinctiveness, the law accords broad,
muscular protection to marks that are arbitrary or fanciful in relation to the products on which they are used, and lesser protection,
or no protection at all, to marks consisting of words that identify or
describe the goods or their a ributes. The reasons for the distinction
arise from two aspects of market eﬃciency. The paramount objective
of the trademark law is to avoid confusion in the marketplace. The
purpose for which the trademark law accords merchants the exclusive right to the use of a name or symbol in their area or commerce is
identiﬁcation, so that the merchants can establish goodwill for their
goods based on past satisfactory performance, and the consuming
public can rely on a mark as a guarantee that the goods or services so
marked come from the merchant who has been found to be satisfactory in the past. At the same time, eﬃciency and the public interest
require that every merchant trading in a class of goods be permi ed
to refer to the goods by their name, and to make claims about their
quality. Thus, a merchant who sells pencils under the trademark Pencil or Clear Mark, for example, and seeks to exclude other sellers of
pencils from using those words in their trade, is seeking an advantage
the trademark law does not intend to oﬀer. To grant such exclusivity would deprive the consuming public of the useful market information it receives where every seller of pencils is free to call them
pencils. The trademark right does not protect the exclusive right to
an advertising message – only the exclusive right to an identiﬁer, to

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protect against confusion in the marketplace. Thus, as a ma er of
policy, the trademark law accords broader protection to marks that
serve exclusively as identiﬁers and lesser protection where a grant of
exclusiveness would tend to diminish the access of others to the full
range of discourse relating to their goods.
The second aspect of eﬃciency that justiﬁes according broader
protection to marks that are inherently distinctive relates directly to
the likelihood of confusion. If a mark is arbitrary or fanciful, and
makes no reference to the nature of the goods it designates, consumers who see the mark on diﬀerent objects oﬀered in the marketplace will be likely to assume, because of the arbitrariness of the
choice of mark, that they all come from the same source. For example, if consumers become familiar with a toothpaste sold under an unusual, arbitrary brand name, such as ZzaaqQ, and later see that same
inherently distinctive brand name appearing on a diﬀerent product,
they are likely to assume, notwithstanding the product diﬀerence,
that the second product comes from the same producer as the ﬁrst.
The more unusual, arbitrary, and fanciful a trade name, the more unlikely it is that two independent entities would have chosen it. In contrast, every seller of foods has an interest in calling its product “delicious.” Consumers who see the word delicious used on two or more
diﬀerent food products are less likely to draw the inference that they
must all come from the same producer. In short, the more distinctive
the mark, the greater the likelihood that the public, seeing it used a
second time, will assume that the second use comes from the same
source as the ﬁrst. The goal of avoiding consumer confusion thus
dictates that the inherently distinctive, arbitrary, or fanciful marks,
i.e., strong marks, receive broader protection than weak marks, those
that are descriptive or suggestive of the products on which they are
used.
The second sense of trademark strength, fame, or “acquired distinctiveness,” also bears on consumer confusion. If a mark has been
long, prominently and notoriously used in commerce, there is a
high likelihood that consumers will recognize it from its prior use.
Widespread consumer recognition of a mark previously used in commerce increases the likelihood that consumers will assume it identiﬁes the previously familiar user, and therefore increases the likelihood of consumer confusion if the new user is in fact not related to
the ﬁrst. A mark’s fame also gives unscrupulous traders an incentive to seek to create consumer confusion by associating themselves
in consumers’ minds with a famous mark. The added likelihood of
consumer confusion resulting from a second user’s use of a famous
mark gives reason for according such a famous mark a broader scope
of protection, at least when it is also inherently distinctive.
Plaintiﬀ’s VIRGIN mark undoubtedly scored high on both con-

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cepts of strength. In relation to the sale of consumer electronic equipment, the VIRGIN mark is inherently distinctive, in that it is arbitrary
and fanciful; the word “virgin” has no intrinsic relationship whatsoever to selling such equipment. Because there is no intrinsic reason
for a merchant to use the word “virgin” in the sale of consumer electronic equipment, a consumer seeing VIRGIN used in two diﬀerent
stores selling such equipment will likely assume that the stores are
related.
Plaintiﬀ’s VIRGIN mark was also famous. The mark had been
employed with world-wide recognition as the mark of an airline and
as the mark for megastores selling music recordings and consumer
electronic equipment. The fame of the mark increased the likelihood
that consumers seeing defendants’ shops selling telephones under
the mark VIRGIN would assume incorrectly that defendants’ shops
were a part of plaintiﬀ’s organization.
There can be no doubt that plaintiﬀ’s VIRGIN mark, as used on
consumer electronic equipment, is a strong mark, as the district court
found. It is entitled as such to a broad scope of protection, precisely
because the use of the mark by others in connection with stores selling
reasonably closely related merchandise would inevitably have a high
likelihood of causing consumer confusion.
Similarity of marks. When the secondary user’s mark is not identical but merely similar to the plaintiﬀ’s mark, it is important to assess
the degree of similarity between them in assessing the likelihood that
consumers will be confused. Plaintiﬀ’s and defendants’ marks were
not merely similar; they were identical to the extent that both consisted of the same word, “virgin.”
The district court believed this factor did not favor plaintiﬀ because it found some diﬀerences in appearance. Defendants’ logo
used a diﬀerence typeface and diﬀerent colors from plaintiﬀ’s. While
those are indeed diﬀerences, they are quite minor in relation to the
fact that the name being used as a trademark was the same in each
case.
Advertisement and consumer experience of a mark do not necessarily transmit all of the mark’s features. Plaintiﬀ, for example, advertised its Virgin Megastores on the radio. A consumer who heard
those advertisements and then saw the defendants’ installation using
the name VIRGIN would have no way of knowing that the two trademarks looked diﬀerent. A consumer who had visited one of plaintiﬀ’s Virgin Megastores and remembered the name would not necessarily remember the typeface and color of plaintiﬀ’s mark. The reputation of a mark also spreads by word of mouth among consumers.
One consumer who hears from others about their experience with
Virgin stores and then encounters defendants’ Virgin store will have
no way knowing of the diﬀerences in typeface.

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In view of the fact that defendants used the same name as plaintiﬀ,
we conclude the defendants’ mark was suﬃciently similar to plaintiﬀ’s to increase the likelihood of confusion. This factor favored the
plaintiﬀ as a ma er of law. We conclude that the district court erred
in concluding otherwise on the basis of comparatively trivial and often irrelevant diﬀerences.
Proximity of the products and likelihood of bridging the gap. The next
factor is the proximity of the products being sold by plaintiﬀ and defendant under identical (or similar) marks. This factor has an obvious
bearing on the likelihood of confusion. When the two users of a mark
are operating in completely diﬀerent areas of commerce, consumers
are less likely to assume that their similarly branded products come
from the same source. In contrast, the closer the secondary user’s
goods are to those the consumer has seen marketed under the prior
user’s brand, the more likely that the consumer will mistakenly assume a common source.
While plaintiﬀ had not sold telephones or telephone service prior
to defendant’s registration evincing intent to sell those items, plaintiﬀ
had sold quite similar items of consumer electronic equipment. These
included computer video game systems, portable casse e-tape players, compact disc players, MP3 players, mini-disc players, and disposable cameras. Like telephones, many of these are small consumer
electronic gadgets making use of computerized audio communication. They are sold in the same channels of commerce. Consumers
would have a high expectation of ﬁnding telephones, portable CD
players, and computerized video game systems in the same stores.
We think the proximity in commerce of telephones to CD players substantially advanced the risk that consumer confusion would occur
when both were sold by diﬀerent merchants under the same trade
name, VIRGIN.
Our classic Polaroid test further protects a trademark owner by
examining the likelihood that, even if the plaintiﬀ’s products were
not so close to the defendants’ when the defendant began to market
them, there was already a likelihood that plaintiﬀ would in the reasonably near future begin selling those products. VEL’s claim of proximity was further strengthened in this regard because, as the district
court expressly found, “plans had been formulated [for VEL] to enter
[the market for telecommunications products and services] shortly in
the future.” VEL had already begun marketing telephone service in
England which would operate in the United States, and, as the district court found, had made plans to sell telephones and wireless telephone service under the VIRGIN name from its retail stores.
The district court, nonetheless, found in favor of the defendants
with respect to the proximity of products and services. We would ordinarily give considerable deference to a factual ﬁnding on this issue.

$)"15&3  53"%&."3,

Here, however, we cannot do so because it appears the district court
applied the wrong test. The court did not assess the proximity of defendants’ VIRGIN-branded retail stores selling telephone products to
plaintiﬀ’s VIRGIN-branded retail stores selling other consumer electronic products. It simply concluded that, because defendants were
selling exclusively telephone products and services, and plaintiﬀ’s
electronic products did not include telephones or related services, the
defendants must prevail as to the proximity factor.
This represents a considerable misunderstanding of the Polaroid
test. The famous list of factors of likely pertinence in assessing likelihood of confusion in Polaroid was specially designed for a case like
this one, in which the secondary user is not in direct competition with
the prior user, but is selling a somewhat diﬀerent product or service.
In Polaroid, the plaintiﬀ sold optical and camera equipment, while
the defendant sold electronic apparatus. The test the court discussed
was expressly addressed to the problem “how far a valid trademark
shall be protected with respect to goods other than those to which its
owner has applied it.” 287 F.2d at 495 (emphasis added). The very
fact that the test includes the “proximity” between the defendant’s
products and the plaintiﬀ’s and the likelihood that the plaintiﬀ will
“bridge the gap” makes clear that the trademark owner does not lose,
as the district court concluded, merely because it has not previously
sold the precise good or service sold by the secondary user.
In our view, had the district court employed the proper test of
proximity, it could not have failed to ﬁnd a high degree of proximity
as between plaintiﬀ VEL’s prior sales of consumer electronic audio
equipment and defendants’ subsequent sales of telephones and telephone services, which proximity would certainly contribute to likelihood of consumer confusion. And plaintiﬀ was all the more entitled
to a ﬁnding in its favor in respect of these ma ers by virtue of the fact,
which the district court did ﬁnd, that at the time defendants began using the VIRGIN mark in the retail sale of telephones and telephone
services, plaintiﬀ already had plans to bridge the gap by expanding
its sales of consumer electronic equipment to include sales of those
very goods and services in the near future. Consumer confusion was
more than likely; it was virtually inevitable.
Actual confusion. It is self-evident that the existence of actual consumer confusion indicates a likelihood of consumer confusion. We
have therefore deemed evidence of actual confusion “particularly relevant” to the inquiry.
Plaintiﬀ submi ed to the district court an aﬃdavit of a former employee of defendant Cel-Net, who worked at a mall kiosk branded as
Virgin Wireless, which stated that individuals used to ask him if the
kiosk was aﬃliated with plaintiﬀ’s VIRGIN stores. The district court
correctly concluded that this evidence weighed in plaintiﬀ’s favor.

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Sophistication of consumers. The degree of sophistication of consumers can have an important bearing on likelihood of confusion.
Where the purchasers of a products are highly trained professionals,
they know the market and are less likely than untrained consumers
to be misled or confused by the similarity of diﬀerent marks. The
district court recognized that “[r]etail customers, such as the ones
catered to by both the defendants and [plaintiﬀ], are not expected
to exercise the same degree of care as professional buyers, who are
expected to have greater powers of discrimination.” On the other
hand, it observed that purchasers of cellular telephones and the service plans were likely to give greater care than self-service customers
in a supermarket. Noting that neither side had submi ed evidence
on the sophistication of consumers, the court made no ﬁnding favoring either side. We agree that the sophistication factor is neutral in
this case.
Bad faith and the quality of the defendants’ services or products. Two
factors remain of the conventional Polaroid test: the existence of bad
faith on the part of the secondary user and the quality of the secondary user’s products or services. Neither factor is of high relevance
to the issue of likelihood of confusion. A ﬁnding that a party acted
in bad faith can aﬀect the court’s choice of remedy or can tip the balance where questions are close. It does not bear directly on whether
consumers are likely to be confused. The district court noted some evidence of bad faith on the defendants’ part, but because the evidence
on the issue was scant and equivocal, the court concluded that such
a ﬁnding “at this stage [would be] speculative.” The court therefore
found that this factor favored neither party.
The issue of the quality of the secondary user’s product goes more
to the harm that confusion can cause the plaintiﬀ’s mark and reputation than to the likelihood of confusion. In any event, the district
court found this factor to be “neutral” with respect to likelihood of
confusion.
******
In summary we conclude that of the six Polaroid factors that pertain directly to the likelihood of consumer confusion, all but one favor
the plaintiﬀ, and that one – sophistication of consumers – is neutral.
The plaintiﬀ is strongly favored by the strength of its mark, both inherent and acquired; the similarity of the marks; the proximity of the
products and services; the likelihood that plaintiﬀ would bridge the
gap; and the existence of actual confusion. None of the factors favors
the defendant. The remaining factors were found to be neutral. Although we do not suggest that likelihood of confusion may be properly determined simply by the number of factors in one party’s favor,

$)"15&3  53"%&."3,

the overall assessment in this case in our view admits only of a ﬁnding
in plaintiﬀ’s favor that defendants’ sale of telephones and telephonerelated services under the VIRGIN mark was likely to cause substantial consumer confusion.
We conclude that, as a ma er of law, plaintiﬀ demonstrated irreparable harm and likelihood of success on the merits and was entitled to a preliminary injunction.

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Sally Beauty Co., Inc. (“Sally Beauty”) and Marianna Imports, Inc.
(“Marianna”), collectively “Plaintiﬀs,” sued Beautyco, Inc. (“Beautyco”) for trademark infringement, trade dress infringement, and
false advertising. Beautyco markets a line of hair care products under the trade name GENERIX, which the Plaintiﬀs claim infringes the
trademark and trade dress of their competing line of hair care products called Generic Value Products.
The degree of similarity between marks rests on sight, sound, and
meaning. This court must determine whether the allegedly infringing mark will confuse the public when singly presented, rather than
when presented side by side with the protected trademark. In so doing, similarities are weighed more heavily than diﬀerences, particularly when the competing marks are used in virtually identical products packaged in a similar manner.
The district court concluded that the similarity of marks weighed
in favor of Marianna. “Generic Value Products,” however, is not visually similar to “GENERIX.” Marianna’s mark consists of three words,
while Beautyco’s consists of only one. Although both marks begin
with the same six le ers, this similarity is not enough to outweigh
the visual diﬀerences in the marks.
The sound of the marks is also diﬀerent. “Generic Value Products”
does not sound similar to “GENERIX.” In considering this subfactor,
the district court erred by shortening “Generic Value Products” to
simply “Generic” in comparing aural similarities between the marks.
The district court cited no authority which would permit the shortening of the trademark for the likelihood of confusion analysis. Marianna relies on Giant Food, Inc. v. Nation’s Foodservice, Inc., in support, but that case involved marks consisting of pictorial designs with
clearly dominant visual elements. In this case, however, the Generic
Value Products mark consists of words alone and no one word takes
precedence over the others.
In contrast, the meanings of “Generic Value Products” and
“GENERIX” are similar. Although “GENERIX” has no inherent
meaning, Beautyco admits in its motion for summary judgment that
the use of the word is obviously intended to convey the idea that its

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product is inexpensive. Beautyco further concedes that Sally Beauty’s
use of “Generic” conveys the same idea. Taken as a whole, Generic
Value Products conveys the same meaning as GENERIX.
On balance, the similarity in meaning between the marks favors
Marianna, but the diﬀerences in both sight and sound favor Beautyco. Although similarities are to be weighed more heavily than differences, the diﬀerences in this case are signiﬁcant enough to lead us
to conclude that this factor weighs in favor of Beautyco.
$IFBU 4IFFU 1SPCMFN
Barton Beebe, An Empirical Study of the Multifactor Tests for Trademark
Infringement, 94 C . L. R . 1581 (2006) reports on an empirical
study of 331 litigated trademark cases and concludes that the factors
do not have equal importance. According to Beebe, the following
ﬂowchart correctly decides every case in the sample set:
• Are the marks similar? If NO, then the defendant wins.
• Did the defendant act in bad faith? If YES, then the plaintiﬀ
wins.
• Was there actual confusion? If YES, then the plaintiﬀ wins.
• Were the goods proximate? If NO, then the defendant wins.
• Is the plaintiﬀ’s mark strong? If YES, then the plaintiﬀ wins; if
NO, then the defendant wins.
How should Professor Beebe’s ﬁndings inﬂuence our thinking about
trademark infringement? Should it change how lawyers argue cases,
how judges decide them, or how we study them in class?
#PBUT 1SPCMFN
Following are the facts as stated in AMF Inc. v. Sleekcraft Boats. Assuming a jury verdict in favor of the plaintiﬀ on a claim of trademark
infringement at trial, how should the court rule on the defendant’s
motion for judgment notwithstanding the verdict?

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AMF and appellee Nescher both manufacture recreational
boats. AMF uses the mark Slickcraft, and Nescher uses
Sleekcraft.
AMF’s predecessor used the name Slickcraft Boat Company from 1954 to 1969 when it became a division of AMF.
The mark SLICKCRAFT was federally registered on April
1, 1969, and has been continuously used since then as a
trademark for this line of recreational boats.
Slickcraft boats are distributed and advertised nationally.
AMF has authorized over one hundred retail outlets to
sell the Slickcraft line. For the years 1966-1974, promotional expenditures for the Slickcraft line averaged ap-

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proximately $ 200,000 annually. Gross sales for the same
period approached $ 50,000,000.
After several years in the boat-building business, appellee
Nescher organized a sole proprietorship, Nescher Boats,
in 1962. This venture failed in 1967. In late 1968 Nescher
began anew and adopted the name Sleekcraft. Since then
Sleekcraft has been the Nescher trademark. The name
Sleekcraft was selected without knowledge of appellant’s
use. After AMF notiﬁed him of the alleged trademark infringement, Nescher adopted a distinctive logo and added
the identifying phrase “Boats by Nescher” on plaques afﬁxed to the boat and in much of its advertising. The
Sleekcraft mark still appears alone on some of appellee’s
stationery, signs, trucks, and advertisements..
The Sleekcraft venture succeeded. Expenditures for promotion increased from $ 6,800 in 1970 to $ 126,000 in 1974.
Gross sales rose from $ 331,000 in 1970 to over $ 6,000,000
in 1975. Like AMF, Nescher sells his boats through authorized local dealers.

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Slickcraft boats are advertised primarily in magazines of
general circulation. Nescher advertises primarily in publications for boat racing enthusiasts. Both parties exhibit
their product line at boat shows, sometimes the same
show

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Appeal by Plaintiﬀ Rescuecom Corp. from a judgment of the United
States District Court for the Northern District of New York (Mordue,
Chief Judge) 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,

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15 U.S.C. § 1127. We believe this misunderstood the holding of 1800. 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.
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. The second way Google
responds to a search request is by showing context-based advertising.
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

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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 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. This practice allegedly
allows Rescuecom’s competitors to deceive and divert users searching for Rescuecom’s website.
DISCUSSION
Our court ruled in 1-800 that a complaint fails to state a claim under
the Lanham Act unless it alleges that the defendant has made ”use

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in commerce” of the plaintiﬀ’s trademark as the term ”use in commerce” is deﬁned in 15 U.S.C. § 1127. 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 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 unpermi ed ”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

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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.
The defendant’s program relied upon categorical associations such as
”eye care” to select a pop-up ad randomly from a predeﬁned list of
ads appropriate to that category. To the extent that an advertisement
for a competitor of the plaintiﬀ was displayed when a user opened
the plaintiﬀ’s website, the trigger to display the ad was not based on
the defendant’s sale or recommendation of a particular trademark.
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 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, 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. See, e.g., S&L Vitamins, Inc.
v. Australian Gold, Inc. (holding that use of a trademark in metadata
did not constitute trademark use within the meaning of the Lanham
Act because the use ”is strictly internal and not communicated to the
public”); Merck & Co., Inc. v. Mediplan Health Consulting, Inc. (holding
that the internal use of a keyword to trigger advertisements did not
qualify as trademark use). 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,

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

Google’s recommendation and sale of Rescuecom’s mark to its advertising customers are not internal uses. 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 ma er 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.4 This is surely neither within
the intention nor the le er 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 go en
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.”
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. We have no idea whether Rescuecom can prove
that Google’s use of Rescuecom’s trademark in its AdWords program
4

For example, instead of having a separate ”sponsored links” or paid advertisement section, search engines could allow advertisers to pay to appear at the top of
the ”relevance” list based on a user entering a competitor’s trademark – a functionality that would be highly likely to cause consumer confusion. Alternatively, sellers
of products or services could pay to have the operators of search engines automatically divert users to their website when the users enter a competitor’s trademark as
a search term. Such conduct is surely not beyond judicial review merely because it
is engineered through the internal workings of a computer program.

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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. Whether Google’s actual practice is in fact
benign or confusing is not for us to judge at this time. We consider at
the 12(b)(6) stage only what is alleged in the Complaint.
We conclude that the district court was mistaken in believing that
our precedent in 1-800 requires dismissal.
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The Radiance Foundation published an article online entitled
”NAACP: National Association for the Abortion of Colored People”
that criticized the NAACP’s stance on abortion. In response to a
cease-and-desist le er from the NAACP, Radiance sought a declaratory judgment that it had not infringed any NAACP trademarks. The
NAACP then ﬁled counterclaims alleging trademark infringement
and dilution.
The National Association for the Advancement of Colored People,
be er known by its acronym ”NAACP,” is this country’s oldest and
largest civil rights organization, and one that holds a place of honor
in our history. It champions political, educational, social, and economic equality of all citizens while working to eliminate racial and
other forms of prejudice within the United States. The NAACP owns
several trademarks, among them NAACP (federally registered) and
NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE.
The Radiance Foundation, established by Ryan Bomberger, is
also a non-proﬁt organization focused on educating and inﬂuencing the public about issues impacting the African American community. Radiance addresses social issues from a Christian perspective.
It uses as its platform two websites, TheRadianceFoundation.org and
TooManyAborted.com, where it posts articles on topics such as race
relations, diversity, fatherlessness, and the impact of abortion on
the black community. Radiance also runs a billboard campaign for
TooManyAborted.com; individuals may sponsor these billboards, licensing the artwork from Radiance. In addition to its billboard campaign, Radiance funds its endeavors through donations from visitors
to its websites, which are facilitated by ”Donate” bu ons on the webpages that link to a PayPal site.
In January 2013, Bomberger authored an article criticizing the
NAACP’s annual Image Awards, entitled ”NAACP: National Association for the Abortion of Colored People.” The piece lambasted the

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NAACP for sponsoring an awards event to recognize Hollywood ﬁgures and products that Radiance alleged deﬁed Christian values and
perpetuated racist stereotypes. The article then criticized other of
the NAACP’s public stances and actions. It particularly targeted the
NAACP’s ties to Planned Parenthood and its position on abortion.
Though the NAACP has often claimed to be neutral on abortion, Radiance maintains that the NAACP’s actions actually demonstrate support for the practice.
The article appeared on three websites: the two owned by Radiance – TheRadianceFoundation.com and TooManyAborted.com –
and a third-party site called Life-News.com. Though the text of the
article was identical across the sites, the headlines and presentation
varied slightly. On TheRadianceFoundation.com, directly below the
headline was an image of a Too-ManyAborted billboard with the
headline ”NAACP: National Association for the Abortion of Colored
People” repeated next to it. The TooManyAborted.com site posted
the headline ”The National Association for the Abortion of Colored
People” with a graphic below of a red box with the words ”CIVIL
WRONG” followed by the modiﬁed NAACP name. Adjacent to
the article on both pages was an orange bu on with ”CLICK HERE
TO GIVE ONE-TIME GIFT TO THE RADIANCE FOUNDATION”
printed around the word ”DONATE.” Finally on LifeNews.com, the
third-party site, the NAACP’s Scales of Justice appeared as a graphic
underneath the headline.
II.
The ﬁrst element of trademark infringement at issue is thus whether
Radiance’s use of the NAACP’s marks was ”in connection with the
sale, oﬀering for sale, distribution, or advertising of any goods or
services.”. The NAACP urges us to give this requirement a ”broad
construction,” but that construction would expose to liability a wide
array of noncommercial expressive and charitable activities. Such
an interpretation would push the Lanham Act close against a First
Amendment wall, which is incompatible with the statute’s purpose
and stretches the text beyond its breaking point. We decline to reach
so far.
At least ﬁve of our sister circuits have interpreted this element
as protecting from liability all noncommercial uses of marks. At the
very least, reading the ”in connection with” element to take in broad
swaths of noncommercial speech would be an overextension of the
Lanham Act’s reach that would intrude on First Amendment values.
It is true that neither of the Lanham Act’s infringement provisions
explicitly mentions commerciality. Still, this provision must mean
something more than that the mark is being used in commerce in the
constitutional sense, because the infringement provisions include a

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separate Commerce Clause hook.
Although this case does not require us to hold that the commercial
speech doctrine is in all respects synonymous with the ”in connection
with” element, we think that doctrine provides much the best guidance in applying the Act.
Use of a protected mark as part of speech that does no more than
propose a commercial transaction thus plainly falls within the Lanham Act’s reach. Courts also look to the factors outlined in Bolger
v. Youngs Drug Products Corp.: whether the speech is an advertisement; whether the speech references a particular good or service; and
whether the speaker (the alleged infringer) has a demonstrated economic motivation for his speech.
In the context of trademark infringement, the Act’s purpose, as
noted, is to protect consumers from misleading uses of marks by competitors. Thus if in the context of a sale, distribution, or advertisement, a mark is used as a source identiﬁer, we can conﬁdently state
that the use is ”in connection with” the activity. Even the Second
Circuit, which rejected noncommerciality as an invariable defense to
Lanham Act liability, conceded that a ”crucial” factor is that the infringer ”used the Mark not as a commentary on its owner, but instead
as a source identiﬁer.” United We Stand Am., Inc. v. United We Stand,
Am. New York, Inc.. The danger of allowing the ”in connection with”
element to suck in speech on political and social issues through some
strained or tangential association with a commercial or transactional
activity should thus be evident. Courts have uniformly understood
that imposing liability under the Lanham Act for such speech is rife
with the First Amendment problems.
III.
In ﬁnding that Radiance’s use of the NAACP’s marks was ”in connection with” goods or services, the district court erred in several respects. To begin, the court held that because the Radiance article appeared in a Google search for the term ”NAACP,” it diverted ”Internet users to Radiance’s article as opposed to the NAACP’s websites,”
which thereby created a connection to the NAACP’s goods and services. But typically the use of the mark has to be in connection with
the infringer’s goods or services, not the trademark holder’s.
The district court proceeded to ﬁnd that Radiance’s use of the
NAACP’s marks was also in connection with Radiance’s goods or
services. The court ﬁrst found that there was a suﬃcient nexus ”with
Radiance’s own information services” because Radiance ”provided
information” on its website. That ruling, however, neuters the First
Amendment. The provision of mere ”information services” without any commercial or transactional component is speech – nothing
more.

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In the alternative, the court held that Radiance’s use of the
NAACP’s marks was in connection with goods or services, because
the use was ”part of social commentary or criticism for which they
solicit donations and sponsorship.” We need not address this point
with absolute pronouncements. Suﬃce it to say that the speciﬁc use
of the marks at issue here was too a enuated from the donation solicitation and the billboard campaign to support Lanham Act liability.
Although present on the article page, the Donate bu on was oﬀ to
the side and did not itself use the NAACP’s marks in any way. The
billboard campaign was displayed on a diﬀerent page altogether. A
visitor likely would not perceive the use of the NAACP’s marks in the
article as being in connection with those transactional components of
the website.
Again, this is not to say that in all instances a solicitation by a nonproﬁt is immune from Lanham Act liability. A solicitation may satisfy the ”in connection with” element if the trademark holder demonstrates a suﬃcient nexus between the unauthorized use of the protected mark and clear transactional activity. Such a nexus may be
present, for example, where the protected mark seems to denote the
recipient of the donation. However, where, as here, the solicitations
are not closely related to the speciﬁc uses of the protected marks, we
are compelled to conclude that the district court erred in ruling that
the ”in connection element” was met.
IV.
The district court further held that Radiance diluted the ”NAACP”
and ”National Association for the Advancement of Colored People”
trademarks by tarnishing them. We respectfully disagree. Radiance’s
use of the marks was undeniably to criticize the NAACP’s perceived
position on abortion, thus falling squarely within the statute’s explicit
exclusions.
The ﬁnal exclusion protects ”[a]ny noncommercial use of a mark.”.
The term ”noncommercial” refers to the First Amendment commercial speech doctrine. Commercial speech is speech that does no more
than propose a commercial transaction.
The district court held that because Radiance ”oﬀered various opportunities for visitors to donate to Radiance, pay to sponsor billboards, secure license content, or erect state-speciﬁc webpages for
a fee,” the use of the NAACP’s marks was commercial. We think
however, that the above [Bolger] factors mitigate against a ﬁnding of
commerciality. The article in contention was not an advertisement.
Nowhere in the piece did it oﬀer the reader anything for sale. The
article did not even mention Radiance’s services. The only point ”Radiance” even appeared in the article was as part of a passing reference to conservatives that the NAACP purportedly targets. The fact

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that the websites provided opportunities to engage in ﬁnancial transactions does not demonstrate that the article itself was commercial.
The key here is the viewpoint of a reasonable reader. A person navigating to the article, even if through a Google search for ”NAACP,”
is highly unlikely to read the article as advertising a Radiance service
or proposing a transaction of any kind.
Trademark law in general and dilution in particular are not
proper vehicles for comba ing speech with which one does not agree.
Trademarks do not give their holders under the rubric of dilution the
rights to stymie criticism. Criticism of large and powerful entities in
particular is vital to the democratic function. Under appellee’s view,
many social commentators and websites would ﬁnd themselves victims of litigation aimed at silencing or altering their message, because,
as noted, ”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.” New Kids on the Block
The article in this case was harsh. But that did not forfeit its author’s
First Amendment liberties. The most scathing speech and the most
disputable commentary are also the ones most likely to draw their intended targets’ ire and thereby a ract Lanham Act litigation. It is for
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Now we begin in earnest our safari to observe exotic forms of liability
in their natural habitat. We have already met point-of-sale confusion
about source.
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Standard (”forward”) confusion involves consumers confused into
thinking that the defendant’s goods came from the plaintiﬀ. But
what if consumers are confused into thinking that the plaintiﬀ ’s goods
came from the defendant? How could that even happen? Read on.
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f. Reverse confusion. – In the typical case of trademark infringement,
consumers are led to believe that the goods sold by the subsequent
user of the mark are associated in some manner with the trademark
owner. However, in some cases the subsequent user’s promotion of
the mark may so overwhelm the use by the prior user that most purchasers come to associate the mark with the subsequent user. This
can result in reverse confusion – purchasers are likely to believe that
the goods sold by the prior user are actually those of the subsequent
user.

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The injury to the trademark owner caused by a likelihood of reverse confusion is more subtle than that resulting from direct confusion. Reverse confusion does not ordinarily threaten a direct diversion of trade from the trademark owner; indeed, the owner’s sales
may beneﬁt to some extent from the infringer’s promotion of the
mark. On the other hand, because of the infringer’s concurrent use of
the mark, the reputation of the trademark owner’s goods or services
among prospective purchasers is no longer within the owner’s exclusive control. Failure to protect against reverse confusion would also
permit large subsequent users to undermine by extensive advertising
the investments of smaller ﬁrms in their trade symbols. Because these
potential injuries result from a likelihood of confusion as to the source
of goods or services, the creation of reverse confusion falls within the
traditional rules governing the infringement of trademarks.
Illustration:
8. A, a small tire manufacturer, sells BIGTRACK tires in a
regional market. Consumers in that market associate BIGTRACK with A. B, a prominent tire manufacturer, subsequently begins selling BIGTRACK tires and engages
in an extensive promotional campaign on national television. B’s advertising overwhelms A’s promotional eﬀorts
with the result that consumers encountering A’s tires now
think that the tires are actually produced by B. B is subject
to liability to A under the rule stated in this Section.
C

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Standard point of sale confusion takes place at the moment of purchase. What if consumers are confused before then?
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The issue here is not the possibility that a purchaser would buy a
Grotrian-Steinweg thinking it was actually a Steinway or that Grotrian had some connection with Steinway and Sons. The harm
to Steinway, rather, is the likelihood that a consumer, hearing the
”Grotrian-Steinweg” name and thinking it had some connection with
”Steinway”, would consider it on that basis. The ”Grotrian-Steinweg”
name therefore would a ract potential customers based on the reputation built up by Steinway in this country for many years. Misled
into an initial interest, a potential Steinway buyer may satisfy himself that the less expensive Grotrian-Steinweg is at least as good, if
not be er, than a Steinway. Deception and confusion thus work to
appropriate defendant’s good will.

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Suppose West Coast’s competitor (let’s call it ”Blockbuster”) puts up
a billboard on a highway reading–”West Coast Video: 2 miles ahead
at Exit 7”– where West Coast is really located at Exit 8 but Blockbuster
is located at Exit 7. Customers looking for West Coast’s store will pull
oﬀ at Exit 7 and drive around looking for it. Unable to locate West
Coast, but seeing the Blockbuster store right by the highway entrance,
they may simply rent there. Even consumers who prefer West Coast
may ﬁnd it not worth the trouble to continue searching for West Coast
since there is a Blockbuster right there. Customers are not confused in
the narrow sense: they are fully aware that they are purchasing from
Blockbuster and they have no reason to believe that Blockbuster is
related to, or in any way sponsored by, West Coast. Nevertheless, the
fact that there is only initial consumer confusion does not alter the fact
that Blockbuster would be misappropriating West Coast’s acquired
goodwill. See Blockbuster Entertainment Group v. Laylco, Inc. (ﬁnding
trademark infringement where the defendant, a video rental store,
a racted customers’ initial interest by using a sign confusingly to its
competitor’s even though confusion would end long before the point
of sale or rental).
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[This was a keyword advertising case. Consult Rescuecom for a description of keyword advertising. The plaintiﬀ alleged that the defendant purchased its HEARTS ON FIRE trademark as a keyword
on the Webcrawler search engine.]
Rarely are cases so clear as the Ninth Circuit’s billboard – particularly on the internet – and certainly not this one.
Infringement is not nearly so obvious from this vantage point.
Rather than a misleading billboard, this analogy is more akin to a
menu – one that oﬀers a variety of distinct products, all keyed to the
consumer’s initial search. Sponsored linking may achieve precisely
this result, depending on the speciﬁc product search and its context.
When a consumer searches for a trademarked item, she receives a
search results list that includes links to both the trademarked product’s website and a competitor’s website. Where the distinction between these vendors is clear, she now has a simple choice between
products, each of which is as easily accessible as the next. If the
consumer ultimately selects a competitor’s product, she has been diverted to a more a ractive oﬀer but she has not been confused or
misled.9 While she may have go en to the search-results list via the
9

Consider, for instance, if Pepsi were to purchase sponsored links to its website

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

trademarked name, once there, the advertised products are easily distinguished.
In much the same way, keyword purchasing may, in many cases,
be analogized to a drug store that typically places its own storebrand generic products next to the trademarked products they emulate in order to induce a customer who has speciﬁcally sought out
the trademarked product to consider the store’s less-expensive alternative. The generic product capitalizes on the recognizable brand
name but the consumer beneﬁts by being oﬀered a lower-cost product. At no point is the consumer confused about the alternatives
presented to her. The goodwill invested in the protected mark remains undisturbed while the consumer reaps the beneﬁt of competing goods. Trademark infringement would seem to be unsupportable
in this scenario. Mere diversion, without any hint of confusion, is not
enough.
To be sure, the sponsored links appearing on a search-results page
will not always be a menu of readily distinguished alternatives. With
the intense competition for internet users’ a ention and mouseclicks,
online merchants may well be tempted to blur these distinctions, hoping to create and capitalize on initial consumer confusion. Such conduct undoubtedly begins to sound in trademark infringement. Thus,
where a plaintiﬀ has plausibly alleged some consumer confusion,
even at an initial stage of his product search, the question is a far
closer one.
Based on the twin goals of trademark protection, the Court concludes that initial interest confusion can support a claim under the
Lanham Act – but only where the plaintiﬀ has plausibly alleged that
consumers were confused, and not simply diverted. Many cases, including this one, will fall somewhere between the incarnations of
so-called initial interest confusion discussed above – the misleading
billboard or the choice-enhancing menu. The Court’s task is to distinguish between them. As a preliminary ma er, the Court agrees
with the many scholars who ﬁnd the deceptive billboard analogy often inapt in the internet context. Unlike the deceived shopper who
is unlikely to get back on the highway, the internet consumer can
easily click the ‘back’ bu on on her web browser and return almost
instantly to the search results list to ﬁnd the sought-after brand. Her
added search costs, in other words, may often be very low while her
comparative choice among products is greatly expanded.
The crucial question in these cases is one of degree: Whether the
consumer is likely confused in some sustained fashion by the spontriggered by an internet user’s search for the ”Coca-Cola” trademark. Coca-Cola
would have diﬃculty suing Pepsi for infringement on an initial interest theory because these two products are widely recognized as competitors and, accordingly,
the likelihood of consumer confusion is exceedingly small.

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sored link and the defendant’s website, or whether the link serves instead as a benign and even beneﬁcial form of comparison shopping.
The menu analogy described above – where the competing products
are clearly distinguished – is not, in and of itself, truly a case of confusion at all, and therefore cannot support an infringement claim. In
fact, in order for a plaintiﬀ pleading initial interest confusion to prevail, that confusion must be more than momentary and more than a
”mere possibility.” Grotrian As with any alleged trademark violation,
plaintiﬀs must show a genuine and substantial likelihood of confusion.
This principle was implicit in the bricks-and-mortar cases that laid
the groundwork for initial interest confusion as well as the Ninth Circuit’s billboard analogy, which assumed that the deceived shopper,
once diverted, would not get back on the highway. See Mobil Oil Corp.
v. Pegasus Petroleum Corp. (competitor’s logo confused oil traders into
investing a considerable amount of time and eﬀort into pre-sale negotiations with the defendant); Grotrian (similar mark would entice
even sophisticated consumers to consider defendant’s pianos, even if
any confusion was resolved prior to any purchase). Where, as here, a
plaintiﬀ has alleged a plausible likelihood of confusion based on the
overall context in which a consumer performs his internet search, he
has stated a claim for trademark infringement and may proceed on
an initial interest theory.
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Standard point of sale confusion takes place at the moment of purchase. What if consumers are confused after then?
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GM, currently the world’s largest automaker, owns registered trademarks in the Chevrolet ”bow tie” design and the ”GMC” design. The
instant case arose out of Tong Yang’s manufacturing and Keystone’s
distribution of replacement grilles with ”placeholders” bearing these
two designs.
For Chevrolets, the placeholder is a recessed space on the front of
the grille in the shape of a bow tie in which a heavy plastic GM ”bow
tie” emblem is inserted. Each emblem is a separate part always purchased from GM and is secured to the placeholder with studs or pins
extending from the back of the emblem so as to pass through holes
in the placeholder. After inserted and secured in the placeholder of
a Chevrolet grille, the ”bow tie” emblem partially or wholly ﬁlls the
”bow tie” recess. [Similarly for GMC vehicles.]

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A. Point-of-Sale Confusion

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Likelihood of confusion at the point of sale involves a purchaser’s
confusion as to a product’s origin or sponsorship occurring at the
time of purchase. The points of sale for most of Tong Yang’s grilles
are collision repair shops, but some are sold directly to individuals
over the internet. We need not exhaustively apply the eight-factor test
to reach the rather obvious conclusion that there is no likelihood of
confusion at the point of sale because buyers are expressly informed
that they are not purchasing GM grilles.
In Ferrari S.P.A. Esercizio v. Roberts, this Court noted that there
was no likelihood of point-of-sale confusion where a manufacturer
of ”knockoﬀ” Ferraris informed his purchasers that his signiﬁcantly
cheaper cars were not genuine Ferraris. Similarly, customers knowing they are purchasing a knockoﬀ designer purse or Rolex watch
simply do not confuse the counterfeit with the original.
Likewise, in the instant case, no purchaser has reason to be confused as to the origin of the replacement grilles. Collision repair
shops ordering Tong Yang parts do so intentionally and generally
at the bidding of insurance companies because non-original equipment is less expensive and reduces the cost of repairing a vehicle.
Moreover, GM grilles are made by Siegel-Robert, Inc., and carry the
molded le ers ”SRI” to identify their origin, whereas Tong Yang
grilles are marked ”OTN” and ”Made in Taiwan.” In addition, Tong
Yang grilles are shipped in boxes and packaging markedly diﬀerent
from those containing GM grilles with conspicuous logos of Tong
Yang and/or Keystone. The invoice accompanying Tong Yang parts
conspicuously carries the following disclaimer:
THESE REPLACEMENT PARTS ARE NOT MANUFACTURED BY THE ORIGINAL MANUFACTURER. THESE
PARTS ARE REPLACEMENT FOR THE OEM PARTS,
AND MANUFACTURED IN TAIWAN FOR NORTH
AMERICA MARKET.
An automobile owner would have to possess complete ignorance of
this disclaimer, her insurance contract, and ordinary automobile repair practices to be confused as to the origin of a Tong Yang grille
when ge ing her vehicle repaired. Individuals purchasing grilles directly from Keystone over the internet receive the same source information as collision repair shops and likewise could scarcely be
confused. In short, the transparent and conspicuous indications that
Tong Yang manufactured its grilles make confusion at the point of
sale all but impossible.
B. Downstream Confusion
In addition to point-of-sale confusion, the Sixth Circuit recognizes
that a likelihood of downstream confusion, also called ”post-sale”

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confusion, is actionable. Thus, injection of knockoﬀs into the stream
of commerce may lead to a likelihood of confusion among the general
public.
Our review of cases discussing the harm of injecting knockoﬀs
into the stream of commerce further signals the likelihood of downstream confusion in this case. Even without point-of-sale confusion,
knockoﬀs can harm the public and the original manufacturer in a
number of ways, including: (1) the viewing public, as well as subsequent purchasers, may be deceived if expertise is required to distinguish the original from the counterfeit; (2) the purchaser of an
original may be harmed if the widespread existence of knockoﬀs decreases the original’s value by making the previously scarce commonplace; (3) consumers desiring high quality products may be harmed if
the original manufacturer decreases its investment in quality in order
to compete more economically with less expensive knockoﬀs; (4) the
original manufacturer’s reputation for quality may be damaged if individuals mistake an inferior counterfeit for the original; (5) the original manufacturer’s reputation for rarity may be harmed by the inﬂux
of knockoﬀs onto the market; and (6) the original manufacturer may
be harmed if sales decline due to the public’s fear that what they are
purchasing may not be the original. On the other hand, courts should
be wary of overprotecting public domain ideas and works whose exploitation can lead to economic eﬃciency, greater competition, and
lower costs for consumers.2
The instant case carries potential for downstream confusion and
corresponding harm to GM and the public. Unaided by the defendants’ conspicuously marked packaging, the invoice disclaimer, or a
collision shop’s expertise, the viewing public could mistake a Tong
Yang grille for a GM grille. Such confusion could damage GM’s reputation for quality if the public associates any inferior a ributes (e.g.,
improper ﬁt or cracking) of Tong Yang’s grilles with GM. Other types
of possible downstream harm, such as that resulting from a product’s reduced scarcity, however, are largely inapplicable to this case.
Nonetheless, visibility of the placeholder after the automobile is repaired and returned to the road may harm the public and GM.
If the placeholder cannot be seen after the Chevrolet ”bow tie”
or ”GMC” emblem is aﬃxed, the wholly hidden placeholder cannot
cause downstream confusion as to origin or sponsorship. After all,
that which deﬁes perception cannot confuse. Cf. Polo Fashions, Inc. v.
Craftex, Inc. (In a suit involving knockoﬀ Polo shirts, the placement
of the defendant’s mark inside the back of the neck of each shirt did
2

It is worth emphasizing that GM seeks relief only under the laws of trademark
and unfair competition. Other legal theories, such as the laws of patent and trade
dress, also oﬀer protection for certain a ributes of products.

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

not prevent a likelihood of confusion stemming from the defendant’s
placement of the Polo trademark on the front of each shirt.).
The parties dispute whether the placeholder can be seen after the
emblem is secured. The District Court improperly resolved in favor
of the defendants this factual dispute regarding the visibility of the
placeholders after each emblem is aﬃxed. If the placeholders remain
visible, the related question is raised whether the placeholders are
suﬃciently visible to cause a likelihood of confusion. These genuine
disputes of material fact render summary judgment inappropriate, a
common disposition in evaluating likelihood of confusion.

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Our safari continues with Section 43(a) of the Lanham Act.
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(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 …
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.

What does Section 43(a) do? Quite a lot:
• It provides a federal cause of action for infringement even of
unregistered marks.
• It provides a federal cause of action for infringement of trade
dress.
• It provides a federal cause of action for false advertising.defer
them to the Design and False Advertising chapters, respectively.
• It provides a federal cause of action for unfair competition.

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• It provides a federal cause of action for confusion about sponsorship or aﬃliation.
The ﬁrst of these requires li le discussion. The second and third require so much discussion that we We consider the fourth and ﬁfth in
this subsection, along with another theory of liability not supported
by Section 43(a): failure to a ribute (or ”reverse passing oﬀ”).
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To understand the unfair-competition tort and how it diﬀers from
trademark infringement, a page of history is helpful.
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At common law in the late 1800s and early 1900s, courts distinguished
between ”technical trademarks,” which were protected through a
suit for trademark infringement, and ”trade names” (or ”secondary
meaning marks”), which were protected (if at all) through a suit for
unfair competition.
Technical trademarks were what we would call ”inherently distinctive” marks today – words and symbols that were ”fanciful, arbitrary, unique, distinctive, and nondescriptive in character,” and
which the claimant had physically aﬃxed to articles of merchandise. Trade names, by contrast, consisted of words and symbols that
described their user’s product or service, constituted geographical
terms, personal names, or designations common to the trade, or constituted business or corporate names.
The courts distinguished between technical trademarks and secondary meaning marks on the reasoning that a business could legitimately appropriate a fanciful or arbitrary word or symbol to its sole,
exclusive use, with no harm to others. A technical trademark, by deﬁnition, was either made up (and thus had no meaning) or had a meaning that bore no descriptive or other logical relationship to the user’s
product. Accordingly, competitors had no legitimate reason to adopt
the same word or symbol to identify or describe their similar goods.
If they did so, they likely did it for the purpose of perpetrating a fraud
on the mark owner or the public. Their action could be characterized
as an invasion of the ﬁrst user’s property rights.
In contrast, trade names consisted of descriptive, surname, geographic, and other words and symbols commonly used in the trade,
such as colors, squares, circles, stripes, or other common shapes. Numerous competitors might legitimately want to use such words and
symbols in their own marketing activities. A business that adopted
such a word or symbol as its mark or name had no right to expect
exclusivity.

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

When competitors intentionally used a secondary meaning mark
for the purpose of confusing consumers about the source of their
goods, thus diverting trade from an earlier user, courts would intervene – not on the ground that the plaintiﬀ had property rights in the
word or symbol (as might be the case with regard to a technical trademark), but because the defendant/competitor was engaged in fraudulent conduct.
Plaintiﬀs in secondary meaning infringement cases generally had
to demonstrate that the defendant acted with fraudulent intent, while
courts would presume fraud in technical trademark infringement
cases.
Today, the Lanham Act for the most part does not draw any distinctions in the protections it accords to inherently distinctive marks and
to marks with acquired distinctiveness. They are all protected under the same likelihood-of-confusion standard. That would seem to
obliterate the need for a separate unfair-competition tort. Not quite
so fast.
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 64
Respondent is a corporation engaged in the manufacture and sale of
pharmaceutical and chemical products. In 1899 it began and has ever
since continued to make and sell a liquid preparation of quinine, in
combination with other substances, including yerba-santa and chocolate, under the name of Coco-Quinine. Petitioner also is a pharmaceutical and chemical manufacturer[, which] in 1906 began the manufacture of a liquid preparation which is substantially the same as
respondent’s preparation and which was put upon the market under
the name of Quin-Coco.
This suit was brought in the Federal District Court for the Eastern District of Pennsylvania by respondent to enjoin petitioner from
continuing to manufacture and sell the preparation if ﬂavored or colored with chocolate; and also from using the name Quin-Coco, on the
ground that it was an infringement of the name Coco-Quinine, to the
use of which respondent had acquired an exclusive right.
First. We agree with the courts below that the charge of infringement was not sustained. The name Coco-Quinine is descriptive of
the ingredients which enter into the preparation. The same is equally
true of the name Quin-Coco. A name which is merely descriptive
of the ingredients, qualities or characteristics of an article of trade
cannot be appropriated as a trademark and the exclusive use of it afforded legal protection. The use of a similar name by another to truthfully describe his own product does not constitute a legal or moral

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wrong, even if its eﬀect be to cause the public to mistake the origin or
ownership of the product.
Second. The issue of unfair competition, on which the courts below diﬀered, presents a question of more diﬃculty.
It is apparent, from a consideration of the testimony, that the efforts of petitioner to create a market for Quin-Coco were directed not
so much to showing the merits of that preparation as they were to
demonstrating its practical identity with Coco-Quinine, and, since it
was sold at a lower price, inducing the purchasing druggist, in his
own interest, to substitute, as far as he could, the former for the latter. In other words, petitioner sought to avail itself of the favorable
repute which had been established for respondent’s preparation in
order to sell its own. Petitioner’s salesmen appeared more anxious to
convince the druggists with whom they were dealing that Quin-Coco
was a good substitute for Coco-Quinine and was cheaper, than they
were to independently demonstrate its merits. The evidence establishes by a fair preponderance that some of petitioner’s salesmen suggested that, without danger of detection, prescriptions and orders for
Coco-Quinine could be ﬁlled by substituting Quin-Coco. More often,
however, the feasibility of such a course was brought to the mind of
the druggist by pointing out the identity of the two preparations and
the enhanced proﬁt to be made by selling Quin-Coco because of its
lower price. There is much conﬂict in the testimony; but on the whole
it fairly appears that petitioner’s agents induced the substitution, either in direct terms or by suggestion or insinuation. Sales to druggists
are in original bo les bearing clearly distinguishing labels and there
is no suggestion of deception in those transactions; but sales to the
ultimate purchasers are of the product in its naked form out of the
bo le; and the testimony discloses many instances of passing oﬀ by
retail druggists of petitioner’s preparation when respondent’s preparation was called for. That no deception was practiced on the retail
dealers, and that they knew exactly what they were ge ing is of no
consequence. The wrong was in designedly enabling the dealers to
palm oﬀ the preparation as that of the respondent. One who induces
another to commit a fraud and furnishes the means of consummating
it is equally guilty and liable for the injury.

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The Blinded Veterans Association (BVA or the Association) sought
to enjoin the Blinded American Veterans Foundation (BAVF or the
Foundation) from using the words ”blinded” and ”veterans” in its
name and from using the initials ”BAV” as an acronym. We hold that
BVA’s name is not a protectable trademark because the term ”blinded

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

veterans” is generic. BVA, however, may be entitled to protection
against BAVF’s passing itself oﬀ as BVA.
Appellee Blinded Veterans Association is a nonproﬁt organization
founded in 1945 by a group of blinded World War II veterans. Appellant BAVF is a nonproﬁt District of Columbia corporation founded in
September 1985 by three former oﬃcials of BVA. In 1986, BAVF applied to 552 local campaign organizations involved in the Combined
Federal Campaign (CFC). Those organizations listed BAVF, alphabetically ahead of BVA, as a prospective recipient of CFC funds. Despite
its lack of signiﬁcant accomplishments at that point, BAVF did rather
well in its initial fundraising foray: the Foundation’s 1986 income totalled between $35,000 and $40,000, half from CFC pledges and half
from corporate contributions.
If the name of one manufacturer’s product is generic, a competitor’s use of that name, without more, does not give rise to an unfair
competition claim under section 43(a) of the Lanham Act. Nevertheless, such a claim might be supportable if consumer confusion or a
likelihood of consumer confusion arose from the failure of the defendant to adequately identify itself as the source of the product.
The subsequent competitor cannot be prevented from using the
generic term to denote itself or its product, but it may be enjoined
from passing itself or its product oﬀ as the ﬁrst organization or its
product. Thus, a court may require the competitor to take whatever
steps are necessary to distinguish itself or its product from the ﬁrst
organization or its product. In the paradigm case, Kellogg Co. v. National Biscuit Co., for example, the Supreme Court held that the term
”shredded wheat” is generic; the National Biscuit Company therefore
was not entitled to exclusive use of the term. Because National Biscuit
had been the only manufacturer of shredded wheat for many years,
however, the public had come to associate the product and the term
”shredded wheat” with that company. The Court therefore stated
that the Kellogg Company, which also produced a shredded wheat
cereal, could be required to ”use reasonable care to inform the public
of the source of its product.”19 See also, e.g., Singer Mfg. Co. v. June Mfg.
Co. (holding that ”Singer” had become generic denotation of type of
sewing machine, but requiring that defendant not use the word on its
product or in advertisements ”without clearly and unmistakably stating ... that the machines are made by the defendant, as distinguished
from the sewing machines made by the Singer Manufacturing Company”); King-Seeley Thermos Co. v. Aladdin Indus., Inc. (ﬁnding ”thermos” generic denotation of vacuum-insulated container, but aﬃrm19

The Court then determined that Kellogg had suﬃciently distinguished its product by selling it in cartons diﬀerent from National Biscuit’s in size, form, and color,
with a diﬀerent label, a diﬀerent number of biscuits in each carton, and the name
”Kellogg” displayed prominently.

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ing requirement that defendant distinguish its product from plaintiﬀ’s by preceding ”thermos” with ”Aladdin’s,” by using only the
lower case ”t”, and by never using the words ”original” or ”genuine”
in describing its product); G.&C. Merriam Co. v. Saalﬁeld (requiring
defendant to accompany generic term ”Webster’s Dictionary” with
suﬃcient explanation to avoid giving false impression that his book
was plaintiﬀ’s).
Under the approach set forth in these cases, a court will not act
to remedy or prevent ”confusion generated by a mere similarity of
names. If a consumer confuses two manufacturers’ shredded wheat
cereal, for example, because both products share the same name
and the consumer has a general appetite for crunchy, pillow-shaped
wheat biscuits, there is no cause for judicial action. Such confusion
results merely from the manufacturers’ concurrent use of a generic
term to designate their products, and the late entrant into the shredded wheat ﬁeld cannot be said to have engaged in unfair competition. If, however, the consumer associates ”shredded wheat” with a
particular manufacturer, there is a risk that the consumer may erroneously assume that any product entitled ”shredded wheat” comes
from that manufacturer. A second manufacturer may increase the
risk of confusion by, for example, using a similar label, similar packaging, misleading advertisements, or simply by failing to state the
product’s source. Only when there is a likelihood that the newcomer
might thus pass its product oﬀ as the original manufacturer’s may
a court require the newcomer to distinguish its product or to notify
consumers explicitly that its product does not come from the original
manufacturer.
Ultimately, to succeed on its passing oﬀ claim, BVA must prove
that the likely eﬀect of BAVF’s actions is to induce the public to think
that BAVF is BVA. The evidence now in the record appears insuﬃcient to establish this type of confusion. To prevail in this action, however, it is not enough for BVA to show confusion that is the natural
consequence of the two organizations’ use of generic names. What is
essential, we underscore, is evidence that people associate ”blinded
veterans” with BVA per se and that, because of speciﬁc actions by
BAVF that increase the risk of confusion, people are likely to think
BAVF is BVA.
We think it proper to permit the parties to submit additional evidence trained on the question whether people are likely to think that
BAVF is actually BVA. It would ﬁll out and sharpen the record to
prove (or disprove), for instance, that people who have contributed
to BVA in the past have contributed, or are likely to contribute, to
BAVF thinking it was BVA, or that people familiar with BVA’s long
service on behalf of blinded veterans are likely to think any group
with a name containing ”blinded veterans” or with the le ers ”B” ”A”

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

and ”V” in its logo is the same as, or is associated with, BVA.
If the district court, on remand, ﬁnds from the evidence that BAVF
is passing itself oﬀ as BVA, the court may order that BAVF distinguish
itself from BVA to avoid confusion. This case obviously diﬀers from
Kellogg and other cases cited above because it involves the name of
an organization rather than the name of a particular product. This
diﬀerence precludes such a ready remedy as a aching the manufacturer’s name to the generic name of the product. The district court
could, however, require BAVF to a ach a prominent disclaimer to its
name alerting the public that it is not the same organization as, and is
not associated with, the Blinded Veterans Association. Alternatively,
the court could order that BAVF adopt another name containing the
term ”blinded veterans” that is less likely to confuse.
C

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Another way that § 43(a) is useful to trademark owners is by supplying a cause of action for the false suggestion of ”aﬃliation,” ”connection,” ”sponsorship” or ”approval.” Again, a li le history is useful.
At common law at the start of the 20th century, only trademark infringements involving directly competing goods were actionable – a
rule following directly from the conceptual logic of technical trademark infringement and unfair competition, which focused on the defendant’s diversion of the plaintiﬀ’s customers via deception.
As in Yale Electric, courts began to allow trademark infringement
suits against related but not directly competing goods. This had
two eﬀects. First, it made relatedness of the goods into one of
the factors for the standard trademark-infringement likelihood-ofconfusion test. Second, it opened up a new and independent theory
of harm to the plaintiﬀ, one not necessarily grounded in confusion
about source. Indeed, as in Conan Properties, the theory now works
even against wholly diﬀerent goods, where no reasonable consumer
could think they originated from the plaintiﬀ. There still must be
a likelihood of confusion; it is just confusion about something else..
Also watch out for the trademark defenses, which often limit liability
in such cases. Section 43(a) now incorporates this wider second understanding of confusion, which must be pleaded as a distinct cause
of action. The most controversial cases involve merchandising: use
of the trademark on apparel and other items purchased by people
who care about the mark because of what it signiﬁes rather than as a
signal of who made the goods.
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did, or said that they should, suppose the plaintiﬀ’s ﬂash-lights to
be one of the defendant’s products, and it is extremely probable that
mistakes will continue unless the practice ceases.
Therefore, so far as we can see, only [one] point[] of law need be
considered: whether, in view of the fact that it makes no ﬂash-lights
or ba eries, it may complain of the plaintiﬀ’s use of its name. The
law of unfair trade comes down very nearly to this – as judges have
repeated again and again – that one merchant shall not divert customers from another by representing what he sells as emanating from
the second. This has been, and perhaps even more now is, the whole
Law and the Prophets on the subject, though it assumes many guises.
Therefore it was at ﬁrst a debatable point whether a merchant’s good
will, indicated by his mark, could extend beyond such goods as he
sold. How could be lose bargains which he had no means to ﬁll?
What harm did it do a chewing gum maker to have an ironmonger
use his trade-mark?
However, it has of recent years been recognized that a merchant
may have a suﬃcient economic interest in the use of his mark outside
the ﬁeld of his own exploitation to justify interposition by a court. His
mark is his authentic seal; by it he vouches for the goods which bear
it; it carries his name for good or ill. If another uses it, he borrows
the owner’s reputation, whose quality no longer lies within his own
control. This is an injury, even though the borrower does not tarnish
it, or divert any sales by its use; for a reputation, like a face, is the
symbol of its possessor and creator, and another can use it only as a
mask. And so it has come to be recognized that, unless the borrower’s
use is so foreign to the owner’s as to insure against any identiﬁcation
of the two, it is unlawful. The defendant need not permit another to
a ach to its good will the consequences of trade methods not its own.
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Conan Properties, Inc. (CPI) owns the literary property rights in the
ﬁctional character CONAN THE BARBARIAN and licenses others
to use the character in various commercial and entertainment works.
CPI sued Conans Pizza, Inc. (Conans) for infringement of its federal trademark and for unfair competition and misappropriation of
its property under Texas common law.
The CONAN character was created in 1929 by Robert Howard.
But the character remained relatively dormant until the 1950’s, when
L. Sprague deCamp, a contemporary author, rediscovered and began writing books featuring CONAN THE BARBARIAN . As the title
might suggest, deCamp’s CONAN THE BARBARIAN series told the
tales of a gigantic, sword and ba le-ax wielding barbarian adventurer

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

who roamed the world in search of foes. Many of deCamp’s works
were illustrated by Frank Fraze a, an artist famous for his ”sword
and sorcery” style artwork. In 1970, the Howard estate licensed Marvel Comics to publish a series of comic books featuring CONAN THE
BARBARIAN . To avoid litigation over who had rights in CONAN
THE BARBARIAN, the Howard estate and deCamp united their interests in the CONAN character in 1976 and formed CPI. In that same
year the United States Patent and Trademark Oﬃce (USPTO) granted
CPI a federally registered trademark for the title CONAN THE BARBARIAN for comic books.
Also in this same year, Sco Leist and Jerry Strader opened ”Conans Pizza”, a restaurant in Austin, Texas.The restaurant’s menus,
signs, promotional material, specialty items, and general decor featured a barbarian-like man who closely resembled CPI’s CONAN
character. For example, Conans Pizza’s menus depicted a loinclothclad, sword wielding, sandal wearing, barbarian-like muscleman,
and they described one of the featured pizzas as the ”Savage, Barbaric, All the Way Pizza.” The owners decorated the restaurant with
dozens of reproductions of Frank Fraze a’s artwork, although only
a few of the reproductions actually represented CONAN THE BARBARIAN.
To prevail on its trademark infringement and unfair competition
claims, CPI needed to demonstrate that Conans’ use of the CONAN
THE BARBARIAN mark and image was likely to create confusion
in the mind of the ordinary consumer as to the source, aﬃliation, or
sponsorship of Conans’ service and product. A nonexhaustive list
of factors to be considered in determining whether a likelihood of
confusion exists includes: (1) the type of trademark alleged to have
been infringed, (2) the similarity of design between the two marks,
(3) similarity of the products or services, (4) the identity of the retail
outlets and purchasers, (5) the identity of the advertising medium utilized, (6) the defendant’s intent, and (7) evidence of actual confusion.
Armco, Inc. v. Armco Burglar Alarms Co.. The absence or presence of
any one factor ordinarily is not dispositive; indeed, a ﬁnding of likelihood of confusion need not be supported by even a majority of the
seven factors.
We conclude that CPI presented suﬃcient evidence related to
these seven factors to permit the jury to ﬁnd that Conans’ conduct
created a likelihood of confusion as to the source, sponsorship, or
aﬃliation of its service and product. The evidence adduced at trial
revealed that Conans was aware of the CONAN THE BARBARIAN
character prior to its adoption of the name Conans Pizza. Additionally, Conans’ menus, advertising material, specialty items, and general decor featured a character unmistakably similar if not identical
to CONAN THE BARBARIAN.

