America-Israel Patent Law

Dedication of IP Rights to the Public (Tom Lehrer Fans, Rejoice!)

 

We refer to patents, trademarks and copyrights as "intellectual property" in part because they have attributes of what we normally think of as tangible property.  Just as ownership of tangible property – a piece of land or a bicycle – allows us to say who can and can’t use our property, but doesn’t necessarily allow us to use our own property in all situations (e.g. in most places you need a license to drive a car, even if you own it), so too IP rights provide us with a say over who can use our IP, even if IP ownership doesn’t guarantee us the right to use our own IP (e.g. sometimes it’s necessary to cross-license with another IP owner). 

Additionally, we can dispose of IP rights like we do tangible property: we can transfer ownership to others, we can pass on IP rights to our inheritors, or we can forego our rights and dedicate our IP to the public (in the case of IP, prior to the date on which those rights would otherwise have expired). 

Dedication to the public is probably most commonly encountered in the context of US patent prosecution, which sometimes requires an applicant to disclaim the term of a to-be-granted patent beyond a certain date and to promise that that to-be-granted patent will be co-owned with an earlier-granted patent in order to be enforceable, in order to secure grant of the later patent.  (We’ve discussed this in previous blog posts, e.g. here and here.)  That is at its heart a form of dedication to the public, or can be viewed as such.

Less commonly, an author will dedicate his writings to the public.  Recently, Tom Lehrer announced that that’s what he’s doing with his corpus of songs and, to the extent he can, the music he wrote for those songs.  Actually, since US copyright law doesn’t have a dedication-to-the-public provision, technically what he did was to grant an irrevocable, royalty-free license to all comers to use his words and music, but the end result is the same.  We sometimes see this in the patent sphere; a covenant not to sue can also achieve the same end.

If you’re reading this blog and you don’t know who Tom Lehrer is, he was trained as a mathematician, but he gained fame in writing and performing satirical songs on topics of the day in the 1950’s and 1960’s.  His classic “I got it from Agnes”, for example, seems rather appropriate in this era of the Wuhan virus and “contact tracing”.  As an Eagle Scout and a chemist, two of my personal favorites are “Be Prepared” and “The Elements Song”, respectively. 

In any event, Mr. Lehrer is still alive and now in his 90’s, and has made his lyrics and much of his music available here.

But What's The Plaintiff's Cause of Action?

After years of lacking an official internet presence, Gary Larson recently relented and starting posting his old Far Side cartoons on a daily basis.  Several of these have an IP angle to them, like this one.  But what's the cause of action here - right of publicity? Copyright? Unjust enrichment? Passing off?

Life Imitates Art: Despicable US Postal Service

Gru: "We stole the Statue of Liberty!  ... The small one from Las Vegas."

USPS: uses an artist's version of the Statue of Liberty - the small one from Las Vegas - on a postage stamp without the artist's permission.

In the movie, I don't think Gru had to pay anyone $3.5 million to compensate for the theft.

Evidently the USPS needs better minions.

 

If a Lawyer-Turned-Politician Doesn't Get the First Amendment, You Can't Expect Better From a Crybaby-Turned-Politician

Last year we wrote about the Clinton campaign's spectacularly unsuccessful attempt to abuse trademark law in order to silence a critic who sold t-shirts and mugs mocking that campaign's candidate. Now it appears that the leading candidate for the Republican Party's nomination is playing the same game, trying to use trademark law to take a swing at a site called www.stoptrump.us that sells t-shirts with a political message that's not to his liking. By making this non-starter threat, he's placed himself in the company of a failed lawyer. And here you thought that he couldn't demean himself any more. Then again, to quote Mel Brooks, "He's just crazy enough to do it", i.e to go to court, where the judge will laugh at him as he kicks him out onto the street.

Update on a "Copyright CrISIS?"

