Blueprint of a gear train.

 Robert J. Yarbrough
Patent Attorney

 Patents - Inventions - Trademarks 

Newsletter Issue 53 - July 2013

In this issue:

Fair use in copyright
Removing material from social media
Attack on intellectual property
Non-disclosure agreements

Ask Dr. CopyrightDr. Copyright image

Dear Doc:

I know you've explained the legal concept of "fair use" before, but I have a question about that. Does it infringe an author's copyright in a book to paraphrase one sentence from the book in a movie, if you give credit to the author, or is it fair use?

Absolom Absolom, Mississippi

Dear AbAb:

Funny you would ask that question, since it is a paraphrase of one asked by United States District Judge Michael P. Mills in his recent decision in Faulkner Literary Rights LLC v. Sony. In that suit, the heirs of William Faulkner sued Sony Pictures, which distributed Woody Allen's movie Midnight in Paris. In the movie, Owen Wilson's character paraphrases Faulkner's novel, Requiem for a Nun, when he says, "The past is not dead. Actually, it's not even past. You know who said that? Faulkner, and he was right. I met him too. I ran into him at a dinner party."

The actual sentences from the novel are, "The past is never dead. It's not even past."

Given the obvious and serious legal issues at stake, the Faulkner heirs sued for violation of the Lanham Act and the Copyright Act. On a motion by Sony to dismiss the case, the judge read the book, watched the movie, and expressed his gratitude that he had not been asked to compare The Sound and the Fury with Sharknado.

The legal question, however, turned on what the Court saw as, "(1) whether the affirmative defense raised to the copyright infringement claim can properly be considered on a motion to dismiss; (2) whether the use in Midnight is justified under a de minimis copyright analysis; (3) if the alleged infringement is not de minimis, whether or not it constitutes fair use; (4) whether Faulkner's Lanham Act claim has merit."

Judge Mills, in his 17 page memorandum opinion, gives a textbook lesson in fair use analysis. It all really comes down in the end, however, to his belief that Woody Allen has created a, "transmogrification in medium" by taking a sentence from the novel and using it in a different medium (film) and for a different literary purpose. According to the Merriam-Webster Dictionary, "transmogrify" means, "to change or alter greatly and often with grotesque or humorous effect." Ahhhh... so THAT's what Woody Allen did!

So you see, Ab, it's fair to misquote a famous author of serious literature, if you do it in film, with comic effect. So I guess, we can try it in a law firm newsletter, too... As Woody Allen once said, "I believe there is something out there watching us. Unfortunately, it's the government." (But then again, that's a real quote.)

If you need to paraphrase a famous person, it would be good to check with the attorneys at LW&H - they're not quite famous, but they do know a lot about copyright law.

Until next month...

The "Doc"

The DMCA to the Rescue (Maybe) ...copyright symbol

In a recent embarrassing broadcast by KTVU television of San Francisco, the morning anchor, Tori Campbell, identified the pilots of the recent San Francisco Asiana airline crash as "Captain Sum Ting Wong," "Wi Tu Lo," "Ho Lee Fuk," and "Bang Ding Ow." As she read the names, Campbell didn't flinch and, even more perplexing, why didn't the station snag the racist script before airing it? To its credit, KTVU made a quick public apology and fired some employees. The station was still faced with a newscast gone viral. Just how would they remove all the copies of the broadcast on YouTube and other popular web sites?

Digital Millennium Copyright Act (DMCA) to the rescue! Under the DMCA, a 1998 amendment to the US Copyright Act, copyright owners may request online service providers to take down works, which have been posted online without the owner's permission. We have written about take down notices in previous posts. Service providers generally obey such requests to avoid liability for the illegal acts of their online subscribers. And so, under the theory that the video posters had essentially stolen copies of the embarrassing newscast, KTVU undertook a "successful" campaign of sending "take down notices" to various web sites such as YouTube. But how successful were they? Well, if you really wanted to see the broadcast, you could find it on Bit Torrent and other file sharing sources but for the mainstream web surfers, KTVU's campaign appeared largely successful.

KTVU may have been satisfied, but copyright lawyers were not. There is a very compelling argument that the KTVU newscast was not protected by copyright law at all. Section 107 of the U.S. Copyright Act places limitations on the exclusive rights granted by the Act. Copies of works used for purposes such as criticism, comment (including parody), and news reporting are not, under the Section 107, infringing. Rather, such use constitutes "fair use." Certainly, most people who posted copies of the broadcast did so for no purpose other than criticism, comment, news or parody even it they thought it was funny. If they were posted for racist purposes, perhaps, KTVU has an argument but many, if not the majority of postings, were comments upon the stupidity and poor management of the KTVU newsroom. Based on the fair use theory, bloggers at The Desk submitted counter-notifications with YouTube demanding that the KTVU videos be reinstated. They were apparently successful given that the broadcast is still available here. The KTVU incident, nevertheless, demonstrates how creative use of copyright law can be used for reputation management even if the results are short-lived.

