Review Patent

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Patent © thin holes

scènes à faire?

• can exclude competitors • should not exclude competitors • no requirement of copying • copying required

• Injunctive Relief • impounding and disposition of infringing articles • Monetary Relief • actual damages; and or • statutory damages • infringer’s profits • Criminal Prosecution §412 (registration req’d)) • No Electronic Theft (NET) Act • Costs and Attorney Fees • prevailing party (w/i court’s discretion)

1 Injunctive Relief v.

According to well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. * * * This approach is consistent with our treatment of injunctions under the Copyright Act. Like a patent owner, a copyright holder possesses “the right to exclude others from using his property.” Fox Film Corp. v. Doyal, 286 U.S. 123, 127 (1932); see also id., at 127-128 (“A copyright, like a patent, is at once the equivalent given by the public for benefits bestowed by the genius and meditations and skill of individuals, and the incentive to further efforts for the same important objects” (internal quotation marks omitted)). Like the Patent Act, the Copyright Act provides that courts “may” grant injunctive relief “on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.” 17 U.S.C. § 502(a). And as in our decision today, this Court has consistently rejected invitations to replace traditional equitable considerations with a rule that an injunction automatically follows a determination that a copyright has been infringed. See, e.g., New York Times Co. v. Tasini, 533 U.S. 483, 505 (2001) (citing Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 578, n. 10 (1994)); Dun v. Lumbermen's Credit Assn., 209 U.S. 20, 23-24 (1908). eBay v. MercExchange, 547 U.S. 388 (2006)

2 We hold today that eBay applies with equal force (a) to preliminary injunctions (b) that are issued for alleged copyright infringement.

Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010)

3 Damages and Profits - §504(b)

Actual Damages Profits

$57 m • $50 – revenue for creating an additional pattern

$29 m

Damages and Profits - §504(b)

Actual Damages Profits $229 m

• $50 – revenue for $172 m creating an add- Apportionment itional pattern Sheldon v. MGM

$57m

4 Damages and Profits - §504(b)

Actual Damages Profits

$57 m • $50 – revenue for creating an additional pattern $2.35 $29 m

$2 m apportionment .0001176%

Statutory Damages - §504(c)

• per work (all parts of a compilation or derivative work constitute one work) • © must be registered prior to infringement (§412)

$750 < court award < $30,000

$200 $150,000 innocent infringement willful infringement

MyMP3.com service 4700 records @ $25,000 per infringement = $118 million settled for $53.8 million

5 When the defendant denies using the plaintiff’s work, or claims that the extent of the use is not infringing, infringement requires proof of: Infringement Analysis 1. Factual Copying 2. Copying as a Legal Matter

of resulting in Actual copying Copyright Substantial protected material similarity

is proved by is identified by which requires consideration of dissecting the substantial plaintiff’s work the type of people direct evidence similarity between into elements to whom the works seem similar an element of the defendant’s work then or by evidence of and a “Golden and Nugget” from the evaluating the plaintiff’s work access protectability of each element the nature of or ? the similarity “Inverse then substantial plus Ratio similarity of the two Rule” filtering out the works as a whole probative similarity and aka unprotected substantial similarity elements the degree of “Sliding scale”: or leaving only which are similarity that the fewer ways what the amounts to there are to fact-finder “substantial” express an idea, striking similarity “Golden Nuggets” considers the greater the when similarity must be evaluating

COMPARISON

Abie’s Irish Rose The Cohens and the Kellys

Protectable Elements Story - Main Idea Plot Outline Subplots General Characters and Scenes Specific Character Elements Text

6 7 Windows 1.0 Apple Mac OS System 1.1 (no overlapping windows)

Licensing Agreement 1. Microsoft may use and sublicense derivative works MEMORANDUM generated by Windows 1.0. 2. Microsoft will develop To: and release Word and Excel Threat to sue for Mac. * * *

1983 1985

8 Windows 2.03 Apple Mac OS System 3.0

COMPLAINT ) v. ) ) ©

1983 1985 1988

9 10 STANDARD FOR DETERMINING ILLICIT COPYING

Apple v. Microsoft (9th Cir. 1994) Virtual Identity

Substantial Similarity

Broad Narrow E.g., artisitic works E.g., predominantly functional works Range of Protectable, Unauthorized Expression

11 12 Data East: Karate Champ Epyx: World Karate Champ

The fifteen features listed by the court “encompass the idea of karate.” These features, which consist of the game procedure, common karate moves, the idea of background scenes, a time element, a referee, computer graphics, and bonus points, result from either constraints inherent in the sport of karate or computer restraints. . . . The lower court erred by not limiting the scope of Data East’s copyright protection to the author’s contribution – the scoreboard and background scenes. In actuality, however, the backgrounds are quite dissimilar and the method of scorekeeping, though similar, is inconsequential. Based upon these two features, a discerning 17.5 year-old boy could not regard the works as substantially similar.