Now that we're into the post-ballot-casting, horse-trading-wheeling-dealing part of the Israeli election process, I went back and checked on the Likud video that I wrote about here.  It's no longer on Youtube: the Jordanian band whose music it used without permission made a copyright claim.  No idea if, as I predicted would happen, it's been re-posted.  No idea either if they sent the copyright complaint to Youtube after reading the post here, but if so, I won't be seeking payment for legal advice.

A Copyright CrISIS?

(March 19: see update here.)

Israel has national elections next month, in which, yet again, Israelis will get to go to the polls to vote for a party that won’t represent them.  I suppose that’s better than not getting to go to polls to achieve the same result, which is what transpires in the PA.  Unfortunately, based on what gets reported in the mainstream media, we have no idea as to the views of the leading candidates on the issues of the day, because for the most part we’ve been reading and hearing about media-manufactured crises crudely designed to embarrass the current prime minister, and lots of mud-slinging between the heads of the different parties.  Including the most succinct expression of what’s on the mind of the present opposition heads, the bumper sticker reading “Anyone but Bibi”. 

Over the weekend, the PM’s Likud party came out with a new anti-left campaign video, which shows some ISIS a-holes in a pickup truck listening to an Arabic hip-hop song.  They stop, ask someone for directions to Jerusalem, and are told to turn left (which they do, at which point we can see said bumper sticker - in Hebrew - on the back of the truck.  Cute.)  This is followed by a The-left-will-give-into-terror-only-the-Likud-will-keep-you-safe message.  After the ad’s release, the usual suspects on the political left trotted out their usual responses – “incitement” (whatever the heck that’s supposed to mean), beneath contempt, beyond the pale, there should be a criminal investigation, etcetera.  Ho-hum.

More interesting to this IP practitioner was this report of the reaction of the band that wrote and performed the rap song used in the video, a couple of Jordanian guys who call themselves “Palestinians”: they say that the Likud didn’t obtain their permission to use the video, and that by associating them with ISIS (which – surprise! – is not particularly popular in parts of Jordan right now after immolating a Jordanian pilot), the Likud has placed their lives in danger.  They’re threatening legal action.

Of course, this claim got me to thinking, what legal action could they take, and where could they take it?  I would think their main goal would be to get the video taken down, and perhaps to receive some sort of compensation for its unauthorized use.  Inasmuch as the Likud used a significant portion of the song, and it plays through nearly the whole video, I don’t think “fair use” would be much of a defense.  So an injunction is in principle a possibility, as is financial remuneration.

But where to seek such redress?  I suppose they could approach a Jordanian court. I don’t know anything about Jordanian copyright law, but even if they were able to get an injunction and/or a monetary judgment there, good luck enforcing it here in Israel in a timely fashion, if at all.

More promising would be enforcement in Israel. Maybe. Jordan is member of the Bern Convention, so from the Israeli perspective, if under Jordanian law copyright inhered in their song as soon as it was fixed in a tangible medium, then per section 9 of the Israel copyright statute the song also became copyrighted in Israel at the same time.  Moreover, Israeli courts grant injunctions for IP infringement, and there is statutory compensation for copyright infringement even in the absence of proof of damage. 

There is, of course, the technical matter of finding a lawyer who would represent them: since 2000, the Jordanian Bar Association has forbidden its members from having any contact with Israelis, let alone representing them.  So in this case the band members would need to retain an Israeli lawyer directly, one who isn’t bothered by the asymmetry in representing someone from a country where that lawyer himself couldn’t obtain representation.  However, I have no doubt that such creatures exist, including some who would take a perverse pleasure in representing the band in this case. It wouldn’t be the first time Israel’s openness and tolerance proved to be its undoing.

After retaining an Israeli lawyer, the band members would need to get a judge’s attention soon; obtaining an injunction after the elections would by a Pyrrhic victory.  While there are procedures for obtaining emergency injunctions, I’m not going to speculate on whether or not an Israeli judge would grant such a motion in this case, and if he doesn’t, the case might not be heard for years. And here’s a bit of (not so) heretical speculation: the alacrity with which the case is handled might depend on the judge’s political views.