New Rules, New Strategies for Innovatorsimage of thomas edison

The past 15 years have seen an unprecedented attack on patents and patent-owners in the United States. Orchestrated by foreign nations, multinational corporations, and a variety of other groups, largely funded by similar vested interests, this attack has reduced much of the value formerly associated with patented innovations. In past issues of our newsletter we have described how patent owners can no longer realistically expect to block sales of products that infringe their patents through the injunction process, how infringers can conspire to divide patented processes among several actors to avoid infringement, how multiple infringers must now be sued separately, rather than joined in a single action, and how delays at the Patent Office and increasing fees put university researchers, solo inventors, and small companies at a disadvantage. We have also been counseling our clients to help them construct valuable patent strategies.

In the latest round of anti-patent actions, a committee of the Federal Courts including some noted judges and attorneys has issued a model order that they recommend be adopted by federal trial courts to govern patent suits. Such model orders are usually adopted quickly and without significant change by courts around the country. What is troubling about the present document, "A MODEL ORDER LIMITING EXCESS PATENT CLAIMS AND PRIOR ART" is that for the history of our patent system, which dates back to the time of Thomas Jefferson, inventors have always been able to present claims in as much detail as they wish, so that their patents would clearly and particularly cover all aspects of their inventions, and, at least since the 1950s, inventors and their attorneys have been required by both the Patent Law and the rules of the Patent Office to submit every relevant item of prior art of which they were aware. The background of the model order cites a study that shows that litigated patents contain an average of 24 claims, and cite 31 prior art references, which the committee calls, "problematically excessive."

Some recent cases have seen individual judges impose limits on patent owners, requiring that they limit the number of patents in a suit, and that they throw away claims in the patents that they assert to reach some arbitrarily small number. In other cases, the number of products accused of infringement has been limited by court order. All of this trimming is claimed to streamline cases and to promote the administration of justice. In reality, however, such rules are evidence that our judicial system often fails to handle the technical complexity of our modern technological world. When it takes teams of hundreds of researchers years of effort to develop and commercialize complex inventions such as synthetic proteins, chips with millions of components, and software with tens of millions of lines of code, the refusal of our courts to expend the mental energy needed to understand and to protect such innovations harms innovators. For courts to say to inventors, you have done the hard work of creating value, but we require you to be able to explain it to judges and juries in monosyllabic terms, and to choose, "not more than ten claims from each patent, and not more than a total of 32 claims," means that for some inventors, they will have a more difficult task to defend the value that they create.

Inventors must and will respond. Already, we are counseling clients to submit more patent applications with fewer claims per application. In litigation, the proposed limits will mean that separate law suits will have to be filed on small groups of patents against the same defendant. The erosion of the patent system has caused some innovators to opt for trade secrecy, at least in part, rather than patenting every aspect of their inventions, and this impoverishes our entire society, because it keeps technical advances out of the public view, which slows follow-on innovation.

We are confident that Americans will continue to innovate, despite the limits being imposed on the patent system. We are confident that we, and others who value our tradition of individual innovation will continue to find strategies to protect the value generated by inventors. Because we believe in the long-term value of innovation and the patent system that protects innovation, we at LW&H continue to develop new strategies for our clients, and particularly university researchers, garage inventors, startup companies, and established concerns to implement effective and efficient legal strategies for protecting their inventions.

So You Think Your Trade Secrets Are Protected... image of 'the scream'

It's time for a story. We'll start with the moral - read your non-disclosure agreements and comply with ALL of the requirements of the agreement to keep your information secret. Back to the story:

In license negotiations for an invention, Convolve and another party signed a non-disclosure agreement. Like many non-disclosure agreements, the agreement required that the person disclosing secret information designate the information as confidential. Convolve revealed trade secrets to the other party in reliance on the agreement, but failed to designate the trade secrets as confidential. The license negotiations fell through and, predictably, the other party used the trade secrets. Convolve sued, arguing that the trade secrets were protected by the non-disclosure agreement and also by trade secret law.

Convolve lost on the trade secret claims, both at trial and on appeal. The Federal Circuit Court of Appeals held that Convolve's failure to designate the trade secrets as confidential according to the agreement meant that the trade secrets were not covered by the agreement. The other party was free to use the trade secrets in any way that it desired.

Convolve also lost on its trade secret law claims. The Federal Circuit held that the agreement trumped trade secret law. In short, Convolve waived its other trade secret rights by signing the non-disclosure agreement.

In the give-and-take of a business negotiation, information can be disclosed in all sorts of ways - verbally over lunch, in e-mails or texts, in demonstrations and plant tours. Some of the information disclosed will be confidential and some will not. You and every person on your team who communicates with another party under a non-disclosure agreement MUST be aware of what information is confidential and the necessary steps to protect the confidential information under a non-disclosure agreement.

If you are the party disclosing information, another way to protect yourself is to make sure that the agreement protects all disclosed information without requiring a specific designation and that the rights of the disclosing party are in addition to its rights under trade secret law.

Robert J. Yarbrough was awarded an 'AV' (highest possible) rating by the Martindale 
			Hubbel attorney rating agency.