Data East v. Epyx, 862 F.2d 204 (9th Cir. 1988)

13 US Code Title 17

C © A L 1. © Work Made for Hire I F O 2. Assignment Agreement? R N I • California Labor Code § 2870 A

14 freelance artist Works Made for Hire 1976 Act Regime

(1) employee (2) independent contractor • agency relationship– multi-factor test: • “specially ordered or commissioned” • Right to control work being performed • within an enumerated category: • Skill required • Source of instrumentalities and tools • contribution to collective work • Location of work • part of motion picture/AV work • Duration of relationship • translation • Right to assign additional projects • supplementary work • Hired party’s discretion • compilation • Method of payment • Role in hiring and paying assistants • test • Regular course of employer’s business • answer material for a test • Payment of employee benefits, taxes • atlas • within scope of employment (note: principally collaborative works) • written agreement signed by both parties expressly stating “work made for hire.”

Employee Confidential Information and Inventions Agreement 2. Ownership of Inventions [a] I agree to communicate to the Company as promptly and fully as practicable all inventions (as defined below) conceived or reduced to practice by me (alone or jointly by others) at any time during employment by the Company. I hereby assign to the Company and/or its nominees all my rights, title and interest in such inventions, and all my rights, title and interest in any patents, copyrights, patent applications or copyright applications based thereon. * * * [b] As used in this Agreement, the term “inventions” includes, but is not limited to, all discoveries, improvements, processes, developments, designs, know-how, data, computer programs and formulae, whether patentable or unpatentable.

15 California Labor Code § 2870

(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or (2) Result from any work performed by the employee for the employer.

1 Exhibit CB1

16 Bryant “Jade” Drawings MGA Jade Doll

1 Exhibit CB3

Bryant “Zoe” Drawing MGA Cloe Doll

2 Exhibit CB3

17 Bryant “Lupe” Drawing MGA Yasmin Doll

3 Exhibit CB3

Bryant “Hallidae” Drawing MGA Sasha Doll

4 Exhibit CB3

18 Bratz Group Illustration

Bryant Drawing Bratz Packaging

5 Exhibit CB3

Bryant Bratz Drawing Bratz Sculpt 6 Exhibit CB3

19 Infringement Analysis: Abstraction-Filtration-Comparison

LEVELS OF ABSTRACTION Upon any work . . . a great number of patterns of increasing generality will fit equally well, as more and more of the incident is left out. The last may perhaps be no more than the most general statement of what the play is about, and at times might consist only of its title; but there is a point in this series of abstractions where they are no longer protected, since otherwise the playwright could prevent the use of his "ideas," to which, apart from their expression, his property is never extended. Nobody has ever been able to fix that boundary, and nobody ever can. Nichols v. Universal Pictures Corp Story - Main Idea 45 F.2d 119 (2nd Cir. 1930) Plot Outline Subplots General Characters and Scenes Specific Character Elements Text

20 ABSTRACTION Works of Art: Fashion Doll

Concepts no protection Sketches

Studies

Drawings • modest protection Models

• robust protection Sculpt w/Face Paint

ABSTRACTION Works of Art: Fashion Doll Carter Bryant’s Work on Bratz (prior to MGA engagement)

• sassy, bratty fashion dolls Concepts • multi-racial/ethnic ensemble • big head/ big eyes/big feet/small body

Sketches • rudimentary; not instructional

Studies

Drawings

Models

Sculpt w/Face Paint

21 FILTRATION

• originality • merger • scenes à faire • functional features • inseparable features of useful articles

Protectable Expression

COMPARISON

Protectable Elements

Unprotected Elements Air Brushed Out

22 Bryant Bratz Drawing Bratz Sculpt 6 Exhibit CB3

FILTRATION

• originality • merger • scenes à faire • functional features • inseparable features of useful articles

Protectable Expression

23 FILTRATION

• originality • merger • scenes à faire • functional features • inseparable features of useful articles

Protectable Expression

24 Infringement Analysis

What is the proper role for the jury?

How should a jury be instructed?

What pre-trial process, if any, should the court engage in to frame the jury instructions?

Bratz Pre-Trial Case Management Order

A General Verdict Form

B Special Verdict Form; Jury Makes Ultimate Infringement Decision: The court plans to determine A prior to trial what aspects of the Bratz drawings are not B protectable and set forth those determinations in jury C instructions. The jury will then be asked to make the ultimate D infringement determination. E C Special Verdict Form; Judge Makes Ultimate Infringement Decision: The jury will be asked to resolve only discrete factual issues (such as what is the scope and content of the prior art), leaving to the court the ultimate copyright infringement issue (assuming that Mattel owns the drawings in question, do the dolls infringe – i.e., is there substantial similarity of protected expression)?

