Nuts and Bolts of the America Invents Act - MICHAEL SCARPATI, 3L - IPLS Patent Chair
The Leahy-Smith America Invents Act (AIA) was signed into law on September 16, 2011, and is a major step in the process of harmonizing U.S. patent law with that of the international community. Patent reform has proven to be a contentious topic, as each of the past three Congresses has failed to overhaul the patent system. As such, the AIA represents the first major update to the patent laws since 1952. The Act institutes a variety of changes to the system, including adjustments to the current fee schedule for patent prosecution. The United States Patent and Trademark Office (USPTO) has been granted fee-setting authority to adjust fees so as to recover the cost of its activities. This change adds a 15% surcharge to all patent fees and a new $4,800 option for prioritized examination. These new fees will help to balance out the 75% reduction in fees offered to the new “micro-entity” class applicants. Micro-entities are defined as independent inventors with an income below a specified threshold with at most four non-provisional patent applications. By carving out a niche for micro-entities, Congress hopes to incentivize start-ups and lone inventors to pursue research that might be too radical or revolutionary to garner investment upfront. In terms of substantive modifications, the AIA has implemented several provisions that will better align the U.S. patent system with those of the other major developed countries. The most significant change in this area is the switch from “first-to-invent” to “first-to-file.” Under the existing law, an invention is defined as comprising two steps: conception of the invention, and reduction to practice. If multiple parties were to claim rights to an invention, the USPTO can bring an interference proceeding, wherein the first-to-invent will generally prevail. Proponents of this system highlight the perceived fairness of this method, though in practice determining the date of invention can be a difficult process. Under the AIA, the U.S. will switch to a first-to-file system for applications filed on or after March 16, 2013, phasing out interferences as current patents expire. A new derivation proceeding will ensure that the first to file is actually an inventor. Other changes include the creation of a limited prior user right, which will allow those using an invention more than one year prior to the filing of an application to continue in a limited capacity. In addition, the requirement that an inventor submit the “best mode” for a given application has been greatly reduced; though the requirement remains, it cannot be used to invalidate an issued patent. The nature and scope of patent rights will always be subject to disagreement. Yet the passage of a wide-ranging bill of this type is remarkable, and should be viewed as a step in the right direction, as it updates U.S. patent law to bring it closer in line with international norms.
Monday, March 26, 2012
Aesthetic Functionality in Louboutin v. YSL - JOANNA HAN, 2L - IPLS Fashion Chair
It doesn’t take a fashion guru to recognize Christian Louboutin’s famed black heels, complete with their contrasting red outsoles. These iconic heels are now the subject of an appeal to the Second Circuit, after Judge Victor Marrero found enforcement of the Louboutin mark protecting these famous heels was barred by the aesthetic functionality doctrine. Recently, Christian Louboutin asserted multiple claims against Yves Saint Laurent (“YSL”) relating to YSL’s Cruise 2011 collection, which featured shoes that were entirely red, including the outsoles, that similarly modeled Louboutin’s red outsoles. Judge Victor Marrero of Federal District in Manhattan, who decided Christian Louboutin vs. Yves Saint Laurent, agreed that Louboutin gained “public recognition in the market to have acquired secondary meaning,” but he ultimately held that, “[b]ecause in the fashion industry color serves ornamental and aesthetic functions vital to robust competition, the Court finds that Louboutin is unlikely to be able to prove that its red outsole brand is entitled to trademark protection...” The crux of the case rested on whether the color of the outsoles serves as a non-trademark function other than as a source identifier. The court recognized that once the source identifier becomes “decorative” and “an object of beauty,” then the color serves as an aesthetic function, which is not granted trademark protection. Here, the court denied Louboutin’s preliminary injunction because the red soles are “sexy” and “attracts men to the women who wear [the] shoes,” which serves a non-trademark, aesthetic function. The court was additionally concerned about “significantly hindering competition” if it were to grant Louboutin exclusive use of the color red. It worried that the protection of even this well-known color of red would encourage designers to claim protection for any color, depleting the permissible usage of colors. Louboutin filed an appeal on October 19, 2011, and, thereafter, Tiffany & Co. filed amicus curiae to support Louboutin. Tiffany & Co. has the same interest as Louboutin in protecting a single color—its signature blue-colored boxes. Although there is danger in giving a company protection to monopolize one single color, the court should have considered the applicability of trade dress, or the visual characteristics of a product that signify the source of the product to consumers. Particularly because the YSL shoes were entirely red and not necessarily the “Chinese red” that made Louboutin’s outsoles famous, the court might have considered limiting protection for Louboutin to the specific hue of red and its association with the overall design. However, there are good legal and policy arguments on both sides of the lawsuit, and the decision is sure to affect a large portion of the fashion industry, only heightening the anticipation of the Second Circuit’s decision.