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Conans answers that no reasonable person could have believed
that its restaurants were related to CPI’s CONAN THE BARBARIAN, since the products and services each provided were diﬀerent.
We must disagree. Although CPI never licensed any entity to use
its mark in connection with restaurant services, ordinary consumers
may well believe that Conans was in fact licensed by CPI. At the trial
CPI presented evidence of numerous cartoon and other characters
whose names, marks, or images were used in extensive licensing programs to promote everything from children’s toys to fast-food restaurants. These characters included SNOOPY, POPEYE, DICK TRACY,
PETER PAN, E.T., and ROY ROGERS. Many of today’s consumers
expect such endorsements and act favorably toward them. It is reasonable to assume, as the jury found, that ordinary consumers who
patronized Conans Pizza and experienced the pervasive, inescapable
aura of CONAN THE BARBARIAN in those restaurants were likely
to believe that the restaurants were in some way licensed by or aﬃliated with CPI. We therefore leave undisturbed the jury’s ﬁndings of
trademark infringement and unfair competition.

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Appellee, the International Order of the Daughters of Job (Job’s
Daughters), sued appellant Lindeburg and Co. (Lindeburg), for
trademark infringement arising out of Lindeburg’s manufacture and
sale of jewelry bearing the Job’s Daughters insignia.
Job’s Daughters is a young women’s fraternal organization. Since
its establishment in 1921 it has used its name and emblem1 as collective marks. Since its inception Job’s Daughters has licensed at least
one jeweler to produce jewelry for it. Job’s Daughters sells some
of the licensed jewelry directly to its members. Jewelry bearing the
name or emblem is also sold by approximately 31,000 retailers across
the nation. Most of these retailers presumably have no connection
with the Job’s Daughters organization. Some sell jewelry manufactured by Job’s Daughters’ licensees; others sell jewelry manufactured
by jewelers not licensed by the organization.
Lindeburg makes and sells fraternal jewelry. In 1954 it began selling jewelry and related items bearing the Job’s Daughters insignia.
In 1957 Lindeburg asked the Job’s Daughters trademark commi ee
to designate it an ”oﬃcial jeweler.” The commi ee refused and in
1964 and 1966 asked Lindeburg to stop manufacturing and selling
unlicensed jewelry. Lindeburg did not comply with this request. In
1973 Lindeburg again sought permission to act as an oﬃcial jeweler
1

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The emblem consists of a representation of three girls within a double triangle.
The girls carry a dove, an urn, and a cornucopia. Between the bases of the two
triangles are the words ”Iyob Filiae,” the Latin translation of ”Daughters of Job.”

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

for Job’s Daughters. Permission was granted for one year and then
withdrawn.
The name JOB’S DAUGHTERS and the Job’s Daughters insignia
are indisputably used to identify the organization, and members of
Job’s Daughters wear the jewelry to identify themselves as members.
In that context, the insignia are trademarks of Job’s Daughters. But
in the context of this case, the name and emblem are functional aesthetic components of the jewelry, in that they are being merchandised
on the basis of their intrinsic value, not as a designation of origin or
sponsorship.
It is not uncommon for a name or emblem that serves in one context as a collective mark or trademark also to be merchandised for
its own intrinsic utility to consumers. We commonly identify ourselves by displaying emblems expressing allegiances. Our jewelry,
clothing, and cars are emblazoned with inscriptions showing the organizations we belong to, the schools we a end, the landmarks we
have visited, the sports teams we support, the beverages we imbibe.
Although these inscriptions frequently include names and emblems
that are also used as collective marks or trademarks, it would be naive
to conclude that the name or emblem is desired because consumers
believe that the product somehow originated with or was sponsored
by the organization the name or emblem signiﬁes.
Job’s Daughters relies on Boston Professional Hockey Ass’n, Inc. v.
Dallas Cap & Emblem Mfg., Inc., in which the Boston Bruins and other
National Hockey League clubs brought a trademark infringement
suit against a company that sold replicas of the NHL team emblems.
The Fifth Circuit, applying the Lanham Act infringement test and focusing on the ”likelihood of confusion,” found infringement:
The confusion or deceit requirement is met by the fact that
the defendant duplicated the protected trademarks and
sold them to the public knowing that the public would
identify them as being the teams’ trademarks. The certain knowledge of the buyer that the source and origin of
the trademark symbols were the plaintiﬀs satisﬁes the requirement of the act. The argument that confusion must
be as to the source of the manufacture of the emblem itself is unpersuasive, where the trademark, originated by
the team, is the triggering mechanism for the sale of the
emblem.
We reject the reasoning of Boston Hockey
Interpreted expansively, Boston Hockeyholds that a trademark’s
owner has a complete monopoly over its use in commercial merchandising. But our reading of the Lanham Act and its legislative history
reveals no congressional design to bestow such broad property rights

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on trademark owners. Its scope is much narrower: to protect consumers against deceptive designations of the origin of goods and, conversely, to enable producers to diﬀerentiate their products from those
of others. The Boston Hockey decision transmogriﬁes this narrow protection into a broad monopoly. It does so by injecting its evaluation
of the equities between the parties and of the desirability of bestowing broad property rights on trademark owners. A trademark is, of
course, a form of business property. But the ”property right” or protection accorded a trademark owner can only be understood in the
context of trademark law and its purposes. A trademark owner has a
property right only insofar as is necessary to prevent consumer confusion as to who produced the goods and to facilitate diﬀerentiation of
the trademark owner’s goods. The Boston Hockey court decided that
broader protection was desirable. In our view, this extends the protection beyond that intended by Congress and beyond that accorded
by any other court.
Our holding does not mean that a name or emblem could not
serve simultaneously as a functional component of a product and a
trademark. That is, even if the Job’s Daughters’ name and emblem,
when inscribed on Lindeburg’s jewelry, served primarily a functional
purpose, it is possible that they could serve secondarily as trademarks if the typical customer not only purchased the jewelry for its
intrinsic functional use and aesthetic appeal but also inferred from
the insignia that the jewelry was produced, sponsored, or endorsed
by Job’s Daughters. We recognize that there is some danger that the
consumer may be more likely to infer endorsement or sponsorship
when the consumer is a member of the group whose collective mark
or trademark is being marketed. Accordingly, a court must closely
examine the articles themselves, the defendant’s merchandising practices, and any evidence that consumers have actually inferred a connection between the defendant’s product and the trademark owner.
We conclude from our examination of the trial judge’s ﬁndings
and of the underlying evidence that Lindeburg was not using the
Job’s Daughters name and emblem as trademarks. The insignia were
a prominent feature of each item so as to be visible to others when
worn, allowing the wearer to publicly express her allegiance to the
organization. Lindeburg never designated the merchandise as ”ofﬁcial” Job’s Daughters’ merchandise or otherwise aﬃrmatively indicated sponsorship. Job’s Daughters did not show a single instance
in which a customer was misled about the origin, sponsorship, or
endorsement of Lindeburg’s jewelry, nor that it received any complaints about Lindeburg’s wares. Finally, there was evidence that
many other jewelers sold unlicensed Job’s Daughters jewelry, implying that consumers did not ordinarily purchase their fraternal jewelry
from only ”oﬃcial” sources. We conclude that Job’s Daughters did

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not meet its burden of proving that a typical buyer of Lindeburg’s
merchandise would think that the jewelry was produced, sponsored,
or endorsed by the organization. The name and emblem were functional aesthetic components of the product, not trademarks. There
could be, therefore, no infringement.
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Section 43(a) is not inﬁnitely elastic.
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 64
In this case, we are asked to decide whether § 43(a) of the Lanham
Act prevents the unaccredited copying of a work.
I
In 1948, three and a half years after the German surrender at Reims,
General Dwight D. Eisenhower completed Crusade in Europe, his written account of the allied campaign in Europe during World War II.
Doubleday published the book, registered it with the Copyright Ofﬁce in 1948, and granted exclusive television rights to an aﬃliate
of respondent Twentieth Century Fox Film Corporation (Fox). Fox,
in turn, arranged for Time, Inc., to produce a television series, also
called Crusade in Europe, based on the book, and Time assigned its
copyright in the series to Fox. The television series, consisting of 26
episodes, was ﬁrst broadcast in 1949. It combined a soundtrack based
on a narration of the book with ﬁlm footage from the United States
Army, Navy, and Coast Guard, the British Ministry of Information
and War Oﬃce, the National Film Board of Canada, and unidentiﬁed “Newsreel Pool Cameramen.” In 1975, Doubleday renewed the
copyright on the book as the “proprietor of copyright in a work made
for hire.” Fox, however, did not renew the copyright on the Crusade
television series, which expired in 1977, leaving the television series
in the public domain.
[The respondents held the television rights to General Eisenhower’s book and reissued a videotape version of the original television series.]
Enter petitioner Dastar. Anticipating renewed interest in World
War II on the 50th anniversary of the war’s end, Dastar released a
video set entitled World War II Campaigns in Europe. To make Campaigns, Dastar purchased eight beta cam tapes of the original version
of the Crusade television series, which is in the public domain, copied
them, and then edited the series. Dastar’s Campaigns series is slightly
more than half as long as the original Crusade television series. Dastar substituted a new opening sequence, credit page, and ﬁnal closing
for those of the Crusade television series; inserted new chapter-title

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sequences and narrated chapter introductions; moved the “recap” in
the Crusade television series to the beginning and retitled it as a “preview”; and removed references to and images of the book. Dastar created new packaging for its Campaigns series and (as already noted) a
new title.
Dastar manufactured and sold the Campaigns video set as its own
product. The advertising states: “Produced and Distributed by: Entertainment Distributing “ (which is owned by Dastar), and makes
no reference to the Crusade television series. Similarly, the screen
credits state “DASTAR CORP presents” and “an ENTERTAINMENT
DISTRIBUTING Production,” and list as executive producer, producer, and associate producer employees of Dastar. The Campaigns
videos themselves also make no reference to the Crusade television
series, New Line’s Crusade videotapes, or the book. Dastar sells its
Campaigns videos to Sam’s Club, Costco, Best Buy, and other retailers and mail-order companies for $25 per set, substantially less than
New Line’s video set. In 1998, respondents Fox, SFM, and New Line
brought this action alleging that Dastar’s sale of its Campaigns video
set infringes Doubleday’s copyright in General Eisenhower’s book
and, thus, their exclusive television rights in the book. Respondents
later amended their complaint to add claims that Dastar’s sale of Campaigns “without proper credit” to the Crusade television series constitutes “reverse passing oﬀ”1 in violation of § 43(a) of the Lanham Act
and in violation of state unfair-competition law.
II
As it comes to us, the gravamen of respondents’ claim is that, in marketing and selling Campaigns as its own product without acknowledging its nearly wholesale reliance on the Crusade television series,
Dastar has made a “false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which
. . . is likely to cause confusion . . . as to the origin . . . of his or her
goods.” § 43(a). That claim would undoubtedly be sustained if Dastar had bought some of New Line’s Crusade videotapes and merely
repackaged them as its own. Dastar’s alleged wrongdoing, however,
is vastly diﬀerent: It took a creative work in the public domain – the
Crusade television series – copied it, made modiﬁcations (arguably
minor), and produced its very own series of videotapes. If “origin”
refers only to the manufacturer or producer of the physical “goods”
that are made available to the public (in this case the videotapes), Dastar was the origin. If, however, “origin” includes the creator of the un1

Passing oﬀ (or palming oﬀ, as it is sometimes called) occurs when a producer
misrepresents his own goods or services as someone else’s. “Reverse passing oﬀ,”
as its name implies, is the opposite: The producer misrepresents someone else’s
goods or services as his own.

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

derlying work that Dastar copied, then someone else (perhaps Fox)
was the origin of Dastar’s product. At bo om, we must decide what
§ 43(a)(1)(A) of the Lanham Act means by the “origin” of “goods.”
III
The dictionary deﬁnition of “origin” is “[t]he fact or process of coming into being from a source,” and “[t]hat from which anything primarily proceeds; source.” . And the dictionary deﬁnition of “goods”
(as relevant here) is “[w]ares; merchandise.” We think the most natural understanding of the “origin” of “goods” – the source of wares
– is the producer of the tangible product sold in the marketplace, in
this case the physical Campaigns videotape sold by Dastar. The concept might be stretched to include not only the actual producer, but
also the trademark owner who commissioned or assumed responsibility for (“stood behind”) production of the physical product. But as
used in the Lanham Act, the phrase “origin of goods” is in our view
incapable of connoting the person or entity that originated the ideas
or communications that “goods” embody or contain.
Section 43(a) of the Lanham Act prohibits actions like trademark
infringement that deceive consumers and impair a producer’s goodwill. It forbids, for example, the Coca-Cola Company’s passing oﬀ its
product as Pepsi-Cola or reverse passing oﬀ Pepsi-Cola as its product.
But the brand-loyal consumer who prefers the drink that the CocaCola Company or PepsiCo sells, while he believes that that company
produced (or at least stands behind the production of) that product,
surely does not necessarily believe that that company was the “origin” of the drink in the sense that it was the very ﬁrst to devise the
formula. The consumer who buys a branded product does not automatically assume that the brand-name company is the same entity
that came up with the idea for the product, or designed the product
– and typically does not care whether it is. The words of the Lanham
Act should not be stretched to cover ma ers that are typically of no
consequence to purchasers.
It could be argued, perhaps, that the reality of purchaser concern
is diﬀerent for what might be called a communicative product – one
that is valued not primarily for its physical qualities, such as a hammer, but for the intellectual content that it conveys, such as a book or,
as here, a video. The purchaser of a novel is interested not merely, if
at all, in the identity of the producer of the physical tome (the publisher), but also, and indeed primarily, in the identity of the creator
of the story it conveys (the author). And the author, of course, has at
least as much interest in avoiding passing oﬀ (or reverse passing oﬀ)
of his creation as does the publisher. For such a communicative product (the argument goes) “origin of goods” in § 43(a) must be deemed
to include not merely the producer of the physical item (the publish-

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ing house Farrar, Straus and Giroux, or the video producer Dastar)
but also the creator of the content that the physical item conveys (the
author Tom Wolfe, or – assertedly – respondents).
The problem with this argument according special treatment to
communicative products is that it causes the Lanham Act to conﬂict
with the law of copyright, which addresses that subject speciﬁcally.
The right to copy, and to copy without a ribution, once a copyright
has expired, like the right to make an article whose patent has expired
– including the right to make it in precisely the shape it carried when
patented – passes to the public. The rights of a patentee or copyright
holder are part of a carefully crafted bargain, under which, once the
patent or copyright monopoly has expired, the public may use the
invention or work at will and without a ribution. Assuming for the
sake of argument that Dastar’s representation of itself as the “Producer” of its videos amounted to a representation that it originated
the creative work conveyed by the videos, allowing a cause of action
under § 43(a) for that representation would create a species of mutant
copyright law that limits the public’s federal right to copy and to use
expired copyrights.
Reading “origin” in § 43(a) to require a ribution of uncopyrighted
materials would pose serious practical problems. Without a copyrighted work as the basepoint, the word “origin” has no discernable
limits. A video of the MGM ﬁlm Carmen Jones, after its copyright
has expired, would presumably require a ribution not just to MGM,
but to Oscar Hammerstein II (who wrote the musical on which the
ﬁlm was based), to Georges Bizet (who wrote the opera on which the
musical was based), and to Prosper Mérimée (who wrote the novel
on which the opera was based). In many cases, ﬁguring out who is in
the line of “origin” would be no simple task. Indeed, in the present
case it is far from clear that respondents have that status. Neither
SFM nor New Line had anything to do with the production of the
Crusade television series—they merely were licensed to distribute the
video version. While Fox might have a claim to being in the line of
origin, its involvement with the creation of the television series was
limited at best. Time, Inc., was the principal, if not the exclusive, creator, albeit under arrangement with Fox. And of course it was neither
Fox nor Time, Inc., that shot the ﬁlm used in the Crusade television series. Rather, that footage came from the United States Army, Navy,
and Coast Guard, the British Ministry of Information and War Oﬃce,
the National Film Board of Canada, and unidentiﬁed “Newsreel Pool
Cameramen.” If anyone has a claim to being the original creator of
the material used in both the Crusade television series and the Campaigns videotapes, it would be those groups, rather than Fox. We do
not think the Lanham Act requires this search for the source of the
Nile and all its tributaries.

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Another practical diﬃculty of adopting a special deﬁnition of “origin” for communicative products is that it places the manufacturers
of those products in a diﬃcult position. On the one hand, they would
face Lanham Act liability for failing to credit the creator of a work
on which their lawful copies are based; and on the other hand they
could face Lanham Act liability for crediting the creator if that should
be regarded as implying the creator’s “sponsorship or approval” of
the copy. In this case, for example, if Dastar had simply copied the
television series as Crusade in Europe and sold it as Crusade in Europe,
without changing the title or packaging (including the original credits to Fox), it is hard to have conﬁdence in respondents’ assurance
that they “would not be here on a Lanham Act cause of action,”
In sum, reading the phrase “origin of goods” in the Lanham Act
in accordance with the Act’s common-law foundations (which were
not designed to protect originality or creativity), and in light of the
copyright and patent laws (which were), we conclude that the phrase
refers to the producer of the tangible goods that are oﬀered for sale,
and not to the author of any idea, concept, or communication embodied in those goods. To hold otherwise would be akin to ﬁnding that
§ 43(a) created a species of perpetual patent and copyright, which
Congress may not do.
The creative talent of the sort that lay behind the Campaigns videos
is not left without protection. The original ﬁlm footage used in the
Crusade television series could have been copyrighted, as was copyrighted (as a compilation) the Crusade television series, even though
it included material from the public domain. Had Fox renewed the
copyright in the Crusade television series, it would have had an easy
claim of copyright infringement. And respondents’ contention that
Campaigns infringes Doubleday’s copyright in General Eisenhower’s
book is still a live question on remand. If, moreover, the producer of a
video that substantially copied the Crusade series were, in advertising
or promotion, to give purchasers the impression that the video was
quite diﬀerent from that series, then one or more of the respondents
might have a cause of action – not for reverse passing oﬀ under the
“confusion . . . as to the origin” provision of § 43(a)(1)(A), but for
misrepresentation under the “misrepresents the nature, characteristics [or] qualities” provision of § 43(a)(1)(B). For merely saying it is
the producer of the video, however, no Lanham Act liability a aches
to Dastar. ￼

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Now we move from section 43(a) to section 43(c). We start with some
background on the history and theory of dilution, then the statute,

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then an example.
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We have seen that the proper expansion of trademark law has been
hampered by obsolete conceptions both as to the function of a trademark and as to the need for its protection. Commencing with the assumption that a trademark designates either origin or ownership – in
other words, source- – he law, even in its most liberal interpretation
at the present time, will prevent the misuse of that mark only where
there is an actual confusion created by such misuse, resulting in either diversion of trade or other concrete ﬁnancial liability or injury to
trade repute. However, we have intimated the possibility that the use
of trademarks on entirely non-related goods may of itself concretely
injure the owner of the mark even in the absence of those elements of
damage noted above. If so, what is the injury, and to what extent, if
any, should the law take cognizance of such injury?
Trademark pirates are growing more subtle and reﬁned. They
proceed circumspectly, by suggestion and approximation, rather
than by direct and exact duplication of their victims’ wares and marks.
The history of important trademark litigation within recent years
shows that the use of similar marks on non-competing goods is perhaps the normal rather than the exceptional case of infringement. In
the famous English Kodak case, cameras and bicycles were the articles in question; in the Aunt Jemima’s case, pancake ﬂour and syrup;
in the Vogue case, fashion magazines and hats; in the Rolls-Royce
case, automobiles and radio parts; in the Beech-Nut case, food products and cigare es. In each in- stance the defendant was not actually
diverting custom from the plaintiﬀ, and where the courts conceded
the absence of diversion of custom they were obliged to resort to an
exceedingly laborious spelling out of other injury to the plaintiﬀ in
order to support their decrees. The real injury in all such cases can
only be gauged in the light of what has been said concerning the function of a trade- mark. It is the gradual whi ling away or dispersion
of the identity and hold upon the public mind of the mark or name by
its use upon non-competing goods. The more distinctive or unique
the mark, the deeper is its impress upon the public consciousness,
and the greater its need for protection against vitiation or dissociation from the particular product in connection with which it has been
used.
The following principles necessarily emerge: (1) that the value of
the modern trademark lies in its selling power; (2) that this selling
power depends for its psychological hold upon the public, not merely
upon the merit of the goods upon which it is used, but equally upon
its own uniqueness and singularity; (3) that such uniqueness or sin-

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

gularity is vitiated or impaired by its use upon either related or nonrelated goods; and (4) that the degree of its protection depends in
turn upon the extent to which, through the eﬀorts or ingenuity of its
owner, it is actually unique and diﬀerent from other marks.
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Schechter’s theory of dilution rested on the premise that the ability of
a trademark to serve as a vehicle for creating and perpetuating goodwill depends on its ”uniqueness,” and that multiple unrelated uses
of an unusual or distinctive mark will prevent that mark from developing a strong, unique hold on the public consciousness. This theory would give the ﬁrst user of a particularly unique or distinctive
mark the right to enforce her mark broadly-not merely within the geographic markets in which she operated, but also in neighboring regions; not merely against competing products, but also against sellers
of non-competing goods-all on the theory that any interference with
her eﬀorts to build and retain the association of goodwill with her
trademark threatens gradually to weaken that association, thereby
reducing her incentive to cultivate such goodwill.
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But what is “dilution”? There are (at least) three possibilities relevant
to this case, each deﬁned by a diﬀerent underlying concern. First,
there is concern that consumer search costs will rise if a trademark
becomes associated with a variety of unrelated products. Suppose an
upscale restaurant calls itself “Tiﬀany.” There is li le danger that the
consuming public will think it’s dealing with a branch of the Tiﬀany
jewelry store if it patronizes this restaurant. But when consumers
next see the name “Tiﬀany” they may think about both the restaurant and the jewelry store, and if so the eﬃcacy of the name as an
identiﬁer of the store will be diminished. Consumers will have to
think harder - incur as it were a higher imagination cost - to recognize the name as the name of the store. Cf. Mead Data Central, Inc.
v. Toyota Motor Sales, U.S.A., Inc. (“The [legislative] history [of New
York’s antidilution statute] disclosed a need for legislation to prevent
such ‘hypothetical anomalies’ as ‘Dupont shoes, Buick aspirin tablets,
Schli varnish, Kodak pianos, Bulova gowns’”). So “blurring” is one
form of dilution.
Now suppose that the “restaurant” that adopts the name “Tiﬀany”
is actually a striptease joint. Again, and indeed even more certainly
than in the previous case, consumers will not think the striptease joint
under common ownership with the jewelry store. But because of the
inveterate tendency of the human mind to proceed by association,

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every time they think of the word “Tiﬀany” their image of the fancy
jewelry store will be tarnished by the association of the word with the
strip joint. So “tarnishment” is a second form of dilution.
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(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 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 …
(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.

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

(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.
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The following ﬁndings of fact and conclusions of law issue as a result
of a bench trial conducted in this trademark action. Plaintiﬀ Nike,
Inc. (“Nike”), a company headquartered in Beaverton, Oregon which
uses the mark NIKE, contests the use of the mark NIKEPAL by Defendant Nikepal International, Inc. (“Nikepal”), a company located
in Sacramento, California.
Nike seeks an injunction preventing Nikepal from using the term
“Nike” (or any term confusingly similar thereto) alone or as part of
any trademark, domain name or business name under which Nikepal
oﬀers goods or services in commerce.
F
I. T

F

P

B
A. Nike

Nike was incorporated in 1968 under the original company name
Blue Ribbon Sports. In 1971, it adopted the NIKE mark to brand its
footwear products and in May 1978, the company’s name was oﬃcially changed to “Nike, Inc.” Today, Nike is the largest seller of athletic footwear and apparel in the world. Nike sells around 180 million pairs of shoes annually in the United States alone. Nike’s principal business activity is the design, development, and worldwide
marketing and distribution of high quality and technologically advanced footwear, apparel, equipment, and accessories. Nike has continuously used the NIKE mark on and in connection with the various
products oﬀered by the company since the 1970s. Sometimes, the
word mark NIKE is the only brand used; sometimes, Nike’s Swoosh

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design mark (i.e. the logo which frequently appears on products
along with NIKE, and in some instances alone) is also placed on the
product.
B. Nikepal

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Nikepal was incorporated on May 18, 1998 by the company’s founder
and president, Palminder Sandhu (“Mr. Sandhu”), who then began
using the NIKEPAL mark in commerce. Nikepal provides services
and products to analytical, environmental, and scientiﬁc laboratories.
Nikepal’s trademark application to the PTO requested registration
for: “import and export agencies and wholesale distributorships featuring scientiﬁc, chemical, pharmaceutical, biotechnology testing instruments and glassware for laboratory use, electrical instruments,
paper products and household products and cooking appliances.”
Nikepal distributes glass syringes in varying volumes and other laboratory products to testing and power companies and also distributes
paper boxes (syringe carrying cases) and nylon valves and caps for
use with the syringes. Nikepal only distributes its products to laboratories, not to individuals.
Nikepal does not have a retail oﬃce, but operates its business
through its website (located at www.nikepal.com), via email, and via
telephone. Nikepal is run by Mr. Sandhu, who also works as a transportation engineer. Currently, Nikepal has one other part-time employee. Nikepal has only a few hundred customers, but it has a list of
thousands of prospective customers, some of whom receive materials
from Nikepal advertising its product and service oﬀerings under the
mark NIKEPAL.
II. T

P

’M

A. NIKE
Nike ﬁrst registered the NIKE mark with the PTO in February 1974.
Nike owns ten (10) federal trademark registrations for the NIKE mark
alone, covering footwear, clothing, bags, timepieces, paper products
such as notebooks and binders, sport balls, swim accessories, and retail store services, all of which related to pre-May 1998 uses of the
mark. By May 1998, Nike was also using and applied for trademark registrations covering the use of the NIKE mark in combination with other terms or designs for footwear, clothing, bags, timepieces, posters, sport balls, swim accessories, weights, gloves, headgear, and retail store services. For example, Nike owns nineteen (19)
federal registrations for NIKE composite marks such as: NIKE and
the Swoosh design which has been in use since 1971; NIKE NIKE
AIR which has been in use since 1987; NIKE-FIT which has been in
use since 1990; NIKE TOWN which has been in use since 1990; NIKE

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

SHOP which has been in use since 1991; and NIKE GOLF which has
been in use since 1993. From 1998 to the present, Nike has continued
to use the mark NIKE alone and in combination with other terms or
designs.
B. NIKEPAL
Mr. Sandhu testiﬁed that he conceived of the term Nikepal when he
wanted to create a vanity license plate for his car. He testiﬁed that
he selected the word “Nike” by opening a dictionary to a random
page and choosing the ﬁrst word he saw, and then combined it with
the ﬁrst three le ers of his ﬁrst name “Pal.” (“Pal” means friend or
benefactor. Mr. Sandhu admits he knew of the existence of the company Nike and its use of the NIKE mark at the time he devised the
term NIKEPAL. Despite Mr. Sandhu’s trial testimony concerning the
manner in which he conceived of the term NIKEPAL, the court does
not ﬁnd it to be credible.
The “Nike” portion of the NIKEPAL mark is pronounced the same
way as the NIKE mark is pronounced: with a hard “i” (like bike) in
the ﬁrst syllable and a hard “e” (like in “key”) in the second syllable.2
The articles of incorporation signed by Mr. Sandhu for Nikepal in
1998 display the company name as “NikePal International, Inc.,” with
the ﬁrst word of the company name spelled “NikePal,” with a capital
“N” and a capital “P.”
In addition to using Nikepal as the company name, NIKEPAL
appears directly on some of Nikepal’s products, including on its syringe products, and on its marketing materials. Nikepal also places
www.nikepal.com on its syringes to identify the source of the syringe.
Nikepal also uses the NIKEPAL mark in a vanity phone number (1877-N-I-K-E-P-A-L), on its website, and in its domain names, including nikepal.com, nikepal.biz, nikepal.us, nikepal.tv, nikepal.info, and
nikepal.net.
III. N ’ S
By the late 1980s, United States sales of NIKE branded products were
over one billion dollars per year. Starting in 1991 and through the
mid 1990s, sales of NIKE products in the United States were approximately two billion dollars per year, and were above ﬁve billion dol2

Nikepal’s a orney a empted to convince the court that there is a pronunciation
diﬀerence between NIKE and NIKEPAL. In her questions during trial, for example,
she pronounced Nikepal’s mark as “nik-a-pal.” However, in answering her questions at trial, Mr. Sandhu, the president of Nikepal, alternated between the pronunciation of NIKEPAL as “nik-a-pal” and as “Ny-key-pal.” Further, Nike’s witness,
Joseph Sheehan, a former FBI agent and now a private investigator, provided a tape
recording of the outgoing message heard on Nikepal’s answering machine which
clearly pronounced the term “Nike” with long, or hard, vowels, that is an “i” like in
“bike” and “e” like in “key” identical to the pronunciation of the Nike’s trademark.

$)"15&3  53"%&."3,

lars per year by 1997. By 1997, Nike was the largest seller of athletic
footwear and apparel in the world. The geographic area of Nike’s
sales includes the United States and 140 countries throughout the
world. Since 1997, Nike has sold over 100,000,000 pairs of NIKE shoes
each year.
IV. A
P
NIKE M
Nike has undertaken signiﬁcant expense to promote the NIKE mark.
Nike advertises in various types of media, including traditional print
advertising, such as magazines (of both special and general interest),
newspapers (of general circulation), leaﬂets, and billboards. Nike
also advertises in electronic media, including radio, television, cable and internet, on sides of buildings, on taxi cabs, and through direct mailings. Nike’s television advertisements have run on network
channels and have reached national audiences. Nike has also promoted its mark by associating with athletes through endorsement
arrangements. By 1991, Nike was spending in excess of one hundred million dollars per year in the United States alone to advertise
products bearing the NIKE mark. By 1997, Nike had spent at least
$1,567,900,000.00 to promote the NIKE mark in the United States.
V. N
NIKE
The NIKE mark has been consistently ranked as a top brand in publications that survey the top brands each year. Since at least 1990, Nike
has been named one of the top forty (40) brands in the United States
based on the EquiTrend and other studies published in BrandWeek
and Financial World Magazine. Other brands ranked in such studies
include FRITO LAY, LEVI’S, CAMPBELLS’, HEWLETT-PACKARD,
SONY, PEPSI, and VISA. One story printed in Forbes magazine, reported a survey conducted by Young & Rubicam that ranked the
NIKE brand among the top ten (10) in the United States in 1996 with
COKE, DISNEY, and HALLMARK.
VI. E
A
A
A survey conducted by Phillip Johnson of Leo J. Shapiro and Associates (“Mr. Johnson’s survey”), a Chicago-based market research
ﬁrm, determined that a signiﬁcant number of Nikepal’s potential
laboratory customers actually associated NIKE with NIKEPAL. Mr.
Johnson is an expert at designing surveys that measure consumer behavior.
In designing his study, Mr. Johnson used a universe of survey participants randomly selected from lists of companies that Mr.
Sandhu’s deposition testimony identiﬁed as the sources for Nikepal’s
current and prospective customers. Mr. Johnson conducted the survey by phone and asked respondents about their perception of a website called nikepal.com. In designing his survey, Mr. Johnson chose

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

one of the ways that the NIKEPAL mark is used in commerce which
allowed him to reasonably recreate a purchasing context while obtaining a controlled and accurate measurement. Mr. Johnson testiﬁed that this survey replicated the circumstances in which people
typically encountered the NIKEPAL mark.
Once survey respondents were screened to conﬁrm that they were
the persons most responsible for ordering laboratory equipment at
their business, they were asked: “What if anything, came to your
mind when I ﬁrst said the word Nikepal?” Many survey respondents
who were not actually confused about the source of the Nikepal website nonetheless identiﬁed Nike. Mr. Johnson testiﬁed that his survey revealed that the vast majority of respondents, 87%, associated
Nikepal with Nike; that is, when they encounter the mark NIKEPAL,
they think of Nike and/or its oﬀerings.
C

L

I. D
Under the Federal Trademark Dilution Revision Act5 :
The owner of a famous mark that is distinctive, inherently or through acquired distinctiveness, shall 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.
15 U.S.C. § 1125(c)(1) (“TDRA”). To prevail on its dilution claim,
Nike must prove 1) that its mark was famous as of a date prior to
the ﬁrst use of the NIKEPAL mark and 2) that Nikepal’s use of its
allegedly diluting mark creates a likelihood of dilution by blurring
or tarnishment.6
5

The TDRA, signed into law on October 6, 2006, amended the previous federal
anti-dilution statute (the Federal Trademark Dilution Act (“FTDA”)). The TDRA
revises the FTDA in three ways: it establishes that likelihood of dilution, and not
actual dilution, is a prerequisite to establish a dilution claim; it sets forth four relevant factors courts may consider in determining famousness; and it also lists six
relevant factors that courts may consider in determining whether a likelihood of
dilution exists.
6
California’s anti-dilution statute, under which Nike also brings a claim, prescribes:
Likelihood of injury to business reputation or a dilution of the distinctive quality of a mark registered under this chapter, or a mark
valid at common law, or a trade name valid at common law, shall be
a ground for injunctive relief notwithstanding the absence of compe-

$)"15&3  53"%&."3,
A. Whether NIKE Was Famous Prior to the First Use of NIKEPAL

A “famous” mark is one that “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).
[The court quoted the four statutory factors.]
Since Nikepal’s ﬁrst use of NIKEPAL commenced in May 1998,
Nike must show that NIKE was famous before that date.
With regard to the ﬁrst factor, the evidence clearly establishes that
through various combinations of athlete endorsements, television, radio, print media, and billboard placements, NIKE was promoted nationally for more than two decades before 1998. By the 1990s, Nike
was had spent in excess of a billion dollars for promotion of NIKE
products in the United States.
With regard to the second factor, Nike’s sales of NIKE products
reached the billion dollar per year level in the United States well before May 1998. By 1997, Nike had spent in excess of one billion dollars
to promote the NIKE mark in the United States.
Nike also satisﬁes the third factor, since recognition of the success of NIKE has been recorded by various publications in surveys
and articles wri en prior to May 1998. Since the early 1990s, NIKE
has been consistently ranked as a top brand in brand surveys in the
United States and the world. Mr. Johnson, who in his professional
capacity is familiar with the reputation and methodology used in various brand surveys and literature, opined that these sources evinced
that NIKE was famous during the mid 1990s, before Nikepal adopted
its mark in 1998. Nikepal counters that only Nike’s Swoosh design
mark, and not the NIKE mark itself, is famous. However, Mr. Johnson’s survey revealed that when participants were exposed solely to
the word “Nike” without the Swoosh, the response overwhelmingly
indicated recognition of the NIKE mark.
Finally, with regard to the fourth factor, the NIKE mark is registered on the PTO’s principal register. Nike owns ten federal registrations for NIKE covering uses prior to 1998 which include retail
services, bags, footwear, apparel, heart monitors, electrical items and
paper products. Accordingly, the court concludes that NIKE was famous prior to Nikepal’s ﬁrst use of the NIKEPAL mark.
B. Likelihood of Dilution by Blurring
The TDRA deﬁnes dilution by blurring as an “association arising
from the similarity between a mark or trade name and a famous mark
tition between parties or the absence of confusion as to the source of
goods or services.
Cal. Bus. & Prof.Code § 14330. If Nike prevails on its federal dilution claim, it
will also prevail on its dilution claim under California law.

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

that impairs the distinctiveness of the famous mark.” 15 U.S.C. §
1125(c)(2)(A). [The court quoted the six statutory factors.]
(i) The Degree of Similarity
Marks in a dilution analysis must be identical or nearly identical. For
marks to be nearly identical to one another, they must be similar
enough that a signiﬁcant segment of the target group of customers
sees the two marks as essentially the same.
The parties’ marks are nearly identical. The NIKEPAL mark is a
composite of the word “Nike” with the term of aﬃnity, “pal.” The
composite nature of the NIKEPAL mark is evident in the logo selected
by the company which clearly features an “N” and a “P.” In each
case the dominant feature of the mark is the term “Nike.” In addition, the term “Nike” in both marks is pronounced identically with
an “i” like in “bike” and an “e” like in “key.” See Porsche Cars N. Am.
Inc. v. Spencer (ﬁnding that the trademark PORSCHE was diluted
by PORCHESOURCE.COM); see also Jada Toys, Inc. v. Ma el, Inc.
(concluding “that a reasonable trier of fact could ﬁnd that the HOT
WHEELS and HOT RIGZ marks are nearly identical.”).
Further, as shown by Mr. Johnson’s survey, the vast majority
of the survey respondents, representing a signiﬁcant segment of
Nikepal’s target customer group, associate Nike and/or its products
and services when they encounter the mark NIKEPAL, thus perceiving the two marks as essentially the same. Accordingly, this factor
favors Nike.
(ii) Distinctiveness
Nikepal does not dispute that NIKE is, at the very least, suggestive.
Accordingly, NIKE is inherently distinctive and this factor favors
Nike.
(iii) Substantially Exclusive Use
The law does not require that use of the famous mark be absolutely
exclusive, but merely “substantially exclusive.” Therefore, a limited
amount of third party use is insuﬃcient to defeat a showing of substantially exclusive use.
Nike asserts that its use of the NIKE mark is substantially exclusive. Nikepal introduced evidence of use of the term “Nike” in
the company name “Nike Hydraulics, Inc.,” through a bo le jack
purchased from the company and a 1958 trademark registration for
“Nike” owned by Nike Hydraulics. However, this evidence is insuﬃcient to disprove Nike’s claim that its use of NIKE is substantially exclusive. Even Nikepal’s witness, Roger Smith, admi ed that he had
not encountered Nike Hydraulics before hearing that name in connection with this action. Accordingly, the court ﬁnds that Nike’s use

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of the NIKE mark is substantially exclusive and this factor therefore
favors Nike.9
(iv) Degree of Recognition
The degree of recognition of NIKE is quite strong. Millions of NIKE
products are sold in the United States annually and the evidence
demonstrates that NIKE is readily recognized. This factor therefore
favors Nike.
(v) Intent to Create Association
Mr. Sandhu admi ed that he was aware of the existence of the NIKE
mark before he adopted the company name. Although he testiﬁed at
trial that he came up with the term Nikepal by opening the dictionary
to a random page and essentially ﬁnding that word by “fate,” his
testimony was not credible. Therefore, this factor favors Nike.
(vi) Actual Association
Nikepal registered the domain names nikepal.biz, nikepal.net,
nikepal.us, nikepal.info and nikepal.tv. The evidence shows that the
domain registrar assigned the domain names an “under construction”
page and then associated with that page promotions and advertisement links to a number of web pages that oﬀered NIKE products (or
products of Nike’s competitors in the shoe and apparel ﬁeld). Thus,
in the internet context, there is actual association between NIKEPAL
and NIKE.
Further, Mr. Johnson’s survey also evinced that there is a strong
degree of association between NIKEPAL and NIKE. Mr. Johnson’s survey showed over 87% of the people in Nikepal’s own customer pool associated the stimulus “Nikepal” with NIKE. The survey
presents ample proof of association between the marks to support a
ﬁnding that such exists in the general public. Accordingly, the court
ﬁnds that there is actual association between the NIKEPAL and NIKE
marks and this factor favors Nike.
In conclusion, since the six factors considered in the likelihood
of dilution analysis favor Nike, there is a likelihood that NIKE will
suﬀer dilution if Nikepal is allowed to continue its use of NIKEPAL.
Accordingly, Nike prevails on its federal and state dilution claims.
9

Nikepal also introduced evidence that the term “Nike” appears in dictionaries
referring to the Greek goddess of victory, that the image of Nike the goddess appeared on some Olympic medals, and that the United States Government named
one of its missile programs “Nike.” However, Nikepal did not show that these
uses were made in commerce in association with the sale or marketing of goods or
services as required under the TDRA. (See 15 U.S.C. § 1125(c) (1) (providing that
under the TDRA, only “use of a mark or trade name in commerce” is actionable as
diluting a famous mark.).)

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In each case, what kind or kinds of trademark infringement are at
stake: confusion about source, confusion about sponsorship, dilution by blurring, or dilution by tarnishment? Should a court ﬁnd
a violation of the trademark owner’s rights. (The respective marks
are TIFFANY’S for jewelry, I CAN’T BELIEVE IT’S NOT BUTTER!
for margarine, and NEW YORK STOCK EXCHANGE for securitiestrading services.)

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Section 15A of South Africa’s Merchandise Marks Act, as amended in
2002, provides that certain events may be designated as ”protected”
and that
For the period during which an event is protected, no person may use a trade mark in relation to such event in a
manner which is calculated to achieve publicity for that
trade mark and thereby to derive special promotional beneﬁt from the event, without the prior authority of the organiser of such event.
Note that ”a trade mark” need not be the mark of the event’s organizer – section 15A prohibits the use of any trademark in this manner.
In 2010, South Africa was the host nation for the FIFA World
Cup.Thirty-six women a ended the Netherlands-Denmark game
wearing orange dresses. Orange is the national color of the Netherlands, and also is used prominently in advertising for the Dutch beer
company Bavaria. Did Bavaria or the women violate section 15A? If
they had done this in the United States, would they have violated any
provisions of the Lanham Act?
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The image on the top is the world-famous label from JACK
DANIEL’S whiskey. The image on the right is the front cover of a
novel by Patrick Wensink. Infringement?
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These ”handbags” bearing the GUCCI logo are actually made of paper. In Chinese religious traditions, people burn them – along with
other paper eﬃgies of luxury goods and paper ”money” in denominations up to $5,000,000,00 – as oﬀerings to deceased relatives. Very
loosely, the idea is that doing so provides for the relatives’ comfort
in the afterlife. Does Gucci have the right under trademark law to
prevent the sale of these items bearing its trademarks?

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 64
[Ives sold the drug cyclandelate under the trademark CYCLOSPASMOL. Ives marketed the drug, a white powder, to wholesalers, retail
pharmacists, and hospitals in colored gelatin capsules. It used a blue
capsule, imprinted with ”Ives 4124,” for its 200 mg dosage and a combination blue-red capsule, imprinted with ”Ives 4148,” for its 400 mg
dosage. After Ives’ patent on cyclandelate expired, several generic
manufacturers, including the respondents, marketed cyclandelate in
200 mg and 400 mg capsules in colors identical to those selected by
Ives, but with no identifying marks or diﬀerent ones than Ives used.]
The generic manufacturers also follow a normal industry practice by promoting their products primarily by distribution of catalogs
to wholesalers, hospitals, and retail pharmacies, rather than by contacting physicians directly. The catalogs truthfully describe generic
cyclandelate as ”equivalent” or ”comparable” to CYCLOSPASMOL.
In addition, some of the catalogs include price comparisons of the
generic drug and CYCLOSPASMOL and some refer to the color of
the generic capsules. The generic products reach wholesalers, hospitals, and pharmacists in bulk containers which correctly indicate the
manufacturer of the product contained therein.
A pharmacist, regardless of whether he is dispensing CYCLOSPASMOL or a generic drug, removes the capsules from the container in which he receives them and dispenses them to the consumer
in the pharmacist’s own bo le with his own label a ached. Hence,
the ﬁnal consumer sees no identifying marks other than those on the
capsules themselves.
[Ives sued for trademark infringement. It alleged that some druggists ignored physicians’ wri en instructions to dispense only CY-

& */'3*/(&.&/5 130)*#*5&% $0/%6$5

CLOSPASMOL and dispensed generic products instead, and that
some druggists mislabeled generic drugs as CYCLOSPASMOL.] Ives
contended that the generic manufacturers’ use of look-alike capsules
and of catalog entries comparing prices and revealing the colors of
the generic capsules induced pharmacists illegally to substitute a
generic drug for CYCLOSPASMOL and to mislabel the substitute
drug CYCLOSPASMOL. Although Ives did not allege that the petitioners themselves applied the Ives trademark to the drug products
they produced and distributed, it did allege that the petitioners contributed to the infringing activities of pharmacists who mislabeled
generic cyclandelate.
As the lower courts correctly discerned, liability for trademark
infringement can extend beyond those who actually mislabel goods
with the mark of another. Even if a manufacturer does not directly
control others in the chain of distribution, it can be held responsible
for their infringing activities under certain circumstances. Thus, 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.
It is undisputed that those pharmacists who mislabeled generic
drugs with Ives’ registered trademark violated § 32. However,
whether these petitioners were liable for the pharmacists’ infringing
acts depended upon whether, in fact, the petitioners intentionally induced the pharmacists to mislabel generic drugs or, in fact, continued
to supply cyclandelate to pharmacists whom the petitioners knew
were mislabeling generic drugs.

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I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiﬀ is the registered owner of the Marlboro word mark and
the Marlboro Roof Design label mark (collectively, the “Marlboro
Marks”), which it uses in connection with its tobacco products. Plaintiﬀ initiated the present suit against numerous defendants, including
Defendant Motohiro Miyagi (“Miyagi”).
Evidence submi ed by Plaintiﬀ, along with the Aﬃdavits, indicates that Miyagi is a sales and distribution agent for Metrich International Company, a Chinese company that manufactures counterfeit
cigare es. Miyagi admits that, since 1999, he has been managing and
arranging for the sale of these goods, which he knows are counterfeit.
For his services, Miyagi receives a $10.00 commission per case.
Plaintiﬀ alleges that Miyagi orchestrated a conspiracy to illegally

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import 978 master cases of counterfeit Marlboro cigare es into the
United States.6 In August 2003, Miyagi obtained control over a large
quantity of counterfeit Marlboro cigare es manufactured by Metrich.
The goods were stored in a warehouse in Curaçao, Netherlands Antilles. Miyagi was responsible for ﬁnding people to purchase the
goods. To assist him, Miyagi contacted Florida-based Julian Balea
and arranged for Balea, and his company, Synergy Trading Group,
Inc., to advertise and oﬀer the counterfeit cigare es for sale to buyers
in the United States. Acting as Miyagi’s agent, Balea advertised the
counterfeit Marlboro cigare es for sale on an Internet website.
William Lee and Felipe Castaneda, partners doing business together in El Paso, Texas, as the Kagro Company, responded to the
Internet advertisement, and oﬀered to buy the counterfeit cigare es.
According to the sales invoice, Balea, Lee, and Castaneda reached a
deal whereby Kagro agreed to purchase 1,960 master cases of counterfeit Marlboro cigare es. At his deposition, Balea testiﬁed that Miyagi
dictated the terms of the deal and retained ﬁnal authority to approve
the transaction.
Once the deal was negotiated, Miyagi prepared to ship the counterfeit cigare es from Curaçao to the United States. He enlisted the
services of John Tominelli (“Tominelli”) and his company, Southeastern Cargo Services, Inc. (“Southeastern”), to inspect the goods in Curaçao. Miyagi traveled to Curaçao and a ended the inspection. After inspecting the goods, Tominelli issued a report that listed their
quantity, packaging, and freshness. In the report, the cigare es were
falsely described as “Made Under Authority of Philip Morris Products S.A., Neuchatel, Swi erland.” Once the inspection was complete, Miyagi released the counterfeit cigare es to Tominelli, who
shipped them to Lee and Castaneda in El Paso, Texas.
On October 8, 2003, the United States Bureau of Customs and Border Protection (“Customs”) notiﬁed Plaintiﬀ that it seized a shipment
of counterfeit Marlboro cigare es at the Port of Houston, Texas. The
cigare es had been shipped from Curaçao and were destined for El
Paso, Texas.
III. ANALYSIS
Plaintiﬀ submits that Miyagi used the Marlboro Marks in commerce
when he oﬀered for sale, sold, and imported counterfeit cigare es.
The extent of Miyagi’s participation in this venture, and speciﬁcally
in these activities, remains unclear. It is well established that persons other than Miyagi directly conducted the relevant transactions.
For example, Balea individually, and through his company, Synergy, organized the sales transaction by advertising the availability
6

In each master case, there are ﬁfty cartons, and in each carton, there are ten
packages of cigare es. Each package contains twenty cigare es.

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of the goods, contacting the buyers, and receiving the payment of
funds. At his deposition, Lee testiﬁed that he dealt only with Synergy, and was unaware of Miyagi’s existence. Tominelli performed
the inspection and shipped the goods. Indeed, Miyagi’s name appears on neither the sales invoice nor the inspection report. Thus,
one may arguably question whether Miyagi directly imported counterfeit cigare es. This ﬁnding, however, does not shield Miyagi from
liability. The Court must look to whether Miyagi is liable for conduct
that constitutes unlawful infringement under a theory of vicarious
liability.
To hold a party liable for the infringing activities of another, a
plaintiﬀ must prove that the party had (1) a direct ﬁnancial interest
in the infringing activity, and (2) the right and ability to supervise the
infringing party’s acts or activities which caused the infringement.
Taylor Made Golf Co. v. MJT Consulting Group (holding a defendant
personally liable for infringement where he procured and inspected
the goods and signed the purchase agreement, though another entity
ultimately sold the goods); Playboy Enters. v. Webbworld, Inc. (holding
an employer liable for an employee’s infringement where the former
had supervisory authority over the la er’s activities).
There is undisputed evidence that Miyagi had a direct ﬁnancial
interest and control over the sale and importation of the counterfeit
cigare es into the United States. Miyagi admits Metrich paid him a
commission for each case of cigare es he sold.
There is also evidence that Miyagi had a right and ability to supervise Balea’s unlawful activities. Miyagi admits that he controlled the
counterfeit Marlboro cigare es as part of his responsibility to maintain and sell them for Metrich. It is Miyagi who hired Balea and
Synergy to assist him with the sale, retaining signiﬁcant authority
over the transaction. At his deposition, Balea testiﬁed about his belief
that Miyagi was the actual seller of the goods. Balea understood that
Miyagi dictated the price of the goods and could exercise control over
the terms of the sale to Lee and Castaneda. Miyagi selected Tominelli
and Southeastern to perform an inspection and verify the goods. In
fact, Miyagi was present at the inspection and authorized the release
of goods upon veriﬁcation. Miyagi’s a empted disclaimer of responsibility on the grounds that he did not know the identity of the buyers
or that they lived in the United States is undercut by his admission
that he knew that “the buyers [were] located in Texas.” Thus, there is
evidence that Miyagi used the Marlboro Marks in commerce when he,
acting through Balea, sold and imported counterfeit cigare es into
the United States. Accordingly, the Court holds Miyagi actions constitute “use in commerce.”
Having shown that Miyagi used the Marlboro Marks in commerce
when he sold and imported counterfeit cigare es, Plaintiﬀ is entitled

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to summary judgment against Miyagi for violating §§ 32 and 43(a) of
the Lanham Act.

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(c) …
(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 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 these are statutory defenses to trademark dilution. They are
all based on well-established defenses to trademark infringement ﬁrst
recognized by the courts. As you read the materials in this section,
consider the extent to which the statutory codiﬁcation does or does
not track the common-law defenses recognized by the courts.

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Even when a descriptive term has acquired a secondary meaning sufﬁcient to warrant trademark protection, others may be entitled to
use the mark without incurring liability for trademark infringement.
When the allegedly infringing term is “used fairly and in good faith
only to describe to users the goods or services of [a] party, or their
geographic origin,” Lanham Act § 33(b)(4), 15 U.S.C. § 1115(b)(4), a

' %&'&/4&4

defendant in a trademark infringement action may assert the “fair
use” defense. The defense is available only in actions involving descriptive terms and only when the term is used in its descriptive sense
rather than its trademark sense. In essence, the fair use defense prevents a trademark registrant from appropriating a descriptive term
for its own use to the exclusion of others, who may be prevented
thereby from accurately describing their own goods. The holder of a
protectable descriptive mark has no legal claim to an exclusive right
in the primary, descriptive meaning of the term; consequently, anyone is free to use the term in its primary, descriptive sense so long as
such use does not lead to customer confusion as to the source of the
goods or services.
Zatarain’s term FISH-FRI is a descriptive term that has acquired
a secondary meaning in the New Orleans area. Although the trademark is valid by virtue of having acquired a secondary meaning, only
that penumbra or fringe of secondary meaning is given legal protection. Zatarain’s has no legal claim to an exclusive right in the original, descriptive sense of the term; therefore, Oak Grove and Visko’s
are still free to use the words “ﬁsh fry” in their ordinary, descriptive
sense, so long as such use will not tend to confuse customers as to the
source of the goods.
The record contains ample evidence to support the district court’s
determination that Oak Grove’s and Visko’s use of the words “ﬁsh
fry” was fair and in good faith. Testimony at trial indicated that the
appellees did not intend to use the term in a trademark sense and had
never a empted to register the words as a trademark. Oak Grove
and Visko’s apparently believed “ﬁsh fry” was a generic name for
the type of coating mix they manufactured. In addition, Oak Grove
and Visko’s consciously packaged and labelled their products in such
a way as to minimize any potential confusion in the minds of consumers. The dissimilar trade dress of these products prompted the
district court to observe that confusion at the point of purchase — the
grocery shelves — would be virtually impossible. Our review of the
record convinces us that the district court’s determinations are correct. We hold, therefore, that Oak Grove and Visko’s are entitled to
fair use of the term “ﬁsh fry” to describe their products; accordingly,
Zatarain’s claim of trademark infringement must fail.9
9

The district court also rejected Zatarain’s claims of unfair competition under
the Lanham Act § 43(a) and La. Rev. Stat. Ann. § 51:1405(A), relying upon the
absence of any likelihood of confusion between the products of Zatarain’s, Oak
Grove, and Visko’s. We aﬃrm these conclusions also.
It would make no sense to characterize defendant’s use as “fair” within the meaning of the Lanham Act for the purposes of a trademark infringement claim and at
the same time characterize his use as “unfair” for the purpose of a section 43(a)
unfair competition claim under the same statute.

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The individual plaintiﬀs perform professionally as The New Kids on
the Block, reputedly one of today’s ho est 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.
B
No longer are entertainers limited to their craft in marketing themselves to the public. This is the age of the multi-media publicity
bli krieg: 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 ho est 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 Star’s announcement, under a picture of the New Kids, went to
the heart of the ma er: “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 ho est with our readers.
Readers

were

directed

to

a

900

number

to

regis-

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ter

their

votes;

each

call

cost

95

cents

per

minute.1

D
I
A.
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. (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 nonentrance 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. [Examples cited:
”shredded wheat” for cereal and ”air shu le” for hourly airline 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 ma er 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 a ribute of a product. If the trademark holder were
allowed exclusive rights in such use, the language would be depleted
in such 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. Once again, the courts will hold as a ma er
of law that the original producer does not sponsor or endorse another
1

The USA Today poll generated less than $300 in revenues, all of which the newspaper donated to the Ber- klee College of Music. The Star’s poll generated about
$1600.

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product that uses his mark in a descriptive manner. [Example cited:
”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, 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:
The words “Boston Marathon” do more than call a ention 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

' %&'&/4&4

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. Similarly, competitors may use a rival’s trademark in advertising and other channels of communication
if the use is not false or misleading..
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.
Indeed, we may generalize a class of cases where the use of the trademark does not a empt to capitalize on consumer confusion or to appropriate the cachet of one product for a diﬀerent one. 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 sourceidentiﬁcation 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. “When
the mark is used in a way that does not deceive the public we see no
such sanctity in the word as to prevent its being used to tell the truth.”
Prestone es, Inc. v. Coty (Holmes, J.).
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;7 and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or
endorsement by the trademark holder.
7

Thus, a soft drink competitor would be entitled to compare its product to CocaCola or Coke, but would not be entitled to use Coca-Cola’s distinctive le ering.

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B.

The New Kids do not claim there was anything false or misleading
about the newspapers’ use of their mark. Rather, the ﬁrst seven
causes of action, while purporting to state diﬀerent claims, all hinge
on one key factual allegation: that the newspapers’ use of the New
Kids name in conducting the unauthorized polls somehow implied
that the New Kids were sponsoring the polls. It is no more reasonably
possible, however, to refer to the New Kids as an entity than it is to
refer to the Chicago Bulls, Volkswagens or the Boston Marathon without using the trademark. Indeed, how could someone not conversant
with the proper names of the individual New Kids talk about the
group at all? While plaintiﬀs’ trademark certainly deserves protection against copycats and those who falsely claim that the New Kids
have endorsed or sponsored them, such protection does not extend
to rendering newspaper articles, conversations, polls and comparative advertising impossible. The ﬁrst nominative use requirement is
therefore met.
Also met are the second and third requirements. Both The Star
and USA Today reference the New Kids only to the extent necessary
to identify them as the subject of the polls; they do not use the New
Kids’ distinctive logo or anything else that isn’t needed to make the
announcements intelligible to readers. Finally, nothing in the announcements suggests joint sponsorship or endorsement by the New
Kids. The USA Today announcement implies quite the contrary by
asking whether the New Kids might be “a turn oﬀ.” The Star’s poll is
more eﬀusive but says nothing that expressly or by fair implication
connotes endorsement or joint sponsorship on the part of the New
Kids.
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 Vokswagenwerk, WCVB-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’

' %&'&/4&4

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. See, e.g., Universal City Studios, Inc. v. Ideal Publishing
Corp. (magazine’s use of TV program’s trademark “Hardy Boys” in
connection with photographs of show’s stars not infringing). 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 Job’s Daughters. 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.9
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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Appellant R. G. Smith, doing business as Ta’Ron, Inc., advertised a
fragrance called ‘Second Chance’ as a duplicate of appellees’ ‘Chanel
No. 5,’ at a fraction of the la er’s price.1 Appellees were granted a
preliminary injunction prohibiting any reference to Chanel No. 5 in
the promotion or sale of appellants’ product. This appeal followed.
9

Consider, for example, a cartoon which appeared in a recent edition of a humor magazine: The top panel depicts a man in medieval garb hanging a poster
announcing a performance of ”The New Kids on the Block” to an excited group of
onlookers. The lower panel shows the ﬁve New Kids, drawn in caricature, hands
tied behind their backs, kneeling before ”The Chopping Block” awaiting execution.
Cracked # 17 (inside back cover) (Aug. 1992). Cruel? No doubt — but easily within
the realm of satire and parody.

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The action rests upon a single advertisement published in ‘Specialty Salesmen,’ a trade journal directed to wholesale purchasers.
The advertisement oﬀered ‘The Ta’Ron Line of Perfumes’ for sale. It
gave the seller’s address as ‘Ta’Ron Inc., 26 Harbor Cove, Mill Valley,
Calif.’ It stated that the Ta’Ron perfumes ‘duplicate 100% Perfect the
exact scent of the world’s ﬁnest and most expensive perfumes and
colognes at prices that will zoom sales to volumes you have never
before experienced.’ It repeated the claim of exact duplication in a
variety of forms.
The advertisement suggested that a ‘Blindfold Test’ be used ‘on
skeptical prospects,’ challenging them to detect any diﬀerence between a well known fragrance and the Ta’Ron ‘duplicate.’ One suggested challenge was, ‘We dare you to try to detect any diﬀerence
between Chanel #5 (25.00) and Ta’Ron’s 2nd Chance. $7.00.’
In an order blank printed as part of the advertisement each Ta’Ron
fragrance was listed with the name of the well known fragrance
which it purportedly duplicated immediately beneath. Below ‘Second Chance’ appeared ‘*(Chanel #5).’ The asterisk referred to a statement at the bo om of the form reading ‘Registered Trade Name of
Original Fragrance House.’
Appellees conceded below and concede here that appellants ‘have
the right to copy, if they can, the unpatented formula of appellees’
product.’ Moreover, for the purposes of these proceedings, appellees
assume that ‘the products manufactured and advertised by (appellants) are in fact equivalents of those products manufactured by appellees.’ Finally, appellees disclaim any contention that the packaging or labeling of appellants’ ‘Second Chance’ is misleading or con-

' %&'&/4&4

fusing.4
I
The principal question presented on this record is whether one who
has copied an unpatented product sold under a trademark may use
the trademark in his advertising to identify the product he has copied.
We hold that he may, and that such advertising may not be enjoined
under either the Lanham Act or the common law of unfair competition, so long as it does not contain misrepresentations or create a reasonable likelihood that purchasers will be confused as to the source,
identity, or sponsorship of the advertiser’s product.
This conclusion is supported by direct holdings in Saxlehner v.
Wagner and Societe Comptoir de L’Industrie Cotonniere Etablissements
Boussac v. Alexander’s Dept. Stores, Inc..
In Saxlehner the copied product was a ‘bi er water’ drawn from
certain privately owned natural springs. The plaintiﬀ sold the natural water under the name ‘Hunyadi Janos,’ a valid trademark. The
defendant was enjoined from using plaintiﬀ’s trademark to designate
defendant’s ‘artiﬁcial’ water, but was permi ed to use it to identify
plaintiﬀ’s natural water as the product which defendant was copying.
Justice Holmes wrote:
We see no reason for disturbing the ﬁnding of the courts
below that there was no unfair competition and no fraud.
The real intent of the plaintiﬀ’s bill, it seems to us, is to
extend the monopoly of such trademark or tradename as
she may have to a monopoly of her type of bi er water, by
preventing manufacturers from telling the public in a way
that will be understood, what they are copying and trying
to sell. But the plaintiﬀ has no patent for the water, and the
defendants have a right to reproduce it as nearly as they
can. They have a right to tell the public what they are doing, and to get whatever share they can in the popularity
of the water by advertising that they are trying to make
the same article, and think that they succeed. If they do
not convey, but, on the contrary, exclude, the notion that
they are selling the plaintiﬀ’s goods, it is a strong proposition that when the article has a well-known name they
have not the right to explain by that name what they imitate. By doing so, they are not trying to get the good will
of the name, but the good will of the goods.
4

Appellants’ product was packaged diﬀerently from appellees’, and the only
words appearing on the outside of appellants’ packages were ‘Second Chance Perfume by Ta’Ron.’ The same words appeared on the front of appellants’ bo les;
the words ‘Ta’Ron trademark by International Fragrances, Inc., of Dallas and New
York’ appeared on the back.