In addition to the straightforward assertion of infringement for use of the song without permission, the band members would also, apparently, have a claim for infringement of their “moral rights” per sections 45 and 46 of the statute to have their names associated with their work, and possibly for a derogatory association between them and the song by virtue of its being used in a Likud advertisement.

If infringement is found, the authors could receive up to 100,000 NIS (about $25K) without proof of injury.  But since the big political parties routinely go into debt to finance their campaigns, and then make the public pay for the shortfall, I wouldn’t count on monetary compensation if I were a member of the band.

Of course, the more obvious, faster and surer way to get the clip taken down is to file a copyright complaint with Youtube, where the clip is hosted.  Or maybe it’s not so obvious: as of this writing, the clip is still up.

It’s a safe bet that even if the clip comes down on Youtube, it will be reposted on Youtube and other clip-sharing services. 

Some humor in response to the humorless - copyrights, trademarks and free speech

Last year I helped organize a panel for the AIPLA national meeting on the intersection between IP rights and free speech.  One of the speakers was Paul Levy of Public Citizen, who at the time was representing a designer and a purveyor of T-shirts and coffee mugs in a suit filed against some rather humorless goons at the NSA.  The NSA had sent a cease-and-desist letter and was threatening the merchants with criminal prosecution for selling wares emblazoned with the logos below:

Eventually cooler heads prevailed, i.e., the NSA folded when it realized that it was going to have its rear handed to it on a platter if the case proceeded.

I was reminded of this when Patently-o reported earlier this week about another group of humorless people, namely Hillary Clinton and her lawyers, who tried to stop the same merchants from selling t-shirts that modified her campaign logo to make a point:

This time, the bozos are asserting trademark and copyright infringement, and have told the online sellers to remove the goods in question.  Mr. Levy has told them in lawyerspeak to back off; they have until tomorrow to rescind their takedown demand or he's going to haul them into court, where he will trounce them if the case is ever heard on the merits.  You'd think a lady with a law degree from Yale would know better.  Particular a lady who aspires to take an oath of office in which she'll swear to uphold the Constitition of the United States, the First Amendment of which protects this kind of speech.

I pointed out the Hillary debacle to some friends who I thought would appreciate it, and one of them was kind enough to send me this link to a T-shirt that as an IP practitioner I find very funny:

As Homer Simpson might say, "It works on so many levels."

UPDATE: Hillary (or her sycophants) remembered what the First Amendment is about and backed down before the expiration of the June 12 deadline.  No suit filed, T-shirts again available at CafePress and Zazzle. 

 

Why Is This Case Different From All Other Cases? Some Random Thoughts on Legal Fictions and Copyrights Versus Patents

Here in the Holy Land, we’ve just finished the seven-day Passover festival. (Our brethren who are silly enough to still be living outside of the biblical Land of Israel are still in the throes the extra eighth day observed there.)  Other than the requisite eating of matza on the first night, the real hallmark of the festival is the prohibition against leavened foods from wheat, rye, spelt, barley or oats (aka hametz).  Jews are enjoined not only from consuming such products, but from even possessing them.  The former prohibition is easy enough to abide by, but the latter presents difficulties: try as they might, most people can’t be certain that they’ve removed all the hametz from every nook and cranny of every space that they own. And what, for example, if you’re a spirits merchant, with a stock of grain-derived products worth thousands of dollars – do you have to pour your entire inventory down the drain before Passover?

The rabbis of the Talmud dealt with the issue of potentially insufficient cleaning by prescribing a ritual in which one symbolically burns his hametz, coupled with an oral disavowal of ownership of one’s hametz.  That’s fine for overlooked crumbs and the occasional pretzel that your kid left behind the sofa that you missed while cleaning, but that doesn’t solve the problem of valuable hametz that you don’t really want to get rid of on account the financial loss that would be incurred. 

