IP class 14

murphy bed. 
if your term becomes generic, you lose your TM rights.

why allow a benefit to be taken away?
policing the trademark is important: we may ask, what has the trademark holder done to protect their trademark, such as marketing, lawsuits,
but there are circumstances where we want for any manufacturer to be able to use the term because of the spectrum of distinctiveness. in terms of generic marks, we want all manufacturers to have access so that there is competition in the market.

in June 2006, OED added "Google" as a verb. in context of murphy bed, this is a problem because it is a threat to successful mark owners. the threat is that we think that the TM system must co-exist with competitive market, and we will outweigh the market's needs with

naked licensing and assignment in gross: dawn donut

allows the company to use the donut name but doesn't really look at what the company is doing with the name.
what's the TM problem? you're not policing your TM. TM is a signature of the quality of product. why do we regulate this?
TM is distinction between producer and product. allowing the licensing of a TM without quality control then

in what way could the licensor effect control over the product and business?
the licensor must have both the right and have done something that shows attempt to police the quality of the product. it can't be a sham.

if we don't want the court to force companies to follow judicially formed standards, then what do we want?
- the market to regulate

the problem of the TM owner exiting the marketplace:

functionality: trafFix devices.
question of whether a TM exists at all. TraFix is sued by marketing displays for misappropriating its trade dress. the springs created by marketing displays may not be necessary.
two issues:
1. back-door patent. we as the public would be getting cheated because you had a patent lasting 20 years, and now you want a TM, which would disserve the public because

if trafFix must use 4 springs for hwat can be accomplished with 2, then their product is more expensive and its an expense that has nothing to do with "good will" or anything "necessary for the market". this is a functional feature, regardless of whether there is secondary meaning. why? because TM would create a mucky infraction on the patent system here. we want to prevent TM law from being a means of restricting trade in a way that diminishes competition, and allows producers to compete for reputation. we don't want the competition over reputation to become a vehicle for monopolization.

mattel v. mca records
majority says that this is a ridiculous song and the doll, barbie the word, has TM. but
there can be social contests over the meaning of a term, even a TM. what would happen if there wasn't this type of defense, and mattel didn't like what you had said about their company? if you're using the TM just as another means to infringement, but you

nadel v. play by play.
nadel doesn't tell play by play that you can get the idea that they disclose anywhere. why should they be allowed to do that? because

desny v. wilder
case arises before 1976 copyright act. after the act, the copyright of a written work would be preemptive. transferrence of creative ideas is being driven into the copyright law area. desny made a pitch to billy wilder and then ace in the hole is made. his claim is a contract claim, that the secretary implied that the idea would only be used if desny was paid.

economy of getting information.

intellectual property law is in essence a chance to find and disseminate information in a way that is efficient and fair to extent possible. by keeping something secret, you may lose rights and be precluded from using the information in the future. there are tremendous pressures towards institutionalizing creative effort and information. and to an extent, fairness falls to the wayside.

we discussed fair use of intellectual property, personhood interests of investment, and moral interests.


source-identifiers: if you're the only person using a product for 20 years then we 


2.

what i

biz org class 28

Unical: whatever the takeover defense measure chosen, it has to proportionately mirror the takeover threat.

the court's judicial interpretation of takeovers in this section.

revlon: example of a poison pill

an investor that you look to to help out is a "white knight"

cancellation fee is an agreement between the "white knight" and the target company, such that the white knight still gets something out of the bargain, even if it loses the bidding war. the parties will negotiate the value of the cancellation fee.

how is this a takeover defense mechanism?

if the hostile acquirer outbids the white knight, then the target company must pay the cancellation fee, which is an acquired debt of the hostile company/majority shareholder. this is very unattractive, because no matter what happens the white knight will have a benefit.

"no-shop agreements": agreement between the target and white knight that the friendly merger agreement will not be used to shop around the target company to get a higher return for the shareholders.

"lock up agreement": the white knight is given an option to buy multiple, valuable divisions of the target company, or the "crown jewels" of the company, at a price significantly reduced from the appraised value.

it is the duty of the targeted board to maximize the value that the shareholders can get.
no shop, lockup and cancellation were employed to stop the bidding war and to stop the hostile acquirer, and that stoppage of the bidding war stopped shareholders from being able to get the highest price. this is a breach of fiduciary duty to the shareholders.

companies exist to maximize capital for share holders. boards can consider what will be good for consumers in the long run. but they cannot do what

time-warner.
powerful CEOs can get a friendly bidder to do what it wants.
when time and warner decided they wanted to expand via merger, the negotiations fell through because the ego of the warner CEO caused a failure of the deals. ross wanted to maintain control of the merged companies, and was concerned about the amount of power he would exert. once a deal was negotiated, ross wanted power over the combined time-warner. he let things drag on, and that allowed paramount, a hostile bidder to come along a few years into negotiations, and target time. 

in time-warner, the threat that time fended against was that a merger with paramount would change the culture of the company and way of doing business.  the time company said that it wanted to preserve the culture of the time-warner company, but the target incumbent said that a merger with paramount would destroy the time culture.

in unical, the target company said that the bid was too low and therefore coercive.

the court bought the argument of time company that retaining the time culture was what was best for the shareholers in the long run. short term interests were not triggered. particularly noteworthy is that the time-warner merger had been ongoing for a long time.


14(a)(11) is a finalized but not yet enacted rule (because of the business roundtable). it allows shareholders of at least 3% of the company to accelerate board members of the company. 14(a)(11) is different from the leven & rosenthal cases because those were instances where control was changed by incumbents (SH have the right to be reimbursed for expenses they have laid out for changing the entire slate of the directors). under this rule, control does not shift.

the exam.
flag the issue quickly.
articulate the rule (which will be an expansion on the issue likely, because it will be fairly narrow). **even though we all know what the rules are from class, you MUST spell it out in the answer**
then, identify the particulars of the rule that are most directly affecting the outcome of the circumstances
apply the rule to the facts in light of the stated rule.

biz org class 27

three cases in which plaintiffs charge that the merger statute was used unfairly: 

weinberger. 
minority shareholders may be frozen out but the process/ dealings has to be fair and the price (which is more subjective) has to be fair.

in weinberger, signal owns UOP and decides it wants to freeze out the UOP shareholders. to do so, it mergers UOP into signal and cashes out the minority. when this happens, the dealings has to be fair. and in this case, signal had people on the UOP board that were signal executives and reporters about the fair prices. the shareholders and independent board voted in favor of the merger because they were not aware of the information held by UOP. the dealings were therefore unfair.

in farris v. glen alden, the defendants did not use merger form and the plaintiffs claimed that the lack of merger form should be deemed irrelevant and a merger should be found de facto even though it was an "asset acquisition". the minority position that asset acquistions in reality are de facto mergers.