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In Societe Comptoir, the defendant used plaintiﬀ’s registered trademarks ‘Dior’ and ‘Christian Dior’ in defendant’s advertising in identifying plaintiﬀ’s dresses as the original creations from which defendant’s dresses were copied.1 The district court refused to grant a preliminary injunction.
The appellate court considered plaintiﬀ’s rights under both the
Lanham Act and common law. Noting that the representation that
defendant’s dresses were copies of ‘Dior’ originals was apparently
truthful and that there was no evidence of deception or confusion
as to the origin or sponsorship of defendant’s garments, the court
disposed of the claim of right under the Lanham Act as follows:
The Lanham Act does not prohibit a commercial rival’s
truthfully denominating his goods a copy of a design in
the public domain, though he uses the name of the designer to do so. Indeed it is diﬃcult to see any other means
that might be employed to inform the consuming public
of the true origin of the design.
We have found no holdings by federal or California appellate courts
contrary to the rule of these cases. Moreover, the principle for which
they stand – that use of another’s trademark to identify the trademark
owner’s product in comparative advertising is not prohibited by either statutory or common law, absent misrepresentation regarding
the products or confusion as to their source or sponsorship – is also
generally approved by secondary authorities.
The rule rests upon the traditionally accepted premise that the
only legally relevant function of a trademark is to impart information as to the source or sponsorship of the product. Appellees argue
that protection should also be extended to the trademark’s commercially more important function of embodying consumer good will created through extensive, skillful, and costly advertising. The courts,
however, have generally conﬁned legal protection to the trademark’s
source identiﬁcation function for reasons grounded in the public policy favoring a free, competitive economy.
Preservation of the trademark as a means of identifying the trademark owner’s products, implemented both by the Lanham Act and
the common law, serves an important public purpose. It makes eﬀective competition possible in a complex, impersonal marketplace by
providing a means through which the consumer can identify products which please him and reward the producer with continued pa1

Defendant described its dresses in newspaper advertisements as copies of
Dior’s original creations. Tags were hung on each garment reading ‘Original by
Christian Dior – Alexander’s Exclusive – Paris—Adaptation.’ ‘Dior’ or ‘Christian
Dior’ appeared more than a dozen times in a singing commercial on defendant’s
television fashion show.

' %&'&/4&4

tronage. Without some such method of product identiﬁcation, informed consumer choice, and hence meaningful competition in quality, could not exist. On the other hand, it has been suggested that protection of trademark values other than source identiﬁcation would
create serious anti-competitive consequences with li le compensating public beneﬁt.
As Justice Holmes wrote in Saxlehner, the practical eﬀect of such
a rule would be to extend the monopoly of the trademark to a
monopoly of the product. The monopoly conferred by judicial protection of complete trademark exclusivity would not be preceded by examination and approval by a governmental body, as is the case with
most other government-granted monopolies. Moreover, it would not
be limited in time, but would be perpetual.
A large expenditure of money does not in itself create legally protectable rights. Appellees are not entitled to monopolize the public’s
desire for the unpatented product, even though they themselves created that desire at great eﬀort and expense.
Disapproval of the copyist’s opportunism may be an understandable ﬁrst reaction, but this initial response to the problem has been
curbed in deference to the greater public good. By taking his free
ride, the copyist, albeit unintentionally, serves an important public
interest by oﬀering comparable goods at lower prices. Appellants’
advertisement makes it clear that the product they oﬀer is their own.
If it proves to be inferior, they, not appellees, will bear the burden of
consumer disapproval.25
We are satisﬁed, therefore, that both authority and reason require
a holding that in the absence of misrepresentation or confusion as to
source or sponsorship a seller in promoting his own goods may use
the trademark of another to identify the la er’s goods.

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 64
Petitioner is a manufacturer of spark plugs which it sells under the
trade mark ‘Champion.’ Respondents collect the used plugs, repair
and recondition them, and resell them. Respondents retain the word
‘Champion’ on the repaired or reconditioned plugs. The outside box
or carton in which the plugs are packed has stamped on it the word
25

In addition, if appellants’ speciﬁc claims of equivalence are false, appellees may
have a remedy under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). [Ed: On remand, the District Court found that ”The results of gas chromatograph tests prove
that the chemical composition of ’Second Chance’ is not identical to that of ’Chanel
No. 5,’” and thus the defendant had violated § 43(a). Smith v. Chanel, No. 45647
GBH, 1973 WL 19871, at *3 (N.D. Cal. May 22, 1973).]

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‘Champion,’ together with the le er and ﬁgure denoting the particular style or type. They also have printed on them ‘Perfect Process
Spark Plugs Guaranteed Dependable’ and ‘Perfect Process Renewed
Spark Plugs.’ Each carton contains smaller boxes in which the plugs
are individually packed. These inside boxes also carry legends indicating that the plug has been renewed. But respondent company’s
business name or address is not printed on the cartons. On each individual plug is stamped in small le ers, blue on black, the word
‘Renewed,’ which at time is almost illegible.
We are dealing here with second-hand goods. The spark plugs,
though used, are nevertheless Champion plugs and not those of another make. There is evidence to support what one would suspect,
that a used spark plug which has been repaired or reconditioned
does not measure up to the speciﬁcations of a new one. But the
same would be true of a second-hand Ford or Chevrolet car. And
we would not suppose that one could be enjoined from selling a car
whose valves had been reground and whose piston rings had been
replaced unless he removed the name Ford or Chevrolet. Prestone es
was a case where toilet powders had as one of their ingredients a
powder covered by a trade mark and where perfumes which were
trade marked were rebo led and sold in smaller bo les. The Court
sustained a decree denying an injunction where the prescribed labels
told the truth. Mr. Justice Holmes stated, ”A trade-mark only gives
the right to prohibit the use of it so far as to protect the owner’s good
will against the sale of another’s product as his. *When the mark is
used in a way that does not deceive the public we see no such sanctity in the word as to prevent its being used to tell the truth. It is not
taboo.”
Cases may be imagined where the reconditioning or repair would
be so extensive or so basic that it would be a misnomer to call the article by its original name, even though the words ‘used’ or ‘repaired’
were added. But no such practice is involved here. The repair or
reconditioning of the plugs does not give them a new design. It is
no more than a restoration, so far as possible, of their original condition. The type marks a ached by the manufacturer are determined
by the use to which the plug is to be put. But the thread size and
size of the cylinder hole into which the plug is ﬁ ed are not aﬀected
by the reconditioning. The heat range also has relevance to the type
marks. And there is evidence that the reconditioned plugs are inferior so far as heat range and other qualities are concerned. But inferiority is expected in most second-hand articles. Indeed, they generally
cost the customer less. That is the case here. Inferiority is immaterial
so long as the article is clearly and distinctively sold as repaired or
reconditioned rather than as new. The result is, of course, that the
second-hand dealer gets some advantage from the trade mark. But

' %&'&/4&4

under the rule of Prestone es that is wholly permissible so long as the
manufacturer is not identiﬁed with the inferior qualities of the product resulting from wear and tear or the reconditioning by the dealer.
Full disclosure gives the manufacturer all the protection to which he
is entitled.
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Plaintiﬀ’s pro se complaint is at times diﬃcult to understand, but
his claims ultimately revolve around the same conduct: Amazon allegedly engaged in counterfeiting and displayed and sold counterfeit
copies of his books featuring his tradename and trademark. Plaintiﬀ
claims that his trademarks include the name “Henrie a Press” and
a symbol “comprised of an open book with pages emerging therefrom.”
Plaintiﬀ does not plausibly allege that the books sold through
Amazon were anything other than authentic original copies protected
under the ﬁrst-sale doctrine. Even if Amazon’s actions were not protected by the ﬁrst-sale doctrine, Plaintiﬀ’s claim alleging consumer
confusion fails for additional reasons. Amazon argues that the allegation that Amazon caused confusion by suggesting that Plaintiﬀ is
aﬃliated with Amazon fails to state a “false endorsement” claim under the Lanham Act.
Plaintiﬀ’s claim centers on individuals re-selling copies of his
books through Amazon’s website without Plaintiﬀ’s permission. The
mere fact that Amazon oﬀers a platform to third-party sellers to sell
various products and, subsequently, those individuals sold Plaintiﬀ’s
books, does not imply that Plaintiﬀ has endorsed Amazon or has any
speciﬁc aﬃliation with Amazon. This is not the reality of commerce.
As a comparison, a shopper at a bookstore does not automatically
believe that just because a used book is appearing at the store, the
author is expressly endorsing that store. The same is true for a book
that is resold on Amazon.

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Louis Vui on Malletier S.A., a French corporation located in Paris,
that manufactures luxury luggage, handbags, and accessories, commenced this action against Haute Diggity Dog, LLC, a Nevada corporation that manufactures and sells pet products nationally, alleging
trademark infringement under 15 U.S.C. § 1114(1)(a), trademark dilution under 15 U.S.C. § 1125(c), copyright infringement under 17 U.S.C.

$)"15&3  53"%&."3,

§ 501, and related statutory and common law violations. Haute Diggity Dog manufactures, among other things, plush toys on which
dogs can chew, which, it claims, parody famous trademarks on luxury products, including those of Louis Vui on Malletier. The particular Haute Diggity Dog chew toys in question here are small imitations
of handbags that are labeled “Chewy Vuiton” and that mimic Louis
Vui on Malletier’s LOUIS VUITTON handbags.

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I
Louis Vui on Malletier S.A. (“LVM”) is a well known manufacturer
of luxury luggage, leather goods, handbags, and accessories, which
it markets and sells worldwide. In connection with the sale of its
products, LVM has adopted trademarks and trade dress that are well
recognized and have become famous and distinct. Indeed, in 2006,
Business Week ranked LOUIS VUITTON as the 17th “best brand” of all
corporations in the world and the ﬁrst “best brand” for any fashion
business.
LVM has registered trademarks for “LOUIS VUITTON,” in connection with luggage and ladies’ handbags (the “LOUIS VUITTON
mark”); for a stylized monogram of “LV,” in connection with traveling bags and other goods (the “LV mark”); and for a monogram
canvas design consisting of a canvas with repetitions of the LV mark
along with four-pointed stars, four-pointed stars inset in curved diamonds, and four-pointed ﬂowers inset in circles, in connection with
traveling bags and other products (the “Monogram Canvas mark”).
In 2002, LVM adopted a brightly-colored version of the Monogram
Canvas mark in which the LV mark and the designs were of various
colors and the background was white (the “Multicolor design”), created in collaboration with Japanese artist Takashi Murakami. For the
Multicolor design, LVM obtained a copyright in 2004. In 2005, LVM
adopted another design consisting of a canvas with repetitions of the
LV mark and smiling cherries on a brown background (the “Cherry
design”).
As LVM points out, the Multicolor design and the Cherry design
a racted immediate and extraordinary media a ention and publicity in magazines such as Vogue, W, Elle, Harper’s Bazaar, Us Weekly,
Life and Style, Travel & Leisure, People, In Style, and Jane. The press
published photographs showing celebrities carrying these handbags,
including Jennifer Lopez, Madonna, Eve, Elizabeth Hurley, Carmen
Electra, and Anna Kournikova, among others. When the Multicolor
design ﬁrst appeared in 2003, the magazines typically reported, “The
Murakami designs for Louis Vui on, which were the hit of the summer, came with hefty price tags and a long waiting list.” People Magazine said, “the wait list is in the thousands.” The handbags retailed
in the range of $995 for a medium handbag to $4500 for a large travel

' %&'&/4&4

bag. The medium size handbag that appears to be the model for the
“Chewy Vuiton” dog toy retailed for $1190. The Cherry design appeared in 2005, and the handbags including that design were priced
similarly — in the range of $995 to $2740. LVM does not currently
market products using the Cherry design.
The original LOUIS VUITTON, LV, and Monogram Canvas
marks, however, have been used as identiﬁers of LVM products continuously since 1896.
During the period 2003-2005, LVM spent more than $48 million advertising products using its marks and designs, including more than
$4 million for the Multicolor design. It sells its products exclusively
in LVM stores and in its own instore boutiques that are contained
within department stores such as Saks Fifth Avenue, Bloomingdale’s,
Neiman Marcus, and Macy’s. LVM also advertises its products on
the Internet through the speciﬁc websites www.louisvui on.com and
www.eluxury.com.
Although be er known for its handbags and luggage, LVM also
markets a limited selection of luxury pet accessories – collars, leashes,
and dog carriers – which bear the Monogram Canvas mark and the
Multicolor design. These items range in price from approximately
$200 to $1600. LVM does not make dog toys.
Haute Diggity Dog, LLC, which is a relatively small and relatively
new business located in Nevada, manufactures and sells nationally
– primarily through pet stores – a line of pet chew toys and beds
whose names parody elegant high-end brands of products such as
perfume, cars, shoes, sparkling wine, and handbags. These include
— in addition to Chewy Vuiton (LOUIS VUITTON) — Chewnel No.
5 (Chanel No. 5), Furcedes (Mercedes), Jimmy Chew (Jimmy Choo),
Dog Perignonn (Dom Perignon), Sniﬀany & Co. (Tiﬀany & Co.),
and Dogior (Dior). The chew toys and pet beds are plush, made of
polyester, and have a shape and design that loosely imitate the signature product of the targeted brand. They are mostly distributed
and sold through pet stores, although one or two Macy’s stores carries Haute Diggity Dog’s products. The dog toys are generally sold
for less than $20, although larger versions of some of Haute Diggity
Dog’s plush dog beds sell for more than $100.
Haute Diggity Dog’s “Chewy Vuiton” dog toys, in particular,
loosely resemble miniature handbags and undisputedly evoke LVM
handbags of similar shape, design, and color.
In lieu of the LOUIS VUITTON mark, the dog toy uses “Chewy
Vuiton”; in lieu of the LV mark, it uses “CV”; and the other symbols
and colors employed are imitations, but not exact ones, of those used
in the LVM Multicolor and Cherry designs.
II

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LVM contends ﬁrst that Haute Diggity Dog’s marketing and sale of
its “Chewy Vuiton” dog toys infringe its trademarks because the advertising and sale of the “Chewy Vuiton” dog toys is likely to cause
confusion.
To prove trademark infringement, LVM must show (1) that it
owns a valid and protectable mark; (2) that Haute Diggity Dog uses a
“re-production, counterfeit, copy, or colorable imitation” of that mark
in commerce and without LVM’s consent; and (3) that Haute Diggity
Dog’s use is likely to cause confusion. The validity and protectability of LVM’s marks are not at issue in this case, nor is the fact that
Haute Diggity Dog uses a colorable imitation of LVM’s mark. Therefore, we give the ﬁrst two elements no further a ention. To determine whether the “Chewy Vuiton” product line creates a likelihood
of confusion, we have identiﬁed several nonexclusive factors to consider: (1) the strength or distinctiveness of the plaintiﬀ’s mark; (2) the
similarity of the two marks; (3) the similarity of the goods or services
the marks identify; (4) the similarity of the facilities the two parties
use in their businesses; (5) the similarity of the advertising used by
the two parties; (6) the defendant’s intent; and (7) actual confusion.
See Pizzeria Uno Corp. v. Temple. These Pizzeria Uno factors are not always weighted equally, and not all factors are relevant in every case.
Because Haute Diggity Dog’s arguments with respect to the Pizzeria Uno factors depend to a great extent on whether its products and
marks are successful parodies, we consider ﬁrst whether Haute Diggity Dog’s products, marks, and trade dress are indeed successful
parodies of LVM’s marks and trade dress.
For trademark purposes, 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. A parody 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. This second message must not only diﬀerentiate the alleged parody from the original but must also communicate some articulable element of satire, ridicule, joking, or amusement. Thus, a parody relies upon a diﬀerence from the original mark,
presumably a humorous diﬀerence, in order to produce its desired effect. Jordache Enterprises, Inc. v. Hogg Wyld, Ltd. (ﬁnding the use of
“Lardashe” jeans for larger women to be a successful and permissible
parody of “Jordache” jeans).
When applying the PETA criteria to the facts of this case, we agree
with the district court that the “Chewy Vuiton” dog toys are successful parodies of LVM handbags and the LVM marks and trade dress
used in connection with the marketing and sale of those handbags.
First, the pet chew toy is obviously an irreverent, and indeed intentional, representation of an LVM handbag, albeit much smaller and

' %&'&/4&4

coarser. The dog toy is shaped roughly like a handbag; its name
“Chewy Vuiton” sounds like and rhymes with LOUIS VUITTON; its
monogram CV mimics LVM’s LV mark; the repetitious design clearly
imitates the design on the LVM handbag; and the coloring is similar. In short, the dog toy is a small, plush imitation of an LVM handbag carried by women, which invokes the marks and design of the
handbag, albeit irreverently and incompletely. No one can doubt that
LVM handbags are the target of the imitation by Haute Diggity Dog’s
“Chewy Vuiton” dog toys.
At the same time, no one can doubt also that the “Chewy Vuiton”
dog toy is not the “idealized image” of the mark created by LVM. The
diﬀerences are immediate, beginning with the fact that the “Chewy
Vuiton” product is a dog toy, not an expensive, luxury LOUIS VUITTON handbag. The toy is smaller, it is plush, and virtually all of
its designs diﬀer. Thus, “Chewy Vuiton” is not LOUIS VUITTON
(“Chewy” is not “LOUIS” and “Vuiton” is not “VUITTON,” with
its two Ts); CV is not LV; the designs on the dog toy are simpliﬁed
and crude, not detailed and distinguished. The toys are inexpensive;
the handbags are expensive and marketed to be expensive. And, of
course, as a dog toy, one must buy it with pet supplies and cannot
buy it at an exclusive LVM store or boutique within a department
store. In short, the Haute Diggity Dog “Chewy Vuiton” dog toy undoubtedly and deliberately conjures up the famous LVM marks and
trade dress, but at the same time, it communicates that it is not the
LVM product.
Finally, the juxtaposition of the similar and dissimilar – the irreverent representation and the idealized image of an LVM handbag –
immediately conveys a joking and amusing parody. The furry little “Chewy Vuiton” imitation, as something to be chewed by a dog,
pokes fun at the elegance and expensiveness of a LOUIS VUITTON
handbag, which must not be chewed by a dog. The LVM handbag
is provided for the most elegant and well-to-do celebrity, to proudly
display to the public and the press, whereas the imitation “Chewy
Vuiton” “handbag” is designed to mock the celebrity and be used by
a dog. The dog toy irreverently presents haute couture as an object
for casual canine destruction. The satire is unmistakable. The dog toy
is a comment on the rich and famous, on the LOUIS VUITTON name
and related marks, and on conspicuous consumption in general. This
parody is enhanced by the fact that “Chewy Vuiton” dog toys are
sold with similar parodies of other famous and expensive brands —
“Chewnel No. 5” targeting “Chanel No. 5”; “Dog Perignonn” targeting “Dom Perignon”; and “Sniﬀany & Co.” targeting “Tiﬀany &
Co.”
We conclude that the PETA criteria are amply satisﬁed in this case
and that the “Chewy Vuiton” dog toys convey just enough of the

$)"15&3  53"%&."3,

original design to allow the consumer to appreciate the point of parody, but stop well short of appropriating the entire marks that LVM
claims.
Finding that Haute Diggity Dog’s parody is successful, however,
does not end the inquiry into whether Haute Diggity Dog’s “Chewy
Vuiton” products create a likelihood of confusion. See ?? (“There are
confusing parodies and non-confusing parodies. All they have in
common is an a empt at humor through the use of someone else’s
trademark”). The ﬁnding of a successful parody only inﬂuences the
way in which the Pizzeria Uno factors are applied. Indeed, it becomes
apparent that an eﬀective parody will actually diminish the likelihood of confusion, while an ineﬀective parody does not. We now
turn to the Pizzeria Uno factors.
A

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As to the ﬁrst Pizzeria Uno factor, the parties agree that LVM’s marks
are strong and widely recognized. They do not agree, however, as to
the consequences of this fact. LVM maintains that a strong, famous
mark is entitled, as a ma er of law, to broad protection. While it
is true that ﬁnding a mark to be strong and famous usually favors
the plaintiﬀ in a trademark infringement case, the opposite may be
true when a legitimate claim of parody is involved. As the district
court observed, “In cases of parody, a strong mark’s fame and popularity is precisely the mechanism by which likelihood of confusion is
avoided.”
We agree with the district court. It is a ma er of common sense
that the strength of a famous mark allows consumers immediately
to perceive the target of the parody, while simultaneously allowing
them to recognize the changes to the mark that make the parody
funny or biting. See Tommy Hilﬁger Licensing, Inc. v. Nature Labs, LLC
(noting that the strength of the TOMMY HILFIGER fashion mark did
not favor the mark’s owner in an infringement case against TIMMY
HOLEDIGGER novelty pet perfume). In this case, precisely because
LOUIS VUITTON is so strong a mark and so well recognized as a
luxury handbag brand from LVM, consumers readily recognize that
when they see a “Chewy Vuiton” pet toy, they see a parody. Thus,
the strength of LVM’s marks in this case does not help LVM establish
a likelihood of confusion.
B
With respect to the second Pizzeria Uno factor, the similarities between the marks, the usage by Haute Diggity Dog again converts
what might be a problem for Haute Diggity Dog into a disfavored
conclusion for LVM.

' %&'&/4&4

Haute Diggity Dog concedes that its marks are and were designed
to be somewhat similar to LVM’s marks. But that is the essence of a
parody — the invocation of a famous mark in the consumer’s mind,
so long as the distinction between the marks is also readily recognized. While a trademark parody necessarily copies enough of the
original design to bring it to mind as a target, a successful parody
also distinguishes itself and, because of the implicit message communicated by the parody, allows the consumer to appreciate it.
In concluding that Haute Diggity Dog has a successful parody,
we have impliedly concluded that Haute Diggity Dog appropriately
mimicked a part of the LVM marks, but at the same time suﬃciently
distinguished its own product to communicate the satire. The differences are suﬃciently obvious and the parody suﬃciently blatant
that a consumer encountering a “Chewy Vuiton” dog toy would not
mistake its source or sponsorship on the basis of mark similarity.
This conclusion is reinforced when we consider how the parties
actually use their marks in the marketplace. The record amply supports Haute Diggity Dog’s contention that its “Chewy Vuiton” toys
for dogs are generally sold alongside other pet products, as well as
toys that parody other luxury brands, whereas LVM markets its handbags as a top-end luxury item to be purchased only in its own stores
or in its own boutiques within department stores. These marketing
channels further emphasize that “Chewy Vuiton” dog toys are not,
in fact, LOUIS VUITTON products.
C
Nor does LVM ﬁnd support from the third Pizzeria Uno factor, the
similarity of the products themselves. It is obvious that a “Chewy
Vuiton” plush imitation handbag, which does not open and is manufactured as a dog toy, is not a LOUIS VUITTON handbag sold by
LVM. Even LVM’s most proximate products – dog collars, leashes,
and pet carriers – are fashion accessories, not dog toys. As Haute
Diggity Dog points out, LVM does not make pet chew toys and likely
does not intend to do so in the future. Even if LVM were to make dog
toys in the future, the fact remains that the products at issue are not
similar in any relevant respect, and this factor does not favor LVM.
D
The fourth and ﬁfth Pizzeria Uno factors, relating to the similarity
of facilities and advertising channels, have already been mentioned.
LVM products are sold exclusively through its own stores or its own
boutiques within department stores. It also sells its products on the
Internet through an LVM-authorized website. In contrast, “Chewy
Vuiton” products are sold primarily through traditional and Inter-

$)"15&3  53"%&."3,

net pet stores, although they might also be sold in some department stores. The record demonstrates that both LVM handbags and
“Chewy Vuiton” dog toys are sold at a Macy’s department store in
New York. As a general ma er, however, there is li le overlap in the
individual retail stores selling the brands.
Likewise with respect to advertising, there is li le or no overlap.
LVM markets LOUIS VUITTON handbags through high-end fashion
magazines, while “Chewy Vuiton” products are advertised primarily
through pet-supply channels.
The overlap in facilities and advertising demonstrated by the
record is so minimal as to be practically nonexistent. “Chewy Vuiton”
toys and LOUIS VUITTON products are neither sold nor advertised
in the same way, and the de minimis overlap lends insigniﬁcant support to LVM on this factor.
E
The sixth factor, relating to Haute Diggity Dog’s intent, again is neutralized by the fact that Haute Diggity Dog markets a parody of LVM
products. As other courts have recognized, An intent to parody is not
an intent to confuse the public. Despite Haute Diggity Dog’s obvious
intent to proﬁt from its use of parodies, this action does not amount
to a bad faith intent to create consumer confusion. To the contrary,
the intent is to do just the opposite — to evoke a humorous, satirical association that distinguishes the products. This factor does not
favor LVM.
F
On the actual confusion factor, it is well established that no actual
confusion is required to prove a case of trademark infringement, although the presence of actual confusion can be persuasive evidence
relating to a likelihood of confusion.
While LVM conceded in the district court that there was no evidence of actual confusion, on appeal it points to incidents where retailers misspelled “Chewy Vuiton” on invoices or order forms, using
two Ts instead of one. Many of these invoices also reﬂect simultaneous orders for multiple types of Haute Diggity Dog parody products,
which belies the notion that any actual confusion existed as to the
source of “Chewy Vuiton” plush toys. The misspellings pointed out
by LVM are far more likely in this context to indicate confusion over
how to spell the product name than any confusion over the source or
sponsorship of the “Chewy Vuiton” dog toys. We conclude that this
factor favors Haute Diggity Dog.
In sum, the likelihood-of-confusion factors substantially favor
Haute Diggity Dog. But consideration of these factors is only a proxy

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for the ultimate statutory test of whether Haute Diggity Dog’s marketing, sale, and distribution of “Chewy Vuiton” dog toys is likely
to cause confusion. Recognizing that “Chewy Vuiton” is an obvious
parody and applying the Pizzeria Uno factors, we conclude that LVM
has failed to demonstrate any likelihood of confusion. Accordingly,
we aﬃrm the district court’s grant of summary judgment in favor of
Haute Diggity Dog on the issue of trademark infringement.
III
LVM also contends that Haute Diggity Dog’s advertising, sale, and
distribution of the “Chewy Vuiton” dog toys dilutes its LOUIS VUITTON, LV, and Monogram Canvas marks, which are famous and distinctive. It argues, “Before the district court’s decision, Vui on’s famous marks were unblurred by any third party trademark use.” “Allowing defendants to become the ﬁrst to use similar marks will obviously blur and dilute the Vui on Marks.” It also contends that
“Chewy Vuiton” dog toys are likely to tarnish LVM’s marks because
they “pose a choking hazard for some dogs.”
A
We address ﬁrst LVM’s claim for dilution by blurring.
We begin by noting that parody is not automatically a complete
defense to a claim of dilution by blurring where the defendant uses
the parody as its own designation of source, i.e., as a trademark. Although the TDRA does provide that fair use is a complete defense and
allows that a parody can be considered fair use, it does not extend the
fair use defense to parodies used as a trademark.
The TDRA, however, does not require a court to ignore the existence of a parody that is used as a trademark, and it does not preclude a court from considering parody as part of the circumstances
to be considered for determining whether the plaintiﬀ has made out
a claim for dilution by blurring. Indeed, the statute permits a court
to consider “all relevant factors,” including the six factors supplied
in § 1125(c)(2)(B).
In sum, while a defendant’s use of a parody as a mark does not
support a “fair use” defense, it may be considered in determining
whether the plaintiﬀ-owner of a famous mark has proved its claim
that the defendant’s use of a parody mark is likely to impair the distinctiveness of the famous mark.
In the case before us, when considering factors (ii), (iii), and (iv),
it is readily apparent, indeed conceded by Haute Diggity Dog, that
LVM’s marks are distinctive, famous, and strong. The LOUIS VUITTON mark is well known and is commonly identiﬁed as a brand
of the great Parisian fashion house, Louis Vui on Malletier. So too
are its other marks and designs, which are invariably used with the

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LOUIS VUITTON mark. It may not be too strong to refer to these
famous marks as icons of high fashion.
While the establishment of these facts satisﬁes essential elements
of LVM’s dilution claim, the facts impose on LVM an increased burden to demonstrate that the distinctiveness of its famous marks is
likely to be impaired by a successful parody. Even as Haute Diggity
Dog’s parody mimics the famous mark, it communicates simultaneously that it is not the famous mark, but is only satirizing it. And
because the famous mark is particularly strong and distinctive, it becomes more likely that a parody will not impair the distinctiveness of
the mark. In short, as Haute Diggity Dog’s “Chewy Vuiton” marks
are a successful parody, we conclude that they will not blur the distinctiveness of the famous mark as a unique identiﬁer of its source.
It is important to note, however, that this might not be true if the
parody is so similar to the famous mark that it likely could be construed as actual use of the famous mark itself. Factor (i) directs an
inquiry into the “degree of similarity between the junior mark and
the famous mark.” If Haute Diggity Dog used the actual marks of
LVM (as a parody or otherwise), it could dilute LVM’s marks by blurring, regardless of whether Haute Diggity Dog’s use was confusingly
similar, whether it was in competition with LVM, or whether LVM
sustained actual injury. Thus, the use of DUPONT shoes, BUICK
aspirin, and KODAK pianos would be actionable under the TDRA
because the unauthorized use of the famous marks themselves on
unrelated goods might diminish the capacity of these trademarks to
distinctively identify a single source. This is true even though a consumer would be unlikely to confuse the manufacturer of KODAK
ﬁlm with the hypothetical producer of KODAK pianos.
But in this case, Haute Diggity Dog mimicked the famous marks;
it did not come so close to them as to destroy the success of its parody
and, more importantly, to diminish the LVM marks’ capacity to identify a single source. Haute Diggity Dog designed a pet chew toy to
imitate and suggest, but not use, the marks of a high-fashion LOUIS
VUITTON handbag. It used “Chewy Vuiton” to mimic “LOUIS
VUITTON”; it used “CV” to mimic “LV”; and it adopted imperfectly
the items of LVM’s designs. We conclude that these uses by Haute
Diggity Dog were not so similar as to be likely to impair the distinctiveness of LVM’s famous marks.
B
LVM’s claim for dilution by tarnishment does not require an extended discussion. To establish its claim for dilution by tarnishment,
LVM must show, in lieu of blurring, that Haute Diggity Dog’s use of
the “Chewy Vuiton” mark on dog toys harms the reputation of the
LOUIS VUITTON mark and LVM’s other marks. LVM argues that the

' %&'&/4&4

possibility that a dog could choke on a “Chewy Vuiton” toy causes
this harm. LVM has, however, provided no record support for its assertion. It relies only on speculation about whether a dog could choke
on the chew toys and a logical concession that a $10 dog toy made in
China was of “inferior quality” to the $1190 LOUIS VUITTON handbag. There is no record support, however, that any dog has choked
on a pet chew toy, such as a “Chewy Vuiton” toy, or that there is any
basis from which to conclude that a dog would likely choke on such
a toy.
We agree with the district court that LVM failed to demonstrate a
claim for dilution by tarnishment.
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On December 22, 2011, Louis Vui on Malletier, S.A. (“Louis Vuitton”) ﬁled a complaint against Warner Bros. Entertainment Inc.
(“Warner Bros.”), focusing on Warner Bros.’ use of a travel bag in
the ﬁlm The Hangover: Part II that allegedly infringes upon Louis
Vui on’s trademarks. Plaintiﬀ’s complaint asserts three claims for relief: (1) false designation of origin/unfair competition in violation of §
43(a) of the Lanham Act; (2) common law unfair competition; and (3)
trademark dilution in violation N.Y. Gen. Bus. Law 360-l. On March
14, 2012, defendant ﬁled a motion to dismiss the complaint with prejudice for failure to state a claim upon which relief can be granted
pursuant to Fed.R.Civ.P. 12(b). The court has fully considered the
parties’ arguments, and for the reasons set forth below, defendant’s
motion is granted.
BACKGROUND
Louis Vui on is one of the premier luxury fashion houses in the
world, renowned for, among other things, its high-quality luggage,
trunks, and handbags. Louis Vui on’s principle trademark is the
highly-distinctive and famous Toile Monogram. Registered in 1932,
this trademark, along with its component marks (collectively, the
“LVM Marks”), are famous, distinctive, and incontestable.
Louis Vui on has invested millions of dollars and decades of time
and eﬀort to create a global recognition that causes consumers to associate the LVM Marks with high-quality, luxury goods emanating
exclusively from Louis Vui on.
Warner Bros. is one of the oldest and most respected producers of
motion pictures and television shows in the country and the world.
In the summer of 2011, Warner Bros. released The Hangover: Part
II (“the Film”), the sequel to the 2009 hit bachelor-party-gone-awrycomedy The Hangover. The Film has grossed roughly $580 million
globally as of the date of the Complaint, becoming the highest-gross

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R-rated comedy of all time and one of the highest grossing movies in
2011.
Diophy is a company that creates products which use a monogram design that is a knock-oﬀ of the famous Toile Monogram
(the “Knock-Oﬀ Monogram Design”). The Diophy products bearing
the Knock-Oﬀ Monogram Design have been extensively distributed
throughout the United States, causing enormous harm to Louis Vuitton. Despite the inferior quality of Diophy’s products, demand for
its products bearing the Knock-Oﬀ Monogram Design remains high
because they are far less expensive than genuine Louis Vui on products.
A. The Airport Scene

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As alleged in the complaint, in one early scene in the Film the “four
main characters in Los Angeles International Airport before a ﬂight to
Thailand for the character Stu’s bachelor party and wedding.” “[A]s
the characters are walking through the airport, a porter is pushing
on a dolly what appears to be Louis Vui on trunks, some hard-sided
luggage, and two Louis Vui on Keepall travel bags.”) Alan, one of
the characters, is carrying what appears to be a matching over-theshoulder Louis Vui on “Keepall” bag, but it is actually an infringing
Diophy bag.1 Moments later, Alan is seen si ing on a bench in the
airport lounge and places his bag (i.e., the Diophy bag) on the empty
seat next to him. Stu, who is si ing in the chair to the other side of the
bag, moves the bag so that Teddy, Stu’s future brother-in-law, can sit
down between him and Alan. (Id.) Alan reacts by saying: “Careful
that is ... that is a Lewis Vui on.” No other reference to Louis Vui on
or the Diophy bag is made after this point.
After the movie was released in theaters, Louis Vui on sent
Warner Bros. a cease and desist le er noting its objection to the use of
the Diophy bag in the Film. Despite being informed of its objection,
on December 6, 2011, Warner Bros. released the Film in the United
States on DVD and Blu-Ray. The complaint alleges that “many consumers believed the Diophy [b]ag” used in the Film “was, in fact, a
genuine Louis Vui on,” and that Louis Vui on consented to Warner
Bros.’ “misrepresentation” that the Diophy bag was a genuine Louis
Vui on product. Louis Vui on claims that its harm has been “exacerbated by the prominent use of the aforementioned scenes and the
LVM Marks in commercials and advertisements for the [F]ilm,” and
that Alan’s “Lewis Vui on” line has “become an oft-repeated and
hallmark quote from the movie.” Louis Vui on a aches to the complaint, as Exhibit E, what it claims are “[r]epresentative Internet refer1

Warner Bros. does not dispute for the purposes of this motion that Louis Vuitton’s representations with respect to the source of the bag are accurate.

' %&'&/4&4

ences and blog excerpts” demonstrating that consumers mistakenly
believe that the Diophy bag is a genuine Louis Vui on bag.2
B. The Present Motion
It is instructive to consider what this case is about and what it is not.
Louis Vui on does not object to Warner Bros.’ unauthorized use of
the LVM Marks or reference to the name Louis Vui on in the Film.
Nor does Louis Vui on claim that Warner Bros. misled the public
into believing that Louis Vui on sponsored or was aﬃliated with
the Film. Rather, Louis Vui on contends that Warner Bros. impermissibly used a third-party’s bag that allegedly infringes on the LVM
Marks. On the basis of Warner Bros.’ use of the allegedly infringing
Diophy bag in the Film, Louis Vui on asserts three causes of action:
(1) false designation of origin/unfair competition in violation of 15
U.S.C. § 1125(a), (2) common law unfair competition,4 and (3) trademark dilution in violation of New York General Business Law § 360-l.
Warner Bros. now moves to dismiss the complaint in its entirety
on the ground that its use of the Diophy bag in the Film is protected
by the First Amendment under the framework established by Rogers
v. Grimaldi.
DISCUSSION …
1. First Amendment
In Rogers, the Second Circuit held that the Lanham Act is inapplicable to “artistic works” as long as the defendant’s use of the mark is
(1) “artistically relevant” to the work and (2) not “explicitly misleading” as to the source or content of the work. Louis Vui on does not
dispute that Warner Bros.’ challenged use of the mark is noncommercial, placing it ﬁrmly within the purview of an “artistic work” under
Rogers. a. Artistic Relevance
The threshold for “artistic relevance” is purposely low and will be satisﬁed unless the use has no artistic relevance to the underlying work
whatsoever. The artistic relevance prong ensures that the defendant
intended an artistic – i.e., noncommercial – association with the plaintiﬀ’s mark, as opposed to one in which the defendant intends to as2

Although the Court takes as true the allegations of the complaint, none of the
Internet references and blog excerpts a ached to the complaint in Exhibit E show
that anyone is confused or mistaken into believing that the Diophy bag was a real
Louis Vui on bag. In one blog post, a commenter notes that the luggage on the cart
is real, but the bag carried by Alan is a “replica.” Although a few other posts and
comments refer to the bags generally as Louis Vui on bags, no one else speciﬁcally
writes about Alan’s bag, let alone its authenticity.
4
The standards for § 43(a) claims of the Lanham Act and common law unfair
competition claims are almost indistinguishable.

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sociate with the mark to exploit the mark’s popularity and good will.
See Rogers (ﬁnding that the defendant satisﬁed the artistic relevance
prong where its use of the trademark was “not arbitrarily chosen just
to exploit the publicity value of [the plaintiﬀs’ mark] but instead ha[d]
genuine relevance to the ﬁlm’s story”).
Warner Bros.’ use of the Diophy bag meets this low threshold.
Alan’s terse remark to Teddy to “[be] [c]areful” because his bag “is
a Lewis Vui on” comes across as snobbish only because the public
signiﬁes Louis Vui on – to which the Diophy bag looks confusingly
similar – with luxury and a high society lifestyle. His remark also
comes across as funny because he mispronounces the French “Louis”
like the English “Lewis,” and ironic because he cannot correctly pronounce the brand name of one of his expensive possessions, adding
to the image of Alan as a socially inept and comically misinformed
character. This scene also introduces the comedic tension between
Alan and Teddy that appears throughout the Film.
Louis Vui on contends that the Court cannot determine that the
use of the Diophy bag was artistically relevant until after discovery. Speciﬁcally, Louis Vui on maintains that it should be able to review the script and depose the Film’s creators to determine whether
Warner Bros. intended to use an authentic Louis Vui on bag or Diophy’s knock-oﬀ bag. However, the signiﬁcance of the airport scene
relies on Alan’s bag – authentic or not – looking like a Louis Vui on
bag. Louis Vui on does not dispute this was Warner Bros.’ intention,
and therefore the discovery it seeks is irrelevant. The Court is satisﬁed that Warner Bros.’ use of the Diophy bag (whether intentional or
inadvertent) was intended to create an artistic association with Louis
Vui on, and there is no indication that its use was commercially motivated. .11
11

For this reason, the present case is distinguishable from the cases cited by Louis
Vui on. In those cases, the court disbelieved the defendant’s claim that a communicative message was intended and/or expressed concern that the mark’s use was
commercially motivated. See Am. Dairy Queen Corp. v. New Line Prods., Inc., 35
F. Supp. 2d 727, (D. Minn. 1998) (defendant movie producers’ position was that
their proposed movie title [Ed: Dairy Queens] was not “designed to evoke or even
suggest any relationship at all to [plaintiﬀ’s] trademarked name or any of its products”); Sherwood 48 Assocs. v. Sony Corp. of Am., 76 Fed. Appx. 389, 392 (2d Cir.
2003) (plaintiﬀs alleged that the defendant altered the plaintiﬀs’ marks “to generate revenue for their ﬁlm,” and the defendant had not pled that the alteration had
“at least some artistic relevance in order to assert a valid First Amendment defense”
[Ed: the producers of the movie Spider-Man digitally altered the exterior of three
buildings in a scene ﬁlmed in New York’s Times Square.]); Parks v. LaFace Records,
329 F.3d 437, (6th Cir 2003) (ﬁnding that “reasonable persons could conclude that
there is no relationship of any kind between Rosa Park’s name and the content of
the song [Ed: “Rosa Parks” by OutKast],” and noting that the “marketing power”
of the song’s title “unquestionably enhanced the song’s potential sale to the consuming public”).

' %&'&/4&4

Accordingly, the Court concludes that the use of the Diophy bag
has some artistic relevance to the plot of the Film.
b. Explicitly Misleading
Since using the Diophy bag has some relevance to the Film, Warner
Bros.’ use of it is unprotected only if it explicitly misleads as to the
source or the content of the work. The relevant question is whether
the defendant’s use of the mark is misleading in the sense that it induces members of the public to believe the work] was prepared or
otherwise authorized by the plaintiﬀ. Only a particularly compelling
ﬁnding of likelihood of confusion can overcome the First Amendment interests.
Rogers and the cases adopting its holding have consistently
framed the applicable standard in terms of confusion as to the defendant’s artistic work. See Rogers (“The title ‘Ginger and Fred’ contains
no explicit indication that Rogers endorsed the [defendant’s] ﬁlm or
had a role in producing it.”).
It is not a coincidence that courts frame the confusion in relation
to the defendant’s artistic work, and not to someone else’s. This narrow construction of the Lanham Act accommodates the public’s interest in free expression by restricting its application to those situations that present the greatest risk of consumer confusion: namely,
when trademarks are used to dupe consumers into buying a product
they mistakenly believe is sponsored by the trademark owner. When
this concern is present it will generally outweigh the public’s interest
in free expression. However, if a trademark is not used, in any direct sense, to designate the source or sponsorship of the defendant’s
work, then “he consumer interest in avoiding deception is too slight
to warrant application of the Lanham Act.
Here, the complaint alleges two distinct theories of confusion: (1)
that consumers will be confused into believing that the Diophy bag
is really a genuine Louis Vui on bag; and (2) that Louis Vui on approved the use of the Diophy bag in the Film. However, even drawing all reasonable inferences in the light most favorable to Louis Vuitton, as the Court is required to do, neither of these allegations involves confusion as to Warner Bros.’ artistic work. Speciﬁcally, Louis
Vui on does not allege that Warner Bros. used the Diophy bag in order to mislead consumers into believing that Louis Vui on produced
or endorsed the Film. Therefore, the complaint fails to even allege the
type of confusion that could potentially overcome the Rogers protection.
Even if the Court assumes, arguendo, that Louis Vui on has
stated a cognizable claim of confusion, its claim would fail anyway.
The Second Circuit in Rogers emphasized that when First Amendment values are involved, courts should narrowly construe the Lan-

$)"15&3  53"%&."3,

ham Act and weigh the public interest in free expression against the
public interest in avoiding customer confusion. As such, where an
expressive work is alleged to infringe a trademark, the likelihood of
confusion must be particularly compelling.
The Court concludes that Louis Vui on’s allegations of confusion are not plausible, let alone “particularly compelling.” First, it
is highly unlikely that an appreciable number of people watching the
Film would even notice that Alan’s bag is a knock-oﬀ. Cf. . Gottlieb (no confusion of plaintiﬀ sponsoring defendant’s ﬁlm where “it
would be diﬃcult for even a keen observer to pick out [plaintiﬀ’s]
trademark” since “it appears in the background of the scene” and “occupies only a minute fraction [of] the frame for three segments lasting
approximately three seconds each”). In this regard, Louis Vui on is
trying to have it both ways: arguing that the Diophy bags are so similar as to create consumer confusion but at the same time so obviously
dissimilar that someone watching the Film would notice the slightly
diﬀerent symbols used on the Diophy bag. Yet, the Diophy bag appears on screen for no more than a few seconds at a time and for less
than thirty seconds in total, and when it is on screen, it is usually in
the background, out of focus, or partially obscured by other things.
Like the appearance of the plaintiﬀ’s mark in Go lieb, the Court ﬁnds
that the diﬀerence between the authentic and knock-oﬀ bag is so diﬃcult to even notice, that a claim of confusion under the Lanham Act is
simply not plausible. Furthermore, Louis Vui on’s position assumes
that viewers of the Film would take seriously enough Alan’s statements about designer handbags (even about those he does not correctly pronounce) that they would a ribute his views to the company
that produced the Film. This assumption is hardly conceivable, and
it does not cross the line into the realm of plausibility. Lastly, Louis
Vui on is objecting to a statement made by a ﬁctional character in
a ﬁctional movie, which it characterizes as an aﬃrmative misrepresentation. However, this assumes that the ﬁctional Alan character
knew that his bag was a knock-oﬀ; otherwise, he would simply be
(innocently) misinformed about the origin of his bag. For these reasons, the Court concludes that the likelihood of confusion is at best
minimal, and when balanced against the First Amendment concerns
implicated here, it is not nearly signiﬁcant enough to be considered
particularly compelling.
Louis Vui on maintains that the Rogers test cannot be assessed
on a motion to dismiss. The Court disagrees. Although many courts
have considered the Rogers test on a summary judgment motion, not
on a motion to dismiss, the circuit has never stated that a court cannot
properly apply the Rogers test (or the likelihood of confusion factors)
on a motion to dismiss. In fact, the Second Circuit has suggested that
it would be appropriate where the court is satisﬁed that the products

' %&'&/4&4

or marks are so dissimilar that no question of fact is presented. In the
context of a motion to dismiss, courts have disposed of trademark
claims where simply looking at the work itself, and the context in
which it appears, demonstrates how implausible it is that a viewer
will be confused into believing that the plaintiﬀ endorsed the defendant’s work (and without relying on the likelihood of confusion factors to do so). See, e.g., Stewart Sur oards, Inc. v. Disney Book Group,
LLC (no likelihood of confusion that readers would believe that plaintiﬀ sur oard manufacturer endorsed a Hannah Montana book because one of its sur oards appeared on the back cover); Go lieb (no
likelihood of confusion that viewers would believe plaintiﬀ pinball
machine owner endorsed the movie “What Women Want” because
it appeared in the background of a few scenes); Burne v. Twentieth
Century Fox Film Corp. (no likelihood of confusion that viewers would
believe plaintiﬀ Carol Burne endorsed a Family Guy sketch making
fun of her); cf. Wham-O, Inc. v. Paramount Pictures Corp. (denying
preliminary injunction without discovery where no likelihood of confusion that viewers would believe that plaintiﬀ maker of the Slip ‘N
Slide endorsed the movie “Dickie Roberts: Former Child Star” because the protagonist (mis)used the toy water slide in one scene of
the movie).
Here, there is no likelihood of confusion that viewers would believe that the Diophy bag is a real Louis Vui on bag just because a
ﬁctional character made this claim in the context of a ﬁctional movie.
Neither is there a likelihood of confusion that this statement would
cause viewers to believe that Louis Vui on approved of Warner Bros.’
use of the Diophy bag. In a case such as this one, no amount of discovery will tilt the scales in favor of the mark holder at the expense
of the public’s right to free expression.
Therefore, even assuming, arguendo, that Louis Vui on could
state a cognizable claim of confusion, Warner Bros.’ use of the Diophy
bag is protected under Rogers because it has some artistic relevance
to the Film and is not explicitly misleading.

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(2)

Notwithstanding any other provision of this chapter, the remedies given to the owner of a right … of this title shall be limited
as follows:
(A) Where an infringer or violator is engaged solely in the business of printing the mark or violating ma er for others and
establishes that he or she was an innocent infringer or in-

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nocent violator, the owner of the right infringed … shall
be entitled as against such infringer or violator only to an
injunction against future printing.
(B) Where the infringement or violation complained of is contained in or is part of paid advertising ma er in a newspaper, magazine, or other similar periodical or in an electronic communication, the remedies of the owner of the
right infringed shall be limited to an injunction against the
presentation of such advertising ma er in future issues
of such newspapers, magazines, or other similar periodicals or in future transmissions of such electronic communications. The limitations of this subparagraph shall apply
only to innocent infringers and innocent violators.

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Do the following uses qualify for any trademark defenses? For your
reference, the relevant marks are LITTLE LEAGUE for children’s
sports; FORD for cars; 7-11 for groceries; FEDEX for delivery services; GOT MILK for milk; MARLBORO for cigare es; LISTERINE
for mouthwash; M&MS for chocolate candy, and the angry monkey design for an ”on-line retailer store featuring clothing, namely,
patches, t-shirts, hats, bags and pouches and tactical gear.” It may
help to note that “I wish I knew how to quit you” is a line of dialogue
from Brokeback Mountain, and observe that black text on the white
portion of Target bo le of mouthwash reads ”Compare to FRESHBURST® LISTERINE®.” (Hint: it never hurts to start by articulating
the applicable theory or theories of infringement against which a defense is needed.)

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One of the core concepts of trademark law – a registry that assigns exclusive rights in names or other identiﬁers – shows up in some other
contexts, as well. In each case, query what work if any trademark law
is doing and what lessons if any trademark law can teach.

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Holiday Inns, Inc., ﬁled this Lanham Act suit against the defendants,
alleging unfair competition and infringement of its trademark telephone number, 1-800-HOLIDAY, known as a ”vanity number.” Since
1952, Holiday Inns has operated an international chain of hotels
through both franchise agreements and on its own, utilizing the name
”Holiday Inn.” Holiday Inns, Inc. owns registration in the United
States Patent and Trademark Oﬃce for several service marks, including the ”Holiday Inn” mark, which was registered in 1954. Holiday
Inns has invested a great deal of time, money, and eﬀort to increase
the traveling public’s awareness of its 1-800-HOLIDAY phone number, which can be dialed to secure reservations or to obtain information about lodging facilities. According to the vice president of Holiday Inns’s marketing, the company’s vanity number is included in
virtually all of its extensive media, print, and radio advertisements.
The telephone number is not, however, oﬃcially registered as a trademark.

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The defendants, Call Management Systems, Inc. (a consulting
ﬁrm that obtains and services 1-800 telephone numbers for businesses), 800 Reservations, Inc. (an agency that makes reservations for
a number of hotel chains, including Holiday Inns), and Earthwinds
Travel, Inc. (a travel agency) had secured the use and were engaged
in using a telephone number that potential Holiday Inns customers
frequently dial by mistake when they unintentionally substitute the
number zero for the le er ”O.” That number, 1-800-405-4329, corresponds to the alphanumeric 1-800-H[zero]LIDAY, known in the trade
as a ”complementary number.” It is referred to in this opinion as ”the
405 number” to distinguish it from the Holiday Inns numeric, 1-800465-4329.
Albert H. Montreuil, the 50
When Montreuil discovered that numbers complementing 1-800HOLIDAY had not been reserved, he decided, in May 1993, to reserve
them for Call Management. In fact, Montreuil freely admi ed during
the preliminary injunction hearing that his ”sole purpose” in choosing the 405 number was to intercept calls from misdialed customers
who were a empting to reach Holiday Inns, and he acknowledged
that his company reaped beneﬁts in direct proportion to Holiday
Inns’s eﬀorts at marketing 1-800-HOLIDAY for securing reservations.
The few courts that have addressed similar issues have agreed
that telephone numbers may be protected as trademarks and that
a competitor’s use of a confusingly similar telephone number may
be enjoined as both trademark infringement and unfair competition.
See, e.g., Dial-A-Ma ress Franchise Corp. v. Page. In Dial-a-Ma ress,
the plaintiﬀ was the customer of record for the local telephone number 628-8737 in the various area codes of the New York metropolitan
region. Dial-A-Ma ress Franchise Corp. had advertised extensively
its services and its phone number in the area with the phrase ”DIALA-MATTRESS and drop the last ‘S’ for savings.” The defendant, Page,
obtained the right to use 1-800-628-8737 (or 1-800-MATTRES) and
promoted his number as 1-800-MATTRESS.
The Second Circuit held that although the term ”ma ress” is a
generic term generally not entitled to protection under trademark
law, telephone numbers that correlate with generic terms may be entitled to protection. It further determined:
Defendant’s use of the telephone number 1-800-628-8737
was confusingly similar to plaintiﬀ’s telephone number
628-8737 in those area code regions in which plaintiﬀ
solicited telephone orders, especially in view of defendant’s identiﬁcation of its number as 1-800-MATTRESS after plaintiﬀ had promoted identiﬁcation of its number as
(area code)-MATTRES.

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Despite Holiday Inns’s reliance upon the Dial-a-Ma ress decision, we
ﬁnd the instant case and the Second Circuit opinion clearly distinguishable. In Dial-a-Ma ress, for example, the defendant intentionally promoted his vanity number and actively caused confusion; in
our case, the defendants engaged in only minimal advertisement of
their travel agency and never promoted a vanity number.
The defendants, on the other hand, cite cases which suggest that
the active promotion of a deceptively similar vanity number is necessary before the trial court can conclude that unlawful infringement
has occurred. In American Airlines, Inc. v. A 1-800-A-M-E-R-I-C-A-N
Corp, for example, the defendant falsely advertised its airline reservation service as an airline company in the yellow pages and listed
its company name as ”A 1-800-A-M-E-R-I-C-A-N.” In ﬁnding a Lanham Act violation, the court clariﬁed that the defendant’s ”wrongful
conduct lies in its misleading use of the ‘Airline Companies’ yellowpages listing rather than its mere use of its telephone number [1-800AMERICAN] as such.” In other words, the court issued an injunction
because the defendant’s publicity eﬀorts misled the public and not because the defendant activated a 1-800 number that appeared confusingly similar to the trademark, ”American Airlines.” See also Murrin
v. Midco Communications, Inc. (granting a limited injunction forbidding the advertisement or use of the vanity number 1-800-LAWYER
with ”dial” or with any symbols resembling dots or hyphens between
the le ers ”LAWYERS” but explicitly rejecting the argument that any
use of the phone number 529-9377 – which spells ”lawyers” on the
telephone keypad – constitutes infringement upon Murrin’s ”Dial
L.A.W.Y.E.R.S.” service mark).
We conclude that although Holiday Inns owns trademark rights
in its vanity number 1-800-HOLIDAY, it cannot claim such rights to
the 405 number. It follows that the defendant, Call Management, is
the rightful assignee of the telephone number 1-800-405-4329.
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In recent years, the demand for toll-free telephone numbers has skyrocketed. AT&T released the ﬁrst 800 toll-free numbers for large businesses in 1967, and competitors followed after the breakup of the Bell
System in 1984. The popularity of vanity numbers did not gain momentum until 1986, however, when the widespread use of vanity license plates in California prompted Paciﬁc Bell to allow matching
phone numbers. At the same time, changes in technology enabled
companies to use one number on a nationwide basis. In 1993, the FCC
ordered phone companies to make 800 numbers portable. Portability allows businesses to take their toll-free numbers with them when

( 05)&3 *%&/5*'*&3 3&(*453*&4

they switch carriers. With the advent of portability, the market for
toll-free telephone numbers exploded. Today, over 90 percent of the
7.78 million possible combinations of 800 numbers are no longer available. About 6.3 million are working phone numbers, and the remainder are reserved, assigned, disconnected, or otherwise unavailable.
In March of 1996, the diminishing supply of 800 numbers precipitated the release of the toll-free 888 service access code (SAC) by
long-distance carriers. The available numbers with an 888 SAC, in
turn, quickly disappeared. Businesses and individuals snatched up
approximately 400,000 numbers per month, causing the eight million
available 888 numbers to become unavailable within two years. On
April 5, 1998, the 877 SAC joined the pool of toll-free numbers. Due
to the high demand for toll-free numbers, 877 numbers will remain
available for less than two years before carriers introduce the 866 preﬁx, followed by the 855 SAC, and so on, to meet demand.
The release of the 888 and 877 numbers produced three principal problems that remain unresolved. First, businesses with 800 vanity numbers fear that competitors will reserve identical mnemonics
in the new toll-free preﬁxes, and thereby cause consumer confusion
and dilution of their trademarks. To prevent others from exploiting
consumer confusion and free-riding on the goodwill established by
their investments in the advertisement and promotion of 800 numbers, many businesses with vanity 800 numbers claimed a proprietary interest in corresponding 800 numbers and lobbied for a right of
ﬁrst refusal. The FCC responded to industry concerns by suppressing the use of 374,199 numbers with the 888 preﬁx pending a decision about treatment of corresponding numbers. The FCC recently
conferred a right of ﬁrst refusal on businesses for the set-aside vanity 888 numbers, but the agency conditioned the right on the active
investment, advertisement, and use of the numbers. This prevents
a business from hoarding a set-aside number merely to prevent use
by competitors. Contrary to the FCC response to the 888 SAC, carriers will release all future toll-free numbers, including the 877 and 866
SACs, on a ﬁrst-come, ﬁrst-served basis. As a result, businesses that
use 800 vanity numbers and are unable to reserve equivalent numbers in the 877 and 866 SACs, will remain vulnerable to a threat of
consumer confusion, free riding, and black-market brokers.
Second, a practical problem arose from the release of the 888 SAC
that reﬂected the existence of actual consumer confusion. Businesses
with 800 vanity numbers received a ﬂood of wrong number calls. Because carriers bill the holders of toll-free numbers on a per-minute
basis for incoming calls, in addition to a ﬂat monthly fee, the calls
were costly mistakes.
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When Madison Truck Brokers subscribed to an incoming-toll-free
number in 1976, AT&T assigned it 800 356-9377 at random. Madison
Truck Brokers and its successor Capitol Warehousing Corporation
used the number in their transportation business until 1982, when
they expanded into ﬂoral delivery. William Alexander thought that
800-FLOWERS would be the ideal toll-free number for a ﬂorist — and
someone typing that sequence on a phone’s keypad will reach 800
356-9377.
Alexander approached Curtis Jahn, the owner of Capitol Warehousing, with a proposal to test-market ﬂoral sales via the 800FLOWERS number. Jahn and investors recruited by Alexander organized 800-Flowers, Inc. to explore the idea and, if events justiﬁed, to run a national ﬂowers-by-phone business. Advertisements
in New Orleans produced enough calls to encourage further exploration. (The record does not reveal how the venture separated the
ﬂower-related calls from truck-related calls, for every call to that number reached Capitol Warehousing’s oﬃce.) After an infusion of additional capital and resolution of litigation brought by another corporation that claimed trademark rights to ”800-FLOWERS” (though the
rival lacked the phone number to go with the idea), the business was
launched nationwide. At Jahn’s request, AT&T transferred the phone
number to 800-Flowers, which became the subscriber and paid all
bills. In a move that he may now regret, Jahn took not only an equity
stake in the new corporation but also a royalty interest in revenues
derived from phone sales.
In this suit under the diversity jurisdiction, Jahn accuses 800Flowers of failing to pay his full royalty under the 1986 agreement.
Defendants responded that payment is illegal under a regulation forbidding the sale of phone numbers. The district court concluded
that the royalty interest reﬂects at least in part the value of the 800FLOWERS number. Given the district court’s uncontested ﬁnding
that Jahn’s royalty interest represents the sale of a telephone number,
we may assume that the 1982 and 1986 transactions would violate federal law if implemented today. The governing regulation provides:
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(a)

As used in this section, hoarding is the acquisition by a toll free
subscriber ... of more toll free numbers than the toll free subscriber intends to use for the provision of toll free service. The
deﬁnition of hoarding also includes number brokering, which
is the selling of a toll free number by a private entity for a fee.
(1) Toll free subscribers shall not hoard toll free numbers.
(2) No person or entity shall acquire a toll free number for the
purpose of selling the toll free number to another entity or

( 05)&3 *%&/5*'*&3 3&(*453*&4

to a person for a fee.
(3) Routing multiple toll free numbers to a single toll free subscriber will create a rebu able presumption that the toll
free subscriber is hoarding or brokering toll free numbers.
The district court bypassed the question whether § 52.107 proscribes
sales that occurred before its adoption. For reasons explained
presently, the answer ma ers – and it is a simple ”no.” Federal regulations do not, indeed cannot, apply retroactively unless Congress has
authorized that step explicitly. No statute authorizes the fcc to adopt
regulations with retroactive eﬀect, and § 52.107 does not purport to
aﬀect transactions entered into before 1997. Defendants say that §
52.107 just restates prior law, but this position is untenable. Relevant
prior law, from the phone companies’ tariﬀs, was that subscribers do
not own telephone numbers assigned to them. This meant that the
carriers could change numbers without liability to the subscribers. It
did not mean that subscribers were forbidden to transact about whatever interests they enjoyed in the use of numbers currently assigned.
Consider Internet domain names. These are rented by the year from
administrators (one per top domain), yet there is a thriving market
in these addresses. This is true of other leaseholds: a lessee does not
own the premises but may transfer his possessory interest for whatever price the traﬃc will bear, unless the lease forbids assignments
and subleases. A football team does not own its players but may
trade their contracts. And broadcast licenses may be sold despite the
mantra that the airwaves are a public resource. If broadcast licenses
may be sold even though they are not ”property” of the licensees,
then telephone numbers could be sold until 1997 even though they,
too, are not the subscribers’ property. Jahn could not have compelled
AT&T to transfer the number to 800-Flowers, but it proved willing to
do so, and no rule of federal law in force at the time prevented the
ﬁrm from compensating Jahn for his assistance in securing this transfer.