Enter the realm of quasi-legal fiction: the sale of one’s hametz to a non-Jew. The prohibition against possession of hametz on one’s premises only applies to one’s own hametz; it’s ok to have hametz belonging to someone who isn’t Jewish in one’s house, provided it’s kept out sight. Hence observant Jews for whom the eradication of all their hametz would present a financial hardship sell their hametz to a non-Jew for the duration of the festival.

I call this a “quasi-legal fiction” for several reasons.  First, typically, the sale is a conditional sale, subject to a small down payment (maybe $10) up front, at which time ownership transfers to the buyer, with the remainder being due at the conclusion of the festival. If the buyer doesn’t provide the money at the end of festival, the ownership reverts to the seller. I’ve never heard of a case where the buyer actually produced the remainder of the money to complete the transaction. Moreover, it’s common practice for many sellers to appoint a common agent (usually the local rabbi), who sells the collective hametz (having a higher value than any individual’s hametz) to a single buyer.  The increased value decreases the likelihood of the transaction being completed.  Finally, the seller almost never intends to really sell the hametz: the expectation is that at the end of the festival, ownership will revert to the seller. 

Now, what does any of this have to do with patents, or IP in general?  It turns out that a similar arrangement has been used for year by the US Copyright Office – and that that arrangement recently received the imprimatur of the Ninth Circuit Court of Appeals in a case entitled Alaska Stock, LLC v Houghton Mifflin.  The dispute stemmed from the (uniquely) US requirement that a copyright holder register its copyrights before asserting them. Registration requires a listing of the author and a brief description of the work being copyrighted. This isn’t a problem if you are, say, an individual photographer registering your own photos.  However, many photographers utilize “stock agencies”, which register the copyrights for the photographers and then market those photographs for use by others, paying the photographer for each instance of use (and of course keeping something for themselves; in many cases the photographers initially pay the agency for its services).  A stock agency has no difficulty registering a compilation of thousands of photographs from hundreds of photographers (e.g. a catalogue or database): it simply registers the compilation as a “collective work” as defined in the copyright statute.  But if the agency also wants to register the copyright in the individual photographs, it’s a burden to list every single photographer and every single photograph. 

So in 1995, the Register of Copyrights (anyone know why the person is called the “Register” and not “Registrar”, which would seem to make more sense?) came to an agreement with a trade association of stock agencies called the Picture Agency Council of America, Inc., and reached an agreement: as explained by the Ninth Circuit, rather than requiring individual registration of each photograph in the catalogue, “a stock agency could register both a catalog of images and the individual photographs in the catalog in one application if the photographers temporarily transferred their copyrights to the stock agency for the purposes of registration”.  (According to the court, the practice actually went as far back as 1980.)

Now here’s where we come to the sale of hametz. As reported in the Ninth Circuit’s decision,

“The trade association confirmed this with the Copyright Office in writing, and advised its member stock agencies. Using language suggested by the Copyright Office, Alaska Stock's typical pre-2001 agreement with a photographer includes this language: "I grant Alaska Stock the right to register for copyright my photographs which appear in this catalog in the name of Alaska Stock solely for the purpose of catalog registration. Alaska Stock shall reassign such copyright to me upon request." The post-2001 language was materially similar: "Photographer grants to Alaska Stock, solely for the purpose of registration, the copyright…." “

In other words, the photographers sold (or otherwise transferred) some of their rights in the photographs to the stock agency on condition that the agency would reassign those rights back to the photographer upon completion of the registration at the Copyright Office.  Sounds a lot like the sale of hametz. Or the notion of “matana al m’nat l’hahzir” (a gift made on condition of being returned to the giver), a legal ruse used inter alia in the context of the four species on Sukkot.

As a patent practitioner, there’s another aspect to the case that I find interesting, namely the willingness of both the lower court and the appellate court to get into the nitty-gritty of the copyright registration process.  We’ll get to that in a follow-up post.