NYS and DE reject asset acquistion: in harriton, the majority of the courts said that the asset acquistion deserves "equal dignity" as the merger acquistion, and the court will observe the business' stated objective.

coggins.
coggins facts are very similar to weinberger, but the defendants used the merger provisions. the plaintiff's arguments were that the merger provisions were incorrectly used.

with respect to weinberger, the court introduced the concept of fair dealing and fair price. but the DE court rejected the legitamate business purpose requirement in this case: in all jurisdictions, previously, the defendant had to have a legit business purpose to freeze out shareholders. NYS courts follow this equal dignity rule as well.

there may be perfectly legit reasons to freeze out/ cash out minority shareholders. in the weinberger case, if signal freeze out the minority and becomes a 100% shareholder of UOP, signal no longer has to worry about fiduciary duties owed to minority shareholders.

in sinclair v. levine, the court announced that the duty of loyalty analysis applies to the relationship with minority shareholders. we ask if the majority receives something to the detriment of the minority. and if it does, the majority holds the burden of proving fairness in their dealings.

in weinberger, the context is narrower because it is a merger, but the duties owed are still relevant. the majority share holder may still want to get rid of the minority just to dislodge that duty.

coggins: the merger was held to be impermissible because the controlling shareholder had no business purpose for freezing out the minority shareholders. the defendant used the old company and surviving company for insurance on personal loans. a company may not be used as security for a loan if there are minority shareholders.

but it's easy to come up with a legitimate business interest.

rabkin v. philip. 
the controlling shareholder maneuvered things to make the timing such that minority shareholders got less than a fair price for their shares. the court obviously held this wasn't fair, because the minority expected a certain pay point as granted to other parties. the court said that if the minority is complaining only about unfair price, the remedy is appraisal. but if the minority is claiming unfair dealings such as nondisclosure, misrepresentation, or fraud, then plaintiff's are claiming a weinberger remedy in which plaintiff will allege unfair dealings/price and requires a different analysis. there's no possibility of class action for an appraisal but there is for unfair dealings.


rauch v. RCA
plaintiffs claim that it's a de facto non-merger (liquidation), and that if the court accepted the plaintiff's argument, the plaintiffs should have gotten much more for their shares. the case illustrates the idea of "form over substance" as we saw in harriton. the court applies an equal dignity approach, and dismisses the plaintiff's claim and applies the equal dignity approach. the court acknowledges the merger/ asset sale, and expresses that there is more than one way to combine companies.


all courts reject de facto non-merger, at this time.


VGS v. castiel
LLC. investors are called "members" or "managers". there is centralized organization sometimes. this company was manager managed by three people. two had a disagreement with the other manager, and joined forces against the one and adhered to the limited liability company act in dissolving the current LLC and beginning a new one (freeze the third manager out of the original business). the 3d manager had a controlling interest in the company. once the LLC was merged into the created corp, the one who held the original LLC lost control and the two minority had control. the court basically says that they understand that LLC act allows for managers to act pursuant to written consent without meeting or notice, but equitable principles will not allow for the actions taken in this circumstance, because clearly the 3d manager would have stopped and had the full authority to stop the merger if he had known about it.


takeovers.
acquiring companies and target companies.

dealing with both the entities and the personalities that control the entities.
acquiring companies that make a hostile bid for a target, the

the acquirer (or bidders) can be an individual or company.


think about how these cases compare to the previous ones: the previous cases demonstrate how business combination happen through the acquirers negotiating deals with the target companies. in the  current cases, the method of merger is a hostile one and the acquirer will go to other shareholders of the organization instaed of to the company's management.


tender offer: an offer to buy the company's shares but only if the acquisition happens by at least 51% of the minority shareholders tender. the acquirer generally offers a significant premium to get control.


what will the target companies do with respect to the deals? when an acquirer announces a tender offer and attempts to take control of the target company, what will the managers do?
like in pretty woman, they will try to get the acquiring company to deal with them and back off etc. they will spend corporate funds to thwart hostile bidders. but what's the problem? there might be a conflict of interests. the defense of the company will be that the acquirer is a threat to corporate existence and is a liquidator and will not manage the company in a way that is good for the company long-term, or that the acquirer will hurt the community by hurting employees, the environment and local economy.

what of the fact that this may be shareholders just entrenching themselves trying to keep their jobs? what if the directors
these cases are about the business judgment rule.

what specifically are incumbent managers of the target company doing to defend against hostile bidders and where are they getting the money? they are spending the target company's money: if the company wasn't earning anything, the acquirer wouldn't be attracted to it.

cases where the hostile bidder is trying to take the target company's executives jobs. courts therefore engage in a heightened level of scrutiny: courts first scrutinize the takeover defense mechanisms. the business judgment rule does not initially apply to the target company's business decisions. the target company's managers decisions to defend against the hostile bidders' bid do not get protected by biz judgment rule initially.

defense measures are
- greenmail (not something that acquirers try to get because have to pay 50% to IRS)
- stock repurchases or self-tenders
- poison pills
- lockups
- termination fees
- no-shop agreements


cheff v. mathes
holland was a company that was making money, but through fraudulent practices. mirmount, who wants to merge with the company holland, of which cheff is the CEO, proposes a merger. cheff rejects mirmount, who then goes to hollands shareholders and starts buying holland stock. inside directors have to show that they have a business reason for defending against the hostile bidder.

unocal corp v. mesa
the court's holding is that directors have to show that self-tender is a reasonable (proportionate) response to the hostile bidder's threat to the existence of the target company. unocal said that the threat of acquirers was coersive. this builds on the cheff analysis and adds the holding above.

revlon. poison pill.
there is another company that the target company would like to merge with. there are two personalities,
for each revlon share self-tendered to the board, the shareholder would get a payoff in a year of 12%. it was a shifting of the nature of the shareholder's investment to equity. it gave them a note, which made them creditors to be paid in the future with a stated return. much more attractive offer.

biz org class 26

insider trading.

1. model 14(a)(8)
2. GM IPO.

no insider trading unless there's a fiduciary duty (chiarella). but the basic insider trading rule is one that says that if there's a SH that owes FD, they have the duty to abstain.

tipper has to owe a FD.

there must be a FD owed to the source of the information.

wilkes duties: anytime a shareholder's conduct is challenged, they must show the legitimate business interest must be demonstrated and it must be shown that the minority shareholder's interests could not have been better protected.

controlling shareholders who freeze out minority shareholders.

smith v. atlantic properties.
wolfson, the founder of the business, was worried that the other investors would all gang up on him and form a group against him to freeeze him out. wolfson wants a provision that says "all important decisions require an 80% shareholder vote" which works out because all the shareholders own 25%. meaning that you need all the shareholders to agree, OR any one can veto a business decision. wolfson wouldn't agree to a property issue because he didn't like the other shareholders and made the firm liable for taxes.

it's a question of why the court picked on wolfson: the court blames him for wanting to have more tax liability.

jordan v. duff & phelps
larger company but still closely (not-publicly) held.
jordan had to argue that had he known of the merger, he would have stuck it out so that he could earn more money and maybe the familial dispute wouldn't have been so salient for jordan and his wife. he would have understood that duff&phelps was worth a lot more than the book value, and i wouldn't have quit. some people think that this is pretty implausible, but this is what the majority accepted.

"disdain or disclose rule" (see texas gulf-sulphur, where the company released a misleading information and insiders who traded on non-public, material information)

we have to accept jordan's claim that he would have stayed if he had known.
and so, the question for the court becomes -- if jordan had decided not to quit the firm, could duff&phelps have fired jordan before the merger occurred? this conflict of analysis is the conflict between the dissent and majority's opinions. the majority says that because jordan was at-will, duff&phelps could have said "so long sucker" even before he quit. easterbrooks says that duff&phelps could not have fired jordan just to keep him out of the benefits of the merger because of the duty of utmost good faith prevented them from doing an opportunistic firing. under s. 10(b)(5) -- is not applicable if the SH can't reply. but here, the shareholder could have responded by staying at the company and not quitting.

so this case combines wilkes duty and federal law under 10(b)(5).

mergers and acquisitions

farris v. glen -- de facto merger doctrine
mergers are the amalgamation of two companies under state statute, where one survives and the other disappears. typically, the larger company swallows the smaller and a merger agreement is written. shareholders of the company that gets eaten have to get something worth the equivalent of what they had that got sucked up.

tender offer:
in this case, list may buy control of GA by acquiring shares of GA from GA shareholders through a tender offer. list may pay cash OR use List shares as consideration
once list has control, it can use the state's short-form merger statute & GA disappears

in PA, dissenting shareholders have appraisal rights when the company merges with another AND when their company has sold its assets.

in DE, shareholders have appraisal rights only when their company merges, and have no rights in asset sales.

weinberger v. UPO Inc.
think of wilkes, where the minority shareholder was frozen out. the best way to eliminate liability to minority shareholders is to freeze them out during the merger. in this case, UPO, which became Signal, gave cash to the minority shareholders. this means that it needed to recommend the merger and the minority needed to vote. the problem for the companies is that the people on the UPO board were also Signal directors and officers.