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WSM, Incorporated adopted the call le ers “WSM” for its radio station in 1925 and claims use of “WSM” as a service mark for radio
broadcasting services in interstate commerce since 1925. Its application to register the le ers as a service mark was refused. The Examining A orney concedes that the le ers sought to be registered are used
by applicant as a service mark, but takes the position that applicant is
not the owner of the mark because the Federal Communications Com-

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mission (FCC) licenses applicant to broadcast, approves applicant’s
call le ers, and retains the power to revoke the license to broadcast
along with the call le ers used to identify the station. Thus under the
Examining A orney’s theory the applicant cannot control the use of
the mark, and as such is not its owner. Applicant appealed when the
refusal was made ﬁnal.
The Examining A orney has apparently misunderstood the nature of the relationship between the FCC and applicant. The FCC
licenses applicant to broadcast from a speciﬁed geographic location
on a speciﬁed frequency at a speciﬁed power during speciﬁed times.
The FCC exercises its authority to “designate” call le ers for licensed
broadcasters by permi ing the broadcasters to request whatever call
le ers they like. Prior to 1984 the requests were granted unless: (1)
another station had the same call le ers, (2) the requested call le ers
were not in good taste, or (3) the requested le ers were phonetically
and rythmically similar to existing call le ers of stations in the same
area, so that the stations would likely be confused. Prior to 1984 the
FCC administered a system whereby one licensed station could object to the approval of another station’s call le ers, but only if both
stations were to serve the same area. These disputes between broadcasters were resolved by the FCC. The interests of anyone who was
not a broadcaster were never considered by the FCC.
In 1984 the FCC rules regarding call le er approval and conﬂicts
were changed. The agency will now grant a request for particular
call signs if the identical call sign is not already in use by someone
else, and the FCC is no longer a forum for the resolution of disputes
between stations. Section 73.3550(g) of the FCC Rules now provides
as follows:
Applicants may request call signs of their choice if the
combination is available. Objections to the assignment
of requested call signs will not be entertained at the FCC.
However, this does not hamper any party from asserting
such rights as it may have under private law in some other
forum. Should it be determined by an appropriate forum
that a station should not utilize a particular call sign, the
initial assignment of a call sign will not serve as a bar to
the making of a diﬀerent assignment.
It is clear that the FCC is not the owner of the call le ers used by
the broadcasters which it regulates. The right to broadcast is what
the agency licenses to broadcasters. The right to use the call le ers
is not licensed in a trademark sense. The FCC neither adopts nor
uses call le ers as service marks, so it does not own any such marks.
Even prior to its new rules the agency did not assert ownership of call
le ers. It acted only as a third party to resolve disputes between the

( 05)&3 *%&/5*'*&3 3&(*453*&4

owners of the call le ers, the broadcasters who actually use them.
The relationship between broadcasters and the FCC is analogous
to other areas of commerce where businesses are regulated by government agencies. Pharmaceutical manufacturers, for example, operate
under complex regulations established and administered by a federal
agency. The right to market a particular drug is granted by the agency
and may be withdrawn by the agency for particular health or safety
reasons at any time. The ownership of the trademarks used to identify these goods is obtained by the manufacturers through adoption
and use, just as with any other trademark or service mark. The fact
that sales are regulated by the agency and the agency may withdraw
the right to market the goods has no bearing on the manufacturers’
ownership of, and right to register, these trademarks during the time
while they are in lawful use. If and when the agency rules that a manufacturer may no longer sell a particular product, the use of the mark
in connection with that product ceases. If that or a similar product
is not sold again the manufacturer will no longer be able to maintain
trademark rights with respect to that particular kind of product. As
with any other goods or services, the rights in the marks are tied to
use.
In the case at hand the applicant obtained whatever rights it has
in its serivce mark by adopting it and using it to identify its broadcasting services. The FCC neither selected the mark for applicant nor
used it to identify any services. While the agency may withdraw applicant’s license to broadcast, it cannot, under its rules, unilaterally
direct applicant to change its service mark or adopt another one. If
the FCC withdraws the broadcast license and applicant is therefore
unable to continue rendering broadcast services under the mark, the
issue of abandonment of the mark would arise, but as long as applicant uses the mark to identify its services which are lawfully rendered
in commerce, applicant is the owner of its service mark.
In summary, we hold that through the adoption and use of the service mark “WSM” the applicant is the owner of the mark within the
meaning of Section 1(a) of the Act and is therefore entitled to register
it.

#VTJOFTT /BNFT

States regulate the oﬃcial names of corporations. and other organizations, and they also regulate assumed names people use when they’re
in business under a name other than their own (also referred to as
”doing business as” or ”d/b/a”). Typically, both kinds of names must
be registered; in fact, oﬃcial names are part of the incorporation paperwork. In both cases there aren’t many limits on the names that

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can be registered – but there are a few.
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[A] corporate name must be distinguishable upon the records of the
secretary of state from (1) the corporate name of a corporation incorporated or authorized to transact business in this state …
cmt. 2 Names That Are “Distinguishable upon the Records of the Secretary
of State”. –
The revision of the Model Act is based on the fundamental
premise that its name provisions should only ensure that each corporation has a suﬃciently distinctive name so that it may be distinguished from other corporations upon the records of the secretary
of state. The general business corporation statute should not be a
partial substitute for a general assumed name, unfair competition, or
antifraud statute. As a result, the Model Act does not restrict the
power of a corporation to adopt or use an assumed or ﬁctitious name
with the same freedom as an individual or impose a requirement that
an “oﬃcial” name not be “deceptively similar” to another corporate
name (a requirement of earlier versions of the Model Act). Principles
of unfair competition, not the business corporation act, provide the
limits on the competitive use of similar names.
The phrase “distinguishable upon the records of the secretary of
state” is drawn from section 102(a)(1) of the Delaware General Corporation Law. The principal justiﬁcations for requiring a distinguishable oﬃcial name are (1) to prevent confusion within the secretary
of state’s oﬃce and the tax oﬃce and (2) to permit accuracy in naming and serving corporate defendants in litigation. Thus, confusion
in an absolute or linguistic sense is the appropriate test under the
Model Act, not the competitive relationship between the corporations, which is the test for fraud or unfair competition. The precise
scope of “distinguishable upon the records of the secretary of state” is
an appropriate subject of regulation by the oﬃce of secretary of state
in order to ensure uniformity of administration. Corporate names
that diﬀer only in the words used to indicate corporateness are generally not distinguishable. Thus, if ABC Corporation is in existence, the
names “ABC Inc.,” “ABC Co.,” or “ABC Corp.” should not be viewed
as distinguishable. Similarly, minor variations between names that
are unlikely to be noticed, such as the substitution of a “,” for a “.”
or the substitution of an Arabic numeral for a word, such as “2” for
“Two,” or the substitution of a lower case le er for a capital, such as
“d” for “D,” generally should not be viewed as being distinguishable.
The elimination of the “deceptively similar” requirement that appeared in earlier versions of the Model Act is based on the fact that the
secretary of state does not generally police the unfair competitive use

( 05)&3 *%&/5*'*&3 3&(*453*&4

of names and, indeed, usually has no resources to do so. For example,
assume that “ABC Corporation” operates a retail furniture store in
Albany, New York, and another group wants to use the same name
to engage in a business involving imports of textiles in New York
City. An a empt to incorporate a second “ABC Corporation” (or a
very close variant such as “ABC Corp.” or “ABC Inc.”) should be
rejected because the names are not distinguishable upon the records
of the secretary of state. If the second group uses a distinguishable
oﬃcial name, like “ABD Corporation,” it probably may lawfully assume the ﬁctitious name “ABC Corporation” to import goods in New
York City if it ﬁles the assumed name certiﬁcate required by New
York law. In these situations, the secretary of state will usually not
know in what business or in what geographical area “ABC Corporation” is active or what name ABD Corporation is actually using in its
business; the secretary of state simply maintains an alphabetical list
of “oﬃcial” corporate names as they appear from corporate records
and decides whether a proposed name is distinguishable from other
“oﬃcial names” by comparing the proposed name with those on the
list. This assumes that there is either no assumed name statute or
that if there is such a statute it requires only local ﬁling in counties
or, as in New York, a central ﬁling which does not become part of the
corporate records maintained by the secretary of state’s oﬃce. These
assumptions are generally if not universally correct.
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Plaintiﬀ is a corporation engaged in the business of incorporating
companies and of acting as registered agent for such corporations.
Harvard has sought a writ of mandamus from this Court to compel
Defendants, the Director of the Division of Corporations and the Secretary of State, to accept for ﬁling a restated certiﬁcate of incorporation of a corporation proposed by Harvard to be called ”Bank Financial Services, Inc.”
Generally, the formation of banking companies is governed by
special statutes and such businesses are not permi ed to incorporate
under general incorporation acts. Notably, 8 Del. C. § 395 precludes
the use of the word ”trust” in the name of any corporation other than
those regulated under the banking laws. At least one commentator
has found it ”curious” that there is no statutory prohibition on the
use of the word ”bank” similar to the ”trust” prohibition.
The Secretary has an interest in furthering this general legislative
goal of preventing misconceptions by the public about the functions
of Delaware corporations. To further that goal, the Secretary has an
interest in restricting the use of the word ”bank.”
Surely, if an incorporator a empted to incorporate in Delaware

$)"15&3  53"%&."3,

using obscene or libelous language in the proposed corporate name,
the Secretary would have the discretion to refuse such a ﬁling. Similarly, if a proposed corporation’s name consisted of ﬁve hundred
words, the Secretary would have the authority to refuse to accept the
certiﬁcate of incorporation for ﬁling if the overly lengthy corporate
name would cause undue confusion or diﬃculty in administration.
This discretion is not delineated in the statute, but seems implicit in
the Secretary’s duty to accept corporate ﬁlings.
This Court ﬁnds that although there is no explicit statutory restriction on the use of the word ”bank” in the name of a corporation not
in fact exercising banking powers, the Secretary does possess some
limited, implied discretion when considering a proposed corporate
name which includes the word ”bank” but where that corporation
cannot engage in the business of banking.

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Petitioner oﬀered for ﬁling certiﬁcates of doing business under the
names of ‘The Brothel’, ‘The Garden of Erotic Pleasures’, ‘Theatre O’,
and ‘Club Orgy’. Section 130 of the General Business Law requires
that a person doing business under an assumed name must ﬁle a certiﬁcate designating the person conducting such business.
The County, Clerk refused to ﬁle said certiﬁcates because they
would be employed for deceptive purposes indicating that some kind
of illegal or otherwise obscene activity may be expected within the establishments so described.
Obviously, the assumed names on the certiﬁcates were adopted
for the purpose of obtaining publicity, public a ention, and curiosity
with the expectation they would promote business for the establishments. In fact, they may invite the a ention of the Police Department,
which would cause the establishments to be under police surveillance.
In such case the public would be protected from illegal activities.
The ﬁling of a certiﬁcate does not imply governmental approval
of the assumed name or of the business acitivity. The ﬁling is statutorily required for the purpose of identifying the person operating the
business under such assumed name.
It has not been shown that the assumed names are in contravention of any provision of law. While the names are distasteful, that is
not a suﬃcient reason to deny their ﬁling.
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 64
The Texas Legislature approved the Texas Optometry Act (Act) in
1969. Section 5.13 (d), at issue here, prohibits the practice of optometry under an assumed name, trade name, or corporate name.

( 05)&3 *%&/5*'*&3 3&(*453*&4

Once a trade name has been in use for some time, it may serve
to identify an optometrical practice and also to convey information
about the type, price, and quality of services oﬀered for sale in that
practice. In each role, the trade name is used as part of a proposal of
a commercial transaction. Like the pharmacist who desired to advertise his prices in Virginia Pharmacy Board v. Virginia Citizens Consumer
Council, the optometrist who uses a trade name ”does not wish to editorialize on any subject, cultural, philosophical, or political. He does
not wish to report any particularly newsworthy fact, or to make generalized observations even about commercial ma ers.” His purpose
is strictly business. The use of trade names in connection with optometrical practice, then, is a form of commercial speech and nothing
more.
A trade name is, however, a signiﬁcantly diﬀerent form of commercial speech from that considered in Virginia Pharmacy and Bates.
In those cases, the State had proscribed advertising by pharmacists
and lawyers that contained statements about the products or services
oﬀered and their prices. These statements were self-contained and
self-explanatory. Here, we are concerned with a form of commercial
speech that has no intrinsic meaning. A trade name conveys no information about the price and nature of the services oﬀered by an
optometrist until it acquires meaning over a period of time by associations formed in the minds of the public between the name and some
standard of price or quality. Because these ill-deﬁned associations of
trade names with price and quality information can be manipulated
by the users of trade names, there is a signiﬁcant possibility that trade
names will be used to mislead the public.
The possibilities for deception are numerous. The trade name of
an optometrical practice can remain unchanged despite changes in
the staﬀ of optometrists upon whose skill and care the public depends
when it patronizes the practice. Thus, the public may be a racted by
a trade name that reﬂects the reputation of an optometrist no longer
associated with the practice. A trade name frees an optometrist from
dependence on his personal reputation to a ract clients, and even allows him to assume a new trade name if negligence or misconduct
casts a shadow over the old one. By using diﬀerent trade names at
shops under his common ownership, an optometrist can give the public the false impression of competition among the shops. The use of a
trade name also facilitates the advertising essential to large-scale commercial practices with numerous branch oﬃces, conduct the State rationally may wish to discourage while not prohibiting commercial
optometrical practice altogether.
The concerns of the Texas Legislature about the deceptive and misleading uses of optometrical trade names were not speculative or hypothetical, but were based on experience in Texas with which the leg-

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islature was familiar when in 1969 it enacted § 5.13 (d). The forerunner of § 5.13 (d) was adopted as part of a ”Professional Responsibility
Rule” by the Texas State Board of Examiners in Optometry in 1959.
In a decision upholding the validity of the Rule, the Texas Supreme
Court reviewed some of the practices that had prompted its adoption.
Texas State Bd. of Examiners in Optometry v. Carp. One of the plaintiﬀs
in that case, Carp, operated 71 optometrical oﬃces in Texas under at
least 10 diﬀerent trade names. From time to time, he changed the
trade names of various shops, though the licensed optometrists practicing in each shop remained the same. He purchased the practices
of other optometrists and continued to practice under their names,
even though they were no longer associated with the practice. In several instances, Carp used diﬀerent trade names on oﬃces located in
close proximity to one another and selling the same optical goods
and services. The oﬃces were under common management, and had
a common staﬀ of optometrists, but the use of diﬀerent trade names
facilitated advertising that gave the impression of competition among
the oﬃces.
The Texas court found that Carp used trade names to give a misleading impression of competitive ownership and management of his
shops. It also found that Rogers, a party to this suit and a plaintiﬀ in
Carp, had used a trade name to convey the impression of standardized optometrical care. All 82 of his shops went under the trade
name ”Texas State Optical” or ”TSO,” and he advertised ”scientiﬁc
TSO eye examination[s]” available in every shop. The TSO advertising was calculated as well, the court found, to give ”the impression
that [Rogers or one of his brothers] is present at a particular oﬃce.
Actually they have neither been inside nor seen some of their eightytwo oﬃces distributed generally over Texas.” Even if Rogers’ use and
advertising of the trade name were not in fact misleading, they were
an example of the use of a trade name to facilitate the large-scale commercialization which enhances the opportunity for misleading practices.
It is clear that the State’s interest in protecting the public from the
deceptive and misleading use of optometrical trade names is substantial and well demonstrated. We are convinced that § 5.13 (d) is a constitutionally permissible state regulation in furtherance of this interest.

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( 05)&3 *%&/5*'*&3 3&(*453*&4

Shortly after Google announced its deal to acquire thermostat-maker
Nest Labs for $3.2 billion, shares of NEST started trading like gangbusters. Unfortunately, NEST is not the stock symbol for Nest Labs.
NEST actually represents the stock of Nestor Inc, an essentially
bankrupt company that has seen almost no stock activity since selling oﬀ its assets in 2009. No one is quite sure why the stock is even
still available to trade, but confused investors (or perhaps some unscrupulous ones) rushed to buy it up, mistakenly believing they were
ge ing in on Google’s Next Big Thing. Nestor’s stock price went up
1900 percent for the day, and reached a high of 10 cents after years
of trading for less than a penny a share. Economics blogger ,JE %ZOB
NJUF noticed the stark increase in trading, and posted this graph on
his site. Notice the volatile rise after a long period of quiet.
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On Friday, October 4, 2013, the Financial Industry Regulatory Authority, Inc. halted trading in the securities of Tweeter Home Entertainment Group (former OTC Symbol: TWTRQ). FINRA determined
to impose a temporary halt because FINRA believed that trading in
the TWTRQ security demonstrated a widespread misunderstanding
related to the possible initial public oﬀering of an unrelated security.
For the avoidance of further confusion, FINRA has determined to
eﬀect a symbol change for the common stock of Tweeter Home Entertainment Group. Members hereby are advised that the symbol for
Tweeter Home Entertainment Group has been changed from TWTRQ
to THEGQ and that quoting and trading in Tweeter Home Entertainment Group’s securities will resume under the new symbol, THEGQ,
eﬀective October 8, 2013 at 9:30:00 a.m. E.T.
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In July, 1997, Southern Parking System, Inc., a parking lot management services company, became Park One Incorporated. The selection of the name “Park One Incorporated” and the use of “pk1” as its
symbol came as the result of an extensive name search. Numerous
names were suggested; one name, “Trans Park,” was eventually decided on and pursued until it was discovered that another company
held a federal trademark on the name. The second eﬀorts at a name
search produced the “Park One Incorporated” name and the “pk1”
logo, an abbreviation of the full length name. Prior to ﬁnal selection,
Park One’s a orney did a trademark search to ascertain that the logo
was not identical to nor too closely related to an existing trademark.
Central Parking Corporation is also engaged in parking management services. The le ers “PK” designate Central’s stock on the New

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York Stock Exchange; since October of 1995, Central has used the
“PK” mark in its advertising and marketing to show the symbol under which its stock is traded. There is no evidence that Central has
used this mark outside its reference as its NYSE symbol. Central has
sued Park One for service mark infringement and seeks Park One’s
cessation of use of the “pk1” logo in its Motion for Preliminary Injunction.
By Central’s own admission the le ers “PK” were selected as the
NYSE symbol because of its association with “parking” and because
it was the closest combination of le ers approximating the word.
While Central argues that “PK” is a service mark, the evidence shows
that “PK” designates its New York Stock Exchange listing and is not a
service mark of the company. To the contrary, the “converging arrowhead” mark has been federally registered by Central and is the pervasive logo in its business. The “PK” mark tends to describe the services
oﬀered rather than to identify or distinguish a particular company.
Central’s clients are typically savvy business people who require
more than a logo before entering into complex and long term contracts. Thus, they are not likely to be confused by Park One’s use of
“pk1” while “PK” is the NYSE symbol for Central.
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EXXON is one of the world’s larger business enterprises, engaged in
virtually every aspect of the oil and gas business, from exploratory
and developmental well drilling to reﬁning and retail marketing. In
1972 plaintiﬀ adopted the trade name ”EXXON”, a coined term ﬁrst
registered as a trademark in 1968.
XOIL Energy Resources, Inc. are in the business of providing interests in tax shelters related to exploratory and developmental oil
and gas well drilling. Plaintiﬀ claims that defendants’ use of the
name XOIL in connection with oil and gas (or energy) enterprises,
will cause irreparable harm because it will be likely to cause the public to confuse the name XOIL with EXXON.
The symbol ”XON” is used by the various stock exchanges where
Exxon securities are traded as a ticker symbol to designate those securities. Plaintiﬀ contends that ”XON” has come to identify goods (viz.,
stock and other securities) sold by, sponsored by or originating with
the plaintiﬀ, and is entitled to protection from marks or designations
which are confusingly similar. Plaintiﬀ also argues that defendants’
securities are traded in the over-the-counter market, and that the symbols for defendants’ securities, ”XOIL” and ”XPLR”, will be confused
with Exxon’s ticker symbol ”XON”. In the absence of any evidence
that the symbol ”XON” is known at all outside of that small segment
of the public which consists of the employees of stock exchanges, in-

( 05)&3 *%&/5*'*&3 3&(*453*&4

vestment brokerage ﬁrms and their customers, and investment advisors and their advisees, I continue my examination of the degree of
similarity of the ticker symbols ”XON”, ”XOIL”, and ”XPLR” to their
usage in the stock business.
The securities of at least six companies (other than plaintiﬀ
or defendants) traded on various exchanges or in the over-thecounter market are designated by symbols involving the le er
”X”. At least one of these companies is engaged in the oil business:
Company Name Exchanges on Which Traded Ticker Symbol
Excel Energy
Over-the-Counter
EXLL
Ex-Cello-Corp.
New York, Boston
XLO
Exolon Co.
Boston
EXL
XOMOX Corp.
Over-the-Counter
XOMX
XONICS, INC.
Philadelphia, American
XOX
Xtra Corp.
New York, Boston
XTR
For those who recognize and use such symbols, the addition, deletion or change of a single le er is obviously more than suﬃcient to
enable those active in the securities ﬁeld to diﬀerentiate between
the various symbols. I also note that most of the symbols cannot be
pronounced easily, and infer that they are used primarily in wri en
communications, or are spelled out whenever spoken. Obviously
these two forms of usage would tend to reduce the likelihood of
confusion stemming from visual similarity.
”XPLOR” and ”XOIL” are much more similar to plaintiﬀ’s marks
aurally than visually. ”Exxon”, ”XOIL”, and ”Xplor” all commence
with an ”X” or ”ex” sound: ”X” and ”ex” are phonetically indistinguishable. ”Exxon” and ”Xplor” are also easily distinguishable when
heard. While there is a degree of aural similarity between ”XOIL” on
the one hand, and ”Exxon” on the other, the nature of defendants’
business is such that every transaction involves, at some point, a written instrument. There could not be, under such circumstances, such
reliance on the sounding of the name ”XOIL” as to make aural similarity an important factor.
The symbol ”XON” is used in the securities markets to identify
securities of the plaintiﬀ. Plaintiﬀ did not create this symbol, nor has
it registered or promoted this symbol as a trademark. No products
other than securities are identiﬁed by this symbol. Nor has any evidence been introduced that plaintiﬀ itself uses this mark on securities when it sells them. Thus unlike the trademarks involved in this
case, the symbol ”XON” is not owned by, used to sell products by, or
even created by plaintiﬀ. Furthermore, while the symbol ”XON” has
a well-established secondary meaning in the investment community,
it has no signiﬁcance outside that community, the size of which must
be considered small in relation to the general population. I ﬁnd the
strength of the symbol ”XON” to be quite strong in the investment

$)"15&3  53"%&."3,

community but so small as to be insigniﬁcant in the general population.
As to the ticker symbol ”XON”, the relevant public is accustomed
to distinguishing ticker symbols one from another. In the context of
the securities market and those who are active in that market, there
are not such similarities between the symbol for plaintiﬀ’s securities (”XON”) and the symbols for those of defendants (”XOIL” and
”XPLR”) as to lead to any confusion.
Quite apart from other inﬁrmities in plaintiﬀ’s claims of infringement with respect to the ticker symbol ”XON” there is a lack of proximity of product between the stocks and securities to which that symbol pertains and the securities of defendants with the symbol ”XOIL”.
XOIL is a non-listed stock and trades in the over-the-counter market while Exxon stock is listed on the principal exchanges. Plaintiﬀ’s
stock has sold in the $70 per share range during this suit, while the
price of defendants’ XOIL stock has ranged from $4 per share at issuance to $16 per share. Since the securities of these two companies
do not sell in the same price range or in the same markets, I conclude
that they are not in close proximity.
Plaintiﬀ argues that purchasers over-the-counter of XOIL Energy
Resources, Inc. stock, at a relatively low price, do not partake of the
sophistication of investors in limited partnerships. Plaintiﬀ also suggests that those who invest in defendants’ over-the-counter stock and
in its limited partnerships may in fact be quite unsophisticated, and
be directed to those investments by their brokers. I do not credit
these arguments. A market is not rendered less sophisticated because
business in that market is ordinarily transacted through brokers. To
the contrary, the brokers render a market, if anything, more sophisticated: professional buyers are less likely to be subject to confusion.
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Trading symbols are used within the securities business to identify a
speciﬁc publicly traded security; in particular trading symbols play
an important role in the technical execution of trading transactions
on the ﬂoor of the NYSE.
Medtronic was founded in 1949. It manufactures and sells a variety of medical products, including cardiac pacemakers, artiﬁcial
heart valves, cardiopulmonary products and interventional vascular
products.
Since the early 1960s, Medtronic’s securities have been publicly
traded. At ﬁrst they were traded over the counter. Then, beginning
on February 5, 1971, Medtronic’s securities were traded on NASDAQ
under the trading symbol MDTR.

( 05)&3 *%&/5*'*&3 3&(*453*&4

On November 21, 1977 Medtronic began the listing of its stock on
the NYSE and its listing has remained there until the present time.
All stocks listed on the NYSE are assigned a unique trading symbol
which must comprise three or fewer le ers. Since they were ﬁrst
listed on the NYSE, Medtronic’s securities have been identiﬁed by
the trading symbol MDT.
When a company is accepted for listing on the NYSE, it is asked
to submit three alternative choices for a three le er trading symbol.
If the requested symbol is available, the NYSE assigns it to the listing company. A trading symbol is not available if it is already in use
by a listing company on either the NYSE or a number of other regional exchanges. Approximately two-thirds of the ﬁrst choices for
NYSE trading symbols are not available because they are already in
use. The sole criterion used by the NYSE in assigning a trading symbol and the only ground on which a trading symbol will be denied is
the availability of a symbol.
The parties do not dispute that Medtronic’s motive for choosing
the MDT trading symbol was to obtain a trading symbol as close as
possible to its former NASDAQ trading symbol. The parties also
do not dispute that the assignment of the MDT trading symbol to
Medtronic was made in good faith, without any intent by either
Medtronic or the NYSE to violate any trademark or trade name held
by MDT Corp.
On July 1, 1988, MDT Corp. applied to list its publicly traded
securities on the New York Stock Exchange and on August 5, 1988, the
NYSE accepted MDT Corp.’s securities for listing. At that time, the
NYSE informed MDT Corp. that its ﬁrst choice for a trading symbol
was not available because it was already being used to identify the
stock of Medtronic.
Starting in February of 1989, MDT Corp. began a empts to convince Medtronic to change its NYSE trading symbol. Medtronic
never agreed to MDT Corp.’s demands, and since March 1989 has
consistently and repeatedly expressed to MDT Corp. that it was
unwilling to relinquish the MDT trading symbol. Similarly, since
1988, NYSE has consistently and repeatedly expressed to MDT Corp.
that it would not change Medtronic’s MDT trading symbol without
Medtronic’s consent.
In November 1977, when the MDT trading symbol was assigned
to Medtronic by the NYSE, MDT Corp. was not publicly traded and
was li le known in the public securities industry. MDT Corp. did not
go public until January 1987 when it listed its securities on NASDAQ
under the trading symbol MDTC. That was ten years after the MDT
trading symbol was assigned to Medtronic by the NYSE.
Until January 1987, MDT Corp. shares were never publicly traded,
there 1032*1032 were no publicly available reports from brokerage

$)"15&3  53"%&."3,

or investment ﬁrms concerning trading in MDT Corp. shares, there
were no third party listings or brokerage reports of trades of MDT
Corp. shares, no trading symbol existed to identify MDT Corp.
shares, and MDT Corp. did not participate as an issuer in the market for publicly traded securities.
Although MDT Corp. is the senior user of the MDT mark in the
medical products ﬁeld, Medtronic, not MDT Corp., is the senior user
of the MDT mark within the context of the publicly traded securities
market.
The doctrine of Inwood Laboratories requires that, to be liable for
contributory infringement, a party must have actively ”suggested,
even if only by implication” the infringement. MDT Corp. has not
argued, and indeed cannot argue, that either Medtronic or the NYSE
has in any way suggested, or even implied, that anyone should use
MDT the trading symbol as anything but a trading symbol. Instead,
MDT Corp. appears to interpret Inwood Laboratories to impose an afﬁrmative duty on innocent third party users of a mark to police the
mark for its owner. No such duty exists.
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As both an empirical researcher in ﬁnance and a personal investor,
I deal with stock exchange ticker symbols almost every day. I am
pleased that the topic of ticker symbols has come up, because there is
a need for improvements in the present system to prevent consumer
confusion. Here are my comments on the exchange symbology plans.
In brief:
• Just as with phone numbers, the rights to a particular ticker
symbol should belong to the issuers, not the exchanges. Issuers
generally expend considerable resources to associate their corporate brand image with a particular set of characters, and their
claims should prevail over the far weaker claims of any particular exchange.
• Changing ticker symbols cause investor confusion, leading to
errors in both research and trading. Allowing issuers to keep
their ticker symbols when they change exchanges will lead to
fewer costly trading mistakes.
• Perpetual reservation of unused ticker symbols is a bad idea.
Unused tickers should be available to any legitimate issuer seeking to use them on a ﬁrst come, ﬁrst served basis.
Introduction: Who owns the alphabet?
In the beginning, there was the stock ticker. Each exchange used its
own symbology for the instruments it traded. A stock traded on mul-

( 05)&3 *%&/5*'*&3 3&(*453*&4

tiple exchanges could have multiple tickers. Or the same ticker could
mean diﬀerent stocks on diﬀerent exchanges. For example, AT&T
(then known as American Bell) ﬁrst traded on the Boston Exchange
under the ticker symbol T in 1888. When AT&T listed on the NYSE,
it used the ticker symbol ATT and did not use the single le er T on
the NYSE until 1931.
This is still the international practice today. For example, the
ticker symbol FUN on the NYSE represents Cedar Fair, L.P., a maker
of amusement parks. The symbol FUN on the TSX in Toronto is
Fun Technologies PLC. This creates a lot of fun for investors and researchers who deal with the stocks that are dually listed in the U.S.
and Canada.
To deal with this confusion in the United States, Standard and
Poor’s came up with a standard alphabet-only system of U.S. ticker
symbols which became the industry standard.
The NYSE, AMEX, and regional exchanges traditionally used one,
two, or three character ticker symbols to identify stocks. The NASDAQ has traditionally used four or ﬁve character ticker symbols.
When a ﬁrm switched its stock listing from the NASDAQ to the
AMEX or NYSE, it would have to change its ticker symbol to a shorter
ticker symbol. Likewise, when a stock moved from the NYSE or
AMEX to the NASDAQ, it had to adopt a longer four or ﬁve character ticker symbol. However, when stocks switched from the AMEX to
the NYSE they usually kept their shorter ticker symbol. Thus, there
is a long precedent of ﬁrms keeping their ticker symbols when they
switch exchanges.
Now NASDAQ wants to use shorter ticker symbols and its competitors don’t want to let it. NASDAQ and its allies have proposed
se ing up a plan under the NMS rules to divvy up stock symbols
among the exchanges. The NYSE and its allies have proposed a competing plan to keep the shorter ticker symbols all to themselves. This
brings up an interesting question: Who owns the alphabet, the exchanges or the issuers?
Issuers have the strongest claim to any particular ticker symbol.
The economic issues involved are very similar to those involved with
trademarks. I am not now, nor have I ever been, an a orney, so I will
not make a legal argument here. I will instead make an economic
argument as to how the rights to a particular ticker symbol should be
decided.
Trademark protection is quite broad and covers the use of such
a trademark in many other applications. The same economic considerations that led society to create trademark protection can also be
applied to the more limited case of who should have the right to a
particular le er combination for use as a ticker symbol.

$)"15&3  53"%&."3,

There are two issues here: First, should an issuer that moves its
listing from one exchange to another exchange have the right to take
its ticker symbol with it? Does the ticker symbol belong to the exchange or the ﬁrm? And second, should a group of exchanges, or
anyone else for that ma er, have an exclusive right to certain le er
combinations even when those combinations are not in use? Is a one, two-, or three- character ticker symbol such a unique signal of the
AMEX, NYSE, and regional exchanges that they should be able to preclude NASDAQ-listed ﬁrms from using them? The proposed NMS
plans give certain exchanges the right to reserve some symbols indefinitely even through they have no current plans to use them.
Companies often go to great eﬀorts to come up with ticker symbols that appeal to investors. Sometimes ticker symbols reﬂect the
name of the company (AAPL or IBM for example). Other ticker
symbols have other associations with the issuer. Dynamic Materials, which is engaged in explosive metal working, has ticker symbol
BOOM while Anheuser-Busch, the maker of Budweiser, uses ticker
symbol BUD. Southwest Airlines started its operations at Love Field
and thus uses the ticker LUV. The post- bankruptcy US Airways
chose LCC to signify that it is a Low Cost Carrier. Oftentimes these
symbols are seen as part of a ﬁrm’s identity.
Corporations sometimes include their ticker symbols in their advertising campaigns as a way to alert their customers that their stock
is publicly traded. When companies change their names, they often change their ticker symbols as well. Sometimes the ﬁrm’s identity and ticker symbol have become so intertwined that the company
changes its name to match its ticker. X was used for U.S. Steel long
before it changed its name to USX.
Over time, investors tend to associate a particular ticker symbol
far more with a particular company than with a particular exchange.
Thus, in terms of reducing investors’ search and transaction costs, it
makes sense to award the rights to a particular ticker symbol to the
issuer that has been using the ticker symbol.
It also makes economic sense to expand the pool of potential ticker
symbols for all issuers by giving all exchange-listed issuers full access
to all combinations of ticker symbols from one to ﬁve characters. Ford
Motor Company may well prefer the ticker FORD as it will cause less
confusion to investors than F. This will allow issuers to pick tickers
that be er match the issuer to the symbol, thus reducing communication costs and search costs.
Thus, the claim of any particular exchange or group of exchanges
to the entire class of shorter ticker symbols is quite weak. In general,
listed companies have expended far more resources in associating a
particular ticker symbol with their company than has anyone else. It
thus makes sense to allow issuers to keep their ticker symbols if they

( 05)&3 *%&/5*'*&3 3&(*453*&4

choose to switch their listing from one market to another. There is no
good reason why an Amex or NYSE-listed ﬁrm should not be able to
keep its ticker symbol if it moves to NASDAQ. Likewise, there is no
good reason why a NASDAQ-listed ﬁrm should not be able to keep
its longer ticker if wants to move to the AMEX or NYSE.
Shorter ticker symbols should go to the more actively traded stocks, if they
want them.
In any language, the most frequently used words are typically the
shortest ones. This reduces the “cost” of using the language. Similarly, the shortest ticker symbols should be used for the most frequently traded securities, as shorter ticker symbols require less typing and may be easier to remember. This reduces the time it takes investors to type in ticker symbols and reduces the mental bandwidth
needed to remember the tickers. Some of the most actively traded
securities are NASDAQ listed, so economic eﬃciency would dictate
that such actively-traded NASDAQ stocks could also be able to use
shorter ticker symbols if they want them.
Traditionally, the exchanges used shorter ticker symbols for the
larger and more actively traded stocks. T stands for ATT (“Telephone”) and F for Ford. Thus, shorter ticker symbols have a certain
cachet associated with larger issues. However, the shorter ticker symbols are no longer exclusively used by the most actively traded shares.
Barnes Group Inc., ticker symbol B, has a three-month average daily
volume of only 384,863 shares.
Shorter ticker symbols can also lead to investor confusion as well.
Automated news search engines that search for a stock symbol sometimes bring up numerous false hits when searching for shorter ticker
symbols. Longer ticker symbols that are not recognized words yield
fewer false hits. Googling the le ers MSFT yields 7.3 million hits,
most of which are relevant to Microsoft. Googling the le er A yields
7.3 billion hits, most of which have nothing to do with Agilent. Thus,
some issuers will wisely choose to avoid shorter ticker symbols.
Ticker symbol portability is a good because it will reduce investor
confusion.
Speaking as both an investor and researcher, I can a est that mutating ticker symbols can be a large source of confusion and costly investment mistakes. When a ticker symbol changes, data vendors do
not always catch the change. I have personally run across many instances in which data vendors have proﬀered up incorrect charts or
incorrect accounting information because of a missed symbol change.
Reducing the number of ticker symbol changes will be a plus for investors, and will reduce costs to the legions of unsung heroes in the
back oﬃces who keep track of these things.

$)"15&3  53"%&."3,

Ticker symbol portability will reduce the confusion to investors
and researchers that comes from changing ticker symbols. This is
similar to the rights to a particular telephone number. In the bad old
days, a phone company (either landline or mobile) would assign a
number to a customer. If a customer switched to another provider,
the customer had to give up the old number and get a new number
from the new provider. This was, to say the least, a nuisance. Now
the practice is that customers can keep their phone numbers when
they switch providers. This is in line with economic eﬃciency as it
reduces the overall costs to the economy when everyone has to keep
track of new phone numbers. It also enhances competition between
phone companies. In the same manner, companies should be able
to take their ticker symbols with them when they switch exchanges.
This ticker symbol portability will result in fewer costs for issuers and
investors.
As such, I don’t think that NASDAQ’s proposal for threecharacter portability goes far enough, and that such exchange ticker
symbol portability should extend to one- and two- (as well as three-,
four-, and ﬁve-) character tickers.
Exchanges should not be allowed to sit on unused symbols.
However, in order for trademarks to be recognized as intellectual
property (in which case others are precluded others from using them),
they generally need to be used. This makes economic sense because
parking unused trademarks reduces the potential beneﬁts to consumers and producers that would occur if someone else used the unused property. Thus, NASDAQ should not be allowed to park the
symbol FORD if Ford Motor Company wanted to use it on another exchange. The features in both proposed plans that allow the exchanges
to permanently reserve ticker symbols should not be approved.
Symbols should be allocated on a “ﬁrst-come, ﬁrst-served” basis.
If a ticker symbol is not in use, then it should be available to any legitimate issuer that wants to use it. Symbols should be available to
issuers on a “ﬁrst-come, ﬁrst served” basis with a “Use it or lose it”
feature.
An issuer wishing to use a symbol could request the symbol, and
then would have a given length of time in which to actually use the
symbol. Use of the symbol would include actually trading the security, or ﬁling a listing application with an exchange, or a registration
statement with the SEC in anticipation of trading on an exchange.
Some tickers should be oﬀ limits.
Although issuers should, in general, be able to choose any symbol
they want, there are legitimate reasons why some tickers should not

( 05)&3 *%&/5*'*&3 3&(*453*&4

be issued.
One exception to the “ﬁrst-come, ﬁrst-served” principle would be
for tickers that are so close to existing trademarks that allowing others
to grab them would sow confusion among investors. Thus, it should
not be permissible for someone other than Ford Motor Company to
grab the ticker FORD.
Words that many people ﬁnd oﬀensive should not be used as
ticker symbols. Thus, examples include ****, ****, ****, and <expletive
deleted.>
Symbols that are too close to an existing symbol, either in meaning
or on the keyboard, could also be precluded if common typos would
cause traders to make more “fat ﬁngers” mistakes. For example, it
would not be a good idea to use both “FORM” and “FROM” as ticker
symbols.
Abandoned tickers should be unavailable for a six-month waiting period to
prevent confusion.
When a company abandons a desirable ticker, it is often recycled
quickly. For example, when Chrysler was taken over by Daimler
to become DaimlerChrysler, its ticker symbol C was in use for Citigroup within a few weeks. Many investors keep track of portfolios
as lists of ticker symbols, and reassigned ticker symbols cause lots
of headaches. I have personally experienced situations in which data
vendors did not catch the switch, and supplied bad data to in the way
of bad price charts, or worse yet, bad accounting data.
When a ticker symbol is abandoned, there should be a six-month
waiting period before it can be reassigned. This will give investors
time to adapt to the switch.
The Plan needs a dispute resolution mechanism.
There will be inevitable disputes that arise over the rights to various
ticker symbols, and the Plan should come up with a method for resolving disputes. For example, one issuer may claim that it should
have the rights to a particular ticker symbol as it has already trademarked that word. Or there may be a dispute as to whether a particular claimant has actually used a ticker symbol to retain rights to
it. The dispute resolution mechanism of the plan should look at the
facts and circumstances in each particular case.

The /BUJPOBM .BSLFU 4ZTUFN 1MBO GPS UIF 4FMFDUJPO BOE 3FTFSWBUJPO PG 4F
DVSJUJFT 4ZNCPMT, a/k/a the ”Symbols Reservation System,” is a joint
agreement among ﬁfteen national exchanges. It is operated by the
Options Clearing Corporation. It allows for symbols of up to ﬁve

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$)"15&3  53"%&."3,

characters. One-to-three character symbols are reserved for stocks
traded on a national exchange; four-and-ﬁve character symbols can
be used for any security or index. In general, symbols are portable
between exchanges:
If an [exchange] lists a security or product that previously
was listed on another [exchange], the New [exchange]
shall have the rights to that symbol unless, in its discretion, it consents to the symbol being retained by the Former [exchange].
Each exchange may have up to 40 perpetual reservations and 3,000
temporary reservations – the symbol must be either used or released
within two years. If an exchange stops using a symbol (i.e. because
a company has merged or been delisted), it can retain the symbol for
up to two years. As for reuse:
A symbol, nonetheless, may not be reused to identify a
new security (other than the security that has been trading under such symbol) within 90 calendar days from the
last day of its use to identify the old security, without the
consent of the party that released the symbol. A party may
not reuse (or consent to the reuse of) a symbol to identify a
new security unless the party reasonably determines that
such use would not cause investor confusion.

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What is an ISBN?
The International Standard Book Number (ISBN) is a 13-digit number that uniquely identiﬁes books and book-like products published
internationally.
What is the purpose of an ISBN?
The purpose of the ISBN is to establish and identify one title or edition of a title from one speciﬁc publisher and is unique to that edition,
allowing for more eﬃcient marketing of products by booksellers, libraries, universities, wholesalers and distributors.
What is the format of the ISBN?
Every ISBN consists of thirteen digits and whenever it is printed it
is preceded by the le ers ISBN. The thirteen-digit number is divided
into four parts of variable length, each part separated by a hyphen.

( 05)&3 *%&/5*'*&3 3&(*453*&4

• Group or country identiﬁer which identiﬁes a national or geographic grouping of publishers;
• Publisher identiﬁer which identiﬁes a particular publisher
within a group;
• Title identiﬁer which identiﬁes a particular title or edition of a
title;
• Check digit is the single digit at the end of the ISBN which validates the ISBN.
What is the format of the new ISBN-13?
Every ISBN will consist of thirteen digits in 2007. The thirteen digit
number is divided into ﬁve parts of variable length, each part separated by a hyphen.
• The current ISBN-13 will be preﬁxed by ”978”
• Group or country identiﬁer which identiﬁes a national or geographic grouping of publishers;
• Publisher identiﬁer which identiﬁes a particular publisher
within a group;
• Title identiﬁer which identiﬁes a particular title or edition of a
title;
• Check digit is the single digit at the end of the ISBN which validates the ISBN.
Who can assign ISBNs to a publisher?
There are over 160 ISBN Agencies worldwide, and each ISBN Agency
is appointed as the exclusive agent responsible for assigning ISBNs
to publishers residing in their country or geographic territory. The
United States ISBN Agency is the only source authorized to assign
ISBNs to publishers supplying an address in the United States, U.S.
Virgin Islands, Guam and Puerto Rico and its database establishes
the publisher of record associated with each preﬁx.
Once an ISBN publisher preﬁx and associated block of numbers
has been assigned to a publisher by the ISBN Agency, the publisher
can assign ISBNs to publications it holds publishing rights to. However, after the ISBN Agency assigns ISBNs to a publisher, that publisher cannot resell, re-assign, transfer, or split its list of ISBNs among
other publishers. These guidelines have long been established to ensure the veracity, accuracy and continued utility of the international
ISBN standard.
As deﬁned by the ISO Standard, the ISBN publisher preﬁx (or
”root” of the ISBN) identiﬁes a single publisher. If a second publisher
subsequently obtains an ISBN from the assigned publisher’s block of
ISBNs, there will be no change in the publisher of record for any ISBN

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in the block as originally assigned.
If you are a new publisher, you should apply for your own ISBN
publisher preﬁx and plan to identify and circulate your books properly in the industry supply chain. You may encounter oﬀers from
other sources to purchase single ISBNs at special oﬀer prices; you
should be wary of purchasing from these sources for the reasons
noted above. There are unauthorized re-sellers of ISBNs and this activity is a violation of the ISBN standard and of industry practice. A
publisher with one of these re-assigned ISBNs will not be correctly
identiﬁed as the publisher of record in Books In Print or any of the
industry databases such as Barnes and Noble or Amazon or those of
wholesalers such as Ingram. If you have questions, contact the US
ISBN Agency for further advice.

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 64
Since 1969 New Hampshire has required that noncommercial vehicles bear license plates embossed with the state mo o, ”Live Free or
Die.”
Another New Hampshire statute makes it a misdemeanor ”knowingly to obscure the ﬁgures or le ers on any number plate.” The term
”le ers” in this section has been interpreted by the State’s highest
court to include the state mo o.
Appellees George Maynard and his wife Maxine are followers
of the Jehovah’s Witnesses faith. The Maynards consider the New
Hampshire State mo o to be repugnant to their moral, religious, and
political beliefs,2 and therefore assert it objectionable to disseminate
this message by displaying it on their automobiles. Pursuant to these
beliefs, the Maynards began early in 1974 to cover up the mo o on
their license plates.
We are thus faced with the question of whether the State may constitutionally require an individual to participate in the dissemination
of an ideological message by displaying it on his private property in
2

Mr. Maynard described his objection to the state mo o:
By religious training and belief, I believe my ”government” – Jehovah’s Kingdom – oﬀers everlasting life. It would be contrary to that
belief to give up my life for the state, even if it meant living in bondage.
Although I obey all laws of the State not in conﬂict with my conscience, this slogan is directly at odds with my deeply held religious
convictions.
I also disagree with the mo o on political grounds. I believe that
life is more precious than freedom.

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a manner and for the express purpose that it be observed and read by
the public. We hold that the State may not do so.
We begin with the proposition that the right of freedom of thought
protected by the First Amendment against state action includes both
the right to speak freely and the right to refrain from speaking at all.
The State points out that passenger vehicles, but not commercial,
trailer, or other vehicles are required to display the state mo o. Thus,
the argument proceeds, oﬃcers of the law are more easily able to determine whether passenger vehicles are carrying the proper plates.
However, the record here reveals that New Hampshire passenger
license plates normally consist of a speciﬁc conﬁguration of le ers
and numbers, which makes them readily distinguishable from other
types of plates, even without reference to the state mo o.13
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What does Petitioner, John T. Mitchell, have in common with “Seinfeld’s” Cosmo Kramer? Both received and displayed on their respective motor vehicles, for a period of time, vanity license plates bearing
words that had arguably scatological meanings.1 Mitchell did not
give up without a ﬁght when the Maryland Motor Vehicle Administration (MVA) recalled his vanity plates; hence, this litigation.
The MVA granted in 2009 John T. Mitchell’s application for vanity license plates bearing the word “MIERDA.” Two years later, the
MVA received a complaint about “MIERDA” on the plates displayed
on Mitchell’s vehicle. The MVA determined then that “mierda” translates into English as “shit” and rescinded the plates according to a
State regulation authorizing the denial or recall of vanity plates containing “profanities, epithets, or obscenities.”
B
Maryland requires the obtention and display of registration plates on
in-state registered motor vehicles. The plates must contain an individualized registration number, consisting of le ers, numerals, or both,
which is assigned typically by the MVA. For an additional annual fee
of $50, an applicant may select a special, personalized registration
number, subject to the MVA’s approval. Known as “vanity plates,”
these plates allow the display of “a message with at least 2 and up
13

New Hampshire passenger vehicle license plates generally consist of two letters followed by four numbers. No other license plate category displays this combination, and no other category bears the state mo o. However, of the approximately
325,000 passenger plates in New Hampshire, 9,999 do not follow the regular pattern, displaying numbers only, preceded by no le ers.
1
In “Seinfeld” (Episode 107 (27 April 1995)), Kramer was sent erroneously vanity plates bearing the words “ASSMAN,” which plates had been applied for by a
proctologist.

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to 7 characters,” unless the chosen message “has already been issued
or ... is objectionable.” Indeed, Maryland regulations empower the
MVA to deny or rescind vanity plates whose messages bear “profanities, epithets, or obscenities.”
The MVA oﬀers also two options for customizing a license plate’s
general theme, which may, but need not, be combined with a vanity message. First, “background scene plates,” or “commemorative
plates,” display images and text associated with issues the State
wishes to promote through both its speech and fee revenue. Commemorative plates are available presently to support the Chesapeake
Bay and agriculture. Second, Maryland allows the customization of
“specialty plates” for members of nonproﬁt organizations who pay a
fee to express their organizations’ messages via logos, emblems, the
organization’s name, or another combination of characters. § 13–619.
The MVA sells specialty plates for a diverse range of issues from medical and military interests to educational institution alumni associations, and hobbies.
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In its most recent case elucidating the distinction between private
speech and government speech, the U.S. Supreme Court determined
that a Texas-issued specialty license plate displaying a Confederate
ﬂag constituted speech by the government, not speech by the Texas
Division of the Sons of Confederate Veterans, the organization that
sought the plate design. Walker v. Texas Div., Sons of Confederate Veterans, Inc.. A court’s identiﬁcation of speech as either that of the
government or of a private person or entity determines whether the
First Amendment applies at all: government statements (and government actions and programs that take the form of speech) do not
normally trigger the First Amendment rules designed to protect the
marketplace of ideas. The First Amendment protects, however, private speech on government property, with some limitations.
The Court used three factors to disambiguate government speech
from private speech. The Court considered ﬁrst whether the government used historically the mechanism of communication in question “to speak to the public.” Many States, including Texas, used specialty plate slogans for nearly a century “to urge action, to promote
tourism, and to tout local industries.” Second, the Court considered
to whom the audience of the communications would tend reasonably to a ribute the speech: a private speaker or the public owner
of the property on which the speech takes place. Because of their

( 05)&3 *%&/5*'*&3 3&(*453*&4

well-understood “governmental purposes of vehicle registration and
identiﬁcation,” the display of “TEXAS” on each plate, and the State’s
ownership of specialty plate designs, “Texas license plate designs are
often closely identiﬁed in the public mind with the State.” Finally,
the Court looked to whether the government exercises control over
the communication, for example, by retaining “ﬁnal approval authority.” Texas had “direct control” over specialty plate messages, including “the design, typeface, color, and alphanumeric pa ern for all license plates,” as well as “ﬁnal approval authority” over the content
of a specialty plate design. These considerations, taken together, persuaded the Court to ﬁnd the specialty plates at issue to be government
speech.
In the present case, a message on a vanity plate, such as
“MIERDA,” is private speech. Applying the Supreme Court’s ﬁrst
analytical factor, historical usage, although license plates in general
function historically as government IDs for vehicles, vanity plates
display additionally a personalized message with intrinsic meaning
(sometimes clear, sometimes abstruse) that is independent of mere
identiﬁcation and speciﬁc to the owner. The unique, personalized
messages communicated via vanity plates contrast with the generic,
depersonalized speech conveyed by a specialty plate: many Maryland vehicles display identical specialty plates; only the registration
numbers, which on a specialty plate have no intrinsic meaning and
carry no message, will vary. Additionally, private citizens, not the
State of Maryland, create and submit prospective vanity plate messages. So, historically, vehicle owners have used vanity plates to communicate their own personal messages and the State has not used vanity plates to communicate any message at all. Unlike the license plate
slogans that States use ‘to urge action, to promote tourism, and to tout
local industries, vanity plates are personal to the vehicle owner, and
are perceived as such.
Turning to the factor of audience perception, the personal nature
of a vanity plate message makes it unlikely that members of the
public, upon seeing the vanity plate, will think the message comes
from the State. Unlike the specialty plates at issue in Walker, vanity
plates bear unique, personalized, user-created messages that cannot
be a ributed reasonably to the government. The fact that this kind
of speech takes place on government property – a license plate – is
not transformative in this context of private speech into government
speech. Although perhaps the perception of a governmental imprimatur is what makes “MIERDA” arguably clever or humorous in the
ﬁrst place, this stems from the public perception of State permission
of private speech, not State endorsement or State expression. A fellow
motorist who understood the primary Spanish meaning or English
translation of “mierda” might think: “the MVA let you get away with

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that?,” or “you pulled a fast one on the MVA!” Even these sentiments
are rooted in an understanding that the vehicle owner, not the government, is the speaker, and that the speaker implicated the State in
a private message that, surprisingly, the government permi ed, but
certainly did not endorse.
Considering the third factor of the government speech analysis,
the MVA’s statutory and regulatory authority to deny or rescind a
vanity plate based on the content of its message, does not rise to the
level of such tight control that the personalized messages become government speech. Maryland does not exercise “direct control” over
the “alphanumeric pa ern” displayed on vanity plates in the same
or similar way that Texas controlled specialty plates. In Walker, the
State had sole control over the content of a specialty plate. With respect to vanity plates in Maryland, vehicle owners, not the State, create the proposed messages and apply for them. Although the MVA
retains discretion to deny a prospective vanity message, its authority
to recall vanity plates (but not specialty plates) issued erroneously
suggests that the MVA’s control over vanity plates does not rise to
the rigorous level required to transmogrify its regulatory approach
into government speech.
Contrarily, a recent ruling by the Indiana Supreme Court held that
vanity plates constitute government speech because “license plates
have long been used for government purposes” such as vehicle identiﬁcation, their messages are perceived to be communicated on behalf
of the State, and the State maintains direct control over the messages
they display. Comm’r of Indiana Bureau of Motor Vehicles v. Vawter
We reject the Vawter court’s reasoning because vanity plates represent
more than an extension by degree of the government speech found on
regular license plates and specialty plates. Vanity plates are, instead,
fundamentally diﬀerent in kind from the aforementioned plate formats. Maryland has not communicated historically to the public with
vanity messages. Observers of vanity plates understand reasonably
that the messages come from vehicle owners.
[Long discussion of public-forum doctrine.]
Maryland’s vanity plates constitute a nonpublic forum. The purpose of the statutory mandate for license plates on vehicles registered
in Maryland is identiﬁcation of vehicles on the road. Maryland began
oﬀering vanity plates in 1971. From the vanity plate program’s inception, Maryland has required applicants to pay a revenue-generating
fee to the State. The purpose of the program was, and still is, to raise
money. This purpose does not evidence a State intent to facilitate
the full and free expression of ideas, but rather to tap into the egocentricities of vehicle owners, to the State’s ﬁnancial beneﬁt. Admi edly,
Maryland did intend to open a public space for limited private expression via vanity plates, but only in the sense that it did not establish

( 05)&3 *%&/5*'*&3 3&(*453*&4

accidentally the procedures for vehicle owners to submit prospective
vanity messages and procure vanity plates. This does not mean, however, that the State intended vanity plates to serve as a public forum,
but rather, that they happen to aﬀord a limited space for speech as an
incentive to lure vehicle owners into paying for vanity plates, thereby
achieving the MVA’s purpose of raising revenue.
Maryland constrains the expressive potential of vanity plates in
accordance with the State’s purposes for license plates in general and
vanity plates in particular. The combination of characters on a plate,
whether a vanity plate or otherwise, must be unique to serve as a government ID. The State limits vanity messages to seven characters, presumably because that is suﬃcient to register a unique combination
of characters to each vehicle. Of course, pithy and clever individuals ﬁnd invariably a way to express themselves in such a constrained
space, but that does not bear on whether the State intended to open
a public forum.
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The prohibition of “profanities, epithets, or obscenities” on vanity
plates relates reasonably to Maryland’s purposes of vehicle identiﬁcation and revenue generation, which involve the public display of
license plates. Because the State requires motorists to display license
plates on their vehicles, the public is exposed to the messages that
appear on vanity plates. For be er or worse, our society sets apart
particular words as out-of-bounds; their u erance or display can be
understood reasonably as indecent or oﬀensive, especially in the presence of minors. “Shit” is one of these words, and that is an English
translation, admi ed by Mitchell, of “mierda.” It is reasonable, therefore, for the State to protect knowledgeable observers of vanity plates
from the perception of such a term. Even though a witness to a vanity
plate message will discern easily the vehicle owner as the speaker, because the speech takes place on government property and only with
State permission, the message will be associated with the State. The
state has a legitimate interest in not communicating the message that
it approves of the public display of oﬀensive scatological terms on
state license plates, and it is reasonable, therefore, for Maryland to
prohibit “profanities, epithets, or obscenities,” content with which it
does not wish to associate.
Neither the MVA’s content-restricting regulation, nor its actions
in accordance with that regulation, constitute viewpoint discrimination. Viewpoint discrimination occurs when the government targets
particular views taken by speakers on a subject, for example, to discourage one viewpoint and advance another. Here, the Maryland
regulation targets only content—profanities, epithets, and obsceni-

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ties – not a speaker’s viewpoint about such terms or any viewpoint
expressed with such terms. Clearly, the regulation does not target
viewpoints in support of organic agriculture. If Maryland wished
to suppress pro-agriculture speech, it probably would not speak in
favor of agriculture via commemorative plates, and it would restrict
the use on vanity plates of terms such as “FARM,” “COMPOST,” and
“CROPS.” This is not the case. Moreover, Maryland did not “impute
an oﬀensive intent” on the part of Mitchell, as he claims. Mitchell’s
subjective intent is irrelevant because the regulation restricts outright
and objectively profanities, not speciﬁc viewpoints for or against profanity. The MVA rescinded Mitchell’s plates not because of Mitchell’s
real or presumed intent, but based on the content with which Maryland is not willing to be associated, and the content the State is not
willing to inﬂict upon the discerning public.
Substantial evidence supported the MVA’s determination.
Wikipedia research (received in evidence by the ALJ without objection) revealed “mierda” to be an expletive in Spanish slang that
translates in its primary sense into “shit,” an expletive in English.
Mitchell’s testimony corroborated that “mierda” means “shit,”
among other things, in English. Finally, the MVA maintained that
it received a complaint from an observer of the vanity plate at
issue about the inappropriateness of “MIERDA.” This evidence is
adequate in an administrative law context for a “reasonable mind”
to conclude, as did the MVA, that the State could rescind permissibly
Mitchell’s “MIERDA” vanity plates.
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6.

The le er “O,” the le er “I” and the le er “Q” must not be
used alone but may be used with a combination of other le ers
and numbers if the combination does not create confusion between the le er “O” or “Q” and the number “0” or between the
le er “I” and the number “1.”
Only le ers, numbers and spaces may be used on personalized prestige license plates. Le ers, numbers and spaces may
be used in any combination not prohibited by this section or
NRS 482.3667.
A blank plate will not be issued.
No more than seven characters may be on any one personalized prestige license plate.
No combination of le ers, numbers or spaces is allowed if it:
(a)
Creates confusion with any combination on other license
plates.

( 05)&3 *%&/5*'*&3 3&(*453*&4

(b)

Expresses contempt, ridicule or superiority of: (1) Race;
(2) Ethnic heritage; (3) Religion; or (4) Gender.
(c) Contains any connotation that is sexual, vulgar, derogatory, profane or obscene.
(d) Contains a direct or indirect reference to a (1) Drug or
drug paraphernalia; or (2) Gang.
(e)
Makes a defamatory reference to a person or group.
7.
The person who ﬁrst applies for a particular le er or number or combination of le ers, numbers or spaces and pays the
prescribed fee for registration and for the personalized prestige
license plates has priority to receive plates with that particular
le er or number or combination of le ers, numbers or spaces
once the application has been accepted by the Department.
Any le er or number or combination of le ers, numbers or spaces
which is available for issuance may be reserved for a period of 30 days
after the date on which the applicant makes his or her reservation
with the Department. If license plates are to be manufactured in a
new format, the Director will extend the period of a reservation long
enough to allow an applicant to receive plates in the new format.

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A mark comprised of an Internet domain name is registrable as a
trademark or service mark only if it functions as an identiﬁer of the
source of goods or services. Portions of the uniform resource locator
(”URL”), including the beginning, (”h p://www.”) and the top-level
Internet domain name (”TLD”) (e.g., ”.com,” ”.org,” ”.edu,”) function to indicate an address on the World Wide Web, and, therefore,
generally serve no source-indicating function.
The TLD typically signiﬁes the type of entity using the domain
name. For example, the TLD ”.com” signiﬁes to the public that the
user of the domain name constitutes a commercial entity, ”.edu” signiﬁes an educational institution, ”.biz” signiﬁes a business, and ”.org”
signiﬁes a non-commercial organization. TLDs designated for types
of entities using the TLDs must be treated as non-source-indicating.
As the number of available TLDs is increased by the Internet Corporation for Assigned Names and Numbers (”ICANN”), or if the nature of
new TLDs changes, the examining a orney must consider any potential source-indicating function of the TLD and introduce evidence as
to the signiﬁcance of the TLD. Cf. In re theDot Commc’ns Network LLC

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(ﬁnding ”.music conveys the commercial impression of a top-level
domain name similar to .com, .net, etc.,” and that consumers would
understand it to be a TLD in the ﬁeld of music based on the current
marketing environment which included evidence of a concerted effort to obtain TLD status for .music).
Because TLDs generally serve no source-indicating function, their
addition to an otherwise unregistrable mark typically cannot render
it registrable. [Examples held generic included MATTRESS.COM,
HOTELS.COM, LAWYERS.COM, PATENTS.COM, BLINDSANDDRAPERY.COM, OFFICE.NET, and BONDS.COM.]
Only in rare instances will the addition of a TLD indicator to a descriptive term operate to create a distinctive mark. There is no brightline, per se rule that the addition of a TLD to an otherwise descriptive
mark will never, under any circumstances, operate to create a registrable mark. If the TLD is capable of indicating a source, the addition
of the source-indicating TLD to an otherwise unregistrable mark may
render it registrable.
Example: The addition of the TLD ”.PETER” to CLOTHES
to form the mark CLOTHES.PETER would create a registrable mark.
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(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 [i.e. the Olympics name,
logo, and related indicia] or section 220506 of title
36 [i.e. the Red Cross sign].

( 05)&3 *%&/5*'*&3 3&(*453*&4

(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 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 pa ern 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
pa ern 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

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(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.
(2) [Provides an in rem action against the domain name if personal
jurisdiction over a suitable defendant is not available.]
(3) The civil action established under paragraph (1) and the in rem
action established under paragraph (2), and any remedy available under either such action, shall be in addition to any other
civil action or remedy otherwise applicable.
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4.