Cross-Pollination Coming Through The Rye? eBay v MercExchange Cited as Basis for Lifting Injunction in Copyright Case

A copyright case on the US Supreme Court’s docket for next year has caught the attention of the patent community.  Recently the Second Circuit showed why that interest is justified. 

 

The copyright case, Costco Wholesale Corp. v Omega S.A., Docket No. 08-1423, involves the sale by Costco of Omega watches originally purchased outside the USA.  Costco sold the watches in the USA for significantly less than the retail price suggested by Omega.  Since the watches were imprinted on the back with what Omega calls a “globe design”, which Omega had registered with the Copyright Office, Omega filed suit and sought an injunction.  Apparently Omega had put the design on the watches specifically for the purpose of being able to file a copyright infringement suit. 

 

Costco argued that, by virtue of the Supreme Court’s holding in Quality King v L’Anza, Omega’s rights were exhausted by the first sale of the watches abroad.  But in 2009 the Ninth Circuit agreed with Omega that Quality King could be distinguished, since there the first sale had taken place in the USA (with the goods subsequently being exported and then re-imported), whereas in Omega’s case the first sale occurred abroad.  Quality King, said the Ninth Circuit, was silent about the situation in which the first sale occurred outside the USA.  On this basis, the Ninth Circuit held that the first sale abroad did not exhaust Omega’s rights. 

 

The grant of cert in Costco caught the attention of the patent community because of the Federal Circuit’s holding in a series of cases involving Fuji Photo Film and Jazz Photo Corp. (see, e.g. here, here and here).  In the Fuji/Jazz cases, the CAFC ruled that the importation of patent-protected cameras by a third party did not infringe the patentee’s rights if those cameras were originally sold in the USA, exported, and then subsequently purchased by the third party and imported back into the USA.  In such a case, the patentee’s rights were exhausted by the first sale.  However, said the CAFC, if the cameras had first been sold outside the USA (i.e. they were manufactured and first sold abroad), then the first sale did not exhaust those rights. 

 

Thus in substance, the CAFC’s holding in the Fuji/Jazz cases is analogous to the Ninth Circuit’s holding in Costco.  The question then arises, if Omega is reversed by the Supreme Court, will that reversal also apply to patent cases?  In other words, would extension of first sale exhaustion in a copyright case to first foreign sales mean that the doctrine of exhaustion in patent cases also extends to foreign first sales?

 

Technically, exhaustion in the two situations can be distinguished: copyright exhaustion is based in the copyright statute, 17 U.S.C. 109(a), whereas exhaustion in patent cases is doctrinal, owing its existence to judges rather than the statute.  However, beyond this formal distinction, it’s possible to identify underlying policy reasons why universal exhaustion should apply with respect to copyright but not with regard to patents. 

 

For starters, copyright holders (think Disney, the RIAA and the like) have pushed to make copyright universal, and in many ways this has been accomplished through international copyright treaties.  Indeed, outside the USA, you don’t need to register a copyright to enforce it – the second you’ve created an original work in one treaty country that’s embodied in a tangible medium, copyright inheres in that work in all treaty-member countries.  So it’s not a stretch to say that a first sale of a copyrighted work should exhaust the rights in that work, since the rights are in effect universal.  Patents, in contrast, remain territorial – you still need to register the patent in each jurisdiction of interest in order to enforce the patent in that jurisdiction.  Which would correlate with national rather than universal exhaustion upon sale of a patented product by the patent holder, in accord with the CAFC’s position. 

 

These differences in turn can be attributed to the different natures of the things protected by the two bodies of law, and the types of protection afforded.  Patents have a high threshold for validity, viz. novelty, non-obviousness and utility on the substantive side and enabling description (and in the USA, written description) on the formal side.  Furthermore, patents can protect more than is actually disclosed in the patent, and more than just the commercial embodiment of the invention sold by the patentee – in fact, in some countries a patentee doesn’t even need to work his invention in order to for his patent to remain valid.  Also, patents are intended to be a commercial tool, and a means of disseminating knowledge.  In contrast, copyright has a low threshold – originality – and in principle is narrowly limited to the particular expression embodied in the tangible medium.  While copyright has pecuniary component, it also has a personal component attached to it (think of moral rights in civil law jurisdictions), unlike patents.  And the dissemination of useful knowledge is not a prerequisite for copyright, which can in inhere in works of art as well as books.   