utmost good faith: merger requires fair price and fair dealing. the officers should have shared what they knew with the independent board members, and they didn't. that's a fiduciary duty loyalty of breach. the directors have the burden of proving that this merger then was fair, since there were officers on both sides of the deal.

this is familiar to the analysis in sinclair, where the shareholder had to prove intrisic fairness. it also parallels the wheelabrator case which deals with disinterested shareholders -- with respect to controlling shareholders, the burden of proof may be shifted to the plaintiff to show unfairness

proro class 26

lawyer advertising. 
either to other lawyers or to non-lawyer professionals provided that the referral agreement is not exclusive and provided that the client is told that you have this reciprocal referral agreement.

comment 1: rule 7.1 very much intented to apply to lawyer advertising/ self-promotion of services.
comments 2&3: cover the situation of truthful but misleading advertising

see rule 7.3, comment 6:


"i'm back on my feet" problem.
is there a danger that potential clients would be mislead by this advertisement?
it's not per se unethical to have an ad and not include a disclaimer, but it is fine for a state to require a disclaimer and not run afowl of the first amendment.

rule 7.1 - 7.3
don't need anti-advertising rules to punish fraud. the ads contain information which is helpful for consumers, drives down legal services prices...

what explains the anti-advertising rules? because they are concerned with the "dignity of lawyers"

after SCOTUS struck down flat bans on advertisements so that competition on basics just as price and credentials improve, bar associations have been engaged in rear-guard action to protect/restrict against things that are/not permissible. what's annoying isn't the ads but the claims that these rules are for consumer protection.

pape&chandler pit bull case: "what these advertisements do is demean all lawyers and the public's trust in lawyers."

if a doggy ampersand can bring down the profession, then the profession has more problems than the rule itself can solve. lawyers nor the industry is not inerently dignified. should be based on
1. behavior of lawyers
2. how clients interpret behavior of the lawyers

clients are entitled to any information that helps to make this kind of info. the lawyers who would run these types of ads, are the lawyers who would let these types of ads run.

bates: "cynicism is bred by the fact that lawyers don't advertise aggressively enough."

the State can ban certain ads, can require disclaimers, can ban/regulate certain descriptions of services provided, but absolute bans to lawyer advertising are a no-no

this is not just about what single practitioner and small firms can do, but law firms as well. a large firm isn't going to take out time on TV or in the paper, but instead searches for more sophisticated marketing strategies.

orahlik 
the lawyer says that this is no different than bates.
the court says that it's not: "The solicitation of business by a lawyer through direct, in-person communication with the prospective client has long been viewed as inconsistent with the profession's ideal of the attorney-client relationship and as posing a significant potential for harm to the prospective client. . . . [T]he State does not lose its power to regulate commercial activity deemed harmful to the public whenever speech is a component of that activity."

commercial speech rights for lawyers do not extend to solitication of strangers (prospective clients) for profit. pro bono solitication however is not covered by this rule, and it is okay. it may be that we want to protect people's autonomy to create an attorney-client relationship. but these are still perception issues still involved as well, in terms of what's decorous or invasive.

fit: ohralik says that the State does not have to weigh less intrusive means of regulating the means of this solicitation, it can just bar it.

would expect that you could ban (something)
eden v. bane -- FL bans cold-calls to medium sized clients, and distinguishes ohralik to say that there's a difference between CPAs and lawyers

zauderer case:
advertisement asking if you need representation for IUD use, contact our firm. the ad successfully draws many clients.
the ad seems to give advice, it doesn't contain a disclaimer about costs, it has an illustration.
zauderer wins on every claim except the disclaimer language issue.

zauderer is also a "fit" case: the State has a legit interest in preventing deceptive ads

shapero:
the lawyer sends targeted letters to potential victims of foreclosure actions. the rule in KY at the time prohibits mail solicitation that is targeted at a person knwon to need legal services, if the significant motive for the lawyer doing so is pecuniary gain.

not ohralik because mail solicitation presents a lower risk of imposition, because the mail can be ignored unlike a face to face conversation.

N.B. -- the nature of a phone call is problematic


*** read Justic O'Connor's dissent**

"membership in the profession means you will temper your personal... to the aims of public service"
absent proof of a causal relationship between marketing and professionalism, to whom shoudl the court defer -- to the state's perception of a connection, to first amendment, shoudl it accept the state's claims at face value, rely on intuition... what should the court take as fundamental in deciding who wins these kinds of cases?

IP class 13

trademarks cont
doctrine.

have to then ask, is there a reason why we would want to take certain symbols out of the realm of trademark protection. this issue also comes up under distinctiveness. in the word marks context, we looked at highly/inherently distinctive marks, down to suggestive marks, then to non-discriptive/generic marks. descriptive marks can acquire distinction or secondary meaning, because consumers come to associate your mark with a certain source.

use. in order to be protectable the mark must be actually used, because otherwise that would be anti-competitive. registration is important because it provides nationwide notice, but you're not entitled to the registration unless you're actually using the mark in commerce.

infringment
elements:
- a valid and protectable mark
- likelihood of confusion
confusion analysis
- multifactor tests: sleekcraft
multiplying species of confusion

dilution elements
- a famous and distinctive mark (blurring would destroy the sole and unique meaning of its association with the good and manufacturer. tarnishment damages the mark's morally sensible association)

trademark analysis
1. subject matter
- llok at s.45
- word
- logo
- trade dress

2. distinctiveness
- word 
     - inherent (disputed/not disputed)
     - acquired
          - doesn't matter if generic

- logo
      - inherent
      - acquired (factual dispute)
      - trade dress
      - secondary meaning
         - acquired distinctiveness (factual dispute, length of use)

- registration that has been on books for five or more years is incontestible

- infringment 
     - protectable mark
     - likelihood of confusion (license, approval of the quality, etc)
          sleetcraft balancing test factors
          strength
            - inherent distinctiveness (not/strong)
            - acquired distinctiveness (not/strong)
            - proximity of the goods (where proximity is identity, services, market)
            - similarity of the marks (word logo and design:for cheesecake factory example, defendants should argue broad scope, plaintiff's should argue narrow scope)
            - actual confusion (a matter of fact)
            - marketing channels (advertising, distribution,
            - types of goods/ purchaser concern (are goods purchased in such as way as to displace confusion?)
            - defendant's intent (is the intent to confuse and draw away business, which is wrongful?)
            - likelihood of expansion of defendant's business

as to actual confusion, we would need survey evidence.
marketing channels

- dilution
             - famous mark
             - use commencing after the fame of the mark
             - blurring is considered just infringment, and the factors are not the same
             - similarity leading to an association
             - tarnishment

proro class 25

potential conflicts of interest between the clients' interests and the lay-manager/owner's interests for a lawyer working for an organization.

things can get complicated, because when we think of lawyers who work for corporations, they are taking orders from lay-management: in-house counsel is exactly this kind of framework. what's the difference between that and the

minor question/issue: can NAACP lay agents solicit individuals that lawyers of the organization will then represent?

major issue/question: the broader issue is that of the entity's goals and the client's goals, which may be conflicting.