Mandatory Administrative Proceeding. –
a. Applicable Disputes. – You are required to submit to a
mandatory administrative proceeding in the event that a
third party (a ”complainant”) asserts that
(i) your domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and
(ii) you have no rights or legitimate interests in respect of
the domain name; and
(iii) your domain name has been registered and is being
used in bad faith.
b. Evidence of Registration and Use in Bad Faith. – For the purposes of Paragraph 4(a)(iii), the following circumstances,
in particular but without limitation, if found by the Panel
to be present, shall be evidence of the registration and use
of a domain name in bad faith:
(i) circumstances indicating that you have registered or
you have acquired the domain name primarily for the
purpose of selling, renting, or otherwise transferring
the domain name registration to the complainant who

( 05)&3 *%&/5*'*&3 3&(*453*&4

is the owner of the trademark or service mark or to
a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket
costs directly related to the domain name; or
(ii) you have registered the domain name in order to prevent the owner of the trademark or service mark from
reﬂecting the mark in a corresponding domain name,
provided that you have engaged in a pa ern of such
conduct; or
(iii) you have registered the domain name primarily for
the purpose of disrupting the business of a competitor; or
(iv) by using the domain name, you have intentionally attempted to a ract, for commercial gain, Internet users
to your web site or other on-line location, by creating
a likelihood of confusion with the complainant’s mark
as to the source, sponsorship, aﬃliation, or endorsement of your web site or location or of a product or
service on your web site or location.
c. How to Demonstrate Your Rights to and Legitimate Interests in
the Domain Name in Responding to a Complaint. – Any of the
following circumstances, in particular but without limitation, if found by the Panel to be proved based on its evaluation of all evidence presented, shall demonstrate your
rights or legitimate interests to the domain name for purposes of Paragraph 4(a)(ii):
(i) before any notice to you of the dispute, your use of, or
demonstrable preparations to use, the domain name
or a name corresponding to the domain name in connection with a bona ﬁde oﬀering of goods or services;
or
(ii) you (as an individual, business, or other organization)
have been commonly known by the domain name,
even if you have acquired no trademark or service
mark rights; or
(iii) you are making a legitimate noncommercial or fair use
of the domain name, without intent for commercial
gain to misleadingly divert consumers or to tarnish the
trademark or service mark at issue.
i. Remedies. – The remedies available to a complainant pursuant to any proceeding before an Administrative Panel
shall be limited to requiring the cancellation of your domain name or the transfer of your domain name registra-

$)"15&3  53"%&."3,
tion to the complainant.
k. Availability of Court Proceedings. – The mandatory administrative proceeding requirements set forth in Paragraph 4
shall not prevent either you or the complainant from submi ing the dispute to a court of competent jurisdiction for
independent resolution before such mandatory administrative proceeding is commenced or after such proceeding
is concluded. If an Administrative Panel decides that your
domain name registration should be canceled or transferred, we will wait ten (10) business days (as observed in
the location of our principal oﬃce) after we are informed
by the applicable Provider of the Administrative Panel’s
decision before implementing that decision. We will then
implement the decision unless we have received from you
during that ten (10) business day period oﬃcial documentation (such as a copy of a complaint, ﬁle-stamped by the
clerk of the court) that you have commenced a lawsuit
against the complainant in a jurisdiction to which the complainant has submi ed. (In general, that jurisdiction is either the location of our principal oﬃce or of your address
as shown in our Whois database.) If we receive such documentation within the ten (10) business day period, we will
not implement the Administrative Panel’s decision, and
we will take no further action, until we receive (i) evidence
satisfactory to us of a resolution between the parties; (ii)
evidence satisfactory to us that your lawsuit has been dismissed or withdrawn; or (iii) a copy of an order from such
court dismissing your lawsuit or ordering that you do not
have the right to continue to use your domain name.

6%31 3VMFT

1.

Deﬁnitions. –
Panel means an administrative panel appointed by a
Provider to decide a complaint concerning a domain-name
registration.
Provider means a dispute-resolution service provider
approved by ICANN. A list of such Providers appears at IUUQXXXJDBOOPSHFOEOESVESQBQQSPWFE
QSPWJEFSTIUN.
3. The Complaint. –
(a) Any person or entity may initiate an administrative proceeding by submi ing a complaint [in electronic form] in
accordance with the Policy and these Rules to any Provider
approved by ICANN.

( 05)&3 *%&/5*'*&3 3&(*453*&4
4.

5.

6.

7.

15.

Notiﬁcation of Complaint. –
(a) The Provider shall review the complaint for administrative compliance with the Policy and these Rules and, if
in compliance, shall forward the complaint, including any
annexes, electronically to the Respondent and shall send
Wri en Notice of the complaint to the Respondent within
three (3) calendar days following receipt of the fees to be
paid by the Complainant in accordance with Paragraph 19.
The Response. –
(a) Within twenty (20) days of the date of commencement of
the administrative proceeding the Respondent shall submit a response [in electronic form] to the Provider.
Appointment of the Panel and Timing of Decision. –
(a) Each Provider shall maintain and publish a publicly available list of panelists and their qualiﬁcations.
(b) If neither the Complainant nor the Respondent has elected
a three-member Panel, the Provider shall appoint, within
ﬁve (5) calendar days following receipt of the response by
the Provider, or the lapse of the time period for the submission thereof, a single Panelist from its list of panelists.
Impartiality and Independence. – A Panelist shall be impartial
and independent and shall have, before accepting appointment,
disclosed to the Provider any circumstances giving rise to justiﬁable doubt as to the Panelist’s impartiality or independence.
If, at any stage during the administrative proceeding, new circumstances arise that could give rise to justiﬁable doubt as to
the impartiality or independence of the Panelist, that Panelist
shall promptly disclose such circumstances to the Provider. In
such event, the Provider shall have the discretion to appoint a
substitute Panelist.
Panel Decisions
(a) A Panel shall decide a complaint on the basis of the statements and documents submi ed and in accordance with
the Policy, these Rules and any rules and principles of law
that it deems applicable.
(b) In the absence of exceptional circumstances, the Panel
shall forward its decision on the complaint to the Provider
within fourteen (14) days of its appointment.
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2. The Domain Name and Registrar

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$)"15&3  53"%&."3,

The disputed domain name <marlborosucks.com> is registered with
GoDaddy.com, LLC (the “Registrar”).
4. Factual Background
The Complainant manufactures, markets and sells cigare es in the
United States, including cigare es branded under its MARLBORO
MARKS. Additionally, the Complainant has registered the domain
name <marlboro.com> which resolves to the Complainant’s website
which provides information regarding the Complainant, its products
and special oﬀers for age-veriﬁed smokers 21 years or older.
The Complainant recently learned of the existence of the disputed
domain name as a result of having conducted a search of the Internet
for domain names that, it believes, might infringe its rights in its mark
MARLBORO MARKS.
The disputed domain name does not resolve to any website. Upon
entering the name into a browser, the time period, within which a
connection to a web server must occur, subsequently simply times
out with, as the Complainant experienced, the browser generating
and displaying an error message stating: “This site can’t be reached”
(or similar, depending upon the type of browser used, e.g., Firefox or
Safari).
The Respondent contends that First Amendment considerations,
under the US Constitution, may trump the Complainant’s trademark
rights. Speciﬁcally, the Respondent cites to decisions of various US
Federal Courts (
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[other citations omi ed]) where in each case a domain name, which
included a third-party mark, resolved to a website, commonly called
a “gripe site”. The site, noncommercial in nature and established by
a disgruntled customer, provided content critical of the products or
services provided to that customer by the owner of the corresponding
mark. Because the site merely provided critical commentary, in each
instance the corresponding court did not view the use of the name as
cybersqua ing and upheld that use as a valid exercise of free speech
under the First Amendment.
The Respondent further states that he has not used the disputed
domain name commercially and, as a result, the Complainant is unable prove bad faith and accordingly the Complaint should be dismissed. He concludes by contending: “There is zero proof of cybersqua ing or commercial use of the domain marlborosucks.com and
this complaint should be thrown out immediately. ... I would like
this case resolved immediately so that I can proceed with my plans
for the domain”.

( 05)&3 *%&/5*'*&3 3&(*453*&4

6. Discussion and Findings
A. Identical or Confusingly Similar
The Panel ﬁnds that the disputed domain name is confusingly similar
to the Complainant’s mark MARLBORO MARKS.
The term “sucks” is a well-known pejorative descriptive word
most often, in the Internet community, signifying or otherwise associated with sharp criticism. The Panel takes judicial notice of the fact
that a domain name which contains the term “sucks” appended to a
mark (e.g., in the form of (mark + sucks).gTLD), typiﬁed by the disputed domain name here, generally serves as a signal to an Internet
viewer that a website accessed through such a name contains content
highly critical, often caustic, in some fashion towards an owner of the
mark and/or the goods or services which the owner provides.
Consequently, from a simple comparison of the name to the Complainant’s mark MARLBORO MARKS, no doubt exists that the disputed domain name is confusingly similar to the mark. The name
<marlborosucks.com> consists of the term MARLBORO followed by
the well-known term “sucks”. The name also contains the generic
Top-Level Domain (gTLD) “.com”. The addition of the gTLD is generally irrelevant in assessing confusing similarity or identity under
paragraph 4(a)(i) of the Policy and thus ignored.
It has become very well-established in UDRP precedent, including
numerous decisions previously rendered by this Panel, that a minor
variation to a mark is usually insuﬃcient in and of itself, when used in
forming a domain name, particularly a Second-Level Domain (SLD),
that results from modifying the mark, to confer requisite and suﬃcient distinctiveness to the resulting domain name to avoid a ﬁnding
of confusing similarity. Here, the Respondent’s incorporation of the
term “sucks” to form the SLD clearly constitutes such a minor variation and, as such, does not avoid a ﬁnding of confusing similarity.
[Extensive string cite omi ed.]
B. Rights or Legitimate Interests
Based on the evidence of record here, the Panel ﬁnds that no basis
exists which would appear to support a claim of rights or legitimate
interests by the Respondent to the disputed domain name under paragraph 4(c) of the Policy.
The Complainant has never authorized the Respondent to utilize
any of the Complainant’s MARLBORO MARKS Marks and does not
have any relationship, aﬃliation or connection whatsoever with the
Respondent.
Further, the Respondent never did and does not now use nor has
ever made any demonstrable preparations to use the disputed do-

$)"15&3  53"%&."3,

main name to resolve to an operational website through which it does
or will make bona ﬁde oﬀerings of any goods or services. Passively
holding a domain name, which infringes the trademark rights of another, for nearly an 8 year period does not qualify, on any basis, as a
bona ﬁde oﬀering of goods and services.
Moreover, the evidence of record clearly reﬂects that the Respondent is not commonly known by the disputed domain name or any
of the Complainant’s MARLBORO Marks.
C. Registered and Used in Bad Faith
The Panel ﬁnds that the Respondent’s actions, with respect to the disputed domain name, constitute bad faith registration and use.
The Panel believes the Respondent was well aware of the Complainant and its mark MARLBORO, and the substantial reputation,
goodwill and fame which that mark acquired and the exclusive rights
which the Complainant held in its MARLBORO Marks when the Respondent registered the disputed domain name. Nevertheless, the
Respondent held the name, without ever using it to resolve to an operational website, for a period now reaching nearly 8 years. Even
now, the Respondent merely states that it has “plans” to use the name
without deﬁning, with any degree of speciﬁcity whatsoever, what
those plans are, and when and how they will be implemented. Such
a vague assertion leads the Panel to believe that the Respondent has
no concrete plans at all to ever use the name to resolve to an operational website and, during the course of holding the name for nearly
8 years, never did.
The disputed domain name, being a “sucks”-based name, could,
under a proper set of circumstances, legitimately serve as an address
of a noncommercial, operational website, e.g., a so-called gripe site,
through which the Respondent posts content critical of the Complainant and/or its cigare e products oﬀered under its mark MARLBORO. However, none of those circumstances has apparently ever
existed here and certainly do not now exist. This is plainly evident
as one absolutely crucial threshold requirement is glaringly absent:
legitimate use. Apart from any illegitimate use, the Respondent has
simply never used and does not now use the domain name at all. It
merely passively holds the name and has done so for nearly 8 years.
Each of the federal cases which the Respondent cites for the proposition that free speech rights a ach to a sucks-based domain name
is not only clearly distinguishable from the present facts but is irrelevant to those facts simply because in each such case the name at
issue was actually used by a defendant as an address of an operational noncommercial website providing critical comment, an aspect
totally missing here. Speciﬁcally, in Bosley, a disgruntled customer
registered and used a domain name incorporating plaintiﬀ’s mark

( 05)&3 *%&/5*'*&3 3&(*453*&4

for a website detailing investigation against plaintiﬀ and other information “highly critical” of plaintiﬀ).
Thus, the Panel concludes that the Complainant has provided sufﬁcient proof of its allegations, with respect to the disputed domain
name, to establish a case under paragraph 4(a) of the Policy upon
which the relief it now seeks can be granted.
7. Decision
Accordingly, under paragraphs 4(i) of the Policy and 15 of the Rules,
the Panel grants the relief sought by the Complainant.
The disputed domain name, <marlborosucks.com>, is to be transferred to the Complainant.
Peter L. Michaelson Sole Panelist Date: June 15, 2017

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5XJUUFS 3VMFT

We reserve the right to reclaim usernames on behalf of businesses or
individuals that hold legal claim or trademark on those usernames.
Accounts using business names and/or logos to mislead others may
be permanently suspended.
You may not engage in username squa ing. Accounts that are inactive for more than six months may also be removed without further
notice. Some of the factors we take into consideration when determining what conduct is considered to be username squa ing are:
• the number of accounts created;
• creating accounts for the purpose of preventing others from using those account names;
• creating accounts for the purpose of selling those accounts; and
• using feeds of third-party content to update and maintain accounts under the names of those third parties.
Using another’s trademark in a manner that may mislead or confuse
others about your brand aﬃliation may be a violation of our trademark policy.
Referencing another’s trademark is not automatically a violation
of Twi er’s trademark policy. Examples include:
• Using a trademark in a way that is outside the scope of the trademark registration (e.g. territory, or goods and services identiﬁed in the registration).
• Nominative and other fair uses of trademarks are protected
uses under our trademark policy, so long as the account is

5IF 5XJUUFS 3VMFT

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$)"15&3  53"%&."3,
clearly distinguished from the trademark owner. This includes
use by resellers in certain regions and accounts engaging in parody, commentary, or news.

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Twi er accounts portraying another person in a confusing or deceptive manner may be permanently suspended under the Twi er impersonation policy.
An account will not be removed if:
• the user shares your name but has no other commonalities, or
• the proﬁle clearly states it is not aﬃliated with or connected to
any similarly-named individuals.
Accounts with similar usernames or that are similar in appearance
(e.g. the same avatar image) are not automatically in violation of the
impersonation policy. In order to be impersonation, the account must
also portray another person in a misleading or deceptive manner.
Users are allowed to create parody, newsfeed, commentary, and fan
er, provided that the accounts follow the require-

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accounts on Twi
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IUUQTTVQQPSUUXJUUFSDPNBSUJDMFTments below.

• Bio: The bio should indicate that the user is not aﬃliated with
the account subject by stating a word such as ”parody,” ”fake,”
”fan,” or ”commentary,” and be done so in a way that would be
understood by the intended audience.
• Account name: The name should not be the exact name of the
account subject without some other distinguishing word, such
as ”not,” ”fake,” or ”fan,” and be done so in a way that would
be understood by the intended audience.

4UBHF /BNFT

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"DUPST &RVJUZ BEPQUFE
The Association shall not enroll an applicant under a name, nor shall
a member use a name which is the same as, or resembles (so closely as
to tend to be confused with), the name of an existing enrolled member, except that an applicant may enroll under and use such name
professionally upon proof of consent by the existing member, or a
ﬁnding by the National Council that under the circumstances there
is no likelihood of confusion, or that there are extenuating circumstances.
Administratively, the following procedures will be followed:
• If an applicant or member must change or alter his/her name
to distinguish it from an existing member, he/she may change

( 05)&3 *%&/5*'*&3 3&(*453*&4

the ﬁrst and/or last name completely or add a full middle name.
(Note: The use of a middle initial under these circumstances is
not acceptable.)
• If a member requests a Temporary Withdrawal/Suspended Payment inactive status, and if after (5) years he/she has not returned to active status with AEA, any claim to the sole use
and possession which he/she may have to any name or names
within the jurisdiction of Actors’ Equity Association is hereby
declared null and void.
• If a member loses or resigns membership for any reason, he/she
may lose the exclusive right to the professional name.
Please note:
• All contracts, billings, programs and insurance cards must
show your professional name as recorded with Actors’ Equity
Association.
• The use by a member of a name in violation of the above rules
shall be an oﬀense for which a member may be disciplined in
accordance with the pertinent Constitution Article.
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 5FY - 3FW
Nicknames are common in all sports, but contemporary women’s
roller derby has taken this to a new level by publicly identifying
skaters almost exclusively by means of facetious pseudonyms called
“derby names” or “skate names.” An ideal derby name typically has
three components: it sounds something like a real name (i.e., has
a plausible ﬁrst name–last name construction), it connects to derby
in some meaningful way (i.e., it suggests that the skater is ﬁerce,
fast, or tough), and it creates some sense of an overall persona. L.A.
Derby Dolls blocker Tara Armov furnishes an example of a derby “Aname.” “Tara” is a standard woman’s ﬁrst name, while “Armov” is
a plausible-sounding last name. The name also suggests that Tara is
tough enough that she’ll tear your arm oﬀ. And the vaguely Slavic
overtones of her moniker suggest an Eastern Bloc motif that Tara
plays up by using faux Cyrillic le ering on her helmet.
The practice of using pseudonyms has created a patchwork of
derby names that are simultaneously ﬁerce and funny. Derby names
may refer to great actresses (Grace Killy, Sophia LoRenegade), notso-great actresses (Gori Spelling), or miscreant heiresses (Paris Killton).48 Pseudonyms invoke ancient art (Venus de Maul’r) and pop
48

The celebrities who are name-checked by derby girls have not, to my knowledge, complained about the unauthorized plays on their names. Tori Spelling has

$)"15&3  53"%&."3,

culture (Killo Ki y) alike. Skaters name-check favorite bands (Joy
Collision) or musicians both popular (Beonslay) and niche (Stiv Skator49). Multiple monikers may reference the same public ﬁgure
(Kristi Yamagotcha, Kristi Imahootchie). Some names don’t refer to
people or things but are just amusing puns (Anne R. Kissed, Anna
Notherthing). A skate name may refer back to derby itself (Helen
Wheels, Axles of Evil). Names can emphasize a skater’s ﬁerceness
(Eva Destruction, Anita Kill) or downplay it (Sparkle Plenty). Some
derby sobri- quets could function easily as porn names (Tae Kwon
Ho), a few are outright gynecological (Vulvarine), and still others are
just gross (Emma Rhoids). Political events both happy (Paris Troika)
and tragic (Blanche Davidian) may be invoked. A few require a bit
of historical knowledge (Reyna Terror) or literary awareness (Penny
Dreadful, Madame Ovary) to decode. Derby names may pay homage
to the spirit of a place you love (Louise Ze Animal, Fleur de Lethal,
Dumaine A raction50). Almost all skate names are in English, but
some allude to phrases more familiar to foreign ears (Be e Noir, Fox
Sake). Names chosen at the early dawn of derby’s resurgence tended
to be more abstract and conceptual (Suzy Snakeeyes, Tawdry Tempest), while a few are simply inscrutable (Lux, V. Lee). My personal
favorite is Raven Seaward of the L.A. Derby Dolls, whose name was
inspired by the television show Arrested Development.
Derby pseudonyms are at least as important to the skaters who
adopt them as they are to the viewing public. First, nicknames serve
a simple, trademark-like function of facilitating derby girls’ notoriety
to the viewing public by diﬀerentiating skaters from one another. Obviously, standard government names can serve this function as well,
but derby names are often particularly good source identiﬁers because they are tied to aesthetic features that ﬁll out distinct personas.
And unlike real names (and standard trademarks), derby names also
serve an identity-concealing function in that they can separate a competitor’s derby persona from her real-life identity, obscuring the latter from derby fans and the world more generally. This is important
for skaters who have professional careers (law, medicine) in which
participating in derby as an extracurricular activity may be looked
down on.61 Relatedly, made-up names can also decrease the chances
that overzealous fans (or, more concerningly, stalkers) will be able to
identify and track down skaters.
Second, skate names facilitate skaters’ abilities to develop identities within the roller derby world. Many participants are drawn to
derby because it provides a welcome contrast to the everyday grind
actually reached out to Gori Spelling and seems enthusiastic about having a derby
doppelganger.
61
One skater who works as a lawyer explained that when she appears in court,
she doesn’t want the judge imagining her in skates and ﬁshnets.

( 05)&3 *%&/5*'*&3 3&(*453*&4

and provides a space that permits them to explore aspects of their
personalities that cannot ﬁnd expression in their daily lives.
Finally, derby names are inextricably bound up with the sense of
community that the sport provides for its participants. Once a skater
secures a name, it’s how other people in the derby world will refer
to her in all se ings – not only during bouts, but at practices, social
events, and online – so much so that even teammates may not know
one another’s real names. You know you’ve left workaday life behind
and entered the insular derby community (whether at a practice, a
team dinner, or a night out at a bar) when people stop calling you
“Jane Smith” and instead refer to you as “Sasha Haughtbich.”
Even though derby names are theoretically unlimited, skaters frequently choose names that turn out to be identical (or very similar to)
ones that other derby girls have thought of ﬁrst. Countless skaters
have likely thought of the outstanding name “Princess Slay-Ya,” for
example, but it was ﬁrst used by (and thus exclusively belongs to, for
reasons we shall shortly see) one of the Kansas City Roller Warriors.
One might suppose that because derby comprises a basically decent
community where people share common interests and make close
friends, there would be no objections if other skaters decided to use
names identical or very similar to preexisting ones.
Nope. However much derby may embody communal sharing
norms in many respects, name usage represents a glaring exception.
Derby girls react with anxiety and rancor to the discovery that others
have sought to skate under names similar to theirs. Name repetition,
and even similarity, triggers rage in skaters who feel they have superior rights in their derby aliases: “When you bite on someone’s style
you look like a douche and so uncool. Just imagine ﬁnding out at
2:30am in a bar when you are not completely sober that the person
you are talking to has an almost identical name as yours. SUPER ANNOYING.”
Derby girls care about maintaining the uniqueness of their aliases
for three primary reasons. First, names in derby function as trademarks do in the commercial world: they ensure that skaters will not
be confused with one another and that the viewing public can tell
skaters apart. This is particularly true in the context of actual bouts,
when announcers rely on derby names to relay action to spectators
over a public-address system. As competition becomes increasingly
interleague, the chances that two identically named skaters in leagues
thousands of miles apart could skate against one another no longer
seem so slim.
Second, and probably more importantly, though, skaters care
about the uniqueness of their names despite their lack of discernible
market value because skate names are a repository for the identities
that skaters work so hard to create in a subculture that is profoundly

$)"15&3  53"%&."3,

important to them. Using a skater’s preexisting name – or even using a name very similar to a skater’s preexisting name – eﬀects a dignitary harm on several levels. First, it may detract from the hardearned social capital that a skater has built up within the derby world,
even where the senior skater’s fame is suﬃciently strong that no one
is likely to confuse the junior skater with her. Second, overlapping
name use violates one of the central tenets of the derby world, the
“don’t be a douchebag rule,” so that not honoring the uniqueness of
a preexisting skate name communicates disrespect in the same way
as an intentional, if costless, trespass to land. Finally, names are typically a product of careful thought and eﬀort, so that they express
not just the holder’s identity, but also her cleverness. Having multiple skaters use the same sobriquet dilutes that sense of ingenuity by
making it seem commonplace.
Third, the gravity with which name infringement is treated in
the derby world may seem puzzling because derby nicknames are
theoretically inﬁnite, so that overlap need only spur skaters to pick
a new one from an inexhaustible commons. Many skaters contest
whether derby names actually do comprise an inexhaustible commons. Newer rollergirls in particular often complain that with existing names numbering in the ﬁve ﬁgures, it’s often necessary to think
of many possible nicknames before ﬁnding one that is unclaimed, so
that newer skaters often have to se le for a sixth-choice skate name.
Not all names are created equal. Even if there is an inﬁnitude of possible names, only some of those names will suit a skater’s personality
and style, so that a world in which skate names must be unique may
well cause a newer skater to experience a much lower chance of being
able to claim a name that truly suits her.
The roller derby world has eschewed trademark and other IP law
almost completely as a means of protecting skate names, turning instead to its own skater-created and -operated system of name regulation and registration.
As demand for names increased, and casual enforcement increasingly failed, derby name regulation godmother and former Women’s
Flat Track Derby Association president Hydra stepped in to create
the ur-version of what has since become known as the Master Roster.
The Master Roster began as a humble Excel spreadsheet that noted
the same basic data about names that it still does today: a skater’s
derby name, the date that the name was entered on the Master Roster,
and the skater’s team aﬃliation. In early 2006, there were 2,585 registered names on the Master Roster, and the increasing pace of submission required the Roster’s administrators to release an updated version of the spreadsheet every week. Soon after, the administrators released an online version of the Master Roster with a search algorithm
that enabled skaters to evaluate whether their proposed name was

( 05)&3 *%&/5*'*&3 3&(*453*&4

similar to a preexisting one and even how close the proximity was.
This new functionality and increased accessibility enhanced the eﬃciency of name registration signiﬁcantly, and by late 2007, the number of registered names had already exceeded 10,000. This version of
the Master Roster remains publicly available online.
Three core principles govern derby name regulation. First is a
uniqueness requirement: only one skater can skate under a given
name. The second instantiates the idea of priority: where two names
are identical or excessively similar, the skater with the earlier claim
to the name has the right to use it. The third creates elemental standards for resolving overlapping name conﬂicts: where two names
are reasonably similar, the second skater must ask the ﬁrst skater for
permission to use the name. This permission must be in writing and
submi ed to the Master Roster’s administrators in order to authenticate it. Names that are very similar to preexisting names but that
have been approved via wri en permission by the senior skater are
listed on the Master Roster with the note “(cleared).”
The Master Roster’s name search feature allows users to determine the degrees of similarity between a proposed name and existing
names, and this result strongly determines the likelihood that a name
will be accepted or rejected. The derby name checker returns one of
ﬁve results, alerting users that a proposed moniker’s degree of similarity to preexisting ones is either “very high,” “high,” “medium,”
“low,” or “very low.” Names of very high similarity are “almost guaranteed to be rejected,” while names of very low similarity are likely
to be accepted. For example, inpu ing the name “Nurse Wretched”
into the name checker returns the result that the name is identical
to a preexisting name (“Nurse Wretched”), of high similarity to another preexisting name (“Nurse Ratchet”), and of low similarity to
yet another one (“Wretched”). This name would almost certainly be
rejected by the Master Roster’s administrators. These results are advisory rather than dispositive, though: the administrators retain discretion over the acceptance and rejection of all proposed derby names,
which is particularly salient in cases where a name has a nontrivial
degree of similarity to a preexisting one.
The Master Roster’s substantive rules are supported by a number
of formal registration procedures. For instance, skaters are advised
not to submit a name until they have been participating in derby for
at least a couple of months in order to avoid wastefully registering
a name to beginning skaters who end up dropping out or failing to
make a team. The submission of names to the Master Roster is initially organized by a designated skater within each league, a “name
wrangler,” who aggregates the names of qualifying new skaters, vets
them for validity, and submits them in batches to the Master Roster administrators. Priority in cases of identical submissions is deter-

$)"15&3  53"%&."3,

mined by the date stamp on the e-mail received by the Master Roster’s administrators. In other words, registration is a ma er of ﬁling
priority, not actual use, so that if two skaters simultaneously seek
to register the same name, the Master Roster’s administrators will
register the ﬁrst submission they receive, regardless of which skater
adopted the name ﬁrst.
The process of adding names to the registry raises a correlative
problem: what to do with names of skaters who have quit or retired? This problem looms more and more as the number of derby
girls grows ever larger and names grow ever scarcer. Skaters (and
name wranglers) are encouraged to notify the Master Roster’s administrators when they are no longer using their names, and leagues often submit lists of names to the Master Roster that are to be deleted.
Name removal does not happen as often as it should, and certainly
not as often as name addition happens, for several reasons. First, incentives to retire one’s own name are weak. There are no ways to
sanction skaters who have left derby without doing the courtesy of
notifying the Master Roster that their names are now available. Second, skaters often change their minds about retirement, so any derby
girl who has even a sliver of interest in returning to the sport will
be disinclined to give up her name. And third, even when disused
names are purged from the Master Roster, skaters may not want a
“used” name because using it may seem derivative rather than original and because it may have unwanted associations with its prior
user. As a result of all this, turnover in names tends to be slow, and
the Master Roster contains many names of skaters who have become
inactive, despite best eﬀorts by name wranglers and list administrators.
Assuming that there is agreement that two names are in conﬂict
(i.e., where they are either identical or substantially similar), an additional issue remains: How are a skater’s superior name rights enforced? The Master Roster administrators can decline to register a
name, but as an informal organization, they lack any coercive force,
so a skater who consciously uses an overlapping name cannot be
ﬁned or thrown in jail. And yet despite the total absence of formal coercive sanctions, the incidence of repetitive name use is small, thanks
to informal enforcement norms. This raises two related puzzles: How
do skaters enforce rules governing derby name uniqueness, and why
is the level of compliance so high?
The answer to the how question is straightforward. The primary
means of enforcement is simply personal contact and interaction that
relies on skaters’ strong incentives to maintain the uniqueness of their
own names. These exchanges usually take the form of an e-mail exchange between the skater who wants to use a name and the one who
has registered a similar one. Skaters exhibit a high degree of defer-

( 05)&3 *%&/5*'*&3 3&(*453*&4

ence to the ﬁrst-to-register rule. The dog that didn’t bark in this context is the number of times that skaters use the Master Roster to determine that their proposed name is too similar to a preexisting one
and defer to the system by simply seeking another name. While it’s
impossible to measure absence of evidence, the number of times the
Master Roster (while far from perfectly eﬀective) successfully fends
oﬀ name conﬂicts is almost certainly far greater than the number of
name conﬂicts it fails to deter.
the informal sanctions that skat- ers inﬂict on one another for
violating name-uniqueness norms eﬀectuate compliance to a large
extent. Skaters unanimously agree that choosing a name that has
clearly been adopted by another skater—even a skater in another
league—without permission would be egregiously socially unacceptable within the derby community and lead to ostracism. And since
being part of a community is central to the derby experience, the
kind of shaming that ﬂouting name-priority norms would engender
would undermine entirely the advantages of being part of derby in
the ﬁrst place.
If these sanctions do not work, there is always the oldest form
of self-help: violence. Skaters have (perhaps facetiously) invoked
threats of physical harm against those who fail to respect the derby
world’s rules and norms of name usage. As one rollergirl put it, “sure
there’s no laws in place – you don’t even have to register your derby
name – it’s COURTESY. Ref might not see you smash me in the face—
but I know, and trust me baby, I’m comin for ya.” Added another, “I
totally agree with the not stealing/copying of names . . . . Someone
once said imitation was the best form of ﬂa ery. . . . So ﬂa er me
and then let me kick your a$$.” These threats are just talk, after all,
and should be taken with a grain of salt. There is no evidence (that
I’ve seen, anyway) of a derby girl beating up someone who used her
name without permission. But in a sport where skaters are skilled
at using full-body blocks at high speeds in the course of competition,
the idea of using violence to lay down the law against those who ﬂout
shared norms about name usage certainly does not seem completely
implausible.
Instances of formal regulation represent a empts to protect derby
girls’ names and identities from infringement by actors external to the
derby world. Ivanna S. Pankin registered her name as a trademark
largely because she wanted to make sure that competitors outside
the derby world could not free ride on her business goodwill. Babe
Ruthless’s concern about unauthorized use of her moniker was directed at a ﬁlm production company, not at another roller derby girl.
In these and other instances, the Master Roster did suﬃcient work to
assure the skaters that no one else would compete under their derby
names. It remains necessary to invoke formal law only outside con-

$)"15&3  53"%&."3,

texts that, and against individuals who, are not governed by roller
derby’s name-exclusivity norms.

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False advertising law is not, strictly speaking, intellectual property
law, but it is a close relative. At the very lest, we need to say a bit about
adveritisng law to complete our survey of trademark law. Competitor suits for false advertising have a lot in common with competitor
suits for trademark infringement and unfair competition, and trademark law incorporates several devices to discourage misleading uses
of trademarks. But a slightly deeper dive – exploring advertising law
as a body of law devoted to controlling information – casts new light
on other areas of intellectual property as well.
Three issues are pervasive in advertising law: falsity, materiality and commerciality. Falsity is important because true statements
about one’s products (or others) generally enjoy robust First Amendment protections. Not every false statement is actionable; only those
that is material to consumers’ purchasing decisions. And advertising
law only generally applies to statements ”in commercial advertising
or promotion,” to quote the Lanham Act. Falsity, materiality, and
commerciality all raise conceptual questions about the control information that go well beyond advertising law. So we start with the tort
law of competitor suits for false advertising, then discuss its close tort
and tort-like substitutes, and then look more broadly at other sources
of advertising law.
The central concern of false advertising law is to prevent the dissemination of false commercial information. Note that this task necessarily requires courts to distinguish true statements from false ones.
At least ﬁve diﬀerent conceptions of truth bu heads in the caselaw:
• Scientiﬁc truth exists in the world and can be determined
through objective investigation.
• Linguistic truth is conventional; the true meaning of a term is
the meaning a reasonable listener (e.g., a reasonable consumer)
would regard it as having.
• Legal truth is a ma er of authority; courts must defer to what

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legislatures and agencies assert.
• Trademark truth is determined by priority of appropriation; the
owner of a mark is entitled to say deﬁnitively what it means.
• In a pluralistic society commi ed to free speech, there is no absolute truth; everyone is entitled to express their own opinions.
As you read the cases, always ask which conception or conceptions
the courts are appealing to.

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As with trademark and unfair competition, state and federal law provide overlapping – and often redundant – protections against false
advertising. We will focus on our old federal friend, section 43(a),
except that now our a ention turns to a diﬀerent subparagraph.
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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— …
(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.

In a sense, false advertising law shares the tort structure of trademark
law, but without the requirement that the plaintiﬀ own a trademark.
The false advertising tort lacks anything corresponding to procedural
rules, and subject ma er and ”similarity” are so interwoven that it
makes sense to treat them together.

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One gains tort protection against competitors’ false advertising competitors simply by having competitors – by engaging in a commercial
activity that has customers capable of being diverted by lies. This requirement of competitor standing functions as a kind of ownership

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rule. Modern standing law under § 43(a) is considerably more liberal
than its common-law precursors.
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[The plaintiﬀ sold aluminum washboards marked ”aluminum.” It alleged that it had ”contracted for and purchased … the entire output
of sheet aluminum suitable for forming the rubbing sheets of washboards.” The defendant sold zinc washboards, falsely marked ”aluminum.”]
We do not ﬁnd it anywhere averred that the defendant, by means
of its imitation of complainant’s trade-mark, is palming oﬀ its goods
on the public as and for the goods of complainant. The bill is not predicated upon that theory. It undertakes to make a case, not because the
defendant is selling its goods as and for the goods of complainant, but
because the defendant is deceiving the public by selling to it a board
not made of aluminum, although false branded as such.
It is doubtless morally wrong and improper to impose upon the
public by the sale of spurious goods, but this does not give rise to a
private right of action unless the property rights of the plaintiﬀ are
thereby invaded. There are many wrongs which can only be righted
through public prosecution, and for which the legislature, and not
the courts, must provide a remedy.
Take the metal which is the subject-ma er of the controversy in
this case. Many articles are now being put upon the market under the
name of aluminum, because of the a ractive qualities of that metal,
which are not made of pure aluminum, yet they answer the purpose
for which they are made and are useful. Can it be that the courts have
the power to suppress such trade at the instance of others starting in
the same business who use only pure aluminum?
Nor do we ﬁnd anything in the allegations of the bill as to complainant’s monopoly in the use of the metal aluminum for washboard
purposes which would extend its rights. We are not referred to any
case, nor can we think of any reason why one who has obtained a
monopoly in the material of which his goods are made should have
any broader rights in protecting his trade-name than another who is
engaged in competition in the same line of business.
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[The plaintiﬀ held a patent [No. 827,351] for a safe with an ”explosion chamber” – a design ”to prevent burglarious entrances to safes,
vaults, and the like through the doors by the use of explosives.” Its
safes had a metal band around the door to cover the explosion cham-

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ber. The defendant sold safes with a metal band around the door, but
no explosion chamber beneath.]
There is no part of the law which is more plastic than unfair competition, and what was not reckoned an actionable wrong 25 years
ago may have become such today. While a competitor may, generally
speaking, take away all the customers of another that he can, there
are means which he must not use. One of these is deceit. We conceive that in the end the questions which arise are always two: Has
the plaintiﬀ in fact lost customers? And has he lost them by means
which the law forbids? The false use of the plaintiﬀ’s name is only an
instance in which each element is clearly shown.
The reason, as we think, why such deceits have not been regarded
as actionable by a competitor, depends only upon his inability to
show any injury for which there is a known remedy. In an open
market it is generally impossible to prove that a customer, whom the
defendant has secured by falsely describing his goods, would have
bought of the plaintiﬀ, if the defendant had been truthful. Without
that, the plaintiﬀ, though aggrieved in company with other honest
traders, cannot show any ascertainable loss. The law does not allow
him to sue as a vicarious avenger of the defendant’s customers.
But, if it be true that the plaintiﬀ has a monopoly of the kind of
wares concerned, and if to secure a customer the defendant must represent his own as of that kind, it is a fair inference that the customer
wants those and those only. Had he not supposed that the defendant
could supply him, presumably he would have gone to the plaintiﬀ,
who alone could. If a tradesman falsely foists on a customer a substitute for what the plaintiﬀ alone can supply, it can scarcely be that the
plaintiﬀ is without remedy, if he can show that the customer would
certainly have come to him, had the truth been told.
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It is consistent with every allegation in the bill and the defendant in
argument asserted it to be a fact, that there are other safes with explosion chambers beside that for which the plaintiﬀ has a patent. There
is nothing to show that customers had they known the facts would
have gone to the plaintiﬀ rather than to other competitors in the market, or to lay a foundation for the claim for a loss of sales. The bill
is so framed as to seem to invite the decision that was obtained from
the Circuit Court of Appeals, but when scrutinized is seen to have so
limited its statements as to exclude the right to complain.
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This case requires us to decide whether respondent, Static Control
Components, Inc., may sue petitioner, Lexmark International, Inc.,
for false advertising under the Lanham Act.
I. B
Lexmark manufactures and sells laser printers. It also sells toner
cartridges for those printers (toner being the powdery ink that laser
printers use to create images on paper). Lexmark designs its printers
to work only with its own style of cartridges, and it therefore dominates the market for cartridges compatible with its printers. That market, however, is not devoid of competitors. Other businesses, called
“remanufacturers,” acquire used Lexmark toner cartridges, refurbish
them, and sell them in competition with new and refurbished cartridges sold by Lexmark.
Lexmark would prefer that its customers return their empty cartridges to it for refurbishment and resale, rather than sell those cartridges to a remanufacturer. So Lexmark introduced what it called a
“Prebate” program, which enabled customers to purchase new toner
cartridges at a 20-percent discount if they would agree to return the
cartridge to Lexmark once it was empty. To enforce the Prebate terms,
Lexmark included a microchip in each Prebate cartridge that would
disable the cartridge after it ran out of toner; for the cartridge to be
used again, the microchip would have to be replaced by Lexmark.
Static Control is not itself a manufacturer or remanufacturer of
toner cartridges. It is, rather, the market leader in making and selling the components necessary to remanufacture Lexmark cartridges.
In addition to supplying remanufacturers with toner and various
replacement parts, Static Control developed a microchip that could
mimic the microchip in Lexmark’s Prebate cartridges. By purchasing
Static Control’s microchips and using them to replace the Lexmark
microchip, remanufacturers were able to refurbish and resell used
Prebate cartridges.
As relevant to its Lanham Act claim, Static Control alleged two
types of false or misleading conduct by Lexmark. First, it alleged
that through its Prebate program Lexmark “purposefully misleads
end-users” to believe that they are legally bound by the Prebate terms
and are thus required to return the Prebate-labeled cartridge to Lexmark after a single use. Second, it alleged that upon introducing the
Prebate program, Lexmark “sent le ers to most of the companies in
the toner cartridge remanufacturing business” falsely advising those
companies that it was illegal to sell refurbished Prebate cartridges
and, in particular, that it was illegal to use Static Control’s products
to refurbish those cartridges.
III. S

C

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Thus, this case presents a straightforward question of statutory interpretation: Does the cause of action in § 1125(a) extend to plaintiﬀs
like Static Control? The statute authorizes suit by “any person who
believes that he or she is likely to be damaged” by a defendant’s false
advertising.
A. Zone of Interests
First, we presume that a statutory cause of action extends only to
plaintiﬀs whose interests fall within the zone of interests protected
by the law invoked.
We thus hold that to come within the zone of interests in a suit
for false advertising under § 1125(a), 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 protection of the Lanham Act – a conclusion reached by every
Circuit to consider the question. Even a business misled by a supplier
into purchasing an inferior product is, like consumers generally, not
under the Act’s aegis.
B. Proximate Cause
Second, we generally presume that a statutory cause of action is limited to plaintiﬀs whose injuries are proximately caused by violations
of the statute.
Put diﬀerently, the proximate-cause requirement generally bars
suits for alleged harm that is “too remote” from the defendant’s unlawful conduct. That is ordinarily the case if the harm is purely
derivative of misfortunes visited upon a third person by the defendant’s acts. In a sense, of course, all commercial injuries from false
advertising are derivative of those suﬀered by consumers who are deceived by the advertising; but since the Lanham Act authorizes suit
only for commercial injuries, the intervening step of consumer deception is not fatal to the showing of proximate causation required by the
statute.
We thus hold that a plaintiﬀ suing under § 1125(a) ordinarily must
show economic or reputational injury ﬂowing directly from the deception wrought by the defendant’s advertising; and that that occurs
when deception of consumers causes them to withhold trade from
the plaintiﬀ. That showing is generally not made when the deception produces injuries to a fellow commercial actor that in turn aﬀect
the plaintiﬀ. For example, while a competitor who is forced out of
business by a defendant’s false advertising generally will be able to
sue for its losses, the same is not true of the competitor’s landlord, its
electric company, and other commercial parties who suﬀer merely as
a result of the competitor’s inability to meet its ﬁnancial obligations.

" '"-4& "%7&35*4*/(

IV. A
Applying those principles to Static Control’s false-advertising claim,
we conclude that Static Control comes within the class of plaintiﬀs
whom Congress authorized to sue under § 1125(a).
To begin, Static Control’s alleged injuries – lost sales and damage
to its business reputation – are injuries to precisely the sorts of commercial interests the Act protects. Static Control is suing not as a deceived consumer, but as a “perso[n] engaged in” “commerce within
the control of Congress” whose position in the marketplace has been
damaged by Lexmark’s false advertising. § 1127. There is no doubt
that it is within the zone of interests protected by the statute.
Static Control also suﬃciently alleged that its injuries were proximately caused by Lexmark’s misrepresentations. This case, it is true,
does not present the classic Lanham Act false-advertising claim in
which one competitor directly injures another by making false statements about his own goods or the competitor’s goods and thus inducing customers to switch. But although diversion of sales to a direct
competitor may be the paradigmatic direct injury from false advertising, it is not the only type of injury cognizable under § 1125(a). For at
least two reasons, Static Control’s allegations satisfy the requirement
of proximate causation.
First, Static Control alleged that Lexmark disparaged its business
and products by asserting that Static Control’s business was illegal.
When a defendant harms a plaintiﬀ’s reputation by casting aspersions on its business, the plaintiﬀ’s injury ﬂows directly from the audience’s belief in the disparaging statements. Courts have therefore
aﬀorded relief under § 1125(a) not only where a defendant denigrates
a plaintiﬀ’s product by name but also where the defendant damages
the product’s reputation by, for example, equating it with an inferior
product.
In addition, Static Control adequately alleged proximate causation by alleging that it designed, manufactured, and sold microchips
that both (1) were necessary for, and (2) had no other use than, refurbishing Lexmark toner cartridges. It follows from that allegation that
any false advertising that reduced the remanufacturers’ business necessarily injured Static Control as well. Taking Static Control’s assertions at face value, there is likely to be something very close to a 1:1
relationship between the number of refurbished Prebate cartridges
sold (or not sold) by the remanufacturers and the number of Prebate
microchips sold (or not sold) by Static Control. Where the injury alleged is so integral an aspect of the violation alleged, there can be no
question that proximate cause is satisﬁed.
Although we conclude that Static Control has alleged an adequate
basis to proceed under § 1125(a), it cannot obtain relief without evi-

$)"15&3  "%7&35*4*/(

dence of injury proximately caused by Lexmark’s alleged misrepresentations. We hold only that Static Control is entitled to a chance to
prove its case.

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Notice the threshold condition in § 43(a)(1)(B): the challenged false
statement must be ”in commercial advertising or promotion.” This
threshold condition is heavily inﬂuenced by First Amendment concerns. In addition, the statement must concern ”the nature, characteristics, qualities, or geographic origin of his or her or another person’s
goods, services, or commercial activities,” a phrase that is expansive
but not inﬁnitely so.
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Plaintiﬀs are taxicab permit-holders in Houston and San Antonio,
who claim that Uber is unfairly competing with the taxicab industry
by misrepresenting the safety of its services to consumers.
First, Plaintiﬀ cites Uber’s Senior Communications Associate, Lauren Altmin’s statement on an NBC Detroit aﬃliate’s website, in a post
titled, “Local 4 Defenders: Is Uber X safe?”. The article on the website
republished Uber’s statement as follows:
What I can tell you is that Uber takes passenger safety very
seriously. We work every day to connect riders with the
safest rides on the road and go above and beyond local
requirements in every city we operate. Uber only partners with drivers who pass an industry-leading screening
that includes a criminal background check at the county,
federal and multistate level going back as far as the law allows. We also conduct ongoing reviews of drivers’ motor
vehicle records during their time as an Uber partner.
For more information on what makes Uber the safest
rides on the road, please see our website ...
Plaintiﬀs also point to a statement by Uber’s Head of Communications for North America, Lane Kasselman, in an April 24, 2014 article
on Mashable.com entitled “Faulty Background Checks May Put Uber
X Passengers at Risk, Report Says.” The statement quoted in the article reads:
Uber’s industry-leading background checks help connect
consumers with the safest ride on the road.... Our driver
partner background checks are more thorough than those
of taxi [sic] in most cities and include county, state and
federal screens going back seven years. We continue to

" '"-4& "%7&35*4*/(

improve and are always working hard to tighten our policies and processes to ensure that Uber remains the safest
transportation option available.
In addition, Plaintiﬀs take issue with a quote by Kasselman in an
April 24, 2014, NBCBayArea.com news article, titled “Is Uber Keeping Riders Safe?”. In the article, Kasselman states, “We’re conﬁdent
that every ride on the Uber platform is safer than a taxi.” Plaintiﬀs
also allege that a similar email response from Kasselman included
in a news story on NBCLosAngeles.com, was false or misleading:
“We’re conﬁdent that every ride on Uber is safer than a taxi.”
Plaintiﬀs allege that Uber’s statements quoted in online news articles were misleading to potential consumers. Defendant argues
that false-advertising claims under the Lanham Act must be based
on “commercial advertising or promotion,” and contends that statements contained in news articles do not qualify as commercial advertising.
Uber argues that each of its statements quoted in news articles
are “inextricably intertwined with the reporters’ coverage” in each
article, citing Boulé v. Hu on (aﬃrming dismissal of a Lanham Act
claim based on the defendant’s statements as quoted in a news article). Defendant further argues that the alleged statements are not
commercial speech, because commercial speech is speech which does
no more than propose a commercial transaction.
This area of law is currently evolving. The Second Circuit recently
explored the commercial and non-commercial speech dichotomy in
Ony, Inc. v. Cornerstone Therapeutics, Inc.. The Ony, Inc court found
that publication and dissemination of a scientiﬁc study that had the
eﬀect of touting a company’s product is noncommercial speech and
was thereby immune from the false advertising provisions of the Lanham Act. The Fifth Circuit recently highlighted the diﬃculties in separating commercial from non-commercial speech, holding that the
dissemination of an article as part of a company’s marketing campaign is in fact commercial speech. Eastman Chemical Co. v. PlastiPure,
Inc.
Each of Uber’s statements was issued by its corporate spokesperson or on Uber’s own oﬃcial website as part of a concerted campaign
by the company in response to incidents that had been publicized in
the media. Three of the statements quoted in the media were made
by Uber’s Head of Communications for North America. Two more
were by other corporate representatives: Uber’s Senior Communications Associate and Uber’s Public Policy representative. One statement was published on Uber’s own website, and then quoted in the
media.
Because Uber’s statements as a whole are issued with the in-

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tent to inﬂuence consumer opinion, they thereby become commercial speech even though they were contained in news media. In the
modern age of hybrid advertising and advertising in social media,
Courts must remain vigilant in order to separate commercial from
non-commercial speech, regardless of the form in which it was disseminated. The comments issued by Uber’s communication executives demonstrate a careful, uniform, and orchestrated message designed to encourage and facilitate the commercial use of its product
and service. Thus, the Court ﬁnds that the disputed statements contained in media articles are commercial speech, and are potentially
actionable under the Lanham Act.
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[Randy Haugen, an Amway distributor, distributed a voice message
to other distributors saying

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I wanna run something by you real quick that I think you
will ﬁnd pre y interesting. Just talking to a guy the other
night about this very subject and it just so happens that
a guy brings information in and lays it on my desk this
morning, so here it goes.
It says the president of Procter & Gamble appeared on
the Phil Donahue Show on March 1, ’95. He announced
that due to the openness of our society, he was coming out
of the closet about his association with the church of satan.
He stated that a large portion of the proﬁts from [P&G]
products go to support his satanic church. When asked
by Donahue if stating this on television would hurt his
business, his reply was, ”There are not enough Christians
in the United States to make a diﬀerence.” And below it
has a list of the [P&G] products which I’ll read: [the subject
message then lists 43 P&G products].
It says if you are not sure about a product, look for the
symbol of the ram’s horn that will appear on each product beginning in April. The ram’s horn will form the 666
which is known as satan’s number. I’ll tell you it really
makes you count your blessings to have available to all of
us a business that allows us to buy all the products that we
want from our own shelf and I guess my real question is, if
people aren’t being loyal to themselves and buying from
their own business, then whose business are they supporting and who are they buying from. Love you. Talk to you
later. Bye.
Needless to say, the claims about P&G were entirely false.]

" '"-4& "%7&35*4*/(

The district court granted defendants-appellees’ motion for summary judgment on P&G’s Lanham Act claim because it found the subject message, although ”identif[ying] . . . [P&G] products,” did not
”contain false representations about the qualities or characteristics of
those products,” and so did ”not relate to a product within the meaning of the Lanham Act.” We agree with the district court that the subject message did not implicate the nature, characteristics, or qualities
of P&G’s products because it impugned no feature of the products
themselves, such as price, regulatory approval, scope of copyright,
or substitutability for another product.
However, in addition to challenging on appeal the district court’s
conclusion that there was no genuine issue as to misrepresentation
of the qualities or characteristics of its goods or services, P&G argues
that the district court erred in granting summary judgment because
the subject message’s representations regarding the infernal aﬃliation of P&G and the use of its proﬁts misrepresented ”the nature,
characteristics, [or] qualities . . . of . . . [its] commercial activities.”
The subject message linking P&G to Beelzebub clearly concerned
the ”nature, characteristics, [or] qualities . . . of . . . [P&G’s] commercial activities,” under the plain meaning of that phrase. In particular,
the subject message asserted that ”a large portion of the proﬁts from
[P&G] products go to support [the church of Satan].” Given the common association of Satan and immorality, a direct aﬃliation with the
church of Satan could certainly undermine a corporation’s reputation
and goodwill by suggesting the corporation conducts its commercial
activities in an unethical or immoral manner. There can be li le doubt
that products are often marketed and purchased not only on the basis of their inherent utility, but also for the images they project and
the values they promote. In that regard, the subject message itself
implies that recipients should question the values promoted by the
businesses from whom they purchase goods. In light of the foregoing reality of the marketplace, corporations cultivate their images and
values through a wide array of activities, including celebrity endorsements, sponsorships, and charitable giving. Allegations that P&G
tithes the church of Satan concern just such commercial activities.

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With no speciﬁc information as such to protect, false advertising law
lacks a similarity test. Instead, because it protects the truth, it asks
whether the challenged statements are false, and if so, whether the
lies are ones that are material to consumers.
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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 “Be er
Ingredients. Be er Pizza.”
The appellant, Papa John’s International Inc. (“Papa John’s”), argues that the slogan “cannot and does not violate the Lanham Act”
because it is “not a misrepresentation of fact.” The appellee, Pizza
Hut, Inc., argues that the slogan, when viewed in the context of Papa
John’s overall advertising campaign, conveys a false statement of fact
actionable under section 43(a) of the Lanham Act. The district court,
after evaluating the jury’s responses to a series of special interrogatories and denying Papa John’s motion for judgment as a ma er of law,
entered judgment for Pizza Hut stating:
When the “Be er Ingredients. Be er Pizza.” slogan is
considered in light of the entirety of Papa John’s post-May
1997 advertising which violated provisions of the Lanham
Act and in the context in which it was juxtaposed with the
false and misleading statements contained in Papa John’s
print and broadcast media advertising, the slogan itself
became tainted to the extent that its continued use should
be enjoined.
We conclude that (1) the slogan, standing alone, is not an objectiﬁable
statement of fact upon which consumers would be justiﬁed in relying,
and thus not actionable under section 43(a); and (2) while the slogan,
when utilized in connection with some of the post-May 1997 comparative advertising—speciﬁcally, the sauce and dough campaigns—
conveyed objectiﬁable and misleading facts, Pizza Hut has failed to
adduce any evidence demonstrating that the facts conveyed by the
slogan were material to the purchasing decisions of the consumers to
which the slogan was directed. Thus, the district court erred in denying Papa John’s motion for judgment as a ma er of law. We therefore
reverse the judgment of the district court denying Papa John’s motion for judgment as a ma er of law, vacate its ﬁnal judgment, and
remand the case to the district court for entry of judgment for Papa
John’s.
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 Schna er 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

" '"-4& "%7&35*4*/(

third largest pizza chain in the United States.
In May 1995, Papa John’s adopted a new slogan: “Be er Ingredients. Be er 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 “Be er Ingredients. Be er 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 “be er taste” of Pizza Hut’s pizza, and “dared” anyone to ﬁnd a “be er 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 be er 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 “be er pizza.” 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,”

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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 “Be er Ingredients. Be er 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 ma er 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 “Be er Ingredients. Be er Pizza.” advertising campaign with
the National Advertising Division of the Be er Business Bureau, an
industry self-regulatory body. This complaint, however, did not produce satisfactory results for Pizza Hut.
B
On August 12, 1998, Pizza Hut ﬁled a civil action in the United States
District Court for the Northern District of Texas charging Papa John’s
with false advertising in violation of Section 43(a)(1)(B) of the Lanham
Act. The suit sought relief based on the above-described TV ad campaigns, as well as on some 249 print ads. On March 10, 1999, Pizza
Hut ﬁled an amended complaint. Papa John’s answered the complaints by denying that its advertising and slogan violated the Lanham Act. Additionally, Papa John’s asserted a counterclaim, charging Pizza Hut with engaging in false advertising. The parties consented to a jury trial before a United States magistrate judge. The parties further agreed that the liability issues were to be decided by the
jury, while the equitable injunction claim and damages award were
within the province of the court.
The trial began on October 26, 1999, and continued for over three
weeks. At the close of Pizza Hut’s case, and at the close of all evidence, Papa John’s moved for a judgment as a ma er of law. The

" '"-4& "%7&35*4*/(

motions were denied each time. The district court, without objection,
submi ed the liability issue to the jury through special interrogatories. The special issues submi ed 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. The jury also determined that Papa John’s “taste
test” ads were not deceptive or likely to deceive consumers, and that
Papa John’s “ingredients claims” were not false or misleading. As to
Papa John’s counterclaims against Pizza Hut, the jury found that two
of the three Pizza Hut television ads at issue were false or misleading
and deceptive or likely to deceive consumers.
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
“Be er Ingredients. Be er 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 John’s
from “using any slogan in the future that constitutes a recognizable
variation of the phrase ‘Be er Ingredients. Be er Pizza.’ or which
uses the adjective ‘Be er’ 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 a ributes 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. The court also awarded Pizza

$)"15&3  "%7&35*4*/(

Hut $467,619.75 in damages for having to run corrective ads.
III
A
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.
B

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The law governing false advertising claims under section 43(a) of the
Lanham Act is well se led. 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. 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)

" '"-4& "%7&35*4*/(

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.” McCarthy7 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 their own intuitive reactions,
whether the advertisement is deceptive. Instead, proof of actual deception requires proof that consumers were actually deceived by the
defendant’s ambiguous or true-but-misleading statements.
7

McCarthy on Trademarks goes on to state: “Vague advertising claims that
one’s product is ‘be er’ than that of competitors’ can be dismissed as mere puﬀing that is not actionable as false advertising.”

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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 “Be er Ingredients. Be er Pizza.” is misleading and violative of section 43(a) of
the Lanham Act. In making this determination, we will ﬁrst consider
the slogan “Be er Ingredients. Be er 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

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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 a empt 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 “Be er Ingredients. Be er Pizza.”
falls into the la er category, and because the phrases “be er ingredients” and “be er 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 “Be er Ingredients. Be er Pizza.,” it is clear that the assertion
by Papa John’s that it makes a “Be er Pizza.” is a general statement of opinion regarding the superiority of its product over all others. This simple statement, “Be er 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. (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”); Atari Corp. v. 3D0 Co. (stating that a manufacturer’s slogan that its product was “the most advanced home gaming
system in the universe” was non-actionable puﬀery); Nikkal Indus.,

" '"-4& "%7&35*4*/(

Ltd. v. Salton, Inc. (stating that a manufacturers claim that its ice
cream maker was “be er” than competition ice cream makers is nonactionable puﬀery). Consequently, it appears indisputable that Papa
John’s assertion “Be er Pizza.” is non-actionable puﬀery.8
Moving next to consider separately the phrase “Be er Ingredients.,” the same conclusion holds true. Like “Be er Pizza.,” it is typical puﬀery. The word “be er,” when used in this context is unquantiﬁable. What makes one food ingredient “be er” than another comparable ingredient, without further description, is wholly a ma er
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 “be er,” without more, is quantiﬁable. As our court stated in e Presidio Enterprises, Inc. v. Warner
Brothers Distribution Corp.:
The law recognizes that a vendor is allowed some latitude
in claiming 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 ma ers 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 “Be er
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 “Be er Ingredients. Be er 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 “Be er Ingredients.” modiﬁes “Be er Pizza.”
and consequently gives some expanded meaning to the phrase “Bet8
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 Be er.”; (2)
Danato’s uses the slogan “Best Pizza on the Block.”; (3) Mr. Ga i’s uses the slogan
“Best Pizza in Town: Honest!”; and (4) Pizza Inn uses the slogans “Best Pizza Ever.”
and “The Best Tasting Pizza.”

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ter Pizza,” i.e., our pizza is be er because our ingredients are be er.
Nevertheless, the phrase fails to give “Be er Pizza.” any more quantiﬁable meaning. Stated diﬀerently, the adjective that continues to
describe “pizza” is “be er,” 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 “Be er Ingredients. Be er 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.
(1)
After the jury returned its verdict, Papa John’s ﬁled a post-verdict motion under Federal Rule of Civil Procedure 50 for a judgment as a matter of law. In denying Papa John’s motion, the district court, while
apparently recognizing that the slogan “Be er Ingredients. Be er
Pizza.” standing alone is non-actionable puﬀery under the Lanham
Act, concluded that after May 1997, the slogan was transformed as a
result of its use in connection with a series of ads that the jury found
misleading. These ads had compared speciﬁc ingredients used by
Papa John’s with the ingredients used by its competitors. In essence,
the district court held that the comparison ads in which the slogan
appeared as the tag line gave objective, quantiﬁable, and fact-speciﬁc
meaning to the slogan. Consequently, the court concluded that the
slogan was misleading and actionable under section 43(a) of the Lanham Act and enjoined its further use.
(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.

" '"-4& "%7&35*4*/(

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 pu ing 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 preference test, by the
wri en 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).10 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,
10

The testimony of Pizza Hut’s expert, Dr. Faubion, established that although
consumers stated a preference for fresh dough rather than frozen dough, when
taste tests were conducted, respondents were unable to distinguish between pizza
made on fresh as opposed to frozen dough.

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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 “Be er Ingredients. Be er 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 ‘Be er
Ingredients. Be er Pizza.’ book.” Pizza Hut argues, that because
Papa John’s gave consumers speciﬁc facts supporting its assertion
that its sauce and dough are “be er” – speciﬁc facts that the evidence,
when viewed in the light most favorable to the verdict, are irrelevant
in making a be er pizza – Papa John’s statement of opinion that it
made a “Be er Pizza” became misleading. In essence, Pizza Hut argues, that by using the slogan “Be er Ingredients. Be er 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 “Be er” rendering it actionable under
section 43(a) of the Lanham Act.
We agree that the message communicated by the slogan “Be er
Ingredients. Be er Pizza.” is expanded and given additional meaning when it is used as the tag line in the 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 “be er.” 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
“be er ingredients,” which produces a “be er 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 “be er.” Thus,
when the slogan is used in this context, it is no longer mere opinion,

" '"-4& "%7&35*4*/(

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 ma er 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.13 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 a ention 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.
13

In Johnson & Johnson v. Smithkline Beecham Corp., 960 F.2d 294 (2d Cir. 1992),
the Second Circuit discussed this requirement in some detail:
Where, as here, a plaintiﬀ’s theory of recovery is premised upon a
claim of implied falsehood, a plaintiﬀ must demonstrate, by extrinsic
evidence, that the challenged commercials tend to mislead or confuse
consumers. It is not for the judge to determine, based solely upon his
or her own intuitive reaction whether the advertisement is deceptive.
Rather, as we have reiterated in the past, “the question in such cases
is – what does the person to whom the advertisement is addressed
ﬁnd to be the message?” That is, what does the public perceive the
message to be.
The answer to this question is pivotal because, where the advertisement is literally true, it is often the only measure by which a court can
determine whether a commercial’s net communicative eﬀect is misleading. Thus, the success of a plaintiﬀ’s implied falsity claim usually
turns on the persuasiveness of a consumer survey.
Id. at 287-98.