D Other

25 Pre-Trial Hearing

A Evidentiary Hearing: The court plans to hear percipient and expert witnesses regarding the protectability of the Bratz drawings. A B C D B Non-Evidentiary Hearing: The court plans to E hear argument and will not make any evidentiary findings regarding the protectability of the Bratz drawings.

Injunctive Relief v.

26 A constructive trust is an equitable remedy that compels the transfer of wrongfully held property to its rightful owner. Communist Party of U.S. v. 522 Valencia, Inc., 41 Cal.Rptr.2d 618, 623 (Cal.Ct.App.1995); see also Cal. Civ.Code § 2223 (“One who wrongfully detains a thing is an involuntary trustee thereof, for the benefit of the owner.”). A plaintiff seeking imposition of a constructive trust must show: (1) the existence of a res (property or some interest in property); (2) the right to that res; and (3) the wrongful acquisition or detention of the res by another party who is not entitled to it.

Mattel, Inc. v. MGA Entertainment, Inc. 616 F.3d 904 (9th Cir. 2010)

A constructive trust would be appropriate only if Bryant assigned his ideas for “Bratz” and “Jade” to Mattel in the first place. Whether he did turns on the interpretation of Bryant’s 1999 employment agreement, which provides: “I agree to communicate to the Company as promptly and fully as practicable all inventions (as defined below) conceived or reduced to practice by me (alone or jointly by others) at any time during my employment by the Company. I hereby assign to the Company . . . all my right, title and interest in such inventions, and all my right, title and interest in any patents, copyrights, patent applications or copyright applications based thereon.” (Emphasis added.) The contract specifies that “the term ‘inventions’ includes, but is not limited to, all discoveries, improvements, processes, developments, designs, know-how, data computer programs and formulae, whether patentable or unpatentable.” The district court held that the agreement assigned Bryant’s ideas to Mattel, even though ideas weren’t included on that list or mentioned anywhere else in the contract.

27 B. The very broad constructive trust the district court imposed must be vacated regardless of whether Bryant’s employment agreement assigned his ideas to Mattel. Even assuming that it did, and that MGA therefore misappropriated the names “Bratz” and “Jade,” the value of the trademarks the company eventually acquired for the entire Bratz line was significantly greater because of MGA's own development efforts, marketing and investment. The district court nonetheless transferred MGA's entire Bratz trademark portfolio to Mattel on the ground that the “enhancement of value [of the property held in trust] is given to the beneficiary of the constructive trust.” As a result, Mattel acquired the fruit of MGA’s hard work, and not just the appreciation in value of the ideas Mattel claims it owns.

28 split the baby in two Injunctive Relief

Compensatory Damages

“It is not equitable to transfer this billion dollar brand-the value of which is overwhelmingly the result of MGA’s legitimate efforts-because it may have started with two misappropriated names. The district court’s imposition of a constructive trust forcing MGA to hand over its sweat equity was an abuse of discretion and must be vacated.”

Mattel, Inc. v. MGA Entertainment, Inc. 616 F.3d 904 (9th Cir. 2010)

“America thrives on competition; Barbie, the all-American girl, will too.”

Judge Alex Kozinski

29 PROTECTABLE/UNPROTECTABLE ELEMENTS: DOLL DRAWINGS Protectable Elements Unprotectable Elements

The precise shape, size, and placement of the The resemblance or similarity to human form dolls’ anatomical features (the presence of hair, head, eyes, a nose, mouth, lips, ears, a neck, legs, arms, and a torso), The precise combination of features, like the Exaggerated features, including but not limited combination of a particular hair style, face to an oversized head, oversized almond-shaped paint, make up, and outfit, or precise body eyes, large lips, oversized feet, slim arms, and a proportions. diminished nose Hair style and color Idealized features, such as luscious lips, a slim waist, a small nose, and long limbs Make-up style and color The idea of a young, fashion forward female with an attitude, and the expression traditionally associated with that idea, including but not limited to heavy make up (eye shadow, blush, and eye liner), an “urban” look, defiant poses, defiant gazes, angular eyebrows, trendy clothing, shoes and accessories Precise fashions, clothing and accessories Features shared by a particular race or ethnicity (e.g., skin tone), postures that mimic the human form, and postures that are standard for the effective display of fashionable clothing.