1. constitutionally protected under 1st and 14th amendments.
2. if the state is to intervene, there must be a compelling state interest.
3. the common law offenses of barratry, maintenance and champerty -- ancient offenses that are almost nuisance offenses -- don't apply here because the litigants are seeking to enforce constitutional rights
4. the fear of a lay intermediary interfering with the rendering of legal services for pecuniary gain, whatever the validity when monetary stakes are concerned, has no application to this case. using the courts to fight segregation in this way is a different matter from the malicious, avericious use for purely private gain

dissent says that the doctrines of barratry protect the attorney-client relationship. harlan is anticipating and describing circumstances that may give rise to conflicts of interests where we're not even talking about pecuniary interests, that may

dissent uses different standard of proof: can't be said that state interest is incompatible with federal interest here -- because it is true that people are at least as willing to violate ethical rules for political motives as they are for financial motives.

barraters.

stirring up legal malcontent is an abuse of the public office of practicing law.
legal practice is about solving and vindicating actual harms by the clients desire to have their rights vindicated. harlan says you don't have to think about the selling of legal office purely monetarily -- in fact, it might be better to consider it by the selling of "cause litigation" to promote a political or social agenda.

cause litigation. many organizations created in 60s and 70s were leftist and focused on liberal and civil rights. conservative organizations were responsive and prominent in the 80s, with causes focused on economic/corporate/regulatory interests. these organizations sniffed out plaintiffs, pursuaded them to sign their names to complaints, directed legal strategies, and because courts in the early 60s/70s had relaxed standing for admirable cases, the courts had to give conservative organizations the same kind of loose standing!! so -- can it be said that the infusion into the litigation process of raw political fights fought by people with no real standing has corrupted litigation in just the way that laws against barratry sought to prevent?

money: the issue becomes more complicated when dealing with unions
is it permissible for unions to help their members through counsel to secure their rights, counsel that is part of the union?
1. public interest organization is looking to help outside clients but the union is looking to help it's own members
2. the public interest firm is looking to vindicate constitutional rights, but the unions are generally interested in more ordinary claims
3. public interest is usually to blaze a new legal trail, and the union interest is in saving a cost of getting outside counsel

justice black -- being able to obtain access to the court is fundamental sixth and 1st amendment right
union cases. once these came around, it became clear what is at stake: money

problem.
immigrants from former soviet union. can the lawyer bring in a language teacher?
5.4(b) - NO. this non lawyer may cause the lawyer to sacrifice the clients so that s/he may get rich.
is that a legitimate concern?
- reasons why someone would want to be a partner: control, direction, growth
- relationships

referrrals are OK so long as it's not an exclusive relationship (like, you can't tell a social worker that you'll refer all cases exclusively to that person)

litigation funding companies.
usery -- except in OH, there's going to be growth in the litigation funding industry.

rules 1.2 and 2.1
client determines ends, and the lawyer then finds the legal means.
it's 2002, the CIA has come to OLC seeking a legal opinion about enhanced interrogation techniques and if they're barred. imagine that the statute is drafted a little differently and the fairest reading of the statute is that waterboarding is actually lawful. it's not a slam dunk because the statute is vague, but on balance, the most lawyerly reading of the statute is that waterboarding is not prohibited. not-Yu says his conscience won't allow him to write an opinion that allows waterboarding because he thinks that that is torture. he writes a memo that the techniques are unlawful, and he has to get creative and aggressive in persuasiveness to reach the result. and with OLC's opinion issued, the CIA does not use waterboarding.

how similar is the not-Yu to the real Yu?

proro: articles and notes

http://www.nytimes.com/roomfordebate/2010/11/15/investing-in-someone-elses-lawsuit/the-costly-freedom-to-sue

http://www.nytimes.com/roomfordebate/2010/10/20/the-justices-and-decorum-outside-the-courtroom

biz org class 24

proxy positions have no bright line rule between policy and personnel, but of course, the parties are going to argue policy. and can argue a policy dispute even if it's really a personal argument.

rosenfeld. the dissent also agreed with the majority in respect to the expenses that were reembirsed and wehther they were fair/reasonable. dissent said that it was more than just the conveying of inforamtion to share holders, they were also wined and dined and the extraordinary expenses did not have to be incurred to just convey information. because of this, the reimbursements were not reasonable.

very fact specific cases.

business judgment rule will be relevant throughout the entire coursework.
putting everything together: make corporate decisions in good faith to ward against insurgence.

proxy cases:
1. starting point is securities act of 1934
2. section 14 gives SEC the authority to pursue and make rules and regulations about promulgate section 14
3. rule 14(a)(9) is the rule promulgated to s. 14 that makes it such that anytime there's a materially missing statement, it gives rise to civil damages or rescission
4. rule 14(a)(9) has been violated when...

does a violation of 14(a)(9) give rise to a private cause of action for private parties?
yes -- need private parties because the government and the SEC can't do it all

borak is a proxy issue, where the proxies were gotten through misleading efforts. and the case says, yes private parties can bring an action, don't have to wait for the SEC. it's an implied right of action.

mills v. electric
didn't disclose that mergenthauer owned auto-lite and was the quintessential controlling party:
plaintiff's challenge was that the proxy solicitation materials disclosed the merger but not the fact that mergenthauer, the acquiring party, owned the majority shares. lower court said that if the defendants could prove the merger was fair, there was no question of proxy misrepresentation, becuase shareholders wouldn't have needed the information that was omitted. plaintiffs showed causation -- fairness is relevant, but we don't awnt to sanction violation of the proxy standards articulated in rule 14(a)(9). the facts that were left out were material and were misleading, and a violation. we have to look at the proxy solicitation: was the solicitation essential to getting the merger done?

lovenheim:
why is it a request and not a demand that the shareholders

IP class 12

trademarks.

Outline for Trademark

Must know:

• what is a trademark/ what cannot be a trademark
• what is the subject matter of trademark law
• what are the protections of a trademark (what rights do they confer and how are they different from patent and copyright).
• What constitutes infringement/  defenses for infringement.
• Difference between trademark/ trade dress.
• Concept of distinctiveness—what is a distinctiveness?
  • What is like to lose a trademark
  • Concept of assigning a trademark (like in copyright, patent)
• Defenses
  • Fair use ;  very different from Copyright
  • Must know what it is in ALL IP area
• ISSUES
  • Geography:  b/c of Internet, where does your trademark right exist? What are the limitations that apply to trademark that does not elsewhere.
• Trademark dilution

what is a trademark?
mark of quality of trade.
- advertising
- proof of manufacturer
- signature of quality
- reliance for consumer
- resultant competitiveness in the marketplace because quality is not anonymous

modern view of trademarks is that they are a device that helps to reduce information and transaction costs by allowing customers to estimate the nature and quality of a good before purchase.

legal remedy needed against counterfeiting.

trademarks are protected within the Lanham Act, 15 USC 1051, which provides advantages to regetered trademarks and has prehibitions against unfair methods of competition affording protection even to unregistered marks.

a brief overview of trade theory.
trademark protection is awarded merely to those who were the first to use a disstinctive mark in commerce. the first person can prevent subsequent users from employing th esame or similar mark where there would be a "likelihood of confusion" between the two marks.

the fundamental principles of trademark law are essentially tort: unfair competition and tort deception of the consumer.

they are rights acquired with the use of a trademark in commerce, and they continue only so long as that use continues.

giving the originator of a mark the right to police counterfeiting also serves to protect:
1. investment in the creation of the mark
2. investment in A&P in association with the mark
3. product-related investments such as high quality raw materials and production equipment/techniques.

the basic economics of trademark and advertising
economists make a distinction between the SEARCH CHARACTERISTICS "price, color, shape, size, category) and EXPERIENCE CHARACTERISTICS (taste, durability) of a product.

consumer protection

product incentive

goodwill of a firm: residual benefits the company receives by making the above investments in the trademark/ quality


anything can/does serve as trademark. so how do we
acquring trademarks
1. distinctiveness -- what is the signifyer that allows
zatarain's v. oak grove

we don't want competitors to be able to monopolize the terms that simply relate to the natural (or common) state of the product.

2. discriptive marks -- if a mark is inherently distinctive, then you don't have to establish that the mark is protectable. something that serves directly to the descriptive quality, but can become something distinct. a descriptive term can become a trademark. generic terms can never acquire distinctiveness (like apples will always be apples) because we want for competitors to be able to call their products by a name that lets the market place know what they are buying/acquiring and would put other competitors to a disadvantage.

the fish fry mark. where does it fall on the spectrum? descriptive, because it describes the function of the product. there are four tests for determining if the term is suggestive or descriptive.
1. look the word up: fish fry can either be used in the process of frying fish or can be a term for a fete do-do. it's either a party or process, and if you use this product in its context, it will lead you to having fried fish (p.656) if there was a fish fry party in the box, then it would be a generic term.