It doesn’t take a fashion guru to recognize Christian Louboutin’s famed black heels, complete with their contrasting red outsoles. These iconic heels are now the subject of an appeal to the Second Circuit, after Judge Victor Marrero found enforcement of the Louboutin mark protecting these famous heels was barred by the aesthetic functionality doctrine. Recently, Christian Louboutin asserted multiple claims against Yves Saint Laurent (“YSL”) relating to YSL’s Cruise 2011 collection, which featured shoes that were entirely red, including the outsoles, that similarly modeled Louboutin’s red outsoles. Judge Victor Marrero of Federal District in Manhattan, who decided Christian Louboutin vs. Yves Saint Laurent, agreed that Louboutin gained “public recognition in the market to have acquired secondary meaning,” but he ultimately held that, “[b]ecause in the fashion industry color serves ornamental and aesthetic functions vital to robust competition, the Court finds that Louboutin is unlikely to be able to prove that its red outsole brand is entitled to trademark protection...” The crux of the case rested on whether the color of the outsoles serves as a non-trademark function other than as a source identifier. The court recognized that once the source identifier becomes “decorative” and “an object of beauty,” then the color serves as an aesthetic function, which is not granted trademark protection. Here, the court denied Louboutin’s preliminary injunction because the red soles are “sexy” and “attracts men to the women who wear [the] shoes,” which serves a non-trademark, aesthetic function. The court was additionally concerned about “significantly hindering competition” if it were to grant Louboutin exclusive use of the color red. It worried that the protection of even this well-known color of red would encourage designers to claim protection for any color, depleting the permissible usage of colors. Louboutin filed an appeal on October 19, 2011, and, thereafter, Tiffany & Co. filed amicus curiae to support Louboutin. Tiffany & Co. has the same interest as Louboutin in protecting a single color—its signature blue-colored boxes. Although there is danger in giving a company protection to monopolize one single color, the court should have considered the applicability of trade dress, or the visual characteristics of a product that signify the source of the product to consumers. Particularly because the YSL shoes were entirely red and not necessarily the “Chinese red” that made Louboutin’s outsoles famous, the court might have considered limiting protection for Louboutin to the specific hue of red and its association with the overall design. However, there are good legal and policy arguments on both sides of the lawsuit, and the decision is sure to affect a large portion of the fashion industry, only heightening the anticipation of the Second Circuit’s decision.
Public Outcry ove the Stop Online Piracy Act - SAM VAN EICHNER, 3L - IPLS Co-President/Managing Editor
The Stop Online Piracy Act (SOPA) has generated outrage amongst lay Internet users and Silicon Valley corporations alike. The proposed legislation was recently introduced in the House of Representatives, alongside the PROTECT IP Act, a similar proposal introduced in the Senate. To understand SOPA, some background on Internet mechanics is helpful. A server is basically a big computer. When an Internet user types in a domain name—www.facebook.com, for example—that domain name must be translated into a numerical IP address, which occurs by way of an Internet Service Provider (ISP) Domain Name System (DNS) server. Those servers communicate with one of a handful of DNS root servers, most of which are within the U.S. These DNS root severs are overseen by the Root Server System Advisory Committee (RSSAC) of the Internet Corporation for Assigned Names and Numbers (ICANN), a non-profit, and the National Telecommunications and Information Administration (NTIA) of the Department of Commerce (DOC). SOPA would permit the Department of Justice (DOJ) to commence actions, either in personam against “a registrant of a domain name used by a foreign infringing site [or] an owner or operator of a foreign infringing site,” or in rem “against a foreign infringing site or the foreign domain name used by such site.” If a court issues ISPs would have to “take technically feasible and reasonable measures to prevent access by its subscribers located within the United States to the foreign infringing site (or portion thereof) that is subject to the order.” ISPs would have to remove foreign infringing sites from their DNS servers, rendering those sites practically inaccessible. SOPA also creates a private cause of action whereby IP owners can sue ad networks and search engines and force them to block access to sites deemed infringing. SOPA stands in stark contrast to the Digital Millennium Copyright Act. That Act created a “safe harbor” for ISPs hosting infringing content, under which ISPs would not be liable provided they had no knowledge of specific instances of infringement. That safe harbor is expressly carved out in the SOPA, but would be rendered irrelevant once a court order brought the infringement to the ISPs attention. More troubling are SOPAs practical implications. Many claim SOPA will stifle innovation. Others predict a decrease in .com and .org registrations, and the loss of U.S. control over the Internet, as the SOPA would stir reactionary efforts to internationalize the DNS. Also a cause for concern is SOPAs enforceability. One could access foreign infringing sites even after they are removed from ISP DNS servers; the DNS server is essentially a phonebook, and just because a number isn’t in the phonebook, that doesn’t mean it can’t be found. As Albert Einstein said, “nothing is more destructive of respect for the government and the law of the land than passing laws which cannot be enforced.”