$)"15&3  "%7&35*4*/(

Dupont) regarding the use of the slogan “Be er Ingredients. Be er
Pizza.” as wri en on Papa John’s pizza box (the box survey). The results of the box survey, however, were excluded by the district court.
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 a empted 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 a empts 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 be er ingredients” to demonstrate materiality. Although Papa John’s 1998 Awareness, Usage & A itude Tracking Study showed that 48% of the respondents believe that “Papa John’s has be er ingredients than other
national pizza chains,” the study failed 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 ma er
of law.
V
In sum, we hold that the slogan “Be er Ingredients. Be er 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 post-May 1997 comparative advertising – speciﬁcally, the
sauce and dough campaigns – was given objectiﬁable meaning and

" '"-4& "%7&35*4*/(

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.
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In June 2004, defendant Pﬁzer Inc. (“Pﬁzer”) launched a consumer advertising campaign for its mouthwash, Listerine Antiseptic
Mouthrinse. Print ads and hang tags featured an image of a Listerine
bo le balanced on a scale against a white container of dental ﬂoss.
The campaign also featured a television commercial called the
“Big Bang.” In its third version, which is still running, the commercial announces that “Listerine’s as eﬀective as ﬂoss at ﬁghting plaque
and gingivitis. Clinical studies prove it.”
In this case, plaintiﬀ McNeil-PPC, Inc. (“PPC”), the market leader
in sales of string dental ﬂoss and other interdental cleaning products,
alleges that Pﬁzer has engaged in false advertising in violation of §
43(a) of the Lanham Act and unfair competition in violation of state
law.
Before the Court is PPC’s motion for a preliminary injunction enjoining Pﬁzer from continuing to make these claims in its advertisements.
Pﬁzer sponsored two clinical studies involving Listerine and ﬂoss:
the “Sharma Study” and the “Bauroth Study.” These studies purported to compare the eﬃcacy of Listerine against dental ﬂoss in controlling plaque and gingivitis in subjects with mild to moderate gingivitis.
In proving an advertising claim literally false, a plaintiﬀ bears a
diﬀerent burden depending on whether the advertisement purports
to be based on test results. Hence, where a defendant’s advertisement
contends that “clinical tests” prove the superiority of its product (an
“establishment claim”), the plaintiﬀ need only prove that the tests referred to were not suﬃciently reliable to permit one to conclude with
reasonable certainty that they established the proposition for which
they were cited. On the other hand, where a superiority claim does
not purport to rest on test results, the plaintiﬀ may prove falsity only
upon adducing evidence that aﬃrmatively shows defendant’s claim
to be false.
Pﬁzer’s advertisements make the explicit claim that “clinical studies prove that Listerine is as eﬀective as ﬂoss against plaque and gingivitis.” As Pﬁzer purports to rely on “clinical studies,” this is an “establishment claim” and PPC need only prove that the studies referred

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to were not suﬃciently reliable to permit one to conclude with reasonable certainty that they established the proposition for which they
were cited. Two questions are presented: ﬁrst, whether the Sharma
and Bauroth Studies stand for the proposition that “Listerine is as effective as ﬂoss against plaque and gingivitis”; and second, assuming
they do, whether the studies are suﬃciently reliable to permit one to
draw that conclusion with “reasonable certainty.”
First, even pu ing aside the issue of their reliability, the two studies do not stand for the proposition that “Listerine is as eﬀective as
ﬂoss against plaque and gingivitis.” The two studies included in their
samples only individuals with mild to moderate gingivitis. They excluded individuals with severe gingivitis or with any degree of periodontitis, and they did not purport to draw any conclusions with
respect to these individuals. Hence, the literal claim in Pﬁzer’s advertisements is overly broad, for the studies did not purport to prove
that Listerine is as eﬀective as ﬂoss “against plaque and gingivitis,”
but only against plaque and gingivitis in individuals with mild to
moderate gingivitis. The advertisements do not specify that the “as
eﬀective as ﬂoss” claim is limited to individuals with mild to moderate gingivitis. Consequently, consumers who suﬀer from severe
gingivitis or periodontitis (including mild periodontitis) may be misled by the ads into believing that Listerine is just as eﬀective as ﬂoss
in helping them ﬁght plaque and gingivitis, when the studies simply
do not stand for that proposition.
Second, the two studies were not suﬃciently reliable to permit
one to conclude with reasonable certainty that Listerine is as eﬀective as ﬂoss in ﬁghting plaque and gingivitis, even in individuals with
mild to moderate gingivitis. What the two studies showed was that
Listerine is as eﬀective as ﬂoss when ﬂossing is not done properly.
The authors of both studies recognized that the plaque reductions in
the ﬂossing groups were lower than would be expected and hypothesized that “behavioral or technical causes” were the reason. Signiﬁcantly, in some of the plaque reduction scores for the ﬂossing groups
there was greater improvement at three months than at six months,
suggesting a deterioration in ﬂossing technique with the passage of
time.
Hence, the studies did not “prove” that Listerine is “as eﬀective
as ﬂoss.” Rather, they proved only that Listerine is “as eﬀective as
improperly-used ﬂoss.” The studies showed only that Listerine is as
eﬀective as ﬂoss when the ﬂossing is not performed properly. As one
of the ADA consultants observed in objecting to the advertising when
it was proposed, “for a substitute product to be ‘as good as’ or ‘be er’
than ﬂossing it must be compared against the data of subjects who
demonstrate they can and are ﬂossing eﬀectively.”
Pﬁzer and its experts argue that the two studies are reliable,

" '"-4& "%7&35*4*/(

notwithstanding the indications that the participants in the ﬂossing
group did not ﬂoss properly, because these conditions reﬂect “realworld se ings.” But the ads do not say that “in the real world,” where
most people ﬂoss rarely or not at all and even those who do ﬂoss have
diﬃculty ﬂossing properly, Listerine is “as eﬀective as ﬂoss.” Rather,
the ads make the blanket assertion that Listerine works just as well
as ﬂoss, an assertion the two studies simply do not prove. Although
it is important to determine how a product works in the real world,
it is probably more important to ﬁrst determine how a product will
work when it is used properly.
Accordingly, I hold that PPC is likely to succeed on its claim of
literal false advertisement.
4BUFMMJUF 57 1SPCMFN
This advertisement for DirecTV ran on the Internet; it was shown to
customers in markets served by Time Warner Cable. Some of Time
Warner’s channels are analog; others are digital HD. DirecTV oﬀers
only digital HD channels. The parties agree that the HD channels are
equivalent in quality. They also agree that the pixelated portions of
the ads are not accurate depictions of cable TV signals, either digital
or analog. Is the advertisement actionable?

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There’s not a lot of caselaw on secondary liability for false advertising
– but there is some.
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[DFA operates duty free stores in airports. It previously sold Estée Lauder cosmetics. DFA purchased those cosmetics at wholesale
prices that were lower than the wholesale prices charged to traditional retailers, such as department stores. As a result, it was able
to oﬀer its customers lower retail prices. In 2007, Estée Lauder announced plans to eliminate the diﬀerence and move to a system with
a single suggested retail price. As a result, DFA ended its relationship with Estée Lauder and devoted the shelf space to other products. Some of its competitors continued to sell Estée Lauder products
and announced this fact to airport authorities during the bidding processes to operate duty-free concessions at airports in Newark, Boston,

" '"-4& "%7&35*4*/(

Orlando, and Atlanta. They also allegedly made various false statements about DFA. It sued Estée Lauder on a number of theories, including contributory false advertising.]
Whether § 43(a) of the Lanham Act includes within its ambit a
claim for false advertising based on contributory liability is a question
of ﬁrst impression.
The rationale for allowing contributory trademark infringement
actions supports recognizing a similar theory of liability in the false
advertising context. For starters, § 43(a) of the Lanham Act contains
two diﬀerent classes of prohibitions: one banning trademark infringement and one prohibiting false advertising.
These prohibitions are found in the same statutory provision,
and they share the same introductory clause. The placement of the
two prohibitions in the same statutory section—and correspondingly,
the fact that the introductory language banning both practices is
identical—suggests the two causes of action should be interpreted
to have the same scope.
Moreover, while the two causes of action are derived from the
same principles and contained in the same statute, the Supreme
Court has recognized that the false advertising provision of the Lanham Act entails broader protections. See POM Wonderful (“The Lanham Act’s trademark provisions are the primary means of achieving [the statute’s] ends. But the Act also creates a federal remedy
[for false advertising] that goes beyond trademark protection. The
broader remedy is at issue here.”). It would be odd indeed for us to
narrow the scope of the false advertising provision—a cause of action
plainly intended to encompass a broader spectrum of protection—
and hold that it could be enforced only against a smaller class of defendants. Absent congressional direction, we are reluctant to limit
the statute’s scope in this way. Thus, we hold that a plaintiﬀ may
bring a claim for contributory false advertising under § 43(a) of the
Lanham Act.
What, then, must a plaintiﬀ establish in order to state a contributory false advertising claim? First, the plaintiﬀ must show that a
third party in fact directly engaged in false advertising that injured
the plaintiﬀ. Second, the plaintiﬀ must allege that the defendant contributed to that conduct either by knowingly inducing or causing the
conduct, or by materially participating in it.
Once the plaintiﬀ establishes the elements of a direct false advertising claim against a third party, it must allege that the defendant
contributed to that conduct. This means that the plaintiﬀ must allege
that the defendant had the necessary state of mind—in other words
that it intended to participate in or actually knew about the false advertising. The plaintiﬀ must also allege that the defendant actively
and materially furthered the unlawful conduct – either by inducing

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it, causing it, or in some other way working to bring it about.
Analogies from trademark infringement, in which contributory
liability is more developed, can be instructive. Thus, for example, a
plaintiﬀ may be able to make out the participation prong of a contributory false advertising claim by alleging that the defendant directly controlled or monitored the third party’s false advertising. It
is also conceivable that there could be circumstances under which
the provision of a necessary product or service, without which the
false advertising would not be possible, could support a theory of contributory liability. In determining whether a plaintiﬀ has adequately
alleged facts to support such a claim, we look to whether the complaint suggests a plausible inference of knowing or intentional participation, examining the nature and extent of the communication”
between the third party and the defendant regarding the false advertising; “whether or not the defendant explicitly or implicitly encouraged the false advertising; whether the false advertising is serious and widespread, making it more likely that the defendant knew
about and condoned the acts; and whether the defendant engaged in
bad faith refusal to exercise a clear contractual power to halt the false
advertising.
The district court identiﬁed four allegedly false claims in the complaint, each of which was made by a duty free operator to representatives of an airport and each of which DFA says we should a ribute
to Estée Lauder. First, Nuance stated in a le er to Atlanta oﬃcials:
“Given that Estée Lauder brands account for 20% of cosmetic and fragrance sales, at least in Orlando, and cosmetic and fragrance sales
constitute one of the largest sources of revenue for duty free stores, a
lack of access to Estée Lauder brands would cast doubt on the validity
of DFA’s projected revenue streams.” Second, Travel Retail told Orlando oﬃcials: “[W]e strongly believe that Estée Lauder is a product
which you have to sell, also, to domestic passengers.” Third, Nuance
said during the Orlando appeal hearing: “With respect to DFA, I’d
like to echo Travel Retail’s concerns on DFA’s rents. ... DFA sales
project[ions] are deemed to be unreasonable and not sustainable in
light of the history.” Finally, Travel Retail informed the Orlando Airport Authority: “[F]ailure to oﬀer the Estée Lauder product line will
negatively impact duty free and duty paid sales revenue for both international and domestic travelers.” DFA argues that it also alleged
that Nuance, in its le er protesting the Atlanta award, stated “DFA
may have made misrepresentations about its ability to carry Estée
Lauder brands,” and we agree that this is an allegedly false claim the
district court failed to consider.
As for the ﬁrst element, Estée Lauder claims that the duty free operators did not engage in any false advertising. Estée Lauder urges
us to hold that DFA’s complaint is devoid of any false or mislead-

" '"-4& "%7&35*4*/(

ing statements cognizable under the Lanham Act, but we need not
answer this fact-intensive question. We agree that DFA did not adequately allege Estée Lauder contributed to any of the statements, and
thus aﬃrm the district court’s dismissal on this ground.
We are unable to ﬁnd in DFA’s complaint any facts that would
enable the court to draw the reasonable inference that Estée Lauder
induced or knowingly or intentionally participated in any of the allegedly false statements made by the other duty free operators. In
its complaint, DFA based its claim for contributory liability on the
fact that “[Estée Lauder] knew or should have known of the False
Claims, but [it] continued to supply [Estée Lauder] product [s] to its
favored duty free operators.... In doing so, [Estée Lauder] provided
its favored duty free operators with the means to continue making
the False Claims....” We cannot see how the mere sale of Estée Lauder
products can serve as a basis for holding the manufacturer liable for
any disparaging statements its customers make in the course of their
own separate business relations. In our view, selling Estée Lauder
products is too unrelated to the making of the allegedly false or misleading statements to form a basis for liability – under either an inducement or participation theory.
Moreover, contrary to DFA’s argument, there are simply no facts
in the complaint that suggest the existence of coordinated action or
encouragement, much less inducement, between Estée Lauder and
the operators on the decision to make the disputed claims to airport
authorities. There has been no allegation that by selling its products
to the duty free operators, Estée Lauder monitored, controlled, or participated in operators’ statements to airport authorities during a competitive bidding process for which Estée Lauder was not even present.
More generally, there are no facts to suggest that Estée Lauder commonly exercises any level of control over or involvement in the duty
free operators’ conduct during airport RFP bidding.
In short, although we agree with DFA that a plaintiﬀ may state a
claim against a defendant for contributory false advertising, we are
unwilling to extend the doctrine as far as DFA urges. The mere sale of
products in the course of an ordinary business relationship, without
more, cannot justify a ﬁnding that a defendant induced, encouraged,
caused, procured, or brought about false advertising. Contributory
false advertising claims are cognizable under the Lanham Act, but a
plaintiﬀ must allege more than an ordinary business relationship between the defendant and the direct false advertiser in order to plausibly plead its claim. DFA has failed to do so here.

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Other models relax the Lanham Act standing rules in various ways.
The Lanham Act generally only allows competing businesses to sue
each other. But various speech torts permit businesses to sue for certain false statements by non-competitors. On the other side of the v,
consumers and government agencies can sue businesses for certain
false statements. In each case, the substantive rules of liability (especially the treatment of falsity) are tweaked to account for the diﬀerent
party conﬁgurations.

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An unruly bundle of common-law torts try to protect individuals and
businesses from injurious falsehoods. The following materials are not
meant to be representative of this sprawling and doctrinally intricate
mess, only to give another take on falsity and to illustrate the complete absence of anything resembling the competitor- or purchaserin-reliance- standing requirements.
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An action for commercial disparagement is similar in many respects
to an action for defamation, but there are important diﬀerences. Both
torts seek to impose liability on a defendant for harm sustained by a
plaintiﬀ as a result of the publication of a false statement about the
plaintiﬀ to others. A defamation action, which encompasses libel and
slander, aﬀords a remedy for damage to the reputation of the injured
party. By comparison, an action for commercial disparagement affords a remedy for harm to the economic interests of the injured party
that results in pecuniary loss. A plaintiﬀ asserting such a claim seeks
to recover damages for false disparaging statements about the plaintiﬀ’s property, often a product or service being sold.
This court adopted the language of the Restatement (Second)
of Torts § 623A, regarding liability for commercial disparagement:
”One who publishes a false statement harmful to the interests of another is subject to liability for pecuniary loss resulting to the other
if (a) he intends for publication of the statement to result in harm to
the interests of the other having a pecuniary value, or either recognizes or should recognize that it is likely to do so, and (b) he knows
that the statement is false or acts in reckless disregard of its truth or
falsity.” Thus, in order to prevail on a claim alleging commercial disparagement, a plaintiﬀ must prove that a defendant: (1) published a
false statement to a person other than the plaintiﬀ; (2) ”of and concerning” the plaintiﬀ’s products or services; (3) with knowledge of

# "-5&3/"5*7&4 50 $0.1&5*503 46*54

the statement’s falsity or with reckless disregard of its truth or falsity;
(4) where pecuniary harm to the plaintiﬀ’s interests was intended or
foreseeable; and (5) such publication resulted in special damages in
the form of pecuniary loss.7
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Aviation Charter, Inc. (Aviation Charter), appeals from the district
court’s grant of summary judgment to Aviation Research Group/US
(ARGUS) on Aviation Charter’s claims of defamation and alleged violations of the Minnesota Deceptive Trade Practices Act (MDTPA),
and the Lanham Act
ARGUS publishes and sells safety ratings of air charter service
providers. It bases its ratings on a methodology called the Charter
Evaluation and Qualiﬁcations (CHEQ) system, which has ”three major components: Historical Safety Ratings, Current Aircraft and Pilot
Data, and On-Site Safety Audits.” June 12, 2003, CHEQ Report on
Aviation Charter. ARGUS maintains that it:
... conducts in-depth research into multiple public
databases to uncover accidents, incidents, enforcement
actions, and certiﬁcation data relating to the operator.
Records that are discovered are assigned a score based on
the oﬃcial cause, violation, or other data on record. Older
records have less impact on the score and are omi ed after
ten years. The total of all found records results in a Historical Safety Record score, with the higher score reﬂecting a
greater number of negative events.
Carriers are grouped into four classes of operation based on the number of aircraft they operate. ARGUS assigns carriers one of four ratings: Does Not Qualify (DNQ), Silver, Gold, and Platinum. The Silver
rating is assigned to ”[t]hose operators with CHEQ scores within one
standard deviation of the median score for their class of operation.”
The DNQ rating is the lowest possible rating.
In 2001, ARGUS assigned a DNQ rating to Aviation Charter. The
following year, Senator Paul Wellstone and seven others died in an
Aviation Charter crash. Following the Wellstone crash, the Minneapolis Star Tribune published an article entitled ”Wellstone charter ﬁrm
7

Notwithstanding many similarities between the torts of commercial disparagement and defamation, it has been recognized that from the beginning, more stringent requirements were imposed upon the plaintiﬀ seeking to recover for commercial disparagement in three important respects – falsity of the statement, fault of the
defendant and proof of damage. For purposes of this opinion, we need not elaborate at length on these particular distinctions, other than to note that as the common
law of defamation has become infused with principles of the First Amendment to
the United States Constitution, these distinctions have narrowed.

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got poor safety evaluation.” The Star Tribune article referred to ARGUS’s report on Aviation Charter and quoted ARGUS’s president,
Joe Moeggenberg.
After the Star Tribune article was published, Aviation Charter contacted ARGUS and inquired about the basis of its rating. Aviation
Charter concluded that ARGUS’s rating system was fundamentally
ﬂawed and, when ARGUS refused to retract its rating, Aviation Charter initiated this lawsuit.
A.
A statement is defamatory under Minnesota law if it is communicated
to a third party, is false, and tends to harm the plaintiﬀ’s reputation
in the community. It is well recognized in Minnesota that the First
Amendment absolutely protects opinion that lacks a provably false
statement of fact. Statements about ma ers of public concern that are
not capable of being proven true or false and statements that reasonably cannot be interpreted as stating facts are protected from defamation actions by the First Amendment.
We have characterized the balance of Aviation Charter’s defamation claim as derivative of ARGUS’s comparison that ”Aviation Charter, relative to other carriers of its size, has an unfavorable safety
record.” We must examine whether this comparison is ”suﬃciently
factual to be susceptible of being proved true or false.” Milkovich If
ARGUS had oﬀered a wholly subjective basis for its conclusion, or
even no basis whatsoever, then the comparison would likely have
lacked objectively veriﬁable criteria. ARGUS, however, asserted that
its comparative rating was derived from ”multiple public databases
to uncover accidents, incidents, enforcement actions, and certiﬁcation data relating to the operator.” Nonetheless, although ARGUS’s
comparison relies in part on objectively veriﬁable data, the interpretation of those data was ultimately a subjective assessment, not an
objectively veriﬁable fact. ARGUS’s description of its process illustrates the subjective component of its assessment:
Incidents are rated on a scale of 1-10. ARGUS has trained
its analysts to follow general guidelines for the type of incident and severity of the action. The analysts then make
independent judgments based on the information in the
database regarding the report. They review the facts in the
documents and can ”hyper link” to the speciﬁc regulation
that was violated. If they believe that a drastic variation
from the computer assigned score is warranted, the three
analysts can caucus and discuss the incident and draw on
outside scores if necessary. The individual ”scores” for
each incident are then weighted so that the scores in the
most recent 36 months are more signiﬁcant than those that

# "-5&3/"5*7&4 50 $0.1&5*503 46*54

occurred more than three years ago. The weighted scores
are added together and compared to like-sized carriers.
ARGUS chose which underlying data to prioritize, performed a subjective review of those data, and deﬁned ”safety” relative to its own
methodology.
ARGUS’s interpretation of the public database information available on Aviation Charter is not suﬃciently factual to be susceptible of
being proved true or false. It is a subjective interpretation of multiple
objective data points leading to a subjective conclusion about aviation safety. Cf. . Haynes v. Alfred A. Knopf, Inc. (”A statement of fact
is not shielded from an action for defamation by being prefaced with
the words ‘in my opinion,’ but if it is plain that the speaker is expressing a subjective view, an interpretation, a theory, conjecture, or surmise, rather than claiming to be in possession of objectively veriﬁable
facts, the statement is not actionable.”). Because ARGUS’s comparative rating is not a provably false statement of fact, Aviation Charter’s
defamation claim fails with respect to that rating and the derivative
statements in the Star Tribune article.

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B.
Aviation Charter asserts that ARGUS violated the Lanham Act because ARGUS’s statements to the Star Tribune were made to advertise
the fact that ARGUS was in the business of rating carriers like Aviation Charter. The Lanham Act requires that a false statement, in order
to be actionable, must be made in commercial advertising or promotion. For a statement to constitute commercial advertising or promotion, it must be made, inter alia, by a defendant who is in commercial
competition with the plaintiﬀ. The district court correctly found that
Aviation Charter’s Lanham Act action failed because ARGUS was not
in commercial competition with Aviation Charter.
C.
The district court concluded that Aviation Charter’s MDTPA action,
like its Lanham Act action, failed because ARGUS was not in competition with Aviation Charter. As ARGUS concedes, however, the
district court erred in so holding because the MDTPA provides that
”a complainant need not prove competition between the parties.”
The MDTPA provides that a person engages in a deceptive trade
practice when, inter alia, the person ”disparages the goods, services,
or business of another by false or misleading representation of fact.”
As set forth above, ARGUS’s statement that Aviation Charter had ﬁfteen FAA enforcement actions was false. Accordingly, that statement
would violate the MDTPA if it disparaged Aviation Charter. We conclude, however, that Aviation Charter cannot demonstrate that the

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statement disparaged its business, given the full context of the Star
Tribune article.

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Consumers can sometimes bring actions for common-law fraud or
under state unfair-competition laws that provide for consumer suits.
But these causes of action tend to have more stringent elements than
competitor suits, and can be especially diﬃcult to maintain on a classwide basis.
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In this consumer class action, plaintiﬀ John Locke has moved for class
certiﬁcation and defendant Gearbox has moved for dismissal or judgment on the pleadings. The Court denies both motions.
The product at issue in this case is the video game “Aliens: Colonial Marines” (“ACM”). The game, developed by Gearbox Software,
L.L.C. (“Gearbox”) and produced by Sega of America, Inc. (“Sega”),
was “held out as the canon sequel to James Cameron’s 1986 ﬁlm
‘Aliens.’” Named plaintiﬀ John Locke is an “avid fan of the series”
who pre-purchased a copy prior to its release. Damion Perrine, the
other named plaintiﬀ, is also a “fan of the Aliens franchise,” and purchased a copy of the game on its release date, February 13, 2013.
The complaint alleges a “classic bait-and-switch.” Plaintiﬀs allege
that defendants developed a “non-retail but technically superior version” of the game that featured, among other things, “advanced artiﬁcial intelligence programming, certain gameplay sequences drawn
from the Aliens movie,” and “a highly advanced graphics engine (the
‘Demo Engine’),” and presented this version and described it to the
public as “actual gameplay.” The retail version that was ultimately
sold, however, allegedly “utilized diﬀerent programming altogether
and a diﬀerent—and much less advanced—graphics engine.” The
complaint alleges that because of these diﬀerences, videogame industry critics expressed “disappointment and surprise” following the
public release of the game, and that even Randy Pitchford, President of Gearbox, “acknowledged the discrepancy between the Aliens:
Colonial Marines hands-oﬀ demo and the ﬁnal game.” On this basis,
the complaint asserts six claims for relief: (1) violation of the Consumer Legal Remedies Act, Cal. Civil Code § 1750 (“CLRA”); (2)
violation of the Unfair Competition Law, Cal. Bus. & Prof.Code §
17200 (“UCL”); (3) violation of the False Advertising Law, Cal. Bus.
& Prof.Code § 17500 (“FAL”); (4) breach of express warranties; (5)
fraud in the inducement; and (6) negligent misrepresentation.
As an initial ma er, the proposed class as framed by the complaint

# "-5&3/"5*7&4 50 $0.1&5*503 46*54

– “all persons in the United States who paid for a copy of the Aliens:
Colonial Marines video game either on or before February 12, 2013”
– is not certiﬁable. At a minimum, common questions of fact would
not predominate in the class as deﬁned by the complaint; rather, individualized. And while it is true that “class members do not need
to demonstrate individualized reliance” for plaintiﬀ’s claims under
the UCL and FAL, even for those claims, a presumption of reliance
does not arise when class members were exposed to quite disparate
information from various representatives of the defendant. For the
presumption to apply, it is necessary for everyone in the class to have
viewed the allegedly misleading advertising. Plaintiﬀ’s original deﬁnition makes no a empt to limit the class to those who were exposed
to the allegedly misleading advertising here, and consequently it is
overbroad and not certiﬁable.
The obviousness of these principles is underscored by the fact that
plaintiﬀ rapidly retreated at the hearing to “limit the class to people
who viewed an advertisement.” Plaintiﬀ proposed to do this “by aﬃdavit and claim form.” The Court directed the parties to submit supplemental briefs on this issue, namely “whether the Court can and
should certify a class allowing class membership to be established by
assertion of the class members by way of, e.g., aﬃdavits swearing
that a consumer viewed a certain video or trailer prior to placing a
pre-order for the game at issue.”
The parties responded, and the Court now concludes that the answer to its question is no. The problem with plaintiﬀ’s suggestion is
that the revised class lacks ascertainability. Ascertainability is an important requirement because it is needed for properly enforcing the
preclusive eﬀect of ﬁnal judgment. The class deﬁnition must be clear
in its applicability so that it will be clear later on whose rights are
merged into the judgment, that is, who gets the beneﬁt of any relief
and who gets the burden of any loss.
The factual record in the case shows why ascertainability is a pipe
dream here. As the complaint acknowledges, this is not a case about
a single misrepresentation. Rather, the non-retail version of the ACM
game is alleged to have been presented to the public “through a series of ‘actual gameplay’ demonstrations.” The ﬁrst demonstration is
alleged to have occurred “at the annual ‘E3’ conference in early June
2011.” At the hearing, plaintiﬀ explained that the ad campaign at issue “started at the E3 2011 conference and concluded ... right before
the release date [of the game in] February of 2013.”
It is undisputed in the record that many trailers and commercials
were released during that time period, primarily via the Internet but
also through television. It is further undisputed that several videos
for ACM shown before the game’s release contain footage from only
the ﬁnal retail version, rather than from the alleged non-retail version.

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When pressed at the hearing to identify which speciﬁc videos or trailers included the allegedly problematic E3 2011 video or portions of
it, plaintiﬀ’s counsel answered that he could not “say with certainty
which ones” and that he “just [didn’t] have the information.” Counsel added, ineﬀectually, that it does not “ma er that each and every
video didn’t have a speciﬁc scene from the 2011 reenactment,” because the E3 2011 video “was accessible through this time period”
and remains so today. And Mr. Locke, the only named plaintiﬀ moving for class certiﬁcation and seeking appointment as a class representative, compounded the ascertainability problem by testifying in
deposition that he could not “answer ... with any degree of certainty”
a question regarding which videos he saw before he preordered his
copy of the game.
These facts distinguish this case from others in which selfidentiﬁcation through aﬃdavits was found to be permissible, and
places it in the camp of cases where such a proposal failed for lack
of ascertainability. As was the case in Xavier, there is “no good way
to identify” individuals who “have been exposed to Defendants’ atissue advertising before February 12, 2003 – the day that all ACM
preorders were made ‘ﬁnal.’” Pu ing aside the fact that plaintiﬀ has
failed to carry his burden of identifying which videos and trailers actually comprise defendants’ “at-issue advertising” here, there is no
good way to identify which purchasers viewed which videos prior to
purchasing the game. Certainly, defendants have no records of who
viewed what when, and plaintiﬀ has not identiﬁed any documentbased method of identifying this information. Instead, plaintiﬀ’s
suggestion is to permit class members to self-identify through the
submission of aﬃdavits, but those aﬃdavits would be highly unreliable and likely to embody the “subjective memory problem” that
was found to exist in Xavier v. Philip Morris USA Inc.. As Judge Alsup
noted in that case, “[s]wearing ‘I smoked 146,000 Marlboro cigare es’
is categorically diﬀerent from swearing ‘I have been to Paris, France,’
or ‘I am Jewish,’ or even ‘I was within ten miles of the toxic explosion
on the day it happened,” and the “memory problem is compounded
by incentives individuals would have to associate with a successful
class or dissociate from an unsuccessful one.”
The reality of this memory problem is beyond meaningful dispute.
One of the two named plaintiﬀs here has already admi ed under oath
that he cannot identify “with any degree of certainty” which videos
he saw before he placed his pre-order of the game at issue. The other
named plaintiﬀ, who no longer seeks to be a class representative but
whose testimony is relevant nevertheless, also testiﬁed under oath
that he could “not with certainty” remember all the videos he saw
for Aliens: Colonial Marines. He further aﬃrmed that there were
“no records or no way for you to be able to recreate all of the diﬀerent

# "-5&3/"5*7&4 50 $0.1&5*503 46*54

videos or demonstrations you may have seen for the game.”
On this record, the Court ﬁnds that “persons who viewed an advertisement for ACM incorporating the Demoed Version,” cannot be
identiﬁed through any reliable and manageable means, and that the
proposed class lacks ascertainability.

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Section 5 of the Federal Trade Commission Act authorizes the FTC
to prevent ”unfair or deceptive acts or practices in or aﬀecting commerce.” In some respects, this authority parallels the tests applied
to competitor suits under the Lanham Act. In other respects, it is
broader. State law often also provides for public enforcement by state
oﬃcials, typically state a orneys general. (We will not discuss these
”Baby FTC Acts” further here, other than to note their nickname.)
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 64
The Winsted Hosiery Company has for many years manufactured underwear which it sells to retailers throughout the United States. It
brands or labels the cartons in which the underwear is sold, as ”Natural Merino”, ”Gray Wool”, ”Natural Wool”, ”Natural Worsted”, or
”Australian Wool”. None of this underwear is all wool. Much of it
contains only a small percentage of wool; some as li le as ten per cent.
The Federal Trade Commission instituted a complaint under § 5, and
called upon the company to show cause why use of these brands and
labels alleged to be false and deceptive should not be discontinued.
It is contended that the method of competition complained of is
not unfair within the meaning of the act, because labels such as the
Winsted Company employs, and particularly those bearing the word
”Merino”, have long been established in the trade and are generally
understood by it as indicating goods partly of co on; that the trade is

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not deceived by them; that there was no unfair competition for which
another manufacturer of underwear could maintain a suit against the
Winsted Company; and that even if consumers are misled because
they do not understand the trade signiﬁcation of the label or because
some retailers deliberately deceive them as to its meaning, the result
is in no way legally connected with unfair competition.
This argument appears to have prevailed with the Court of Appeals; but it is unsound. The labels in question are literally false, and,
except those which bear the word ”Merino”, are palpably so. All are,
as the Commission found, calculated to deceive and do in fact deceive a substantial portion of the purchasing public. That deception
is due primarily to the words of the labels, and not to deliberate deception by the retailers from whom the consumer purchases. While it
is true that a secondary meaning of the word ”Merino” is shown, it is
not a meaning so thoroughly established that the description which
the label carries has ceased to deceive the public; for even buyers
for retailers, and sales people, are found to have been misled. The
facts show that it is to the interest of the public that a proceeding to
stop the practice be brought. And they show also that the practice
constitutes an unfair method of competition as against manufacturers of all wool knit underwear and as against those manufacturers
of mixed wool and co on underwear who brand their product truthfully. For when misbranded goods a ract customers by means of
the fraud which they perpetrate, trade is diverted from the producer
of truthfully marked goods. That these honest manufacturers might
protect their trade by also resorting to deceptive labels is no defense
to this proceeding brought against the Winsted Company in the public interest.
The fact that misrepresentation and misdescription have become
so common in the knit underwear trade that most dealers no longer
accept labels at their face value, does not prevent their use being an
unfair method of competition. A method inherently unfair does not
cease to be so because those competed against have become aware of
the wrongful practice. Nor does it cease to be unfair because the falsity of the manufacturer’s representation has become so well known
to the trade that dealers, as distinguished from consumers, are no
longer deceived. The honest manufacturer’s business may suﬀer, not
merely through a competitor’s deceiving his direct customer, the retailer, but also through the competitor’s pu ing into the hands of the
retailer an unlawful instrument, which enables the retailer to increase
his own sales of the dishonest goods, thereby lessening the market for
the honest product. As a substantial part of the public was still misled
by the use of the labels which the Winsted Company employed, the
public had an interest in stopping the practice as wrongful; and since
the business of its trade rivals who marked their goods truthfully was

# "-5&3/"5*7&4 50 $0.1&5*503 46*54

necessarily aﬀected by that practice, the Commission was justiﬁed in
its conclusion that the practice constituted an unfair method of competition; and it was authorized to order that the practice be discontinued.
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[Kraft Singles were classiﬁed as ”processed cheese”: part cheese and
part other ingredients. To diﬀerentiate them from ”imitation cheese”
slices, which contain li le or no cheese, Kraft advertised its Singles as
having ”ﬁve ounces of milk” per slice and emphasized their calcium
content. But 30% of the calcium in the milk in Kraft Singles was lost
during processing.]
In determining what claims are conveyed by a challenged advertisement, the Commission relies on two sources of information: its
own viewing of the ad and extrinsic evidence. Its practice is to view
the ad ﬁrst and, if it is unable on its own to determine with conﬁdence
what claims are conveyed in a challenged ad, to turn to extrinsic evidence. The most convincing extrinsic evidence is a survey of what
consumers thought upon reading the advertisement in question, but
the Commission also relies on other forms of extrinsic evidence including consumer testimony, expert opinion, and copy tests of ads.
Kraft has no quarrel with this approach when it comes to determining whether an ad conveys express claims, but contends that the
FTC should be required, as a ma er of law, to rely on extrinsic evidence rather than its own subjective analysis in all cases involving
allegedly implied claims. The basis for this argument is that implied
claims, by deﬁnition, are not self-evident from the face of an ad. This,
combined with the fact that consumer perceptions are shaped by a
host of external variables – including their social and educational
backgrounds, the environment in which they view the ad, and prior
experiences with the product advertised – makes review of implied
claims by a ﬁve-member commission inherently unreliable.
Kraft bu resses its argument by pointing to the use of extrinsic
evidence in an analogous context: cases brought under § 43(a) of the
Lanham Act. Courts hearing deceptive advertising claims under that
Act, which provides a private right of action for deceptive advertising,
generally require extrinsic proof that an advertisement conveys an
implied claim. Were this a Lanham Act case, a reviewing court in
all likelihood would have relied on extrinsic evidence of consumer
perceptions. While this disparity is sometimes justiﬁed on grounds
of advertising ”expertise” – the FTC presumably possesses more of it
than courts – Kraft maintains this justiﬁcation is an illusory one in that
the FTC has no special expertise in discerning consumer perceptions.
While Kraft’s arguments may have some force as a ma er of pol-

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icy, they are unavailing as a ma er of law. Courts, including the
Supreme Court, have uniformly rejected imposing such a requirement on the FTC, FTC v. Colgate-Palmolive Co. (FTC not required to
conduct consumer surveys before determining that a commercial has
a tendency to mislead), and we decline to do so as well. We hold that
the Commission may rely on its own reasoned analysis to determine
what claims, including implied ones, are conveyed in a challenged
advertisement, so long as those claims are reasonably clear from the
face of the advertisement.
The Commission’s expertise in deceptive advertising cases,
Kraft’s protestations notwithstanding, undoubtedly exceeds that of
courts as a general ma er. That false advertising cases constitute a
small percentage of the FTC’s overall workload does not negate the
fact that signiﬁcant resources are devoted to such cases in absolute
terms, nor does it account for the institutional expertise the FTC gains
through investigations, rulemakings, and consent orders.
We ﬁnd substantial evidence in the record to support the FTC’s
ﬁnding. Although Kraft downplays the nexus in the ads between
milk and calcium, the ads emphasize visually and verbally that ﬁve
ounces of milk go into a slice of Kraft Singles; this image is linked
to calcium content, strongly implying that the consumer gets the calcium found in ﬁve ounces of milk.
Kraft asserts that the literal truth of the Class Picture ads – they
are made from ﬁve ounces of milk and they do have a high concentration of calcium – makes it illogical to render a ﬁnding of consumer
deception. The diﬃculty with this argument is that even literally true
statements can have misleading implications. Here, the average consumer is not likely to know that much of the calcium in ﬁve ounces of
milk (30%) is lost in processing, which leaves consumers with a misleading impression about calcium content. The critical fact is not that
reasonable consumers might believe that a ¾ ounce slice of cheese
actually contains ﬁve ounces of milk, but that reasonable consumers
might believe that a ¾ ounce slice actually contains the calcium in
ﬁve ounces of milk.
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Dear Counsel:
As you know, the staﬀ of the Federal Trade Commission’s Northwest Region has conducted an investigation into whether Microsoft
Cmporation and its advertising agency, Starcom MediaVest Group
(“Starcom”), violated Section 5 of the Federal Trade Commission Act,
15 U.S.C. § 45, in connection with the promotion ofXbox One video
game consoles and certain Microsoft video game titles.

# "-5&3/"5*7&4 50 $0.1&5*503 46*54

Our inquiry focused on an advertising campaign conducted by
Machinima, Inc., in late 2013 at the request of Starcom, acting on behalf of Microsoft.
As part of that advertising campaign, Machinima, a multi-channel
network on YouTube, paid several of its network partners (video bloggers known as “inﬂuencers”) signiﬁcant amounts of money to produce and upload Xbox One gameplay videos. The videos, which
were posted to YouTube in the days immediately prior to and after
the launch of the Xbox One, were intended to generate buzz around
and drive sales of the newly released Xbox One and the Microsoft
video game titles.
At Machinima’s direction, the inﬂuencers spoke favorably of the
Xbox One and the game titles in their videos.
The videos were uploaded by the inﬂuencers to their individual
YouTube channels, where they appeared to be independently produced by, and to reﬂect the personal views of, the inﬂuencers.
Machinima did not require the inﬂuencers to disclose in their
videos that they were being compensated for producing and uploading the videos, and when the videos were uploaded, many (if not
most) of the inﬂuencers failed to make any kind of disclosure.
Section 5 of the FTC Act requires the disclosure of a material connection between an advertiser and an endorser when such a relationship is not apparent from the context of the communication that contains the endorsement. In this case,the payment of signiﬁcant sums to
video bloggers to post speciﬁc content promoting the Xbox One and
Microsoft’s game titles is a material connection that would not be reasonably expected by YouTube viewers. As the advertiser, Microsoft
bears responsibility for the inﬂuencers’ failure to disclose such material connections. Starcom, as Microsoft’s agent and the advertising
agency that managed the relationship with Machinima, also bears responsibility for the inﬂuencers’ failure to disclose.
However, upon careful review of this ma er, including nonpublic
information submi ed to the FTC, we have determined not to recommend enforcement action against Microsoft or Starcom at this time.
We considered several factors in reaching this decision.
The failures to disclose here appear to be isolated incidents that occurred in spite of, and not in the absence of, policies and procedures
designed to prevent such lapses. Microsoft had a robust compliance
program in place when the Xbox One campaign was launched, including speciﬁc legal and marketing guidelines concerning the FTC’s
Endorsement Guides and relevant training made available to employees, vendors and Starcom personnel. Since the Xbox One campaign,
Microsoft and Starcom have adopted additional safeguards regarding sponsored endorsements, and they have commi ed to, among
other steps, speciﬁcally requiring their employees to monitor inﬂu-

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encer campaigns conducted by subcontractors in the future. In addition, Microsoft and Starcom took swift action to require that Machinima insert disclosures into the campaign videos once they learned
that Machinima had paid the inﬂuencer and that no disclosures had
been made.
Our decision not to pursue enforcement action is not to be construed as a determination that a violation may not have occurred, just
as the pendency of an investigation should not be construed as a determination that a violation has occurred. The Commission reserves
the right to take further action as the public interest may warrant.

See also 16 C.F.R. pt. 255 (”Guides Concerning the Use of Endorsements and Testimonials in Advertising”); F
T
C
,.
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(Mar. 2013). In addition to disclosure, endorsements can also raise falsity and substantiation issues about the endorser’s experience with the product – and endorsement claims without the endorser’s permission can raise § 43(a) false-endorsement and
right of publicity issues.

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In a sense, trademark law treats consumer understandings – i.e. secondary meaning and goodwill – as a source of truth. A trademark
refers to its owner’s goods or services; using it to refer to something

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else is false as a ma er of law. But in another, more accurate sense,
trademark law defers to consumer understandings only so long as
the mark owner is not using them to deceive. Arbitrary trademarks
like APPLE for computers are acceptable only because no one really
thinks the computers are made of apples.
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No trademark … shall be refused registration on the principal register
on account of its nature unless it—
(a) Consists of or comprises … deceptive … ma er; …
(e) Consists of a mark which (1) when used on or in connection
with the goods of the applicant is merely … deceptively misdescriptive of them … .
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Budge Manufacturing Co., Inc., appeals from the ﬁnal decision of the
United States Trademark Trial and Appeal Board refusing registration of LOVEE LAMB for “automotive seat covers,” application Serial
No. 507,974 ﬁled November 9, 1984. The basis for rejection is that the
term LAMB is deceptive ma er within the meaning of section 2(a) of
the Lanham Act as applied to Budge’s goods which are made wholly
from synthetic ﬁbers. We aﬃrm.
Section 2(a) of the Lanham Act bars registration of a mark which:
“Consists of or comprises ... deceptive ... ma er....” As stated in
In re Automatic Radio Mfg. Co.: “The proscription [of section 2(a)]
is not against misdescriptive terms unless they are also deceptive.”
Thus, that a mark or part of a mark may be inapt or misdescriptive as applied to an applicant’s goods does not make it “deceptive.”
Id.(AUTOMATIC RADIO not a deceptive mark for air conditioners,
ignition systems, and antennas).
Where the issue relates to deceptive misdescriptiveness within the
meaning of 2(a), we are in general agreement with the standard set
out by the board:
(1) Is the term misdescriptive of the character, quality, function,
composition or use of the goods?
(2) If so, are prospective purchasers likely to believe that the misdescription actually describes the goods?
(3) If so, is the misdescription likely to aﬀect the decision to purchase?
In ex parte prosecution, the burden is initially on the Patent and
Trademark Oﬃce (PTO) to put forth suﬃcient evidence that the mark

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for which registration is sought meets the above criteria of unregistrability. Mindful that the PTO has limited facilities for acquiring evidence – it cannot, for example, be expected to conduct a survey of the
marketplace or obtain consumer aﬃdavits – we conclude that the evidence of record here is suﬃcient to establish a prima facie case of deceptiveness. That evidence shows with respect to the three-pronged
test:
(1) Budge admits that its seat covers are not made from lamb or
sheep products. Thus, the term LAMB is misdescriptive of its
goods.
(2) Seat covers for various vehicles can be and are made from natural lambskin and sheepskin. Applicant itself makes automobile
seat covers of natural sheepskin. Lambskin is deﬁned, inter alia,
as ﬁne-grade sheep skin. The board’s factual inference is reasonable that purchasers are likely to believe automobile seat covers
denominated by the term LAMB or SHEEP are actually made
from natural sheep or lamb skins.
(3) Evidence of record shows that natural sheepskin and lambskin
is more expensive than simulated skins and that natural and
synthetic skins have diﬀerent characteristics. Thus, the misrepresentation is likely to aﬀect the decision to purchase.
Faced with this prima facie case against registration, Budge had the
burden to come forward with countering evidence to overcome the
rejection. It wholly failed to do so.
Budge argues that its use of LAMB as part of its mark is not misdescriptive when considered in connection with the text in its advertising, which states that the cover is of “simulated sheepskin.”
We conclude that the board properly discounted Budge’s advertising and labeling which indicate the actual fabric content. Misdescriptiveness of a term may be negated by its meaning in the context of the
whole mark inasmuch as the combination is seen together and makes
a unitary impression. A.F. Gallun & Sons Corp. v. Aristocrat Leather
Prods., Inc. (COPY CALF not misdescriptive, but rather suggests imitation of calf skin). The same is not true with respect to explanatory
statements in advertising or on labels which purchasers may or may
not note and which may or may not always be provided. The statutory provision bars registration of a mark comprising deceptive matter. Congress has said that the advantages of registration may not be
extended to a mark which deceives the public. Thus, the mark standing alone must pass muster, for that is what the applicant seeks to
register, not extraneous explanatory statements.
Budge next argues that no reasonable purchaser would expect
to purchase lambskin automobile seat covers because none made of
lambskin are on the market. Only sheepskin automobile seat covers

$ 05)&3 4063$&4 0' "%7&35*4*/( -"8

are being made, per Budge. Not only was no evidence submi ed
on the point Budge seeks to make, only statements of Budge’s a orney, but also the argument is without substance. The board properly
equated sheepskin and lambskin based on the dictionary deﬁnition
which indicates that the terms may be used interchangeably. In addition, while Budge would discount the evidence presented that bicycle and airline seat coverings are made of lambskin, we conclude
that it does support the board’s ﬁnding that there is nothing incongruous about automobile seat covers being made from lambskin. We
also agree with the board’s conclusion that any diﬀerences between
sheepskin and lambskin would not be readily apparent to potential
purchasers of automobile seat covers. The board’s ﬁnding here that
purchasers are likely to believe the misrepresentation is not clearly
erroneous.
Finally, we note the evidence of Budge’s extensive sales since 1974
under the mark. However, it is too well established for argument that
a mark which includes deceptive ma er is barred from registration
and cannot acquire distinctiveness.
None of the facts found by the board have been shown to be
clearly erroneous nor has the board erred as a ma er of law. Accordingly, we aﬃrm the board’s decision that Budge’s mark LOVEE
LAMB for automobile seat covers made from synthetic ﬁbers is deceptive and is, thus, barred from registration.

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Certiﬁcations come in various forms. We start with Lanham Act certiﬁcation marks (like the Fair Trade mark) because they draw heavily
from trademark law. There are also government-administered certiﬁcations, some of which are mandatory (like the FCC’s equipment
labeling rules) and some of which are voluntary (like the USDA’s
food-grading certiﬁcations).
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The term “certiﬁcation mark” means any word, name, symbol, or device, or any combination thereof–
(1) used by a person other than its owner, or
(2) which its owner has a bona ﬁde intention to permit a person
other than the owner to use in commerce and ﬁles an application to register on the principal register established by this [Act],
to certify regional or other origin, material, mode of manufacture,
quality, accuracy, or other characteristics of such person’s goods or

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services or that the work or labor on the goods or services was performed by members of a union or other organization.
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… Based on the statute, there are generally three types of certiﬁcation
marks, that is, those that certify:
1. Geographic origin. Certiﬁcation marks may be used to certify that authorized users’ goods or services originate in a speciﬁc geographic region (e.g., SUNSHINE TREE for citrus from
Florida).
2. Standards met with respect to quality, materials, or mode of manufacture. Certiﬁcation marks may be used to certify that authorized users’ goods or services meet certain standards in relation
to quality, materials, or mode of manufacture (e.g., approval by
Underwriters Laboratories) (UL certiﬁes, among other things,
representative samplings of electrical equipment meeting certain safety standards).
3. Work/labor performed by member or that worker meets certain standards. Certiﬁcation marks may also be used to certify that authorized users’ work or labor on the products or services was
performed by a member of a union or other organization, or
that the performer meets certain standards.
A certiﬁcation mark may not be used, in the trademark sense of
“used,” by the owner of the mark; it may be used only by a person
or persons other than the owner of the mark. That is, the owner of a
certiﬁcation mark does not apply the mark to his or her goods or services and, in fact, usually does not a ach or apply the mark at all. The
mark is generally applied by other persons to their goods or services,
with authorization from the owner of the mark.
The owner of a certiﬁcation mark does not produce the goods or
perform the services in connection with which the mark is used, and
thus does not control their nature and quality. Therefore, it is not
appropriate to inquire about control over the nature and quality of
the goods or services. What the owner of the certiﬁcation mark does
control is use of the mark by others on their goods or services. This
control consists of taking steps to ensure that the mark is applied only
to goods or services that contain the characteristics or meet the requirements that the certiﬁer/owner has established or adopted for the
certiﬁcation.
A certiﬁcation mark is a special creature created for a purpose
uniquely diﬀerent from that of an ordinary service mark or trade-

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mark That is, the purpose of a certiﬁcation mark is to inform purchasers that the goods or services of a person possess certain characteristics or meet certain qualiﬁcations or standards established by
another person. A certiﬁcation mark does not indicate origin in a single commercial or proprietary source the way a trademark or service
mark does. Rather, the same certiﬁcation mark is used on the goods
or services of many diﬀerent producers.
The message conveyed by a certiﬁcation mark is that the goods
or services have been examined, tested, inspected, or in some way
checked by a person who is not their producer, using methods determined by the certiﬁer/owner. The placing of the mark on goods, or
its use in connection with services, thus constitutes a certiﬁcation by
someone other than the producer that the prescribed characteristics
or qualiﬁcations of the certiﬁer for those goods or services have been
met.
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The Fair Trade USA Farm Workers Standard takes a development
approach in that it diﬀerentiates between minimum criteria and
progress criteria. Minimum criteria are assessed during the ﬁrst certiﬁcation audit and represent minimum practices in social empowerment, economic development, and environmental responsibility.
These criteria are met prior to initial certiﬁcation. Progress criteria are
fulﬁlled after the ﬁrst year of certiﬁcation and represent continuous
development towards increased social empowerment and economic
development as well as best practices in environmental responsibility.
…
ED-CE 1 Conditions of employment, including wages, either meet
or exceed the following standards: sector regulations, Collective Bargaining Agreements that are in place with the employer, the regional
average minimum wage, and oﬃcial minimum wages for similar occupations. The employer speciﬁes wages for all functions. …
ED-CE 20 If the company provides the workers with housing, the conditions and the infrastructure of the house must be such as to ensure
sanitation, safety, ventilation, reasonable protection from heat and
cold, privacy and security. Housing must be provided at reasonable
cost. Fire extinguishers are provided and workers should be trained
on how to use them. …
SR-ND 1 There is no discrimination, particularly on the basis of race,
color, gender, sexual orientation, disability, marital status, family
obligations, age, religion, political opinion, union or worker’s representative bodies or Fair Trade Commi ee membership, national extraction or social origin or any other condition that could give rise to
discrimination, in: recruitment, promotion, access to training, remu-

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neration, allocation of work, termination of employment, retirement
or other activities. …
ES-AC 1 Materials on the red list (prohibited materials) on the Fair
Trade USA Prohibited Materials List (see annex 1) are not used or
otherwise sold, handled, or distributed by the company.
ES-AC 2 The decision to use herbicides is based on the presence of
weeds and lack of alternative controls. If used, herbicides are only
one element of an integrated strategy against weeds, and are only
used in spot applications. …
S

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Produce - Banana
At FOB level, prices include the costs for the following packing material:
• standard carton box,
• one plastic per carton box (banavac or polypack),
• pallet,
• edge corners,
• strips,
• up to 3 labels per banana hand
The costs for these standard packing and palletization materials are
covered by the exporter. However, the service related to packing (labor costs) of above deﬁned standard packing material is included in
the Ex Works prices and provided by the producer. Neither the Ex
Works nor the FOB prices include costs for additional or special packing materials such as “clusterbags” or “paraﬁlm” and related services.
Costs for those packing materials and any associated labor must be
paid on top of the Fair Trade Minimum Prices to producers at Ex
Works or FOB level and be deﬁned in the contract. Fair Trade Minimum Prices in any case refer to 18.14 kg of ripened fruit. If boxes
with diﬀerent weight are used, Fair Trade Minimum Prices and Fair
Trade Premiums are calculated pro rata.
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What do a trendy kosher restaurant in SoHo, an independent movie
about a serial killer, and a Swiss watchmaker have in common? Each
has been excluded by a certiﬁer from employing its legally protected
certiﬁcation mark in ways that seem to run counter to the certiﬁcation mark’s purposes of consumer protection and promotion of competition. Each of these businesses has either been disqualiﬁed by a
certiﬁer from ge ing a certiﬁcation mark or been manipulated by

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a certiﬁer into securing a certiﬁcation mark: a kosher food certiﬁcation withheld from the restaurant until it changed its name; an
R movie rating withheld from the independent movie, whose producer claimed the rating was being given to far gorier—yet nonindependent—movies; and a withheld geographical certiﬁcation of
SWISS MADE for the watchmaker located in Swi erland and much
of whose watches’ value – but not all – originates in Swi erland. The
inability of each of these businesses to be certiﬁed as is – without any
clear certiﬁcation standard or procedural regularity – can have adverse, and sometimes catastrophic, consequences for the businesses,
their consumers, and competition writ large.
Because the law allows certiﬁcation standards to be vague, highlevel, and underdeveloped, a certiﬁer can choose to exclude certain businesses inconsistently or arbitrarily, even when these businesses’ goods or services would seem to qualify for the certiﬁcation
mark (particularly to consumers). Moreover, certiﬁers can wield their
marks anticompetitively, even when a certiﬁcation standard is clear
and complete. They can do so through redeﬁnition—something certiﬁcation mark law currently allows without oversight—to ensure that
certain businesses’ goods or services will not qualify for the mark.
Both of these forms of certiﬁcation mark manipulation undermine
the goals of certiﬁcation marks: (1) to protect consumers by providing them with succinct information – via the marks – on goods’ or
services’ characteristics and (2) to promote competition by ensuring
that any businesses’ goods or services sharing certain characteristics
salient to consumers qualify for a mark certifying those characteristics.
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Low-power, non-licensed transmi ers are used virtually everywhere.
Cordless phones, baby monitors, garage door openers, wireless home
security systems, keyless automobile entry systems and hundreds of
other types of common electronic equipment rely on such transmitters to function. At any time of day, most people are within a few
meters of consumer products that use low-power, non-licensed transmi ers. Part 15 transmi ers use very li le power, most of them less
than a milliwa . They are ”non-licensed” because their operators are
not required to obtain a license from the FCC to use them.
The Federal Communications Commission (FCC) has rules to
limit the potential for harmful interference to licensed transmi ers
by low-power, non-licensed transmi ers. The certiﬁcation procedure
requires that tests be performed to measure the levels of radio fre-

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quency energy that are radiated by the device into the open air or
conducted by the device onto the power lines. results, and some additional information about the device including design drawings.
Certiﬁed transmi ers also are required to have two labels attached: an FCC ID label and a compliance label. The FCC ID label identiﬁes the FCC equipment authorization ﬁle that is associated
with the transmi er, and serves as an indication to consumers that
the transmi er has been authorized by the FCC. The compliance label indicates to consumers that the transmi er was authorized under
Part 15 of the FCC rules and that it may not cause, nor is it protected
from, harmful interference.

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The inspection and grading of meat and poultry are two separate programs within the U.S. Department of Agriculture (USDA). Inspection
for wholesomeness is mandatory and is paid for with public funds.
Grading for quality is voluntary, and the service is requested and
paid for by meat and poultry producers/processors.
Meat that has been federally inspected and passed for wholesomeness is stamped with a round purple mark. The dye used to stamp
the grade and inspection marks onto a meat carcass is made from a
food-grade vegetable dye and is not harmful. (The exact formula is
proprietary/owned by the maker of the dye.)The mark is put on carcasses and major cuts. After trimming, the mark might not appear on
retail cuts such as roasts and steaks. However, meat that is packaged
in an inspected facility will have an inspection mark which identiﬁes
the plant on the label.
After meat and poultry are inspected for wholesomeness, producers and processors may request that they have products graded for
quality by a licensed Federal grader. The USDA’s Agricultural Marketing Service (h p://www.ams.usda.gov) is the agency responsible
for grading meat and poultry. Those who request grading must pay
for the service. Grading for quality means the evaluation of traits related to tenderness, juiciness, and ﬂavor of meat; and, for poultry, a
normal shape that is fully ﬂeshed and meaty and free of defects.
USDA grades are based on nationally uniform Federal standards
of quality. No ma er where or when a consumer purchases graded
meat or poultry, it must have met the same grade criteria. The grade
is stamped on the carcass or side of beef and is usually not visible on
retail cuts. However, retail packages of beef, as well as poultry, will
show the U.S. grade mark if they have been oﬃcially graded.
The grade symbol and wording are no longer copyrighted; however, according to the Truth in Labeling Law, it is illegal to mislead

$ 05)&3 4063$&4 0' "%7&35*4*/( -"8

or misrepresent the shield or wording.
Quality Grades:
• Prime grade is produced from young, well-fed beef ca le. It
has abundant marbling and is generally sold in restaurants and
hotels. Prime roasts and steaks are excellent for dry-heat cooking (broiling, roasting, or grilling).
• Choice grade is high quality, but has less marbling than Prime.
Choice roasts and steaks from the loin and rib will be very tender, juicy, and ﬂavorful and are, like Prime, suited to dry-heat
cooking. Many of the less tender cuts, such as those from the
rump, round, and blade chuck, can also be cooked with dry heat
if not overcooked. Such cuts will be most tender if ”braised” —
roasted, or simmered with a small amount of liquid in a tightly
covered pan.
• Select grade is very uniform in quality and normally leaner
than the higher grades. It is fairly tender, but, because it has
less marbling, it may lack some of the juiciness and ﬂavor of the
higher grades. Only the tender cuts (loin, rib, sirloin) should be
cooked with dry heat. Other cuts should be marinated before
cooking or braised to obtain maximum tenderness and ﬂavor.
• Standard and Commercial grades are frequently sold as ungraded or as ”store brand” meat.
• Utility, Cu er, and Canner grades are seldom, if ever, sold at
retail but are used instead to make ground beef and processed
products.

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Some countries have sui generis systems for protecting geographical indications. The United States mostly does not; we protect them primarily – but not exclusively – with trademarks and certiﬁcation marks.
An underlying question is how terms become geographical designators in the ﬁrst place. Some arise from local usage over time; others
are assigned by oﬃcial bodies. For two interesting snapshots with
occasional parallels to the trademark system, see U.S. Board on Geographic Names, 1PMJDJFT 1SJODJQMFT 1SPDFEVSFT %PNFTUJD (FPHSBQIJD
/BNFT (2016), and Margaret A. Corwin, 4USFFU/BNJOH BOE 1SPQFSUZ
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The French system of appellations d’origine contrôlées (AOC) is founded
on the idea of terroir. Terroir has no direct English translation, but

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the notion behind the Latinate word is simple: the product’s qualities come with the territory. As one Australian wine critic describes
it: “terroir . . . translates roughly as ‘the vine’s environment[,]’ but
has connotations that extend right into the glass: in other words, if a
wine tastes of somewhere, if the ﬂavours distinctly make you think
of a particular place on the surface of this globe, then that wine is
expressing its terroir.”
Beliefs about terroir run deep in France, but not too deep, for if
they did there might not be a justiﬁcation for the elaborate regulatory structure governing production of AOC foodstuﬀs. The INAO
regulates not just the geographic boundaries for each AOC, but all
“conditions of production,” including, for wine, the grape varietals,
hectare production quotas, natural alcohol content during viniﬁcation, permi ed irrigation, etc. The Institut National des Appellations
d’Origine (INAO) regulations for AOC cheese place varying legal requirements on rennet used in coagulation, curd drainage, milk temperature at diﬀerent points in curing, salting, and the use of lactic
proteins.
In contrast to a separate system for protecting appellations, some
countries, like the United States, subsume protection of geographical indications under trademark law. This is achieved through the
categories of “certiﬁcation marks” and “collective marks.” …
Geographical words in product names (that is, labeling and advertising) have three basic purposes. These are (1) to communicate geographic source, (2) to communicate (non- geographic) product qualities, and (3) to create evocative value. The ﬁrst of these is simple. “Industria Argentina” or “Made in England” communicate a product’s
geographic origins. Second, geographic words are often used to communicate product characteristics other than geographic origin. This
second use often leads to the geographic words becoming “generic.”
The word loses its geographic meaning and acquires another meaning based on non-geographic qualities of the product, as when people
go into a restaurant chinois oﬀ the Champs-Elysées or, nine time zones
away, Californians order French fries with their hamburger.
A third, more overlooked, category for use of geographical words
in product names is their use for evocative and aesthetic purposes.
These are typically uses of words which, in American trademark doctrine, would be “fanciful” or “arbitrary.” The evocative value of geographic words is most evident with geographic names of ﬁctional or
no-longer existent places: ATLANTIS waterprooﬁng services, POMPEII game machines,23 and SHANGRI-LA hotels.
Armed with this framework, we will see that the classical justiﬁcation for geographical indications is that they serve a special combination of (1) and (2): to communicate a product’s geographical source
and non-geographic qualities of the product that are related to its geo-

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graphic origin. This is the idea of terroir: that the particular geography
produces particular product characteristics that cannot be imitated by
other regions. The idea of terroir undergirds the European Union
claim for stronger protection of geographical indications. This concept helps justify the European Union’s demand, since 2004, for the
“return” of over forty words that have become generic names for foodstuﬀs in other countries (e.g., Parmesan cheese, Champagne, Chablis,
Gorgonzola cheese, Parma ham, etc.). Although terroir and a claim
for a unique communications function for geographical indications
is the European Union’s public rhetoric, this Article concludes that
the European Commission has a simpler goal: control of geographic
words for their evocative value in the marketplace. The monopoly rents
available from exclusive control of this evocative value drive the EU
position in the debates over geographical indications.
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1.

Geographical indications are, for the purposes of this Agreement, indications which identify a good as originating in the
territory of a Member, or a region or locality in that territory,
where a given quality, reputation or other characteristic of the
good is essentially a ributable to its geographical origin.
2. In respect of geographical indications, Members shall provide
the legal means for interested parties to prevent:
(a) the use of any means in the designation or presentation of
a good that indicates or suggests that the good in question
originates in a geographical area other than the true place
of origin in a manner which misleads the public as to the
geographical origin of the good;
(b) any use which constitutes an act of unfair competition
within the meaning of Article 10bis of the Paris Convention (1967) [i.e., “in the course of trade is liable to mislead the public as to the nature, the manufacturing process,
the characteristics, the suitability for their purpose, or the
quantity, of the goods”]
3. A Member shall, ex oﬃcio if its legislation so permits or at the request of an interested party, refuse or invalidate the registration
of a trademark which contains or consists of a geographical indication with respect to goods not originating in the territory indicated, if use of the indication in the trademark for such goods
in that Member is of such a nature as to mislead the public as to
the true place of origin.