N.B. -- if the word is descriptive and the distinction is based on mispellings, that doesn't inherently then make it protectable.

2. imagination test:
suggestive v. descriptive marks.
but how do we
the imagination test allows you to come out with any outcome you want to.

paucity of terms that describe what a fish fry is, or what fried fish is.
but essentially, the court just makes a conclusion.


3. extent of use of the word in the market
use of someone other than the plaintiff in using the mark. in this case,

4. secondary/source identifying meaning. not just a fishfry but zatarain's fishfry. how does the consuming public think of this product. how does the public think of fish fry? 
what is evidence of secondary meaning? ask people, take a survey

chick-fri tried to run one survey for two products, because the research is cheaper. but the products don't have the same type of market definitions/

jury found that taco cabana is distinct but non-functional.
1. can inhereently distinct trade dress be distinct even without secondary meaning? ... is that the right question to be asking
2.

walmart v. samara bros.
product design v. product packaging

registration and use in commerce:
registration provides notice on a nationwide scale to rights and marks.
zazu using the mark on suburban salons, it wasn't able to win against a registration with the PTO because the registration provides notice and thereby limits rights even though loreal hadn't used the trademark in that area yet



infringment:
1. must prove a valid and protectable mark
2. show that the defendant is engaging in commercial activity in such a way that confusion will result. the likelihood of confusion is the touchstone of infringement liability
- "strength of the mark" -- relates to confusion because
- type of goods
- similarity of the marks
- evidence of actual confusion
- defendant's intent


====================================================

Trademark

-know what is a trademark

- know the subject matter of trademark law and what can and can’t be trademarked

-what rights does trademark confer

- what constitutes infringement and what defenses are available to an infringer of trademark

-special areas of trademark law

            - distinctiveness- what is a distinctive mark and what does not, what does it mean to lose ones trademark right

            - concept of assigning trademark rights

            - fair use in trademark- know fair use in the areas we study

            - geography- where do you possess your trademark rights- there are  geographical restrictions

            -trademark dilution- applies to famous marks and confers stronger protection than traditional trademark law

Names to Know in IP

-Chism on Patent

-Nimmer on Copyright

-McCarthy on Trademark

Trademark has gotten important. It is one of the fastest methods of protection and people use it to shore up gaps in their protection when they are not sure if they can get copyright or patent. Keep in mind strategically when it is useful to protect marks.

- whether a color can be trademarked

We can have trademarks that are a color, sound, or scent. We allow these aspects to be trademarked b/c

-         trademarks are not about the incentive theory- it is not about creating more art or inventions. We don’t care about an incentive to create marks. we care about the owners of the marks to invest in injecting more info about goods into the market place. we want them to make their marks stronger b/c we are trying to reduce the cost of maintaining information  to consumers. trademark law is to protect the consumer by creating an incentive for owners to invest in and signal their ownership of a market. Marks tell about the origin of goods or services. We are also seeing a shift away from the notion that trademark is about reducing consumer confusion to a belief that it is to protect businesses. It is to protect the owners so that they can differentiate their product in the market place. We are protecting the good will and investment of the trademark holder in their brand and we don’t want other people to use the trademark.

-         Trademark law is to prevent others from copying and using a source identifying mark in commerce. By protecting against this, this reduces the cost to consumers

-               1. protects consumers against deception. The marks give certain qualities and they protect consumers so that they can rely on the mark. It also protects consumers against search costs so that they can just rely on a mark and not have to figure out if the product is reliable and of good quality. We want to reduce this to promote the economy.

-               2. investment theory- once you have a mark, you should put money into the mark. If you have a right in the mark then you will invest in it more and this is encouraged.

-               3. Property theory- you put money into the mark and so you own it.

Difference between  a trademark, a service name, etc.

Trademarks have to do with sales.

The constitutional provision- the commerce clause. The right to regulate interstate commerce gives congress the right to create a federal trademark statute.

The trademark statute is the Lantham Act.

The Lantham Act

Subject matter- only applies to the use in commerce. It is not like patent of copyright.

            The subject matter is broad.

Qualitex v. Jacobson

            Qualitex uses green/gold color on pads for its presses. Jacobson is accused of infringing and Jacobson says there is no valid trademark

            The issue is whether there can be a trademark on a color and the court says yes. But in order to be entitled to a trademark, the trademark must take on a secondary meaning. It is not enough just to be a color. You have to show a secondary meaning b/c it has to associate to the source. It does not have to associate to the product, it does not have to do with quality. It has to associate to a source. You don’t have to know the source, you just have to know the color is from a particular source. Either a mark is inherently distinctive enough so that  it signifies it is from a particular source- in this case you don’t need secondary meaning b/c it is built in. sometimes a mark is distinctive immediately and sometimes it has to acquire its trademark function over time- it has to acquire its secondary meeting over time.

            The def gives reasons why there should not be a trademark b/c

-         uncertainty of disputes to decide which colors are trademarked. The court says this is something it can do. it is not right to deny trademark just b./c it is hard to tell between colors

-         colors are in limited supply and if you allow colors to be trademarked then you will run out of colors. The court says there are a lot of colors. If we get to a point where the competitor does not have a color, then we will deal with it, but it is not a reason now to deny trademark. Trademarks can be colors and we careabout whether the colors can indicate the source of the goods. If the colors can do this then this meets the requirements of trademark.

Service Mark- a trademark for the sale of services

Trade Name- a corporate name and is not covered by federal trademark law. Trade name is covered by state law. A commercial name is any individual name used by a manufacturer, merchant, etc to identify their business, etc. it is the way of identifying a company or business. There are business that have one name but different marks. Pepsi- has a trademark, owns mountain dew which is also trademarked. A word can be both trademark and trade name - dow chemical- this is a trademark and a trade name

            How to tell when a word is used as a trademark or trade name. put brand between the trademark or name and the word after it- ex: dow brand polyenthene- this is a trademark  b/c you are selling it. There are state protections against using a confusingly similar name, but this is a matter of state law.

           

Two other marks:

Certification marks- certifying region or nation of origin (ex: champagne) a certification mark signifies region or nation of origin, characteristics of the good. This is a mark that is used by the person other than the owner in which the owner has an interest in letting people use it.

Collective marks- certify belonging to a cooperative. Says you are a member of a group- indicates membership is an association or collective. It is not about national origin.

These marks are available to those who are setting the standards or are members of the group. These marks service a similar function to that of traditional trademarks.

Trade dress

            There is a concept of a federal common law of unfair competition-the notion of unregistered marks, and federal common law most often protects design packaging and shape. Trade dress is design, packaging, shape- ex: Coke bottle.

            Trade dress is a design that has a source signaling function. This is often protected by the common law of trademark.

Requirements of protection of trademark

1. mark has to be distinctive

            This is a sliding scale of protection. The less the mark describes the product the stronger the mark. The less it describes the mark, the stronger the distinctiveness and the stronger the protection.

            Something is generic when it describes  the article. Generics can never be trademarked. Something could start out as a trademark, but then it can become generic and lose the trademark- ex: Kleenex, shredded wheat,

            A descriptive term must have secondary meaning for trademark protection, you don’t get it right away. It is something that you acquire over time.

            Zatarains case- 4 categories

                        1.suggestive

                        2.generic

                        3. descriptive

                        4.        

                        Court said it is descriptive so they have to see if there is a secondary meaning so as to acquire trademark function.

They show this by taking surveys. How do we know whether something is descriptive: 1. dictionary test- if word is in the dictionary then it is not fancifal

            2. ifit takes imagination then not descriptive

            3. whether they would need the term to describe the product. If it is necessary to make and sell the product, then the court will not view it as a trademark. 