The Stop Online Piracy Act (SOPA) has generated outrage amongst lay Internet users and Silicon Valley corporations alike. The proposed legislation was recently introduced in the House of Representatives, alongside the PROTECT IP Act, a similar proposal introduced in the Senate. To understand SOPA, some background on Internet mechanics is helpful. A server is basically a big computer. When an Internet user types in a domain name—www.facebook.com, for example—that domain name must be translated into a numerical IP address, which occurs by way of an Internet Service Provider (ISP) Domain Name System (DNS) server. Those servers communicate with one of a handful of DNS root servers, most of which are within the U.S. These DNS root severs are overseen by the Root Server System Advisory Committee (RSSAC) of the Internet Corporation for Assigned Names and Numbers (ICANN), a non-profit, and the National Telecommunications and Information Administration (NTIA) of the Department of Commerce (DOC). SOPA would permit the Department of Justice (DOJ) to commence actions, either in personam against “a registrant of a domain name used by a foreign infringing site [or] an owner or operator of a foreign infringing site,” or in rem “against a foreign infringing site or the foreign domain name used by such site.” If a court issues ISPs would have to “take technically feasible and reasonable measures to prevent access by its subscribers located within the United States to the foreign infringing site (or portion thereof) that is subject to the order.” ISPs would have to remove foreign infringing sites from their DNS servers, rendering those sites practically inaccessible. SOPA also creates a private cause of action whereby IP owners can sue ad networks and search engines and force them to block access to sites deemed infringing. SOPA stands in stark contrast to the Digital Millennium Copyright Act. That Act created a “safe harbor” for ISPs hosting infringing content, under which ISPs would not be liable provided they had no knowledge of specific instances of infringement. That safe harbor is expressly carved out in the SOPA, but would be rendered irrelevant once a court order brought the infringement to the ISPs attention. More troubling are SOPAs practical implications. Many claim SOPA will stifle innovation. Others predict a decrease in .com and .org registrations, and the loss of U.S. control over the Internet, as the SOPA would stir reactionary efforts to internationalize the DNS. Also a cause for concern is SOPAs enforceability. One could access foreign infringing sites even after they are removed from ISP DNS servers; the DNS server is essentially a phonebook, and just because a number isn’t in the phonebook, that doesn’t mean it can’t be found. As Albert Einstein said, “nothing is more destructive of respect for the government and the law of the land than passing laws which cannot be enforced.”
Music Industry Braces For Copyright Termination - LAUREN MACK, 3L - IPLS Copyright Chair
On September 22, 2011, Cardozo Law School and the Intellectual Property Alumni Group co-sponsored an event entitled “Termination of Copyright Transfers and Licenses.” Joseph Peterson, partner at Kilkpatrick Townsend & Stockton LLP, spoke first by explaining the details of the termination right included in the 1976 Copyright Act. Section 304(c) of the Act allows a copyright owner to terminate licenses or transfers made prior to 1978 fifty-six years after the grant. Licenses and transfers made during and after 1978 are governed by Section 203 and may be terminated thirty-five years after the grant is made, meaning that assignments made in 1978 can be terminated in 2013 if the author gives notice at the earliest possible date. The upcoming 2013 terminations have been receiving quite a bit of press lately, partially thanks to a lawsuit filed by the writers of the “Y.M.C.A.,” but Keenan Popwell, director and counsel of business affairs for SESAC and second speaker of the night, pointed out that this is not a new phenomenon and that music publishers have been quietly handling author terminations of rights in musical compositions assigned before 1978 for years. To terminate an assignment or a license, the notice provisions of the applicable statute must be carefully followed and a majority of the creators or their heirs must agree to terminate. This means that if there are two authors, both must agree to terminate, but for works with three authors, only two need to agree. Termination rights are not waivable because the right protects authors with little bargaining power early in their careers. Assignments of copyrights are often made before the work has been exploited, so this “second bite at the apple” allows artists to recapture some profits either by reassigning the copyrights or exploiting the works themselves. An author who creates a work made for hire does not have a termination right because works for hire are not transferred or licensed, but rather manifest in the hirer. A copyrightable work can become a work for hire in one of two ways. It must either be “prepared by an employee within the scope of his or her employment” or the parties can agree in writing that a work “specially ordered or commissioned” will be considered a work for hire. This portion of the Copyright Act has not escaped the notice of the music industry. Recording agreements typically include language stating that any sound recordings made under the agreement are works for hire, and in the event that they are not deemed works for hire, the artist assigns the rights to the sound recordings to the label in perpetuity. So why might this provision fail to solve the copyright termination problem for record labels? Because sound recordings are not listed as a type of work specially ordered or commissioned in the statutory definition of a work for hire, making it unclear whether sound recordings can be considered works for hire absent an employment relationship. But sound recordings were not always missing from that list. Peterson noted that they were briefly included when a technical amendment to the Copyright Act was passed in 1999. Since technical amendments are only supposed to make nonmaterial changes, there was quite the uproar from the musical community after word got out that a House staffer had slipped “sound recordings” into the work for hire definition just before the amendment was passed, causing Congress to later delete the addition and instruct judges to ignore the change. With the ability to contractually render a sound recording a work made for hire, the event moderator suggested that perhaps record labels should go the other route and employ artists to ensure that all works created within the scope of that employment would belong to the label for the full life of the copyright. While an interesting idea, this solution is likely to cause more problems than it solves. With employment comes liability, since employees have the ability to sue for wrongful termination and discrimination, while independent contractors are less protected. Beyond the inevitable lawsuits, benefits and taxes, paying musical artists a salary remains a losing proposition. A popular saying in the music industry is that seven out of ten records fail, two break even, and one turns a profit. At this success rate, paying all ten of those acts enough to live on in order to retain the full rights to their future sound recordings would be an unsustainable business model.