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1.

Each Member shall provide the legal means for interested parties to prevent use of a geographical indication identifying
wines for wines not originating in the place indicated by the geographical indication in question or identifying spirits for spirits
not originating in the place indicated by the geographical indication in question, even where the true origin of the goods is
indicated or the geographical indication is used in translation
or accompanied by expressions such as “kind”, “type”, “style”,
“imitation” or the like.
2. The registration of a trademark for wines which contains or consists of a geographical indication identifying wines or for spirits
which contains or consists of a geographical indication identifying spirits shall be refused or invalidated, ex oﬃcio if a Member’s
legislation so permits or at the request of an interested party,
with respect to such wines or spirits not having this origin.
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6.

Nothing in this Section shall require a Member to apply its
provisions in respect of a geographical indication of any other
Member with respect to goods or services for which the relevant
indication is identical with the term customary in common language as the common name for such goods or services in the
territory of that Member. …
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No trademark … shall be refused registration on the principal register
on account of its nature unless it—
(a) Consists of or comprises … a geographical indication which,
when used on or in connection with wines or spirits, identiﬁes
a place other than the origin of the goods …
(e) Consists of a mark which … (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 [pertaining to collective marks and certiﬁcation marks], (3) when used on or in
connection with the goods of the applicant is primarily geographically deceptively misdescriptive of them, … .

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This case comes before the Court on cross motions for summary judgment ﬁled by plaintiﬀ Guantanamera Cigar Company’s (“GCC”) and
defendant Corporacion Habanos, S.A. (“Habanos”). Upon reviewing the motions, the Court concludes that the Trademark Trial and
Appeal Board (“TTAB”) erred as a ma er of law in applying the
three-part test for primarily geographically deceptively misdescriptive marks, which are barred from registration by the Lanham Act,
15 U.S.C. § 1052(e)(3). Therefore, the Court grants the plaintiﬀ’s mo-

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I. F
B
GCC is a small company based in Coral Gables, Florida. GCC manufactures cigars in Honduras from non-Cuban seeds, then sells and
distributes them mainly in the Miami area, as well as other parts of
the United States. GCC ﬁled a trademark application for the mark
GUANTANAMERA for use in connection with cigars on May, 14,
2001. When translated, “guantanamera” means “(i) the female adjectival form of GUANTANAMO, meaning having to do with or belonging to the city or province of Guantanamo, Cuba; and/or (ii) a woman
from the city or province of Guantanamo, Cuba.” Many people are
also familiar with the Cuban folk song, Guantanamera, which was
originally recorded in 1966.
Habanos, jointly owned by the Cuban government and a Spanish
entity, manufactures cigars. The Cuban embargo prohibits Habanos
from exporting cigars into the U.S. Habanos, however, owns trademarks on many cigar brands outside the U.S., including registrations
or applications for GUANTANAMERA in more than 100 countries in
the world. On December 29, 1998, Habanos applied for the mark in
Cuba, and registered the mark on March 13, 2001. Habanos applied
for a U.S. Trademark on April 15, 2002, but its application remains
suspended because of GCC’s prior application.
Shortly after the TTAB published GCC’s application, Habanos
ﬁled an opposition, which asserted that GUANTANAMERA was
primarily geographically deceptively misdescriptive, and therefore
barred from registration. The TTAB agreed and found that GUANTANAMERA was primarily geographically deceptively misdescriptive and that Habanos had standing to oppose registration.
II. D
The TTAB improperly denied registration of GUANTANAMERA for
cigars because it used an incorrect legal standard. The TTAB must
deny registration of marks “which when used on or in connection
with the goods of the applicant is primarily geographically deceptively misdescriptive of them.” 15 U.S.C. § 1052(e)(3). A mark is “primarily geographically deceptively misdescriptive” when:
(1) the primary signiﬁcance of the mark is a generally
known geographic location, (2) the consuming public is
likely to believe the place identiﬁed by the mark indicates
the origin of the goods bearing the mark, when in fact the
goods do not come from that place, and (3) the misrepresentation was a material factor in the consumer’s decision.

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In re California Innovations, Inc.. The TTAB cited the proper legal standard, but erred in its application of the third part. The Court reviews

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the three parts of the test—geographic location, goods-place association, and materiality—as applied by the TTAB.
a. Geographic Location
There is signiﬁcant evidence in the record to ﬁnd that Cuba or Guantanamo, Cuba is the primary signiﬁcance of GUANTANAMERA.
The primary signiﬁcance of a mark is a ﬁnding of fact. Guantanamera
literally means “girl from Guantanamo.” The Plaintiﬀ argues that the
primary meaning of GUANTANAMERA is the famous Cuban song
by Joseito Fernandez. The TTAB recognized that the folk song’s history reinforces the geographic connection to Guantanamo and Cuba.
Based on the deferential standard of review, the Court ﬁnds that the
Plaintiﬀ produced insuﬃcient evidence to disturb the TTAB’s factual ﬁnding that GUANTANAMERA’s primary signiﬁcance is a geographic location.
b. Goods-Place Association
There is suﬃcient evidence to ﬁnd that the consuming public is likely
to believe that the Plaintiﬀ’s cigars originate from Cuba. If consumers
are likely to believe that the place identiﬁed on the mark is the origin
of the goods, when in fact the goods do not come from that place,
the element is satisﬁed. See also In re Spirits International N.V. (leaving
the TTAB’s analysis of the goods-place association unaltered when
the TTAB found that Moscow was well known for vodka). The Federal Circuit characterized this element as a “relatively easy burden of
showing a naked goods-place association.”
The record contains ample evidence that cigar tobacco is produced in the Guantanamo province. There is also ample evidence
to support the ﬁnding that Cuba is well-known for cigars. The TTAB
did not err in ﬁnding that the goods-place association was met.
c. Materiality
The TTAB erred as a ma er of law in its analysis of materiality. To
establish a prima facie case, the TTAB or the opposition must show
that a signiﬁcant portion of the relevant consumers would be materially inﬂuenced in the decision to purchase the product or service by
the geographic meaning of the mark. Accordingly, the Court holds
that Habanos never established a prima facie case for the third part
of the test before the TTAB.
In Spirits, the TTAB refused to register the mark MOSKOVSKAYA
for vodka because it was primarily geographically deceptively misdescriptive. MOSKOVSKAYA literally means “of or from Moscow,”
but the registrant admi ed that the vodka is not manufactured, produced, or sold in Moscow and has no connection to Moscow. The
TTAB found that the primary signiﬁcance of the mark was a gen-

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erally known geographic location and recognized that Moscow is
renowned for vodka. Thus, the ﬁrst two elements of the test were
satisﬁed. The Court took issue with the TTAB’s application of the
third element, the materiality requirement.
The TTAB reasoned that because 706,000 people in the United
States speak Russian, and because 706,000 is “an appreciable number,” the materiality requirement was satisﬁed. The Court remanded
the case without ruling on the merits because the TTAB failed to consider whether Russia speakers were a “substantial portion” of the intended audience. The Court noted that only 0.25% of the U.S. population speaks Russian. To satisfy the materiality requirement, a substantial portion of relevant consumers must be likely to be deceived,
not an absolute number or particular segment (such as foreign language speakers).
Here, the TTAB erred as a ma er of law in applying the materiality
requirement. The TTAB decided this case before the Federal Circuit
decided Spirits. The portion of the TTAB’s opinion that addressed
the materiality factor was only four sentences and did not make any
ﬁndings regarding a “substantial proportion” of materially deceived
consumers. The TTAB stated two reasons why the misrepresentation
is material in the minds of consumers: (1) Cuba’s “renown and reputation for high quality cigars” and (2) the plaintiﬀ’s subjective intent
to deceive customers evidenced by previously placing “Guantanamera, Cuba” and “Genuine Cuban Tobacco” on the packaging.
Spirits plainly demands more than a ﬁnding of Cuba’s reputation
for high quality cigars. In Spirits, Moscow’s renown reputation for
vodka was not enough to aﬃrm the TTAB’s legal conclusion; likewise,
Cuba’s renown reputation for cigars is not enough in this case.
The Court ﬁnds the plaintiﬀ’s false claims on the packaging
equally inadequate to satisfy Spirits. First, the registrant’s subjective intent provides li le, if any, insight into the minds of consumers. Consumers could have numerous reasons as to why they
purchase Guantanamera cigars, but without any objective ﬁndings,
it is diﬃcult to make an accurate conclusion as to whether the geographic misdescription will materially aﬀect a “substantial portion”
of consumers. Second, the Court does not consider extraneous and
out-dated marketing material particularly relevant in determining a
mark’s ability to satisfy the § 1052(e)(3) registration bar. The Lanham Act bars registration of marks that are primarily geographically
deceptively misdescriptive, not marks that are accompanied by deceptive packaging material. See 15 U.S.C. § 1052.
Habanos a empts to distinguish Spirits by asserting that this case
meets the “substantial proportion” requirement. It argues that there
are millions of Spanish speakers in the U.S., that the English speaking
public recognizes “guantanamera” to mean Guantanamo, Cuba, and

$ 05)&3 4063$&4 0' "%7&35*4*/( -"8

that GCC targeted Spanish speaking consumers. Nevertheless, this
evidence fails to determine that a substantial proportion of the target
audience would be deceived into purchasing the cigars because of the
false goods-place association. Habanos never introduced evidence
that suggested material deception of a substantial proportion of the
relevant consuming public.
III. C
Therefore, this case is remanded to the TTAB so it may apply the
proper legal standard to the third part of the test for primarily geographically deceptively misdescriptive terms.
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No person engaged in business as a distiller, rectiﬁer, importer,
wholesaler, or warehouseman and bo ler … shall sell or ship … any
distilled spirits in bo les, unless such bo les are marked, branded,
labeled, or packaged, in conformity with §§ 5.31 through 5.42 [which
require, in pertinent part, that the ”class and type of distilled spirits
shall be stated in conformity with § 5.22 if deﬁned therein”].
(b)

Class 2; whisky. – “Whisky” is an alcoholic distillate from a fermented mash of grain produced at less than 190° proof in such
manner that the distillate possesses the taste, aroma, and characteristics generally a ributed to whisky, stored in oak containers
(except that corn whisky need not be so stored), and bo led at
not less than 80° proof …
(6) “Spirit whisky” is a mixture of neutral spirits and not less
than 5 percent on a proof gallon basis of whisky, or straight
whisky, or straight whisky and whisky, if the straight
whisky component is less than 20 percent on a proof gallon basis.
(7) “Scotch whisky” is whisky which is a distinctive product of Scotland, manufactured in Scotland in compliance
with the laws of the United Kingdom regulating the manufacture of Scotch whisky for consumption in the United
Kingdom: Provided, That if such product is a mixture of
whiskies, such mixture is “blended Scotch whisky”
(d) Class 4; brandy. – …
(9) “Pisco” is grape brandy manufactured in Peru or Chile in
accordance with the laws and regulations of the country of
manufacture governing the manufacture of Pisco for consumption in the country of manufacture.

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Class 11; geographical designations. –
(1) Geographical names for distinctive types of distilled spirits (other than names found by the appropriate TTB oﬃcer under paragraph (k)(2) of this section to have become
generic) shall not be applied to distilled spirits produced
in any other place than the particular region indicated by
the name, unless (i) in direct conjunction with the name
there appears the word “type” or the word “American”
or some other adjective indicating the true place of production, in le ering substantially as conspicuous as such
name, and (ii) the distilled spirits to which the name is
applied conform to the distilled spirits of that particular
region. The following are examples of distinctive types
of distilled spirits with geographical names that have not
become generic: Eau de Vie de Dan ig (Danziger Goldwasser), Ojen, Swedish punch.
(2) Only such geographical names for distilled spirits as the
appropriate TTB oﬃcer ﬁnds have by usage and common
knowledge lost their geographical signiﬁcance to such extent that they have become generic shall be deemed to have
become generic. Examples at London dry gin, Geneva
(Hollands) gin.
(3) Geographical names that are not names for distinctive
types of distilled spirits, and that have not become generic,
shall not be applied to distilled spirits produced in any
other place than the particular place or region indicated
in the name. Examples are Armagnac, Greek brandy, , Jamaica rum, Puerto Rico rum, Demerara rum.
(l) Class 12; products without geographical designations but distinctive
of a particular place. –
(1) The whiskies of the types speciﬁed in paragraphs (b) (1),
(4), (5), and (6) of this section are distinctive products of the
United States and if produced in a foreign country shall
be designated by the applicable designation prescribed
in such paragraphs, together with the words “American
type” or the words “produced (distilled, blended) in __”,
the blank to be ﬁlled in with the name of the foreign country: Provided, That the word “bourbon” shall not be used
to describe any whisky or whisky-based distilled spirits
not produced in the United States.
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(b)

Except as otherwise provided in this subchapter, a textile ﬁber
product shall be misbranded if a stamp, tag, label, or other
means of identiﬁcation, or substitute therefor authorized by section 70c of this title, is not on or aﬃxed to the product showing
in words and ﬁgures plainly legible, the following:
(1) The constituent ﬁber or combination of ﬁbers in the textile ﬁber product, designating with equal prominence each
natural or manufactured ﬁber in the textile ﬁber product
by its generic name in the order of predominance by the
weight thereof if the weight of such ﬁber is 5 per centum
or more of the total ﬁber weight of the product, but nothing
in this section shall be construed as prohibiting the use of a
nondeceptive trademark in conjunction with a designated
generic name …
(2) The percentage of each ﬁber present, by weight, in the total
ﬁber content of the textile ﬁber product …
(3) The name of the manufacturer of the product …
(4) If it is an imported textile ﬁber product the name of the
country where processed or manufactured.
(5) If it is a textile ﬁber product processed or manufactured in
the United States, it be so identiﬁed.

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Blancorp has come to you with a few more ideas for trademarks for
its clumpless ice-melter. The product is factory-made in the United
States (in Duluth, Minnesota, to be precise). Recall that it mimics the
properties of a naturally occurring rock salt from Quebec, Canada.
Give your opinion on the following names as trademarks:
• DULUTH
• HAWAIIAN
• ATLANTIS
• QUEBEC SALT
• CANADIAN BLUE

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In addition to the FTC’s (and state regulators’) general power to prevent deceptive marketing, statutes and regulations sometimes give
authoritative meanings to particular terms. This raises two problems
of interest. First, when the legislative and executive branches have
said what a term means, how much room is there left for the judicial
branch to interpret it in a false advertising suit? And second, can the

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government say what words mean?

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Coca-Cola, under its Minute Maid brand, created a juice blend containing 99.4% apple and grape juices, 0.3% pomegranate juice, 0.2%
blueberry juice, and 0.1% raspberry juice. Despite the minuscule
amount of pomegranate and blueberry juices in the blend, the front label of the Coca-Cola product displays the words “pomegranate blueberry” in all capital le ers, on two separate lines. Below those words,
Coca-Cola placed the phrase “ﬂavored blend of 5 juices” in much
smaller type. And below that phrase, in still smaller type, were the
words “from concentrate with added ingredients” — and, with a line
break before the ﬁnal phrase — “and other natural ﬂavors.” The product’s front label also displays a vigne e of blueberries, grapes, and
raspberries in front of a halved pomegranate and a halved apple.
POM Wonderful LLC makes and sells pomegranate juice products, including a pomegranate-blueberry juice blend.
Alleging that the [Minute Maid] label is deceptive and misleading,
POM sued Coca-Cola under § 43 of the Lanham Act. That provision
allows one competitor to sue another if it alleges unfair competition
arising from false or misleading product descriptions. The Court of
Appeals for the Ninth Circuit held that, in the realm of labeling for
food and beverages, a Lanham Act claim like POM’s is precluded by a
second federal statute. The second statute is the Federal Food, Drug,
and Cosmetic Act (FDCA), which forbids the misbranding of food,
including by means of false or misleading labeling.
The FDCA statutory regime is designed primarily to protect the
health and safety of the public at large. The FDCA prohibits the misbranding of food and drink. A food or drink is deemed misbranded if,
inter alia, “its labeling is false or misleading,”, information required
to appear on its label “is not prominently placed thereon,” , or a label
does not bear “the common or usual name of the food, if any there
be,”. To implement these provisions, the Food and Drug Administration (FDA) promulgated regulations regarding food and beverage
labeling, including the labeling of mixes of diﬀerent types of juice into
one juice blend. . One provision of those regulations is particularly
relevant to this case: If a juice blend does not name all the juices it contains and mentions only juices that are not predominant in the blend,
then it must either declare the percentage content of the named juice
or “[i]ndicate that the named juice is present as a ﬂavor or ﬂavoring,”
e.g., “raspberry and cranberry ﬂavored juice drink.”
Unlike the Lanham Act, which relies in substantial part for its enforcement on private suits brought by injured competitors, the FDCA
and its regulations provide the United States with nearly exclusive

$ 05)&3 4063$&4 0' "%7&35*4*/( -"8

enforcement authority, including the authority to seek criminal sanctions in some circumstances. Private parties may not bring enforcement suits.
Beginning with the text of the two statutes, it must be observed
that neither the Lanham Act nor the FDCA, in express terms, forbids
or limits Lanham Act claims challenging labels that are regulated by
the FDCA.
The structures of the FDCA and the Lanham Act reinforce the conclusion drawn from the text.The Lanham Act and the FDCA complement each other in major respects, for each has its own scope and purpose. Although both statutes touch on food and beverage labeling,
the Lanham Act protects commercial interests against unfair competition, while the FDCA protects public health and safety. The two
statutes impose diﬀerent requirements and protections.
The two statutes complement each other with respect to remedies
in a more fundamental respect. Enforcement of the FDCA and the detailed prescriptions of its implementing regulations is largely committed to the FDA. The FDA, however, does not have the same perspective or expertise in assessing market dynamics that day-to-day competitors possess. Competitors who manufacture or distribute products have detailed knowledge regarding how consumers rely upon
certain sales and marketing strategies. Their awareness of unfair competition practices may be far more immediate and accurate than that
of agency rulemakers and regulators. Lanham Act suits draw upon
this market expertise by empowering private parties to sue competitors to protect their interests on a case-by-case basis. By serving a
distinct compensatory function that may motivate injured persons to
come forward, Lanham Act suits, to the extent they touch on the same
subject ma er as the FDCA, provide incentives for manufacturers to
behave well. Allowing Lanham Act suits takes advantage of synergies among multiple methods of regulation. This is quite consistent
with the congressional design to enact two diﬀerent statutes, each
with its own mechanisms to enhance the protection of competitors
and consumers.
A holding that the FDCA precludes Lanham Act claims challenging food and beverage labels would not only ignore the distinct functional aspects of the FDCA and the Lanham Act but also would lead
to a result that Congress likely did not intend. Unlike other types
of labels regulated by the FDA, such as drug labels, it would appear
the FDA does not preapprove food and beverage labels under its regulations and instead relies on enforcement actions, warning le ers,
and other measures. Because the FDA acknowledges that it does not
necessarily pursue enforcement measures regarding all objectionable
labels, if Lanham Act claims were to be precluded then commercial
interests – and indirectly the public at large – could be left with less

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eﬀective protection in the food and beverage labeling realm than in
many other, less regulated industries. It is unlikely that Congress intended the FDCA’s protection of health and safety to result in less
policing of misleading food and beverage labels than in competitive
markets for other products.

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A key issue in advertising law is whether regulation of deception
can be wholesale or retail. California has a particularly restrictive
law that bars labeling products as “Made in U.S.A.” unless the overall product and the parts are substantially made in the U.S. In a recent case, a California appeals court sustained this law against a First
Amendment challenge. The court ruled that the legislature could
determine that, as a general ma er, merchandise not meeting the
statute’s restrictive deﬁnition would be deceptively labeled if advertised as “Made in U.S.A.” Thus, though the plaintiﬀ had to meet
standing requirements showing that he’d been harmed by the misrepresentation, he could rely on the statutory deﬁnition to establish
that the defendants violated the law by using “Made in U.S.A.” and
“All American-Made” on products using Taiwanese- made screws
and parts sub-assembled in Mexico.
To the extent that the law is directed at consumer protection, calibrating it to promote domestic production will be extremely diﬃcult. Producers who could use “Made in U.S.A.” if their products
had 40 percent or even 10 percent U.S. content might also keep some
jobs in the U.S. that would otherwise go overseas. Yet if consumers
expect “Made in U.S.A.” products to be made entirely or almost entirely of U.S.-made parts, then a label that incentivizes producers to
keep some jobs in the U.S. might still be deceptive. Because regulations on the advertising use of particular terms often aim both to protect consumers from deception and to encourage producers to make
products with certain components, this problem is a recurrent one.
If, however, legislatures choose deﬁnitions that protect consumer expectations, the fact that regulations might not be eﬃcient is not a free
speech argument against them. The First Amendment is not industrial policy.
By contrast to the California appeal court’s deference to legislative judgment, a recent Fifth Circuit case, Piazza’s Seafood World, LLC
v. Odom decided that it was not inherently misleading to label Chinese catﬁsh “Cajun.” The Fifth Circuit aﬃrmed the district court’s
ﬁnding that Louisiana’s Cajun Statute was an unconstitutional regulation of commercial speech. As a result, a seafood importer was
free to use “Cajun” as a trademark for its catﬁsh, even though they

$ 05)&3 4063$&4 0' "%7&35*4*/( -"8

are from China, not Louisiana, and even though they are actually of
a diﬀerent species than the domestic ﬁsh known as catﬁsh. Despite
the widespread success of the proposition that ﬁxing the meaning of
geographical indications protects and informs consumers, the Fifth
Circuit did not give any weight to the Louisiana legislature’s speciﬁc
judgment about the meaning of “Cajun.”
The Cajun case’s refusal to accept blanket bans on terms is in tension with the “Made in U.S.A.” decision, which accepted a legislative determination that “Made in U.S.A.” and similar terms would
invariably be misleading unless used according to the statutory definition. Similarly, the Supreme Court, in San Francisco Arts & Athletics accepted that “Congress reasonably could conclude that most
commercial uses of the Olympic words and symbols are likely to
be confusing,” which justiﬁed upholding a special law giving complete control over commercial uses of the term “Olympic” to the U.S.
Olympic Commi ee, regardless of whether confusion or other harm
was shown in a particular case.
These categorical determinations of misleadingness are far from
isolated incidents. Regulation-by-deﬁnition is common, and requires
lawmakers to endorse one meaning at the expense of others. Consider moral and environmental claims such as “dolphin-free tuna”:
one possible deﬁnition of dolphin-free tuna is tuna caught in a net
that didn’t happen to kill any dolphins. If the net brings up a dolphin,
you throw out the whole catch. This understanding of “dolphin-free
tuna” doesn’t address the fundamental objection that the method of
catching the tuna routinely and predictably kills a lot of dolphins.
However, it remains the case that the cans of tuna don’t have any dolphins in them and did not even need to have dead dolphins picked
out of them. Because of likely audience understanding, tuna caught
this way is not “dolphin-free.” In order to end semantic disputes,
Congress passed a law deﬁning dolphin- free tuna.
There has also been substantial debate over the proper deﬁnition
of “organic,” an oﬃcial deﬁnition of which has now been adopted by
the United States Department of Agriculture (“USDA”). Historically,
organic foods faced market diﬃculties because of a proliferation of
standards, which led to consumer suspicion that the organic label
was meaningless. Currently, products not meeting USDA standards,
but meeting some other deﬁnition of “organic,” cannot be labeled
organic. Organic products must have at least 95 percent organic content, but the remainder can be non-organic if it is on an approved list
of ingredients without reasonably available organic substitutes. That
list is itself controversial, since interested parties dispute whether or
not various ingredients are available in organic form. In addition,
“made with organic” is a separate standard, requiring at least percent
organic content.

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The issue of consumer response to standard-se ing is worth further discussion to show just how hard the problem is. By se ing
a standard, the government establishes what “organic” means. If
people misunderstand the term – in other words, if they continue
to give a diﬀerent meaning to it – there is an information problem
that leads to ineﬃcient results. If people do not understand the term
but nonetheless rely on it, then a key question is whether the government has go en the social policy producing the underlying deﬁnition
right. Moreover, the correctness of the government’s deﬁnition has
to be compared to the situation without regulation, in which producers could give the term multiple meanings as long as they were not
intentionally fraudulent. If consumers still relied on the term without understanding it or understanding that diﬀerent producers were
using diﬀerent deﬁnitions, the welfare eﬀects would change, but not
obviously in any particular direction. To this must be added the likelihood that consumers would discount the term “organic” if they believed it to be self-deﬁned, moderating both the harms and beneﬁts
of varying deﬁnitions. Only if consumers carefully research multiple meanings of unregulated terms – and only if they do this again
and again, for each term that makes a diﬀerence to them – can we expect the unregulated market to beat the government systematically
in shaping meaning.
Labels can also function as warnings, even without explicit evaluative statements. Dairy producers who use recombinant bovine
growth hormone (“rBST”, also known as “rBGH”) convinced the Second Circuit to strike down a rBST labeling requirement for milk that,
they argued, functioned as a scarlet le er. Labeling may encourage
otherwise uninterested consumers to think, mistakenly, that rBST involves health risks—they may reason that there would be no label
if it didn’t make a diﬀerence. Thus, Monsanto, the major producer
of rBST, resisted labeling and also brought false advertising claims
against smaller dairies with non-treated cows who voluntarily labeled their own milk. In addition, Monsanto recently asked the Food
and Drug Administration (“FDA”) to act against other voluntary labeling. “Not treated with rBST” is a factual statement, but its truth
or falsity is not the key question. The dispute is over whether the implications of “not treated with rBST” mislead consumers and distort
their purchases.
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Plaintiﬀs-appellees are Commack Self-Service Kosher Meats, Inc.,
d/b/a Commack Kosher, an entity in Commack, Long Island engaged
in the meat business, and its owners, Brian and Jeﬀrey Yarmeisch.
Over the last sixteen years, the Yarmeisches have been cited for viola-

$ 05)&3 4063$&4 0' "%7&35*4*/( -"8

tions of New York’s kosher fraud laws on at least four occasions.
[For example,] the Department of Agriculture and Markets inspected Commack Kosher on January 7, 1987, and seized two packages of beef chuck side steaks, each of which was marked ”soaked
and salted.” The Department’s ”laboratory analysis did not reveal
a signiﬁcantly greater salt content in the outside surface of the steak
than in the inside.” The Department asserted that ”had the steak been
properly soaked and salted, the analysis would have indicated that
the outside surface of the steak had a measurably higher salt content
than the inner part of the meat.” The Department therefore concluded
that ”the defendant’s steak was not soaked and salted according to orthodox Hebrew religious requirements and was improperly oﬀered
for sale and represented as such.” Accordingly, the Department alleged violations of New York Agriculture and Markets Law section
201-a(1), which prohibits the sale of any food product represented to
be ”kosher” that has not been prepared ”in accordance with the orthodox Hebrew religious requirements. The Yarmeisches responded
to the claimed violations in a le er dated April 29, 1987, which contained the following explanation of their soaking and salting method:
We take the side steak with the top and bo om fat left on
the meat and soak it in water for one half hour, salt for
one hour, and then rinse thoroughly. We then proceed to
remove the fat and then face the meat (remove dark meat
before packaging).
This is the procedure for all meat that is labeled soaked
and salted, all of which is done under the direction of
Rabbi Berman who has been supervising this establishment for approximately ﬁve years.
Rabbi Berman is a rabbi who adheres to the teachings of the Conservative branch of Judaism. The Yarmeisches’ le er further explained that
they believed their procedures for soaking and salting were in accordance with kosher requirements and requested that the Department
”explain how [any problem with their procedures] can be rectiﬁed.”
The Yarmeisches claimed that by deﬁning ”kosher” to mean food
that is ”prepared in accordance with orthodox Hebrew religious requirements,” New York’s kosher fraud laws violate the Establishment Clause. In cases involving facial challenges on Establishment
Clause grounds, we assess the constitutionality of an enactment by
reference to the three factors ﬁrst articulated in Lemon v. Kur man:
that a challenged law (1) have a valid secular purpose; (2) have a primary eﬀect that neither advances nor inhibits religion; and (3) not
foster excessive state entanglement with religion.
It appears to us that the challenged laws excessively entangle government and religion because they (1) take sides in a religious ma er,

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eﬀectively discriminating in favor of the Orthodox Hebrew view of
dietary requirements; (2) require the State to take an oﬃcial position
on religious doctrine; and (3) create an impermissible fusion of governmental and religious functions by delegating civic authority to individuals apparently chosen according to religious criteria.
The Department argues that the challenged laws do not excessively entangle the government with religion because ”no one disputes the meaning of the term ‘kosher.’” There is ample evidence
in the record to support the opposite conclusion. In a guide to observance of Jewish dietary law, published by the United Synagogue
Commission on Jewish Education, author Samuel H. Dresner notes
that
Over the years and in varying locales, rabbinic authorities
diﬀered in their interpretations of speciﬁc laws of kashrut.
To cite a famous example: Sephardic Jews eat rice and
legumes on Passover, Ashkenazic Jews do not. Ashkenazic Jews, by and large, do not eat the hindquarters of
beef; Sephardic Jews do.
Some of the decisions recorded in this book are not accepted by all authorities on Jewish law, notably decisions
about wine, cheese, gelatin, swordﬁsh and sturgeon. This
is not a novel situation in the history of Jewish law. There
have always been disagreements on various points.
Samuel H. Dresner, The Jewish Dietary Laws 55-56 (1982).
We ﬁnd it indisputable that there are diﬀerences of opinion within
Judaism regarding the dietary requirements of kashrut. As a result,
because the challenged laws interpret ”kosher” as synonymous with
the views of one branch, those of Orthodox Judaism, the State has
eﬀectively aligned itself with one side of an internal debate within
Judaism. This it may not do.
In order to assert that a food article does not conform to kosher
requirements, New York must take an oﬃcial position as to what are
the kosher requirements. In doing so, the Department must either
interpret religious doctrine or defer to the interpretations of religious
oﬃcials in reaching its oﬃcial position.
We also ﬁnd that the challenged laws fail the second prong of the
Lemon test, which mandates that, to avoid conﬂict with the Establishment Clause, a principal or primary eﬀect of a challenged law must
neither advance nor inhibit religion. The challenged laws violate this
prohibition because they (1) have a primary eﬀect that both advances
religion, by preferring the dietary restrictions of Orthodox Judaism
over those of other branches, and inhibits religion, by eﬀectively prohibiting other branches from using the kosher label in accordance
with their religious beliefs, and (2) create an impermissible joint exer-

$ 05)&3 4063$&4 0' "%7&35*4*/( -"8

cise of religious and civic authority that advances religion. We reach
this conclusion for reasons similar to those that demonstrate excessive entanglement of government and religion.
Finally, because the secular purpose prong of the Lemon test is often easily satisﬁed, and is uncontested by the parties here, we address
it last. The parties here do not dispute that the challenged laws were
enacted for the secular purpose of protecting consumers from fraud
in the kosher food market.
We agree with the New Jersey Supreme Court that a state has ”a
valid interest in preventing fraud in the sale of any foods, including
kosher foods.” Ran-Dav’s County Kosher, Inc. v. State. This interest in
protecting against fraud in the kosher food market extends to the general public. Indeed, Jewish consumers reportedly now make up less
than thirty percent of the consumers of kosher food. The remainder
are Muslims and others with similar religious requirements, persons
with special dietary restrictions, and those who simply prefer food
bearing the kosher label as a symbol of purity. The State clearly has
a valid secular interest in protecting from fraud all those who choose
to consume kosher food products. We do note, however, that the
challenged laws imperfectly accomplish this secular purpose because
their avowed purpose is amply covered by the existing general fraud
laws. For example, section 199-a(1) prohibits any misbranding of
food, and therefore would penalize vendors who falsely represented
their products to be kosher according to the standard described on
the label. In other words, under the general statutory scheme governing fraud in the food industry, the State can prevent fraud in the
sale of kosher food in a less restrictive and neutral manner by simply
requiring that any vendor engaged in the sale of kosher food state
the basis on which the food is labeled kosher. Thus, the valid secular
purpose articulated by the State can be accomplished by nondiscriminatory means that do not advance religion.
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Kosher certiﬁcation marks are used to designate food items that comply with Judaism’s strict dietary laws. A kosher certiﬁcation mark
informs the consumer that a certiﬁcation agency has examined the
manufacturing process, the ingredients, and the cleanliness of the
production facilities of a product to insure that the product is kosher.
Because the various kosher certiﬁcation agencies employ their own
standards for accepting products as kosher, according to their particular interpretation of Judaism’s dietary requirements, it is important
for a consumer to recognize the marks of the certiﬁcation agencies

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that he trusts.

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Regulations sometimes tell companies what they must say, rather
than what they must not say.

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Congress has required country-of-origin labels on a variety of foods,
including some meat products and tasked the Secretary of Agriculture with implementation. [Yadda yadda yadda.] The Secretary responded with a rule in 2013 requiring more precise information —
revealing the location of each production step. For example, meat
derived from an animal born in Canada and raised and slaughtered
in the United States, which formerly could have been labeled ”Product of the United States and Canada,” would now have to be labeled
”Born in Canada, Raised and Slaughtered in the United States.”
The plaintiﬀs, a group of trade associations representing livestock
producers, feedlot operators, and meat packers, whom we’ll collectively call American Meat Institute (”AMI”), challenged the 2013 rule
in district court as a violation of both the statute and the First Amendment. AMI argues that the 2013 rule violates its First Amendment
right to freedom of speech by requiring it to disclose country-oforigin information to retailers, who will ultimately provide the information to consumers.
The starting point common to both parties is that Zauderer v. Oﬃce
of Disciplinary Counsel of Supreme Court of Ohio applies to government
mandates requiring disclosure of ”purely factual and uncontroversial information” appropriate to prevent deception in the regulated
party’s commercial speech. The key question for us is whether the
principles articulated in Zauderer apply more broadly to factual and
uncontroversial disclosures required to serve other government interests. [The court held that it does.] All told, Zauderer’s characterization
of the speaker’s interest in opposing forced disclosure of such information as ”minimal” seems inherently applicable beyond the problem of deception.
In applying Zauderer, we ﬁrst must assess the adequacy of the interest motivating the country-of-origin labeling scheme. AMI argues
that, even assuming Zauderer applies here, the government has utterly failed to show an adequate interest in making country-of-origin

$ 05)&3 4063$&4 0' "%7&35*4*/( -"8

information available to consumers. AMI disparages the government’s interest as simply being that of satisfying consumers’ ”idle
curiosity.” But here we think several aspects of the government’s interest in country-of-origin labeling for food combine to make the interest substantial: the context and long history of country-of-origin
disclosures to enable consumers to choose American-made products;
the demonstrated consumer interest in extending country-of-origin
labeling to food products; and the individual health concerns and
market impacts that can arise in the event of a food-borne illness outbreak.
Supporting members of Congress identiﬁed the statute’s purpose
as enabling customers to make informed choices based on characteristics of the products they wished to purchase, including United States
supervision of the entire production process for health and hygiene.
Some expressed a belief that with information about meat’s national
origin, many would choose American meat on the basis of a belief
that it would in truth be be er. Even though the production steps
abroad for food imported into the United States are to a degree subject to U.S. government monitoring, it seems reasonable for Congress
to anticipate that many consumers may prefer food that had been continuously under a particular government’s direct scrutiny.
Some legislators also expressed the belief that people would have
a special concern about the geographical origins of what they eat.
This is manifest in anecdotes appearing in the legislative record, such
as the collapse of the cantaloupe market when some imported cantaloupes proved to be contaminated and consumers were unable to
determine whether the melons on the shelves had come from that
country. Of course the anecdote more broadly suggests the utility of
these disclosures in the event of any disease outbreak known to have
a speciﬁc country of origin, foreign or domestic.
The record is further bolstered by surveys the Agricultural Marketing Service reviewed, such as one indicating that 71-73 percent of
consumers would be willing to pay for country-of-origin information
about their food. The AMS quite properly noted the vulnerabilities in
such data. Most obvious is the point that consumers tend to overstate
their willingness to pay; after all, the data sound possibly useful, and
giving a ”Yes” answer on the survey doesn’t cost a nickel. But such
studies, combined with the many favorable comments the agency received during all of its rulemakings, reinforce the historical basis for
treating such information as valuable.
The self-evident tendency of a disclosure mandate to assure that
recipients get the mandated information may in part explain why,
where that is the goal, many such mandates have persisted for
decades without anyone questioning their constitutionality. In this
long-lived group have been not only country-of-origin labels but also

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many other routine disclosure mandates about product a ributes, including, for instance, disclosures of ﬁber content,, care instructions
for clothing items, , and listing of ingredients .
AMI does not contest that country-of-origin labeling qualiﬁes as
factual, and the facts conveyed are directly informative of intrinsic
characteristics of the product AMI is selling. As to whether it is ”controversial,” AMI objected to the word ”slaughter” in its reply brief.
Though it seems a plain, blunt word for a plain, blunt action, we can
understand a claim that ”slaughter,” used on a product of any origin, might convey a certain innuendo. But we need not address such
a claim because the 2013 rule allows retailers to use the term ”harvested” instead, and AMI has posed no objection to that. And AMI
does not disagree with the truth of the facts required to be disclosed,
so there is no claim that they are controversial in that sense.
We also do not understand country-of-origin labeling to be controversial in the sense that it communicates a message that is controversial for some reason other than dispute about simple factual accuracy.
Leaving aside the possibility that some required factual disclosures
could be so one-sided or incomplete that they would not qualify as
”factual and uncontroversial,” country-of-origin facts are not of that
type. AMI does not suggest anything controversial about the message that its members are required to express.
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For the last ﬁfteen years, the Democratic Republic of the Congo has
endured war and humanitarian catastrophe. Millions have perished,
mostly civilians who died of starvation and disease. Communities
have been displaced, rape is a weapon, and human rights violations
are widespread.
Armed groups ﬁghting the war ﬁnance their operations by exploiting the regional trade in several kinds of minerals. Those minerals—
gold, tantalum, tin, and tungsten1—are extracted from technologically primitive mining sites in the remote eastern Congo. They are
sold at regional trading houses, smelted nearby or abroad, and ultimately used to manufacture many diﬀerent products. Armed groups
proﬁt by extorting, and in some cases directly managing, the minimally regulated mining operations.
In 2010, Congress devised a response to the Congo war. Section
1502 of the Dodd–Frank Wall Street Reform and Consumer Protection Act,, requires the Securities and Exchange Commission – the
agency normally charged with policing America’s ﬁnancial markets
– to issue regulations requiring ﬁrms using “conﬂict minerals” to investigate and disclose the origin of those minerals. [Securities issuers
must state in reports to the SEC and on their websites which of their

$ 05)&3 4063$&4 0' "%7&35*4*/( -"8

products have “not been found to be ‘DRC conﬂict free.’”]
[The panel struck down the rule as constituting compelled speech.
Then American Meat Institute overruled NAM I. The panel issued the
following opinion on rehearing.]
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”Unncontroversial,” as a legal test, must mean something diﬀerent
than “purely factual.” Perhaps the distinction is between fact and
opinion. But that line is often blurred, and it is far from clear that
all opinions are controversial. Is Einstein’s General Theory of Relativity fact or opinion, and should it be regarded as controversial? If
the government required labels on all internal combustion engines
stating that “USE OF THIS PRODUCT CONTRIBUTES TO GLOBAL
WARMING” would that be fact or opinion? It is easy to convert many
statements of opinion into assertions of fact simply by removing the
words “in my opinion” or removing “in the opinion of many scientists” or removing “in the opinion of many experts.”
We agree with NAM that the statutory deﬁnition of “conﬂict free”
cannot save this law. As NAM forcefully puts it, “if the law were otherwise, there would be no end to the government’s ability to skew
public debate by forcing companies to use the government’s preferred language. For instance, companies could be compelled to state
that their products are not ‘environmentally sustainable’ or ‘fair trade’
if the government provided ‘factual’ deﬁnitions of those slogans—
even if the companies vehemently disagreed that their [products]
were ‘unsustainable’ or ‘unfair.’ ”
In our initial opinion we stated that the description at issue –
whether a product is “conﬂict free” or “not conﬂict free” – was hardly
“factual and non-ideological.” We put it this way:
Products and minerals do not ﬁght conﬂicts. The label
”[not] conﬂict free” is a metaphor that conveys moral responsibility for the Congo war. It requires an issuer to
tell consumers that its products are ethically tainted, even
if they only indirectly ﬁnance armed groups. An issuer,
including an issuer who condemns the atrocities of the
Congo war in the strongest terms, may disagree with that
assessment of its moral responsibility. And it may convey
that message through silence. By compelling an issuer to
confess blood on its hands, the statute interferes with that
exercise of the freedom of speech under the First Amendment.
We see no reason to change our analysis in this respect. And we continue to agree with NAM that “requiring a company to publicly con-

$)"15&3  "%7&35*4*/(

demn itself is undoubtedly a more ‘eﬀective’ way for the government
to stigmatize and shape behavior than for the government to have to
convey its views itself, but that makes the requirement more constitutionally oﬀensive, not less so.”

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The National Advertising Division of the Advertising Self-Regulatory
Council runs an ADR system, based entirely on wri en ﬁlings and
with decisions within 60 days. Participation is voluntary, and the
NAD takes no enforcement actions by itself. Given its subject-ma er
expertise, the FTC tends to accord the NAD’s decisions substantial
deference, even though they are not by themselves binding. Another
arm of the ASRC, the Children’s Advertising Review Unit, operates
a similar program under standards that are ”deliberately subjective,
going beyond the issues of truthfulness and accuracy to take into account the uniquely impressionable and vulnerable child audience.”
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This is the third compliance report stemming from a challenge in
which print, packaging and point of sale advertising claims made
by Mead Johnson Nutritionals for its Enfamil LIPIL infant formula
were challenged by Abbo Nutrition, a manufacturer of a competing
infant formula. The following claims were representative are representative of those at issue: “Enfamil® LIPIL® is the only infant formula shown in independent clinical studies to improve baby’s brain
and eye development.* [*vs. same routine formula without DHA and
ARA. Studied to 18 months.]”; “Enfamil LIPIL* improves mental development by 7 points vs. same formula without LIPIL [† vs. same
routine formula without LIPIL. Studied at 18 months for brain and
12 months for eye. Longer term impact not measured.]”; “shown in
independent clinical studies to improve baby’s brain and eye development” versus unsupplemented Enfamil.”
B
In its underlying decision, NAD recommended that the advertiser
either discontinue its “improve brain and eye development” claims—
or modify them by making clear that (a) the advertised improvements are limited to only the ﬁrst 18 months of an infant’s life; and
(b) the touted “improve[ment]” is with respect to a discontinued, or
prior, version of the product. With respect to the consumer-directed
coupon featuring a comparison to breastfed babies, NAD recommended that the advertiser either discontinue the advertising, or
modify it by making clear that the advertised improvement is not

$ 05)&3 4063$&4 0' "%7&35*4*/( -"8

shown at four years, and that the comparison is with respect to the
now-discontinued Enfamil product. NAD further recommended that
the advertiser make clear that Enfamil Lipil has not been shown to
outperform Similac Advance with respect to mental and/or visual development. With respect to the consumer-directed coupon that features a chart that invites consumers to “compare the diﬀerences” between Enfamil Lipil and Similac Advance, NAD recommended that
the advertiser either discontinue this comparative advertisement, or
modify it by removing the comparison to Similac Advance.
With respect to the advertiser’s compositional comparison to median levels of DHA and ARA in breast milk, NAD determined that
there was no basis for it to examine this claim anew. With respect
to the health-care provider-directed claims, NAD recommended that
the advertiser discontinue side-by-side IQ graphs, and modify the
materials to ensure that they no longer convey the unsupported message that Enfamil Lipil outperforms Similac with respect to the formulas’ eﬀects on IQ. NAD further recommended that the advertiser
discontinue any express or implied claims that based on the fouryear data, Enfamil Lipil makes a “diﬀerence” (as compared to unsupplemented Enfamil.) Likewise, NAD recommended that the advertiser no longer claim that “new 4-year follow-up data” shows an
“impact” of Enfamil Lipil on cognitive development. NAD did ﬁnd,
however, that the advertiser had a reasonable basis to claim a similar
performance to breastfed babies at four years. Finally, NAD noted
that nothing in this decision prevents the advertiser from presenting
health care professionals with clinical results from the Birch four-year
data, provided that it is done in an accurate and non-misleading manner.
In June 2008, the challenger contacted the NAD to raise concerns
about advertising which it believed did not comply with NAD’s underlying decision. The advertiser explained that all of the website
materials submi ed by the challenger were printed prior to NAD’s
decision and that it had already begun modifying this page prior to
the receipt of the challenger’s compliance inquiry. The advertiser notiﬁed NAD that the claim, as revised, would now read: “The only infant formula clinically shown to promote baby’s brain and eye development*” “(*Versus prior formulation of same product without DHA
and ARA, with improvement demonstrated to 18 months.”) The advertiser further noted that it is in the process of comprehensively reviewing its entire website to ensure all relevant language has been
modiﬁed and that all new materials would comply with NAD’s decision. Based on the advertiser’s assurances, NAD closed its compliance review.
In November 2008, the challenger again contacted NAD about
concerns it had about advertising it alleged to be noncompliant with

$)"15&3  "%7&35*4*/(

NAD’s decision. The advertiser informed NAD that the professional
advertisement in question was distributed in error and will no longer
be disseminated. The advertiser noted that it has taken substantial
steps to comply with NAD’s decision. While expressing its deep disappointment that noncompliant advertising had continued to be disseminated, NAD noted that the current advertisements comply with
NAD’s recommendations but cautioned that any noncompliant advertisements that are brought to its a ention after the issuance of the
instant decision will result in an automatic referral to the appropriate
government agency for possible law enforcement action pursuant to
section 4.1(B) of the NAD/NARB Procedures.
In February 2009, the challenger contacted NAD with concerns
it had about advertising for Enfamil LIPIL which it believed contravened NAD’s decision.
D
NAD is incredulous that after two compliance proceedings, with the
second compliance proceeding making explicit that any noncompliant advertising would result in a referral to the appropriate government agency, that the advertiser would disseminate advertising that
clearly does not comply with NAD’s decision. For example, in its
underlying decision, NAD noted that with respect to the consumerdirected coupon that features a chart that invites consumers to “compare the diﬀerences” between Enfamil LIPIL and Similac Advance,
NAD recommended that the advertiser either discontinue this comparative advertisement or modify it by removing the comparison to
Similac Advance. In one of the current advertisements, the advertiser features the claim “Enfamil LIPIL is now clinically shown to support cognitive development* and immune balance†” next to which is
a chart with one column for Similac Advance and one for Enfamil
LIPIL and has a check mark for Enfamil Lipil and “NO” for Similac for, among other things, “Only Enfamil LIPIL has been shown in
published independent clinical studies to improve BRAIN and EYE
development*” The faint asterisks refer to a inconspicuous disclosure
to the left of the claim and chart which states “vs. the prior version of
the product without DHA and ARA with improvement shown to 18
months.” This advertisement does not comply with NAD’s decision,
and NAD need look no further to determine noncompliance. The selfregulatory process cannot function properly when advertisers state,
on the one hand, that they respect the process and will comply with
NAD’s decision, and then do the opposite. Accordingly, NAD has no
choice but to refer this ma er to the appropriate government agency
for possible law enforcement action pursuant to section 4.1(B) of the
NAD/NARB Procedures.

$ 05)&3 4063$&4 0' "%7&35*4*/( -"8

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The Children’s Advertising Review Unit (CARU) of the Council of
Be er Business Bureaus, Inc., has recommended that Lego Systems
Inc., maker of the Lego Racers: Crash Collection line of playsets, modify advertising to make it clear to the child audience that the toys sold
do not make sounds.
Broadcast advertising for Lego Racers: Crash Collection came
to the a ention of CARU, the children’s advertising industry’s selfregulatory forum, through CARU’s ongoing monitoring eﬀorts.
Commercials for the playsets feature two children playing with
LEGO pull-back motor racers. A voice-over states that the toys are
“built to crash.” When the cars hit each other, loud crashing noises
are heard and a voice-over screams “CRASH” in a long, drawn-out
manner while a bubble visual of the word “CRASH” appears on the
screen in large, cartoon-like le ers. The commercial features numerous loud crash scenes, with the cars hi ing each other and various
other objects. On impact, in addition to the sounds synchronized
with the collision and the video and audio supers, special eﬀects dramatize the cars breaking apart and pieces ﬂying oﬀ in slow-motion.
CARU was concerned that the synchronization of the “crashing”
sound eﬀects accompanying the colliding of the cars could potentially mislead children into believing that the toys were equipped
with sound-eﬀects equipment. CARU was also concerned that, because the toys do not have any sound capabilities, the commercials would create unrealistic performance expectations that children
would not be able to duplicate.

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In order to avoid potentially misleading the child audience,
CARU recommended that the advertiser modify the commercial.
CARU further recommended that the advertiser include scenes of
real action play without special eﬀects, which would serve to demonstrate how much noise the toys do make.
The company, in its advertiser’s statement, said that it is a strong
supporter of CARU and “appreciates the opportunity to participate
in the self-regulatory process.”
“LSI will continue to remain sensitive to CARU’s concerns and do
its best to follow the Guidelines in future advertisements. LSI does
not plan to appeal this decision,” the company said.

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Find as many of the following as you can in the wild:
• An advertisement containing non-actionable puﬀery
• A literally false advertisement
• An advertisement that is not literally false but is misleading
• An establishment claim (bonus point if it is unsubstantiated)
• A registered certiﬁcation mark
• A regulatory certiﬁcation mark
• A deceptive trademark (not necessarily registered)
• A food label regulated by the FDA under the FDCA, together
with a citation to the speciﬁc section in the Code of Federal Regulations that governs the label. Highlight the portion of the label
that is required by the regulation you cite.
• An endorsement on social media containing an advertising disclosure.
• An endorsement on social media not containing an advertising
disclosure, but which should have had one
• An advertisement directed at children that is misleading under
the standards applied by CARU
You are allowed one entry per category. All your submissions should
be examples you are comfortable having shown in class.
You get one point for each one you ﬁnd on the Internet, and two
points for each one you ﬁnd oﬄine (submit a photo). You get a bonus
point for each of your entries that is unique, i.e., no one else in the
class submi ed it. Whoever gets the highest score will win bragging
rights and a prize of negligible value.
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One body of intellectual property law – the right of publicity –
squarely protects people’s names, appearances, and other aspects of
their personal identities. The policies underlying the right of publicity overlap substantially with those of copyright, trademark, and
false advertising. It is helpful, therefore, to compare how these other
bodies of law deal with personal identity. In addition, the law of
naming and name changes sheds light both on right of publicity and
trademark, and the tort law of defamation also bears on the issues.

" 3JHIU PG 1VCMJDJUZ
Two closely related theories of the right of publicity should be familiar. One is that it facilitates contracting over a type of information
– people’s fame, talent, and ability to make endorsements – that has
signiﬁcant commercial value. The other is that it incentivizes the creation of these valuable personas in the ﬁrst place. But the right of
publicity is also closely linked to privacy. Historically, it grew out
of privacy torts, and it helps to protect people’s interest in not being
involuntarily exposed to the public eye.
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According to blackle er law, the right of publicity provides persons
with a cause of action against anyone who makes a commercial use of
their name, image, likeness, or other indicia of identity. This account,
with slight variations in language, is recited by countless courts, but
a moment’s reﬂection demonstrates that it is not true.
Imagine what would happen if people really could recover just
because their names are being exploited commercially. Every credit
reporting agency would shu er instantly. Every celebrity gossip
magazine would be drowned in liability. And every company that
sells customer lists to direct mailers and telemarketers would have to

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run for the hills. The right of publicity, by its own blackle er terms,
should stop all these commercial uses of identity. Yet it does not. One
thing is certain: the right of publicity is not what it says it is.
Unlike most legal doctrines, the right of publicity is currently deﬁned negatively. That is, the law lacks a good positive description of
what the right of publicity is. Instead, the cases are constantly working on the question of what the right of publicity is not. Much of
the theoretical and practical trouble with the right of publicity can be
traced to this doctrinal inversion.
The scope of the right of publicity is mostly deﬁned extradoctrinally. That is, instead of being self-limiting, the right of publicity, by its own le er, expands far beyond its permissible scope. It
is up to other doctrines from other ﬁelds – notably the First Amendment and preemption by federal copyright law – to lop oﬀ the right of
publicity’s doctrinal excess and force it back within intuitive limits.
What courts and commentators have been calling “the right of
publicity” is really multiple rights: the endorsement right, the merchandizing entitlement, and the right against virtual impressment.
The endorsement right is the right to not be featured in advertising in
a way that implies an endorsement of a commercial enterprise – featuring a celebrity wearing a brand of shoes in an ad for those shoes
would infringe. The merchandising entitlement provides a right to not
have one’s name, image, or identity marketed on coﬀee mugs, lunch
boxes, or other merchandise. And the right against virtual impressment
– which can be perceived only in a limited number of jurisdictions –
protects one’s image and identity from being employed, marione elike, as a virtual actor in a ﬁlm or video game.

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Who has publicity rights? Conceptually, the answer depends on the
reason(s) to recognize them. If publicity rights are privacy rights,
then arguably ordinary citizens have them but celebrities who have
voluntarily stepped out upon the public stage don’t. But if publicity
rights are property rights, then arguably celebrities have them but ordinary citizens who have done nothing to monetize their identities
don’t. The history of the rise of the right of publicity in the twentieth
century shows courts wrestling with both kinds of theories.
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The diﬀerent paths taken by New York (after Roberson) and Georgia
(in Pavesich) illustrate the two typical routes to the right of publicity
in the states that recognize it: by statute and by common law, respectively. (Some states, like California, have both.) Pavesich hints and

" 3*()5 0' 16#-*$*5:

O’Brien conﬁrms that a privacy-focused rationale doesn’t work for
celebrities.
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The complaint alleges that the Franklin Mills Company, one of the
defendants, was engaged in a general milling business and in the
manufacture and sale of ﬂour; that before the commencement of the
action, without the knowledge or consent of plaintiﬀ, defendants,
knowing that they had no right or authority so to do, had obtained,
made, printed, sold, and circulated about 25,000 lithographic prints,
photographs, and likenesses of plaintiﬀ, made in a manner particularly set up in the complaint; that upon the paper upon which the
likenesses were printed and above the portrait there were printed,
in large, plain le ers, the words, ‘Flour of the Family,’ and below
the portrait, in large capital le ers, ‘Franklin Mills Flour,’ and in the
lower right-hand corner, in smaller capital le ers, ‘Rochester Folding
Box Co., Rochester, N. Y.’; that upon the same sheet were other advertisements of the ﬂour of the Franklin Mills Company; that those
25,000 likenesses of the plaintiﬀ thus ornamented have been conspicuously posted and displayed in stores, warehouses, saloons, and other
public places; that they have been recognized by friends of the plaintiﬀ and other people, with the result that plaintiﬀ has been greatly humiliated by the scoﬀs and jeers of persons who have recognized her
face and picture on this advertisement, and her good name has been
a acked, causing her great distress and suﬀering, both in body and
mind; that she was made sick, and suﬀered a severe nervous shock,
was conﬁned to her bed, and compelled to employ a physician, because of these facts; that defendants had continued to print, make,
use, sell, and circulate the said lithographs, and that by reason of the
foregoing facts plaintiﬀ had suﬀered damages in the sum of $15,000.
The complaint prays that defendants be enjoined from making, printing, publishing, circulating, or using in any manner any likenesses
of plaintiﬀ in any form whatever; for further relief (which it is not
necessary to consider here); and for damages.
It will be observed that there is no complaint made that plaintiﬀ
was libeled by this publication of her portrait. The likeness is said to
be a very good one, and one that her friends and acquaintances were
able to recognize. Indeed, her grievance is that a good portrait of her,
and therefore one easily recognized, has been used to a ract a ention toward the paper upon which defendant mill company’s advertisements appear. Such publicity, which some ﬁnd agreeable, is to
plaintiﬀ very distasteful, and thus, because of defendants’ impertinence in using her picture, without her consent, for their own business purposes, she has been caused to suﬀer mental distress where

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others would have appreciated the compliment to their beauty implied in the selection of the picture for such purposes; but, as it is
distasteful to her, she seeks the aid of the courts to enjoin a further
circulation of the lithographic prints containing her portrait made as
alleged in the complaint, and, as an incident thereto, to reimburse her
for the damages to her feelings, which the complaint ﬁxes at the sum
of $15,000. There is no precedent for such an action to be found in the
decisions of this court.
Nevertheless the Appellate Division reached the conclusion that
plaintiﬀ had a good cause of action against defendants, in that defendants had invaded what is called a ‘right of privacy’; in other words,
the right to be let alone. Mention of such a right is not to be found
in Blackstone, Kent, or any other of the great commentators upon
the law; nor, so far as the learning of counsel or the courts in this
case have been able to discover, does its existence seem to have been
asserted prior to about the year 1890, when it was presented with
a ractiveness, and no inconsiderable ability, in the Harvard Law Review in an article entitled ‘Rights of a Citizen to His Reputation.’ The
so-called ‘right of privacy’ is, as the phrase suggests, founded upon
the claim that a man has the right to pass through this world, if he
wills, without having his picture published, his business enterprises
discussed, his successful experiments wri en up for the beneﬁt of
others, or his eccentricities commented upon either in handbills, circulars, catalogues, periodicals, or newspapers; and, necessarily, that
the things which may not be wri en and published of him must not
be spoken of him by his neighbors, whether the comment be favorable or otherwise. While most persons would much prefer to have
a good likeness of themselves appear in a responsible periodical or
leading newspaper rather than upon an advertising card or sheet, the
doctrine which the courts are asked to create for this case would apply as well to the one publication as to the other, for the principle
which a court of equity is asked to assert in support of a recovery in
this action is that the right of privacy exists and is enforceable in equity, and that the publication of that which purports to be a portrait
of another person, even if obtained upon the street by an impertinent
individual with a camera, will be restrained in equity on the ground
that an individual has the right to prevent his features from becoming known to those outside of his circle of friends and acquaintances.
If such a principle be incorporated into the body of the law through
the instrumentality of a court of equity, the a empts to logically apply the principle will necessarily result not only in a vast amount of
litigation, but in litigation bordering upon the absurd, for the right
of privacy, once established as a legal doctrine, cannot be conﬁned
to the restraint of the publication of a likeness, but must necessarily
embrace as well the publication of a word picture, a comment upon

" 3*()5 0' 16#-*$*5:

one’s looks, conduct, domestic relations or habits. And, were the
right of privacy once legally asserted, it would necessarily be held
to include the same things if spoken instead of printed, for one, as
well as the other, invades the right to be absolutely let alone. An insult would certainly be in violation of such a right, and with many
persons would more seriously wound the feelings than would the
publication of their picture. And so we might add to the list of things
that are spoken and done day by day which seriously oﬀend the sensibilities of good people to which the principle which the plaintiﬀ seeks
to have imbedded in the doctrine of the law would seem to apply. I
have gone only far enough to barely suggest the vast ﬁeld of litigation which would necessarily be opened up should this court hold
that privacy exists as a legal right enforceable in equity by injunction,
and by damages where they seem necessary to give complete relief.
An examination of the authorities leads us to the conclusion that
the so-called ‘right of privacy’ has not as yet found an abiding place
in our jurisprudence, and, as we view it, the doctrine cannot now be
incorporated without doing violence to se led principles of law by
which the profession and the public have long been guided. I do not
say that, even under the existing law, in every case of the character
of the one before us, or, indeed, in this case, a party whose likeness
is circulated against his will is without remedy. By section 242 of
the Penal Code any malicious publication by picture, eﬃgy, or sign,
which exposes a person to contempt, ridicule, or obloquy, is a libel,
and it would constitute such at common law. There are many articles, especially of medicine, whose character is such that using the
picture of a person, particularly that of a woman, in connection with
the advertisement of those articles, might justly be found by a jury to
cast ridicule or obloquy on the person whose picture was thus published. The manner or posture in which the person is portrayed might
readily have a like eﬀect. In such cases both a civil action and a criminal prosecution could be maintained. But there is no allegation in
the complaint before us that this was the tendency of the publication
complained of, and the absence of such an allegation is fatal to the
maintenance of the action, treating it as one of libel.
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Any person whose name, portrait, picture or voice is used within this
state for advertising purposes or for the purposes of trade without the
wri en consent ﬁrst obtained as above provided may maintain an
equitable action in the supreme court of this state against the person,
ﬁrm or corporation so using his name, portrait, picture or voice, to
prevent and restrain the use thereof; and may also sue and recover

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damages for any injuries sustained by reason of such use.