            Classically there are 2 ways to assert secondary meaning

                        1. after a certain point under the lantham act- if the person uses the mark for 5 years then they have incontestability and have achieved secondary meaning

                        2.survey evidence- ask if people associate the mark or term with the brand- source identifying function.

                        Why do fanciful marks need the strongest protection? b/c we want to encourage businesses to invest in these marks b/c they are least likely to cause confusion. They don’t take anything from competitors.

2. priority- you have to be the first person to use it.

You don’t have to register for trademark unlike copyright and patent.

 =======================================================

Trademark
Questions to keep in mind
1. What is it?
2. What is the purpose?
• Trademarks, unlike patent and copyrights, are not about the incentive theory – not about creating more trademarks
• Once marks are created, want an incentive for creators to invest in them in a way to produce more information about goods and services in the market place
• Want to make marks stronger as an informational signal because (1) reduce costs of obtaining info about goods and services to consumers (2) to create more description about the origin of goods and services – helpful to consumers to make more informed choices
• Seeing a shift away from the notion that TM is about reducing consumer confusion (a tort theory) towards a shift that is really about protecting businesses (protecting property rights of owners who own brands and use them to differentiate themselves from products in marketplace and persuade to buy and to signal success of a product)
3. What is the purpose of legal protection for marks?
• Goal is to prevent others from copying and using a source identifying mark in commerce and by doing so, reduces the costs to consumers
• Reduces cost to consumers by
o Protecting consumers against deception (tort theory) → may not be the same quality than expect
o Protects consumers against the search costs → the time it costs to decide between two products
o Awarding investment in business goodwill → once have a mark, should put money in marketing, advertising and branding in order to bring down costs for consumer and reduce confusion
o Protecting business investment → put money in mark and therefore own something and protect it in a way the protect property

Origin of Trademark is consumer confusion

Types of Marks
• Trademark
• Service Mark
o Mark used for selling services, rather than goods
• Trade Name
o Ex: XYZ, Corp.
o State corporate registration – outside federal law
• Are state law protections for using similar names
• Companies are generally not allowed to have the same name
o Way of identifying a name of a business
o What is the difference btw a trademark and a trade name?
• There are not interchangeable
• A company can have one name and then have other trademarks – ex: Pepsi is a name that has Pepsi as a trademark but also owns Mountain Dew
• Can tell the difference using a quick test by putting “brand” name and product – if makes sense, probably a trademark because it what selling
o Why are they different?
• Certification Mark
o Certifies regional or other origin, material, mode of manufacturer, quality, accuracy, or other characteristics of goods and services
o Used by a person other than its owner in which owner has a bona fide intention to permit someone else to use in commerce
• Collective Marks
o Certifies belonging to organization – signals membership in a collective
o For example, belonging to specific untion

Constitutional Basis: Commerce Clause
• Right to regulate interstate commerce gives Congress the right to regulate trademarks
• 15 USC 1127: Lanham Act
o Only applies to use in commerce – not like patent and copyright → not about just having the brand
• Cannot have a brand or logo registered as a trademark unless produce is sold in commerce

Subject matter of trademark is extremely broad
• Qualitex Co. v. Jacobson Products Co., Inc.
o Can get a trademark on a color
o Court says that why shouldn’t be able to – the definition of trademark is not restricted
o Color can act as a symbol that distinguished a firm’s goods and identifies a source
o But need evidence that service’s source’s function and evidence may be collected over time
o Δ gives 4 reasons why the courts, as a matter of public policy, should not allow a protectable trademark in this case
• 1. Due to shades of colors, create confusions of the courts
• Court says not enough to deprive a trademark because it may be difficult to tell difference for the courts
• 2. Colors are a limited of supply and if allow a company an exclusive right to have a monopoly, will limit other companies and soon run out of companies.
• While closely related areas may not use the same mark but sources in different areas of the marketplace may use the same mark
• Court says there are a lot of colors out there and if face this problem, then deal with the problem → not a reason at the moment, to outlaw color as a trademark
• In order to get the trademark in something like color, what does the mark have to do?
o It has to take on a secondary meaning → have to associate to a specific source (doesn’t have to associate to the product or the quality) – don’t have to know the name of the source, just have to know the color associates to a specific source
• Sometimes requires to take on a secondary meaning over time because it is not very distinctive and obvious (such as the Starbuck’s mermaid)
• Can become a trademark over time


Requirements for Protection
• 1. Mark has to be distinctive → sliding scale of protection
o Generic: describes the basic nature of the article or services
• Ex: Vision Care
• Can never be trademarked
• “Genericide” → when a term becomes so generic as to lose protection, e.g. Kleenex, elevator, shredded wheat
o Descriptive
• Identifies a quality of characteristic
• REQUIRES A SECONDARY MEANING TO ACQUIRE LEGAL PROTECTION
• E.g.: Tender Vittles
• Also, geographic names; e.g. Nantucket Soft Drinks
• Also, personal names; e.g. O’Mally’s Beer
• Zatarain’s Inc. v. Oak Grove Smokehouse, Inc.
• Court says “Fish Fry” is descriptive so have to ask have consumers come to identify “fish fry” with Zatarain’s
o Determine this by doing surveys
• 2 ways to assert secondary meaning
o 1. If use mark for 5 years, deemed to achieve some kind secondary meaning
o 2. Survey evidence
• Court goes through extended discussion as to whether decide whether something is descriptive or not – 3 reasons
o 1. Dictionary test – to describe product
o 2. Imagination test – does it take imagination to think about what it does
o 3. Whether competitors need to use the term in the mark to describe their product – if takes something out of circulation that is need to engage in commerce (if mark is functional/necessary), court is not going to view as being a trademark
• Secondary meaning
• Primary significance of the term in the minds of the consuming public is to identify, not the product, but the producer
• Source need not be known exactly just known to be a particular source
o Suggestive
• Suggests rather than describes some particular aspects of the goods or services
• DOES NOT REQUIRE SECONDARY MEANING
• E.g. Coopertone
o Arbitrary or Fanciful
• Bears no relationship other nature of the good or services
• E.g. Exxon, Kodak, Haagen Dazes
• These are the strongest mark
• Why do fanciful marks gets the strongest protection? Incentive for people to invest in them because least likely to create confusion and don’t prevent competitors from entering the marketplace (don’t take anything away from potential competitors)
o Distinctiveness and Protection → Scope of protection
Generic Descriptive Suggestive Arbitrary
+ Secondary meaning
• 2. Priority → have to be first person to use it
• Don’t have to necessarily register – like copyright, unlike patent

Trade Dress
What is trade dress and how is it different from a trademark?
• Trade dress as packaging, design and shape – not logos
• Examples: shape of Coke bottle, restaurant décor, sweater design, etc.

What section of the Lanham Act applies to trade dress?

Why is it said to be protected by “federal common law”?
• Concept of federal law of unfair competition → unregistered marks
• Federal common law most often protects like design, packaging and shape

Statutory v. common law trade dress protection
• Often protected by common law of trademark

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CASES

Qualitex v. Jacobs

Question:   Can color be a subject matter of trademark?   Why do we allow color, sound, scent to be a trademark?

Purposes of a trademark (What is it, purpose? What is the purpose of legal protection for marks?)

• It is not about incentive theory (unlike patent, copyright- we want more people to create/innovate scientific inventions).  We don’t care about people’s innovations.  We want people to invest in a trademark as a way of ejecting more information about products/services in the market place.  Information signal to make their mark STRONG.
• We want to reduce the costs of obtaining information, reduce confuse consumers (trademark is about consumer protection !).  We create incentives for owners to invest in signals of their ownership in a mark--- more description about the origin of goods/services.  We think this is helpful to consumers to make more INFORMED choices.
• Tort theory: tort against consumers
• Property theory:  Property rights of owners who own their brands/ differentiate themselves from market places/  signal the success of the product.  WE are not only protecting consumers, we protect goodwill in the brand—unfair for property holder/trademark owner to allow others to use their trade investment built up.
• Copyright – 6 limited rights

[*origin of trademark is consumer confusion]

Legal protection:

To prevent others from copying and using the source that identify an article in commerce.