PROTECTABLE AND UNPROTECTABLE ELEMENTS: SCULPTS AND SCULPT SKETCHES Protectable Elements Unprotectable Elements The precise shape, size, and The resemblance or similarity to placement of the dolls’ anatomical human form, anatomy, and features physiology Minute sculptural variations, Exaggerated features, including but including the precise angles at which not limited to an oversized head, the dolls’ anatomical features meet. oversized eyes, large lips, oversized feet, slim arms, a diminished nose, and a long torso Idealized features, such as luscious lips, high cheekbones, almond shaped eyes, a slim waist, a small nose, and long limbs Postures and poses that mimic the human form or are standard for the effective display of fashionable clothing, like arms that protrude outwards so that doll clothes and accessories can be easily removed Features necessary to make a fashion doll capable of mass production

30 SUBJECTIVE “INTRINSIC” TEST As to those works that have survived the objective or “extrinsic” test, you must now compare the works to the copyrighted works from the perspective of an ordinary reasonable observer. Whereas the objective test uses analytic dissection to compare specific elements of the works, this test considers the works as a whole, with a view to their total concept and feel. The standard you must apply in comparing the works as a whole depends upon the copyrighted work at issue. First, when comparing the final production sculpt (TX 17732 and/or TX 17733) to the original sculpt or sculpt drawings, you must determine whether the production sculpts (TX 17732 and/or TX 17733) is virtually identical overall to the original sculpt or sculpt drawings. Second, when comparing any of the four first generation Bratz dolls (TX 12286, TX 17561, TX 17558, TX 17551), and two subsequent generation Bratz dolls (TX 17546, TX 17529) to the Bratz drawings and sketches, you must determine whether the Bratz dolls are substantially similar overall to the original drawings and sketches. If Mattel fails meet the requirements of the subjective or “intrinsic” test as to any of the allegedly infringing works, you must reach a verdict of non-infringement that work. However, if Mattel meets the requirements of the subjective or “intrinsic” test as to a particular work, and in addition meets the objective or “extrinsic” test as to that work, then you must enter a verdict of infringement as to that work.

Trademark v. Tacking

Did Prior Use Achieve Secondary Meaning? Is trademark tacking an issue of law (judge) or fact (jury)? “[W]e have long recognized across a variety of doctrinal contexts that, when the relevant question is how an ordinary person or community would make an assessment, the jury is generally the decisionmaker that ought to provide the fact-intensive answer.” Hana Financial v. Hana Bank, 135 S.Ct. 907 (2015)

31 Trademark v. Tacking

Is trademark tacking an issue of law (judge) or fact (jury)? Application of a test that relies upon an ordinary consumer’s understanding of the impression that a mark conveys falls comfortably within the ken of a jury. Indeed, we have long recognized across a variety of doctrinal contexts that, when the relevant question is how an ordinary person or community would make an assessment, the jury is generally the decisionmaker that ought to provide the fact-intensive answer. See, e.g., United States v. Gaudin, 515 U.S. 506, 512 (1995) (recognizing that “ ‘delicate assessments of the inferences a “reasonable [decisionmaker]” would draw ... [are] peculiarly one[s] for the trier of fact’ ” (quoting TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 450 (1976); first alteration in original)); id., at 450, n. 12 (observing that the jury has a “unique competence in applying the ‘reasonable man’ standard”); Hamling v. United States, 418 U.S. 87, 104–105 (1974) (emphasizing “the ability of the juror to ascertain the sense of the ‘average person’ ” by drawing upon “his own knowledge of the views of the average person in the community or vicinage from which he comes” and his “knowledge of the propensities of a ‘reasonable’ person”); Railroad Co. v. Stout, 17 Wall. 657, 664 745 (1874) (“It is assumed that twelve men know more of the common affairs of life than does one man, [and] that they can draw wiser and safer conclusions from admitted facts thus occurring than can a single judge”). Hana Financial v. Hana Bank, 135 S.Ct. 907, 911 (2015)

Fair Use Who is the relevant perspective for evaluating fair use? Is the inquiry objective or subjective? The original artist (foreseeable uses) The appropriation artist The audience for the original work The audience for the appropriation work Who if any is the role for the jury? Resolve factual disputes Weigh the factors At what stage is fair use ripe for resolution? Summary Judgment Trial

32 V. John Doe

Motion to Quash 1. Improper Joinder 2. Undue Burden N.D. Cal. 3. Lack of Personal On the Cheap ) Jurisdiction v. ) st Does 1-5,011 ) 4. 1 A Right to Anonymity

If we do proceed to trial, our client will demand the maximum statutory damages . . . up to $150,000 [per work]

33 Number of Direct Infringement Suits Per Year 200

150

100

Number of Suits Filed 0 2009 2010 2011 2012 Year

Number of New Alleged Doe Defendants by Year

100,00

70,096 50,000

38,088 25,000 11,919

2009 2010 2011 2012

34 Figure 3: Percentage of John Doe Law Suits by Circuit, 2001-03, 2004-06, 2007-09, 2010-12, 2013