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Paolo Pavesich brought an action against the New England Mutual Life Insurance Company, a nonresident corporation, Thomas B.
Lumpkin, its general agent, and J. Q. Adams, a photographer, both
residing in the city of Atlanta. The allegations of the petition were,
in substance, as follows: In an issue of the Atlanta Constitution, a
newspaper published in the city of Atlanta, there appeared a likeness of the plaintiﬀ, which would be easily recognized by his friends
and acquaintances, placed by the side of the likeness of an ill-dressed
and sickly looking person. Above the likeness of the plaintiﬀ were
the words: “Do it now. The man who did.” Above the likeness of
the other person were the words: “Do it while you can. The man
who didn’t.” Below the two pictures were the words: “These two pictures tell their own story.” Under the plaintiﬀ’s picture the following
appeared: “In my healthy and productive period of life I bought insurance in the New England Mutual Life Insurance Co., of Boston,
Mass., and to-day my family is protected and I am drawing an annual dividend on my paid-up policies.” Under the other person’s
picture was a statement to the eﬀect that he had not taken insurance,
and now realized his mistake. The statements were signed, “Thomas
B. Lumpkin, General Agent.” The picture of the plaintiﬀ was taken
from a negative obtained by the defendant Lumpkin, or some one by
him authorized, from the defendant Adams, which was used with
his consent, and with knowledge of the purpose for which it was to
be used. The picture was made from the negative without the plaintiﬀ’s consent, at the instance of the defendant insurance company,
through its agent, Lumpkin. Plaintiﬀ is an artist by profession, and
the publication is peculiarly oﬀensive to him. He never made any
such statement, and has not, and never has had, a policy of life insurance with the defendant company. The publication is malicious, and
tends to bring plaintiﬀ into ridicule before the world, and especially
with his friends and acquaintances, who know that he has no policy
in the defendant company.
The right of privacy has its foundation in the instincts of nature.
It is recognized intuitively, consciousness being the witness that can
be called to establish its existence. Any person whose intellect is in a
normal condition recognizes at once that as to each individual member of society there are ma ers private, and there are ma ers public
so far as the individual is concerned. Each individual as instinctively
resents any encroachment by the public upon his rights which are of a
private nature as he does the withdrawal of those of his rights which
are of a public nature. A right of privacy in ma ers purely private is

" 3*()5 0' 16#-*$*5:

therefore derived from natural law.
All will admit that the individual who desires to live a life of seclusion cannot be compelled, against his consent, to exhibit his person
in any public place, unless such exhibition is demanded by the law of
the land. He may be required to come from his place of seclusion to
perform public duties – to serve as a juror and to testify as a witness,
and the like; but, when the public duty is once performed, if he exercises his liberty to go again into seclusion, no one can deny him the
right. One who desires to live a life of partial seclusion has a right to
choose the times, places, and manner in which and at which he will
submit himself to the public gaze. Subject to the limitation above referred to, the body of a person cannot be put on exhibition at any
time or at any place without his consent. The right of one to exhibit
himself to the public at all proper times, in all proper places, and in a
proper manner is embraced within the right of personal liberty. The
right to withdraw from the public gaze at such times as a person may
see ﬁt, when his presence in public is not demanded by any rule of
law, is also embraced within the right of personal liberty. Publicity
in one instance, and privacy in the other, are each guarantied.
The right of privacy, however, like every other right that rests in
the individual, may be waived. This waiver may be either express
or implied, but the existence of the waiver carries with it the right to
an invasion of privacy only to such an extent as may be legitimately
necessary and proper in dealing with the ma er which has brought
about the waiver. It may be waived for one purpose, and still asserted
for another; it may be waived in behalf of one class, and retained
as against another class; it may be waived as to one individual, and
retained as against all other persons. The most striking illustration of
a waiver is where one either seeks or allows himself to be presented as
a candidate for public oﬃce. He thereby waives any right to restrain
or impede the public in any proper investigation into the conduct
of his private life which may throw light upon his qualiﬁcations for
the oﬃce, or the advisability of imposing upon him the public trust
which the oﬃce carries. But even in this case the waiver does not
extend into those ma ers and transactions of private life which are
wholly foreign, and can throw no light whatever upon the question
as to his competency for the oﬃce, or the propriety of bestowing it
upon him.
Cases may arise where it is diﬃcult to determine on which side of
the line of demarkation which separates the right of privacy from the
well-established rights of others they are to be found; but we have little diﬃculty in arriving at the conclusion that the present case is one
in which it has been established that the right of privacy has been
invaded, and invaded by one who cannot claim exemption under
the constitutional guaranties of freedom of speech and of the press.

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The form and features of the plaintiﬀ are his own. The defendant
insurance company and its agent had no more authority to display
them in public for the purpose of advertising the business in which
they were engaged than they would have had to compel the plaintiﬀ
to place himself upon exhibition for this purpose. Nothing appears
from which it is to be inferred that the plaintiﬀ has waived his right
to determine himself where his picture should be displayed in favor
of the advertising right of the defendants. The mere fact that he is
an artist does not of itself establish a waiver of this right, so that his
picture might be used for advertising purposes. If he displayed in
public his works as an artist, he would, of course, subject his works
and his character as an artist, and possibly his character and conduct
as a man, to such scrutiny and criticism as would be legitimate and
proper to determine whether he was entitled to rank as an artist, and
should be accorded recognition as such by the public. But it is by
no means clear that even this would have authorized the publication
of his picture. The constitutional right to speak and print does not
necessarily carry with it the right to reproduce the form and features
of man. The plaintiﬀ was in no sense a public character, even if a
diﬀerent rule in regard to the publication of one’s picture should be
applied to such characters.
It is now to be determined whether ﬁrst count in the petition set
forth a cause of action for libel. The publication did not mention the
plaintiﬀ’s name, but it did contain a likeness of him that his friends
and acquaintances would readily recognize as his, and the words of
the publication printed under the likeness were put into the mouth
of him whose likeness was published. These words are harmless in
themselves. Standing alone, they contain nothing, and carry no inference of anything that is disgraceful, to be ashamed of, or calculated
to bring one into reproach.
It is alleged that the plaintiﬀ did not have, and never had had, a
policy of insurance with the defendant company, and that this fact
was known to his friends and acquaintances. In the light of these
allegations, the words a ributed to the plaintiﬀ become absolutely
false, and those who are acquainted with the facts, upon reading the
statement, would naturally ask, “For what purpose was this falsehood wri en?” It was either gratuitous, or it was for a consideration;
and, whichever conclusion might be reached, the person to whom
the words were a ributed would become contemptible in the mind
of the reader. He would become at once a self-confessed liar. If he
lied gratuitously, he would receive and merit the contempt of all persons having a correct conception of moral principles. If he lied for a
consideration, he would become odious to every decent individual.
It seems clear to us that a jury could ﬁnd from the facts alleged that
the publication, in the light of the extrinsic facts, was libelous, and

" 3*()5 0' 16#-*$*5:

the plaintiﬀ was entitled to have this question submi ed to the jury.
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Plaintiﬀ, in physique as in prowess as a hurler, a modern David, is
a famous football player. Defendant, in bulk, if not in brass and vulnerability, a modern Goliath, is a distributor of Pabst beer. Plaintiﬀ,
among other honors received during the year 1938, was picked by
Grantland Rice on his Collier’s All American Football Team. Defendant, as a part of its advertising publicity for 1939, following its custom of ge ing out football schedule calendars, placed an order with
the Inland Lithographing Company, to prepare for and furnish to it,
35,000 Pabst 1939 football calendars. The calendars were to carry complete schedules of all major college games; professional schedules;
and pictures of Grantland Rice’s 1938 All American Football Team,
the Inland Company to furnish photographs and necessary releases.
At the top of the calendar, as thus printed and circulated, were
the words ”Pabst Blue Ribbon.” Directly underneath were the words
”Football Calendar, 1939”; to the left of these words was a photograph
of O’Brien in football uniform characteristically poised for the throw;
to the right of them was a glass having on it the words ”Pabst Breweries, Blue Ribbon Export Beer”; and to the right of the glass still, a
bo le of beer, having on it ”Pabst Blue Ribbon Beer.” Directly below
these was the intercollegiate football schedule for 1939, and in the center of the calender were pictures, including that of O’Brien, of Grantland Rice’s All American Football Team for 1938. Near the bo om
was the schedule of the national football league and on the very bottom margin, were the words ”Pabst Famous Blue Ribbon Beer.”
Claiming that this use of his photograph as part of defendant’s
advertising was an invasion of his right of privacy and that he had
been damaged thereby, plaintiﬀ brought this suit.
The defenses were three. The ﬁrst was that if the mere use of one’s
picture in truthful and respectable advertising would be an actionable invasion of privacy in the case of a private person, the use here
was not, as to plaintiﬀ, such an invasion, for as a result of his activities
and prowess in football, his chosen ﬁeld, and their nationwide and
deliberate publicizing with his consent and in his interest, he was no
longer, as to them, a private but a public person, and as to their additional publication he had no right of privacy. The second defense was
that plaintiﬀ, in his own interest and that of Texas Christian University, had posed for and had authorized the publicity department of T.
C. U. to distribute his picture and biographical data to newspapers,
magazines, sports journals and the public generally, and that the particular picture whose use is complained of had been in due course

$)"15&3  1&340/"-*5: 3*()54

obtained from and payment for it had been made to the T. C. U. publicity department. Third, no injury to appellant’s person, property or
reputation had been or could be shown and there was therefore no
basis for a recovery. The testimony fully supported these defenses.
Assuming then, what is by no means clear, that an action for right
of privacy would lie in Texas at the suit of a private person, we think
it clear that the action fails; because plaintiﬀ is not such a person and
the publicity he got was only that which he had been constantly seeking and receiving; and because the use of the photograph was by permission, and there were no statements or representations made in
connection with it, which were or could be either false, erroneous or
damaging to plaintiﬀ.
C

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Haelan shows the courts how courts overcame the conceptual obstacles to developing a property theory of the right of publicity that
works for celebrities. Fraley shows how they turned it around to work
for ordinary people as well.

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The plaintiﬀ maintains that defendant invaded plaintiﬀ’s exclusive
right to use the photographs of leading baseball-players. Probably because the trial judge ruled against plaintiﬀ’s legal contentions, some
of the facts were not too clearly found.
1. So far as we can now tell, there were instances of the following
kind:
(a). The plaintiﬀ, engaged in selling chewing-gum, made a contract with a ballplayer providing that plaintiﬀ for a stated term should
have the exclusive right to use the ball-player’s photograph in connection with the sales of plaintiﬀ’s gum; the ball-player agreed not to
grant any other gum manufacturer a similar right during such term;
the contract gave plaintiﬀ an option to extend the term for a designated period.
(b). Defendant, a rival chewing-gum manufacturer, knowing of
plaintiﬀ’s contract, deliberately induced the ball-player to authorize
defendant, by a contract with defendant, to use the player’s photograph in connection with the sales of defendant’s gum either during
the original or extended term of plaintiﬀ’s contract, and defendant
did so use the photograph.
Defendant argues that, even if such facts are proved, they show no
actionable wrong, for this reason: The contract with plaintiﬀ was no
more than a release by the ballplayer to plaintiﬀ of the liability which,
absent the release, plaintiﬀ would have incurred in using the ball-

" 3*()5 0' 16#-*$*5:

player’s photograph, because such a use, without his consent, would
be an invasion of his right of privacy under Section 50 and Section 51
of the New York Civil Rights Law; this statutory right of privacy is
personal, not assignable; therefore, plaintiﬀ’s contract vested in plaintiﬀ no ”property” right or other legal interest which defendant’s conduct invaded.
Both parties agree, and so do we, that, on the facts here, New York
”law” governs. And we shall assume, for the moment, that, under
the New York decisions, defendant correctly asserts that any such
contract between plaintiﬀ and a ballplayer, in so far as it merely authorized plaintiﬀ to use the player’s photograph, created nothing but
a release of liability. On that basis, were there no more to the contract, plaintiﬀ would have no actionable claim against defendant. But
defendant’s argument neglects the fact that, in the contract, the ballplayer also promised not to give similar releases to others. If defendant, knowing of the contract, deliberately induced the ball-player to
break that promise, defendant behaved tortiously.
2. The foregoing covers the situations where defendant, by itself
or through its agent, induced breaches. But in those instances where
[another company] induced the breach, we have a diﬀerent problem;
and that problem also confronts us in instances where defendant,
with knowledge of plaintiﬀ’s exclusive rights, used a photograph of
a ball-player without his consent during the term of his contract with
plaintiﬀ.
With regard to such situations, we must consider defendant’s contention that none of plaintiﬀ’s contracts created more than a release
of liability, because a man has no legal interest in the publication of
his picture other than his right of privacy, i. e., a personal and nonassignable right not to have his feelings hurt by such a publication.
A majority of this court rejects this contention. We think that, in
addition to and independent of that right of privacy (which in New
York derives from statute), a man has a right in the publicity value
of his photograph, i. e., the right to grant the exclusive privilege of
publishing his picture, and that such a grant may validly be made
”in gross,” i. e., without an accompanying transfer of a business or of
anything else. Whether it be labelled a ”property” right is immaterial;
for here, as often elsewhere, the tag ”property” simply symbolizes the
fact that courts enforce a claim which has pecuniary worth.
This right might be called a ”right of publicity.” For it is common
knowledge that many prominent persons (especially actors and ballplayers), far from having their feelings bruised through public exposure of their likenesses, would feel sorely deprived if they no longer
received money for authorizing advertisements, popularizing their
countenances, displayed in newspapers, magazines, busses, trains
and subways. This right of publicity would usually yield them no

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money unless it could be made the subject of an exclusive grant which
barred any other advertiser from using their pictures.
We think the New York decisions recognize such a right.
Plaintiﬀ, in its capacity as exclusive grantee of a player’s ”right
of publicity,” has a valid claim against defendant if defendant used
that player’s photograph during the term of plaintiﬀ’s grant and with
knowledge of it. It is no defense to such a claim that defendant is
the assignee of a subsequent contract. For the prior grant to plaintiﬀ
renders that subsequent grant invalid during the period of the grant
to plaintiﬀ.
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Haelan’s right of publicity probably gives a famous person more than
the right to assign a protectible interest in his name or picture. By
allowing an individual to make a grant of the publicity value of his
name or photograph, the Haelan case gave protection to persons’ commercial interest in their personality independent of their privacy interest. In so doing, Haelan implied that such commercial interest,
aside from any privacy interest, might justify legal protection of an
individual against unauthorized use of his name or picture. While a
famous person can generally invoke the right of privacy against an
advertiser who appropriates his name or picture without permission,
this right may not always aﬀord adequate protection to his commercial interest in his personality. Celebrities complaining of the unauthorized use of their names or likenesses have sometimes been held,
in eﬀect, to have waived their right of privacy because they sought
and received publicity in the past. And where relief has been granted
under the privacy doctrine it is not clear whether plaintiﬀs have recovered damages for injury to the commercial interest in their popularity. But if the publicity value of a famous person’s name or picture is to be shielded without reference to the right of privacy, these
celebrities will be fully protected: prior publicity will enhance rather
than bar relief. They will be able to obtain an injunction or recover
damages commensurate with the advertising value of their names or
pictures.
And the right of publicity may be extended beyond advertising
cases. A famous person may wish to prevent appropriation of the
public appeal of his personality by a telecast reproduction of his performance, a biography, or by use of his photograph for illustrating
newspapers or magazines. Here, as in the advertising situation, the
right of privacy has sometimes been considered waived because of
plaintiﬀ’s past exposure in the public limelight, but this would not be
a ground for denying relief under the right of publicity. And, where
courts have sometimes held that plaintiﬀ’s privacy interest was out-

" 3*()5 0' 16#-*$*5:

weighed by the public’s interest in news or information, the balance
may now swing in plaintiﬀ’s favor if both his privacy and publicity
interests are considered.
In applying the right of privacy, courts have confused commercial
interests with privacy interests. The result of making one doctrine do
the work of two has been inadequate protection for both these interests in personality. The right of privacy gives inadequate protection
to the commercial interest in one’s personality because courts have
placed upon the right limitations which are appropriate only to the
privacy interest. Similarly, in some states the right of privacy gives inadequate protection even to the privacy interest because courts and
legislatures have implied that commercial beneﬁt to the defendant
is an element of the cause of action. If courts wish to protect both
interests to at least some extent, they should do so under separate
doctrines, so that limitations appropriate to each interest may be imposed. The Haelan case takes a long step in this direction.
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At issue here is one of Facebook’s advertising practices, “Sponsored
Stories,” which appear on a member’s Facebook page, and which typically consist of another member’s name, proﬁle picture, and an assertion that the person “likes” the advertiser, coupled with the advertiser’s logo. Sponsored Stories are generated when a member interacts with the Facebook website or aﬃliated sites in certain ways, such
as by clicking on the “Like” bu on on a company’s Facebook page.
In this putative class action, plaintiﬀs allege that Facebook’s Sponsored Stories violate California’s Right of Publicity Statute, California’s Unfair Competition Law, and the common law doctrine of unjust enrichment.
Here, Plaintiﬀs allege not that they suﬀered mental anguish as a
result of Defendant’s actions, but rather that they suﬀered economic
injury because they were not compensated for Facebook’s commercial use of their names and likenesses in targeted advertisements to
their Facebook Friends. Defendant does not deny that Plaintiﬀs may
assert economic injury, but insists that, because they are not celebrities, they must demonstrate some preexisting commercial value to
their names and likenesses, such as allegations that they previously
received remuneration for the use of their name or likeness, or that
they have ever sought to obtain such remuneration.
First, the Court ﬁnds nothing in the text of the statute or in case
law that supports Defendant’s interpretation of § 3344 as requiring
a plaintiﬀ pleading economic injury to provide proof of preexisting
commercial value and eﬀorts to capitalize on such value in order to
survive a motion to dismiss. In cases involving celebrity plaintiﬀs,

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the mere allegation that the plaintiﬀ was not compensated has been
deemed suﬃcient to satisfy the injury prong. Nor does the Court ﬁnd
any reason to impose a higher pleading standard on non-celebrities
than on celebrities. California courts have clearly held that the statutory right of publicity exists for celebrity and non-celebrity plaintiﬀs
alike.
Although generally, the greater the fame or notoriety of the identity appropriated, the greater will be the extent of the economic injury
suﬀered, the appropriation of the identity of a relatively unknown
person may result in economic injury or may itself create economic
value in what was previously valueless. Thus, courts have long recognized that a person’s name, likeness, or other a ribute of identity can
have commercial value, even if the individual is relatively obscure. In
Downing v. Abercrombie & Fitch, the Ninth Circuit sustained the § 3344
claim of a surfer alleging that a clothing retailer had unlawfully used
a photograph of him surﬁng for advertising purposes. As explained
by the California appellate court, Although the unauthorized appropriation of an obscure plaintiﬀ’s name, voice, signature, photograph,
or likeness would not inﬂict as great an economic injury as would be
suﬀered by a celebrity plaintiﬀ, California’s appropriation statute is
not limited to celebrity plaintiﬀs.
Admi edly, these previous non-celebrity plaintiﬀs have typically
been models, entertainers, or other professionals who have cultivated
some commercially exploitable value through their own endeavors.
Nevertheless, the Court ﬁnds nothing requiring that a plaintiﬀ’s commercially exploitable value be a result of his own talents or eﬀorts in
order to state a claim for damages under § 3344. In a society dominated by reality television shows, YouTube, Twi er, and online social
networking sites, the distinction between a “celebrity” and a “noncelebrity” seems to be an increasingly arbitrary one.
Moreover, even if non-celebrities are subject to a heightened
pleading standard under § 3344, the Court ﬁnds that Plaintiﬀs’ allegations satisfy the requirements for pleading a claim of economic
injury under § 3344. Plaintiﬀs quote Facebook CEO Mark Zuckerberg
stating that “nothing inﬂuences people more than a recommendation
from a trusted friend. A trusted referral inﬂuences people more than
the best broadcast message. A trusted referral is the Holy Grail of
advertising.”
Thus, Plaintiﬀs have alleged that, in the same way that celebrities enjoy commercially exploitable opportunities among consumers
at large, they enjoy commercially exploitable opportunities to advertise among their immediate friends and associates because in essence,
Plaintiﬀs are celebrities – to their friends. While traditionally, advertisers had li le incentive to exploit a non-celebrity’s likeness because
such endorsement would carry li le weight in the economy at large,

" 3*()5 0' 16#-*$*5:

Plaintiﬀs’ allegations suggest that advertisers’ ability to conduct targeted marketing has now made friend endorsements a valuable marketing tool, just as celebrity endorsements have always been so considered.

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Typically the right of publicity covers at least one’s name and likeness.
How much further it extends is more controversial.
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This case centers on the protectibility of the voice of a celebrated
chanteuse from commercial exploitation without her consent. Ford
Motor Company and its advertising agency, Young & Rubicam, Inc.,
in 1985 advertised the Ford Lincoln Mercury with a series of nineteen 30 or 60 second television commercials in what the agency called
“The Yuppie Campaign.” The aim was to make an emotional connection with Yuppies, bringing back memories of when they were in
college. Diﬀerent popular songs of the seventies were sung on each
commercial. The agency tried to get “the original people,” that is,
the singers who had popularized the songs, to sing them. Failing in
that endeavor in ten cases the agency had the songs sung by “sound
alikes.” Be e Midler, the plaintiﬀ and appellant here, was done by a
sound alike.
Midler is a nationally known actress and singer. She won a
Grammy as early as 1973 as the Best New Artist of that year. Records
made by her since then have gone Platinum and Gold. She was
nominated in 1979 for an Academy award for Best Female Actress
in The Rose, in which she portrayed a pop singer. Newsweek in
its June 30, 1986 issue described her as an “outrageously original
singer/comedian.” Time hailed her in its March 2, 1987 issue as “a
legend” and “the most dynamic and poignant singer-actress of her
time.”
When Young & Rubicam was preparing the Yuppie Campaign it
presented the commercial to its client by playing an edited version
of Midler singing “Do You Want To Dance,” taken from the 1973 Midler album, “The Divine Miss M.” After the client accepted the idea
and form of the commercial, the agency contacted Midler’s manager,
Jerry Edelstein. The conversation went as follows: “Hello, I am Craig
Hazen from Young and Rubicam. I am calling you to ﬁnd out if Be e
Midler would be interested in doing ...? Edelstein: “Is it a commercial?” “Yes.” “We are not interested.”
Undeterred, Young & Rubicam sought out Ula Hedwig whom it
knew to have been one of “the Harle es” a backup singer for Mi-

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dler for ten years. Hedwig was told by Young & Rubicam that “they
wanted someone who could sound like Be e Midler’s recording of
[Do You Want To Dance].” She was asked to make a “demo” tape of
the song if she was interested. She made an a capella demo and got
the job.
At the direction of Young & Rubicam, Hedwig then made a record
for the commercial. The Midler record of “Do You Want To Dance”
was ﬁrst played to her. She was told to “sound as much as possible
like the Be e Midler record,” leaving out only a few “aahs” unsuitable for the commercial. Hedwig imitated Midler to the best of her
ability.
After the commercial was aired Midler was told by “a number of
people” that it “sounded exactly” like her record of “Do You Want
To Dance.” Hedwig was told by “many personal friends” that they
thought it was Midler singing the commercial. Ken Fri , a personal
manager in the entertainment business not associated with Midler,
declares by aﬃdavit that he heard the commercial on more than one
occasion and thought Midler was doing the singing.
Neither the name nor the picture of Midler was used in the commercial; Young & Rubicam had a license from the copyright holder
to use the song. At issue in this case is only the protection of Midler’s
voice. The district court described the defendants’ conduct as that
“of the average thief.” They decided, “If we can’t buy it, we’ll take it.”
The court nonetheless believed there was no legal principle preventing imitation of Midler’s voice and so gave summary judgment for
the defendants. Midler appeals.
Nancy Sinatra once sued Goodyear Tire and Rubber Company on
the basis of an advertising campaign by Young & Rubicam featuring
“These Boots Are Made For Walkin’,” a song closely identiﬁed with
her; the female singers of the commercial were alleged to have imitated her voice and style and to have dressed and looked like her.
The basis of Nancy Sinatra’s complaint was unfair competition; she
claimed that the song and the arrangement had acquired a secondary
meaning which, under California law, was protectible. This court
noted that the defendants “had paid a very substantial sum to the
copyright proprietor to obtain the license for the use of the song and
all of its arrangements.” To give Sinatra damages for their use of the
song would clash with federal copyright law. Summary judgment
for the defendants was aﬃrmed. Sinatra v. Goodyear Tire & Rubber
Co. If Midler were claiming a secondary meaning to “Do You Want
To Dance” or seeking to prevent the defendants from using that song,
she would fail like Sinatra. But that is not this case. Midler does not
seek damages for Ford’s use of “Do You Want To Dance,” and thus
her claim is not preempted by federal copyright law. Copyright protects original works of authorship ﬁxed in any tangible medium of

" 3*()5 0' 16#-*$*5:

expression. A voice is not copyrightable. The sounds are not ﬁxed.
What is put forward as protectible here is more personal than any
work of authorship.
Bert Lahr once sued Adell Chemical Co. for selling Lestoil by
means of a commercial in which an imitation of Lahr’s voice accompanied a cartoon of a duck. Lahr alleged that his style of vocal delivery
was distinctive in pitch, accent, inﬂection, and sounds. The First Circuit held that Lahr had stated a cause of action for unfair competition,
that it could be found “that defendant’s conduct saturated plaintiﬀ’s
audience, curtailing his market.” Lahr v. Adell Chemical Co.. That
case is more like this one. But we do not ﬁnd unfair competition here.
One-minute commercials of the sort the defendants put on would not
have saturated Midler’s audience and curtailed her market. Midler
did not do television commercials. The defendants were not in competition with her.
California Civil Code section 3344 is also of no aid to Midler. The
statute aﬀords damages to a person injured by another who uses the
person’s “name, voice, signature, photograph or likeness, in any manner.” The defendants did not use Midler’s name or anything else
whose use is prohibited by the statute. The voice they used was Hedwig’s, not hers. The term “likeness” refers to a visual image not a vocal imitation. The statute, however, does not preclude Midler from
pursuing any cause of action she may have at common law.
The companion statute protecting the use of a deceased person’s
name, voice, signature, photograph or likeness states that the rights it
recognizes are “property rights.” By analogy the common law rights
are also property rights. Appropriation of such common law rights
is a tort in California. In Motschenbacher v. R.J. Reynolds Tobacco Co.,
what the defendants used in their television commercial for Winston
cigare es was a photograph of a famous professional racing driver’s
racing car. The number of the car was changed and a wing-like device known as a “spoiler” was a ached to the car; the car’s features
of white pinpointing, an oval medallion, and solid red coloring were
retained. The driver, Lothar Motschenbacher, was in the car but his
features were not visible. Some persons, viewing the commercial, correctly inferred that the car was his and that he was in the car and was
therefore endorsing the product. The defendants were held to have
invaded a “proprietary interest” of Motschenbacher in his own identity.
Midler’s case is diﬀerent from Motschenbacher’s. He and his car
were physically used by the tobacco company’s ad; he made part
of his living out of giving commercial endorsements. But, as Judge
Koelsch expressed it in Motschenbacher, California will recognize an
injury from “an appropriation of the a ributes of one’s identity.” It
was irrelevant that Motschenbacher could not be identiﬁed in the ad.

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The ad suggested that it was he. The ad did so by emphasizing signs
or symbols associated with him. In the same way the defendants here
used an imitation to convey the impression that Midler was singing
for them.
Why did the defendants ask Midler to sing if her voice was not
of value to them? Why did they studiously acquire the services of a
sound-alike and instruct her to imitate Midler if Midler’s voice was
not of value to them? What they sought was an a ribute of Midler’s
identity. Its value was what the market would have paid for Midler
to have sung the commercial in person.
A voice is more distinctive and more personal than the automobile
accouterments protected in Motschenbacher. A voice is as distinctive
and personal as a face. The human voice is one of the most palpable
ways identity is manifested. We are all aware that a friend is at once
known by a few words on the phone. At a philosophical level it has
been observed that with the sound of a voice, “the other stands before
me.”. A fortiori, these observations hold true of singing, especially
singing by a singer of renown. The singer manifests herself in the
song. To impersonate her voice is to pirate her identity.
We need not and do not go so far as to hold that every imitation
of a voice to advertise merchandise is actionable. We hold only that
when a distinctive voice of a professional singer is widely known and
is deliberately imitated in order to sell a product, the sellers have appropriated what is not theirs and have commi ed a tort in California.
Midler has made a showing, suﬃcient to defeat summary judgment,
that the defendants here for their own proﬁt in selling their product
did appropriate part of her identity.
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Plaintiﬀ Vanna White is the hostess of ”Wheel of Fortune,” one of
the most popular game shows in television history. An estimated
forty million people watch the program daily. Capitalizing on the
fame which her participation in the show has bestowed on her, White
markets her identity to various advertisers.
The dispute in this case arose out of a series of advertisements
prepared for Samsung by Deutsch. The series ran in at least half a
dozen publications with widespread, and in some cases national, circulation. Each of the advertisements in the series followed the same
theme. Each depicted a current item from popular culture and a Samsung electronic product. Each was set in the twenty-ﬁrst century and
conveyed the message that the Samsung product would still be in
use by that time. By hypothesizing outrageous future outcomes for
the cultural items, the ads created humorous eﬀects. For example,
one lampooned current popular notions of an unhealthy diet by de-

" 3*()5 0' 16#-*$*5:

picting a raw steak with the caption: ”Revealed to be health food.
2010 A.D.” Another depicted irreverent ”news”-show host Morton
Downey Jr. in front of an American ﬂag with the caption: ”Presidential candidate. 2008 A.D.”
The advertisement which prompted the current dispute was for
Samsung videocasse e recorders (VCRs). The ad depicted a robot,
dressed in a wig, gown, and jewelry which Deutsch consciously selected to resemble White’s hair and dress. The robot was posed next
to a game board which is instantly recognizable as the Wheel of Fortune game show set, in a stance for which White is famous. The caption of the ad read: ”Longest-running game show. 2012 A.D.” Defendants referred to the ad as the ”Vanna White” ad. Unlike the other
celebrities used in the campaign, White neither consented to the ads
nor was she paid.
Following the circulation of the robot ad, White sued Samsung
and Deutsch in federal district court under: (1) California Civil Code
S 3344; (2) the California common law right of publicity; and (3) S
43(a) of the Lanham Act.
₃₃₄₄
I. S
White ﬁrst argues that the district court erred in rejecting her claim
under section 3344. Section 3344(a) provides, in pertinent part, that
”[a]ny person who knowingly uses another’s name, voice, signature,
photograph, or likeness, in any manner, ... for purposes of advertising or selling, ... without such person’s prior consent ... shall be liable
for any damages sustained by the person or persons injured as a result thereof.”
White argues that the Samsung advertisement used her ”likeness”
in contravention of section 3344. In Midler, this court rejected Be e
Midler’s section 3344 claim concerning a Ford television commercial
in which a Midler ”sound-alike” sang a song which Midler had made
famous. In rejecting Midler’s claim, this court noted that ”the defendants did not use Midler’s name or anything else whose use is prohibited by the statute. The voice they used was another person’s, not
hers. The term ‘likeness’ refers to a visual image not a vocal imitation.”
In this case, Samsung and Deutsch used a robot with mechanical
features, and not, for example, a manikin molded to White’s precise
features. Without deciding for all purposes when a caricature or impressionistic resemblance might become a ”likeness,” we agree with
the district court that the robot at issue here was not White’s ”likeness” within the meaning of section 3344. Accordingly, we aﬃrm
the court’s dismissal of White’s section 3344 claim.
II. R

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In Carson v. Here’s Johnny Portable Toilets, Inc., the defendant had
marketed portable toilets under the brand name ”Here’s Johnny” –
Johnny Carson’s signature ”Tonight Show” introduction – without
Carson’s permission. The sixth circuit held that the right was implicated because the defendant had appropriated Carson’s identity by
usin the phrase ”Here’s Johnny.”
It is not important how the defendant has appropriated the plaintiﬀ’s identity, but whether the defendant has done so. Motschenbacher,
Midler, and Carson teach the impossibility of treating the right of publicity as guarding only against a laundry list of speciﬁc means of appropriating identity. A rule which says that the right of publicity can
be infringed only through the use of nine diﬀerent methods of appropriating identity merely challenges the clever advertising strategist
to come up with the tenth.
Indeed, if we treated the means of appropriation as dispositive in
our analysis of the right of publicity, we would not only weaken the
right but eﬀectively eviscerate it. The right would fail to protect those
plaintiﬀs most in need of its protection. Advertisers use celebrities to
promote their products. The more popular the celebrity, the greater
the number of people who recognize her, and the greater the visibility
for the product. The identities of the most popular celebrities are not
only the most a ractive for advertisers, but also the easiest to evoke
without resorting to obvious means such as name, likeness, or voice.
Consider a hypothetical advertisement which depicts a mechanical robot with male features, an African-American complexion, and
a bald head. The robot is wearing black hightop Air Jordan basketball sneakers, and a red basketball uniform with black trim, baggy
shorts, and the number 23 (though not revealing ”Bulls” or ”Jordan”
le ering). The ad depicts the robot dunking a basketball one-handed,
stiﬀ-armed, legs extended like open scissors, and tongue hanging out.
Now envision that this ad is run on television during professional
basketball games. Considered individually, the robot’s physical attributes, its dress, and its stance tell us li le. Taken together, they
lead to the only conclusion that any sports viewer who has registered
a discernible pulse in the past ﬁve years would reach: the ad is about
Michael Jordan.
Viewed separately, the individual aspects of the advertisement in
the present case say li le. Viewed together, they leave li le doubt
about the celebrity the ad is meant to depict. The female-shaped
robot is wearing a long gown, blond wig, and large jewelry. Vanna
White dresses exactly like this at times, but so do many other women.
The robot is in the process of turning a block le er on a game-board.
Vanna White dresses like this while turning le ers on a game-board
but perhaps similarly a ired Scrabble-playing women do this as well.
The robot is standing on what looks to be the Wheel of Fortune game

" 3*()5 0' 16#-*$*5:

show set. Vanna White dresses like this, turns le ers, and does this
on the Wheel of Fortune game show. She is the only one. Indeed,
defendants themselves referred to their ad as the ”Vanna White” ad.
We are not surprised.
Television and other media create marketable celebrity identity
value. Considerable energy and ingenuity are expended by those
who have achieved celebrity value to exploit it for proﬁt. The law
protects the celebrity’s sole right to exploit this value whether the
celebrity has achieved her fame out of rare ability, dumb luck, or a
combination thereof. We decline Samsung and Deutch’s invitation to
permit the evisceration of the common law right of publicity through
means as facile as those in this case. Because White has alleged facts
showing that Samsung and Deutsch had appropriated her identity,
the district court erred by rejecting, on summary judgment, White’s
common law right of publicity claim.
ALARCON, Circuit Judge, concurring in part, dissenting in part
The common theme in these federal cases is that identifying characteristics unique to the plaintiﬀs were used in a context in which
they were the only information as to the identity of the individual.
The commercial advertisements in each case showed a ributes of
the plaintiﬀ’s identities which made it appear that the plaintiﬀ was
the person identiﬁed in the commercial. No eﬀort was made to dispel the impression that the plaintiﬀs were the source of the personal
a ributes at issue. The commercials aﬃrmatively represented that
the plaintiﬀs were involved. The proper interpretation of Motschenbacher, Midler, and Carson is that where identifying characteristics
unique to a plaintiﬀ are the only information as to the identity of the
person appearing in an ad, a triable issue of fact has been raised as to
whether his or her identity as been appropriated.
The case before this court is distinguishable from the factual showing made in Motschenbacher, Midler, and Carson. It is patently clear to
anyone viewing the commercial advertisement that Vanna White was
not being depicted. No reasonable juror could confuse a metal robot
with Vanna White.
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KOZINSKI, Circuit Judge, dissenting from the order rejecting the suggestion for rehearing en banc
The majority isn’t, in fact, preventing the ”evisceration” of Vanna
White’s existing rights; it’s creating a new and much broader property right, a right unknown in California law. It’s replacing the existing balance between the interests of the celebrity and those of the

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public by a diﬀerent balance, one substantially more favorable to the
celebrity. Instead of having an exclusive right in her name, likeness,
signature or voice, every famous person now has an exclusive right
to anything that reminds the viewer of her. After all, that’s all Samsung did: It used an inanimate object to remind people of White, to
”evoke [her identity].17
Consider how sweeping this new right is. What is it about the ad
that makes people think of White? It’s not the robot’s wig, clothes
or jewelry; there must be ten million blond women (many of them
quasi-famous) who wear dresses and jewelry like White’s. It’s that
the robot is posed near the ”Wheel of Fortune” game board. Remove
the game board from the ad, and no one would think of Vanna White.
But once you include the game board, anybody standing beside it –
a brune e woman, a man wearing women’s clothes, a monkey in a
wig and gown – would evoke White’s image, precisely the way the
robot did. It’s the ”Wheel of Fortune” set, not the robot’s face or dress
or jewelry that evokes White’s image. The panel is giving White an
exclusive right not in what she looks like or who she is, but in what
she does for a living.18
This is entirely the wrong place to strike the balance. Intellectual
property rights aren’t free: They’re imposed at the expense of future
creators and of the public at large. Where would we be if Charles
Lindbergh had an exclusive right in the concept of a heroic solo aviator? If Arthur Conan Doyle had go en a copyright in the idea of the
detective story, or Albert Einstein had patented the theory of relativity? If every author and celebrity had been given the right to keep
people from mocking them or their work? Surely this would have
17
Some viewers might have inferred White was endorsing the product, but that’s
a diﬀerent story. The right of publicity isn’t aimed at or limited to false endorsements; that’s what the Lanham Act is for.
18
Once the right of publicity is extended beyond speciﬁc physical characteristics,
this will become a recurring problem: Outside name, likeness and voice, the things
that most reliably remind the public of celebrities are the actions or roles they’re famous for. A commercial with an astronaut se ing foot on the moon would evoke
the image of Neil Armstrong. Any masked man on horseback would remind people (over a certain age) of Clayton Moore. And any number of songs – ”My Way,”
”Yellow Submarine,” ”Like a Virgin,” ”Beat It,” ”Michael, Row the Boat Ashore,”
to name only a few – instantly evoke an image of the person or group who made
them famous, regardless of who is singing.
See also Carlos V. Lozano, West Loses Lawsuit over Batman TV Commercial, L.A.
Times, Jan. 18, 1990, at B3 (Adam West sues over Batmanlike character in commercial); Nurmi v. Peterson, 10 U.S.P.Q.2d 1775, 1989 WL 407484 (C.D. Cal. 1989) (1950s
TV movie hostess ”Vampira” sues 1980s TV hostess ”Elvira”); text accompanying
notes 7-8 (lawsuits brought by Guy Lombardo, claiming big bands playing at New
Year’s Eve parties remind people of him, and by Uri Geller, claiming psychics who
can bend metal remind people of him). Cf. Motschenbacher, where the claim was
that viewers would think plaintiﬀ was actually in the commercial, and not merely
that the commercial reminded people of him.

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made the world poorer, not richer, culturally as well as economically.
Future Vanna Whites might not get the chance to create their personae, because their employers may fear some celebrity will claim the
persona is too similar to her own.21

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There are no procedural prerequisites to owning a right of publicity,
other perhaps than the vestigial suggestion (rejected in Fraley) that
one must have commercially exploited one’s likeness to sue for its
appropriation. The most interesting procedural issue raised by the
right of publicity is its duration.
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I. I
Defendant General Motors LLC (”GM”) used an image of Albert Einstein in a November 2009 advertisement for its 2010 Terrain vehicle. The ad depicted Einstein’s face digitally pasted onto a muscled
physique, accompanied by the wri en message ”Ideas are sexy too.”
The ad ran in only one issue of People magazine. Plaintiﬀ Hebrew
University of Jerusalem (”HUJ”), which claims to own Einstein’s
right of publicity as a beneﬁciary under Einstein’s will and thus exclusive control of the exploitation of his name and likeness, brought
suit against GM for this unauthorized use of Einstein’s image.
For the reasons set forth below, the Court concludes that the New
Jersey Supreme Court would likely ﬁnd that the postmortem right of
publicity endures for no more than 50 years after death.
IV. A
J. Thomas McCarthy, the leading commentator on the right of publicity, has characterized the determination of the right’s duration as ”by
nature almost arbitrary.” An ”almost arbitrary” ruling is unacceptable, however. The following analysis seeks to avoid one.
B. Status of Existing New Jersey Law Concerning the Duration of the
Postmortem Right of Publicity
21

If Christian Slater, star of ”Heathers,” ”Pump up the Volume,” ”Kuﬀs,” and
”Untamed Heart” – and alleged Jack Nicholson clone – appears in a commercial,
can Nicholson sue? Of 54 stories on LEXIS that talk about Christian Slater, 26 talk
about Slater’s alleged similarities to Nicholson. Apparently it’s his nasal wisecracks
and killer smiles, St. Petersburg Times, Jan. 10, 1992, at 13, his eyebrows, O awa
Citizen, Jan. 10, 1992, at E2, his sneers, Boston Globe, July 26, 1991, at 37, his menacing presence, USA Today, June 26, 1991, at 1D, and his sing-song voice, Ganne
News Service, Aug. 27, 1990 (or, some say, his insinuating drawl, L.A. Times, Aug.
22, 1990, at F5). That’s a whole lot more than White and the robot had in common.

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Only one court in New Jersey, a federal district court, has ever discussed the question of duration, and it did not decide the issue. Estate of Presley The primary question in Presley was whether New Jersey
recognized a descendible, postmortem right of publicity. The court
found that it does, holding that ”Elvis Presley’s right of publicity survived his death and became part of Presley’s estate.” With respect
to the duration of the right of publicity, however, the Presley court
merely stated that the state legislature should determine that question, although it also noted that the federal Copyright Act, which at
that time provided for a copyright term of life plus 50 years, could
provide guidance. No state court in New Jersey has ever addressed
the issue.
Although the New Jersey Legislature has considered at least two
bills that would create a statutory right of publicity, it has thus far
not seen ﬁt to enact such a right. See A.3536, 213th Legis. (N.J. 2008)
(proposing the ”Celebrity Image Protection Act,” with a postmortem
duration of 70 years); A.4476, 212th Legis. (N.J. 2007) (same). There
is nothing stopping HUJ from petitioning the New Jersey Legislature
to pass a statute, with retroactive applicability, that would create a
deﬁnitive postmortem right of publicity with the extended duration
that HUJ seeks here.
C. Aspects of the Right of Publicity that Should Aﬀect Its Duration
1. The Right of Publicity’s Origins in the Right of Privacy

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The right of publicity originally developed within the array of privacy
rights that are considered personal, are based on dignitary interests
and are not descendible.
Now, however, the right of publicity is widely understood, including in New Jersey, to be akin to intellectual property. Additionally, ”[w]ith its emphasis on commercial interests, the right of publicity also secures for plaintiﬀs the commercial value of their fame and
prevents the unjust enrichment of others seeking to appropriate that
value for themselves.”
Notwithstanding the trend toward treating the right of publicity
as a commercial property right, HUJ contends that the right of publicity is a deeply personal right. It is true that one of the rationales
for recognizing a right of publicity remains its protection of an individual’s interest in personal dignity and autonomy. Surely, however,
the personal interest that is at stake becomes a enuated after the personality dies.
A maximum 50-year postmortem duration here would be a reasonable middle ground that is long enough for a deceased celebrity’s
heirs to take advantage of and reap the beneﬁt of the personal aspects
of the right. See Restatement (Third) of Unfair Competition S 46 cmt.

" 3*()5 0' 16#-*$*5:

h (”As a general ma er, however, the dignitary and proprietary interests that support the recognition of a right of publicity become substantially a enuated after death. Post mortem uses are also less likely
to create a false suggestion of endorsement or sponsorship.”). The obviously humorous ad for the 2010 Terrain having been published 55
years or more after Einstein’s death, it is unlikely that any viewer of
it could reasonably infer that Einstein or whoever succeeded to any
right of publicity that Einstein may have had was endorsing the GMC
Terrain.
2. Copyright Law Considerations
HUJ argues that, if the Court must set a limit on the postmortem right
of publicity, it should be coterminus with the current federal Copyright Act, which protects copyrights for 70 years after death. This
Court disagrees. The purpose of the right and its underlying policies do not warrant a mechanical application of the Copyright Act’s
term of life plus 70 years. Indeed, although McCarthy ultimately recognizes that using the federal Copyright Act as a model will ”more
often than not provide the tie-breaking solution to the problem” of
determining the postmortem duration of the right of publicity, , it is
clear that such an analogy is inconsistent with McCarthy’s own views
about the purpose and policies underlying the right. In fact, he would
prefer to limit the extent of the right to 10-20 years after death, despite
noting that other commentators have proposed longer durations, including a life-plus-50-year term modeled after the former version of
the federal Copyright Act.
The current 70-year postmortem term was enacted by the 1998
Copyright Term Extension Act, which increased the length of copyright protection from its former duration of life plus 50 years. HUJ
acquired Einstein’s right of publicity in 1982, at which time the 1976
Copyright Act was in place – with a 50-year postmortem duration.
HUJ’s reasonable expectation at that time, based on the same theory
of analogy to copyright that it advocates today, necessarily would
have been that any rights it acquired would not last more than 50
years after Einstein’s death. Similarly, when the Presley court suggested that the New Jersey Legislature consider the Copyright Act as
a guide in se ing a postmortem duration for the right of publicity,
that statute had only a life-plus-50-year duration. This was approximately one year before HUJ acquired its interest.
There are certain similarities between the goals of copyright and
those of the right of publicity. In a sense, both rights evolve from an
act of creation, whether it is the creation of a ”work” such as a writing
or the creation of a cultivated persona. These acts of creation are the
product of an individual’s choices and self-expression. Some courts,
accordingly, have analogized between copyright and the right of pub-

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licity in the context of balancing the interests protected by those rights
with the interests protected under the First Amendment.
Despite the intersecting similarities between copyright and the
right of publicity, however, that the right of publicity is an outgrowth
of the right of privacy suggests that the term of copyright protection
is far from a perfect precedent for determining the duration of the
right of publicity. First, as HUJ itself has argued, the right of publicity is an intensely personal right meant, to some extent, to protect
against personal and dignitary harms, such as having one’s persona
associated with a product or idea of which he disapproves.
Moreover, the protection of copyright is designed to encourage
the future creation of works of art, whereas the interest sought to be
protected by the right of publicity is usually the byproduct of a diﬀerent and earlier endeavor. The commercial value of a person’s identity often results from success in endeavors such as entertainment or
sports that oﬀer their own substantial rewards. Any additional incentive a ributable to the right of publicity may have only marginal
signiﬁcance. For this reason, it is questionable whether those interests should be protected for as long a period after the death of the
person to whom they belong as are his copyrighted works.
D. Other States’ Laws
1. Common Law

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Looking beyond New Jersey, in none of the ﬁve other states that recognize a common law postmortem right of publicity has any court
addressed the issue of the right’s duration, or even raised it as a question needing to be answered. In none of those cases, however, was
the interval between the death of the person whose right of publicity
was at stake and the date of the alleged infringement of that right 50
years or longer. Indeed, in most of the cases the period was 10 years
or less. See, e.g., , Gignilliat v. Gignilliat, Savi & Be is, LLP (maximum
of 7 years at issue); Jim Henson Productions v. John T. Brady & Assoc.
(maximum of 4 years at issue); Nature’s Way Products, Inc. v. NaturePharma, Inc.; (maximum of 7 years at issue); Presley (permi ing right
of publicity claim brought three years after Elvis’s death).
2. Statutes
The majority of states with statutory rights of publicity limit the
right’s postmortem duration to 50 years or less. Seven states have
statutory rights of publicity that permit the right to endure for up to
50 years.
Six states allow the postmortem right of publicity to reach 60 years
or more.
Of the states whose statutes were enacted prior to the revision

" 3*()5 0' 16#-*$*5:

of the Copyright Act in 1998, only California amended its statute to
reﬂect the extended copyright term.
Thus, of the states with currently enacted statutory rights of publicity, a slight majority limits the duration of that right to 50 years or
less. Although this does not provide overwhelming support for such
a length of time, it does tip the balance slightly in that direction.
E. Public Policy Counsels in Favor of Limiting the Postmortem Right of
Publicity to Not More Than 50 Years
One of the overarching policy concerns in enforcing intellectual property rights is the balance that must be struck between protecting an
individual’s right to reap the beneﬁts of his creative endeavors and
the public’s freedom of expression. This policy concern extends to
the right of publicity.
An open-ended right of publicity, or even a postmortem duration
longer than 50 years, raises considerable First Amendment concerns
and creates a potentially inﬁnite curb on expression. Additionally, an
extended right of publicity may interfere with or decrease the value
of copyrighted works, such as photographs, thereby pi ing one form
of protected property against another.
In addition to First Amendment implications, there is another consideration. In the 57 years since Albert Einstein died, the means of
communication have increased and so has the proclivity of people
to use them frequently. Journalists, academics and politicians frequently issue pronouncements about the impact on society, both in
the United States and around the globe, of the dizzying explosion in
the tools of communication. New devices and platforms have been
developed, including smart phones, personal computers, social networks, email, Twi er, blogs, etc. These technologies have caused a
swift and dramatic, but still developing, impact on ordinary life. It
has become a truism that their speed, their accessibility, and their
popularity appear to have changed social norms regarding privacy
and public expression. But it is not yet clear what this should mean
for the protection of such rights as the right of privacy, the right of expression and the right of publicity. For example, on balance should
the law increasingly protect people’s right of expression, now that
we enjoy so many fora in which to broadcast our views? Similarly,
should the law value the right of privacy less than before, given that
many social media devotees, especially young people, are said to
have li le compunction about revealing intimate information about
themselves? Conversely, should the law aﬀord celebrities greater
rights in controlling publicity about themselves, to protect against
what appears to be a growing tendency of people to not just exalt but
even to exploit the fame and celebrity of others?
The Court does not profess to have answers to these questions,

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but what is clear is that since the full impact of these rapid changes
remains uncertain, it would be imprudent to issue any ruling that
strengthens (or at least lengthens) one right – that of the right of publicity – to the potentially signiﬁcant detriment of these other rights.

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Absent a legislative directive to the contrary, to extend the right
of publicity beyond a half century would be inconsistent with the
Court’s responsibility to balance all of the interests that are at stake.
It also would risk having that right treated as an open-ended heredity
right. See McCarthy (noting the need ”to avoid descendants or heirs
unto the nth generation reaping the commercial rewards of a distant
and famous ancestor, a ‘favored bloodline’ concept out of step with
a society that has abolished hereditary titles” and that at some point,
the interests of free speech outweigh the interests of the heirs and ”the
person’s identity should enter the public domain as a part of history
and folklore”).
A maximum duration of 50 years appropriately reﬂects the balance between meaningful enforcement of the right of publicity after a
famous individual’s death and the public’s interest in free expression.
It aligns with the majority of current state statutes limiting the right’s
postmortem duration. And it approximates the period evidently contemplated by the Presley court – the one court in New Jersey to have
discussed the duration of the right – when it encouraged that state’s
legislature to consider the issue with guidance from the then-current
Copyright Act.
The Ninth Circuit recently noted that Marilyn Monroe considered
herself to belong ”to the Public and to the world.” Milton H. Greene
Archives, Inc. v. Marilyn Monroe LLC. There is no evidence that Albert
Einstein saw himself that way, but he did become the symbol and embodiment of genius. His persona has become thoroughly ingrained
in our cultural heritage. Now, nearly 60 years after his death, that
persona should be freely available to those who seek to appropriate
it as part of their own expression, even in tasteless ads.

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For a use to infringe, the plaintiﬀ must be identiﬁable. This is eﬀectively a similarity test between the defendant’s use and the plaintiﬀ’s
persona. Also, look back at the subject ma er cases and the cases
they discuss, especially Motschenbacher, which illustrate some variations on identiﬁability. Have the courts there conﬂated similarity
with subject ma er? Or is that precisely the point, that once identiﬁability is shown, there is no need for limiting subject-ma er doctrines?

" 3*()5 0' 16#-*$*5:

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Plaintiﬀ is a professional woodcarver from Woodstock, Illinois. Examining the host of exhibits appended to the aﬃdavit which he has
submi ed, it appears that while plaintiﬀ does carve other birds, he
specializes in ducks. Plaintiﬀ’s ducks are of the highest quality. Some
of them are described as “exquisite” and sell for a great deal of money.
Plaintiﬀ’s name is T.J. Hooker.
The defendants produce and broadcast a television series about a
ﬁctional policeman in California. Never having heard of plaintiﬀ or
his celebrated ducks, the defendants happened to name their imaginary policeman “T.J. Hooker.” Not surprisingly, the series is also
entitled “T.J. Hooker.”
Count I of the complaint is based upon the common law tort of appropriation of the plaintiﬀ’s name or likeness for the defendants’ beneﬁt or advantage. n order to state a claim for relief based on this theory, it is vital that some “appropriation” be alleged. See W. Prosser,
Law of Torts § 117 (4th ed. 1971). “Appropriation” in this context
means more than the mere coincidental use of a name that happens
to be the same as that of the plaintiﬀ. Dean Prosser explained this as
follows:
It is the plaintiﬀ’s name as a symbol of his identity that
is involved here, and not as a mere name. Unless there
is some tortious use made of it, there is no such thing as
an exclusive right to the use of a name; and any one can
be given or assume any name he likes. It is only when he
makes use of the name to pirate the plaintiﬀ’s identity for
some advantage of his own, as by impersonation to obtain
credit or secret information, or by posing as the plaintiﬀ’s
wife, or providing a father for a child on a birth certiﬁcate,
that he becomes liable. It is in this sense that “appropriation” must be understood. It is therefore not enough that a
name which is the same as the plaintiﬀ’s is used in a novel,
or the title of a corporation, unless the context or the circumstances indicate that the name is that of the plaintiﬀ....
Nor is there any liability when the plaintiﬀ’s character, occupation, and the general outline of his career, with many
real incidents in his life, are used as the basis for a ﬁgure
in a novel who is still clearly a ﬁctional one.
Similarly, the Restatement of Torts makes it clear that it is not the use
of the plaintiﬀ’s name which constitutes a tort but rather the appropriation of the value of his name and reputation:
It is not enough that the defendant has adopted for himself

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a name that is the same as that of the plaintiﬀ, so long as he
does not pass himself oﬀ as the plaintiﬀ or otherwise seek
to obtain for himself the values or beneﬁts of the plaintiﬀ’s
name or identity. Unless there is such an appropriation,
the defendant is free to call himself by any name he likes,
whether there is only one person or a thousand others of
the same name. Until the value of the name has in some way
been appropriated, there is no tort.

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Examining Count I in light of the foregoing principles, it is apparent
that plaintiﬀ has failed to allege a tortious appropriation of his name.
Plaintiﬀ does allege that “[d]efendants’ ... use of plaintiﬀ’s name appropriates the right of publicity in plaintiﬀ’s celebrated name.” But
this broad, conclusory allegation cannot substitute for allegations of
facts showing that the defendants used the name “T.J. Hooker” as a
means of pirating plaintiﬀ’s identity. By his own admission, the commercial value of plaintiﬀ’s name is in the ﬁeld of wildlife art. Hunters,
sportsmen, and collectors identify plaintiﬀ’s name with ﬁne carvings
of ducks and other fowl. There is nothing in the complaint which can
be construed as an allegation that the defendants adopted the name
“T.J. Hooker” in order to avail themselves of plaintiﬀ’s reputation as
an extraordinary woodcarver.
Plaintiﬀ admits that the ﬁctional television series at issue here is
a “police drama.” It is diﬃcult to imagine a subject further removed
for the life of T.J. Hooker the artisan. The facts and circumstances
alleged by plaintiﬀ provide no basis upon which it can be found that
the name “T.J. Hooker,” as used in the defendants’ ﬁctional television
series, in any way refers to the real T.J. Hooker.
There being no well-pleaded allegation of appropriation of the
value of plaintiﬀ’s name, plaintiﬀ has failed to state a claim upon
which relief can be granted.

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The usual threshold rule is that the right of publicity only applies
to commercial and advertising uses. The caselaw is thin on whether
violations need to be intentional.
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The plaintiﬀ, a professional model, claims that the defendant used
his picture for trade or advertising purposes without his consent, and
thus violated his statutory right to privacy (Civil Rights Law, § 51),
by publishing a picture of him modeling a ”bomber jacket” in a mag-

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azine article containing information regarding the approximate price
of the jacket, the name of the designer, and the names of three stores
where the jacket might be purchased. Plaintiﬀ also claims that the defendant’s conduct violated a common-law right of publicity. The trial
court granted summary judgment to the defendant concluding that
the article reported a newsworthy event of fashion news, and was not
published for trade or advertising purposes. A divided Appellate Division reversed and denied summary judgment ﬁnding that factual
questions were presented as to whether the defendant had used the
plaintiﬀ’s picture for trade purposes and whether the article constituted an advertisement in disguise.
In the summer of 1981 the plaintiﬀ agreed to model for an article
on men’s fall fashions. The photographic session took place on August 11, 1981. The defendant used two of the photographs taken during that session to illustrate an article entitled ”Classic Mixes”, which
appeared under the heading ”Fall Fashions” in the September 7, 1981
issue of New York magazine. Another photograph taken during the
session was used, a week earlier, in the August 31, 1981 issue of New
York magazine, in a column entitled ”Best Bets”. That column, a regular feature in the magazine, contains information about new and unusual products and services available in the metropolitan area. One
of the items included in the August 31 column was a bomber jacket
modeled by the plaintiﬀ. The text above the picture states: ”Yes Giorgio — From Giorgio Armani. Based on his now classic turn on the
bomber jacket, this co on-twill version with ‘fun fur’ collar features
the same cut at a far lower price — about $225. It’ll be available in the
stores next week. — Henry Post Bomber Jacket/Barney’s, Bergdorf
Goodman, Bloomingdale’s.”
It is the plaintiﬀ’s contention that he agreed to model for one article only – the September 7, 1981 article on Fall Fashions – and that
the defendant violated his rights by publishing his photograph in the
August 31 ”Best Bets” column.1 The complaint alleges two causes
of action. First the plaintiﬀ claims that the defendant violated his
civil rights by using his photograph for trade or advertising purposes
without his consent. In his second cause of action the plaintiﬀ claims
that the defendant’s conduct ”invaded plaintiﬀ’s right of publicity”.
1

In his brief to this court the plaintiﬀ claims that the defendant’s use of his photographs in both articles is in issue because the plaintiﬀ did not give his wri en
consent to use them in either article. It appears that the plaintiﬀ was injured at
the photographic session and subsequently refused to sign a release in order to
avoid compromising the unrelated action for physical injuries. Nevertheless, in
his complaint, he only objected to the August 31 ”Best Bets” article. Similarly, in
his papers in opposition to the motion for summary judgment, the plaintiﬀ identiﬁed that publication alone as the basis for the complaint. Thus the only question
properly before us concerns the defendant’s liability for publishing the plaintiﬀ’s
photograph in the ”Best Bets” article of August 31, 1981.

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On each cause of action the plaintiﬀ seeks $350,000 in compensatory
damages and an equal amount in exemplary damages.
The only question is whether the defendant used the plaintiﬀ’s
picture for trade or advertising purposes within the meaning of the
statute when it published his picture in the ”Best Bets” column without his consent.
The statute does not deﬁne trade or advertising purposes. However, the courts have consistently held, from the time of its enactment,
that these terms should not be construed to apply to publications concerning newsworthy events or ma ers of public interest. The exception reﬂects Federal and State constitutional concerns for free dissemination of news and other ma ers of interest to the public, but essentially requires an interpretation of the statute to give eﬀect to the legislative intent. We have recently noted that this exception should be
liberally applied.
The newsworthiness exception applies not only to reports of political happenings and social trends but also to news stories and articles
of consumer interest including developments in the fashion world.
Nevertheless, the plaintiﬀ contends that the photograph in this case
did not depict a newsworthy event because it is a posed picture of
a professional model taken at a photographic session staged by the
defendant. However, the event or ma er of public interest which
the defendant seeks to convey is not the model’s performance, but
the availability of the clothing item displayed. A fashion display is,
of necessity, posed and arranged. Obviously the picture of the jacket
does not lose its newsworthiness simply because the defendant chose
to employ a person to model it in a controlled or contrived se ing.
The fact that the defendant may have included this item in its column solely or primarily to increase the circulation of its magazine
and therefore its proﬁts, as the Appellate Division suggested, does
not mean that the defendant has used the plaintiﬀ’s picture for trade
purposes within the meaning of the statute. Indeed, most publications seek to increase their circulation and also their proﬁts. It is the
content of the article and not the defendant’s motive or primary motive to increase circulation which determines whether it is a newsworthy item, as opposed to a trade usage, under the Civil Rights Law. It
is se led that a picture illustrating an article on a ma er of public interest is not considered used for the purposes of trade or advertising
within the prohibition of the statute unless it has no real relationship
to the article or unless the article is an advertisement in disguise. A
contrary rule would unreasonably and unrealistically limit the exception to nonproﬁt or purely altruistic organizations which are not the
only, or even the primary, source of information concerning newsworthy events and ma ers of public interest.
The plaintiﬀ’s primary contention is that his picture was used for

" 3*()5 0' 16#-*$*5:

advertising purposes within the meaning of the statute. Although
the article was not presented to the public as an advertisement, and
was published in a column generally devoted to newsworthy items,
the plaintiﬀ claims that it is in fact an advertisement in disguise.
The facts on which the plaintiﬀ relies are entirely circumstantial.
He does not claim to have personal knowledge, or direct proof, that
this particular article was actually published by the defendant for
advertisement purposes. The circumstances on which he bases his
claim are (1) the fact that the news column contains information normally included in an advertisement identifying the designer of the
jacket, the approximate price, and three places where the jacket may
be purchased, and (2) the fact that some or all of those stores mentioned in the article had previously advertised products in the magazine. Those circumstances are not enough to raise a jury question as
to whether the article was published for advertising purposes.
The plaintiﬀ does not dispute the fact that the information provided in the article is of legitimate reader interest. Indeed, similar information is frequently provided in reviews or news announcements
of books, movies, shows or other new products including fashions.
Nor does the plaintiﬀ contend that it is uncommon for commercial
publishers to print legitimate news items or reviews concerning products by persons or ﬁrms who have previously advertised in the publisher’s newspaper or magazine. In short, the plaintiﬀ has not presented any facts which would set this particular article apart from
the numerous other legitimate news items concerning new products.
He oﬀers only his speculative belief that in this case the information
on the jacket was included in the defendant’s column for advertising
purposes or perhaps, more vaguely, to promote additional advertising. That, in our view, is insuﬃcient to defeat the defendant’s motion
for summary judgment. The rule exempting articles of public interest from the operation of the Civil Rights Law would, as a practical
ma er, lose much of its force if publishers of articles which are at
least prima facie newsworthy were required to incur the expense of a
trial to meet such general and insubstantial accusations of disguised
advertising. …
Finally, it should be emphasized that we do not mean to suggest
that a publisher who has employed a professional model to pose for
pictures to be used in an article may avoid the agreed fee, or otherwise ignore contractual arrangements, if the model’s pictures are
used to illustrate a newsworthy article or one involving ma ers of
public interest. Although the complaint alludes to an agreement between the parties, the plaintiﬀ has not sought to enforce a contract or
recover damages for a breach. Since the plaintiﬀ chose to frame his
complaint entirely in terms of rights covered by the Civil Rights Law,
which we have concluded is not applicable in this case, the complaint

$)"15&3  1&340/"-*5: 3*()54

should be dismissed.

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 8-  6412  &% 1B
Grover Washington, Jr., a well-known jazz saxophonist, alleges an advertising campaign invaded his right of publicity and contains false
representation of sponsorship. The advertisements at issue were
prepared as part of a “Kool” cigare e campaign and include photographs of an individual whom plaintiﬀ claims looks like him. As
a result of this alleged resemblance, it is asserted that the defendants
have falsely represented to the public that the plaintiﬀ endorses Kools
and have appropriated for themselves the commercial value of plaintiﬀ’s image and likeness. Plaintiﬀ has asserted claims for false representation and d
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