This reduces the costs to consumers—how?

      3 ways

1. protect consumers against deception (i.e. Tropicana,  Tropicaly juice)-  when consumers go to a store, spends more time figuring out which one to buy-  same logo, color etc.  If that product did not have the same quality, wastes money and time.

-  protect consumers against search costs (thinking about which one to get/ figuring out ):  this cost gets higher when you are shopping for expensive products (computer, resorts w. similar names)

2. rewarding investment in goodwill: not incentive to create a mark; once you have a mark, you spend a lot of money in advertising/ marketing.  Giving people rights in their marks, encourage them to invest inthem.

3. protecting business investment:   property concept;  you protect your own investment in the business marks they created.

TRADEMARK issues are becoming more important because now more people are overwhelmed w/ information available on Internet, TV, etc.

TRADEMARK- has to do w/ sale.

·        Constitutional basis

o       Commerce Clause:  right to regulate interstate commerce is what gives trademark law basis.

·        Statute

o       Trademark 15 USC 1127  (PRINT OUT statutes)

o       Important

§         “trademark includes”.... “applies in use in commerce”- must use it in commerce.

§         Subject matter is extremely broad.

o       TEXT

§         “The term trademark includes, any word, name, symbol, or device, or any combination thereof-

·        1 ) used by a person, or

·        2) which a person has a bona fide intention to use

§         IN COMMERCE and APPLIES to register on the principal register established by this chapter

§         TO IDENTIFY and DISTINGUISH his /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.

TRADEMARK

·        Know difference between trademark and service mark

o       Trademark

o       Service mark

QUALITEX v. Jacobson  [Color]

Infringer says : Qualitex does not have a valid trademark.  You cannot get a trademark on a color.

ISSUE:   Is color (green-gold) be a trademark?

HOLDING:  yes

REASONING

·        Subject matter in trademark is extremely broad

·        In order to be entitled to a trademark, a trademark has to:

o       Take on a secondary meaning (not enough just to be color): it must associate with the SOURCE (not the product- dry cleaning pad/ or about quality- good/bad):  must know that the green-gold color is from a specific SOURCE. 

§         A mark all by itself signal a relationship to a specific source.  A mark may be distinctive enough (inherently distinctive- ie. Nike swish logo, Coke logo- logo does not explain anything about shoes, but it gives a specific source)

§         Secondary meaning: to identify the source not the product itself

§         Inherently distinctive:  do not need secondary meaning/ right off the bet, the mark is distinctive. 

§         Example:  starbux mermaid – nothing about it says coffee.

·        Mermaid is functioning as a trademark.

o       A mark:  not so distinctive takes take to acquire a secondary meaning and become a trademark overtime (not automatic as in copyright + patent)

·        Color

o       Act as a identifying mark that traces back to the source

o        

·        Defendant’s objections  - 4 reasons (p620)

o       As a matter of public policy, we should not allow colors to be a trademark.

o       1)  Colors:  create confusions to courts in determining color shades/varieties

§         Court says:  we don’t deprive someone of trademark b/c it will be difficult for the courts

o       2) Limited supply of colors:   we will run out of colors if we allow colors to be trademarks

·        Court analysis

o       If we come to a point where competitors cannot use the color (run out of colors), then we will deal w/ it, but not now.

o       If COLOR – functions to “indicate the source of the goods”- then it satisfy the statute.

·        Examples of trademark

o       Drumming style

o       Décor of a restaurant

o       People argue that the way I drum signals a source (unlike Patent/copyright)

·        KEY POINT

o       COLOR serves as a mark that signals a source/ serves a source identifying function in commerce—trademark

o       Trademark rights: you only get these rights only when used in commerce, sales.

·        SERVICE MARK

o       Legal services—see slide

·        TRADE NAME (trademark / trade name are not interchangeable !)

o       Pepsi: trademark and is also a trade name.  Mountain Dew is owned by Pepsi.

o       DOW chemical-  DOW is a trade name and also a trademark that identifies a source (DOW chemical)

o       How do we know whether a mark is a trade name and trade mark

§         Example:  Dow brand chemical engineers (dow chemical engineer is a trade name)

·        Dow brand polyeehlin (trademark-  use in commerce)

·        TEST:  put ‘brand’ in the middle

·        Don’t confuse a company name with a trademark.

o       A corporate/ company name not covered in trademark law

o       Is covered by state law

o       XYZ corp

o       Names/titles/ used by persons associated w/ the company?

• CERTIFICATION MARK – see statute
  • Any word, name, symbol, device, or any combination
    • Used by a person OTHER than its owner
    • Which its owner has a bona fide intention to permit a person other than the owner to use in commerce
  • To certify regional or other origin, material, mode of manufacture, quality, accuracy, or other characteristics of such person’ goods/ services that
  • Example:  kosher products:  what qualifies as a kosher product- kosher organization sets the standard.
  • Florida orange growers
  • Calamada Olives- come from Greece
  • Swiss cheese – comes from swiss --- they all reduce consumer search costs.
    •  
• COLLECTIVE MARKS (reputation mark)
  • Florida orange grower group
    • Indicates membership of an association/ not about geographic origin
    • You belong to a specific group
  • Union:  not selling goods/services themselves but licensing their names to be used in commerce.
  • See P632-633: 

• TRADE DRESS
  • What is trade dress and how is it different from a trademark
  • Unfair Competition
  • You don’t have to register to get trademark protection
  • Think of trade dress as Design, packaging, shape (coke bottle shape, décor of a restaurant, design of a sweater, design of a source signaling a function)
  • “Federal Common Law” ?---- see in text

• Requirements for protection  (REVIEW in text – see chart)
• 1) requirement for trademark
  • Most important-  you mark has to be DISTINCTIVE !
• 2)  Priority (gotta be first person to do it)
• You don’t have to register

Distinctiveness (sliding scale protection)

• Generic: Describes the article itself—never be trademark (i.e can start out being distinctive but lose it over time – Kleenex:  signifies a single source, but overtime, people used it so much became generic)
  • When a term becomes so generic as to lose protection
  • Google- service mark
    • Becomes generic?  Even if we use it as a verb, competitors are not using ‘google’ as a verb to describe their products
• Descriptive:  (geographic, personal names, describes the characteristic of goods- “fish fri”)
  • Identifies a quality /characteristic of the goods
  • REQUIRES:  secondary meaning to acquire legal protection (Zatarain case p642)
    • E..g Tender Vittles
    • E.g. personal names-  O’Mally’s Beer
    • Nantucket juice (geographic names)
    • Secondary meaning: 
      • primary significance of the term in the minds of the consuming public is to identify, not the product, but the producer
      • Source need not be known exactly just known to be a particular source.
  • Zatarain v. Oak Grove
    • Survey:
  • 2 ways to assert secondary meaning
    • After a certain point (i.e. owner uses the mark for 5 years, then it will be assumed that you have achieve a secondary meaning)
    • By survey evidence (i.e. ask housewives about how they associate with the product)
      • How do we know who the consumers are?
      •  
• Suggestive
  • Suggests rather than describe (e.g. Coppertone – suggests certain lifestyle)
  •  
• Arbitrary or fanciful (stronger your level of distinctivenssà stronger protection
  • No relationship to the product (Haggen Daz, Kodak, Exxon)
  • When you saw the word alone, you will never be able to guess what the goods/services are.
• We want to prevent consumer confusion

Trademark

            :  goal is to protect consumers

           

• See SLIDE:    Distinctiveness and protection

See p640--- Court discussion of 4 reasons why something is descriptive

            1)  dictionary test:  if you find it, not fanciful

            2) imagination :  does it take imagination to know what it is

            3) whether comptitors would need the terms to describe their products (something is needed in order to engage in commerce/  if it is necessary to sell the product—then court will not view it as a trademark)

® --- when you register a trademark

TM-  is not a trademark

NEXT CLASS:   TRADE DRESS

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Distinctiveness - Trade Dress and Product Configuration

·         3 categories for determining whether a product’s trade dress is protectable:

o   Product packaging AND (CAN be inherently distinctive)

o   Product Design AND (CAN’T be inherently distinctive)

o   Tertium Quid (something indefinite or left undefined) related in some way to two (definite or known) things, but distinct from both. (CAN be inherently distinctive)

Two Pesos, Inc. v. Taco Cabana, Inc. (505 US 763 (1992))

FACTS : Taco opened a restaurant in San Antonio in 1978. Taco had 5 more restaurants in SA in 1985. Taco claims they had trade dress as a festive eating atmosphere, blah blah. In 1985, Two Pesos opened up a restaurant in Houston with a very similar theme. In 1986, Taco entered into the Houston and other markets and sued Two Pesos for trade dress infringement. 