On September 22, 2011, Cardozo Law School and the Intellectual Property Alumni Group co-sponsored an event entitled “Termination of Copyright Transfers and Licenses.” Joseph Peterson, partner at Kilkpatrick Townsend & Stockton LLP, spoke first by explaining the details of the termination right included in the 1976 Copyright Act. Section 304(c) of the Act allows a copyright owner to terminate licenses or transfers made prior to 1978 fifty-six years after the grant. Licenses and transfers made during and after 1978 are governed by Section 203 and may be terminated thirty-five years after the grant is made, meaning that assignments made in 1978 can be terminated in 2013 if the author gives notice at the earliest possible date. The upcoming 2013 terminations have been receiving quite a bit of press lately, partially thanks to a lawsuit filed by the writers of the “Y.M.C.A.,” but Keenan Popwell, director and counsel of business affairs for SESAC and second speaker of the night, pointed out that this is not a new phenomenon and that music publishers have been quietly handling author terminations of rights in musical compositions assigned before 1978 for years. To terminate an assignment or a license, the notice provisions of the applicable statute must be carefully followed and a majority of the creators or their heirs must agree to terminate. This means that if there are two authors, both must agree to terminate, but for works with three authors, only two need to agree. Termination rights are not waivable because the right protects authors with little bargaining power early in their careers. Assignments of copyrights are often made before the work has been exploited, so this “second bite at the apple” allows artists to recapture some profits either by reassigning the copyrights or exploiting the works themselves. An author who creates a work made for hire does not have a termination right because works for hire are not transferred or licensed, but rather manifest in the hirer. A copyrightable work can become a work for hire in one of two ways. It must either be “prepared by an employee within the scope of his or her employment” or the parties can agree in writing that a work “specially ordered or commissioned” will be considered a work for hire. This portion of the Copyright Act has not escaped the notice of the music industry. Recording agreements typically include language stating that any sound recordings made under the agreement are works for hire, and in the event that they are not deemed works for hire, the artist assigns the rights to the sound recordings to the label in perpetuity. So why might this provision fail to solve the copyright termination problem for record labels? Because sound recordings are not listed as a type of work specially ordered or commissioned in the statutory definition of a work for hire, making it unclear whether sound recordings can be considered works for hire absent an employment relationship. But sound recordings were not always missing from that list. Peterson noted that they were briefly included when a technical amendment to the Copyright Act was passed in 1999. Since technical amendments are only supposed to make nonmaterial changes, there was quite the uproar from the musical community after word got out that a House staffer had slipped “sound recordings” into the work for hire definition just before the amendment was passed, causing Congress to later delete the addition and instruct judges to ignore the change. With the ability to contractually render a sound recording a work made for hire, the event moderator suggested that perhaps record labels should go the other route and employ artists to ensure that all works created within the scope of that employment would belong to the label for the full life of the copyright. While an interesting idea, this solution is likely to cause more problems than it solves. With employment comes liability, since employees have the ability to sue for wrongful termination and discrimination, while independent contractors are less protected. Beyond the inevitable lawsuits, benefits and taxes, paying musical artists a salary remains a losing proposition. A popular saying in the music industry is that seven out of ten records fail, two break even, and one turns a profit. At this success rate, paying all ten of those acts enough to live on in order to retain the full rights to their future sound recordings would be an unsustainable business model.
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