 

So it’s possible that even if the SCOTUS decides that under the copyright statute, a first sale abroad can exhaust the copyright holder’s rights, the CAFC could distinguish patent law and still hold that such sales do not exhaust patentee’s rights.  In fact, in the Fuji/Jazz cases, that’s exactly what the CAFC did: in those cases, the CAFC stated – in contrast to the view adopted by the Ninth Circuit in Omega – that Quality King held that first sales, irrespective of where made, exhausted a copyright holder’s rights, but since Quality King was a copyright case, it was distinguishable from patent cases.  Thus, said the CAFC in the Fuji/Jazz cases, Fuji’s first sales abroad did not exhaust its patent rights. 

 

However, it’s also possible that the SCOTUS will treat exhaustion under the copyright and patent contexts as equivalent.  That’s what happened a few years ago in eBay v MercExchange, in which the Supreme Court explicitly drew parallels to the copyright context in reiterating that patent cases are no different from any other kind of case in which the equitable remedy of injuction is sought.  There the Supreme Court reminded the CAFC that, just as in copyright cases, all four factors of the standard test for determining if an injunction is warranted (irreparable injury, remedies at law insufficient to compensate for the injury, balance of hardships, and no disservice to the public interest) apply when awarding injunctions in cases of copyright infringement. 

 

At the end of April, the Second Circuit cited eBay in vacating an injunction given to the heirs of the late J.D. Salinger.  Plaintiffs had alleged that another author’s use of the character of Holden Caulfield, the protagonist in Salinger’s The Catcher In The Rye, in a book set sixty years after Catcher (titled, appropriately enough, 60 Years Later: Coming Through The Rye), infringed Salinger’s copyright in Catcher.  The district court found that (1) Salinger had a valid copyright in Catcher and the Holden Caulfield character, (2) absent a successful fair use defense, Defendants infringed Salinger’s copyright in both Catcher and the Holden Caulfield character, (3) Defendants’ fair use defense was likely to fail, and (4) on the basis of the Second Circuit’s own precedent, which enunciated a two-part test, a preliminary injunction should issue.  The Second Circuit agreed that under its own precedent, an injunction should issue, but that eBay had overturned that precedent and must be adhered to.  Since the District Court had not considered all four eBay factors, the Second Circuit vacated the injunction and remanded to the District Court.

 

It’s unclear if the equivalence drawn between patent and copyright cases by the Second Circuit has implications for the question of first sale exhaustion.  As the Second Circuit noted, “eBay strongly indicates that the traditional principles of equity it employed are the presumptive standard for injunctions in any context”, that the Court in eBay cited to two non-IP cases in noting the proper four-factor test for injunctions, and that the Court had noted that “the creation of a right is distinct from the provision of remedies for violations of that right”.  In contrast, in Omega, no one is asserting that exhaustion by first sale is a universal legal principle in all areas of law – and indeed, unlike injunctions which are applicable in a wide variety of circumstances, exhaustion is a notion that only makes sense in a narrow sphere of law.

 

So the SCOTUS may decide Omega narrowly, and limit its holding to copyright cases; or it may explicitly state that patent cases also have first sale exhaustion.  The latter would be bad news for many companies that practice price discrimination across jurisdictions, but particularly drug manufacturers, who utilize the fact that a sale in one jurisdiction doesn’t exhaust their patent rights in another jurisdiction.  This enables drug manufacturers to charge significantly more for their patented drugs in the USA than in many other jurisdictions, where those prices are often controlled by the government.