PH : The jury below held that Taco had a non-functional, DISTINCTIVE, no secondary meaning trade dress. The Court of Appeals upheld this.

ROL : if you are descriptive, don’t need secondary, otherwise you do need it???

ISSUE[EC1]  : Whether secondary meaning is essential to qualify an inherently distinctive trade dress for protection under §43(a). We are dealing with unregistered as opposed to a registered trade dress. Is this trade dress distinctive? And if so, does secondary meaning required?

ANALYSIS : Since §43(a) doesn’t state, in its text, a requirement to treat trade dress[EC2]  differently from trademark + where secondary meaning does appear, it is a requirement with descriptive marks and not for inherently distinctive marks + a requirement for secondary meaning would undermine the purposes of the Lanham Act[EC3]  à making more difficult to get protection takes away motivation to promote their trade dress à has an anti-competitive effect since big companies could just steal away other start up’s good reputation.

HOLDING : If the trade dress is already inherently distinctive à secondary meaning is not required in order to get trade dress protection under §43(a). No, we are going to use the same standard for trade dress that we use for trademark.

·         Notes

o   2 types of protection under the Lanham Act, registered and unregistered trademarks

o   Why not just register the trade dress?

§ Flexibility, to not have to define what your trade sheet and evolve it over time

§ Lazy, cheap, etc.

Wal-Mart Stores, Inc. v. Samara Brothers, Inc.

FACTS : Wal-Mart commissioned a designer to make Samara Brothers knock off sweaters.

ISSUE : What exactly does it mean for a trade dress to be inherently distinctive?

ANALYSIS : POLICY ARGUMENTS:

Since we want to allow more competition in the area of product design + product design “invariably serves” other purposes (other than distinctiveness) à want to treat product design differently from product packaging. [EC4] 

HOLDING : Under §43(a) of the Lanham Act, you must show secondary meaning for unregistered product-design trade dress. PRODUCT DESIGN, LIKE COLOR IS NOT INHERENTLY DISTINCTIVE. (2 Pesos was PRODUCT PACKAGING, OR TERTIUM QUID[EC5]  which CAN BE INHERENTLY DISTINCTIVE.) Some categories of marks may not be inherently distinctive. (this is a really thin logical layer… seems to overturn 2 Pesos…)

The court introduces a nearly impossible test of product design vs packaging!

The “thing” has to function as a trademark.

Need to ask, “is it fanciful or is it merely descriptive?” 

Does it fall into “color/product design” that would make secondary meaning required?

Trademarked Musical Groups: (copy this slide!!!)

·         Performing group names can be trademarked

·         But raises unique problems of joint ownership and rights upon a change in membership

·         Does the mark belong to the group or to its members?

·         In one case, the live musical performance style of a rock music group (revolver) was protected…

Design

·         Copyright Design

o   Only those elements that are independent of the utilitarian aspects (Useful Arts Doctrine)

§ Only to the extent of artistic expression uninhibited by functional elements

§ Aethetic, nonfunctional elements of an article (pictorial, architectural, etc)

o   Tests

§ If there is a merger, not copyrightable

·         Patenting Design

o   New, original, ornamental feature

o   Industrial design

o   Appearance as opposed to utility

o   14 year term

o   Requirements - Novelty, originality, non-obviousness, and ???

o   Design elements built in to an article of manufacturing

o   Has to be VISIBLE while the object is in normal intended use

o   It can have a functional purpose!

o   Preventing similarity… or equivalence

·         Trademarking Design

o   Protect against consumer confusion

·         Trade Dress

o   Design and packaging

o   Can be registered, but usually are not (under §43)

o   Can’t be functional!

READ 3 EXTRA SLIDES

Filiing

Refusing registration

Opposition and cancellation and

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Trademark and Geography
- to have TM, you need to have 3 things;
o Distinctive mark – and a mark can earn distinctiveness with secondary meaning
o Be in use and Commerce
o Priority
• You must be the first person to be using the mark for the sale of a particular class of goods and services
• The protection goes to first user.
• When we talk about patent, whats the priority? → first to invent. (actual reduction to practice; constructive to practice).
• Similar rule here – rewarding the first person who uses the mark.

Intent to use filing
- remember concept of provisional patenting.
- We don’t have this concept in CR, b/c as soon as you fix it, you have your CR
- In Patent (examination regime) and TM, you can file an “intent to use” filing, which gives you 6 months to show use.
- Then you can get a 1 year extension (option 3 yr extension with cause)
- Priority will date from initial application for intent to use
- This puts people on notice
- Why this intent to use filing? → We are recognizing the business reality of doing business and getting into the commerce and ordering the labels (for example). Money has been invested and business built before product has been sold. Creating “buzz.”
o Now sending in website is proof of using your TMs in commerce

Lanham Act Rule of Priority
- T1, A uses the mark.
- B comes along and uses the mark later (T2), but he registers for TM protection in T3
- C comes along in T4 and uses.
- B is priority user and trumps C.
- A may be entitled to some limited rights b/c he was actually the priority user. Though he was not registered, but he was doing business under his logo. A has limited rights to use mark in the geographic area that he is doing business. A retains his rights in his geographic area. And B owns the rest of the country. C out of luck.

Common Law Rule of Priority
- A has idea in T1; uses in T2
- B has idea in T2; uses in T3
- C has idea in T3; uses in T4
- A trumps, he is the priority user in the markets in which he is operating.
- b/c B and C, B wins.

Geographic Limitations: Unregistered
- where you are the priority user, the first user, you are protected by Lanham Act protection under section 43, where you products are sold and advertised.
- You have the exclusive right to use your mark, not only in the geographic mark of operation, but in “the natural zone of expansion.” Protecting people are investing in advertising beyond their limited geographic area – e.g., regional flyer; yellow pages.
o What about e-commerce (talk about later)
- E.g., you are selling in town in IL, it might including neighboring town, the county.
- Remember Dos Pesos case, one of the implicit questions, was that Cabana was in Houston and Dos Pesos was in Austin, is the issue of what is the natural zone of expression? Where do they have rights b/c they are unregistered marks? What is the natural zone of protection for a Mexican restaurant in TX?

Lanham Act Rule of Priority: Post-TMRA
- A uses in T2
- B uses in T3
- C applies in T1; uses and registers in T4
- C WINS
- ADVANTAGE TO REGISTERING: AUTOMATIC NATIONAL PROTECTION
- Under the TM reform act (this created the concept of intent to use filing), if you apply for federal protection suing intent to use filing, your date of priority backdates to date of application. You will be deemed to use the mark at the date the application was filed.
- Coming back to conversation about patent: first to invent, wins. Invention means constructive reduction to practice. How do we determine this? → sometimes, the filing date BECOMES the priority date b/c its the best date we have.
- by analogy, you TM date, when you file is your date of use. For some people they are filing “intent to use” applications. You are entitled to backdate to the date on which you filed.
- The point is to protect people who aren’t quite ready to use.